1 MISO Business Plan: Enhanced Reliability, Customer Service & Market Implementation James P. Torgerson, President & CEO Midwest ISO December 17, 2003

2 Topics for Discussion Midwest ISO – A Brief Introduction MISO Business Plan Lessons Learned Improved Reliability Joint Operating Agreement Outreach Midwest Market Update

33 The Midwest ISO is an independent, non-profit entity that monitors the transmission grid of high voltage electricity across much of the Midwest. Operational since December 15, Control Areas 23 Transmission Owners Two Centers  Carmel, IN  St. Paul, MN One Reliability Region Midwest ISO – A Brief Introduction Midwest ISO Service Territory, with planned expansion

4 MISO Business Plan Enhanced Reliability Meet or exceed expectations Regain customer trust in reliability function Customer Service Be pro-active Listen Respond promptly Carry out responsibilities timely Market implementation Communicate benefits of markets Flawless schedule implementation Thorough trials & testing

55 The events of August 14 th have raised the bar and renewed our focus on reliability We are applying lessons learned from an unfortunate situation as we move forward We are aggressively implementing robust reliability tools on an accelerated schedule Restoring public confidence is critical Lessons Learned

6 Reviewed operations with Control Areas State Estimator – Began Implementation of Enhancements Added 15,000 data points to MISO model Flowgate monitoring Tool Added 217 additional Flowgates Alarming All real-time voltages and MW flows vs. limits 100 k and above Control Room Enhancements Real-Time overview displays in MISO Control Room greatly enhanced Increased staffing and bolstered training of Control Room personnel Improving Reliability – What We’ve Done Since August 14

7 Reliability Staff Expansion * Provide additional Reliability Coordinators * Provide shift supervisors * Hire new Executive Director for St. Paul Office Enhanced Voice Communication System * Installation of new Turret Phone System in Control Center during 1 st quarter 2004 Comprehensive Operator Training Program * Simulator Training * Cross-Training with Control Areas Improving Reliability – Upcoming Activities

8 Joint Operating Agreement With PJM Mutual Data and Communication Exchange Complementary System Processes Coordinated System Congestion Management Coordinated System Planning Arrangements with other entities bordering MISO

9 Outreach Increase external awareness Collaborative effort for Market tariff Support stakeholder readiness for markets Continuous input from Organization of MISO States Taking a leadership role among RTOs/ISOs in evaluating strengths and weaknesses and training operators

10 Midwest Market Update December 2004 – Market launch * March 2004 – Initiate Trials * March 2004 – Tariff filing * August 2004 – Parallel operations * October 2004 – Final Trials