1151 Valley Mall Parkway, East Wenatchee, WA 98802

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March 2001 Generation Partnership

March 27, 2001

Generation Partnership

Customers of Douglas County Public Utility District (Douglas PUD) are fortunate to enjoy a stable, low-cost power supply. Unfortunately, many other communities are experiencing tremendous hardships as they cope with the short supply of electricity in the western United States. Recently, Northwest Regional Power, a family owned Central Washington power company, approached Douglas PUD with a proposal to utilize excess capacity at its Hanna Substation. Northwest Regional Power would utilize the Hanna Substation as a “hookup” point to send newly generated power into the northwest electric grid. Northwest Regional Power is proposing a multi-phased project that could lead to the development of long-term electricity generation using “alternative and green technology” power projects.

The federal deregulation of power generation and power pricing has created an environment where it is now feasible for private companies to cost effectively develop traditional and alternative power generation projects. Northwest Regional Power is implementing a lifelong dream of its founder, Ty Ross. “I have always felt that by combining technology and nature we could find solutions to our energy needs and still respect our environment.” The proposed multi-phase project starts with the use of state-of-the-art portable generators that will be used during the first year to produce up to 32 megawatts of electricity on a site located in the Columbia Industrial Park on the outskirts of Rock Island. The portable generators will be equipped with the latest emission control technology. The second phase will replace the portable generators with a highly efficient gas-fired turbine that will be used to provide generation when future renewable energy projects are unable to produce power because of weather conditions or time-of-day constraints. The third phase will be the implementation of either one or several alternative/green technologies such as wind power, solar power or fuel cell based power. When used in unison with a gas-fired turbine, alternative renewable generators provide the stable electric supply that is required by everyday customers.

Douglas PUD is excited about the opportunity to work with a regional power producer who is planning to meet society’s future energy needs with innovative alternative power technologies. Northwest Regional Power will own and operate its generators and will be a customer of Douglas PUD. “This approach is compatible with our existing facilities in both the short and long term,” commented Bill Dobbins, Douglas PUD Manager.

During the initial phases of the short-term project, Northwest Regional Power will pay a fee for the use of the substation that will vary with the price of power sold on the electricity grid. The new revenue will provide added financial assurance for rate stabilization as well as allow the Douglas PUD to lay the infrastructure groundwork for future projects. Beyond the power relationship, Northwest Regional Power will bring 8 to 10 new jobs to Douglas County with Phase 1. This is a great opportunity to for Douglas PUD to work for Douglas County in an “economic development” role. We believe this is a win/win for everyone with greater energy stability, new revenue and new jobs.

For further information, please call:

Jon Vognild at Douglas PUD

Dave Luneke at Northwest Regional Power