BChgdro mFOR GENERATIONS

Joanna SofieldChief Regulatory OfficerPhone: (604) 623-4046Fax: (604) 623-4407bchydroregulatorygroup@bchydro.com

September 25, 2009

Ms. Erica M. HamiltonCommission SecretaryBritish Columbia Utilities CommissionSixth Floor - 900 Howe StreetVancouver, BC V6Z 2N3

Dear Ms. Hamilton:

RE: Project No. 3698565British Columbia Hydro and Power Authority (BC Hydro)Acquisition from Teck Metals Ltd. Of an Undivided One-third Interest in itsWaneta Dam and Associated Assets

Attached as Exhibit B12 is BC Hydro's presentation from the Waneta TransactionWorkshop held on September 24, 2009.

For further information, please contact the undersigned.

Yours sincerely,

Joanna SofieldChief Regulatory Officer

c. BCUC Project No. 3698565 Registered Intervenor Distribution List.

British Columbia Hydro and Power Authority, 333 Dunsmuir Street, Vancouver BC V6B 5R3www.bchydro.com

B-12

The Waneta Transaction Workshop

September 24, 2009BCUC Hearing Room12th Floor, 1125 Howe St.

Agenda Overview

Joanna SofieldChief Regulatory Officer

Objectives of Workshop

Provide an opportunity to:

¤ Summarize and explain the agreements relating to the proposed transaction

¤ Clarify certain components of the Filing

¤ Explain differences between the Term Sheet and the Definitive Agreements

¤ Summarize the due diligence process

¤ Summarize the First Nations consultation process to date

Agenda Overview 3

Agenda

Agenda Overview 4

Time Agenda Item Presenter

9:00 - 9:05 Agenda Overview Joanna Sofield

9:05 - 9:15 Context of the Waneta Transaction Renata Kurschner

9:15 - 10:15 Commercial Arrangement Renata Kurschner

10:15 - 10:30 Break

10:30 - 10:50 Due Diligence Process Renata Kurschner

10:50 - 11:10 First Nations Process to Date Lyle Viereck

11:10 - 11:30 Comparative Economic Analysis Sanjaya De Zoysa

11:30 - 12:00 Waneta as a BC Hydro Resource Chris O’Riley

Context of the Waneta Transaction

Renata KurschnerDirector, Generation Resource Management

Overview of the Waneta Transaction

• Purchase of a 1/3 undivided interest in the Waneta Assets

¤ $825 million + $25 million (transaction costs) = $850 million

¤ 162 – 256 MW dependable capacity

¤ 865 – 1,008 GWh/ year of firm energy

¤ Reduced obligation to provide entitlement to Teck

¤ Cost-effective: approximately $64/MWh

¤ Source of Clean or Renewable generation located in B.C.

Context of the Waneta Transaction 6

Overview of the Waneta Transaction

• BC Hydro’s Waneta Electricity surplus to Teck’s Industrial Load

¤ Approx. 2/3 of Teck’s current entitlement is used to supply Teck’s Industrial Load

¤ Remaining 1/3 surplus is sold into wholesale power markets primarily in the U.S.

¤ Under the Waneta Transaction, BC Hydro will buy this surplus for domestic use

Context of the Waneta Transaction 7

Location of the Waneta Dam

Context of the Waneta Transaction 8

The Waneta Dam and Powerhouse

Context of the Waneta Transaction 9

The Waneta Dam and Powerhouse

• Waneta Dam is located southeast of Trail, B.C. on the Pend d’Oreille River, just upstream of confluence with Columbia River

• Built in 1954, conventional design

¤ Concrete gravity dam, overflow spillway with 9 gated bays

¤ Hourly pondage

• Power plant

¤ 4 Francis units; 3 fully and 1 partially upgraded between 1995 - 2007

¤ Maximum capacity - 493 MW

¤ Average generating capability - 3,021 GWh/year

Context of the Waneta Transaction 10

Pre-existing Contractual Arrangements

• Teck is a party to Canal Plant Agreement (CPA)

