1. 2006 Reliability Study James Manning Bryan Guy May 12, 2006

2. 05/02/062 Two Part Presentation 2006 Reliability Study Scope –James Manning (NCEMC) Preliminary 2006 Reliability Study Results –Bryan Guy (Progress Energy)

3. 05/02/063 2006 Reliability Study Scope

4. 05/02/064 Purpose of Study Assess the PEC and Duke transmission systems’ reliability Develop a single reliability transmission plan for North Carolina that ensures reliability of service in accordance with NERC, SERC, PEC and Duke requirements

5. 05/02/065 The Process Steps Assumptions Study Criteria Case Development Methodology Technical Analysis and Study Results Assessment and Problem Identification Solution Development Selection of Preferred Reliability Solutions Report on the Study Results

6. 05/02/066 Assumptions Study year is 2011 Summer and 2010/2011 Winter, if needed Load Serving Entities (“LSEs”) have provided a dispatch order of their Designated Network Resources (“DNRs”) Load growth assumptions are in accordance with each LSE’s practice Generation, interchange and other assumptions have been coordinated between Participants as needed

7. 05/02/067 Study Criteria NERC reliability standards SERC requirements Duke and PEC company criteria

8. 05/02/068 Case Development The Base Case has been developed with detailed internal models for Duke and PEC Duke and PEC have created their respective generation down cases from the common Base Case –including outaging key generators near the Duke/PEC interface Additional cases will be developed to evaluate alternative resource supply options to meet load demand forecasts

9. 05/02/069 Methodology Power flow analyses will be performed to evaluate thermal and phase angle limits –Voltage, stability and short circuit studies may be performed if circumstances warrant Duke and PEC have exchanged contingency and monitored element files so that each can test the impact of contingencies on the other’s transmission system

10. 05/02/0610 Technical Analysis and Study Results Duke and PEC will report results throughout the study area based on: –Thermal loadings greater than 90% –Voltages limits –Post-contingency phase angle difference of Richmond-Newport 500 kV line

11. 05/02/0611 Assessment and Problem Identification Duke and PEC are each running their own assessments –Duke reliability criteria will be used for Duke’s transmission facilities –PEC reliability criteria will be used for PEC’s transmission facilities Duke and PEC are documenting the reliability problems resulting from their assessments and reporting to PWG

12. 05/02/0612 Solution Development The PWG will develop potential solution alternatives to the identified reliability problems Duke and PEC will test the solution alternatives Duke and PEC will develop rough, planning level cost estimates and construction schedules for the solution alternatives

13. 05/02/0613 Selection of Preferred Solutions The PWG will compare alternatives and select the preferred solution alternatives while balancing costs, benefits, and risks The PWG will recommend a preferred set of transmission improvements that provide a reliable and cost effective transmission solution to meet customers’ needs while prudently managing the associated risks

14. 05/02/0614 Report on the Final Study Results The PWG will compile all the study results and prepare a recommended final Collaborative Plan for the OSC review and approval Final report would include: –A comprehensive summary of all the study activities; –A summary of all of the identified problems; and –The recommended transmission improvements, including estimates of costs and construction schedule.

15. 05/02/0615 Preliminary Results from our first NCTPC Study 2011 Summer

16. 05/02/0616 Preliminary 2006 Study Results Enhanced Transmission Access –Received no requests from the TAG Reliability Study process –Focus on reliability –Evaluate impact of resource supply options to meet load demand forecasts

17. 05/02/0617 First studies of the year using updated cases Opportunity to assess current plans Duke and PEC have performed screens Assessments were Coordinated Combined detailed model Tested impact of opposing system transmission and generation outages Improved generation dispatch assumptions Results shared & discussed at PWG meeting Preliminary Reliability Study Results

18. 05/02/0618 Nothing new or imminent was found Projects addressing reliability issues Preliminary Reliability Study Results

19. 05/02/0619 Preliminary Reliability Study Results PEC & Duke

20. 05/02/0620 Preliminary Reliability Study Results PEC –May establish one new project –Three items to be monitored

21. 05/02/0621 Preliminary Reliability Study Results PEC –Falls 230/115 kV Transformer New project for a second transformer about 2013 –Franklinton 115 kV capacitor Local load serving issue Possible Wake Forest area capacitor in 2011 Not a long lead-time item

22. 05/02/0622 Preliminary Reliability Study Results PEC –Falls-Henderson 115 kV Lines Local load serving issue Monitor loading on 115 kV lines Identified possible operating procedure for use in 2013 –Laurinburg 230/115 kV Transformers Reduced loading on facilities Possible 2 year delay of current project to install larger transformers from 2012 to 2014

23. 05/02/0623 Preliminary Reliability Study Results Richmond – Newport 500 kV Line –2011 study confirms PEC import limitations –Could become an issue before the end of the planning horizon –PWG will investigate solutions, cost and scheduling

24. 05/02/0624 Preliminary Reliability Study Results Duke –No new facilities were identified by the study –Three projects previously identified continue to be monitored (2011 and beyond)

25. 05/02/0625 Preliminary Reliability Study Results Duke –London Creek 230 kV Line (Riverview – Peach Valley 230 kV Line) Internal screens indicate that bundling of this line will be required in the 2012 timeframe. The PWG study indicates upgrade will be necessary around 2016. The timing is impacted by south-to-north flow across the Duke control area.

26. 05/02/0626 Preliminary Reliability Study Results Duke –Antioch 500/230 kV Transformer Banks (2) Internal screens show similar timing for an upgrade project. Increased import from the north accelerates timing. PWG study indicates additional transformer capacity needed around 2014.

27. 05/02/0627 Preliminary Reliability Study Results Duke –Parkwood 500/230 kV Transformer Banks (2) Internal screens show the need for additional transformer capacity around 2019 to 2022. PWG study indicates 2018 in the base screen. Added outage of a large PEC Roxboro unit shows need for project advancement of 3-4 years to 2015.

28. 05/02/0628 Where Are We Now ? –Assess the impact of resource supply options Scenarios provided via Participant from… –NCMPA1,NCEMPA, FPWC, NCEMC, Waynesville, Tri- Towns, Forest City/Dallas, Concord Provides Participants information for planning transmission needs Obtain transmission service via OASIS

29. 05/02/0629 Preliminary Study Results Potential Alternative Resource Options for Study Alternative SourceSink Net RequestsTest Level PJM (AEP)Duke473600 SOCODuke564600 TVADuke464600 SCEGDuke464600 SCDuke464600 CPLEDuke464600 PJM (AEP)CPLE535600 PJM (VP)CPLE535600 SCEGCPLE600 SCCPLE500600 DUKECPLE500600 PJM (AEP/AEP)DukeCPLE1,008600 / 600 PJM (AEP/VP)DukeCPLE1,008600 / 600 PJM (AEP)CPLW20

30. 05/02/0630 Confirms PEC and Duke transmission plan –No surprises, nothing new, nothing imminent –Adjustments PWG will identify possible solutions to PEC’s import limitation PWG will assess impact of various resource supply options for LSEs Summary