TOLTEC POWER PARTNERSHIP TOLTEC POWER PROJECT INTERCONNECTION STUDY SYSTEM IMPACT STUDY

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TOLTEC POWER PARTNERSHIP TOLTEC POWER PROJECT INTERCONNECTION STUDY SYSTEM IMPACT STUDY January 7, 2002 Prepared by Jorge Chacon (Consultant) Tucson Electric Power Company Ed Beck

ii EXECUTIVE SUMMARY Tucson Electric Power Company (TEP) performed a system impact study as requested by Toltec Power Partnership for interconnection of a new generation plant with a total capacity of 1,096 MW for phase 1 and an additional 1,096 MW for phase 2. The proposed project s 500-kV substation bus will be interconnected to the Saguaro 500-kV bus by a single 500-kV transmission line. Two 500/345-kV transformer banks will be installed at the project s proposed 500-kV bus and the 345-kV bus will be interconnected to the existing South-Westwing 345-kV line by looping the line. The proposed in-service date for the project is June 1, 2003. This study report will focus on the study results of the first phase. Study results for the second phase will be covered in a subsequent study report. The purpose of this System Impact Study (phase one) is to determine the adequacy of Arizona s Extra High Voltage (EHV) Electric system to accommodate all or part of the 1,096 MW requested capacity. The study will focus mainly on the electric transmission systems of APS, SRP and TEP. This study will identify if there are any negative impacts to reliability under various power displacement scenarios. New facilities or upgrades will be recommended to maintain system reliability in accordance with the WSCC and NERC planning standards and criteria. The results of this system impact study will be used as the basis to determine project cost allocation for facility upgrades. The study accuracy and the results for the assessment of the system adequacy are contingent on the accuracy of the technical data provided by the customer as shown in Figure 1 and Appendix B. Any changes to the attached data could void the study results. The study was performed for two system load conditions and various generation scenarios. 2003 Heavy Summer load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Load increased throughout Desert Southwest (once-in-ten-year heat wave assumption) (h) Power exported to California 2003 Light Autumn load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona

iii (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Power exported to California The study includes a steady-state power flow analysis, post-transient voltage analysis, and transient stability analysis. Short-circuit duty analysis will be performed as part of the Facilities Study. CONCLUSIONS Studies identified that the existing facilities are inadequate to provide service to the Toltec Power project without additional system reinforcements. The study did not identify any impacts to the TEP system but did identify a number of impacts throughout the Arizona EHV Transmission System. 1. A total of twenty-three transmission facilities (bus-tie, circuits, series capacitors and transformer banks) were identified to be adversely impacted with the addition of the Toltec Power project under the various scenarios evaluated as summarized below. Transmission Facility Type Impacted Cholla 500/345-kV No.1 Transformer Bank 6 of 7 Scenarios Cholla 500/345-kV No.2 Transformer Bank 6 of 7 Scenarios Cholla 345/230-kV Transformer Bank 6 of 7 Scenarios Four Corner 500/345-kV Transformer Bank 1 of 7 Scenarios Country Club-Glendale 230-kV Transmission Line 3 of 7 Scenarios Glendale-Agua Fria 230-kV Transmission Line 3 of 7 Scenarios Pinnacle Peack (APS) 230-kV Bus-Tie 3 of 7 Scenarios Agua Fira-Westwing 230-kV Transmission Line 5 of 7 Scenarios Cholla-Pinnacle Peak 345-kV Transmission Line 6 of 7 Scenarios Cholla-Preacher Canyon 345-kV Transmission Line 6 of 7 Scenarios Preacher Canyon-Pinnacle Peak 345-kV Transmission Line 6 of 7 Scenarios Cholla-Leupp 230-kV Transmission Line 6 of 7 Scenarios Leupp-Coconino 230-kV Transmission Line 6 of 7 Scenarios Moenkopi-El Dorado 500-kV Series Capacitors 4 of 7 Scenarios Navajo-Crystal 500-kV Series Capacitors 1 of 7 Scenarios Yavapai-Verde North 230-kV Transmission Line 2 of 7 Scenarios Saguaro-Tatmomli 230-kV Transmission Line 6 of 7 Scenarios Santa Rosa-Tatmomli 230-kV Transmission Line 6 of 7 Scenarios Lone Peak-Sunny Slope 230-kV Transmission Line 4 of 7 Scenarios Surprise-Westwing 230-kV Transmission Line 1 of 7 Scenarios Corbell-Kyrene 230-kV Transmission Line 2 of 7 Scenarios Santan-Corbell 230-kV Transmission Line 4 of 7 Scenarios Silver King-Goldfield 230-kV Transmission Line 5 of 7 Scenarios

