TUESDAY, JANUARY 16, 2018 Cold Weather Operations December 24, 2017 – January 8, 2018 Vamsi Chadalavada EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER ISO-NE PUBLIC Table of Contents • • • • • • • • Cold Weather Conditions Fuel Mix Cold Weather Oil Usage Cold Weather Fuel Logistics System Operations PV and Wind Output Market Data Summary & Next Steps Page Page Page Page Page Page Page Page ISO-NE PUBLIC 3 10 15 24 34 46 51 62 2 COLD WEATHER CONDITIONS Arctic Outbreak 2017-18 • New England was gripped by a cold weather stretch for an extended duration between December 25 and January 8 • All major cities in New England had average temperatures below normal for at least 13 consecutive days, of which 10 days averaged more than 10°F below normal • In Boston, for example, an Arctic air-mass brought one of the most extreme cold waves in 100 years with above average winds causing extended periods of frigid wind chill temperatures. ISO-NE PUBLIC 4 Mean Temperatures Depart from Normal 8 New England Cities Mean Temperature Departure from Normal Dec.24, 2017 - Jan 08, 2018 10 - BOS - BDL -ORH - BDR - PVD -CON - PWM - BTV -15 -20 -25 12/24/17 12/25/17 12/26/17 12/27/17 12/28/17 12/29/17 12/30/17 12/31/17 1/1/18 1/2/18 1/3/18 1/4/13 1/5/18 1/6/18 1/7/13 1/8/18 ISO-NE PUBLIC . ff Coldest December Mean Temps since at least 2000 40- 35- 729.2 _357 2000 2W1 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 40.5 3.3.1i35 '3'2.5 December Mean Temperatures Boston 8: Hartford 2000 - 2017 41 33.2 32.4 2-7 3. 69 33 30.4 2.9.9 2-8 2 35.7 30. 3 28.5 Ila? 32.1 I 27.5 2000 2001 2002 2003 2W4 2005 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 - Boston - a rtford 2017 2017 0 74 W- ISO-NE PUBLIC Hi?xa I II ff Coldest January 1-8 since at least 2000 50.0 45.0 40.0 35.0 30.0 25.0 20.0 10.0 January 1-8 Mean Temperatures Boston Hartford 2000 - 2018 40.3 47.3 35.4 34.4 32.5 32.9 31 9 31.6 313 31.4 30.7 23.9 23 5 29.5 28.1 - 25.3 20.9 I 15.2 2000 2001 2002 2003 2M4 2005 2006 200'.lr 2008 2009 2010 2011 2012 2013 2014 2015 2016 201? 2018 36.9 38.0 -Boston -Hartf0rd 2018 2018 44.3 35.5 33.4 29 4 30.2 29.1 23-3 23.1 23.1 23?s 27.5 26.9 25.2 253 23.9 22.3 17.2 0.9 ZMO 2031 2002 2003 2004 2035 2006 2GB 2009 2010 2011 2012 2013 2014 2015 2015 2017 2018 ..H - ISO-NEI ?l - Arctic Outbreak 2017-18 Boston Temperatures • Record length of frigid temperatures occurred in Boston from 12/27/17-1/7/18, separated by a Blizzard on 1/4/18 which slightly moderated temperature • 7 consecutive days with daily maximum temperature below the normal low for the date • 15 consecutive days with minimum temperature below normal • Winds were frequently stronger than average during the outbreak, which caused extended periods of frigid wind chill temperatures ISO-NE PUBLIC 8 Boston: Coldest Stretch In 100 Years Historical Consecutive Cold Days in Boston Coldest Stretch (Daily Max ≤20°F) In 100 Years Dating Back To 1918 ISO-NE PUBLIC 9 FUEL MIX New England Fuel Mixture • Overall, there was significantly higher than normal use of oil – Coal use also increased over normal use • Gas and Oil fuel price inversion led to oil being in economic merit and base loaded • As gas became uneconomic, the entire season’s oil supply rapidly depleted ISO-NE PUBLIC 11 Daily Generation by Fuel Type (Percent of total) Daily Generation by Fuel Type Renewables (Including Wind and Hydro) Coal ?Oi Nuclear 45ofTotal System Generation 2012,04 12f25 12f26 12,0? 