3-18-16 Regional Energy Infrastructure

8/19/2019 3-18-16 Regional Energy Infrastructure

http://slidepdf.com/reader/full/3-18-16-regional-energy-infrastructure 1/93

EBC Energy Resources Program:New England’s Energy Future – Exploring the

Diversity of Potential Regional Energy Projects

Environmental Business Council of New EnglandEnergy Environment Economy



Welcome

John Wadsworth

Chair, EBC Energy Resources Committee

Partner, Brown Rudnick LLP






Welcome

Jeff Nield

Program Co-Chair and ModeratorBusiness Vice President – Area Manager

CH2M




Bob Bibbo

Former Principal Environmental EnergyConsultant & Executive


Has the New England EnergyIndustry Hit the Turning Point?



T H E N E V E R E N D I N G S T O R Y O F C L E A N A N D N O W V E R YC H E A P N AT U R A L G A S .

C A N W E M A K E T H E G R I D G R E AT A G A I N ?

E B C N E E N E R G Y R E S O U R C E S E V E N TM A R C H 1 8 , 2 0 1 6

R O B E R T V B I B B OE N V I R O N M E N TA L E N E R G Y A N A LY S T

New England’s 2016Electrical Grid Crisis



Key Stats Inequality Among States

Your New England Electrical Grid“Here For You Here with You”







We are Forced into Using Clunker Units because of a Lack ofPipeline Capacity during Winter Cold Snaps



Cheap Natural Gas & Renewables Are Forcing Coaland Nuclear Units to Retire (VY and Pilgrim)





Power Plants To Be Shuttered

Norwalk Station (oil)350Mws

Brayton Point Station(coal, oil, gas) 1600 Mws



New England Governor’s Collective PerspectiveJanuary 2014

More Natural Gas Pipelineand Generating Capacity

1. Eliminate need to usethe “clunker” oil fired

units during extremecold snaps ( avoids AQhit)

2. Will save NE billions of$ by avoiding the spikesin gas prices and use of

oil units.3. In 1, 2 /14---Bilbo's bill was 50% higher than1, 2/13 ( $178 vs. $269)

Importing Canadian Hydro Via N-S Transmission

1. Get low carbon energyfrom big hydro and zerocarbon energy from wind

2. Provides supply diversity with minimal impacts toconsumers

3. Will reduce region’sreliance on natural gas

4. Hydro as balance for windand solar





CCNG Power Plants in the Making

1. CPV Towantic Energy Center, Oxford CT at 785MW

2. Foot Print Power, Salem MA at 674 MW3. Clear River Energy Center, Burriville RI at 900

MW4. Pioneer Valley Energy Center, Westfield MA, at

400 MW



North-South Transmission Lines to bring Big Canadian Hydro and WindGenerated Power in Southern NE







Offshore Wind (OSW)On Shore Wind Farm



Raimondo Baker Compact, the 2016 Implementation of the2014 Collective Perspective (after Hartford April 2015)

1. Governor Raimondo (D, RI) Supports Clear River Energy (CREC)a 900 MW Combined Cycle Natural Gas Power Plant. SheEventually Gets the Support of Senator Sheldon White House (D,RI), the Climate Activist Leader in US Senate.

2. Baker (R, MA) Administration Files Legislation ( targets hydro) toIncrease Access to Clean, Cost-Effective Renewable EnergyProposal Works to Minimize Climate Change Impacts, AchieveGlobal Warming Solutions Act

3. Baker Administration Grappling with Solar Net Metering Cap4. MA looking to Recoup $100 MM + Investment in New Bedford

Staging Area5. MA Legislation critical for both Big Hydro and Off Shore Wind



March 18, 2016 Questions

1. Will the Raimondo Baker Compact Prevail2. If so how much New CCNG by 2020 ( IMHO , 5000 MWs )3. How Much Big Hydro (1 GW) & OSW (not before 2020)4. What's the Technology Risk of Too Much Investment in the

2016 Options, CCNG & Canadian Hydro? (could we see $millions in stranded assets in 2030 )

5. How Much Solar/ Wind, at what Premium.6. Do Market Rules Need to be Changed to Make The New

England Grid Great Again? OMG, should we go back to

regulated generation?



