RPG: September 24, Long-Term System Assessment Introduction Jeff Billo, Manager, Transmission Planning September 2013 Regional Planning Group

RPG: September 24, Senate Bill 20 (79 th Legislature, 1 st Called Session [2005]) requires that the PUCT and ERCOT study long-term system needs and report to the Legislature each even numbered year ERCOT has been conducting a Long-Term System Assessment (LTSA) on a biennial basis since , 2008, 2010 LTSAs focused on 10-year horizon Work on 2012 LTSA bolstered by grant from the Department of Energy –Process improvements implemented –New tools utilized –Scope expanded to 20-year horizon History

RPG: September 24, LTSA indicated a reliability need to increase import capability into the Houston area by 2018 –In 2009 Sharyland Utilities and CenterPoint Energy submitted import project proposals –ERCOT endorsed the Fayetteville-Zenith 345 kV project (cancelled in 2012 due to change in planning criteria) Valley Import Project, studied in 2011, used 2020 case from the 2010 LTSA to inform the project recommendation of which project alternative best met the long-term needs for south Texas Cross Valley 345 kV project, studied in 2011, used 2020 case from the 2010 LTSA to identify long-term needs in the area –Led to the recommendation to route Cross Valley 345 kV line near South McAllen substation for future 345/ 138 kV connection –2013 RTP preliminary results show need for this connection by 2018 How the LTSA has affected near-term analysis

RPG: September 24, LTSA indicated need for increased Houston import capability in all studied scenarios –Three TSPs proposed import projects into the Houston area this summer –Results from LTSA show need to consider long-term requirements for the area (see today’s Houston Import presentation) 2012 LTSA indicated potential for large wind capacity build out in the Texas Panhandle in multiple scenarios (exceeding existing design capacity) –In part, led to the initiation of the Panhandle Renewable Energy Zone study in early 2013 How the LTSA has affected near-term analysis cont.

RPG: September 24, Link near-term and long-term planning processes –Internal staff realignment: RTP and LTSA engineers now in same group –2014 LTSA will use similar study process, assumptions and tools as RTP ERCOT will select either UPLAN or PROMOD for both 2014 RTP and LTSA economic analyses Analysis beyond 10-year horizon showed value, but not all stakeholders were comfortable with 20-year horizon –Suggest studying years 10 and 15 (2024 and 2029) Continue to improve scenario development and assumptions –ERCOT will hold 1 to 3 workshops in October/ November –May hire consultant to facilitate workshops –Use more sensitivities to assumptions The Brattle Group report recommendations will be evaluated in the future Lessons learned from the 2012 LTSA and DOE Project

RPG: September 24, Provide a roadmap for the long-term transmission needs of the ERCOT System 2.Provide study cases for the use of near-term planners in the evaluation of large transmission additions to the ERCOT System 2014 LTSA Goals

RPG: September 24, Develop 6 to 8 scenarios for load/ generation development for 2024 and 2029 Select 3 to 5 of those scenarios for transmission build out –Start with final 2018 case from 2013 RTP –Reliability analysis performed using similar assumptions to RTP –Economic analysis Final report in December 2014 Formal scope document will be presented at next RPG meeting 2014 LTSA Scope Proposal

RPG: September 24, Comments or Questions?