Benton PUD Credit Exposure by Sector as of November 30, 2018I Bank 54,247,238

r lou s71,604

r Marketer/Merchant 5552,140

r RTO S0

s%

I lntegrated Oil & Gas Companies 5284,052

r lou Affiliate s3,010

r Mun¡/Coop S263,182

L0%

5%

79%

Benton's total exposure (principal and agent) is 55,421 ,226

Benton PUD Credit Exposure by Sector as of December 31, 2018r Bank 5324,052

r tou s47,646

r Marketer/Merchant S1,464,555

r RTo S0

r lntegrated Oil & Gas Companies 582,893

¡ IOU Affiliate 566,620

r Muni/coop $324,964

L4% L4%

4%

2%

3%

63%

Benton's total exposure (principal and agent) is S2,310,729

Unrestricted Reserves and Days Cash on Hand (DCOH)

Unrestricted Reserves with forecasted DCOH

December 2018 Treasurer's Report

øco

{,}

S4o.o

S¡s.o

$30.0

s2s.0

s2o.o

s1s.o

s10.0

$s.o

s-

$¿o.o

s3s.0

s30.0

s2s.0

s2o.o

S1s.o

s10.o

Ss.o

90 DCOH

s3s.s Total Reserves: 956.4 millionTotal DCOH: 1¿14

Estimated 2018 S per l DCOH; $394k(2018 ectual $ per I DCOH hlgher thanprevioulsy forecasted due to Q4 2018hedg¡ng act¡vlt¡es)

1 DCOH

s0.3

UndesignatedReserves

32 DCOH

Srz.s

7 DCOH

sr.6

10 DCOH

S¡.9

Pôwer MarketVolatility

10 DCOH

S3.e

Power MarketVolatility

4 DCOH

MinimumOperating Reserves

Bond lnsuranceReplacement

Special Capital Customer Deposits

Unrestricted Reserves2019 Redistribution of Undesignated Reserves Recommendation

90 DCOH

s3s.2Adiusted to new 2019

forecasted DCOH amount

7 DCOH

sz.e

Total Resewes: $s6.¿ mlllionTotal DCOH: 1¡14

Estimated 2019I per l DCOH: $391k

6c

Ê

=!1.

Net Change: +$3ülkCapltal Projece -$SOOk

Large CIAC Prepay (work tobe done in 20191:98(X)k

32 DCOH

$ir.c

s- n

lncrease $¡OOf tordeposits

92fl1k Large Customer

$35k Grorilth$OSf ell Customers

s, DcoH

s1.s

MË¡O DCOH

So.o

Undes¡gnatedReserves

MinimumOperating Reserves

Bond lnsuranceReplacement

Special Capital Customer Deposits

r/7/2019

Unrestricted Reserves and Days Cash on Hand (DCOH)

Unrestricted Reserves with forecasted DCOHDecember 2018 Treasurer's Report

øc.9

={r}

s40.0

Sss.o

s30.0

52s.o

S2o.o

Srs.o

s10.0

Ss.o

S4o.o

s3s.0

s30.0

Szo.o

Srs.o

S1o.o

90 DCOH

S¡s.s

MinimumOperating Reserves

Bond lnsuranceReplacement

10 DCOH

S¡.9

Power MarketVolat¡l¡ty

Total Reserves: 556.¿ millionTotalDCOH: 1¡t4Estimated 2018 S per l DCOH: S394k(2018 actual$ ær l DCOH higtrerthanprevioulsy forecasted due to Q4 2018hedglng act¡v¡t¡esl

32 DCOH

$12.s

1 DcoH

Sr.oSo.¡

SpecialCapital CustomerDeposits UndesignatedRese¡ves

Totat Reserues: 956.c m¡llionTotalDCOH: 1/t4Estlmated 2019I per I DCOH: $391k

7 DCOH

st.6

10 DCOH

S¡.9

Power MarketVolatility

lncrease $gOOk fordeposlts

$2mk Large Customer$35k Growth

S65k El! Customerc

5 DCOH

lnrd

1 pcQH

O DCOH

s0.0

s-

90 DCOH

$¡s.z

Unrestricted Reserves2or9 Redistribution of undesignated Reserves Recommendation

Adiusted to new 2019forecasted DCOH amount

Net Change: +$300kcapital Pfof ects: -ssoot

Large CIAC Prepay (work tobe done ¡n 20191:9800k

52s.o

ø0

ã{^

32 DCOH

Sli.8

Ss.o7 DCOH

5i..s,{

.\..diìi!"I

St.s

MinimumOperating Reserves

Bond lnsuranceReplacement

SpecialCapital CustomerDeposits UndesignatedReserves

s-

r/7/2079

Average Benton PUD Residential customer Load profilevs.

Rooftop Solar Energy Production(Assumes 11.53 kw Solar System Des¡tned to Offset 1OO% of Annuat Customer Energy Consumpt¡on)

2,500

2,000

1,500s=-!

Eocl¡¡

1,000

s00

0

February March April May June

I Average Residential Customer kWh Load

July August September October November December

r 11.53 kW Solar Energy Production

January

IMMEDIATE SERVICE RESTORE: The District will reconnect electric service followingdisconnection for nonpayment when the required reconnect amount has been paid in full.Once payment is received, electric service will be restored immediately at service locationswhere remote disconnect/reconnect meters are installed. Benton PUD staff will be dispatchedto reconnect electric service to locations where non remote meters are installed.

