Steve Ellenbecker (Wyoming Governor’s Office)

1. WGA’s Clean and Diversified Energy Initiative (CDEi) and Proposal for Regional Wind Integration Study Steve Ellenbecker (Wyoming Governor’s Office) Doug Larson and Thomas Carr (Western Interstate Energy Board) Bob Anderson (WestWindWires) Debbie Lew (NREL) Transmission Expansion Planning Policy Committee Scottsdale, AZ February 15, 2007

2. Outline of Presentation • Background: CDEAC to CDEi • Role for TEPPC and Sub-regional planning groups • Policy Recommendations • NWCC • Proposal for Regional Wind Integration Study

3. I. Background: CDEAC to CDEi • June 2004 – Western Governors adopt clean and diversified energy resolution • Goals • Develop 30,000 MW of clean energy by 2015 • Achieve a 20% increase in energy efficiency by 2020 • Ensure a reliable and secure transmission grid for the next 25 years

4. Clean and Diversified Energy Advisory Committee (CDEAC)

5. CDEAC Findings • Governor’s goals attainable • Abundant clean resource base in WGA region: • Energy efficiency 48,000 MW • Advanced coal 5,000 MW • Biomass 10,000 MW • Geothermal 5,600 – 13,000 MW • Solar 8,000 MW • Wind 9,175-54,000 MW

6. Governors Adopt CDEAC Report and Recommendations • June 2006 – Governors adopt resolution embracing the CDEAC report • Next steps: implementing the recommendations through collaboration with key parties

7. WGA’s Clean and Diversified Energy Initiative (CDEi) • CDEi implements the recommendations to attain the Governors’ energy goals • WGA and NWCC Conference in Broomfield, CO in July 2006 • Hosting workshops and webinars • Formation of National Clean Energy Strategy Group • Drafting legislation for Congress • Website updates and tracking progress

8. II. Role for TEPPC and Sub-regional Planning Groups • WGA looks to TEPPC and the Sub-regional Planning Groups • Continue with pro-active, transparent and inclusive transmission planning • Implement relevant CDEAC recommendations • Pursue innovative planning and operational steps to further the CDEAC goals

9. III. Policy Recommendations • Transmission Task Force • Wind Task Force

10. Transmission Task Force • Efficient Use of Existing Transmission • #1: Adopt Conditional Firm and related transmission tariff products • #2: Review & assess Available Transfer Capability (ATC) levels • #3: Eliminate Rate Pancaking (i.e. multiple fees imposed across multiple control areas) • #4: Promote control area consolidation (or virtual consolidation) • #5: Encourage economic dispatch • #6: Support common OASIS sites

11. Transmission Task Force • Transmission Planning • #7: Support Regional Planning • 7(a) – Resources and institutions • 7(b) – Regional impacts in regulatory reviews • 7(c) – Planning supports regulatory analysis • 7(d) – Synchronize planning efforts • # 8: State leadership role • #9: Queue reform for interconnection • #10: Open season process

12. Transmission Task Force • Cost Allocation & Cost Recovery • #11: Presumption of Prudence • Reduce risk with tiered standard of review • #12: Public Interest & Regulatory Incentives • Transmission to meet RPS goals public interest • Factors in regulatory decisions on transmission • #13: Transmission in Advance of generation • Texas and Minn. Legislation • Tehachapi model • #15: Transmission Incentives • E.g. Higher rates of return, quicker cost recovery, avoid unrecoverable trapped costs

13. Transmission Task Force • Transmission Siting and Permitting • #18: Siting and Permitting Arenas • #18(a): Implement WGA and MGA Transmission Protocols • #18(b): Consider Interstate Siting Compact in response to Section 1221 of EPAct 2005 • #18(c): Governors coordinate siting processes within their own state • #19: Federal Land Coordination • Section 368 of EPAct 2005 federal land corridors

14. Wind Task Force • #1: Enact long-term extension of the Production Tax Credit (PTC) and make useful to non-profits, tax exempt entities, public utilities, and tribes. • #2: Implement a conditional-firm and related tariff reforms for transmission; Review ATC on transmission paths. • #3: Reform imbalance penalty policy • Cost causation principles • Link to near-term scheduling and wind forecasting