12f28 12f29 1330 12f31 1K1 1f2 1f3 1K4 1f5 1f6 1f? 1f8 . ?1 ISO-Niium ll II In irL - - Daily Generation by Fuel Type Daily Generation by Fuel Type ?Nuclear Coal Renewables (Including Wind and Hydro) 140,000 120900 tax 80,000 .E 5 60,000 a 40,000 1 20,000 I 12f24 12f25 12f26 12f2? 12f28 12f29 12f30 12f31 1K1 1f2 1f3 1K4 1f5 lf? 1f? 1f8 ISO-NE PUBLIC ff HI- 1 I a illShifting Generation Mix Before and During the Cold Snap Fuel Diversity - 12/24/17 Fuel Diversity - 1/1/ 18 Wind Wind I Coal Coal I Nuclear Nuclear Renewable Renewable I Hydro Hydro Oil Oil Fuel Diversity - 1/6/ 18 I I Wind Wind 5% I Coal I Nuclear I Renewable I Hydro I Oil Renewable 696 ff a ?Mil? We ?ll? 14 II . II II COLD WEATHER OIL USAGE Winter Reliability Program vs Actual Oil Burn • The Winter Reliability Program data is reported on a monthly basis only and December 2017 data is in the regular NPC report • Please note that the winter program oil inventory will differ from the actual oil burned during the cold weather for the following reasons – Not all units that burn oil participate in the Winter Reliability Program – Winter program oil participation is capped at stations, so a station that has a winter program participation of 100K barrels, but has burned 150K barrels is still counted at the original number – Actual oil burn numbers reflect the total oil burn and include ongoing replenishments at both dual fuel and oil only stations ISO-NE PUBLIC 16 Generator Oil Burn January 2018 Generator OII Burn I Winter Program Generators I Non-Winter Program Generators 350,000 - 300,000 250,000 5 200,000 - ?a 2 3 150,000 - 100,000 50,03] - 0 7 1/11:- 1/4 1M t0 1,15 1,5 to 1/6 1,1501 1,1? to 1:3 1mm 1,!9 Survey Period ISO-NE PUBLIC ?f ?llGenerator Oil Burn Yearly Comparison Generator Oil Burn 2,500,000 2,000,000 1,500,000 '5 ?5 In :0 1,000,000 500,000 0 2016 1/1/1710 i12/24/17 i12/25/17 t0 1/9/18 Survey Period ISO-NE PUBLIC ff ?n a? II ?Ill W- il- - On-Site Oil and Electricity Depletion This chart is the ISO’s best approximation of usable oil discounting for unit outages, reductions, or emissions ISO-NE PUBLIC 19 On-Site Oil and Electricity Depletion – Not Including Fast Start Units This chart is the ISO’s best approximation of usable oil discounting for unit outages, reductions, or emissions ISO-NE PUBLIC 20 Total Amount of Usable Fuel Oil in New England This chart is the ISO’s best approximation of usable oil discounting for unit outages, reductions, or emissions ISO-NE PUBLIC 21 Oil Depletion at a Specific Station An Example ff I Max I 12f1f17 10 Days of Oil On Site I1f1f18 I1f4f18 I1f5f18 I1f6f18 I1f7f18 I1f8f18 1f9f18 Day's e 7% ill?ij Environmental and Emissions Issues • With extended days of burning oil, several resources either had concerns about hitting federal and/or state emissions limitations or were impacted by emissions limitations – This primarily includes resources in MA, CT and RI • The ISO is concerned about the availability of the oil burning fleet as it relates to emissions limitations on cold days during the rest of the winter ISO-NE PUBLIC 23 COLD WEATHER FUEL LOGISTICS Liquid Fuels Logistics – Oil Terminals (As of Jan 9) • Most large oil terminals in northern New