SCENARIO 2 PRESENTATION

1. SCENARIO 2PRESENTATION 345KV HVDC ALTERNATIVE ROBERT LONA SENIOR CONSULTANT ERCOT SYSTEM PLANNING 3/10//2008

2. HVDCCOST ASSUMPTIONS • $250/KW HVDC RATING(MW) COST $M 1000 $789 1500 $1,039 2000 $1,289 2500 $1,539 3000 $1,789 4000 $2,289 • $1.05 MILLION/MILE(APPROXIMATELY 70% OF AC LINE COST)

3. 3000MW HVDC ALTERNATIVES • BLUFF CRK 345KV BUS – EVERMAN 345KV BUS • PANHANDLE – NAVARRO 345KV BUS • ODESSA 345KV BUS – W.A.PARISH 345KV BUS • OTHERS?

4. BLUFF CRK – EVERMAN 3000MW HVDC • ~ 165 MILES • ESTIMATED TRANSMISSION COST $173 MILLION • HVDC COST $1,500 MILLION • TOTAL HVDC COST $1.673 BILLION

6. HVDC: BLUFCRK5 – EVERMAN5 SALADO5 KENDALL

7. CURRENT STATUS OF BLFCRK – EVERMAN HVDC 4 – MONTH WIND CURTAILMENT MCCAMEY CENTRAL PANHANDLE OVERALL 3.21% 5.62% 11.12% 6.93% TRANSMISSION COST COMPARABLE TO FULL 345KV AC CASES WITH 2% CURTAILMENT

8. PANHANDLE – NAVARRO 3000MW HVDC • ~ 275 MILES • ESTIMATED TRANSMISSION COST $289 MILLION • HVDC COST $1,500 MILLION • TOTAL HVDC COST $1,789

9. 3000MW HVDC: PANHANDLE – NAVARRO

10. NAVARRO SALADO KENDALL

11. CURRENT STATUS OF PANHANDLE - NAVARRO HVDC 4- MONTH WIND CURTAILMENT MCCAMEY CENTRAL PANHANDLE OVERALL 8.61% 20.12% 3.28% 12.45% TRANSMISSION COST COMPARABLE TO FULL 345KV AC CASES WITH 2% CURTAILMENT

12. NEXT STEPS

13. QUESTIONS ?