When payments made on accounts disconnected for nonpayment satisfy the requiredreconnect amount, customers will no be charged a reconnect fee, unless they have a non-remote meter and have already required reconnect after hours in the previous 1-2 months

A customer who contacts the after-hours call center and is unable to make a payment butagrees to pay the amount required to reconnect in full, by noon the next business day, will becharged an after-hours reconnect fee.

By making a payment in the amount required to reconnect service, the customer acknowledgesthat the electric service will be immediately reconnected upon payment. The customer furtheracknowledges that the location where service is being reconnected is in a safe condition,authorizes the immediate reconnect, and releases Benton PUD from liability relating to therecon nect.

See Fee Schedule for a list of fees

FEE SCHEDUTE

Buslness Hours: 8:30 AM - 5:00 PM Monday-FridayAfter-Hours: 5:00 PM - 8:30 AM Monday-Friday, Weekends, Holidays

CONN ECTIDISCONN ECT SERVICE:

Start Seruíce - Business Hours

Sta rt Se ru ice - Afte r- Hou rs

Dísconnect for Non-Payflnstdlldt¡on of Load Límiting Device

Reconnect following Disconnect for Non-Pay/Removol of Load Limiting Ðevice - Business Hours

Reconnect following Ðísconnect for Non-Pay/Removøl ol Loød Limíting Device - After-Hours, Fírst

lnstance in 72 Month Period¡ Full reconnect amount paid at time of reconnect

Reconnect followíng Dísconnect for Non-Poy/Removal of Load Limiting DevÍce - After-Hours, Muttíplelnstønces ín 72 Month Period

¡ Full reconnect amount paid at t¡me of reconnecto Multiple after-hours reconnects during a 12 month period may incur a fee - see section on

I m med iote Se rv ice Resto re

Reconnect followíng Disconnect for Non-Pøy/Removal of Loød Límitíng Device - After-Hours¡ Reconnect amount paid by noon the next business day

MISCELTATIIEOUS:

S1s

Sgo

s1s

No charge

No charge

$e0

Seo

Advanced Meter Opt OutOpting out requires monthly manual meter reads

AppealHeoringApplies when customer fails to attend a scheduled hearing they requested

Customer Power Outoge - Business Hours

Customer Power Outdge - After-Hours

Home Energy Tune-lJp - Fírst Aud¡t ¡n 72 Month PeriodRequested investigative audit of home energy use

Home Energy Tune-Up - Multíple Audíts in 72 Month Períod

Requested investigative audit of home energy use

¡ First audit during a 12 month period is free of charge; additional audit(s) during a 12 monthperiod may incur a fee

Løte Fee

All billings issued by the District are subject to a monthly interest charge

Load Limitíng Device Test - Field Test duríng Business Hours

Applies if tripping due to customer act¡ons

Load Limíting Devíce Test - Fíeld Test during After'HoursApplies if tripping due to customer actions

M ete r Tampe ring/Se ll Con ne ctío n

Meter TestApplies if calibration is within ! 05% - see section on Meter Testing

Multi-Tenønt Meters - Field Vísit

Returned PaymentsCheck or electronic payment

Urgent Notíce

S15/month

S7o

No Charge

$120 or actual cost

No charge

S4e.ss

1% of billing

s2oo

5300 or actual cost

$2s

52s0 or actual cost

s2s

ss0

s2

L/8/2o1-e

Benton County Demographics

. DisabilityDefinition

. Populatio n at75% FPI

Low lncome Discount - Veterans/Active Military

District Low lncome Weatherization Funding

BPA Weatherization Fund

Summary

I ¡

Low lncome Programs Follow-Up

Benton County Demographics'

Counly Populatrorr TB7,519

lndivlduals w¡th a Dlsabll¡ty

Low lncome2 with a Disability (24.6% of d¡sabled poputation)

24,375

5,996

Senior Veterans

Veterâns with a Disabll¡ty

Low lncome3 Veterans (4.8% of veteran populationl

All Low lncomeP (17.4% of counry populârlonl

lAll ddto colculotedfrom the USCensusBurcau Ameilcon Community Su¡vey 9-Yeü Estlûdt$2072-20162gdsed on 725% ofFedetalpovettyLevel (FPL), D¡stdctlow incoñeprcgtumsgo up to 225%olFPL,3Bdsed on 7ú94 oÍ Fedetol Povettl Level (FPL),

sen¡ors (age 55 sr olderl 24,776

5,978

3,470

634

32,720

I

t/8/2oLs

Census Bureau American Community SurveyDisability Data

tr Benton County demographics indicate 13% of individuals have a disability

o Survey data used self reported answers in the following areas:

o Vision, hearing, mobility, and cognitive functioning

s Abilityto perform self-care and independent living

tr As a reminder, the District's low income disablecl discounI requiles one o[ thefollowing to qualify:

s Disabled parking permi$ or,

g Certification ¡ndicating customer is a recipient of Social Security Disability(SSDI) or Supplemental Security lncome (SSl); or,

a Medical professional validates disability

Benton County Population2 -75o/o of FPL

50% FPL1 75%FPL2 LOO%FPLL L25%FPLT

o Senior/Disabled individuals at 75% FPL

o Non-Senior/Non-Disabled individuals ar.75%FPL

tActuol bosed on US Census Eutequ Ameñcdn Coññuníty Sutvey - s-Yeú Est¡motes 2072-2U6ã

