2013 itc midwest pib spring presentation€¦ · 2013 itc midwest spring partners in business...

2013 ITC MidwestSpring Partners In BusinessMeeting

WelcomeMike DabneyManager, Stakeholder Relations

• Registration for meeting: Sign in…Chance to Win a PRIZE

• Rest Room Locations

• Lunch

• Partners in Business: Web Sitelocated at www.itctransco.com

• Introductions

Facility and MeetingAccommodations

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Spring Partners in BusinessAgenda

Morning:

• Kick-off, ITC Milestones – Mike Dabney

• Legislative Update – Todd Schulz

• Economic Impacts of Transmission Investments – Don

Morrow

Lunch

Afternoon:

• Economic Impacts of Transmission Investments – Don

Morrow

• State & Federal Regulatory Update – Lisa Stump

• Operations Update for Summer Readiness – Darrel Yohnk

• Wrap-up3

Safe Harbor Language & Legal Disclosure

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• This presentation contains certain statements that describe our management’s beliefs concerningfuture business conditions and prospects, growth opportunities and the outlook for our businessand the electricity transmission industry based upon information currently available. Suchstatements are “forward-looking” statements within the meaning of the Private Securities LitigationReform Act of 1995. Wherever possible, we have identified these forward-looking statements bywords such as “anticipates”, “believes”, “intends”, “estimates”, “expects”, “projects” and similarphrases. These forward-looking statements are based upon assumptions our management believesare reasonable. Such forward-looking statements are subject to risks and uncertainties which couldcause our actual results, performance and achievements to differ materially from those expressedin, or implied by, these statements, including, among other things, the risks and uncertaintiesdisclosed in our annual report on Form 10-K and our quarterly reports on Form 10-Q filed with theSecurities and Exchange Commission from time to time.

• Because our forward-looking statements are based on estimates and assumptions that are subjectto significant business, economic and competitive uncertainties, many of which are beyond ourcontrol or are subject to change, actual results could be materially different and any or all of ourforward-looking statements may turn out to be wrong. They speak only as of the date made andcan be affected by assumptions we might make or by known or unknown risks and uncertainties.Many factors mentioned in our discussion in this presentation and in our annual and quarterlyreports will be important in determining future results. Consequently, we cannot assure you thatour expectations or forecasts expressed in such forward-looking statements will be achieved.Actual future results may vary materially. Except as required by law, we undertake no obligation topublicly update any of our forward-looking or other statements, whether as a result of newinformation, future events, or otherwise.

Marking 10 Years of ITC andFive Years of ITC Midwest

Status of regulatory commitments made at the time of ITC

Midwest transaction

• Rebuilt Arnold-Vinton-Dysart-Washburn line by year-end

2009

• Completed construction of Salem-Hazleton Line (80 miles

of 345kV transmission) on April 25, 2013

• Rebuild 34.5 kV System– Work under way on revised schedule; approximately 173 miles

rebuilt

• Support generator interconnection requests– Approximately 2,460 MW of wind generation connected

• Improve Reliability– Significant progress underway5

ITC 10-yearVideo

Marking 10 Years of ITC andFive Years of ITC Midwest

Proud of our

record of

accomplishments,

working to

accomplish

even more

in the

years ahead!

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2013 ITC MidwestSpring Partners In BusinessOperations Excellence Meeting

LegislativeReview

Todd Schulz, Manager,State Government Affairs

Iowa Legislative Review

• Introduction

• Makeup of Iowa’s General Assembly

• Major issues of the 2013 legislativesession

• No transmission issues passed during thisyears session

• Issues to be aware of in future legislativesessions

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Quanta Technology, LLC

4020 Westchase BoulevardSuite 300Raleigh, NC 27607 USATel: +1 919-334-3000www.quanta-technology.com

Smart Solutions, Practical Results

Economic Impacts ofTransmission Investment

Donald MorrowQuanta Technology

May 15 & 16, 2013

The Top Specialty Contractor serving Utility Industry– NYSE: PWR

– S&P 500 company

– Ranked #1 utility specialty contractor byEngineering News-Record

– Numerous safety and innovation awards

Quanta Services

• Extensive experiencewith both transmission &distribution

• More than 75% of allinvestor-owned utilitiesin the US

• More than 90% ofCanadian utilities

• Industry leaders andFortune 500 companies

Quanta Services

QUANTA TECHNOLOGY

Who we are:

