Q92 Asarco Interconnection

A subsidiary of Pinnacle West Capital Corporation Q92 Asarco Interconnection Feasibility Study APS Contract No. 52239 By Arizona Public Service Company Transmission Planning July 29, 2010 Prepared by Utility System Efficiencies, Inc.

Q92 Feasibility Study Prepared by Utility System Efficiencies, Inc. TABLE OF CONTENTS Executive Summary... 2 1 Study Description and Assumptions... 5 1.1 Pre-Project Case Modeling... 5 1.2 Post Project Case Modeling... 6 2 Results and Findings... 9 2.1 Power Flow Results... 9 2.1.1 Thermal Loading/Voltage Results: 69kV Point of Interconnection... 9 2.1.2 Thermal Loading/Voltage Results, 230kV Point of Interconnection... 9 2.2 Voltage Flicker Results... 11 2.3 Fault Duty Analysis... 11 2.3.1 Fault Duty Analysis Results: 69kV Point of Interconnection... 12 2.3.2 Fault Duty Analysis Results: 230kV Point of Interconnection... 12 3 Cost and Construction Time Estimates... 13 3.1 Cost and Construction Time Estimates: 69kV Point of Interconnection... 13 3.2 Cost and Construction Time Estimates: 230kV Point of Interconnection... 16 Appendix A - List of Contingencies Appendix B Power Flow Plots LIST OF APPENDICES Page 1

Q92 Feasibility Study APS Contract No. 52239 Executive Summary This section summarizes the Feasibility Study (FeS) results for a proposed generation interconnection totaling 20 MW in the Arizona Public Service (APS) transmission system. Specific details of the impact of the interconnection upon the surrounding transmission system can be found in the Results and Findings section of this report. Disclaimer Nothing in this report constitutes an offer of transmission service or confers upon the Interconnection Customer any right to receive transmission service. APS and other interconnected utilities may not have the Available Transmission Capacity to support the interconnection described in this report. It should also be noted that all power flow results for the FeS are dependent upon the assumed topology and timing of new projects in the Pinal area and nearby preceding generation interconnection requests, which are subject to change. Background Under provisions of the Arizona Public Service Company (APS) Open Access Transmission Tariff (OATT), APS has entered into a Feasibility Study Agreement with Q92. APS has retained Utility System Efficiencies (USE) to perform the technical analysis. The Q92 Applicant has requested to install 20MW of solar photo-voltaic generation in 2011. Under the Small Generator Interconnection provisions in the OATT, the resource will be studied as an Energy Resource. At the request of the Applicant, interconnection to the Santa Rosa-Asarco Tap 69kV line was studied as the primary point of interconnection and interconnection to the Desert Basin-Santa Rosa 230kV line was studied as an alternate point of interconnection. Figure 1 shows a sketch of the 69kV point of interconnection and nearby transmission grid. Asarco Santa Rosa 69kV Vista 230kV Queue #92 (20MW) Casa Grande East Gate 69kV SE8 230kV Tolec Milligan 230kV Figure 1. Q92 Interconnection Page 2

Q92 Feasibility Study APS Contract No. 52239 Figure 2 shows a sketch of the 230kV point of interconnection and nearby transmission grid. Santa Rosa Desert Basin Sundance Queue #92 (20MW) 230kV Casa Grande Pinal Central TatMomoli Saguaro Figure 2. Q92 230kV Interconnection What was studied The Feasibility Study (FeS) examined the effects of interconnecting the new generation to the surrounding transmission system. Analyses for the proposed interconnection consisted of computerbased power flow studies, voltage flicker analysis (69kV interconnection only), and short circuit/fault duty analysis. This study modeled the interconnection under 2011 Summer Peak load conditions (forecasted peak load was 20,301MW in AZ). All nearby N-1 contingencies were simulated. Power flow results were monitored for APS, SRP and TEPC; short circuit analysis was performed by the APS Protection Department. System performance criteria used in the study The criteria applied in this study are consistent with NERC/WECC Reliability Criteria. Results The proposed generation resulted in no reliability violations, no voltage flicker concerns, or overstressed circuit breakers following any outage condition. Short circuit study results indicate that the existing transmission system breakers would not be overstressed by the interconnection of the Project. Page 3

Q92 Feasibility Study APS Contract No. 52239 Energy Resource Interconnection cost and timeline estimates are listed on the tables below: Table 1.1: Summary of Project Interconnection Costs: 69kV POI Facility Costs Timeline Network Upgrades $2,749,597 27 Months Q92 Trans. Provider's Interconnection Facilities $175,000 12 Months Total $2,924,597 27 Months As can be seen in Table 1.1 above, the total estimated completion time for interconnecting the Q092 project is 27 months. Therefore, the desired In-Service Date of January 31, 2011 cannot be met. APS and the Interconnection Customer must therefore discuss and mutually agree to a new and acceptable projected In-Service Date. Table 1.2: Summary of Project Interconnection Costs: 230kV POI Facility Costs Timeline Network Upgrades $3,654,672 12 Months Q92 Trans. Provider's Interconnection Facilities $476,000 12 Months Total $4,130,672 12 Months As can be seen in Table 1.2 above, the total estimated completion time for interconnecting the Q092 project is 12 months. Therefore, the desired In-Service Date of January 31, 2011 cannot be met. APS and the Interconnection Customer must therefore discuss and mutually agree to a new and acceptable projected In-Service Date. Page 4

