Balanced Portfolio for Reliable Electricity System

YES Inc.

Email: yes@yesenergies.com

Brief Assessment

Generic Electricity Supply Hierarchy

Base Load*

Source • Conservation• Nuclear• Hydro

Criteria• Cycling: Not recommended• Cost: Low• No or low environmental impact

Intermediate Load*

Criteria • Cycling: Possible, low frequency• Cost: Mid range• No or low environmental impact

Criteria • Cycling: More frequent• Cost: High

Source • Coal• Gas• The odd river when available

Source •Demand response• Gas• Oil• Coal• Imports

Peak Load Evaluation Criteria• Reliable electricity supply on demand• Competitive cost of power• Environmental Impact

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* Renewable when available

YES Inc.

Healthy Electricity Supply

Overriding consideration: Make sector as efficient as it can be through theimplementation of policies that allow supply diversity to develop!

Five key criteria can affect the health of the local electrical powersupply. Each item needs to be properly considered in planning andimplementing a healthy power supply system for any State/Province.

1. Reliability.Reliable electricity supply on demand.

2. Security of fuel supply. Security of fuel supply is a high priority for the sector. Imports of fuelfrom unstable countries or regions can produce instability of supplyand/or price volatility.

* Diverse supply can help moderate severe price swings.

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YES Inc.

Healthy Electricity Supply

3. Diversity of electricity supply.

a) A balanced mix of power plant types eg. water power, nuclear, coal, renewable, natural gas, oil, etc.b) Smaller economic units in general are better than one large central plant ie. keep a balancec) Conservationd) Demand Management/Load Shifting e) Imports

There is a potential risk (common mode failure) if a State relies on one:

- technology- size- location- supplier

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YES Inc.

Healthy Electricity Supply

4. Price. Competitively priced electricity is essential for the economic survival of allbusinesses in any State. Policy decisions must recognize the impact of power prices on the competitiveness of State businesses.

Factors affecting power price:Where the State has no control - Replacement of aging plants

- Fuel price/Refurbishment escalationWhere the State has control - Policy decisions that result in price

increases - Elimination of abundant local fuel

sourcesuch as Nuclear or clean coal

5. Sustainability. Utilizing diminishing fossil fuel resources (eg. natural gas, oil & coal) in ways thatmaximize society’s benefit from them and minimize environmental impact should bea key factor in deciding the mix of power generation for a State.

Importance of a structure that allows investors and users to manage risk rather thansaddling taxpayers/ratepayers with the risk. This approach requires multiple buyersand sellers, and supportive rules and regulations.

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