City of Port Angeles Strategic Planning Workshop for Power Supply June 7, 2011 Scott Corwin Executive Director Public Power Council

PPC Mission: Preserve and protect the benefits of the Federal Columbia River Power System for Consumer-Owned Utilities. Power (esp Tier 1) and Transmission-- rights and rates 2

Public Power Council Open to consumer-owned utility customers of BPA. Provide technical/legal/government affairs expertise; inform and advocate on issues impacting the federal power and transmission system. Provides a forum for debate, strategy, and coordination among BPA customers. 21 member Executive Committee Advocate at BPA and other venues (Northwest Power and Conservation Council, Ninth Circuit Court) :  Fight added costs without reciprocal benefit (e.g., proposed BPA take different financial risk approach to keep rates lower than otherwise would be for this next period starting October)  Fight attacks on public preference  Fight attacks on capability of the hydro system. 3

Why Public Power Needs to Stay Strong on Federal, Regional, & Local Issues Traditional Preference Fights – threats from Northeast/Midwest Coalition and federal budget proposals (market rates, wires charges, etc). Traditional Preference Fights – from DSIs, IOUs, & State Regulators. Traditional Preference Fights – use of water, other grabs at the system, e.g. fish issues. 4

The New Preference Fights Many of the issues around variable resources (wind) have rates and preference rights implications (esp at FERC) Key is your statutory right to FCRPS power (energy and capacity), and proper accounting of cost causation/allocation Other possible impacts to energy portfolio: RPS/CES laws, Greenhouse Gas laws/reg 5

7

Translating Threats to BPA Costs Fish and Wildlife – protect against extreme proposals re: dams, and assist in efforts to advocate for sensible approaches to mitigation. Largest Current Cost Center. Variable Resource Challenges (wind) – policy, legal, and rate case activity to protect preference rights and costs.  Emerging Policy Center, Several Venues, Large Potential Growth in Costs Environmental – Greenhouse Gas or Clean Energy Standard s Many Other Costs/Rates Issues–  Asset Management– Borrowing Authority and Debt Service  DSI’s Contracts and Rates, Residential Exchange– continuing cycle of lawsuits and rate case implementation issues.  Columbia Generating Station – key part of portfolio undergoing key refueling and refurbishment. 8

Fish: 9

10

Wind in the BPA Balancing Area As of today BPA has 3522 MW (nameplate) of wind installed in its Balancing Authority. By the end of 2011 that amount was projected to grow to over 4000 MW. By the end of 2013, it is expected to be at approx 6000 MW or more. 11

12

The High Wind, High Water Conflict 13

The Virtual Path South California RPS, 20% going up to 33% REC stripping: Shepard’s Flat, 845MW, MW Turbines, RECs all going to SoCal Edison, energy going to? CPUC limits TRECs to 25% of the targets, but limit sunsets in PPC advocate at FERC, BPA, 9 th Circuit, & other to protect against cost shifts to us. 14

Climate Change Policy PPC focus on how proposals could unfairly effect Northwest preference customers – low emitting utilities. PPC coordination of common preference customer positions and talking points 15 10% Load Growth 300% Emissions Increase

Questions? Scott Corwin Public Power Council