ML14304A701

Reliability Needs Assessment

ML14304A701
Person / Time
Site:	Indian Point
Issue date:	09/16/2014
From:	New York Independent System Operator
To:	Office of Nuclear Reactor Regulation
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ML14304A441	List: ML14304A693 ML14304A694 ML14304A696 ML14304A699 ML14304A700 ML14304A701 ML14304A703 ML14304A704 ML14304A748 ML14304A751 ML14304A752
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F-2012-1028
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2014 Reliability Needs Assessment II New York Independent System Operator FINAL REPORT September 16, 2014

Caution and Disclaimer The contents of these materials are for information purposes and are provided "as is" without representation or warranty of any kind, including without limitation, accuracy, completeness or fitness for any particular purposes. The New York Independent System Operator assumes no responsibility to the reader or any other party for the consequences of any errors or omissions. The NYISO may revise these materials at any time in its sole discretion without notice to the reader.

NYISO 2014 Reliability Needs Assessment

Table of Contents Exe cutive Su m m a ry ................................................................................................................................. i

1. Intro d u ctio n .................................................................................................................................. 1

2. Summary of Prior CRPs ........................................................................................................... 3

3. RNA Base Case Assumptions, Drivers and Methodology ........................................................ 5 3.1. Annual Energy and Summer Peak Demand Forecasts ................................................. 6 3.2. Forecast of Special Case Resources ........................................................................... 11 3.3. Resource Additions and Removal ................................................................................ 11 3.4. Local Transmission Plans ........................................................................................... 14 3.5. Bulk Transmission Projects ......................................................................................... 14 3.6. Base Case Peak Load and Resource Ratios .................................................................. 16 3.7. Methodology for the Determination of Needs .......................................................... 17

4. Reliability Needs Assessment ................................................................................................ 20 4 .1 . O ve rv ie w ......................................................................................................................... 20 4.2. Reliability Needs for Base Case .................................................................................. 20 4.2.1. Transmission Security Assessment ........................................................................ 20 4.2.2. Short Circuit Assessment ......................................................................................... 27 4.2.3. Transmission and Resource Adequacy Assessment .............................................. 28 4.2.4. System Stability Assessment .................................................................................. 30 4.3. Reliability Needs Summary ......................................................................................... 31 4.4. Dunkirk Plant Fuel Conversion Sensitivity .................................................................. 36 4 .5 . Sce n a rio s ......................................................................................................................... 38 4.5.1. High Load (Econometric) Forecast ......................................................................... 38 4.5.2. Zonal Capacity at Risk ............................................................................................. 38 4.5.3. Indian Point Retirement Assessment ....................................................................... 39 4.5.4. Transmission Security Assessment Using 90/10 Load Forecast ............................. 40 4.5.5. Stressed W inter Condition Assessment .................................................................. 44

5. Impacts of Environmental Regulations .................................................................................. 46 5.1. Regulations Reviewed for Impacts on NYCA Generators .......................................... 46 5.1.1. Reasonably Available Control Technology for NOx (NOx RACT) ............................ 47 5.1.2. Best Available Retrofit Technology (BART) ............................................................. 48 5.1.3. Mercury and Air Toxics Standards (MATS) ............................................................ 49 5.1.4. Mercury Reduction Program for Coal-Fired Electric Utility Steam Generating Un its (M RP) ................................................................................................................................. 50 5.1.5. Cross State Air Pollution Rule (CSAPR) ................................................................... 50 5.1.6. Regional Greenhouse Gas Initiative (RGGI) ............................................................ 51 5.1.7. RICE, NSPS, and NESHAP ......................................................................................... 52 5.1.8. Best Technology Available (BTA) ............................................................................. 52 NYISO 2014 Reliability Needs Assessment

5.2. Summary of Environmental Regulation Impacts ......................................................... 54

6. Fu e l A d e q u a cy ............................................................................................................................. 56 6.1. Gas Infrastructure Adequacy Assessment .................................................................. 56 6.2. Loss of Gas Supply Assessment .................................................................................. 57 6.3. Summary of Other Ongoing NYISO efforts .................................................................. 58

7. Observations and Recommendations ..................................................................................... 61

8. Histo ric Co ng e stio n ..................................................................................................................... 63 A p p e n d ice s A- D .................................................................................................................................. 64 Appendix A - 2014 Reliability Needs Assessment Glossary ................................................... A-1 Appendix B - The Reliability Planning Process ......................................................................... B-1 Appendix C - Load and Energy Forecast 2014-2024 ............................................................... C-1 Appendix D - Transmission System Security and Resource Adequacy Assessment ................. D-1 NYISO 20i4 Reliability Needs Assessment

Table of Tables Table 1: Reliability Needs identified in 2014 RNA ...................................................................... ii Table 2-1: Current Status of Tracked Market-Based Solutions & TOs' Plans ............................. 3 Table 2-2: Proposed Generation Projects from Completed Class Years .................................... 4 Table 2-3: Other Proposed Generation Projects ........................................................................ 4 Table 3-1: Comparison of 2012 & 2014 RNA Base Case Forecasts ............................................ 7 Table 3-2: Comparison of 2014 RNA Base Case Forecast and High Load (Econometric) Scenario 8 Table 3-3: Generation Addition and Removal ........................................................................... 12 Table 3-4: NYCA Peak Load and Resource Ratios 2015 through 2024 ..................................... 16 Table 3-5: Load/Resources Comparison of Year 2019 (MW) ................................................... 17 Table 4-1: 2014 RNA Transmission Security Thermal Violations .............................................. 25 Table 4-2: 2014 RNA Transmission Security Reliability Need Year .......................................... 26 Table 4-3:2014 RNA Over-Duty Circuit Breaker Summary ..................................................... 27 Table 4-4: Transmission System Thermal Emergency Transfer Limits ..................................... 28 Table 4-5: Transmission System Voltage Emergency Transfer Limits ...................................... 28 Table 4-6: Transmission System Base Case Emergency Transfer Limits ................................... 28 Table 4-7: NYCA Resource Adequacy Measure (in LOLE) ........................................................ 30 Table 4-8: Summary of the LOLE Results - Base, Thermal and "Free Flowing" Sensitivities ....... 31 Table 4-9: Compensatory MW Additions for Transmission Security Violations ...................... 33 Table 4-10: Compensatory MW Additions for Resource Adequacy Violations ........................ 34 Table 4-11: 2014 RNA 50/50 Forecast Transmission Security Thermal Violations with Dunkirk In-S e rv ice ................................................................................................................................... 37 Table 4-12: Zonal Capacity at Risk (M W ) .................................................................................. 39 Table 4-13: Indian Point Plant Retirement LOLE Results .......................................................... 40 Table 4-14: 90/10 Peak Load Forecast NYCA Remaining Resources ....................................... 41 Table 4-15: 90/10 Transmission Security Violations Not Observed Under 50/50 Load Conditions

............................................................................................................................................... 42 Table 4-16: 50/50 Transmission Security Violations Exacerbated Under 90/10 Load Conditions43 Table 4-17: Derivation of 2014 NYCA W inter LFU ................................................................... 45 Table 4-18: Simultaneous NYCA Import Limits and MW Lost in Stressed Winter Scenario ......... 45 Table 5-1: NOx RACT Limits Pounds/mmBTU Effective until June 30, 2014 ........................... 47 NYISO 2014 Reliability Needs Assessment

Table 5-2: New NOx RACT Limits Pounds/mmBTU Effective Starting from July 1, 2014 ...... 47 Table 5-3: Em ission (BA RT) Lim its ............................................................................................ 49 Table 5-4: NYSDEC BTA Determinations (as of March 2014) ................................................... 53 Table 5-5: Im pact of New Environmental Programs ............................................................... 54 Table 5-6: Summary of Significant Operational Impacts due to Environmental Regulations ...... 54 Table 6-1: Loss of Gas Assessment for 2014-2015 Winter ...................................................... 58 Table C-i: Summary of Economic & Electric System Growth Rates - Actual & Forecast ..... C-1 Table C-2: Historic Energy and Seasonal Peak Demand - Actual and Weather-Normalized ....... C-2 Table C-3: Annual Energy and Summer Peak Demand - Actual & Forecast ................................ C-3 Table C-4: Annual Energy by Zone - Actual & Forecast (GWh) ................................................... C-7 Table C-5: Summer Coincident Peak Demand by Zone - Actual & Forecast (MW) .................... C-8 Table C-6: Winter Coincident Peak Demand by Zone - Actual & Forecast (MW) ....................... C-9 NYISO 2014 Reliability Needs Assessment

Table of Figures Figure 1: Approximate Locations of Relative Reliability Needs ................................................. ii Figure 3-1: 2014 Base Case Energy Forecast and Scenarios ...................................................... 9 Figure 3-2: 2014 Base Case Summer Peak Demand Forecast and Scenarios ............................. 9 Figure 3-3: 2014 Base Case Energy Efficiency & Retail Solar PV - Annual Energy ................... 10 Figure 3-4: 2014 Base Case Energy Efficiency & Retail Solar PV - Summer Peak .................... 10 Figure 4-1: Approximate Locations of Transmission Security Needs ....................................... 21 Figure 6-1: Natural Gas Pipeline Network in NYCA ................................................................. 59 Figure C-1: Zonal Energy Forecast Growth Rates - 2014 to 2024 ................................................ C-6 Figure C-2: Zonal Summer Peak Demand Forecast Growth Rates - 2014 to 2024 ...................... C-6 Figure D-1: M ARS Topology for Year 2015 ................................................................................ D-13 Figure D-2: PJM -SENY MARS Topology for Year 2015 ............................................................... D-14 Figure D-3: M ARS Topology for Year 2016 ................................................................................ D-15 Figure D-4: PJM -SENY MARS Topology for Year 2016 ............................................................... D-16 NYISO 2014 Reliability Needs Assessment

Executive Summary The 2014 Reliability Needs Assessment (RNA) assesses resource adequacy and both transmission security and adequacy of the New York Control Area (NYCA) bulk power transmission system from year 2015 through 2024, the study period of this RNA. The 2014 RNA identifies transmission security needs in portions of the bulk power transmission system, and a NYCA LOLE violation due to inadequate resource capacity located in Southeast New York (SENY).

The NYISO finds transmission security violations beginning in 2015, some of which are similar to those found in the 2012 RNA. The NYISO also identifies resource adequacy violations, which begin in 2019 and increase through 2024.

For transmission security, there are four primary regions with reliability needs:

Rochester, Western & Central New York, Capital Region, and Lower Hudson Valley & New York City. These reliability needs are generally driven by recent and proposed generator retirements or mothballing combined with load growth. The New York transmission owners have developed plans through their respective local transmission planning processes to construct transmission projects to meet not only the needs identified in the previous RNA, but also any additional needs occurring since then and prior to this RNA. These transmission projects, subject to inclusion rules, have been modeled in the 2014 RNA base case. Reliability needs identified in this report exist despite the inclusion of the transmission projects in the base case, or exist until certain projects are completed. The transmission security needs in the Buffalo and Binghamton areas are influenced by whether the fuel conversion project can be completed for the Dunkirk Plant for it to return to service by 2016. As a result, this project was addressed as a sensitivity and the impact of the results are noted with the base case reliability needs.

While resource adequacy violations continue to be identified in SENY, the 2014 RNA is projecting the need year to be 2019, one year before the need year identified in the 2012 RNA.

The most significant difference between the 2012 RNA and the 2014 RNA is the decrease of the NYCA capacity margin (the total capacity less the peak load forecast).

For summer 2014 resource adequacy, the existing capacity provides about a 122.7%

Installed Capacity Reserve to meet the summer 2014 Installed Reserve Margin requirement of 117.0%. The capacity margin decreases throughout the study period, but more rapidly in the outer years due to load growth. The NYISO calculated the difference in the capacity margin between the 2012 RNA and the 2014 RNA in the need year of 2019 and determined a net decrease of 2,100 MW. The difference breaks down as follows:

1. The NYCA capacity resources are 874 MW less for 2019 (724 MW upstate and 150 MW in SENY);

2. The NYCA baseline load forecast is 250 MW higher for 2019 (497 MW higher upstate and 247 MW lower in SENY); and

3. The NYCA Special Case Resources (SCRs) projection is 976 MW less for 2019 (685 MW upstate and 291 MW in SENY).

The reliability needs identified in the 2014 RNA are summarized in Table 1 below, and the approximate locations of the regions are marked on Figure 1.

NYISO 2014 Reliability Needs Assessment

Table 1: Reliability Needs identified in 2014 RNA Year of Transmission Security Violations Resource Adequacy Need (Area/Load Zone/Transmission Owner) (LOLE)

Rochester Area in Genesee (Zone B), owned by RG&E Binghamton Area in Central (Zone C), owned by NYSEG*

2015 Syracuse Area in Central (Zone C), owned by N. Grid Utica Area in Mohawk Valley (Zone E), owned by N. Grid Albany Area in Capital (Zone F), owned by N. Grid 2016 No additional violations No violation Rochester Area issues mitigated 2017 Additional Syracuse Area in Central (Zone C), owned by N. Grid Additional Utica Area in Mohawk Valley (Zone E), owned by N. Grid*

Binghamton Area voltage in Central (Zone C), owned by NYSEG 2018 Buffalo Area in Dysinger (Zone A), owned by N. Grid*

2019 No additional violations Violation (LOLE = 0.11) 2020 Additional Binghamton Area in Central (Zone C), owned by NYSEG* Violation (LOLE = 0.13) 2021 Additional Buffalo Area in West (Zone A), owned by N. Grid* Violation (LOLE = 0.15) 2022 Additional Buffalo Area in West (Zone A), owned by N. Grid* Violation (LOLE = 0.18)

Transmission between Capital (Zone F) and Hudson Valley (Zone G), owned by N. Grid 2023 No additional violations Violation (LOLE = 0.22) 2024 No additional violations Violation (LOLE = 0.26)

• Some violations would be resolved upon the return of the Dunkirk plant to service.

Figure 1: Approximate Locations of Reliability Needs Note: The red circles indicate the areas where the load may be impacted by transmission security constraints, and the blue circle indicates the region with resource adequacy violations.

NYISO 2014 Reliability Needs Assessment ii

The NYISO expects existing and recent market rule changes to entice market participants to take actions that will help meet the resource adequacy needs in SENY, as identified by the 2012 RNA and the 2014 RNA. The resources needed downstream of the upstate New York to SENY interface is approximately 1,200 MW in 2024 (100 MW in 2019),

which could be transmission or capacity resources. The new Zones G-J Locality will provide market signals for resources to provide service in this area. Capacity owners and developers are taking steps to return mothballed units to service, restore units to their full capability, or build new in the Zones G-J Locality. If some or all of these units return to service or are developed, the reliability need year would be postponed beyond 2019. In addition, other measures, such as the demand response, energy efficiency and CHP projects, would also postpone the reliability need year beyond 2019. New York State Public Service Commission is also promoting regulated transmission development to relieve the transmission constraints between upstate New York and SENY, which could also defer the need for additional resources.

Potential solutions will be submitted for evaluation during the solutions phase of the Reliability Planning Process (RPP) and included in the upcoming 2014 Comprehensive Reliability Plan (CRP) if appropriate.

As a backstop to market-based solutions, the NYISO employs a process to define responsibility should the market fail to provide an adequate solution to an identified reliability need. Since there are transmission security violations in Zones A, B, C, E, and F within the study period, the transmission owners (TOs) in those zones (i.e., National Grid, RGE, and NYSEG) are responsible and will be tasked to develop detailed regulated backstop solutions for evaluation in the 2014 CRP.

Given the limited time between the identification of certain transmission security needs in this RNA report and their occurrence in 2015, the use of demand response and operating procedures, including those for emergency conditions, may be necessary to maintain reliability during peak load periods until permanent solutions can be put in place. Accordingly, the NYISO expects the TOs to present updates to their Local Transmission Owner Plans for these zones, including their proposed operating procedures pending completion of their permanent solutions, for review and acceptance by the NYISO and in the 2014 CRP.

The NYISO identified reliability needs for resource adequacy in SENY starting in the year 2019; therefore, the TOs in SENY (i.e., Orange & Rockland, Central Hudson, New York State Electric and Gas, Con Edison, and LIPA) are responsible to develop the regulated backstop solution(s). The study also identified a transmission security violation in 2022 on the Leeds-Pleasant Valley 345 kV circuit, and this circuit is the main constraint of the Upstate New York to Southeast New York (UPNY-SENY) interface identified in the resource adequacy analysis.

Therefore, the violation could be resolved by solution(s) that respond to the resource adequacy deficiencies identified for 2019 - 2024.

If the resource adequacy solution is non-transmission, these reliability needs can only be most efficiently satisfied through the addition of compensatory megawatts in SENY because such resources need to be located below the UPNY-SENY interface constraint to be effective.

Additions in Zones A through F could partially resolve these reliability needs. Potential solutions could include a combination of additional transfer capability by adding transmission NYISO 2014 Reliability Needs Assessment iii

facilities into SENY from outside those zones and/or resource additions at least some of which would be best located in SENY.

In addition, the 2014 RNA provides analysis of risks to the Bulk Power Transmission Facilities under certain sensitivities and scenarios to assist developers and stakeholders to propose market-based and regulated reliability solutions as well as policy makers to formulate state policy. The 2014 RNA analysis included a sensitivity of the Dunkirk Fuel conversion project, and scenarios to address recent experiences in the NYISO operations, which revealed potential future reliability risks caused particularly by generation retirements, fuel availability, or other factors that could limit energy production during the extreme winter weather. The findings under the sensitivity and scenario conditions are:

" Dunkirk Fuel Conversion Project:The availability of Dunkirk after the fuel conversion project in 2016 resolves thermal transmission security violations in the Buffalo and Binghamton areas, but does not resolve the resource adequacy needs identified in 2019 and thereafter.

• High (econometric)Load Forecast:Resource adequacy violations occur as soon as 2017.

• Indian Point Energy Center Plant Retirement: Reliability violations would occur in 2016 if the Indian Point Plant were to be retired at the latter of the two units' current license expiration dates in December 2015.

• Zonal Capacityat Risk: For year 2015, removal of up to 2,500 MW in Zones A through F, 650 MW in Zones G through I, 650 MW in Zone J, or 550 MW in Zone Kwould result in a NYCA resource adequacy violation.

" Transmission Security under 90/10 ForecastedLoad: The 90/10 forecast for the statewide coincident summer peak is on average approximately 2,400 MW higher than the baseline 50/50 forecast. This higher load would result in the earlier occurrence of the reliability needs identified in the base case as well as the occurrence of new violations in the same four primary regions. In addition, based on the assumptions applied in this analysis, beginning in 2017 there would be insufficient resources to meet the minimum 10-minute operating reserve requirement of 1,310 MW. Starting in 2020, there would be insufficient resources to meet the modeled 90/10 peak load under pre-contingency conditions.

" Stressed Winter Scenario: The winter of 2013-2014 experienced five major cold snaps, including three polar vortex events that extended across much of the country. The NYISO set a new winter peak load of 25,738 MW, while neighboring ISOs and utilities concurrently set record winter peaks during the month of January. Compounding the impact from high load conditions, extensive generation derates and gas pipeline constraints occurred simultaneously due to the extreme winter weather. In the extreme case that NYCA is assumed to be unable to receive any emergency assistance from neighboring areas, it would take a loss of capacity in excess of 7,250 MW due to energy production constraints in extreme winter conditions to cause a resource adequacy violation in 2015.

In addition to the scenarios, the NYISO also analyzed the risks associated with the cumulative impact of environmental laws and regulations, which may affect the flexibility in plant operation and may make fossil plants energy-limited resources. The RNA discusses the environmental regulations that affect long term power system planning and highlights the impacts of various environmental drivers on resource availability.

NYISO 2014 Reliability Needs Assessment iv

The RNA is the first step of the NYISO reliability planning process. As a product of this step, the NYISO documents the reliability needs in the RNA report, which is presented to the NYISO Board of Directors for approval. The NYISO Board approval initiates the second step, which involves the NYISO requesting proposed solutions to mitigate the identified needs to maintain acceptable levels of system reliability throughout the study period.

As part of its ongoing reliability planning process, the NYISO monitors and tracks the progress of market-based projects, regulated backstop solutions, together with other resource additions and retirements, consistent with its obligation to protect confidential information under its Code of Conduct. The other tracked resources include: (i) units interconnecting to the bulk power transmission system; (ii) the development and installation of local transmission facilities; (iii) additions, mothballs or retirement of generators; (iv) the status of mothballed/retired facilities; (v) the continued implementation of New York State energy efficiency and similar programs; (vi) participation in the NYISO demand response programs; and (vii) the impact of new and proposed environmental regulations on the existing generation fleet.

NYISO 2014 Reliability Needs Assessment V

DRAFT - For Discussion Purposes

1. Introduction The Reliability Needs Assessment (RNA) is developed by the NYISO in conjunction with Market Participants and all interested parties as its first step in the Comprehensive System Planning Process (CSPP). The RNA is the foundation study used in the development of the NYISO Comprehensive Reliability Plan (CRP). The RNA is performed to evaluate electric system reliability, for both transmission security and resource adequacy, over a 10-year study period.

If the RNA identifies any violation of Reliability Criteria for Bulk Power Transmission Facilities (BPTF), the NYISO will report a Reliability Need quantified by an amount of compensatory megawatts (MW). After approval of the RNA, the NYISO will request market-based and alternative regulated proposals from interested parties to address the identified Reliability Needs, and designate one or more Responsible Transmission Owners to develop a regulated backstop solution to address each identified Reliability Need. This report sets forth the NYISO's findings for the study period 2015-2024.

The CRP will provide a plan for continued reliability of the bulk power system during the study period depending on a combination of additional resources. The resources may be provided by market-based solutions being developed in response to market forces and the request for solutions following the approval of this RNA. If the market does not adequately respond, continued reliability will be ensured by either regulated solutions being developed by the TOs which are obligated to provide reliable service to their customers or alternative regulated solutions being developed by others. To maintain the system's long-term reliability, these additional resources must be readily available or in development at the appropriate time of need. Just as important as the electric system plan is the process of planning itself. Electric system planning is an ongoing process of evaluating, monitoring and updating as conditions warrant. Along with addressing reliability, the CSPP is also designed to provide information that is both informative and of value to the New York wholesale electricity marketplace.

Proposed solutions that are submitted in response to an identified Reliability Need are evaluated in the development of the CRP and must satisfy Reliability Criteria. However, the solutions submitted to the NYISO for evaluation in the CRP do not have to be in the same amounts of MW or locations as the compensatory MW reported in the RNA. There are various combinations of resources and transmission upgrades that could meet the needs identified in the RNA. The reconfiguration of transmission facilities and/or modifications to operating protocols identified in the solution phase could result in changes and/or modifications of the needs identified in the RNA.

This report begins with a summary of the 2012 CRP and prior reliability plans. The report continues with a summary of the load and resource forecast for the next 10 years, RNA base case assumptions and methodology, and reports the RNA findings for years 2015 through 2024. Detailed analyses, data and results, and the underlying modeling assumptions are contained in the appendices.

NYISO 2014 Reliability Needs Assessment 1

The RPP tests the robustness of the needs assessment studies and determines, through the development of appropriate scenarios, factors and issues that might adversely impact the reliability of the BPTF. The scenarios that were considered include: (i) high load (econometric forecast prior to inclusion of statewide energy efficiency programs and retail solar photovoltaic (PV), that increases the load by approximately 2,000 MW by 2024); (ii) Indian Point Plant retirement; (iii) 90/10 load forecast; (iv) zonal capacity at risk; and (v) stressed winter conditions. In addition to assessing the base case conditions and scenarios, the impact of the Dunkirk plant fuel conversion is analyzed as a sensitivity.

The NYISO will prepare and issue its 2014 CRP based upon this 2014 RNA report. The NYISO will monitor the assumptions underlying the RNA base case as well as the progress of the market-based solutions submitted in earlier CRPs and projects that have met the NYISO's base case inclusion rules for this RNA. These base case assumptions include, but are not limited to, the measured progress towards achieving the State energy efficiency program standards, the impact(s) of ongoing developments in State and Federal environmental regulatory programs on existing power plants, the status of plant re-licensing efforts, and the development of transmission owner projects identified in the Local Transmission Plans (LTPs).

For informational purposes, this RNA report also provides the marketplace with the latest historical information available for the past five years of congestion via a link to the NYISO's website. The 2014 CRP will be the foundation for the 2015 Congestion Assessment and Resource Integration Study (CARIS). A more detailed evaluation of system congestion is presented in the CARIS.

NYISO 2014 Reliability Needs Assessment 2

2. Summary of Prior CRPs This is the seventh RNA since the NYISO planning process was approved by FERC in December 2004. The first three RNA reports identified Reliability Needs and the first three CRPs (2005-2007) evaluated the market-based and regulated backstop solutions submitted in response to those identified needs. The 2009 CRP and the 2010 CRP indicated that the system did not exhibit any violations of applicable reliability criteria and no solutions were necessary to be solicited. Therefore, market-based and regulated solutions were not requested. The 2012 RNA identified Reliability Needs and the 2012 CRP evaluated market-based and regulated solutions in response to those needs. The NYISO has not previously triggered any regulated backstop solutions to meet previously identified Reliability Needs due to changes in system conditions and sufficiency of projects coming into service.

Table 2-1 presents the market solutions and TOs' plans that were submitted in response to previous requests for solutions. These solutions were included in the 2012 CRP and the information concerning these solutions has been updated herein to reflect their current status.

The table also indicates that 1,545 MW of solutions are either in-service or are still being reported to the NYISO as moving forward with the development of their projects.

In addition to those projects in Table 2-1, there are a number of other projects in the NYISO interconnection study queue which are also moving forward through the interconnection process, but have not been offered as market solutions in this process. Some of these additional generation resources have either accepted their cost allocation as part of a Class Year Facilities Study process or are included in the currently ongoing 2012 Class Year Facilities Study. These projects are listed in Table 2-2 and 2-3 in the order of each project's proposed in-service dates. The projects that meet the 2014 RNA base case inclusion rules are included in Table 3-3. The listings of other Class Year Projects can be found along with other projects that have not met inclusion rules.

Table 2-1: Current Status of Tracked Market-Based Solutions & TOs' Plans Included in Name Plate CRIS Summer Original In-Queue # Project Submitted Zone (MW) (MW) Proposal Type Current Status 2014 RNA Base Case?

69 Empire Generation Project CRP 2008 F Q1 2010 670 592.4 577.1 Resource Proposal In-Service Yes Back-to-Back HVDC, AC CRP 2007, CRP 2008, and was an 206 alternative regulated proposal PJM - J Q2 2011 660 660 660 Trrnsmission Line HTP in CRP 2005 Proposal 153 ConEd M29 Project CRP 2005 J May 2010 N/A N/A N/A TO's Plans In-Service Yes

- Sta 80xfmr replacement CRP 2012 B 2014 N/A N/A N/A TO's Plans In-Service Yes Ramapo Protection a ddi tion CRP2012 G 2013 N/A N/A N/A TO's Plans In-Service Yes Addition

- 5 Mile Road Substation CRP2012 A - N/A N/A N/A TO's Plans Summer 2015 Yes 201, Gas Turbine NRG Astoria CRP 2005, CRP 2007, CRP 2008 J June 2010 278.9 155 250 Resource Proposal June 2017 No re-powering CRP 2012 339 Station 255 CRP 2012 B - N/A N/A N/A TO's Plans 04 2016 Yes

- Clay -Teall #10 11SkV CRP2012 C 2016 N/A N/A N/A TO's Plans Q4 2017 Yes NYISO 2014 Reliability Needs Assessment 3

Table 2-2: Proposed Generation Projects from Completed Class Years Proposed In Name Plate CRIS Summer Included in Station Unit Zone UnitType ClassYear Queue N Owner/Operator Service Date (MW) (MW) (MW) 2014 RNA?

237 Allegany Wind, LLC Allegany Wind A 2015/11 72.5 0.0 72.5 Wind Turbines 2010 No 197 PPM Roaring Brook, LLC/ PPM Roaring Brook Wind E 2015/12 78.0 0.0 78.0 Wind Turbines 2008 No 349 Taylor Bionass Energy Mont., LLC Taylor Biomass G 2015/12 21.0 19.0 19.0 Solid Waste 2011 Yes 251 CPV Valley, LLC CPV Valley Energy Center G 2016/05 820.0 680.0 677.6 Combined Cycle 2011 No 201 NRG Energy Berrians GT J 2017/06 200.0 155.0 200.0 Combined Cycle 2011 No 224 NRG Energy, Inc. Berrians GT II J 2017/06 78.9 0.0 50.0 Combined Cycle 2011 No Table 2-3: Other Proposed Generation Projects Station Unit Zone Proposed I Name Plate CRIS Summer Type Included in Queue # Owner/Operator Service Date (MW) (MW) (MW) 2014RNA?

372 Dry Lots Wind, LLC Dry Lots Wind E 2014/11 33.0 TBD 33.0 Wind Turbines No 354 Atlantic Wind, LLC North Ridge Wind E 2014/12 100.0 TED 100.0 Wind Turbines No 276 Air Energie TCI, Inc. Crown City Wind C 2014/12 90.0 TBD 90.0 Wind Turbines No 371 South Moutain Wind, LLC South Mountain Wind E 2014/12 18.0 TRD 18.0 Wind Turbines No 361 US PowerGen Co. Luyster Creek Energy 2 2015/06 508.6 TOD 401.0 Combined Cycle No 360 NextEra Energy Resources, LLC Watkins Glen Wind C 2015/07 122.4 TRD 122.4 Wind Turbines No 382 Astoria Generating Co. South Pier Improvement J 2015/07 190.0 TBD 88.0 Combustion Turbines No 347 Franklin Wind Farm, LLC Franklin Wind E 2015/12 50.4 TBD 50.4 Wind Turbines No 270 Wind Development Contract Co, LIC Hounsfield Wind E 2015/12 244.8 TRD 244.8 Wind Turbines No 266 NRG Energy, Inc. Berrians GT III J 2016/06 278.9 TBD 250.0 Combined Cycle No 383 NRG Energy, INC. Bowline Gen. Station Unit #3 G 2016/06 814.0 TBD 775.0 Combined Cycle No 310 Cricket Valley Energy Center, LLC Cricket Valley Energy Center G 2018/01 1308.0 TBD 1019.9 Combined Cycle No 322 Rolling Upland Wind Farm, LLC Rolling Upland Wind E 2018/10 59.9 1TD 59.9 Wind Turbines No NYISO 2014 Reliability Needs Assessment 4

3. RNA Base Case Assumptions, Drivers and Methodology The NYISO has established procedures and a schedule for the collection and submission of data and for the preparation of the models used in the RNA. The NYISO's CSPP procedures are designed to allow its planning activities to be performed in an open and transparent manner under a defined set of rules and to be aligned and coordinated with the related activities of the NERC, NPCC, and New York State Reliability Council (NYSRC). The assumptions underlying the RNA were reviewed at the Transmission Planning Advisory Subcommittee (TPAS) and the Electric System Planning Working Group (ESPWG). The Study Period analyzed in the 2014 RNA is the ten years from 2015 through 2024 for the base case, sensitivity and scenarios.

All studies and analyses of the RNA base case reference the same energy and peak demand forecast, which is the baseline forecast reported in the 2014 Gold Book. The baseline forecast is an econometric forecast with an adjustment to reflect projected gains (i.e., load reduction) associated with statewide energy efficiency programs and retail solar PV installations.

The study base cases were developed in accordance with NYISO procedures using projections for the installation and retirement of generation resources and transmission facilities that were developed in conjunction with market participants and Transmission Owners. These are included in the base case using the NYISO 2014 FERC 715 filing as a starting point, and consistent with the base case inclusion screening process provided in the Reliability Planning Process (RPP) Manual. Resources that choose to participate in markets outside of New York are modeled as contracts, thus preventing their capacity from being used to meet resource adequacy requirements in New York. Representations of neighboring systems are derived from interregional coordination conducted under the NPCC, and pursuant to the Northeast ISO/RTO Planning Coordination Protocol.

Table 3-3 shows the new projects which meet the screening requirements for inclusion in the RNA base case.

NYISO 2014 Reliability Needs Assessment 5

3.1. Annual Energy and Summer Peak Demand Forecasts There are two primary forecasts modeled in the 2014 RNA, as contained in the 2014 Gold Book. The first forecast, which is used in a scenario, is an econometric forecast of annual energy and peak demand. The second forecast, which is used for the 2014 RNA base case, includes projected reductions for the impacts of energy efficiency programs and retail solar PV power'.

The NYISO's energy efficiency estimates include the impact of programs authorized by the Energy Efficiency Portfolio Standards (EEPS), New York Power Authority (NYPA), and Long Island Power Authority (LIPA). The NYISO has been a party to the EEPS proceeding from its inception and is now an ex-officio member of the E2 advisory group, the successor to the Evaluation Advisory Group, which is responsible for advising the New York State Public Service Commission (NYDPS) on energy efficiency related issues and topics. The NYISO reviewed and discussed with market participants in the ESPWG and TPAS, projections for the potential impact of both energy efficiency and the EEPS over the 10-year Study Period. The factors considered in developing the 2014 RNA base case forecast are included in Appendix C.

The assumptions for the 2014 economic growth, energy efficiency program impacts and retail solar PV impacts were discussed with market participants during meetings of the ESPWG and TPAS during the first quarter of 2014. The ESPWG and TPAS reviewed and discussed the assumptions used in the 2014 RNA base case forecast in accordance with procedures established for the RNA.

The annual average energy growth rate in the 2014 Gold Book decreased to 0.16%, as compared to 0.59% in the 2012 Gold Book. The 2014 Gold Book's annual average summer peak demand growth decreased to 0.83%, as compared to 0.85% in the 2012 Gold Book. The lower energy growth rate is attributed to the influence of both the economy and the continued impact of energy efficiency and retail solar PV. While these factors had a smaller impact on summer peak growth than on annual energy growth, the expectation for peak growth is still lower in 2014 than it was in 2012. Due to the low growth rates in both energy and summer peak demand, the value in performing a low-growth scenario for the RNA was diminished, and thus, this scenario was not modeled in the 2014 RNA.

Table 3-1 below summarizes the 2014 RNA econometric forecast and the 2012 RNA base case forecast. Table 3-1 shows a comparison of the base case forecasts and energy efficiency program impacts contained in the 2012 RNA and the 2014 RNA. Figure 3-1 and Figure 3-2 present actual, weather-normalized and forecasts of annual energy and summer peak demand for the 2014 RNA. Figure 3-3 and Figure 3-4 present the NYISO's projections of annual energy and summer peak demand in the 2014 RNA for energy efficiency and retail solar PV.

1 The term retail solar PV is used to refer to customer-sited solar PV, to distinguish it from large-scale solar PV that is considered as part of the fleet of electric generation in the state.