Q92 Feasibility Study APS Contract No. 52239 1 Study Description and Assumptions This comprehensive study monitored the impact on all affected transmission systems. Affected parties have been identified as Electrical District 2 (ED2), Salt River Project (SRP), and Tucson Electric Power (TEP). The Study is comprised of the following technical analyses: Power Flow Analysis Voltage Flicker Analysis (69kV Interconnection only) Short Circuit Analysis The following transmission/generation projects are assumed in-service for all cases: Milligan Loop-In of the Saguaro-Casa Grande 230kV line (energized in 2009). The following transmission/generation projects will be included as sensitivities for the 230kV interconnection option: Q78: 297MW at San Manuel 115kV Substation, as NR in 2012 Desert Basin Pinal Central 230kV Line Project Sundance-Pinal Central 230kV Line Project Six base cases were created to properly evaluate the impact of the primary and alternate points of interconnection. The power flow analysis used a 2011 summer APS Detailed Planning base case as a starting point. The case was jointly built by the Arizona utilities, represents the most up-to-date transmission system topology, and includes the most recent APS load forecast for 2011. 1.1 Pre-Project Case Modeling The Pre-Project case simulated a high load, high generation condition for Summer 2011. As a starting point, this FeS used an APS Detailed planning study case ( sm11#16_q92.sav ), which includes modeling of the 69kV sub-transmission system. Additional modifications described below were implemented to create the cases. Pre-Project Case: 2011 Pre-Project Heavy Summer High Load/High Generation 1) Study base case sm11#16_q92.sav was obtained from APS Transmission Planning. The base case includes the recently energized Milligan Loop-In of the Saguaro-Casa Grande 230kV line. General Changes 2) Changed all isolated/islanded buses from Type 0 to Type -4. Arizona Changes 3) Short term emergency ratings were added to the Casa Grande, Milligan, and Santa Rosa 230/69kV transformers. 4) Short term emergency ratings were added to the Saguaro-Marana 115kV line, Saguaro-Oracle 115kV line, and Oracle-Tucson 115kV line. 5) Desert Basin generation was reduced to 480MW gross output and offset with turning on a Harquahala unit. Power flow diagrams of the transmission system for the Pre-Project condition are provided in Appendix A. Table 1 summarizes the attributes for each case. Page 5

Q92 Feasibility Study APS Contract No. 52239 1.2 Post Project Case Modeling The modeling for the new generation utilized the machine characteristics provided by the Applicant. The arrangement of Q92 at the 69kV point of interconnection is depicted in Figure 3. The arrangement of Q92 at the 230kV point of interconnection is depicted in Figure 4. Santa Rosa 69kV Length: 1.5 Mile Asarco Tap 69kV Length: 7.0 Mile Length: 1.5 Mile Q92 69kV Bus 12.47kV 28 MVA R=0.00 X=0.08 Queue 92 Figure 3. Arrangement of Q92, 69kV Interconnection Post-Project Case: 2011 Post-Project Heavy Summer, 69kV Interconnection Request #92 (20MW net output) is comprised of 40-500kW units. Each unit has a dedicated Generator Step-Up (GSU) transformer. The units are gathered together by a 12.47kV collector bus. The power flow modeling aggregated the 40 units into one 20MW unit at the 12.47kV collector bus. A load of 0MW and 4.1MVAR was placed at the 12.47kV bus to simulate the aggregated losses of the 480V to 12.47kV transformation. The 12.47/69kV transformer steps the voltage up to 69kV where one 5.2MVAR shunt capacitor is modeled to offset the 0.98 power factor modeled at the 12.47kV bus. The 69kV line between Santa Rosa and Asarco Tap is looped into the 69kV bus by two 1.5 mile lines. To dispatch the unit to 20MW, the new generation was offset by Redhawk generation located at the Palo Verde Hub. Santa Rosa 230kV Q92 230kV Desert Basin 230kV Length: 9.6 Mile 12.47kV Length: 4.3 Mile 28 MVA R=0.00 X=0.08 Queue 92 Figure 4. Arrangement of Q92, 230kV Interconnection Page 6

Q92 Feasibility Study APS Contract No. 52239 Post-Project Case: 2011 Post-Project Heavy Summer, 230kV Interconnection Request #92 (20MW net output) is comprised of 40 500kW units. Each unit has a dedicated Generator Step-Up (GSU) transformer. The units are gathered together by a 12.47kV collector bus. The power flow modeling aggregated the 40 units into one 20MW unit at the 12.47kV collector bus. A load of 0MW and 4.1MVAR was placed at the 12.47kV bus to simulate the aggregated losses of the 480V to 12.47kV transformation. The 12.47/230kV transformer steps the voltage up to 230kV where one 5.2MVAR shunt capacitor is modeled to offset the 0.98 power factor modeled at the 12.47kV bus. The 230kV line between Santa Rosa and Desert Basin is looped into the 230kV bus near the existing line. To dispatch the unit to 20MW, the new generation was offset by Redhawk generation located at the Palo Verde Hub. A post-project sensitivity case was developed with Q78. Q78 is a 297MW generator connected to the San Manuel 115kV bus. A post project sensitivity case was developed from the Q78 sensitivity case with the Desert Basin-Pinal Central 230kV Line Project and the Sundance-Pinal Central 230kV Line Project. Note: For either Point of Interconnection Q92 will be required to possess the capability of providing +/- 0.95 Power factor at the POI when called upon by APS. Power flow diagrams of the transmission system along with the new generation interconnections are provided in Appendix A. Table 1.3 (following page) summarizes the attributes for each case. Page 7

Q92 Feasibility Study APS Contract No. 52239 Table1.3 Case Attributes Pre- Project Post- Project (69kV) Post- Project (230kV) Pre- Project (w/q78) Post- Project (w/q78) Post- Project (w/ Q78, PC-230) Major Path/Branch Flows Path 50: Cholla-Pinnacle Peak (345kV) 786 787 787 812 813 817 Path 54: Coronado-Silver King 984 985 985 1,006 1,007 980 Cholla-Saguaro #1 500kV 743 741 741 691 689 686 Santa Rosa-Tat Momoli 230kV -25-24 -25-50 -49-52 Santa Rosa-Desert Basin 230kV -317-320 0-340 0 0 Desert Basin-Q92 230kV 0 0-314 0-338 -293 Q92-Santa Rosa 230kV 0 0-332 0-355 -311 Desert Basin-Casa Grande 230kV 147 144 151 123 127 110 Desert Basin-Pinal Central 230kV 0 0 0 0 0-62 Casa Grande-Milligan 230kV 69 70 72 46 49 34 Milligan-Saguaro 230kV 15 19 19-10 -6-22 Santa Rosa-Vista (Q92) 69kV 13 0 12 11 11 12 Vista-East Gate 69kV 32 26 33 34 34 33 Saguaro 230/115kV Xfmr. #1-11 -9-9 -36-34 -43 Milligan 230/69kV Xfmr 53 51 53 55 55 56 Casa Grande 230/69kV Xfmr 52 48 52 52 52 50 Santa Rosa 230/69kV Xfmr 54 47 54 53 53 53 Arizona Area 14 (incl. WALC) AZ Load 19,603 19,603 19,603 19,590 19,590 19,590 AZ Losses 698 697 698 705 705 700 AZ Generation 27,811 27,811 27,811 27,805 27,805 27,800 AZ Exports 7,510 7,511 7,510 7,511 7,511 7,510 Case 1 2 3 5 6 7 Page 8

Q92 Feasibility Study APS Contract No. 52239 2 Results and Findings This section details the results of the power flow analysis, voltage flicker analysis, and fault duty analysis. 2.1 Power Flow Results Contingencies were applied to the power flow cases. The list of contingencies simulated is provided in Appendix A. Selected power flow plots from various system scenarios are included in Appendix B. 2.1.1 Thermal Loading/Voltage Results: 69kV Point of Interconnection Table 2.1 details the thermal loading results from the power flow simulation. No thermal overloads were detected. The highest loading occurs following an outage of the Santa Rosa-Desert Basin 230kV line when the loading on the Casa Grande-Eastgate 69kV line is 92.6% in the pre-project case. No voltage deviations were identified in the power flow simulation. Table 2.1 Thermal Loading Results, 69kV Point of Interconnection Outage/Overloaded Element N-1 Santa Rosa-DBG 230kV Line Rating N/E Pre- Project Post- Project Casa Grande-Eastgate Tap 69kV Line 900/900 (Amps) 92.6% 89.4% Case 1 2 2.1.2 Thermal Loading/Voltage Results, 230kV Point of Interconnection Table 2.2 details the thermal loading results from the power flow simulation. There were three pre-project N-1 overloads related to the Q78 project. The Q78 SIS is currently on-going and the mitigation measures are not finalized at the time of this study. The Q92 project does not exacerbate any of the pre-project overloads, therefore there are no thermal overloads detected due to the project generator. No project related voltage deviations were identified in the power flow simulation. There were voltage deviations due to the Saguaro-Marana-Rattlesnake 115kV outage due to a portion of the system becoming radial. The voltage at these buses was not worsened by the addition of the project. Table 2.3 details the voltage problems in the cases. Table 2.2 Thermal Loading Results, 230kV Point of Interconnection Outage/Overloaded Element Rating N/E Saddlebrooke Ranch-San Manuel 115kV Line 623/683 Hayden-San Manuel 115kV Line (Amps) Oracle-Saddlebrooke Ranch 115kV Line 623/683 Hayden-San Manuel 115kV Line (Amps) Hayden-San Manuel 115kV Line Saddlebrooke Ranch-San Manuel 115kV Line 730/730 (Amps) Pre- Project Post- Project Pre- Project Post- Project Post- Project 107.3% 107.5% 103.3% 105.1% 105.2% 101.0% 104.5% 104.4% 102.0% Case 1 3 5 6 7 Page 9

