Northwest Hydroelectric AssociationWenatchee, WA

September 21, 2016

“Regulatory Lessons from the Small Hydro Trenches”

Summer Falls Power Plant

Summer Falls Power Plant

Main Canal Power Plant

Russell D. Smith Power Plant

E.B.C. 4.6 Power Plant

P.E.C. 66.0 Power Plant

Columbia Basin Hydropower“Generation from Irrigation”

• Columbia Basin Hydropower (CBHP) provides administration, operation, and maintenance functions for hydroelectric generation facilities owned by the 3 Irrigation Districts that make up the Columbia Basin Irrigation Project, approximately 700,000 acres.

• The Districts currently own seven projects, ranging in size from 2-94 MW with total generation capacity of all projects = approx. 150 MW

• The power from the five projects that CBHP operates and maintains goes to the cities of Seattle and Tacoma.

• Two other hydroelectric facilities are operated and maintained under contract by Grant County PUD.

• All of the existing projects are FERC licensed projects.

• Over the last several years CBHP has studied a number of sites for potential new development. Project capacities range from 650 kW small hydro, up to 500 MW pumped storage.8

FERC ACTIVITY

• Filed for 10 Preliminary Permits late 2012 and early 2013

• CBHP accused of site banking

• CBHP has “municipal preference” federal regulations

• 8 conduit sites and one large pumped storage project (2 alternatives)

• Provide FERC required six month progress reports

• Working with engineering consultants (Kleinschmidt) pre-feasibility studies

• Studying new technologies and competing economics

• Trying to find partners for proposed projects

• Meeting with interested utilities and co-ops that expressed interest

• Waiting for the BOR to provide established flow regime for the Pinto Project

• BOR delayed due to acquisition of land and flowage easements

• Mid-year 2015 CBHP files to surrender 3 conduit sites

• Mid-year CBHP files for extension request on Pinto site

• FERC grant 2 year extension for Pinto site

• Late 2015 CBHP files for extension request four Franklin County sites

• January 2016 FERC denies request for extension on Franklin County sites

• FERC order identifies LOPP option with the BOR and that they now have jurisdiction – 2013 legislation and MOA

• CBHP preliminary permits for Franklin sites expire Feb. 28, 2016

• 3rd Parties file for new “FERC” preliminary permits on March 1, 2016

• CBHP files for rehearing request with new information on our preliminary permits

• FERC denies CBHP request

• March 2016 3rd party file declaratory order with FERC and request

for expedited action, claiming FERC still has broad jurisdiction for

conduit sites

• Multiple motions filed before FERC by third party and the BOR

• Waiting now for months on FERC action

• FERC Commission agenda for September 22, 2016

FERC ACTIVITY (Cont.)

BOR and OTHER ACTIVITY

• Immediately after FERC denial for preliminary permit extension CBHP files for Lease of Power Privilege with BOR

• Approximately 30 days after filing with the BOR, CBHP receives reply for BOR stating that no action on the application for a LOPP until after the pending issues with the FERC are resolved

• CBHP would like to start some development activity in 2017

• FERC “conduit exemptions” not applicable as CBHP does not have fee title to the property (BOR property)

• May be able to use BOR easements

• May have some other property issues (3rd party options)

• May have to use condemnation

• Energy prices are low (gas driven)

• REC values are low – abundance of wind and solar REC’s from existing projects, and more to come

• Projects may qualify for some loans or grants depending on technology (water users priority)

• CAN COMPETE WITH WIND AND SOLAR ON ECONOMICAL BASIS

• HYDRO NEEDS TO BE IN THE YOUNGER GENERATION VOCABULARY!!!!

BOR and OTHER ACTIVITY (cont.)

Pinto Dam

Mesa Check (P.E.W.C. 1973)

Scooteney Inlet

P.E. 16.4 Wasteway

P.E. 46A

THANK YOU

Tim Culbertson – Secretary Manager

tculbertson@cbhp.org

(509) 754-2227 x222

P.O. Box 219

457 1st Avenue NW

Ephrata, WA 98823

www.cbhydropower.org