About The AES

The AES Corporation (AES) operates as a global energy company. Strategy AES remains an industry leader in developing and operating the innovative solutions that enable the transition to zero and low-carbon sources of energy. The company continues to see an enormous opportunity from the once-in-a-lifetime transformation of the electricity sector driven by decarbonization, electrification, and digitalization. The focus of the company’s strategy is to partner with large corporations that are transitioning to carbon-free sources of electricity. One example of the company’s successful execution is its collaboration with large technology companies. In 2023, the company signed long-term contracts for 5.6 GW of renewables, bringing the company’s backlog of projects — those with signed contracts, but which are not yet in operation — to 12.3 GW. The company is a leader in developing green hydrogen. The company is partnering with Air Products to develop, build, own, and operate the largest green hydrogen production facility in the United States. The company is also participating in two green hydrogen hubs in the United States, which were awarded up to $2.4 billion of grant funding from the U.S. Department of Energy. With the company’s utilities, the company is working with a broad range of stakeholders to transition to lower carbon forms of energy. At AES Indiana, for example, the company is working to retire its remaining coal generation by the end of 2025, while adding new renewables and natural gas to the grid. The company is also developing and incubating new technologies that add value today and will drive the company’s business in the future. At the core of the company’s innovation strategy is AES Next, the company’s business and technology incubator. AES Next works to identify new and innovative technologies and business opportunities that provide or support leading-edge greener energy solutions. Generation The company owns and/or operates a generation portfolio of 34,596 MW, including generation from the company’s integrated utility, AES Indiana. The company’s generation fleet is diversified by technologies and fuel type. See discussion below under Fuel Costs. Performance drivers of the company’s generation businesses include types of electricity sales agreements, plant reliability and flexibility, availability of generation capacity to meet contracted sales, fuel costs, seasonality, weather variations, economic activity, fixed-cost management, and competition. Contract Sales — Most of the company’s generation businesses sell electricity under medium- or long-term contracts in either regulated or competitive markets (‘contract sales’) or under short-term agreements in competitive markets (‘short-term sales’). The company’s medium-term contract sales have terms of two to five years, while the company’s long-term contracts have terms of more than five years. Short-Term Sales — The company’s generation businesses also sell power and ancillary services under short-term contracts with average terms of less than two years, including spot sales, directly in the short-term market or at regulated prices. The short-term markets are typically administered by a system operator to coordinate dispatch. Short-term markets generally operate on merit order dispatch, where the least expensive generation facilities, based upon variable cost or bid price, are dispatched first and the most expensive facilities are dispatched last. Across the company’s portfolio, the company provides a wide array of ancillary services, including voltage support, frequency regulation and spinning reserves. Many of the short-term markets in which the company operates include regulated capacity markets. These capacity markets are intended to provide additional revenue based upon availability without reliance on the energy margin from the merit order dispatch. The company’s generating facilities selling in the short-term markets typically receive capacity payments based on their availability in the market. Plant Reliability and Flexibility — The company’s contract and short-term sales provide incentives to the company’s generation plants to optimally manage availability, operating efficiency and flexibility. Capacity payments under contract sales are frequently tied to meeting minimum standards. In short-term sales and in certain contract sales, the company’s plants must be reliable and flexible to capture peak market prices and to maximize market-based revenues. In addition, the company’s flexibility allows the company to capture ancillary service revenue while meeting local market needs. Fuel Costs — For the company’s thermal generation plants, fuel is a significant component of the company’s total cost of generation. For contract sales, the company often enters into fuel supply agreements to match the contract period. Some of the company’s contracts include indexation for fuels. In those cases, the company seeks to match its fuel supply agreements to the indexation. For certain projects, the company has tolling arrangements where the power offtaker is responsible for the supply and cost of fuel to the company’s plants. In short-term sales, the company sells power at market prices that are generally reflective of the market cost of fuel at the time, and thus procure fuel supply on a short-term basis, generally designed to match up with the company’s market sales profile. 53% of the capacity of the company’s generation plants are renewables, including hydro, solar, wind, energy storage, biomass and landfill gas, which do not have significant fuel costs. 27% of the capacity of the company’s generation plants are fueled by natural gas. With the exception of the company’s plants in the Dominican Republic and Panama, where the company imports LNG to utilize in the local market, the company uses gas from local suppliers in each market. 18% of the capacity of the company’s generation fleet is coal-fired. In the U.S., most of the company’s coal-fired plants are supplied from domestic coal. At the company’s non-U.S. generation plants, and at the company’s plant in Puerto Rico, the company sources coal from a mix of sources from the international market and in the local jurisdictions. To the extent possible, the company utilizes its global sourcing program to maximize the purchasing power of the company’s fuel procurement. 2% of the capacity of the company’s generation fleet utilizes pet coke or oil for fuel. The company sources oil and diesel locally at prices linked to international markets. The company largely sources pet coke from Mexico and the U.S. Utilities The company’s utility businesses consist of AES Indiana and AES Ohio in the U.S., and four utilities in El Salvador. AES' six utility businesses distribute power to 2.6 million customers and AES' two utilities in the U.S. also include generation capacity totaling 3,500 MW. AES Indiana, the company’s fully integrated regulated utility, and AES Ohio, the company’s transmission and distribution regulated utility, each operate as the sole distributors of electricity within their respective jurisdictions. AES Indiana owns and operates all of the facilities necessary to generate, transmit and distribute electricity. AES Ohio owns and operates all of the facilities necessary to transmit and distribute electricity. The company’s distribution business in El Salvador faces limited competition due to significant barriers to enter the market. According to El Salvador's regulation, large regulated customers have the option of becoming unregulated users and requesting service directly from generation