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WECC Regional Planning Project Report

For the Proposed

Canada / Pacific Northwest to Northern California Transmission Project

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Project Steering Team:Avista Corporation

British Columbia Transmission CorporationPacific Gas and Electric Company

PacifiCorpSierra Pacific Power Company

Transmission Agency of Northern California

November 1, 2007

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I. Introduction

The Canada / Pacific Northwest to Northern California Transmission Project (“Project”) is envisioned to be an Extra High Voltage (EHV) transmission project between British Columbia and Northern California. The US Project Sponsors: Avista, PacifiCorp, and Pacific Gas and Electric Company (“PG&E”), along with British Columbia Transmission Corporation, Sierra Pacific Power (“SPP”), and Transmission Agency of Northern California (“TANC”), are the six transmission-owning utilities whose service footprints could be traversed by the Project. Together they form the Steering Team for the Project. The members of the Steering Team are each members of Western Electricity Coordinating Council (“WECC”) and have developed other projects within the WECC transmission system.

The purpose of the report is to satisfy one of the necessary components of the WECC Regional Planning requirements for new transmission projects. In accordance with the WECC Procedures for Region Planning Project Review and Rating Transmission Facilities, a letter (Attachment A) was sent to the WECC Planning Coordination Committee (“PCC”) and the Technical Studies Subcommittee (“TSS”) on August 16, 2006 requesting the formation of a Regional Planning Review Group (“RPRG”) for the Project. The list of the RPRG participants and correspondents is attached as Attachment B.

The Project was presented to stakeholders on December 12, 2006 at a “kickoff” meeting in San Francisco. A description of the project and an announcement of the first project meeting were sent to WECC members as well as public officials and other interested parties, and posted on the Project website (http://www.pge.com/biz/transmission_services/canada/). At the kickoff meeting three subcommittees were formed, a Loads and Resources (“L&R”)Working Group, Technical Analysis Committee (“TAC”), and an Economic Analysis Committee (“EAC”), inviting all interested parties to participate in any or all of the committees. The list of subcommittee membership is listed in Attachment C. These subcommittees would focus on identification of loads and resources, technical feasibility and economic feasibility. Membership on the committees was diverse, including participation from renewable developers, energy marketers, investor-owned and municipal utilities, energy industry consultants, regional planning entities, and independent transmission companies.The subcommittees met regularly and were instrumental in developing subcommittee reports, which are posted on the Project website. In addition to the regular subcommittee meetings and the December 12, 2006 kickoff meeting, two other stakeholder meetings were held on August 2, 2007 and October 22, 2007. Copies of the presentations from each of the stakeholder meetings are also available on the project website.

II. Project Description

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The detailed plan of service for the proposed Project will be finalized by the US Project Sponsors through the WECC Rating Process. The Project was evaluated as a regional project intended to meet three primary objectives:

1. Enhance access to significant incremental renewable resources in Canada and the Pacific Northwest.

2. Improve regional transmission reliability. 3. Provide market participants with beneficial opportunities to use the facilities.

Initially, the project did not provide specific terminations for such a project, but offered three distinct alternatives for satisfying the above objectives. The three alternatives included:

1. An overland alternative from Southeast British Columbia to Northern California2. An overland alternative from Idaho to Northern California.3. An undersea alternative from Western British Columbia to Northern California.

III. Compliance with Regional Planning Guidelines

This section provides information in response to each of the Regional Planning Guidelines with respect to the Project. The Regional Planning Guidelines are presented in bold, italic text and how the Project’s Regional Planning addressed each guideline is presented in normal text.

1. Take multiple project needs and plans into account, including identified utilities’ and non-utilities’ future needs, environmental and other stakeholder interests.

