Large Generator Interconnection Procedures Reform

1. Large Generator Interconnection ProceduresReform 2nd Stakeholder Meeting May 5, 2009

2. Agenda • Background • Review of Overall Process and Discussion of Comments • Proposed Schedule May 5, 2009

3. February Proposal • Most of the changes adopted in January 2009 were retained. • Interconnection process based on Load and Resource Study and related Transmission Study. • New options for determining Network Upgrades. • Biannual Interconnection Request Windows. May 5, 2009

4. February Proposal • Queue Management: • First Come-First Served through the System Impact Study; • First Ready-First Served after the System Impact Study. • Multiple Customer options for proceeding to Facilities Study. May 5, 2009

5. $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) LGIA 100% Site Control Required Defer up to 1 year Customer SIS Review (with cost estimates) and FS Scoping Meeting Verify 50% of Site Control Proof of 50% site control at time of application Customer Shows Designation as Network Resource & submits deposit SIS After power flow portion of SIS, customer is must 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 Facilities Study Submit IR A B C D IC Facilities & Unit Specific Network Upgrades At Risk Path Customer submits deposit & TSR or proceeds at own risk Two month windows to submit application. IR Applications reviewed on semi-annual basis. Customer will have access to Base Case Data and may perform own Optional Feasibility Studies TSR Path Network Upgrade Studies

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

7. $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 Two-month windows to submit application IR Applications reviewed on semi-annual basis. B

8. 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 and Unit-Specific Network Upgrades C

9. Defer up to 1 year LGIA Customer shows designation as Network Resource & deposits 50% of IC Facilities & unit-specific Network Upgrades money SIS Review (with cost estimates) and FS Scoping Meeting Verify 50% of Site Control Facilities Study At Risk Path Customer deposits 50% of IC Facilities and unit-specific Network Upgrades money and submits TSR or proceeds at own risk TSR Path Network Upgrade Studies D

10. Network Resource Path • Network Customers submit Annual Load and Resource Plan. • Tri-State prepares Load and Resource Plan and related Transmission Plan. • Resource Zones identified • Network Upgrades identified • Tri-State funds the cost of Network Upgrades • Customer demonstrates that it is a planned Network Resource within Resource Zone. May 5, 2009

11. Network Resource Path • Facilities Study includes: • Interconnection Facilities • Unit-specific Network Upgrades required to interconnect the facility • Example: Ring Bus at Interconnection Substation is considered a Network Upgrade • Interconnection Customer will fund Interconnection Facilities and unit-specific Network Upgrades. • Interconnection Customer will receive transmission credits for Network Upgrades. May 5, 2009

12. Defer up to 1 year LGIA Customer shows designation as Network Resource & deposits 50% of IC Facilities & unit-specific Network Upgrades money SIS Review (with cost estimates) and FS Scoping Meeting Verify 50% of Site Control Facilities Study At Risk Path Customer deposits 50% of IC Facilities and unit-specific Network Upgrades money and submits TSR or proceeds at own risk TSR Path Network Upgrade Studies D

13. Transmission Reservation Path • Customer’s Generating facility is not a Network Resource within a Resource Zone. • Customer requests transmission under Tri-State’s Open Access Transmission Tariff. • Tri-State performs Transmission System Impact Study. • Identifies Network Upgrades required to deliver power across the system, not unit-specific Network Upgrades. May 5, 2009

14. Transmission Reservation Path • Interconnection Facilities Study: • Studies Interconnection Facilities and unit-specific Network Upgrades. • Incorporates results of Transmission System Impact Study Interconnection Customer funds Network Upgrades. • Interconnection Customer will fund Interconnection Facilities and unit-specific Network Upgrades. • Interconnection Customer will receive transmission credits for Network Upgrades. May 5, 2009

15. Defer up to 1 year LGIA Customer shows designation as Network Resource & deposits 50% of IC Facilities & unit-specific Network Upgrades money SIS Review (with cost estimates) and FS Scoping Meeting Verify 50% of Site Control Facilities Study At Risk Path Customer deposits 50% of IC Facilities and unit-specific Network Upgrades money and submits TSR or proceeds at own risk TSR Path Network Upgrade Studies D

16. At-Risk Path • Customer’s Generating facility is not a Network Resource within a Resource Zone. • Customer chooses not to request transmission. • Interconnection Facilities Study: • Studies Interconnection Facilities and unit-specific Network Upgrades • Interconnection Customer will fund Interconnection Facilities and unit-specific Network Upgrades. • Interconnection Customer will receive transmission credits for Network Upgrades. • Customer may use transmission system on an as-is basis, at its own risk for deliverability. May 5, 2009