England have low inventories • Southern New England terminals are in better conditions • Sea/river ice has been affecting terminals in NH, ME and Hudson River • U.S. Coast Guard (USCG) Cutters that are homeported in Maine have been braking ice on NH and ME rivers since midDecember • The USCG is allowing the Weymouth Fore River Bridge to open to vessel traffic during weekday rush-hours in order to facilitate vital fuel deliveries ISO-NE PUBLIC 25 Liquid Fuels Logistics – Trucking (As of Jan 9) • Trucking transport of fuel oil remains the main constraint – Trucking of liquid fuels resumed on Friday, January 5th after interruption due to Winter Storm Grayson on January 4th – Carriers are at their physical limits – Drivers need time off to rest, even with State Waivers in effect – The break in the weather this week will provide much needed relief ISO-NE PUBLIC 26 Liquid Fuels Logistics – Generators (As of Jan 9) • Power generators who had previously scheduled and paid for fuel oil deliveries are receiving their fuel first, but those who have not are put on a waiting list • Fuel oil supplies are destined for arrival in northern New England by the end of this week; however, it is expected that power plant demand will quickly consume those re-supplies • A few smaller power stations have cancelled fuel orders due to lack of trucking ISO-NE PUBLIC 27 MA Governor Provides Relief for Fuel Deliveries • On Friday afternoon, January 5, Governor Baker signed a revised declaration of emergency that provides relief for fuel deliveries to electric generating facilities until January 19 – The original declaration, dated December 28, covered fuel deliveries for heating but not electric generating facilities ISO-NE PUBLIC 28 Fuel Surveys • To increase situational awareness, the ISO initiated twice weekly fuel surveys of oil fired generation beginning on 1/4/18 • Based on system conditions, the periodicity of the fuel surveys was changed to daily beginning on 1/5/18 • Daily fuel surveys are scheduled to continue on a daily basis (Monday-Friday) until further notice • The Daily Fuel Survey asked participants of oil fired generators questions regarding: – – – – – – Usable Oil Inventory Oil Burn Since Last Survey Plans for Refueling Replenishment Strategies Procurement and Transportation Issues Environmental/Emissions Issues ISO-NE PUBLIC 29 Natural Gas Prices Natural Gas Prices - Massachusetts vs. Marcellus Marcellus ?MA_natg334 $100 $0999's} {be N9 950'? \0 $30 '09? N99 '09, '09, N39 '09, ~39, '09? (I, 093'? 6?50 Ho'c?go Odo 6" 06?? 6?0 ISO-NE PUBLIC kw \r ?k 7' - Natural Gas Schedules Dekatherms 4,500,000 4,000,000 - 3,500,000 - 3,000,000 2,500,000 2,000,000 1,500,000 1,330,000 500,000 Natural Gas Schedules to Generators vs. Non-Power Use - Winter 2017 - 2018 Scheduled Data from Pipeline Electronic Bulletin Boards - Not Actual Flow Pipeline Generators ?Non Power LNG II II ?if? . Tl? 31 Natural Gas Issues • There were 17 reported gas issues for the period between 12/24/17 and 1/8/18 – Issues were either procurement related or pipeline related • An Operational Flow Order (OFO) was issued on 12/22/17 with an effective date of 12/25/17 for the Tennessee Gas Pipeline • An OFO was issued on 12/23/17 for the Algonquin Gas Transmission Pipeline • An OFO was issued on 12/26/17 for the Iroquois Pipeline • All three OFOs are still in effect as of 1/10/18 ISO-NE PUBLIC 32 LNG Delivery & Canadian Gas Supply • LNG send-outs at the Distrigas and Canaport facilities are critical to winter operations – Both Distrigas and Canaport received LNG cargos during the cold weather event (or) shortly thereafter • Sable Island and Deep Panuke are operating at low levels, producing approximately 130,000 MMBTU/day ISO-NE PUBLIC 33 SYSTEM OPERATIONS System Operations: Communications • Emergency conference calls were held with NPCC Reliability Coordinators to review the following: • • • • • Expected weather and peak loads for the current and next day Expected MW surplus above the operating reserve requirements Confirmed expected interchange schedules Conditions of natural gas supply and fuel oil inventory Dates of calls: 12/24, 12/28, 12/29, 1/1, 1/2, 1/3, 1/5, 1/7 • Emergency conference calls with the six Local Control Centers in New England to discuss the following: • Expected peak load conditions in New England and known issues with generation units • Known concerns with the natural gas interstate pipes • Known concerns with fuel oil inventory and transportation limitations • Dates of calls: 12/24, 12/29, 1/3, 1/5, 1/7, 1/8 ISO-NE PUBLIC 35 System Operations: Communications, cont. • ISO New England requested conference calls with the Northeast Gas Association/Gas Supply Task Force (NGA/GSTF)members to discuss the following: – The overall condition of each interstate pipeline supplying New England – The overall condition of LNG supplying New England – Dates of calls: 12/27, 1/5 • ISO New England was in daily communications with interstate pipeline operators ISO-NE PUBLIC 36 System Operations: Actual vs. Forecasted Load Actual Load vs Forecasted Load ?Day Ahead Forecasted 103d ?Ac1ua Hourly 103d 22000 20000 E16000 A 0 1/ 0 1 14000 12000 10000 12/24 12/25 12/26 12/22 12/28 12/29 12/30 12/31 01/01 01/02 01/03 01/04 01/05 01/06 01/02 01/08 01/System Operations: M/LCC 2 • M/LCC 2, Abnormal Conditions Alert, was declared on 1/3/18 @ 16:00 for all of New England due to the extreme weather followed by forecasted extreme cold as well as fuel supply concerns • M/LCC 2 was cancelled on 1/9/18 @ 12:00 ISO-NE PUBLIC 38 System Operations: Maintenance • Impact on Transmission and Generation Maintenance: – 2 significant generation resources (approx. 800MW of capability) had planned outages/reductions rescheduled – 2 transmission line outages were rescheduled for a later date ISO-NE PUBLIC 39 HQ Phase II Pole 2 345 kV line 345 kV line 345 kV line 345 kV line 4f HI - II %1 .. l?L System Operations: Transmission Significant Transmission Events: Facility Start Date Return Date Reason/Impact 12/25/17 12/25/17 12/29/17 1/4/18 1/5/18 ISO-NE PUBLIC 1/ 14/ 18 (expected) 12/29/17 12/30/17 1/7/18 1/7/18 H ?xal TTC reduction by to V2 capacny Replace failed structure Structure fire Storm Grayson/Loss of Pilgrim plus 3OOMW reduction on nearby generation facility Equipment trip 4OE System Operations: Interchange • Increase in Scheduling Limit with NYISO – At 16:00 on 1/3/18, the scheduling limit on the NY A.C. ties was increased from 1,400 to 1,600MW – The increased limit was made possible by the cold conditions which helped to improve thermal transfer capability ISO-NE PUBLIC 41 Actual Interchange By Scheduling