Ron ElsnerProject Director

June 20, 2006

Metro Emissions Reduction ProjectA.S. King Rehabilitation

Presentation OutlineMN MERP OverviewAllen S. King Project Schedule OverviewStatus Update ( including progress photos)Key Remaining ActivitiesInfluences – Internal & External

MN MERP Overview

Emissions Reduction Rider signed into law: Summer 2001Project development: September 2001 – May 2002Initial proposal filed with MPUC: May 2002MERP Project Proposal filed with MPUC: July 2002Regulatory review and public hearings: Sept 2002 –November 2003Settlement Agreement executed: November 2003— King Rehabilitation $382 M May 2007— High Bridge Combined Cycle $395 M May 2008— Riverside Repower $212 M May 2009MPUC Approval: December 18, 2003

King Plant RehabilitationInstall new state-of-the-art pollution control equipment, rebuild the existing boiler, replace the existing steam turbine,install new digital plant control system, and upgrade balance of plant equipment as necessary.

In-Service Date: May 2007

Capital Cost: Settlement Estimate: $382 million

Emissions Reductions: NOx ~17,000 TPY (89%)

SO2 ~24,000 TPY (91%)

PM ~90 TPY (20%)

HG ~ 15 #/yr (20%)

High Bridge ConversionInstall two new natural gas fired combustion turbines operating in ‘combined cycle’ mode to power a new steam turbine. Retire and demolish the existing facility after the new system is installed.

In-Service Date: May 2008

Capital Cost: Settlement Estimate: $395 million

Emissions Reductions: NOx ~ 4,400 TPY (98%)

SO2 ~ 3,100 TPY (100%)

PM ~ 100 TPY (100%)

HG ~ 66 #/yr (100%)

High Bridge – Future View

Riverside RepoweringInstall two new, natural gas fired combustion turbines operating in ‘combined cycle’ mode to power the existing Unit 7 Steam turbine. Retire and demolish Unit 8 after completion of the new installation.

In-Service Date: May 2009

Capital Cost: Settlement Estimate: $212 million

Emissions Reductions: NOx ~ 13,000 TPY (99%)

SO2 ~ 12,000 TPY (100%)

PM ~ 540 TPY (100%)

HG ~ 98 #/yr (100%)

Riverside – Future View

Combined Emissions Reductions

NOx ~ 34,000 TPY 91%

SO2 ~ 39,000 TPY 93%

PM ~ 730 TPY 55%

HG ~ 179 #/YR 77%

(Projected annual average for combined emissionsfrom three plants over period 2010 – 2020)

King Rehabilitation

Lime Prep Building looking NE

Functional OrganizationEngineering Manager

Russ GirtzOversight of Design BasisSupport Data Requests from otherXcel Energy Depts. and/or BusinessUnitsInter face with the B&V Project TeamProvide oversight of and direction toother technical and engineeringresources on the Project, Including:

Environmental ConsultantsKing System EngineersES Production ResourcesUEC Engineer ingSupply Matter Experts

Technical Data ReviewConstruction Support

Subject Matter Experts (SMEs)Project Director

Ron ElsnerDevelop and implementProject PlanExternal InterfaceTechnicalFinancialPlanning and SchedulingImplementation andconstructionStart-up

Construction ManagerByron Nordell

SafetyConstruction PlanningContractor OversightSite Support LaborSite Services SupervisionInspection and TestingProject AdministrationLabor Relations with Minnesota BuildingTrades Council

Project Management ConsultantWayne Osatiuk

Master Project ScheduleMaster Project CostProject ScopeProject Resource ManagementProject ProcurementProject Risk ManagementProject Collaboration Tool (Expedition)Project Reporting

Plant LiaisonMike Miser

Distr ibution of:General project informationIssue specific and/or task specific informationto the plant staff

Communicating schedule information to plantpersonnelParticipating in and representing plant interests inthe development and review of the projectscheduleResponsible for determining which groups and/orindividual members of the plant staff shouldprovide subject matter expertise on given topicsAccountable for assuring that necessary andappropriate groups and/or individuals at the plantare involved in (or, are given the opportunity toprovide input to) the project.Accountable for meeting deadlines for review,consolidation, and return of data/information/comments from the plant to the project.

