Reno, NV December 18,

 Agenda 1. Regulatory Filings Update 2. Integrated Resource Plan Update 3. SB 123- NVision 4. Stakeholder Input 2

3 Regulatory Filings Update  One Company Filing  One Company Rate Case  Tariff Changes  NPC Rate Case Settlement  FERC Order 1000

 NVE filed an Application For Approval of Internal Reorganization May 31, 2013 ◦ Sierra Pacific to merge into Nevada Power. ◦ The surviving entity will be renamed NV Energy Operating Company. ◦ The transaction to be effective January 1, 2014 or the in-service date of ON Line. ◦ FERC issued an order on November 26, 2013 authorizing the transaction. 4

 NVE filed a combined rate case May 31, ◦ One set of rates for NV Energy Operating Company (the combined company) ◦ ON Line costs included  Expected completion – December 2013 ◦ Rates effective January 1, 2014 ◦ Transmission and NITS rate to be $3.57 per kW month ◦ ROE – 10.50% ◦ Loss for combined BAA updated 1.57% ◦ Updated rates for Sch. 1, 2, 3, 5, 6, 7, 8, 11 & NITS 5

 The case is currently in settlement proceedings at FERC.  Next settlement conference is scheduled for Thursday, January 16, 2014 at FERC. 6

 Tariff for NV Energy Operating Company requested to be effective Jan. 1, 2014  Tariff updated to reflect one BAA (SPPC / NEVP to be combined to NVE on 1/1/14) 7

 NPC filed a stand-alone rate case October 31,  On December 31, 2012 FERC accepted the filing and suspended the rates for five months to be effective June 1,  The December 31, 2012 order also established hearing and settlement judge proceedings.  Settlement was reached and NPC filed the settlement November 27,  On December 5, 2013 the Chief Judge granted a Motion for Interim Rate Relief effective November 1,

ScheduleDescriptionSettled RateMeasurement Rate Basic RateFirm Point to Point Service$1.88KW per month Basic RateNon-Firm Point to Point Service $1.88KW per month Basic RateNetwork Integration Transmission Service $1.88KW per month 1Scheduling$70.92MW per month 2Reactive Supply$292.00MW per month 3Regulation$7.25KW per month 5Spinning Reserve$7.25KW per month 6Supplemental Reserve$7.10KW per month 11Generator Regulation$7.25KW per month

 On July 21, 2011, the Federal Energy Regulatory Commission (“FERC”) issued Order No. 1000, Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities (“Order 1000”), which became effective on October 11, 2011  Four areas of reform: ◦ Regional transmission planning ◦ Interregional transmission planning coordination ◦ Right of First Refusal (ROFR) – N/A to Nevada ◦ Cost Allocation 10

 Public Utility Transmission Providers (“TPs”) required to participate in a regional planning process that satisfies Order 890 principles (coordination, openness, transparency, information exchange, comparability, dispute resolution and economic planning) and produces a regional transmission plan ◦ Each region to produce a regional plan reflecting solutions that meet the region’s needs more efficiently or cost effectively  Local and Regional transmission planning processes must consider transmission needs driven by “Public Policy Requirements” established by state or federal laws or regulations  TPs in each pair of neighboring planning regions must coordinate to determine if more efficient or cost-effective solutions are available 11

Order is process, not outcome, oriented FERC did not prescribe the exact manner for public utilities to develop the regional transmission planning process, but rather only set forth principles for public utilities, in consultation with stakeholders, to develop a transmission planning process for their regions (P157) FERC did not require that the regional transmission planning process create/establish obligations to build or commitments to construct transmission facilities – rather Order 1000 simply sets forth principles public utilities need to consider in developing a regional transmission planning process (P159) 12

 FERC concluded that the WestConnect filing partially complied with the requirements of Order No. 1000and directed further compliance filings:  State that WestConnect has an obligation to identify transmission solutions in the regional transmission planning process that more efficiently or cost-effectively meet transmission needs  Address Order No. 1000’s requirement to consider transmission needs driven by public policy requirements  Provide that regional cost allocations are binding on identified beneficiaries. 13

