1. Are we ready for the future? Rep. Jeff Morris Washington State Chair Technology, Energy, Communications Committee

2. 2 In the year 20?? Fill in your year! Traditional generation resources not available Different economic environment driving markets - convergence - no stove pipes! – Transportation – Manufacturing – Kyoto Historical developers handicapped while new technologies come into market

3. 3 Convergence Leader Prometheus Energy Company – Seattle, WA www.prometheus-energy.com Prometheus Energy Company is an alternative fuel company specializing in the production, sale and distribution of liquid natural gas (LNG). LNG is a clean burning, less expensive and safe alternative to diesel fuel. Using our proprietary and patented technology, we process methane from waste or low-quality sources such as landfills, stranded gas wells, anaerobic digesters and coal mines. Following a distributed- scale approach, our integrated liquefaction systems produce LNG close to end-users, which allows us to sell vehicle fuel at long-term, fixed prices below that of gasoline and diesel.

4. Northwest Power and Conservation Council Forecast change in Northwest resource mix -“Current Trends” case

5. 5 Holistic Future

6. 6 Needed resources Economic development a driver Graph from Poised for Profit November 2001 @ www.nwetc.com

7. 7 Needed resources Economic development a driver

8. = 500,000 people (approx.) Population Of Western States U.S. Census Bureau, 2003 estimates Alaska 648,818 Arizona 5,580,811 California35,484,453 Colorado 4,550,688 Hawaii 1,257,608 Idaho 1,366,332 Montana 917,621 Nevada 2,241,154 New Mexico 1,874,614 Oregon 3,559,596 Utah 2,351,467 Washington 6,131,445 Wyoming 501,242 But also a cause of Western political split.

9. 9 Why are we not ready? Disorganized messages from energy sectors to regulators and policy makers Lack of standardization in connecting new generation both in engineering and cost Prohibitive permitting costs and time lines Lack of accurate data to set true firming costs of new non-firm generation

10. 10 Why are we not ready? Lack of coordinated state policies and application of those policies across utility type (private/public) – Some states adopting or looking at RPS Why not in the Northwest? Creating inconsistent standards Is 100mw of wind firmed with 100mw of coal renewable? Will bio-diesel or ethanol (i.e. Iogen) used in traditional generation qualify for green?

11. 11 Why are we not ready? Prudent (shrewd or thrifty in planning ahead) – This is the public high wire walk that challenges us all – In order to create a soft landing in the supply and demand curve we need to make investments slightly before it would be prudent – Add in permitting time – This makes us speculators with differing or bad data sets

12. 12 What would get us ready? Identify least life cycle cost new generation resources Identify barriers to development – Regulatory – Permitting – Symbiotic resources – firming, smart energy – Interconnection both transmission and distributive – Regulatory – smart energy

13. 13 Policy tools needed to get to ready Integrated resource plans – We must see the mosaic in order to take our blindfolds off Regional coordination and communication – Broad agreement on market drivers – Broad agreement on infrastructure needs for reliability and security – Broad agreement on terms used in codification of statutes

14. 14 Policy Tools Needed to Get to Solutions Clear understanding of resource development chain – Location/selection - least resistant or best? – Capital investment /depreciation issues – Permitting – Integration barriers

15. 15 Thank You! Olympia Office: 434 Legislative Building PO Box 40600 Olympia, WA 98504-0600 (360) 786-7970