1. THE TRES AMIGAS SUPERSTATION Southwest Renewable Energy Conference Santa Fe, NMSeptember 16 th 2010 UNITING THE NATION’S ELECTRIC POWER GRID

2. 1 The Location: Regional Renewable Resource Potential Significant Regional Wind & Solar Capacity Factors in Excess of 35% Source: NREL

3. 2 The Location Tres Amigas Is Ideally Situated in Eastern New Mexico Near the Borders of CO, OK and TX Serving as a Three-Way Interconnection of WECC, Eastern and ERCOT

4. 3 Next Step – The Evolution to Fast Acting HVDC The only way to interconnect large AC power grids with different phases is via HVDC (High Voltage Direct Current) facilities – AC/DC/AC Stations – Hybrid Transmission systems (AC/DC…DC/AC) – Multipoint nodes – Long distance DC Transmission lines HVDC has the ability to control the direction and magnitude of the power flow at each node of a multipoint configuration thereby facilitating the precise needs of the interconnection points without adverse impacts to the interconnecting grid HVDC has the flexibility not only to adapt to grids with different AC system real time characteristics but to also facilitate optional ancillary services to each interconnection node

5. 4 From the 2010 Transmission Summit in Sweetwater 4 w/ HVDC Proposals

6. 5 The Tres Amigas SuperStation

7. 6 Project Objectives Connect the three U.S. synchronous power grids through a DC Hub that can regulate the direction and level of power flows between the grids, thereby improving the efficiency of the transmission systems in all regions Provide economic incentives to further drive the growth of the nation’s transmission grid by expanding opportunities for efficient transactions across currently inaccessible market regions Optimize the value of existing AC infrastructure by utilizing state of the art technology Provide reliable and cost effective transmission services consistent with NERC standards and regional reliability requirements Tres Amigas Will Present Significant Opportunities for the Grid

8. 7 Project Benefits Enable the buying, selling and physical delivery of electricity between participants in multiple grids Optimize the performance of renewable energy sources by offering or creating options to firm intermittent power across a broad geographic area Promote the development of renewable energy projects by creating an opportunity for such projects to connect to multiple high demand load areas Enable renewable energy to follow hourly demand fluctuations throughout a large portion of North America Integrate large scale renewable resources by providing the capability to manage real-time power fluctuations that would otherwise exceed the capability of many existing balancing authorities Tres Amigas Will Present Significant Opportunities for Renewables

9. 8 Technology Breakthroughs: Converters The latest proven technology in converters - Voltage Source Converter (VSC) technology will be used – VSC control systems determine both power levels and direction and are able to vary power levels from +100 percent to -100 percent incrementally (as desired). VSCs do this without any converter function interruption (IE, switching to AC) or equipment interruption (switching shunt banks or filters) – Unlike traditional converter technology, VSC design supports the multi-terminal ring design goals of Tres Amigas and can be scalable – The VSC converters make power control flow changes rapidly and accurately – Dispatch control is significantly improved and simplified thereby improving the performance and efficiency of the interconnected AC networks

10. 9 Technology Breakthroughs: Converters Operational VSC design advantages include: – VSCs can independently control real power in either direction and supply reactive power, thereby stabilizing frequency and voltage – Unlike traditional converters, VSC converters have black start capability – The VSC converter system responds rapidly to AC faults and system disturbances – The voltage support capability of VSC converters reduces AC transmission system losses

11. 10 Interconnect Opportunities Potential Reliability Benefits – Power oscillation dampening – Direct voltage control – Real time power flow solutions via active and reactive measures Emergency Support Value – Black start capabilities – Facilitation of sharing of spinning reserve – Emergency imports/exports Cost Benefit Analysis – Increase of power transfers and line capacity – Capability to implement targeted solutions – Dynamic Voltage Support reduces line losses

12. 11 Interconnect Opportunities Consider the Value of opening new markets to those renewables that who you cannot physically handle – Allows increased Economic Development within the renewable rich areas – Ability to reach National RPS Goals – Creates a robust transmission system with lower transmission costs Consider the Value of opening new access to renewables for the regions that have limited renewable resources – Ability to meet state, board, or national requirements – A diversified mix of renewables to an area – Access to lower cost renewables then before (supply and demand) Inter-interconnect opportunities – Look at the time of day diversity benefits – Look at the neutering of the intermittent issues – Reappraise the value that the existing transmission can have

13. 12 Renewable Developer Opportunities New developers – Evaluate the new market areas – Develop new strategies – Creates a robust transmission system with lower transmission costs Existing renewables – Ability to redirect excess generation For the new and old – There will be a new energy hub in this area – what value will this bring? – Look at the neutering of the intermittent issues – Develop multilateral contracts with other renewables or fossil fuel generators to increase value of product – Analyze value of having a shared renewable storage system (ie Battery Storage) at a central point (ie Tres Amigas) that could be used for different firming options considering the different regional production patterns

14. 13 Expected Results An optimization of today’s transmission lines – Increased capacity – Higher efficiencies An acceleration of new transmission lines – Economic justification – Accomplished through a Coordinated and Planned Approach An optimization of the country’s natural resources – A very “Smart” approach A National Approach

15. 14 Tres Amigas SuperStation…. Uniting the Electric Grid