ISO New England Sees Natural Gas and Wind as the Big Winners

ISONE’s Expectations 2013 Grid



Move West To Regulated Power

Looking South from Denver (lots of wind to the East)



Maybe



NEVER



Nikki Bruno

Manager, Business DevelopmentSpectra Energy





EBC Energy Resources Program

Nikki BrunoManager, Business Development

Meeting the Natural GasNeeds of New England



EBC Energy Resources Program |

Safe Harbor Statement

Some of the statements in this document concerning future companyperformance will be forward-looking within the meanings of the securitieslaws. Actual results may materially differ from those discussed in theseforward-looking statements, and you should refer to the additional

information contained in Spectra Energy’s Form 10 -K and other filings madewith the SEC concerning factors that could cause those results to be differentthan contemplated in today's discussion.

Reg G Disclosure

In addition, today’s discussion includes certain non -GAAP financial measuresas defined under SEC Regulation G. A reconciliation of those measures to themost directly comparable GAAP measures is available on our website.

29




The Power of Our Growing Portfolio

Gas storage facilityGas processing plantPropane terminalNGL storageShale gas formationsCrude storageMajor oil pipeline terminal

Natural Gas Transmission Pipe: 19,000 mi

Natural Gas Storage Capacity: ~300 Bcf

Natural Gas Gathering Pipe: ~70,000 miCrude Transmission Pipe: 1,700 mi

DCP NGL Transmission Pipe: 1,500 mi

SE Gas Processing Capacity: 3.7 Bcf/d

4Q15 DCP Gathered and Processed: 7.1 Tbtu/d

4Q15 DCP NGLs Produced: ~410 MBbl/d

Distribution Pipe: 40,300 miUnion Gas Retail Customers: 1.4 million

30




Meeting New England and Atlantic Canada DemandsNew Infrastructure is Needed

NewRegionalSupplies

DecliningSupplies

Algonquinexpansion

31

BOSTON

PORTLAND

NEW YORK

DecliningSupplies

1. Average Monthly Historical natural gas price ($/Dth) January 2015 – December 2015

2. M3 average trading at $0.08 discount to Henry Hub

$2.53Market Zone 31,2

$4.80AGT Citygate1

Expansion needed to move abundant, cheapshale gas supplies to meet New England and

Atlantic Canada market demands




Algonquin Incremental Market AIM Expansion

32

BOSTON

NEW YORK

Provides growing New England demandwith abundant regional suppliesProject Scope:

~340 MMcf/d of additional capacity to move Marcellusproduction to Algonquin city gatesCapEx: $1B

Customers:LDC Affiliates of UIL Holdings, Eversource, NationalGrid, NiSourceCities of Norwich and Middleborough

Project Status:Received FERC certificate Mar 2015Commenced construction May 2015

In-service 2H16Preliminary Facilities:

Expanding segments from 26” to 42”; reinforcementof existing laterals; and a new lateralModifications at 5 existing compressor stationsNew meter stations and modifications to existingmeter stations

RegionalSupplies

Maritimes &Northeast

TexasEastern

Algonquin GasTransmission




Atlantic Bridge

33

BOSTON

PORTLAND

NEW YORK

Flowing abundant regional productionto New England and Atlantic CanadaProject Scope:

~135 MMcf/d expansion of the Algonquin andMaritimes PipelinesCapEx: $500MM

Customers:Various local distribution companies in New England

Project Status:Filed FERC Application Oct 2015 Receive FERC Certificate 2H16In-Service 2H17

Preliminary Facilities:New compressor station near Weymouth, MAContinued take-up and relay of the AGT mainlineCompressor station unit upgrades in CTMeter station addition and modifications

RegionalSupplies



TexasEastern




Firm to the “Last Mile” is Critical Fueling Gas-Fired Power in New England

34

Who Fuels Gas-Fired PowerGeneration Plants in ISO-NE?