• Independent arm of Quanta Services

• Technical, regulatory & business consulting

• 100+ professional staff with an averageexperience of 20+ years in the industry

• Deep experience in project development –both transmission & distribution

• Utility and regulatory agency clients

• Headquarters in Raleigh, NC, with regional USAand international offices

QUANTA TECHNOLOGY – CLIENTS

National Grid USANevada PowerNY Power AuthorityNortheast UtilitiesNorthern Virginia Electric Corp.Pacific Gas and ElectricPepco Holdings, Inc.Public Service of New MexicoPuget Sound EnergyRocky Mountain PowerMidAmerican EnergySan Diego Gas & ElectricSeattle City LightMUDSnohomish PUDSouthern California EdisonSpectra EnergyUnited IlluminatingXcel Energy Energy Industry Organizations

CEATI (Canada)California Energy CommissionDOE National Energy TechnologyLaboratory (NETL)EPRIMAPPCORNatural Resources CanadaNISTNERCNorth Carolina SustainableEnergy AssociationPublic Utility Research Center of FloridaWECCTexas Public Utility Commission

ISOs/RTOs

ISO-NEMidwest ISONew York ISOPJM InterconnectionSouthwest Power Pool

Energy Suppliers

CalpineDeerpath EnergyDirect EnergyExelon Generating CompanyNextEra (FPL Energy)Intermountain ElectricOak Creek EnergyPSEG PowerSouthern Nuclear

Industrials

HuntsmanShell OilTesoro Refining &Marketing

Other Organizations

DashiellEast Carolina UniversityNARUCPenn State UniversityPennwellQuanta Energy ServicesRealtime Utility EngineersSirius SolutionsSun Yat-sen University(Taiwan)University of CA-BerkeleyVirginia Tech University

USA Energy Delivery

Alliant EnergyAmerenAvistaBaltimore Gas & ElectricBonneville Power AuthorityCentral Hudson Gas & ElectricConEdisonDominionDuke EnergyElectric Transmission AmericaEntergyExelon (ComEd/PECO)First EnergyGeorgia TransmissionITCKansas City Power & LightMadison Gas & ElectricNashville Electric Service

International

BC Hydro (Canada)BC Transmission (Canada)CPD International (Australia)Curacao UtilitiesENMAX (Canada)ENECO (Netherlands)

EPCOR Utilities (Canada)Eskom (South Africa)Hydro One (Canada)Israel ElectricMarubeni Caribbean PowerNew Brunswick Power (Canada)NOOR-Karachi ElectricSupply (Pakistan)ONS (Brazil)

• Seattle City Light north downtown substation justification

• SPP project prioritization based upon reliability &economic benefit

• SmarTransmission Project

• System Reinforcement Policy Development for StormHardening

– Public Utility Research Institute of Florida

– Texas Public Utilities Commission

– Massachusetts Attorney General

Recent Relevant Projects

• 19 Years at Madison Gas and Electric– Electric T&D and Gas Distribution Operations

– Energy trading

• 6 Years at American Transmission Company– Led System Operations for start up

– Director System Planning

– Involved in creation of several organizations• MRO, RFC, MISO

• 7 Years at Quanta Technology– Currently lead the Advisory Services team

– Project Executive for several regional planning projects• Looked at transmission outage impacts on utility customers

• Societal benefit calculations of various large scale transmissionplans

My Background

Outline

What is Transmission?

Economic Impacts of Reliability

Economic Impacts of Market Access

Economic Impacts of Enabled Opportunities

Regulatory Climate & Customer Involvement

Q & A

What is Transmission?

Make up of the Electric System

What does Transmission do?

• Supports Reliability of the Grid

• Supports Economic Operations of the System

• Enables Access to Energy Markets

• Increases Operational Flexibility

• All of these have economic value and are ADDITIVE

Current State of TransmissionDevelopment in North America

• After many decades of underinvestment, growing electricity demand and changingneeds, the North American electric grid requires significant investment

– More than 30% of infrastructure is beyond it’s useful life; another 30% is approachingend of useful life

– Electric grid is a patchwork of local networks not built for today’s use– Electric grid interconnection and very little redundancy– Several utilities have signaled a need to add transmission capacity to compensate for

decommissioning of fossil power plants

Energy Policy Act of 2005

FERC & NERC Reliability projects

Growing electricity demand

Environmental regulations

Renewable interconnection

TRANSMISSION GROWTH DRIVERS

USA Transmission InvestmentTrends

Source: WIRES in conjunction with The Brattle Group

• Transmission spending is increasing 2x-3x historical levels

• Expect solid growth for at least the next several years

Historical & Projected Transmission Investment byInvestor Owned Entities

Select U.S. Utility TransmissionSpending Plans

Source: Utility company filings, Avondale PartnersData from select utilities with 2011 & 2012 forecasts

$-

$2

$4

$6

$8

$10

$12

2010 2011 2012

+27%

+27%

InB

illio

ns

Economic AspectsReliability

Improving Reliability of Electric Service

Fewer interruptions of power delivery, and Shorterinterruptions mean:

Improved quality of life

Increased economic value

Greater societal security and public safety

For the customers and communities the utility serves.

