NPCC Summer 2014 Reliability Assessment Overview

Adequate Summer Electricity Supplies Projected

The annual summer reliability assessment conducted by the Northeast Power Coordinating Council, Inc. (NPCC) concludes that the region will have an adequate supply of electricity this summer.

A wide range of assumptions were analyzed, including extreme weather conditions derived through over 40 years of experience, unexpected plant outages, transmission constraints between and within regions, implementation of operating procedures and estimated impact of demand response programs.

The assessment indicates that the NPCC geographic area (consisting of the six New England states, the State of New York, Ontario, Québec and the Canadian Maritime Provinces of New Brunswick and Nova Scotia) will have an adequate supply of electricity this summer, even during periods of extreme weather.

Extreme weather conditions are considered to be wide-spread and prolonged heat waves with high humidity and near record temperatures.

Severe system conditions were considered in this assessment including extended unit maintenance, higher than expected unit outages, reductions in the success of demand response programs and operating limitations assumed in neighboring regions.

Under the unusual situation where this severe set of system conditions occur coincidently with extreme weather conditions would the implementation of operating procedures and programs be anticipated to keep electricity supplies and demand in balance.

Summary of Key Findings

Approximately 2,400 Megawatts (MW) of new capacity¹ has been installed since last summer which includes projects expected to be in service over the course of this summer period. No delays to the in-service dates of new generating capacity are anticipated. Considering retirements (primarily comprised of the phase-out of coal-fired generation in Ontario), the resultant net change in NPCC generation (from 2013 NPCC summer peak week to 2014 NPCC summer peak week) is -2,742 MW.

For New York City and throughout New York State, an adequate supply of electricity is forecast this summer. Since the summer of 2013, major changes include the return to service of the Astoria Gas Turbine units 10 & 11 (64 MW) and Niagara Bio Gen Station (56 MW), the addition of the Orangeville Wind Farm (94 MW), and the retirement of the Syracuse Gas Turbines (102 MW). Considering all changes (from the 2013 peak week to the 2014 peak week), the resultant net change for New York generation is +56 MW.

Ontario is projected to have a sufficient supply of electricity this summer. Since the summer of 2013, major additions total approximately 1,300 MW, consisting of wind (912 MW), solar (50 MW), hydro (148 MW) and biomass projects (213 MW); major retirements include the phase-out of the coal-fired generation fleet (3,100 MW). Considering all changes (from the 2013 peak week to the 2014 peak week), the resultant net change for Ontario generation is -2,541 MW.

New England expects to have a sufficient supply of electricity this summer. Since the summer of 2013, 121 MW of new capacity has been added to the New England system from two wood/refuse projects and one fuel cell plant; retirements include the Salem Harbor Units 3& 4 (585 MW). Considering all changes (from the 2013 peak week to the 2014 peak week), the resultant net change for New England generation is -862 MW.

Québec and the Canadian Maritime Provinces have more than an adequate supply of electricity forecast for the summer period. Both of these areas are winter peaking. Normal hydro conditions are expected for the 2014 summer period.

Since the summer of 2013, Hydro-Québec Production has added 685 MW of wind projects and a third hydro unit at La Sarcelle (50 MW) for a total of 735 MW. Considering all changes, the resultant net change for Quebec generation (from the 2013 peak week to the 2014 peak week) is +598 MW.

For the Maritimes, there have been no new generation projects added since last summer.

Projected NPCC Load

The non-coincident (sum of the individual NPCC area) forecast peak demand for NPCC during the summer of 2014 is 108,200 MW (May – September period).

More importantly, the coincident NPCC 2014 summer peak demand forecast of 107,341 MW is expected to occur during July. This forecast is 41 MW lower than last year’s forecast coincident NPCC peak demand of 107,382 MW. Several factors drive this year’s summer peak demand forecast including the economic outlook, the on-going benefits of conservation measures, embedded generation, efficiency improvements and contributions from demand response programs.

Nevertheless, ambient weather conditions remain the most important variable in forecasting peak demand during the summer months. Historically, the peak loads and temperatures between New England and New York have a high correlation due to the relative locations of their respective load centers. Depending upon the extent and duration of a summer weather system, there is some potential for the Ontario summer peak demand to be coincident with New England and New York.

New England

The Independent System Operator of New England’s (ISO-NE’s) forecast summer 2014 peak demand is 26,658 MW, assuming historically-based expected summer peak weather conditions. The 2014 forecast of peak demand is 32 MW lower than the corresponding 2013 forecast of 26,690 MW. The lack of load growth is largely attributed to the increase in passive demand response programs (i.e. efficiency and conservation) coupled with an economic forecast of lower growth than last summer.

