SM April Peak Week Operations Review Presentation to ISO Business Issues Committee May 22, 2002

2New York Independent System Operator  ISO Load Forecast Issues  NYISO - PJM Interface DAM Scheduling  Transmission Constrained Operation  #91 Leeds-Pleasant Valley maintenance outage  Significant generating unit maintenance outage  Generator Operating Capability  ISO Operations Actions  Follow-up

3New York Independent System Operator Load Forecast Issues  No prior historical basis for April weather/loads  Weather forecast error (5.8%)  Statewide load forecast model error (5.2%)  Average peak forecast error (2500MW)  Forecast model updated based on April 2002 loads

4New York Independent System Operator NYISO - PJM DAM Scheduling  SCUC modeling normally forces all NYISO-PJM transactions to flow across NY- PJM interconnections  High exports from IMO and NYISO to PJM resulted in a portion of transaction (loop) flow around Lake Erie  SCUC exceeded normal NYISO-PJM scheduling capability (2500MW)

5New York Independent System Operator Transmission Constrained Operation  # 91 Leeds-Pleasant Valley 345kV line scheduled out for Athens substation work  #92 Leeds-Pleasant Valley 345kV line de-rated from seasonal winter capability to account for high 90+ degree temperatures  Declared Emergency Transfer Criteria operation for #92 Leeds- Pleasant Valley 345kV line  SCD/BME indicated the ability to secure the # 91 line constraint based on as-bid generator capabilities

6New York Independent System Operator Unavailable Generator Capability  BME/SCD considered as-bid unit capability that apparently could not be achieved in-day  Significant difference in on-dispatch generator bids vs. actual unit output ( MW)  Some generator capabilities reflected Winter seasonal ICAP values and not in-day operating capabilities  Generators expected to de-rate or adjust bids to reflect actual operating capability

7New York Independent System Operator Operator Actions to Maintain Reliability  Used SRE to commit additional units in response to forecast error  Declared Emergency Transfer Criteria for #92 Leeds-Pleasant Valley constraint  Units required OOM since actual operating capabilities were insufficient to secure #92 Leeds-Pleasant Valley constraint and were not reflected in BME/SCD schedules  Units required OOM since actual operating capabilities were insufficient to meet reserve requirements and were not reflected in BME/SCD schedules  Export transactions curtailed to maintain reserves  Maintained high levels of import transactions from ISO-NE

8New York Independent System Operator Follow-up issues  Address generator owner bidding concerns of ICAP requirements vs. actual in-day operating capability (Reliability and Pricing Impacts)  Propose GT Resources taken OOM for ISO Reserves be eligible to participate in price setting pass of hybrid dispatch  Enhance Control Room GT management tools

9New York Independent System Operator Follow-up issues continued:  Review SCUC and BME Load Forecast Procedures  Discuss potential solutions with ISO Business Issues and Operating Committees