Planning For The Future Idaho Powers 2006 Integrated Resource Plan

2006 IRP Timeline Idaho Power submits an Integrated Resource Plan to the Idaho and Oregon Commissions every two years 2006 IRP process began in September 2005 Submitted the 2006 IRP to the IPUC on September 29, 2006 Planning period extended from 10 to 20 years Align with the term of PURPA contracts Long lead times required for certain generation resources and transmission projects Begin 2008 IRP process in May 2007 (June 2008 submittal)

IRP Planning Process Forecast Future Needs Develop load, hydrologic and generation forecasts Determine average energy deficiencies (monthly) Determine capacity deficiencies (peak-hour) Determine Pacific Northwest transmission deficiencies (peak- hour)

Forecast Load Growth ( ) Summer peak load growth continues to drive peaking needs Firm summer peak load growth – 80 MW/year (2.1%) Firm winter peak load growth – 50 MW/year (1.6%) Average annual firm load growth – 40 aMW/year (1.9%)

Energy (Average Load) Surplus/Deficiency ( )

Peak-Hour Load (Capacity) Surplus/Deficiency ( )

Monthly Peak-Hour Northwest Transmission Deficiency ( )

IRP Planning Process Determine the Best Way to Meet Future Needs Estimate costs of supply-side resources and demand-side measures Construct numerous portfolios containing both supply-side resources and demand-side measures designed to meet average energy and capacity deficits Determine the total cost of each initial portfolio Select 4 finalist portfolios for further qualitative and quantitative risk analysis Select preferred portfolio

2006 Preferred Portfolio YearResourceMW 2008 Wind (2005 RFP) Geothermal (2006 RFP) Combined Heat & Power Wind Transmission (McNary to Boise) Wyoming Pulverized Coal Regional IGCC Coal Transmission (Lolo to IPC) Combined Heat & Power Geothermal Geothermal INL Nuclear (PPA) 250

Coal-Fired Resource Update Idaho Power and Avista Idaho Power and Avista have executed a MOU to study and analyze the potential for developing one or more coal-fired generation facilities Letters sent to project developers & mine owners on September 27th Initial Data submittals were due October 25th Currently analyzing and screening responses Expect to have initial screening completed 1 st Qtr 2007

Near-Term Commitments Assess level of CHP development and consider issuing RFP (IRP includes 50 MW in 2010) McNary–Boise Transmission Upgrade – Study process initiated, expect to make commitments before filing 2008 IRP (2012 in service date anticipated) Coal-based Resource – evaluation in progress, expect to make commitments to proceed with permitting and pre- construction activities before 2008 IRP is filed (2013 on-line date anticipated)

Closing Thoughts Incorporate flexibility in the IRP to: React to changing markets & regulatory conditions Incorporate PURPA resource development Acquire more or less of a specific resource depending on RFP results