NYISO 2014 Reliability Needs Assessment 6

Table 3-1: Comparison of 2012 & 2014 RNA Base Case Forecasts Comparison of Base Case Energy Forecasts -2012 & 2014 RNA (GWh) lAnnual GWh 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 20241 2012 RNA Base Case 163,659 164,627 165,340 166,030 166,915 166,997 168,021 169,409 171,176 172,514 173,569 2014 RNA Base Case 163,161 163,214 163,907 163,604 163,753 164,305 165,101 164,830 164,975 165,109 165,721 IChange from 2012 RNA -2,179 -2,816 -3,008 -3,393 -4,268 -5,104 -6,075 -7,684 -8,594 NA NA I Comparison of Base Case Peak Forecasts - 2012 & 2014 RNA (MW) lAnnual MW 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 20241 2012 RNA Base Case 33,295 33,696 33,914 34,151 34,345 34,550 34,868 35,204 35,526 35,913 36,230 2014 RNA Base Case 33,666 34,066 34,412 34,766 35,111 35,454 35,656 35,890 36,127 36,369 36,580 IChange from 2012 RNA -248 -85 67 216 243 250 130 -23 -103 NA NA Comparison of Energy Impacts from Statewide Energy Efficiency Programs & Retail Solar PV - 2012 RNA & 2014 RNA (GWh) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2012 RNA Base Case 1,919 3,462 5,140 6,645 7,903 9,149 10,066 10,670 11,230 11,755 12,244 2014 RNA Base Case 1,919 3,462 4,823 6,558 8,099 9,395 10,449 11,455 12,439 13,341 14,228 15,108 15,975 lChange from 2012 RNA -317 -87 196 246 383 785 1,209 1,586 1,984 NA NA Comparison of Peak Impacts from Statewide Energy Efficiency & Retail Solar PV - 2012 RNA & 2014 RNA (MW) 1 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2012 RNA Base Case 343 624 932 1,210 1,446 1,674 1,861 1,983 2,101 2,217 2,324 2014 RNA Base Case 343 624 848 1,115 1,372 1,549 1,715 1,867 2,025 2,169 2,314 2,456 2,703 IChange from 2012 RNA -84 -95 -74 -125 -146 -116 -76 -48 -10 NA NA NYISO 2014 Reliability Needs Assessment 7

Table 3-2: Comparison of 2014 RNA Base Case Forecast and High Load (Econometric) Scenario Annual GWh 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 High Load Scenario 164,522 166,310 168,544 169,537 170,740 172,298 174,078 174,709 175,741 176,755 178,234 2014 RNA BaseCase 163,161 163,214 163,907 163,604 163,753 164,305 165,101 164,830 164,975 165,109 165,721 Energy Impacts of EE Programs & Retail Solar PV Cumulative GWh 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 RNA Base Case 1,361 3,096 4,637 5,933 6,987 7,993 8,977 9,879 10,766 11,646 12,513

[Annual MW 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 High Load Scenario 33,890 34,557 35,160 35,691 36,202 36,697 37,057 37,435 37,817 38,201 38,659 2014 RNA Base Case 33,666 34,066 34,412 34,766 35,111 35,454 35,656 35,890 36,127 36,369 36,580 Summer Peak Demand Impacts of EE Programs & Retail Solar PV Cumulative MW 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 RNA Base Case 224 491 748 925 1,091 1,243 1,401 1,545 1,690 1,832 2,079 NYISO 2014 Reliability Needs Assessment 8

Figure 3-1: 2014 Base Case Energy Forecast and Scenarios Annual Energy - Actual, Normal & Forecasts (GWh) 180000 175000 -[-

170000-165000 160000 - -4 1 155000 --- ý_,

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Energy Efficiency& Retail Solar PV - Annual Energy (GWh) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

~ LO CO 1- CO O 0 N ~iý C~j ce)

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oD CD C 0 0 0D 0 C) 0D 0 0 (i (N (Nj (j (j (N 04 C-4 .4 (N (N 1*0Energy Efficiency *1RetaiISolarPIVI Figure 3-3: 2014 Base Case Energy Efficiency & Retail Solar PV - Annual Energy Energy Efficiency & Retail SolarPV - SummerPeak (MW) 2,500 2,000 1,500 1,000 500 0

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NYISO 2014 Reliability Needs Assessment 10

3.2. Forecast of Special Case Resources The 2014 RNA special case resource (SCR) levels are based on the 2014 Gold Book value of 1,189 MW. The MARS program used for resource adequacy analysis calculates the SCR values for each hour based on the ratio of hourly load to peak load. Transmission security analysis, which evaluates normal transfer criteria, does not consider SCRs.

3.3. Resource Additions and Removal Since the 2012 RNA, resources have been added to the system, some mothball notices have been withdrawn and the associated facilities have returned to the system and some resources have been removed. A total of 455.9 MW have been added to the 2014 RNA base case either as new generation or existing units returning to service. Meanwhile, a total of 1,368.8 MW have been removed from the 2012 RNA base case because these units have retired, mothballed, or proposed to retire/mothball. The comparison of generation status between the 2012 RNA and 2014 RNA is detailed in Table 3-3 below. The MW values represent the Capacity Resources Interconnection Service (CRIS) MW values as shown in the 2014 Gold Book.

NYISO 2014 Reliability Needs Assessment 11

Table 3-3: Generation Addition and Removal 1CR1IS 2012 RNAI Station Unit Zone j (MW)

(MW) R Status*I 2014 RNA Status*

Resource Addition Stony Creek Wind C 93.9 N/A I/S since Nov. 2013 Taylor Biomass G 19.0 N/A I/S starting Dec. 2015 Astoria GT 10 J 24.9 O/S I/S return to service since July 15, 2013 Astoria GT 11 J 23.6 O/S I/S return to service since July 15, 2013 Gowanus 1 J 154.4 O/S I/S (Intent to Retire Notice withdrawn)

Gowanus 4 J 140.1 O/S I/S (Intent to Retire Notice withdrawn)

Total Resource Addition (CR1S MW) 455.9 Resource Removal Dunkirk 2 A 97.2 O/S I/S until May, 31 2015 RG&E Station 9 B 14.3 I/S O/S Seneca Oswego Fulton 1 C 0.7 I/S 0/S Seneca Oswego Fulton 2 C 0.3 I/S O/S Syracuse Energy ST1 C 11.0 I/S O/S Syracuse Energy ST2 C 58.9 I/S O/S Cayuga 1 C 154.1 I/S I/S until June 30 2017 Cayuga 2 C 154.1 I/S I/S until June 30 2017 Chateaugay Power D 18.2 I/S O/S Selkirk-I F 76.1 I/S O/S, Intent to Mothball Notice issued in Feb. 2014**

Selkirk-Il F 271.6 I/S 0/5, Intent to Mothball Notice issued in Feb. 2014**

Danskammer 1 G 61.0 I/S 0/S, Intent to Retire Notice issued in Jan. 2013'**

Danskammer 2 G 59.2 I/S O/S, Intent to Retire Notice issued in Jan. 2013'**

Danskammer 3 G 137.2 I/S O/S, Intent to Retire Notice issued in Jan. 2013'**

Danskammer4 G 236.2 I/S O/S, Intent to Retire Notice issued in Jan. 2013'**

Danskammer 5 G 0.0 I/S O/S, Intent to Retire Notice issued in Jan. 2013***

Danskammer 6 G 0.0 I/S 0/5, Intent to Retire Notice issued in Jan. 2013'**

Ravenswood 07 J 12.7 I/S O/S Montauk 2, 3, 4 K 6.0 I/S O/S Total Resource Removal (CRIS MW) 1368.8,

• I/S for In-Service, and O/S for Out-of-Service

• • Following the completion of this RNA report, Selkirk Cogen Partners, in a letter dated Sept 3, 2014, withdrew their earlier notice of intent to mothball Selkirk Units 1 & 2.

• • • On June 27, 2014, the PSC approved the transfer of the Danskammer facility to Helios Power Capital, LLC, and Mercuria Energy America, Inc. Following the transfer, the owners have stated their intent to return the Danskammer facility to operation.

NYISO 2014 Reliability Needs Assessment 12

NYISO 2014 Reliability Needs Assessment 13 3.4. Local Transmission Plans As part of the Local Transmission Planning Process (LTPP), Transmission Owners presented their Local Transmission Plans (LTPs) to the NYISO and Stakeholders in the fall of 2013. The NYISO reviewed the LTPs and included them in the 2014 Gold Book. The firm transmission plans included in the 2014 RNA base case are reported in Appendix D.

Assumptions for inclusion in the RNA were based on data as of April 1, 2014.

3.5. Bulk Transmission Projects Since the 2012 RNA some additional transmission projects have met the inclusion rules and are in the 2014 RNA base case. The National Grid Five Mile Road project includes tapping the Homer City-Stolle Rd. 345 kV circuit and connecting to a new 115 kV station through one 345/115 kV transformer. The National Grid Eastover Rd. project consists of tapping the Rotterdam-Bear Swamp 230 kV circuit and connecting to a new 115 kV station with two 230/115 kV transformers (one spare). These projects are modeled as in-service by summer of 2015.

The Transmission Owner Transmission Solutions (TOTS) is a group of projects by NYPA, NYSEG, and ConEdison that includes three primary projects. The first is Marcy South Series Compensation, which includes the installation of series capacitance at the Marcy station on the Marcy-Coopers Corners 345 kV circuit, and at Fraser station on the Edic-Fraser 345 kV and the Fraser-Coopers Corners 345 kV circuits. A section of the Fraser-Coopers Corners 345 kV circuit will also be reconductored. The second project is Rock Tavern-Ramapo, which includes building an additional 345 kV circuit between Rock Tavern and Ramapo and a 345/138 kV tap connecting to the existing Sugarloaf 138 kV station. The third project is Staten Island Unbottling, which includes the reconfiguration of Goethals and Linden CoGen substations as well as the installation of additional cooling on the 345 kV cables from Goethals to Gowanus and Gowanus to Farragut. The TOTS projects are scheduled to be completed by summer of 2016.

An additional 345/115 kV transformer is modeled as in-service at the NYSEG Wood Street station by the summer of 2016. An additional 230/115/34.5 kV transformer will also be installed at the NYSEG Gardenville substation by the summer of 2017.

The RGE Station 255 project that taps the existing Somerset-Rochester and Niagara-Rochester 345 kV circuits is in the 2014 RNA base case. An additional 345 kV line will be added from Station 255 to Station 80. Station 255 will have two 345/115 kV transformers connecting to a new 115kV station in the Rochester area. These projects, collectively known as the Rochester Area Reliability Project, are modeled as in-service by 2017. Also since the 2012 RNA, two 345/115 kV transformers (T1 and T3) located at RGE Station 80 have been replaced with transformers which have higher ratings, and are modeled accordingly in the 2014 RNA base case.

NYISO 2014 Reliability Needs Assessment 14

During the development of the 2012 CRP, National Grid proposed a project to mitigate potential overloads around the Clay substation by reconductoring the Clay-Teall (#10) 115 kV circuit by winter 2017. This upgrade is modeled as part of the 2014 RNA base case starting in the year 2018.

Two FirstEnergy projects within Pennsylvania that tap NYSEG transmission lines are included in the 2014 RNA base case: the Farmers Valley project, which taps the Homer City-Five Mile Rd. 345 kV tie-line, and the Mainesburg project, which taps the Homer City-Watercure 345 kV tie-line. Both projects are modeled as in-service for summer 2015.

NYISO 2014 Reliability Needs Assessment 15

3.6. Base Case Peak Load and Resource Ratios The capacity used for the 2014 RNA base case peak load and resource ratio is the existing generation adjusted for the unit retirements, mothballing, or proposals to retire/mothball announced as of April 15, 2014 along with the new resource additions that met the base case inclusion rules reported in the 2014 Gold Book. This capacity is summarized in Table 3-4 below.

Table 3-4: NYCA Peak Load and Resource Ratios 2015 through 2024 Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Peak Load (MW)

NYCA* 34,066 I 34,412 34,766 35,111 35,454 35,656 135,890 j 36,127 36,369 1 36,580 Zone J* 12,050 12,215 _ 12,'385 _ 12,570 12,700 12790 12,900 12,990__ 13,100 113,185 Zone K*ZnK*5,543 58 5,629 566 5,708 5,748 5,789 5,923 Zone G-J 16,557 16,749 I 16,935 I 17,149 17,311 17,421 17,554 17,694 17,828 17,935 Resources (MW)

Capacity- 37,375 37,394 37,085 37,085 j 37,085 j 37,085 37,085 37,085 _37,085 j 37,085 Net Purchases & Sales 2,237 2,237 2,237 I. 2,237 2,237 2,237 2,237 2,237 2,237" - 2,237 SCR 1,189 1,189 1,189 1,189 1,189 1,189 1,189 1,189 1,189 1189 NYCA Total Resources ....

40,801.... _--__--- '--- --405 40,820__ '-.-.. --

,511 ..-I " ..... _ -. '....

440,5511- -- F----

40,51.--.. -. --.40,511 40,511

- 40,511.... .. 40,5.1 Capacity/Load Ratio 109.7% 108.7% S 106.7% 105.6% 104.6% 104.0% 103.3% 102.7% 102. 0/%J 101.4%

Cap+NetPurch/Load Rat 116.3% 115.2% 113.1% I 112.0% 110.9% 110.3% 109.6% 108.8% 108.1% 107.5%

Tot.Res./Load Ratio 119.8% 118.6% T 116.5% 115.4% 1 114.3% 1 113.6% 112.9% 112.1% 111.4% 110.7%

Zone J Total Resources ,10, 10,797 10,797 10,797- 10,797 10,797 10 7 10,97 . 10,797 Tot.Res./Load Ratio 89.6% 88.4% 87.2% I 85.9- - 85.0% 84.4% T 83.7% 83.1% 82.4% 81.9%

Zone K Total Resources 6,360 . 6,360 - 6,360 1 6,360 1 6,1

,360 6,360. 6,3,360 6,360 Tot.Res./Load Ratio 114.7% -113-.8% - -113.0% - 12.% 1-111.4- T -110.6% 109.9% 109.1% 108.2% - 107.4%

Zone G-J Total Resources 15,137 J 15,137 1 3 ,137 j115,137 15,**7 15,137 15,137 15,137 Tot.Res./Load Ratio 91.4% 90.4% 89.4% 88.3% 87.4% 86.2% 85.5% 84.9% 84.4%

• NYCA load values represent baseline coincident summer peak demand. Zones J and K load values represent non-coincident summer peak demand. Aggregate Zones G-J values represent G-J coincident peak, which is non-coincident with NYCA.

• • NYCA Capacity values include resources electrically internal to NYCA, additions, reratings, and retirements (including proposed retirements and mothballs). Capacity values reflect the lesser of CRIS and DMNC values. NYCA resources include the net purchases and sales as per the Gold Book. Zonal totals include the awarded UDRs for those capacity zones.

Notes:

• SCR - Forecasted ICAP value based on 2014 Gold Book.

• Wind generator summer capacity is counted as 100% of nameplate rating.

" The NYISO set a deadline of May 15, 2014 for deciding whether to include Dunkirk fuel conversion project in the base case or to study it separately as a sensitivity. The NYISO subsequently determined to study it separately as a sensitivity.

NYISO 2014 Reliability Needs Assessment 16

For summer 2014 resource adequacy, the existing capacity provides about a 122.7%

Installed Capacity Reserve to meet the summer 2014 Installed Reserve Margin requirement of 117.0%. The capacity margin decreases throughout the study period, but more rapidly and noticeably in the outer years due to load growth. Consequently, the reliability need year has advanced to 2019. To demonstrate the significant reduction in resources, the NYISO compared the capacity margin in the need year of 2019 between the 2012 RNA and the 2014 RNA. The NYISO found a net capacity margin decrease of 2,100 MW, which breaks down as follows, and summarized in Table 3-5:

1. The NYCA capacity resources are 874 MW less for 2019 (724 MW upstate and 150 MW in SENY);

2. The NYCA baseline load forecast is 250 MW higher for 2019 (497 MW higher upstate and 247 MW lower in SENY); and

3. The NYCA Special Case Resources (SCRs) projection is 976 MW less for 2019 (685 MW upstate and 291 MW in SENY).

This reduction contributes to the shift of the need year from 2020 to 2019 identified in the 2014 RNA, and discussed in Section 4.

Table 3-5: Load/Resources Comparison of Year 2019 (MW)

Year 2019 2012 RNA 2014 RNA delta Load 35,204 35,454 250 SCR 2,165 1,189 -976 Total Capacity without SCRs 40,196 39,322 -874 Net Change in capacity margin in 2014 RNA from 2012 RNA (MW) -2,100 3.7. Methodology for the Determination of Needs Reliability Needs are defined by the Open Access Transmission Tariff (OATT) in terms of total deficiencies relative to Reliability Criteria determined from the assessments of the BPTFs performed for the RNA. There are two steps to analyzing the reliability of the BPTFs. The first is to evaluate the security of the transmission system; the second is to evaluate the adequacy of the system, subject to the security constraints. The NYISO planning procedures include both security and adequacy assessments. The transmission adequacy and the resource adequacy assessments are performed together.

Transmission security is the ability of the power system to withstand disturbances such as short circuits or unanticipated loss of system elements and continue to supply and deliver electricity. Security is assessed deterministically, with potential disturbances being applied NYISO 2014 Reliability Needs Assessment 17

without concern for the likelihood of the disturbance in the assessment. These disturbances (single-element and multiple-element contingencies) are categorized as the design criteria contingencies, explicitly defined in the NYSRC Reliability Rules. The impacts when applying these design criteria contingencies are assessed to ensure no thermal loading, voltage or stability violations will occur. In addition, the NYISO performs a short circuit analysis to determine if the system can clear faulted facilities reliably under short circuit conditions. The NYISO "Guideline for Fault Current Assessment" describes the methodology for that analysis.

The analysis for the transmission security assessment is conducted in accordance with NERC Reliability Standards, NPCC Transmission Design Criteria, and the NYSRC Reliability Rules.

AC contingency analysis is performed on the BPTF to evaluate thermal and voltage performance under design contingency conditions using the Siemens PTI PSSE and PowerGEM TARA programs. Generation is dispatched to match load plus system losses, while respecting transmission security. Scheduled inter-area transfers modeled in the base case between the NYCA and neighboring systems are held constant.

For the RNA, approximately 1,000 design criteria contingencies are evaluated under N-i, N-1-0, and N-1-1 normal transfer criteria conditions to ensure that the system is planned to meet all applicable reliability criteria. To evaluate the impact of a single event from the normal system condition (N-i), all design criteria contingencies are evaluated including: single element, common structure, stuck breaker, generator, bus, and HVDC facilities contingencies.

An N-1 violation occurs when the power flow on the monitored facility is greater than the applicable post-contingency rating. N-i-0 and N-1-1 analysis evaluates the ability of the system to meet design criteria after a critical element has already been lost. For N-i-0 and N-1-1 analysis, single element contingencies are evaluated as the first contingency; the second contingency (N-1-1) includes all design criteria contingencies evaluated under N-1 conditions.

The process of N-i-0 and N-1-1 testing allows for corrective actions including generator redispatch, phase angle regulator (PAR) adjustments, and HVDC adjustments between the first and second contingency. These corrective actions prepare the system for the next contingency by reducing the flow to normal rating after the first contingency. An N-i-0 violation occurs when the flow cannot be reduced to below the normal rating following the first contingency.

An N-1-1 violation occurs when the facility is reduced to below the normal rating following the first contingency, but the power flow following the second contingency is greater than the applicable post-contingency rating.

Resource adequacy is the ability of the electric systems to supply the aggregate electricity demand and energy requirements of the customers at all times, taking into account scheduled and unscheduled outages of system elements. Resource adequacy considers the transmission systems, generation resources, and other capacity resources, such as demand response. Resource adequacy assessments are performed on a probabilistic basis to capture the random natures of system element outages. If a system has sufficient transmission and generation, the probability of an unplanned disconnection of firm load is equal to or less than the system's standard, which is expressed as a Loss of Load Expectation (LOLE). The New York NYISO 2014 Reliability Needs Assessment is

State bulk power system is planned to meet a LOLE that, at any given point in time, is less than or equal to an involuntary load disconnection that is not more frequent than once in every 10 years, or 0.1 events per year. This requirement forms the basis of New York's Installed Reserve Margin (IRM) requirement and is on a statewide basis.

If Reliability Needs are identified, various amounts and locations of compensatory MW required for the NYCA to satisfy those needs are determined to translate the criteria violations to understandable quantities. Compensatory MW amounts are determined by adding generic capacity resources to zones to effectively satisfy the needs. The compensatory MW amounts and locations are based on a review of binding transmission constraints and zonal LOLE determinations in an iterative process to determine various combinations that will result in Reliability Criteria being met. These additions are used to estimate the amount of resources generally needed to satisfy Reliability Needs. The compensatory MW additions are not intended to represent specific proposed solutions. Resource needs could potentially be met by other combinations of resources in other areas including generation, transmission and demand response measures.

Due to the differing natures of supply and demand-side resources and transmission constraints, the amounts and locations of resources necessary to match the level of compensatory MW needs identified will vary. Resource needs could be met in part by transmission system reconfigurations that increase transfer limits, or by changes in operating protocols. Operating protocols could include such actions as using dynamic ratings for certain facilities, invoking operating exceptions, or establishing special protection systems.

The procedure to quantify compensatory MW for BPTF transmission security violations is a separate process from calculating compensatory MW for resource adequacy violations.

This quantification is performed by first calculating transfer distribution factors (TDF) on the overloaded facilities. The power transfer used for this calculation is created by injecting power at existing buses within the zone where the violation occurs, and reducing power at an aggregate of existing generators outside of the area.

NYISO 2014 Reliability Needs Assessment 19

4. Reliability Needs Assessment 4.1. Overview Reliability is defined and measured through the use of the concepts of security and adequacy described in Section 3.

4.2. Reliability Needs for Base Case Below are the principal findings of the 2014 RNA applicable to the base case conditions for the 2015-2024 study periods including: transmission security assessment; short circuit assessment; resource and transmission adequacy assessment; system stability assessments; and scenario analyses.

4.2.1. Transmission Security Assessment The RNA requires analysis of the security of the Bulk Power Transmission Facilities (BPTF) throughout the Study Period (2015-2024). The BPTF, as defined in this assessment, include all of the facilities designated by the NYISO as a Bulk Power System (BPS) element as defined by the NYSRC and NPCC, as well as other transmission facilities that are relevant to planning the New York State transmission system. To assist in the assessment, the NYISO reviewed many previously completed transmission security assessments, and utilized the most recent Area Transmission Review and FERC Form 715 power flow case that the NYISO submitted to FERC.

The transmission security analysis identifies thermal violations on the BPTF throughout the Study Period (2015-2024) for N-i, N-1-0, and N-1-1 conditions, some of which are a continuation of the violations identified in the 2012 RNA for which work is ongoing and some of which represent new violations resulting from system changes modeled in the base case. Table 4-1 provides a summary of the contingency pairs that result in the highest thermal overload on each overloaded BPTF element under N-i, N-1-0, and N-1-1 conditions using coincident peak loading. In the second contingency column of Table 4-1, "N/A" corresponds to an N-1 violation and "Base Case" corresponds to an N-I-0 violation. Table 4-2 provides a summary of the year by which a solution is needed to be in-service to mitigate the transmission security violation.

Appendix D provides a summary of all contingency pairs that result in overloads on the BPTF for the study period.

There are four primary regions of Reliability Needs identified in Table 4-1 including:

Rochester, Western & Central New York, Capital Region, and Lower Hudson Valley & New York City. These Reliability Needs either continue to be generally driven by, or have arisen anew due to, two primary factors: (i) recent and proposed generator retirements/mothballs; and (ii) combined with load growth. Considering non-coincident peak loading for these regions, the NYISO 2014 Reliability Needs Assessment 20

overloads listed in Table 4-1 would increase most notably in the out-years. Figure 4-1 geographically depicts the four regions where the loads may be impacted by transmission security constraints.

Figure 4-1: Approximate Locations of Transmission Security Needs Rochester The transmission security analysis continues to show near-term overloads in the Rochester area, primarily due to load growth. The 2012 RNA identified overloaded transformers at Station 80 and Pannell starting in 2013. The Station 80 overloads were resolved by the recently completed replacement of two transformers at that station. The remaining portion of the Rochester Area Reliability Project, Rochester Gas and Electric (RG&E)

Station 255, which was provided as a solution in the 2012 CRP is included in the base case starting in 2017 according to the firm plans identified in the 2014 Gold Book.

Starting in 2015, the Pannell 345/115 kV transformer 1TR is overloaded for the loss of Ginna followed by a stuck breaker at Pannell. Pannell 345/115 kV transformer 2TR is similarly overloaded for the loss of Ginna followed by a stuck breaker at Pannell. The Pannell-Quaker

(#914) 115 kV line overloads for the loss of Ginna followed by a loss of Pannell 345/115 kV 3TR.

NYISO 2014 Reliability Needs Assessment 21

The N-i-i violations on Pannell 345/115 transformers 1TR and 2TR and Pannell-Quaker (#914) 115 kV are resolved after RG&E Station 255 is in-service.

Western & Central New York The transmission security analysis identifies a number of thermal and voltage violations on the BPTF in the Western and Central New York regions resulting from a lack of transmission and generating resources to serve load and support voltage in the area.

The 230 kV system between Niagara and Gardenville includes two parallel 230 kV transmission lines from Niagara to Packard to Huntley to Gardenville, including a number of taps to serve load in the Buffalo area. A third parallel 230 kV transmission line also runs from Niagara to Robinson Rd. to Stolle Rd. to Gardenville. The N-i-1 analysis shows that in 2018, Huntley-Gardenville (#80) 230 kV overloads for loss of the parallel line (#79) followed by a stuck breaker at the Robinson Road 230 kV substation. In 2021, the Packard-Huntley (#77) and (#78) lines each overload for the loss of the parallel line followed by a stuck breaker at the Robinson Road 230 kV substation. Similarly, in 2022, the Huntley-Gardenville (#79) line overloads for loss of the parallel line (#80) followed by a stuck breaker at the Robinson Road 230 kV substation.

The overloads occur due to increased load in Western and Central New York and are aggravated by both the mothball of Dunkirk generation and a new load-serving 230/115 kV substation (Four Mile Junction) just within the PJM area.

National Grid's Clay 115 kV station includes eight 115 kV transmission connections and two 345/115 kV transformers that serve the Oswego and Syracuse areas. Starting in 2015, the Clay-Lockheed Martin (#14) 115 kV line has a flow of 146 MVA compared to a Long Term Emergency (LTE) rating of 120 MVA for an N-1 breaker failure at the Oswego 345 kV substation.

In 2019, the flow increases to 166 MVA. The increase in flow between 2015 and 2019 is primarily due to modeling the Cayuga generation plant out-of-service starting in 2017. The increased load and Dunkirk mothballing in 2015 also contribute to the overload. In 2024, the flow increases to 168 MVA due to load growth. In 2024, the Clay-Woodward (Euclid-Woodard)

(#17) 115 kV line has a flow of 183 MVA compared to an LTE rating of 174 MVA due to an N-1 breaker failure at the Lafayette 345 kV substation.

Thermal overloads are also observed at Clay for N-i-1 conditions. Starting in 2015, the N-i-1 analysis shows various overloads in the Syracuse area including: Clay-Lockheed Martin

(#14) 115 kV, Clay-Teall (#10) 115 kV, and the Clay-Dewitt (#3) 115 kV line. Starting in 2017, the N-i-1 analysis shows additional overloads on: Clay-Woodard (#17) 115 kV, Clay-S. Oswego (#4) 115 kV, and the Clay 345/115 kV 1TR transformer. In the 2012 RNA, the NYISO identified transmission security violations on Clay-Teall (#10) 115 kV line. The overloads on the Clay-Teall

(#10) 115 kV and the Clay-Dewitt (#3) 115 kV lines are mitigated by the solutions identified in the 2012 CRP starting in 2018, as described in Section 3.5 of this report. The Clay-Lockheed Martin (#14) 115 kV line also experiences an N-I-0 violation starting in 2019 for the loss of the Elbridge 345/115 kV transformer. The overloads in this area are primarily due to power flowing NYISO 2014 Reliability Needs Assessment 22

from east-to-west on the 115 kV system to serve load in Central New York after the loss of a north-to-south 345 kV path and are exacerbated with Cayuga mothballed.

National Grid's Porter 115 kV station includes eight 115 kV transmission connections and two 345/115 kV transformers that serve the Utica and Syracuse areas. The N-1-1 analysis shows the Porter-Yahnundasis (#3) 115 kV line overloaded starting in 2015 for the loss of Oswego-Elbridge-Lafayette (#17) 345 kV followed by a stuck breaker at the Clay 345 kV substation; additionally, the N-1-i analysis shows the Porter-Oneida (#7) 115 kV line overloaded starting in 2017 for the same contingency pair. These overloads are due to power flowing from east to west on the 115 kV system to serve load in the Utica, Syracuse, and Finger Lakes area and are exacerbated with Cayuga mothballed.

In addition to the thermal violations identified in Table 4-1, the Porter 115 kV area has local low voltage issues in all years due to a stuck breaker contingency.

The Oakdale 345/230/115 kV substation serves the Binghamton area. Starting in 2015, N-1-i analysis shows the loading on Oakdale 345/115 kV 2TR is overloaded for the loss of Watercure 345/230 kV 1TR followed by a stuck breaker at Oakdale 345 kV; however, starting in 2016 a second Watercure 345/230 kV transformer (expected in-service date prior to winter 2015) is modeled in-service, which resolves Watercure 345/230 kV transformer from being a limiting contingency. With the second Watercure 345/230 kV transformer in-service in 2016, the limiting contingency pair changes to the loss of Fraser 345/115 kV 2TR followed by a stuck breaker at Oakdale 345 kV. An N-1-0 violation occurs starting in 2016 on Oakdale 345/115 kV 2TR for loss of Oakdale 345/115 kV 3TR and then in 2020 on Oakdale 345/115 kV 3TR for loss of Oakdale 345/115 kV 2TR. The overloads on the Oakdale 345/115 kV transformers are caused by the loss of sources (i.e. transformers) and are exacerbated with Cayuga mothballed.

In addition to the thermal violations identified in Table 4-1, the Oakdale area has low voltage under N-i-1 conditions starting in 2017 for loss of transformer sources into the local area from the bulk system. The low voltage is primarily due to modeling the Cayuga generation plant out-of-service starting in 2017.

Capital Region In March of 2014, Selkirk Cogen Partners, LLC submitted their notice of intent to mothball the Selkirk I and Selkirk II facilities effective September 2014; therefore, these generating units are not included in the base case. With the Selkirk plant modeled out-of-service, pre-contingency overloads exist on local 115 kV non-BPTF elements beginning in 2015 and, unless resolved, continuing for all study years. There are also significant post-contingency overloads on the local 115 kV transmission lines. Additionally, overloads are noted on the New Scotland 345/115 kV transformer for the loss of generation at Bethlehem followed by loss of a New Scotland 345 kV bus (#77) and the Reynolds 345/115 kV transformer has an N-1-0 violation for the loss of generation at Bethlehem. National Grid is evaluating the overloaded local NYISO 2014 Reliability Needs Assessment 23

facilities in this area and determining corrective action plans. The solutions developed by National Grid will impact the magnitude of loadings on BPTF facilities in the Capital Region.

These loadings on the BPTF facilities will be reevaluated as part of the CRP following National Grid's update to their local transmission plan.

Lower Hudson Valley & New York City The UPNY-SENY interface includes five 345 kV lines from north to south within New York: Leeds - Athens - Pleasant Valley (#95/91) 345 kV, Leeds - Pleasant Valley (#92) 345 kV, Leeds - Hurley (#301) 345 kV, Coopers Corners - Rock Tavern (#42) 345 kV, and Coopers Corners - Middletown - Rock Tavern (#34) 345 kV. Similar to the 2012 RNA, the Leeds -

Pleasant Valley lines are overloaded starting in 2022 for the N-1-1 loss of other 345 kV lines across the UPNY-SENY interface. These overloads are due to load growth and a reduction in generation in the Lower Hudson Valley and New York City areas.

NYISO 2014 Reliability Needs Assessment 24

Table 4-1: 2014 RNA Transmission Security Thermal Violations 2015 2019 2024 Normal LTE STE Flow Flow Flow Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency (MVA) (MVA) (MVA)

(MVA) (MVA) (MVA)

A N.Grid Packard-Huntley (#77) 230 556 644 704 649 Packard-Huntley SB Robinson Rd 230 (Packard-Sawyer) (#78) 230 A N.Grid Packard-Huntley (#78) 230 556 644 746 649 Packard-Huntley SB Robinson Rd 230 (Packard-Sawyer) (#77) 230 A N.Grid Huntley-Gardenville (#79) 230 566 654 755 664 Huntley-Gardenville $8 Robinson Rd 230 (Huntley-Sawyer) (#80) 230 661 672 Huntley-Gardenville SB Robinson Rd 230 N.Grid Huntley-Gardenville (#80) 230 566 654 755 (#79) 230 A

(Huntley-Sawyer) 697 Robinson-Stolle Rd Huntley-Gardenville

(#65) 230 (#79) 230 B RGE Pannell 345/115 1TR 228 282 336 372 L/O Ginna SB Pannell 345 B RGE Pannell 345/115 2TR 228 282 336 372 L/O Ginna SB Pannell 345 B RGE Pannell-Quaker (#914) 115 207.1 246.9 284.8 298 L/O Ginna Pannell 345/115 3TR 573 Watercure 345/230 1TR SB Oakdale 345 C NYSEG Oakdale 345/115 2TR 428 556 600 440 444 Oakdale 345/115 3TR Base Case I I 1 1 574 586 Fraser 345/115 2TR SB Oakdale 345 C NYSEG Oakdale 345/115 3TR 428 556 600 438 Oakdale 345/115 2TR Base Case 146 163 168 SB Oswego 345 N/A Clay-Lockheed Martin (#14)

C N.Grid 116 120 145 139 1 142 1 Elbridge 345/115 1TR Base Case 115 165 204 216 Clay-Woodard (#17) 115 SB Lafayette 345

• 4- -I- .1 4 .4-Clay-Teall (#10) 115 Clay-Teall C N.Grid 116 120 145 131 SB Dewitt 345 (Clay-Bartell Rd-Pine Grove) (#11) 115 C N.Grid Clay-Dewitt (#3) 115 116 120 145 126 Clay-Dewitt SB Oswego 345 (Clay-Bartell Rd) 1 (#13) 345 C N.Grid Clay 345/115 1TR 478 637 794 710 757 Oswego-EIbridge-Lafayette SB Clay 345

(#17) 345 183 SB Lafayette 345 N/A C N.Grid Clay-Woodard (#17) 115 174 174 174 Clay-Lockheed Martin (Euclid-Woodward) 207 220 CaLce Mri SB Lafayette 345

_______(#14) ______ 115 C N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 114 117 Clay 345/115 1TR SB Clay 345 Porter-Yahnundasis (#3) 115 128 141 142 Oswego-Elbridge-Lafayette SBClay 345 E N.Grid (Porter-Kelsey) 116 120 145 128 14 142 (#17) 345 PotrKle 143 Clay-Dewitt (#13) 345 SB Oswego 345 Porter-Oneida (#7) 115 122 125 Oswego-Elbridge-Lafayette SBClay 345 E N.Grid Porter-Oneica) 116 120 145 122 125(#17) 345 (Porter-W. Utica) 126 Clay-Dewitt (#13) 345 SB Oswego 345 F N.Grid New Scotland 345/115 1TR 458 570 731 631 659 837 L/O Bethlehem New Scotland (#77) 345 F N.Grid Reynolds 345/115 459 562 755 492 498 584 L/O Bethlehem Base Case F-G N.Grid Leeds-Pleasant Valley (#92) 1331 1538 1724 1587 Athens-Pleasant Valley Tower 41&33 345 (491) 345 F-G N.Grid Athens-Pleasant Valley (#91) 1331 1538 1724 1584 Leeds-Pleasant Valley (#92) Tower 41&33 345 345 NYISO 2014 Reliability Needs Assessment 25

Table 4-2: 2014 RNA Transmission Security Reliability Need Year Zone Owner Monitored Element Year of Need B RGE Pannell 345/115 1TR 2015 B RGE Pannell 345/115 2TR 2015 B RGE Pannell-Quaker (#914) 115 2015 C NYSEG Oakdale 345/115 2TR 2015 C N.Grid Clay-Lockheed Martin (#14) 115 2015 C N.Grid Clay-Teall (#10) 115 2015 (Clay-Bartell Rd-Pine Grove)

C N.Grid Clay-Dewitt (#3) 115 2015 (Clay-Bartell Rd)

E N.Grid Porter-Yahnundasis (#3) 115 2015 (Porter-Kelsey)

F N.Grid New Scotland 345/115 1TR 2015 F N.Grid Reynolds 345/115 2015 C N.Grid Clay 345/115 1TR 2017 C N.Grid Clay-Woodard (#17) 115 2017 (Euclid-Woodward)

C N.Grid S. Oswego-Clay (#4) 115 2017 (S. Oswego-Whitaker)

E N.Grid Porter-Oneida (#7) 115 2017 (Porter-W. Utica)

A N.Grid Huntley-Gardenville (#80) 230 2018 (Huntley-Sawyer)

C NYSEG Oakdale 345/115 3TR 2020 A N.Grid Packard-Huntley (#77) 230 2021 (Packard-Sawyer)

A N.Grid Packard-Huntley (#78) 230 2021 (Packard-Sawyer)

A N.Grid Huntley-Gardenville (#79) 230 2022 (Huntley-Sawyer)

F- G N.Grid Leeds-Pleasant Valley (#92) 345 2022 F- G N.Grid Athens-Pleasant Valley (#91) 345 2022 NYISO 2014 Reliability Needs Assessment 26

4.2.2. Short Circuit Assessment Performance of a transmission security assessment includes the calculation of symmetrical short circuit current to ascertain whether the circuit breakers in the system could be subject to fault current levels in excess of their rated interrupting capability. The analysis was performed for the year 2019 reflecting the study conditions outlined in Section 3. The calculated fault levels would be constant over the second five years because no new generation or transmission is modeled in the RNA for second five years, and the methodology for fault duty calculation is not sensitive to load growth. The detailed results are presented in Appendix D of this report.

