1. Western Area Power Administration – SNR Brief overview of WASN Sub- Control Area Operations

2. Overview Introduction to the new WASN Sub-Control Area. Review Westerns current business model and post 2004 marketing plan. WASN Sub-Control Area Operations.

3. History Contracts between Western and PG&E end December 31, 2004 (2947A & 2948A). –Western provides PG&E with CVP Generation, the output of the Bureau of Reclamation (BOR) units, in return for 1152 MW around the clock from PG&E (24/7/365). –Westerns Customers received Contract Rate of Delivery - CRD energy.

4. Old World –Westerns Customers Energy needs were tracked by the ACES scheduling system. Prescheduled by Westerns Merchant Adjusted real-time by the TSS (Transmission Scheduling and Security) Dispatcher

5. Decisions Western was faced with the following choices. –Become a Federal Control Area –Operate a contractually based Sub-Control Area in one of the following Host Control Areas: CAISO SMUD

6. Outcome Western initially worked to become a Federal Control Area. –Political and Operational concerns turned Westerns efforts toward becoming a Hosted Sub-CA. –SMUD was eventually chosen as Westerns Host Control Area.

7. WECC Compliance Monitoring and Operating Practices Subcommittee (CMOPS) peer review team had a positive recommendation for the SMUD Control area that includes the WASN footprint Approval

8. The New Footprint

9. New World On November 1, Western – SNR changed its Transmission Provider name from WAP to WASN –The name change is in keeping with the other Western Regions –Beginning January 1, 2005, Western will allocate Base Resource energy (formerly CRD energy) to its Customers.

10. New Provider Name Westerns Transmission Provider change notice has been on SNRs OASIS node located @ www.oatioasis.com since late September. The Transmission Provider name change is the most visible step toward WASN Sub-CA Operations. WAUE – Westerns Upper Great Plains Region WALC – Westerns Desert Southwest Region WAPA – Westerns Upper Great Plains Region WACM – Westerns Rocky Mountain Region WASN – Westerns Sierra Nevada Region

11. New Systems Western will implement a number of new systems for its post 2004 Marketing Plan Merchant System - webTrader WebTrans – Westerns Reliability - will be the primary tool for Transmission scheduling beginning January 1, 2005 –OATi product –Integrates webOASIS, ETS (webTag), and transmission scheduling features

12. 2005 WASN Operations WASN will operate the BOR units via AGC WebTrans will develop the WASN Sub-CA NSI via E-tags –All Sub-Control Area Transmission Schedules will be E- tagged –WASN E-tags will create a schedule in webTrans

13. Regulation & Reserves The WASN Sub-CA will have a 25% portion on the SMUD CA regulation signal. Also, WASN will be responsible for 44% of contingency reserves for the SMUD Host CA.

14. Scheduling PSEs Using CVP transmission will electronically tag their schedules. Westerns Merchant will E-tag the Base Resource Deliveries. Internal Entities will E-tag the remainder of their transmission schedules. PSEs are responsible for adjustments to E-tags for market reasons. Westerns TSS Dispatcher will curtail E-tags for reliability concerns. –The TSS Dispatcher will reload the E-tags when appropriate.

15. Closing Thank you for your time and attention, Please visit –Westerns Home Page @ www.wapa.gov for more information on Westerns post 2004 marketing planwww.wapa.gov –SNRs OASIS node @ www.oatioasis.com and click on the SNR logo for the latest informationwww.oatioasis.com