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TRANSMISSION SYSTEM OVERVIEW TRANSMISSION SYSTEM OVERVIEW NETWORK OPERATING COMMITTEENETWORK OPERATING COMMITTEE

November 8, 2006November 8, 2006

New Mexico Transmission System New Mexico Transmission System OverviewOverview

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PNM Transmission System UsesPNM Transmission System Uses

Retail-PNM native load customers represent about 60% to 65% of system use

On 1/1/2007 PNM will merge TNMP’s NM facilities and customers

Wholesale-Transmission customers represent 35% to 40% of system use

Network transmission customers include:Tri State, WAPA, LAC, NEC, NTUA, City of Aztec and PNM

Point-to-point transmission customers include:EPE, TNMP, WAPA and PNMM

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A Few System Facts……A Few System Facts……

• 2006 PNM System Load 1855 MW• July 17, 2006 at 3 PM• Represents new all time peak, up 4.3% over 2005• Control Area peak load is about 2500 MW

• Line mileage (incl. jointly owned lines)• 165 miles of 500 kV (Outlet lines from Palo Verde)• 1556 miles of 345 kV• 180 miles of 230 kV• 1000 miles of 115 kV

• “Backbone” transmission lines are 150 to 200 miles in length.

• Majority of transmission lines built in late 1960s through the mid 1970s

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System Limit DeterminationsSystem Limit DeterminationsNERC/WECC Reliability Standards form the basis for system studies

AdequacySecurity

Must provide uninterrupted service even with any one facility being out of service

Transmission limits are dependent upon many factors such as voltage control devices and power factor, generation on-line,etc

Major path ratings subject to regional peer review, e.g. Path 48 in NNM and Path 47 in SNM

WECC Path Rating Catalog documents these major paths across the western grid (over 70 WECC Paths presently exist)

System limits are determined and compared to committed uses to form basis for op. procedures and capital expansion

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System CapabilitySystem Capability--Next 4 YearsNext 4 YearsFirm Annual Transmission Service ViewpointFirm Annual Transmission Service Viewpoint

2007 2008 2009 2010PNM Retail Loads 1474 1520 1562 1599

Customer Network Loads 680 683 707 713Point-to-point transmission Services 151 151 48 10Transmission Losses 91 89 86 86

Committed Uses 2396 2443 2403 2409

Path 48 Load-Side Resource (521) (604) (628) (628)

Total Path 48 Transmission Load 1875 1840 1763 1780

WECC Path 48-NNM Transmission Boundary Evaluation (North to Southeast)

Fast Ramp Capability to Offset TRM

Total NNM Transmission Capability (TTC) 1863 1912 1837 1818

(139) (59) (59) (59)

Transmission Reliability Margin (TRM) 127 131 133 133

Available Transmission Capability (ATC) 0 0 0 -36

Total Committed Use & Residual TRM 1863 1912 1837 1854

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WECC Path 48WECC Path 4820042004--06 Frequency Duration Curve06 Frequency Duration Curve

500

700

900

1100

1300

1500

1700

1900

0 1000 2000 3000 4000 5000 6000 7000 8000

NUMBER OF HOURS AT OR "ABOVE" PLOTTED MW LEVEL

Path

48

MW

Oct 2005 through September 2006

2005

2004

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Recently Completed System UpgradesRecently Completed System Upgrades

Valencia Division improvements, 10/2004Added needed capacity for growing loads

BA Station reconfiguration, 11/2004Improved reliability to “backbone” system

Project Power, June 2006Provided new transmission source for Santa Fe Area

Western NM Shunt Capacitor, 2006Provided voltage support for western 115 kV area

Upgrade of West Mesa-Algodones 115 kV line (“AL line”)Provided added thermal capacity for the AL line

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Santa Fe to Las Vegas 115kV transmission line improvement to accommodate Tri-State’s CNMIP

Cost Estimate: $2.3 million (Tri-State will cost-share)In-Service Date: Dec 2006

TNMP and Tri-State are rebuilding Alamogordo-Hollywood 115 kV line. TNMP’s portion of this rebuild consists of 14 miles between Alamogordo, NM and Tularosa, NM

TNMP’s Cost Estimate: $4.3 millionIn-Service Date: 1st quarter of 2007

Pachmann Switching Station construction to serve growing Rio Rancho area

Cost Estimate: $6.6 millionIn-Service Date: Nov 2007

Blackwater HVDC Station Life Extension, cooling and control systems

Cost Estimate: $12.5 millionIn-Service Date: 2007 and 2009

Corrales Bluffs-Southern Blvd 115 kV lineCost Estimate: $2.2 millionIn-Service Date: Dec 2007

Improve the reliability of service to loads served by Tri-State, TNMP, and EPE by operating all three lines into Alamogordo as a normally closed system

Cost Estimate: $3.2 millionIn-Service Date: 2007

Upgrade Belen-West Mesa 115 kV line Cost Estimate: $1.22 millionIn-Service Date: Dec 2007

Southern NM voltage support Cost Estimate: $1.2 millionIn-Service Date: June 2008

Rio Puerco Switching Station including 345/115 kV transformer and looping in the FW, WW and WN 345 kV lines

