# 2008 Long-Term Reliability Assessment

2008-2017

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# October 2008This page left intentionally blankTable of Contents

i 2008 Long-Term Reliability Assessment 

# Table of Contents

NERC’S MI SSION........................................................................................................... 1

INTRODUC TION............................................................................................................. 2

PROGRESS SINCE 2007............................................................................................... 5

KEY FINDINGS FOR 2008- 2017 .................................................................................... 7

KEY FINDINGS FOR 2008- 2017 .................................................................................... 8 1. Capacity Margins Improved, though Resources still Re quired .................................................................. ...........8 2. Wind Capacity Projected to Significan tly Increase........................................................................... ..................12 3. More Transmission Needed to Maintain Bulk System Reliability and Inte grate New Generation .....................15 4. Demand Response Increasingly Used to Meet Resource Adequ acy Requirements ............................................18 5. Bulk Power System Adequ acy Trends Emphasize Maintena nce, Tools and Training........................................22

EMERGING ISSUE ASSESSMENT & SCENARIO AN ALYSIS................................... 25

Emerging Issue Ri sk Assessment ................................................................................................. ............................25

Potential Environmental Regulation could Impact Re source Adequacy.............................................................. 28 Greenhouse Ga s Reduc tions...................................................................................................... ..............................28 U.S. Clean Water Act: Coolin g-Water Intake Structures.......................................................................... ..............29 U.S. Clean Air Interstate Rule (CAIR) and Clean Air Merc ury Rule (CAMR)......................................................31

Fuel Transportation & Storage .................................................................................................. ..............................33

Rising Global Demand Impacts for Electric Pow er Equip ment...................................................................... ......39

Increased Adoption of Distributed Gene ration and Demand-Side Resources .....................................................41

Transmission of the 21st Century............................................................................................... ..............................44

Water Availability and Use.......................................................................................................................................46

2009 Scenario Analysis Summary ................................................................................................. ...........................48

RELIABILITY HISTOR ICAL TR ENDS.......................................................................... 50

REGIONAL RELIABILITY ASSESSMENTS ................................................................ 62

Background

............................................................................................................................... ...............................62

Regional Demand & Resource Projections 2008-2017 .................................................................................63

Table 13a: Estimated 2008 Summer Margins (%), Resources and Demands (MW) .............................68Table of Contents

ii 2008 Long-Term Reliability Assessment Table 13b: Estimated 2008/09 Winter Margins (%), Resources and Demands (MW) ...........................69

Table 13c: Estimated 2012 Summer Margins (%), Resources and Demands (MW) .............................70

Table 13d: Estimated 2012/13 Winter Margins (%), Resources and Demands (MW) ...........................71

Table 13e: Estimated 2017 Summer Margins (%), Resources and Demands (MW) .............................72

Table 13f: Estimated 2017/18 Winter Margins (%), Resources and Demands (MW) ............................73

ERCOT Highlights

............................................................................................................................... ....................75

ERCOT Self-Assessment

............................................................................................................................... .......77

FRCC Highlights

............................................................................................................................... ......................83

FRCC Self-Assessment

............................................................................................................................... ..........86

MRO Highlights

............................................................................................................................... ........................93

MRO Self-Assessment

............................................................................................................................... ............97

NPCC Highlights

............................................................................................................................... ....................111

NPCC Self-Assessment

............................................................................................................................... ........118 Maritimes Area................................................................................................................. .....................................123 New England.................................................................................................................... .....................................128 New York....................................................................................................................... .......................................139 Ontario ..................................................................................................................................................................148 Québec ......................................................................................................................... .........................................157

RFC Highlights

............................................................................................................................... .......................162

RFC Self-Assessment

............................................................................................................................... ...........165

SERC Highlights

............................................................................................................................... ....................177

SERC Self-Assessment

............................................................................................................................... ........182 Central...................................................................................................................................................................193 Delta......................................................................................................................................................................197 Gateway ................................................................................................................................................................201 Southeastern ..........................................................................................................................................................206 VACAR.......................................................................................................................... .......................................209

SPP Highlights

............................................................................................................................... ........................215

SPP Self Assessment

............................................................................................................................... ...........218

WECC Highlights

............................................................................................................................... ...................225

WECC Self-Assessment

............................................................................................................................... .......233 Northwest Powe r Pool Area...................................................................................................... ............................250 Rocky Mountain Power Area...................................................................................................... ..........................256 Arizona-New Mexico-South ern Nevada Power Area .................................................................................. .........258 California-Mexico Power Area ................................................................................................... ..........................261Table of Contents

iii 2008 Long-Term Reliability Assessment ABBREVIATIONS USED IN THIS REPORT .............................................................. 265

CAPACITY, DEMAND & EVEN T DEFINIT IONS ........................................................ 267 a) Demand Definitions .......................................................................................................... ................................267 b) Demand Forecas t Bandwidths .................................................................................................. ........................267 c) Demand Response Categorization .............................................................................................. ......................270 d) Capacity, Transaction and Margin Categor ies ..................................................................................................272 e) How NERC Defines Bulk Power System Relia bility........................................................................................273 f) Event Cla ssifica tions ....................................................................................................... ..................................274

MAJOR TRANSMISSION PR OJECTS > 200 KV ....................................................... 276

REPORT CONTENT RE SPONSIBILI TY .................................................................... 294

RELIABILITY ASSESSME NT SUBCOMMI TTEE ...................................................... 295NERC’s Mission

1 2008 Long-Term Reliability Assessment 

# NERC’s Mission

The North American Electric Reliability Corpor ation’s (NERC) mission is to ensure the reliability of the bulk power system in North America. To achieve this objective, NERC develops and enforces reliability standards; m onitors the bulk power system; assesses and reports on future transmission and generation adequacy; and offers education and certification programs to industry personnel. NERC is a non-profit, self-regulatory organization that relies on the diverse and collective expertise of industry partic ipants that comprise its various committees and sub-groups. It is subject to oversight by govern mental authorities in Canada and the United States (U.S.). 1

NERC assesses and reports on the reliability and adequacy of the North American bulk power system according to eight regional areas as shown on the map below 2 . The users, owners, and operators of the bulk power system within these areas account for virtua lly all the electricity supplied in the U.S., Canada, and a porti on of Baja California Norte, Mexico.

Note: The highlighted area between SPP and SERC denotes overlapping regional boundaries

1 As of June 18, 2007, the U.S. Federal Energy Regulatory Commission (FERC) gran ted NERC the legal authority to enforce

reliability standards with all U.S. users, owners, and operato rs of the bulk power system, and made compliance with those standards mandatory and enforceable. Reliability standards are also mandatory and enforceable in Ontario and New Brunswick, and NERC is seeking to achieve comparable results in the other Canadian provinces. NERC will seek recognition in Mexico once the necessa ry legislation is adopted. 2 Note ERCOT and SPP are tasked with performing reliability se lf-assessments as they are regional planning and operating

organizations. SPP-RE (SPP – Regional En tity) and TRE (Texas Regional Entity) are functional entities to whom NERC delegates certain compliance monitoring and enforcement authorities. ERCOT Electric Reliability Council of Texas RFC Reliability First Corporation

FRCC Florida Reliability Coordinating Council SERC SERC Reliability Corporation

MRO Midwest Reliability Organization SPP Southwest Power Pool, Incorporated

NPCC Northeast Power Coordinating Council, Inc. WECC Western Electricity Coordinating CouncilIntroduction

2 2008 Long-Term Reliability Assessment 

# Introduction

The 2008 Long-Term Reliability Assessment represents NERC’s independent judgment of the reliability and adequacy of the bulk power system in North America for the coming ten years. NERC’s primary purpose in preparing this assessmen t is to identify areas of concern regarding the reliability of the North American bulk power system and to make recommendations for their remedy. The annual schedule for NERC’s reliabi lity assessments is found in Table 1.

This assessment is prepared by NERC in its capacity as the Electric Reliability Organization in the U.S. and parts of Canada. 3 NERC cannot order construction of generation or transmission or adopt enforceable standards that require expansion of these facilities, as that authority is explicitly withheld in the U.S. by Section 215 of the U.S. Federal Power Act 4 and in Canada by various provisions. In addition, NERC does not make any projections or draw any conclusions regarding expected electricity prices or the efficiency of electricity markets.

The potential long-term impacts of the recent unprecedented events in global financial markets could have a significant effect on future electricity supply and demand projec tions that are not reflected in this special report. NERC will monitor these impacts and reflect them in its future

assessments.

Assessment Preparation

NERC prepared the 2008 Long-Term Reliability Assessment with support from the Reliability Assessment Subcommittee (RAS) under the direc tion of NERC’s Planning Committee (PC) with additional review from the Operating Committee (OC). 5 The report is based on data and information submitted by each of the eight Regi onal Entities in March 2008 and periodically updated throughout the re port drafting process. 6 This data and information is carefully vetted to ensure accuracy and consistency by NERC staff and RAS. Other data sources consulted by NERC staff are identified in this report.

3 Section 39.11(b) of the U.S. FERC’s re gulations provide that: “The Electric Reliability Organization shall conduct assessment s

of the adequacy of the Bulk-Power System in North Ameri ca and report its findings to the Commission, the Secretary of Energy, each Regional Entity, and each Regional Advisory Body annually or more frequently if so ordered by the Commission.”
4 http://frwebgate.access.gpo.gov/cgi-bin/getdoc .cgi?dbname=109_cong_bills&docid=f:h6enr.txt.pdf
5 Unlike the Energy Information Administration’s (EIA) A nnual Energy Outlook (for example the 2008 report can be found at

http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2008).pdf ), NERC’s report focuses exclusively on bulk power system reliability with data and information provided by industry e xperts, representing a variety NERC stakeholders.
6 See http://www.nerc.com/files /Adequate_Level_of_Reliability_Defintion_05052008.pdf for more background on reliability concepts used in this report. Table 1: NERC’s Annual Reliability Assessments
Assessment Outlook Published
Summer Assessment Upcoming season May

Long-Term Assessment 10 years October

Winter Assessment Upcoming season NovemberIntroduction

3 2008 Long-Term Reliability Assessment NERC uses an active peer review process in deve loping reliability assessments. The peer review process takes full advantage of industry subjec t matter expertise from many sectors of the industry. This process also pr ovides an essential check and bala nce for ensuring the validity of the information provided by the Regional Entities.

Each region prepares its data and a self assess ment. Each of the regiona l self-assessments is assigned to two to four RAS me mbers from other regions for an in-depth and comprehensive review of the data and information. Reviewer co mments are discussed with the regional entity’s representative and refinements and adjustment s are made as necessary. The regional selfassessments and data are then subjected to scruti ny and review by the entire subcommittee. This review ensures members of th e subcommittee are fully convin ced that each regional selfassessment and data is accurate, thorough, and complete. The Reliability Trends section is reviewed by the OC, while the entire document, including the regional se lf-assessments, is then reviewed in detail by the Member Representatives Committee (MRC) and NERC management. The report is endorsed by the PC before being submitted to NERC’s Board of Trustees for final approval.

To further increase the transpar ency of the process and conclusions, NERC sponsored a public workshop designed to discuss preliminary findi ngs with industry expe rts and participants, identify industry concerns, and solicit improveme nts. Key suggestions from this workshop are reflected in this final report. The presentations and notes from the workshop are posted on the NERC Web site. 7

In the 2008 Long-Term Relia bility Assessment , the baseline information on future electricity supply and demand is based on several assumptions: 8

• Supply and demand projections are based on industry forecasts submitted in March 2008. Regions were given an opportuni ty to reflect significant ch anges through the summer, but any subsequent demand forecast or resource plan changes may not be fully represented.

• Peak demand and capacity margins are based on average weather conditions and assumed forecast economic activity at the time of subm ittal. Weather variability is discussed in each regional self-assessment.

• Generating and transmission equipment will pe rform at historical availability levels.

7 http://www.nerc.com/fil ez/ltra_workshop.html 8 Forecasts cannot precisely predict the future. Instead, many fo recasts report probabilities with a range of possible outcomes.

For example, each regional dema nd projection is assumed to represent the expected midpoint of possible future outcomes. This means that a future year’s actual demand may deviate from the projection due to the inherent variability of the key factors tha t drive electrical use, such as weather. In the case of the NE RC regional projections, there is a 50 percent probability that act ual demand will be higher than the forecast midpoint and a 50 percent probability that it will be lower.

For planning and analytical purposes, it is useful to have an estimate not only of th e expected of possible future outcomes, bu t also of the distribution of probabilities around the projection. Accordingly, the Load Forecasting Working Group (LFWG) develops for each an upper and lower te n percent confidence band around the NERC regional demand and energy projections. This means there is an 80 percent probability that future dema nd and energy will occur within these bands. Concurrently, there is a ten percent chance future outcomes could be less than the lower band and a ten percent chance future outcomes could be higher than the upper band. The high and low bands around the demand forecasts are depicted in the charts with each region's self assessmentIntroduction

4 2008 Long-Term Reliability Assessment • Planned outages and future generation and transmission facilities are commissioned and in-service as sche duled and planned.

• Demand reductions expected from demand response programs will yield the forecast results, if and when they are called on.

• Other peak demand-side management program s are reflected in the forecasts of net internal demand.

• Firm electricity transfers between regions are contractually arranged and occur as projected.

Enhancements to the 2008 Reliability Assessment

In light of the guidance in FERC’s Order 672 and comments received from other authorities and industry representatives, NERC’s Planning Co mmittee (PC) concluded the Seasonal and LongTerm Reliability Assessment processes required improvement. To achieve this goal, the PC formed a task force and directed it to develop recommendations and a plan for improvement. A number of the task force’s recommendations 9 were incorporated into the 2008 Long-Term Reliability Assessment , including:

1. Supply-side resource categories were enha nced to better assess and measure the certainty and risk of resource acquisition strategies and adequacy. 2. Collection of Demand-side Management data was expanded to in clude both projected Energy Efficiency and Dispatchable Demand Response. 10
3. Both wind nameplate and on-peak cap acity projections were collected. 4. Emerging issues and scenario analysis se ctions were added to identify risks and document risk assessment results. The scen arios for the 2009 LTRA are currently under development. 5. Reliability trends were compiled to provide indications of system use and the need for further investigations in future reliability assessments.

9 For the full report, see http://www.nerc.com/files /Reliability%20Improveme nt%20Report%20RAITF%20100208.pdf , entitled,

“ Data Collection for Demand-Side Management for Quantifying its Influence on Reliability: Results and Recommendations. ”
10 ftp://ftp.nerc.com/pub/sys/all_upd l/docs/pubs/NERC_DSMTF_Report_040308.pdfKey Findings 2008-2017

5 2008 Long-Term Reliability Assessment 

# Progress Since 2007

In its 2007 Long-Term Reliability Assessment

, 11 NERC identified five “Key Findings” that could critically impact long-te rm reliability unless prompt actions were taken. NERC’s key findings are based on observations and analyses of supply and demand projections submitted by the regions as part of the Long-Term Reliability Assessment, NERC staff independent assessment of the results as well as industry trends, and other stakeholder input and comments. 12

The magnitude of these issues necessitates co mplex planning and execution strategies whose impacts may not be realized for several years. As shown in Table 2, while some progress has been made, action is still needed on all of the issu es identified in last year’s report to ensure a reliable bulk electric system for the future. Based on industry progress made on 2007 Key Findings , NERC will either continue to highlight them through the Key Findings or Emerging Issues sections of this repor t, or will continue to monitor advancement.

Table 2: Progress on 2007 Key Findings


### 2007 Key Finding Progress in 2008 2008 Status

1. Long-Term Capacity Margins are still Inadequate  4.2% improvement over 2007

 Demand response decreases peak 1% by 2016

 More resources required in some areas  Key Finding

2. Integration of Wind, Solar and Nuclear Resource Require Special Consideration in Planning, Design and Operation  Wind plant nameplate increased (145,000 MW of Proposed installed nameplate capacity)

 Nuclear plant projections increase 9,000 MW

by 2017

 Transmission vital for integration of resources

in various planning stages across NERC.  Key Finding

3. High Reliance on Natural Gas in Some Areas of the U.S. Must Be Properly Managed to Reduce the Risk of Supply & Delivery Interruptions  Natural gas delivery remains a concern

 Regional measures taken  Emerging Issue

4. Transmission Situation Improves, But More Still Required  Projected mileage increase of 14% from last
year

 More transmission needed to maintain bulk

power system reliability and integrate new generation  Key Finding

5. Aging Workforce Still a Growing Challenge  Increased industry recognition and response

 NERC continues to support action and monitor

industry progress  Monitoring

11 http://www.nerc.com/files/LTRA2007.pdf
12 Additional significant find ings also appear in the Regional Reliability Assessments

, Operational Reliability and Emerging

Issues Assessment and Scenario Analysis sections of the report.Key Findings 2008-2017

6 2008 Long-Term Reliability Assessment This page left intentionally blankKey Findings 2008-2017

7 2008 Long-Term Reliability Assessment Total Internal Demand (MW) — Total amount of electricity projected to be used at time of peak within a given system area

Net Internal Demand (MW) —Total Internal Demand reduced by disp atchable controllable (capacity) demand response.

Existing-Certain Capacity — Existing generation resources anticipated to be available, operable and deliverable to or into the region at the time of peak demand.

Existing-Uncertain Capacity — Existing generation resources whic h may be available, operable, and deliverable to or into the region at the time of peak demand. This category includes “mothballed” units and the “de-rated” portion of intermittent resour ces not included in Existing Certain.

Planned Capacity — Generation that has achieved certain regu latory and approval milestones (see pg. 273).

Proposed Capacity — Generation that is not in any of the above categories, but has passed certain planning milestones (see pg. 273).

Net Firm Transactions (MW) — Net of contracted firm interregional purchases (positive value) and sales (negative value).

Total Internal Capacity

— Sum of Existing (both Certain and Uncertain) and Planned Capacity.

Net Capacity Resources (MW) — Total Internal Capacity, less Transmission-Limited Resources, all Derates, Energy Only, and Inoperable resources; including Net Firm, Expected and Provisional Purchases/Sales (does not include Non-Firm Purchases/Sales).

Total Potential Resources (MW) — Total Internal Capacity, less Transmission-Limited Resources, plus all Purchases/Sales.

Adjusted Potential Resources (MW) —Total Proposed Resources reduced (multiplied) by a confidence factor; plus Net Non-Firm Transactions.

Existing-Certain Capacity and Net Firm Transactions Margin (%)

— Existing-Certain Capacity and Net Firm Transactions less Net Internal Demand; as a percent of Existing-Certain Capacity and Net Firm Transactions.

Net Capacity Resource Margin (%) — Net Capacity Resources reduced by the Net Internal Demand; as a percent of Net Capacity Resources.

Total Potential Resources Margin (%) — Total Potential Resources reduced by the Net Internal Demand; as a percent of Total Potential Resources

. Adjusted Potential Resources Margin (%) — Capacity margin using the Total Potential Resources reduced (multiplied) by the confidence factor (percentage).

Target Capacity Margin (%) — Established target for capacity margin by the region or sub-region.

NERC Reference Margin Level (%) — Either the Target Capacity Margin provided by the region/sub-region or NERC assigned based on capacity mix (i.e. thermal/hydro). 

### Capacity Resources & Mar g ins Quick Reference GuideKey Findings 2008-2017

8 2008 Long-Term Reliability Assessment 

# Key Findings for 2008-2017

1. Capacity Margins Improved , though Resources still Required
Capacity margins in many regions are improved co mpared to 2007 figures, due in part to significant increases in demand response and supply-side resources. Nevertheless more resources will be required to maintain reliability in Western Canada and the Desert Southwest areas in the coming years.

Many areas have shown improvement in projected capacity margins, due to changes in resource categorization, the establishment of forward capacity markets, or the addition of new resources. These areas include New England, California, the Rocky Mountain sub-region, Texas, and the Midwest. Figure 1 provides the 2008-2017 summer capacity margins in No rth America (unless noted as winter) to NERC’s Reference Margin Level. 13

Figure 1: Net Capacity and Adjusted Potentia l Resources compared to NERC’s Reference Margin Level 14

* S ubstantial amounts of existing capacity in SERC-Delta subregion are categorized as “uncertain” under NERC’s 2008 capacity categories. Under this year’s method, existing-uncertain generation is not counted towards Net Capacity Margin. Rather, it is included in the Adjusted Potential Capacity Margin. This generation is expected to be available to meet peak demand in the region desp ite its classification as “uncertain”. We expect that clarification of definitions for 2009 will correct this issue ** Areas that may need more resources to meet their Target Margin Le vel or NERC Reference Margin Level.

13 The colors shown in this map serve to s how the regional boundaries of reporting entities. 14 Each region/subregion may have their own specific margin leve l based on load, generation, and transmission characteristics as

well as regulatory requirements. If provided in the data submittals, the regional/subregional Target Capacity Margin level is adopted as the NERC Reference Margin Level. If not, NERC assigned 13 percent capacity marg in for predominately thermal systems and for predominately hydro systems, 9 percent. ERCOT 2013/>2017 New England 2013/2013

AZ/NM/SNV**

2010/2010 California 2014/2014 Rocky Mtn 2015/2015 SPP 2013 / >2017 MRO-US 2010/>2017

RFC 2013/2017 WECC-CAN**

2009/2009

(Winter) Ontario 2015/>2017

Central 2011/2015

V ACAR 2013/2014

Southeastern

2010/>2017

Delta* 2008/>2017 When Net Capacity Resources drop below the NERC Reference Margin Level ...including Adjusted Potential ResourcesKey Findings 2008-2017

9 2008 Long-Term Reliability Assessment Certain areas (See Figure 1), however, may still need additional resource s in the near-term to ensure adequate capacity margins when compar ing Net Capacity Resources margins to the NERC Reference Margin Level. Areas of most concern include: Western Canada (in winter) and the Desert Southwest. The outlook improves so mewhat when including Adjusted Potential Resources, but Western Canada and the Desert S outhwest margins are still a cause for concern.

Winter Net Capacity Resource Margins in Ca nada are projected to decrease. Offsetting additional supplies throughout the rest of Canada, Ontario’s Ne t Capacity Resources for the 2017/18 Winter peak are 4,800 MW lower than 2008/2009 Winter, refl ecting the planned retirements of 6,400 MW of coal-f ired generation by the end of 2014. Much of this reduction is balanced with demand response and energy efficien cy coupled with new re newable, gas-fired, refurbished and new-build nuclear resources.

Drivers A number of factors have combined to affect resource adequacy for 2008. Marked improvement from 2007 in New England, for example, is di rectly due to newly operational mechanisms designed to add greater long-term planning visibility. Dubbed “for ward capacity markets,” these and similar mechanisms are being implemented in some parts of North America.

Supply-side additions have also contributed to improved margins, though substantial uncertainty exists for new resource construction. These ad ditions are predominatel y gas-fired generating units (50%), but also include nearly 25,000 MW of coal plants still sl ated for construction despite recent trends in coal plant deferrals and cancellations, 15 145,000 MW of nameplate wind, and 9,000 MW of new nuclear generation beginn ing to appear in the outer years.

Recent rulemaking activities of the U.S. Enviro nmental Protection Agen cy (EPA) on the Clean Air and Water Acts and federal climate change legislative deliberations in the U.S., each discussed in the Emerging Issues section of this report, 16 could adversely affect both existing capacity (earlier retirements) and these planned capacity additions (deferrals and cancellations), which will, in turn, result in lower future capacity margins.

A significant decrease in projected demand growth in the U.S. also contributes to higher capacity margins over the ten year period. This is primarily due to an increase in projected demand-side management (DSM) which plays a key role in improving capacity margins over the ten years. Summer peak demand growth is projected to increase 16.6 percent for 2008-2017, compared to 17.7 percent forecast last year through the 2007-2016 period. This represents a reduction of 1.1 percent or almost one full year of growth (see Fi gure 2). An increase in projected dispatchable demand response is responsible for most of this reduction. Comparing last year’s projections to this year for the summer of 2016, demand response accounts for 3.4 percent of Total Internal Demand in this year’s report compared with 2.5 percent for last year (See Figure 2 below).

15 OE NETL: http://www.netl.doe.gov/ coal/refshelf/ncp.pdf
16 See www.nerc.com for more information on the potential impacts on reliability of Climate Change InitiativesKey Findings 2008-2017

10 2008 Long-Term Reliability Assessment In Canada, winter peak demand is forecast to increase by over 6,500 MW or 7.2 percent during the next ten years, which is higher than the 6.5 pe rcent growth forecast in last year’s assessment. However, the total winter peak demand for both 2008/2009 and 2017/2018 are lower than last year’s projections, due to lowered demand for ecasts in Ontario and The Maritimes. Ontario 17
forecasts a 2008/09 winter demand decrease of 1,200 MW compared to the 2007/2008 winter peak demand and a decrease of 2,326 MW when comparing this year’s ten-year forecast (2017/2018 winter) with last year’s (2016/ 2017 winter). These reductions result from conservation and energy efficiency 18 programs, countering the e xpected 0.7 percent average annual growth.

Figure 2: Dispatchable Capacity Dema nd Response Resources for the U.S. (2016 Summer peak) and Cana da (2016/17 Winter peak)

NERC US - 2016 Summer On-Peak Total Internal Demand

3.4%

2.5%

860,000 870,000 880,000 890,000 900,000 910,000 920,000 930,000

2007 LTRA 2008 LTRAMW

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Demand Response Net Internal Demand % of Demand Response to Internal Demand 11,468 MW NERC CAN - 2016/17 Winter On-Peak Total Internal Demand

2.8% 2.7%

95,000 96,000 97,000 98,000 99,000 100,000 101,000 102,000 103,000

2007 LTRA 2008 LTRAMW

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

Demand Response Net Internal Demand % of Demand Response to Internal Demand

New energy efficiency is also projected to increa se in both the U.S. and Canada. For example, for the summer peak, NERC-US grows ove r 6,000 MW during 2008-2017. During this same period, in Canada, Energy Efficiency is projected to grow by 3,000 MW for the winter peak (See Figure 3).

17 Ontario is summer peaking. The 2017 Peak Summer forecast is 1,226 MW less than 2008 Summer peak.
18 http://www.powerauthority.on.ca/Pa ge.asp?PageID=924&SiteNodeID=320Key Findings 2008-2017

11 2008 Long-Term Reliability Assessment Fi g ure 3: 2008-2017 Pro j ect New Ener gy Efficienc y in the U.S. and Canada

0 2,000 4,000 6,000 8,000

2008 2017MW

NERC-US (Summer Peak) NERC-CAN (Winter Peak)

Reliability Impacts Capacity margins are measurements of the bulk power system’s ability to supply the aggregate electric power and energy requi rements of electricity consum ers. Higher capacity margins indicate that the system is mo re capable of withstanding extr eme weather, forecasting errors, system events, and unscheduled resource outages. Lower capacity margins can lead to reduced reliability. Those regions and sub-regions whos e capacity margins are projected to fall below NERC’s Reference Margin Levels in the next few years need to a dd resources quickly in order to maintain bulk power system reliability.

The electric industry is projecte d to increase its reliance on Ener gy Efficiency and Dispatchable Capacity Demand Response programs. To consiste ntly validate and measure the results of the demand response programs, NERC is inaugura ting a demand response event analysis system (Demand Response Data Task Force) , expected to be launched in 2010. 19

Conclusions and Recommendations 20

• Regulators need to continue th eir support for the development of additional cost effective transmission resources, including equitable cost allocation guidelines for such resources. Further, they should revise their existing pr ocesses to expedite the licensing of cost effective transmission resources needed to maintain reliability



### .

• Formal markets should continue to pursue mechan isms to establish longer-range visibility of their resource needs.

NERC Actions

• Monitor the conditions in Western Canada a nd the Desert Southwest which may require additional resources in the near future.

• Improve categorization of proj ected supply-side and demand- side resources to enhance the analysis of capacity margin certainty and risk.

19 See http://www.nerc.com /filez/drdtf.html for ongoing progress.
20 The “Recommendations” for each of the Key Findings do not represent mandatory requirements, but rather NERC’s

independent judgment of those steps that will help improve reliability of the bulk power system of North AmericaKey Findings 2008-2017

12 2008 Long-Term Reliability Assessment 2. Wind Capacity Projected to Significantly Increase

Wind resources are growing in importance in many areas of North America as new facilities come online. With growing dependence on wind ge neration, it is vital to ensure that these variable resources are reliably integr ated into the bulk power system.

As shown in Figure 4, 145,000 MW of nameplate new wind resources are Planned or Proposed over the next ten years. Though the bulk of these additions are ca tegorized as Proposed resources raising the possibility that a number of these pr ojects may be cancelled or reduced as developers make their final decisions, this projection stil l represents a dramatic increase in wind energy resources when compared to data received last year.

While other renewable resources are beginning to appear in forecasts (800 MW of ExistingCertain and 280 MW of Planned solar capacity resources were reported in WECC), wind generation has become the primary reported focus of renewable resource development in North America.

Fi g ure 4: Pro j ected Increase in Summer Wind Nameplate/Installed Capacity

0 10,000 20,000 30,000 40,000 50,000 60,0002008201720082017200820172008201720082017200820172008201720082017

ERCOT FRCC MRO NPCC RFC SERC SPP WECCMW

Existing Planned Proposed

Availability of capacity during times of peak demand (capacity on peak) is an important issue facing wind power when discussing reliability . Figure 5 shows the projected wind capacity during summer peak presented in megawatts (bars in Figure 5) and as a pe rcentage of nameplate capacity (diamonds in Figure 5). These values vary significantly between regions (from 8.7 percent in ERCOT to 26.4 percent in NPCC) due in part to varying fo recasting and planning methodologies currently under development.Key Findings 2008-2017

13 2008 Long-Term Reliability Assessment Figure 5: Projected Increase in Existing, Planned & Proposed Summer On

Peak Wind Capacity

11.5% 17.2%

13.4% 19.6%

13.1% 26.4%

19.9% 19.9%

8.7% 8.7% 9.1% 15.0%

0 2,000 4,000 6,000 8,000 10,000 12,0002008201720082017200820172008201720082017200820172008201720082017

ERCOT FRCC MRO NPCC RFC SERC SPP WECCMW

0% 5% 10% 15% 20% 25% 30%

Existing Planned Proposed % of Expected-Peak Wind Capacity to Nameplate Capacity

Drivers Policy and regulations aimed at energy independence, climate change and green house gas emissions, whether already in place or still under consideration, seem to be the most significant drivers for development of new renewable re sources. Renewable Portfolio Standards (RPS) currently in place in over 30 U.S. states, for example, require many utilities to acquire new renewable resources to meet up to 30% of their total energy portfolio over the next five to 15
years. 21 Supported by federal tax credits in the U.S., wind power has become the fuel of choice for these requirements due to the maturity of th e technology and availability of suitable sites for development.

Reliability Impacts The proposed level of commitment to renewable resources offers many benefits including a more diversified fuel mix and reduced emissions. Bu t, just as with any new technology, certain challenges to reliably integrating wind into the system must be addressed.

Numerous studies have been conducted to study wind integration, notably the recently released report by the Department of Energy which suggests wind energy co uld provide for 20 percent of the U.S. electricity needs by 2030. 22 Though the level of penetration is the most studied factor, reliability considerations also include the size of balancing areas, improved system flexibility, ancillary service requirements, wind for ecasting and transmission requirements.

NERC’s Integration of Variable Generation Task Force has be en studying the influence on reliability of accommodating large amounts of wind generation. 23 Preliminary conclusions of

21 See Emerging Issues Section for more detail.
22 http://www.20percentwind.org/
23 http://www.nerc.com/filez/ivgtf.htmlKey Findings 2008-2017

14 2008 Long-Term Reliability Assessment this NERC Task Force, concentrating on accommoda te large amounts of variable generation (i.e. predominately wind) are:

• Forecasting of resources must be im proved to manage wind uncertainty

• Flexibility of the bulk power system must be expanded to manage wind variability

• Transmission must be constructed to enab le management of both the uncertainty and variability of wind resources.

Power system planners and operators are alrea dy familiar with a certain amount of variability and uncertainty, particul arly as it relates to system de mand and, to a lesser extent, with conventional generation. Output from wind genera tion, however, is not as dispatchable as conventional resources. With lim ited operating history, planners an d operators are adjusting their activities to accommodate large amounts of wind while maintaining bulk power system reliability.

Consistent methods are needed, for example, to determine wind on-peak capacity to ensure uniform measurement of its contribution to capac ity margins. Three approaches are in current use: 1) Effective Load Carrying Capability (E RCOT), historical performance (i.e. SPP) and deploying a flat percenta ge (i.e. Midwest ISO predominatel y located in MRO and RFC areas). These different approaches provide widely different re sults seen in Figure 5.

Conclusions and Recommendations

• Regulators and policy makers must suppor t the development of cost effective transmission resources, including equitable co st allocation guidelines for the delivery of both remotely located wind resources and ancillary services (such as spinning reserve and frequency response) to demand centers where su ch resources and/or services are deemed necessary and beneficial.

• Coordinated effort is needed to better de termine appropriate calculations for measuring the availability of wind on peak.

NERC Actions

• Assist the Integration of Variable Generati on Task Force in the co mpletion of its report incorporating specific, actionable recommendations.

• Review the regions’ renewable resource scenar io analyses to be incorporated in the 2009 Long-Term Reliability Assessment.Key Findings 2008-2017

15 2008 Long-Term Reliability Assessment 3. More Transmission Needed to Maintain Bulk System Reliability and Integrate New Generation
Though total miles of transmission additions have increased when compared to last year’s assessment, much more transmission will be requ ired to reliably integrate projected locationconstrained resources such as wind, nuclear, clean coal, and others into the bulk power system.

The total number of transmission miles is projected to increase by 9.5 percent (15,700 circui t-miles) in theU.S. and 7.4 percent (3,400 circuitmiles) in Canada over the next ten years (See Table 3).

This represents 1,700 more circuitmiles projected to be added in the U.S. and 1,000 more circuit-miles in Canada over the coming ten-year period when compared to projections in last year’s report.

More resources and investment will be needed, however, to maintain reliability and integrate new resources as aging infrastructure is replaced and changes are needed to the transmission system topology. New generation supply is projected to outpace transmission development by nearly two times – with Total Potential Resources projected to grow by 21 percent. 24

Further, many new supply resources are likely to be located remote from demand centers (i.e. wind generation) and location-constrained to those areas. The amount of transmission required to integrate these resources is significant. In Texas alone, for example, over 2,300 miles of new bulk transmission was recently approved for construction to transport power from new wind resources in West Texas to population centers like

24 NERC does not collect transmissi on additions with the same granularity as suppl y-side resources. This comparison assumes

the mileage reported includes Proposed transmission additions which is comp ared to Proposed Capacity additions. 2007 2008-2012 2013-2017 2017 Total Existing Additions Additions Projection United States ERCOT - 8,792 269 623 9,684 FRCC - 7,201 349 239 7,789 MRO - 15,939 1,075 1,258 18,273 NPCC - 6,805 252 16 7,073 NPCC New England 2,660 242 16 2,918 NPCC New York 4,145 10 - 4,155 RFC - 26,203 1,471 154 27,828 RFC-MISO 7,229 687 21 7,937 RFC-PJM 18,209 784 133 19,126 SERC - 32,295 1,676 753 34,724 Central 3,270 257 - 3,527 Delta 5,065 253 73 5,391 Gateway 1,952 57 - 2,009 Southeastern 9,503 459 448 10,410 VACAR 12,505 650 232 13,387 SPP - 7,683 672 21 8,376 WECC - 59,061 5,305 1,591 65,957 AZ-NM-SNV 10,418 1,310 713 12,441 CA-MX US 14,437 1,587 119 16,143 NWPP 24,875 1,669 663 27,207 RMPA 6,122 739 96 6,957
Total-U.S. 163,979 11,069 4,655 179,704

Canada MRO - 6,693 392 931 8,016 NPCC - 29,106 933 285 30,324 Maritimes 2,174 - 103 2,277 Ontario 11,316 420 - 11,736 Quebec 15,616 513 182 16,311 WECC

- 10,700 703 153 11,556
Total-Canada 46,499 2,028 1,369 49,896

Mexico WECC CA-MX Mex 674 238 102 1,014

Total-NERC 211,152 13,335 6,126 230,614



### Table 3: Planned Transmission Circuit Miles > 200 kVKey Findings 2008-2017

16 2008 Long-Term Reliability Assessment Dallas, Houston, Austin, and San Antoni o in the eastern part of the state. 25 This increase in 345 kV facilities is not reflected in this report’ s ERCOT data as it was submitted in March, 2008 which was prior to regulatory ap proval of these facilities.

The Major Transmission Projects > 200 kV section includes examples of potentially significant transmission additions, which are projected to improve reliability and/or system efficiencies. The projects were identified on a regi onal basis as vital to regional reliability during and beyond 2008–2017.

In order to provide another view of the breadth of invest ment requirements and capacity installation under considerati on, the collective capacity of existing and planned regional transmission was weighted by their total mile s and average MVA capacity by operating voltage in Figure 6. Though this compara tive does not entirely measure the bulk power system reliability benefits and increased capability of individual facility additions, 26 it provides insights into transmission capacity additions.

Fi g ure 6: NERC-Wide Total Existin g and Planned Lines: MVA-1000 Miles

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,0002007201720072017200720172007201720072017200720172007201720072017

ERCOT FRCC MRO NPCC RFC SERC SPP WECCMVA-Miles (Thousands) All DC

AC765kV

AC500kV

AC345kV

AC230kV Assumed MVA Capacity 230 kV = 700 MVA 345 kV = 1,300 MVA 500 kV = 2,000 MVA 765 kV = 3,000 MVA ALL DC = 2,000 MVA

Perhaps most notable are the 765kV additions pl anned in RFC. This approximately 240 mile project, expected to be in-ser vice in 2012, will bring a strong sour ce of power into Maryland area by reducing the west-to-east power flow on the existing PJM 500 kV transmission paths while providing significant benefits to the constrai ned area of Washington, DC and Baltimore.

Drivers Lagging investment in transmission resources has been an ongoing con cern for a number of years. More investment is re quired, as each peak season put s more and more strain on the transmission system, especially in constrained ar eas such as California a nd Desert Southwest of the U.S.

25 ERCOT’s CREZ analysis ( http://www.ercot.com/news/presentations /2006/ATTCH_A_CREZ_An alysis_Report.pdf Data not included in the submittal as this approval fo r transmission occurred after March 31, 2008.
26 For example, short lines in parallel may add more capabilit y than long lines in series.Key Findings 2008-2017

17 2008 Long-Term Reliability Assessment The process to site new transmission continue s to be difficult, time consuming and expensive due to local opposition and environmental concerns especially when lines are planned to cross state borders. Negotiations still delay and, in some cases, stop needed projects from being built. As a result, transmission permitting, siting, and c onstruction can take significantly longer (i.e. 7- 10 years) than permitting, siting, and construction of generation.

Positive steps are being taken in some states and provinces to expedite certain key projects, and the U.S. federal government now has back-stop au thority for lines planned within DOE defined National Interest Electric Transmission Corrid ors (NIETC). A number of studies are also ongoing to provide advanced planning for facilities. 27

Reliability Impacts Transmission lines are the criti cal link between genera tion and customers. As demand grows and generation is built in areas remote from the demand, more capacity on the transmission system is needed to meet demand. Congestion on transmi ssion lines, as more and more power is moved over them, can have a significant impact on reliabili ty. As these lines reach their capacity, for example, they are less able to make up the di fference when neighboring lin es are forced out of service due to equipment failure, severe weat her, or maintenance. Under-investment in transmission puts additional strain on existing resources, raising the risk of system disturbances, lengthening restoration time when outages do occur, and limiting access to remote generation.

Reflecting this importance, NERC should expand its understanding of projected transmission resource acquisition strategies being employe d throughout North America. Therefore, the categorization of transmission additions should be considered to fully appreciate transmission resource requirements.

Conclusions and Recommendations

• Regulators need to continue their support for ad ditional transmission resources. Further, they should revise their existing processes to expe dite the licensing of transmission projected needed to maintain reliability.

• The projects identified in the Major Transmission Projects > 200 kV section and their associated in-service dates are vital to ma intain regional bulk power system reliability and/or system efficiencies.

NERC Actions

• Continue to assess and report on the reliability impacts of integrating new variable generation and nuclear resources into the bulk power system. 28

• Enhance data collection to increase the granular ity and gradation of certainty of planned and proposed transmission projects.

• Provide information and support to NERC’s stake holders on the need fo r new transmission in North America.

27 For example, Joint Coordinate d System Plan Study (JCSG)

( http://www.spp.org/publications/2007%2011%2001%20JCSP%20Stakeholder%20Meeting%20Presentation.pdf ), the EHV Overlay Study ( http://www.nerc.com/docs/pc/ras/EHV_Overlay_Overview_NERC_FERC_LTRA_Workshop_FINAL_81007.pdf ), A Vision of The Next Interstate ( www.nerc.com/docs/pc/ras/NERC_2008_ LTRA_WS_30-31July08_presentations.zip ), and WECC’s Transmission Expansion Pl anning Policy Committee ( http://www.wecc.biz/documents/library /board/TEPPC/TEPPC%20Charter.pdf )
28 NERC expects to issue a special report in December 2008 on the reliability requirements for in tegrating variable generation

into the bulk power system.Key Findings 2008-2017

18 2008 Long-Term Reliability Assessment 4. Demand Response Increasingly U sed to Meet Resource Adequacy Requirements
Demand response programs increase d significantly in this year's projections. The long-term sustainability of these impacts will need to be monitored closely as these programs are used to meet reliability requirements more frequently.

Significant increases in demand response programs over the next ten years are projected to reduce growth in demand and provide ancillary services across North Am erica. As shown in Figure 7, Capacity Demand Response, 29 as a percentage of demand, is increasing in FRCC (over 6% of demand) and NPCC (up to 4% of demand). In other regions, the ratio of demand response to demand declines somewhat, as demand respons e additions do not qui te keep pace with demand growth. Though a suitable comparison to last year’s report measuri ng relative gains is not possible due to improvements in NERC’s data collection, these figures are both significant and encouraging.

Figure 7: Capacity Demand Response as a % of Summer Peak Demand

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017

ERCOT FRCC MRO NPCC RFC SERC SPP WECC% of Total Internal Demand

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

Total Capacity Demand Response Direct Control Load Management Contractually Interruptible (Curtailable) Critical Peak-Pricing with Control Load as a Capacity Resource

The total NERC-wide Capacity Demand Respons e for summer peak demand reduction grows from 29,000 MW in the summer of 2008 to 32,500 MW in the summer of 2017. Figure 8 shows the projected increases in dispat chable demand response by region.

29 See the Capacity, Demand and Event Definitions Section of this report for detailed definitions of demand response.Key Findings 2008-2017

19 2008 Long-Term Reliability Assessment 

### Figure 8: Capacity Demand Response (MW) - 10 Year Projection

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017
ERCOT FRCC MRO NPCC RFC SERC SPP WECCMW

Total Capacity Demand Response Direct Control Load Management Contractually Interruptible (Curtailable) Critical Peak-Pricing with Control Load as a Capacity Resource The total NERC-wide demand response used for Ancillary Demand Response during the summer peak remains about constant at 4,400 MW. NE RC regional comparison is shown in Figure 9.



### Figure 9: Ancillary Demand Response (MW) - 10 Year Projection

0 200 400 600 800 1,000 1,200 1,400

2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017 2008 2017
ERCOT FRCC MRO NPCC RFC SERC SPP WECCMW

Spinning Reserves Non-Spinning Reserves Emergency RegulationKey Findings 2008-2017

20 2008 Long-Term Reliability Assessment Dr Drivers Federal, state, and provincial policy makers and regulators are increasingly interested in improving the overall availability and efficiency of demand response res ources to help address climate change issues



### . 30 In addition, the electric industry is increasingly using demand response as an effective and efficient capacity resource, on equal footing with gene ration. In areas with structured markets, for example, demand respons e resources are now allowed to enter capacity markets, either through curtailm ent service providers or direc tly from individual customers. Several state commissions are also considering ways to earn a rate of return on demand response investments similar to new build generation. Flor ida’s commission, for example, has had such a mechanism in place for a number of years which has supported the high adoption of the resource in the state.

Reliability Impacts Demand response will become a critical resource fo r maintaining system reliability over the next ten years. Though demand continues to grow, new development of supply-side options are becoming increasingly limited – many coal plants ha ve been deferred or cancelled, nuclear plants are becoming more and more expensive, and tr ansmission lines increasingly difficult to site. Further, demand response also has an important role to play as more variable resources (such as wind) are added to the system. Variable resources, for exampl e wind generation, often need a “dance partner” which can provide operational flexibility to mainta in reliability during resource down-ramps that can be associat ed with them. Demand response can provide all or a portion of the flexibility required for this integration.

As demand response is relied upon more heav ily to meet firm dema nd in these capacities, however, more coordination between demand res ponse programs, system operators, and system planners is needed to fully assess the resource’s av ailability, characteristics, and constraints. For example, as dispatchable demand response prog rams are increasingly used as non-emergency resources, the probability and freq uency of their dispatch will also likely increase. Voluntary participation in these programs may decline as a result of this higher us age, causing the program to suffer “response fatigue.” If this occurs, system reliability could be affected as other resources may not be built or available in time to provide the ancillary services or energy required. In many cases, dispatchable demand response resources have not yet been tested to meet system reliability requirements at these potentially higher dispatch frequencies.

Conclusions and Recommendations

• Additional demand-side resources could be an e ffective option to preserve system reliability over the next ten years. In a ddition, they may facilitate the integration of renewable and variable resources.

• Potential reliability impacts of broad-scale use of demand response resources must be better understood by industry and regulators.

• Better measurement and verification techniques will be needed to measure and track actual availability of demand response und er various system conditions.

30 Some examples of Federal, St ate and Provincial activities can be found in the following reports:

http://www.ferc.gov/legal/staff-reports/demand-response.pdf

, http://www.ferc.gov/legal/staff-reports/09-07-demand-response.pdf

, http://www.powerauthority.on.ca/Page.asp?PageID=924&SiteNodeID=320 & http://www.narucmeetings.org/Presentations/National% 20Action%20Plan%20on%20Demand%20Response%20-%20NARUCR3.pdfKey Findings 2008-2017

21 2008 Long-Term Reliability Assessment **ΝΕΡΧ** NERC Actions Anticipating the growth in demand response as pa rt of the seasonal and long-term reliability assessments, the NERC Planning Committee, in coordination with the North American Energy Standards Board (NAESB), initiated two activities:

1. Develop and maintain a categorization sche me while collecting projected information. 31

2. Design and implement a demand re sponse event analysis system. 32

The recommendations from the first activ ity were approved by the NERC Planning Committee and results included in this report . The Demand Response Data Task Force was formed by the Planning Committee in order to measure and validate demand response event data and evaluate poten tial reliability concerns. The de mand response event data collection scheme and report are to be completed in early 2009.

31 http://www.nerc.com/docs/pc/d rdtf/NERC_DSMTF_Report_040308.pdf
32 http://www.nerc.com/filez/drdtf.htmlKey Findings 2008-2017

22 2008 Long-Term Reliability Assessment 5. Bulk Power System Adequacy Tre nds Emphasize Maintenance, Tools and

Training

NERC performed its initial analysis of reliability metrics from the last six years and concluded that the drive towards suitable maintenance, oper ating tools and training mu st continue. It is vital that these metrics be furt her refined and the trends analyzed so that root causes can be addressed.
There are two basic, func tional components of bulk power system reliabilit y: operating reliability and adequacy. 33 NERC has developed preliminary metrics measuring bulk power system reliability and, though these metrics require further refinement for future reliability assessments and are primarily limited to the Eastern Interconnection 34 , they can provide va luable insights for root cause analysis and bulk power system planning goals. 35
For example, Energy Emergency Alerts, shown in Figure 10, are issued wh en electricity supplies in a given area become insufficient to serve de mand, remain high in the Eastern Interconnection during the last six years. In 2007, there were 20 occasions when firm customer load interruption was imminent or in progress (Category A3). 36

Figure 10: Number of Energy Emergen cy Alerts by Year (2002-2007)

Figure 26: Number of Energy Emergency Alerts by Year (2002-2007)

0 20 40 60 80 100 120 140

2002 2003 2004 2005 2006 2007 A1
A2
A3

33 See the Capacity, Demand and Event Definitions Section

34 http://en.wikipedia.org/wi ki/Eastern_Interconnection
35 This is the inaugural year for incorporating reliability metrics in the Long-Term Reliability Assessment. Available data for this

assessment is solely from th e Eastern Interconnection.
36 The current definition for Category A2 includes the operation of demand-side resources as a capacity and emergency event,

while current industry practice includes the resource as part of normal, non-emergency operatio ns. The categories for capacity and emergency events based on Standard EOP-002-0, therefore, require revision to account for higher use of demand response as a capacity and ancillary resource. See http://www.nerc.com/docs/pc/d rdtf/NERC_DSMTF_Report_040308.pdf , entitled,

“ Data Collection for Demand-Side Management for Quantifying its Influence on Reliability: Results and Recommendation ” as well as the Capacity Demand and Event Definitions section of this report for NERC’s demand-side manage ment definitions and categorization. Category A1: No disturbance events and all available resources in use.

a. Required Operating Reserves

can not be sustained. b. Non-firm whol esale energy

sales have been curtailed. Category A2: Load management procedures in effect.

a. Public appeals to reduce

demand. b. Voltage reduction.

c. Interruption of non-firm end

use loads per contracts. d. Demand-side management.

e. Utility load conservation

measures. Category A3: Firm load interruption imminent or in
progress.Key Findings 2008-2017

23 2008 Long-Term Reliability Assessment One measure of bulk transmission congestion, used in parts of the Eastern Interconnection of North America, is Transmission Loading Relief ( TLR) requests, which have increased during the last six years. In some cases, the over-scheduling of electricity transactions requires the issuance of TLRs, which is how system operators maintain system loadings with in reliability limits. Reallocation and curtailment of bulk transmission service to meet System Operating Limits and Interconnection Reliability Operating Li mits are increasing (See Figure 11). 37

38

Fi g ure 11: TLR's Level 5b : 2002

- Sep 2008

0 10 20 30 40 50 60 70

2 0

02 2 0

03 2 0

04 2 0

05 2 0

06 2 0

07

2

0

08

(J

a

n

- S

e p)# of Incidents SWPP

TVA

PJM

MISO

ICTE 38

While TLR actions in and of themselves do not di rectly indicate a lowering of reliability, their higher use of these requests by so me regional coordinators such as Interdependent Coordinator of Transmission for Entergy (ICTE), Southw est Power Pool (SWPP) and the Midwest Independent Service Operator (MISO) requires further investigation. It is necessary to understand the drivers behind this perceived transm ission congestion to dete rmine if it represents a reliability or economic issue. If it is increas ing because the transmission system is being fully used to optimize economic dispatch, congestion may not impact bulk power system reliability. If congestion is occurring because needed transmissi on capacity is not available to serve firm load, then this may be an indicator of reliability concerns.

Application of TLR represents one method used in the Eastern Inte rconnection to relieve potential or actual loading. However, differences exist on how areas approach congestion management. For example, WECC uses an Unscheduled Flow Mitigation Plan as an equivalent load relief procedure for use in the Western Interconnection. 39 In market structures, redispatch is

37 See the Operational Reliability Section
38 SPP implemented its Energy Imbalance Market (EIS) on February 1, 2007. Since the implementation of the EIS Market, SPP

has experienced an increase in the number of TLR events prim arily due to its operating protocols. SPP’s market protocols require that the SPP Reliability Coordinator issue a TLR event every time congestion is experienced in the market footprint.
39 This procedure has been accepted by FERC and adopted by NERC Standards: http://www.nerc.com/f iles/IRO-STD-006-0.pdf

. WECC USFMP: http://www.wecc.biz/documents /library/UFAS/UFAS_mitigation_plan_rev_2001-clean_8-8-03.pdfKey Findings 2008-2017

24 2008 Long-Term Reliability Assessment commonly used as an efficient measure to re duce congestion in transmission systems. MISO 40
and PJM 41 have Locational Marginal Pricing (LMP) markets which run a security constrained dispatch models to determine the lowest cost generation dispatch without exceeding transmission limitations. Similarly, ERCOT employs a flow-based /zonal approach to ma nage forward markets and congestion. 42

Drivers Building and operating infrastructure to meet growing demand remains a challenge. Therefore, the industry has developed new operational approaches to eff ectively use existing bulk power system assets. These actions can reduce the bul k power system’s ability to withstand unexpected system outages. To maintain reliability, th e industry has improved maintenance practices, developed new operational tools an d reinforced operator training.

Recognizing the need to measure reliability trends, NERC’s Planning and Operating Committees jointly organized the Reliability Metrics Wo rking Group (RMWG) to develop and improve reliability metrics. Specific activities will include:

o Development of general metrics for the ch aracteristics of an Adequate Level of Reliability

o Definition of reliability measures, including formulae or methods for their calculation

o Identification of data collection and reporting guidelines

o Recommend root cause analysis

Conclusions and Recommendations

• Industry must continue to emphasize the impor tance of bulk power system maintenance, new tools and well-trained operators.

NERC Actions

• Support the RWMG’s activities to study and impr ove upon historical reliability metrics and trends. Specifically, this gr oup should focus on expanding th is analysis beyond the Eastern Interconnection. In addition, support root cause analysis of tre nds in the number of TLRs and other similar mechanisms.

• NERC should revise its Emergency Prepar edness and Operations Standard EOP-002-0 removing demand-side management as a charact eristic for identifying an Energy Emergency Event (i.e. Category A2).

40 More information on MISO’s congestion mana gement procedures can be found in the 2007 STATE OF THE MARKET

REPORT FOR THE MIDWEST ISO at : http://www.midwestiso.org/publish/Document/24743f_11ad9f8f05b_- 7b890a48324a/2007%20MISO%20SOM%20Report_Final%20Text.pdf?action=download&_property=Attachment
41 PJM’s congestion management procedures can be found in the 2007 STATE OF THE MARKET REPORT FOR THE PJM INTERCONNECTION at http://www2.pjm.com/markets/ma rket-monitor/downloads/mmu-reports/2007-som-volume2-sec7.pdf
42 ERCOT’s congestion manage ment procedures, entitled 2007 STATE OF THE MARK ET REPORT FOR THE ERCOT WHOLESALE ELECTRICITY MARKETS http://www.puc.state.tx. us/wmo/documents/annual_ reports/2007annualreport.pdfEmerging Issues & Scenario Analysis

25 2008 Long-Term Reliability Assessment 

# Emerging Issue Assessment & Scenario Analysis

Each year, the 10-year Long-Term Reliability Assessment (LTRA) forms the basis for the NERC reference case . This reference case incor porates known policy/regulati on changes expected to take effect throughout the ten-year timeframe a ssuming a variety of factors such as economic growth, weather patterns and system equipment behavior. Risk assessment and study of emerging reliability issues can identify a set of scenarios which may require deeper analysis. Once complete, these scenarios ca n then be compared to the reference case to measure any significant changes in bulk power system reliability.

Emerging Issue Risk Assessment
Background - Risk assessment of emerging issues m easures their perceived likelihood and potential consequences. To qualify for consider ation, emerging issues must affect bulk power system reliability based on the following criteria: 1) Exists for more than a single year in the LTRA ten-year study period, 2) Impacts reliability no sooner than three years into the future to allow sufficient time for analysis, and 3) Imp acts the reliability across at least one regional footprint and is not a local or sub-regional reliability issue.

NERC’s Reliability Assessment Subcommittee and staff identified seven emerging issues for use in the Planning Committee’s (PC) Risk Assessment:

1. Greenhouse gas reductions 2. Fuel storage and transportation 3. Rising global demand for energy and equipment, increased off-shore manufacturing of raw and finished materials 4. Increased adoption of demand-side a nd distributed generation resources 5. Replacing, upgrading and adding tran smission infrastructure for the 21 st century, including enhance cyber security protections 6. Water availability and use 7. Mercury emissions regulations

Risk Assessment – After endorsing the aforementioned emer ging issues, the PC prioritized the resulting emerging issues base d on risk, defined as their li kelihood and consequence, and categorized each issue as high, medium, or low. This risk assessment was performed for two timeframes: 1-5 years and 6-10 years.Emerging Issues & Scenario Analysis

26 2008 Long-Term Reliability Assessment Ranking and Risk Evolution - The risk assessm ent survey was completed by industry stakeholders represented on the NERC Planning Co mmittee. Figure 12 below provides the risk vectors for the seven emerging issues for the 1-5 year and 6-10 year timeframe.

Three emerging issues show increased acceler ation into the high likelihood and the high consequence quadrants: 1) Greenhouse Gas Re ductions, 2) Rising Global Demand for Energy & Equipment, and 3) Transmission of the 21 st Century. None of the seven emerging issues showed a decrease in probability or impact in the 6-10 year timeframe. The risk assessment confirmed the sentiment of the Reliability Assessment Subcommittee that all seven emerging issues are important to NERC and the industry

Finally, PC members individually identified potential emerging issue gaps, naming seven additional concerns not ranked: 1) Plug-in Hybrid Vehicles, 2) Imp act of wide-scale transmission ‘back-bone’ infrastructure, 3) Major Transmission Improvements for new Nuclear Plants, 4) Increasing Use of Special Protection Systems to avoid transmission construction, 5) Once through cooling limitations, 6) Hydroelectric dam removal, and 7) Air emissions and offset regulations. These issues may be explored in more detail in futu re reliability assessments. Fi g ure 12: Emer g in g Issues Risk Evolution:
1-5 Year & 6-10 Years

Greenhouse Gas Reductions

Fuel Stora g e & Transport Rising Global Demand for Ener g y & Equipment Increasing adoption of demand-side and distributed generation

resources

T ransmission of the 21st century

Limited Water

Availability Mercury Regulation

ConsequenceLikelihood High

High Low 1-5 Years

6-10 YearsEmerging Issues & Scenario Analysis

27 2008 Long-Term Reliability Assessment Descriptions and reliability cons iderations for each of the emerging issues are discussed below. A broader view of environmental regulation impact s was added to place the air and water issues into perspective.

They are grouped as:

• Potential Environmental Regulation Could Impact Resource Adequacy

- Greenhouse Gas Reductions

- U.S. Clean Water Act: Cooling-Water Intake Structures

- U.S. Clean Air Act: Interstate Rule and Mercury Rule

• Fuel Transportation and Storage

• Rising global demand for energy & equipment, increased off-shore manufacturing of raw & finished materials

• Increased adoption of demand-side a nd distributed generation resources

• Replacing, upgrading and adding tran smission infrastructure for the 21 st century, including enhanced cyber secu rity protections

• Water availability and use

Finally, a status report of the Scenario Analys is for the 2009 LTRA is discussed in this section.Emerging Issues & Scenario Analysis

28 2008 Long-Term Reliability Assessment Figure 13: Snapshot of Renewable Portfolio Standards (RPS) in the U.S. Potential Environmental Regulation could Impact Resource Adequacy

A number of ongoing environmentally-driven regulato ry issues could, in sum, have a significant effect on resource adequacy in the U.S., namely Greenhouse Ga s Reductions and climate change initiatives, the U.S. Clean Water Act: Cooling Water Intake Structures 43 and the U.S. Clean Air Act: Interstate and Mercury Rules. Understandi ng the reliability implic ations of potential legislation and regulations is vital to ensuring that the bulk power sy stem remains reliable during and after implementation.

Greenhouse Gas Reductions

Background: The drive to reduce greenhouse gas emissions is gaining momentum throughout North America. Regulations such as Renewable Portfolio Standards are being promulgated by individual states and provinces, with over thirty states adopting similar regulations 44 (Figure 13 45 ).

In 2006, coal provided almost 50% of the electric energy production 46 in the US and approximately 20% in Canada 47 in 2003. Natural gas is the cleanest fossil fuel in terms of air quality and carbon emissions, emitting up to 60 percent less carbon dioxide than coal. However, the magnitude of these benefits depends on the source of the natural gas and other factors, such as plant efficiency. Burning natural gas instead of coal at electricity-ge nerating units to reduce greenhouse gas emissions involves important trad eoffs related to economic, environmental, infrastructure, and fuel supply considerations. Converting existing capacity to natural gas poses substantial challenges due to fu el supply constraints, changes to infrastructure, and economic considerations. 48

The prospect for federal regulation in the U.S. continues to grow as numerous climate change bills are proposed in the House and Senate. A recent United States Supreme Court decision 49 determined that greenhouse gases regulation could fall under the purview of the U.S. Environmental Protection Agency (EPA). The U.S. EPA is inviting comment from all interested parties on options and questions to be considered for possibl e greenhouse gas regulations under

43 http://www.catf.us/advoc acy/legal/CWIS/RiverkeepervEPA%20P2%2004-6692-ag_opn.pdf
44 http://www.pewclimate.org/what_s_be ing_done/in_the_states/rps.cfm or more detailed resource maps at:

http://www.pewclimate.org/wh at_s_being_done/in_the_states/ nrel_renewables_maps.cfm
45 The Florida Public Service Commission (FPSC) Renewabl e Portfolio Standard is currently under development
46 http://www.eia.doe.gov/cneaf/ electricity/epa /epat1p1.html
47 http://www.canelect.c a/en/Pdfs/HandBook.pdf
48 http://www.gao.gov/new.items/d08601r.pdf
49 http://www.supremecourtu s.gov/opinions/06pdf/05-1120.pdfEmerging Issues & Scenario Analysis

29 2008 Long-Term Reliability Assessment the Clean Air Act. EPA has issued an adva nce notice of proposed rulemaking (ANOPR) to gather information and determine how to proceed. 50

To lay the foundation for future action, NERC gather ed stakeholder perspectives on this issue, asking them to identify potential impacts climat e change initiatives may have on bulk power system reliability. NERC will be issuing a speci al report on these findings in the coming weeks. 51

U.S. Clean Water Act: Cooling-Water Intake Structures

Background: Some thermal (coal, nuclear and gas) gene ration plants use substantial volumes of cooling water and are located on large water bodi es or high flow-rate ri vers. Many of these facilities currently use once-through cooling syst ems: drawing large volumes of water from the ocean, lake, or river to cool pl ant equipment and returning the used, warmer water back into the body of water immediately after use.

Section 316(b) of the Federal Water Pollution Control Act (FWPCA), more commonly known as the Clean Water Act, regulates thermal discharg es to the surface waters in the U.S. The temperature of the water discharged to the receivi ng water body must be kept at a level such that thermal discharges do not adversely affect wildlife in and on that water body, commonly accomplished by dilution.

Thermal generation is impacted by two of th e three phases promulgated by EPA 316(b):

• Phase I set standards for cooling water intake structures at new facilities.

• Phase II set standards fo r existing power plants. 52

Phase II regulations required that large existi ng power plants withdrawing 50 million gallons per day or more and using at least 25 percent of the water withdrawn for cooling purposes must comply with requirements to minimize impingement and entrainment of aquatic life in the water intake structures. In 2004, the final rule pr ovided several compliance alternatives. Based on a January 2007 decision by the Second U.S. Circuit Court of Appeals, EPA suspended its Phase II implementation 53 and is considering a new rulemaking. Those units with once-through cooling systems may be required to retrof it with closed loop cooling system s. The cost of such retrofits may result in some units retiring earlier than expect ed. Further, for plant retrofitting, there is an ancillary load required to serv e the closed-loop cooling equipment, resulting in a de-rating of the unit’s net output capability.

50 http://www.epa.gov/clim atechange/anpr.html
51 See www.nerc.com 52 http://www.epa.gov/watersci ence/316b/phase2/devdoc/
53 http://www.epa.gov/waterscience/316b/phase2/implementation-200703.pdf † Adjusted Potential Resource Margins are subject to change, as updated capacity information is expected. ‡ Adjusted Potential Resources for WECC US include the AZ-N M-SNV subregion (approx. 37,000 MW). However, this

subregion was unaffected in the NERC Special Reliability Assessment.Emerging Issues & Scenario Analysis

30 2008 Long-Term Reliability Assessment Reliability Considerations: In conjunction with the U.S. Department of Energy’s (DOE) Office of Electricity Delivery and Energy Reliability and Office of Fossil Energy, NERC completed a Special Reliability Assessment measuring the Adjusted Potential Resource Capacity Margin implications of Section 316(b) Phase II rules. 54 DOE provided NERC a listing of vulnerable units (totaling approximately 240 Gigawatts). This information was supplemented by identifying those units that were expected to retire during the study time fram e, along with permitting dates.

Summer peak capacity margins and demand da ta from the 2008-2017 Long-Term Reliability Assessment were used to establish a Reference Case . To reflect the potential EPA rulemaking timeframe, the summer peak Adjusted Potential Resource Capacity Margins for 2012 through 2015 were compared to the capacity margin impact s with assumed unit retirements and ancillary load increases.

NERC reviewed the impact of either retrofitting units with existing once-through-cooling systems to closed-loop cooling systems (4% reduction in nameplate capacity) or unit retirements (capacity factors less than 35 percent) on NERC-US and regional capacity margins for 2012-2015. Based on a worst case view, NERC-U.S. Adjusted Potential Resources may be reduced by over 48,000 MW, approximately 39,000 MW due to retirements and 9,000 MW due to increased unit auxiliary loads. This reduction has the effect of lowering the Adjusted Potential Resource Capacity Margin by 4.3 percent (see Figures 14 & 15).

54 See http://www.nerc.com/files/NERC_SRA- Retrofit_of_Once-Through_Generation_090908.pdf for details and assumptions Figure 14: NERC US - Cooling Tower Retrofit Effects Change in Adjusted Potential Resource Margin Summer Peak Demand

0% 5% 10% 15% 20% 25%

2013 2014 2015Margin (%)

Adjusted Potential Resources Margin Reduced Adjusted Potential Resource Margin NERC Reference Margin Level 4.3 percent reduction in the Adjusted Potential Resources

Capacity Margin

Fi g ure 15: NERC US - Coolin g Tower Retrofit Effects on Adjusted Potential Resources Summer Peak Demand

0 10,000 20,000 30,000 40,000 50,000 60,000

2013 2014 2015ΔMW

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%Reduction ofAdjusted PotentialResources Margin

Derate Effects
Retirement Effects Total Capacity Reduction % of Margin Lost due to Retirements and Derate EffectsEmerging Issues & Scenario Analysis

31 2008 Long-Term Reliability Assessment Figure 16: CAIR Coverage in the U.S. Table 4 indicates the 2015 summer peak capacity margin reductions for each of the affected NERC-U.S. regions/subregions. The most significant reductions in capacity margin occur in California, ERCOT, New England, and the Delta Subregion of SERC, with each of these areas experiencing more than a 10 percent reduction in their capacity margins. These regions may require additional resources to accommodate the potential retirements/retrofits from the Section 316(b) Phase II action.

These capacity reductions could also result in additional transmission congestion. Detailed system transmission studies may be needed to determine the full extent of bulk power system reliability impacts resulting from the reduction of this significant amount of generating capacity.

U.S. Clean Air Interstate Rule (CAIR) and Clean Air Mercury Rule (CAMR) Two Clean Air Rules have the potential to impact capacity margins in the U.S. It is vital to understand poten tial plant retirements, ancillary demands of retrofit equipment and impact on bulk power transmission to fully understand the potential reliability impacts.

Background: The U.S. EPA issued the Clean Air Interstate Rule (CAIR) in March 2005. CAIR is meant to re duce ground-level ozone and/or fine particles that might migrate across state boundaries. The Clean Air Interstate Rule covered 28 eastern states and 

### Table 4: 2015 Summer Peak Capacity Margin Reductions

Adjusted Potential Resources

(MW) Reduction due to Retirement

(MW) Derate due to Retrofit (MW) NERC Reference

Margin Level Adjusted Potential Resources

Margin Margin Reduction Reduced Margin

United States

WECC - CA-MX US † 72,293 10,137 289 13.2% 12.7% 14.7% -2.0% NPCC - New England 31,673 2,827 428 13.0% 10.0% 10.3% -0.3%

ERCOT 86,436 10,919 542 11.1% 15.9% 12.9% 3.0%

NPCC US 72,750 6,481 990 13.0% 13.3% 9.9% 3.4%

WECC US † ‡ 176,944 10,177 314 12.3% 11.1% 5.6% 5.5%
NPCC - New York 41,077 3,654 561 13.0% 15.9% 9.6% 6.3%
SERC - VACAR 78,182 553 1,032 13.0% 11.0% 1.8% 9.2%

WECC - RMPA † 15,609 40 0 10.5% 10.2% 0.2% 10.0%
SERC - Central 54,548 0 949 13.0% 12.6% 1.5% 11.0%

SERC - Delta 41,259 4,266 466 13.0% 21.5% 10.2% 11.4%

RFC 230,062 3,339 2,863 12.8% 14.5% 2.4% 12.1%

SERC 269,599 6,054 3,307 13.0% 15.6% 3.0% 12.5%

SERC - Southeaster n 66,675 675 357 13.0% 13.9% 1.4% 12.6%

MRO US 55,582 529 612 13.0% 15.1% 1.8% 13.3%

FRCC 63,170 1,267 454 13.0% 18.7% 2.3% 16.4%

WECC - NWPP † 51,861 0 25 11.9% 16.9% 0.0% 16.8%

SPP 63,700 817 257 12.0% 24.1% 1.3% 22.8% SERC - Gatew ay 28,935 560 502 13.0% 28.8% 2.7% 26.1%

Total - NERC US 1,018,243 39,583 9,339 13.0% 14.7% 4.3% 10.4%Emerging Issues & Scenario Analysis

32 2008 Long-Term Reliability Assessment Washington D.C. 55 (see Figure 16). CAIR permanently placed a cap on emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ) in the eastern U.S. by using an interstate cap and trade program deployed only in those states c overed by the interstate mechanism.

In July, 2008, the U.S. Court of Appeals voided the current version of the CAIR and remanded it back to EPA 56 , noting that their approach – region wide caps with no state specific quantitative contribution determinations or emission requiremen ts – was flawed and required EPA to redo its analysis. The court also agreed that EPA must tailo r pollution cuts in upwind states with the level of impacts on downwind jurisdicti ons. EPA is reviewing the Cour t's decisions and evaluating its impacts.

Closely related to CAIR, the EPA Clean Air Mercur y Rule (CAMR) requires coal-fired plants to reduce their emissions of mercury. In December 2000, the U.S. EPA issued a “regulatory determination” under the 1990 Clean Air Act Amendments that regulation of mercury is “appropriate and necessary” for coal- and oil-fi red power plants. Title III of the Amendments introduced the Maximum Achievable Control Technology (MACT) standard as a level of control. In March 2005, EPA issued its final Clean Air Mercur y Rule (CAMR) for coal-based power plants. The CAMR used a market-based cap-and-trade appr oach to require emissions reductions in two phases: a cap of 38 tons in 2010, and 15 tons af ter 2018, for a total reducti on of 70 percent from current levels. Facilities would have to demonstrate compliance w ith the standard by holding one "allowance" for each ounce of mercury emitted in any given year. In the final rule, EPA stated that regulation of nickel emissi ons from oil-based plants is not "appropriate and necessary."

In February 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion in a case, which was initiated by 15 states and other groups, challenging the CAMR and EPA's decision to "de-list" mercury as a hazar dous air pollutant. The Court held that EPA's reversal of the December 2000 regulatory finding was unlawful 57 . The Court vacated both the reversal and the CAMR, and sent the CAMR back to EPA for reconsideration. As a result of the Court's decision, it is likely that EPA will develop a MACT standard, which would require every oil- and coal-based power plant to install mercury-specific controls.

A new EPA rulemaking could take several year s to finalize and might not require emission reductions for more than five years. In the m eantime, states are also developing their own Mercury standards that are at least as stringent as the EPA MACT standard.

Reliability Considerations: Much like meeting the requirement s of Section 316(b) of the Clean Water Act mentioned above, compliance with CA IR and CAMR may require the owners of existing plants to face economic decisions to:

- Retire plants earlier than expected.

- Retrofit plants, which can increase ancillary loads

In either case, capacity margins would be redu ced, increasing the need for more resources to meet resource adequacy requirements.

55 http://www.epa.gov/cair/index.html
56 http://www.epa.gov/cair/pdfs/05-1244-1127017.pdf
57 http://pacer.cadc.uscourts.gov/docs/common/opinions/200802/05-1097a.pdfEmerging Issues & Scenario Analysis

33 2008 Long-Term Reliability Assessment Fuel Transportation & Storage The interdependence of the electric , gas, coal, and – to an extent – oil industries will continue to play a role in the adequacy of electricity supply in North America.

Background: The physical capacity for natural gas tran sportation and storage is emerging as an issue with greater potential implications for the adequacy of electricity supply than in recent years due to the increasing con cerns regarding global warming and the increasing likelihood of legislation to reduce CO 2 emissions. Such legislation could cr eate incentives for the construction of more new natural gas-fired capacity as a “bridging” technology to displace energy from existing coal-fired generation un til new low-carbon electricity pr oduction technologies become commercially viable. The drivers toward a car bon-constrained future focus this discussion on natural gas transportation and storage as a poten tial weak reliability link associated with significant increases in gas-fired generation

.

In 2006, natural gas-fired generation produced 20% of the electricity in the United States while representing 41% of the instal led summer generating capacity. Co al-fired generation produced 49% of the electrical energy in North Americ a and represented 32% of the installed summer capacity. Heavy and light oil is pr imarily used as a back-up fuel for natural gas. Oil-only fired capacity is negligible an d total oil generation represented less than 2% of the el ectricity produced in 2006. 58

Transportation and storage for coal, residual oil a nd distillate fuel oils have not been, nor are expected to be, an electric power re liability concern, as explained below.

• One significant disruption in ra il transportation occurred in 2005 for the delivery of coal from the Powder River Basin (PRB), a re gion in southeast M ontana and northwest Wyoming. The coal in this region has low sulfur and low ash content, and about 40% of the coal used in power plants at that time came from the PRB. Coal from the region is moved on a single rail system comprising three tracks that are jointly owned by the Union Pacific and Burlington Northern Santa Fe railroads. In 2006, the joint owners of the PRB rail system received the requir ed approvals to add a fourth track.

• While fuel inventories at some coal plants reached extremely low levels in 2005, the PRB delivery disruptions did not impact electric re liability. Many utilities, however, did incur higher costs for the use of alternative fuels.

• Despite the 2005 PRB coal delivery disrup tion, the reliability aspects of coal transportation and storage are generally excellent. 59

Residual (heavy) and distillate (l ight) oil are typically delivered by barge to power plants located along the Atlantic and P acific coasts. Supply disruptions ha ve not occurred in recent decades and the reliance on these fuels ha s dropped significantly since the repeal of both the Natural Gas Policy Act of 1978 and the Power Plant and Indus trial Fuel Use Act of 1979 which eliminated the prohibitions against the significant use of na tural gas as an electr icity sector fuel.

58 http://www.eia.doe.gov/cneaf/ electricity/epa /epat1p1.html
59 Note that Midwest U.S. experienced severe flooding in 2008, and this caused fuel transpor tation delays, primarily with

delivery of coal by rail. This year’s floods are being compared to the 1993 floods. Both are either 100 or 500 year occurrenc es that have occurred within 15 ye ars. It is too early to conclude that flooding is an emerging issu e that needs to be considered.Emerging Issues & Scenario Analysis

34 2008 Long-Term Reliability Assessment Hydro is another primary energy source that can influe nce the adequacy of electricity supply. For areas that are heavily depende nt upon hydro-electric generati on, it has been observed that droughts can create severe strains on alternative fo ssil fuel resources and delivery infrastructure that may either not be robust or which atroph ied during periods of favorable hydro conditions.

The California Energy Crisis of 2001 was largely precipitated by the onset of drought conditions in the Pacific Northwes t after a decade of relatively high hydro conditions. Since California depends on imports from the Northwest to satisfy some of its adequacy needs, th ese drought conditions exerted stress on the coal and gas markets and the physical ge neration and delivery infrastructure. The failure of a key natural gas compressor station exacerbated the crisis as did the lack of opportunities for maintenance on natural gas-f ired facilities and the concerns of making and receiving payme nts for generation in a dysfunctional electricity market. 60

Natural Gas Transportation:

The U.S. has several major natural gas production basins 61 , and an extensive natural gas pipeline network. There are also numerous pipeline connections between the United States and Canada, and almost 95 percent of U.S. natural gas imports come from Canada. Major connections join Texas and northeastern Mexico, with additional connections to Arizona and between Baja California, Mexico, and California, U.S. Infrastructure growth in the Baja California region is expected. 62

A large portion of natural gas pipeline capacity within the United States is directed from major production areas of Texas and Louisiana to markets in the Western, Northeastern, and Midwestern regions of the country, as illustrated in Figure 17. In the past ten years increasing levels of gas from Canada have targeted these markets as well.

60 http://www.eia.doe.gov/pub/oil_ga s/natural_gas/analysis_publica tions/ngpipeline/process.html
61 Excepted from http://www.eia.doe.gov/emeu/north america/enginfr2.htm#_VPID_1
62 http://www.eia.doe .gov/emeu/northam erica/fig35.jpg Figure 17: U.S. Natural Gas Pipeline 62Emerging Issues & Scenario Analysis

35 2008 Long-Term Reliability Assessment Canada has an extensive natural gas pipeline network, including several major interconnections with the United States. Alberta is the dominant producer, though N ova Scotia is increasing its production. Canada is the world’s second larges t natural gas exporter after Russia. Figure 18 illustrates the pipeline system in Canada.

Natural gas is delivered by Figure 18: Main Canadian Natural Pipelines 63 pipeline and, unlike electricity grids, natural gas pipelines do not demand the nearly instantaneous balancing of injections and w ithdrawals since the pipelines themselves have some storage capacity. While daily injections and withdrawals by customers are monitored by pipeline operat ors, pipelinestypically have customers “trueup” their BTU injection and withdrawal differences (“imbalances”) on a monthly basis. 64

Additional gas storage facilities could potentiality mitigate electricity adequacy concerns due to gas supply or delivery disruptions; however , gas storage facilities are unevenly distributed and typically located remote from gas-fired generato rs. Nearly all of the gas storage facilities in the U.S. are in 13 states: Texas, Louisiana, Mississippi, Oklahoma, Kansas, eastern New York, eastern Pennsylvania, West Virg inia, western Ohio, Illinois, Indiana, eastern Kentucky, and southern Michigan. The western U.S has onl y about 5% of the nearly 400 active storage facilities.

Gas storage is primarily us ed for two reasons. First, storage is used to take advantage of differences in supply and de mand for natural gas. Natural gas production capability is reduced if extraction is cycled ac ross the seasonal swings in gas demand. Therefore, natural gas is largely extracted at a constant rate, and storage is used to balan ce the annual, and inter-annual, va riations in natural gas consumption. This seasonal imbalance between constant supply and seasonal demand produces the seasonal gas price flu ctuations which encourage gas to be injected into storage when prices ar e lower and withdrawn when prices are higher, as well as to supplement gas well withdrawals during peak use periods. Second, storage is used by pipelines as an operational tool to balance pipeline supplies and withdrawals and maintain gas pressure. 65

63 http://www.eia.doe.gov/ emeu/northamer ica/enginfr2.htm#_VPID_1
64 Pipelines retain 2-3% of the gas injected for pipeline compressor operation. 65 http://www.eia.doe.gov/pub/oil_gas/na tural_gas/analysis_public ations/storagebasics /storagebasics.htmlEmerging Issues & Scenario Analysis

36 2008 Long-Term Reliability Assessment Natural gas is predominat ely stored at exhauste d oil and gas fi elds, aquifers, or underground salt caverns generally distant from power plants. Sin ce stored gas must still use the pipeline system for delivery, gas storage does not mitigate el ectricity supply concerns caused by pipeline disruptions. The pipelines and compresso r stations are shown below in Figure 19.

Figure 19: Pipelines in the U.S. 66

From an electricity supply adequ acy perspective, a pipeline inci dent, whether an accidental break or the loss of gas compression, can disrupt the flow of fuel to power plants that ar e connected to that pipeline resulting in the near simultaneous loss of such power plants as line pack runs
out. 67,68 Such an incident could cause switching to alternative fuels, such as distillate fuel oil, which may not be available in the quantities needed for an extended timeframe to replace the lost natural gas, or may be limited by environmental restrictions.

Reliability Considerations - Disruptions of gas flow from we lls, as illustrated in the Sable Island incident described below, whether caused by severe weather or equipment failure, are also a potential electricity supply adequa cy issue. Since the impact of the loss of gas wells can be the same as the loss of gas pipeline capacity, strategies that address the loss of pipeline capacity can also address the loss of supply from gas wells.

66 http://www.eia.doe.gov/pub/oil_gas/na tural_gas/analysis_publications/ngpi peline/images/com pressorMap.gif 67 In the U.S, pipeline safety is regulated by the U.S. Depart ment of Transportation’s Pipeline and Hazardous Materials Safety

Administration (PHMSA).
68 Recently, a 5+ magnitude earthquake occurred in southern Illinois near the Indiana border. Many state and local government

agencies began reviewing earthquake prepar edness plans. Gas pipelines may be at ri sk of rupture due to a severe earthquake.Emerging Issues & Scenario Analysis

37 2008 Long-Term Reliability Assessment On Friday, November 30, 2007, a mechanica l component failure at the Sable Offshore Energy Project (Sabl e Island) located off the No va Scotia coast resulted in a significant loss of natural gas s upply injections into the Maritimes & Northeast (M&N) 69 pipeline. By Saturday, December 1, this loss of gas supply finally impacted northern New England gas -fired generating resources. This event resulted in electric c apacity deficiencies in the st ate of Maine. The capacity deficiency in Maine led to a Power Watc h declaration of Emergency Operating Procedures (EOPs) 70 and consumers of electricity were requested to reduce electricity use. During this event, both Central Maine Power and ISO-NE coordinated remedial efforts to ensure system reliability. No electric load was shed within the regi on and electric sector operati ons eventually returned to normal in two days

.
There are differences in the way fuel transporta tion and transmission services are sold. “Firm” and “non-firm” mean different things in the fuel transportation business when compared to the electric transmission business, and these diffe rences need to be understood and considered. As an example, no market or Balanc ing Authority would consider a s upply as “firm” if its electric Transmission Service is contracted as “non-fi rm” under a Transmission Provider’s tariff. Yet many organized markets and Balancing Authorities would consider a supply as “firm” if it has Firm Transmission Service even though its natural gas fuel delivery is c ontracted as “non-firm” under a natural gas pipeline’s tariff and it has no back-up oil fuel. The reliability as pects of such gas transportation arrangements are more definitive than the distinction implied by “firm” or “non-firm” delivery categories. Several factor s could make non-firm gas deliveries acceptable from a reliability perspective. These include:

1. Generation with dual-fuel capability that co uld switch to an alternate fuel without disrupting its production of power if its non-firm natura l gas delivery was curtailed. 71

2. Generation with multiple non-firm pipeline sour ces, such that the interruption of natural gas deliveries by one pipeline woul d not disrupt its power production.

