1 2009 west to north csc location scenario 3b wms august 20, 2008

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2009 West to North 2009 West to North CSC LocationCSC Location

Scenario 3bScenario 3b

WMSWMSAugust 20, 2008August 20, 2008

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Since Inception of Market in 2001 Since Inception of Market in 2001 through 2008 the W-N CSC has been through 2008 the W-N CSC has been the double circuit 345kV Line the double circuit 345kV Line Graham-Parker/Graham-Benbrook.Graham-Parker/Graham-Benbrook. Before fall of 2007, the W-N CSC Before fall of 2007, the W-N CSC

experienced little or no congestion.experienced little or no congestion. Wind generation additions have altered Wind generation additions have altered

the situation with frequent congestion the situation with frequent congestion expected to persist well into Nodal expected to persist well into Nodal Market operations.Market operations.

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Arguments for moving the W-N CSC to the west of Arguments for moving the W-N CSC to the west of Graham:Graham:

Luminant :Luminant :““The 2009 summer peak case shows a substation that The 2009 summer peak case shows a substation that

is being installed between Graham and Long Creek, is being installed between Graham and Long Creek, called the Cook Field station, …called the Cook Field station, … There is a new 165 MW wind facility that will connect to There is a new 165 MW wind facility that will connect to

this station.this station. The station is scheduled to be completed in October The station is scheduled to be completed in October

2008, thus be operational the entire 2009 calendar 2008, thus be operational the entire 2009 calendar year.year.

The The possibility possibility that the currently constraining element that the currently constraining element from Abilene Mulberry Creek to Long Creek will move to from Abilene Mulberry Creek to Long Creek will move to the Graham to Cook Field line section once the new the Graham to Cook Field line section once the new station and wind generation are both installedstation and wind generation are both installed ””

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Arguments for moving the W-N CSC to the Arguments for moving the W-N CSC to the west of Graham:west of Graham:

Luminant :Luminant :““Most money spent (>47 million)”Most money spent (>47 million)” $47 million reflects contingencies on $47 million reflects contingencies on Fisher Fisher

Road – Oklaunion & BowmanRoad – Oklaunion & Bowman associated associated with outages for reconductoring of static with outages for reconductoring of static wire for Graham – Long Creek and Graham – wire for Graham – Long Creek and Graham – Sweetwater etc. that lasted from 2/4/2008 Sweetwater etc. that lasted from 2/4/2008 through 4/13/2008. through 4/13/2008.

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Arguments for moving the W-N CSC to the west of Arguments for moving the W-N CSC to the west of Graham:Graham:

Direct Energy :Direct Energy :““After reviewing Scenarios #3d, 3e, and 5, DE believes After reviewing Scenarios #3d, 3e, and 5, DE believes

it might be time to look at the West in another light. it might be time to look at the West in another light. We would like to consider scenarios with five zones We would like to consider scenarios with five zones and the following CSCs:and the following CSCs:1) Singleton - THW/O'Brien1) Singleton - THW/O'Brien2) Tradinghouse / Lake Creek - Temple / Pecan Creek2) Tradinghouse / Lake Creek - Temple / Pecan Creek3) Graham - Parker / Benbrook3) Graham - Parker / Benbrook4) either:4) either:Graham - TonkawaGraham - TonkawaGraham - MurrayGraham - MurrayPaint Creek – Radium”Paint Creek – Radium”

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Arguments for not changing the CSC (Scenario 3b):Arguments for not changing the CSC (Scenario 3b):

ERCOT :ERCOT :At the 8/1 CMWG meeting ERCOT endorsed the existing At the 8/1 CMWG meeting ERCOT endorsed the existing

W-N CSC as its recommendation. W-N CSC as its recommendation.

When asked for supporting reasons, ERCOT When asked for supporting reasons, ERCOT representatives stated that under some representatives stated that under some circumstances , if the CSC is located west of Graham, circumstances , if the CSC is located west of Graham, the generation at Graham may receive the wrong the generation at Graham may receive the wrong price signals.price signals.

ERCOT stated also that the limiting element for W-N ERCOT stated also that the limiting element for W-N dynamic stability remains East of Grahamdynamic stability remains East of Graham

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Arguments for not changing the CSC (Scenario Arguments for not changing the CSC (Scenario 3b):3b):

If the CSC is moved, this will displace load to the If the CSC is moved, this will displace load to the North from Jan. 1 North from Jan. 1 untiluntil the implementation of the implementation of the Nodal market, it will then revert to the West the Nodal market, it will then revert to the West zone.zone.

Nodal ProtocolsNodal Protocols§3.4.1(2): §3.4.1(2): The Competitive Load Zones are the four zones in effect The Competitive Load Zones are the four zones in effect

during the 2003 ERCOT market …during the 2003 ERCOT market … §3.4.2: §3.4.2: Load Zones may be added, deleted, or changed, only when Load Zones may be added, deleted, or changed, only when

approved by the ERCOT Boardapproved by the ERCOT Board ….Approved additions, deletions, ….Approved additions, deletions, or changes go into effect 36 months after the end of the month or changes go into effect 36 months after the end of the month in which the addition, deletion, or change was approved.in which the addition, deletion, or change was approved.

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Proposal 3b is based upon the same W-N Proposal 3b is based upon the same W-N CSC as 2003, thus the movement in load CSC as 2003, thus the movement in load from the West zone to the North Zone will from the West zone to the North Zone will be minimal (estimated 9MW.)be minimal (estimated 9MW.)

Proposal 3g will temporarily relocate 766 Proposal 3g will temporarily relocate 766 MW of load from West to North (20% of the MW of load from West to North (20% of the current West zone load.)current West zone load.)

Proposal 3h will temporarily relocate 785 Proposal 3h will temporarily relocate 785 MW of load from the West to North (20% of MW of load from the West to North (20% of the current West zone load.)the current West zone load.)

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Generation at Graham has historically been Generation at Graham has historically been included in the West zone, in part because of included in the West zone, in part because of competitiveness concerns. competitiveness concerns.

Competition appears to have grown because of Competition appears to have grown because of the addition of West zone wind generation. the addition of West zone wind generation.

However, Wind generation can compete to However, Wind generation can compete to resolve West to North congestion, but cannot resolve West to North congestion, but cannot compete to resolve North to West congestion if compete to resolve North to West congestion if the wind does not blow.the wind does not blow.

1 2009 west to north csc location scenario 3b wms august 20, 2008

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