INTERCONNECTION FACILITIES STUDY REPORT

INTERCONNECTION FACILITIES STUDY REPORT Interconnection Request No. TI-12-0217 8 MW Hydropower Generating Facility POI on the Dallas Creek to South Canal 115kV Line in SW Colorado FINAL REPORT February 26, 2013 Prepared by Ray LaPanse Reviewed by Irene Mulyar, Nicole Korbe and Mary Ann Zehr DISCLAIMER OF WARRANTIES AND LIMITATION OF LIABILITIES THIS DOCUMENT WAS PREPARED BY TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., IN ITS CAPACITY AS TRANSMISSION PROVIDER (TP), IN RESPONSE TO A GENERATOR INTERCONNECTION REQUEST. NEITHER TP, NOR ANY PERSON ACTING ON BEHALF OF TP: (A) MAKES ANY REPRESENTATION OR WARRANTY EXPRESS OR IMPLIED, WITH RESPECT TO THE USE OF ANY INFORMATION, METHOD, PROCESS, CONCLUSION, OR RESULT, INCLUDING FITNESS FOR A PARTICULAR PURPOSE; OR (B) ASSUMES RESPONSIBILITY FOR ANY DAMAGES OR OTHER LIABILITY, INCLUDING ANY CONSEQUENTIAL DAMAGES, RESULTING FROM USE OF THIS DOCUMENT OR ANY INFORMATION CONTAINED HEREIN. TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 1 of 12

TABLE OF CONTENTS Page No. 1. EXECUTIVE SUMMARY 3 2. INTERCONNECTION OF THE GENERATING FACILITY 4 2.1 Scope of Work 4 2.2 Cost Estimates and Assumptions 8 3 GENERATING FACILITY PERORMANCE VERIFICATION 11 4 SCHEDULE 11 5 LIST OF APPENDICES 11 (NOTE: These Appendices are Tri-State CONFIDENTIAL - To Be Supplied to IC Only & Are Not for OASIS Posting) Drawings: Appendix A: Tri-State Cow Creek 115 kv Switching Station - Switching Diagram. Appendix B: Tri-State Cow Creek 115 kv Switching Station - Relaying & Metering One- Line Diagram. Appendix C: Tri-State Cow Creek 115 kv Switching Station - General Arrangement Drawing. Appendix D: Tri-State 115 kv Double-Circuit Transmission Tie Line and Deadend Structure Drawings. Cost Estimates: Appendix E: TP Interconnection Facilities Detailed Cost Estimates Summary. Appendix F: TP Network Upgrades Detailed Cost Estimates Summary. Schedule: Appendix G: TP Project Design & Construction Schedule. TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 2 of 12

1. EXECUTIVE SUMMARY Interconnection Facilities Study for TI-12-0217 - Final Report This Interconnection Facilities Study (FacS) report sets forth the scope of work, +/- 20% cost estimate, and schedule for the Transmission Provider (TP, Tri-State ) and the Interconnection Customer (IC) to interconnect a proposed 8 MW hydropower Generating Facility (GF) per Generation Interconnection Request (GIR) No. TI-12-0217 (the Project) to the Transmission System with a Point of Interconnection (POI) on the Dallas Creek South Canal 115kV transmission line ( Dallas Creek South Canal line ), located in southwest Colorado (Ouray County). In the GIR application the IC requested the In-Service Date (ISD) of March 31, 2014. The Dallas Creek South Canal line is jointly owned by Tri-State and Tri-State s Member System (San Miguel Power Association, SMPA). The portion of this transmission line that the POI taps is presently owned by SMPA, known as the McKenzie Creek Dallas Creek line section. Contractual arrangements are being pursued between Tri-State and SMPA to transfer ownership of the portion of the Dallas Creek South Canal line that is owned by SMPA to Tri- State. Based on the System Impact Study (SIS) Final Report dated October 2, 2012, the IC will construct an 8 MW GF that consists of a 7.2 MW high flow turbine, plus 800 kw low flow turbine, with a proposed POI at a new Tri-State Interconnection 115kV Switching Station ( Cow Creek Switching Station ) to be located approximately 4.5 miles north of Dallas Creek Substation. This new Cow Creek Switching Station will be located approximately 800 feet from the Dallas Creek South Canal line, and require Tri-State to construct a new in/out double-circuit transmission tie line ( in/out tie line ) between the line and Cow Creek Switching Station. The IC will construct and own a new approximate 1200-ft. 115 kv radial transmission line between their Ridgway Dam Substation and the new Cow Creek Switching Station ( Cow Creek - Ridgway Dam line ) As discussed herein, Tri-State requires that in order to interconnect the IC s proposed 8 MW GF the Cow Creek Switching Station will be constructed. This switching station will be configured as an in/out tap breaker station that can be expandable to a four breaker ring bus configuration in the future. The additional disconnect switches and bus work will be installed to accommodate a future ring bus expansion without the need to take the Dallas Creek South Canal and/or the Cow Creek Ridgway Dam lines out of service. The in/out tap breaker bus configuration will allow isolation of the Cow Creek Switching Station from the radial Dallas Creek South Canal line by installing line motor-operated load break disconnect switches. The installation of the Cow Creek Switching Station will also include high-side bi-directional metering, SCADA and telecommunication equipment. As it is described below in Sections 2.2.2 and 2.2.3 the In/Out Tie line and the Cow Creek Switching Station equipment and facilities will be divided between TP (Tri-State) Interconnection Facilities (TPIF) and the TP (Tri-State) Network Upgrades (TPNU). The estimated costs for the TPIF and TPNU are: TPIF Costs (Non-Refundable): $1.739 Million; TPNU Costs (Refundable): $1.883 Million TOTAL Costs for Interconnection: $3.622 Million TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 3 of 12