or commercialization agents. In general, the company’s utilities sell electricity directly to end-users, such as homes and businesses, and bill customers directly. Key performance drivers for utilities include the regulated rate of return and tariff, seasonality, weather variations, economic activity and reliability of service. Development and Construction The company develops and constructs new generation facilities. For the company’s utility business, new plants may be built or existing plants retrofitted in response to customer needs or to comply with regulatory developments. The projects are developed subject to regulatory approval that permits recovery of the company’s capital cost and a return on the company’s investment. For the company’s generation businesses, the company’s priority for development is in key growth markets, where the company can leverage its global scale and synergies with the company’s existing businesses by adding renewable energy. The company makes the decision to invest in new projects by evaluating the strategic fit, financial profile, projected returns and risk for the investment and against alternative uses of capital, including corporate debt repayment. In most cases, the company enters into long-term contracts for output from new facilities prior to commencing construction. To limit required equity contributions from the company, it also seeks non-recourse project debt financing and other sources of capital, including partners, when it is commercially attractive. The company typically contracts with a third party to manage construction, although the company’s construction management team supervises the construction work and tracks progress against the project's budget, schedule, and the required safety, efficiency and productivity standards. Segments The company is organized into four technology-oriented SBUs: Renewables (solar, wind, energy storage, and hydro generation facilities); Utilities (AES Indiana, AES Ohio, and AES El Salvador regulated utilities and their generation facilities); Energy Infrastructure (natural gas, LNG, coal, pet coke, diesel, and oil generation facilities, and the company’s businesses in Chile); and New Energy Technologies (green hydrogen initiatives and investments in Fluence, Uplight, and 5B) — which are led by the company’s SBU Presidents. The company has two lines of business: generation and utilities. The company’s Renewables, Utilities, and Energy Infrastructure SBUs participate in the company’s first business line, generation, in which the company owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company’s Utilities SBU participates in the company’s second business line, utilities, in which the company owns and/or operates utilities to generate or purchase, distribute, transmit and sell electricity to end-user customers in the residential, commercial, industrial and governmental sectors within a defined service area. In certain circumstances, the company’s utilities also generate and sell electricity on the wholesale market. The company’s New Energy Technologies SBU includes investments in new and innovative technologies to support leading-edge greener energy solutions. Renewables The company’s Renewables SBU is the highest growth segment for AES, adding 4.9 GW to the company’s contracted backlog during 2023, including 1.2 GW with large technology companies. Specifically, demand from data centers in the U.S. is expected to nearly double in the next three years as generative artificial intelligence use-cases expand. The company’s well-established relationships with these customers, combined with the company’s proven track record of delivering the company’s projects, positions the company well to take advantage of this opportunity. The Renewables SBU has generation facilities in ten countries — the United States, Brazil, Argentina, Colombia, Mexico, Panama, Bulgaria, the Dominican Republic, Jordan, and the Netherlands. Generation — Total operating installed capacity of the Renewables SBU is 16,211 MW. AES Clean Energy Business Description — AES' U.S. renewables portfolio, referred to as AES Clean Energy, is the leading U.S. renewables growth platform in serving large corporations with its 51 GW development pipeline. AES Clean Energy aims to solve customers' energy challenges by offering an expanded portfolio of innovative solutions based on cutting-edge technologies that are designed to accelerate customers' transitions to carbon-free energy. The generation capacity of the systems owned and/or operated under AES Clean Energy is 6,964 MW across the U.S., with another 3,121 MW under construction, including 1,725 MW of solar, 297 MW of wind, and 1,099 MW of energy storage. AES Clean Energy has a 6.1 GW backlog of projects, the majority of which are expected to come online through 2025. The adoption of the Inflation Reduction Act (‘IRA’) in 2022 and the expansion of data center needs related to the growing use of generative artificial intelligence are expected to be a significant accelerant to the growth of the U.S. renewables market and AES seeks to capture a significant portion of this market expansion. AES Clean Energy comprises AES Renewable Holdings, sPower, ACED, and other renewable assets, as part of its broader investments in the U.S. ACED was formed on February 1, 2021, as specifically identified projects in the sPower and AES Renewable Holdings development platforms were merged. ACED serves as the development vehicle for all future renewables projects in the U.S. Following the merger, ACED expanded through the acquisitions of the Valcour Intermediate Holdings wind platform and Community Energy, a U.S. solar developer, as well as the acquisition of a small wind team and multiple development projects, most notably Bellefield in 2023. AES Clean Energy has also grown organically at a rapid pace and now has more than 1,300 employees, in contrast to less than 500 employees at the time of its formation in 2021 as it has expanded its capabilities and geographic reach to better serve the needs of the growing U.S. market. During the same time period, the development pipeline has also more than doubled. In line with AES' strategy of using partnerships to promote the effective deployment of capital, in February 2023, the company sold 49% of its indirect interest in a 1.3 GW portfolio of sPower's operating assets (‘OpCo B’) that includes 17 solar projects and one wind project, located across six states, to Hannon Armstrong Sustainable Infrastructure Capital, Inc. (‘HASI’). Further, in December 2023, AES Renewable Holdings issued preferred shares in a portfolio of approximately 605 MW across 200 solar and solar plus storage assets (‘OpCo 1’) operating across eleven states to HASI. Development Strategy — As states, communities, and organizations of all types make commitments and plan to reduce their carbon footprints, renewables are the fastest-growing source of electricity generation in the U.S. AES Clean Energy works with its customers to co-create and deliver the smarter, greener energy solutions that meet their needs, including 24/7 carbon-free energy. For example, AES has worked with several major technology companies to provide clean energy solutions to power their network of data centers and the company sees these relationships growing as utilization of generative artificial intelligence drives the expansion of data center use. In 2023, AES Clean Energy signed or was awarded 4,770 MW of PPAs. As of December 31, 2023, AES Clean Energy's renewables project backlog includes 6.1 GW of projects for which long-term PPAs have been signed or, as