2. Arizona Corporation Commission Energy Workshop 2001-2002 February 16, 2001

3. 2 3/16/01ACCEnergy Workshop 2001/2002 Agenda California Energy Situation Update - Staff Energy Preparedness for 2001 and 2002 –Arizona Public Service Company –Salt River Project –Tucson Electric Power –Arizona Electric Power Cooperative –Western Area Power Administration –Southwest Gas Corporation Contingency Response Plan - Staff

4. 3 3/16/01ACCEnergy Workshop 2001/2002 California Update

5. 4 3/16/01ACCEnergy Workshop 2001/2002 Western Interconnection WSCC California Desert Southwest

6. WSCC EHV Transmission

7. Reference: NERC Reliability Assessment 2000-2009 WSCC Data June 2000 Min.Reserve Min.Reserve Requirements

8. 7 3/16/01ACCEnergy Workshop 2001/2002 History of Reserve Margins Per Dan Nix of CEC 5/17/00

9. 8 3/16/01ACCEnergy Workshop 2001/2002 WSCC Generation Additions

10. 9 3/16/01ACCEnergy Workshop 2001/2002 WSCC Generation Mix +28,189 +2,219

11. Wholesale Gas Supply Basins And Pipelines

12. 11 3/16/01ACCEnergy Workshop 2001/2002 California ISO Forecast Per Dan Nix of CEC 5/17/00

13. WSCC NON-SIMULTANEOUS TRANSFER CAPABILITIES (MW) 4/00

14. 75% OTC 90% OTC

15. Arizona EHV Transmission San Juan Navajo Glen Canyon North Gila Palo Verde Silver King Kyrene Liberty South Saguaro Vail Greenlee Cholla Mohave Mead Four Corners Springerville McKinley Tortolita Phoenix Tucson Yuma Westwing Coronad o Pinnacle Peak Transmission Import Constrained Area

16. 15 3/16/01ACCEnergy Workshop 2001/2002 AZ-NM-S.Nev Reserve Requirements (MW) 1 Total Min. Reserve Load Year Resources Requirements Responsibility 2000 20,932 20,834 18,244 2001 22,187 22,060 19,486 2002 26,581 24,757 21,930 2003 31,521 25,454 22,541 2004 31,576 26,379 23,367 2005 32,076 27,348 24,225 2006 32,076 28,256 25,030 2007 32,576 29,140 25,813 2008 32,576 30,048 26,617 2009 32,576 30,966 27,430 1 Per WSCC Information Summary, June 2000 9,186 98 127 1824 1,242 2,444

17. 16 3/16/01ACCEnergy Workshop 2001/2002 Arizona-NM-S. NV Generation Mix +11,763

18. 17 3/16/01ACCEnergy Workshop 2001/2002 Arizona Generation 2001

19. 18 3/16/01ACCEnergy Workshop 2001/2002 New Arizona Generation 2002

20. 19 3/16/01ACCEnergy Workshop 2001/2002 Staff Summary AZ Supply Plans Met WSCC Reserve Req. 2001 & 2002 Dependent Upon New Plants Existing Gas Supply & Delivery is Critical and Subject to Curtailment New Plants Utilize Fuel Portfolio’s With Interruptible Gas Purchases But Sell Firm Electric Commodity Transmission Capacity Is Marginal With Local Transmission Import Constraints Exposed To System Deficiencies In WSCC

21. 20 3/16/01ACCEnergy Workshop 2001/2002 What Actions Are Needed? Prepare a coordinated load reduction strategy –Voluntary reduction / Price induced ? –Emergency response Encourage distributed resource solutions Encourage new EHV transmission to accompany new plant additions ACC Web Site HTTP://WWW.CC.STATE.AZ.US

22. 21 3/16/01ACCEnergy Workshop 2001/2002 Questions ?