Discussion of the ISO’s Draft 2017 Annual Work Plan · • Three major upcoming project implementation milestones will occur over the next 21 months: –February 6, 2017 ... –Results

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S E P T E M B E R 9 , 2 0 1 6 M A N C H E S T E R , N H

Vamsi Chadalavada E X E C U T I V E V I C E P R E S I D E N T A N D C H I E F O P E R A T I N G O F F I C E R

Discussion of the ISO’s Draft 2017 Annual Work Plan

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Objective and Highlights

• The ISO’s primary emphasis in 2017 and 2018 is on implementation activities and design changes to support previously committed work

• Three major upcoming project implementation milestones will occur over the next 21 months: – February 6, 2017

• Zonal Demand Curves (FCA 11)

– March/April 2017 • Real-Time Fast-Start Pricing • Sub-Hourly Real-Time Settlement • Market Enhancements for Dispatchable Asset Related Demand (DARD)

Pumps

– June 1, 2018 • Price Responsive Demand • Forward Capacity Market (FCM) Pay for Performance (PFP)

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Objectives and Highlights, continued

• Emerging work will affect the timing of the various activities in the ISO’s 2017 Annual Work Plan

• As a result of placing a high priority on IMAPP, price formation efforts related to Day-Ahead Reserve Market and multi-hour ramp pricing will have a delayed start of at least one year

• There is uncertainty with respect to FERC orders/requests related to frequency response, storage and energy market offer caps, and other price formation areas

• If the narrow switch of the FCA auction mechanics from Descending Clock Auction to a Sealed Bid Auction is of continued interest to stakeholders, the ISO will assess the work needed to make a change – The ISO seeks feedback on this item

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Objectives and Highlights, continued

• NEPOOL’s Attachment K Economic Study continues to make good progress, with discussion on results scheduled for later this year and into next year

• Order 1000 related implementation efforts are underway and will continue in 2017, consistent with our tariff obligations – Includes updates of planning guides, a draft RFP for competitive

solicitation, and efforts to implement FERC’s Planning for Public Policy requirements

• Cyber security will continue to be a big area of emphasis – Recent FERC order on supply chain management, CIP Version 5

• Slides 5 − 7 offer a Gantt chart view of the ISO’s Q4 2016 − Q2 2018 activities

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Planning/ Operations Related Activities

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Markets Related Activities

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Capital Projects

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PLANNING/OPERATIONS ACTIVITIES

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Order 1000 Implementation

• Implementation efforts are underway – Given the amount of change in the planning process from Order 1000,

these efforts will continue into 2017 as we gain experience and identify necessary process improvements

– FERC may issue further guidance as a result of the June 27-28, 2016 Technical Conference on Order 1000

• Planning for Public Policy – ISO is planning to initiate the first cycle of Planning for Public Policy in

January 2017

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Transmission Planning Studies

• Updated Needs Assessments will be conducted in 2017, in accordance with the Planning Process – Updated regional load forecast, Energy-Efficiency (EE) forecast and

Solar PV forecast – Resource mix will be adjusted for the results of the first 11 Forward

Capacity Market Auctions • New Resources • Resource Retirements and de-list bids • Other resource changes

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Transmission Planning Studies, cont.

• To improve consistency of base cases used in deterministic analyses, the ISO is developing a methodology capturing both probability and condition/event-driven scenarios, as discussed in 2016 – This will be integrated into the Transmission Planning Process

Guide by Q2 2017 – Transmission Planning studies will utilize the probability and

scenario-based base case methods in Q2 − Q3 2017 – The ISO continues to review required data (conventional

thermal resource availability; hydro, wind, and PV resource availability; and load modeling) and will evaluate the inputs and correlations with historical data as it relates to the long-term load forecast – Q4 2017

• Updates will be made to Planning Procedure 3, which establishes the reliability criteria for the PTF in New England

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Transmission Cost Allocation (TCA)

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Transmission Owner Project

Pool Transmission Facilities (PTF) Cost Estimate Target Date

VELCO PV-20 Cable Replacement ~53M Potential 2017 TCA Process Completion

VELCO Vermont Solutions CT River Valley ~134M Potential 2017 TCA Process Completion

