1. Sixth Northwest Conservation & Electric Power Plan Interim Wholesale Electricity Price and Carbon Dioxide Production Forecasts Maury Galbraith Northwest Power and Conservation Council Portland, OR July 17, 2008

2. 2April 29, 20082 AURORA xmp Electric Market Model Configuration and Inputs 1.18 load-resource zones with transmission 2.Demand forecasts (net conservation) 3.Existing generating resources 4.New generating resource options 5.Natural gas and coal price forecasts 6.CO 2 emission price forecasts 7.State restrictions on new coal-fired generation 8.Resource additions needed to achieve state RPS targets 9.Capacity planning reserve margin targets

3. 3April 29, 20083 AURORA xmp Electric Market Model Modes and Logic 1.Capacity Expansion Mode: Selects optimal mix of resource additions for meeting future demand Planning Period: 2007 – 2031 Simulation: Every 3 rd Hour; M, W, F, Sun; Every 2 nd Week 2.Hourly Dispatch Mode: Determines hourly market-clearing wholesale power prices Planning Period: 2007 – 2026 Simulation: Every Hour; Every Day; Every Week

4. 4April 29, 2008 Revised Natural Gas Prices PNW West

5. 5April 29, 2008 CO 2 Emission Prices

6. 6April 29, 2008 RPS Modeling Summary of StandardAssumed allocation of new acquisitions (Energy basis) AZ IOU sales: Annual increments to 15% by 2025 30% min distributed resources. 31% load-side; 7% biomass; 27% solar; 34% wind BC Renewables will continue to account for 90% of generation 20% biomass; 40% hydro; 40% wind CA IOU sales: 1% min/yr to 20% by 2011 COUs: “recognize legislative intent” 10% biomass; 15% geothermal; 25% solar; 50% wind CO IOU sales: Scheduled increments to 20% by 2020 COU sales: Scheduled increments to 10% by 2020 5% solar; 95% wind MT IOU sales: Scheduled increments to 15% by 201525% biomass; 75% wind NM IOU sales: Scheduled increments to 20% by 2020 COU sales: Scheduled increments to 10% by 2020 15% biomass; 15% geothermal; 20% solar; 50% wind NV IOU sales: Scheduled increments to 20% by 2015 5% min solar; 105% credit for conservation to limit 27% conservation; 36% geothermal; 18% solar; 18% wind OR Large utility sales: Scheduled increments to 25% by 2025. (Medium utilities 10%; small 5% by 2025) 20% biomass; 10% geothermal; 5% solar; 65% wind WA Sales of large utilities (17/~ 84% load): Scheduled increments to 20% by 2020. 20% biomass; 5% hydro; 75% wind

7. 7April 29, 2008 New Resource Overnight Capital Cost Assumptions (2006$/kW) Fifth Power Plan Biennial Assessment High Capital Cost Case Gas turbines (aeroderivative)$680 $840 Gas turbines (frame)$420 $520 Combined-cycle$590 $730 Pulverized coal-steam$1,450 $1,900 Integrated gasification combined-cycle (without CS) $1,620$1,750$2,100 Integrated gasification combined-cycle (with 90% CS) $2,090$2,300$2,700 Solar photovoltaics$4,920$3,288$5,820 Wind power$910$1,500$1,650

8. 8April 29, 20088 Interim Base Case WECC Resource Expansion 2007-26

9. 9April 29, 20089 Interim High Capital Cost Case WECC Resource Expansion 2007-26

10. 10April 29, 200810 Interim High Capital Cost Case PNW Resource Expansion 2007-26

11. 11April 29, 2008 Base Case Price Comparisons Mid-C Annual Average Prices $30 $35 $40 $45 $50 $55 $60 $65 2007201220172022 2006$/MWh 5th Plan Final Biennial Assessment Draft Interim Base Case Final Interim Base Case Interim High Capital Cost Case

12. 12April 29, 2008 Sensitivity Case Price Comparisons Mid-C Annual Average Prices $30 $35 $40 $45 $50 $55 $60 $65 2007201220172022 2006$/MWh Interim Base Case Interim High Capital Cost Case Interim High CO2 Price Case High Capital Cost/High CO2 Price Case Interim High Fuel Price Case Interim No Incremental RPS Case

13. 13April 29, 200813 Impact of Incremental RPS Resource Additions on NW Wholesale Power Market Price (e.g., Interim High Capital Cost Case: Jan. 15, 2020 HE 7:00 P.M.)

14. 14April 29, 2008 Sensitivity Case CO 2 Production WECC Annual Emissions

15. 15April 29, 2008 Sensitivity Case CO 2 Production NW Annual Emissions

16. 16April 29, 200816 Impact of High CO 2 Prices on NW Supply (e.g., Interim High Capital Cost Case: Jan. 15, 2020 HE 7:00 P.M.)

17. 17April 29, 2008 Interim Wholesale Power Price Forecast Paper http://www.nwcouncil.org/library/2008/2008-05.htm

18. 18April 29, 200818 Interim High Capital Cost Case WECC Resource Mix 2007-26

19. 19April 29, 200819 Interim High Capital Cost Case PNW Resource Mix 2007-26

20. 20April 29, 200820 High Capital Cost/High CO 2 Price Case WECC Resource Expansion 2007-26

21. 21April 29, 200821 High Capital Cost/High CO 2 Price Case PNW Resource Expansion 2007-26

22. 22April 29, 200822 AURORA xmp Electric Market Model NW Council uses 18 load-resource zones