Public Service Company of New Mexico Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Agenda Introduction Agenda Additions Stakeholder Process PNM 10-Year Plan Development Regional Activities Summary of Current Interconnection Study Activity Order 1000 Stakeholder Process Status Other Items Next Meeting PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Introduction Public Stakeholder Meetings Order 890 Objective to improve transparency Involvement of all affected stakeholders Coordinated with WECC processes Reliability – System performance evaluations, reliability standards and coordination. TEPPC – Planning Policy and Economic Evaluations Formalized Stakeholder Input through WestConnect STP Agreement OATT Appendix K defines each utility’s planning process. PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Bi-Annual Meetings March Meeting Study Plan Solicit Stakeholder Input to Plan November 10-Year Plan Review Solicit Stakeholder input on plan and follow-up to be included in next planning cycle Others as needed PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Study Plan Objectives Support Data Base Development for PNM and Regional Studies 2017 (2-yr), 2020 (5-yr), 2025 (10-yr) Maintain Reliability Define Transmission for Native, Network and Point-Point Customers Incorporate Plans Developed Through FERC Processes, NM IRP and Regional Planning Analysis PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Study Scope Review transmission adequacy with network customer updates to designated network resources and load. Determine if new system improvements or adjustments to existing improvements are needed to serve expected obligations. Develop operational mitigations or system improvements to maintain system reliability and associated cost estimates and schedule. Incorporate assessments of economic congestion if applicable. PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Methodology Powerflow Assessments All lines in service Single circuit or transformer contingencies Double circuit contingencies Breaker failure contingencies Short Circuit Analysis Stability Analysis Dynamic Stability Voltage Stability PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Key Assumptions Load forecast Slow growth Effects of energy efficiency, demand response and load side distributed renewables Generation modeled In-Service Under Construction with expected ISD Wind resources Capacity for summer peak based on historical – low contribution Sensitivity cases for high wind periods Committed projects will be included as part of base case assumptions PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Modeling Criteria for PNM Planning Area NERC/WECC Reliability Criteria (included with Study Plan) Line loading criteria Base Case and Post-contingency voltage criteria Minimum voltage stability margin Minimum/Maximum transient voltage and frequency Violations of performance criteria is basis for most system improvements. PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Final 10 Year Plan Facilities Facilities defined in this planning cycle for Native and Network Customer Load Growth and Point to Point Transmission Service Committed projects from other studies: Previous Planning Cycle Transmission associated with an approved IRP Studies performed pursuant to NM IRP rule. Transmission for Generator Interconnections with notice to proceed Studies per FERC requirements New Point-Point Requests with notice to proceed PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Project Additions for 2017 Completed Rio Puerco-Progress 115 kV Line (2014) Under Construction Richmond Switching Station (2016) Rio Puerco 345 kV Station Additions (2015) Rio Puerco-Progress 115 kV Line (2015) Rio Puerco SVC (2015) Yah-Ta-Hey 345/115 kV Transformer Addition (2016) PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

2017 Base Case Northern New Mexico Rio Puerco Expansion and SVC (ISD 2015) Completed Project Planned Project Yah-Ta-Hey Transformer (ISD 2016) Richmond Station (ISD 2016) PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

2017 Base Case Southern New Mexico Alamogordo Replacement Capacitor Installation (ISD 2015) Completed Project Planned Project PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Planned Project Modeled for 2020 2017 Projects plus: Alamogordo Voltage Support Phase 2 PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM 2020 Base Case Additions Southern New Mexico Alamogordo Replacement Capacitor Installation (ISD 2015) Alamogordo Voltage Support Phase 2 (ISD 2018 +) Completed Project Planned Project PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Planned Projects Modeled for 2025 PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

AGING INFASTRUCTURE PROJECTS Spare 345/115 kV Transformer Spare 345 kV Line Reactor Equipment will be energized to support system but can be relocated if needed. PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Additional Information See November, 2014 meeting presentation for additional project details. https://www.oasis.oati.com/PNM/PNMdocs/Open_Planning_MTG_11-06-14_Presentation.pdf 2014 Rio Puerco and Jicarilla follow-up: Requested WECC approval to update Path 48 Definition and Rating in January – in 60 day review period. Received WECC approval for required modifications to WECC RAS PNM-1 in January. PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Timeline February 19 - Draft Study Plan distributed to stakeholders March 1 - Network Customer ten-year projected network load and network resources are due to PNM March 5 - Stakeholder Meeting to discuss study plan. March 30 - Finalize detailed Study Plan and Base Cases March thru July – Complete analysis, develop improvements including descriptions, one-line and cost estimates November 5, 2015 - Stakeholder meeting to review transmission plan and follow-up for next study cycle PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

Stakeholder Discussion Loads and Resources required from Stakeholders. Study Plan Discussion Comments/suggestions by March 19, 2015 PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM Regional Projects High-Plains Express Phase II Completed – no Stakeholder activity in 2014. SunZia Received EIS Record of Decision on January Targeting a 2020 in-service date Tres Amigas Some limited activity to complete preparation for next phase of studies. Lucky Corridor Project modified to single 345 kV line from Gladstone area to Ojo switching station. Completed WECC Project Coordination Review Group report. Southline Project Completing WECC rating process in March Centennial West Clean Line Project Development agreement with Western Area Power Administration Western Spirit Clean Line Project Stakeholder relationships established with Tribal entities, PNM, and private landowners Initiating WECC Project Coordination Review Process PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM 21

PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM Map of Transmission HPX SunZia HPX SunZia Tres Amigas Lucky Corridor Southline Centennial West Alt Western Spirit PNM Open Transmission Planning Meeting March 5, 2015 Albuquerque, NM 22

Interconnection Cluster Activity Summary Fourth Definitive Cluster closed February 16, 2014 Three requests – 415 MW Initial System Impact Studies completed Some restudies required and a Facilities Study process started Fifth Definitive Cluster closed November 13, 2014 Three requests – 148 MW Starting System Impact Studies Fifth Preliminary Cluster open through March 15, 2015 PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM Order 1000 Initiated an abbreviated 2015 Order 1000 Planning Cycle New Planning Management Committee and various subcommittee formed. PMC is currently holding two meetings a month. Planning Subcommittee will be holding regular meetings to work through planning analysis. Cost Allocation Subcommittee expected to start meetings in March. Most non-jurisdictional transmission owners have not signed the new PPA. Awaiting FERC ruling on compliance filing. Targeting completion of a 2024 peak summer base case in March. New planning consultant hired through RFP process and on-board. Energy Strategies PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM

PNM Open Transmission Planning Meeting March 6, 2014 Albuquerque, NM 2015 Order 1000 Schedule PNM Open Transmission Planning Meeting March 6, 2014 Albuquerque, NM

Questions or Comments Don Maez Donald.Maez@PNM.com 505-241-4577 PNM Public Transmission Planning Meeting March 5, 2015 Albuquerque, NM