Electric Reliability and Outage Preparedness Task Force Releases Positive Findings.

Energy Editors/Business Editors

BOSTON--(BUSINESS WIRE)--March 12, 2004

Seven months after a cascading power outage swept through northeastern United States and Canada, the Massachusetts Task Force on Electric Reliability and Outage Preparedness determined the Massachusetts electric infrastructure currently meets all reliability standards.

The 80-page report notes, however, that the level of demand for electricity will change over time, as will the number and type of resources available to serve Massachusetts businesses and residents. Looking forward, the Task Force offers a comprehensive set of recommendations--twenty-six in total-- to ensure that Massachusetts electric customers will continue to benefit from a stable, reliable electric system.

On August 14, 2003, portions of Western Massachusetts were affected along with a large portion of the United States and Canada, including New York and Southwest Connecticut. Fortunately, the lights stayed on in most of Massachusetts because New England electric resources were secure enough to meet the area's needs. The report confirms that the operators, utilities and generators throughout New England worked together effectively, under difficult circumstances, to stabilize the electric system.

"This report underscores the proven reliability of our electric supply system, but we cannot rest on our laurels," said Secretary of Consumer Affairs Beth Lindstrom. "Dependable energy plays a critical role in maintaining a strong economy in the Commonwealth. I am pleased we have developed a foundation to ensure that the Massachusetts economy is poised for growth."

The thirty member Task Force, chaired by Paul G. Afonso, Chairman of the Department of Telecommunications and Energy, was established by Governor Romney the day after the blackout to investigate the reliability of electric service in Massachusetts and to make recommendations to assess the Commonwealth's vulnerability to widespread or cascading power outages.

"I am grateful to this diverse group of professionals who worked together for the common goal of electric reliability. This group was an impressive array of experts ranging from executives in the electric, natural gas and telecommunications industries, to leading consumer and environmental advocates. I look forward to continuing our collective efforts to promote reliable electricity in Massachusetts," said Afonso.

Of particular note:

-- The report identifies emerging concerns with the reliability of electric supply to the downtown Boston and North Shore areas. The report also notes that transmission upgrades such as those planned by NSTAR and National Grid to bring energy from existing power plants into the Boston area, along with the appropriate development of generation resources, may be key to providing reliable electric service to this area.

Recommendation: Massachusetts will closely monitor emerging reliability issues in these areas, and review the transmission siting process to determine whether it could be streamlined while protecting the integrity of the public review process. In addition, the Task Force supports federal legislation to establish mandatory reliability standards, to replace the current voluntary rules. NSTAR's proposal for a 345 kV transmission line, bringing more electricity to Boston through Southeast Massachusetts is pending before the Energy Facilities Siting Board. Also, National Grid has proposed plans to increase delivery of electricity to the North Shore through the Ward Hill-Wakefield transmission facility.

-- Conservation, energy efficiency and distributed generation could contribute to a more stable and diverse electric system.

Recommendation: Massachusetts must seek to eliminate institutional and regulatory barriers to such investments. The Department of Telecommunications and Energy is currently exploring the regulatory and economic barriers to developing distributed generation through an ongoing investigation.

-- The report notes New England's growing reliance on electricity generated from natural gas.

Recommendation: Massachusetts seeks to bring new supplies of natural gas into Massachusetts and New England by increasing pipeline capacity and deliverability. For example, Governor Romney recently signed into law a bill authorizing Tewksbury to extend an easement to Tennessee Gas Pipeline Company for 12-mile expansion of pipeline to provide additional natural gas to Bay State Gas Company. Also, Tennessee Gas Pipeline Company has announced its Freedom Trail project which will bring more natural gas into Massachusetts by expanding the pipeline running from New York. Further, Duke Energy recently completed its Hubline project which will improve the deliverability of natural gas from Canada to Eastern Massachusetts.

The report also noted the critical importance of the operators at Independent System Operator New England, at local electric companies and at power plants, who work together to run the electric system on a day-to-day basis.

"The cooperation of all involved demonstrated the strength of the region's power system, including the technical and communication ability of our systems and personnel," said ISO New England's CEO, Gordon van Welie. "The task force's findings and recommendations will keep the region on the right path toward maintaining a strong electrical energy infrastructure."

Several of the Task Force recommendations focus on preparedness - providing these operators with the necessary tools, information and training to respond to unexpected events of the type that triggered the August 14th blackouts. The report recommends that electric, gas and telecommunications companies, and Independent System Operator New England, should explore opportunities to conduct joint blackout restoration exercises, similar to those already conducted by New England electric providers.

"There's no question that electric reliability is essential to the economic vitality of the state and the jobs produced in our economy," stated Robert Ruddock, General Counsel of Associated Industries of Massachusetts (A.I.M.), the largest statewide employer organization with 7500 members. "A.I.M.'s participation on the Governor's Task Force reflected our members' concerns about these issues. We were pleased to be chosen and have participated in the production of this important report," added Ruddock.

To download a copy of the 80-page report from the Task Force on Electric Reliability and Outage Preparedness, please visit www.state.ma.us/dpu.