Presentation to Federal, State and Provincial Congressional Members on the reliability of the grid. Pointing to the importance of transmission.

1. The Grid Today
The Energy Council’s 2009 Federal Energy
and Environmental Matters Conference

2. About NERC: Mission
To ensure the reliability of the North American
bulk power system
 Develop & enforce reliability standards
 Assess current and future reliability
 Analyze system events & recommend improved
practices
 Encourage active participation by all stakeholders
 Pursue mandatory standards across North America

3. Directions to Moving Forward
 Long-Term Reliability
 Key Reliability Objectives
 Current Climate Initiatives

4. Long-Term Reliability
 Adequacy generally improving over past years
 Transmission is essential
 Integration of new generation sources
(renewables, nuclear, next gen coal, PHEV…)
 Demand response increasing

5. Key Objective: Support Transmission
 Climate objectives
cannot be fulfilled
without focus on
transmission
 “Clean Energy
Superhighway”
needed
 System planning Source:
EPRI & NREL
must take a Wind Availability Compared to Demand Centers
“continental” view Note:
o Blue indicates areas with high wind potential,
o Brown indicates large demand centers, and
o Green indicates areas with little wind potential and
smaller demand centers

6. Status of Transmission…
 The electric transmission system
operates close to the edge of its
capacity
• Roughly $70 billion of investment in
20,000 miles of extra high-voltage
transmission will be needed to
preserve the status quo over the
next 10 years
 Future energy policy objectives
such as achieving energy
independence or reducing carbon
emissions are off the table without
significant upgrades to the
transmission system
• Roughly $100 billion of investment
in 30,000 miles of additional extra
high-voltage transmission will be
needed to meet energy policy
objectives by 2024

7. NERC Regional Entities

8. Wind Projected to Grow
 145,000 MW of wind to be added in coming 10 years
 Recommendations:
• Flexibility
• Forecasting Figure 5: Projected Increase in Existing, Planned & Proposed Summer On-
Peak Wind Capacity
• Transmission 12,000 30%
26.4%
10,000 25%
19.9%19.9% 19.6%
8,000 20%
17.2%
MW
15.0%
13.4%
13.1%
6,000 15%
11.5%
9.1%
8.7% 8.7%
4,000 10%
2,000 5%
0 0%
2008
2017
2008
2017
2008
2017
2008
2017
2008
2017
2008
2017
2008
2017
2008
2017
ERCOT FRCC MRO NPCC RFC SERC SPP WECC
Existing Planned Proposed % of Expected-Peak Wind Capacity to Nameplate Capacity

9. 2008/09 Winter Wind Generation Grows
Capacity available on peak ranges from 8.7% to 26%
Projected Winter Wind
Total Nameplate Capacity
14,000
12,000
10,000
MW
8,000
6,000
4,000
2,000
0
ERCOT FRCC MRO NPCC RFC SERC SPP WECC
Existing Planned Proposed

10. Key Objective: Demand-Side Resources
US Peak Demand (1994-2017)
950,000
900,000
850,000
800,000
Megawatts
750,000
U.S. peak demand projected
700,000
to grow by 17% by 2018
650,000
600,000
550,000
500,000
94
96
98
00
02
04
06
08
10
12
14
16
19
19
19
20
20
20
20
20
20
20
20
20
Year
C a p a c it y D e m a n d R e s p o n s e ( M W ) - 1 0 y e a r P r o je c t io n
8 000
7 000
6 000
5 000
4 000
MW
3 000
2 000
1 000
0
2008 2017 2 008 20 17 2008 2017 2008 2 017 200 8 2017 2008 2 017 200 8 2017 2008 2 017
ERC OT FR CC MRO NPCC RFC SE R C S PP W EC C
T o ta l C a p a c ity D e m a n d R e s p o n s e D ir e c t C o n tr o l L o a d M a n a g e m e n t
C o n tr a c tu a l ly In te r r u p t ib le ( C u r ta i la b l e ) C ri tic a l P e a k -P r ic in g w ith C o n t ro l
L o a d a s a C a p a c ity R e s o u r c e

