TRANSMISSION SYSTEM OVERVIEW NETWORK OPERATING COMMITTEE April 17, 2007

1. New Mexico Transmission System Overview TRANSMISSION SYSTEM OVERVIEW NETWORK OPERATING COMMITTEE April 17, 2007

2. Efficient Use of Existing Transmission System • Long-term weather study (8 weather stations) • Increased rating (18%) of transmission lines by using less conservative wind speed assumptions • Real-time monitoring • Installed monitoring equipment to allow for temporary increase of emergency ratings based on actual (as opposed to worst-case) temperature and wind conditions • Traveling Wave Fault Recorders on all 230kV, 345kV line and key 115kV lines • Disturbance Monitors • Bulk transformer online monitoring (oil, temperature, hot spots) • Risk management (Video Sagometers) • Several lines exposed to low-probability, short-duration events have been rated for high-temperature operation

3. Efficient Use of Existing Transmission System

4. Efficient Use of Existing Transmission System • Reactive Compensation & Voltage Support • Series compensation of 345 kV lines • Shunt capacitors • Albuquerque power factor control (RCCS) • Transmission Line Clearance • Over 1500 miles of transmission lines have been phase-raised to remove ground clearance limitations. • Emergency Procedures • Automatic load shedding schemes, as safety net measures, to handle deficiencies in transmission capability during peak usage during scheduled maintenance and forced repairs • Reactor contingency scheme

5. Planning and Operations Criteria WECC/NERC Standards Current System Capability with All Lines in Service (N-0) ·All facilities within normal rating limits ·Voltage levels shall be within normal limits ·Network stability shall be maintained ·All customer demands shall be supplied and all firm transfers shall be maintained Current System Capability with one line out of Service (N-1) ·All facilities within emergency ratings ·No bus voltage drop greater than 5% ·5% Real and Reactive Power Margins ·Transient voltage dip should not exceed 20% for longer than 0.33 sec · Transient frequency dip should not exceed 59.6 Hz for longer than 0.1 sec Current System Capability with two Lines out of Service (N-2) ·All Facilities within emergency ratings ·No bus voltage drop greater than 10% ·2.5% Real and Reactive Power Margins ·Transient voltage dip should not exceed 20% for longer than 0.67 sec · Transient frequency dip should not exceed 59.0 Hz for longer than 0.1 sec WECC/NERC Criteria

6. Generation InterconnectionsA Few Facts • Received 50 generation interconnections since 2000 (42 direct interconnect and 8 are joint studies) • Signed 6 LGIA for a total of 768 MW • 451 MW Wind • 317 MW Gas and Bio Mass • Today’s Queue • 5 Feasibility Studies • 6 System Impacts Studies • 4 Facility Studies • 1562 MW Wind • 1479 MW Gas and Combined Cycle

7. New Mexico Wind Energy Center • Located in Eastern New Mexico • 204 MW capacity • Supplies up to 20% of PNM’s total demand at any given time • Supplies approximately 3.5% on the average • Installed in 2003, in record time! • Owned and operated by FPL Energy • PNM purchases & markets all the output

8. Technical Specifications • 136 towers, each 210 feet tall • Base circumference is > 40 feet! • Wind Farm spread out over 15 miles • Three blades at top of each tower, each 110 feet in length • Facility feeds power onto nearby PNM high-voltage transmission line

9. How Wind Turbines Produce Energy Person on top of rotor • Blades rotate toward the wind • Winds of 6 to 7 mph are enough to turn blades • Blades turn a shaft connected to the rotor of an electric generator • Mechanical components can withstand winds of up to 55 mph

10. PNM Load Pattern (08/03-08/04) Winter Peak Load Spring/Fall Load Valleys Summer Peak Load NMWEC Power Output Pattern

11. Questions?