Improving Reliability of Electric Service

SAIFI – System Average Interruption Frequency Index

number of power interruptions the average customerexperiences each year

SAIDI – System Average Interruption Duration Index

total time without power per year for the average customer,counting all interruption events

Excluded statistics: sometimes reported as “Storm excluded”values in which the effects of major natural disasters(hurricanes, major floods) have been removed.

Both transmission and distribution outages contribute to both.

Value-Based Planning of Reliability

SAIFI and SAIDI and similar reporting metrics treat all utilitycustomers as the same:

- Farms

- Your home

- Factory with 700 employees All count the same

- Hospital

- Local police station

Planning and justification of capital projects to improvereliability is normally done based on economic valueassessment of the improved service that estimates valueand distinguishes need and importance.

The concept is to balance value ofbetter service against cost to provide it

Incr

eas

ing

do

llars

Improving reliability

Customer costs dueto interruptions

Utility cost toprovide the levelof service quality

Sum of utility andcustomer &societal cost

Value-Based Planning of Reliability

• Utility cost is determinedby utility planning andbudgeting methods.

• Customer cost isdeterminedby interruption cost analysisestimation.

– Established body of credibleapproaches

– Numerous academicpublications – unproven

– DOE’s ICE (Interruption costestimator) website

– Quanta Technology (Willis:PDPRB) detailed estimator

Incr

eas

ing

do

llars

Improving reliability

Customer costs dueto interruptions

Utility cost toprovide the levelof service quality

Sum of utility andcustomer &societal cost

Department of Energy’s ICE website

ICE: Interruption Cost Estimator

DOE’s ICE

• Uses a good, transparent, andcredible methodology to estimateeconomic impact of SAIFI, SAIDI,and benefits of changes thereto.

• Includes embedded Federal statistical database onpopulation and business activity by state.

• Provides quick estimates using this generic state bystate data.

• Provides more detailed estimates if you supplyseveral optional sets of information on service areacustomer types and counts and economic activity.

DOE’s ICE

• Easy to use: set up,enter data, selectoptions, look atresults:

• Get estimated totalvalue, by class, andper customer

DOE’s ICE

Not perfect:

- Weights business and employment costs heavily

- Uses very low values for residential impact

- Focuses on customer-level impact types:

- Does not consider additional societal costs of widespread andrare but long storm and natural disaster outages.

- Transmission outages are much more prone to lead to thesetypes of outages.

- Does not consider that reliability needs increase over time

Overall: a very good one-size-fits-all screening model.

Study Approach We Use

• Use ICE to determine the values it estimates.

• Do assessment of impacts and value using a morecomprehensive and detailed method specific to the utilityand situation at hand

• Document differences and explain/justify them

We’ve also developed our own assessment tool that iscustomized to fit each utility planning situation.

Year to Year Average Outage Performance

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All Outages

Momentary

Sustained

Linear (All Outages)

Linear (Momentary)

Linear (Sustained)

• Iowa & Minnesota Reliability Performance – 2008 to 2012

Example: One Minute SAIDIImprovement in ITC Midwest

DOE Ice: $32 to $35 million present worth

Example: One Minute SAIDIImprovement in ITC Midwest

Quanta Technology: $34 to $38 million

Case Study: Utility in Southern US

• Rural operating region ofabout 300,000 pop.

• Several carpet fiber andmanufacturing plants werethe economic basis forregion’s prosperity.

• Combination of increasingload and aging local transmission ad led, over time, togradually worsening SAIFI and SAIDI throughout region.

• Increasing employment and production at factories, moreuse of robotics and automation, had increased need forreliability over time and sensitivity to interruptions.

• Situation had “become untenable” to employers.

Case Study: Utility in Southern US

• Used Reliability Value BasedMethods to Analyze Situation.

• Determined the residential,commercial, industrial, andsocietal value and benefitsof increased reliability.

• Tailored system enhancementsto target these impacts specifically.

• Justified an $84 million, two-year capital enhancementprogram for the region’s 230, 138, and 69 kV system.

• Provided an estimated $111 million in total value increase

• Impact was actually greater: got that improvement, plus

• Enhancements not only “solved problem” but led to localindustry expanding facilities, adding to regions economicgrowth.