669 9t7

2,t94 3,608

s-Yeor Estl mat$ 2072-20762Qstlñoted bosed on US Census Buîedu Ameilcon

4,525

14,4L6

2l.,8t0

1,7t0

4,802O¡sãbledPopulation 24,175

Senlor Populãt¡on 24,776

TotalPopulation 187,519 10,584 18B4r 3e680

2,502

1996

2

Ll8/zoLe

Discussion Only:Expand Low lncome Discount Program at75% of FPL

Add 30% discount for all low income customers + 5762,637

=5L,369,7t4. Based on est¡mated 2,153 additional customers enrolling for discountsl

Arrnr¡,¡l '% i.)rs[oui.fl! tof)r,,ror-rnt! lìei¿rl 5,¡ii.::

L.047%

of737

= $607,O77

Add 30% discount for Senior/Disabled customers

2017 Discounts

o.498%

o.464%

I Es{mdted bdsed on cuûênt D¡strlct Low lncome D¡scount enrcllment dato dndEs{ñotes 2012-2016US Censut Euaedu Ameilún

+ 544.380

=$65t,457

Recommendation:Add Veteran/Act¡ve Military Discount

o Add a low income Veteran/Active Military discount

o Align with existing senior and disabled discounts

o Potential added discount amounto Based on estimated 142 Veterans enrolling for discountslo Total discounts would increase from s607,077 to s647,292

o Potential ratio of discounts to retail salesE Dlscounts are currently 0.464% of retail sales

SonlorÉ%1509ú of FFL v€tann/Atîlvê MiltaryD¡sbled

vst€rdn/Actlve MfÍtrryDlsblrdS€niór759f200* df ËPL

V€t€nû/Arllv€ ilÍh¡ryD16äbledS€ñlorIM22Ë*úFpL

s40,215

;

0.495%

I Esümoted bdsed on currcnt Dlstr¡ct Low lncome Dlscount entollment doto ondUs Census Buredu Añet¡@n

3

Ll8/zOLe

H

BPA Weatherization Fund

Commission Discussion Follow-Up from t2/8/L8

u lncrease BPUD Low lncome Weatherization by SfOOtls Would help about 25 low income customers annually

r Benefits those who can't afford to participate

r Costs about 7 times more than Non Low lncome programs

tr Lower FPL requirement from 200%to I75%?

tr Would help about 3 less customers annually

4

Ll8/z0re

District 2016-2018 Low lncome Weatherization Program

Number of Recipients by FPL

low lncome Customerc by Federal Poverty Level

."...'* ^-C ,n,/' d'C --'t. t-.^dn x r"¿"ol Porrefi lenel

ãare37% of these 71 customers

øLoEoIt(J

ox

40%

3s%

30%

2s%

20%

t5%

t0%5%

0%

t

BPA S5.3M Low lncome Energy Efficiency Program

tr Created in 1983 followíng 1981 Power Actg Ensures Low Income residents benefit from

conservation programs

tr updated 1986 to tie to Power Plans

¡ BPA Low lncome Energy Efficiency Program (LIEE)

r $5.3 million annual program over BPA territoryr Co-funds DOE Weatherization Assistance Program (WAP)

s Distributed through state and tribal governments

r Locally - Benton Franklin Community Action Connections

5

Ll8/zOLs

BPA s SS.Stvl Program Benefits to District Customers

n Provides resources for replacement or repairs

o Heating and coolingg Windows, insulation, doors

o Health and safety measures

E Customer education

n Can be leveraged with District fundsq Annual SAOk CAC allocation

D Questions/comments?

El Motion - Veteran/Active Military Discount

rI

Summary

6

INet Meteri g UpdoteYour Trusted Energy Porlner

Jqnuory 8, 2Ol9

SolarûonnectionsBEÜ]OI PAD t

AgendoE

tr Recommendqtion

n Overview of Net Metering

tr Overview of Woshington Stote lncentive Progrom

tr Options After August

tr Net Metering (retoil rote)

n Move to ovoided cost (wholesole rote)

n Summory

Recommendoti on

n Continue Net Metering Progroms Until August l, 2019,or until o new Net Metering Cop of 'l .5 percent of theDistrict's I 996 peok demond (5,670 kilowotts) is

reoched; whichever comes firstu Demonstrotes being our customers Trusted Energy Portner

u Allows time to ossess 2019 legislotion

o Allows time for qnolysis of Avoided Cost Rqte

u Allows time to build/test billing system for Avoided Cost Rote

Customers receive retoil credit for solor generotion

Net Metering Requiremen tt /H¡sto ry

tr RCW 80.ó0.020 required Net Metering 0.5o/o ofDistricts I 996 peok demond

tr -1,890 KW

n Moy 8, 2Ol I commission opproved odditionol O.5o/o

Net Metering Cop

tr - 3,780 KV/

Customer Generotion ConnectionsrSohr Panei

tustomerLçads

IrCustsmerElectrical SeryicePanel

Seruics r¡eterrilhbi-dircctftrrrdKWH regislem

Lodrsbþ ACdisËtrrfl€ctinstnfled bycudorner

L

f iveiPml's1't{.'nr1*

pmdudi,onlnstå$€d

by the disùictmeûerhsse installed

by cusbmer

J

Distri onTransfsr

hlet MeleringkWH flreCitçMefered þlere

rjtC tp ÃC,lnverter

fr,åetereC H*reBPUD Distri bution System

IWoshington Stote I centives

Drives porticipotion of our Net Metering Progrom

w

g i Energyi Program

EnergyProgramIt\¡t \,r( ¡i Sr rì l L\nl¡grY

Renewable EnergySystem lncentiveProgram

Energy Code

Energy Questionr?

