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Update presented to the NEPOOL Transmission Committee

New England ITC and the Green Line. Update presented to the NEPOOL Transmission Committee ISO-NE and New England Independent Transmission Company June 2007. The Green Line 660MW HVDC subsea line

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Update presented to the NEPOOL Transmission Committee

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  1. New England ITC and the Green Line Update presented to the NEPOOL Transmission Committee ISO-NE and New England Independent Transmission Company June 2007

  2. New England Independent Transmission Co. The Green Line 660MW HVDC subsea line Designed to enable renewable and low carbon energy from Maine and Canadian Maritimes to reach the NEMA Market Modeled after Neptune Project Seeking to be in RSP2007 so can be in service by 2012/2013 Developed by New England Independent Transmission Co. (“NE ITC”)

  3. New England ITC – FERC Approval NE ITC filed for a FERC Order in December 2006 Sought FERC agreement that it met “independence” and “capability” requirements to be an Independent Transmission Company based on ownership structure, financing capability, and experience as Neptune independent transmission developers Neptune will come on line summer 2007, on schedule and on budget FERC Order of February 20, 2007 gave NE ITC that designation (New England Independent Transmission Company, LLC, 118 FERC ¶ 61, 127 (2007) “As an initial matter, the Commission welcomes innovative projects pursuant to the Independent Transmission Policy Statement. New England ITC explains that it intends to work closely with ISO-NE to ensure the development of an appropriate pro forma ITC Agreement in accordance with Attachment M. Likewise, ISO-NE states that it has agreed to begin these negotiations in the near future. Additionally, New England ITC has begun to work with NEPOOL to discuss and facilitate an understanding of the ITC proposal and the proposed Green Line project.” NE ITC has been engaged in negotiations with ISO-NE to develop an ITC Agreement since March. 3 New England Independent Transmission Co.

  4. New England ITC – The ITC Approach NE ITC committed to being a NEPOOL Participant and participating in stakeholder processes Green Line is the first NE ITC transmission project NE ITC expects to build additional projects in the future NE ITC will consider acquiring existing transmission facilities in New England NE ITC committed to working with ISO-NE, NEPOOL, and the Participating Transmission Owners (PTOs) 4 New England Independent Transmission Co.

  5. The NE ITC Agreement - Principles First ITC Agreement in New England; based on Attachment M of OATT ISO-NE proposed, and NE ITC agreed, to base the ITC Agreement as much as possible on the existing Transmission Operating Agreement (TOA) with the PTOs The TOA is posted on ISO-NE website at http://www.iso-ne.com/regulatory/toa/er06-1181_toa-composite_6-29-06.pdf The TOA reflects FERC-accepted language regarding key concepts such as: ISO-NE’s operating authority over transmission facilities in the New England Control Area core responsibilities of the ISO and transmission owners liability and termination provisions These key concepts appear applicable/useful in NE ITC context NE ITC Agreement to be filed with FERC 5 New England Independent Transmission Co.

  6. NE ITC Agreement – Cost Recovery Material questions that have arisen to date in the negotiations between ISO-NE and NE ITC include: How would service be offered over NE ITC’s facilities; how would NEITC recover the revenue requirement for its facilities under the OATT (e.g., under a separate Schedule 20/21-type arrangement; under the RNS rate)? What sort of interactions with stakeholders and ISO-NE would be required in connection with NE ITC rate filings? Would ISO-NE administer/bill for transmission service over NEITC facilities (ISO-NE currently bills for transmission service on regional facilities but not for PTO Local Service or service on interties with other control areas)? 6 New England Independent Transmission Co.

  7. The NE ITC Agreement - Operations How would the Green Line and other NE ITC facilities interact with existing PTO facilities, including Local Control Centers (“LCCs”) (and would NE ITC have its own LCCs)? Would NEITC offer PTO-type “Local Service” (who would be NEITC’s Local Service customers and how would this relate to ISO-NE’s “Localized Cost determinations” under OATT Schedule 12C)? Under what terms should the NE ITC Agreement be assignable? 7 New England Independent Transmission Co.

  8. The NE ITC Agreement – Planning What contract terms and related OATT/Regional System Plan (“RSP”)/TOA modifications will best accommodate the concepts of: Including in the RSP as a Reliability or Market Efficiency Transmission Upgrade a non-merchant transmission solution offered by an ITC in response to an ISO-NE identified need Providing for revenue requirement recovery for such ITC projects (including development costs once the solution has been included as a Reliability or Market Efficiency Transmission upgrade in the RSP) 8 New England Independent Transmission Co.

  9. The NE ITC Agreement – Planning Would NE ITC have an “obligation to build” similar to PTOs (as expressed in Schedule 3.09(a) to the TOA); if so: What would trigger the obligation: ISO-NE’s inclusion of an NE ITC upgrade in the RSP? How would NE ITC obligation to build be harmonized with TOA provision on PTO ability to build “regulated” projects that are connected to their existing facilities? [Note: Green Line is “offshore” and only the radial lines from its converter stations connect to existing PTOs] Stated another way, what standards would ISO-NE use to decide whether a regulated upgrade should be built by NE ITC or a PTO to whom the upgrade is connected, if (hypothetically) NE ITC and PTO both seek to do so? 9 New England Independent Transmission Co.

  10. The NE ITC Agreement – Joining the TOA Should the ITC Agreement terminate at some point in favor of NE ITC becoming an Additional Participating Transmission Owner (“Additional PTO”) as signatory to the TOA? If so, should this transition be voluntary and/or triggered on a mandatory basis by: Inclusion of an NE ITC transmission project as a Reliability or Market Efficiency Transmission Upgrade under the ISO-NE RSP? Acquisition by NE ITC of assets listed under existing TOA? Commercial readiness of the upgrade to be placed in service? NE ITC’s intent to include an upgrade in RNS (PTF) regional transmission rates? Other events? 10 New England Independent Transmission Co.

  11. Next steps Consideration by NE ITC and ISO-NE of stakeholder input Continued negotiations between NE ITC and ISO-NE Distribution of draft ITC Agreement for discussion at future TC and NPC meetings 11 New England Independent Transmission Co.

  12. Questions and Discussion 12 New England Independent Transmission Co.

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