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January 2012 Capital Investment - National Grid

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Exhibit ___ (EIOP-19)Page 21 of 684thermal capacity with respect to the three Rotterdam 230/115kV transformers and theSpier-Rotterdam #1/#2 115kV double circuit. These conditions present a need tosimultaneously relieve 115kV thermal overloads which affect the transmission supply tothe Northeast Region and to add bulk-power transformation capacity.As discussed in the 2009 Asset Condition Report 2 and the Eastern NY ReinforcementProject Report 3 , Global Foundries’ (GF) commitment to build a chip-manufacturing plantat the Luther Forest Technology Campus (LFTC) site results in projected load growthwithin the Northeast Region that will exacerbate transmission system performanceissues.The Company’s ten-year forecast for the area projects a growth rate of just under 1% forloads within all of Eastern NY. However, a forecast specific to the northeast region thatreflects higher residential growth and anticipated ancillary loads based on economicdevelopment following the addition of Global Foundries projects a growth rate ofapproximately 2.5% over the next five years. The Company has phased the programover several years, so that it has the ability to defer, re-phase or eliminate certain loadgrowth dependent elements of the program as discussed above.Customer Benefits:The transmission reinforcement plan will resolve existing thermal and voltage problemsthat are expected to be exacerbated from projected load growth in the Northeast Region.More specifically, the three existing 230/115 kV transformers at Rotterdam and Spier-Rotterdam #1/#2, which are primary components of the transmission supply for theNortheast Region, already exceed their ratings for certain contingency conditions.Without improvements being made to the transmission facilities in this area, thedevelopment of the LFTC could be jeopardized. Load shedding on the order of hundredsof MWs would be necessary to relieve projected overloads without the new Spier-Rotterdam and Eastover Road projects.In addition, the transmission reinforcement program will reduce dependence on localgeneration for reliability of service within the region. Without local generation availableduring the summer periods, the Spier-Rotterdam 115 kV circuits will be exposed tosingle contingency overloads until the local generation is returned to service. This in turncould require load shedding at or near LFTC for relief. This situation will be resolved withthe addition of the new Spier-Rotterdam line, Eastover Road Substation and Mohican-Battenkill reconductoring – the latter projects being part of this program because ofcurrent transmission performance needs rather than future load growth.2011 to <strong>2012</strong> Variance:The primary variance between the 2011 and the <strong>2012</strong> <strong>Capital</strong> <strong>Investment</strong> Plans (CIP)results from reduced investment associated with the Eastover Road substation.Additional analysis spurred by feedback from DPS staff examined alternatives to a2 Report on the Condition of Physical Elements of Transmission and Distribution Systems, Case06-M-0878, October 1, 2009, pgs. II-17 to II-18.3 Report to DPS: Eastern NY Reinforcement Project – Associated Bulk Transformation Needsand Solution Assessment, November 3, 2011. The investments shown for Eastover Road in thelatter DPS report included spending prior to FY13 whereas the investments shown in this fiveyear Plan exclude spending prior to FY13.II-422

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