March 31, 2004

Mr. David L. Eves, Vice President

Resource Planning and Acquisition

Xcel Energy Markets

Address

City state zip

Subject:Transmission outlet projects for wind generation on Buffalo Ridge

Your letter dated January 16, 2004

Dear David:

I am writing in response to your letter dated January 16, 2004 requesting information regarding the status and in-service dates of transmission infrastructure improvements in southwest Minnesota. You asked for the following:

  1. Confirm the list of components and in-service dates for the 425 MW outlet capacity project
  2. The in-service date of the Lakefield Junction to Fox Lake 161 kV project
  3. Cost and likelihood of accelerating the upgrades of the 425 MW group
  4. Outlet capacity available today
  5. Outlet capacity available upon the completion of each component of the 425 group of upgrades
  6. When 540 MW of outlet capacity will be achieved

I will address the first three items on this list. The last three items are issues of capacity, and MISO will be addressing those items in the near future. Xcel Energy is currently assisting MISO with this study.

As was posted to the MISO OASIS in February 2003, the anticipated in-service date for the 425 MW project is April 11, 2006 and the anticipated in-service date for the 825 MW project is October 26, 2007.

Components of the 425 MW Outlet Project

Project Component – 425 Project / Anticipated In-Service Date
Wilmarth – Martin County 345 / Complete
Black Dog transformer / Complete
Paynesville transformer / Complete
Grant County – Brandon 115 / Complete (MRES project)
Chanarambie – Lake Yankton 115 / Complete
Minnesota Valley relaying / April 2004
Lyon County substation / April 2004
Willmar – Kerkhoven tap 115 / May 2004
Summit – Loon Lake tap 115 / May 2004
Lake Yankton SVC / May 2004
Lake Yankton substation / May 2004
Lake Yankton – Lyon County 2nd 115 circuit / October 2004
Bird Island – Franklin 69 / December 2004
Alexandria – Douglas County 115: Xcel segment / December 2004
Alexandria – Douglas County: Otter Tail segment / TBD
Troy Switching Station 69 / December 2004
Paynesville – Wakefield / April 2005
Minnesota Valley – Redwood Falls tap / May 2005
Willmar 115/69 transformer / December 2005 (Willmar Municipal Utilities project)
Minnesota Valley transformers / February 2006
Lakefield to Fox Lake 161 / April 2006

Project Acceleration

The Xcel Energy transmission organization continues to review opportunities to accelerate the completion of the 425 and 825 MW outlet projects. For example, our construction crews are working overtime on key projects. We are utilizing contract construction crews on several projects this year. In addition, we have augmented our workforce with consultants in order to speed the permitting processes.

We are also working aggressively with MISO and are reviewing operational studies in order to determine intermediate steps that will yield additional outlet capacity. We expect positive results, and anticipate additional outlet capacity will be available later this year.

Per FERC regulations, this letter has been posted to the MISO OASIS.

Sincerely,