Integration of Wind Energy in PJM Southeast & Mid-Atlantic Regional Wind Summit Raleigh, North Carolina September 19, 2005 Ken Mancini, Sr. Engineer Capacity Adequacy Planning PJM Interconnection, L.L.C. 5/2/2019

Capacity Credit Overview Summary Presentation Outline PJM Overview RTEP PJM Wind Projects Capacity Credit Overview Summary 5/2/2019

ISO / RTO Roles Operates one of the largest electric power systems in North America Administers regional wholesale electric markets Controls a reliable transmission system Provides market monitoring coordinated with States and FERC Provides for comprehensive regional transmission expansion planning Provides an information resource for Market Participants and Regulators 5/2/2019

PJM Worldwide Comparison 131,330 MW Peak 1,082 Generating Units EDF (France) 84,706 MW Peak 608 Generating Units Tokyo Electric 64,300 MW Peak 147 Generating Units ERCOT 60,157 MW Peak 437 Generating Units National Grid (England & Wales) 54,430 MW Peak 212 Generating Units Italy 53,403 MW Peak 314 Generating Units CAISO 45,900 MW Peak 1,143 Generating Units 5/2/2019

ISOs/RTOs in North America IESO 25,414 MW New England 25,348 MW PJM is the largest centrally dispatched entity in North America (Megawatts indicate peak demand.) New York 30,983 MW California 45,900 MW PJM 131,330 MW ERCOT 59,992 MW 5/2/2019

PJM RTO Profile PJM RTO PJM - Full Service RTO Control Area Operator Generating Units 1,082 Generation Capacity 163,806 MW Peak Load 131,330 MW Transmission Miles 56,070 Area (Square Miles) 164,260 Miles of Transmission 56,070 Population Served 51 Million States (+ D.C.) 13 states + D.C. On this slide you will once again see current PJM Regions which are shaded The table to the right shows some key PJM statistics. PJM spans over eight governmental jurisdictions PJM is Regional in Scope The table to your lower left shows that PJM is a Full Service Reliability Coordinator and serves as…… Control Area Operator Transmission Provider Market Administrator Regional Transmission Planner NERC Reliability Coordinator PJM - Full Service RTO Control Area Operator Transmission Provider Market Administrator Regional Transmission Planner NERC Reliability Coordinator Membership: ~ 350 Members 100+ Transmission Service Customers 5/2/2019

Supported by Thriving Wholesale Markets Public Benefits of PJM Supported by Thriving Wholesale Markets Regional Scope Many Buyers and Sellers Participant Choices: Financial Hedge Self-Schedule Resources Long Term Contracts Day Ahead Market Real-Time Market Retail Adjustments Load Response Programs Enabled by PJM Consumer Goals Reliability Assurance Collaborative Stakeholder Process for Improvement Independence and Neutrality Infrastructure for Business Reliable Supply of Power Fair Price for Electricity Customer Choice This slide shows the Public Benefits of PJM Active Markets are enabled by the PJM Agreements and provide Consumers Reliable Power Supply at a Fair Price with Customer Choice. Retail Market Market Information 5/2/2019 Wholesale Market

PJM Authority Provided by Contract Reliability Assurance Agreement Regional Transmission Provider Regional Control Area Operator Market Developer and Coordinator Regional Transmission Planner Planning Process Interconnection Process NERC Security Coordinator Transmission Owners Agreement PJM Operating Agreement PJM OAT Tariff ECAR & MAAC Agreements 5/2/2019

Evolution of the Planning Process 5/2/2019

Regional Transmission Expansion Planning Process FERC Approved Process RTEP is a fully integrated process including: On-going Adequacy Assessments On-going Reliability Assessments Transmission Expansion Advisory Committee (TEAC) Expansion recommendations provided to PJM Board for approval 5/2/2019

Regional Planning Process Objectives All Requests Treated Equally Decisions in Equivalent Time Period result in Comparable Treatment Reliable Transmission System Robust Competitive Market Information Provided On A Timely Basis Resource Adequacy Determination Ability of the Transmission System to Deliver Energy Market Price Signals--Energy, Capacity, Ancillary Services 5/2/2019

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PJM Wind Projects 5/2/2019

What has PJM done? What has PJM done to facilitate Wind Energy Projects? Expedited procedures for Generators that are less than 20MW Collaborated with Wind Energy Experts Formed Intermittent Capacity Resource Working Group Offers Capacity Credits for Wind Power 5/2/2019

