2009 ENERGY BUYERS’ CONFERENCE:

Guam Power Authority

John J. Cruz, Jr. P.E.

Oct. 25-27, 2009

Guam Largest, southernmost island of

the Mariana archipelago Composed of volcanic material

and limestone base seabed material from coral deposits

1,500 NM southeast of Tokyo 1,500 NM east of Manila 3,700 NM west-southwest of

Honolulu 6,000 NM west of San Francisco Tropical Marine climate generally

warm and humid with two seasons: Dry (December to June) and Rainy (July to November)

Average rainfall 90-110 inches

Guam Power Authority (GPA) Established in 1968, a public

corporation and an enterprise fund of the Government of Guam. Administered by the Consolidated Commission on

Utilities Regulated by the Guam Public Utilities

Provides electrical power service throughout entire island Supports Guam Waterworks Authority through

operation and maintenance of 18 MW emergency generators for water and sewage pump stations

553 MW Installed Capacity System Peak (272/281.5) 29 Substations 663 miles of transmission and

distribution lines $840 million assets $308 million 2007 RevenuesLabor = 10% of Total

Revenues

Guam Power Authority (GPA)

Organizational Chart

Generation Sourcing552.2 MW Installed Capacity

IPP – Independent Power Producers

PMC – Performance Management Contractor

IPP Hybrid, 10%

GPA, 29%

IPP, 23%

PMC, 38%

IPP PMC GPA IPP Hybrid

Generation Mix552.2 MW Installed Capacity

281.5 MW peak

96% Reserve Margin

Steam Turbine, 33%

Slow-speed Diesel, 30%

Combustion Turbine, 26%

Fast-Track Diesels, 10%

Generation MixBASELOAD UNITS

Guam Power Authority, Baseload Units

Cabras 1 HSFO/LSFO

Cabras 2 HSFO/LSFO

Cabras 3 HSFO/LSFO

Cabras 4 HSFO/LSFO

Piti 8 (MEC) HSFO/LSFO

Piti 9 (MEC) HSFO/LSFO

Tanguisson 1 (Pruvient) HSFO

Tanguisson 2 (Pruvient) HSFO

Total

Steam Turbine

Steam Turbine

Slow Speed Diesel

Slow Speed Diesel

Slow Speed Diesel

Slow Speed Diesel

UNIT Equipment TypeMaximum Gross Capacity (MW)