Q92 Feasibility Study APS Contract No. 52239 Table 2.3 Voltage Violation Results, 230kV Interconnection Outage/% Deviation Pre- Project Post- Project Pre- Project Post- Project Post- Project N-1 Saguaro-Marana-Rattlesnake 115kV Line TWINPKAZ 115.00-6.22-6.23-6.35-6.36-6.34 SANDARAZ 115.00-6.25-6.26-6.38-6.39-6.37 BRAWLYAZ 115.00-6.26-6.27-6.39-6.40-6.39 SANXAVAZ 115.00-6.29-6.29-6.42-6.42-6.41 SNYDHLAZ 115.00-6.29-6.30-6.42-6.43-6.42 BLKMTNAZ 115.00-6.29-6.30-6.43-6.43-6.42 CANEZ 115.00-5.02-5.02 SONOITA 115.00-5.05-5.05 VALNCIA 115.00-5.12-5.13-5.04-5.05 SONOITA1 13.20-5.07-5.08 VALNCIA2 13.20-5.61-5.62-5.53-5.54-5.44 AVRA 115.00-6.51-6.50-6.25-6.24-6.20 MARANA 115.00-7.95-7.95-7.77-7.77-7.78 SNDARIO 115.00-6.01-6.00-5.77-5.76-5.72 BLACKMTN 115.00-6.29-6.30-6.43-6.43-6.42 BRAWLEY 115.00-6.26-6.27-6.39-6.40-6.39 RATTLSNK 115.00-6.22-6.22-6.35-6.35-6.34 SANDARIO 115.00-6.25-6.26-6.38-6.39-6.37 SANXAVER 115.00-6.29-6.29-6.42-6.42-6.41 SNYDHILL 115.00-6.29-6.30-6.42-6.43-6.42 TWINPEAK 115.00-6.22-6.23-6.35-6.36-6.34 AVRA 24.90-6.89-6.87-6.62-6.61-6.57 MARANA 24.90-8.58-8.57-8.38-8.38-8.39 SNDARIO 24.90-6.21-6.20-5.97-5.96-5.91 Case 1 3 5 6 7 Page 10

Q92 Feasibility Study APS Contract No. 52239 2.2 Voltage Flicker Results The voltage flicker analysis was performed on the 69kV point of interconnection case. Table 2.4 details the results of the voltage flicker analysis. No voltages change greater than 1% in the post project cases. The greatest flicker is observed at the Asarco 69kV bus with a 0.24% decrease with Q92. This occurs as the unit(s) adjusts from 100% to 90% output. Table 2.4 Voltage Flicker Results, Q92 100% Generation 10% Generation 30% Generation 60% Generation 90% Generation Bus Voltage Voltage Deviation Voltage Deviation Voltage Deviation Voltage Deviation PAPAGO 69.00kV 1.0105 1.0101-0.0004 1.0103-0.0003 1.0104-0.0001 1.0105 0 MARICOPA 69.00kV 1.0366 1.0361-0.0004 1.0363-0.0002 1.0365-0.0001 1.0366 0 SNTAROSA 69.00kV 1.0368 1.0364-0.0004 1.0365-0.0003 1.0367-0.0001 1.0368 0 HIDENVLY 69.00kV 1.0036 1.0032-0.0004 1.0033-0.0003 1.0035-0.0001 1.0036 0 FARRELL 69.00kV 1.0292 1.0287-0.0004 1.0289-0.0003 1.0291-0.0001 1.0292 0 CAYWOOD 69.00kV 1.0336 1.0331-0.0004 1.0333-0.0002 1.0335-0.0001 1.0336 0 WINGFELD 69.00kV 1.0332 1.0328-0.0004 1.0329-0.0002 1.0331-0.0001 1.0332 0 SEXTON 69.00kV 1.0289 1.0285-0.0004 1.0287-0.0003 1.0288-0.0001 1.0289 0 ASARCO 69.00kV 1.0339 1.0315-0.0024 1.0322-0.0016 1.0331-0.0008 1.0337-0.0002 VISTA W 69.00kV 1.0287 1.0269-0.0019 1.0274-0.0013 1.0281-0.0006 1.0286-0.0001 EASTGATN 69.00kV 1.031 1.0296-0.0014 1.03-0.0009 1.0305-0.0004 1.0309-0.0001 EGTAP E 69.00kV 1.0314 1.0301-0.0013 1.0305-0.0009 1.031-0.0004 1.0313-0.0001 TOLTEC 69.00kV 1.0343 1.0336-0.0007 1.0338-0.0005 1.0341-0.0002 1.0342 0 SE12 69.00kV 1.0312 1.0307-0.0004 1.0309-0.0003 1.0311-0.0001 1.0312 0 MILLIGAN 69.00kV 1.0352 1.0348-0.0004 1.0349-0.0003 1.0351-0.0001 1.0352 0 CASGRAPS 69.00kV 1.0355 1.0347-0.0008 1.0349-0.0005 1.0352-0.0002 1.0354 0 2.3 Fault Duty Analysis Short circuit analysis of the proposed generator interconnect(s) was performed by the APS protection department, using the CAPE program and parameters supplied by the Applicant. Fault duties were calculated for both single-phase-to-ground and three-phase faults at substation busses in the immediate surrounding area before and after the proposed generator installation. The results presented here assume a worst-case scenario, with all of the project s generating units assumed on-line. For this initial FeS, short circuit analysis primarily focused on busses in the immediate vicinity of the interconnection. Page 11

