Proposed Revisions to Competitive Transmission Process and Planning Procedure 4

1. June 18, 2019 | Westborough, MA Michael Drzewianowski (413) 540-4419 | mdrzewianowski@iso-ne.com Order 1000 Competitive Transmission Solicitation and Other Planning Process Enhancements Proposed Revisions to Planning Procedure 4:Pool-Supported PTF Cost Review

2. Based on the results of the Boston 2028 Needs Assessment (which were presented to the Planning Advisory Committee (PAC) in April) the ISO plans to issue its first Request for Proposal (RFP) for a competitively developed transmission solution in December 2019 • In preparation for the upcoming RFP, it is helpful to refine and also clarify some provisions in Planning Procedure No. 4 (PP4) and Attachment D to PP4 • An additional update and corresponding change is proposed in Section I.2.2 of the ISO Tariff • This is the first meeting at the Reliability Committee to discuss these changes • The proposed PP4, Attachment D to PP4, and section I.2.2 revisions are proposed to be effective by mid-December following receipt of a FERC Order • The proposed section I.2.2 revision is anticipated to be filed with FERC in October* • At this meeting, the ISO will focus on: • Introducing relevant background and highlights of the proposal • *Note that related changes are being discussed at the Transmission Committee (see schedule slide)

3. Background • PP4 describes the process for submitting and reviewing Transmission Cost Allocation (TCA) applications along with the roles and responsibilities of the ISO and stakeholders • Presently, this process has been applicable to projects developed under the Solutions Study process • In addition, Attachment D to PP4 discusses the steps utilized or contemplated when developing estimates and is primarily geared towards transmission projects that come through the Solutions Study process

4. Problem Statement • The TCA process has not been needed for projects developed under the competitive transmission process (Reliability, Market Efficiency or Public Policy)

5. Proposal Highlights Several areas of the PP4 and Attachment D can be improved for clarity. For example: • PP4 – Projects Requiring a TCA Application: Clarify that projects selected as part of the competitive transmission process are also required to submit a TCA • PP4 – ProjectsSelected Through the Competitive Transmission Process (New Section): Describe the materials that are required in the TCA submission and describe what will be evaluated • PP4 - Considerations: Provide clarity on what the Localized Cost review will be based on for projects selected though the competitive transmission process • Attachment D: Requires a general clean up • Remove duplicate language and sections • Remove language that contradict Order 1000 In addition, the definition of Localized Cost in Section I.2.2 of the Tariff can be clarified with regards to its application to the competitive transmission process

6. Proposal Overview • For PP4, the ISO proposal is to: • Add clarifying language to Section 1.1.1 to make clear that a project that is developed in the competitive transmission process requires a TCA • Create a new Section (1.5) that describes the required information and review process for those projects • Modify existing section 1.6.2 to describe the review factors for projects developed in the competitive transmission process • For Attachment D to PP4, the ISO proposal is to: • Provide a general cleanup on document and formatting • Remove language that do not align with Order 1000 or is covered in other documents (RSP definitions) • Update and provide clarifications to various sections • Remove duplicate language specifically for construction contingency • For Section I.2.2 of the Tariff, the ISO proposal is to: • Make modifications to the definition of Localized Costs, which are yet to be determined • These changes and updates should make the process more understandable and let applicants know what materials are needed for a cost allocation review for projects that are developed utilizing the competitive transmission process

7. Open Issues • Further discussion is underway with the TC and stakeholders regarding the expectation that the selected Qualified Transmission Project Sponsor (QTPS) is responsible for the development of upgrades and modifications to incumbent transmission owner facilities • PP4 language can not be drafted for stakeholder review until that discussion is finalized and a direction is known

8. Conclusion • Planning Procedure No. 4 and supporting documents need to be revised to provide clarity for the competitive transmission process • The ISO is discussing stakeholder comments regarding modifications to incumbent transmission owner facilities • Plan is to file the Section I.2.2 Tariff changes with FERC in October 2019 • The proposed effective date of the PP4, Attachment D to PP4, and Section I.2.2 of the Tariff revisions is mid-December following receipt of a FERC Order • The following stakeholder schedule supports this outcome

9. Stakeholder Schedule for Proposed Revisions to Planning Procedure 4 - Pool-Supported PTF Cost ReviewProposed Effective Date – Mid-December 2019 • If the associated FERC filing is made by mid-October, the proposed effective date of the revisions would be by mid-December • Transmission Committee is reviewing Attachment K, Section I.3.9 of the Tariff, Section I.2.2 definitions and the draft SQTSPA in parallel

10. Michael Drzewianowski (413) 540-4419 | mdrzewianowski@iso-ne.com