The first stated benefit of the Project is to enhance access to significant incremental renewable resources in Canada and the Pacific Northwest. This benefit will aid in satisfying the needs of utilities in California, which as of the writing of this report are required to satisfy at least 20% of their load with energy generated from renewable resources by the year 2010. Furthermore, in California, recent legislation (AB 32) set a state goal to reduce green house gas emissions. Nevada has had a renewable standard since 2001. Both Oregon and Washington (service territories for PacifiCorp and Avista, respectively) have enacted renewable portfolio standards as well. British Columbia has announced an energy policy goal to satisfy its entire load with clean energy, as well as becoming electricity self-sufficient. Thus the immediate and future environmental and resource needs of all six members of the Steering Team as well as other utilities in the service territories that the project will traverse will be aided by this project. In addition to meeting the future needs of utilities, this Project will satisfy the future needs of generation developers, particularly renewable generation developers, in the Pacific Northwest and Canada.

The Project does not conflict with or preclude other entities from pursuing other projects or plans.

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2. Cooperate with others to look beyond specific end points of the sponsors’ project to identify broader regional and subregional needs or opportunities.

The second intended benefit of the project is to provide regional transmission reliability. The Steering Team solicited open participation in each of the subcommittees. Through the L&R Working Group the project has taken into account utilities’ and non-utilities’ future loads and resource needs, and resource development opportunities. The approach of the TAC led to a range of intermediate interconnection alternatives, each of which may prove to enhance local reliability in the areas where the interconnections are likely to take place. During the WECC Rating Process, the Steering Team aims to find the most beneficial intermediate interconnection points that will produce the intended benefits. The Steering Team met in one-on-one meetings with TransCanada (sponsor for Northern Lights), Portland General Electric (sponsor for Southern Crossing Line), and BPA (sponsor for the West of McNary project) to discuss coordination of project plans. Additionally, BCTC has considered the system north of the potential British Columbia terminals for both the east side and the west side of the province, including the tie to Alberta.

The third intended benefit of the project is to provide market participants with beneficial opportunities to use the facilities. The EAC used stakeholder input to develop the assumption for its analysis, allowing committee members access to a PG&E-developed economic screening tool, with each user able to input assumptions and conduct analysis to meet its individual needs. This tool was made available to all committee members, which included various market participants, including developers, load serving entities, energy marketers, and independent transmission owners.

3. Address the efficient use of transmission corridors (e.g., rights-of-ways, new projects, optimal line voltage, upgrades, etc.).

The analysis considered three completely distinct, wide, transmission corridors to find the most efficient preliminary plan of service to meet the intended objectives. PG&E and others focused on the overland alternatives between southeast British Columbia and northern California, TANC focused on the overland alternative between Idaho and northern California, and Sea Breeze focused on the undersea/overland alternative between western British Columbia and northern California. In addition, the TAC relied upon information obtained in relation to a previous study of an undersea option performed by PG&E and Sea Breeze in order to compare all three alternatives for the cost analysis.

As stated above, the Project intends to access incremental renewable resources. The L&R Working Group identified multiple areas where new resources are likely to develop, feeding that information to the TAC. This information allowed the TAC to develop various alternatives to conduct preliminary technical studies with HVAC, HVDC and Hybrid (combination of the HVAC and HVDC) interconnections. The alternatives considered ranged from 1,500MW to 4,500MW capacity. Additionally, the TAC estimated project costs as well as local area upgrades in areas where the Project might

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interconnect to the existing transmission network in British Columbia, the Pacific Northwest and Nevada. 4. Identify and show how the project improves efficient use of, or impacts existing and

planned resources of the region (e.g., benefits and impacts, transmission constraint mitigation).

Through the work of the L&R Working Group, areas of incremental resource development were identified, as well as the need for new transmission facilities in order to allow for efficient connection of multiple markets to accommodate trade of those resources. In developing a conceptual plan of service, the TAC considered multiple alternatives that provided positive impacts in the region. These alternatives are expected to reduce congestion and encourage international and interstate trade between local energy markets.

