Long-Term Solution for Negative Generation Entergy Transmission AFC Stakeholder Meeting August 22, 2006

Negative Generation Issue Where reservations/resources exceed load and taking all oil and gas units off-line does not eliminate the mismatch Primary cause is increased impact of OATT reservations (including imports) on internal dispatch Mostly off-peak hours where the load is decreased and/or where OATT reservation levels are particularly high, although some on-peak hour instances

Proposed Resolution “Dispatching” Reservations to Prevent Negative Generation  Software Changes  Network Customer Input  Default Dispatch Methodology Preliminary Estimate of Implementation Time: 3-6 Months After Vote on Proposal

Next-Steps From July 20 Meeting Comments from Stakeholders  Have not received any comments to date Discussions with Network Customers  Determined feasibility of additional information requirements and have modified proposal with “Stack” option (discussed below) Software Discussions with AREVA  Confirmed viability of modified proposal Summary of Final Proposal to Stakeholders  Today’s meeting Entergy Management Approval

Software Changes Modeling of all OATT reservations at specified levels (including levels below the reservation amount) for each hour of the next 168 hours.  This aspect of proposal is unchanged. Customers will have the option of submitting “Hourly Format” dispatch file Reductions to net interchange (imports) and internal- source network service reservations on an hourly, pro rata basis, i.e., scaling reservations Decrementing the PMax flowgate (for internal resources) and the Contract Path flowgate (for internal and external resources) based on the level of service reserved, not the dispatch level in the models.

Modified Proposal All network customers, including EMO, will have the option of submitting dispatch information in one of three formats:  the Hourly Format  the Stack Format  the Combined Format The choice of which format to use will be left to the network customer If the network customer does not provide information that complies with the requirements for either option, the Default Format will be used to model service to that customers load

Three Dispatch File Formats Stack Format – all OASIS reservations arranged in economic order or “stacks” that reflect the dispatch priority of confirmed network resources Hourly Format – forecasted hourly dispatch for all confirmed network resources, but cannot exceed hourly load Combined Format – both Hourly and Stack Format.  Hourly Format serves as “unit commitment” or base dispatch, with additional OASIS reservations modeled through Stack Format.  Allows customers to specify a portion of their dispatch and RFCALC to fill in the rest.

Additional Requirements Forecasted hourly load for each hour of the next 7 days, (Days 1-7) and forecasted peak-hour load for each day of the next 24 days (Days 8-31) Dispatch must be sufficient to meet load Only network resources will be dispatched as serving network load

Dispatch Process Hourly Format – RFCALC will dispatch the reservations as specified in the file Stack Format – RFCALC will dispatch the reservations sequentially in economic order until the load requirements are met Combined Format – RFCALC will dispatch the reservations as specified in the Hourly Format file and will use the reservations identified in the Stack Format file to meet load to the extent there is short fall

Default Format If customer fails to submit required information, RFCALC will create a proxy for the Hourly and Stack Format files Proxy Hourly Format – long-term network resources dispatched to meet load Proxy Stack Format – short-term network resources arranged in economic stack according to reverse queue order Dispatch process for Combined Format use

Reservations Not Modeled in Base Case Decremented against the PMax flowgate and the Contract Path flowgate Considering whether top-15 should also be decremented Decremented impacts associated with unscheduled service would be released day-ahead The customer would retain the right to schedule all reservations (subject to real-time limits) regardless of whether the reservation was “dispatched” in the base case.

Comparison with July 20 Proposal July 20 Proposal discussed two options  Network Customer Input – hourly dispatch file  Pro Rata Default Method Still relying on Network Customer Input Created additional “Stack” and “Combined” options Instead of “Pro Rata” Default methodology, will create proxies for Hourly and Stack Format options Still addressing unconfirmed-accepted reservations – no longer modeled

Next-Steps Need Comments from Stakeholders Formal Vote on Proposal Finalize Software Design With AREVA Entergy Management Approval

Scope of the Sensitivity Analysis  Contingency Weber – Wells 500kV Line  Peak Case With Nelson units online at minimum generator MW output With Sabine units online at minimum generator MW output  WOTAB Winter Peak Case  Solutions to be Evaluated 300MVAR SVC at Hartburg 500kV 50% Series Compensation  Results of the study will be presented at the next meeting Study to Address Mt. Olive – Hartburg Proxy Rating