NPC Meeting

Boston, MA

November 7, 2003

Stephen G. WhitleySenior Vice President & COO

2

• System Operations• Market Operations• Blackout Update• Winter Outlook• Back-Up Detail

Agenda

3

System Operations

4

Operations Highlights

• Boston & Hartford Weather Pattern: – Rainfall conditions for the month were above normal;

Temperatures throughout the region were slightly below normal; and, 1” – 2” of snow reported on October 23, 2003.

• Peak load of 19,167 MW at 17:00 hours on October 16.• During October:

– Solar Magnetic Disturbances (plus K-7) on October 24 and October

29 – 31.– M/S2 declared on October 24 – 25 and October 29 - 31 due to

Solar Magnetic Disturbances.– Minimum Generation declared (New England wide) on October 1.

5

Market Operations

6

Day–Ahead & Real-Time Prices, ISO Hub:

7

Day-Ahead LMP Average by Zone & Hub:

Marginal Loss LMP CongestionData Period: October 1 – 26, 2003

(-5.39)

(-1.35)

(4.13)(1.72)

(-2.00)(-2.47)

(0.02) (-1.09)

$/M

Wh

8

97.4%

Real-Time LMP Average by Zone & Hub:

Data Period: October 1 – 26, 2003

(-5.80)(-1.72)

(1.24) (1.47)(-2.07) (-2.49)

(0.06)(-0.95)

Marginal Loss LMP Congestion

$/M

Wh

9

Day Ahead Market vs. Forecast Load

Note: Data for October* Oct. 1-24, 2003

Day Ahead Market Demand Cleared vs. Forecast Load (%)

1009894

0

20

40

60

80

100

August September October

Day Ahead Market Generation Cleared vs. Forecast Load (%)

969589

0

20

40

60

80

100

August September October

*

*

10

Day Ahead LMPDAM LMP for October 1 - 24, 2003

20

30

40

50

60

70

80

90

100

110

120

10/0

1/20

03 0

1

10/0

3/20

03 0

1

10/0

5/20

03 0

1

10/0

7/20

03 0

1

10/0

9/20

03 0

1

10/11

/200

3 01

10/1

3/20

03 0

1

10/1

5/20

03 0

1

10/1

7/20

03 0

1

10/1

9/20

03 0

1

10/2

1/20

03 0

1

10/2

3/20

03 0

1

Day

$/M

Wh

INTERNAL_HUB CONNECTICUT MAINE NEMASSBOST NEWHAMPSHIRE RHODEISLAND SEMASS VERMONT WCMASS

K37-4 Line and the 1X transformer @ Granite OOS. Resulted in constraints on the W149S-1, M127, V182 Lines for loss of the 340 Line. (Note: The M127 Line was also OOS on 10/17.)

CT Import interface constrained due to load and generation patterns.

CT Import interface constrained due to load and generation patterns.

1X transformer @ Granite OOS. Resulted in constraints on the K22 and M127 Lines for loss of the 340 Line.

11

Real Time LMPReal-Time LMP for October 1 - 24, 2003

0

25

50

75

100

125

150

175

10/0

1/20

03 0

1

10/0

3/20

03 0

1

10/0

5/20

03 0

1

10/0

7/20

03 0

1

10/0

9/20

03 0

1

10/1

1/20

03 0

1

10/1

3/20

03 0

1

10/1

5/20

03 0

1

10/1

7/20

03 0

1

10/1

9/20

03 0

1

10/2

1/20

03 0

1

10/2

3/20

03 0

1

Day

$/M

Wh

INTERNAL_HUB CONNECTICUT MAINE NEMASSBOST NEWHAMPSHIRE RHODEISLAND SEMASS VERMONT WCMASS

Canal and ORR-SO interfaces constrained. 8909B-1 Line constrained for loss of the 348 Line with a stuck14T breaker at Millstone.

CT Import interface constrained due to CT capacity conditions.

E183E-4 Line constrained for loss of the 332S contingency (332 Line with a stuck breaker.)

Evening peaks coupled with tight capacity conditions are coincident with the higher price spikes.

12

Settlement Data – Real Time & Balancing Market

7 9 %

7 3 %

6 6 %6 7 %

7 4 %

7 0 %

6 6 %

7 5 %

7 3 %

7 1%7 0 %

7 2 %

7 8 %

7 6 %

7 5 %7 5 %

7 3 %

7 3 %7 2 %

7 3 %

7 2 %

7 0 %

6 8 %

6 7 %6 8 %

7 4 %

8 0 %7 9 %

7 8 %

7 5 %

7 8 %

7 4 %

7 9 %

50%

55%

60%

65%

70%

75%

80%

85%

Month

% R

T L

oad

Fu

lly H

edg

ed

* P ost -S MD da t a ignore s int ra -pool LMP diffe rences

Percentage of Real-Time Load Fully Hedged Through ISO-NE Settlement System*

Note: Balancing Market - This MW amount is after Day Ahead hedging and Internal Bilateral Transactions. It is a Participant Pool Total and does not consider locational pricing.

