Why Consider Changing the Net System Power Mix Process?

1. Why Consider Changing the Net System Power Mix Process? Attachment 5 – NSPM Update Presentation • The net system power mix process is thought to be time consuming and cumbersome. • The process is thought to yield little added value when compared to alternate methods. DOJ has advised the PUC has great latitude in changing the process – with ODOE agreement - without Rule change.

2. Where Does the Requirement for Net System Power Mix Come From? • The Net System Power Mix exists only in Division 038. In that context it is used only as part of the Labeling requirement. • The Net System Power Mix is to be calculated, as determined by ODOE on behalf of the PUC, and applied to net market purchases of electricity (not company owned generating resources).

3. What is the Net System Power Mix Used For? PUC Staff held a conference call with users of the Net System Power Mix data and learned: • IOUs use it for their net market purchases in calculating their company specific power mix, then on their Label. • ESSs use it for their Label, as directed by Rule. • ETO uses it to calculate project environmental benefits and performance. • NWEC and RNP believe they use it for analysis regarding reduction of carbon emissions. • Counties are interested in having it available.

4. A Tour of Some Alternate Processes (Examples Only - Not Proposals) but First, What is the Current Process?

5. Current Net System Power Mix Process Lets Call This Process “ODOE”

6. Alternate Net System Power Mix Process With Reinterpretation of Net System Power Mix Definition Lets Call This Process “PUC”

7. Alternate Net System Power Mix Process With Simplified Interpretation of Net System Power Mix Definition Lets Call This Process “eGrid”

8. Comparison of Results Using Different Net System Power Mix Processes

9. Benefits of an Alternate Process • An alternate net system power mix process, as described above, could be carried out by PUC staff or staff from ODOE. • An alternate process could rely on third party data available on-line. • An alternate process does not necessarily require input from the IOUs, ESSs, or COUs. • Results can be comparable to those of the current process. • Could avoid contracting with WCTED/WSU, and reduce state staff resources.

10. Benefits of the Current Process • The current process is as accurate as any other process. • The current process does not mislead anyone. • The current process is familiar to those involved. • Continuing the current process eliminates resistance to change.