https://www.portlandgeneral.

com/-/media/public/our-company/wholesale-activities/
documents/om-costs.pdf?la=en cogeneration steam price

The calculation of the OMC is provided in Attachment 1 and effective with this e-mail replacing
the 2015 value of $3.01 per thousand pounds of steam with $2.54 for 2016.
Three categories of operations and maintenance (OM) costs are included in the OMC: 1) OM
costs that are common to both types of steam produced—from Unit 1 (gas turbine) co-
generation and the auxiliary boiler, 2) OM costs that are only for cogeneration, and 3) OM costs
that are only for the auxiliary boiler.
A significant item included in number three above, is the cost of gas (priced at $1.87 per
mmbtu down from $3.36 per mmbtu) used to produce steam with the auxiliary boiler. These
costs are summed up for steam produced by both cogeneration and the auxiliary boiler to $1.28
per thousand pounds steam and $6.34 per thousand pounds of steam respectively. To arrive at
overall OMC for steam production, these amounts are weighted at 75% and 25% respectively
to reflect expected amounts of steam from the two sources and consistent with the Service
Factor in the Agreement. The overall OMC from these calculations is: $2.54 per thousand
pounds of steam or an decrease of $0.47 per thousand pounds of steam.

Calculation of 2016 O & M Price

Post
Volume 2006
Change Capital
Co-Generation Aux 2015 2016 Change
Price for Makeup Water + Price for Makeup Water Chemicals + $ 0.42 $ 0.31 -26%
Water Train Maintenance Cost
(=Calculations!D11)
Category 1: Water $ 0.31 $ 0.31
PGE Steam Distribution System O&M / (Average Hourly Steam $ 0.05 $ 0.06 4%
Requirements x Annual Steam System Service)
Category 1: PGE Steam Distribution System O&M $ 0.06 $ 0.06
(Capital Investment in Cogen Facility x Capital Recovery Rate+RO $ 0.80 $ 0.31 $ (0.22) $ 0.89 11%
Recovery+ Post 2006 Capital) / (Annual Steam System Service
hours x Steam Production Capabilities

RO Recovery ends 12/31/2018

Post 2006 Capital ends 12/31/2023
Category 1: Cost Recovery of Capital Investment2. $ 0.89 $ 0.89
Subtotal Common Costs $ 1.26 $ 1.26
(Amine Feed x Cost of Amine x Specific Gravity of Amine) / $ 0.01 $ 0.01 4%
Average Daily Steam Sales
Category 2: Steam pH control $ 0.02

Subtotal Co-Gen Only Costs $ 0.02

Category 3: Other Auxiliary Boiler Operating Cost ((Annual Operating Cost for Aux Boiler + Annual Aux Boiler $ 0.37 $ 0.45
Electrical Load x Market Price of Power (Flat))/ Annual Average
Steam Sales*.25
$ 1.80 23%
Annual Maintenance Cost of Aux Boiler for all Steam Production / $ - $ -
(Annual Average Steam Sales*.25)
Category 3: Auxilary Boiler Maintenance $ -
(Gas Commodity Price + Gas Transportation + Var Gas $ 1.36 $ 0.82 -40%
Transportation) x (Gas MMbtu per 1000 LBS of Steam at Coyote
Springs) / CS Aux Boiler Efficiency

Category 3: Gas Auxilary Boiler $ 3.28 Gas MMbtu per 1,000 LBS of Steam at Coyote Springs=1.173

Subtotal Aux Boiler Only Costs $ 5.08

Total $ 1.28 $ 6.34
Percent of Steam 75% 25%
Total O & M
Weighted Contribution to O & M $ 0.96 $ 1.58 $ 2.54 $ 3.01 $ 2.54
1. Based on a gas price of: $ 1.87
2. Includes an annual charge of $183,944
through January 2019 (5 year recovery).

The OMC for 2016 and it components is presented below along with history of the OMC
and it components going back to 2007.
 Notice of Update to Operations and Maintenance Cost
As of 1-1-2016

Steam Pricing 2007-2015

For 2015-2016
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Delta
Capital $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.27 $ 0.80 $ 0.89 $ 0.09
O & M Only $ 0.56 $ 0.55 $ 0.73 $ 0.85 $ 0.86 $ 0.86 $ 1.00 $ 0.53 $ 0.85 $ 0.83 $ (0.02)
Aux Boiler Fuel $ 2.68 $ 2.48 $ 2.61 $ 1.69 $ 1.31 $ 1.31 $ 1.21 $ 1.30 $ 1.36 $ 0.82 $ (0.54)
Total $ 3.38 $ 3.17 $ 3.48 $ 2.67 $ 2.31 $ 2.31 $ 2.34 $ 2.10 $ 3.01 $ 2.54 $ (0.47)

Lost Generation $ 5.16 $ 4.84 $ 2.78 $ 2.78 $ 2.96 $ 1.92 $ 2.24 $ 1.92 $ 1.92 $ 1.99 $ 0.07
(Forecasted Only)

total $ 8.54 $ 8.01 $ 6.26 $ 5.45 $ 5.27 $ 4.23 $ 4.58 $ 4.02 $ 4.93 $ 4.53 $ (0.40)
(Forecasted Only)

Your overall steam price will be updated monthly per the applicable Agreement using the
resulting OMC. Please contact me at 503-464-7491 with questions regarding this Notice.
Notice of Update to Operations and Maintenance Cost
As of 1-1-2016