WELLS FARGO SECURITIES, LLC

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1 CONSENT SOLICITATION STATEMENT SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY Solicitation of Consents With Respect To Its Gas Project Revenue Bonds (Project No. 1), Series 2007A (Fixed Rate) and Series 2007B (LIBOR Index Rate) (maturities and CUSIP numbers on inside cover page) Record Date: 5:00 p.m. New York City time, July 26, 2013 Solicitation Expiration Date: 5:00 p.m. New York City time, August 23, 2013, unless amended The Southern California Public Power Authority ( SCPPA ) hereby solicits consents (the Consents ) of owners of SCPPA s Gas Project Revenue Bonds (Project No. 1), Series 2007A and Series 2007B (the Bonds ), to Amendments hereinafter described (the Amendments ) upon the terms and conditions set forth in this Consent Solicitation Statement (as the same may be amended or supplemented, the Consent Solicitation Statement ) and the accompanying Consent Form (collectively, the Consent Solicitation ). Bonds and Initial Transaction. The Bonds were issued pursuant to a Trust Indenture, dated as of October 1, 2007, and subsequently amended (the Indenture ), between SCPPA and U.S. Bank National Association, as trustee (the Trustee ), to finance SCPPA s prepayment for five long-term Prepaid Natural Gas Sales Agreements entered into with J. Aron & Co. ( J. Aron ), whose obligations thereunder and certain other contracts are guaranteed by The Goldman Sachs Group, Inc. ( GSG ) under the Goldman Sachs Guaranty. The gas purchased under the Prepaid Natural Gas Sales Agreements is contracted to be sold to five SCPPA member municipal utilities (the Project Participants ) under five Prepaid Natural Gas Program Gas Supply Agreements ( Gas Supply Contracts ) at prices based on monthly indices and hedged under five commodity price swap transactions (the Authority Commodity Swaps ). Amendments. As more fully described in this Consent Solicitation Statement, the Amendments are intended to (a) provide additional credit support for payments by three of the Project Participants by amending and restating the Receivables Purchase Agreement and the Goldman Sachs Guaranty, (b) replace AIG-FP Broadgate Limited with Mitsubishi UFJ Securities International plc as the party to the Authority Commodity Swaps, (c) create a custodial arrangement with respect to payments owed by J. Aron and guaranteed by GSG or to J. Aron under corresponding J. Aron Commodity Swaps in order to mitigate SCPPA s credit exposure to the counterparty under the Authority Commodity Swaps, and (d) replace the investment of the Debt Service Account in an investment agreement with American General Life Insurance Company with an investment agreement with J. Aron guaranteed by GSG and, in consideration for these undertakings by J. Aron and GSG, (e) eliminate a Seller Default in the Prepaid Natural Gas Sales Agreements if GSG fails to maintain an investment grade credit rating from S&P or Moody s and fails to provide credit support on demand. For certain risks associated with the Amendments, see Risk Factors Relating to the Amendments herein. Conditions to Amendments. The Amendments will become effective upon the satisfaction of certain conditions, including but not limited to an increase in the ratings of the Bonds to at least A3 from Moody s and A- from Fitch Ratings while preserving a rating of at least A- from S&P. Further Information. Any questions or requests for assistance may be directed to Wells Fargo Securities, LLC, the solicitation agent for the Consent Solicitation (the Solicitation Agent ), at the address and telephone number set forth on the back cover of this Consent Solicitation Statement. Requests for copies of this Consent Solicitation Statement, the Consent Form and other related materials, and questions related to the Retail Processing Fee described herein, should be directed to D.F. King & Co., Inc. (the Information and Tabulation Agent ) at the telephone numbers set forth on the back cover of this Consent Solicitation Statement. None of SCPPA, the Project Participants, J. Aron, GSG, the Trustee, the Information and Tabulation Agent or the Solicitation Agent makes any recommendation as to whether or not bondholders should consent to the Amendments. The Solicitation Agent for the Consent Solicitation is: Dated: July 30, 2013 WELLS FARGO SECURITIES, LLC

2 MATURITIES AND CUSIP NUMBERS GAS PROJECT REVENUE BONDS (PROJECT NO. 1), SERIES 2007A (FIXED RATE) DUE NOVEMBER 1, OUTSTANDING PRINCIPAL AMOUNT INTEREST RATE CUSIP $ 4,065, % AF ,875, AG ,075, AH ,275, AJ ,605, AK ,385, AL ,445, AM ,725, AN ,940, AP ,705, AQ ,250, AR ,850, AS ,805, AT ,655, AU ,750, AV ,965, AW ,795, AX2 $108,390,000 Series 2007A Term Bonds due November 1, 2033; Rate 5.00%; CUSIP AY0 1 GAS PROJECT REVENUE BONDS (PROJECT NO. 1), SERIES 2007B (INDEX RATE) $36,000,000 Series 2007B Term Bonds due November 1, 2038; Price: 100%; CUSIP AZ7 1 LIMITATION ON INFORMATION No person has been authorized to give any information or make any representations other than those contained or incorporated by reference in this Consent Solicitation Statement and, if given or made, such information or representations must not be relied upon as having been authorized by SCPPA or any other person mentioned herein. This Consent Solicitation Statement is not being made to, and no Consents are being solicited from, persons in any jurisdiction in which it is unlawful to make such Consent Solicitation or grant such Consent. NEITHER THIS CONSENT SOLICITATION STATEMENT NOR THE CONSENT FORM NOR ANY RELATED DOCUMENTS HAVE BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, NOR HAVE THEY BEEN FILED WITH OR REVIEWED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY OF ANY COUNTRY. NO AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS CONSENT SOLICITATION STATEMENT OR THE CONSENT FORM OR ANY RELATED DOCUMENTS, AND IT IS UNLAWFUL AND MAY BE A CRIMINAL OFFENSE TO MAKE ANY REPRESENTATION TO THE CONTRARY. 1 CUSIP is a registered trademark of the American Bankers Association. The CUSIP number listed above is being provided solely for the convenience of bondholders only, and SCPPA does not make any representation with respect to such number or undertake any responsibility for its accuracy. The CUSIP number is subject to being changed as a result of various actions including, but not limited to, a refunding in whole or in part of the Bonds. Principal amount reflects cancellation of $165,450,000 of par on October 22, Schedules II and IV of the amended Indenture reflect such a reduction. - ii -

3 TABLE OF CONTENTS BACKGROUND... 1 Purpose of Existing Transactions... 1 Gas Contracts... 1 Commodity Price Swaps... 1 Receivables Purchase Agreement... 2 Debt Service and Debt Service Reserve Accounts... 2 Goldman Sachs Guaranty... 2 Subsequent Transaction... 2 PURPOSE OF AMENDMENTS... 3 DESCRIPTION OF THE AMENDMENTS... 4 Amended Receivables Purchase Agreement... 4 Amended Indenture... 4 Amended Prepaid Natural Gas Sales Agreements... 6 Custodial Agreement and Amended Commodity Swaps... 7 J. Aron Investment Agreement... 9 Amended Goldman Sachs Guaranty... 9 AVAILABILITY OF INFORMATION... 9 RISK FACTORS RELATING TO THE AMENDMENTS... 9 Elimination of Seller Default Trigger... 9 J. Aron Investment Agreement Replacement Commodity Swap Counterparty Ratings Other Relationships THE CONSENT SOLICITATION Requirement for Consent Requisite Consents Relevant Record Date Expiration Date; Extensions; Amendments Consent Procedures No Revocation of Consents Conditions to the Consents Consequences of Requisite Consents Retail Processing Fee Solicitation Agent and Information and Tabulation Agent Fees and Expenses RELATIONSHIP AMONG THE PARTIES CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS MISCELLANEOUS ANNEX I FORM OF AMENDED INDENTURE... I-1 ANNEX II FORM OF AMENDED PREPAID NATURAL GAS SALES AGREEMENT... II-1 ANNEX III FORM OF AMENDED RECEIVABLES PURCHASE AGREEMENT... III-1 ANNEX IV FORM OF AMENDMENT TO GOLDMAN SACHS GUARANTY... IV-1 Page - iii -

