New England’s Bulk Electric Power Grid

Mark Babula – System PlanningISO New England Inc.

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ISO New England Overview

• Private, not-for-profit corporation created in 1997 to oversee New England’s deregulated electric power system– Regulated by the Federal Energy Regulatory

Commission (FERC)– Independent of companies doing business

in the market– Independent Board of Directors, with no

financial stake in regional energy firms– The ISO operates in accordance with an

RTO Tariff, a Participants Agreement with NEPOOL and a Transmission Operating Agreement with the Transmission Owners

– Approximately 400 employees headquartered in Holyoke, Massachusetts

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November 9, 1965: Northeast Blackout shuts down power for 30 million customers

January 1966: Northeast Power Coordinating Council (NPCC) formed to improve regional system reliability

1971: New England Power Pool (NEPOOL) created to establish a central dispatch system and enhance system reliability

1996: FERC Order 888 deregulates the generation portion of the electric power system and implements open access for transmission lines

July 1, 1997: ISO New England created to manage the regional bulk power system, develop new wholesale markets and ensure access to transmission systems

May 1, 1999: ISO New England begins managingrestructured regional wholesale power markets

New England’s Electric Power System1965

1970

1980

1990

2000

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New England’s Electric Power System

• 14 million people; 6.5 million households and businesses

• 350+ generators/power plants• 8,000+ miles of transmission lines• 12 interconnections to

neighboring systems• 32,000 megawatts of total supply• All-time peak demand: ~26,922

MW on July 22, 2005• 8 Energy Pricing Zones• Approximately $7.25 billion annual

market

ISO and Local Control Centers

320 mi.

400 mi.650 km

ISO and Local Control Centers

520 km

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Texas

Western Eastern Quebec

35,000 MW

500,000 MW150,000 MW

55,000 MW

109 Control Areas

North American Electric System

Total

740,000 MW

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Centralized Dispatch by ISO-NE

• Dispatch New England’s supply-side resources as a single system to:– Maintain reliability throughout the

region– Minimize cost of electric

production – Comply with national and regional

operating procedures and policies– Relies on local control center

operated by Transmission Owners for transmission system switching

REMVEC

Maine

NH

CONVEX

VELCO(2005)

NSTAR(2005)

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Power System Operations Responsibilities

• Ensure both short and long-term reliability • Operate the system in a reliable and efficient manner

– Forecast both short and long-term needs– Commit generating, demand response and external purchases to

meet expected load and reserve requirements– Real time monitoring and control of bulk power system

• Economic dispatch of generating, demand response and external sales/purchases to meet load and reserve requirements

• Monitor and control transmission system to conform with established reliability standards (thermal, voltage, stability, etc.)

• Coordinate and approve generating and transmission facility outage requests to assure reliable system operation

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Annual Needs Assessment for New England’s Bulk Power System

• Regional System Plan (RSP) is a process begun in 1999– A published assessment of New England’s bulk transmission

system that identifies bottlenecks/constraints such as to attract a market-based response to alleviating them. ISO can order upgrades as final backstop

• Planning Advisory Committee (PAC) assists with development of RSP– Open to any entity including state regulatory agencies, attorneys

general, consumer counsels, public interest groups, etc.

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Ingredients of Reliable Power Systems

• A reliable bulk power system is based on four pillars:

– Fair and Efficient Market Structure:Sends price signals to promote appropriate investment in supply, transmission, and conservation; guided by fair and transparent rules; market monitoring ensures a level playing field

– Adequate Power Supply: Power supplies in the right locations to meet demand and growth

– Reliable Transmission System: Adequate and updated power delivery system

– Active Demand Participation: Incentives for reduced consumption through Conservation and Demand Response

Introduction to the Physical Electric System

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Basic Terms & Concepts

• Generation: Production of electric energy

• Transmission: Delivery of electricity through high voltage electric lines (transmission voltage > 69 kV)

• Distribution: Electricity is distributed to end-users via low voltage electric lines (distribution voltage < 69 kV)

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Operation of the Power System

• Bulk Power System– Designed, built, and operated to reliably meet power needs in

accordance with national reliability criteria

• North American Electric Reliability Council (NERC)– Establishment of reliability and performance standards– Coordination among ten (10) Regional Reliability Councils

• New England is part of the Northeast Power Coordinating Council– “One day in 10-year” bulk resource adequacy standard– Probability of disconnecting firm customers due to lack of

generating resources no more than one day in ten (10) years

• Operators must meet real-time demand and maintain adequate operating reserves to cover the unexpected loss of facilities

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RetailWholesale

How the Physical Electric Power System Works

1. Electricity is generatedat a power plant

4. Consumers = Residential,Commercial and Industrial

2. Electricity travels through Transmission lines > 69 kV

3. Distribution lines deliver electricity to consumers < 69 kV

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Power System Operational Control