Q92 Feasibility Study APS Contract No. 52239 2.3.1 Fault Duty Analysis Results: 69kV Point of Interconnection Table 2.5 provides a comparison of fault duties at several local busses for both the Pre-Project and Post-Project conditions. The summary table also provides the minimum circuit breaker rating at each of these substations. Table 2.5 Short-Circuit Results, 69kV Point of Interconnection Substation Base Case With Q92 Min. Brkr 3 Ph. (ka) X/R Ph-G (ka) X/R 3 Ph. (ka) X/R Ph-G (ka) X/R Rating -ka Q92 69kV NA NA NA NA 9.1 8.7 7.2 5.8 As Required Vista 69kV 6.9 6.9 5.4 5.9 7.0 6.9 5.4 5.9 40 Santa Rosa 69kV 15.6 23.1 18.3 19.1 15.8 23.0 18.5 19.1 40 East Gate 69kV 8.0 7.8 5.9 6.0 8.0 7.8 5.9 6.0 31.5 Casa Grande 69kV 8.9 19.5 10.4 21.5 8.9 19.5 10.4 21.5 40 2.3.2 Fault Duty Analysis Results: 230kV Point of Interconnection Table 2.6 provides a comparison of fault duties at several local busses for both the Pre-Project and Post-Project conditions. The summary table also provides the minimum circuit breaker rating at each of these substations. Table 2.6 Short-Circuit Results, 230kV Point of Interconnection Substation Base Case With Q92 Min. Brkr 3 Ph. (ka) X/R Ph-G (ka) X/R 3 Ph. (ka) X/R Ph-G (ka) X/R Rating -ka Q92 230kV NA NA NA NA 13.7 14.8 11.2 10.7 As Required Santa Rosa 230kV 18.7 10.9 16.8 10.3 18.1 9.8 15.6 10.4 40 Desert Basin 230kV 15.2 868.2 15.8 29.1 15.2 865.5 15.8 29.4 NA Test Track 230kV 18.7 11.0 16.8 10.2 18.7 10.9 16.5 10.7 NA Casa Grande 230kV 13.7 7.8 13.7 8.8 13.7 7.8 13.6 8.9 50 The Desert Basin and Test Track 230kV substations are non-aps stations and their minimum breaker ratings are not known at this point. Coordination with SRP and WAPA will be done in the System Impact Study. Page 12

Q92 Feasibility Study APS Contract No. 52239 3 Cost and Construction Time Estimates The cost estimates represent good faith estimates necessary to interconnect to the system. The nonbinding, good faith cost and time estimates are tabulated below. 3.1 Cost and Construction Time Estimates: 69kV Point of Interconnection Assumptions: Land Values will fluctuate based on specific location. Terrain was not considered when estimating line route. R.O.W. = 40 foot width. N.E.P.A. Process estimated at $3,000 per Mile. Access & Lay Down Yards are not included in the Estimate. Private acquisition could be 18 months if condemnation is required. Rough grading costs are not included in the estimate. APS will construct, own and operate the facilities in the Q92 substation and the portion of 69 kv line from the Q92 69 kv bus up to the first structure outside the sub fence Q92 will construct, own and maintain the 69 kv gen-tie from Q92 substation to their collector station. Q92 will be responsible for providing a fiber optic communications path from the collector station to the Q92 substation. All estimates are in 2010 dollars. Table 3.1 Q92 Project Cost Summary: 69kV Point of Interconnection Equipment Description Network Upgrades Transmission Provider's Interconnection Facilities Q92 Ring Bus $2,069,000 $175,000 Q92 69 kv Line Work $565,725 $0 Communications (Fiber Optic $56,672 $0 Cable) Right of Way $58,200 $0 Subtotal $2,749,597 $175,000 Grand Total $2,924,597 The facilities identified in Table 3.1 above as Transmission Provider s Interconnection Facilities would be the sole cost of the Interconnection Customer. Unlike Network Upgrades, these costs are not reimbursable. Page 13