applicable, tariffs have been assigned through a regulatory process. The budget for construction of the projects under construction and the contracted projects is over $5 billion. The IRA includes increases, extensions, and/or new tax credits for onshore wind, solar, storage, and hydrogen projects. These changes in tax policy are supportive of the company’s strategy to grow the AES Clean Energy business through development of the company’s 51 GW U.S. pipeline. AES Brasil Business Description — AES Brasil is a publicly traded company in Brazil. AES controls and consolidates AES Brasil through its 47% economic interest. With an exclusive focus on renewable energy, AES Brasil has strategically positioned plants across the country to supply energy to customers and the regulated market. Leveraging hydro, solar, and wind generation, AES Brasil has been a key player in the Brazilian energy sector for nearly 25 years. As a 100% renewable energy generator, AES Brasil holds a diversified portfolio and has expanded from an installed capacity of 2.7 GW in 2016 to 5.2 GW in 2023, which is composed by hydroelectric plants (2,658 MW) operating under a 33-year concession expiring in 2032, wind complexes (2,194 MW) and solar complexes (328 MW), equivalent to 52%, 42% and 6%, respectively. Among these, 5.1 GW are already operational and 113 MW are under construction. AES Brasil aims to contract most of its physical guarantee requirements and sell the remaining portion in the spot market. The commercial strategy is reassessed periodically according to changes in market conditions, hydrology, and other factors. AES Brasil generally sells available energy through medium-term bilateral contracts. Development Strategy — AES Brasil's strategy is to grow by adding renewable capacity to its generation platform through acquisition or greenfield projects, to focus on client satisfaction and innovation to offer new products and energy solutions, and to be recognized for excellence in asset management. Under the current terms of the 2018 legal agreement in connection with AES Brasil's concession with the state government, AES Brasil is required to increase its capacity in the state of São Paulo by an additional 28 MW by October 2024. On November 30, 2021, AES Brasil acquired AGV VII Solar project with an under construction installable capacity of 33 MW of solar generation, that is expected to be concluded in 2024. AES Argentina Business Description — AES operates plants in Argentina within the Renewables SBU totaling 1,407 MW, representing 3% of the country's total installed capacity, and AES Argentina's plants are placed in strategic locations within the country in order to provide energy to the spot market and customers. AES primarily sells its energy in the wholesale electricity market where prices are largely regulated. In 2023, approximately 76% of the energy sold in the wholesale electricity market was produced by the hydropower plants, and 24% generated by the wind power plants. Development Strategy — AES Argentina has a pipeline of 753 MW of wind and solar greenfield projects in different stages of development. These projects are adjacent or nearby to AES Argentina's current operating assets and will be used to participate in future private auctions for renewable PPAs. AES Colombia Business Description — The company operates in Colombia through AES Colombia, a subsidiary of AES Andes, which owns Chivor, a hydroelectric plant with an installed capacity of 1,000 MW and Tunjita, a 20 MW run-of-river hydroelectric plant, both located approximately 100 miles east of Bogota, as well as the solar facilities of Castilla, Brisas, and San Fernando, 21 MW, 27 MW, and 61 MW respectively. AES Colombia’s installed capacity accounted for approximately 6% of system capacity at the end of 2023. AES Colombia is dependent on hydrological conditions, which influence generation and spot prices of non-contracted generation in Colombia. AES Colombia's commercial strategy aims to execute contracts with commercial and industrial customers and bid in public tenders, mainly with distribution companies, in order to reduce margin volatility with proper portfolio risk management. The remaining energy generated by the company’s portfolio is sold to the spot market, including ancillary services. Additionally, AES Colombia receives reliability payments for maintaining the plant's availability and generating firm energy during periods of power scarcity, such as adverse hydrological conditions, in order to prevent power shortages. Development Strategy — AES Colombia is committed to supporting its customers to diversify their energy supply and become more competitive. As part of this commitment, AES Colombia is developing a pipeline of 1.3 GW of solar and wind projects. Six wind projects totaling 1,149 MW are located in La Guajira, one of the windiest spots in the world. Of the 1,149 MW, 255 MW were awarded a 15-year PPAs in the renewable auction in 2019. AES Panama Business Description — AES owns and operates five hydroelectric plants totaling 705 MW of generation capacity, a wind farm of 55 MW and four solar plants of 10 MW each, which collectively represent 20% of the total installed capacity in Panama. The majority of the company’s hydroelectric plants in Panama are based on run-of-the-river technology, with the exception of 223 MW Changuinola plant with regulation reservoirs and the 260 MW Bayano plant. Hydrological conditions have an important influence on profitability. Variations in hydrology can result in an excess or a shortfall in energy production relative to the company’s contractual obligations. Hydro generation is generally in a shortfall position during the dry season from January through May, which is offset by thermal and wind generation since its behavior is opposite and complementary to hydro generation. The company’s hydro assets are mainly contracted through medium to long-term PPAs with distribution companies, while a small volume of the company’s hydro plants are contracted with unregulated users. The company’s hydro assets in Panama have PPAs with distribution companies expiring up to December 2030 for a total contracted capacity of 350 MW. Development Strategy — AES is investing in renewables projects within the region. This will increase complementary non-hydro renewable assets in the system and contribute to the reduction of hydrological risk in Panama. AES Mexico Business Description — Mesa La Paz is a 306 MW wind project developed under a joint venture with Grupo Bal, located in Llera, Tamaulipas. Mesa La Paz sells 72% of its power under long-term PPAs expiring up to 2045. Development Strategy — AES has partnered with Grupo Bal in a joint venture to co-invest in power and related infrastructure projects in Mexico, focusing on renewable generation. AES Bulgaria Business Description — AES owns an 89% economic interest in the St. Nikola wind farm (‘Kavarna’) with 156 MW of installed capacity. The power output of St. Nikola is sold to customers operating on the liberalized electricity market and the plant may receive additional revenue per the terms of an October 2018 Contract for Premium with the state-owned Electricity System Security Fund. In December 2022, Bulgaria implemented Regulation 2022/1854, approved by the European Council in October 2022 as an emergency intervention aiming at limiting energy prices in Europe. AES Dominicana Business Description — AES Dominicana has three operating subsidiaries within the Renewables SBU, each of which are owned 65% by AES. Bayasol owns and operates a 50 MW solar farm, Santanasol operates a 50 MW