A&E Project ManagementCathy Weber

Manage and supervise ES contract.Ensure engineering activities are carr iedout to support the project schedule,budget, and needs of all projectparticipants.Supervise the engineer ing staff at B&V toensure that budget and schedule are met.Provide timely reviews of projectengineer ing status.Ensure that all Quality Assurance andQuality Control requirements forengineer ing are met.Establish and maintain procedures andprocess.Meet with Xcel Energy Core ManagementTeam to update the project status, noteand resolve areas of concern, and providesupport as requested.Project ReportingEnsure that the ES provided support forthe requirements in the King PlantRehabilitation Project SettlementAgreement.

Commercial ManagerBrian Westerhaus

Supplier Selection ProcessBid Package CreationBid Analysis ProcessContract Administration

Start-Up ManagerRich Goshorn

Develop Start up & Commissioningplan and scheduleOversee development of Start-UpProceeduresOversee Start-Up & Commissioning ofall new equipment

Project Approach/ Plan

Collection of distinct sub-projects

Familiarity and experience with sub-projects

Traditional Owner-Managed approach— Owner’s Engineer: B&V— Equipment Procurement and Installation: Self Contract— Construction Management: Utility Engineering— Commissioning & Start-up: Self Perform

Allen S. King Project Schedule Overview

Start of engineering: October 31, 2003Contracted for major equipment: July, 2004Groundbreaking: April 22, 2005Foundations and substructures complete: December 28, 2005Start of new equipment commissioning: March 2006Unit comes out-of-service: September 5, 2006Boiler rebuild & steam turbine replacement: Sept 2006 – Jan 2007‘First Fire’ on coal: March 2007Return to service: May 2007 – Project remains on schedule

Activities Completed to DateAll environmental permitting complete – Stateand FederalDetailed design and integration: 95% completeMajor procurement: 100% Complete— Competitive bidding process— Firm price contractsOverall construction : ~45% completeCommissioning & startup: — Planning: Complete— Implementation: In progressOperating procedures development: In progressOperator training: In progress

Procurement of Major Components

AQCS: – Alstom ECS; Knoxville– Delivery ~95%; Construction ~60%

SCR: – Mitsubishi Power Systems; Newport Beach– Delivery ~95%; Construction ~50%

Boiler: – B&W; Barberton– Design ~100%; Manufacturing: 90+%

Steam Turbine: – Alstom Power; Richmond, Rugby, Elblag– Design ~100%; Manufacturing 90+%

Major Construction Contracts

Substructures: Lunda Construction; Little Chute, WISCR Mechanical: Graycor; Homewood, ILAQCS Mechanical: GraycorAQCS Electrical: Frauenshuh PD; MinneapolisDCS/BOP Electrical: Capital; Kansas CitySteam Turbine Area Mechanical: O.J.Boldt; Appleton, WIBoiler Area Mechanical: B&WCC (pending)

General Construction Progress

1st Pier Being Drilled

Circulating Water Pipe

SCR Structural

AQCS Structural

SDA Vessels

Fabric Filter Structural

Lime Prep Building

ID Fans

AQCS Switchgear

New Cooling Tower

Steam Turbine

Boiler Cyclone

Distributed Control System (on factory test floor)

Key Remaining Activities

Cooling Towers In-Service: June 1, 2006AQCS/SCR Mechanically Complete: September 1, 2006Unit Out-of-Service: September 5, 2006Demolition Substantially Complete: October 15, 2006Boiler Pressure Parts Complete: January 31, 2007First Fire on Gas: February 2007First Fire on Coal: March 2007First synch to the grid: April 2007Unit Return-to-Service: May 2007

Influences – Internal & External

Construction labor availability and productivityin Fall 2006

– Extended periods of multi-shift overtime activities

– May be competing with ourselves for resources (Sherco)

Tight marketplace and commodity price increases

Operator training & initial plant operation – Rehabilitated plant will have some fundamental

differences from existing configuration.