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Lower Rio Grande Valley345 kV lineERCOT Regional Planning GroupMay 13, 2011Prepared by AEPSC on behalf of ETT

South Texas TransmissionInfrastructure Drivers for development– Shrinking windows for maintenance/clearances– Availability of generation during high demand– Development of infrastructure along the border Staging the plan for South Texas––––Completion of San Miguel to Laredo Lobo in 2010Linking Laredo to the ValleyMaximizing delivery capability of existing systemClosing the loop within load pockets South Texas Transmission Infrastructure Benefits– Enabling access to economic resources and renewable energy– Laredo: Two is better than One– Valley: Three is better than Two5/13/2011Prepared by AEPSC2

Drivers for development Shrinking windows for maintenance and/or clearances– N-1-1 windows are practically limited to March and November– Operational load forecast for February 4th did not anticipate the needfor all generation in the Valley– 345 kV line clearances to replace corroded components nearlydisplaced STEC 138 kV upgrades within the Valley Availability of generation during high demand– Only one plant is located on the east side of the Valley– Recent information creates the need to plan for a plant outage– Valley import level exceeded security limit an average of 6 days peryear for the last four years resulting in high scarcity pricing– Forward looking CRR pricing anticipates further congestion Development of infrastructure along the border– Within ten years infrastructure additions will be needed in Laredo– Over 1 GW of wind has already connected in South Texas– Over 1 GW of new wind is negotiating interconnection agreements5/13/2011Prepared by AEPSC3

Staging the plan for South Texas Completion of San Miguel to Laredo Lobo– Relieved RMR in Laredo in 2010– Reversed power flow into Valley from west improving voltagestability for Valley Linking Laredo to the Valley– The Cross-Valley 345 kV line enabled the two existing 345 kVlines to share import into the Valley– Similarly, the Laredo to Valley 345 kV line enables both loadpockets to share import among three lines– As a result, Voltage Stability limits are elevated well beyondthermal constraints5/13/2011Prepared by AEPSC4

Proposed Laredo to Valley 345 kV Project5/13/2011Prepared by AEPSC5

Power/Voltage Profile for Ajo to Rio Hondo 345 kVline contingency and one unit unavailable2015 Peak LoadProposed Plan300 MW Increase300 MW Increase(25% alley Load5/13/2011Prepared by AEPSC6

Linking Laredo to the ValleyInterface betweenSouth Texas andERCOTInterface betweenEast and Westsides of the ValleyRelief of localizedconstraints withnew infrastructure5/13/2011Prepared by AEPSC7

Staging the plan for South Texas Maximizing delivery capability of existing system– The existing Valley 345 kV lines are undersizedrelative to the new third line– High temperature composite core conductor canvirtually double the rating of the existing lines– Series Capacitors can be reconfigured to double therating, at half compensation level– Due to improved voltage stability and new SSCIissues, lower compensation is viable– Lower compensation improves the thermal importlimit by balancing power flow between existing lines– Potentially, Lon Hill to Nelson Sharpe to Ajo to RioHondo 345 kV line may be rebuilt due to corrosion5/13/2011Prepared by AEPSC8

Staging the plan for South Texas Closing the loop within load pockets– Third line from Laredo to the Valley enableslocalized loops to serve growth within loadpockets Lobo to Rio Bravo relieves voltage collapse onsouth side of Laredo Del Sol to Frontera relieves contingency overloadsin McAllen– Future loop within the Valley addressessupport of the eastern end5/13/2011Prepared by AEPSC9

Loss of the Gateway to University / North Laredo doublecircuit 138 kV line results in voltage collapseProposed 138 (345) kV lineDouble Circuit 138 kV line contingencyArea of Voltage CollapseFeed from Valley at Roma5/13/2011Prepared by AEPSC10

LRGV West Side ConstraintDel SolContingency:NEd to Pharr /WEd 138 kV lineDel SolLimiting Element: HECto SEd 138 kV lineG-1: 2682 MW (2016)P-1: 2573 MW (2015)5/13/2011Prepared by AEPSC11