iv 2. Since market dispatch conditions are unknown ahead of scheduling, the 2003 heavy summer set of conditions analyzed provide scenarios for testing the Toltec Power project impacts under conditions that credibly represent potential market conditions for integrating additional market generation. These conditions are snapshots of a simultaneous use limit that does not envelope all possible combinations. Efforts were made to try and capture worst case possibilities that may result. The Toltec Power project may be subject to scheduling limitations not identified in this report to insure it that the transmission path flows stay within thermal and/or operational limits. 3. The Toltec Power project (Phase 1) does not introduce system instability for the selected critical contingencies tested. 4. The Toltec Power project results in adversely impacting post-transient bus voltages under all scenarios studied except power displacement at southern and eastern Arizona. A total of twelve single contingencies with the Toltec Power project were found that result in voltage drops in excess of 5%. Seven of the twelve single contingencies were identified to be pre-existing problems that are aggravated with the addition of the Toltec Power project. The remaining five single contingencies are new criteria violations resulting from the addition of the Toltec Power project and various generation/load scenarios modeled. A Facility Study will be needed to determine the interconnection facilities and system upgrades required to interconnect the Toltec Power project. The study should address the following scope: 1. Short-Circuit duty assessments and review of locations where duty is increased by more than 0.1kA and the duty at that bus exceeds more than 60% nameplate rating to determine need for breaker replacement and cost allocation. 2. Identification of physical upgrades (should be done by each impacted utility) or congestion management solutions to ensure that the system stays within operational and planning limits. Congestion management will only be allowed in lieu of physical upgrades without compensation. 3. The Facility Study should address the scope of the operating procedures ( Two-County Rule ) that may be impacted or needed. Actual operating procedures and studies to support those procedures will not be developed until the Facility Interconnection and Operation Agreement (FIOA) is executed. Any operating procedure change or additional new operating procedure will require TEP and other impacted utilities review and approval. These approvals will be obtained after FIOA execution, and prior to service connection for testing and operation. 4. Determine the interconnection facilities required to interconnect the Toltec Power project including, but not limited to, transmission lines and line extensions, switchyard facilities, circuit breakers, relay protection, and metering.

v CONTENTS Page INTRODUCTION 1 STUDY CONDITIONS AND ASSUMPTIONS 2 A. Planning Criteria 2 B. Congestion Management 3 C. Toltec Power Project Phase One 5 D. Power Flow Study 5 E. Transient Stability Study 9 F. Post Transient Voltage Study 11 G. Short Circuit Duty Study 11 STUDY RESULTS 11 A. Power Flow Study 11 B. Transient Stability Study 20 C. Post Transient Voltage Study 20 CONCLUSIONS 23 TABLES 1-1. Load Forecast 1-2. Pre-Toltec Generation Dispatch 2-1. Power Flow Results, 2003 Heavy Summer Displace Southern and Eastern Arizona 2-2. Power Flow Results, 2003 Heavy Summer Displace Central Arizona 2-3. Power Flow Results, 2003 Heavy Summer Displace Western Arizona 2-4. Power Flow Results, 2003 Heavy Summer Displace Northern Arizona 2-5. Power Flow Results, 2003 Heavy Summer Displace Entire Arizona 2-6. Power Flow Results, 2003 Heavy Summer Increase Desert Southwest load 2-7. Power Flow Results, 2003 Heavy Summer Export Power to California 3. Transient Stability, Summary 4-1. Post Transient Voltage, 2003 Heavy Summer Displace Southern & Eastern Arizona 4-2. Post Transient Voltage, 2003 Heavy Summer Displace Central Arizona 4-3. Post Transient Voltage, 2003 Heavy Summer Displace Western Arizona 4-4. Post Transient Voltage, 2003 Heavy Summer Displace Northern Arizona 4-5. Post Transient Voltage, 2003 Heavy Summer Displace Entire Arizona 4-6. Post Transient Voltage, 2003 Heavy Summer Increase Desert Southwest load 4-7. Post Transient Voltage, 2003 Heavy Summer Export Power to California

vi FIGURES 1. Toltec Power Project 2. Proposed Toltec Power Project Interconnection APPENDIX A Load Flow Plots Base Cases with all projects in the queue Single Contingency cases with all projects in the queue Double Contingency cases with all projects in the queue APPENDIX B Stability Machine Models APPENDIX C 2003 Heavy Summer Stability Plots APPENDIX D 2004 Light Autumn Stability Plots

TOLTEC POWER PROJECT INTERCONNCETION STUDY SYSTEM IMPACT STUDY January 7, 2002 INTRODUCTION Tucson Electric Power Company (TEP) performed a system impact study as requested by Toltec Power Partnership for interconnection of a new generation plant with a total capacity of 1,096 MW for phase 1 and an additional 1,096 MW for phase 2. The proposed project s 500-kV substation bus will be interconnected to the Saguaro 500-kV bus by a single 500-kV transmission line. Two 500/345-kV transformer banks will be installed at the project s proposed 500-kV bus and the 345-kV bus will be interconnected to the existing South-Westwing 345-kV line by looping the line. The proposed in-service date for the project is June 1, 2003. This study report will focus on the study results of the first phase. Study results for the second phase will be covered in a subsequent study report. The purpose of this System Impact Study (phase one) is to determine the adequacy of Arizona s Extra High Voltage (EHV) Electric system to accommodate all or part of the 1,096 MW requested capacity. The study will focus mainly on the electric transmission systems of APS, SRP and TEP. This study will identify if there are any negative impacts to reliability under various power displacement scenarios. New facilities or upgrades will be recommended to maintain system reliability in accordance with the WSCC and NERC planning standards and criteria. The results of this system impact study will be used as the basis to determine project cost allocation for facility upgrades. The study accuracy and the results for the assessment of the system adequacy are contingent on the accuracy of the technical data provided by the customer as shown in Figure 1 and Appendix B. Any changes to the attached data could void the study results. The study was performed for two system load conditions and various generation scenarios. 2003 Heavy Summer load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Load increased throughout Desert Southwest (once-in-ten-year heat wave assumption) (h) Power exported to California

