Interconnection for Renewables

1. Interconnection for Renewables Geothermal Resources Council Annual Meeting Sparks, Nevada, October 2, 2007 By Brian Whalen - Manager Transmission Planning

2. Important Terms FERC OATT OASIS Order 2003 LGIA SGIA Interconnection Point Network Upgrade Direct Assigned Facility Transmission Credit PUCN At or Beyond RPS SIS Federal Power Act WECC NERC SCADA

3. Important FERC Policies Tennessee - 90 FERC � 61,238 Identified interconnection as OATT service Consumers - 95 FERC � 61,233 Took Stability and Short Circuit out of direct assignment Entergy - 98 FERC � 61,014 Provided basis for �At or Beyond� policy Nevada Power vs. FERC � DC Circuit Court of Appeals (twice) Legally tested �At or Beyond� � we lost Order 2003 (A, B, C, �) Established interconnection policies and pricing

4. Issues Who Pays? Who Rules? Who Owns? Who Cares?

5. Who Pays The end use customer always pays All the debate on funding is centered on confusion of who will initially pay for facilities. All parties recover costs through energy price, refunds or credits, or transmission rates. Up front funding of Network Upgrades by interconnecting party is capital intensive but subject to refund or credit � with interest.

6. Who Rules FERC has jurisdiction over interstate transmission, including interconnection PUCN has jurisdiction over buy side decisions and siting Local governments have SUP/Building Permit requirements WECC/NERC have reliability requirements Some of these tasks are opposed For example PUCN wants minimal transmission costs in native rates FERC wants maximum resources developed and is eager to assist via transmission incentives Local municipalities want the neighborhood preserved WECC/NERC want reliability maximized

7. Who Owns Utility owns everything from the interconnection point into the system. Interconnecting customer owns line from substation to their plant. Utility will own metering and SCADA at plant The Utility substation fence is usually thought of as the demarcation point

8. Who Cares US Congress State Legislature State Energy Office (Governor) FERC PUCN Utility Developer WECC NERC Special interests (Sierra Club, AWEA, GRC, �) Government Agencies (BLM, EPA, USFS, �) Concerned citizens In short, everybody

9. Going Forward Interconnection policies are well established. The major remaining obstacle is finding cost effective sites - relative to transmission (existing or future) � for development. With future transmission projects this means risk. Who bears that risk is the BIG question. Transmission expansion SPPC corridor study DOE corridor studies Nevada Renewable Energy Transmission Access Advisory Committee

10. Transmission Expansion Multitude of major trans-regional projects proposed Most are anchored by coal Most are increasingly in doubt Several are critically needed NPC/SPPC has built ~ 1 billion worth of transmission in the last 10 years including Alturas 345 Crystal 500 Falcon 345 Centennial 500 NPC/SPPC has proposed in IRPs another ~1 billion worth of transmission in the next 10 years including EN-ti 500 Ft Sage 345 Emma 345 Sunrise 500

11. SPPC Corridor Study SPPC IRP filing Requested 4 million dollars to do routing and siting studies on several potential corridors. Corridors are likely future transmission for renewables.

12. DOE Corridor Studies EPaAct2005 established 2 process Section 368 provided for identification and a PEIS on strategic transmission corridors on federal land in the west Section 1221 provided for the identification of national interest transmission corridors to be used under FERC�s new backstop siting authority Both have become politically entangled and have been delayed significantly

13. Nevada Energy Office Nevada Renewable Energy Transmission Access Advisory Committee Establishing multi-resource mapping system to aid in renewable development Includes exclusionary areas and resource potentials

14. Questions