1. Sixth Northwest Conservation & Electric Power Plan O&M Planning Assumptions for Natural Gas Resources Maury Galbraith Northwest Power and Conservation Council Portland, OR July 17, 2008

2. June 11, 20082 Sources of O&M Expense Information FERC Form 1: Annual Report of Major Electric Utilities Utility Integrated Resource Plans Literature Review Industry Experts

3. June 11, 20083 Comparison of O&M Expense Estimates Combined Cycle Combustion Turbine (2x1) Fixed ($/kW-yr)Variable ($/MWh)Source NPCC 5th Plan10.303.30 Idaho Power 2006 IRP10.303.30NPCC 5th Plan Portland General 2007 IRP8.902.30NPCC 5th Plan Avista Corp 2007 IRP9.202.60NPCC 5th Plan Puget Sound 2007 IRP21.003.00NPCC 5th Plan PacifiCorp 2007 IRP9.102.40EPRI TAG Platts White Paper 200712.801.50FERC Form 1 NPPC FERC Form 113.401.30FERC Form 1

4. June 11, 20084 Comparison of O&M Expense Estimates Simple Cycle Aeroderivative Turbine (LM6000) Fixed ($/kW-yr)Variable ($/MWh)Source NPCC 5th Plan9.30 Idaho Power 2006 IRP9.30 NPCC 5th Plan Portland General 2007 IRP0.004.50NPCC 5th Plan Avista Corp 2007 IRP9.009.20NPCC 5th Plan Puget Sound 2007 IRP PacifiCorp 2007 IRP26.402.40EPRI TAG Platts White Paper 2007 **2.901.20FERC Form 1 NPPC FERC Form 130.808.40FERC Form 1 NERA NYISO ICAP Study36.703.10S&L

5. June 11, 20085 Comparison of O&M Expense Estimates Simple Cycle Frame Turbine Fixed ($/kW-yr)Variable ($/MWh)Source NPCC 5th Plan7.004.70 Idaho Power 2006 IRP7.004.60NPCC 5th Plan Portland General 2007 IRP0.002.50NPCC 5th Plan Avista Corp 2007 IRP6.904.60NPCC 5th Plan Puget Sound 2007 IRP7.004.00 PacifiCorp 2007 IRP5.309.90EPRI TAG Platts White Paper 2007 **2.901.20FERC Form 1 NPPC FERC Form 19.4015.70FERC Form 1 NERA NYISO ICAP Study19.000.50S&L

6. June 11, 20086 Comparison of O&M Expense Estimates Internal Combustion Engine Fixed ($/kW-yr)Variable ($/MWh)Source Platts White Paper 20075.200.00FERC Form 1 NPPC FERC Form 112.006.00FERC Form 1

7. June 11, 20087 FERC Form 1 Data Platts O&M White Paper Piper, Steve and Jason LaDue, “Estimation of Generating Unit O&M Expenses: Revisiting the ’80/20’ Rule,” Platts White Paper, June 15, 2007. Describes mapping of FERC Form 1 line items to fixed and variable O&M expense categories. Provides indicative O&M expenses Platts “Generation Supply Curve – Historic” Database Contains FERC Form 1 O&M expense data for 2003-2006 Requires Platts Energy Advantage TM license

8. June 11, 20088 Platts Mapping of FERC Form 1 Generating Plant Statistics to Fixed and Variable O&M Form 1 Line No.Form 1 Item DescriptionPlatts O&M Category 19Production Expenses: Oper, Supv, & EngrFixed 27RentsFixed 29Maintenance Supervision and EngineeringFixed 30Maintenance of StructuresFixed 31Maintenance of Boiler PlantFixed 32Maintenance of Electric PlantFixed 33Maintenance of Misc Steam PlantFixed 21Coolants and Water (Nuc Only)Variable 22Steam ExpensesVariable 23Steam from Other SourcesVariable 24Steam Transferred (Cr)Variable 25Electric ExpensesVariable 26Misc Steam Power ExpensesVariable 28AllowancesVariable

9. June 11, 20089 Council Extract of FERC Form 1 O&M Data O&M Source = FERC Form 1 Actual AND Plant Region = WECC Number of Observations: Prime MoverFixed # Obs.Variable # Obs. Combined Cycle4546 Gas Turbine178170 Aeroderivative22 Frame31 IC Engine2928

10. June 11, 200810 Limitation of FERC Form 1 Data Regulated utility reporting (no merchant plants) Accounting standards are subject utility interpretation (anomalously high and low cost data) Reporting by Plant/Prime Mover combination (masks unit level detail)

11. June 11, 200811 Combined Cycle Combustion Turbines Plant NamePrime MoverYEAR$/kW-yr$/MWh 1AnimasCOMB CYC200320.434.04 2Charles LenzieCOMB CYC2006 0.12 3Coyote SpringsCOMB CYC200328.61 4Coyote SpringsCOMB CYC200411.32 5Coyote SpringsCOMB CYC200520.03 6Coyote SpringsCOMB CYC200619.48 7Coyote Springs IICOMB CYC200310.560.57 8Coyote Springs IICOMB CYC200416.100.38 9Coyote Springs IICOMB CYC20057.990.66 10Coyote Springs IICOMB CYC20067.311.19 11Currant CreekCOMB CYC20065.470.80 12Encogen NWCOMB CYC200319.640.70 13Encogen NWCOMB CYC200421.331.15 14Encogen NWCOMB CYC200513.611.71 15Encogen NWCOMB CYC20065.865.45

