North American Power Group Western Mine-Mouth Coal-Fired Power Two Elk

North American Power Group, Ltd. NAPG  15 Year-Old Privately held Denver, CO based IPP  Full member of WECC  Owns and operates 7 power plants in California 4 Biomass (84 MW total) 2 Coal/Pet Coke (69 MW total) 1 Gas (48 MW total)  Conceived and developed the Two Elk project in the Power River Basin of Wyoming

Two Elk Project  Central station plant anchoring transmission  MW  Unit #1 at 325 MW under construction  Ample water supply  Ample coal supply by mine truck or overland conveyor belt  No additional infrastructure needed for subsequent units  Potential for Clean Coal for reduced or “zero”emissions

Two Elk Project  The plant is mine mouth, being a single mine truck haul from 20% of the nation’s coal supply.  The three mines abutting the project shipped approximately 196 million tons of coal in 2004 and can supply 250 million tons per year.  Unit #1 has been designed and is being constructed by Bechtel to allow it to burn non- commercial waste coal but run equally well on commercial coal.  Unit #1 officially commenced construction in late May Wyoming ruled all permits valid and in full force and effect in July  The Two Elk project has permits and water rights for an 11 well field, providing more than 3500 GPM. Two Elk Unit #1 has been designed with dry cooling to minimize water requirements.  An advantageous capital structure for Unit #1 based upon Tax Free Bonds provides most of Unit #1’s capital. Three hundred, twenty six million dollars ($326,000,000) in tax-exempt bonds have been sold to date.

Transmission Access

Why Two Elk ?  Fuel Supply 3 mines adjacent to Two Elk –2004 production 196 MM Tons –Mines Permitted for 250 MM Tons/year The adjacent mines have coal reserves of more than 21.7 billion tons No risk of supply or additional permits required 4 th mine scheduled to open by 2010

Why Two Elk ?  Fuel Transportation Mine-Mouth location immediately adjacent to mines No over the road trucking or railroad Delivery by 400 Ton Mine Truck or overland conveyor belt Mine Plan and transportation rates agreed upon for 30 years Audit and adjustment rights to reflect actual costs to deliver

Why Two Elk ?  Air Permits Construction underway on Unit #1 Air Modeling completed for additional units Air Permit application can be filed in Q Developer experienced with WY DEQ

Why Two Elk ?  Water 11 well field permitted by State Engineer Each well permitted at 325 GPM Unit # 1 with dry cooling design consumes 275 GPM Adequate water to support additional generation

Why Two Elk ?  State Support NAPG awarded $326 million in tax exempt bonds for Unit #1 (AA-/A-1+) Local and regional groups formed to support transmission –Wyoming Infrastructure Authority –Governor Freudenthal –Wyoming Counties For Responsible Energy Development (WyCFRED) Wyoming Carbon Sequestration Committee formed to explore for CO2 capture and sequestration Wyoming Pipeline Authority exploring Enhanced Oil Recovery using CO2 flood

NAPG Coal Development Characteristic Two Elk Unit I Two Elk Unit II Two Elk Unit III Two Elk Unit IV Two Elk Unit V Water 275 gpm 3575 gpm available 3000 gpm availableTo be permitted Fuel Supply PRB Waste– Mine truck/Conveyor belt Electric Transmission PacifiCorp PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kv DC Line Addition PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kv DC Line Addition PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kv DC Line Addition PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kv DC Line Addition Land Owned Rail Transport N/A Competitive Advantage No fuel cost-transport only. Tax Exempt Debt Coal in gas market. Identical need in Utility Resources (4 Utilities) Supply curve location Coal in gas market. Identical need in Utility Resources (4 Utilities) Supply curve location Coal in gas mkt. Identical need in Utility Resources (4 Utilities) Supply curve location Coal in gas mkt. Identical need in Utility Resources (4 Utilities) Supply curve location Coal in gas mkt. In-Service Date /2011

Why Two Elk ?  Transmission Substantial studies completed for Two Elk to the desert Southwest Right of Way from Two Elk to PacifiCorp secured Information and previous work can accelerate process –Environmental & site evaluation including GIS –Federal Agency contacts for lead and scoping –Corridor and route study information available

Why Two Elk ?  760 acre site with expansion option allows for additional units without added infrastructure expense. (600 MW IGCC => 80 Acre footprint)  Ash Ash storage and disposal site permitted and in place This is the only such permit in Wyoming  Two Elk can anchor transmission that will provide access to Wyoming’s Superb wind resources  Two Elk is 60 miles from prime CO2 flood enhance oil recovery fields and export pipelines

Why Now?  Unit 1 Currently Under Construction, COD 2009  NAPG is poised to permit subsequent coal units (COD dates )  Favorable State and Local support  Unit #1 to anchor transmission build out as well as subsequent expansion  New Transmission with Two Elk as an Anchor will enable Wyoming Wind Development

Conclusion  The Two Elk Project will provide long-term, stable, lowest bus bar cost of electric power.  Unit #1 is under construction and has the support of local and regional stakeholders.  Two Elk will act as an anchor for your transmission additions.  Future resource additions at Two Elk involve only an air permit.  Project enhancements are possible via carbon capture and sequestration and regional Enhanced Oil Recovery.  With low fuel cost, no transportation, carbon capture and EOR, Two Elk has the potential be the Palo Verde of Wyoming.  NAPG already has completed significant work, reducing risk and time to market.

Plan  The West has the Load  The will exists to expand the transmission  Funding is available  All that is missing is the generation complex  We have a head start with a project under construction and room to grow  We need partners that want to expand the site, jointly own power projects or provide PPAs

Options  PPA from Load Serving Entity to NAPG Permitting for Unit 2-5 EIS for larger Transmission Build Out  Joint Development of Subsequent Units Palo Verde Model  “Big Box” Model We have site, water, infrastructure Build your Unit on our Property Reduces risk, time to market, and cost