Cost Estimate: ~$50 millionIn-Service Date: 2009

Rio Puerco-Veranda 115 kV line Cost Estimate: $9 millionIn-Service Date: 2009

Alamogordo SVCCost Estimate: $8.6 millionIn-Service Date: 2009

PNM/TNMPPNM/TNMP--NM Planned FacilitiesNM Planned Facilities

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37 MW Biomass100 MW Wind

72 MW CC

102 MW Wind

520 MW Gas300 MW Wind200 MW Wind

(with signed LGIA)

51 MW Wind

FourCorners

San JuanShiprock

Ojo

Norton

Albuquerque Area

Network

Ambrosia

PEGSGallup

Espanola

Los Alamos

Taos

Algodones

Bluewater

Belen

Sandia

Black Water

Springer

McKinley

Springerville ~Clovis

Clapham

Bravo Dome

Las VegasSanta

Fe

WECC

SPP

345 kV Lines

115 kV Lines

Switching Stations

230 kV Lines

B-AWest Mesa

140 MW Gas (signed LGIA)

700 MWCoal

Active Interconnection RequestsActive Interconnection Requests

PNM NNM Transmission SystemPNM NNM Transmission System

85 MW Gas

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Wind Energy Potential in NMWind Energy Potential in NM

Map By created by TrueWindSolutions from MesoMap system using historical weather data

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Existing Wind Generation in New Existing Wind Generation in New MexicoMexico

Installed or under construction: 496 MW2 MW “Llano Estacado” near Clovis - Cielo Wind, hosted by Xcel Energy (1999, expanded in 2003)204MW “NMWEC” near Fort Summer – FPLE, hosted by PNM (2003)80MW “Caprock” near Tucumcari, Cielo Wind, hosted by Xcel Energy (2005)120MW ”San Juan Mesa Wind Project” near Elida, PadomaWind Power, hosted by Xcel Energy- ISD 12/31/200590 MW “Aragonne Mesa” Superior Wind, west of Santa Rosa, hosted by APS (ISD 12/2006)

Known Proposed Wind Farms753MW in PNM’s interconnection queue (incl. Aragonne)420 MW in Tri-State’s interconnection queue500 MW in El Paso Electric’s interconnection queue

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Existing New Mexico Wind Energy Center (204 MW)

Wind Interconnection Interest Primarily in Wind Interconnection Interest Primarily in Eastern NMEastern NM

Area of interest for wind generation interconnection to the PNM system

“BB” 345kV line -223-mile radial transmission facility terminated in HVDC converter station

Caliente

Artesia

Blackwater

GuadalupeB-A

Norton

Ojo

San Juan

Four Corners

Springerville

Greenlee

West Mesa

Belen

Hernandez

Taos

Sandia

Socorro

Elephant Butte

Picacho

Hollywood

Alamogordo

Holloman AFB

NewmanDiablo

Luna

Hidalgo

Dona Ana

Las Vegas

Storrie LakeBravo Dome

Springer

York Canyon

Los Alamos

Algodones Santa Fe

Blue Water

Ambrosia

Bisti

Pillar

Shiprock

Amrad

HVDC tie

HVDC tie

Moriarty

Willard

Arroyo

Deming

Phelps Dodge

McKinleyYah-tah-ey

PEGS

Central

Salopeck

Rio Grande

345 kV230 kV115 kV

Bernardo

Black Lake

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204 MW Wind (existing)

51 MW Wind(proposed)

300 MW wind(proposed)

200 MW (proposed)(signed LGIA)

BA 345kVBlackwater

345kV

To SPSTo PNM Bulk Transmission

System

Eastern interconnected system

Westerninterconnected

system

90 mi. 70 mi. 63 mi.

System ConsiderationsSystem Considerations-- Case StudyCase Study

Installed and proposed projects on the BB linePresent Use 404MW (204MW wind, 200MW power purchases)In queue as of 10/06: ~551MW (Wind) Withdrawn as of 10/06: 1200MW Line maximum capability 1000 MW

200 MWHVDC

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State and Regional Planning State and Regional Planning AdvancementsAdvancements

New Mexico IRP Rule recommended for approvalWestConnect Subregion

SWAT-AZ/NM/Southern NV, West TXCCPG-Colorado

WECC Transmission Expansion Policy Committee

Regional Congestion StudiesCoordinates the western subregions:SWAT, CCPG, CAISO, STEP, RMATS, NTAC,and latest: Northern Tier Transmission Group

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National InitiativesNational Initiatives

EPACT 2005 Brought about big changesFERC regulatory reach extended

Mandatory Reliability StandardsFERC certified NERC as the ERO 7/2006NOPR issued approving 83 of 107 standards

DOE’s National Interest Electric Transmission Corridor Identification

Congestion study issued 8/2006FERC “backstop siting” could be complex

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FERC Open Access ReformFERC Open Access Reform

FERC Order 888 “Open Access” Reform Initiative

NOPR issued 5/2006Comments and Replies filedPrimary themes include:

• Greater transparency in ATC • Open regional transmission planning• Reform energy imbalance penalties• Reform rollover rights policy• Increase customer access to information• Maintains protections for and State jurisdiction

over bundled retail loadFERC Tech Conference held 10/2006

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Questions?Questions?