48%

12%

10%

27%

0%

10%

20%

30%

40%

50%60%

70%

80%

90%

100%

Directly connected toISO-NE power plants

3%

Algonquin

Maritimes

Spectra Energy

Tennessee

IroquoisPNGTS/Other

BOSTON

PORTLAND

NEW YORK



TexasEastern Access Northeast is the only proposed project in

New England focused on electric reliability.

AGT and M&N systems directlyconnect to 60% of ISO-NE’s gas -fired generatorsNew gas-fired generatorstotaling ~2,567 MW attaching

to Algonquin by 2019Market area LNG peak shaving




BOSTON

PORTLAND

NEW YORK



TexasEastern

AGT and M&N systems directlyconnect to 60% of ISO-NE’s gas -fired generatorsNew gas-fired generatorstotaling ~2,567 MW attachingto Algonquin by 2019Market area LNG peak shaving

Development ProjectAccess Northeast

35

Project Scope:• Joint development with Eversource and National Grid• ~$3 billion (100%); 900 MMcf/d, in service 2018

Project Benefits:• Takes advantage of existing infrastructure

• Built to handle peak loads• Scalable for future growth• Multiple supply options

Market Context:• Significant increase in production from Marcellus and

Utica shale basins• Decreasing supplies from offshore Nova Scotia• Declining and variable LNG imports• Constraints on natural gas pipelines that connect

New England to the Marcellus and Utica shale basins

AGT and M&N systems directly connect to60% of ISO-NE’s gas-fired generators




In the WinterNew England Shifts to Coal & Oil

36

Source: ISO-NE, Gordan van Welie presentation, November 2015

Winter 2014-2015 Fossil Fuel Mix




Reductions - Greenhouse Gas Emissions

37

• New England’s Independent System Operator (ISO -NE) recently stated in its Regional AirEmissions Report that the “ongoing trend to meet electricity needs with higher -efficiency, lower-emitting gas-fired generators instead of oil- and coal-fired generators has been the biggestcontributor to the long-term decline in regional emissions .”

• The accompanying news release said,

“Looking at year -over-year changes, therehas been a slowdown in emissionsreductions with the key contributor beingincreased generation from high-emittingunits (coal, oil) when natural gas

pipelines are constrained .”

• And , “emissions increases or slowdownin declines…largely reflect winter -timeconstraints on the interstate pipelines,”which operate at or near full capacity toserve heating demand during most of thewinter




Access Northeast – Key Benefits

38

• Focuses squarely on the energy problem facing New England:Winter gas supply

• Directly serves greatest number of natural gas-fired power plants:firm natural gas service to the “ last mile ” is critical

• Energy security from reduced dependence on foreign LNG imports

• Delivers significant savings to customers

• Leverages existing assets, accelerating in-service date andreducing environmental impact

• Essential to support renewable capacity – wind and solar





Carol J. Holahan, Esq.

Director of Government AffairsNew England Power Generators

Association





Massachusetts Electricity Snap-ShotCO2 Emissions, Consumer Costs & Reliability

Carol J. Holahan, Esq.Director of Government AffairsMarch 2016

M h tt CO2 E i i f El t i it



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M i l l i o n M e t r i c T o n s o f C O 2

Massachusetts CO2 Emissions from ElectricitySector

New England-wide electricity sector CO2emissions have dropped 40% since 1990

Regional Greenhouse Gas Initiative costs today makeup approximately 10% of wholesale electricity prices

51% dropfrom 1990

Source : U.S. Energy Information Administration,www.eia.gov/environment/emissions/state , October 26, 2015

25.7

MMT

12.6MMT

Massachusetts Economy Wide CO2 Emissions

http://www.eia.gov/environment/emissions/state




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Massachusetts Economy-Wide CO2 Emissions

83.6MMT

New England economy-wide CO2emissions have dropped 16% since 1990


22% drop

from 199065.3MMT

New England Sector CO2 Emissions






Transportationrepresents thelargest share ofCO2 emissions inNew England.

Transportation isthe only sectorwhere CO2emissionsincreased from1990.