2

3 2003 Light Autumn load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Power exported to California The following sections provide detailed study conditions and assumptions and present the results of Steady-state power flow, Post-transient voltage, and Stability assessments. STUDY CONDITIONS AND ASSUMPTIONS A. Planning Criteria The study was conducted by applying the Western Systems Coordinating Council (WSCC) Reliability Criteria. More specifically, the main criteria applicable to this study are as follows: Load Flow Assessment The following contingencies are considered for transmission or subtransmission lines and 500/345-kV and 500/230-kV transformer banks ( AA-Banks ): Single Transmission Line Contingencies (138-kV and above) Single Transformer Contingencies (500-kV, 345-kV, and 230-kV Banks) Double Transmission Line Contingencies (Common Mode) Single Line and Single Transformer Bank (Common Mode) (Outages of two AA-Banks are beyond the Planning Criteria) Stability Assessment The Transmission System is to remain stable under a three-phase-to-ground fault at the most critical locations, normally cleared, with the loss of one or two transmission lines. The system is also to remain stable under the most critical single-phase-to-ground fault with delayed clearing. Maximum acceptable first swing voltage drops are 25% under single contingencies and 30% under double contingencies. In addition, first swing voltage swings are not to exceed 20% for more than 20 cycles under single contingency and no more than 20% for 40 cycles under double contingency conditions as defined by the WSCC Planning Criteria.

4 Post Transient Voltage Assessment The maximum voltage deviations allowed under contingency conditions in the post transient time frame are: 5 percent under N-1 (one generator, one circuit, or one transformer) 10 percent under N-2 (two generators or two circuits) B. Congestion Management Maximum generation (P max = 23,857 MW) within Arizona exceeds the total Arizona area load (P Load = 15,058 MW) prior to the addition of the Toltec Power Project. Generation in excess of the Arizona load will therefore be competing for available export capacity to California, New Mexico, and Nevada. Under heavy summer conditions, the No Toltec modeled base case is assumed to have a total Arizona load of 15,058 MW with a corresponding generation output of 17,981 MW and an export of 2,567 MW. Approximately 4,000 MW of new proposed projects in the Palo Verde area were assumed to be off-line for this assessment as a result of export limitations after reserving capacity for the Toltec Power Project. This was done as a means to properly evaluate impacts attributed solely to the Toltec Power Project. Actual operation of the system will not reserve export capacity for the Toltec Power Project. As a result, the Toltec Power Project will be competing for available capacity to serve the Arizona load displacing generation within Arizona as determined by market conditions. Since these conditions are not known in advance, several scenarios were developed that looked at generation displacements taken in different areas. The following principles were used in determining whether congestion management, remedial action schemes, or facility upgrades are required to mitigate base case, single contingency, or double contingency overloads. Congestion management, as means to mitigate base case overloads, can be used if it is determined that the overloads are minimal (less than 5% of the facility normal rating) and impacted utilities concur with the use of congestion management. Facility upgrades will be required if it is determined that the use of congestion management is impractical (loading exceeds nameplate by more than 5%). Since remedial action schemes (RAS) are not allowed to mitigate single contingency overloads by the Arizona Corporation Commission (ACC), facility upgrades will be required to mitigate single contingency overloads. RAS, in lieu of facility upgrades, will be recommended for double contingencies if the scheme is effective and is not a hazard to reliability. Hazard to reliability is determined to be in excess of a single Palo Verde unit. Facility upgrades will be recommended if RAS is determined to be unworkable or determined to be a hazard to reliability.

5 The following study method was implemented to assess the extent of possible congestion: a). Under Base Case (all transmission facilities in service), without the proposed Toltec Power project, the system was evaluated with all existing interconnected generation and all known generation requests in the area that have a queue position ahead of this project. b). Under Base Case, the total output of the proposed Toltec Power project was added and the system was reevaluated. If the normal loading limits of facilities are exceeded in (a), the overload is identified as an existing overload or an overload caused by a project or number of projects in the queue ahead of the proposed project. If the normal loading limits of facilities are exceeded in (b) but where not identified in (a), the overload is identified as having been caused by the addition of the proposed project. The Toltec Power project and other projects in the queue ahead of this request may be subjected to congestion management, potential upgrade cost sharing and/or participation of any proposed remedial action schemes if the project aggravates or triggers the overload. Additionally, Toltec Power project may have to participate in mitigation of overloads triggered by subsequent projects in the queue, subject to FERC protocols and policies. The results of these studies should be able to identify: a). If there is capacity available to accommodate the proposed project and all projects in the queue without the need for congestion management, remedial action schemes or facility upgrades. b). If overloads exist in the area with all projects in the queue and all facilities in service. c). If congestion exists in the area with all projects in the queue under single element and double element outage conditions assuming no new remedial action schemes in place. d). If remedial action schemes appear to be workable solutions to increasing the amount of generation that can be accommodated prior to a potential double element outage condition.

