2. TRANSMISSION CONSTRAINTS KENNETH A. DONOHOO, P.E. Manager of System Planning, Technical Operations kdonohoo@ercot.com

3. 9/13/2001 TERMS VOLTAGEvoltspressure CURRENTampsflow POWERwattsvolts x amps FREQUENCYhertzcycles/sec CONTINGENCYoutageout of service

4. 9/13/2001 ELECTRICITY CHARACTERISTICS Travels at the speed of light Cannot be easily stored Cannot be fully “routed” Line flows not easily changed Network must be continuously connected to function correctly Supplied immediately upon demand by customer

5. 9/13/2001 BUT IT’S NOT LIKE... The natural gas pipeline system The telephone system The water system The transportation system IT CAN’T BE EASILY ROUTED! Power flow is based upon Physical Laws not Contracts

6. 9/13/2001 ORIGINAL PURPOSE OF TRANSMISSION Connect generators to each other and to the distribution system Contingencies (outages) and economic dispatch Connect utilities to each other Security Interchange Built to serve known customers (loads) within utilities’ own territory, with relatively weak inter-utility links.

7. 9/13/2001 TRANSMISSION CONSTRAINTS Function of the Impedance And Voltage Of Network Thermal Limits Heating of Conductor, Transformer or Facility Dependent on weather Longer Term - 10 to 40 minutes Voltage Limits/Stability Reactive Problems Very Short Time Frame Voltage Collapse Unit Stability Limits Angular & Generation Unit Stability Very Short Time Frame

8. 9/13/2001 DYNAMIC UNIT STABILITY

9. 9/13/2001 Greatly Simplified A B Transaction From A to B A is Exporting, B is Importing Power Flows on Primary Paths as well as ALL the Parallel Paths C D Ckt 1 Ckt 2 Ckt 3 Ckt 4 Ckt 5 Ckt 6 Ckt 7 Ckt 9 Ckt 8 PRIMARY PATH PARALLEL PATH

10. 9/13/2001 Greatly Simplified A B C D Ckt 1 Ckt 2 Ckt 3 Ckt 4 Ckt 5 Ckt 6 Ckt 7 Ckt 9 Ckt 8 PRIMARY PATH PARALLEL PATH AS THE POWER FLOW INCREASES, FLOWS ON PRIMARY PATHS AS WELL AS THE PARALLEL PATHS INCREASE. THE TRANSFER LIMIT (CONSTRAINT) IS REACHED WHEN ANY ONE OF THE FOLLOWING CONDITIONS IS REACHED: FLOW ON CIRCUIT WOULD BE AT THE LIMIT FOR POST-CONTINGENCY LOADING VOLTAGE ON A BUS WOULD BE AT MINIMUM POST-CONTINGENCY VALUE SYSTEM REACHES A STATE OF VOLTAGE INSTABILITY LEADING TO COLLAPSE SYSTEM IS NOT VOLTAGE STABLE IF A CONTINGENCY WERE TO OCCUR SYSTEM IS NOT DYNAMICALLY STABLE IF A DISTURBANCE WERE TO OCCUR

11. 9/13/2001 Power Flow From A to B A is Exporting, B is Importing Contingency on Circuit 2 Increase Generation in A Decrease Generation in B Until Limit Reached on Circuit 9 Net Change in Generation is Transfer Limit CALCULATION EXAMPLE Greatly Simplified A B C D Ckt 1 Ckt 2 Ckt 3 Ckt 4 Ckt 5 Ckt 6 Ckt 7 Ckt 9 Ckt 8 PRIMARY PATH PARALLEL PATH CONTINGENCY (OUTAGE) X LIMITING EQUIPMENT

12. 9/13/2001 CALCULATION EXAMPLE Greatly Simplified A B C D Ckt 1 Ckt 2 Ckt 3 Ckt 4 Ckt 5 Ckt 6 Ckt 7 Ckt 9 Ckt 8 PRIMARY PATH PARALLEL PATH CONTINGENCY (OUTAGE) X LIMITING EQUIPMENT Rating on Circuit 9 May Also Limit Transfers From A to C and A to D Simultaneous Flows From Any Area May Contribute to Flow on Circuit 9 ACTUAL CALCULATIONS INCLUDE MANY MORE CIRCUITS & EQUIPMENT