14 Integrated Resource Plan (IRP) Status

15 HOT WEATHER ENERGYPCTPEAKPCTPEAKPCT Year(GWH)GROWTH(MW)GROWTH(MW)GROWTH ,8565,5715, ,8890.2%5,6040.6%5,8410.6% ,0890.9%5,6560.9%5,8960.9% ,1440.3%5, %5, % ,3130.8%5,6540.4%5,8930.4% ,4920.8%5,7131.0%5,9551.1% ,8031.4%5,7951.4%6,0401.4% ,1291.4%5,8831.5%6,1321.5% ,4771.5%5,9631.4%6,2161.4% ,7141.0%6,0431.3%6,2991.3% ,9541.0%6,1081.1%6,3671.1% ,2271.1%6,1801.2%6,4421.2%

16 HOT WEATHER ENERGYPCTPEAKPCTPEAKPCT Year(GWH)GROWTH(MW)GROWTH(MW)GROWTH 20128,9491,6211, ,1792.6%1,6642.7%1,7282.7% 20149, %1, %1, % 20159,1390.2%1,6630.2%1,7230.0% 20169,2681.4%1, %1,7270.2% 20178, %1,6202.3%1, % 20189,0613.2%1,6511.9%1,6832.4% 20199,2742.4%1,6691.1%1,7151.9% 20209,3741.1%1,6840.9%1,7331.0% 20219,4741.1%1,6970.8%1,7490.9% 20229,4980.3%1,7030.4%1,7630.8% 20239,5000.0%1,7201.0%1,7690.3%

17 RECORDEDFORECAST Daily Temperatures 20-yr average Temps (MW)DateHourMaxMin(MW)MaxMin South5,8547/2/20135:00 PM115905, North1,7207/22/20135:00 PM101691,

IRP filed June 2012 (Docket ) 2. Planning period: 2013 – PUCN Final Order December 24, PUCN approval was not requested for any new transmission projects 18

ON Line Transmission Project 19

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21 SCOPE ◦ 235-mile 500 kV transmission line Robinson-Harry Allen ◦ Robinson Summit 500/345 kV substation ◦ Falcon-Gonder Fold ◦ Series compensation on the existing Falcon – Gonder 345 kV line ◦ Harry Allen Terminal SPPC and NPC Balancing areas will be consolidated post ON- Line Budget revised from $510 million to $552 million In-service date of the project has been delayed to December 31, 2013

IRP filed July 1, 2013 (Docket ) 2. Planning period: 2014 – Requested approval for new transmission projects 22

Bordertown to Cal Sub 120 kV Line 1.The project was approved by the PUCN in 2007 and includes the construction of a 345/120 kV transformer at Bordertown Substation and a new 120 kV line from Bordertown substation to California Substation. 2.Project would provide additional transmission support to the West Reno transmission system for outages of a North Valley Road transformer and N-1-1 outages of the 120 kV transmission system. 3.To date Sierra has not obtained the required permits for this line and permitting work is continuing. The in-service date for this project has been moved from 2012 to

345 KV Voltage Support Project  Add 75 MVA 345 kV capacitor bank at North Valley Road substation and Mira Loma substation  Mira Loma in service date is December 2013  Valley Road in service date is February

Hycroft Mine Load Addition / Oreana 345/120 kV Substation  New 345/120 kV substation with a 280 MVA transformer  Expand existing Dun Glen Switching Station  Rebuild 119 & 162 lines to Bundled 954 ACSR for approx. 34 miles  Install approx. 48 miles of new Bundled 954 ACSR 120 kV line  Install a new 20 MVar Capacitor banks at Dun Glen and Hycroft 25

Carlin Trend Master Plan  Carlin Trend Under Voltage Load Shedding Scheme  Second Falcon 345/120 kV Transformer  Coyote Creek 120 kV Breaker Addition  Carlin Trend Transmission Additions 26

 “ Emission Reduction and Capacity Replacement Plan”  Requires NVE-South to retire or eliminate 800 MW of coal by 2019 (Reid Gardner 1,2&3 2014, Reid Gardner and Navajo 2019)  Requires NVE to replace coal with company owned 550 MW of generation either constructed or acquired ◦ Generation type not specified ◦ Receive cost recovery for decommissioning costs  Consumer protection, cap on rates at 5% 27

 Requires annual RFPs for 100 MW of new renewables in 2014, 15, 16 ◦ NVE can participate and compete in RFPs  Requires 50 MW of company-owned renewables to start construction by 2017  Expect to file a Resource Plan Amendment with the PUCN in the Spring of 2014 with plan to comply with SB123 and required resource additions.  New generation additions may require additional transmission including the addition of the Harry Allen 230/500 kV transformer. 28

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