6 C. Toltec Power Partnership Toltec Power Project (Phase One) Figure 1 shows the one-line diagram of the proposed Toltec Power Project. A summary of the total plant output is as follows: Proposed Toltec Power Project Phase One Two 2x1 Combined-Cycle Units 4 Gas Units (G1-G2) 155 MW (each) 2 Steam Unit (ST) 250 MW (each) Auxiliary Load Totals 24 MW Net Phase One Plant Output 1,096 MW The proposed project s 500-kV substation (Toltec) bus will be interconnected to the Saguaro 500-kV bus by a single 500-kV transmission line. Two 500/345-kV transformer banks will be installed at the project s proposed 500-kV bus and the 345-kV bus will be interconnected to the existing South-Westwing 345-kV line by looping the line. Figure 2 illustrates this interconnection. The dynamic data utilized for the Toltec generating units, using the GE PSLF models, as well as customer supporting documentation is shown in Appendix B. D. Power Flow Study To simulate the Arizona Extra High Voltage (EHV) transmission system for analysis, the study used a WSCC 2003 heavy summer and 2004 Light Autumn database modified by APS, WAPA, and TEP to reflect more current information. Heavy summer and light autumn load forecast are shown in Table 1. The following scenarios were considered: 2003 Heavy Summer load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Load increased throughout Desert Southwest (heat wave assumption) (h) Power exported to California 2003 Light Autumn load forecast scenarios: (a) No Toltec Power Project (b) Power displaced in southern and eastern Arizona (c) Power displaced in central Arizona (d) Power displaced in western Arizona

7 (e) Power displaced in northern Arizona (f) Power displaced throughout Arizona (scaled down) (g) Power exported to California Load flow studies were conducted under 2003 heavy summer and 2004 light autumn conditions. Further description of the case assumptions follows: 2003 Heavy Summer a). 2003 Heavy Summer without the Toltec Power project, Case 1 2003 heavy summer load with 2,305 MW East-of-River (EOR) and 6,171 MW West-of-River (WOR) power flow. Arizona exports were set at 2,567 MW with high central, eastern, northern, and southern Arizona area generation patterns. Approximately 4,000 MW of new proposed projects in the Palo Verde area were assumed to be off-line for this assessment as a result of export limitations after reserving capacity for the Toltec Power Project. b). 2003 Heavy Summer with the Toltec Power project displacing southern and eastern Arizona generation, Case 2 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Apache, Cholla, and Coronado generating facilities. c). 2003 Heavy Summer with the Toltec Power project displacing central Arizona generation, Case 3 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the West Phoenix and Desert Basin generating facilities. d). 2003 Heavy Summer with the Toltec Power project displacing western Arizona generation, Case 4 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Arlington and Harquahala generating facilities. e). 2003 Heavy Summer with the Toltec Power project displacing northern Arizona generation, Case 5 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Four Corners and Navajo generating facilities.

8 f). 2003 Heavy Summer with the Toltec Power project displacing entire Arizona generation, Case 6 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by scaling down output from all Arizona generating facilities. g). 2003 Heavy Summer with increasing Desert Southwest load to account for the Toltec Power project, Case 7 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Loads from the Desert Southwest region (Arizona, Nevada, and New Mexico) were scaled-up to balance output from the Toltec Power Project. h). 2003 Heavy Summer with the Toltec Power project exporting power to California, Case 8 Case 1 revised to include the proposed 1,096 MW Toltec Power project. Exports to California were increased to balance output from the Toltec Power Project. 2004 Light Autumn a). 2004 Light Autumn without the Toltec Power project, Case 9 2004 Light Autumn load with 2,305 MW East-of-River (EOR) and 6,171 MW West-of-River (WOR) power flow. Arizona exports were set at 2,567 MW with high central, eastern, northern, and southern Arizona area generation patterns. Approximately 4,000 MW of new proposed projects in the Palo Verde area were assumed to be off-line for this assessment as a result of export limitations after reserving capacity for the Toltec Power Project. b). 2004 Light Autumn with the Toltec Power project displacing southern and eastern Arizona generation, Case 10 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Apache, Cholla, and Coronado generating facilities. c). 2004 Light Autumn with the Toltec Power project displacing central Arizona generation, Case 11 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the West Phoenix and Desert Basin generating facilities.

