North American Power Group

Western Mine-Mouth Coal-Fired Power

Two Elk

North American Power Group

Western Mine-Mouth Coal-Fired Power

Two Elk

North American Power Group, Ltd.

NAPG

North American Power Group, Ltd.

NAPG 15 Year-Old Privately held Denver, CO based IPP Full member of WECC Owns and operates 7 power plants in California

4 Biomass (84 MW total)

2 Coal/Pet Coke (69 MW total)

1 Gas (48 MW total) Conceived and developed the Two Elk project in the Power River

Basin of Wyoming

Two Elk ProjectTwo Elk Project Central station plant anchoring transmission 2000-3000 MW Unit #1 at 325 MW under construction Ample water supply Ample coal supply by mine truck or overland conveyor

belt No additional infrastructure needed for subsequent units Potential for Clean Coal for reduced or “zero”emissions

Two Elk ProjectTwo Elk Project The plant is mine mouth, being a single mine truck haul from 20% of the nation’s coal

supply. The three mines abutting the project shipped approximately 196 million tons of coal in

2004 and can supply 250 million tons per year. Unit #1 has been designed and is being constructed by Bechtel to allow it to burn non-

commercial waste coal but run equally well on commercial coal. Unit #1 officially commenced construction in late May 2005. Wyoming ruled all permits

valid and in full force and effect in July 2005. The Two Elk project has permits and water rights for an 11 well field, providing more

than 3500 GPM. Two Elk Unit #1 has been designed with dry cooling to minimize water requirements.

An advantageous capital structure for Unit #1 based upon Tax Free Bonds provides most of Unit #1’s capital. Three hundred, twenty six million dollars ($326,000,000) in tax-exempt bonds have been sold to date.

Transmission AccessTransmission Access

Why Two Elk ?Why Two Elk ? Fuel Supply

3 mines adjacent to Two Elk – 2004 production 196 MM Tons– Mines Permitted for 250 MM Tons/year

The adjacent mines have coal reserves of more than 21.7 billion tonsNo risk of supply or additional permits required 4th mine scheduled to open by 2010

Why Two Elk ?Why Two Elk ?Fuel Transportation

Mine-Mouth location immediately adjacent to minesNo over the road trucking or railroad Delivery by 400 Ton Mine Truck or overland conveyor beltMine Plan and transportation rates agreed upon for 30 yearsAudit and adjustment rights to reflect actual costs to deliver

Why Two Elk ?Why Two Elk ?Air Permits

Construction underway on Unit #1Air Modeling completed for additional unitsAir Permit application can be filed in Q1 2006Developer experienced with WY DEQ

Why Two Elk ?Why Two Elk ?Water

11 well field permitted by State EngineerEach well permitted at 325 GPMUnit # 1 with dry cooling design consumes 275 GPMAdequate water to support additional generation

Why Two Elk ?Why Two Elk ? State Support

NAPG awarded $326 million in tax exempt bonds for Unit #1 (AA-/A-1+)Local and regional groups formed to support transmission

– Wyoming Infrastructure Authority– Governor Freudenthal– Wyoming Counties For Responsible Energy Development

(WyCFRED)

Wyoming Carbon Sequestration Committee formed to explore for CO2 capture and sequestrationWyoming Pipeline Authority exploring Enhanced Oil Recovery using CO2 flood

NAPG Coal DevelopmentNAPG Coal DevelopmentCharacteristic

Two Elk

Unit I

Two Elk

Unit II

Two Elk

Unit III

Two Elk

Unit IV

Two Elk

Unit V

Water275 gpm3575 gpm available

3000 gpm available To be permitted To be permitted To be permitted

Fuel SupplyPRB Waste– Mine truck/Conveyor belt

PRB Waste– Mine truck/Conveyor belt

PRB Waste– Mine truck/Conveyor belt

PRB Waste– Mine truck/Conveyor belt

PRB Waste– Mine truck/Conveyor belt

Electric

Transmission

PacifiCorpPacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kvDC Line Addition

PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kvDC Line Addition

PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kvDC Line Addition

PacifiCorp, WAPA, Xcel, APS, TransElect, National Grid 500 kvDC Line Addition

Land Owned Owned Owned Owned Owned

Rail Transport N/A N/A N/A N/A N/A

Competitive

Advantage

No fuel cost-transport only. Tax Exempt Debt Coal in gas market.

Identical need in Utility Resources (4 Utilities)Supply curve locationCoal in gas market.

Identical need in Utility Resources (4 Utilities)Supply curve locationCoal in gas mkt.

Identical need in Utility Resources (4 Utilities)Supply curve locationCoal in gas mkt.

Identical need in Utility Resources (4 Utilities)Supply curve locationCoal in gas mkt.

In-Service Date

2009 2010/2011 2010/2011 2010/2011 2010/2011

Why Two Elk ?Why Two Elk ? Transmission

Substantial studies completed for Two Elk to the desert SouthwestRight of Way from Two Elk to PacifiCorp securedInformation and previous work can accelerate process

– Environmental & site evaluation including GIS– Federal Agency contacts for lead and scoping– Corridor and route study information available

Why Two Elk ?Why Two Elk ? 760 acre site with expansion option allows for

additional units without added infrastructure expense. (600 MW IGCC => 80 Acre footprint)

Ash Ash storage and disposal site permitted and in place This is the only such permit in Wyoming

Two Elk can anchor transmission that will provide access to Wyoming’s Superb wind resources

Two Elk is 60 miles from prime CO2 flood enhance oil recovery fields and export pipelines

Why Now?Why Now? Unit 1 Currently Under Construction, COD 2009 NAPG is poised to permit subsequent coal units

(COD dates 2010-2012) Favorable State and Local support Unit #1 to anchor transmission build out as well

as subsequent expansion New Transmission with Two Elk as an Anchor

will enable Wyoming Wind Development

ConclusionConclusion The Two Elk Project will provide long-term, stable, lowest bus bar cost of

electric power. Unit #1 is under construction and has the support of local and regional

stakeholders. Two Elk will act as an anchor for your transmission additions. Future resource additions at Two Elk involve only an air permit. Project enhancements are possible via carbon capture and sequestration and

regional Enhanced Oil Recovery. With low fuel cost, no transportation, carbon capture and EOR, Two Elk has

the potential be the Palo Verde of Wyoming. NAPG already has completed significant work, reducing risk and

time to market.

PlanPlan The West has the Load The will exists to expand the transmission Funding is available All that is missing is the generation complex We have a head start with a project under

construction and room to grow We need partners that want to expand the site,

jointly own power projects or provide PPAs

OptionsOptions PPA from Load Serving Entity to NAPG

Permitting for Unit 2-5EIS for larger Transmission Build Out

Joint Development of Subsequent UnitsPalo Verde Model

“Big Box” ModelWe have site, water, infrastructureBuild your Unit on our PropertyReduces risk, time to market, and cost