1. CREZ Related Generation Interconnection Studies July 2008 Jeff Billo RPG meeting 07-18-2008

2. 2 RPG Meeting 07-18-2008 Background Since Summer 2007 ERCOT has put a temporary moratorium on generation interconnection studies that meet the following criteria: (1) are in the area of the ERCOT System that will be significantly affected by system upgrades due to the CREZ process, that is, the West CM Zone; and (2) (a) have expected in-service dates beyond 2011 or, such that the CREZ upgrades will likely be in place by that in-service date; or (b) will likely require a non-exempt transmission CCN to accomplish the interconnection As of 07/15/2008 this moratorium has affected the following: –8 Screening Study Requests –13 Full Interconnection Study Requests (FIS) There are five FIS requests in process that would have been placed under this moratorium had we started it prior to 2007 ERCOT System Planning is currently processing 18 screening study requests that are not subject to the moratorium –ERCOT is required to complete screening study requests within 90 days of receipt per PUCT Substantive Rules

3. 3 RPG Meeting 07-18-2008 Issues 1.When the PUCT selects a CREZ transmission plan in what order should ERCOT System Planning perform the screening studies? 2.At what point should FIS requests proceed? 3.How should in-process FIS studies be handled if a project’s interconnecting TSP changes? 4.How should in-process interconnection requests be handled if the developer decides to delay the project and change the POI to a new CREZ line? 5.What study assumptions should be used for screening and FIS studies?

4. 4 RPG Meeting 07-18-2008 Issue #1 When the PUCT selects a CREZ transmission plan in what order should ERCOT System Planning perform the screening studies? Potential Resolution: –Place all requests that were on hold back into the screening study queue and process them in the order in which they were received –This means that CREZ related screening study requests received last summer would be worked on prior to non-CREZ related requests recently received –This may make it difficult to meet the 90-day deadline for processing recently received requests (average time out for the last 10 screening studies completed by ERCOT System Planning was 59 days from receipt)

5. 5 RPG Meeting 07-18-2008 Issue #2 At what point should FIS requests proceed? Should FIS requests proceed once the PUCT selects CREZ transmission lines, once the transmission provider of a generation project’s interconnecting line is selected, once the CCN is filed, once the CCN is granted, or at some other time? Potential Resolution: –The FIS request for a project should proceed once the transmission provider of that project’s interconnecting transmission facility has been selected –This means that certain aspects of the FIS may not be able to be completed until the CCN has been granted (ie. the facilities study)

6. 6 RPG Meeting 07-18-2008 Issue #3 How should in-process FIS studies be handled if a project’s interconnecting TSP changes? This is primarily related to Panhandle generation proposals Potential Resolution: –This should generally be worked out between the developer and the TSPs involved to determine the best course of action on a case by case basis –ERCOT recommends (but will not require) starting the process anew since a Panhandle with CREZ transmission lines will look a lot different than a Panhandle without any ERCOT transmission lines as was the case when these requests started

7. 7 RPG Meeting 07-18-2008 Issue #4 How should in-process interconnection requests be handled if the developer decides to delay the project and change the POI to a new CREZ line? Potential Resolution: –If the POI changes the current request should be cancelled and a new request started –This applies for requests in either screening study phase or FIS

8. 8 RPG Meeting 07-18-2008 Issue #5 What study assumptions should be used for screening and FIS studies? Should the study assume all CREZ transmission improvements are in place regardless of a generation project’s in-service date? What generation should be assumed in the study? –Should an assumption be made about the amount of wind generation in each of the CREZ zones? If so, how much and at what locations? Potential Resolution: –Studies should assume all CREZ transmission lines are in place in 2012 until more accurate information is known about the in-service dates for each of the transmission improvements –Only the plant under study, existing plants, and plants with SGIAs should be included in the study as is consistent with current practices (TSPs may include other likely generation as is consistent with their current practices)

9. 9 RPG Meeting 07-18-2008 Comments Please direct comments to Jay Teixeira Jay: jteixeira@ercot.comjteixeira@ercot.com 512-248-6582