9 d). 2004 Light Autumn with the Toltec Power project displacing western Arizona generation, Case 12 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Arlington and Harquahala generating facilities. e). 2004 Light Autumn with the Toltec Power project displacing northern Arizona generation, Case 13 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by reducing output at the Four Corners and Navajo generating facilities. f). 2004 Light Autumn with the Toltec Power project displacing entire Arizona generation, Case 14 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Generation displacement was taken by scaling down output from all Arizona generating facilities. g). 2004 Light Autumn with the Toltec Power project exporting power to California, Case 15 Case 9 revised to include the proposed 1,096 MW Toltec Power project. Exports to California were increased to balance output from the Toltec Power Project. 2003 HEAVY SUMMER CONDITIONS ARIZONA AREA TOTAL GENERATION, IMPORT, LOAD AND LOSSES (MW) Case 1 Case 2 Case 3 Case 4 Case 5 Case 6 Case 7 Case 8 SCIT 13,001 13,002 13,000 13,002 13,006 13,002 13,001 13,951* EOR 2,305 2,314 2,328 2,344 2,174 2,294 2,454 2,871 WOR 6,171 6,190 6,147 6,135 6,173 6,164 6,150 7,008 Gen 17,981 17,997 17,939 17,947 17,974 17,903 19,016 19,029 Export 2,567 2,568 2,567 2,567 2,567 2,568 2,916 3,567 Load 14,872 14,916 14,802 14,802 14,892 14,802 15,521 14,892 Losses 542 513 570 577 515 533 579 570 The table above identifies the Arizona area system demand and resources modeled for the 2003 Heavy Summer load forecast conditions. SCIT limitations are set to 13,200 MW as identified by the SCIT nomogram. Since the SCIT value for Case 8 exceeds this limitation, the Toltec Power Project will be competing for available SCIT capacity under

10 this generation dispatch scenario. Both East-of-River and West-of-River conditions are within the allowable limit indicating that reductions on the Midway-Vincent or North of Lugo paths can be made to accommodate the Toltec Power Project. Impact identification will be limited to only the Arizona area since(????). Simulations For each of the eight cases, load flow simulations of the bulk power system were conducted for the base case, single contingencies and double contingencies for lines and transformer banks to determine impacts to the Arizona EHV system. A total of 241 single contingencies in the Arizona EHV system were studied with system performance monitored for planning criteria violations on the Arizona 500-kV, 345-kV, 230-kV, and 138-kV systems. In particular, special attention was placed on identifying impacts on the APS, SRP, and TEP transmission facilities. E. Transient Stability Study Stability studies were conducted for the following NERC category B and C contingencies. Category B contingencies simulated are as follows: 1. A four-cycle three-phase fault on the proposed Toltec 500-kV bus followed by loss of the Saguaro-Toltec 500-kV line. 2. A four-cycle three-phase fault on the Saguaro 500-kV bus followed by loss of the Cholla-Saguaro 500-kV line. 3. A four-cycle three-phase fault on the Saguaro 500-kV bus followed by loss of the Saguaro-Tortolita 500-kV line. 4. A four-cycle three-phase fault on the Perkins 500-kV bus followed by loss of the Perkins-Mead 500-kV line. 5. A four-cycle three-phase fault on the Westwing 500-kV bus followed by loss of the Navajo-Westwing 500-kV line. 6. A four-cycle three-phase fault on the Westwing 500-kV bus followed by loss of the Yavapai-Westwing 500-kV line. 7. A four-cycle three-phase fault on the Westwing 500-kV bus followed by loss of the Palo Verde-Westwing No.1 500-kV line. 8. A four-cycle three-phase fault on the Moenkopi 500-kV bus followed by loss of the Moenkopi-El Dorado 500-kV line.

11 9. A four-cycle three-phase fault on the Palo Verde 500-kV bus followed by loss of the Palo Verde-Devers 500-kV line. 10. A four-cycle three-phase fault on the Palo Verde 500-kV bus followed by loss of the Palo Verde-North Gila 500-kV line. 11. A four-cycle three-phase fault on the proposed Toltec 345-kV bus followed by loss of the Westwing-Toltec 345-kV line. 12. A four-cycle three-phase fault on the proposed Toltec 345-kV bus followed by loss of the South-Toltec 345-kV line. 13. A four-cycle three-phase fault on the Liberty 345-kV bus followed by loss of the Liberty-Peacock 345-kV line. 14. A four-cycle three-phase fault on the proposed Toltec 500-kV bus followed by loss of one Toltec 500/345-kV transformer bank. 15. A four-cycle three-phase fault on the Saguaro 500-kV bus followed by loss of one Saguaro 500/115-kV transformer bank. 16. A four-cycle three-phase fault on the proposed Toltec 500-kV bus followed by loss of one 2x1 Toltec combined-cycle unit (548 MW). 17. A four-cycle three-phase fault on the Palo Verde 500-kV bus followed by loss of one Palo Verde generating unit. Category C contingencies simulated are as follows 1. A four-cycle three-phase fault on the Westwing 345-kV bus followed by simultaneous loss of the Westwing-Toltec 345-kV and Westwing-Liberty 230-kV lines. 2. A four-cycle three-phase fault on the Westwing 500-kV bus followed by simultaneous loss of both Palo Verde-Westwing 500-kV lines. 3. A four-cycle three-phase fault on the Westwing 500-kV bus followed by simultaneous loss of the Yavapai-Westwing and Westwing-Navajo 500-kV lines. These twenty contingencies have been identified to be the most critical cases for stability analysis of the proposed Toltec Power project. Switch decks were developed to simulate each complete contingency. Each contingency run contains a one second predisturbance, a four-cycle faulted condition simulated by faulting a bus, flashing series capacitor bank, clearing the line and re-inserting the series capacitor bank. Although

