Sierra Subregional Planning Group Proposed 2011 Study Scope

1. Sierra Subregional Planning Group Proposed 2011 Study Scope New Projects West Connect Annual Stakeholders Meeting, February 17, 2011, Las Vegas, NV

2. SSPG 2011 Study Request to the Western Electricity Coordinating CouncilJanuary 26, 2011 • The SSPG requests that WECC study three specific scenarios in order to determine the differential cost of each of the scenarios relative to the base case. This will provide insight into the viability of the proposed projects and their performance relative to other previously proposed projects. The three scenarios requested by SSPG are as follows: • 1000 MW Lassen Municipal Utility District (“LMUD”) trans-Sierra tie line with full renewable energy capacity subscription • (2) 1000 MW Great Basin HVDC trans-Sierra tie line with full renewable energy capacity subscription, and • (3) 2000 MW trans-Sierra capability (combination of Scenarios #1 and #2) with 80% renewable subscription and 20% economic dispatch capacity.

3. Request Background This analysis should produce a least cost view of resource and transmission investments over the relevant planning horizon. Due to the high capacity factors of renewable energy in Northern Nevada, the short distances between generators and end-users, the project “right sizing” to allow an expedited in-service date, and the use of existing corridors and/or innovative transmission technologies to facilitate permitting, any of the three scenarios are likely to be highly competitive with other larger scope projects that SSPG and others have requested TEPPC to investigate in their 2010 and 2011 study programs.

4. Reference Case SSPG recommends that a base case be developed using current regulator approved utility integrated resource plans (IRPs) – specifically, yearly supply side resource and load forecast data. Below is a list of additional assumptions SSPG believes need to be addressed in the base case. • Compliance with existing state Renewable Portfolio Standards (RPS) and Demand Side Management (DSM) standards • Includes renewable generators in-service, under construction or with state approved Purchased Power Agreements • Base case to use normal weather load forecast with sensitivity to an adverse weather and low load forecast • Capacity needed and associated costs for balancing intermittent resources • Default assumption of no federal carbon regulation SSPG is requesting this base case for benchmarking our requested studies against and to allow a common base to compare previously run cases.

5. Case 1 (LMUD): SSPG requests that this case be constructed with the following modifications to the Reference Case: • A new PROMOD path be created connecting the Sierra Pacific Power Balancing Authority Area (“BAA”) (a new Viewland 345/230 kV substation interconnected with the Hilltop-Fort Sage 345-kV line) to the Sacramento Municipal Utility District (“SMUD”) BAA (Olinda 230 kV) • This path would have a 1000 MW capability • This path is a new double circuit, double bundled 230 kV line approximately 130 miles long • In-service is expected to be 4/01/15. • Capital investment in the tie line is estimated at $250-$300 million. • Capital investment in the collector system to source this line is estimated to be $400 million (costs are based on the NVE 2010 Conceptual Renewable Energy Trans. Plan)

6. Case 1 (Cont.) • This path will be 100% subscribed by the following: • 33% wind • 33% Geothermal • 20% CSP • 13% PV • These resources will have the following capacity factors: • 25-30% wind • 90% Geothermal • 60% CSP • 25% PV • These resources will have the following incremental generation credit: • 0% wind • 90% Geothermal • 90% CSP • 70% PV • These resources are estimated to cost: • o Wind $105 /MW Levelized Cost of Energy (LCOE) • o Geothermal $98 /MW LCOE • o CSP $147 /MW LCOE • o PV $146 /MW LCOE Note: Prices are out of the 2010 PUCN RPS proceeding

7. Case 1 Diagram

8. Case 2 (Great Basin HVDC) SSPG requested that this case be constructed with the following modifications to the Reference Case: • A new PROMOD path be created connecting the Sierra Pacific Power BAA (Tracy 345 kV) to the SMUD BAA (O’Banion 230 kV) • This path would have a 1000 MW capability • This path is a new +400 kV HVDC underground line approximately 125 miles long • This path will be 90% subscribed by geothermal • with 10% reserved for economic transfers • These resources will have the following capacity factors: • 90% Geothermal – based off summer nameplate • These resources will have the following incremental generation credit: • 90% Geothermal • These resources are estimated to cost: • Geothermal $98 /MW LCOE Note: Prices are out of the 2010 Public Utilities Commission of Nevada (PUCN) RPS proceeding • In-service is expected to be 12/01/2016 • Capital investment in the tie line is estimated at $750 million. • Capital investment in the collector system to source this line is estimated to be $300 Million (based on the NVE 2010 Conceptual Renewable Energy Transm. Plan)

9. Case 2 Diagram

10. Case 3 (LMUD and Great Basin HVDC) SSPG requested that this case be constructed from the Reference Case and include both of the previously listed projects compiled into a single case with a total capacity of 2000 MW from the Sierra Pacific BAA into the SMUD BAA. • Capital investment in the collector system to source this line is estimated to be $590 million (based on the NVE 2010 Conceptual Renewable Energy Transm. Plan)

11. Electrical Reliability Studies • SSPG will be conducting the technical electrical analysis (power flow and stability) of these three cases in parallel with the requested TAS economic analysis. SMUD, Sierra Pacific, Transmission Agency of Northern California (TANC), and Western have each committed to provide staff to perform these regional studies.