1 Interconnection Update Jay Zimmerman Manager, Transmission Policy Entergy Transmission Planning Summit New Orleans, LA July 8, 2004

2 Interconnection Update Total of 187 requests for Interconnection Studies including cancelled studies and duplicate studies for the same project Currently 0 requests in Queue

3 Interconnection & Operating Agreements (IOA) Entergy has filed over 60 IOAs with FERC for new/existing generating facilities representing approximately 36,000 MW –19 IOAs representing approximately 7,600 MW have been cancelled (some were for existing generation and others were proposed) –3 new generation projects representing approximately 1,760 MW have either suspended construction before completion or suspended operation after completion –Approximately 25,000 MW of new/existing generation is operating/capable of being operated

4 FERC Interconnection Final Rule Order Nos and 2003-A Order No – Standardization of Generator Interconnection Agreements and Procedures issued July 24, 2003 FERC issued a Notice of Extension of Time on October 7, 2003, granting requests to extend the effective date of the Final Rule and the date on which compliance filings were due to January 20, 2004

5 Order No 2003 Compliance Filings For all non-independent Transmission Providers (TP), FERC’s Order No deemed their OATTs to be revised to include the pro forma Large Generator Interconnection Agreement and Procedures on January 20, 2004 Non-independent TPs were directed to make ministerial filings reflecting those revisions to their OATT in their next filings with the Commission Any non-independent TPs seeking a variation from the pro forma LGIP and LGIA based on existing regional reliability standards must inform FERC on or before January 20, 2004 After January 20, 2004, any non-independent TP may separately file proposed changes to its LGIP and LGIA under FPA Section 205 using the “consistent with or superior to” standard

6 Large Generator Interconnection Order on Rehearing Order No A March 5, 2004 “Higher Of” Ratemaking Policy “Where rolling in the costs of network upgrades incurred for an interconnection would have the effect of raising the average embedded cost rate paid by existing customers, the Transmission Provider may elect to charge an incremental cost rate to the interconnection customer and thereby fully insulate existing customers from the costs of any necessary system upgrades. However, under no circumstances may a non-independent Transmission Provider charge an Interconnection Customer both an incremental cost rate and an embedded cost rate associated with existing network transmission facilities.”

7 Order on Rehearing Addresses Pricing Concerns Raised on Rehearing Clarify that the TP continues to have the option to charge the “higher of” an average embedded cost rate or an incremental cost rate for Network Upgrades Clarify that up-front funding and crediting are only to facilitate financing of the Network Upgrades Modify two features of the crediting policy –Credits are required only for transmission delivery service taken with respect to the interconnecting Generating Facility –TP has option after 5 years to return outstanding balance or continue to provide credits based on actual transmission delivery service taken from Generating Facility

8 Types of Interconnection Service Energy Resources Interconnection Service (ERIS) –Provides as-available access to transmission service at Point of Interconnection Network Resource Interconnection Service (NRIS) –Allows Generating Facility to be a Network Resource, subject to congestion; provides a more flexible and comprehensive interconnection service

9 Types of Interconnection Service (Continued) Neither ERIS or NRIS convey any right to the delivery component of transmission service NRIS does not ensure delivery to specific loads or locations TP is able to perform additional studies and require construction of upgrades necessary to fulfill a subsequent request for delivery service TP may propose NRIS procedures that are compatible with regional practices under the “consistent with or superior to” standard NRIS (an interconnection service) is not a replacement for NITS (a delivery service)

10 Entergy Regional Reliability Compliance Filing Pursuant to Order No A Consistent with SERC Planning Standards, ERIS studies will include the requirement that Entergy perform a regional transfer capability analysis Consistent with SERC Planning Standards, requests for ERIS require that the interconnection customer perform a reactive power analysis and provide results to Entergy Consistent with NRC regulations, as part of the Interconnection System Impact Study process a nuclear plant off-site power analysis is required, if applicable