1. Pacific Northwest Resource Adequacy Assessment for 2011 and 2013 Resource Adequacy Forum Steering Committee Meeting July 21, 2008

2. July 21, 2008 2 Assumptions Adequacy Assessment Recap Changes from last year Comparison to other reports

3. July 21, 2008 3 Current Capacity Assumptions Out-of-region market 3,000 MW maximum in winter None available in summer Non-firm hydro 2,000 MW in winter 1,000 MW in summer Uncommitted IPPs Full availability in winter 1,000 MW maximum in summer Wind 5 percent over the sustained peak period

4. July 21, 2008 4 Current Energy Assumptions Out-of-region market About 200 MWa per year Non-firm hydro About 1,100 MWa per year Uncommitted IPPs Dispatched as regional resources limited by capacity assumptions Wind 30 percent of nameplate annually

5. July 21, 2008 5 Metrics Annual Needs load/resource balanceAnnual Needs – Annual average generating capability minus annual average load, referred to as the annual load/resource balance (in MWa) Hourly Needs reserve marginHourly Needs – Surplus hourly generating capability over expected sustained peak hourly load, referred to as the reserve margin (in percent)

6. July 21, 2008 6 Thresholds Energy – Load/resource balanceEnergy – Load/resource balance Physical = 0 MWa Economic = approx. 3,000 MWa Capacity – Reserve marginCapacity – Reserve margin Physical Winter = 23% Physical Summer = 24% Economic = ?

7. July 21, 2008 7 Adequacy Assessment ( As reported in May 2008) Capacity20112013PhysEcon Winter38%31%23%? Summer31%26%24%? Energy20112013PhysEcon L/R Bal2,6001,9000~3000

8. July 21, 2008 8 Implementation Plan 3 Years Out > Econ Phys < Phys > Econ 5 Years Out Phys < Phys

9. July 21, 2008 9 Implementation Actions Green Green Proceed with normal planning activities Compare results with other regional reports Yellow Yellow Regional report Forum review of data and assumptions Red Red Regional conference Regional review of data and assumptions Identify inadequate utilities

10. July 21, 2008 10 Adequacy Assessment - Energy L/R Bal (MWa)20112013Min Last Year’s4,1004,0000 This Year’s2,6001,9000 Difference-1,500-2,100

11. July 21, 2008 11 Adequacy Assessment- Capacity May 2008 result recalculated for a 50-hour sustained peak period (MW)2013GapMin ’07 Win36%11%25% ’07 Sum36%11%19% ’08 Win36%11%25% ’08 Sum27%8%19%

12. July 21, 2008 12 Adequacy Assessment- Capacity May 2008 results recalculated using an 18-hour period for both loads and hydro (MW)2013GapMin ’07 Win36%11%25% ’07 Sum36%11%19% ’08 Win31%8%23% ’08 Sum30%6%24%

13. July 21, 2008 13 Resource and Load Assumptions for 2013 Summary20072008Diff Net Demand21672236251953 Net Resources2563925504-135 L/R Balance39671879-2088 Demand Non-DSI21266226431376 DSI297818521 Coulee Pumping117 0 Total21681235781897 Resources Critical Hydro1167211943271 Non-Hydro Firm993810090152 PNW Uncontracted25282171-357 Planning Adjustment15001300-200 Firm Contracts Exports780904124 Imports78885768

14. July 21, 2008 14 Load Differences for 2011

15. July 21, 2008 15 Reasons for the Difference Increases in projected Demand in 2010 Increases in projected Demand in 2010 Non-DSI load increased by 900 MWa DSI loads increased by 400 MWa Reason for increase in loads: Reason for increase in loads: Short-term model projected very low growth ~0.7% Long-term model projected higher, 1.4%, load growth more inline with what has been experienced. We calibrated the short-term model to long-term model. Added new loads from Data centers not reflected in the short-term model.

16. July 21, 2008 16 Load/Resource Balance (2011) ForumNRFBPA Load*22,88222,60922,594 Resources25,46620,06224,372 L/R Bal2,584-2,5471,778 Minus IPP2,171 Minus Non-firm1,300 Avail - Exp (approx)1,600 L/R Bal-2,487 *Load includes firm exports minus firm imports.

17. July 21, 2008 17 Principal PNW plants constructed or acquired (wholly or partially) for merchant sales PlantTypeCapacityServiceCapsule history Big HanafordGas CC2482002Built as merchant plant. Boardman Coal steam 5851980 Utility-constructed. 15% share currently owned by General Electric Credit Corp and contracted to SDGE; 10% PNGC share contracted to Turlock Irrigation District. Centralia 1 & 2 Coal steam 2 x 670 1972/7 3 Utility-constructed; purchased by TransAlta as merchant facility in 2000. 100 MW contract w/PGE thru 2015. ChehalisGas CC5202003Built as merchant plant; PacifiCorp acquisition announced 2008 Colstrip 4 Coal steam 7401986 Built as utility plant, 30% MPC share now unregulated NWE asset w/90 MW contracted to NWE thru 2018, 21 MW thru Jul 2014 Coyote Springs 2Gas CC2642003 Conceived as utility plant, built as merchant, subsequently acquired by Avista. Grays HarborGas CC6502008 Construction as merchant facility suspended in 2002; resumed 2007 for 2008 completion. Hardin Coal steam 1092006 Built as merchant; output contracted to Powerex for unannounced market & contract sales Hermiston PowerGas CC5302002Built as merchant plant. Klamath Cogeneration Gas CC4802001 Built by Klamath Falls w/output contracted to PPM Energy for mkt & contract sales. Acquired by PPM Energy (Iberdrola) Dec 2007. Klamath Peakers Gas peaker 1002002Built as merchant plant. LancasterGas CC2782001 Built as merchant plant, scheduled conversion to regulated asset by Avista by Jan 2010 Mint FarmGas CC3192008 Construction as merchant facility suspended in 2002; resumed 2007 for 2008 completion. Morrow PowerGas peaker 252001Built as merchant plant.

18. July 21, 2008 18 Power from plants constructed or acquired for merchant sales (ca. 2011 in all cases) Power from plants constructed or acquired for merchant sales (ca. 2011 in all cases) Increasing utility ownership Completion of suspended projects