These estimates are +/-20% accuracy level, based upon the assumptions listed in this report. The completion of this work is estimated to take approximately 12 to 18 months from the date of the execution of the associated Engineering and Procurement Agreement (E&P, executed October 17, 2012). The anticipated ISD, capable for energization back-feed is November 1, 2013. Note that the Commercial Operation Date (COD) for the hydro GF will be determined by the time taken to complete commissioning and testing activities of the generation project. Furthermore, this assumes that no Network Upgrades will be required beyond the TPNU described in Section 2.2.3. The TPNU may potentially include the changes to the line protection relaying settings, anti-islanding pilot tripping, and/or related equipment upgrades at South Canal and Dallas Creek substations. Note that per section 2.4 of the GIP, nothing in this FacS report shall constitute a request for transmission service or confer upon an IC any right to receive Transmission Service. Any inquiries regarding transmission service (firm or non-firm) and related studies should be directed to the Tri-State OATT Administrator. 2. INTERCONNECTION OF THE GENERATING FACILITY 2.1 Scope of Work The supporting documents include: Tri-State Scope of Work Facilities - Site Map (see Figure 1); Tri-State 115 kv Cow Creek Switching Station: switching diagram, electrical relaying and metering one-line diagram; general arrangement drawing; major material lists with cost estimates, and project schedule. These are located in Appendices A, B, C, and E through G, which are available to the IC only (Tri-State Confidential, and not to be posted on the OASIS for Public use). Tri-State 115 kv Double-Circuit Transmission Tie-Line: transmission structure drawings. These are located in Appendix D, which is available to the IC only (Tri- State Confidential, and not to be posted on the OASIS for Public use). TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 4 of 12

Figure 1 Site Map Interconnection Facilities Study for TI-12-0217 - Final Report (Cow Creek Switching Station) TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 5 of 12

