TEAC22

1. TEAC22 Wednesday, June 2, 2004 Radisson Hotel Marlborough, Massachusetts

2. TEAC22 Agenda • Welcoming Remarks • Fuel Diversity Issues • Power Plant Emissions • Renewable Standards Impacts • Operable Capacity Analysis • New England Capacity Outlook • Transmission Planning Studies Updates

3. TEAC23 - June 25th • Historical Market Data • Economic Benchmarking • LICAP • Price Responsive Load Response Analysis

4. Transmission Expansion Advisory Committee 22nd Meeting Cold Snap Activities Update June 2, 2004 Marlborough, Ma Mark Babula - ISO-NE

5. Fuel Diversity Working Group (FDWG): • Five (5) meetings to date • January 2004 Cold Snap: • Charged with the Electric & Gas Wholesale Initiative (EGWI) Project • Working in concert with the NEPOOL Cold Snap Task Force (CSTF) • Revising Fuel Diversity Assessment within RTEP04 to address concerns

6. Development of Issue List: • 51 original items – post January Cold Snap • Issues compiled from various sources • Closed-out 19 issues – 32 open items • Segmented into 3 categories: • Reliability, Markets & Communications • Action item assignees & target completion dates • Posted on FDWG & CSTF web-sites

7. ISO Activities on Cold Snap Issues: • Three high priority, short-term objectives targeted for implementation prior to Winter 2004/2005 • Formation of the Electric & Gas Operations Committee • Cold Snap Initiated - Electric Market Timeline Advancement • Materialization of more dual fuel capability

8. ISO Activities on Reliability Issues: • Assessing modifications to Objective Capability • Revising the Fuel Diversity Assessment within TEAC’s - RTEP04 • Investigating the identification of common mode failures on fuel supply & delivery systems • Assessing impacts of rolling blackouts & reviewing system restoration • Revisiting dual fuel issues

9. Revisiting Dual Fuel Issues: • How much do we really have? • Is it in the right location? • What are its limitations on sustainability? ----------------------------------------------------------- • How much do we really need & where? • How can we better manage that resource pool? • How can we make more dual fuel capability materialize?

10. ISO Dual Fuel Activities: • Assess Current Dual Fuel Capability • Obtain generator air, water & oil storage permits • Summarize fuel switching provisions and limitations • Analyze Dual Fuel Constraints • Determine the regulatory, design and operating constraints on single fuel units that impede or preclude dual fuel capability

11. ISO Dual Fuel Activities: • Assess Dual Fuel Expansion Strategies & Perform Feasibility Analysis • Identify technical, regulatory & policy alternatives that would serve to improve dual fuel opportunities • Assess ramifications and likelihood of alternatives, along with regional issues • Review alternatives with State Agencies to evaluate viability & concerns • Meetings scheduled with Air Regulators

12. ISO Activities on Market Issues: • Gas & electric market timelines & scheduling • Straw proposal on market timeline advancement • Review of existing electric market rules for proper incentives & penalties • Does LICAP reflect proper incentives for delivery • Should gas-only generation be required to have and use firm transportation to supply NEPOOL load. • Equitable reimbursement of operating costs • Minimization and management of risk

14. ISO Activities on Communications Issues: • Reviewing and revising Operating Procedure #5 – Generator Outage & Maintenance Scheduling (i.e. economic outages) • Enhancing communications associated with Operating Procedure No. 4 & Conservation Appeals • Assessing needs and requirements for common-mode education & operator training • Started the process to coordinate gas & electric: maintenance, operations & emergency communications

15. Electric & Gas Coordination & Communications • Rolling Blackouts & System Restoration: • Assure that OP7 invocation will not impact critical pipeline or LDC facilities (w/focus on peak-shaving) • System Restoration Working Group - foundation work done by Levitan under ISO-NE Phase II Gas Study • Enhance existing operating procedures and protocols (OP6 & OP11) to formalize operator communications during emergencies

16. Electric & Gas Coordination & Communications • Maintenance Coordination: • Initial meetings between ISO and gas industry to coordinate annual maintenance requirements between pipelines/LDCs and the electric sector. • Notify ISO of short-term gas-side maintenance via pipeline & LDC EBBs • Need to establish a protocol with Distrigas LNG

17. Electric & Gas Coordination & Communications • Operations Coordination: • Establishing ISO access to pipeline EBBs (or e-mail or fax notification) to give advance notification of pipeline capacity constraints • Emergency Communications – updating bilateral contact information and develop ongoing dialogue between industry operating personnel

18. Electric & Gas Coordination & Communications • Operator & Forecaster Training • Understand the pipeline grid and the nature of Capacity Constraints, OFOs, & Critical Notices • Understand the ramifications of generator contracting practices • Provide ongoing common mode training for gas & electric system operations personnel

19. Electric & Gas Coordination & Communications • Support further coordination through participation in: • NERC - GEITF • NAESB - GECTF • Establish a new Electric & Gas Operations Committee which will facilitate the activities identified through the Electric & Gas Wholesale Initiative process

20. Questions?

21. RTEP04 Fuel Diversity Analysis TEAC 22 Presentation June 2, 2004 Peter Wong ISO-NE Power Supply & Reliability

22. RTEP04 Fuel Diversity Analysis The objective of this fuel diversity analysis is to investigate the impact on system resource adequacy due to potential fuel shortages, covering 2004 through 2013, assuming: • Fixed NEPOOL generation capacity • Currently known static transmission constraints

23. RTEP04 Fuel Diversity Analysis Several natural gas shortage scenarios were simulated assuming the shortage of gas fired generation in New England and the Sub-areas of NOR, SWCT and NEMA/Boston. The analysis simulated system conditions on an annual basis to facilitate system modeling. Annual simulations allow results to be tabulated in various forms (annual, seasonal, monthly, etc.) as deemed appropriate.