Eversource/NGRID Advanced Boston Projects ~60M Potential 2017 TCA Process Completion

Eversource/NGRID

Greater Boston Project ~860M Potential 2017 TCA Submittal

Eversource SWCT (Southwest Connecticut) ~430M Completion of TCA Submittals in 2017

Eversource GHCC (Greater Hartford and Central Connecticut Area)

~357M Completion of TCA Submittals in 2017

Eversource Pittsfield/Greenfield Phase 2 ~92M Potential 2017 TCA Submittal

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Annual Economic Studies

• Reflecting NEPOOL’s priorities, the ISO is reviewing potential impacts of emerging public policy on performance of the power system and markets in New England

• Draft results started to be presented to PAC in the summer 2016

• After completion of the production cost modeling, a second phase of the study will look at the operability of each scenario and an assessment of additional market outcomes – This effort will continue into 2017

• Results will be part of the region’s consideration of the impacts of public policy on markets (IMAPP)

Attachment K Economic Study: 2016

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Attachment K Economic Studies: 2017 and 2018

• 2017 Economic Study requests will be submitted no later than March 31, 2017

• 2018 Economic Study requests will be submitted no later than April 2, 2018


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Interregional Planning

• Eastern Interconnection Planning Collaborative (EIPC) 2017 Activities: – Model Roll-up and Evaluation (contingency analysis and/or transfer

analysis) for a future case (year TBD) will be initiated in 2017 – DOE Annual Transmission Data Report

• There are a number of forums and activities related to interregional planning efforts beyond EIPC – North American Electric Reliability Corporation (NERC) – Northeast Power Coordinating Council (NPCC) – Inter-Area Planning Stakeholder Committee (IPSAC) – Department of Energy (DOE) Congestion Study Support – Northeast Gas Association (NGA)

• ISO, NYISO, and PJM will continue implementing the Amended and Restated Northeastern ISO/RTO Planning Coordination Protocol, including the interregional planning portion of Order 1000 in 2017 – These efforts will reflect experience gained and processes will be revised

as required

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Data Collection and Finalization of Energy-Efficiency Forecasts

• State Sponsored Energy-Efficiency Programs – The Regional Energy-Efficiency Initiative (REEI) efforts have highlighted

the New England states’ activities and investments in energy efficiency – Data is being gathered to support the development of the 2017 EE

forecast, expected to be completed in Q2 2017 – ISO will continue working with the Energy-Efficiency Forecast Working

Group to review and refine the EE forecast process – Data gathering to support development of the 2018 EE forecast to

begin in Q3 2017

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Distributed Generation (DG) Forecast

• By May 1, 2017 issue the DG forecast with DG Forecast Working Group input and use of Solar Photo voltaic(PV) production data – Initiate improvements to the data collection process

• PV forecast will be used for calculating ICR and Qualification studies, starting with FCA #10 and earlier commitment period ARAs/Bilaterals

• Technical issues have been identified regarding the interconnection and operability of solar photovoltaic and other distributed resources that will require changes to IEEE and state interconnection standards – The ISO will participate in processes that revise the standards – Revised standards are expected by the end of 2016

• The ISO is exploring the integration of irradiance data into the ISO weather forecast, which feeds into the load forecast, to better anticipate solar generation in real-time

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Stakeholder and Regulatory Review of Installed Capacity Requirements (ICR) / Local Sourcing Requirements (LSR) • Prepare inputs to ICR and LSR calculations for FCA

#12 (2021/2022) – Power Supply Planning Committee review of ISO

recommendation of ICR values – June/July/August 2017 – Reliability Committee review/vote – September 2017 – Participants Committee review/vote – October 2017 – File with FERC – November 2017 – Forward Capacity Auction #12 conducted – February 2018

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Modeling Capacity Zones (FCA #12 Capacity Zone Topology, Regional Transfer Limits, Identify Potential Zones, FCA 12 Zonal Requirements)

• FCA #12 Capacity Zone modeling process will begin in late 2016 – ISO will present an overview of the expected power system topology

for the 2021/2022 Capacity Commitment Period (FCA #12) in Q4 2016 – This presentation will include a review of existing zones, discussion of

relevant constraints, and factors that could “trigger” the use of these zones in FCA 12

