1. MI CNF T/D Page 1 T/D Group Update to CNF Overview of Transmission Transfer Studies Results of CNF T/D Studies – Lower Michigan Group Status Thomas Vitez Director, System Planning International Transmission Co-Chair Michigan Capacity Needs Forum T/D Group May 27, 2005

2. MI CNF T/D Page 2 “Topology” – how many facilities are there and how are they connected? “Capacity” – what are these facilities capable of carrying? “Normal” – amount of flow that can be carried for an indefinite period of time “Emergency” – amount of flow that can be carried for a shorter, defined period of time “Response” – how does the transfer split up amongst the facilities (related to topology) “Normal” – all facilities in service “Post-Contingency” – after facility is outaged “Pre-load” – how much is flow on the lines before transfers? “Base” – starting generator dispatch “Alternative Dispatch” G 200 300 Area A Area B /400 /320 40% 60% 100% 0% X 100% 0% X 0 0 X 100 Factors that Influence How Much Can be Transferred Across the Transmission System

3. MI CNF T/D Page 3 For A to B transfers – Line 1 with G in-service and all transmission in-service 200 MWs rating + 0 MWs pre-existing flow = 200 MWs of capacity available A to B transfers * 40% = 200  A to B transfers limited to 500 MWs for this condition Check -- Flow through Line 1 After Transfer pre-existing flow + percentage of transfer * transfer = Rating of Line 1 0 + 40% * 500 = 200  A to B transfers limit confirmed for this condition G 200 Area A Area B 40% 0 Line 1 Line 2 Determination of Transfer Capability – Simplified Example

4. MI CNF T/D Page 4 For A to B transfers – Line 2 with G out and all transmission in-service 300 MWs rating - 100 MWs pre-existing flow = 200 MWs of capacity available A to B transfers * 60% = 200  A to B transfers limited to 333 MWs for this condition Check -- Flow through Line 2 After Transfer pre-existing flow + percentage of transfer * transfer = Rating of Line 2 100 + 60% * 333 = 300  A to B transfers limit confirmed for this condition G 300 Area A Area B 60% 100 Line 1 Line 2 Determination of Transfer Capability – Simplified Example Continued X

5. MI CNF T/D Page 5 For A to B transfers – Line 2 with Line 1 out 320 MWs rating - 0 MWs pre-existing flow = 320 MWs of capacity available A to B transfers * 100% = 320  A to B transfers limited to 320 MWs for this condition Check -- Flow through Line 2 with Line 1 out After Transfer pre-existing flow + percentage of transfer * transfer = = Rating of Line 2 0 + 100% * 320 = 320  A to B transfers limit confirmed for this condition G Area A Area B 100% 0 Line 1 Line 2 Determination of Transfer Capability – Simplified Example Continued Some More X 320

6. MI CNF T/D Page 6 What is the transfer capability? Line 1 with G in and all transmission in-service – 500 MWs Line 2 with G in and all transmission in-service – 333 MWs Line 2 with Line 1 out – 320 MWs Transfer Limit = Overall Minimum = 320 MWs G 200 300 Area A Area B /400 /320 Line 1 Line 2 Determination of Transfer Capability – Simplified Example -- Wrap Up

7. MI CNF T/D Page 7 Area A Area B With sub-areas Determination of Transfer Capability – Not So Simple Illustration 1 2 3 2 Area C Area D Any facility can limit transfers – including lines between sub-areas Dispatch and load patterns throughout the area impact results – this includes “parallel” transfers Area E

8. MI CNF T/D Page 8 T/D Group Results Lower Michigan – Analysis Performed All transmission in-service + “Base” Generation Dispatch – OR -- One Unit in MECS out One transmission element out + “Base” Generation Dispatch – OR -- One Unit in MECS out Sensitivities Flow changes on Michigan-Ontario Interface Unit outages outside MECS Areas monitored – ITC, METC, AEP, NIPSCo, FE Assumptions include – Sufficient Generation Outside of MECS to “fill the pipe”

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16. MI CNF T/D Page 16 Transmission/Distribution Work Group Status Transfer Capability Results Published for Lower Michigan Transmission Upgrades Scenarios for Lower Michigan Identified and Analyzed Remaining Work Complete Review of Potential Voltage Limits Publish Results for Upper Michigan Analyze Off-Peak Conditions Issue Report Continue Work with Other CNF Groups Questions? Transmission/Distribution Work Group Status