Region (Negative values indicate Imports) New England Net Interchange ?NewY0rk ?Hydr0 Quebec ?New Brunswick ?T0ta interchange ?500 ?Jar? 1 000 I - 3 5?000 -12I24 12I25 I 12I27 ll. Generation Outages and Reductions New England Generation Outages and Reductions 0,000 WUMMWW 0 ?1 WUN r?fu?1rWW ta T'r Generation Fleet Performance • The aggregate performance of the available generation fleet over the duration of the cold spell was good • Communication with generator Designated Entities was very good and was key to maintaining situational awareness • The cold weather has subsided, however oil inventories are still depleted in New England • In preparation for the next round of cold weather, it is essential that oil inventories are replenished ISO-NE PUBLIC 44 System Operations: Commitment Challenges • Significant challenges associated with the continuous monitoring of the fuel inventories of oil-fired generation to ensure commitments did not jeopardize the long term availability of resources • Several oil-fired generators were postured to conserve oil and ensure system reliability • On numerous occasions, high load projections in Hydro Quebec created uncertainty in the availability of deliveries over the Phase II and Highgate interfaces ISO-NE PUBLIC 45 PV AND WIND OUTPUT Impact of Snowfall on Energy from PV • Snowfall followed by cold weather led to uncertainty of load forecast accuracy • It is necessary to continue to improve the understanding of snowfall on PV resources in New ISO-NE PUBLIC 47 PV Generation Behind the Meter Estimated Behind the Meter PV Output Derived from statistical sampling of actual meter readings ?E5timated Output ?Winter Irradiance Potential ?Narneplate Capacity 2500 20m 15?? A 1000 12f24 12(25 12,!23 12,!29 12,90 12131 1J1 1,9 1,14 us 116 ISO-NE pusuc ff ill? - PV Generation In Front of the Meter 12/24 12/25 12/26 12/2?r 12/23 12/29 12/30 12/Front of the Meter Solar Generation ?Actua Output Winter Irradiance Potential ?Nameplate Capacity 2mm] 7Nm I .LJL Ill- .. ISO-NEPUBUC LL w- ?k . Wind Generation After 00:01 on 1/5/18, several wind plants in the region experienced intermittent high speed wind cutout events. Curtailments are due to transmission congestion. ISO-NE PUBLIC 50 MARKET DATA Millions Daily DA Market Cost Before and During the Cold Snap $100 $80 $68.6M Daily Average $60 Daily DA Mkt Value $40 $18.7M Daily Average $20 DA Market is 97% of Total Energy Market Value $0 ISO-NE PUBLIC 52 Daily System Load Increased 21% after Christmas 500 - 1: .: 450 - Daily NEL 413,000 Avg 2 ?5 350 342,000 Avg 300 - Telemetered system load values 250 12/1 12/6 12/11 12/16 12/21 12/26 12/31 1/5 ISO-NE PUBLIC ff Ill Hourly DA LMPs, December 1-January 8 Hou rly Day-Ahead LMPs 5450 Calder temps, higher loads, and elevated natural gas prices 5400? $350 5300? 5250? $200 5150? ha?u-d 5100? 550: 50? 5-50 5-100 II .. Hourly RT LMPs, December 1-January 8 Hourly Real-Time LMPs $450 'in. and elevated natural gas prices Colder temps, higher loads, $400 5350? Binding New Hampshire- Maine constraint due to the Binding reserve constraints with loads above forecast over the outage 0f the 33? {Sandv evening peak I Pond-Tewkshurvlline If I 52d3V~ II. I I 35 $150$100 I 550Bindingconstraint on the ?x 3-50 j_ Seabrook South Interface due to the planned outage of the 325 .. .. .