December 31, The Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426

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Your Northwest Renewables Utility invites you to be a Conservation Sensation! December 31, 2012 The Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 Re: Admiralty Inlet Pilot Tidal Project (P-12690) Deception Pass Tidal Energy Project (P-12687) Dear Secretary Bose, Progress Report #5 Public Utility District No. 1 of Snohomish County was issued preliminary permits for the Admiralty Inlet and Deception Pass sites on July 8, 2010, and August 4, 2010, respectively. These are the second preliminary permits issued to the District for each of these sites. The preliminary permits require the District to file a progress report with the Commission at the close of each six-month period from the effective date of the permit describing the District s activities during that report period. The District previously filed periodic reports on December 31, 2010, June 30, 2011, December 30, 2011, and July 3, 2012. This progress report describes the projectrelated activities undertaken by the District during the six-month period beginning July 1, 2012. This progress report provides a general summary of those activities. Additional detail can be found in the respective dockets maintained by FERC and is available from the District upon request. On March 1, 2012, the District filed with the Commission the Final License Application for the Admiralty Inlet Pilot Tidal Project (the FLA ). The FLA contained summaries of three of the proposed protection, mitigation, and enhancement measures: the Acoustic Monitoring Plan, the Near-Turbine Monitoring Plan, and the Marine Mammal Monitoring Plan. In the FLA the District committed to working with interested entities to finalize these plans. The District has continued discussions of these plans following the filing of the FLA and has made substantial progress toward their finalization. The District held a meeting on June 27, 2012, with federal and state resource agencies, interested tribes, and other entities to discuss the status of these plans and the schedule to complete the plans and submit them to the Commission. The District continued to engage these entities regarding the plans, revising them to account for the feedback. The Benthic Habitat, Acoustic, Marine Mammal, and Near-Turbine Monitoring and Mitigation Plans were sent to members of the Marine Aquatic Resources Committee for comments on September 5, 2012. The District received comments from NOAA Fisheries, the Washington State Department of Ecology, and the Washington State Department of Fish and Wildlife. Following receipt of the comments, the District and NOAA Fisheries engaged in additional discussions regarding how to respond to an outage to the environmental monitoring package used for the Near- Turbine Plan. The final plans, as revised in response to the submitted comments as well as the later discussions with NOAA Fisheries, were submitted to the Commission on November 16, 2012. 2320 California Street Everett, WA 98201 / Mailing Address: P.O. Box 1107 Everett, WA 98206-1107 425-783-1000 Toll-free in Western Washington at 1-877-783-1000 www.snopud.com

December 31, 2012 Page 2 of 3 Concurrently with the efforts to complete the remaining monitoring and mitigation plans for the Project, the District has been working with various stakeholders to ensure that Project activities, including installation and operation, do not pose an unreasonable risk to the existing PC-1 telecommunications cable, which is located on the Admiralty Inlet sea floor. Comments and information were filed with the Commission by PC Landing Corp., the owner and operator of the PC-1 cable, and the District responded with clarifications and additional information. On August 6, 2012, Commission staff conducted a technical conference to address outstanding issues related to the Project. Among the topics discussed at that conference were the potential for the Project to harm the PC-1 cable and the ability to relocate the Project further from the cable without unduly diminishing the potential for the Project to collect valuable information. Following the technical conference, both the District and PC Landing provided the Commission with additional information regarding potential impacts to PC-1 and the possibility of relocating the Project further from the PC-1 cable. The District also discussed concerns raised by the Federal Communications Commission (the FCC ) and the Naval Seafloor Cable Protection Office (the NSCPO ) with those entities. Following these discussions, the FCC and NSCPO submitted letters clarifying their concerns and withdrawing their objections on October 4, 2012, and October, 26, 2012, respectively. On November 19, 2012, Commission staff issued a revised schedule targeting the Commission s release of a non-draft Environmental Assessment on January 18, 2013, with comments on the Environmental Assessment due February 18, 2013. In addition to the efforts required as part of the Commission s licensing process, the District has continued to progress in the technical and engineering aspects of the Admiralty Inlet Project. The District is developing and refining the specifications necessary to issue contractual documents for the procurement of necessary components, carrying out of marine work, and other elements of the construction, installation, and maintenance associated with that project. The District has also applied for several state and local permits and authorizations, including a section 401 water quality certification and a state shorelines permit. The plan development and other work that has occurred during the current reporting period directly and indirectly impacts the District s assessment of the viability of the Deception Pass Project. Deception Pass and Admiralty Inlet are home to the same sealife and will likely require similar monitoring techniques. The methods for gathering information necessary to support the licensing of both projects are also expected to be similar. For example, the techniques described in the monitoring and mitigation plans submitted to the Commission on September 5, 2012, as modified based on experience within Admiralty Inlet, will form the foundation for monitoring and mitigation plans utilized for the Deception Pass Project. During the next six months, the District will continue working with the Commission and interested stakeholders to complete the application process for the Admiralty Inlet Project. The District will also continue working with the appropriate entities to complete the application processes for the associated federal, state, and local permits and authorizations required for the project. The District will continue to collaborate with resource agencies, tribes, and other stakeholders in these efforts. As described in the District s FLA, the District also expects to