National Grid, having taken into account factors such as circuit breaker age and fault current asymmetry, has derated breakers at certain stations. As a result, overdutied breakers were identified at Porter 230 kV and Porter 115 kV stations. Table 4-3: summarizes over-duty breakers at each station. National Grid reports that plans to make the necessary facility upgrades are in place. For Porter 115 kV, National Grid is scheduled to rebuild the station and replace all the breakers by Winter 2014/2015. For Porter 230 kV, National Grid is scheduled to add microprocessor relays to mitigate the overdutied breakers by the end of 2014.

Table 4-3:2014 RNA Over-Duty Circuit Breaker Summary Substation kV Number of Over-Duty Breaker ID Circuit Breakers Porter 115 10 R130, RIO, R20, R30, R40, R50, 1R60, R70, R80, R90 Porter 230 9 R110,R120,R15, R170, R25, R320, 1R835, R825, R845 NYISO 2014 Reliability Needs Assessment 27

4.2.3. Transmission and Resource Adequacy Assessment The NYISO conducts its resource adequacy analysis with General Electric's Multi Area Reliability Simulation (MARS) software package. The modeling applies interface transfer limits and performs a probabilistic simulation of outages of capacity and transmission resources.

The emergency transfer limits were developed using the 2014 RNA base case. Table 4-4, Table 4-5, and Table 4-6 below provide the thermal and voltage emergency transfer limits for the major NYCA interfaces. For comparison purposes, the 2012 RNA transfer limits are presented.

Table 4-4: Transmission System Thermal Emergency Transfer Limits 2014 RNA study 2012 RNA study Interface 2015 2016 2017 2018 2019 2024 2015 2016 2017 Dysinger East 2200 2150 2100 2075 2050 Same as 2019 2975 2975 2975 Central East MARS 4025 4500 4500 4500 4500 Same as 2019 3425 3425 3475 E to G (Marcy South) 1700 2150 2150 2150 2150 Same as 2019 1700 1700 1700 F to G 3475 3475 3475 3475 3475 Same as 2019 3475 3475 3475 UPNY-SENY MARS 5150 5600 5600 5600 5600 Same as 2019 5150 5150 5150 to J (Dunwoodie South MARS) 4400 4400 4400 4400 4400 Same as 2019 4400 4400 4400 1to K (Y49/Y50) 1290 1290 1290 1290 1290 Same as 2019 1290 1290 1290 Table 4-5: Transmission System Voltage Emergency Transfer Limits 2014 RNA study 2012 RNA study Interface 2015 2016 2017 2018 2019 2024 2015 2016 2017 Dysinger East 2700 DNC DNC DNC 2800 Same as 2019 2875 2900 2875 West Central 1475 DNC DNC DNC 1350 Same as 2019 1850 1900 1900 Central East MARS 3250 3100 3100 3100 3100 Same as 2019 3350 3350 3350 Central East Group 4800 5000 5000 5000 5000 Same as 2019 4800 4800 4800 UPNY-ConEd 5210 5210 5210 5210 5210 Same as 2019 5210 5210 5210 1 to J & K 5160 5160 5160 5160 5160 Same as 2019 5160 5160 5160 DNC: Did Not Calculate Table 4-6: Transmission System Base Case Emergency Transfer Limits 2014 RNA study 2012 RNA study Interface 2015 2016 2017 2018 2019 2024 2015 2016 2017 Dysinger East 2200 T1 2150 T 2100 T 2075 T 2050 T Same as 2019 2875 V 29001 V 2875 V Central East MARS 3250 V 3100 V 3100 V 3100 V 3100 V Same as 2019 3350 V_ 3350 V 3350 V Central East Group 4800 v 5000 V 5000 V 5000 v 5000 v Same as 2019 4800 v 4800 V 4800 V Eto G (Marcy South) 1700 T 2150 T 2150 T 2150 T 2150 T Same as 2019 1700 T 1700 T 1700 T FtoG 3475 T 3475 T 3475 T 3475 T 3475 T Sameas2019 3475 T 3475 T 3475 T UPNY-SENYMARS 5150 T 5600 T 5600 T 5600 T 5600 T Sameas2019 5150 T 5150 T 5150 T Ito J(Dunwoodie South MARS) 4400 T 4400 T 4400 T 4400 T 4400 T Same as 2019 4400 T 4400 T 4400 1 ItoK(Y49/YS0) 1290 T 1290 T1 1290 T 1290 T 1290 T Sameas2019 1290 T1 1290 T 1290 "

1toJ&K 5160 C 5160 C 5160 C 5160 C 5160 C Sameas2019 5160 C 5160 C 5160 C Note: T=Thermal, V=Voltage, C=Combined NYISO 2014 Reliability Needs Assessment 28

The Dysinger East transfer limit decreased compared to the transfer limit used in the 2012 RNA. The thermal limitations on the 230 kV transmission path between Packard and Gardenville in Zone A became more constraining than the voltage limitations. This was due primarily to modeling the Dunkirk plant as out-of-service in the 2014 RNA analysis whereas, in contrast, there was 500 MW of generic generation modeled at the Dunkirk substation for the calculation of transfer limits in the 2012 RNA. The transfer limit further reduces incrementally each year due to load growth in Zone A.

The Central East MARS interface limit is lower for the 2014 RNA than it was for the 2012 RNA. This is primarily due to the inclusion of the Transmission Owner Transmission Solutions (TOTS) projects. The inclusion of the TOTS projects in the model also resulted in increases to the Central East Group, Marcy South, and UPNY-SENY MARS interface transfer limits. The TOTS projects that add series compensation to the Marcy South transmission corridor effectively increase flow through that transmission path. The second Rock Tavern-Ramapo 345 kV line also contributes to this change in the power flow pattern. The result is that power is diverted somewhat from the circuits that make up the Central East MARS interface and the power flow across the UPNY-SENY interface is more balanced between the Marcy South corridor and the Leeds-Pleasant Valley corridor. Inclusion of the TOTS projects also impacts the A line and VFT interface(Staten Island) by significantly reducing the constraints on flows from Staten Island generation and the ties to New Jersey.

The results of the 2014 RNA base case studies show that the LOLE for the NYCA exceeds 0.1 beginning in the year 2019 and the LOLE continues to increase through 20242. The LOLE results for the entire 10-year RNA base case are presented in Table 4-7. While the LOLE criteria are evaluated on a statewide basis, both the NYCA and zonal LOLE are presented for informational purposes to assist in the development of the compensatory MWs. The zonal LOLE are driven by many factors and thus cannot be used for direct identification of the drivers of the statewide [OLE violations. A test to determine the causation of the LOLE separation on a zonal basis caused by transmission interface constraints was developed and applied to identify those interfaces most binding at the time of NYCA LOLE event. It is referred to as the Binding Interface test and it is critical in developing the most effective compensatory MW locations.

Consistent with the previous RNAs, UPNY-SENY remains the most constraining interface.

2RNA Study results are rounded to two decimal places. A result of exactly 0.01, for example, would correspond to one event in one hundred years.

NYISO 2014 Reliability Needs Assessment 29

Table 4-7: NYCA Resource Adequacy Measure (in LOLE)

Zone(s) 25 2 ON 2 Zone A 0 0 0 0 0 0 0 0 0 0 Zone B 0.02 0.02 0.04 0.05 0.06 0.06 0.07 0.08 0.08 0.09 Zone C 0 0 0 0 0 0 0 0 0 0 Zone D 0 0 0 0 0 0 0 0 0 0 Zone E 0.02 0.02 0.04 0.05 0.06 0.06 0.07 0.08 0.08 0.09 Zone F 0 0 0 0 0 0 0 0 0 0 Zones A-F 0.02 0.02 0.04 0.05 0.06 0.06 0.07 0.08 0.08 0.09 Zone G 0.01 0.01 0.02 0.03 0.04 0.04 0.05 0.06 0.07 0.08 Zone H 0 0 0 0 0 0 0 0 0 0 Zone I 0.04 0.04 0.06 0.08 0.11 0.13 0.15 0.18 0.22 0.25 Zone J 0.04 0.04 0.06 0.08 0.10 0.12 0.15 0.18 0.21 0.25 Zone K 0.01 0.02 0.03 0.04 0.06 0.07 0.09 0.12 0.15 0.19 Zones G-K 0.04 0.04 0.06 0.08 0.11 0.13 0.15 0.18 0.22 0.26 NYCA 0.04 0.04 0.06 0.08 0.11 0.13 0.15 0.18 0.22 0.26

• Note: "0" represents an LOLE less or equal to 0.004.

In order to avoid over-dependence on emergency assistance from external areas, emergency operating procedures in the external areas are not modeled. Capacity of the external systems is further adjusted so that the interconnected LOLE value of the external areas 0 (Ontario, New England, Hydro Quebec, and PJM) is not less than 0.10 and not greater than 0.15 for the year 2015. The level of load and generation are frozen in the remaining years. The LOLE for the external systems will generally increase consistent with the increase in NYCA LOLE which results from the load growth over the Study Period. The increase is higher than in previous RNAs because of the increased binding on Dysinger East and Central East Group.

4.2.4. System Stability Assessment The 2010 NYISO Comprehensive Area Transmission Review (CATR), which was completed in June 2011 and evaluated the year 2015, is the most recent CATR. The 2013 NYISO Intermediate Area Transmission Review evaluated the year 2018 and was completed in June 2014. The stability analyses conducted as part of the 2010 and 2013 ATRs in conformance with the applicable NERC standards, NPCC criteria, and NYSRC Reliability Rules found no stability issues (criteria violations) for summer peak load and light load conditions.

NYISO 2014 Reliability Needs Assessment 30

4.3. Reliability Needs Summary After determining that the LOLE criterion would be violated beginning in 2019 and continuing through 2024, the LOLE for the bulk power system for those years was calculated with two additional cases. The first is NYCA Thermal with all NYCA internal transfer limits set at thermal (not voltage) limits to determine whether the system was adequate to deliver generation to the loads without the voltage constraints. The second is the NYCA free flow, which was performed with all NYCA internal transfer limits removed. Table 4-8 presents a summary of the results.

Table 4-8: Summary of the LOLE Results - Base, Thermal, and Free Flow Cases 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 NYCA 0.04 0.04 0.06 0.08 0.11 0.13 0.15 0.18 0.22 0.26 NYCA Thermal 0.04 0.04 0.06 0.08 0.11 0.13 0.15 0.18 0.22 0.26 NYCA FreeFlow 0.07 0.07 0.07 0.08 0.08 0.09 In general, an LOLE result above 0.1 days per year indicates that additional resources are required to maintain reliability (adequacy). The results indicate the first year of need for resources (a Reliability Need) is 2019 for the RNA base case. The Reliability Needs can be resolved by adding capacity resources downstream of the transmission constraints or by adding transmission reinforcement to mitigate the constraints.

To determine if transmission reinforcements would be beneficial, the "NYCA Thermal" and a "NYCA Free Flow Test" cases are executed. The first year of need for the free flow sensitivity case is beyond 2024, which means that there is no statewide deficiency, and transmission reinforcement is a potential option to resolving the LOLE violation. In addition, the NYCA Thermal case results indicate that voltage limits are not constraining enough to impact NYCA LOLE.

Additional analysis of the base case results to determine binding hours showed that UPNY-SENY remains among the most constraining interfaces, consistent with the conclusion from the previous RNAs. This indicates that increasing the total resources downstream of UPNY-SENY or increasing the UPNY-SENY transfer limit will be among the most effective options to resolve the LOLE violations. Another aspect of the binding hours determination is to perform a relaxation by increasing the individual constraint limits, one at a time. Increasing the limit on UPNY-SENY by 1,000 MW showed the most movement in NYCA LOLE and the individual Load Zone LOLE. Zonal LOLE went down for all Zones G-K. This test further indicates the potential of transmission reinforcements and gives valuable insight to the most effective locations for the Compensatory MW development shown in Section 4.3.

NYISO 2014 Reliability Needs Assessment 31

Compensatory MW To provide information to the marketplace regarding the magnitude of the resources that are required to meet the BPTF transmission security needs, Table 4-9 contains a summary of the minimum compensatory MW to satisfy the transmission security violations identified in Section 4.2.1.

The compensatory MW identified in Table 4-9 are for illustrative purposes only and are not meant to limit the specific facilities or types of resources that may be offered as Reliability Needs solutions. Compensatory MW may reflect generation capacity (MVA), demand response, or transmission additions.

NYISO 2014 Reliability Needs Assessment 32

Table 4-9: Compensatory MW Additions for Transmission Security Violations 2015 MVA 2015 Min. 2019 MVA 2019 Min. 2024 MVA 2024 Min.

Zone Owner Monitored Element Overload Comp. Overload Comp. Overload Comp.

OMW MW MW A N.Grid Packard-Huntley (#77) 230 (Packard-Sawyer) 5_7 A N.Grid Packard-Huntley (#78) 230 (Packard-Sawyer) 5_7 A N.Grid Huntley-Gardenville (#79) 230 (Huntley-Sawyer) 10 12 A N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 7 9 43 51 B RGE Pannell 345/115 1TR 90 295 B RGE Pannell 345/115 2TR 90 295 B RGE Pannell-Quaker (#914) 115 49 86 17 34 C NYSEG Oakdale 345/115 2TR 12 23 16 30 18 34 30 56 C NYSEG Oakdale 345/115 3TR 10 19 26 35 46 61 48 64 C N.Grid Clay-Lockheed Martin (#14) 28 38 32 43 45 61 84 114 96 130 C N.Grid Clay-Teall (#10) 115 11 15 (Clay-Bartell Rd-Pine Grove)

C N.Grid Clay-Dewitt (#3) 115 6 8 (Clay-Bartell Rd)

C N.Grid Clay 345/115 1TR 73 182 120 299 N.Grid Clay-Woodard (#17) 115 9 15 C

(Euclid-Woodward) 33 54 46 75 C N.Grid S. Oswego-Clay (#4) 115 10 17 13 22 (S. Oswego-Whitaker) _0_17_13_22 E N.Grid Porter-Yahnundasis (#3) 115 7 10 21 30 (Porter-Kelsey) 23 33 E N.Grid Porter-Oneida (#7) 115 2 3 (Porter-W. Utica) 6 8 F N.Grid New Scotland 345/115 1TR 61 141 89 205 267 612 F N.Grid Reynolds 345/115 33 109 39 128 125 427 F-G N.Grid Leeds-Pleasant Valley (#92) 345 49 160 F-G EN.Grid Athens-Pleasant Valley (#91) 345 46 46 152 152 NYISO 2014 Reliability Needs Assessment 33

For resource adequacy deficiencies, the amount and location of the compensatory MW is determined by testing combinations of capacity resources (representing blocks of 50MW of UCAP) located in various load zones until the NYCA LOLE is reduced to 0.1 days per year or less.

The process of calculating compensatory MW values informs developers and policy makers by allowing them to test all resource types in meeting needs, by providing additional information on binding interfaces, and allows for the iterative testing of resources in various locations to meet system needs. The purpose of the analyses is not only to show the level of compensatory MW needed to meet the LOLE criterion, but also the importance of the location chosen for the compensatory MW. The results of the MARS simulations for the RNA base case, and scenarios provide information that can be used to guide the compensatory MW analyses as well. If an LOLE violation is, to some extent, caused by a frequently constrained interface, locating compensatory MW upstream of that load zone will result in a higher level of required compensatory MW to meet resource adequacy requirements. The location of these compensatory MW assumes that there are no impacts on internal zonal constraints or the present interface limits into or out of the Zone(s) being tested. These impacts will be determined for the solutions that will be evaluated in the CRP.

Not all alternatives tested were able to achieve an LOLE of less than or equal to 0.1 days per year. The results of the compensatory MW calculation show that by 2024, a total of 1,150 MW are required to mitigate the reliability criteria violations in the base case.

Table 4-10: Compensatory MW Additions for Resource Adequacy Violations Year Zones for Additions Only in ABCEF Only in G-K Only in J Only in K 2015 - - - -

2016 - - - -

2017 - - - -

2018 - - - -

2019 400 100 100 100 2020 3,900 300 300 300 2021 5,600 500 500 500 2022 7,400 700 700 800 2023 not feasible 950 950 1,100 2024 not feasible 1,150 1,150 1,500 Review of the results indicates that adequate compensatory MW must be located within Zone G through K because of the existing transmission constraints into those Zones. Potential solutions could include a combination of additional transfer capability into Zones G through K from outside those zones and/or resources located within Zones G through K. Further examination of the results reveals that the constraining hours of UPNY-SENY and Dysinger East are increasing over the Study Period. Binding hours for interface below UPNY-SENY are not that NYISO 2014 Reliability Needs Assessment 34

significant in 2024 for the base case, but would increase greatly if significant resources are added exclusively to Zone K.

These results indicate that the total amount of compensatory MW could be located anywhere within SENY; no individual zone has a unique requirement. Although the effectiveness of compensatory MW located in Zones A through F and Zone K diminishes as the transmission constraints to the deficient zones become more binding, these compensatory MW will help to mitigate the statewide LOLE violations. Compensatory MW located in Zones A through F, and assuming equal distribution, is only reasonably effective for 2019, and even then would require four times as much MW to be as effective. The effectiveness diminishes rapidly for future years and becomes non feasible in 2023. For Zone K,the compensatory MW would be as effective up to 500 MW to the year 2021, with a reduction in effectiveness of approximately thirty percent in 2024. The NYISO will evaluate proposed solutions effectiveness in mitigating LOLE violations and any impacts on transfer limits during the development of the 2014 CRP. There are other combinations of compensatory MW that would also meet the statewide reliability criteria, but it is not the intent of this analysis to identify preferred locations or combinations for potential solutions.

The regulated backstop solutions may take the form of alternative solutions of possible resource additions and system changes. Such proposals will provide an estimated implementation schedule so that trigger dates could be determined by the NYISO for purposes of beginning the regulatory approval and development processes for the regulated backstop solutions if market solutions do not materialize in time to meet the reliability needs.

NYISO 2014 Reliability Needs Assessment 35

4.4. Dunkirk Plant Fuel Conversion Sensitivity The Dunkirk plant sensitivity evaluates the NYCA system using the base case assumptions, with the added assumption that the proposed fuel conversion of Dunkirk units #2,

1. 3, and #4, a total of 435 MW, from coal to natural gas is completed prior to summer 2016.

The impact of Dunkirk generation returning to service on the NYCA BPTF 3 was assessed in this sensitivity analysis. The availability of Dunkirk after the fuel conversion project relieves the transmission security thermal violations in Buffalo and Binghamton areas.

The transmission security analysis with Dunkirk not in-service continues to identify several thermal violations on the BPTF for N-i, N-I-0, and N-1-1 conditions under 50/50 coincident peak load forecast conditions. With Dunkirk in-service, the thermal violations observed in the RNA base case in the Western New York region and the Binghamton Area (Oakdale 345/230/115 kV substation) are resolved. In the Central region the overloads observed in the Oswego, Utica, and Syracuse areas are reduced, but not resolved with Dunkirk in-service due to a higher west to east flow, but require further system changes to resolve the overloads. The Capital and Southeast regions are insignificantly impacted with Dunkirk in-service. The voltage violations observed in the RNA base case in the Binghamton and Utica areas are not resolved with Dunkirk in-service because Dunkirk is too far removed geographically to have any substantial effect on these violations.

Table 4-11 provides a summary of the contingency pairs with Dunkirk in-service that result in the highest thermal overload on each violated BPTF element in the Central region under N-i, N-i-0, and N-1-1 conditions under 50/50 coincident peak load conditions. In the second contingency column of Table 4-11, "N/A" corresponds to an N-1 violation and "Base Case" corresponds to an N-i-0 violation. Considering non-coincident zonal peak loading, the overloads listed in Table 4-11 can increase, most notably in the out-years.

3The local transmission projects are modeled appropriately according to PSC Case 12-E-0577 - Proceeding on Motion of the Commission to Examine Repowering Alternatives to Utility Transmission Reinforcements - Materials Presented at October 31, 2013 Technical Conference, presented by National Grid.

NYISO 2014 Reliability Needs Assessment 36

Table 4-11: 2014 RNA 50/50 Forecast Transmission Security Thermal Violations with Dunkirk In-Service For resource adequacy assessment, dynamic limit tables are implemented on two interfaces, Dysinger East and Zone A Group, and the details are included in Appendix D.

Starting in 2019, NYCA LOLE exceeds 0.1, and the return of Dunkirk to service following its fuel conversion does not change the Need Year.

NYISO 2014 Reliability Needs Assessment 37

4.5. Scenarios The NYISO develops reliability scenarios pursuant to Section 31.2.2.5 of Attachment Y of the OATT. Scenarios are variations on the RNA base case to assess the impact of possible changes in key study assumptions which, if they occurred, could change the timing, location or degree of Reliability Criteria violations on the NYCA system during the study period. The following scenarios were evaluated as part of the RNA:

• High Load (Econometric) Forecast (impacts associated with projected energy reductions produced statewide)

" Transmission security assessment using a 90/10 load forecast

" Zonal Capacity at Risk

• Indian Point Plant Retirement assessment

• Stressed Winter Condition assessment 4.5.1. High Load (Econometric) Forecast The RNA base case forecast includes impacts associated with projected energy reductions coming from statewide energy efficiency and retail PV programs. The High Load Forecast Scenario excludes these energy efficiency program impacts from the peak forecast, resulting in the econometric forecast levels, and is shown in Table 3-2. This results in a higher peak load in 2024 than the base case forecast by 2,079 MW. Given that the peak load in the econometric forecast is higher than the base case, the probability of violating the LOLE criterion increases with violations also occurring at any earlier point in time.

The results indicate the LOLE would be 0.08 in 2016 and would increase to 0.13 by 2017 under the high load scenario. If the high load forecast were to materialize, the year of need for resource adequacy would be advanced by two years from 2019 in the base case to 2017 in the high load scenario. The horizon year, 2024, LOLE would increase from 0.26 to 0.81 absent system changes to resolve violations in earlier years.

4.5.2. Zonal Capacity at Risk The base case LOLE does not exceed 0.10 until 2019. Scenario analyses were performed to determine the reduction in zonal capacity (i.e., the amount of capacity in each zone that could be lost) which would cause the NYCA LOLE to exceed 0.10 in each year from 2015 through 2018. The NYISO reduced zonal capacity to determine when violations occur in the same manner as the compensatory MW are added to mitigate resource adequacy violations, but with the opposite impact. The zonal capacity at risk analysis is summarized in Table 4-12.

NYISO 2014 Reliability Needs Assessment 38

Table 4-12: Zonal Capacity at Risk (MW) 2015 2016 2017 2018 Zone A 1,550 1,750 1,450 750 Zone B exceeds zonal resources exceeds zonal resources exceeds zonal resources 450 Zone C 2,200 1,850 1,100 450 Zone D exceeds zonal resources exceeds zonal resources 1,100 450 Zone E exceeds zonal resources exceeds zonal resources exceeds zonal resources 500 Zone F 1,800 1,700 1,050 450 Zones A-F 2,500 2,200 1,300 550 Zone G 650 750 400 150 Zone H 650 750 400 150 Zone I N/A N/A N/A N/A Zones G-I 650 750 400 150 ZoneJ 650 750 400 150 Zone K 550 550 350 150 The zones at risk analyses identify a maximum level of capacity that can be removed without causing LOLE violations. However, the impact of removing capacity on the reliability of the transmission system and the transfer capability are highly location dependent. Thus, in reality, lower amounts of capacity removal are likely to result in reliability issues at specific transmission locations. The study did not attempt to assess a comprehensive set of potential scenarios that might arise from specific unit retirements. Therefore, actual proposed capacity removal from any of these zones would need to be further studied in light of the specific capacity locations in the transmission network to determine whether any additional violations of reliability criteria would result. Additional transmission security analysis, such as N-i-1 analysis, would need to be performed for any contemplated plant retirement in any zone.

4.5.3. Indian Point Retirement Assessment Because its owners submitted license renewal applications on a timely basis, the Indian Point Plant is authorized to continue operations throughout its currently ongoing license renewal processes. This scenario studied the impacts if the Indian Point Plant were instead to be retired by the end of 2015 (the later of the two current license expiration dates). Significant violations of transmission security and resource adequacy criteria would occur in 2016 if the Indian Point Plant were to be retired as of that time. These results were determined using the base case assumptions with the additional change that the Con Edison load was modified to incorporate 125 MW of targeted load reduction projects, consisting of 100 MW of Energy Efficiency and Demand Reduction, and 25 MW of Combined Heat and Power distributed generation.

The Indian Point Plant has two base-load units (2,060 MW total) located in Zone H in Southeastern New York, an area of the State that is subject to transmission constraints that NYISO 2014 Reliability Needs Assessment 39

limit transfers in that area as demonstrated by the reliability violations that arise by 2019 in the base case. Southeastern New York, with the Indian Point Plant in service, currently relies on transfers to augment existing capacity. Consequently, load growth or loss of generation capacity in this area would aggravate constraints.

The transmission security analysis has not materially changed since the 2012 RNA regarding the need year under the Indian Point retirement scenario. The results showed that the shutdown of the Indian Point Plant exacerbates the loading across the UPNY-SENY interface, with the Leeds - Pleasant Valley and Athens - Pleasant Valley 345 kV lines above their LTE ratings in 2016.

Using the base case load forecast adjusted for the Con Edison EE program, LOLE is 0.31 in 2016 with Indian Point Plant retired, which is a substantial violation of the 0.1 days per year criterion. Beyond 2016, the LOLE continues to escalate due to annual load growth for the remainder of the Study Period reaching an LOLE of 1.17 days per year in 2024. The NYCA LOLE is summarized in Table 4-13 below.

Table 4-13: Indian Point Plant Retirement LOLE Results Indian Point Plant Retiremený 2016 2017 2018 i2019 2020 2021 2022 2023 2024 NYCA LOLE 1 0.31 0.40 0.40 0.59 0.67 0.76 0.89 1.03 1.17 Compared with 2012 RNA, the resulting LOLE violations are lower, but continue to substantially exceed the LOLE requirement should the Indian Point Plant retire. Note that with the large loss of capacity, the LOLE violations increase exponentially. Other factors, such as Transmission Owner Transmission Solutions (TOTS), decrease the impact of the loss of capacity, but will not solve the violations.

4.5.4. Transmission Security Assessment Using 90/10 Load Forecast The 90/10 peak load forecast represents an extreme weather condition (e.g. hot summer day). Table 4-14 provides a summary of the 90/10 coincident peak load forecast through the ten-year study period compared to the total resources modeled as available, resulting in the total remaining resources on a year-by-year basis. The resource totals include net purchases and sales, and all available thermal and large hydro units are modeled at 100% of their summer capability. Derates to small hydro, wind, and solar PV are applied consistent with the transmission security base case assumptions.

As shown in Table 4-14, based on the assumptions applied in this analysis, beginning in 2017 there are insufficient resources to meet the minimum 10-minute operating reserve requirement of 1,310 MW 4. Due to insufficient generation represented in the power flow case 4 New York State Reliability Council, "NYSRC Reliability Rules for Planning and Operating the New York State Power System", Version 33, dated April 10, 2014 NYISO 2014 Reliability Needs Assessment 40

to meet the minimum operating reserve, loss of source contingencies are not studied in the 2019 case. Starting in 2020, there are insufficient resources to meet the modeled 90/10 peak load; therefore, a transmission security assessment was not performed under 90/10 conditions in the 2024 case. In 2015, there are sufficient resources to meet the minimum operating reserve, and thus, all design criteria contingencies are evaluated.

Table 4-14: 90/10 Peak Load Forecast NYCA Remaining Resources (MW) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total Resources* 38,313 38,332 38,017 38,017 38,017 38,017 38,017 38,017 38,017 38,017 90/10 Peak Load Forecast 36,397 36,764 37,142 37,506 37,870 38,089 38,338 38,592 38,850 39,073 Remaining Resources ] 1,916 1 1,568 875 511 147 -72 -321 -575 -833 -1,056

• Total resources include NYCA generation and net purchases &sales. Assumes 100% availability of thermal and large hydro units; small hydro, wind and solar PV are derated.

The four primary regions of Reliability Needs due to transmission security violations identified in the RNA base case are exacerbated under 90/10 coincident peak load conditions.

Table 4-15 provides a summary of the contingency pairs that result in the highest thermal overload on BPTF elements that are not observed under 50/50 coincident peak load conditions.

Table 4-16 shows that increased load growth across the state exacerbates the violations identified in the RNA base case. These reliability needs are generally driven by recent and proposed generator retirements/mothballs combined with higher levels of load growth. For both tables, in the second contingency column "N/A" corresponds to a violation occurring under N-1 conditions and "Base Case" corresponds to a violation under an N-1-0 conditions.

While the 90/10 peak load forecast does result in additional overloads, those overloads occur in the same four primary regions of Reliability Needs identified in the 50/50 peak load base case. As shown in Table 4-16, the increased peak load would also result in the earlier occurrence of the Reliability Needs identified in the 50/50 peak load base case. Although the Leeds - Pleasant Valley 345 kV lines are not overloaded in 2015 under the conditions studied, those lines are loaded to 98% of the LTE rating under 90/10 peak load N-1-1 conditions. Any significant reduction of generation or imports in Southeast New York in 2015 would result in an overload on Leeds - Pleasant Valley 345 kV for the evaluated 90/10 peak load conditions.

NYISO 2014 Reliability Needs Assessment 41

Table 4-15: 90/10 Transmission Security Violations Not Observed Under 50/50 Load Conditions Normal LTE STE 2015 2019 First Contingency Second Contingency Zone Owner Monitored Element (kV) Rating Rating Rating Flow Flow (kV) (kV)

(MVA) (MVA) (MVA) (MVA) (MVA)

A N.Grid Niagara-Packard (#61) 230 620 717 841 738 Oswegovolney (#12) T:62&BP76 345 A N.Grid Niagara-Packard (#62) 230 620 717 841 801 Oswego-Volney (#12) T:61&64 345 A N.Grid Niagara 230/115 AT2 192 239 288 264 Niagara-Packard (#61) SB Packard 230 230 B RGE Pannell 345/115 3TR 255 319 336 258 L/O Ginna Base Case 277 Niagara-Robinson Rd Base Case B RGE Station 82-Mortimer 115 258.1 357.9 410.4 (#64) 345 388 L/O Ginna SB Pannell 345 B RGE Station 80 345/115 2TR 330 415 478 444 Station 80 345/115 5TR SB Station 80 345 B RGE Station 80 345/115 5TR 462 567 630 636 Station 80 345/115 2TR SB Station 80 345 C N.Grid Clay 345/115 2TR 478 637 794 695 Clay 345/115 1TR SB Oswego 345 C N.Grid Clay-Dewitt (#3) 115 116 120 145 138 Clay-Dewitt SB Oswego 345 (Bartell Rd-Pine Grove) (#13) 345 C N.Grid Clay-Woodard (#17) 115 220 252 280 260 Clay-Lockheed Martin SB Lafayette 345 (Clay-Euclid) (#14) 115 C N.Grid Clay-Lighthouse Hill (#7) 115 108 108 108 123 Clay 345/115 1TR SB Clay 345 (Lighthouse Hill-Mallory) 1 C NYSEG Watercure 345/230 1TR 440 540 600 568 Oakdale 345/115 2TR SB Oakdale 345 E N.Grid Porter-Yahnundasis (#3) 115 116 120 145 123 Clay-Dewitt SB Oswego 345 (W. Utica-Walesville) 1 (#13) 345 NYISO 2014 Reliability Needs Assessment 42

Table 4-16: 50/50 Transmission Security Violations Exacerbated Under 90/10 Load Conditions Normal LTE STE 2015 2019 First Contingency Zone Owner Monitored Element (kV) Rating Rating Rating Flow Flow (kV) Second Contingency (kV)

(MVA) (MVA) (MVA) (MVA) (MVA)

A N.Grid Packard-Huntley (#77) 230 556 644 704 663 Packard-Huntley (#78) 230 SB Robinson Rd. 230 (Packard-Sawyer)

Packard-H untley (#78) 230 A N.Grid (Packard-Sawyer) 556 644 746 645 663 Packard-Huntley (#77) 230 SB Robinson Rd. 230 A N.Grid Huntley-Gardenville (#79) 230 566 654 755 661 672 Huntley-Gardenville SB Robinson Rd. 230 (Huntley-Sawyer) (#80) 230 662 Huntley-Gardenville N/A

(#79) 230 568 Huntley-Gardenville Base Case N.Grid Huntley-Gardenville (#80) 230 566 654 755230 (Huntley-Sawyer) 692 Robinson Rd.-Stolle Rd. Huntley-Gardenville

(#65) 230 (#79) 230 Stolle Rd.-Gardenville Huntley-Gardenville

(#66) 230 (#79) 230 247 L/O Ginna Base Case B RGE Pannell

____414345/115 1TR 228 282 336 L/O Ginna SB Pannel1345 247 L/O Ginna Base Case 414 L/O Ginna SB Pannel1 345 Pannell 345/115 2TR 228 282 336 B RGE 293 Station 80-Pannell SB Pannell 345 (RP-1) 345 B RGE Pannell-Quaker (#914) 115 207.1 246.9 284.8 316 L/O Ginna Pannell 345/115 3TR 583 SB Oakdale 345 N/A C NYSEG Oakdale 345/115 2TR 428 556 600 478 491 Oakdale 345/115 3TR Base Case 637 688 Fraser 345/115 2TR SB Oakdale 345 472 484 Oakdale 345/115 2TR Base Case C NYSEG Oakdale 345/115 3TR 428 556 600 618 Watercure 345/115 1TR SB Oakdale 345 587 Oakdale 345/115 2TR SB Oakdale 345 162 184 SB Oswego 345 N/A C N.Grid Clay-Lockheed 115Martin (#14) 116 120 145 134 161 Elbridge 345/115 1TR Base Case 198 234 Clay-Wood (#17) 115 SB Lafayette 345 C N.Grid Clay-Teall (#10) 115 Clay-Dewitt SB Oswego 345

__N__rid (Clay-Bartell Rd-Pine Grove) 116 120 145 149 (#13) 345 C N.Grid Clay-Dewitt (#3) 115 116 120 145 151 Clay-Dewitt(#13) 345 C N.Grid (Clay-Bartell Rd) Clt(#13)345 SB Oswego 345 C N.Grid Clay 345/115 1TR 478 637 794 736 Oswego-Elbridge-Lafayette SB Clay 345 478 637 794 778 (#17) 345 200 SB Lafayette 345 N/A C N.Grid (Euclid-Woodward) 174 174 174 201 240 Clay-Lockheed Martin SB Lafayette 345

(#14) 115 C N.Grid Clay-S. Oswego (#4) 115 C_ N.Grid (S. Oswego-Whitaker) 104 104 104 120 121 Clay 345/115 1TR SB Clay 345 123 132 SB Oswego 345 N/A E N.Grid Porter-Yahnundasis (#3) 115 116 120 145 129 Porter-Oneida (#7) 115 Base Case (Porter-Kelsey) 147 155 Clay-Dewitt SB Oswego 345

(#13) 345 E N.Grid Porter-Oneida (#7) 115 116 120 145 129 140 Clay-Dewitt SB Oswego 345 (Porter-W. Utica) (#13) 345 F N.Grid New Scotland 345/115 1TR 458 570 731 707 L/O Bethlehem New Scotland 345/115 2TR F N.Grid Reynolds 345/115 459 562 755 562 L/O Bethlehem Base Case F-G N.Grid Leeds-Pleasant Valley (#92) 1331 1538 1724 1711 Athens-Pleasant Valley T:41&33 345 (#91)345 F-G N.Grid Athens-Pleasant Valley (#91) 1331 1538 1724 1695 Leeds-Pleasant Valley T:41&33 345 (#92) 345 NYISO 2014 Reliability Needs Assessment 43

4.5.5. Stressed Winter Condition Assessment Five major cold snaps were experienced during the 2013-2014 winter season, including three polar vortex events that chilled large swaths of the Eastern Interconnection and the remainder of the United States. During this time the NYISO set a new winter peak of 25,738 MW while neighboring ISOs and utilities concurrently set their own record winter peaks during the month of January as well. The extreme winter weather conditions resulted in high load conditions, transmission and generation derates, and gas pipeline constraints.

