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Home My WebLink About20070831Mansfield direct.pdf$1' !Oi' .'1:. REOEt'lBD lU'1 r..t\GJ\ A q: 25 BEFORE THE IDAHO PUBLIC UTILITIES COMlV!I~; ~~, 8~Iq,UC , P&ES,60MM\SSiONIN THE MATTER OF THE , UT.- APPLICATION OF ROCKY CASE NO. P AC-07-11- MOUNT AIN POWER FOR AN ORDER AUTHORIZING A CHANGE Direct Testimony of Mark C. Mansfield IN DEPRECIATION RATES APPLICABLE TO ELECTRIC PROPERTY ROCKY MOUNTAIN POWER CASE NO. PAC-07- August 2007 Please state your name, business address and position with PacifiCorp (the Company). My name is Mark C. Mansfield. My business address is 1407 West North Temple Suite 310, Salt Lake City, Utah. My position is vice president, thermal operations for PacifiCorp Energy. Please describe your education and business experience. I have a Bachelor of Science degree in mechanical engineering from Brigham Young University, and a Masters in Business Administration from the University of Utah. During my career, I have served as an engineer and maintenance supervisor at the Carbon Plant; Maintenance Superintendent at the Hunter Station; Director of Technical Support for PacifiCorp s Generation Engineering in Salt Lake City, Utah and as the Plant Manager for the Naughton, Huntington and Hunter Stations. I was appointed vice president of thermal operations in August 2006 with responsibilities for PacifiCorp s coal-fueled, gas-fueled and geothermal generation assets and operations. What is the purpose of your testimony in this proceeding? The purpose of my testimony is twofold. First, I will describe the process used by PacifiCorp engineers to develop estimated plant depreciable lives for the Company steam-generating stations. I will explain howsteam ~sJimated plantdepreciable lives were chosen for the purpose of this proceeding, and I will show how these estimated plant depreciable lives provide a framework for estimating the retirement date for each steam plant. In a similar manner I will describe the procedure used to estimate the retirement date for the Company s hydroelectric generating stations. I will Mansfield, Di - 1 Rocky Mountain Power demonstrate that the estimated retirement dates proposed by the Company for both steam and hydro generation plants are reasonable and prudent and are appropriate inputs for Mr. Roff's depreciation analysis. Second, I will explain why the rates the Company proposes to include as terminal net salvage, or "decommissioning costs " in the calculation of depreciation rates for generating plants are reasonable and prudent. GENERA TION PLANT LIFE ESTIMATION Steam Plant Estimated Depreciable Lives_mno - ,. . m.,. Please explain what you mean by the "estimated plant depreciable life" of a steam generating plant. For the purpose of determining depreciation, the estimated plant depreciable life of a steam plant is the period of time that begins when the plant is initially placed in service and begins to generate electricity and ends when the plant is finally removed from service and ceases to generate electricity. In other words it is the period of time during which electric customers benefit from the generation output of the plant. When a steam plant is removed from service, will it be retired and its investment removed from the Company s accounting records? It may not be immediately retired from an accounting perspective. More likely the plant will be retained in a reserve status for a period of time until plans for its final disposition are made. If an accounting retirement is not made, will the plant remain in rate base and continue to impose costs on customers? No. Under the estimated plant depreciable life concept a plant will be fully Mansfield, Di - 2 Rocky Mountain Power depreciated by the time it is finally removed from service. Why is it necessary to estimate the depreciable life of a steam plant? One major component of PacifiCorp s cost of service is the recovery of capital investment in steam generating plants. This recovery is accomplished through depreciation expense over the productive life of each plant. From the standpoint of setting depreciation rates it is necessary to have a reasonable estimate of the life of a plant as soon as it is placed in service. For depreciation purposes all steam plant lives are estimates that may be adjusted over time as circumstances warrant. What circumstances warrant the adjustment of a plant's life for depreciation purposes? One example under which a plant's life is adjusted for depreciation purposes is the addition of significant emissions control equipment. The PacifiCorp steam generating plants perform well and serve as an important source of base load generation for PacifiCorp customers. Changing environmental regulations may ultimately require the installation of emissions control equipment to ensure that these plants operate in compliance with the environmental laws and regulations. The significant capital investment that is required to install emissions reduction equipment is a benefit to customers that will allow the plants to continue operation. Theadjustmentoftheplants' depreciable life reflects the company s ability to recover its plant investment for the benefit ofthe customer. What are PacifiCorp s current estimated plant depreciable lives for its steam generating plants? Please refer to Exhibit No. , " Power Supply Estimated Plant Lives " for a complete Mansfield, Di - 3 Rocky Mountain Power list of PacifiCorp plants and their expected lives. Who prepared the estimated plant depreciable life analysis? The estimated plant depreciable life analysis was prepared by PacifiCorp Energy engineering staff under my direction. This group includes individuals with over twenty years of service with the Company who are experienced in all areas of steam plant operation, including the design, construction, operation and maintenance ofthe Company s existing units. What criteria were considered in the estimated plant depreciable life analysis? The estimated plant depreciable life analysis focused on three main areas: (1) an evaluation of the operating and maintenance history of the plants as determined by owner operational requirements; (2) an assessment of the current condition of major equipment components; and (3) capital expenditures made and anticipated to be made at the plant. Did the Company evaluate the operating and maintenance history of its steam plants