December 31, 2012 Page 3 of 3 continue collaboration with interested stakeholders throughout the various stages of the Project should a license be issued, including planning, installation, and operations. Sincerely, Please contact me if you have any questions regarding this report or the projects. Craig W. Collar, P.E. Assistant General Manager, Power and Transmission Services Phone: (425) 783-1825 E-mail: cwcollar@snopud.com

CERTIFICATE OF SERVICE I hereby certify that I have this day served via e-mail or via the U.S. Postal Service a copy of the foregoing filing upon each person designated on the official service list compiled by the Secretary in this proceeding in accordance with Rule 2010 of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission. Dated this 31 st day of December, 2012 at Everett, Washington. Ray Finnen Senior Paralegal Public Utility District No. 1 of Snohomish County PO Box 1107 Everett, WA 98206-1107 Phone: 425.783.8262 Dept Fax: 425.783.8305 E-mail: rffinnen@snopud.com

Service List for P-12690 and P-12687: Admiralty Inlet Tidal Energy Project Public Utility District No. 1 of Snohomish County, Washington Joseph Brogan, Attorney at Law Foster Pepper & Shefelman 1111-3rd Avenue, Suite 3400 Seattle, WA 98101 brogj@foster.com Keith Kirkendall, NOAA 1201 NE Lloyd Blvd., Suite 1100 Portland, OR 97232 keith.kirkendall@noaa.gov Scott J. Carlon NOAA/NMFS 1201 NE Lloyd Blvd., Suite 1100 Portland, OR 97232 scott.carlon@noaa.gov Ash Miller 925 Fourth Ave., Suite 2900 Seattle, WA 98104 ash.miller@klgates.com PC Landing Corp. Martin L Stern marty.stern@klgates.com Stan Walsh Hydropower Biologist 5318 Chief Brown Lane Darrington, WA 98241 swalsh@skagitcoop.org Kimberly Ordon Tulalip Tribes of Washington PO Box 1407 Duvall, WA 98019 kimberlyordon@comcast.net Steve Reneaud Assistant Attorney General Olympia, 98504-0100 resolyef@atg.wa.gov Nolan Shishido, Attorney Office of the Regional Solicitor 805 SW Broadway, Suite 600 Portland, OR 97205 nolan.shishido@sol.doi.gov Jane S Hannuksela NOAA/NMFS NOAA GCNW, Bldg. 1 7600 Sand Point Way, N.E. Jane.Hannuksela@noaa.gov Alison Agness NOAA/NMFS 7600 Sand Point Way NE Alison.Agness@noaa.gov Craig Trueblood, Attorney 925 4th Avenue, Suite 2900 Seattle, WA 98104 craig.trueblood@klgates.com PC Landing Corp. Kari L Vander Stoep kari.vanderstoep@klgates.com Daryl Brent Williams Environmental Liaison Tulalip Tribes 6406 Marine Drive Tulalip, WA 98271 dwilliams@tulaliptribes-nsn.gov Timothy Romanski Fish and Wildlife Biologist Fish & Wildlife Service, Region 1 510 Desmond Drive SE Lacey, WA 98503 Tim_Romanski@fws.gov Terry Pruit Assistant Attorney General Olympia, WA 98504-0100 terryp@atg.wa.gov Alicia Bishop NOAA Fisheries Service 1201 NE Lloyd Blvd. Portland, OR 97232 alicia.bishop@noaa.gov Christopher Fontecchio, Attorney- Advisor NOAA 7600 Sand Point Way NE chris.fontecchio@noaa.gov Kurt Johnson, CFO 319 Diablo Road, Suite 213 Danville, CA 94526 kjohnson@pc1.com William Keyser 1601 K Street, NW Washington, D.C. 20006 william.keyser@klgates.com Matthew Love Van Ness Feldman, PC 821 Second Avenue, Suite 2000 Seattle, WA 98104-1519 mal@vnf.com Kaye Nealy Morisset, Schlosser& Jozwiak 801 2d Avenue, Suite 1115 Seattle, WA 98104 k.nealy@msaj.com David Hawkins, Tribal Attorney 25944 Community Plaza Way Sedro-Woolley, WA 98284 dhawkins@upperskagit.com Brady Scott Aquatic District Manager, WA DNR 5310 Eaglemount Road Chimacum, WA 98325 brady.scott@dnr.wa.gov