Generators with firm gas transmission capacity may not have the ability to withdraw their maximum hourly demand because of how they cont racted for their deliveries. Most pipeline tariffs contract for gas capacity based on the contracted maximum daily energy withdrawals specified by the generator. These same tariffs typically limit the hourly withdrawal rate to 1/24 th of the contracted maximum daily energy withdrawals. 72

There are some contractual refinements that supp lement the discussion above. Each plant with a firm transportation nomination is considered a “primary “deliv ery point. A Generation Owner (GO) who contracts for gas transp ortation for a number of generato rs at different locations from the same pipeline may not be able to produce 100% of its capacity based upon the contracted firm pipeline capacity for each plant. In this case, a GO may be relying upon its ability to

69 http://www.iroquois.com/new-Intern et/igts/PipelineS vs/ps_sysmp.asp
70 ISO-NE implemented up to Action 12 of Operating Procedure No. 4 – Action During a Capacity Deficiency (OP4).
71 Curtailments of non-firm gas de liveries require one to two hours of notice under most gas pipeline tari ffs, allowing a generat or

to switch fuels in a controlled manner.
72 A “uniform withdrawal rate” is the typica l pipeline tariff terminology that requires that hourly withdrawal rates to not excee d

1/24th (or 4.17%) of the contracted daily deliveries. Other pipe lines have more flexible hourly scheduling requirements; some, for example, may allow hourly deliveries to be up to 6% of the contracted daily deliveries.Emerging Issues & Scenario Analysis

38 2008 Long-Term Reliability Assessment nominate some of its contracted capacity at other generator locations (i.e., other “primary” delivery points) to the locations of the gene rators that will be operating. The operating generators that receive such supplemental nomin ations are “alternate” delivery points.

Pipelines allow customers to switch their total fi rm gas capacity to different locations, provided that (i) the sum of the customer’s primary and a lternate delivery nominations do not exceed their total gas capacity under contract and (ii) the deliveries to alternate delivery points do not impede the deliveries to the primary delivery points of any other pipeline custom ers. This strategy recognizes the low probability that all genera tors will be at their simultaneous maximum capacities, as one or more generators may be out of service due to planned or unplanned outages. Therefore, a generation owner may have 90% of the gas needed at a particular location under a firm transportation contract and assume th at it could nominate the additional 10% from locations that will not be opera ting at full capacity. As described above, the nominated 10% capacity to the alternate deli very point is not 100% guarant eed. However, once granted, pipelines will interrupt non-firm transportation if needed to maintain service to alternate delivery points.

Questions have also been raised regarding the potential impacts from compositional variability within natural gas streams by gas-fired generators. Gas interchangeability and/or quality are of greatest concern to large frame co mbustion turbines because their NO x combustion systems are particularly sensitive to its composition. Varyin g fuel characteristics are strongly impacted by the natural gas origin.

Two NERC regions – NPCC 73 and FRCC 74 – have already performed an analysis on natural gas transportation and its pote ntial impact on reliability. In addi tion, other areas (for example, ISONE) continue to monitor the impact of fuel quality on the reliability of combustion turbines. Their analyses can be used as a starting point by others.

73 For NPCC, see http://www.npcc.org/documents /regStandards/Guide.aspx , B-08 “ Guidelines for Area Review of Resource

Adequacy ,”
74 For FRCC see pages P6:2-32 of https://www.frcc.com/Reliability/Sh ared%20Documents/FRCC%20Handbook%200208.pdf

entitled “FRCC Generating Capacity Shortage Plan.”Emerging Issues & Scenario Analysis

39 2008 Long-Term Reliability Assessment 4.9 - 4.6% 3.4 - 3.7% 9.5 - 7.6% 8.3 - 7.6% Range of Forecast GDP Growth (2007- 2011) 

###  Nuclear



###  Coal-fired plants 

###  Hydroelectric/

thermal



###  Nuclear

resources 

###  Coal



###  Nuclear sources 

###  Nuclear



###  Renewable

energy Types of Investments in Generation $15 billion $40 billion $75 billion $100 billion Major Investment Initiatives next 5 years Surplus Excess generating capacity; deficit expected in near future Adequate Net importer of electricity: long term contract to import power from Itaipu hydro station located in Paraguay Adequate but moving towards deficit 10% of annual growth required for

future demand Deficit Shortage 11- 13%; 43% with power Power Supply Situation 

## S. Africa 

# Brazil China India Country Table 5: Global Demand for Power Equipment is Rising. Rising Global Demand Impacts for Electric Power Equipment High growth in global demand for energy, including elec tricity, has led to increased demand for both transmission and generation electric power equipment Much of the equipment is manufactured overseas and shipped to the U.S. Further, global manu facturing capacity for equipment has not kept pace with demand. Theref ore, expected delivery times have recently lengthened considerably, a trend expected to continue through 2017.

Background: Much of the equipment required by the electric utility industry represents specialized orders, and large inventories of such equipment are not maintained by manufacturers. Without equipment standardization, there is little surp lus capacity for electr ic power equipment, and delivery times will always be sensitive to external pressures. Global demand for power equipment is rising significantl y, especially in count ries whose economies are accelerating. The Table 5 provides a perspectiv e from a sampling of countri es experiencing high growth. 75

75 TSC ResearchEmerging Issues & Scenario Analysis

40 2008 Long-Term Reliability Assessment The extended expected delivery times for equipmen t leads to three issues that can impact future reliability:

1. Generation and transmission projects must be planned farther in advance.
2. Lack of flexibility to respond to unexp ected or quickly changing conditions.
3. Longer times to replace depleted inventories resulting from catastrophic events.

Meanwhile, there is a significant worldwide fo cus on renewable resources to provide the growing requirements for electric energy. The de mand for renewable energy in the United States exceeds supply. Further exacerbating this situation is the fact that legislation is in place in over twenty-five states that mandates renewable portfo lios of up to 30% of renewable energy to be in place over a time period from fifteen years to as short as five years. It is estimated that, absent accelerated construction, the demand for renewable resources could exceed the available supply by more than 30% by 2010. This pressure will partic ularly strain the ability of the United States to produce wind turbines. Currently, only two manuf acturers in the U. S. account for more than three-fourths of the market.

Additional and reinforced transmission infrastructu re will be required to connect these renewable resources to load centers. In the U.S. 30% to 50% of the transmission and distribution network is 40-50 years old and may require repair or replacement in the coming years. 76 These factors, along with the transmission infrastructure nece ssary to meet increased global energy demand, strains manufacturers’ ability to supply the need ed transmission system equipment, with the net result being longer delivery times.

Reliability Considerations: With the substantial increase in projected wind and nuclear generation, it is vital that the associated equipmen t be available. For example, there are fifteen applications pending for new nucle ar facilities in ei ght states, almost 145 GW of new wind generation across North America (P roposed), as well as the requisite bulk power transmission additions to reliably integrate these new resour ces into the bulk power system. The impact of equipment delays on the timely completion of these facilities can significantly impact future bulk power system reliability.

Delayed equipment and depleted inventories can cau se near term and event-related shortages of transmission or resources. Over time, these ex tended delivery times should be factored into the lead times for planned projects as well as eq uipment inventory strategies. However, many organizations may experience an adjustment peri od during which there will be some reliability risks. To manage these risks, organizations should:

• Build supply chain reliability;

• Transition to industry sp ecification standards;

• Diversify supply portfolios; and

• Solidify service partnerships and redefine alliance relationships.

76 http://www.weidmann-acti.com/u/library/2006bartleypaperyes.pdfEmerging Issues & Scenario Analysis

41 2008 Long-Term Reliability Assessment Increased Adoption of Distributed Generation and Demand-Side Resources

Distributed generation, demand-si de management (demand response and energy efficiency) and new technologies will become cr itical to meeting incr easing demands for el ectricity in North America.

Background: The potential benefits that demand-side and distributed genera tion resources bring to bulk power system reliabil ity must be balanced with the operational and forecasting challenges being faced as the penetration of these resources increases.

Demand-side and distributed generation resources can be categorized into a number of sub groupings:

• Distributed generation (DG) is a term used to describe the small scale production of power, typically located close to demand or c onnected to distribution systems. In certain cases, the plants may often be located “behind the meter” at sites such as hospitals and industrial facilities. DG is al so known as on-site generation, dispersed generation or embedded generation. Typical system reliability benefits attributed to DG may include: 1) Reduced energy losses and upstream conge stion on transmission lines; 2) Improved local reliability; and 3) Faster perm itting than transmi ssion line upgrades.

• Demand-side management (DSM) is ofte n understood to include two components 77 : energy efficiency (EE) and demand response (D R). DSM resources can lead to reductions in supply-side and transmission requirements to meet total internal demand. Planners and Operators have already integrated demand-response programs : 1) Capacity resources; 2) Ancillary Services; and 3) Energy reductions . Long-term reliability benefits include reduced supply-side and transmission requ irements as well as augmentation of operational and long-term planning margins. DR is also considered as an effective tool in responding to system events, such as sudden loss of supply, and can be included in UFLS and UVLS schemes. These resources can of fset or defer the need for large scale generation investment (i.e. large individua l grid-connected generation facilities). EE generally refers to projects which reduce en ergy use at all times – such as compact fluorescent lighting – but which cannot be controlled at the time of peak.

Reliability Considerations: To realize the potential benefits of DG and DSM outlined above, planners and operators must integrate them reliably into the bulk power system.

Distributed Generation - Increased DG integration must suppor t: 1) Reliability – DG must not degrade the quality and reliability of supply to distribution-connect ed consumers, 2) Visibility – DG must be visible to the system operators to allow real time decisions for the reliable operation of the grid, and 3) Requirements – Technical requirements for DG must support the reliable operation of the bulk power system.

As the penetration of DR resour ces grows, the frequency and dura tion of their dispatch will also grow. If DR performance diminishes in response to a higher frequency a nd duration of dispatch,

77 http://www.nerc.com/docs/pc/drd tf/NERC_DSMTF_ Report_040308.pdfEmerging Issues & Scenario Analysis

42 2008 Long-Term Reliability Assessment electricity supply adequacy could be impacted. Current resource planning methods often fail to fully address the unique charac teristics of DR resources.

As more distributed generation is contemplated and deployed, the question begins to arise as to how planners and operators can best utilize th ese resources for reliability purposes. Several challenges remain that complicate how distributed generation is “c ounted on” for reliability. First and foremost, unlike with larger generating units , system operators do not typically have the same kind of visibility and contro l over these distributed assets – especially those connected to the distribution network as opposed to the bulk transmission system.

Additionally, the performan ce of generation connected to the di stribution system currently is not covered by NERC Standards. While the loss of a single unit connected to the distribution system may not materially impact reliability on the re st of the system, the collective loss of many distributed generators – as ma y occur during a system disturba nce – could have a significant impact to reliability in the area. For exampl e, based on the current interconnection standards from the IEEE Power and Energy Society, 78 distributed generation resources may disconnect from the power grid when short-term low voltage events occur either to prevent damage to the equipment or to meet anti-islanding voltage dr op-out requirements on the distribution system. Bulk power system reliability requirements, however, may require the units to “ride through” the excursions to support the grid, prevent cascading outages, and aid in restoration. Failure of generation to meet these requirements could lead to system instability and/or voltage collapse, especially if the demand being served by the distributed generation stays connected when the resources drop off-line. In this scenario, distribu ted generation could, in f act, negatively impact reliability in a region.

Distributed generation can support reactive perfor mance of the bulk power systems due to close proximity of the grid to generators. However, mo re studies are needed to measure the potential reactive benefits.

Therefore, NERC Standards may be required reconc iling potential conflicts between the need to maintain bulk power system reliability and ex isting IEEE-PES standards for the distribution network. Industry investigation in to the potential impacts of di stribution connected generation on bulk power system reliability could reveal needs and required NERC Standard activity.

Demand Response and Energy Efficiency - As dispatchable demand response is used as a nonemergency resource more often, the frequency of dispatch will increase. If the performance diminishes in reaction to the higher frequency of di spatch, system reliability could be affected as other resources may not be available in time to provide the ancillary services or energy required. In many cases, dispatchable demand response resources have not yet been te sted to meet system reliability requirements at higher dispatch frequenc ies. To best measure the potential reliability benefits of DR, it is vital to collect event da ta for Dispatchable, Controllable, Dispatchable Economic DR and Non-Dispatchab le DR. Please refer to the Capacity, Demand and Event Definition section for further discu ssion of these categories.

To incorporate EE into resource planning, the energy efficiency peak demand reduction must be defined so resource planners can evaluate it along with capacity res ources. Care must be exercised to ensure that the estimates are not misused for other applications. Successful

78 IEEE 1547, “IEEE Standard on Interconnection Distri buted Resources with Electric Power Systems.”Emerging Issues & Scenario Analysis

43 2008 Long-Term Reliability Assessment integration of energy efficiency into resource pl anning requires close c oordination between those responsible for energy efficiency and those in bulk system planning to ensure appropriate capacity values are estimated while meeting reliability objectives. A recent NERC report stated 79 : “ For NERC to seriously consider the reliabili ty benefits of EE, th e resources promised by energy efficiency programs mu st be reconciled (measurement/v alidation) on a historical basis with projections. Once this validation occurs, DSMTF proposes to modify Total Internal Demand with projections. ” To best measure the potential reliabili ty benefits of DR, it is vital to collect event data for Dispatchable, Contro llable, Dispatchable Economic DR and NonDispatchable DR.

Plug-in hybrid electric vehicles (PHEV), which can act both as load and mobile storage devices (demand and supply), have the potential to become critical reliability resources – theoretically supporting capacity during times of peak usage a nd drawing charging power from the grid in the evening hours when, for example, more wind ge nerated energy may be available due to wind patterns. This Grid-to-Vehicle (G2V) and Vehicle-to-Grid (V2G) technology may provide a more efficient use of generation capacity. Recent studies identified the impact of PHEV on system capacity requirements and energy use. 80 DR initiatives will support PHEV integration, thereby playing an integral part in the develo pment of future “Smart Grids.” The potential reliability benefits of “Smart Grid” technol ogies on bulk power systems require more study.

79 http://www.nerc.com/docs/pc/d rdtf/NERC_DSMTF_Report_040308.pdf
80 http://my.epri.com/portal/s erver.pt?open=512&objID=243&PageID=223132&cached=true&mode=2

.Emerging Issues & Scenario Analysis

44 2008 Long-Term Reliability Assessment Transmission of the 21st Century

The 21 st century brings new challenges to managing th e bulk transmission syst em that affects the entire electric industry. Change in transmi ssion line design, networ k reinforcements and communications required to accommodate new technologies can have an impact on the reliability of the bulk power system.

Background: The development of new transmission infr astructure and tec hnologies will be critical to North America’s energy future. As these resources are developed, vast improvements to the way operators currently manage and operate the system are beginning to emerge, along with new technologies that will allow planners to more fully utilize existing assets and right-ofways.

New Technologies - Innovative technologies such as Flexible Alternating Current Transmission Systems (FACTS), for example, are making it possi ble increase the amount of power that can be transferred over existing lines by managing voltage suppor t along the line. In addition, planners are now able to optimize the use of right-of- way corridors by converti ng existing transmission lines to higher voltages such as 500 kV a nd 765 kV using conventiona l as well as compact transmission line and High Surge Impedance Lo ading (HSIL) designs. Because High Voltage Direct Current (HVdc) lines t ypically require less right-of-way acquisition than AC lines of similar capacity and with advances in technology, they are also becoming ever more economic for shorter distance power transf ers than before. These designs and technologies can minimize the amount of property require d to route new facilities.

In addition to these innovati ons, advancing “Smart Grid” 81 technology for the bulk power system will enable better visualization of the grid, allowing operators to quickly diagnose system events and respond with greater speed, accuracy, and confidence than ever before. For example, Synchro-phasor technology already installed across much of the grid is already beginning to show marked results, allowing dist urbances to be analyzed in much greater detail than in the past. This increased information and control has the potential to significantly improve reliability.

Infrastructure Additions - As new, location-constrained reso urces (such as wind, wave, nuclear, solar, and clean coal with carbon capture and sequestration) are proposed and built, new transmission infrastructure may be needed to bring energy generated by these resources to demand centers. Transmission may also be needed to support variable resources by providing access to requisite system flexibili ty, such as ancillary services (i.e. spinning reserves, etc.).

Reliability Considerations: For both new bulk power transmission facilities and existing aging transmission equipment for which rejuvena tion may be required due to failures, new transmission technologies and designs can improve bulk power system reli ability if they are properly integrated. These tec hnologies can (1) increase the tr ansfer capability of existing transmission facilities and (2) improve the operating flexibility of the bulk power system.

The integration of intermittent resources w ill pose many challenges including transmission access and use of ancillary services. The large scale addition of demand resources will also impact the transmission system.

81 http://en.wikipedia.org/wiki/Smart_gridEmerging Issues & Scenario Analysis

45 2008 Long-Term Reliability Assessment Controllers and facilities such as Flexible AC Transmission System (FACTS) and HVdc that can respond dynamically to system emergencies will require additional training of system operators. In addition, as part of system rejuvenation, ne w system capabilities can be installed, such as advanced diagnostics and control, to maintain bulk power system reliability. Future coordinated transmission studies can identify potential locations where this 21 st century technology can be reliably implemented. Improvements resulting fr om the deployment of diagnostics, protection and control technologies, includi ng “Smart Grid” equipment, have the potential to measurably improve the reliability of the bulk power system.

“Smart Grid” technology includes not only the a pplication of advanced meter infrastructure (AMI), but also support s advanced asset management addre ssing bulk power system reliability. Use of diagnostics and communications will provide more information about the status of the grid and its components. Increased information and control generated from the smart grid infrastructure increases grid effectiveness and provides more tools for operators tasked with maintaining bulk power system reliability. Dia gnostics can help monitor the condition of a variety of equipment and warn of potential failures a priori. Operators can then, with advanced warning, position the bulk power system and schedule maintenance as required.

For example, the use of phasor measurements units (PMUs) on the bulk power system not only provides a priori information on the grid for pro active measures, it also supports advanced adaptive relaying vital to power the “sma rt grid.” In addition, studies are under way to determine if phasor measurement could reso lve uncertainties surrounding zone 3 relaying through real time analysis of sequence quantities from the phasor vectors.

As new technologies are integrated and the ope ration of the bulk power system becomes more heavily reliant on communications and cyber technology, the vulnerabili ty of the system to cyber attack and intrusion may increase. New technologi es must be designed and deployed with close attention paid to these issues and ongoing testin g and security updating must become routine for system and plant operators. System planners s hould also begin to cons ider whether potential cyber criteria have a place in contingency planning or models.

Cyber security and critical infras tructure protection are two of the key issues facing the reliability of the bulk power system today. Adequately addre ssing these challenges will be critical to the industry’s success over the coming years.Emerging Issues & Scenario Analysis

46 2008 Long-Term Reliability Assessment Water Availability and Use Demand for water is increasing in North America and it is a vital resource requiring careful management. Thermal power plants require sufficient levels and quan tities of water for cooling. Understanding the industry’s role in water use and th e implications of redu ced water availability on bulk power system reliabil ity requires careful study.

Background: Direct human uses of water for drinking or sanitation takes priority over utility and other industrial uses. Most Canadian, 82 and northern WECC utilities have significant reliance on hydro power, and fossil-fueled generating plants depend on water in both the U.S. 83 and Canada for cooling the steam in their condensers. Substantial changes in on-peak capacity of generating plants caused by water restrictions will influence electricity supply adequacy. Transmission requirements will significantly change if replacement power sources are remote from traditional sources serving a given regi on. The strains on transmission are often only revealed through special drought oriented studies of the transmission system.

Fossil plants may need to consider cooling towers instead of once- through cooling water sources. Auxiliary loads for these new cooling towers is often greater than that used for traditional water sources and can reduce overall plant output.

Reliability Considerations: Hydro plants require a minimum head (the difference between the height of the water behind the dam and the height of the turbines) to function. If water flow into a fore bay above the dam is lessened, it may be necessary to pond (limit outflow) water to build up enough head.

In the U.S. most of the attractive hydro genera tion sites have already been fully developed and site new plants is unlikely because of enviro nmental concerns and restrictions. For existing plants, environmental minimum flow restrictio ns may require water releases that bypass hydro turbines to maintain river levels below the da m, essentially rendering the hydro plant useless. Hydro site licenses specify the conditions for the operation of the hydro plant and must be strictly adhered to when operati ng such plants. In Canada, ther e is a considerable amount of hydro still potentially av ailable for development. 84 Because of the size, cost and negative environmental impacts of large dam projects, ho wever, hydro development has been increasingly focused on small-scale projects ( i.e., those with less than 10 MW of generating capacity).

Low levels or flow in rivers, lakes and other bodies of water used for the cooling of plant thermal systems may affect the thermal cycle of electr ic generating plants using such water bodies. Lower flow can affect cooling in two ways. Fi rst, generator output may be limited because of lower water levels at water intakes or intakes being exposed, limiting their effectiveness or even requiring plant shut down. Second, lower water flow can result in higher water temperatures reducing the cooling system’s efficiency an d possibly violating environmental thermal restrictions. Without sufficient water use and thermal discharge rights, large fossil and nuclear plants are also often hard to site. Many plants in recent years have been forced to move to “dry-

82 http://www.ec.gc.ca/Water /en/manage/use/e_use.htm
83 http://water.usgs.gov/watuse/
84 http://www.nwri.ca/thre ats2full/ch2-2-e.htmlEmerging Issues & Scenario Analysis

47 2008 Long-Term Reliability Assessment cooling” concepts dependent on heat exchange with the atmos phere and minimal water use in order to obtain site permission.

NERC will continue to monitor water use issues along with the ongoing research & development. NERC has worked with the De partment of Energy National Energy Technology Laboratory (NETL) 85 on water use 86 (See U.S. Clean Water Act: Coolin g-Water Intake Structure subsection in this section). In addition, substantial amount of re search and development on this topic is being performed by the Electr ic Power Research Institute (EPRI). 87

85 http://www.netl.doe.gov/technologies/coa lpower/ewr/water /power-gen.html

86 http://www.nerc.com/files/NERC_SRA-Re trofit_of_Once-Through_Generation_090908.pdf
87 http://my.epri.com/portal/server. pt?open=512&objID=240&&PageID=350&m ode=2&in_hi_userid=2&cached=trueEmerging Issues & Scenario Analysis

48 2008 Long-Term Reliability Assessment 2009 Scenario Analysis Summary Background: The LTRA preparation includes data and information on projected summer and winter electricity supply and demand conditions for the coming ten-year period, along with reliability self-assessments prepared by each regional entity. These data, information, and assessments form the basis of the NERC reference case presented in the Long-Term Reliability Assessment, for which detailed analysis and discussion follows. The reference case incorporates known policy/regulation changes expected to take effect throughout the studied timeframe assuming that a variety of economic growth, w eather patterns and system equipment behaviors are as expected, usually based on historic performance trends.

Regional Scenario Analysis Plans for 2009: To commence scenario analysis development, in December 2007 the NERC Planning Committee (PC) iden tified and prioritized various resource and transmission impact scenarios for regional and NERC-wide evaluati on, based on input from its subcommittees. Regions proposed study outlin es to be submitted for next year’s 2009 LongTerm Reliability Assessment in conjunction w ith the regions’ normal 2009 – 2018 reference case self-assessment and data submittals. Each region was required to examine one of the following two scenarios:

Scenario #1: Study accelerated in tegration of renewable resources: Around the world, renewable resources have become a significant portion of the generation mix. The available technologies have matured to the po int generation owners and system operators can generally meet federal, state and pr ovincial renewable energy mandates, although penetration may be limited by system integr ation issues, often due to these resources being variable or intermittent in nature. For example, weather patterns of the region/subregion, the variety of renewable s ources, the existing generation mix, and the bulk power system transfer capability with neighboring areas all in fluence the level of penetration that can be achieved. Another cons ideration is ancillary services and system re-dispatch needed to support reliable ope ration to support the le vel of renewables. Scenario Item Specifics Expected Response For this scenario, the regions will asse ss accommodating a minimum of an additional 15% of total energy from new renewable reso urces, above the reference case values, with no more than 5% made up from energy effi ciency. The base year for calculating the energy was set as 2008 to provi de a common reference value. The addition of renewable resources may be ramped at a rate that can be integrated into the system while sustaining bulk power system reliability unt il the end of te n year period.

As part of the data submittal, NERC will be looking for narratives and data similar to the LTRA reference data submittal, including:

− Tabulations of potential cap acity (gross and derated)

− Resource adequacy needs (cont ribution towards capacity marg in with or without the additional resources)

− Renewables/energy efficiency needed to meet the 15% scenario.

− Impacts on reliability, e.g. new transmission lines, back-up capacity, impact on load, etc., and

− Fuel outlook, transmission operational i ssues and reserves (resource adequacy)Emerging Issues & Scenario Analysis

49 2008 Long-Term Reliability Assessment Scenario #2: Scenario selected by the region/sub-region for study in 2009: If there is little or no impact of Scenario #1 on a re gion/subregion, then Scenario #2 will be evaluated. The regions are expected to select a scenario that signifi cantly impacts supply mix, electricity purchases or sa les in the studied region. The em erging issues identified in the 2007 LTRA are potential candidates for this alternate scen ario analysis. The assessment and detail required in the analysis will be consistent with the framework provided for Scenario #1.

Each region’s scenario analysis identifies the impact on reliability and what needs to happen to keep the resulting system reliable. The scenario results, when presented in 2009 will distinguish the key regional challenges arising from the scenario which are different from the reference case

. Analytical studies which have already been or can be performed before May 2009 will be used to bolster this scenario assessment.

Summary of Regional Scenarios: The outlines submitted to NERC were generally consistent with what was requested. Because of the signifi cant effort expected to be required in 2009 to produce these scenario analyses along with a reference case, the regions will build their scenario analyses on existing studies or studies that are already underway. In most instances, this means examining a single point in time ten years in the fu ture rather than year-by-year analysis. Several regions will be building their scenarios from the Joint Coordination Study Group (JCSG). Outlines of scenario study plans proposed by regions were approved by the PC at their June 2008 meeting. 88

Table 6 summarizes each region’s plans for the 2009 scenario analysis.

Table 6: Regional plans for the 2009 Scenario Analysis

Region Scenario Compare to Reference

Case Annual Peak or Point in

Time Peak capacity Energy Fuel Mix Miles of Transmission Operational Challenges

ERCOT Wind resources for 15% of new
energy Yes Annual peak to

2018 Yes Yes Yes Yes

FRCC Renewable resources for 15% of new energy Yes Annual Peak to

2018 Yes Yes Yes Yes

SERC Southeast Generation Fuel Shift Yes Point in Time 2019 Yes No Yes Yes

WECC Renewable resources for 15% of new energy Will
compare capacity

mix Point in Time 2017 Yes Yes, but can’t
compare energy to reference case, will compare by fuel Approximate Yes

MRO Yes Yes Yes Yes Yes NPCC Yes Yes Yes Yes Yes RFC Yes Yes Yes Yes Yes

SPP Joint Coordinated Study Group: Wind resources for at least 15% of
new energy Yes Point in Time 2018 Yes Yes Yes Yes

88 The draft proposals can be found as Item 5.b Reliability Assessment Subcommittee Report, Appendix I of the Planning

Committee’s June 4-5, 2008 Draft Agenda at http://www.nerc.com/ docs/pc/Update_2_PC_Ag enda_June%204-5-2008.pdfReliability Historical Trends

50 2008 Long-Term Reliability Assessment 

### Table 7: Bulk Power System Event Classification Scale

Category 1: An event results in any or combination of:

a. The loss of a bulk power transmission component

beyond rec ognized criteria, e. g. single-phase line-toground fault with delayed clearing, line tripping due to growing trees, etc. b. Frequency below the Low Frequency Trigger Limit

(FTL ) m ore than 5 minutes.

c. Fre quency above the High FTL more than 5

m i nutes. d. Partial lo ss of dc converter station (mono-polar

ope rat ion)

e. Inter-area oscillations Ca te gor y 2 : An event results in any or combination of:

a. The loss of multiple bulk power transmission

com pone nts b. System separation with no loss of load or generation

c. Speci al Protection Scheme or Remedial Action

Scheme misoperation d. The loss of generation (between 1,000 and 2,000

M W in the Eastern Interconnection or Western Interconnection and between 500 MW and 1,000 MW in the ERCOT Interconnection).

e. The l oss of an entire generation station or 5 or more

gene rators f. Th e loss of an entire switching station (all lines, 100

kV or above)
g. Complete loss of dc converter station Category 3: An ev ent results in any or combination of:

a. The loss of generation (2,000 MW or more in the

Eastern Interconnection or Western Interconnection and 1,000 MW or more in the ERCOT Interconnection). b. The loss of load (less than 1,000 MW)

c. Syste m separation or islanding with loss of load or

gene ration (less than 1,000 MW). d. UFLS or UVLS operation. Category 4: An ev ent results in any or combination of:

a. System separation or islanding of more than 1,000

MW of load b. The loss of load (1,000 to 9,999 MW) Category 5: An ev ent results in any or combination of:

a. The occurrence of an uncontrolled or cascading

blackout b. The loss of load (10,000 MW or more) 

# Reliability Historical Trends

Introduction Historical trends of reliability are provided for the first time in NERC’s 2008 Long-Term Reliability Assessment. Understanding these trends can lead to improved bulk power system reliability. For example, indication of ongoing threats to reliability can stimulate pre-emptive action in future designs towards maintain bulk power system reliability.

There are two basic, functional components of reliability: operating reliability and adequacy.

• Operating reliability is the ability of the interconnected electric system to withstand sudden disturbances such as electric short circuits or unanticipated loss of system components 89

.

• Adequacy is the ability of the electric system to supply the aggregate electricaldemand and energy requirements of the enduse customers at all times, taking into account scheduled and reasonably expected unscheduled outages of system elements. 90

The purpose of this section is to report historic trends in operating reliability and adequacy for the Eastern Interconnection. 91

Trends in Operating Reliability

Disturbance Event Trends - NERC classifies system events according to five categories with Category 5 being the most severe (See Table 7). Based on data from NERC’s Disturbance Analysis database, Figure 20 depicts all Category 2 through 5 system events for 2002- 2007. 92 The events caused by factors other than the performance of the transmission system are not included.

89 Definition of oper ating reliability http://www.nerc.com/~members/OC_PC/ALR/ as of December 12, 2007
90 NERC Glossary of Terms ftp://www.nerc.com/pub/ sys/all_updl/standards/rs/Glossary_02May07.pdf
91 This is the inaugural year for incorporating reliability metric s in the Long-Term Reliability Assessment. Available data for t his

assessment is solely from th e Eastern Interconnection.
92 See http://www.nerc.com/pag e.php?cid=5%7C63%7C252 for detailed definitionsReliability Historical Trends

51 2008 Long-Term Reliability Assessment Though the performance is mixed, w ith no discernable trends, a number of observations can be made form this data: 1) While the number of Category 2 events increa sed in 2005, the number of events in Category 3 has continued a steady decline between 2002 and 2006, 2) Category 4 events were up in 2005 and 2007, afte r declining in 2004 and 2006.

These data clearly indicate that gaps exist be tween actual performance and expected system behavior under actual operating conditions. Ulti mately the most important measure of operating reliability is that the number of events declines towards zero.

Fi g ure 20: Annual Number of Disturbance Events b y Severity

0 10 20 30 40 50

Category 5 0100000 Category 4 4203121 Category 3 22 20 19 12 11 13 10 Category 2 17 16 8 22 17 15 15 2002 2003 2004 2005 2006 2007 2008 (Jan-Jul)

Figure 21 summarizes the contributi on of leading causes to the tota l number of events in 2006. Of the 29 events in 2006, over half were caused by equipment failu res, nine by system protection misoperations, and four by personnel errors. Defin itions of these cause codes are in Table 8. In addition, the 2008 disturbances have added for comparative purposes.

Equipment Failure Events caused by the failure of equipment. Use this co de only when the equipment failed even though it was operated within design specifications. The failed equipment could be (i) a component of an Element (such as a failed insulator), or (ii) part of an AC Su bstation (such as a failed circuit breaker),
Protection Misoperation Events caused by relay and/or control initiated operatio ns when not desired or the failure to operate when desired. This category also includes incorrect relay or control settings that do not coordinate with other protective devices.

Human Error Events caused by any inco rrect action traceable to employees and/or contractors for companies operating, maintaining, and/or providing assistance to the Tran smission Owner will be identified and reported in this category. Also, any human failure or interpretation of sta ndard industry practices and guidelines that cause an outage will be reported. 

### Table 8: Definition of Cause CodesReliability Historical Trends

52 2008 Long-Term Reliability Assessment More work is required to examine the root causes of these events, including the significance of protection system misoperations, th e effects of human activities ( both by utility workers and the public), as well as the influence of equipment failures on the reliability performance. The objective is to recognize and eliminate unr eliable actions and at-risk conditions. 93

Figure 21: Reported Events by Cause Codes

0 10 20 30 40 50 60

Equipment Failure Protection Misoperations Human Error Others

Cause CodesPercent (%)

2006
2007

As is evident in Figure 21, one of the key cate gories identified as a major cause of system disturbances under analysis has been protecti on system misoperations. Every major system disturbance since the 19 65 Northeast Blackout has been caused or exa cerbated by protection system performance ranging from protection sy stem coordination to relay loadability.

NERC’s efforts in the Protection System Revi ew Program, launched in 2005 following the 2003 Blackout, have materially reduced relay loadability as a causal or contributory factor in system disturbances; only three loadability instances have occurred since the program was initiated, and only one of those was on the bulk power system

That program’s success led to the development a new initiative in 2007 focused on improving more aspects of protection system performan ce and, thereby, overall sy stem reliability. The initiative continues the work in relay loadabi lity through the development of Standard PRC-023 – Transmission Relay Loadability (awaiting FERC approval), and includes efforts in protection system reliability (redundancy), relay coordination, maintenance, and the coordination of system protection with generator protection and controls.

Analyses of system disturbances over the last year show a trend of ge neration turbine controls and voltage sensitivity of generator auxiliary systems that caused unexpected loss of generation or runbacks of output. In seve n disturbances, the output of 28 generators was lost due to unexpected turbine control action, and an add itional 13 generators tripped due to voltage sensitivity. For instance, in th e February 2008 south Florida disturbance, after the fault had been

93 The 2007 event root cause trend is not yet available. A number of 2007 disturbance events are still being analyzedReliability Historical Trends

53 2008 Long-Term Reliability Assessment cleared, an additional 11 genera tors (1,500 MW) tripped off line du e to these problems, further exacerbating the disturbance. 94

NERC is in the process of expanding the protec tion system performance initiative to address these issues in conjunction with the IEEE. This enhanced initiative will involve a number of NERC standards projects and increased efforts to raise the profile and priority of protection system performance in the industry

Frequency Excursion Occurrence for the Eastern Interconnection- The ability to maintain load-generation balance within acceptable limits is a key performance indicator to measure real power balancing control performance. Prolonged sy stem recovery from a disturbance or normal operating frequency excursions (e ither high or low) could indicat e the need for new methods of system management. Decline in frequency response or degradat ion of regulation and reserve sharing capability are performance issues worthy of attention, and NERC is currently developing a Standard Authorization Request. 95 For example, for every 0.1 Hz reduction in frequency response, represent 70 MW of reduction in au tomatic generation control (AGC). Frequency excursions on the grid led to the unexpected lo ss of over 20 generating un its in eight separate disturbances since August 1, 2007.

Figures 22 and 23 present low frequency excursion trends in the Eastern Interconnection indicating significant changes have been taking place during the last six years. From 2002 to 2007, the number of on-peak low frequency events has more than tripled, growing from 186 in 2002 to 675 in 2007; the number of off-peak low frequency events increased from 67 in 2002 to 426 in 2007.

While there is no apparent trend in the longer te rm (> 2 minute AGC-relate d) events, the bulk of the excursions identified are short-term step ch anges in frequency that are an indicator of a decline in primary control (governor response). While these tre nds do not directly suggest a deterioration of system performan ce, it is a reliability indicator that bears close monitoring. The NERC Operating Committee’s Resources Subcomm ittee plans to analyze Interconnection real time balancing control performance and identi fy root cause of out-of-limit operation in 2008.

94 As a result of this finding, NERC issued an industry ad visory to all registered Generation Owners, Generation

Operators, Planning Authorities, Planning Coordinators , Transmission Operators, and Reliability Coordinators outlining the issue and urging further coordination. NERC’s advisory is available at: http://www.nerc.com/fileUploads/File/Eve nts%20Analysis/A-2008-06-26-01(1).pdf and http://www.nerc.com/fileUploads/File/E vents%20Analysis/A-2008-06-26-02.pdf

95 http://www.nerc.com/docs/st andards/sar/SAR_Frequency_Response_Final_Draft3_30Jun07.pdfReliability Historical Trends

54 2008 Long-Term Reliability Assessment Figure 22– Low Frequency Events

Figure 23 – Low Frequency vs. Duration by YearReliability Historical Trends

55 2008 Long-Term Reliability Assessment The majority of the low frequency events are coin cident with Time Error Corrections. Over half of the events occur during Time Error Corrections even though the eastern interconnection is in correction only about 15% of the time. The even ts also occur just after the primary scheduling periods (06:00 to 22:00).

Figures 24 and 25 present high frequency excursion trends in the Eastern Interconnection. From 2002 to 2007, the number of on-peak high frequency events has increased from 199 to 315; the number of off-peak high frequency events has va ried over the years and remained stable through 2006 and 2007. The frequency data from the We stern Interconnection did not indicate any significant changes within the last few years.

Figure 24 –High Frequency EventsReliability Historical Trends

56 2008 Long-Term Reliability Assessment Figure 25 – High Frequency vs. Duration by Year

Improvements to frequency even t analysis include analyzing outlier days using statistical pr ocess control theory. Generally very noisy days are an indicati on of something identifiable that is impacting reliability. Significant changes in weekly frequency variation may indi cate wide-area or sustained balancing issues. Highly vari able frequency often occurs during grid upsets or when operato rs initiate ra pid generation changes to correct congestion. Measuring noise around a target frequency therefore can be a va luable indicator of potential reliability considerations. 96

Trends in Adequacy

Capacity and Energy Emergency Events - The total number of capacity and energy emerge ncy events between 2002 and 2007 in NERC’s Reliability Coordinator Information System (RCIS) database are grouped into three categories (A1, A2 and A3) based on Standard EOP- 002-0 (Capacity and Energy Emergencies). Note that Categorie s A1 and A2 are, in effect, operating procedures used to a void the interruption of firm customer load 97 as defined in Category A3 (See Tables 9 and 10 along with Figure 26).

96 http://www.asq.org/quality-pro gress/2008/08/statistical-process- control-spc/bright-idea.html
97 The categories for capacity and emergency events based on Standard EOP-002-0, require revision to specifically account for

higher, more regular use of demand response as a capacity resource. For example, the current definitions for Category A2 Category A1: No disturbance events and all available resources in

use.

a. R equired Operating Reserves

can not be sustained. b. No n-firm whol esale energy

sales have been curtailed. Category A2: Load management procedures in effect.

a. Public appeals to reduce

demand. b. Vo ltage reduction.

c. Int erruption of non-firm end

use loads per contracts. d. Dem and-side management.

e. Utility lo ad conservation

measures. Category A3: Firm load interruption imminent or in
progress. 

### Table 9: Categories for Capacity and Emergency EventsReliability Historical Trends

57 2008 Long-Term Reliability Assessment Table 10 – Capacity and Energy Emergency Event Trend

Categories 2002 2003 2004 2005 2006 2007 A3 18 36 15 21 5 20 A2 123 29 20 62 5 50 A1 130 43 31 102 14 103

The categories for capacity and emergency ev ents based on Standard EOP-002-0, however, require revision to specifically account for highe r, more regular use of demand response as a capacity resource. Current definitions for Cate gory A2 include the operation of demand-side resources as a capacity and emerge ncy event, while, in some areas , current industry practice also includes the resource as part of normal, non-emergency operations.

Fi g ure 26: Number of Ener gy Emer g enc y Alerts by Year (2002-2007)

0 20 40 60 80 100 120 140

2002 2003 2004 2005 2006 2007 A1
A2
A3

The 2002 – 2007 quarterly plots are provided in Figure 27. There is a seasonal pattern to the events over the year, with the 2006 summer weather particularly mild compared to other years. A clear periodicity is evident between the summer months in the third qua rter (Q3) and winter months represented in the first quarter and fo urth quarter (Q1 and Q4) of each year. The monthly annual breakdown of quarters is defined as:

• Q1 – Winter (January, February, March)

• Q2 – Spring (April, May, June)

include the operation of demand-side resour ces as a capacity and emergency event, while current industry practice includes the resource as part of norma l, non-emergency operations.Reliability Historical Trends

58 2008 Long-Term Reliability Assessment • Q3 – Summer (July, August, September)

• Q4 – Fall/Early Winter (October, November, December)

Analysis has indicated that ex treme weather, short- term load forecast errors and unplanned generation outages are the main causes of the emergency events.

Figure 27 – Quarterly Capacity a nd Energy Emergency Event Trend

Number of Energy Emergency Alerts by Quarter (2002-2007)

0 10 20 30 40 50 60 70 80 90 100

Q1
02 Q2
02 Q3
02 Q4
02 Q1
03 Q2
03 Q3
03 Q4
03 Q1
04 Q2
04 Q3
04 Q4
04 Q1
05 Q2
05 Q3
05 Q4
05 Q1
06 Q2
06 Q3
06 Q4
06 Q1
07 Q2
07 Q3
07 Q4
07 A1

A2

A3

Transmission Loading Relief (TLR) - The TLR 98 process allows reliability coordinators to operate the system within real-time reliability limits while respecting transmission service reservation priorities. 99 Bulk power system customer request s for transactions on Firm Point-toPoint Transmission Service paths that exceed the amount that the system can transfer without violating operating limits is an indication that more transmission may be needed for economic purposes. Reliability Coordinators issue Transmi ssion Loading Relief (TLR) directives in which transaction rights for specific transactions are revoked until system conditions allow their resumption. These TLRs have different levels w ith Level 6 being the mo st severe (See Table 11). Trends towards increas ing number of TLR Level 5 100 or higher indicate that certain parts of the system are at their limit to supply request ed transfers within reli ability constraints (see Figure 28).

98 TLRs are not used in a number of syst ems where centralized security constr ained economic dispatch is employed.
99 TLR procedure http://www.nerc.com/files/IRO-006-3.pdf
100 All transactions as prescribed by TLR Level 5b are consider ed point-to-point across the interface and they can include native

load, network service and point-to-point. Hence there is no diffe rentiation and they are comparably treated when it comes to curtailment as stated by FERC pro-forma tariff in Section 13.6 (which starts on sheet no. 47).Reliability Historical Trends

59 2008 Long-Term Reliability Assessment Number of Level Five & Higher TLRs by Year (2002 - 2007)

0 20 40 60 80 100 120 140 160 180

2002 2003 2004 2005 2006 2007

It is necessary to unders tand the drivers behind congestion to determine if it represents a reliability or economic issue. If congestion is increasing because the transmission system is being fully used to optimize economic dispatch they are not a reliability concern. If congestion is occurring because transfers are needed to serve load, then this variety of congestion is an indicator of reliability concerns. TLR can indicate enforcing the boundaries of economic market activity or they can suggest reliability concerns. TLR below level 5 suggest that non-firm transactions are encountering system limits. While the network limits are rooted in reliability the drivers behind them are economic in nature.

Figure 28 shows that the number of Level 5 and higher TLRs has continued to increase from 2004 to 2007 at a rate more than 15% each year. In 2007 the number of Level 5 TLRs more than doubled over the 2006 figures. The duration of Level 5 TLRs increased from 348 hours in 2006 to 990 hours in 2007.

101 TLR procedures shown apply only to the Eastern Interconnection ( http://www.nerc.com/page.php?cid=5%7C67%7C205 ) Table 11: Transmission Loading Relief (TLR) Procedure: T LR Levels 101

TLR Level Reliability Coordinator Action

1 Notify Reliability Coordinators of potential System Operating Limit (SOL) or Interconnection Reliability Limit (IROL) violations.

2 Hold Tran sfers at present level to prevent SOL or IROL violations.

3a Reallocation of Transmission Service by curtailing InterchangeTransactions using Non-firm Pointto-Point Transmission Service to allow Interchange Transactions using higher priority Transmission Service.

3b Curtail I nterchange Transactions using Non-firm Point-to-Point Transmission Service to mitigate an SOL or IROL violation.

4 Reconfigure t ransmission system to allow Transactions using Firm Point-to-Point Transmission Service to continue.

5a Reallocation of Transmission Service by curtailing InterchangeTransactions using Firm Point-toPoint Transmission Service on a pro rata basis to allow additional Interchange Transactions using Firm Point-to-Point.

5b Curtail In terchange Transactions using Firm Point-to-Point Transmission Service to mitigate an SOL or IROL Violation

6 Emergency Procedures

0 TLR Concluded
For information about the TLR procedure and transmission service priorities, please refer to NERC reliability standard. Standard IRO-006-3 — Reliability Coordination — Transmission Loading Relief htt p://www.nerc.com/files/IRO006-3.pdf Figure 28 – Trends of Level 5 & Higher TLRsReliability Historical Trends

60 2008 Long-Term Reliability Assessment Reliability Coordinators (RCs ) also reported forced generation and transmission outages significantly increased in 2007 which may have triggered increased use of Level 5 TLR procedures. To show the progres sive use of TLR Level 5, they ar e further divided into Level 5a and Level 5b.

Figure 29 indicates the number of Level 5 TLR s issued by three RCs (SPP, MISO and ICTE) increased significantly from 2005 to 2007. 102 The higher number of TLR events in the SPP market demonstrates a greater use of the transm ission capacity while maintaining reliability (See Table 12). Where other markets may allow re-dispa tch without a TLR to maintain reliability of the transmission system, SPP’s market protocol s require calling a TLR for each congestion situation

Figure 29: Level 5 TLRs for the years 2002- Sep 2008

0 10 20 30 40 50 60 70 80 90 100

2 0

02 2 0

0

3 2 0

04 2 0

0

5 2 0

06 2 0

0

7

2

0

08

(J

a

n

- Se p )# of Incidents VACS

SWPP

TVA

PJM

MISO

ONT

ICTE 5a

5b

Note not all regions use TLRs to manage their el ectricity delivery systems and markets, and their use is neither an absolute nor a broadly appl icable indicator of th e need for transmission reinforcements.

102 Note that those RCs not mentioned in the Eastern Inte rconnection did not issue TLRs during the 2002-2007 timeframeReliability Historical Trends

61 2008 Long-Term Reliability Assessment Much of the Level 5 TLRs increased in the Southwest Power Pool (SPP), which includes SWPP and ICTE RCs. SPP implemented its Energy Imbalance Market (EIS) on February 1, 2007. Since the implementation of the EIS Market, SPP has experienced an increase in the number of TLR events primarily due to its operating protocols. SPP’s market protocols require that the SPP Reliability Coordinator issue a TLR event in accordance with NERC TLR requirements every tim e congestion is experienced in the market footprint. First, SPP’s market protocols require calling a TLR to publicize the fact that SPP is e xperiencing conges tion. Second, it ensures that the other parties contributing to the congestion equitably share in achieving the necessary relief.

Prior to implementation of the market, many constrained flowgates were resolved with generation re-dispatch internal to a Balancing Authority and in many of those instances, TLR was not declared. Now with the EIS Market operational, the same flowgates are reliably managed through TLR and market re-dispatch. Additionally, the structure of the market greatly facilitates more efficient and effective use of the network. Because the market more fully uses transmission capacity, more TLRs are experienced now than under the previous pre-mark et structure which only allowed bilateral and network transactions to use transmission capacity. 

### Table 12: SPP’s Use of TLRs Application of TLR represent is one method to relieve potential or actual loading. Differences exist on how regions approach congestion management. For example, WECC uses an Unscheduled Flow Mitigation Plan as an equivalent load relief procedure for use in the Western Interconnection 103 . In market structures, redispatch is commonly used as an efficient measure to reduce congestion in transmission systems. MISO 104 and PJM 105 have LMP markets run a security constrained dispatch model which determines the lowest cost generation dispatch without exceeding any transmission limitations, thereby significantly reducing the number of TLRs called.Similarly, ERCOT employs a flowbased/zonal approach to manage forward markets and congestion. 106

Potential Reliability Metric Enhancements

While TLRs and EEAs were initially developed to help manage/ensure adequacy, they are being used more and more as triggering events for indi vidual entity market deci sion points. This blurs the lines between reliability tools and market driv ers. It also blurs the link between the state of reliability and the use of TLR Level 5 and EEA. Therefore, TLR and the EEA metrics may need improvement for adequacy trends analysis.

Further, the RMWG may also study the correlation between A1 /A2, CPS1/CPS2, and balancing area ACE limits (BAAL) with frequency performa nce and inadvertent interchange performance Frequency is also linked to schedule ramp performance, frequency bias performance, ACE management, and contingency response. Also, Time Error does provide an indication of operational discipline along with inadvertent interchange and Area Interchange Error. The RMWG should evaluate these and other potential metrics to measure operating reliability trends.

103 This procedure has been accepted by FERC and adopted by NERC Standards http://www.nerc.com/files/IRO-STD-006-0.pdf

.

WECC USFMP: http://www.wecc.biz/documents /library/UFAS/UFAS_mitigation_plan_rev_2001-clean_8-8-03.pdf
104 More information on MISO’s congestion mana gement procedures can be found in the 2007 STATE OF THE MARKET

REPORT FOR THE MIDWEST ISO at : http://www.midwestiso.org/publish/Document/24743f_11ad9f8f05b_- 7b890a48324a/2007%20MISO%20SOM%20Report_Final%20Text.pdf?action=download&_property=Attachment
105 PJM’s congestion ma nagement procedures can be found in the 2007 STATE OF THE MARKET REPORT FOR THE PJM INTERCONNECTION at http://www2.pjm.com/marke ts/market-monitor/downloads/mmu-reports/2007-somvolume2-sec7.pdf
106 ERCOT’s congestion management procedures, entitled 2007 STATE OF THE MARK ET REPORT FOR THE ERCOT WHOLESALE ELECTRICITY MARKETS http://www.puc.state.tx. us/wmo/documents/annual_ reports/2007annualreport.pdfRegional Reliability Assessments

62 2008 Long-Term Reliability Assessment 

# Regional Reliability Assessments

Background Regional Resource and Demand Projections - The figures in the region al self-assessment pages show the regional historical demand, projected demand growth, capacity margin projections, and generation expansion projections reported by the regions for the coming ten-year period.

Capacity Fuel Mix - The regional capacity fuel mix charts show each region’s relative reliance on specific fuels 107 for its reported generating capacity. The charts for each region in the regional self-a ssessments are based on the most recent data available in NERC’s Electricity Supply and Demand database.

Capacity fuel mix evolution in the U.S. for peak Net Capacity Resources during the 2008-2017 timeframe show increased coal, gas, wind and nuclear plant (See Figure 30).

Nuclear new-build Net Capacity Resources represented in the U.S. 10- year fuel-mix comparison includes 1) FRCC: 2,900 MW, 108 2) RFC: 5,000 MW, 109 and 3) SERC: 1,200 MW. 110 In addition, a number of new-build nuclear plants have been identified in regional reliability assessments (see Regional Reliability Assessment section), though their capacity is not represented in the fuel mix of Net Capacity Resources. Regions considered the following nuclear capacity as part of their Total Potential Resources: 1) SERC: 6,800 MW, 111 and 2) ERCOT: 8,400 MW. 112

107 Note: The category “Other” may include capacity for which a fuel type has yet to be determined.
108 Levy 1 & 2 (1,173 MW each 2016-2017)
109 1,600 MW (PPL Corporation, 2013), 1,640 (Conste llation Energy, 2015) and 1,563 MW (DTE Energy, 2017)
110 1,182 MW (Central in 2012)
111 3,102 MW (Delta in 2015), 1,650 MW (Gateway, 2017), 1,100 MW (Southeas tern, 2017) & 1,100 MW (VACAR, 2016)
112 Comanche Peak 3 & 4 at 3,200 MW, STP 3 & 4 at 2,700 MW & Victoria City Nuclear at 3,200 MW NERC-US Projected Fuel-Mix Change for Net Capacity Resources 2008-2017

0 10,000 20,000 30,000 40,000 50,000

Gas Co al Nuclear Wind

D ual Fuel OtherΔMW

NERC-CAN Projected Change for Net Capacity Reources FuelMix 2008-2017

-8,000 -6,000 -4,000 -2,000 0 2,000 4,000 6,000 8,000

Gas Coal Hydro Nuclear Wind OtherΔMWRegional Reliability Assessments

63 2008 Long-Term Reliability Assessment Canada shows a substantial drop in coal-fired and nuclear resources (s ee Figure 31). Ontario expects to retire 6,400 MW of coal-fired resources across f our facilities a nd 15 units by 2014, fulfilling the commitments called for in the Onta rio Power Authority’s Integrated Power Supply Plan. 113 In addition, the Ontario sub-region forecasts nuclear reductions resulting from of the removal of one unit in 2015 (797 MW) and two units in 2016 (1,364 MW total). Decisions have not been made at this time about refurbishment or replacement of these nuclear units. Increases in Canada of Net Capacity Resources from ga s, hydro and wind plant round off the remainder of the fuel mix during the ten-year assessment.

The NERC-wide fuel mix is found in Figure 32.

NERC - Projected On-Peak Capacity by Fuel-Mix

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000

Coa l Ga s Hydro Nucl ear Dual Fuel O i l

P

u mped St

or

age Wind OtherMW 2008

2017

Regional Demand & Resour ce Projections 2008-2017

Resources and Fuel Mix- To improve consistency and increase the granularity and transparency of how regional resource projections are repr esented in NERC assessment reports, NERC’s Planning Committee approved new categories for cap acity resources and capacity purchases and sales. The previously-used categories of “comm itted” and “uncommitted” resource designations used in the 2007 Long-Term Relia bility Assessment were replaced with enhanced categories: 1) Existing; 2) Planned; 3) Proposed Capacity; and 4) Ca pacity Purchases & Sales. 114

To better understand the resource acquisition strategy and the relative resource certainty, a layered resource graph, deploying the more detailed resource cate gorization, can show the risk profile for future resources to meet capacity marg ins. These graphs can be used to trend capacity margins for comparative assessment against refere nce margin levels to identify areas where and when additional resources may be required.

113 http://www.powerauthority.on.ca/Pa ge.asp?PageID=924&SiteNodeID=320

114 See the Capacity, Demand & Event Definitions section for detailed definitions.Regional Reliability Assessments

64 2008 Long-Term Reliability Assessment Figure 33 shows the NERC-wide 2008-2017 summer peak demand capacity margins. The NERC Reference Margin Level capacity margin level of 13 percent is used to identify approximately when additional resources may be needed. While the overall NERC-wide capacity margins appear adequate for most resource scenarios, the results for individual regions/subregions vary widely, discussed in the regional self-a ssessment sections.

NERC - Summer Capaci ty Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

NERC Reference Margin Level Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

Figure 33 shows NERC-wide the ex isting capacity sufficiently meets the NERC Target Margin Level through 2015. However, this includes the combination of a predominately summer peaking system (NERC-US) and one that, with th e exclusion of Ontario, is a winter peaking system (NERC-Canada). Figures 35 and 35 shown below show NERC -US and NERC-Canada for their respective peak ing season. The NERC Reference Margin Level is different for the U.S. (13%) a predominately thermal system, and Canada (9%), a predominately hydro system. 115

115 Each region/subregion may have their own specific margin level based on load, generation, and transmission characteristics or regulatory requirements. No NERC-wide minimum margin standa rd or criteria exits. If provided in the data submittals, the regional/subregional Target Capacity Margin level is reflected as the NERC Reference Margin Level. If not, NERC assigned a 13 percent capacity margin for predominately thermal systems and for predominately hydro systems, 9 percent. Figure 33: NERC Summer Capacity Margin 2008-2017 ComparisonRegional Reliability Assessments

65 2008 Long-Term Reliability Assessment NERC CAN - Winter Capacity Margin Comparison

-20% -10%

0% 10% 20% 30% 40% 50% 60%

2008/ 09 20 0 9/

10 201 0/

11 201 1/

12 201 2/

13 2013/14 2014/15 2015/16 2016/17 2017/ 18Margin (%)

NERC Reference Margin Level Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources Figure 34: NERC-US Summer Capacity Margin 2008-2017 Comparison

Figure 35: NERC Canada Winter Capacity Margin 2008-2017 Comparison NERC US - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

NERC Reference Margin Level Existing Certain Net Capacity Resources Adjusted Potential Resources
Total Potential ResourcesRegional Reliability Assessments

66 2008 Long-Term Reliability Assessment Figure 36 : NERC US Capacity vs. Total Internal Demand

– Summer Peak Demand - The peak demand projections shown in this report’s tables and charts represent an aggregate of weather-normalized projections re ported by the regions. In some cases, these regional aggregations do not take into account the regional diversity among the various regional participants’ peak demands, which, depending on the geographical size, could significantly influence the capacity margin comparisons. Howeve r, in other cases, as regions can be widespread, resources would not be deliverable, and sub-regional analysis is more meaningful.

The NERC Load Forecasting Working Gro up (LFWG) develops bandwidths around the aggregate U.S. and Canadian demand projections to account for uncertainties inherent in demand forecasting (see the Capacity, Demand & Event Definitions section) 116

.
For the high demand projection, NERC-wide cap acity margin appears adequate through the study timeframe when considering Adjusted Po tential Resources. However, Net Capacity Resources fall short for this high demand for ecast in 2013 when considering Net Capacity Resources.

The Total Internal Demand 117 growth equates to a ten-year av erage annual peak demand growth in the U.S. for 2008–2017 (See Figure 36) of 1.7 pe rcent in the summer and 1.7 percent in the winter, representing a 0.2% increase co mpared to last year’s report.

NERC US Capacity vs Demand - Summer

500 600 700 800 900 1,000 1,100

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection
Adjusted Potential Resources Net Capacity Resources

In Canada, the ten-year average annual peak demand growth is 0.8 percent in the summer and 0.9 percent in the winter or 0.1 % higher than last year’s repor t (see Figure 37). The average annual growth in the “high” and “low” band U.S. summer peak demands are 2.8 percent and 0.4 percent, and in Canada winter peak demand band s are 1.8 percent and -0.1 percent, respectively.

116 For the full report, see http://www.nerc.com/docs/pc/lfwg/NERC_2008-2017_Regional_Bandwidths.pdf
117 Note that Total Internal Demand includes the affect of ener gy efficiency, but does not incl ude demand response, the impacts

of both are included in Net Internal DemandRegional Reliability Assessments

67 2008 Long-Term Reliability Assessment For the high demand projections, Canada appears ad equate for either the Adjusted Potential or Net Capacity Resources.

Figure 37: NERC-Canada Capacity vs. Total Internal Demand – Winter Peak

N e t C apa c i t y R

e s ou r c e s

Tables 13a through 13f are the es ti m a ted Resources, De m a nds and Margins representing a subset of the data s ub m itted to NERC. K e y years of 2 008 sum m e r , 2008/200 9 W i nter, 2 0 12 sum m e r , 2012/2013 W i nter and 2017 summer a nd 2017/2018 winter for peak conditions are provided

. Year-t o

- year actual de m a nd growth rate s can v a ry due to variations in econo m ic condition s and weather. Also, actual de m a nds are not corrected for weather or othe r conditions that deviate from
t h e for eca s t a ssu m p ti ons. NERC CANADA Capacity vs Demand - Winter

60 70 80 90 100 110 120 130

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection Adjusted Potential ResourcesRegional Reliability Assessments

68 2008 Long-Term Reliability Assessment Table 13a: Estimated 2008 Summer Margin s (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)
United States
ERCOT 6 3, 725 71,639 72,503 72,503 72,503 11.0% 12.1% 12.1% 12.1% 11.1%
FRCC 44,417 53,077 53,552 53,553 53,552 16.3% 17.1% 17.1% 17.1% 13.0%
MRO 41,260 46,363 47,875 48,083 48,378 11.0% 13.8% 14.2% 14.7% 13.0%
NPCC 58,371 69,740 72,105 72,105 72,275 16.3% 19.0% 19.0% 19.2%

New England 26,150 30,950 31,131 31,131 31,301 15.5% 16.0% 16.0% 16.5% 13.0%
New York 32,221 38,790 40,974 40,974 40,974 16.9% 21.4% 21.4% 21.4% 13.0%
RFC 177,200 213,787 213,787 213,806 213,806 17.1% 17.1% 17.1% 17.1%

RFC-MISO 61,200 70,076 70,076 70,095 70,095 12.7% 12.7% 12.7% 12.7% 12.8%
RFC-PJM 119,700 141,542 141,542 141,542 141,542 15.4% 15.4% 15.4% 15.4% 12.8%
SERC 198,522 235,136 235,485 263,476 264,659 15.6% 15.7% 24.7% 25.0%

Central 42,163 49,725 49,725 54,332 55,515 15.2% 15.2% 22.4% 24.1% 13.0%
Delta 27,936 30,012 30,012 41,616 41,616 6.9% 6.9% 32.9% 32.9% 13.0% Gateway 19,105 23,711 23,711 27,751 27,751 19.4% 19.4% 31.2% 31.2% 13.0% Southeastern 48,215 57,466 57,466 63,266 63,266 16.1% 16.1% 23.8% 23.8% 13.0%
VACAR 61,103 74,222 74,571 76,511 76,511 17.7% 18.1% 20.1% 20.1% 13.0%
SPP 43,056 48,993 50,109 58,514 58,514 12.1% 14.1% 26.4% 26.4% 13.0%
WECC 137,925 166,508 169,876 169,880 171,184 17.2% 18.8% 18.8% 19.4% 12.1%

A Z-NM-SNV 30,996 35,135 36,903 36,907 36,907 11.8% 16.0% 16.0% 16.0% 11.7%
CA-MX US 57,507 64,847 69,714 69,714 71,438 11.3% 17.5% 17.5% 19.5% 13.3%
NWPP 37,778 53,376 50,505 50,505 50,518 29.2% 25.2% 25.2% 25.2% 11.9%
RMPA 12,043 13,302 13,702 13,702 13,702 9.5% 12.1% 12.1% 12.1% 10.5%

Total - US 764,476 905 ,243 915,292 951,920 954,872 15.6% 16.5% 19.7% 19.9% 13.0%

Canada
MRO 5,886 7,594 7,600 7,600 7,600 22.5% 22.6% 22.6% 22.6% 13.0%
NPCC 48,706 65,118 65,417 65,406 65,406 25.2% 25.5% 25.5% 25.5%

Maritimes 3,137 5,827 5,827 5,816 5,816 46.2% 46.2% 46.1% 46.1% 13.0%
Ontario 24,351 28,194 28,493 28,493 28,493 13.6% 14.5% 14.5% 14.5% 14.5%
Quebec 21,218 31,097 31,097 31,097 31,097 31.8% 31.8% 31.8% 31.8% 9.1%
WECC 17,907 21,687 21,995 21,995 21,995 17.4% 18.6% 18.6% 18.6% 10.2%

Total - CAN 72,499 9 4,399 95,012 95,001 95,001 23.2% 23.7% 23.7% 23.7% 13.0%

Mexico WECC CA-MX Mex 2,223 2,789 2,540 2,540 2,540 20.3% 12.5% 12.5% 12.5% 12.5%

Total - NERC 839,198 1,002,431 1,012,844 1,049,461 1,052,413 16.3% 17.1% 20.0% 20.3% 13.0%

* MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for

demand and capacity within its region.Regional Reliability Assessments

69 2008 Long-Term Reliability Assessment Table 13b: Estimated 2008/09 Winter Marg ins (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)

United States
ERCOT 4 6, 068 74,640 75,504 75,508 75,508 38.3% 39.0% 39.0% 39.0% 11.1%
FRCC 46,093 56,818 57,510 57,510 57,510 18.9% 19.9% 19.9% 19.9% 13.0%
MRO 34,358 43,400 44,987 45,702 46,034 20.8% 23.6% 24.8% 25.4% 13.0%
NPCC 46,185 74,920 75,772 75,772 76,644 38.4% 39.0% 39.0% 39.7% New England 20,892 33,678 34,009 34,009 34,881 38.0% 38.6% 38.6% 40.1% 13.0%
New York 25,293 41,242 41,763 41,763 41,763 38.7% 39.4% 39.4% 39.4% 13.0%
RFC 141,200 212,123 212,257 216,200 217,784 33.4% 33.5% 34.7% 35.2% RFC-MISO 47,700 67,307 67,307 70,769 70,845 29.1% 29.1% 32.6% 32.7% 12.8%
RFC-PJM 96,400 142,561 142,695 143,093 144,684 32.4% 32.4% 32.6% 33.4% 12.8%
SERC 176,766 228,615 229,627 257,619 258,987 22.7% 23.0% 31.4% 31.7%
Central 41,908 46,452 46,454 51,061 52,429 9.8% 9.8% 17.9% 20.1% 13.0%

Delta 24,140 23,877 23,918 35,522 35,522 -1.1% -0.9% 32.0% 32.0% 13.0% Gateway 14,912 23,631 23,631 27,671 27,671 36.9% 36.9% 46.1% 46.1% 13.0% Southeastern 40,506 59,335 59,335 65,135 65,135 31.7% 31.7% 37.8% 37.8% 13.0%
VACAR 55,299 75,321 76,290 78,230 78,230 26.6% 27.5% 29.3% 29.3% 13.0%
SPP 31,455 49,107 50,223 59,218 59,218 35.9% 37.4% 46.9% 46.9% 13.0%
WECC 113,504 164,787 167,770 167,822 168,458 31.1% 32.3% 32.4% 32.6% 12.1%
A

Z-NM-SNV 19,468 34,687 37,973 38,025 38,025 43.9% 48.7% 48.8% 48.8% 11.7% CA-MX US 42,929 62,175 60,387 60,387 60,990 31.0% 28.9% 28.9% 29.6% 13.3%
NWPP 41,205 54,620 55,857 55,857 55,921 24.6% 26.2% 26.2% 26.3% 11.9%
RMPA 10,398 13,335 13,377 13,377 13,377 22.0% 22.3% 22.3% 22.3% 10.5%

Total - US 635,629 904,410 913,650 955,351 960,143 29.7% 30.4% 33.5% 33.8% 13.0%

Canada
MRO 7,316 9,074 9,091 9,091 9,091 19.4% 19.5% 19.5% 19.5% 13.0%
NPCC 63,170 74,410 76,036 76,593 76,593 15.1% 16.9% 17.5% 17.5%
Maritimes 5,220 6,314 6,353 6,342 6,342 17.3% 17.8% 17.7% 17.7% 13.0%
Ontario 22,900 27,993 29,398 29,966 29,966 18.2% 22.1% 23.6% 23.6% 14.5%
Quebec 35,049 40,103 40,285 40,285 40,285 12.6% 13.0% 13.0% 13.0% 9.1%
WECC 21,664 23,247 24,532 24,532 24,732 6.8% 11.7% 11.7% 12.4% 10.2%

Total - CAN 92,150 106,731 109,659 110,216 110,416 13.7% 16.0% 16.4% 16.5% 13.0%

Mexico WECC CA-MX Mex 1,641 1,951 2,358 2,358 2,358 15.9% 30.4% 30.4% 30.4% 12.5%

Total - NERC 729,420 1,013,092 1,025,667 1,067,925 1,072,917 28.0% 28.9% 31.7% 32.0% 13.0% * MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for

demand and capacity within its region.Regional Reliability Assessments

70 2008 Long-Term Reliability Assessment Table 13c: Estimated 2012 Summer Margin s (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)

United States
ERCOT 6 8, 833 72,486 78,843 86,397 116,615 5.0% 12.7% 20.3% 41.0% 11.1%
FRCC 48,212 52,817 59,979 59,979 59,979 8.7% 19.6% 19.6% 19.6% 13.0%
MRO 44,993 45,221 49,529 54,029 61,324 0.5% 9.2% 16.7% 26.6% 13.0%
NPCC 61,065 69,585 72,923 72,923 84,901 12.2% 16.3% 16.3% 28.1% New England 27,541 31,246 31,673 31,673 43,651 11.9% 13.0% 13.0% 36.9% 13.0%
New York 33,524 38,339 41,250 41,250 41,250 12.6% 18.7% 18.7% 18.7% 13.0%
RFC 188,900 213,787 219,492 227,911 255,072 11.6% 13.9% 17.1% 25.9% RFC-MISO 65,200 70,076 72,540 74,493 77,322 7.0% 10.1% 12.5% 15.7% 12.8% RFC-PJM 127,600 141,542 144,783 150,943 175,581 9.9% 11.9% 15.5% 27.3% 12.8%
SERC 214,834 233,581 240,273 268,712 276,703 8.0% 10.6% 20.1% 22.4%
Central 44,732 48,848 50,304 54,774 56,778 8.4% 11.1% 18.3% 21.2% 13.0%

Delta 30,352 29,655 29,655 41,259 43,391 -2.4% -2.4% 26.4% 30.1% 13.0% Gateway 20,000 23,787 24,332 28,839 28,839 15.9% 17.8% 30.6% 30.6% 13.0% Southeastern 53,896 57,736 59,418 65,218 67,833 6.7% 9.3% 17.4% 20.5% 13.0%
VACAR 65,854 73,556 76,565 78,622 79,862 10.5% 14.0% 16.2% 17.5% 13.0%
SPP 46,248 48,628 54,328 62,975 67,981 4.9% 14.9% 26.6% 32.0% 13.0%
WECC 149,137 166,578 175,431 175,435 184,342 10.5% 15.0% 15.0% 19.1% 12.1%
A

Z-NM-SNV 34,802 35,026 37,087 37,091 38,399 0.6% 6.2% 6.2% 9.4% 11.7% CA-MX US 60,731 64,899 72,021 72,021 77,521 6.4% 15.7% 15.7% 21.7% 13.3%
NWPP 41,004 53,809 52,123 52,123 54,472 23.8% 21.3% 21.3% 24.7% 11.9%
RMPA 13,047 12,852 14,744 14,744 14,744 -1.5% 11.5% 11.5% 11.5% 10.5%

Total - US 822,222 902,683 950,798 1,008,361 1,106,917 8.9% 13.5% 18.5% 25.7% 13.0%

Canada
MRO 6,394 7,613 8,048 8,048 8,048 16.0% 20.6% 20.6% 20.6% 13.0%
NPCC 49,143 62,761 69,586 71,976 72,444 21.7% 29.4% 31.7% 32.2%
Maritimes 3,289 6,526 6,526 6,580 6,723 49.6% 49.6% 50.0% 51.1% 13.0%
Ontario 23,788 24,504 30,473 32,809 33,135 2.9% 21.9% 27.5% 28.2% 14.5%
Quebec 22,065 31,731 32,587 32,587 32,587 30.5% 32.3% 32.3% 32.3% 9.1%
WECC 19,984 21,889 22,912 22,912 25,196 8.7% 12.8% 12.8% 20.7% 10.2%

Total - CAN 75,521 92,263 100,546 102,936 105,688 18.1% 24.9% 26.6% 28.5% 13.0%

Mexico WECC CA-MX Mex 2,769 2,356 2,722 2,722 3,233 -17.5% -1.7% -1.7% 14.4% 12.5%

Total - NERC 900,512 997,302 1,054,066 1,114,019 1,215,838 9.7% 14.6% 19.2% 25.9% 13.0%

* MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for

demand and capacity within its region.Regional Reliability Assessments

71 2008 Long-Term Reliability Assessment Table 13d: Estimated 2012/13 Winter Marg ins (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)

United States
ERCOT 4 9, 371 75,015 81,372 88,926 119,144 34.2% 39.3% 44.5% 58.6% 11.1%
FRCC 50,104 56,458 65,107 65,107 65,107 11.3% 23.0% 23.0% 23.0% 13.0%
MRO 37,436 43,030 47,292 52,426 59,984 13.0% 20.8% 28.6% 37.6% 13.0%
NPCC 48,258 72,041 73,759 73,759 86,424 33.0% 34.6% 34.6% 44.2% New England 21,786 31,246 31,673 31,673 44,331 30.3% 31.2% 31.2% 50.9% 13.0%
New York 26,472 40,795 42,086 42,086 42,092 35.1% 37.1% 37.1% 37.1% 13.0%
RFC 149,100 212,123 217,827 229,321 257,729 29.7% 31.6% 35.0% 42.1% RFC-MISO 51,000 67,307 69,771 74,471 77,300 24.2% 26.9% 31.5% 34.0% 12.8% RFC-PJM 101,200 142,561 145,801 152,276 178,174 29.0% 30.6% 33.5% 43.2% 12.8%
SERC 188,972 227,231 235,730 264,120 273,164 16.8% 19.8% 28.5% 30.8%
Central 42,995 46,197 48,881 53,355 55,632 6.9% 12.0% 19.4% 22.7% 13.0%

Delta 25,752 23,725 24,102 35,706 37,856 -8.5% -6.8% 27.9% 32.0% 13.0% Gateway 15,897 23,778 24,525 28,675 28,675 33.1% 35.2% 44.6% 44.6% 13.0% Southeastern 45,086 58,803 60,485 66,285 68,934 23.3% 25.5% 32.0% 34.6% 13.0%
VACAR 59,241 74,729 77,738 80,099 82,067 20.7% 23.8% 26.0% 27.8% 13.0%
SPP 34,021 48,754 53,730 62,916 64,388 30.2% 36.7% 45.9% 47.2% 13.0%
WECC 121,657 165,001 171,862 171,914 179,603 26.3% 29.2% 29.2% 32.3% 12.1%
A

Z-NM-SNV 21,709 34,997 40,134 40,186 41,170 38.0% 45.9% 46.0% 47.3% 11.7% CA-MX US 45,318 62,097 60,682 60,682 65,008 27.0% 25.3% 25.3% 30.3% 13.3%
NWPP 43,890 54,594 55,912 55,912 58,291 19.6% 21.5% 21.5% 24.7% 11.9%
RMPA 11,265 13,334 14,426 14,426 14,426 15.5% 21.9% 21.9% 21.9% 10.5%

Total - US 678,919 899,653 946,679 1,008,489 1,105,542 24.5% 28.3% 32.7% 38.6% 13.0%

Canada
MRO 7,909 9,044 9,415 9,415 9,415 12.5% 16.0% 16.0% 16.0% 13.0%
NPCC 62,985 71,695 79,018 81,640 81,782 12.1% 20.3% 22.9% 23.0%
Maritimes 5,502 6,813 7,038 7,059 7,171 19.2% 21.8% 22.1% 23.3% 13.0%
Ontario 20,952 24,602 30,571 33,172 33,202 14.8% 31.5% 36.8% 36.9% 14.5%
Quebec 36,531 40,280 41,409 41,409 41,409 9.3% 11.8% 11.8% 11.8% 9.1%
WECC 24,104 23,297 25,622 25,622 27,802 -3.5% 5.9% 5.9% 13.3% 10.2%

Total - CAN 94,998 104,036 114,055 116,677 118,999 8.7% 16.7% 18.6% 20.2% 13.0%

Mexico WECC CA-MX Mex 2,045 1,830 2,257 2,257 2,768 -11.7% 9.4% 9.4% 26.1% 12.5%

Total - NERC 775,962 1,005,519 1,062,991 1,127,423 1,227,309 22.8% 27.0% 31.2% 36.8% 13.0% * MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for demand and capacity within its region.Regional Reliability Assessments

72 2008 Long-Term Reliability Assessment Table 13e: Estimated 2017 Summer Margin s (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)

United States
ERCOT 7 5, 201 72,486 78,843 86,436 116,811 -3.7% 4.6% 13.0% 35.6% 11.1%
FRCC 53,733 51,475 67,434 67,434 67,434 -4.4% 20.3% 20.3% 20.3% 13.0%
MRO 48,625 45,220 50,126 55,984 65,335 -7.5% 3.0% 13.1% 25.6% 13.0%
NPCC 64,145 69,411 72,750 72,750 85,672 7.6% 11.8% 11.8% 25.1% New England 28,971 31,246 31,673 31,673 44,596 7.3% 8.5% 8.5% 35.0% 13.0%
New York 35,174 38,165 41,077 41,077 41,077 7.8% 14.4% 14.4% 14.4% 13.0%
RFC 201,700 213,787 219,632 230,875 267,513 5.7% 8.2% 12.6% 24.6% RFC-MISO 68,900 70,076 72,540 75,428 80,338 1.7% 5.0% 8.7% 14.2% 12.8% RFC-PJM 137,000 141,542 144,923 152,940 185,006 3.2% 5.5% 10.4% 25.9% 12.8%
SERC 236,070 234,638 242,498 271,830 302,558 -0.6% 2.7% 13.2% 22.0%
Central 49,673 47,379 49,983 54,574 67,518 -4.8% 0.6% 9.0% 26.4% 13.0%

Delta 33,144 29,647 29,647 41,251 46,485 -11.8% -11.8% 19.7% 28.7% 13.0% Gateway 20,997 23,749 24,314 28,957 28,957 11.6% 13.6% 27.5% 27.5% 13.0% Southeastern 60,156 61,905 63,587 69,387 78,640 2.8% 5.4% 13.3% 23.5% 13.0%
VACAR 72,100 71,959 74,968 77,661 80,959 -0.2% 3.8% 7.2% 10.9% 13.0%
SPP 49,853 48,390 55,781 64,428 74,354 -3.0% 10.6% 22.6% 33.0% 13.0%
WECC 162,763 166,571 175,838 175,842 187,512 2.3% 7.4% 7.4% 13.2% 12.1%
A

Z-NM-SNV 39,442 35,066 37,336 37,340 39,060 -12.5% -5.6% -5.6% -1.0% 11.7% CA-MX US 64,598 64,515 71,799 71,799 77,976 -0.1% 10.0% 10.0% 17.2% 13.3%
NWPP 44,484 54,127 51,788 51,788 54,861 17.8% 14.1% 14.1% 18.9% 11.9%
RMPA 14,747 12,880 15,418 15,418 16,118 -14.5% 4.4% 4.4% 8.5% 10.5%

Total - US 892,090 901,978 962,902 1,025,579 1,167,189 1.1% 7.4% 13.0% 23.6% 13.0%

Canada
MRO 6,613 7,689 8,297 8,297 8,297 14.0% 20.3% 20.3% 20.3% 13.0%
NPCC 49,349 56,810 64,353 70,123 70,606 13.1% 23.3% 29.6% 30.1%
Maritimes 3,423 6,526 6,526 6,598 6,756 47.5% 47.5% 48.1% 49.3% 13.0%
Ontario 23,125 18,553 24,522 30,220 30,545 -24.6% 5.7% 23.5% 24.3% 14.5%
Quebec 22,802 31,731 33,305 33,305 33,305 28.1% 31.5% 31.5% 31.5% 9.1%
WECC 22,489 21,889 23,402 23,402 25,686 -2.7% 3.9% 3.9% 12.4% 10.2%

Total - CAN 78,451 86,388 96,052 101,822 104,589 9.2% 18.3% 23.0% 25.0% 13.0%

Mexico WECC CA-MX Mex 3,598 2,356 2,722 2,722 3,521 -52.7% -32.2% -32.2% -2.2% 12.5%

Total - NERC 974,139 990,722 1,061,676 1,130,123 1,275,299 1.7% 8.2% 13.8% 23.6% 13.0% * MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for demand and capacity within its region.Regional Reliability Assessments

73 2008 Long-Term Reliability Assessment Table 13f: Estimated 2017/18 Winter Marg ins (%), Resources and Demands (MW)

Net Internal

Demand Existing Certain and

Net FirmTransactions Net Capacity Resources Adjusted Potential Resources Total Potential Resources Existing Certain and

Net FirmTransactions Margin Net Capacity Resources

Margin Adjusted Potential Resources

Margin Total Potential Resources

Margin NERC Reference

Margin Level (MW) (MW) (MW) (MW) (MW) (%) (%) (%) (%) (%)

United States
ERCOT 54,085 75,015 81,372 88,965 119,340 27.9% 33.5% 39.2% 54.7% 11.1%
FRCC 55,516 55,116 72,725 72,725 72,725 -0.7% 23.7% 23.7% 23.7% 13.0%
MRO 40,067 42,848 48,019 54,436 63,883 6.5% 16.6% 26.4% 37.3% 13.0%
NPCC 50,760 71,830 73,549 73,549 87,264 29.3% 31.0% 31.0% 41.8% New England 22,671 31,246 31,673 31,673 45,382 27.4% 28.4% 28.4% 50.0% 13.0%
New York 28,089 40,584 41,876 41,876 41,882 30.8% 32.9% 32.9% 32.9% 13.0%
RFC 157,900 212,123 217,967 231,959 268,595 25.6% 27.6% 31.9% 41.2% RFC-MISO 54,300 67,307 69,771 75,406 80,316 19.3% 22.2% 28.0% 32.4% 12.8% RFC-PJM 106,800 142,561 145,941 153,958 186,024 25.1% 26.8% 30.6% 42.6% 12.8%
SERC 203,698 229,454 237,973 266,885 298,910 11.2% 14.4% 23.7% 31.9%
Central 46,444 46,102 48,786 53,343 67,268 -0.7% 4.8% 12.9% 31.0% 13.0%

Delta 26,456 23,717 24,094 35,698 41,036 -11.5% -9.8% 25.9% 35.5% 13.0% Gateway 16,835 23,825 24,592 28,768 28,768 29.3% 31.5% 41.5% 41.5% 13.0% Southeastern 49,625 62,542 64,224 70,024 79,311 20.7% 22.7% 29.1% 37.4% 13.0%
VACAR 64,338 73,269 76,278 79,052 82,527 12.2% 15.7% 18.6% 22.0% 13.0%
SPP 37,592 48,563 54,464 63,650 66,528 22.6% 31.0% 40.9% 43.5% 13.0%
WECC 131,752 164,545 171,100 171,152 181,617 19.9% 23.0% 23.0% 27.5% 12.1%
A

Z-NM-SNV 24,525 34,829 40,266 40,318 42,016 29.6% 39.1% 39.2% 41.6% 11.7% CA-MX US 48,151 61,629 59,063 59,063 64,043 21.9% 18.5% 18.5% 24.8% 13.3%
NWPP 46,858 54,739 56,312 56,312 59,399 14.4% 16.8% 16.8% 21.1% 11.9%
RMPA 12,634 13,363 15,164 15,164 15,864 5.5% 16.7% 16.7% 20.4% 10.5%

Total - US 731,370 899,494 957,169 1,023,321 1,158,862 18.7% 23.6% 28.5% 36.9% 13.0%

Canada
MRO 8,179 9,044 9,509 9,509 9,509 9.6% 14.0% 14.0% 14.0% 13.0%
NPCC 63,827 65,713 73,918 79,957 80,122 2.9% 13.7% 20.2% 20.3%
Maritimes 5,749 6,813 7,038 7,083 7,219 15.6% 18.3% 18.8% 20.4% 13.0%
Ontario 20,264 18,620 24,589 30,583 30,612 -8.8% 17.6% 33.7% 33.8% 14.5%
Quebec 37,814 40,280 42,291 42,291 42,291 6.1% 10.6% 10.6% 10.6% 9.1%
WECC 26,796 23,284 26,303 26,303 28,483 -15.1% -1.9% -1.9% 5.9% 10.2%

Total - CAN 98,802 98,041 109,730 115,769 118,114 -0.8% 10.0% 14.7% 16.4% 13.0%

Mexico WECC CA-MX Mex 2,648 1,830 2,922 2,922 3,721 -44.7% 9.4% 9.4% 28.8% 12.5%

Total - NERC 832,820 999,365 1,069,821 1,142,012 1,280,697 16.7% 22.2% 27.1% 35.0% 13.0% * MISO and PJM information does not sum to the RFC total due to the handling of OVEC data. RFC information is only for demand and capacity within its region.Regional Reliability Assessments

74 2008 Long-Term Reliability Assessment Notes for Table 13a through 13f

Note 1: Existing-Certain and Net Firm Transactions and Net Ca pacity Resources are report ed to be deliverable by the regions.

Note 2: The Inoperable portion of Total Poten tial Resources may not be deliverable.

Note 3: The WECC-U.S. peak demands or resources do not necessarily equal the sums of the non-coincident WECC-U.S. subregional peak demands or resources be cause of subregional monthly peak demand diversity. Similarly, the Western Interconnection peak demands or resources do not necessarily equal the sums of the noncoincident WECC-U.S., Canada, and Mexico peak demands or resources. Also, the subregional resource numbers include utilization of seasonal demand diversity between the winter peaking northwest and the summer peaking portions of the Western Interconnection.

Note 4: The demand side management resources are not neces sarily sharable between the WECC subregions and are not necessarily sharab le within subregions.

Note 5: WECC CA-MX represents only the northern portion of the Baja California Norte, Mexico electric system interconnected with the U.S.

Note 6: MISO and PJM information does not sum to the RF C total due to the handling of OVEC data. RFC information is only for demand and capacity within its region.

Note 7: These demand and supply forecasts are as of March 31, 2008.

Note 8: Each region/subregion may have their own specific margin level based on load, generation, and transmission characteristics as well as regulatory requ irements. If provided in the data submittals, the regional/subregional Target Capacity Margin level is adop ted as the NERC Reference Margin Level. If not, NERC assigned 13 percent capacity margin for predominately thermal systems and for predominately hydro systems, 9 percent.Regional Reliability Assessments

75 2008 Long-Term Reliability Assessment ERCOT Highlights

This year’s long-term assessm ent for resource adequacy in the ERCOT Region is improved over last year’s outlook. With additional generating units that have gone into service or have signed interconnection agreements and a lower expectation of load growth due to economic expectations, the annual reserve margin for the region does not drop below the minimum target level of 12.5% until 2013. In addition, there are significant amounts of a dditional genera tion that are being considered for addition in the region, but have not yet been developed to the point of meeting the criteria for inclusion in this reserve margin calculation.

The number of planned transmission circuit mile s and autotransformer additions over the first five years has increased since last year’s long term assessment. The rapid increase in installation of new wind generation is expected to result in congestion on multiple constraints until new transmission lines are added between West Texas and the rest of the ERCOT system. Later this year, the Public Utility Commission of Texa s will be completing its Competitive Renewable Energy Zone (CREZ) process, which is expe cted to result in significant additional bulk transmission that is not reflected in the current assessment. From an operational perspective, the increasing reliance on wind generation is expected to increase operating challenges. Several initiatives are underway, at varying stages of reso lution, to ensure the appropriate procedures and requirements are in place to meet these challenges.

ERCOT - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

76 2008 Long-Term Reliability Assessment ERCOT - Projected On-Peak Capacity by Fuel-Mix

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

Gas Dual Fuel C oal
N uc

l ear Hydro Wind O t herMW 2008

2017

ERCOT Capacity vs Demand - Summer

40 50 60 70 80 90

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessments

77 2008 Long-Term Reliability Assessment ERCOT Self-Assessment

Demand

The 2008 long-term forecast for the ERCOT Region is generally lower than last year’s forecast due to the slowdown in the forecasted economic conditions. This is reflected in the average annual growth rate of this year’s projected annual growth for 2008-2017 of 1.97% which is lower in comparison to last year’s forecast ed growth rate for 2007-2016 of 2.25%.

The lower peak demands reflect the expected state of the econo my as represented by economic indicators that have been f ound to drive electricity use in the ERCOT Region’s eight weather zones, including real per capita personal inco me, population, gross domestic product, and various employment measures including non-farm employment and total employment.

In the long-term, real personal per-capita income is expected to level-off or decline in a slight to medium fashion due to wage rates experienci ng modest growth, only slightly faster than inflation, due to lower productivity growth. Te xas non-farm employment continues to grow faster than the U.S. The gross domestic product (GDP) also shows a lower level and growth rate from 2008 to 2018 when compared to last year’s forecast.

Given the net effects of the economic indicators used in the 2008 LTDF forecast, they indicate slowdown of the economy in the long-run. The l ong-run impact on the forecast due to economic slowdown is projected to start around 2010. Its effects are projec ted to translate into a 4.50% decline in energy and a 3.31% decline in peak demand by 2018, when compared to last year’s forecast.

The forecasted peak demands are produced by E RCOT for the entire ERCOT Region (which is a single Balancing Authority area) based on coinci dent actual demands. Th e weather assumptions on which the forecasts are based represent an average weather profile (50/50). An average weather profile is calculated for each of the eight weather zones in the ERCOT grid, which are used in developing the forecast. These aver age weather profiles are based on a Rank-Median method. This method ranks the yearly temperatures from highest to lowest for all years in the database and assigns the ranked temperatures to a calendar. The calendar is selected using a minimum squared error criterion. Me dian temperatures are preferred as they are not affected as much by outliers as the average.

The actual demands used for forecasting purposes are coincident hourly values across the ERCOT Region. The data used in th e forecast is by weather zones.

Two programs are available that explicitly modify the forecasted peak demand for the region. The LaaRs program (Load Acting as a Resour ce) which amounts to approximately 1059 MW. The LaaR capacity is available through ERCOT’s ancillary services mark et. In addition, the Texas Legislature increased the mandatory amount of energy efficiency reduction in demand that each investor-owned utility in ERCOT must achieve . The effect of this increase on system peak demand is expected to be 143MW in 2008 and 160MW in 2009 and thereafter.

To assess the impact of weather variability on the peak demand for ERCOT, alternative weather scenarios are used to develop extreme MW for ecasts. A high demand scenario is produced usingRegional Reliability Assessments

78 2008 Long-Term Reliability Assessment the 90 th percentile of the temperatures in the databa se spanning the last fourteen years available. The lower temperatures that rank in the bottom 10 th percentile of the databa se are also used to produce a lower range forecast.

The extreme temperatures are input into the load-shape and energy models to obtain the forecasts. The higher temperature assumptions consistently produce MW forecasts that are approximately 5.5% higher than the base foreca sts (50/50). Together the forecasts from these temperature scenarios are usually re ferred to as 90/10 MW forecasts.

Generation

The amount of Existing Certain cap acity is 70,886 MW for the summer periods. Of this amount, 480 MW is from wind generation and 53MW is from biomass. Existing Uncertain 118 capacity is 9,231 MW, of which 4,979 MW is from wind generation. Planned capacity 119 additions range from 864 MW in 2008/2009 to 6,357 MW starting in 2011 / 2012 and continuing through the assessment period. Wind gene ration accounts for 371 MW of this Planned amount. Proposed capacity 120 resources expected to be in-servi ce amount to 5,787 MW in 2009 / 2010 and increasing to 37,968 MW in 2013 / 2014 through the rest of the study period. Wind capacity accounts for 3,728 MW of this Proposed amount

Purchases and Sales on Peak

ERCOT has only limited planned purchases and sales with other regions. There is approximately 50 MW tied to a long term cont ract for purchase from the SPP region of firm power and transmission (on SPP side) from sp ecific generation. Th ere are no other known purchases existing or under study.

SPP members’ ownership of 247 MW of a power plan t located in ERCOT resu lts in a transfer of this amount from ERCOT to SPP. There are no other known firm sales from the ERCOT Region existing or under study. ERCOT doe s not share reserves with entit ies outside the region but does have emergency support agreements with both CFE and SPP.

Fuel

Over 60% of the generating capac ity in ERCOT is fueled by natural gas, resulting in some concern about the adequacy of natural gas supp ly during winter months when winter heating demand peaks. Natural gas interr uptions are not typically a c oncern during the summer, when electric power demand peaks. ERCOT has a procedur e in place to request cu rrent status of fuel supply contracts, back-up fuel supplies and unit capa bilities if severe cold weather is in the seven day forecast. This information would be used to prepare operation plans. However, there is currently no market incentive or non-market mechanism for gas generation to maintain dual fuel capability and storage, typically with fuel oil, that could be critical to maintaining generation adequacy during extended periods of gas curtailments. .

118 Existing Uncertain capacity includes the portion of the wind genera tion that is not counted as Ce rtain due to its variability and

the existing generating capacity that is mothballed
119 Planned capacity additions in clude new generation that has a signed interc onnection agreement and air permit, with wind

generation counted at its effective load carrying capability. Planned capacity additions are included in reserves.
120 Proposed capacity additions include all other generation that has requested interconnection agreement, with wind generation

counted at its effective load carryi ng capability. Proposed capacity additions are no t included in reserves.Regional Reliability Assessments

79 2008 Long-Term Reliability Assessment ERCOT will initiate its Emergency Electric Curtailment Plan (EECP) 121 if available capacity gets below required levels due to gas curtailmen ts or any other reason. The EECP maintains the reliability of the interconnection by avoiding uncontrolled load shedding.

Transmission –

Planned Improvements identified for the first time in this year’s assessment include a new 345 kV transmission line in the East weather zone to alleviate th e need for a special protection system (SPS), a new 345 kV switc hing station in northwest Hous ton to increase North to Houston transfer capability, and additional autotransformer and 138 kV line upgrades in the Dallas-Fort Worth metropolitan area. In add ition, two new 345 kV transm ission lines and a new 345 kV switching station were included in the West region due to the additional wind generation in the West region. Additional findings of the assessment are:

• The numbers of planned transmission circuit miles and autotransformer additions for the next five years have increased from the leve l included in last year’s five year plan.

• Continued rapid increase in the installation of new wind generation in West Texas is expected to result in congestion on multiple constraints and West to North transfers until new bulk transmission lines are added between West Texas and the rest of the ERCOT system.

The Public Utility Commission of Texas will be completing its Competitive Renewable Energy Zone (CREZ) process this summer. This process may result in significant additional plans for bulk transmission.

Operational Issues

No major facility outages, regulat ory restrictions, or environmen tal requirements are currently expected during the assessment pe riod that would sign ificantly impact reliable operations. Ongoing operational challenges during the asse ssment period are expected to center around transmission congestion management and opera ting with reduced capac ity reserve margins.

The continued increase in installed wind gene ration has the potential to increase operating challenges. ERCOT has recently implemente d a wind power forecasting system to allow operators to take appropriate actions when changes or increas ed uncertainty in wind power output are forecasted. In additi on, congestion management associat ed with the increased wind generation is likely to require increased attentio n. Finally, ERCOT recently completed a study of the impact of increased wind generation in ancillary services requirements, which are expected to increase at the projected levels of installed wind generation.

Reserve margins will likely be at minimum leve ls over the assessment pe riod. This, coupled with resource vulnerability to winter gas curtailments, could increase the likelihood that operators will need to initiate emergency procedures such as the EECP in the future.

The major market redesign, approved by the Pub lic Utility Commission of Texas (PUCT) will change current congestion manageme nt procedures from a zonal to a nodal-based system. This transition, which will occur during the asse ssment period, may present challenges in implementing new operating computing systems but should also improve the efficiency of transmission congestion management.

121 See ERCOT Protocols Section 5.6.6.1 at http://www.ercot.com/mktrul es/protocols/current.htmlRegional Reliability Assessments

80 2008 Long-Term Reliability Assessment Reliability Assessment Analysis

ERCOT has an adequate reserve margin throug h 2012 but the reserve margin falls below the 12.5 percent minimum level used throughout the assessment peri od starting in 2013, based on new generation with signed interconnection ag reements and existing resources. The minimum reserve margin target of 12.5 percent is applied to each year of the ten year assessment period and is based on a Loss-of-Load Expectation (LOLE) analysis, resulting in no more than one day in ten years loss of lo ad, performed in 2005.

ERCOT almost entirely uses internal resources to serve its load and reserves, with the exception of a 50 MW purchases from SPP and emergency support agreements with SPP and CFE. ERCOT has 71,750 MW of installed generati on (summer), with additional signed interconnection agreements for 5,987 MW of ne w fossil fuel generation and 371 MW of wind generation over the next ten years.

Reserve margins for the Region have improved sin ce last year’s assessment, due to the lower demand forecast and several additional wind and ga s-fired generating units that have signed interconnection agreements

.
ERCOT should have sufficient capacity even for a peak demand that is as high as the 90 th percentile of the weather sensitivity in the load forecast, which could result in a peak demand 5.5% higher than the expected peak demand. An extremely hot summer that results in load levels significantly above forecast, higher than normal unit forced outage rates, or financial difficulties of some generation owners that may ma ke it difficult for them to obtain fuel from suppliers are all risk factors that alone or in combination could result in inadequate supply. In the event that occurs, ERCOT will implement its Emergency Electric Curtailment Plan (EECP) (See Section 5.6.6.1 of the ERCOT Protocols) 122 . The EECP includes procedures for use of interruptible load, voltage re ductions, procuring emergency en ergy over the DC ties, ISOinstructed demand response procedures and ar e in place and are de scribed in the ERCOT Operating Guides Section 4.5 Emergency Electric Curtailment Plan (EECP). 123

Only 8.7% of existing wind generation nameplate cap acity is counted on for Certain generation, based on an analysis of the effective load carry ing capability of wind gene ration in the region. The remaining existing wind capacity amount is included in the Uncertain generation amount.

There are no currently-known unit retirements wh ich have significant impact on reliability. ERCOT does not have a formal definition of gene ration deliverability. However, in the planning horizon, ERCOT performs a security-constraine d unit commitment and economic dispatch analysis for the upcoming year. Th is analysis is perf ormed on an hourly basis for a variety of conditions to ensure deliverabil ity of sufficient resources to meet a load level that is approximately 10 percent higher than the expect ed coincident system peak demand plus operating reserves. Load data for this analysis is based on the non-coinci dent demands projected by the transmission owners. Oper ationally, transmission operating limits are adhered to through market-based generation redispatch directed by ERCOT as the bala ncing authority and reliability coordinator. Operational resource adequacy is also maintained by ERCOT through market-based procurement processes (See Sections si x and seven of the ERCOT Protocols 124 ).

122 http://www.ercot.com/mktrules/protocols/current.html
123 http://www.ercot.com/mktrules /guides/operating/current.html.
124 http://www.ercot.com/mktrules/protocols/current.htmlRegional Reliability Assessments

81 2008 Long-Term Reliability Assessment ERCOT has interconnections throug h DC ties with the Eastern Inte rconnect and with Mexico. The maximum imports/export over these ties is 1,106 MW. These ties can be operated at a maximum import and export provided there are no area transmission el ements out of service. In the event of a transmission outage in the area of these ties, studies will be run during the outage coordination period for the outages to s ee if any import/export limits are needed.

The Public Utility Commission of Texas will be completing its Competitive Renewable Energy Zone (CREZ) process this summer. This process may result in significant additional plans for bulk transmission to enable wind gene ration in West Texas to be able to serve load in the rest of the ERCOT Region.

The continued rapid installation of new wind generation in West Te xas is expected to result in congestion on multiple constraints within and out of West Texas for the next several years until new bulk transmission lines are added between West Texas and the rest of the ERCOT system. This is not expected to limit deliverability durin g peak periods, since only 8.7% of the installed wind capacity is counted for reserve purposes.

ERCOT regularly performs transient dynamics and voltage studies. Small signal stability studies were performed as part of th e West-North stability study. Th ere are no antici pated stability issues that could affect reliability, however E RCOT closely monitors a we st-north stability limit and a Rio Grande valley voltage limit.

In the operations planning horizon, ERCOT perfor ms off-line transient stability studies for specific areas of the region as needed. The results of these studies are used in real-time and near real-time monitori ng of the grid.

Operating Procedure 2.4.3 VSAT (Voltage Stability Analysis Tool) describes the procedure to monitor the system and to prevent voltage colla pse using the online voltage stability analysis tool. Different scenarios along with the MW safety margins are described and mitigation procedures are prescribed based on VSAT results. Once the prescribed action is communicated, taken and verified VSAT will be rerun with the new topology.

No explicit minimum dynamic reactiv e criteria exist, however react ive margins are maintained in the major metropolitan areas. Ar eas of dynamic and static reactiv e power limitations are Corpus Christi, Houston, Dallas/Ft. Wort h, Rio Grande Valley, South to Houston generation, South to Houston load, North to Houst on Generation and Nort h to Houston load. These areas and mitigation procedures are found in Operating Procedure 2.4.3. 125 ERCOT plans for a 5% voltage stability margin for category A and category B contingencies and a 2.5% margin for category C contingencies 126 . ERCOT planning criteria are intended to maintain sufficient dynamic reactive capability to maintain system vo ltages within the range for which generators are expected to remain online.

UVLS schemes are deployed in the followi ng areas: Houston ~ 4500 MW, DFW ~ 3500 MW, Rio Grande Valley ~ 650 MW. Additional UVLS deployments in other areas have been considered, but at this time there are no implementation plans. The Houston and DFW

125 http://www.ercot.com/mktrul es/guides/procedures/Tra nsmissionSecurity_V3R89.doc
126 http://www.ercot.com/mktrules/guides/operating/2007/07/05/05-070107.docRegional Reliability Assessments

82 2008 Long-Term Reliability Assessment deployments are intended to provide a “safety ne t” and are not targeted to specific events. UVLS are not generally relied upon to surv ive NERC Category B & C events and system reinforcements may be made to limit the amount of load shed that is necessary under certain extreme contingencies (NERC Category D events ). The Valley deployment is intended to prevent (local) voltage collapse that may result following certai n Category C contingencies.

ERCOT is not generally reliant on single gas pipelines or import paths such that the long term outage of one of these types of systems would lead to loss of significant amounts of generating capacity. ERCOT is not currently experiencing drought conditions and re servoir levels are currently at or near full capacity nor does it expect significant capacit y reduction implications due to low water levels.

Transmission Service Providers (TSPs) and ERCO T perform a full battery of steady-state and dynamic contingency analyses on an on-going basi s to test the performance of the planned system against the standards of TPL-001 th rough TPL-004. The TSPs are responsible for resolving unacceptable results through the provi sion of Transmission Facilities, etc. in accordance with Op. Guide 5.1.4. Additional transm ission system upgrades are planned to resolve any future problems, resulting in the pla nned transmission discussed in the Transmission section. .

ERCOT has recently implemented a wind power for ecasting system to allow operators to assess differences with the resource plans submitted by scheduling entities for wind generation and take appropriate actions.

Aging infrastructure is not expected to result in significant reliability impacts. Many of the older gas-fired generating units in the ERCOT Region have been mothballe d or retired. Fault currents in the region have not yet exceeded the levels for which for which applications using commercially available 345kV breakers can be designed. The ERCOT region does not have guidelines for on-site, spare generator step-up (GSU) and auto transf ormers. Individual transmission owners may participate in programs to share spare transformers, but the region as a whole does not.

Other region-specific issues that were not mentioned above

ERCOT will be implementing a new market design and related systems during the assessment period which should allow for more efficient mana gement of congestion. Entities in the ERCOT Region are handling workforce retention a nd recruitment issues independently.

Region Description The ERCOT Region is a separate electric interc onnection located entirely in the state of Texas and operated as a single balancing authority. Texas RE, a functionally independent division of ERCOT, performs the regional entity functi ons described in the Energy Policy Act of 2005 for the ERC OT region. ERCOT has 251 members that represent independent retail electric prov iders; generators, and power marketers; investor-owned, municipal, and co operative utilities; and retail consumers. It is a summer-peaking region responsible for about 85 percent of the electric load in Texas with a 2006 peak demand of 62,339 megawatts. ERCOT serves a population of more than 20 million in a geographic area of about 200,000 square miles. Additional information is available on the ERCOT web site.Regional Reliability Assessments

83 2008 Long-Term Reliability Assessment FRCC Highlights All Florida utilities are require d to meet the Florida Public Service Commission (FPSC) reserve margin. Therefore, much of the resources in the 6-10 year timeframe are not sited, rather represent industry’s obligation to meet this reserve margin. While FRCC reports adequate re sources through 2017, not sited plants are included in the data provided in the self assessment. Much of these planned generation resources are not sited but are considered committed by FRCC and deemed to be deliverable.

Based on the aforementioned, the Florida Reliab ility Coordinating Council (FRCC) expects to have an adequate generating reserve margin w ith transmission system deliverability throughout the 2008-2017 reliability assessment to meet the forecasted growth in peak demand and energy through the same time frame. The FRCC Region expects to serve the forecasted firm peak demand and energy requirements reliably through 2017 by adding a net 15,959 MW of resources. In addition, existing uncertain mercha nt plant capability of 19 66 MW is available by 2017 as potential future resources of FRCC members and others.

The transmission capability within the FRCC is exp ected to be adequate to supply firm customer demand and to provide planned firm transmission se rvice. In order to maintain an adequate transmission system, the FRCC members plan to construct 508 miles of 230 kV and 80 miles of 500 kV transmission lines through 2017. Operati onal issues in the Ce ntral Florida area are expected through the summer of 2010. Unplanned outages of generating units may aggravate the transmission system serving the Central Florida area. However, it is anticipated that existing operational procedures, pre-planning and traini ng will adequately manage and mitigate the impacts to the bulk transmission system in the Central Florida area. After 2010, planned transmission improvements in the Central Florida area are expected to mitigate these operational issues.

The FRCC Region meets the NERC’s TPL Sta ndards by performing the required transmission assessments representing the 10 year planning horizon. The FRCC Region develops detailed transmission assessments for the 1-5 year ti me frame recognizing the fact that generation expansion plans are known with a higher degree of confidence and most planned transmission projects and corresponding in -service dates are known.

The FRCC Region performs transmission assessm ents representing the 6-10 year time frame recognizing the uncertainties related to future generation siting and co rresponding transmission expansion to support future generati on and load growth. All Florida utilities are required to meet the Florida Public Service Commission (FPSC) rese rve margin. Therefore, even if future generation plans are not firm, the utilities must s how that they plan to maintain these reserve margin levels throughout the planning horizon. Appr oximately half of the generation planned in the 6-10 year time frame us not sited and may require additional transmission sensitivity assessments. The transmission system is eval uated in the 6-10 year time frame to identify possible emerging concerns, monitor known concerns , monitor the effects of planned projects and identify major projects that may require long lead times. In addition, the transmission expansion plans representing the years 6-10 ar e typically under review by most transmission owners still considering multiple alternatives for each project.Regional Reliability Assessments

84 2008 Long-Term Reliability Assessment FRCC - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

FRCC - Projected On-Peak Capacity by Fuel-Mix

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

Ga s Oil C o

a l Nuclear Oth e

rMW 2008

2017Regional Reliability Assessments

85 2008 Long-Term Reliability Assessment FRCC Capacity vs Demand - Summer

30 40 50 60 70

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessments

86 2008 Long-Term Reliability Assessment FRCC Self-Assessment

I ntroduction FRCC expects to have adequate generating cap acity reserves with transmission system deliverability throughout the 10 year period. In addition, existing uncer tain merchant plant capability raging from 1,054 MW to 1966 MW is av ailable as potential future resources of FRCC members and others.

The transmission capability within the FRCC region is expected to be adequate to supply firm customer demand and to provide planned firm tr ansmission service. Operational issues can develop due to unplanned outages of generating units within the FRCC Region. However, it is anticipated that existing operational procedures, pre-planning, and training will adequately manage and mitigate the impacts to the bulk transmission system.

Demand FRCC uses historical weather databases consisting of as much as 58 years of data for the weather assumptions used in their forecasting models. Hi storically, the FRCC has high-demand days in both the summer and winter seasons. However, because the region is geographically a subtropical area, a greater number of high-demand days normally occur in the summer. As such, this report will address the summer load values.

The aggregated peak demand in the FRCC region for 2007 was 46,676 MW as compared to a peak demand forecast of 46,878 MW. The 2008 ten year demand forecast for the FRCC region exhibits a compounded average annual growth rate of 2.1 percent over the next ten years compared to last year’s compounded average annual growth rate of 2.2 percen t. The decrease in peak demand forecast growth rate is attributed to an increas e in demand side management participation as well as higher electricity costs and a decrease in economic development in Florida. The 2008 ten year net internal dema nd forecast includes the effects of 3,613 MW of potential demand reductions from the use of lo ad management (1,834 MW of residential & 1,073 MW of commercial/industrial) and interruptible demand (706 MW) by 2017.

FRCC employs two different techniques to assess the peak demand uncertainty and variability. First, FRCC develops regional ba ndwidths or 80 percent confid ence intervals on the projected demand. The 80 percent confidence intervals on peak demand can be interpreted to mean that there is a 10 percent probability that in any year of the forecast horizon that actual observed load could exceed the high band. Likewise, there is a 10 percent probability th at the actual observed load in any year could be less than the low band in the confidence interval. The purpose of developing bandwidths on peak de mand is to quantify uncertainties of demand at the regional level. This would include w eather and non-weather demand variab ility such as demographics, economics, and price of fuel and electricity.

Monte Carlo simulations on peak demands are perf ormed to arrive at a probabilistic distribution as to range and likelihood of this range of outco mes of peak demand. Factors that determine the level of demand for electricity are assessed in terms of their own vari ability and this variability is incorporated into the simulati ons. The regional aggregated peak demand for the FRCC is established using these simulations.Regional Reliability Assessments

87 2008 Long-Term Reliability Assessment Generation FRCC supply-side resources considered for this 10 year assessment are categorized as Existing Certain, Existing Uncertain and Planned. Th e FRCC Region counts on 50,629 MW of Existing Certain resources of which 55 MW are hydro and 462 MW are Biomass. 127 There are a total of 1,054 MW of Existing Uncertain re sources identified for 2008 a nd increasing to 1,966 MW by 2017. In addition, there are a total of 476 MW of Planned resources for 2008 of which 11 MW are Biomass. Planned resources by 2017 are ex pected to be 15,959 MW of which 201 MW are categorized as Biomass

FRCC entities have an obligation to serve and this obligation is refl ected within each entity’s 10- Year Site Plan file annually with the Florida Public Servi ce Commission. Therefore, FRCC entities consider all future capacity resources as “Planned” and included in Reserve Margin calculations.

Purchases and Sales The FRCC Region does not consider non-firm, expected or provisi onal purchases and sales as capacity resources in the determination of the Region’s Reserve Margin. The expected firm interregional purchases for 2008 are 2,448 MW and expected to decrease by 2017 to 846 MW. The FRCC Region does not rely on external re sources for emergency imports and reserve sharing. However, there are emergency power contracts (as available) in place between SERC and FRCC members

Fuel Although the FRCC has reviewed various types of fuel supply vulnerabi lity issues in the past, the increased reliance of generating cap acity on natural gas has caused the FRCC to address this fuel type specifically. The FRCC continues coordi nation efforts among natural gas suppliers and generators within the region. The recently revised FRCC Gene rating Capacity Shortage Plan 128 includes specific actions to addres s capacity constraints due to na tural gas availability constraints and includes close coordination with the pipeline operators serving the Region. The FRCC Operating Committee has also developed the pr ocedure, FRCC Communi cations Protocols – Reliability Coordinato r, Generator Operators and Natu ral Gas Transportation Service Providers 129 , to enhance the existing coordination betw een the FRCC Reliability Coordinator and the natural gas pipeline operators and in response to FERC Order 698.

Currently, the expected percentage of generation capacity whose primary fuel is natural gas is 58% and that whose primary fuel is coal-f ired is 14% within the FRCC Region by 2017. Presently, the FRCC Region is not anticipating any fuel supply and/or delivery problems for either natural gas or coal.

Transmission Currently, individual transmission owners plan to construct 508 miles of 230 kV and 80 miles of 500 kV transmission lines during the 2008-2017 planning horizon. The existing transmission system of the FRCC Region consists of 1,350 miles of 500 kV tran smission lines and approximately 5,850 miles of 230 kV transmission lines.

127 The FRCC Region categorizes the following fuels as Biomass: Agricultural by-pr oducts, biogases, straw, energy crops,

municipal solid waste, sludge waste, peat, railroad ties, utility po les, wood chips and other solids.
128 See pages P6:2-32 of the document:

https://www.frcc.com/Reliability/Sh ared%20Documents/FRCC%20Handbook%200208.pdf
129 https://www.frcc.com/Reliability /Shared%20Documents/FRCC%20Comm unications%20Protocols%20102207.pdfRegional Reliability Assessments

88 2008 Long-Term Reliability Assessment Operational Issues No transmission maintenance outages of any significance are schedule d during seasonal peak periods over the forecast horiz on. Scheduled transmission outag es are typically performed during off seasonal peak periods to minimize any im pact to the bulk power system. In addition, there are no foreseen environmental and/or regula tory restrictions that can potentially impact reliability in the FRCC region throughout the assessment period.

Reliability Assessment Analysis

The Florida Public Service Commission (FPSC) require s all Florida utilities to file an annual Ten Year Site Plan 130 that details how each utility will manage growth for the next decade. The data from the individual plans is aggregated into the FRCC Load and Resource Plan 131 that is produced each year and filed with the Florid a Public Service Commission. The FRCC 2008 Load and Resource Plan shows the average FRCC Reserve Margin of 29% over the winter peaks and a 24% Reserve Margin over the summer peaks for the next ten years. The 15% (20% for Investor Owned Utilities) Reserve Margin criteria required by the FPSC app lies to all 10 years of the planning horizon. The calcula tion of reserve margin includes firm imports into the region and does not include excess merchant generating capacity (energy only) that is not under a firm contract with a load serving entity.

The FRCC has historically used the Loss-Of-Loa d-Probability (LOLP) anal ysis to confirm the adequacy of reserve levels for peninsular Florida. The LOLP analysis incorporates system generating unit information (e.g., Ava ilability Factors and Forced Ou tage Rates) to determine the probability that existing and planned resource additi ons will not be sufficient to serve forecasted loads. The objective of this study is to establish resource levels su ch that the specific resource adequacy criterion of a maximum LOLP of 0.1 day in a given year is not exceeded. The results of the most recent LOLP analysis conducted in 2006 indicated that for the “most likely” and extreme scenarios (e.g., extreme seasonal demands; no availability of firm and non-firm imports into the region; and the non-availabi lity of load control programs), the peninsular Fl orida electric system maintains a LOLP well below the 0.1 day per year criterion. The FRCC is planning to conduct the next LO LP analysis by 2009.

The amount of resources internal to the region or subregion that are relied on to meet the minimum 15% Reserve Margin throughout the a ssessment period varies from 51,104 MW to 66,588 MW. The amount of resources external to the region/subregion that are relied on to meet the Reserve Margin for the assessment pe riod vary from 2,448 MW to 846 MW by 2017.

FRCC is projecting a net increase (i.e., additio ns less removals) of 15,959 MW of new installed capacity over the next decade, compared to the 14,792 MW projected by la st year’s ten-year forecast. Of this net increase, 12,842 MW are designated for gas-fired operation in either simple-cycle or combined-cycle configurations, 738 MW 132 are anticipated for coal-fired operation, 2,927 MW designated as new and upgr aded nuclear, 201 MW are designated as Biomass, and 749 MW are related to oil-fired un its that have been de -rated, retired and/or

130 https://www.frcc.com/Planning/default .aspx?RootFolder=%2fPlanning%2fShared%20Documents%2fT en%20Year%20Site%

20Plans%2f2008&FolderCTID=&View=%7bFBDE89E4%2dE66F%2d40EE%2d999D%2dCFF06CF2A726%7d
131 https://www.frcc.com/Planning/Shared%20Documents /Load%20and%20Resource%20Plan/2008%20LRP_Web.pdf
132 The expected coal-fired generation decr eased by 3889 MW since 2007 primary due to environmental concerns at the State

level. The majority of this decrease in planned coal-fired generation was replaced with gas-fired units.Regional Reliability Assessments

89 2008 Long-Term Reliability Assessment converted to another fuel type. Gas-fired gene ration continues to dominate a high percentage of new generation. It is forecast that electrical en ergy produced from natural gas generators will increase from 40 percent in 2007 to 55 percent in 2017.

For capacity constraints due to inadequate fu el supply, the FRCC State Capacity Emergency Coordinator (SCEC) along with th e Reliability Coordinator (RC) have been provided with an enhanced ability to assess Regi onal fuel supply status by initiating Fuel Data Status reporting by Regional utilities. This process relies on utilitie s to report their actual and projected fuel availability along with alternate fu el capabilities, to serve their pr ojected system loads. This is typically provided by type of fuel and expressed in terms relative to forecast loads or generic terms of unit output, depending on th e event initiating the reporting process. Data is aggregated at the FRCC and is provided, from a Regional perspective, to the RC, SCEC and governing agencies as requested. Fuel Data Status reportin g is typically performed when threats to Regional fuel availability have been identified and is quickly integrated into an enhanced Regional Daily Capacity Assessment Process along with various ot her coordination protocol s to ensure accurate reliability assessments of the Region and also ensure optimal coordination to minimize impacts of Regional fuel supply i ssues and/or disruptions.

Fuel supplies continue to be ad equate for the region and these supplies are not expected to be impacted by extreme weather during peak load conditions. There are no identified fuel availability or supply issues at th is time. Based on current fuel di versity, alternate fuel capability and preliminary study results, the FRCC does not anticipate any fuel transportation issues affecting capability during peak peri ods and/or extreme weather conditions.

The FRCC ensures resource adequacy by main taining a minimum 15% Reserve Margin to account for higher than expected peak demand due to weather or other uncertainties. In addition, there are operational measures available to reduce the peak demand such as the use of Interruptible/Curtailable load, DLC (HVAC, Wate r Heater, and Pool Pump), Voltage Reduction, customer stand-by generation, emergency contracts and unit emergency capability.

The FRCC Region has not identified any unit retirem ents that could have a significant impact on reliability. The majority of the units in the F RCC Region that are classifi ed to be retired are typically converted and re-pow ered to run on natural gas.

The FRCC Region does not have an official definition for deliverability. However, the FRCC Transmission Working Group (composed of transmi ssion planners from F RCC member utilities) conducts regional studies to ensure that all dedicated firm resources are deliverable to loads under forecast conditions and othe r various probable scen arios to ensure the robustness of the Bulk Electric System (BES). In addition, the FRCC Transmission Working Group evaluates planned generator additions to ensure the proposed interconn ection and/or in tegration is acceptable to maintain the reliability for the BES within the FRCC Region. Presently, the FRCC has not identified any deliverability c oncerns with regards to firm resources.

Availability and deliverability of external reso urces are ensured by firm transmission service, purchase power contracts and transmission assessment s. These external resources were included in the “FRCC Long Range Study (2009 – 2017)” de monstrating the deliverability of these resources and no deliverability concerns identified.Regional Reliability Assessments

90 2008 Long-Term Reliability Assessment Major transmission additions requ ired to support the addition of new resources in the 2013 – 2017 time frame include, but not limited to, majo r 500 kV (~80 miles) and 230 kV (~160 miles) transmission lines. Construction of 500 kV transmission lines is considered to be a long lead time project.

The FRCC Region is planned and operated such that NERC Reliability Standards are met without the need to identify any specific cr iteria for minimum dynamic reactive reserve requirements or transient voltage-dip criteria. Transient and dynamic stability studies are performed by the FRCC and no issues have been identified that would impact years 1-5 of the time period. Small signal analysis is performe d when damping issues are identified during transient and/or dynamic stability studies. Volta ge security assessments performed in the Region involve identifying the worst case conditions such as the unavailability of multiple units. In addition, the FRCC has performed load sensitivity analyses in the short term time frame using available load models representing induction mo tors and no issues ha ve been identified.

Under firm transactions, reac tive power-limited areas can be identified during transmission assessments performed by the FRCC. These reactive power-limited areas are typically localized pockets that do not affect the bulk power system. The “FRCC Long Range Study (2009 – 2017)” did not identify any reactiv e power-limited areas that w ould impact the bulk electric system during the entire planning horizon time pe riod. The FRCC Region has not identified the need to develop specific criteria to establish a voltage stability margin.

The FRCC Region has approximately 700 MW of load set for Under Voltage Load-Shedding (UVLS) in localized areas to prevent voltage colla pse as a result of a c ontingency event. The UVLS system is designed with multi ple steps and time delays to shed only the necessary load to allow for voltage recovery. At this time no a dditional load is targeted by UVLS throughout the planning horizon time period.

Based on past operating experience with hurrican e impacts to the fuel supply infrastructure within the Region, the FRCC revised its Generating Capacity Shortage Plan 133 in 2007. This plan can distinguish between generating capaci ty shortages caused by abnormally high system loads and unavailable generating facilities from those caused by short-term, generating fuel or availability constraints. Since a significant po rtion of electric generati on within Florida uses remotely supplied natural gas, the plan specifically distinguishes generating capacity shortages by primary causes (e.g., hurricanes and abnormally high loads) in orde r to provide a more effective Regional coordination.

Currently, the FRCC Region is not experiencing a drought and therefore, no reliability impacts due to a drought are anticipa ted over the next few years.

The FRCC Region participants perform various tr ansmission planning st udies addressing NERC Reliability Standards TPL-001 through TPL-004. These studies include long range transmission studies and assessments, sensitivity studies addressing specific issu es (e.g., Extreme summer weather, Off-peak conditions), interconnection and integrati on studies and interregional
assessments.

133 https://www.frcc.com/Reliability/Shared%20Documents/FRCC%20Handbook%200208.pdf , pages P6:2-32Regional Reliability Assessments

91 2008 Long-Term Reliability Assessment The results of the short-term (first five year s) study for normal, single and multiple contingency analysis of the FRCC region show that the therma l and voltage violations occurring in Florida are capable of being managed su ccessfully by operator interventi on. Such operato r intervention can include generation re-dispatch, system reconfiguration; react ive device control and transformer tap adjustments. Major additions or changes to the FRCC transmission system are mostly related to expansion in order to serve new demand and therefore, none of these additions or changes would have a significant impact on the reliability of the transmission system.

Transmission constraints in the Central Florida area may require remedial actions depending on system conditions creating increased west-to-eas t flow levels across the Central Florida metropolitan load areas. Based on the committed proj ects and expected generation dispatch, it is expected that these remedial actions will continue in this area through 2010. Permanent solutions consisting of new proposed facilities and the rebuilding of existing facilities have been identified and implementation of these solutions is underway. Some of these propo sed facilities include constructing a new 230kV tr ansmission line from West Lake Wales to Intercession City and rebuilding the existing transmission line fr om West Lake Wales to Intercession City.

The long-range (remaining five y ears) study results reveal devel oping thermal and voltage issues in several areas in the FRCC region which the res ponsible utilities have studied in more detail. These areas include northwest Florida around Talla hassee and the Avon Park area northwest of Lake Okeechobee. The northwest Florida i ssues are being addressed by interregional coordination and proposed projects expected to be in-service be ginning in the summer of 2009 and extending through 2013. The Avon Park area i ssues are being addressed by implementing a Special Protection Scheme and converting an existing 115 kV transmission line to 230 kV.

FRCC transmission owners evaluate new technologies such as FACTS devices and high temperature conductors to address specific transmi ssion conditions or issues. Presently, there are several transmission lines constructed with high temperature conductors within the FRCC Region. However, at this time there are no FACTS devices installed with the Region. FRCC transmission owners consider enhancements to existing tr ansmission planning tools (e.g., enhancements to existing software, new software, etc.) to address the expected planning needs of the future.

Transmission owners within the FRCC Region have the responsibility to address short circuit levels within their system. A ny potential short circuit concer ns identified by interconnection studies or other studies are addressed by the indi vidual transmission owner. Resolution of short circuit concerns is typically addressed by replac ing existing equipment, adding equipment and/or reconfiguring the system. Presently, the FRCC Region has not identifi ed any short circuit mitigation techniques that are projected to impact reliability.

FRCC transmission owners have not identifi ed any reliability impacts due to aging infrastructure. Generally, maintenance program s developed and performed by the transmission owners can extend the life of equipment.

Guidelines for on-site spare generator step-up (GSU) and auto transformers are developed by generator and transmission owners to addres s specific needs. The FRCC Region does not coordinate or develop spare transformer programs.Regional Reliability Assessments

92 2008 Long-Term Reliability Assessment Other Region-Specific Issues that were not mentioned above

The FRCC is not anticipating any other reliability concerns thr oughout the 10 year study period. Unexpected potential reliability real-time issues identified by the Reliability Coordinator can be resolved with existing operational procedures.

Industry entities within the F RCC Region address workforce retent ion and recruitment issues by providing various monetary and non-monetary compen sation strategies. Some of these strategies may include higher base pay, end of year bonus, stock options with a vested time frame, signing bonus, additional vacation, work fro m home options and improved health, medical and dental benefits.

Region Description FRCC’s membership includes 26 members, which is composed of inves tor-owned utilities, cooperative systems, municipal utilities, power marketers, and independent power producers. Historically, the region has been divided into 11 Balancing Author ities. As part of the transition to the ERO, FRCC has registered 79 entities (both members and non-members) performing the functions identified in the N ERC Reliability Functional Mode l and defined in the NERC Reliability Standards glossary. The region cont ains a population of more than 16 million people, and has a geographic coverage of about 50,000 square miles over peninsular Florida. Additional details are available on the FRCC we bsite (https://www.frcc.com/default.aspx).Regional Reliability Assessment

93 2008 Long-Term Reliability Assessment MRO Highlights

Sufficient generating capacity is expected within the Midwest Reliability Organization to main tain adequate capacity margins through 2017. Through the 2017 planning horizon, the MRO expects its transmission system to perform adequately, assuming proposed reinforcements are completed on schedule. The MRO Transmission Owners estimate that 833 miles of 500 kV DC, 1,068 miles of 345 kV, and 996 m iles of 230 kV transmission will be installed in the MRO re gion over the next ten years.

The next ten years will see a very rapid load grow th in the oil fields and coal bed methane fields at the Bakken Formation in western North Dakota and eastern Montana. Constructing adequate facilities to handle this growth is on a fast tract. Also during the 2008-2017 pe riod, a very large amount of wind generation will be expected to be added in th e MRO footprint. In 2017, the existing wind generation plus th e planned and proposed wind gene ration would be serving about 16% of the projected MRO net inte rnal demand at summer peak. Operating the system with the wind generation additions in the MRO region will be a challenge.

MRO - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

94 2008 Long-Term Reliability Assessment MRO - Projected On-Peak Capacity by Fuel-Mix

0 5,000 10,000 15,000 20,000 25,000 30,000

Coa l Hy dro Gas Dual F u el Nu clea r O il W ind O th

erMW 2008

2017

MRO US - Summer Capacity Margin Comparison

-10%

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

95 2008 Long-Term Reliability Assessment MRO US Capacity vs Demand - Summer

20 25 30 35 40 45 50 55 60

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity Resources

MRO CA - Winter Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2008/09 2009/10

2 01

0/11 201 1/12 201 2/13 2013/ 14 2014/ 15 2015/ 16 2016/ 17 2017/ 1 8Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

96 2008 Long-Term Reliability Assessment MRO CANADA Capacity vs Demand - Winter

5 6 7 8 9 10 11

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessment

97 2008 Long-Term Reliability Assessment MRO Self-Assessment

Introduction

Sufficient generating capacity is expected w ithin the Midwest Reliability Organization to maintain adequate capacity margins thr ough 2017. Through the 2017 planning horizon, the MRO expects its transmission system to perfor m adequately, assuming proposed reinforcements are completed on schedule. The MRO Transmi ssion Owners estimate that 833 miles of 500 kV DC, 1,068 miles of 345 kV, and 99 6 miles of 230 kV transmission will be installed in the MRO region over the next ten years.

The next ten years will see a very rapid load grow th in the oil fields and coal bed methane fields at the Bakken Formation in western North Dakota and eastern Montana. Constructing adequate facilities to handle this growth is on a fast tract. Also during the 2008-2017 pe riod, a very large amount of wind generation will be expected to be added in th e MRO footprint. In 2017, the existing wind generation plus th e planned and proposed wind gene ration would be serving about 16% of the projected MRO net inte rnal demand at summer peak. Operating the system with the wind generation additions in the MRO region will be a challenge.

The MRO is a Cross-Border Regional Entity repr esenting the upper Midwest of the United States and Canada. MRO is organized consistent with the Energy Policy Act of 2005 and the bilateral principles between the United Stat es and Canada. The MRO membership consists of the former and existing members of the MAPP Generation Reserve Sharing Pool (GRSP), members from the former Mid-America Interconnected Network, Inc. (MAIN), 134 and Saskatchewan Power Corporation (SaskPower), one of the two Canadian members. 135 The new bulk power system transmission facilities are, however, described by geographical areas in the MRO footprint: Minnesota, Nebraska, Dakotas, Iowa, and Wisconsin in the MRO-U.S., and Manitoba and Saskatchewan in the MRO-Canada.

Demand Each MRO member’s peak demand forecast in cludes factors involving expected economic trends (industrial, commercial, agricultural, resi dential) and normal weat her patterns. From a regional perspective, there were no significant ch anges in this year’s forecast assumptions in comparison to last year’s assumptions.

. The MRO region as a whole is summer-peaking. The MRO-U.S. summer peak net internal demand is expected to increase at an average rate of 1.8% per year during the 2008–2017 period, as compared to 2.3% predicted last year for the 2007–2016 period. This year's projection of 1.8% compares closely with the 1.9% predic ted two years ago for the 2006–2015 period. The

134 The former MAIN members are Alliant Energy, Wisconsin P ublic Service Corp., Upper Peninsula Power Co., Wisconsin

Public Power Inc., and Madison Gas and Electric. The American Transmission Company (ATCLLC) is the transmission owner which encompasses the last four former MAIN members and Alliant Energy-Wisconsin Power & Light, which is the Wisconsin portion of Alliant Energy. The ITC Midwest is the transmission provider for the Iowa and Minnesota portion of Alliant Energy.
135 The other Canadian member is Manitoba Hydro which, for th e purpose of this assessment, is included in the MAPP GRSP

group.Regional Reliability Assessment

98 2008 Long-Term Reliability Assessment higher growth rate predicted last year can be attributed to higher trending resulting from actual 2006 demands that occurred within the region. F actors that can influenc e higher trending from year to year are weather extremes and economic assumptions.

The MRO-Canada summer peak net internal demand is expected to increase at an average rate of 1.3% per year during the 2008–2017 period, as compar ed to 1.1% predicted last year for the 2007–2016 period. While the MRO region as a whol e is summer-peaking, the MRO-Canada is a winter-peaking sub-region. The MR O-Canada winter peak demand is expected to increase at an average rate of 1.2% per year during the 2008–2017 period, as compared to 1.0% predicted last year for the 2007–2016 period. The higher winter peak growth rate predic ted this year stems from the new loads (mining, chemical plants , pipelines, and ethanol plants) requesting connections that were committed in the last forecast.

MRO staff sent the NERC spreadsheets to each Load Serving Entity within the MRO region and collected individual member’s load forecast da ta. MRO staff then combined the individual inputs from these spreadsheets to calculate the MRO regional tota ls without applying a diversity factor to the regional demand.

Interruptible Demand and Demand Side Manageme nt (DSM) programs, presently amounting to approximately 6.2% of the MRO’s Projected Total Internal Peak Demand, are used by a number of MRO members. A wide variet y of programs, including direct load control (such as electric appliance cycling) and interruptible lo ad are used to reduce peak demand.

Generation Existing resources considered as “Certa in” amount to 52,900 MW for 2008. Existing “Uncertain” resources amount to 3,397 MW fo r 2008. The “Planned” resources for the MRO region amount to 1,518 MW starting in 2008 and are estimated to increase to 5,514 MW by 2017. The “Proposed” resources for the MRO region amount to 591 MW starting in 2008 and are estimated to increase to 14,727 MW by 2017. All these capacity numb ers are net expected on-peak values.

Existing wind generation amounts to 3,997 MW of nameplate capacity for summer 2008. Assuming a 20% capacity value, 136 799 MW of the nameplate amount is expected to be “Certain” (available at peak lo ad). Wind generation that is “Planned” for the next 10 years amounts to 1,028 MW nameplate, with an expected on-peak value of 213 MW.

A significant portion of the “Propos ed” resources consists of wind generation. This is based on generation within the Midwest ISO interconn ection queue that is in the MRO Region. “Proposed” on-peak wind resources are expected to be 467 MW starting in 2008 and increasing to 7,895 MW by 2017. The “Proposed” nameplate wind generation for the MRO Region amounts to 2,336 MW in 2008 and increasing to 39,713 MW in 2017.

136 This assumption is based on the fact that the Midwest ISO a llows a capacity credit of 20 percent of nameplate capacity for

wind generation. That would acc ount for most, but not all of the wind capacity within the MRO region. MRO members, like those who are MAPP members, also submitted data for their existing wind facility, as well as future planned facilities. As the result, the MRO overall on-peak value may not nece ssarily equal 20 percent of nameplate capacity.Regional Reliability Assessment

99 2008 Long-Term Reliability Assessment Existing Biomass generation amounts to 275 MW and is estimated to increase by only 76 MW over the next 10 years. This generation is typically expected to be available on peak.

For this year’s assessment, NERC has re-defined how resources are reported. Existing resources are categorized as either “Certain” or “Uncertai n.” Future resources ar e categorized as either “Planned” or “Proposed.” Three capacity marg ins are calculated for the 10-year period:

• Existing Certain + Planned

• Existing Certain + Planned + 100% of Proposed

• Existing Certain + Planned + (Proposed x Confidence Factor)

Since the “Proposed” generation was primar ily determined from the MISO generation interconnection queue, a confidence factor was applied by MRO staff to reduce the proposed amount to a realistic expected value. Confiden ce factors were higher in the earlier years since these resources were assumed to be more likely to be built. In later ye ars, a 20% confidence factor was applied, which is consistent with actual generation reali zed historically from interconnection queues.

There are uncertainties involve d when using a generation inte rconnection queue. In-service dates can be deferred or slip. Similarly, some gene ration that is expected within the next several years may in fact qualify as “Planned” resources. MRO staff worked with generation owners to verify/update in-service dates of key future generation (i.e., larg e coal units) and to establish reasonable confidence factors. In establishi ng these confidence factors, MRO staff also considered that the LSEs within the MR O region have an obligation to serve.

The confidence factors app lied for each year are:

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 50% 45% 40% 35% 35% 35% 20% 20% 20% 20%

For the purposes of this assessment, capacity marg ins using adjusted propos ed resources will be compared to target margin levels.

Purchases and Sales For 2008, the MRO is projecting tota l firm purchases of 1,787 MW fr om sources external to the MRO region. The MRO has projected 731 MW of to tal sales to load outside the MRO region. Both purchases and sales become progressively lower in future years. This is typical and purchases/sales will likely increase as each ye ar approaches. By NERC definition, capacity margins are to be calculated using the net firm interchange. However, the net import/export of the MRO region can vary at peak load, depending on system conditions and economic conditions. For example, firm exports may not n ecessarily be scheduled on during internal peak load periods.

Firm transactions from the MRO-Canada (Saska tchewan and Manitoba) into the MRO-U.S. are limited to 2,415 MW due to the operating security limits of the two interf aces between the two provinces and the United States. Firm trans actions from MRO-Canada into the MRO –U.S. reflex existing and future long term contractua l transactions. For example, for summer 2008,Regional Reliability Assessment

100 2008 Long-Term Reliability Assessment approximately 1,400 MW of firm transactions fr om Manitoba Hydro into the MRO-U.S. is expected. These long-term firm sale transactions are based on dependable energy expected to be available under the lowest reco rded historic water flow (d rought) conditions in Manitoba

. Throughout the MRO region, firm transmission servic e is required for all generation resources that are used to provide firm capacity, which also means that these firm generation resources are fully deliverable to the load. Th e MRO is expected to meet the various reserve margin targets without needing to include energy-only, un certain, or transmissi on-limited resources.

Transmission providers within the MRO region treat Liquidated Damage Contracts according to their individual tariff policies. Most MRO me mbers are within non-ret ail access jurisdictions (except for Upper Michigan), a nd therefore liquidated damages pr oducts are not typically used.

Most MRO members count on firm capacity from outside of the region for emergency and reserve sharing requirements. However, Saskatch ewan does not rely on out side resources. It self-supplies all planning and operating reserves.

Fuel 49% of existing MRO generation is coal-fire d, and 13% is natural gas-fired. The MRO considers known and anticipated fuel supply or de livery issues in its assessment. Because there is a large diversity in fuel supply, inventor y management, and delivery methods throughout the region, the MRO does not have a specific mitigation procedure in place should fuel delivery problems occur. The MRO and its members closel y monitor the delivery of Powder River Basin coal to ensure adequate supply. The MRO does not foresee any significant fuel supply and/or fuel delivery issues in the near future.

In Saskatchewan in particular, fuel-supply vulnera bility is generally not c onsidered an issue due to system design and operating practices:

• Coal resources (approximately 47% of gene rating capacity) have firm contracts and are mine mouth, and also stock is maintained in the event that mine operations are unable to meet the required demand of the generating facility. SaskPower has 20 days of on-site stockpile for each of its coal facilities. Strip coal reserves are also available and only need to be loaded and hauled from the mine. These reserves are either 30 or 65 days depending on the coal facility.

• Natural gas resources (approximately 25% of generating capacity) have firm transportation contracts with large natural gas storage facilities located within the province backing thos e contracts up.

• Hydro facilities and reservoirs ar e fully controlled by SaskPower.

Transmission

Minnesota Transmission companies in the Minnesota Ar ea are jointly pursuing major transmission infrastructure investment through the CapX 2020 (Cap X) effort. This coalition of utilities is seeking to enhance the 345 kV grid for load serving purposes with facilities available by 2016.Regional Reliability Assessment

101 2008 Long-Term Reliability Assessment The proposed lines will impact multiple flowgate s. The proposed Fargo - St. Cloud 345 kV line will impact the North Dakota Export flowgate.

The CapX proposed Brookings, SD - Twin Cities 345 kV line may benefit the flowgate of North Dakota Export, and may impact the Lakefield - Lakefield Generation 345 kV line, Fox Lake - Rutland 161 kV line, Rutland - Wi nnebago 161 kV line, and the Lakefield - Fox Lake 161 kV line. Further wind farm development in this region will continue to recreate the flowgate issues unless continued transmission invest ment is made in the region.

The CapX proposed Twin Cities - North Rochester - La Crosse 345 kV line may impact several flowgates, such as the Minnesota - Wisconsin Export Interface, Prairie Island - Byron 345kV, and other lower voltage flowgate s that exist in the Minnesota/ western Wisconsin areas. It is expected that this line will redefine th e Minnesota - Wisconsin Export Interface.

Nebraska Western Area Power Administration and Nebraska P ublic Power District plan to install a third 250 MVA 345/230 kV transformer at the Grand Island substation by the summer of 2009. Both 187 MVA 230/115 kV transformers at the North Platte substation will be replaced with new 336 MVA 230/115 kV transformers by 2009.

Due to rapid load growth in the east central Nebraska region, a Columbus/Norfolk Transmission Expansion Plan, targeted for completi on by the summer of 2010, was developed.

The Public Power Generation Agency plans to c onstruct a second coal-fir ed generating unit at the existing Whelan Energy Center Site near Ha stings, Nebraska, which is expected to begin commercial operation in the spring of 2011 with a net output of 220 MW.

The Omaha Public Power District (OPPD) is constructing a second coal-fired generating unit at the Nebraska City Power Station, which is expe cted to begin commercial operation in the spring of 2009 with a net output of 700 MW.

Lincoln Electric System plans to install a second 345/115 kV transformer at the NW68th & Holdrege substation, with an in-service date of 2010. LES will construct a 26-mile 345 kV line from the Wagener substation to the NW68t h & Holdrege substation, around the northern perimeter of Lincoln, with an in-service date of 2009.

Dakotas About 50 facility additions are scheduled between 2008 and 2014. Facility additions range from new substation equipment such as capacitor bank additions and tran sformers to new transmission line additions. Unexpected load growth in the oil fields and coal bed methane fields at the Bakken Formation in western North Dakota and easte rn Montana has led to a large increase in load in some isolated areas. This unexpected lo ad growth has resulted in individual substation loads that were less than 10 MW at the start of the decade to those projected to be approaching 100 MW now. Facilities to handle this growth are on a fast track.Regional Reliability Assessment

102 2008 Long-Term Reliability Assessment Near-term major transmission projects under cons truction include two 230 kV transmission lines, one from Belfield to a new tap of the Little Missouri - Bowman line called Rhame, and the other from Williston to Tioga. Both are planned for completion by fall 2009.

Out-year projects planned include 230 kV transmi ssion additions in the Huron-Storla area in South Dakota scheduled for 2014.

Iowa The Iowa system is beginning to experience seve ral regional forces incl uding an increase in installed wind power in Minnesota, northern Io wa, and central Illinois, recent base load generation near Council Bluffs followed by Ne braska City (2009), and the development of several new spot loads from ethanol plants. Po wer from wind and coal in western Iowa (and Nebraska) should decrease east – west transfers, while future additional Illinois wind power could again increase east – west and possibly south – north transfer s. New large spot loads from ethanol plants should absorb some of the new generation. The combination of wind and coal generation along with new load will continue to require new transmission to adequately meet transmission planning criteria.

The Iowa companies have seve ral 115 kV, 161 kV, and 345 kV pr ojects planned over the next several years to reinforce Iowa.

Wisconsin Significant transmission and transformer add itions planned to be in-service during 2008-2017 will strengthen the reliability of the Wiscons in-Upper Michigan Systems (WUMS) for summer 2008 and subsequent years.

The WUMS southern interface contains four 345 kV lines and one 138 kV tie line. This interface is thermally limited for critical N-1 contingencie s and voltage stability limited for critical N-2 contingencies during periods of heavy transfers ac ross the interface. Operating guides are used to monitor and manage the constraints during hi gh imports into WUMS across the southern interface. The American Transmission Compan y (ATCLLC) has plans to add a new 345 kV transmission line between the Rockdale and Paddock 345 kV substations that will help to alleviate the southern interface c onstraints. This 345 kV line is e xpected to be in-service in 2010.

Heavy power flows into Michigan ’s Upper Peninsula (UP) from nor theast Wisconsin is expected to continue. The corridor consisting of the th ree 138 kV lines south of the Morgan and Stiles substations continues to be a poten tial constraint that could lead to thermal and voltage violations under contingencies during periods of high flows towards the UP. This constraint is monitored and managed by following an operating guide. Comp letion of new Werner West – Highway 22 – Morgan and Gardner Park – Highway 22 345 kV lines in late 2009 will help to alleviate this constraint.

Manitoba For normal operations with all facilities in service, the Manitoba Hydro system demonstrates adequate performance in terms of facility loading and voltages w ith various operating conditions for the 2008-2017 period. There are no existing cons traints from a system planning perspective.Regional Reliability Assessment

103 2008 Long-Term Reliability Assessment The projects listed below are now underway or pl anned in the next decade and will keep the Manitoba Hydro transmission system operating satisfactorily in the future. Most of the projects are dictated by the need to expand the transmi ssion system to reliably serve growing loads in Manitoba and transmit generation to the export market. Other drivers of expansion are to improve safety, increase effi ciency, and connect new generation. The following are the major projects in the Manitoba area:

• Wuskwatim Generation Outlet Facilities consis t of 296 miles of 230 kV transmission to interconnect the new 223 MW hydro generatin g plant into the Ma nitoba northern AC grid, including:

o Two Wuskwatim-Herblet Lake lines – 2009

o Herblet Lake-The Pas Ralls Islands line – 2010

o Thompson Birchtree static VAR compensator – 2011

• Dorsey Bus Enhancement consists of the Dorsey 230 kV bus being improved with the addition of four 230 kV circuit br eakers and a new connecting bus.

• New 500/230 kV Reil Station consists of esta blishing a new station which will include:

o Installing a 500/230 kV transformer bank

o Sectionalizing the existing Do rsey – Forbes 500 kV line

o Sectionalizing two existing parallel 230 kV lin es from Ridgeway to St. Vital

• Bipole III transmission line runs from Conawapa Station in the north to Riel Station near Winnipeg. The Bipole III scheme with a west si de of the province routing includes:

o ±500 kV HVDC transmission line, about 833 miles long, from Conawapa Converter Station to Riel Converter Station

o 2,000 MW converter station at Conawapa

o Five AC transmission lines approximately 19 miles in length each to connect the Conawapa Converter Station to the northern collector system

o 2,000 MW converter station at Riel, in cluding four synchronous compensators

• Winnipeg Area Transmission Refurbishments c onsist of an estimated 114 miles of 230 kV transmission lines that will be upgraded to ca rry higher loading.

• Part of the Winnipeg to Brandon improvement s includes the addition of a new 43.5 mile 230 kV line from Dorsey to Portage South.

• Several new 230/115 kV and 230/66 kV transforme rs are being added to the system. The sites include the Rosser, Transcona , Stanley, and Neepawa stations.

Saskatchewan Addition of a 99 mile 230 kV transmission line and a 350 MVA 230/138 kV autotransformer in south central Saskatchewan in 2010 is planne d to mitigate post-contingency overloads and provide voltage support in the area.

Operational Issues No significant operational concerns are expected. Operating studies and guide s have been or will be performed for all scheduled transmission or generation outages. When necessary, temporary operating guides will be developed for managing the scheduled outages to ensure transmission reliability.Regional Reliability Assessment

104 2008 Long-Term Reliability Assessment Completion of the Arrowhead – Stone Lake – Gardner Park 345 kV line provides the needed transmission reinforcement on the Wisconsin-Upper Michigan System (WUMS) western interface with Minnesota and improves both the WUMS and MRO transmission reliability and transfer capability. Studies ha ve demonstrated that with high imports into WUMS from Minnesota, there is potential transient voltage r ecovery violation and voltage instability and therefore determined the need for a new interface flowgate comprised of Arrowhead-Stone Lake 345 kV line and King-Eau Claire 345 kV line, called the Minnesota Wisconsin Export (MWEX) Interface. This interface is ma naged as a reciprocal Interconn ection Reliability Operating Limit Flowgate of Midwest ISO and MAPP. The existi ng Minnesota Wisconsin Stability Interface will be retained for prior outage conditions and to gain operati onal experience with MWEX. The existing operating guides for the King – Eau Clai re – Arpin 345 kV line and the Arpin – Rocky Run 345 kV line will be revised accordingly.

The onset of CO 2 regulations as well as the requirement to reduce Critical Air Contaminants such as SO 2 and NO X could cause restrictions to high emitting technologies. The magnitude of these potential impacts, however, is unknown at this time.

Reliability Assessment Analysis For the purpose of this assessment, the MRO used a 15% region-wide reserve margin as a proxy measure of resource adequacy, which is representati ve of the range of rese rve margin targets for the various groups within the MRO, as described below:

• For the MAPP GRSP members, resource adequacy is measured through the accreditation rules and procedures. The MAPP GRSP requires a 15% reserve capacity obligation (RCO) for predominantly thermal systems, and a 10% RCO for predominantly hydro systems. 137 The RCO is established by the MAPP Re stated Agreement and its governing authorities, i.e. MAPP Executive Committee and MAPP Pool Committee. This level of reserve requirements is subject to periodic review based on reserve requirements studies conducted regularly by MAPP. 138 The RCO requires the MAPP GRSP members to maintain their respective minimum reserve ba sed on after-the-fact peak demand; i.e., the members are responsible for maintaining adequate generation to account for load forecast uncertainty. When a new peak occurs, the member will be required to maintain the minimum reserve based on that peak for the ne xt 11 months, or until a new, higher peak takes place. For summer 2008, approximate ly 8,850 MW of generation in the MAPP GRSP (15.7% of MRO net internal capacity) is associated with predominantly hydro systems and only requires a 10% RCO.

• For the former MAIN members, generation resource adequacy is assessed based on LOLE studies previously conducted by the MAIN region. 139 Although conducted on a

137 The MAPP GRSP Handbook, http://www.mappcor.org/asse ts/pdf/GRSP_Handbook_20070116.pdf

. 138 The previous MAPP reserve requirements study was conducted in 2003 by the MAPP Composite System Reliability Working

Group. This study is not posted on th e MAPP website, but it is available upon request from Brian Glover, MAPPCOR (651- 855-1715 or bp.glover@mappcor.org ) . The MAPP 2008 LOLE Study is ongoing and is expected to be completed by October 1, 2008. 139 In the former MAIN region, MAIN Guide 6 adopte d a resource adequacy criterion of 0.1 days/year,

http://www.maininc.org/bg/guide6.pdf. Studies concerning LOLE calc ulations for the former MA IN Region are available. The 2005 study is located at http://www.maininc.org/files/MG 6GenerationReliabilityStudy2005_14.pdf

. Other studies are found by navigating through http://www.maininc. org/files/ files.htm.Regional Reliability Assessment

105 2008 Long-Term Reliability Assessment yearly basis, MAIN’s LOLE studies consis tently recommended a minimum long-term planning reserve margin of 16%.

• Saskatchewan's reliability criterion is ba sed on annual expected unserved energy (EUE) analysis and equates to an approxima te 15% reserve margin requirement. 140

Since NERC requests that capacity margins be use d, a 13% region-wide capacity margin is used as a proxy measure of resource adequacy (target level) in the MRO region. A 15% planning reserve margin equates to a 13.04% capacity margi n. Using the “Proposed” resources after they have been appropriately adjusted by the confidence factors, the projected capacity margins for the MRO region, MRO-U.S., and MRO-Canada are as follows:

• MRO-Total : The summer peak capacity margins for the full MRO region range from 17.2% to 14.1% for the 2008-2017 period.

• MRO-U.S. : The summer peak capacity margins for the MRO-U.S. sub-region range from 16.8% to 13.1% for the 2008-2017 period.

• MRO-Canada : The summer peak capacity margins for the MRO-Canada subregion range from 22.6% to 18.7% for the 2008- 2017 period. For winter peak, the MROCanada capacity margins range from 19.5% to 14.0% for the 2008-2017 period.

The graph below shows these projected capacity ma rgins graphically, which all exceed the target capacity margin of 13%.

Capacity Margin Comparison

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

MRO - Summer US - Summer Canada - Summer Canada - Winter Target

140 Saskatchewan Power's generation adequacy studies for the prov ince of Saskatchewan are not publicly posted or released.

Information regarding these studies ma y be obtained by contacting SaskPower.Regional Reliability Assessment

106 2008 Long-Term Reliability Assessment The former MAIN members now within MRO use a minimum long-t erm planning reserve margin of 16% and a minimum short-term planni ng reserve margin of 14%. For the remainder of the MRO, reserve margin requirements do not vary based on short term vs. long term.

This year’s assessment cannot be readily compared with last year’s assessment due to the significant changes in how resources were define d and accounted for. Last year’s assessment only included “Committed” future resources when calculating capacity margins. Consequently capacity margins did not meet target levels for most of 10 year period fo r most regions. This year, a portion of “Proposed” re sources are being included fr om generation interconnection queues. The projected capacity margins based on this year’s resource definitions should more accurately capture future generatio n than last year’s assessment.

The MRO members accounted for resource unavailabil ity being higher than expected due to fuel interruptions or other conditions such as extended drought or for ced outages, and peak demands being higher than expected due to extreme w eather (e.g., 90/10 forecast) or other conditions within the determination of adequate generation reserve margin levels, as follows:

• Both the MAPP Generation Reserve Shari ng Pool members and the former MAIN members within MRO consider generator forc ed outage rate increase and load forecast uncertainty within their Loss of Load Expectation (LOLE) studi es to determine the target reserve margin levels that satisfy the LOLE criteria of 0.1 day per year or 1 day in 10
years.

• For Saskatchewan, a winter-peaking system, wint er peak load is forecasted on a heating season basis and represents the highest level of demand placed on the supply system. The winter forecast is normalized to account for cold weather based on a 30-year average weather pattern. Forecasts are developed for Saskatchewan to cover possible ranges in economic variations and other uncertainties such as weather using a Monte Carlo simulation model to reflect those uncertainties. This model considers each variable to be independent from other variab les and assumes the distribution curve of a probability of occurrence of a given re sult to be normal. Results are based on an 80 per cent confidence interval. This means that a probability of 80% is attached to the likelihood of the load falling within the bounds created by the high and low forecasts.

The MRO region does not count on energy-onl y, existing-uncertain wind and transmissionlimited resources for reliability purposes.

None of the planned unit retirements within the MRO Region will have a significant impact on reliability.

Generation deliverability is perf ormed by Transmission Providers within the MRO region. Links to deliverability criteria within the MRO region are:

• http://www.midwestiso.org/page /Generator+Interconnection

• http://www.mappcor.org/content/policies.shtml

• https://www.oatioasis.com/spc/Regional Reliability Assessment

107 2008 Long-Term Reliability Assessment Throughout the MRO region, firm transmission servic e is required for all generation resources that are used to provide firm capacity; therefore, these firm generation resources are fully deliverable to the load.

No specific analysis was performed by MRO to eval uate whether external resources are available and deliverable. However, the MAPP GRSP, former MAIN utilities, and Saskatchewan require external purchases to have a firm contract and firm transmission service to be counted as firm capacity.

The major transmission additions required to support the addition of new resources and new loads in the MRO in the 6-10 y ear period include the following:

• The network upgrades identified for the add ition of a 280 MW generating unit at Nelson Dewey include a new 161 kV transmission line approximately 15 miles long from ATCLLC’s Nelson Dewey substation in Wisc onsin to a new ITC Midwest’s switching station located between the existing Li berty and Lore 161 kV substations in. 141 The expected in-service year fo r the generation and the require d network upgrades is 2013.

• The new 230 kV transmission facilities in the western Minnesota area w ill be required for the proposed Big Stone II generation project pl anned to be on-line in 2013. Some of this new transmission may be designed for operation at 345 kV.

• The CAPX 345 kV line from Brookings, SD to th e Twin Cities, MN is in the Minnesota certificate of need process and is being cons tructed to support a dditional wind generation and other potential resources and also to support load se rving needs. The expected service date is 2014.

There are no stability issues that could impact the reliability anticipated during the reported period. The following is information on stabilit y-related criteria used within the MRO:

• For MAPP members, the specific MAPP bulk tran smission reliability criteria and study methods, assumptions, and proc edures are outlined in the MAPP Member Reliability Criteria and Study Procedure 142 and the MAPP Design Reliability Subcommittee Policies and Procedures

. 143 Those criteria are to be used for MAPP planning and operating studies.

• For the former MAIN members, dynamic r eactive margin is part of the ATCLLC Planning Criteria, which is determined using a reduction to the reported reactive capability of synchronous machines. A 10 percent dynamic reactive margin is required in the intact system and a 5 percent dynami c reactive margin is required under NERC Category B contingencies. ATC LLC has transient voltage dip criteria. Voltage recovery is required to be within 70 percent and 120 percent of nomin al immediately following the clearing of a disturbance. Volta ge recovery is required to be within 80 percent and 120 percent of nominal between 2.0 and 20 seconds following the clearance of a disturbance. Due to many years of coordinated planning as a MAPP member in the past, ITC Midwest retains the MAPP criteria.

141 G527 Interconnection Fa cilities Study Report available at http://oasis.midwestiso.org/doc uments/ATC/Cluster_8_Queue.html

142 http://www.mapp.org/assets/pdf/Reliability%20Criteria%20Studi es%20Manual/As%20of%20November%202004.pdf

143 http://www.mapp.org/assets/p olicies/DRS%20Policies%20and%20Procedures_February%202008.pdfRegional Reliability Assessment

108 2008 Long-Term Reliability Assessment • Saskatchewan addresses dynamic reactive requirements through operating guides and planning studies. No stability issues are an ticipated that will impact reliability in Saskatchewan. Saskatchewan's guideline for post-disturbance transient voltage dip is 0.7 p.u. and 1.2 p.u.

A voltage stability study was done for the major ity of the MRO region (excluding Saskatchewan and WUMS) and was published in 2005. The study found no single contingenc y that resulted in system collapse or cascading.

Voltage stability margin is part of the AT CLLC Planning Criteria. Under NERC Category B contingencies, the steady state sy stem operating point of selected areas for evaluation is required to be at least 10 percent away from the nose of the P-V curve.

Several members within the MRO region have localized UVLS programs to prevent localized low voltage conditions. These programs are not required to protect the bulk power system.

Emergency conditions within the MRO regi on would be managed through the Reliability Coordinators. Resource and/or transmission defi ciencies would be offset by planning reserves and external markets. Operational measur es, which would include emergency plans, interruptible load contracts, public appeals, and rotating outages, woul d be implemented as
necessary.

The MRO region as a whole is not experiencing a drought. However, reservoir water levels continue to remain low in Montana, North Dakota, and South Dakota, and will reduce the magnitude and duration of power transfers out of the Dakotas. As a result, there will likely be non-firm imports of power from south and east of the MRO region into the MRO region to replace the energy reduction associated with these low water levels. The Manitoba water condition is normal. Therefore, norma l Manitoba-US exports are likely.

TPL001 – TPL004 planning studies are performed in the MRO region by the various groups, as follows:

• For MAPP and ITC Midwest, a Reliability Assessment Study is performed annually by the MAPP Transmission Planning Subcommittee and its Transmission Reliability Assessment Working Group. NERC Category A (system intact), NERC Category B, and some NERC Category C and known multiple el ement single contingencies outages (such as common tower) are performed according to NERC criteria. A number of NERC Category D contingencies were also evaluate d. Assessments are conducted on model years 2008, 2012 and 2017 for winter peak, su mmer peak, and summer off-peak with high transfer conditions. Dynamic analysis was conducted on 2011 and 2012 summer off-peak with high transfer models.

• Based on the TPL-001 - TPL-004 planni ng studies performed by ATCLLC, 144 reliable operation of the WUMS transmission syst em is expected during the 2008-2017 assessment period.

144 2007 – ATCLLC 10-Year Transmissi on System Assessment Update, http://www.atc10yearplan.com . Also refer to Reliability

First Corporation (RFC) Long Term Tran smission Assessment Studies (on-going), https://www.rfirst.org

, http://www.maininc.org/Regional Reliability Assessment

109 2008 Long-Term Reliability Assessment • Saskatchewan performs ongoing system assessme nts as part of its planning process to integrate new generation and load.

The MRO region uses special protection systems ( SPS) to enhance reliability and currently has 53 SPSs in place. These systems allow the ow ners to meet TPL-001 through TPL-003 Standards per NERC Standard PRC-012. Certain MRO memb ers also use SPSs to meet TPL-004.

New technologies, systems, and t ools that are expected to be deployed (or continue to be deployed) to improve bulk power system reliability within the MRO region includes:

• Distributed Superconducting Ma gnetic Energy Storage Devices,

• Certain High Temperature Low Sag conductors, and

• Software tools such as Physical and Operational Margins/Optimum Mitigation, Production Cost Modeling, Voltage Stabil ity Analysis Tool, and Power World.

In addition, MRO members participate in the review and development of new technologies, systems, and tools through the research activities of the Electric Power Research Institute, Power System Engineering Research Cent er, and CEATI International Inc.

The MRO region Transmission Owners evaluate s hort circuit levels on an on-going basis, and forecasted short circuit levels are currently we ll below available nameplate interrupting ratings.

Companies within the MRO have asset renewal progr ams to invest in transmission infrastructure and replace aging infrastructure before it degr ades reliability. Several companies have reliability-centered maintenance programs.

Policies or guidelines for on-site, spare generator step-up (GSU ) transformers and autotransformers in the MRO region are, as follows:

• ATCLLC does not own any spare GSU transf ormers but owns many medium and large spare autotransformers. Many sites have dedi cated spare units, and system spares are stored at strategic locations. On-site spar es are determined on a case by case basis. ATCLLC participates in the EEI STEP program.

• Saskatchewan does not have a guideline for GSU transformers; however it does have a spare GSU transformer for major base lo ad units. The planning guideline for autotransformers is to have enough installed cap acity so that one may be used as a system spare. Saskatchewan does not share spare transformers with other companies.

• For the rest of the MRO regi on, the need for spare transfor mers is decided on a case-bycase basis.

Other Region-Specific Issues that were not mentioned above Because wind generation is a variable resource , the operational impacts of the large amount of proposed wind generation in the MRO region will need to be closely monitored for any reliability impacts. The impact of wind genera tion will be reported in more detail in the MRO Scenario Assessment. This report will be provided to NERC in May 2009.Regional Reliability Assessment

110 2008 Long-Term Reliability Assessment In 1992, conventional base load generation (coal, hydro, nuclear) amounted to 90% of the total generation in the former MAPP Region, which is now a major portion of the MRO. In 2008, conventional base load generation amounts to about 73% of the tota l generation within the MRO. Over the next ten years, planned and proposed wind generation on a nameplate basis makes up about 77% (40,740 MW out of 52,8 73 MW) of the resource additi ons within the MRO Region, based on the Midwest ISO generation interconnectio n queue. Assuming that all of the planned and proposed wind generation will be built, and assu ming that the expected on-peak value of the wind nameplate capacity (8,108 MW) is available and deliverable at peak load, this would amount to about 40% of the projected 20,240 MW total for new resources expected to be available during peak load in 2017. Therefore, the existing wind generation (799 MW) plus the planned and proposed wind generation would be serving about 16% of the projected MRO net internal demand of 55,238 MW at peak load in 2017.

As part of the preparation of this assessment, MRO staff attempted to collect information on how the workforce retention and recruitment issues are dealt with, from Planning Authorities (PA) within the MRO region. The responses from the PAs did not provide suffi cient information to formulate a clear description of the subject.

Assessment Process To prepare this MRO regional self-assessment, MRO staff sent the NERC spreadsheets to the registered entities within the MRO and collected individual entity’s load forecast, generation, and demand-side management data. The staff th en combined the individual inputs from these spreadsheets to calculate the MRO regional totals. The staff also sought responses to the questions included in the NERC LTR A request letter, from Planni ng Authorities within the MRO region – MAPP, ATCLLC, and SaskPower. Th e MAPP Transmission Planning Subcommittee and its Transmission Reliability Assessment Work ing Group also provided detail on the various MAPP planning studies. Using the information ga thered from this process, the MRO Resource Assessment Subcommittee prepared the resource assessment portions, while the Transmission Assessment Subcommittee prepared the transmission assessment and operational issues portions. Finally, the MRO Reliability Assessment Committ ee, which is ultimately responsible for the long-term reliability assessments, reviewed and approved the final draft before it was submitted to NERC.

Region Description The Midwest Reliability Organization (MRO) has 48 members which include Cooperative, Canadian Utility, Federal Power Marketing Agency, Generator and/or Power Marketer, Small Investor Owned Utility, Large Investor Owned Util ity, Municipal Utility, Regulatory Participant and Transmission System Operator. The MRO has 19 Balancing Authorities and 115 registered entities. The MRO Region as a whole is a su mmer peaking region. The MRO Region covers all or portions of Iowa, Illinois, Minnesota, Nebraska, North and South Dakota, Michigan, Montana, Wisconsin, and the provinces of Mani toba and Saskatchewan. The total geographic area is approximately 1,000,000 square miles with an approximate population of 20 millionRegional Reliability Assessment

111 2008 Long-Term Reliability Assessment NPCC Highlights

For the ten year study period of the 2008 Long-Term Reliability Assessment, the reso urce plans of each of the five Areas (subregions) of NP CC meet the NPCC resource adequacy criterion which obligat es each Area to ensure that its probability (or risk) of di sconnecting any firm load due to resource deficiencies shall be, on average, not more thanonce in ten years. When compared with the RAS LongTerm Reliability Assessment conducted in 2007 for the 2007-2016 time frame, margins have improved overall. The projected rate of load grow th has decreased in four of the five Areas due to slowing economic activity. In Ontario, there is an active comm itment to energy conservation and a reduction in customer load wh ich is also reflected in its dec line in load growth. Only the province of Québec forecasts a slight increase in load growth over its projections for 2007. The currently planned transmission system over the te n-year period is expected to perform reliably for a range of contingencies and conditions.

The Maritimes Area has demonstrated compliance with the NPCC reliability criterion of less than 0.1 days of firm load disconnections per year, and the Maritimes Area requires no support from its interconnections to meet the criterion. Reserve levels will vary between 22% and 40%. The most significant change since the 2007 RAS Long-Term Reliability Assessment is a lower demand forecast and demand growth rate currently projected for the Maritimes. Contributing significantly to this lower forecast is a proj ection of slowing economy, particularly the announced mill closures in the pulp and paper a nd wood processing sectors, along with limited growth expectations in these sectors due to a high Canadian dollar and rising energy costs.

In New England, the capacity needs to meet the NPCC resource adequacy criterion are purchased through annual auctions for a period of time three years in a dvance of the year of interest. After this primary annua l auction, there are annu al reconfiguration auctions prior to the commencement year in order to readjust insta lled capacity purchases and further ensure that adequate capacity will be purch ased to meet system needs.

For the New York Area, the New York Indepe ndent System Operator conducts an annual Reliability Needs Assessment (R NA) that examines both resour ce and transmission needs over a ten-year period. Resources totaling approxima tely 455 MW, as well as transmission upgrades that are under construction or ot herwise have met the screening criteria, were included in the base case for the current RNA. This assessme nt has determined that sufficient statewide resources are available to m eet the NPCC LOLE criteria th rough the year 2011. For 2012, the RNA indicates that sufficient re sources will exist if 500 MW we re added to New York City (NYC), or if 750 MW were added in the lower H udson River valley, or if transfer limits into NYC were increased. Beyond 2012, additional re sources of approximately 2,750 MW would be needed to meet the crit eria through 2017; a majority of those resources would be required for the New York City zone to meet the NYC zonal requirements.Regional Reliability Assessment

112 2008 Long-Term Reliability Assessment Ontario will eliminate its coal-fir ed fleet with the retirement of the Nanticoke station, currently scheduled for 2014. Although energy supplies available within On tario are expected to be adequate overall, energy deficiencies could arise as a result of higher than forecast forced outage situations, prolonged extreme weather conditions and other influencing factors. Interconnection capability and available market and operational measures have been evaluated as sufficient to ensure summer energy demands can be met for a wide variety of conditions.

To comply with the NPCC resource adequacy criterion, the Québec Ar ea requires a reserve margin of about 11 % of the peak load for the year of analysis. In Québec, large multi-years water reservoirs allow hydro generation to be available on peak, and non-hydraulic resources account only for a small portion of total resources. Assessments for both NPCC and the Québec Energy Board are conducted annually.

NPCC - Summer Capaci ty Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

113 2008 Long-Term Reliability Assessment NPCC - Projected On-Peak Capacity by Fuel-Mix

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Hydr o

D

ual Fuel Nucl ear Ga s Coa l O i l

P

u mped St

or

age Wind O t herMW 2008

2017

NPCC US - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

114 2008 Long-Term Reliability Assessment NPCC US Capacity vs Demand - Summer

40 45 50 55 60 65 70 75 80 85

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity Resources

NPCC CA - Winter Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2008 / 09 2009 / 10 2010/11

2 0 11/12

2 0 12/1 3

2 0 13/1 4

2 0

1 4 /1

5 2015 /1

6 2016 / 17 2017 / 18Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

115 2008 Long-Term Reliability Assessment NPCC CANADA Capacity vs Demand - Winter

55 60 65 70 75 80 85 90

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection
Adjusted Potential Resources

Net Capacity Resources

NPCC-New England - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35% 40%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

116 2008 Long-Term Reliability Assessment NPCC-New York - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

NPCC-Maritimes - Winter Capacity Margin Comparison

0% 10% 20% 30% 40% 50% 60% 70%

2 00

8/09

2 00

9/10 2010/11

2 011/12

2 012/13

2 01

3/

14

2 01

4/

15

2 01

5/

16

2 01

6/

1 7

2 01

7/

1 8Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

117 2008 Long-Term Reliability Assessment NPCC-Ontario - Winter Capacity Margin Comparison

-10%

0% 10% 20% 30% 40% 50%

2008/09 2009/10 20 1 0/11 201 1/12 201 2/13 2013/ 14 2014/ 15 2015/ 16 2016/ 17 2017/ 1 8Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

NPCC-Quebec - Winter Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2 00

8/09

2 00

9/10 2010/11

2 011/12

2 012/13

2 01

3/

14

2 01

4/

15

2 01

5/

16

2 01

6/

1 7

2 01

7/

1 8Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

118 2008 Long-Term Reliability Assessment NPCC Self-Assessment

Overview

The resource plans of each of the five Areas (subregions) of NPCC meet the NPCC resource adequacy criterion which states that probability of disconnecting firm load shall be not more than once in ten years. Further, the currently planne d transmission system over the ten-year period is expected to perform reliably for a ra nge of contingencies and conditions.

The following discussions document the extensive pr ocesses in place within NPCC to ensure that both resource and transmission plans remain adequate for the study period.

NPCC Resource Adequacy Assessment Process

The Northeast Power Coordinating Council, Inc. has in place a comprehensive resource assessment program directed th rough NPCC Document B-08, “G uidelines for Area Review of Resource Adequacy.” 145 This document charges the NPCC Task Force on Coordination of Planning (TFCP) to assess periodic reviews of re source adequacy for the five NPCC Areas, or subregions, defined by the following footprints:

● Maritimes Area (the New Brunswick System Operator, Nova Scotia Power Inc., the Maritime Electric Company Ltd. and the Northern Maine Independent System Administrator, Inc);

● New England (the ISO New England Inc.);

● New York (New York ISO);

● Ontario (Independent Electrici ty System Operator); and

● Québec (Hydro-Québec TransÉnergie).

In assessing each review, the TFCP will ensure that the proposed resources of each NPCC Area will comply with NPCC Document A-02, “Basic Criteria for Design and Operation of Interconnected Power Systems.” 146 Section 3.0 of Document A- 02 defines the criterion for resource adequacy for each Area as follows:

Resource Adequacy - Design Criteria

Each Area’s probability (or risk ) of disconnecting any firm load due to resource deficiencies shall be, on average, not more than once in ten years. Compliance with this criterion shall be evaluated probabilisti cally, such that the loss of load expectation [ LOLE ] of disconnecting firm load due to resource deficiencies shall be, on average, no more than 0.1 day per year. This evaluation shall make due allowance for demand uncertainty, scheduled out ages and deratings, forced outages and deratings, assistance over interconnections with neighboring Areas and

145 http://www.npcc.org/document s/regStandards/Guide.aspx
146 http://www.npcc.org/documents/ regStandards/C riteria.aspxRegional Reliability Assessment

119 2008 Long-Term Reliability Assessment Regions , transmission transfer capabilities, and capac ity and/or load relief from available operating procedures.

The primary objective of the NPCC Area resource review is to ensure that plans are in place within the Area for the timely acquisition of resour ces sufficient to meet this resource adequacy criterion and to identify those instances in which a failure to comply with the NPCC “Basic Criteria for Design and Operation of Interconnected Power Systems,” or other NPCC criteria, could result in adverse consequences to another NPCC Area or Areas. If, in the course of the study, such problems of an inter-Area nature are determined, NPCC informs the affected systems and Areas, works with the Area to develop mechan isms to mitigate potential reliability impacts and monitors the resolution of the concern.

For the purposes of the Area resource adequacy review, resources are defined as the sum of supply-side and demand-side cont ributions. Supply-side faciliti es may include all generation sources within an Area as well as purchases from neighboring systems. Demand-side facilities may include measures for reducing and/or shiftin g load, such as conservation, load management, interruptible loads, dispatchable loads and unmetered, but identif iable small capacity generation.

Document B-08 requires each Area resource assessment to include an evaluation and / or discussion of the:

• Load model and critical assumpti ons on which the review is based; • Procedures used by the Area for verifying generator ratings and identifying deratings and forced outages; • Ability of the Area to reliably meet proj ected electricity demand, assuming the most likely load forecast for the Area a nd the proposed resource scenario; • Ability of the Area to reliably meet pr ojected electricity demand, assuming a high growth load forecast for the Area a nd the proposed resource scenario; • Impact of load and resource uncertainties on projected Area reliability, discussing any available mechanisms to mitigat e potential reliab ility impacts; • Proposed resource capacity mix and the poten tial for reliability impacts due to the transportation infrastructure to supply the fuel; • Internal transmission limitations; and • The impact of any possible environmental restrictions.

The resource adequacy review must describe th e basic load model on which the review is based together with its inherent assu mptions, and variations on the model must consider load forecast uncertainty. The anticipated impact on load an d energy of demand-side management programs must also be addressed. If the Area load m odel includes pockets of demand for entities which are not members of NPCC, the Area must discuss how it incorporates th e electricity demand and energy projections of such entities.

Each Area resource adequacy review will be conducted for a window of five years, and a detailed, “Comprehensive Review,” is conduct ed triennially. For those years when the Comprehensive Review is not requi red, the Area is charged to con tinue to evaluate its resource projections on an annual basis. The Area w ill conduct an “Annual Interim Review” that willRegional Reliability Assessment

120 2008 Long-Term Reliability Assessment reassess the remaining years stud ied in its most recent Comprehensive Review. Based on the results of the Annual Interim Review, the Area may be asked to advance its next regularly scheduled Comprehensive Review.

These resource assessments are complemented by the efforts of the Working Group on the Review of Resource and Transmission Adequacy (Working Group CP-08), which assesses the interconnection benefits assumed by each NPCC Area in demonstrating compliance with the NPCC resource reliability. The Working Group conduc ts such studies at le ast triennially for a window of five years, and the Working Group j udges if the outside a ssistance assumed by each Area is reasonable.

NPCC Transmission Assessment Process

In parallel with the NPCC Area resource revi ew, the NPCC Task Force on System Studies (TFSS) is charged with conducting periodic reviews of the reliabi lity of the planned bulk power transmission systems of each Area of NPCC, the conduct of which is directed through NPCC Document B-04, “Guidelines for NPCC AREA Transmission Reviews.” 147 Each Area is required to present an annual transmission review to the TFSS, assessing its planned transmission network four to si x years in the future. Depending on the extent of the expected changes to the system studied, the review pres ented each year by the Area may be one of the following three types:

• Comprehensive Review

A detailed analysis of the complete bulk pow er system of the Area is presented every five years at a minimum. The TFSS will charge the Area to conduct such a review more frequently as changes may dictate.

• Intermediate Review

An Intermediate Review is conducted with the same level of detail as a Comprehensive Review, but, in those instan ces in which the significant transmission enhancements are confined to a segment of the Area, the review will focus only on that portion of the system. Or , if the changes to the overall system are intermediate in nature, the analysis will focus onl y on the newly planned facilities.

• Interim Review

If the changes in the planned transmission system are minimal, the Area will summarize these changes, assess the impact of the changes on the bulk power system of the Area and reference the most recently conducted Intermediate Review or Comprehensive Review.

In the years between Comprehensive Reviews, an Area will annually conduct either an Interim Review, or an Intermediate Review, depending on the extent of the system changes projected for

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121 2008 Long-Term Reliability Assessment the Area since its last Comprehensive Review. The TFSS will judge the significance of the proposed system changes planned by the Area and direct an Intermediate Review or an Interim Review. If the TFSS agrees that revisions to the planned system are major, it will charge a Comprehensive Review in advance of the normal five-year schedule.

Both the Comprehensive Review and the Intermediate Review analyze:

• Steady state performance of the system; • Dynamic performance of the system; • Response of the system to selected extreme contingencies; and • Response of the system to extreme system conditions.

Each review will also discuss special protection systems and / or dynamic control systems within the Area, the failure or mis operation of which could impact neighboring Areas or Regions.

The depth of the analysis required in the NPCC transmission review fully complies with, or exceeds, the obligations of NERC Reliab ility Standards TPL-001 through TPL-004:

• TPL-001-0, “System Performance Under Normal Conditions” • TPL-002-0, “System Performance Following Loss of a Single BES Element” • TPL-003-0, “System Performance Fo llowing Loss of Two or More BES Elements” • TPL-004-0, “System Performance Following Extreme BES Events”

Coordinated Operations

Reliable operations within NPCC are directed th rough the five Reliability Coordinators of NPCC. Each of the NPCC Area s also serves as a NERC Reliability Coordinator for its respective footprint as follows:

Entity Serving as NERC Reliability Coordinator Reliability Coordinator Footprint

New Brunswick System Operat or (NBSO) Provinces of Ne w Brunswick, Nova Scotia and Prince Edward Island; the Northern Maine Independent System Administrator, Inc ISO New England Inc. States of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, New York ISO State of New York Independent Electricity System Operator (IESO) Province of Ontario
Hydro-Québec TransÉnergie Province of Québec

Within each Area, the respective Reliability Coordinator assumes the authority and responsibility to immediately direct the redispatch of genera tion, the reconfiguration of transmission, or, ifRegional Reliability Assessment

122 2008 Long-Term Reliability Assessment necessary to return the system to a secure state, the shedding of firm lo ad. Coordination in the daily operation of the bulk elect ric system is assisted through enhanced communications and heightened awareness of system conditions an d mutual assistance during an emergency or a potentially evolving emergency. The Reliability Coordinators of the five NPCC Areas conduct conference calls daily and weekly to identif y and assess emerging system conditions, and procedures are in place to in itiate emergency conference calls whenever one or more Areas anticipates a shortfall of capacity or anticipat es the implementation of operating measures in response to a system emergency.

The NERC Standards, together with the Regional Criteria, Guides , and Procedures, establish the fundamental principles of interconne cted operations among the NPCC Areas.

NPCC Document A-03, “Emergency Operation Criteria,” 148 presents the basic factors to be considered in formulating plans and procedures to be followed in an emergency or during conditions which could lead to an emergency, in order to facilitate mutual assistance and coordination among the Areas The Criterion estab lishes seven basic objectives in formulating plans related to emergency ope rating conditions, including the avoidance of interruption of service to firm load, minimizing the occurrence of system disturbances, containing any system disturbance and limiting its effects to the Area in itially impacted, minimizing the effects of any system disturbances on the customer, avoiding da mage to system elements, avoiding potential hazard to the public and ensuring Area readiness to restore its system in the event of a major or partial blackout.

NPCC Document A-06, “Operating Reserve Criteria,” 149 defines the necessary operating capacity required to meet forecast load, to acc ommodate load forecasting error, to provide protection against equipment failure which has a reasonably high probability of occurrence and to provide adequate regulation of frequency and tie line powe r flow. The NPCC “Operating Reserve Criteria” require two components of operating reserv e. The ten-minute operating reserve available to each Area shall at least equa l its most severe first contingency loss. The thirty-minute operating reserve available to each Ar ea shall at least equal one -half its most severe second contingency loss.

Various operating Guidelines and Procedures complement the NPCC Cr iteria by providing the system operator with detailed instructions to ad dress such topics as the depletion of operating reserve, capacity shortfalls, the sharing of ope rating reserve, line loading relief, declining voltage, measures to contain the spread of an emergency, light load conditions, the rating of generating capability, the conseq uences of a solar magnetic disturbance, procedures for communications during an emergency and the coor dinated restoration of the systems following a partial or total blackout.

Area Assessments

Among the five NPCC Areas, the Maritimes Area a nd Québec are predominantly winter peaking systems. The Ontario, the New York and the Ne w England Areas are summe r peaking systems.

148 http://www.npcc.org/documents/ regStandards/C riteria.aspx
149 http://www.npcc.org/documents/ regStandards/C riteria.aspxRegional Reliability Assessment

123 2008 Long-Term Reliability Assessment Consequently, the mix of winter and summ er peaking areas would make a NPCC-wide comparison of year to year p eaks misleading. Comparisons for the individual subregions are below. The expected growth, together with th e overall reliability assessment of the projected transmission and resources, follows individua lly for the Maritimes Area, New England, New York, Ontario and Québec.

Maritimes Area

Introduction

The footprint of the Maritimes Area is comprised of the Canadian provinces of New Brunswick (served by the New Brunswick System Operator), Nova Scotia (served by Nova Scotia Power Inc.), Prince Edward Island (served by the Mari time Electric Company Ltd.) and the Northern Maine Independent System Administrator, Inc (NMISA). The NMISA serves approximately 40,000 customers in northern Maine and is radial ly connected to the New Brunswick power system. The Maritimes Area is a winter peaking region.

On October 1, 2004, New Brunswick’s Electricity Act restructured th e electric utility industry in New Brunswick (NB) and create d the New Brunswick System Operator (NBSO). It is an independent not-for-profit statutory corpora tion separate from the NB Power group of companies. The Electricity Act transferred the re sponsibility for the securi ty and reliability of the integrated New Brunswick electricity syst em from NB Power to NBSO, and also made NBSO responsible for facilitating the development and operation of the New Brunswick Electricity Market. Th ese responsibilities take the form of operation of the NBSO controlled grid and administration of the NBSO Open Ac cess Transmission Tariff (OATT) and the New Brunswick Market Rules. On February 1, 2007, the Nova Scotia Electricity Act came into effect, enabling wholesale market access with th e implementation of the Nova Scotia Market Rules. The Nova Scotia Power System Operator (NSPSO) is that function of NSPI that is responsible for the reliable operatio n of the integrated power system in Nova Scotia (NS), as well as administration of the NS Mark et Rules and the Nova Scotia OATT which has been in effect since November 1, 2005.

By contractual agreement, the NBSO acts as the Reliability Coordinator for the Maritimes Area.

Demand

Separate demand and energy forecasts are prepared by each of the Maritimes Area jurisdictions, as there is no regulatory requirement for a sing le authority to produce a forecast for the whole Maritimes Area. For Area studies, the individual forecasts are combined using the load shape of each jurisdiction.

The NBSO load forecast for New Brunswick is based on 30-year average temperatures (1971- 2000) with the annual peak hour demand determin ed for a design temper ature of -24°C over a sustained eight-hour period. It is prepared based on a cause and effect analysis of past loads, combined with data gathered through customer surveys, and an assessment of economic, demographic, technological a nd other factors that affect the use of electrical energy.Regional Reliability Assessment

124 2008 Long-Term Reliability Assessment The NSPI load forecast for Nova Scotia is base d on 30-year historical climate normalization for the major load centers, along with analyses of sales history, economic indicators, customer surveys, technological and demogra phic changes in the market, and the price and availability of other energy sources.

The MECL load forecast for PEI uses an econo metric model that factors in the historical relationship between electricity use and econo mic factors such as gross domestic product, electricity prices, and personal disposable income.

The NMISA load forecast for northern Maine is ba sed on historic averag e peak hour demand patterns inflated at a nominal ra te and normalized to 30-year aver age historical weather patterns. Economic and other factors may also affect the forecast.

The 2008/09 peak demand forecast, representing the summation of the forecasts of each Maritimes Area jurisdiction, is 5,705 MW, 269 MW lower than last year. The forecast average annual peak demand growth rate is 0.9% over the next ten years, and this is lower than the 1.7% growth rate forecast last year. Contributing si gnificantly to this lower forecast are announced mill closures in the pulp & paper and wood pr ocessing sectors, along with limited growth expectations in these sectors due to a hi gh Canadian dollar and rising energy costs.

Monthly peak forecasts for the Maritimes Area are summations of the individual jurisdiction forecasts. For Area studies, the individual foreca sts are combined using the load shape of each jurisdiction.

The only demand response program currently us ed in the Maritimes Area is interruptible demand. For 2008/09, the interruptible demand fo recast for the peak month is 485 MW, which represents 8.5% of the peak demand forecast.

In its comprehensive reviews of resource adequ acy, the Maritimes Area uses a load forecast uncertainty representing the hist orical standard deviat ion of load forecast errors based upon the four year lead time required to add new resources.

Generation

The Maritimes Area capacity re sources in 2008/09 amount to 6,312 MW of Existing Certain capacity resources, 663 MW of Existing Uncert ain capacity resources, 39 MW of Planned capacity resources, and 0 MW of Proposed capacity resources. The largest portion of the Existing Uncertain capacity resources is 558 MW of inoperable capacity at the Point Lepreau nuclear station due to an 18-month refurb ishment between April 2008 and October 2009.

By 2009/10, the Planned capacity resources increase to 225 MW , consisting of 100 MW of incremental nuclear capability fr om the Point Lepreau refurbishment, and 125 MW of on-peak wind capacity. By 2017/18, the Proposed capacity resources increase to 272 MW, of which 196 MW is on-peak wind capacity.Regional Reliability Assessment

125 2008 Long-Term Reliability Assessment In 2008/09, the wind generation ex pected on-peak represents 61 MW of the Existing Certain capacity resources, 66 MW of the Existing Uncertain capacity resources, and 39 MW of the Planned capacity resources.

In 2008/09, biomass capacity represents 153 MW of Existing Certain capacity resources, and 5 MW of Existing Uncertain capacity resources. There is no Planned or Proposed biomass capacity for the Maritimes during the study period.

Planned and Proposed capacity resources are based upon the most recent 10-year projections submitted to NBSO by the load serving utilities in the Maritimes Area. Planned resources are required to be in construction. Proposed re sources include known project announcements and legislated renewable energy requirements for utilities.

Purchases and Sales on Peak

The capacity purchase for the Maritimes is a firm 200 MW purchase fr om Hydro Quebec during the 2008/09 winter peak season.

The firm capacity purchase from Hydro Quebec is not tied to a specific generator. The purchase is backed by a transmission reservation.

The capacity purchase from Hydro Quebec is not an LDC.

For the period 2008 through October 2011, there is a firm capacity sale of 198 MW from the Maritimes to Hydro Quebec. This sale is tied to two 99 MW oil combustion turbines at Millbank, NB. This sale is also backed by a transmission reservation.

For 2008, there are a total of non-firm capacity sales of 11 MW from the Maritimes to New England. These non-firm capacity sales rise to 91 MW between 2009 and 2017. These capacity sales are tied to renewable energy projects in the Maritimes, and are not backed by transmission reservations.

None of the capacity sales fr om the Maritimes are LDCs.

The Maritimes Area participates in a regional reserve sharing program with New England, New York, and Ontario for 100 MW of ten-minute reserv e. This reserve is counted as 25% spinning and 75% supplemental.

Fuel

Due to the diversity of the Maritimes Area fuel supply mix, its relativel y low reliance on natural gas, and its fuel storage facilities, the pote ntial impact of fuel supply and/or delivery interruptions in the Maritimes Area is very low, a nd thus it is not explicit ly modeled in resource adequacy assessments. The percentage of natural gas in the Maritimes is less than 8%, and the pe rcentage of coal-fired generation is about 27%.Regional Reliability Assessment

126 2008 Long-Term Reliability Assessment Transmission

Currently, the only new bulk power system transmission anticipated to be in-service during the ten year study period is a 103-mile, 345 kV line between Coleson Cove, NB and Salisbury, NB. The expected in-service date in sometime between 2009 and 2016.

There are no transformer additions to the Maritimes bulk power syst em within this ten year study period.

Operational Issues

There are no significant anticipated generating unit outages, variable resource, transmission additions or temporary operating measures that ar e anticipated to impact the reliability of the Maritimes during the next ten years.

There are no environmental or regulatory restricti ons that are anticipated to impact the reliability of the Maritimes during the next ten years.

Reliability Assessment Analysis

The Maritimes uses a reserve cr iterion of 20% for planning pur poses and it was shown in the 2007 Maritimes Comprehensive Review of Resource Adequacy 150 that adherence to this criterion complies with the NPCC reliability criterion. The 20% reserve criter ion is met in all ten years of the study period, with a minimum reserve of 22% occurring in 2008/09 due to the refurbishment of Point Lepreau.

The Maritimes reserve criterion of 20% is se t to a level which complies with the NPCC reliability criterion.

Except for the 200 MW firm capacity purchase fr om Hydro Quebec duri ng the peak winter months of 2008/09, all of the resour ces used to meet the reserve ma rgin criterion are internal to the Maritimes.

The Maritimes conducts resource adequacy studies to identify the resources needed to meet the NPCC resource adequacy criterion of less than 0.1 days per year of Loss of Load Expectation (LOLE).

In its 2007 Maritimes “Comprehensive Review of Resource Adequacy,” 151 it was shown that the NPCC reliability criterion of less than 0.1 days of firm load disconnections per year is not exceeded by the Maritimes Area for all years in the 2008-2012 study period, and varies between 0.001 to 0.086 days/yr for the base load forecast w ith load forecast uncertainty. The Maritimes Area requires no support from its interconnections to meet the NPCC reliability criterion for all

150 http://www.npcc.org/docume nts/reviews/Resource.aspx
151 http://www.npcc.org/docume nts/reviews/Resource.aspxRegional Reliability Assessment

127 2008 Long-Term Reliability Assessment years of the 2008-2012 study period. The Maritimes Area is also shown to a dhere to its own 20% reserve planning criterion in all years for the ba se load forecast, with reserve levels varying between 22% and 40%.

There is no difference in how the Maritimes treats short-term (i.e. 1-5 years) and long-term (i.e. 6-10 years) reserve requirements.

The most significant change since the last a ssessment is a lower demand forecast and demand growth rate for the Maritimes. Contributing si gnificantly to this lower forecast are announced mill closures in the pulp & paper and wood pr ocessing sectors, along with limited growth expectations in these sectors due to a high Canadian dollar and rising energy costs. With this lower demand comes higher forecast reserve margin s, and therefore less need to plan for any major new capacity in the Maritimes.

In its 2007 Maritimes “Comprehensive Review of Resource Adequacy,” 152 scenarios of high load growth and zero wind availability were studied, with the result that the Maritimes Area was still able to meet its 20% reserve criterion in all cases with no more th an 35 MW of necessary interconnection support. This level of interc onnection support repres ents only 2.1% of the Maritimes Area tie benefits capability.

As mentioned in part vii), th e 2007 Maritimes Comprehensive Re view of Resource Adequacy demonstrated compliance with the NPCC reliability criterion for the high load growth scenario.

Wind project capacity for the Ma ritimes is modeled based upon results from the September 21, 2005 NBSO report “Maritimes Wind Integration Study”. 153 This report showed that the effective capacity from wind projects, and th eir contribution to Loss of Load Expectation was equal to or better than their seasona l capacity factors. Coincidence of high winter wind generation with the peak winter loads results in the Maritimes Area receiving a hi gher capacity bene fit from wind projects versus a summer peaking area. The ef fective wind capacity calculation also assumes a good geographic dispersion of the wind projects in order to mitigate the occurrences of having zero wind production.

There are no potential unit retirements having si gnificant impact on the reliability of the Maritimes.

Generation deliverability for the Maritimes is addressed through a combination of resource adequacy and transmission reliability studies. Resource adequacy studies use multi-area probabilistic analysis in order to verify that intra-area constrai nts do not compromise resource adequacy. Comprehensive transm ission studies are performed fo r sub-areas to ensure that generation is sufficiently integrated with load.

The Maritimes is studying an interconnection re quest from Newfoundland and Labrador Hydro involving an HVDC interconnection between Newfoundland and the Maritimes that would transmit up to 740 MW from the Lower Churchill hydro project to either New Brunswick or

152 http://www.npcc.org/docume nts/reviews/Resource.aspx
153 http://www.nbso.ca/Public/_pr ivate/2005%20Maritime%20Wind%20Integration%20Study%20_Final_.pdfRegional Reliability Assessment

128 2008 Long-Term Reliability Assessment Nova Scotia, and then on down to New England. The target in-service date is January 1, 2015 but due to its uncertainty it hasn’t been included as a proposed project.

Currently, there are no specific deliverability problems in the Maritimes with the current portfolio of wind generation. Future proposed wi nd projects concentrated in certain areas may cause some congestion issues, and those issues ar e addressed in the System Impact Studies for those projects.

System Impact Studies are mandatory for new generation interconnections , and may be required for changes/additions to the transmission gri d. There are no anticipated stability issues impacting the reliability of th e Maritimes during the study period.

Under normal conditions, the Maritimes grid is to be designed and operated within a plus or minus 5% of nominal voltage. Both synchro nous generators as well as wind projects have minimum voltage support requirements in the form of leading and lagging power factor capability.

Generators in the Maritimes mu st not cause a voltage dip great er than 3% during start-up or shutdown. There are no known reactive power-limited ar eas in the Maritimes Area. At this time, there are no plans to install more UVLS in the Maritimes Area.

The Maritimes Area addresses the loss of generati on through its operating re serve requirements. Due to its diverse fuel mix and fuel storage, no long-term fuel disruptions are anticipated. The Maritimes Area has experienced above average levels of hydro power the last few years. Nuclear capacity will be increased by 100 MW due to the refurbishment of Point Lepreau.

Bulk power system reliability has increased sign ificantly with the commissioning of the second 345 kV interconnection between New Brunswi ck and New England in December 2007.

There are no reliability impacts to any specific aging infrastructure in the Maritimes area. The aging of the Point Lepreau nuclear station is being addressed through its refurbishment from April 2008 to October 2009.

The Maritimes does not have any guidelines fo r on-site, spare generator step-up (GSU) or autotransformers.

New England

ISO New England’s reference case forecast is the 50/50 forecast (50% chance of being exceeded), corresponding to a New England thre e-day weighted temperature-humidity index (WTHI) of 80.1, which is e quivalent to a dry bulb temperatur e of 90 degrees Fahrenheit and a dew point temperature of 70 degr ees Fahrenheit. The reference demand forecast is based on theRegional Reliability Assessment

129 2008 Long-Term Reliability Assessment reference economic forecast, which reflects the economic conditions that “most likely” would

occur.

This year’s summer peak forecast ten-year compound annual average growth rate has decreased to 1.2 percent from 1.7 percent, resulting in generally lower summer peak forecasts when compared with the 2007 long-term forecast. The ke y factor leading to the lower forecasts is a long-run forecast of lower personal income, which is an economic driver in the energy and peak load models.

ISO New England develops an independent load forecast for the Balancing Authority area as a whole, and does not use individu al members’ forecasts of peak load in its load forecast.

It is expected that 1,820 154 MW of demand resources will be available in summer 2008. These include resources in ISO New England’s Real-Time 30-minute, Real-Time 2-Hour, and Profiled Demand Response programs, which are instructed to interrupt their consum ption during specific actions of Operating Procedure No. 4 (OP 4), Action During a Capacity Deficiency . Some of the assets in the Real-Time Demand Response programs are under direct cont rol. The direct load control involves the interruption of central air conditioning systems in residential, commercial and industrial facilities. Also included in the total is 167 MW of energy efficiency. The 1,820 MW of demand resources is expected to grow to 2,278 MW by 2010 because that is the amount of demand resources that has cl eared ISO New England’s first Fo rward Capacity Auction (FCA), for the 2010-2011 commitment period.

The 2,278 MW of demand resources that cleared th e first FCA include new energy efficiency programs totaling 612 MW. The energy efficiency programs are also considered capacity resources in the New England capacity market. Under FCM, energy efficiency can be included in the category of on-peak demand resources 155 , which includes installed measures (e.g., products, equipment, systems, services, practices and/or strategies) on end-use customer facilities that result in additional and ve rifiable reductions in the total amount of electrical energy consumed during on-peak hours. As part of the qua lification process to pa rticipate in an FCA, any new demand resource must submit detailed info rmation about the project, including location, project description, estimated de mand reduction values, and expect ed commercial op eration date along with a project completion schedule. In addition, the ne w demand resource submits a Measurement and Verification (M&V) Plan, which must be approved by the ISO. The project sponsor is required to submit certification that the project complies with their ISO-approved M&V Plan. The ISO has the right to audit the records, data, or actu al installations to ensure that the energy efficiency projects are providing the load reduction promised. The ISO tracks the project against their submitted schedule, thereby taking a proactive role in monitoring the progress of these resources to ensure that they are ready to reduce de mand by the start of the FCM commitment period.

154 This value is 137 MW higher than the demand resources assumed for the 2008 NERC RAS Summer Assessment due to

updated information.
155 The rules addressing the treatment of demand resources in the Forward Capacity Market may be found in Section III.13.1.4 of

ISO New England’s Market Rule 1, Standard Market Design , located at http://www.iso-ne.com/regulatory/tariff/sect_3/v8-7- 1-08_mr1_sect_13-14.pdfRegional Reliability Assessment

130 2008 Long-Term Reliability Assessment In addition to reliability-based programs, ISO-NE administers a vo luntary price-response program where load interrupts based on the pr ice of energy. As of March 31, 2008, there were approximately 97 MW enrolled in the price re sponse program. These programs are not counted as capacity resources since th eir interruption is voluntary.

ISO New England addresses peak demand uncertainty in two ways:

• Weather – annual peak load distribution forecas ts are made based on 37 years of historical weather which includes the reference forecast (50% chance of being exceeded), and extreme forecast (10% chance of being exceeded); 156

• Economics – alternative forecasts are made using high and low economic scenarios.

ISO New England reviews the su mmer conditions of the study period using the annual extreme, 90/10 peak demand based on the reference economic forecast.

Resources

The ISO New England Balancing Authority capacity resources amount to 32,933 157 MW in 2008. That includes 30,892 MW of Existing Cert ain generating capacity, 1,820 MW of demand response resources, and 58 MW of net firm purchas es and sales. Also in cluded in the total capacity resources is 181 MW of Planned gene rating capacity, which is expected to become commercial by summer 2008. The total new gene ration expected to be in service by 2010 amounts to 427 MW. In addition to the Planned capacity, ISO New England has a total of 13,028 MW of Proposed projects in it s Generator Interconnect ion Queue, with in-s ervice dates ranging from 2008 to 2014.

Approximately four MW of the Existing Certain capacity is wind generation expected on peak. The total nameplate capability of those wind facilities is 11 MW . The Planned capacity includes 43 MW (124 MW nameplate) of new wind capacit y, which is expected to be in service by summer 2009. Proposed wind capacity in New England amounts to 1,713 MW based on nameplate ratings, with target in-service dates of 2008 through 2011.

Also included in the Existing Certain capacity is 765 MW of va riable hydro resources expected on peak.

Biomass capacity in the Existing Certain cat egory totals 888 MW. Tw o additional Planned biomass facilities totaling 25 MW are expected to be in operation by summer 2009. A total of 515 MW of biomass capacity is Proposed for insta llation in New England with target in-service dates of 2009 through 2014.

ISO-NE’s capacity margin calcula tions include Planned capacity resources that are expected to begin commercial operation by the end of 2008. This information is based on either the date

156 On an annual basis, the 50/50 reference peak has a 50% chance of being exceeded, and the 90/10 extreme peak has a 10%

chance of being exceeded.
157 Due to differences in assumptions, the amount of existing and planned capacity in summ er 2008 is different from that

published in ISO New England’s 2008-2017 Forecast Report of Ca pacity, Energy, Loads, and Transmission (CELT Report).Regional Reliability Assessment

131 2008 Long-Term Reliability Assessment specified in a signed Interconnectio n Agreement, or discussions w ith ISO-NE Customer Services indicating that the project is nearing completion and is preparing to become an ISO generator asset. Also included in the Planned capacity res ources are new projects th at have obligations in the ISO-NE Forward Cap acity Market in 2010-2011.

Purchases and Sales on Peak

Firm purchases amount to approximately 400 MW through 2012 and then decrease to 334 MW in 2013 – 2014. Only firm, Installed Capacity (I CAP) purchases that are known in advance are included as capacity. A total of 934 MW of im port capacity resources cleared in the first Forward Capacity Auction for the 2010-2011 commitment period. Although those are one-year contracts, they were assumed to extend through the end of the st udy period. If th ese particular imports do not clear in future FCM commitment periods, the capacity will be replaced by generator resources or other imports.

The entire amount of ICAP purchases is backed by firm contracts for generation, and the imports under the Forward Capacity Mark et are import capacity resources with an obligation for the 2010-2011 Capacity Commitment Period. Although ther e is no requirement for those purchases to have firm transmission service, it is specified that deliverability of firm purchases must meet the New England delivery requirement and s hould be consistent with the deliverability requirements of internal generators. The market participant is free to choose the type of transmission service it wishes to use for the de livery of firm energy, but the market participant bears the associated risk of market penalties if it chooses to use non-firm transmission.

The 310 MW purchase from Hydro-Québec is a Liqui dated Damage Contract (LDC) that is not a “make-whole” contract. The 91 MW purch ase from New York is not an LDC.

For the period 2008 through 2009, ISO New England is aware of a firm capacity sale to New York (Long Island) of 343 MW, antic ipated to be delivered via th e Cross Sound Cable. This sale will be reduced to 100 MW beginning in 2010. It should be noted that there is no firm transmission arrangement through the New England PTF system associated with this contract.

This sale is backed by a firm contract for ge neration, but because the power has to go through the Connecticut import constrained interface, and th ere is no firm transmission arrangement, it can be cut earlier than non-recallable exports in the case of a transm ission import constraint into Connecticut.

The sale across the Cross Sound Cable is based on a make-whole contract.

For resource adequacy studies, ISO New Engla nd assumes 2,000 MW of emergency assistance is available during 2008 and 2009, and 1,860 MW of emergency assistance from 2010 through 2018. This assistance is also referre d to as tie-line benefits that are available from other areas within the NPCC region, and is about 50% of New England’s total import capability. ISO New England also participates in a regional rese rve sharing group with NPCC, and has a shared activation of reserves agreement with New York for up to 300 MW.Regional Reliability Assessment

132 2008 Long-Term Reliability Assessment Fuel

Generation in New England is fueled primar ily by natural gas (42.2%), followed by nuclear generation (28.3%), coal (15.1%), non-hydro rene wables (6.0%), hydro (4.9%), oil (2.2%) and pumped storage (1.3%). Fuel suppl y vulnerability is not a concern for any of the fuels other than natural gas. Hydro capacity is not a conc ern because the New England region seldom experiences droughts, and because such resour ces make up a small percentage of the New England generation. Oil-fired plants, which also are only a small portion of generation in New England, typically have multiple days of fuel storage.

Coal is primarily imported via ocean-going trans port and is procured through a combination of spot-market, medium- and long-term contracts. Aside from weathe r-related shipping delays, coal can be readily stored and stockpiled within the region. There are no coal supply or delivery problems anticipated for New England for 2008 and beyond.

During the winter, New England’s na tural gas-fired generators conti nue to compete with the core natural gas demand (i.e., for space heating) for ga s supply and finite transportation infrastructure. During winter peak load periods, regional natura l gas pipeline capacity may not be sufficient to serve the coincident demands fr om both the gas and electricity sectors. During extreme cold winter weather, when the demand for natural gas and electricity peak coincidently, ISO-NE has developed a cold weather operating procedure that can be implement ed to help mitigate the loss of operable generating capacity. ISO-NE has also implemented market incentives, such as those provided by the Forward Capacity Market, that encourage the conve rsion of single-fuel, gas-only units to dual-fuel capab ility in addition to promoting the procurement of firm gas supply and transportation contracts.

The ongoing concern over the interruption of re gional natural gas supply is mitigated through ISO New England’s regular monitoring of the ga s supply situation, and co mmunications with the natural gas sector. An Energy Emergency opera ting procedure can be implemented during any time of the year, to help mitigat e the operational impacts of both short and long-term fuel supply shortages.

One area of potential concern is with natural gas interchangeability. Tw o new Liquefied Natural Gas (LNG) import terminals (one onshore and one offshore) will soon be commercialized within the region. ISO-NE has and will continue to monitor the development of and revisions to natural gas quality standards within the regional gas pipelines tariffs. Questions regarding the potential impacts from compositional variability within natu ral gas streams have been raised by gas-fired generators. ISO-NE will continue to monitor these developments on both a regional and national scale.Regional Reliability Assessment

133 2008 Long-Term Reliability Assessment Transmission

ISO New England’s 2008 Regional System Plan 158 will identify the region’s needed transmission improvements for this period. The New England region currently has over 250 transmission projects and components 159 in various stages of planni ng, construction, and implementation.

Operational Issues

There are no significant anticipated generating unit outages, variable resource, transmission additions or temporary operating measures that ar e anticipated to impact reliability during the next ten years. Planned outages and the additi on of new facilities is coordinated by the ISO and must pass through a rigorous operational review to ensure continued system reliability before allowing such system outages or additions to occur.

During extremely hot days a nd low river flow conditions, there may be environmental restrictions on generating units due to water discharge temperat ures. Such conditions could result in capacity reductions ranging fr om 150 MW to 200 MW. These reduc tions are reflected in the ISO’s forced outage assumptions. The ISO monitors the situation and expects adequate resources to cover such forced outag es or generator reductions.

Reliability Assessment Analysis

The calculated installed capacity margins based on generator and demand resources is 17 percent of the reference load forecast in 2008, and w ill be 15 percent in 2009 assuming no changes in capacity. In 2010, the margin increa ses to 18 percent. The margin in 2010 reflects the resources that have obligations to serve the capacity n eeds of the ISO New England Balancing Authority area resulting from ISO New England’s first Fo rward Capacity Auction. It was assumed that resources with obligations for that year will remain in place through the end of the study period. Without any assumed additional resources, the capacity margin declines after 2010 to 10 percent by 2017. New England does not have a particular capacity margin require ment; rather it plans resources to meet the once in ten years loss of load expectation resource planning reliability criterion. The capacity need s to meet this criterion are purch ased through annua l auctions three years in advance of the year of interest. Af ter this primary annual auction, there are annual reconfiguration auctions prior to the commencement year in order to readjust installed capacity purchases and ensure that adequate capacity will be purchased to meet system needs. Therefore, ISO New England does not expect to face any installed capacity shortages in the future. For reference purposes, the annual av erage percent capacity needed to meet the resource adequacy planning criterion based on a forecast of representati ve future installed capacity requirements is approximately 15 percent.

To develop installed capacity re quirements to meet the once in 10 years disconnection of firm load resource planning reliabil ity criterion, ISO New England takes into account the random behavior of load and resources in a power sy stem, and the potential load and capacity relief

158 Summaries of transmission studies and pr ojects can be found in the ISO New En gland 2008 Regional System Plan (final

report expected to be posted by the end of 2008) at www.iso-ne.com/trans/rsp/index.html
159 The project listing can be found on the ISO New England web site at www.iso-ne.com/trans/rsp/index.htmlRegional Reliability Assessment

134 2008 Long-Term Reliability Assessment obtainable through the use of ISO-NE Operating Procedure No. 4 – Action During a Capacity Deficiency (OP 4).

The amount of internal generati ng and demand resource capacity a ssumed available to meet the installed capacity requireme nt is 32,586 MW in 2008 a nd 32,965 in 2009, increasing to 33,419 for the remainder of the study period to reflect the resources procured for the 2010-2011 FCM. The total capacity to serve lo ad, including net purchases and sales, is 32,644 MW in 2008 and 34,077 in 2010.

The amount of resources external to New England reflects cap acity purchases of 401 MW per year in 2008 and 2009, increasing to 934 MW in 2010.

ISO New England conducts resource adequacy studies to identify the resources needed to meet the NPCC resource adequacy criterion of once in ten years loss of load expectation. The ISO conducts such studies on an annual basis for the regional system plan (RSP). The study conducted for RSP08 shows that if there are no changes in the current generator and demand resource capacity of 32,644 MW, the New Engla nd system will need an additional 565 MW of physical capacity in 2012 to meet the reso urce adequacy planning criterion. By 2017, the additional capacity required will be 2,414 MW. However, 34,077 MW of generating, demand and import resources cleared in the first Fo rward Capacity Auction for 2010. Assuming that amount is in service and does not change, New E ngland will need additional resources only by 2015. 160 As shown in the table belo w, under such assumed load and resource c onditions, an additional 360 MW would be needed in 2015, increasing to a total of 981 MW by 2017.

The following table shows ISO New England’s Inst alled Capacity Requirements and additional physical capacity resources possibly needed to meet the resources adequacy criterion.

Year Forecast 50/50 Peak Representative Future Net ICAP Requirement Assumed Existing ICAP Cumulative Additional Resources Needed Based

on Existing ICAP Amount of ICAP that Cleared in the

First FCA Cumulative Additional Resources Needed Based

on the FCA

Cleared Resources 2008 27,970 30,960 32,644 - N/A 2009 28,480 31,613 32,644

- N/A 2010 28,995 32,305 32,644

- 34,077

- 2011 29,405 32,671 32,644

- 34,077

- 2012 29,820 33,209 32,644 565 34,077

- 2013 30,190 33,702 32,644 1,058 34,077

- 2014 30,510 34,084 32,644 1,440 34,077 7 2015 30,790 34,437 32,644 1,793 34,077 360 2016 31,035 34,781 32,644 2,137 34,077 704 2017 31,250 35,058 32,644 2,414 34,077 981

160 The 7 MW of need shown for 2014 may be approximated as 0Regional Reliability Assessment

135 2008 Long-Term Reliability Assessment ISO New England has 13,669 MW of projects in its Generator Interconn ection Queue. These resources could help meet New England’s future Forward Capacity Auction needs. Historically, approximately 30 to 35 percent of projects in the Queue have gone into commercial operation. The capacity of projects in the Queue, by fuel type and in-service date, is illustrated in the chart below.

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

2007 2008 2009 2010 2011 2012 2013 2014Megawatts (MW) Wind & Other Renewables Nuclear

Coal

Oil

Natural Gas/Oil

Natural Gas

There is no difference in how ISO New England tr eats short-term (i.e. 1-5 years) and long-term (i.e. 6-10 years) capacity margin requirements.

The amount of demand resources (DR) has increased significantly since la st year’s assessment, with the DR projection for 2008 more than doubling from 828 MW to 1,820 MW. New generation totaling approximately 427 MW is a ssumed to be in service by the 2010-2011 FCM. This is nearly 350 MW higher than last year’s projection for new generation.

ISO New England uses operating procedures to address real-time problems with resource adequacy. Actual resource unavailability due to fuel interruptions or other conditions are used to formulate resource availability assumptions fo r long-range resource ade quacy studies conducted on an annual basis.

ISO New England also conducted an operable capacity analysis based on the 90/10 peak-load forecast for its 2008 Regional System Plan. That analysis is shown in the table below. The 2009 capacity consists of both generating and demand resources, and th e capacity of the remaining years is the installed capacity requirement for those years assuming that ISO New England purchases the exact amount of resources to meet the installed capacity requirements. A total of 1,800 MW of operating reserves are assumed for 2009, which in creases to 2,000 MW for all other years to reflect an assumed increase in import capability over the Hydro-Quebec Phase II interconnection from 1,200 MW to 1,400 MW. A total of 2,100 MW of supply-side resource outages were assumed on the basis of historical observations. The results do not reflect resource (generating unit and demand resource) additions, retirements, or deact ivations that could potentially occur during the planning period.Regional Reliability Assessment

136 2008 Long-Term Reliability Assessment Capacity Situation

(Summer MW) 2009 2010 2011 2012 2013 2014 2015 2016 2017

Load (90/10 forecast) 30,475 31,015 31,525 31,995 32,410 32,775 33,085 33,360 33,595 Operating reserves 1,800 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Total requirement 32,275 33,015 33,525 33,995 34,410 34,775 35,085 35,360 35,595 Capacity 32,644 32,305 32,671 33,209 33,702 34,084 34,437 34,781 35,058 Assumed unavailable capacity 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 Total net capacity 30,544 30,205 30,571 31,109 31,602 31,984 32,337 32,681 32,958 Operable capacity margin -1,731 -2,810 -2,954 -2,886 -2,808 -2,791 -2,748 -2,679 -2,637

As shown in the above table, negative operable capacity margin s ranging from approximately - 1,730 MW to -2,950 MW were calculated for the period 2009 through 2 017. When New England is short of operable capacity, ISO New Engla nd will implement Operat ing Procedure No. 4 — Action During a Capacity Deficiency 161 (OP 4). OP 4 is designed to provide additional generation and load relief needed to balance electric demand and supply while striving to maintain appropriate operating reserves. Capacity available under OP 4 includes voltage reduction and emergency assistance from neighbori ng balancing authorities. For the purposes of the ISO New England operable capacity studies ( not reflected in the table above), 2,000 MW of emergency assistance is assumed to be avai lable through 2009. That number changes to 1,860 MW beginning in 2010.

ISO New England does not consider any energy -only, existing-uncertain wind or transmissionlimited resources in its resource adequacy assessment.

ISO New England is not aware of any future un it retirements, and does not make projections about potential retirements.

ISO New England currently addresses generation deliverability through a combination of transmission reliability and resource adequacy analyses. Detailed transmission reliability analyses of sub-areas of the New England bulk power system confirm that reliability requirements can be met with the existing comb ination of transmission and generation. Multiarea probabilistic analyses are conducted to verify that inter-sub-area constraints do not compromise resource adequacy. The ongoing transmission-planning efforts associated with the New England Regional System Pl an support compliance with th e NERC Transmission Planning requirements and assure that the transmission system is planned to sufficiently integrate generation with load.

Currently, New England does not have interconn ection requests for new resources in the 6-10 year time frame.

The New England methods for Installed Capaci ty Requirement analysis and the Forward Capacity Market are designed to recognize tran smission constraints and to procure generation that is incrementally useful to serve new load.

161 Operating Procedure No. 4 may be found on ISO-NE’s website at http://www.isone.com/rules_proceds/opera ting/isone/op4/index.html

.Regional Reliability Assessment

137 2008 Long-Term Reliability Assessment Transmission plans have been developed to se rve load growth throughout the New England region. This includes service to load areas in Maine, New Hampshir e, Vermont, Western Massachusetts, Southeastern Mass achusetts, Northeastern Massachusetts, Greater Rhode Island and Connecticut.

The impact of new generator in terconnections or changes/addi tions to transmission system topology on transient performance and voltage or r eactive performance of the bulk power system is routinely analyzed and plans are developed to mitigate concerns as part of the interconnection process. Operating studies to develop operating guides are gene rally performed under light load conditions to assess the impact on transient pe rformance and under both peak and light load conditions to assess the impact on voltage/reac tive performance. Th erefore each and every change to the generation /transmission system is either implicit ly or explicitly evaluated from a transient and voltage/re active perspective. Th ere is nothing during th e study period which would introduce any new concerns in these areas.

New England has specific criteria to manage minimum dynamic reactive reserve requirements. ISO Op er ating Procedure (OP #17) defines acceptabl e Load Power Factor requirements for various subregions within New England. The pro cedure is designed to ensure adequate reactive resources are available in the subregion by mana ging the reactive demand. Furthermore, when transfer limits are developed for voltage or reactive constrained subregions, the ISO will develop detailed operating guides that cove r all relevant system conditions to ensure reliable operation of the bulk power system. In determining the accep table transfer limits, a 100 MW reserve margin is typically added to each limit to ensure that ade quate reactive reserves are maintained. In some areas, such as Boston and Connecticut, where sp ecific reactive compensation concerns exist, specific operating guides have been developed to ensure that the areas are operated reliably.

New England has a specific guideline for voltage sag which states that the minimum post-fault voltage sag must remain above 70% of nominal voltage. In addition, the voltage must not sag below 80% of normal voltage for a duration long er than 250 milliseconds within the 10 seconds following the fault. This guideline is applied when developing transfer limits for the bulk power system in New England.

There are no known reactive power-limited areas in the New England transmission system. Transmission planning studies have ensured th at adequate reactive resources are provided throughout New England. For instances where dynamic reactive power supplies are needed, devices such as STATCOMs, DVARs and add itional generation commitment have been employed to meet the required need. Additionally the system is reviewed in the near-term via operating studies to develop opera ting guides to confirm adequate voltage/reactive performance. New England, in creating transfer limits based on the dynamic performance of the system, does apply a 100 MW margin to transfer limits.

At this time, there are no plan s to install more UVLS in New E ngland. Currently, Northern New England has the potential to arm approximately 600 MW of load shedding as part of UVLS. However, it is important to recognize that a sign ificant portion of this lo ad shedding is normally not armed and is only armed unde r severe loading conditions wi th a facility already out of service. Presently, two significant projects wh ich are anticipated being in service by 2012 willRegional Reliability Assessment

138 2008 Long-Term Reliability Assessment either completely eliminate the need for the UVLS or significantly reduce the likelihood of depending on such schemes. These projects are the Vermont Southern Loop and the Maine Power Reliability Program.

ISO New England addresses the loss of a major import path by covering the possible loss with operating reserve requirement.

ISO New England’s Operating Procedures 21 – Action During an Energy Emergency (OP 21) addresses energy emergencies, which may occur as a result of sustained national or regional shortages in fuel availability or deliverability to the New England region’s generation resources. Because fuel shortages may impact the New Engla nd region’s ability to fully meet system load and ten minute operating reserve for extended periods of time, actions may need to be taken in advance of a projected Energy Emergency. OP 21 specifies actions to commit, schedule, and dispatch the system in such a way as to preserve stored fuel resources in the region to minimize the loss of operable generating capability due to fuel shortages.

The New England area is curren tly not experiencing a drought.

As part of the New England Regional System Pl anning process, system needs have been identified in all six states of the New E ngland region. The system needs assessments and resulting system solutions, which form th e basis of the New England project listing, 162 ensure conformance with TPL-001 through TPL-004. New England already has a number of installa tions of new technology. These include two STATCOMs, voltage source conver ter based HVDC, variable reac tors, a short section of gasinsulated transmission line (GITL) and D-VAR. Presently there are no specific plans for the additional use of such technologies in future projects, but they are always under consideration as tools for upcoming system concerns.

For the most part, New England’s short circuit c oncerns occur at voltages less than 230 kV. In many instances, the short circuit concerns at thes e lower voltages are resolved through changing generator interconnect ions to be at higher voltages, system reconfigurations, or by operating equipment in a normally open state to increas e the impedance between the network and the subject bus. New England has been meeting with various manufactur ers over the years to acquire information on the possibl e application of “short circuit limiters” to resolve concerns. To date, such technologies have not been employed.

The New England utilities have been working to upgrade and update their equipment over time on a case-by-case basis. While ol der equipment remains in servic e, there are no known risks to the continued operation of this equipment. Tr ansmission system plans will often consider the potential retirement of older generation and determine the upgrad es, if necessary, to allow for such retirements to occur.

New England does not have any guidelines for on-site, spare generato r step-up (GSU) or autotransformers. New England has been havi ng numerous discussions on possible policies to address these concerns with resp ect to autotransformers. In addition, some of New England’s

162 The project listing can be found on the ISO New England web site at www.iso-ne.com/trans/rsp/index.htmlRegional Reliability Assessment

139 2008 Long-Term Reliability Assessment Transmission Owners have joined on to the EEI initiated Spare Transformer Equipment Program.

Other region-specific issues that were not mentioned above

ISO New England and the broade r industry face challenges asso ciated with retirement of a seasoned, technical workforce coupled with a shri nking pool of available talent. To address these issues, ISO New England has developed a co mprehensive Succession Management Program designed to identify highest pot ential employees and build Retention Plans for them. In additions, to ensure ISO New Engl and continues to attract and reta in the best talent the industry has to offer, ISO-NE has adjusted compensati on for engineering professionals, and is in the process of developing a techni cal career path for its Information Technology professionals to offer them the ability to conti nue career advancement. ISO Ne w England has also expanded its recruiting strategy to include buildin g relationships with key technical universities with the intent of facilitating campus hiring and further developing the technical skills of ISO-NE’s existing population.

New York

Demand — The New York area is a summer-peaking system, and summer peak demands are expected to grow at an average rate of 0.9 %, through 2017. This compares with 1.2 % growth projected in the 2007-2016 assessment conducted by the RAS in 2007. The forecast developed by the NYISO is based on historical weather-nor malized loads provided by the transmissionowners of New York State. At peak load levels, a one-degree increase in the cumulative temperature-humidity index (CTHI) above the de sign value of 84.2 will re sult in about 610 MW of additional load. (The CTHI is a three-da y heat index based on the dry bulb and wet bulb temperatures.)

Energy consumption is forecast to grow at an average annual rate of 1.2 % through 2017. This compares with 1.4 % growth projected in the 2007-2016 assessment conducted by the RAS in 2007. The decrease in demand and energy projec tions are the result of weaker long term economic growth projections, revisions to historical economi c time series, and new planned energy conservation activities of local utilities.

For Load Forecast Uncertainty, the New York ISO develops 90% confidence intervals about its long term energy and demand forecasts. In our In stalled Reserve Margin Studies, we determine the load forecast uncertainty at seven separate lo ad levels. The middle load level represents a 50th percentile load forecast and is our base case forecast. Th e remaining six load levels are distributed at plus and minus 1, plus and minus 2, and plus and minus 3 standard deviations of the mean of the peak-p roducing weather index.

Resources — New York’s Reliability Needs Assessment (RNA) provides a forecast of planned capacity resources over the study period. Table NYBA-1 below s hows this projection with the wind and biomass portions of the total in-state capacity resource mix segregated out. TheRegional Reliability Assessment

140 2008 Long-Term Reliability Assessment uncertainties for wind and hydro units are broken out , as well. Details of planned additions, reratings and retirements can be found in NYISO’s 2008 Load and Capacity Data Book 163

Table NYBA -1 NYBA Planned Resource Capacity Mix By Year

Fuel Type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Coal 3,105 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 2,803 Gas & Oil 14,515 14,746 14,746 14,515 14,515 14,515 14,515 14,515 14,515 14,515 Gas 6,467 6,467 6,467 6,467 6,467 6,467 6,467 6,467 6,467 6,467 Hydro 5,636 5,666 5,704 5,734 5,734 5,734 5,734 5,734 5,734 5,734
Nuclear 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 5,265 Oil 3,325 3,325 3,325 3,325 3,325 3,325 3,325 3,325 3,325 3,325 Biomass 357 364 370 370 370 370 370 370 370 370

Wind 424 443 449 449 449 449 449 449 449 449 w/recent

Wind* 707 726 732 732 732 732 732 732 732 732

Total 39,378 39,362 39,412 39,211 39,211 39,211 39,212 39,212 39,212 39,212 Certain 38,269 38,237 38,282 38,081 38,081 38,081 38,081 38,081 38,081 38,081 Uncertain 1,108 1,125 1,130 1,130 1,130 1,130 1,131 1,131 1,131 1,131 * Three wind farms totaling an additional 283 MW have recently begun operation.

The New York Independent System Operator ( NYISO) applies a 45% dera te factor for non-New York Power Authority (NYPA) hy dro generation for the expected peak months of July and August. The 45% de-rate factor is applied to the total available non-NYPA hydro generators totaling 1,040 MW. The large NYPA projects (St. Lawrence and Niagara) have specific derate factors based on the probability the unit will be at certain percentages of its rated output.

Wind and ambient readings taken near projec ted wind sites determine wind unit output over the course of a study year. This method has resulted in average availability rates of 10-11% during summer weekday peak periods (2 pm through 5 pm) with roughly 30% annual capacity factors. With 707 MW of wind generation capacity fo r this summer, the expected on-peak capacity counted is 71 MW from wind generators.

Two load response programs for the New York Market were introduced in May 2001. The Special Case Resource (SCR) and Emergency Demand Response Program (EDRP) are programs in which Customers are paid to reduce their cons umption by either interrupting load or switching to emergency standby generation when requested by the NYISO.

The EDRP program is classified as load relief and the SCR program as capacity resources. These programs currently provide about 300 MW and 1,300 MW of load relief, respectively.

163 NYISO’s 2008 Load and Capacity Data Book can be found at:

http://www.nyiso.com/public/services/planni ng/planning_data_reference_documents.jspRegional Reliability Assessment

141 2008 Long-Term Reliability Assessment Purchases and Sales— For 2008, the NYISO projects capacity backed energy net purchases into the New York Balancing Authority area ba cked by 2,802 MW of generating capacity.

Table NYBA-2 below shows the projection for firm contracts excluding the short term contracts mentioned above.

Table NYBA-2 New York Purchases and Sales

PURCHASE SOLD MEGAWATTS FROM TO

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PEAK - PURCHASES

ISO-NE NYISO 380.0 380.0 150.0 150.0 150.0 150.0 100.0 100.0 100.0 100.0 100.0

PJM NYISO 0.0 0.0 660.0 660.0 660.0 660.0 660.0 660.0 660.0 660.0 660.0

TOTALS 380.0 380.0 810.0 810.0 810.0 810.0 760.0 760.0 760.0 760.0 760.0

PEAK - SALES

NYISO ISO-NE 101.1 101.1 732.1 91.1 91.1 91.1 91.1 91.1 91.1 91.1 91.1

NYISO PJM 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1 73.1

NYISO ECAR 129.0 129.0 129.0 129.0 129.0 129.0 129.0 129.0 129.0 129.0 129.0

TOTALS 303.2 303.2 934.2 293.2 293.2 293.2 293.2 293.2 293.2 293.2 293.2

Fuel — Traditionally, the New York Area generation mix has been dependent on fossil fuels for the largest portion of the installed capacity. Recent capacity additions or enhancements now available use natural gas as the primary fuel. While New York is clearly dependent on fossil fuels, the risk of interruption to a single sour ce is mitigated by the large portion (37%) of units that can switch from natural gas to other fuel types such as residual or distillate oil.

The following figure depicts New York’s resource capacity mix by fuel type for the year 2008 on an installed capacity basis.Regional Reliability Assessment

142 2008 Long-Term Reliability Assessment Figure NYBA-1: 2008 NYBA Capacity by Fuel Type

17% 9% 37% 8%

14% 13%

1% 1% GAS - 6,467 (17%)

OIL - 3,325 (9%)

GAS & OIL - 14,514 (37%)

COAL - 3,105 (8%)

NUCLEAR - 5,265 (13%)

HYDRO - 5,636 (14%)

WIND (2) - 424 (1%)

OTHER (3) - 357 (1%) MW (1)

50 Summer 2008 = 39,095 MW

(1) - All values are rounded to the nearest whole MW.
(2) - Wind is listed at full Nameplate Capacity.
(3) - Includes Methane, Refuse, Solar & Wood

Table NYBA-2 below shows how the Capacity fuel mix changes over the study period.

TABLE 164 NYBA-2

Planned Resource Capacity Mix By Year

Fuel Type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Coal 7.9% 7.2% 7.2% 7.2% 7.2% 7.2% 7.2% 7.2% 7.2% 7.2%

Gas & Oil 37.1% 37.7% 37.7% 37.3% 37.3% 37.3% 37.3% 37.3% 37.3% 37.3%

Gas 16.5% 16.5% 16.5% 16.6% 16.6% 16.6% 16.6% 16.6% 16.6% 16.6% Hydro 14.4% 14.5% 14.6% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7% 14.7%

Nuclear 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5% 13.5%

Oil 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5% 8.5%

Biomass 0.9% 0.9% 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Wind 1.1% 1.1% 1.1% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2%

164 Only proposed resource additions identified in the NYISO Load and Capacity Data book and included in the NYISO

Reliability Needs Assessment (RNA), are considered.Regional Reliability Assessment

143 2008 Long-Term Reliability Assessment The above table shows the projected installe d capacity resource mix from 2008 through 2017. For the next ten years, resources fueled by natu ral gas, hydro, biomass, and wind will meet all of the growth in projecte d energy consumption.

There is a potential for a natural gas shortage in New York State in the wi nter. This could cause natural gas fired units to burn other fuels or cu rtail operations. If unit operation curtailment due to fuel unavailability occurs in load pockets, generation from other areas would need to help meet demand, causing heavier loading on the existing transmission system. Many of the dual fired units are the larger older steam units located in load pock ets and would impact reliability needs in a multiple ways if retired. The real challenge on a going forward basis will be to maintain the benefits that fuel diversity, in part icular dual fired fuel capability, provides today. This will be especially critical in New York City and Long Island which are entirely dependent on oil and gas fired units many of which have interru ptible gas transportation contracts. In terms of operational strategy, the NYSRC has adopted th e following local reliability rule where a single gas facility refers to a pipeline or storage facility:

I-R3. Loss of Generator Gas Supply (N ew York City & Long Island)

“The NYS Bulk Power System shall be op erated so that the loss of a single gas facility does not result in the loss of electric load within the New York City and Long Island zones.”

The NYSIO categorizes generation capacity fuel types into three supply risks: Low, Moderate and High

The greatest risk to fuel suppl y interruption occurs dur ing the winter months when both natural gas and heating fuel oils are competing to serve el ectrical and heating loads. Fortunately in New York, peak electrical loads o ccur during the summer months wh en demand is nearly 7,000 MWs greater than the winter peak. As such, New York can meet the winter peak of roughly 25,000 MW with sufficient generation without exposure to significant fuel risks. Even with a forced outage rate of 10%, there is sufficient generation in the low to moderate fuel risk categories to meet the winter electrical pe ak of 25,500 MW. This would leave a margin of nearly 4,000 MW or 14% of the total capacity characte rized by low to moderate fuel risk.

The NYISO continues to work with regulators and other interested parties on a host of environmental initiatives aimed at encouraging the development of new cleaner generation and reducing emissions from existing generation. The four programs with the potentia l to have the most impact on the power sector are; The New York State Renewable Portfolio Standard (RPS), NOx Emission Reduction of the Ozone Transport Commission, New York State Consent Orders, and the Regional Greenhouse Gas Initiative. A more complete description of these initiatives can be found in the NYISO Power Trends document dated February 2008. 165

165 http://www.nyiso.com/public/w ebdocs/newsroom/press_releas es/2008/nyiso_ptrendsfinal08.pdfRegional Reliability Assessment

144 2008 Long-Term Reliability Assessment The effects of the RPS and Consen t orders are captured in the a bove forecasts for resources in new plants and retirements, respectively. Plan s are currently being developed to address compliance in New York for the other two mentioned initiatives.

Transmission — Upgrades in the Rochester vicinity have been completed in preparation of the Russell Station retirement this summer. A cap acitor bank is schedule d to be added to the Millwood 345 kV substation by November 2008, for added voltage support in the lower Hudson Valley and Athens Special Protection System ( SPS). Also planned for this summer (June or July) is the re-conductor of the Northport – Norwalk Harbor 138 kV cable. The new cable will have three circuits and operate at th e same ratings as the current cable.

Additional improvements over the st udy period are identified on the table appearing on the next
page.Regional Reliability Assessment

145 2008 Long-Term Reliability Assessment Expected
Line Service Nominal Voltage Thermal Ratings Type of
Transmission Length Date/Yr in kV # of in Amperes Construction &
Owner Terminals miles * Prior to ** Operating Design ckts Summer Winter Conductor Size
Merchant East Coast Power, LLC PSE&G 230 kV Linden Cogen 345kV 2010 345 345 Variable Frequency Transformer

Transmission Owner

Firm Plans
CHGE E. Fishkill E. Fishkill xfmr #2 2008 S 345/115 345/115 1 440MVA 560MVA Transformer #2 (Standby)
CHGE Hurley Ave Saugerties 11.11 2011 W 115 115 1 1114 1359 1-795 ACSR OH
CHGE E. Fishkill Wiccopee 3.320 2011 S 115 115 1 1114 1359 1-795 ACSR OH
CHGE Saugerties North Catskill 12.25 2011 W 115 115 1 1114 1359 1-795 ACSR OH

CHGE Hurley Ave North Catskill 23.36 2012 S 115 115 1 1114 1359 1-795 ACSR OH
CHGE Pleasant Valley Knapps Corners 17.7 2017 W 115 115 1 1114 1359 1-795 ACSR OH
ConEd Sprain Brook Sherman Creek 10 2011 S 345 345 1 872 1010 2000 CU UG
LIPA Riverhead Canal 16.4 2011 S 138 138 1 1056 1204 2500 MCM Cu Sol Dielect UG LIPA (4) Pilgrim Brentwood 4.56 2012 S 138 138 1 2343 2506 1272 SSAC OH LIPA (4) Pilgrim Brentwood 4.56 2012 S 138 138 2 2343 2506 1272 SSAC OH LIPA (4) Pilgrim Brentwood 4.18 2012 S 138 138 3 2343 2506 1272 SSAC OH

LIPA New Brentwood Brentwood PS Phase Shifter 2012 S 138 138 1 - - Phase Shifter

- LIPA Brentwood PS Holtsville GT 12.4 2012 S 138 138 1 2343 2506 1272 SSAC OH

LIPA Barrett Bellmore PS Phase Shifter 2012 S 138 138 1 - - Phase Shifter

- LIPA Bellmore PS Bellmore 8.4 2012 S 138 138 1 1150 - 2000 mm2 Cu UG LIPA (5)***** Northport Narwalk Harbor 11 2014 S 138 138 3 675 675 3/C XLPE Cu 800mm2 UW / UG

NYPA* Willis 1 Plattsburgh -33.700 2008/2009 W 230 230 1 426 545 1-795 ACSR OH

NYPA* Willis 2 Plattsburgh -33.700 2008/2009 W 230 230 2 426 545 1-795 ACSR OH

NYPA**** Willis 1 Patnode 9.100 2008/2009 W 230 230 1 426 545 1-795 ACSR OH

NYPA  Patnode Duley 15.270 2008/2009 W 230 230 1 426 545 1-795 ACSR OH

NYPA** ** Duley Plattsburgh 9.32 2008/2009 W 230 230 1 426 545 1-795 ACSR OH

NYPA  Willis 2 Ryan 6.460 2008/2009 W 230 230 2 426 545 1-795 ACSR OH

NYPA** ** Ryan Plattsburgh 27.24 2008/2009 W 230 230 2 426 545 1-795 ACSR OH NYSEG (7) Wood Street Carmel 1.34 2009 S 115 115 1 775 945 477 ACSR OH NYSEG (7) Wood Street Katonah 11.7 2009 S 115 115 1 775 945 477 ACSR OH
NYSEG *** Etna Lapeer 14.950 2010 W 115 115 1 1410 1725 1277 KCM ACAR OH
NYSEG Etna Lapeer 14.950 2010 W 115 115 1 1410 1725 1277 KCM ACAR OH
NYSEG Lapeer Lapeer xfrm 2010 W 345/115 345/115 1 200MVA 220MVA Transformer
NYSEG Lapeer Lapeer xfrm 2010 W 345/115 345/115 1 200MVA 220MVA Transformer

NGRID Paradise Ln 115 kV Paradise Ln 115 kV - 2010 S

- - - - - 115 kV Switchyard

- O & R Ramapo Sugarloaf 16.000 2009 W 138 138 1 1089 1298 2-1590 ACSR OH
RGE Station 135 Station 424 4.98 2009 S 115 115 1 1135 1415 1033 AL OH
RGE Station 135 Station 424 4.977 2009/2010 W 115 115 1 1225 1495 1-1033.5 ACSR OH
Non-Firm Plans

NGRID South Saratoga (New Station) Luther Forest #W (New Station) 2.8 2009 S 115 115 1 TBD TBD New 115 kV line (2.8 miles new; 8.9 miles e xist)
NGRID South Saratoga (New Station) Luther Forest #X (New Station) 2.8 2009 S 115 115 1 TBD TBD New 115 kV line (2.8 miles new; 8.9 miles e xist)
NGRID North Troy Luther Forest #Y (New Station) 5.9 2009 S 115 115 1 TBD TBD New 115 kV line (5.9 miles new; 30.3 miles exist)
NGRID Mohican Luther Forest #Z (New Station) 5.9 2009 S 115 115 1 TBD TBD New 115 kV line (5.9 miles new; 12.1 miles exist)
NGRID Rotterdam South Saratoga #3 (New Station) 11 2009 S 115 345 1 TBD TBD New 115 kV line (to be converted to 345kV)
NGRID Gardenville Homer Hill 21 2010 S 115 115 2 TBD TBD 115 kV line Replacement

- NGRID Falconer Warren 19.4 2011 S 115 115 1 TBD TBD 115 kV line Replacement

- NGRID Mortimer Golah 9.6 2011 S 115 115 1 TBD TBD New 115 kV line

- NGRID Spier South Saratoga #3 (New Station) 21.7 2011 S 115 115 1 TBD TBD New 115 kV line
NGRID Rotterdam South Saratoga #4 (New Station) 11 2012 S 115 345 1 TBD TBD New 115 kV line (to be converted to 345kV)
NGRID Southwest 345 kV Southwest 115 kV - 2012 S

- - - - - 345/115 kV Stepdown

- NGRID Packard Paradise 13.5 2013 S 115 115 1 TBD TBD 115 kV line Replacement

- NGRID Paradise Gardenville 13.5 2013 S 115 115 1 TBD TBD 115 kV line Replacement

- NGRID Packard Gardenville 27 2013 S 115 115 1 TBD TBD New 115 kV line

- NGRID Princetown (New Station) South Saratoga #3 (New Station) 17 2018 S 345 345 1 TBD TBD New 345kV Line reconfig/convert from 115kV abov e
NGRID Princetown (New Station) South Saratoga #4 (New Station) 17 2018 S 345 345 1 TBD TBD New 345kV Line reconfig/convert from 115kV abov e
O & R Lovett Lovett xfrm 2013 S 345/138 345/138 1 501 MVA 501 MVA Transformer

(7) '115 kv operation as opposed to previous 46 kv operation (5) Cable replacement; LIPA owns 50% of the NUSCO cable (4) 138 kv operation as opposed to previous 69 kv operation ***** Partial NUSCO upgrade will be done in 2008 and full NUSCO upgrade is scheduled for 2014 (including Northport-Pilgrim Upgra de)   Lines resulting from tapping of Existing Circuit ** * Reconductoring of Existing Line
** S = Summer Peak Period W = Winter Peak Period * Line Length Miles - negative values indicate removal of Existing Circuit being tappedRegional Reliability Assessment

146 2008 Long-Term Reliability Assessment Operational Issues — No unusual operational issues have been identified for the period 2008- 2017.

Reliability Assessment Analysis — The NYISO conducts an annual Reliability Needs Assessment (RNA) 166 that examines both resource and transm ission needs over a ten year period. Resources totaling approximately 455 MW as well as transmission upgr ades that are under construction or otherwise have met the screening crite ria are included in the base case. The RNA determined that sufficient statewide reso urces are available to meet NPCC LOLE criteria through the year 2011. For 2012, the RNA indicates that sufficient resources would exist if 500 MW were added to New York City (NYC) or 750 MW were added in the Lower Hudson Valley or if transfer limits into NYC were in creased. Beyond 2012, additional resources of approximately 2,750 MW would be needed to meet the criteria through 2017; a majority of those resources would needed to be in the NYC z one to meet the NYC zonal requirements.

Subsequent to the RNA, the NYISO solicits solutions to address the needs identified in the RNA. In response to this solicitation, market based solutions and regulated backstop solutions are proposed. Transmission Owner (TOs) plans subseque nt to the RNA initiation are also evaluated by the NYISO and included in the assessment or evaluation of the proposed solutions. These TO plans will satisfy the reliability needs through 2012. Sufficient market based solutions have been proposed to more than meet th e needs through 2017. If sufficient market solutions are not proposed or do not proceed, the responsible TO s are obligated, under the NYISO reliability planning process, to proceed w ith the implementation of the re gulatory backstops and/or gap solutions when needed to meet any identified reliability needs.

Although, deliverability of resour ces is evaluated in the NYISO ’s resource adequacy and planning studies both on an inter-area, as well, as intra-zonal basis, the NYISO currently has under development a deliverability test for new res ources. This test woul d become part of the NYISO’s interconnection process. Resources that were not fully deliverable based on the test would either need to upgrade the system to be eligible for full capacity payments or only would be eligible to receive capacity payments for the portion of the facility that is deliverable.

NYISO conducts semi-annual and monthly Installe d Capacity (ICAP) auctions. Based on the forecast load for 2008, the ICAP requirement is 38,879 MW based on a 15% Installed Reserve Margin (IRM) requirement. Last year the IRM requirement was 16.5%. On February 29, 2008, the Federal Electric Regulatory Commission i ssued an order accepting the New York State Reliability Council's filing of a 15% IRM for the State of Ne w York. In addition to the generation resources within th e New York Balancing Authority area, generation resources external to New York can also participate in the NYISO ICAP market. An external ICAP supplier must declare that the am ount of generation that is accepte d as ICAP in New York will not be sold elsewhere. The external Balancing Authority in which the supplier is located has to agree that the supplier will not be recalled or curt ailed to support its own loads; or will treat the supplier using the same pro rata curtailment prior ity for resources within its Control Area. The energy that has been accepted as ICAP in New York must be demonstrated to be deliverable to

166 NYISO Report titled “Comprehensive Reliability Planning Pr ocess (CRPP) – 2008 Reliability Needs Assessment”, December

12, 2007Regional Reliability Assessment

147 2008 Long-Term Reliability Assessment the New York border. The NYISO sets a limit on the amount of ICAP that can be provided by suppliers external to New York. Resources wi thin the New York Balancing Authority area that provide firm capacity to an entity external to New York are not qualified to participate in the NYISO ICAP market.

The NYISO performs a resource adequacy study to help the New York State Reliability Council determine the required Installed Reserve Margin for the up coming capability year. This study specifies the margin required for the New York Balancing Authority area. The NYISO conducts the Locational Capacity Requirements study which de termines the amount of capacity that must be physically located within specific zones such as New York City and Long Island. The NYISO currently requires that a va lue of capacity equal to 80% of the New York City peak load be secured from within its zone and capacity to taling 94 % of Long Island peak load be secured within that zone, for the 2008-2009 capability y ears. The NYISO also performs an LOLE analysis that determines the maximum amount of ICAP contracts that can originate from Balancing Authorities external to th e New York Balancing Authority area.

NPCC requires that New York perform a compre hensive resource adequacy assessment every three years. This assessment uses an LOLE anal ysis to determine resource needs five years out into the future. A report is required showing how the NYISO would act to meet any projected shortfalls. In the tw o intervening years between studies, the NYISO is required to conduct additional analysis in order to update th e findings of the comprehensive review.

Presently, the New York State Reliability C ouncil (NYSRC) Reliability Rules are implemented such that the electric system has the ability "to supply the aggregate electrical demand and energy requirements of their customers at all ti mes, taking into account scheduled and reasonably expected unscheduled outages of system elements .” Compliance is evaluated probabilistically, such that the loss of load expectation (LOLE) of disconnecting firm load due to resource deficiencies shall be no more than an averag e of 0.1 days per year. This evaluation gives allowance for NYS Transmission System transf er capability documented in NYSRC Rules, Installed Reserve Margin (IRM), and Locati onal Capacity Requirements (LCR) reports. Currently all known deliverability concerns ar e captured in the evalua tion and there are none identified as needing mitigation. A multi area re liability simulation capturing the significant limitations of the NYS Transmission System is perf ormed every year to de monstrate compliance. IRM Requirements are developed annually to satis fy resource adequacy requirements. The NYISO establishes installed cap acity requirements (ICAP), including LCRs, recognizing internal and external transmission constraints.

The Beck-Packard BP76 230kV line is out of serv ice for this summer, cu rrently scheduled to return to service by late in the summer of 2010.

The NYISO performs transient dynamics and volta ge studies. There is no stability issues anticipated that could impact reliability during the 2008 summe r operating period. The NYISO does not have criteria for minimum dynamic reactive requirements. Transient voltage-dip criteria, practices or guidelines are determined by individual Transmissi on Owners in New York State. The NYISO does not use Un der Voltage Load-Shedding (UVLS).Regional Reliability Assessment

148 2008 Long-Term Reliability Assessment The NYISO performs seasonal operating planning studies to calculated and analyze system limits and conditions for the upcoming operati ng period. The operating studies include calculations of thermal transfer limits of the in ternal and external interfaces of the New York Balancing Authority area. The studies are mode led under seasonal peak fo recast load conditions. The operating studies also highlight and discuss operating conditi ons including topology changes to the system (generators, substations, transmi ssion equipment or lines) and significant generator or transmission equipment outages. Load a nd capacity assessment are also discussed for forecasted peak conditions.

Other Reliability Assessment Information — A number of issues that were indicated in the LTRA instructions have been addressed in th e NERC Resource Issues Subcommittee Resource Adequacy Survey that was supplied by the NYISO to NERC on May 30, 2008.

Ontario

Demand - Ontario’s forecast of demand is based on Monthly Normal weather. The economic forecast is based on the most recent information a nd predicts a fairly neutral growth for Ontario in 2008 and 2009, followed by modest economic grow th. The impacts of the high Canadian dollar, the current economic cl imate and particularly the cons iderable impacts from planned conservation and growing load-displacing generati on is stabilizing Ontari o’s load growth and moving it in the dir ection of gradual, intentional decline.

Due to the economic, conservation and load-displ acing generation impacts, demand is expected to shrink over the course of the forecast. Peak demand is expect ed to average declines of 0.5% per year and annual energy demand is expected to average declines of 0.9% per annum. This is in contrast to last year’s forecast where peak demand had average annual decreases of 0.2% and energy demand was expected to grow by 0.4%.

Ontario has a number of dema nd response programs that can reduce demand. A number of consumers within the province bid their load into the market a nd are responsive to price through IESO to dispatch instructions. Other consumers have been contracted by the Ontario Power Authority (OPA) to provide demand response under tight supply conditions. The combined amount of these demand measures has been stead ily increasing and curren tly amounts to slightly more than 800 MW in total, of which two thir ds is included for seasonal capacity planning purposes, with half of the included amount categorized as interruptible. This amount is expected to grow over time as more load is contracted to respond to tight supply conditions. By the end of the forecast, the interruptible component is expected to grow to more than 500 MW.