Second Cross-Valley line linksEast and West sides of the LRGVSAN MIGUELLOBODouble CircuitNew LineRIO BRAVO345 kV138 kV69 kVNew StationExisting StationDouble CircuitCapableDEL SOL NORTHEDINBURGDouble CircuitCapable2/15/115/13/2011FRONTERADRAFT REV 1Prepared by AEPSCRIO HONDO312

South Texas TransmissionInfrastructure Benefits Enabling access to economic resources and renewableenergy– Enables the transfer of power in and out of South Texas andlowers marginal costs to consumers– Improves access to low cost wind resources that contributeacross peak load periods– Creates infrastructure that allows ERCOT and CFE to sharecapacity during periods of scarcity5/13/2011Prepared by AEPSC13

Improves access to low cost wind resourcesthat contribute across peak load periodsNorth LaredoUniversityLoboGatewayWormserSanto NinoRio BravoSierra VistaCFERandadoSan YgnacioWind RegionsZapataEnables Capacityexchange betweenERCOT and CFEduring scarcityLopenoFalcon SSRoma SSCFE5/13/2011Prepared by AEPSC14

South Texas TransmissionInfrastructure Benefits Laredo: Two is better than One– Load growth in Laredo is limited to 600 MW (2021) assumingavailability of one of two combustion turbines– Load growth in Laredo is limited to 500 MW (2013) assumingavailability of neither of the two combustion turbines– Extreme Summer peak demand can achieve 600 MW in 20185/13/2011Prepared by AEPSC15

Existing Transmission SystemLoad Serving Capability in Laredo105%% Emergency %Lobo to San Miguel 1/2 MVEC (578 MW)Lobo to San Miguel Laredo #4 (600 MW)80%Lon Hill toStratonStraton toKRPGPearsall toPalo DuroDilley toCotullaCotulla toEncinal138 kV Limiting Elements5/13/2011Prepared by AEPSC16

(G-1)2011 Laredo Area Summer Peak LoadForecast at Varying Probability Intervals5/13/2011Prepared by AEPSC17

(P-1)2011 Laredo Area Winter Peak LoadForecast at Varying Probability Intervals5/13/2011Prepared by AEPSC18

South Texas TransmissionInfrastructure Benefits Valley: Three is better than Two– Opening clearance windows enables upgrades toexisting Valley 345 kV lines N-1-1: clearance on the Ajo to Rio Hondo and contingency ofthe Lon Hill to North Edinburg Current 138 kV constraint of 300 MW doubles to 600 MWwith the third 345 kV line– Combined effect of new line with upgrades to existinglines doubles import capability Constraint: One Valley 345 kV line overloads the remainingValley 345 kV line Voltage stability limits are well in excess of thermal limitations5/13/2011Prepared by AEPSC19

Opening clearance windows enablesupgrades to existing 345 kV lines to ValleyValley - Historical Peak Days and ProbabilitiesBased on Valley Load Data excluding PUB since 199690%15%14%Increasing N-1-1 importcapability by 300 MW (10%)doubles the windowavailable for clearances80%12%Percentage of Annual Peak70%11%Historical Maximum ofDaily Peak as a Percentageof Annual PeakProbability of being theAnnual FEBMARAPRMAYJUNJULAUGPrepared by AEPSCSEPOCTNOVProbability of being the Annual Peak100%DEC20

Existing Transmission SystemLoad Serving Capability in the ValleyKenedy Wind Farm generation at 600MW3000252325002623258827332688267824882271 22512370 23162331 2286234324112336MW Level200015001000North Ed to Lon Hill Out G-1Rio Hondo to Ajo Out G-1North Ed to Lon Hill Out P-1500Rio Hondo to Ajo Out P-1050%33%17%0%Compensation Levels5/13/2011Prepared by AEPSCVC21

Existing Transmission SystemLoad Serving Capability in the ValleyKenedy Wind Farm generation at 100MW280027262691270026512601MW Level260025002416243623762400231623002200North Ed to Lon Hill Out G-1North Ed to Lon Hill Out P-1210050%33%17%0%Compensation Levels5/13/2011Prepared by AEPSC22

