Status Update for Reliability/Market Power Mitigation Assessment Stakeholder Meeting April 16, 2008 Austin, TX

Reliability & Market Power Mitigation Study Model : Status Update Data collection effort in process SPP has received most of the input from ETI with two conference calls to discuss the data Last set of data was recently received by ETI (SPP is still reviewing it) Study case will be ready by April end (Reliability Study) and by May end (MP Mitigation Study) for stakeholder review

Reliability Study Model : Key Inputs Generation Inputs Two new generating plant to serve ETEC load (150 MW each) at Cypress and Jacinto Cottonwood plant will be considered in Eastern Interconnect Sensitivity to be run with Cottonwood connecting into ERCOT Transmission Inputs ETI’s 2008-2010 construction plan STEP plan (2008-2017) approved by SPP BOD Transactions (Interchange) Latest transactions (interchange) for 2012 based on ETI and SPP’s OASIS Only Long-term Firm transactions will be considered

Reliability Study Process : Key Inputs SPP-ETI Transfer Scenario Units in SPP footprint are ramped up based on reserve capacity Units in ETI will be backed down based on heat rate characteristics RMR units in ETI will be backed down when other units reach their minimum limit Units not owned/operated by ETI will not backed down Contingencies Examined Breaker to Breaker in ETI 100 kV and higher outside ETI 100 kV and higher in SPP Monitored Transmission Facilities 100 kV and above in SPP, ETI and Rest of Entergy Interfaces, identified flowgates

Market Power Mitigation Study : Key Inputs The latest version of PROMOD IV with 6 digit bus numbers will be used Generation Details ETI : Publicly available data based on typical characteristics SPP: Actual Data as provided by SPP members RMR details will be modeled using Proxy approach (key interfaces, flowgates) Typical Load shape will be used for ETI for hourly load forecast in study year (2012) Fuel price data and other inputs will be coordinated with ERCOT for consistency

Time Line Final input data will be ready by April end Study Models Finalized Reliability Assessment Study Model : April 2008 MP Mitigation Assessment Study Model : May 2008 Preliminary Results Expected Reliability Assessment : July 2008 MP Mitigation Assessment : September 2008

Questions?

Mak Nagle Manager, Technical Studies and Modeling 501-614-3564 mnagle@spp.org