B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 1 Title Sub Title B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Bonneville Power

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B O N N E V I L L E P O W E R A D M I N I S T R A T I O N

Title

Sub Title


Bonneville Power Administration Overview

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FCRPS

BPA markets power from 31 Federal Hydropower plants (21 COE/10 BOR) (6,195 avg. MW; 13,934 sustained peak), Columbia Generating Station Nuclear Plant and some non-Federal hydro and wind

More than 80% of the power BPA sells is hydroelectric

BPA accounts for about 33% of the electric power consumed within the region

Canada has 15% of basin area, but provides 30% of 134 million acre feet (maf) average annual flow at The Dalles

Federal Columbia River Power System (FCRPS)

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B O N N E V I L L E P O W E R A D M I N I S T R A T I O NM

illio

n Ac

re-F

eet

Average 102 MAF

January - July Volume Runoff: Columbia River at The Dalles

1943

1947

1949

1951

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

1929

1931

1933

1935

1937

1939

1941

1945

1953

2003

2005

2007

2009

0

20

40

60

80

100

120

140

160

180

200

Columbia River Runoff Varies Widely

2010

2011

Final for 2011 is 142.66

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Columbia Basin Storage Capacity

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Introduction to BPA

1937 Bonneville Project ActCreated BPA to market power at cost-based rates with public preference and build transmission system to deliver power.

1961 Columbia River TreatyEnabled 20 million acre-feet of increased water storage via three new Canadian dams and Libby Dam in Montana.

1964 Pacific Northwest Preference ActEstablished regional preference while authorizing construction of California intertie and surplus power sales outside the Northwest.

1974 Federal Columbia River Transmission System ActPlaced BPA on self-financing basis (rates must recover costs) and provided limited borrowing authority from the U.S. Treasury.

1977 Department of Energy Organization ActTransferred BPA to the DOE as “separate and distinct” agency.

Key Statutory Provisions

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Introduction to BPA

1980 Pacific Northwest Electric Power Planning and Conservation Act

Assure the Pacific Northwest of adequate, efficient, economical and reliable power supply

• BPA obligation to serve net load requirements of NW utilities, has authority to purchase generating output from electric generation projects.

• BPA to purchase conservation and renewables where cost effective

• BPA to provide benefits to residential and small farm customers of investor-owned utilities (residential exchange).

• BPA to protect, mitigate and enhance fish and wildlife affected by federal hydropower construction and operation.

• NW Power and Conservation Council to guide power and fish planning for the region.


7


Introduction to BPA

1992 Energy Policy ActGuaranteed open transmission access for wholesale transactions to spurdevelopment of wholesale energy market. Authorized FERC to order BPA to provide open, non-discriminatory access to transmission while ensuring BPA’s organic statutes continue in full force and effect.

1996 Omnibus Consolidated Recisions and Appropriations ActRaised interest rate and adjusted principal on BPA’s appropriated debt (forconstruction of federal power system).

2003 Omnibus Appropriations Bill Increased BPA’s borrowing authority by $700 million to a total of $4.45 billion.

2005 National Energy Policy ActIncreased FERC jurisdiction over BPA (and publicly owned utilities) for transmission and power market sales. Established national Electric Reliability Organization (ERO) to establish and enforce mandatory reliability standards on all users, owners and operators of the bulk power system.

2009 American Recovery and Reinvestment Act Granted an additional increment of $3.25 billion in Treasury Borrowing Authority through

the American Recovery and Reinvestment Act, bringing the total amount of bonds that may be outstanding at any one time to $7.7 billion.


8


BPA Business Model

BPA is one agency with respect to repaying Treasury debt.

BPA operates separate businesses for setting rates for power and transmission services.

Overlapping, but different customers for power and transmission services.

Consumer-owned utilities have preference rights to Federal power.

BPA operates as an open-access, non-discriminatory transmission carrier.

Important to note that a substantial amount of the wind generation connecting to BPA’s system for transmission service is not sold to BPA or its power services customers.