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5 CONSENT SOLICITATION STATEMENT The Southern California Public Power Authority ( SCPPA ) is issuing this Consent Solicitation Statement and an accompanying Consent Form (collectively, the Consent Solicitation ) in order to seek consent to amendments (the Amendments ) to transaction documents that support payment of its Gas Project Revenue Bonds, Series 2007A and 2007B (the Bonds ). SCPPA is a joint powers agency established pursuant to Title 1, Division 7, Chapter 5 of the Government Code, as amended (the Act ), of the State of California (the State ). For SCPPA s contact information, see the back cover. Purpose of Existing Transactions BACKGROUND SCPPA issued the Bonds in 2007 to finance the purchase of a long-term gas supply for five of its members the Cities of Anaheim, Burbank, Colton, Glendale, and Pasadena, California (collectively, the Project Participants ). The terms of the Bonds (and the documents providing for payment of and securing the Bonds) are described in SCPPA s Official Statement dated October 3, 2007, relating to the Bonds (the Official Statement ). All descriptions of the Bonds and such documents herein are qualified in their entirety to more complete descriptions in the Official Statement. See Availability of Information herein. Gas Contracts SCPPA applied proceeds of the Bonds to prepay for a fixed quantity of natural gas to be delivered by J. Aron & Company ( J. Aron ) over approximately 30 years beginning July 1, 2008, under five Prepaid Natural Gas Sales Agreements (the Prepaid Natural Gas Sales Agreements ) between J. Aron and SCPPA, each relating to a separate Project Participant. The payment obligations of J. Aron under the Prepaid Natural Gas Sales Agreements are guaranteed by The Goldman Sachs Group ( GSG ). SCPPA also entered into separate Prepaid Natural Gas Program Gas Supply Agreements (Project 1) (the Gas Supply Contracts ) with each of the Project Participants. Each Gas Supply Contract provides for the sale to the Project Participant, at a discount from monthly index prices payable on a pay-as-you-go basis, of all of the natural gas delivered to SCPPA for such Project Participant over the term of the corresponding Prepaid Natural Gas Sales Agreement. Various termination events are specified in the Prepaid Natural Gas Sales Agreements. Upon the occurrence of certain events, a Prepaid Natural Gas Sales Agreement may be terminated by SCPPA or J. Aron. The Prepaid Natural Gas Sales Agreements will terminate automatically if J. Aron or GSG dissolves, files for bankruptcy, or undertakes certain similar acts. If a Prepaid Natural Gas Sales Agreement is terminated, J. Aron will be required to pay a scheduled termination payment to SCPPA. As currently in effect, the Prepaid Natural Gas Sales Agreements may be terminated by SCPPA if GSG is no longer rated at least BBB- or Baa3 by at least one of Standard & Poor s Ratings Group ( S&P ) or Moody s Investors Service, Inc. ( Moody s ) and J. Aron fails to deliver credit support on demand by SCPPA. Commodity Price Swaps SCPPA entered into a separate natural gas commodity price swap transaction for the gas to be sold to each Project Participant (each an Authority Commodity Swap ) with AIG-FP Broadgate Limited (the current Commodity Swap Counterparty ). Under the transactions, over the term of the Prepaid Natural Gas Sales Agreements, on a monthly net settlement basis, SCPPA must pay a floating price and will receive a fixed price for the quantities of gas to be delivered to SCPPA and sold by it under the applicable Gas Supply Contract. The floating price is equal to the market index used to calculate the price payable by each Project Participant for gas delivered under its Gas Supply Contract. The net payment obligations of the current Commodity Swap Counterparty are guaranteed by the American International Group, Inc. ( AIG ). 1

6 J. Aron entered into a mirror commodity price swap transaction for the gas to be sold to each Project Participant (each a J. Aron Commodity Swap and, together with the Authority Commodity Swaps, the Commodity Swaps ) with the current Commodity Swap Counterparty. J. Aron s net payment obligations to the Commodity Swap Counterparty are guaranteed by GSG. Receivables Purchase Agreement Under a Receivables Purchase Agreement (the Receivables Purchase Agreement ) among the Trustee, J. Aron and SCPPA, if (i) a Prepaid Natural Gas Sales Agreement is terminated early or expires and the funds available to SCPPA and the Trustee are insufficient to pay the redemption price for the Bonds to be redeemed on account of the termination or the maturing principal of and interest on the Bonds, respectively, and (ii) a deficiency exists in certain accounts under the Indenture with respect to the applicable Project Participant, then the Trustee has the right to put to J. Aron, and J. Aron must purchase, subject to certain conditions, sufficient receivables of SCPPA from the Project Participant to enable SCPPA and the Trustee to pay the redemption price or maturing debt service, as applicable. Debt Service and Debt Service Reserve Accounts The Indenture establishes a Debt Service Account and a Debt Service Reserve Account with the Trustee, each comprised of a separate subaccount for each Project Participant. Each subaccount in the Debt Service Reserve Account must be applied upon a failure of the applicable Project Participant to pay amounts due to SCPPA under its Gas Supply Contract. On the date of issuance of the Bonds, SCPPA deposited in each Project Participant subaccount in the Debt Service Reserve Account a Debt Service Reserve Surety Bond ( Surety Bond ) issued by MBIA Insurance Corporation in the amount of the Project Participant s allocable share of the approximately $19 million Debt Service Reserve Requirement. MBIA subsequently assigned its obligations under the Surety Bonds to National Public Finance Guarantee Corp. ( NPFG ). Each subaccount in the Debt Service Account is credited with monthly payments by or for the account of the applicable Project Participant and used to accrue and pay its share of (a) net payments due quarterly on an interest rate swap transaction (the Interest Rate Swap ) entered into by SCPPA with J. Aron (and guaranteed by GSG) to hedge the rate of interest on the index rate Series 2007B Bonds and (b) debt service on the Bonds (semiannually on the fixed rate Series 2007A Bonds and quarterly on the Series 2007B Bonds), net of receipts under the Interest Rate Swap. The balances of the Debt Service Account and a Working Capital Account are presently invested under a collateralized guaranteed investment agreement (the AGL Investment Agreement ) with American Life Insurance Company ( AGL ) until used to make debt service and interest rate swap payments. The balances were originally invested under a contract with AIG Matched Funding Corp. (guaranteed as to payment by American International Group, Inc.), but assigned by it to AGL in 2011 after a downgrade in the rating assigned to American International Group, Inc. resulted in SCPPA s right to terminate and replace the contract unless assigned. Goldman Sachs Guaranty Under a guaranty agreement (the Goldman Sachs Guaranty ), The Goldman Sachs Group, Inc. guaranteed payment by J. Aron of its obligations under the Prepaid Natural Gas Sales Agreements, the Receivables Purchase Agreement, and an interest rate swap agreement (the Interest Rate Swap ) that hedges the rate on interest payable by SCPPA on the Series 2007B Bonds. Subsequent Transaction In October 2009, SCPPA acquired $165,450,000 principal amount of Series 2007B Bonds from J. Aron and tendered to the Trustee for cancelation, and SCPPA, J. Aron, and the Project Participants agreed to reduce the quantities of gas to be delivered under the Prepaid Natural Gas Sales Agreements and Gas Supply Contracts and the notional amounts of the Commodity Swaps and the Interest Rate Swap. SCPPA filed a notice of such transaction with EMMA. See Availability of Information herein. 2

