1. Western Electricity Coordinating Council 1 WECC MIC Meeting Report on Operating Transfer Capability Policy Committee (OTCPC) Marina Del Ray October 30 & 31, 2008

2. Western Electricity Coordinating Council 2 Major Topics I.2008-09 Winter Study Results  California / Mexico Subregion  Northwest Subregion  Rocky Mountain Subregion  Southwest Subregion  Time Line Implementation II.Future Role of OTCPC III.MIC Issues / Comments

3. Western Electricity Coordinating Council 3 California / Mexico Subregion – Winter 2008-09 The increase in SCIT is mainly due to the new Miguel – Sycamore #2 230 kV line, which came in service late 2006, the new Miguel – Old Town 230 kV line, and 2x63 MVAr shunt capacitors at Miguel 230 kV. Path NamePath Numbe r Rating (MW) Proposed 2008-2009 Winter SOL (OTC) (MW) 2008 Summer SOL (OTC) (MW) 2007-2008 Winter SOL (OTC) (MW) California COI (N-S) 664800 (N-S) PDCI (N-S) 653100 (N-S) Midway - Los Banos (S-N) 155400 (S-N) SCIT NA1936515,150*16,200*15,150* Midway - Vincent (N-S) 264000 (N-S)

4. Western Electricity Coordinating Council 4 Northwest Subregion - Winter 2008-09

5. Western Electricity Coordinating Council 5 Rocky Mountain Subregion – Winter 2008-09 * WITH NUCLA AT 80 MW AND SW COLO LOAD 100 MW ** Miracle Mile-Laramie and Beaver Creek-Hoyt Construction Outages *** Snowy Range-Cheyenne Construction Outages PathWECC Path Number Rating (MW) 2008-09 Winter OTC (MW) 2008 Summer OTC (MW) 2008 Spring OTC (MW) 2007-08 Winter OTC (MW) TOT1A30650615614650 TOT2A31690660* TOT3361605153815421506*** TOT5391680

6. Western Electricity Coordinating Council 6 Southwest Subregion – Winter 2008-09 PATH NAME WECC PATH NUMBER RATING OF PATH (MW) 2008-09 WINTER SOL (MW) 2007-08 WINTER SOL (MW) 2008 SUMMER SOL (MW) Four Corners West222325MW Nominal (Nomogram) 2325MW Nominal (Nomogram) 2325MW Nominal (Nomogram) 2325MW Nominal (Nomogram) Cholla-Pinnacle Peak501200MW

7. Western Electricity Coordinating Council 7 Implementation Time Schedule These limits apply to the 2008-09 winter operating season starting Nov. 1, 2008, and ending no later than March 31, 2009 pending completion of: –The Operating Procedures Review Group’s acceptance of the associated summer operating procedures for each of the interties and those operating procedures (including system monitoring and curtailment responsibilities) being implemented, and –Operating training and direction required to ensure operation within the established operating limits.

8. Western Electricity Coordinating Council 8 Future of OTCPC OTCPC is working on a draft resolution to terminate, reformat or suspend the OTCPC because the implementation of FERC Mandatory Reliability Standards renders the current OTCPC structure no longer necessary or appropriate OTCPC was formed as, –“the result of “lessons learned” from the July/August 1996 Western Interconnection disturbances.” “The purpose of the OTCPC is to provide coordinated standard development and determination of seasonal OTC’s within the Western Interconnection. The goal is to promote communication and common study methodologies among the region transmission providers and customers and provide the highest level of transmission capacity consistent with the reliable operation of the overall WECC transmission grid.” OTCPC handbook, April 2007

9. Western Electricity Coordinating Council 9 Future of OTCPC – NERC Reliability Standards NERC has defined a System Operating Limit (SOL) which is inclusive of the WECC defined Operating Transfer Capability (OTC). Hence, SOL will be utilized instead of OTC in the following text. NERC Definition: –System Operating Limit (SOL): The value (such as MW, MVar, Amperes, Frequency or Volts) that satisfies the most limiting of the prescribed operating criteria for a specified system configuration to ensure operation within acceptable reliability criteria. System Operating Limits are based upon certain operating criteria. These include, but are not limited to: 1.Facility Ratings (Applicable pre- and post- Contingency equipment or facility ratings) 2.Transient Stability Ratings (Applicable pre- and post- Contingency Stability Limits) 3.Voltage Stability Ratings (Applicable pre- and post- Contingency Voltage Stability) 4.System Voltage Limits (Applicable pre- and post- Contingency Voltage Limits)

10. Western Electricity Coordinating Council 10 Roles of OTCPC – Is it appropriate or not? Determine which transmission paths are to be studied and approve/disapprove seasonal studies of OTC limits performed by the Subregional Study Groups; but –The TP has the responsibility to determine all SOLs –The recently adopted MOD standards provide which Bulk Electric System facilities must be studied. The adopted standard extends to facilities beyond those currently reviewed by the OTCPC. Ensure that the subregional studies are held to the same standards, level of work required and study methodologies; but –The WECC RC has developed an SOL Methodology according to FAC-011, and all TPs are required to adhere to the SOL Methodology for their applicable Reliability Coordinator Area.

11. Western Electricity Coordinating Council 11 Roles of OTCPC – Is it appropriate or not? – cont. Facilitate OTC dispute resolution Recommend policy positions to the Board Review and approve Subregional seasonal study plans and technical simulation results Develop policies and procedures addressing seasonal OTC’s Address OTC seams issues between subregions Provide technical guidance

12. Western Electricity Coordinating Council 12 Future of OTCPC – Options to Consider Option 1: Status Quo – Continue with the OTCPC with current reporting structure and duties, responsibilities, and functions. However, review duties, responsibilities, and functions with respect to the NERC Reliability Standards and modify as appropriate. Option 2: Report to WECC Reliability Coordination Committee, and review duties, responsibilities, and functions with respect to the NERC Reliability Standards and modify as appropriate. Option 3: Recommend to the WECC Board that the OTCPC disband due to the FERC mandatory NERC Reliability Standards superseding the need for OTCPC approval and otherwise becoming obsolete as discussed above, replacing each of its key coordination functions under the OC / RCC and the policy - approval functions under the RPIC duties.

13. Western Electricity Coordinating Council 13 MIC Issues? QUESTIONS or COMMENTS