1. 1 Local Area Planning Update to TRANSAC – March 11, 2015

2. 2 Decision Rule - Matrix

3. 3 Decision Rule - Example

4. Prioritizing Critical Problems 4 Consequences Factor = (Stability + Thermal + Voltage Problems Factors) X Peak Load Affected Consequences Rating Factors Stability and Thermal ProblemsVoltage Problems Extreme – Interconnection wide Impacts, Widespread Outages10Outage10 Severe – Division Wide Impacts, multiple outages5Very Low < 80%5 Moderate – Localized Impacts, single outages2Low < FERC 7152 Minor – Small Impacts, no outages1High2 None – No problems observed0None0 Consequence Factors

5. Risk & Likelihood Factors Prioritizing Critical Problems 5 Risk Factor = System Cond. Factor X Seasonal Cond. Factor X Other Cond. Factor Likelihood Factors System Condition Seasonal ConditionOther Conditions Normal.09995S Peak0.125Normal – Occurs at N-0 Cond.1.0 Outage 10.0005W Peak0.125Major – Long line > 30 miles1.0 Outage 20.00005SW Peak0.25Moderate – Medium Line0.5 Light0.25Minor – Short Line < 3 miles0.1 Average0.75Sub – Substation Equipment0.033 All1

6. Expected Consequences 6 Expected Consequences = Consequences Factor X Risk Factor Expected Consequences are used to rank and prioritize problems found. Additional factors may be used to weight the expected consequences, taking into account: Timing of a problem (far into the future could be ranked lower) Different Contingencies that create the same problem (a problem that could occur due to two different outages can be ranked higher). Additional Seasonal variations or other factors.

7. Suggestions: High Wind System Wide –Existing Projects dispatched to capacity Loss of Thermal Plants –Heavy Imports, Heavy Summer Loss of Hydros –Extreme Winter Conditions Extreme Localized Growth Other? Uncertainty Scenarios 7

8. Quarters 6 & 7 Finalize Mitigation Plans under review or in progress Run Uncertainty Scenarios Perform Reactive Resource Assessment Quarter 8 Send out Draft of “The Book” for stakeholder review Conduct Public Meetings Finalize “The Book” and close out the 2014/2015 Local Area Planning Cycle Next Steps 8

9. Questions? 9

10. 10