1. Northwest Power and Conservation Council Oversupply Issue and Challenges Ken Dragoon August 31, 2011

2. Northwest Power and Conservation Council Issue Definition 2 Minimum generation levels on the Northwest power system can at times exceed the ability to market the power. Negative market prices are an indicator of market saturation. Limiting factors acting to contribute to minimum generation requirements include: Total Dissolved Gas (TDG) caps on the hydro system, limit hydro system ability to spill energy. Costs incurred by thermal units associated with displacement. Cogeneration facilities. Increasing levels of low, or negative, variable cost resources– principally wind generation. Factors affecting power marketability: Load growth rates and depressed economy. Transmission limits and outages.

3. Northwest Power and Conservation Council Challenges 3 Events are relatively infrequent, likely lasting days or weeks, and mainly during light load hours. Not likely to occur every year. Very limited amounts of energy on average annual basis. Spring 2011 event was on the order of 100,000 MWh in a relatively extreme runoff year. Although energy content may be modest, the power intensity can be very high– in the range of thousands of megawatts.

4. Northwest Power and Conservation Council Solution Set Implications 4 Stand-alone solutions cannot be heavily capital intensive, despite the high power intensity of events. –Cost of load banks is likely end point for comparisons at ~$20-40/kW. Solutions likely to involve pairings with other uses or objectives to cost share with other purposes.

5. Northwest Power and Conservation Council 5 Proposed Timeline Establish Technical Oversight Committee (TOC)July 2011 TOC Brainstorming meetingJuly 2011 Categorize proposed solutionsJuly 2011 Establish category workgroupsAugust 2011 Category workgroup meetingsAugust - October 2011 Workgroup Report to TOCNovember 2011 TOC recommendations for in-depth analysisNovember 2011 Analysis of Proposed Solutions (by subgroups/contractors)December 2011 - June 2012 Reports to TOCJune 2012 TOC Summary Report to Wind Integration Forum Steering Committee August 2012