New York

The forecast peak load for summer 2014 by the New York Independent System Operator (NYISO) is 33,666 MW, which is 387 MW higher than the summer 2013 forecast of 33,279 MW. This is attributed primarily to the high load growth in the New York City area.

Ontario

The 2014 summer peak Ontario demand forecast by the Ontario Independent Electricity System Operator (the IESO) is 23,025 MW, and includes the reductions due to the on-going conservation initiatives and embedded solar and wind capacity. This forecast is 250 MW lower than last summer’s forecast peak demand of 23,275 MW.

Québec

The forecast 2014 summer peak load for Québec is 21,113 MW for the week beginning June 15, 2014. The Québec 2014 forecast is approximately 156 MW lower than the summer 2013 forecast of 21,269 MW (week of August 11, 2013). It should be noted, however, that Hydro-Québec’s system is winter peaking. Since some heating load remains on the system in early May and picks up again in late September, the summer peak for Québec may occur around those times.

Maritime Provinces

A 2014 summer peak load of 3,738 MW is forecast for the Maritime Provinces for the week of April 27, 2014. The Maritime Provinces are a winter-peaking area; forecast peaks for the shoulder months are normally higher than the summer period. The 2014 forecast peak is 223 MW higher than last year’s corresponding forecast summer peak of 3,515 MW (for the week of April 28, 2013).

Transmission and Resource Adequacy Summary

NPCC 2014 Summary

During the NPCC forecast coincident peak load week (beginning July 6, 2014), the overall spare operable capacity (capacity over and above reserve requirements) for NPCC is estimated to be 12,383 MW. A portion of this spare operable capacity is in the Québec and Maritime Provinces. The transfer capability between the Québec and the Maritimes Provinces to the remainder of NPCC will not permit the usage of all this forecast spare operable capacity. As a result, the spare operable capacity is reduced to 8,992 MW.

The week beginning June 15, 2014, represents the week with the lowest forecast operable capacity margin (spare operable capacity less transfer capability limitations); 7,278 MW is estimated to be available.

The margins forecast for NPCC this summer tend to counteract any negative impacts that delays to the facilities described below could have to the overall NPCC reliability assessment. It is important to note that the following is based on a 2013 summer to 2014 summer comparison (as opposed to the 2013 NPCC summer peak week to 2014 NPCC summer peak week comparison noted previously).

New England

Based on the 2014 load forecast (50% chance of being exceeded) and projected available capacity for the summer 2014 period, weekly operable capacity margins ranging from 676 MW to 5,000 MW are projected. These margins do not include the short-term capacity and energy purchases from neighboring systems that are anticipated to be available.

Supply-Side Resources

Since the summer of 2013, new generation projects include two wood/refuse projects and one fuel cell plant with nameplate ratings totaling 121 MW.

The New England generation fleet continues to be reliant on natural gas as a primary fuel source. Approximately 45 percent of the region’s generation is gas-fired, 22 percent of which claims dual-fuel capability. ISO New England and the interstate natural gas pipeline operators have communication protocols in place to exchange information and discuss specific system conditions in order to address potential reliability problems. ISO New England also has procedures that can mitigate regional fuel supply emergencies impacting the power generation sector.

ISO New England’s total wind capacity for 2014 summer is 789 MW, with 101 MW of that amount counted toward installed capacity.

Demand Response Resources

For the 2014 summer, New England has 700 MW of active demand resources that are expected to be available on peak. The active demand resources consist of real-time demand response and real-time emergency generation, which can be activated with the implementation of ISO-NE Operating Procedure No. 4 - Action during a Capacity Deficiency (OP 4). These active demand resources can be used to help mitigate an actual or anticipated capacity deficiency. OP 4 Action 2 is the dispatch of Real-Time Demand Resources, which is implemented in order to manage operating reserve requirements. Action 6, which is the dispatch of Real-Time Emergency Generation Resources, may be implemented to maintain 10-minute reserve.

In addition to active demand resources, there are 1,507 MW of passive demand resources (i.e. energy efficiency & conservation), which are treated as demand reducers in this assessment. These include installed measures (e.g., products, equipment, systems, services, practices and/or strategies) on end-use customer facilities that result in additional and verifiable reductions in the total amount of electrical energy used during on-peak hours. The amount of energy efficiency is based on capacity supply obligations in the Forward Capacity Market.

Transmission

The New England transmission system is anticipated to be sufficient for the 2014 summer period. New transmission facilities are anticipated to be placed in service in New England through the summer of 2014. Most of these additions are associated with the 345 kV transmission line segments that are part of the Greater Springfield, MA Reliability Project and the Maine Power Reliability Project.

New York

The New York Independent System Operator (NYISO) forecasts installed capacity of 37,983 MW for the peak week demand forecast of 33,666 MW. Accounting for purchases, sales, required operating reserve, planned and unplanned outages results in an operable spare capacity margin of 658 MW for the peak week.