0.0

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New England Sector CO2 Emissions

Residential Commercial Industrial Transportation Electric

40%Decrease

10% Decrease

18% Decrease

28% Decrease

2% Increase





2015 Wholesale Electricity Prices Were 30% Lower Than 2003Bar charts show average system wide Locational Marginal Price (LMP) for ISO-NE held constant in 2003 dollars. Inflation since 2003 calculated using ConsumerPrice Index (CPI) data from the Bureau of Labor Statistics (BLS).

2015 saw 6 ofthe 8 lowestwholesaleelectricityprice months

since 2003.

June 2015was thelowestwholesaleelectricity and

natural gasprice monthsince 2003.

$34.29/MWh

$48.97/MWh



Commodity data obtained from BLS CPI Components; Cable TV data is from FCC Report on Cable TV Prices, Dec ‘14

While the priceof wholesaleelectricity hasdropped since2003, the pricesof other commonhousehold goodshave risendramatically overthat sametimeframe.

60%

80%

100%

120%

140%

160%

180%

200%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Percentage Change in ISO-NE Wholesale Electricity Prices Comparedto Change in Other Commodities Prices Since 2003

ISO-NE Average Day Ahead LMP lb of Ground Beef

Lb of Coffee Orange juice

Cable TV - Expanded Basic Service

reakdown of an Electricity ill



reakdown of an Electricity ill

In just 8 years, WholesalePower Market costs wentfrom making up 58% of anaverage residentialcustomer’s bill to 41%.

Over that same time,customers have seen thecosts of state and federallyregulated Transmissionand Distribution Chargesincrease by more than16% and nearly a five-fold

increase in the costs ofRenewable Energy, RGGIand Efficiency ProgramCharges.

Customer Bills Up 14% in 8 Years with Wholesale Energy Costs Down 19%Source: MA DPU Sheet 1052

N E gl d P G ti g C it



New England Power Generating Capacity

New England All-Time Peak Demand Summer: 28,130 MW – August 2, 2006Winter: 22,818 MW – January 15, 2014

Electric Capacity Selected in FCA 10 forDelivery Year 2019/2020

35,567 MW

New Power Plants Selected in FCA 10 forDelivery Year 2019/2020

1,459 MW

New Power Plants Competing in FCA 10 forDelivery Year 2019/2020

6,720 MW

New Power Plants UnderConstruction/Development, Scheduled toCome Online by June 1, 2019

3,193 MW1,197 MW in Massachusetts alone

Source : ISO New England Informational Filing for Qualification in the Forward Capacity Market, Federal Energy Regulatory Commission,Docket No. ER16-308, November 10, 2015

14,000 MW of new plants were built at the dawn of restructuring without long-term contracts or subsidies. Today, that is being replicated with market-basedinvestments and major interest in new opportunities to support reliability.



New England Electric Generation Fuel Mix

New England benefits from a fuel diversegeneration portfolio.

Renewable Portfolio Requirements mean that atleast 20% of the system must come from qualifyingtechnologies by 2020.Even with expected coal and nuclear plantretirements, there is substantial fuel diversityexpected to remain on the system into the future.

NATURALGAS

41%

NUCLEAR25%

Oil2%

NET IMPORTS16%

RENEWABLES14%

Coal2%

2015 ELECTRIC GENERATION

NATURAL GAS48%

NUCLEAR15%Oil

1%

NET IMPORTS16%

RENEWABLES20%

POTENTIAL ELECTRIC GENERATION BEYOND 2020

Source: ISO New England Resource Mix - http://www.iso-ne.com/about/what-we-do/key-stats/resource-mix

R P l

http://www.iso-ne.com/about/what-we-do/key-stats/resource-mix















Response Panel

Moderator: Jeff Nield, CH2M

• Bob Bibbo, Former Principal Environmental

Energy Consultant & Executive

• Nikki Bruno, Manager, Business Development,Spectra Energy

• Carol J. Holahan, Esq., Director of

Government Affairs, New England Power

Environmental Business Council of New England

Energy Environment Economy



Networking Break




Marvin Bellis

Senior CounselEversource Energy



ISO New England’s Energy Future:Generation and Transmission

Project Proposals



Click to edit Master title style

Northern Pass Transmission

Marvin BellisSenior Counsel

Eversource EnergyMarch 18, 2016



Today’s Discussion :Project Introduction

Our Journey to Permitting Approvals To-Date

Project ScheduleObservations and Lessons Learned

54



55

Eversource is New England’s largest energy delivery company,safely and reliably delivering energy to more than 3.6 millionelectric and natural gas customers in Connecticut, Massachusettsand New Hampshire.

