1. Sixth Northwest Conservation & Electric Power Plan Proposed Wind Plant Capital Cost Assumption Jeff King Northwest Power and Conservation Council Portland, OR August 21, 2008

2. 2 Wind resource cost elements Capital cost Wind plant development and construction cost (uniform) Transmission development and construction cost (WRA-specific) Operating costs Fixed wind plant operation and maintenance (uniform) Fixed transmission operation and maintenance (WRA-specific) Variable wind plant operation and maintenance (uniform) Variable transmission operation and maintenance (WRA-specific) System integration costs Regulation & load following Storage & shaping

3. August 21, 2008 3 Windpower Cost Assumptions (2006 dollar values) 5 th Plan (2004) Biennial Report (2006) Preliminary 6 th Plan (Q1 2008) Proposed 6 th Plan Overnight wind plant development and construction cost ($/kW) $1170$1500$1650$1950 Transmission ($/kW/yr)$23Unchanged$20To be addressed at later GRAC Fixed O&M ($/kW/yr)$23$30$22 To be addressed at later GRAC Learning effects on real fixed costs (20 yr average) -2%/yrNone in near- term See following slide To be revisited at later GRAC Variable O&M ($/MWh)$1.16$1.50$1 To be addressed at later GRAC Regulation & Load- following ($/MWh) $5.20 - 11.20Unchanged$5.10 - 10.90Initial discussion to follow

4. August 21, 2008 4 Preliminary thinking on forecast construction cost escalation (to be revisited at later GRAC) Escalation continues at declining rate through 2009; levels off 2010 - 11 Real costs decline to ~ 130% of 2004 values 2012 - 15 Recent cost escalation 2015 > Resumption of historical real cost reduction

5. August 21, 2008 5 Normalizing reported plant costs NPCC database contains reported plant costs (estimates or completion costs) for 36 WECC projects totalling 4450 MW. 2001- present Reported costs were normalized to "overnight" 2006 dollar values Unless otherwise stated, reported costs are assumed to be construction costs less project development cost and financing fees. The cost vintage is assumed to be the year reported or, for completion costs, the beginning of 12 mo construction period (one year prior to service year) Overnight (instantaneous) construction cost were backcast using appropriate financing (COU, IOU, IPP) with the Council's MICROFIN model. Project development cost of 1.3% of total capital cost was added to the estimate Capacity-correlation: Slight (12%) negative correlation of cost to project capacity was observed Capacity-weighting was approximated by rounding to nearest 100 MW and plotting each 100 MW multiples separately.

6. August 21, 2008 6 Normalized utility-scale wind project cost Proposed 6 th Plan draft: $1950/kW "Overnight", 2006$, 2009 service 5 th Plan Biennial Assessment Prelim 6 th Plan

7. August 21, 2008 7 Other recent surveys and estimates CECComparative Costs of California Central Station Electricity Generation Technologies Jun 07$1900"Instant" cost, 2006$ EPRIEngineering & Economic Evaluation of Renewable Energy Technology Jun 07$2039100 MW Total plant (overnight) cost, Dec 06 $ LBLAnnual Report on U.S. Windpower Installation, Cost and Performance Trends: 2006 May 07$1480 (range $1150 - 2240) Reported costs, 16 U.S. projects, 1326 MW LBLAnnual Report on U.S. Windpower Installation, Cost and Performance Trends: 2007 May 08$1710 (range $1240 - 2600) Reported costs, 16 U. S. projects, 7600 MW ($1660 in 2006$) USDOE20% Wind Energy by 2030May 08$16502006$, overnight (Black & Veatch) Windpower Monthly Annual power cost comparisonJan 07€1175 ($1490 @ 1.27) Reported costs, 40 global projects, 3400 MW Windpower Monthly Annual power cost comparisonJan 08€1300 ($1755 @ 1.35; range $1439 - 2068) Reported costs, 40 global projects, 3000 MW

8. August 21, 2008 8 Comparison to other surveys & estimates WM LBL DOE WM LBL EPRI CEC Prop. Dft 6 th Pln