5. Cooperate with Regional Planning Review Group members in determining the benefits and impacts due to the project.

The Steering Team provided multiple avenues for RPRG members and other interested parties to participate, provide input and identify benefits and impacts due to the project. The three subcommittees were open-invitation participation. Each of the subcommittees solicited stakeholder input to form assumptions, conduct analysis, and provide comments and feedback. Three stakeholder meetings were held. At both the December 12, 2006 and August 2, 2007 stakeholder meetings, committee participation was encouraged. Additionally, committee chairs gave presentations and solicited comments from all stakeholders. Additionally, a Project website was set up prior to the December 12, 2006 kickoff meeting. The Project website has been updated regularly, announcing upcoming meetings and posting presentation materials. In addition a Project email box was established to address member comments and questions. In addition to the broad public general stakeholder outreach, the Steering Team members have been meeting frequently with individual stakeholders at their request to allow for more in-depth collaborative planning and communication.

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6. Identify transmission physical and operational constraints resulting from the project or that are removed by the project.

The TAC analysis did not identify any new physical or operational constraints on existing transmission paths resulting from the Project. Most of the major transmission paths between Canada, the Pacific Northwest and California were loaded at or close to their Operational Transfer Capability (OTC) ratings in the studies, and there were no new overloads or voltage criteria violations resulting from any of the contingencies studied by the TAC with the Project in service. The tripping of some of the incremental generation resources was required for single and double line outages of the Project line. The preliminary power flow studies did not show any adverse impacts in other regions of the WECC interconnection.

There were some potential reliability benefits identified by the TAC analysis as indicated by the increase in system reactive margin following the double-Palo Verde generator outage for the Project case compared to the pre-Project benchmark case. This result indicates that the North of John Day nomogram could be less restrictive if the Project is built, even if the North of John Day path rating increases.

The WECC Phase 2 Rating Process will ultimately determine the physical and operational constraints that will result from or be removed by the Project.

7. Coordinate project plans with and seek input from all interested members, subregional planning group, power pools, and region-wide planning group(s).

Each of the entities that make up the Steering Team participates in one of the sub-regional planning groups which the Project will likely traverse. The Project has not only been providing outreach through the stakeholder process and subcommittee participation, but through regional planning forums including Columbia Grid, Northern Tier Transmission Group, West Connect, Northwest Transmission Assessment Committee (NTAC) of the Northwest Power Pool, the California Independent System Operator (CAISO), WECC Transmission Expansion Planning Policy Committee (TEPPC), and industry conferences sponsored by the Edison Electric Institute (EEI) and the Electric Utility Consultants, Incorporated (EUCI).

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8. Coordinate project plans with and seek input from other stakeholders including utilities, independent power producers, environmental and land use groups, regulators, and other stakeholders that may have an interest.

The August 16, 2006 letter soliciting interest in participation in the Project’s RPRG went to all members of PCC, the TSS and a list of likely interested stakeholders. The list of RPRG participants is included in Attachment B. The RPRG includes representation of utilities, transmission owning utilities, independent transmission companies, independent power producers, marketers, regulators, industry consultants and other interested parties. As stated above, subcommittee participation was open to any and all stakeholders. The committee work relied heavily on information gathered from these various stakeholders, particularly in setting assumptions for incremental generation development in the L&R Working Group that were the basis of subsequent committee work. This stakeholder group was able to provide valuable input to the TAC, which in turn developed the transmission alternatives to be studied. Furthermore, input from stakeholders drove the economic analysis, providing recommendations on ranges of data that was used to frame the analysis. Invitations to the public stakeholder meetings were posted on the Project website and open to any party to participate whether or not they showed interest in joining the RPRG.

9. Review the possibility of using the existing system, upgrades or reasonable alternatives to the project to meet the need (including non-transmission alternatives where appropriate).

One of the tasks of the L&R Working Group was to identify loads, resources and scenarios of resource development and to determine if the current transmission system could support those needs. It concluded that the existing system is not adequate to accommodate the delivery of production from incremental renewable and conventional resources to the loads looking to be served by those resources. Additionally, the EAC took into account the non-transmission alternative (i.e. accessing local resources, demand-side management, and/or using the existing transmission system) and has shown that under a variety of conditions, a transmission alternative would be justified.

10. Indicate that the sponsor’s evaluation of the project has taken into account costs and benefits of the project compared with reasonable alternatives.

