Roundup Power Project

Development Participants (Bank’s independent consultant)

Bull Mountains Mine Location Bull Mountains Mine is located in Musselshell and Yellowstone Counties, Montana Southeast of the town of Roundup Approximately 35 miles north of the city of Billings, Montana

Mine Status Mining began in August 2003 Contracts in place First shipments in September 2003 Test burns at major utilities Additional mineral rights purchased

Technical Description of Roundup Power Project

Roundup Power Project: Basic Characteristics Mine mouth power generation facility 2 x 350 MW (net) units Pulverized coal, subcritical (2400 psi/1000F/1000F) Pollution control: –Dry scrubber for SOx control –Selective catalytic reduction for NOx control –Baghouse for particulates –Air-cooled condenser FGS & Associates, LLC

Roundup Power Project: Basic Characteristics Water supply from well field (3 400 gpm each) Water collected and recycled – zero discharge 35-mile transmission line to Broadview substation Coal transported by conveyor from mine wash plant directly to the power plant. Two 175-meter stacks FGS & Associates, LLC

Performance Data and Materials Requirements 386 MW gross, 350 MW net per unit (9.3% aux. power) 9,840 Btu/kWh net plant heat rate (full load, including allowance for operating degradation) Coal consumption: –165 tons/hour/unit (full load) –1.31M tons/year/unit (90% capacity factor) Air emissions (values for permitting, two units): –SO x : 0.12 lb/MBtu (2160 tons/year/unit) –NO x : 0.07 lb/MBtu (1260 tons/year/unit) –Particulates: lb/MBtu –CO 2 : 211 lb/MBtu FGS & Associates, LLC

Plant Area

Air Pollution Emissions in Permit Application PollutantEmissionsControl Technologies Nitrogen Oxides0.07 lb / MBtuSelective catalytic reduction 90% overall reductionOverfire air Low NO X burners Sulfur Dioxide0.12 lb / MBtuLow sulfur coal 94% Overall ReductionDry scrubber Particulate Matter0.015 lb / MBtuPulse-jet baghouse 99.8% overall reduction FGS & Associates, LLC

Source: US EPA Environmental Scorecard 2000: Feb “Clear Skies” Administration Proposal & US DOE 2002 Annual Energy Outlook

Other Permits Water Rights FAA Letter from COE – no permits required Others routine – maximum 30 day lead time

Key Milestones Began permitting: July 2001 Submitted air permit: January 14, 2002 Draft air permit issued: August 12, 2002 Record of decision: January 31,2003 Final awards major equipment packages: Oct 2004 Unit 1 boiler hydro test: Mar 2007 Commercial service for Unit 1: March 2008 Commercial service for Unit 2: July 2008 FGS & Associates, LLC

Overall Process - Traditional 1.Permitting 2.Final Engineering 3.Construction 4.Operation

Overall Process - Current 1.Permitting 2.Lawsuits 3.Final Engineering 4.Construction 5.Operation

Permitting Status Permit filed 1/14/02 Responded to questions from FLM’s (issue is regional haze) Completion letter from MDEQ received on 8/1/02 Draft permit issued 8/12/02 Record of Decision 1/31/03

Air Permit Appeal Filed 2/15/03 Usual enviro groups Kitchen sink approach No new issues Hearing on June 4 – 6, 2003 Board dismissed virtually all items in appeal

Permit Lawsuit Filed 11/26/03 in Musselshell County Challenges Board of Environmental Review appeal decision Interventions in our behalf by WETA, and AFL-CIO Record is clear on all issues Court ruled strongly in favor of the permit on March 31, 2004

MACT Letter Appeal Filed in December 2003 BER appointed Hearing Examiner to hear appeal Stated issue is mercury control Another vehicle to try to stall the project Hearing held on April 20 & 21, 2004 Hearing officer recommended denying all portions of the appeal. BER denied petition 7-0 on June 4, 2004

EIS Status Not required under Montana rules Volunteered to do EIS Approved EIS for mine includes plant property Scoping Hearing: 4/4/02 EIS supplement submitted: 5/21/02 EIS draft to be issued 11/15/02 Hearing 12/5/02 Record of Decision 1/31/03 FGS & Associates, LLC

EIS Lawsuit Filed in Lewis & Clark County Motion to change venue to Musselshell County by MDEQ, BMDC1 and intervenors (WETA & AFL-CIO) approved Court date set for 11/29/04

DOI Lawsuit Filed October 29, 2003 by Nat. Parks Conservation Assoc., Greater Yellowstone Coalition, Wilderness Soc., & private individual Objects to DOI finding of no significant impact BMDC1 to enter as intervenor

Construction Engineering released in April 1 st package to be released for bids in June Start late August 2 nd package to be released for bids in August Start October

Economic Impact of Roundup Power Project Taxes on 2.7 million tons/year of coal used Property and school taxes on $800 million investment Transmission taxes on 5.5 m Mwh/year Payroll and income taxes on 150 employees at about $40,000/year + additional temporary maintenance activities Several million in direct local purchases and contracts Ripple or multiplier effect of payroll and local purchases (~ $50m/yr)