THE TRES AMIGAS SUPERSTATION Project Overview and Status Report to ERCOT Regional Planning Group May 21, 2013 UNITING THE NATION’S ELECTRIC POWER GRID.

THE TRES AMIGAS SUPERSTATION

Project Overview and Status Report

to ERCOT Regional Planning Group

May 21, 2013

UNITING THE NATION’S ELECTRIC POWER GRID

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Tres Amigas Presentation Team

David Stidham, COO and Senior VP, Tres Amigas

Ziad Alawyan, CEO, ZGlobal and member of Board of Directors, Tres Amigas (by remote)

Andre Canelhas, Managing Director, HVDC Solutions LLP

Pat Wilkins, ERCOT Representative, Tres Amigas

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Presentation Agenda

I. Tres Amigas Background

II. Voltage Source Converter Technology Overview

III. VSC Capabilities and Grid Benefits

IV. Tres Amigas Project Development Aspects

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Background – Investment and Milestone History

20092009 2011201120102010 20122012

New InvestorsNew Investors

Key Milestones

Key Milestones

Energy IT Optimization Inc.

Attracted TA’s first strategic investment from American Superconductor

Signed the option to enter into a 99-year lease with the State of New Mexico

Signed 99-year lease for 16,000 acres

Received FERC approval to sell transmission at negotiated rates

Entered into a supply Agreement for VSCs with Alstom

Received the first Series-B investment from Hennepin Ventures

Legislation passed in State of New Mexico exempting Tres Amigas from Gross Receipts Tax

Received the second Series-B investment from Mitsui & Co.

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Background – Project Strategically Located

Tres Amigas Is Ideally Situated in Eastern New Mexico Near the Borders of CO, OK and TX Serving as a Three-Way Interconnection of

WECC, Eastern and ERCOT

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Background – Phased Development

WECC750 MW

SPP750 MW

ERCOT0 MW

WECC750 MW

SPP2250 MW

ERCOT1500 MW

WECC750 MW

SPP2250 MW

ERCOT1500 MW

Phase II (a) Phase II (b)Phase I

• 750 MW AC line

• 2 components:

• Tres Amigas Substation to Public Service of New Mexico’s Blackwater Substation (TA to WECC)

• Tres Amigas will be a Balancing Authority in WECC

• Tres Amigas Substation to SPS’s Tolk Substation (TA to SPP)

• Construction to begin in 2Q13 and completed by 2Q16

• 1500 MW merchant AC Line

• Line will run from Tres Amigas to ERCOT with interconnection at a Panhandle CREZ line point to be determined by ERCOT

• DC conversion will occur either at ERCOT interconnection point or Tres Amigas - TBD

• Not synchronous between SPP and ERCOT

• Construction to be begin pending regulatory approvals with COD mid 2017

• Line runs from Tres Amigas to the Potter Substation

• Configuration TBD

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Background - Regulatory History and Status

March, 2010 - FERC issued approval of negotiated rate authority (not cost-based) to Tres Amigas to sell transmission service

October 7, 2012 – Phase I Interconnection Agreement with Public Service of New Mexico approved by FERC

April 8, 2013 – Phase I Interconnection Agreement with SPP and SPS/Xcel Energy approved by FERC

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Background – Proposed Transmission Routing

Line constructed for single circuit operation in Phase

1 and expanded to double-circuit in Phase 2

Phase 1

Phase 2

Phase 2

Phase 1 & 2

Phase 2

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VSC Technology – How Does It Work

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VSC Technology - Multi-Level Converter

Output Voltage

Multi-level VSC

+Steady DC Voltage Input

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VSC Technology - Modular Multi-Level Converter (MMC)

- ½ Vdc

+ ½ Vdc

iac

Iac/2

Iac/2

Idc

Idc

Idc/3Vs Vc

VcVs

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VSC and Super Station Capabilities

Normal Active and Reactive power exchange determined and controlled independently;

Active and reactive power controlled electronically accurate in real time to the micro-second;

Fire-wall for system disturbances; Emergency power control and power modulation as well as run-back

programed as prescribed by network planning studies; Voltage control; Frequency control; Damping of electro-mechanical oscillations;

Tres Amigas will offer robust and reliable grid solutions to increase overall reliability and efficiency.

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VSC and Superstation Grid Benefits

Black-start and grid restoration; Strategic operation supported by powerful simulation center with state of the

art tools and capability to adapt control algorithms as needed; Interaction with transmission owners with information exchange process

designed to capture, study and offer solutions to serve grid needs towards efficiency and reliability;

Competent people being developed and trained by working hands-on throughout system development

Tres Amigas will offer ancillary and grid support services to increase overall reliability.

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Project Development - ERCOT IA Process Initial Steps

April 2, 2013 – Tres Amigas team briefed PUCT commissioners and staff on project development and status

April 8, 2013- TA submitted notification to ERCOT as specified under Process for Evaluating Transmission Projects Related to Asynchronous Ties

April 12, 2013 – ERCOT notified RPG of TA IA notification and designated Sharyland as lead TSP for system impact analysis

May 15, 2013 – Reliability study scoping meeting among Sharyland, ERCOT, Cross Texas Transmission and Tres Amigas

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Project Development - Interconnection Reconfiguration

Based on concerns expressed by the PUCT commissioners, TA began an evaluation of a reconfiguration of its ERCOT interconnection:

–Installation of two VSCs at Hereford Windmill location

–Two separate DC lines from Windmill to Tres Amigas main station in New Mexico

–Initiating RFP processes for VSCs and DC line construction

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WECC750 MW

SPP750 MW

ERCOT0 MW

Phase 1

WECC750 MW

SPP2250 MW

ERCOT1500 MW

Phase 2 (a)

2 x 750 MW VSC Converters back-to-back at Tres Amigas Super Station

2 x 750 MW VSC Converter at Tres Amigas Super Station2 x 750 MW VSC Converters at Hereford, TX

AC ACDC 1 Station

= =

=

=

AC

DCStation 2

AC

Station 1 =

=

= =

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Project Development - Two Types of Interconnection

The possibility to interconnect the converters by a super-node remains available

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Project Development - Phase 2

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Project Development - Timeline

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Phase II (a)

Incremental Capacity: 1,500 MW for ERCOT and SPP

Phase II (b)

Incremental Capacity: 2,250 MW for ERCOT and SPP

Phase I

Incremental Capacity: 750MW for WECC and SPP

OperationConstruction

OperationConstruction

OperationConstruction

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More information available at www.tresamigasllc.com

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Tres Amigas SuperStation….

Uniting the Electric Grid