Large Generator Interconnection Procedures Reform

1. Large Generator Interconnection ProceduresReform Stakeholder Meeting February 19, 2009

2. Agenda • Goals and Expectations • Background • Recap of Recent Changes • LGIP Reform • Next Steps February 19, 2009

3. Goals and Expectations • Goal: Developa process that allows competitive generators to deliver their energy to load on a reliable transmission system. • Expectations of this stakeholder process: • An iterative process that examines Tri-State’s interconnection procedures; • Constructive dialog with stakeholders on specific improvements to Tri-State’s concept paper; • Final procedures that meet the goal. February 19, 2009

4. Background • In 2007 and 2008, 57 requests were added to Tri-State’s queue • Process became unmanageable • Recently several ISOs implemented queue reforms. • Tri-State reviewed these reform efforts and initiated its own. February 19, 2009

5. 2008 LGIP Process • Nov. 5, 2008: Tri-State stopped accepting applications. • Nov. 20, 2008: Interconnection Customer meeting on proposed LGIP modifications. • Nov.20-Dec.15, 2008 accepted comments. • Jan. 9, 2009: Posted modified LGIP with revisions based on comments. • Jan. 12, 2009: Modified LGIP effective • Jan. 12, 2009: Began accepting applications February 19, 2009

6. LGIP Changes Effective 1/12/09 • Application deposit: • $125,000 for projects 75 MW or less, • $250,000 for larger projects. • $25,000 is non-refundable if project drops out of queue. • Site Control: • No additional Deposit in lieu of Site Control • Require 50% of necessary land at application • 100% prior to interconnection agreement. February 19, 2009

7. LGIP Changes Effective 1/12/09 • Projects designated as a network resource or with a power purchase agreement receive priority for study work—FIRST READY-FIRST SERVED. • Prior to Facilities Study, network interconnection requestors must have power customer. • Suspension of construction for Force Majuere events only. • Only accept “immediately available funds” in advance. • Several changes to streamline study process. February 19, 2009

8. LGIP Reform • Tri-State’s LGIP Reform concept paper is the second step in a two step process • Changes in January were designed to improve queue management and the interconnection study process. • Tri-State’s LGIP Reform concept paper presents ideas that will simplify and expedite the generation interconnection process. February 19, 2009

9. LGIP Reform • Most of the changes adopted in January 2009 will be retained. • New Concepts: • Interconnection process based on Load and Resource Transmission Study. • New options for determining Network Upgrades. • Biannual Interconnection Request Windows. February 19, 2009

10. LGIP Reform • New Concepts (continued): • Multiple Customer options for proceeding to Facilities Study • Queue Management: • First Come-First Served through the System Impact Study, subject to priority for projects with designation as Network Resource; • First Ready-First Served after the System Impact Study. February 19, 2009

11. Load and Resource Plan • Load and Resource Plan • Submitted by all Network Customers. • Identify resource amounts and anticipated geographic areas. • Up to 4 resource distribution scenarios will be accepted with each plan. February 19, 2009

12. Draft Definition • Load and Resource Plan shall have the meaning set forth in Section 31.6 of the Tariff and shall identify projected load growth and projected amounts of generating capacity from each Resource Zone to meet the network integration transmission customers’ network load requirements. February 19, 2009

13. Load and Resource Transmission Study • Performed once annually • Will include transmission upgrades in Tri-State’s most recent 10 year transmission plan. • Will determine and estimate the cost of additional upgrades required to accommodate the needs presented in the Load and Resource Plans. February 19, 2009

14. Draft Definition • Load and Resource Transmission Study means a transmission planning study that models the Transmission System and identifies Network Upgrades and projected amounts of generation from each Resource Zone to accommodate the combined Load and Resource Plan. February 19, 2009

15. Draft Definition • Resource Zone means a geographic area that is a projected location for interconnection of new Network Resources to the Transmission System. Transmission Provider shall evaluate each Resource Zone on the basis of the combined Load and Resource Plan of all Network Integration Transmission Service customers as required by Section 31.6 of the Tariff, and in coordination with Transmission Provider’s applicable Tariff and regional transmission planning responsibilities. February 19, 2009