solar farm, and Agua Clara operates a 50 MW wind farm. AES has a strategic partnership with the Estrella and Linda Groups (‘Estrella-Linda’), a consortium of two leading Dominican industrial groups that manage a diversified business portfolio. In December 2023, AES completed the sale of an additional 10% ownership interest in AES Dominicana to the existing partners and a 10% interest to Grupo Popular's subsidiary, AFI Popular, selling 20% ownership interest in total. After this transaction, AES' ownership interest in AES Dominicana is 65%. AES Puerto Rico Business Description — AES Puerto Rico owns and operates Ilumina, a 24 MW solar facility in Puerto Rico. The plant is fully contracted through a long-term PPA with PREPA expiring in 2037. Development Strategy — Puerto Rico has clear goals of supplying its system from renewable resources, with targets of 40% from renewables by 2025 and 100% by 2050. To achieve the established target of 40%, PREPA intends to launch six tender processes for renewable generation in the coming years. Clean Flexible Energy LLC, the legal entity that AES is utilizing to develop renewables in Puerto Rico, expects to have a portfolio of solar and energy storage projects participating. On November 30, 2023, for the first tender process, Clean Flexible Energy, LLC and PREPA closed solar plus storage agreements for a total of 400 MW, which must reach COD within 24 months. AES Jordan Business Description — In Jordan, AES has a 36% controlling interest in a 48 MW solar plant fully contracted with the national utility under a 20-year PPA expiring in 2039. The company consolidates the results in its operations as the company has a controlling interest in this business. Utilities The company’s Utilities SBU is the second largest contributor to the company’s future growth, particularly in the U.S., where the company is targeting a combined 10% annual growth in rate base at the company’s two utilities: AES Indiana and AES Ohio. In this segment, the company also has four utilities in El Salvador and a portfolio of generation facilities, including at the company’s integrated utility in Indiana, with installed operating capacity of 3,500 MW. IPALCO (AES Indiana's parent), AES Ohio, and DPL Inc. (AES Ohio's parent) are all SEC registrants, and as such, follow the public filing requirements of the Securities Exchange Act of 1934. AES Indiana Business Description — IPALCO is a holding company whose principal subsidiary is AES Indiana. AES Indiana is an integrated utility that is engaged primarily in generating, transmitting, distributing, and selling electric energy to retail customers in the city of Indianapolis and neighboring areas within the state of Indiana. AES Indiana has an exclusive right to provide electric service to the customers in its service area, covering about 528 square miles with an estimated population of approximately 969,000 people. AES Indiana owns and operates four generating stations, all within the state of Indiana. The first station, Petersburg, is coal-fired, and consists of four units. AES Indiana retired 230 MW Petersburg Unit 1 in May 2021 and 415 MW Petersburg Unit 2 in June 2023, which resulted in 630 MW of total retired economic capacity at this station. AES Indiana plans to convert the remaining two coal units at Petersburg to natural gas (see Integrated Resource Plan below). The second station, Harding Street, consists of three natural gas-fired boilers and steam turbines and uses natural gas and fuel oil to power five combustion turbines. In addition, AES Indiana operates a 20 MW battery-based energy storage unit at this location, which provides frequency response. The third station, Eagle Valley, is a CCGT natural gas plant. The fourth station, Georgetown, is a small peaking station that uses natural gas to power combustion turbines. In addition, AES Indiana helps meet its customers' energy needs with long-term contracts for the purchase of 300 MW of wind-generated electricity and 94 MW of solar-generated electricity. In December 2021, AES Indiana completed the acquisition of Hardy Hills Solar Energy LLC, including the development of a 195 MW solar project (the ‘Hardy Hills solar project’). In December 2023, the first stage of construction for the Hardy Hills solar project was completed and initial operations for over half of the project commenced. The final stage of construction of the project is expected to be completed during the first half of 2024. In August 2023, AES Indiana completed the acquisition of Petersburg Energy Center, LLC, including the development of a 250 MW solar and 45 MW (180 MWh) energy storage facility (the ‘Petersburg Energy Center project’). The Petersburg Energy Center project is expected to be completed in 2025. In June 2023, AES Indiana executed an agreement for the construction of the 200 MW (800 MWh) Pike County BESS project to be developed at the AES Indiana Petersburg Plant site in Pike County, Indiana, subject to IURC approval, which was received in January 2024. The Pike County BESS project is expected to be completed in 2024. In July 2023, AES Indiana executed a purchase agreement for the acquisition of the Hoosier Wind Project, which is an existing 106 MW wind facility located in Benton County, Indiana, subject to IURC approval, which was received in January 2024. The acquisition of the Hoosier Wind Project is expected to be completed in the first quarter of 2024. Regulatory Framework and Market Structure — AES Indiana is subject to comprehensive regulation by the IURC with respect to its services and facilities, retail rates and charges, the issuance of long-term securities, and certain other matters. The regulatory authority of the IURC over AES Indiana's business is typical of regulation generally imposed by state public utility commissions. The IURC sets tariff rates for electric service provided by AES Indiana. Development Strategy — AES Indiana's construction program is composed of capital expenditures necessary for prudent utility operations and compliance with environmental regulations, along with discretionary investments designed to replace aging equipment or improve overall performance. Integrated Resource Plan — In December 2022, AES Indiana filed its Integrated Resource Plan (‘IRP’), which describes AES Indiana's Preferred Resource Portfolio for meeting generation capacity needs for serving AES Indiana's retail customers over the next several years. The Preferred Resource Portfolio is AES Indiana's reasonable least cost option and provides a cleaner and more diverse generation mix for customers. The 2022 IRP short-term action plan includes converting the two remaining coal units at Petersburg to natural gas. AES Indiana has not yet filed for the regulatory approvals from the IURC to convert Petersburg units 3 and 4, however, AES Indiana expects to do so at the appropriate time. Additionally, AES Indiana plans to add up to 1,300 MW of wind, solar, and battery energy storage by 2027. As new technologies, such as green hydrogen, small modular reactors, and carbon capture are developed and cost effective, the company will evaluate them in the future planning processes. AES Ohio Business Description — DPL is a holding company whose principal subsidiary is AES Ohio. AES Ohio is a utility company that transmits and distributes electricity to approximately 539,000 retail customers in a 6,000 square mile area of West Central Ohio. AES Ohio has the exclusive right to provide transmission and distribution services to its customers, and procures retail standard service offer (‘SSO’) electric service on behalf of