2008 Annual Five Year Plan Update 2

1. 2008 Annual Five Year PlanUpdate 2 10/12/2007 Regional Planning: Jay Teixeira, Harry Liu, Brad Schwarz, Jeff Billo, Chris Ngai

2. Load Assumptions • Reliability Assessment – SSWG Forecast • Economic Assessment – ERCOT Forecast

3. Generation Assumption • Existing generation • Mothballed units in-service if reserve margin falls below 12.5% • Removed DFW-area non-SCR units • All future generation that have signed IA • $7/MMBTU average natural gas price for all years

4. Wind Generation • All generators that are in the SSWG 2007 DSB cases updated 08/30/2007 plus: • Hackberry Wind, 165 MW, Shackelford County • Wildhorse Mountain Wind, 120 MW, Howard County • Gulf Wind, 188 MW, Kenedy County • Penascal Wind, 201 MW, Kenedy County • Total wind plant capacity are 6514, 6903 MW in 2008 and 2009 respectively

5. Generation Assumption

6. 5-year Study Process Existing 2012 SSWG Base case TPIT and RPG Analysis – TO and ERCOT Remove Non-RPG approved projects Conditioned Case Reliability Analysis – TO and ERCOT Adding Reliability Projects Repeat Process for previous year Update the topology and Switch to ERCOT forecast Base case for economic study UPLAN Economic Analysis – TO and ERCOT Adding Economic Projects Final topology for the year

7. Reliability Projects

8. Definitions • Reliability Projects – Transmission projects that are needed to meet NERC or ERCOT reliability criteria that could not otherwise be met by any dispatch of the existing generation in planning studies • Economic Projects – Transmission projects that are needed to allow NERC and ERCOT reliability criteria to be met at a lower total cost than the continued dispatch of higher cost generation This distinction is made only to describe what kind of analysis is performed for the project and does not indicate whether the project is required or optional.

9. How does ERCOT Evaluating Reliability Projects Three Buses Example: • Bus 1 • Generator 1 • Capacity: 1800 MW • Cost of generation: $30/MWh • Bus 2 • Load: 1200 MW • Bus 3 • Load: 300 MW • Three transmission lines with identical rating of 1000 MW and same characteristics (Impedances). Figure one shows the network and assumptions

10. 3 Bus Network Example 300 MW Load Figure 1 G1: 1800 MW Cost: $30/MWh 1000 MW Bus 3 Bus 1 1000 MW 1000 MW Bus 2 1200 MW Load

11. Traditional Planning: Economic Dispatch Figure 2 300 MW Load G1: 1800 MW Cost: $30/MWh Dispatch 1500 MW 1000 MW Bus 3 Bus 1 1000 MW 1000 MW • Pre Contingency • G1 is dispatched at 1500 MW to serve load at Bus 2 and Bus 3 • No overload Bus 2 1200 MW Load

12. Traditional Reliability Project: Post Contingency Overloading Figure 3 G1: 1800 MW Cost: $30/MWh Dispatch 1500 MW 300 MW Load 1000 MW Bus 3 Bus 1 1000 MW 1000 MW Post Contingency: When contingency of line from bus1 to bus3 happens, line from bus 1 to 2 overloads 150% Bus 2 1200 MW Load

13. Current Planning: Unserved Energy UNS: 300 MW G1: 1800 MW Cost: $30/MWh Dispatch 1000 MW 300 MW Load 1000 MW Bus 3 Bus 1 1000 MW 1000 MW • Security constraint dispatch: G1 at 1000 MW • No Post Contingency Overload. • Unserved Energy 200 MW at bus 2, 300 MW at bus 3 • Line1-2 showing as a limiting element Bus 2 UNS: 200 MW Figure 4 1200 MW Load

14. Uplan Unserved Energy Report UNS Bus name UNS MW Limiting Elements PTDF/OTDF CNT 1 Bus 2 200 Line 1-2 -1.00 Line 1-3 Bus 3 300 Line 1-2 -1.00 Line 1-3

15. Reliability Projects5 Year Plan

16. Reliability Projects And Date Need --Preliminary

17. Discussion of Selected Reliability Project

18. Rothwood 345/138 kV Station Problem:

19. Before Rothwood Station Overload Element Contingency Unserved energy

20. After Rothwood Station

21. Forney 345/138 kV Auto Problem

22. Before Forney Auto Overload Element Contingency Unserved energy

23. Forney Vs. Seagoville

24. Forney Vs. Seagoville Second Auto No Overload Contingency

25. Roanoke1 345/138 kV Auto Problem

26. Before Roanoke1 Auto Unserved energy Overload Element Contingency

27. McNeil to Summit Second Circuit Problem

28. Before McNeil to Summit Overload Element Unserved energy Contingency

29. Fairdale to Brand Upgrade Problem

30. Before Fairdale to Brand Upgrade Overload Element Unserved energy Contingency

31. After Fairdale to Brand Upgrade No Overload

32. McCree - Shiloh Upgrade Problem

33. Before McCree-Shiloh Upgrade Contingency Overload Element Unserved energy

34. After McCree-Shiloh Upgrade Contingency No Overload

35. Cross Timbers to Roanoke Upgrade Problem

36. Before Cross Timbers to Roanoke Upgrade Contingency Overload Element Unserved energy

37. After Cross Timbers to Roanoke Upgrade Contingency No Overload

38. Liggett Auto Upgrade Problem

39. Before Liggett Auto Upgrade

40. Unserved-Limiting Elements-Contigency

41. Unserved-Limiting Elements-Contigency Continued

42. Economic Projects

43. 2012 Economic Project • Performed preliminary economic project analysis • Creating list and send to TOs for review: • Technical feasibility of the proposed projects • Cost estimates of the projects • Alternative proposals and cost

44. Economic Projects • Use the list of projects in 2012 as a manual to do other year economic analysis • If there is congestion, see if the project from the 2012 list can economically solve the issue • If there is congestion that can not be solved by any of the projects in 2012 economic project list: • Determine if there is a project that can generate enough revenue in the first few years to cover the capital cost • Any other temporary solutions

45. Questions?