The widespread impact reduced the ability of neighboring areas to provide assistance to New York. Highlights of the peak day recorded on January 7, 2014 follow:

5

• On January 7, the NYISO set a new record winter peak load of 25,738 MWs.

• 25,541 MW -- Prior record winter peak load set in 2004

• 24,709 MW -- "50/50" forecast winter peak for 2013-14

• 26,307 MW -- "90/10" forecast winter peak for 2013-14

• Many other ISOs and utilities set record Winter Peaks, including PJM, MISO, TVA, and Southern Company; although NYCA did not lose the ability to provide and receive emergency assistance from neighboring pools. The record shows that NYCA exported power to PJM while importing from HQ, ISO-NE and IESO.

• The NYISO experienced 4,135 MW of generator derates over the peak hour.

• The NYISO activated demand response resources on a voluntary basis in all zones to maintain operating reserve criteria; however, because the 21-hour prior notification was not provided demand response participation was limited.

• The NYISO issued a NERC Energy Emergency Alert 1 indicating that the NYISO was just meeting reserve requirements.

• The NYISO issued public appeals for customers to curtail non-essential use.

Based upon this experience, the scenario was constructed to gauge the amount of capacity that could be lost from the NYCA while restricting the ability to receive assistance from our neighbors. Capacity was removed from all NYCA zones proportional to zonal capacity at each external assistance level until an annual LOLE violation was observed for the year.

Additionally, the hourly loads in the MARS model for the month of January 2015 were modified to reflect actual January 2014 loads for all three input load shapes. The experienced January 2014 peak was normalized to 50/50 conditions and the load forecast uncertainty (LFU) bins for winter conditions were updated for the MARS model. These values are shown in Table 4-17.

5 This value is the actual load prior to adjustment for demand response that was activated at the time of the system winter peak.

NYISO 2014 Reliability Needs Assessment 44

Table 4-17: Derivation of 2014 NYCA Winter LFU Zones Bin 1 Bin 2 Bin 3 Bin 4 Bin 5 Bin 6 Bin 7 A 1.136 1.090 1.045 1.000 0.955 0.910 0.864 B 1.135 1.090 1.045 1.000 0.955 0.910 0.865 C 1.136 1.091 1.045 1.000 0.955 0.909 0.864 D 1.170 1.113 1.057 1.000 0.943 0.887 0.830 E 1.136 1.091 1.045 1.000 0.955 0.909 0.864 F 1.136 1.090 1.045 1.000 0.955 0.910 0.864 G 1.136 1.090 1.045 1.000 0.955 0.910 0.864 H 1.158 1.105 1.053 1.000 0.947 0.895 0.842 1 1.158 1.105 1.053 1.000 0.947 0.895 0.842 J 1.158 1.105 1.053 1.000 0.947 0.895 0.842 K 1.180 1.120 1.060 1.000 0.940 0.880 0.820 NYCA 1.151 1.101 1.051 1.000 0.949 0.899 0.849 Probability 0.0062 0.0606 0.2417 0.383 0.2417 0.0606 0.0062 In order to model a statewide LOLE violation in 2015, the annual LOLE of 0.06, as observed in Table 4-7, was subtracted from the reliability criterion level of 0.1 days/yr to reach a target LOLE of 0.04 for this scenario. January 2015 was then simulated with multiple levels of NYCA capacity loss and external import capability reduction until the target January LOLE was observed.

Many factors can impact the emergency assistance from neighboring control areas; therefore a simple approach was adopted and applied to this scenario. By creating a NYCA import interface that was defined as encircling all of NYCA, it became possible to limit the external import capability by defining a MW flow limit. In the conservative case that NYCA is unable to receive emergency assistance from any of the neighboring areas, it would take a capacity loss of 7,250 MW of resources in an extreme weather condition to result in an annual LOLE violation in year 2015.

Table 4-18: Simultaneous NYCA Import Limits and MW Lost in Stressed Winter Scenario Limit (MW) MW Lost 4,000 11,300 2,000 9,300 0 7,250 NYISO 2014 Reliability Needs Assessment 45

5. Impacts of Environmental Regulations 5.1. Regulations Reviewed for Impacts on NYCA Generators The 2012 RNA identified new environmental regulatory programs that could impact the operation of the Bulk Power Transmission Facilities. These state and federal regulatory initiatives cumulatively will require considerable investment by the owners of New York's existing thermal power plants in order to comply. The following programs are reviewed in the 2014 RNA:

a) NOx RACT: Reasonably Available Control Technology (Effective July 2014) b) BART. Best Available Retrofit Technology for regional haze (Effective January 2014) c) MATS: Mercury and Air Toxics Standard for hazardous air pollutants (Effective April 2015) d) MRP: Mercury Reduction Program for Coal-Fired Electric Utility Steam Generating Units

- Phase II reduces Mercury emissions from coal fired power plants in New York beginning January 2015 e) CSAPR: Cross State Air Pollution Rule for the reduction of S02 and NOx emissions in 28 Eastern States. The U.S. Supreme Court has upheld the CSAPR as promulgated by USEPA.

The Supreme Court remanded the rule to the District Circuit Court of Appeals for further proceedings, and eventual implementation by the USEPA.

f) CAIR: Clean Air Interstate Rule will continue in place until CSAPR is implemented g) RGGI: Regional Greenhouse Gas Initiative Phase II cap reductions started January 2014 h) C02 Emission Standards: NSPS scheduled to become effective June 2014, Existing Source Performance Standards may be effective in 2016 i) RICE: NSPS and NESHAP - New Source Performance Standards and Maximum Achievable Control Technology for Reciprocating Internal Combustion Engines (Effective July 2016).

j) BTA: Best Technology Available for cooling water intake structures (Effective upon Permit Renewal)

The NYISO has determined that as much as 33,200 MW in the existing fleet (88% of 2014 Summer Capacity) will have some level of exposure to the new regulations.

NYISO 2014 Reliability Needs Assessment 46

5.1.1. Reasonably Available Control Technology for NOx (NOx RACT)

The NYSDEC has promulgated revised regulations for the control of Nitrogen Oxides (NOx) emissions from fossil-fueled electric generating units. These regulations are known as NOx RACT (Reasonably Available Control Technology). In New York, 221 units with 27,100 MW of capacity are affected. The revised emission rate limits become effective on July 1, 2014.

There are three major NOx RACT System Averaging "bubbles" in Zone J: TC Ravenswood (TCR Bubble), NRG Arthur Kill- Astoria Gas Turbines (NRG Bubble), and USPowerGen Astoria-Narrows and Gowanus Gas Turbines (USPowerGen Bubble). Historically the boilers have demonstrated the ability to operate at emission rates that are below the presumptive emission rates in the NOx RACT regulation. On the other hand, the older gas turbines in Zone J frequently operate at emission rates in excess of the presumptive limits. With planning and careful operation, the units within the bubbles can be operated in a manner such that the higher emission rates from the gas turbines can be offset by the lower emission rates from the boilers. Table 5-1 below has the presumptive NOx RACT emission limits that were in effect until June 30, 2014. Table 5-2 has the new presumptive emission limits effective starting from July 1, 2014. The emission limits for the gas turbines remain unchanged. It is apparent that the ability of the boilers to offset emissions from the gas turbines will be significantly reduced with the new limits.

Table 5-1: NOx RACT Limits Effective until June 30, 2014 Boiler Type (Pounds/mmBTU or #/mmBTU)

Tangential Wall Cyclone Stoker Gas Only 0.20 0.20 -

Gas/Oil 0.25 0.25 0.43 Coal Wet 1.00 1.00 0.60 Coal Dry 0.42 0.45 0.30 Table 5-2: New NOx RACT Limits Effective Starting from July 1, 2014 Boiler Type (Pounds/mmBTU or #/mmBTU)

Fuel Type Fluidized Tangential Wall Cyclone Bed Gas Only 0.08 0.08 -

Gas/Oil 0.15 0.15 0.20 Coal Wet 0.12 0.12 0.20 -

Coal Dry 0.12 0.12 - 0.08 Using publicly available information from USEPA and USEIA, estimated NOx emission rates can be determined across the operating spectrum for various combinations of fuels for NYISO 2014 Reliability Needs Assessment 47

specific units greater than 15 MW. Using this information, the NYISO has analyzed potential NOx emissions under the lower NOx RACT standards to determine if the system emission averaging plans can be achieved. The analysis has focused on the peak day July 19, 2013 in Zone J. It appears that compliance with the TC Ravenswood emission plan should be feasible without imposing the operating limits on the affected units.

The analysis of the NRG bubble shows that operation of the complete fleet of gas turbines could be sustained in a manner consistent with the actual operating profile on the peak day. Similarly, supplemental data provided by USPowerGen demonstrates that the fleet of gas turbines could operate in a manner similar to what it did on the peak day in 2013. Given that this analysis is based upon historic performance which occurred when the emission limits were higher, it is possible that the boilers could achieve lower emission rates and therefore the gas turbines could operate for more extended periods.

Conversely, invoking the Loss of Gas Minimum Oil Burn (LOG-MOB) reliability rule requires the boilers under certain conditions to burn residual fuel oil (RFO) which increases NOx emissions and reduces the ability of the boilers to produce necessary offsets. Incremental operation of the boilers on gas during off peak hours could mitigate the impact of increased NOx emissions from LOG-MOB on the reduced hours of operation of the gas turbine.

5.1.2. Best Available Retrofit Technology (BART)

The class of steam electric units constructed between 1963 and 1977 are subject to continuing emission reductions required by the Clean Air Act. In New York, there are 15 units in service with 7,531 MW of summer capacity that are affected. Table 5-3 identifies the new emission limitations in place for these units6.

6 The table is not intended to include all emission limitations.

NYISO 2014 Reliability Needs Assessment 48

Table 5-3: New BART Emission Limits DMNC (1) Particulate Applicable Plants Unit(s) (MW) S02 NOx Matte (MW) Matter 0.15 #/mmBTU; Arthur Kill ST 3 500 024 Hors 24 Hours.

0.15 #/mmBTU for gas, and oil; 0.25 #/mmBTU for Bowline 1, 2 758 0.37% S RFO oil; 24 Hours 0.1/0.2 #/mmBTU Barrett ST 02 196 0.37% S RFO Gas/ Oil; 0.1 #/mmBTU 24 Hours 0.1/0.2 #/mrn BTU Northport 1,2,3,4 1,583 0.7% S RFO Gas/ Oil; 24 Hours Oswego 5,6 1,574 0.75% S RFO 383/665 tons per year Ravenswood ST 01, ST 02 1,693 0.30% S RFO 0.15 #/mmBTU and ST 03 30 Day Roseton 1, 2 1,227 0.55#/mmBTU 0.12#/mmBTU; 0.06 Danskammer 4 237 s23240.09#/mmBTU; or 2 or #/mrnBTU; 24 Hours 24 Hours ou 1 Hour 2014 In-Service 7,531 Notes:

1. Summer capability from 2014 Gold Book

2. Not included in 2014 In-Service total The new BART limits identified in Table 5-3 are not expected to affect availability of these units during times of peak demand.

5.1.3. Mercury and Air Toxics Standards (MATS)

The USEPA Mercury and Air Toxics Standards (MATS) will limit emissions of mercury and air toxics through the use of Maximum Achievable Control Technology (MACT) for Hazardous Air Pollutants (HAP) from coal and oil fueled steam generators with a nameplate capacity of 25 MW or more. MATS will affect 23 units in the NYCA that represent 10,300 MW of nameplate capacity. Compliance requirements begin in March 2015 with an extension through March 2017 for Reliability Critical Units (RCU).

The majority of the New York coal fleet has installed emission control equipment that may place compliance within reach. One coal fired unit in New York is considering seeking an extension of the compliance deadline to March 2017.

NYISO 2014 Reliability Needs Assessment 49

The heavy oil-fired units will need to either make significant investments in emission control technology or switch to a cleaner mix of fuels in order to comply with the proposed standards. Given the current outlook for the continued attractiveness of natural gas compared to heavy oil, it is anticipated that compliance can be achieved by dual fuel units through the use 7

of natural gas to maintain fuel ratios that are specified in the regulation 5.1.4. Mercury Reduction Program for Coal-Fired Electric Utility Steam Generating Units (MRP)

New York State also has a mercury emission limit program for coal fired units. Phase II of the program begins January 1, 2015. The allowable emission limit is half of the MATS standard.

The impact of the MRP requirements is shown below Section 5.2.

5.1.5. Cross State Air Pollution Rule (CSAPR)

The CSAPR establishes a new allowance system for units with at least 25 MW nameplate capacity or more. Affected generators will need one allowance for each ton emitted in a year.

In New York, CSAPR will affect 154 units that represent 25,900 MW of nameplate capacity. The USEPA estimated New York's annual allowance costs for 2012 at $65 million. There are multiple scenarios which show that New York's generation fleet can operate in compliance with the program in the first phase. Compliance actions for the second phase may include emission control retrofits, fuel switching, and new clean efficient generation. The US Supreme Court upheld the CSAPR regulation and remanded the case to the District of Columbia Circuit Court of Appeals to resolve the remaining litigation and work with the USEPA to develop a revised implementation schedule. Further, since the rule was finalized in 2012, two National Ambient Air Quality Standards, for S02 and Ozone, have been promulgated. The USEPA may recognize these new standards, unit retirements, and/ or changes in load and fuel forecasts in updated modeling that may be necessary for implementation of the CSAPR. EPA has filed with the D.C.

Circuit Court of Appeals requesting authority to implement the rule in January 2015.

While the CSAPR is updated and implementation plans are finalized, the Clean Air Interstate Rule (CAIR) remains in effect. CAIR also employs an allowance based system to reduce emissions of S02 and NOx over time. The rule is designed to begin Phase IIon January 1, 2015 with an approximate 50% reduction in emission allowances entering the marketplace.

The CAIR marketplace is currently oversupplied with S02 and NOx emissions allowances, which has resulted in prices that are relatively low. It is expected that the continued operation of CAIR will not impact either the amount of capacity available or the relative dispatch order.

7The MATS regulation provides for an exemption for units that use oil for less than ten percent of heat input annually over a three year period, and less than 15 percent in any given year. The regulation provides for an exemption from emission limits for units that limit oil use to less than the amount equivalent to an eight percent capacity factor over a two year period.

NYISO 2014 Reliability Needs Assessment 50

5.1.6. Regional Greenhouse Gas Initiative (RGGI) and USEPA Proposed Carbon Rules The Regional Greenhouse Gas Initiative established a cap over C02 emissions from most fossil fueled units of 25 MW or more in 2009. Phase II of the RGGI program became effective January 1, 2014 and reduces the cap by 45% to 91,000,000 tons for 2014. Phase II then applies annual emission cap reductions of 2.5% until 2020. One RGGI Allowance is required for each ton of C02 emitted during a three year compliance period. A key provision to keep the allowance and electricity markets functioning is the provision of a Cost Containment Reserve (CCR). If demand exceeds supply at predetermined trigger prices an additional 10,000,000 (5,000,000 in 2014) allowances will be added to the market. Trigger prices are set to rise to

$10/ton in 2017 and escalate at 2.5% annually thereafter. RGGI Inc. modeling analyses show that the trigger prices will be reached on several occasions throughout the period. Coal units may be further handicapped by the cost of carbon emission allowances, which could add up to

$5/MWh in cost compared to older combined cycle units and up to $10/MWh for non-emitting machines.

The USEPA is in the process of promulgating New Source Performance Standards designed to limit C02 emissions from new fossil fueled steam generators and combined cycle units. While the proposed rule would present significant technological challenges for coal fired units; for gas fired units, the rules are generally less stringent than NYSDEC's existing Part 251 emission regulations. USEPA's rule does not apply to simple cycle turbines that limit their sales to the grid to less than one-third of their potential electrical output.

On June 2, 2014, the USEPA proposed a rule to limit C02 emissions from existing power plants by 30% from 2005 levels 8. The rule is designed to lower emission rates from 2012 as measured in terms of # C02/MWh, however, it does allow states to develop mass based systems such as RGGI. The proposal calls for an initial reduction by 2020 while achievement of the final reductions will be required by 2030. State implementation plans can make use of: (i) coal fired plant efficiency improvements; (ii) shifts in dispatch patterns to increase production from natural gas fired combined cycle plants; (iii) increased construction and operation of low and non-emitting generators; and (iv) aggressive deployment of energy efficiency measures.

The proposal calls for the continued operation of existing and completion of new nuclear plants.

8 The proposed rule is extensive in length, broad in scope, and presents a complex approach to establishing base lines and future emission reduction requirements. The comment period closes in mid-October. The rule will be finalized in June of 2015. State Implementation Plans will be developed with public participation over the following year, or three year period if regional plans are proposed. The NYISO analysis will be a continuing effort over the next several years. At important points in the process, reports will be provided to stakeholders identifying the issues of importance to the NYISO.

NYISO 2014 Reliability Needs Assessment 51

5.1.7. RICE: NSPS and NESHAP In January 2013, the USEPA finalized two new rules that apply to engine powered generators typically used as emergency generators. Some of the affected generators also participate in the NYISO's Special Case Resource (SCR) or Emergency Day-ahead Response (EDRP) Programs. EPA finalized National Emission Standards for Hazardous Air Pollutants (NESHAP), and New Source Performance Standards (NSPS), for Reciprocating Internal Combustion Engines (RICE). The new rules are designed to allow older emergency generators that do not meet the EPA's rules to comply by limiting operations in non-emergency events to less than 15 hours1.736111e-4 days <br />0.00417 hours <br />2.480159e-5 weeks <br />5.7075e-6 months <br /> per year. These resources can participate in utility and NYISO emergency demand response programs; however the engine operation is limited to a maximum of 100 hours0.00116 days <br />0.0278 hours <br />1.653439e-4 weeks <br />3.805e-5 months <br /> per year for testing and utility or the NYISO emergency demand response operations for which a Level 2 Energy Emergency Alert is called by the grid operator.

The New York DEC is also developing rules to control emissions of NOx and particulate matter (PM10 and 2.5) from engine driven generators that participate in the EDRP. The proposed rules will apply to all such generators above 150 kW in New York City and above 300 kW in the remainder of the State not already covered by a Title V Permit containing stricter NOx and PM limits. Depending on their specific types, it appears that engines purchased since 2005 and 2006 should be able to operate within the proposed limits. Older engines can be retrofitted with emission control packages, replaced with newer engines, or cease participation in the demand response programs. The proposed rule is generally comparable to rules already in place in a number of other states within the Ozone Transport Region. NYSDEC's estimated compliance schedule is still developing, with a currently contemplated compliance schedule of mid -2016.

5.1.8. Best Technology Available (BTA)

The USEPA has proposed a new Clear Water Act Section 316 b rule providing standards for the design and operation of power plant cooling systems. This rule will be implemented by NYSDEC, which has finalized a policy for the implementation of the Best Technology Available (BTA) for plant cooling water intake structures. This policy is activated upon renewal of a plant's water withdrawal and discharge permit. Based upon a review of current information available from NYSDEC, the NYISO has estimated that between 4,200-7,200 MW of nameplate capacity could be required to undertake major system retrofits, including closed cycle cooling systems. One high profile application of this policy is the Indian Point nuclear power plant.

Table 5-4 shows the current status of plants under consideration for BTA determinations.

NYISO 2014 Reliability Needs Assessment 52

Table 5-4: NYSDEC BTA Determinations (as of March 2014)

Plant Status Arthur Kill BTA Decision made, monitoring Astoria BTA Decision made, installing equipment Barrett Repowering Study underway, otherwise closed cycle Bowline BTA Decision made, capacity factor limited to 15% over 5 years Brooklyn Navy Yard BTA Decision made, installing upgrades Cayuga BTA Decision made, install screens, UPP accepted, Sierra Club challenged Dunkirk BTA Decision made, monitoring East River BTA installed, monitoring Fitzpatrick NYSDEC ready to issue BTA determination for offshore intake and screens Fort Drum BTA installed, monitoring Ginna BTA Decision 2015 or later BTA Decision capacity factor limited and variable speed pumps, NRG and Sierra Club have requested hearings Indian Point Hearings, BTA Decision 2016 at the earliest Nine Mile Pt 1 Possible BTA determination this year Northport Possible BTA determination next year Oswego Lower priority for NYSDEC, possibly capacity factor limited Port Jefferson BTA installed, monitoring Ravenswood BTA installed, monitoring Roseton In hearings Somerset Possible BTA determination this year The owners of Bowline have accepted a limit on the duration of operation of the plant as their compliance method. NYSDEC's BTA Policy allows units to operate with 15% capacity factor averaged over a five year period provided that impingement goals are met and the plant is operated in a manner that minimizes entrainment. Close inspection of the 2014 RNA MARS simulations shows that Bowline plant was committed at less than the 15% capacity factor limitation; thus imposing the BTA capacity factor limit does not degrade the NYCA LOLE.

More recently, a draft State Pollution Discharge Elimination System permit was issued for public comment for Huntley Station. The draft contained the 15% capacity factor limitation over the next five year period following finalization of the permit. If the proposed operating limitation were to become effective, the output of the plant would need to be significantly reduced over the five year period following finalization of the Huntley SPDES permit, as compared to recent production. The loss of output from Huntley could reduce transfer limits in the area, thereby altering production at Niagara and limiting imports from Ontario. To reflect the impact, the MARS topology for 2014 RNA implemented dynamic limit tables for Dysinger East and Zone A Group interfaces; details are described in Appendix D.

NYISO 2014 Reliability Needs Assessment 53

5.2. Summary of Environmental Regulation Impacts Table 5-4 summarizes the impact of the new environmental regulations. Approximately 33,800 MW of nameplate capacity may be affected to some extent by these regulations.

Compliance plans are in place for NOx RACT, BART, and RGGI. Reviewing publicly available information from USEPA and USEIA, most generators affected by MATS and MRP have demonstrated operations with emission levels consistent with the new regulations. BTA determinations are the result of extensive studies and negotiations that in most cases have not resulted in decisions requiring conversion to closed cycle cooling systems. These determinations are made on a plant specific schedule. The Indian Point Nuclear Plant BTA determination is the subject of an extensive hearing and Administrative Law Judge determination process that will continue through 2015.

Table 5-5: Impact of New Environmental Regulations Compliance Approximate Program Status Deadline Nameplate Capacity 27,100 221 utMW NOx RACT In effect July 2014 (221 units) 8,400 uMW t In effect January 2014 (15 BART (15 units)

MATS In effect April 10,300 MW 2015/2016/2017 (23 units) 1,500 (6 ut MW MRP In effect January 2015 (6 units)

Supreme Court 26,300 MW CSAPR validated USEPA TBD (160 units) rule 25,800 MW In effect In effect (54 u t RGGI (154 units)

BTA In effect Upon permit 16,400 MW Renewal (34 units)

NYISO 2014 Reliability Needs Assessment 54

Using publicly available information from USEPA and USEIA, the NYISO further identified the units that may experience significant operational impacts from the environmental regulations.

The summary is provided below and in Table 5-6:

" NOx RACTprogram: It appears that compliance with each of the three NOx bubble limitation is achievable.

" BART limits: The Oswego Units #5 and #6 are estimated to be able to start and operate at maximum output for many more days than they have been committed historically.

Accordingly, imposing these estimated BART operating limits does not change NYCA LOLE in 2014 RNA.

• MATS/MRP Program:Given the current outlook for the continued attractiveness of natural gas compared to heavy oil, it is anticipated that compliance can be achieved by dual fuel units through the use of natural gas to maintain fuel ratios that are specified in the regulation.

• RGGI: The impact of RGGI may increase the operating cost of all coal units. Should all coal units retire, loss of nearly 1,500 MW in upstate would cause LOLE to exceed 0.1/day in year 2017 or before, and cause reliability violations.

Table 5-6: Summary of Potentially Significant Operational Impacts due to New Environmental Regulations Program Status Significant Future Operations Potentially Capacity Operational Impacts Impacted (MW)

Three NYC NOx Arthur Kill, Astoria Gas Turbines, NOx RACT July 2014 bubbles Astoria, Narrows, Gowanus, 5,300 Ravenswood Oswego 5 & 6: limited number of days BART In effect Emission caps go operat iat ted 1,600 for operations at peak Astoria, Ravenswood, Northport, MATS/MRP April 2015/6/7 Oil use limits Barrett, Port Jefferson, Bowline, 8,800 Roseton, Oswego CSAPR Uncertain Cost increases Uncertain RGGI In effect Cost increases up to All Coal units 1,450

$10/MWH Permit Potential retirements BTA Renewa or capacity factor Indian Point, Bowline, and Huntley 3,200 limits NYISO 2014 Reliability Needs Assessment 55

6. Fuel Adequacy 6.1. Gas Infrastructure Adequacy Assessment As the plentiful low cost gas produced in the Marcellus Shale makes its way into New York, the amount of electrical demand supplied and energy produced by this gas have steadily increased. The benefits of this shift in the relative costs of fossil fuels include reduced emissions, improved generation efficiency, and lower electricity prices. These benefits, however, are accompanied by a reduction in overall fuel diversity.in NYCA. This reduction in fuel diversity has led to the Eastern Interconnection Planning Collaborative (EIPC) gas and electric infrastructure study and FERC proceedings addressing gas and electric system communications, and market coordination, all of which are intended to improve the knowledge base for electric and gas system planners, operators, and policy makers.

The NYISO has recently completed a study that examined the ability of the regional natural gas infrastructure to meet the reliability needs of New York's electric system.

Specifically the study provided a detailed review of New York gas markets and infrastructure, assessed historic pipeline congestion patterns, provided an infrastructure and supply adequacy forecast and examined postulated contingency events. Importantly, the study concluded there will be no unserved gas demand for generation on the interstate gas pipeline systems throughout the next five years, even with the retirement of Indian Point and related replacement of that generation with 2,000 MW of new capacity in the Lower Hudson Valley.

The study did not examine the impact of intra-state pipeline deliverability constraints on the LDC systems. The study did document increasing congestion on key pipelines in New York resulting from increased gas demand in New England and to a lesser degree by in- state demand increases for generation. Gas fired generators located on constrained pipeline segments may continue to experience gas supply curtailments over the study horizon. Gas pipeline expansions under construction and planned will materially increase delivery capability and result in reduced delivery basis and future interruptions. The market for gas supply forward contracts has already made significant adjustment to recognize the future completion of these projects. The price difference between Henry Hub and the NYC represented by the Transco NY 6 delivery point has disappeared except for a small number of incidences in the winter months. Moreover, New York is fortunate to have dual fuel capability installed at the majority of its gas fired generators.

The NYISO conducted surveys in October 2012 and October 2013 to verify dual fuel capability. Based on the October 2013 survey results, it was determined that of 18,011 MW (Summer DMNC) dual fuel generators reported in the 2013 Gold Book, 16,983 MW have permits that allow them to operate on oil. In addition, there were 2,505 MW (Summer DMNC) oil-only generators reported in the 2013 Gold Book; based on the October 2013 Survey results, this has increased to 2,579 MW (Summer DMNC). Thus, the summer capability of oil and dual NYISO 2014 Reliability Needs Assessment 56

fuel units with oil permits totals 19,562 MW. These oil and dual fuel facilities represent a strong fleet of resources that can respond to delivery disruptions on the gas pipeline system during both summer and winter seasons.

6.2. Loss of Gas Supply Assessment Loss of Gas Supply Assessment was conducted as part of the NYISO 2013 Area Transmission Review (ATR). The findings of the assessment are summarized below.

Natural gas-fired generation in NYCA is supplied by various networks of major gas pipelines, as described in Appendix 0 of the 2013 ATR. NYCA generation capacity has a balance of fuel mix which provides operational flexibility and reliability. Several generation plants have dual fuel capability. Based on the NYISO 2013 Gold Book, 8% of the generating capacity is fueled by natural gas only, 47% by oil and natural gas, and the remainder is fueled by oil, coal, nuclear, hydro, wind, and other.

The loss of gas supply assessment was performed using the winter 2018 50/50 forecast of the coincident peak load. The power flow base case was developed by assuming all gas only units and dual fuel units that do not have a current license to operate with the alternative fuel are not available due to a gas supply shortage. The total reduction in generating capacity was 4,251 MW; however, only 2,777 MW had to be redispatched due to the modeling assumptions in the base case. N-1 and N-1-1 thermal and voltage analysis was performed using the TARA program monitoring bulk system voltages and all 115 kV and above elements for post-contingency LTE thermal ratings.

No thermal or voltage violations are observed in addition to those already identified for the summer peak conditions for this extreme system condition. The only stability issue noted for this gas shortage scenario was an undamped response to a single-line to ground stuck breaker fault at Marcy on the Marcy - Volney 345kV line. Possible mitigation would be to balance the VAr flow from each plant at the Oswego complex or redispatching the Oswego complex.

The capacity of 2014-2015 winter is summarized in Table 6-1 below. In the event that NYCA loses gas-only units, the remaining capacity is sufficient to supply the load. However, in the extreme case that NYCA loses gas-only units, and simultaneously the oil inventory of all dual-fuel units has been depleted, a total capacity of 16,879 MW would be unavailable. As the consequence of such an extreme event, the remaining generation would not be sufficient to supply NYCA load.

NYISO 2014 Reliability Needs Assessment 57

Table 6-1: Loss of Gas Assessment for 2014-2015 Winter 2015 Winter Capacity (MW)

Peak Load 24,737 NYCA winter capacity 40,220 If gas-only units lose gas supply Gas-only capacity -3,568 Total remaining capacity 36,652 If gas-only and dual-fuel units lose gas supply and deplete oil Gas only capacity -3,568 Dual-fuel capacity -16,879 Total remaining capacity 19,7731 6.3. Summary of Other Ongoing NYISO efforts The NYISO has been working with stakeholders and other industry groups to identify and address fuel adequacy concerns. Most notably, the Electric Gas Coordination Working Group (EGCWG) and EIPC are actively studying related issues. The efforts are summarized in this section.

At EGCWG, the efforts are focusing on gas-electric coordination issues within NYCA. The NYISO retained Levitan & Associates (LAI) to prepare the following reports:

• "Fuel Assurance Operating and Capital Costs for Generation in NYCA" (Task 1)

• The "NYCA Pipeline Congestion and Infrastructure Adequacy Assessment" (Task 2)

The final study reports have been completed and are posted on the NYISO website 9. The consolidated network of interstate pipelines serving New York is shown in Figure 6-1.

9Task 1 final report: http://www.nviso.com/public/committees/documents.isp?com=bic egcwg&directory=2013-06-17 Task 2 final report:

http://www.nviso.com/public/webdocs/markets operations/committees/bic egcwg/meeting materials/2013 23/Levitan%2OPipeline%20Congestion%20and%2OAdequacv%20Report%20Sep23%20-0

%2fFinilO/n? ACFIoAnRprdlrtpd ndf NYISO 2014 Reliability Needs Assessment 58

Figure 6-1: Natural Gas Pipeline Network in NYCA NYISO 2014 Reliability Needs Assessment 59

At EIPC, six Participating Planning Authorities (PPAs) are actively involved in the Gas-Electric System Interface Study, which includes ISO-NE, NYISO, PJM, IESO, TVA, and MISO (includes the Entergy system). The efforts are focusing on gas-electric coordination issues in the region across the six PAs. The study has four targets:

1. Develop a baseline assessment that includes description of the natural gas-electric system interface(s) and how they impact each other.

2. Evaluate the capability of the natural gas system(s) to supply the individual and aggregate fuel requirement from the electric power sector over a five and ten year study horizon.

3. Identify contingencies on the natural gas system that could adversely affect electric system reliability and vice versa.

4. Review operational and planning issues and any changes in planning analysis and operations that may be impacted by the availability or non-availability of dual fuel capability at generating units.

Target 1 has been completed, and the report is posted on EIPC website1 °. Target 2 is currently underway, while Targets 3 and 4 are in the planning stage.

10http://www.eipconline.com/Gas-ElectricDocuments.html NYISO 2014 Reliability Needs Assessment 60

7. Observations and Recommendations The 2014 Reliability Needs Assessment (RNA) assesses resource adequacy and both transmission security and adequacy of the New York Control Area (NYCA) bulk power transmission system from year 2015 through 2024, the study period of this RNA. The 2014 RNA identifies transmission security needs in portions of the bulk power transmission system, and a NYCA LOLE violation due to inadequate resource capacity located in Southeast New York (SENY).

The NYISO finds transmission security violations beginning in 2015, some of which are similar to those found in the 2012 RNA. The NYISO also identifies resource adequacy violations, which begin in 2019 and increase through 2024, if they are not resolved.