The IESO quantifies the uncertainty in peak dema nd due to weather varia tion through the use of Load Forecast Uncertainty (LFU), which repr esents the impact on demand of one standard deviation in the underlying weather parameters. This is used with Monthly Normal weather demand to conduct probabilistic analysis. As well, the IESO uses an Extreme Weather scenario to study the impacts of adverse weather conditions on reliability of the IESO controlled grid. The IESO also studies the reliab ility of the system prior to th e impact of planned conservation savings. The IESO did not look at alternate economic scenarios.Regional Reliability Assessment

149 2008 Long-Term Reliability Assessment Generation - The total capacity of existin g installed resources connect ed to the IESO controlled grid is 31,297 MW, of which the amount of ‘c ertain’ capacity is 28,194 MW for summer 2008. The remainder, 3,103 MW, is ‘uncertain’ capacity for 2008 which includes on-peak resource deratings, planned outages and transmission-limited resources.

About 300 MW of dependable new supply (394 MW inst alled) is scheduled to come into service before the 2008 summer peak perio d. All of this new supply, w ith one exception, is gas-fired generation, including 340 MW of generati on (250 MW under contra ct and considered dependable) in downtown Toronto from the firs t, simple cycle phase of a 550 MW combined cycle energy centre to be comp leted by summer 2009 and 31 MW of Combined Heat and Power projects in several locations around the province. A hydroelect ric project with an installed capacity of 23 MW will, also, come into serv ice before summer 2008. Eighty percent of this new installed hydroelectric capaci ty is assumed to be availabl e at the time of weekly peak.

The existing installed cap acity of wind generation connected to the IESO controlled grid is 471 MW. Ten percent of the installed wind capacity is assumed to be available at the time of weekday peak, thus, 47 MW of wind is considered certain for capacity planning purposes. Of the 75 MW of installed biomass generation in the province, 45 MW is assumed certain. The generation output of some biomass units has b een reduced as a conse quence of reductions in steam demand primarily from pulp and paper operations.

The table below lists the certain and uncertain capacities for Existin g, Planned and Proposed resources for summer 2008 to 2017.
Projected DESCRIPTION 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Existing Total Certain Capacity 28194 28123 26041 25072 24504 24593 24593 20230 18759 18553 Wind Expected On-Peak 47 47 94 94 94 94 94 94 94 94 Hydro Expected On-Peak 5869 5869 5869 5869 5869 5869 5869 5869 5869 5869 Biomass Expected On-Peak 45 45 45 45 45 45 45 45 45 45 Existing Total Installed Capacity 31297 31297 31297 29832 28156 27991 27991 24394 24287 24081

Existin g Installed Wind Capacit y 471 424 377 377 377 377 377 377 377 377 Existing Installed Hydro Capacit y 7788 7788 7788 7788 7788 7788 7788 7788 7788 7788 Existing Installed Biomass Capacit y 75 75 75 75 75 75 75 75 75 75

Planned Total Certain Capacity 299 4013 5954 5969 5969 5969 5969 5969 5969 5969 Wind Expected On-Peak 0 63 158 173 173 173 173 173 173 173 Hydro Expected On-Peak 18 22 29 29 29 29 29 29 29 29 Biomass Expected On-Peak 0000000000 Planned Total Maximum Capacity 304 4595 6599 6675 6675 6675 6675 6675 6675 6675

Planned Maximum Wind Capacit y 0 631 789 865 865 865 865 865 865 865 Planned Maximum H y dro Capacit y 23 36 43 43 43 43 43 43 43 43 Planned Maximum Biomass Capacit y 0000000000

Proposed Total Certain Capacity 0 0 58 650 1380 3137 3925 4388 4735 4773 Wind Expected On-Peak 0 0 0 115 115 190 272 317 364 379 H y dro Expected On-Peak 0 0 58 185 404 446 558 604 743 753 Biomass Expected On-Peak 0 0 0 0 61 101 144 212 373 386 Proposed Total Maximum Capacity 0 0 81 1205 2060 4130 5286 5947 6533 6635

Proposed Maximum Wind Capacit y 0 0 0 575 575 948 1359 1585 1820 1895 Proposed Maximum Hydro Capacit y 0 0 81 280 624 680 832 895 1085 1099 Proposed Maximum Biomass Capacit y 0 0 0 0 61 101 144 212 373 386
The process used to select Planned and Propos ed capacity resources is the Ontario Power Authority’s Integrated Power System Plan. Established in 2005, the Ontario Power Authority (OPA) is the electricity system planner for the province of Ontario.Regional Reliability Assessment

150 2008 Long-Term Reliability Assessment The OPA’s statutory objects require it to, among ot her things; ensure adequate, reliable and secure electricity supply and resources in Ontario and to conduct independent planning for electricity generation, demand manageme nt, conservation and transmission.

One of the responsibilities of the OPA is to de velop a 20-year Integrated Power System Plan (IPSP) and to submit the IPSP to the Ontario En ergy Board for its review and approval. The IPSP is to be updated every three years. Th e IPSP must follow any directives issued by Ontario’s Minister of Energy relating to the government’s electricity goals. In addition, the IPSP must develop appropriate procurement processe s for managing electricit y supply, capacity and demand in accordance with the IPSP and apply to the Ontario Energy Board for approval of the IPSP’s proposed procurement processes.

Ontario’s first IPSP was submitted to the Ontario Energy Board for review in August 2007, and is currently under regulatory review. The IPSP c overs a period of twenty years, complies with the goals and requirements set out by the government of Ontari o and proposes a procurement process for managing electricity supply, capac ity and demand in acco rdance with the IPSP.

Purchases and Sales - At present, there is no Firm, Non-Firm or Expected purchases from other regions. Transactions under st udy (i.e. provisional) are imports from Labrador and Manitoba.

The IESO has agreements in pl ace with neighbouring jurisdicti ons in NPCC, RFC and MRO for emergency imports and reserve sharing, should they be required in day to day operations.

Fuel - The Ontario fuel supply infrastructure is judged to be adequate, and there are no fuel delivery problems anticipated. Nine per cent of the existing generation capacity in Ontario is gas-fired. The percentage of gas generation wi ll increase to 26% by 2017 as coal generation is retired. Gas pipeline capacity, historically, has not limited the summer energy or capacity capability of Ontario generation fuelled solely by natural gas and is not expected to be a problem for future summers. Similarly, no fuel delivery concerns have been id entified for coal-fired generating stations. In its market manuals, the IESO requires generator market participants in Ontario to provide specific information rega rding energy or capacity impacts if fuel-supply limitations are anticipated. No limitations have been reported for th e summer months.

The province is not experiencing a drought at present. Hydroele ctric outputs are based on the median historical values of hydroelectric production and contribut ion to operating reserve during the weekday peak hours. The median hydroelectri c value assumed available for annual peak is about 75% of the total installed capacity.

Transmission - Hydro One and TransÉnergie are build ing a 1,250 MW interconnection between Hawthorne TS in Ontario and Outaouais stati on in Quebec consisting of a double circuit 230 kV line and back-to-back high-voltage direct-current (HVdc) convert ers at Outaouais. Work to accommodate the tie, scheduled to be in se rvice before summer 2009, will also include improvements to load serving capab ilities in the Ottawa area.

The existing special protection system (SPS) at St. Lawrence was modifi ed, allowing increased westward transfers. This SPS, which rejects ge neration at Saunders GS fo r circuit contingencies between eastern Ontario and the Toronto area, is planned to be enhanced further, to increase itsRegional Reliability Assessment

151 2008 Long-Term Reliability Assessment functionality and reliability under peak load conditions, and to maximize simultaneous import capability from Hydro Québec and New York. Th ese future enhancements will be required in 2009 upon completion of the new 1,250 MW Ontario-Québec interconnection.

Over the next decade, the need for transmission enhancements is particularly evident in three areas of the Ontario:

• In south-western Ontario to deliver additi onal nuclear and wind supply from the Bruce

area,

• In northern Ontario to enable the planned expansion of hydroelect ric and wind capability and to reinforce the connection of these areas to the load centre in southern Ontario

• In the Toronto region in order to meet cap acity needs of fast growing areas in the Greater Toronto Area and to improve reli ability to Canada’s largest city.

The southwestern Ontario transmission system need s to be enhanced to deliver the planned and future increases in generating capability in and around the Bruce peninsula. Currently, there is inadequate transmission out of the Bruce area to accommodate both the expected wind developments in that area and the expanded capacity of the Bruce nuclear station resulting from planned refurbishments. Some near-term reinfor cements include the up-r ating of the Hanover to Orangeville 230 kV circuits, and th e installation of additional voltage support facilities at various transmission stations in southwestern Ontario. Th ese will increase the transfer capability out of Bruce in the short-term. The proposed 500 kV double circuit line from Bruce to Milton received the OEB approval for leave to construct on Sept ember 15, 2008. This represents a significant milestone in the approval process and the line is planned to go into service in December 2011. The line will provide the required transmission capab ility over the long-term to deliver the full capability of the Bruce refurbishment and both planned and potential new renewable resources in the Bruce area. The new 500 kV line out of the Bruce area is required to accommodate the additional generation from both new wind projects and refurb ished Bruce nuclear units.

As the Nanticoke coal-fired station is phased out by 2014, additional volta ge support in southwestern Ontario will be required. Both st atic and dynamic reactive power solutions are being considered, ranging from shunt capaci tors to possible replacement generation.

Over the next few years, over 1,600 MW of contracted gas-fired generation will be coming inservice in the Sarnia area. This will significan tly increase the amount of power flowing between the Sarnia area and the London area and stress the existing transmission system west of London. The planned retirement of the Lambton coal-fired generating plant (2,000 MW) early next decade, however, will reduce this transmission concern. Thus, there is currently no plan to reinforce the transmission west of London. This n eed will be monitored into the future as new generating resources such as rene wables and combined heat and power projects are proposed in the Sarnia and Windsor-Essex areas.

Transmission enhancements in the northeastern part of the Ontario grid are required to allow the delivery of planned generation from that area to southern Ontario. The proposed enhancements, including series capacitors at Nobel TS, and a static var compensato r (SVC) in northeastern Ontario, are expected to relieve existing conge stion and accommodate the additional output fromRegional Reliability Assessment

152 2008 Long-Term Reliability Assessment the proposed expansion of the four existing hydro electric stations on the Lower Mattagami River and other committed renewable energy developments in northeastern Ontario.

The development of enabling tran smission reinforcements is planned to integrate additional renewable resources procured in the northern part s of Ontario and to connect these areas to the load centre in southern Ontario.

The continuous economic growth experienced in pa rts of Ontario in the last decade has resulted in the loads in a number of areas reaching or ex ceeding the capability of the existing transformer stations and/or their supply line s. Some large load centers al so have concerns with supply security. To address these needs and provide addi tional local area supply capacity for future load growth, work has commenced on a number of area supply projects.

Phase angle regulators (PARs) are installed on the Ontario-Michigan interconnection at Lambton TS, representing two of the four interc onnections with Michigan, but are not currently available to regulate flows on the interconnection except in emergencies. These PARs are expected to become operational by the end of 20 08. The operation of the these PARs along with the PAR on the Ontario-Michigan interconnection n ear Windsor will control flows to a limited extent, and assist in the mana gement of system congestion. The capability to control flows on the Ontario- Michigan interconnection between Scott TS and Bunce Creek is unavailable. The PAR installed at Bunce Creek in Michigan has failed and is scheduled for replacement in 2010.

The table below lists the transmission projects th at are planned for comp letion within the next ten years. They are considered to provide significant improvement to system reliability.Regional Reliability Assessment

153 2008 Long-Term Reliability Assessment Voltage

(kV) Length (Miles) In-service Date(s) Description/Status

Cardiff TS to Hurontario SS 230 3 05-2010 Under Construction Hurontario TS to Jim Yarrow TS 230 3 05-2011 Under Construction Hurontario SS 05-2010 Under Construction Ingersoll Jct. to Woodstock-Karn TS 230 7 04-2011 Construction Imminent Essa TS to Stayner TS 230 17 04-2009 Under Construction Nobel SS Series Compensation 500 12-2010 Construction Imminent Porcupine TS SVC 230 11-2010 Construction Imminent Bruce GS to Milton TS 500 115 12-2011 EA Approval Phase Allanburg TS to Middleport TS 230 50 To be determined On-hold Outaouais SS to Hawthorne TS 230 14 06-2009 Under Construction Nanticoke TS SVC 500 2011 Planning Phase Detweiler TS SVC 230 2011 Planning Phase Lakehead to Birch 230 13 2013 Planning Phase Sudbury to Greater Toronto Area 500 180-250 2017 Planning Phase Mississagi TS to Hanmer TS 500 130 2017 Planning Phase Pinard TS to Hanmer TS 500 230 2017 Planning Phase Mackay TS to Third Line TS 230 60 2017 Planning Phase Nipigon TS to Little Jackfish 230 or 115 120 2014 Planning Phase Seaforth TS to Goderich TS 230 25 2015 Planning Phase Owen Sound to Bruce Peninsula 230 or 115 30-50 2015 Planning Phase Manitowadge to Espanola TS 230 or 115 50 2015 Planning Phase Transmission Project Name

Alternatives for some other are supply project s are being assessed. These include Supply to Essex County and Guelph Area Transmission Reinfor cement. Since the terminal points for these have not yet been identified, they are not included in the table above.

There are no major transformer additions planned for in service in the next ten years.

Operational Issues - One of the most important developments in the Ontario system is the planned retirement of all coal fired genera tion by 2014, an initiative taken in response to a directive issued by the Ontario government. The In tegrated Power System Plan developed by the OPA provides a plan to address this resource gap with generation from a number of committed and planned resources. Although this presents a major change in the Ontario system, with careful planning it is anticipated that all operational challenges can be addressed.

At this time, there are no unusual operating cond ition, environmental, or regulatory restrictions that are expected to a ffect capacity availability for the next ten years, beyond t hose identified in the OPA’s IPSP.

Reliability Assessment Analysis - The IESO reliability assessments include multi-area resource adequacy assessments as well as transmissi on adequacy assessments, to determine the deliverability of resources to load. Two majo r assessments are performed periodically by the IESO.

Every quarter, the IESO prepares an18-Month Outlook which advises market participants of the resource and transmission reliability of the On tario electricity system , assesses potentially adverse conditions that might be avoided throu gh adjustment or coordination of maintenanceRegional Reliability Assessment

154 2008 Long-Term Reliability Assessment plans for generation and transmission equipment, and reports on initiatives that are being put in place to improve reliability w ithin the 18-month timeframe.

At least once a year, the IESO investigates the ad equacy of the Ontario system for the next five years and the key messages are published in th e Ontario Reliability Outlook. The assessment processes and the criteria which are followed are described in the documents, “Method to Perform Long-Term Assessments”, 167 and “Ontario Resource and Transmission Assessment Criteria.” 168

The IESO determines required reserve levels based on probab ilistic methods deemed by NPCC to be acceptable for meeting regional LOLE criteria. In considering what re sources contribute to adequacy the IESO assumes that the planned a nd proposed resource additions can meet their stated in service dates and the fo recast amount of conservation can be achieved. At this time, the reserve requirements are met solely with the planned and proposed resources that are internal to Ontario. Should capacity commitments be contracted in future from external entities, these will be included to the extent they are not considered to be capacity in the balancing area from which they may be supplied.

Each year, in compliance with NPCC requireme nts, the IESO performs a five-year LOLE analysis to determine the resource adequacy of Ontario. Every third year, a comprehensive study is conducted, with annual interim reviews between major studies. In addition, IESO participates with the other members of NPCC in regional stud ies which look at regional long range adequacy and interconnection benefits between Balancing Authorities in NPCC.

Projected capacity reserv e requirements, determined on the basi s of the IESO’s requirements for Ontario self-sufficiency, are.14.5% until 2014 and 15.3% thereafter. IESO routinely assesses resource requirements for the first five years of the ten-year period. In as sociation with the OPA, the periods beyond five years are assessed and resource plans developed as part of the IPSP process. Transmission assessments are conducted, as needed, as far into the future as necessary recognizing the long lead time for significan t transmission facility development.

IESO considered only the committed and contracted resources in the 2007 assessment. Projects that are in the planning stage from the IPSP ar e included in this year’s assessment. These projects amount to about 6,600 MW in the next ten years.

IESO and the Ontario Power Authority recognize the potential for certain adverse conditions to result in higher than expected resource unavailab ility and establish planning reserves sufficient to handle many of these. To the extent re source procurement exceeds the planning reserve requirements, resource adequacy can be main tained for higher than normal contingencies. However, there are always conditions which can exceed those planning assumptions. In such adverse situations the IESO’s operations would rely on interc onnection support and available control actions to mainta in system reliability. Through develo pment of a diverse resource mix, the potential consequence of these events is reduced.

167 http://www.ieso.ca /imoweb/monthsYear s/monthsAhead.asp
168 http://www.ieso.ca/imoweb/pubs /marketAdmin/IMO_REQ_0041_Tra nsmissionAssessme ntCriteria.pdfRegional Reliability Assessment

155 2008 Long-Term Reliability Assessment Although energy supplies available w ithin Ontario are expected to be adequate overall, energy deficiencies could arise as a re sult of higher than forecast for ced outage situations, prolonged extreme weather conditions and other influenci ng factors. Interconnection capability and available market and operational measures have been evaluated as sufficient to ensure summer energy demands can be met for a wide variety of conditions. The IESO uses a measure of forecast uncertainty in a probabilistic analysis to account for variations in demand due to weather volatility. This uncertainty is used in conjunc tion with the normal weather demand forecast to determine resource adequacy. As well, the IESO creates a demand forecast based on extreme weather and uses it in further assessing system adequacy.

IESO assessments of resource adequacy re cognize the supply limitati ons associated with uncertain and transmission constrained resources . Transmission limits are modeled on a zonal basis and recognize transmission improvements wh ich will result from implementation of the OPA’s IPSP. Uncertain resources, such as wind, are considered using a statistical approach which conservatively combines s imulated and historical data to arrive at expected levels of “certain” capability.

A number of major unit refurbishment or retireme nt decisions are expected to occur in Ontario by the year 2017. Expected unit retirements are a pproximately 6,400 MW of coal-fired resources across four facilities and 15 units (by the end of the year 2014). Measures taken to mitigate reliability concerns include the development of an IPSP for Ontario. The IPSP considers expected and potential unit refurbishments or re tirements and proposes wa ys to meet resulting resource requirements. Specific measures includ e the procurement of new gas-fired, renewable and conservation resources as well as the procur ement of refurbished nuclear resources. In addition, the IPSP considers the potential role for nuclear refurbishments and new-build nuclear resources as well as transmission that would be required to integrate all of the above-mentioned resources. Additional options in clude the potential for firm purchases from outside of Ontario, expanding capability at existing gas-fired stations, continuation of capability at existing gas-fired stations that would othe rwise be retired, developi ng greater coordination and flexibility related to nuclear refurbishment outages and converting existing coal stations to natural gas. Mitigation of reliability concerns is to be supported th rough ongoing monitoring, assessment, measurement and verification and regular updates (i.e . every three years) to the IPSP.

The IESO has a local area deliverab ility criterion for load security and restor ation, and a resource adequacy assessment criterion which are described in sections 7 and 8 of the “Ontario Resource and Transmission Adequacy Criteria” document. In our quarterly and annual assessments mentioned at the beginning of the section, the IE SO identifies any delive rability concerns which are subsequently addressed by the transmitters as part of their planning activities and the OPA as part of the generation procurement programs.

The IESO reviews its system operating limits on an ongoing basis, as warranted by system configuration changes on the grid. In advance of each summer peak season, the IESO analyzes the forecast demand for Ontario, and forecast transmission and generation availability, and assesses the ability of the planned generation to supply the forecast load (in essence its deliverability). Where transfer limits are e xpected to restrict available generation, theseRegional Reliability Assessment

156 2008 Long-Term Reliability Assessment restrictions, in addition to zone-to-zone system operating limits, are factored into the reliability analysis for the season, to determine IESO’s resource adequacy. IESO, as the Reliability Coordinator, and via its authority to direct the operation of the IESO-administered market and the IESO-controlled grid, can ensure that gene ration dispatch does not violate system operating limits. Where resources are expected to be insufficient to satisfy established criteria 169 , the IESO can deny final approval for planned outages, and can rely on emergency procedures in the operational time frame to a ddress shortfall conditions.

The IESO regularly conducts tran smission studies that include results of stability, voltage, thermal and short-circuit analyses in conforman ce with NPCC criteria. Since the implementation of the NERC TPL standards in June 2007, the IESO’s comprehens ive 2007 transmi ssion studies have been conducted to comply with these standards, in addition to NPCC criteria.

The IESO has market rules and connection requirements that establish minimum dynamic reactive requirements, and the requirement to opera te in voltage control mode for all resources connected to the IESO-controlled grid. In addition, the IESO’s transmission assessment criteria includes requirements for absolute voltage rang es, and permissible voltage changes, transient voltage-dip criteria, steady-st ate voltage stability and requi rements for adequate margin demonstrated via pre and post-co ntingency P-V curve analysis. These requirements are applied in facility planning studies. Seasonal operating limit studies review and confirm the limiting phenomenon identified in planning studies.

There are currently no Under-V oltage Load Shedding systems installed in Ontario for the purpose of controlling the voltage on the bulk pow er system portion of th e IESO-controlled grid in response to bulk power system events. There are several systems used for localized voltage control in the event of an outage to local supply facilities.

Following the 1998 ice storm and prior to the 2002 opening of Ontario s competitive markets for electricity Ontario’s Emergency Planning Task Force (EPTF) was created. It is chaired by the IESO and includes the major electricity sector players including the pr ovincial government’s Ministry of Energy. The EPTF oversees an emergency management team, the Crisis Management Support Team (CMST), to manage the crisis and mitigat e the impact on public health and safety due to an extended electricity system emergency. Annually Ontario runs a program of Reliability and Emergency Management workshops includi ng table top drills. Additionally major integrated ex ercises are staged in which bot h the operational response and emergency management infrastructure is activat ed. The CMST also performs regular test activations.

During the nine day capacity a nd energy emergency that follow ed the August 2003 blackout, the CMST managed the emergency via th irty one conference call meeti ngs and were instrumental in producing media messages, facilit ating the government's appeal and direction for reduced demand and obtaining of environmental variances for additional supply.

169 NPCC Criteria A-02, ”Basic Criteria for Design and Operation of Interconnected Power Systems” and IMO_REQ_0041, “Ontario Resour ce

and Transmission Assessment Criteria”Regional Reliability Assessment

157 2008 Long-Term Reliability Assessment The province is not experiencing a drought at present. Hydroele ctric outputs are based on the median historical values of hydroelectric production and contribut ion to operating reserve during the weekday peak hours. The median hydroelectri c value assumed available for annual peak is about 75% of the total installed capacity.

In 2007, the IESO conducted a Comprehensive Re view of Transmission Adequacy which assessed the IESO controlled gr id’s conformance with the NE RC TPL-001 – 004 standards and NPCC’s more stringent planning criteria. The Ontario power system, including the proposed generation and transmission changes up to 2012, is in conformance with the applicable NPCC and NERC documents, with no exceptions. The pr oposed changes and additions to the existing power system in Ontario will not adversely affect the reliability of the Eastern Interconnection.

The IESO initiated the Ontario Smart Grid Forum, a broad-based industry working group focused on developing a vision for a provincial smar t grid that will provide consumers with more efficient, responsive and cost effective electricity service. It is hoped that this forum will build on the provincial Smart Metering Initiative to in stall smart meters by 2010 and complements the renewal taking place in Ontario’s tr ansmission and generation sectors.

The IESO is developing an on-line limit derivation tool to maxi mize transmission capability in the operating time frame. This tool is planned to be implemented over the ne xt one to four years.

The Ontario Market Rules obligate anyone planni ng to connect or modify a connection to the IESO-controlled grid to apply to the IESO for a connection assess ment. All connection assessment studies performed by the IESO for c onnection of new or modified generation and transmission facilities include a short circuit stud y which identifies the effect of the new facility on the system short circuit levels. In addition, H ydro One periodically pe rforms a short circuit level survey and makes the results available to the IESO. Where short circuit levels are envisaged to exceed the capability of the existing equipment, new equipment with higher ratings is required to be installed if available, or short circuit levels are limited to safe levels by operating the system split during the critical periods.

The reliability impacts due to aging equipment are managed by the equipment owners through extensive maintenance programs and equipment replacement programs for equipment that is expected to reach end of life.

Other Region-Specific Issues th at were not mentioned above - There are no other issues to report.

Québec

Demand 170

Climatic uncertainty is modeled by recreati ng each hour of the 36-year period (1971 through 2006) under the current load forecast conditions. Mo reover, each year of historic data is shifted up to plus and minus 3 days to gain informa tion on conditions that o ccurred during a weekend

170 http://www.regie-energie.qc.ca/audi ences/3648-07/Requete3648/B-1-HQD-01-01_3648_01nov07.pdfRegional Reliability Assessment

158 2008 Long-Term Reliability Assessment for example. Such an exercise generates a set of 252 different demand scenarios. The base case scenario is the arithmetic average of those 252 scenarios. The Québec Area produces a high case demand scenario. Economic parameters are set hi gher and the same method as the base case is reproduced. For the first year of forecasting, the high case scenario is two to three percent higher than the base case scenario. In modeling, the uncertainty is represented through load multipliers covering errors of two standard deviations. Each load multiplier has a probability of occurrence. Given the global uncertainty, the probability that the actual peak for winter 2007/2008 was in the range of plus and minus 1,700 MW around the forecast peak was 68 % (assuming a normal distribution).

The 2007-2016 average annual growth rate was 0.66 % and the forecast average annual growth rate for 2008-2017 is 0.8 %.

In Québec, there is only one distributor, and accordingly there is no need to aggregate the load forecast. The load forecast incorporates all of Hydro-Québec programs designed to reduce the peak demand. For the 2007-2008 winter peri od, that reduction repr esents 890 MW; 2,990 MW is reduced in the winter period 2016-2017.

Generation Québec has more than 40,000 MW of existing ce rtain capacity. There are more than 2,000 MW of planned and proposed capacity. In summ er 2008, there are 420 MW of installed wind capacity and a total of more than 3,000 MW of wind capacity developed by the winter 2013/2014. For biomass, there is 44 MW of installed capacity.

For reliability assessment, Québec consider s the installed and planned future capacity (construction has started, or regulatory permits approved or approved by co rporate management). The “La Romaine” project (882 MW) is the only future project include d in our long term analysis. The in-service date is expected to be late 2014 for the first phase of the project.

Purchases and Sales on Peak

Québec has a 200 MW firm purchase contract with New Brunswick until October 2011. New Brunswick uses the Millbank unit to deliver this contract. Québec has two firm contracts, one with Ontario (145 MW until the end of horizon of this study. The othe r contract is with New England (310 MW until the end of 2011.

Hydro-Québec Distribution includ es, when planning its resources , a potential of 500 MW for interconnection assistance fo r the winter months. When neede d, short term calls for tenders are launched and transmission capacity is reserved for those purch ases. Hydro-Québec Production can participate in these calls for tenders.

Fuel Non-hydraulic resources account only for a small porti on of total resources. Plants using oil or jet fuel are refuelled by boat or by truck, and generally not during the winter season. Natural gas is used at a single cogeneration plant, and it is delivered under a firm natural gas purchase
contract.Regional Reliability Assessment

159 2008 Long-Term Reliability Assessment Transmission

Operational issues a) There is one anticipated unit outage (G entilly-2 nuclear unit of 675 MW, from late 2010 to mid-2012) but this outage will not impact reliability. Variable resources, transmission additions and temporary operating measures will not impact reliability in a negative manner during the next ten years. b) No restriction for the Québec Area.

Reliability Assessment Analysis

To determine whether existing and planned resources provide an adequate level of reliability, the Québec Area uses the NPCC resource adequacy criterion, an LOLE of 0.1 day per year, which gives a required reserve of about 11 % of the peak load for the year of analysis. This percentage can vary if the future resources have different character istics and/or the load uncertainty varies.

i) An LOLE of 0.1 day/year which gives a required reserve of about 11 % of the peak load for the current year of analysis. ii) Not counting the import of 200 MW from Ne w-Brunswick, the inte rnal resources are sufficient to meet the resource adequacy criterion. iii) Each year Québec has to produce resource adequacy assessments for the NPCC and the Québec Energy Board. These assessments are done during the fall for th e next winter peak period and the following years. Please refer to the following web sites: http://www.npcc.org/adequacy.cfm and for the last assessment to the Québec Energy Board (November 2007): http://www.regie-energie.qc .ca/audiences/Suivi.html

. iv) There is no significant change fr om last year’s assessment. v) In Québec, large multi-year water reservoirs allow hydro generation to be available on peak. For all generation, we use the Depe ndable Maximum Net Capability by month taking account the water head. The capacity sh ould be able to withstand a minimum two Voltage Length In-service Transmission Project Name (KV) (Miles) From / To Rimouski / Les Boules 230 34,4 08-déc Les Boules / Matane 230 58,1 08-déc Rimouski / Matane 230 5,1 08-déc Matane Goemon 230 43,8 08-déc Carleton / Line 2398 230 7,5 08-déc Les Mechins / Line 23 YY 230 6,3 09-déc Chenier / Outaouais 315 70,6 10-mai Eastmain-1A / Eastmain-1 315 1,2 10-juil Sarcelle / Eastmain-1 315 68,8 10-juil Goemon / Mont-Louis 315 46,3 10-déc Goemon / Gros Morne 315 55,6 11-déc Romaine-2 / Arnaud 315 162,9 14-déc Romaine-1 / Romaine-2 315 19,1 16-déc Dates (In French)Regional Reliability Assessment

160 2008 Long-Term Reliability Assessment

hours per day run. The run of the river hydr o units are derated according to specific constraints. Non-hydraulic resources account only for a small portion of total resources. Plants using heating oil or jet fuel are refuel led by boat or by truck and generally not during the winter season. Natural gas is used at a single cogeneration plant and is delivered under a firm purchase contract. vi) In this reliability assessment , Québec Area includes a high load forecast scenario. All the economic, demographic and energy parameters are upgraded compared to the base case scenario. The load uncertainty is then redu ced to just weather considerations. If the criterion (0.1 day/year of LOLE) isn't met, Québec identifies the different ways to restore reliability. vii) Hydro-electric capacities monthly withsta nd at minimum 2 hours per day. Intermittent resources are derated according to cons traints. Wind resources are not included.

During the assessment period, the Gent illy-2 nuclear statio n will be out for majo r repair, but this refurbishment will not impact reliability. Québec system operator, TransÉnergie, designs a nd operates the transmission system within all the standards of the electric indus try. There are no long term intern al transfer limits that impact reliability on the Québec system. Projected tran smission margin for the peak period are adequate to carry the net internal demand plus the firm capacity sales. Moreover, enough transmission capability remains on the system to carry additional resources that would be called upon if load is greater then forecast. Generation plants do not share common infrastructures other than the transmission grid. Therefore, no extreme con tingencies are foreseeable other than a loss of transmission capacity. During the winter operating period, the day-ahead capacity margin requirement is twice the operationa l reserve to account for uncerta inties on load forecast and on the availability of generating units. Québ ec is 95 % hydro generation. Energy (water) availability is more a concern then capacity av ailability. To assess its energy reliability Québec has developed an energy criterion that states that sufficient reso urces should be av ailable to go through sequences of two or four years of low wa ter inflows having a two percent probability of occurrence. Such assessment is presented three times a year to the Québec Energy Board. For reliability assessment, we considered the in stalled capacity and planned future capacity (Construction has started, or regulatory permits approved or approved by corporate management).

Region Description

NPCC is a New York State not-fo r-profit membership corporati on, the goal of which is to promote and enhance the reliable and efficient operation of the international, interconnected bulk power system in northeastern North America:

• through the development of regional reliability standards and compliance assessment and enforcement of continent- wide and regional reliability standards, coordination of system planning, desi gn and operations, and assessment of reliability; and • through the establishment of regiona lly-specific criteria, and monitoring and enforcement of compliance with such criteria.Regional Reliability Assessment

161 2008 Long-Term Reliability Assessment Geographically, the portion of NPCC within the United States includes the six New England states and the state of New York . The Canadian portion of NPCC in cludes the provinces of New Brunswick, Nova Scotia, Ontario and Québec. Approximately 45% of th e net energy for load generated in NPCC is within the United States , and approximately 55% of the NPCC net energy for load is generated within Canada. Approximat ely 70% of the total Ca nadian load is within the NPCC Region. Geographically, the surfac e area of NPCC covers about 1.2 million square miles, and it is populated by more than 55 million people.

General Membership in NPCC is voluntary and is open to any person or entity, including any entity participating in the Registered Ballot Body of NERC, that has an in terest in the reliable operation of the Northeastern North American bulk power system. Full Membership shall be available to entities which are General Members t hat also participate in electricity markets in the international, interconnected bulk power system in Northeastern North America. The Full Members of NPCC include independent syst em operators (ISO), regional transmission organizations (RTOs), Transcos and other organiza tions or entities that perform the Balancing Authority function operating in Northeastern North America. The current membership in NPCC totals fifty entities.

Among the Areas (subregions) of NPCC, Québec and the Maritimes are pr edominately winter peaking Areas; Ontario, New York and New England are summer peaking systems.Regional Reliability Assessment

162 2008 Long-Term Reliability Assessment RFC Highlights

The bulk power systems in the Reliability First (RFC) region are expected to perform well in meeting the forecast demand obligations over a wi de range of anticipated system conditions, as long as operating limits are respected, established procedures are followed and proposed projects are completed in a timely manner. Several major transmission line projects have been announced that are expected to enhance reliability of the transmission network in the eastern areas of RF C. These projects include the Trans-Allegheny Interstate Line (TrAIL), which is in the ce rtification process; the Potomac-Appalachian Transmission Highline (PATH); the 500 kV circ uit from Susquehanna to Lackawanna to Roseland; the Mid-Atlantic Power Pathway (M APP); and a new 345 kV circuit in southern Indiana. Also, the four Phase Angle Regulators (PARs) on the Michigan-Ontario interface are expected to be in-service and regulating by the summer of 2009.

To assess the resource adequacy of the regional area, RFC evaluates the adequacy of the capacity in each RTO to supply the demand in each RTO. The reserve margin targets of each RTO are weight-averaged together to de velop a reserve margin target for use in gauging the general adequacy for the RFC region. The amount of proposed resources ne eded through 2017, in addition to the planned resources, represents only 25.0% of the curr ently proposed projects in the PJM and MISO generator queues for the Reliability First regional area. The expectation is for adequate reserves for PJM, MISO and Reliability First throughout the ten year period of this Long Term Resource Assessment.

RFC - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

163 2008 Long-Term Reliability Assessment RFC - Projected On-Peak Capacity by Fuel-Mix

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

C o al G as
N uclear Oil

P

umped Stor ag

e H y dro W i nd O t herMW 2008

2017

RFC Capacity vs Demand - Summer

170 180 190 200 210 220 230 240 250

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity Resources

Note that demand data representing RFC’s prede cessors (portions of the MAIN, ECAR, and MAAC regions) was not considered as part of the analysis performed to obtain the load forecast bandwidths above.Regional Reliability Assessment

164 2008 Long-Term Reliability Assessment RFC-MISO - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

RFC-PJM - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessment

165 2008 Long-Term Reliability Assessment RFC Self-Assessment

Introduction Almost all Reliability First Corporation (RFC) members are a ffiliated with either the Midwest ISO (MISO) or PJM RTO (PJM) for operations a nd reliability coordination. Ohio Valley Electric Corporation (OVEC), a generation and transmissi on cooperative located in Indiana, Kentucky and Ohio is not affiliated with either RTO market; however OVEC’s Re liability Coordinator services are performed by PJM. Duquesne Light Co. has recently announced its intention to withdraw from PJM and join MISO in the third quart er of 2008. For this assessment, Duquesne Light continues to be incl uded within the PJM RTO.

Reliability First does not have officially-designated subregions; however, about one-third of the RFC load is within MISO and nearly all remain ing load is within PJM, except for about 100 MW of load within the OVEC Balancing Authority area. From the perspective of the RTOs, approximately 60% of the MISO load and 85% of the PJM load is within RFC. The PJM RTO spans into the SERC region, and the MISO RTO also spans into the MRO and SERC regions. The PJM RTO operates in total as one Balancing Authority area. MISO has recently received approval to begin operation as a si ngle Balancing Authority area; however operation as a BA is not expected to occur until the fall of 2008.

This assessment provides information on project ed resource adequacy across the Reliability First region. The RFC Resource Adequacy Standard BAL-502-RFC-01 requires Planned Reserve Sharing Groups (PRSGs) to identify the minimu m acceptable reserves to maintain resource adequacy for their respective areas of RFC. P JM operates as the PRSG for its members. The Midwest PRSG consists of a consortium of MI SO members that incl udes about 95% of the MISO load in the RFC regional area. Since nearly all Reliability First area demand is in either Midwest ISO or PJM, the reliability of these two RTOs will determine the reliability of the RFC region. This report assesses the resource adequ acy of each RTO based on the reserve margin requirements applicable to each RTO. PJM determ ines the reserve margin requirement for all demand within PJM. The Midwest PRSG and Mid-Continent Area Power Pool (MAPP) determine reserve requirements for most of th e demand in MISO. MISO uses a 12% default reserve requirement for demand not include d in the Midwest PRSG and MAPP. The combination of reserves from the Midwest PRSG, MAPP and the de fault reserve calculation was used by RFC as the MISO reserve margin ta rget for assessing resource adequacy.

Demand The analysis of the demand data for the long term assessment focuses on three factors, Total Internal Demand (TID), Net Internal Demand (NID) and Demand-Side Management (DSM). This analysis reviews the demand of the entire PJM RTO, Midwest ISO (M ISO), as well as the ReliabilityFirst regional area.

These demand forecasts are based on “50/50” or median weather (a 50% chance of the weather being warmer and a 50% chance of the weathe r being cooler). The PJM RTO prepares the demand forecast for the Load Serving Entities (LSEs) in its operational area. The Midwest ISO aggregates the reported demand forecasts from its Network Customers. The Reliability First demand forecast is aggregated from the OVEC de mand forecast and the market demand forecast in the Reliability First area of PJM and MISO. This is the Total Internal Demand (TID) forecastRegional Reliability Assessment

166 2008 Long-Term Reliability Assessment of the Reliability First region. This demand does not includ e any demand supplied “behind the meter” from customer generation or co-gener ation. Demand diversity is used to develop coincident demand forecasts for the respect ive PJM RTO, Midwest ISO and Reliability First areas. PJM, MISO and RFC have each developed the diversity factor (2%) for their respective

areas.

The Reliability First RTOs identify the various program s designed to reduce system demand during the peak periods as DS M. Individual companies may im plement DSM through a demand response program, a direct-controlled load program, an interruptible load contract or other contractual load reduction arrangement. Since DS M is a contractual management of system demand, the reserve margin requirement for the RT O includes the effects of DSM. NID is total internal demand (TID) less DSM. Reserve margin requirements are based on NID.

Demand-Side Management can be addressed in diffe rent ways, reflectiv e of its operational impact on peak demand and reserve margins. DSM offers the companies that have these programs a way to mitigate adverse conditions th at the individual companies may experience during periods of high demand. The total de mand reduction of each RTO is the maximum controlled demand mitigation that is expected to be available at the time of the peak system demand.

For this long term assessment, the Reliability First RTOs have identified the following types of DSM programs:

DIRECT-CONTROLLED LOAD MANAGEMENT There are a number of load management progr ams under the direct control of the system operators that allow interrupti on of demand (typically residen tial) by controlling specific appliances or equipment at the time of the system peak. Radio controlled hot water heaters or air conditioners would be included in this category. Direct controlled load management is typically used for “p eak shaving” by the system operators.

INTERRUPTIBLE DEMAND Industrial and commercial customer demands that can be contractually interrupted at the time of the system peak, either by direct cont rol of the system operator (remote tripping) or by the customer at the request of the syst em operator, are included in this category. The projected effects of existing and proposed new non-controlled Demand-Side Management (DSM) programs (such as conser vation and energy efficiency incentives) are factored into the TID forecasts provided to Reliability First

.

PJM RTO DEMAND DATA The estimated Net Internal Demand (NID) peak of the entire PJM RTO for the summer of 2008 is projected to be 133,500 MW. For the summer of 2017, NID is project ed to be 153,800 MW. The equivalent compound growth rate (ECGR) of the NID forecast is 1.6% from 2008 to 2017. This is the same as the ECGR of last year’s NID forecast. These values are based on the Total Internal Demand (TID) demand forecast prepared by PJM staff with the full use of the load management placed under PJM coordination. The fo recast is dated January 2008, and is based on economic data from late 2007.Regional Reliability Assessment

167 2008 Long-Term Reliability Assessment Load Management placed under PJM coordina tion is PJM’s program for Demand-Side Management (DSM). PJM identifies two types of DS M, Direct Control, and Interruptible. Direct control amounts to 400 MW with an additional 4,000 MW of Inte rruptible Demand. The analysis assumes the DSM remains constant in PJM throughout the assessment period.

The estimated Total Internal Demand (TID) of PJM RTO for the 2008 summer season is 137,900 MW and is forecast to increase to 158,200 MW by 2017. The ECGR of the 2008 TID forecast is 1.5%, which is slightly less than the 1.6% ECGR last year for 2007-2016.

MIDWEST ISO DEMAND DATA The estimated Net Internal Demand (NID) peak of the entire Midwest ISO Market for the summer of 2008 is projected to be 100,000 MW. For the summer of 2017, NID is projected to be 114,500 MW. The equivalent compound growth rate (ECGR) of the NID forecast is 1.5% from 2008 to 2017. This is slightly higher than the 1.4% ECGR of last year’s NID forecast. These values are based on the Total Internal Demand (TID) demand forecast developed for the MISO market. The forecast was developed early in 2 008 from independent member forecasts. Each MISO member used applicable economic data from late 2007 during the development of their demand forecast.

MISO identifies two types of DSM, Direct Control and Interruptible, in the demand forecast. Direct control amounts to 1,700 MW with an a dditional 3,100 MW of Interruptible Demand in 2008. MISO has forecast an initial decline in DSM after 2008 with slow incr ease back to a total DSM forecast of 4,800 MW in 2017.

The estimated Total Internal Demand (TID) of MISO for the 2008 su mmer season is 104,800 MW and is forecast to increase to 119,300 MW by 2017. The ECGR of the 2008 TID forecast is about the same as the 2007 ECGR of 1.4%.

RFC DEMAND DATA The region is expected to be summer peaki ng throughout the study period, therefore this assessment will focus its analysis on the summe r demand period. In this assessment, the data related to the RFC areas of PJM and MISO are combined with the data from the Ohio Valley Electric Corporation (OVEC) to develop the RF C regional data. The RF C demand forecast also accounts for the expected demand diversity among these entities. RFC uses the minimum diversity from the past 5 years which is 2.0%.

The estimated Net Internal Demand (NID) peak of the entire RFC region for the summer of 2008 is projected to be 177,200 MW. For the summer of 2017, NID is project ed to be 201,700 MW. The equivalent compound growth rate (ECGR) of the NID forecast is 1.5% from 2008 to 2017. This is slightly higher than the 1.4% ECGR of last year’s NID forecast.

The DSM reported by PJM and MISO amounts to 900 MW of Direct Control Load Management with an additional 5,900 MW of Interruptible Demand in 2008. This increases to a total DSM forecast of 6,900 MW in 2017.Regional Reliability Assessment

168 2008 Long-Term Reliability Assessment The TID for the summer of 2008 is projected to be 184,000 MW. For the summer of 2017, TID is projected to be 208,600 MW. The equivalent compound growth rate (ECGR) of the TID forecast is 1.4% from 2008 to 2017. This is the same as the 1.4% ECGR of last year’s TID forecast.

Generation The generating capacity in this assessment represents the rated capability of the generation in OVEC and in the PJM and MISO ma rket areas. For this assessmen t this capacity is categorized as “existing”, “planned”, or “proposed”. Customer generation or co-gener ation capacity is not included in this assessment when it only supplies power to local customer demand not included in the regional demand totals.

Existing capacity is either listed as “certain” or “uncertain”. Certain capacity is a capacity resource cleared in PJM’s Reliability Pricing Model (RPM) or a Designated Network Resource (DNR) in the MISO market. Uncertain resources are the existing generation that represents wind/variable resource de-ratings , generating capacity that has not been studied for delivery within the region, and capacity located within the region that is not part of PJM committed capacity or MISO DNR. Uncertain generation is not included when determining the reserve margins.

“Planned” capacity is future additions expected to go in-service in the respective years, and are used when determining the reserve margins. In this assessment, planned capacity is assumed to go in service as scheduled. “Pr oposed” capacity is less certain future capacity additions and only a portion of the total capacity is included when determining the expected reserve margins. Generation Interconnection queue s are the sources of data for the planned and proposed generating unit additions. The amount (percentage) of proposed capacity addi tions to be included in the reserve margins is 20% for PJM and 31% for MISO.

The recent emphasis on renewable resources is increasing the amount of wind power capacity being added to systems in the Reliability First Region. In this assessment, the amount of available wind power capability included in the reserve calcula tions is less than the nameplate rating of the wind resources. PJM uses a three year average of actual wind capability during the summer daily peak periods as the expected wind capability . When three years of operating data are not available for a specific wind project, that proj ect substitutes a default capability for the unavailable data. PJM has recently changed the default wind capability from 20% to 13% for new queue projects. In MISO, wind power provi ders may declare up to 20% of nameplate capability as DNR. The difference between the nameplate rating and the expected wind capability is not included in the reserve calc ulations. In this assessment, Reliability First used 20% of nameplate rating for both PJM and MISO as the on-peak capability for planned and proposed wind power projects.

Generally, scheduled maintenance is minimized during the peak demand periods. This assessment assumes no scheduled maintenance duri ng the summer periods. It is important to note that the capacity resources identified as “certain ” in this assessment have been pre-certified by either PJM or MISO as able to be used within their RTO market area. This means that these resources are considered to be fully deliverable within and recallable by th eir respective markets.Regional Reliability Assessment

169 2008 Long-Term Reliability Assessment The planned and proposed generati on additions included in the re serve margin calculations for both PJM and MISO are assumed in this assessment to satisfy their respective deliverability requirements. In both RTOs there may be additiona l resources identified as uncertain that may be available to serve load, yet are not included in calculating the e xpected reserve margins in this
assessment.

PJM GENERATION The entire PJM RTO has 165,500 MW of existing “certain” generation for the 2008 summer. There is also 1,800 MW of existing capacity that is categorized as “uncerta in” for the entire ten year assessment period. The increase in pla nned generation additions through 2017 is 4,400 MW. The amount of proposed increase in capability from the PJM generator interconnection queue is 49,500 MW. The confidence factor used by Reliability First to calculate the amount of proposed capacity to be included in the assessment of future reserve margins is 20% for PJM.

MISO GENERATION The Midwest ISO market has 115,300 MW of existing “certain” ge neration for the 2008 summer. There is also 6,600 MW of existing capacity that is categorized as “uncertain” for the entire ten year assessment period. The increase in planned generation additions through 2017 is 4,400 MW. The amount of proposed increase in capability from the MISO generator interconnection queue is 25,200 MW. The confidence f actor to be used to calculate the amount of proposed capacity to be included in the assessment of fu ture reserve margins is 31% for MISO.

RFC GENERATION The RFC data only includes generation physically located within the Reliability First Region, although generating capacity outside the regional area owned by member companies may be included with the scheduled power imports.

The amount of OVEC, PJM and MISO “certain” cap acity in RFC is 213,700 MW. There is also 3,100 MW of existing capacity that is categorized as “uncerta in” for the entire ten year assessment period. The increase in planned ge neration additions thr ough 2017 is 5,800 MW. The amount of proposed increase in cap ability in the RFC region from the PJM and MISO generator interconnection queue is 47,200 MW. The c onfidence factor us ed by Reliability First in this assessment is 20% for PJM and 31% for MISO. The amount of proposed capacity that will be included in the assessment of future reserve marg ins will be based on these confidence factor percentages. Within Reliability First there is about 1,700 MW of ex isting nameplate wind turbine capacity with 200 MW being included as on peak capacity for reserve requirements. There is also approximately 700 MW of existing biom ass type resources within the region.

Purchases and Sales PJM and MISO have assumed for this assessment that the expected purchases and sales across their RTO boundaries will be the same for all y ears. These net transac tions identified by PJM and MISO are considered firm transactions with firm transmission reservations and they will be included when determining the reserve margins in Reliability First . PJM and MISO only include firm transactions and less than 200 MW of th e total transactions in MISO use Liquidated Damage Contracts. There are no Liqu idated Damage Contracts in PJM.Regional Reliability Assessment

170 2008 Long-Term Reliability Assessment Some of the total interchange reported by PJM a nd MISO is due to join tly owned generation. These resources are located in one RTO but have owners in both RTOs with entitlements to the generation. Also, some of the interchange in PJM and MISO comes from OVEC entitlements. Since the jointly owned generation and the OVEC generation is all within RFC, the jointly owned and OVEC generation is included in RFC’ s generation and not the RFC net interchange. Therefore, the total net interchange for the RFC region is not a simple summation of the PJM and MISO RTO interchange.

PJM NET INTERCHANGE Transactions for the PJM RTO net to 1,500 MW of interchange out of the PJM RTO.

MISO NET INTERCHANGE MISO has reported net interchange transacti ons (purchases) of 6,300 MW into the MISO market.

RFC NET INTERCHANGE The net interchange transactions for OVEC, MISO and PJM at the time of the peak that cross the RFC regional boundary are projected to balance. For ecasts of future interchange transactions are very speculative, since they rely on generation resources that are in other regions. While the Reliability First believes significant power could be impor ted into the region when necessary, no import has been included in determining the future reserve margins.

Fuel The fuel mix of generating units in the Reliability First region in 2008 is 15% nuclear, 3% hydro and pumped storage hydro, 47% coal, 8% oil, 26 % gas, and 1% wind and other. Many factors can adversely impact fuel supply and delivery, and, therefore, adversely impact available generating capacity. However, these factors are us ually the result of a local accident (train derailment), some naturally occurring event (heat wave or drought) or natural disaster (hurricane).

Recent events, such as the 2005 Gulf coast hurri canes and the Powder River Basin railroad derailment and subsequent repair and maintenanc e activities, provide eviden ce that today the gas supply and coal delivery networks are near th eir current limits. However, since these have typically been short term problems, Reliability First does not expect a fuel problem to affect the long term assessment.

Transmission Plans within Reliability First for the next six years include the addition of over 1,600 miles of high voltage transmission lines that will operate at 100 kV and above, as well as numerous new substations and transformers that are expected to enhance and strengthen the bulk transmission system. Most of the new additions are connections to new generato rs or substations serving load centers. MISO and PJM have identified many new projects as part of the Midwest ISO Expansion Plan (MTEP) and th e PJM Regional Transmission E xpansion Plan (RTEP). MISO projects can be referenced at http://www.midwestmarket.org/page/Expansion%20Planning

.Regional Reliability Assessment

171 2008 Long-Term Reliability Assessment Furthermore, there are several “backbone” tran smission projects that are planned within Reliability First . PJM’s RTEP has identified four ma jor “backbone” projects, one from the 2006 RTEP and three additional ones from the P JM Board-approved 2007 RTEP. Additional PJM RTEP project information can be referenced at http://www.pjm.com/pla nning/reg-trans-expplan.html.

The Trans-Allegheny Interstate Line (TrAIL) project (see http://www.aptrailinfo.com/index.php ) from the 2006 RTEP is a new 210-mile, 500 kV RF C-SERC interconnection and is scheduled for operation in 2011. This project consists of a ne w 500 kV circuit from 502 Junction to Mt. Storm to Meadow Brook to Loudon. This project will relieve anticipated overloads and voltage problems in the Washington, DC area, including anticipated overloads expected in 2011 on the existing 500 kV network. The four-year period before the existing facilities become overloaded presents a very challenging timeframe for the de velopment, licensing, and construction of this project.

The three other PJM “backbone” projects from the 2007 RTEP are planned. One is the 130-mile, 500 kV circuit from Susquehanna to Lackawanna to Roseland will tie into the existing 500 kV network where multiple 230 and 115 kV circuits are tightly networked. This circuit then will continue to Roseland. Also, 500/230 kV transfor mers are proposed at Lackawana and Roseland substations. This circuit and transformer addi tions will create a strong link from generation sources in northeastern and north-central Pennsylvania into New Jersey. These facilities are expected to be in-service by June 2012.

The Potomac-Appalachian Transmission Highline (PATH) 171 is the second “backbone” project, and consists of a 244-mile Amos to Bedingt on 765 kV line and a 92-mile, twin-circuit 500 kV line from Bedington to Kemptown. This projec t will bring a strong source into the Kemptown, MD area by reducing the west-to-east power flow on the existing PJM 500 kV transmission paths and provide significant benefits to the cons trained area of Washington DC and Baltimore. These facilities are expected to be in-service in 2012.

The third “backbone” project is the Mid-Atlantic Power Pathway (MAPP), which consists of a new 190-mile 500 kV line beginning at Possum Po int, VA and terminating at Salem, NJ. See http://www.powerpathway.com/overview.html for more information.

In each of these four projects (TrAIL, Susquehanna to Roseland, PATH, and MAPP) PJM and its TO’s are working in concert with local and stat e authorities to ensure project schedules are maintained. In the event that any one of these projects is delaye d, short-term operating procedures will be used to mitig ate any problems. However, in the longer term, the most reliable solution is the construction of the project.

Currently, the only approved major project with in the RFC area of the Midwest ISO is the Vectren 345 kV line from Gibson (Duke) – AB Br own (Vectren) – Reid (BREC). This line is expected to be in-service in 2011.

171 http://www.pathtransmission.com/overview/default.aspRegional Reliability Assessment

172 2008 Long-Term Reliability Assessment Additionally, AEP and Duke have recently announ ced a joint venture, Pioneer Transmission LLC, to build 240 miles of 765 kV transmission lin e and related facilities in Indiana from the Rockport to Greentown stations. The project will be submitted later this year to both MISO and PJM for consideration in their MTEP and RTEP expansion plans, resp ectively. The earliest possible in-service date could be 2014 or 2015, depending upon all of the necessary approval processes. See http://www.nrel.gov/wind/system sintegration/news/2008/628.html for more information.

Phase Angle Regulators (PARs) are located on all major ties between northeastern PJM and southeastern New York to help control unscheduled power flows. The Ramapo PARs in NPCC control flow from RFC to NPCC. The Michigan -Ontario PARs have not yet achieved long-term operation of all four units. The B3N PAR in Michig an that previously failed will still be out-ofservice until the summer of 2010, and the remaining three PARs ar e expected to control flows (i.e. will be regulating). An operations agreement for controlling the interface has been completed. In this assessment, all four of the PARs on the Michigan-Ontario border are regulating and the base flows in Pennsylvania have changed compared to the summer of 2008. Transmission Planners will need to address this accordingly.

Historically, Reliability First (including the heritage regions) has experienced widely varying power flows due to transactions and prevailing weather conditions across the regi on. As a result, the transmission system could become constr ained during peak periods because of unit unavailability and unplanned transmission outages concurrent with larg e power transactions. Generation re-dispatch has the potential to mitigat e these potential constraints. Notwithstanding the benefits of this re-dispatc h, should transmission constraint conditions occur, local operating procedures as well as the NERC transmission load ing relief (TLR) procedure may be required to maintain adequate transmission system reliability.

Certain critical flow-gates that have experien ced TLRs in previous su mmers continue to be identified as heavily loaded in various re liability assessments and may require operator intervention to ensure reliability is maintained.

The transmission system is expected to perfor m well over a wide range of operating conditions, provided that new facilities go in to service as scheduled, and th at transmission operators take appropriate action, as needed, to control power flows, reactive reserves and voltages. Both MISO and PJM perform comprehensive generator and load deliverability studies.

Reliability Assessment Analysis The Reliability First Long Term assessment uses the reserv e margin targets determined for the PJM and MISO areas to assess the expected ade quacy of generation resour ces over the next ten years. Analyses were conducted by PJM and the Midwest PRSG around the end of 2007 and early in 2008 to determine the reserve margin s that were equivalent to the Reliability First Loss of Load Expectation (LOLE) crite rion of not exceedi ng one occurrence in ten years on an annual basis. These analyses include demand forecast uncertainty, outage schedules, and other relevant factors when determining the probability of fo rced outages exceeding the available margin for contingencies. Reliability First ’s assessment of long term PJM re source adequacy is based on the reserve margin target determined from the P JM Reliability Pricing Model (RPM) analysis for planning year 2008-2009. This reserve margin ta rget is 15.0% through 2012 and 15.5% for laterRegional Reliability Assessment

173 2008 Long-Term Reliability Assessment years. To assess long term MISO resource adequ acy, RFC calculated a combined reserve margin target for the 2008-2009 planning year of 14.1%. Th is reserve margin was based on the reserve requirement for demand in the Midwest PRSG, th e remaining MRO area of MISO that uses the MAPP reserve requirement, and the small amount of other MISO demand that uses the MISO default reserve requirement.

This assessment evaluates the adequacy of the capacity in the each RTO and the region to supply the demand in each RTO and the region, respectively. The reserve margin targets of each RTO were weight-averaged together to develop a reserve margin targetto use to gauge the general adequacy for the RFC region. This combined reserv e margin target for th e RFC region is 14.7%. Although Reliability First determines seasonal resource adequ acy from the assessments of the two RTOs, in the long term assessment there is more variation and uncertainty in future resources. Therefore, Reliability First uses this reserve margin target to review the reserve margin forecast of the regional area for the assessment pe riod against a combined reserve margin target for each year in the analysis period, in addition to the review of the RTO reserve margins and reserve margin targets.

As previously mentioned in the Generation sec tion, uncertain resources are not included in the calculation of expected reserve margins. Energy-only, existing wind deratings and any transmission limited resources are considered uncer tain in this analysis, and therefore is not included. Future planned capacity changes that are factored into the expected reserves include rating changes of existing generation, new genera tion, and known planned retirements of existing generation.

Deliverability of capacity between the RTOs is not addressed in this report. However, each of the LOLE studies conducted to determine the target reserve margins used in this assessment has assumed limited or no transfer capability between these RTOs. By limiting the transfers between PJM and MISO in this assessment, the re serve margin target for the Reliability First region will be somewhat more conservative than a target determine by including the full inter-RTO transfer capability.

Reliability First has not performed any sensitivity anal yses for high resource unavailability or high demand due to weather conditions. Any condition that increases regional demand or generation resource unavailability beyond the forecas t conditions in the assessment analysis will decrease overall resource reli ability. However, over the ten year assessment period, extreme weather, fuel interruptions, and droughts are consid ered to be short term conditions that are not included when determining long term reliability targets. Over time, any adverse trends in forced outage rates will be factored into the analyses required by the Reliability First Planned Resource Adequacy Standard, and the reserve margin targets will reflect the need for higher reserves. Operational measures that would be expected to be deployed to mitigate adverse conditions during this assessment period are the same as those discussed on page 94 of the Reliability First section of NERC’s “ 2008 Summer Reliability Assessment ”.

PJM RESERVE MARGINS The reserve margin for existi ng capacity resources is 30,500 MW in PJM for 2008, which is 22.8% based on NID. With an additional 4,256 MW of planned new capacity, the reserveRegional Reliability Assessment

174 2008 Long-Term Reliability Assessment margins are expected to meet the 15.0% reserve margin target through 2013. The target increases to 15.5% after that time. Additi onal resources will be needed beyond 2013. The amount of proposed resources needed in this assessment starts at 1,600 MW in 2013 and increases to about 9,100 MW by 2017. This is 18.4% of the 49,500 MW of resources in the PJM generator interconnection que ue that was categorized as proposed resources.

It should be noted that P JM has assumed a constant 1,500 MW export over the assessment period. If there were no net interchange for th e RTO, there would only be a need for 7,600 MW of additional proposed resources.

MISO RESERVE MARGINS The reserve margin for existing capacity reso urces is 21,500 MW in MISO for 2008, which is 21.5% based on NID. With an additional 4,400 MW of planned new capacity, the reserve margins are expected to meet the 14.1% target through 2014. Additional resources will be needed beyond 2015. The amount of proposed resources needed in this as sessment starts at 1,300 MW in 2015 and increases to about 4,600 MW by 2017. This is about 18.0% percent of the proposed resources in the MISO ge nerator interconnection queue.

It should be noted that MISO has assumed a constant 6,300 MW import over the assessment period. If there were no net interchange for the RTO, there would a need for 10,900 MW of additional proposed resources by 2017.

RFC RESERVE MARGINS The reserve margin for existing capacity resources is 36,600 MW in Reliability First for 2008, which is 20.6% based on NID. With an addi tional 5,700 MW of planned new capacity located within the region, the reserve margins are ex pected to meet the 14.7% target through 2012. Additional resources will be needed beyond 2012. In 2013, there will be a need for less than 300 MW of proposed resources. The amount of proposed resources will increase to about 11,800 MW by 2017. This represents 25.0% of the combined PJM and MISO proposed generator resources in the Reliability First area.

Both MISO and PJM conduct comprehensive detaile d generator load deliv erability studies. MISO deliverability ( http://www.midwestmarket.org/pa ge/Generator+Interconnection ) test results can be found under Gene rator Deliverability Tests. For more information on PJM deliverability ( http://www.pjm.com/contributions/pjm-manuals/pdf/m14b.pdf ), see Appendix E of the PJM Manual 14b. Results of the PJM analysis are evaluate d continuously as part of the normal PJM planning process and presented as part of the Transmission Expansion Advisory Committee (TEAC) meetings. See http://www.pjm.com/committees/teac/teac.html for more details. Neither MISO nor PJM have any deliv erability concerns for this assessment period.

PJM performs voltage stability analysis (includi ng voltage drop) as part of all planning studies and also as part of a periodic (every five minutes) analysis pe rformed by the energy management system (EMS). Results are translated into th ermal interface limits for operators to monitor. Transient stability studies are performed as ne eded and are part of the Regional Transmission Expansion Plan (RTEP) analysis (see http://www.pjm.com/planning/rtep-baseline-Regional Reliability Assessment

175 2008 Long-Term Reliability Assessment reports/baseline-report.html ). Small signal analysis is performe d as part of long- term studies, but not for seasonal assessments. MISO also performs transient stability analysis.

The Cleveland area was shown to be a reactive power-constrained area from the 2003 blackout. However, several actions have been taken to mitigate any future reactive resource problems associated with this area. These include the installation of capacitor banks and an automatic under voltage load shed (UVLS) scheme (as me ntioned below) and enhanced monitoring of dynamic reactive resources and system conditions in that area. FirstEnergy has reactive reserve criteria for this area.

There are two automatic under voltage load shed (UVLS) schemes w ithin RFC. One is located in the northern Ohio/western Pennsylva nia area and the other is in th e northern Illinois area. These schemes have the capability to automatically shed a combined total of about 2,300 MW and provide an effective method to prevent uncontro lled loss-of-load following extreme outages in those areas. There are currently no new pl ans to install UVLS within the RFC region.

Reliability First does not specifically study catastrophic ev ents and is not aw are of any specific studies. However, registered entities such as Transmission Planners may conduct their own extreme analyses. Reliability First does plan to conduct some NERC Category D contingency analysis as part of the long-term tran smission assessment study later this year.

Areas within Reliability First are currently not experi encing drought conditions.

All Transmission Planners within Reliability First conduct studies, as required in the NERC TPL Standards. Reliability First also conducts regional studies that include NERC Category A, B, and C contingencies. Results of these studies are us ed in the regional assessment reports. Extensive contingency analysis is performed by PJM as part of the RTEP analysis, which includes transient stability analysis. De tails can be found at http://www.pjm.com/committees/teac/teac.html

. MISO also performs contingency analys is as part of their MTEP studies.

Reliability First is not currently aw are of any new technologies that will be deployed within the region to improve bulk-power system reliability.

Reliability First does not maintain a Regional short-circui t database, which would be required to accurately assess the short-circuit levels with in RFC. As a result, RFC does not conduct a specific assessment of short-circu it levels, does not have a mechanism to assist RFC members in maintaining short-circuit equivalents outside th eir own system, and does not have a strategy to address short circuit levels with respect to either installed eq uipment capabilities or the limits of existing technology. Each Transmission Owner a nd Planner obtains suitable short-circuit equivalents from neighboring Tr ansmission Owners to assess their own system and to develop and implement any necessary mitigation strategi es. In addition, short circuit analysis is performed as part of the PJM RTEP analysis.

No significant trends within Reliability First have been noted that would suggest that aging infrastructure is becoming an issue.Regional Reliability Assessment

176 2008 Long-Term Reliability Assessment Reliability First does not have any guidelines nor is awar e of any program to share inventory of spare equipment. The legacy Regions had previ ously participated in pr oviding information to the NERC spare transformer database.

Other Region-Specific Issues

In December 2007, the Maryland Public Service Commission (PSC) issued a first in a series of Interim Reports regarding the state of the elec tricity markets in Mary land. As directed in Maryland Senate Bill 400, the report offers the PSC’s recommendations and analysis regarding options for “re-regulating” Mary land’s electricity markets and for obtaining new generation and transmission resources in the state. The premise for the analysis is the PSC’s view that “unless steps are taken now, the State of Maryland may f ace a critical shortage of in-state electricity capacity that could force mandatory use restri ctions, such as rolling black-outs, by 2011 or 2012”.

The options considered in the PSC’s analysis include full re-regula tion, mandatory utilitydirected long-term contracts, establishing a State Power Authority, reinstitution of integrated resource planning and aggressive efforts to shape PJM’s wholesale markets. The PSC recommended a series of interventions designed to (begin to) address Maryland’s perceived reliability problem that could include forcing an increase in the available supply of electricity and requiring utilities to implement aggressi ve and cost-effective demand management and energy conservations programs For more information, see the Maryland PSC web site at http://www.psc.state.md.us/psc/Rep orts/2007SupplyAdequacyReport_01172007.pdf

One method that addresses the aging workforce issue is FirstEnergy's Power Systems Institute (PSI), which has teamed with several local comm unity colleges and universities to offerAssociate Degree programs that lead to careers in skilled technical fields. These unique, twoyear programs combine classroom learning with the hands-on trai ning needed to open the door to opportunities as line, subs tation, plant or nuclear workers in the electric utility industry. For information, see http://www.firstenergycorp.com/career_ center/technical_training/index.html.

Reliability First has no additional reliability concerns for this long-term assessment.

Region Description ReliabilityFirst currently consists of 44 Regular Members, 23 A ssociate Members, and 4 Adjunct Members operating within 12 NERC balancing aut horities, which includes over 360 owners, users, and operators of the bulk- power system. They serve the elec trical requirements of more than 72 million people in a 240,000 square mile area covering all of the states of Delaware, Indiana, Maryland, Ohio, Pennsylvania, New Jersey, and West Virginia, pl us the District of Columbia; and portions of Illinois, Kentucky, Michigan, Tennessee, Virginia, and Wisconsin. The ReliabilityFirst area demand is primarily su mmer peaking. Additional details are available on the ReliabilityFirst website ( http://www.rfirst.org ).Regional Reliability Assessments

177 2008 Long-Term Reliability Assessment SERC Highlights

SERC members project that res ources in the region will be adequate to meet demand over the forecast period provided there is regulatory support on a state and loca l level for the development of needed generation. Although the SERC region does not implement a regional reserve requirement, SERC members adhere to their respective state commissions’ regu lations or internal business practices as they plan fo r or procure resources.

Significant generation developmen t has occurred in the SERC region during the past few years, resulting in thousands of MW of non-committed generating capacity being installed w ithout a specific allocati on to load. Some of this generation can be made available as short- term, non-firm or potential future resources to SERC members and others if deliverability is en sured. Some of this generation went unreported under the new NERC definitions used for capacity an alysis in this LTRA. This reporting issue is expected to be remedied in future reports. It is estimated that some 28,000 MW went unreported. In this LTRA SERC has reported the details of its Annual Generation Development Survey, which is independent of the NERC effort, in or der to present a more complete picture of potential resources.

SERC members participate in numerous transm ission assessment processes. The individual transmission owners within SERC conduct assessm ent studies to ensure compliance of their individual system which are subsequently subj ect to audits and assessments by SERC. Some subregions (like VACAR) conduct assessment st udies of the entire subregion to ensure simultaneous compliance of the systems within the subregion. Furthe r, SERC has study groups that conduct assessment studies of the entire region to ensure si multaneous compliance of all the systems within the region.

In preparation for summer 2008 SERC memb ers conducted a special drought assessment considering a hydrological scenario more seve re than the forecast 2008 summer conditions. The study projects that there will be no major reliabili ty issues under the severe case tested in the study. At the present time, (Fall 2008) conditions are improving in many (but not all) of the drought-affected areas. The study also provided valuable e xperience for managing drought situations as they arise in the future.Regional Reliability Assessments

178 2008 Long-Term Reliability Assessment SERC - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

SERC - Projected On-Peak Capacity by Fuel-Mix

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

Coa l G a s
N u c le

a

r Dual Fu e l Hydro

P

umped S

t o

rage Oil

U

n d

e te

rmine d/U n k

now n OtherMW 2008

2017Regional Reliability Assessments

179 2008 Long-Term Reliability Assessment SERC Capacity vs Demand - Summer

90 110 130 150 170 190 210 230 250 270 290 310 330

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity Resources

Central - Summer Capaci ty Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

180 2008 Long-Term Reliability Assessment Delta - Summer Capacity Margin Comparison

-15% -10%

-5% 0% 5% 10% 15% 20% 25% 30% 35%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

Gateway - Summer Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30% 35%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

181 2008 Long-Term Reliability Assessment Southeastern - Summer Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

VACAR - Summer Capaci ty Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

182 2008 Long-Term Reliability Assessment SERC Self-Assessment

Introduction The SERC Reliability Corporatio n (SERC) is the Regional Reliability Organization (RRO) for all or portions of 16 ce ntral and southeastern states. SERC is divided into five sub-regions: Central, Delta, Gateway, Southeastern, and VACAR, that together supply power to approximately 23% of the electric customers in th e United States. Most electric utilities within SERC have traditional vertically integrated co rporate structures with planning philosophies based on an obligation to serve ensuring that designated generation operates under optimal economic dispatch to serve local area customers. A few SERC members, however, have selected or been ordered to adopt a non-traditional ope rating structure whereby management of the transmission system operation is provided by a th ird party under an Inde pendent Coordinator of Transmission or a Regional Transmission Organi zation that manages transmission flows to customers over a broader regiona l area through congestion-based locational marginal pricing. Companies within SERC are closely interconn ected and the region has operated with high reliability for many years.

It should be noted that the ge neration capacity figures provided here are based generally on the data submitted for the current EIA 411 report. In addition to the collection of data from members in accordance with NERC’s prescribed definitions, SERC collects generation data for the forecast period from its members. This data focuses on generation which is constructed, but not necessarily dedicated or comm itted to serving load. Such ge neration performs a merchant function, operating when it is economic to do so. Even though a significant amount of merchant generation has been developed within SERC in recent years, not all of that generation is reflected in the capacity margins is presented here. It is estimated that there is presently nearly 28,000 MW of such generation in the SE RC region that is in addition to what is reported in the EIA 411 report.

Capacity resources in the region as a whole are e xpected to be adequate to reliably supply the forecast firm peak demand and energy requirements throughout the long-term assessment period. Reported potential capacity additions and existing capacity, including uncommitted resources, along with the necessary transm ission system upgrades, could sa tisfy capacity margin needs through 2017. The outcomes in terms of resource adequacy is highly dependent on regulatory support for generation expansion pl ans, new state local and fede ral environmental regulations impacting operation of existing generating resour ces, state and local environmental and siting process regulations that influence the de velopment of new generating resources.

The SERC region has extensive transmission inte rconnections between its sub-regions and its neighboring regions (FRCC, MRO, RFC, and SPP). These interconnections allow the exchange of firm and non-firm power and allow systems to assist one another in the event of an
emergency.

Transmission capacity is expected to be adequate to supply firm customer demand and firm transmission reservations. Like capacity and resource adequacy, the outcomes in terms of adequacy of transmission capacity are depe ndent on regulatory support for transmissionRegional Reliability Assessments

183 2008 Long-Term Reliability Assessment expansion plans. SERC members invested approximately $1.262 billion in transmission system upgrades 100 kV and above in 2007, plan to i nvest approximately $1.631 billion in 2008 and are planning transmission capital expenditures of more than $8.66 billion over the next five years. Planned transmission additions over the next te n years include 1,644 mile s of 230-kV lines, 338 miles of 345-kV lines, and 447 miles of 500-kV lines.

Demand The 2008 summer net internal demand forecast is 198,522 MW and the forecast for 2017 is 236,070 MW. The average annual growth rate over the next ten years is 1.94%. This is the same as last year’s forecast grow th rate of 1.94%. The historical growth rate of actual peaks has averaged 2.45% over the last 8 years.

All reported demands are non-coincident. These fo recasts are based on average historical peak period weather conditions. There were no si gnificant changes in weather or economic assumptions since last year’s forecast.

The SERC region has significant demand response programs. These programs allow demand to be reduced or curtailed when needed to maintain reliability. The amount of interruptible demand and load management is expected to increase slightly over the forecast period from 6,269 MW in 2008 to 6,986 MW in 2017. These amounts are higher than last year’s projections due, in part, to the addition of new members. Also, a ch ange in reporting philo sophy regarding demand response programs within certain companies resulted in the additi onal increase in interruptible demand and demand-side management. However, an offsetting adjustment was made to the demand reported, resulting in no net change. In addition to the reported interruptible demand and load management, there are significant othe r demand-side management programs that are also available to maintain reliability in the region.

Temperatures that are higher or lower than norma l and the degree to which interruptible demand and demand-side management is used can result in actual peak demands th at vary considerably from the reported forecast peak demand. Alt hough SERC does not perform extreme weather or load sensitivity analyses at the region level to acc ount for this, SERC members address these issues in a number of ways, c onsidering all NERC, SERC, regulat ory, and other requirements. These member methods must be documen ted and are subject to audit by SERC.

While member methods vary to account for diff erences in system char acteristics, the methods share many common considerations including:

• Use of econometric linear regression models; • Relationship of historical annual peak de mands to key variable s such as weather, economic conditions, and demographics; • Variance of forecasts due to such consider ations as high and low economic scenarios and mild and severe weather; and • Development of a suite of forecasts to account for the variables mentioned above, and associated studies utilizing these forecasts.Regional Reliability Assessments

184 2008 Long-Term Reliability Assessment In addition, many SERC members use sophisticat ed, industry accepted methods to evaluate load sensitivities in the develo pment of load forecasts.

Regarding the influence of extreme weather, the 90 th percentile peak temperature relates to an estimated extreme weather peak of about 6% highe r than the regular forecast for the region. An extreme peak for 2008 summer equates to 210,433 MW of firm peak demand for the region. The capacity margin for this scenario is estimated to be 10.6%, which, although reduced from the expected margin under normal forecast conditions, remains at an adequate level for the extreme case condition. This analysis assumes the load response to temperatures in this extreme range is linear. However, there is insufficient historical evidence to support this, since at some point load saturation occurs as temperatures rise into ex treme levels. Therefore the capacity margin is likely to be higher even under th is extreme case. Since capac ity margins for SERC are fairly constant for the 10-year period, th is 2007 summer example can be us ed to conclude that extreme weather is not expected to reduce resource adequ acy to critical levels. The SERC region as a whole is not expected to have any difficulty serving customers in a 90/10 outcome relative to the ten year load forecast.

Generation SERC believes that capacity resour ces will be sufficient to provide adequate and reliable service for forecast demands throughout the long-term asse ssment period. Reported potential capacity additions and existing capacity, including uncommitted resources, along with the necessary transmission system upgrades, could satisfy capacity margin through 2017. As can be seen in Figure 2, the range of outcomes is quite wide, pa rticularly for the out years. The outcomes in terms of resource adequacy are highly dependent on regulatory s upport for generation expansion plans, new state local and fede ral environmental regulations im pacting operation of existing generating resources, state and local environmental and siting process regulations that influence the development of new generating resources.

The changes in definitions established by the NERC Planning Committee have resulted in a significant change in both th e reported generation for the 2008 LTRA and the generation included in the capacity margin calculation. SERC is presenting both the NERC and SERC results in this report.

SERC has had significant merchant generation development which is not included in the NERC margin calculation. SERC member responses to the annual SERC Reliability Review Subcommittee’s (RRS) Generation Plant Developmen t Survey indicate n early 28,000 MW of uncontracted merchant generation is connected to the member systems. This merchant generation has not been contracted to serve load within SERC and its deliverability is not assured. For these reasons, only merchant generation expected to serve SERC load is included in the capacity margins reported for SERC. A significant amount of merchant capacity within the region has been participating in the short-term energy mark ets, indicating that a po rtion of these resources are deliverable during certain system conditions . SERC’s Generation Plant Development Survey is a summer capacity survey and does not distinguish winter ratings. If a load serving entity has a contractual arrangement with a merchant pl ant and has reported the arrangement through the EIA-411 reporting process, then th is capacity is included in this capacity margin assessment. Because significant capacity exists in the region, there will continue to be additional generationRegional Reliability Assessments

185 2008 Long-Term Reliability Assessment above that which is reported in the capacity ma rgin trend. NERC’s capacity margin calculations also assume the use of load management and in terruptible contracts at the time of the annual peak.

Although the SERC region does not implement a regional planning reserve requirement, members adhere to their respective state commissi ons’ regulations or inte rnal business practices as they plan for adequate generation re sources. SERC members use various methods 172 to ensure adequate resources are available and deliverable to the load.

Resources are expected to be adequate even if resource unavailability is higher than expected since SERC entities recognize that planning for vari ability in resource availability is necessary. Many SERC members manage this variability through reserve margins, demand side management programs, fuel inventories, dive rsified fuel mix and sources, and transfer capabilities. Some SERC member s participate in Reserve Sharing Groups (RSG). In addition, emergency energy contracts are us ed within the region and with neighboring systems to enhance recovery from unplanned outages.

The projected 2008 capacity mix reported for SERC is approximately 37% coal, 15.2% nuclear, 9.4% hydro/pumped storage, 33% gas and/or oil, and 5.4% for purchases and miscellaneous other capacity. The mix has not changed significantly from last year. Generation with coal and nuclear fuels continues to lead the region’ s fuel mix, accounting for roughly 52.2% of net operable capacity in 2008.

The majority of planned capacity additions, as reported by member systems in the EIA-411 filings, is comprised of gas/oil fueled combusti on turbine or combined cycle units. However, there are recent announced addition s and plans in the ten-year planning horizon for coal-fired and nuclear plant additions.

Some examples are:

Potential Additions:

• Central Sub-region: 750 MW coal ad dition in 2010; 1,182 nuclear in 2012

• Delta Sub-region: Up to 3,102 of nuclear additions in 2015

• Gateway Sub-region: 1,650 MW merchant coal plant in 2011-2012; 1,650 MW nuclear addition in 2017

• Southeastern Sub-region: 1,200 MW mercha nt coal plant in 2012; 1,100 MW nuclear addition in 2016; 1,100 MW nuclear addition in 2017

• VACAR Sub-region: 620 MW coal addition in 2008-09, 800 MW coal addition in 2012, 605 MW coal addition in 2012-13, 1,100 MW nuclear addition in 2016

Of the approximately 7,657 MW of planned re source additions reported for the 2008-2017 time period, 7.94% are combined cycle, 26.71% are combustion turbine, 30.66% are steam (including nuclear), 26.41% are net purchases, .43% are hydro, 7.84% are pumped storage and .01% are

172 Members have a variety of approaches to determining resour ce adequacy. These range from LOLE/LOLP on a company basis to target margin criteria. Some state jurisdictions in SERC ha ve implemented spec ific requirements for some of SERC’s members. SERC is in the process of revi ewing the methods used by its members.Regional Reliability Assessments

186 2008 Long-Term Reliability Assessment categorized as “Other/Unknown”. The “Other/Unknown” category includes potential additions that do not have finalized implementation plans. It appears that entities are continuing to increase plans for future coal or nuclear base load generation instead ofrelying on natural gasfired generation or purchases.

Generation Development in SERC Generation facilities need to be planned and cons tructed to ensure that aggregate generation capacity keeps pace with the electric demand. Generation re serve capacity must remain sufficient to mitigate postulated grid contingenc y scenarios. A growing number of independent power generating units are interconnecting to the gr id and selling their product into the electricity market. While mechanisms exist at state and federal agencies to collect data about the interconnection of new facilities, it is often difficult to accurately capture all of the generation facilities in their various phases of development. The ability to rapidly install peaking capacity resources and a general trend toward seasonal and short-term capacity purchases further complicate data collection as many utilities are delaying firm purchase commitments as long as possible. There are, however, generating plants under development and uncommitted generating facilities already in service in SERC that have the potential to provide significant resources for certain individual members. The single best source of in formation regarding generation development in the SERC region remains the annual Generation Plant Development Survey.

To better understand the role that new generation facilities may play in serving the demand requirements of the SERC region, the SERC Engi neering Committee authorized the SERC RRS in 1999 to conduct its first Genera tion Plant Development Survey. The tenth such survey was conducted in February 2008. The survey was direct ed to the transmission owners or providers within SERC. It was expected that these entities would be the best source of information for this survey because generation plant developers must coordinate with transmission owners or providers in accordance with FERC requirement s prior to interconnecting to the transmission network.

Survey respondents were asked to report all generation de velopment connected to the transmission systems within SERC, whether un committed or dedicated to serve native load. Projects were reported according to their stag e of development as measured by the level of Interconnection Service requested and whether the generation will be designated as a network or native load resource (if known). The level of Interconnection Service is measured by two categories:
1) Interconnection Service that has been re quested through the OASIS process, or 2) Interconnection Service Agreements that have been signed or unexecuted agreements that have been filed at FERC.Regional Reliability Assessments

187 2008 Long-Term Reliability Assessment The 2008 survey focused not only on the growth of the generation resour ces within the region, but also provides a more accurate representation of future generation resources that considers retirements, total uncommitted resources, and inoperable uncommitted resources. A summary of the 2008 Generation Plant Development Survey results is provided in Table 1.