• Regional transfer limits will be updated in Q1 2017

• Any changes or updates to Capacity Zones for FCA #12 will be identified in Q1/Q2 2017

• Zonal requirements for FCA #12 will be determined in Q2/Q3 2017

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FCM Auction Key Dates

• Commitment Period #8 (2017-2018) – ARA #3 – March 2017

• Commitment Period #9 (2018-2019) – Second Bilateral Period – May 2017 – ARA #2 – August 2017 – Third and final Bilateral Period – December 2017

• Commitment Period #10 (2019-2020) – First Bilateral Period – April 2017 – ARA #1 – June 2017

• Commitment Period #11 (2020-2021) – Conduct Auction – February 2017 – Results Filing – February 2017

• Commitment Period #12 (2021-2022) – Show of Interest Window – April 14 thru April 28, 2017 – Retirement FERC Information Filing – July 2017 – FCA FERC Informational Filing – November 2017 – Conduct Auction – February 2018

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Black Start Review

• The ISO compensates certain resources that are capable of providing black start services

• The ISO is reviewing the compensation mechanisms

• If, after assessment, the ISO determines any changes should be considered, the earliest start of the stakeholder process would be Q2 2017

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FCA 13 CONE Adjustment

• The ISO will complete an assessment on the adjustment of the Cost of New Entry (CONE), as required by Market Rule 1 – The full FCA 12 CONE Recalculation is currently underway and

described on slide 34 – The CONE adjustment occurs between years of a recalculation – The adjusted CONE and Net CONE values will be published on the ISO’s

web site

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Wind Interconnection Group Studies

• In response to the backlog of Interconnection Requests in Maine, and following stakeholder discussions in 2016, the ISO will present a proposal on interconnection clustering in Q3 2016 – Any associated filing on clustering studies would be targeted for filing

in Q1 2017

• The ISO is conducting a strategic transmission assessment to identify the transmission expansion that could enable the interconnection of requested generation in Maine – Current schedule is to present study results by Q4 2016

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Generator Interconnection Studies New Generation Update as of August 1, 2016

• In total, 95 generation projects are currently being tracked by the ISO totaling approximately 11,400 MW

– 2 in scoping stage

– 11 in feasibility study (FS)

– 40 in system impact study (SIS)/optional interconnection study

– 1 in facilities study

– 10 negotiating interconnection agreements (IA)

– 24 with interconnection agreements

– 7 distribution interconnections

Note: Additionally, there are 11 Elective Transmission Upgrades (ETU) in the SIS phase and 2 ETU’s in the FS phase and 1 negotiating its IA.

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Regional System Plan (RSP) 2017

• RSP data collection and analysis needed to inform the RSP are ongoing

• Based on stakeholder feedback, the ISO changed the RSP cycle to a biennial rather than an annual process – Key information continues to be available to stakeholders consistent

with current data release schedules (annually, quarterly, etc.)

• The next RSP will be issued in 2017 (RSP17) – Scope of work and schedule will be discussed with the PAC by Q1 2017

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Winter Reliability Programs

• 2016/17 and 2017/18 winter reliability program services – Compensation for unused oil inventory, unused liquefied natural gas

(“LNG”) contract volume, and Demand Response Service – The ISO published the 2016/17 rates of compensation July 15th 2016

• Upcoming winter reliability program deadlines include: • By Oct. 1: Commitments must be made • By Oct. 15: ISO publishes the maximum potential cost of program • By Dec. 1: Inventory must be stored • By Jan 1: Inventory used for audits must be replaced • By Jan 1: Duel Fuel Audits must be completed

• The ISO will provide monthly updates on the program at the NEPOOL Participants Committee meetings

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NERC/FERC Compliance/Cyber Security

• Ensure compliance with new and existing NERC and FERC orders – Maintain compliance monitoring with required self-certifications – Work with NERC on its new Reliability Assurance Initiative – Continued interaction with Participants on matters relating to NPCC's

administration and auditing of NERC Standards

• Improving ISO programs for managing system models to support enhanced NERC modeling and planning requirements