2.1.A Ridgway Dam Substation: The IC will design, procure and construct the 115 4.16 kv Ridgway Dam Substation including the generator step-up transformer and associated switching, protective and metering equipment and facilities. According to the route planned and provided by the IC for the IC s radial transmission line between Cow Creek Switching Station and the IC s Ridgway Dam Substation, this line will be entering into the Cow Creek Switching Station property from the south. The IC will be responsible for the Cow Creek Ridgway Dam line s design, procurement and construction, with the final slack span aligned in such a fashion as to terminate into the line dead-end termination structure located near the southern end of the Cow Creek Switching Station. The IC is required to provide the same primary and back-up differential relaying 115 kv line protection at the Ridgway Dam Substation as is being supplied by Tri- State at the Cow Creek Switching Station in order to coordinate with the relaying being installed at the Cow Creek Switching Station. The IC is also responsible to provide the protection equipment (relaying and 115 kv circuit breaker) to protect its main transformer, bus, generators, etc., as well as the IC s Ridgway Dam Cow Creek 115 kv transmission line. To facilitate protective relaying and data acquisition between the Cow Creek Switching Station and the Ridgway Dam Substation, it is required that the IC install fiber optic cables (OPGW static) on the Cow Creek Ridgway Dam line to provide communication circuits for data (SCADA and possibly individual generation metering) and for the line differential relaying functions. The metering functions will provide real-time generation data required by Tri-State and the Balancing Authority (WAPA), as well as energy data for revenue billing purposes. Specific requirements will be established as the design proceeds with the E&P and forthcoming GIA. 2.1.B Cow Creek Switching Station: Tri-State will design, procure, construct, own, operate and maintain Cow Creek Switching Station. The Cow Creek Switching Station installation will include, among other facilities: the 115 kv buswork, support structures and foundations, gang switches, circuit breaker, bi-directional revenue metering CT/VTs at the POI; control building, SCADA, line protection relaying packages for the Cow Creek Ridgway Dam, South Canal, and Dallas Creek lines, etc. The primary relaying protection for the South Canal line termination will include primary pilot permissive overreaching transfer tripping scheme, and the back-up non-pilot scheme will use step-distance relaying. The Ridgway Dam line termination s primary and back-up protection will be line differential relaying. This line s protection relaying at Cow Creek Switching Station will only provide backup protection for the Ridgway Dam Substation s equipment (e.g. main transformer) in the event of equipment failure or malfunction in the IC s facility. The primary TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 6 of 12

protection for the South Canal and the Ridgway Dam line terminations will have communication assisted tripping over the fiber optic cables. A fiber optic (OPGW) cable is installed in the static wire on the Dallas Creek South Canal line, and will be installed / extended as part of the TP s new 115 kv in/out tie line to the Cow Creek Switching Station. The Cow Creek Switching Station protection scheme will also include breaker failure relaying. The South Canal and Ridgway Dam primary relaying will send the direct transfer trip signal to trip the South Canal, Dallas Creek and Ridgway Dam Substation circuit breakers under the breaker failure condition at the Cow Creek Switching Station. There will also be relaying equipment in the Cow Creek Switching Station providing primary and back-up pilot differential protection for the IC s radial 115 kv transmission line between Cow Creek Switching Station and Ridgway Dam Substation. See related comments in Sec. 2.1.A. Lastly as anti-islanding protection, a transfer tripping scheme will be installed at both Cow Creek Switching station and at South Canal Substation to send a trip signal (via the OPGW circuits) to the 115 kv breaker at Ridgway Dam Substation, and/or to the local 115 kv line breaker at Cow Creek Switching Station any time the Cow Creek Switching Station South Canal Substation 115 kv line is opened, at either the South Canal or Cow Creek end. 2.1.C. TP 115 kv In/Out Tie Line: Tri-State will design, procure, construct, own, operate and maintain an approximate 800-ft., 115 kv double-circuit in/out tie transmission line. This line will include the new transmission structure being installed at the 115 kv Dallas Creek South Canal transmission line interconnection/sectionalizing location, as well as the selfsupporting dead-end monopole structure to be installed near the Cow Creek Switching Station to transition the in/out tie line into the Switching Station s in/out tie line dead-end structure. This monopole structure will be placed outside the northern property line of the Cow Creek Switching Station as the transmission line will continue a northeast route to connect to the Dallas Creek South Canal line. The in/out tie line entering the Cow Creek Switching Station will be constructed with a self-supporting structure. For reference, see Figure 1 and Appendices C and D. Two outages of the Dallas Creek South Canal 115 kv transmission line will be necessary to complete the interconnection of the in/out tie line into the Dallas Creek South Canal line. The feasibility of taking outages on this transmission line dramatically decreases from October to March. Therefore, in order to meet the anticipated ISD of November 1, 2013, the bulk of construction is estimated to be completed by the fall of 2013. This is potentially feasible, but will be a challenge, allowing for little flexibility in the schedule included in Appendix G. Tri-State will make all possible efforts to meet the anticipated ISD of November 1, 2013, however it is not guaranteed. Should there be any unforeseen issues that arise in the present TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 7 of 12