Home

About Us

lnformåtion Centers.

Publications and Toolç

Energy L¡brary

Events & Traanangs

l'm Looking For.--?

Building Efficiency

Cl€an Fuels ¿l Alt EnÊrgy

fu blic F¿cilities Support

Computer Services

lndustr¡al Eff¡c¡ency

Agricultural Etriciency

Research & Evaluation

isearch Energy Frogram : {

Renewable Energy System lncentÍveProgramIMPORTANT- Deadlines to Address ESSB 5939'sFunding Limit (10-9-l 8)

Due to the high level of intere¡t in the Renewable Energy Sy*em lncentive Programand the funding limitationr prescribed in the governing legislation, ule hane

establi¡hed the following requirements, whkh will govem the incentive program's

closure-

Ee advised that these reguiremenr apply onþ to the overall f 1 I O million fundinglimit; there are additional utility-speciñc fr¡nding limirations-

Community Solar & Shared Commercial Solar ProjectsAll eligible sponrors of cornmunity solar or shared commercial solar projects mu*:

Submit a precertification application by 5:00 p-m. on llqænbcr 16, ãtlt-Applications receiued after this date will not be considered for funding underthe f I lO million funding limit-

We also requert that intere¡ted ¡ponsors of community or ¡hared commercial solarprojects contact us ¡r!¡ r(xln a5 possible: E-^-^Æ---:^-D--..---^-- - --,,

Ståtewidc Cap

11OM

-

1û5M

100M

95M

90M

a5M

aoM

75M

70M

65M

60M

55M

50M

451ì'

40M

35M

30M

25M

20M

15M

10M

5M

OM

!

I Appl¡catÍons under rev¡ewPrecertifed projetsCertified prcjects

Renewable Energy System lncentive Prog ram

Renewable Energy System lncentive Program.f":,- : ¿l:t, ;'

-j-i.il'

Res idential-Scale & Com mercaal-Scale Projects. Appfications must trè submined by 5:O0 p_m- on fcb¡u¡¡y l4,Zlûlg and

have a final ele<trical inspection date no later than J.núüy ll ,zDlg-' Applications received after February I 4, 2Ol 9, or that have a ñnal electrical

inspectbn date afterJanuary 3l "

2Ol S, will be placed on a w¿ittist and willif fund¡ ¿re ayaihble-be processed

o

o(,

o.âÐuo

o-oEÐz

450

400

3so

300

2so

200

r50

r00

50

0

,"o.J,"oo rJ rJJ r.arJ rJrJ r.f ,J r.f'r,c rt'rJ rJJ \$t"tt tJrJr".",J rf"

uGk wlo'i. .............(rlivesI

¡oJ

Iì

--atzfiaa

aa

Itet

7 yr poybock w1.)

.7a

Ðrqre tncenilYes

PROGRAM(REsrP)

26 yt Poyl

fI-

Stote lncer

¡--t-

IA -Ittrt,AL T TKL'(J'KATYI(RESCRIP)

tSZ ló3 l,

ar.lttl124.t-ôo.aI93

a55

48

aa

i)

n13rrrÔrfrr

19 2l

rlr'lrr26

art

ri r'25667

I . f. ¡lnstolled/ln Progress ..û. Proiected(Net Metering Cop Met)

Opt¡ons After August 'l st or T.5% Cqpr

l. Continue or lncreose Net MeteringCqp (retoil credit)

2. Move to Avoided Cost Rote for surplus

renewqble energy production(*holesqle rqte plus energy loss

reduction ond T&D credit)

Continue or lncreose Net Metering Cop

'ffi l. Continue or lncreose Cop of 1.5o/o of the I996Peok Lood.

Continues to occept cost shíftingfrom solor customers to otherrotepoyers

District poys retqil qmount forgenerotion in excess of ourrequirements

Allows time for possible legislotiveoction which could cquse onunwind of ony chonges to policiesor prqctices the District mightimplement

o

Mointoins consistency of existingDistrict controct monogement ondbilling proctices for solorcustomers thqt ore working well

coNS

Move to Avoided Cost Roteffi

I . Customer generoted energy consumed in thehome /business eoch month reduces the omount ofenergy delivered by the District to the customer oto retoil rote.

