NRG’s PowerSAM Job Aide

1. NRG’s PowerSAM Job Aide

2. PowerSAM(Statistical Analysis Model): NRG uses this tool when evaluating and requesting funds for capital and expense projects. PowerSAM provides financial analysis calculation based on market data. Additionally, it controls and records each step in the approval process as well as forwards the approval documents to the appropriate approver based on the NRG Delegation of Authority (DOA) and the commitment process workflow. • Table of Contents • Introduction • Portfolio • Projects • Reports • Review and Commitment • Administration • Economics • Financial Forecast • Terms & Definitions

3. When a user is connected to the NRG Intranet, in the URL Field type “PowerSAM” • PowerSAM recognizes the user’s credentials and loads their system profile through a Passive Login Introduction to PowerSAM Page 3

4. A user’s profile setup will determine the access rights to the options available within PowerSAM • To have your profile modified contact Business Operations Contacts Introduction to PowerSAM Page 4

5. Navigating through PowerSAM begins with selecting one of the primary function tabs located along the top of the screen: The Portfolio Tab provides the user with a quick overview of projects, a brief summary of project economics, as well as a simple method of selecting and sorting projects. Introduction to PowerSAM Page 5 The Projects Tab allows the user to create new projects and edit existing projects.

6. Notes Introduction to PowerSAM Page 6

7. The Portfolio screen is designed to provide the user with a: • Quick overview of projects for your station or region • Method for filtering, sorting, and selecting projects • Quick access into project details when the user selects a project Portfolio Page 7

8. To show additional project detail information click on the arrow Portfolio Page 8 TIP: • The portfolio screens can be sorted ascending or descending individually by clicking in the field headers.

9. On the Portfolio Tab there are two different search options available: • Key Word and Advanced Filter • Key Word Search • By typing in “boiler,” the system searches key fields for the word “boiler” Portfolio Page 9

10. Advanced Filter Search • By clicking on the icon, the Advanced Filter window appears • The drop-down arrow in the “Field” section allows the user to define the search criteria • Once all criteria are selected the user then clicks the “Apply” button Portfolio Page 10  

11. Batching Projects • From the Portfolio tab, users can create batch economic runs for multiple projects: • Select the projects you would like to batch Portfolio Page 11 TIP: • Select the “Actions” link located on the upper right of the screen • Click on one of the “Batch” commands to begin the analysis run • Following submission of projects into the Analysis Queue, users will still be able to access and modify other projects.

12. Notes Portfolio Page 12

13. These are the page links available on the projects tab. The links enable the user to input project data. The “Actions” link allows the user to select certain project actions. Projects Page 13

14. The “Projects” tab enables users to create new projects, edit and copy existing projects, as well as perform additional features within PowerSAM. Along the left side of the screen will be a listing of Page Options determined by the Tab selected. When a user first selects the projects tab; the system will default to the “Overview” page, which provides a high-level summary of project information. Projects Page 14 • Actions Menu: • The Actions menu is located on the upper right corner of the Overview page; clicking on the “Actions” link will produce a number of additional functions such as: • Creating New Projects • Editing Existing Projects • Checking In or Out a Project • Perform Economic Analysis

15. To Create a New Project Go to the upper right corner of the Overview page, click on the “Actions” menu, and select “New Project.” Projects Page 15 TIP: A new PowerSAM Project will be created in “Checked-Out” status and defaultedto the edit mode; then data can be entered into the new project. • There is noSAVE button in PowerSAM; once the user enters information, it is automatically saved.

16. To Run Economic Analysis for a Project On the upper right corner of the Overview page, click on the “Actions” menu and choose the type of economics run to perform (see box below). Projects Page 16 • Base Case – Project is run through the model 1 time using only the base inputs for budget and impacts. • Cumulative– Project is run through the model 100 times using Low, Base, and High inputs in calculating results; generates an Expected Value result. • Tornado – Uses Low, Base, and High inputs to create a Tornado diagram that reflects the Low, Base, and High ranges each variable will create. • Tornado/Cumulative– Generates both a Tornado diagram and Cumulative results. TIP: Once started, the following message will appearon the upper left side of the screen: It states that the project is being analyzed and how far the analysis has progressed. When “xx% Analyzing Data” disappears, the analysis is complete.

17. To Run Economic Analysis for a Project On the upper right cornerof the Overview page, click on the “Actions” menu, and choose the type of economics run to perform (See below) Projects Page 17 • Edit – Used to update/edit project data when the project is checked-out by the current user. • Copy – Used to create a new project that is a copy of the current project. • Check-In/Check-Out – Used to check in and check out a project. Only one user may have a project checked out at a time; additional users can only view projects already checked out. • Remove – Deletes the project from the system. TIP: • Checking in projects from the Portfolio Tab: • A RED check box indicates that a different user currently has the project checked out • GREEN indicates that the project is checked out by the current user • Projects can be checked in by clicking on the GREEN check box • Hovering over the check box will display the user’s name

18. Projects Page 18 Minimum project data requirements for this section include the Project Type, Station and Unit, Outage Related status, Start Dates and Life of Project, and Purpose and Description TIP: Project Manager must be identified for the Commitment Process.

19. When Creating a New Project • The following fields are required to be completed on the Overview page: • Project Type - Categorizes project based on the project’s primary purpose. • Project Category - Provides additional detail to the Project Type. • Station –A field used to designate the project location.A pull-down menu,providing a listof all stations associated with the user’s log-in credentials,is provided to assist with this step. • Station Units -After a station is selected, a listof the available units based on that selection is provided. • Outage Related -Specifies a proposed project as a base outage or to be completed in conjunction with a base outage. The available options are: • Non-Outage Related – To be selected if the proposed project is independent from a base outage. • Base Planned Outage – This option identifies the project as a base outage. • Outage Related – To be selected if the proposed project is required to be completed during an outage. • Project Start Date: Identifies the date when funds are first committed. • Project In-Service Date -Identifies the date which project benefits begin being realized. • Last Year of Project Economics - Identifies the year in which financial benefits will no longer be realized from the project. • Purpose and Description - A brief explanation of the work to be performed and why. Projects Page 19

20. Base Outage vs. Outage Related In PowerSAM, outages are identified as either a Base Planned Outage or Outage Related. Additional fields will appear depending upon which option is selected. • If the “Base Planned Outage” option is selected, three additional data fields appear: • Outage Type • Selected from a drop-down list • Outage Start Date • Outage Duration (Days) Projects Page 20 TIP: • If the “Outage Related”option is selected, two follow-up fields are required: • A “parent” Base Planned Outage must be identified • Selected from a drop-down list • The Project Creator must review the Project Work List and determine if any activities are classified as Critical Path items • Critical Path: Includes all tasks that determine the end date of the project schedule. If an activity on the critical path is delayed by one day, then the entire project will be delayed by one day; unless another activity on the critical path can be accelerated by one day.

21. Planning Commodities • These are required fields for a project to be submitted to the Commitment Process. • This feature allows users to identify specific Systems or Equipment Categories and allocate the appropriate percentage of overall project costs: Projects Page 21 TIP: The Planning Commodity page contains a self-check mechanism. If the Available Systems/Equipmentor Available Services totals do not equal 100%, an error message will appear in REDtext.

22. PowerSAM’s Risk Assessment page offers the ability for users to measure and communicate the potential risks to the organizationbased upon two criteria: • Probabilityan event will occur • Severityof the potential event • The Probability of Occurrence and Severity of Consequence levels are each evaluated on a scale from 1 to 4. The Technical Risk Factor is the product of the two risk categories, and is expressed on a scale from 1 to 16. Projects Page 22 TIP: These risk rankings do not impact the economic calculations and outputs from the PowerSAM analytical model; however, these rankings can play an important role during project evaluations by senior management.

23. The Budget Planning section is provided for the user to enter detailed information on the proposed project budget and the timing of cash requirements. • The minimum requirements for this section are: • Cost Type - Users select either Expense, Capital, or a combination of both • Total Projected Expenditures -Users input Low, Base, and High estimates of Total Project Spend • Total Annual Cost- Provides a breakout of the total project spend by year • Total Monthly Cost- Provides a breakout of the Annual Costs by Month for the first two years of a project • Cost Worksheet - Allows the Total Projected Expenditures to be itemized into Categories,such as Labor and Materials Projects Page 23 TIP: For a more detailed description of Expense vs. Capital, see Economics Section.