plan to energize by November 1, 2013 Tri-State will make good faith efforts to meet the ISD of March 31, 2014 requested by the IC in the GIR application. 2.2 Cost Estimates and Assumptions: The layout of the proposed line termination is shown on the attached One-Line Diagram (Appendix B) and General Arrangement (Appendix C). Note that the land required for the Cow Creek Switching Station is located on United States Bureau of Reclamation (USBR) owned land. Tri-State is working with the USBR to obtain the required License Agreement, which is necessary for Tri-State to have unrestricted access rights for construction and maintenance of the Cow Creek Switching Station and the in/out tie line. The costs associated with the license fees have not been determined yet by USBR, but a high level estimate (subject to change) is included in the cost estimate in Appendix E. 2.2.1 Work to be completed and paid for by the Interconnection Customer: The IC s Interconnection Facilities include all equipment that is designed, constructed, and owned by the IC between the Cow Creek 115 kv Switching Station and the IC s Ridgeway Hydro Project GF. Tri-State is not responsible for any portion of these facilities, although these IC facilities must include certain primary elements as identified below that directly impact the interconnection with Tri-State s transmission system. Tri-State has the option to review the IC s drawings, etc., and witness commissioning testing associated with these facilities before this hydro project connects to the system. The IC s responsibilities include: Design, procure, construct, own, operate and maintain equipment associated with the generating plant and all IFs up to the Point of Change of Ownership (PCO) located at the Cow Creek Switching Station s Ridgway Dam line termination dead-end structure, as indicated on the attached one-line switching diagram (Appendix A). Install the Cow Creek Ridgway Dam 115 kv transmission line including the OPGW static wire (with a minimum of 8 fibers reserved for Tri-State use, but the final number of fibers to be reserved are to be confirmed in the GIA). Install at Ridgway Dam Substation: one (1) 115 kv circuit breaker; one (1) isolation gang-operated disconnect switch; the primary and back-up protective relaying for the main 115-4.16 kv generator step-up transformer protection; and breaker failure relaying. Tri-State reserves the right to review the specifications, relay settings, and testing of the transformer protection, breaker failure relaying, generation synchronizing, and voltage regulation equipment. The specific requirements will be identified in the GIA and other specific testing/commissioning documents. Install at Ridgway Dam Substation: three (3) 115 kv voltage transformers (VT) or three (3) coupling capacitor voltage transformers (CCVT); the Cow TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 8 of 12

Creek Switching Station line primary and back-up line differential protection, and associated communications circuits of the Cow Creek Ridgway Dam line OPGW. The line primary and back-up protection as well as breaker failure relaying shall be designed to match the relay protection that will be installed by Tri-State at the Cow Creek Switching Station side of the line. The IC shall work with Tri-State to assure that the relaying protection settings are coordinated and fully tested prior to Project s energizing. Provide voice communications for direct access to the GF (or if site is unmanned, the applicable control center). Pay for land costs, access roads and any costs associated with obtaining state or local permits for the generation Project. Provide access to analog (SCADA MW, MVAR, V), indicating (SCADA 115 kv breaker open or closed status), and control (relaying and SCADA to be defined in GIA) circuits, as required to integrate into the design and operation of the TP s control system. Relocation of existing sewer and/or water lines in order to accommodate the Cow Creek Switching Station. 2.2.2 TPIF to be completed and owned by the TP and paid for by the IC (with cost being non-refundable per the GIP / GIA) The TPIF are comprised of the equipment that is dedicated for the Project, and is primarily located between the POI and the PCO as it is shown on the switching diagram (Appendix A). The estimate includes all site work such as grounding, grading, surfacing, fencing and conduit installation inside the TP s switchyard. The estimated costs for landscaping or any site work outside the TP s yard have yet to be determined, and will be added and included in the final cost estimates (GIA) once they have been defined. The estimate does not include any fees associated with the required USBR license agreement, and assumes that all necessary local and environmental permits will be obtained by the IC. Cow Creek Switching Station: Install one (1) 115 kv A-frame dead-end structure (for IC Ridgway Dam line termination). Install three (3) 115kV surge arresters on the 115 kv Ridgway Dam line termination A-frame dead-end structure. Install one (1) 115 kv circuit breaker No. 162. Install two (2) 115 kv isolation gang-operated disconnect switches Nos. 163 and 165. Install one (1) 115kV Ridgway Dam line gang-operated disconnect switch No. 161 Install one (1) 115 kv gang-operated disconnect switch No. 465 (for a future ring bus expansion). Install one (1) 115 kv, 1000/600:1 South Canal line termination CCVT. Install one (1) 115 kv 240/120V, 50 kva station service transformer. TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 9 of 12

