Dhruv Patel January 18, 2013 NAPCO Conference · Solana Overview/Update Project Overview Location: Gila Bend, AZ Gross Capacity: 280MW Net Output: 250MW Technology: CSP Construction

Solar Development

Dhruv Patel

January 18, 2013

NAPCO Conference

Agenda

AZ Sun Program Overview

Procurement Approach

EPC Contract Structure & Credit Support Requirement

Counterparty Credit Evaluation

Solana Update

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Program to develop 200 MW of APS-owned utility-scale solar PV

Key element of diversifying the way we procure renewables

Developed by third-party contractors and equipment suppliers

Generating Facility

Capacity (Net MW ac)

In-Service

1) Paloma 17 Sep 2011

2) Cotton Center 17 Nov 2011

3) Hyder I 16 Feb 2012

4) Chino Valley 19 Nov 2012

5) Foothills 35 2013

6) Hyder II 14 2013

7) Gila Bend Solar 32 2014

8) TBD 50 2015

Total 200 Note: First 100MW program filed with ACC October 2009; approved March 2010

AZ Sun Program Overview

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AZ Sun Projects In Operation

Paloma Cotton Center Hyder I

• Capacity: 17MW

• Thin Film, fixed arrays

• Developed by: First Solar

• Location: Gila Bend, AZ

• Capacity: 16MW

• C-Si, 1-axis tracking

• Developed by: SunEdison

• Location: Hyder, AZ

• Capacity: 17MW

• C-Si, 1-axis tracking

• Developed by: Solon

• Location: Gila Bend, AZ

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AZ Sun Projects In Operation/Construction

Chino Valley Foothills Hyder II

• Capacity: 19MW

• C-Si, 1-axis tracking

• Developed by: SunEdison

• Location: Chino Valley, AZ

• Capacity: 14MW

• C-Si, 1-axis tracking

• Developed by: McCarthy

• Location: Hyder, AZ

• Capacity: 35MW

• C-Si, 1-axis tracking

• Developed by: AMEC

• Location: Yuma, AZ

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Procurement Approach

Identify viable sites for development

Execute the land agreement

Complete environmental, GeoTech,

interconnection and land studies

Issue RFP to hire EPC developer

Secure construction

permits Construct the project

Commission the facility

Turn-key to aps EPC

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EPC Contract Structure/Credit Support Requirement

Contract Execution

Counterparty post Credit Support

(5 days after execution)

APS Issues NTP

Counterparty Obtains Construction Permits

Start of construction

Project completion

Performance Guarantee Period Ends

(Credit Support requirement lowered by 50%)

2 Year

5 Year

Supplier Warranty Period Ends

(Return Credit Support to Counterparty)

Credit Support Requirement for 32MW Solar Project

Contract Execution to end of Performance Guarantee (PG) Period: $6 million

End of PG Period to end of Supplier Warranty Period: $3 million

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Counterparty Credit Evaluation

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Liquidity

Balance Sheet Review (Short term)

Internal Cash-Flow Generation

Short-term Liquidity Sources

Capitalization

Capital Structure Composition

Debt Profile

Balance Sheet Analysis (Long term)

Operations Profile

Operational History

Corporate Structure

Profitability History/Trends

Solana Overview/Update

Project Overview

Location: Gila Bend, AZ

Gross Capacity: 280MW

Net Output: 250MW

Technology: CSP

Construction Commenced: Dec 2010

COD: July 2013

Interconnection: Panda Substation (230kV)

Current Status

Overall project 85% complete

Parabolic Trough Collector installation 91% complete

230kV Transmission line installation complete

Salt melting for the storage expected to start Dec 2012; Melting expected to be complete by July 2013

On track to achieve July 2013 commercial operation

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Solana

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