• Enhance existing tools, processes and controls to provide better protection against current and emerging cyber security threats

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• NERC Standards: Operational and Planning Studies

• ISO is continuing to address different planning, modeling, relay protection, and Critical Infrastructure Protection standards

– Assess new dynamic operating characteristic information provided by generation owners as model updates are provided

– Study impact of Geo-Magnetic Disturbances

– Continue assessment of appropriate dynamic load models and address any newly identified system concerns

– Assess the impact of continued penetration of Distributed Energy Resources

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• NERC Standards: Comparison of Steady State and Dynamic Events to Simulations

• Requires ISO to compare simulations to actual system events in 2017

• Will require migration of system topology information from Energy Management (EMS) Systems into the PSS/E Model (PSS/E is a format widely used in planning studies)

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• NERC Grid Security Exercise – NERC will be conducting its fourth exercise (GridEx IV) on

cyber and physical security in November 2017 – The exercise brings together NERC, the industry, and

government agencies, as well as participants from Canada and Mexico • Exercise the readiness of the electricity industry to respond to a

security incident • Review existing command, control, and communication plans and

tools • Identify potential improvements in cyber and physical security

plans, programs, and responder skills • Coordinate with federal, state and local law enforcement agencies

– ISO will share relevant results with stakeholders following issuance of NERC report in Q2 2018

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ISO-NE INTERNAL USE

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MARKET RELATED ACTIVITIES Integrating Markets and Public Policy Related

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Integrating Markets and Public Policy (IMAPP) Assessment

• The ISO is observing and attending NEPOOL’s meetings to develop potential solutions to maintaining transparent and competitive markets that can also incorporate the states’ initiatives for clean energy – The ISO’s observations on the proposals will focus on how the

proposals serve to maintain reliability and market efficiency while meeting the objectives of the six New England states’ energy and environmental laws

• After a conceptual framework is created, the ISO will work with NEPOOL and the states to assess and develop a workable solution – This effort is expected to continue from the present through Q2 2018 – Any potential implementation efforts will depend on the scope of a

final proposal

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MARKET RELATED ACTIVITIES Capacity Market Related

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CONE Recalculation and ORTP Updates Project

• For FCA #12, as required by the tariff, the ISO is reviewing and proposing revised values to CONE, Net CONE, and ORTPs

• Last CONE recalculation was for the 2018 − 2019 Capacity Commitment Period

• The stakeholder process is underway and is targeted to be completed in Q4 2016 – Implementation is targeted for Q1 2017

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FCM Enhancements Phase II Project

Phase II of FCM Enhancements includes: – Qualification timeline changes – Review of commercial determinations for intermittent resources – Other FCM enhancements

• Including market rule cleanup changes

• The stakeholder process is targeted to be completed in Q2 2017 – Implementation will depend on the scope of the proposal

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Zonal Demand Curves Conforming Changes: Reconfiguration Auctions & CSO Bilaterals Project

• Approaches to Reconfiguration auction (RA) and CSO Bilaterals will be developed now that changes associated with Zonal Demand Curves have been completed

• The stakeholder process is targeted to be completed in Q3 2017 – Implementation is targeted for early 2018

• To coincide with the first Annual Reconfiguration Auction for Capacity Commitment Period 11 (starting June 2020)

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FCM Pay for Performance (PFP) Conforming Changes Assessment

The FCM PFP design links capacity revenues to resource performance during reserve deficiencies

• In June 2018, the provisions for the Capacity Commitment Periods associated with FCM PFP will take effect

• In preparation for implementation, the ISO is conducting an assessment of the market requirements and will determine if any updates are needed

• Pending assessment results, the stakeholder process could begin in Q2 2017 – Any changes needed to be implemented would be targeted for Q2

2018

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Forward Capacity Auction Format Assessment

• As requested by NEPOOL, the ISO has reviewed the FCA’s Descending Clock Auction (DCA) format and discussed implications of the format with stakeholders – A second FCM DCA Forum to answer stakeholder questions occurred

on July 14, 2016

• If revision to a Sealed Bid Auction (SBA) remains a priority for stakeholders, further assessment will be needed to evaluate what changes (to the design, tariff and software) would be required to accommodate a narrow change to the auction format – Feedback on priority is requested

