Natural Gas-Electric Coordination Conference Western Electricity Coordinating Council

1. Natural Gas-Electric Coordination ConferenceWestern Electricity Coordinating Council Clay Riding Director, Natural Gas Resources November 13, 2012

2. Gas / Electric Coordination • FERC Request for Comments (AD12-12): • FERC involvement to ensure better coordination & communication? (Especially during cold weather and emergency events to maintain reliability.) • What, if anything, should be delegated to NERC, NAESB or others? • Address at regional level? With FERC oversight? Monitor/enforce how? • New pipeline and storage services and pricing structures for generators? • Different views for organized markets vs. bi-lateral markets? • Electric generation will likely change gas flows – should FERC address? • Harmonize “days” and intra-day and preschedule trading/scheduling? • Impact of coal and oil-fired generation retirements? • Should FERC modify standards of conduct to assure greater coordination? Only in emergencies? For planning? • Should FERC take a “basket” approach in addressing these? What are the appropriate baskets? • Electric reliability standards with respect to firm fuel supply? • Enhance FERC process for infrastructure to ensure adequacy?

3. AGA Response to AD12-12 Overarching goal should be preserve and enhance reliability for all customers! And there was nearly universal agreement in tackling the issues regionally. • Regional stakeholder process: • FERC should convene technical conferences at both the national and regional levels • Commissioners should participate • Enhance understanding across both markets of day-to-day operations and the longer-term impacts on operations, planning and costs • Draw on regional experience and expertise of all stakeholders • Understand each region’s current efforts to enhance coordination; expand on those efforts, as possible

4. PNW Gas Demand

5. Pacific Northwest Infrastructure Station 2 Pipelines Spectra Westcoast Williams NWP TransCanada GTN Terasen S. Crossing Sumas Kingsgate Storage Facilities Jackson Prairie Mist Starr Road Stanfield LNG Storage Facilities Plymouth (NWP) Newport (NWN) Portland (NWN) Tilbury (Terasen) Nampa (Intermountain) Mt. Hayes (Terasen) Malin Kemmerer

6. Regional Response So….What has the Pacific Northwest discussed? • Enhance communications and coordination: • Understand operational vulnerabilities • Collaborate on long-term planning efforts • Develop processes that will endure • Determine service needs and work with service providers to develop appropriate services: • Expectations that services will be developed without market support is unrealistic • Gas utilities have operated under this mode for years…it works, but we collectively need to have a handle on what we need and how we expect to operate The Pacific Northwest had a bit of a head start…

7. Northwest Mutual Assistance Participants: • Avista Corp. • Bonneville Power Authority • Cascade Natural Gas • Clark County PUD • FortisBC • Idaho Power • Intermountain Gas • Northwest Natural • Northwest Pipeline GP • TransCanada (GTN) • PacifiCorp • Pacific Northern Gas Ltd. • Portland General Electric • Puget Sound Energy • Ruby Pipeline • Seattle City Light • Spectra • Tacoma Power Chair: Clay Riding, Puget Sound Energy Vice Chair: Jan Caldwell, Northwest Pipeline • Other involved entities: • Northwest Industrial Gas Users • NWGA • PNUCC • Western Energy Institute

8. NWMA Objectives • Communication! Communication! Communication! • Emergency Planning Committee: • Meet at least twice a year – • Fall – Discuss upcoming winter outlook and issues • Spring – Review previous winter and effectiveness of NWMAA • Maintain key contact list for all participants • Coordinate periodic tabletop emergency exercises • Manage NWMAA • Develop and maintain protocol for region-wide communication during emergency events—convened by affected pipelines or other system operators – • Implemented a service (NotiFind) that facilitates emergency notifications by phone, text and email

9. NWMA Concerns • Communication! Communication! Communication! • Keeping emergency contact lists fresh and maintaining a ready capability to instantly reach out (email, text, phone messages, etc.) • Relevant participant representatives must be able to communicate in an emergency to fully implement optimal solutions: • Standards of conduct issues if transmission personnel are on a call with marketing personnel? Need to be addressed? • Commercial operations folks must be involved as should those that understand critical electric transmission issues, due to the convergence of power and gas in the region • Conducting relevant drills and exercises • Conducting effective communications during emergencies

10. Longer-term Reliability Initiative • Joint initiative – • Northwest Gas Association (NWGA) • Pacific Northwest Utilities Conference Committee (PNUCC) • Scope – explore and address the long-term panning and reliability challenges stemming from the high interdependence of the PNW power & gas industries Membership (representatives from each of the following): • Power utilities with gas-fired generation • BPA (Transmission & Generation) • Columbia Grid • Combined power and gas utilities • Natural gas utilities • Natural gas pipeline companies • Gas storage owner/operator

11. Longer-term Reliability Initiative Initial Tasks: • Primer on status of industries – inventory pipeline capacity, generating capacity, generation needs, standard vocabulary • White paper comparing planning perspectives – planning margins, design days, contingency planning • BPA white paper on gas/electric interdependencies • Perform scenario analyses to establish system stress points • Inventory work being done by others, to ensure efficiency of effort • Stay plugged into FERC/NERC progress Eventual Work Product: • Identify critical issues such as the need for pipeline and/or gas storage expansion, reliability of natural gas compressor stations (and other critical infrastructure), single points of failure, and necessary changes to operating rules and/or regulatory framework • Present analyses, conclusions and recommendations to the NWGA & PNUCC boards, and to regional policy makers and stakeholders