Draft Chapter 12: Bonneville Obligations Power Committee and Council Meetings June 9-11, 2009

Outline of Chapter What the Act provides Bonneville’s evolving role The administrator’s requirements Principles for acquisition Consistency with the Council’s Power Plan

Bonneville Actions to Implement Regional Recommendations 20-year power sales contracts Tiered Rates Methodology Revised residential exchange agreements following 9th Circuit rebuff Review of post-2011 conservation Note: Legal challenges put these decisions at risk, especially the Residential Exchange Program

Bonneville Resource Acquisition Bonneville’s resource acquisitions must be consistent with the plan Bonneville may need to acquire resources for Tier 1 supplementation, DSI service, Tier 2 loads put on Bonneville, flexibility for wind balancing Energy, capacity or flexibility – or some combination Plan identifies principles and recommendations to guide Bonneville’s acquisitions

Resource Acquisition Issues Magnitude of the various needs not known now Bonneville Preliminary Needs Assessment identifies only maximum potential need Will not be known by adoption of Sixth Plan Dependent on later actions by Bonneville customers Availability of solutions not well known now Many solutions to balancing needs depend on actions now under development Capacity and energy solutions depend on Bonneville choices

Resource Acquisition Issues – 2 Interactions between energy, capacity and flexibility attributes in particular resources Some resources provide two, some all three Some provide one at the expense of another Council’s analysis does not break out utility-specific capacity and energy needs Looks at resources that utilities may exclude Council’s analysis of flexibility not as rigorous as analysis of other Plan issues

Principles for Bonneville Acquisition Actions Aggressively pursue Plan’s conservation goals Aggressively pursue use of existing system resources and institutional solutions for balancing needs before turning to new generation Many now being discussed, described in Chapter 11 Take a broad look at cost-effectiveness and reliability of sources of new capacity and flexibility, if needed to meet obligations Look at synergies between capacity and flexibility