2  Large Service Area ◦ Copper Basin and Valdez  Electrically isolated from neighboring utilities  50% Hydro / 50% Fossil Fuels  Current Rates ◦ 18¢/kWh (Summer) to 30¢/kWh (Winter)

3  Project Cost  Potential Energy Output  Environmental and Cultural Concerns  Land Ownership  Location to Existing Transmission Infrastructure

4  Pre-Feasibility Study completed January 2011 ◦ Capacity MW (37,000-45,000 MWh) ◦ Multiple Land Owners  Chugach Alaska Regional Native Corporation  Tatitlek Alaska Village Native Corporation  Lands rich with Alaska native cultural resources  Conservation easements – Exxon Valdez Oil Spill Trustee Council and Tatitlek Corporation  USFS lands – Transmission line routing (roadless rule)  25 miles (138kV)

5 ◦ Environmental  Outlet regarded as a valuable natural salmon stream  Large number of bird species in the area  Dense Eagle population ◦ Project Costs  Estimated design and construction $157M  Cost of power 31¢ to 41¢/kWh  Board of Directors concluded not to move forward on this project

6  Pre-Feasibility Study Completed – February 2008 ◦ FERC preliminary permit issued September 2008  Feasibility Study Completed – May 2010 ◦ 6 different options studied  Dam Storage (Option 3c) selected  Difficult Construction  Site access, avalanche, glacial moraine  Capacity 6.5 MW (22,000 MWh)  Project Cost $63M  Cost of power 26¢/kWh

7  Change of Direction (Option 4a) ◦ Final Feasibility Study addendum – January 2011  Run-of-River ◦ No winter energy  Reduce risk utilizing a diversion structure ◦ Capacity 6.5 MW (16,000 MWh to 23,300 MWh) ◦ Construction Challenges  Steep terrain  Short construction season  Large amounts of snow

8 ◦ Environmental  Dolly Varden in bypass reach of the creek  Salmon downstream of discharge ◦ 4 miles of distribution (25kV) ◦ Project Cost $39M  Cost of power 21¢/kWh

9  FERC license application submitted August 2011 ◦ FERC Draft Environmental Assessment - December 2012  Project Benefits ◦ Increases Hydro portfolio to 67% ◦ Displaces 1,100,000 gallons of diesel fuel annually ◦ Expands current hydro generation season

10  Financing options for Allison Creek Hydro ◦ AK Renewable Energy Fund  CVEA awarded $2.2M ◦ AK Power Project Loan Fund ◦ AK SB25 – Loan Program ◦ Direct state legislative appropriations  CVEA awarded $11M ◦ Good project gets even better with Grant Funds  With grants, current cost of power 16¢/kWh  Construction scheduled to be completed October 2015