Supply-Side Resources

For the 2014 summer season, major changes to generation in New York include the addition of the Orangeville wind farm (94 MW nameplate) and the return to service of Astoria Gas Turbine units 10 & 11 (total 64 MW nameplate), along with the retirement of the Syracuse Gas Turbines (102 MW nameplate) and mothballing of Ravenswood Gas Turbine Unit 7 (22 MW nameplate).

New York currently has 1,730 MW of installed nameplate wind capacity, of which 215 MW is assumed available during the summer peak demand period.

Demand Response Resources

The New York ISO has three demand response programs to support system reliability:

 The Emergency Demand Response Program (EDRP) provides demand resources an opportunity to earn the greater of $500/MWh or the prevailing locational-based marginal price (“LBMP”) for energy consumption curtailments provided when the NYISO calls on the resource.

 The Installed Capacity (ICAP) Special Case Resource program (SCR) allows demand resources that meet certification requirements to offer Unforced Capacity (“UCAP’) to Load Serving Entities (“LSEs”).

 The Targeted Demand Response Program (“TDRP”), introduced in July 2007, is a NYISO reliability program that deploys existing EDRP and SCR resources on a voluntary basis, at the request of a Transmission Owner, in targeted subzones to solve local reliability problems. The TDRP program is currently available in the New York City zone.

The NYISO projects 1,283 MW of total demand response available for the 2014 summer season.

Transmission

New York does not anticipate any reliability issues for the summer of 2014.

One of the two 345 kV Phase Angle Regulators at the Ramapo substation in Ramapo, NY returned to service this past winter, restoring the full transfer capability between PJM and NYISO.

Tower separation of the two Moses-Willis 230 kV lines in the North was completed during the 2013-14 winter. Completion of this project removes constraints on exports from this zone to Vermont and on transfers of available wind power south to the rest of New York.

Ontario

The Independent Electricity System Operator (IESO) of Ontario is anticipating spare operable capacity margin of 2,762 MW during the peak week (week beginning July 6, 2014). Ontario is projecting weekly operable capacity margins in the range of 1,968 MW to 5,618 MW for the summer of 2014.

Supply-Side Resources

By the end of the summer of 2014, the total capacity in Ontario is expected to decrease by 2,005 MW, as compared to the start of the 2013 summer period. This includes an increase of 912 MW of wind, 213 MW of biomass, 50 MW of solar and 148 MW of hydroelectric resources. There will be a reduction of 153 MW of coal generation during this summer assessment, for a total reduction of 3,140 MW of coal since the previous summer assessment. The 2,005 MW reduction in net total includes those resources anticipated to become commercial and have an applied derate beyond the forecasted peak week.

Demand Response Resources

The majority of Ontario’s demand response programs are dispatchable, market driven programs. The two main initiatives are Dispatchable Loads and Demand Response 3 (DR3). The Dispatchable Loads bid into the market and are dispatched off like any resource. This program has a total capacity of 806 MW. The DR3 program contracts loads that are dispatched off the system based on the supply cushion – the difference between demand and supply. This program has a capacity of 419 MW. One other program, Peaksaver, provides an additional 128 MW of capacity. Although the demand response total capacity is 1,353 MW, the effective capacity is 503 MW due to program restrictions and market participant actions. During peak periods of the year, market participants take independent action to reduce their consumption for economic reasons, reducing the available capacity for demand measures

The IESO is working to increase the role of demand response in Ontario to become more closely integrated with the day-to-day operation of the system. This effort will help the province reach a target of reducing peak demand by 10 percent by 2025. A new working group has been established to investigate the market-based opportunities to expand the role of demand response in Ontario.

Transmission

For the summer of 2014, Ontario’s transmission system is expected to be adequate with planned transmission system enhancements and scheduled transmissions outages. Due to internal constraints and external scheduling limitations, Ontario’s current expected coincident import capability is approximately 5,200 MW with all elements in service.

Québec

The Province of Québec is winter peaking. Adequate resources are forecast to be available to serve summer peak demand and meet operating reserve requirements. Québec is projecting weekly operable capacity margins in the range of 4,066 MW to 9,144 MW for the summer of 2014.

Supply-Side Resources

For this 2014 summer assessment, nameplate wind capacity of the Québec area is expected to reach 2,399 MW, a 685 MW increase since the last summer assessment. A third unit of 50 MW at the La Sarcelle hydro power plant was added at the end of 2013. The Installed Capacity is now 43,523 MW.

For this assessment, Québec assumed that the entire wind generation capacity is 100% derated.

Demand Response Resources

The demand response programs in Québec are neither required nor available for the summer period; they are available only during the winter period.

