1. 2008 Annual Five Year Plan Update 2 10/12/2007 Regional Planning: Jay Teixeira, Harry Liu, Brad Schwarz, Jeff Billo, Chris Ngai

2. Load Assumptions Reliability Assessment – SSWG Forecast Economic Assessment – ERCOT Forecast

3. Generation Assumption Existing generation Mothballed units in-service if reserve margin falls below 12.5% Removed DFW-area non-SCR units All future generation that have signed IA $7/MMBTU average natural gas price for all years

4. Wind Generation All generators that are in the SSWG 2007 DSB cases updated 08/30/2007 plus: –Hackberry Wind, 165 MW, Shackelford County –Wildhorse Mountain Wind, 120 MW, Howard County –Gulf Wind, 188 MW, Kenedy County –Penascal Wind, 201 MW, Kenedy County Total wind plant capacity are 6514, 6903 MW in 2008 and 2009 respectively

5. Generation Assumption 20082009201020112012 SSWG Forecast Load Reserve Margin (with no mothball units on)12.4%11.9%9.3%6.9%5.7% Reserve Margin (with all mothball units on)14.6%14.1%11.5%9.1%7.8% ERCOT Forecast Load Reserve Margin (with no mothball units on)15.5%15.6%13.4%11.2%10.6% Reserve Margin (with all mothball units on)17.9% 15.7%13.4%12.8%

6. 5-year Study Process Existing 2012 SSWG Base case Conditioned Case Adding Reliability Projects Reliability Analysis – TO and ERCOT TPIT and RPG Analysis – TO and ERCOT Remove Non-RPG approved projects Base case for economic study Update the topology and Switch to ERCOT forecast Adding Economic Projects Repeat Process for previous year UPLAN Economic Analysis – TO and ERCOT Final topology for the year

7. Reliability Projects

8. Definitions Reliability Projects – Transmission projects that are needed to meet NERC or ERCOT reliability criteria that could not otherwise be met by any dispatch of the existing generation in planning studies Economic Projects – Transmission projects that are needed to allow NERC and ERCOT reliability criteria to be met at a lower total cost than the continued dispatch of higher cost generation This distinction is made only to describe what kind of analysis is performed for the project and does not indicate whether the project is required or optional.

9. Three Buses Example: –Bus 1 Generator 1 –Capacity: 1800 MW –Cost of generation: $30/MWh –Bus 2 Load: 1200 MW –Bus 3 Load: 300 MW –Three transmission lines with identical rating of 1000 MW and same characteristics (Impedances). Figure one shows the network and assumptions How does ERCOT Evaluating Reliability Projects

10. 3 Bus Network Example G1: 1800 MW Cost: $30/MWh 1200 MW Load Bus 2 Bus 3 Bus 1 1000 MW Figure 1 300 MW Load

11. Traditional Planning: Economic Dispatch G1: 1800 MW Cost: $30/MWh Dispatch 1500 MW 1200 MW Load Bus 2 Bus 3 Bus 1 1000 MW Figure 2 Pre Contingency G1 is dispatched at 1500 MW to serve load at Bus 2 and Bus 3 No overload 300 MW Load

12. Traditional Reliability Project: Post Contingency Overloading G1: 1800 MW Cost: $30/MWh Dispatch 1500 MW 1200 MW Load Bus 2 Bus 3 Bus 1 1000 MW Figure 3 Post Contingency: When contingency of line from bus1 to bus3 happens, line from bus 1 to 2 overloads 150% 300 MW Load

13. Current Planning: Unserved Energy G1: 1800 MW Cost: $30/MWh Dispatch 1000 MW 1200 MW Load Bus 2 Bus 3 Bus 1 1000 MW Figure 4 Security constraint dispatch: G1 at 1000 MW No Post Contingency Overload. Unserved Energy 200 MW at bus 2, 300 MW at bus 3 Line1-2 showing as a limiting element UNS: 200 MW 300 MW Load UNS: 300 MW

14. Uplan Unserved Energy Report Line 1-3Line 1-2300Bus 3 Line 1-3Line 1-2200Bus 2 CNT 1PTDF/OTDFLimiting Elements UNS MWUNS Bus name

15. Reliability Projects 5 Year Plan

16. Reliability Projects And Date Need --Preliminary

17. Discussion of Selected Reliability Project

18. Rothwood 345/138 kV Station Problem:

19. Before Rothwood Station Unserved energy Contingency Overload Element

20. After Rothwood Station

21. Forney 345/138 kV Auto Problem

22. Before Forney Auto Unserved energy Contingency Overload Element

23. Forney Vs. Seagoville

24. Contingency No Overload Second Auto

25. Roanoke1 345/138 kV Auto Problem

26. Before Roanoke1 Auto Unserved energy Overload Element Contingency

27. McNeil to Summit Second Circuit Problem

28. Before McNeil to Summit Contingency Unserved energy Overload Element

29. Fairdale to Brand Upgrade Problem

30. Before Fairdale to Brand Upgrade Contingency Unserved energy Overload Element

31. After Fairdale to Brand Upgrade No Overload

32. Problem McCree - Shiloh Upgrade

33. Contingency Unserved energy Overload Element Before McCree-Shiloh Upgrade

34. After McCree-Shiloh Upgrade Contingency No Overload

35. Problem Cross Timbers to Roanoke Upgrade

36. Contingency Unserved energy Overload Element Before Cross Timbers to Roanoke Upgrade

37. After Cross Timbers to Roanoke Upgrade Contingency No Overload

38. Problem Liggett Auto Upgrade

39. Before Liggett Auto Upgrade

40. Unserved-Limiting Elements-Contigency

41. Continued

42. Economic Projects

43. 2012 Economic Project Performed preliminary economic project analysis Creating list and send to TOs for review: –Technical feasibility of the proposed projects –Cost estimates of the projects –Alternative proposals and cost

44. Economic Projects Use the list of projects in 2012 as a manual to do other year economic analysis –If there is congestion, see if the project from the 2012 list can economically solve the issue –If there is congestion that can not be solved by any of the projects in 2012 economic project list: Determine if there is a project that can generate enough revenue in the first few years to cover the capital cost Any other temporary solutions

45. Questions?