JPA MEETING Held on July 15, 2009 ATTENDEES: (Refer to sign-in sheets) QUESTIONS / ANSWERS: 1. BC Remarketing Effort – Simonton Q: Ken – Are there other activities going on that might disrupt Western’s administrative process? If so what does Western plan to do in the event these other activities are successful? A: Western is aware of efforts by parties to seek a legislative method of reallocating the BCP. It is Western’s expectation that we will proceed with our usual activities. Q: If congress passes legislation to re-allocate the BCP what will Western’s response be? Why doesn’t Western wait to start an administrative process until the legislative route has been abandoned? A: Just like any other statutes – we will do what Congress states. If directed by Congress to deviate from an administrative process, Western will do so. Western believes that ample time must be provided for a complete and thorough public process; waiting for the conclusion of legislative efforts could hinder Western’s ability to administer a fair and open public process. If legislation comes out in mid stream of Western’s process, Western will abandon the administrative process. Q: Bob – Have you determined which path the administrative process will take? A: We’ve been in the process of putting together proposals which will either include EPAMP , or some alternative form which will have some value to the public. The FRN has not come out, and we’re not at liberty to announce what is to be proposed prior to the FRN being published. Q: Michael – You would answer the question after public input right? A: Yes. Q: The FRN will be open to give us a chance to comment? A: Yes, anything proposed will be open to the public comment prior to anything being considered as final. Q: Have you sought the General Council’s opinion, and do you have legal support? A: Yes, we have sought their opinion on what we can and cannot do, and we will have their full support in whatever is proposed. 2. O&M Contracts – Brian Young Q: Have you discussed with the Bureau whether any of that million dollars of ‘08 money is applicable in this region for O&M work? A: Just some very general discussions – know Reclamation was looking at that, but don’t know of any decisions made. C: Bob – Counter told yesterday in Santa Fe that they’ve allocated everything. Theoretically they know where the money is going. Don’t know that they’ve informed Western. A: Hillis – Western O&M’s the transmission lines in the Yuma area, and we’re engaged with bureau to use some of the ARRA money - particularly the GilaGila Valley Transmission Line is in very bad shape. Q: Anne – Every year, there’s a requirement in the Hoover contracts for meter testing. We’ve been audited to ensure this is done every year. Does Western have a process to auto-schedule that, instead of having us witness it? A: Hillis – Can come back to this. It’s a David question. 3. FTS Conversions to OATT – Brian Young Q: Michael – Stay on OATT – I have some serious problems with the OATT. There’s a proposal in – had a meeting and talked about the OATT. If a customer arranges for a delivery, somehow we’re going to have to provide the tagging for the third party. Are you aware of that? A: You’re talking about the 890 proposals – we can bring back up later with John Steward. 4. Large Generator Interconnection Requests – Q: Where is the fifth solar? A: One in Maricopa; one in Mojave; and two in La Paz C: Forget it – those add up to the 975 – it’s just four. Q: Is the correlation in this sorting according to the TIP proposal for upgrading south of Parker? A: No, this has nothing to do with TIP. Q/C: It does have an affect because, if you build extra transmission for which you have no customers, it will have additional adverse affect on Parker-Davis customers. Asked Meeks what the queue looks like, and it was fairly substantial. Not only your queue, but APS’s for 1500 MW. Also fairly substantial South of Parker. Not sure if this relates to that or not. A: Well, there’s no way, at this point, to correlate the TIP to what’s in our queue. Q: Have you done studies to see if these can be correlated? A: There are a number of studies going on in order of how they are in the queue. Q: Can you let us know specifically which part of Western’s transmission system they’re proposing interconnection? A: Yes, absolutely – you can go to the queue right now on the WALC OASIS and it will tell you down to the specific bus or transmission line they’re proposing interconnection. Q: Are you following the LGIA? A: Q: A: 5. Yes, per the OATT. The financial responsibilities are not being borne by Western? Correct – they are trust projects and borne completely by the entity proposing interconnection. TYCP – Chris Lyles Q: At Parker, it’s a critical area? How did you relate those with the ones at the Dam site itself? Two sets? A: Only doing the study right now. Still looking at a broad area, and haven’t narrowed it down. Q: Are you guys – do you have the transformer back-up kind of thing? A: SRP – Working towards that. Q: Can Western be involved in that? A: SRP – I think they could. C: Hillis – Think there’s a national transformer process… C: Lyles – we are looking at everything available to us. Q: Is this a DSW study? A: Yes, expect to have it finished by the meeting in November. C: Hillis – Looking at moving this into a Western-wide study. Q: The slide on Parker – the TIP discussions for Parker will be 161-kV… A: Byron – Can’t talk to the TIP due to confidentiality. Have