4,270 miles of electric transmission lines

72,000 miles of electric distribution lines

6,500 miles of natural gas distribution lines

578 electric substations

Connecticut: 1.2 million electric customers220,000 natural gas customers

Massachusetts: 1.4 million electric customers283,000 natural gas customers

New Hampshire: 510,000 electric customers

Headquarters: Boston, Hartford

About Eversource Energy





Seasonal Power Price Spread is Growing

57Source: ISO-New England

$0

$20

$40

$60

$80

$100

$120

$140

$160

2008 2009 2010 2011 2012 2013 2014 2015

$ / M W h

Winter Summer



Future Diminishing Supply = Higher Prices

58

0

2

4

6

8

10

12

2012 2013 2014 2015 2016 2017 2018 2019

$ / k W M

o n t h$3B

Total capacity market cost: $1B

$3B

$4B

Incentive Payouts to Generators

Value of Incentive Payouts

Northern Pass Transmission –



Initiative between Eversource Energy andHydro-Québec1,090 MW of clean energy

Approximately 192 miles of new transmissionusing HVDC technology with AC/DCconverters in Québec and NH

$1.6 billion HVDC line, terminal and ACfacilities

Requires a number of state and federalapprovals

‒ DOE - Presidential Permit/EnvironmentalImpact Statement

‒ Army Corps of Engineers

‒ USDA/US Forest Service -Special Use Permit

‒ Federal Energy Regulatory Commission

‒ NH Site Evaluation Committee:“Certificate of Site and Facility”

59

Des Cantons(Québec)

Franklin (New Hampshire)

Deerfield (New Hampshire)

HVDC line

HVDC lineterminations

345-kV AC linetermination

345-kV AC line

Northern Pass Transmission Clean, Reliable Energy

New Hampshire’s People Government &



Population of about 1.3 million; 50% live in two

southern counties that border MassachusettsTopography is heavily forested, mountainous overallin the northern region; hilly in the southern andwestern regions; flat along the coast

50% of land in the northern region under protective

statusTradition of self-sufficiency, independence anddecentralized power

Private property rights are highly valued

State and National government is close to the people

‒ Largest state legislature in the U.S.(400 representatives and 24 senators; all stateofficials elected every two years)

‒ First in the nation presidential primary(encourages political activism)

60

New Hampshire s People, Government &Environment

Northern Pass:



Northern Pass:Providing Needed Energy Diversity

61

Reduced project from 1,200 MW to 1,090 MW

Increased underground route to 60 miles

No view impacts in the White Mountain

National Forest, Appalachian Trail andFranconia Notch areas

Use of advanced cable technology with fewer,lower , and streamlined structures

More than 80% of line is next to existing linesor underground

Substantial economic and environmentalbenefits for NH

61

New Hampshire Receives Significant



62

$3.8 Billion in NH Economic Benefits

LOWERENERGY COST

- $80 million a year - lower energy costs

- Beneficial Power Purchase Agreement

FORWARDNH FUND

- $200 million - economic development, tourism, community betterment, andclean energy initiatives in host communities

