Welcome to Grant PUD Power Auction Pre-Bid Conference

1. Welcome to Grant PUD Power Auction Pre-Bid Conference

3. Significant Dates Oct 1 Power Data Updates Oct 21 Pre-qualification Ends Nov 5 Power Auction Nov 6 Contract Execution Dec 31, 2009 � HE2400 Power Delivery Begins

4. Agenda Project Overview Product Overview Point of Delivery PRP Operations Operational Rights & Responsibilities Pre-qualification Process Collateral /Guaranty Requirements Bid Process Contract Execution

5. Priest Rapids Project Priest Rapids Development Priest Rapids is located approximately 60 southwest of Ephrata Washington on the Columbia River and is downstream of Wanapum Development. Wanapum Development Wanapum is located approximately 18 miles upstream of Priest Rapids on the Columbia River.

6. Priest Rapids Project Priest Rapids Development Generation Units 10 Rated Capacity 955.6 MW Length 10,103 ft. concrete/earth fill Rated Head 78 feet Construction Started July 1956 Generation Began October 1959 Storage Capacity 8,878 MWhs Wanapum Development Generation Units 10 Rated Capacity 1,038 MW Length 8,637 ft. concrete/earth fill Rated Head 80 feet Construction Started July 1959 Generation Began October 1963 Storage Capacity 17,419 MWhs

7. Priest Rapids Project Output 6% PRPO Slice is approx: Energy ~ 70 MW Capacity ~ 113 MW Storage ~ 1,578 MWhs 12.43% PRPO Slice is approx: Energy ~ 145 MW Capacity ~ 234 MW Storage ~ 3,269 MWhs

8. Points of Power Delivery Section 7 The 230 kV bus of the Bonneville Power Administration�s Midway Substation The 230 kV bus of the switchyard of the Wanapum Development The 230 kV bus of the Vantage Substation At any other location mutually agreed to by the District & the Auction Winner

9. PRP Operations Capacity is dependent upon: Units on-line De-ratings Losses Planned maintenance Non-power constraints Fish Operations Rock Island Encroachment Canadian Entitlement

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12. Units Available On average Priest Rapids has between 9 and 10 units available for generation. Wanapum, due to the advanced turbine replacement project, has had between 8 to 9 units available throughout the year.

13. Forced Outages > 5hrs In total there were 17 occurrences of Forced Outages between May 08 to May 09. Planned maintenance is generally done during periods that do not adversely effect generation at the projects.

14. Non Power Requirements (NPRs)

15. NPRs � Cont� License Minimum � PR 36 kcfs/ 365 days Reverse Load Factoring � Capacity constraints at Priest 300MW during daylight hrs/ 800MW+ during night � 5 wks starting mid-October Protection Level Flows � PR 60-70 kcfs/ mid-Nov through mid-April Rearing Period Operations � PR flow band is limited to between 20 to 60 kcfs/ mid-March through June

16. NPRs � Cont� Planned Fish Spill Program Mid April � 3rd Week in August Priest Rapids ~ 26 kcfs Wanapum ~ 22 kcfs

18. PRP De-ratings CEAEA � Canadian Entitlement ~100 MWa capacity ~ 57 MWa energy all returned on HLH Losses ~ 5 MWa at PR, 4 MWa at Wan Wanapum Encroachment ~17 MWa transfer from PR to Wan. Net zero to PRP RI (Rock Island) Encroachment ~ 70 MWa energy returned to Chelan PUD

20. Added Value of Owning a Slice of Hydro Dynamic Capability Reserves Shaping Mid-C trading Hub

21. Operational Rights & Responsibilities Pond Management Scheduling Procedures Preschedule Real Time Information Flow Joinder to Mid-C Hrly Coordination

22. Storage or Pondage�

23. Pond Management Inflows (power) � Outflows (Generation) = Change in Storage Pond account balance is supplied hrly via an ftp site, in MWhs & can be telemetered to you 5 am PPT, BPA sends estimate of uncoordinated flows from Chief Joe in kcfsd Pond Transfers � bilateral transactions to allow pond to be moved between parties

25. Scheduling Procedures - Preschedule Between 7-8:30am via e-mail or ftp site: Your Max & Min Generation Limits Pond Level Transmission Losses Canadian Entitlement Obligation This information is for the following day.

