Transmission Options for Mariah Project, Phase II

1. Transmission Options for Mariah Project, Phase II 3/10/2010

2. Proposed Agenda • A Quick Mariah Project Update • Land lease status • ERCOT application • SPP application • Tres Amigas • Present Mariah Interconnection Solutions • Discuss Potential Mariah/AEP Cooperation: • Interconnection of Sherman/Dallam to Hitchland, Tres Amigas, HPX • Timing • Possibilities for signing letter of intent • Interconnection business model alternatives • Tres Amigas/Hitchland interconnection, possibilities for Mariah interconnection • Tallgrass Line And Other Bottlenecks – How can Mariah project contribute to optimum grid solutions • Other items

3. Assumptions Notes • Phase I and II installed capacity and actual capacity • Phase I • Parmer 1250 MW • Sherman 1000 MW • Phase II • Parmer 1750 MW – total 3000 MW • Sherman 1000 MW – total 2000 MW Actual capacity - 10% Operating reserve (other ancillaries services) -10 % Losses = 80 % installed capacity for sale into the different markets 2) The sales are assumed to be under long-term contracts for energy deliveries that count as renewable energy and therefore will be at prices that include a renewable premium. 3) Any surplus energy produced over the long-term sales will be sold in the local imbalance market, that is SPP, ERCOT or New Mexico (WECC). 4) Transmission lines between Mariah and TASS/ERCOT/SPP are shown in orange and red. Without a full study and optimization of capacity required, required TASS capacity is estimated at: Phase 2: ERCOT–WECC 1500-2000 MW SPP–WECC 750-1000 MW ERCOT–SPP 500-750 MW 5) Optionally, if capacity is available at low prices, 500 MW each for WECC–SPP; SPP–ERCOT; WECC–ERCOT. This will provide operational flexibility. 6) It is assumed that other transmission (shown in green dashed lines) will be built by third parties to access TASS.

4. Mariah interconnection solutions Phase II 1 000 MW SPP-Hitchland Phase III 5 000 MW Dallam Sherman Phase I 1 000 MW Phase I 1250 MW Parmer TresAmigas SuperStation ERCOT-Nazareth Phase II 3000 MW SPP-Toke? Owned by Mariah, built by AEP? Alt. routing, owned by Mariah, built by AEP? Public interconnection between TASS-SPP and TASS-ERCOT? Owned by Mariah, built by Sharyland?

5. TASS MWF-S MWF-P G3 G2 G5 G1 G6 G4 Phase II – 2015/2016 CA PJM MISO In Phase 2, MWF-S (Sherman) is interconnected to SPP through a 2000 MW line. Assume that sales to the East and West are: 1) 300 MW in PJM requiring 300 MW of transmission between MISO & PJM 2) 300 MW in MISO requiring 600 MW of transmission between SPP & MISO 3) 400 MW in SPP 4) Remaining 500 MW exported to WECC MWF-P (Parmer) is interconnected to TASS by a 1250 MW line and to ERCOT via 3000 MW of CREZ transmission. Assume that sales to the West and East are: 1) 500 MW in CA requiring 500 MW of transmission between AZ and CA 2) 500 MW in AZ requiring 1000 MW of transmission between NM and AZ 3) 700 MW in NM requiring 1700 MW of transmission between TASS and NM 4) Remaining 700 MW exported to SPP AZ Phase 1+2; 2000 MW Sherman – Tallgrass SPP NM 2000 MW 750 - 1000 MW 1500 - 2000 MW 500 - 750 MW 3000 MW ERCOT 1250 MW Phase 1+2; 3000 MW Parmer – TASS Up to 1250 MW Parmer - ERCOT Phase 1+2; 3000 MW Parmer – TASS Up to 1250 MW Parmer - ERCOT