1. Criteria for Economic Transmission Additions Bill Bojorquez May 4, 2006

2. WMS Approved Motion “WMS recommends that the Regional Planning Group consider transmission projects for economic justifications if either of the societal surplus or consumer surplus criteria exceeds the incremental projects transmission costs in line with the economic benefits metric made in second presentation at WMS (March 22, 2005).”

3. TXU Presentation at WMS Request of WMS Approve the proposed economic benefit metric shown below: Reject Project NPV of SS > NPV of TCOS NPV of CS > NPV of TCOS Quantify SS & CS over life of project RPG Recommend Project Approval Yes No Yes Note that for purposes of economic evaluations, an indication of the NPVs of Societal and/or Consumer Surplus will be used and based on the best estimates available using planning judgment from the transmission cases available.

4. Draft TAC Motion TAC recommends that the Regional Planning Group consider, for economic justification, transmission projects that fail the societal surplus criteria currently used if the consumer surplus criteria exceeds the incremental project’s transmission costs.