Local Area Planning Update to TRANSAC – September 15, 2016 20pt Font – bold for presentation name, regular for date Local Area Planning Update to TRANSAC – September 15, 2016

Base Case Status Base case study models representing the near-term scenarios have been completed: 2016 Heavy Summer (Summer Peak) 2016-17 Heavy Winter (Winter Peak) 2017 Light Spring (Off-peak) Future scenario cases over the 15 year planning horizon will be completed shortly Summer Peak: 2021 HS, 2026 HS, 2031 HS Winter Peak: 2021-22 HW, 2026-27 HW, 2031-32 HW Off-Peak: 2021 LSP 10 total scenario base cases will be developed. Title, 24pt font, bold, white Body Copy/Bulleted Text, 22pt font, black (adjust as necessary)

Base Case Status Existing system configuration has been modeled in near-term base cases (2016-17). Projects under construction, as well as budgeted and approved system improvements are included in the future scenarios. All peak scenario cases were based on a 1-in-10 load forecast. All off-peak scenario cases represent 65% of peak load. Title, 24pt font, bold, white Body Copy/Bulleted Text, 22pt font, black (adjust as necessary)

Contingencies List Near-term Scenario Events Studied – single point of failure: P0 – System normal P1 – Single segment or element outage Generators Transmission Lines Transformers Capacitors and Reactors P2 – Bus Faults and Breaker Failure

Contingencies List Future Scenario Events to be studied (Steady-State): P0 – System normal P1 – Single segment or element outage Generators Transmission Lines Transformers Capacitors and Reactors P2 – Bus Faults and Breaker Failure P3 – Loss of a Generator followed by: Loss of a Transmission Line Loss of a Transformer P6 – Loss of a Transmission Line followed by: P7 – Loss of two Transmission Lines on a common structure

Study Criteria System normal and contingencies were modeled and studied for adequacy and system security. System protection and automatic system adjustments were simulated: Normal Fault Clearing Generator Automatic Voltage Regulation (AVR) Thermal Protection Capacitor and Reactor Switching LTC adjustments Special Protection Schemes

Study Criteria Transmission Line and Transformer thermal loading: Loading >85% were noted Loading above 100% were noted as overloads Winter ratings were applied allowing lines and transformers up to 125% continuous load. Voltages outside of NWE planning criteria were noted: Voltage deviation >8% for P1 contingencies – Per WECC-100 Criteria Low voltage: <90% to 95% depending on nominal voltage and contingency - Per FERC Form 715 Criteria. High voltage: >105% - Per FERC Form 715 Criteria. Non-load serving bus voltages may fall above or below criteria if conditions allow a higher/lower voltage without harm to NWE or customer equipment. Certain equipment ratings may dictate different limits.

State of the System Studies System Normal and Contingencies have been simulated on all near-term scenarios to determine the “State-of-the-System” as it exists today. P0, P1, and P2 study results have been analyzed. These contingencies represent a single point of failure. P3 and P6 contingencies were not studied. Similar studies are completed as NWE conducts outage studies for routine maintenance work or loss of a P1/P2 system element. Any “State-of-the-System” issues regarding these N-1-1 events would be observed by Peak RC, and real-time mitigation orders would be issued. Study results show previously known issues have been resolved from recently completed mitigation. Newly studied P23 and P24 contingencies (Breaker Failure) indicated additional system problems not identified in previous study cycles.

State of the System Studies Near-Term Study Results – P0 Events (System Normal) Thermal Loading: Only Generator Step-up Transformers had loading over 85% No overloads observed Voltage Issues: No low voltage issues observed Minor high voltage observed Off-peak loading in the Big Timber 50 kV Area

State of the System Studies Summary Results for Near-term Scenario P1 Events: Peak conditions govern for low voltage and thermal violations on most contingency scenarios. High voltage was observed under light load conditions. Almost all higher voltage bulk system segments and elements meet criteria under all contingency scenarios (500, 230, and 161 kV). Loss of such elements may increase loading on underlying system such as autotransformers and lower voltage lines, or produce low voltage problems.

