1. Congestion Management in a Market Environment David Nevius Senior Vice President North American Electric Reliability Council

2. 2 What is NERC? ● Formed in 1968 ● Covers US, Canada & part of Mexico ● Mission: to ensure that the bulk electric system is reliable, adequate & secure ● A voluntary self-regulatory organization ● Adherence to standards depends on reciprocity, peer pressure & mutual self- interest among industry participants

3. 3 Membership & Funding ● Members: 10 regional reliability councils organized within 3 Interconnections ● Funding: primarily allocated across the regions on a net energy-for-load basis ● Regions funded by their members ● 2005 budget: ~$16 MM

4. 4 NERC Interconnections

5. 5 What Does NERC Do? ● Sets reliability standards ● Monitors compliance with reliability standards ● Provides education and training resources ● Conducts reliability assessments ● Certifies reliability organizations and personnel ● Coordinates security of bulk electric system ● Maintains support systems for operations

6. 6

7. 7 TLR Procedures www.nerc.com Reliability Standards “Reliability Coordinator – Transmission Loading Relief” IRO-006-1

8. 8 Transmission Loading Relief

9. 9

10. 10 Transmission Loading Relief

11. 11 TTC, ATC TTC = Total Transfer Capability ATC = Available Transfer Capability ATC = TTC – Sched. Transactions - Margin

12. 12

13. The Electric Reliability Organization: Getting from here to there. ERO Slippery Slope NERC Today Uphill Climb

14. 14 Canada Alberta, British Columbia, Manitoba, Ontario, New Brunswick, Nova Scotia, Quebec, and Saskatchewan Electric Reliability Organization United States Federal Energy Regulatory Commission Mexico Comision Reguladora de Energia Electric Reliability Organization Regional Entities Other ERO Members Bulk Electric System Owners, Operators, Users Reliability Standards Compliance Enforcement

15. 15 ERO Transition Project Energy Policy Act 2005 FERC Rulemaking Final ERO Rule ERO Rules of Procedure ERO Certification NERC Preparations Public Comment ERO Implementation Region Preparations Region Rules of Procedure ERO Application Delegation Agreement s Stakeholde r Inputs