NHA /NWHA Regional Meeting October 23, 2008

Potential for
New and Incremental
Hydro Development
In the Northwest

Panelists

Suzanne Grassell, Governmental Affairs Manager, Chelan County PUD

Bruce Meaker, Senior Manager of Regulatory Affairs, Snohomish County PUD

Elizabeth Thomas, Partner, K&L Gates

Stan Hayes, Vice President, MWH (Facilitator)

Drivers for Development

Demand

Prices

Age & Condition

Climate Change

Demand

BC Hydro – starting $5 billion investment program – new hydro, redevelopment, IPPs

Reduce Imported Energy

Current Spot Market Prices

Western Electricity Prices, $ per MWhr Week's End: October 13 - 17, 2008

Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 8 - 953 8 - 315
Mid-Columbia 47 - 53 37 - 46
COB 54 - 58 39 - 47
NP 15 50 - 62 40 - 47
SP 15 38 - 54 26 - 40
Palo Verde 31 - 48 21 - 36

Incremental Development

7,000 + MW of generating equipment upgrades currently in progress in NW

3% efficiency improvement provides over 200 more MW

Unit Capacity Increases of 20% or more

New Plants @ Existing dams

PSE – Lower Baker

Grant County PUD – Cle Elum

EWEB – Blue River

New Plants @ New Dams

Need for Additional Water Storage for Irrigation and Domestic Use

Hydro Addition is a Natural Adjunct to New Storage Projects

Annual Release Pattern can be challenging for Hydro

New Development



Active FERC Preliminary Permits as of October 15, 2008

Climate Change

No Greenhouse Gas Emissions (or less)

Carbon Credits (Chicago Climate Exchange)

Firm Up Wind or Other Alternative Energy Sources

Recent/Proposed NW Projects

End