1. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 1 Title Sub Title B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Bonneville Power Administration Overview

2. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 2 FCRPS  BPA markets power from 31 Federal Hydropower plants (21 COE/10 BOR) (6,195 avg. MW; 13,934 sustained peak), Columbia Generating Station Nuclear Plant and some non-Federal hydro and wind  More than 80% of the power BPA sells is hydroelectric  BPA accounts for about 33% of the electric power consumed within the region  Canada has 15% of basin area, but provides 30% of 134 million acre feet (maf) average annual flow at The Dalles Federal Columbia River Power System (FCRPS)

3. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 3 Million Acre-Feet Average 102 MAF January - July Volume Runoff: Columbia River at The Dalles 194319471949195119551957195919611963 1965 196719691971197319751977197919811983198519871989 19911993 1995 1997 19992001 19291931 1933 193519371939194119451953 200320052007 2009 0 20 40 60 80 100 120 140 160 180 200 Columbia River Runoff Varies Widely 20102011 Final for 2011 is 142.66

4. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 4 Columbia Basin Storage Capacity

5. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 5 Introduction to BPA  1937 Bonneville Project Act Created BPA to market power at cost-based rates with public preference and build transmission system to deliver power.  1961 Columbia River Treaty Enabled 20 million acre-feet of increased water storage via three new Canadian dams and Libby Dam in Montana.  1964 Pacific Northwest Preference Act Established regional preference while authorizing construction of California intertie and surplus power sales outside the Northwest.  1974 Federal Columbia River Transmission System Act Placed BPA on self-financing basis (rates must recover costs) and provided limited borrowing authority from the U.S. Treasury.  1977 Department of Energy Organization Act Transferred BPA to the DOE as “separate and distinct” agency. Key Statutory Provisions

6. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 6 Introduction to BPA  1980 Pacific Northwest Electric Power Planning and Conservation Act Assure the Pacific Northwest of adequate, efficient, economical and reliable power supply BPA obligation to serve net load requirements of NW utilities, has authority to purchase generating output from electric generation projects. BPA to purchase conservation and renewables where cost effective BPA to provide benefits to residential and small farm customers of investor-owned utilities (residential exchange). BPA to protect, mitigate and enhance fish and wildlife affected by federal hydropower construction and operation. NW Power and Conservation Council to guide power and fish planning for the region. Key Statutory Provisions

7. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 7 Introduction to BPA  1992 Energy Policy Act Guaranteed open transmission access for wholesale transactions to spur development of wholesale energy market. Authorized FERC to order BPA to provide open, non-discriminatory access to transmission while ensuring BPA’s organic statutes continue in full force and effect.  1996 Omnibus Consolidated Recisions and Appropriations Act Raised interest rate and adjusted principal on BPA’s appropriated debt (for construction of federal power system).  2003 Omnibus Appropriations Bill Increased BPA’s borrowing authority by $700 million to a total of $4.45 billion.  2005 National Energy Policy Act Increased FERC jurisdiction over BPA (and publicly owned utilities) for transmission and power market sales. Established national Electric Reliability Organization (ERO) to establish and enforce mandatory reliability standards on all users, owners and operators of the bulk power system.  2009 American Recovery and Reinvestment Act Granted an additional increment of $3.25 billion in Treasury Borrowing Authority through the American Recovery and Reinvestment Act, bringing the total amount of bonds that may be outstanding at any one time to $7.7 billion. Key Statutory Provisions

8. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 8 BPA Business Model  BPA is one agency with respect to repaying Treasury debt.  BPA operates separate businesses for setting rates for power and transmission services.  Overlapping, but different customers for power and transmission services.  Consumer-owned utilities have preference rights to Federal power.  BPA operates as an open-access, non-discriminatory transmission carrier.  Important to note that a substantial amount of the wind generation connecting to BPA’s system for transmission service is not sold to BPA or its power services customers. One Agency But Two Businesses

9. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 9 BPA Business Model  Assure adequate, economical, efficient, reliable power supply.  Ensure transmission access with a high degree of safety and reliability.  Ensure public preference and regional preference.  Fulfill environmental and social responsibilities: Mitigate impacts, protect and enhance fish & wildlife populations affected by the federal hydropower system. Provide regional leadership in conservation and renewable resource development.  Preserve and balance economic and environmental benefits of the FCRPS.  Recover costs through rates. BPA is a self-sustaining non-profit agency. Providing Public Benefits

10. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 10 BPA Business Model  Publicly Owned Utilities: Entitled to a statutory preference and priority in the purchase of available federal power Northwest Regional Municipalities Public Utility Districts Cooperatives  Investor Owned Utilities: Entitled to the Residential Exchange Program that effectively provides an offset to IOU residential and small farm customers rates Includes Portland General Electric, Puget Sound Energy, PacifiCorp, etc.  Direct Service Industries: BPA is not required to, but may sell power for direct consumption to a limited number of existing industrial companies in the Northwest Aluminum Smelters (e.g. Alcoa, Columbia Falls Aluminum) Chemical and paper, and other metal industries (e.g. Port Townsend Paper Corporation)  Sales outside the Northwest: Public and investor owned utilities in the Southwest and California Sales, purchases, and exchanges of power via the Southern Intertie  Wheeling and other Sales: Network and point-to-point transmission services Generation integration services Conservation and environmental impact analysis services Customers

11. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 11 FY 2010 FCRPS Operating Revenues (includes interbusiness service revenues) *This information made publicly available by BPA in November 2010 and is consistent with BPA’s FY 2010Annual Report. Variation is due to rounding. Power Services 69% Transmission Services 24% Fish Credits and Other Revenues 7% Revenues (millions) Power Marketing Services$2,11369% Transmission Services$73824% Fish Credits and Other Revenues$2047% $3,055*100 % FCRPS Revenues by Service 2010 Financial Structure

12. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 12 *This information made publicly available by BPA in November 2010 is consistent with BPA’s FY 2010 Annual Report. Any variation is due to rounding. Power Sales Other Revenues 5 3 2 1 Sales Outside the Northwest $243 million Public and investor-owned utilities in the Southwest and California Direct Service Industries $81 million Publicly Owned Utilities $1,775 million Northwest Regional Municipalities Public Utility Districts Cooperatives Investor-Owned Utilities $134 million Transmission Services $771 million Wheeling and other sales Fish Credits and Other Revenues $172 million 6 FY 2010 Revenues by Customer Groups 4

13. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 13 Bonds Issued to Treasury $1,616M Wtd. Avg. Int. 4.7% Corps of Engineers Appropriations $2,566M Wtd. Avg. Int. 6.1% Energy Northwest $4,519M Wtd. Avg. Int. 5.2% Bureau of Reclamation Appropriations $629M Wtd. Avg. Int. 6.9% Generation $9,010 million Transmission $3,656 million Lower Snake Fish and Wildlife $232M Wtd. Avg. Int. 7.1% Bonds Issued to Treasury $897M Wtd. Avg. Int. 3.7% *This information made publicly available by BPA January 28, 2011 and is consistent with BPA’s FY 2010 Annual Report. Any variation is due to rounding. Other Non-Federal Projects $450M Wtd. Avg. Int. 4.6% BPA Appropriations $404M Wtd. Avg. Int. 7.2% Other Non- Federal Projects $167M Wtd. Avg. Int. 5.0% Energy Northwest $1,186M Wtd. Avg. Int. 5.2% as of 9/30/2010 $12,666 Million 5.4% weighted average interest Total Liabilities to Federal and Non-Federal Parties Federal Columbia River Power System

14. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 14 From 2009 EIA State Level Data (rates shown in cents per kilowatt-hour) CT 20.33 ME 15.65 NV 12.86 CA 14.74 IL 11.27 MS 7.97 MA 16.87 NJ 16.31 OR 8.68 MT 8.93 ID 7.80 MD 14.98 AZ 10.73 NH 16.26 NY 17.50 WV 5.45 VT 14.90 FL 12.39 OH 10.67 TX 12.38 CO 10.00 NM 10.02 UT 8.48 WY 8.58 OK 8.49 NE 8.52 NC 9.99 MS 10.22 MN 10.04 AR 9.14 MO 8.54 WA 7.68 VA 10.61 BPA STATES KY 8.37 PA 11.65 WV 7.90 Ranking of Northwest States Idaho: 3 Washington: 4 Oregon: 14 Montana: 15 Average Retail Electricity Rates by State LA. 8.10

15. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 15 FY 1984-2011 Wholesale Energy – Cost Components ($/MWh) (2008$)

16. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 16 Firm Energy Resources 2010 BPA White Book; November, 2009

17. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 17 Secondary Revenue from Surplus Sales Net secondary revenue and net sales figures are not final audited values. They are derived from committed transaction data from BPA's Trade Management System, and do not reflect what was actually delivered and billed. Note: 2002-2007 secondary revenues increased by sales of additional power supplied under contracts that have since expired

18. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 18 Energy Efficiency is the priority Resource

19. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 19 PNW Energy Efficiency Achievements Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Almost 4,300 aMW of Savings.

20. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 20 5-Year Regional Public Power Energy Efficiency Targets EE to be accomplished through programs, market transformation, and codes/standards.

21. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 21 Federal Columbia River Transmission System  BPA owns and operates 75% of the Pacific Northwest’s high voltage electrical transmission system.  The system includes more than 15,000 miles of transmission line and more than 200 substations.  The system networks across 300,000 square miles in Oregon, Washington, Idaho, Montana and sections of Wyoming, Nevada, Utah and California.  The system enables a peak loading of about 30,000 megawatts and generates about $690 million a year in revenues from transmission services.  BPA’s Transmission Services operate under an Open Access Transmission Tariff based on FERC’s pro forma tariff as a non-jurisdictional entity.  BPA operates to comply with Electric Reliability Organization standards.

22. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 22 BPA’s high-voltage transmission system  BPA owns and operates 75% of the Pacific Northwest’s high voltage electrical transmission system.  The system includes more than 15,000 miles of transmission line and 285 substations.  The system networks across 300,000 square miles in Oregon, Washington, Idaho, Montana and sections of Wyoming, Nevada, Utah and California.  The system enables a peak loading of about 30,000 megawatts and generates more than $700 million a year in revenues from transmission services.  BPA’s Transmission Business Line operates under an Open Access Transmission Tariff based on FERC’s pro forma tariff as a non- jurisdictional entity. Federal Columbia River Transmission Systems

23. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 23 Regional Transmission Combined Transmission System

24. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 24 BPA Fish & Wildlife Objectives  Implement and/or advocate for scientifically based, cost- effective strategies that mitigate for FCRPS (hydro) impacts on fish and wildlife  Deliver public benefits of Columbia River: negotiate and manage mitigation work to achieve best environmental result and dollar value  Advance policy solutions through collaborative working relationships with Regional Entities e.g. Power Council, Tribes, Fish & Wildlife Agencies, Customers, Environmental Groups and other parties

25. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 25 1980 Northwest Power Act “The Administrator shall use the Bonneville Power Administration Fund to protect, mitigate, and enhance fish and wildlife to the extent affected by development and operation of any hydroelectric project of the Columbia River and its tributaries.” Endangered Species Act Biological Opinions “Each Federal agency shall….insure that any action authorized funded, or carried out by such agency is not likely to jeopardize continued existence…of any endangered species or threatened species…” Non-Listed FISH and WILDLIFE Listed ANADROMOUS FISH RESIDENT FISH WILDLIFE Although BPA has fish and wildlife responsibilities under the Endangered Species Act and the Northwest Power Act, in many cases, both responsibilities can be met in the same set of actions. Fish and Wildlife Legal Mandates Treaty and Non-Treaty Tribal Policy BPA will consult with the Tribal governments prior to BPA taking actions, making decisions, or implementing programs that may affect Tribal resources.

26. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 26 Percentage of Spending Categories Allocated to F&W FY 2010-2011 Forecast ($ in Millions ) UNSLICED 50-year Annual Average Hydro Operations Effects (Power Purchases & Foregone Revenues) Fish and Wildlife Integrated Program NWPCC – Annual Average US Fish & Wildlife Service – Annual Average Lower Snake Compensation Plan Corps of Engineers O&M – Annual Average Reclamation O&M – Annual Average 100% 50% 100% ~25% ~7% Depreciation & Interest on COE / Reclamation / USF&WS Capital F&W Investments (based on Plant in Service) Depreciation & Interest on BPA Direct Program Capital F&W Investments 1/ FY 2012-2013 data is based on the proposed IPR spending levels as of May 13, 2010. Total $ FY 2007-2009 Actuals ($ in Millions ) FY 2012-2013 Forecast ($ in Millions ) Total Annual Average Cost of BPA Fish & Wildlife Actions 1/

27. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 27 Wind Generation Capacity in the BPA Balancing Authority Area

28. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 28 Wind Generations is Variable Red = Load Blue = Wind Generation And Unrelated to Load

29. B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 29 Climate Change Actions  Commitments under the 2008/2010 BiOps are setting the stage for better understanding of climate change impacts and responses.  Existing BiOp and F&W Program actions in the tributaries and estuary are helping to mitigate for climate change through protection of riparian areas, creation of salmon refuges, and water acquisition to protect instream flows.  The 2010 Supp. BiOp calls for measures to monitor climate change impacts and target fish and wildlife habitat efforts to address those impacts.  BPA’s “climate change adaption plan” approved by agency executives July 2012 to prepare for potential impacts of climate change on our business operations.