Install three (3) single-phase 115kV voltage/current transformer (VT/CT) metering combination units for bi-directional POI metering. Install control building, including battery bank, battery charger, station AC and DC systems, SCADA and telecommunication equipment, etc. Install the bi-directional metering, breaker failure protection, and the line protection for the South Canal and the Ridgway Dam lines, including testing/checkout/commissioning. Install transfer tripping scheme for anti-islanding protection that will trip the hydro generation (Ridgway Dam and/or Cow Creek 115 kv breaker) any time the Cow Creek South Canal 115 kv line opens. Install all other necessary substation equipment and facilities including but not limited to grading, grounding, conduits, cabling, foundations, support steel, static protection, cable bus, surfacing, fencing, outdoor lighting and gates. The estimated cost for the TPIF is $1.739 million; a copy of the estimate is attached as Appendix E. 2.2.3 TPNUs to be completed and owned by the TP and initially paid for by IC (with cost being refundable per the GIP / GIA) The Network Upgrades are located on the TP s side of the POI. This includes the following equipment located inside of the Cow Creek Switching Station that is not already included in the TPIFs, plus the new approximate 800-ft. 115kV double-circuit in/out tie line and relaying and communications upgrades required at South Canal Substation. The major equipment included in these TPNU are as follows: In/Out (115 kv Transmission) Tie Line: Construct approx. 800-ft. 115 kv double-circuit transmission tie-line including: conductor (795kcmil ACSR Drake, 100 deg C rated, 1167A); OPGW fiber-optic communication static wire; one (1) 115kV double-circuit monopole steel transmission dead-end structure, two (2) 115 kv doublecircuit tangent steel structures. Construct the new transmission structure at the interconnection / sectionalizing tap point of the Dallas Creek South Canal line, including new jumpers, OPGW splices, etc. Cow Creek Switching Station: Install two (2) 115kV motor-operated, load-break disconnect switches No. 261 and 361 (for South Canal and Dallas Creek line terminations).install three (3) 115kV gang-operated disconnect switches Nos. 263, 265, and 363 for a future ring bus expansion..install six (6) 115kV surge arresters (for South Canal and Dallas Creek line terminations). TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 10 of 12

South Canal Substation: Install transfer tripping scheme for anti-islanding protection (trip hydro generation any time the Cow Creek South Canal 115 kv line opens). The estimated cost of the TPNU construction is $1.883 million; a copy of the estimate is attached as Appendix F. Total Estimated Costs of TPIF Plus TPNU = $3.622 million 3. GENERATING FACILITY PERFORMANCE VERIFICATION Verification of the reactive support/voltage regulation capabilities as measured at the POI bus and identified in the SIS and GIA will be required when the facility is ready for commercial operation. Additional verification of protection and synchronizing equipment may be required as will be identified in the GIA and other testing documentation to be established for commissioning activities required for the ISD and COD. 4. SCHEDULE A construction schedule is attached (Appendix G) for the engineering and construction of the Cow Creek Switching Station interconnection facilities. The schedule is underway, as work began with the receipt of authorization to proceed and funding associated with the execution of an E&P agreement. This FacS is to be followed by a timely execution of the GIA and receipt of remaining project funds. The estimated duration from the receipt of authorization to proceed (execution of the E&P agreement, 10/17/2012) to the back-feed ISD is approximately 12 to 18 months, and may be subject to modification based upon resource availability, receipt of necessary licenses, material delivery, outage availability, etc. The final COD will depend upon the commissioning time required by the IC for its GF; it has been assumed for the purposes of this FacS report and schedule that this will take approximately 1 month, and that there will be some time required for the TP to witness portions of the commissioning activities as it pertains to the POI interconnection at Cow Creek Switching Station. 5. LIST OF APPENDICES (NOTE: These Appendices are Tri-State CONFIDENTIAL - To Be Supplied to IC Only & Are Not for OASIS Posting) Drawings: Appendix A: Tri-State Cow Creek 115 kv Switching Station - Switching Diagram. Appendix B: Tri-State Cow Creek 115 kv Switching Station - Relaying & Metering One- Line Diagram. Appendix C: Tri-State Cow Creek 115 kv Switching Station - General Arrangement Drawing. TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 11 of 12

Appendix D: Tri-State 115 kv Double-Circuit Transmission Tie Line and Deadend Structure Drawings. Cost Estimates: Appendix E: TP Interconnection Facilities Detailed Cost Estimates Summary. Appendix F: TP Network Upgrades Detailed Cost Estimates Summary. Schedule: Appendix G: TP Project Design & Construction Schedule. TI-12-0217_FacS_Final Report NK-RAL 2-26-13.docx Page 12 of 12