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FBC Resources

Dan Egolf

Manager, Power Supply & Planning

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FBC Resources• FBC-owned generation resources under the Canal Plant

Agreement (CPA)

• Brilliant Plant

• BC Hydro Power Purchase Agreement (PPA)

• Waneta Expansion

• Brilliant Expansion

• Regional power markets

• International Joint Commission Order for Kootenay Lake

• Columbia River Treaty potential impacts

• Climate change potential impacts to resources

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FBC Resource Portfolio

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FBC CPA Generation Resources

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FBC-Owned Generation CPA Resources

• Upgrade/Life Extensions completed for 12 of 15 units

• CPA started in 1976 - earliest it can terminate is Jan.1, 2036

• Entitlements will not change provided the generation is available to operate and the generation characteristics haven’t changed

• Not impacted by actual water flows

• Minimal ability to store water from month to month

• After Jan.1, 2036 it is much more likely that changes to entitlements could occur

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Brilliant Contract

• Brilliant Plant constructed as part of the WWII war effort

• Sold to CPC and CBT in 1996 with West Kootenay Power (FBC) taking a 60-year contract for power

• Potential price adjustment in 2026 depending on market conditions

• Power is take-or-pay

• Full CPA plant, but regulated flow benefit is about 60 GWh/yr

• Fully Upgraded/Life Extended

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Power Purchase Agreement with BCH

• Renewed in 2013 for 20 years

• 200 MW and 1,041 GWh of embedded cost power

• Additional energy at BCH LRMC

• Can nominate the energy up or down to respond to requirements

• Reliable and flexible reasonably-priced resource

• Terminates in 2033 - renewal is not certain

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Waneta Expansion

• Owned by Waneta Expansion Limited Partnership

• Began April 2015 for 40 years

• Renewal right for additional 40 years

• Capacity only, all energy is going to BCH

• Full CPA Plant

• Excellent regulating resource for a potential FBC renewable portfolio

• 50 MW RCA WAX Surplus Capacity sale to BCH for 10 years

• FBC/BCH seek to maximize overall provincial values

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Brilliant Expansion

• Owned by Brilliant Expansion Power Corporation

• Majority of power sold to BCH

• Full CPA Plant

• FBC small capacity and energy contract through 2017

• Power may become available at some time over the next 20 years

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Regional Power Markets

• Wind is maturing• Saturated• Forecasting and integration improving

• Solar is growing fast in southern US• Rooftop solar• Community solar

• Inverted market prices starting to occur

• FBC/Powerex CEPSA Agreement to Sep.30, 2018• All WAX surplus• All FBC market purchases• Guaranteed supply

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PNW Utilities Resources

PNUCC Northwest Regional Forecast (April 2015)

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International Joint Commission

• 1938 IJC Order

• Protects US farmers from higher water levels

• Rule curve ensures flood control benefits from Grohman Narrows Excavation

• Has never been seriously reexamined since 1938

• If it were to be reopened, the resultant order may impact FBC CPA entitlements

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Columbia River Treaty (CRT)

• Canada or US can terminate most provisions on or after Sep. 2024 with 10 years notice

• US has provided its recommendations on bringing greater economic and environmental benefits to the Northwest

• How or if the CRT changes is not yet determined

• Potential salmon restoration issues

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Climate Change Potential Impacts to Resources

• It is not well understood what the climate change impacts may be

• Issues with respect to generation resources are:• Timing of precipitation

• Not as serious unless more rainfall early Spring• Amount of precipitation

• If precipitation outside of freshet period is reduced, available energy is reduced

• FBC-owned plants are fairly small in size, reducing the impact

• Earlier freshets would likely mean less intense run-off as the days will still be short

• Not expected to potentially impact FBC entitlements until 2036

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Summary

• CPA could undergo revision in 2036, FBC expects there will be significant discussions up to 10 years before then

• Brilliant Contract price review in 2026 could increase costs

• PPA expiry in 2033

• RCA expires in 10 years - additional 50 MW will then be available

• BRX power may become available - if so, it is likely to be an opportunity that may not repeat for some time

• Solar power is gaining significant importance to the south and may grow into more northern latitudes in time

• Potential impacts to existing resources due to IJC and CRT

• Changing climate conditions impacts are not yet clear

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Questions?