Transmission Planning Overview of the NPC & SPPC Renewable Resources Initiatives SWAT Renewable Transmission Task Fo

1. May 19, 2008, Las Vegas, NV Alex Fratkin, Senior Engineer, Transmission Planning Sierra Pacific Power Co. & Nevada Power Co. Transmission Planning Overview of the NPC & SPPC Renewable Resources InitiativesSWAT Renewable Transmission Task Force Meeting

2. History: T4 Wind 2005 • This project was an integrated assessment of the wind energy potential in Nevada and southern Idaho. It included prospective transmission alternatives that could benefit wind energy development in Nevada, Idaho and neighboring states. This project was completed in 2005 in conjunction with DOE and the Nevada State Office of Energy

3. T4 Tasks • Wind Characterization in Nevada and southern Idaho • Transmission Studies identifying transmission alternatives that provide the wind development areas identified in Eastern Nevada and Southern Idaho access to the Mead trading hub • Transmission Studies identifying transmission alternatives that provide the wind development areas identified in Western Nevada with access to the Mid C and SP15 trading hubs via a tap of the DC intertie • Outreach Activities to the project stakeholders • Develop an Integrated Wind Energy and Transmission Report for presentation to the PUCN and FERC

5. RETAAC 2007 • Nevada Renewable Energy Transmission Access Advisory Committee • Identify commercially developable locations for renewable energy, ranking them based on size and viability and comparing them to Nevada’s energy needs and demand. • Assess existing and planned transmission access to these resources. • Make recommendations for additional transmission lines.

6. RETAAC Methodology • Generate Maps of the potential Resources • Identify Renewable Energy Zones • Identify where the renewable energy resources are in relation to the existing grid infrastructure • Identify potential environmental and right-of-way constraints to the construction and operation of transmission lines connection areas of potential renewable energy zones with the grid. • Identify Military airspace restrictions • Provide Recommendations

8. Recommendations made by RETAAC • Support the construction for transmission lines and collector systems to enable access for renewable energy development in each of the identified Renewable Energy Zones. • Support the construction for of a transmission line to connect the state’s northern and southern electric grids of sufficient capacity to provide the Companies with their renewable energy requirements. • Initiate Phase II of the RETAAC to define the environmental and physical feasibility issues, costs, and potential financing mechanisms associated with the recommended transmission routes.

9. IRP Filings • SPPC/ NPC 2007-2008 IRP filings Requested 4 million dollars to do routing and siting studies on several potential corridors. Corridors are likely future transmission for renewables.

10. Renewable Needs • Sierra has pretty well met RPS in the near – mid term • NPC will likely need 500 MW of high capacity factor renewables • At low capacity factors, transmission may need to be overbuilt • Northern Nevada geothermal and wind will likely source NPC RPS

11. Differences in Renewables • Geothermal looks and acts like a base load steam plant. Very easy to operate and transmit • Wind is highly dynamic – see note - and requires careful attention for both load & generation balancing and voltage control. Expensive dynamic voltage devices are often needed • Solar Thermal is intermediate of the two above. Easier to control and predict than wind but susceptible to dark unless storage is added. • Large scale Solar PV (100 MW+) is scary due to it’s almost immediate on/off characteristics. This can cause havoc on CPS2 numbers. Also susceptible to dark. Note: not spinning

12. Location of Quality Renewable Resources in Nevada • Wind – White Pine and Elko County • Solar – Clark County (& lately in Nye Co.) • Geothermal – Washoe, Esmeralda, Mineral, Churchill, Elko Counties • Geothermal supports a West side 345 or 500 kV tie-line between SPPC & NPC • Wind supports an East side 500 kV tie-line • Solar does not support either

13. DOE 368 Work • EPaAct2005 established two processes: • 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. The final PEIS is expected for Section 368 late this year.

14. Summary of Possible Interconnection from SPPC to NPC • 230 kV West • 230 kV East • 345 kV West • 345 kV East • 500 kV West • 500 kV East

15. 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

16. SPR Renewable Record • SPR is #1 in Solar per Capita • SPR is #1 in Geothermal per Capita • Nevada had one of the first RPS

17. Investing in Renewable EnergyHas Strong Support • Nevada already leads the nation in geothermal and solar capacity per capita • $2 billion investment to meet Nevada Renewable Portfolio Standard: • 20% of supplies from renewables by 2015 • 5% solar • 25% of requirement can be satisfied with energy conservation savings

18. Implementation of RPS Strategy

19. Our Portfolio of Renewable Supplies • 6 new projects (135 MW) in-service 2007-08 • 8 new geothermal plants (289 MW) under development • 2 of the world’s largest solar plants in S. NV • Portfolio of 36 projects totaling 588 MW • Adding 200 MW wind • Planning 500 kV transmission tie

20. Nevada ranks 2nd in geothermal resources, behind CA Nevada’s geothermal potential – 2,600 to 3,700 MW (U.S. DOE) Use of Abundant Resources: Geothermal Energy High Moderate Source: NREL

21. Use of Abundant Resources: Nevada’s Geothermal Plants • 20 plus year history in NV • 210 MW in operation • Another 308 MW to be on line by 2012 • Geothermal is firm, not intermittent energy • Competitive with conventional supplies • Plans are underway to partner on a project with Ormat

22. Use of Abundant Resources: Solar Power • Mojave Desert, centered in S. CA and extending into S. NV is the U.S.’ prime solar resource • Nevada is No.1 in solar kW per capita (25kW/1K ppl) • Solar technologies improving, but are not yet ready to compete on cost

23. Nevada Solar One – 64 MW Solar Thermal Plant Biggest U.S. solar plant in 16 years Third largest worldwide On line June 2007 Use of Abundant Resources: Nevada Solar One

24. Nellis Solar Star PV System 14 MW Nation’s largest 140 acres 72,000 panels Use of Abundant Resources: Nellis AFB Solar Star

25. Use of Abundant Resources: Wind Power • 200 MW wind farm planned near Jackpot • 80 to 100 wind turbines • Partnering with Renewable Energy Systems America • Other projects planned

26. Renewable Energy Supply Stack

27. Summary • By 2015 we will have expended over $2 billion to quadruple our renewable supplies • Customers want it, politicians want it, our regulators want it, and we want it. • We are continuing to add to our supply pipeline • Investing in renewable facilities is a key element of our strategy for the RPS • We have over $400 million earmarked for renewables investment between now and 2012 • We see this as an opportunity to enhance our earnings, our reputation, and our standing with regulators

28. Q & A Alturas helicopter construction