7 PURPOSE OF AMENDMENTS The credit ratings assigned to the Bonds by Moody s and Fitch Ratings ( Fitch ) have declined, and those assigned to the Bonds by S&P have fluctuated (as recently as May 20, 2013, the Bonds were rated BB ), as indicated by ratings reports issued by the three rating agencies. As of the date hereof, the credit ratings assigned to the Bonds by Moody s. S&P, and Fitch are Baa1, A-, and BBB+, respectively. One of the conditions to the Amendments becoming operative is that the Bonds must receive ratings of at least A3, A-, and A- from Moody s, S&P, and Fitch, respectively. The Amendments are intended to mitigate SCPPA s and the bondholders credit exposure to the replacement Commodity Swap Counterparty and NPFG in the event any of three Project Participants (the Cities of Burbank, Colton, and Pasadena, California collectively the Specified Project Participants ) fails to make payments due under its Gas Supply Contract. The Amendments contemplate the following: Novating the Commodity Swaps from the Commodity Swap Counterparty and its guarantor to Mitsubishi UFJ Securities International plc. (the Replacement Commodity Swap Counterparty ); Mitigating SCPPA s credit exposure to the Replacement Commodity Swap Counterparty through (i) a custodial arrangement effected by a Custodial Agreement (the Custodial Agreement ) among the Replacement Commodity Swap Counterparty, J. Aron, the Trustee, and U.S. Bank National Association, as custodian (the Custodian ) in order to administer payments due to and from J. Aron under the J. Aron Commodity Swaps, (ii) certain amendments to the Prepaid Natural Gas Sales Agreements related to commodity swap-based termination events, and (iii) corresponding amendments to the Commodity Swaps; Providing additional credit support in the event a Specified Project Participant fails to make a payment under its Gas Supply Contracts (and NPFG fails to perform on the applicable Surety Bond) by amending the Receivables Purchase Agreement; and Replacing the Debt Service Account portion of the AGL Investment Agreement with an uncollateralized investment agreement (the J. Aron Investment Agreement ) provided by J. Aron (and guaranteed by GSG) at substantially the same interest rate. To secure agreement by J. Aron and GSG to the Amendments, the Prepaid Natural Gas Sales Agreements will also be amended to eliminate Section 17.1(e), which currently provides that, if GSG fails to maintain a credit rating of BBB- or higher by S&P or Baa3 or higher by Moody s, SCPPA may demand that J. Aron post credit support in accordance with the Prepaid Natural Gas Sales Agreements. A failure to post credit support in response to such a demand by SCPPA is a Seller Default (as defined in the Prepaid Natural Gas Sales Agreements), permitting SCPPA to terminate the Gas Supply Agreements and redeem the Bonds with termination payments due from J. Aron. The Amendments would eliminate this Seller Default, removing SCPPA s option to terminate the Prepaid Natural Gas Sales Agreements if GSG s credit rating were to fall below BBB- by S&P or Baa3 by Moody s and J. Aron did not provide eligible credit support on demand. J. Aron informed SCPPA that it accounts for its obligation to deliver natural gas to SCPPA under the Prepaid Natural Gas Sales Agreements at fair value, and that the fair value of this obligation is impacted by many factors, including the likelihood of a termination event. Therefore, to eliminate the need for J. Aron to make a payment or provide collateral upon a downgrade of GSG s ratings below investment grade, J. Aron presented the concept of the Amendments to SCPPA. 3

8 DESCRIPTION OF THE AMENDMENTS The Amendments are proposed as a whole. A consenting bondholder must consent to the Amendments in their entirety or not at all. Amended Receivables Purchase Agreement General. The Receivables Purchase Agreement is to be amended and restated to add certain features. Pursuant to the Receivables Purchase Agreement as amended (the Amended Receivables Purchase Agreement ) and under certain circumstances: J. Aron will agree to purchase from the Trustee receivables owed by Specified Project Participants under their Gas Supply Contracts to the extent funds available in the Trust Estate to cover debt service are insufficient, which debt service deficiency would arise if NPFG failed to pay amounts due under the applicable Surety Bond. J. Aron will agree to purchase from the Trustee receivables owed by Specified Project Participants under their Gas Supply Contracts to the extent funds available in the Trust Estate to pay amounts due to the Replacement Commodity Swap Counterparty are insufficient. J. Aron will not be required to purchase such receivables, however, if the amended Prepaid Natural Gas Sales Agreement applicable to the Specified Project Participant is terminated (or notice of termination thereof is given) prior to the date payment for such receivables is due under the Amended Receivables Purchase Agreement. J. Aron will have the option (but not the obligation) to purchase from the Trustee receivables owed by Project Participants (other than Specified Project Participants) under the Gas Supply Contracts to the extent funds available in the Trust Estate to pay amounts due to the Replacement Commodity Swap Counterparty are insufficient. Purchase Price. The purchase price payable for any receivables sold to J. Aron by the Trustee will be equal to 100% of the face amount of the receivables owed by the relevant Project Participant. Repurchase. The Trustee will have the right under the Amended Receivables Purchase Agreement to repurchase receivables previously sold to J. Aron. Under the amended Indenture, the Trustee is required to make such repurchases to the extent of available funds in accounts allocable to the applicable Project Participant after making all other monthly transfers but prior to making transfers to the General Fund. Interest. SCPPA will pay J. Aron accrued interest on the balance of Put Receivables owed by a Project Participant solely from amounts on account in the General Fund attributable to the Project Participant. Enforcement of Remedies. J. Aron will have the right to pursue payment from a Project Participant and to enforce any remedies available against the Project Participant so long as amounts are owed by such Project Participant under the Amended Receivables Purchase Agreement. A complete copy of the Amended Receivables Purchase Agreement, marked to highlight all changes as a result of the Amendments, is attached hereto as Annex III. It includes Amendments not described in this section. Amended Indenture Prior Amendments. The Indenture has been previously amended by a First Supplemental Indenture, dated as of October 1, 2009 (the First Supplemental Indenture ) between SCPPA and the Trustee. The First Supplemental Indenture was entered into in connection with the transaction described under Background Subsequent Transaction herein. Schedules II and IV of the amended Indenture included in Annex I hereto reflect such transactions. 4

