Houston Region Import Capacity Project Planning for Reliable Power.

Houston Region Import Capacity Project

Planning for Reliable Power

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The Houston region is experiencing significant economic growth in the residential and industrial sectors.

Economic and population growth could greatly strain the Houston region’s existing electric infrastructure, including the power grid.

To meet a growing demand for electricity in the coming years, new transmission lines must be built now to access power located in other parts of the ERCOT region.

Failure to do so may limit the Houston region’s ability to grow and prosper. Additional benefits for the electric transmission grid in the ERCOT region will

also be achieved.

Houston Region Import Capacity Project Overview

We must act now to secure reliable power for the Houston Region.

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The Electric Reliability Council of Texas (ERCOT) has acknowledged a need for an additional “import path” using a high-voltage transmission line into the Houston area.o “Three of the highest congested areas relate to importing power into the Houston area from the north” -

2012 ERCOT Constraints and Needs report o “Houston region will need at least one additional import path in the next ten years” – 2012 ERCOT Long-

Term Studyo “Retirement of legacy gas-fired power plants would increase need for expanded import capacity within the

Dallas/Fort Worth and Houston regions” – 2012 ERCOT Long-Term Study CenterPoint Energy has performed a study to consider the import needs for the Houston region based on

planning criteria for ERCOT and the Company. The study indicates that there is a need for additional import capacity starting in 2018 to ensure reliable power.

CenterPoint Energy considered 25 alternatives to address the import needs, and it ultimately proposed three alternative projects for consideration.

Public comments are due on August 16, 2013, to the ERCOT Regional Planning Group, who will consider the study.

ERCOT will either select one of CenterPoint Energy’s three proposed projects, select one of the other 22 options studied, or ERCOT will develop and recommend an alternative option that it develops.

Houston Region Import Capacity Project Summary

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A thriving economy. The Houston region’s business-friendly environment has sustained and will continue to sustain load growth. Houston and surrounding areas have been growing at a steady pace equaling or exceeding the national average electrical usage growth rate. o Additional load adds stress to the import constraint

o The only industrial load increases modeled are the new load for which firm commitments had been made at the time the studies were prepared.

Sufficient generation has not been added to keep up with growth. As a result, we have to depend on importing significant amounts of power from other ERCOT regions to maintain reliable power. o Consistent with ERCOT Planning Guides, only new generating units that have made firm commitments were

modeled in the study.

o Over the past several years, announcements to build new generating units in the Houston region have been made, but very few have followed through with firm commitments and actual construction.

o The study assumes all mothball units are in service and there are no retirements of existing generating units over next 5 years.

The capacity to import power into the Houston region is reaching maximum threshold.

Key Drivers of the Houston Region Import Constraint

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Grant Substation

* Twin Oak Substation is owned by Oncor Electric Delivery Company.** Ragan Creek Substation is a proposed CenterPoint Energy 345 kV substation to be constructed as

part of the project.

OptionImport

Increase(MW)

New 345kVStructure

MilesCost ($MM) MW/$MM

Option 1: Twin Oak-Zenith* 2529 110 516 4.90

Option 2: Ragan Creek-Zenith** 1981 65 375 5.28

Option 3: Limestone-Ragan Creek-Zenith** 2709 148 719 3.77

Houston Region Import Capacity Project Proposed Interconnection Alternatives

Study OptionImport

Increase(MW1)

New 345 kVStructure

MilesCost ($MM2) MW/$MM3

Option 15: Twin Oak-Zenith* 2701 117 462 5.85

Option 24: Ragan Creek-Zenith** 1960 69 297 6.60

Option 25: Limestone-Ragan Creek-Zenith** 2532 130 532 4.76

1 Megawatts2 Millions3 Megawatts per Million Dollars

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Houston Region Import Capacity Project Duration Start Finish

Submit Study to ERCOT July 2013 July 2013

ERCOT Review of Project 6 Months July 2013 January 2014

Routing Study, Environmental Assessment, and Public Meetings 9 Months January 2014 September 2014

File CCN/PUCT Review 6 months October 2014 March 2015

PUCT Approval March 2015 March 2015

ROW Activities 12 months April 2015 April 2016

Transmission Construction 15 months May 2016 July 2017

Houston Region Import Capacity Project Proposed Timeline

ERCOT Electric Reliability Council of TexasCCN Certificate of Convenience and NecessityPUCT Public Utility Commission of TexasROW Right-of-Way

Acronyms

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Grant Substation

CenterPoint Energy submitted the study to ERCOT for review and approval in July of 2013, recommending three alternatives for increasing Houston import capacity to achieve reliable power for future growth.

ERCOT will perform an independent analysis to determine one final recommended project.

To meet ERCOT Planning Criteria and the future growth needs of the Houston region, the project needs to be completed before the start of the 2018 summer season.

Houston Region Import Capacity Project Conclusion