Q92 Feasibility Study APS Contract No. 52239 Table 3.2 Construction Time Estimates: 69kV Point of Interconnection Schedule Facility Design Construction Q92 69 kv Ring Bus 6 Months 6 Months Q92 69 kv Line Work 6 Months 3 Months Communications 6 Months 3 Months 69kV Right of Way 18 Months Total 27 Months The summary provided in Table 3.2 above shows a total estimated completion time of 27 months, which is primarily due to the timeline associated with obtaining a 69 kv Right of Way for the project. Therefore, the desired In-Service Date of January 31, 2011 cannot be met. APS and the Interconnection Customer must therefore discuss and mutually agree to a new and acceptable projected In-Service Date. Table 3.3 Network Upgrade Cost Estimates: 69kV Point of Interconnection Equipment Description Q92 4-Element Ring Bus Engineering and Design $303,800 Below Grade Construction $433,200 Above Grade Construction Labor (Steel, Bus, & Equipment) $237,600 Control/Relay Labor $157,200 Steel Structures $25,200 Equipment/Relay/RTU/Security $912,000 Communications (Fiber Optic $56,672 Cable) 69kV Line Right of Way $58,200 69kV Double Circuit $565,725 Land Services/Siting/Permit/Etc $0 Subtotal $2,749,597 Grand Total $2,749,597 *Network Upgrades Estimates: are anticipated to consist of the above listed $2,749,597 shown for construction of Q92, Control, Communications, and Relay Protection Requirements. Network Upgrades are typically repaid to the customer per FERC Rules, as transmission credits and/or repaid within a 20 year period. Page 14

Q92 Feasibility Study APS Contract No. 52239 Table 3.4 Transmission Provider s Interconnection Facilities Cost Estimates: 69kV Point of Interconnection Equipment Description Q92 4-Element Ring Bus Engineering and Design $21,400 Below Grade Construction $9,600 Above Grade Construction Labor (Steel, Bus, & Equipment) $25,200 Control/Relay Labor $16,800 Steel Structures $6,000 Equipment/Relay/RTU/Security $96,000 Communications (Fiber Optic $0 Cable) 69kV Line Right of Way $0 69kV Double Circuit $0 Land Services/Siting/Permit/Etc $0 Subtotal $175,000 Grand Total $175,000 Figure 5 shows a single line diagram of the build-out for Q92 s interconnection facilities at the 69kV POI Figure 5. Q92 Interconnection Facilities: 69kV Point of Interconnection Page 15

Q92 Feasibility Study APS Contract No. 52239 3.2 Cost and Construction Time Estimates: 230kV Point of Interconnection Assumptions: Q92 230kV IN & OUT will be built on Q92 s land. Terrain was not considered when estimating line route. Arizona Transmission Line Siting is not required. Rough grading costs are not included in the estimate. APS will construct, own and operate the facilities in the Q92 substation and the portion of 230 kv line from the Q92 230 kv bus up to the first structure outside the sub fence. Q92 will construct, own and maintain the 230 kv gen-tie from Q92 substation to their collector station. Q92 will be responsible for providing a fiber optic communications path from the collector station to the Q92 substation. All estimates are in 2010 dollars. Table 3.5 Project Cost Summary: 230kV Point of Interconnection Equipment Description Network Upgrades Transmission Provider's Interconnection Facilities Q92 Ring Bus $3,098,000 $476,000 Q92 230kV Line Work $500,000 $0 Communications (Fiber Optic $56,672 $0 Cable) Right of Way $0 $0 Subtotal $3,654,672 $476,000 Grand Total $4,130,672 The facilities identified in Table 3.5 above as Transmission Provider s Interconnection Facilities would be the sole cost of the Interconnection Customer. Unlike Network Upgrades, these costs are not reimbursable. Table 3.6 Construction Time Estimates: 230kV Point of Interconnection Schedule Facility Design Construction Q92 230kV Ring Bus 6 Months 6 Months Q92 230kV Line Work 6 Months 1 Months Communications 6 Months 3 Months Total 12 Months As can be seen in Table 3.6 above, the total estimated completion time for interconnecting the Q092 project is 12 months. Therefore, the desired In-Service Date of January 31, 2011 cannot be met. APS and the Interconnection Customer must therefore discuss and mutually agree to a new and acceptable projected In-Service Date. Page 16

Q92 Feasibility Study APS Contract No. 52239 Table 3.7 Network Upgrade Cost Estimates: 230kV Point of Interconnection Equipment Description Q92 4-Element Ring Bus Engineering and Design $290,000 Below Grade Construction $981,600 Above Grade Construction Labor (Steel, Bus, & Equipment) $258,000 Control/Relay Labor $169,200 Steel Structures $248,400 Equipment/Relay/RTU/Security $1,150,800 Communications (Fiber Optic $56,672 Cable) 230kV Line Right of Way $0 230kV Double Circuit $500,000 Land Services/Siting/Permit/Etc $0 Subtotal $3,654,672 Grand Total $3,654,672 *Network Upgrades Estimates: are anticipated to consist of the above listed $3,654,672 shown for construction of Q92, Control, Communications, and Relay Protection Requirements. Network Upgrades are typically repaid to the customer per FERC Rules, as transmission credits and/or repaid within a 20 year period. Table 3.8 Transmission Provider s Interconnection Facilities Cost Estimates: 230kV Point of Interconnection Equipment Description Q92 4-Element Ring Bus Engineering and Design $45,200 Below Grade Construction $58,800 Above Grade Construction Labor (Steel, Bus, & Equipment) $70,800 Control/Relay Labor $21,600 Steel Structures $102,000 Equipment/Relay/RTU/Security $177,600 Communications (Fiber Optic $0 Cable) 230kV Line Right of Way $0 230kV Double Circuit $0 Land Services/Siting/Permit/Etc $0 Subtotal $476,000 Grand Total $476,000 Page 17