24. Projects Page 24 TIP: Minimum budget data requirements for this section If the project cost type is “Capital” or “Other” the following fields are also required:“Retirement Unit Code,”“Equipment Being Replaced,”“In Service Date of Equipment Being Replaced,” and “Estimated Life.”

25. The Budget Planning section includes a self-check mechanism for the following circumstances: • Total Projected Expenditures must match the sum of Annual Costs • Monthly Costs Per Year must match the Annual Costs • Cost Worksheet Totals must match Total Projected Expenditures Submittals Projects Page 25 When these totals are inconsistent, the following results will occur: ARED error message will appear The project will be prevented from entering the Commitment Process TIP: Capitalized interest should be included in the total project costs; this is interest used to finance the construction of a long-term asset.

26. Project Impacts identify the expected benefits realized when a project is completed. • Annual Savings Impacts: • Projects that resolve a problem that arises on a regular basis • Projects that either improve current performance or avoid future failures • Examples include: • Projects which reduce or eliminate forced outages and costs to repair • Projects which reduce or eliminate forced derates and costs to repair • Projects which improve heat rate • Projects which either reduce annual costs or avoid possible future increases in O&M costs • Risk Avoidance Impacts: • Benefit is the avoided potential effects of an Undesirable Outcome or Big Bad Outcome (BBO) • Impact is a one-time event with serious consequences • Long-term outage and/or derate • Significant heat rate penalty • Typically, the result of an event will require that the project be completed to return the unit to normal, plus any penalties for unplanned work ???[need to be taken into account]??? • Users are required to input a probably of occurrence (i.e., the chance of the BBO occurring in the next year) Projects Page 26

27. To add a Project Impact to a Project Step 1: From the Pull-Down menu, select the Impact type from the list of options Projects Page 27 TIP: Step 2: Click on the “Add Impact to Project” button The number of project impacts that can be built into a single project is four per impact type.

28. Major Project Impact Types - Outage • Using this impact/benefit will analyze Major Maintenance and Capital projects based on a reduced number of annual forced outages • Impact used when forced outages occur can be repaired and returned to normal operation, annually • Loaded into the system are the number and average length time of reduced ???[forced outages]??? by the project • PowerSAM converts inputs into hours to calculate potential savings • Required fields: • Impact Category – users choose between Avoid and Improve. Avoid is used to prevent future increases in forced outages. The rate will remain the same. Improve will reduce the number of outages over time. • Outage Type – the type of outage being eliminated, either forced or maintenance. • Outages Per Year – the number of unplanned outages that would occur each year if the project were not completed. • Average Outage Duration – on average, the length of each outage. Can be stated in hours, days, weeks, or months. • Total Repair Cost/Yr. – total annual labor and material cost to bring the unit back on line following an unplanned outage. • Growth Type – growth in the number of outages over time. Selections include: Exponential, linear, no change, or direct entry. Projects Page 28

29. Major Project Impact Types - Outage Projects Page 29 Outages Per Year - Number of outages per year that will be eliminated Avg. Outage Duration – Average outage length for each outage (pull-down options: Hours, Days, Weeks, Months) TIP: Growth in the avoided forced outages over the length of the project benefit life When entering “Repair Cost” the amount should be based on per event cost.

30. Major Project Impact Types - Derate • Using this impact/benefit will analyze Major Maintenance and Capital projects based on a reduced number of annual forced derates • Impact used when derates occur can be repaired and returned to normal operation, annually • Loaded into the system are the number, average length time, and total megawatt derate reduced by the project • PowerSAM converts inputs into hours to calculate potential savings • Required fields: • Impact Category – choose between Avoid and Improve. Avoid is used if preventing future increases in forced outages. The rate will remain the same. Improve will reduce the number of outages over time. • Derate Type– the type of derate eliminated,either forced or maintenance. • Derates Per Year – the number of unplanned derates that would occur each year if the project were not completed. • Average Derate Duration – on average, the length of each outage. Can be stated in hours, days, weeks,or months. • Total Repair Cost/Yr. – total annual labor and material cost to bring the unit back on line following an unplanned derate. • Avg. Derate MW – average derate in megawatts during each unplanned event. • Growth Type – growth in the number of derates over time in MW/year. Selections include: Exponential, linear, no change,or direct entry. Projects Page 30

