April 16, 2010

RPG Meeting

Lamesa Area UpgradesERCOT Independent Review

Jeff Billo

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Lamesa RPG Review History

• Three wind plants totaling 588 MW capacity signed IAs to interconnect to the 186 MVA Lamesa-China Grove 138-kV line between Q3 2007 and Q1 2009

• Gunsight wind plant signed IA to interconnect 120 MW to Ackerly Vealmoor-Getty Vealmoor 138-kV line in Q4 2007

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Lamesa RPG Review History

• Oncor submitted upgrade project to RPG in Q4 2007 to relieve congestion

– ERCOT analysis did not show enough economic benefit to justify cost of upgrades pre-CREZ

– Concluded that project should wait until more known about CREZ and how to integrate with CREZ

– Oncor withdrew project from RPG review

• Two of the three wind plants on the Lamesa-China Grove line cancelled IAs leaving only the 180 MW Bull Creek plant which is currently interconnected at the Willow Valley station

• Oncor resubmitted the Tier 1 RPG project with CREZ integration in Q4 2008

• ERCOT recommended Ackerly Vealmoor-Lamesa 69-kV line be upgraded and 138-kV double circuit capable as a reliability upgrade as part of the Permian Basin RMR exit strategy in Q3 2009

• ERCOT analyzed during the 2009 5YTP but did not see enough economic benefit to justify cost of additional upgrades

• ERCOT continued to analyze alternative upgrades after the 2009 5YTP

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Lamesa Area Upgrades – ERCOT Independent Review

• ERCOT analyzed submitted project and alternatives using 2009 5YTP final 2014 case

– Removed Bluff Creek-China Grove 138-kV line upgrade

• Leading alternate proposal– Concept:

• Reconfigure Willow Valley station to direct power from Bull Creek plant onto CREZ system

• Add Ackerly Vealmoor-Lamesa 138-kV circuit to complete 138-kV loop and relieve congestion on Ackerly Vealmoor 138/69-kV transformer

– Rebuild portion of Willow Valley-Lamesa 138-kV line (from Willow Valley to point where Long Draw-Grelton 345-kV CREZ line crosses the line) as double circuit 138-kV line

• Create 138-kV circuit from Willow Valley to Long Draw by utilizing new double circuit and the open position on the Long Draw-Grelton towers

– Reconfigure Willow Valley substation so that Gail-Exxon Sharon 138-kV line no longer passes through station

– Add 138-kV bus and 345/138-kV autotransformer at Long Draw

– Add Lamesa-Ackerly 138-kV circuit to to-be rebuilt 69-kV line

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Lamesa Area Upgrades Alternative Proposal

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Willow Valley Reconfiguration - Conceptual

To Bull Creek

To Exxon SharonTo Gail

Before

To Bull Creek

To Exxon SharonTo Gail

After

To Long Draw

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Lamesa Area Upgrades – Performance

• Production Cost Savings– Submitted project: $2.35 M

– Alternate project: $6.51 M

• Estimated Capital Cost

– Submitted project: $65 M (after taking into account already approved projects)

– Alternate project: $31.9 M

• Capital cost to Annual Production Cost Savings Ratio

– Submitted project: 27.7 – does not pass economic criteria

– Alternate project: 4.9 – passes economic criteria

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Lamesa Area Upgrades

• Other considerations

– Alternative project does not change the interconnection of Bull Creek plant but will change how power from Bull Creek plant flows on system

• Project justification is based on societal benefit

– CREZ Long Draw-Sand Bluff 345-kV towers may be lower cost compared to Long Draw-Grelton towers for Willow Valley-Long Draw 138-kV circuit

• At time of analysis Long Draw-Sand Bluff 345-kV line routing options were not public

• ERCOT IR will leave this option open to Oncor and WETT

• Next Step

– Finalize ERCOT Independent Review Report and prepare Recommendation Letter

• Final project will be Tier 2

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Questions?