North American Strategic Infrastructure Leadership Forum October 12, 2011 Russell Stidolph Chief Financial Officer (203) 299-5420 rstidolph@tresamigasllc.com CONFIDENTIAL & PROPRIETARY 2 Tres Amigas – Overview TA’s transmission capacity creates market opportunities where none exist today • Tres Amigas (TA) is a three-way AC/ DC merchant transmission project, located in Clovis, New Mexico, interconnecting the Western Electricity Coordinating Council (WECC), the Electric Reliability Council of Texas (ERCOT), and the Eastern Interconnection (through the Southwest Power Pool (SPP)) TA is designed to be expanded as economic and transmission opportunities develop • Phase 1 will be a two-node 750MW (WECC SPP) intertie in order to take advantage of existing pricing and takeaway capacity • Phase 2 is currently planned as a 750MW HVDC (ERCOT SPP) intertie which will also provide ERCOT – WECC transfer capabilities • Phase 3 is currently planned to be a direct 750 MW ERCOTWECC intertie • Phase 4 is currently planned to add a 2 GW SPP ERCOT interconnection • TA can be scaled to 30 GW TA received FERC authorization in March 2010 to sell transmission service at negotiated rates 3 Project Value Creation Connects the three US asynchronous power grids through a DC hub that can regulate the direction and level of power flows between the grids Provides economic incentives to further drive the growth of the nation’s renewable resources Optimizes the value of existing and planned AC and DC/ HTS infrastructure Provides open-access and cost-effective transmission services consistent with NERC standards and regional reliability requirements Provides voltage support, capacity firming and other value-added and ancillary services 4 The Location: Regional Renewable Resource Potential Significant Regional Wind & Solar Capacity Factors in Excess of 35% Source: NREL From the 2010 Transmission Summit in Sweetwater w/ HVDC Proposals 6 Site Location in New Mexico Design 8 Tres Amigas Layout • AC switchyard allows for AC line reconfiguration • DC Switchyard allows for HTS CONFIDENTIAL & PROPRIETARY 9 Tres Amigas Conceptual Build Out-Detail Approx. 2 km Expansion >5GW Full 5GW build out allows for high current DC bus 10 Alstom Grid HVDC MaxSine Technology •Voltage Sourced Converter (VSC) technology VSC HVDC scheme +V +V •Modular multi-level converter design -V •Control of real and reactive power flow into AC grids -V = chain link module •Harmonic free output voltage Ideal for use on weak AC grids •Compact station footprint CONFIDENTIAL & PROPRIETARY 11 New Mexico Economic Impact: Ripple Effect Direct Impacts from 6.0 GW Landowner Revenue: Over $16.3M/year Construction Phase: 13,800 new jobs $2.6B to local economies Operational Phase (20yrs): 1,460 new long-term jobs $130M/year to local economies Illustrates Ripple Effect if 6.0 GW of Wind Is Developed by 2015 Indirect Impacts Construction Phase: 7,200 new jobs $818M to local economies Operational Phase: 380 new long-term lobs $39.2M/year to local economies Induced Impacts Construction Phase 8,600 new jobs $905M to local economies Operational Phase: 800 new long-term jobs $78.6M/year to local economies Source: CDEAC report Texas Economic Impact: Ripple Effect Direct Impacts from 4.7 GW Landowner Revenue: Over $12.9M/year Construction Phase: 10,900 new jobs $2.0B to local economies Operational Phase (20yrs): 1,150 new long-term jobs $103M/year to local economies Illustrates Ripple Effect if 4.7 GW of Wind Is Developed by 2015 Indirect Impacts Construction Phase: 5,700 new jobs $645M to local economies Operational Phase: 300 new long-term lobs $30.9M/year to local economies Induced Impacts Construction Phase 6,800 new jobs $714M to local economies Operational Phase: 630 new long-term jobs $62.0M/year to local economies Source: CDEAC report Economics Drive Phased Construction SPP Phase 1: SPP-> WECC WECC-> SPP WECC 14 Economics Drive Phased Construction SPP Phase 2: 750 MW SPP ERCOT ERCOTSPP WECC ERCOT 15 Economics Drive Phased Construction SPP WECC Phase 3: 750 MW WECCERCOT ERCOT WECC ERCOT 16 Economics Drive Phased Construction SPP WECC Phase 4: Additional 2GW SPP ERCOT ERCOTSPP ERCOT 17 Current Projected Build out Timeline Phase 1 Phases 3 and Beyond SPPWECC As Justified Completed 2014 Completed 2015-16 Phase 2 SPPERCOT Completed 2015 18 Strategic Partners and Vendors Foundation Fuel 19