Pacifi Corp and CAISO Expanding Regional Energy Partnerships

Pacifi. Corp and CAISO Expanding Regional Energy Partnerships Pat Reiten President and CEO, Pacifi. Corp Transmission May 19, 2015

Berkshire Hathaway Energy • $70 billion of assets • $12. 6 billion of revenue • 8. 4 million electric and natural gas customers worldwide • 16, 400 miles of natural gas pipeline • 19, 700 employees worldwide • More than 35, 000 MW of owned and contracted generation capacity • 28% of owned and contracted generation capacity is renewable or non-carbon

Pacifi. Corp/CAISO Announcement • April 2015 – Pacifi. Corp and the California Independent System Operator (ISO) announce agreement to explore Pacifi. Corp joining ISO as a Participating Transmission Owner • Study of feasibility and benefits of Pacifi. Corp joining ISO underway and will be complete this summer

Pacifi. Corp and CAISO – At a Glance • Pacifi. Corp Serves: 1. 8 million customers in six Western states (OR, WA, CA, UT, ID and WY) Employees: 6, 000 Generation Capacity: 10, 595 MW Transmission: Over 16, 300 miles of transmission lines Over 62, 930 of distribution lines • California ISO Serves: 30+ million customers in California and a small portion of Nevada Employees: 580 Generation Capacity: 65, 000 MW Transmission: Controls more than 26, 000 miles of high-voltage transmission lines

Pacifi. Corp/ISO Partnership Background • November 2014 – Pacifi. Corp and the ISO launch the Energy Imbalance Market to allow Pacifi. Corp participation in ISO’s 5 minute and 15 -minute markets – EIM generated more than $11 million in gross benefits during first five months of operation, consistent with pre-launch projections – NV Energy and Puget Sound Energy plan to start EIM participation in the fall of 2015 and 2016 – Greater participation will increase EIM benefits • April 2015 – Agreement to explore joining the ISO would extend Pacifi. Corp participation to day-ahead market and fully coordinated planning and operation of region’s two largest high-voltage transmission grids

Need for Increased Coordination in West • Currently 38 separate BAAs in Western U. S. each responsible for balancing energy supply and demand at all times – Rely on own power plants or bilateral transactions – Outside of ISO, most transactions restricted to on-the-hour and initiated with manual processes • Results of “balkanized” grid – Imprecision and higher costs for balancing reserves – Frequent curtailment of renewable energy when supply > demand in an area at a given time – Transmission bottlenecks and issues connected to limited coordination across grids

Western Balancing Authority Areas

EIM Footprint

Benefits of Potential ISO Expansion • EIM provides automated dispatch of least-cost resource across entire EIM footprint to meet short-term balancing needs • ISO expansion could further – Reduce costs – more resources in day-ahead market; sharing of reserves; better use of transmission system – Lower cost emission reductions – fully coordinated planning of renewables in day-ahead market; excess solar in California can displace Pacifi. Corp coal and gas; excess wind and hydro in Pacifi. Corp system can serve load in California. – Enhance reliability – broader visibility and management of congestion across grids

Benefits of Potential Expansion, cont. • Meeting clean energy requirements – Expanded access to renewables from across the West in day-ahead market will make California RPS compliance less costly – Replacing fossil fuel generation with renewables during oversupply situations will reduce emissions and make federal pollution control compliance less costly • EIM not impacted – Pacifi. Corp joining EIM does not impact benefits of EIM, or future EIM participants

Next Steps Toward Full Market Integration • Benefits study underway • If decision is made to proceed – full stakeholder and regulatory review and input process • FERC and state regulatory filings • Engagement over governance of a regional organization

Questions?