One Agency But Two Businesses

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BPA Business Model

Assure adequate, economical, efficient, reliable power supply.

Ensure transmission access with a high degree of safety and reliability.

Ensure public preference and regional preference.

Fulfill environmental and social responsibilities:

• Mitigate impacts, protect and enhance fish & wildlife populations affected by the federal hydropower system.

• Provide regional leadership in conservation and renewable resource development.

Preserve and balance economic and environmental benefits of the FCRPS.

Recover costs through rates. BPA is a self-sustaining non-profit agency.

Providing Public Benefits

10


BPA Business Model

Publicly Owned Utilities:• Entitled to a statutory preference and priority in the purchase of available federal power• Northwest Regional Municipalities• Public Utility Districts• Cooperatives

Investor Owned Utilities:• Entitled to the Residential Exchange Program that effectively provides an offset to IOU residential

and small farm customers rates• Includes Portland General Electric, Puget Sound Energy, PacifiCorp, etc.

Direct Service Industries:• BPA is not required to, but may sell power for direct consumption to a limited number of existing

industrial companies in the Northwest• Aluminum Smelters (e.g. Alcoa, Columbia Falls Aluminum)• Chemical and paper, and other metal industries (e.g. Port Townsend Paper Corporation)

Sales outside the Northwest:• Public and investor owned utilities in the Southwest and California• Sales, purchases, and exchanges of power via the Southern Intertie

Wheeling and other Sales: • Network and point-to-point transmission services• Generation integration services• Conservation and environmental impact analysis services

Customers

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FY 2010 FCRPS Operating Revenues(includes interbusiness service revenues)

*This information made publicly available by BPA in November 2010 and is consistent with BPA’s FY 2010Annual Report. Variation is due to rounding.

Power Services69%

Transmission Services24%

Fish Credits andOther Revenues

7%

Revenues (millions)Power Marketing Services $2,113 69%Transmission Services $738 24%Fish Credits and Other Revenues $204 7%

$3,055* 100 %

FCRPS Revenues by Service 2010

Financial Structure

12


24%

5%

56%8%

3% 4%

*This information made publicly available by BPA in November 2010 is consistent with BPA’s FY 2010 Annual Report. Any variation is due to rounding.

Power Sales Other Revenues

53

2

1 Sales Outside the Northwest$243 million

Public and investor-owned utilities in the Southwest and California

Direct Service Industries$81 million

Publicly Owned Utilities$1,775 million

Northwest RegionalMunicipalitiesPublic Utility DistrictsCooperatives

Investor-Owned Utilities

$134 million

Transmission Services$771 million

Wheeling and other sales

Fish Credits and Other Revenues$172 million

6

FY 2010 Revenues by Customer Groups

4

13


Bonds Issued to Treasury $1,616MWtd. Avg. Int. 4.7%

Corps of EngineersAppropriations $2,566MWtd. Avg. Int. 6.1%

Energy Northwest $4,519MWtd. Avg. Int. 5.2%

Bureau of Reclamation Appropriations $629MWtd. Avg. Int. 6.9%

Generation$9,010 million

Transmission$3,656 million

Lower Snake Fish and Wildlife $232MWtd. Avg. Int. 7.1%Bonds Issued to

Treasury $897MWtd. Avg. Int. 3.7%

*This information made publicly available by BPA January 28, 2011 and is consistent with BPA’s FY 2010 Annual Report. Any variation is due to rounding.

