rHE rExas connvccTiorv July 13, 2009 LCRA Transmission Services Corporation 3700 Lake Austin Blvd. Austin, Texas 78767 Attn.: Sergio Garza, P.E. Manager, System Planning and Protection Mr. Garza: ERCOT has reviewed and analyzed the engineering specifications for LCRA's proposed change to the endpoint of the Gillespie-Kendall transmission line included in the CREZ Transmission Optimization (CTO) Study filed by ERCOT in Public Utility Commission of Texas (PUCT) Docket No. 33572. In the CTO Study, the subject line was specified as a new 345-kV right-of--way (ROW) connecting the Gillespie substation to the 345-kV Kendall substation. Following completion of the CTO Study, LCRA proposed changing this line's endpoint from the Kendall substation to a proposed West Wind substation located north of Kerrville near the border between Kerr County and Gillespie County. LCRA states the purpose of this proposed modification is to utilize an existing ROW for the new345-kV circuit. ERCOT has determined that LCRA's proposed change would result in addiYronal congestion around the Gillespie substation, which would reduce the overall effectiveness of the CREZ Transmission Plan (CTP) and, therefore, would not be consistent with the CTO Study. To mitigate the increased congestion that would result under LCRA's proposal, the following additional system upgrades would be required: 1. The addition of a second 600-MVA 345/138-kV autotransformer at the Gillespie substation; 2. The upgrade of the 138-kV transmission line from Gillespie to Fredericksburg to Kendall from a 220-MVA rating to a 507-MVA rating; and, 3. The upgrade of the 138-kV transmission line from Gillespie to Wolf Creek to Kerrville from a 220-MVA rating to a 507-MVA rating. LCRA informed ERCOT that changing the line's end-point from the Kendall substation to the West Wind substation would save approximately $11 million. LCRA, however, determined that the three additional system upgrades listed above would cost approximately $34 million. Thus, LCRA's proposal reflects a net increase of $23 million relative to the cost associated with utilizing the Kendall substation as described in the CTO Plan. ~° Taylor 7620 Metro Center Drive 2705 WESt lakE DNve Austin, Texas 78744 Td. 512.225.7000 I Fax 512.225.7020 Taylor; Texas 76574 Td. 512.248.3000 I Fax 512.248.3095 Based on the impacts described above, ERCOT does not recommend LCRA's proposal to change the endpoint of the Gillespie -Kendall transmission line from the Kendall Substation to the proposed West Wind substation, because it is neither cost-effective nor consistent with the CTO Study. Please contact me if you have any questions. Sincerely, ~ ~'~ Warren t.asher Manager, System Assessment