British Columbia Utilities CommissionInformation Request No, 1.76.1 Dated:-October 3,2007British Columbia Hydro & Power AuthorityRevised Res onse issued November 19, 2007British Columbia Hydro & Power Authority Exhibit:BC H dro/Alcan - 2007 Electrici Purchase A reement B1-8

76.0 Reference: Exhibit B1-2-1, Chapter 6, General

1.76.1 Please refer to the "SCHEDULE 201 QUALIFYING FACILITY POWERPURCHASE INFORMATION" from PGE located at:

http://www.portlandgeneral.com/about_pge/reg ulatory_affai rs/pdfs/schedules/sched_201.pdf

Please provide a calculation of the levelized on-peak and off-peakprices in Tables 1 and 2 of the document and a comparison of thoselevelized prices (in 2006 Canadian dollars using exchange rates of0.885 and 1) to BC Hydro's various price benchmarks in Chapter 6.

REVISED RESPONSE:

The annualized on-peak (HLH) and off-peak (LLH) prices from the abovereferenced document are provided in the Table 1 to this response. The prices areprovided in nominal US dollars, directly reflecting the values presented in thereferenced document. These US dollar prices have been converted to Canadiandollars at 0.885 US dollars to the Canadian dollar. They have also been convertedat the exchange recently provided by the BC Treasury Board 1

While there is no evidentiary foundation for an exchange rate of parity, a parity .assumption would be the equivalent of assuming the prices in Canadian dollarswere the same as the prices presented in US dollars.

The referenced Portland General Electric (PGE) avoided cost table contains thefixed price option for PGE's Standard Contract Power Purchase Agreement (thePGE PPA). The PGE PPA is available to power projects of up to 10 MW that arelocated in its service territory.

Energy delivered pursuant to the PGE PPA is relatively non-firm. In anyone year,the IPP is required to deliver the lesser of (a) 75 per cent of its annual average netoutput; or (b) the amount specified by the proponent. There are no hourly ormonthly minimum amounts specified.

Given the relative non-firm nature of the product, energy delivered pursuant to thePGE PPA would have a quality generally akin to, but possibly not quite as goodas, Tier 2 Electricity. It is not comparable to the Tier 1 Electricity or the schedulingcapacity in the 2007 EPA.

The PGE PPA pricing is only comparable to two alternative price benchmarkspresented in Chapter 6 of the 2007 EPA Report, the spot market purchases in

1 The BC Treasury Board released an updated forecast of the Canadian/US exchange rate inOctober 2007. This is presented in the response to BCUC IR 1.68,6.

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7 ))b I ."I,!.)B1-13

British Columbia Utilities CommissionInformation Request No, 1.76.1 Dated: October 3,2007British Columbia Hydro & Power Authority -Revised Res onse issued November 19, 2007British Columbia Hydro & Power Authority Exhibit:BC H dro/Alcan - 2007 Electricit Purchase A reement B1-8

section 6.2 and the market forwards in section 6.4.

1) Comparison of Annual Electricity Prices

Following are comparisons of the referenced PGE prices for the period 2008through 2026 to the BC Market Price forecasts as measured at Mid-C and the BCHydro forecast of flat Mid-C market forwards. This chart presents the Tier 2Electricity price delivered to the LM, le~lVingall other prices as measured at Mid­C/PGE. The energy assoCiated with prices that are measured and presented atMid-C in this chart would require transportation to the BC Border or to the LM tobe completely comparable to the Tier 2 Electricity price.

$140

$120

$100"iiic'E~ $80

~::2 $60iflC/)::J

$40

$20

$-

Portland General and BC HydroPrice Comparison in PNW

I' ...... Flat Annual I--Scenario Average--Confer---EIA---High Gas..... BCH Mkt Fwd - Avg-'- BCH Mkt Fwd - High- BCH Mkt Fwd - Low-- Tier 2 Electricity at LM I

PGE Market Forward Prices

~

--_.----~-----~-

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

2) Comparison to BC Hydro Mid-C Market Forwards

The referenced PGE document states "Avoided Costs are based on forwardmarket price estimates through December 2011, the period of time during whichthe Company's Avoided Costs are associated with incremental purchases ofEnergy and capacity from the market".

Table 2 provides the PGE forward market forward prices. These prices arecomparable to the BC Hydro Mid-C market forecast presented in Table 6-4 of theReport.

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British Columbia Utilities CommissionInformation Request No. 1.76.1 Dated: October 3,2007British Columbia Hydro & Power AuthorityRevised Response issued November 19, 2007British Columbia Hydro & Power AuthorityBC Hvdro/Alcan - 2007 Electricitv Purchase Aoreement

Exhibit:B1-8

The PGEprices for Mid-C market forwards are generally higher than the BC Hydroprices. With an average price for the 2008 through 2011 period of $66.4/MWh,these prices are supportive of but somewhat higher than the range BC Hydro usedin Chapter 8 of the Report of $60/MWh to $65/MWh for Mid-C market forward.

Table 3 presents the PGE prices levelized in 2006 dollars based on the prices inTable 1. Table 3 is not comparable to the prices of any of the benchmarks inChapter 6 of the 2007 EPA Report as the underlying term (2008 - 2026) is differentthan any product in the 2007 EPA Report. It is provided solely to respond to thespecific request in this IR.