2. Customer generoted energy delivered bock toBenton PUD eqch month receives o credit of on

ovoided cost rote.o

Solor industry hqs q negotivevtew

Requires billing system chonges

It

Most "foir" qpproqch todistributed generotion

Limits cost shift

Poybqck CompclrisonI

S +z,m5 {12,6û0)

No Stãte

lncenti ves

S 29,4m

15,768

5 o.ozrs

5 t,t3z.rq

15,768

s

s

s

26.07.4

S 42,m0

5 (12,600)

WA State

lncentlræs

$ aam

15,768

$ o.ozra

5 t,132.1¿

11768

5 o.ts

5 ¿a¡s.z¿

S 21,ooo.oo

^t! lnstalled in: ãÌlll

I nstal lation Cost ($3.50/watt)

System Cost

Federal Tax Credit

TotalCostto lnstall

Net Meteríng Yeorly Energy $wíngs

kWh per Yeall)

Electricity Rate(2)

Total Annual Benefit

kWh perYear(l)

lncentive Rate

Annual lncentive

Total lncentive(3)

WA Stote lncentives

Payback Period (Yean)s 6

$ ¿eom

s ( 12,600)

l{o State

lncentircs

$ æ,qæ

1,6g-9

S +¿om

5 (12,600)

WA State

I nce ntives

$ a¡m

15,768

0.0718

0.0418

848.70

t5,768

0.18

2,8ß.24

5

)s

00000,

)s

) 21,

^t=-l lnstdled in: ã119

I nstal latio n Cost ( $3. S0/watt)

System Cost

FederalTax Credit

Total co6t to lnstall

Net Mele¡íngYærly Energy Sovings

kwh per Year(l)

Electric¡ty Rate{21

kwh perYear(l)

lncentive Rate

Annual lncentive

Total lncentive(31

WA Stdte lncentives

Avoided Cost Rate

Total Annual Benefit

Payback Period (Years)s 6

s

s

s

15,768

0.0718

0.0418

w,70

15,768

$

s

$

TilSummory of Options After August 'l st

o Generoted, consumed of home I Retoil Roteo Generoted, delivered to grid I Retoil Rote

o Generoted, consumed of home I Retoil Roteo Generoted, delivered to grid I Avoided

Cost Rote

Continue or lncreqse Net Metering CopCurrent

Move to Avoided Cost Rote

Utl lity Solqr Progrom Benchmorkffi

Retoil

Retoil

Retoil

Reseorching Avoided Cost

Retoil

Avoided Cost

Retoil

Exceeding O,íYo wilhoutsetting new cop

3OO% of 0.5olo cop

Exceeding O,5o/o withoutsetting new cop

Met Cop ond shut progromdown

2OOo/o of 0.57o cop

Met cop qnd switched toAvoided Cost

O.5o/o not met

Yes

Yes

Yes

No

Yes

Yes

No

Snohomish PUD

Clork PUD

P.S.E.

City of Richlond

Benton PUD

lnlond Power

Avisto

Customer lnslqlled Solorgreoler lhqn 0.50/o?

New Net Melering CopAdopled?

Retoil/Avoided CostUlilily

Summory

l 1o/o Net Metering Cop ropidly opproochingtr Recent nev/ info:

tr WSU ollowing exceeding $ I I 0M WA lncentive Copr Resulting in high Net Metering porticipotion

tr Expect less Net Metering qpplicotions ofter WA lncentiveprogrom ends Februory 14, 2Ol 9E Net Metering Poybock extends f rom 7 to 26 yrs

tr Continue Net Metering Progrqms Until August I , 2OI 9, or untilo new Net Metering Cqp of 1.5 o/o of District's 1996 peokdemqnd (5,670 kilowotts) is reoched; whichever comes firsto Allows time to ossess Legislotion impocts, ovoided cost rqte onqlysis,

build ond test in billing system

E

I

)

Ma

Benton County PUD and Horse Heaven CRATerms, Conditions and Scope of WorkPage 6 of9

Exhibit APlanned Infrastructure

EfúlrgE3Eo(üoEoIo

o-Cc>o'a.göi-Þ ; Ëq:: E p.tsH .k ö#€ _ Ë Ëìü Ë å €o*õqEß!=.ñ

f¡- å Eõ

FF fi ã58ËE Þ = ! s E I e pOdJJZ\IÑEürtû¡mEuJr0-Ë,åElìll"å .lrr,2

dñ0qÕ

o¡1,ç!

<1)

oa=coõcl

ÈÈoÐI

J

L/8/zoLs

Resource Adequacy in thePacific NorthwestServing Load Reliably under a ChangingResource Mix

Energy Environmental Economics

January 2019

Ai-¡¡e Olso¡, Sr. Pa:ii'Ê:-Zacl l"liitg, l,1ar.agri-rç f ¡,r5¡i:¿::¡

)

t ln2OL7-2O18, E3 completed a series of studiesfor PGP and Climate Solutions to evaluate thecosts of alternative electricity decarbonizationstrateg¡es in Washington and Oregon

* This study builds on the previous analysis by focusing on long-run reliability

. How much capacity is needed to serve peak load under a range of conditions in the NW?

. How much capacity can be provided by wind, solar, storage and demand response?

. what combination of resources would be needed for rel¡ab¡lity under low or zero carbon?

f The conclusions from this study broadly align with the previous results

Ener8y+EnvironmpFlal E@nmlcr

a

a

a

a

2017 E3-PGP Low Carbon Study

@/&-rÞ.dæ@lrl@qrljj¡d

The studies found that the least-cost way toreduce carbon is to replace coal with a mix ofconservation, renewables and gas generation

Firm capac¡ty was assumed to be needed forlong-run reliability, how€ver the study d¡d notlook at that question in depth

Relationship to Prior E3 Work

t

)

Ll8/2or9

ì

* The study region consists oftheU.S. portion of the NorthwestPower Pool (excluding Nevada)

+ lt ¡s assumed that any resource inany area can serve any needthroughout the Greater NW region