Q92 Feasibility Study APS Contract No. 52239 Figure 6 shows a single line diagram of the build-out for Q92 s interconnection facilities at the 230kV POI Figure 6. Q92 Interconnection Facilities: 230kV Point of Interconnection Page 18

Appendix A CONTINGENCY LIST

APPENDIX A CONTINGENCY LIST 69kV Interconnection 1 CHOLLA-SAGUARO 500KV LINE 1 2 SAGUARO-TORTOLIT 500KV LINE 1 3 SAGUARO-TORTOLIT 500KV LINE 2 4 SAGUARO-SANTA ROSA 230KV LINE 1 5 CASA GRANDE-MILLIGAN 230KV LINE 1 6 MILLIGAN-SAGUARO 230KV LINE 1 7 SNTAROSA-TESTTRAK 230KV LINE 1 8 VALLEY FARMS 115/69KV XFMR 9 SNTAROSA-DBG 230KV LINE 1 10 SNTAROSA-KNOX 230KV LINE 1 11 CASA GRANDE-DESERT BASIN 230KV LINE 1 12 VISTA E-VISTA W 69KV LINE 1 13 CASA GRANDE-EASTGATE 69KV LINE 1 14 CASA GRANDE-EGATAP W 69KV LINE 1 15 EASTGATN-EGTAP W 69KV LINE 1 16 EASTGATN-VISTA E 69KV LINE 1 17 SNTAROSA-VISTA 69KV LINE 1 (PRE) 18 SNTAROSA-ASARCO TAP 69KV LINE 1 (PRE) 19 ASARCO TAP-VISTA 69KV LINE 1 20 SANTA ROSA-Q92 (PST-Q92) 21 Q92-ASARCO TAP (PST-Q92) 22 MILLIGAN-SE12 69KV LINE 1 23 EASTGATN-TOLTEC 69KV LINE 1 24 EASTGATN-EGTAP E 69KV LINE 1 25 EGTAP E-TOLTEC 69KV LINE 1 26 ADAMS-APACHE-NOGALES 115KV LINE 1 27 SAGAURO-ED 2 115KV LINE 1 28 TOLTEC-MILLIGAN 69KV LINE 1 29 SAGUARO 500/115KV XFMR 1 30 SAGUARO 500/115KV XFMR 2 31 SAGUARO 230/115KV XFMR 1 32 SAGUARO 230/115KV XFMR 2 33 SNTAROSA 230/69KV XFMR 1 34 MILLIGAN 230/69KV XFMR 1 230kV Interconnection 1 CHOLLA-SAGUARO 500kV LINE 1 2 SAGUARO-TORTOLITA 500kV LINE 1 3 SAGUARO-TORTOLIT 500KV LINE 2 4 SAGUARO-SANTA ROSA 230KV LINE 1 A-1

APPENDIX A CONTINGENCY LIST 5 SANTA ROSA-TEST TRACK 230KV LINE 1 6 KYRENE-OCOTILLO 230KV LINE 1 7 KYRENE-KNOX 230KV LINE 1 8 SAGUARO EAST-SAGUARO WEST BUS TIE 9 SAGUARO-ORACLE 115KV LINE 1 10 SAGUARO-SAN MANUEL 115KV LINE 1 11 ANDERSON-KYRENE 230KV LINE 1 12 KYRENE-KYRENE NEW 230KV LINE 1 13 KYRENE-PAPAGO LINE 1 14 SADDLEBROOKE RANCH-SAN MANUEL 115KV LINE 1 15 COOLRIDGE-VALLEY FARMS 115KV LINE 1 16 VALLEY FARMS-ORACLE 115KV LINE 1 17 VALLEY FARMS 115/69KV XFMR 18 COOLRIDGE-ED 2 115KV LINE 1 19 COOLRIDGE-SUNDANCE 230KV LINE 1 20 COOLRIDGE-SUNDANCE 230KV LINE 2 21 ORACLE-SADDLEBROOKE RANCH 115KV LINE 1 22 ORACLE-TUCSON 115KV LINE 1 23 CASA GRANDE-TEST TRACK 230KV LINE 1 24 SAGUARO-EMPIRE 115KV LINE 1 25 EMPIRE-CASA GRANDE 115KV LINE 1 26 SAGUARO-ED 2 115KV LINE 1 27 COOLRIDGE-SPOOKHIL 230KV LINE 1 28 LIBERTY-LONE BUTTE 230KV LINE 1 29 LONE BUTTE-TEST TRACK 230KV LINE 1 30 LONE BUTTE-SUNDANCE 230KV LINE 1 31 SANTA ROSA-KNOX 230KV LINE 1 32 COOLRIDGE-COL-SCIP 115KV LINE 1 33 COOLRIDGE-ED 2 115KV LINE 2 34 SAGAURO-ED 2 115KV LINE 1 35 PHOENIX-LONE BUTTE 230KV LINE 1 36 CASA GRANDE-MILLIGAN 230KV LINE 1 37 MILLIGAN-SAGUARO 230KV LINE 1 38 MILLIGAN 230/69KV XFMR 39 SANTA ROSA-DESERT BASIN 230KV LINE 1 (PRE) 40 CASA GRANDE-DESERT BASIN 230KV LINE 1 41 SAGUARO 500/115KV XFMR 1 42 SAGUARO 500/115KV XFMR 2 43 SAGUARO 230/115 XFMR 1 44 SAGUARO 230/115 XFMR 2 45 COOLRIDGE 230/115KV XFMR 1 46 COOLRIDGE 230/115KV XFMR 2 47 TESTRACK 230/69KV XFMR 1 A-2