Fuel Oil Type

352

Steam Turbine

Steam Turbine

44.2

44.2

26.5

26.5

66.0

66.0

39.3

39.3

Generation MixCTs and Fast-Track Diesels

UNIT Equipment Type Maximum Gross Capacity (MW) Fuel Oil Type

TEMES Combustion Turbine 40.0 HSFO/LSFO

Dededo CT 1 Combustion Turbine 23.0 HSFO/LSFO

Dededo CT 2 Combustion Turbine 22.0 HSFO/LSFO

Macheche CT Combustion Turbine 22.0 Diesel

Yigo CT Combustion Turbine 22.0 Diesel

Marbo CT Combustion Turbine 16.0 Diesel

Tenjo Vista Unit 1 Fast-Track Diesel 4.4 Diesel

Tenjo Vista Unit 2 Fast-Track Diesel 4.4 Diesel

Tenjo Vista Unit 3 Fast-Track Diesel 4.4 Diesel

Tenjo Vista Unit 4 Fast-Track Diesel 4.4 Diesel

Tenjo Vista Unit 5 Fast-Track Diesel 4.4 Diesel

Tenjo Vista Unit 6 Fast-Track Diesel 4.4 Diesel

Manenggon Unit 1 Fast-Track Diesel 5.3 Diesel

Manenggon Unit 2 Fast-Track Diesel 5.3 Diesel

Talofofo Unit 1 Fast-Track Diesel 4.4 Diesel

Talofofo Unit 2 Fast-Track Diesel 4.4 Diesel

Dededo Diesel Unit 1 Fast-Track Diesel 2.5 Diesel

Dededo Diesel Unit 2 Fast-Track Diesel 2.5 Diesel

Dededo Diesel Unit 3 Fast-Track Diesel 2.5 Diesel

Baseload Plants

Fast-Track Diesel Units

CT Units

Energy Production (Thermal)KWH per Year

1,803,2621,876,948 1,810,642 1,803,501 1,807,766

31,46059,87662,005

33,41595,120

5.01%

1.75%3.31% 3.21%

1.71%

94.99%98.25% 96.69% 96.79%

98.29%

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

FY 2005 FY2006 FY 2007 FY 2008 FY 2009

0%

20%

40%

60%

80%

100%

Generation from Baseload Generation from Diesel-fired Units

% Gen from RFO % Gen from DSL

Gro

ss G

ene

ratio

n,

MW

H

Energy Production (Thermal)KWH per Year, per Plant Type

0%

20%

40%

60%

80%

100%

120%

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Steam Turbines Slow Speed Diesels CTs Fast Track Diesels

Fuel Consumptionin Thousand Barrels

0

500

1,000

1,500

2,000

2,500

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

0

20

40

60

80

100

120

140

160

180

HSFO LSFO Diesel

HSFO - monthly LSFO - monthly Diesel - monthly

An

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Fuel Delivery

RFO No. 6 Consumption estimates: Approximately 8,000 bbls/day Approximately 3 Million bbls/year

Delivered via ocean freight petro-shipping vessels chartered by off-island supplier Delivery Cycle = 31-33 Days Split-cargo combination of LSFO and HSFO Total Cargo Quantity (est.) = 240,000 to

300,000 bbls/shipment

Fuel Delivery

Ship is accommodated at the F-1 Dock Facility managed and operated by Shell Guam, Inc. Maximum LOA: 237 meters Maximum breadth: 45 meters Maximum vessel draft alongside: 14.8 meters Maximum displacement: 120,000 tons

RFO transported to shoretanks via a 24-inch diameter pipeline (Shell B-Line) GPA Fuel Farm Facility in Piti Shell Tank farm Facility in Agat

Fuel Delivery Scheme

RFO is transferred from ship to fuel farm via pipeline

RFO is delivered via Shipment every month. RFO is delivered from Ship to Fuel Farm through

the 24-inch pipeline Third-party certified petroleum testing laboratory

tests and inspects shipment

RFO is delivered to the different Baseload Plants via Pipeline 12-inch diameter pipeline from Tank 1934 & 1935

to Main Transfer Pump Station (MTPS) 6-inch diameter pipeline from MTPS to Cabras

and MEC plants 8-inch diameter pipeline from MTPS to

Tanguisson Plant

Diesel is delivered via: Pipeline for the TEMES and TENJO VISTA Plants Tanker Truck for all other Fast-Track Diesel and

CT Plants

Fuel Delivery and Issuance

Fuel Storage

30 – 60 days RFO Reserve Fuel Storage Capacity

RFO: 1,125,800 BBLS ( 47,283,672 Gallons) Diesel: 38,681 BBLS (1,624,729 Gallons)

Bulk Storage Ownership 2 Owned by GPA 3 Leased from Shell

All Plant Storage Tanks and Diesel Storage Tanks owned by GPA

Management Contract for operations of Fuel Bulk Storage Facility

Fuel Storage Facilities

Bulk Storage Capacity Pumpable Inventory

BBL GAL BBL GAL

RFO BULK STORAGE 1,006,000 42,252,000 905,400 38,026,800

RFO PLANT STORAGE 83,800 3,519,600 75,420 3,167,640

TOTAL RFO INVENTORY CAPACITY 1,089,800 45771600 980,820 41,194,440

TOTAL DIESEL INVENTORY CAPACITY 38,681 1,624,729 30,945 1,299,783

HSFO = 680,000 bbls

LSFO = 326,000 bbls

Fuel Specifications -RFO High Sulfur Fuel Oil, 2.00%S Max / Low Sulfur Fuel Oil, 1.19%S Max