to determine compliance with original design parameters? Yes. A review of historical records indicates that PacifiCorp' s steam plants have been operated and maintained in a manner consistent with the expectation reflected in original design parameters. Manufacturer s guidelines and/or operating recommendations from design engineers have been translated into training materials and operating procedures used throughout the Company s thermal fleet. A review of preventative maintenance logs , work order and equipment histories, and overhaul histories indicates that required maintenance procedures have been consistently applied for all plants. This is further demonstrated by the high capacity factors and Mansfield, Di - 4 Rocky Mountain Power high equivalent availability factors exhibited by PacifiCorp s thermal fleet. Did the Company make an assessment of the current condition of major equipment components? Yes. During the annual planning cycle plant operating and engineering personnel review the loss histories for major equipment components, the planned overhaul schedule and the planned operating requirements for the plant. The plant personnel use this data to determine condition of the equipment and potential projects to reduce risk of equipment failure. Has the expenditure of capital had an effect on the estimated plant depreciable life for any of the Company s generating plants? Yes. Periodic capital expenditures allow these generating plants to continue to operate as designed and to serve as cost-effective resources needed to meet PacifiCorp s load requirement. Since the last depreciation study the Company has spent more than $621 million on capital projects that maintain the ability of the steam and hydro plants to continue to provide a valuable and low-cost source of electricity. Recommended Estimated Steam Plant Lives for Depreciation Study Has the Company reflected its estimated plant depreciable lives in the current depreciation-~tudy1- - - - - _m __m,--- Yes. PacifiCorp provided retirement dates for each steam and hydro plant to Mr. Donald Roff of Depreciation Specialty Resources for use in preparing the depreciation study that is the subject of this proceeding. The depreciation study performed by Mr. Roff(Exhibit No.5), which is based on plant balances as of Mansfield, Di - 5 Rocky Mountain Power December 31 2006, will be referred to hereafter as "the DSR study . The retirement dates provided by the Company to Mr. Roff are the same retirement dates contained in Schedule 3 of the DSR study. Steam Plant Retirement Dates How was the estimated plant depreciable life for each plant converted into an estimated retirement date? The estimated plant depreciable life was added to the original in-service date for each generating unit to arrive at its estimated retirement date. For example, if a unit had an in-service date of 1980 and a 64-year estimated plant depreciable life, its estimated retirement date would be 2044. For multiple-unit plants, the age was calculated for each unit. Then a weighted-average age for the entire plant was determined by weighting the capacity of each unit. An average retirement date was then calculated based on the remaining life. Hydroelectric Plant Retirement Dates Is the process used to estimate retirement dates for PacifiCorp s hydro generation plants similar to the process used for steam plants? Conceptually the process is very similar. The primary difference is that it is not possible to use generic estimated plant depreciable life for hydro plants. While steam plants.ofsimilarsize"Yintage,anddesignrequirements would be expected to have the same estimated plant depreciable life, each hydro plant is unique. Therefore, it is necessary to estimate the estimated plant depreciable life of each hydro plant separately; or in effect, to determine the retirement date for each hydro plant on an individual basis. Mansfield, Di - 6 Rocky Mountain Power What criteria are important in estimating the retirement date of a hydro plant? The remaining useful lives of hydro facilities are governed either by the terms of operating licenses or by the remaining life of critical civil/structural or electro- mechanical components. Who prepared the estimated retirement dates for hydro plants? The hydro plant retirement dates were estimated by PacifiCorp s Hydro Engineering and Planning staff. These individuals have experience in both plant operation and maintenance and in project relicensing. What license are you referring to? The majority ofPacifiCorp s hydro projects are federally licensed under the jurisdiction of the Federal Energy Regulatory Commission (FER C) which acts under the authority of the Federal Power Act (FP A). Hydro projects receive their initial license when they are first placed in service and may be re-licensed upon expiration of the initial term. This initial term is usually for 50 years. FERC may grant new licenses of up to 50 years, depending upon the unique circumstances at each project. Currently, the most common relicensing period is 30 years. Over 90percent of the Company s hydro capacity is currently in the relicensing process or has received a new license within the last few years. ..How~er..e_the__decision criteria applied to determine the retirement date for each hydro plant? As previously mentioned, most of the Company s hydro capacity has been recently re-licensed, or is currently undergoing relicensing. For plants currently in the relicensing process the estimated retirement date is the date of expiration of the Mansfield, Di - 7 Rocky Mountain Power current license plus 30 years (the most common period for new FERC licenses). For example, if a plant's current license expires in 2007 , the estimated retirement date for that facility is 2037. For plants that have been recently re-licensed, the estimated retirement date is the expiration date of the new license. The remaining estimated plant depreciable life of the plant is the same as the life of the license. Is there any exception to the practice of basing estimated retirement dates on FERC license expirations? Yes. As I indicated before, the other primary driver of expected hydro plant life is the remaining life of critical components. PacifiCorp has a number of smaller hydro projects where significant new investment could make the plants uneconomical to operate given current alternative options to supply