1. Aug 17, 2012 RPG Meeting KEC & MEC – Load Addition Project – ERCOT Independent Review Ehsan Ur Rehman Planning Engineer ERCOT

2. 2 RPG Meeting Aug 17, 2012 Map – Study Area

3. 3 Aug. 17, 2012RPG Meeting Base Case Model & Assumptions Study Cases The 2016 Reliability Case from the 2011 5YTP Load Changes Load was updated/increased in the area of concern based on STEC’s submittal 2016 Case with 2017 loading :- STEC load: 1686 MW 2016 Case with 2021 loading :- STEC load: 1929 MW Transmission New Rio Bravo – Lobo 138 kV line (approx. 26 miles) Generation Changes Monticello 1 & 2 (in-service) Sam Bertron 1 & 2 (in-service) Greensbayou 5 (in-service) All other mothballed units (turned off)

4. 4 Aug 17, 2012RPG Meeting Project Options Five different options (A-E) were studied Upgrades common to all five options (East of Cotulla) Build a new Tilden – Fowlerton – Reveile 138 kV line (approx. 47 miles) on double circuit structures (on a New R.O.W) so that the circuit Rate B is at least 240 MVA Construct a new 138 kV substation near STEC’s 69 kV Cotulla and loop the AEP’s Dilley – Cotulla 138 kV line into it Add a 69/138 kV auto transformer (with reverse power relays) at Cotulla so that the Rate B is at least 150 MVA Add reverse power relays at Georgewest autotransformer Add 9.6 Mvar capacitor bank at Georgewest 69 kV substation Add 19.2 Mvar capacitor banks at Tilden, Fowlerton and Jardin 138 kV substation Switch The additional upgrades required (in addition to the above common upgrades) for the Five Options (A-E) discussed in the following slides

5. 5 Aug 17, 2012RPG Meeting Option A Option A Upgrades (69 kV HUB) Construct a 69 kV substation on AEP’s Carrizo – Crystal City 69 kV line and loop the STEC’s Brundage – Carrizo Springs 69 kV line into it Upgrade the auto transformer at Asherton so that the rate B is at least 150 MVA Upgrade Asherton – Carrizo 69 kV line (approx. 8.3 miles) so that the circuit Rate B is at least 120 MVA Upgrade Dilley – Cotulla 69 kV line (approx.15.8 miles) so that the circuit Rate B is at least 120 MVA Add 9.6 Mvar capacitor banks at Crystal City and Bigwells and Freer 69 kV substations Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Total Cost including common upgrades :- $ 62.2 million

6. 6 Aug 17, 2012RPG Meeting Option B Option B Upgrades (Bevo 69/138 kV substation) Construct a 138/69 kV Bevo substation near where LCRA’s Asherton – Conocco Chittam 138 kV line crosses STEC’s Carrizo Springs – West Crystal 69 kV line. Add a (69/138 kV) 150 MVA auto at BEVO Upgrade the auto transformer at Asherton so that the rate B is at least 150 MVA Upgrade Asherton – Carrizo 69 kV line (approx. 8.3 miles) so that the circuit Rate B is at least 120 MVA Upgrade Dilley – Cotulla 69 kV line (approx.15.8 miles) so that the circuit Rate B is at least 120 MVA Add 9.6 Mvar capacitor banks at Bigwells and Freer 69 kV substations Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Total Cost including common upgrades :- $ 64.2 million

7. 7 Aug 17, 2012RPG Meeting Option C Option C Upgrades (69 kV Hub & UNION substation) Construct a 138/69 kV Union substation near where AEP’s West Bates – Asherton 138 kV line crosses STEC’s Carrizo Springs – Brundage 69 kV line. Add a (69/138 kV) 150 MVA auto at UNION substation Construct a 69 kV substation on AEP’s Carrizo – Crystal City 69 kV line and loop the STEC’s Brundage – Carrizo Springs 69 kV line into it Install reverse power relays at 69/138 kV Asherton auto transformer Add 9.6 Mvar capacitor banks at Bigwells and Freer 69 kV substations Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Add 4.6 Mvar cap bank at Brundage 69 kV substation Total Cost including common upgrades :- $ 57.8 million