residential, commercial, industrial, and governmental customers through a competitive bid auction process. Regulatory Framework and Market Structure — AES Ohio is regulated by the PUCO for its distribution services and facilities, retail rates and charges, reliability of service, compliance with renewable energy portfolio requirements, energy efficiency program requirements, and certain other matters. The PUCO maintains jurisdiction over the delivery of electricity, SSO, and other retail electric services. AES Ohio's distribution rates are regulated by the PUCO and are established through a traditional cost-based rate-setting process. AES Ohio's retail rates include various adjustment mechanisms, including but not limited to, the timely recovery of costs incurred related to power purchased through the competitive bid process, participation in the PJM RTO, severe storm damage, and energy efficiency. AES Ohio is a member of PJM, an RTO that operates the transmission systems owned by utilities operating in all or parts of a multi-state region, including Ohio. PJM also administers the day-ahead and real-time energy markets, ancillary services market and forward capacity market for its members. AES Ohio's distribution rates are regulated by the PUCO and are established through a traditional cost-based rate-setting process. AES Ohio is a member of PJM, an RTO that operates the transmission systems owned by utilities operating in all or parts of a multi-state region, including Ohio. Development Strategy — Planned construction projects primarily relate to new investments in and upgrades to AES Ohio's transmission and distribution system. AES El Salvador Business Description — AES El Salvador is the majority owner of four of the five distribution companies operating in El Salvador (CAESS, CLESA, EEO and DEUSEM). AES El Salvador's territory covers 77% of the country and accounted for 4,293 GWh of the market energy sales during 2023. AES El Salvador owns and operates four solar farms, Opico Power, Moncagua, and Metapan with 4 MW, 3 MW and 15 MW of capacity, respectively; Meanguera del Golfo, a solar and battery storage facility with 0.6 MW capacity; AES Nejapa, a biomass power plant with 6 MW capacity; and 50% of Bosforo and Cuscatlan Solar, solar farms with 100 MW and 10 MW capacity, respectively. The energy produced by these solar farms is fully contracted by AES' utilities in El Salvador. In addition, AES El Salvador offers customers non-regulated services such as energy trading, electromechanical construction, O&M of electrical assets, EPC, pole rental, and tax collection for municipalities. Development Strategy — In order to explore new business opportunities, AES El Salvador created AES Soluciones, an LED public lighting service provider and the main commercial and industrial solar photovoltaic EPC provider in the country. Electromobilty is also being promoted by AES Soluciones through a partnership with Blink Charger in order to design and deploy a private network of electric chargers throughout the country. AES Next, Ltda de. C.V. is the O&M services provider for the Bosforo project, as well as a developer of solar MW in El Salvador. Furthermore, the four distribution companies operated by AES El Salvador started a digitization and modernization initiative as part of the development, sustainability, and growth strategy of the business. Energy Infrastructure The company’s Energy Infrastructure SBU aims to provide energy security to enable the integration of new renewables, maximize the value of the company’s gas generation and LNG business through flexible operations that support the energy transition, and exit coal generation to achieve the company’s decarbonization targets. This segment comprises generation facilities, using natural gas, LNG, coal, pet coke, diesel, and/or oil, in nine countries — Vietnam, the United States, Argentina, Chile, Bulgaria, Mexico, Jordan, Panama and the Dominican Republic. Although the company’s businesses in Chile have a mix of generation sources, including renewables, the generation from all sources is pooled to service the company’s existing PPAs. Consequently all of Chile’s generation is included within the Energy Infrastructure SBU. Generation — Operating installed capacity of the company’s Energy Infrastructure segment totals 14,885 MW. AES Chile Business Description — In Chile, through AES Andes, the company is engaged in the generation and supply of electricity (energy and capacity) in the SEN—see International Energy Markets and Regulatory Environment below. AES Andes is a publicly traded company in Chile and has applied to be de-listed. AES Andes owns all of the company’s assets in Chile. AES has a 99.5% ownership interest in AES Andes, the third largest generation operator in Chile in terms of installed capacity with 3,516 MW, excluding energy storage, and has a market share of approximately 11% as of December 31, 2023. In addition, AES Andes has 237 MW of energy storage systems in operation. AES Andes owns a diversified generation portfolio in Chile in terms of geography, technology, customers, and energy resources. AES Andes' generation plants are located near the principal electricity consumption centers, including Santiago, Valparaiso, and Antofagasta. AES Andes' diverse generation portfolio provides flexibility for the management of contractual obligations with regulated and unregulated customers, provides backup energy to the spot market and facilitates operations under a variety of market and hydrological conditions. AES Andes' Green Blend strategy aims to reduce carbon intensity and incorporate renewable energy to extend the company’s existing conventional PPAs. This strategy de-links company's PPAs from legacy fossil resources, grows its renewable energy portfolio, and delivers a competitive, reliable energy solution. In line with the Green Blend strategy, AES Andes has committed to not build additional coal-based power plants and to advance the development of new renewables projects, including the implementation of BESS and other technological innovations that will provide greater flexibility and reliability to the system. Decarbonization Strategy — The Chilean government’s decarbonization plan includes the complete retirement of the SEN coal fleet by the end of 2040 and carbon neutrality by 2050. Following the issuance of Supreme Decree Number 42 on December 26, 2020 by the Ministry of Energy and per the disconnection and termination agreement signed with the Chilean government in June 2019, AES Andes accelerated the retirement plans of its Ventanas 1 and Ventanas 2 coal-fired units, disconnecting them from the SEN as of June 30, 2022 and December 31, 2023, respectively. In July 2021, AES Andes committed to allow the shutdown of coal-fired operations at its Ventanas 3, Ventanas 4, Angamos 1, and Angamos 2 units as early as January 1, 2025, once the safety, sufficiency, and competitiveness of the system allows it. These four units together have an installed capacity of 1,097 MW and each unit has publicly announced phase-out plans in line with the company’s decarbonization strategy. In July 2021, the company also sold its entire ownership interest in Guacolda, a 764 MW coal-fired plant located in Chile. On February 8, 2024, AES Andes was authorized by the CEN to definitively disconnect the coal-fired generation units Norgener 1 and Norgener 2, with an installed capacity of 276 MW, from the SEN on March 31, 2024. Ventanas, Angamos, Guacolda, and Norgener represent an aggregate of 2.5 GW of coal-fired capacity, or 82% of AES Andes’ legacy coal fleet. AES Andes continues to