this energy. If an aging critical component were to fail at such a plant, it is common practice to perform an economic analysis to determine ifit would be in the best interest of the Company s customers to make the investment required to extend the plant's life and continue operation of the plant, or alternatively pursue an alternative action to divest or retire the plant. For plants where Company engineers have determined that the expected remaining life of a critical component is shorter than the FERC license period, the retirement date of that plant has been estimated to reflect only the remaining useful life of the eemponent. Forexample,.consider a hydro plant with a flow line that is judged to have a limited remaining life of 15 years. It is expected that the investment necessary to replace this flow line would place the economic viability of the project in jeopardy as a generation resource. Because a decision regarding the continued operation of that project would be necessary at that future time, the estimated remaining useful Mansfield, Di - 8 Rocky Mountain Power 19 - ---- life of the project is considered to be equivalent to the remaining life of that critical component (the flow line), or 15 years. If the continued operation of a hydro plant is not constrained by critical component failures, why should its estimated plant depreciable life be limited to the expiration of a FERC license? Wouldn t it be reasonable to expect FERC licenses to continue to be renewed indefinitely? It would be imprudent to anticipate approval ofhcense renewals beyond the present term of the license. The FERC is responsible for hydroelectric project licensing under the Federal Power Act. Historically, FERC has balanced the need for power produced by projects with the need to protect the surrounding environment and natural resources. However, FERC no longer has the discretion to balance hydro interests with other resource issues given the u.s. Supreme Court's rulings on Section 401 of the Clean Water Act (CW A), endangered species listings under the Endangered Species Act (ESA) and other rulings under the FP A. For example, the S. Fish and Wildlife Service and the National Marine Fisheries Service have prescriptive authority under the FP A to provide fish passage in any manner they deem reasonable. As a result, typical license conditions now routinely include revised operating requirements and construction of new environmental mitigation facilities .-th.aLmay make the project (~) uneconomi al to continueJQoperateinthefuture. This economic viability will need to be determined for each project, but such determination cannot be conclusively made until the expected terms and conditions of a new license are determined through the relicensing process with the FERC. For this reason PacifiCorp cannot reliably forecast operating lives beyond current license Mansfield, Di - 9 Rocky Mountain Power expiration dates. The estimated hydro plant retirement dates developed by Company engineers using the criteria that I have just described are reasonable and prudent in this dynamic, changing arena and are the appropriate inputs for Mr. RoWs depreciation analysis. How were the estimated hydro plant retirement dates developed by the Company provided to Mr. Roff? The estimated hydro plant retirement dates were provided to Mr. Roffin the form of Exhibit N.o~L___ OTHER PRODUCTION PLANT What process was used by PacifiCorp to estimate retirement dates for its Other Production Plants? The process was similar to that used for the hydro generation facilities. The estimated plant depreciable life for Other Production was assumed to be the length of either the Power Purchase Agreement for the specific facility or the expected life of a critical component. For example Little Mountain and Foote Creek (aka Wyoming Wind) use the contract length as the estimated plant depreciable life for their respective facilities, while the estimated plant depreciable life for the simple-cycle combustion turbines and wind farms use a 25-year estimated plant depreciable life based on the -eFigffi-&1~eq uipm €nt-'.s-G€si-gn-liv€s. ---------- Why is the contract life a good estimate of plant life? Given the uncertainty in the power market, it is difficult to project the depreciable value of the plant past the end of the contract life. The future economic viability for each project will need to be evaluated as it nears the end of its estimated depreciable Mansfield, Di - 10 Rocky Mountain Power life. Why is there a different estimated plant depreciable life for the combined-cycle gas-fueled plant than the simple-cycle gas-fueled plant? The Hermiston gas-fueled plant is a combined-cycle base-loaded facility, which is designed to run at a steady state condition. Gadsby Units 4, 5 and 6 are flexible resources and are, therefore, expected to cycle on and off at a higher rate. While the Currant Creek and Lake Side plants are not base loaded, they run for longer periods of time when called upon. Therefore, they have less cycling than a flexible resource. The cycling ofthe plant takes life out of the combustion turbines and may reduce its estimated plant life. How were the estimated other production plant retirement dates developed by the Company provided to Mr. Roff? The estimated other production plant retirement dates are included in Exhibit No. TERMINAL NET SALVAGE (DECOMMISSIONING COST) Please explain the term "terminal net salvage" or "decommissioning cost" As I use the term, terminal net salvage refers to the cost of removing facilities that have been retired and restoring the site to its original grade. It does not contemplate site re-vegetation or other landscaping activities. Q. -Why'Should-then be-a diffe-rence in the recovery of terminal net salvage between steam and hydro plants? Conceptually there should be no difference-terminal net salvage should be reflected in depreciation rates. The cost of removing coal-fired plants is generally consistent for plants of similar size and vintage. This consistency facilitates preparation of Mansfield , Di - Rocky Mountain Power reasonable terminal net salvage estimates for steam plants. However, every hydro plant is uniquely situated and the estimated removal costs would have to be individually determined. PacifiCorp will continue to evaluate the most appropriate way to reflect hydro terminal net salvage in future