1. Utility Responsibility to Maintaining Load Reliability Resource Adequacy Forum Technical Committee Meeting June 20, 2007

2. What is the Utility’s Role – Team player, going it alone or a combination?

3. Individual Utility Perspective Do customers have a reliable supply Does utility have adequate resources, contracts and options in “portfolio” to provide adequate supply Is the region surplus or deficit to provide energy during constrained conditions Is the power cost/risk reasonable (efficient frontier) in meeting utility objective.

4. Individual Utility Position Demand and Supply Hourly changing loads under range of conditions “Portfolio” of supply options to include: Owned or acquired resource output Energy purchase and sales contracts, specific to terms for energy entitlement Options (and obligations) to acquire energy under terms specified Reliance on market purchases – assessment of regional surplus or deficit IPP Imports /Exports part of regional assessment

5. Page 5 WECC – Western Regional View Inclusive of all interconnected loads and resources Resources dispatched in economic manner to provide greatest value to generation while providing energy at lowest cost Transmission utilized based upon economic criteria, providing energy at least cost Not inclusive of contracts between utilities – assumes efficient dispatch of all resources to meet total system load IPP imports and exports treated same as utility resources

6. Page 6 Northwest Regional View Inclusive of interconnected loads and resources in Northwest Resources in NW region dispatched in economic manner to provide greatest value to generation/lowest cost to consumers Assumes some energy transfer between outside interconnected areas, not fundamentally based Transmission within NW region utilized based upon economic criteria Not inclusive of contracts between NW utilities – assumes efficient dispatch of all NW resources to meet total system load IPP imports/exports to areas outside NW effect available energy

7. Page 7 Integration of Utility Positions to Regional Perspective With the following list of caveats, the sum of utility perspectives will align with a regional view –All loads and resources are similarly represented in the regional and individual utility portfolio being uniquely identified (sum of parts = total) –Contracts (energy purchases or sales) have an equal and offsetting entry with another regional constituent. –All utilities manage their portfolios to the level of reliability implied in the regional view (equal distribution of LOLP)

8. Page 8 Illustration of Utility Positions to Regional Perspective Company A Load Profile Supply Portfolio Resources Contract Purchases Options Market purchases Company B Load Profile Supply Portfolio Resources Contract Purchases Options Market purchases Company A Load Profile Supply Portfolio Resources Contract Purchases Options Market purchases

9. Page 9 Example of Utility Positions to Regional Perspective Sum of individual utilities equals “regional view” Intra-region transactions include entitlements and obligations – both sides of each transaction Load / resource balance approximately equal – all surplus

10. Page 10 Example of Utility Positions to Regional Perspective

11. Page 11 Example of Utility Positions to Regional Perspective Critical period, loads up by 25% for all companies, resource output same in simple example Intra-regional options exercised during constrained period Load / resource balance not equal – some surplus, other deficit Region as a whole is deficit, implies LOL

12. Page 12 Example of Utility Positions to Regional Perspective Critical period, loads up by 25% for all companies, resource output same in simple example Intra-regional options re-configured to establish equal un-served load percentage Conclusion: Portfolio view reflective of regional view when properly configured to include all obligations, entitlements and loads and resources consistently applied to regional view.

13. Page 13 Summary / Conclusions Equal allocation of LOLP among utilities requires purchase commitments in “portfolio” equal to regional LOLP Purchase commitment by Utilities provides revenue base to promote regional development by both regional Utilities and IPPs. Lack of providing long-term assurance of adequate supply by individual utilities in their portfolios may result in underdevelopment in the region resulting in higher LOLP