to look at construction as construction. The 69-kV at Parker – hope we can re-gasket and they’ll be okay for a while. Q: In the TYCP – what is the estimated timeframe for the wood pole replacement South of Parker? A: Looking at ‘10. At this point, we have no expectation of what’s going on, as it all goes back to funding. We’ve been experiencing a lot of problems over the last few years. Q: What is the cost of funding? What’s the money? How much? A: Lyles will present this at the TYCP meeting in November. FY09 money is dead and gone. Received money and spending it now. What didn’t get done this year, will go out to the following years. C: You’d better. If you want customer support in 10… A: Already done. C: Bob – If they want help for ‘11, will have to come to us with specifics no later than January. Once the process starts, we won’t be able to have any say after March. C: Radosevich – We’ve already submitted the figures for ‘10 and ‘11 – can get the numbers for what we submitted for both. As far as ‘12 on – we have gone back and re-evaluated what we’re looking at and will have the numbers for what we’re going forward with for the eight years. Will take whatever customer support we can get. C: The cycle for our input runs from release of the budget to the end of March. Stuff has to be in to sub-committees by that time. Work to be done after that, but if you can’t get them substance by then, then we’re done. C: C: C: C: C: Q: Q: A: Q: A: Q: A: Q: A: In Arizona, perhaps you could start a collaborative process. The sooner you start communicating what the amount is the better. Could pull all ParkerDavis customers together to enlist customer support. It’s a process. The longer you wait, the more difficult it will be. If you don’t get moving… The sooner the better. Bob – Perfect example – Basic Substation. Earmarked for available funds – non-reimbursable. Subtracts from construction money that you would get. It’s a hot budget issue. In the whole area, it subtracts from the limited amount of money you get for other things, rather than be tacked onto it. There’s been a lot of dialogue on this issue. If we hadn’t gotten from Western, last January, some input about where this is and why it is important, we’d have been out to lunch. We knew what was coming, and could help. Once the budget hits the street, every vulture in the US, including us, are all over the money. You have to have the information/ammunition. Hillis – You have all been trying to help us get the funding. We’re trying to put together a Western-wide approach – working on a white paper to use as something that can be brought forward. Also trying to develop a capital funding list and prioritize by region and give it to people who can help us. Trying to get ahead of the game. Some of us have been trying to help you for several years. Hillis – Want to get ahead even further. Jim – There’s something happening with MOD29 and MOD30 – reigning process – please don’t give me an answer now. The 115-kV South of Phoenix rating process will be significantly impacted. If you’ve done the studies on MOD29 and 30, I would like to know the ratings for DSW. Reason – you’re going to go and replace equipment one for one that won’t even get you through NERC. Need to go through the MOD’s so that you know what you’ve got to do in order to comply with everything. This is an older system. Question – need to know, in order to stay in business, and support your customers, if you have to go upper or lower in feed, we need to know. Are you replacing these with wood poles or using different poles – steel? As we do repairs we do like in kind. Throughout the system – will go with steel. Are you going 115-kV as opposed to going to 230-kV? Not necessarily – could increase to 230-V. Replace with a double circuit and have an entity go in as far as parts? When we do go and replace, we do talk with the entity in the area. We replace in kind for wood pole with wood pole due to environmental restrictions. When we get in and have the opportunity to, will replace with steel. 161-kV is upgraded to 230-kV whenever we can. In the latest evaluation, will look at whether single or double circuit. Where possible, will do double. South of Tucson, had seven poles – went and replaced with double circuit 230-kV – one side is empty, but has potential. When you say “South of Tucson”, is that all the way to Apache? Wherever we can, whether 161-kV or 69-kV – whether South of Phoenix or South of Parker, wherever poles located. Q: A: C: The whole 115-kV system? Yes, when we get the opportunity all the way South of Parker. Hillis – We have a wood pole replacement project. We eventually want to get to steel; will only replace emergency poles. Don’t want to invest a lot in wood, as we want to replace it all in steel. C: Steward – MOD standard – being proactive in what we’re doing. Construction is always asking what’s coming in the future. I28 has an impact, other discussions in place on what can impact. Some study work is being done, depending on what comes out of the final rule and standards coming out. Can you address the “what if” studies at the customer meeting? Probably by then it will be in a better shape to address – yes. Continuing to ask for customer comments on issues. If you’re not registered, there’s a place called anonymous? Do you encourage your customers to comment whether registered or anonymous? Steward – Yes, I encourage everyone to comment. We only make a one Western-wide filing on this. They