depreciation studies, but it was decided to include those amounts which have been specifically identified in settlement agreements and amounts for small hydro plants which have some probability of being removed in the next ten years. How were the terminal net salvage factors for steam production plant determined? The terminal net salvage for PacifiCorp s steam generating plants was estimated by Mr. Roff. A description of the procedures used is presented on page 11 of his direct testimony filed in this proceeding. Was the study of steam production demolition cost performed as required by the last depreciation rate case and how does that compare to the costs used in this study? Yes. Black & Veatch was retained to perform a study of steam production demolition costs, as ordered during the last depreciation study. This study estimated that the costs to decommission the Carbon plant at $164.47 per installed net kilowatt, the );)av-e--Jelmsten-plant-at-$61.27 per installed net kilowatt and the Hunter plant at $48.55 per installed net kilowatt. Mr. Roffused a conservative industrial average of $50 per instal1ed kilowatt. Mansfield, Di - 12 Rocky Mountain Power Does PacifiCorp expect to remove steam generating plants that are retired in the future? Yes. It has been the Company s practice to remove thermal plants upon retirement for a variety of reasons , and it is its current intention to continue to do so. PacifiCorp assumes that even if laws and regulations do not currently exist which require removal of generation plants upon retirement, laws and regulations may be enacted that would require removal if the owner or operator fails to do so. There are public ~af~Y./l.ml~v~ro11ITIental issues associated with generation plants, and the public may demand their removal if the owner or operator does not do so. The Company does not believe it is reasonable to assume that retired generation plants will be allowed to remain in place indefinitely in the future. In addition, it is unlikely that PacifiCorp could dispose of the sites of retired generation plants without removal. In fact, even ifthe Company were to retain the site for its own use, it would probably be necessary to remove the old plant before a new plant could utilize transmission or other site advantages. The Company believes that consideration of the potential obligations associated with indefinitely holding a retired generation plant might indicate that removal is the most prudent course and is in the long-term public interest. -Doe-s-uc-e:w-er..y-Of -te-t:minaLnet-saJ\'--3ge-costs-tlu:.ough-stean1-pJ ant- dep..e cia ti on expense represent sound ratemaking policy? Yes, it does. Two of the most basic precepts of ratemaking policy are that customers should pay for their cost of service and that costs should be matched with benefits. Consistent with these principles, customers who benefit from the output of a steam Mansfield, Di - 13 Rocky Mountain Power generating plant should bear all the costs of producing that output, including the cost of constructing the plant and subsequent capital additions, the costs of operating and maintaining the plant over its productive life, and ultimately the cost of retiring and removing the plant. Recovery of terminal net salvage through depreciation expense over the useful life of the plant is the only way to achieve a full and fair matching of costs and benefits. If recovery ofterminal net salvage were to be deferred until the plant is actually retired, some customers would inevitably pay less than their cost of service while other customers would...Q!!X ~Q!~tJ!an th~irJilir share. CONCLUSION Based on the foregoing testimony, what conclusions have you reached? It is my opinion that the estimated plant depreciable lives set forth in this study for PacifiCorp s steam generating plants provide a reasonable basis in this case for the estimated retirement dates used as inputs for Mr. Roff's depreciation analysis. Similarly, it is my opinion that the hydro plant retirement dates provided to Mr. Roff are reasonable and are based on the latest engineering estimates. I conclude that the terminal net salvage calculated by Mr. Roff for PacifiCorp steam generating plants is reasonable and conservative based on the Company s actual experience and the study performed by Black & Veatch. It is necessary to include steam plant terminal net sa-I-v-age--iI1-d~pr~cialiQn-T-ates to--prop.erJ~-match-customeLhenefi tLwi th custom er costs and to ensure that al1 customers pay their full and fair cost of service. These same principles of ratepayer equity require that al1 hydro plant decommissioning costs be recovered through depreciation expense from the customers being served by these hydro plants. Mansfield, Di - 14 Rocky Mountain Power Furthermore, it is my opinion that these assets provide a valuable and low- cost resource for the benefit of the ratepayers. Does this conclude your testimony? Yes. --~------ Mansfield, Di - 15 Rocky Mountain Power n -'\"r:f"'\r~t: \Jtiv" Case No. PAC-07- Exhibit No. Witness: Mark C. Mansfield ZnB1AUG3llA q:2b BlAHO PUBUC UTILITiES COMMISSiON ---- -, BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Direct Testimony of Mark C. Mansfield ,-~~----,_.._-----_._- --- August 2007 Es t i m a t e d P l a n t D e p r e c i a b l e l i v e s Pa c l f t C o r p Co m m e r c i a l C u r r e n t A g e We i g h t e d Re c o m m e n d e d Re c o m m e d a t l o n Ye a r s Pla n t Sh a r e N e t Da t e 01 U n i t Av e r a g e A g e 0 1 De p r e c i a b l e L i f e Ye a r E n d i n g L i f e Re m a i n i n g Cr i t e r i a f o r R e c o m m e n d e d D e p r e c i a b l e L i f e Ra t i n g ( M W ) Pl a n t ,," o m 2 0 0 7 Co a l - fi r e d Ca r b o n - 19 5 4 Ca r b o n - 10 5 19 5 7 51 , 64 , 20 2 0 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Ch o l l a - 38 0 19 8 1 26 , 64 , 20 4 5 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Co l s t r i p - 19 8 4 Co l s t r i p - 19 8 6 22 , 64 , 20 4 9 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Cr a i g - 19 8 0 Cr a i g - 19 7 9 27 , 54 , 20 3 4 Ba s e d o n t h e l i f e u s e b y m a j o r i t y o w n e r s Da v e J o h n s t o n - 10 6 19 5 9 Da v e J o h n s t o n - 10 6 19 6 0 Da v e J o h n s t o n - 23 0 19 6 4 Da v e J o h n s t o n - 4 33 0 19 7 2 40 , 64 , 20 3 0 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Ha y d e n - 19 6 5 Ha y d