Economic ImpactsMarket Access

• Trading of surplus energy between utilities

• Procurement of energy by load serving entities fromenergy suppliers

• May be

– Bilateral

• Negotiated privately between 2 parties

– LMP Market (FERC Standard Market Design)

• Transparent, visible & monitored

• Locational pricing

• Many buyers/many sellers

• Pricing is “market based” – no cap on the price!

– Subject to the laws of supply and demand

Bilateral: Whatever can be negotiated

Day 2 Market: Clearing price via automated system

What are Energy Markets?

“Transmission congestion occurs when there is insufficient energyto meet the demands of all customers... “

“... congestion is actually a shortage of transmission capacity tosupply a waiting market, and the condition is marked by systemsrunning at full capacity and proper efficiency which cannot serve allwaiting customers...“

“… (w)hen congestion occurs in a competitive market, there is a riskof price gouging from utilities that control transmission services…”

“… the only ways the congestion can be alleviated are to tune thesystem to increase its capacity, add new transmissioninfrastructure, or decrease end-user demand for electricity.”

Source: Energy Dictionary by EnergyVortex.com

What is Congestion?

Key is to balance value of lower energycost against cost to provide it

Incr

eas

ing

do

llars

Reduced Energy Cost

Customer savings forlower energy

Utility cost toprovide access toenergy

Sum of utility costs andcustomer savings

Source: MISO MVP Report January 10, 2012

Energy Prices with Congestion

Source: MISO MVP Report January 10, 2012

Benefit of Alleviating Congestion

• Effect of transmission on energy markets:

– Reduces flow on key, constrained transmission lines

– Connects customers to new generation sources

– Introduces competition between suppliers

– Allows customers to buy from new markets

– Allows retirement of older, less efficient facilities

– Reduces losses, which is wasted energy that “lost” throughheating up transmission equipment

What’s Happening?

• IPL Energy Costs 2007 to 2012

Has it Happened in Reality?

Example from Western US, Year 2020, very heavy wind &solar mix:

Benefit exists for both, significantly greater benefits forhigher gas prices

Understanding Transmission vs.Fuel Cost Impacts

WECC Total Energy Costs (Annual)Low Gas Prices High Gas Prices

(20% increase)

Line In $14,544,253,194 $16,874,465,919

Line out $14,544,463,903 $16,883,475,848

Increase $210,709 $9,009,929

Economic AspectsEnabled Opportunities

• Similar to highways, water, sewer, gas, airports, etc.

• Expansion of infrastructure:

– Enables new, more efficient energy sources

– Supports expansion of environmentally friendly energysupply

– Growth of business opportunities

– Supports community development and growth

Enabling Other Opportunities

Example: Wind Development

Source: AWEA 4th Qtr 2011 Market Report

U.S. Wind Installations By State

Transmission Growth Driver:Wind Generation – Renewable Interconnection

Source: AWEA 1st Qtr 2012 Market Report

U.S. Annual and Cumulative Wind Power Capacity

Very Large Impacts on the ElectricSystem

Wind Development in ITC MWFootprint

• 2,460 MWs of Wind Generation has been added since2008

• Wind has increased from 16% to 43% of total generatingcapacity

• Represents about 1200 turbines with easement rightsbrought to landowners in Iowa and Minnesota

Jobs and Economic DevelopmentImpact Model (JEDI)

• Publicly available at www.nrel.gov

• Created by National Renewable Energy Laboratory(NREL)

• Developed for:

– Wind developers

– Government officials

– Decision makers

– Affected stakeholders

• Designed to shows the economic impacts of wind farmdevelopment

Data Entered into the Model

Project Location IOWAYear of Construction 2010Total Project Size - Nameplate Capacity (MW) 2460Number of Projects (included in total) 20Turbine Size (KW) 2000Number of Turbines 1230Installed Project Cost ($/KW) $1,999Annual O&M Cost ($/KW) $20.00Money Value (Dollar Year) 2008Installed Project Cost $4,918,680,344Local Spending $850,231,046

Total Annual Operational Expenses $807,419,524Direct Operating and Maintenance Costs $49,200,000

Local Spending $13,019,022Other Annual Costs $758,219,524

Local Spending $18,450,000Debt and Equity Payments $0Property Taxes $11,070,000Land Lease $7,380,000

Estimated Value of Wind FarmAdditions

Local Economic Impacts - Summary ResultsJobs Earnings Output

During construction periodProject Development and Onsite Labor Impacts 1,285 $64.2 $78.7Construction and Interconnection Labor 1,072 $51.1Construction Related Services 212 $13.1