For transmission security, there are four primary regions with reliability needs:

Rochester, Western & Central New York, Capital Region, and Lower Hudson Valley & New York City. These reliability needs are generally driven by recent and proposed generator retirements or mothballing combined with load growth. The New York transmission owners have developed plans through their respective local transmission planning processes to construct transmission projects to meet not only the needs identified in the previous RNA, but also any additional needs occurring since then and prior to this RNA. These transmission projects, subject to inclusion rules, have been modeled in the 2014 RNA base case. Reliability needs identified in this report exist despite the inclusion of the transmission projects in the base case.

The transmission security needs in the Buffalo and Binghamton areas are influenced by whether the fuel conversion project can be completed for the Dunkirk Plant for it to return to service by 2016. As a result, this project was addressed as a sensitivity and the impact of the results are noted with the base case reliability needs.

While resource adequacy violations continue to be identified in SENY, the 2014 RNA is projecting the need year to be 2019, one year before the need year identified in the 2012 RNA.

The most significant difference between the 2012 RNA and the 2014 RNA is the decrease of the NYCA capacity margin (the total capacity less the peak load forecast).

The NYISO expects existing and recent market rule changes to entice market participants to take actions that will help meet the resource adequacy needs in SENY, as identified by the 2012 RNA and the 2014 RNA. The resources needed downstream of the upstate New York to SENY interface is approximately 1,200 MW in 2024 (100 MW in 2019),

which could be transmission or capacity resources. The new Zones G-J Locality will provide market signals for resources to provide service in this area. Capacity owners and developers are taking steps to return mothballed units to service, restore units to their full capability, or build new in the Zones G-J Locality. If some or all of these units return to service or are developed, the reliability need year would be postponed beyond 2019. In addition, New York State government is promoting transmission development to relieve the transmission constraints between upstate New York and SENY, which could also defer the need for NYISO 2014 Reliability Needs Assessment 61

additional resources. The NYISO anticipates that such potential solutions will be submitted for evaluation during the solutions phase of the Reliability Planning Process (RPP) and included in the upcoming 2014 Comprehensive Reliability Plan (CRP) if appropriate.

As a backstop to market-based solutions, the NYISO employs a process to define responsibility should the market fail to provide an adequate solution to an identified reliability need. Since there are transmission security violations in Zones A, B, C, E, and F within the study period, the transmission owners (TOs) in those zones (i.e., National Grid, RGE, and NYSEG) are responsible and will be tasked to develop detailed regulated backstop solutions for evaluation in the 2014 CRP.

Given the limited time between the identification of certain transmission security needs in this RNA report and their occurrence in 2015, the use of demand response and operating procedures, including those for emergency conditions, may be necessary to maintain reliability during peak load periods until permanent solutions can be put in place. Accordingly, the NYISO expects the TOs to present updates to their Local Transmission Owner Plans for these zones, including their proposed operating procedures pending completion of their permanent solutions, for review and acceptance by the NYISO and in the 2014 CRP.

The NYISO identified reliability needs for resource adequacy in SENY starting in the year 2019; therefore, the TOs in SENY (i.e., Orange & Rockland, Central Hudson, New York State Electric and Gas, Con Edison, and LIPA) are responsible to develop the regulated backstop solution(s). The study also identified a transmission security violation in 2022 on the Leeds-Pleasant Valley 345 kV circuit, and this circuit is the main constraint of the Upstate New York to Southeast New York (UPNY-SENY) interface identified in the resource adequacy analysis.

Therefore, the violation could be resolved by solution(s) that respond to the resource adequacy deficiencies identified for 2019 - 2024.

If the resource adequacy solution is non-transmission, these reliability needs can only be most efficiently satisfied through the addition of compensatory megawatts in SENY because such resources need to be located below the UPNY-SENY interface constraint to be effective.

Additions in Zones A through F could partially resolve these reliability needs. Potential solutions could include a combination of additional transfer capability by adding transmission facilities into SENY from outside those zones and/or resource additions at least some of which would be best located in SENY.

The RNA is the first step of the NYISO reliability planning process. As a product of this step, the NYISO documents the reliability needs in the RNA report, which is presented to the NYISO Board of Directors for approval. The NYISO Board approval initiates the second step, which involves the NYISO requesting proposed solutions to mitigate the identified needs to maintain acceptable levels of system reliability throughout the study period.

NYISO 2014 Reliability Needs Assessment 62

8. Historic Congestion Appendix A of Attachment Y of the NYISO OATT states: "As part of its CSPP, the ISO will prepare summaries and detailed analysis of historic and projected congestion across the NYS Transmission System. This will include analysis to identify the significant causes of historic congestion in an effort to help Market Participants and other interested parties distinguish persistent and addressable congestion from congestion that results from onetime events or transient adjustments in operating procedures that may or may not recur. This information will assist Market Participants and other stakeholders to make appropriately informed decisions."

The detailed analysis of historic congestion can be found on the NYISO Web site."

11 http://www.nyiso.com/public/markets-operations/services/planning/documents/index.jsp NYISO 2014 Reliability Needs Assessment 63

Appendices A -D NYISO 2014 Reliability Needs Assessment 64

DRAFT- For Discussion Purposes Appendix A - 2014 Reliability Needs Assessment Glossary Term Definition 10-year Study 10-year period starting with the year after the study is dated and Period projecting forward 10 years. For example, the 2014 RNA covers the 10-year Study Period of 2015 through 2024.

Adequacy Encompassing both generation and transmission, adequacy refers to the ability of the bulk power system to supply the aggregate requirements of consumers at all times, accounting for scheduled and unscheduled outages of system components.

Alternative Regulated solutions submitted by a TO or other developer in Regulated Solutions response to a solicitation by the ARS, if the NYISO determines that there is a Reliability Need.

Annual Transmission An assessment, conducted by the NYISO staff in cooperation with Reliability Market Participants, to determine the System Upgrade Facilities Assessment (ATRA) required for each generation and merchant transmission project included in the Applicable Reliability Standards, to interconnect to the New York State Transmission System in compliance with Applicable Reliability Standards and the NYISO Minimum Interconnection Standard.

Area Transmission The NYISO, in its role as Planning Coordinator, is responsible for Review (ATR) providing an annual report to the NPCC Compliance Committee in regard to its Area Transmission Review in accordance with the NPCC Reliability Compliance and Enforcement Program and in conformance with the NPCC Design and Operation of the Bulk Power System (Directory #1).

Best Available NYS DEC regulation, required for compliance with the federal Clean Retrofit Technology Air Act, applying to fossil fueled electric generating units built (BART) between August 7, 1962 and August 7, 1977. Emissions control of SO 2, NOx and PM may be necessary for compliance. Compliance deadline is January 2014.

Best Technology NYS DEC policy establishing performance goals for new and existing Available (BTA) electricity generating plants for Cooling Water Intake Structures. The policy would apply to plants with design intake capacity greater than 20 million gallons/day and prescribes reductions in fish mortality.

The performance goals call for the use of wet, closed-cycle cooling systems at existing generating plants.

New York State Bulk The facilities identified as the New York State Bulk Power Power Transmission Transmission Facilities in the annual Area Transmission Review Facility (BPTF) submitted to NPCC by the ISO pursuant to NPCC requirements.

Capability Period The Summer Capability Period lasts six months, from May 1 through NYISO 2014 Reliability Needs Assessment A-1

DRAFT - For Discussion Purposes Term Definition October 31. The Winter Capability Period runs from November 1 through April 30 of the following year.

Capacity The capability to generate or transmit electrical power, or the ability to reduce demand at the direction of the NYISO.

Capacity Resource CRIS is the service provided by NYISO to interconnect the Developer's Integration Service Large Generating Facility or Merchant Transmission Facility to the (CRIS) New York State Transmission System in accordance with the NYISO Deliverability Interconnection Standard, to enable the New York State Transmission System to deliver electric capacity from the Large Generating Facility or Merchant Transmission Facility, pursuant to the terms of the NYISO OATT.

Class Year The group of generation and merchant transmission projects included in any particular Annual Transmission Reliability Assessment (ATRA), in accordance with the criteria specified for including such projects in the assessment.

Clean Air Interstate USEPA rule to reduce interstate transport of fine particulate matter Rule (CAIR) (PM) and ozone. CAIR provides a federal framework to limit the emission of SO 2 and NOx.

Comprehensive A biennial study undertaken by the NYISO that evaluates projects Reliability Plan (CRP) offered to meet New York's future electric power needs, as identified in the Reliability Needs Assessment (RNA). The CRP may trigger electric utilities to pursue regulated solutions or other developers to pursue alternative regulated solutions to meet Reliability Needs, if market-based solutions will not be available by the need date. It is the second step in the Reliability Planning Process (RPP).

Comprehensive A transmission system planning process that is comprised of three System Planning components: 1) Local transmission owner planning; 2) Compilation of Process (CSPP) local plans into the Reliability Planning Process (RPP), which includes developing a Comprehensive Reliability Plan (CRP); 3) Channeling the CRP data into the Congestion Assessment and Resource Integration Study (CARIS)

Congestion The third component of the Comprehensive System Planning Process Assessment and (CSPP). The CARIS is based on the Comprehensive Reliability Plan Resource (CRP).

Integration Study (CARIS)

Congestion Congestion on the transmission system results from physical limits on how much power transmission equipment can carry without exceeding thermal, voltage and/or stability limits determined to maintain system reliability.

NYISO 2014 Reliability Needs Assessment A-2

DRAFT- For Discussion Purposes Term Definition Contingencies Contingencies are individual electrical system events (including disturbances and equipment failures) that are likely to happen.

Cross-State Air This USEPA rule requires the reduction of power plant emissions that Pollution Rule contribute to exceedances of ozone and/or fine particle standards in (CSARP) other states.

Dependable The sustained maximum net output of a generator, as demonstrated Maximum Net by the performance of a test or through actual operation, averaged Capability over a continuous time period as defined in the ISO Procedures. The (DMNC) DMNC test determines the amount of Installed Capacity used to calculate the Unforced Capacity that the Resource is permitted to supply to the NYCA.

Electric System A NYISO governance working group for Market Participants Planning Work designated to fulfill the planning functions assigned to it. The ESPWG Group (ESPWG) is a working group that provides a forum for stakeholders and Market Participants to provide input into the NYISO's Comprehensive System Planning Process (CSPP), the NYISO's response to FERC reliability-related Orders and other directives, other system planning activities, policies regarding cost allocation and recovery for regulated reliability and/or economic projects, and related matters.

Energy Efficiency A statewide program ordered by the NYDPS in response to the Portfolio Standard Governor's call to reduce New Yorkers' electricity usage by 15% of (EEPS) 2007 forecast levels by the year 2015, with comparable results in natural gas conservation.

Federal Energy The federal energy regulatory agency within the U.S. Department of Regulatory Energy that approves the NYISO's tariffs and regulates its operation Commission (FERC) of the bulk electricity grid, wholesale power markets, and planning and interconnection processes.

FERC 715 Annual report that is required by transmitting utilities operating grid facilities that are rated at or above 100 kilovolts. The report consists of transmission systems maps, a detailed description of transmission planning Reliability Criteria, detailed descriptions of transmission planning assessment practices, and detailed evaluation of anticipated system performance as measured against Reliability Criteria.

Forced Outage An unanticipated loss of capacity due to the breakdown of a power plant or transmission line. It can also mean the intentional shutdown of a generating unit or transmission line for emergency reasons.

Gap Solution A solution to a Reliability Need that is designed to be temporary and to strive to be compatible with permanent market-based proposals.

A permanent regulated solution, if appropriate, may proceed in parallel with a Gap Solution. The NYISO may call for a Gap Solution to NYISO 2014 Reliability Needs Assessment A-3

DRAFT- For Discussion Purposes Term Definition an imminent threat to reliability of the Bulk Power Transmission Facilities if no market-based solutions, regulated backstop solutions, or alternative regulated solutions can meet the Reliability Needs in a timely manner.

Gold Book Annual NYISO publication of its Load and Capacity Data Report.

Installed Capacity A Generator or Load facility that complies with the requirements in (ICAP) the Reliability Rules and is capable of supplying and/or reducing the demand for Energy in the NYCA for the purpose of ensuring that sufficient Energy and Capacity are available to meet the Reliability Rules. The Installed Capacity requirement, established by the New York State Reliability Council (NYSRC), includes a margin of reserve in accordance with the Reliability Rules.

Installed Reserve The amount of installed electric generation capacity above 100% of Margin (IRM) the forecasted peak electric demand that is required to meet NYSRC resource adequacy criteria. Most studies in recent years have indicated a need for a 15-20% reserve margin for adequate reliability in New York.

Interconnection A queue of transmission and generation projects that have submitted Queue an Interconnection Request to the NYISO to be interconnected to the New York State Transmission System. All projects must undergo three studies - a Feasibility Study (unless parties agree not to perform it), a System Reliability Impact Study (SRIS) and a Facilities Study - before interconnecting to the grid.

Local Transmission The Local Transmission Owner Plan, developed by each Transmission Plan (LTP) Owner, which describes its respective plans that may be under consideration or finalized for its own Transmission District.

Local Transmission The first step in the Comprehensive System Planning Process (CSPP),

Owner Planning under which transmission owners in New York's electricity markets Process (LTPP) provide their local transmission plans for consideration and comment by interested parties.

Loss of load LOLE establishes the amount of generation and demand-side expectation (LOLE) resources needed - subject to the level of the availability of those resources, load uncertainty, available transmission system transfer capability and emergency operating procedures - to minimize the probability of an involuntary loss of firm electric load on the bulk electricity grid. The state's bulk electricity grid is designed to meet an LOLE that is not greater than one occurrence of an involuntary load disconnection in 10 years, expressed mathematically as 0.1 days per year.

Market-Based Investor-proposed projects that are driven by market needs to meet Solutions future reliability requirements of the bulk electricity grid as outlined in the RNA. Those solutions can include generation, transmission and 0

NYISO 2014 Reliability Needs Assessment A-4

DRAFT- For Discussion Purposes Term Definition demand response Programs.

Market Monitoring A consulting or other professional services firm, or other similar Unit entity, retained by the NYISO Board pursuant to ISO Services Tariff Section 30.4.6.8.1, Attachment 0 - Market Monitoring Plan.

Market Participant An entity, excluding the ISO, that produces, transmits, sells, and/or purchases for resale Capacity, Energy and Ancillary Services in the Wholesale Market. Market Participants include: Transmission Customers under the ISO OATT, Customers under the ISO Services Tariff, Power Exchanges, Transmission Owners, Primary Holders, LSEs, Suppliers and their designated agents. Market Participants also include entities buying or selling TCCs.

Mercury and Air The rule applies to oil and coal fired generators and establishes limits Toxics Standards for HAPs, acid gases, mercury (Hg), and particulate matter (PM).

(MATS) Compliance is required by March 2015, with extensions to 2017 for reliability critical units.

Mercury Reduction NYSDEC regulation of mercury emissions from coal-fired electric Program for Coal- utility steam generating units with a nameplate capacity of more Fired Electric Utility than 25 MW producing electricity for sale.

Steam Generating Units (MRP)

National Ambient Limits, set by the EPA, on pollutants considered harmful to public Air Quality health and the environment.

Standards (NAAQS)

New York Control The area under the electrical control of the NYISO. It includes the Area (NYCA) entire state of New York, and is divided into 11 zones.

New York State The agency that implements New York State environmental Department of conservation law, with some programs also governed by federal law.

Environmental Conservation (NYSDEC)

New York Formed in 1997 and commencing operations in 1999, the NYISO is a Independent System not-for-profit organization that manages New York's bulk electricity Operator (NYISO) grid - an 11,056-mile network of high voltage lines that carry electricity throughout the state. The NYISO also oversees the state's wholesale electricity markets. The organization is governed by an independent Board of Directors and a governance structure made up of committees with Market Participants and stakeholders as members.

New York State As defined in the New York Public Service Law, it serves as the staff Department of for the New York State Public Service Commission.

Public Service NYISO 2014 Reliability Needs Assessment A-5

DRAFT- For Discussion Purposes Term Definition (NYDPS)

New York State A corporation created under the New York State Public Authorities Energy Research and law and funded by the System Benefits Charge (SBC) and other Development sources. Among other responsibilities, NYSERDA is charged with Authority conducting a multifaceted energy and environmental research and (NYSERDA) development program to meet New York State's diverse economic needs, and administering state System Benefits Charge, Renewable Portfolio Standard, and Energy Efficiency Portfolio Standard programs.

New York State The New York State Public Service Commission is the decision making Public Service body of the New York State Department of Public Service. The PSC Commission (NYPSC) regulates the state's electric, gas, steam, telecommunications, and water utilities and oversees the cable industry. The Commission has the responsibility for setting rates and ensuring that safe and adequate service is provided by New York's utilities. In addition, the Commission exercises jurisdiction over the siting of major gas and electric transmission facilities New York State A not-for-profit entity that develops, maintains, and, from time-to-Reliability Council time, updates the Reliability Rules which shall be complied with by (NYSRC) the New York Independent System Operator ("NYISO") and all entities engaging in electric transmission, ancillary services, energy and power transactions on the New York State Power System.

North American A not-for-profit organization that develops and enforces reliability Electric Reliability standards; assesses reliability annually via 10-year and seasonal Corporation (NERC) forecasts; monitors the bulk power system; and educates, trains, and certifies industry personnel. NERC is subject to oversight by the FERC and governmental authorities in Canada.

Northeast Power A not-for-profit corporation responsible for promoting and improving Coordinating the reliability of the international, interconnected bulk power system Council (NPCC) in Northeastern North America.

Open Access Document of Rates, Terms and Conditions, regulated by the FERC, Transmission Tariff under which the NYISO provides transmission service. The OATT is a (OAT-) dynamic document to which revisions are made on a collaborative basis by the NYISO, New York's Electricity Market Stakeholders, and the FERC.

Order 890 Adopted by FERC in February 2007, Order 890 is a change to FERC's 1996 transmission open access regulations (established in Orders 888 and 889). Order 890 is intended to provide for more effective competition, transparency and planning in wholesale electricity markets and transmission grid operations, as well as to strengthen the Open Access Transmission Tariff (OATT) with regard to non-NYISO 2014 Reliability Needs Assessment A-6

DRAFT- For Discussion Purposes Term Definition discriminatory transmission service. Order 890 requires Transmission Providers - including the NYISO - to have a formal planning process that provides for a coordinated transmission planning process, including reliability and economic planning studies.

Order 1000 Order No. 1000 is a Final Rule that reforms the FERC electric transmission planning and cost allocation requirements for public utility transmission providers. The rule builds on the reforms of Order No. 890 and provides for transmission planning to meet transmission needs driven by Public Policy Requirements, interregional planning, opens transmission development for new transmission needs to non-incumbent developers, and provides for cost allocation and recovery of transmission upgrades.

Outage The forced or scheduled removal of generating capacity or a transmission line from service.

Peak Demand The maximum instantaneous power demand, measured in megawatts (MW), and also known as peak load, is usually measured and averaged over an hourly interval.

Reasonably Regulations promulgated by NYSDEC for the control of emissions of Available Control nitrogen oxides (NOx) from fossil fueled power plants. The Technology for regulations establish presumptive emission limits for each type of Oxides of Nitrogen fossil fueled generator and fuel used as an electric generator in NY.

(NOx RACT) The NOx RACT limits are part of the State Implementation Plan for achieving compliance with the National Ambient Air Quality Standard (NAAQS) for ozone.

Reactive Power Facilities such as generators, high voltage transmission lines, Resources synchronous condensers, capacitor banks, and static VAr compensators that provide reactive power. Reactive power is the portion of electric power that establishes and sustains the electric and magnetic fields of alternating-current equipment. Reactive power is usually expressed as kilovolt-amperes reactive (kVAr) or megavolt-ampere reactive (MVAr).

Regional A cooperative effort by nine Northeast and Mid-Atlantic states (not Greenhouse Gas including New Jersey or Pennsylvania) to limit greenhouse gas Initiative (RGGI) emissions using a market-based cap-and-trade approach.

Regulated Backstop Proposals required of certain TOs to meet Reliability Needs as Solutions outlined in the RNA. Those solutions can include generation, transmission or demand response. Non-Transmission Owner developers may also submit regulated solutions.

Reliability Criteria The electric power system planning and operating policies, standards, criteria, guidelines, procedures, and rules promulgated by the North American Electric Reliability Corporation (NERC), Northeast Power NYISO 2014 Reliability Needs Assessment A-7

DRAFT - For Discussion Purposes Term Definition Coordinating Council (NPCC), and the New York State Reliability Council (NYSRC), as they may be amended from time to time.

Reliability Need A condition identified by the NYISO in the RNA as a violation or potential violation of Reliability Criteria.

Reliability Needs A biennial study which evaluates the resource adequacy and Assessment (RNA) transmission system adequacy and security of the New York bulk power system over a ten year Study Period. Through this evaluation, the NYISO identifies Reliability Needs in accordance with applicable Reliability Criteria.

Reliability Planning The biennial process that includes evaluation of resource adequacy Process (RPP) and transmission system security of the state's bulk electricity grid over a 10-year period and evaluates solutions to meet those needs.

The RPP consists of two studies: the RNA, which identifies potential problems, and the CRP, which evaluates specific solutions to those problems.

Renewable Portfolio Proceeding commenced by order of the NYDPS in 2004 which Standard (RPS) established the goal to increase renewable energy used in New York State to 30% of total New York energy usage (equivalent to approximately 3,700 MW of capacity) by 2015.

Responsible The Transmission Owner(s) or TOs designated by the NYISO, pursuant Transmission Owner to the NYISO RPP, to prepare a proposal for a regulated solution to a (Responsible TO) Reliability Need or to proceed with a regulated solution to a Reliability Need. The Responsible TO will normally be the Transmission Owner in whose Transmission District the NYISO identifies a Reliability Need.

Security The ability of the power system to withstand the loss of one or more elements without involuntarily disconnecting firm load.

Special Case A NYISO demand response program designed to reduce power usage Resources (SCR) by businesses and large power users qualified to participate in the NYISO's ICAP market. Companies that sign up as SCRs are paid in advance for agreeing to cut power upon NYISO request.

State Environmental NYS law requiring the sponsoring or approving governmental body to Quality Review Act identify and mitigate the significant environmental impacts of the (SEQRA) activity/project it is proposing or permitting.

Study Period The 10-year time period evaluated in the RNA.

System Reliability A study, conducted by the NYISO in accordance with Applicable Impact Study (SRIS) Reliability Standards, to evaluate the impact of a proposed interconnection on the reliability of the New York State Transmission System.

System Benefits An amount of money, charged to ratepayers on their electric bills, NYISO 2014 Reliability Needs Assessment A-8

DRAFT- For Discussion Purposes Term Definition Charge (SBC) which is administered and allocated by NYSERDA towards energy-efficiency programs, research and development initiatives, low-income energy programs, and environmental disclosure activities.

Transfer Capability The measure of the ability of interconnected electrical systems to reliably move or transfer power from one area to another over all transmission facilities (or paths) between those areas under specified system conditions.

Transmission Limitations on the ability of a transmission system to transfer Constraints electricity during normal or emergency system conditions.

Transmission Owner A public utility or authority that owns transmission facilities and (TO) provides Transmission Service under the NYISO's tariffs Transmission An identified group of Market Participants that advises the NYISO Planning Advisory Operating Committee and provides support to the NYISO Staff in Subcommittee regard to transmission planning matters including transmission (TPAS) system reliability, expansion, and interconnection Unforced Capacity Unforced capacity delivery rights are rights that may be granted to Delivery Rights controllable lines to deliver generating capacity from locations (UDR) outside the NYCA to localities within NYCA.

Weather Adjustments made to normalize the impact of weather when making Normalized energy and peak demand forecasts. Using historical weather data, energy analysts can account for the influence of extreme weather conditions and adjust actual energy use and peak demand to estimate what would have happened if the hottest day or the coldest day had been the typical, or "normal," weather conditions. "Normal" is usually calculated by taking the average of the previous 20 years of weather data.

Zone One of the eleven regions in the NYCA connected to each other by identified transmission interfaces and designated as Load Zones A-K.

NYISO 2014 Reliability Needs Assessment A-9

DRAFT - For Discussion Purposes Appendix B - The Reliability Planning Process 0 This section presents an overview of the NYISO reliability planning process (RPP).

A detailed discussion of the reliability planning process, including applicable Reliability Criteria, is contained in NYISO Manual entitled: "Reliability Planning Process Manual,"

which is posted on the NYISO's website.

The NYISO reliability planning process is an integral part of the NYISO's overall Comprehensive System Planning Process (CSPP). The CSPP planning process is comprised of the Local Transmission Planning Process (LTPP), the RPP, and the Congestion Assessment and Resource Integration Study (CARIS). Each CSPP cycle begins with the LTPP. As part of the LTPP, local Transmission Owners perform transmission studies for their BPTFs in their transmission areas according to all applicable criteria.

Links to the Transmission Owner's LTPs can be found on the NYISO's website. The LTPP provides inputs for the NYISO's reliability planning process. During the RPP process, the NYISO conducts the Reliability Needs Assessment (RNA) and Comprehensive Reliability Plan (CRP). The RNA evaluates the adequacy and security of the bulk power system over a 10-year study period. In identifying resource adequacy needs, the NYISO identifies the amount of resources in megawatts (known as "compensatory megawatts") and the locations in which they are needed to meet those needs. After the RNA is complete, the NYISO requests and evaluates market-based solutions, regulated backstop solutions and alternative regulated solutions that address the identified Reliability Needs. This step results in the development of the NYISO's CRP for the 10-year study period. The CRP provides inputs for the NYISO's economic planning process known as CARIS. CARIS Phase 1 examines congestion on the New York bulk power system and the costs and benefits of alternatives to alleviate that congestion. During CARIS Phase 2, the NYISO will evaluate specific transmission project proposals for regulated cost recovery.

The NYISO's reliability planning process is a long-range assessment of both resource adequacy and transmission reliability of the New York bulk power system conducted over a 10-year planning horizon. There are two different aspects to analyzing the bulk power system's reliability in the RNA: adequacy and security. Adequacy is a planning and probabilistic concept. A system is adequate if the probability of having sufficient transmission and generation to meet expected demand is equal to or less than the system's standard, which is expressed as a loss of load expectation (LOLE). The New York State bulk power system is planned to meet an LOLE that, at any given point in time, is less than or equal to an involuntary load disconnection that is not more frequent than once in every 10 years, or 0.1 days per year. This requirement forms the basis of New York's installed reserve margin (IRM) resource adequacy requirement.

Security is an operating and deterministic concept. This means that possible events are identified as having significant adverse reliability consequences, and the system is planned and operated so that the system can continue to serve load even if these events occur. Security requirements are sometimes referred to as N-1 or N-1-1. N NYISO 2014 Reliability Needs Assessment B-1

DRAFT- For Discussion Purposes is the number of system components; an N-1 requirement means that the system can withstand single disturbance events (e.g., generator, bus section, transmission circuit, breaker failure, double-circuit tower) without violating thermal, voltage and stability limits or before affecting service to consumers. An N-i-1 requirement means that the Reliability Criteria apply after any critical element such as a generator, a transmission circuit, a transformer, series or shunt compensating device, or a high voltage direct current (HVDC) pole has already been lost. Generation and power flows can be adjusted by the use of iO-minute operating reserve, phase angle regulator control and HVDC control and a second single disturbance is analyzed.

The RPP is anchored in the market-based philosophy of the NYISO and its Market Participants, which posits that market solutions should be the preferred choice to meet the identified Reliability Needs reported in the RNA. In the CRP, the reliability of the bulk power system is assessed and solutions to Reliability Needs evaluated in accordance with existing Reliability Criteria of the North American Electric Reliability Corporation (NERC), the Northeast Power Coordinating Council, Inc. (NPCC), and the New York State Reliability Council (NYSRC) as they may change from time to time. These criteria and a description of the nature of long-term bulk power system planning are described in detail in the applicable planning manual, and are briefly summarized below. In the event that market-based solutions do not materialize to meet a Reliability Need in a timely manner, the NYISO designates the Responsible TO or Responsible TOs or developer of an alternative regulated solution to proceed with a regulated solution in order to maintain system reliability. Under the RPP, the NYISO also has an affirmative obligation to report historic congestion across the transmission system. In addition, the draft RNA is provided to the Market Monitoring Unit for review and consideration of whether market rules changes are necessary to address an identified failure, if any, in one of the NYISO's competitive markets. If market failure is identified as the reason for the lack of market-based solutions, the NYISO will explore appropriate changes in its market rules with its stakeholders and Independent Market Monitor. The RPP does not substitute for the planning that each TO conducts to maintain the reliability of its own bulk and non-bulk power systems.

The NYISO does not license or construct projects to respond to identified Reliability Needs reported in the RNA. The ultimate approval of those projects lies with regulatory agencies such as the FERC, the NYDPS, environmental permitting agencies, and local governments. The NYISO monitors the progress and continued viability of proposed market and regulated projects to meet identified needs, and reports its findings in annual plans. Figure B-1 below summarizes the RPP and Figure B-2 summarizes the CARIS which collectively comprise the CSPP process.

The CRP will form the basis for the next cycle of the NYISO's economic planning process. That process will examine congestion on the New York bulk power system and the costs and benefits of alternatives to alleviate that congestion.

NYISO 2014 Reliability Needs Assessment B-2

DRAFT- For Discussion Purposes NYISO Reliability Planning Process NYISO Develops Power Flow Base Case Representations NYISOPerformsFrom the FERC 715 Case (oATRA Network )

Id5Caf e iCases Meet Standards for Base Cases ( No Violations)

NYIS PerNYISO Applies Base Case Screens Removing ProjectsA to Scenarios b CDeveloped I Develop the eBNas D ses over the Ten Year Period NYISO Works with TOe to Mitigate Local Proble y il Meet Reliabili Nees And Reporte Actions in RNA i NYISO APprfovas of BPTFs for Security Assessment NY'SO Performs P Violations Identified Reauyste R e

- Id No Violatio s Identified Needed IF *" not,

• T T o I T de teria Deficiency (Needs) i

] I I Develop to remove Compensatory Deficiency MWpMVAR eliablityPlanoCRP .YS PeL&CoTabl Screening NYISO Performs Transfer Limit Analysis for Resource Adequacy Assessment And Identifies Needs as Deficiency in LOLE Criteria by MARS MARS LOLE &

Develop Compensatory MWs to Remove Deficiency Arm SNYISO Reviews LTPs as They Relate to BPTFs to Determine Whether They Will Meet Reliability Needs and Evaluate Alternatives from a Regional Perspective I NYISO Publicizes Reliability Needs Assessment SNYISO Issues Request for Solutions Market-Based Resoonses i Regulated Responses

• Generation s Trnmsion

• DSM o May consider alternatives

• Merchant Transmsin

• TO & nonTO proposals NYISO Evaluates Market Based Responses, Regulated Responses and TO Updates I To Determine Whether They Will Meet the Identified Reliability Me1eds II NYIS FomultesComprehensive Reliability Plan (CRP)

I* T N°viablettimely market or regulated solution to an Identified need I Board Approval of Plan (CRP) I I "Gap"' Solutions by Týe i~v~.. . . . . . . . o.............. I I Board Approval of Plan (CRP) I s eg at- Lon eur L ml NYISO 2014 Reliability Needs Assessment B-3

DRAFT- For Discussion Purposes Appendix C - Load and Energy Forecast 2014-2024 C-1. Summary In order to perform the 2014 RNA, a forecast of summer and winter peak demands and annual energy requirements was produced for the years 2014 - 2024. The electricity forecast is based on projections of New York's economy performed by Moody's Analytics in January 2014.

The forecast includes detailed projections of employment, output, income and other factors for twenty three regions in New York State. This appendix provides a summary of the electric energy and peak demand forecasts and the key economic input variables used to produce the forecasts. Table C-1 provides a summary of key economic and electric system growth rates from 2003 to 2024.

In June 2008, the New York Public Service Commission issued its Order regarding the Energy Efficiency Portfolio Standard. This proceeding set forth a statewide goal of a cumulative energy reduction of about 26,900 GWh. The NYISO estimates the peak demand impacts to be about 5500 MW. This goal is expected to be achieved by contributions from a number of state agencies, power authorities and utilities, as well as from federal codes and building standards.

Table C-1: Summary of Economic & Electric System Growth Rates - Actual & Forecast Average Annual Growth I 2003-2008 2008-2013 2014-2019 2019-2024 Total Employment 0.70% 0.52% 0.93% 0.21%

Gross State Product 1.58% 1.85% 2.47% 1.75%

Population 0.08% 0.34% 0.19% 0.14%

Total Real Income 2.53% 1.59% 2.77% 2.25%

Weather Normalized Summer Peak 1.40% -0.10% 1.04% 0.63%

Weather Normalized Annual Energy 1.11% -0.36% 0.14% 0.17%

NYISO 2014 Reliability Needs Assessment C-1

DRAFT- For Discussion Purposes C-2. Historic Overview The New York Control Area (NYCA) is a summer peaking system and its summer peak has grown faster than annual energy and winter peak over this period. Both summer and winter peaks show considerable year-to-year variability due to the influence of peak-producing weather conditions for the seasonal peaks. Annual energy is influenced by weather conditions over the entire year, which is much less variable than peak-producing conditions.

Table C-2 shows the NYCA historic seasonal peaks and annual energy growth since 2001.

The table provides both actual results and weather-normalized results, together with annual average growth rates for each table entry. The growth rates are averaged over the period 2003 to 2013.

Table C-2: Historic Energy and Seasonal Peak Demand - Actual and Weather-Normalized Annual Energy - GWh Summer Peak - MW Winter Peak - MW Weather Weather Weather Year Actual I Normalized Actual Normalized Year Actual Normalized 2003 158,130 157,523 30,333 31,410 2003-04 25,262 24,849 2004 160.211 160,832 28,433 31,401 2004-05 25,541 25,006 2005 167.,207 163,015 32,075 33,068 2005-06 24,947 24,770 2006 162,237 163,413 33,939 32,992 2006-07 25,057 25,030 2007 167,339 166073 32,169 33,444 2007-08 25,021 25,490 2008 165,613 166,468 32,432 33,670 2008-09 24,673 25,016 2009 158,777 161,908 30,844 33,063 2009-10 24,074 24,537 2010 163,505 161,513 33,452 32,458 2010-11 24,654 24,452 2011 163,330 162,628 33,865 33,019 2011-12 23,901 24,630 2012 162,843 163,458 32,547 33,106 2012-13 24,658 24,630 2013 163,493 163,473 33,956 33,502 2013-14 25,738 24,610 0.33% 0.37% 1.13% 0.65% 0.19% -0.10%

NYISO 2014 Reliability Needs Assessment C-2

DRAFT - For Discussion Purposes C-3. Forecast Overview Table C-3 shows historic and forecast growth rates of annual energy for the different regions in New York. The Upstate region includes Zones A - I. The NYCA's two locality zones, Zones J (New York City) and K (Long Island) are shown individually.

