Execution version
Schedule
V
I
Operational Improvements
Capitalized terms used herein and not otherwise de/ìned shall have the meaning assigned to such terms in
the RSA or the Recovery Plan Term Sheet, as applicable.
Ä.
ON-G0ING
FunI
PnOCUREMENT INITIATIVES
Activitics
Optimize
Generation
Dispatch
Fuel Inventory
Controls
Benefits
t
Continuously monitor fuel unit
$/MMbtu costs to leverage cost
arbitrage from the different fuel
sources to optimize cost per kwh
Fuel cost savings benefiting end
customers
I
Standardize inventory controls
across all plants with a standard
Provide robust inventory controls
that follow industry standards
inventory tool
t
Integrate inventory controls into
"Asset Suite"
r
Support the tendering/retendering
process to identify lower cost
suppliers focused on adders
Fuel Sourcing
Create visibility for inventory
variations in an auditable process
I
Reduce cost ofadders for Fuel Oil #
6by 15-30% through FY20l7
reduction
Get alternative suppliers to drive
competitive pricing
Evaluate infrastructure options to
allow different supply altematives
while leveraging the AOGP
Fuel Supply
Chain Structure
Provide sustainable supply
redundancies for NG
Leverage alternate NG sources to
obtain favorable pricing in the
midterm for Costa Sur
Enable fuel diversity for the
different plants
Fuel
Consumption
(Generation)
Reduce the utilization of the
existing fleet by optimizing the
spinning reserve levels
I
Mitigate the forced outages
driving increased higher cost unit
Reduced fuel consumption by using
the most efficient units
I
Potential generation spinning
reserves reduction
usage (i.e., Diesel)
I
Notwithstanding the contents of this Schedule V, the Supporting Creditors recognize that the Operational
Improvements will be implemented in a manner consistent with the Certifred Fiscal Plan for PREPA; provided,that
nothing herein shall limit or impair any rights that the Supporting Creditors may have with regards to the Certified
Fiscal Plan in the RSA.
B.
ON-GoINGCUSToMERSnnvTCnINTTIÄTIVES
Activities
Iìcnefits
Implement new process for
service suspension / new fees for
reconnection
One time cash improvement for
reduced A/R
Increased reconnection fees
Accelerate process to bring Law
33 cases to arbitration and collect
General
full deposit
customers
Launch collection of inactive
accounts with Collection Agencies
Endeavor to improve call center
response time, outage restoration
time, and overall customer service
satisfaction
Continue implementation
of
programs to improve theft
detection and recovery
Decrease in the amount of
accounts estimated each month,
improve the estimation algorithm
I)ecrease Non
Technical
Losses
PREPA retains the costs saved
though the base rate, rest is passed
on to customers through reduce fuel
and PP charges
Accelerate remediation of meters
with no reading
Reduce the time it takes to
complete service suspension for
non-payment
Municipalities
I
Collection of charges at "for profit
sites"
2
Additional revenue
C.
ON-GOING FLEET & OrHnn GBNrnar,
O&M INITIATIvES
Activities
Iìenelïts
Execute on security guard phase I
Improved cost base
&,r
Procurement
t
Develop and execute sourcing
fleet parts
of
Develop and execute sounding
of
Increased use of standardized,
catalogued items will reduce
complexity and drive SG&A
efficiencies
MDE/MRO parts
t
Improve procurement processes
and
limit decentralizaiion of
activities
Review footprint and optimize
warehouse operations (in
Reduced labor and network costs
(fewer locations with increased
coordination with fleet
consolidation)
Inventory
velocity)
Limit write-downs / obsolete SKU's
Identify and dispose ofobsolete
and slow moving SKU's
Reset safety stock levels to reduce
overall inventory
Review footprint and optimize
shop operations (in coordination
with fleet optimization)
I
¡
Improved vehicle availability
Reduce T&D non-productive labor
time ("patio entries")
Develop shop SWAT team to
target shops (weekly basis) with
high out of service oá
Shops
!
Rollout improved metrics to drive
higher accountability
Review and execute on
opportunities to outsource lower
skill maintenance tasks
Review network and reduce
overall fleet, increasing utilization
Expand usage ofGPS across fleet
to increase visibility to and drive
improvement within utilization
F'leet
T
Consolidate overall accountability
of fl eet (availability, utilization,
cost) within transportation
Develop fleet renewal program by
a
J
Reduced investment required to
renew fleet
I
Improved tracking and centralized
accountability will enable more
efficient rebalancing of fleet
vehicle class
Engage third party to develop
cohesive real estate portfolio
strategy and divest excess
Real Estate
More efficient use of real estate
assets
One-time liquidity gain selling
properties
D.
excess properties
EMPLOYEERELATED
Activities
¡
Safety
Iìenefits
Engage consultant to assess
current safety environment and
Reduce frequency of safety related
incidents and serious accidents
develop framework for achieving
a culture focused on safety
Productivity
Employee
related
Address inflexible work rules and
high absenteeism
!
Rollout and restructured, merit
based organization
t
Develop updated job descriptions
including clear KPI's to measure
performance
4
Improved labor and employee
productivity
Merit based organization with clear
accountability to support key
objectives and tasks