24. RTEP04 Fuel Diversity Analysis System load, generating capacity and static transmission interface limit assumptions are consistent with RTEP04 MARS (reliability) simulations. TEAC20 and TEAC21 presentations summarize these assumptions. Copies of these presentations are posted on the ISO-NE web site under Quick Links (Transmission Expansion Advisory Committee).

25. RTEP04 Fuel Diversity Analysis Assumed Transmission Import Capability Existing Import Capability: • NOR – 1,100 MW • SWCT – 2,000 MW • CT – 2,200 MW • NEMA/Boston – 3,600 MW Proposed Upgrades: SWCT Phase I: • NOR – 1,300 MW • SWCT – 2,550 MW SWCT Phase II: • NOR – 1,650 MW • SWCT – 3,400 MW NEMA/BOSTON Import: • NEMA/Boston – 4,500 MW CT Import: • CT – 3,200 MW

26. RTEP04 Fuel Diversity Analysis NEPOOL Installed Capacity Mix

27. NEPOOL Installed Capacity by Fuel Type MW & % The amount does not reflect settlement only units.

28. NB - NE NB - NE Phase II Phase II HQ NB Orrington South Orrington South Highgate Highgate VT Surowiec South Surowiec South ME - NH ME - NH East - West East - West BHE ME S-ME NH Boston Boston North - South North - South NY - NE NY - NE BOSTON CMA/ W-MA NEMA NY SEMA/RI SEMA/RI Connecticut Connecticut SEMA SEMA CT CSC CSC RI SEMA South West South West CT CT Nuclear NOR SWCT Coal Gas Oil Hydro Norwalk - Stamford Norwalk - Stamford Pumped Hydro MISC 2004-2013 Sub-area Installed Capacity by Fuel Type- MW

29. NEPOOL Sub-area Installed Capacity by Fuel Type

30. RTEP04 Fuel Diversity Analysis Cases Simulated for this Year’s Analysis Effort

31. RTEP04 Fuel Diversity CasesNew England Region

32. RTEP04 Fuel Diversity CasesNOR and SWCT Sub-areas

33. RTEP04 Fuel Diversity CasesNEMA/Boston Sub-area

34. RTEP04 Fuel Diversity Analysis Results of LOLE Reliability Simulations

35. RTEP04 Fuel Diversity Analysis New England Regional Results (LOLE in days/yr) *The 200 MW RFP is assumed retired when SWCT Phase I is in service. Note: Attainment of a 0.10 days per year (or lower) LOLE criterion does not ensure reliability. There may still be any number of reliability concerns that traditional deterministic and detailed system assessment methods are designed to identify.

36. RTEP04 Fuel Diversity Analysis New England Regional Results (LOLE in days/yr) Note: Attainment of a 0.10 days per year (or lower) LOLE criterion does not ensure reliability. There may still be any number of reliability concerns that traditional deterministic and detailed system assessment methods are designed to identify. *The 200 MW RFP is assumed retired when SWCT Phase I is in service.

37. RTEP04 Fuel Diversity Analysis

38. RTEP04 Fuel Diversity Analysis

39. RTEP04 Fuel Diversity Analysis New England Regional Results (LOLE in days/yr) *The 200 MW RFP is assumed retired when SWCT Phase I is in service. Note: Attainment of a 0.10 days per year (or lower) LOLE criterion does not ensure reliability. There may still be any number of reliability concerns that traditional deterministic and detailed system assessment methods are designed to identify.

40. RTEP04 Fuel Diversity Analysis New England Regional Results (LOLE in days/yr) *The 200 MW RFP is assumed retired when SWCT Phase I is in service. Note: Attainment of a 0.10 days per year (or lower) LOLE criterion does not ensure reliability. There may still be any number of reliability concerns that traditional deterministic and detailed system assessment methods are designed to identify.

41. RTEP04 Fuel Diversity Analysis

42. RTEP04 Fuel Diversity Analysis

43. RTEP04 Fuel Diversity Analysis New England Regional Results (LOLE in days/yr) *The 200 MW RFP is assumed retired when SWCT Phase I is in service. Note: Attainment of a 0.10 days per year (or lower) LOLE criterion does not ensure reliability. There may still be any number of reliability concerns that traditional deterministic and detailed system assessment methods are designed to identify.

44. RTEP04 Fuel Diversity Analysis

45. RTEP04 Fuel Diversity Analysis

46. Air Emissions Analysis A Presentation to the Transmission Expansion Advisory Committee Scott Hodgdon June 2, 2004

47. Objective • Quantify the amount of aggregate generating unit air emissions (SO2, NOX, and CO2) in select scenarios investigated within RTEP04 • Capacity scenarios • Transmission interface limit scenarios • Fuel price scenarios • Sub-area incremental/decremental load scenarios • TBD • Unit generation results obtained from IREMM results

48. Emission Rate Assumptions • Units of lbs/MWh • Obtained from various sources • US EPA (Scorecard and Egrid2002) • Existing ISO-NE Data • Similar type units • MA and CT State regulations/legislations modeled • Effect on emission rate changes illustrated • State Renewable Portfolio Standards not explicitly modeled

49. Emission Rate Assumptions Connecticut State Legislations/Regulation Assumptions

50. Emission Rate Assumptions Massachusetts Compliance Standards and Dates • Compliance path is the dates that a station is scheduled to meet the state emission standards. • Generating stations compliance path depicted by their Emission Control Plans (2 stations on Path I and 4 on path 2) • CO2 Standards noted in MA 310 CMR to not modeled due to various means to comply.