The document provides an overview of the Tulia CAES Bulk Electric Storage Project in Swisher County, Texas. It discusses that the project will use proven Compressed Air Energy Storage (CAES) technology to store electricity from the grid or renewable sources by compressing air and storing it underground. The stored air will later be used to power turbines and generate electricity when demand and prices are higher. The project is well-suited for the location due to favorable geology, proximity to wind resources, and ability to connect to the electric grid. It outlines the development progress achieved to date and remaining milestones, including drilling a test core in 2013 to further refine the underground storage cavern design.

1. Overview of the Tulia
CAES Bulk Electric
Storage Project
April 2013

2. Agenda
2
I. What is CAES?
II. Why Tulia and Economic Development
III. Need for Storage and our Progress
IV. Subsurface Technology
V. Milestones
VI. Questions?

3. Tulia I Rapid Response Storage and Generation Facility
What is CAES?
Commercially proven in two facilities, Compressed Air Energy Storage (CAES)
is the most flexible technology for the bulk storage of electricity
 Two commercial‐scale
units have been
operating reliably for
two decades.
 Two commercial‐scale
units have been
operating reliably for
two decades.
 Can optimize sales and
purchases of energy
and ancillary services
 Can optimize sales and
purchases of energy
and ancillary services
 Compressed air is released , mixed with a small amount of natural gas,
and used to fire a turbines for generation of electricity when it is most
needed and when prices are higher.
 Compressed air is released , mixed with a small amount of natural gas,
and used to fire a turbines for generation of electricity when it is most
needed and when prices are higher.
 Can store and generate
simultaneously
 Can store and generate
simultaneously
Electricity from grid
or behind meter source
3

4. The Right Place in Texas
4
• Geology
• Wind
• Water
• Technology
• Electric Transmission
• Gas Pipeline
• Potential Revenue
• Regulation is Right
TULIA CAES PLANT
CAES 7-mile double-
circuit 345 kV line
345 kV CREZ loop from
Nazareth to Silverton
Silverton
Collection Station
Amarillo
South to
Swisher
County
SPP 230
kV Line
Proposed Interconnection of Tulia 1 CAES plant to
ERCOT 345 kV CREZ system.

5. PowerSouth Energy Cooperative
5
Cavern
Wellhead
CAES Unit

6. Tulia Economic Development
6
Facility Staffing Plan
Description Number
Plant Manager 1
Operations Manager 1
Shift Operators 12
Leaching Field Operators 3
Maintenance Manager 1
Mechanical Technicians 8
I&E Technicians 6
Maintenance Assistants 2
Groundskeeper 1
Janitor 1
Warehouse 1
Accounting/Payroll 3
Security 4
Administrative 1
Total Staff 45
The Facility is to be staffed 24 hours a day 7 days a week. Operating staff is to work in 12-hour
shifts on a rotating schedule. The management and maintenance staff is to work a normal
weekday schedule and work on nights or weekends, as required. Major maintenance crews will
be employed as required.

7. The Need For Bulk Energy Storage
7
• The electric grid operates entirely on demand – generation must meet demand at all times
– Grid operators balance supply and demand to maintain the stability of the system
• Responsive generating units are dispatched to meet peaks in demand and ramped down when load tapers off
• Fast response units, however, can be expensive to operate, leading to spikes in power prices when demand is high
– Efficient bulk energy storage can be used to help maintain grid stability at attractive cost
• Stored power can be dispatched extremely quickly to meet peak demand
• Lower fuel costs than conventional thermal quick response units
Greater Penetration of Renewable Energy Resources + Grid Stability
• Power landscape is shifting toward a greater reliance on renewable forms of power generation (e.g. wind)
– While renewable resources are attractive for their environmental characteristics, they often prove to be
significantly less reliable sources of power than conventional thermal resources
• Power is generated intermittently (i.e. whenever the wind blows) and output can be highly variable
• Accordingly, the growth in renewable energy resources creates a more volatile grid system
• As wind resources lend to a “peak-ier” system, bulk energy storage can be used to efficiently regulate the
balance between electric supply and demand
– Further, renewable resources may generate power at suboptimal times
• In West Texas, for example, the wind blows primarily during the nighttime hours when demand is low
• Bulk energy storage can be used to “time-shift” excess power, storing it and making it available during
periods of greater demand

8. Summary of the Tulia CAES Project
8
• Chamisa Energy, LLC (“Chamisa”) is developing a 270MW Compressed Air Energy Storage (“CAES”)
facility (“Tulia I”) in Swisher County, Texas
• Chamisa owns the land on which the Tulia I site will be located, having acquired the plot following a
careful analysis of the surrounding region’s geology, the site’s physical proximity to wind generating
resources and the ability to efficiently interconnect to the ERCOT grid
• Tulia I will employ proven CAES technology to capitalize on a compelling market opportunity, as the
high-wind-penetrated yet overall resource constrained ERCOT market provides an exceptional platform
to capture the full range of economics available to CAES technology, including:
– Transforming wind , or another renewable, into a fully dispatchable generating resource
– Serving any of base, intermediate and peak load
– Providing Ancillary Services
– Arbitraging on-peak/off-peak energy prices
• The project is expected to generate 25-year unlevered returns of 17-30% based on third-party power
market consultant analysis
• The Tulia I team has achieved significant development milestones to date and has a credible
development plan for the construction of the facility