One of the main tasks of the TAC was to estimate the costs of various alternatives. The TAC compared thirteen alternatives that had potential to provide the intended benefits outlined in the regional planning initiation letter. Additionally, in screening the alternatives, the TAC took into account the possibility of interconnections in the Pacific Northwest and Nevada that could provide reliability or other benefits to the existing system.

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11. Coordinate with potentially parallel or competing projects and consolidate projects where practicable.

Other project developers in the region, including Sea Breeze, TransCanada, BPA, PacifiCorp and Portland General Electric were all participants on the RPRG, and in the subcommittees. Members of the Steering Team have been meeting and coordinating with TransCanada, BPA and Portland General Electric. As stated previously, PG&E and Sea Breeze participated in joint studies prior to initiation of the Regional Planning Review and the TAC utilized that information as inputs for its study results. .

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ATTACHMENT A: Regional Planning letter

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[Scanned Version of August 16, 2006 Letter to Be Added]

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ATTACHMENT B: Regional Planning Group Participants

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Regional Planning Group Participants

FIRST NAME LAST NAME COMPANYJuergen Puetter Aeolis WindDon Bain AeroPower Services, Inc.Neil, J. Brausen Alberta Electric System OperatorDave Johnson ATCO Power MarketingDave Defelice AVISTA CorpDon Kopczynski AVISTA CorpScott Waples AVISTA CorpEd Groce AVISTA CorpGuy Dauncey BC Sustainable Energy Ass'nCam Matheson BC HydroJohn Rich BC HydroLindsay Fane BC HydroDoug Little BCTCAmir Amjadi BCTCRohan Soulsby BCTCMike Kreipe BPA Transmission Chuck Matthews BPA TransmissionElliot Mainzer BPA Transmission Rebecca Berdahl BPA PowerKevin Wedman Bureau Veritas North America, Inc.Robert DeKruse Bureau Veritas North America, Inc.Chris Sibley CAISOGary DeShazo CAISOPaul Didsayabutra CAISOChristine Cordner California Energy MarketsJim McKluskey CECAnne Gillette CPUCPaul Douglas CPUCRegina DeAngelis CPUCJohn Montgomery Ecology & Environment, Inc.Steve, F. Ghadiri Electricity Oversight BoardKelly Francone Energy StrategiesShamir Ladhani Enmax Power CorporationDarrel, G. VanCoevering Entrantek LLCLorne Whittles EPCOR Energy Marketing (US) Inc.Barry, R. Flynn Flynn Resource Consultants, Inc.Ed Chang Flynn Resource Consultants, Inc.Jeremiah, F. Hallisey Hallisey and JohnsonNan Nalder Hatch AcresElroy Switlishoff Jetson Consulting Engrs. Ltd

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Regional Planning Group ParticipantsFIRST NAME LAST NAME COMPANYGavin Berg Katabatic PowerJonathan Raymond Katabatic PowerTony Duggleby Katabatic PowerFrank Cady Lassen Municipal Utility DistrictReynold Roeder LECTRIX LLCGeorge, F. Morrow Lodi Electric UtilityMichael Edds Mitsubishi PowerMichael Margolick Naikun Wind Development, Inc.Les Pereira NCPATajinder Grewal NCPAAseem Bhatia Nevada PowerRebecca Wagner Nevada Public Utilities CommissionCathy Kahn NIPCCBill Hosie Northern Lights Trans/TransCanadaNeil Parekh Pacific North West Economic RegionDarrell Gerrard PacifiCorpEdison, G. Elizeh PacifiCorpGayle MacKenzie PacifiCorpJeff Miller PacifiCorpMichael Sidiropoulos PacifiCorpManho Yeung PG&EThomas E Miller PG&ECurtis A Hatton PG&EDennis Sullivan PG&EDede Hapner PG&ERobert Jenkins PG&E ESMarc Bommersbach PG&E ESBen Morris PG&E ETJason Yan PG&E ETStephen Metague PG&E ETVijayraghavan Bangalore PG&E ETEric Law PG&E ETSherman Chen PG&E ETKenneth Dillon Portland General Electric CompanyPhilip Augustin Portland General Electric CompanyGordon Dobson-Mack PowerExChris Reese Puget Sound EnergyHugh Nguyen Puget Sound EnergyNancy Bougher Roseville ElectricDana Cabbell SCEE. John Thompkins Sea Breeze Pacific West Coast CableRod Lenfest Sea Breeze Pacific West Coast Cable

