1. Workshop on Clean Energy Across the Border Holtville, California February 18, 2016 Jonathan M. Weisgall Vice President, Government Relations Berkshire Hathaway Energy

2. Imperial Valley Renewable Energy Overview Renewable energy drivers in Imperial Valley: – Excellent sun, wind and geothermal resources – Large tracts of desert land – Proximity to large population centers on the coast – California Renewable Portfolio Standard (RPS) of 20% by 2020 to 50% by 2030 Currently home to over 2,000 megawatts of geothermal, solar and wind energy developments Potential to produce up to 25,000 megawatts of renewable energy Source: 9th Annual Imperial Valley Renewable Energy Summit, www.ivres.com 2

3. Renewable energy projects (<20 MW) operating and capable of generating 165 MW – Breakdown: 87 MW of geothermal / 60 MW of small hydroelectricity / 17 MW of solar PV / 1 MW of biomass energy An additional15 utility-scale renewable energy projects are permitted but not yet on-line 39 utility-scale renewable energy projects operating and capable of generating 2,113 megawatts (MW). – Breakdown: 1050 MW of solar photovoltaic / 705 MW of geothermal power / 265 MW of wind energy / 93 MW of small hydroelectricity 19 distributed generation (rooftop) <10 MW Source: Desert Renewable Energy Conservation Plan, http://www.drecp.org/counties/imperial.html Renewable Energy Specifics (as of 6/30/15) 3

4. Geothermal industry is the largest source of local tax revenue for Imperial County: $9 million annually in property tax revenue, nearly 20% of the total for Imperial County Est. Annual Property Taxes Geothermal: $8.95 m Wind: $3.35 m Solar: $1.02 m Tax Revenues from Renewable Energy 4

5. Renewable Energy Projects - Total

6. Solar Farms – North End 6

7. Solar Farms – South End

8. Ocotillo Wind Farm

9. Geothermal Sites 9

10. 8-minute energy: Largest solar developer in Imperial Valley – and second largest solar PV portfolio in the US and California. 12+ utility-scale solar PV power plants in the Imperial Valley – ranging between 50 and 200 MW Tenaska Solar Ventures: Two major solar farms in Imperial Valley – 130 and 150 MW Ocotillo Wind: largest wind farm project in Imperial Valley – 256 MW CalEnergy:10 operating geothermal plants in Imperial Valley – combined output capacity 327 MW Notable Renewable Energy Projects 10

11. Site Aerial View

12. Site Aerial View Regions 1 and 2

13. Vonderahe-1 Production Well

14. Cerro Prieto Geothermal Field and Power Station – 720 MW – third biggest geothermal plant in the world – operational in 1973 – 4 th power plant added in 2000 Renewable Energy South of Border 14

15. Strong market for Baja wind in cross-border California market Major challenge: needed transmission to move the power north to an interconnection point for the California grid Once the power crosses the border, potential congestion problems on California grid Source: Renewable Energy in Mexico’s Northern Border Region, p. 8-9, www.wilsoncenter.org, (Apr. 2015) Future of Renewable Energy South of the Border 15

16. Largest Inland Lake in California – 375 square miles (Imperial & Riverside Counties) Sea supports diverse wildlife habitat for over 400 species of birds Salton Sea – Environmental Crisis 16

17. First Problem: Inflow reductions and high toxicity levels from farm runoff has left the Salton Sea increasingly contaminated, causing massive fish die- offs, algae blooms and obnoxious odors Salton Sea – Environmental Crisis 17

18. Second Problem: Sea level is rapidly receding due to reduced inflows from QSA transfer agreement Will cause the exposure of 50,000 acres of lakebed made up of silt and fine- grain soli particles containing Chromium, zinc, lead and pesticides, including DDT. Poses urgent threat to air quality throughout southern California Salton Sea – Environmental Crisis 18

19. Current Solutions – Salton Sea Restoration & Renewable Energy Initiative: Joint Project: Imperial Irrigation District & Imperial County Vision: Smaller but sustainable Salton Sea Goal: Leverage funds generated by new renewable energy projects (heavy emphasis on geothermal) to help finance activities for air quality management and habitat restoration Salton Sea – Environmental Crisis 19

20. Current Solutions – Salton Sea, limited Water Incremental Funding limited Time (SSWIFT) Salton Sea Authority – Tetra Tech concept for Restoration Vision: Smaller but sustainable Salton Sea – 36 sq mi Goal: Leverage funds generated by new renewable energy projects (heavy emphasis on geothermal) to help finance activities for air quality management and habitat restoration Salton Sea – Environmental Crisis 20

21. Current Solutions – Sea to Sea : Vision : restore pre-existing water levels - 100% of lake bed covered How : Transfer water from Sea of Cortez into the Salton Sea via a sea-level canal Utilize desalination plants fueled by geothermal steam to balance the lake's salinity Salton Sea – Environmental Crisis 21

22. Sea to Sea Solution Bureau of Reclamation concluded in 2005 that this was technically feasible, but estimated $15-$38 billion dollar cost was not viable But – compare costs associated with current California plan (through 2047) to Sea to Sea Option: – Current Revitalization / mitigation plan: $9.6 billion – Public Health (air pollution): $37 billion – Property Values: $7 billion – Preservation Value (wildlife): $10 billion Sea to Sea more expensive on the front-end, but could save billions in the long run and create major new economic development Source: Pacific Institute, Michael Cohen, “Hazard’s Toll – The Costs of Inaction at the Salton Sea”, (Sep. 2014) Salton Sea – Environmental Crisis 22

23. Barriers to Geothermal Development Incentives (PTC-ITC) are too short-term: – Geothermal projects have lead-times of 4-8 years, federal tax credits expired at the end of 2013 Geothermal expansion faces obstacles in areas of: – Exploration and drilling risk/technology – Project finance – Project leasing and permitting – Transmission – Workforce development True integration of geothermal values to economically create a balanced mix of renewable technologies to achieve carbon reduction goals Salton Sea – Environmental Crisis 23