Unlocking value from existing utility assets NARUC Meeting – February

© 2011 The AES Corporation, All rights reserved. Safe Harbor Disclosure 2 Certain statements in the following presentation regarding AES’s business operations may constitute “forward-looking statements.” Such forward-looking statements include, but are not limited to, those related to future earnings growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES’s current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to accurate projections of future interest rates, commodity prices and foreign currency pricing, continued normal or better levels of operating performance and electricity demand at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth from investments at investment levels and rates of return consistent with prior experience. For additional assumptions see the Appendix to this presentation. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES’s filings with the Securities and Exchange Commission including but not limited to the risks discussed under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, as well as our other SEC filings. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

© 2011 The AES Corporation, All rights reserved. Our Mission: Safe, Reliable, Sustainable.

© 2011 The AES Corporation, All rights reserved. AES battery-based capacity offering 4

© 2011 The AES Corporation, All rights reserved. 72 MW, 4 Sites, 3 Markets : Los Andes, Chile (12MW) 2010: Johnson City, NY (8MW) 2011: Laurel Mountain, WV (32MW) and Angamos, Chile (20MW)

© 2011 The AES Corporation, All rights reserved. Storage - Unlocking value for decades... 6 FirstEnergy 435 MW Seneca pumped storage facility in PA.

© 2011 The AES Corporation, All rights reserved. Prudent & Progressive (back then) 7

© 2011 The AES Corporation, All rights reserved. Gas: Untapped Value & Insurance Policies MW Combined Cycle Gas Efficient (6800 BTU/kWh) Among cleanest 50 MW Gas Peaker Inefficient (10500 BTU/kWh) Higher emissions <50% utilization*<10% utilization* *U.S. fleet average capacity factors for similar plants, EIA.

© 2011 The AES Corporation, All rights reserved. Reliable, but Sustainable? Prudent, but Progressive? 9 Source: FERC, EIA NYISO Load Curve, July 6 th, %

© 2011 The AES Corporation, All rights reserved. Energy Storage: Reliable & Sustainable 10 Capacity Emissions Profile Flexibility Profile Emissions- Free Emission- bearing InflexibleHighly Flexible Nuclear (4%) Hydro (3%) Wind Solar Geothermal Coal (3%) Nat. Gas (46%) Demand Response Size represents share of planned capacity additions in the U.S , Source: EER (42%) CCS (2%) absorbs as generated min. load support

© 2011 The AES Corporation, All rights reserved. 11

© 2011 The AES Corporation, All rights reserved. AES battery-based capacity offering 12

© 2011 The AES Corporation, All rights reserved. Energy Storage Capacity: Unlocking Value Flexible Emissions-Free Capacity

© 2011 The AES Corporation, All rights reserved. 32 MW, less than 1 acre, no emissions MW Laurel Mountain Wind Project with 32 MW BESS Serving PJM Regulation Market

© 2011 The AES Corporation, All rights reserved. Years of reliable performance… COD: Dec-2009 Size: 12 MW CA: 100% 1:02 am 1:16 am Pre-programmed digital response when frequency dropped below 50 Hz Loss of 200 MW in Grid: November 24th 12 MW Los Andes Project, Chile

© 2011 The AES Corporation, All rights reserved. Reliable & Sustainable, Prudent & Progressive 16 No local emissions from the facility. The most flexibility to support reliability needs and high penetration for renewables at system level. Ability to create load to maintain or increase the value of nuclear, wind, and low CF CCGT.

© 2011 The AES Corporation, All rights reserved. More regulatory support is needed… Planning: RPS (renewable portfolio standard) programs should consider capacity in addition to energy and plan for coordinated deployment goals. Procurement: Regulators should encourage long-term contract structures from markets and utilities for emissions-free, flexible capacity resources. Market Updates: Market mechanisms should reward flexibility and precision in “pay-for-performance” models. Incentives: Full ITC (investment tax credit) treatment for energy storage to level the playing field with other emissions-free grid resources (such as solar). 17