The New England 2001 Compliance Results Summary

1. The New England 2001Compliance ResultsSummary Operations & Planning Results for Compliance with NERC and NPCC Compliance Programs Year-End 2001 Agenda Item #10 3/05/02 RC Mtg.

2. Summary of Compliance Programs • 2001 NERC Program has 72 requirements • 2001 NPCC RCEP has 8 requirements • NPCC Reliability Assessment Program (NRAP) addresses both Operations and Planning • Total reporting requirements in excess of • Operations = 47 • Planning = 33

3. Summary of Program Results

4. Summary of Non-Compliance

5. Summary of Compliance Results • 100% compliance except • RCEP A4-1, Minimum Maintenance • Level 3 non-compliant • Enforceable, non-monetary • NPCC A3, Section 4.9 • Not enforceable • AVR Outage notification & ATC/TTC/CBM/TRM • Level 4 non-compliant • Not enforceable • Field test/Pilot phase • Based on input, removed from the 2002 Program

6. Ramifications of Non-Compliance • NPCC RCEP program only is enforceable • Level 3 non-compliant with Maintenance Criteria for Bulk Power System Protection (A4) • Letter from NPCC to the ISO-NE Board with copies to the CEO, Steve Whitley, other NPCC Areas, the NPCC Task Forces, the NPCC Reliability Coordinating Committee, the NPCC Executive Committee, NPCC Members, adjacent reliability Councils, and NERC (Secretary, President). Post on NPCC Web site.

7. Action plan for Non-Compliance • Reported nine exceptions to NPCC on 01/02/2002 • Each identified exception also listed a correction program and a timeline for becoming compliant in first quarter 2002 • All nine exceptions must be removed by May 1, 2002 or New England becomes Level 4 non-compliant

8. The New England 2001Detailed Compliance Results Operations & Planning Results for Compliance with NERC and NPCC Compliance Programs Year-End 2001

9. Compliance Programs • 2001 NERC Program has 72 Templates to comply with • Operations reports on 42 • Planning reports on 30 • 2001 NPCC RCEP has 8 Templates to comply with • Operations reports on 5 • Planning reports on 3 • NPCC Reliability Assessment Program (NRAP) established in 1977

10. Enhancements in 2001 • New hire in Operations for Compliance processing/reporting • Responsible Participants have been identified and educated with respect to Compliance requirements • Draft New England Compliance Procedure currently under consideration by NEPOOL for sanctions mechanism

11. OperationsCompliance Results Sponsors: Senior Vice President & COO, Steve Whitley Manager, Operations Support, Tom Dutkiewicz Supervisor, Ops Training, Procedures & Compliance, John Norden Operations Compliance Coordinator, Kathleen Goodman

12. Operations Compliance Results • “At a glance” • 100% reporting from Participants • All NPCC reporting deadlines met • One report of non-compliance by Participants • Template in field test by NERC this year • Level 4, mitigation plans filed • 100% compliance on all ISO-NE operations compliance requirements • Procedures have been revised or written, as necessary, to satisfy requirements

13. OperationsCompliance Results For Northeast Power Coordinating Council (NPCC) Reliability Compliance & Enforcement Program (RCEP)

14. NPCC RCEP Results • CPS1 > 100% all months, per requirement • CPS2 > 90% all months, per NPCC and NERC requirement; 98%<CPS2<92% for all but 2 months, per Corporate Goal but yearly average goal achieved • DCS = 0 violations, per NPCC requirement and Corporate Goal • A3-2, System Restoration Plan, report of full-compliance on 09/01/2001

15. OperationsCompliance Results For North American Electric Reliability Council (NERC) Planning Templates for which Operations reports to NPCC

16. ATC/TTC/CBM/TRM • Reported 100% compliance for ISO-NE • Reported Level 4 non-compliance for three New England Transmission Providers • Report indicated “We believe we are compliant with the intent of the current NPCC Draft Methodology. We will update when the methodology is complete.” • To date the NPCC methodology still not approved