9. Bedded Salt Caverns
Geophysical Well Logs and Stratigraphy Confirms Salt Formations
14 11 6
SWISHER HALE
South
B’Interpretations based
on core descriptions
North
B
Top of San
Andres
Formation
Chamisa anticipates
locating the caverns in the
Upper San Andreas
Formation, which is
comprised mainly of salt

10. Subsurface Development
• Chamisa engaged RESPEC Consulting & Services to perform extensive geomechanical modeling and analysis in order
to inform the selection of an appropriate number of caverns, their depth and design
– Thermal finite element model used to predict temperatures in the rock surrounding the caverns as a function of time
– Temporal rock temperatures and mechanical loading used in thermomechanical finite element model to predict cavern
stress
• Key modeling assumptions:
– Casing seat at 2,284 feet
– Cavern roof at 2,324 feet (roof salt thickness of 50 feet)
– Cavern floor at 2,424 feet
– Maximum radius of 150 feet
– Cavern usable air storage volume of 733,500 bbls (each)
– Cavern fully cycled over a 48-hour period
• In consultation with RESPEC, Lonquist and Glorieta Geoscience, Chamisa has assumed a conservative cavern plan
– Caverns will be limited to a maximum pressure swing of 0.21 psi/ft at the casing seat (~480 psi), ranging from 0.64-
0.85 psi/ft
– This will allow for 6.6 mmlbs of working gas and 18 hours of storage (assuming a withdrawal rate of 101 lb/s)
• Based on the simulations analyzed by RESPEC, the caverns are projected to experience minimal tensile stresses with
high factors of safety in the surrounding siltstone
– The cavern plan will be refined following the drilling and analysis of the onsite test core
– Ultimately, Chamisa’s cavern plan may prove to be overly conservative, which would allow for the development of
fewer caverns while maintaining the same total amount of storage and operating parameters
Cavern Location and Design
Source: Chamisa Energy, LLC; RESPEC; Lonquist & Co. LLC

11. Subsurface Development (Cont.)
Cavern Location and Design (Cont.)
Source: Chamisa Energy, LLC; RESPEC; Lonquist & Co. LLC
Cavern Design Close-Up of Cavern Area
CAES Cycle Working Gas CAES Cycles – Casing Seat Pressure
0 50 100 150 200 250 300
2,200
2,250
2,300
2,350
2,400
2,450
2,500
Radius (ft)
Depth (ft)
Siltstone
Salt
Anhydrite
-10
0
10
20
30
40
50
60
70
80
90
100
110
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
WorkingGas(%)
Time (days)
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
PressureGradientatCasingSeat(psi/ft)
Time (days)
0.61 to 0.85 psi/ft
0.64 to 0.85 psi/ft
0.63 to 0.85 psi/ft

12. Subsurface Development (Cont.)
Cavern Location and Design (Cont.)
Source: Chamisa Energy, LLC; RESPEC; Lonquist & Co. LLC
Potential for Tensile Fracture Siltstone Factors of Safety (25 years)
Potential for Salt Dilation Cavern Closure
70
80
90
100
110
120
‐2,000
‐1,500
‐1,000
‐500
0
500
364.00 364.25 364.50 364.75 365.00 365.25 365.50 365.75 366.00
Temperature (°F)
Stress (psi)
Days into 1st Year of Cycling
0.64 to 0.85 psi/ft
Maximum Principal Stress
Normal Stress (Negative of Cavern Pressure)
Cavern Wall Temperature
Note: Tensile Stresses are Positive

13. Development Milestones Completed
13
Chamisa has invested
approximately $5-10mm
in land acquisition and
project development
costs to date
Date Milestone
October 2010 Completed Phase I environmental review
July 2011 Acquired TCEQ groundwater protection letter
July 2011 Acquired surface water permit
July 2011 Completed acquisition of site and all mineral rights
December 2011 Completed PILOT agreement negotiations with local governments
March 2012 Acquired TRRC test core drilling permit
March 2012 Received favorable rule change from PUCT for energy storage
April 2012 Acquired TRRC P-5 operators permit
October 2012 Signed ESA with Dresser Rand and Lonquist
November 2012 Engaged SAIC as Independent Engineer / Power Market Consultant
December 2012 Filed air permit with EPA
December 2012 ERCOT began implementation of energy storage rule change
January 2013 Filed air permit with TCEQ
February 2013 Received Class 3 proposal from Dresser Rand
February 2013 Received preliminary geo-mechanical analysis from RESPEC
February 2013 Finalized preliminary cavern design and solution mining plan
March 2013 Received Power Market Consultant report
March 2013 Received Independent Engineer report
March 2013 Received air permit from TCEQ

14. Key Project Milestones Remaining
Date Milestone
Q2 2013 Issue FEED RFP
Q2 2013 File Rule 97 and Rule 9 permit applications
Q3 2013 Drill & analyze on-site test core
Q3-Q4 2013 Refine cavern design and solution mining plan
Q4 2013 Finalize contract with Dresser Rand, order long-lead time items
Q4 2013 Finalize selection of and negotiate contract with EPC contractor
Q1 2014 Commence well and cavern drilling
Q1 2015 Commence cavern leaching
2016 Construct balance of plant
2016 Construct transmission line and gas pipeline
Q2 2016 Begin installation of Dresser Rand equipment
Q1 2017 Begin conversion of caverns to air service
Q3 2017 Commence operations
14
The critical near-term
milestone will be the
drilling and analysis of
the on-site test core

15. Tulia I Rapid Response Storage and Generation Facility 15
Questions