Timeline & Technical Aspects

Q: What is the projected in-service date for the Project?

• Following the acquisition of the necessary ROW, completion of the permitting process and project financing, construction is expected to commence as early as 2011with an in-service date of 2012-2013.

• Single-circuit 345 kV with approximately 900 MW of capacity has been selected as the preferred configuration for the Project. However, the results of the open season process may dictate modifications including double-circuit options involving greater capacity, potentially in phases.

• Our projected route is shown under the "Maps" tab of the home page for the Project. The basic route runs from the coal-rich Powder River Basin through the wind-rich areas of southeastern Wyoming to PSCO’s Pawnee substation northeast of Denver. If the Project is built in an integrated configuration, it may be interconnected to the existing grid at Wyodak, Dave Johnston and Laramie River Station.

• Given the projected load growth of Colorado LSE's together with Colorado's RPS standards, there is an obvious need for additional power in the State. This Project will satisfy a portion of such need.

• Both radial and integration configurations are feasible and offer comparable amounts of capacity - recognizing however, that each option has its own set of advantages and disadvantages. We anticipate offering both options in the open season process and let the marketplace determine the preferred option.

• The most cost-effective approach for both integrated and radial configurations involves series compensation, which will maximize transmission capacity.

• The open season process will dictate if phased development is required to meet the needs of customers, or whether the entire project is developed at one time. However, given the time involved in developing different generation resources, we anticipate that the Project will be developed in phases. Phase I is likely to be "wind" only and likely terminate near the Laramie River Station, near Wheatland. Phase II may be completed at a later date with a load-leveling and/or base-load facility and additional wind resources.

Company Background

Q: Who are the parties responsible for the WCI Project?

• The WCI Project is being developed by a public/private partnership involving the Wyoming Infrastructure Authority and Trans-Elect Development Company, LLC, assisted by the Western Area Power Administration.

Justification/Benefits

Q: How would the Wyoming-Colorado Intertie Transmission Project (WCI) benefit Colorado given the legislature's requirement for the creation & designation of Renewable Energy Resource Zones (ERZ)?

• The projected corridor of the WCI Project will deliver renewable (wind) based power into the proposed ERZ #1 with an interconnect at Pawnee into PSCO's existing system. This injection point is consistent with the Colorado Coordinated Planning Group's 2006 Colorado Long-Range Transmission Plan which includes significant upgrades and transmission additions for PSCO's transmission system in this area.

Q: Why would the purchase of a Wyoming Resource for consumption in Colorado be considered prudent?

• The WCI Project Corridor traverses an area in Wyoming where Class 6 and Class 7 wind resources (the highest class winds in the U.S.) exist in abundance. Higher class winds equate to superior capacity factors (see Project Study Area Map located under the MAPS tab) resulting in more net power produced annually.
• The geographical diversity gained by combining Wyoming resources together with resources from Colorado creates a "smoothing" effect resulting in higher average and more consistent capacity factors thereby reducing wind integration costs (see Figure 1a).
• Not only does Wyoming possess superior wind resources with higher capacity factors, Wyoming wind outperforms other sources during the time of day when demand for power is greatest and has the highest value (see Figure 1b).

Q: What other benefits could be derived by the installation of the WCI Transmission Line?

Utilization of non-firm capacity

• Several recent public studies indicate that substantial non-firm capacity is available across the six transmission lines that constitute the TOT3 transmission constraint. These studies indicate that as much as 500 MW of non-firm capacity may be available a high percentage of the time (see below, from Chapter 5 of RMATS). The development of the WCI line may provide enhanced opportunities to utilize the existing, unutilized non-firm capacity on TOT3, thereby improving project economics for the wind developers who contract for capacity rights on WCI. For instance, a wind developer could contract for 100 MW of capacity on the WCI line and "overbuild" its wind farm by 20% (i.e., a 120 MW wind farm). Such an approach would improve the utilization of its firm capacity on WCI by a similar amount which, in the case of a 45% capacity wind resource, would result in a 54% utilization of its transmission capacity on WCI (45% x 120/100). For a $3.50/kw-mo transmission rate, the transmission charge would effectively be reduced from $10.65/MWh to $8.88/MWh. Such savings could be credited against the value of whatever curtailment may be projected by the wind farm developer as a result of overbuilding.

