Roundup Power Project

Development ParticipantsRoundup Power Project

Bull Mountain Development Co.

FGS & Associates, LLCPower Project Mgmt.

Sargent & Lundy LLCPower & Permittting

Consultant / AE

Weir Intl Mining Consultants

Mining Consultant

Lorenzen Engineering

Permitting Consultant

Mission Engineering

Permitting Consultant

BKBH, PCPermitting Consultant

(Bank’s independent consultant)

Bull Mountains MineLocation

• Bull Mountains Mine is located in Musselshell and Yellowstone Counties, Montana

• Southeast of the town of Roundup

• Approximately 35 miles north of the city of Billings, Montana

Mine Status

• Mining began in August 2003

• Contracts in place

• First shipments in September 2003

• Test burns at major utilities

• Additional mineral rights purchased

Technical Description of Roundup Power Project

Roundup Power Project:Basic Characteristics

• Mine mouth power generation facility• 2 x 350 MW (net) units• Pulverized coal, subcritical (2400

psi/1000F/1000F)• Pollution control:

– Dry scrubber for SOx control– Selective catalytic reduction for NOx control– Baghouse for particulates– Air-cooled condenser

FGS & Associates, LLC

Roundup Power Project:Basic Characteristics

• Water supply from well field (3 wells @ 400 gpm each)

• Water collected and recycled – zero discharge• 35-mile transmission line to Broadview substation• Coal transported by conveyor from mine wash

plant directly to the power plant.• Two 175-meter stacks

FGS & Associates, LLC

Performance Data andMaterials Requirements

• 386 MW gross, 350 MW net per unit (9.3% aux. power)• 9,840 Btu/kWh net plant heat rate (full load, including

allowance for operating degradation)• Coal consumption:

– 165 tons/hour/unit (full load)– 1.31M tons/year/unit (90% capacity factor)

• Air emissions (values for permitting, two units):– SOx: 0.12 lb/MBtu (2160 tons/year/unit)

– NOx: 0.07 lb/MBtu (1260 tons/year/unit)– Particulates: 0.015 lb/MBtu– CO2: 211 lb/MBtu

FGS & Associates, LLC

Plant Area

Air Pollution Emissionsin Permit Application

Pollutant Emissions Control TechnologiesNitrogen Oxides 0.07 lb / MBtu Selective catalytic reduction 90%

overall reduction Overfire airLow NOX burners

Sulfur Dioxide 0.12 lb / MBtu Low sulfur coal94% Overall Reduction Dry scrubber

Particulate Matter 0.015 lb / MBtu Pulse-jet baghouse99.8% overall reduction

FGS & Associates, LLC

Roundup Power Project Improving Emissions from Coal Fuel

Plants

4.37

1.04

0.40.25 0.12

1.08

0.440.19 0.14 0.07

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

US Average1970

US Average2000

"Clear Skies" Proposal

2010 2008

"Clear Skies" Proposal 2018

Roundup PowerProject

Po

un

ds

pe

r m

illio

n B

TU

SO2

NOx

Source: US EPA Environmental Scorecard 2000: Feb. 2002

“Clear Skies” Administration Proposal & US DOE 2002 Annual Energy Outlook

Other Permits

• Water Rights

• FAA

• Letter from COE – no permits required

• Others routine – maximum 30 day lead time

Key Milestones

• Began permitting: July 2001• Submitted air permit: January 14, 2002• Draft air permit issued: August 12, 2002• Record of decision: January 31,2003• Final awards major equipment packages: Oct 2004• Unit 1 boiler hydro test: Mar 2007• Commercial service for Unit 1: March 2008• Commercial service for Unit 2: July 2008

FGS & Associates, LLC

Overall Process - Traditional

1. Permitting

2. Final Engineering

3. Construction

4. Operation

Overall Process - Current

1. Permitting

2. Lawsuits

3. Final Engineering

4. Construction

5. Operation

Permitting Status

• Permit filed 1/14/02

• Responded to questions from FLM’s (issue is regional haze)

• Completion letter from MDEQ received on 8/1/02

• Draft permit issued 8/12/02

• Record of Decision 1/31/03

Air Permit Appeal

• Filed 2/15/03

• Usual enviro groups

• Kitchen sink approach

• No new issues

• Hearing on June 4 – 6, 2003

• Board dismissed virtually all items in appeal

Permit Lawsuit

• Filed 11/26/03 in Musselshell County• Challenges Board of Environmental Review

appeal decision• Interventions in our behalf by WETA, and

AFL-CIO • Record is clear on all issues• Court ruled strongly in favor of the permit

on March 31, 2004

MACT Letter Appeal

• Filed in December 2003• BER appointed Hearing Examiner to hear appeal• Stated issue is mercury control• Another vehicle to try to stall the project• Hearing held on April 20 & 21, 2004• Hearing officer recommended denying all portions

of the appeal.• BER denied petition 7-0 on June 4, 2004

EIS Status

• Not required under Montana rules• Volunteered to do EIS• Approved EIS for mine includes plant property• Scoping Hearing: 4/4/02• EIS supplement submitted: 5/21/02• EIS draft to be issued 11/15/02• Hearing 12/5/02• Record of Decision 1/31/03

FGS & Associates, LLC

EIS Lawsuit

• Filed in Lewis & Clark County

• Motion to change venue to Musselshell County by MDEQ, BMDC1 and intervenors (WETA & AFL-CIO) approved

• Court date set for 11/29/04

DOI Lawsuit

• Filed October 29, 2003 by Nat. Parks Conservation Assoc., Greater Yellowstone Coalition, Wilderness Soc., & private individual

• Objects to DOI finding of no significant impact

• BMDC1 to enter as intervenor

Construction

• Engineering released in April

• 1st package to be released for bids in June

• Start late August

• 2nd package to be released for bids in August

• Start October

Economic Impact of Roundup Power Project

• Taxes on 2.7 million tons/year of coal used

• Property and school taxes on $800 million investment

• Transmission taxes on 5.5 m Mwh/year

• Payroll and income taxes on 150 employees at about $40,000/year + additional temporary maintenance activities

• Several million in direct local purchases and contracts

• Ripple or multiplier effect of payroll and local purchases (~ $50m/yr)