12 series capacitor flash-over will only occur as a result of increase voltage or increased current and is highly dependant on the short-circuit duty current, the simulations assumed the capacitors would flash in order to simulate the worst case scenario. The same Toltec Power project cases used for power flow studies were also used for the stability study. F. Post Transient Study The power flow study voltage results were used as a screen to identify those contingencies that may require additional post transient voltage studies. Contingencies identified in the power flow to have a voltage drop in excess of 5% where the Toltec Power project either triggers or aggravates the voltage drop for single and double contingencies were selected for post-transient simulation. A total of thirteen single contingencies were identified to require a post-transient voltage study performed. G. Short Circuit Duty Study <NEED TO DETERMINE IF THIS ASSESSMENT SHOULD BE INCLUDED IN THE SIS OR PERFORMED AS PART OF THE FACILITIES STUDY> STUDY RESULTS A. Power Flow Study Power flow studies performed for the various scenarios identified a number of transmission facilities that are adversely impacted by the addition of the Toltec Power Project. Tables 2-1 through 2-7 summarize the power flow results. Below is a detailed description of each facility impacted and potential system mitigation that should be addressed by the corresponding Utility owner in the Facilities Study: 1) Cholla 500/345-kV No.1 & No.2 Transformer Banks (APS) Loading levels on the Cholla 500/345-kV No.1 and No.2 transformer banks are well within the 500 MVA nameplate ratings prior to the addition of the Toltec Power project. With the Toltec Power project, loadings exceed the transformer nameplate ratings under two single contingency conditions for all scenarios studied in the Heavy Summer except displacement of power in southern and eastern Arizona. Under all other scenarios, outage of the Coronado-Silver King 500-kV line results in loading the banks up to 116%. Outage of a single Cholla 500/345-kV bank results in loading the remaining Cholla 500/345-kV bank up to 118%. Transformer bank emergency ratings are not shown in the GE data sets. It is recommended to review the transformer banks in order to determine if emergency

13 ratings can be applied to mitigate these overloads. A third Cholla 500/345-kV transformer bank will be required to mitigate overloads if it is determined that emergency ratings cannot be applied. 2) Cholla 345/230-kV Transformer Bank (APS) The study identified two existing contingencies that result in overloading the Cholla 345/230-kV transformer bank in excess of the 203 MVA rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the study identified additional contingencies that result in overloading the transformer bank beyond the nameplate rating for all scenarios studied except power displacement in southern and eastern Arizona. Scenario Number of Contingencies Highest Loading No Toltec Scanario 2 112% (227 MVA) Displace Central Arizona 6 118% (240 MVA) Displace Western Arizona 10 124% (252 MVA) Displace Northern Arizona 6 119% (242 MVA) Displace Entire Arizona 7 121% (245 MVA) Increase DSW load 8 122% (247 MVA) Export Power to California 14 127% (258 MVA) Transformer bank emergency rating is not shown in the GE data sets. It is recommended to review the transformer bank in order to determine if an emergency rating can be applied to mitigate these overloads. A second Cholla 345/230-kV transformer bank will be required to mitigate overloads if it is determined that emergency ratings cannot be applied 3) Four Corners 500/345-kV Transformer Bank Loading on the Four Corners 500/345-kV transformer bank is well within the 840 MVA nameplate ratings prior to the addition of the Toltec Power project. With the Toltec Power project displacing power in Northern Arizona (Navajo and Four Corner), loadings exceed the transformer nameplate rating under base case and one single contingency condition. Base case loading was increased from 551 MVA up to 1026 MVA or 122%. Outage of the Coronado-Silver King 500-kV line resulted in loading the bank up to 1099 MVA or 131%. No adverse impacts were identified under all other scenarios indicating problem is attributed to generation displacement conditions modeled and not solely attributed to the Toltec Power project. Transformer bank emergency ratings are not shown in the GE data sets. It is recommended to review the transformer banks in order to determine if emergency ratings can be applied to mitigate these overloads. A second Four Corners 500/345kV

14 transformer bank will be required to mitigate overloads if it is determined that displacement scenario is valid and emergency ratings cannot be applied. 4) Country Club-Glendale 230-kV Transmission Line The study identified two existing contingencies that result in overloading the Country Club-Glendale 230-kV transmission line in excess of the 1433 amp emergency rating prior to the addition of the Toltec Power project. Loading levels were identified to be at 109% and 132% of the 1433 amp emergency rating under outage of the Country Club-Lincoln Street 230-kV and Lincoln Street-West Phoenix 230-kV transmission lines respectively. With the addition of the Toltec Power project and generation displacement in central Arizona, loading on the Country Club-Glendale 230-kV transmission line exceeds the 1000 amp allowable limit by 35% in the base case. The existing contingency overloads identified above were found to be aggravated under power displacement in southern and eastern and central Arizona scenarios as well as in the load increase scenario. In addition, two new single contingency overloads were identified in the central Arizona displacement and load increase scenarios. Line re-conductor may be required as a means to mitigate this overload if it is determined that the displacement scenarios impacting this line are valid. 5) Glendale-Agua Fria 230-kV Transmission Line The study identified four existing contingencies that result in overloading the Glendale-Agua Fria 230-kV transmission line in excess of the 1433 amp emergency rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project and generation displacement in central Arizona, loading on the Glendale-Agua Fria 230-kV transmission line exceeds the 1150 amp allowable limit by 28% in the base case. Base case loading is also exceeded, by 10%, under the load increase scenario. All four existing contingency overloads identified above were found to be aggravated under power displacement in southern and eastern and central Arizona scenarios as well as in the load increase scenario. Line re-conductor may be required as a means to mitigate this overload if it is determined that the displacement scenarios impacting this line are valid. 6) Pinnacle Peak (APS) 230-kV Bus Tie The study identified nine existing contingencies that result in overloading the Pinnacle Peak APS 230-kV bus-tie in excess of the 1700 amp emergency rating prior to the addition of the Toltec Power project.