NH JOBS &ECONOMIC BENEFITS

- $30 million annually in property taxes

- 2,600 construction jobs

- $7.5 million North Country Job Creation Fund

- $2.2 billion increase in NH GDP

Significant Environmental Benefits

CLEAN ENERGY &NATURAL RESOURCES

- Carbon emissions reduced by about 3 million tons a year

- Partners for NH Fish and Wildlife program

- Mixed use of 5,000 acres in North Country

- Grid upgrades to improve North Country electric system and unlock up to

100 MW of existing small scale renewable energy

Economic and Environmental Benefits

O i f St t d F d l Siti P



Overview of State and Federal Siting Process

63

July

DOE DraftEIS Issued

August

Forward NHPlan Announced

September

NH SEC PublicInfo. Sessions

December 18

NH SECCompletenessDetermination

JanuaryNH SEC PublicInfo. Sessions

OctoberNH SEC filing

November

DOESupplementto Draft EIS

2015

March

SEC & DOEPublic Hearings

2016

Mil f h N h P P j



Milestones for the Northern Pass Project

64

1• SEC Completeness Review – Ruled Complete

2 • DOE Public Comment Period – Spring 2016

3• NH SEC Joint Agency Hearings – Spring 2016

4 • Clean Energy RFP Contract Awards – Spring/Summer 2016

5• SEC Adjudicative Process – Spring to Winter 2016

6• DOE and NH SEC Permits Received – May 2019

C l i



Conclusion

65

Key Observations and Lessons Learned:Framing and effectively communicating the need for a project and itsbenefits must be a top priorityHaving site control before a project begins is criticalExpect that project siting and permitting will take longer and be more costly

than you might think – Recognize that concessions will be needed to address unforeseenissues

– Securing local support for Northern Pass has been the pace-settingfactor, with NIMBY and BANANAism among our biggest challenges

Don’t underestimate the impact of the opposition – They are largely sophisticated, well-funded, and effective at getting their

messages outHaving broad third-party support to provide a balanced perspective isessential (e.g., business, Labor, municipal leaders, etc.)



Josh Bagnato

Vice President, Project DevelopmentTransmission Developers, Inc.



ISO New England’s Energy Future:Generation and Transmission

Project Proposals



MARCH 18, 2016

NEW E NGLAND CLEAN POWER LINK ISO New England’s Energy Future: Generation and Transmission Project Proposals

Business Model – Competitive Merchant Transmission



68

• Transmission Developers Inc. (TDI) was created to meet a market need: ─ New transmission is needed to connect remote clean energy supply with constrained energy

markets seeking cleaner economic generation resources ─ Siting overhead transmission lines for non-reliability projects is difficult

• TDI business model: ─ Shippers pay through FERC merchant model ─ All buried HVdc transmission

─ Development, construction and operational risk with developer

• TDI is currently developing two projects: ─ Champlain Hudson Power Express (NYISO Market) ─ TDI-NE: New England Clean Power Link (ISO-NE Market)

─ Portfolio companies of Blackstone

NECPL – Project Need



69

• New England Governors and Eastern Canadian Premiers issue Sept. 2013 resolution on Energy(37-1), recognizing the need to increase Canadian Hydro in New England

• Governors and Eastern Canadian Premiers have reaffirmed their commitment to increasedrenewable imports at Meetings in April, 2015 (CT) and August, 2015 (Newfoundland)

New EnglandCooperation

• ISO-NE states more than 4,200 MW of generation will retire by 2019 including 1,280 MW ofnuclear and 2,770 MW of oil and coal

• Another 6,000 MW at risk of retiring

Power PlantRetirements

• All six New England States are within the top 11 nationally in the price of electricity• New England is moving to increase Canadian hydro and wind imports as a counterweight to

natural gas, which in 2015 comprised nearly 50% of the region’s electricity production • Overdependence on Natural Gas resulted in approximately $3 billion in additional electricity

costs to Region during 2014 winter

ISO-NE: Fuel Diversity& Regional Power /

Capacity Prices

• All six New England State have aggressive Renewable Portfolio Standards• 2016 MA EOEEA report stated imported hydro is needed to meet GWSA 2020 goal• Nuclear retirements are resulting in regional emission increases for first time in years

Climate ChangeObjectives

New England’s Changing Electricity Portfolio



70

• Significant coal & oil retirements occurring• Nuclear retirements beginning• Retirement void largely filled by gas• Renewables have remained steady over past 15 years

• Transition to gas has reduced average emission rates fromelectric sector by 28% over past 15 years

• VT Yankee retirement resulted in 2015 emission uptick• Pilgrim retirement will likely increase uptick