Other Non-FederalProjects $450MWtd. Avg. Int. 4.6%

BPA Appropriations $404MWtd. Avg. Int. 7.2%

Other Non-FederalProjects $167MWtd. Avg. Int. 5.0%

Energy Northwest $1,186MWtd. Avg. Int. 5.2%

as of 9/30/2010$12,666 Million

5.4% weighted average interest

Total Liabilities to Federal and Non-Federal Parties

Federal Columbia River Power System

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From 2009 EIA State Level Data (rates shown in cents per kilowatt-hour)

CT20.33

ME15.65

NV12.86

CA14.74

IL11.27

MS7.97

MA16.87

NJ16.31

OR8.68

MT8.93

ID7.80

MD14.98

AZ10.73

NH16.26

NY17.50

WV5.45

VT14.90

FL12.39

OH10.67

TX12.38

CO10.00

NM10.02

UT8.48

WY8.58

OK8.49

NE8.52

NC9.99

MS10.22MN

10.04

AR9.14

MO8.54

WA7.68

VA10.61

BPA STATES

KY8.37

PA11.65

WV7.90

Ranking of Northwest StatesIdaho: 3Washington: 4Oregon: 14Montana: 15

Average Retail Electricity Rates by State

LA.8.10

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FY 1984-2011 Wholesale Energy – Cost Components ($/MWh)

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fiscal Year

$/M

Wh

Tx Firm Rate (2008$) Power Rate Adjusted for Paybacks/ 1 (2008$) Power Rate (2008$)+

1 Effective rate, reduced to show paybacks from BPA to public utilities for 2002-2008 residential exchange overcharges.2Interim payment of $171mm was paid in 2008, $86mm in true-up to interim payments was made in 2009, $167mm will be credited on customer bills in 2009 ($154mm in Lookback credits and $13mm due to the Avista deemer balance settlement), and $163mm will be credited on customer bills in 2010 and 2011.

(2008$)

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Firm Energy Resources 2010

C ontr ac ts/Renewabl es/

Smal l Ther mal10%

Hydr o78%

Nucl ear12%

BPA White Book; November, 2009

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Secondary Revenue from Surplus Sales

Net Revenue (millions $'s)

-$600

-$500

-$400

-$300-$200

-$100

$0

$100

$200

$300

$400

$500$600

$700

$800

$900

$1,000

(Mill

ion

s $

's)

Net Revenue (millions $'s) $370 $501 $476 $532 $417 -$433 $407 $531 $421 $565 $799 $445 $279 $54 -$116

FY 1996

FY 1997

FY 1998

FY 1999

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

FY 2009

FY 2010

Net secondary revenue and net sales figures are not final audited values. They are derived from committed transaction datafrom BPA's Trade Management System, and do not reflect what was actually delivered and billed.

Note: 2002-2007 secondary revenues increased by sales of additional power supplied under contracts that have since expired

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Energy Efficiency is the priority Resource

$0

$50

$100

$150

$200

$250

$300

Leveliz

ed L

ifecycle

Cost

(2006$/M

Wh)

Emission (CO2) costTransmission & Losses

System IntegrationPlant costs

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1978 1983 1988 1993 1998 2003 2008

Ave

rage

Meg

awat

ts

BPA and Utility Programs NEEA Programs State Codes Federal Standards

PNW Energy Efficiency Achievements

Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Almost 4,300 aMW of Savings.

Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Almost 4,300 aMW of Savings.

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5-Year Regional Public Power Energy Efficiency Targets

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

aMW

5th Power Plan

6th Power Plan

EE to be accomplished through programs, market transformation, and codes/standards.

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Federal Columbia River Transmission System

BPA owns and operates 75% of the Pacific Northwest’s high voltage electrical transmission system.

The system includes more than 15,000 miles of transmission line and more than 200 substations.

The system networks across 300,000 square miles in Oregon, Washington, Idaho, Montana and sections of Wyoming, Nevada, Utah and California.

The system enables a peak loading of about 30,000 megawatts and generates about $690 million a year in revenues from transmission services.

BPA’s Transmission Services operate under an Open Access Transmission Tariff based on FERC’s pro forma tariff as a non-jurisdictional entity.

BPA operates to comply with Electric Reliability Organization standards.

22


BPA’s high-voltage transmission system

BPA owns and operates 75% of the Pacific Northwest’s high voltage electrical transmission system.

The system includes more than 15,000 miles of transmission line and 285 substations.

The system networks across 300,000 square miles in Oregon, Washington, Idaho, Montana and sections of Wyoming, Nevada, Utah and California.

