Approval of the Terms and Conditions of Guam Power Authority Revenue Bonds

I Liheslaturan Guåhan, pursuant to § 50103(k) of Title 12 of the Guam Code Annotated, hereby approves the terms and conditions of the issuance and sale of revenue bonds (the bonds), from time to time, by the Guam Power Authority (GPA), in one or more series or issues of tax-exempt and/or taxable bonds, as senior revenue bonds in accordance with its existing senior revenue bond indenture (or in the case of projects financed with taxable bonds and/or projects that do not constitute capital improvements to GPA’s system, as subordinate revenue bonds in accordance with its existing subordinate revenue bond indenture), for the purpose of continuing GPA’s investment in the island-wide power system involving generation, transmission, and distribution assets to improve reliability, efficiency and power service, and to comply with environmental regulations; provided, that the bonds shall have a principal amount not to exceed Ninety-four Million Dollars ($94,000,000), shall have a final maturity date not later than thirty-one

(31)years from the date of the issuance of the bonds, shall accrue interest at rates that shall not exceed

(1)seven percent (7%) with respect to tax-exempt bonds, and

(2)with respect to taxable bonds, the limitation set forth in § 8214(a) of Title 12 of the Guam Code Annotated, and shall be sold for such price or prices as shall result in a net yield to the bondholders not exceeding the rate specified by said § 8214(a). The issuance of any and all such Bonds shall be further subject to the following requirements, limitations, terms and conditions:

(a)Such bonds shall be issued and sold pursuant to GPA’s existing senior bond indenture (including any amendments in accordance with its terms to provide for the issuance of the bonds described herein), and in compliance with the provisions of Article 2 of Chapter 8 of Title 12 of the Guam Code Annotated, including approval by the CCU and by I Maga’hågan/Maga’låhen Guåhan as provided therein; provided, however, that such bonds may be issued and sold pursuant to GPA’s subordinate bond indenture (including any amendments in accordance with its terms to provide for the issuance of the bonds described herein) for purposes of financing projects with taxable bond proceeds and/or projects that do not constitute capital improvements to GPA’s system;

(b)The sale of the bonds shall be approved by the Board of Directors of Guam Economic Development Authority

(GEDA)as provided by § 50103(k) of Chapter 50 of Title 12 of the Guam Code Annotated, and the terms and conditions of the issuance of the bonds shall be approved by the Guam Public Utility Commission

(GPUC)as provided by Chapter 12 of Title 12 of the Guam Code Annotated; and

(c)The proceeds of the bonds shall be applied to pay the costs of issuance of the bonds, to pay the cost of any credit enhancement of the bonds, to provide for required reserves, and, subject to approval by the GPUC in accordance with § 12004 Article 2 Chapter 12 of Title 12 of the Guam Code Annotated, to pay the costs of the projects and items listed in Subsection

(d)of this Section.

(d)The remaining proceeds of the Bonds shall be used solely for the following purposes: CH. 8 GUAM POWER AUTHORITY

(1)Up to Fifty Six Million Four Hundred Seventy Seven Thousand Dollars ($56,477,000) for the following Generation Improvements projects:

(A)Reimbursement of GPA for costs associated with the Environmental Compliance Program (Diesel RICE MACT);

(B)Cabras 1 Major Boiler Overhaul;

(C)Cabras 2 Turbine and Boiler Overhaul;

(D)Cabras 3 and 4 Major Overhaul and Maintenance;

(E)Cabras Compound Employee and Visitor Parking Lot;

(F)Generator Protection Upgrade with Fault Recorders;

(G)Dededo CT Return to Service Phases I and II;

(H)Diesel Plan Major Overhaul and Maintenance and Diesel Fuel Oil Tank Repairs;

(I)Energy Storage Equipment (Renewable Energy Impact Mitigation);

(J)Liquefied Natural Gas Initial Startup.

(2)Up to Five Million Five Hundred Eighty Six Thousand Dollars ($5,586,000) for the following Transmission System Improvement projects:

(A)Piti 115 kV GIS Major Maintenance;

(B)System Protection Improvement and Cap Bank Controllers – Phases I and II;

(C)Substation Major Refurbishment (San Vitores T-122, Harmon T500 and T501, Macheche T90);

(D)13.8 kV Breaker Upgrades Phases I and II;

(E)34.5 kV Breaker Upgrades Phase I;

(F)Hågat Shoreline Pole Restoration Project;

(G)Dededo Substation Capacitor Bank;

(H)Substation Battery Banks/Chargers Upgrade; and

(I)Harmon X82 to Yigo X160 Overhead Line Upgrade Phase I;

(3)Up to One Million Five Hundred Eighty Seven Thousand Dollars ($1,587,000) for the following Distribution Improvements projects:

(A)Distribution Improvements;

(B)Smart Grid Sub-Projects (not covered by grant); and

(C)Mobile Workforce Management.

(4)Up to Two Million Nine Hundred Thousand Dollars ($2,900,000) for the following Supervisory Control and Data Acquisition System Upgrades projects:

(A)Power System Control Center Reliability Improvements; and

(B)Network Communication – Fiber to Fadian Complex. CH. 8 GUAM POWER AUTHORITY

(5)Up to Two Million Four Hundred Fifty Thousand Dollars ($2,450,000) for the following Cyber Security and Information Technology Upgrades projects:

(A)Upgrade of Facilities Physical Security; and

(B)Information Technology Upgrades.

(6)Five Million Dollars ($5,000,000) to be held in reserve by GPA in a fund separate and apart from any other fund for the sole purpose of establishing a revolving loan fund to support demand-side management and/or renewable energy programs approved by the Guam Public Utility Commission

(GPUC)for residential and/or commercial purposes; provided, however, that the issuance of debt for purposes of this Subsection (d)(6) shall be subject to prior approval by the GPUC, and

(7)Such amounts as may be needed to capitalize and pay from bond proceeds interest on the bonds due, accruing or required to be set-aside for a period ending not later than twenty four

(24)months after issuance. Notwithstanding anything herein to the contrary, to the extent that there are excess proceeds of bonds authorized herein that exist for one of the categories of purposes listed in Subsections (d)(1) through (d)(7) above, such excess may be transferred to another such category.