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Treatment of Resources Retained for Reliability Assessment

• ISO has been evaluating potential modifications to the treatment of resources retained for reliability

• During the second FCM DCA Forum, ISO indicated a different auction structure, along with associated timing changes, could provide a mechanism to review new resources and delist bids simultaneously – This could minimize the occurrence of retaining resources for

reliability – Further assessment of this approach is contingent on the prioritization

of the DCA/SBA work (see above) and the IMAPP scope of the work

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MARKET RELATED ACTIVITIES Energy and Reserve Market Related

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Natural Gas Index Changes Project

The Algonquin Gas Transmission-Citygates (AGT-CG) price is currently used in the Peak Energy Rent (PER) strike price, the import capacity resource offer threshold price (OTP), and the Forward Reserve threshold price (FRTP)

• A number of participants asked the ISO to review trading liquidity at AGT-CG and to determine whether continued use in ISO processes is appropriate

• The stakeholder process is underway and is targeted to be completed in Q4 2016 – Implementation is targeted for Q4 2016

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NCPC Modifications for Sub-Hourly Real-Time Settlement Project

The ISO identified NCPC-related changes that should be made in conjunction with the implementation of the Sub-Hourly Settlement design

• The stakeholder process is underway and is targeted to be completed in Q1 2017 – Implementation targeted by the end of Q1 2017

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Order 825 Compliance Assessment

FERC proposed rules for shortage pricing and settlement intervals

• The ISO has already taken steps with Sub-Hourly Settlements to align settlement and pricing intervals

• The ISO is assessing the Order to determine if any additional modifications are required

• This issue is in the assessment phase, therefore timeframes for stakeholder discussions are not final

• If changes are needed, the stakeholder process, may begin as early as October 2016 (Q4 2016)

• FERC requires filings by January 2017

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Price Responsive Demand (PRD): Conforming Changes Project

The ISO is fully integrating demand response into wholesale markets

• The conforming changes required to incorporate demand response resources into the energy and reserves market include: – Integrating demand response resources into the base market design – Applying recent or ongoing market design changes to demand

response resources as appropriate

• The stakeholder process is targeted to be completed in Q2 2017 – Implementation is targeted for Q2 2018

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Enhanced Storage Participation Assessment

The ISO is evaluating the participation of storage in the ISO markets to determine if any additional enhancements could be recommended

• This issue is in the assessment phase; therefore, timeframes for stakeholder discussions are not final

• If changes are proposed, the stakeholder process could start in Q3 2017 – Implementation would depend upon the scope of any potential

proposal

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Day-Ahead Reserve Market Enhancements Assessment

The ISO will evaluate design changes to the Day-Ahead Energy Market to procure and price Operating Reserves in co-optimized day-ahead energy and reserves markets

• This topic is in the assessment phase, therefore timeframes for stakeholder discussions are not final

• As noted above, this effort is delayed at least one year by IMAPP efforts and other committed work – Q4 2017/Q1 2018 is earliest stakeholder discussion of issues and

conceptual design would begin – Implementation would be evaluated as part of developing the

proposal, but is expected no earlier than 2020

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MARKET RELATED ACTIVITIES Other Design Work

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Balance of Planning Period (BoPP): Financial Assurance (FA) and Conforming Changes

The BoPP project changes the auction structure for Financial Transmission Rights to increase liquidity and enhance price discovery

• A new Financial Assurance construct is required for the Financial Transmission Rights (FTR) under the BoPP monthly auction design

• After the FA construct is determined, the ISO will assess whether conforming changes are necessary for the market rules and manuals

• The stakeholder process is ongoing and is targeted to be completed by Q2 2017 – Implementation is targeted for Q3 2017

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FERC Orders and NOPRs

If FERC issues Orders and Notices of Proposed Rulemaking (NOPRs), or ISO has to respond to filings, it would impact the ISO’s plans on other identified priorities

– For example, FERC’s evaluations regarding price formation in the energy and ancillary services markets operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs); compliance orders; responses to participant filings

