Jones Creek Project

Submitted to RPG on July 7, 2014

July 22, 2014 Regional Planning Group Meeting

Background

Freeport

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Background

By 2017, Freeport area is projected to be served by two 345/138 kV autotransformers and three long 138 kV circuits

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Background (cont.)

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Background (cont.)

Freeport LNG has publicly announced o Liquefaction and Export Project in the Freeport area:

• 3 liquefaction trains

• 721 MW load

• Still need FERC authorization - Expected in 3rd Qtr of 2014

• Sign service extension agreement with CNP in 3rd Qtr of 2014

• Operational 3rd Qtr 2017o Pretreatment Facility (PTF) north of Freeport:

• Build in conjunction with Liquefaction and Export Project

• 109 MW load, 82 MW generator

• CNP CCN approved on January 27, 2014

• CNP Oyster Creek Substation – BP2017

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Study Case Analysis

Modify SSWG 2017 base case posted in October 2013

- Increase load at 138 kV QNTANA Substation by 721 MW

- Increase generation ERCOT-wide to balance the new load

- Add Oyster Creek Substation with 109 MW load, 82 MW generator, and 40

MVAR capacitor bank

Study Approach

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Study Approach (cont.)

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Phase I: Study Case Results

CNP performed contingency analysis based on Section 4.1.1.2 of the

ERCOT Planning Guides:

NERC Category B (single contingency)

NERC Category C (common mode contingencies)

Contingencies relating to ERCOT Autotransformer unavailability criteria

Several overloads and low voltages on 138kV system in Freeport area

Some overloads higher than 150% on 138 kV lines serving as a source to

QNTANA.

Case does not solve under contingency loss of both Dow-Velasco

autotransformers, indicating potential voltage collapse

Results show that significant reinforcement is needed

Study Approach (cont.)

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Connection Options

Option 1: Build Additional 138 kV Circuits – Rejected Option

Two new 21 mile circuits, new 5 mile double-circuit, new 138kV sub, other…

Estimated cost greater than $125 million

Requires acquisition of 47 miles of new right-of -way

Project completion unlikely by Customer’s planned load addition in Q3 2017

Option 2: Build new 345/138 kV Substation “Jones Creek Project” - Preferred

New 345/138kV Sub, 2 autotransformers, circuit extensions < 1 mile, other…

Estimated cost for Jones Creek Project is $79.8 million

CNP has existing substation site and right-of-way for new facilities

CNP can complete project by Customer’s planned load addition in Q3 2017

Provides cost-effective 345 kV injection point, minimizes new transmission line

construction, minimizes landowner impact, and reduces project lead time.8

Jones Creek Project

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$79.8 million Jones Creek Project recommended to serve the 721 MW Freeport

LNG load

Jones Creek Project energization planned for BP2017

Complete in time for Freeport LNG 1st Train

Project only moves forward if Freeport LNG:

Signs service extension agreement with CNP

Gives Notice to Proceed

Securitizes project

All expected to occur in 3rd Quarter of 2014

Summary

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Questions?