Transmission

A second -300/+300 Static Var Compensator, which helps control voltage, is expected to be in service at Bout-de-l'Île 735 kV for the 2014 summer. A number of transmission projects including 735-kV additions and wind generation integration projects are presently ongoing for in-service dates around the end of 2014.

Maritimes

The Maritime Provinces are also winter peaking. Adequate resources are forecast to be available to serve summer peak demand and meet operating reserve requirements. The Maritimes forecast spare operable capacity margins ranging from 899 MW to 2,078 MW over the summer 2014 period.

Supply-Side Resources

There are no generation projects for the 2014 summer.

The Maritimes currently have approximately 870 MW of nameplate installed wind capacity. After applying derates, the wind capacity for the summer period is assumed to be 172 MW.

Demand Response Resources

Interruptible and dispatchable loads are forecast on a weekly basis and range between 311 MW and 338 MW, and are available for use when corrective action is required.

Transmission

The Eel River HVDC station is out of service for refurbishment between New Brunswick and Quebec from March to November 2014. This will lower the transfer capability between New Brunswick and Quebec by 350 MW in either direction. Hydro Québec is also removing their Madawaska HVDC station from service from May 10 - 31, 2014. This will further reduce the transfer capability from Quebec to New Brunswick and New Brunswick to Quebec through the HVDC stations to zero during this May outage timeframe. There will be zero transfer between New Brunswick and Quebec during this May outage.

However, the Maritimes transmission system is projected to be adequate to supply the demand requirements for the 2014 summer period. No major transmission additions are planned for the 2014 summer period.

Estimated Need for Operating Procedures

A wide range of assumptions were analyzed, including extreme weather conditions derived through over 40 years of experience, unexpected plant outages, transmission constraints between and within regions, implementation of operating procedures and estimated impact of demand response programs.

In the probabilistic assessment, chronological system histories were developed by combining randomly generated operating histories of the generating units with the inter-area transfer limits and the hourly chronological loads. Consequently, the system was modeled in great detail with accurate recognition of random events, such as equipment failures, peak load forecast uncertainty, as well as the deterministic rules and policies that govern system operation.

Figure 1 shows the expected use of the indicated operating procedures under the base case assumptions and the expected load level. The expected load level is based upon the probability-weighted average of the seven load levels simulated.

See the attachment for Figure 1.

Use of operating procedures designed to mitigate resource shortages (reducing 30-minute reserve, voltage reduction, and reducing 10-minute reserve) is not anticipated during the 2014 summer period under expected conditions. On-going conservation efforts and demand-side management initiatives have resulted in approximately the same overall NPCC demand forecast as compared to last year. Additional resources and improved transmission capacity resulting from transmission projects planned to be available by this summer are additional factors that act to minimize the expected need for the use of these operating procedures in 2014.

Operating procedures are available to maintain reliability for the unlikely simultaneous combination of severe system conditions (such as reductions in anticipated resources, delay of expected transmission projects and/or additional constraints) materializing coincident with higher than expected loads (such as caused by a wide-spread, prolonged heat wave with high humidity and near record temperatures).

Operational Readiness

The Resource and Transmission Reliability Adequacy Assessments are key elements in determining NPCC’s ability to meet the forecast demands of the summer period. To be prepared to deal with the constantly changing operating conditions on the power system, as well as contingencies, NPCC routinely conducts daily and week-ahead planning calls between system operators and neighboring regions to coordinate short-term system operations.

NPCC continues to refine and expand its situational awareness capability to include wide-area visual displays of NPCC and its adjacent Regional Entities to further enable NPCC system operators and neighboring regions to communicate current operating conditions and facilitate the procurement of assistance under emergency conditions.

In addition, since 1989, NPCC has operating procedures in-place to mitigate the effects resulting from geomagnetic storms. NPCC system operators receive, on a continual twenty-four hour by seven day basis, the status of solar activity and geomagnetic storm alerts.

NPCC

NPCC is one of eight Regional Entities located throughout the United States, Canada and portions of Mexico. The NPCC geographic region includes the State of New York and the six New England states as well as the Canadian provinces of Ontario, Québec and the Maritime provinces of New Brunswick² and Nova Scotia. Overall, NPCC covers an area of nearly 1.2 million square miles, populated by more than 55 million people. In total, from a net energy for load perspective, NPCC is approximately 45% U.S. and 55% Canadian. With regard to Canada, approximately 70% of Canadian net energy for load is within the NPCC Region.

NPCC coordinates international electric power grid reliability for Northeastern North America. NPCC annually performs comprehensive seasonal assessments of electricity supply and demand reliability for eastern Canada, New England and the City and State of New York. These assessments require months of detailed preparation and are performed with the participation of regional electricity power grid operators and planners.

Additional information regarding NPCC is available at: www.npcc.org.

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¹ Based on summer nameplate ratings.

² Includes the connected part of northern and eastern Maine.