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British Columbia Utilities CommissionInformation Request No. 1.76.1 Dated: October 3,2007British Columbia Hydro & Power AuthorityRevised Response issued November 19,2007British Columbia Hydro & Power Authority Exhibit:BC Hvdro/Alcan - 2007 Electricitv Purchase AQreement B1-8

Table 1: Calculated Prices from the PGE Avoided Cost Tables measured at the PGE PPA Point of Interconnection .:z.~'-II '

Table 1 Prices in US Dollars Prices at 0.885 Exchange2 BC Treasury Oct 2007 Exchange3 IYear Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH2008 65,6 71.0 58,8 74.2 80,2 66.5 67.8 73.3 60.72009 67.7 73.5 60A 76.5 83.0 68.3 71.7 77.7 63.92010 66,9 73.5 58,6 75.6 83.0 66.2 72.5 79.5 63.42011 65.3 71.2 57,8 73.8 80.4 65.3 71.8 78.2 63.52012 63,8 71.0 54.6 72.1 80.2 61.7 70.1 78.0 60.02013 65.3 72.7 55.9 73.8 82.1 63.1 71.7 79.8 61.42014 68.0 75.5 58.4 76.8 85.4 66.0 74.7 83.0 64.22015 71,8 79.5 62.0 81.2 89.9 70,0 78.9 87.4 68.12016 72.1 80.0 62,1 81.5 90.4 70,1 79.2 87.9 68.22017 73.9 82.0 63.6 83.5 92.7 71.9 81.2 90.1 69.92018 75.7 83.9 - 65.1 85.5 94.8 73,6 83.1 92.2 71.62019 78.6 87.1 67.9 88.9 98.4 76.7 86.4 95.7 74.62020 81.6 90.2 70,6 92.2 101.9 79.8 89.7 99.1 77.62021 83.5 92.4 72.3 94.4 104.4 81.6 91.8 101.5 79.42022 85.4 94,5 73.9 96.6 106.8 83,5 93.9 103.8 81.22023 87.4 96.7 75.6 98.8 109.3 85.4 96.1 106.3 83.12024 89.3 98.8 77.3 101,0 111,6 87.4 98.2 108.6 85.02025 91.5 101.2 79.1 103.4 114.3 89.4 100.5 111.2 87.02026 93.6 103.5 80.9 105.7 116.9 91.5 102.8 113.7 89.0

2 The US Dollar to Canadian dollar exchange rate is based on the exchange rate used in the analysis of the 2007 EPA, as provided by the BCTreasury Board in the 2007/2008 - 2009/2010 Budget and Fiscal Plan.

3 Based on the BC Treasury Board update to the US to Canadian dollar exchange rate of October 2007,

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Table 2:

British Columbia Utilities CommissionInformation Request No. 1.76.1 Dated: October 3,2007British Columbia Hydro & Power AuthorityRevised Response issued November 19,2007British Columbia Hydro & Power AuthorityBC Hvdro/Alcan - 2007 Electricitv Purchase Aareement

Market Forward Prices from the PGE Avoided Cost Tables

Exhibit:81-8

Prices in US Dollars Prices at 0.885 Exchange Be Treasury Board Oct 2007 Exchang. I~IFlat Flat Flat

Year Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH2008 65.6 71.0 58.8 74.2 80.2 66.5 67.8 73.3 60.72009 67.7 73.5 60.4 76.5 83.0 68.3 71.7 77.7 63.92010 66.9 73.5 58.6 75.6 83.0 66.2 72.5 79.5 63.42011 65.3 71.2 57.8 73.8 80.4 65.3 71.8 78.2 63.5

Prices in US Dollars Prices at 0.885 Exchange Rate4 Updated Exchange RateSFlat Flat Flat

Year Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH Annual PGE HLH PGE LLH2008 65.6 71.0 58.8 74.2 80.2 66.5 67.8 73.3 60.72009 67.7 73.5 60.4 76.5 83.0 68.3 71.7 77.7 63.92010 66.9 73.5 58.6 75.6 83.0 66.2 72.5 79.5 63.42011 65.3 71.2 57.8 73.8 80.4 65.3 71.8 78.2 63.5

4 The US dollar to Canadian dollar exchange rate is based on the exchange rate used in the analysis of the 2007 EPA, as provided by the BCTreasury Board in the 2007/2008 - 2009/2010 Budget and Fiscal Plan.5 Based on the BC Treasury Board update to the US to Canadian dollar exchange rate of October 2007.

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British Columbia Utilities CommissionInformation Request No, 1.76.1 Dated: October 3,2007British Columbia Hydro & Power AuthorityRevised Response issued November 19. 2007British Columbia Hydro & Power AuthorityBC Hvdro/Alcan - 2007 Electricitv Purchase AQreement

Exhibit:81-8

Table 3: Levelized (2006 dollars) PGE Avoided Cost Table for the 19 Year Period 2008 through 2026

6

7

Prices in US Dollars Prices at 0.885 Exchange Rate6 Updated Exchange Rate7DiscountRate Flat Annual PGE HLH PGE LLH Flat Annual PGE HLH PGE LLH Flat Annual PGE I-ILH PGE LLH

5.25% 60.7 67.0 52.7 68.6 75.7 59.6 66.2 73.0 57.58.00% 60.6 66.8 52.8 68.5 75.5 59.6 66.0 72.8 57.4

The US dollar to Canadian dollar exchange rate is based on the exchange rate used in the analysis of the 2007 EPA, as provided by the BCTreasury Board in the 2007/2008 - 2009/2010 Budget and Fiscal Plan.Based on the BC Treasury Board update to the US to Canadian dollar exchange rate of October 2007.

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