2013 Summer Overview Jeffrey S McDonald Power System Operator CUEA San Diego, CA June 6, 2013

ISO history ISO’s and RTO’s created following the 1992 passage of the Federal Energy Policy Act The California ISO was created in September 1996 as a nonprofit public benefit corporation with the passage of California Assembly Bill 1890 March 1998 began serving 80 percent of the state Page 2 California ISO Overview

NERC Interconnections Page 3

38 Balancing Authorities in the West Page 4

California ISO service area is diverse  58,698 MW of power plant capacity  50,270 MW record peak demand (July 24, 2006)  26,500 market transactions per day  25,627 circuit-miles of transmission lines  30 million people served  309 million megawatt-hours of electricity delivered annually Page 5

Reliability Markets Day Ahead – opens 7 days prior to the operating day –closes at 10 a.m. the day before electricity flows. Real Time –Hour Ahead Scheduling Process (HASP) Prior to real-time (RT) market, schedule energy and ancillary services for static interchange for 24 individual hours –Real-time market (RTM) runs every five minutes Page 6

High-tech control centers The ISO operates two control centers, main headquarters in Folsom and a second control room in Alhambra Operators staff the control center 24/7 six rotating shifts (12 hours). (6 to 6) Page 7

Historical ISO Peak Demand Slide 8

2013 ISO 1-in 2 Peak Load Forecast The ISO peak demand is projected to reach 47,413 MW 738 MW more than the actual peak 46,675 MW recorded in 2012 (2.3 percent higher) 3,393 MW of new generation since last year’s report 2013 Summer Loads Resources Assessment Slide 9

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Slide 12 The ISO system and the NP26 and SP26 zonal results are fairly similar to results in last year’s report The areas facing reliability risks during heat waves and other adverse conditions continue to be southern Orange County and San Diego. SUMMARY OF KEY FINDINGS

Overview of the area and summer reliability challenges without the San Onofre nuclear power plant Slide 13

Key actions to mitigate local reliability concerns in southern Orange County and San Diego: Conversion of Huntington Beach Units 3 & 4 to Synchronous Condensers Installation of additional reactive support near SONGS – installation of 80 MVAR capacitors at each of the Santiago and Johanna substations and a 160 MVAR capacitor at the Viejo substation. Barre-Ellis reconfiguration –reconfiguring the Barre-Ellis 220 kilovolt (kV) lines from the existing two circuits to four. Slide 14

Operational Challenges Page 15

System Emergency (Procedure 4420) Restricted Maintenance Operations –cancel or postpone any or all or work to preserve overall System Reliability Transmission Emergency –any event that threatens, harms, or limits the capabilities of any element of the transmission grid and overall grid reliability OP 4420 Page 16

System Emergency (Procedure 4420) Alert Notice –issued by 1500 hrs the day before anticipated operating reserve deficiencies Warning Notice –issued when the Real-time Market run results indicate that Operating Reserves are anticipated to be less required Page 17

System Emergency (Procedure 4420) Emergency Stage 1 –Operating Reserve shortfalls exist or are forecast to occur, and available market and non-market resources are insufficient to maintain Operating Reserve requirements Emergency Stage 2 –cannot maintain its Non-Spinning Reserve requirement Emergency Stage 3 –Spinning Reserve portion depletes, or is anticipated to depleted Page 18

Questions? Jeffrey S McDonald Interregional Coordination Team Facilitators