• Compliance with FERC Orders are always imperative – Timing on stakeholder review is dependent on when the Orders and

NOPRs are issued by the FERC and subsequently dependent on the scope of corresponding assessments and projects

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Deferred Assessments:

• Multi-Hour Ramp Pricing – The ISO is planning to assess the potential development of a new

system ramping product to convey, through transparent prices, the costs incurred when the system must be re-dispatched in advance of a sustained load ramp

– This work and stakeholder process will begin after the Day-Ahead Reserve Market proposal has been completed

• External Transaction Offer Flexibility – The ISO plans to evaluate allowing more flexibility for external

transactions to offer or re-offer priced transactions in real-time at non-CTS locations

• NCPC Cost Allocation – The ISO plans to assess cost allocation issues after the completion of

the Day-Ahead Reserve Market Enhancements project

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ISO-NE INTERNAL USE

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CAPITAL PROJECTS

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Forward Capacity Auction (FCA) 11

The FCA-11 project includes the implementation of two recent

projects: 1) Zonal Demand Curves and 2) Resource Retirement

Reforms

1) Zonal Demand Curve related tariff and manual changes

necessitate new software and procedures to implement the

Auction with the Zonal Demand Curves in place

2) Participants will now be required to price retirement

requests. Implementation will include procedures to support

retirement bid review by the Internal Market Monitor

• The targeted completion date for this project is Q1 2017

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Forward Capacity Auction (FCA) 12

The FCA-12 project will include the effort to address

reconfiguration auctions and CSO Bilateral changes associated

with the Zonal Demand Curves

– FCA-11 included the zonal demand curves into the Forward Capacity

Auction for import and export constrained capacity zones


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Real-Time Fast-Start Pricing

Fast-Start Pricing changes improve price formation when rapidly responding resources are deployed

• Real-Time Fast Start Pricing implementation requires significant software and systems work related to: the Real-Time Scheduling, Pricing and Dispatch applications, the Real-Time Locational Marginal Price Calculator, the Coordinated Transaction Scheduling Price Engine and the Real-Time Unit Commitment application – An external vendor will be auditing and certifying changes to the RT

Scheduling, Pricing and Dispatch applications and the LMP Price Calculator


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Sub-Hourly Real-Time Settlements (SHS)

Sub-Hourly Real-Time Settlement will compensate resources at more granular five minute prices, providing a more accurate market signal of the power system’s current operating conditions

• To implement SHS, ISO needs to synchronize the Settlements Market System (SMS),Market Information System (MIS) and Energy Management System (EMS) to the new settlement intervals – This includes software and hardware updates to accommodate the

increased volume calculations and reports generated.

• Additional updates are needed to: the Gateway Data Modification Application, website publishing, Oracle Business Intelligence and Statistical Analysis Software


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Market Enhancements for Dispatchable Asset Related Demand (DARD) Pumps

This project adds intertemporal parameters that will improve the modeling and dispatch of DARD Pumps and provides Market Participants with the ability to better manage the operation of DARD Pumps

• To implement this project, new parameters such as minimum run time and minimum down time must be built into existing software and tested


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2017 Issue Resolution Phase I & II

The ISO identifies business concerns proactively and tracks their progress and resolution

• The 2017 Issue Resolution Project will focus on resolving identified concerns that enhance various software systems. The software changes can span a wide range of functionality including: user interface improvements, internal and external reporting modifications, and other market related improvements

• The targeted completion date for Phase I is Q2 2017

• The targeted completion date for Phase II is Q4 2017

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Balance of Planning Period (BoPP): Financial Assurance

The BoPP project changes the auction structure for Financial Transmission Rights to increase liquidity and enhance price discovery

This capital project aims to implement the new monthly FTR auction and the FTR Financial Assurance methodology

• This project is still being discussed with stakeholders, but the targeted completion for this project is Q3 2017

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EMP 3.1 Upgrade and Customs Reduction

ISO-NE’s Energy Management System is based on GE’s suite of Energy Management Platform (EMP) applications. GE has released the new version of the EMP, version 3.1. In order for GE to provide support for EMP, ISO-NE must be upgraded to this version well before 2020

