1

4th Quarter 2013 Transmission Stakeholder

Planning Meeting

Reno, NVDecember 18, 2013

2

Agenda1. Regulatory Filings Update2. Integrated Resource Plan Update3. SB 123- NVision 4. Stakeholder Input

Transmission Stakeholder Planning Input Meeting

3

Regulatory Filings Update One Company Filing One Company Rate Case Tariff Changes NPC Rate Case Settlement FERC Order 1000

4

One Company Filing Docket EC13-113

NVE filed an Application For Approval of Internal Reorganization May 31, 2013 ◦ Sierra Pacific to merge into Nevada Power.◦ The surviving entity will be renamed NV Energy

Operating Company.◦ The transaction to be effective January 1, 2014 or

the in-service date of ON Line.◦ FERC issued an order on November 26, 2013

authorizing the transaction.

5

Combined FERC Rate CaseSummary: Docket ER13-1605

NVE filed a combined rate case May 31, ◦ One set of rates for NV Energy Operating Company

(the combined company)◦ ON Line costs included

Expected completion – December 2013◦ Rates effective January 1, 2014◦ Transmission and NITS rate to be $3.57 per kW

month◦ ROE – 10.50%◦ Loss for combined BAA updated 1.57%◦ Updated rates for Sch. 1, 2, 3, 5, 6, 7, 8, 11 & NITS

6

FERC Rate Case Summary (Cont.)

The case is currently in settlement proceedings at FERC.

Next settlement conference is scheduled for Thursday, January 16, 2014 at FERC.

7

Tariff ChangesDocket ER13-1607

Tariff for NV Energy Operating Company requested to be effective Jan. 1, 2014

Tariff updated to reflect one BAA (SPPC / NEVP to be combined to NVE on 1/1/14)

8

NPC filed a stand-alone rate case October 31, 2012.

On December 31, 2012 FERC accepted the filing and suspended the rates for five months to be effective June 1, 2013.

The December 31, 2012 order also established hearing and settlement judge proceedings.

Settlement was reached and NPC filed the settlement November 27, 2013.

On December 5, 2013 the Chief Judge granted a Motion for Interim Rate Relief effective November 1, 2013.

NPC FERC Rate Case Summary Docket ER13-255

ER13-255 Settlement Rates

Schedule

Description Settled Rate

Measurement Rate

Basic Rate

Firm Point to Point Service $1.88 KW per month

Basic Rate

Non-Firm Point to Point Service

$1.88 KW per month

Basic Rate

Network Integration Transmission Service

$1.88 KW per month

1 Scheduling $70.92 MW per month

2 Reactive Supply $292.00 MW per month

3 Regulation $7.25 KW per month

5 Spinning Reserve $7.25 KW per month

6 Supplemental Reserve $7.10 KW per month

11 Generator Regulation $7.25 KW per month

10

FERC Order 1000

On July 21, 2011, the Federal Energy Regulatory Commission (“FERC”) issued Order No. 1000, Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities (“Order 1000”), which became effective on October 11, 2011

Four areas of reform:◦ Regional transmission planning◦ Interregional transmission planning coordination ◦ Right of First Refusal (ROFR) – N/A to Nevada◦ Cost Allocation

11

FERC Order 1000 Planning Requirements

Public Utility Transmission Providers (“TPs”) required to participate in a regional planning process that satisfies Order 890 principles (coordination, openness, transparency, information exchange, comparability, dispute resolution and economic planning) and produces a regional transmission plan◦ Each region to produce a regional plan reflecting solutions

that meet the region’s needs more efficiently or cost effectively

Local and Regional transmission planning processes must consider transmission needs driven by “Public Policy Requirements” established by state or federal laws or regulations

TPs in each pair of neighboring planning regions must coordinate to determine if more efficient or cost-effective solutions are available

12

What Order No. 1000 Does Not Require• Order is process, not outcome, oriented• FERC did not prescribe the exact manner for public

utilities to develop the regional transmission planning process, but rather only set forth principles for public utilities, in consultation with stakeholders, to develop a transmission planning process for their regions (P157)

• FERC did not require that the regional transmission planning process create/establish obligations to build or commitments to construct transmission facilities – rather Order 1000 simply sets forth principles public utilities need to consider in developing a regional transmission planning process (P159)

13

FERC Order on WestConnect Compliance Filing issued March 22, 2013

FERC concluded that the WestConnect filing partially complied with the requirements of Order No. 1000and directed further compliance filings:

State that WestConnect has an obligation to identify transmission solutions in the regional transmission planning process that more efficiently or cost-effectively meet transmission needs

Address Order No. 1000’s requirement to consider transmission needs driven by public policy requirements

Provide that regional cost allocations are binding on identified beneficiaries.

14

Integrated Resource Plan (IRP) Status

15

Nevada Power Company Load Forecast

HOTWEATHER

ENERGY PCT PEAK PCT PEAK PCT

Year (GWH) GROWTH (MW) GROWTH (MW) GROWTH

2012 21,856 5,571 5,8072013 21,889 0.2% 5,604 0.6% 5,841 0.6%2014 22,089 0.9% 5,656 0.9% 5,896 0.9%2015 22,144 0.3% 5,629 -0.5% 5,867 -0.5%2016 22,313 0.8% 5,654 0.4% 5,893 0.4%2017 22,492 0.8% 5,713 1.0% 5,955 1.1%2018 22,803 1.4% 5,795 1.4% 6,040 1.4%2019 23,129 1.4% 5,883 1.5% 6,132 1.5%2020 23,477 1.5% 5,963 1.4% 6,216 1.4%2021 23,714 1.0% 6,043 1.3% 6,299 1.3%2022 23,954 1.0% 6,108 1.1% 6,367 1.1%2023 24,227 1.1% 6,180 1.2% 6,442 1.2%