9 Amendments to Accommodate Amended Receivables Purchase Agreement. The Indenture is to be amended as follows (as amended, the Amended Indenture ) in order to accommodate the Amended Receivables Purchase Agreement in the flow of funds under the Indenture (with terms not defined in this Consent Solicitation Statement having the meanings assigned to them in the Amended Indenture): Section 5.04(b) will be moved to Section 5.03(j) and amended to provide that, in the event the amount available in the account and subaccount in the Operating Fund and Working Capital Account attributable to a Specified Project Participant is insufficient to pay any portion of the next succeeding Commodity Swap Payment attributable to the Specified Project Participant, the Trustee will deliver to J. Aron a Put Option Notice. Funds received from J. Aron pursuant to this provision will be deposited in the subaccount for the applicable Specified Project Participant in the Commodity Swaps Operating Account. Section 5.05(b) and Section 5.10 will be amended to provide that, before funds from the Revenue Fund related to a Project Participant are transferred to the account in the General Fund for that Project Participant, such funds must be used first to repurchase any Identified Receivables of the Project Participant from J. Aron and then to pay to J. Aron all RPA Accrued Interest attributable to that Project Participant s Receivables under the Amended Receivables Purchase Agreement. A new Section 5.09(d) will be added to the Indenture to provide that, if NPFG fails to pay any amount due under its Surety Bond related to a Specified Project Participant payment failure, the Trustee will sell Receivables payable by that Specified Project Participant to J. Aron pursuant to the Amended Receivables Purchase Agreement. Other Amendments. The Indenture will also to be amended to insert the following provisions: The lead-in clause of the first sentence in the definition of Qualified Investments will be amended and restated to read as follows: Qualified Investments means any of the following investments, if and to the extent that the same are at the time legal investments of SCPPA s funds and at the time of investment are rated (or are issued or guaranteed by an entity rated), except for (c) below [CDs with banks with the highest short-term ratings], in one of the three highest Rating Categories for long-term investments for each Rating Agency rating the Bonds: Section 2.03 will be amended to provide that SCPPA may not declare an early termination of an Authority Commodity Swap unless either (a) it enters into a replacement Commodity Swap that is effective as of the early termination date or (b) the corresponding Prepaid Natural Gas Sales Agreement will terminate as of the early termination date. SCPPA may not replace a Commodity Swap unless (i) SCPPA receives a Rating Confirmation, (ii) the replacement Commodity Swap is rated at least as highly as the ratings assigned to the Bonds or (iii) the replacement Commodity Swap Counterparty provides such collateral and security arrangements as SCPPA determines to be necessary to avoid a reduction in the ratings assigned to the Bonds. SCPPA will terminate the Authority Commodity Swaps at any time SCPPA or the Trustee has received six consecutive monthly payments from the Custodian instead of directly from the Commodity Swap Counterparty. A new Section 5.03(i) will be added to the Indenture to provide mechanics that effectuate the Call Receivables Offer described under the third bullet under Amended Receivables Purchase Agreement General above. Section 7.11(c) will be amended to include the Amended Receivables Purchase Agreement as an agreement which SCPPA covenants to enforce and perform its obligations under. A new Section 7.19 will be added pursuant to which SCPPA will covenant that it will not consent to any assignment of the Amended Goldman Sachs Guaranty without obtaining a Rating Confirmation. 5

10 Section 7.19 is in addition to, and does not override, any other provision of the Indenture or any other document relating to the replacement of the issuer of the Goldman Sachs Guaranty. Section 8.01 will be amended to provide that acceleration of the Bonds for events of default will require the consent of 100% of the bondholders, other than with respect to a failure to pay debt service as described in Section 8.01(a), (b), or (f) of the Indenture. A complete copy of the Amended Indenture, marked to highlight changes as a result of the Amendments, is attached hereto as Annex I. It includes Amendments not described in this section. Amended Prepaid Natural Gas Sales Agreements Amendments to Remove Termination for Ratings Downgrade. To remove SCPPA s right to terminate the Prepaid Natural Gas Sales Agreements if GSG fails to maintain a credit rating of BBB- or higher by S&P and fails to maintain a rating of Baa3 or higher by Moody s and, in either case, then fails to deliver credit support on demand by SCPPA, the Prepaid Natural Gas Sales Agreements will be amended as follows: Section 17.1(e) will be deleted as a Seller Default. The current Seller Default under Section 17.1(e) of the Prepaid Natural Gas Sales Agreement is as follows: the failure of The Goldman Sachs Group, Inc. to have a credit rating of BBB- or higher by S&P or Baa3 or higher by Moody s, unless, within five (5) Business Days after Buyer s demand related thereto, Seller provides Alternative Credit Support in accordance with the provisions of Exhibit D hereto. Exhibit D, which controls the provision of alternative credit support in the event of a GSG downgrade, will be deleted. Section 17.1(f), which provides a Seller Default if J. Aron has provided but ceases adequately to maintain Alternative Credit Support under Exhibit D, will be deleted. Other Amendments. In connection with the replacement Commodity Swaps and the amendments to the Receivables Purchase Agreement, the Prepaid Natural Gas Sales Agreements will be amended as follows: A new Section 17.2(d) will be added as a Buyer Default to allow J. Aron to terminate a Prepaid Natural Gas Sales Agreement if SCPPA fails to pay amounts due under the related Authority Commodity Swap, notwithstanding any available cure period. The timing of Buyer Non-Default Termination Events and Seller Non-Default Termination Events in Sections 17.3(a) and (b) will be clarified. A new Section 17.3(a)(v) will be added to provide that a payment default by J. Aron under the Amended Receivables Purchase Agreement or the J. Aron Investment Agreement will be a Buyer Non- Default Termination Event, and any termination of the Prepaid Natural Gas Sales Agreements under that section at the election of SCPPA will result in an Additional Termination Payment becoming payable by J. Aron to SCPPA. A new Section 17.3(b)(ix) will be added to allow SCPPA to terminate a Prepaid Natural Gas Sales Agreement if J. Aron does not elect to exercise its call option on applicable Project Participant receivables offered under the Amended Receivables Purchase Agreement. The period of time under which J. Aron and SCPPA may replace Commodity Swaps to avoid the termination of a Prepaid Natural Gas Sales Agreement will be modified to begin upon notice of possible termination of a Commodity Swap and end upon actual termination of a Commodity Swap. J. Aron may elect to extend this swap replacement period up to 45 days in the event a Commodity Swap is terminated due to an insolvency event of the Replacement Commodity Swap Counterparty, 6

11 provided that J. Aron will be responsible for payments that would have become due from the Replacement Commodity Swap Counterparty to SCPPA during such extended period. Section 17.4 will be amended to specify that, if J. Aron designates an early termination of the amended Prepaid Natural Gas Sales Agreement based upon a default by SCPPA under new Section 17.2(d), a conditional early termination date must first be designated at least 45 days after notice, and early termination will only become effective if SCPPA has not cured its payment default by such conditional early termination date. A new Section 17.4(j) will be added to provide for automatic termination upon the occurrence of certain specified non-default termination events resulting from (i) the termination of a Seller Swap that is not replaced during the applicable Swap Replacement Period or (ii) the termination of an Interest Rate Swap. Termination of a Prepaid Natural Gas Sales Agreement will occur automatically upon termination of the related J. Aron Commodity Swap for any reason other than non-payment or a credit support default by J. Aron under the J. Aron Commodity Swap. Section 17.5 will be amended to define the applicable Swap Replacement Periods and to specify that SCPPA will not designate an early termination of the Authority Commodity Swap based on a payment failure by the Replacement Commodity Swap Counterparty until such payment failure has continued for more than 90 consecutive days, so long as during such 90-day period SCPPA is receiving payments due thereunder from the custodian under the Custodial Agreement. A complete copy of the form of Amended Prepaid Natural Gas Sales Agreement, marked to highlight changes as a result of the Amendments, is attached hereto as Annex II. It includes Amendments not described in this section. Custodial Agreement and Amended Commodity Swaps Commodity Swap Amendments. In connection with the replacement of AIG-FP Broadgate Limited as the counterparty to the Authority Commodity Swaps and the corresponding J. Aron Commodity Swaps with the Replacement Commodity Swap Counterparty, SCPPA and J. Aron each will enter into new Authority Commodity Swaps and J. Aron Commodity Swaps, respectively, with the Replacement Commodity Swap Counterparty on terms substantially similar to the original Authority Commodity Swaps and J. Aron Commodity Swaps, but including the following changes. Authority Commodity Swaps: The Authority Commodity Swaps will be amended to clarify that any payment made by the custodian under the Custodial Agreement to SCPPA will not be deemed to cure or remedy the Replacement Commodity Swap Counterparty s failure to make a payment to SCPPA when due under the Authority Commodity Swaps. The existing 45 day cure period related to payment defaults under the Authority Commodity Swaps will be amended so that it applies to only SCPPA s payment defaults, and the cure period related to a payment default by the Replacement Swap Counterparty will be reduced to three business days. The Authority Commodity Swaps will include an optional termination right exercisable by the Replacement Swap Counterparty if SCPPA fails promptly to exercise its right to suspend all gas deliveries under a Gas Supply Contract to any Project Participant that fails to pay when due any amounts owed to SCPPA thereunder. The Authority Commodity Swap will include an event of default related to either party s failure to comply with or perform any agreement or obligation under the Authority Commodity Swap (other than 7