15 With the addition of the Toltec Power project and generation displacement in central Arizona, loading on the Pinnacle Peak 230-kV bus-tie exceeds the 1600 amp allowable limit by 3% in the base case. All nine existing single contingency overloads identified above were found to be aggravated under power displacement at central Arizona and under increased DSW load scenarios. In addition, ten new single contingency overloads were identified under the central Arizona generation displacement scenario. Bus-tie upgrades may be required as a means to mitigate these overloads if it is determined that the displacement scenarios are valid. 7) Agua Fria-Westwing 230-kV Transmission Line The study identified nine existing contingencies that result in overloading the Agua Fria-Westwing 230-kV transmission line in excess of the 1320 amp rating prior to the addition of the Toltec Power project. No emergency loading capability is identified to be available in the GE dataset. With the addition of the Toltec Power project and generation displacement in central Arizona, loading on the Agua Fria-Glendale 230-kV transmission line exceeds the 1230 amp allowable limit by 9% in the base case. Existing single contingency overloads identified above were found to be aggravated under power displacement in southern and eastern and central Arizona scenarios as well as in the DSW load increase scenario. In addition, eleven new single contingency overloads were identified under generation displacement at southern and eastern Arizona. Generation displacement at western Arizona resulted in four new single contingency overloads, displacement in Northern Arizona resulted in five new single contingency overloads and increased DSW load scenario resulted in 7 new single contingency overloads. It is recommended to review the transmission line in order to determine if emergency ratings can be applied to mitigate these overloads. Line re-conductor may be required as a means to mitigate these overloads if it is determined that the displacement scenarios impacting this line are valid and that emergency ratings cannot be applied 8) Cholla-Pinnacle Peak 345-kV Transmission Line The study identified two existing contingencies that result in overloading the Cholla- Pinnacle Peak 345-kV transmission line in excess of the 1310 amp emergency rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project loading on the Cholla-Pinnacle Peak 345-kV transmission line exceeds the 1004 amp allowable limit in the base case for all scenarios evaluated except power displacement at southern and eastern Arizona. Existing single contingency overloads identified above were found to be aggravated under all scenarios evaluated except power displacement in southern and eastern

16 Arizona. In addition, two new single contingency overloads were identified under all scenarios evaluated except generation displacement at southern and eastern Arizona. Line re-conductor may be required as a means to mitigate the new base case overload and single contingency overloads identified if it is determined that the displacement scenarios impacting this line are valid. 9) Cholla-Preacher Canyon 345-kV Transmission Line The study identified existing base case and two single contingency overloads on Cholla-Preacher Canyon 345-kV transmission prior to the addition of the Toltec Power project. With the addition of the Toltec Power project base case loading on the Cholla- Preacher Canyon 345-kV transmission line is increased from 104% up to 116% for all scenarios evaluated except power displacement at southern and eastern Arizona. Existing single contingency overloads identified above were found to be aggravated under all scenarios evaluated except power displacement in southern and eastern Arizona. In addition, a new single contingency overload was identified under all scenarios evaluated except generation displacement at southern and eastern and central Arizona. Line re-conductor may be required as a means to mitigate the increased base case overload and single contingency overloads identified if it is determined that the displacement scenarios impacting this line are valid. 10) Preacher Canyon-Pinnacle Peak 345-kV Transmission Line The study did not identify any overloads on Preacher Canyon-Pinnacle Peak 345-kV transmission line prior to the addition of the Toltec Power project. With the addition of the Toltec Power project loading on the Preacher Canyon- Pinnacle Peak 345-kV transmission line exceeds the 1004 amp allowable limit by up to 8% in the base case for all scenarios evaluated except power displacement at southern and eastern Arizona. In addition, three new single contingencies were identified to load the Preacher Canyon-Pinnacle Peak 345-kV transmission line in excess of the 1310 amp emergency rating. Line re-conductor may be required as a means to mitigate the new base case and single contingency overloads identified if it is determined that the displacement scenarios impacting this line are valid.