12. June 11, 200812 CCCTs (Continued) Plant NamePrime MoverYEAR$/kW-yr$/MWh 16Fort St. VrainCOMB CYC20039.380.65 17Fort St. VrainCOMB CYC200414.620.43 18Fort St. VrainCOMB CYC20055.480.35 19Fort St. VrainCOMB CYC200611.350.36 20Hermiston Generating Co.COMB CYC20044.942.45 21Hermiston Generating Co.COMB CYC200513.151.91 22Hermiston Generating Co.COMB CYC20067.302.58 23Luna Energy FacilityCOMB CYC20069.24 24Redhawk 1 & 2COMB CYC20055.161.24 25Redhawk 1 & 2COMB CYC200614.000.96 26SantanCOMB CYC200325.591.75 27SilverhawkCOMB CYC200620.270.02 13.001.00

13. June 11, 200813 Aeroderivative Gas Turbines Plant NamePrime MoverYEAR$/kW-yr$/MWh 1Lordsburg (PNM)GAS TURB200316.700.01 2Lordsburg (PNM)GAS TURB200417.90 3Lordsburg (PNM)GAS TURB200511.30 4Lordsburg (PNM)GAS TURB20068.43 5Northeast (WWPC)GAS TURB2006 10.72 6Pyramid Generating ProjectGAS TURB20045.65 7Pyramid Generating ProjectGAS TURB20054.9817.96 8Pyramid Generating ProjectGAS TURB20064.8317.41 9Sundance (AZPS)GAS TURB20054.158.32 10Sundance (AZPS)GAS TURB20064.648.18 11West Valley CityGAS TURB200393.274.50 12West Valley CityGAS TURB200484.025.11 13West Valley CityGAS TURB200583.407.38 14West Valley CityGAS TURB200661.704.67 31.008.00

14. June 11, 200814 Frame Gas Turbines Plant NamePrime MoverYEAR$/kW-yr$/MWh 1Bennett MountainGAS TURB20052.411.74 2Bennett MountainGAS TURB20062.262.79 3De Moss PetrieGAS TURB20030.82 4De Moss PetrieGAS TURB20042.07 5De Moss PetrieGAS TURB20051.24 6De Moss PetrieGAS TURB20062.15 7Frederickson (PSPL)GAS TURB20061.2613.83 8Limon Generating StationGAS TURB20044.72 9Limon Generating StationGAS TURB20055.4535.71 10Limon Generating StationGAS TURB20065.2834.62 11Mountain Home Generation StationGAS TURB20039.524.08 12Mountain Home Generation StationGAS TURB20045.736.60 13Mountain Home Generation StationGAS TURB20055.8913.06 14Mountain Home Generation StationGAS TURB20066.436.46

15. June 11, 200815 Frame Gas Turbines (Continued) Plant NamePrime MoverYEAR$/kW-yr$/MWh 15Nevada Sun Peak ProjectGAS TURB20030.03 16RathdrumGAS TURB200332.2816.03 17RathdrumGAS TURB200432.3649.57 18RathdrumGAS TURB200523.5017.24 19RathdrumGAS TURB20062.245.51 20WhitehornGAS TURB200329.81 21WhitehornGAS TURB200421.2712.78 9.0016.00

16. June 11, 200816 Internal Combustion Engines Plant NamePrime MoverYEAR$/kW-yr$/MWh 1Boulder ParkINT COMB200314.459.16 2Boulder ParkINT COMB200413.324.77 3Boulder ParkINT COMB20059.765.71 4Boulder ParkINT COMB200610.944.03 Sub-Average 12.006.00 Plant NamePrime MoverYEAR$/kW-yr$/MWh 5Kings BeachINT COMB20033.69 6Kings BeachINT COMB20043.250.26 7Kings BeachINT COMB20053.380.08 8Pueblo Airport IndustrialINT COMB200311.3913.06 9Pueblo Airport IndustrialINT COMB20046.12 10Pueblo Airport IndustrialINT COMB20052.1814.30 11Pueblo Airport IndustrialINT COMB20060.8811.36 12Rocky FordINT COMB20035.253.92 13Rocky FordINT COMB20048.38 14Rocky FordINT COMB20056.664.37 15Rocky FordINT COMB20067.433.75 All-Average 7.006.00

17. June 11, 200817 Summary of FERC Form 1 Analysis Prime MoverFixed ($/kW-yr)Variable ($/MWh) Combined Cycle13.001.00 Gas Turbine Aeroderivative31.008.00 Frame9.0016.00 IC Engine12.006.00

18. June 11, 200818 Comments and Suggestions?

19. June 11, 200819

20. June 11, 200820 Comparison of NPCC and Platts VOM Estimates (2006$/MWh) Prime MoverPlattsNPCC Combined Cycle1.481.34 Gas Turbine1.227.68 Aeroderivative 8.43 Frame 15.72 IC Engine0.006.23

21. June 11, 200821 Platts Indicative O&M Estimates (2006$) Prime MoverFixed ($/kW-yr)Variable ($/MWh) Combined Cycle12.801.50 Gas Turbine2.901.20 IC Engine5.200.00