Point-to-Point Transmission

System Impact Study Report

Completed for (“Transmission Customer”)

Proposed Transmission MDWP-REDB 110 MW

June 2006

System Impact Study Report 1.0 Description/Introduction This report was produced in response to a transmission System Impact Study Agreement signed on March 13, 2006 related to a request by the (“Transmission Customer”) for 110 MW of point-to-point service from the Mona 345 kV switchyard to PacifiCorp’s 345 kV point of interconnection with Nevada Power Company beyond Red Butte at the Utah/Nevada border. The service is requested for a 30 year period starting on 1/1/2012. 2.0 Scope of the Study The scope of work will be based on the results of previous studies and the assumptions stated below. The area of interest is shown in Figure 1.

3.0 Study Assumptions The results of this study will reflect the observations and conclusions reached in the Southwest Utah Planning Study Report, a joint study performed by PacifiCorp, Utah Associated Municipal Power Systems, and Deseret Generation and Transmission Cooperative. This study, dated May 12, 2003, provided a ten year plan for serving the southwest Utah area projected load growth as well as maintaining existing transfer capability on the southern Utah transmission system.

June 2006

System Impact Study Report The following system additions/modifications are approved and budgeted by PacifiCorp for construction:

• Red Butte 138 kV-30 MVAR shunt capacitor (June 2006) • Red Butte-Middleton 138 kV series reactor (June 2006) • St George 138 kV-30 MVAR shunt capacitor (June 2006) • St George -35/+100 MVAR Static VAR Compensator (June 2006)

The following projected system additions/modifications are not approved for construction; approval for and timing of construction will depend upon future load growth and intertie commitments:

• St George 138 kV-30 MVAR shunt capacitor (May 2007) • Three Peaks 345/138 kV substation (May 2008) • Three Peaks-Sigurd 345 kV series capacitor (May 2008) • Three Peaks 138 kV-30 MVAR shunt capacitor (May 2008) • Huntington generator trip Remedial Action Scheme (May 2008) • Red Butte to St George double circuit 138 kV line (May 2009) • Red Butte Static VAR Compensator (May 2010) • Sigurd-Red Butte 345 kV line #2 (June 2014)

There is sufficient transmission capacity from Mona to Sigurd and south from Red Butte into Nevada Power Company’s system to accommodate this request. However, as will be discussed below, there is insufficient future capacity in the section from Sigurd to Red Butte to accommodate this request. 4.0 Analysis In the 2003 study, total peak load served from the Red Butte 345 kV station was assumed to be 292 MW based on a 10% load growth rate through 2006. Actual peak load reached a total of 309 MW in 2005 (see Attachment 1). Based on a 6.5% annual growth rate beyond 2006, the 2012 summer peak load was estimated to be 468 MW. Peak load served out of Sigurd on the Sigurd-Cedar City 230 kV line during the summer of 2005 was about 118 MW. Projected load in 2012, based on an underlying growth rate of 4%, is 165 MW. Further, by 2012, a 345 kV tie at the Cedar Valley substation will be in-service (Three Peaks). With this tie, about two-thirds of the 165 MW of the load requirement can be expected to flow on the 345 kV system, or about 110 MW. PacifiCorp’s present firm north to south obligation on the Red Butte-Harry Allen 345 kV line is 140 MW. Assuming this obligation is still in place, during peak load condition in 2012 with the phase shifters at Harry Allen holding 140 MW into Nevada’s system, the expected Sigurd-Three Peaks 345 kV flow can be estimated as follows:

June 2006

System Impact Study Report

Description Quantity Interchange with NPC 140 MW Peak load at St. George 468 MW Peak load at Three Peaks 110 MW Line Losses 33 MW Total Estimated Sigurd-Three Peaks Flow 751 MW

At this transfer level, additional firm capacity from Sigurd to Red Butte is not available, and will not become available until the second Sigurd-Red Butte 345 kV line is added. The date projected in the 2003 study for this new facility is 2014. However, no firm date is available at this time since the need for this new line is based on projected load growth in the St. George and Cedar City areas as well as the continuing need to provide 140 MW of north to south transmission service on the Nevada tie. Until the second line is in-service, transmission capacity on this path will only be sold for periods of one year or less and, if sold as yearly firm, the roll-over rights will be limited such that they can not be exercised if the capacity is needed to meet current and reasonably forecasted load of Native Load Customers and Network Customers1. As the load grows, additional facilities beyond the second line may be required to continue to provide the service. The in-service date provided in the 2003 report for the second Sigurd-Red Butte line was projected from actual load data through the summer of 2002, and estimated data beyond that date. The requested 30-year firm service cannot be offered until a firm financial commitment is made to construct the second line. Since PacifiCorp cannot make this commitment at this time given the uncertain need and timing for the project, the commitment must come from the Transmission Customer. 5.0 Cost Estimate In the 2003 study, the cost of the second Sigurd-Red Butte 345 kV line was estimated at $223 million. This value was obtained using PacifiCorp’s generic Block Estimating tool. This good faith cost estimate is provided for informational purposes only. . 6.0. Schedule For new lines, PacifiCorp estimates that the permitting and construction time will approach and may exceed 60 months.

1 PacifiCorp’s Open Access Transmission Tariff (OATT), Appendix D, “Methodology to Assess Available Transmission Capacity”, provides for transmission capacity to be withheld from the calculation of Available Transmission Capacity (ATC) if it is needed to meet current and reasonably forecasted load of Native Load Customers and Network Customers.

June 2006

System Impact Study Report 7.0 Conclusions Due to significant load growth in the St. George area, PacifiCorp is unable to provide the requested service on a firm basis unless a second Sigurd-Red Butte 345 kV line is permitted, constructed, and in-service by 2012. At this time, the only way PacifiCorp can offer the requested service is if the Transmission Customer assumes the full financial obligation for the new line subject to adjustment when and if PacifiCorp’s load service need for the new line is firmly established.

June 2006

System Impact Study Report Attachments Attachment 1: Historical Red Butte 345 to 138 kV Transformer Actual MW Flow.

St George Area Load Displayed Chronologically w ith Annual Load Duration CurvesData Through 4/30/2006

0255075

100125150175200225250275300325350

Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06

Date and Time

Load

in M

W

Attachment 2: Historical Sigurd-Cedar City 230 kV Line Actual MW Flow.

Sigurd-Parowan-West Cedar 230 kV Line Flow

20

40

60

80

100

120

140

Jan-00 Jul-00 Dec-00 Jul-01 Dec-01 Jul-02 Dec-02 Jul-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05

Date/Time

Flow

in M

W

June 2006