15%

44% 49%18%

5%4%31%

34% 30%22%

1% 2%14% 16% 15%

2000 2014 2015

Natural Gas Coal Nuclear Oil Renewables/Local Hydro

Data Source: ISO-New England

New England Electric Generation by Source (‘00 – ‘15) New England CO2 Emissions by Fuel (‘12 -’15)

Massachusetts Clean Electricity Partnership



71

• Partnership of clean energy suppliers and transmissiondevelopers

• Seeking competitive long-term contracting opportunitiesthrough legislation

─ 18.9 TWh of hydro & wind

─ Utilities must solicit proposals, but do not have to execute contractsif not cost effective

─ Urgency to pass legislation due to GWSA goals and complexity ofprojects

─ Proposed legislation only addresses approximately 25% of expectedretirements

─ Stem regional trend toward overreliance on gas

IMPORTS vs. RETIREMENTS (next decade)



72

0

2000

4000

6000

8000

10000

ISO-New Englandestimatedretirements

Pilgrim retirement(2017 or 2019)

Non-nuclearretirements (now -2019)

0

2000

4000

6000

8000

10000

Other generation needed

New Gas/Dual Fuel(online before 2019)

Proposed hydro / windimports (2019 and later)

Generation replacement (MWs)

MW

Generation retirements (MWs)

COMPETITION – Proposed Transmission Projects



73

New England Clean Power Link Overview



74

New England Clean Power Link (“NECPL”) Overview - 1,000 MW buried HVDC transmission project- 154 mile route from Canadian border to Ludlow, VT

- $1.2B estimated project cost- Target in-service of 2019; 40+ year expected operating life- Experienced management team also developing the Champlain Hudson Power

Express project in New York

Business Model- NECPL is a merchant transmission project regulated by FERC that will sell

transmission rights at negotiated rates through an Open Solicitation process

Regulatory & Siting- Permitting substantially complete, expected to be completed in Q2 2016- Project is viewed as having very minimal environmental impacts- All required land for route under control- Support from local communities and state leaders

Environmental & Economic- Expected to reduce millions of tons-per-year of CO2- Low impact footprint – submerged and underground installation on established

public ROW’s and through Lake Champlain- Significant economic benefits in Vermont and New England

Proposed Project Route



75

• 97+ miles to be installed on

Vermont side of Lake Champlain• Use of Lake for Project has been

authorized by the State of VT

• Specific route, installationtechniques, and impacts reviewedby State and Federal Agencies

•Cable burial only proposed indepths less than 150 feet

• Time and cost efficiencies will beattained with lake installation vs.standard overland installation

• 57 miles along public rights-of-way or TDI-NE controlled land

─ 43 miles on VT State Roads ─ 10 miles on Town Roads or TDI-NE controlled property

─ 3.5 miles on VT State Railroad

• TDI-NE has agreements with the State and Towns for the useof these rights-of-way

• Cables to be installed in 4’ wide trench next to paved roads

and under dirt roads

Lake Champlain Overland

Mile Proposed Installation

0 – 2 HDD / Diver Lay

2 – 22 Jet Plow

22 – 73 Lay on Bottom

73 – 97 HDD / Jet or Shear Plow

(1) The initial approximately 0.5 miles from the US-Canada border to Lake Champlain is buried underground.

(1)

Jet Plow Installation

Overland Route Proposed through 13 Towns to Ludlow Interconnection Point

NECPL – Outreach and Support



76

Extensive outreach, transparency and partnership building has resulted in a Project that is well supported in Vermont

• Agreements with 3 VT Agencies, 3 VT Utilities and Conservation Law Foundation

• Host Town Agreements with local communities

• Lease / Option Agreement with VT Transportation Agency

“This is good news for Vermont and theregion, which needs more clean, renewableenergy and a way to get it to market ,”

VT Governor Peter Shumlin comment on VTSiting Permit being issued Addison Independent, 1/10/2016

“They (TDI-NE) have worked well withstakeholders and have demonstrated thatlarge energy projects can meet highenvironmental standards ,”

Sandra Levin, