1. ISO New England’s Winter 2005/2006 Assessment & Action Plan “Preparing for Cold Weather Reliability”
December 9, 2005
Allison DiGrande, External Affairs Department, ISO/NE
Stephen J. Rourke, Director, Reliability and Operations Services

2. New England Faces a Potential Shortfall in Electricity Supply this Winter
Significant risk of unavailability of gas-fired generating units to meet peak electrical demands this winter
Shortfall in gas-only generating unit availability would be a system-wide resource issue
Not a specific load pocket issue
Relative economics of oil vs. natural gas should result in significantly more use of oil than in recent winter periods
ISO-NE and regional stakeholders have developed remedial actions to reduce this risk
2005/06 Winter © 2005 ISO New England Inc.

3. New England Generating Capacity by Fuel Type (Winter 2005/06)
Total Capacity: 33,387 MW
(Winter 2005/06)
Power plants using natural gas as primary fuel
2005: 40% (shown at right)
Up from 17% in 1999
Includes gas-only and dual-fuel power plants
Dual fuel units subject to permit limits on burning oil
Approximately two-thirds of our power plants use natural gas or oil as primary fuel
2005/06 Winter © 2005 ISO New England Inc.

4. January 2004 Cold Snap Experience
During the January 2004 Cold Snap, all of the natural gas pipelines’ firm customers were served in accordance with their tariffs
~ 9,000 MW of generation was out-of-service in New England
~ 7,200 MW of this capacity consisted of gas-only units that were unavailable due to fuel and weather related outages/reductions
The damage to the gas and oil production infrastructure inflicted by the recent Gulf hurricanes poses an increased risk to the availability of gas-fired generation this winter
25% of New England’s peak-day natural gas comes from Gulf sources
2005/06 Winter © 2005 ISO New England Inc.

5. Cold Snap Process Improvements
Since 2004, ISO New England has implemented a number of process improvements that should improve the availability of New England generation
Increased Coordination
Gas/Electric Operations Committee
Day Ahead Market timing
Improved Availability
Timely switching to alternate fuels
Improved winterization of generating units
Additional dual fuel units
2005/06 Winter © 2005 ISO New England Inc.

6. 2005/06 Winter © 2005 ISO New England Inc.

7. Summary of Problem Issues
New England is subject to great uncertainty/risk in the price, availability and deliverability of natural gas in the winter
Majority of the New England generators do not have firm gas supply and transportation
Damage by Gulf hurricanes increases uncertainty and risk this winter
Gas pipelines have indicated they are well prepared to serve firm customers
Natural Gas LDC storage is on track
2005/06 Winter © 2005 ISO New England Inc.

8. What are the Concerns for Winter 05/06?
Increased quantities of gas-only generation are likely to be out of service during a Cold Snap period
Expected Winter 2005/06 Peak Load is equal to the extreme winter peak load experienced in January 2004 (22,800 MW)
Forecasted Extreme Peak Load is about 1,000 MW greater than January 2004 actual Cold Snap peak (23,800 MW)
Concern for additional demand from increased strip heating use is possible if extreme cold and very high gas and oil prices occur
Multiple Cold Snap events would exacerbate supply and price issues for New England generators
Ability to withstand the loss of a major generating unit during a Cold Snap event without invoking advanced emergency actions may be at risk
2005/06 Winter © 2005 ISO New England Inc.

9. Impacts to Winter Analysis from Katrina (all
Winter 2005/06 Operable Capacity Analysis 90/10 Forecast reflecting the impact of Katrina and Rita
Winter Analysis 05/06
Pre-Katrina
Impacts to Winter analysis from Katrina (Gas unit outages with a 10% reduction in supply)
Impacts to Winter Analysis from Katrina (all
Gas-only units
Out of service)
Total Resources
32,940*
Gas Unit Outages
5,700**
7,800
8,700
Other Unit Outages
1,700
Net Available Resources
25,540
23,440
22,540
Peak Load
23,740
24,140***
Reserve Requirement
Operable Capacity Margin
100
-2,400
-3,300
* Includes 900 MW of ICAP Sales to NY (currently 640 MW scheduled)
** Assumes only 3,000 MW of the 8,700 MW of gas-only generation has firm pipeline transportation contracts
*** Includes increase in 90/10 peak load due to increase in electric heating load (400 MW)
2005/06 Winter © 2005 ISO New England Inc.

10. Contingency Plans

11. ISO-NE Contingency Plan: Winter 2005/2006
Summary Actions
MWs Added
Costs (Million $)
Operating/Market Procedures
N/A
Communications/Conservation
DSM/Load Management
7 – 43
Incremental Dual Fuel Generation
400 – 1000
Participant Funded
Emergency Actions
Emergency Imports
Market
Voltage Reduction
2005/06 Winter © 2005 ISO New England Inc.

12. ISO Winter Action Plan Communications and Conservation
New Emergency Assistance Operating Procedure
Market Rule Changes
Improve availability of existing resources and imports:
Start-up and No-load Flexibility
Emergency Energy Transactions
Posturing of units for multi-day periods
Demand Response Winter Supplement Program
Market Participant Response
MW of incremental dual fuel capability
2005/06 Winter © 2005 ISO New England Inc.

13. Pre-Winter Actions Protect Reliability
Review/Adjust Transmission & Generation Maintenance Schedules
Voltage Reduction Test (Tuesday, November 22)
Gas-Electric Coordination “Tabletop” Drill
Rehearse Winter Load Shedding (ISO/Transmission Owners)
Evaluate Lessons Learned:
Florida gas supply shortage due to hurricanes
California feeder rotation
Coordinate with Neighboring Control Areas:
Maximize Transmission Transfer Capability
Fuel Diversity
Minimize/Eliminate Impact of New England Source Contingency
Weekly Fuel Surveys
Evaluate availability versus expected need
Allow Time to React to Mitigate Expected Fuel Shortage/Implementation of OP21 Actions
2005/06 Winter © 2005 ISO New England Inc.

14. BACKGROUND SLIDES ON CONTINGENCY PLANS

15. Communications/Conservation
State Partnerships
Establishment of “winter communications team” to share information throughout the winter season
State agencies, gas association and others
Collaboration with air regulators on actions to recognize winter emergency conditions in permit constraints on dual fuel units
Proactive and ongoing outreach to top policymakers throughout the region on reliability, price, and conservation
Gas – Electric Operational Coordination Exercise held in Springfield, MA on November 29
2005/06 Winter © 2005 ISO New England Inc.

16. New Operating Procedure
New Operating Procedure: Action During and Energy Emergency (OP21)
Intended to address sustained, wide-scale shortages of fuel for generators in New England and mitigate loss of operating capacity
ISO to conduct weekly survey of generators’ fuel availability, current inventory and expected deliveries for the winter peak load season
More frequently under severe energy emergency conditions
ISO to posture units to improve energy availability and request fuel switching by dual-fuel units
ISO to implement OP4 actions as needed; and OP7 under extreme conditions
2005/06 Winter © 2005 ISO New England Inc.

17. Operating Procedure No. 4
Note: "Public Appeal" does not include posting of Special Notices, or communication with state regulators and other OP4 Contacts
2005/06 Winter © 2005 ISO New England Inc.

18. Appendix H to Market Rule 1
*ISO may declare OP4 at any time during Appendix H if needed
2005/06 Winter © 2005 ISO New England Inc.

19. Operating Procedure 21 (Proposed)
** ISO may declare OP4 at any time during OP21 if needed
2005/06 Winter © 2005 ISO New England Inc.

20. Demand Response Actions
ISO Proposes Demand Response Winter Supplement Program
450 MW of incremental capacity
Could provide up to 600 MW if resources provide 130% of capacity
Resources must enroll in existing 30-min DR program
Utilized at Actions 9 & 12 of Operating Procedure No. 4 – Actions During a Capacity Deficiency
Eligibility period: December 1 through March 31
2005/06 Winter © 2005 ISO New England Inc.