12 payment obligations), provided that the non-defaulting party will be entitled to seek only equitable remedies and will not be entitled to terminate the Authority Commodity Swap as a result of such event of default. Section 5(a)(vi) of the Authority Commodity Swaps, which relates to any payment default by the Replacement Commodity Swap Counterparty or default by the Replacement Commodity Swap Counterparty that results in acceleration of indebtedness under any indebtedness, will be amended to allow for administrative and similar defaults, so long as the Replacement Commodity Swap Counterparty makes the applicable payment within two business days of its receipt of notice of failure to pay. Section 5(a)(viii) of the Authority Commodity Swaps, which relates to a party s participation in a merger or similar business combination where the surviving entity does not assume the obligations under the Authority Commodity Swaps, will be amended to add that it will also be an event of default by SCPPA if it participates in such a business combination and the Trust Estate is no longer available for the satisfaction of such surviving entity's obligations to the Replacement Commodity Swap Counterparty under the Authority Commodity Swap. J. Aron Commodity Swaps: The J. Aron Commodity Swaps will be amended to provide that all payments due under the Authority Commodity Swaps will be made in accordance with the Custodial Agreement. All Commodity Swaps: All Commodity Swaps will be amended to revise the notice period for most events of default and termination events from a maximum of 20 days to a minimum of 45 days. The existing additional termination event in each of the Commodity Swaps related to a termination of any Prepaid Natural Gas Sales Agreement will be amended to provide that the termination of any Prepaid Natural Gas Sales Agreement will result in the automatic termination of both the related Authority Commodity Swap and the related J. Aron Commodity Swap. All Commodity Swaps will include an optional termination event for SCPPA s benefit if the Replacement Commodity Swap Counterparty either ceases to maintain its center of main interest in England or maintains certain establishments outside England. An existing optional termination event in each of the Commodity Swaps (related to the Commodity Swap Counterparty s failure to provide adequate assurances of performance and a rating confirmation following a ratings downgrade of the Commodity Swap Counterparty to below A2 by Moody s or below A by S&P) will be replaced with an optional termination event following a rating downgrade of the Replacement Commodity Swap Counterparty or its parent entity below Baa3 by Moody s or below BBB- by S&P. Custodial Agreement. The Custodial Agreement contains provisions designed to mitigate risks to bondholders resulting from a failure of the Replacement Commodity Swap Counterparty to make payments to SCPPA under the Authority Commodity Swaps. Pursuant to the amendments to the J. Aron Commodity Swaps described below, net payments required to be made by the Replacement Commodity Swap Counterparty or J. Aron under the J. Aron Commodity Swaps will be made to the respective custodial account of such party maintained by the Custodian under the Custodial Agreement. Under the terms of the Custodial Agreement, any net payments required to be made by J. Aron to the Replacement Commodity Swap Counterparty under the J. Aron Commodity Swaps will not be released to the Replacement Commodity Swap Counterparty until the Custodian has confirmation that the amounts payable to SCPPA by the Replacement Commodity Swap Counterparty under the Authority Commodity Swaps for such month have been paid. If the Replacement Commodity Swap Counterparty does not make a required payment under a Authority Commodity Swap and such payment remains unpaid after the expiration 8

13 of any grace period, the Custodian will pay the amount that J. Aron paid under the related J. Aron Commodity Swap to SCPPA for deposit in the Revenue Fund, and that payment will be treated as a Commodity Swap Receipt (as defined in the Amended Indenture). J. Aron Investment Agreement SCPPA and AGL will enter into an amendment with respect to the AGL Investment Agreement to eliminate the investment of the Debt Service Account in exchange for AGL making a payment to SCPPA. AGL will remain obligated on the AGL Investment Agreement for investment of the Working Capital Account. At the same time, SCPPA will enter into an investment agreement with J. Aron for the funds in the Debt Service Account (the J. Aron Investment Agreement ). The J. Aron Investment Agreement will pay the same interest rate on funds deposited in the Debt Service Account as the interest rate the AGL Investment Agreement provided on funds deposited in the Debt Service Account. Amended Goldman Sachs Guaranty The existing Goldman Sachs Guaranty will be amended (as amended, the Amended Goldman Sachs Guaranty ) to reconfirm coverage of J. Aron s payment obligations under the Amended Receivables Purchase Agreement and the Amended Prepaid Natural Gas Sales Agreements as obligations guaranteed by GSG and the waiver by GSG of additional defenses related thereto. Additionally, the Amended Goldman Sachs Guaranty will guaranty J. Aron s obligations under the J. Aron Investment Agreement. The form of the Amendment to the Goldman Sachs Guaranty, marked to highlight changes to Exhibit A to the Goldman Sachs Guaranty, is attached hereto as Annex IV. AVAILABILITY OF INFORMATION SCPPA has filed certain documents with the Electronic Municipal Market Access system ( EMMA ) of the Municipal Securities Rulemaking Board pursuant to the Continuing Disclosure Undertaking of SCPPA, dated October 11, 2007, entered into in connection with the initial offering of the Bonds, including a notice of the 2009 transaction described under Background Subsequent Transaction herein. SCPPA has also filed with EMMA this Consent Solicitation Statement and the Official Statement related to the Bonds, dated October 3, The Official Statement has not been updated since the date of issuance of the Bonds and does not reflect the 2009 transaction. Bondholders may view such filings with EMMA on the internet at No such information is incorporated by reference in or otherwise constitutes a part of the Consent Solicitation Statement. Neither SCPPA nor the Project Participants make any representation as to the accuracy or completeness of any information filed by them with EMMA, or that any such information is indicative of their current or future financial position, or as to the creditworthiness of GSG or any other party described herein. Elimination of Seller Default Trigger RISK FACTORS RELATING TO THE AMENDMENTS The elimination of Section 17.1(e) of the Prepaid Natural Gas Sales Agreements (described above) may have a negative impact on the credit rating of the Bonds if GSG were to be downgraded below investment grade by either S&P or Moody s. While a rating increase on the Bonds to at least A3 from Moody s and A- from Fitch is a condition to the effectiveness of the Amendments, there can be no assurance that such higher ratings may not be reduced or withdrawn in the future, and the future ratings could be reduced below the current credit ratings. Eliminating the Seller Default event tied to GSG s credit rating falling below investment grade could result in bondholders suffering greater losses in the event of a reduction or withdrawal of GSG s credit ratings below investment grade and a subsequent J. Aron payment default or a J. Aron or GSG bankruptcy. 9

