0. AES Trans-Elect Presentation to WIA Board & State Transmission Authorities
Independent Transmission Development in Independent Transmission Development in Support of State Transmission Authorities
July 1-2, 2008

1. Mission Statement
Trans-Elect, with the support of AES, is committed to expanding America’s electric transmission grid in the furtherance of public policy, increased reliability, and access to remote resources.
As an independent transmission owner, Trans-Elect promotes the regulatory objectives of open, non-discriminatory access to the nation’s electricity system, while providing cost-effective, reliable service and electric grid expansion.

2. Introduction to AES Trans-Elect
AES TE – The Partnership Company
Path 15 with Western Area Power Administration and PG&E
Wyoming Colorado Intertie with Wyoming Infrastructure Authority
High Plains Express with 9 public and private stakeholders
TE – Financed over $1 billion in transmission projects
TE – Owned and/or Operated nearly 13,000 miles of high voltage transmission

3. Trans-Elect Development Company LLC
The nation’s 1st independent transmission company
2002: Acquired METC (Michigan) and an interest in AltaLink (Alberta)
2004: Developed Path 15 in California
2005: Wyoming-Colorado Intertie Public/Private Partnership
Wyoming Infrastructure Authority & Western Area Power Authority
2006: Partnership with AES to develop/acquire transmission
2007: High Plains Express Project: WY-CO-NM-AZ
Current Projects:
Wyoming-Colorado Intertie
High Plains Express
Other unannounced projects focused on renewable development
Active in public policy development: WREZ, CREZ, WGA
Offices in Bethesda, Chicago, and Denver

4. Path 15 Project Summary
Tesla
Oregon
California
Lake
Malin
Captain
Jack
COTP AC
INTERTIE
Tracy DC
Vincent
Olinda
Table
Mountain
Round
Los
Banos
Gates
Path 15
Midway
Tahoe
San Francisco
Public-private partnership with Western (DOE), PG&E, and Trans-Elect
83-mile, 500-kV line to eliminate a long-standing transmission constraint between N-S California
Total development cost $250 M for a new 500-kV transmission line and substations
FERC approved ROE 13.5% and CAISO is sole customer
Construction started in September 2003 with commercial operation December 2004
Trans-Elect’s share of project costs of $194 million were under budget

5. Michigan Electric Transmission Company
Purchase price - $288 million May 1, 2002
Assets - 5,400 miles of transmission lines in Michigan
Investors - Trans-Elect as general partner with equity investment from GE Capital. Debt raised by Deutsche Bank and CIBC
Seller’s rationale - Strengthen balance sheet and use sale to focus strategy

6. AltaLink Summary
Purchase price - $570 million (C$860 million) on April 29, 2002
Assets - 7,200 miles of transmission lines in Alberta, Canada
Investors – Trans-Elect and SNC-Lavalin as 50/50 general partners with equity investments from Ontario Teacher’s Pension Plan Board and Macquarie Bank
Seller’s rationale - Become a pure generating company (previously divested distribution assets)

7. Trans-Elect’s Partner: AES Corporate Overview
28 countries on 5 continents
121 generation plants • 13 utilities
Alternative Energy leader
30,000 people worldwide
25 years of project development experience
Diverse technologies and fuel mix
Entrepreneurial learning culture 7

8. AES 2006 Financials Net cash from operating activities Revenues
Gross margin
$12.6 billion
$3.6 billion
$2.4 billion

9. Broad global footprint
The capacity to serve 100 million people
28 countries
5 continents
116 generation plants
13 distribution businesses
42,000 MW installed generation capacity annual distribution sales of over 73,000 GWh

