Potential Planning & Operations Enhancements

Luminant Energy

November 10, 2011

2

Executive SummaryOctober 21, 2011 Special ROS Meeting

• We learned that ERCOT has 30 minutes to develop a Mitigation Plan (MP) for SCED Irresolvable events

• If they can do so, then there is no reliability issue in Operations.

• If they do not, then a transmission watch is issued (and very few were ever issued).

• Most of these MPs involve post-contingency load shed plan of some sort.

Key Questions to Answer

• Are we all comfortable with a heavy reliance on MPs involving load shed?

• Is that how the Board wants us to plan to operate the system?

Purpose of this Presentation

• Illustrate operational exposure still being missed by 5-Year Plan process

• Suggestions to streamline RPG process for 5-Year Plan reliability projects

• Request that ROS pursue LCRA’s suggestion to form an ah-hoc task force to take a closer look at these issues.

Aug 2/2011 Aug 3/2011 Aug 4/2011 Aug 5/2011 Aug 23/2011 Aug 24/2011

Operational Exposure During August 2011 EEAs Review of Sample Post Contingency Loading During August 2011 EEA Events

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Apollo-Richardson East 138 kV

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Firewheel-Olinger 138 kV

Refer to slide 9 & 10 in the Appendix for more August 2011 EEA related post-contingency overloads

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Jim Christal- West Denton 138 kV

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Fort Worth - West Denton 138 kV

Is the 5-Yr Plan Already Identifying These Issues?Examining data from 2PM to 8PM during July – August 2011 to minimize impact of transmission outages

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One (1) of the 14 SCED non EEA “insecure” constraints1 were identified by the 5-Year Plan. Half have no TPIT project identified.

1) Insecure as described in Protocol Section 6.5.7.1.10 for 30 or more consecutive minutes

Note: non EEA related overloads in SCED

Count Overload FacilityCongestion

Cost

TotalInsecure

StateEpisodes

InsecureState

Duration(Hours)

5-YearPlan

ReliabilityProject

TPIT "FutureProject"

byPeak Of:

Total $38,501,943 26 37.01 CARROLLTON NORTHWEST - LAKEPOINTE 138 kV $8,797,767 6 9.0 20142 MORGAN CREEK SES - CHINA GROVE SWITCH 138 kV $3,527,538 2 5.53 SAGINAW SWITCH - AMERICAN MFG TAP 138 kV $3,479,618 3 5.0 20204 ALLEN SWITCH - PLANO CUSTER ROAD 138 kV $3,716,757 1 3.3 20135 PH ROBINSON Auto (PHR_AT1) $6,081,901 2 3.0 20126 LAKEMONT 1 TAP - LOMBARDY LANE 138 kV $1,842,986 3 2.37 SINTON - SKIDMORE 69 kV $168,394 2 1.88 SOUTH LANE CITY - NEW GULF 138 kV $1,638,167 1 1.5 2012 20129 BEN DAVIS TMPP - PKRMX 138 kV $1,151,822 1 1.5

10 SMITHERS - BELLAIRE 345 kV $7,144,154 1 1.311 ODESSA NORTH - NORTH COWDEN 69 kV $91,692 1 1.0 202012 CHAPPEL HILL - WALLER LCRA 138 kV $515,897 1 0.813 NALL LANE - BRIARCREST 69 kV $93,021 1 0.8 201214 CHINA GROVE SWITCH - BLUFF CREEK SWITCH 138 kV $252,229 1 0.5

Total Count 1 7

Congestion

Rent

How Long Do These Overloads Typically Last?View of Post Contingency Loading of NW Carrollton – Lake Point 138 kV Line on select SCED Irresolvable Days

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Post contingency overload duration 2.5X longer than SCED Irresolvable

July 7, 2011

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SCED Insecure ~45 minutes

July 8, 2011

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SCED Insecure ~ 2 hrs & 15 minutes

July 14, 2011

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SCED Insecure ~15 minutes

July 15, 2011

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SCED Insecure ~4 hours

Are There Process Improvements That Can Help?

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Of the 26 transmission upgrades recommended by the 5-Year Plan for summer 2011, few were implemented due to process barriers

Operations

Proj.#

2010 5-Year Plan: Reliability Projects Needed by Summer 2011TPITProj

InterimRAP / MP

Implemented

InsecureState in RT Observed

R2 Victoria – North Victoria 69 kV line upgrade 2012 MP (6/1/11)

R3 Texas City Water Treatment Sub – Intercity – LaMarque 69 kV line upgrade 2012

R7 Odessa 69 kV: Odessa North - Odessa Basin SS - MP (6/30/11)

R7 Odessa 69 kV: Odessa Basin SS - Odessa Basin - MP (6/30/11)R7 Odessa 69 kV: Odessa Basin - Goldsmith - MP (6/30/11)R7 Odessa 69 kV: Goldsmith - Ector Shell - MP (6/30/11)R7 Odessa 69 kV: Ector Shell - Holt - MP (6/30/11)

R7 Odessa 69 kV: Holt - Emma Tap - MP (6/30/11)R8 Odessa 138 kV: Moss - Westover - -R8 Odessa 138 kV: Westover - Amoco S. Foster - -R8 Odessa 138 kV: Amoco S. Foster - Odessa North - -R8 Odessa 138 kV: Odessa North - Odessa #2 2014 -