17. Modeling & Generation Control • Six Measurements for ISO-NE • One for Modeling data • Five for Generation Control & Protection • One regional, reported by NPCC to NERC • Modeling Data Requirements • Electrical Facility Ratings • Normal & Emergency • 100% Compliant, per OP #16 • Submitted one month early

18. Generation Control Measurements • Generation Control & Protection - 5 requirements • Procedure for logging AVR Outages (M1) • Approval of AVR Outages (M2) • Specified Voltage & Reactive Schedules, including exempted Generators (M3) • Approval of Deviations from V&R Schedules (M4) • Maintain a record of misoperation of generation protection systems (M11)

19. Generation Control Results • Generation Control & Protection • M1 - 100% compliant per M/S #8 • M2 - Level 4 non-compliant due to Generators’ non-compliance • M3 - 100% compliant, per OP #12 • M4 - 100% compliant, per Satellites • M11 - 100% compliant, per OP #10

20. System Protection & Control • Underfrequency Load Shedding (UFLS) • Analysis and documentation on all underfrequency events below the initializing set points of their UFLS programs • 100% compliance - no NEPOOL members had any UFLS events in the 2000 reporting period • Undervoltage Load Shedding (UVLS) • Analysis and documentation on all UVLS operations, misoperations, & failures • No report, no UVLS programs in New England

21. System Restoration • Four Measurements • Three for ISO-NE compliance • One regional, reported by NPCC to NERC • Three ISO-NE requirements • Report of 100% compliance, comments on Templates offered • Number, location & size of blackstart units is sufficient; Testing or simulation required • Diagram of location of blackstart units, updated annually • Annual test of start-up and operation of blackstart units

22. OperationsCompliance Results For North American Electric Reliability Council (NERC) Operating Templates reports to NPCC

23. NERC CPS1, CPS2 & DCS • Same as NPCC reporting under RCEP • Reported through NPCC to NERC • CPS standards reported monthly; DCS reported quarterly • CPS1 > 100% all months, per requirement • CPS2 > 90% all months, per requirement; 98%<CPS2<92% for all but 2 months, per Corporate Goal • DCS = 0 violations, per requirement and Corporate Goal

24. Transmission Operations & Security • Required Policies for • Equipment Ratings • Monitoring & controlling voltages levels and real & reactive flows • Switching • Planning Outages • Development of Operating Security Limits (OSLs) and responding to OSL violations • Recovery from an OSL violation within 30 minutes • 100% compliance

25. Interchanges & ETagging • Interchange Transactions Implemented between adjacent Control Areas • Schedule verified with adjacent Control Area prior to implementation • Exceptions for schedules within a multi-party regional agreement or transmission tariff • Electronic Tagging (Etagging) • The Sink Control Area provides data from Tag to Security Coordinator electronically for each approved Interchange Transaction • 100% compliance

26. System Coordination • 100% compliant • Transmission System Modeling • Have facilities for Operators to monitor status, voltage, flows, frequency, etc. under normal & emergency conditions • Alert Operator to limit violations • Ability to share BES data with other Areas • Operational Security Information • Security Coordinator has all data requested • Interregional Security Network (ISN) • Data exchange between Security Coordinators

27. Emergency Operations • Actions must be taken to relieve abnormal conditions when an operating emergency has occurred • Take appropriate actions to reduce system risk, and provided adequate communication of system conditions with neighboring Areas • Capacity and Energy Emergency plans consistent with NERC Operating Policies have been developed and maintained to cope with operating emergencies • Must address all items in “Functional Areas of a Capacity and Energy Emergency Plan” (Plan)

28. Emergency Operations (cont.) • Report of 100% compliance, with exceptions explained due to deregulation/Markets • Five Items listed in Plan not explicitly noted • Fuel Supply & Inventory • Fuel Switching • Environmental Constraints • Optimize Fuel Supply • Appeals to Customer for Alternate Fuels • Responsibility now lies with Marketers • ISO-NE gives notice to the Market & public if we are projecting system issues

29. Restoration Plan • Eight requirements for Plan • Responsibilities of personnel for restoration • Provisions for reliable blackstart resource • Contingency plan for failures • Instructions & Procedures for • Re-synching Islands • Load Restoration • Yearly review of Plan & Testing of resources (3 yr.) • Documentation that operating personnel have been trained & exercised in Plan • Report of 100% compliance, comments on requirements offered

30. Operating Personnel & Training • Responsibility & Authority • Job description identifies authority, responsibility to adhere to NERC Policies, and is readily accessible in Control Room • Procedures identify authority to act independently, including directing implementation of firm load shedding • Ability to take necessary actions for reliability must be demonstrated • All Operators must be NERC Certified by 01/01/2001, except while in training • Report of 100% compliance

31. Security Coordinator Procedures • Next-day security analysis completed to ensure reliable operations under normal & contingency conditions • Must relieve transmission loading when requested by another Security Coordinator • Must initiate an Energy Emergency Alert (EEA), per requirements of Policy 9, Appendix A

32. PlanningCompliance Results Sponsors: Senior Vice President & COO, Steve Whitley Director, System Planning, Mike Henderson Manager, Transmission Planning, Rich Kowalski Lead Engineer, Dan Stosick

33. PlanningCompliance Results NRAP Reliability Assessment to NPCC RCEP Planning Templates reports to NPCC For North American Electric Reliability Council (NERC)

34. NRAP Reliability Assessment Results • NPCC Annual Survey of Generator Underfrequency Trip Settings • NPCC Criteria Document A-3, Section 4.9 • Sixteen Generators Reported Non-Compliant • All generator owners are investigating mitigating solutions to become compliant

35. NPCC RCEP Results • 100% Compliant • A2-1, Area Transmission Review, Annual Assessment of Reliability of the Planned Bulk Power Transmission System Within the New England Area • A3-1, Under-frequency Load-shedding, Capability of the Area to carry out automatic load shedding of 10% of its load at a nominal set point of 59.3 Hertz and an additional 15% of its load at a nominal set point of 58.8 Hertz

36. NPCC RCEP Results • Reporting Level 3: Non-Compliance • A4-1, Bulk Power System Protection Minimum Maintenance, Minimum periodic maintenance of each protection group consists of verifying that the protection group is capable of performing its intended protection function • Two generator and one transmission owner are still non-compliant, exceptions have been reported • One owner, 34 MW plant, will not receive delivery of batteries until January 2002. • One owner with under-frequency protection groups has not completed function testing.

37. NPCC RCEP Results • Level 3: Non-Compliance • Letter from NPCC to the Board of Directors of the Area with copies to the Chief Executive of the Area, the relevant functional head of the Area, other NPCC Areas, the NPCC Task Forces, the NPCC Reliability Coordinating Committee, the NPCC Executive Committee, NPCC Members, adjacent reliability Councils, and NERC (Secretary, President). Post on NPCC Web site.

38. NERC Compliance Program Results • 100% compliant • Four measurements involving transmission performance assessment of reliability • One measurement involving documentation of facility interconnection requirements • Three measurements involving disturbance data, monitoring equipment & reporting requirement

39. NERC Compliance Program Results • 100% compliant • One measurement involving facility ratings methodology & data documentation • Two measurements involving reporting of actual and forecast demands • Four measurements to provide steady-state data and develop models • Six measurements involving documentation of the coordination and the limitations of bulk power generator protection systems

40. NERC Compliance Program Results • 100% compliant • One measurement involving program, performance & maintenance documentation of under-frequency load-shedding • Four measurements involving program, performance & maintenance documentation of under-voltage load-shedding • Four measurement involving program, performance & maintenance documentation of automatic restoration of load

41. Questions