1. Connecting Clean Energy in the West Transmission and Clean Energy in the Western US Dave Olsen Governors Wind Energy Coalition November 3, 2011 Seattle Salt Lake City Denver Helena Phoenix Sacramento Portland Las Vegas

2. Connecting Clean Energy in the West Agenda Regional Cooperation –WREZ Development Zones –Renewable Energy Exports-Imports –Regional Transmission Expansion Plan –Importance for Governors Clean Energy Vision for the West System Planning and Public Consent 2

3. Connecting Clean Energy in the West Western Grid Group 200 years state regulatory experience Former chairmen, staff of 8 western PSCs 50 years experience as wind, solar, geothermal, hydroelectric power developers Non-profit NGO; works with Governors, utilities, regulators, agencies, advocates Formed 2003 to develop policies to accelerate transition to sustainable electricity, win transmission access for clean resources

4. Connecting Clean Energy in the West Moves Toward Regional Cooperation 4

5. Connecting Clean Energy in the West Limitations on Transmission Development RPS-driven procurement Projects target coastal markets –One-way flow to West coast –CA >50% western demand; limits imports In-state only energy development –Every state wants economic benefits –States reluctant to import—even lower cost power –Narrow view of opportunities 5

6. Connecting Clean Energy in the West But: Regional Cooperation Opportunities Develop renewables in zones –Western Renewable Energy Zones (WREZ) Retire coal, use freed-up transmission for renewables Every state an exporter and importer Coordinate system operation to reduce costs, improve reliability –Optimize siting to reduce variability 6

7. Connecting Clean Energy in the West WREZ WGA initiative, funded by DOE Zone development minimizes transmission need, economic and environmental cost Zones of common interest to utilities Facilitates transmission development –Combined procurement justifies interstate tx –Basis for cost allocation decisions –Planners discount remote, lower-cost power because transmission development uncertain 7

8. Connecting Clean Energy in the West 8 WREZ areas of highest renewable resource supply potential

9. Connecting Clean Energy in the West Add: New Ways to Optimize Wind Siting Reduce aggregate variability, integration costs; maximize output –Northrop Grumman-MORE Power; LS Power Dispersed renewables help keep system balanced Smart from the Start environmental siting Every state an exporter and importer Requires new transmission infrastructure 9

10. Connecting Clean Energy in the West Exports from All Regions Retiring old coal creates new demand Supports project, supply chain investments across the region => Regional transmission topology

11. Connecting Clean Energy in the West Regional Cooperation Priorities Energy Imbalance Market Balancing Area coordination Faster schedules, dispatch Improved forecasting WECC Regional Transmission Expansion Plan (RTEP) Regional markets

12. Connecting Clean Energy in the West Importance for Governors Regional development creates larger markets, to economic benefit of all states Improved reliability Lower costs –Shared reserves –Most efficient units run more, less efficient less –Least-cost system balancing 12

13. Connecting Clean Energy in the West Clean Energy Vision for the West 13

14. Connecting Clean Energy in the West Western Grid 2050 Compare Business as Usual (BAU) and Clean Energy Vision (CEV) trajectories $200 billion investment next 20 years Choices today determine infrastructure in 2030, 2050 Begin west-wide discussion of goals for electric system performance

15. Connecting Clean Energy in the West Clean Energy Economy Goals for Electric System Performance Drive job creation, economic development, competitiveness More secure, sustainable More reliable Less expensive Reduce emissions, water use Improve public and ecosystem health

16. Connecting Clean Energy in the West Modernizing Electric Service More reliable –More diverse, much more decentralized –Wind, solar higher mechanical availabilities –Modern communications, control technologies Less expensive –No/low fuel costs pay back investment in clean resources, reduce system cost More secure, lower risk, higher quality 16

17. Connecting Clean Energy in the West Sustained, Orderly Transition Build on Energy Efficiency, Renewables policies now in place Add Distributed Generation, Demand Resources to decentralize, diversify Schedule coal retirement years ahead Don’t invest in upgrading old plants Compensate remaining book value Incentives for utilities to diversify; use freed- up transmission for renewables Regional markets and cooperation

18. Connecting Clean Energy in the West Earning Public Consent: New Principles for System Planning 18

19. Connecting Clean Energy in the West Earning Public Consent Infrastructure development contentious –History of major planning failures by experts –Skepticism re: social need vs. private interests Address public concerns: –Jobs, economic development –Security; Health; Local, environmental impacts Key to better-planned projects, faster approvals, less litigation Builds broader appreciation of benefits 19

20. Connecting Clean Energy in the West System Planning Principles Planning the system, not just transmission Expands NWCC 2004 Transmission Planning Principles Builds on FERC Orders 890, 1000 –Stakeholder involvement produces better plans –Planning identifies project beneficiaries, builds record cost recovery can be based on 20

21. Connecting Clean Energy in the West New Planning Metrics Economics Job creation; economic development Protection from fuel price risk, volatility Efficient utilization of existing grid Comparable treatment of demand and supply resources Local and Environmental Concerns Emissions; Water Use Protection of Wildlife, Habitat and Ecosystem Integrity Robust Stakeholder Participation Energy Security System vulnerabilities, risks –Reliance on indigenous, inexhaustible resources –Vehicle electrification 21

22. Connecting Clean Energy in the West Planning Principles—Next Steps Can public interest System Planning Principles facilitate wind project siting, transmission development? Are they politically feasible? What entities should sponsor discussions to develop and promulgate them? 22

23. Connecting Clean Energy in the West Dave Olsen dave@westerngrid.net dave@westerngrid.net (805) 653-6881 Clean Energy Vision Report, Materials Western Clean Energy Advocates, Western Grid Group, at: www.westerngrid.net Seattle Salt Lake City Denver Helena Phoenix Sacramento Portland Las Vegas