2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-1 SRP Summer Preparedness 2001 and 2002 Presented to the Arizona Corporation Commission February 16, 2001

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-2 David Areghini Associate General Manager Power, Construction & Engineering Services

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-3 Agenda b SRP system & load growth b Summary of year 2001 and 2002 projected readiness b Resources and reserves b SRP system readiness

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-4 SRP Electric Service Territory Eastern Mining Area Phoenix Peoria Glendale Scottsdale Mesa Tempe Gilbert Chandler Tolleson Litchfield Park Surprise Goodyear Avondale Apache Junction Queen Creek Fountain Hills Paradise Valley

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-5 Expected Load Growth Phoenix Peoria Glendale Scottsdale Mesa Tempe Gilbert Chandler Tolleson Litchfield Park Youngtown Surprise Goodyear Avondale Apache Junction Queen Creek Fountain Hills Paradise Valley 4.5% 18% 3.8% 2.7% 4.2%

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-6 Summary of Year 2001 and 2002 Projected Conditions b Transmission, SRP generation and planned energy purchases are adequate to serve the forecasted year 2001 and 2002 demand b Contingency plans are in place to handle emergency events

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-7 John Coggins Manager Supply and Trading

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-8 Operating Reserves b Protect against loss of generation or transmission resources used to deliver energy to firm load b Targeted reserve levels based on: Amount of firm loadAmount of firm load Largest single hazardLargest single hazard

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS System Reserves

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-10 Summer 2001 Reserves Load (MW) Actual reserves* Reserves Valley Stranded Jul Aug Sep Jun *Meets WSCC and NERC Criteria Meets Southwest Reserve Sharing Group Criteria

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-11 West Wing Liberty Kyrene/Browning/Silverking Mead Navajo Pinnacle Peak Four Corners/Craig/Hayden Coronado SRP Distribution Territory Valley Reserves 421 MW Available Import Capability 0 MW Valley Reserve Shortfall – August 2001 Palo Verde Outside Valley Reserves 215 MW

2/16/ SS-12 SRP Resources SRPOwnedGeneration PurchasedPower SRPForecast Peak Load Reserves 4064 MW 1902 MW Total 5966 MW 5330 MW 636 MW

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-13 SRP Owned Generation – 2001 (Capacity) Coal 1915 MW Nuclear 660 MW Oil & Gas 1260 MW Hydro 229 MW Total 4064 MW

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-14 Fuel Status b Nuclear – Full requirements under contract b Coal All plants currently at or above target inventoriesAll plants currently at or above target inventories Full requirements under contractFull requirements under contract b Natural gas Full transportation requirements under contractFull transportation requirements under contract Retail commodity requirements securedRetail commodity requirements secured Pipeline curtailments anticipatedPipeline curtailments anticipated Fuel oil back-upFuel oil back-up

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-15 Fuel Status b Fuel Oil Critical back-up for natural gasCritical back-up for natural gas Allows plants to continue to operate during gas curtailmentsAllows plants to continue to operate during gas curtailments Increasing inventory levels to meet anticipated requirementsIncreasing inventory levels to meet anticipated requirements Adequate storage capabilityAdequate storage capability

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS System Reserves

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-17 Summer 2002 Reserves Load (MW) Actual reserves* Reserves Valley Stranded Jul Aug Sep Jun *Meets WSCC and NERC Criteria Meets Southwest Reserve Sharing Group Criteria

2/16/ SS-18 SRP Resources SRPOwnedGeneration PurchasedPower SRPForecast Peak Load Reserves 4204 MW 2166 MW Total 6370 MW 5530 MW 840 MW

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-19 John Underhill Manager System Operations