14 J. Aron Investment Agreement The amendment of the AGL Investment Agreement to eliminate the Debt Service Account and then entering into the J. Aron Investment Agreement (guaranteed by GSG) has the effect of increasing bondholders credit exposure to J. Aron and GSG at the expense of the current security. Such a change could result in bondholders suffering greater losses in the event of a GSG default or bankruptcy. Replacement Commodity Swap Counterparty Although the Custodial Agreement is intended to divorce the credit of the Replacement Commodity Swap Counterparty from the ratings assigned to the Bonds, a termination of any Commodity Swap due to a default or other credit event on the part of the Replacement Commodity Swap Counterparty could result in early termination of the Prepaid Natural Gas Sales Agreements and mandatory redemption of the Bonds, if the Commodity Swaps are not timely replaced by ones with a substitute Commodity Swap Counterparty. If the Replacement Commodity Swaps are terminated, there can be no assurance that SCPPA and J. Aron will be able to obtain and timely enter into replacement Commodity Swaps. In that event, Termination Payments due from J. Aron, together with amounts scheduled to be on deposit in certain funds and accounts under the Amended Indenture and amounts due to the Trustee under the Amended Receivables Purchase Agreement, have been calculated to provide a sum sufficient to pay the redemption price of the Bonds. However, in that event, then current market conditions may not enable bondholders to replace their investments at or above the yield of the Bonds. Ratings Ratings of GSG. Although the Amendments will not become effective unless the Bonds are assigned minimum credit ratings of A3 by Moody s, A- by S&P and A by Fitch (the ratings currently assigned to obligations of GSG), there is no assurance that, as a result of the Amendments, any such rating on the Bonds will be maintained following the effective date of the Amendments. Following the effective date of the Amendments, the rating analysis of the Bonds may be more heavily reliant on GSG, which could negatively affect the bondholders if GSG s credit were to weaken. Ratings of Other Parties. A change by Moody s, S&P or Fitch in the credit rating of GSG, AGL (as obligor on investments of the Working Capital Account), or a Project Participant other than the Specified Project Participants (i.e., the Cities of Anaheim and Glendale, California) may impact the credit rating of the Bonds in the future. In addition, although the credit ratings of these parties may not change, a change in the methodology or policy of a rating agency could result in a change in credit ratings on the Bonds. Other Relationships J. Aron & Company, Goldman, Sachs & Co. and GSG have and will have multiple roles in the transactions relating to the Bonds, including as gas supplier, underwriter for the initial offering of the Bonds, Interest Rate Swap counterparty, and provider of the Receivables Purchase Agreement, the Custodial Agreement, the J. Aron Investment Agreement, and the Amended Receivables Purchase Agreement. Some of these affiliates stand to benefit if the Consent Solicitation is successful. Further, a ratings upgrade on the Bonds may have a positive impact on the trading prices of the Bonds, of which a subsidiary of GSG held $15,300,000 in principal amount as of July 26, The various relationships described create conflicts of interest between J. Aron and GSG on the one hand and the bondholders on the other. GSG will benefit from the elimination of the Seller Default, and the elimination of this default may adversely affect the bondholders as described under Elimination of Seller Default Trigger above. Although the credit ratings on the Bonds will improve as a condition to the effectiveness of the Amendments, following the effective date of the Amendments such credit ratings will be more heavily reliant on the credit ratings of GSG. 10

15 THE CONSENT SOLICITATION SCPPA is soliciting Consents from bondholders, upon the terms and subject to the conditions set forth in this Consent Solicitation Statement, the accompanying Consent Form, and, except as expressly set forth herein and therein, the Indenture. Pursuant to the Indenture, Consents, once given, may not be revoked. Requirement for Consent SCPPA will not enter into or approve the Amendments unless the holders of a majority in principal amount of the Bonds (excluding Bonds beneficially owned by GSG and affiliates) or their authorized proxies agree that the Amendments are in the best interests of bondholders by executing and returning Consents. Requisite Consents The registered owner of the Bonds The Depository Trust Company ( DTC ) or its authorized proxies must validly deliver Consents in respect of a majority in principal amount of the Bonds outstanding in order to approve the Amendments. As of July 26, 2013, $281,555,000 principal amount of the Series 2007A Bonds and $36,000,000 principal amount of the Series 2007B Bonds were outstanding. The failure of a registered owner or its proxy to deliver a Consent (including any failure resulting from broker non-votes) will have the same effect as if such registered owner or its proxy had voted against the Amendments. Accordingly, proxies may withhold Consents if they wish to vote against the Amendments. As of the July 26, 2013, a subsidiary of GSG owned $15,300,000 in principal amount of the Bonds. GSG has advised SCPPA that it intends to have such affiliate deliver Consents in the same proportion as those delivered by the non-gsg Holders of the Bonds, so as not to impact the direction of the vote. By way of example, if 55% of the non-gsg Holders of the Bonds deliver Consents, GSG will cause 55% of its affiliate-owned Bonds to deliver Consents. Relevant Record Date The Record Date for the purposes of this Consent Solicitation is 5:00 p.m., New York City time, on July 26, Only the DTC Participants holding positions in the Bonds at that time and their duly authorized proxies may give Consents, as described more fully under Consent Procedures below. Expiration Date; Extensions; Amendments The Consent Solicitation will expire at 5:00 p.m., New York City time, on August 23, 2013, unless terminated, shortened or extended by SCPPA. If the Consent Conditions are satisfied prior to the Expiration Date, SCPPA may consider such date of satisfaction as the Expiration Date. SCPPA expressly reserves the right to extend the Consent Solicitation at any time and from time to time by giving oral or written notice to the Solicitation Agent. For purposes of the Consent Solicitation, a notice given by SCPPA before 9:00 a.m., New York City time, on any day shall be deemed to have been made on the preceding day. Any such extension will be followed as promptly as practicable by notice thereof filed with EMMA and sent to the registered owner of the Bonds (DTC). Such announcement or notice may state that SCPPA is extending the Consent Solicitation for a specified period of time or on a daily basis. SCPPA expressly reserves the right for any reason to abandon, terminate or amend the Consent Solicitation, including increasing the Retail Processing Fee described herein, at any time prior to the Expiration Date by giving oral or written notice of such abandonment, termination or amendment to the Solicitation Agent. If the Consent Conditions are amended or the terms of the Consent Solicitation are materially and adversely changed, any Consents received by the Information and Tabulation Agent prior thereto will be voided. Any action by SCPPA to 11

16 abandon, terminate or amend the Consent Solicitation will be followed as promptly as practicable by notice thereof filed with EMMA and delivered to the registered owner of the Bonds (DTC). If the Consent Conditions are not satisfied by four weeks after the Expiration Date, the Consent Solicitation, including the Consents received to such date, will be deemed null and void. Consent Procedures In accordance with its standard procedures, DTC, which is the registered owner of all of the Bonds, will issue omnibus proxies to its Direct Participants to whose securities accounts Bonds are credited as of the Record Date (the Record Participants ), authorizing them to execute Consents for all or a portion of the amount of the Bonds then credited to their respective accounts. Only the Record Participants and their duly authorized proxies may execute and deliver a Consent Form. A beneficial owner of Bonds who is not a Record Participant (e.g., a beneficial owner whose Bonds are registered in the name of a nominee such as a bank or a brokerage firm) must arrange for its Record Participant either (a) to execute a Consent Form and deliver it to the Information and Tabulation Agent on such beneficial owner s behalf (or to such beneficial owner for forwarding to the Information and Tabulation Agent by such beneficial owner) or (b) to forward a duly executed proxy from the Record Participant authorizing the beneficial owner to execute and deliver a Consent Form with respect to the Bonds on behalf of the Record Participant. For purposes of this Consent Solicitation Statement, the Record Participants and their proxies are referred to herein as Holders. HOLDERS OF BONDS WHO WISH TO CONSENT SHOULD MAIL, HAND DELIVER, SEND BY OVERNIGHT COURIER OR FACSIMILE (CONFIRMED BY PHYSICAL DELIVERY) COMPLETED, DATED AND SIGNED CONSENT FORMS TO THE INFORMATION AND TABULATION AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER PAGE HEREOF AND IN THE CONSENT FORM IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH HEREIN AND THEREIN. CONSENT FORMS SHOULD BE DELIVERED TO THE INFORMATION AND TABULATION AGENT, AND NOT TO SCPPA, THE TRUSTEE OR THE SOLICITATION AGENT. HOWEVER, SCPPA RESERVES THE RIGHT TO ACCEPT ANY CONSENT RECEIVED BY SCPPA OR THE TRUSTEE OR THE SOLICITATION AGENT. IN NO EVENT SHOULD A HOLDER DELIVER CERTIFICATES EVIDENCING BONDS. The Bonds may be issued, and therefor consents for the Bonds of any series and maturity may be given, in integral multiples of $5,000. Consents aggregating any other amount for the Bonds of a series and maturity will be counted only in the amount of the next lower integral multiple of $5,000, if any. Any Consent Forms that are properly completed, signed and delivered to the Information and Tabulation Agent by a Holder on or prior to the Expiration Date (unless otherwise extended by SCPPA) will be given effect in accordance with the terms hereof. If a Holder fails to indicate the principal amount of the Bonds for which Consent is being given, but the Consent Form is otherwise properly completed and signed, the Holder will be deemed to have Consented to the Amendments with respect to all the Bonds specified in DTC s or the Record Participant s proxy. Delivery of Consents should be made promptly in order to assure that the Information and Tabulation Agent receives the Consents prior to the Expiration Date. Consents by Holders must be executed in exactly the same name as such Holders names appear in the DTC or Record Participant proxy authorizing it to Consent. If a Consent Form is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the Consent Form appropriate evidence satisfactory to SCPPA and the Trustee of authority to execute the Consent Form. In addition, if a Consent relates to less than the total principal amount of the Bonds specified in such Holder s proxy, the Holder must list the CUSIP numbers and principal amount of the Bonds to which the Consent relates. If proxies are given to owners with different names, separate Consents must be executed covering each. If a Consent Form is executed by a person other than DTC or a Record Participant, it must be accompanied by a proxy duly executed by a Record Participant. Signatures on a Consent Form may be proved by a guarantee of the signature thereon by a bank or trust company, or by the certificate of any notary public or other officer authorized to take acknowledgments of deeds, 12