e n - 19 7 6 37 , 60 , 20 3 0 Ba s e d o n t h e l i f e u s e b y m a j o r i t y o w n e r s Hu n t e r - 40 3 19 7 8 Hu n t e r - 25 9 19 8 0 Hu n t e r - 46 0 19 8 3 26 , 64 , 20 4 5 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Hu n t i n g t o n - 44 5 19 7 7 Hu n t i n g t o n - 45 0 19 7 4 31 , 64 , 20 3 9 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Jim B r i d g e r - 35 3 19 7 4 Jim B r i d g e r - 35 3 19 7 5 Jim B r i d g e r - 35 3 19 7 6 Ji m B r i d g e r - 35 3 19 7 9 31 , 64 , 20 4 0 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Na u g h t o n - 16 0 19 6 3 Na u g h t o n - 21 0 19 6 8 Na u g h t o n - 33 0 19 7 1 38 , 64 , 20 3 2 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s W o d a k - 26 8 19 7 8 29 , 64 , 20 4 2 As s e t c o n d i t i o n a n d t a n n e d c a i l a l e x e n d i t u r e s 11 3 Ga s - fi r e d Cu r r a n t C r e e k ( C C C T ) 54 0 20 0 5 35 , 20 4 0 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f a c o m b i n e d - cy c l e p l a n t Ga d s b y - 1 ( R a n k i n e ) 19 5 1 Ga d s b y - 2 ( R a n k i n e ) 19 5 2 Ga d s b y - 3 ( R a n k i n e ) 10 0 19 5 5 54 , 64 , 20 1 7 As s e t c o n d i t i o n a n d p l a n n e d c a p i t a l e x p e n d i t u r e s Ga d s b y - 4 ( C T ) 20 0 2 Ga d s b y - 5 ( C T ) 20 0 2 Ga d s b y - 6 ( C T ) 20 0 2 25 , 20 2 7 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f a s i m p l e - c y c l e p l a n t He r m i s t o n 1 ( C C C T ) 11 9 19 9 6 He r m i s t o n 2 ( C C C T ) 11 9 19 9 6 11 , 35 . 20 3 1 La k e s i d e ( C C C T ) 54 8 20 0 7 35 , 20 4 2 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f a c o m b i n e d - c y c l e p l a n ! LiU l e M o u n t a i n ( C T ) 19 7 1 36 , 38 , 20 0 9 Co n t r a c t l i f e 69 4 Ot h e r Blu n d e l l ( G e o t h e r m a l ) 19 8 4 23 , 49 , 20 3 3 Ex t e n d e d 2 5 y e a r d u e t o t h e b o t t o m i n g c y c l e a d d i t i o n Blu n d e l l B o t t o m i n g C y c l e ( G e o t h e r m a l ) 20 0 8 25 , 20 3 3 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f t h e b o t t o m i n g c y c l e Fo o t e C r e e k ( W i n d ) 19 9 9 25 . 20 2 4 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f a w i n d p l a n t Ja m e s R i v e r ( C o - ge n ) 19 9 6 11 , 20 , 20 1 6 Co n t r a c t l i f e Le a n i n g J u n i p e r 1 ( W i n d ) 10 1 20 0 6 25 . 20 3 1 Ba s e d o n t h e o r i g i n a l d e s i g n l i f e o f a w i n d p l a n t Ma r e n g o ( w i n d ) 14 0 20 0 7 25 , 20 3 2 Ba s e d o n t h e o r i Q i n a l d e s i Q n l i f e o f a w i n d c i a n i 33 0 Sy s t e m T o t a l 13 6 Re f e r e n c e Y e a r 20 0 7 Av e r a g e A g e o f U n i l s 27 , We i g h t e d A v e r a g e A g e o f U n i t s 26 , As s u m p t i o n s De p r e c i a b l e l i f e e s t i m a t e s d o n o t i n c l u d e t h e p o t e n t i a l i n f l u e n c e o f e m i s s i o n s l i m i t a t i o n s , F u t u r e e n v i r o n m e n t a l r e g u l a t i o n s , s u c h a s a c a r b o n ta x o r o t h e r u n f o r s e e a b l e r e g u l a t i o n . c o u l d c a u s e s o m e o f t h e o l d e r p l a n t s t o b e c o m e u n e c o n o m i c a l a n d s h o r t e n t h e i r d e p r e c i a t i o n l i v e s Ex h i b i t N o , 2 Pa g e 1 o f 4 PA C / F / C O R P H Y D R O P L A N T S En g i n e e r i n g En g i n e e r i n g Na m e p l a t e FE R C Li c e n s e es t i m a t e o f Re c o m m e n d e d Pl a n t Ye a r Ra t i n g Lic e n s e Sta t e Lo c a t i o n En e r g y S o u r c e Ex p i r a t i o n ele c t r o / es t i m a t e o f Ye a r f o r 2 0 0 7 NO T E S In s t a l l e d ci v i l / s t r u c t u r a l (M W ) Nu m b e r Da t e me c h a n i c a l li f e Us e f u l L i f . li f e As h t o n 19 1 0 23 8 1 Id a h o As h t o n , I D He n r y s F o r \ ( 12 / 3 1 / 2 0 2 7 20 2 7 Ba s e d o n c u r r e n t l i c e n s e e x p i r a t i o n d a t e , Sn a k e R i v e r SI . A n t h o n y 19 1 5 23 8 1 Id a h o As h t o n , I D He n r y s F o r \ ( 12 / 3 1 / 2 0 2 7 20 2 7 Pia n t o u t o f s e r v i c e , E f f o r t s a r e c u r r e n t l y u n d e r w a y t o s e l l t h e e x i s t i n g p r o j e c t a n d s e p e r a t e i t Sn a k e R i v e r fr o m t h e e x i s t i n o F E R C l i c e n s e , Cu t l e r 19 2 7 30 , 24 2 0 Ut a h Lo a a n , I D Be a r R i v e r 3/ 3 1 / 2 0 2 4 20 2 4 Ba s e d o n c u r r e n t l i c e n s e e x o i r a t i o n d a t e , Co v e 19 0 7 24 0 1 Id a h o Gr a c e , I D Be a r R i v e r Th e C o v e p l a n t w a s d e c o m m i s s i o n e d a s a c o n d i t i o n o f t h e n e w F E R C o p e r a t i n g l i c e n s e f o r th e B e a r R i v e r p l a n t s i n 2 0 0 6 , Gr a c e 19 0 8 33 , 24 0 1 Id a h o Gr a c e , I D Be a r R i v e r 11 / 3 0 / 2 0 3 3 20 3 3 Ne w 3 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l . e l e c t r i c a l a n d m e c h a n i c a l w a r \ ( wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , On e i d a 19 1 5 30 , 47 2 Id a h o Pr e s t o n , I D Be a r R i v e r 11 / 3 0 / 2 0 3 3 20 3 3 Ne w 3 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , So d a 19 2 4 14 , Id a h o So d a , 1 0 Be a r R i v e r 11 / 3 0 / 2 0 3 3 20 3 3 Ne w 3 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l . e l e c t r i c a l a n d m e c h a n i c a l w o r k wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , Up p e r A m e r i c a n 19 0 7 69 6 Ut a h Am e r i c a n F o r k , U T Am e r i c a n F o r k 12 / 3 1 1 2 0 0 7 20 3 0 20 3 0 20 0 7 Sig n e d S e t t l e m e n t a g r e e m e n t t o d e c o m i s s i o n P r o j e c t i n 2 0 0 6 , F E R C o r d e r r e c e i v e d g i v i n g Fo r \ ( Cr e e k au t h o r i z a t i o n t o m o v e f o r w a r d w i t h d e c o m m i s s i o n i n o a c t i o n s . W o r k i s u n d e r w a v , Pio n e e r 18 9 7 27 2 2 Ut a h Og d e n . U T Og d e n R i v e r 8/3 1 / 2 0 3 0 20 3 0 Ne w 3 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 0 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k wi l l b e c o m n l e t e d a s n e c e s s a ' " t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e p e r i o d , Big St a i r s 18 9 5 59 7 Uta h Sa l t L a k e C i t y , U T Co t t o n w o o d 6/ 3 0 / 2 0 3 0 20 3 0 20 2 5 20 2 5 Ba s e d o n E n g i n e e r i n g e s t i m a t e o f r e m a i n i n g c i v i l / s t r u c t u r a l l i f e , Cr e e k We b e r 19 1 1 17 4 4 Uta h Oo d e n , U