• CPA is a “one operator” coordination agreement

¤ Includes plants on Kootenay and Pend d’Oreille Rivers

¤ Optimizes value of overall generation

¤ Owners of generation receive fixed amount of capacity and energy called “entitlements”

¤ Operations will not change as a result of this transaction

Context of the Waneta Transaction 11

Commercial Arrangement

Renata KurschnerDirector, Generation Resource Management

Structure of the Waneta Transaction

1. Asset Purchase Agreement (APA)

2. Co-ownership and Operating Agreement

3. Surplus Power Rights Agreement (SPRA)

4. Waneta Partial Sale CPA Amending Agreement

5. Reciprocal Security Agreement

Commercial Arrangement 13

Asset Purchase Agreement

• Asset Purchase Agreement

¤ Purchase by BC Hydro and sale by Teck Metals Ltd of 1/3 undivided interest in Waneta Assets for $825 million

¤ Relatively standard APA with provisions for reps and warranties, pre-closing covenants, closing conditions, guarantees, indemnities and assumed liabilities

¤ Waneta Assets include Waneta Plant (dam, powerhouse and transmission infrastructure to 63kV bus in Waneta Substation), real and personal properties, assumed contracts, and Governmental Authorizations

Commercial Arrangement 14

Asset Purchase Agreement

• Conditions of closing

¤ BCUC acceptance of the expenditure schedule

¤ Completion of the required amendments to the CPA

¤ Maintenance of the honour of the Crown

¤ Numerous other customary conditions

• Expected closing date – shortly after the anticipated Decision date prior to January 31, 2010

Commercial Arrangement 15

Co-ownership and Operating Agreement

• The Co-ownership and Operating Agreement establishes:

¤ Allocation of generation between the Co-owners throughout the life of the Waneta Assets, including provisions for firmness and delivery

¤ General working relationship of the Co-owners, including a description of the responsibilities and decision making of the Operating Committee

¤ The Operating Standard of Good Utility Practice, experienced dam operator and prudent owner

¤ Events of default, liquidating damages, termination, insurance, dispute resolution and other provisions

Commercial Arrangement 16

Co-ownership and Operating Agreement

• Operating Committee

¤ Purpose is to oversee Operator and make fundamental decisions regarding operations

¤ Equal representation from Teck and BC Hydro, voting proportional to ownership

¤ Decisions requiring simple majority of Operating Committee:

¤ Insurance coverage

¤ Operating and sustaining capital budgets per existing practices

¤ Non-sustaining capital expenditures under $10 million

Commercial Arrangement 17

Co-ownership and Operating Agreement

¤ Decisions requiring unanimity of Operating Committee:

¤ Annual approval of Operating and Management Plan (dam safety, emergency response, environmental management, public safety and worker safety plans)

¤ Changes in practices for sustaining capital or operating and maintenance budgets (changes larger than +/- 10% over 5- year average)

¤ Single sustaining capital expenditure over $10 million

¤ Approval of operating procedures

¤ Disagreements to be settled by a “Third Party Referee” expert

Commercial Arrangement 18

Co-ownership and Operating Agreement

• The Operator is responsible for:

¤ Conducting operations in compliance with legal obligations, Operating Standard, approved Operating and Management Plan and budgets

¤ Preparing operating and management plans and budgets for approval by Operating Committee

¤ Implementing decisions of the Operating Committee

¤ Reporting monthly and yearly to Operating Committee and Co- owners

¤ Appointing and overseeing a Manager to carry out certain day to day duties of managing the Waneta Plant

Commercial Arrangement 19

Co-ownership and Operating Agreement

• BC Hydro currently receives the net electricity available from Waneta after Teck’s CPA entitlement

• Through the Canal Plant Agreement:

¤ BC Hydro coordinates all the electricity generated at Waneta

¤ Teck receives an entitlement of 2,821 GWh/year

¤ The difference is received or provided by BC Hydro

• Thus, BC Hydro currently accepts the stream flow risk from Waneta

Commercial Arrangement 20

Co-ownership and Operating Agreement

Waneta Generation and Entitlements

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

4500.0

1939

1941

1943

1945

1947

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

CPA Operating Year Ending July

Ann

ual G

ener

atio

n G

W.h

Coordination Transfer to BC Hydro Coordination Transfer from BC HydroEntitlement from Waneta Generation

2821.0

Commercial Arrangement 21

Co-ownership and Operating Agreement

BC Hydro’s Waneta Electricity

• The Waneta Transaction will reduce Teck’s entitlement by 1/3

• BC Hydro’s Waneta Electricity is the increase in the net electricity available to BC Hydro

¤ This energy is firm, capacity is dependable

Commercial Arrangement 22

Co-ownership and Operating Agreement

• BC Hydro’s Waneta Electricity is the reduction by 1/3 of Teck’s entitlement (1/3 x 2,821 GWh/year = 940 GWh/year)

Net Generation to BC Hydro(GWh/year)

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

Critical Water Low Water Average Water High Water

Water Condition

Pre-Waneta Transaction (CPA quantities)Post-Waneta Transaction (CPA + Waneta Transaction)BC Hydro's Waneta Electricity

Commercial Arrangement 23

Co-ownership and Operating Agreement

• Teck’s Entitlement adjustments

¤ Operating Agreement provides for bilateral capacity and energy entitlement adjustments prior to 2036 such that Teck’s forecast entitlement matches its forecast of Industrial Load throughout this period

¤ BC Hydro’s Waneta Electricity will be reduced by 143 GWh/year beginning on the assumed in service date of April 1, 2014 for the Waneta Expansion Project (WEP)

Commercial Arrangement 24

Co-ownership and Operating Agreement

• Teck’s Entitlement adjustments (cont.)

¤ Teck is keeping BC Hydro’s Waneta Electricity firm for any outages (other than CPA planned outages) or decreases to entitlements up to 2036

¤ Any delay in WEP in-service date or other entitlement increases will be retained by Teck up to 2036

¤ After 2035 each Co-owner would be entitled to its proportionate share of actual energy and capacity from the Waneta Plant

Commercial Arrangement 25

Co-ownership and Operating Agreement

• Summary of BC Hydro’s Waneta Electricity

Waneta Transaction Energy and Capacity Volumes to BC Hydro

Prior to

August 2013August 2013 to July 2014

August 2014 to December 2035

2036 and Beyond

Energy (annualized GWh/year)

1,008 902 865 884

Capacity (December MW)

256 256 249 162

Commercial Arrangement 26

Co-ownership and Operating Agreement

• Delivery obligations/points of delivery

¤ Teck to make BC Hydro’s Waneta Electricity available at the Kootenay Interconnection (KI) (interconnection points to BCTC at Nelway, Selkirk and Kootenay Canal per the CPA)

¤ Teck to schedule BC Hydro energy from the KI to the B.C.-U.S. border at BC Hydro’s request

• Water rental fees

¤ Each party to be responsible for water rental fees on the capacity and energy it receives under the agreement

Commercial Arrangement 27

Surplus Power Rights Agreement

• Teck may at times have electricity surplus to its Industrial Load due to:

¤ Increases to entitlement

¤ Temporary reductions to Industrial Load

• The SPRA provides BC Hydro:

¤ The right of first offer to purchase Teck’s surplus electricity at market prices

¤ The obligation to purchase amounts of surplus electricity that Teck cannot schedule

Commercial Arrangement 28

CPA Amending Agreement

• Agreement between BC Hydro and Teck to bilaterally amend the CPA (per s.14.2) without affecting rights/obligations of other parties to:

¤ Remove BC Hydro’s ownership interest of Waneta from the CPA

¤ Provide for bilateral Waneta capacity/energy entitlement adjustments between BC Hydro and Teck