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Regional Planning Group ParticipantsFIRST NAME LAST NAME COMPANYPaul Manson Sea Breeze Pacific West Coast CablePaul Schmidt Sierra Pacific PowerCarolyn Barbash Sierra Pacific PowerJim McMorran Sierra Pacific PowerRenee Hull Sierra Pacific PowerJoe Tarantino SMUDJim Feider TANCJim Beck TANCBryan Griess TANCDavid Larsen TANCHoward Shapiro TIDThom Fischer Tollhouse EnergyLarry Gilbertson Turlock Irrigation DistrictJerry Pell U. S. Dept. of EnergyDaniel, H. Wood Utility System Efficiencies, Inc.Mariam Mirzadeh WAPA-SNRMorteza Sabet WAPA-SNR

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ATTACHMENT C: Subcommittee Membership

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Canada / Pacific Northwest to Northern California Transmission ProjectLoads and Resources Working Group

First Last CompanyJuergen Puetter Aeolis WindDon Bain Aero Power ServiceCam Matheson BC HydroJohn Rich BC HydroRohan Soulsby BCTCElliot Mainzer BPA TransmissionEd Chang Flynn RCIElroy Switlishoff Jetson Consulting EngineersGavin Berg Katabatic PowerTony Duggleby Katabatic PowerMichael Margolick Naikun Wind DevelopmentKurt Granat PacifiCorpCurtis A Hatton PG&EThomas E Miller PG&EDennis Sullivan PG&ERobert Jenkins PG&E ESEric Law PG&E ETChris Reese Puget Sound EnergyRenee Hull Sierra Pacific PowerJim McMorran Sierra Pacific PowerThom Fischer Toll House EnergyBill Hosie TransCanada

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Canada / Pacific Northwest to Northern California Transmission ProjectTechnical Analysis Committee Members

First Last CompanyDon Bain Aeropower ServicesScott Waples AVISTA CorpAllen Hiebert BCTCAmir Amjadi BCTCRebecca Berdahl BPA PowerMichael Kreipe BPA TransmissionChuck Matthews BPA TransmissionPaul Didsayabutra CAISOShamir Ladhani ENMAXBarry Flynn Flynn RCIFrank Cady LMUDMichael Sidiropoulos PacifiCorpTom Tjoelker PacifiCorpRobert T Jenkins PG&E ESVijayraghavan Bangalore PG&E ETSherman Chen PG&E ETBen Morris PG&E ETPhilip Augustin Portland GeneralEllen Feng PowerExGordon Dobson-Mack PowerExChris Reese Puget Sound EnergyHugh Nguyen Puget Sound EnergyDana Cabbell SCEVishal Patel SCERod Lenfest Sea BreezePaul Schmidt Sierra Pacific PowerJoe Tarantino SMUDBryan Bryan Greiss TANCDave Larsen TANCBill Hosie TransCanadaMariam Mirzadeh WAPAMorteza Sabet WAPASam Kwong Williams

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Canada / Pacific Northwest to Northern California Transmission ProjectEconomic Analysis Committee Members

First Last CompanyDave Defelice AVISTA CorpJames Gall AVISTA CorpRohan Soulsby BCTCPushkar Wagle Flynn RCISusan Williams Northern Arizona UniversityKurt Granat PacifiCorpJamie Austin PacifiCorpManho Yeung PG&ECurtis A Hatton PG&EThomas E Miller PG&ETodd Strauss PG&E Robert T. Jenkins PG&E ESGordon Dobson-Mack PowerExJim McMorran Sierra Pacific PowerPatrick Mealoy TANCThom Fischer Toll House EnergyBill Hosie TransCanadaJerry Valenti Trans-Elect

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