Global Utility White Paper CONFIDENTIAL 1. Executive Summary This White Paper discusses Electron Capital’s (“Electron”) views on the global utility sector and outlines why now is a particularly advantageous time for long/short investing in the sector using Electron’s research approach that focuses on structural change. Electron’s 5 investment professionals, working together an average of 6 years, have generated a 7-year track record of long/short investing in the global utility sector. Returns have annualized 10.3% and have been characterized by strong alpha generation (80% of returns; Jensen’s alpha calculation) in a dismally-performing global sector (-0.2% absolute). Electron will continue its approach with the Electron Global Fund, an absolute return product. (See Appendices 1 and 2 for Electron’s process and the sector’s history.) Electron invests in a deep universe of utility and infrastructure stocks, comprising 375 companies with a market cap of $2.8 trillion. Our approach is truly global as 40-60% of the portfolio’s historical gross has been allocated outside the US. Stocks covered include the electric, gas, water and waste utilities in addition to infrastructure companies (defined as those levered to utilities or utility-like). For the sake of simplicity, the rest of this White Paper will focus on the electric utilities, the largest subsector; we refer to this subsector when we reference “utility”. e Advantageous time to be long/short investing in the global utility sector (Section 2). o Structural change in the sector has been accelerating after a recession-induced slowdown. o Long-only investors are not positioned for such structural change in what is the world’s most underweight sector. o We believe hedge fund investors have already begun to make this turn as evidenced by a significant increase in net exposure over the last 6 months. e Structural changes will drive the largest alpha opportunities in all major regions (Section 3). o US utilities wil