EFFECTS ON THE INTERIM AGREEMENT

WITH PHILPHOS & CENTURY *

* Based on Hourly Average Spot Market Prices from April 23 to April 30, 2011

INTERIM AGREEMENT

CUSTOMER TO BE CONTRACTED

AGREEMENT

Philphos 9.4 MW May – December 2011 = 0 MW January 2012 onwards= 9.7 MW

Century 6.7 MW Incremental power demand from May to December 2011 (from 2.4223 to 6.7 MW)

PHILPHOSScenario 1

To maximize nomination of contracted capacity equivalent to 9.4 MW

Expected Result:

Amount

MEI's Payable to KSPC

(252,689,146)

MEI's Collectible from Philphos 0

MEI's Collectible from Market Operations

122,673,821

Total Payable in PhP

(130,015,324)

PHILPHOSScenario 2

To nominate zero (0) and pay the 75% of theUnnominated Quantity at the end of the year

Expected Result:

Amount

MEI's Payable to KSPC 0

MEI's Collectible from Philphos 0

MEI's Payable to KSPC for UQ (193,137,739)

Total Payable in PhP (193,137,739)

PHILPHOSStrategy in the Nomination of Hourly Contracted Quantity

*If Forecasted Market Price is higher than 1.4017 P/kWh, Adopt Scenario 1: Maximize Nomination of Philphos @ 9.4 MW*If Forecasted Market Price is equal or lower than 1.4017 P/kWh, Adopt Scenario 2: Nominate Zero (0) and Pay the 75% of the Unlifted Quantity at the end of the year*To get the Break-even Spot Market Price of 5.9477 P/kWh the prevailing latest Average Spot Market Price must increase by 32%

Amount

MEI's Payable to KSPC (247,726,528)

MEI's Collectible from Philphos 0

MEI's Collectible from M.O. 118,343,892

Total Payable in PhP (129,382,636)

Expected Result:

PHILPHOSHour 1 Hour 2 Hour 3 Hour 4 Hour 5 Hour 6 Hour 7 Hour 8 Hour 9 Hour 10 Hour 11 Hour 12

1.59

1.65

1.97

1.27

2.05

3.83

3.90

1.56

0.67

0.51

0.55

0.90

2.2975

2.2475

2.0041

2.6227

1.9521

1.2323

1.2137

2.3243

3.5636

3.9421

3.8375

3.1309

59% 65% 97% 27% 105% 283% 290% 56% -33% -49% -45% -10%

Hour 13 Hour 14 Hour 15 Hour 16 Hour 17 Hour 18 Hour 19 Hour 20 Hour 21 Hour 22 Hour 23 Hour 24 Ave.

0.92

0.27

0.40 0.65 1.15 1.39 0.29 0.91 1.44 1.36 1.09 1.37

3.0952

4.6823

4.2571 3.6039 2.7710 2.4918 4.6032 3.1132 2.4353 2.5195 2.8520 2.5063

-8% -73% -60% -35% 15% 39% -71% -9% 44% 36% 9% 37% 32%

CENTURYScenario 1

To maximize nomination of contracted capacity equivalent to 6.7 MW

Expected Result: Amount

MEI's Payable to KSPC

(180,108,221)

MEI's Collectible from Century

130,025,851

MEI's Collectible from Market Operations23,309,018

Total Payable in Php

(26,773,352)

CENTURYScenario 2

To nominate the scheduled incremental consumption andpay the 75% of the Unnominated Quantity at the end ofthe year.

Expected Result:Amount

MEI's Payable to KSPC 0 MEI's Collectible from Century 0 MEI's Payable to KSPC for UQ (40,353,844) Total Payable in PhP (40,353,844)

CENTURYStrategy in the Nomination of Hourly Contracted Quantity

*If Forecasted Market Price is higher than 1.5313 P/kWh, Adopt Scenario 1: Maximize Nomination of Century @ 6.7 MW*If Forecasted Market Price is equal or lower than 1.5313 P/kWh, Adopt Scenario 2: Nominate Zero (0) and Pay the 75% of the Unlifted Quantity at the end of the year*To get the Break-even Spot Market Price of 5.9329 P/kWh the prevailing latest Average Spot Market Price must increase by 32%

Amount

MEI's Payable to KSPC (168,462,023)

MEI's Collectible from Philphos 130,025,851

MEI's Collectible from M.O. 20,222,792

Total Payable in PhP (18,213,380)

Expected Result:

Comparison of PayablesPhilphos vs Century

9.4 MW Philphos Estimated Payable = 129,382,636 PhP (Scenario 1*)

6.7 MW Century Estimated Payable = 18,213,380 PhP (Scenario 1*)

* - Trade in full with due consideration of the threshold price

Expenses for PHILPHOSMNE = 3.7255 P/kWh x 225,600 kWh x 63 days x 1.12 VATPR => MNE = P59,303,761

Where: P3.7255 P/KWH = Average NPC TOU price in Visayas225,600 kWh = (9400 kW x 24 Hours) daily market exposure of PHILPhos.

COMMITMENT FEE:= ¼ * 1% (MNE)= P148,259

COMMISSION FEE:= 1/8 * 1% (MNE)= P74,130

Total Commitment Fee & Commission Fee = P 222,389

Total = P 59,526,150

Other Expenses to be Incurred

Expenses for CENTURY PEAK

MNE = 3.7255 P/kWh x 100,800 kWh x 63 days x 1.12 VATPR => MNE = P16,771,152

where: 100,800 kWh = (4200 kW x 24 Hours) market exposure of Century Peak.

COMMITMENT FEE:= ¼ * 1% (MNE)=P 66,244

COMMISSION FEE:= 1/8 * 1% (MNE)= P 33,122

Total Commitment Fee & Commission Fee = P 99,366 Total = P 16,870,518

Other Expenses to be Incurred

END OF PRESENTATION

Thank you!

Century – Market Price & Threshold Comparison

Century – Needed Increase to meet price threshold

PHILPHOS – Market Price & Threshold Comparison

PHILPHOS – Needed Increase to meet price threshold