13. 9/13/2001 TRANSMISSION CONSTRAINTS Complicates System Security Management Leads to Economic Inefficiencies Creates Captive Markets Reduces Liquidity of the Market Creates “Must Run” Generation Increased Utilization of Inefficient Units Reduced Utilization of Efficient Units Confers Market Power to Dominant Supplier in a Constrained Area CONSIDERATIONS

14. 9/13/2001 NEW TRANSMISSION Maintains Reliable Service to Load Allows New Generation to be Fully Integrated into the Grid Provides for Additional Competition Promotes Lower Energy Prices Supports a Liquid Competitive Market Allows Greater Access to Renewable Generation CONSIDERATIONS

15. 9/13/2001 MONTICELLO-FARMERSVILLE 345 kV CIRCUIT AUSTROP-LOST PINES-FPP 345 kV CIRCUIT LYTTON-HOLMAN- FPP 345 kV CIRCUIT LIMESTONE-WATERMILL 345 kV DCKT MILITARY HIGHWAY STATCOM +/- 150 MVAR NEW MAJOR TRANSMISSION FOR 2001 SUMMER

16. 9/13/2001 COLETO CREEK–PAWNEE 345 kV LINE CCN DECEMBER 2000 IN SERVICE MAY 2002 SAN MIGUEL–PAWNEE 345 kV LINE CCN NOVEMBER 2000 IN SERVICE MAY 2002 FARMERSVILLE -ANNA 345 kV CCN JANUARY 2001 IN SERVICE DEC 2002 MORGAN CREEK–SAN ANGELO– COMANCHE SWITCH 345 kV LINE CCN JUNE 2001 IN SERVICE DEC 2002 GRAHAM – JACKSBORO 345 kV LINE CCN FILED BY JUNE 2001 IN SERVICE DEC 2002 RIO GRANDE VALLEY SERIES CAPACITOR COMPENSATION IN SERVICE SEPTEMBER 2001 MAJOR TRANSMISSION PROJECTS UNDERWAY HOUSTON AREA UPGRADES PARIS-ANNA 345 kV IN SERVICE DEC 2005 VENUS LIGGETT 345 kV IN SERVICE DEC 2004

17. 9/13/2001 PEAK DEMAND Year ERCOT Coincident Hourly Peak Demand MW Annual Growth 199443,588-- 199546,6687.07% 199647,6832.17% 199750,1505.17% 199853,6897.06% 199954,849*2.16% 200057,6065.03% Average Six Year Compound Growth 4.85% *This value would have been greater if there had been no interruptible load curtailments at the time.

18. 9/13/2001 FUTURE GENERATION CAPACITY RESERVES OFFICIAL MARGINS Based on System Planning Technical Operations forecast. Assumes all generation capacity is available during peak conditions. Only includes future generation plants that have an executed/completed interconnect agreement with an ERCOT TSP. Does not include DC Tie Capacity or generation plants that can switch between regions. Does not include wind generation capacity. Includes Serving Interruptible Loads SUMMER Percent Reserve Margin Year 2002 2003 2004 2005 2006 22.5% 21.7% 18.5% 14.9% 11.4% WINTER Percent Reserve Margin Year 2002/03 2003/04 2004/05 2005/06 2006/07 58.3% 64.9% 65.5% 61.5% 57.5%

19. 9/13/2001 ERCOT TEAMWORK & ATTITUDE GOES A LONG WAY

20. 9/13/2001 QUESTIONS FOR MORE DETAILS AND ADDITIONAL SYSTEM DATA VISIT THE SYSTEM PLANNING TECHNICAL OPERATIONS WEBSITE AT: ftp://ftp.ercot.com/systemplanning/system_planning_department.htm