Slide 1 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N BPA Network Open Season 2013 Cluster Study ColumbiaGrid Planning Meeting May 2, 2013

Slide 2 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 2 Objective Provide background and overview of BPA’s Network Open Season (NOS) process to support implementation of the 2013 Cluster Study – What is NOS about? – How has it changed? – How will it be different in 2013? Prepare for discussion of 2013 NOS Cluster Study Assumptions at ColumbiaGrid June Planning Meeting

Slide 3 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 3 What Is BPA’s Network Open Season? Network Open Season (NOS) is a BPA process to manage and respond to long-term firm transmission requests on the BPA network. Network Open Season allows BPA to determine future transmission needs on the network by aligning resource development with projected load forecasts to determine the right transmission solutions for the region. All customers that apply for transmission service on the BPA network (Interties excluded) receive a Precedent Transmission Service Agreement (PTSA). If the customer meets the terms of the PTSA (Customer Agrees to take service if offered at rolled-in rate and provides performance assurance), BPA will Study all requests and determine the requirements for transmission service. Perform required environmental studies and NEPA. Arrange financing, plan, design, and construct required facilities.

Slide 4 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 4 Summary of NOS Participation Listed below is a comparison of the 2010 NOS participation with 2008 and 2009 NOS participation. NOS PTSAs OfferedPTSAs Participating PTSAMWCustomerPTSAMWCustomer , , , , , ,75913

Slide 5 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 5

Slide 6 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 6 NOS Reform Tariff-based cluster study beginning September 2013 – Processed under non-PTSA portion of section (PTP) and 32.6 (NT) of BPA’s current tariff. – Customers will be required to submit data exhibit in accordance with sections 17.2 (PTP) and 29.2 (NT) of the BPA Tariff. – Only TSRs with validated data exhibits will be tendered a cluster study agreement. – Requests for service over the Montana Intertie, Northwest AC Intertie (COI) and Pacific DC Intertie (PDCI) will not be eligible. – Pending requests under an existing 2008, 2009 or 2010 PTSA will not be eligible. – Requests must have a service duration of 5 years or longer Cluster Study financial requirements: – 2013 – Customers advance fund estimated pro rata share of cluster study costs, trued up following study completion Cluster study completion anticipated at the end of December 2013

Slide 7 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 7 Long Term Firm TSR Submittal Period Offer 2013 CSA CSA will be tendered after validation of data exhibits 15 days to sign & fund CSA Cluster Study 4 Months Preliminary plans of service (including BPA- driven builds) Preliminary costs $$ Preliminary energization dates TSR assignment by project Run scenarios & sensitivities (developed in regional collaboration) Project Definition 2-3 Months Refine Plan of Service, Cost Estimate & Schedule. Prepare to initiate NEPA process. Business Evaluation 1-3 Months Projected Rate Impact Estimated Project Cost Potential Service Additional Benefits & Costs Offer PTSA TSR Restack 30 Days Queue is re-evaluated to determine if any offers could be made. Offer ESA OR Prepare for next cluster study Process duration = 12 months Process Map and Timeline Acronym Key: CSA – Cluster Study Agreement NEPA – National Environmental Policy Act PTSA – Precedent Transmission Service Agreement ESA – Environmental Study Agreement Phase I Phase IIPhase III until 5/31 8/1 to 8/31 9/1 to 12/31 6/1 to 7/30 1/1 to 3/30 4/1 to 4/305/1 to 5/31

Slide 8 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 8 Project Groupings w/ PTSAs Study Areas/ Technical Studies Projects, Schedule, & Cost Estimates Updated TTC Plans of Service & Report Verification w/ ATC Base Case Flow Gate Impacts ATC Analysis & Sub-Grid Assessment PTSA Previous NOS Cluster Study Process Authorized External Review

