1. Integration of Variable Generation Task Force Preliminary Conclusions and Actions

2. Owners, Operators, and Users  2005 Energy Policy Act: All users, owners, and operators of the bulk-power system shall comply with reliability standards  FERC Rule All entities subject to the Commission’s reliability jurisdiction… (users, owners, and operators of the bulk-power system) shall comply with applicable Reliability Standards …

3. North American Electric Reliability Corporation (NERC) Mission: “To ensure the reliability of the North American bulk power system” Formed in 1968 U.S. Electric Reliability Organization Working to gain similar recognition in Canada

4. Regional Entities

5. United States Federal Energy Regulatory Commission Mexico Comision Reguladora de Energia Electric Reliability Organization Overview Electric Reliability Organization Regional Entities Other ERO Members Bulk Power System Owners, Operators, Users Reliability Standards Compliance Enforcement Reliability Assessment Government Oversight Canada NEB, Alberta, British Columbia, Manitoba, Ontario, New Brunswick, Nova Scotia, Quebec, and Saskatchewan

6. NERC Overview

7. Integration of Variable Generation Task Force (IVGTF) Scope  The Task Force will prepare: A concepts document: philosophical & technical considerations Recommendations: practices, requirements & reliability standards  The document will include: Planning timeframe issues Operational Planning and Real-time Operating timeframe issues Review NERC Standards for gaps Review of future developments: i.e. storage, EHV Conclusions and recommendations

8.  Draft Summary Report prepared  Comments received from the IVGTF members  Meeting held in August Finalize recommendations and actions Editorial meeting on Summary Report  Coordination with UCTE-EWIS IVGTF Status Report

9. Keeping Reliability in the Balance  Bulk power system reliability must be maintained  All generation must contribute to system reliability  Standards must be fair, transparent & performance-based  Planners & operators must understand the challenges of large scale variable generation integration  Variable generation integrated into planning & operations  New Planning/operating tool requirements described in terms of bulk power system reliability performance

10. Enhancements: Resource Categories * This slide is a simulation of the categories and does not reflect actual data

11. 2008 Key Finding: Wind Substantially Increases  140,000 MW of wind to be added in coming 10 years  Capacity available on peak ranges from 8.7% to 26%

12. What Must Change? Planners: Consistent methods for energy & capacity Add Probabilistic Expansion Analysis Design Flexibility during Resource & Transmission Planning System Design must consider Variable Distributed Resources PHEVs, storage & demand response provide additional resource flexibility Standard, generic power flow and stability models required Reference Manual for Planners on how to Integrate Variable Generation.

13. What Must Change? Enhanced Grid Codes required:  Voltage & Frequency Ride-Thru  Reactive & Real Power Control  Frequency & Inertial Response Balancing Authorities must have Communications and Control of Variable Resources Write a Reference Manual for Operators on how to Integrate into Operations. Operators: Forecasting should be incorporated into operations Larger Balancing Areas impact on Reliability requires Study

14.  Specific Activities Outlined Three year plan Suggested Assignments  Reports  Standards Review/Creation  Industry Coordination  Sufficient IVGTF Stakeholder Participation to Complete the Activities  Draft Report is posted at Detailed Recommendations & Work Plan http://www.nerc.com/docs/pc/ivgtf/IVGTF_Reporta_17Nov08.pdf

15. Schedule

16. Emerging Issues Greenhouse Gas Reductions Fuel Storage & Transportation Rising Global Demand for Energy & Equipment Increased Demand-Side & Distributed Generation Resources Transmission of the 21 st Century Limited Water Availability Mercury Regulation 1-5 Years 6-10 Years

17. Questions?