Table 1: Current Status of Generation Plant Development

Current Status of Generation Plant

Development In-Service Year of Added Generation (MW)

CATEGORY 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 10 Yr Total 1) Interconnection Service Requested, Only 65 2766 4945 10059 3336 5159 663 3248 2735 3169 36144

> Designated as Network Resource or has obtained Firm PTP Transmission service 33 2289 1851 3424 747 2788 663 3132 2735 1403 19065

> Uncommitted 32 477 3094 6635 2589 2371 0 116 0 1766 17079 2) Interconnection Agreement Signed/Filed 2327 2236 3597 3334 1807 207 110 500 864 250 15231

> Designated as Network Resource or has obtained Firm PTP Transmission service 2156 2078 1691 869 1192 116 110 500 864 250 9825

> Uncommitted 171 158 1906 2465 615 91 0 0 0 0 5406 3) Unit Retirements 78 0 114 75 198 276 235 486 133 133 1728 Net Projected Additions (1) + (2) – (3) 2314 5002 8428 13318 4945 5090 539 3262 3466 3286 49647

*Source — SERC Reliability Review Subcommittee 2008 report to the SERC Engineering Committee The survey indicates an additi onal 2,392 MW of generation plant ca pacity is expected in the SERC region for the 2008 summer, with 78 MW of retirements scheduled, resulting in net potential additions of 2,314 MW. The vast ma jority of additions had signed or filed interconnection agreements at the time of the survey. In the near-term planning horizon (2008- 2013) there is significant specu lation about the amount of gene ration that will be added (approximately 39,800 MW, of which over 26,300 MW falls in category 1), and its impact on the capacity margin for the regi on. Also, a significant number of wind generators (over 3,900 MW) have requested interconnectio n service in the Gateway sub-region in this time period. The trend from last year’s survey to this year’s in dicates that there is more uncertainty regarding near-term generation resources, since near-term Category 1 additions outnumber those in Category 2, but the amount reported to be construc ted will likely change before the next annual
survey.

Category 2 additions are signifi cantly smaller in the longer-te rm (2008-2017). However, the more speculative Category 1 additions are higher throughout the 10-year period. This pattern is not unexpected since plans for the longer-term c ontinue to undergo review and revisions. The 39,800 MW of generation development reported in the first six years of this year’s survey is significantly higher than the 28,100 MW reported in last year’s survey. The majority of the increase is due to Category 1 additions in the VACAR sub-region. The amount of the reportedRegional Reliability Assessments

188 2008 Long-Term Reliability Assessment planned capacity that will actually be built is highly dependent on factors such as regulatory approvals, market prices, fuel av ailability, the ability to arrange suitable interconnection and transmission access agreements, the number of othe r generation plants that are being constructed, the ability to permit and complete necessary tran smission line additions in a reasonable amount of time, the ability of the ge neration developer to obtain fina ncial backing, and other typical business factors.

The horizontal line in Figure SERC-1 demonstrates that the SERC region has 32,866 MWs more generation within the region in 2008 than will be requ ired to meet the region’s demand in 2017. Total potential genera ting plant capability for July 1, 2013 from the 2008 survey is 305,717 MW, versus the 288,137 MW that was identified for that time period in the 2007 survey. Over the period covered by the 2008 survey, generation capacity additions totaled 49,647 MW versus 44,463 MW reported in 2007 for the period covered by that survey. This marks the third consecutive survey with increased potential capa city additions. The SERC RRS believes that the Generation Plant Development Survey provides one important indicati on of the potential generation development within the SERC region and its sub-regions.

Figure SERC-1: Potential Gene ration Plant Development in SERC

190,000 200,000 210,000 220,000 230,000 240,000 250,000 260,000 270,000 280,000 290,000 300,000 310,000 320,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YearMegawatts

2008 Survey Total Capacity 2008 EIA-411 Demands 32,866 MW 80,199 MW

*Source — SERC Reliability Review Subcommitt ee 2008 Generation Plant Development Survey

Purchases and Sales Near-term (2008-2013) planned firm purchases acr oss the SERC electrical borders total 1,548 MW and are comprised of 908 MW from RFC and 640 MW from SPP. These firm purchases have been included in the capacity margin calculations for the region.Regional Reliability Assessments

189 2008 Long-Term Reliability Assessment Near-term planned firm sales across the SE RC electrical borders total 3,186 MW and are comprised of 1,551 MW to FRCC, 1,247 MW to RFC, 13 MW to MRO, and 375 MW to SPP. These firm sales have been accounted for in the capacity margin calculations for the region.

In the long-term (2008 to 2017), purc hases and sales are difficult to forecast with any certainty. Purchases declined from 1,553 MW to 780 MW. Sales declined from 3,363 MW to 676 MW. Only firm transactions are accounted for in the capacity margin calculations for the region.

Fuel Fuel supplies are expected to be adequate to meet forecast de mands over the next 10 years. Sufficient inventories (including access to salt-dome natural gas storage), fuel-switching capabilities, alternate fuel deli very routes and supp liers, and emergency fu el delivery contracts are some of the important measures used by SERC members to reduce reliability risks due to fuel supply issues. The predominant fuel type used in the region is coal, an d its share of member’s capacity is 37.3% of the total generation. Gas generation is used during peaking conditions and its reported share of member’s capac ity is 16.6% of total generation.

SERC members recognize that planning for variabil ity in resource availability is necessary. Many SERC members typically provide for this variability through capaci ty margins, demand side management programs, fuel inventories, di versified fuel mix and sources, and transfer capabilities. Some SERC member s participate in Reserve Sharing Groups (RSG). In addition, emergency energy contracts are us ed within the region and with neighboring systems to enhance recovery from unplanned outages. Emergency sales and purchases and activation of shared reserves have been used in the region during the past year. However, th e frequency of their use has not increased relative to previous years.

Fuel supply will always be a crit ical part of the power supply ch ain, regardless of fuel choice. SERC utilities have been able to maintain fuel diversity in their portfolios, enhancing reliability. Looking forward, SERC is following these issues to ensure reliability is maintained into the longer-term planning horizon:

• Protecting the nation’s natural gas production an d transportation facil ities in the Gulf Coast areas

• Monitoring the development of LNG facilities in both the U.S. and other natural gas producing countries

• Monitoring the next wave of new generati on additions over the next 10 - 15 years

• Ensuring that the coal delivery infrastructure keeps pace with the forecasted increase in construction of coal generation facilities

• Ensuring that fuel inventories continue to be managed appropriately to mitigate the effects of natural disasters and other causes of disruptions to fuel supplies

Transmission The existing bulk transmission system within SERC totals 49,994 miles of transmission lines comprised of 17,699 miles of 161-kV, 20,447 mile s of 230-kV, 3,246 miles of 345-kV, and 8,602 miles of 500-kV transmission lines. SERC memb er systems continue to plan for a reliable bulk transmission system and plan to add 317 miles of 161-kV, 1,644 miles of 230-kV, 338 miles of 345-kV, and 447 miles of 500-kV tran smission lines in the 2008–2017 time period. AsRegional Reliability Assessments

190 2008 Long-Term Reliability Assessment reported in the 2007-2016 NERC LTRA Report, th e bulk transmission expansion plans of SERC region members are second only to the WECC. Furthermor e, the planned transmission expansion in SERC represents approximately 20% of all transmission expansion in the U.S. over the next ten years. This marks the sixth cons ecutive year in which SERC has reported at least one-fifth of all planned U.S. transmission expa nsion. SERC members invested $1.262 billion in new transmission lines and system upgrades in 2007 (includes transmi ssion lines 100 kV and above and transmission substations with a low- side voltage of 100 kV and above), and are planning transmission capital expenditures in exce ss of $8.66 billion over the next five years.

SERC member transmission systems are directly in terconnected with the tr ansmission systems in FRCC, MRO, RFC, and SPP. Transmission studies are coordinated thr ough joint interregional reliability study groups. The results of individu al system, regional and inter-regional studies help to demonstrate that the SERC transmissi on systems meet NERC Reliability Standards.

Results from the ERAG (Eastern Interconnection Reliability Assessment Group) sponsored 2008 Summer MRO-RFC-SERC West-SPP inter-regional study indicate potential transmission transfer issues between the De lta sub-region and some neighbori ng regions involved in the study. The areas of interest from this study indicate that the First Contingenc y Incremental Transfer Capability (FCITC) from the Delta sub-regi on to some neighboring interfaces, including SPP and MRO, as “zero”. These transfers are prim arily limited by 161 kV transmission facilities on the Entergy-SPP interface for the outage of the ANO-Ft. Smith 500 kV line, which is a tie line between Entergy and Oklahoma Gas and Electric. Previous reliability studies indicate that power flows on these 161 kV tran smission lines are extremely se nsitive to Entergy and SPP generation dispatch in the local area, as well as transactions modeled across Entergy’s northern interface. While Entergy and other SPP member s have committed to upgrading one of these interface constraints (i.e., Danville -Magazine 161 kV line), Entergy is also evaluating other longterm transmission solutions for this limit. Ho wever, Entergy does not expect any reliability concerns for the summer of 2008

The transmission systems in SERC are expected to have adequate deliv ery capacity to support forecast demand and energy requirements and firm transmission service commitments during normal and applicable contingency system conditi ons as prescribed in the NERC Reliability Standards (see Table 1, Category B of NERC Reliability Standard TPL-002-0) and the member companies’ planning criteria relating to transmission system performance.

Operational Issues Coordinated interregional transmission reliability and transfer capability studies for the shorter term planning horizon were conducted among all the SERC sub-regions and with the neighboring regions. In addition, c oordinated intraregional transmi ssion reliability and transfer capability studies for the longer term planni ng horizon were conducted within SERC. These studies indicate that the bulk transmission systems within SERC and between adjoining regions can be expected to provide adequate and reli able service over a range of system operating conditions.

Drought conditions in SERC are lessoning in so me sub-regions; reliability concerns arecontinuing in other sub-regions in the near-term but long-term outlook is unknown. All subregions of SERC experienced drought effects during 2007 which provided a valuable basis forRegional Reliability Assessments

191 2008 Long-Term Reliability Assessment evaluation of future drought conditions. SE RC conducted a special assessment including an extreme hydrological scenario more severe in terms of water availability to forecast 2008 summer conditions. Based on the assessment, if the drought con tinues through 2008, the hydrological conditions lead ing into 2009 could be more severe. However, at the present time hydrological conditions in 2008 are improving in some areas. While it is difficult to predict on a long-range basis the impact of long-term drought conditions, the members of SERC have now had experience with preparing the special assessm ent which can be repeated in the future as required. The results of this recent special assessment show that no sub-region identified significant concerns that might threaten reliability for the nea r-term. At most, some redispatch, modest increases in imports, or operating guidelin es will be required. Individual Transmission Planners and Planning Coordina tors are continuing drought pr eparedness initia tives already underway and operational representatives continue as needed to provide opportunities for coordination and sharing of system conditions.

The current status (October 14, 2008) according the US Drought Monitor (brown areas are Drought Level 4 – exceptional) 173 is depicted in the Figure to the right.

All sub-regions of SERC e xperienced drought effects during 2007 which provided a valuable basis for evaluation of future drought conditions. SERC conducted a special assessm ent including an extreme hydrological scenario more severe in terms of water availability to forecast 2008 summer conditions. Based on the assessment, if the drought continues through 2008, the hydrological conditions leading into 2009 could be more severe. However, at the present time hydrological conditions in 2008 are improving in many areas. While it is difficult to predict on a long-range basis the impact of long-term drought conditions, the members of SE RC have now had experience with preparing the special assessment which can be repeated in the future as required. The results of this recent special assessment show that no sub-region identified significant concerns that might threaten reliability for the near-term. At most, some redi spatch, modest increases in imports, or operating guidelines will be required. Individual Transm ission Planners and Planning Coordinators are continuing drought preparedness initiatives alr eady underway and operational representatives continue as needed to provide opportunities fo r coordination and shari ng of system conditions.

Reliability Assessment Analysis

Capacity resources in SERC are expected to be able to supply the pr ojected firm summer demand with adequate margin. Although SERC doe s not specify a regional capacity margin requirement, members adhere to their re spective state commission regulations, RTO requirements and/or internal business practices as applicable. The projected long-term capacity margins under various definitions are reflected in Figure 2.

173 http://drought.unl.edu/dm/monitor.htmlRegional Reliability Assessments

192 2008 Long-Term Reliability Assessment Reported potential capacity additions and existing capacity, including uncommitted resources, along with the necessary transm ission system upgrades, could sa tisfy capacity margin needs through 2017. The outcomes in terms of resource adequacy is highly dependent on regulatory support for generation expansion pl ans, new state local and fede ral environmental regulations impacting operation of existing generating resour ces, state and local environmental and siting process regulations that influence the developmen t of new generating resour ces. As can be seen in Figure SERC-2, the range of poten tial outcomes is quite wide, part icularly for the out years. Note that year-to-year comparisons with prior re ports are not possible due to the changes in the definition NERC specifies for generati on status and margin calculation.

In order to address unexpected fuel interrupt ions due to resource unavailability, SERC entities with large amounts of gas-fired generation connect ed to their systems ha ve conducted electricgas interdependency studies. In-d epth studies have simulated pipeline outages for near and longterm study periods as well as both summer a nd winter forecasted p eak conditions. Also included, for each of the major pipelines serving the service territory, is an analysis of the expected sequence of events for the pipeline contingency, replac ing the lost generation capacity, and assessment of electrical transmission system adequacy under the resulting conditions. Dual fuel units are tested to ensure their availabil ity and that back-up fuel supplies are adequately maintained and positioned for immediate availa bility. Some genera ting units have made provisions to switch between two separate natural gas pipeline systems, reducing the dependence on any single interstate pipeline system. Moreove r, the diversity of gene rating resources serving load in the region further reduces the region’s risk.

Current projections indicate that the fuel supply infrastructure for the n ear-term planning horizon is adequate even considering possible impacts due to weather extremes. New international gas supplies are continuing to emerge in the U.S. market, positively impacting fuel inventories. While fuel deliverability problems are possibl e for limited periods of time due to weather extremes such as hurricanes and flooding, assessm ents indicate that this should not have a significant negative impact on re liability. The immediate imp act will likely be economic as some production is shifted to othe r fuels. Secondary impacts c ould involve changes in emission levels and increased deliveries from alternate fuel suppliersRegional Reliability Assessments

193 2008 Long-Term Reliability Assessment SERC Capacity Margin Comparison

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources Total Potential Resources

Adjusted Potential Resources SERC Potential M argin* * The SERC Potential Margin line includes under development and uncommitted generation resources, along w ith assumptions regard ing generation availability and transmission deliverability based on SERC’s Annual Generation Plant Development Survey Figure SERC-2: 2008 LTRA SERC Region - Capacity Margin Comparison

Aging Work force Issue In general, SERC member companies are actively recruiting replacement employees in field and technical functions as the need arises. SE RC members recognize the need for continually improving skills as both a business requirement and a potential issue for grid reliability. While SERC members are addressing this issue on an i ndividual company basis, in general, companies work to help enhance the technical educa tion systems through various guidance and support mechanisms, continue development of their t echnical employees through in-house and outside training, and support employees through continued upgrading of tools. T echnical interchanges and industry audits are used to he lp redefine performance and set challenges that attract capable candidates. Meeting industry standards increasingly require s training and performance requirements that help improve technical capabilities.



### Sub-regions

Central

Demand The 2008 summer net internal demand forecast for the Central Sub-region was 42,163 MW and the forecast for 2017 is 49,673 MW. This year’s forecast average annual peak growth rate for 2008-2017 is 1.84% for the sub-region. This is lower than last year’s forecast growth rate of 2.1% due to the forecast impacts of new Dema nd Side Management (DSM) programs and lower economic projections, and is based on normal w eather conditions along with monthly energy sales, economic growth, population, employm ent and gross regional product increases throughout the sub-region. There is a mix of various demand response programs including interruptible demand, new energy efficiency progra ms, customer curtailing programs, and direct load management including an air conditioner c ontrol program. To assess variability, most members within the sub-region use forecasts assuming normal weather, and then develop models for milder and more extreme weather to create optimistic and pessimistic scenarios.Regional Reliability Assessments

194 2008 Long-Term Reliability Assessment Generation Members in the Central sub-region reported a ra nge of various categories of capacity for the years 2008-2017. This capacity can be categorized as existing certain and uncertain, planned and proposed and is adequate to meet demand during this time period.

Table SERC-1: Central LTRA Capacity Breakdown
Capacity Type Year 2008 Year 2017 Existing Certain 49,668 MW 47,607 MW Solar .56 MW .56 MW Biomass 15 MW 15 MW Hydro 4,965 MW 4,989 MW Existing Uncertain 4,608 MW 4,759 MW Proposed capacity 1,183 MW 12,944 MW Planned capacity 0 MW 2,604 MW Biomass 2 MW 2 MW

To determine potential resource options for the fu ture, members in this sub-region use long-term contracts and are in the process of either eval uating or adding self-build options to add new capacity.

Purchases and Sales Members in the Central sub-region reported a range of firm and non-firm sales and purchases for the years 2008-2017. These sales and purchases are external and in ternal to the region and subregion and help to ensure resource adequacy with in the sub-region. The table below summarizes these transactions during this time period.

Table SERC-2: Central Sub-regional Sales/Purchases
Transaction Type Year 2008 Year 2017 Firm Sales (External: RFC) 66 MW 160 MW Firm Sales (Internal) 143 MW 244 MW Non-firm Sales (Internal) 0 MW 167 MW Firm Purchases (External: RFC) 316 MW 176 MW

Sales of zero for non-firm transactions within the SERC region were reported.

The majority of these sales/purchases are backed by firm contracts for a mix of generation and transmission. Very few are associated with liquidated damages contracts (LDC). Although some members in the Central su b-region participate in Contingency Reserve Sharing Groups for assistance during emergencies, the sub-region is not dependent on outside purchases or transfers to meet its load.

Fuel Fuel vulnerability is not considered to be a co ncern. Central sub-region members have a highly diverse mix of suppliers, transpor tation, supply contracts, on-site st orage and fuel al ternatives to supply generation. Coal is responsible for 47.8% of member generation in the sub-region. TheRegional Reliability Assessments

195 2008 Long-Term Reliability Assessment remaining generation is supported by 13.5% nucle ar, 19.1% oil and gas, 3.3% pumped storage, 10.0% hydro and 6.3% net purchases a nd sales and other/unknown fuel t ypes. Some oil is stored as an alternative fuel. Fuel stocks, transp ortation systems and supplier communications are considered strong and are monitored routinely for adequacy.

Transmission For the next ten years, the Central sub-region has planned 9 miles of 230kV, 181 miles of 345kV and 67 miles of 500kV as new bulk transmi ssion lines. The following table shows the transmission additions to the bulk power system th at ensure reliability dur ing the next ten years.

The details of the transmission expansion plan s and transformer additi ons are shown in the Major Transmission Projects > 200 kV section.

Operational Issues Sub-regional members plan several generation additions to come into service within the next ten years. These additions will increase reliabilit y by diversification of generation type and also with locations throughout the se rvice territory. A lthough the sub-region is not predicting any major generation or transmission outages that wi ll affect reliability, ge neration unit outages will include turbine overhauls. Expected outages will be performed during low peak periods and capacity replacement planned to ensure resource adequacy.

No major environmental/regulatory restrictions or temporary opera ting measures are expected to affect the reliability of the Centra l sub-region for the next ten years.

Reliability Assessment Analysis Net capacity resource margins in the sub-regi on as reported between the years 2008-2017 are from 15.2% to 0.6% over the ten-year period using NERC’s 2008 method as shown in Figure SERC-3. There is no regional, sub-regional, state or provincial marginal requirement for this sub-region. Members within the sub-region pr oject capacity margins based on forecasted demand with the assumptions of normal weathe r, expected economic conditions, and expected demographics for each specific area.

Resource adequacy analyses are performed on a regular basis, and no significant changes have been reported from last year. Members use pla nning studies to ensure ge neration deliverability. Studies are coordinated with ne ighboring systems to incorporate imports and unit outages. Members report no retirements for the upcoming year s. Members within the sub-region rely on quarterly OASIS studies. For example the SERC Near-term Study Group assesses transfer capability issues.

Companies within the sub-region maintain i ndividual criteria to addr ess any problems with stability. UVLS systems have been installed to prevent voltage collapse at Philadelphia, Mississippi, and Knoxville, Tenness ee. All other systems are expected to be secure with no anticipated stability issues. Companies within th e sub-region do not have a general guideline for on-site, spare generator step-up unit and auto transformers, although TVA has standardized on a small number of 500 kV designs and has studied the interchangeability of existing spares.Regional Reliability Assessments

196 2008 Long-Term Reliability Assessment Central Capacity Margin Comparison

-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources Total Potential Resources

Adjusted Potential Resources Central Potential M argin* * The Central Potential Margin line reflects the Central subregion’s component of the SERC Annual Generation Plant Development Survey and includes under development and uncommitted generation resources, along w ith assumptions regarding generation availability a nd transmission deliverability Figure SERC-3: 2008 NERC LTRA SE RC Central Sub-region – With Central Potential Margin

In order to address plans for cat astrophic events companies use t echniques such as black start analysis and training, emergency load curtailmen t programs, load shedding plans, and purchases of back up power through inte rconnections. The sub-region experienced a severe drought through 2007 which continued into 2008, and some members have seen a reduction in their power supply from Southeastern Power Administ ration due to repair work on the Wolf Creek Dam which is likely to continue for several mo re years. Hydro oper ations are constantly monitored and evaluated for potential changes and mitigation plans are formed to minimize any threats to reliability. While the continuing dr ought and dam repairs will affect hydro energy and capacity and cause some thermal de-rating, no problems are foreseen in meeting normal margins and maintaining normal reliability.

To further improve bulk power system reliabi lity, members of the sub-region have reported various programs that will be im plemented within the next few years. These programs include: an Operator Training Simulato r (in-service in 2009), a Dynami c Thermal Circuit Rating program developed by the Electric Power Re search Institute, and improvement to the capabilities of state estimator forward analysis tools.

Member companies have performed assessments to comply with TPL-001 through TPL-004. E.ON develops and files annual Transmission Expa nsion Plans with the ITO, which identifies and corrects any system deficiencies due to th ese standards. Members participate in regional studies to assess extreme contingency events. Overall no significant problems have been observed on the bulk electric system from these analyses. Some planned and controlled load shedding may be required for extreme contingencies.

The sub-region has various maintenance and project programs in place that assess the reliability of existing transmission infrastructure and to repair/replace deficient elements as they are encountered. Transmission planning processes routinely identify new facilities and theRegional Reliability Assessments

197 2008 Long-Term Reliability Assessment replacement of existing facilities that reinforces the transmission infrastructure. Inspections, testing, and maintenance are used by members to ensure that reliability is not impacted by infrastructure issues.

To assess short circuit levels on the transmission system within the region, members within the region maintain a short circuit m odel approximately 3 to 4 years into the future and keep limits well within the limits of curre ntly available circuit breaker technology. None of the members within the sub-region anticipate short ci rcuit levels will impact reliability.

Delta

Demand The 2008 summer net internal demand forecast fo r the Delta sub-region was 27,936 MW and the forecast for 2017 is 33,144 MW. This year’s compound annual growth rate for 2008-2017 is 1.92% for the sub-region. This is slightly greater than last year’s forecast growth rate of 1.9%. A member reported decreases are due to forecas ted use per customer in the Residential and Commercial classes during the summer months. Un certainty and variability is assessed through load scenario development, based on historical temperature probabilities. Peak load scenarios are also performed to assess conditions due to extreme weather found in historical records.

Members within the Delta sub-region reported that they have a mix of demand response programs which consists of interruptible load programs for larger customers and a range of conservation/load management programs for all customer segments.

Generation Members in the Delta sub-region reported a range of various categories of capacity for the years 2008-2017. This capacity can be cat egorized as existing certain and uncertain, planned and proposed and is adequate to meet demand during this time period. There are no planned capacity additions and 5,234 MW proposed capacity addi tions reported within the sub-region.

Table SERC-3: Delta LTRA Capacity Breakdown
Capacity Type Year 2008 Year 2017 Existing Certain 30,091 MW 29,938 MW Hydro 79 MW 79 MW Existing Uncertain 11,993MW 11,993 MW Planned Capacity 0 MW 0 MW Proposed Capacity 0 MW 5,234 MW **No Planned or Proposed Capacity was reported within this sub-region.

Purchases and Sales Members in the Delta sub-region reported a range of firm and non-firm sales and purchases for the years 2008-2017. These sales and purchases are external and in ternal to the region and subregion and help to ensure resource adequacy with in the sub-region. The table below summarizes these transactions during this time period.Regional Reliability Assessments

198 2008 Long-Term Reliability Assessment Table SERC-4: Delta Sub-regional Sales/Purchases
Transaction Type Year 2008 Year 2017 Firm Sales (External: RFC, SPP) 600 MW 0 MW
Firm Sales (Internal) 1145 MW 888 MW Firm Purchases (Internal) 1125 MW 92 MW Firm Purchases (External: SPP) 541 MW 505 MW

Members within the sub-region reported that so me of these sales/purchases are backed by firm contracts for a mix of generati on and transmission. Very few ar e associated with liquidated damages contracts (LDC). Even though some memb ers are a member of reserve sharing groups that ensure transmission during emergency c onditions, the sub-region is not dependent on outside purchases, transfers, or contr acts to meet the demands of its load.

Fuel Delta sub-regional members reported that they purchase a significant amountof fuel in shortterm markets. The entities en sure that they are in constant communication with pipelines, storage facilities and suppliers in the region resulting in continuous up-to-date knowledge of supply and transportation issues. Agreements have been set in place to purchase supply, transportation, balancing, flexibility and peaking services to serve anticipated generation needs.

Fuel supplies and infrastructure are expected to be more than adequate for the upcoming years of demand. Members rely on a portfoli o of firm-fuel resources to ensu re adequate fuel supplies to generating facilities during pr ojected winter peak demand. Those resources include 17.4% nuclear and 26.7% coal-fired generation that are re latively unaffected by winter weather events, 0.1% fuel oil inventory, 2.5% dua l fuel, 0.3% hydro, 2.2% net purch ases and sales, and 50.8% natural gas at a company-owned natural gas storage facility, and short-term purchases of firm natural gas. This mix of resources provides dive rsity of fuel supply and minimizes the likelihood and impact of potentially problematic issues on system reliability. Other measures include aggressive maintenance of co al delivery infrastructure.

Transmission For the next ten years, the De lta sub-region has new transmi ssion plans for 226 miles of 230kV and 100 miles of 345kV. These plans consist of additions, retirements and conversions to the bulk transmission lines in this sub-region. The following table shows significant transmission additions to the bulk power system influenc ing reliability during the next ten years.

The details of the transmission expansion plan s and transformer additi ons are shown in the Major Transmission Projects > 200 kV section.

Operational Issues Sub-regional members expect several generation additions or changes to come into service within the next ten years, but none are expected to be pe rformed during peak season. Approximately 1,100 MW of gas-fired steam generation is assumed to be unavailable for dispatch for the coming year, during which ti me a life-cycle assessment will be made toRegional Reliability Assessments

199 2008 Long-Term Reliability Assessment determine future disposition of this capacity. There is expected to be no effect on reliability or temporary operating measures required due to these outages. In addition, approximately 500 MW of gas-fired steam generation is also expected to be out of service for a period of 18 months beginning in 2010, during which time it will be converted to a Petroleum Coke/Coal fired facility. The effect of this expected out age on reliability is currently under study.

No major environmental/regulatory restrictions or temporary opera ting measures are expected to affect the reliability of the Delta sub-region for the next ten years.

Reliability Assessment Analysis Net capacity resource margins in the sub-regi on as reported between the years 2008-2017 are from 6.9% to -11.8% as depicted in Figure SERC- 4. While these projecti ons indicate a low or negative capacity margin during a portion of th e forecast period, it is anticipated that loadserving entities within this sub-region will contr act for adequate firm capacity to reliably serve their loads as the near-term horizon approaches. In addition, because of the large amount of nonfirm generation available within the sub-region, additional resources could be procured to meet any expected shortfalls in generation capacity. Such non-firm generatio n was not reported by the sub-region members and thus cont ributed to the misleading low to negative capacity margins. Non-firm or uncommitted generation within this sub-region totals approximately 5,234 MW. Taking into account these non-firm or uncommitte d resources, the capacity margins for 2008 to 2017 would thus change to 6.9% to 5.0%.

While there is no regional or margin requirement for this sub-region, so me members within the sub-region project capacity margins based on lo ng and short-term planning, along with Loss-ofLoad Studies and reserve allocations from reserv e sharing groups. In certain areas of the subregion, capacity margins are expected to decrease as a result of short-termcontacts expiring until 2014. Internal resources are expected to be adequate to meet the needs of the sub-region.

While the sub-region’s generation capacity is predicted to be ad equate for supplying its load, it also has access to reserve shari ng programs, fuel diversification, fuel policy contracts and other firm resource network contracts and power agreemen ts to ensure supply in times of catastrophic events. Several analyses (Loss-of-Load Expecta tion, etc.), coordinated w ith neighboring regions and other SERC sub-regions, assess resource adequacy and transfer capability that will support reliable operations. Unreliable resources are no t included in these assessments. No generation deliverability concerns, major tran smission additions or significant changes are expected to be an issue for the sub-region for the ne xt ten years. There are no pl anned retirements of any existing units within the sub-region.Regional Reliability Assessments

200 2008 Long-Term Reliability Assessment Delta Capacity Margin Comparison

-15.00% -10.00% -5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources
Total Potential Resources Adjusted Potential Resources Delta Potential M argin* * The Delta Potential Margin line reflects the Delta subregion’s component of the SERC Annual Generation Plant Development Surv ey and includes under development and uncommitted generation resources, along w ith assumptions regarding generation availability and transmission deliverability

Figure SERC-4: 2008 NERC LTRA SERC Delta Sub-region – With Delta Potential Margin

Studies have been performed to assess transien t dynamics, voltage and small signal stability issues for summer conditions in the near-t erm planning horizons as required by NERC Reliability Standards. For cer tain areas of the sub-region, the 2009 assessment from the study was chosen as a proxy for the near-term evalua tion. No critical imp acts to the bulk electric power system were identified. While there is no common sub-region wide criteria to address transient dynamics, voltage and small signal stabil ity issues, some member s have noted that it adheres to voltage schedules and voltage stabil ity margins. In addition, some members employ static VAR compensation device s to provide reactiv e power support and voltage stability. Under-voltage load-shedding (UVLS) programs are al so used to maintain voltage stability and protect against bulk electric sy stem cascading events. It was reported that the maximum load that can be shed by the UVLS program is approximately 300 MW.

Some members in the sub-region reported that they have Capacity and Energy Emergency Response Plans in place to address catastrophic even ts. Other members rely on excessive capacity margins or multiple sources for transportation of natural gas in the event of a disruption to a major pipeline to its generators. The s ub-region anticipates normal hydro conditions for the upcoming summer based upon current reservoir levels and anticipa ted rainfall. Studies that assess TPL-001 through TPL-004 standards cover bot h the near-term and longer-term planning horizons. These studies also cover aspects rela ting to load flow, shor t circuit, and system stability. This analysis is used by some memb ers to monitor any issues caused by these extreme events, but does not use th ese results alone in identifying sy stem improvements. The analysis done in the most recent study reve aled no unexpected cons traints. Certain members reported that the TPL-004 contingencies that cr eated loading or voltage probl ems were corrected to meet acceptable planning criteria. The first correcti on method attempted was a switching solution. If switching was not sufficient, selected loads were shed until all element loadings and voltages were within acceptable planning criteria. To impr ove the reliability of th e bulk power system the sub-region has installed static VAR compensati on (SVC) in two locations on the transmissionRegional Reliability Assessments

201 2008 Long-Term Reliability Assessment system in order to provide reactive power s upport and maintain voltage stability. Series compensation on several transmission lines has been installed on the system in order to regulate power flows on the transmission system. Member s are continuing to pursue plans to employ these technologies in order to improv e and maintain bulk system reliability.

To assess short circuit levels on the 230kV and above transmissi on system within the region, various members within the sub-region resort to equipment replacement plans that are deemed underrated by short circuit analysis . Other companies will empl oy techniques such as station reconfigurations where appropr iate and effective. To address the concerns of aging infrastructure, members within the sub-region ha ve plans of replacing equipment around the subregion through maintenance programs. The s ub-region does not have guidelines for spare generator units. Companies individually have th eir own criteria and pr ograms to have spare transformers for reliability.

Gateway

Demand The 2008 summer net internal demand forecast for the Gateway Sub-region was 19,105 MW and the forecast for 2017 is 20,997 MW. This year’s compound annual growth rate for 2008-2017 is 1.05% for the sub-region, which is comparable to last year’s forecast growth rate of 1.0%. The forecast peak load for the sub-region is calculat ed as the sum of the forecast peak loads of the individual members. Members reported that p eak growth rates are due to slower economic growth, assumptions on efficiency, and saturation tr ends used in the Statistically Adjusted EndUse modeling framework. In order to assess the uncertainty and va riability in projected demand, some members within the sub-region use regression models, multiple forecast scenario models, and econometric models. Economic assumptions and historical temperature and weather pattern information are considered individually by each sub-region member. The sub-region has a mix of voltage reduction curtailment programs, and other interruptible load programs, but these programs are minor compared to the total dema nd in the sub-region. The Illinois Commerce Commission is in the process of reviewing a variety of proposed energy efficiency programs, including energy audits and direct load control programs, which c ould further reduce the rate of growth in the sub-region.

Generation Members in the Gateway sub-region reported a ra nge of various categories of capacity for the years 2008-2017. This capacity can be categorized as existing certain and uncertain, planned and proposed and is adequate to meet demand during this time period. Some members have reported that specific capacity and re source plans for 2013-2017 have not been identified during this current assessment period. Members plan to enter into bilateral contracts, purchase capacity as needed, or construct new resources as determined by various Integr ated Resource Plans. At this time, wind and solar plants are not connected within the sub- region, but over 3,900 MW of wind generation is proposed to connect over the next five years. Biomass plants (landfill gas) supply only a few MWs of capacity to meet the sub -region load requireme nts and are generally connected to distribution facilities.Regional Reliability Assessments

202 2008 Long-Term Reliability Assessment Table SERC-5: Gateway LTRA Capacity Breakdown
Capacity Type Year 2008 Year 2017 Existing Certain 24,786 MW 23,916 MW Hydro 368 MW 368 MW Existing Uncertain 4,566 MW 4,671 MW Inoperable 526 MW 86 MW Planned 0 MW 565 MW **No proposed capacity was reported within this sub-region.

Purchases and Sales Gateway sub-regional members reported a variety of firm and non-firm sales and purchases for the years 2008-2017. These sales and purchases are both external and internal to the region and sub-region. Sales of excess capacity by some memb ers help to ensure re source adequacy within the sub-region. The table below summarizes th ese transactions duri ng this time period.

Table SERC-6: Gateway Sub-regional Sales/Purchases
Transaction Type Year 2008 Year 2017 Firm Sales (External: RFC) 400 MW 0 MW Firm Sales (Internal) 420 MW 0 MW Non-Firm Sales (Internal) 0 MW 176 MW Firm Purchases (Internal) 28 MW 98 MW Firm Purchases (External: SPP) 79 MW 79 MW

Non-Firm Purchases 0 MW 234 MW

Most of the members within the sub-region report ed that the sales/purchases for 2008 are backed by firm contracts for both generation and tran smission. Members reported that liquidated damages contracts (LDC) were not used within the sub-region. Although the subregion has a robust transmission system with numerous inte rconnections to other regions and neighboring SERC sub-regions, the sub-region is not dependent on outside purchas es or transfers to meet the demand and planning reserves.

Fuel Gateway sub-region members reported various fuel policies and some memb ers have reevaluated fuel inventories and delivery practices as a result of fuel delivery issues. These policies take into account contracts with surrounding facilities, alternative tran sportation routes, and use of alternative fuels. Some members have developed Integrated Resource Plans to help ensure fuel reliability within the sub-region. These practices help to ensure balance and flexibility to serve anticipated generation needs. The predominant fuel type used in the sub-region is coal, and its share of member’s capacity is 56.6% of the total ge neration. Other fuel t ypes in the sub-region are 15.3% gas, 6.3% nuclear, 26.1% oil/gas, 1.9% hydro, and 9.2% other or net sales and purchases. No fuel supply problems ar e anticipated during the study period.

Transmission The transmission system in the Gateway sub-regi on is robust and highly interconnected with EHV tie-lines to MISO, PJM, SPP, and non-MISO members in MRO in addition to theRegional Reliability Assessments

203 2008 Long-Term Reliability Assessment interconnections with SERC members in the Cent ral and Delta sub-regions . The transmission system allows purchases and sales to maintain reliability within the s ub-region as well as to import and export power and energy as economic conditions warrant. In the event of capacity shortfalls within the sub-region, the transmissi on system provides opportunities to import power from sources outside of the sub-region, if generation would be available.

For the next five years, the Gateway sub- region has plans to build 57 miles of 345 kV transmission lines.

The details of the transmission expansion plan s and transformer additi ons are shown in the Major Transmission Projects > 200 kV section. Other transmission capacity upgrades are in various stages of the planning process and may be required to maintain reliability for specific needs.

Operational Issues No reliability problems are anticipated on the transmission systems of the Gateway sub-region for 2008 summer. The City of Springfield-CWLP reported that its Dallman generator unit 1, which experienced an explosion last year that compromised 86 MW, will not be available until the summer of 2009. The new Dallman generator un it 4 is expected to be in service by January 2010. Several members within this sub-region ha ve noted that there are limitations with emissions stipulations, thermal discharge or lake temperature limitations that can have an impact on peak energy needs. Many of these issues would be alleviated with the above normal precipitation received in late 2007 and early 2008. These li mitations or any unusual operating conditions are not expected to have a major impact on reliability. The Taum Sauk (440 MW) pumped storage facility in the AmerenUE cont rol area remains unavailable but this is not a reliability concern as adequate resources are avai lable in the sub-region. The Taum Sauk plant is expected to return to se rvice for the summer of 2010.

Reliability Assessment Analysis Net capacity resource margins in the sub-regi on as reported between the years 2008-2017 are from 19.4% to 13.6% as shown in Figure SERC- 5. There is no si ngle capacity margin requirement for the Gateway sub-region. Memb ers follow established business practices or guidelines from the governing regulatory bodies. Some members within the sub-region project capacity margins for both long and short te rm planning horizons, and considering new constructed generation, along with Loss-of-Load Studies and rese rve allocations from reserve sharing groups. In certain areas of the sub-region, capacity margin s are expected to decrease as a result of short-term contacts expiring until 2014. Internal resource s, including potential additions, are expected to be adequate to me et the needs of the sub-region even assuming extreme weather scenarios and 90/10 forecast loads. It is estimated that extreme weather could add an additional 5% to the load forecast in th e sub-region, resulting in a capacity margin of 15.4% in 2008 and declining to 9.3% in 2017. As me ntioned earlier, the sub-region has a mix of voltage reduction curtailment programs, and ot her interruptible load programs, but these programs are minor compared to the total demand in the sub-region, and should not be needed to maintain reliability considering the amount of ge neration capacity available in the Gateway subregion and the reach and strength of the Gatewa y transmission system to import power from adjacent areas that have capacity available.Regional Reliability Assessments

204 2008 Long-Term Reliability Assessment Generation additions are proposed th roughout the sub-region within th e next 5 years. The Prairie State 1,650 MW coal-fired plant in southwestern Illinois is expe cted to be in service by 2012, and a majority of the new EHV transmission pla nned in the sub-region is for connection and deliverability of this facility. Ot her minor increases to coal-fired plants in the sub-region are also planned. Over 3,900 MW (nameplate) of wind ge neration is proposed to connect to the transmission system in the sub-region through 2013, with approximately 85% of the total located in Illinois. Only a small fraction of this wi nd generation (no more than 20% of nameplate capacity based on current MISO business practices ) would be considered by sub-region members as contributing to the sub-region capacity portfolio during peak conditions. Th is percentage could change based on experience with the wind plants. In the 10-year period, a 1,650 MW (net) nuclear unit is proposed for centr al Missouri and its transmission requirements and impacts are under study.

Gateway Capacity Margin Comparison

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources
Total Potential Resources Adjusted Potential Resources Gateway Projected M argin* * The Gatew ay Potential Margin line reflects the Gatew ay subregion’s component of the SERC Annual Generation Plant Development Survey and includes under development and uncommitted generation resources, along w ith assumptions regarding generation availability a nd transmission deliverability Figure SERC-5: 2008 NERC LTRA SERC Gateway Sub-region – With Gateway Potential Margin

Fuel supply in the area is not expected to be a problem. Policies cons idering fuel diversity, contracts with various suppliers , inventory requirements, and de livery have been put in place throughout the area to ensure that reliability is not impacted. Even though various companies within the sub-region rely on sub -regional studies to assess resour ce adequacy, the market within this sub-region allows various entities to purchas e the energy necessary to meet any shortfalls that would compromise resource adequacy. Members reported that it is not common practice to add uncertain resources in their assessments (LOLE, resource studies, etc). There are no expected major unit retirements that will imp act reliability within the next ten years. Retirements of minor generating units to tal 114 MW over the ten year period 2008-2017.

Deliverability testing studies are performed on an ongoing basis throughout the su b-region to ensure that transmission capacity is sufficient to make the generation deliverable. No concerns for deliverability have been re ported within the study years.Regional Reliability Assessments

205 2008 Long-Term Reliability Assessment A number of major transmission system expansions are expected to be placed in-service over the next 10 years. The addition of the new Mari osa Delta 345/161 kV Substation in the Jefferson City area for 2008 summer has enhanced reliability in central Missouri. The Joachim 345/138 kV Substation addition is planne d to enhance reliability to th e southern St. Louis County and Jefferson County area of Missouri, and should be placed in-service by the fall of 2008. The addition of a Rush Island-Baldwin 345 kV line in response to the addition of coal-fired generating capacity at the Prairie State facility in southwestern Illinois is expected to be inservice mid-2010. A number of other transmission system expansions ar e being contemplated, but the timing for such additions awaits a definiti ve need. All additions are expected to improve reliability within the sub-region. Deliverability problems from generation centers or into local load centers are not anticipated to be an issue.

Sub-regional studies involving power flow, short-ci rcuit, and stability anal yses are not performed on a regular basis involving the entire sub- region, but joint studies are performed by the members as needed to address member and s ub-regional needs. To address plans for catastrophic events, some members of the sub-region consider dive rsity of gas supply and rely on generation supplied from various pipelines to safeguard against disruptions from a single pipeline, although the reliance on gas generation in the sub-region is minimal. Other members rely on large interconnections to neighboring sy stems, energy contracts, diverse generation options and contingency study plans to help safe guard against unforeseen events. The Gateway sub-region has adequate and diverse capacity res ources and is heavily interconnected, internally as well as to other SERC sub-regions and NERC re gions, to provide system reliability for its members.

Some sub-region members have studied the performance of local area load pockets for multiple contingency events. The addition of capacito r banks, modifications to transmission arrangements, and additional transmission supplie s are planned to reinforce these local area supplies. Under Voltage Load Shedding (UVLS) has not been implemented and should not be needed if these planned facility add itions are completed in a timely manner.

The sub-region is not experiencing a drought and c ooling water reservoirs are expected to be adequate due to heavy precipitation received this spring and early summer. Assessment studies to meet NERC Standards TPL 001 through 004, in cluding both powerflow and stability studies have been performed by the larger members. No major reliability issues have been reported in these studies, which include transient dynamics, voltage, and small signal stability analyses. Members continue to evaluate the performanc e of their systems studies and upgrade those limiting areas to enhance reliability Members within the sub-region do not anticipate short circuit problems on their transmission systems.

New equipment and techniques su ch as updating tie line mete ring, installing new Real Time Data Monitoring System (RTDMS) software, and installing phasor sensing devices are expected to continue within the next ten years as comp anies attempt to make improvements to improve reliability. Continued use of the phasor measurement equipment installed in various places on the transmission and interconnection system are expected to provide options to operations personnel in assessing immediate n ear-term conditions as well as pr ovide data for disturbances experienced on the system.Regional Reliability Assessments

206 2008 Long-Term Reliability Assessment Sub-region members are also individually implemen ting programs to address aging infrastructure and spare equipment through coordinated transmi ssion planning activities, and other programs. Some Gateway members have a limited number of spare transmission transformers and GSU transformers to minimize the outage time to porti ons of the transmission system and major power plant units. There are no anticipated reliability problems associated with these facility issues.

Southeastern

Demand The 2008 summer net internal demand forecast fo r the Southeastern Sub-region is 48,215 MW and the forecast for 2017 is 60,156 MW. This year’s compound annual growth rate for 2008- 2017 is 2.49% for the sub-region. This is comparable to last year’s forecast growth rate of 2.4%. Demand forecast is based on normal weather c onditions and uses normal/median weather, normal load growth and conservative economic scen arios. The sub-region has a mix of various demand response programs including interruptible de mand, customer curtailing programs, direct load control (irrigation, A/C and water heater co ntrols) and distributed generation to reduce the effects of summer peaks. To assess variabi lity, some sub-region members develop forecasts using econometric analysis based on approximately 30 year (normal, extreme and mild) weather, economics and demographics. Others within the s ub-region use the analysis of historical peaks, reserve margins and demand m odels to predict variance.

Generation Members in the Southeastern s ub-region reported a range of va rious categories of capacity for the years 2008-2017. This capacity can be categorized as existing certain and uncertain, planned and proposed and is adequate to meet demand during this time period. The resources for reliability are evaluated by future power supply plans, purchased power through contracts, and self building options of generation.

Table SERC-7: Southeastern LTRA Capacity Breakdown
Capacity Type Year 2008 Year 2017 Existing Certain 59,540 MW 62,611 MW > Existing Certain Hydro 4,058 MW 4,058 MW Existing Uncertain 5,800 MW 5,800 MW Planned 0 MW 1,682 MW Proposed 0 MW 9,253 MW **No proposed capacity was reported within this sub-region.

Purchases and Sales Southeastern sub-regional members reported a ra nge of firm sales and purchases for the years 2008-2017. These sales and purchases are external and in ternal to the region and sub-region and help to ensure resource adequ acy within the sub-region. The table below summarizes these transactions during this time period.Regional Reliability Assessments

207 2008 Long-Term Reliability Assessment Table SERC-8: Southeastern Sub-regional Sales/Purchases
Transaction Type Year 2008 Year 2017 Firm Sales (External: FRCC) 1,551 MW 0 MW Firm Sales (Internal) 931 MW 1,038 MW Firm Purchases (Internal) 408 MW 332 MW

Members within the sub-region reported that so me of these sales/purchases are backed by firm contracts for a mix of generation and transmission. None of thes e transactions are considered liquidated damages contracts (LDC). To ensure transmission during em ergency conditions, the sub-region is not dependent on outside purchases or transfers to meet the demand and planning

reserves.

Fuel Southeastern sub-regional members reported that fuel vulne rability is not an expected reliability concern for the study period. The members have a highly diverse fuel mix to supply its demand, including nuclear, PRB coal, Eastern coal, natu ral gas and hydro, along with dual fuel units. Some members have implemented fuel storage a nd coal conservation prog rams, and various fuel policies to address this concern. These tactics help to ensure balance and flexibility to serve anticipated generation needs. Coal fired ge neration comprises 41.7% of the total generation reported by sub-regional members. Other fuel types within the sub- region are 9.8% nuclear, 29.9% oil/gas, 2.6% pumped storage, 6.8% hydro and 9.2% net sales and purchases. No fuel supply problems are anticipated during the study period.

Transmission For the next ten years, the Southeastern s ub-region members have transmission plans or projections for 712 miles of 230 kV and 195 miles of 500kV. These plans consist of additions, retirements and conversions to the bulk transmission lines in this sub-region. The following table shows significant transmissi on additions to the bulk power system influencing reliability during the next ten years.

The details of the transmission expansion plan s and transformer additi ons are shown in the Major Transmission Projects > 200 kV section.

Operational Issues No reliability, environmental or regulatory restrictions are an ticipated on the transmission systems of the Southeastern sub-region. Memb ers have reported that some hydro and other generation units will undergo major rehabilitation, but outages will be coordinated in such a way that system reliability and contractual commitments will not be affected.

Reliability Assessment Analysis Net capacity resource margins in the sub-regi on as reported between the years 2008-2017 are from 16.1% to 5.4% as shown in Figure SERC-6. There are no regional, or sub-regional, marginal requirements for this sub-region. Some members within the sub-region project capacity margins based on existing resources, un it retirements, expected firm purchases agreements and anticipated generation additions. In ternal resources are expected to be adequateRegional Reliability Assessments

208 2008 Long-Term Reliability Assessment to meet the needs of the sub-region. Unit reti rements within the sub- region total 1,006 and the majority (925 MWs) are scheduled to retire in the 2011-2013 period.

Capacity in the sub-region should be adequa te to supply forecast demand. There are no significant changes to LOLP, EUE, generation re source models and other resources adequacy studies that will affect margins. Various tactics are being used to ensure these resource adequacy measurements are within an acceptable range. Annual Transmission Transfer Capability, System Impact, and Facility studies are performed jointly with various me mbers within the sub-region to determine external generation deliverability. Op erating guides are deve loped as necessary to ensure acceptable transfer levels are reached. Some entities perform annual contingency analysis (studies typically covering up to ten future years) and biannual stability studies to ensure internal generation deliverability. Current studies have identified no deliverability concerns or major unit retirements expected to impact reliability. No significant changes are expe cted to come about in the next ten years.

Southeastern Capacity Margin Comparison

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources
Total Potential Resources Adjusted Potential Resources Southeastern Potential M argin* * The Southeastern Potential Margin line reflects the Southeastern subregion’s component of the SERC Annual Generation Plant Development Survey and includes under development and uncommitted generation resources, along w ith assumptions regarding generation availability and transmission deliverability

Figure SERC-6: 2008 NERC LTRA SERC Southeastern Sub-region – With Southeastern Potential Margin

Various companies within the sub-region have fi rm transportation, gas storage, firm pipeline capacity, and on-site fuel oil and coal supplies to meet the peak demand. The sub-region has a very diverse fuel portfolio and implements fuel storage, sourcing, dual fuel capability units, and conservation programs. Using 90/10 forecast, so me members show that planning reserves are adequate to meet weather and fo recast uncertainty. Other member s anticipate utilizing existing resources, energy purchases, and/or interruptible load shedding to maintain reliable operation of their transmission system in these more severe co nditions. Variable resour ces are not included in these studies.Regional Reliability Assessments

209 2008 Long-Term Reliability Assessment Studies to determine transmission needs for new resources in the next ten years are currently being performed by various members in the sub-re gion. Bulk transmission projects will be put into place with long lead times in order to accomm odate any needed resources. Rapid forecasted load growth in the Metro Atla nta area will drive several 230 kV and 500 kV projects over the next ten year planning pe riod. The Southeastern sub-region doe s not have sub-regional criteria for dynamics, voltage or small signal stability ; however, various companies within the subregion maintain individual criteria and perform appropriate studies to address any stability issues. All systems are expected to be secure for the study period.

Members are expected to address catastrophic even ts by contractual arrangements that amount to reserve sharing agreements, fuel supply divers ity, interruptible load contracts, and excess reserves. Other members perform transmission studies considering loss- of-pipeline, extreme event (TPL-003 & 004), and infr astructure security studies. Studies are also conducted considering outages of up to thr ee 500 kV lines within neighbori ng utilities. The purpose of all these is to assess vulnerability to catastrophic events and th e development of appropriate mitigation plans. The general conclusion is th at the system is capable of weathering many potential catastrophic events with minimal impacts on neighboring systems.

Various areas are currently experiencing drought conditions; however recent weather assessments show significant improvement and th is trend is expected to continue throughout 2008. The sub-region members pa rticipated in the SERC regional drought assessment which did not identify significant reliab ility impacts from the drought. Although hydro generation is predicted to be lower than normal for the upcoming season, reliability will notbe affected due to ready access to other generation sources. Memb ers’ planning studies within this sub-region cover TPL-001 through TPL-004 to en sure adequate and compliant systems. No problems were cited for the next ten years and members stated that mitigation plans for previous problems are currently being addressed.

Tools such as the installation of microprocessor ba sed relays in transmission facilities, Dissolved Gas Analysis monitoring capabilities on Genera tor Step-Up transformers (GSUs), power flow analysis programs, and Static VAR Compensators have helped members take steps to improve the reliability and robustness of the system. Shor t circuit limits are assess ed through fault current studies and exceeded limits are mitigated th rough breaker replacements, transient recovery voltage capacitors, and the installation of reactor s. Aging infrastructu re is addressed by equipment testing, maintenance programs and e quipment replacements when it nears the end of its useful life. Members do not anticipate that planning or operational activities will be influenced by an aging infrastructure. Guidelin es for on-site spare GSUs are implemented on an individual member basis within the sub-region. A variety of t echniques such as maintaining a spare unit for all GSUs, programs for sharing spare transformers, and equipment loss programs are practiced by the sub-region to maintain equipment reliability.

VACAR

Demand The 2008 summer net internal demand forecast for the VACAR Sub-region is 61,103 MW and the forecast for 2017 is 72,100 MW. This year’s compound annual growth rate for 2008-2017 is 1.86% for the sub-region. This is comparable to last year’s forecast growth rate of 1.8%.Regional Reliability Assessments

210 2008 Long-Term Reliability Assessment Members reported that peak grow th rates are lower due to a slight economic decline and DSM reductions, but overall rates are comparable to la st year’s rates. Demand forecast is based on averages of the latest 20 to 35 years of historical weather, forecast economic growth, and regressing demographics against system load. Th ese tools are used to develop weather variables for forecasting peak demands. Some members reported that the demand forecast is based on a 50-50 weather projection. The sub-region has a mix of various demand response programs including interruptible demand, customer curtailing programs, Standby Generator Control, Residential Time-of-Use, General Service and I ndustrial Time-of-Use, and Hourly Pricing for Incremental Load Interruptible programs to reduce the affects of summer peaks. To assess variability, some members within the sub-re gion use forecasts that are developed using assumptions through economic models, historical weather conditions, en ergy consumption and demographics. Others assess variability of forecast demand by accounting for reserve margins instead.

Generation Members in the VACAR sub-region reported a range of various categories of capacity for the years 2008-2017. This capacity can be categorized as existing certain and uncertain, planned and proposed and is adequate to meet demand during this time period. The resources for reliability are evaluated by future power supply plans, forward purchased power agreements with conventional and renewable resources, conserva tion programs, and self building options of generation.

Table SERC-9: VACAR LTRA Capacity Breakdown
Capacity Type Year 2008 Year 2017 Existing Certain 72,934 MW 71,007 MW Hydro 3,721 MW 3,730 MW Biomass 225 MW 225 MW Existing Uncertain 2,005 MW 2,005 MW Inoperable 65 MW 65 MW Planned 349 MW 3,009 MW Proposed 0 MW 3,298 MW

Purchases and Sales VACAR sub-regional members repor ted a range of firm sales and purchases for the years 2008- 2017. These sales and purchases are external and internal to the region and sub-region and help to ensure resource adequacy within the s ub-region. The table below summarizes these transactions during this time period.

Table SERC-10: VACAR Sub-regional Sales/Purchases
Transaction Type Year 2008 Year 2017 Firm Sales (External: RFC) 50 MW 0 MW Firm Sales (Internal) 200 MW 100 MW Firm Purchases (Internal) 1,538 MW 1,052 MW Provisional Purchases (Internal) 0 MW 753 MWRegional Reliability Assessments

211 2008 Long-Term Reliability Assessment Members within the sub-region reported that so me of these sales/purchases are backed by firm contracts for a mix of generation and transmi ssion. Very few transactions are considered liquidated damages contracts (LDC). To ensure transmission during em ergency conditions, the sub-region is not dependent on outside purchases or transfers to meet the demand and planning

reserves.

Fuel Fuel vulnerability is not a concern within this su b-region. The members have a highly diverse mix of options which consist of on- site storage, transportation alte rnatives and fuel contracts to ensure supply to its resources. Other mitigation pl ans generally involve tiered strategies that are invoked depending on the severity of the situation. This guidan ce on managing fuel in short supply has been formalized in procedures as required by NERC Reliability Standards. These tactics help to ensure balance and flexibilit y to serve anticipated generation needs for the upcoming season. The sub-region has 26.1% of coal fired generation, 31.5% dual fuel (gas/oil), 2.7% oil, 2.0% gas, 8.1% pumped storage, 5.1% hydro, and 2.7% other and net sales and purchases. No fuel supply problems are anticipated during the study period.

Transmission For the next ten years, the VACAR sub-region has new transmission plans for 697 miles of 230 kV and 185 miles of 500kV. Thes e plans consist of additions, retirements and conversions to the bulk transmission lines in this sub-region. The following table shows significant transmission additions to the bulk power system influenc ing reliability during the next ten years.

The details of the transmission expansion plan s and transformer additi ons are shown in the Major Transmission Projects > 200 kV section.

Operational Issues For the next ten years members within the VACAR sub-region intends to perform capital improvements, routine and major maintenance activ ities, but are anticipated to be scheduled during lower demand periods (spring and fall). Th ese outages are not expected to affect its system reliability during this time period. The sub-region also plans to add approximately 834 MW from 2012 through 2018 in the form of cont racts and/or generation. Some of these additions are to replace expiring co ntracts. They too are not exp ected to cause a major deviation from the current reliability levels as a result of th ese additions. Some members also expected to slightly reduce generation due to the installation of scrubbers to fossil units due to North Carolina Clean Smokestacks legislation. Operat ing licenses are exp ected to have some restrictions if the drought in the area continues to limit peaking capacity for long durations. Although all of these environmental factors are issues within the sub-region, members are not predicting that these issues will have major impacts on reliability.

Reliability Assessment Analysis Net capacity resource margins in the sub-regi on as reported between the years 2008-2017 are from 18.1% to 3.8% as shown in Figure SERC-7. There is no regional, s ub-regional, state or provincial marginal requirement for this sub-re gion. Some members within the sub-region project capacity margins based on long-term pla nning tools which considers a combination of weather-induced load, the probability of units on outage, maintenance scheduling, and operating reserve obligations, resource adequacy studies and system reserve margins. Others rely on lossRegional Reliability Assessments

212 2008 Long-Term Reliability Assessment of load expectation studies to continue to guide the level of reserves maintained to ensure reliable service. To assess resource adequacy, some members have conducted studies and have determined that LOLP, LOLE and EUE figures are comparable to those for the previous year’s study. These studies may include estimates of th e impacts of forced and planned outages on the system operation. Other members use reserve marg ins to account for worse-case scenarios with unavailability. However, members have reported that there are no significant changes from last year’s assessment that will impact reliability.

VACAR Capacity Margin Comparison

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Existing & Net Firm Transactions Net Capacity Resources

Total Potential Resources Adjusted Potential Resources VACAR Potential M argin* * The VACAR Potential Margin line reflects the VACAR subregion’s component of the SERC Annual Generation Plant Development Surv ey and includes under development and uncommitted generation resources, along w ith assumptions regarding generation availability a nd transmission deliverability Figure SERC-7: 2008 NERC LTRA SERC VACAR Sub-region – With VACAR Potential Margin

The retirement of approximately 1,000 MW of older coal-fired capac ity by the end of 2018, along with the retirement of 500 MW of olde r combustion turbines by 2015 are expected to affect the sub-regions resources over the next ten years. Companies are prepared to mitigate this issue by implementing Integrated Resource Plans to determine new resource requirements over the next ten years. To ensure generation deli verability, some members use deliverability load test as a requirement for new generation that will serve load in their system. These tests ensure that all new generation is accessible for the supply of load. Other members within the sub-region rely on contracts for fuel and transportation, operat ing limits and security constraints to ensure their deliverability. Fuel suppl ies are expected to be adequate . Members have a very diverse mix of suppliers, transportation co ntracts, fuel switching plants and on-site storage to ensure adequacy of fuel supply. No fuel supply or deli very issues are expected for this study period. Adequate reserve capacity is maintained in vari ous ways to address resource availability issues (contracts, existing resources, et c.). In addition, members participate in a VACAR reserve sharing agreement whereby VACAR members s upply emergency power to other members upon request. Other companies are evaluating the econo mics and impacts of potentially adding large baseload generation facilities by 201 8 or later. To ensure resour ce adequacy against operational issues due to unexpected conditions, members impl ement emergency procedures such as Primary Reserve Warnings, Maximum Emergency Gene ration, Emergency Load Response programs, excess reserve programs, DSM, interruption of fi rm load, load forecasting tools, and reserveRegional Reliability Assessments

213 2008 Long-Term Reliability Assessment sharing groups. The members within this sub- region are divided in how they count renewable resources within their studies. Some members include them in their models as a design capacity value and others prefer to not include them in capacity counted on for resource adequacy. VACAR members report no major transmission a dditions or specific deliverability problems from generation centers that could impact reliability.

Members within the VACAR sub-region are i nvolved in studies performed by SERC Study Groups and interregional reliability assessmen ts conducted under the direction of the ERAG Management Committee. These studies analyze transfer capability problems and constraints throughout the sub-region. No constraints to th e bulk electric system for the study period was identified that could impact reliability. The VACAR sub-region does not have a sub-regional criterion for dynamics, voltage and small signal stability. Various companies within the subregion perform individual studies in accordance w ith NERC Reliability Standards and maintain individual criterion to ad dress any problems with these stabilit y issues. The sub-region does not predict any stability issues that will impact reliability.

To mitigate catastrophic events, VACAR members use various options such as firm purchased power sources, excess reserve margins, membership in reserve sharing agreements, as well as fuel source diversity. Companies have also fo rmed Emergency Action Plans for Power System Disasters to provide a systematic and effective means of restoring power systems within the subregion. Members report that they have experien ced a drought and are expecting conditions to continue for the upcoming summer 2008 season. These conditions have caused substantial constraints on hydro operations. However, coupled with othe r resources, projected hydro generation and reservoir le vels are expected to be adequate to meet both normal and emergency energy demands for the 2008 summer. Members wi thin the sub-region ar e also monitoring drought conditions through studies to assess the e xpected severity and its impact on the system.

TPL-001 through TPL-004 are commonly studied throughout the sub-re gion. Companies implement these studies internally and coordina te externally with ne ighboring companies. Members report very little problems from the resu lts of the studies. Probl ems that were reported showed that companies needed to address line loadings (mitigated through operating guides) and line outages that will restrict units. Operating procedures are being put in place to address these issues so that reliability will not be impacted during the upcoming years. Improved SCADA systems with real-time analysis tools, small signal stability anal ysis tools, transient stability programs, static VAR compensators are all tools that are being evaluated and purchased within the sub-region to improve reliability. Members are individually evaluati ng plans to assess and limit short circuit levels. Various companies evaluate equipment design limits and use a variety of solution options such as equipment repl acements, system reconfigurations, and the installations of reactors to manage problemat ic locations. Programs are also implemented around the sub-region to a ddress aging infrastructure. Progra ms such as maintenance programs, transmission projects, asset management program s, and redundancy programs all help companies to assess their systems for improvement. The s ub-region also has individual guidelines for spare GSUs and autotransformers. Members use vari ous practices such as membership in spare equipment programs and replacement programs to address the issue.Regional Reliability Assessments

214 2008 Long-Term Reliability Assessment Region Description The SERC Region is a summer peaking region covering all or portions of 16 central and southeastern states. Owners, operators, and users of the bulk power system in these states cover an area of approximately 560,000 square miles. Th e SERC Reliability Corporation (SERC) is the regional entity for the region and is a nonpro fit corporation responsible for promoting and improving the reliability, adequacy, and critical infrastructure of the bulk power supply system. SERC membership includes 63 member entities c onsisting of publicly owned (federal, municipal and cooperative), investor owned operations. In the SERC Region there are 31 balancing authorities and over 200 registered entit ies under the NERC functional model.

SERC serves as a regional entity with dele gated authority from NERC for the purpose of proposing and enforcing reliabil ity standards within the SERC Region. SERC is divided geographically into five sub-regi ons that are identified as Central, Delta, Gateway, Southeastern, and VACAR. Additional information can be found on the SERC Web site ( www.serc1.org )Regional Reliability Assessments

215 2008 Long-Term Reliability Assessment SPP Highlights The annual net capacity margin for SPP is greater than the required 12 percent until the year 2014, where the margin drops to 11.5 percent. The resources internal and external to the SPP region that are needed to meet the required 12% capacity margin based on the 2013 forecast total 53,860 MW and 2,789 MW respectively. For the remaining years (2014 through 2017), SPP anticipates more resources will be qualified as certain and can be counted against capacity margin in the next few years.

These capacity margin projections include the effects of demand–side response programs, such as direct–control load management and in terruptible demand. Currently SPP does not have specific demand response program. However, according to SPP’s Strategic Plan, SPP has established a Center of Excelle nce (COE) to leverage collectiv e knowledge and provide member areas including conservation and efficiency (IRP, DSM). In the meantime, over the next ten years, interruptible demand relie f is expected to increase from 487 MW to 529 MW. Also, SPP anticipates that programs initiated by its state regulators, members and ot her parties coupled with an expansion of energy markets will bring Dema nd Resources to an increasing point of greater significance.

The SPP Transmission Expansion Plan 2008-2017 reported approximately $2.2 billion of transmission network upgrades for the years 2008 through 2017. Network upgrades identified in the near term four year horizon, approxima tely $762 Million, were approved by the SPP Board of Directors (BOD) with issued Notifications to Construct. They are specifically needed for reliability and these network upgrades have a financial commitment lead time falling inside the 2008 through 2011 four year commitment window. In addition to the STEP plan, SPP has also c onducted a EHV Overlay study. The objective of this study is to develop a long range strategic assessment of th e reliability, capacity and seams integration needs of the grid through the use of 345kV, 500kV and 765kV or higher transmission improvements. The study considered four design options to meet these objectives ranging from $6.9 Billion to $7.1 Billion. All these options eval uated the combination of 765 and/or 500-345 kV option.

SPP as a Planning Authority conducts various reliability assessments to co mply with NERC TPL standards and coordinate the mitigation effort with its members. Based on the studies performed, SPP is not anticipating any near-term or long-term reliability issues that have not addressed by any mitigation plan or local operating guides

The penetration of wind generation in the western half of SPP footprint could have a significant impact on operations due to the variable nature of this type of resource. SPP is in process of scoping wind integration and penetration study th at will help address market/operations and planning needs associated with additiona l wind development in the region.Regional Reliability Assessments

216 2008 Long-Term Reliability Assessment SPP - Summer Capacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30% 35%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

SPP - Projected On-Peak Capacity by Fuel-Mix

0 5,000 10,000 15,000 20,000 25,000

Gas Coal

D

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l F

u el H ydr o

U

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U

n know n Nuclear O i l

P

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e Wi n d OtherMW 2008

2017Regional Reliability Assessments

217 2008 Long-Term Reliability Assessment SPP Capacity vs Demand - Summer

30 35 40 45 50 55 60 65 70

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessments

218 2008 Long-Term Reliability Assessment SPP Self Assessment

Southwest Power Pool (SPP) continues to antic ipate consistent growth in demand and energy consumption over the next ten years. Significant generation capacity using uncommitted resources is forecasted in SPP to be availabl e throughout the planning horizon to meet native network load needs with committed generation resources meeting minimum capacity margins until 2014.

Demand According to the most recent data, the projected annual rate of growth for peak demand in the SPP region over the next ten years is 1.7 pe rcent, from 43,167 MW in 2008 to 50,640 MW in 2017. This is consistent to the 2007 LTRA ten–y ear (2007–2016) forecasted growth rate of 1.7 percent.

For the 2008–2017 timeframe, the projected annual ra te of growth for energy consumption in the SPP region is 1.5 percent, from 208,532 GWh in 2008 to 246,409 GWh in 2017. This is slightly less as compared to the previously forecasted growth rate of 1.8 percent.

Each SPP member annually provides a ten–year forecast of peak demand and net energy requirements. The forecasts are developed in ac cordance with generally recognized methods and in accordance with the following principles:

 Each member selects its own demand forecasti ng method and establishes its own forecast.

 Each member forecasts demand based on exp ected weather conditions. In the case of extreme weather, peak demand would be increased by approximately 2.9 percent.

 Methods used, factors considered, and assu mptions made are submitted along with the annual forecast to SPP.

 Economic, technological, sociological, demographi c, and any other sign ificant factors are considered when producing the forecast.

The resultant SPP forecast is the total of the member forecasts. High and low growth rates and unusual weather scenario bands are then produced for the SPP regional demand and energy forecasts. As such, SPP criteria require that members maintain a 12 percent capacity margin, unless their system is primarily hydro–based where th e required margin is lowered to 9 percent . This requirement ensures to cover any variation in th e load forecast along with maintaining resource adequacy within the SPP footprint.

Although actual demand is very dependent up on weather conditions and typically includes interruptible loads, forecasted net internal dema nds used for assessing net capacity margins are based on normal weather conditions and do not include interruptible loads.

These capacity margin projections include the effects of demand–side response programs, such as direct–control load management and in terruptible demand. Currently SPP does not haveRegional Reliability Assessments

219 2008 Long-Term Reliability Assessment specific demand response program. Howeve r, according to SPP’s Strategic Plan 174 , SPP has established a Center of Excelle nce (COE) to leverage collectiv e knowledge and provide member areas including conservation and efficiency (IRP, DSM). In the meantime, over the next ten years, interruptible demand re lief is expected to increase from 487 MW to 529 MW. Also, SPP anticipates that programs initiated by its state regulators, members and ot her parties coupled with an expansion of energy markets will bring Dema nd Resources to an increasing point of greater significance.

To quantify peak demand uncertainty and vari ability due to extreme weather, economic conditions, and other variables an analysis of our region has b een completed by the Bandwidth Working Group. The outcome of this report 175 supports the current pr edicted growth rates and allows for up to a 1.2 percent variation in curre nt and future predictions through the year 2012. SPP anticipates this trend will continue for the remaining study period.

Generation For the 2008-2017 assessment period, SPP projects it will have 47,151 MW towards Existing Certain Capacity; 9,892 MW Existing Uncertain Capacity; 5,849 MW Planned Capacity and 2,758 MW of Proposed Capacity res ources that are either in-service or are expected to be inservice. The Existing Certain Capacity amount por tions that are from va riable plants are 194 MW (Wind), 3,045 MW (Hydro), and 365 MW (Bio mass). Existing Uncertain Capacity amount portions that are from variable plants (mostly wind) is 976 MW. Planned Capacity for 2017 that are from variable plants (mostly wind) is 150 MW. At present, SPP relies on their members to submit the generation output (including variable) towards certain capacity based on the historical and the actual test data. This data gets routinely scrutinized by SPP staff for accuracy and an internal supply adequacy audit is conducted ev ery five years to verify and document all the historical as well as test data for all the resources.

Purchases and Sales A small portion of SPP’s capacity margin come s from the purchases from other regions. The transactions for the 2008-2017 assessment period are 2,149 MW (this is a ten year average) that is purchased from other regions. Based on a ten year average (2008- 2017), 1960 MW of these purchases are firm, and 189 MW is firm deliver y service from WECC ad ministered under Xcel Energy’s OATT. None of the purchase contra cts are Liquidated Damage Contracts.

SPP has a total of 1,550 MW of firm sales to regions external to SPP. None of the sales contracts are Liquidated Damage Contracts.

SPP members along with neighborin g entities like Entergy from the SERC region have formed a Reserve Sharing Group. The members of this gro up receive contingency re serve assistance from other SPP Reserve Sharing Group members. The SPP’s Operating Reliability Working Group will set the Minimum Daily Contingency Reserv e Requirement for the SPP Reserve Sharing Group. The SPP Reserve Sharing Group will mainta in a minimum first Contingency Reserve equal to the generating capacity of the largest unit scheduled to be on-line.

174 http://www.spp.org/s ection.asp?pageID=83
175 The Demand and Energy Bandwidth Report is located here ( http://www.spp.org/publications/BWG_Report_2003.pdf ).Regional Reliability Assessments

220 2008 Long-Term Reliability Assessment Fuel SPP monitors potential fuel supply limitations by consulting with its generation owning and controlling members at the beginning of each year . Presently, there are no known infrastructure issues which could affect fuel deliverability as SPP is blanketed by major pipelines and railroads to provide an adequate fuel s upply. In addition, coal and natura l gas power plants, which make up approximately 48% and 44% of total generation respectively, are required by SPP criteria to keep sufficient quantities of standby fuel in the case of deliverability issues. As previously stated, because hydro capacity is a small fraction of capacity for the region, run–of–river hydro issues brought about by extreme weather are al so not expected to be critical.

Transmission

The SPP Transmission Expansion Plan 2008-2017 176 reported approximately $2.2 billion of transmission network upgrades for the years 2008 through 2017. Network upgrades identified in the near term four year horizon, approxima tely $762 Million, were approved by the SPP Board of Directors (BOD) with issued Notifications to Construct. They are specifically needed for reliability and these network upgrades have a financial commitment lead time falling inside the 2008 through 2011 four year commitment window.

SPP is committed to perform all necessary analysis in an effort to determine need, cost, and benefits supporting the state re gulatory requirements of its me mbers which are necessary to substantiate funding of each member share of identified network upgrad e cost responsibility.

The following pie chart summarizes the near-t erm network upgrades in SPP Footprint:

176 http://www.spp.org/publicati ons/2007%20SPP%20Transmission%20Expa nsion%20Plan%2020080131_BOD_Public.pdf 

### Near-Term Network Upgrade Breakdown Total $762 Million

Transformers 22% Caps/Reactive Device 5% New Lines 40% Line Rebuild/ Upgrades 24%

Substation Upgrade 2% Voltage Conversion 7%

Line Rebuild/ Upgrades New Lines Voltage Conversion Substation Upgrade Transformers Caps/Reactive DeviceRegional Reliability Assessments

221 2008 Long-Term Reliability Assessment The specific list of these networ k upgrades (transmission lines a nd transformers) is included in the NERC master list of upgrades.

In addition to the STEP, SPP has recently co mpleted an updated EHV Overlay Study in the beginning of 2008.

The objective of the SPP EHV Overlay Study is to develop a long range strategic assessment of the reliability, capacity and seams integration needs of the grid through the us e of 345kV, 500kV and 765kV or higher transmission improvements. The study was updated to evaluate the effect of intensifying wind development activity in portions of the SPP system on the EHV recommendation that was developed in the prev ious EHV Overlay Study conducted in the spring of 2007. This updated EHV Overlay Study also inco rporated recent deci sions regarding the development of certain lines in the western portion of the SPP X-plan

The study considered four design options to meet these objectiv es ranging from $6.9 Billion to $7.1 Billion. All these options evaluated the co mbination of 765 and/or 500-345 kV option. It was determined that all of th e designs provide SPP, its member s and its stakeholders improved reliability for the SPP electric system while providing the ability to be a key provider of renewable energy for the Easter n Interconnection. All designs are flexible and allow for alternative interconnections to the east and for the wind colle ctor system based upon cost, summer peak performance, export capability and losses, “Mid Po int Design 2” and “Mid Point Design 4” were the top two performing options. Bo th terminate at the same substations for the EHV Overlay loop. The details of this study results can be found in the final study report which is available on SPP website. 177

Operational Issues The penetration of wind generation in the western half of SPP footprint could have a significant impact on operations due to the variable nature of this type of resource. There are currently several avenues being explored to provide transmission outlets for this energy during the next ten years such as the EHV overlay or facilities re sulting from the Joint C oordinated System Plan (JCSP). However, the operational impacts to regulation and control performance that the variable generation will cause are still unknown. As the penetration rate of variable generation grows, further study will be required to mitigate any issues that arise. SPP is in process of scoping wind integration and penetration studies that will help address market/operations and planning needs associated with additiona l wind development in the region.

At this time, there are no known existing or upcoming environmental or regulatory restrictions that are thought to cause any impact to reli ability. SPP has a substantially diverse mix of generation capacity and a sufficien t expected capacity margin such that no reliability impacts are foreseen.

Reliability Assessment Analysis For the 2008–2017 assessment period, the current EIA–411 data indicates that SPP members maintain a 14.1 percent net capacity margin in 2008 down, and th is margin will decrease to 8.1%

177 http://www.spp.org/publications/Quanta_Technology_March_2_2008_Update _to_the_EHV_Study_Final_Report.pdfRegional Reliability Assessments

222 2008 Long-Term Reliability Assessment percent in 2017. Based on the Ba ndwidth Working group report, SPP’s load may vary by approximately 1.2% due to a 90/10 type of weather scenario. As mentioned before, SPP requires each member to maintain 12% capacity margin and this will address the 90/10 weather scenario. On the whole, the annual net capac ity margin for SPP is greater th an the required 12 percent until the year 2014, where the margin drops to 11.5 percen t. The resources internal and external to the SPP region that are needed to m eet the required 12% capacity ma rgin based on the 2013 forecast total 53,860 MW and 2,789 MW respectively. For the remaining years (2014 through 2017) SPP anticipates more resources will be qualified as certain and can be counted against capacity margin in the next few years.

SPP defines firm deliverability as electric power intended to be continuously available to the buyer even under adverse conditions; i.e., power fo r which the seller assumes the obligation to provide capacity (including SPP defined capacity margin) and energy. Such power must meet standards of reliability and availability as th at delivered to native load customers. Power purchased can be considered to be firm power only if firm transmission service is in place to the load serving member for delivery of such power . SPP does not include fi nancial firm contracts towards this category

There are no significant deliverability problems e xpected due to transmission limitation at this time on the SPP system, However, on June 17, 2008, the western portion of the SPP footprint has experienced a system distur bance that resulted in loss of 600 MW load. In addition, SPP’s EIS market continues to experien ce price differentials between eastern and western portion of the SPP system. SPP will continue to closely monito r the western portion of the system through the Flowgate assessment analysis. The flowgate anal ysis validates the list of flowgates that SPP monitors on a short term basis using various scenario models developed by the SPP Staff. These scenario models reflect all the potential transacti ons in various directions being requested on SPP system. The results of this study are review ed and approved by SPP’s Transmission Working Group prior to summer and wi nter of each study year.

Also, SPP periodically conducts Loss-of-Load Expectation a nd Expected Unserved Energy study. The preliminary results of the ongoing study triggers additional assessment for the western portion of SPP system that includes a sensitivity of wind penetration. The fina l study is expected to be completed by end of 2008. Historically, SPP has adhered to a 12% regional capacity margin to ensure the minimum LOLE of 1 day in 10 years is met. Presently the 12% capacity margin requirement (both short-term and long-term) is checked annually in the EIA-411 reporting as well as through suppl y adequacy audits of regional members. The last supply adequacy audit was conducted in 2007 and th e subsequent audit is scheduled in 2012.

SPP develops an annual SPP Transmission Expans ion Plan (STEP) with regional group of projects to address regional re liability needs for the next 10 years (2008 through 2017). The latest STEP that was approved by SPP Board of Directors is availabl e on SPP website. During the STEP process, SPP also performs a dynamic st ability analysis. The latest dynamic study that was completed for the 2008 operating conditions did not indicate any dynamic stability issues for the SPP region. In addition, SPP also performs an annual review of reactive reserve requirements for load pockets within the region . Currently, SPP does not have specific criteria for maintaining minimum dynamic reactive require ment or transient vol tage dip criteria.Regional Reliability Assessments

223 2008 Long-Term Reliability Assessment However, according to reactive requirement study scope, which is completed as a STEP process, each load pocket or constrained area was studied to determine the available reactive reserve margin in the SPP transmission system during possible severe contingencies. This study assumes typical P-V curve characteristic where possible voltage collapse is studied when the voltage on the key buses start declining below 90%. The annual STEP process conducted by SPP did not indicate dynamic and static reactive power limited areas on the bulk power system.

SPP has an under-voltage load shedding (UVLS) pr ogram in the western Ar kansas area within the AEP-West footprint. This program targets about 180 MW of load shed during the peak summer conditions to protect bulk power system against under-voltage events.

The significant changes from last years LTRA in cludes the SPP capacity margin 12% forecasted to fall below the target level in 2013. This was forecasted not to happen until 2016 in the 2007 LTRA due to the fact that more capacity was considered to calculate capacity margin. SPP members have adjusted their forecast based on the new definition of Certain capacity this year that results into a decrease in capacity margin during 2013 and beyond. However, in the next few years, SPP anticipates a sign ificant portion of wi nd capacity to be added in the SPP footprint in the western part of the f ootprint. Although these are predominantly energy only resources and only a small portion (0 -20%) of this capacity will be counted as Certain based on the historical trend, it would be sufficient to meet SPP’s capacity margin requirement. There are no major unit retirements that are planned within the next ten years.

Due to the diverse generation portfolio in SPP, there is no concern of the fuel supply being affected by the extremes of summer weather duri ng peak conditions. If th ere is to be a fuel shortage, it is communicated to SPP operations sta ff, in advance, so that they can take the appropriate measures SPP would assess if capacity or reserves would become insufficient due to the unavailable generation. If so, SPP would decl are either EEA (Energy Emergency Alert) or OEC (Other Extreme Contingency) and post as needed on the RCIS (Re liability Coordinator Information System). SPP does not conduct operatio n planning study to eval uate the extreme hot weather condition. The current capacity margin crit eria are intended to address the load forecast uncertainty.