The system enables a peak loading of about 30,000 megawatts and generates more than $700 million a year in revenues from transmission services.

BPA’s Transmission Business Line operates under an Open Access Transmission Tariff based on FERC’s pro forma tariff as a non-jurisdictional entity.

Federal Columbia River Transmission Systems

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Regional Transmission

Combined Transmission System

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BPA Fish & Wildlife Objectives

Implement and/or advocate for scientifically based, cost-effective strategies that mitigate for FCRPS (hydro) impacts on fish and wildlife

Deliver public benefits of Columbia River: negotiate and manage mitigation work to achieve best environmental result and dollar value

Advance policy solutions through collaborative working relationships with Regional Entities e.g. Power Council, Tribes, Fish & Wildlife Agencies, Customers, Environmental Groups and other parties

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1980 Northwest Power Act

“The Administrator shall use the Bonneville Power

Administration Fund to protect, mitigate, and enhance fish and wildlife to the extent affected by

development and operation of any hydroelectric project of the

Columbia River and its tributaries.”

Endangered Species Act

Biological Opinions

“Each Federal agency shall….insure that any

action authorized funded, or carried out by such agency is not likely to

jeopardize continued existence…of any

endangered species or threatened species…” Non-Listed

FISH and WILDLIFE

Listed

ANADROMOUSFISH

RESIDENTFISH

WILDLIFE

Although BPA has fish and wildlife responsibilities under the Endangered Species Act and the Northwest Power Act, in many cases, both responsibilities can be met in the same set of actions.

Fish and Wildlife Legal Mandates

Treaty and Non-Treaty Tribal PolicyBPA will consult with the Tribal governments prior to BPA

taking actions, making decisions, or implementing programs that may affect Tribal resources.

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Percentage of Spending Categories Allocated to F&W

FY 2010-2011

Forecast($ in Millions)

UNSLICED 50-year Annual Average Hydro Operations Effects (Power Purchases & Foregone Revenues)

Fish and Wildlife Integrated Program

NWPCC – Annual Average

US Fish & Wildlife Service – Annual Average

Lower Snake Compensation Plan

Corps of Engineers O&M – Annual Average

Reclamation O&M – Annual Average

100%

50%

100%

~25%

~7%

Depreciation & Interest on COE / Reclamation / USF&WS Capital F&W Investments (based on Plant in Service)

Depreciation & Interest on BPA Direct Program Capital F&W Investments

226

5

24

41

8

310

137

7501/ FY 2012-2013 data is based on the proposed IPR spending levels as of May 13, 2010.

Total $

155

4

20

34

4

445

116

778

FY 2007-2009

Actuals($ in Millions)

252

5

29

43

6

TBD

140

TBD

FY 2012-2013

Forecast($ in Millions)

Total Annual Average Cost of BPA Fish & Wildlife Actions1/

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Wind Generation Capacity in the BPA Balancing Authority Area

Renewable Projects connected to BPA based on end of Fiscal Year 2011 status

0

2000

4000

6000

8000

10000

12000

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Mega

Wat

ts

Additional transmission servicerequests signed

Preliminary engineering funded

Interconnection agreementssigned

On Line

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Wind Generations is Variable

Red = Load

Blue = Wind Generation

And Unrelated to Load

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Climate Change Actions Commitments under the 2008/2010 BiOps are setting the stage

for better understanding of climate change impacts and responses.

Existing BiOp and F&W Program actions in the tributaries and estuary are helping to mitigate for climate change through protection of riparian areas, creation of salmon refuges, and water acquisition to protect instream flows.

The 2010 Supp. BiOp calls for measures to monitor climate change impacts and target fish and wildlife habitat efforts to address those impacts.

BPA’s “climate change adaption plan” approved by agency executives July 2012 to prepare for potential impacts of climate change on our business operations.

Documents

B O N N E V I L L E P O W E R A D M I N I S T R A T I O N 1 Title Sub Title B O N N E V I L L E P O W E R A D M I N I S T R A T I O N Bonneville Power