26. Scheduling Procedures � Cont�d The following information is made available via a secured ftp site: 5 am PPT, BPA publishes the CHJ uncoordinated flow estimates for following 8 days 8:30 am PPT, BPA publishes the estimated profile of their uncoordinated releases (in MWa over 8hr blocks, 2 HLH, 1LLH) ~ Noon PPT, BPA will provide updated estimate if change is significant

27. Auction Winner Must Provide Grant: 10 am PPT, pre-schedule of desired generation Pre-schedules must be above minimum and below maximum generation requirements Pre-schedules can be communicated to Grant electronically or verbally Pre-schedules are limited to the amount of daily capacity available divided by 15, + 1 ~9

28. The Auction Winner Can change the pre-schedule any time up to 20 minutes past each hour Must communicate real time changes to Grant verbally Will not exceed 3 schedules on an hourly basis on real-time, unless necessary to maintain positive pond balance or avoid spill Must ensure all tagging and other requirements are met each hour

29. Other Rights and Obligations of Auction Winner Option to join Mid-C Hourly Coordination To join MCHC � a letter must be submitted to the Chairman of the MCHC committee Obligated to be trained by Grant on MCHC requirements Provide identification of operating reserves on e-tags (pre-schedule and r/t)

30. Auction Process Pre-qualification Application Info Needed Determination of Guaranty and/or Collateral Requirements Preparation for Day of Auction Bid Form Documents to have ready Contract Execution Timing

31. Pre-qualification Process Ends Wednesday October 21, 2009 Must be pre-qualified to bid The application is available on-line at www.gcpud.org/powerauction Staff will contact applicants and notify you of your pre-qualification status and any guarantee requirements

32. Pre-qualification Application Reps Legal ability to enter into the auction Contract Ability to provide documentation authorizing Contract execution on behalf of Applicant Commitment to post collateral and/or guaranty (if needed) Commitment to provide credit info Commitment to sign Contract if deemed Auction Winner

33. Guaranty and Collateral Establishment Process

35. Collateral Threshold Table

36. Auction Winner with Investment Grade Rating of BBB+

38. Collateral Threshold Table

39. Auction Winner with Below Investment Grade Rating & Guarantor w/ A- Rating

41. Auction Winner with Below Investment Grade Rating w/ No Guarantor

42. Pre-qualification Response Grant will acknowledge in writing receipt of Pre-qualification Application. If a guaranty is required, it will restate who the Counter Party has selected to provide the guaranty. The Response will state the Guarantors credit issuer rating. The amount of the Collateral Threshold Offset will also be stated. Alternative collateral choices for unrated Counter Parties.

43. Guaranty The District has an approved Guaranty available on the website. - Suggestions for future auctions? Existing wholesale marketing guarantees could be used with modifications.

44. Bid Process and Contract Award Major changes from last year: Bid window has been shortened to 3 hrs Winner will be notified around 11:15 a.m. on Auction Day, Thursday November 5th Contract Awardance and Execution will happen on following day, Friday November 6th One Entity can win both slices

45. Bid Form Instructions Only Pre-qualified Bidders are eligible to submit a bid Must submit bid using Bid Form provided The auction will start at 8 a.m. on November 5, 2009 and end at 11a.m., P.P.T. the same day E-mailed bids will not be accepted Bids should be faxed to both numbers listed on the Bid Form or mailed Please do NOT round bid amounts

46. Contract Award Preparation Day of Auction have the following ready in the event you win: Guaranty Letter Collateral Documentation Corporate Resolution showing authority of individual signing OMAC to do so Person available to execute the contract

47. For More Information Contact Us at powermarketing@gcpud.org Visit our web-site at www.gcpud.org/powerauction Call Michiko Sell at 509.754.6614 or 509.361.9229 Call Brett Bergeson at 509.754.7219