T We b e r R i v e r 5/3 1 1 2 0 2 0 20 2 0 Ba s e d o n c u r r e n t l i c e n s e e x o i r a t i o n d a t e , Big F o r k 19 1 0 26 5 2 Mo n t a n a Big F o r \ ( , M T Sw a n R i v e r 6/ 3 0 / 2 0 5 3 20 5 3 Ne w 5 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , Wa l l o w a F a l l s 19 2 1 30 8 Or e g o n Jo s e p h . O R Ea s t F o r k 2/ 2 8 / 2 0 1 6 20 1 6 Ba s e d o n c u r r e n t l i c e n s e e x p i r a t i o n d a t e , Wa l l o w a R i v e r Po w e r d a l e 19 2 3 26 5 9 Or e g o n Ho o d R i v e r , O R Ho o d R i v e r 2/ 2 9 / 2 0 1 2 20 1 0 Se t l l e m e n t A g r e e m e n t c a l l s f o r d e c o m i s s i o n i n g o f t h e p r o j e c t i n 2 0 1 0 , L i c e n s i n g e x t e n s i o n re o u e s t f i l e d f o r o n e r a t i o n t o 2 0 1 0 a n d w i t h d e c o m m i s s i o n i n o t o f o l l o w , Wh i t e S a l m o n Si g n e d S e t t l e m e n t A g r e e m e n t t o d e c o m i s s i o n p r o j e c t i n 2 0 0 6 , A g r e e m e n t w a s a m e n d e d t o Co n d i t 19 1 3 13 , 23 4 2 Wa s h i n g t o n Wh i t e S a l m o n , W A 12 / 3 1 / 1 9 9 3 20 0 8 all o w r e q u i r e d t i m e t o w o r k t h r o u g h p e n n i t l i n g p r o c e s s , e x t e n d i n g o r i g i n a l 2 0 0 6 Riv e r de c o m m i s s i o n d a t e t o 2 0 0 8 , Me r w i n 19 3 1 13 6 , 93 5 Wa s h i n g t o n Ar e i l No r t h F o r k 4/3 0 1 2 0 0 6 20 4 6 Ne w 4 0 y e a r F E R C o p e r a t i n g l i c e n s e e x p e c t e d i n 2 0 0 6 . C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Le w i s R i v e r wil l b e c o m o l e t e d a s n e c e s s a " , t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , Sw i f t 19 5 8 24 0 , 21 1 1 Wa s h i n g t o n Co u g a r , W A No r t h F o r \ ( 4/3 0 1 2 0 0 6 20 4 6 Ne w 4 0 y e a r F E R C o p e r a t i n g l i c e n s e e x p e c t e d i n 2 0 0 6 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Le w i s R i v e r wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , Ya l e 19 5 3 13 4 , 20 7 1 Wa s h i n g t o n Co u g a r , W A No r t h F o r \ ( 4/ 3 0 1 2 0 0 1 20 4 6 Ne w 4 0 y e a r F E R C o p e r a t i n g l i c e n s e e x p e c t e d i n 2 0 0 6 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Le w i s R i v e r wil l b e c o m p l e t e d a s n e c e s s a " , t o e x t e n d I ~ e t o e n d o f F E R C l i c e n s e p e r i o d , Le m o l o N o , 19 5 5 31 , 19 2 7 Or e g o n To k e t e e F a l l s , O R No r t h U m p q u a 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w a r \ ( Ri v e r wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d ' ~ e t o e n d o f F E R C l i c e n s e o e r i o d , Le m o l o N o , 19 5 6 33 , 19 2 7 Or e g o n To k e t e e F a l l s , O R No r t h U m p q u a 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Riv e r wi l l b e c o m p l e t e d a s n e c e s s a " , t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e n e r i o d . Cle a r w a t e r N o , 19 5 3 15 , 19 2 7 Or e g o n To k e t e e F a l l s , O R Cl e a r w a t e r 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Ri v e r wil l b e c o m n l e t e d a s n e c e s s a r v t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e o e r i o d , Cl e a r w a t e r N o , 19 5 3 26 , 19 2 7 Or e g o n To k e t e e F a l l s , O R Cl e a r w a t e r 10 / 3 1 1 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Ri v e r wil l b e c o m p l e t e d a s n e c e s s a " , t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e p e r i o d , To k e t e e 19 4 9 42 , 19 2 7 Or e g o n To k e t e e F a l l s , O R No r t h U m p q u a 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Ri v e r wil l b e c o m o l e t e d a s n e c e s s a r v t o e x t e n d I ~ e t o e n d o f F E R C l i c e n s e o e r i o d , Fi s h C r e e k 19 5 2 11 , 19 2 7 Or e g o n To k e t e . F a l l s . O R Fis h C r e e k 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k wil l b e c o m p l e t e d a s n e c e s s a " , t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e n e r i o d , So d a S p r i n g s 19 5 2 11 , 19 2 7 Or e g o n To k e t e e F a l l s , O R No r t h U m p q u a 10 / 3 1 1 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l . e l e c t r i c a l a n d m e c h a n i c a l w o r k Riv e r wi l l b e c o m o l e t e d a s n e c e s s a " , t o e x t e n d l i f e t o e n d o f F E R C l i c e n s e n e r i o d , Sl i d e C r e e k 19 5 1 18 , 19 2 7 Or e g o n To k e t e e F a l l s , O R No r t h U m p q u a 10 / 3 1 / 2 0 3 8 20 3 8 Ne w 3 5 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 , C i v i l , e l e c t r i c a l a n d m e c h a n i c a l w o r k Ri v e r wil l b e c o m o l e t e d a s n e c e s s a " , 1 0 e x t e n d l i f e t o e n d o f F E R C l i c e n s e p e r i o d , No r t h F o r k 7/1 / 2 0 0 5 Ne w 3 0 y e a r l i c e n s e i s e x p e c t e d i n 2 0 0 7 , I m p r o v e m e n t s w i l l b e i m p l e m e n t e d t o Pr o s p e c t N o , 19 1 2 26 3 0 Or e g o n Pr o s p e c t , O R 20 3 7 civ i l / s t r u c t u r a l a n d m e c h a n i c a l f a c i l i t i e s a s w a r r a n t e d t o e x t e n d p r o j e c t l i f e t h r o u g h n e w Ro g u e R i v e r An n u a l lic e n s e o e r i o d , No r t h F o r k 7/ 1 / 2 0 0 5 Ne w 3 0 y e a r l i c e n s e i s e x p e c l e d i n 2 0 0 7 , I m p r o v e m e n t s w i l l b e i m p l e m e n t e d t o Pr o s p e c t N o , 19 2 8 32 , 26 3 0 Or e g o n Pr o s p e c t , O R Ro g u e R i v e r An n u a l 20 3 7 civ i l / s t r u c t u r a l a n d m e c h a n i c a l f a c i l i t i e s a s w a r r a n t e d t o e x t e n d p r o j e c t l i f e t h r o u g h n e w li c e n s e o e r i o d , So u t h F o r \ ( 7/ 1 / 2 0 0 5 Ne w 3 0 y e a r l i c e n s e i s e x p e c t e d i n 2 0 0 7 , I m p r o v e m e n t s w i l l b e i m p l e m e n t e d t o Pro s p e c t N o . 