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS System Conditions

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-21 System Improvements 2001 b Projects increasing import and load serving capability Browning 500/230kV receiving stationBrowning 500/230kV receiving station Four 230/69kV transformer additionsFour 230/69kV transformer additions Four new residential substationsFour new residential substations Six 69/12kV transformer additionsSix 69/12kV transformer additions Seven capacitor additionsSeven capacitor additions REKONDZI: Most of the items you have listed help the subtransmission system but I believe only Item 1 (Knox xfmr) & Item 2 (69kV caps) help the transmission system. The 69kV capacitors are the main reason the lower portion of the load serving nomogram has increased from last year. Item 4, SI/GF monitor did not provide any increase in capacity like the WW/AF monitor did. There are some significant maintenance replacement items, relay improvements, WSCC uniform off frequency load shedding, and 500/ /69 Transformer re-ratings that also contribute to increased load serving capability REKONDZI: Most of the items you have listed help the subtransmission system but I believe only Item 1 (Knox xfmr) & Item 2 (69kV caps) help the transmission system. The 69kV capacitors are the main reason the lower portion of the load serving nomogram has increased from last year. Item 4, SI/GF monitor did not provide any increase in capacity like the WW/AF monitor did. There are some significant maintenance replacement items, relay improvements, WSCC uniform off frequency load shedding, and 500/ /69 Transformer re-ratings that also contribute to increased load serving capability

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-22 Load Serving Capacity 2001 N-0 Continuous & Emergency Limit 5831 MW N-1 Continuous & Emergency Limit 5553 MW Forecasted Base Peak 5210 MW Forecasted Upper Peak 5330 MW

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS System Conditions

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-24 System Improvements 2002 b Projects increasing import and load serving capability Kyrene Expansion ProjectKyrene Expansion Project Four 230/69kV transformer additionsFour 230/69kV transformer additions Three new residential substationsThree new residential substations Seven 69/12kV transformersSeven 69/12kV transformers Multiple 230kV & 69kV line upgradesMultiple 230kV & 69kV line upgrades REKONDZI: Most of the items you have listed help the subtransmission system but I believe only Item 1 (Knox xfmr) & Item 2 (69kV caps) help the transmission system. The 69kV capacitors are the main reason the lower portion of the load serving nomogram has increased from last year. Item 4, SI/GF monitor did not provide any increase in capacity like the WW/AF monitor did. There are some significant maintenance replacement items, relay improvements, WSCC uniform off frequency load shedding, and 500/ /69 Transformer re-ratings that also contribute to increased load serving capability REKONDZI: Most of the items you have listed help the subtransmission system but I believe only Item 1 (Knox xfmr) & Item 2 (69kV caps) help the transmission system. The 69kV capacitors are the main reason the lower portion of the load serving nomogram has increased from last year. Item 4, SI/GF monitor did not provide any increase in capacity like the WW/AF monitor did. There are some significant maintenance replacement items, relay improvements, WSCC uniform off frequency load shedding, and 500/ /69 Transformer re-ratings that also contribute to increased load serving capability

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-25 Load Serving Capacity 2002 N-0 Continuous & Emergency Limit 6093 MW N-1 Continuous & Emergency Limit 5803 MW Forecasted Base Peak 5410 MW Forecasted Upper Peak 5530 MW

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-26 System Preparation Major line patrolsMajor line patrols Preventative maintenancePreventative maintenance Pole workPole work Personnel trainingPersonnel training Tree trimming Cable replacement Storm plan Summer substation and line maintenance will be complete by summer

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-27 Emergency Operations and Load Shedding b System Normal b Capacity Critical (Internal) b Capacity Emergency (Stage 1) b Pre-load Shedding (Stage 2) b Rotating Blackouts (Stage 3)

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-28 Concerns b WSCC curtailments b Existing Kyrene units (2002+) b Energy exchange at Glen Canyon b Double contingencies b Voltage collapse

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-29 Significant Near Term Major Transmission and Generation Needs Southwest Valley 500kV Transmission Project (Summer 2003) Santan Expansion Project (Summer )

2/16/2001ACC Energy Workshop – Summer Preparedness 2001 and SS-30 Summary Of Year 2001 and 2002 Projected Conditions b Transmission, SRP generation and planned energy purchases are adequate to serve the forecasted year 2001 and 2002 demand b Contingency plans are in place to handle emergency events