SRP Summer Preparedness 2007 Mike Hummel Manager Supply

SRP Summer Preparedness 2007 Mike Hummel Manager – Supply & Trading and Gary Harper Manager - System Operations ACC Summer Preparedness Hearing March 22, 2007 03/22/07 ACC Open Meeting Summer Preparedness 2007 1

SRP Electric Service Territory Peoria Scottsdale Surprise Phoenix Litchfield Park Paradise Valley Fountain Hills Eastern Mining Area Glendale Tolleson Mesa Tempe Apache Junction Gilbert Avondale Chandler Goodyear 03/22/07 ACC Open Meeting Queen Creek Summer Preparedness 2007 2

Summary • Peak demand is expected to be higher than last year due to continued growth. • Adequate resources have been secured to meet the anticipated demand. • The risk of potential wildfires is a continuing concern. 03/22/07 ACC Open Meeting Summer Preparedness 2007 3

Peak Load Forecast 6627 MW 6590 MW 2006 Actual 03/22/07 ACC Open Meeting 2007 Forecast Summer Preparedness 2007 4

Summer 2006 Retail System Peak ‘Needle Peak’ • Summer 2006 new peak – 6590 MW • Exceeded Base Forecast of 6210 MW by 380 MW – 16 hours • Exceeded High Risk Forecast of 6448 MW by 150 MW (1: 10 occurrence) – 3 hours • 118 degree Peak Temperature (1: 10 occurrence) 03/22/07 ACC Open Meeting Summer Preparedness 2007 5

Summer 2007 Outlook 912 MW 6627 MW Expected Need Expected Capability Reserves Purchased Power 1849 MW SRP Forecast Peak Load SRP 5690 MW Generation Total 7539 MW 03/22/07 ACC Open Meeting Summer Preparedness 2007 6

Reserves • Respond to load extremes above base forecast. • Provide an immediate response to forced outages. • Quantity is based on NERC and WECC operating criteria and contractual arrangements. • A portfolio of resources is utilized to meet the reserve requirements. – Balances “reliability” and “low cost” objectives. 03/22/07 ACC Open Meeting Summer Preparedness 2007 7

SRP Owned Generation – 2007 Total Capacity: 5690 MW Hydro & Renewables 276 MW Gas 2951 MW Coal 1791 MW Nuclear 672 MW 03/22/07 ACC Open Meeting Summer Preparedness 2007 8

Purchased Power • Purchased power portfolio is in place to meet demand. • Additional purchases may be needed to respond to forced unit outages. • Regional market conditions suggest that there will be sufficient capacity to meet the Arizona demand. 03/22/07 ACC Open Meeting Summer Preparedness 2007 9

Fuel Status • Nuclear – Full requirements under contract • Coal – Plants expected to be at or above target inventories by summer season – Full requirements under contract • Natural Gas – Full transportation requirements under contract – In process of securing retail commodity requirements – Distillate fuel back-up 03/22/07 ACC Open Meeting Summer Preparedness 2007 10

Generation Maintenance Completed By Summer 2007 Units Agua Fria Craig Desert Basin Hayden Horse Mesa Kyrene Mormon Flat Navajo Palo Verde Roosevelt Santan Stewart Mountain 03/22/07 ACC Open Meeting 1, 2, 3, 4, 5, 6 2 1, 2, 4 7 1, 2 2 1, 2, 3 1 1, 2, 3, 4, 5 1 Summer Preparedness 2007 11

System Additions Stations NEW NUMBER - Distribution Substations 5 - 28 MVA 69/12 k. V Transformers 9 - 230 k. V Breakers 12 - 69 k. V Breakers 43 - 69 k. V Capacitors 48 MVAR -230/69 k. V Transformers 2 -500/230 k. V Transformers 1 03/22/07 ACC Open Meeting Summer Preparedness 2007 12

System Additions Lines ADDITIONS NUMBER - Pole Replacements 620 - Rebuilt/Upgrade 69 k. V Lines 6. 1 Miles - New Circuit Miles of 69 k. V Line 20. 6 Miles - Rebuilt/Upgrade 230 k. V Lines 17. 5 Miles - New Circuit Miles of 230 k. V Line 03/22/07 ACC Open Meeting Summer Preparedness 2007 9 Miles 13

System Preparation Transmission and substation maintenance and training will be complete by summer. This includes: – Line patrols/inspections – Preventative maintenance – Pole re-enforcement – Pole change-outs/ upgrades – Wildfire coordination 03/22/07 ACC Open Meeting Summer Preparedness 2007 – Tree trimming – Cable replacement – Storm planning – Emergency procedure training – Blackstart training 14

SRP/Wildland Fire Coordination • • • Facilities identification and location Direct communication between SRP and Agencies SRP Advisor Representative on-site Firefighting safety information Participate in State Drill and Southwest Mutual Assistance Committee 03/22/07 ACC Open Meeting Summer Preparedness 2007 15

SRP Electric Facility Firefighting • Support development of Pre-Plan Information for each facility. • Provide Emergency Contact Information for each facility and responding firefighters. • Integrate SRP representatives into Incident Command System management. • Provide firefighter electrical safety awareness and facility orientation training. 03/22/07 ACC Open Meeting Summer Preparedness 2007 16

Arizona EHV Transmission Systems NEVADA TO UTAH Glen Canyon TO NEVADA Marketplace Mc Cullough El Dorado TO UTAH Navajo To Miguel TO COLORADO San Juan TO NEW MEXICO Moenkopi Electrical Substations Coal Generation Mohave Davis Hydro Generation Cholla Coronado Springerville Parker Westwing To Devers COLORADO Shiprock Four Corners Mead TO CALIFORNIA Craig Hayden Pinnacle Peak Rudd Palo Silver King Kyrene Browning Verde Hassayampa Jojoba TO Phil Young PHOENIX AREA (Greenlee) North Gila Saguaro New Gas Generation TO NEW MEXICO Liberty TO TUCSON AREA TO NEW MEXICO South Vail MEXICO 03/22/07 ACC Open Meeting ARIZONA Summer Preparedness 2007 NEW MEXICO North 17

Distribution • Summer operating procedures reviewed and refresher training provided to O&M personnel. • Six mobile substation transformers are available for service if needed. • If required, the process for implementing rotating outages has been automated. – The planned sequence of substation outages and the duration of each outage is the same as in the past. 03/22/07 ACC Open Meeting Summer Preparedness 2007 18

Summary of Year 2007 Projected Conditions • Transmission, SRP generation and planned energy purchases are adequate to serve the forecasted year 2007 demand. • Wildfires are our biggest concern. • Contingency plans are in place to handle emergency events. 03/22/07 ACC Open Meeting Summer Preparedness 2007 19

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