Energy only, uncommitted resources and transm ission–limited resources are not used in calculating net capacity margin. As previously stat ed, the EIA–411 data does not in clude the 9,892 MW of uncommitted resources that are lo cated within the SPP f ootprint. These are reflected in the total potential resources capacity margin which is considerably greater than the net capacity margin. SPP staff coordinates the speci fic short circuit level with its members as they maintain all the latest data for the asse ssment period. SPP is in a process of developing a coordinated short circuit model in the later half of 2008 so that these studies can be conducted on a regional basis. There are no reliability imp acts that have been addressed due to aging infrastructure and at this time SPP does not have any guideline for on-site, spare-generator stepup (GSU) and auto transformers.Regional Reliability Assessments

224 2008 Long-Term Reliability Assessment SPP as a Planning Authority conducts various reliab ility assessments to co mply with NERC TPL standards:

• TPL-001 - SPP Model Development Working Gr oup (MDWG) ensures that all thermal and voltage violation addresses du ring Base Case development.

• TPL-002 - Using the SPP MDWG Models, Near and Long Term Analysis are performed by SPP staff.

• TPL-003 - SPP members submit selected N-2 contingencies that are evaluated by SPP staff.

• TPL-004 - SPP periodically conduct s reactive reserve and stabil ity study that addresses the key requirement in this standard. Based on the studies performed, SPP is not anticip ating any near-term or long-term reliability issues that have not addressed by any m itigation plan or local operating guides.

SPP has been proactive in addressing aging workfo rce issue in the utility industry. Since last year, SPP has sponsored a new gradua te level course in Electric Po wer System at the University of Arkansas, Little Rock. This course focuses on the power system fundamentals with a final project targeting current industry issue. The students at the univer sity along with SPP employees new to the power system concepts are encouraged to take this course. Al so, SPP has initiated an “Engineer In Training” program in 2007. This 18 month program targets top performing students in local universities and have them rotated in various functional areas before permanent placement and assigned with specific role.

Region Description

Southwest Power Pool (SPP) region covers a geographic area of 255,000 square miles and has members in eight states: Arkansas, Kansas, Louisiana, Mississippi, Mi ssouri, New Mexico, Oklahoma, and Texas. SPP manages transmission in seven of those stat es. SPP’s footprint includes 17 balancing authorities and 40,364 miles of transmission lines. SPP has 50 members that serve over 4.5 million customers. SPP’s membership consists of 13 investor

– owned utilities, 11 generation and transmission cooperatives, 11 pow er marketers, 7 m unicipal systems, 3 independent power producers, 2 state authoriti es, and 2 independent transmission companies. Additional information can be found on the SPP Web site ( www.spp.org ).Regional Reliability Assessments

225 2008 Long-Term Reliability Assessment WECC Highlights

• WECC loads are growing — th e projected 2008 summer total internal demand of 162,052 MW is expected to increase by about 2.0 percent per year to 193,530 MW in 2017.

• Planning reserve margin targets (target margins) used for this report were developed using a Building Block method. These target margins ranged between 10 and 16%, with a WECC overall average of 13.7% (sum mer) and 12.6% (winter). The equivalent capacity margins are 12.1% and 11.2%, respectively. By 2017, reserve margins for the majority of the WECC subregions are below target margins, when using the existing plus planned resource or ad justed potential resource mix.

• The WECC target margins are in addition to serving the total load (both firm and non-firm loads).

• Neither the summer nor the winter analysis fo r the Northwest subregion fully captures the limitations on the ability of the Northwest hydro system to sustain output levels beyond a single hour.

• Resource surpluses or deficits, aggregated in to several WECC subregions (four U.S., one Canadian and one Mexican), are re ported in graphs comparing lo ads with existing plus future resources. Descriptions of the classes of re sources are provided in the generation section, Class 4 is highlighted here because it contains resources that had been identified as having been approved by corporate management or in a company’s capital budget but did not meet WECC’s criteria for “Planned”, but Class 4 resources may meet a section of the NERC criteria for being “Planned” resources.

• The summer peak MW amounts of each of th e five classes and the existing certain

resources 178 (existing resources), are summ arized in the following table:

Existing Resources “Planned” Resources “Proposed” Resources Adjusted Proposed Resources
As of 12/31/2007 Class 1 Class 2 Class 3 Cla ss 4 Class 5 Class 4 Class 5

194,836 8,146 713 2,582 7,286 7,425 0 0 (Summer Rating) Total Planned = 11,441 MW Proposed = 14,711 MW Adj. Proposed = 0 MW

The Proposed resources or the Adjusted Propos ed resources would be in addition to the Existing and Planned resources.

• There are several Class 4 and 5 (Proposed) proj ects that are short lead projects (primarily wind generation projects), that require only a short time for construc tion. These projects could contribute to serving loads sooner than their classification woul d indicate, which would increase the margins of the respective subregion(s).

• Diversity exchange transfers among subregions , as constrained by de rated transmission, are assumed to meet deficits against the target margins. These transfers were submitted to NERC as Expected 179 transactions and were derived from WECC’s draft 2008 Power Supply

178 NERC definition – See Appendix III Capacity and Demand Definitions
179 NERC definition – See Appendix III Capacity and Demand DefinitionsRegional Reliability Assessments

226 2008 Long-Term Reliability Assessment Assessment (PSA). The net capacity resources line in the margin graphics includes these transfers and transmission modeled losses.

• This analysis does not include the “Proposed” re sources other than to reflect the quantity in the “Total Potential Resources” line in the marg in graphics and some tables. This approach was taken as the regulatory and financial status of these project s is not known at this time. WECC intends this representation to highlight the importance of investment in the future. Resources, either currently identified or unknown, need to move deliberately into development as deficits approach and as project development timelines dictate.

• When only considering “planned” resources and transfers, the Northwestern Power Pool - Canada subregion goes below the WECC developed target margin for that subregion, as early as the winter of 2009-2010. One of the NWPP-C N provinces has indicated that there are several short lead projects that have been classified by WECC as class 4 or 5 that are scheduled to be in-service by the winter of 2009-2010. It is anticipated that with those projects the NWPP-CN margin will be close to the target margin for that subregion.

• By the summer of 2017, the difference between WECC’s Net Capacity Resources (202,379 MW) and WECC’s Total Inte rnal Load (193,530 MW) would be 8,849 MW (4.6% reserve margin), if there were no transmission cons traints. This would be 17,054 MW below the desired target margin. This included serving 4,898 MW of Demand-Side-Management (DSM) load. If the DSM load were not to be serv ed it would result in a 7.3% reserve margin. When looking at subregions, or a region overall, it may be a concern to only consider the Net Internal Demand (Total Internal Demand mi nus DSM programs) when determining margins, because the DSM programs are generally not sharable between balancing authorities, subregions or regions, some have a limited nu mber of times they can be called upon and some can only be called upon during a declared emergency.

• Margin results from the PSA were used to derive expected inter-subregion transfers. In the PSA, conservative transmission limits were placed on paths between the 26 PSA load groupings (bubbles) and were observed when calcu lating the transfers between these bubbles. The aggregation of PSA load bubbles in to LTRA reporting subregions may obscure differences in adequacy or deliverability betw een bubbles in the subregion. Deficits below planning reserve targets (while serving total load) begin to em erge toward the end of this decade. Including Classes 1 through 3, summer electricity supply shortages relative to planning summer reserve targets could occur as early as 2010 in the desert southwest, and Mexico area and winter electricity supply s hortages relative to planning winter reserve targets could occur as early as 2009-2010 in Canada as mentioned above.

• The analysis is based on loads and resources data submitted in December 2007 and February 2008. The reported data was “l ocked” on March 31, 2008, and pr oject changes reported to WECC after the data was locked were not includ ed in the studies. For instance, it does not appear that the two Holcomb coal plants that were reported by WACM will be constructed by the time reported. However, this was learned after the data was locked and the effects of the Holcomb units can be seen in the RMPA area. Salt River Project in the AZ-NM-SNV subregion has announced plans for several natu ral gas generating units, but these additions were announced after the data was locked and were therefore not incl uded in this study, in order to be consistent with other st udies that are being performed.Regional Reliability Assessments

227 2008 Long-Term Reliability Assessment WECC - Summer Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

WECC - Projected On-Peak Capacity by Fuel-Mix

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000

G as H yd

r o C oal

Dua l Fuel Nuclear

P

u m

ped S t o

r age Geothermal W i nd Oi l O therMW 2008

2017Regional Reliability Assessments

228 2008 Long-Term Reliability Assessment WECC-US - Summer Capacity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources
Total Potential Resources

WECC US Capacity vs Demand - Summer

90 100 110 120 130 140 150 160 170 180 190

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessments

229 2008 Long-Term Reliability Assessment WECC-Canada - Winter Capacity Margin Comparison

-20% -15% -10%

-5% 0% 5% 10% 15% 20% 25% 30%

2008/09 2009/10 20 1 0/11 201 1/12 201 2/13 2013/ 14 2014/ 15 2015/ 16 2016/ 17 2017/ 1 8Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

WECC CANADA Capacity vs Demand - Winter

10 15 20 25 30

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016Thousands of MW Historic Demand

High Demand Projection

Low Demand Projection

Adjusted Potential Resources

Net Capacity ResourcesRegional Reliability Assessments

230 2008 Long-Term Reliability Assessment WECC-AZ-NM-SNV - Summer Capacity Margin Comparison

-10%

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

WECC-CA-MX US - Summer Ca pacity Margin Comparison

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

231 2008 Long-Term Reliability Assessment WECC-NWPP US - Winter Cap acity Margin Comparison

0% 5% 10% 15% 20% 25% 30%

2008/ 0 9 2009/ 1 0

2 01

0/

1 1 201 1/

1 2 201 2/

1 3 2013/1 4 2014/1 5 2015/1 6 2016/1 7 2017/18Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential Resources

WECC-RMPA - Summer Capacity Margin Comparison

-15% -10%

-5% 0% 5% 10% 15% 20% 25% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

232 2008 Long-Term Reliability Assessment WECC CA-MX Mex - Summer Ca pacity Margin Comparison

-60% -50% -40% -30% -20% -10%

0% 10% 20% 30%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Margin (%)

Region/Subregion Target Margin Existing Certain Net Capacity Resources Adjusted Potential Resources Total Potential ResourcesRegional Reliability Assessments

233 2008 Long-Term Reliability Assessment WECC Self-Assessment

Peak Demand Total actual internal demand decreased by 1.8 pe rcent from 2006 to 2007. Summer temperatures in 2006 were much warmer than normal and su mmer temperatures in 2007, were generally normal to somewhat above normal. The projec ted aggregate WECC 2008 summer total internal demand is forecast to be 162,052 MW (U.S. systems 142,032 MW, Canadian systems 17,907 MW, and Mexican system 2,223 MW) which is an expected 2.45 percent increase from the 2007 actual demand of 158,178 MW. The anticipated rate of growth for the long term is essentially unchanged changed from last year. The summer tota l internal demand is expected to increase by about 2.0 percent per year fo r the 2008-2017 timeframe which is the same as the 2.0 percent projected last year for the 2007-2016 period.

SUMMER PEAK GROWTHS
WECC WECC US WECC CN WECC MX 2007 Actual 158,178 139,389 17,265 2,153 2008 Projected 162,052 142,032 17,907 2,223
Growth % 2.45% 1.90% 3.72% 3.25% 2017 Projected 193,530 167,661 22,489 3,598

2008 – 2017 Growth % 1.99% 1.86% 2.56% 5.50%

WECC specifically directs its bala ncing authorities (BAs) to submit forecasts with a 1 year in 2 probability of occurrence; most of the entit ies based their forecasts on population growth, economic conditions and normalized weather such that there is a 50% probability of exceeding the forecast (i.e., 1 in 2). WECC has not establ ished a quantitative analyses process for assessing the variability in projected demands due to the economy.

The internal peak demand forecasts presented here are a non-coincident sum of the forecasted demands from WECC’s 35 BAs. Comparisons with hourly demand data indicate that WECC non-coincident peak demands generally exceed coincident peak demands by two to four percent. The entities within the Balancing Authorities us e various peak forecasting methods that range from not making any weather or economic assumpti ons (due to having a statutory load obligation with zero load growth) to using a combinatio n of the EPRI developed Residential End-Use Energy Planning System (REEPS) and the Comm ercial End-Use Model (COMMEND) model to forecast the commercial sector energy demand s by end-use and then using an econometric method by major Standard Industrial Classifica tion codes. Some of the BAs used linear regression techniques with a historical multi-year database to develop the winter and summer season peak forecasts.Regional Reliability Assessments

234 2008 Long-Term Reliability Assessment Several of the entities use various weather scenario s (i.e., 1 year in 5, 1 y ear in 10 conditions) for other internal planning purposes. Econometric models used by various entities within the Western Interconnection, consid er rate effects, average area population income, etc.

Within the WECC region and its subregions there is a mixture of demand response programs. Demand response programs have several different t ypes but they usually fall into two categories: 1) Passive DSM programs such as encouragin g end-users, through economic incentives, high efficiency lighting, heat pumps, and water heaters as well as home insulation improvements and in some cases the planting of shade trees whic h help manage demand and energy growth in commercial and residential areas; 2) Active DSM pr ograms. A key difference in some of these programs is whether the program is dispatchable by the BA. Dispatchable programs, such as direct control, interruptible tariffs, or dema nd bidding programs, have triggering conditions and are not under the control of the customer and ca nnot be anticipated by th e customer. WECC has historically only gathered data on these traditional Demand Side Management (DSM) programs (Dispatchable Load Management air conditioners etc. and interruptible loads). For the 2008 LTRA, WECC requested further in formation on DSM programs from the BAs, if applicable. The various dispatch operator direct controlle d programs reported are la rgely: interruptible demand and direct control load management (air conditioning management), some of which have specific criteria that must be met prior to be called upon. There are also other DSM programs i.e., critical peak pricing, demand bidding and othe rs that are customer activated after receiving some form of notification from a control center.

The total WECC internal demand forecast includes demand response and interruptible loads that range from 4,107 MW in 2008 to 4,898 MW by 2017. The direct control demand-side management capability is located mostly in Ca lifornia (3,281 MW), but the other subregions’ DSM programs are increasing. Much of the demand response in WECC is based on air conditioner cycling programs. Interruptible lo ad programs are more focused on large water pumping operations and large commer cial operations such as mining.

Generation

WECC’s resource data excludes non-metered self-generation and expected wind and hydro limitations. The data for the LTRA is provided by all of the balancing authorities within the Western Interconnection and is processed by WECC’s Staff under the direction of WECC’s Loads and Resources Subcommittee (LRS).

This year NERC redefined its re source classifications as shown in the Capacity & Demand Definitions section in the back of this documen t. As mentioned in earlier, WECC’s LRS chose to classify the future capacity resources into fi ve classes that help provide greater definition and granularity, instead of NERC’s two classifications (Planned and Proposed). The five class definitions are to be used in both WECC’s Self-Assessment for this LTRA and the Power Supply Assessment (PSA) analyses. The class descript ions and using January 1, 2008 as the starting point, the 2017 megawatt totals for each class are:

Class 1: Under active cons truction and projected in service by Jan. 2012 (8,146 MW).Regional Reliability Assessments

235 2008 Long-Term Reliability Assessment

Class 2: All regulatory pe rmits approved and Interconn ection agreement signed and projected to be on-line by Jan. 2014 (713 MW). Class 3: At least under regulatory review and at least facility study done and interconnection agreement in active negotiation and proj ected to be on-line by Jan. 2014 (2,582 MW). Class 4: All other resources th at meet NERC criteria for “P lanned” resources. This is intended to capture those “Planned” res ources that qualify only through meeting the management approval criterion, whic h LRS does not believe carries a similar degree of commitment or likel y construction outcome as th e other criteria in the “Planned” category (7,286 MW). Class 5: All other resources that meet NERC criteria for “Proposed” resources (7,425 MW).

“Planned” Resources “Proposed” Resources
Class 1 Class 2 Class 3 Class 4 Class 5 8,146 713 2,582 7,286 7,425
Total Planned = 11,441 MW Proposed = 14,711 MW

The following four tables reflect the WECC ex isting and “Planned” resources by generation classification and subregion, for the study period for the both non-derated capacity and summer on-peak capacity.

EXISTING RESOURCES

AS OF 12/31/2007 SUMMER RATINGS - NON DERATED - NORTHWEST POWER POOL AREA ROCKY MOUNTAIN POWER AREA ARIZONA NEW MEXICO SO. NEVADA POWER AREA CALIFORNIA MEXICO POWER AREA WECC TOTAL PERCENT OF TOTAL
HYDRO - CONV. & PUMPED 49,126 1,426 4,700 14,008 69,260 30.2% THERMAL 33,757 11,307 30,990 44,343 120,397 2.5% NUCLEAR 1,150 0 3,872 4,530 9,552 17.1% GEOTHERMAL 180 0 450 2,255 2,885 1.4% INTERNAL COMBUSTION 211 253 0 49 513 0.2% BIOMASS 639 2 58 1,120 1,819 0.9% SOLAR 0 8 49 458 515 0.2% WIND 3,243 662 295 2,374 6,574 3.1% OTHER 174 0 53 535 762 0.4% TOTAL 88,480 13,658 40,467 69,672 212,277 100.0% PERCENT OF WECC TOTAL 41.7% 6.4% 19.1% 32.8% 100.0%

EXISTING RESOURCES

AS OF 12/31/2007 SUMMER PEAK RATING NORTHWEST POWER POOL AREA ROCKY MOUNTAIN POWER AREA ARIZONA NEW MEXICO SO. NEVADA POWER AREA CALIFORNIA MEXICO POWER AREA WECC TOTAL PERCENT OF TOTAL
HYDRO - CONV. & PUMPED 43,160 1,310 4,070 12,787 61,327 31.5% THERMAL 33,757 11,307 30,990 41,484 117,538 60.3% NUCLEAR 1,150 0 3,872 4,466 9,488 4.9% GEOTHERMAL 180 0 450 1,876 2,506 1.3% INTERNAL COMBUSTION 211 253 0 27 491 0.3% BIOMASS 639 2 58 570 1,269 0.7% SOLAR 0 4 49 347 400 0.2% WIND 596 80 1 490 1,167 0.6% OTHER 174 0 53 423 650 0.3% TOTAL 79,867 12,956 39,543 62,470 194,836 100.0% PERCENT OF WECC TOTAL 41.0% 6.6% 20.3% 32.1% 100.0% WECC has 194,836 MW of Existing Certain re sources as of 12/31/2007, including the anticipated summer on-peak va lues (de-rated) of approxima tely 1,167 MW from wind, 400 MW from solar, 1,269 MW from biomass and 61,3 27 MW of hydro (56,646 MW of conventional hydro, 4,681 MW of pumped storage hydro). The Existing Uncertain 180 resources for 2008 are

180 See Capacity, Demand & Event Definitions Section of this reportRegional Reliability Assessments

236 2008 Long-Term Reliability Assessment 5,407 MW of wind, 115 MW of solar, 550 MW of biomass, 7,933 MW of hydro (7,369 MW of conventional hydro, 564 MW of pumped storage hydro) and 2,472 MW of i noperable for a total of 16,477 MW. The non-derated values for the existing variable resources can be seen above.

FUTURE "PLANNED" RESOURCES NON-DERATED RATING NORTHWEST POWER POOL AREA ROCKY MOUNTAIN POWER AREA ARIZONA NEW MEXICO SO. NEVADA POWER AREA CALIFORNIA MEXICO POWER AREA WECC TOTAL PERCENT OF TOTAL
HYDRO - CONV. & PUMPED 1,416 0 0 97 1,513 11.0% THERMAL 1,902 2,111 1,952 2,684 8,649 62.9% NUCLEAR 0 07 1 07 1 0

. 5 % GEOTHERMAL 156 0 0 107 263 1.9% INTERNAL COMBUSTION -44 112 0 118 186 1.4% BIOMASS 96 4 56 50 206 1.5% SOLAR 0 02 8 0 02 8 0 2

. 0 % WIND 1,566 449 0 566 2,581 18.8% OTHER 0 0 0 1 10

. 0 % TOTAL 5,092 2,676 2,359 3,623 13,750 100.0% PERCENT OF WECC TOTAL 37.0% 19.5% 17.2% 26.3% 100.0%

FUTURE "PLANNED" RESOURCES SUMMER PEAK RATING NORTHWEST POWER POOL AREA ROCKY MOUNTAIN POWER AREA ARIZONA NEW MEXICO SO. NEVADA POWER AREA CALIFORNIA MEXICO POWER AREA WECC TOTAL PERCENT OF TOTAL
HYDRO - CONV. & PUMPED 1,416 0 0 200 1,616 14.1% THERMAL 1,902 2,111 1,952 2,438 8,403 73.4% NUCLEAR 0 07 1 07 1 0

. 6 % GEOTHERMAL 156 0 0 107 263 2.3% INTERNAL COMBUSTION -44 112 0 113 181 1.6% BIOMASS 96 4 56 39 195 1.7% SOLAR 0 02 8 0 02 8 0 2

. 4 % WIND 250 56 0 125 431 3.8% OTHER 0 0 0 1 10

. 0 % TOTAL 3,776 2,283 2,359 3,023 11,441 100.0% PERCENT OF WECC TOTAL 33.0% 20.0% 20.6% 26.4% 100.0% In the above two Planned tables it should be noted that in some resources the non-derated value did not increase as much as the summer peak rating. This can be due to a Planned action taking place on an existing resource, such as a reduction to the summer de -rates. A negative value in the summer peak rating table may be due to de ratings of existing units or the mothballing or retirement of a unit.

The Planned capacity resources (Classes 1 through 3) projected to be in-ser vice by the end of this assessment period is 11,441 MW. Included in that value are 431 MW of wind, 280 MW of solar, 195 MW of biomass and 1,616 MW of hydro. The non-de rated values for these can also be seen in the above tables.

WECC is using its defined “Planned” resour ces (11,441 MW) in its PSA as the basis for determining the expected transfers used in this LTRA to reflect diversity exchanges. Classes 4 and 5 (14,711 MW) resources are co nsidered “Proposed” resources but are reduced to zero when a zero percent confidence factor a ssigned to them. They appear in the graphics in the Total “Potential” line but are reduced to the “Adjusted Potential” line when the confidence factor is applied.

When analyzing the entire WECC, there are vari ous items that may misr epresent the actual condition or resource adequacy. Two of the primary items are:

1) Neither the summer nor the winter analysis fo r the Northwest sub-region fully captures the limitations on the ability of the Northwest hydro system to sustain output levels beyond a single hour. Because of this limitati on, the reported surpluses, both to meetRegional Reliability Assessments

237 2008 Long-Term Reliability Assessment Northwest load and for poten tial export to other subreg ions of the West, may be unrealistically high. 2) Looking at the Net Internal Demand (Total Demand minus Demand Side Management (DSM) programs) of WECC, when DSM program s are not sharable between the various subregions and in some cases not even within the subregion. The graphics below only considers the Net Internal Demand when initially calculating the quantity of capacity that should be above the total demand.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

## WECC TOTAL AREA
SUMMER RESERVE MARGINS

Reserve Target Margin = 13.7% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% NORTHWEST POWER POOL - U.S.
WINTER RESERVE MARGINS

Reserve Target Margin = 14.7% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% NORTHWEST POWER POOL - CANADA
WINTER RESERVE MARGINS

Reserve Target Margin = 13.2% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line.Regional Reliability Assessments

238 2008 Long-Term Reliability Assessment 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ROCKY MOUNTAIN POWER AREA
SUMMER RESERVE MARGINS

Reserve Target Margin = 11.8% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below. -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ARIZONA - NEW MEXICO - SO. NEVADA
SUMMER RESERVE MARGINS

Reserve Target Margin = 13.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CALIFORNIA - MEXICO - (U.S.)
SUMMER RESERVE MARGINS

Reserve Target Margin = 15.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below. -30.0% -20.0% -10.0%

0.0% 10.0% 20.0% 30.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CALIFORNIA - MEXICO - (MEXICO)
SUMMER RESERVE MARGINS

Reserve Target Margin = 14.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below.

Note: These graphics reflect assumptions that are highly sensitive related to: Assignment of resources to class; Renewable energy resource derates or limitations; Inter-su bregion diversity exchanges or power transfers; and the ability to share Demand Side Management programs betwee n Balancing Authorities. Changes in these inputs may affect the results significantly.

Chart 1—Summer Reserve Margins: WECC Region. Chart 2—Winter Reserve Margins; Northwest Powe r Pool (NWPP) (both the U.S. and Canada) Chart 3—Winter Reserve Margins; Northwes t Power Pool (NWPP-CN) (Canada only) Chart 4—Reserve Margin: Rocky Mountain Power Area (RMPA) Chart 5—Reserve Margin: Desert Southwes t Area (DSWA) or Arizona-New Mexico-So. Nevada (AZ-NM-SNV) Chart 6—Reserve Margin: California-Mexico To tal Area (CAMX) (both the U.S. and Mexico) Chart 7—Reserve Margin: California- México (México) Area (CAMX-MX)

The graphics above and throughou t the rest of the WECC self assessment are shown using reserve margins versus the NERC graphics (aft er the WECC highlights) which uses capacity margins. The difference of reserve margins vers us capacity margins is the denominator. Both the reserve and capacity margins usually have th e same numerator (the sum of the net capacity resources (including transfers) minus the net demand), but for th e reserve margin you divide the numerator by the net demand versus dividing by the net capacity resources for the capacity margin. WECC used the total demand instead of the net demand due to concerns of sharability of DSM programs as mentioned earlier. Because the targeted capacity w ill be bigger than theRegional Reliability Assessments

239 2008 Long-Term Reliability Assessment load, the capacity margin calculation will give a smaller percentage value than the reserve margin for the same MW value as seen in the Table of Targ et/Planning Margins.

Table of Target Margins



### WECC WECC-US NWPP NWPP-CN NWPP-US RMPA AS-NM-SNV CAMX CAMX-US CAMX-MX Summer Reserve Margin 13.73% 14.03% 13.52% 13.52% 11.31% 11.76% 13.27% 15.28% 15.28% 14.25% Summer Capacity Margin 12.07% 12.30% 11.91% 11.91% 10.16% 10.53% 11.72% 13.25% 13.25% 12.47%

Winter Reserve Margin 12.92% 12.89% 14.20% 14.69% 13.24% 13.36% 12.77% 11.04% 11.06% 10.35% Winter Capacity Margin 11.44% 11.42% 12.44% 12.81% 11.69% 11.79% 11.32% 9.94% 9.96% 9.38%

Example: In July of 2008, the DSWA projected Net Load is 30,996 MW and a Total Load of 31,551MW therefore the required Reserve margin then would be: Typical Reserve Margin target method: Apply Reserve Margin %: 13.27% 30,996 x = 4,113 MW Calculate Target Capacity desired: 30,996 4,113 + = 35,109 MW Typical Capacity Margin method: Capacity Margin: (35109 - 30996) / (35109) = 11.71% WECC Reserve Margin Target Method: Apply Reserve Margin %: 13.27% 30,996 x = 4,113 MW (based on net demand) except California Calculate Target Capacity desired for WECC (serving total load): 31,551 4,113 + = 35,664 MW Recalculated reserve margin percent (reserve plus total load): (35664 - 30996) / (35664) = 13.09% Note: On some of the graphics it may be seen that the calculated reserve margin may be parallel but slightly less than the Targ et Margin, this is due to the above difference. For the California-Mexico subregion, the reserve margin % was applied to the total load. Summary of Target Margins

The “Target” reserve margins in the above table, are derived fr om the Planning Reserve Margins that are used in WECC’s Power Supply Assessment (PSA). The PSA uses a “building block” method for developing Planning Reserve Margin s. The building block approach has four elements: contingency reserves, regulating reserves, reserves fo r additional forced outages, and reserves for 1-in-10 weather events. The bu ilding block values were developed for each balancing authority and then aggregated by subr egions and the entire WECC for the PSA and this LTRA analysis. The aggregated summer s eason Planning Reserve Ma rgin (not Capacity Margin) for WECC was 13.73% as calculated fo r the 2008 PSA. This reserve margin maybe lower or higher than some of the state, provincial or Load Serving Entity (LSE) requirements within WECC, but was developed specifica lly for use in the PSA and LTRA.

In the above graphs, the “Net Capacity Reso urces” margin line equals the sum of Planned resources (Classes 1, 2 and 3) plus the Existing Certain resources plus the net transfers of both firm and Expected transfers. The “Total Pote ntial Resource” line equals the sum of the Net Capacity Resources plus the Ex isting Uncertain Capacity (col d standby/mothballed units, etc.) plus “Proposed Capacity” (Classes 4 and5). The “Adjusted Potential Resour ces” line equals the formula used above for the Total Potential Re source line, but the “Proposed Capacity” is multiplied by an estimated certainty factor (which WECC has assigned a zero value) and results in nearly the same values as the “Net Capacity Resources.”Regional Reliability Assessments

240 2008 Long-Term Reliability Assessment The pool of supply/demand side resource options come from a variety of sources including forward markets, self-build projects , merchant plants and RFP responses.

The processes used by the LSEs and BAs to select resources for internal reliability analysis/capacity margin calculations vary throughout WECC. Some of the processes used to evaluate the needs for more resources are: forward capacity markets and resource adequacy needs; obligation to serve activities; low certainty classes of resources under consideration, etc. Many of the entities within WE CC use formal RFPs, review resource mix, eval uate fuel diversity environmental impacts, and/or look at the need to add new generation for meeting actual and prospective state and federal mandated “renewable portfolio standards”.

The preliminary 2008 PSA shows congestion within some of WECC’s subregions, i.e., Mexico (CAMX-MX) and the Desert Southwest Area (AZ-NM-SNV) beginning in July 2010. A condition called the “North-South split” occurs when the transmission system between the COB intertie, the Pacific Northwest, British Columbia and Montana (the North) and the areas to the south (the South) is insufficient to allow all re ported surpluses north of the constraint to meet loads south of the constraint in the economic dispatch performed in SAM. The North-South split occurs within the Northwest subregion but a ffects all the southern subregions of WECC.

The PSA does not indicate transmission limitati ons going from the DSWA into California perhaps due to the projected lack of excess re sources in the DSWA. Because the transfers between subregions are calculated using the derated capacity of wind generators, additional transfers, from this or other generation, may be blocked by inadequate transmission capacity. The extent of these additional potential transf ers is unknown and was not considered in the PSA analysis. WECC has not establ ished an interconnection-wide pr ocess to address the issue of planning for variability in resource availabili ty due to fuel or hydro limitations and other conditions.

Purchases and Sales on Peak

For the summer of 2008, WECC entities report ne t firm imports from Eastern Interconnection entities of 467 MW, composed of 614 MW of gross imports and 147 MW of gross exports. By the summer of 2017, imports decline to 301 MW and exports have risen to 182 MW. The gross imports are scheduled across three back-to-back DC ties with SPP and four of the five back-to-Regional Reliability Assessments

241 2008 Long-Term Reliability Assessment back DC ties with MRO. The gross exports are scheduled across the back -to-back DC ties with MRO. Expected transfers with the Eastern Interconnection are not modeled.

The resource data for the individual subregions include transfers between subregions that are either firm or projected potenti al economic transfers with a high probability of occurrence. The firm transfers represent both firm purchases or sales and Joint Plant transfers (distribution of generation from facilities that have multiple owners) from one subregion to another.

The projected potential economic transfers reflect the potential use of seasonal demand diversity between the winter-peaking northwest and the summer-peaking southwest, as well as other economy and short-term firm purchas es that are expected to be av ailable in the western market. These potential transactions, inte rnal transfers within the region, were simulated in WECC’s preparation for the 2008 PSA and ar e reported as Expected purchase s or sales and are included in the Net Capacity Resources line on the subregional capacity gra phs. The modeling for the PSA is performed using a modified least cost dispatch program called the Supply Adequacy Model (SAM). SAM, which was developed by the Cali fornia Energy Commission calculates transfers that are physically possible and economically jus tifiable (basic transmission costs and losses and generation costs), but they do not reflect any und erlying contractual or other commitments.

Despite the fact that these transactions are no t contracted, they have a high probability of occurrence, given the history a nd extensive activity of the Western market and the otherwise underused transmission from the Northwest to th e other subregions. The preliminary 2008 PSA studies show that the North-Sout h Split first occurs in July of 2010. at which time it shows both Mexico and the Desert Southwes t Area going below the sum of the total internal load plus the specific planning reserve for those areas. For th e LTRA results from the PSA were observed. In the PSA, conservative transmissi on limits were placed on paths between the 26 PSA load groupings (bubbles) and were observed when calcu lating the transfers between these bubbles. The aggregation of PSA load bubbles into LTRA reporting subregions may obscure differences in adequacy or deliverability betw een bubbles internal to a subregion.

In order to translate the preliminary analyses completed to date fo r the 2008 PSA, the various area bubbles used in the PSA were combined in to the appropriate WECC subregions (see diagram on the previous page) and the excess or deficit capacity as reported by SAM was summed for each of the WECC subregions. The ex cess/deficit capacity was then used to calculate the amount of Expected Purchases or E xpected Sales transactio ns between the various subregions.

In WECC’s preliminary analysis for the 2008 PSA report, summer transfer capability limitations between the northern and southern portions of the Western Interconnection could occur as early as 2010 when using Planned generation. These transfer capability lim itations could leave generation that is available in the northern port ion unavailable to meet short-term loads in the southern region. (Note: due to energy constraints on the operation of the hydro system in the Northwest, much of this surplus generation would be unavailable to meet multi-hour load requirements in areas external to the north ern portions of the Western Interconnection)

. Although the transmission limitations represented in the PSA analysis are conservative, they areRegional Reliability Assessments

242 2008 Long-Term Reliability Assessment not unreasonable and the report establishes that WECC presently has insufficient transmission to fully use seasonal capacity/demand diversity within the Western Interconnection.

The following table presents an example of the July imports and exports for the Arizona – New Mexico – So. Nevada subregion through 2014.

EXISTING AND EXPECTED SUMMER TRANSFERS

Arizona - New Mexico - So. Nevada Subregion 2008 2009 2010 2011 2012 2013 2014 Joint Plant Transfer to AZ-NM-SNV from RMPA 389 389 389 389 390 389 389 Firm Purchase by AZ-NM-SNV from NWUS 480 480 480 480 480 480 480 Joint Plant Transfer to AZ-NM-SNV from NWUS 0 0 0 0 203 229 229 Firm Purchase by AZ-NM-SNV from SPP (external Region) 283 283 150 0 0 0 0 Firm Purchase Contracts 763 763 630 480 480 480 480 Firm Plant Contingent Imports 389 389 389 389 593 618 618 Existing Imports (Firm & JP) to this subregion 1152 1152 1019 869 1073 1098 1098 Future Expected Imports (including diversity exchanges) 1173 1286 968 354 0 75 5 Total Existing and Expected Imports 2325 2438 1987 1223 1073 1173 1103

Joint Plant Transfer from AZ-NM-SNV to CMUS 4169 4188 4188 4207 4207 4207 4207 Firm Sale From AZ-NM-SNV to RMPA 300 235 235 235 235 235 235 Joint Plant Transfer from AZ-NM-SNV to RMPA 254 254 254 254 254 254 254 Firm Sale From AZ-NM-SNV to NWUS 221 171 171 171 171 171 171 Joint Plant Transfer from AZ-NM-SNV to NWUS 438 438 438 438 438 449 449 Firm Sale Contracts 521 406 406 406 406 406 406 Firm Plant Contingent Exports 4861 4880 4880 4899 4899 4910 4910 Existing Exports (Firm & JP) from this region to all others 5382 5286 5286 5305 5305 5316 5316 Future Expected Exports (including diversity exchanges) 236 254 258 251 298 249 249 Total Existing and Expected Exports 5618 5540 5544 5556 5603 5565 5565IMPORTSEXPORTS

In summary, inter-subregion transmission interc onnection power transfer capabilities are not sufficient to accommodate all economy energy transact ions at all times of the year. For example, the transmission interconnections between the northern and southern portions of the Western Interconnection are periodically fully loaded in the north-to-south direction during the summer period and may experience limitations in the oppos ite direction during the winter period. In addition to the inter-subregion limitations, transmi ssion with subregions is not always sufficient to accommodate all economy energy transactions at all times of the year. WECC establishes seasonal operating transfer capability limits an d invokes schedule curtailments to address the near-term inter and intra-subr egion transmission limitations.

Generally, Western entities rely heavily on shorter-term power markets, for which no forecasts are available, which is a primary reason the WECC analysis uses the simulation process described above to determine the expected transf er values. The WSPP c ontract, which contains liquidated damage (LD) pr ovisions, is heavily relied upon as the template for such transactions. For example, currently SMUD considers that LDs include WSPP Schedule C – type block energy contracts, which are not referenced back to specific generating units or a system of units, and for which LDs are the only remedy for non- delivery. BPA considers that all WSPP Schedule C firm power purchases and long term power purchases contain liquidated damage (make whole) provisions. Most of the entities have some contracts that are WSPP Schedule C and are not tied back to a unit( s). One entity has a contract w ith a wind project with a maximum capacity of 104 MW and only 66 MW of firm ne twork transmission. The remainder of the project is imported using secondary network or non-firm point-to- point transmission.Regional Reliability Assessments

243 2008 Long-Term Reliability Assessment Fuel

WECC has not implemented a formal fuel suppl y interruption analysis method. Historically, coal-fired plants have been built at or near their fuel source and generally have long-term fuel contracts with the mine operators, or actually own the mines. This pattern is less true for newer plants or those proposed for possible developmen t post-2010. Gas-fired plan ts were historically located near major load centers and relied on relatively abunda nt western gas supplies. As demand for natural gas has increased dramatically for electric generation and other end-uses, (and western supplies are made available to the eastern markets) states such as California are faced with possible declining western supply availabi lity or greater price vol atility. Some of the older gas-fired generators in the region have backup fuel capability and normally carry an inventory of backup fuel, but WECC does not requ ire verification of th e operability of the backup fuel systems and does not track onsite b ackup fuel inventories. Most of the newer generators are strictly gas-fired plants, increasi ng the region’s exposure to interruptions to that fuel source.

A survey of major power plant operators indicate s that their natural ga s supplies largely come from the San Juan and Permian Basins in we stern Texas, from gas fields in the Rocky Mountains, and from the Sedimentar y Basin of western Canada.

Dual-fuel capability is not a significant source of supplement to natural gas within the Western Interconnection. Only a nominal amount of gene ration outside of the Southwest has dual fuel capability and the dual-fueled plants are generally subject to severe air emission limitations that make alternate fuel use prohibitiv e for anything other than very s hort term emergency conditions.

Some of the WECC entities have taken steps to mitigate possible fuel supply vulnerabilities through obtaining long term, firm transport ca pacity on gas lines, having multiple pipeline services, natural gas storage, back-up oil supplies, maintaini ng adequate coal supplies or acquiring purchase power agreements for peri ods of possible adverse hydro conditions.

Individual entities may have fuel supply interru ption mitigation procedures in place, including on-site coal storage facilities. However, on-site natural gas stor age is generally impractical so gas-fired plants rely on the general robustness of the pipeline delivery system and firm supply contracts. Introduction of LNG supplies to the Western Intercha nge (WI) supply mix later this decade will add a new set of fuel supply complexities.

As of 12/31/2007, the WECC’s existing resource mi x percentage of coal or gas/dual fuel resources were 18.7% (36,280 MW) and 41.4% (80,564 MW) respectively of 194,836 MW. In 2017, the resource mix is projected to be 19.1% (39,315 MW) of coal and 41.7% (85,950 MW) of gas/dual fuel resources out of 206,277 MW. The following table includes existing and “planned” resources.Regional Reliability Assessments

244 2008 Long-Term Reliability Assessment FUEL TYPE BREAKDOWN – WECC SUMMER PEAK RATING (Existing as of 12/31/2007 and Planned Resources)

SUMMER Actual Category Code 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Nuclear CSNU 9488 9559 9559 9559 9559 9559 9559 9559 9559 9559 9559 Hydro CSHY 56646 56628 56739 57109 58072 58079 58079 58079 58079 58079 58079 Pumped Storage CSPS 4681 4681 4741 4761 4864 4864 4864 4864 4864 4864 4864 Geothermal CSGE 2506 2518 2518 2710 2744 2769 2769 2769 2769 2769 2769 Wind CSWD 1167 1278 1532 1559 1598 1598 1598 1598 1598 1598 1598

Coal CSSTC 36280 36522 36551 37792 38508 38589 39315 39315 39315 39315 39315 O i l C S S T O 00000000000 Gas CSSTG 2302 2220 2220 2009 2009 2009 2009 2009 2009 2009 2009 Dual Fuel CSSTDF 17715 17715 17715 17715 17715 17715 17715 17715 17715 17715 17715 Steam 56297 56457 56486 57516 58232 58313 59039 59039 59039 59039 59039 87777777777 Oil CSCTO 694 694 694 694 694 676 676 676 676 676 676 Gas CSCTG 10353 11463 12388 12554 13038 12932 12936 12936 12936 12932 12932 Dual Fuel CSCTDF 5138 5138 5138 5138 5138 5138 5138 5138 5138 5138 5138 Combustion Turbine 16185 17295 18220 18386 18870 18746 18750 18750 18750 18746 18746 Aug Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul O i l C S C C O 00000000000 Gas CSCCG 41123 43002 44179 44223 44223 44223 44223 44223 44223 44223 44223 Dual Fuel CSCCDF 3933 3933 3933 3933 3933 3933 3933 3933 3933 3933 3933 Combined Cycle 45056 46935 48112 48156 48156 48156 48156 48156 48156 48156 48156

Other CSOT 2810 2981 3120 3205 3187 3467 3467 3467 3467 3467 3467 Undetermined/Unknown CSUN 0 0 000000000 Total CSTF 194836 198332 201027 202961 205282 205551 206281 206281 206281 206277 206277 Projected

Transmission

For the 2008 - 2017 period, approximately 8, 100 miles of 230 – 500 kV transmission line projects have been reported to WECC. These projects are what the transmission planners and entities have reported to WECC for inclusion in WECC’s Significant Add itions report and they did not include the details as to what projects have obtained financi ng or site approvals.

EXISTING AND FUTURE TRANSMISSION (CIRCUIT MILES)

A C & DC Category 230 345 500 Total AC 250-300 500 Total DC Total Existing as of 12/31/2007 42,839 9,987 16,170 68,996 106 1,333 1,439 70,435 Planned First Five Years 2,428 434 2,896 5,758

- 488 488 6,246 Planned Second Five Years 171 701 974 1,846

- - - 1,846 Total 12/31/2017 45,438 11,122 20,040 76,600 106 1,821 1,927 78,527 A C Voltage (kV) +/- DC Voltage (kV)

WECC currently does not have a formal definiti on of generation deliverab ility, but transmission facilities are planned in accord ance with NERC and WECC planning standards. These standards establish performance levels intended to limit the adverse effects of each transmission system’s operation on others and they recommend that each system provide sufficient transmission capability to serve its customers, to accommodate planned inter-area power transfers, and toRegional Reliability Assessments

245 2008 Long-Term Reliability Assessment meet its transmission obligation to others. The standards do not require construction of transmission to address intra-regiona l transfer capability constraints.

Planning Authorities and the Transmission Planners are responsible for ensuring that their areas are compliant with the TPL St andards 001 through 004. When the Planning Authorities and the Transmission Planners have created their datasets and successfully run their simulations, they forward their data to the WECC (the Regional Entity). WECC’s System Review Working Group (SRWG) compiles and develops a WECC-wide ba se case under TPL-005-0 which is used for the WECC Annual Study Program.

The Annual Study Program 181 provides base cases for WECC members and WECC staff, and provides an ongoing reliability and risk assessment of the existing and planned western interconnected electric system for the next ten years. To achieve this goal in 2007, eleven new power flow base cases were compiled and forty-one disturbances were simulated. Five of the power flow cases were prepared for conducting operating studies and the remaining six modeled various planning cases out to year 2017. Disturbance simulations emphasize multiple contingency (N-2) outages (units and branches). Severe disturbances are simulated including loss of entire substations and entire ge nerating plants to identify poten tial deficiencies leading to unacceptable system performance.

The Annual Study Program rotates its focus on speci fic areas of subregions. For the 2007 Study Report, the Idaho-Montana-Utah-Wyoming area wa s the focus. Disturbances identified as critical outages within this area of study include d transfer paths as well as initiating events for RAS (remedial action scheme) operation in the study focus area. The intent was to model system performance under stressed conditi ons with identified critical c ontingencies that might not normally be considered in operations and long-te rm planning studies and to identify potential concerns requiring further investigation. For the 2008 Study Report, the Colorado-UtahNorthern Nevada-Northern Calif ornia area will be the focus.

In addition to providing WECC Members with an assessment of the WECC transmission system, the Annual Study Program report helps support co mpliance with the following requirements in the NERC Reliability Standards relating to Reliabi lity Assessment, Special Protection Schemes, and System Data.

• MOD 010,012 Steady State/Dynamics Data for Transmission System Modeling & Simulation • FAC 005 Electrical Facility Ratings for System Modeling • PRC 006 UFLS Dynamics Data Base • PRC 014 Special Protecti on System Assessment • PRC 020 UVLS Dynamics Data Base • TPL 001-004 Transmission Planning (System Performance)

If the study results do not meet expected perfor mance levels established in the criteria, the responsible organizations are obligated to prov ide a written response th at specifies how and when they expect to achieve compliance with th e criteria. Other measures that have been implemented to reduce the likelihood of widespr ead system disturbances include: an islanding

181 http://www.wecc.biz/TechStudies/ 2007StudyProgram/body07_final.pdfRegional Reliability Assessments

246 2008 Long-Term Reliability Assessment scheme for loss of the AC Pacific Intertie that separates the Western Interconnection into two islands and drops load in the generation-defic it southern island; a co ordinated off-nominal frequency load shedding and restoration plan; measures to maintain voltage stability; a comprehensive generator testing program; enhan cements to the processes for conducting system studies; and a reliability management system.

Operating studies are reviewed to ensure that simultaneous transfer limitations of critical transmission paths are identif ied and managed through nomogram s and operating procedures. Four subregional study groups prepare seasonal transfer cap ability studies for a ll major paths in a coordinated subregional appro ach for submission to WECC’s Op erating Transfer Capability Policy Committee.

On the basis of these ongoing activ ities, transmission system re liability within the Western Interconnection is expected to meet NERC and WE CC standards throughout the ten-year period.

While WECC has eight back-to-back direct curr ent ties to the Eastern Interconnection with a combined transfer capability of almost 1,500 MW, only about 614 MW of imports are planned for the 2008 summer period and there are 147 MW of exports for a net of 467 net imports. It has been reported that the capacity imports have firm resource and associated firm transmission commitments. By 2017, the imports are decreased to 301 MW and there are 182 MW of exports.

Individual entities within the Western Interconnection have esta blished generator interconnection requirements that include power flow and stabili ty studies to identify adverse impacts from proposed projects. In addition, WECC has established a review procedure that is applied to larger transmission projects that may impact the interconnected system . The details of this review procedure are located in Section III of the WECC Planning Coordinating Committee’s Handbook 182

. These processes identify potential deliverability issues that may result in actions such as the implementation of system protectio n schemes designed to enhance deliverability and to mitigate possible adverse power system conditions.

For this LTRA and the PSA, the LRS and WECC staff used future generation information provided by the balancing author ities. The LRS and WECC staff assumes that the balancing authorities are, or will be studying the effect s of these resources in the process of granting interconnection agreements.

The U.S. Department of Energy (DOE) announced the issuance of two dr aft National Interest Electric Transmission Corridor (National Corri dor) designations in early 2007. One of two proposed National Corridors is in the Southwest area of WECC and is called the Southwest Area National Corridor which includes counties in Ca lifornia and Arizona. WECC’s Transmission Expansion Planning Policy Committee (TEPPC) ha s commented to the DOE that “TEPPC is not advocating for or against the dr aft corridors”. The Energy Polic y Act of 2005 authorizes the DOE, based on the findings of DOE’s National Electric Transmission Congestion Study (Congestion Study), to designate Na tional Corridors. The DOE i ssues draft National Corridors in order to encourage a full cons ideration of all options availa ble to meet local, regional and

182 http://www.wecc.biz/documents /library/publications/PCC/PCC_ Handbook_Sec tion_III.pdf

.Regional Reliability Assessments

247 2008 Long-Term Reliability Assessment national electric demand, which includes more local generation, transm ission capacity, demand response, and energy efficiency measures.

In addition to the currently planned transmis sion projects, there have been several megatransmission projects proposed. Some of these are the Northern Lights – Celilo Project (Alberta to Oregon), the Northern Lights – Inland Project (from as far north as Montana to as far south as Los Angeles and Phoenix), the Frontier Line (from Montana a nd Wyoming to California), the TransWest Express Project (from Wyoming to Arizona), the Canada/Pacific Northwest to Northern California Study, and several others. These projects range from 1,500 to 3,000 MW of transfer capability. These projects and others are in the early stag es of being considered and are not included in this assessment. They are only mentioned for informational purposes. Most of these projects would be associated with poten tial renewable energy projects and reinforcing the transmission system but would he lp reduce future North-South tr ansmission constraints such as the North-South split.

Operational Issues

Under WECC’s current regional reli ability plan, two reliability centers are being established for the region, one in Colorado and one in Washingt on. The reliability coordinators are charged with actively monitoring, on a real-time basis, the interconnected system conditions on a widearea basis to anticipate and mitigate potential reliability problems and to coordinate system restoration should an outage occur.

WECC operations personnel have the West-wide System Model, which is an energy management system (EMS) system that allows th e monitoring of the electr ical grid but does not allow any control. In January 2009 the reliab ility centers are planni ng to have a better monitoring system and modeling system (providing contingency analysis).

Each of the balancing au thorities and transmission providers have their own plans for complying with NERC EOP-002 standards pertaining to response to ca tastrophic events.

Most of WECC’s entities are memb ers of various reserve sharing groups that may be called upon to provide emergency imports or reserve sharing and may be outside of their respective areas. Some entities also have direct reserve sharing agreements with other entities and may be tied to a qualifying unit trip condition and may have other c onditions in regards to the number of times it may be called upon and the length of time to cover (some are up to 168 hours).

The WECC region is spread over a wide geographi c area with significant distances between load and generation areas. In additi on, the northern portion of the regi on is winter peaking while the southern portion of the region is summer peaking. Consequentl y, systems within the Western Interconnection may seasonally exchange very significant amounts of electric power but transmission constraints between the subregions are a significant factor affecting economic use of surplus power. Due to the inter-subregion tr ansmission constraints, reliability in the Western Interconnection is best examined at a subregional level.

The integration of variable capacity resources (w ind, solar etc.) that may be required to meet state or local Renewable Portfolio Standards (R PS) raises operating issues. Integrating theRegional Reliability Assessments

248 2008 Long-Term Reliability Assessment generation from these variable resources into the various systems may require balancing authorities to change how they operate their sy stem due to the intermittency and diversity, or lack thereof, of the generation from these resource s. These variable resources place an increased demand on the ability of entitie s to regulate generation, balan ce their systems and support the various types of generation to meet their RPS ob ligations. This may require an increase in spinning reserves, or other methods to mitig ate undesirable impacts on the system and to maintain reliability.

With the major additions (generation and transmis sion) that are planned, or the possible upgrades to existing facilities (new emission controls or other extended major maintenance items) that will need to occur over the next ten years, it may re quire a different pattern of maintenance outages on the existing system. Maintenance outages that affect the system will be timed and staged by the entities as much as possible to minimize any limitations on the system.

In some areas with hydro generation, the Enda ngered Species Act (ESA) requirements for fish have placed more limitations on the hydro-system and operating requi rements are stricter than in the past. The ability to react quickly to difficu lt operational circumstances has been degraded.

Other Items

The Environmental Protection Agency is read dressing the Clean Water Act (CWA) Section 316(b) Phase II, which pertains of once-through-cool ing (OTC) on existing power plants. The OTC process uses water from a river or ocean for condensing low-pressure steam to water as part of the thermal cycle of these units. In January 2007, the Second Circuit Cour t issued its decision (Decision) on the Phase II Rule litigation. The result of that Decision was to remand significant portions of the previous EPA 316 b rule back to the EPA. As a result, the EPA withdrew the Phase II Rule in its entirety and directed EPA regions and stat es to implement §316(b) on a Best Professional Judgment (BPJ) basis until the litiga tion issues are resolved. Within the State of California, there are a significan t number of thermal generati ng units that use once-throughcooling technology, utilizing large amounts of ocean or estuarial water. The California State Water Resources Control Board (SWRCB) is also considering a proposal 183 that would require these units to stop or greatly reduce the amount of ocean or estuarial water they use in the cooling process in order to minimize the in take and mortality of marine life.

Considering the SWRCB proposal from the perspect ive of the interconnect ed electrical grid in California, there are reliability and market implications in the California ISO control area of removing these units from service, even assuming different levels of offsetting generation additions. It is not expected that the SWRCB w ill take any action until th e later part of 2008. Depending on the policy adopted, impacts could be seen as soon as 2009.

Reliability Assessment Analysis

WECC does not currently have any region wide form al planning reserve marg in standard. But in the past, WECC has required balancing authorities to maintain a reserve margin to cover the

183 http://www.waterboards. ca.gov/npdes/cwa316.htmlRegional Reliability Assessments

249 2008 Long-Term Reliability Assessment worst single planning contingency during the for ecast peak hour. But as mentioned earlier, for WECC’s annual Power Supply Assessment (PSA) 184 the summer and winter reserve margin targets were developed using a building block met hod that takes into account factors for weather, forced outages, operating reserves and operating contingencies. These planning reserve margins were held constant for the entire study period. The intent of the assessment is to identify subregions within the Western Interconnection that have the potential for electricity supply deficits below reserve targets based on reported total demand, res ource, and transmission data.

While classifying the reported future resources into WECC’s classes 1 through 5, any reported retirements that were associated with future reso urces were also studied. They were placed into the appropriate class based upon the information received and included in the assessment data and in the results. For the PSA and LTRA, cons ervative transmission limits were placed on paths between load bubbles and were observed when calculating the tran sfers between bubbles. But beyond that i.e., within the load bubbles, deliverability was not st udied. Moreover, the aggregation of load bubbles in to reporting sub-areas may obscure differences in adequacy or deliverability between bubbles internal to the sub-area.

Currently WECC does not use a probabilistic model that calculates the Loss of Load Probability (LOLP) or unserved energy, but WECC has a goal to investigate using a probabilistic model.

Each of WECC’s transmission aut horities or transmission planners performs reliability studies on its own system and compares the study resu lts to NERC and/or WECC standards. As mentioned earlier in the transmission section, WECC staff and the Sy stem Review Working Group help develop various base cases and studies as reported in the Annual Study Report. As part of the studies, WECC staff does perform selective transien t dynamics and post-transient analyses on the base cases and has these published in WECC’s Annual Study Report.

WECC currently has Power System Stabilizer (PSS) standards that require generators with high initial response exciters to be equipped with a PSS and to have those PSS properly tuned and inservice. The Power System stabil izer (PSS) is an optional control that is part of the excitation system for generator control. The PSS acts to modulate the gene rator field voltage to damp electrical power-speed oscillations. Due to th ese standards, the West ern Interchange does not regularly perform WECC-wide sma ll signal stability studies but has conducted them in the past and used them for technical jus tification of the PSS standard.

As part of WECC’s Planning Coordina tion Committee Handbook, WECC has developed a WECC a Disturbance – Performance Criteria and a Voltage Suppor t and Reactive Power Standard, these can be found on pages XI 16-17 185 and pages XI 36-39. The WECC Disturbance – Performance criteria provides standards fo r Transient Voltage Dip, Minimum Transient Frequency and Post Transien t Voltage Deviation.

The Voltage Support and Reactive Power Standard help provide the cr iteria for minimum dynamic reactive requirements. Dynamic reac tive power support and voltage control are

184 Link to WECC's Power S upply Assessment Reports
185 http://www.wecc.biz/documents/library /publications/PCC/ PCC_Handbook_Section_11.pdfRegional Reliability Assessments

250 2008 Long-Term Reliability Assessment essential during power system disturbances. Synchronous generators, synchronous condensers, and static var compensators (SVCs a nd STATCOMs) can provide dynamic support. Transmission line charging and series and shunt cap acitors are also source s of reactive support, but are static sources. Reactive power sources must be distributed throughout the electric systems among the generation, transmission, and distribution facilities, as well as at some customer locations. Because customer reactive demands a nd facility loadings are constantly changing, coordination of distribution and transmission reactive power is re quired. Unlike active or real power (MW), reactive power (Mvars) cannot be transmitted over long distances and must be supplied locally. Each year WECC sends out a da ta request letter to the Technical Studies Subcommittee (TSS) and the Syst em Review Working Group aski ng for areas of “potential voltage stability proble ms and the measurers that are be ing taken to address the problems throughout the WECC region.” The results of this survey are compiled and posted on the WECC website as the Voltage Stability Summary. Th e Voltage Stability Summaries, by year are available on the WECC website 186

. Subregions

Northwest Power Pool Area

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 

## NORTHWEST POWER POOL - U.S.
WINTER RESERVE MARGINS

Reserve Target Margin = 14.7% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line

186 Link to WECC Voltage Stability SummariesRegional Reliability Assessments

251 2008 Long-Term Reliability Assessment Peak Demand and Energy
— The Northwest Power Pool (NWPP) area is a winter peaking subregion and is comprised of all or major porti ons of the states of Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming; a sma ll portion of northern California; and the Canadian provinces of British Columbia and Alberta. For the pe riod from 2008 through 2017, winter total internal demands ar e projected to grow at annual compound rates of 1.4 percent and 2.4 percent in the United States and Canadian areas, respectively. Fo r the total NWPP, the difference in the summer of 2017 between the ne t capacity resources (77,071 MW) and the total internal demand plus target margin (76,169 MW ) and is 902 MW or 4,937 MW without future expected sales. The difference in the wi nter season of 2017-2018 (82,931 MW – 83,892 MW) is -961 MW or -4,224 MW without future expected purchases. For the assessment period 2008 through 2017, the annual energy requirements are pr ojected to grow at an nual compound rates of 1.65 percent and 2.68 percent in the U.S. and Canadian areas, respectively.

The annual energy use for the NWPP, increa sed by 2.5 percent from 368,894 GWh in 2006 to 378,304 GWh in 2007. The 2007 energy use was 1.8 per cent greater than the forecast in last year’s assessment. Annual energy use for the te n-year period from 2007 through 2017 is forecast to increase by 1.9 percent compared to the hist oric annual energy use in crease of 1.3 percent from 1997 through 2007. For the period from 2007 through 2017 the annual energy requirements are projected to gr ow at annual compound rates of 1.5 percent and 2.8 percent in the U.S. and Canada areas, respectively.

Resource Adequacy Assessment
— The winter Planning Reserve Margin for the United States portion of the NWPP (NWPP-US) is 14.7 percent. The data indica tes a winter 2008/2009 reserve margins of 31.8 percent without any “P lanned” generation or expected sales and 34.7 percent with those resources (Reported Margin ). Much of WECC’s forecast surplus reserve margin exists due to the Columbia River Basin hydroelectric dams located in the NWPP-US, but deliverability to other areas is problematic due to both the possibility of a constrained North-toSouth transfer capability and th e limited energy associated with the hydro storage. By winter 2012/2013, those margins change to 23.7 perc ent and 26.7 percent, respectively. (Note, due to energy constraints on the operation of the hydro sy stem in the Northwest, much of this surplus would be unavailable to meet multi-hour load requ irements, including transfers to other regions of WECC)

.

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% NORTHWEST POWER POOL - U.S.
WINTER RESERVE MARGINS

Reserve Target Margin = 14.7% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% NORTHWEST POWER POOL - CANADA
WINTER RESERVE MARGINS

Reserve Target Margin = 13.2% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line.Regional Reliability Assessments

252 2008 Long-Term Reliability Assessment For the Canadian portion of the NWPP, the wint er planning reserve margin is 13.2%. In the winter of 2008/2009, the reserve margins are 7.3 percent without any “planned” generation or expected purchases and 13.2 percent with those resources. In WECC’s 2008 PSA, the Alberta 150 MW interconnection with the Sa skatchewan was not modeled. There are several short lead time generation technologies that responded to mark et conditions in the provinces, that may not have been in the regulatory permitting phase (for example wind and simple cycle gas turbines) and were classified as being class 4 or 5. Consequently, th e assignment of a zero percent confidence factor to the “proposed” (Class 4 and 5) resources has a significant impact on the reserve margin of the Canada su b-region. The first year that the subregion goes below the reserve target margin with ”planned” resources a nd expected transactions is projected to be the winter of 2009-10. That winter the reserve marg in would be 11.9% or the difference between net capacity resources (24,992 MW) and the total internal load plus reserve margin (25,293 MW) is a negative 301 MW. As mentioned previously, there are some resources in the proposed category that fall under the short-lead time technologi es and have an in-servi ce date prior to the winter of 2009, which would delay the time when the Canada sub-region would drop below the target margin. The next year, the subregion is projected to be deficien t by -1,054 MW. By the winter of 2012/2013, those margin s decline to a negative 3.3 pe rcent without any ”planned” generation or expected purchases and 6.3 pe rcent with those resources (25,622 MW – 27,295 MW = -1,673 MW below target). The Canadian en tities are aware of the need for resource adequacy and transmission reinforcement and be lieve that through the open market and proper planning the resource ade quacies will be met.

The AESO has instituted “The Two Year Probability of Supply Adequacy Shortfall Metric”
187 which is a probabilistic assessment of encountering a supply shortfall over the next two years. The calculation estimates, on a probabilistic basi s, how much load may go without supply over the next two year period. Based on extensive consultation with their stakeholders, when this unserved energy exceeds 1,600 MWh in any two year period (equivalent to one hour 800 MW shortfall in each of the two year s), the party may take certain act ions to bridge the temporary supply adequacy gap without impacting investor confidence in the market. The method of bridging the gap may be in the form of:1) Load Shed Service (“LSS”), 2) Self Supply and Backup Generation Support from existing backup gene ration owned by commercial businesses etc., and 3) Emergency Portable Generation.

Generation in the province of Albe rta, Canada, operates in a fully deregulated market and thus resource additions are market driven. Generati on additions and load growth are expected to result in some transmission constraints in a numbe r of areas over the course of the review period if identified system reinforcements are not comp leted on time. The impact of most of these constraints is anticipated to be local in natu re and will not impact the transmission systems outside of Alberta.

NWPP planning is conducted by sub-area. Id aho, northern Nevada, Wy oming, Utah, British Columbia, and Alberta individually optimize their resources to their demand. The coordinated system (Oregon, Washington, and western Montan a) coordinates the operation of its hydro resources to serve its demand. In 2001, the northwest experienced its second lowest Coordinated Columbia River System volume runoff since record keeping began, with re servoirs refilling to

187 http://www.aeso.ca/downloads/LTA _Recommendations_Paper_Final.pdf pages 18-24 Items 4 through 5.5Regional Reliability Assessments

253 2008 Long-Term Reliability Assessment just 71 percent of capacity, the lowe st levels in almost a decade. Since 2001, the reservoir refill has ranged between 87 percent and 94 percent of capacity.

The reservoirs are managed to address all of the competing requirements including but not limited to: current electric power generation, future (winter) elec tric power generation; flood control; fish and wildlife require ments; special river operations for recreation; irrigation; navigation; and refilling of the re servoirs. With the recent addition of significant wind resources, these hydro electric resources are also used to in tegrate wind into grid op erations. In addition to managing the competing requirements, other ava ilable generating resour ces, market conditions, and load requirements are considered and incorporated into the decision for refilling the reservoirs. Any time precipitation levels are be low normal, balancing these interests becomes even more difficult. A ten-year agreemen t was reached in 2000 among parties involved in operation of the Columbia River Basin concerning river operations. However, this agreement is subject to three-, five-, and eight-year performa nce checks and reopening by the parties. The net impact of the agreement is a reduction in generating capability as a result of hydro generation spill policies designed to favor fi sh migration. The capability re duction, which varies depending on water flows and other factors, is reflected in the margin calcula tions presented in this report. The agreement includes a provision for negot iating changes in the plan under emergency conditions as occurred in 2001.

The Northwest Power and Conservation Council has adopted resource adequacy assessment standards for the Pacific Northwest (PNW) porti on of the subregion (repr esenting approximately 25 percent of the load), which consists of th e states of Oregon, Washington, Idaho, and a portion of Montana. The adopted energy and capacity-a dequacy standards are bot h tied to probabilistic analyses targeting a loss of load probability of 5 perc ent or less. The remaining portions of the subregion have not established a formal pro cess for assessing resource adequacy. Individual entities within the subregion, howev er, have addressed resource adequa cy as a part of either their integrated resource plan procedures or some other similar process.

Fuel Supply & Delivery — A significant portion of the electric power generated in the Pacific Northwest is derived from hydroelectric gene ration. Hence, wide variations in annual precipitation, water storage and flow limitations, and other factors significantly affect energy generation from other resources and complicate the fuel planning processes. Coal-fired generation in the area is also very significant. Mu ch of the coal fired generation is near the fuel sources and is often operated in a base-load mode. Consequentl y, the area is not highly reliant on gas-fired plants relative to annual energy generation and many of those plants are more often operated as seasonal peaking units. Wind-powered generation is increasing rapidly in the area. As of 12/31/07, the existing wind resources within WECC, the NWPP has 47.9 % of WECC’s non-derated wind resources (3,243 MW), and 51% of the expected summer on-peak wind capacity (539 MW.) Of the future WECC pla nned and projected wind resources, the NWPP accounts for 1,566 MW (61%) and 7,504 MW (95%) respectively. The expected derated summer on-peak values are 247 MW for the pla nned resources and 314 MW for the projected resources but the “adjusted” projected value is 0 MW. Since the wind resources exhibit wide fluctuations in output, area s with relatively large amounts of wind-powered generation are investigating the costs and opti ons for integrating wind. Carefu l and site-specific assessments are needed to minimize adverse consequences that may occur.Regional Reliability Assessments

254 2008 Long-Term Reliability Assessment Transmission Assessment
— In view of the longer time required for transmission permitting and construction, it is recognized that network pl anning should focus on estab lishing a flexible grid infrastructure. This is being done with the goa ls of allowing anticip ated transfers among NWPP systems, addressing several areas of constrai nt within Washington, Oregon, Montana, and other areas within the region, and integr ating new generation. Projects at various stages of planning and implementation include approximately 2,2 85 miles of 500-kV transmission lines (1,882 miles NWPP-US and 403 miles NWPP-CN).

Maintaining the capability to import power into the Pacific Northwest dur ing infrequent extreme cold weather periods continues to be an important component of transmission grid operation. In order to support maximum import transfer cap abilities under double-circuit simultaneous outage conditions, the northwest depends on an automatic under-frequency load shedding scheme.

Power flow studies have been conducted by the Transmission Pla nning Authorities and in some cases where there have been N-1 and N-2 critic al contingencies identified, mitigation measures (adding reactive sources) or new faci lities (a new transformer) have been proposed as items to be budgeted and installed. Because some of th ese are driven by future load growth and transmission requests not yet firmed up by the customers, some of these measures have not yet escalated to the project level and no specific date for their completion has been assigned at this time.

Some balancing authorities are taking steps to help make the transmission queue process and transmission queue assessments are more effici ent. BPA has instituted a process called the Network Open Season 188 (NOS) for allowing resources pla cement in its transmission queue. Under the NOS, those seeking transmission capacity are asked to sign Precedent Transmission Service Agreements (PTSA), which commit them to take service at a specified time and under specified terms. At one time, BPA’s tran smission queue was over 18,000 MW, after the first phase of the 2008 NOS there were 6,410 MW wort h of transmission requests made and PTSAs signed by customers. The PSTA contract is still contingent on BPA’s ability to offer new service at its embedded cost rate and is subject to BP A’s completion of the required environmental work prior to construction of new facilities. Fo r more information refer to the link below.

In Alberta, several system reinforcement proj ects have been completed recently. The most significant of these is the re-energization of th e Keephills – Genesee and Genesee – Ellerslie 240 kV lines to their design voltage of 500 kV. This also included th e addition of 500/240 kV transformers at the Keephills and Ellerslie substations. A project to reinforce the downtown area of Edmonton with the addition of 6 miles of underground 240 kV cable is nearing completion and has a late fall 2008 in-service date.

Approvals of need, for a number of system rein forcements, have been received from the Alberta provincial regulator. One of these is for the development of approximately 105 kilometers (65 miles) of 240-kV transmission line to accommod ate several new wind generation developments in southwest Alberta. This development has an in-service date of 2009. Need approval has also

188 http://www.bpa.gov/corporate/pubs/fact_s heets/08fs/fs_Network_Open_Season.pdfRegional Reliability Assessments

255 2008 Long-Term Reliability Assessment been received for a number of projects in the Edmonton area. These projects will also include the installation of two 600 MVA 24 0 kV phase shifting tran sformers (the first in Alberta) to be used to balance the flows between the northwe st and the northeast regi ons of the province.

Planning efforts continue on a number of othe r major system reinforcements including supply into the Fort Saskatchewan and For McMurray areas of northeast Alberta. This reinforcement will likely be a combination of 500 kV and 240 kV developments. Planning efforts are also continuing on reinforcing the main north – south transmission greed in Alberta. For various regions the need approval for this project was rescinded by the regu lator. It is anticipated this project will be in-service in the 2012 time frame.

A Calgary area transmission must run (TMR) pr ocedure addresses 240-kV transmission gridloading issues and ensures that voltage stability margins are maintained. The TMR service is an ancillary service contract with generators that is required to address co ntingencies in areas of inadequate transmission to help provide voltage support to the tr ansmission system in southern Alberta, near Calgary, a nd assist in maintaining overall system security.

The Canadian province of British Columbia relies on hydroelectric generation for 90 percent of its resources. British Columbia Transmissi on Corporation (BCTC) is responsible for the planning, operation, and maintenance of Britis h Columbia’s publicly-owned transmission system. BCTC is addressing constraints betwee n remote hydro plants and lower mainland and Vancouver Island load centers. The Interior to Lower Mainland 189 (ILM) transmission project is BCTC’s largest expansion project in 30 years for the province. In August of 2008 the BC Utility Commission approved the ILM pr oject which is a new 500-kV line between the Nicola and Meridian substations and has a projected in-service date in 2014. The Vancouver Island Transmission Reinforcement 190 project involves the removal of two 138 kV lines (one submarine) and replacing them with a 230 kV double circuit in frastructure including a 230-kV underwater cable between Arnott substation and Vancouver Island te rminal. The expected inservice date of the project is October 2008. Th e ILM reinforcement project will increase the total transfer capability of the interior to lower mainland area grid and the new 230-kV cable will increase the transfer capab ility from the lower mainland area to Vancouver Island.

Operational Issues
— Under normal weather conditions, the NWPP does not anticipate dependence on imports from external areas during summer peak demand periods. In the event of either extreme weather or much lower than normal precipitation, the NWPP could increase imports, which would reduce reservoir drafts and ai d reservoir filling. Off-peak energy transfers allow southwest generators to increase thermal plant loading during normally light load hours to offset to some extent the eff ects of any adverse hydro conditions.

Preliminary analysis for WECC’s 2008 PSA report indicates that transmi ssion constraints exist between the United States and Canadian portio ns of the NWPP and that by 2017 over 4,000 MW of additional capacity (generation or transmission for imports) will be needed in Canada. The majority of this additional capacity will need to come from IPPs or the market.

189 http://www.bctc.com/projects/ilm/
190 http://www.bctc.com/projects/vitr/Regional Reliability Assessments

256 2008 Long-Term Reliability Assessment Rocky Mountain Power Area

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

## ROCKY MOUNTAIN POWER AREA
SUMMER RESERVE MARGINS

Reserve Target Margin = 11.8% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below.

Peak Demand and Energy — The Rocky Mountain Power Area (R MPA) consists of Colorado, eastern Wyoming, and portions of western Ne braska and South Dakota. The RMPA may experience its annual peak demand in either the su mmer or winter season due to variations in weather. For the period from 2008 through 2017, summer total internal demands and annual energy requirements are projected to grow at annual compound rates of 2.35 percent and 2.24 percent, respectively. The di fference in 2017 between the “Pla nned” reserve resources (15,418 MW) and the total internal demand plus targ et margin (16,880 MW) and is -1,462 MW (this includes serving 398 MW of interruptible load).

Annual energy use increased by 3.1 percent fr om 61,174 GWh in 2006 to 63,050 GWh in 2007. The 2007 energy use was 1.3 percent greater than the forecast in last yea r’s assessment. The annual energy use for the ten-year period from 2007 through 2017 is forecast to increase by 2.4 percent compared to the historic annual energy use increase of 3.0 percent from 1997 through 2007. Annual energy use for the nine-year period from 2008 through 2017 is forecast to increase by 2.2 percent.

Resources — The RMPA target margin is 11.8 percent for the summer and 13.4 percent for the winter. The data for the Rocky Mountain Power Area present the summer 2008 reserve margins of 9.4 percent without any “Planned” generation or expected purchases and 11.5 percent with those resources (including serving interruptible load) (“Planned” reserve margin). The first time the reserve margin goes below the target margin with the “Planned” re sources and expectedRegional Reliability Assessments

257 2008 Long-Term Reliability Assessment purchases is in July of 2012, where there is a shortfall of 245 MW wh ich produces a margin 9.6%.

As of 12/31/2007, of the existing summer rated wind resources within WECC, the RMPA has 662 MW (10% of the WECC nameplate) which is derated to 80 MW during the summer peak period (7% of the WECC on peak wind capacity). Of the future WECC planned and projected non-derated wind resources, the RMPA accounts for 449 MW (17%) and 0 MW (0%) respectively. The expected derated summer on-p eak value is 56 MW for the planned resources.

Public Service Company of Colo rado (PSC) has a 750 MW coal-fir ed plant under construction at the existing Comanche station w ith an expected in-service date of 2010. There is also the Holcomb 1 coal fired generato r (700 MW) planned for 2013. Holcomb 2 is projected for 2014, but had the confidence factor applied to it, so it is only reflected in the potential line on the reserve graph. (As mentione d in the highlights section, it is questionable as to whether either of these Holcomb units will meet their current in-service dates.)

The subregion has not established a process for a ssessing resource adequac y. Individual entities within the subregion, however, have addressed re source adequacy as a part of either their integrated resource plan procedures or some other similar process.

Fuel Supply and Delivery
— Coal, hydro, and gas-fired plants are the dominant electricity sources in the area. Much of the coal is provided by relatively nearby mines and is often procured through long-term cont racts. Hydroelectric plants, however, may experience operational limitations due to variations in precip itation. As in the northwest, gas-fired plants are most often operated in a peaking mode. Abundant natural gas supplies exist within the area but delivery constraints may occur at some plants during unexpected severe cold weather conditions.

Transmission Assessment
— Tri-State Generation and Transmission is proposing a new project in southern Colorado called the San Luis Valle y Electric System Improvement project. The project would involve the construction of a 80 mile 230-kilovolt transmission line between the Walsenburg Substation and the San Luis Valley Substation. The San Luis Valley’s existing electrical system has reached its limit due to continued reside ntial and irrigation growth. One major concern is that the radi al nature of the existing 230 kV transmission system does not provide the reliability benefits of redundant service. The other major problem currently experienced on the transmission system is a drop in voltage that occurs when the load on the electric system in the valley is above 65 megawatts. This line will provide the power delivery infrastructure to increase the reliability and capacity of the existing transmission system and support proposed renewable energy development in the area.

The Western Area Power Administration (WAPA) plans to upgrade several 115-kV transmission lines to 230 kV over the next ten years to increase transfer capab ilities and help maintain the operating transfer capability between southeastern Wyoming and northeastern Colorado. In addition to those conversions, the table at the end of WECC’s self assessment describes additional transmission projects.Regional Reliability Assessments

258 2008 Long-Term Reliability Assessment Operational Issues
— Transmission upgrades in the area have alleviated some transfer capability limitations, but some system constraints remain. Operator flexibility will be limited by the transmission constraints and ope rating conditions must be closel y monitored, especially during periods of high demand. In some cases, special protection schemes are used to preserve system adequacy should multiple outage contingencies occur.

Arizona-New Mexico-Southern Nevada Power Area

-10.0%

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

## ARIZONA - NEW MEXICO - SO. NEVADA
SUMMER RESERVE MARGINS

Reserve Target Margin = 13.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line.

Peak Demand and Energy
— The Arizona-New Mexico-Sout hern Nevada (AZ-NM-SNV) power area consists of Arizona, most of New Me xico, southern Nevada, the westernmost part of Texas, and a portion of southeastern Califor nia. For the period 2008 through 2017, summer total internal demands and annual en ergy requirements are projected to grow at annual compound rates of 2.7 percent and 2.5 percent, respectively. The difference in 2017 between the “Planned” reserve resources (37,332 MW) a nd the total internal demand pl us target margin (45,438 MW) and is -8,106 MW (this includes serving 575 MW of interruptible load and 187 MW of direct control load management.)

The AZ-NM-SNV reserve margin graph depicts that the subregion drops below its reserve target margin as early as 2010 due to lack of resources both within th e subregion and from surrounding subregions. The SAM model used for the LTRA and PSA allows the transfer of excess energy to areas of need or higher cost, ba sed upon transfer costs and whether the target margin was met. Since California is closer to the Northwest, th e cost of transmission is less and much of theRegional Reliability Assessments

259 2008 Long-Term Reliability Assessment excess generation in the northwest is absorbed into California and then if any is left after it continues to the RMPA or AZ-NM-SNV subregi on. The north-south spl it occurs in 2010 where there is not adequate transmission to allow the tr ansfer of energy through California and into the AZ-NM-SNV subregion in 2010. .

The annual energy use increased by 5.9 percen t from 134,950 GWh in 2006 to 142,951 GWh in 2007. The 2007 energy use was 4.7 percent greater than the forecast in last year’s assessment. For the ten-year period from 2007 through 2017, the energy use is forecasted to increase by 2.2 percent compared to the historic annual energy use increase of 3.8 percent from 1997 through 2007. The annual energy use from 2008 through 2017 is forecast to increase by 2.5 percent.

Resource Adequacy Assessment
— The AZ-NM-SNV planning reserve margin target is 13.27 percent for the summer and 12.77 percent for the wint er. The data for this sub-area present the summer 2008 reserve margins of 11.4 percent without any “Planned” generation no expected purchases and 17.0 percent with those resources (Reported Marg in). With or without the “Planned” generation and expected purchases , the AZ-NM-SNV falls below the planning reserve target in July 2010 where it drops to 4.2 pe rcent without the resource s, and only drops to 11.1 percent with the resources (t his includes serving DSM loads). By the summer of 2012, those margins further decline to a negative 1.3 percent and a positive 4.5 percent, respectively, as depicted in the margin information graphic.

Long-term contracts have been signed since th e data for the PSA and LTRA were submitted and thus are not included in the current analysis. SRP signed a twenty year contract for 500 MW of peaking capacity with TransCanada beginning in 2011. The plant will be built 45 miles southeast of Phoenix.

Of the existing wind resources within WECC, the AZ-NM-S NV has 295 MW (4% of the WECC nameplate) which is derated to 1 MW during th e summer peak period (0% of the WECC on peak wind capacity). Of the future WECC planne d and projected wind re sources, the AZ-NM-SNV has projected 0 MW.

As with other areas within WECC, the future ad equacy of the generation supply over the next ten years in this area will depend on how much new capacity is actually constructed. The margin information graphic for the area demonstrates th e subregion faces a somewhat limited window of opportunity to address area resource adequacy issues. Frequently, resource acquisitions, including load reduction options, ar e subject to a request for propos al process that may increase the uncertainty regarding plant type, location, etc. These factors combine to make resource adequacy forecasting problematic over an extended period of time.

The subregion has not established a process for a ssessing resource adequac y. Individual entities within the subregion, however, have addressed re source adequacy as a part of either their integrated resource plan procedures or some other similar process.

Fuel Supply and Delivery
— Coal, hydro, and nuclear plants are the dominan t electricity sources in the area. As in the northwest, gas-fired plan ts are most often operated in a peaking mode. Much of the coal is provided by relatively near by mines and is often pr ocured through long-termRegional Reliability Assessments

260 2008 Long-Term Reliability Assessment contracts. Major hydroelectric plan ts are located at dams with si gnificant storage capability so short-term variations in pr ecipitation are not a significan t factor in fuel planning.

Transmission Assessment

— Transmission providers from the AZ-NM-SNV along with other stakeholders from southern California are actively engaged in the Southwest Transmission Expansion Planning (STEP) group. The goal of this group is to participate in the planning, coordination, and implementation of a robust transmission system between Arizona, southern Nevada, Mexico, and southern Ca lifornia that is capable of s upporting a competitive, efficient, and seamless west-wide wholesale electricity market while meeting established reliability standards. The STEP group has developed thr ee projects resulting from the study efforts to upgrade the transmission path from Arizona to s outhern California and s outhern Nevada. The three projects will increase the transmission path capability by about 3,000 MW. The first set of upgrades was completed in 2006 and increased the transfer capacity by 505 MW. The second set of upgrades will increase the transfer capacity by 1,245 MW and is scheduled to be completed in 2008. The third and last set of upgrades is the Pa lo Verde to Devers #2 500-kV transmission line (PVD2). The third set of upgrades as proposed by the STEP group developed complications in 2007 with the Arizona Corporatio n Commission’s refusal to gran t a permit for the construction of the Palo Verde to Devers #2 line which may cancel or delay the construction of the PVD2 line. Currently Southern California Edison (SCE) is projecting the in-service date of the PVD2 line to be in 2011. SCE states that after all re gulatory approvals for the project the construction of the project will take approximately 2 years. This line was not included in this year’s LTRA or PSA analysis, since in last year’s SAM analysis, this line did not have an impact on transfers due to the AZ-NM-SNV being short on resources and there was still unutilized capacity on the existing transmission lines going from the Califor nia-Mexico subregion into the AZ-NM-SNV.