17 that the Person signing such request or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. Where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association, or partnership, such signature, guarantee, certificate, or affidavit shall also constitute sufficient proof of his, her, or its authority. All questions as to the validity, form, and eligibility (including time of receipt) regarding the Consent procedures will be determined by SCPPA, which determination will be conclusive and binding. SCPPA reserves the right to reject any or all Consents that are not in proper form or the acceptance of which could in the opinion of SCPPA or its counsel be unlawful. SCPPA also reserves the right to waive any defects or irregularities in connection with the deliveries of particular Consents. Unless waived, any defects or irregularities in connection with deliveries of Consents must be cured within such time as SCPPA determines. None of SCPPA, the Project Participants, the Solicitation Agent, the Trustee, or the Information and Tabulation Agent or any other person shall be under any duty to give notification of any such defects or irregularities or waiver, nor shall any of them incur any liability for failure to give such notification. Deliveries of Consents will not be deemed to have been made until any irregularities or defects therein have been cured or waived. SCPPA s interpretations of the terms and conditions of the Consent Solicitation will be conclusive and binding. No Revocation of Consents Any Consent given shall be irrevocable and shall be binding upon the Holder of the Bonds giving such Consent and upon any subsequent registered or beneficial owner of such Bonds and of any Bonds issued in exchange therefor or upon transfer thereof (whether or not such subsequent owner has notice of such Consent). Conditions to the Consents The execution of the Amendment Documents is conditioned on (a) the Requisite Consents being validly delivered prior to the Expiration Date, (b) execution and delivery of every Amendment Document by the other parties thereto, (c) the Bonds receiving ratings of at least A3 from Moody s, A- from S&P and A- from Fitch, (d) the delivery of an opinion of Bond Counsel to the effect described under Certain U.S. Federal Income Tax Considerations herein, and (d) the delivery of opinions regarding the authorization and enforceability of the Amendment Documents. The Amendments will be effected by the Amendment Documents, which will be executed on the Consent Date or soon thereafter, if at all. The Amendments will only become effective upon the satisfaction of each of the Consent Conditions. The Requisite Consents permit, but do not require, SCPPA to give effect to the Amendments by executing and delivering the Amendment Documents. The Consent Solicitation may be abandoned or terminated by SCPPA at any time prior to the Expiration Date, for any reason, in which case Consents will be voided. If the Consent Conditions are amended or the terms of the Consent Solicitation are changed materially and adversely, any Consents therefor received by the Information and Tabulation Agent will be voided. If the Consent Conditions are not satisfied or the Amendment Documents are not executed and delivered by four weeks after the Expiration Date, the Consent Solicitation, including the Consents received to such date, will be deemed null and void. Consequences of Requisite Consents Subject to receipt of the Requisite Consents and satisfaction of the Consent Conditions, the Amendments will be effected by (i) an amendment and restatement of the Indenture, which is to be executed by SCPPA and the Trustee, (ii) an amendment and restatement of the Receivables Purchase Agreement, which is to be executed by the Trustee, SCPPA, and J. Aron, (iii) amendments and restatements of the Prepaid Natural Gas Sales Agreements, which are to be executed by SCPPA and J. Aron, (iv) an amendment to the existing Goldman Sachs Guaranty to include J. Aron s payment obligations under the amended Receivables Purchase Agreement, the amended Prepaid Natural Gas Sales Agreements, and J. Aron Investment Agreement, (v) novation to the Replacement Commodity Swap Counterparty and amendment of each of the Commodity Swaps, which are to be executed by the Commodity 13

18 Swap Counterparty, the Replacement Commodity Swap Counterparty, and, respectively, SCPPA and J. Aron, (vi) execution of the Custodial Agreement, by and among the Replacement Commodity Swap Counterparty, J. Aron, the Trustee, and U.S. Bank National Association, as Custodian, (vii) an amendment of the AGL Investment Agreement, and (viii) the entering into of the J. Aron Investment Agreement. Such agreements are referred to herein as the Amendment Documents. If the Requisite Consents are obtained, the Consent Conditions are satisfied, and the Amendments become effective, they will be binding on all Holders and their transferees, whether or not they have delivered a Consent to the Amendments. Neither SCPPA nor the other parties described herein are obligated to give effect to the Amendments even if Requisite Consents are obtained and the Consent Conditions are satisfied. Retail Processing Fee With respect to any Consent received from or for a beneficial owner of Bonds as of the Record Date with holdings in an aggregate principal amount of $250,000 or less, SCPPA will pay the relevant Retail Processing Dealer, if any, a cash payment equal to $1 per $1,000 principal amount of Bonds for which the Consent is given (the Retail Processing Fee ). Calculations of the Retail Processing Fee will be rounded up to the nearest cent. SCPPA will not be obligated to pay a Retail Processing Fee if the Consent Solicitation is terminated. SCPPA s obligation to pay a Retail Processing Fee is subject to the receipt of the Requisite Consents by SCPPA on or before the Expiration Date and the execution and delivery of the Amendment Documents. If all of the conditions set forth herein have been satisfied, SCPPA will promptly pay the Retail Processing Fees following execution of the Amendments Documents. In order for a Retail Processing Dealer to be eligible to receive the Retail Processing Fee, the Information and Tabulation Agent must receive a properly completed Consent from the Retail Processing Dealer or its customer and a properly completed Notice of Solicited Consents from the Retail Processing Dealer prior to the Expiration Date in accordance with the procedures described herein or in correspondence with the Retail Processing Dealer. SCPPA will, in its sole discretion, determine whether a broker has satisfied the criteria for receiving a Retail Processing Fee (including, without limitation, the submission of the appropriate documentation without defects or irregularities and in respect of bona fide Consents). Other than the foregoing, no fees or commissions have been or will be paid by SCPPA to any broker, dealer or other person in connection with this offer, with the exception of the Solicitation Agent and the Information and Tabulation Agent. A Retail Processing Dealer is a broker that solicited or assisted in arranging a Consent pursuant to the Consent Solicitation and either (1) a broker or dealer in securities and a member of any national securities exchange in the U.S. or the Financial Industry Regulatory Authority (FINRA) or (2) a bank or trust company located in the U.S.. Retail Processing Dealers will include any of such organizations even when its activities in connection with the Consent Solicitation consist solely of forwarding materials to customers and delivering Consents as directed by beneficial owners. Each Retail Processing Dealer must confirm, with each beneficial owner of Bonds for whom it processes Consents, that the owner has received a copy of this Consent Solicitation Statement or, concurrently with such solicitation, provide the owner with a copy of this Consent Solicitation Statement. No Retail Processing Dealer is required to make any recommendation to beneficial owners of Bonds as to whether to Consent. No assumption is made, in making payment to any Retail Processing Dealer, that its activities in connection with the Consent included any activities other than those described in this paragraph. Solicitation Agent and Information and Tabulation Agent SCPPA has retained Wells Fargo Securities, LLC as solicitation agent (the Solicitation Agent ) in connection with the Consent Solicitation. The Solicitation Agent will solicit Consents and will receive a fee for such services and reimbursement for reasonable out-of-pocket expenses. SCPPA has agreed to indemnify the Solicitation Agent against certain liabilities and expenses, including liabilities under the securities laws in connection with the Consent Solicitation. J. Aron has agreed to indemnify SCPPA against certain of the liabilities relating to information about J. Aron and its affiliates and the description of documents for which SCPPA has agreed to indemnify the Solicitation Agent. SCPPA has retained D.F. King & Co., Inc. as information and tabulation agent (the Information and Tabulation Agent ) in connection with the Consent Solicitation. Requests for additional copies of this Consent Solicitation Statement or the Consent Form may be directed to the Information and Tabulation Agent at its address 14