• This project involves work with GE to upgrade to EMP 3.1 as well as to eliminate some of the ISO-NE customs, with the goal of simplifying this software upgrade

• The project will start planning activities in 2016 with the initial goal of upgrading before the end of 2019

• This project includes capital expenditures for work through Q2 2018 – This project will continue to appear on subsequent Annual Work Plans

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Desktop Segregation Project - Cyber Security

The ISO will design and implement an isolated network to segregate network access

• Best practices have developed around isolating access to networked services and systems based on job requirements

• The implementation efforts will include: assessing risks, developing procedures, hardware and software changes, and maintaining new processes


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Infrastructure Enhancements

• Update Enhanced Energy Scheduling (EES) Technical Architecture – In 2011, stakeholders for New England and New York supported an

enhanced scheduling process to improve the efficiency of electricity trades between the two regions

– This Initiative is intended to reduce cyber security vulnerabilities, maintain availability of technical services, and gain cost efficiencies • The targeted completion date for this project is Q1 2017

• Zonal Load Forecast – The ISO has developed a Zonal Load Forecast prototype to create a load

forecast for each load zone, demonstrating that the ISO can develop models that produce accurate Zonal Load Forecasts

– The project will incorporate Zonal Load Forecast functionality into the existing Load Forecast application, and adjust downstream systems using load forecast data accordingly • The targeted completion date for this project is Q2 2017

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Infrastructure Enhancements, Continued

• Forward Capacity Tracking System (FCTS) Technical Architecture Upgrade – This capital initiative will reduce cyber security vulnerabilities, maintain

availability of technical services, and gain cost efficiencies – The targeted completion date for this project is Q4 2017

• Situational Awareness – Improves overall system awareness for the reliability of transmission

system – The targeted completion date for this project is Q2 2018

• Operations Document Management System (ODMS) – The Operations Document Management System (ODMS) is an application

used to manage the lifecycle of procedures and documents – This project will consider other options for custom workflows, which will

be unsupported as of 2017 – The targeted completion date for this project is Q4 2017

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Infrastructure Enhancements, Continued

• Power System Modeling Management Initiatives – This project will improve the power system network model used for the

Energy Management System (EMS) • From this, the ISO will work with the applicable Transmission Owners

to correct any parameter these errors identify – Implementation includes modelling to identify critical measurements and

developing software that allows for off-line detection of estimator parameter errors that could impact the state estimator solution

– The targeted completion date for this project is Q3 2017

• Asset Characteristic Database & User Interface Re-Design – Will provide the ISO Internal Market Monitor and participants enhanced

functionality to track generator characteristics for reference level calculations

– The targeted completion date for this project is Q2 2017

• Update Transmart Technical Architecture – Transmart is the application used to manage all aspects of real-time

external transactions before, during, and after real-time – The targeted completion date for this project is Q2 2017

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IMM Data Needs

IMM requires access to a large variety of market data for both the current and historical time periods

• This will allow the IMM group to better analyze data across multiple markets and multiple market products; the end result will be the implementation of a new IMM Market Analysis system


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Price Responsive Demand (PRD)

The ISO is fully integrating demand response resources into ISO markets comparable to other supply resources starting June 1, 2018

• Implementation for this project includes major software alterations – To enable demand response resources participate fully,

comprehensive updates to operational and settlement software must be developed and tested


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FCM Pay for Performance

The Pay For Performance design links capacity revenues to resource performance during reserve deficiencies

• Implementation includes building software that determines if a Capacity Scarcity Condition has been triggered in each reserve zone, reserve product and dispatch interval


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ACTIVITY DRIVERS

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Activity Driver Reliability Impact Market Efficiency Impact

Order 1000 Implementation

Tariff Compliance Medium Low

Transmission Planning Studies

NERC/NPCC/ Tariff Compliance

High Medium

Transmission Cost Allocation

Tariff Compliance Low N/A


Tariff Compliance Low Low

Interregional Planning

Public Policy Medium Medium

EE Forecast Public Policy Medium Medium

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Planning/ Operations Activity Drivers

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Activity Driver Reliability Impact

Market Efficiency Impact

DG Forecast Public Policy Medium Medium

Stakeholder and Regulatory Review of ICR

/ LSR

NERC/FERC/Tariff Compliance

High Medium

Modeling Capacity Zones Tariff Compliance High High

FCA 11/FCA 12 Annual Reconfiguration

Auctions Tariff Compliance High High

Black Start Review FERC/ NERC Compliance

High Low

FCA 13 CONE Adjustment

Tariff Compliance Medium Medium

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Planning/ Operations Activity Drivers, cont.