Table C-3: Annual Energy and Summer Peak Demand - Actual & Forecast Annual Enery - Gh Summer Coincident Peak - MW Upstate J K NYCA Upstate J K NYCA Year Region Region 2003 85,223 50,829 21,960 158,012 15,100 10240 4,993 30,333 2004 85,935 52,073 22,203 160,211 14,271 9,742 4,420 28,433 2005 90,253 54,007 22,948 167,208 16,029 10,810 5,236 32,075 2006 86,957 53,096 22,185 162,238 17,054 11,300 5,585 33,939 2007 89,843 54,750 22,748 167,341 15,824 10,970 5,375 32,169 2008 88,316 54,835 22,461 165,612 16,223 10,979 5,231 32,433 2009 83,788 53,100 21,892 158,780 15,416 10,366 5,063 30,845 2010 85,469 55,114 22,922 163,505 16,408 11,213 5,832 33,453 2011 86,566 54,059 22,704 163,329 16,558 11,374 5,935 33,867 2012 87,051 53,487 22,302 162,840 16,608 10,722 5,109 32,439 2013 88,084 53,316 22,114 163,514 16,847 11,456 5,653 33,956 2014 87,456 53,498 22,207 163,161 16,621 11,643 5,402 33,666 2015 87,602 53,284 22,328 163,214 16,711 11,907 5,448 34,066 2016 87,983 53,402 22,522 163,907 16,850 12,070 5,492 34,412 2017 87,870 53,144 22,590 163,604 16,996 12,238 5,532 34,766 2018 87,987 53,046 22,720 163,753 17,120 12,421 5,570 35,111 2019 88,515 52,940 22,850 164,305 17,296 12,549 5,609 35,454 2020 89,089 52,969 23,043 165,101 17,369 12,638 5,649 35,656 2021 88,993 52,727 23,110 164,830 17,453 12,747 5,690 35,890 2022 89,113 52,622 23,240 164,975 17,560 12,836 5,731 36,127 2023 89,222 52,517 23,370 165,109 17,647 12,945 5,777 36,369 2024 89,600 52,556 23,565 165,721 17,730 13,029 5,821 36,580 2003-13 0.3% 0.5% 0.1% 0.3% 1.1% 1.1% 1.2% 1. 1%

2014-24 0.2% -0.2% 0.6% 0.2% 0.6% 11.1% 0.7% 0.8%

2003-08 0.7% 1.5% 0.5% 0.9% 1.4% 1.4% 0.9% 1.3%

2008-13 -0.1% -0.6% -0.3% -0.3% 0.8% 0.9% 1.6% 0.9%

2014-19 0.2% -0.2% 0.6% 0.1% 0.8% 1.5% 0.8% 1.0%

2019-24 0.2% -0.1% 0.6% 0.2% 0.5% 0.8% 0.7% 0.6%

NYISO 2014 Reliability Needs Assessment C-3

DRAFT- For Discussion Purposes C-4. Forecast Methodology The NYISO methodology for producing the long term forecasts for the Reliability Needs Assessment consists of the following steps.

Econometric forecasts were developed for zonal energy using monthly data from 2000 through 2013. For each zone, the NYISO estimated an ensemble of econometric models using population, households, economic output, employment, cooling degree days and heating degree days. Each member of the ensemble was evaluated and compared to historic data. The zonal model chosen for the forecast was the one which best represented recent history and the regional growth for that zone. The NYISO also received and evaluated forecasts from Con Edison and LIPA, which were used in combination with the forecasts we developed for Zones H, I, J and K.

The summer & winter non-coincident and coincident peak forecasts for Zones H, I, J and K were derived from the forecasts submitted to the NYISO by Con Edison and LIPA. For the remaining zones, the NYISO derived the summer and winter coincident peak demands from the zonal energy forecasts by using average zonal weather-normalized load factors from 2000 through 2013. The 2014 summer peak forecast was matched to coincide with the 2014 ICAP forecast.

NYISO 2014 Reliability Needs Assessment C-4

DRAFT- For Discussion Purposes C-4.1. Demand Side Initiatives The Energy Efficiency Portfolio Standard (EEPS) is an initiative of the Governor of New York and implemented by the state's Public Service Commission. The goal of the initiative is to reduce electric energy usage by 15 percent from 2007 forecasted energy usage levels in the year 2015 (the 15x15 initiative), for a reduction of 26,880 GWh by 2015.

The NYS PSC directed a series of working groups composed of all interested parties to the proceeding to obtain information needed to further elaborate the goal. The NYS PSC issued an Order in June 2008, directing NYSERDA and the state's investor owned utilities to develop conservation plans in accordance with the EEPS goal. The NYS PSC also identified goals that it expected would be implemented by LIPA and NYPA.

The NYISO has been a party to the EEPS proceeding from its inception. As part of the development of the 2014 RNA forecast, the NYISO developed an adjustment to the 2014 econometric model that incorporated a portion of the EEPS goal. This was based upon discussion with market participants in the Electric System Planning Working Group. The NYISO considered the following factors in developing the 2014 RNA base case:

" NYS PSC-approved spending levels for the programs under its jurisdiction, including the Systems Benefit Charge and utility-specific programs

• Expected realization rates, participation rates and timing of planned energy efficiency programs

" Degree to which energy efficiency is already included in the NYISO's econometric energy forecast

• Impacts of new appliance efficiency standards, and building codes and standards

" Specific energy efficiency plans proposed by LIPA, NYPA and Consolidated Edison Company of New York, Inc. (Con Edison)

• The actual rates of implementation of EEPS based on data received from Department of Public Service staff

• Projected impact of customer-sited solar photovoltaic installations Once the statewide energy and demand impacts were developed, zonal level forecasts were produced for the econometric forecast and for the base case.

NYISO 2014 Reliability Needs Assessment C-5

DRAFT- For Discussion Purposes

• Zone D's average energy and peak demand growth is based on the last four years of the forecast, after industrial load in this zone is expected to return from a curtailment.

Figure C-1: Zonal Energy Forecast Growth Rates - 2014 to 2024 Annual Peak Demand Growth Rates by Zone 1.50%

1.25%

1.00%-

0.75%0%

0.50%

t 0.25%

0.00%

A B C D5 E F G H I J K NYCA

-0.25%

-0.50%

Figure C-2: Zonal Summer Peak Demand Forecast Growth Rates - 2014 to 2024 NYISO 2014 Reliability Needs Assessment C-6

DRAFT- For Discussion Purposes Table C-4: Annual Energy by Zone - Actual & Forecast (GWh)

Year A B C D E F G H I J K NYCA 2003 15,942 9,719 16,794 5,912 6,950 11,115 10,451 2,219 6,121 50,829 21,960 158,012 2004 16,102 9,888 16,825 5,758 7,101 11,161 10,696 2,188 6,216 52,073 22,203 160,211 2005 16,498 10,227 17,568 6,593 7,594 11,789 10,924 2,625 6,435 54,007 22,948 167,208 2006 15,998 10,003 16,839 6,289 7,339 11,337 10,417 2,461 6,274 53,096 22,185 162,238 2007 16,258 10,207 17,028 6,641 7,837 11,917 10,909 2,702 6,344 54,750 22,748 167,341 2008 15,835 10,089 16,721 6,734 7,856 11,595 10,607 2,935 5,944 54,835 22,461 165,612 2009 15,149 9,860 15,949 5,140 7,893 10,991 10,189 2,917 5,700 53,100 21,892 158,780 2010 15,903 10,128 16,209 4,312 7,906 11,394 10,384 2,969 6,264 55,114 22,922 163,505 2011 16,017 10,040 16,167 5,903 7,752 11,435 10,066 2,978 6,208 54,059 22,704 163,329 2012 15,595 10,009 16,117 6,574 7,943 11,846 9,938 2,930 6,099 53,487 22,302 162,840 2013 15,790 9,981 16,368 6,448 8,312 12,030 9,965 2,986 6,204 53,316 22,114 163,514 2014 15,837 10,011 16,342 6,027 8,153 11,993 9,979 2,957 6,157 53,498 22,207 163,161 2015 15,870 10,005 16,372 6,042 8,167 12,043 10,025 2,946 6,132 53,284 22,328 163,214 2016 15,942 10,025 16,441 6,072 8,214 12,128 10,062 2,953 6,146 53,402 22,522 163,907 2017 15,913 9,993 16,423 6,066 8,233 12,148 10,040 2,938 6,116 53,144 22,590 163,604 2018 15,925 9,988 16,447 6,075 8,277 12,201 10,038 2,931 6,105 53,046 22,720 163,753 2019 15,942 9,985 16,475 6,493 8,319 12,256 10,026 2,927 6,092 52,940 22,850 164,305 2020 16,012 10,009 16,553 6,721 8,395 12,334 10,042 2,927 6,096 52,969 23,043 165,101 2021 15,988 9,980 16,546 6,711 8,431 12,345 10,008 2,916 6,068 52,727 23,110 164,830 2022 15,998 9,979 16,583 6,717 8,480 12,391 9,999 2,910 6,056 52,622 23,240 164,975 2023 16,007 9,979 16,615 6,722 8,524 12,439 9,989 2,903 6,044 52,517 23,370 165,109 2024 16,060 10,009 16,696 6,744 8,608 12,525 10,004 2,905 6,049 52,556 23,565 165,721 NYISO 2014 Reliability Needs Assessment C-7

DRAFT - For Discussion Purposes Table C-5: Summer Coincident Peak Demand by Zone - Actual & Forecast (MW)

Year A B C D E F G H I J K NYCA 2003 2,510 1,782 2,727 671 1,208 2,163 2,146 498 1,395 10,240 4,993 30,333 2004 2,493 1,743 2,585 644 1,057 1,953 2,041 475 1,280 9,742 4,420 28,433 2005 2,726 1,923 2,897 768 1,314 2,164 2,236 592 1,409 10,810 5,236 32,075 2006 2,735 2,110 3,128 767 1,435 2,380 2,436 596 1,467 11,300 5,585 33,939 2007 2,592 1,860 2,786 795 1,257 2,185 2,316 595 1,438 10,970 5,375 32,169 2008 2,611 2,001 2,939 801 1,268 2,270 2,277 657 1,399 10,979 5,231 32,433 2009 2,595 1,939 2,780 536 1,351 2,181 2,159 596 1,279 10,366 5,063 30,845 2010 2,663 1,985 2,846 552 1,437 2,339 2,399 700 1,487 11,213 5,832 33,453 2011 2,556 2,019 2,872 776 1,447 2,233 2,415 730 1,510 11,374 5,935 33,867 2012 2,743 2,107 2,888 774 1,420 2,388 2,242 653 1,393 10,722 5,109 32,439 2013 2,549 2,030 2,921 819 1,540 2,392 2,358 721 1,517 11,456 5,653 33,956 2014 2,674 2,054 2,896 703 1,434 2,374 2,290 689 1,507 11,643 5,402 33,666 2015 2,688 2,062 2,916 705 1,449 2,405 2,309 684 1,493 11,907 5,448 34,066 2016 2,710 2,077 2,942 707 1,464 2,437 2,324 688 1,501 12,070 5,492 34,412 2017 2,733 2,093 2,972 710 1,483 2,475 2,336 688 1,506 12,238 5,532 34,766 2018 2,748 2,103 2,993 715 1,499 2,503 2,347 694 1,518 12,421 5,570 35,111 2019 2,756 2,110 3,009 789 1,512 2,529 2,355 702 1,534 12,549 5,609 35,454 2020 2,763 2,112 3,020 793 1,523 2,547 2,363 706 1,542 12,638 5,649 35,656 2021 2,769 2,115 3,033 797 1,536 2,570 2,370 709 1,554 12,747 5,690 35,890 2022 2,773 2,117 3,044 801 1,547 2,595 2,377 724 1,582 12,836 5,731 36,127 2023 2,777 2,121 3,055 805 1,558 2,624 2,383 730 1,594 12,945 5,777 36,369 2024 2,780 2,124 3,067 809 1,572 2,649 2,388 734 1,607 13,029 5,821 36,580 NYISO 2014 Reliability Needs Assessment C-8

0 DRAFT - For Discussion Purposes Table C-6: Winter Coincident Peak Demand by Zone - Actual & Forecast (MW)

Year A B C D E F G H I J K NYCA 2003-04 2,433 1,576 2,755 857 1,344 1,944 1,720 478 981 7,527 3,647 25,262 2004-05 2,446 1,609 2,747 918 1,281 1,937 1,766 474 939 7,695 3,729 25,541 2005-06 2,450 1,544 2,700 890 1,266 1,886 1,663 515 955 7,497 3,581 24,947 2006-07 2,382 1,566 2,755 921 1,274 1,888 1,638 504 944 7,680 3,505 25,057 2007-08 2,336 1,536 2,621 936 1,312 1,886 1,727 524 904 7,643 3,596 25,021 2008-09 2,274 1,567 2,533 930 1,289 1,771 1,634 529 884 7,692 3,570 24,673 2009-10 2,330 1,555 2,558 648 1,289 1,788 1,527 561 813 7,562 3,443 24,074 2010-11 2,413 1,606 2,657 645 1,296 1,825 1,586 526 927 7,661 3,512 24,654 2011-12 2,220 1,535 2,532 904 1,243 1,765 1,618 490 893 7,323 3,378 23,901 2012-13 2,343 1,568 2,672 954 1,348 1,923 1,539 510 947 7,456 3,399 24,658 2013-14 2,358 1,645 2,781 848 1,415 1,989 1,700 625 974 7,810 3,594 25,738 2014-15 2,382 1,575 2,608 858 1,323 1,905 1,554 538 935 7,529 3,530 24,737 2015-16 2,391 1,577 2,615 860 1,325 1,914 1,564 538 934 7,537 3,540 24,795 2016-17 2,399 1,580 2,621 863 1,327 1,925 1,568 540 939 7,544 3,550 24,856 2017-18 2,406 1,583 2,628 862 1,332 1,935 1,572 539 937 7,552 3,560 24,906 2018-19 2,413 1,587 2,636 863 1,338 1,947 1,576 540 937 7,559 3,570 24,966 2019-20 2,423 1,591 2,645 934 1,345 1,961 1,580 540 938 7,567 3,580 25,104 2020-21 2,433 1,596 2,654 937 1,355 1,972 1,583 542 941 7,574 3,590 25,177 2021-22 2,444 1,602 2,667 936 1,365 1,985 1,589 542 940 7,582 3,600 25,252 2022-23 2,455 1,608 2,679 936 1,377 2,000 1,597 542 940 7,590 3,610 25,334 2023-24 2,468 1,617 2,692 937 1,389 2,017 1,607 542 941 7,597 3,620 25,427 2024-25 2,484 1,628 2,709 939 1,402 2,037 1,618 543 942 7,605 3,630 25,537 NYISO 2014 Reliability Needs Assessment C-9

DRAFT- For Discussion Purposes Appendix D - Transmission System Security and Resource Adequacy Assessment The analysis performed during the Reliability Needs Assessment requires the development of base cases for transmission security analysis and for resource adequacy analysis. The power flow system model is used for transmission security assessment and the development of the transfer limits to be implemented in the Multi-Area Reliability Simulation (MARS) model. A comprehensive assessment of the transmission system is conducted through a series of steady-state power flow, transient stability, and short circuit studies.

In general, the RNA analyses indicated that the bulk power transmission system can be secured under N-i conditions, but that transfer limits for certain key interfaces must be reduced below their thermal limits, in order to respect voltage criteria.

However, a reduction in transfer limits on a limiting interface can result in higher LOLE, and/or needs occurring earlier than they otherwise would. To quantify this potential impact, LOLE analysis was conducted for the RNA base case, a case modeling voltage limited interfaces using the higher thermal limits (NYCA Thermal), and also a case without any internal NYCA transmission limits (NYCA Free Flow). These cases were simulated to demonstrate the impact that transmission limits have on the LOLE results.

The results from this analysis are reported in Table 4-7.

The MARS model was used to determine whether adequate resources would be available to meet the NYSRC and NPCC reliability criteria of one day in ten years (0.1 days/year). The results showed a deficiency in years 2019 - 2024 (See Section 4.2.3 of this report.) The MARS model was also used to evaluate selected scenarios (Section 4.3) and it was used to determine compensatory MW requirements for identified Reliability Needs (See Section 4.2.5).

NYISO 2014 Reliability Needs Assessment D-1

DRAFT- For Discussion Purposes D-1 2014 RNA Assumption Matrix D-1.1 Assumption Matrix for Resource Adequacy Assessment Parameter 204IRM Model Assumptions Basis for IRM 2014 RNA Model Change T ý Recommended q Recommendation Load Parameters Forecast based on October 1, 2013 forecast: examination of 2013 2014 Gold Book, NYCA loads Peak Load NYCA 33,655 MW, NYC weather normalized peaks. similar to Oct 2013 forecast, NYC 11,740 MW, LI 5,461 MW Top three external Area and LI lower peak days aligned with NYCA Multiple Load Shapes Model Same, Multiple Load Shapes Load Shape using years 2002, 2006, and See white paper Model using years 2002, 2006, 2007 and 2007 Based on collected data and Load Forecast Zonal model updated to input from LIPA, Con Ed, Same Uncertainty reflect current data and NYISO. (See attachment A)

Capacity Parameters Existing 2013 Gold Book values. Use 2014 Gold Book, capacity similar Generating Unit min (DMNC vs. CRIS) capacity 2013 Gold Book publication to 2013 Gold Book Capacities value Units built since the 2013 Gold Book and those non- Consistent with Inclusion Rules, Proposed New 769 W of c ity wa renewable units with capacity repowered or returned Non-Wind Units repowered or returned to Interconnection to service plus Taylor Biomass Agreements signed by included in the base case August 1.

Retirement 164 MW retirements Policy 5 guidelines on 2014 Gold Book Section IV, not Units* reported, See Attachment B3 retirement disposition in IRM studies modeled in the base case 2014 Gold Book Section IV, Cayuga modeled 2015 and 2016 only. Not modeled in the base Mothball Units* case: Dunkirk 1, 2, 3, and 4, 9/10/2012, TC Ravenswood GT 7, 3/13/2014, and Selkirk I & II, 9/1/2014 ICAP Ineligible Forced Outage N/A Units Forced Outage Modeled in the base case with Units EFOR reflecting the outage Five-year (2008-20i2) GADS T. Rates representing the Forced and data for each unit Equivalent Forced Outage represented. Those units with Rates (EFORd) during Update for most recent five year Partial Outage less than five years - use demand periods over the period, 2009-2013 Rates representative data. See most recent five-year attachments C and C1 period (2008-2012)

Based on schedules received Updated schedules, Planned Outages by the NYSIO and adjusted for currently, data from last Same history year is being used NYISO 2014 Reliability Needs Assessment D-2

DRAFT- For Discussion Purposes 2014 IRM Model Assumptions Basis for IRM Parameter Recommended Recommendation 2014 RNA Model Change Summer Nominal 50 MW - divided equally between upstate and Review of most recent data Same Maintenance downstate Operational history Combustion Derates based on temperature indicates the derates are in- Same Turbine Derates correction curves provided line with manufacturer's curves Renewable units based on Proposed New No new wind, See Attachment RPS agreements, 2014 Gold Book IV, no new wind Wind Units B1 interconnection Queue and units ICS input Number decrease due to a (2013 IRM)(201 forecast IRM not forcastnot 2014 Gold Book Section IIIand Wind Capacity - 1366.6 MW participating in NY Capacity IV Wind Resources market (Marble River Wind).

Actual hourly plant output of Wind Shape the 2012 calendar year. Testing results and White Same Summer Peak Hour availability Paper of 17%

Based on collected hourly Solar Capacity of 31.5 MW solar data, Summer Peak 2014 Gold Book, as reflected in Solar Resources plus 12.5 MW of new units. Hour capacity factor based Load Forecast See Attachment B-2 on June 1 - Aug 31, hours HB14 - HB18 Review of unit production Non-NYPA and hydrological conditions Hydro Resources Derated by 45% including recognized Same forecasts (i.e. NOAA)

Grandfathered amounts: PJM Grandfathered Rights, Capacity - 1080 MW, HQ- 1090 MW, Capacity - 1080 MW, Ht -1090MW, e s ETCNL, and other FERC Modeled same as in 2012 RNA Purchases All contracts model as identified rights equivalent contracts These are long term Thsarlogtm Long Term firm sales (279 Capacity Sales MW) federally monitored contracts UDRs No new UDRs Updated to most current UDRs Topology Parameters Based on 2013 Operating Study, 2013 Operations Engineering Voltage All changes reviewed and Studies, 2013 Interface Limits commented on by TPAS. See Comprehensive Planning ted anals Attachment E. Process, and additional analysis including interregional planning initiatives 2014 Gold Book Section VII that are consistent with the inclusion rules Firm projects in-service nNone Identified s n O rvie within three years are modeled, Transmission NnIdtiedmodels and NYISO review sc sTT 21) ieMl such as TOTS (2016), Five Mile Road (2015), Mainesburg (2015),

Farmers Valley (2016), etc.

NYISO 2014 Reliability Needs Assessment D-3

DRAFT - For Discussion Purposes 2014 IRM Model Assumptions Basis for IRM Parameter Recommended Recommendation 2014 RNA Model Change All existing Cable EFORs Same transition rate as provided Cable Forced updated for NYC and LIto SaseTransition stat over Outage Rates reflect most recent five-year Based on TO analysis by TO and held constant over history ten years Emergency Operating Procedure Parameters July 2014 - 1195 MW based Those sold for the program on registrations and modeled discounted to historic 2014 Gold Book, registration Special Case as 758 MW of effective availability. Summer values CAP is similar to IRM but UCAP Resources capacity. Monthly variation calculated from July 2013 based on historical experience registrations (see (no Limit on number of calls) attachment F).

July 2013- 93.9 MW Those sold for the program registered model as 12.8 MW discounted to historic in July and proportional to availability. Summer values CAP andUCAP regbotiml EDRP Resources monthly peak load in other calculated from July 2013 ICAP and UCAP are both similar months. registrations and forecast to IRM Limit to five calls per month growth.

721 MW of non-SCR/non- Based on TO information, Other EOPs EDRP resources measured data, and NYISO Updated as available See Attachment D forecasts External Control Areas Parameters Load and Capacity data LOLE adjusted to between 0.1 PJM provided by PJM/NPCC CP-8, and 0.15 for every year often and may be adjusted per year often NYSRC Policy 5 year period Load and Capacity data LOLE adjusted to between 0.1 ISONE provided by PJM/NPCC CP-8, and 0.15 for every year of ten and may be adjusted per NYSRC Policy 5 Load and Capacity data LOLE adjusted to between 0.1 HQ provided by PJM/NPCC CP-8, and 0.15 for every year of ten and may be adjusted per year perio n NYSRC Policy 5 Load and Capacity data LOLE adjusted to between 0.1 IESO provided by PJM/NPCC CP-8, and 0.15 for every year of ten and may be adjusted per year perio n NYSRC Policy 5 All NPCC Control Areas and Reserve Sharing PJM interconnection indicate Per NPCC CP-8 WG Same that they will share reserves equally among all members Miscellaneous MARS Model Version 3.16.5 Per benchmark testing and Version 3.18 Version ICS recommendation Environmental No estimated impacts based An analysis of generator Updated to most recent NYSDEC Initiatives on review of existing rules and plans to comply with new BTA determination retirement trends regulations in 2014

• Treatment of retired or mothballed units for purposes of RNA modeling: Any generating units that, pursuant to the PSC Orders in Case 05-E-0889, have provided a notice of Retirement, Mothball, etc., by the study lock-down date, were assumed not to be available for the RNA study period.

NYISO 2014 Reliability Needs Assessment D-4

DRAFT- For Discussion Purposes D-1.2 Assumption Matrix for Transmission Security Assessment Parameter,-' Md e, ing'Asu m...onsSr q e "

Peak Load NYCA baseline coincident summer peak 2014 Gold Book forecast ConEd: voltage varying Load model 2014 FERC 715 filing Rest of NYCA: constant power System Per updates received through Databank NYISO RAD Manual, 2014 FERC 715 representation process (Subject to RNA base case filing inclusion rules)

Inter-area Consistent with ERAG MMWG interchange interchange schedule 2014 FERC 715 filing, MMWG schedules Inter-area Consistent with applicable tariffs and 2014 FERC 715 filing controllable tie known firm contracts or rights schedules Consistent with ConEdison operating 2014 FERC 715 filing, ConEd In-city series reactors protocol (All series reactors in-service protocol for summer)

SVCs, FACTS Set at zero pre-contingency; allowed to NYISO T&D Manual adjust post-contingency Transformer & PAR Taps allowed to adjust pre-contingency; 2014 FERC 715 filing taps fixed post-contingency Switched shunts Allowed to adjust pre-contingency; 2014 FERC 715 filing fixed post-contingency Fault current analysis Per Fault Current Assessment Guideline NYISO Fault Current Assessment settings Guideline Power flow: PSS/E v32.2.1, PSS/MUST v11.0, TARA v735 Model Version Dynamics: PSS/E v32.2.1 Short Circuit: ASPEN v12.2 NYISO 2014 Reliability Needs Assessment D-5

DRAFT- For Discussion Purposes D-2 RNA Power Flow Base Case Development and Thermal Transfer Limit Results D- 2.1 Development of RNA Power Flow Base Cases The base cases used in analyzing the performance of the transmission system were developed from the 2014 FERC 715 filing power flow case library. The load representation in the power flow model is the summer peak load forecast reported in the 2014 Gold Book Table 1-2a baseline forecast of coincident peak demand. The system representation for the NPCC Areas in the base cases is from the 2013 Base Case Development (BCD) libraries compiled by the NPCC SS-37 Base Case Development working group. The PJM system representation was derived from the PJM Regional Transmission Expansion Plan (RTEP) planning process models. The remaining models are from the Eastern Interconnection Reliability Assessment Group (ERAG) Multiregional Modeling Working Group (MMWG) 2013 power flow model library.

The 2014 RNA base case model of the New York system representation includes the following new and proposed facilities:

1. TO LTPs for non-bulk transmission facilities and NYPA transmission plans for non-bulk power facilities which are reported to the NYISO as firm transmission plans will be included,

2. TO bulk power system projects not in-service or under construction will be included if:

a. the project is the regulated solution triggered in a prior year, or

b. the project is required in connection with any projects and plans that are included in the Study Period base case, or

c. the project is part of a TO LTP or the NYPA transmission plan, and reported to the NYISO as a firm transmission plan(s), and is expected to be in service within 3 years, and has an approved SRIS or an approved SIS (as applicable), and has received NYPSC certification (or other required regulatory approvals and reviews).

3. Other projects that are in-service or under construction will be included,

4. Other projects not already in-service or under construction will be included and modeled at the contracted-for capacity if they have:

a. an approved SRIS or an approved SIS (as applicable), and

b. a NYPSC certificate, or other required regulatory approvals and complete review under the State Environmental Quality Review Act ("SEQRA") where the NYPSC siting process is not applicable, and

c. an executed contract with a credit worthy entity for at least half of the project capacity.

The RNA base case does not include all projects currently listed on the NYISO's interconnection queue or those shown in the 2014 Gold Book. It includes only those which meet the screening requirements for inclusion. The firm transmission plans included in 2014 RNA base case are included in Table D-1 below.

NYISO 2014 Reliability Needs Assessment D-6

DRAFT - For Discussion Purposes Table D-1: Firm Transmission Plans included in 2014 RNA Base Case I Expected Line In-Service Nominal Voltage Thermal Ratings Project Description / Class Year /

Transmission Length Date/Yr in kV # of Conductor Size Type of On Construction Owner Terminals in Miles Prior to Year Operating Design ckts Summer Winter CHGE North Catskill Feura Bush Series Reactor S 2014 115 115 1 1280 1560 Reactor impedance increase from 12% to 16%

CHGE Pleasant Valley Todd Hill 5.53 W 2015 115 115 1 1280 1563 Rebuild line with 1033 ACSR OH CHGE Todd Hill Fishkill Plains 5.23 W 2015 115 115 1 1280 1563 Rebuild line with 1033 ACSR OH CHGE Hurley Ave Saugerties 11.40 S 2020 115 115 1 1114 1359 1-795 ACSR OH CHGE Saugerties North Catskill 12.46 S 2020 115 115 1 1114 1359 1-795 ACSR OH CHGE St. Pool High Falls 5.61 S 2020 115 115 1 1114 .1359 1-795 ACSR OH CHGE High Falls Kerhonkson 10.03 S 2020 115 115 1 1114 1359 1-795 ACSR OH CHGE Kerhonkson Honk Fails 4.97 S 2020 115 115 2 1114 1359 1-795 ACSR OH CHGE Modena Galeville 4.62 S 2020 115 115 1 1114 1359 1-795 ACSR OH CHGE Galeville Kerhonkson 8.96 S 2020 115 115 1 1114 1359 1-795 ACSR OH ConEd Dunwoodie South Dunwoodie South Phase shifter S 2014 138 138 2 Nominal 132 MVA PAR Retirement ConEd Dunwoodie South Dunwoodie South Phase shifter S 2014 138 138 1 Nominal 300 MVA PAR Replacement ConEd Goethals Goethals Reconfiguration S 2014 345 345 N/A N/A Reconfiguration ConEd Rock Tavern Sugarloaf 13.70 S 2016 345 345 1 1811 MVA 1918 MVA 2-1590 ACSR OH ConEd Goethals Gowanus 12.95 S 2016 345 345 2 632 MVA 679MVA Additional Cooling UG ConEd Gowanus Farragut 4.05 S 2016 345 345 2 800MVA 844MVA Additional Cooling UG ConEd Goethals Unden Co-Gen -1,50 S 2016 345 345 1 2504 2504 Feeder Seperation UG ConEd Goethals Linden Co-Gen 1.50 S 2016 345 345 1 1252 1252 Feeder Seperation UG ConEd Goethals Linden Co-Gen 1.50 S 2016 345 345 1 1252 1252 Feeder Seperation UG ConEd Greenwood Greenwood Reconfiguration S 2018 138 138 N/A N/A Reconfiguration LIPA Holtsville DRSS West Bus N/A S 2014 138 138 - 150 MVAR 150 MVAR Dynamic Reactive Support System (DRSS)

LIPA Randall Ave Wildwood N/A S 2014 138 138 - 150 MVAR 150 MVAR Dynamic Reactive Support System (DRSS)

NGRID Dunkirk Dunkirk Cap Bank W 2014 115 115 1 67 MVAR 67 MVAR Capacitor Bank 2 - 33.3 MVAR NGRID Rome Rome W 2014 115 115 - N/A N/A Station Rebuild NGRID Porter Porter W 2014 115 115 N/A N/A Rebuild 115kV Station NGRID Homer City Stolle Road -204.11 S 2015 345 345 1 1013 1200 New Five Mile substation OH NGRID Homer City Five Mile Rd (New Station) 151.11 5 2015 345 345 1 1013 1200 New Five Mile substation OH NCRID Five Mile Rd (New Station) Stolle Road 53.00 S 2015 345 345 1 1013 1200 New Five Mile substation OH NGRID Gardenville Homer Hill -65.69 S 2015 115 115 2 584 708 New Five Mile substation OH NGRID Gardenvilie Five Mile Rd (New Station) 58.30 S 2015 115 115 2 129MVA 156MVA New Five Mile substation OH NGRID Five Mile Rd (New Station) Five Mile Rd (New Station) xfmr S 2015 345/115 345/115 - 478MVA 590MVA New Five Mile substation NGRID Five Mile Rd (New Station) Homer Hill 8.00 S 2015 115 115 2 129MVA 156MVA New Five Mile substation OH NGRID Clay Clay xfmr S 2015 345/115 345/115 1 478MVA 590MVA Replace Transformer NGRID Rotterdam Bear Swamp -43.64 S 2015 230 230 1 1105 1284 795 ACSR OH NGRID Rotterdam Eastover Road (New Station) 23.20 S 2015 230 230 1 1114 1284 Rotterdam-Bear Swamp #E205 Loop (0.8 miles new) OH NGRID Eastover Road (New Station) Bear Swamp 21.88 S 2015 230 230 1 1105 1347 Rotterdam-Bear Swamp #E205 Loop (0.8 miles new) OH NYISO 2014 Reliability Needs Assessment D-7

0 DRAFT- For Discussion Purposes Expected Une In-Service Nominal Voltage Thermal Ratings Project Description/ Class Year/

Transmission Length Date/Yr in kV # of Conductor Size I Type of Construction Owner Terminals in Miles Prior to Year Operating Design ckts Summer Winter NGRID Eastover Road (New Station) Eastover Road (New Station) Xfmr S 2015 230/115 230/115 1 345MVA 406MVA Transformer NGRID Luther Forest North Troy -18.30 S 2015 115 115 1 937 1141 1033.5 ACSR NGRID Luther Forest Eastover Road (New Station) 17.50 S 2015 115 115 1 937 1141 Luther Forest-North Troy Loop (0.9 miles new)

NGRID Eastover Road (New Station) North Troy 2.60 S 2015 115 115 1 937 1141 Luther Forest-North Troy Loop (0.9 miles new)

NGRID Battenkill North Troy -22.39 S 2015 115 115 1 916 1118 605 ACSR NGRID Battenkill Eastover Road (New Station) 21.59 S 2015 115 115 1 937 1141 Battenkill-North Troy Loop (0.9 miles new)

NGRID Eastover Road (New Station) North Troy 2.60 S 2015 115 115 1 916 ills Battenkill-North Troy Loop (0.9 miles new)

NGRID/NYSE Homer City Five Mile Rd (New Station) -151.11 S 2016 345 345 1 1013 1200 New Five Mile substation NGRID/NYSE Homer City Farmers Valley 120.00 S 2016 345 345 1 1013 1200 New Farmer Valley substation NGRID/NYSE Farmers Valley Five Mile Rd (New Station) 31.00 S 2016 345 345 1 1013 1200 New Farmer Valley substation NGRID Clay Dewitt 10.24 W 2017 115 1 193MVA 245MVA 115 Reconductor 4/0 CUto 795ACSR NGRID Clay Teall 12.75 W 2017 115 1 220 MVA 239MVA 115 Reconductor 4/0 CUto 795ACSR NYPA Moses Willis -37.11 S 2014 230 230 2 876 1121 795 ACSR NYPA Moses Willis 37.11 S 2014 230 1 876 1121 230 795 ACSR NYPA Moses Willis 37.11 S 2014 230 230 1 876 1121 795 ACSR NYPA Moses Moses Cap Bank W 2014 115 115 1 100 MVAR 100 MVAR Cap Bank Installation to Replace Moses Synchronous Condensers NYPA Moses Moses Cap Bank W 2015 115 115 1 100 MVAR 100 MVAR Cap Bank Installation to Replace Moses Synchronous Condensers NYPA Marcy Coopers Corners Series Comp 5 2016 345 345 1 1776 MVA 1793 MVA Installation of Series Compensation on UCC2-41 NYPA Edic Fraser Series Comp 5 2016 345 345 1 1793 MVA 1793 MVA Installation of Series Compensation on EF24-40 NYPA Fraser Coopers Corners Series Camp 5 2016 345 345 1 1494 MVA 1793 MVA Installation of Series Compensation on FCC33 NYPA Niagara Rochester -70.20 W 2016 345 345 1 2177 2662 2-795 ACSR NYPA Niagara Station 255 (New Station) 66.40 W 2016 345 345 1 2177 2662 2-795 ACSR NYPA Station 255 (New Station) Rochester 3.80 W 2016 345 345 1 2177 2662 2-795 ACSR NYPA Dysinger Tap Rochester -44.00 W 2016 345 345 1 2177 2662 2-795 ACSR NYPA Dysinger Tap Station 255 (New Station) 40.20 W 2016 345 345 1 2177 2662 2-795 ACSR NYPA Station 255 (New Station) Rochester 3.80 W 2016 345 345 1 2177 2662 2-795 ACSR NYSEG Meyer Meyer Cap Bank 5 2014 115 115 1 18 MVAR 18 MVAR Capacitor Bank Installation NYSEG Wood Street Katonah 11.70 W 2014 115 115 1 775 945 477 ACSR NYSEG Ashley Road Ashley Road Cap Bank W 2014 115 115 1 150 MVAR 150 MVAR Capacitor Bank (DOE)

