January 24, 2013 TRANSMISSION COMMITTEE MEETING

1. January 24, 2013 TRANSMISSION COMMITTEE MEETING Michael I. Henderson DIRECTOR REGIONAL PLANNING AND COORDINATION Design Basis Document for OATT Changes FERC Order 1000: Transmission Planning & Cost Allocation Interregional Compliance

2. Overview • The FERC Order 1000 compliance filing associated with interregional transmission planning coordination is due on April 11, 2013. • ISO-NE, NYISO and PJM have been meeting to discuss compliance and have agreed to leverage the existing Northeast ISO/RTO Planning Coordination Protocol (“Protocol”) to comply with the Final Rule. • OATT changes are also required under the Final Rule: • Public utility transmission providers (“TPs”) in each pair of neighboring transmission planning regions must develop the same language to be included in each TP’s OATT that describes the interregional transmission coordination procedures for that particular pair of regions. • Alternatively, these procedures may be reflected in an interregional transmission coordination agreement filed on compliance for approval by the Commission.

3. Interregional Transmission Coordination: Order 1000 Requirements • Develop procedures with neighboring regions that address: • Exchange of planning data on a regular basis (at least annually). • Sharing of information on regional needs and potential solutions. • “Identification and joint evaluation of interregional facilities that may be more efficient or cost-effective solutions to regional needs”. • Transparency (posting information on a website(s)). • Joint (interregional) evaluation conducted in the “same general timeframe” as the regional evaluations. • Clarification that a developer must first propose an interregional transmission facility project in each regional planning process, and that theproject must first be selected in both of the regional planning processes in order to receive interregional cost allocation. • A mutually agreeable cost allocation methodology, developed by transmission providers in each pair of neighboring regions and included in each region’s tariff, for an interregional transmission facility located in both regions that was approved and constructed in accordance with Order 1000 provisions.

4. Interregional Transmission Coordination: ISO-NE, NYISO & PJM Approach to Protocol Edits • A proposed new section has been added regarding the identification and evaluation of potential interregional transmission projects, which includes: • Annual review of regional needs and solutions and assessment of the potential for interregional transmission projects by the Transmission Planners. • Data and information exchange between the Transmission Planners. • Transmission Planners’ analysis and consideration of interregional transmission projects. • Stakeholder consideration of interregional transmission projects. • Additional detail has been incorporated for compliance purposes addressing: • Transparency. • Reconciliation of data and models. • Cost allocation for approved interregional transmission projects. • Stakeholder input will be received at both the TC and Inter-Area Planning Stakeholder Advisory Committee (“IPSAC”). • No formal vote on the Protocol edits.

5. Interregional Transmission Coordination: ISO-NE Approach to OATT Revisions • Section 6.3 of Attachment K to the ISO-NE OATT(see slide 6) will be revised to reference the Protocol for the interregional process and procedures associated with: • Data & information exchange. • Analysis & consideration of interregional transmission projects. • Stakeholder consideration of interregional transmission projects. • The specifics concerning cost allocation for approved interregional transmission projects will be expressly reflected in the OATT. • Likely in Attachment K, but possibly in Schedule 12 pending PTO review and input. • Other sections of the OATT will be assessed to determine need for modification. • E.g., Section 3.6 of Attachment K related to the RSP Project List. • The supporting OATT revisions will be brought to the TC for discussions and advisory vote.

6. Existing ISO-NE Attachment K Language 6.3 Inter-Area Coordination The regional system planning process shall be conducted and the annual RSP shall be developed in coordination with the similar plans of the surrounding ISOs/RTOs and Control Areas pursuant to the Northeastern ISO/RTO Planning Coordination Protocol and other agreements with neighboring systems and NPCC. Inter-area planning studies shall be conducted over as broad a region as feasible, including adjacent Canadian systems who are members of NPCC, or its successor organization, and, as appropriate, MAAC and Reliability First, or their successor organizations. The ISO shall convene periodic meetings of the Planning Advisory Committee, within the scope of its respective functions of Section 2 of this Attachment, to provide input and feedback to the ISO concerning an Inter-area needs assessment and identification of potential market and regulated responses to the ISO’s identification of inter-area needs.

7. Schedule • January 24 - NEPOOL Transmission Committee Meeting • January 28 - Order No. 1000 related Inter-Area Planning Stakeholder Advisory Committee WebEx • February 25 – NEPOOL Transmission Committee Meeting • March 15 – NEPOOL Transmission Committee Meeting • March 28 – NEPOOL Transmission Committee Meeting • Advisory voting on OATT revisions • April 5 – NEPOOL Participants Committee Meeting • Advisory voting on OATT revisions • April 11 – ISO-NE Interregional Planning Compliance Filing