1. Long Term Study Task Force Update Transmission Study Practices and Methodologies April 5th,2011 LTS

2. Objectives Create a stable, reliable representation of the ERCOT System for the 2020 and 2030 horizon. Integrate a generation portfolio representative of the real energy needs of the 2020 and 2030 loads while maintaining an appropriate reserve margin Identify Transmission Solutions that meet the long term needs of the ERCOT system Evaluate the AC steady-state reliability needs of the system, and develop solutions that minimize total economic cost (by scenario) LTS April 5th,2011 2

3. Process LTS April 5th,2011 Develop Transmission Model Perform Simplification Criteria 2016 SSWG Case Load Forecast 2020/30 Install Generation needed to meet real energy needs Determine Transmission Needs Implement and document results Map case to Security Constrained Economic Dispatch Model (Promod) Remove and Replace generation added for Reliability Scenario Specific Economic Build Out Generation Siting Process Reassess Transmission Needs – Reliability and Economy Defined Contingencies Prepare final solution set 3

4. Load Forecast Development Load forecasts developed by weather zone Included input from 15 years of weather data (1996-2010) Calculated Average, max, and min temperatures Applied median (50 percentile) temperature per weather month Loads were disaggregated by county (using Moody’s population data) and applied at the appropriate bus / equivalent bus in those counties LTS April 5th,2011 4

5. 2016 vs 2020 LTS April 5th,2011 2016: 1,984 MW 2020: 2,078 MW 2016: 3,112 MW 2020: 3,345 MW 2016: 21,106 MW 2020: 22,358 MW 2016: 5,947 MW 2020: 6,423 MW 2016: 2,294 MW 2020: 2,420 MW 2016: 2,052 MW 2020: 2,194 MW 2016: 27,273 MW 2020: 29,185 MW 2016: 12,783 MW 2020: 14,115 MW Non-coincident peak load 2016: 76,551MW 2020: 82,118 MW 5

6. 2016 vs 2030 LTS April 5th,2011 2016: 1,984 MW 2030: 2,174 MW 2016: 3,112 MW 2030: 3,777 MW 2016: 21,106 MW 2030: 24,466 MW 2016: 5,947 MW 2030: 7,409 MW 2016: 2,294 MW 2030: 2,637 MW 2016: 2,052 MW 2030: 2,461 MW 2016: 27,273 MW 2030: 33,856 MW 2016: 12,783 MW 2030: 16,524 MW Non-coincident peak load 2016: 76,551MW 2030: 93,304 MW 6

7. Transmission Simplification Criteria Equivalence the 69kV System: All 69kV Loads and Generators are replaced at the nearest upstream 138kV or 345kV Bus Equivalence rural / radial lines (138kV): –Rural lines less than 30 miles rated less than 150MVA are upgraded to 300MVA. –Rural lines less than 20 miles rated less than 440 MVA are upgraded to 440 MVA –Any rural line with a rating higher than 440 is not upgraded Upgrade short urban lines (138kV): Any urban line shorter than 2.5 miles rated less than 800MVA is upgraded to 800MVA LTS April 5th,2011 7

8. Reliability Screen – Generation additions Increased loads are served by incremental generation added as follows: Selected existing generation sites are rebuilt as larger machines where practical Where excess transmission capacity exists, new generators are added For large load centers of interest, multiple generation sites are tested independently to identify worst case scenarios Where: fuel, cooling, existing transmission, and proximity to a major metropolitan area allow LTS April 5th,2011 8

9. 2020 and 2030 AC Cases Voltage issues and thermal limitations are corrected where necessary –Reactive support is applied at the worst offending busses in an iterative approach to correct voltage to.98 PU (N-0) –Address thermal overloads, as well as voltage collapse for (N-1) Cases are stable, reliability assessment is underway –Includes N-1, G-3 stress testing of the steady-state model –NERC C & D criteria will be tested with proposed solutions Cases will be mapped to ProMod, with the newly developed contingency file, to determine opportunities for economic projects LTS April 5th,2011 9

10. Transmission Simplification Validation Verify no material changes in system dispatch: Pre and post simplification models are compared to verify no material changes in production cost or dispatch occurred as a result of the simplification Preliminary comparisons are in Uplan, subsequent comparisons will be performed pre and post simplification in ProMod LTS April 5th,2011 Case Description Difference in Production cost from Base Case (M$) Base CaseFull System- Partially SimplifiedFull system - 69kV system107.87 Fully simplifiedFull system - 69kV system + simplified 138kV system 129.96 10

11. Development of Contingency Events To maintain a plausible system dispatch, constraints must be defined to reflect new contingencies or redefine contingencies eliminated in the simplification process Previous study practices defined many contingencies with emphasis on any element with post-contingency loading beyond a user defined threshold. New tools (PAT, ProMod) and study practices focus on an iterative approach to define specific, targeted contingencies Increased engineering input allows system modeling with sufficient detail and decreased run times, allowing for additional analysis on specific topics and scenarios LTS April 5th,2011 11

12. Economic Analysis Perform a security constrained economic dispatch study of the simplified transmission model with the updated generation portfolio Identify transmission projects that create societal benefit (measured as decreased system production cost) Analyze opportunities to replace a previously modeled reliability project with a project that meets both economic and reliability needs Benchmark each project against alternatives in each scenario LTS April 5th,2011 12

13. Large Load Centers Currently in Study DFW Metro Area Houston Metro Area Lower Rio Grande Valley LTS April 5th,2011 13

14. Dallas Fort Worth Metro Area Voltage deficiencies are significant and not correctable from incremental reactive resources (~9000MVar of switched shunt compensation required for N-0) Potential retirement of legacy generation exacerbates voltage issues Studies with incremental generation or lines into the DFW are underway LTS April 5th,2011 14

15. Dallas Fort Worth Metro Area As modeled, the Dallas metro area relies on heavy imports into the Region from the South and East Low Voltage Issues Post contingency stability limit violations exist - highlighted lines represent a possible solution. April 5th,2011 15 LTS

16. Lower Rio Grande Valley Peaks are comparable or higher than 2011 Winter Event levels Current 345kV importation is not sufficient for maintenance and/or voltage stability LTS April 5th,2011 Year Updated Forecast extrapolated by county 20163087 20203294 20303941 16

17. Lower Rio Grande Valley Proposed 345 by AEP in RPG Loss of this line causes angular divergence Loss of this line causes overload of the other under 2020 loads and angular divergence under 2030 MW loads April 5th,2011 17 LTS

18. Lower Rio Grande Valley Double circuit increases stability limit and thermal rating. Tie reduces contingency impact. Series Compensation adjusted back to 50% after adding second circuit. Proposed new line is does not address all issues on a 20 year horizon. Contingent flows on this line are low due to long distance to generation. April 5th,2011 18 LTS

19. Houston under 2030 Load + 5% Large amounts of shunt reactive compensation, some likely dynamic, appears necessary. Preliminary analysis indicates that a new import path will be needed before 2030 to solve angular stability issues on the north (Singleton) and west (Fayette) import paths Analysis is ongoing April 5th,2011 19 LTS

20. Future Economic Studies Map the simplified transmission model to Promod Remove and replace any generation added for stability with generation fuel / location derived from Promod results. Perform a Promod run, identifying LMP values at each bus Identify opportunities for economic projects LTS April 5th,2011 20

21. Questions? LTS April 5th,2011 21