16

Sierra Pacific Power Company Load Forecast

HOT

WEATHER

ENERGY PCT PEAK PCT PEAK PCT

Year (GWH) GROWTH (MW) GROWTH (MW) GROWTH

2012 8,949 1,621 1,683

2013 9,179 2.6% 1,664 2.7% 1,728 2.7%

2014 9,123 -0.6% 1,659 -0.3% 1,723 -0.3%

2015 9,139 0.2% 1,663 0.2% 1,723 0.0%

2016 9,268 1.4% 1,583 -4.8% 1,727 0.2%

2017 8,782 -5.2% 1,620 2.3% 1,644 -4.8%

2018 9,061 3.2% 1,651 1.9% 1,683 2.4%

2019 9,274 2.4% 1,669 1.1% 1,715 1.9%

2020 9,374 1.1% 1,684 0.9% 1,733 1.0%

2021 9,474 1.1% 1,697 0.8% 1,749 0.9%

2022 9,498 0.3% 1,703 0.4% 1,763 0.8%

2023 9,500 0.0% 1,720 1.0% 1,769 0.3%

17

2013 Actual vs Forecast System Peak Load

RECORDED FORECAST

      Daily Temperatures  

20-yr average Temps  

(MW) Date Hour Max Min (MW) Max Min

South 5,854 7/2/2013 5:00 PM 115 90 5,604 112 87

North 1,720 7/22/2013 5:00 PM 101 69 1,664 101 64

18

1. 2012 IRP filed June 2012 (Docket 12-06053)2. Planning period: 2013 – 20323. PUCN Final Order December 24, 2012 4. PUCN approval was not requested for any new

transmission projects

Nevada Power Company Integrated Resource Plan (IRP) Status

19

ON Line Transmission Project

Nevada Power IRP Transmission Projects

Figure 1: ON Line versus major WECC Paths

Cry-HA (#77)

TOT 2B (#78/79)

PGE-SPP (#24)

ALTURAS (#76)

CENT/S. CUTPLANE

ON Line RB-HA (#35)

IN/PAV-GON (#32)

ID-SPP (#16)

MDW-LBNS (#15)

COI (#66)

ID-NW (#14)

NW (BPA)

UTAH (PAC)

NPC

ID (IPC)

CA/AZ (SCE/LA/WAPA/APS)

CA (PG&E) SPPC

“C” (#20)

20

ON Line versus Major WECC Paths

21

On-Line ProjectSCOPE

◦ 235-mile 500 kV transmission line Robinson-Harry Allen

◦ Robinson Summit 500/345 kV substation

◦ Falcon-Gonder Fold◦ Series compensation on the

existing Falcon – Gonder 345 kV line

◦ Harry Allen Terminal

SPPC and NPC Balancing areas will be consolidated post ON- Line

Budget revised from $510 million to $552 million

In-service date of the project has been delayed to December 31, 2013

22

1. 2013 IRP filed July 1, 2013 (Docket 13-07005)2. Planning period: 2014 – 20333. Requested approval for new transmission projects

Sierra Pacific Power Company Integrated Resource Plan (IRP) Status

23

Bordertown to Cal Sub 120 kV Line1. The project was approved by the PUCN in 2007 and includes

the construction of a 345/120 kV transformer at Bordertown Substation and a new 120 kV line from Bordertown substation to California Substation.

2. Project would provide additional transmission support to the West Reno transmission system for outages of a North Valley Road transformer and N-1-1 outages of the 120 kV transmission system.

3. To date Sierra has not obtained the required permits for this line and permitting work is continuing. The in-service date for this project has been moved from 2012 to 2016.

Sierra IRP Project Status Cont.

24

345 KV Voltage Support Project

Add 75 MVA 345 kV capacitor bank at North Valley Road substation and Mira Loma substation

Mira Loma in service date is December 2013 Valley Road in service date is February 2014

Sierra IRP Project Status Cont.

25

Hycroft Mine Load Addition / Oreana 345/120 kV Substation

New 345/120 kV substation with a 280 MVA transformer Expand existing Dun Glen Switching Station Rebuild 119 & 162 lines to Bundled 954 ACSR for approx. 34

miles Install approx. 48 miles of new Bundled 954 ACSR 120 kV line Install a new 20 MVar Capacitor banks at Dun Glen and Hycroft

Sierra IRP Project Status Cont.

26

Carlin Trend Master Plan

Carlin Trend Under Voltage Load Shedding Scheme Second Falcon 345/120 kV Transformer Coyote Creek 120 kV Breaker Addition Carlin Trend Transmission Additions

Sierra IRP Project Status Cont.

27

“Emission Reduction and Capacity Replacement Plan” Requires NVE-South to retire or eliminate 800 MW of coal by

2019 (Reid Gardner 1,2&3 2014, Reid Gardner 4 2017 and Navajo 2019)

Requires NVE to replace coal with company owned 550 MW of generation either constructed or acquired◦ Generation type not specified◦ Receive cost recovery for decommissioning costs

Consumer protection, cap on rates at 5%

SB123: NVision

28

Requires annual RFPs for 100 MW of new renewables in 2014, 15, 16◦ NVE can participate and compete in RFPs

Requires 50 MW of company-owned renewables to start construction by 2017

Expect to file a Resource Plan Amendment with the PUCN in the Spring of 2014 with plan to comply with SB123 and required resource additions.

New generation additions may require additional transmission including the addition of the Harry Allen 230/500 kV transformer.

SB123: NVision

29

Stakeholder Input- Questions