APPENDIX A CONTINGENCY LIST 48 CASA GRANDE 230/115KV XFMR 1 49 SANTA ROSA 230/69 XFMR 1 50 KNOX 230/69KV XFRM 2 51 SAG.EAST-MARANATP 115KV LINE 1 52 DESERT BASIN-PINAL_C 230KV LINE 1 53 PINAL CENTRAL-SUNDANCE 230KV LINE 1 54 SANTA ROSA-Q92 230KV LINE 1 (PST) 55 DESERT BASIN-Q92 230KV LINE 1 (PST) 56 PINAL CENTRAL 500/230KV XFMR 57 PINAL CENTRAL-ABEL 500KV LINE 1 58 PINAL CENTRAL-SANTA ROSA-PINAL W 500KV LINE 1 59 ABEL-BROWNING 500KV LINE 1 60 APACHE - SAN MANUEL 115KV LINE 1 61 HAYDEN - SAN MANUEL 115KV LINE 1 A-3

Appendix B POWER FLOW PLOTS

APPENDIX B POWER FLOW PLOTS Plot 1: Pre-Project, 69kV (MW/%Rate) B-1

APPENDIX B POWER FLOW PLOTS Plot 2: Post-Project 69kV (MW/%Rate) B-2

APPENDIX B POWER FLOW PLOTS Plot 4: Pre-Project 69kV, N-1 Santa Rosa-Desert Basin (MW/%Rating 2) B-3

APPENDIX B POWER FLOW PLOTS Plot 5: Post-Project 69kV, N-1 Santa Rosa-Desert Basin (MW/%Rating 2) B-4

APPENDIX B POWER FLOW PLOTS Plot 6: Post-Project 69kV, 10% Generation for Voltage Flicker Analysis (MW/%Rating 1) B-5

APPENDIX B POWER FLOW PLOTS Plot 7: Post-Project 69kV, 30% Generation for Voltage Flicker Analysis (MW/%Rating 1) B-6

APPENDIX B POWER FLOW PLOTS Plot 8: Post-Project 69kV, 60% Generation for Voltage Flicker Analysis (MW/%Rating 1) B-7

APPENDIX B POWER FLOW PLOTS Plot 9: Post-Project 69kV, 90% Generation for Voltage Flicker Analysis (MW/%Rating 1) B-8

APPENDIX B POWER FLOW PLOTS Plot 10: Pre-Project 230kV (MW/%Rating 1) B-9

APPENDIX B POWER FLOW PLOTS Plot 11: Post-Project 230kV (MW/%Rating 1) B-10

APPENDIX B POWER FLOW PLOTS Plot 12: Pre-Project 230kV with Q78 (MW/%Rating 1) B-11

APPENDIX B POWER FLOW PLOTS Plot 13: Post-Project 230kV with Q78 (MW/%Rating 1) B-12

APPENDIX B POWER FLOW PLOTS Plot 14: Post-Project 230kV with Q78 & Pinal Central 230kV B-13

APPENDIX B POWER FLOW PLOTS Plot 15: Pre-Project 230kV with Q78, N-1 Saddlebrooke Ranch-San Manuel 115kV (MW/%Rating 2) B-14

APPENDIX B POWER FLOW PLOTS Plot 16: Post-Project 230kV with Q78, N-1 Saddlebrooke Ranch-San Manuel 115kV (MW/%Rating 2) B-15

APPENDIX B POWER FLOW PLOTS Plot17: Post-Project 230kV with Q78 and PC 230kV, N-1 Saddlebrooke Ranch-San Manuel 115kV (MW/%Rating 2) B-16