- [5colznie-Sand15lr Pond] line 5-100 es~1234 SEMA NEMA WCMA No Minimum Generation Emergencies were declared duringthe period. ISO-NE PUBLIC 7% - I 55 Daily Avg. DA and RT ISO-NE Hub Prices and Input Fuel Prices: December 1-January 8 $300.00 $100.00 GR:Hubwgas_wcsx RT contingencies $180.00 $60.00 $120.00 $40.00 $60.00 $20.00 $0.00 $0.00 Fuel Price ($/MMBtu) $80.00 Binding reserve constraints, loads above forecast, and lost DA capacity 12 / 12 01/ / 1 12 02/ 7 / 1 12 03/ 7 / 1 12 04/ 7 / 1 12 05/ 7 / 1 12 06/ 7 / 1 12 07/ 7 / 1 12 08/ 7 / 1 12 09/ 7 / 1 12 10/ 7 / 1 12 11/ 7 / 1 12 12/ 7 / 1 12 13/ 7 / 1 12 14/ 7 / 1 12 15/ 7 / 1 12 16/ 7 / 1 12 17/ 7 / 1 12 18/ 7 / 1 12 19/ 7 / 1 12 20/ 7 / 1 12 21/ 7 / 1 12 22/ 7 / 1 12 23/ 7 / 1 12 24/ 7 / 1 12 25/ 7 / 1 12 26/ 7 / 1 12 27/ 7 / 1 12 28/ 7 / 1 12 29/ 7 / 1 12 30/ 7 / 1 01 31/ 7 / 1 01 01/ 7 / 1 01 02/ 8 / 1 01 03/ 8 / 1 01 04/ 8 / 1 01 05/ 8 / 1 01 06/ 8 / 1 01 07/ 8 /0 18 8/ 18 Electricity Prices ($/MWh) $240.00 RT LMP DA LMP Natural Gas Underlying natural gas data furnished by: Average price difference over this period (DA-RT): $-12.91 Average price difference over this period ABS(DA-RT): $27.19 Average percentage difference over this period ABS(DA-RT)/RT Average LMP: 14% Gas price is average of Massachusetts delivery points ISO-NE PUBLIC 56 Oil Increasingly on the Margin during Dec. 24-Jan. 8 100% 90% 80% 70% Wood 60% Wind 50% Oil Natural Gas 40% Hydro 30% Coal 20% 10% 0% Note: Reflects price-setting by fuel-type during all intervals when the transmission system was unconstrained ISO-NE PUBLIC 57 01 DE 02 C17 DE 03 C17 DE 04 C17 DE 05 C17 DE 06 C17 DE 07 C17 DE 08 C17 DE 09 C17 DE 10 C17 DE 11 C17 DE 12 C17 DE 13 C17 DE 14 C17 DE 15 C17 DE 16 C17 DE 17 C17 DE 18 C17 DE 19 C17 DE 20 C17 DE 21 C17 DE 22 C17 DE 23 C17 DE 24 C17 DE 25 C17 DE 26 C17 DE 27 C17 DE 28 C17 DE 29 C17 DE 30 C17 DE 31 C17 DE 01 C17 JA 02 N18 JA 03 N18 JA 04 N18 JA 05 N18 JA 06 N18 JA 07 N18 JA 08 N18 JA N1 8 Percentage of Forecast DA Volumes as % of Forecast in Peak Hour GR:dapce_dalo_pct_fxlo_fpk_dly_wcsx Daily: This Month 108% 106% 104% 102% 100% 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% DALO DA Cleared Physical Energy ISO-NE PUBLIC 100% line Note: DA Cleared Physical Energy includes DA generation and net imports 58 Millions Real-Time Posturing NCPC Estimated $7.0M total $4 $3 $2 $1 $0 Does not show ‘totals’ of generation deviations charged to postured resources ISO-NE PUBLIC 59 I ISO-NE PUBLIC Ill??L7 I Note: Data for January 5-8 reflect preliminary settlements I Distribution - Postured -2ndC I Voltage 25:95 Posturing between Jan. 4 and Jan. 8 totals $5 Daily NCPC Charges by Type New England, NY, and PJM Hourly Average Real Time Prices by Month Data through Jan. 8 ISO-NE PUBLIC 61 Summary and Next Steps • The system operated reliably through the extended cold weather event and was relying heavily on oil to meet load and reserves • The ISO is working with individual asset owners to understand their replenishment logistics and outstanding emissions concerns • It is essential that fuel inventories are sufficiently replenished for the rest of the winter period • The ISO will further assess the performance of the market during the cold weather event, and looks forward to discussing these topics with stakeholders ISO-NE PUBLIC 62