1. Transmission Owners and Operators Forum NERC Stakeholders Meeting 8/1/06 Ad-Hoc T. O. O. Forum Group

2. The Forum Will… ● Establish a venue for Transmission Owners and Operators to discuss collective reliability interests ● Identify and exchange best practices that build upon NERC’s standards and readiness programs ● Review performance of members ● Assist its members ● Be Self-Supporting (no burden on statutory functions of NERC)

3. Drivers ● The 2003 Blackout again demonstrated that transmission operators are closely dependent on each other ● Transmission owning/operating companies have the expertise to identify best practices and the motivation to implement them ● It’s good business and good for the industry to share best practices and experiences

4. Mission ● Improve the reliability and security of the transmission system ● Promote the continual identification and improvement of best practices in electric transmission operations ● Facilitate transmission owner and operator members implementation of best practices

5. Membership ● Open to all transmission owners and operators in the NERC footprint  Investor owned, federal, provincial, public, co-op;  Integrated and transmission-only companies;  Regional Transmission Operators and Independent System Operators

6. ● Candid, confidential exchange of information among members, including information on best practices and lessons learned ● Full compliance with all NERC and applicable Regional standards ● Self-reporting of any NERC violations Members Commitment

7. Governance ● Formed under Section 712 of the ERO Rules of Procedure, which provides for “Sector Forums” ● Directed by a Steering Committee consisting of senior transmission executives of each of the member companies ● Subordinate to the NERC Board

8. Relation to NERC ● Subordinate to the NERC Board and assigned a NERC liaison ● The members must commit to compliance with all NERC and applicable Regional standards, and to self-report any standards violations which may be identified incidental to best practices reviews by the Forum ● Clear separation between the Assessment, Standards and Compliance functions of NERC and the “best practices” Forum

9. Developments to Date Initial interested parties include investor- owned, federal, provincial, RTO/ISO, and both vertically integrated and stand-alone transmission utilities ● Discussions among parties and NERC to frame an initial organizational charter for consideration by NERC and potential members

10. Next Steps ● Complete the development of a Charter for approval by the Participants and by the NERC Board ● Obtain NERC Board approval ● Create a Steering Committee to begin organizational development ● Begin operations in 2007

11. Questions?