Policy Reference PacifiCorp’s Open Access Transmission Tariff (“OATT”) Schedule 5 (Operating Reserve – Spinning Reserve Service) and Schedule 6 (Operating Reserve – Supplemental Reserve Service). Definitions No definitions other than those defined herein and those currently contained in PacifiCorp’s OATT are required for this business practice. Purpose The purpose of this business practice is to specify the practices outlined in PacifiCorp’s OATT pertaining to the calculation and assessment of charges for service provided under Schedules 5 (Spinning Reserve Service) and 6 (Supplemental Reserve Service) (collectively, the “Operating Reserve Charges”) for Transmission Customers who elect to self-supply or make comparable alternative arrangements to supply these services. These calculations are intended to apply to reserve charges effective January 1, 2012, for Schedules 5 and 6 pursuant to the approved settlement in Federal Energy Regulatory Commission Docket No. ER11-3643. Reserve Obligation A Transmission Customer must purchase Schedule 5 and 6 services from the Transmission Provider, self-supply the service, or make alternative comparable arrangements to satisfy its obligations (Reserve Obligation). A Transmission Customer’s Reserve Obligation for each hour is defined as (1) its Network Load minus any Network Resources where the supplier is carrying the Reserve Obligation for that Network Resource as evidenced by etag information, and (2) a Transmission Customer may have transactions with other parties as allowed by their Service Schedules or Agreements. On these transactions the etags will specify whether the Transmission Customer or the other party will have the Reserve Obligation for those schedules. Pursuant to Schedules 5 and 6 of PacifiCorp’s OATT: A Transmission Customer may choose to self-supply all or a portion of its Reserve Obligation under Schedules 5 and 6. The total Reserve Obligation for a Transmission Customer who self-supplies is determined by the currently-effective version of WECC Regional Reliability Standard BAL-STD002. Transmission Customer choosing to self-supply all or a portion of its Reserve Obligation, the billing determinants for supplemental purchases of Schedule 5 or 6 reserve service shall be determined by: (1) identifying the difference between the amount self-supplied during each hour each month and the Transmission Customer’s Reserve Obligation , as evidenced by etag information and determined above in accordance with WECC Standard BAL-STD-002; and (2) charging the Transmission Customer the Hourly Rate multiplied by the amount of MWs identified in (1) where the Transmission Customer did not self supply for each hour. The Transmission Customer shall schedule that portion which it will self-supply and/or supply from third parties up to seven days in advance pursuant to procedures set forth in the business practices of the Transmission Provider (see PacifiCorp Business Practice #34: Self-Supply or Third-Party Supply of Ancillary Services and PacifiCorp Business Practice #39: E-Tagging Reserves). During any period that a Transmission Customer has scheduled self-supply and/or supply from third parties but fails to provide the full amount scheduled due to partial or full forced outage of the generation source or a transmission curtailment or interruption, the Transmission Customer shall purchase the shortfall at the Hourly Rate identified in Schedules 5 and 6, as applicable. This business practice applies to all Transmission Customers unless explicitly contradicted by contract terms. PRACTICE The following sections describe the calculation approach for Network Customers and Transmission Customers taking Point-to-Point Transmission Service (“Point-to-Point Customers”) who have elected to self-supply Operating Reserve service or make alternative comparable arrangements to satisfy the obligation. I. Network Customers a. Description of Operating Reserve Charge Calculation for Network Customers The following is a high-level description of the overall Operating Reserve Charge calculation for Network Customers under both Schedules 5 and 6. Each of these steps (1) through (6) is further detailed below: 1) Determine the Reserve Obligation a. Reserve Obligation = Network Load (including losses) – Network Resources where the supplier carries the Reserve Obligation + schedules to other parties where the Transmission Customer provides the reserves (including losses) as evidenced by scheduled tag information. 2) Calculate the Operating Reserve Requirement by generation type a. Use the hydro/wind and thermal reserve percentages set forth in Schedules 5 and 6 to calculate the Operating Reserve Requirement by generation type 3) Track capacity tags submitted for Operating Reserves a. Query for any Spinning Reserve or Supplemental Reserve capacity tags documenting self-supply of Operating Reserves 4) Track any Operating Reserve deployment failures a. Account for any occurrences where self-supplied Operating Reserves were not deployed when called upon 5) Calculate the Spinning Reserve Charge a. Determine how much of the Spinning Reserve Requirement was covered by capacity tags (minus any deployment failures) b. Multiply any Load Obligation MW not covered by self-supply by the Spinning Reserve Hourly Rate 6) Calculate the Supplemental Reserve Charge. a. Determine how much of the Supplemental Reserve Requirement was covered by capacity tags (minus any deployment failures) b. Multiply any Load Obligation MW not covered by self-supply by the Supplemental Reserve Hourly Rate 7) For deployed Operating Reserves, the energy produced will be purchased by PacifiCorp at [need to agree on purchase terms, the existing “just included in Energy Imbalance” does not work.]