. Study assumes no transmissionconstraints or transactional friction

Érergr.E ¡vi@blErEÍks

Balanc¡ng Author¡ty ArcÃs ¡ndude: Avista, Bonnev¡llePower Adm¡n¡stmuon, Chetan County PUD, DouglasCounty PUD, Gmnt County PUD, Idaho Power,Northwætem Energy, Pac¡ñCorp (East & Wæt),Portland Genenl Electric, Puget Sound Energy, SeattleCiry L¡ght, Tacoma Power, western Area PowerAdmin¡stmtion

3

. Study assumes full benefits fromregional load and resourcediversity

. The system as modeled is moreefficient and seamless than theactual Greater NW system

Study Region - The Greater NW

* This study focuses on long-run (planning) reliability, a.k.a. Resource

Adequacy (RA)

. A system is "Resource Adequate" if it has sufficient capacity to serve load across

a broad range of weather conditions, subject to a long-run standard forfrequency of reliability events, for example L-day-in-10 yrs.

* There is no mandatory or voluntary national standard for RA

Each Balancing Authority establishes its own standard subject to oversight by

state commissions or locally-elected boards

. North American Electric Reliability Council (NERC) and Western Electric

Coordinating Council (WECC) publish information about Resource Adequacy buthave no formal governing role

* Study uses a f-in-10 standard of no more than 24 hours of lost load in 10

years, or no more than 2.4 hours/year

. This is the most common standard used across the industry

Energy Enviranmental Economlca4

Long-run Reliability and ResourceAdequacy

2

L/8/z9rs

I

* The study considers additions nearly 100GW of wind and 50 GW of solar across thes¡x-state region

* New renewable portfolios are within thebounds of current technical potent¡alestimates, but are nearly an order ofmagnitude higher than other studies haveexamined

f The cost of new transmission is assumedfor delivery of remote wind and solargeneration but siting and construction is

not studied ¡n deta¡lErsgy- E viÞr@tJ EøF!*! https ://www. nrel. gov / docsl fy l2osti l 5 19 46.pdf

Additionaltransmiss¡oncost ($50/kw-yr)assoclated withMT and WY wind

a so¡ar-

^ NW Wind. MT Wind* WY Wind

'windState

WA

OR

c¡ID

MT

WY

UT

ilREL Technícal Potent¡al (GW)

Total

18

27

34

18

944

s52

r31588

resources ci¡rrently operat¡ng in the region

* The portfolios studied are sisnificantlymore diverse than the renewable

New wind and solar resources areacross a geographically diverse

Energy Environmental Economics

KEY FINDINGS

,4\(t-J)

3

tl8/2oLe

1. lt is possible to maintain Resource Adequacy for a deeply decarbonized Northwestelectricity grid, äs long as sufficient firm capacitv is available during periods of lowwind, solar and hydro production

o Natural gas generation is the most economic source of firm capac¡ty, and addin6 new gas

copaciLy is not ¡nconsistent with deep reduct¡ons in carbon emissions

o Wind, solar, demand response and short-duration energy storage can contribute but haveimportant l¡mitations ¡n their ability to meet Northwest Resource Adequacy needs

o Other potential low-carbon firm capac¡ty solutionS include (1) new nuclear generation,'(2) gas or coal generat¡on with carbon capture and seguestration, (3) ultra-long durationelectricity storage, and (4) replacing conventionaf natural gas w¡th carbon-neutral gas

2. lt would be extremelv costlv and impractical to replace all carbon-emitting flrmgenerat¡on capacity w¡th solar, urind and storage, due to the very large quantities ofthese resourçes that would be required

3. The Northwest is anticlpated tô need ñew câoaclty ¡n thê nêer-term ln ordèr tomaintain an acceptable level of Resource Adequacy after planned coal ret¡rements

EnsåÉårlunítal EqEdq 7

Key Findings ( 1 of 2)

Current planning pract¡ccs risk underinvestment in new capacity required toensure Resource Adequacy at acceptable levels

o Rel¡ance on "market purchases" or "front off¡ce transact¡ons" reduces the cost ofmeeting Resource Adequacy needs on a regional basis by taking advantage of load andresource diversity among utilities in the region

o However, because the region lacks a formal mechanism for count¡ng physical firmcapac¡ty, there is a r¡sk that reliance on market transactions may result in double-count¡ng of ava¡lable surplus generation capac¡ty

o Capacity resourcês are not fírm without a firm fuel supply; investment in fuel deliveryinfrastructure may be required to ensure Resource Adequacy even under a deepdecarbon¡zatíon trajeÇtory

o The region m¡ght benefit from and should investigate a formal mechanism for sharing ofplanning reserves on a regional basis, which may help ensure sufficient physical firmcapacity and reduce the quantity of capacity required to ma¡ntain Resource Adequacy

The results/findings in this onolysis represent the Greoter Nw region¡n qggregate, but results moy differ for individuol utilities

Eßrgy?Envlrenñcntal Eænomlçt

4.

o Key Findings (2 of 2)

