1. Transmission for a 33% RPS Keith E. Casey Vice President Market and Infrastructure Development California ISO The Independent Energy Producers Association 29 th Annual Meeting South Lake Tahoe, California September 22-24, 2010

2. Planning for a 33% RPS  Where are we and what is left?  How do we plan effectively? Slide 2

3. Slide 3 Calculating the “33% RPS Net-Short” Numbers based on CTPG Phase 2 Study

4. Approved transmission projects could potentially achieve the 33% RPS if fully utilized. Slide 4 Net-Short = 53 TWh

5. Slide 5 Base case plan will heavily utilize new transmission facilities.  Base case – Generation projects with approved PPAs or in CAISO interconnection queue.

6. Approved transmission provides a base case for evaluating supplemental needs.  Alternative resource scenarios might be desirable if  Reduce generation procurement costs  Can be developed more expeditiously (siting/land-use issues)  Provide integration benefits through regional diversity  Additional resource scenarios include:  Higher Out-of-State scenario (e.g., RECs)  Higher distributive generation scenario  Potential benefits of different resource procurement scenarios needs to be weighed against any incremental transmission costs. Slide 6

7. Next Steps  December 2, 2010 - ISO stakeholder meeting to review draft results of its 33% RPS transmission studies.  January 2011 – Draft report issued  January 2011 (or sooner) – FERC Order on CAISO revised transmission planning process.  March 2011 – ISO releases its 2011 Annual Transmission Plan Slide 7

8. California ISO proposed comprehensive revisions to its transmission planning process.  New criterion for “policy-driven” transmission to achieve 33% renewable energy by 2020  Statewide planning approach  Whole system planning instead of single-project approach for a comprehensive transmission plan  Comprehensive planning process for addressing:  Reliability,  Generation interconnections,  Policy-driven (i.e., RPS mandates), and  Economics Slide 8

9. FERC notice of proposed rulemaking regarding transmission planning and cost allocation  Five areas of “deficiency”  Lack of requirement for regional plan  Lack of consideration for needs driven by federal and state policy  Obstacles to non-incumbent transmission providers  Lack of coordination between regions  Deficient cost allocation methodologies Slide 9