work under the Green Blend strategy to accelerate the phase-out of the remaining coal-fired units. Development Strategy — AES Andes is committed to reducing the carbon intensity of the Chilean power grid and plans to increase the renewable energy capacity in its portfolio. As part of this commitment, AES Andes is building wind, solar, and battery projects to supply agreements with its main mining customers. In total, the pipeline in Chile includes 5.4 GW under development at different stages and geographical locations. Within this portfolio, the company has made significant progress in the development of non-conventional renewable energy (‘NCRE’) projects that are already contracted. The Rinconada wind project (258 MW) is being developed in the Biobío region. Several projects are being developed in the Antofagasta region: a new expansion of the Andes Solar power plant which will include a battery system to optimize solar generation (186 MW + 266 MW-3hr), the Cristales solar power plant (187 MW + 267 MW-3hr), the Bolero battery system (136 MW-3hr), and the Pampas hybrid project (120 MW wind, 160 MW solar + 229 MW-3hr). In addition, Empresa Electrica Angamos, a subsidiary of AES Andes, received environmental approval for an innovative initiative on November 29,2023 to revolutionize the conversion of thermoelectric plants using molten salts. This project explores the possibility of replacing the current coal-fired generation of units 1 and 2 of the Angamos thermoelectric power plant, located in Mejillones, Antofagasta region, with a molten salt system. With this technology, renewable energy is stored as heat to later be used to provide energy and emission-free capacity to the electrical system. Empresa Electrica Angamos is also promoting the advancement of green hydrogen technology for mass production through the Adelaida project, which contemplates the installation of a small-scale green hydrogen production plant with a capacity of 1,000 kg/day of green hydrogen, equivalent to 2.5 MW of power. The U.S. Conventional Generation Business Description — In the U.S., the company owns a conventional generation portfolio. The principal markets and locations where the company is engaged in the generation and supply of electricity (energy and capacity) are the California Independent System Operator (‘CAISO’), PJM, and Puerto Rico. AES Southland, operating in the CAISO, is the company’s most significant generation business. In June 2023, the company closed on an agreement to terminate the PPA for the Warrior Run coal-fired power plant and to continue providing capacity through May 2024. Many of the company’s non-renewable U.S. generation plants provide baseload operations and are required to maintain a guaranteed level of availability. The company’s non-QF generation businesses in the U.S. operate as Exempt Wholesale Generators as defined under the Energy Policy Act of 1992, amending the Public Utility Holding Company Act (‘PUHCA’). These businesses, subject to approval of FERC, have the right to sell power at market-based rates, either directly to the wholesale market or to a third-party offtaker such as a power marketer or utility/industrial customer. Under the Energy Policy Act and FERC's regulations, approval from FERC to sell wholesale power at market-based rates is generally dependent upon a showing to FERC that the seller lacks market power in generation and transmission, that the seller and its affiliates cannot erect other barriers to market entry, and that there is no opportunity for abusive transactions involving regulated affiliates of the seller. AES Southland Business Description — AES Southland is one of the largest generation operators in California by aggregate installed capacity, with an installed gross capacity of 3,699 MW at the end of 2023. The five coastal power plants comprising AES Southland are in areas that are critical for local reliability and play an important role in integrating the increasing amounts of renewable generation resources in California. The AES Southland Energy Infrastructure assets are composed of three once-through cooling (‘OTC’) power plants and two combined cycle gas-fired generation facilities. Southland — Southland comprises AES Huntington Beach, LLC, AES Alamitos, LLC, and AES Redondo Beach (‘Southland OTC units’). Until December 31, 2023, the Southland OTC units were contracted through Resource Adequacy Purchase Agreements (‘RAPAs’). Under the RAPAs, as approved by the California Public Utilities Commission, these generating stations provided resource adequacy capacity, and had no obligation to produce or sell any energy to the RAPA counterparty. However, the generating stations were required to bid energy into the California ISO markets. Commencing on January 1, 2024, AES Huntington Beach, LLC and AES Alamitos, LLC, are contracted through Standby Capacity Purchase Agreements with the California Department of Water Resources (‘California DWR’), an agency of the State of California, as part of the Electricity Supply Strategic Reliability Reserve Program (‘Strategic Reserve’) established under California Assembly Bill 205. Under these agreements, California DWR is purchasing each facility’s available capacity for a three-year term. The Southland OTC units are subject to a variety of rules governing water use and discharge. The units are required to comply with the more stringent of state or federal requirements. AES Southland's plan is to comply with the SWRCB OTC Policy by shutting down and permanently retiring all remaining generating units that utilize OTC by the compliance dates included in the OTC Policy. See United States Environmental and Land-Use Legislation and Regulations—Cooling Water Intake for further discussion of AES Southland’s plans regarding the OTC Policy. Southland Energy — AES Huntington Beach Energy, LLC and AES Alamitos Energy, LLC, (collectively ‘Southland Energy’) each operate under 20-year tolling agreements with Southern California Edison (‘SCE’) to provide 1,387 MW of combined cycle gas-fired generation (through 2040). The contracts are RAPAs with annual energy tolling put options. If Southland Energy exercises the annual put option, all capacity, energy and ancillary services will be sold to SCE in exchange for a monthly energy and fixed capacity payment that covers fixed operating cost, debt service, and return on capital. In addition, SCE will reimburse variable costs and provide the natural gas. Southland Energy may exercise the annual put option for any contract year by delivering notice of such exercise to SCE at least one year before the start of such contract year, and no more than two years before the start of any contract year. If the annual put options are not exercised, Southland Energy is required to sell the physical output of the combined cycle gas-fired generation units to AES Integrated Energy. AES Integrated Energy is required to bid energy into the California ISO market. AES Integrated Energy enters into commodity swap contracts to economically hedge price variability inherent in electricity sales arrangements. Southland Energy continues to receive the monthly fixed capacity payments for periods when the put option is not exercised. AES Puerto Rico Business Description — AES Puerto Rico owns and operates a 524 MW coal-fired cogeneration plant representing approximately 10% of the installed capacity in Puerto Rico. This plant is fully contracted through a long-term PPA with PREPA expiring in 2027. AES Puerto Rico receives a capacity payment based on the plants' twelve month rolling average availability, receiving the full payment