11. Modernized Grid – Integration Key
“Smart Grids” can
support reliability
 Variable Resources Reliable
 Demand response Demand
Renewables
Response
 Large deployment of
sensor & automation
technologies Energy
Smart Grid
Independent
Efficiency
 Innovative
applications of
electricity Secure
Nuclear
 Flexibility Next gen
Coal
 Cyber-Security vital

12. Components to the Intelligent Network –
Many are focused in vertical silos
Generation Circuit Transformers AMI Load Management
Consumer Portal
 Capacitor Bank
    Smart switch
Wind Voltage Monitoring Real-Time Metering
Monitoring
    Smart thermostat
Solar Outage Detection TOU/CPP Pricing
 Predictive Maintenance
    Real-time DLC
Geothermal Theft Detection Outage Monitoring
 Security (Video/Audio) management and
  
Hydro Asset Failure Alarms Voltage Monitoring
verification
 Load Management
 
Biomass Smart substation
 Load profiling
 OMS/DMS 
 High Temperature
Biofuels
 Aggregation of curtailed
 Broadband over Power Superconducting (HTS)
 Carbon capture
load
Lines Cables
 Nuclear
 Underground
 Advanced SCADA
 Carbon cap and trade
Transmission
 Mesh networks
 Storage technology
 HTS Transformers
 Capacitors

13. Integration of Variable Generation
Task Force (IVGTF) Scope
 Task Force will prepare:
• Concepts document: philosophical
& technical considerations
• Recommendations: practices,
requirements & reliability standards
 Document will include:
• Planning timeframe issues
• Operational Planning and Real-time
Operating timeframe issues
• Review NERC Standards for gaps
• Review of future developments: i.e.
storage, EHV
• Conclusions and recommendations

14. Current Climate Initiatives
 40 U.S. States and all Canadian Provinces are involved
in some form of climate change initiative.

15. Key Objective: Decision on U.S. Policy
 Regulatory certainty needed to enable
resource development
 Can result in great improvements
• New generation technologies
• Diversified fuel mix
• Strengthened & “smarter” grid

16. Key Objectives and Emerging Issues
Emerging Issues Risk Evolution:
High
Greenhouse
Increased Demand-Side & Gas
Distributed Generation Reductions
Likelihood
Resources
Rising Global
Demand for
Fuel Storage & Energy &
Transportation Equipment
6-10Years
1-5 Years
Mercury Transmission of
Regulation Limited Water the 21st Century
Availability
Low
High
Consequence

17. Smart, Modern Grids and Reliability
 Regulators can
• Implement formulas for cost allocation/cost recovery
• Provide certainty & support transmission infrastructure
siting, planning, construction
• Flexible on innovative planning
 Policy makers/Educators can
• Promote reliability as incorporating all components “FIS”
flexibility- integration- smart
• Tell story with all pieces
 Planners can
• Maintain Future Bulk Power System Reliability
• Change how they design grids
 Operators can
• Expand understanding of new resources
• Manage variability/uncertainty
• Pre-position systems

18. Reliability Must Haves
 Interoperability
• Regulatory Certainty
• Smart and Flexible-
 solid partnerships
 Diverse Fuel Supply
 Demand Side Resources
 Interconnectivity
• Renewables and Transmission
State and
PARTERNSHIP w/ State and regional
regional

19. One picture speaks a thousand words….
Growth in Electricity Supply, Demand, and Transmission
(1990 -2007)
35
30% growth 30% growth
30
25
Percentage
20
15
10% growth
10
5
0
Transmission Supply Demand

20. Question & Answer
Contact:
Julia Souder
Director, Inter-Governmental Relations
Julia.souder@nerc.net
202.393.3998