• One of the most important power system control objectives is to keep continuous balance between demand, supply and frequency

• Frequency: Rate in cycles per second (Hertz) at which voltage and current oscillate in electrical power systems (60 Hz in North America)

• At any moment, the sum of all generation must meet all loads, losses, and scheduled net interchange

• Three processes that achieve this goal under normal operations: Automatic Generation Control (AGC), Load Following, and Optimal/Economic Dispatch

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Continuous Energy Balance

0DEMAND GENERATION

LoadLossesInterchange Power

Generated

Area Control ErrorMW

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Generation

• Conversion of mechanical energy into electrical energy is the most popular method of producing electricity– Prime mover is used to convert an energy source to mechanical

movement. Examples of a prime mover are water wheel, turbine, and gas engine.

• Natural & man-made energy sources drive prime movers– Falling Water & Wind– Heat (Thermal) from Fossil Fuels & Nuclear

• Capacity = The measure of the ability to produce electricity (watt / kilowatt / megawatt)

• Energy = Production of electricity over time (kilowatt-hours / megawatt-hours)

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Transmission

• Transfer or delivery of electrical energy from the generators to where it will be used

• High voltage lines are used because they can move more power over greater distances with less losses than low voltage lines > 69kv

• Common high voltage lines 345Kv, 230Kv, 115Kv, 69Kv

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Distribution

• Transfer of electricity from high voltage lines to lower voltage lines < 69 kV

• Power lines that you see along roads in your neighborhood and connect to your home

• Distribution level outages, primarily due to weather impacts, are the largest factor in loss of electric service to customers.

Introduction to Electric Markets

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State Jurisdiction – Facility Siting, Distribution, Retail Rates

Federal Jurisdiction

RetailWholesale

Changes Brought by Industry Restructuring

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FederalRegulation

(FERC)

Retail Market

State Regulation

(DPUC, DTE)

Oversight of Electricity Markets

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Generator

Aggregator

Generator

Generator

Marketer

Supplier

End-Users

Transmission Distribution

Generator Electric Demand

“Physical”

“Financial”

Demand Response

Wholesale-to-Retail Connection

New England’sWholesale Electric Markets

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New England’s Wholesale Markets• Energy Markets: Day-Ahead & Real-Time

• Ancillary Services Market

• Regulation Market

• Forward Reserves Market

• Capacity Market

• Financial Transmission Rights

• Demand Response

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Benefits of New England’s Wholesale Electric Markets• New England is ahead of the rest of the nation in terms

of its restructuring efforts– High levels of generation divestiture

• Generation investment risk shifted from consumers

• Proper correlation of price with supply and demand

• Continuous studies have shown markets workably competitive

• Facilitated significant bilateral contracting

• Over 200+ wholesale Market Participants

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Load Zones and Pricing Hub

ISO New England’sBusiness Continuity

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Preparation for the uncertainties in our businessPreparation for the uncertainties in our business’’s s future is not merely Emergency future is not merely Emergency

Management/Disaster Recovery anymoreManagement/Disaster Recovery anymore

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Pre September 11, 2001

• May 1998– Presidential Decision Directive #63: Protecting America’s

Critical Infrastructure

• June 2001– North American Electric Reliability Council (NERC) issues

report: “Approach to Action For Electric Sector-Working Group Forum on Critical Protection.”

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Post 9/11Federal Energy Regulatory Commission (FERC) enlists NERCto develop Industry Sector Security Guidelines May 2002 – NERC issues white paper “The Electricity Sector Response to Critical Infrastructure Protection Challenges”June 2002 – NERC issues “Security Guidelines for Utility Sector (Version 1)”August 2003 – NERC issues U/A Standard 1200 Cyber SecurityMay 2004 – NERC issues Compliance Template, “Emergency Operations/Loss of Primary Control Facility”June 2004 – NERC issues “Standard 1300 Cyber Security”(Draft) ((CIP-002 through CIP-009))April 2005 - NERC issues PSO/IT Guidelines

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ISO Business Continuity Plan Overview

BCP Organization tomeet ISO’s needs

Business Continuity

Plan

Administration Manual

Incident Management Team Plan

System Operations and

IT Recovery Plans

Working Groups Department Plan Owners

Business Department

Recover Plans

Business Continuity Steering Committee

ISO New EnglandGovernance

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BCP Components• ISO-NE has Detailed Departmental Business Continuity

Plans for every department in the company

• ISO-NE has a Record Retention program that utilizes Offsite Data Storage

• ISO-NE has a Backup Control Center (BCC) to ensure control over six-state regional power grid– BCC located in a separate, secure, off-site facility– BCC has all the functionality of the Master Control Center– In addition, there are Local Control Centers scattered throughout

New England

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Contact: Market Support Services at (413) 540-4220, fax: (413) 535-4156, or e-mail: custserv@iso-ne.com

Questions