when the availability is 90% or higher. AES Argentina and TermoAndes Business Description — AES operates plants in Argentina within the Energy Infrastructure SBU totaling 2,814 MW, representing 6% of the country's total installed capacity. AES owns a diversified generation portfolio in Argentina in terms of geography, technology, and fuel source, and AES Argentina's plants are placed in strategic locations within the country in order to provide energy to the spot market and contracted customers. AES primarily sells its energy in the wholesale electricity market where prices are largely regulated. In 2023, approximately 79% of the energy was sold in the wholesale electricity market and 21% was sold under contract by TermoAndes power plant. AES Vietnam Business Description — Mong Duong 2 is a 1,242 MW gross coal-fired plant located in the Quang Ninh Province of Vietnam and was constructed under a BOT service concession agreement expiring in 2040. This is the first coal-fired BOT plant using pulverized coal-fired boiler technology in Vietnam. The BOT company has a PPA with EVN and a Coal Supply Agreement with Vinacomin, both expiring in 2040. On November 29, 2023, AES executed an agreement to sell its entire 51% interest in the Mong Duong 2 plant. The sale is expected to close by the end of 2025, subject to customary approvals, including from the Government of Vietnam and the minority partners in Mong Duong 2. Development Strategy — In Vietnam, the company continues to advance the development of the company’s Son My LNG terminal project, which has a design capacity of up to 9.6 million metric tonnes per annum, and the Son My 2 CCGT project, which has a capacity of about 2,250 MW. In September 2019 the company received a formal approval as the government-mandated investor with 100% equity ownership in the Son My 2 CCGT project and executed a statutory memorandum of understanding with Vietnam’s Ministry of Industry and Trade to continue developing the Son My 2 CCGT project under Vietnam’s Build-Operate-Transfer legal framework. In October 2019, the company received formal approval as a government-mandated investor in the Son My LNG terminal project in partnership with PetroVietnam Gas. In September 2021, the company signed the joint venture agreement with PetroVietnam Gas and established Son My LNG Terminal LLC in April 2022. In July 2023, Son My LNG Terminal LLC received approval of investment policy and as the government-approved investor from the Binh Thuan Provincial People’s Committee. The Son My 2 CCGT project will utilize the Son My LNG terminal project and will be its anchor customer. AES Mexico Business Description — The TEG and TEP pet coke-fired plants, located in Tamuin, San Luis Potosi, supply power to their offtakers under long-term PPAs expiring in 2027 with a 90% availability guarantee. TEG and TEP secure their fuel under a long-term contract. TEG and TEP are in the migration process from the Legacy market to the New Electric Industry law. Merida is a CCGT located on Mexico's Yucatan Peninsula. Merida sells power to the CFE under a capacity and energy based long-term PPA through 2025. Additionally, the plant purchases natural gas and diesel fuel under a long-term contract with one of the CFE’s subsidiaries, the cost of which is then passed through to the CFE under the terms of the PPA. AES Dominicana Business Description — AES Dominicana has two operating subsidiaries within the Energy Infrastructure SBU, Andres and Los Mina, both of which are owned 65% by AES. With a total of 697 MW of installed capacity, AES provides 12% of the country's capacity and supplies approximately 16% of the country's energy demand via these generation facilities. 668 MW was predominantly contracted until 2022 with government-owned distribution companies and large customers, and have been contracted back with the distribution companies in January 2023. Andres owns and operates a combined cycle natural gas turbine and an energy storage facility with combined generation capacity of 329 MW, as well as the only LNG import terminal in the country, with 160,000 cubic meters of storage capacity. Los Mina owns and operates a combined cycle facility with two natural gas turbines and an energy storage facility with combined generation capacity of 368 MW. AES has a strategic partnership with the Estrella and Linda Groups (‘Estrella-Linda’), two leading Dominican industrial groups that manage a diversified business portfolio. In December 2023, AES completed the sale of an additional 10% ownership interest in AES Dominicana to the existing partners and a 10% interest to Grupo Popular's subsidiary, AFI Popular, selling 20% ownership interest in total. After this transaction, AES' ownership interest in AES Dominicana is 65%. AES Dominicana has entered into a new long-term LNG purchase contract through the second half of 2034 to cover the expected dispatch for Andres and Los Mina. Andres has long-term contracts to sell regasified LNG to industrial users and third party power plants within the Dominican Republic, thereby capturing demand from industrial and commercial customers and for other power generation companies that had switched their operations to natural gas. AES partnered with Energas in a joint venture to operate the 50 km Eastern Pipeline from February 2020. The joint venture also developed an expanded LNG facility of 120,000 cubic meters, including additional storage, regasification, and truck loading capacity, which reached COD in the fourth quarter of 2023. Development Strategy — AES will continue to develop the commercialization of natural gas and incorporate partners directly in gas infrastructure projects. AES Bulgaria Business Description — The company’s AES Maritza plant is a 690 MW lignite fuel thermal power plant. AES Maritza's entire power output is contracted with NEK, the state-owned public electricity supplier, independent energy producer, and trading company. Maritza is contracted under a 15-year PPA that expires in May 2026. AES Maritza is collecting receivables from NEK in a timely manner. However, NEK's liquidity position is subject to political conditions and regulatory changes in Bulgaria. The DG Comp is reviewing NEK’s PPA with AES Maritza pursuant to the European Union’s state aid rules. AES Maritza believes that its PPA is legal and in compliance with all applicable laws. AES Panama Business Description — AES owns and operates a natural gas-fired power plant with 381 MW of generation capacity. Furthermore, AES operates an LNG regasification facility, a 180,000 cubic meter storage tank, and a truck loading facility. In December 2023, AES completed the sale of 35% ownership interest in Colon to Grupo Linda and Grupo Estrella, the company’s minority partners in AES Dominicana. After this transaction, AES' ownership interest is 65% in both assets. The company’s thermal asset in Panama has PPAs with distribution companies for a total contracted capacity of 350 MW expiring in August 2028, which matches the term of the LNG supply agreement of such thermal assets. The LNG supply contract has enough flexibility to divert volumes to the Dominican Republic, which increases the connectivity of the company’s two onshore terminals and allows to optimize the LNG position of the portfolio. Colon LNG Marketing continues developing the LNG market in Latin America, with clients already established in Panama and Colombia. Additional efforts are being undertaken in Costa Rica, other Central America regions, and Caribbean islands, mainly focusing on small scale LNG logistics. Development Strategy — Given the company’s