1. Valley Import Overview Jeff Billo Regional Planning Group Meeting July 22, 2014 Preliminary1

2. Valley Overview Future Transmission System Needs Discussion and Next Steps Outline Preliminary 2

3. Valley Overview - 2014 Preliminary 3 1 1 2 2 3 3 4 4 5 5 6 6 7 7 #PlantCapacity (MW) 1Frontera524 2North Edin678 3Duke463 4Silas Ray104 5Los Vientos400 6Redfish200 7Railroad DC Tie300 1769 600 300 GasWindDC-Tie Valley Interface

4. Valley Transmission - 2016 Preliminary 4 1 1 2 2 3 3 4 4 5 5 6 6 7 7 1769 600 300 GasWindDC-Tie #PlantCapacity (MW) 1Frontera524 2North Edin678 3Duke463 4Silas Ray104 5Los Vientos400 6Redfish200 7Railroad DC Tie300

5. ERCOT Board endorsed Valley Import Project in September 2011 –ERCOT Independent Review indicated that additional reliability upgrades would be needed by 2020 to support import needs FERC Final Rule on TPL-001-4 effective December 23, 2013 –Adds G-1+G-1 criterion to NERC planning standards (Category P3 contingency) No loss of load allowed Corrective Action Plan for “raise the bar” requirements do not have to be in place until 2020 ERCOT annual stability analysis identified reliability criteria violations in the Valley Background Information Preliminary 5

6. Valley Load Forecast (2014 RTP) Preliminary 6

7. Study Case –2016 Summer Peak (SSWG, March 2014) Base Case Condition –All Valley Gas Generation at Pmax –Lobo – North Edinburg 345 kV in service (with series capacitor) –North Edinburg – Loma Alta (Cross Valley) 345 kV in service –Valley Wind Output = 10% dispatch –Railroad DC-Tie no import/export Steady State PV Analysis Valley Import Study Preliminary 7

8. VSAT Results Preliminary 8 Base Case Notes: (1)G-1includes entire combined cycle train (2)N-1 includes 345 kV transmission line (3)Dynamic analysis results (ongoing work) may show stability limits lower than in the above table OutageContingency Valley Load (MW) at Stability LimitYear Exceeded N-1 28672016 G-1 29472017 N-1G-130612019

9. N-1+N-1 and G-1+G-1 are the significant contingencies for the Valley –Entire combined-cycle train is treated as G-1 in this assessment (consistent with Planning Guide 4.1.1.1) ERCOT is working on dynamic stability analysis ERCOT will work with area TSPs and RPG to evaluate project alternatives to address the reliability need –Static and/or dynamic reactive devices –Ajo – Caballo 345 kV line (suggested in 2011 ERCOT Independent Review) –San Miguel – Lobo – North Edinburg second circuit –Additional import path Railroad DC tie assumption Discussion Preliminary 9

10. Valley Potential Gen (by County), COD by 2016 Preliminary 10 1 1 2 2 3 3 4 4 5 5 6 6 7 7 1769 600 300 200 500 268 1601 200 399 230 200 1198 2000 GasWindDC-TiePG 6.9 WindFIS WindFIS Gas #PlantCapacity (MW) 1Frontera524 2North Edin678 3Duke463 4Silas Ray104 5Los Vientos400 6Redfish200 7Railroad DC Tie300

11. Preliminary11 Questions/ Comments?