2011 Texas Valley* Area Summer Peak LoadForecast at Varying Probability Intervals3,500Actual3,250Weather Normalized (50/50 Peak)Mar 2011 Forecast (50/50 Peak)70/30 Peak2,75090/10 Peak99/1 Peak2,500(G-1)Summer Peak Demand in MW3,0002,2502,0001,7501,5001,250(Source: http://www.ercot.com/news/press releases/2010/nr-11-17-10# Toc277772169).90/10 Peak probability meansthere is less than a 10% chancethe peak will be above thisvalue.1,0001996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*Valley includes PUB. PUB data obtained from a presentation for the ERCOT Regional Planning Group "Cross Valley RPG Report 05-01-11 Final.pdf"50/50 Peak70/30 Peak90/10 Peak99/1 032,868Prepared by 023

2011 Texas Valley* Area Winter Peak LoadForecast at Varying Probability Intervals3,500Actual3,250Weather Normalized (50/50 Peak)Mar 2011 Forecast (50/50 Peak)3,00090/10 Peak99/1 Peak2,5002,250(G-1)Winter Peak Demand in MW70/30 Peak2,7502,0001,7501,50090/10 Peak probability meansthere is less than a 10% chance thepeak will be above this value.(Source:http://www.ercot.com/news/press releases/2010/nr-11-17-10# Toc277772169).1,2501,0001996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021*Valley includes PUB. PUB data obtained from a presentation for the ERCOT Regional Planning Group "Cross Valley RPG Report 05-01-11 Final.pdf"50/50 Peak70/30 Peak90/10 Peak99/1 ,8373,05620162,6262,7382,9003,123Prepared by 024

Need for Critical StatusLobo - Del Sol - North Edinburg 345kV Transmission LineExpedited Schedule (May 10, FILE CCNPROJECT AUTHORIZATION2Routing StudyPlanning / Kick off3MARCH 1, 20162011CCN ApprovalROW AcquisitionConstructionFunctional Scoping,Project Development,Contracts, ScheduleCreateStudyAreasAerial SurveysCreateRoutesOpenHousesEnviron. Assessment & Routing Study(12 Months)CCN Approval(6 Months)EntryPermitsBound. Surveys & Plat Creation(10 Months)ROW Negotiation & Purchase(18 Months) Project team assembled and studies kicked off by end of May 2011. Major contractors identified and contracts expedited to begin work. Use of internet available aerial data and accept risk of low resolution and noncurrent photography for routing studies. Expedited testimony for CCN application. Possible additional costs to expedite schedule. Require immediate ERCOT RPG endorsement and designation as “CriticalClassification” of project. PUCT to provides approval within 6 months after filing CCN. Right of entry obtained and survey begins before CCN is approved. Begin clearing and road construction in advance of all ROW secured. Multiple construction fronts with accelerated construction schedule with possibleincrease in costs. Excellent construction conditions including good weather to yield no constructioninterruptions.Project Target Completion Date1CondemnationsEngineering &ProcurementROW Clearing &Road Construction (11 months)Line Construction ( 20 months)5/13/2011Prepared by AEPSC25

Upgrading Existing 345 kV systemfrom 2000a rating to 4000aSAN MIGUELReconductor LH-NS345 kV line w/LHupgrades: 15MLOBO345 kVAdditional SC atRio Bravo: 25M138 kV138 kV PST @Loyola: 5M69 kVReconductor NS-AJ345 kV line: 20MDouble CircuitCapableExisting StationReconductor LH-NE345 kV line w/LHupgrades: 55MReconfigure2/15/11 NE 345 kVSC w/NE upgrades: 20M5/13/2011NORTHEDINBURGDouble CircuitCapableDRAFT REV 1FRONTERAPrepared by AEPSCReconductor AJ-RH345 kV line: 30MReconfigureRH 345 kV1SC w/RH upgrades: 20M26

Valley Load served by Stage with300 MW of generation 5932643ExistingSystemLobo to Valley( 410)AJ-RH RC( 50M)250020001500100050005/13/2011LH-NE RC( 75M)Prepared by AEPSCNS-AJ RC( 20M)LH-NS RC( 15M)Cross-Valley27

Valley Load served by Stage with600 MW of generation unavailable45004000350034513500LH-NS RC( tingSystemLobo to Valley( 410)AJ-RH RC( 50M)20001500100050005/13/2011LH-NE RC( 75M)Prepared by AEPSCNS-AJ RC( 20M)28