31. Major Project Impact Types - Derate Derate Per Year - Number of derates per year that will be eliminated Avg. Derate Duration – Average length of each derate (pull-down options: Hours, Days, Weeks, Months) Projects Page 31 Avg. Derate MW – The derate, in MW, incurred when the event occurs Growth in the avoided forced outages over the length of the project benefit life

32. Major Project Impact Types – Heat Rate • Using this impact/benefit will analyze Major Maintenance and Capital projects based on an improvement/avoidance of degradation in unit heat rate • Impact used when heat rate penalties occur can be repaired and returned to normal operation, annually • Loaded into the system is the current heat rate penalty and number of days annually improved by the project • PowerSAM converts inputs into average annual heat rate penalty avoided to calculate potential savings • Required fields: • Heat Rate Penalty – the amount (in BTU/kWhr) improvement occurring as a result of the project/outage. • Days a Year with Penalty – the number of days in a year when the unit will incur the penalty. • Growth Type – growth in the heat rate penalty over time (in BTU/kWhr). Selections include: Exponential, linear, no change,or direct entry. Projects Page 32

33. Major Project Impact Types – Heat Rate Projects Page 33 Heat Rate Penalty – heat rate improvement to be obtained by completing the project (measured in BTU/kWhr) Days a Year with Penalty - How often does this HR penalty occur? Is it seasonal or will it last the entire year? Growth in heat rate improvement over the length of the project benefit life

34. Major Project Impact Types – O&M Savings • Using this impact/benefit will analyze Major Maintenance and Capital projects based on a reduction/avoidance of O&M expense • Impact used when additional O&M costs occur can be repaired and returned to normal operation, annually • Loaded into the system are the number of O&M incidents per year and the total O&M Expenses per year • O&M Savings is purely a net present value (NPV) calculation and does not use the gross margin forecasts to calculate • Required fields: • O&M Incidents/Yr. – The total number of times that the increase in O&M would occur. This is almost always one. • Total O&M Expend/Yr. – Total annual cost savings per year realized by completing the project/outage. • Growth Type – Growth in O&M savings over time in thousands of dollars. Selections include: Exponential, linear, no change or direct entry. Projects Page 34

35. Major Project Impact Types – O&M Savings Projects Page 35 O&M Incidents/Yr - how many times does the spend event occur each year?Usually only once. Total O&M Expend/Yr - total O&M savings or avoidance when the project is completed. Note: The details (Material Cost, Avg Man Hrs) is simply a worksheet and does not calculate a total. Total must be input manually. Growth in the overall O&M savings or increase avoidance over the length of the project benefit life.

36. Major Project Impact Types – Undesirable Outcome • Using this impact/benefit will analyze the effects of a significant event occurring that would result in a long-term outage, derate, heat rate impairment, or O&M spend. • Impact used when a one-time significant event could occur that would require the project be completed. If the event occurs it would result in the project being required (plus additional costs for unplanned work). • Loaded into the system applicable forced outage, derate, heat rate or O&M savings information, plus a percent chance of occurrence (in decimal form). • Undesirable Outcome is calculated using the percent chance of occurrence as an annual rate to allocate benefits over the life of the project. • Required fields: • One of the following must be filled in – Outage Duration, Derate Duration and Average Derate, or Heat Rate Penalty. • Total Repair Costs – one-time cost to repair and return the unit to normal operation. Usually, this represents the cost to do the original project plus an additional cost because an event is unplanned. • Growth Type – growth in percent chance of occurrence over time in thousands of dollars. Selections include: Exponential, linear, no change,or direct entry. Projects Page 36

37. Major Project Impact Types – Undesirable Outcome Undesirable Outcome Costs - Choice of impacts that would occur when the significant event occurs. Choices include forced outage, derate heat rate, or O&M savings. These events are usually long-term events with significant costs to repair (usually more than the cost to do the project). Projects Page 37 Probability - Probability (in decimal form) of the significant event occurring in the next year. Calculations/results are dependent on the decimal included here. Growth over time of the probability that the undesirable event will occur.

