NEPOOL Participant’s Meeting Stratton, Vermont March 12, 2004

1. NEPOOL Participant’s Meeting Stratton, Vermont March 12, 2004 Stephen G. Whitley Senior Vice President & COO

2. Agenda • System Operations • Market Operations • Electric and Gas Wholesale Initiative • Back-Up Detail

3. System Operations

4. Operations Highlights • Boston & Hartford Weather Pattern: • February 2004 had near normal or above normal temperatures. The precipitation was 50% less than the normal, with very little snow. • Peak load of 20,024 MW at 19:00 hours on February 3, 2004. • During February: • NPCC Shared Activation of Reserve Events: • February 2 L/O Mystic #8 @520 MW • February 4 L/O Brayton Point #3 @620 MW • February 9 L/O Roseton #2 @530 MW • No Fuel Delivery Issues

5. Market Operations

6. Day–Ahead & Real-Time Prices, ISO Hub

7. Day-Ahead–LMP Average by Zone & Hub

8. Real-Time LMP Average by Zone & Hub 97.4%

9. Day - Ahead Market vs. Forecast Load Note: All data represents entire month.

10. Day - Ahead LMP

11. Real - Time LMP

12. Settlement Data – Real Time & Balancing Market

13. Electric and Gas Wholesale Initiative

14. Electric and Gas Wholesale Initiative • In response to the events of the January 2004 Cold Snap, TEAC’s Electric and Gas Wholesale Initiative will address specific gas & electric issues: • The results and findings of ISO-NE’s Cold Snap report • Short-term issues – Resolve by Winter 2004/05 • Long-term issues – TBD and coordination with RTEP • Additional areas of investigation as suggested from stakeholders • Liaison to regional and national committees to change existing or develop new policy through regulatory means • NERC GEITF (Gas/Electricity Interdependency Task Force) • NAESB GECTF (North American Energy Standards Board – Gas Electric Coordination Task Force)

15. Electric and Gas Wholesale Initiative • The Working Group will develop recommendations to address physical and business/market issues of both gas & electric systems through: • Cross training of electric & gas system personnel • Establishing emergency communications protocols & procedures • Assess and address system restoration issues • Assess coordination of electric & gas system maintenance requirements • Address market rules and other common issues

16. Electric/Gas Working Group • The first workshop will be held on March 19th at the Sheraton Springfield • Requesting participation from: • New England utility and environmental regulators • Natural gas industry • Interested stakeholders & market community • Timeline • Fully define the problem Spring 2004 • Develop a set of recommendations Fall 2004

17. Agenda Electric and Gas Wholesale Initiative Friday, March 19, 2004 9:30 a.m. – 4:30 p.m. Sheraton Springfield Monarch Place Hotel Springfield, MA

18. Back-Up Detail

19. CT/SWCT

20. SWCT Transmission • Phase I • 18.4 recommended by Reliability Committee on February 3 • Phase II • Town hearings completed • “Need” hearings – March 23-25 • “Underground Technology” segments – April 20-22 • “Overhead” segments and “East Shore” – May

21. SWCT Emergency Capability RFP • Issued 12/1/03 for up to 300 MW for 2004 to 2008 • Received 34 proposals (52 options) • Proposed resources include: • Demand Response • Conservation • Generation • Projects to be selected by viability, cost, and reliability contribution, i.e, right locations

22. Demand Response

23. Demand Response(as of March 1, 2004)

24. Demand Response(as of March 1, 2004) * SWCT assets are included in CT values and are not included in Total

25. Northwest Vermont

26. NWVT Reliability Project Update • State hearing process begun • Pre-filed testimony and discovery complete • Direct hearings complete • Rebuttal phase scheduled from March 15 to April 26

27. New Generation

28. New Generation Update • One new resource (Milford Power 1) was added in February. • Approximately 400 MW expected on line by the end of the year. • Status of Generation Projects as of March 5, 2004: No.MW In Construction 3 289 with 18.4 approval Not in Construction 6 1,444 with 18.4 Approval

29. RTEP

30. RTEP Update • TEAC20 held on March 4. Many helpful comments received on: • Fuel Diversity • Transmission Planning Study Update • Generator Clutch Technology • RTEP04 Assumptions • RTEP04 Resource Adequacy Analysis • Draft ISO/RTO Planning Coordination Protocol • Draft NEPOOL Project List (also discussed at 3/2 RC Meeting) • Final update expected in April • Reclassification of the 2nd New Brunswick Tie from Elective to Reliability under consideration • TEAC21 tentatively scheduled for April

31. RTEP Projects Update - NEMA

32. RTEP Projects Update - SWCT

33. Compliance

34. Compliance Update • A4: Maintenance for Bulk Power System Protection • Requires response to 2004 ISO-NE survey by 1/5/04 • Level 2 sanctions will apply to three Participants for failure to respond on time. • Seven Participants that have not completed their 2003 required maintenance must become compliant by May 31, 2004.

35. Compliance Update (cont.) • A3: Generator Underfrequency Tripping • All Participants responded to the 2003 ISO-NE Survey by 12/1/03 • Five Participants are non-compliant • Two are exempt • Two have plans for compliance • 2004 Surveys on UFLS and UF generator trip settings will be sent out on March 15 and are due May 1.

36. Sanctions • Level 1 – Letter from Director SP to the relevant functional head (operations, planning) of the Industry Participant with copy to NCWG • Level 2 – Letter from COO to the Chief Executive of the Industry Participant with copy to the relevant functional head, other NEPOOL Participants (the NEPOOL Task Forces, RC, NPC) and NPCC • Level 3 – Letter from the CEO to the Board of Directors of the Industry Participant with copies to Level recipients. Post on the ISO-NE Compliance Website. • Level 4 – same as Level 3 with copies to the appropriate State/Provincial regulatory agencies, FERC, DOE, State Governor and Legislators.