10. DC Ties (all ~ 200 MW
except 600 MW)
Interconnection Boundary

11. Transmission Authorities fill Gaps in RTO Coverage11

12. WECC Transmission Projects Under Development
Juan de Fuca Cable
BPA transmission
Northern Lights
Montana Alberta
Tie Line
Southern Crossing
Mountain States
Canada –Northwest -
California (CNC) Project
PacifiCorp Energy Gateway
Hemingway to Boardman
TransWest Express Project
West Coast Cable
White Pine-Midpoint
Wyoming-Colorado
Intertie Project
Harry Allen-
Robinson Summit
En-ti (Ely-Harry Allen)
Miracle Mile-Ault
Regional Planning Process
Path Rating Process
Progress Reporting Process
High Plain Express
Central California Clean
Energy Transmission Project
Eastern Plains
Tehachapi Project
Colorado-New Mexico
Interconnection Project
Lake Elsinore
Advanced PSP
Navajo Transmission
Project Segment 1
Green Path Project
IV-San Felipe
Indian Hills - Upland
SunZia
Palo Verde–Devers II
Sunrise Powerlink
Palo Verde – North Gila II
Project

13. Wyoming Transmission Projects
Including Two Public/Private Partnerships involving Trans-Elect
(courtesy of the Wyoming Infrastructure Authority)

14. Wyoming-Colorado Intertie (WCI) Project
Recommended by RMATS
TOT3 Constraint
6 Lines w/ 1,600 MW Capacity
Public/Private Partnership
Wyoming Infrastructure Authority, Trans-Elect & WAPA
Feasibility Studies Complete
Phase 1 WECC path rating
Open Season Process
July 31 Auction Date
~2013 on-line date
WIND
75 miles
230 kV
425 MW
180 miles
345 kV
850 MW
New Lines Under Development
Existing Lines

15. WCI Bidding Concept 9th Round 8th Round 7th Round 6th Round 5th Round
Capacity Available 850 MW
9th Round
8th Round
7th Round
BID PRICES ($/KW-MO)
6th Round
5th Round
4nd Round
3nd Round
2nd Round
1st Round
FIRM TRANSMISSION CAPACITY (MW)

16. PR for WCI

17. High Plains Express
WCI (TE/WIA/WAPA)
EPTP (Tri-State/Xcel/WAPA)
NM Wind Collector (PNM)
SunZia
WIND
MOU involving 6 utilities, 3 State agencies & Trans-Elect
Co-Managers: Xcel & Trans-Elect
Feasibility study completed
Stage 2 Feasibility Underway
Major renewable component
3,500 MW – 500 kV AC
$5 billion
1,300 miles across favorable terrain from Wyoming to Arizona
Improved reliability in Eastern WECC
Benefits to participating states, including consumers
WIND
WIND
WIND
WIND
SOLAR
WIND
WIND
SOLAR
SOLAR

18. Transmission – A Snapshot
After years of under-investment, there’s a resurgence in interest in transmission expansion, driven by...
Replacement of aged infrastructure/improved reliability
Accessing remote resources, especially renewables
Availability of low-cost money
Impediments
Absence/inconsistent public policy & regional planning
Utility/regulatory focus on serving native load
Cost allocation & recovery uncertainties
Long permitting timelines & complications

19. Solutions for Regional Transmission Expansion
Public Policy
National: siting/routing, financial incentives, open access protocols
Regional & State: multi-state cooperation, transmission authorities
Professional Transmission Development
Independent transmission’s exclusive focus on transmission development
Commitments needed to build transmission
Traditional Model: Utilities to own and/or contract for capacity
Emerging Model: Renewable developers, transmission authorities, and customer beneficiaries
Facilitated by supportive public policy & regionalized power markets

20. Change in Fundamentals
Perfect Storm
Change in Fundamentals
Rapid inflation in energy prices
Carbon-constrained energy economy
Price-competitive renewables
Utilities have few incentives for expanding transmission
Change/Chaos = Opportunity
Transmission authorities are uniquely positioned to effect change
Multi-state cooperation in non-RTO areas
Western REZ process
Take the lead in facilitating transmission expansion
Supported by independent transmission developers & public policy

21. Shared Risk for Transmission Development
State Transmission Authorities
Focused on renewables
Bonding & eminent domain authority
Seeding transmission development
Business Model
State Authorities: political support
Trans-Elect: lead development efforts
Shared funding and risks, with funds repaid (with uplift) upon project financing
Opportunities
Short-Term: generator leads & collector systems
Longer-Term: trunk lines & regional lines