38. Environmental Review Questions Environmental Compliance Screening Questions have been established to highlight potential project requests which will require input and approvals based upon NRG’s environmental policies. Projects Page 38 Users indicate the correct response to each question by selecting “YES” or “NO” in the drop-down box located in the right-side column

39. NERC Review Questions The following checklist was developed to help facility staff screen various proposed projects for potential implications under applicable regulatory requirements. Projects Page 39 Users indicate the correct response to each question by selecting “YES” or “NO” in the drop-down box located in the right-side column.

40. Projects Page 40 • Economic Evaluation Metrics: • ATCF Net Benefits (NPV) – PV ATCF Benefits (Gross Benefits) less PV ATCF Effective Investment (Net Investment). Anything above -0- means a positive return. • Net Benefit/Cost Ratio (also called Benefit-to-Cost Ratio or B/C) – ATCF Net Benefits (NPV) divided by PV ATCF Effective Investment. Anything above -0- means a positive return. This calculation takes the size of the investment out of the analysis. Can compare large-dollar to small-dollar projects to reflect the largest return. Ratio reflects, for every dollar invested, the amount returned (that dollar plus the ratio result). • Base Discount Payback– Time, in years, required to payback the net investment. Annual NPV values are used to determine the time. • Base IRR – Standard Excel definition of Internal Rate of Return. Calculation returns the internal rate of return for a series of discounted cash flows represented by the numbers in values. IRR is closely related to NPV.

41. The Analysis Graph displays the annual results through the life of the project broken out by: • Annual Net Benefits (gray bar) • Annual Net Investment or Cost (red line) • Cash Benefit (green line) – Gross ATCF benefits from all impacts except Undesirable Outcome. • Project Benefit (blue line) – total gross ATCF of all impacts. Difference between blue and green lines is the Undesirable Outcomes benefit. • Results listed in the table represent the base case ATCF savings by Impact type: • Left represents “Hard Dollar” or actual cash potentially earned by individual impact type. • Right represents the Undesirable Outcome impact results that is based on the probably of a major event occurring. Savings is considered “Soft Dollar” where actual savings can not be measured. Projects Page 41

42. The “Project Stage”defines to which level of the Capital Planning Work Process the project has progressed.Only individuals with user rights set to “Facilitator” can assign a new Project Stage or move a new project from the Scratch Pad stage. The Project Stages • Submitted to Forecast – Project is included in the FP&A Budget. • Forecast Risk – Projects have been reviewed; however, are not included in the budget. Execution will typically be considered based upon management discretion. • Commitment Submitted – Project owners are requesting funds to execute projects already approved in the budget. • Commitment Approved – Project has been approved through all applicable levels required by NRG’s DOA policy; and Accounting Structure is created in SAP. • Commitment Rejected – Project will not be executed; funds are not released. • Scratch Pad – Default stage for new projects; provides a stage for projects to be constructed and for alternatives to be evaluated. • Submitted for Review – Allows key stakeholders to review project details prior to being submitted to the plant forecast. • Review Approved – Projects already reviewed by key stakeholders with no outstanding issues identified. Projects Page 42

43. To change a project’s Stage, a user assigned the appropriate rights will select the new stage from the “Select Stage” field and click the “Change Project Stage” button. Projects Page 43 The Log Table records the Stage history of when a project was changed and by whom.

44. Supplement Page Users can attach external documents, such as vendor reports or technical drawings, to project files via the “Supplement” page. Projects Page 44 To perform this feature, the user clickson the “Add Supporting Documents or Images” link. Next, click the “Select Files” button in the next window. Once the file to be uploaded is identifies in the Windows Search box, click “Open.”

45. Supplement Page Additional features available on the Supplement page are: A listing of all Supplemental Documents or Images attached to the project Projects Page 45 A historical log detailing when economic analyses were performed on the project A historical log detailing the Check-In/ Out history of the project

46. Notes Projects Page 46

47. Creating a Report To build a report, projects must selected in the “Portfolio Tab.” Place a check mark by the projects needed for the report. Reports Page 47

48. Creating a Report Choose the report by clicking on one of the project names Reports Page 48

49. Creating a Report • When chosen, most reports will be shown directly on the screen: • To download a report click on “Output” and select the software type (Excel, Word, pdf, etc.) • Reports that do not open directly on screen will provide an option to open in Excel Reports Page 49

50. Notes Reports Page 50