Commercial Arrangement 29

Security Agreement

• Standard, technical agreement providing each party with first priority over the other party’s ownership interest in the Waneta Assets to secure the rights and obligations

Commercial Arrangement 30

Term Sheet v. Definitive Agreements

• The filed Table of Concordance describes, at a high level, the differences between the Term Sheet and the Definitive Agreements

• The Table of Concordance demonstrates that the Definitive Agreements generally conform to the concepts captured in the Master Term Sheet

Commercial Arrangement 31

Due Diligence Process

Renata KurschnerDirector, Generation Resource Management

• Review of due diligence assessments

¤ Technical – Klohn Crippen Berger

¤ Environmental and Public Safety – Golder Associates

• Summary of due diligence

• Conclusions from due diligence review

Due Diligence

Due Diligence Process 33

Scope of Work

• Condition assessment of Waneta Plant

• Condition assessment of Line 71

• Review of OMA and capital maintenance history and forecast expenditures

• Review of dam safety

• Identification of significant (>$1 million) funding gaps and risk issues

Technical Due Diligence

Due Diligence Process 34

Findings

• Asset has been generally maintained in working order

• Plans are in place to continue adequate maintenance

• Major components of the plant rated fair to satisfactory (highest rating)

• Planned projects and expenditures are reasonable

Technical Due Diligence

Due Diligence Process 35

Findings (cont.)

• Risks requiring further assessment or not addressed by existing plans:

¤ Seismic review and potential seismic reinforcement to powerhouse

¤ Repair/resurfacing of spillway concrete

¤ End of life replacement of powerhouse water piping

¤ Potential penstock coating and repairs pending inspection findings

¤ Review of seismic adequacy of spillway piers and hoist structures

¤ Potential structural strengthening of downstream powerhouse wall

¤ Potential further dam anchoring to pass PMF if needed in the future (Teck currently has a plan for dam anchoring for seismic stability in 2015/16)

Technical Due Diligence

Due Diligence Process 36

Environmental and Public Safety Due Diligence

• Scope of Work: Identify risks associated with Waneta footprint and operations that may have moderate or higher consequences in terms of impact, cost and regulatory requirements related to:

¤ Environment: water quality and fisheriesvegetation and wildlifecontamination

¤ Public Safety

• Process: review of information provided by Teck, BC Hydro, publicly available sources, interviews with Teck and Fortis employees and site visits

Due Diligence Process 37

Findings• Well run facility; issues are managed and incidents lead to improvement in

practices

• Risks are similar to risks faced by other dam owners (including BC Hydro) in the Columbia basin, and comparable to level of risks at other BC Hydro owned dams

• Waneta benefits from a suite of environmental programs (impact related studies, mitigation works and compensation programs) that have been implemented in the basin by BC Hydro, CPC and Teck

• Environmental issues are proactively managed and can be managed in an adaptive approach in the foreseeable future

• Future regulatory requirements, especially around SARA and TGP, may increase

• Teck has reasonable budgets in place for environmental programs

Environmental Due Diligence

Due Diligence Process 38

Environmental Due Diligence

• Current risks¤ fish entrainment compensation¤ shallow water habitat compensation (Birchbank snye recontouring)¤ white sturgeon: spawn monitoring and flow augmentation (reduced

operational flexibility), critical habitat and unit start-up/maintenance ¤ potential participation in a complex Total Gas Pressure modeling for the

basinAnd are proactively managed by Teck and others in the area

• Future risks are more unpredictable and could have greater consequence¤ Upstream salmon passage¤ Other listed species at risk¤ Regulatory requirements with respect to TGP and white sturgeon¤ Contaminated headpond sediment management

Due Diligence Process 39

Environmental Due Diligence

Contamination Risks

• Contaminated sediments in headpond from historic upstream mining operation

¤ Could be disturbed by large floods, construction, or dam removal

¤ Similar risk exposure at Seven Mile

• Surface soil contamination from Teck’s smelter

¤ Levels of metal contamination below Industrial Land standard with no evidence of groundwater impact