Characteristics Limits ASTM Test

Sulfur, Wt%, Max HSFO / LSFO 2.00 / 1.19 D-4294

Pour Point, Maximum 70 ºF or 21 ºC D-97

Flash Point, Minimum 150 ºF or 66 ºC D-93

Fire Point, Deg. F., Minimum 200ºF or 94ºC D-92

Viscosity, SSU at 100 Deg F., Max./Min. 1500 / 600 D-445

Sediment by extraction, Wt. % Max. 0.50 D-473

Water by Distillation, Vol. % Max. 0.50 D-95

Vanadium Content, PPM, Max. 80 D-5708

Gross Heating Value, Guaranteed MBTU per barrel 5.9 D-240

Aluminum Plus Silicon PPM Maximum (Individual results to be reported separately)

80 D-5184

Ash Content, Wt. %, Max. 0.10 D-482

Carbon Residue, Wt. % Conradson,Maximum 15 D-4530

Gravity, Deg API at 60 Degrees F, Min / Max 14.0 / 23.0 D-287

Total Sediment – accelerated, % mass, max 0.15 ISO 10307-2

Compatibility

a) Cleanliness Ratio, max 2 ASTM D-4740

b) Compatibility Ratio, max 2

Fuel Specifications - Diesel

DIESEL – For Fuel Deliveries to Baseloads, TEMES, CTs, Water Systems Generators and Fast Tracks

Characteristics Specification Limits Test methods

GRAVITYAPI at 60 ºF, Min./Max. 32-42 D-1298

FLASH POINT, PMCC deg. F. 140 MIN D-93

SULFUR CONTENT, Wt. % 0.50 MAX D-129

APPEARANCE @ambient temp. Clear & bright VISUAL

POUR POINT, Deg. F. 50 MAX D-97

CETANE Index Number (Calc.) 48 MIN. D-976

WATER & SEDIMENTS by centrifuge, Volume %. 0.050 MAX D-1798

CARBON RESIDUE 10% Bottom, Wt. %. 0.200 MAX D-189

CORROSION, Copper Strip, 3-hrs @ 212 deg. F. ASTM No. 2 MAX D-130

ASH CONTENT, Wt. %, 0.005 MAX D-482

NEUTRALIZATION Number, Total Acid Number, mg KOH/gm sample

0.200 MAX D-974

COLOR, ASTM Color 3.0 MAX. D-15000

Guaranteed Heating Value, MMBTU/bbl 5.9000 D-240

Metals, PPM Baird AE

Fuel Specifications - Diesel

DIESEL – For Fuel Deliveries to Tenjo Vista Diesel Plant

Characteristics Specification Limits Test methods

GRAVITYAPI at 60 ºF, Min./Max. 32-42 D-1298

FLASH POINT, PMCC deg. F. 140 MIN D-93

SULFUR CONTENT, Wt. % 0.30 MAX D-129

APPEARANCE @ambient temp. Clear & bright VISUAL

POUR POINT, Deg. F. 50 MAX D-97

CETANE Index Number (Calc.) 48 MIN. D-976

WATER & SEDIMENTS by centrifuge, Volume %. 0.050 MAX D-1798

CARBON RESIDUE 10% Bottom, Wt. %. 0.200 MAX D-189

CORROSION, Copper Strip, 3-hrs @ 212 deg. F. ASTM No. 2 MAX D-130

ASH CONTENT, Wt. %, 0.005 MAX D-482

NEUTRALIZATION Number, Total Acid Number, mg KOH/gm sample

0.200 MAX D-974

COLOR, ASTM Color 3.0 MAX. D-15000

Guaranteed Heating Value, MMBTU/bbl 5.9000 D-240

Metals, PPM Baird AE

GPA has a contract for the Management of the Fuel Bulk Storage Facility (Fuel Farm) Contractor is responsible for managing the fuel

farm, receiving fuel supply, and delivering fuel supply to the different power plants

Third-party certified petroleum testing laboratory tests fuel

Bid for the management and operations of the bulk storage facility is in progress New contract shall include the management of

GPA’s fuel pipelines Focus on reducing inventory losses and

maintenance of GPA facilities

Fuel Bulk Storage Facility

GPA’s Key Fuel Suppliers

Off-island Supplier Contract with a Singapore-based RFO Supplier Currently contracted to BP Singapore, PTE Ltd.

