SRP Summer Preparedness 2007

1. SRPSummer Preparedness 2007 Mike Hummel Manager – Supply & Trading and Gary Harper Manager - System Operations ACC Summer Preparedness Hearing March 22, 2007 Summer Preparedness 2007

2. SRP Electric Service Territory Peoria Scottsdale Surprise Phoenix FountainHills ParadiseValley Eastern Mining Area LitchfieldPark Glendale Tolleson Mesa ApacheJunction Tempe Gilbert Avondale Chandler QueenCreek Goodyear Summer Preparedness 2007

3. Summary • Peak demand is expected to be higher than last year due to continued growth. • Adequate resources have been secured to meet the anticipated demand. • The risk of potential wildfires is a continuing concern. Summer Preparedness 2007

4. Peak Load Forecast 6627 MW 6590 MW 2006 Actual 2007 Forecast Summer Preparedness 2007

5. Summer 2006 Retail System Peak ‘Needle Peak’ • Summer 2006 new peak – 6590 MW • Exceeded Base Forecast of 6210 MW by 380 MW • 16 hours • Exceeded High Risk Forecast of 6448 MW by 150 MW (1:10 occurrence) • 3 hours • 118 degree Peak Temperature (1:10 occurrence) Summer Preparedness 2007

6. Summer 2007 Outlook Expected Capability Expected Need Reserves Purchased Power 912 MW 1849 MW SRP Forecast Peak Load SRP Generation 6627 MW 5690 MW Total 7539 MW Total 7539 MW Summer Preparedness 2007

7. Reserves • Respond to load extremes above base forecast. • Provide an immediate response to forced outages. • Quantity is based on NERC and WECC operating criteria and contractual arrangements. • A portfolio of resources is utilized to meet the reserve requirements. • Balances “reliability” and “low cost” objectives. Summer Preparedness 2007

8. SRP Owned Generation – 2007 Total Capacity: 5690 MW Hydro & Renewables 276 MW Gas 2951 MW Coal1791 MW Nuclear 672 MW Summer Preparedness 2007

9. Purchased Power • Purchased power portfolio is in place to meet demand. • Additional purchases may be needed to respond to forced unit outages. • Regional market conditions suggest that there will be sufficient capacity to meet the Arizona demand. Summer Preparedness 2007

10. Fuel Status • Nuclear – Full requirements under contract • Coal • Plants expected to be at or above target inventories by summer season • Full requirements under contract • Natural Gas • Full transportation requirements under contract • In process of securing retail commodity requirements • Distillate fuel back-up Summer Preparedness 2007

11. Generation Maintenance Completed By Summer 2007 Units Agua Fria 1,2,3,4,5,6 Craig 2 Desert Basin 1,2 Hayden 2 Horse Mesa 1,2,4 Kyrene 7 Mormon Flat 1,2 Navajo 2 Palo Verde 1,2,3 Roosevelt 1 Santan 1,2,3,4,5 Stewart Mountain 1 Summer Preparedness 2007

12. System AdditionsStations Summer Preparedness 2007

13. System AdditionsLines Summer Preparedness 2007

14. System Preparation Transmission and substation maintenance and training will be complete by summer. This includes: • Tree trimming • Cable replacement • Storm planning • Emergency procedure training • Blackstart training • Line patrols/inspections • Preventative maintenance • Pole re-enforcement • Pole change-outs/ upgrades • Wildfire coordination Summer Preparedness 2007

15. SRP/Wildland Fire Coordination • Facilities identification and location • Direct communication between SRP and Agencies • SRP Advisor Representative on-site • Firefighting safety information • Participate in State Drill and Southwest Mutual Assistance Committee Summer Preparedness 2007

16. SRP Electric Facility Firefighting • Support development of Pre-Plan Information for each facility. • Provide Emergency Contact Information for each facility and responding firefighters. • Integrate SRP representatives into Incident Command System management. • Provide firefighter electrical safety awareness and facility orientation training. Summer Preparedness 2007

17. Craig Hayden TOUTAH TOUTAH TOCOLORADO Navajo San Juan Glen Canyon Four Corners TONEVADA TONEWMEXICO Mohave Davis Cholla TOCALIFORNIA Coronado TONEWMEXICO Springerville Parker PaloVerde Kyrene TOPHOENIX AREA TONEWMEXICO TO TUCSONAREA North Arizona EHV Transmission Systems COLORADO NEVADA UTAH Shiprock Marketplace Mead Mc Cullough Moenkopi El Dorado Electrical Substations Coal Generation Hydro Generation New Gas Generation CALIFORNIA Westwing PinnaclePeak ToDevers Liberty Rudd Silver King Browning Jojoba Hassayampa Phil Young (Greenlee) ToMiguel North Gila Saguaro Vail South ARIZONA NEW MEXICO MEXICO Summer Preparedness 2007

18. Distribution • Summer operating procedures reviewed and refresher training provided to O&M personnel. • Six mobile substationtransformers are available for service if needed. • If required, the process for implementing rotating outages has been automated. • The planned sequence of substation outages and the duration of each outage is the same as in the past. Summer Preparedness 2007

19. Summary of Year 2007Projected Conditions • Transmission, SRP generation and planned energy purchases are adequate to serve the forecasted year 2007 demand. • Wildfires are our biggest concern. • Contingency plans are in place to handle emergency events. Summer Preparedness 2007

20. Summer Preparedness 2007