Criteria for Eligibility

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2 Criteria for Eligibility Pursuant to NRS 704B.080 an Eligible Customer is an end-use customer of the utility which is: A non-governmental commercial or industrial customer that has an average annual load of 1 megawatt or more in the utility s service territory. A governmental entity that: Performs its functions using one or more facilities which are operated under a common budget and common control; and Has an average annual load of 1 megawatt or more in the utility s service territory.

3 Timeline Letter of Intent Eligible Customer submits Letter of Intent to Utility, Regulatory Operations Staff, and the Bureau of Consumer Protection 30 calendar before it intends to file an Exit Application with the Commission. Meet and Confer Approximately 15 calendar before the date the eligible customer intends to file an Exit Application with the Commission, the Parties meet to identify any issues with respect to the proposed transaction. Eligible Customer Files Exit Application Eligible Customer files an application to purchase energy, capacity, and/or ancillary services from a provider of new electric resources ( Exit Application ) with the Commission 180 before it intends to begin service with a new provider of electric resources. Staff s Initial Analysis Staff performs its initial analysis of the proposed transaction and releases its results to all parties of record no later than 45 calendar after the Eligible Customer files its Exit Application

4 Meet and Confer Parties of Record meet to discuss any modifications, additions, and/or deletions to Staff s initial analysis no later than 55 calendar after the eligible customer filed its Exit Application. Staff s Final Analysis Staff finalizes its analysis of the proposed transaction and releases its results to all Parties of Record no later than 65 calendar after the Eligible Customer filed its Exit Application. Parties Alternate Analyses Parties of Record may file with the Commission an alternate analysis to Staff s analysis no later than 80 calendar after the Eligible Customer files its Exit Application. TESTIMONY FILED, HEARINGS HELD AND COMMISSION ORDER Commission must hold a hearing and render a decision and Order within 180 of application date

5 Compliance Items Filing Customer complies with the terms and conditions contained in the Commission s Order and files all applicable agreements, such as the underlying contract with the provider of new electric resources. Analysis of the 10% contract Staff performs and releases its initial analysis of the 10% contract to the Parties of Record no later than 15 calendar after the completed and executed underlying contract between the Eligible Customer and the provider is filed with the Commission. The Parties of Record then meet and confer within 5 calendar after the release of Staff s initial analysis. Staff s final analysis of the 10% contract is due no later than 30 calendar after the completed and executed underlying contract between the Eligible Customer and the provider is filed with the Commission. The Parties of Record can file an alternate analysis on the 10% contract no later than 40 calendar after the completed and executed underlying contract between the Eligible Customer and the provider is filed with the Commission. Notification and Departure Within 20 calendar after the Commission determines that the Eligible Customer has complied with all terms, conditions, and compliance items, the Eligible Customer must notify the Commission in writing as to whether it intends to proceed with the proposed transaction. The date the Eligible Customer departs the utility s system is no sooner than 60 after the notification of intent No sooner than 80 after Final Order

6 Staff s analysis a brief overview NRS 704B.310(6) states: In determining whether the proposed transaction will be contrary to the public interest, the Commission shall consider, without limitation: (a) Whether the electric utility that has been providing electric service to the eligible customer will be burdened by increased costs as a result of the proposed transaction or whether any remaining customer of the electric utility will pay increased costs for electric service as a result of the proposed transaction; (b) Whether the proposed transaction will impair system reliability or the ability of the electric utility to provide electric service to its remaining customers; and (c)whether the proposed transaction will add energy, capacity or ancillary services to the supply in this State. Pursuant to NAC 704B.350(1), the Regulatory Operations Staff performs an analysis to estimate the potential impacts of the proposed transaction on the utility and its remaining customers.

7 Staff s analysis a brief overview Staff s impact analysis consists of three categories: BTGR rate impact analysis BTER rate impact analysis Regulatory Asset impact analysis The BTGR rate impact analysis calculates the difference between the revenue the utility would receive if the customer remained a bundled retail customer and the revenue the utility would receive from the customer for distribution, transmission, and ancillary services. The BTGR rate recovers the return of and return on utility plant investments.

8 Staff s analysis a brief overview The BTER rate impact analysis calculates the impact to fuel and purchased power costs, including the costs associated with renewable energy contracts required for the utility to comply with the renewable portfolio standard. The Regulatory Asset impact analysis calculates the impacts associated with stranded utility costs, such as the net book value of retired coal facilities and coal site remediation costs, as well as generating facilities approved by the Commission but not yet incorporated into general rates. The impact fee calculated by Staff in its Impact Analyses is the estimated increased cost to remaining ratepayers as a result of the proposed transaction and is assessed to the exit applicant upon departure to ensure the proposed transaction is not contrary to the public interest.