13

Blackout Update

14

Blackout Update

• Reliability Committee will meet the beginning of December, 2003.– Review facts from the 2003 Blackout– Discussion of “Lessons Learned Session” for

New England.

15

Winter Outlook

16

Winter 2003-04 Capacity

AssessmentLeast Operable Capacity Margin - Week beginning

November 1st MW

Projected Peak (50/50) 18,820Operating Reserve Required 1,700Total Operable Cap. Required 20,520Projected Capacity 32,590Assumed Outages 7,600Total Capacity 24,990Operable Capacity Margin

4,470

17

2003 Capacity AssessmentLeast Operable Capacity Margin - Week beginning

November 1st

MWProjected Peak (90/10) 19,580Operating Reserve Required 1,700Total Operable Cap. Required 21,280Projected Capacity 32,590Assumed Outages 7,600Total Capacity 24,990Operable Capacity Margin

3,710

18

Winter 2003-04 Capacity

AssessmentWeek Beginning, Saturday

Year Month Day

Installed Seasonal Claimed

Capability (SCC)

[Note 1]

Interchange (NYPP, NB, HQ, Highgate,

Block Load)

Note

New Generation

[Note 2]

De-listed ICAP

Resources [Note 3]

Net Capacity [Note 4]

Peak Load Exposure [Note 5]

Operating Reserve

Requirement [Note 6]

Total Known Maintenance

Allowance for

Unplanned Outages [Note 8]

Total Capacity

Operable Capacity

Margin (+/-)

Extent of OP 4 Actions That May be Necessary (OP 4 Actions up to and

including) [Note 9]

(MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW)2003 November 1 33,008 540 0 960 32,590 18,820 1,700 4,000 3,600 24,990 4,470 8 33,008 540 0 960 32,590 18,940 1,700 2,600 3,600 26,390 5,750 15 33,008 540 0 960 32,590 19,280 1,700 2,000 3,600 26,990 6,010 22 33,008 540 0 960 32,590 20,010 1,700 1,300 3,600 27,690 5,980 29 33,008 1,320 0 - 34,330 20,720 1,700 2,000 3,600 28,730 6,3102003 December 6 33,008 1,320 0 - 34,330 20,920 1,700 2,100 3,200 29,030 6,410 13 33,008 1,320 0 - 34,330 21,210 1,700 1,000 3,200 30,130 7,220 20 33,008 1,320 0 - 34,330 21,220 1,700 200 3,200 30,930 8,010 27 33,008 1,320 0 - 34,330 21,280 1,700 100 3,200 31,030 8,050

2004 January 3 33,004 1,320 0 - 34,320 21,550 1,700 0 2,800 31,520 8,270

10 33,004 1,320 0 - 34,320 22,010 1,700 100 2,800 31,420 7,710

17 33,004 1,320 0 - 34,320 22,010 1,700 200 2,800 31,320 7,610

24 33,004 1,320 0 - 34,320 22,010 1,700 0 2,800 31,520 7,810

31 33,006 1,320 0 - 34,330 21,790 1,700 300 3,100 30,930 7,440

2004 February 7 33,006 1,320 0 - 34,330 21,526 1,700 1,200 3,100 30,030 6,800

14 33,006 1,320 0 - 34,330 21,497 1,700 1,300 3,100 29,930 6,730

21 33,006 1,320 0 - 34,330 21,237 1,700 500 3,100 30,730 7,790

28 33,011 1,320 0 - 34,330 20,260 1,700 1,100 2,200 31,030 9,070

2004 March 6 33,011 1,320 0 - 34,330 19,915 1,700 1,100 2,200 31,030 9,420

13 33,011 1,320 0 - 34,330 19,721 1,700 1,000 2,200 31,130 9,710

20 33,011 1,320 0 - 34,330 19,360 1,700 2,500 2,200 29,630 8,570 27 33,011 1,320 0 - 34,330 18,801 1,700 2,900 2,200 29,230 8,730Notes: Please note that the information contained within the Capacity Analysis is a deterministic projection of system conditions which could materialize during any given week of the year.