Turbine and Supply Chain Impacts 7,807 $326.9 $984.9Induced Impacts 1,905 $65.4 $202.3Total Impacts 10,997 $456.5 $1,265.9

During operating years (annual)Onsite Labor Impacts 112 $5.6 $5.6Local Revenue and Supply Chain Impacts 181 $7.1 $34.6Induced Impacts 97 $3.3 $10.3Total Impacts 390 $16.0 $50.4

NREL’s JEDI Program

Not perfect:

- Default turbine types are dated

- Difficult to model varying size turbines

- Assumes geographic area is uniform

- Wind farm concentration assumed and not enterable – a veryscattered wind farm

- Number of farms is ignored – though each farm has fixed coststhat should be included

- Default settings ignore easement values

Overall: a good one-size-fits-all screening model.

Regulatory Climate& Customer Involvement

• Federal Government (FERC) regulates rates

• States and Local Government regulate siting

• FERC Order 890 (2/16/07) codified eight planningprinciples:

1. Coordination

2. Openness

3. Transparency

4. Information Exchange

5. Comparability

6. Dispute Resolution

7. Regional Participation

8. Congestion Studies

Regulatory Process

• Guiding Principle 1: Make the benefits of an economicallyefficient energy market available to customers by providingaccess to the lowest electric energy costs.

• Guiding Principle 2: Provide a transmission infrastructure thatsafeguards local and regional reliability and supportsinterconnection-wide reliability.

• Guiding Principle 3: Support state and federal energy policyobjectives by planning for access to a changing resource mix.

• Guiding Principle 4: Provide an appropriate cost mechanism thatensures the realization of benefits over time is commensuratewith the allocation of costs.

• Guiding Principle 5: Develop transmission system scenariomodels and make them available to state and federal energypolicy makers to provide context and inform the choices theyface.

MISO MVP Planning Principles

Order 1000 - April 18, 2013

• Focuses on improving transmission planning processes

• Requires cost allocation to those who benefit from thetransmission

1. Those who benefit, pay

2. Those who don’t benefit, don’t pay

3. Cost thresholds should be reasonable

4. Cost should stay within a region unless there is anagreement otherwise

5. Cost allocation must be transparent & documented

6. Different allocation methods can exist for different types ofprojects

• Aligns transmission planning processes & cost allocation

• ITC Stakeholder Process includes working with- Impacted stakeholders for transmission analysis to define needs, help set

assumptions and determine alternatives

interconnection customers to help them better understand and navigate theMISO queue process.

neighboring system owners to minimize impacts caused by ITCM upgradesneeded to connect new generation to the MISO system

neighboring Transmission Owners in developing solutions for mitigation ofconstraints on ITCM’s system when neighboring utilities may be impacted

Local Balancing Authority to incorporate LBA needs into the interconnectionagreement and coordinate communication between the LBA and theinterconnection customer

stakeholders together prior to commencement of project construction toaddress stakeholder needs/concerns and to coordinate efforts

MISO to identify need for upgrades of neighboring systems’ equipment dueto interconnection of new generating facilities to the MISO footprint

Customers have voice

• Transmission development & expansion is occurringacross the US & Canada – its not just ITC

• Encouraging establishment of and facilitating access toenergy markets has been – and continues to be - anobjective of the US Federal Government

• Economic benefits from transmission investment are from:

– Reliability improvements

– Access to markets

– Other enabled opportunities

– These benefits are additive

• These processes are open and customers can participatein these processes to help define the need and shape theoutcome

Summary

Thank You

Questions?

www.quanta-technology.com

Support Slides

Causes of Large Blackouts• Causes of Multiple Contingencies

with Complex Interactions

• Iowa & Minnesota Reliability Performance – 2012 .vs. 2008

Average Circuit Outages

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Average Circuit Momentary Outages

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Average Circuit Outage Duration in Minutes

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ITCT ITCMW METC P10 Q1 Q2 ALL PEER 2008 ITCMW Region


RegulatoryUpdate

Lisa Stump, Manager,Regulatory Affairs – Iowa

• ITC Responds to IPL’s 206 Complaint AgainstITC Generator Interconnection Policy – EL12-104 (November 2012)

• ITC Midwest Attachment FF MISO policy: 100%reimbursement of network upgrade costs forgenerator interconnections

• Decision pending at FERC

Recent Regulatory Developments(FERC and MISO)

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• Revisions to MISO Appendix K – ER13-708 (January 2013)

• MISO TOs file a settlement agreement with MISO toamend Appendix K of the TOA

• Revisions allow the Organization of MISO States(OMS) Section 205 filing rights with respect to costallocation of transmission upgrades and newtransmission within MISO

• FERC Approves NERC Revisions to Definition of the BulkElectric System – RM12-6 (February 2013)

• Establishes a “bright-line” threshold that includes allfacilities operated at or above 100 kV


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• ITCTransmission and METC file voluntary refundreports on tax effects of goodwill – ER13-865 & ER13-867 (February 2013)• Refunds calculated will be implemented through the next true-

up following a Commission Order.

