Regional Transmission Expansion Plan Massachusetts Electric Restructuring Roundtable October 28, 200

1
Regional Transmission Expansion
PlanMassachusetts Electric Restructuring
RoundtableOctober 28, 2004

• Jimmy Cross
• Vice President System Planning
• ISO New England

2
About ISO New England

• Private, not-for-profit corporation created in
  1997 to oversee New Englands deregulated
  electric power system
• Regulated by the Federal Energy Regulatory
  Commission (FERC)
• Independent of companies doing business in the
  market
• Independent board of directors, with no financial
  stake in regional energy firms
• Approximately 400 employees headquartered in
  Holyoke, MA

3
Planning Process

• ISO Role in Restructured Electric Industry
• Provide independent assessment of bulk power
  system needs
• FERC granted ISO sole authority to lead planning
  effort (2000)
• Stakeholder input from Transmission Expansion
  Advisory Committee
• Regional Transmission Expansion Plan for 2004
• The most comprehensive planning effort to date to
  ensure system reliability and promote market
  efficiency
• RTEP04 constitutes a regional system plan
• Objectives
• Identify system needs
• Provide information to the marketplace to attract
  generation, merchant transmission, and
  demand-response solutions
• Identify regulated transmission solutions as a
  backstop for reliability

4
Planning Process
New Generation
Retirements/Deactivations
Planning is Ongoing
Transmission Projects
Load Forecast
Demand-Side Management
Demand Response Program
5
Reliability Concern in Load Pockets

• Areas with limited import capability and local
  generation
• Southwest Connecticut
• Connecticut
• Boston
• Northwest Vermont
• Timely completion of 345 kV transmission upgrades
  to these areas is essential to address
  reliability concerns and to allow needed
  development of new resources.
• Even with new 345 kV transmission, only a limited
  time for re-powering or developing new resources
  will exist.
• Market incentives are needed to promote
  development of new resources.

6
System-Wide Resource Reliability

• Present capacity surplus will be short-lived.
• New England supply outlook shifts from tight to
  deficit conditions in two to four years.
• Some generation units needed for system
  reliability are at risk.
• Potential retirements/deactivations include units
  in critical load pockets.

7
System-Wide Resource Reliability, cont.

• New England is heavily dependent on gas-fired
  generation.
• The 9,500 MW of capacity added since 1999 is
  largely gas-fired.
• Approx. 11,500 MW of capacity is now capable of
  burning gas as a primary fuel.
• Poses major concerns for unit availability during
  winter periods.
• Region is vulnerable to price fluctuation,
  delivery constraints and competing demands for
  natural gas.
• Cold Snap initiatives are underway to improve
  unit availability, and thus system reliability,
  during winter season.

8
New Englands Capacity Situation Todays surplus
capacity situation will be short-lived
9
Transmission Projects

• Progress in Several Areas Since RTEP03
• Projects placed in service since RTEP03 25
• Total New RTEP04 projects 39
• Total RTEP04 projects needed for reliability
  246
• Major 345 kV Projects (Estimated costs)
• Southwest Connecticut Reliability Project (890M)
  
• Southern New England Reinforcement Project
  (125M)
• NSTAR 345kV Transmission Reliability Project
  (217M)
• Northwest Vermont Reliability Project (156.3M)
• Northeast Reliability Interconnect Project
  (90.4M)
• Subtotal approximately 1.5 billion
• Remaining RTEP04 Projects approximately 0.6
  billion
• 2004 Transmission System Project Plan Grand
  Total 2.1 billion
• Additional equipment or expense may be required
  for underground design.

10
Market Information

• New England needs a capacity market that
  appropriately values the location of resources.
• RTEP04 provides historical market information and
  economic assessments of the system in the future.
• Congestion component of energy pricing has been
  low.

11
Conclusions

• Reliability is at risk in Southwestern
  Connecticut, the State of Connecticut, Northwest
  Vermont and Boston.
• Problems in these areas could adversely impact
  the regional bulk power system.
• Resource reliability could become a major
  system-wide issue for New England in two to four
  years.
• Timely completion of transmission projects is
  critical.
• Delays exacerbate reliability problems.
• Implementation of actions identified in RTEP04
  and enhancements to the market design are needed
  to address New Englands reliability concerns.

12
Questions?
13
Backup material
14
Connecticut Capacity Situation
15
Southwest Connecticut Capacity Situation
16
Post-Contingency ViolationsCurrent System
Thermal Overloads