1. The Power Of Greater Nashville - 1 - T&D Planning at Nashville Electric Service Paul H. Allen, Nashville Electric Service APPA E&O Technical Conference March 9, 2004 - San Antonio, Texas

2. The Power Of Greater Nashville - 2 - Background Nashville Electric Service (NES) is the operating name for The Electric Power Board of the Metropolitan Government of Nashville and Davidson County NES is governed by a five member board, appointed by the Mayor and confirmed by the Council The Board Members serve 5 year terms, without pay, and have full responsibility for the operation of NES The day-to-day responsibility is delegated to the President and CEO of NES

3. The Power Of Greater Nashville - 3 - NES Statistics 700 m 2 Service territory approx. 328,000 Customers 291,000 Residential 30,000 Small Commercial 6,700 Large C&I 12,233,000 MWh sold in FY 2003 55.8% of revenue from C&I customers 77.8% to purchase power Residential - 6.545 ¢ / kWh; $6.01 customer charge

4. The Power Of Greater Nashville - 4 - NES Statistics 62 Major substations 161 kV and 69kV transmission voltages 23.9kV, 13.9kV and 4 kV distribution voltages Secondary network system in downtown No generation - 22 feed points from TVA Went from winter peaking to summer peaking in mid 1990’s Summer peak 2,474 MW August 2000 Winter peak 2,441 MW December 1989

5. The Power Of Greater Nashville - 5 - Issues in the Past Prior to 1992, a 5 year system plan was prepared that included a one year construction plan The plan was prepared internally and the plan was reviewed by an independent engineering consultant - similar to an external financial audit The plan was redone every five years or when annual load growth exceeded 2.5% Increasing financial pressure resulted in some maintenance activities being scaled back in the late 1980s

6. The Power Of Greater Nashville - 6 - Timeline of Events

7. The Power Of Greater Nashville - 7 - Timeline of Events

8. The Power Of Greater Nashville - 8 - Timeline of Events

9. The Power Of Greater Nashville - 9 - Timeline of Events

10. The Power Of Greater Nashville - 10 - Current Environment Planning Process - Overview A 20 year comprehensive T&D plan is prepared at least every 5 years or when system demand reaches or exceeds 105% in the base year of the last study Result - a new plan every 3 to 5 years An external consultant is used on every other plan Assures that process is state of the art Provides appropriate due diligence to Board and Executive Management Interim studies are performed (internally) between plans to determine if plan should be accelerated or slowed

11. The Power Of Greater Nashville - 11 - Current Tool Integration OMS (CADOPS) GIS (ArcInfo) SCADA (ESCA) Distribution (Feederall) Transmission (PTI PSS/E) Forecast (Foresite) Reliability (Relinet) AVL CIS (Legacy) Common Data Base System Forecast Various Inputs

12. The Power Of Greater Nashville - 12 - Current Environment Planning Process - Forecasts System Forecast Rolling 5 year trending method based on historical data - primarily the weather adjusted peak Sufficiently accurate for 5 year period High, medium, and low forecasts Forecast changes from plan to plan are explained Substation Forecast Area load growth forecasts using software tool Determines where the load growth is likely to occur

13. The Power Of Greater Nashville - 13 - Current Environment Substation Forecast Creation of land use models from satellite imagery, zoning data, city planning data, etc. - one acre small areas Much of information is from GIS systems Small areas are assigned to distribution substations System forecast is spread to substations by software tool and substations loads are grown relative to each other based on small areas Used to identify capacity needs, inputs for transmission load flow studies, and to determine loads on distribution feeders

14. The Power Of Greater Nashville - 14 - Land Use Model - Downtown

15. The Power Of Greater Nashville - 15 - Southwest Area Growth - 2020

16. The Power Of Greater Nashville - 16 - Current Environment Planning Process - Contingency Analysis Transmission N-1 planning criteria using software tool using inputs from forecasts Identify multiple solutions Short list of solutions developed (costs developed) Distribution Extract distribution model from OMS system Identification of loading and voltage problems and potential solutions using software tool Identification of reliability solutions for worst circuits using software tool