• FERC Approves Revised Reliability Standard forTransmission Vegetation Management RM12-4(March 2013)• Expands applicability of the standard to include certain

transmission lines below 200 kV

• Incorporates new Minimum Vegetation Clearance Distancesand, into the text of the standard, adopts new Right of Waydefinition

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• FERC rules on Order 1000 Compliance – ER13-187(March 2013)

• Accepts changes to MISO regional cost allocationmethods with some conditions

• Determines that MISO complied in part withrequirements to eliminate ROFR but must clarifycertain issues

• FERC Form 1 filed on April 15, 2013

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MISO’s Order 1000 Filing

• Cost Allocation for future Baseline Reliability Projects willbe 100% zonal, effective June 1, 2013

• MISO has to submit informational filings after completion ofMTEP 15 outlining the numbers of MEPs, MVPs and BRPsapproved during the MTEP 14 and MTEP 15 cycles and ananalysis of the BRPs approved in these two cycles

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MISO’s Order 1000 Filing

• Established a process to choose developers for futureMEPs and MVPs, subject to a compliance filing in 4months (July 2013) to address several details• Eliminate consideration of State ROFRs and provisions for States

to choose developers

• Weighting of cost in bid evaluations

• Qualification requirements to bid

• Definition of “upgrades” that will retain ROFR and how projectswith a combination of upgrades and new facilities will be handledin the process

• Use of existing right-of-way

• How implementation schedules are handled in bids79

State Regulatory Update – Iowa

• State Regulatory Update (Iowa)

– Salem-Hazleton 345 kV Line

– 34.5 kV to 69 kV Upgrades

– Other key Iowa projects

– Hawkeye Complaint

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Regulatory UpdateSalem-Hazleton 345 kV Line

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• Description: New80-mile line of 345kV, double circuitedwith existing 161 kVfor portion of line.

• Status:

CONSTRUCTIONCOMPLETE

Regulatory UpdateHiawatha to Coffey

Description: New 10-mile 161 kV line between the proposed CoffeySubstation and the existing Hiawatha substation.

Drivers: Needed to ensure reliability in the fast growing area north ofCedar Rapids.

Status:

1) IUB FranchiseReceived

2) DesignComplete

3) UnderConstruction

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Description: Rebuildapproximately 50 miles of115 kV line to 161 kVstandards.Drivers: Existing 115 kVlines are old and in poorcondition. Existing capacityis insufficient to transportenergy from new generation.

Status:

CONSTRUCTIONCOMPLETE

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Regulatory UpdateNuthatch to Marshalltown

MVPs – 345kV Projects 3 and 4(Iowa Update)

• Project 3:

– Joint ITC/MEC Project

– 345kV

– ~145 miles in Iowa

– ~70 miles in MN

• Project 4:

– Joint ITC/MEC Project

– 345kV

– ~190 miles in Iowa

Public informational meetings have been held in Black Hawk,Buchanan, Kossuth, and Cerro Gordo Counties. Public informationalmeetings are scheduled this year in the remaining counties.Franchise amendments have been filed for the Black Hawk toHazleton Project.84

Regulatory UpdateHawkeye Land Complaint

TIMELINE

• August 7, 2009 – Hawkeye files complaintagainst ITCMW with IUB

• October 14, 2010 – ALJ’s proposeddecision upholds ITCMW’s use of thecrossing statute

• October 28, 2010 – Hawkeye Land appealsALJ decision to IUB

• September 30, 2011 – IUB affirms ALJ’sproposed decision

• October 30, 2011 – Hawkeye appeals IUBdecision to district court

• December 31, 2012 – District Court of LinnCounty affirms IUB decision

• Hawkeye appeals district court decision toIowa Supreme Court85


OperationalExcellence andSummer ReadinessDarrel Yohnk

Director-Real Time Operations,Department

ITC Operations Functional Organization

Operations

Ops Policy &Strategy

OpsEngineering

OperationPlanning

NetworkApplication

Engr.