¤ Teck agreed to take on remediation of contamination on land purchased by BC Hydro as if it was included in their proposed Wide Area Site

Due Diligence Process 40

Public Safety

• Issues resulting from:¤ Operations – effects of change in water level/velocity/volume

¤ Public access to facilities, reservoir and river

¤ Submerged hazards

• Signage and barriers in place but not tied to a formal Public Safety Plan (to be developed)

• An annually updated Public Safety Plan is required under the Operating Agreement

Public Safety Due Diligence

Due Diligence Process 41

Due Diligence Conclusions

• Nothing unusually problematic or unmanageable that would preclude BC Hydro from executing transaction

• Overall condition of Waneta Plant is consistent with BC Hydro expectations during negotiations

• Risks are in line with risks at other BC Hydro-owned plants

• Taking into account additional cost items found as potential increases during due diligence, the levelized unit cost increases marginally from $63.48/MWh to approximately $64/MWh

Due Diligence Process 42

First Nations Process to Date

Lyle ViereckDirector, Aboriginal Relationsand Negotiations

First Nations Consultation

• Structure of First Nations Consultation Report

¤ Identification of First Nations with asserted Aboriginal interests in vicinity of Waneta Dam

¤ Design, implementation and record of the First Nations consultation process to date

¤ Analysis and assessment on strength of claim, extent of impacts identified to date and adequacy of consultation to date

¤ Record of Decision

First Nations Process to Date 44

Identification of First Nations

• Review of publically available information

¤ Waneta Expansion filing

¤ Brilliant Expansion filing

¤ EAO reports

¤ First Nations submission to the EAO

¤ Reports prepared for Seven Mile

• Consulted with Teck

• 16 First Nations identifiedFirst Nations Process to Date 45

Notification to First Nations

• BC Hydro distributed to the 16 First Nations, a Non- Binding Term Sheet to permit their input before entering into a binding obligation

• Process of Notification

¤ Introductory Letter sent 6/17th

¤ Signed Term Sheet sent 6/18th

¤ Letter advising of BCUC process in connection with review of the Transaction sent 7/17th

¤ Invitation to Workshop sent Aug 31st

First Nations Process to Date 46

Consultation with First Nations

• Four First Nations have engaged

¤ Ktunaxa Nation Council (KNC)

¤ Shuswap Indian Band (SIB)

¤ Okanagan Nation Alliance (ONA)

¤ Sinixt Nation Society (SNS)

• Numerous Correspondences between BC Hydro and First Nations with phone call follow-up

• To date meetings have been held with the three First Nations that requested them

First Nations Process to Date 47

General Strength of Claim Evidence

• Little evidence that suggests the Lower Pend d’Oreille was extensively used by any Aboriginal people

• Evidence suggests that the Sinixt or Lakes people historically occupied the area, but were not present in the area when the Waneta Dam was constructed and began operations

• The KNC, SIB, ONA and SNS all have claimed traditional territory in the vicinity of the Waneta Dam

First Nations Process to Date 48

Strength of Claim Evidence

• Ktunaxa Nation Council (KNC)

¤ Waneta is at the extreme western edge of the KNC statement of intent map

¤ Physical distance of Waneta from KNC member communities

¤ No known KNC First Nations reserves in the Pend d’Oreille watershed

¤ Little evidence of use or presence of KNC member communities

¤ BC Hydro believes strength of claim is low, based on information reviewed to date

First Nations Process to Date 49

Strength of Claim Evidence

• Shuswap Indian Band (SIB)

¤ SIB has indicated to BC Hydro that SIB had traditionally had some activities in and around Waneta.

