ISSUES WITH RETROFIT REQUIREMENTS FOR HVRT 1

CURRENT SITUATION WGRs HAVE HAD A CLEAR LIMIT OF 1.1 pu SPECIFIED FOR HVRT IN THE GUIDES WGRs ARE NOW BEING DEVELOPED THROUGHOUT ERCOT IN MANY STAGES OF COMPLETION BASED UPON CURRENT STANDARDS ERCOT PANHANDLE STUDIES INDICATE CERTAIN CONTINGENCIES CAN RESULT IN VOLTAGE SWINGS EXCEEDING 1.1 pu 2

CURRENT SITUATION CURRENTLY DEVELOPERS ARE CONTACTING VENDORS AND PERFORMING STUDIES TO DETERMINE THE ABILITY TO COMPLY WITH HIGHER HVRT REQUIREMENTS A NERC HVRT STANDARD (PRC-024) IS BEFORE FERC FOR FINAL APPROVAL; IF APPROVED, PRC-024 ALLOWS FOR A 5 YEAR PHASE IN 3

KEY ISSUES/QUESTIONS IT IS NOT CLEAR WHY THE CURRENT HVRT STANDARDS ARE NOT WORKABLE DEVELOPERS MAKE SIGNIFICANT COMMITMENTS WELL BEFORE THEY SIGN THE SGIA MAKING UNTIMELY CHANGES COSTLY THE COMPLETED TSP FISs IN THE PANHANDLE DO NOT INDICATE ANY VOLTAGE SWING PROBLEMS 4

KEY ISSUES/QUESTIONS UNDER WHAT CONDITIONS DO THE STUDIES INDICATE POSSIBLE PROBLEMS ARE THE MODELS CORRECT CHANGES TO STANDARDS MUST BE MADE WITH ENOUGH LEAD TIME TO ALLOW THE INDUSTRY TO RESPOND EFFICIENTLY NEW HVRT STANDARDS APPLIED TO THE POI ARE FAR MORE DEMANDING THAN HVRT STANDARDS APPLIED TO THE TURBINES 5

KEY ISSUES/QUESTIONS ANY CHANGES THAT ARE SHOWN TO BE NECESSARY AND EFFICIENT MUST BE PHASED IN ( PRC-024 ALLOWS FOR 5 YEARS FOR FULL IMPLEMENTATION ) IF NEED IS DEMONSTRATED ONLY IN THE PANHANDLE, THEN OTHER AREAS SHOULD NOT BE INCLUDED IN NEW STANDARDS IF NEED IS DEMONSTRATED THEN ALL TECHNOLOGIES IN THE PANHANDLE SHOULD BE INCLUDED, NOT JUST WGRs 6

KEY ISSUES/QUESTIONS COMPLIANCE EVALUATION CRITERIA NEED TO BE ESTABLISHED WHICH PROVIDE MODELING REQUIREMENTS AND ASSUMPTIONS TO BE USED BY DEVELOPERS/TSPs THRESHOLDS OF PANHANDLE DEVELOPMENT NEED TO BE ESTABLISHED WHERE THE HIGH VOLTAGE PROBLEMS FIRST APPEAR 7

WGR PROJECT DEVELOPMENT ACQUIRE LAND (LEASES) WIND SURVEY ERCOT INTERCONNECT REQUEST PRELIMINARY DESIGN CONTRACT FOR TURBINES/ WARRANTIES CONTRACT FOR CONSTRUCTION/WARRANTIES FINAL DESIGN FIS REQUEST CONTRACT FOR BOP CONTRACT FOR PPA/FINANCIAL HEDGES CONTRACT FOR BOP FIS COMPLETED FINAL DESIGN OBTAIN FINANCING SIGN SGIA POST SECURITY BUILD 8