Bill Frymire, Senior Counsel Olympia, WA 00100 billf@atg.wa.gov Rebekah Padgett WA Department of Ecology 3190 160th Ave SE Bellevur, WA 98008 Rpad461@ecy.wa.gov Jonathan Olds Environmental Program Mgr. Washington State Ferries 2901 3rd Avenue, Suite 500 Seattle, WA 98121-1012 oldsj@wsdot.wa.gov Elizabeth Ellis Environmental Planner WA State DNR elizabeth.ellis@dnr.wa.gov Thomas O Keefe PNW Stewardship Director 3537 NE 87 th Street okeefe@amwhitewater.org Joan Marchioro, Senior Counsel PO Box 40117 Olympia, WA 00117 JoanM2@atg.wa.gov Mark Albert Hunter, WSFWS 600 Capitol Way N Olympia, WA 98501 huntemah@dfw.wa.gov Mark Lyon, AAG PO Box 40113 Olympia, WA 98504-0113 markl1@atg.wa.gov Michael Ferguson, AAG Olympia, WA 00100 MichaelF2@atg.wa.gov ** Melvin Sheldon, Chairman Tulalip Tribes of Tulalip Reservation 6700 Totem Beach Road Tulalip, WA 98271 Zelma Zieman, Regional Lead Governor's ORA 3190 160th Avenue SE Bellevue, WA 98008-5452 zelma.zieman@ora.wa.gov Karolyn Klohe, Washington Olympia, WA 98504-0100 KAROLYNK@atg.wa.gov Lisa Tryon, Legal Assistant WA State Dept. of Transportation PO Box 40113 Olympia, WA 00113 lisat1@atg.wa.gov Steve Erickson, WEAN Box 53 Langley, WA 98260 wean@whidbey.net Service List E-mail Addresses: brogj@foster.com; nolan.shishido@sol.doi.gov; alicia.bishop@noaa.gov; keith.kirkendall@noaa.gov; Jane.Hannuksela@noaa.gov; chris.fontecchio@noaa.gov; scott.carlon@noaa.gov; Alison.Agness@noaa.gov; kjohnson@pc1.com; ash.miller@klgates.com; craig.trueblood@klgates.com; william.keyser@klgates.com; marty.stern@klgates.com; kari.vanderstoep@klgates.com; mal@vnf.com; swalsh@skagitcoop.org; dwilliams@tulaliptribes-nsn.gov; k.nealy@msaj.com; kimberlyordon@comcast.net; Tim_Romanski@fws.gov; dhawkins@upperskagit.com; resolyef@atg.wa.gov; terryp@atg.wa.gov; brady.scott@dnr.wa.gov; billf@atg.wa.gov; JoanM2@atg.wa.gov; zelma.zieman@ora.wa.gov; Rpad461@ecy.wa.gov; huntemah@dfw.wa.gov; KAROLYNK@atg.wa.gov; oldsj@wsdot.wa.gov; markl1@atg.wa.gov; lisat1@atg.wa.gov; elizabeth.ellis@dnr.wa.gov; MichaelF2@atg.wa.gov; wean@whidbey.net; okeefe@amwhitewater.org

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