4 19 4 4 26 3 0 Or e g o n Pr o s p e c t , O R Ro g u e R i v e r An n u a l 20 3 7 civ i l / s t r u c t u r a l a n d m e c h a n i c a l f a c i l i t i e s a s w a r r a n t e d t o e x l e n d p r o j e c t ' ~ e t h r o u g h n e w lic e n s e p e r i o d , Pa g e 2 o f 4 Ex h i b i t N o . PA C I F I C O R P H Y D R O P L A N T S En g i n e e r i n g En g i n e e n n g Na m e p l a t e FE R C Li c e n s e es t i m a t e o f Re c o m m e n d e d Pl a n t Ye a r Ra t i n g Li c e n s e Sl a t e Lo c a t i o n En e r g y S o u r c e Ex p i r a t i o n ele c t r o / es t i m a t e o f Ye a r f o r 2 0 0 7 NO T E S In s t a l l e d civ i l / s t r u c t u r a l (M W ) Nu m b e r Da t e me c h a n i c a l li f e Us e f u l L i f e li f e Pr o s p e c t N o , 19 3 2 23 3 7 Or e g o n Pr o s p e c t , O R No r t h F o r i e 12 / 3 1 / 2 0 1 8 20 1 8 Ba s e d o n c u r r e n t l i c e n s e e x p i r a t i o n d a t e , Ro o u e R i v e r Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e r t l e m e n t pr o c e s s i s e x p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e Ke n o R e g u l a t i n g 19 6 7 20 8 2 Or e g o n Kl a m a t h F a l l s , O R Lin k R i v e r 2/2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s , A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r Da m An n u a l lic e n s i n g p e r i o d r e s u l t s i n a I ~ e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l , e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e o e r i o d o f 3 0 y e a r s w i l l b e c o m a l e t e d , Th e c u r r e n t F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t p r o c e s s i s 2/ 2 8 / 2 0 0 6 ex p e c t e d t o t a k e a n a d d i l i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e r e n e w a l s Ea s t S i d e 19 2 4 20 8 2 Or e g o n Kl a m a t h F a l l s , O R Li n k R i v e r 20 1 6 re c e i v e d d u r i n g t h a t p r o c e s s , D u e t o i m p e n d i n g c i v i l s t r u c t u r e i n v e s t m e n t n e e d s e x p e c t e d f a An n u a l fi s h p a s s a g e a n d p r o t e c t i o n . t h e p l a n t w i l l b e d e c o m m i s s i o n e d a s p a r t o f t h e n e w l i c e n s e co n d i t i o n s , T h e c u r r e n t l i f e i s c o n s i d e r e d t o b e t h r o u o h 2 0 1 6 , Th e c u r r e n t F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t p r o c e s s i s 2/2 8 / 2 0 0 6 ex p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d . w i t h a n n u a l l i c e n s e r e n e w a l s We s t S i d e 19 0 8 20 8 2 Or e g o n Kl a m a t h F a l l s , O R Lin k R i v e r 20 1 6 re c e i v e d d u r i n g t h a t p r o c e s s , D u e t o i m p e n d i n g c i v i l s t r u c t u r e i n v e s t m e n t n e e d s e x p e c t e d f a An n u a l fis h p a s s a g e a n d p r o t e c t i o n , t h e p l a n t w i l l b e d e c o m m i s s i o n e d a s p a r t o f t h e n e w l i c e n s e co n d i t i o n s , T h e c u r r e n t l i f e i s c o n s i d e r e d t o b e t h r o u a h 2 0 1 6 , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e W e m e n t pr o c e s s i s e x p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d . w i t h a n n u a l l i c e n s e j, C , B o y l e 19 5 8 97 , 20 8 2 Or e g o n Ke n o , O R Kl a m a t h R i v e r 2/ 2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s , A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r An n u a l lic e n s i n g p e r i o d r e s u l t s i n a l i f e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l , e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e a e r i o d o f 3 0 y e a r s w i l l b e c o m o l e t e d , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t pr o c e s s i s e x p e c t e d t o l a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e Kla m a t h L a k e 19 1 9 Or e g o n Kl a m a t h F a l l s , O R re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s , A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r Re s e r v o i r Lin k R i v e r Un l i c e n s e d 20 4 6 li c e n s i n g p e r i o d r e s u l t s i n a l i f e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l , e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e I h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e n e r i o d o f 3 0 y e a r s w i l l b e c o m n l e t e d , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t pr o c e s s i s e x p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e Iro n G a t e 19 6 2 18 , 20 8 2 Ca l i f o m i a Ho m b r o o k , C A Kl a m a t h R i v e r 2/ 2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s . A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r An n u a l lic e n s i n g p e r i o d r e s u l t s i n a l i f e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l . e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e a e r i o d o f 3 0 v e a r s w i l l b e c a m a l e t e d , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 . T h e o n g o i n g s e t t l e m e n t pr o c e s s i s e x p e c l e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e CO P C O N a , 19 1 8 20 , 20 8 2 Ca l i f o r n i a Ho m b r a o k , C A Kla m a t h R i v e r 2/ 2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s . A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r An n u a l lic e n s i n g p e r i o d r e s u l l s i n a I ~ e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l . e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e t i c e n s e o e r i a d o f 3 0 v e a r s w i l l b e c o m a l e t e d , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t pr o c e s s i s e x p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e CO P C O N o , 19 2 5 27 , 20 8 2 Ca l i f o r n i a Ho m b r o o k , C A Kla m a t h R i v e r 2/ 2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s , A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r An n u a l li c e n s i n g p e r i o d r e s u l t s i n a l i f e e x t e n s i o n t h r o u g h 2 0 4 6 . I t i s a s s u m e d t h e c i v i l , e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e o e r i o d o f 3 0 v e a r s w i l l b e c o m o l e t e d , Th e c u r r e n t K l a m a t h F E R C o p e r a t i n g l i c e n s e e x p i r e s i n 2 0 0 6 , T h e o n g o i n g s e t t l e m e n t pr o c e s s i s e x p e c t e d t o t a k e a n a d d i t i o n a l 1 0 y e a r s t o b e c o m p l e t e d , w i t h a n n u a l l i c e n s e Fa l l C r e e k 19 0 3 20 8 2 Or e g o n Ho m b r o o k , C A Fa l l C r e e k 2/ 2 8 / 2 0 0 6 20 4 6 re n e w a l s r e c e i v e d d u r i n g t h a t p r o c e s s , A s s u m i n g a 3 0 y e a r l i c e n s e a t t h e e n d o f t h e 1 0 y e a r An n u a l lic e n s i n g p e r i o d r e s u l t s i n a l i f e e x t e n s i o n t h r o u g h 2 0 4 6 , I t i s a s s u m e d t h e c i v i l , e l e c t r i c a l a n d me c h a n i c a l i m p r o v e m e n t s n e c e s s a r y t o e x t e