R9 Pegasus – South Pegasus Tap 138 kV line conversion 2011 -R10 Midland East – Windwood 138 kV line upgrade 2013 -R12 Denton area: West Denton - Jim Christal 138 kV Line - MP (8/20/11)

R12 Denton area: Jim Christal - North Denton 138 kV Line - MP (8/20/11)

R12 Denton area: West Denton - Fort Worth 138 kV Line - -R12 Denton area: Fort Worth - Teasley 138 kV Line - -R12 Denton area: Teasley - Pockrus 138 kV Line - -R20 Apollo – East Richardson 138 kV line upgrade 2013 -

R23 Northaven – Welch Road 138 kV double circuit upgrade 2014 -R33 San Angelo Concho 138/69 kV autotransformer upgrade - -R34 Leakey – Campwood 69 kV line terminal equipment upgrade - -R37 General Motors – Great Southwest #1 circuit upgrade 2013 -R38 Handley – Hurst 138 kV line upgrade 2012 -R40 Roanoke Switch – Southlake 138 kV line upgrade 2012 -

Risk mitigated prior to July 1st 8Risk mitigated after July 1st 2Risk not mitigated 16

TSP Response

Are There Some Process Improvements That Can Help?Timely 5-Year Plan – Establish an earlier, consistent publishing date for the 5-year plan.

– The 2010 5-Year Plan was published in March 2011.– 17 of 26 projects needed by summer 2011 had been newly identified

in the 2010 Plan.Optimize RPG Review Process – Streamline RPG approval process

– RPG review was required for many of the aforementioned projects (6-9 month delay)

– Exempt all 5-Year Plan ‘reliability’ endorsed projects costing less than $50 million

– Grant ‘urgent’ RPG review of all remaining projects with a need date of less than 36 months.

Facilitate RAP Development – Clarify assignment of responsibility for RAP development

– No clear linkage of RAP recommendation in 5-Year Plan to implementation

These suggested improvements can be reviewed further in the ad-hoc ROS task force.

Appendix

Aug 2/2011 Aug 3/2011 Aug 4/2011 Aug 5/2011 Aug 23/2011 Aug 24/2011

Operational Exposure During August 2011 EEAs Review of Sample Post Contingency Loading During August 2011 EEA Events

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Terrell Sw 138/69 kV Autotransformer

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Glen Rose-Meridian 69 kV

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Formosa 138/69 kV Autotransformer

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Sinton-Skidmore 69 kV

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Four (4) of the top 20 EEA post-contingency overloads were identified

Note: this is the top 20 (in max loading) out of 72 EEA related overloads

Is the 5-Yr Plan Already Identifying These Issues?Examining data from EEA time periods during of August 2011 to minimize impact of transmission outages

Count Binding FacilityMaximum Loading

(%)

5-Year Plan

Reliability Project

TPIT "Future Project" by

peak of:1 SINTON--SKIDMORE 69 KV 133.82 TERRELL SWITCH 138/69 KV AUTOTRANSFORMER 132.53 LON HILL--SMITH 69 KV 126.74 APOLLO--RICHARDSON EAST 138 KV 125.6 2011 20135 GLEN ROSE--MERIDIAN 69 KV 123.86 CHASE FIELD TAP--SKIDMORE 69 KV 123.37 FIREWHEEL--OLINGER 138 KV 123.18 FORMOSA 138/69 KV AUTOTRANSFORMER 121.09 BARCLAY--SILVER CITY 69 KV 120.5 201210 AIRLINE CSW--CABANISS 138 KV 120.211 EDROY--SMITH 69 KV 120.212 JIM CHRISTAL SUBSTATION--WEST DENTON 138 KV 118.5 2011 201413 EDROY--MATHIS 138 KV 116.514 DENTON STEAM 138/69 KV AUTOTRANSFORMER 115.615 SPENCER TMPP--DENTON STEAM 69 KV 115.516 HIWAY 9--AIR LIQUID AEP 69 KV 115.517 REAGOR SPRINGS--BARRY TMPP 69 KV 115.518 FORT WORTH SUBSTATION--WEST DENTON 138 KV 115.4 2011 201419 BEEVILLE--CHASE FIELD TAP 69 KV 115.120 JIM CHRISTAL SUBSTATION--NORTH DENTON 138 KV 114.8 2011 2014

How Long Do These Overloads Typically Last?

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During a sample 2 week period in July1, the NSA2 > 100% for ~32 hours1) By late July, Luminant proposed a RAP that ERCOT implemented on August 2, 2011. 2) NSA is Network Security Analyzer

Post Contingency Loading of NW Carrollton - Lake Point 138 kV LineAssociated with Lewisville 345/138 kV Contingency

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7/3/2011

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7/15/2011

7/16/2011

$190,600,000 , 32%

$397,400,000 , 68%

Non EEA SCED Irresolvable >30 Minutes

All other SCED Congestion

$38,500,000 , 20%

$152,100,000 , 80%

Non EEA SCED Irresolvable - July / Aug 2PM to 8PM

Non EEA SCED Irresolvable - All Other Hours

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Co-Benefits Of Increased Operational Efficiency

During the first 10 months after Nodal Go-Live, 32% of all congestion cost occurred due to SCED irresolvable episodes lasting 30+ minutes

$588 Million total congestion rent

$191 Million SCED Irresolvable congestion rent