LNG facility’s excess capacity in Panama, the company is developing natural gas supply solutions for third parties such as power generators and industrial and commercial customers. This strategy will support a growing demand for natural gas in the region and will contribute to AES' mission by reducing CO2 emissions as a result of using LNG. AES Jordan Business Description — In Jordan, AES has a 37% controlling interest in Amman East, a 472 MW oil/gas-fired plant fully contracted with the national utility under a 25-year PPA expiring in 2033, and a 36% controlling interest in the IPP4 plant, a 250 MW oil/gas-fired peaker plant fully contracted with the national utility until 2039. The company consolidates the results in its operations as the company has a controlling interest in these businesses. On November 10, 2020, AES executed a sale and purchase agreement to sell approximately 26% effective ownership interest in both the Amman East and IPP4 plants. The sale is expected to close in the first half of 2024 subject to customary closing conditions, including lender consents and regulatory approvals. New Energy Technologies The company’s New Energy Technologies SBU includes investments in new and innovative technologies, designed to both strengthen the competitive advantage of AES' core businesses and enable the growth of new green businesses. This segment includes ownership stakes in third-party platforms, as well as new initiatives developed internally. It includes investments in Fluence, Uplight, and 5B, as well as the company’s green hydrogen initiatives. The company is a leader in developing green hydrogen and the company is pursuing multiple projects across the company’s geographies with total potential installed electrolyzer capacity of up to 1,200 metric tons/day by 2030. Fluence and Uplight are unconsolidated entities. Fluence Business Description — Fluence, created in 2018 as a joint venture by AES and Siemens AG, is a global energy storage technology and services company aligned with the AES strategy to drive decarbonization of the electric sector. Fluence is a leading global provider of energy storage products and services and artificial intelligence (AI)-enabled digital applications for renewables and storage. AES owns Class B-1 common stock, entitling AES to five votes per share held, and continues to hold its economic interest in the operating subsidiary of Fluence Energy, Inc. AES' economic interest in Fluence is 29%. The company continues to account for Fluence as an equity method investment. Development Strategy — The grid-connected energy storage sector is expanding rapidly. By incorporating energy storage across the electric power network, utilities and communities around the world will optimize their infrastructure investments, increase network flexibility and resiliency, and accelerate cost-effective integration of renewable electricity generation. According to the 2H 2023 Energy Storage Market Outlook published by BloombergNEF in October 2023, the global energy storage market is growing at a 27% compound annual growth rate to 2030, with annual additions reaching 110 GW/372 GWh, or 2.6x expected 2023 gigawatt installations. Additional growth opportunities exist in the provision of operational and maintenance services associated with energy storage products, as well as the provision of digital applications and solutions to improve performance and economic output. Fluence is positioned to be a leading participant in this growth, with 3.6 GW of energy storage assets deployed and 5.1 GW of contracted backlog, with a gross global pipeline of 13.2 GW as of December 31, 2023. Uplight Business Description — The company holds an equity interest in Uplight as part of its digitization and growth strategy. Uplight offers a comprehensive digital platform for utility customer engagement. Uplight provides software and services to approximately 70 of the leading electric and gas utilities, principally in the U.S., with the mission of motivating and enabling energy users and providers to transition to a clean energy ecosystem. Uplight's solutions form a unified, end-to-end customer energy experience system that delivers innovative energy efficiency, demand response, and clean energy solutions quickly. Utility and energy company leaders rely on Uplight and its customer-focused digital energy experiences to improve customer satisfaction, reduce service costs, increase revenue, and reduce carbon emissions. At December 31, 2023, the company held a 29.4% ownership interest in Uplight. On February 9, 2024, another shareholder was issued additional shares in Uplight as a result of contributing a business and $40 million in cash to Uplight. The business contributed is AutoGrid, a market leader in the fast-growing Virtual Power Plant (‘VPP’) space. As a result of the additional shares issued to the other shareholder, AES' interest was diluted to approximately 25%. Uplight continues to be accounted for as an equity method investment. Development Strategy — AES' collaboration with Uplight is designed to create value for Uplight, AES, and their respective customers. AES Indiana and AES Ohio have implemented Uplight's consumer engagement solutions in the support of energy efficiency and demand response programs, as well as piloted new solutions with Uplight. 5B Business Description — The company has a strategic investment in 5B, a solar technology innovator with the mission to accelerate the transformation of the world to a clean energy future. 5B's technology design enables solar projects to be installed up to three times faster, while allowing for up to two times more energy within the same footprint and can sustain higher wind speeds than traditional solar plants. Development Strategy — In addition to a large global market for third party projects, there is an addressable market of nearly 5 GW across the company’s development pipeline. As of December 31, 2023, 5B has achieved sales orders of over 250 MW. AES expects to utilize this technology in conjunction with ongoing automation and digital initiatives to speed up delivery time and lower costs. 5B technology has been deployed at multiple locations in AES for a total of 23 MW across five projects in Panama, Chile, El Salvador, and the U.S., with future deployments expected across markets in the AES portfolio. Environmental and Land-Use Regulations The company is required to comply with the CSAPR in certain states, including in Indiana and Maryland. The company’s U.S. facilities are subject to the CWA Section 316(b) rule issued by the EPA effective in 2014 that seeks to protect fish and other aquatic organisms drawn into cooling water systems at power plants and other facilities. International Environmental Regulations All AES Argentina plants are certified under international standards of Quality (ISO 9001), Safety and Health (ISO 45.001) and Environment (ISO 14001). At the end of 2023, AES Colombia obtained the environmental license, issued by the ANLA, for the 500 kV line to connect the Guajira pipeline projects. AES Colombia has obtained environmental licenses for 406 MW of wind projects in Guajira. Customers The company sells to a wide variety of customers. In the company’s generation business, the company owns and/or operates power plants to generate and sell power to wholesale customers, such as utilities and other intermediaries. The company’s utilities sell to end-user customers in the residential, commercial, industrial, and governmental sectors in a defined service area. History The AES Corporation was founded in 1981. The company was incorporated in 1981.