17. The Power Of Greater Nashville - 17 - Current Environment Planning Process - Project Identification Impact analysis - external factors that could affect the solution - property, schedules, public, etc. Selection of solution and identification of needed projects for the selected solution Prioritization of projects for selected solution - order of construction Schedule leveling of projects for selected solution - dollars and resources

18. The Power Of Greater Nashville - 18 - Current Environment Budget Process 5 year financial model used to forecast net income Key financial goals Cash reserve, debt coverage, leverage goal Capital budget developed from T&D plan, forecasted new business, other infrastructure projects, and equipment/facilities Current prioritization is by senior management team and stakeholders Iterative Process - capital expenditures affect financial goals - pressure to limit expenditures

19. The Power Of Greater Nashville - 19 - Financial Model

20. The Power Of Greater Nashville - 20 - Current Environment Plans have been and will always be at risk for delay for many reasons - financial, public pressure, major equipment failures, weather, etc. It’s our experience that when plans are delayed beyond a reasonable timeframe, the cost of providing safe, reliable service dramatically increases, the solutions required to provide that service may not optimal, and there is increased risk to the reliability of the electric system This is a constant pressure on the planning process

21. The Power Of Greater Nashville - 21 - Capital Expenditures

22. The Power Of Greater Nashville - 22 - Current Gaps - Prioritization Current process is perceived to be unreliable In March 2003, began implementation of the EPRI Project Prioritization tool Goals: Model All Distribution Capital and O&M Projects Value projects using multiple attributes and Common Scale Determine measurements and weights Initial Model – Spring 2004 - T&D Projects only End result -> prioritized project list by value

23. The Power Of Greater Nashville - 23 - Project Prioritization

24. The Power Of Greater Nashville - 24 - Current Gaps - Work Mgmt. Mainframe legacy system installed in 1989 Purchased integrated system in 2002 (Mincom) Work Management, Finance, Supply Chain External consultant facilitated “Best Practice” process definitions Planned “Go-Live” is July 1, 2004 Goals: Enable one view of all work Improve ability to prioritize and manage work Improve project management Reduce overall cycle time for work lifecycle Provide accurate tools for estimation and design Ensure that resources are at the right place at the right time

25. The Power Of Greater Nashville - 25 - Work Management

26. The Power Of Greater Nashville - 26 - Current Gaps - Asset Mgmt. No existing system or formal process EPRI recommendation Process consultant recommendation New work management system will provide necessary data and support system (Equipment Register)

27. The Power Of Greater Nashville - 27 - Current Gaps - Asset Mgmt. Manage the Assets Asset Management Decision Support Maintenance Planning Budgeting Construction Planning Standards Other Work Planning System Planning

28. The Power Of Greater Nashville - 28 - Current Gaps - Asset Mgmt.

29. The Power Of Greater Nashville - 29 - Current Gaps - Asset Mgmt.

30. The Power Of Greater Nashville - 30 - Current Gaps - Asset Mgmt. Goals: Improve information on health of assets Improve ability to compare and prioritize capital work Improve project management Develop consistent maintenance programs Improve linkage between budgeted projects and actual work performed Benefits realization Improving quality of asset data Coordination of repair/replace decisions Improve short and long term budgeting Improve standards and estimating process

31. The Power Of Greater Nashville - 31 - The Future We striving for... More integration of and proficiency with tools and systems More public involvement in the planning process More accurate SCADA and OMS data More real time integration with SCADA Use of the Equipment Register to capture costs and operating statistics by circuit and equipment Better communication of the benefits and risks of proper T&D planning and construction to all of our stakeholders

32. The Power Of Greater Nashville - 32 - Future Integration Plans OMS (CADOPS) GIS SCADA Distribution Planning Transmission Planning Substation Forecast Reliability Planning System Automation CIS Common Data Base System Forecast Various Inputs Mobile Data/AVL Other Operational Applications Equipment Register

33. The Power Of Greater Nashville - 33 - Thank You!