17. Facilities Study Deferral • If Customer has not met all Facilities Study requirements, it may request one-time delay of up to 1 year. • When Customer is ready for Facilities Study, it is scheduled behind any other request that has previously met Facilities Study milestones. • First Ready First Served • Tri-State will use the original System Impact Study but may be required to update the study to reflect system changes during the deferral period. May 5, 2009

18. $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) LGIA 100% Site Control Required Defer up to 1 year Customer SIS Review (with cost estimates) and FS Scoping Meeting Verify 50% of Site Control Proof of 50% site control at time of application Customer Shows Designation as Network Resource & submits deposit SIS After power flow portion of SIS, customer is must 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 Facilities Study Submit IR A B C D IC Facilities & Unit Specific Network Upgrades At Risk Path Customer submits deposit & TSR or proceeds at own risk Two month windows to submit application. IR Applications reviewed on semi-annual basis. Customer will have access to Base Case Data and may perform own Optional Feasibility Studies TSR Path Network Upgrade Studies

19. Proposed Schedule • May 15th—Tri-State will post draft LGIP. • June 12th —Comments due on draft LGIP. • 30 days prior to Effective Date—post final LGIP on OASIS. • Late Summer 2009—LGIP is effective. • 30 days after Effective Date—publish Load and Resource Transmission Study. May 5, 2009

20. Addendum • Summary of Comments and Tri-State responses May 5, 2009

21. Key Comments and Responses • Feasibility Studies—elimination of Feasibility Study has negative impact on applicants —Establish Pre-Application Queue process and make Feasibility Study optional. • Experience for Tri-State is that Feasibility Studies provide little value. • Encourage applicants to conduct own screening studies using available WECC base-case data. May 5, 2009

22. Key Comments and Responses • Deposits—request for reduced, staged deposits: $40,000 to $90,000 • Tri-State deposits are intended to cover the estimated cost of Interconnection Studies and administration costs. • The suggested deposits will not cover study costs. • $25,000 will be non-refundable • The deposits will be used for study costs plus cost of administering requests. May 5, 2009

23. Key Comments and Responses • Site Control—requirements are too burdensome and too soon in the process. • Site Control is key to assessing the validity of interconnection requests. • Retain existing requirement for 50% of site control at application. • Delay 100% site control until execution of LGIA. • Strict site control requirements benefit both Tri-State and Interconnection Customers by helping to identify valid projects. May 5, 2009

24. Key Comments and Responses • Site Control—continued Tri-State expectations: At application Tri-State expects the application to include documentation of lease or ownership rights as along with a GIS map of the entire site with the areas under contract or option highlighted on the map. Documentation would typically include copies of leases, deeds, or option agreements, which Tri-State will treat as confidential information. May 5, 2009

25. Key Comments and Responses • Cluster Studies will be more effective than stand-alone studies proposed by Tri-State. • Tri-State does not agree that cluster studies will be more effective way of studying Interconnection Requests. • However, Tri-State has retained the right to use cluster studies where it determines that they may be a more efficient way of studying Interconnection Requests. • Tri-State is prepared to discuss this issue as part of the stakeholder process. May 5, 2009

26. Key Comments and Responses • Interconnection Studies should be linked to Long-Range Transmission Planning. • Tri-State will continue to use WECC base-cases modified to meet the needs of the Interconnection process. • Facilities identified in long range plans are often scheduled after the generators’ in service date. • Long-Range projects do not have CPCNs and can not be counted out for planning Network Upgrades. May 5, 2009

27. Key Comments and Responses • Suspension—Tri-State should expand ability to suspend construction—developers need more flexibility. • Suspension undermines certainty of planning process. • Customer has the ability to delay in-service date up to 5 years, but construction will proceed if it affects other requests. • Option to delay Facilities Study for up to one year. May 5, 2009

28. Key Comments and Responses • Proposal is discriminatory and may violate FERC Order 2003 • Tri-State, as a non-jurisdictional, is subject to limited FERC jurisdiction • Tri-State must meet FERC’s comparability and non-discrimination requirements • Tri-State’s proposal meets those thresholds • Tri-State proposes 3 paths for interconnection. • The paths are not intended to be equivalent but to provide customers options to interconnect May 5, 2009