NYSEG Big Tree Big Tree Cap Bank W 2014 115 115 1 50 MVAR 50 MVAR Capacitor Bank (DOE)

NYSEG Cooaers Corners Coopers Corners Shunt Reactor W 2014 345 345 1 200 MVAR 200 MVAR Shunt Reactor Installation NYSEG Watercure Road Watercure Road ofmr W 2015 345/230 345/230 1 426 MVA 494 MVA Transformer NYSEG Goudey AES Westover reconfig W 2014 115 115 - N/A N/A substation separation NYSEG Jennison AES Oneonta reconfig W 2014 115 115 N/A N/A substation separation NYSEG Homer City Watercure Road -177.00 S 2015 345 345 1 1549 1552 2156 ACR NYSEG Watercure Road Mainesburg 26.00 S 2015 345 345 1 1549 1552 2156 ACR NYSEG Mainesburg Homer City 151.00 S 2015 345 345 1 1549 1552 2156 ACR NYSEG Wood Street Carmel 1.34 W 2015 115 115 1 775 945 477 ACSR NYISO 2014 Reliability Needs Assessment D-8

DRAFT- For Discussion Purposes I Expected Line In-Service Nominal Voltage Thermal Ratings Project Description / Class Year /

ransmission Length Date/Yr in kV # of Conductor Size Type of Construction Owner Terminals in Miles Prior to Year Operating Design ckts Summer Winter NYSEG Carmel Katonah 13.04 S 2016 115 115 1 1079 1079 convert 46kV to 115kV OH NYSEG Fraser Coopers Corners 21.80 5 2016 345 345 1 2500 3000 ACCR 1742-19 Reconductor OH NYSEG Wood Street Wood Street xfmr S 2016 345/115 345/115 1 280 MVA 300 MVA Transformer NYSEG Elbridge State Street 14.50 W 2016 115 115 1 250 MVA 305 MVA 1033 ACSR OH NYSEG Gardenville Gardenville xfmr S 2017 230/115 230/115 1 200 MVA 225 MVA Transformer NYSEG Klinekill Tap Klinekill <10 W 2017 115 115 1 n=124MVA >=150MVA 477 ACSR OH NYSEG Stephentown Stephentown xfmr W 2017 115/34.5 115/34.5 1 37 MVA 44MVA Transformer NYSEG Colliers Colliers xfmr W 2019 115/46 115/46 1 42MVA 55MVA Transformer NYSEG Colliers Colliers xfmr W 2019 115/46 115/46 1 63MVA 75MVA Transformer NYSEG Carmel Carmel xfmr W 2019 115/46 115/46 1 80MVA 96MVA Transformer O&R Ramapo Sugarloaf 16.00 S 2014 138 345 1 1089 1298 2-1590 ACSR OH O&R New Hempstead Cap Bank S 2014 138 138 1 32MVAR 32MVAR Capacitor bank O&R Hartley Cap Bank S 2014 69 69 1 32 MVAR 32 MVAR Capacitor bank O&R Summit (RECO) Cap Bank W 2015 69 69 1 32MVAR 32MVAR Capacitor bank O&R Ramapo Sugarloaf 16.00 S 2016 345 345 1 3030 3210 2-1590 ACSR OH O&R Sugarloaf Sugarloaf xfmr S 2016 345/138 345/138 1 400 MVA 400 MVA Transformer OH O&R Little Tor Cap Bank S 2016 138 138 1 32 MVAR 32 MVAR Capacitor bank O&R O&R's Line 26 Sterling Forest xfmr S 2016 138/69 138/69 1 175 MVA 175 MVA Transformer O&R Burns Corporate Drive 5.00 S 2016 138 138 1 1980 2120 1272 ACSS OH O&R Harings Corner (RECO) Tappan (NY) S 2015 69 69 1 1096 1314 Three-way switch station OH O&R West Nyack (NY) Harings Corner (RECO) 7.00 W 2019 69 138 1 1604 1723 795 ACSS OH O&R Ramapo Sugarloaf 17.00 W 2020 138 138 1 1980 2120 1272 ACSS OH O&R Montvale (RECO) Cap Bank S 2021 69 69 1 32MVAR 32MVAR Capacitor bank RGE Station 69 Station 69 Cap Bank S 2014 115 115 1 20 MVAR 20MVAR Capacitor Bank (DOE)

RGE Station 67 Station 418 3.5 W 2014 115 115 1 1255 1255 New 115kV Line OH RGE Station 251 Station 251 xfmr W 2014 115/34.5 115/34.5 2 30 MVA 33.8 MVA Transformer RGE Mortimer Station 251 1 W 2014 115 115 2 1396 1707 New 115kV Line OH RGE Station 251 Station 33 0.98 W 2014 115 115 2 1396 1707 New 115kV Line OH RGE Station 23 Station 23 xfmr 5 2015 115/34.5 115/34.5 2 75 MVA 84 MVA Transformer RGE Station 23 Station 23 xsmr S 2015 15/11.5/11 5/11.5/1, 2 75 MVA 64 MS/A Transformer RGE Station 42 Station 23 Phase Shifter 5 2015 115 115 1 253 MVA 285 MVA Phase Shifter RGE Station 168 Station 168 xfmr 5 2015 115/34.5 115/34.5 1 100 MVA 112 MVA Transformer RGE Station 262 Station 262 xfmr S 2015 115/34.5 115/34.5 1 56 MVA 63 MVA Transformer RGE Station 33 Station 262 2.97 W 2015 115 115 1 2008 2409 Underground Cable UG RGE Station 262 Station 23 1.46 W 2015 115 115 1 2008 2409 Underground Cable UG RGE Station 255 (New Station) Rochester 3.80 W 2016 345 345 1 2177 2662 2-795 ACSR OH RGE Station 255 (New Station) Station 255 (New Station) xfmr W 2016 345/115 345/115 2 400 MVA 450 MVA Transformer RGE Station 255 (New Station) Station 418 9.60 W 2016 115 115 1 1506 1807 New 115kV Line OH RGE Station 255 (New Station) Station 23 11.10 W 2016 115 115 1 1506 1807 New 115kV Line OH+UG NYISO 2014 Reliability Needs Assessment D-9 0

DRAFT - For Discussion Purposes D-2.2 Emergency Thermal Transfer Limit Analysis The NYISO performed analyses of the RNA base case to determine emergency thermal transfer limits for the key interfaces to be used in the MARS resource adequacy analysis. Table D-1 reports the emergency thermal transfer limits for the RNA base system conditions:

Table D-1: Emergency Thermal Transfer Limits Interface 2015 2016 2017 2018 2019 Dysinger East 2200 1 2150 1 2100 1 2075 1 2050 1 Volney East 5650 2 5650 2 5650 2 5650 2 5650 2 Moses South 2650 3 2650 3 2650 3 2650 3 2650 3 Central East MARS 4025 4 4500 5 4500 5 4500 5 4500 5 F toG 3475 6 3475 6 3475 6 3475 6 3475 6 UPNY-SENY MARS 5150 6 5600 6 5600 6 5600 6 5600 6 Ito J (Dunwoodie South MARS) 4400 7 4400 7 4400 7 4400 7 4400 7 i to K(Y49/Y50) 1290 8 1290 8 1290 8 1290 8 1290 8 Limiting Facility Rating Contingency 1 Huntley-Gardenville 230 kV (80) 755 Huntley-Gardenville 230 kV (79) 2 Oakdale-Fraser 345kV 1380 Edic-Fraser 345kV 3 Marcy 765/345 T2 transformer 1971 Marcy 765/345 TI transformer 4 New Scotland-Leeds 345kV 1724 New Scotland-Leeds 345kV 5 Porter-Rotterdam 230kV 560 Porter-Rotterdam 230kV 6 Leeds-Pleasant Valley 345 kV 1725 Athens-Pleasant Valley 345 kV 7 Mott Haven-Rainey 345 kV 786 Pre-disturbance 8 Dunwoodie-Shore Rd 345 kV 653 Pre-disturbance Table D-la: Dynamic Limit Tables Oswego Complex Units*

Year Interface All available any 1 out any 2 out any 3 out any 4 out 2015 Central East MARS 3250 3200 3140 3035 2920 CE Group 4800 4725 4640 4485 4310 2016-2024 Central East MARS 3100 3050 2990 2885 2770 CE Group 5000 4925 4840 4685 4510

• 9 Mile Point 1, 9 Mile Point 2, Fitzpatrick, Oswego 5, Oswego 6, Independence (Modeled as one unit in MARS)

NYISO 2014 Reliability Needs Assessment D-10

DRAFT- For Discussion Purposes Huntley/ Dunkirk Units Year Interface All available any I out any 2 out any 3 out 4 out 2950 2650 2200 1575 950 2015 Dysinger East Zone AGroup 3450 2850 2300 1550 775 2900 2600 2150 1525 900 2016 Dysinger East Zone AGroup 3425 2825 2275 1525 750 2850 2550 2100 1475 850 2017 Dysinger East Zone AGroup 3400 2800 2250 1500 725 2825 2525 2075 1450 825 2018 Dysinger East Zone AGroup 3375 2775 2225 1475 700 2800 2500 2050 1425 800 2019 Dysinger East Zone AGroup 3350 2750 2200 1450 675

• Huntley 67, Huntley 68, Dunkirk 3, Dunkirk 4 Barrett Steam units (l and 2)

Year Interface Both available Any 1 out Both out 2015-2024 LI Sum 297 260 144 CE-LIPA (towards Zone J) 510 403 283 Staten Island Units*

AK 3 on, and any one of AK 2, 0

Linden Cogen 1 or Linden Cogen Any 2 (or more)

Year Interface All available 2 out AK3 out out 2015 Dummy Zone J3 to J 200 500 700 815 Staten Island Units*

Year Interface All available Any out 2016-2024 Dummy Zone J3 to 1 600 815

• Arthur Kill 2, Arthur Kill 3, Linden Cogen (Modeled as 2 units in MARS)

PSEG units*

Year Interface All available any I out Any 2 out All out 1000 600 500 400 2015-2024 Dummy Zone J2 to J PJM East to Dummy Zone J2 1000 600 500 400

• Hudson 2, Bergen 2 CC, Linden 2 CC (PJM)

Northport Units Year Interface All available Any out 2015-2024 Norwalk CT to K (NNC) 388 428 NYISO 2014 Reliability Needs Assessment D-11

DRAFT- For Discussion Purposes D-3 2014 RNA MARS Model Base Case Development The system representation for PJM, Ontario, New England, and Hydro Quebec modeled in the 2014 RNA base case was developed from the NPCC CP-8 2012 Summer Assessment. In order to avoid overdependence on emergency assistance from the external areas, the emergency operating procedure data was removed from the model for each External Area. In addition, the capacity of the external areas was further modified such that the LOLE value of each Area was a minimum value of 0.10 and capped at a value of 0.15 through the year 2024. The external area model was then frozen for the remaining study years (2015 - 2024). Because the load forecast in the NYCA continues to increase for the years 2015 - 2024, the LOLE for each of the external areas can experience increases despite the freeze of external loads and capacity.

The topology used in the MARS model is represented in Figures D-1 and D-2 for the year 2015, and Figures D-3 and D-4 for the year 2016. The internal transfer limits modeled are the summer emergency ratings derived from the RNA Power Flow cases discussed above. The external transfer limits are developed from the NPCC CP-8 Summer Assessment MARS database with changes based upon the RNA base case assumptions.

NYISO 2014 Reliability Needs Assessment D-12

DRAFT- For Discussion Purposes Figure D-1: MARS Topology for Year 2015 NYISO 2014 Reliability Needs Assessment D-13

0 DRAFT - For Discussion Purposes Joint interface to monitor flow balan'e (PJM East to RECO) +(PJM Eastto J2) + (PJM East to J3)+ (PJM East to J4) = 3075 MW Figure D-2: PJM-SENY MARS Topology for Year 2015 NYISO 2014 Reliability Needs Assessment D-14

DRAFT- For Discussion Purposes w

- NYCA zonal interfaces 1,500 Dynam ic internal tansfer 'li NYCA zonal connections 1,500 NYCA internal transfer limits Externalconneclions 1o External tansfer limits Standard Grouping NYCA zone

• • • Grouping used formonitoring "Dummy"zoneforanalysis Figure D-3: MARS Topology for Year 2016 NYISO 2014 Reliability Needs Assessment D-15

o DRAFT - For Discussion Purposes Joint interface to monitor flow balahice (PJM East to RECO) + (PJM East to J2) + (PJM East to J3) + (PJM East to J4) = 3075 MW Figure D-4: PJM-SENY MARS Topology for Year 2016 NYISO 2014 Reliability Needs Assessment D-16

DRAFT- For Discussion Purposes D-4 Short Circuit Assessment Table D-2 provides the results of NYISO's short circuit screening test. Individual breaker assessment (IBA) is required for any breakers whose rating is exceeded by the maximum fault current. Either NYISO or the Transmission Owner may complete the IBA.

Table D-2: 2014 RNA Fault Current Analysis Summary Table Substati*n Nominal Lowest Rated 2014 RNA IBA Breaker(s)

TO Maximum Name kV Circuit Breaker nub Bus Fault Required Overdutied Academy 345 63 2 32.6 Adirondack 230 25 5 9.6 AES Somerset 345 32 4 17.9 Alps 345 40 5 17.5 Astoria East 138 63 2 52.2 Astoria West 138 45 2 46.6 Astoria Annex 345 63 2 47.4 Athens 345 50.2 5 33.9 Barrett 138 57.8 3 49.3 Bowline 2 345 40 6 27.6 Bowline 1 345 40 6 27.8 Brookhaven 138 37 3 27.1 Buchanan N. 345 63 2 29.7 Buchanan S. 345 40 2 39 Buchanan 138 40 2 15.9 Stony Creek 230 40 4 9.5 Canandaiagua 230 40 4 6.5 Chases Lake 230 40 5 9.1 Clarks Corners 345 40 4 11.7 Clay 115 46.7 5 36 Clay 345 49 5 32.8 N Coopers Corners 345 32 4 17.2 N Corona 138 63 2 52.5 N Dewitt 345 40 5 18.9 N Duley 230 40 7 7.4 N Dunwoodie No. 138 40 2 34.5 N Dunwoodie So. 138 40 2 30.7 N Dunkirk 230 29 5 9.9 N Dunwoodie 345 63 2 50.6 N East 13th 138 63 2 48 N East 179th 138 63 2 48.6 N NYISO 2014 Reliability Needs Assessment D-17

DRAFT- For Discussion Purposes Substation Nominal Lowest Rated 2014 RNA IBA Breaker(s)

TO Maximum Name kV Circuit Breaker number Bus Fault Required Overdutied East 75 ST 138 63 2 9.1 East Fishkill 345 50 2 38.9 E River 69 50 2 50 Eastview 138 63 2 36.9 Edic 345 41.6 5 32.7 East Garden City 345 63 7 25.4 East Garden City 138 80 3 70.5 Elbridge 345 40 5 16 ELWOOD 1 138 56.6 3 38.5 ELWOOD 2 138 56.6 3 38.2 Farragut 345 63 2 61.8 Fitzpatrick 345 37 7 41.4 Fox Hills 138 40 2 33.7 Fresh Kills 345 63 2 36.1 Fresh Kills 138 40 2 27.1 Fraser 345 29.6 4 19.2 Freeport 138 63 3 35.9 Gardenville 230 31.2 5 21.6 Gilboa 345 40 7 25 Goethals 345 63 2 29.5 Gowanus 345 63 2 28.3 Greenlawn 138 63 3 29.2 Greenwood 138 63 2 49.8 Haupague 138 63 3 22.5 Hellgate 138 63 2 42.8 High Sheldon 230 40 4 10.5 Hillside 230 28.6 4 13.2 Holbrook 138 52.2 3 49 Holtsgt 138 63 3 45.4 Hudson E 138 63 2 39.4 Huntley 230 30.5 5 26.6 Hurley Avenue 345 30.4 9 17.1 Independence 345 44.5 5 38.4 Jamaica 138 63 2 49.2 Ladentown 345 63 6 40.4 Lafayette 345 40 5 17.8 Leeds 345 37.7 5 34.5 Lake Success 138 57.8 3 N 38.7 Marcy 345 63 7 31.9 N Marcy 765 63 7 N 9.8 NYISO 2014 Reliability Needs Assessment D-18

DRAFT - For Discussion Purposes Substation Nominal Lowest Rated 2014 RNA IBA Breaker(s)

TO Maximum Name kV Circuit Breaker number Bus Fault Required Overdutied Massena 765 63 7 7.9 N Meyer 230 28.6 4 7.1 N Middletown Tap 345 63 7 18.6 N Millwood 138 40 2 19.4 N Millwood 345 63 2 44.8 N Mott Haven 345 63 2 51.3 N Newbridge Road 138 80 3 69.4 N Newbridge Road 345 40 3 8.6 N Niagara 345 63 7 33.8 N Niagara E 230 63 7 56.8 Niagara W 230 63 7 56.8 Nine Mile Point 1 345 50 5 43.4 Northport 138 56.2 3 60.8 New Scotland 77B 345 41.5 5 31 New Scotland 99B 345 32.9 5 31 Oakdale 345 29.6 4 12.8 Oakwood 138 57.8 3 28.3 Oswego 345 44.3 5 32.4 Packard 230 48.6 5 43.7 Patnode 230 63 7 9.4 Pilgrim 138 63 3 60.2 Pleasant Valley 345 63 2 40.4 Porter 115 41.1 5 41.3 Porter 230 18.4 5 19.6 Port Jefferson 138 63 3 32.7 Pleasantville 345 63 2 22 Queensbridge 138 63 2 44.8 Rainey 345 63 2 58.4 N Ramapo 345 63 2 45 N Reynolds Road 345 40 5 14.8 N Riverhead 138 63 3 19.1 N Robinson Road 230 34.4 4 14.4 N RockTavern 345 57.9 9 31.4 N Roseton 345 63 9 35.4 N Rotterdam 66H 230 39.4 5 13.3 N Rotterdam 77H 230 23.6 5 13.2 N Rotterdam 99H 230 23.4 5 13.3 N Ruland 138 63 3 45.9 N Ryan 230 63 7 10.6 N South Ripley 230 40 5 9.6 N NYISO 2014 Reliability Needs Assessment D-19

DRAFT- For Discussion Purposes Substation Nominal Lowest Rated 2014 RNA IBA Breaker(s)

ITO Maximum Name kV Circuit Breaker number Bus Fault Required Overdutied

!South Mahwah-A 345 40 6 35 IN N South Mahwah- B 345  ! 40 6 34.7 N N Station 80 345 32 8 17.7 N N Station 122 345 32 B 16.7 N N SpringbrookTR N7 138 63 2 26.9 N N SpringbrookTRS6 138 63 -i 2 29.1 N N Scriba 345 - 55.3 5 46.8 N N Sherman Creek 138 63 45.5 N N Shore Road 345j 63 3 I3278 N N Shore Road1 138 57.8 3 48.2 N N 3 N N Shorehaml 138 52.2 3 28.2 N N Sprain Brook 345 63 2 51.9 N N St. Lawrence 230 37 .L 33.7 N N Stolle Road 345 32 4 14.2 N N Stolle Road 230 28.6 4 5.1 N N Stoneyridge 230 40 4 7.1 IN N Syosset 138 38.9 3 34.3 N N Tremontl 138 63 { N N 132 42.7 Tremont2 138 63 2 42.6 N N Motthaven 138 50 2 13.4 N N Vernon East 138 63 2 44.3 N N Vernon West 138 63 2 34.9 N N Valley Stream 138 63 3 53.7 N N Volney 345 45.1 5 36.5 N N West 49th Street 345 63 .2 52.7 N N Wadngrvl 138 56.4 3 26.1 N N Watercure 230 26.4 4 13.2 N N Watercure 345 29.6 N Weathersfield 230 40 4 9.1 N N Wildwood 138 63 3 28.2 N N Willis 230 37 7 I 12.7 N [ N NYISO 2014 Reliability Needs Assessment D-20

DRAFT- For Discussion Purposes Tables D-3 provides the results of NYISO's IBA for Fitzpatrick 345kV, Porter 230 kV, Astoria West 138 kV, Porter 115 kV, and Northport 138 kV.

Table D-3: NYISO IBA for 2014 RNA Study Fitzpatrick 345 kV Circuit Breaker Rating 3LG 2LG I LG IOverdut, 10042 37 kA 32.4 34.5 34.1 N Astoria W. 138 kV Circuit Breaker Rating 3LG 2LG 1LG Overdut, GIN 45 38.9 42.38 44.15 N G2N 45 38.9 42.38 44.15 N Northport 138 kV Circuit Breaker Rating 3LG 2LG 1LG Overdutb 1310 56.2 52.02 52.5 50.98 N 1320 56.2 52.04 52.08 50.96 N 1450 56.2 49.01 50.83 51.82 N 1460 56.2 26.97 29.38 30.86 N 1470 56.2 31.94 32.43 32.67 N East River 69 kV Circuit Breaker Rating 3LG 2LG 1LG Overdut 53 50 42.8 44.9 46.1 N 63 50 44.9 44.8 46.1 N 73 50 42.7 44.9 46.1 N 83 50 42.8 45.5 47.1 N GGT-2 50 39.7 41.6 42.8 N Gen6 50 39.5 42.2 43.8 N NYISO 2014 Reliability Needs Assessment D-21

DRAFT- For Discussion Purposes Porter 115 kV BREAKER DUTY P DUTYA BKRCAPA OVERDUTY RiO LN1 102.1 43911.4 43000 Y R100 TB3 85.1 36595.3 43000 N R130 LN13 103 44307.7 43000 Y R20LN2 102.1 43910.7 43000 Y R200 TB4 82.2 35336.9 43000 N R30LN3 101.8 43753.4 43000 Y R40LN4 101.7 43713.7 43000 Y R50 LN5 101.7 43732.8 43000 Y R60LN6 103.1 44312.4 43000 Y R70LN7 101.1 43468.7 43000 Y R80LN8 102 43874.6 43000 Y R8105 BUSTLE 87.7 41846.5 47714.9 N R90LN9 103.1 44317.5 43000 Y Porter 230 kV BREAKER DUTY P DUTY A BKR CAPA OVERDUTY RI1O B-11 109.1 26023.6 23857.4 Y R120 B-12 109.1 26023.6 23857.4 Y R15 B-TB1 109.1 26023.6 23857.4 Y R170 B-17 109.1 26023.6 23857.4 Y R25 B-TB2 109.1 26023.6 23857.4 Y R300 B-30 54.2 21686.3 40000 N R310 B-31 54.2 21686.3 40000 N R320 B-30 109.1 26023.6 23857.4 Y R825 31-TB2 104.2 24870.9 23857.4 Y R835 12-TB1 105.1 25082.5 23857.4 Y R845 11-17 104.1 24825.9 23857.4 Y NYISO 2014 Reliability Needs Assessment D-22

DRAFT- For Discussion Purposes D-5 Transmission Security Violations of the 2014 RNA Base Case Normal LTE STE 2015 2019 2024 Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency Flow Flow Flow (MVA) (MVA) (MVA) (%) (%) (%)

N.Grid Packard-Huntley (#77) 230 (Packard-Sawyer) 556 644 704 HUNTLEY - PACKARD 78 230 SB:ROB1230 100.75 N.Grid Packard-Huntley (#78) 230 (Packard-Sawyer) 556 644 746 HUNTLEY - PACKARD 77 230 SB:ROB1230 100.73 N.Grid Huntley-Gardenville (#79) 230 (Huntley-Sawyer) 566 654 755 HUNTLEY - GARDENVILL 80 230 SB:ROB1230 101.54 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 HUNTLEY - GARDENVILL 79 230 SB:ROB1230 101.06 102.72 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 ROBINSON -STOLLRD 65 230 HUNTLEY - GARDENVILL 79 230 100.47 106.6 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 NIAGARA - ROBINSON 64 345 HUNTLEY - GARDENVILL 79 230 S - 106.54 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 LEEDS - HURLEY 301 345 HUNTLEY - GARDENVILL 79 230 103.79 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 ATHENS - PV 91 345 HUNTLEY - GARDENVILL 79 230 103.33 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 HQ-NY 765 HUNTLEY - GARDENVILL 79 230 103.32 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 LEEDS - PV 92 345 HUNTLEY - GARDENVILL 79 230 103.32 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 OS - EL - LFYTE 17 345 HUNTLEY - GARDENVILL 79 230 102.82 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 NIAGARA - ROBINSON 64 345 T:78&79 102.79 N.Grid Huntley-Gardenville (#80) 230 (Huntley-Sawyer) 566 654 755 ROBINSON - STOLLRD 65 230 T:78&79 102.56 RGE Pannell 345/115 1TR 228 282 336 GEN:GINNA SB:PANN34S_1X12282 131.56 RGE Pannell 345/115 1TR 228 282 336 GEN:GINNA SB:ROCH_2T8082 103.97 RGE Pannell 345/115 1TR 228 282 336 GEN:GINNA PANL 345/115 2TR 103.84 RGE Pannell 345/115 2TR 228 282 336 GEN:GINNA SB:PANN345_3T12282 131.56 RGE Pannell 345/115 2TR 228 282 336 GEN:GINNA SB:ROCH_2T8082 103.97 RGE Pannell 345/115 2TR 228 282 336 GEN:GINNA PANL 345/115 1TR 103.84 RGE Pannell 345/115 2TR 228 282 336 GEN:GINNA SB:PANN34S53802 103.54 RGE Pannell-Quaker (#914) 115 207.1 246.9 284.8 GEN:GINNA PANL 345/115 3TR 120.41 RGE Pannell-Quaker (#914) 115 207.1 246.9 284.8 GEN:GINNA SB:PANN345_1X12282 100.73 RGE Pannell-Quaker (#914) 115 207.1 246.9 284.8 GEN:GINNA SB:PANN34S_3T12282 100.73 N.Grid Clay 345/115 1TR 478 637 794 OS - EL - LFYTE 17 345 SB:CLAY345_R130 111.53 118.77 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 CLAY - DEW 13 345 SB:OSWE_R985 104.57 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 OS - EL - LFYTE 17 345 CLAY - DEW 13 345 104.06 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 CLAY - DEW 13 345 T:17&11 102.89 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 CLAY - DEW 13 345 B:ELBRIDGE 102.87 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 CLAY - DEW 13 345 OS - EL - LFYTE 17 345 102.87 N.Grid Clay-Dewitt (#3) 115 (Clay-Bartell Rd) 116 120 145 OS - EL - LFYTE 17 345 SB:CLAY345_R925 102.71 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 SB:OSWER985 N/A 121.61 135.18 139.48 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 SB:LAFA_ELB N/A 121.51 133.23 139.79 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 B:ELBRIDGE N/A 105.72 119.2 122.53 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 OS - EL - LFYTE 17 345 N/A 105.72 119.2 122.53 NYISO 2014 Reliability Needs Assessment D-23 0

DRAFT- For Discussion Purposes Normal LTE STE 2015 2019 2024 Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency Flow Flow Flow (MVA) (MVA) (MVA) N%) (%) (%)

N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 ELBRIDGE 345/115 1TR N/A 105.3 118.66 121.9 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 T:17&11 N/A 104.98 118.4 121.43 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 ELBRIDGE 345/115 1TR Base Case - 119.63 122.96 116 120 145 OS - EL - LFYTE 17 345 Base Case - 119.14 120.84 N.Grid Clay-Lockheed Martin (#14) 115 Clay-Lockheed Martin (#14) 115 116 120 145 CLAY - WOOD 17 115 SB:LAFA_ELB 137.49 169.93 180.03 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 CLAY - WOOD 17 115 SB:OSWE_R985 136.45 169.38 176.78 N.Grid N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 IFYTE - CLARKCRNS 36A 345 SB:OSWE_R985 127.59 149.95 158.11 Clay-Lockheed Martin (#14) 115 116 120 145 ELBRIDGE 345/115 1TR SB:CLAY115_R845 123.88 155.12 159.98 N.Grid 116 120 145 OS - EL - LFYTE 17 345 SB:CLAY115_R845 121.84 154.98 157.7 N.Grid Clay-Lockheed Martin (#14) 115 Clay-Lockheed Martin (#14) 115 116 120 145 CLAY - WOOD 17 115 B:ELBRIDGE 119.37 151.94 157.77 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 CLAY - WOOD 17 115 OS - EL - LFYTE 17 345 119.37 151.94 157.77 N.Grid 116 120 145 ELBRIDGE 345/115 1TR CLAY - WOOD 17 115 118.63 148.2 153.03 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 ELBRIDGE 345/115 1TR S:CLAY115_WOOD_17 118.63 148.2 153.03 N.Grid Clay-Lockheed Martin (#14) 115 116 120 145 HUNTLEY - GARDEN VILL 79 230 SB:OSWE_R985 118.51 142.91 143.55 N.Grid Clay-Lockheed Martin (#14) 115 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 CLAY - TEAL 11 115 SB:DEW1345_R220 109.2 -

116 120 145 CLAY - TEAL 11 115 SB:DEWI345R915 109.18 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 CLAY -TEAL 11 115 SB:DEW1345_R130 109.17 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove)

N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 DEWITT 345/115 2TR SB:CLAY115_R855 107.41 116 120 145 DEWITT 345/115 2TR CLAY -TEAL 11 115 106.88 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 DEWITT 345/115 2TR S:CLAY115_TEAL_11 106.88 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 CLAY - TEAL 11 115 DEWITT 345/115 2TR 105.34 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 116 120 145 CLAY - DEW 13 345 SB:OSWE_R985 103.87 N.Grid Clay-Teall (#10) 115 (Clay-Bartell Rd-Pine Grove) 174 174 174 SB:LAFAELB N/A - - 105.15 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 CLAY - LM 14 115 SB:LAFA_ELB 119.2 126.66 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 CLAY - LM 14 115 SB:OSWE_R985 113.05 118.41 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 GEN:GINNA SB:LAFA_ELB 110.13 111.87 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 NIAGARA - ROBINSON 64 345 SB:LAFA_ELB 108.52 108.45 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 EDIC - FRASER 345 SC SB:LAFA_ELB 107.88 112.72 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 ROBINSON - STOLLRD 65 230 SB:LAFAELB 107.67 107.96 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 HUNTLEY - GARDENVILL 79 230 SB:LAFA_ELB 106.9 108.4 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 OS - EL- LFYTE 17 345 SB:CLAY115_R865 106.49 108.46 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 PANL - CLAY PC-1 345 SB:LAFA_ELB 106.18 112.4 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 174 174 174 PANL - CLAY PC-2 345 SB:LAFA_ELB 106.17 112.45 N.Grid Clay-Woodard (#17) 115 (Euclid-Woodward) 104 104 104 CLAY 345/115 1TR SB:CLAY345_R130 109.56 112.9 N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 OSW - VOL 12 345 T:17&11 S - 107.75 N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 CLAY 345/115 2TR SB:CLAY345_R35 100.01 103.54 N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 CLAY 345/115 1TR SB:CLAY345_R60 S - 102.35 N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 CLAY 345/115 2TR SB:CLAY345_R260 -

S 102 N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker)

NYISO 2014 Reliability Needs Assessment D-24

DRAFT- For Discussion Purposes Normal LTE STE 2015 2019 2024 Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency Flow Flow Flow (MVA) (MVA) (MVA) (%) (%) (%)

C N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 OS - EL - LFYTE 17 345 SB:CLAY345_R130 101 C N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 CLAY 345/115 2TR SB:CLAY345_R80 100.96 C N.Grid S. Oswego-Clay (#4) 115 (S. Oswego-Whitaker) 104 104 104 CLAY 345/115 1TR SB:CLAY345_R45 100.87 C NGrid Oakdale 345/115 2TR 428 556 600 OKDLE 345/115 3TR Base Case 102.85 103.75 C N.Grid Oakdale 345/115 2TR 428 556 600 FRASER 345/115 2TR SB:OAKD345_31-B322 103.2 105.42 C N.Grid Oakdale 345/115 2TR 428 556 600 WATERCURE 345/230 1TR SB:OAKD345_B3-3222 102.88 - -

C N.Grid Oakdale 345/115 3TR 428 556 600 OKDLE 345/115 2TR Base Case - - 102.22 E N.Grid Porter-Oneida (#7) 115 (Porter-W. Utica) 116 120 145 OS - EL - LFYTE 17 345 SB:CLAY345_R130 101.87 104.16 E N.Grid Porter-Oneida (#7) 115 (Porter-W. Utica) 116 120 145 CLAY - DEW 13 345 SB:OSWER985 S - 104.73 E N.Grid Porter-Oneida (#7) 115 (Porter-W. Utica) 116 120 145 PTR YAHN 115 SB:OSWER985 101.06 -

E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 OS - EL - LFYTE 17 345 SB:CLAY34S_R130 106.37 117.17 118.53 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY - DEW 13 345 SB:OSWE_R985 104.82 115.54 119.01 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY 345/115 1TR SB:CLAY345_R130 100.43 113.63 113.46 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 OS - EL - LFYTE 17 345 SB:CLAY345_R925 - 108.25 108.91 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY 345/115 1TR SB:OSWE_R985 107.77 108.23 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY 345/115 2TR SB:OSWE_R985 107.53 108.02 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY - DEW 13 345 B:ELBRIDGE 106.13 108.79 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY - DEW 13 345 OS - EL - LFYTE 17 345 106.13 108.79 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 CLAY - DEW 13 345 T:17&11 105.85 108.52 F N.Grid New Scotland 345/115 1TR 458 570 731 GEN:BETHSTM Base Case S - 106.05 E N.Grid Porter-Yahnundasis (#3) 115 (Porter-Kelsey) 116 120 145 PTR TRMNL 115 S:PTR11S_SCHLR S - 110.12 F N.Grid New Scotland 345/115 1TR 458 570 731 GEN:BETHSTM B:N.S._77 110.56 115.54 146.76 F N.Grid New Scotland 345/115 1TR 458 570 731 GEN:BETHSTM N.SCOT77 345/115 2TR 106 110.45 128.17 F N.Grid New Scotland 345/115 1TR 458 570 731 N.SCOT77 345/115 2TR G:BETHSTM 108.85 125.99 F N.Grid New Scotland 345/115 ITR 458 570 731 GEN:BETHSTM S:Reynolds-Rey 345/115 S - 120.76 F N.Grid New Scotland 345/115 ITR 458 570 731 GEN:BETHSTM S:EMPIRE 119.66 F N.Grid New Scotland 345/115 1TR 458 570 731 N.SCOT99 - LEEDS 94 345 B:N.S._77 111.99 F N.Grid Reynolds 345/115 459 562 755 GEN:BETHSTM Base Case 107.06 108.49 127.15 F N.Grid Reynolds 345/115 459 562 755 EASTOVER - BEARSWMP 230 G:BETHSTM - - 126.12 F N.Grid Reynolds 345/115 459 562 755 EASTOVER 230/115 1XTR GEN:BETHSTM 121.86 F N.Grid Reynolds 345/115 459 562 755 GEN:BETHSTM N.SCOT77 345/115 1TR 120.57 F N.Grid Reynolds 345/115 459 562 755 N.SCOT77 345/115 2TR GEN:BETHSTM 117.66 F N.Grid Reynolds 345/115 459 562 755 N.SCOT77 345/115 1TR GEN:BETHSTM 115.31 F N.Grid Reynolds 345/115 459 562 755 LEEDS - HURLEY 301 345 ALPS - REYNOLDS 1 345 101.44 F N.Grid Rotterdam 230/115 7TR 300 355 402 EASTOVER 230/115 1XTR SB:ROTT_230_R84 123.31 112.59 122.44 F N.Grid Rotterdam 230/115 7TR 300 355 402 ROTTERDAM 230/115 1XTR ROTTERDAM 230/115 3XTR - - 116.41 F N.Grid Rotterdam 230/115 7TR 300 355 402 ROTTERDAM 230/115 3XTR ROTTERDAM 230/115 1XTR -

S 116.32 NYISO 2014 Reliability Needs Assessment D-25

DRAFT- For Discussion Purposes Normal LTE STE 2015 2019 2024 Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency Flow Flow Flow (MVA) (MVA) (MVA) (%N (%) (%N F-G N.Grid Athens-Pleasant Valley (#91) 345 1331 1538 1724 LEEDS - PV 92 345 T:41&33 102.98 F-G N.Grid Athens-Pleasant Valley (#91) 345 1331 1538 1724 LEEDS - PV 92 345 T:34&42 100.74 F-G N.Grid Leeds-Pleasant Valley (#92) 345 1331 1538 1724 ATHENS - PV 91 345 T:41&33 103.2 F-G N.Grid Leeds-Pleasant Valley (#92) 345 1331 1538 1724 ATHENS - PV 91 345 T:34&42 100.94 NYISO 2014 Reliability Needs Assessment D-26

DRAFT- For Discussion Purposes Normal LTE STE 2015 2019 2024 Zone Owner Monitored Element Rating Rating Rating First Contingency Second Contingency Flow Flow Flow (MVA) (MVA) (MVA) (%) (%) (%N F-G N.Grid Athens-Pleasant Valley (#91) 345 1331 1538 1724 LEEDS - PV 92 345 T:41&33 102.98 F-G N.Grid Athens-Pleasant Valley (#91) 345 1331 1538 1724 LEEDS - PV 92 345 T:34&42 100.74 F-G N.Grid Leeds-Pleasant Valley (#92) 345 1331 1538 1724 ATHENS - PV 91 345 T:41&33 103.2 F-G N.Grid Leeds-Pleasant Valley (#92) 345 1331 1538 1724 ATHENS - PV 91 345 T:34&42 100.94 NYISO 2014 Reliability Needs Assessment D-26

.1 Lbuitedl tatts 1$n te WASHINGTON, DC 20510 September 18, 2014

Dear Reader:

As colleagues on the Senate Committee on Energy and Natural Resources, it is our privilege to help shape the focus and direction of the United States' energy policies. Through both rigorous analysis and practical experience, we believe energy is good, and that access to affordable energy is essential.

