RELIABILITYRELIABILITY

Customer Meeting November 5, 2009Customer Meeting November 5, 2009

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NY Investment PlanNY Investment Plan

Supports National Grid’s vision to be the foremost electricity and gas company, delivering unparalleled efficiency, reliability, and safety vital to the well-being of our customers and communities.

The capital plan will deliver our objectives around safety, reliability, efficiency, and customer satisfaction

The Customer reliability objectives are a primary driver of our

capacity projects, reliability programs, and asset replacement

programs. The capital plan is designed to:

Deliver performance that meets all regulatory targets

Begins the renewal of our aged infrastructure to deliver a

sustainable network.

Provide our customers with a reliable, cost effective service

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Capital Investments for ReliabilityCapital Investments for Reliability

Reliability Enhancement Program –

$1.47 Billion for Upstate NY

2007 – 2011 Commitment period

$0

$50

$100

$150

$200

$250

$300

$350

$ M

illio

ns

2007 2008 2009 2010 2011

Calendar Years

REP Committed $

$ Committed

Transm.27%

SubT12%

Distrib.61%

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Key Drivers of InvestmentKey Drivers of Investment

System Capacity and Stability

Capital expenditures undertaken to upgrade the capability of the T&D delivery system beyond minimum requirements in order to provide improved thermal loading, voltage, stability, reliability or availability performance.

Asset Condition

Capital expenditures required to reduce the risk and consequences of failures of T&D assets e.g. replacing or upgrading system elements such as overhead lines (including wood poles), underground cables and substation equipment

Statutory or Regulatory Requirements

Capital expenditures required to ensure that the T&D facilities meet the minimum legal, regulatory and contractual obligations of the Company. These items include New Business Residential, New Business Commercial, Outdoor lighting, Third party attachments, Land Rights, and Public Requirements including Municipal, State and NERC / NPCC requirements.

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Key Drivers of InvestmentKey Drivers of Investment

Damage/

Failure

Capital expenditures required to replace failed or damaged equipment and to restore the T&D system to its normal operating configuration and capability following a storm or other event. Damage may be caused by storms, vehicle accidents, vandalism or deterioration, among other causes.

Other Other - Capital expenditures that do not fit into one of the other categories or used as a placeholder for future reallocation

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Capital Investments for ReliabilityCapital Investments for Reliability

Typical Commitment PlanSystem

Capacity & Performance

12%

Statutory/Regulatory

52%

Asset Condition

28%

Damage / Failure

7%

Other1%

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Capital Investment ProgramCapital Investment Program

ProgramProgram DescriptionDescription Broad Broad Based / Based /

TargetedTargeted

20092009

ExamplesExamples

Asset Condition

Overhead and underground lines and substation equipment age, performance and condition

Broad Based

Breaker Replacement – Dewitt Station

Replace metal clad at Springfield Station

Rathbun Labrador line (Cazenovia & Fenner) upgrade 100 structures

Tilden Tully line (Onondaga & Lafayette) 33 structures

Sweet Rd. (Manlius) 2+ miles of wire upgrade

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Capital Investment ProgramCapital Investment Program

ProgramProgram DescriptionDescription Broad Broad Based / Based /

TargetedTargeted

2009 Examples2009 Examples

System Capacity & Stability

Loading, voltage and stability of overhead and underground lines and substations

Targeted New East Malloy Station with 4 feeders

Miller St. Station added feeder and replaced bkr

Nelson Rd. (Cazenovia) .4 mile wire and voltage upgrade

Young Rd. (Onondaga) .5 mile wire & 22 pole voltage upgrade

County Rt 12 (Central Square) rebuild 3 miles wire upgrade

Cortland load relief

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Capital Investment ProgramCapital Investment Program

ProgramProgram DescriptionDescription Broad Broad Based / Based /

TargetedTargeted

2009 2009 ExamplesExamples

Statutory/

Regulatory

Program work that is regulatory or statutory driven - New Business, Outdoor lighting, Third party attachments, Land Rights, and Public Requirements including Municipal, State and NERC / NPCC requirements.

Broad Based

Destiny expansion – UG add switchgear and reconductoring

Jefferson Commons – expand UG svc in downtown Syracuse

Hamilton Homes , Oswego – New UG primary system to replace 1950’s system.

4 new hotel/motels in Syracuse – new UG svc.

Hope Lake water park, Greek Peak – new UG svc.