¤ Physical distance of Waneta from SIB community

¤ No known SIB reserves in the Pend d’Oreille watershed

¤ Little evidence of use or presence of SIB

¤ BC Hydro believes strength of claim is low, based on information reviewed to date

First Nations Process to Date 50

• Okanagan Nation Alliance (ONA)

¤ Waneta is at the extreme eastern edge of the ONA’s asserted traditional territory

¤ Physical distance of Waneta from ONA member communities

¤ No known ONA reserves in the Pend d’Oreille watershed

¤ Little evidence of use or presence of ONA member communities

¤ BC Hydro believes strength of claim is low, based on information reviewed to date

Strength of Claim Evidence

First Nations Process to Date 51

• Sinixt Nation Society (SNS)

¤ Waneta is centrally located within the Sinixt traditional territory

¤ Lack of physical presence in the area for 100 years

¤ BC Hydro believes strength of claim is low to moderate for appropriate representatives of Sinixt people

¤ Issues with respect to identification of modern appropriate representatives

Strength of Claim Evidence

First Nations Process to Date 52

Seriousness of Potential Impacts

• General considerations

¤ The Transaction will not adversely affect (or affect at all) the flow regime on the Pend d’Oreille River or other physical characteristics of the Waneta Dam or its operations

¤ No non-physical adverse impacts of the Waneta Transaction on the KNC, SIB, ONA or SNS interests have been identified by these First Nations, or in the public record

First Nations Process to Date 53

Adequacy of Consultation

• Based on observations made, information received to date by BC Hydro, low strengths of claim in the area of Waneta Dam and low potential for adverse impacts the consultation obligation in connection with the decision to enter into the APA is at:

¤ The low end of the Haida spectrum for the KNC, SIB and the ONA

¤ The lower end of the Haida spectrum for the SNS

• BC Hydro believes that consultation undertaken to date with the SNS, KNC, SIB and the ONA has been adequate to allow BC Hydro to sign and file the APA

First Nations Process to Date 54

Record of Decision

• BC Hydro’s CEO has accepted that BC Hydro has maintained the honour of the Crown by entering into the APA

• BC Hydro’s CEO has accepted the recommendation that:

¤ BC Hydro will bring forward to the Operating Committee First Nation issues that are with in the scope of the Operating Committee

¤ BC Hydro distribute the ARN Report and Record of Decision to affected First Nations and continue consultation with them in connection with the reports findings

First Nations Process to Date 55

Further Consultation

• BC Hydro will continue to consult with the First Nations

• BC Hydro requests comments from the SNS, KNC, SIB and ONA on ARN First Nation Consultation Report

• BC Hydro will continue to work with these First Nations to identify potential adverse effects from the Transaction

• The review / identifying process to be completed by Nov 18th, for determination of whether to proceed with finalization of the transaction or not

First Nations Process to Date 56

Comparative Economic Analysis

Sanjay De ZoysaResource Planning Engineer

Comparative Economic Analysis

• Alternatives and comparators

• Portfolio analysis

Comparative Economic Analysis 58

Alternatives and Comparators

• Comparators evaluated included:¤ F2006 call, 2007 Alcan EPA, Bio Energy Phase 1 projects,

Clean call block, and CCGT resource options

• Comparison based on the Effective Adjusted Price (EAP), which takes into account:

¤ Seasonality of energy deliveries

¤ Relative hourly firmness

¤ Cap on freshet energy

¤ Term

¤ Transmission costs

Comparative Economic Analysis 59

2008 LTAP Clean Call Block as a Comparator

Comparative Economic Analysis 60

Attribute BC Hydro’s Waneta Electricity Clean Call Block

CapacityDependable; very reliable through 2035, similar to other hydro resources thereafter

Indirectly as capacity associated projects that deliver firm energy

Energy Firm; very reliable through 2035, similar to other firm energy resources thereafter Firm, associated non-firm energy