As mentioned earlier, the Department of Ener gy (DOE) has also studied various areas of congestion and identified the desert southwest as an area of concern and has proposed the Southwest Area National Corridor which includes c ounties in California and Arizona. The table at the end of the WECC self assessment outlines some of the ongoing transmission projects that are past the conceptual stage and considered in this assessment.

Operational Issues
— Special protection schemes play an im portant role in maintaining system adequacy should multiple system outages occur. These schemes include generator tripping in response to specific transmission line outages. In addition, operators rely on procedures such as operating nomograms so that the system can respond adequately to planned and unplanned transmission and/or generation outages.

With the numerous coal fired generators residi ng in this subregion, there could be significant impact from possible carbon emission limits. WE CC’s TEPPC group is currently studying the possible impact or alternatives to reduce the carbon emissions.Regional Reliability Assessments

261 2008 Long-Term Reliability Assessment California-Mexico Power Area

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

## CALIFORNIA - MEXICO - (U.S.)
SUMMER RESERVE MARGINS

Reserve Target Margin = 15.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below.

-30.0% -20.0% -10.0%

0.0% 10.0% 20.0% 30.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 

## CALIFORNIA - MEXICO - (MEXICO)
SUMMER RESERVE MARGINS

Reserve Target Margin = 14.3% Planned (Class 1-3) Reserve Resources Total Potential (Class 1-5) Resources Adjusted Potential Resources
The Planned Reserve line overlays the Adjusted Potential line. Graphic is highly sensitive to the assumptions listed in the notes below.Regional Reliability Assessments

262 2008 Long-Term Reliability Assessment Peak Demand and Energy
— The California-Mexico power area encompasses most of California and the norther n portion of Baja California, Mexico. Summer total internal demands are currently projected to grow at annual co mpound rates of 1.3 percent and 5.5 percent in the United States and Mexico areas, respectiv ely, from 2008 through 2017. Annual energy requirements are projected to gr ow at annual compound rates of 1.3 percent and 5.2 percent in the U.S. and Mexican areas, respectively. The difference in 2017 between the “Planned” reserve resources (75,935 MW) and the total internal de mand plus target margin (82,473 MW) and is a negative 6,538 MW (this includes serving 75 MW of interruptible load and 3,281 MW of direct control load management.) Of the 14,711 MW of total “proposed” resources (summer peak rating) throughout WECC,, about 6,900 MW are pr ojected for the California-Mexico Area (but have a zero percent confidence factor assigned to them, zeroing them out.) California, which generally peaks in August, shows dropping below its planned reserve marg in in August of 2011 (while serving tota l load and not call ing upon their DSM programs). A large portion of the load management programs or interruptible load av ailable to the California Independent System Operator (CAISO) use a Stage 1 or Stage 2 emer gency as trigger mechanisms for the CAISO to access these programs. California accounts fo r 2,892 MW or 94.7 percent of the 3,053 MW of Direct Control Load Management (DCLM) for 2008.

The California-Mexico subregion’s annual en ergy use increased by 1.5 percent from 297,339 GWh in 2006 to 301,736 GWh in 2007. The actual 2007 energy use was 2.1 percent less than the forecast in last year’s assessment. Annua l energy use for the ten-year period from 2007 through 2017 is forecasted to increase by 1.5 percen t compared to the historic annual energy use increase of 1.6 percent from 1997 through 2007. Annual energy use for the nine-year period from 2008 through 2017 is forecast to increase by 1.5 percent.

Resource Adequacy Assessment
— The California-Mexico total ar ea (CA-MX) planning reserve margin is 15.3% for the summer and 11.0% for the winter. The planning reserve margin for California U.S. is 15.3% and 11.0 % for the summer and winter respectively. The planning reserve margin for Baja Mexico is 14.3% and 10.3% for the summer and winter respectively. The data for the United States portion of th e California-Mexico sub- area present summer 2008 reserve margins of 7.2 percent w ithout any “planned” generation or expected purchases and 15.3 percent with those resources. Us ing “planned” resources and expect ed purchases, California first shows going below its planned re serve margin in August of 2011, wh ere there is a shortfall of 615 MW which produces a margin 14.3%. In the summer of 2012, California’s reserve margin is 12.7 percent as depicted in the margin inform ation graphic. For th e Mexican portion of the subregion, the summer of 2008 reserve margin s are 25.5 percent w ithout any “planned” generation or expected sales and 14.3 percent w ith those resources. By the summer 2012, those margins become a negative 14.9 percent a nd a negative 1.7 percent, respectively.

Of the existing wind resources within WECC,(6,574 MW of nameplate and derated to 1,167 MW on-peak) the CMUS has 2,374 MW (36% of th e WECC nameplate) which is derated to 490 MW during the summer peak period (42% of the WECC on-peak wi nd capacity). Of the future WECC planned and projected wind resources, the CMUS account s for 566 MW (22%) and 406 MW (5%) respectively. The expe cted derated summer on-peak va lue is 125 MW for the planned resources, 121 MW the projected resources but the “adjusted” projected value is 0 MW.Regional Reliability Assessments

263 2008 Long-Term Reliability Assessment The shortfall in Mexico in 2017, between the tota l load plus planned margin (4,111 MW) versus the planned resource reserve (2,722) is -1,389 MW

California employs a mandatory re source adequacy program requiri ng load serving entities to procure 115% of their forecast demand. State en tities are working toge ther and with other entities in the Western Interconnection to address transmission planning issues.

In June of 2006 California passed Assembly Bill 32, the California Global Warming Solutions Act of 2006 , which had a significant influence on how Ca lifornia plans to meet its future needs and cap California’s greenhouse gas emissions at the 1990 level by 2020. On December 5 th

, 2007 California adopted the 2007 Integrated Energy Policy Report (IEPR) 191 which states that “Scenario analysis indicates that these aggres sive cost-effective efficiency programs, when coupled with renewables development, could allow the electricity industry to achieve at least a proportional reduction, and perhap s more, of the state's CO 2 emissions to meet AB 32's 2020 goals”

Fuel Supply and Delivery
— California is highly reliant on gas-fired generation and has very little alternate fuel capability for these pl ants. In February, 20 08 the California Energy Commission produced the 2008 Update to the Energy Action Plan (UEAP) 192 and on page 16 begins to address the Natural Gas Supply, Demand and Infrastructure and states they will: A) Continue to monitor and assess the gas market and its impact on California consumers; B) Examine whether and how Californi a utilities should ente r into contracts for LNG supplies; C) Ensure that California has adequa te access to those supplies. The UEAP also mentions that there have been proposals for the expansion of gas storage cap acities and for a significant expansion of pipeline capacity from the Rocky Mountains to California and that they will be assessing those projects.

Transmission Assessment
— With California’s new energy policies that require substantial increases in the generation of electricity from renewable energy resources, implementation of these policies will require extensive improve ments to California's electric transmission infrastructure. California has developed the Renewable Energy Transmission Initiative (RETI) 193 which is a statewide initiative to help id entify the transmission projects needed to accommodate California’s renewable energy goals; facilitate transmissi on corridor designation and facilitate transmission a nd generation siting permitting.

As mentioned earlier, With the Arizona Corp oration Commission’s Ma y 2007 denial of SCE’s Palo Verde – Devers #2 (PVD2) permit, Southern California Edison delayed the projected inservice date to be in 2011. On May 16, 2008, SC E filed its pre-filing application at FERC . The FERC pre-filing process triggers a project wide National Environmental Policy Act review, preparation of a preliminary draft environmental impact statement, and noticing along the entire right-of-way

. SCE is requesting the pre-filing process to conclude by end of 2008

. SCE also filed a motion to modify the PVD2 with the CPUC on May 16, 2008 to support interconnection needs in the region near Blythe, California. SCE requested to construct PVD2 facilities in California to

191 http://www.energy.ca.gov/2007_energypolicy/index.html
192 http://www.energy.ca.gov/2008publica tions/CEC-100-2008-001/CEC-100-2008-001.PDF
193 http://www.energy.ca.gov/reti/index.htmlRegional Reliability Assessments

264 2008 Long-Term Reliability Assessment allow SCE to access potential new renewable and conventional gas fi red generation in the Blythe, California area

. Special protection schemes have been implemen ted for generation connected to the Imperial Valley substation in order to relieve some of the congestion and an operating nomogram is used to limit the simultaneous operation of generating plants connected to the Imperial Valley substation and imports from CFE and Arizona.

Operational Issues
— The CAISO is moving forward on a Market Redesign and Technology Upgrade (MRTU) program of changes to ISO ma rket and grid operations. The CAISO launch date for the MRTU program is now projected to be in 2009, which includes upgrades to the CAISO’s computer technology to a scalable system that can grow and adapt to future system requirements. Transmission upgrades in the ar ea have alleviated some transfer capability limitations, but numerous system constraints remain.

Regional Description WECC’s 216 members, including 35 balancing authoritie s, represent the entire spectrum of organizations with an interest in the bulk power system. Servi ng an area of nearly 1.8 million square miles and 71 million people, it is the larges t and most diverse of th e eight NERC regional reliability organizations. Additi onal information regarding WECC can be found on its Web site ( www.wecc.biz ).

AZ/NM/SNV — 230,100 Sq. Mi. RMPA — 167,000 Sq. Mi. CAMX — 156,000 Sq. Mi. NWPP — 1,214,000 Sq. Mi. WECC TOTAL — 1,760,000 Sq. Mi.Abbreviations Used in this Report

265 2008 Long-Term Reliability Assessment 

# Abbreviations Used in This Report

AZ-NM-SNV Arizona-New Mexico-Southe rn Nevada (Subregion of WECC) CA-MX-US California-México (Subregion of WECC) dc Direct Current DOE U.S. Department of Energy EECP Emergency Electric Curtailment Plan ERO Electric Reliab ility Organization ERCOT Electric Reliability Council of Texas FERC U.S. Federal Ener gy Regulatory Commission FRCC Florida Reliability Coordinating Council GHG Greenhouse Gas GRSP Generation Reserve Sharing Pool GTA Greater Toronto Area GWh Gigawatthours ICAP Installed Capacity IESO Independent Electric Syst em Operator (in Ontario) IROL Interconnection Reliability Operating Limit ICTE ISO Independent Coordinator of Transmission for Entergy Independent System Operator ISO-NE New England Independent System Operator kV Kilovolts (one thousand volts) LFU Load Forecast Uncertainty LNG Liquefied Natural Gas LOLE Loss of Load Expectation LSE Load-serving Entities LTRA Long-Term Reliability Assessment MAPP Mid-Continent Area Power Pool MISO Midwest Independent Transmission System Operator MRO Midwest Reliability Organization MVA Megavoltamperes Mvar Megavars MW Megawatts (millions of watts) NERC North American Electric Reliability Corporation NIETC National Interest Electric Transmission Corridor NPCC Northeast Power Coordinating Council NWPP Northwest Power Pool Area (subregion of WECC) NYISO New York Independe nt System Operator ONT OVEC Ontario – IESO Ohio Valley Electric Corporation PAR Phase Angle Regulators PC NERC Planning Committee PJM PJM Interconnection PRB Powder River Basin PRSG Planned Reserve Sharing GroupAbbreviations Used in this Report

266 2008 Long-Term Reliability Assessment RAS Reliability Assessment Subc ommittee of NERC Planning Committee RCC Reliability Coordinating Committee RFC Reliability First Corporation RFP Request For Proposal RMPA Rocky Mountain Power Area (subregion of WECC) RMR Reliability Must Run RRS Reliability Review Subcommittee RTO Regional Transmission Organization SCR Special Case Resources SERC SERC Reliability Corporation SOL System Operating Limit SWPP SPP Southwest Power Pool Southwest Power Pool SPS Special Protection System TRE Texas Regional Entity THI Temperature Humidity Index TLR Transmission Loading Relief TVA Tennessee Valley Authority VACAR Virginia and Carolinas (subregion of SERC) VACS WECC VACAR – South Western Electricity Coordinating CouncilCapacity, Demand & Event Definitions

267 2008 Long-Term Reliability Assessment 

# Capacity, Demand & Event Definitions

a) Demand Definitions

Total Internal Demand: Is the sum of the metered (net) outputs of all generators within the system and the metered line flows into the system, less the metered line flows out of the system. The demands for station service or auxiliary need s (such as fan motors, pump motors, and other equipment essential to the operation of the gene rating units) are not incl uded. Internal Demand includes adjustments for all non-dispatchable de mand response programs (such as Time-of-Use, Critical Peak Pricing, Real Time Pricing and System Peak Re sponse Transmission Tariffs) and some dispatchable demand response (such as Demand Bidding and Buy-Back).

Net Internal Demand : Equals the Total Internal Demand reduced by the total Dispatchable, Controllable, Capacity Demand Response equaling the sum of Direct Control Load Management, Contractually Interruptible (Curtailable), Critical Peak Pricing (CPP) with Control, and Load as a Capacity Resource.

b) Demand Forecast Bandwidths The Load Forecast Working Group (LFWG) is responsib le for assessing uncertainty inherent in the forecasts provided by member Regions in accord ance to the NERC standards for the long-term reliability assessments. For this purpose, LF WG develops uncertainty bandwidths around aggregated Regional, United Stat es and Canadian annual forecasts of peak demand and energy. 194

. For a more comprehensive discussion on met hod, a research paper “Method Proposal for the NERC 2008-2017 Regional and National Peak Demand and Energy Projection Bandwidths,” 195

Background - Forecasts cannot precisely predict the future. Instead, many forecasts report a baseline or most likely outcome , and a range of possible outcomes based on probabilities around the baseline or midpoint . Each NERC's Region Member is responsible to provide demand forecasts for the long term Reliability Asse ssment 2008-2017. Each regional demand forecast, for example, is assumed to represent the expected midpoint of possible future outcomes. This means that a future year’s actual demand may deviate fr om the midpoint projections due to variability in key factors that drive electrical use. In the case of the NERC regional forecas ts, there is generally a long-run 50% probability that actual demand will be higher than the forecast midpoint and a longrun 50% probability that it will be lower.

For securing energy supply or ensuring reliabil ity of the bulk power system, adequate risk management implies defining possible future out comes and their probability of occurrence.

For planning and analytical purpos es, it is useful to have an es timate not only of the expected midpoint of possible future outcomes, but also of the distribution of probabilities around the projection. Accordingly, LFWG develops uppe r and lower 10% confid ence bands around the NERC regional peak demand and energy forecasts. This means that there is a long-run 80% probability that future demand and ener gy will occur within these bands. Conversely, there is a

194 For the full report, see http://www.nerc.com/docs/pc/lfwg/NERC_2008-2017_Regional_Bandwidths.pdf
195 http://www.nerc.com/docs/pc/lf wg/Method_for_2008-2017_Bandwidths.pdfCapacity, Demand & Event Definitions

268 2008 Long-Term Reliability Assessment 10% chance that future outcomes could be less th an the lower band, and a 10% chance that future outcomes could be higher than the upper band.

Overview of Method - LFWG continued to introduce enhancements to the regional bandwidth method this year. The previous method used first order autoregressive mode ls for every region’s energy, summer peak, and winter peak. Although us ing a single statistical time-series model has merits and results were satisfactory, LFWG desi red to investigate other approaches and model specifications for possible improvements or better model fits. Optimal modeling for each Region and each series (energy, summer peak, and winter peak) was identified by the LFWG members.

It leads to an automated model selection proc edure based on minimizing the BIC statistic, or Schwarz Bayesian Information Criterion. [BIC = n * ln(MSE) + k * ln(n) ], where MSE = (SSE/n) is the mean squared errors, n is the number of ob servations, and k is the number of parameters. The study looked at a variety of univariate time-ser ies models including simple ARIMA models, the original first order autoregressive model, a fi rst order moving average model, and random walk, with and without drift. The study also looked at a linear trend, simple exponential smoothing, and other smoothing techniques such as Holt, Holt/Win ters, and damped exponential. Results indicate candidate models can be limited to the four simp le ARIMA type models, since in both cases the method selected only those models (See Table A-1).

No. Candidate Model Form ARIMA (p,d,q)Notation Frequency

1 Random Walk with drift y t = μ + y t-1 + ε t (0,1,0) with Intercept 17 2 Random Walk without drift y t = y t-1 + ε t (0,1,0) without Intercept 4 3 Moving Average y t = μ +ε t + θε t-1 (0,1,1) with Intercept 7 4 Autoregressive y t = μ + ρ y t-1 + ε t (1,1,0) with Intercept 5 Table A-1: Models for Bandwidth Calculations The principal features of the regional bandwidth method include:

1. The regional projections of de mand and net energy for load ar e modeled as a function of past peak demand or energy. An optimal mo del is selected for each region’s energy, summer peak, and winter peak (33 models in all).

2. The most frequent (17 out of 33) optimal model was the ra ndom walk model with drift specification. This approach expresses the current value of the time series as a linear function of the previous values of the se ries and a random shock. The functional form again is:
y t = μ + y t-1 + ε t

where μ is a constant term. The shocks are random errors or white noise and are assumed to be normally and independently dist ributed with mean zer o, constant variance, and independent of

3. In cases where membership changes resulted in significant change s to a region’s energy and load, an intervention variable is added to the equation to allow the bandwidths to suitably depict post-change energy and load uncertainty. The historic variability observed in demand and energy is used to develop uncertainty bandwidths for demand and energy projections. Variability, represented by the variance of the historic data series, is combined with other model information to derive the uncertainty bandwidths unique to each regional projection. t ε

2

ε σ 1

− t y

2

ε σCapacity, Demand & Event Definitions

269 2008 Long-Term Reliability Assessment Each of the eight US and three Canadian regi ons is modeled separate ly with three regions segmented into their United States and Canadian counterparts. Irregular pa tterns of deregulation, different economic trends, and variable weather patte rns contribute to the variability of actual peak demand and electricity use. The response to these factors differs across regions due to different weather variation, economic cond itions, energy prices, and regulat ion/deregulation policies. The bandwidths around NERC regional projections of long-term peak demand forecasts implicitly reflect the combined uncertainty from these f actors. Accordingly, th e bandwidth results on a region-by-region basis are unique.

Results 196 - The bandwidths produced are theoreti cal bandwidths based on mathematical representations of the series. Th ey are derived from in sample residuals (fitting errors) and 80% standard normal confidence intervals. Bandwidths obt ained with the theoretical formulas are then proportionally projected onto the regiona l forecasts provided by the Regions.

Table A-2 shows the optimal model for each region based on the BIC statistic. The graphical and numerical results of the bandwidth analyses follow in the figures and tables below:

Table &

Figure Region Net Energy for Load Summer Demand Winter Demand 1 ERCOT RW with drift RW with drift RW with drift 2 FRCC RW with drift Autore gressive Autoregressive 3 MRO-US RW with drift RW without drift Autoregressive 4 NPCC-US RW with drift RW w ithout drift RW without drift 5 RFC RW with drift Autore gressive RW without drift 6 SERC RW with drift RW with drift RW with drift 7 SPP RW with drift Autore gressive RW with drift 8 WECC-US Moving Average Moving Average Moving Average 9 MRO-Can RW with drift Moving Average Moving Average 10 NPCC-Can RW with drift RW with drift RW with drift 11 WECC-Can RW with drift Moving Average Moving Average 12 US Sum of regions Sum of regions Sum of regions 13 Canada Sum of regions Sum of regions Sum of regions Table A-2: Optimal Model for Ba ndwidth Calculation by Region

The traditional method for choosing or “identifying” the correct fo rm of an ARIMA model is to visually examine the autocorrelation and partial auto correlation functions of the data series. Doing this for the energy series results in the same outcom e as the optimization method for all cases where the Random Walk with drift model is op timal. Where the optimization method chose an MA model for WECC-US energy, vi sual identification indicates a toss-up between the MA and AR models.

196 During the 1990s and 2000s several regions including MAIN , MAPP, MRO, RFC, SERC and SPP experienced changes in membership and geography. The historical net energy an d peak load data and figur es depict these changes.Capacity, Demand & Event Definitions

270 2008 Long-Term Reliability Assessment c) Demand Response Categorization Information about demand response categories in Phase 1 were collected for the 2008 Long Term Reliability Asse s sment. Figure A-1 provides an overvie w of NERC’s Demand-side management categories. Figure A-1: Demand-Side Management and NERC’s Data Collection

Each of these elements of demand response is defined below: Demand Response : changes in electric use by demand-side resources from their normal consumption patterns in response to changes in th e price of electricity, or to incentive payments designed to induce lower electricit y use at times of high wholesale market prices or when system reliability is jeopardized Dispatchable : demand-side resource curtails according to instruction from a control center

Controllable : dispatchable demand response, demand- side resources used to supplement generation resources resolving system and/or local capacity constraints Capacity : demand-side resource displaces or augments generation for planning and/or operating resource adequacy; pe nalties are assessed for nonperformance Direct Control Load Management : demand-side management that is under direct remote control of a control cente r. It is the magnitude of customer demand that can be interrupted at th e time of the Regional Council seasonal peak by direct control of the System Op erator by interrupting power supply to individual appliances or e quipment on customer premises. Contractually Interruptible (Curtailable) : curtailment options integrated into retail tariffs that provide a rate discount or bill credit for agreeing to reduce load during system contingencies. It is the magnitude of customer demand that, in Demand Side Management (DSM)

Demand Response (DR) New Energy Efficiency

Dispatchable Non-Dispatchable

Controllable Economic

Energy-Price Capacity Ancillary EnergyVoluntary

Direct Load Control

Interruptible

Demand

Critical Peak Pricing w/Control

Load as a Capacity Resource Spinning Reserves

Non-Spin Reserves

Regulation Emergency Demand Bidding & Buyback Time-Sensitive Pricing

Time-of-Use

Critical Peak Pricing

Real Time Pricing

System Peak Response

Transmission Tariff

P

h a s e 2 A r e a s o f I n t e r e s t

N E R C I n a u g u r a t e d P r o j e c t e d D R D a t a C o l l e c t i o n i n 2 0 0 8Capacity, Demand & Event Definitions

271 2008 Long-Term Reliability Assessment accordance with contractual arrangements, can be interrupted at the time of the Regional Council’s seasonal peak. In some instances, the demand reduction may be effected by action of the System Operator (remote tripping) after notice to the customer in accordance with contractual provisions. Critical Peak Pricing (CPP) with Control : demand-side management that combines direct remote control with a pre-specified high price for use during designated critical peak pe riods, triggered by system contingencies or high wholesale market prices. Load as a Capacity Resource: demand-side resources that commit to prespecified load reductions when system contingencies arise Ancillary : demand-side resource displaces generation deployed as operating reserves and/or regulation; penalties are assessed for nonperformance Non-Spin Reserves : demand-side resource not c onnected to the system but capable of serving demand within a specified time Spinning/Responsive Reserves: demand-side resources that is synchronized and ready to provide solutions for ener gy supply and demand imbalance within the first few minutes of an electric grid event. Regulation : demand-side resources respons ive to Automatic Generation Control (AGC) to provide normal regulating margin Energy-Voluntary: demand-side resource curtails voluntarily when offered the opportunity to do so for compensation, but nonperformance is not penalized Emergency: demand-side resource curtails duri ng system and/or local capacity constraints Non-dispatchable 197 : demand-side resource curtails according to tariff structure, not instruction from a control center Time-Sensitive Pricing: retail rates and/or price stru ctures designed to reflect timevarying differences in wholesale electricity costs, and thus provide consumers with an incentive to modify consumption behavior during high-cost and/or peak periods
Time-of-Use (TOU) : rate and/or price structures with different unit prices for use during different blocks of time Critical Peak Pricing (CPP) : rate and/or price structure designed to encourage reduced consumption during periods of hi gh wholesale market prices or system contingencies by imposing a pre-specified high rate for a limited number of days or hours Real Time Pricing (RTP) : rate and price structure in which the price for electricity typically fluctuates to refl ect changes in the wholesale price of electricity on either a day-ahead or hour-ahead basis System Peak Response Transmission Tariff : rate and/or price structure in which interval metered customers reduce load during coincident peaks as a way of reducing transmission charges

197 Projected Non-dispatchable demand response is not currently collected for reliability assessment.Capacity, Demand & Event Definitions

272 2008 Long-Term Reliability Assessment d) Capacity, Transaction and Margin Categories

Capacity Categories

Existing

a. Certain — This category in cludes all existing resources reasonably anticipated to be available to operate and de liver power to or into the region. b. Uncertain — This category includes mo thballed generation and portions of intermittent generation not included in the “Existing - Certain” category.

Planned — This category includes generation that has achieved one or more of these milestones:

• Construction has started

• Regulatory permits approved

 Site permit

 Construction permit

 Environmental permit

• Approved by corporate or appr opriate senior management

 Included in a capital budget

 BOD approved

Announced/Proposed — This category includes generation that is not in a prior listed category, but has been iden tified through one or more of the following sources:

• Corporate or appropriate se nior management announcement

• Included in integrated resource plan

• Generator Interconnection Queues

Bulk Power System Transactions

Capacity Purchases and Sales – the following categories may be applied to existing and future capacity calculations. Purchases are negative values, sales are positive values. Each interregional purchase/sale has been reported. a) Firm – contract signed b) Non-Firm – contract signed c) Expected – no contract executed, but in negotiation, proj ected, or other. d) Provisional – transactions under study, but negotia tions have not begun.

Resource Margins
Total Internal Capacity

— The Sum of Existing (both Certain and Uncertain) and Planned Capacity.

Existing-Certain Capacity and Net Firm Transactions (MW)

— Existing capacity resources reasonably anticipated to be available and operate as well as deliverable to or into the region plus net Firm Purchases/Sales.

Net Capacity Resources (MW) — Total Internal Capacity, less Transmission-Limited Resources, all Derates, Energy Only, and Inoper able resources; plus net Firm, ExpectedCapacity, Demand & Event Definitions

273 2008 Long-Term Reliability Assessment and Provisional Purchases/Sale s. Net Capacity Resource s do not include Non-Firm Purchases/Sales.

Total Potential Resources (MW) — Total Internal Capacity, less Transmission-Limited Resources plus the net of all Purchases/Sales.

Adjusted Potential Resources (MW) — Net Capacity Resources, Existing Uncertain Resources less all Derates, Total Proposed Resources reduced (multiplied) by a confidence factor (percentage); plus Net Non-Firm Transactions.

Existing Certain Capacity and Net Firm Transactions Margin (%)

— Existing-Certain Capacity and Net Firm Transactions less Net Internal Demand shown as a percent of Existing Certain Capacity and Net Firm Transactions.

Net Capacity Resources Margin (%) — Net Capacity Resources reduced by the Net Internal Demand; shown as a percent of Net Capacity Resources.

Total Potential Resources Margin (%) — Total Potential Resources reduced by the Net Internal Demand; shown as a perc ent of Total Potential Resources

. Adjusted Potential Resources Margin (%) — Capacity margin using the Total Potential Resources reduced (multiplied) by the confidence factor (percentage).

Target Capacity Margin (%) — Established target for capac ity margin by the region or sub-region.

e) How NERC Defines Bulk Power System Reliability

NERC defines the reliability of the interconnected bulk power system in terms of two basic and functional aspects:

• Adequacy — The ability of the bulk power sy stem to supply the aggregate electrical demand and energy requirements of the custom ers at all times, taking into account scheduled and reasonably expected unsc heduled outages of system elements.

• Operating Reliability — The ability of the bulk power sy stem to withstand sudden disturbances such as electric short circuits or unanticipated loss of system elements from creditable contingencies.Capacity, Demand & Event Definitions

274 2008 Long-Term Reliability Assessment Regarding Adequacy , system operators can and should take “controlled” actions or procedures to maintain a continual balance between supply a nd demand within a balancing area (formerly control area). These actions include:

• Public appeals.

• Interruptible demand — customer demand that, in accordance with contractual arrangements,

can be interrupted by direct control of the syst em operator or by action of the customer at the direct request of the system operator.

• Voltage reductions (sometimes referred to as “brownouts” because incandescent lights will dim

as voltage is lowered, sometimes as much as 5 percent).

• Rotating blackouts — the term “rotating” is used because each set of di stribution feeders is

interrupted for a limited time, typically 20–30 minut es, and then those feeders are put back in service and another set is inte rrupted, and so on, rotating the out ages among individual feeders.

Under the heading of Operating Reliability , are all other system distur bances that result in the unplanned and/or uncontrolled inte rruption of customer demand, rega rdless of cause. When these interruptions are contained within a localized area, they are cons idered unplanned interruptions or disturbances. When they spread over a wide ar ea of the grid, they are referred to as “cascading blackouts” — the uncontrolled successive loss of sy stem elements triggered by an incident at any location. Cascading results in widespread electric service interruption that cannot be restrained from sequentially spreading beyond an area predetermined by studies.

What occurred in 1965 and again in 2003 in the northeast were uncontrolled cascading blackouts. What happened in the summer of 2000 in Californi a, when supply was insufficient to meet all the demand, was a “rotating blackout” or controlled inte rruption of customer demand to maintain a balance with available supplies while maintaini ng the overall reliabilit y of the in terconnected system.

f) Event Classifications

In order to gauge operating reliability performa nce and resource adequacy, a set of bulk power system event scale is used to classify bulk power system disturbances by severity, size, and impact to the general public. Events are classified us ing the technical requirements below as a guide.

Category 1 An event results in any or combination of the following actions:

a. The loss of a bulk power transmission comp onent beyond recognized criteria, i.e. single-phase line-to-ground fault with delaye d clearing, line tripping due to growing trees, etc. b. Frequency below the Low Frequency Tri gger Limit (FTL) more than 5 minutes.

c. Frequency above the High FTL more than 5 minutes. d. Partial loss of dc converter station (mono-polar operation).

e. Inter-area oscillations.

Category 2: An event results in any or combination of the following actions:

a. The loss of multiple bulk power transmission components. b. System separation with no loss of load or generation.Capacity, Demand & Event Definitions

275 2008 Long-Term Reliability Assessment c. Special Protection System or Reme dial Action Scheme misoperation. d. The loss of generation (between 1,000 and 2,00 0 MW in the Eastern Interconnection or Western Interconnection and between 500 MW and 1,000 MW in the ERCOT Interconnection).

e. The loss of an entire generation st ation or 5 or more generators. f. The loss of an entire switching st ation (all lines, 100 kV or above).
g. Complete loss of dc converter station.

Category 3: An event results in any or combination of the following actions:

a. The loss of generation (2,000 MW or more in the Eastern Interconnection or Western Interconnection and 1,000 MW or more in the ERCOT Interconnection). b. the loss of load (less than 1,000 MW)

c. System separation or islanding with loss of load or generation (less than 1,000 MW). d. UFLS or UVLS operation.

Category 4: An event results in any or combination of the following actions:

a. System separation or islanding of more than 1,000 MW of load. b. The loss of load (1,000 to 9,999 MW).

Category 5: An event results in any or combination of the following actions:

a. The occurrence of an uncontrolled or cascading blackout b. The loss of load (10,000 MW or more)Major Transmission Projects > 200 kV

276 2008 Long-Term Reliability Assessment 

# Major Transmission Projects > 200 kV

Transmission

Terminal From Location Terminal To Location Line Length (Miles) Voltage Operating (kV) Capacity Rating (MVA) Expected Service

Date
ERCOT

Jacksboro switch W. Denton 72 345 1631 12-2006
STP Dow 0 345 1450 03-2007
Collin Switch NW Carrolton 19 345 1072 05-2016
Anna Switch Collin Switch 13 345 1969 12-2008
W. Levee Norwood 7 345 1631 12-2009

Jewett Big Brown 0 345 1072 12-2008
P H Robinson Oasis 0 345 1173 05-2009 Spruce Skyline 21 345 1446 06-2009
Hutto Switch Salado Switch 32 345 1631 06-2010

W. Denton NW Carrolton 9 345 1631 05-2010
Lobo San Miguel 110 345 1623 07-2009

Zorn Hutto Switch 71 345 1630 08-2011
TNP One Bell County SE 88 345 1631 05-2011 Temple Switch Salado Switch 15 345 1912 05-2010
Tricorner Seagoville Switch 9 345 1072 05-2015
Trinidad Watermill 52 345 1072 05-2015
Krum W and Anna Krum W 50 345 N/A 05-2015
Lobo Rio Bravo 30 345 1939 06-2013

Venus Cedar Hill 21 345 1912 05-2011
Oklaunion Bowman 38 345 2724 12-2012 Ajo Cabillo 25 345 2740 10-2008 Cagnon Hillcountry 20 345 1171 06-2016
Sol Rio Bravo 122 345 N/A 03-2015 N. Edinburg Sol 15 345 N/A 03-2015

Frontera Sol 12 345 N/A 03-2015
La Palma Ranchito 10 345 N/A 06-2015

Frontera South McAllen 12 345 N/A 06-2015
Ranchito South McAllen 38 345 N/A 05-2016 Liggett Trinity Switch 13 345 N/A 05-2015 FRCC

Northeast 40th Street 8 230 810 09-2008
Pasadena 51st Street 1 230 810 09-2008
51st Street 40th Street 1 230 810 09-2008
St. Johns Pringle 25 230 759 12-2008 Bayside Gannon 0.1 230 460 04-2009
Avalon Gifford 7 230 1141 05-2009

Bartow Northeast Circuit 1 4 230 612 06-2009

Bartow Northeast Circuit 2 4 230 612 06-2009

Bartow Northeast Circuit 3 4 230 612 06-2009Major Transmission Projects > 200 kV

277 2008 Long-Term Reliability Assessment Terminal From Location Terminal To Location Line Length (Miles) Voltage Operating (kV) Capacity Rating (MVA) Expected Service

Date

Big Bend (Plant) Big Bend (Switching Station) 0.1 230 460 10-2009
Hines Energy Complex West Lake Wales #2 21 230 1141 05-2010
Bithlo Stanton (OUC) 6 230 1141 05-2010 Intercession City West Lake Wales #2 30 230 1141 06-2010
Stanton Bithlo 4.4 230 800 05-2011 Jax Heights Substation Duval Substation 12.5 230 668 05-2011 Intercession City West Lake Wales #1 30 230 1141 06-2011 Lake Agnes (TECO) Gifford 32 230 1141 06-2011

Manatee BobWhite 30 230 1190 12-2011

Polk Power Station Polk Switching Station 0.7 230 650 04-2012

Bartram Substation Switzerland Substation 6.88 230 668 05-2012
Southeast Generating Station Bartram Substation 8.84 230 668 05-2012

Bartram Substation Sampson Substation 4.04 230 668 05-2012

Bartram Substation Switzerland Substation 6.88 230 668 05-2012

Polk Pebbledale (1) 13.5 230 749 06-2012
Polk Pebbledale (2) 9.9 230 1013 06-2012 Hopkins-Crawford 230 TAP SUB 5 230 10 230 464 06-2012
Gilchrist Generating Station Gilchrist Switching Station 10 230 1195 12-2012
Gilchrist Generating Station Gilchrist Switching Station 10 230 1195 12-2012

Polk FishHawk 28 230 1013 12-2012
Ft White Suwannee 40 230 1141 06-2013
St. Cloud South KUA 10 230 800 11-2015 Levy Central FL South 50 500 2870 06-2016 Levy Crystal River 10 500 2870 06-2016
SUB 5 230 SUB 7 230 13 230 464 06-2016
Kathleen Lake Tarpon 45 230 1141 06-2016
Citrus Crystal River East #1 6 230 1141 06-2016
Citrus Crystal River East #2 6 230 1141 06-2016 Levy Citrus #1 10 500 2870 06-2016 Levy Citrus #2 10 500 2870 06-2016 Crystal River Brookridge 35 230 1141 06-2016 Brookridge Brooksville West 4 230 1141 06-2016 MRO

Stone Lake Arrowhead (WUMS) 79 345 1219 01-2008
Paddock Rockdale (WUMS) 30 345 1348 2010

Gardner Park Highway 22 (WUMS) 55 345 1425 2010

Morgan Highway 22 (WUMS) 27 345 1425 2010

Werner West Highway 22 (WUMS) 24 345 1425 2010

Rockdale West Middleton (WUMS) 21 345 1195 2013
Brookings County White 10 345 TBD 2009Major Transmission Projects > 200 kV

278 2008 Long-Term Reliability Assessment Terminal From Location Terminal To Location Line Length (Miles) Voltage Operating (kV) Capacity Rating (MVA) Expected Service

Date

Big Stone II outlet Granite Falls (SD/MN) 100 230 TBD 2011

Boswell Wilton (MN) 68 230 TBD 2012 Fargo St. Cloud (MN) 250 345 TBD 2015

Twin Cities N. Rochester-La Crosse (MN/WI) 150 345 TBD 2015
Brookings Twin Cities (SD/MN) 225 345 TBD 2015

Columbus East LES NW68th & Holdrege (NE) 67 345 1195 2010

Columbus East Shell Creek (NE) 12 345 1195 2010
Shell Creek Hoskins (NE) 45 345 1195 2008

Wagener NW68th & Holdrege (NE) 26 345 TBD 2009

S3458 103rd & Rokeby Road (NE) 49 345 TBD 2009
103rd & Rokeby Rd Substation - 345 TBD 2009

Salem Lore – Hazleton (IA) 75 345 1195 2011
South-Central Saskatchewan 99 230 TBD 2010
Conawapa Riel DC (MH) 833 500 2 2017
Wuskwatim Herblet Lake (MH) 86 230 420 2010

Wuskwatim Herblet Lake (MH) circuit 2 86 230 420 2010

Herblet Lake Ralls Island (MH) 103 230 420 2011 Dorsey Portage South (MH) 43.5 230 284 2013 NPCC
Coleson Cove Salisbury 103 345 TBD Bridgewater Carver 345 04-2009 Pilgrim Carver 345 04-2009 Stoughton Mattapan 345 06-2009 Mattapan K Street 345 06-2009 Beseck Junction East Devon 345 08-2008 East Devon Singer 345 12-2009 Singer Norwalk 345 12-2009 Tewksbury Wakefield Jct. 345 07-2009 Wakefield Jct. Mystic 345 07-2009New England

Singer Norwalk 345 12-2009

Sprain Brook Sherman Creek 10 345 872-S/1010- W 2011-Sum

Willis 1 Patnode 9.1 230 426-S/545-W 2008/09- Win

Patnode Duley 15.3 230 426-S/545-W 2008/09- Win

Duley Plattsburgh 9.3 230 426-S/545-W 2008/09- Win

Willis 2 Ryan 6.5 230 426-S/545-W 2008/09- Win

Ryan Plattsburgh 27.2 230 426-S/545-W 2008/09- WinNew York

Princetown S. Saratoga #3 17 345 2018Major Transmission Projects > 200 kV

279 2008 Long-Term Reliability Assessment Terminal From Location Terminal To Location Line Length (Miles) Voltage Operating (kV) Capacity Rating (MVA) Expected Service

Date
Princetown S. Saratoga #4 17 345 2018

Outaouais Hawthorne 25 230 06-2009 Essa Stayner 17 230 06-2009

Cardiff Hurontario 3 230 05-2010

Hurontario Jim Yarrow 2 230 05-2010 Ingersoll Woodstock 10 230 06-2010

Bruce Milton 115 500 03-2012 Allanburg Middleport 50 230 TBD

Lakehead Birch 13 230 2013
Hanmer or Sudbury Greater Toronto 180-250 500 2017 Missisagi Hanmer 130 230 2017

Pinard Hanmer 230 500 2017 Mackay Third Line 60 230 2017 Nipigon Little Jackfish 120 230 2017

Seaforth Goderich 25 230 2015

Owen Sound Bruce Peninsula 30-50 230 2015 Manitowaning Espanola 50 230 2015 Nobel Series Compensation N/A 500 12-2010Ontario

Porcupine Static VAR Compensator N/A 230 11-2010

Rimouski Les Boules 34 230 12-2008

Les Boules Matane 58 230 12-2008

Rimouski Matane 5 230 12-2008

Matane Goemon 44 230 12-2008

Carleton Line2398 7.5 230 12-2008

Les Mechins Line 23 YY 6 230 12-2009

Chenier Outaouais 71 315 05-2010

Eastmain-1A Eastmain-1 1 315 07-2010

Sarcelle Eastmain-1 69 315 07-2010

Goemon Mont-Louis 46 315 12-2010

Goemon Gros Morne 56 315 12-2011

Romaine-2 Arnaud 163 315 12-2014Québec

Romaine-1 Romaine-2 19 315 12-2016 RFC
Cranberry Wylie Ridge 40 500 2800/3600 12-2011
Bismarck Troy 14 345 700 05-2010
Goodison Belle River 35 345 1757 12-2009
Goodison Pontiac 6 345 1757 12-2009
Edenville Warren 15 138 345 06-2010 Argenta Palisades 1 40 345 1238 06-2010 Argenta Palisades 2 40 345 1238 06-2010 Keystone Clearwater 23 138 345 05-2009 Simpson Batavia 22 138 345 12-2009
Almeda Saginaw River 25 138 345 05-2010 Tippy Chase 30 138 345 12-2010 Algoma Cedar Spring Jct 2 138 345 05-2011
Croton Cedar Spring Jct 16 138 345 05-2011
Croton Felch 9 138 345 12-2009Major Transmission Projects > 200 kV

280 2008 Long-Term Reliability Assessment Terminal From Location Terminal To Location Line Length (Miles) Voltage Operating (kV) Capacity Rating (MVA) Expected Service

Date

Richland Titabawassee 12 345 1236 04-2009
Richland Nelson Rd 47 345 1236 04-2009
Possum Point Burches Hill 3 230 TBD 06-2013
Burches Hill Chalk Point 19 500 TBD 06-2013
Chalk Point Calvert Cliffs 19 500 TBD 06-2013
Sourth Akron Berks 12 230 264 06-2008 Bergen Leonia 3 230 366 06-2008 Branchburg Flagtown 4 230 878 06-2008
Roseland Montville 7 500 3005 06-2012
Montville Jefferson 15 500 3005 06-2012
Jefferson Bushkill 22 500 3005 06-2012 Hope Creek Cedar Creek 12 500 3005 06-2013
Linden South Waterfront 6 230 873 06-2011
Gibson Brown 34 345 1400 12-2010
Reid Brown 25 345 1400 12-2010 SERC

Cumberland Montgomery 40 500 2598 06-2008 Maury Rutherford 27 500 1732 04-2010
J.K. Smith West Garrard County 33 345 1947 12-2009
Mill Creek Hardin County 42 345 1195 12-2009 Trimble County Ghent-Speed Line 3 345 1195 03-2009

Resaca Moss Lake 9 230 265 10-2010
Hardin Co. Smith OMU -66 345 535 02-2008
Hardin Co. Daviess Co. 59 345 535 02-2008
Smith OMU Daviess Co. 7 345 535 02-2008
Brown North West Garrard 14 345 1195 05-2009Central

Pineville West Garrard 89 345 1195 05-2009 Cypress Jacinto 53 230 884 06-2012

Porter Lewis Creek 28 230 884 06-2014
Winnfield Danville 21 230 521 06-2014
Jacinto Lewis Creek 29 230 884 06-2010
Franklin Natches SES 51 230 400 06-2012 Coly Hammond 20 230 640 09-2012
Franklin McComb 24 230 400 06-2013Delta

Chouteau GRDA 100 345 954 06-2011
Loose Creek Mariosa Delta 11 345 1793 06-2008
Joachim Substation Tyson Substation 0 345 1195 10-2008
Rush Island Plant Joachim Substation 0 345 1200 10-2008
Baldwin Power Plant Substation Prairie State Power Plant 2 345 1297 06-2010

Baldwin Power Plant Substation Prairie State Power Plant 8 345 1297 06-2010

Baldwin Power Plant Substation Rush Island Plant Substation 26 345 1793 06-2010

Prairie State Power Plant Stallings Substation 8 345 1195 06-2010Gateway

Prairie State Power Plant W. Mount Vernon Substation 2 345 1195 06-2010Major Transmission Projects > 200 kV

281 2008 Long-Term Reliability Assessment

AnnistonHammond line North Anniston 1 230 502 03-2017
Arkwright West Milledgeville 33 230 866 06-2016
Athena Rainey 45 230 866 06-2012
Battlefield Frey Road 3 230 866 11-2009
Bethabara Clarksboro 15 230 602 12-2009
Bethabara East Walton 8 230 602 06-2011
Bethbara East Walton (black) 6 230 602 06-2014
Bostwick East Walton 4 230 602 06-2011

Bowen Villa Rica 28 230 1578 06-2009
Braselton Sharon Church 3 230 602 06-2008
Bucks SS Tensaw SS 9 230 865 08-2009
Calvert SS Tensaw SS 5 230 865 05-2009 Camp Creek Cliftondale 5 230 602 10-2008
Clermont Jct South Cleveland 17 230 602 06-2014
Clermont Jct. South Cleveland 23 230 602 06-2014
Clermont Junction Dawson Crossing 20 230 602 08-2012
Cliftondale Ono 6 230 602 06-2013 Cumming Sharon Springs 7 230 602 06-2011 Dawson Crossing Palmer Creek 4 230 602 06-2008 Deptford Kraft 13 230 433 06-2011

Dorsett Jct-57a Substation 11 230 602 06-2013

Dum Jon Thomson Primary 23 230 596 06-2010
East Lake Road Jackson Creek 9 230 602 06-2010
East Lake Road Ola 4 230 602 06-2010
East Walton Jack's Creek 9 230 602 06-2011
East Walton Rockville 40 500 3464 06-2011
Ellicott TS West McIntosh 1 230 602 12-2008 Ellijay Primary Cherry Log 12 230 602 06-2012 Farley Raccoon Creek 60 230 602 06-2013 Farley-Scholz line Cottonwood TS 1 230 502 04-2011
Forrest Road West Milledgeville 35 230 602 06-2015 Frey Road Huntsville 5 230 866 11-2009
Gaston Bessemer 1 230 502 04-2009
Gordon North Dublin 32 230 602 06-2014
Homeland Kettle Creek 36 230 602 06-2008 Hopewell McGrau Ford (black) 11 230 602 06-2013
Jack's Creek Cornish Mountain 15 230 602 06-2011 JC Penny tap JC Penny 2 230 602 06-2014
Jim Moore Road Sharon Church 11 230 602 06-2010
Kiln Carriere SW 26 230 602 06-2011
Klondike Jackson Creek 4 230 602 06-2008 Laguna Beach Santa Rosa 22 230 602 06-2012 Lansing Smith Laguna Beach 14 230 602 06-2010
Line Creek Ono 6 230 602 06-2014
LPM-Monroe-str 31 Str. 31 (Cornish Mountain) 4 230 580 06-2011

McConnell Road Woodlore 5 230 866 06-2009 McDonough Ola 10 230 602 06-2015
McGrau Ford Hopewell 12 230 602 06-2015Southeastern

Mitchell Slappy Drive 13 230 602 05-2016Major Transmission Projects > 200 kV

282 2008 Long-Term Reliability Assessment

O'Hara McDonough 20 230 602 06-2014
Ono Line Creek 3 230 602 06-2013 Pegamore Huntsville 2 230 866 06-2010 Plant McDonough Smyrna 6 230 1205 06-2010 Plant McDonough CC Plant McDonough (black) 1 230 1205 06-2011
Plant McDonough CC Plant McDonough (white) 1 230 1205 06-2011

Prattville CT TS County Line Road TS 1 230 1003 10-2013

Shoal Creek Suwanee 8 230 602 06-2013 South Dahlonega Palmer Creek 8 230 602 06-2014
South Hall Suwanee 10 230 664 06-2016
Thomson Warthen 35 500 3464 06-2010 Thomson Primary Vogtle 50 500 2701 06-2016 Vogtle Thomson 70 500 3464 06-2015
Woodlore Battlefield 3 230 866 06-2009
Brambleton Greenway 11 230 796 05-2008
Bennettsville Bennettsville (PEC) 2 230 956 05-2008
Clarendon Rosslyn 1 230 600 05-2008
Durham Falls 8 230 1195 06-2008
Cross Aiken 88 230 956 06-2008 Kingstree Lake City 13 230 956 01-2009 Denny Terrace Pineland 8 230 950 05-2009
Rockingham Wadesboro Bowman School 12 230 1256 06-2009

Bristers Gainesville 15 230 1047 06-2009 Chickahominy Old Church 16 230 797 11-2009
A M Williams Mt Pleasant 17 230 352 05-2010
Hamilton Pleasant View 12 230 800 05-2010 Harrisonburg Valley 11 230 797 05-2010
Clinton Lee 26 230 628 06-2010 Chickahominy Lanexa 14 230 722 06-2010
Asheville Enka 5 230 566 12-2010 Rockingham West End 38 230 1195 06-2011
Kinston DuPont Greenville 30 230 628 06-2011
Asheboro Pleasant Garden 22 230 1195 06-2011
Harris RTP 22 230 1195 06-2011
Pleasant Garden Asheboro 20 230 1100 06-2011 Rockingham Lilesville 14 230 1195 06-2011
Loudoun Mt Storm 100 500 3450 06-2011
Carson Suffolk 50 500 3450 06-2011
Suffolk Thrasher 26 230 1047 06-2011
Bristers Garrisonville 13 230 1047 06-2011
Gainesville Remington 25 230 1047 04-2012 Pepperhill Summerville 7 230 950 05-2012 Elizabeth City Shawboro 10 230 1047 06-2012 Winyah Campfield 14 230 956 12-2012 Canadys Church Creek 38 230 950 12-2013 Canadys Pepperhill 35 230 950 12-2013 Pepperhill Church Creek 16 230 950 12-2013VACAR

VC Summer VC Summer #2 1 230 950 12-2013Major Transmission Projects > 200 kV

283 2008 Long-Term Reliability Assessment

VC Summer VC Summer #2 1 230 950 12-2013 Canadys Church Creek -38 230 352 12-2013
Reeves Avenue Sewells Point 11 230 1047 05-2015
Landstown Virginia Beach 11 230 800 05-2015
Clark Idylwood 4 230 515 05-2015
VC Summer Killian 38 230 950 12-2015
VC Summer #2 Lake Murray 19 230 950 12-2015 Denny Terrace Lyles 3 230 950 12-2015 Urquhart Graniteville 18 230 950 05-2016 Urquhart Graniteville -38 230 352 05-2016
Bristers Possum Point 35 500 3464 05-2016
Chesterfield Midlothian 22 230 1047 05-2016 Cape Fear Siler City 30 230 628 06-2017
Florence Marion (PEC) 26 230 628 06-2017 SPP
Blackberry Chouteau 108 345 1099 06-2010
Chouteau GRDA1 5 345 1099 06-2010 Chamber Springs Tonitown 14 345 1176 06-2008
Turk NW Texarkana 34 345 1778 06-2011
Centerton Oasge Creek 41 345 440 06-2016
Sooner OK/KS Border 53 345 1052 12-2010
Valiant Hugo 19 345 956 12-2008
Wichita Reno County 40 345 1468 12-2008 Reno County Summit 51 345 956 12-2009
Rose Hill OK/KS Border 53 345 1052 12-2010
Potash Junction Interchange Pecos Interchange 16 230 541 06-2009
Seven Rivers Interchange Pecos Interchange 18 230 541 06-2009 Pringle Interchange Hitchland 34 230 541 12-2010
Moore Co Hitchland 50 230 541 12-2010
Hitchland Perryton 35 230 541 12-2010
ELK CITY Stateline 6 48 230 351 06-2010 Grapevine Interchange Stateline 6 48 230 351 06-2010 Mustang Station Seminole 21 230 541 06-2009
Hobbs Seminole 45 230 541 06-2010 WECC

Montana Alberta 80 230 TBD 05-2009

Montana Alberta 135 230 TBD 05-2009
Northwest Alberta Reinforcement 83 144 330/422 04-2010

Northwest Alberta Reinforcement 145 240 TBD 04-2010

Midpoint Boise Bench: Loop King 80 230 TBD 06-2010
Populus Terminal 135 345 TBD 06-2010
Gonder Harry Allen 250 525 3000 06-2012
Northwest Alberta Reinforcement 135 144 TBD 04-2011
East Kootenay Reinforcement 80 230 TBD 10-2011NWPP

Edmonton Calgary Transmission Reinforcement 206 500 3000 11-2011Major Transmission Projects > 200 kV

284 2008 Long-Term Reliability Assessment

Rock Springs, WY American Falls, ID 1041 500 TBD 06-2012 Hemingway Boardman 202 500 3000 06-2012
Mountain States Transmission Intertie 460 500 1500 01-2013

Pearl Transmission Station 78 230 394 05-2014

Shoshone, ID Walters Ferry, ID 126 500 3000 06-2014 Nicola, BC Meridian, BC 153 500 TBD 10-2014 Donkey Creek Pumpkin Buttes 75 230 TBD 10-2008 Hughes Sheridan 105 230 460 12-2009
Miracle Mile Ault 146 239 402 12-2009
Comanche Midway 50 230 506 05-2010
Comanche Daniels Park 125 345 1200 05-2010
Comanche Daniels Park 125 345 1200 05-2010 Midway Waterton 82 345 1200 11-2010 San Luis Valley Walsenburg 80 230 613 12-2011RMPA

Pawnee Smoky Hill 96 345 735 05-2013 Southeast Valley Project 51 500 1405 06-2008
Navajo Transmission Project 189 500 1300 04-2009

Navajo Transmission Project 62 500 1300 12-2010

Southeast Valley Project 87 500 1405 05-2011

Centennial II Project 61 525 3000 06-2011
Navajo Transmission Project 218 500 1300 12-2011

Palo Verde North Gila 115 500 1200 06-2012AZ / NM / SNV

Tortolita Vail 60 345 925 06-2014

Metcalf Moss Landing Reconductoring 70 230 TBD 12-2008
Big Creek 3 Rector 75 230 460 04-2009
Palo Verde Devers 225 500 TBD 06-2011 IPPDC Upgrade 488 ± 500 TBD 07-2009
Sunrise Powerlink (IV-Central) 100 500 TBD 06-2011
Barren Ridge Castaic 72 230 TBD 07-2005 Barren Ridge Castaic 234 230 TBD 07-2005
Green Path North 85 500 TBD 11-2013 La Jovita, MX La Herradura MX 50 230 430 10-2013CA / MX

El Cañon, MX El Ciprés, MX 52 230 430 06-2015Major Transmission Projects > 200 kV

285 2008 Long-Term Reliability Assessment Transformers

Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

ERCOT
Seagoville Switch 345/138 kV autotransformer 345 138 12-2008 Replace the existing 345/138 kV autotransformer

Roanoke Switching Station #1 345/138 kV autotransformer replacement 345 138 05-2009 Replace existing 345/138 kV autotransformer

Tyler Grande 345/138 kV Switching Station 345 138 05-2009 Construct switching station and install a 345/138 kV autotransformer, 138 kV capacitor and 138 kV series reactor
Second Whitney 345/138 Autotransformer 345 138 09-2009 Install second 450MVA 345/138KV auto at Whitney

Second Concord 345/138 Autotransformer 345 138 09-2009 Install second 300MVA 345/138KV auto at Concord

CenterPoint Energy/TNMP Alvin interconnection 345 138 10-2009 Build a new 345 kV, 3 breaker ring bus South Alvin substation looped into ckt.99 P.H. Robinson - Oasis. Add 345/138 kV autotransformer at new South Alvin substation interconnect with TNMP 138 kV North Alvin bus.

Skyline - Install a Third 345kV Autotransformer 345 138 11-2009 Install one 600 MVA autotransformer.

Lobo, build 345 kV for 675MVA autotransformer 345 138 12-2009 Construct new Laredo Lobo to San Miguel 345 kV line with Laredo Lobo 345/138 kV substation where the existing Falfurri as to Laredo 138 kV and the Freer to Laredo 69 kV transmission lines cross Highway 59, rebuild Laredo Lobo to Laredo 138 kV line and convert Lobo to Laredo 69 kV line section to 138 kV

Eagle Mountain 345/138 kV autotransformer 345 138 05-2010 Install second 345/138 kV autotransformer

Rothwood 345/138 kV substation 345 138 05-2010 Build a new 345/138 kV Rothwood substation. Loop ckt.74 Kuykendahl to King and 138 kV ckt.66 Rayford tap section into the new substation. Add one 800 MVA 345/138 kV autotransformer at Rothwood substation.

Hutto Switch and 345/138 kV autotransformer 345 138 06-2010 Create 345 kV switching station and install a 345/138 kV autotransformerMajor Transmission Projects > 200 kV

286 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Lytton Springs Autotransformer Addition 345 138 06-2010 Add a new 345-138 kV 478 MVA autotransformer at the Lytton Springs substation (9074). Terminate the Mendoza (7325) - Turnersville (7500) 138 kV transmission line (T-382) into the Lytton Springs substation 138 kV bus (9075), creating the new Turnersville (7500) - Lytton Springs (9075) and Mendoza (7325) - Lytton Springs (9075) 138 kV transmission lines. Upgrade the new Turnersville (7500) - Lytton Springs (9075) 138 kV transmission line from 795 ACSR (220MVA) to 1433 ACSS/TW (507 MVA). Upgrade the new Mendoza (7325) - Lytton Springs (9075) 138 kV transmission line from 795 ACSR (220 MVA) to bundled 795 ACSR (440 MVA).

Sargent Road 345/138 kV autotransformer 345 138 05-2011 Install second 345/138 kV autotransformer

N Edinburg to Frontera, build 345 kV dbl crct Line 345 138 05-2011 Addition North Edinburg to Frontera 345 kV line with bundled 1590 ACSR and double circuit capable structures and 345/138 kV substation at Frontera

2nd Lewisville Auto 345 06-2011 Install (2nd) 345/138 kV autotransformer at Lewisville station

Gilleland 345/138kV autotransformer 345 138 06-2011 Install a 600 MVA 345/138kV autotransformer at the new Gilleland switching substation

Gilleland 345/138 kV Project 345 138 06-2012 Establish a 345kV switching station adjacent to LCRA's Gilleland station. Establish a new 138kV circuit from Gilleland to Techridge and maintain a normally close tie between AEN and LCRA's switchyard at Gilleland.

Dunlap Autotransformer 345 138 08-2012 The original proposal is to add the 3rd autotransformer at Austrop. The extended outage necessary for the project has resulted in the alternative to install a 600MVA auto at the Dunlap substation. The Clear Springs to Gilleland 345kV circuit will terminate on the 345kV bus at Dunlap. In addition, the existing ckt 921 will be converted to 345kV and terminate at the 345kV bus at Dunlap.

Cagnon - Install a Third 345kV Autotransformer 345 138 06-2013 Install one 600 MVA autotransformer.

North McCamey Three 345/138 kV autotransformers 345 138 06-2013 12/02 plan recommends the addition of Three 345/138kV autotransformers North McCamey

Lobo to Rio Bravo, build 345 kV line 345 138 06-2013 Construct 345 kV line from Lobo to Rio Bravo and add 345/138 kV substation at Rio Bravo with 345/138 kV autotransformerMajor Transmission Projects > 200 kV

287 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Zorn Autotransformer Addition 345 138 06-2013 Add a new 345-138 kV 478 MVA autotransformer at the Zorn substation (7042).

Rio Bravo, 345 kV SS with 345/138 kV autotransformer 345 138 03-2015 Construct 345 kV line from Lobo to Rio Bravo and add 345/138 kV substation at Rio Bravo with 345/138 kV autotransformer

Frontera, add SS with 345/138 kV autotransformer 345 138 03-2015 Addition North Edinburg to Frontera to South McAllen 345 kV line with bundled 1590 ACSR conductor and double circuit capable structures and 345/138 kV substation at Frontera

Sol, Build 345 KV SS 345 138 03-2015 Construct 345 kV line from Rio Bravo to Sol to N Edinburg and add 345/138 kV substation at Rio Bravo with 345/138 kV autotransformer

Trinity Switch 345/138 kV autotransformer 345 138 05-2015 Create Trinity Switch and install a 600 MVA 345/138 kV autotransformer
Lavon 345/138 kV Switching Station 345 138 05-2015 Construct 345/138 kV switching station

Liggett 345/138 kV autotransformer 345 138 05-2015 Replace the existing 450 MVA 345/138 kV autransformer

Collin 345/138 kV autotransformer 345 138 05-2015 Install second 345/138 kV autotransformer

North Lake 345/138 kV autotransformer 345 138 05-2015 Install a 345/138 kV autotransformer

Loma Alta 345kV station and autotransformer 345 138 06-2015 Construct a 345 substation and connect to the existing Loma Alta 138 substation.

Ranchito, New SS with 345/138 kV autotransformer 345 138 06-2015 Construct 345 kV line from LaPalma to Ranchito to South McAllen and add 345/138/69 kV substation adjacent to existing Cavazos 69 kV substation with 600 MVA 345/138 kV autotransformer

South McAllen, new SS with 345/138 kV autotransformer 345 138 06-2015 Add Frontera to South McAllen 345 kV line with bundled 1590 ACSR and double circuit capable structures and 345/138 kV substations at Frontera and South McAllen

FRCC

Central Florida south transformer 500 230 Summer 2016 Planned

Alico transformer 230 138 Winter 2008/09 Planned

Buckingham transformer 230 138 Winter 2009/10 Planned

Normandy transformer 230 138 Summer 2008 Active

Center Park transformer 230 138 Summer 2010 PlannedMajor Transmission Projects > 200 kV

288 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

MRO

Oak Creek Transformer No. 2 (WUMS) 345 138 2009 Add 2 nd Transformer / Planned

Kewaunee Transformer No. 2 (WUMS) 345 138 2011 Add 2 nd Transformer / Provisional

West Middleton Transformer No. 1 (WUMS) 345 138 2013 New Transformer / Planned
North Randolph Transformer No. 1 (WUMS) 345 138 2018 New Transformer / Provisional

Shell Creek Transformer (NE) 345 230 2008 New Transformer / Planned

Hoskins Transformer (NE) 345 230 2008 New Transformer / Planned

Columbus East Transformer (NE) 345 115 2010 New Transformer / Planned

Grand Island Transformer (NE) 345 230 2009 New Transformer / Planned

North Platte Transformer (NE) 230 115 2009 New Transformer / Planned NW68th&Holdrege Transformer (NE) 345 115 2010 New Transformer / Proposed

Salem 345/161 kV transformer (IA) 345 161 2009 New Transformer / Planned

Hazleton 345/161 kV transformer #1 (IA) 345 161 2010 New Transformer / Planned

Lore 345/161 kV transformer (IA) 345 161 2012 New Transformer / Planned

South-Central Saskatchewan (SPC) 230 138 2010 New Transformer / Planned

Transcona Transformer (MH) 230 66 2010 New Transformer / Planned

Transcona Transformer2 (MH) 230 66 2010 New Transformer / Planned

Stanley Transformer (MH) 230 66 2010 New Transformer / Planned

Neepawa Transformer (MH) 230 66 2011 New Transformer / Proposed

Riel Transformer (MH) 500 230 2012 New Transformer / Planned
NPCC

Fitzwilliam 345 115 12-2008 Under Construction

Wachusett 345 115 06-2011 Planned

Berry Street 345 115 03-2011 Concept

Norwalk 345 115 12-2008 Under Construction

Singer 345 115 12-2009 Under Construction

Singer 345 115 12-2009 Under Construction

Wakefield Junction 345 115 06-2009 Under Construction

Wakefield Junction 345 115 06-2009 Under Construction

Wakefield Junction 345 115 06-2009 Under Construction

Wakefield Junction 345 115 06-2009 Under ConstructionMajor Transmission Projects > 200 kV

289 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Auburn Street 345 115 06-2010 Concept

Lapeer 345 115 2010- Winter Planned

Lapeer 345 115 2010- Winter Planned

Lovett 345 138 Before 2013 Planned

RFC

Cumberland 230 138 05-2009 New

Marquis 345 138 06-2009 Add 450 MVA

Conesville 345 138 12-2008 New 675 MVA

Jug Street 345 138 12-2009 New 450 MVA

Twin Branch 345 138 06-2009 New 675 MVA

Matt Funk 345 138 06-2011 New 675 MVA

Sporn 345 138 12-2009 New 450 MVA

Prexy 500 138 06-2011 New

Kammer 765 500 11-2009 Replacement

Doubs Bank #2 500 230 05-2011 Replacement

Doubs Bank #3 500 230 05-2011 Replacement

Doubs Bank #4 500 230 05-2011 Replacement

Waugh Chapel 500 230 06-2012 Replacement

Lisle 345 138 05-2010 New

Qualitech 345 138 06-2010 New

Logans Ferry 345 138 06-2010 New

Brady 345 138 06-2012 New

Red Lion 230 138 05-2009 New 300 MVA

Indian River 230 138 06-2011 New

Avon 345 138 06-2009 New 400 MVA

Tangy 345 138 06-2009 New

Cranberry 500 138 06-2013 New 600 MVA

Worthington 161 138 09-2009 Add capacity

Decatur Switch Station 161 138 12-2009 New

Bunce Creek 220 220 05-2009 Replace failed PAR

Tallmadge #3 345 138 12-2008 New

Richland 345 138 04-2009 NewMajor Transmission Projects > 200 kV

290 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Hiple #2 345 138 08-2008 New

St. John #2 345 138 12-2011 New

Brighton #2 500 230 06-2009 New

Burches Hill #2 500 230 06-2011 New

Burches Hill #3 500 230 12-2011 New

Brighton 500 230 06-2012 Replacement

Metuchen 230 138 01-2009 New

Roseland 230 138 06-2009 Upgrade

Roseland 230 138 02-2010 Upgrade

Roseland #1 500 230 06-2012 New

Roseland #2 500 230 06-2012 New

Brown 345 138 12-2012 New
SERC

Rutherford 500kV Substation 500 161 06-2010 Planned

Jackson 500kV Substation 500 161 06-2011 Planned 2 nd Transformer Clay County, MS 500kV Substation 500 161 06-2011 Planned

Hardin County 345kV Substation 345 138 05-2011 Planned-2 nd Transformer

Middletown 345kV Substation 345 138 05-2017 Planned-4 th Transformer

West Garrard 345kV Substation 345 12-2009 Planned

JK Smith Power Plant 345 138 2008 Planned

Marion County 161kV Substation 161 138 2008 Planned

Brookline 345 kV Substation 345 161 Summer 2008 Planned

Joachim Substation 345 138 Fall 2008 Planned

Gray Summit Substation 345 138 Winter 2010 Planned-2 nd Transformer
South Bloomington, (IL) Substation 345 138 Winter 2012 PlannedFargo (Northwest Peoria, IL) Substation 345 138 Winter 2013 Proposed

Bonaire 230/115 kV Transformer 230 115 Fall 2008 Planned-Replacement
Sinai Cemetery 230/115 kV Transformer 230 115 Summer 2008 Planned

Gordon 230/115 kV Transformer 230 115 Summer 2008 Planned
Miller Bayou 230/115 kV Transformer 230 115 Summer 2008 Planned

Boulevard 230/115 kV Transformer 230 115 Winter 2008 PlannedMajor Transmission Projects > 200 kV

291 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Elsanor 230/115 kV Transformer 230 115 Summer 2009 Planned
Thompson 500/230 kV Transformer 500 230 Summer 2010 Planned

Brentwood 230/115 kV Transformer 230 115 Summer 2010 Planned

Deptford 230/115 kV Transformer 230 115 Summer 2011 Planned

Lansing Smith 230/115 kV 230 115 Summer 2011 Planned

Smyrna 230/115 kV Transformer 230 115 Summer 2011 Planned

Santa Rosa 230/115 kV Transformer 230 115 Summer 2012 Planned

Peachtree 230/115 kV Transformer 230 115 Summer 2012 Planned

Meldrim 230/115 kV Transformer 230 115 Summer 2012 Planned

Jct-57a 230/115 kV Transformer 230 115 Summer 2013 Planned

Gainesville #2 230/115 kV Transformer 230 115 Summer 2013 Planned

Nelson 230/115 kV Transformer 230 115 Summer 2013 Planned

Sweatt 230/115 kV Transformer 230 115 Summer 2013 Planned

Buzzard Roost 230/115 kV Transformer 230 115 Summer 2013 Planned
Greene County 230/115 kV Transformer 230 115 Summer 2013 Planned

East Point 230/115 kV Transformer 230 115 Summer 2014 Planned
JC Penney 230/115 kV Transformer 230 115 Summer 2014 Planned
McDonough 230/115 kV Transformer 230 115 Summer 2014 Planned

McConnel Road 230/115 kV Transformer 230 115 Summer 2014 Planned

Roswell 230/115 kV Transformer 230 115 Summer 2014 Planned

South Cleveland 230/115 kV Transformer 230 115 Summer 2014 Planned

South Macon 230/115 kV Transformer 230 115 Summer 2014 Planned

McIntosh 230/115 kV Transformer 230 115 Summer 2015 Planned

Offerman 230/115 kV Transformer 230 115 Summer 2015 Planned

O’Hara 500/230 kV Transformer 500 230 Summer 2016 Planned

Middlefork 500/230 kV Transformer 500 230 Summer 2016 Planned
Arkwright 230/115 kV Transformer 230 115 Summer 2016 Planned

Woodstock 230/115 kV Transformer 230 115 Summer 2016 Planned
Slappy Drive 230/115 kV Transformer 230 115 Summer 2016 PlannedMajor Transmission Projects > 200 kV

292 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

County Line Road 230/115 kV Transformer 230 115 Summer 2017 Planned

Silverhill 230/115 kV Transformer 230 115 Spring 2018 Planned

Holt 230/115 kV Transformer 230 115 Summer 2018 Planned
Bay Creek 230/115 kV Transformer 230 115 Summer 2018 Planned

Bluffton 230/115 kV Substation 230 115 Summer 2008 Planned-Replacement

Durham 500 kV Substation 500 Summer 2008 Planned

Hopkins 230/115 kV Substation 230 115 Summer 2008 Planned

SPP

Southwest Shrevport 345 kV Transformer 345 138 Spring 2009 Planned

Turk 345 kV Transformer 345 138 Summer 2011 Planned

Centerton 345/161kV Transformer 345 161 Summer 2014 Planned

Flint Creek 345/161 kV Transformer 345 161 Summer 2010 Planned
Osage Creek 345/161kV Transformer 345 161 Summer 2014 Planned
Johnson Coutny 345/138 kV Transformer 345 138 Summer 2011 Planned

Valiant 345/138 kV Transformer 345 138 Summer 2010 Planned

Hitchland 345/230 kV Transformer 345 230 Summer 2010 Planned
Reno County 345/115 kV Ckt 1 Transformer 345 115 Winter 2008 Planned
Reno County 345/115 kV Ckt 2 Transformer 345 115 Winter 2009 Planned
Stranger Creek 345/115 kV #2 Transformer 345 115 Summer 2009 Planned

Rose Hill 345/138 kV #3 Transformer 345 138 Summer 2011 Planned
Spearville 345/230 kV #2 Transformer 345 230 Winter 2013 Planned

West Gardner 345/161 kV Transformer 345 161 Summer 2008 Planned

WECC

Mora Substation 230 138 05-2008 230/138 kV auto-transformer.

Mill Creek Phase Shifter 230 - 06-2008 Phase Shifter
Lower Valley Reinforcement Project (Hooper Springs) 138 - 10-2008 A 138/115 kV transformer. Part of the Lower Valley Project. Joint project with PAC.Major Transmission Projects > 200 kV

293 2008 Long-Term Reliability Assessment Transformer Project Name HighSide Voltage

(kV) LowSide Voltage

(kV) InService Date(s) Description/Status

Three Peaks 345/138kV transformer 345 138 06-2009

Oquirrh 345kV/138kV transformer 345 138 06 2009 Capacity addition for potential Vineyard area generation addition.

Caribou 345kV/138kV transformer 345 138 06-2009 Transformer to be located at new Caribou 345 kV Substation

Sunset Auto-transformer 230 - 06-2009 Install a 230/115 kV, 320 MVA auto transformer at Sunset Substation and cons truct a new 230 kV line from Keeler Sub to Sunset Sub.

King Substation 230 138 06-2010

Terminal 345/138kV transformer #1 345 138 05-2012

Terminal 345/138kV transformer #2 345 138 05-2012

Gateway West Transm. 500 345 06-2012 Midvalley 345/138kV transformer #1 345 138 05-2013
Midvalley 345/138kV transformer #2 345 138 05-2013

Selkirk Transformer Addition 500 230 10-2008 Add transformer T4

Montana - Alberta Tie 230 - 05-2009

Selkirk Transormer Addition 500 230 10-2010 Add transformer T4

West Loop Switching Station 345 230 06-2008 345 / 230 kV transformer.

Palo Verde – Pinal West Project 500 - 05-2008

Southeast Valley Project 230 - 05-2008

McDonald 230/138kV Transformer 230 138 03-2009 Load service to McDonald

Springerville #4 500 - 05-2009

Northwest 230/138 kV Transformer 230 138 06-2009

Sinatra 230/138 kV Transformer 230 138 06-2009

Northwest 500/230 kV Transformer 500 230 06-2010

Sunrise 500/230 kV Transformer 500 230 06-2011

Southeast Valley Project 500 - 06-2011

Lone Tree Substation Interconnection 230 - 05-2008 Meet customer demand and improve service reliability.

Rancho Vista Substation 500 230 06-2009 500/230 kV transformer bank.

Rancho Vista Substation 500 230 06-2009 500/230 kV transformer bank.

Sunrise Powerlink 230 230 06-2011 New substation, 500/230kV 500/230/12 kV xfmr banks

Sunrise Powerlink 500 230 06-2011 New substation, 500/230kV 500/230/12 kV xfmr banksReport Content Responsibility

294 2008 Long-Term Reliability Assessment 

# Report Content Responsibility

The following NERC industry groups ha ve provided input into NERC’s 2008 Long-Term Reliability Assessment : 

## NERC Group Relationship Contribution Action

Planning Committee (PC) Reports to NERC’s Board of Trustees • Review 2008 LTRA

• Risk Assessment of Emerging Issues

• Improvement Plan • Endorse

• Completed

• Approve Reliability Assessment Improvement Task Force Reports to the PC • Develop Reliability Enhancement Plan • Report

Reliability Assessment Subcommittee (RAS) Reports to the PC • Peer Reviews

• Develop Emerging Issues • Report

• Completed Data Coordination Working Group Report to RAS • Develop data and regional reliability narrative requests • Completed

Load Forecasting Working Group Reports to RAS • Develop load forecasting bandwidths • Completed

Resource Issues Subcommittee (RIS) Reports to PC • Develop Emerging Issues

• Demand Resources • Completed

• Report Demand Side Management Task Force Reports to RIS • Demand Reponses collection taxonomy • Completed

Operating Committee (OC) Reports to NERC’s Board of Trustees • Reviewed Reliability Trends section • Completed

Reliability Metrics Working Group Reports to the PC and OC • Reviewed the reliability trends Metrics • Completed

Integration of Variable Generation Task Force Reports to the PC and OC • Integration of variable generation • Ongoing

Board of Trustees NERC’s Independent Board ● Review the 2008 LTRA

● Approve for publication • CompletedReliability Assessment Subcommittee

295 2008 Long-Term Reliability Assessment 

# Reliability Assessment Subcommittee

Chair William O. Bojorquez Consultant Hunt Transmission Services, L.L.C. 701 Brazos Street, Suite 970 Austin, TX 78701-2559 (512) 721-2653 (512) 721-2656 Fx bbojorquez@hunttr ansmission.com

Vice Chair Mark J. Kuras Senior Engineer, NERC and Regional Coordination PJM Interconnection, L.L.C. 955 Jefferson Avenue Valley Forge Corporate Center Norristown, Pennsylvania 19403-2497 (610) 666-8924 (610) 666-4779 Fx kuras@pjm.com

ERCOT Dan Woodfin Director, System Planning Electric Reliability Council of Texas, Inc. 2705 West Lake Drive Taylor, Texas 76574 (512) 248-3115 (512) 248-4235 Fx dwoodfin@
ercot.com

FRCC Vince Ordax Transmission Planning Engineer Florida Reliability Coordinating Council 1408 N. Westshore Boulevard Suite 1002 Tampa, Florida 33607-4512 (813) 207-7988 (813) 289-5646 Fx vordax@frcc.com

MRO Hoa Nguyen Resource Planning Coordinator Montana-Dakota Utilities Co. 400 North Fourth Street Bismarck, North Dakota 58501 (701) 222-7656 (701) 222-7970 Fx hoa.nguyen@ mdu.com

NPCC John G. Mosier, Jr. AVP-System Operations Northeast Power Coordinating Council, Inc. 1515 Broadway 43rd Floor New York, New York 10036-8901 (212) 840-1070 (212) 302-2782 Fx jmosier@npcc.org

RFC Bernard M. Pasternack, P.E. Managing Director - Transmission Asset Management American Electric Power 700 Morrison Road Gahanna, Ohio 43230-8250 (614) 552-1600 (614) 552-2602 Fx bmpasternack@
aep.com

SERC Hubert C. Young Manager of Transmission Planning South Carolina Electric & Gas Co. 1426 Main Street MC 034 Columbia, South Carolina 29201 (803) 217-9129 (803) 933-7264 Fx

SPP Mak Nagle Manager of Technical Studies & Modeling Southwest Power Pool 415 North McKinley Suite 140 Little Rock, Arkansas 72205-3020 (501) 614-3564 (501) 666-0376 Fx mnagle@spp.org

WECC Jam es Leigh-K e ndall Regulatory Compliance Officer Sacramento Municipal Utility District Mail Stop D113 P.O. Box 15830 Sacramento, California 95852-1830 (916) 732-5357 (916) 732-7527 Fx jleighk@smud.org

WECC Christopher S Smart Staff Engineer Western Electricity Coordinating Council 615 Arapeen Drive Suite 210 Salt Lake City, Utah 84108-1262 (801) 883-6865 (801) 824-0129 Fx csmart@wecc.bizReliability Assessment Subcommittee

296 2008 Long-Term Reliability Assessment IOU & DCWG Chair K. R. Chakravarthi Manager, Interconnection and Special Studies Southern Company Services, Inc. 13N-8183 P.O. Box 2641 Birmingham, Alabama 35291 (205) 257-6125 (205) 257-1040 Fx krchakra@ southernco.com

ISO/RTO John Lawhorn, P.E. Director, Regulatory and Economic Standards Transmission Asset Management Midwest ISO, Inc. 1125 Energy Park Drive St. Paul, Minnesota 55108 (651) 632-8479 (651) 632-8417 Fx jlawhorn@ midwestiso.org

ISO/RTO Peter Wong Manager, Resource Adequacy ISO New England, Inc. One Sullivan Road Holyoke, Massachusetts 01040-2841 (413) 535-4172 (413) 540-4203 Fxpwong@isone.comCanadian-AtLarge Daniel Rochester, P. Eng. Manager, Reliability Standards and Assessments Independent Electricity System Operator 2635 Lakeshore Road, West Mississauga, Ontario L5J 4R9 (905) 855-6363 (905) 403-6932 Fx dan.rochester@ ieso.ca

FERC Sedina Eric Electrical Engineer Federal Energy Regulatory Commission 888 First Street, NE, 91-11 Washington, D.C. 20426 (202) 502-6441 (202) 219-1274 Fx sedina.eric@ ferc.gov

DOE Patricia Hoffman Acting Director Research and Development Department of Energy 1000 Independence Avenue SW 6e-069 Washington, D.C. 20045 (202) 586-1411 patricia.hoffman@ hq.doe.gov

LFWG Chair Yves Nadeau Manager, Load and Revenue Forecasting Hydro-Quebec Complexe Desjardins, Tour Est 25 etage -- Case postale 10000 Montreal, Quebec H5B 1H7 (514) 879-6228 nadeau.yves@ hydro.qc.ca

Alternate SERC Herbert Schrayshuen Director Reliability Assessment SERC Reliability Corporation 2815 Coliseum Centre Drive Charlotte, North Carolina 28217 (704) 940-8223 (315) 428 5114 Fx hschrayshuen@ serc1.org

Alternate FRCC John E. Odom, Jr. Manager of System Pl anning Flo r ida Reliability Coordinating Council 1408 N. Westshore Blvd. Suite 1002 Tampa, Florida 33607 (813) 207-7985 (813) 289-5646 Fx jodom@frcc.com

Alternate MRO John Seidel Manager of Reliability Assessment Midwest Reliability Organization 2774 Cleveland Avenue Roseville, MN 55113 (651)855-1716 (651) 855-1712 Fx ja.seidel@midwest reliability.org

RFC Jeffrey L. Mitchell Director - Engineering ReliabilityFirst Corporation 320 Springside Drive Suite 300 Akron, Ohio 44333 (330) 247-3043 (330) 456-3648 Fx jeff.mitchell@ rfirst.orgReliability Assessment Subcommittee

297 2008 Long-Term Reliability Assessment Alternate RFC Paul D. Kure Senior Consultant, Resources ReliabilityFirst Corporation 320 Springside Drive Suite 300 Akron, Ohio 44333 (330) 247-3057 (330) 456-3648 Fx paul.kure@ rfirst.org

Alternate SPP Jay Caspary Director, Engineering Southwest Power Pool 415 North McKinley Suite 140 Little Rock, Arkansas 72205 (501) 614-3220 (501) 666-0376 Fx jcaspary@spp.org

NERC Dave Nevius Senior Vice President and Director of Reliability Assessment and Performance Analysis North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, New Jersey 08540-5721 (609) 452-8060 (609) 452-9550 Fx dave.nevius@
nerc.net

NERC Kelly Ziegler Manager of Communications North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, New Jersey 08540-5721 (609) 452-8060 (609) 452-9550 Fx kelly.ziegler@
nerc.net

NERC Analyst John Moura Technical Analyst, Reliability Assessments North American Electric Reliability Corporation 116-390 Village Boulevard Princeton, New Jersey 08540-5721 (609) 452-8060 (609) 452-9550 Fx john.moura@
nerc.net

NERC Coordinator Mark G. Lauby Manager of Reliability Assessments North American Electric Reliability Corporation 116-390 Village Boulevard Princeton

, New Jerse y 08540-5721 (609 ) 452-8060 (609) 452-9550 Fx mark.lauby@

nerc.ne t