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Capital Investment ProgramCapital Investment Program

ProgramProgram DescriptionDescription Broad Based / Broad Based / TargetedTargeted

2009 2009 ExamplesExamples

Damage/Failure Replace failed or damaged equipment

Broad Based

As damage or failure occurs

Other Other capital work

Broad Based

Install 20 pole top reclosures in Central Region

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Reliability – PSC IndicesReliability – PSC Indices

CAIDI - HoursCAIDI - Hours

Actual Actual 20072007

ActualActual 2008 2008

Forecast Forecast 20092009**

GoalGoal 2009 2009

Central Region 1.721.72 1.481.48 1.8381.838 2.002.00

SAIFI - HoursSAIFI - HoursCentral Region 1.2241.224 .809.809 1.061.06 1.001.00

*Forecast as of October 14, 2009

CAIDI — Average time required to restore CAIDI — Average time required to restore serviceservice

SAIFI — # of times the average customer is SAIFI — # of times the average customer is without power each year. without power each year.

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Emergency Response - ElectricEmergency Response - Electric

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National Grid Emergency Response StructureNational Grid Emergency Response Structure

National Grid is migrating its processes and structure to align with National Incident Command Structure –ICS

The Incident Command System:

Is a standardized, on-scene, all-hazard incident management concept

Allows National Grid to adopt an integrated organizational structure to match the complexities and demands of single or multiple incidents

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Storm ResponseStorm Response

Crew ResponseCrew Response

Utility Mutual Aid

Local Region crews

Local Division crews

ContractorsOther NG Division crewsOther trained NG Dept. crews from Substations, Metering etc.#

Cu

sto

mer

O

uta

ges

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Northeast Region Mutual Assistance GroupNortheast Region Mutual Assistance Group

NY Mutual Assistance

ENERGY EAST( NYSEG/RGE)

ORANGE & ROCKLAND

CENTRAL HUDSON

NATIONAL GRID (Upstate NY, New England, Long Island)

NORTHEAST UTIL (CL&P) -- note that NEU is not in NY State but has been grandfathered into our meetings.

CON EDISON

FIRST ENERGY (OH/PA/NJ)

Canadian Companies New Brunswick Power Hydro One

Hydro Quebec

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Planning ProcessPlanning ProcessIn preparation of Forecasted

Storms we:

Conduct System and Regional preparation meetings, including meteorologists

Review the number of internal crews, support personnel, contractor tree crews, and outside crews that are available

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Restoration ProcessRestoration Process

Initial Response

Make it Safe

Respond To Wires Down – Standby As necessary

Respond to Requests of Public Safety Officials

Clear Roadways

Restore Service to critical facilitieswhere ‘quick wins’ can be achieved

Activate plans for mutual aid deployment and staging area for construction

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RestorationRestoration ProcessProcess

During the Storm

Number one priority is Safety

Severity of the storm will dictate response strategy

Track outage calls within our outage management system to drive most effective restoration strategy

Communications with Public Officials via municipal calls throughout event

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Municipal Customers

Energy Solutions Services

Manage Key Customers Preparation

Pro-active customer contact to anticipated affected customers

Account Managers or Consumer Representatives

iAvenue – Global Connect Broadcast auto call system.

During the Event ESS personnel assigned to County Emergency Operation

Centers, National Grid Regional Control and Storm rooms

ESS remains in contact with affected customers/municipalities

Critical Care customers are assigned Consumer Representatives to initiate contact

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Municipal Customers

Municipal Conference Calls

VP of Customer Operations & Regional Executive coordinate calls

Information provided:

Damage Assessment

Safety Precautions implemented

Summary of Company resources being used

Estimated Restoration Times

Communities will be canvassed for critical information to help prioritize power restoration

Account Managers & Consumer Representatives responsible for contacting their respective municipalities

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Other Reliability ProgramsOther Reliability Programs

How Other Reliability Programs Correlate to Storms

Stronger Infrastructure

Poles & Cross-arms

New components & Safeguards

Insulators, cutouts, animal guards

Minimize Tree Related Outages

Cycle Trimming

Uniform Clearances

Hazard Tree Removal

All combining to minimize outages during Storms

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Other Reliability InitiativesOther Reliability Initiatives

How Other Reliability Initiatives Correlate to Storms

Field Crews Improved Performance through

Smarter, more focused approach

Restoration methodology - Applying “switch before fix” ensuring all potential customers are restored prior to making a repair.

One Person Crew program – “Trouble Shooters”

First Responders –Central Region

7 crews, 6 days a week, 24 hour coverage

All combining to improve restoration response

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Storm ResponseStorm Response

Storm UpdatesStorm Updates

Check National Grid Website under New York then Storm Central

https://www1.nationalgridus.com/niagaramohawk/storm/storm.aspx

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Storm ResponseStorm Response