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Expansion Forcing Mechanism June 15, 2006 Briefing of ColumbiaGrid Forum

Expansion Forcing Mechanism June 15, 2006 Briefing of ColumbiaGrid Forum. Agreed. There will be an expansion “forcing” mechanism Works from and strengthens ColumbiaGrid planning process Relies on ColumbiaGrid planning process for substantive recommendations

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Expansion Forcing Mechanism June 15, 2006 Briefing of ColumbiaGrid Forum

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  1. Expansion Forcing Mechanism June 15, 2006 Briefing of ColumbiaGrid Forum

  2. Agreed • There will be an expansion “forcing” mechanism • Works from and strengthens ColumbiaGrid planning process • Relies on ColumbiaGrid planning process for substantive recommendations • Provides further incentive for voluntary action in response to regional plan • Ensures unmet load service/firm service needs identified in plan are brought to FERC under existing and evolving authorities

  3. Principles • The forcing mechanism should have uniform application to all Parties • The entities whose systems have a “defined system need” for facilities should pay their appropriate shares of the cost of such facilities • While ColumbiaGrid brings a request regarding an unmet need to FERC, the other Parties are responsible for pursuing the request

  4. Steps • Regional plan includes projects that address load service/firm service needs (plan identifies what is to be built, who is to build, who pays, and how capacity impacts/rights are allocated) • For each such project, ColumbiaGrid develops a pro forma facilities agreement and tenders it to responsible entities • Facilities agreement contains force majeure provision and environmental review requirements (needs to encompass completion of environmental process)

  5. Steps • If approval of the governing body of the affected Party’s participation not obtained with respect to a facilities agreement, ColumbiaGrid takes request to FERC • Governing bodies include commissions, city councils, administrators, UTC/PUCs, co-op boards, IOU boards, etc. • If non-Party responsible entity does not agree, ColumbiaGrid takes request to FERC

  6. Specifics of Request to FERC • Request that FERC order the responsible entities to fulfill facilities agreement (what is to be built, who is to build, and who pays, how capacity impacts/rights are allocated) • Current thinking for Functional Agreement is to not set out the specific statutory provisions under which an order may be sought by ColumbiaGrid (in order to avoid narrowing ColumbiaGrid’s access to FERC) • May need to specifically exclude complaints under Section 215 or 206 (question - should ColumbiaGrid focus on getting facilities built as opposed to seeking penalties for failure to do so? [Should complaints to ERO and FERC be ruled out?])

  7. Specifics of Request to FERC • ColumbiaGrid files a request for order on behalf of all of the Parties to the Functional Agreement that have standing to seek FERC action • All Parties may be adversely affected because of need for regional planning and be negatively impacted from failure to follow plan • ColumbiaGrid will not pursue final order or settlement; rather, those other Parties that so choose will do so • However, Parties may choose not to have ColumbiaGrid file on their behalf if they become parties to the FERC proceeding in their own right and oppose some part of the requested order • The request for order will be in a standardized form, with notice to the Parties, and be filed with the pro forma facilities agreement

  8. Specifics of Request to FERC • In the event that FERC does not have or exercise jurisdiction over ColumbiaGrid’s requests for orders with respect to all affected Parties, the Parties will negotiate in good faith regarding whether modifications should be made to the forcing mechanism

  9. Upcoming Planning Session • June 21 Joint Meeting of the Planning Subgroup, Legal Drafting Team, and Integration Small Group (PDX Conference Center, 9 – 4)

  10. Timeline • Goal: Execution of Planning and Expansion Functional Agreement by October 15, 2006 • September 8th: Draft of Functional Agreement prepared with input from Planning Subgroup, Integration Small Group, Forum, and Legal Drafting Team (all groups are open to Interested Persons) • Mid-September: • Members Retreat in mid-September to confirm substance of agreement and discuss any remaining issues • ColumbiaGrid Forum/other work groups to provide final input after retreat • Late September: CEO Meeting to confirm substance of agreement

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