1. Power Association of Northern California Maintaining Grid Reliability In An Uncertain Era May 16, 2011 PG&E Conference Center Jim Mcintosh Director, Executive Operations Advisor California ISO

2. Slide 2 The Challenges & How We Plan To Address Them Forecasting Generation fleet characteristics Ramping requirements Ambitious environmental goals Reliability with fewer gas powered plants Cost containment We need to strike a balance between reliability, renewables, and reasonable cost.

3. Slide 3 Policy Drivers State law AB32 – reduction of greenhouse gas emissions to 1990 levels by 2020 –Western Climate Initiative 20% Renewable Portfolio Standard (RPS) by 2012-2013 33% RES by 2020 (Executive Order) Repowering or replacement of once-through cooling power plants (~34% of in-state gas and nuclear capacity)

4. Slide 4 Additional Supply Side Policies Small-scale renewable feed-in tariff program –Resources must be smaller than 1.5 MW and the cap is 480-500 MW Storage bill AB2514 (Sept. 2010) –Requires the CPUC to consider and adopt procurement targets for viable and coast-effective energy storage systems.

5. Slide 5 Location of OTC plants in local capacity requirement (LCR) areas within CAISO *Retired out 2010

6. Slide 6 MW The 2-3 year look-ahead: renewable resource portfolios in 2006 and 2012 (20% RPS), by capacity (MW)

7. Slide 7 The ISO grid control room faces significant short- and long-term challenges Uncertainty of grid infrastructure development Ramping requirements significantly increased Continued development of control room tools Load and wind forecasting accuracy Rapid changes in grid generation fleet, especially wind and solar technologies 1. Wind and solar variability will be a significant issue by 2012-2013. 2. Synchrophasors are the most significant advancement in control center technology in the last 30 years.

8. Slide 8 These challenges can be addressed through improved control room tools (Synchrophasors) and training Wind and solar modeling & production forecasting State estimator solution & accuracy Grid reliability & engineering studies Network and market modeling Awareness of regional disturbances (e.g. 1996 event) Dynamically assess the grid (EMS not sufficient) 30 samples per second compared to once every four seconds Can increase COI transfer by 1500 MW Estimated reduction in congestions costs $250 million Better real time visualization

9. Challenges of Fossil Fuel and Wind Generation Slide 9  Predictability  No surprises  Dependable energy schedules  Accurate forecasts  Contingency reserves available  Generators that follow dispatch commands  Excellent tools for visibility of system status  High quality data  De-rate information on units is timely and accurate GRID OPERATORS  Hard to predict  Shows up unscheduled  Maximum generation at night when loads are low and there is no place for the energy  Large ramp changes both up and down  Lack of good data from wind generation facilities  Lack of visibility on what wind generations are doing  Don’t follow dispatch commands --- treated as “Must Take” generation WIND GENERATORS

10. Slide 10 Difficulty of Predicting Wind Energy Average Total Wind Generation 0 200 400 600 800 1000 1200 1400 1600 123456789101112131415161718192021222324 MW Wind activity across a 24 hour period.

11. Slide 11 RAMPING! Wind generation tends to be inversely correlated to daily load curve, creating ramping impacts CAISO Load vs. Total Wind Summer 2006 22,000 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 40,000 123456789101112131415161718192021222324 Hours Load MW 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 Wind/Solar MW LoadTotal WindSolar

12. Slide 12 Photovoltaic Plant Output on a Partly-Cloudy Day 10 Second Sample – March 25, 2008

13. 13 Requirements for Integration of Renewables Generation Portfolio Storage Demand Response Resources Required for Renewables Integration Quick Start Units Fast Ramping Wider Operating Range (lower P min ) Regulation capability Shift Energy from off-peak to on-peak Mitigate Over Generation Voltage Support Regulation capability Price sensitive load Responsive to ISO dispatches Frequency Responsive Responsive to Wind Generation Production “Partners in Success” Wind Generation Solar Generation Hydro Generation Geo- thermal Generation

14. Slide 14 New record Wind production About 40 mws Each cell is 2 hours Day ahead schedule Green is actual production