n d t h e l i f e t h r o u g h t h e l i c e n s i n g p r o c e s s p e r i o d an d t h e l i c e n s e p e r i o d o f 3 0 y e a r s w i l l b e c o m p l e t e d , Li f t o n P u m p 19 1 8 Id a h o 51 . C h a r l e s , I D Be a r R i v e r Un l i c e n s e d 20 3 3 Ne w 3 0 y e a r F E R C o p e r a t i n g l i c e n s e r e c e i v e d i n 2 0 0 3 f o r t h e B e a r R i v e r , W o r l e w i l l b e Sta t i o n co m o l e t e d a s n e c e s s a r Y t o e x t e n d I ~ e t o e n d o f B e a r R i v e r F E R C l i c e n s e o e r i a d , Pa r i s 19 1 0 70 3 Id a h o Pr e s t o n , I D Pa r i s C r e e k Ex e m p t 20 2 0 20 1 0 20 1 0 No l i c e n s e - B a s e d o n e n g i n e e r i n g e v a l u a t i o n o f t h e c a n a l s y s t e m , I t i s j u d g e d t h a t t h e re m a i n i n o l i f e o f t h i s o o r t i o n o f t h e o r o i e c t i s a o o r o x i m a t e l v 4 v e a r s , La s t C h a n c e La s t C h a n c e 20 2 5 No l i c e n s e - I n v e s t m e n t h a s e x t e n d e d t h e I f f e o f t h e e l e c t r o / m e c h a n i c a l s y s t e m s , Ba s e d o n 19 8 4 45 8 0 Id a h o Gr a c e , I D Ca n a l Ex e m p t 20 3 5 20 2 5 En o i n e e r i n n e v l u a t i a n o f t h e r e m a i n i n a l i f e o f I h e c a n a l s v s t e m u Pa g e 3 o f 4 Ex h i b i t N o , 2 PA C I F I C O R P H Y D R O P L A N T S En g i n e e r i n g En g i n e e r i n g Na m e p l a t e FE R C Li c e n s e es t i m a t e 0 1 Re c o m m e n d e d Pl a n t Ye a r Ra t i n g Li c e n s e St a t e Lo c a t i o n En e r g y S o u r c e Ex p i r a t i o n ele c t r o / es t i m a t e 0 1 Ye a r f o r 2 0 0 7 NO T E S In s t a l l e d civ i l / s t r u c t u r a l (M W ) Nu m b e r Da t e me c h a n i c a l lif e Us e f u l L i f e li l e No l i c e n s e - E n g i n e e r i n g e s t i m a t e 0 1 r e m a i n i n g c i v i l l i l e c u r T e n t l y l i m i t s l u t u r e o p e r a t l o n a l l i l e , Up p e r B e a v e r 19 0 7 81 4 Ut a h Be a v e r , U T Be a v e r R i v e r Ex e m p t 20 3 0 20 0 7 20 3 0 Ne g o i t a t i o n s a r e w e l l u n d e r w a y r e g a r d i n g t h e s a l e 0 1 t h e p r o j e c t w i t h c l o s u r e c u r T e n t l y sc h e d u l e d f o r t h i r d o u a r t e r 0 1 2 0 0 7 , -- - Gr a n i t e 18 9 6 Ut a h Sa l t L a k e C i t y , U T Big C o t t o n w o o d Un l i c e n s e d 20 3 0 20 4 8 20 3 0 No l i I ~ e n s e - B a s e d o n E n g i n e e r i n g e s t i m a t e 0 1 r e m a i n i n g e l e c t r o / m e c h a n i c a l l i f e , Cr e e k -- , - -- - , - - -- - I- - _ m .. - - - St r a w b e r r y No l i c e n s e - B a s e d o n r e m a i n i n g t e r m 0 1 t h e e x s t i n g o p e r a t i o n s a g r e e m e n t w i t h B u r e a u 0 1 Ol m s t e d 19 0 4 10 , Uta h Or e m , U T Un l i c e n s e d 20 1 6 20 1 6 20 1 6 Re c l a m a t i o n , I n v e s t m e n t s n e c e s s a r y t o c o n t i n u e o p e r a t i o n t h r o u g h t h a t t i m e a r e e x p e c t e d t o Ri v e r be m a d e , Sn a k e C r e e k 19 1 0 Ut a h He b e r , U T Sn a k e C r e e k Un l i c e n s e d 20 2 0 20 3 0 20 2 0 No l i c e n s e - B a s e d o n E n o i n e e r i n o e s t i m a t e 0 1 r e m a i n i n o e l e c t r o / m e c h a n i c a l l i l e , Fo u n t a i n G r e e n 19 2 2 10 6 9 0 Ut a h Fo u n t a i n G r e e n , U T Big S p r i n g s Ex e m p t 20 1 0 20 1 0 20 1 0 No l i c e n s e - B a s e d o n E n g i n e e r i n g e s t i m a t e 0 1 r e m a i n i n g e l e c t r o / m e c h a n i c a l a n d c i v i l str u c t u r e s l i f e , Gu n l o c k 19 1 7 92 8 1 Ut a h St . G e o r g e , U T Sa n t a C l a r a Ex e m p t 20 2 0 20 2 0 20 2 0 No l i c e n s e - C i v i l s t r u c t u r e i n v e s t m e n t s h a v e s h i f t e d b a s i s l o r r e m a i n i n g l i f e e s t i m a t e t o t h e Ri v e r el e c t r o / m e c h a n i c a l c o m c o e n t s 0 1 t h e c r o i e c t . No l i c e n s e . . C i v i l s t r u c t u r e i n v e s t m e n t s h a v e s h i f t e d b a s i s f o r r e m a i n i n g l i f e e s t i m a t e t o t h e Sa n t a C l a r a 19 2 0 92 8 1 Ut a h St . G e o r g e , U T Sa n t a C l a r a Ex e m p t 20 2 0 20 2 0 20 2 0 Riv e r ele c t r o / m e c h a n i c a l c o m n o e n t s 0 1 t h e c r o i e c t . Ve y o 19 2 0 92 8 1 Ut a h SI . G e o r g e , U T Sa n t a C l a r a Ex e m p t 20 2 0 20 2 0 20 2 0 No l i c e n s e - C i v i l s t r u c t u r e i n v e s t m e n t s h a v e s h i f t e d b a s i s l o r r e m a i n i n g l i f e e s l l m a t e t o t h e Ri v e r ele c t r o / m e c h a n i c a l c o m n o e n t s 0 1 t h e c r o i e c t . Viv a N a u g h t o n 19 8 6 Wy o m i n g Ke m m e r e r , W Y Ha m s a r k Ex e m p t 20 4 0 20 4 0 20 4 0 No l i c e n s e - B a s e d o n E n g i n e e r i n g e s t i m a t e 0 1 r e m a i n i n g e l e c t r o / m e c h a n i c a l l i f e , ". . ~ . De s c h u t e s Re m a i n i n g l i f e b a s e d u p o n e x p i r a t i o n o f a g r e e m e n t w i t h C e n t r a l O r e g o n l I T i g a t i o n D i s t r i c t f o r Cl i n e F a l l s 19 4 3 Or e g o n Re d m o n d , O R Un l i c e n s e d 20 1 3 20 1 8 20 1 3 th e u s e 0 1 t h e w a t e r r i g h t a n d t h e o p e r a t i o n o f t h e p l a n t i n 2 0 1 3 , N o e x p e c t a t i o n a t t h i s t i m e Ri v e r th a t a o r e e m e n t w i l l b e r e n e w e d , Be n d 19 1 3 Or e g o n Be n d , O R De s c h u t e s Un l i c e n s e d 20 1 0 20 1 8 20 1 0 No l i c e n s e . . B a s e d o n E n g i n e e r i n g e s t i m a t e 0 1 r e m a i n i n g e l e c t r o / m e c h a n i c a l l i f e , Ri v e r So u t h F o r k B i g Ma j o r c i v i l c o s t r i s k r e d u c e d w i t h e m m i n a t i o n o f c a n a l m a i n t e n a n c e a g r e e m e n t . L i f e e x t e n s i o Ea g l e P o i n t 19 5 7 Or e g o n Sh a d y C o v e , O R Un l i c e n s e d 20 2 5 20 2 5 20 2 5 ex p e c t e d t o b e f e a s i b l e l o r e l e c t r i c a l / m e c h a n i c a l e q u i p m e n t t o e x t e n d l i f e e q u i v a l e n t 0 1 2 0 Bu t t e C r e e k Iv e a r s , To t a l C a p a c i l v o 10 8 7 , 85 2 -- - - - __ , m u m -- - - - , - -_ . . , , - , - -- - - - -' - - - -- - -- - - - -- - - - - , -- - - - - - -- _ _, _ n- - No t e s : To t a l c a p a c i t y i n c l u d e s O l m s t e d ( n o t o w n e d b y P a c i f i C o r p E n e r g y ) a t 1 0 , 3 M W Ex h i b i t N o , 2 Pa g e 4 o f 4