1. Rocky Mountain Area Transmission Study RMATS Economics Reference Cases Economic Comparisons Distribution of Economic Gains and Losses RMATS Steering Committee August 5, 2004

2. 2 RMATS Economics (08/06/04) Overview  Finalize IRP-based reference case Modeling issues with excessive cycling – distorts distribution of gains and losses Three solutions considered: 1.Reduce wind dispatch 2.Relocate Wyoming wind resources 3.Medium build transmission  Finalize economic comparisons Revised reference cases: IRP-based and All-gas Original reference case now gone  Finalize distribution of economic gains & losses

3. Rocky Mountain Area Transmission Study Finalized IRP Reference Case

4. 4 RMATS Economics (08/06/04) IRP–based Reference Case The problem: excessive cycling of JB & Naughton coal resources 91.1% CF 92.2% CF (MAX) 88.8% CF 89.9% CF (MAX) Bridger cycling 12% of time Naughton cycling 9% of time Solutions to prevent plant cycling in ABB Market Simulator: 1. Reduce wind output - recommended 2. Relocate wind – but this deviates from IRPs, and requires additional analysis on transmission to integrate wind 3. Add transmission – but this is uneconomic if only for wind

5. 5 RMATS Economics (08/06/04) Wind Reduction at Miners (SW Wyoming) To minimize excessive cycling on thermal units Capacity factor change from 38.7% to 25.9% Modifications: No more than 100MW from 1/1/2013 – 3/1/2013 No restrictions from 3/1/2013 - 6/24/2013 No more than 100MW from 6/24/2013 - 9/15/2013 No restrictions from 9/15/2013 – 11/15/2013 No more than 300MW from 11/15/2013 – 12/31/2013 Full wind output is equal to Blue + Yellow

6. 6 RMATS Economics (08/06/04) Wind Reduction at Railroad (N. Utah) To minimize excessive cycling on thermal units Capacity factor change from 33% to 22.5% Modifications: Reduce wind output by 200MW from 6/15/2013 – 10/15/2013 Full wind output is equal to Blue + Pink

7. 7 RMATS Economics (08/06/04) Cycling results in the modeling Excessive cycling is greatly reduced by suppressing wind dispatch 92.1% CF 92.2% CF (MAX) 89.8% CF 89.9% CF (MAX) Bridger cycling 3.5% of time Naughton cycling 1% of time

8. 8 RMATS Economics (08/06/04) Coal - Wind Integration IssuesObservations  Wind farm sizing  Location of wind farms  Wind farm output variability and coal plant ramp rate  IRP-based reference case: wind operation is at 22 – 25% capacity factor  Capacity factor of ~30% is perhaps breakeven  Coal plant ramp rate is 5-15 MW/min

9. 9 RMATS Economics (08/06/04) System Cost Changes $ millions IRP- based case (light tx build) IRP- based case (light tx build - with wind suppressed) Difference WI Production Costs$19,988$20,046$58 Rocky Mountain Area Load Cost delta from Rec 1 $132$5($128) Rocky Mountain Generator Margin delta from Rec 1 $475$294($181)

10. 10 RMATS Economics (08/06/04) Distribution of Economic Gains & Losses IRP-based reference case Before: After:

11. Rocky Mountain Area Transmission Study Economics

12. 12 RMATS Economics (08/06/04) Antelope Mine Dave Johnston LRS Cheyenne Tap Ault Green Valley Miners Jim Bridger Naughton Ben Lomond Midpoint Recommendation 1 Transmission Projects Broadview Colstrip Added Series Compensation Only Taft Montana Upgrades Bridger Expansion New WY- CO lines Treasureton Garrison Townsend Borah West Path C West of Naughton West of Bridger Black Hills to C. Wyoming C Wyoming to LRS TOT 3 TOT 7 TOT 4A West of Colstrip West of Broadview Montana to NW 500 Wind 210 Gas500 Coal 500 Wind 1150 Wind 700 Coal 359 Coal 50 Wind 250 Coal 280 Wind 125 Wind 575 Coal 100 Wind 575 Coal 140 Gas 250 Wind Added 345 kV Line Modified Interface Added Resource Bridger E

13. 13 RMATS Economics (08/06/04) Economics Comparison Table

14. 14 RMATS Economics (08/06/04) Production Cost (VOM) Comparison Alt 1- “light” Tx build All Gas Reference Case Original Reference Case

15. 15 RMATS Economics (08/06/04) Distribution of Economic Gains & Losses Recommendation 1 vs IRP-Based Reference Case Recommendation 1 vs All-Gas Reference Case Load Cost is hourly demand (MWh) at each load node x hourly LMP ($), summed for 2013 Generator Gross Margin is hourly generation (MWh) at generation node x hourly LMP, summed for 2013 (generator revenue), less annual fuel & other VOM costs

16. 16 RMATS Economics (08/06/04) Distribution of Economic Gains & Losses $ Millions

17. 17 RMATS Economics (08/06/04) Economic Gains & Losses Recommendation 1 vs IRP- Based Case

18. 18 RMATS Economics (08/06/04) Economic Gains & Losses Recommendation 1 vs All Gas Case

19. 19 RMATS Economics (08/06/04) Tesla Table Mtn. Grizzly Ashe Bell Taft Missoula Great Falls Broadview Ringling Colstrip Ant Mine Dave Johnson LRS Cheyenne Tap Ault Green Valley Miners Jim Bridger Naughton Grand Junction Emery Mona IPP Red Butte Ben Lomond Borah Kinport Midpoint Crystal Market Place 500 kV 345 kV Adelanto Option 1 Option 2 Option 4 Option 3 Recommendation 2 Longer-term export options Added Phase Shifter Noxon Hot Springs This recommendation requires two 500 kV lines for export Inc. DC Options 2-4 Option 1 Only Consistent with Rec 1

20. 20 RMATS Economics (08/06/04) Distribution of Economic Gains & Losses Recommendation 2 vs IRP-Based Reference Case Recommendation 2 vs All-Gas Reference Case Load Cost is hourly demand (MWh) at each load node x hourly LMP ($), summed for 2013 Generator Gross Margin is hourly generation (MWh) at generation node x hourly LMP, summed for 2013 (generator revenue), less annual fuel & other VOM costs