EAP at 8% $66/MWh $101/MWh

EAP at 10% $86/MWh $121/MWh

Availability Plant exists, transmission exists, available on contract execution

2012 to 2016, subject to regulatory and development risks

Term Permanent (40-year amortization is assumed) 20 to 40 years

Self Sufficiency/ SD 10 B.C.-based resource B.C.-based resources

Clean or Renewable B.C. Clean or Renewable B.C. Clean or Renewable

Summary of EAPs

Comparative Economic Analysis 61

Comparator In-Service Date Term EAP at

8% EAP at

10% BC Hydro’s Waneta Electricity 2010 Permanent 66 86

F2006 Call 2011 31 > 97

Alcan 2007 EPA 2007 27 67 67Bioenergy Phase I 2009/10 10 114 11450 MW CCGT 2014 25 148 153250 MW CCGT 2014 25 118 120Clean Call Block 2014 20 -40 101 121

Portfolio Analysis - Overview

• Provides a view of the resource selection to fill energy and capacity demand if the world turned out to be exactly as planned

• Same modeling tools used as in the 2008 LTAP

• Resources available for selection are from the Resource Options Database as per the Resource Options Update in the 2008 LTAP

Comparative Economic Analysis 62

Portfolio Analysis – Approach Used

• The analysis covered a range of gas/electricity price scenarios and GHG offset cost scenarios

• The analysis is for the years 2010 through 2027¤ Consistent with the 2008 LTAP

¤ BC Hydro expects there to be significant additional economic benefit that results from the Waneta transaction beyond this period

• Two sets of portfolios were modeled for each scenario:

¤ One with the Waneta Transaction as a resource

¤ One without the Waneta Transaction as a resource

Comparative Economic Analysis 63

Resource Selection Summary for High Gas / Mid GHG Offset Cost Scenario

Portfolio with Waneta not included

Supply Totals through 2016Clean Thermal MCA/REV Total

Dep. Capacity (MW) 139 0 0 139Firm Energy (GWh) 2,070 0 0 2,070

Supply Totals through 2027Clean Thermal MCA/REV Total

Dep. Capacity (MW) 396 715 465 1,576Firm Energy (GWh) 6,796 4,387 130 11,313

Portfolio with Waneta included as a Resource

Supply Totals through 2016Clean Thermal MCA/REV Total

Dep. Capacity (MW) 105 0 0 105Firm Energy (GWh) 1,354 0 0 1,354

Supply Totals through 2027Clean Thermal MCA/REV Total

Dep. Capacity (MW) 453 479 0 932Firm Energy (GWh) 7,675 2,939 0 10,614

Comparative Economic Analysis 64

PV of portfolio cost($ millions)

10,374

PV of portfolio cost($ millions)

10,631

Portfolio Analysis Results

Comparative Economic Analysis 65

Cost of Thermal Waneta NPV Benefit in $ Millions (2010 – 2027)

Gas GHG

Likelihood (%)

8% Nominal 10% Nominal

Low Low 0.6 141 40 Mid Mid 31.0 158 65 Mid High 13.4 180 70 High Mid 38.8 257 135 High High 16.3 240 116 Weighted NPV 212 101

Waneta as a BC Hydro Resource

Chris O’RileySenior VP, Engineering, Aboriginal Relations and Generation

Waneta Transaction Summary

• Nature of Opportunity¤ Unique, time sensitive opportunity – now or never!

¤ Fair price relative to Teck's alternatives

¤ Contingent upon BCUC approval of expenditure

• Quality of Asset¤ Waneta is a good asset

¤ Firm energy and dependable capacity for planning purposes

¤ Existing facility with zero incremental environmental impacts

Waneta as a BC Hydro Resource 67

Waneta Transaction Summary

• Economic Benefits¤ $64/MWh attractive relative to alternatives

¤ $200 million of economic benefits over first 18 years

¤ Long term residual value as a result of ownership

• First Nations¤ Nature of process

¤ Conclusion based on what we know today

¤ Ongoing consultation

• Conclusion re. Public Interest¤ s Waneta as a BC Hydro Resource 68