Wind Farm Locations 5/2/2019 Legend Planned Under Construction 0-20 MW 20-50 MW 50-100 MW 100-300 MW Planned Under Construction In-Service 5/2/2019

Wind Power Summary Status MW Active 6924 In-Service 443 Under Construction 452 Total 7818 **Note: These numbers reflect both capacity and energy resources that are currently in PJM’s queue as of 9/14/2005. 5/2/2019

The PJM Capacity Market & Capacity Credit Overview Provides economic incentive for generation asset development Obligations of load servers to secure capacity for their customers’ needs Generators participate based on their capacity value Prior to June 2003 there were no provisions for wind generators to participate 5/2/2019

Capacity Credit for Wind Generation Intermittent Capacity Resources Working Group Created November 2002, part of RAA-RC Goal: Develop methodology to allow these generators to participate in PJM Capacity Markets Address unique challenges of developing a means to calculate capacity value for generation assets that cannot be dispatched at will e.g. wind, photovoltaic Capacity credit calculation approved April ’03 Implementation June ’03 Proactively worked with owners/operators/developers of in-service and planned wind farms to facilitate qualification for participation in capacity market 5/2/2019

Capacity Credit for Wind Generation PJM’s Wind Capacity Credits Based on real operating data when available Three year rolling average of hourly outputs: For the 4 hours ending 3 to 6 PM… On the summer days of June 1 to August 31 Incl. Wind “Class Average” Used for each year operating data is unavailable Equals 20% of Net Capability (Nameplate less Station load) Replaced by actual data in rolling average calculation as operating data becomes available 5/2/2019

Integration of Market Solutions The market will provide many solutions that must be integrated through the Regional Transmission Expansion Plan. Generation Solutions Strategically Sited Generation Projects Distributed Resources Load Solutions Active Load Management/Demand-Side Resources Transmission Solutions Advanced Technology Options Merchant Transmission Traditional expansion/enhancement alternatives will also be identified through the Plan. 5/2/2019

Interconnection/Queues If You Have Any Questions Capacity Credits Ken Mancini Phone (610) 666-4306 FAX (610) 666-4779 Email mancik@pjm.com Website www.pjm.com Interconnection/Queues Ken Seiler Phone (610) 666-4410 FAX (610) 666-4779 Email seilek@pjm.com Website www.pjm.com 5/2/2019

System Functionality Overview GATS = Generation Attribute Tracking System GATS - a regional information system that will track the environmental attributes of generation and will support reporting, compliance and verification requirements related to environmental compliance and related markets. GATS is designed to be policy-neutral to the greatest extent possible. The system will: assist LSEs in their compliance with applicable emissions and fuel disclosure requirements, assist LSEs in their compliance with state-level RPS regulation or renewable policy, and enable voluntary bilateral markets for renewables. 5/2/2019

PJM-EIS Overview PJM Environmental Information Services, Inc. (EIS) owns and administers the Generation Attribute Tracking System (GATS). EIS is a wholly-owned subsidiary of PJM Technologies, Inc. (Tech) EIS was formed to provide environmental and emissions attributes reporting and tracking services to its subscribers in support of portfolio standard and other information disclosure requirements. Subscribers to the GATS will enter into an agreement with EIS for access to use the system. The agreement will define the: user fee structure, terms of use, and business rules. 5/2/2019

Current Status of State RPS Programs Renewable Portfolio Standards Adopted New Jersey BPU will require use of GATS once operational Maryland Regulation under development, requires use of GATS Pennsylvania Regulation in process, stakeholders support GATS District of Columbia Regulation development process just beginning Delaware Regulation development process just beginning Renewable Portfolio Standards Under Consideration Illinois – Commission issued directive to Illinois utilities on voluntary RPS program 5/2/2019

Other State Policies and Regulations Information Disclosure LSE requirement to inform its customers of the fuel source, emissions and other characteristics of the electricity it supplies Quarterly, semi-annually, annually Emissions/Generation Performance Standard Requires electricity supplier not to exceed a maximum threshold of specific pollutants Voluntary Green Power Markets Requires suppliers to provide documentation that supports and substantiates claims that suppliers may make when selling renewable electricity All supported by GATS 5/2/2019

If you have any questions on GATS For more information on GATS: http://www.pjm-eis.com/ or e-mail the GATS Administrator: GATSAdmin@pjm-eis.com 5/2/2019