1. Base Case Draft – For Comment Rocky Mountain States Sub-Regional Transmission Study December 9, 2003

2. RMATS 2 Draft - For Comment 2008 Base Case Report Overview  Objectives  Modeling approach and limitations  Key assumptions  Draft base case results

3. RMATS 3 Draft - For Comment 2008 Base Case Base Case Objectives  Focus on congestion issues that impact serving load in the RMATS sub-region  Assess the current system Existing system, plus new, viable investment already in progress Identify incidence and duration of congestion Estimate the resulting congestion costs Include several load, gas price, and hydro sensitivities Review plant performance  Illuminate opportunities for cost-effective projects Estimate the incremental value of expansion on congested paths  Identify potential modeling modifications

4. RMATS 4 Draft - For Comment 2008 Base Case Modeling Approach  Modeled with ABB Market Simulator Production cost model West-wide scope with a particular focus on the RMATS region Detailed transmission representation Calculates nodal / bus prices  LP dispatch optimization is based on: Variable O&M Fuel cost Transmission constraints  Impact of hydro and wind generation Treated as a fixed dispatch to the system After hydro and wind dispatch, the net load is passed to thermal dispatch LMP differences are dampened as hydro is included  Single test year – 2008 Existing system with incremental resources and transmission All results presented in 2004 nominal dollars  Sensitivities to come (January): loads, gas prices, hydro conditions

5. RMATS 5 Draft - For Comment 2008 Base Case Modeling Limitations  Modeling assumes a single, seamless west-wide market with no rate or loss pancaking, and no contractual impediments to trade  Not modeled: Must-run generation Unit commitment Transmission wheeling and loss charges Generator forced outages Contractual / tariff constraints Bid behavior

6. Key Assumptions

7. RMATS 7 Draft - For Comment 2008 Base Case Base Case Assumptions

8. RMATS 8 Draft - For Comment 2008 Base Case System “Balloon” Diagram

9. RMATS 9 Draft - For Comment 2008 Base Case Loads by Western Interconnect Region- 2008 Based on 2003 Load Forecast NWPP-Canada NWPP-US RMATS AZ, NM & S. NV California Mexico - CFE Summer: 58.4 Winter: 57.0 Annual GWh with Coincidental Summer & Winter Peaks (GW) Summer: 16.6 Winter: 20.3 Summer: 25.9 Winter: 32.5 Summer: 23.4 Winter: 20.3 Summer: 29.3 Winter: 26.5 Summer: 2.5 Winter: 2.3 177,493 309,324 14,425 144,990 136,828 130,743 Load: 913,803 GWh Summer Peak: 156 GW

10. RMATS 10 Draft - For Comment 2008 Base Case Loads by RMATS Area - 2008 Based on 2003 Load Forecast Annual GWh with Non-Coincidental Summer & Winter Peaks (MW)

11. RMATS 11 Draft - For Comment 2008 Base Case RMATS Resources Additions 2008 RMATS Resource Allocation Total Capacity 30,024 MW

12. RMATS 12 Draft - For Comment 2008 Base Case Generation Capacity by Fuel Type (MW)- 2008 WI Total: 201,799 MW RMATS Total: 30,024 MW

13. RMATS 13 Draft - For Comment 2008 Base Case Capacity Factors By Fuel Western Interconnect RMATS

14. 14 Draft - For Comment 2008 Base Case Renewable Resources 2008 Wind

15. RMATS 15 Draft - For Comment 2008 Base Case Hydro Generation Is Consistent with SSG-WI Sensitivity (January) Current Run

16. RMATS 16 Draft - For Comment 2008 Base Case Western Interconnect - Net Position Nameplate – Load (MW)

17. RMATS 17 Draft - For Comment 2008 Base Case RMATS- Net Position Nameplate – Load (MW)

18. RMATS 18 Draft - For Comment 2008 Base Case Gas Prices Base case assumptions:  The 2008 US Average Wellhead will be set at $4.00 / MMBtu and at $5.00 / MMBtu for a sensitivity  The basis differential will be set to match the 5th Northwest Conservation & Electric Power Plan  Currently, 2008 Henry Hub Gas Future Price $4.70/MMBtu range (nominal $)

19. RMATS 19 Draft - For Comment 2008 Base Case Typical Thermal Resource Values Are Used Per Generation Technology / Age Note: - KLG Judgement Peakers Cycling plants Aero-derivitives, Optimized for SC Larger Units, Optimized for CC Combined Cycles For peakers, it is assumed that the maintenance is deferred until a set number of hours is reached. Baseload plants are assumed to be staffed & running.

20. RMATS 20 Draft - For Comment 2008 Base Case Values consistent with SSG-WI study (% year, very approximate) Maintenance Outages Combined Cycle 7% CT 7% Coal Plant 10% Steam Oil/Gas 10% Nuclear 12% Geothermal 10% Wind* 14%* * Built into provided spread sheet that was provided to modelers for hourly pattern. Most likely maintenance outages.

21. Draft Base Case Results

22. RMATS 22 Draft - For Comment 2008 Base Case  Determined location of expected loads and resources “New” 2008 resources in RMATS are mostly gas-fired CCCTs in a region where the dominant capacity by fuel type is coal  Defined the boundaries of transmission usage and their associated costs Area LMPs show transmission limitations and development opportunities. See chart on page 24. Top 5 congested paths: –Idaho – Montana –IPP DC line –TOT 2C –Combined PACI and PDCI –Brownlee East –See charts on pages 27-31 Draft Base Case Results

23. RMATS 23 Draft - For Comment 2008 Base Case Clearing prices seen in certain RMATS areas signal the need for increased transmission to alleviate transmission congestion and levelize / stabilize the prices: (See table on page 26) –Lowest LMP for load average prices were at WAPA LC and Yellow Tail –Lowest LMP for generator average prices were at WAPA LC, IPP, Bonanza, Utah South, COw, BDVw, LRS Draft Base Case Results (continued)

24. RMATS 24 Draft - For Comment 2008 Base Case Idaho - Montana Duration Curve

25. RMATS 25 Draft - For Comment 2008 Base Case IPP DC Duration Curve

26. RMATS 26 Draft - For Comment 2008 Base Case TOT 2C Duration Curve

27. RMATS 27 Draft - For Comment 2008 Base Case Combined PACI & PDCI Duration Curve

28. RMATS 28 Draft - For Comment 2008 Base Case Brownlee Duration Curve

29. RMATS 29 Draft - For Comment 2008 Base Case RMATS Interface Path Expansion Values “Expansion values” represent the value of the next MW of additional transmission capacity Calculated as: The difference in marginal nodal / bus price at each end of the path Over a 1-year period (2004$) “Expansion values” represent the value of the next MW of additional transmission capacity Calculated as: The difference in marginal nodal / bus price at each end of the path Over a 1-year period (2004$)

30. RMATS 30 Draft - For Comment 2008 Base Case Base Case Next Steps  RMATS participants to provide comments on this draft  Obtain additional information on nomograms and new paths to monitor  Get final consensus on transmission additions  Finalize gas price assumptions  Clarify wind shaping assumptions  Run gas price, load and hydro sensitivities (January)  Finalize and present base case

31. Appendix

32. RMATS 32 Draft - For Comment 2008 Base Case 2008 LMP Prices Clearing Prices $/MWH

33. RMATS 33 Draft - For Comment 2008 Base Case Western Interconnect Expansion Values Yellow highlighting indicates RMATS interfaces All monetary amounts in nominal 2004 $