ComplianceReal Time

Ops

ShutdownCoordination

Training

• From our Operations ControlRoom in Novi, Michigan, ITCmonitors and operates the highvoltage electrical transmissionsystem throughout the ITCsystem footprint

• ITC controls over 12,000 miles oftransmission lines and hundredsof substations serving acombined peak load of 26,000megawatts

• ITC Midwest 34.5 kV system iscontractually operated by AlliantEnergy in Cedar Rapids

• New pictureshere.

ITC System Operations

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ITC Holdings

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ITC Midwest System Highlights

Service Area ITC Midwest

Approx. Total System Peak Load 3740 MW

Approx. Total Transmission Miles 4733

RTO Membership Midcontinent ISO (MISO)

RE Membership Midwest ReliabilityOrganization (MRO)

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ITC Midwest Interconnections

ITCMidwest

NSP

GRE

Alliant

Muni,Co-ops

and IPPs

DPC

CEMPW

AMIL

AMMO

MEC

WAPA

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Operational Excellence

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• As the result of our singular focuson transmission, ITC’s commitmentto preventive maintenance hashelped maximize the availability ofcritical equipment and thetransmission system.

Proactive Maintenance

– ITC spends three times more on preventive maintenance thanreactive, unplanned activities

– Capital investment and maintenance programs result in improvedreliability and overall system performance

– Our maintenance programs are the key drivers of systemperformance, compliance with NERC reliability standardsand maintaining a fully operable transmission system

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• Root cause analysis and feedback into both the maintenance planand capital improvements

Systematic Approach toOutage Reduction

Identify and document cause of each sustained outage

• < 5% of outages are recorded as “unknown” cause

Committee of operations, engineering, planning andstakeholder relations reviews each outage

• Identification of system planning/maintenance/operatingimprovements or larger scale projects

• Initiate additional inspections, special maintenance orstudy projects

Track performance trends

• Circuits with repeat outages are identified and givenextra attention

Separate committee performs an after action review forall human performance events

Example: It was realized through the outagetracking process a line with multipleoperations occurring during the fall season,a project was initiated to place animalguards around the structures to preventfuture operations

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• Since 2008 ITCM momentary outages have been reduced by 64%

• ITCM has averaged a 15% reduction in momentary outages fromyear to year over this period

Reliability – 5 YearMomentary Outage Performance

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• Sustained outages have been reduced by 55% since 2008

• ITCM has averaged a 10% reduction in sustained outages from year toyear over this period

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s

SUSTAINED OUTAGES69KV +

Reliability – 5 YearSustained Outage Performance

96

• Over 1000 total outages experienced during 2008, less than 500during 2012

• ITCM has averaged nearly an 8% reduction in sustained outages and4% reduction in momentaries since 2008

0

100

200

300

400

500

600

700

800

900

2008 2009 2010 2011 2012

Ou

tage

s

MOMENTARY OUTAGES

0

50

100

150

200

250

2008 2009 2010 2011 2012

Ou

tage

s

SUSTAINED OUTAGES

Reliability – ITC Midwest Performance

97

2008 2009 2010 2011 2012

ITCMW 65.40 33.30 30.60 28.30 14.40

R² = 0.9097

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Min

ute

s

System Average Interruption DurationIndex (SAIDI) Transmission Only

Source: Alliant

2008 2009 2010 2011 2012

ITCMW 0.52 0.42 0.40 0.41 0.25

R² = 0.8243

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Ou

tage

s

System Average Interruption FrequencyIndex (SAIFI) Transmission Only

Source: Alliant

• Continuous downward trend in outage statistics that impact enduse customers

• Projections indicate the trend will continue


98

2008 2009 2010 2011 2012

ITCMW 125.04 79.38 77.09 68.66 58.27

R² = 0.9447

0

20

40

60

80

100

120

140

Min

ute

sCustomer Average Interruption Duration Index (CAIDI) Transmission

OnlySource: Alliant


99

Operations Updates

100

NERC Facilities Ratings AlertAssessment and Remediation In Progress

• What is it? - In October 2010, NERCissued an advisory Alert to alltransmission owners to review theirfacility ratings and confirm that theymeet the actual field conditions.

Priority High Medium Low

Assessment CompletionTarget Date

2011 2013 2014

Remediation CompletionTarget Date

2012 2014 2015

ITC’s corrective actionsinclude:Reducing circuit rating byimplementing Sag Ratings.Installing new poles or structures.Raising or Modifying existing polesor structures.Lowering distribution circuits.Reducing grade of soil (grading).Removing objects near circuit.Incorporating work with identified re-build or new construction projects.