seem to be counting heads and responses. Can you provide the e-mail address or whatever they need to do to comment? Steward - we send out our comments that we’re going to submit – you can’t look at those. Came from Penny Casey – here’s what Western will be submitting. It can always go back to Penny and can get clarification. A notation in your communication – if you would like to provide your own comments, there is the website to provide your comments? Steward – That was actually given to Penny in the beginning by myself as a suggestion. Michael - Issue on the discussion on the OATT – if a customer made an arrangement for 30 MW from a third party vendor from Mead, and the third party is getting to Mead from two or three sources, the customer would have to pony up for the transmission – there’s an ambiguity that we thought was ridiculous. Steward - In the FERC 890 … Know what FERC890 says – know that you have some leeway – Steward – Can provide what FERC would say. So, you’re saying the answer is out there and will be published? Steward – It will be published and answered. Are we going to smile? Steward – I don’t know. Steward – The provider must be compliant. If you’re not jurisdictional, they may audit. If you violate, they may fine you. FERC may audit you as the customer. Power Purchasing agreement – we may not ask for that, but FERC may ask if they audit your books. Michael – When? Steward – Not sure, but could be end of the month or very soon. Q: A: Q: A: C: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: C: Q: A: C: C: C: C: C: Michael – I would encourage Moe to get in touch with Joe Mulholland to ask for a customer strategy and method – we are allowed to lobby, you’re not. Agree Bob? Bob – It would certainly help – think it’s the kind of thing that needs to pull in all of the Parker-Davis customers. Sure they would be happy to be included – also California and Nevada customers to see what can be done. If you wait until late November to pop numbers out, you put a lot of pressure on us – if you’re going to do something, you ought to talk with us about dates and stuff in early November, and have the follow-up meeting to help facilitate. If you’re going to seriously help us facilitate, and get back to Washington, that would be what you need to do. Lyles – We appreciate that. Bob – The importance of today is for you to understand the timing. If you understand the timing thing, then we have a better chance of supporting you. Lyles – Appreciate it. 6. Construction Up-date – Don Byron Q: Everything above Parker-Plant Tap is funded and done – right? (Refer to the slide.) A: Everything above the 230-kV yard is funded and done. Q: Ken – Work at Bouse Substation – it’s Western intent as indicated at the last Parker-Davis meeting on TIP that the whole area will be reconductored to 230-kV. Are the upgrades for Bouse going to be consistent with a 230-kV yard in the future? A: Byron – Can’t allude to TIP.. Q: At the Parker-Davis public meeting – are they going to take the system to 230-kV construction, or are they going to go be…? A: Under the TYCP – when we remodel a 161-kV yard, will remodel to 230-kV – Bouse is the same thing. We’re not looking to go into a 161-kV yard, and not bring it up to standard. Just like the transmission lines. We’re taking the opportunity to put in steel. Just like 161-kV – looking to put those at 230-kV. C: Hillis – When we rebuilt Empire, we did so at 230-kV. Valley Farms is a 230-kV design. Q: The Pinnacle Peak transformer was ordered in June – when do you expect delivery? A: In two years. Q: Dennis – Who’s building the transformer? A: We’re in the middle of final negotiations. It’s an RFP – have a delivery cycle on the contract – need to make sure we pick the right vendor. Q: You haven’t determined the vendor yet? A: No. 7. Substations & Transmission Lines – Stan Spencer Q: Is the listing the sequence by which you would receive money and do the jobs? A: Yes, and environmental work will come first. Q: A: McConnico and ??? Station service – are they going away? The station service feed. 8. Protection & Communication – David Radosevich Q: Ann – Testing required under the contract – (from previously) A: Yes, there will be more than one contractor there. C: Ann – When we test a meter annually, there’s only one tester. Interested in Mead only. A: Radosevich – As far as the metering tests on annual basis – looked at revising the metering policy – some major issues have happed internally to Western. Have re-written – 90% happy; 10% not happy, so have to get it back together and finish it off. Q: Ann – Initially this was done every three years, but then the issue occurred where one failed. Don’t feel comfortable with more than one year for meter test. Would be happy if Western would be the one to set it up and do it. Put it in MAXIMO, etc. A: Radosevich – We can do that, put it in MAXIMO, etc. C: (Customer - Agreed.) We did this five years ago, but have not heard anything since then. There are multiple meters in our system that we would be interested in testing. A: Okay. 9. WALC – Larry Edwards Q: You don’t have IID or Nevada Power in here? A: Not at this point – it’s my understanding that they will be in a future time. Was getting a little too political. Trying to make this a little more structured and put it in the hands of the working folks. Q: Who’s the lead person? A: Ron Moulton. Michael thanked Josh for the donuts (which he received from Simonton). Key: Q: A: C: Question Answer Comment