1. 1 Bradley Nickell Director of Transmission Planning Connecting Policy and Wind Energy Investment Iowa State University WESEP-REU June 12, 2012

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3. 3 About WECC Non-Planning Functions Compliance Monitoring and Enforcement Standards Development Reliability Coordination Market-Operations interface Operator training WREGIS Planning Functions Loads and Resources Assessments Reliability studies Transmission Expansion Planning WECC’s mission is to promote and foster a reliable and efficient bulk electric system

4. 4 Regional Transmission Expansion Planning (RTEP) Completed WECC’s first 10-Year Regional Transmission Plan In the 2 nd year of the biennial planning cycle Preparing for the creation of Interconnection-wide transmission plans in 2013 Regional Transmission Expansion Planning Where are we today? Understanding Impacts of decisions, not making determinations on what should be done

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6. 6 What’s driving the policy? Cost and Risk About Policies Parting thoughts – The long KISS The Breeze Behind Wind Energy How Policy Impacts Investment Decisions

7. 7 Environmental concerns o Emissions o Land use Job creation o Manufacturing and construction Public sentiment Money What Drives Energy Policy?

8. 8 Cost – Pricing the known o Equipment, financing Risk – Pricing the unknown o Future cashflows, O&M, competition o Time - changes in costs/policies between investment decision and on-line dates Policy impacts both o Equipment demand o Future tax treatment “Cost is cheap, Risk is expensive” Cost and Risk Monetizing the Future Today

9. 9 Create markets o Renewable Portfolio Standards (RPS) Reduce costs o Credits/loans/rebates Increase costs for alternatives o Emission limitations/costs Impact risk (real and perceived) Renewable Energy Policies

10. 10 Requires renewable energy procurement o Vary in complexity o Driven by multiple goals o Directed at some/all retail load-serving entities Attributes o Cost caps/off-ramps o Technology/ownership set-asides o Geography restrictions/incentives Renewable Portfolio Standards (RPS) Creating the Market

11. RPS Policies Renewable portfolio standard Renewable portfolio goal www.dsireusa.orgwww.dsireusa.org / May 2012 Solar water heating eligible * † Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources WA: 15% x 2020* CA: 33% x 2020 NV : 25% x 2025* AZ: 15% x 2025 NM: 20% x 2020 (IOUs) 10% x 2020 (co-ops) HI: 40% x 2030 Minimum solar or customer-sited requirement TX: 5,880 MW x 2015 UT: 20% by 2025* CO: 30% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* MT: 15% x 2015 ND: 10% x 2015 SD: 10% x 2015 IA: 105 MW MN: 25% x 2025 (Xcel: 30% x 2020) MO: 15% x 2021 WI : Varies by utility; ~10% x 2015 statewide MI: 10% & 1,100 MW x 2015* OH : 25% x 2025 † ME: 30% x 2000 New RE: 10% x 2017 NH: 23.8% x 2025 MA: 22.1% x 2020 New RE: 15% x 2020 (+1% annually thereafter) RI: 16% x 2020 CT: 27% x 2020 NY: 29% x 2015 NJ: 20.38% RE x 2021 + 5,316 GWh solar x 2026 PA: ~ 18% x 2021 † MD: 20% x 2022 DE: 25% x 2026* DC: 20% x 2020 NC : 12.5% x 2021 (IOUs) 10% x 2018 (co-ops & munis) VT: (1) RE meets any increase in retail sales x 2012; (2) 20% RE & CHP x 2017 KS: 20% x 2020 OR : 25% x 2025 (large utilities )* 5% - 10% x 2025 (smaller utilities) IL: 25% x 2025 29 states + DC and PR have an RPS (8 states have goals) 29 states + DC and PR have an RPS (8 states have goals) OK: 15% x 2015 PR: 20% x 2035 WV: 25% x 2025* † VA: 15% x 2025* DC IN: 10% x 2025 †

12. 12 Tax Credits o Federal – PTC/ITC o State Loans o Guarantees o Reduced rates Direct payments o Grants o Rebates Financial Incentives Reducing the Cost

13. Tax Credits for Renewables www.dsireusa.orgwww.dsireusa.org / March 2012 Corporate tax credit(s) only Personal + corporate tax credit(s) Notes: This map does not include corporate or personal tax deductions or exemptions; or tax incentives for geothermal heat pumps. Personal tax credit(s) only Puerto Rico DC 24 states offer tax credits for renewables

14. 14 10-year – understanding impacts of near-term decisions (bottoms-up) 20-year – understanding drivers of potential energy futures (top-down) The Plans tell the story of how they are connected 2013 10- and 20-year Transmission Plans Connecting the Dots How might the Western Interconnection need to change to accommodate changes in the supply and demand for electric energy?

15. 15 Parting Thoughts The Long KISS Long-term policies reduce risk o Stabilize demand o Assure incentives Simple policies reduce cost o Allow for market-based, least-cost solutions o Foster creativity

16. 16 Questions Bradley Nickell Director of Transmission Planning Western Electricity Coordinating Council 155 North 400 West Salt Lake City, Utah 84103 801.819.7604 bnickell@wecc.biz All information on the WECC 10-Year Regional Transmission Plan may be found at http://www.wecc.biz/10yrPlan.http://www.wecc.biz/10yrPlan