1. Installed Capability per November 1, 2003 SCC Report. The Installed Capability does not reflect possible transmission constraints within the NEPOOL system.2. New Generation information includes 1) generation recently commercial but not yet reflected in the NEPOOL SCC Report totals used in the Installed Capability Column, and 2) future generation

as assumed by ISO-NE Planning Department. This value is rounded to the nearest hundred.3. De-listed ICAP quantities are only known with certainty in the current month.4. Net Capacity = (SCC) + (Interchange) + (New Generation) - (De-listed ICAP Resources). In this equation, the SCC, Interchange and De-listed ICAP values are rounded to the nearest ten

and New Generation is rounded to the nearest hundred.5. Peak Load Exposure per the April 2003 CELT Report. 6. Operating Reserve Requirement based on the first contingency (Generator at 1160 MW) plus 1/2 the second contingency (Generator at 1157 MW).7. Highgate maintenance scheduled.8. Allowance for Unplanned Outages includes: forced outages and maintenance outages scheduled less than 14 days in advance.9. Relief from certain OP 4 Actions varies, depending on system conditions.

ISO-NE WINTER 2003-04 OPERABLE CAPACITY ANALYSISWITH KNOWN EXTERNAL CONTRACTS - 50/50 FORECAST - DATED NOVEMBER 4, 2003

This analysis is a tabulation of weekly assessments shown in one single table. The information shows the operable capacity situation under assumed conditions for each week. It is not expected that the system peak will occur every week during June, July and August.

19

Winter 2003-04 Capacity

AssessmentNEPOOL Winter 2003-04 Operating Capacity Margins

WITH KNOWN EXTERNAL TRANSACTIONS - 50/50 FORECAST

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

1-N

ov

8-N

ov

15-

No

v

22-

No

v

29-

No

v

6-D

ec

13-

De

c

20-

De

c

27-

De

c

3-J

an

10-

Jan

17-

Jan

24-

Jan

31-

Jan

7-F

eb

14-

Fe

b

21-

Fe

b

28-

Fe

b

6-M

ar

13-

Mar

20-

Mar

27-

Mar

November 2003 - March 2004, W/B Saturday

Ope

ratin

g C

apa

city

Mar

gin

(MW

)

20

New Generation Update

• No new resources were added in October.

• Status of Generation Projects as of October 31, 2003:

No. MW

In Construction 2 521with 18.4 approval

Not in Construction 6 1,444with 18.4 Approval

21

Back-Up Detail

22

2003 Capacity AssessmentLeast Operable Capacity Margin - Week beginning

November 1st MWProjected Peak (90/10) 19,580Operating Reserve Required

1,700Total Operable Cap. Required 21,280Projected Capacity 32,590Assumed Outages 7,600Total Capacity 24,990Operable Capacity Margin 3,710

23

2003 Capacity Assessment

Week Beginning, Saturday

Year Month Day

Installed Seasonal Claimed

Capability (SCC)

[Note 1]

Interchange (NYPP, NB, HQ, Highgate,

Block Load)

Note

New Generation

[Note 2]

De-listed ICAP

Resources [Note 3]

Net Capacity [Note 4]

Peak Load Exposure [Note 5]

Operating Reserve

Requirement [Note 6]

Total Known Maintenance

Allowance for

Unplanned Outages [Note 8]

Total Capacity

Operable Capacity

Margin (+/-)

Extent of OP 4 Actions That May be Necessary (OP 4 Actions up to and

including) [Note 9]

(MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW) (MW)2003 November 1 33,008 540 0 960 32,590 19,580 1,700 4,000 3,600 24,990 3,710 8 33,008 540 0 960 32,590 19,700 1,700 2,600 3,600 26,390 4,990 15 33,008 540 0 960 32,590 20,050 1,700 2,000 3,600 26,990 5,240 22 33,008 540 0 960 32,590 20,810 1,700 1,300 3,600 27,690 5,180 29 33,008 1,320 0 - 34,330 21,550 1,700 2,000 3,600 28,730 5,4802003 December 6 33,008 1,320 0 - 34,330 21,760 1,700 2,100 3,200 29,030 5,570 13 33,008 1,320 0 - 34,330 22,060 1,700 1,000 3,200 30,130 6,370 20 33,008 1,320 0 - 34,330 22,070 1,700 200 3,200 30,930 7,160 27 33,008 1,320 0 - 34,330 22,130 1,700 100 3,200 31,030 7,200

