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NETWORK OPERATING COMMITTEE ANNUAL MEETING

The Network Operating Committee convened on October 28, 2010, to discuss key agreements regarding Network Integration Transmission Service. The meeting highlighted existing contracts, including interconnection and operating agreements with Avista and surrounding utilities. Topics included the renewal of twelve contracts set to expire on September 30, 2011, and proposed steps for resource designation within BPA and Avista balancing areas. Participants addressed the necessary updates for generator interconnections and the process for designating new resources under revised agreements.

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NETWORK OPERATING COMMITTEE ANNUAL MEETING

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  1. NETWORK OPERATING COMMITTEEANNUAL MEETING October 28, 2010

  2. NEW NETWORK INTEGRATIONTRANSMISSION SERVICEAGREEMENTS Network Operating Committee Meeting October 28, 2010

  3. EXISTING CONTRACTS • Interconnection and Operating Agreements • Direct relationship between Avista and interconnecting utilities • Provide for ongoing interconnection relationship at each point of delivery for interconnecting utility loads • Does not provide for transmission service or ancillary services • Does not provide for operational details covering generators connected to local utility system • Network Integration Transmission Service • Twelve separate Avista-BPA contracts • Expire on September 30, 2011

  4. NEW CONTRACTS • Network Integration Transmission Service • Twelve separate Avista-BPA contracts, each covering service to a BPA utility customer • Essentially the same as prior contracts • May include new provisions in attached Network Operating Agreement to cover certain generation operating issues

  5. GENERATION INTERCONNECTION • Generators Connected to Local Utility System • Need to revise existing Interconnection and Operating Agreement to include provisions for generation operations (e.g. telemetry) • Generators Connected Directly to Avista System • FERC-mandated generation interconnection process must be followed, per Avista’s Tariff • Feasibility Study, System Impact Study, Facilities Study • New Interconnection Agreement (standard form) • No revisions to existing agreement

  6. PROCESS FOR DESIGNATINGNEW RESOURCES Network Operating Committee Meeting October 28, 2010

  7. PROPOSED STEPS FOR RESOURCE DESIGNATION UNDER NEW CONTRACTS • Designation of resources within BPA Balancing Area • Designation of resources within the Avista Balancing Area

  8. DESIGNATION OF RESOURCES WITHINBPA BALANCING AREA • Purchase of transmission on the BPA system to border of Avista System • Utilize BPA Network Transmission on Avista system to deliver to load (subject to BPA approval) • BPA files form (available on Avista OASIS) to designate Network Resource (Tariff Section 29) • BPA includes attestation with designation per Section 29.2 (vii)

  9. DESIGNATION OF RESOURCES WITHINAVISTA BALANCING AREA • Utilize BPA Network Transmission on Avista system to deliver to load (subject to BPA approval) • BPA files form (available on Avista OASIS) to designate Network Resource (Tariff Section 29) • BPA includes attestation with designation per Section 29.2 (vii) • Generation-related ancillary service charges to be included in BPA/Avista NITSA for Interconnection Customer

  10. NETWORK OPERATING COMMITTEEANNUAL MEETING October 28, 2010

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