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Wind Interconnection Group Studies

ISO; Market Participants

Medium Medium

Generator Interconnection Studies

Tariff Compliance

Medium Medium

RSP 2017 Tariff

Compliance Medium Low

2016/17 & 2017/18 Winter Program

Tariff Compliance

High Medium

NERC/FERC Compliance/ Cyber Security

NERC/FERC Compliance

High N/A

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Planning/ Operations Activity Drivers, cont.

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CONE and ORTP Tariff

Compliance Medium High

FCM Enhancements Phase II

Market Participants

Low Medium

ZDC Conforming Changes:

Reconfiguration Auctions and Bilaterals

ISO Initiative Medium Medium

Natural Gas Index Changes

ISO and Market

Participants Low Medium

71

Market Related Projects Activity Drivers

ISO-NE PUBLIC


NCPC Modifications for Sub-Hourly Real-

Time Settlement ISO Initiative Low Medium

PRD: Conforming Changes

ISO Initiative Low Medium

Balance of Planning Period FA

ISO Initiative Low Medium

72

Market Related Projects Activity Drivers, cont.

ISO-NE PUBLIC



Estimated 2017 Implementation Costs

FCA-11 Tariff Compliance High High $0.3M

FCA-12 Tariff Compliance High High $2.0M

Real-Time Fast-Start Pricing

Market Participants; ISO Initiative

Medium High $0.4M

Sub-Hourly Real-Time Settlement

Market Participants Medium Medium $1.0M

Market Enhancements for Dispatachable Asset Related (DARD) Pumps

Market Participants; ISO Initiative

Medium Medium $0.4M

73

Capital Project Activity Drivers

ISO-NE PUBLIC




2017 Issue Resolution Phase I & II

ISO Initiative Medium Medium $1.5M

Balance of Planning Period Financial

Assurance ISO Initiative Low Medium $1.0M

EMP 3.1 Update and Customs Reduction

ISO Initiative High Low $1.0M

Desktop Segregation Project- Cyber Security

NERC/FERC/ NPCC

High N/A $ 1.5M

74

Capital Project Activity Drivers, continued

ISO-NE PUBLIC




Infrastructure Enhancements

Technology Upgrade

Medium Medium $3.8M

IMM Data Needs ISO Initiative Medium Medium $1.5M

Price Responsive Demand

Tariff Compliance Medium Medium $4.0M

FCM Pay for Performance Tariff Compliance Medium High $3.0M

75

Capital Project Activity Drivers, continued

ISO-NE PUBLIC

76

Capital Projects

• Each quarter, the ISO discusses changes and updates to its capital budget with stakeholders and files a quarterly capital projects report with the FERC – The quarterly report captures any changes in the cost of a project – The quarterly report also notes projects that are completed and new

projects that are chartered – The most accurate quarterly costs are reflected in these quarterly

reports – Please note that the resource estimates and costs contained in this

presentation are only approximations, likely to change through the course of the year based on scope, schedule and other emerging priorities

ISO-NE PUBLIC

77

Resource Allocation Estimates

• The next two slides illustrate the relative resource allocation across activities contained in the work plan – These resources are only estimates and actual allocation of resources

across all activities changes frequently based on scope, schedule and emerging priorities

– Costs associated with generator interconnection studies are mostly reimbursed by the study owner

ISO-NE PUBLIC

78

Estimated Resource Allocation to Operating Activities

ISO-NE PUBLIC

79

Estimated Resource Allocation to Capital Projects

Documents

Discussion of the ISO’s Draft 2017 Annual Work Plan · • Three major upcoming project implementation milestones will occur over the next 21 months: –February 6, 2017 ... –Results