1. Jones Creek Project Submitted to RPG on July 7, 2014 July 22, 2014 Regional Planning Group Meeting

2. Background Freeport 1

3. Background  By 2017, Freeport area is projected to be served by two 345/138 kV autotransformers and three long 138 kV circuits 2

4. Background (cont.) 3

5.  Freeport LNG has publicly announced o Liquefaction and Export Project in the Freeport area: 3 liquefaction trains 721 MW load Still need FERC authorization - Expected in 3 rd Qtr of 2014 Sign service extension agreement with CNP in 3 rd Qtr of 2014 Operational 3 rd Qtr 2017 o Pretreatment Facility (PTF) north of Freeport: Build in conjunction with Liquefaction and Export Project 109 MW load, 82 MW generator CNP CCN approved on January 27, 2014 CNP Oyster Creek Substation – BP2017 4

6. Study Case Analysis  Modify SSWG 2017 base case posted in October 2013 -Increase load at 138 kV QNTANA Substation by 721 MW -Increase generation ERCOT-wide to balance the new load -Add Oyster Creek Substation with 109 MW load, 82 MW generator, and 40 MVAR capacitor bank Study Approach 5

7. Study Approach (cont.) 6

8. Phase I: Study Case Results  CNP performed contingency analysis based on Section 4.1.1.2 of the ERCOT Planning Guides:  NERC Category B (single contingency)  NERC Category C (common mode contingencies)  Contingencies relating to ERCOT Autotransformer unavailability criteria  Several overloads and low voltages on 138kV system in Freeport area  Some overloads higher than 150% on 138 kV lines serving as a source to QNTANA.  Case does not solve under contingency loss of both Dow-Velasco autotransformers, indicating potential voltage collapse  Results show that significant reinforcement is needed Study Approach (cont.) 7

9. Connection Options Option 1: Build Additional 138 kV Circuits – Rejected Option  Two new 21 mile circuits, new 5 mile double-circuit, new 138kV sub, other…  Estimated cost greater than $125 million  Requires acquisition of 47 miles of new right-of -way  Project completion unlikely by Customer’s planned load addition in Q3 2017 Option 2: Build new 345/138 kV Substation “Jones Creek Project” - Preferred  New 345/138kV Sub, 2 autotransformers, circuit extensions < 1 mile, other…  Estimated cost for Jones Creek Project is $79.8 million  CNP has existing substation site and right-of-way for new facilities  CNP can complete project by Customer’s planned load addition in Q3 2017  Provides cost-effective 345 kV injection point, minimizes new transmission line construction, minimizes landowner impact, and reduces project lead time. 8

10. Jones Creek Project 9

11.  $79.8 million Jones Creek Project recommended to serve the 721 MW Freeport LNG load  Jones Creek Project energization planned for BP2017  Complete in time for Freeport LNG 1 st Train  Project only moves forward if Freeport LNG:  Signs service extension agreement with CNP  Gives Notice to Proceed  Securitizes project  All expected to occur in 3 rd Quarter of 2014 Summary 10

12. Questions?