Wind Overbuild Concept for Southeast Wyoming

(Based on NREL wind projections: 1.5 MW GE turbine @ 80 meter hub height)
NOTE: NREL projections indicate that wind turbines will operate at full capacity 11% of the time in SE Wyoming

• Overbuild Components: There are two components of the generation that would result from overbuilding: (1) the amount that can be moved on the "firm" path and (2) the remaining amount that can only be moved on "non-firm" paths. In the example shown for SE Wyoming for a 20% overbuild for 100 MW of transmission capacity; the amounts in each category are nearly equivalent: 10% or about 42,000 MWh/year (Table 1).
• Firm Shipments: Overbuilding increases the utilization of the firm transmission path, thereby reducing the effective transmission rate for generation moved on the firm path. Using the Wyoming-Colorado Intertie Project (WCI) as the base case for firm capacity, there would be an overall $0.90/MWh transmission savings for all power shipped on the firm path resulting from a 20% overbuild (Table 1).
• Non-Firm Shipments: To the extent that non-firm capacity is available on the primary or secondary transmission paths, excess generation can be shipped on the non-firm path at rates that will be less than the firm rates. In the case of SE Wyoming, there are four existing transmission paths and WCI would add a fifth, thereby providing a multitude of non-firm options for shippers with otherwise stranded generation resulting from an overbuild. Several publications indicate that there is substantial non-firm capacity available on the TOT3 transmission path in SE Wyoming: http://www.wyia.org/wci/p_studies.html
• Net Savings: In the SE Wyoming example, the net transmission savings on all sales for a 20% overbuild would range from $0.97/MWh to $1.53/MWh depending on the path used for non-firm shipments and whether they occur at peak or off-peak rates, respectively (Table 1).
• Risk/Reward for Financing: The ability of a wind developer to obtain financing for the "overbuilt" portion of its wind farm will involve a risk/reward assessment to determine if the reduction in effective transmission rates resulting from the incremental power sales is sufficient to offset the risks of not being able to sell the incremental capacity for those periods of time when the wind farm is operating at maximum output. This assessment will be driven by the developer's projection of the time its wind farm is operating at maximum output (based on met tower data) relative to the availability of non-firm capacity on the interconnected transmission lines for those time periods.
• Conclusion: Contracting for firm transmission capacity positions a wind developer to "overbuild" its wind farm to improve its project economics by reducing its effective transmission rates. In the case of SE Wyoming, the transmission savings may range from $0.97 to $1.53/MWh for all power shipped.

* Rates have not yet been established for WCI; all other rates shown are actual from OATTs

Permitting

Q: What kind of permitting process must the Project go through prior to construction?

• An independent study that defines the requisite permits has been conducted. Such permitting requirements exist on the Federal, Sate and County levels within each state and have been identified as to the type, scope, time frames and contacts for each permit. In addition, approvals for crossings (rail, highway, waterways, transmission lines, pipelines, etc.) will require agreements with the applicable owners and/or regulatory bodies.

Open Season

Q: Are the project developers planning an Open Season designed to auction the transmission capacity and, if so, when?

• The Open Season "offering" is currently planned for 2008. The timing of the Open Season will be influenced by input received by potential bidders on capacity during the initial phases of the open season process; PSCO's "Least Cost Plan" and "Energy Resource Zone" filings to the Colorado PUC; and subsequent regulatory proceedings.

Q: What would occur in the event that the Open Season is oversubscribed?

• Given the interest in the Project and the amount of Wyoming generation under development, we have taken this scenario into consideration in planning the Project which may cause us to modify the design to accommodate additional capacity via double-circuit or higher voltage scenarios.

Q: What would occur in the event that the Open Season is undersubscribed?

• In the unlikely event that the Open Season is undersubscribed, the project participants will have to assess the merchant risks going forward to determine if the non-subscribed portion of the line can financed, potentially involving WIA's bonding authority or other means.

Public Involvement

Q: What type of public involvement is anticipated and how will the Project Developers address this issue?

• A Public Participation Plan is being finalized which will involve public "stakeholder" meetings in the potentially affected communities as part of the process for selecting the optimum routing. It is the intent of the Project Developers to keep the public fully informed from the permitting phase through project completion.