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7.0 Consequences of Denial of License Application

• Future supply risks associated with competition for materials (lithium and other materials) and policy considerations (e.g., reliance on raw materials and manufacturing in China). Evidence of this risk is seen in recent industry studies showing a slowdown in battery price decline due to rising commodity prices and reduced production; and

• An inability to supply inertia to the grid.

Using lithium-ion as a benchmark for comparison (see Section 5.0 of this Exhibit), the Project represents a lower long-term, long-duration cost of storage than utility-scale batteries when viewed through the energy or MWh lens.

Other energy storage technologies, such as new battery technologies, hydrogen-based systems, and mechanical systems like rail energy storage and systems that lift and lower concrete blocks, are generally only at the demonstration or research and development stage and do not represent commercially available alternatives to the Project.

Compressed air energy storage (CAES) is the only other long-duration energy storage technology with an established track record, but this technology requires very specific and rare geology. The CAES technology available today also requires some combustion of natural gas, a source of greenhouse gases. A CAES project in Utah is being developed for the only known “Gulf Coast” style domal-quality salt formation in the western U.S. There are no known active proposals for CAES projects in Wyoming.

6.6 Conclusion

While BESS are the most likely alternative to the Project in terms of addressing utility and market needs for a distributed storage solution in the emerging low-carbon market, the advantages afforded by pumped storage—where it can be built—make the Project an exceptional opportunity for meeting the needs of Wyoming and the greater regional energy market.

There are currently no proposed projects that could provide the same benefit to optimizing regional diversity of renewable energy siting and existing and new transmission in the region. Therefore, no other pumped storage project in Wyoming is a viable generation alternative to the Project.

7.0 Consequences of Denial of License Application

If the license application is denied and the Project is not constructed, consequences would include the following:

• The region would be more restricted in its choice of tools for integrating and firming renewable resources, placing more reliance on a technology (batteries) that is more expensive over the long-term than the proposed Project and which entails risks for ratepayers and the environment.

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