4

Ll8/zore

Costs of achieving deeplevels of decarbonization

increase non-linearly

Reduct¡on in 2O50 GHG Emíssions {million metric tonl

tærû'ülvlffit¡¡ Éqsik3

Low Cost

tltr6Rps , High Cost

5ro

9

5( 1)6'050400 10

90% Reductlon

^s9o

ã2$70ß)oo

Ësso ''Uñs3ãEs¿951oNg_

98% Reduct¡on99XGH6-Free

g6%FpS -aa

' t=?tlttt- -'-"-t

oaoJ

60% ReductionA)X çHG-Ftee

95XGHG-rrce Itoa%BPs ,

80%Eeduct¡on .,go%GHG-Frce .2

ß0ró RPS )J

...t costRange

Cost of GHG Reduct¡on

930

ç 515o

=¡<t| 5¿Uru

ñ

$ srs

;I <'n

rE ¿.ê))oI¡o(

s{ 5)

Achieving 100% GHG reductionsleads to exponential cost increasesand is impractical due to massive

renewable overbuild

Reductíon ín 2050 GHG Emissions (million metric ton)

?IIIII

gnergy rEnviranñertal EconoDl€

--acq'--1

60% ReductÍon

Low Cost

10

6050402A100

\+ Ì

CostHigh

30

80% GH6-Free

a6x R?s

Previousslide

\\¿'|tii.Í"* l

ìá. ' -ë'"

90'l 6HG-Frce16* RPg

7(N% Reduct¡on7O0%GHG-Free

123 APS

98% Reducdsn l:ggxGHc-Frce L

,rz*nrs 1 d

soN neduction \t/,95X GHG.Frce

80% Seduction 708%BPs ta

Cost of GHG Reduct¡on

)

5

Ll8/zOLe

Response3

Hydro2

7

Gas

Resource 2018 Nameplate MW

lHydro ¡s rnodclèd às ercryy budgêE br ðch rììonth ând doeg rìot usenameplate Gpãcity¡Other hydro is hydro outside NWrcC reg¡on3Demand R6ponse: max 10 Glls, each @ll max dumtion = 4 houß4lmports are zerc for summer ñonths (Jun, Jul, Aug, Sep) qcept durlngoff-peak houßNOTE: Storage assumed to be ¡nsigniñiänt in the cumnt system 11

coal

16'6

Wlñdtw

EFArËw¡læ*d EcEg¡io

44%Hydro

2%

Nucleâr

lmports

Nâtural Gas

IM

glomass oemand

fX Respon*29"

Other Hydrot%

+ 2018 Baseline system lncludes 24 GW of the¡malgenerat¡on, 35 GW of hydro generation, and 7 GW ofwind generatlon

. Sou¡ces: GENESYS databaæ for NWPCC reglon and ÎEPPCanchor dataæt forother select NWPP BAAS

f Ay 2O?3, approx¡mately 1,8ül MW of coal generation Ísexpected to retlre

+ 2018 loads:246 TWh/yr,43GW peak

!ñ.rgy+Envhonmrtal Êøgmk¡ L2

2030 No Coâl

67

3(' -

r20302018

,. :i,é.4?È,

100

80

60

40

20

lf all coal is refired,then 16 GW new

capac¡ty is needed2030

Saseliæ

, 2018B3selim

I lmports

!DR

Nuclear

a Bio/Geo

I Natural Gas

¡ Coal

I Storage

r Wind

* Solar

r Hydro

With planned coalret¡rements of 3 Gw 8GW of new capac¡ty by

2030 is needed

5 GW net new capac¡tyby 2030 is needed for

rel¡ab¡l¡ty

J.,'...1;ffi1'. .,.,. , ..ifili[i".];.: ,

*Assumer 60tó coal cdpæW fqcþr

2O3O Portfolios

6

tl8/20Ls

Removing final L/o of ca¡bon requiresaddit¡onal Slü)b to 9170b of ¡nvestment

\l#êd ffi x - e/W6/ãtu @eq tu qß, ffi br d ffi M

'¡{

JO

6ta60t3

8."8¡!ßr&

6

t08xstrW

5a-S5

$ü - S!8qtx*

Etñx#ã

91-34

53 - S14

úrß

a8llotf-

þ-n$-stûr*

13

B¿Pline2fÌ502018

frflüfE

¡l-h¡3+ht A-hr

¡+hr

20502018Ahr

60% Red û%Red 9O9l Red gSYoRed 100% Red

Ze.o C¡abon

u¡¡' þttt

a7*

sû6- 9tss2 - 989

p0'.tx

DR

- Solar

r Wind

I Bio/Geo

Nuclear

I Hydro

r Natural

I lmports

I Coal

I Storage

:t20

)t)l

130

tóù

i;0

120

100

80

úi0

to

¡LlTtÍ

û*zra

s3- $0

sto - s28

9lra

tt

Greater NW System in 2O5OScenario Summary

Portland land ¡rc¡ i¡ 85k ¡cresSe¡ttlr land ¡re¡ i¡ 56k acre¡Oregon land ¡rca i¡ 61,704k ¡crcs

lerlrttolor¡y NdnrepldteGW

W¡{rdTotdl I drìd

Wi¡ rd[rire(tt ãr¡d

Solarïolô I

t ô ¡ì{tU*

Each point on thê map lndicates 200 MW.Sites not to scale or indicative of site locatlon.

Eñergy+Envlronm€ñtôl Econoñlc5

€drgy : lñlrdñl¡l Ecol@lq

the area of Portland ¡nd Sêattle combined

1.6 to 7 .5xLand use today ranges from

rúJ u2 t9 tic-r,@

| 5dü ' . .,, ,L6ì' .

