1. Long-term Fuel Price Forecasts for the Sixth Power Plan Northwest Power & Conservation Council Generating Resources Advisory Committee August 21, 2008

2. NPCC long-term fuel price forecasts Determine a range of plausible long-term trends in natural gas, world oil and western coal prices Commodity cycles around the trend and short-term volatility are simulated in the Portfolio Model analysis Fuel prices affect resource selection, generation cost, and price of electricity Retail prices affect demand for fuels and electricity (directly through competition, indirectly through cost of generation) Delivered prices for residential, commercial, industrial and electric generation are estimated for the AURORA, GENESYS, Energy 2020 and Portfolio Risk model Seasonality is estimated where significant

3. NPCC Fuel price forecast history Fifth Power Plan (Summer 2004) Revised Council Forecast (Sep. 2007) Revisions proposed to the Natural Gas Advisory Committee (Aug. 2008) Draft for Sixth Power Plan (Oct. 2008)

5. Natural Gas

8. Working wellhead natural gas price forecast (2006 $ Per MMBtu at wellhead)

11. Delivery costs to AURORA LRAs Delivery PointsCosts in 2008 Sumas to Western OR/WA$.63 AECO to Eastern OR/WA$.59 Rockies to Southern ID$.62 AECO to Eastern MT$.77

12. World Oil Prices

14. Working Crude Oil Price Forecasts (Imported RAQ in 2006 $ / Bbl.)

16. Coal Prices

17. Source: EIA Recent spot coal prices April 05 To April 08

18. 6 th Plan working forecast

19. Working coal price forecast (Powder River in 2000$/ MMBtu)

21. At its August 15 meeting, the NGAC... generally agreed with the proposed medium oil price forecast (about $80 in the long-run) recommended use of a wider range of oil prices - well above $100 in the high; below $40 in the low (see poll results) generally agreed on a somewhat higher medium long-term gas price (about $8), based on a 10:1 oil:gas price parity recommended against a fixed oil:gas price parity across the cases (see chart of history) generally agreed the spread of gas prices be increased on the high side, but not to exceed $12. Disagreement regarding low (arguments ranged between $4 to $6).

22. The NGAC poll of long-term world oil price $125 & higher $40 & lower

24. Where to from here Digest NGAC and other comments Proposed revisions for draft 6 th Plan to Power Committee in October Incorporate into planning models by December for use in 6 th Plan analyses