Among affordable energy's many benefits is the ability to heat our homes in winter, cool them in summer, and to accomplish with the flip of a switch tasks that took previous generations hours of back-breaking labor. The modem conveniences associated with affordable energy have enabled Americans to make more effective use of our most valuable commodity - our time. In turn, they have made our daily lives easier, to say nothing of the material comforts they provide and the high standard of living they enable. They have also freed us to pursue a variety of interests, including more formal education and careers.

We have come a long way. But we must also recognize that affordable energy is hardly guaranteed - and hardly universal. The lack of affordable energy disproportionally impacts minorities and the working poor, and many families feel the sting of high energy costs. Far too often, residents from our home states of Alaska and South Carolina stop us on the street or write letters detailing their heartbreaking struggle with rising energy prices.

In Aniak, Alaska, a foster mother shared her bill for five gallons of stove oil. She simply could not afford to heat her home and provide other essentials for her children. Her receipt graphically illustrates her plight and resonates with us, as no parent should be forced to decide between home heating and food for the family.

A woman from McClellanville, South Carolina, recently explained how she diligently takes online surveys to get an extra $25 for groceries - canned food and a small packet of meat - and is still consistently a few hundred dollars short of making rent and paying utilities.

We hear these stories from our home states every day, and even the national press, such as the Los Angeles Times, periodically tells their stories:

"Holy Jiminy Christmas, what we're going through," said Dora Napoka, 49, the librarian at the village school [in Tuluksak, Alaska]. "It's like we have to choose between six

gallons of stove oil or six gallons of gas to go out and get the firewood - or does my baby need infant milk? Which one is more important?"

Many of these troubling stories involve the elderly or disabled - those living on fixed incomes who struggle over whether to spend their precious dollars on much-needed, quality of life medicine or increasing utility bills, like a woman from Columbia, South Carolina recently revealed.

These are just a small sampling of the real life, everyday pain that too many in our home states and around the country are experiencing. Most are not looking for a handout, they're asking for a hand up - an opportunity to work hard, prosper, and change their life for the better. Yet even a slight increase in energy prices could be devastating to their future aspirations.

Another tragic story caone from Lancaster, South Carolina where a woman agonizes over wanting nothing more than to have a good paying job to help pay the rent and power bills. She has to spend so much on her household utilities that she might soon be unable to keep her vehicle, which will make getting ajob that much more difficult.

The Mayor of North Pole, Alaska, highlighted how affordable energy can impact a state's economy in a letter to the editor of the Anchorage Daily News:

"If our residents can't spend extra money because every month, especially in the winter, they're scrimping just to pay for heating and lighting their homes, then many of our businesses will also be hurting for lack of sales [...] If a store cuts back or goes out of business, then people are out of work, making it even more difficult for them to pay for essential heat and electricity, and that exacerbates the economic downturn!"

These real-life stories and experiences - along with many others not listed here - compelled us to work together to devise a method to measure the extent of this problem. We are pleased to offer in this paper several new tools, the Indicators of Energy Insecurity (IEIs), which can be used to quantify certain effects of rising household energy costs. As we seek to understand the consequences of higher energy costs, the JEls will enable us to estimate how many families are pushed below the poverty line, how many lose a significant portion of their spendable budget, and how many are forced to spend more than 10 percent of their income on home energy.

It is important to remember that the individuals and families facing these circumstances because of energy costs are more than just numbers on a chart. These are people: our friends, our neighbors, our coworkers, and our fellow citizens. It should be our goal to keep energy affordable, and ensure that they never face the harsh choice between paying for household energy or other basic necessities.

We hope this paper will initiate a new discussion about American energy insecurity and the dangers associated with rising household energy costs. We welcome your engagement on this important issue, and look forward to a renewed effort to ensure that the benefits of affordable energy flow to more - and ultimately all - Americans.

Sincerely, Lisa Murkowski Tim Scott United States Senator United States Senator

PLENTY AT STAKE:

INDICATORS Or AMERICAN ENERGY INSECURITY Summary

" A foundational pillar of our American way of life is access to affordable energy. Today nearly all Americans can obtain electricity, home heating and cooling, cooking fuels, refrigeration, potable water, and communications connectivity. The domestic production and availability of natural gas, oil, nuclear power, coal, hydropower, wind, solar, and other renewables provides Americans with energy security, the access to uninterruptable energy sources at an affordable price.

• However, too many Americans suffer from energy insecurity; they cannot afford the energy required to heat or cool their homes or secure other basic needs such as refrigeration. These Americans are still too often faced with harsh choices between paying for energy and paying for food, medical care, and other necessities.

" The Indicators of Energy Insecurity (IEIs) described in this paper are intended to enable policyrnakers to consider, in quantitative terms, how a specific action will affect Americans living in all 50 states and the District of Columbia, and thus provide a new way to evaluate public policies and other events that impact energy prices. When energy prices rise, the lEls can be used to quantify:

o The number of households that experience a significant decrease in spendable budget; o The number of households pushed below the poverty line; and o The average household energy burden, expressed as a percentage of average gross income.

• The JEls illuminate a critical goal -affordability- that must be incorporated in our nation's energy policies.

• Some of the critical findings of this initial use of the IEls on approximately 1.35 million U.S. Census Bureau records are that a 10 percent increase in household energy costs leads to approximately:

o 840,000 people across the U.S. being pushed into poverty; o 7 million additional people across the U.S. spending over 10 percent of their gross household income on home energy; and o 65 percent of all families spending additional money on home energy that could be used to buy between one and three weeks' worth of groceries.

A 10 percent increase in energy costs is certainly possible, as evidenced by a 110 percent increase in electricity prices in Australia in recent years and a 15 percent increase in electricity prices in Germany from early 2011 to early 2013. Additionally, Fairbanks, Alaska, experienced a 66 percent increase in heating oil costs over the past seven years.

• Poorer households are naturally more sensitive to increases in energy costs and are at far greater risk of energy insecurity.

I

PLENTY AT STAKE:

INDICATORS OF AMERICAN ENERGY INSECURITY The American quality of life continues to be the envy of nations around the world. While many different factors contribute to it, a foundational pillar is our access to affordable energy. Today nearly all Americans can obtain electricity, home heating and cooling, clean cooking fuels, refrigeration, potable water, and communications connectivity. All of these services in turn rely on basic energy resources such as natural gas, oil, nuclear power, coal, hydropower, wind, solar, and other renewables. The domestic availability and production of those resources provides Americans with energy security, the access to uninterruptable energy sources at an affordable price. 1 Even in the land of energy plenty, however, too many Americans suffer from energy insecurity; they cannot afford the energy required to heat or cool their homes or secure other basic needs such as refrigeration. These Americans, while not suffering from extreme "energy poverty," 2 are still too often faced with harsh choices between paying for energy and paying for food, medical care, and other basic needs. Their plight forces us to confront two important questions: What is the social cost of increased energy prices? And, conversely, what is the social benefit of lower energy prices?

This paper addresses those questions and provides three ways of quantifying the impacts of rising energy costs on American households and families. When energy prices rise, the Indicators of Energy Insecurity (1Els) introduced here can be used to quantify:

I. The number of households that experience a significant decrease in spendable budget;

2. The number of households pushed below the poverty line; and

3. The average household energy burden, expressed as a percentage of average gross income.

international Energy Agency and Energy Security as a Grand Strategy (Report from the Energy Security as a Grand Strategy Workshop, May 7-8, 2012. Editors Pamela i. Sydelko, Sheila R. Ronis, and Leah B. Guzowski.

Published by Argonne National Laboratory, May 2013).

Although this paper focuses on American energy insecurity, global energy poverty is a more severe and even more challenging problem. Defined as a lack of access to electricity and clean cooking fuels by the International Energy Agency (hltp://www.iea.org/topicslenergypoverty/), global energy poverty impacts more than one billion people around the world. It is associated with a dramatically lower quality of life than we are fortunate to enjoy in America, as those without reliable access to energy face heightened risks of disease, malnourishment, and premature death. The lack of access to energy also inhibits economic growth. It bears noting, in the context of this paper, that many of the federal policies that are relevant for addressing energy poverty are complementary to those associated with energy insecurity. Increasing domestic production of hydrocarbons, for example, and encouraging energy exports to help other nations can not only help moderate if not push down energy prices at home, but also reduce the U.S. trade deficit and create domestic jobs, all of which ameliorate the challenges of energy insecurity.

2

The IEls are intended to enable policymakers to see clearly, in quantitative terms, how a specific action will affect Americans living in all 50 states and the District of Columbia, and thus provide a new way to evaluate public policies and other events that impact energy prices. The IEIs illustrate real-world impacts that rising energy prices have on domestic households, including how many Americans will face energy insecurity or outright poverty. Fundamentally, the IEIs illuminate a critical goal - affordability -that must be incorporated in our nation's energy 3

policies.

Defining Enerev Insecurity A useful definition of energy insecurity comes not from American law, but from Great Britain's Warm Homes and Energy ConservationAct. It defines energy insecurity to include both fuel poverty, the inability to pay for the heating or cooling required to maintain a home at a reasonable temperature, 4 and the loss of access to electricity through cessation of service due to non-payment or other factors.

Energy insecurity causes stress for many Americans on a day-to-day basis and negatively impacts increasing portions of the population as energy prices rise. Energy price increases can of course be deliberate, as a result of policies, or unexpected, such as those that resulted from added demand for heating during last winter's "polar vortex" events. 5 Residential electricity prices for the first half of 2014, a period impacted by the "polar vortex," had the highest year-over-year increase since 2009, with overall prices up 3.2 percent and New England's prices up 11.9 6

percent.

Individuals and families experiencing energy insecurity commonly make sacrifices to reduce their costs, such as: 7

• Reducing other household spending by making trade-offs, which can include the diminished ability to buy food or to pay for medical care and education;

" Increasing debt, which can include being late on payments to energy suppliers or increased borrowing from other lenders; 3 See, e.g., Energy 20/20: A Visionfor America's Energy Future, Senator Lisa Murkowski, February 4, 2013, http://www.energv.senate.gov!public/index.cfm/documents-republicans.

4Warm Homes and Energy Conservation Act, http://www.legislation.gov.uklukpga/2000/3 l/section/l/enacted.

5Propane Supply, Energy Information Administration (ETA) Administrator Adam Sieminski, briefing to the U.S.

Senate Committee on Energy and Natural Resources, January 28, 2014.

6 U.S. Energy Information Administration, August 2014 Electric Power Monthly.

7Wallace, A., A. Wright, and P. Fleming, Fuel poverty and household energy efficiency in England. Institute of Energy and Sustainable Development, De Montfort University, January 2008, and Urge-Vorsatz, D., and S.T.

Herrero, Employment, energy security and fuel poverty implications of the large-scale, deep retrofitting of the Hungarian building stock, Presented at TEA Fuel Poverty Workshop: Evaluating the Co-Benefits of Low-Income Weatherisation Programmes, Dublin, Ireland, January 2011.

3

" Switching fuels to less expensive albeit less convenient and with greater emissions options (e.g., from oil to firewood);

" Maintaining low or high indoor temperatures when heating or cooling, respectively; and

" Closing off rooms or sections of a residence to avoid heating or cooling those areas.

The effects of these sacrifices are heightened odds of food insecurity, more frequent relocations, poorer health, decreased educational achievement, and reduced productivity.8 Fairbanks, Alaska, is one example of a community that faces energy insecurity challenges.

Located in the interior part of the State, its winter temperatures are extremely cold: the average high temperature in January is just three degrees Fahrenheit, while the lowest winter temperature ever recorded is -66 degrees Fahrenheit (not including wind chill). 9 Clearly, local residents' ability to heat their homes is critical. In recent years, however, the cost of heating oil in Fairbanks has increased dramatically (66 percent between June 2007 and January 2014).10 As prices have risen, the household energy burden of local residents has increased significantly. To help lower their energy bills, more people have shifted to burning wood for space heating. This has impacted the population in several ways, all of which have had adverse effects on human health. "

While Alaska may appear to be a special case, home heating plays a significant role in energy consumed throughout the United States: over 40 percent of total household energy consumption is for space heating. Other household energy spending breaks down at about 35 percent for lighting, appliances, and electronics; 18 percent for water heating; and six percent for air

• Cook, J., Frank, D., 2008, Food security, poverty, and human development in the United States, Annals of the New York Academy of Sciences 1136, 193-209.; Frank, D.A., Heat or Eat: Children's Health Watch, Presented at lEA Fuel Poverty Workshop: Evaluating the Co-Benefits of Low-Income Weatherisation Programmes, Dublin, Ireland, January 2011; Boardman, B., Quality of life benefits (problems) that are hard to measure Presented at TEA Fuel Poverty Workshop: Evaluating the Co-Benefits of Low-Income Weatherisation Programmes, Dublin, Ireland, January 2011; and Home Energy Affordability Gap: 2011, Connecticut Legislative Districts, Prepared for Operation Fuel, Bloomfield, Connecticut, by Colton, R.D. of Fisher, Sheehan & Colton, Belmont, Massachusetts, December 2011.

9htto://www.weather.com/weather/wxclimatology/monthly/`grRh/USAKO083.

'0 Calculated from heating oil number one prices obtained from the Alaska Fuel Price Report: Current Community Conditions January 2014, published by the State of Alaska Department of Commerce, Community, and Economic Development, Division of Community and Regional Affairs and Current Community Conditions: Fuel Prices Across Alaska, June 2007 Update, published by the State of Alaska Department of Commerce, Community, and Economic Development Division of Community Advocacy, Research and Analysis Section.

11 Switching to firewood also increased the time required to heat homes (wood collection, preparation, etc.), and led to increased wood smoke emissions. These emissions have decreased air quality in the city; EPA has declared the city in non-attainment of the National Ambient Air Quality Standards (NAAQS) for fine particulate matter. NAAQS are intended to protect the health of United States citizens.

4

conditioning.12 Given that most Americans use those services every day, if not every hour, household energy costs ultimately represent a sizeable expense.

According to the Energy Information Administration (EIA), the average household "spent

$1,945 on heating, cooling, appliances, electronics, and lighting in 2012 [...] 2.7% of household income." 13 Energy costs for people above and below the poverty line are very similar in absolute dollars, but, not unexpectedly, wealthier households spend a smaller percentage of their income on energy than poorer households.14 Poorer households are naturally more sensitive to increases in energy costs and are at far greater risk of energy insecurity.

Indicators of Energy Insecurity New ways to quantify Americans who are in or at risk of energy insecurity are needed to assess the impacts of potential increases in home energy costs.15 Accordingly, the following sections detail three methods for quantifying the effects of energy costs on household budgets, the number of families in poverty, and the average household energy burden. The detailed analysis behind these conclusions can be found in Appendix 1.

HouseholdBudget Cuts An obvious way to map the available household budget after energy costs is to subtract energy spending from gross income. If energy costs increase, the money required to pay those costs comes out of the budget available for other essential needs. Given the essential nature of energy, the associated price increases often crowd-out or eliminate other household essentials including food, clothing, medical care, and education.

Figures I and 2 show the direct impacts of increasing household energy costs on family budgets.

(Note that we are illustrating the IEI methodology in these figures for South Carolina, which, along with Alaska, is representative of the nation as a whole.) Figure 1 shows the share of households paying more for energy for various ranges of energy price increases. For example, a 10 percent increase in household energy costs results in over 80 percent of all families spending an additional $100-$500 per year on energy. If energy costs rise 50 percent, nearly 90 percent of 12EIA, Today in Energy, March 7,2013, http:/iwww.¢iaegov/todayinenergy/detail.cfm?id=10271. Data from 2009.

13ETA, Today in Energy, April 18, 2013, http://www.eia,gov/todavinenergy/detail.cfm?id= 10891.

14 Home Energy Affordability Gap: 2011, Connecticut Legislative Districts, Prepared for Operation Fuel, Bloomfield, Connecticut, by Colton, R.D. of Fisher, Sheehan & Colton, Belmont, Massachusetts, December 2011.

" The IEls do not encompass transportation costs, which consume an additional portion of each household's income. Transportation costs are significant; for example, the Energy Information Administration reported that "Gasoline expenditures in 2012 for the average U.S. household reached $2,912, or just under 4% of income before taxes." (EMA, Today in Energy, February 4, 2013, http://www.eia.gov/todayinenergy/detail.cfin?id--983 1). The costs included within the lEls are those associated with fuels and electricity for heating and cooling, cooking, heating water, lighting, using appliances, and other non-transportation usages.

5

More American Family Budgets Impacted as Energy Costs Increase Increased Dollar Costs per Household as a Function of Percent Increase In Household Energy Costs (South Carolina) 8S0-S2o0 0S100-$250 Szso2SSO0 0Ssoo.SoWo mSIOOO-S2500 MS25OM-S500om> SQ0o 100 80 70

~1160 5s0 A.

40 30 20 10 1% 5% 10% 20% 30% 40% .50%

Plercut Increase InHousehold EnuCofts Figure1. Increase in share of ho usehl~ds spending more on the energy budget as afunction of increases in energy costs.

households would be spending an additional $500-$2500 per year. It bears noting that a 50 percent increase in energy costs is certainly possible, as evidenced by a 110 percent increase in electricity prices recorded in Australia in recent years. 16 Similarly, Germany and the U.K. saw a 15 and 22 percent increase in electricity prices, respectively, from the first half of 2011 to the first half of 2013.'

Figure 2 illustrates Euopseahol missioulbtheEospedigat, household budget impacts 0-20 additiooeuon~al from Figure eurttt pceroa I in terms yexoar.It of theot'in earsnd reduction leaHalf-in the average grocery budget for a famnily of four." Figure 2 shows that a small increase in energy costs can have 15earl2 a dramatic anpa ereticraei rcs electricity impactis onafoa family's eric2s, food budget. fr3 respetively A 10 th8eUfrsth percent increase kh20in YB ofr energy Itonth.

costs equates to an amount equal to what the household would spend on groceries over a one to three week period.

16 http://www. foxnews .com/lworld./201 3/09/06`/a-ýýýustralian-voters-angery-over-hiizh-clectricity-bi IIs-ready-to-punish-o . _ ___

Using the U.S. Department of Agriculture thrifty food plan, the tightest budget plan at $149.90 per week. The thrifty plan was chosen because it most represents the budgets of those who have the least to spend.

6

American Families Have Less Food Available When Energy Costs Increase Number of Weeks of Food a Family of Four Could Purchase with the Money Used to Pay Increased Energy Costs asa Function of the Percent increase in Household Energy Costs (South Carolina) 0 < I week of groceries 03 1-2 weeks of groceries U 2-3 weeks of groceries 0 3-4 weeks of groceries 0 4-6 weeks of groceries

• 6-8 weeks of groceries 0 >8 weeks of groceries 1too 90 90 70 160 50 30 ill.

20 10 0% 1% 5% 1111-10% 20% 30%

Percent Increase In Household Energy Costs 40% 50%

igure2. Share of households with specified number of weeks ofgrocerieseliminatedby money used to pay higher energy costs. (Grocerybudgetfrom USDA thriftyplan,family offour.)

PushingHouseholds Below The Poverty Line Another way to look at the impacts of increasing energy costs is to quantify how many families are pushed below the poverty line as household budgets are saddled by additional energy costs.

Figure 3 shows, on a state-by-state basis, the number of individuals falling below the poverty line in the United States when home energy costs are increased by 10 percent. Taken as a whole, more than 300,000 additional households with over 840,000 Americans would be pushed below the poverty line. A 10 percent increase in energy costs was chosen because it is realistic, and could be the result of the enactment of public policies, shifting market conditions, or unexpected events. Higher increases are also possible.

As with the household budget cut described above, Southeastern states are more significantly impacted than the rest of the country.

7

Americans Entering Poverty h, 562-3,176 h1 3,176-8,653 L 8,653-15,017 h 15,017-23,656 23,656-79,346

, S F4 lure 3. Number ofpeople pushed below the poverty line as home energy costs increaseby 10 percent.

8

IHouseholdEnergy Burden The third 1E1for illustrating the impacts of energy costs on households is to calculate the increase in a household's energy burden, which can help predict increasing levels of energy insecurity.

Figure 4 shows the average household energy burden in each state as a percentage of total household income. 19 As might be expected, the areas with the highest shares of families in energy insecurity correspond closely with the areas of the highest percentage of families facing a significant budget cut or being forced into poverty due to an increase in home energy costs.

These household budgets are already stressed so any additional energy costs resulting from increasing energy prices substantially impacts them.

Importantly, there are a significant number of households in energy insecurity that are not below the poverty line (Figures 5 and 6). This can be seen when the share of households with energy insecurity (i.e., high energy burdens) is divided into two categories based on the poverty line.

The first category shows the energy burden only for households below the poverty line (Figure 5); the second shows energy burdens for households above thepoverty line (Figure 6).

It is noteworthy that the percentages of households in each category are very similar tbr most states. The Southern states have higher percentages of households in both poverty and energy insecurity than the rest of the country. The Northeastern states have higher percentages of households in energy insecurity but not in poverty, compared to households in both energy insecurity and poverty. States on the West Coast have lower percentages of households in energy insecurity, both in and not in poverty, than the rest of the country.

Almost three million households or 7 million people will enter energy insecurity across the country if household energy costs increase by 10 percent. For example, the total would be approximately 19,000 and 132,000 households in Alaska and South Carolina, respectively.

19 Household Energy Burden = Household Energy Costs x 100 HEouseehold Income 9

Percent of Households with High Household Energy Burden hk 10-14 hi 14-16 A j 16-18 h 18-22 h, 22-30 Figure 4. A map showing the spatialdistributionof the percentage of households with a high household energy burden (spending more than ten percent of householdgross income on home energy) in each state in 2012. The colors representdifferent quintiles ofenergy insecurity,with states depicted in red having the highest incidence of energy insecurity.

I0

Percent of Households with High Household Energy Burden in Poverty b1 5-7 hi7-8

~8-9 hll 9-12 h 12-18 ,8.A*

'd Figure5. The spatialdistributionof households in each state with high householdenergy burdens and in poverty, expressed as apercentage of total households.

II

Percent of Households with High Household Energy Burden that Are Not in Poverty h 4-6 h 6-8 8-9 h 9-11 h 11-16 '4 .00 S

Figure6. The spatialdistributionofhouseholds in each state with high household energy burdens that are not in poverty, again expressed as a percentage of total households.

Clearly, rising household income reduces the impact of current or increasing energy costs. As shown in Figures 7 and 8, households with incomes just above the poverty level are most impacted by changes in household energy costs.

12

Small Increase in Energy Costs Sends Significant Number of Non-impoverished Households into Energy Insecurity Households with High Household Energy Burden (Inltily and After a 10 Percent Increase In Home Energy Costs) as a Function of Household Income (South Carolina) 90000 m Ik .J* m A* L...... LAk*..... L l l* ....... L*I* * ....

N Noumbe rpf 14USehoin WitlnI High ousenolo nenray Burden I8000 6 Numberof Households w~h HighHouseholdEno MEY Burden after 10 PorcenflIncefase InEnergy Costs 670000 J50000 40000 110000 000 9

S dp d dp dp  ? ?d dp dp OP OP d

%_P P' JP 4 MNN9%

t "

.7p

'0 'P P P

lip Figure 7. The distributionof households with energy insecurity as measuredby high household energy burdens but not in poverty as afiuctionof householdincomefor South Carolinafor the originalcase (blue) and a 10 increase in energy costs (red). South Carolinademonstrates the impact of coolingcosts on energy insecurity.

13

Small Increase in Energy Costs Sends Significant Number of Non-Impoverished Households into Energy Insecurity Households with High Hous ld Ene Burden (Initially and After a 10 Percent Increue In Home Energy Costs) as e Function of Household Income (Aladm) 9000 UNumber of HouS1owids with HWh HOusehold Energy Burden W100 I ,1m. fU.WTUW nut k.,

Burden after 10 Peroent increase in EnergyCOMt I:

J7000 0i J3000 11000li dp )

-f 4P Op 4PP 01.SIP' sfý.P ;P '., il- o,9e N ,N N -0 4N

,, 9 Iq" 9 mhold kxome Figure8. The distributionofhouseholds with energy insecurity,as measured by high household energy, but not in poverty as a function of householdincomefor Alaskafor the originalcase (blue) and a 10 increase in energy costs (red). Alaska shows a largernumber of households with high household energy burdens, even at higher household income levels. The extreme climate ofAlaska may be responsiblefor this effect; it is expensive to heat a dwelling to a comfortable temperaturewhen the outside temperature canfall to -60 degrees Fahrenheit. The cost offuels is also higher in Alaska than in most otherparts of the country.

The Path Forward As indicators of energy insecurity, the IEls described in this paper provide new methods for estimating how increases in energy costs will affect the population of a specific state as well as the country as a whole. The methods introduced here demonstrate that increasing household energy costs have a broad and significant adverse effect on the poor and near-poor members of American society. Any policy proposal that would tend to increase the cost of energy should therefore be fully evaluated for its impact on energy insecurity, in order to give policymakers a complete picture of its potential consequences. Pushing more families into poverty triggers a number of significant socioeconomic issues, including increased government spending and a growing dependence on government social and safety net programs.

14

There are of course numerous ways to mitigate impacts of energy cost increases. The first approach includes encouraging - or at least not actively disadvantaging - the supply of low-cost sources of electricity and heating fuels, and taking steps to minimize cost increases arising from emerging energy resources. It can also include financial assistance for qualifying households, although given the history of the federal Low Income Home Energy Assistance Program (LIHEAP) program 20 and the federal government's budget challenges, expecting substantially more funding from the federal government to pay higher energy costs for qualifying households is not realistic. Naturally, however, the preferred circumstance is for energy to be affordable and the economy to be strong, enabling citizens to heat and cool their homes without having to depend on federal assistance for such basic needs.

It bears noting that programs to increase energy efficiency and promote conservation can be viable ways to mitigate energy insecurity. However, some caution is needed here given that a program that works in Columbia, South Carolina, may not be effective in Bettles, Alaska, and vice versa. And, more relevant to the thesis of this paper, some programs intending to bring down household energy costs do not directly benefit, and in some cases may disadvantage, low-income households. To use Fairbanks, Alaska, as an example, citizens who took advantage of an energy rebate program designed to improve the efficiency of the housing stock were financially secure and could afford the up-front costs associated with the program. Some families interested in the program could not participate in it because they were unable to secure a loan for the up-front energy efficiency improvement costs even though those costs would have been refunded by the program.

The foregoing discussion should prompt a number of key questions at the federal level:

" How best can federal policy help relieve energy insecurity for the American people?

" How can federal policy help decrease (or inhibit increases) in the cost of electricity and other household energy sources?

• How can federal policy help decrease the cost of energy in remote communities?

• What are the barriers to the deployment of less expensive energy sources in Alaska, other sparsely populated states or regions, and other regions, such as the southeast, where the incidence of energy insecurity is high?

• What are the roles and effects of direct federal assistance?

20 Spar, K., Federal Benefits and Services for People with Low Income: Programs, Policy, and Spending, FY2008-FY2009, Congressional Research Service Report R41625, January 3!, 201 i. LIHEAP is administered by the Department of Health and Human Services. The number of households receiving heating assistance in 2009 was approximately 7.4 million (heating or winter crisis assistance) with roughly 900,000 more receiving cooling assislance. This number represents 23.7 percent of federally eligible households.

15

" Understanding that the current LIHEAP program only serves fewer than 24 percent of households eligible for assistance and has limited money for weatherization, how can people in poverty improve the weatherization of their housing stock? And,

• How can federal policy more effectively help people suffering an unexpected spike in fuel prices due to circumstances beyond their control (e.g., heating costs from the polar vortex that forced people not normally in energy insecurity into that category)?

Federal, state, and local governments, as well as other non-governmental organizations, have many options to help households decrease their energy insecurity. As households move out of energy insecurity, their improved financial situation will allow them to mitigate the adverse consequences associated with it: they can eat better, afford their medication, send their children to school, and purchase more goods and services. For these reasons, it is important to remain vigilant about keeping energy costs low and lowering them where possible. We can and should decrease energy insecurity in the United States so that all Americans can enjoy an even higher quality of life.

16

Appendix 1: Methodology DataSet - American Community Survey The American Community Survey (ACS) is an ongoing, mandatory, statistical survey that samples a small subset of U.S. households each year in every state and the District of Columbia to determine community characteristics and eligibility for federal programs. 21 Among the household characteristics collected by the survey are the number of people in the household, number of children under six, number of people over 65, type of housing unit (rental, single family house, trailer, etc.), and infonnation on rent and mortgages. For this analysis the key variables in the ACS housing data set are: 1) the annual household income including all salaries, wages, tips, social security, welfare payments and public assistance, retirement benefits, survivor or disability pensions, rental incomes, interest, dividends, royalties, and any other sources of income (HINCP), and 2) the amount of money each household spends on energy in the form of electricity (ELEP), gas (GASP), and other fuels (FULP). The households considered in the analysis are living in non-vacant, non-group homes that are either rented or owned by the household, so families living in apartments, duplexes, attached and detached single family homes, mobile homes, trailers, and boats are all included in the analysis. Over 1.35 million records from 2012 that include data from all 50 states and the District of Columbia were used to perform the analyses.

Groceries- United States Department of Agriculture Thrifty Food Plan The Official USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average, June 2014 document provides the basis for quantifying how much money a family spends to provide nutritious meals made at home. 23 The Food Plans give four different price levels for a weekly food cost for a family of four (the thrifty plan, the low-cost plan, the moderate-cost plan, and the liberal plan) based on differences in the specific foods and quantities of foods in each plan.

Because the people most impacted by the rising cost of energy will be those with the least disposable income, the thrifty plan ($149.90 per week for a family of four of two adults between 19 and 50 years old and two children, one of whom is between 6 and 8 years old and the other of whom is between 9 and II years old), the most inexpensive food plan, was selected for the analyses. For the specific foods and quantities of foods in the Thrifty Food Plan, see Thrifty Food Plan, 2006.24 21https:f/www.census.gov/acs/www/

2 ELEP and GASP are given on a per month basis while FULP is given on an annual basis.

3

" http://www.cnpp.usda.gov/sites/default/files/usda 24 food_plans cost of food/CostofFoodJun2014.pdf Thrifty Food Plan, 2006, Report CNPP-19 by Andrea Carlson, Mark Lino, WenYen Juan, Kenneth Hanson, and P.

Peter Basiotis, of the Center for Nutrition Policy and Promotion (except for Dr. Hanson who is with the Economic Research Service), U.S. Department of Agriculture, April 2007 17

Poverty- UnitedStates Department of Health & Human Services 2014 Poverty Guidelines The income levels for each state used to determine if a household is in poverty are the poverty guidelines updated periodically by the U.S. Department of Health and Human Services.2 5 For 2014, the guidelines are as follows:

2014 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA Persons in Poverty family/household guideline

.For families/households with more than 9 persons, add $4,060 for each additional person.

i 1$11,670

_2 115,730 3 119,790 i423,850

ý5 127,910

!6 131,970

7 36,030

ý8 140,090 2014 POVERTY GUIDELINES FOR ALASKA Persons in Poverty family/household guideline

For families/households with more than 8 persons, add $5,080 for each additional person.

1 ]$14,580 12 19,660

3 24,740 4 129,820 i5 134,900 i6 139,980

7 45,060

.8 50,140 25 http://aspe.hhs.gov/poverty/[ 4poverty,cfi 18

2014 POVERTY GUIDELINES FOR HAWAII Persons in Poverty family/household guideline

,For families/households with more than 8

'persons, add $4,670 for each additional person.

i 1$13,420

.2 18,090

!3 122,760 . J

.4 27,430 I5 32,100

6 36,770

7 141,440 I

.8 46,110 While the U. S. Department of Health & Human Services includes energy costs when it establishes poverty guidelines, the poverty thresholds were not developed as an itemized budget with specific dollar amounts for each type of household expenditure category.

Calculations The following calculations are performed for every data record that meets the non-vacant, non-group home criteria for inclusion in the analyses. For several analyses, the number of households meeting a criterion, such as "driven into poverty," in each data file is determined by applying the formula to each household in the data file and then counting the number of households that meet the criterion. The number of households meeting a criterion can also be divided by the number of total households in the data file to determine the percentage of households meeting that criterion.

Household energy costs for a year = [(ELEP + GASP)* 12] + FULP Increase in energy costs in dollars = Household energy costs x% increase 1n cost Increase in energy costs in weeks of groceries = increase in energy costs in dollars cost per week of groceries Household in poverty if HINCP < poverty guideline for number of people in the household 19

Household with revised income in poverty if (HINCP- increase in energy costs in dollars) <

poverty guideline for number of people in the household Number of households driven into poverty = number of households with revised income in poverty - number of households in poverty Household Energy Burden = Household Energy Costs.

Household income 100 20