2004 January 3 33,004 1,320 0 - 34,320 22,417 1,700 0 2,800 31,520 7,400

10 33,004 1,320 0 - 34,320 22,896 1,700 100 2,800 31,420 6,820

17 33,004 1,320 0 - 34,320 22,896 1,700 200 2,800 31,320 6,720

24 33,004 1,320 0 - 34,320 22,896 1,700 0 2,800 31,520 6,920

31 33,006 1,320 0 - 34,330 22,667 1,700 300 3,100 30,930 6,560

2004 February 7 33,006 1,320 0 - 34,330 22,392 1,700 1,200 3,100 30,030 5,940

14 33,006 1,320 0 - 34,330 22,362 1,700 1,300 3,100 29,930 5,870

21 33,006 1,320 0 - 34,330 22,092 1,700 500 3,100 30,730 6,940

28 33,011 1,320 0 - 34,330 21,076 1,700 1,100 2,200 31,030 8,250

2004 March 6 33,011 1,320 0 - 34,330 20,716 1,700 1,100 2,200 31,030 8,610

13 33,011 1,320 0 - 34,330 20,515 1,700 1,000 2,200 31,130 8,920

20 33,011 1,320 0 - 34,330 20,139 1,700 2,500 2,200 29,630 7,790 27 33,011 1,320 0 - 34,330 19,558 1,700 2,900 2,200 29,230 7,970Notes: Please note that the information contained within the Capacity Analysis is a deterministic projection of system conditions which could materialize during any given week of the year.

1. Installed Capability per November 1, 2003 SCC Report. The Installed Capability does not reflect possible transmission constraints within the NEPOOL system.2. New Generation information includes 1) generation recently commercial but not yet reflected in the NEPOOL SCC Report totals used in the Installed Capability Column, and 2) future generation

as assumed by ISO-NE Planning Department. This value is rounded to the nearest hundred.3. De-listed ICAP quantities are only known with certainty in the current month.4. Net Capacity = (SCC) + (Interchange) + (New Generation) - (De-listed ICAP Resources). In this equation, the SCC, Interchange and De-listed ICAP values are rounded to the nearest ten

and New Generation is rounded to the nearest hundred.5. Peak Load Exposure per the April 2003 CELT Report. 6. Operating Reserve Requirement based on the first contingency (Generator at 1160 MW) plus 1/2 the second contingency (Generator at 1157 MW).7. Highgate maintenance scheduled.8. Allowance for Unplanned Outages includes: forced outages and maintenance outages scheduled less than 14 days in advance.9. Relief from certain OP 4 Actions varies, depending on system conditions.

ISO-NE WINTER 2003-04 OPERABLE CAPACITY ANALYSISWITH KNOWN EXTERNAL CONTRACTS - 90/10 FORECAST - DATED NOVEMBER 4, 2003

This analysis is a tabulation of weekly assessments shown in one single table. The information shows the operable capacity situation under assumed conditions for each week. It is not expected that the system peak will occur every week during June, July and August.

24

2003 Capacity AssessmentNEPOOL Winter 2003-04 Operating Capacity Margins

WITH KNOWN EXTERNAL TRANSACTIONS - 90/10 FORECAST

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

1-N

ov

8-N

ov

15-

No

v

22-

No

v

29-

No

v

6-D

ec

13-

De

c

20-

De

c

27-

De

c

3-J

an

10-

Jan

17-

Jan

24-

Jan

31-

Jan

7-F

eb

14-

Fe

b

21-

Fe

b

28-

Fe

b

6-M

ar

13-

Mar

20-

Mar

27-

Mar

November 2003 - March 2004, W/B Saturday

Ope

ratin

g C

apa

city

Mar

gin

(MW

)

25

Demand Response(as of October 31, 2003)

Active: 434 Assets 340.3 MW Pending: 5 Assets 1.4 MWZone Assets RT Price RT 30-Min RT 2-Hour Profiled * Assets RT Price RT 30-Min RT 2-Hour Profiled *

CT 119 27.0 61.6 1.1 57.8 2 0.0 0.6 0.0 0.0

SWCT** 54 7.7 26.4 1.1 0.2 2 0.0 0.6 0.0 0.0

ME 4 0.4 0.0 0.0 76.0

NEMA 114 62.9 3.1 0.8 1.4 3 0.0 0.2 0.6 0.0

NH 1 0.0 0.4 0.0 0.0

RI 12 1.9 0.0 0.0 0.0

SEMA 72 7.4 0.5 0.0 0.0

VT 16 7.1 1.3 0.0 5.9

WCMA 96 9.7 4.8 2.3 6.9

Total 434 116.4 71.8 4.3 147.9 5 0.0 1.4 0.6 0.0

* Includes former Type 2 - Interruptible Loads** SWCT assets included in CT values (SNEW 7 was in 2-Hour, now retired)

26

Demand Response(as of October 31, 2003)

Active: Pending:Zone Assets Total mw Assets Total mw

CT 119 147.5 2 0.6ME 4 76.4NEMA 114 68.2 3 0.8NH 1 0.4RI 12 1.9SEMA 72 7.9VT 16 14.3WCMA 96 23.7

Total 434 340.3 5 1.4