Lower Rio Grande Valley (LRGV) 345 kV Project

1. Lower Rio Grande Valley (LRGV) 345 kV Project

2. Lower Rio Grande Valley 345 kV Project • AEPSC Proposal • Construct a new 148 mile, 345kV transmission line from Laredo Lobo to Rio Bravo to Del Sol, a new 345kV switching station on the west side of the LRGV, utilizing 2-954 ACSR conductor on double-circuit capable structures, and a 24 ohm 3600 amp series capacitor on the Lobo 345 kV circuit • Construct a new 15 mile, 345kV transmission line from Del Sol to North Edinburg utilizing 2-954 ACSR conductor on double-circuit capable structures • Construct a new 15 mile, 345kV transmission line from Del Sol to Frontera utilizing 2-954 ACSR conductor on double-circuit capable structures • Estimated to cost approximately $380 million RPG Meeting

3. Study models & Criteria • 2016 Summer Peak base case based on the latest (April 28, 2010) 2011 SSWG Data set B • 2020 Summer Peak base case based on the DOE 2020 Long-term study • Two wind farms with recent signed generator interconnections added to the base case and dispatched @ 10% capacity: • Los Vientos 400 MW Wind in Cameron County • Magic Valley 200 MW Wind in Willacy County • Silas Ray unit 5 turned off • Contingencies: • the loss of a transmission line, with the largest LRGV generation station out of service. (N-1 + G-1) for reliability criteria • the loss of a transmission line, with the prior outage (maintenance outage) of a transmission line (N-1-1) will be studied to determine the transfer capability but not used as a reliability criteria RPG Meeting

4. Project Options studied for 2016 • Option 1 - AEPSC proposal • Option 2 - AEPSC proposal with 600/750 MVA 345 kV, ± 48º Phase shifting transformer • Option 3 – Construct approximately 145 mile, 345kV transmission line from Laredo Lobo to North Edinburg, utilizing 2-954 ACSR conductor on double-circuit capable structures with 600/750 MVA 345 kV, ± 48º Phase shifting transformer • Option 4 – Construct approximately ~ 200 mile, 345kV transmission line from San Miguel to North Edinburg, utilizing 2-954 ACSR conductor on double-circuit capable structures with 50% Series Compensation • Option 5 – Construct approximately ~ 200 mile, 345kV transmission line from Pawnee to North Edinburg, utilizing 2-954 ACSR conductor on double-circuit capable structures with 50% Series Compensation RPG Meeting

5. 2016 Study Results for N-1 + G-1 LRGV Load MW * Load forecasts do not include the 250 MW new load in Brownsville RPG Meeting

6. Project Options studied for 2020 • Option 1A – Option 1 + Re-conductor both Lon Hill – North Edinburg 345 kV and Nelson Sharpe – Ajo – Rio Hondo 345 kV • Option 3A – Option 3 + Re-conductor both Lon Hill – North Edinburg 345 kV and Nelson Sharpe – Ajo – Rio Hondo 345 kV Re-Conductor • Option 5A – Option 5 + Re-conductor both Lon Hill – North Edinburg 345 kV and Nelson Sharpe – Ajo – Rio Hondo 345 kV • Option 3_5 – Option 3 + Option 5 RPG Meeting

7. 2020 Study Results for N-1 + G-1 LRGV Load MW * Load forecasts do not include the 250 MW new load in Brownsville RPG Meeting

8. Other Options and Considerations • Evaluate the optimal location for the PST (for option 2 and 3) • Study PST options for the existing 345 kV line in the Valley • HVDC line from Pawnee • Obtain cost estimates for the different options and determine the feasibility of construction to meet the projected load growth • Evaluate the different options to assess the impact on the local area constraints/mitigation RPG Meeting

9. Questions? March 12, 2010 RPG Meeting