101

Accomplishments2008 - 2012

Wyoming - Massillon• Conversion of 34.5 to 69kV

Walker REC – Troy Mills Rebuild• Conversion of 34.5 to 69kV plan for the Vinton

– Hazleton area

Palo – Shellsburg Rebuild• Conversion of 34.5 to 69kV plan for the Vinton

– Hazleton area

Marion CKT 0410 34.5kV PartialRebuild• Numerous reliability issues due to unshielded

design and poor physical condition

• Partial rebuild will improvedreliability in the near term

Salem – Hazleton 345kV

• 81 miles of 345kV line, improved reliability byproviding a second source to the Dubuque area

• Allows for increased transmission flows providingaccess to less expensive generation sources

Downtown Industrial 161kV• Allows ITC to retire several 34.5kV lines and is part

of the Cedar Rapids area transmission systemimprovements

Heron Lake - Lakefield 161kV Rebuild• Decreases line losses• Increases system reliability

Marshalltown-Franklin 115 to 161 Conv.• Increases reliability and line capacity by replacing

aged equipment

Completed 173 rebuild miles and 73 conversion miles

102

Generation Additions2008 - 2012

• G426/538 IA

• G358 Faribault County, MN

• G298 Dickenson County, IA

• G735 IA

• G604 Steele County, MN

• G612 Story County, IA

• H008 Tama County, IA

• H009 Tama County, IA

• H096 Greene County, IA

• G870 MN

• G164 MN

• G798 IA

• H078 IA

• H007 Delaware County, IA

• G540 Worth County, IA

• G548 Worth County, IA

• G595 IA

• G172 IA

• G573 IA

• J112 MN

• G947 IA

Approximately 2500 MW of wind generation

103

Summer Readiness

104

Summer Assessments

• ITC participated in various regional assessments, includingERAG 2013 Summer Assessment and MISO 2013Coordinated Summer Assessment

• ITC performed its own individual system assessments

• Not anticipating any problems meeting the needs of loadserving entities in Southern Minnesota or Iowa for summerpurchases that must be transported into and/or across theITCMW system to meet summer 2013 demand

• The ITCMW system is expected to perform well for a widerange of operating conditions

105

• This year’s summer peak isexpected to exceed lastyear’s load

• Two cases are run: Normalsystem bias and high South-North bias

• NERC Alert Sag RatingsIncorporated

• Long term outages included

• 20% of wind generationcapacity online

• Baseload units online nearmax output

3350

3400

3450

3500

3550

3600

3650

3700

3750

3800

3850

3900

2009 2010 2011 2012 2013

Lo

ad

(MW

)

Year

ITCM Peak Loads

2012 Summer Assessment

106

Operational Challenges

• Midwest Challenges– Various 345kV and 161kV contingencies have heightened

awareness– Operating guides are in place to mitigate overloads or voltage

violations should contingency occur– Peaking generation and system reconfiguration will help to alleviate

violations– Coordination process with MISO on re-dispatching generation or

using Market-to-Market tool to reduce through-flows is in place

• Midwest Solutions– The new Salem-Hazleton line will resolve many issues along with

generation redispatch– NERC Alert sag limit ratings are in effect on a number of line

sections, permanent fixes will help to reduce loading107

• In addition to our normal preventive maintenance, ITC performsspecial activities to get ready for the peak load:

– Summer readiness equipment inspections of substations,transformers, capacitors

– Aerial inspection of lines

• Operational preparations include:

– Operation Engineering Summer Assessment presentation andtraining class to all ITC system operators

– Summer Readiness coordination meetings with LDCs,Neighboring utilities and Regional Reliability Committees.

– Review emergency procedures

– Implementation of conservative maintenance policy

Summer Preparations

108

• With many system improvement projects inplace and maintenance up to date, ITCMW isexpected:

– To meet summer peak demands

– Perform well for a wide range of operating conditions

• ITC continues to work to achieve and maintainOperational Excellence to provide you with bestin class service and reliability

Summary

109

Questions?

110

Thank you!

• We appreciate your time and effort to participate in today’sPartners in Business meeting

• For copies of today’s ITC presentations please visit ourweb-site at: www.itctransco.com, click on ITC Midwest,click on Partners in Business, click on Meeting and Events

• A link to our meeting evaluation will be e-mailed to you.We appreciate your feedback on our meetings, to continueto bring you value

Mike Dabney Keith Eyler

[email protected] [email protected]

www.itctransco.com111

Coming up

112

Coming up

Watch for the dates of our PlanningPartners in Business Meetings and

Attachment O Meeting this Fall

Buckle Up andTravel Safely!

113

2013 itc midwest pib spring presentation€¦ · 2013 itc midwest spring partners in business...

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