15. Wind Task Force • #4: Policies to plan and build transmission to wind/renewable resource areas • Texas and Minnesota legislation 2005 • Renewable trunk-line proposal by SCE • #5: Transmission planning, regulatory findings, and siting issues • Enhance transmission planning capability • Transmission supporting RPS goals are a public benefit and should be granted rolled-in rates • Coordinate federal-state-local-tribal siting for wind projects/transmission; corridors on federal lands • #6: Support studies of integrating higher levels of wind penetration

16. Wind Task Force • #7: Study federal PMA (BPA, WAPA) opportunities to integrate wind into the system • #8: Studies and R&D to develop storage and generation to complement intermittency of wind generation • #9: Implement performance based regulatory incentives for wind acquisitions • #10: Use government procurement to support wind energy

17. For more information on CDEAC recommendations and the new CDEi effort: • http://www.westgov.org/wga/initiatives/cdeac/index.htm

18. IV. NWCCBob Anderson, WestWindWiresbob-a@sbcglobal.net • WGA’s CDEAC recommendations • Longmont, CO July, 2006 • 10 action items, 4 groups • Ongoing implementation activities

19. FERC OATT Reform • Conditional firm, redispatch • Flow-based ATC • Imbalance penalties Many implementation activities Comments, fact sheets, Webinar Order issued as we speak

20. Wind integration 4. Studies BPA, NREL (stay tuned) 5. Control area coordination ala NTTG 10. PMAs Western

21. Transmission incentives 7. Presumption of prudence Studies needed 9. Regulatory mechanisms Studies needed 8. Transmission in advance of clean generation ala MN, TX (CREZ), Tehachapi

22. Regional, Subregional Planning • Enhance state participation • Meso-scale wind modeling • Tariff rider for state participation • Webinar on good planning • Support TEPPC

23. Highlights for TEPPC • Consistency among subregions • IRP • Principles • Processes • Transmission in advance of clean generation • Include in case studies • Active state participation • Environmental perspective • Regional/subregional integration studies and meso-scale modeling

24. V. Proposal for Regional Wind Integration Study Debbie Lew (NREL)

25. Background • Goal – to support multi-state interests in understanding the operating and cost impacts of varying penetrations of wind power on the grid, in line with Western Governor’s CDEAi • NREL’s Systems Integration Program provides technical review for wind integration studies (e.g., NY, MN, CO, CA, NW) • NREL has funding and a subcontractor, GE Energy, and is seeking a larger wind integration effort that would be regional and include examination of long distance transmission of wind and would build on existing/in process studies • Proposal – to examine southwest, especially loads in Phoenix and Las Vegas, and wind resources in southwest and Rocky Mountain area

26. Steps for Wind Integration Study • Meso-scale modeling of wind • Need coincident time series wind data for region – existing wind data is not time coincident • Examine load statistics and match with wind plant output • Wind/load data from same year (retains underlying correlation) • Examine extreme events • Generator response • Capabilities of existing and planned fleet • Mitigation • Revised operating procedures • Increased reserves • Greater use of regional resources via expanded markets or contracting

27. Questions that would be addressed in this study • Is it cheaper to use local wind resources or import better class resources from out-of-state? • How do out-of-state resources compare to local wind resources for matching load profiles? Does geographical diversity help reduce system variability? • What are the benefits from long distance transmission that accesses multiple wind resources that are geographically diverse? • Can the required transmission costs be covered by wind or other future generation sources? • What additional system operational impacts or costs are imposed by wind variability? What kinds of mitigation measures help to manage that variability? • How does hydro help with wind integration? • What is the role and value of wind forecasting? • What benefit does Balancing Area cooperation or consolidation bring to wind variability management? • Is there a benefit to aggregating regional wind demand instead of individual utility action? • How does each wind area contribute to reliability and capacity value?

28. Next steps • How to dovetail this study with ongoing activities – both wind impact studies and transmission activities • How soon do you need info and what is your schedule (TransWest Express, Zia, West Connect, APS integration study, etc)? • Establish Technical Review Committee to oversee scope of study and request consistent engagement • Data requirements • In-kind support – from utility technical participants • Note that wind data and results will be made public