19 and telephone numbers set forth on the back of this Consent Solicitation Statement. The Information and Tabulation Agent will receive a customary fee for such services and reimbursement for reasonable out-of-pocket expenses. SCPPA has agreed to indemnify the Information and Tabulation Agent against certain liabilities and expenses, including liabilities under the securities laws in connection with the Consent Solicitation. The Solicitation Agent and the Information and Tabulation Agent do not assume any responsibility for the accuracy or completeness of the information contained in this Consent Solicitation Statement or any failure by SCPPA to disclose events that may have occurred and may affect the significance or accuracy of such information. Fees and Expenses J. Aron has agreed to provide funds to SCPPA to pay the costs of the Consent Solicitation, including the fees and expenses of the Solicitation Agent, the Trustee, the Information and Tabulation Agent and the financial advisor and legal counsel for SCPPA. J. Aron will also provide funds to SCPPA to pay the Retail Processing Fees and reimburse banks, trust companies, securities dealers, nominees, custodians, and fiduciaries for their reasonable expenses in forwarding Consent Forms and other materials to beneficial owners of the Bonds. From the amendments to the investment agreement with AGL and the Prepaid Natural Gas Sales Agreements with J. Aron, SCPPA anticipates realizing approximately $3.4 million above the cost reimbursement. RELATIONSHIP AMONG THE PARTIES Various affiliates of GSG have roles in the original transactions entered into in connection with the issuance of the Bonds and the Amendments. Some of these affiliates stand to benefit if the Consent Solicitation is successful. The various relationships described below could create conflicts of interest. See Risk Factors Relating to the Amendments Other Relationships for a further discussion of these conflicts. J. Aron & Company, a wholly-owned subsidiary of GSG, is the gas supplier under the Prepaid Natural Gas Sales Agreements. If the Amendments are approved, J. Aron will also be obligated to purchase Identified Receivables under the Amended Receivables Purchase Agreement. The payment obligations of J. Aron under the Prepaid Natural Gas Sales Agreements are unconditionally guaranteed by GSG under the Goldman Sachs Guaranty, and under the Amendments, the Goldman Sachs Guaranty would be amended to include J. Aron s payment obligations under the Amended Receivables Purchase Agreement and the J. Aron Investment Agreement. J. Aron is also the counterparty on the Interest Rate Swap for the term of the Series 2007B Bonds, also guaranteed by GSG. Goldman, Sachs & Co., a wholly owned subsidiary of GSG, was one of the underwriters of the initial offering of the Bonds. As of July 26, 2013, a subsidiary of GSG owned $15,300,000 principal amount of Bonds, which may have a gain in market value if the Bonds receive improved ratings. GSG has advised SCPPA that it intends to have such affiliate deliver Consents in the same proportion as those delivered by the non-gsg Holders of the Bonds, so as to not impact the direction of the vote. As of July 26, 2013, an affiliate of Wells Fargo Securities, LLC held a portion of the Bonds under management on behalf of its clients. While it holds Bonds under management, the affiliate will vote its Bonds independently in the Consent Solicitation. CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS To ensure compliance with Internal Revenue Service Circular 230, bondholders are hereby notified that any discussion of tax matters set forth in this Consent Solicitation Statement was written in connection with the promotion or marketing of the transactions or matters addressed herein and was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding tax-related penalties under federal, state, or local tax law. Each bondholder is encouraged to seek advice based on its particular circumstances from an independent tax advisor. 15

20 Fulbright & Jaworski LLP, Bond Counsel to SCPPA and a member of Norton Rose Fulbright Verein, will deliver its opinion at the time the Amended Indenture is executed that the amendment of the Indenture as described herein will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes and will not constitute a deemed exchange of the Bonds. Accordingly, owners of Bonds will not recognize gain or loss merely as a result of the execution of the Amended Indenture. The opinion of Bond Counsel is based on an analysis of existing laws, regulations, rulings and court decisions. The statutes, regulations, rulings, and court decisions on which such opinion will be based are subject to change, possibly with retroactive effect. Such opinion may be affected by actions taken or omitted or events occurring after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to its attention after the date hereof, and Bond Counsel disclaims any obligation to update its opinion. In rendering the foregoing opinion, Bond Counsel (i) will rely upon representations and certifications of SCPPA, the Project Participants, and J. Aron and (ii) will assume continuing compliance with certain provisions of the Amended Indenture, the Amended Prepaid Natural Gas Sales Agreements, and the Gas Supply Contracts. Bond Counsel s opinion is not a guarantee of result and is not binding on the Internal Revenue Service (the IRS ); rather, such opinion represents Bond Counsel s legal judgment based upon its review of existing law to the extent deemed relevant to render such opinion and the representations and covenants referenced above. Bondholders should note that no rulings have been, or are expected to be, sought from the IRS with respect to any of the United States federal income tax consequences discussed herein, and no assurance can be given that the IRS or a court will not take contrary positions. Except as described above, Bond Counsel will express no other opinion with respect to any other federal, state, or local tax consequences under present law, or proposed legislation, resulting from the Amendments. In particular, Bond Counsel expresses no opinion as to whether interest on the Bonds is excludable from gross income for federal income tax purposes or, except as expressly described herein, as to any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds; and Bond Counsel s opinion does not constitute an affirmation of its opinion with respect to the Bonds delivered on their issuance date. MISCELLANEOUS Some of the statements included in this Consent Solicitation Statement and the documents incorporated by reference may include forward-looking statements within the meaning of federal or state securities laws. These forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this Consent Solicitation Statement and the documents incorporated herein by reference, the words estimates, expects, anticipates, projects, plans, intends, believes, forecasts, or future or conditional verbs, such as should, could or may, and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management s examination of historical operating trends and data, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management s expectations, beliefs, and projections will be achieved. The Consent Solicitation is not being made to, nor will Consent Forms be accepted from or on behalf of, bondholders in any jurisdiction in which the making of the Consent Solicitation or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, SCPPA may in its discretion take such action as it may deem necessary to make the Consent Solicitation in any such jurisdiction and extend the Consent Solicitation to bondholders in such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Consent Solicitation to be made by a licensed broker or dealer, the Consent Solicitation will be deemed to be made on behalf of SCPPA by the Solicitation Agent, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. 16