Cold Snap Task Force Update Stephen J. Rourke ISO-New England May 21, 2004

New England Cold Temperature History January saw the sixth coldest temperatures in 45 years. 2004 - 10 - 5 5 10 15 20 1968 1984 1976 1971 1981 1982 1994 1961 1965 1988 1974 2003 1983 1970 1997 1996 1977 1986 1963 1973 1999 2000 1972 1979 1966 1962 1987 1991 1969 1989 1964 1992 1985 1967 1998 1975 1960 1980 1978 1995 1993 2001 1990 2002 Temperature (F)

Winter Cold Snap Summary Generation Outages in MWs Jan. 14 Jan. 15 Jan 16 Peak Demand 22,450 22,817 21,885 Unit Types OOS Gas 7,238 6,820 4,941 Coal 430 344 166 Nuclear 12 16 Oil 842 746 817 Hydro 262 311 277 Other 143 130 111 MWs OOS 8,927 8,363 6,328 Surplus/(Deficit) (108) 717 2,184

ISO Actions to Protect New England Ordered offline generation and transmission back in service Requested voluntary conservation from public Coordinated with North American Electric Reliability Council (NERC) and Northeast Power Coordinating Council (NPCC) Arranged for additional imports from adjacent Control Areas Issued alert of impending capacity deficiency followed by emergency procedures to balance supply and demand Requested manning of substations as precautionary measure, based on lessons learned from August 14th blackout Kept regulators and public informed of system conditions

Cold Snap Report Key Findings Electricity and gas markets performed reasonably well Availability of gas for non-firm generation customers affected gas unit availability: Dual-fuel units had much better availability than gas-only units No evidence of anti-competitive behavior No evidence that economic outages approved by ISO-NE exacerbated reliability issues or resulted in increased electricity clearing prices Supply offers for gas-fired units were affected by timing inflexibility of electric market Electricity markets provided only weak incentives for units, especially gas units, to be available during the Cold Snap

Cold Snap Task Force Formed at March 19, 2004 FDWG-EGWI meeting Three meetings held to date: April 5 April 15 April 29 Broad Stakeholder Representation ISO-NE NEPOOL Members Natural Gas Industry Various NE State Agencies

Cold Snap Task Force Several straw proposals presented to begin addressing the market timeline issues and associated system reliability concerns Cold Snap Working Group formed to deal with possible market changes to be implemented for winter 2004/2005 Possible Alternative: Move up the “Market Process” by 12 (?) hours – Straw Proposal #1

Next steps Schedule next working group meeting(s) Continue development of market timeline straw proposal, including market impacts Detail all technical impediments to be resolved Develop trigger mechanisms Develop communication plan Prepare for Cold Snap Task Force and NEPOOL Markets Committee in June

ISO-NE Priority Items for Winter 2004/2005 Formalize interaction between ISO Operations and Natural Gas pipeline operations Communication protocols Sharing of operational information Notification of major events Address market timeline issues under “event driven” conditions Maximize use of existing dual fuel capabilities Verify existing capabilities Document facility specific operating issues Address permit limitations

Questions?