NWPP MC Initiative WECC Update March 25th, 2015 Kathy Anderson Idaho Power

NWPP Market Coordination Members Avista Corporation Balancing Authority of Northern California (BANC) Bonneville Power Administration B.C. Hydro and Power Authority Eugene Water & Electric Board Idaho Power Company NaturEner Wind Holding NorthWestern Energy PacifiCorp* Portland General Electric Puget Sound Energy Chelan County PUD Clark County PUD* Grant County PUD* Snohomish County PUD Seattle City Light Tacoma Power Turlock Irrigation District WAPA, Upper Great Plains * Currently pending Phase 4 transition

NWPP MC Initiative Approach and Timing Collaborate to deliver near- and long-term benefits to NWPP MC members and their customers by enhancing the reliability and efficiency of meeting the region’s power needs while preserving local decision making. Phases 1 & 2 Initial cost/benefit assessments of centralized-market structures and providers Exploration of non-centralized-market solutions and operational enhancements Phase 3 Operational tools development Bilateral market assessments SCED market detail development SCED market operator RFP issuance Regulatory due diligence Phase 4 Continue operational tools and regional infrastructure upgrades Install advanced bilateral and centralized clearing market capabilities Complete SCED market due diligence Phase 5 Full 5- or 15-min SCED with centralized market operator functions and tariff < and/or > Next generation of operational tools and regional infrastructure upgrades

NWPP MC SCED – 2015 Activity To Date Received bids from Southwest Power Pool and California Independent System Operator to perform SCED Market Operator functions Comprehensive bids received did not result in actionable path forward for NWPP MC based on design, governance, and cost challenges Engaged in further exploration with each on go-forward options for the NWPP MC following the February 17 closure of the initial Request for Proposals process MC Members are continuing due diligence activity in advance of a Q4-2015 decision on next-steps for the MC Initiative Key Issues: FERC Petition for Declaratory Order, member equity protection through resource sufficiency and transmission access policies, cost/benefit calculus and funding capability of MC members

Other 2015 MC Initiative Activity to Date Implemented regional data sharing consolidation through Peak Reliability Testing Regional Flow Forecast tool in live production environment Testing Resource Monitoring and Deliverability tool in off-line table-tops Exploring programs to access balancing reserves diversity with and without the SCED Preliminary evaluation of complementary initiatives, such as automated 15-min market capabilities and operations-based reliability enhancements. Regional Flow Forecast tool shows real-time loading and limits of critical flow-gates to inform operator and merchant activities

Proposed NWPP MC Major Deliverables Phase 4 Kickoff – April-May 2015 NWPP MC PRIMEs (Platforms for Reliability, Integration, and Market Enhancements) Module 1: Regional Flow Forecast Tool* Module 2: Resource Monitoring and Deliverability Tool* Module 3: Resource Sufficiency Program to support Modules 4,5,6,8 Module 4: 15 Minute Centralized Clearing Economic Dispatch Module 5: Regulation Diversity Group Module 6: Balancing Reserves Diversity Group Module 7: TSP/TOP Coordination Opportunities Module 8: Security Constrained Economic Dispatch (15-min, 5-min) All modules are complementary and lead to a reliable, efficient operations and marketing paradigm for the region Priority for Module implementation will be set initially by the Executive Committee at their May 2015 meeting, with implementation of key modules likely for 2015/16 * under transitional funding in 2015

Questions? questions@nwppmc.org