#1 (small gauge Brown(?) wire) is the alternator indicator/exciter lead for the regulator, #2 (large gauge Red) goes back into the harness for the system voltage "sense", to control the alternator output.....some Oldsmobiles, Cadillacs, Buicks (and maybe some other later GM's) loop that wire directly back to the output terminal.
Should be part of the 4 wire harness that comes up along the intake manifold with the A/C kick up wire, A/C compressor clutch wire and something else. ???