Group of Texas transmission providers to file plan for CREZ wind initiative

Austin, TX, Sept. 12, 2008 — A group of Texas transmission providers announced that it will file a detailed proposal with the Public Utility Commission of Texas (PUCT) for the construction of electric transmission as part of the Competitive Renewable Energy Zone (CREZ) process.

Members of the group include: Electric Transmission Texas LLC (ETT), LCRA Transmission Services Corp. (LCRA TSC), Oncor Electric Delivery, Sharyland Utilities, South Texas Electric Co-op (STEC) and Texas-New Mexico Power Co. (TNMP). This group consists of companies currently certified to build electric transmission facilities in Texas, with established companies joining in cooperation with new participants seeking to expand their transmission operations in the state.

The group’s joint plan describes:

* A comprehensive implementation plan to build approximately 2,400 miles of 345-kV transmission lines and associated electrical substations to meet the needs of the state’s CREZs.

* Established relationships with key vendors of needed raw materials and equipment, which will allow for the prompt, cost effective completion of the CREZ facilities.

* A history of secure financing under known standards established by the Public Utility Regulatory Act that will assist in completing the planned transmission expansion in the most cost-effective manner.

* Coordination of CREZ facilities with existing load and generation serving facilities to maximize efficient expansion of the grid.

* A long-term transmission commitment to Texas with members of the group having operated in Texas for decades and paying hundreds of millions of dollars every year in taxes and Texan’s salaries.

* A new transmission entity willing to make substantial new investments in Texas.

The proposal will establish the group’s ability to obtain the necessary certification to construct the CREZ transmission facilities. It will describe the group’s extensive support networks available to plan, design, finance and construct the needed facilities in the most cost-effective manner.

In addition, this joint proposal will demonstrate the capability of the group to operate and maintain the transmission facilities after they are built, while complying with all legal and regulatory requirements without duplicating infrastructure and personnel that otherwise would be necessary for a stand-alone start-up entity. Also, unlike start-up entities, each of the companies in this group already has received a Certificate of Convenience and Necessity (CCN) from the PUCT, meaning they can begin the process immediately once given the go-ahead from the commission.

When the PUCT adopted the Scenario 2 CREZ Plan, it encouraged organizations to work together to help ensure timely cost-effective development of transmission facilities to support wind power. Scenario 2 envisions the construction of approximately 2,400 miles of new 345-kV transmission lines at a projected cost of $4.9 billion.

The original group consisting of ETT, LCRA TSC, Oncor and Sharyland filed their initial statement of intent with the PUCT on July 24, 2008. Since that time, the South Texas Electric Co-op and Texas-New Mexico Power Co. have joined the group, providing added operational experience and financial capabilities. As this process moves forward, the group will continue discussions with other entities seeking to become part of the joint proposal.

The joint proposal outlines the transmission facilities that each member of the transmission group will develop in order to bring wind power from the west to the load centers throughout Texas. While each transmission provider will assume responsibility for permitting, construction, operation and maintenance of their proposed facilities, the group will closely coordinate all aspects of the overall CREZ project and work with the Electric Reliability Council of Texas (ERCOT) in the implementation.

ETT proposes to build and own CREZ transmission facilities within and around the AEP Texas North Co.’s distribution service area; LCRA TSC and Oncor propose to develop transmission facilities in and around their service areas; Sharyland proposes developing transmission facilities in the Texas Panhandle that are not currently in the ERCOT transmission footprint; the South Texas Electric Co-op proposes building transmission facilities in Crockett, Pecos and Schleicher counties southeast of McCamey, Texas; and Texas-New Mexico Power Co. proposes to build transmission facilities in Montague County.

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