CPS Energy & JBSA Sustainability Partners Pursuing A “Green” San Antonio June 9, 2010

1. CPS Energy & JBSASustainability Partners PursuingA “Green” San AntonioJune 9, 2010

2. Energy Efficiency and Demand Response: “The 5th Fuel” NUCLEAR NATURAL GAS RENEWABLES ENERGY EFF/DEMAND RESPONSE COAL

3. Peak Demand vs. Capacity through 2035

4. 2020 Peak KW Reduction Estimates by End Use

5. CPS Energy’s Partnership with the Military • The Largest Rebate in CPS Energy’s history occurred with our military partner Lackland AFB. $946,596.00 - A major lighting retrofit covering some 130 buildings. - Over 2MWs in power use reductions from lighting. • Randolph AFB most recently benefitted from a chiller replacement obtaining a rebate of $67,500 from CPS Energy. • Discussions regarding thermal storage installations are surfacing again that will take advantage of our “Custom Rebate” Program and offer multiple MWs in power reduction.

6. Commercial EE Programs 2010 • High Efficiency Equipment Rebates • HVAC Equipment • Premium High Efficiency Motors • Reflective or Cool Roof Products • Energy Star Commercial Cooking Equipment • Commercial and Industrial Custom Incentive Program • This program provides incentives for energy efficiency upgrades that may not be covered by the standard equipment rebates. • Encourages the installation of multiple measures with a rebate designed around the MW reductions the client obtains in total.

7. Commercial EE Programs(Continued) • Custom program offerings will include: • The highly successful large lighting retrofit program. • Custom HVAC installations such as complex chiller replacements, variable frequency drives, etc. • Refrigeration compressor and condenser replacements and other custom refrigeration projects that lower energy use. • Retro-commissioning Program • A new program for 2011 that employs comprehensive energy audits for commercial clients targeting the end use measures providing the most significant energy reduction. • Incentives revolve around audit fees and rebates for resultant equipment upgrades.

8. Renewable Energy for San Antonio • CPS Energy has contracted through PPAs for renewable energy to serve our SA community - 859 MW of Wind Capacity • 41 MW of Plant Scale Solar Capacity • 5 MWs Distributed solar PV power at 27 ¢/kWh. “Solartricity Producers” • CPS Energy’s goal is 1200MWs of renewable energy capacity moving to 1500MWs beginning in 2012. • Patrons have the opportunity to assert their “Windependence” via the purchase of Windtricity. • Retail availability of “Solartricity” will follow as the inventory of solar power comes on line.

9. Pros Cons Resource Options: Renewables – Wind Farms * Includes federal incentives. Large Scale Wind No emissions No fuel costs No water use “Gas competitive” electricity cost (today’s cost: 6-7 ¢/kWh)* Variable output Low capacity factor during peak demand hours Reliability requires location diversification, gas peakers, solar profile compliment

10. Pros Cons Resource Options: Renewables – Solar Farms * Includes federal incentives. No emissions No fuel costs Limited water use for PV Variable output Reliability requires utility scale storage High electricity cost (today’s cost: 15-20 ¢/kWh)*

11. Renewable Generation Profiles

12. In Closing • CPS Energy cherishes its relationship with JBSA and looks forward to future opportunities to partner together for a sustainable energy future. • JBSA has already begun its aggressive use of energy efficient technologies which fuels CPS Energy’s “5th Fuel Power Plant”, STEP. • We are confident that JBSA will pursue other innovative approaches to energy use reduction like thermal storage and will consider deploying renewable sources of power on site. CPS Energy stands ready to be that strong energy partner!