8. 8 Aug 17, 2012RPG Meeting Option D Option D Upgrades (69 kV Hub & BiGWells auto) Construct a 69 kV substation on AEP’s Carrizo – Crystal City 69 kV line and loop the STEC’s Brundage – Carrizo Springs 69 kV line into it Add a 69/138 kV auto transformer (with reverse power relays) at BigWells so the Rate B is at least 150 MVA Install reverse power relays at 69/138 kV auto transformer at Asherton Upgrade Bigwells – Brundage 69 kV line (approx. 11.10 miles) so that the circuit Rate B is 120 MVA Add 9.6 Mvar capacitor banks Freer 69 kV substation Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Add 4.6 Mvar cap bank at Brundage 69 kV substation Total Cost including common upgrades :- $ 58.81 million

9. 9 Aug 17, 2012RPG Meeting Option E Option E Upgrades (69 kV Hub & Bevo) Construct a 138/69 kV Bevo substation near where LCRA’s Asherton – Conocco Chittam 138 kV line crosses STEC’s Carrizo Springs – West Crystal 69 kV line. Add a (69/138 kV) 150 MVA auto at BEVO Construct a 69 kV substation on AEP’s Carrizo – Crystal City 69 kV line and loop the STEC’s Brundage – Carrizo Springs 69 kV line into it Add 9.6 Mvar capacitor bank Freer/Hollande 69 kV substation Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Add 4.6 Mvar cap bank at Brundage 69 kV substation Total Cost including common upgrades :- $ 55.2 million

10. 10 Aug 17, 2012RPG Meeting Cost Comparison Table

11. 11 RPG Meeting Jan 13, 2012 Option E Upgrades (Preferred Option)

12. 12 Aug 17, 2012RPG Meeting Summary for Option E Upgrades Option E Upgrades (69 kV Hub & Bevo) Build a new Tilden – Fowlerton – Reveile 138 kV line (approx. 47 miles) on double circuit structures (on a New R.OW) so that the circuit Rate B is at least 240 MVA Construct a new 138 kV substation near STEC’s 69 kV Cotulla and loop the AEP’s Dilley – Cotulla 138 kV line into it Add a 69/138 kV auto transformer (with reverse power relays) at Cotulla so that the Rate B is at least 150 MVA Add reverse power relays at Georgewest autotransformer Add 19.2 Mvar capacitor banks at Tilden, Fowlerton and Jardin 138 kV substation Switch Add 9.6 Mvar capacitor bank at Georgewest 69 kV substation Construct a 138/69 kV Bevo substation near where LCRA’s Asherton – Conocco Chittam 138 kV line crosses STEC’s Carrizo Springs – West Crystal 69 kV line. Add a (69/138 kV) 150 MVA auto at BEVO

13. 13 Aug 17, 2012RPG Meeting Summary for Option E Upgrades (cont.) Construct a 69 kV substation on AEP’s Carrizo – Crystal City 69 kV line and loop the STEC’s Brundage – Carrizo Springs 69 kV line into it Add 9.6 Mvar capacitor bank Freer/Hollande 69 kV substation Add 14.4 Mvar cap bank at Carrizo Springs 69 kV substation Add 4.6 Mvar cap bank at Brundage 69 kV substation Total Cost including common upgrades :- $ 55.2 million

14. 14 Aug 17, 2012RPG Meeting ERCOT Review Summary The preferred option for the KEC & MEC load addition project is Option E Option E upgrades is the least cost option that meets the reliable criteria (n-1 & g-1+n-1) and supports future load growth Option E is capable of supporting additional 15 % load beyond 2021 loading in the area The estimated cost of Option E ($55.2 million) has changed this RPG tier from 2 to 1 The goal is to take this projected to TAC and ERCOT BOD in September 2012

15. 15 September 17, 2010RPG Meeting March 12, 2010 Questions?