16. Interconnection Service • Pro Forma LGIP: • Energy Resource Interconnection Service • Network Resource Interconnection Service • Tri-State concept: • Single Interconnection Service • Focuses on Interconnection Facilities • Network Upgrades handled either in Load and Resource Study or subsequent to Transmission Service Request (TSR) February 19, 2009

17. Interconnection Service—Draft • Interconnection Service. For the purpose of Interconnection Service, Transmission Provider shall make no distinction among types of transmission service or delivery capabilities from physically similar Interconnection Facilities, except that Network Upgrades shall be identified either through a Load and Resource Transmission Study or through studies to be provided as part of a Transmission Service Request. February 19, 2009

18. Interconnection Service—Draft • The Product. Transmission Provider shall conduct the necessary Studies to construct the Interconnection Facilities and Network Upgrades needed to integrate the Large Generating Facility (1) in a manner comparable to that in which Transmission Provider integrates its generating facilities to serve native load customers based upon a Load and Resource Transmission Study that includes Network Upgrades; or (2) with Interconnection Facilities provided and Network Upgrades added pursuant to a Transmission Service Request; or (3) with Interconnection Facilities provided and Network Upgrades deferred at the Interconnection Customer’s own risk of operating limits for the purpose of future Transmission Service. February 19, 2009

19. Customer Attend Information Session at beginning of IR Application Window Review Published Load & Resource Transmission Study Customer may perform Optional Feasibility Studies and have access to Base Case Data A

20. $250,000 Study Deposit for >75 MW Projects OR, $125,000 Study Deposit for ≤ 75 MW Projects (Includes $25,000 non-refundable for both generation levels) Proof of 50% site control at time of application Submit IR IR Applications reviewed on semi-annual basis. Two-month windows to submit application B

21. SIS Scoping Meeting Three levels of generation allowed and specified for study at time of meeting SIS After power flow portion of SIS, customer is asked to select one generation level IC Facilities Only C

22. EXIT LGIA SIS Review (with cost estimates) and FS Scoping Meeting 100% of Site Control required at this point Customer shows designation as Network Resource Facilities Study At Risk Path Customer deposits IC Facilities money and submits TSR or proceeds at own risk TSR Path Network Upgrade Studies D

23. Alternatives for Advancement to Facilities Study • Interconnection Customer has five options: • Show designation as Network Resource; or • Advance funds for facility construction and submit Transmission Service Request (TSR); or • Advance funds for facility construction without TSR and proceed at own risk; or • Suspend work for up to one year; return to queue behind any project ready for Facilities Study; or • Withdraw project from the queue. February 19, 2009

24. $250,000 Study Deposit for >75 MW Projects OR, $125,000 Study Deposit for ≤ 75 MW Projects (Includes $25,000 non-refundable for both generation levels) EXIT Customer LGIA SIS Review (with cost estimates) and FS Scoping Meeting 100% of Site Control required at this point Proof of 50% site control at time of application SIS After power flow portion of SIS, customer is asked to select one generation level Review Published Load & Resource Trans-mission Study Attend Information Session at Beginning of IR Application Window SIS Scoping Meeting Three levels of generation allowed and specified for study at time of meeting Customer Shows Designation as Network Resource Facilities Study Submit IR A B C D IC Facilities Only At Risk Path Customer deposits IC Facilities money and submits TSR or proceeds at own risk IR Applications reviewed on semi-annual basis. Two month windows to submit application Customer may perform Optional Feasibility Studies and have access to Base Case Data TSR Path Network Upgrade Studies

25. Next Steps • March 19th—Comments due on concept. • April 21st—Tri-State will post comments and responses, and formal proposal. • May 5th—Second Stakeholder meeting. • June 5th—Second round of comments due. • Balance of timeline will be determined after second stakeholder meeting. February 19, 2009

26. Comments • Submit your comments today or by March 19th to: • Ron Steinbach Transmission Policy Administrator Tri-State Generation and Transmission Association, Inc. P.O. Box 33695 Denver, CO 80233 • OR to • LGIPcomments@tristategt.org • Questions—call Ron at • 303-254-3355 February 19, 2009