25 Long range plan to stabilize future electrical costs

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6. Saving Hundreds of SMillions Our long-term projections estimate savings at hundreds of millions as the contract continues. 7. Contract Protections This contract has important protections for CAPP/STAP members including a first lien on major Luminant assets, including all baseload power plants. Contract Details • This is an agreement for CAPP/STAP to purchase, on behalf of its members, 150 megawatts of energy from Luminant and its subsidiaries at far more predictable ener9Y prices over a 24-year period. Energy is being purchased for municipal use - not for residential use. • CAPP/STAP will prepay part of the contract on behalf of participating cities by issuing general revenue bonds. By prepaying, our groups can secure more competitrve and predictable energy prices than those currently avatlable on the retail market. • The energy supplied by Luminant will come from seven power generation units at three power plants. Contracts like this usually come from only one power plant, so this agreement provides CAPP/STAP members with additional power certainty. • Energy obtained under the contract will supply about 70%, or the base component, of a city's annual energy needs. The remaining 30% associated with variable power reqwrements (e.g. peak consumption during hot summer days) will be obtained under supplemental one- to three-year contracts with prices that more closely track current retail market electricity prices. • Members choosing to take part in the contract will sign a contract with CAPP/STAP agreeing to pay for their share of the prepayment portion of the base purchase of electricity. Prorldi+ig Stabilifs irt liacrgs (:osts frr 7esas C'ittes Who's Involved Who are CAPP and STAP? CAPP is a non-profit group created in 2001 that pools Texas cities' electric power needs in order to negotiate lower, more stable prices through bulk purchasing. Along with STAP, these organizations have more than 150 political subdivision members across the state that have saved more than $100 million since the Texas electriciry market deregulated in 2002. CAPP and STAP are both run by boards of directors made up of city officials. For more information, visit www.capptx.com. Who is Luminant? Luminant is the largest competitive electric generating company in the state. Previously known as TXU Power, Luminant has over 18,300 megawatts of generation in Texas, including 2,300 megawatts of nuclear and 5,800 megawatts of coal-fueled generation capacity. Visit www.luminant.com for more information. Luminant is the largest purchaser of wind-generated e/ectricity in Texas and fifth largest in the United States. Prnriding Slabititv iri Errerxv Costr ra Tesas Cities 'x 000171