P1 Event – Thermal Violations State of the System Studies P1 Event – Thermal Violations Loss of multiple 100 kV facilities in the Columbus area Causes system overloads and/or low voltages on the 50 kV system in the Stillwater area. Loss of the Columbus to Stillwater 100 kV and 50 kV load. Both peak and off-peak scenarios. Mitigation in-progress. New 230/100 kV transformers installed in 2015. New 100 kV line construction started in 2016, to be completed 2017. Loss of the Great Falls Swyd to MT Refining 100 kV line Causes cascading overloads on the Great Falls 100 kV system. Loss of Great Falls area 100 kV load. Noted in the 5-year scenario in the 2014-15 planning cycle. Peak summer scenario. Preliminary mitigation plan in-place.

P1 Event – Thermal Violations State of the System Studies P1 Event – Thermal Violations Loss of Glengarry 100/50 kV autotransformer. Peak winter scenario. Removes two additional 100 kV lines for normal clearing. Causes multiple 50 kV overloads between Stanford and Harlowton. Loss of the 50 kV load in the Stanford, Lewistown, Judith Gap areas. Loss of Steamplant 230/100 kV autotransformer – Bank #2 Peak Scenario Removes two additional 230 kV lines for normal clearing Causes an overload on the Broadview to Alkali Creek 230 kV line Does not trip per PRC-023 requirements. 30-minute emergency summer rating established in 2016, allows time to isolate transformer and restore other lost 230 kV facilities to alleviate overload

P1 Event – Thermal Violations State of the System Studies P1 Event – Thermal Violations Clyde Park 161/50 kV autotransformer Peak and off peak scenarios Removes three additional 161 kV lines and all 50 kV facilities for normal clearing. Causes overloads on Big Timber area 50 kV facilities. Loss of the 50 kV and 69 kV load in the Big Timber and Livingston areas. Mitigation plans underway. Loss of either E. Gallatin 161/50 kV autotransformers. Peak scenarios Causes cascading overloads on the Bozeman 50 kV system. Loss of the 50 kV load in Bozeman and Belgrade areas. Mitigation plan in-place.

P1 Event – Thermal Violations State of the System Studies P1 Event – Thermal Violations Loss of either Missoula #4 100/69 kV autotransformers. Peak winter scenario Removes all Missoula #4 100 kV and 69 kV facilities for normal clearing. Causes cascading overloads on the 69 kV system near Hamilton. Loss of the 69 kV load between Missoula and Hamilton.

P1 Event – Voltage Violations – High Voltage State of the System Studies P1 Event – Voltage Violations – High Voltage Loss of Drummond area 100 kV lines Off-peak scenario Minor high voltage on the Drummond-Anaconda 50 kV system Loss of Two Dot area 100 kV lines Winter peak and off-peak scenarios Minor high voltage on the Martinsdale area 100 kV system Loss of Hardin to Crossover 230 kV line Minor high voltage on the Hardin 69 kV system

P1 Event – Voltage Violations – Low Voltage State of the System Studies P1 Event – Voltage Violations – Low Voltage Loss of Dillon-Salmon to Ennis Auto 161 kV line Summer Peak Scenario: voltages well below 90% on the 69 kV between Dillon and Sheridan Winter Peak Scenario: voltages just below criteria Loss of Columbus-Rapelje to Lower Duck Creek 161 kV line Summer peak scenario Minor low voltage in the Big Timber area Loss of Judith Gap 230/100 kV Autotransformer Peak scenarios Removes three additional 100 kV lines for normal clearing Widespread low voltage near 90% on the Stanford, Lewistown, Harlowton 100 kV and 50 kV systems

P1 Event – Voltage Violations – Low Voltage State of the System Studies P1 Event – Voltage Violations – Low Voltage Loss of Assiniboine to Havre City 69 kV line Summer peak scenario Minor low voltage just below criteria near Chinook Loss of either Broadview 230/100 kV autotransformers Peak scenarios Low voltage below 90% on the Roundup 69 kV and 50 kV systems

State of the System Studies Summary Results for Near-term Scenario P2 Events: Peak conditions mostly govern for low voltage and thermal violations on most contingency scenarios. High voltage and minimal thermal violations are mostly observed under light load conditions. Events with high or low voltage only violations (no thermal violations) observed are mostly consistent with P1 Events. Many problematic bus fault events similar to P13 – Loss of a Transformer events. Breaker failure events very similar to bus fault events. Bus tie breaker failure most problematic breaker failure events.

