August 30, 2010

Hurricane Ike Timeline Saturday9/13/08 Hurricane Ike makes landfall Lynchburg Pump Station lost power at 1 a.m. Power was restored by end of the day EWPP and SEWPP lost raw water resources for ~17 hours, system pressure dropped below 20 psi. Issued Boil Water Notice Sunday9/14/08 Began regulatory sampling of SEWPP service area Monday9/15/08 Began regulatory sampling EWPP service area Trinity River pump station regained power Tuesday9/16/08 Released majority of service area Re-sampled small portion of EWPP service area Wednesday9/17/08 Rescinded Boil Water Notice

Senate Bill 361  Applies to Affected Utilities providing water services in Harris County  Emergency Operation = 35 psi for an Extended Power Outage (more than 24 hours)  Install and maintain automatically starting auxiliary generators or distributive generation facilities for each raw water intake pump station, water treatment plant, pump station, and pressure facility necessary to provide water to wholesale customers.

SB 361 & TCEQ Rule Compliance Timeline Jun 2009SB 361 Signed COH received unsolicited proposals Oct 2009TCEQ Final Rule Feb 2010RFI and Interviews Energy Consultant Contract Mar 2010Emergency Preparedness Plans (EPPs) Due TCEQ Grants 90-day Extensions to COH May 2010RFP Published Jun 2010EPPs submitted to TCEQ RFP Interviews and Selection Process - PresentExtended EPP Implementation Deadline (10/1/2010) RFP Contract Negotiation

RFP Review Summary  6 Proposals Received  Annual Capacity Price Range $3.5 - $11.0 (Excluding CWA)  Interviewed all 6 proposers

Current Status  NRG was selected as the finalist who has most successfully responded to the RFP and in the subsequent interview  Next Steps  Start final negotiation with NRG  Have contract signed before October 1, 2010