Slide 9 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N & 2009 Cluster Study Assumptions Assumptions BPA made for the 2008 & 2009 Cluster Study: – Generation Assumptions: Generator dispatch patterns (from ATC Base Case) FCRPS and Mid-C generation were backed off – Load Assumptions: Load growth modeled through 2014 COI and PDCI at maximum export capability – Based on the above assumptions, the 2008 Cluster Study was able to balance load and generation to model the new transmission requests. In addition to the above assumptions, in the 2009 NOS customers were required to submit Exhibit B as part of the PTSA requirement. – Customers were required to provide the specific generator tied to the TSR. – Customers were asked to provide non-binding load information related to sink. – Based on the above assumptions, the 2009 Cluster Study was able to balance load and generation to model the new transmission requests.

Slide 10 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Cluster Study Assumptions Studies could not continue to support increased exports on the COI and PDCI along with backing down hydro generation (on the Mid-C and FCRPS). Because of Renewable Portfolio Standard requirements, an increasing number of Load Serving Entities are accumulating transmission contracts which exceed their load – providing them with additional resources with a firm right to dispatch. Existing obligations and new requests for the 2010 Cluster Study added more generation with a firm right to dispatch than there is load and export capability. – Through a public review of the 2010 Cluster Study Assumptions, BPA developed new assumptions including Thermal Generation Dispatch Study Sequence to balance load and generation while accommodating new requests for transmission service. – BPA also included additional sensitivity analysis – Base, 100% Wind, No Wind.

Slide 11 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Cluster Study Generation Scenarios Base Case: 95 th Percentile FCRPS Hydro Gen., 60% Wind Generation in the NW, 100% of the Montana and Northern Intertie requests. – Reduced thermal generation based on thermal generation dispatch study sequence Generation Scenario 1: 95 th Percentile FCRPS Hydro Gen., 100% Wind Generation in the NW, 100% of the Montana and Northern Intertie requests. – Further reduced thermal generation based on thermal generation dispatch study sequence Generation Scenario 2: FCRPS Hydro Gen. High Upper Columbia and Low Lower Columbia, No Wind Generation in the NW, 100% of the Northern Intertie requests. – Increased thermal generation based on thermal generation dispatch study sequence

Slide 12 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 12 Thermal Generation Dispatch Study Sequence Used to Balance Requests for Incremental Transmission Service The Tiers indicate generation groups that, for study purposes will be assumed to be re- dispatched to balance NW area generation and load. The Tier sequence was based on age of the plant, heat rate, and past operation. The sequence within a Tier may change for seasonal power flow studies.

Slide 13 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Cluster Study Assumptions

Slide 14 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Cluster Study Generation Assumptions & Results 2010 Cluster Study Generation Assumptions & Results are posted online at the following URL: s/open_season_2010/2010_nos_fed_gen_ass umptions_ pdf s/open_season_2010/2010_nos_fed_gen_ass umptions_ pdf

Slide 15 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Cluster Study Assumptions Assumptions: Basecases: 2018 (HW & HS); 2022 (HW), 2023 (HS) COI/PDCI: 4800/3100 MW Prior NOS projects assumed to be in service Results of PTSA Reform to be incorporated Assumptions for discussion: Scenarios: Starting point – similar to 2010 NOS (Base, 100% Wind, No Wind) Hydro 95 th percentile MW Application of Thermal Generation Dispatch Study Sequence Wind (Base: 60% of requested) Other regional projects (B2H, CCTP)?

Slide 16 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 16 Next Steps  May 2: ColumbiaGrid Planning Meeting May 15: Deadline for TSRs in pending queue to submit data exhibits. May 31: Post official Cluster Study notice – Deadline to submit TSRs for inclusion in 2013 Cluster Study June 6: ColumbiaGrid Planning Meeting – Review 2013 Cluster Study Basecases and Assumptions June 14: Deadline for TSRs submitted between April 30 and May 31 to submit data exhibits August 1: Long Term Firm Queue Restack September 1: Begin 2013 BPA Network Cluster Study December 31: Conclude 2013 BPA Network Cluster Study

Slide 17 B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 17 Questions?