MILESTONE SUMMARY REPORT Project funding provided by customers of Xcel Energy through a grant from the Renewable Development Fund

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Project Title: Sodium Sulfur Battery Energy Storage Contract Number: RD3-1 Milestone Number: 1 Report Date: May 0, 009 Reporting Period: September 007 April 008 Milestone Description: Milestone 1 - Specifications and contract negotiations Principal Investigator: Frank Novachek 303.94.410 Contract Contact: Nancy Pellowski 61.330.609 MILESTONE SUMMARY REPORT Project funding provided by customers of Xcel Energy through a grant from the Renewable Development Fund Executive Summary: As the nation s number one wind provider, Xcel Energy wants to harness renewable energy to the greatest extent possible. With that focus, we have launched a groundbreaking project to test cutting-edge technology for storing wind energy in batteries. Our project marks the first use ofr direct wind energy storage technology in the United States. Energy storage is key to expanding the use of renewable energy. Integrating variable wind and solar energy production to the needs of the power grid is an ongoing issue for the utility industry and will become even more important as the penetration of both of these renewable resources increases. The technology we re testing has the potential to reduce the impact caused by the variability and limited predictability of wind and solar generation. Xcel Energy will test a one-megawatt wind energy battery-storage system, using sodium-sulfur (NaS) battery technology. The test will demonstrate the system s ability to store wind energy and move it to the electricity grid when needed, and to validate energy storage in supporting greater wind penetration on the Xcel Energy system. NaS technology has been selected for this project because of its high storage capacity; its ability to handle a large number of chargerecharge cycles as would be incurred Project Objectives Areas of testing that Xcel Energy will perform during the demonstration period include: Evaluation of the ability of large-scale battery-storage technology to effectively firm wind energy, enabling a shift of wind-generated energy from off-peak to on-peak availability. Evaluation of the ability of battery-storage technology to reduce the need to compensate for the variability and limited predictability of wind generation resources. Evaluation of the optimal ratio of energy storage to total wind capacity that would allow the wind energy storage system to be a viable peak-load resource. Evaluation of whether or not the battery is responsive enough to meet the qualifications of spinning reserve, and evaluate any special relay requirements for a spinning reserve frequency response characteristic. Evaluation of the potential for battery-storage technology to support the transmission and distribution grid system and therefore allow the system to more effectively integrate wind into system operations. This includes the ability of the battery discharge and recharge process to be used to buffer and/or smooth the wind generation output ramp rates; the optimal mix of battery uses between demand shaping, generator leveling and contingency reserve response; the ability to provide reactive load support and frequency support. Assessment of cold weather effects on the performance and integrity of the NaS Battery system. with an intermittent renewable energy resource; its large scale and potential for even larger scalability; its dynamic response to system changes; and its demonstrated commercial performance and availability. The first milestone brought together a number of internal and external experts and stakeholders to define the requirements for the sodium sulfur battery system, the power conversion system, and the monitoring and management system. Contracts were completed by March 008, as was an access and cooperation agreement with Rock County Transmission for connection to their wind generation. A construction and use permit was obtained from the Rock County Land

Management Office in April 008. A phone call to MISO clarified that a notification was not required since it did not change the total output of the wind farm under their current agreement. Technical Progress: System specifications are complete and include the following modes of operation: (i) Basic Generation Storage Application, including Battery Charging Mode, Generation Storage (GS) Mode, System Disconnect, System Standby Mode; (ii) Basic VAR Operation, including emergency VAR supply; (iii) Emergency Operation, such as when a known emergency condition is approaching (e.g., a large storm); (iv) Frequency Regulation and (v) Real time dispatch based on price. Conceptual design is complete and includes a one line diagram and site layout plan. Additional Milestones: Milestone addresses final engineering and design work Milestone 3 addresses actual construction and installation activities Milestone 4 addresses development of the research plan for analysis of project results Project Status: Milestone 1 is 100% complete Attachments: 1. Functional specifications for NAS Battery System. Functional specifications for Distributed Energy Storage System (DESS) 3. GridPoint Specifications 4. One-Line Diagram

Attachment 1: Functional specifications for NAS Battery System

Attachment : Functional specifications for Distributed Energy Storage System (DESS)

Attachment 3: GridPoint Specifications

Attachment 4: One-Line Diagram 1 1 MW NaS Batteries Control Wire 800 VDC 08 VAC DESS Control House Rock Creek Switching Substation (Xcel Energy) Data Collection & 4 Economic NREL 6 175 kw Diesel Generator & T-Switch Power Conditioning System (Internal Aux XFMR) 1.5 MVA XFMR Xcel Control House 4 4 Commercial Enterprises EPRI UofMn 7 8 Performance Outreach and Education (IREE) 9 GPI 300 ft. MM Fiber Optic Control Terminal Policy MinWind Substation Vista 101 3 MISO Interconnect 5 Control Intelligence 34.5 kv Bus 3 34.5 kv Bus 161kV 3 MinWind Control ` House & SCADA 1 MVA XFMR Where is the PCC? Transmission 34.5kV Turbines 3.3 MW 34.5kV 5 Turbines 8.5 MW 3 Partner/Potential Partner 1) NGK ) S&C 3) MinWind LLC 4) Xcel Energy 5) VGreen 6) NREL 7) EPRI 8) U of Mn 9) GPI 11.5 MW Minwind Farm LEGAL NOTICE THIS REPORT WAS PREPARED AS A RESULT OF WORK SPONSORED BY PROJECT FUNDING PROVIDED BY CUSTOMERS OF XCEL ENERGY THROUGH A GRANT FROM THE 100% RATEPAYER FINANCED RENEWABLE DEVELOPMENT FUND ADMINISTERED THROUGH THE NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION.