FBC Resources 1 Dan Egolf Manager, Power Supply & Planning

2 FBC Resources FBC-owned generation resources under the Canal Plant Agreement (CPA) Brilliant Plant BC Hydro Power Purchase Agreement (PPA) Waneta Expansion Brilliant Expansion Regional power markets International Joint Commission Order for Kootenay Lake Columbia River Treaty potential impacts Climate change potential impacts to resources

3 FBC Resource Portfolio

4 FBC CPA Generation Resources

5 FBC-Owned Generation CPA Resources Upgrade/Life Extensions completed for 12 of 15 units CPA started in earliest it can terminate is Jan.1, 2036 Entitlements will not change provided the generation is available to operate and the generation characteristics haven’t changed Not impacted by actual water flows Minimal ability to store water from month to month After Jan.1, 2036 it is much more likely that changes to entitlements could occur

6 Brilliant Contract Brilliant Plant constructed as part of the WWII war effort Sold to CPC and CBT in 1996 with West Kootenay Power (FBC) taking a 60-year contract for power Potential price adjustment in 2026 depending on market conditions Power is take-or-pay Full CPA plant, but regulated flow benefit is about 60 GWh/yr Fully Upgraded/Life Extended

7 Power Purchase Agreement with BCH Renewed in 2013 for 20 years 200 MW and 1,041 GWh of embedded cost power Additional energy at BCH LRMC Can nominate the energy up or down to respond to requirements Reliable and flexible reasonably-priced resource Terminates in renewal is not certain

8 Waneta Expansion Owned by Waneta Expansion Limited Partnership Began April 2015 for 40 years Renewal right for additional 40 years Capacity only, all energy is going to BCH Full CPA Plant Excellent regulating resource for a potential FBC renewable portfolio 50 MW RCA WAX Surplus Capacity sale to BCH for 10 years FBC/BCH seek to maximize overall provincial values

9 Brilliant Expansion Owned by Brilliant Expansion Power Corporation Majority of power sold to BCH Full CPA Plant FBC small capacity and energy contract through 2017 Power may become available at some time over the next 20 years

Regional Power Markets Wind is maturing Saturated Forecasting and integration improving Solar is growing fast in southern US Rooftop solar Community solar Inverted market prices starting to occur FBC/Powerex CEPSA Agreement to Sep.30, 2018 All WAX surplus All FBC market purchases Guaranteed supply 10

11 PNW Utilities Resources PNUCC Northwest Regional Forecast (April 2015)

12 International Joint Commission 1938 IJC Order Protects US farmers from higher water levels Rule curve ensures flood control benefits from Grohman Narrows Excavation Has never been seriously reexamined since 1938 If it were to be reopened, the resultant order may impact FBC CPA entitlements

13 Columbia River Treaty (CRT) Canada or US can terminate most provisions on or after Sep with 10 years notice US has provided its recommendations on bringing greater economic and environmental benefits to the Northwest How or if the CRT changes is not yet determined Potential salmon restoration issues

Climate Change Potential Impacts to Resources It is not well understood what the climate change impacts may be Issues with respect to generation resources are: Timing of precipitation Not as serious unless more rainfall early Spring Amount of precipitation If precipitation outside of freshet period is reduced, available energy is reduced FBC-owned plants are fairly small in size, reducing the impact Earlier freshets would likely mean less intense run-off as the days will still be short Not expected to potentially impact FBC entitlements until

Summary CPA could undergo revision in 2036, FBC expects there will be significant discussions up to 10 years before then Brilliant Contract price review in 2026 could increase costs PPA expiry in 2033 RCA expires in 10 years - additional 50 MW will then be available BRX power may become available - if so, it is likely to be an opportunity that may not repeat for some time Solar power is gaining significant importance to the south and may grow into more northern latitudes in time Potential impacts to existing resources due to IJC and CRT Changing climate conditions impacts are not yet clear 15

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