17 11) Cholla-Leupp 230-kV Transmission Line The study identified one existing contingency that results in overloading the Cholla- Leupp 230-kV transmission line in excess of the 720 amp rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated under all scenarios evaluated except power displacement in southern and eastern Arizona. In addition, a new single contingency overload was identified under all scenarios evaluated except generation displacement at southern and eastern, central, and northern Arizona as well as the increased DSW load scenario. Line re-conductor may be required as a means to mitigate these two single contingency overloads identified if it is determined that the displacement scenarios impacting this line are valid. 12) Leupp-Coconino 230-kV Transmission Line The study did not identify any overloads on Leupp-Coconino 345-kV transmission line prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, up to two new single contingency overloads were identified under all scenarios evaluated except generation displacement at southern and eastern Arizona. Line re-conductor may be required as a means to mitigate these two new single contingency overloads identified if it is determined that the displacement scenarios impacting this line are valid. 13) Moenkopi-El Dorado 500-kV Transmission Line The study identified one existing contingency that results in overloading the Moenkopi-El Dorado 500-kV transmission line in excess of the 1900 amp rating (by 2%) prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload was identified to be aggravated under generation displacement of central Arizona, increased DSW load, and export to California scenarios. Outage of the Navajo-Crystal 500-kV line results in loading the Moenkopi-El Dorado 500-kV line up to 2459 amps which is in excess of the 1900 amp rating as limited by series capacitors. Upgrades to series capacitor may be required as a means to mitigate the new single contingency overload identified if it is determined that the export scenario impacting this line is valid.

18 14) Navajo-Crystal 500-kV Transmission Line The study did not identify any overloads on Navajo-Crystal 500-kV transmission line prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, a new single contingency overload was identified under the export to California scenario. Outage of the Moenkopi-El Dorado 500-kV line results in loading the Navajo-Crystal 500-kV line up to 2382 amps which is in excess of the 2200 amp emergency rating as limited by series capacitors. Upgrades to series capacitor may be required as a means to mitigate the new single contingency overload identified if it is determined that the export scenario impacting this line is valid. 15) Yavapai-Verde North 230-kV Transmission Line The study identified two existing contingencies that results in overloading the Yavapai-Verde N 230-kV transmission line in excess of the 530 amp rating (by 25%) prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overloads identified above were found to be aggravated by 1% to 7% under DSW load increase and export to California scenarios. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid. 16) Saguaro-Tatmomli 230-kV Transmission Line The study identified one existing contingency that results in overloading the Saguaro- Tatmomli 230-kV transmission line in excess of the 720 amp rating (by 25%) prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated by 15% to 27% under all scenarios evaluated except power displacement in southern and eastern and central Arizona. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid.

19 17) Santa Rosa-Tatmomli 230-kV Transmission Line The study identified one existing contingency that results in overloading the Santa Rosa-Tatmomli 230-kV transmission line in excess of the 720 amp rating (by 17%) prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated by 16% to 28% under all scenarios evaluated except power displacement in southern and eastern and central Arizona. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid. 18) Lone Peak-Sunnyslope 230-kV Transmission Line The study identified one existing contingency that results in overloading the Lone Peak-Sunnyslope 230-kV transmission line in excess of the 1368 amp emergency rating (by 1%) prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated by 1% to 6% under all scenarios evaluated except power displacement in southern and eastern and northern Arizona and under the Arizona generation reduction scenario. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid. 19) Surprise-Westwing 230-kV Transmission Line The study did not identify any overloads on Surprise-Westwing 345-kV transmission line prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, two new single contingency overloads were identified under the power displacement in central Arizona scenario. Loading is increased from 1755 amps (87% of emergency rating) up to 2037 amps (101% of emergency rating). Line re-conductor may be required as a means to mitigate the new single contingency overload identified if it is determined that the displacement scenario impacting this line are valid.

20 20) Corbell-Kyrene 230-kV Transmission Line The study identified one existing contingency that results in overloading the Corbell- Kyrene 230-kV transmission line in excess of the 1600 amp rating prior to the addition of the Toltec Power project. No emergency loading capability is identified to be available in the GE dataset. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated under power displacement in central Arizona and under the DSW load increase scenarios. It is recommended to review the transmission line in order to determine if emergency ratings can be applied to mitigate these overloads. Line re-conductor may be required as a means to mitigate these overloads if it is determined that the displacement scenarios impacting this line are valid and that emergency ratings cannot be applied. 21) Santan-Corbell 230-kV Transmission Line The study identified one existing contingency that results in overloading the Santan- Corbell 230-kV transmission line in excess of the 1100 amp emergency rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated under all scenarios evaluated except power displacement in southern and eastern and northern Arizona and under the Arizona generation reduction scenario. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid. 22) Silver King-Goldfield 230-kV Transmission Line The study identified one existing contingency that results in overloading the Silver King-Goldfield 230-kV transmission line in excess of the 825 amp rating prior to the addition of the Toltec Power project. With the addition of the Toltec Power project, the existing single contingency overload identified above was found to be aggravated under all scenarios evaluated except power displacement in southern and eastern Arizona and under the Arizona generation reduction scenario. Line re-conductor may be required as a means to mitigate the increased single contingency overload identified if it is determined that the displacement scenarios impacting this line are valid.