On-island Suppliers On-island supplier for Diesel Fuel Oil (0.5% and

0.3% Sulfur) Current contracted to Shell, Guam Inc. New Bid in process

Current Supplier: BP Singapore, PTE Ltd.

3 Years (February 01, 2007 to January 01, 2010) w/ 2 Years Extension Option

Quantity = Close to 3 Million BBLS per year Pricing = Market + Fixed Premium

Market Price = Average of previous month’s posting

Delivery Details (Spot/term, FOB delivered, etc.)

RFO Supply Contract

Pricing = Market + Fixed Premium Market = Average of previous month’s posting

New Contracts shall be awarded on December 2009

Supply of 0.5% Sulfur Diesel Fuel Supply except Tenjo

Supply of 0.3% Sulfur Diesel Fuel Supply for Tenjo Vista Power Plant

Includes options for: Various delivery methods (tanker truck,

pipeline) Adopting 500 PPM Diesel Fuel

*pending manufacturer’s recommendations on compatibility, specification limits for fuel characteristics

Diesel Fuel Oil Supply

GPA’s Integrated Resource Plan Identifies key assumptions specific to future

electric needs on Guam Viable resource and demand side technologies Load and Fuel forecasts Environmental Impact and Constraints

Uses a licensed resource expansion optimization tool (STRATEGIST) for modeling framework

Incorporates a Stakeholder Process

Demand Forecast

250

275

300

325

350

375

400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Fiscal Year

MW

2007 - 275 MW

2016 - 348 MW

2011 - 331 MW

2008 - 298 MW

Demand Forecast (continued)

250

300

350

400

450

500

550

600M

W

Actual High Tourism/High Infrastructure High Tourism /Low Infrastructure

Low Tourism/High Infrastructure Baseline

Installed Capacity by 2008

1 Day in 4.5 Year Reserve Curve

H/H Growth Rate: 2.28% (2006-2016)3.13% (2006-2012)5.65% (2010-2011)

Two Largest Units Capacity Resrve Curve

Load Forecasts

Installed Capacity (MW)

Baseline

N-1

N-2Reserve Margin

150

200

250

300

350

400

450

500

550

600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

MW

Installed Capacity (MW) Baseline N-1 N-2 Reserve Margin

GPA created an Integrated Resource Plan (IRP) which addresses Fuel Diversification and Renewable Energy Requirements (PL 29-62) by Recommending:

• Acquisition of renewable resources to offset the high price of fuel, and

• Conversion of existing plants to use Liquefied Natural Gas as an additional measure to lower impact of petroleum volatility and lower fuel expenses.

GPA has initiated the acquisition for renewable resources (Wind, Solar, Hydro, Biomass, Geothermal, OTEC, Wave).

Moving Forward

Phase 1 of Renewable Bid in final stages of procurement Projects > 5MW and up to 40 MW (for Phase I) Commissioning Period within 36 Months Commercially viable with min. 1 year of

performance data RFP for Wind Monitoring in progress Pilot project for 1 MW Wind Turbine in progress

Phase 2 of Renewable Bid to be announced by Second Quarter of 2010

Moving Forward

Future Fuel Demand Outlook Generation by Fuel Type

(Base 9-3)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000G

WH

DSL LNG RFO WIND SWAC

Future Fuel Demand Outlook Expected increase in demand due to military

build-up Increase in use of Diesel-fired Units Conversion of Diesel-fired Units to LNG/CNG Utilization of Renewable Energy Resources such as

Wind Power, Geothermal, Solar and others

Use of HSFO and LSFO dependent on weather conditions GPA continuously improves on its operations to

maximize efficiency of the units Improvements on HSFO and LSFO consumption

monitoring and forecasting Research on-going regarding additional fuel storage

facilities

Shift to 500 PPM Diesel Fuel Oil (0.05% Sulfur) Current issue is to determine the impact of using

500 PPM Diesel to each plant equipment

Future Fuel Quality Outlook