. NìU lvind 7.L

.HTfkrd ; Q ,, ''

. lilY Wind Z

Renewable Land Use2018 Installed Renewables

)

7

Ll8/2ote

Load

(/olLoad

toad (6w)2018

il ":;Jtrxl

/t42

26v,

2794

uclear

Erccr (%lCåpacity Factor

l%l

l{ameplateCâpacity {GW)

Resources / Effective Capacity (GW)

ABfg-fuvhümntJ Ecffiñ¡ct 15

*ELCC = EÍfect¡ve Lood Corrying Cqpab¡lity =

firm contribut¡on to systern peqk lood

Wind and solar contr¡butelittle effective capacity

w¡th ELCC* ol ToÁ and lz%o

2018 Load and Resource Balanc€,

Oregon land area is 6X,704k acres

Portland land area is 85k acres

Seettle lend area ¡s 56k acres

Technology NameplateGW

Each point on the map indicates 200 MW.Sites not to scale or indicative of site location

*tffffffiffiffif*dtrt'f*ffiit**r.l#ffiüÈ

tt*d*{*ttffid*rü*ffi*ffi*ffffi**ffir#

¡¡ù^u¡¡¡¡s¡¡ù¡^^^a^¡å^u^e¡¡Mææffiffi Land Use ' Land Use

lDirect

(thoilsand( thoils¿ildacres)

solârTotal Total

Lancl Use(thous¿ild

Wind - Wind -

Ençrgy Environmental Econorrlcr

the area of Portland and Seattle combined

46'

47

18

33

16

24l361

1.135 -3,337

91

tand use in L00% Reduction case ranges from

20 to 100x

r Solar 1

^ NW W¡nd

. MT Wlnd

' WY Wind

100%Red

80%Cleãn

2,9t3 -13,701

Renewable Land Uset00o/o Reduction

8

rl8/zOLe

59

3s 3s 3sl ss96 sstl s4 44% ue6 4438 .ta 961 19f,1 22'4 22rd 3s% 36% J7c:: :: :l x ::î ::a ':: 'i '^:

0

24

0.6

2

1

1

20

2,0

0

20

0.6

2

1

I20

11

2.2

¿q50_ -._..__.-80r, 90; r00ì.

Reductioî R€dúction Reduclion

Êærðh Envi6lMtd EcûÈfi ¡c9 L7

*ELCC = Effective Lood Carrying Copobility =

f¡rm contribut¡on to system peak lodd

Wind ELCC* values are higherthan today due to significant

contributíon from MT/WY wind

r0û1: Red 80., RÊd80i. Red. 9ú'. R€d

¡¡êdÊpl¡tç Cåp.dtv {GW} tlcc{,'¿t i C¿pa€ity¡aflo¡{%t

90',R€d- 100'.R€d. 80t:Red. 90".rRed. l00t¡R€d

2O5O Load and Resource Bala

Portland land area is 85k acresSeattle land area is 56k acresOregon land area is 61,704k acres

Nameplate GWTechnol

Solar Wind - Wind -Total 'Direct :fotalLand Use Land Use ' Land Use(thous¿ild (tltousind (thousånd¡<res) àcr es) acres)

Each point on the map indicates 200 MW.Sites not to scale or indicative of site location.

Ð

^¡^¡¡¡^^ú^u^¡¡u

d

EnerEy -Envkonmental Ëçgnomica

the area of Portlând and Seattle combined

8 to 37xLand use in 80% Reductlon case ranges from

f13ó

0

2

18

Red84.80% 1,135 -

5,337

. NW Wind

.. MTWnd

. WY Wind

Renewable Land Use80o/o Reduction

9

10

60

50

40

l0

20

¡0

0

80% Reduction Portfolio lncludìnq Gas

Di.I¡rft LA Gil ol ût\tolle¿ |tû.wobtu ¡ opot;ty ui tt¡L 30': ¡¿dutttotr\(.not¡o, qô\ ond hfdro ota needcl dut'ne low grnetntloÞ pettod\

Ddy 7

10 Day Cold Stretch ln January

EGBþ€tllürFt l€qurh¡ 19

I(9

to9I7653 a2

r Lost toad

ã Deñand ResÞonrè

I5tøaÍeIReneweblgI Hydfo

rCailmpo¡t¡I Bio/Geo/Nuclear

Illustrating the Need forFirm Capacity - lanuary

t/8/z0te

10

50

40

30

20

10

0

80% Reduction Case Wíthout Gas

Withoul gos, the system is energy delictent duilnq prolongedstQtches ol low wind ond solor Noduction

Loss of Load

Eærgr+f nvlEîmrntål ElonoÍdq

Dqt

20

3

709It2

10 Day Cold Stretch ln January

ILoJt Load

e* Demand Rsrcñte

IStor¿geIRen€wables

I ljyd.o

IGât/lñportsI Eio/ceo,/Nucle¡r

Illustrating the Need forFirm Capacity - January

L0

Energy and Envlronnrental Ecoriomics, lnc. (E3)101 l"lontgomery Street, Suite 1600San Francrsco, CA 94104Tel 415-391-5100V,/eb http : //wr,,¡i,v.eth ree. com

Arne Olsoir, Sen ior Pa itnei- (¿ :rre,.g,eih ree. co¡¡ )

Zach 11 r ;rç, i{ana gr rrg Consr, lie i ii (.za:i¡a:y .n-ttng.4ellì iee. corn )

Energy Environmental Economics

Thank You

r/8/z}rs

TL