P2 Event – Thermal Violations State of the System Studies P2 Event – Thermal Violations Laurel Auto 100 kV South Bus Fault Causes system overloads and low voltages on the 50 kV system in the Red Lodge area. Opens four 100 kV lines including both 100 kV lines to Bridger Auto Loss of the Red Lodge and Bridger area 50 kV load. Peak scenarios. Preliminary mitigation plan in-place Steamplant PCB 230-111 or 230-112 Bus Tie Breakers Peak scenarios Complete loss of the Steamplant 230 kV bus. Causes cascading overloads in the Billings/Laurel area. Loss of the 100 kV load in Billings/Laurel area. Mitigation plan in-place.

P2 Event – Thermal Violations State of the System Studies P2 Event – Thermal Violations Steamplant PCB 230-008 Summer peak scenario Opens two local 230 kV lines, one local 230/100 kV autotransformer, and one remote 230/161 kV autotransformer Causes cascading overloads in the Billings/Laurel area. Loss of the 100 kV load in Billings/Laurel area. Mitigation plan in-place. Colstrip PCB 230-013 Bus Tie Breaker Both peak and off-peak scenarios Opens one 500/230 kV autotransformer and one 230 kV line. Causes an overload on the remaining 500/230 kV autotransformer within emergency ratings. Requires curtailment of Colstrip Generation to relieve overload

P2 Event – Thermal Violations State of the System Studies P2 Event – Thermal Violations Alkali Creek PCB 230-029 or 230-031 Summer peak scenario Opens two of three 230 kV lines and both 230/161 kV autotransformers Causes an overload on both Steamplant 230/100 kV autotransformer within emergency ratings. Mitigation plan in-place. Great Falls PCB 230-025 Bus Tie Breaker Off-peak scenario Opens two critical South of Great Falls 230 kV lines. Causes multiple 100 kV overloads from Great Falls to: Harlowton Helena Drummond Butte Three Rivers

P2 Event – Thermal Violations State of the System Studies P2 Event – Thermal Violations Great Falls Switchyard PCB 100-321 Peak scenarios. Opens two critical 100 kV lines out of the Great Falls Switchyard Causes multiple/cascading overloads on the 100 kV system in Great Falls. Loss of the Great Falls City 100 kV load. Preliminary mitigation plan in-place. Great Falls Switchyard PCB 100-323 or PCB 100-326 Off-peak scenario. Opens two of three 100 kV lines between the Great Falls and Crooked Falls switchyards. Causes cascading overloads out of the Crooked Falls Switchyard. Loss of the Crooked Falls Switchyard and over 200 MW of hydro generation.

P2 Event – Thermal Violations State of the System Studies P2 Event – Thermal Violations Missoula #4 PCB 160-097 Bus Tie Breaker Peak and off-peak scenarios. Complete loss of the Missoula #4 161 kV bus. Causes complete loss of the Bitterroot 69 kV system. Peak scenarios. Missoula #4 PCB 100-131 Complete loss of the Missoula #4 69 kV, 100 kV, and 161 kV West buses leaving a single 161 kV line from Bonner to Hamilton Heights. Causes cascading overloads and/or low-voltage on the Bitterroot 69 kV system. Loss of the Bitterroot 69 kV system.

P2 Event – Voltage Violations – Low Voltage State of the System Studies P2 Event – Voltage Violations – Low Voltage Mill Creek 100 kV Bus Fault Peak scenarios Low voltage well below 90% along the Drummond – Anaconda 50 kV line Harlowton 100 kV Bus Fault Low voltage well below 90% along the Harlowton – Glengarry 50 kV line Judith Gap 100 kV Bus Fault Widespread low voltage near 90% on the Stanford, Lewistown, Harlowton 100 kV and 50 kV systems

Additional progress and next steps Complete the analysis of future scenarios. Verification of new problems Prioritize problems using Decision Rules. Begin or continue Mitigation Studies.

Questions? Text, 60pt font, white

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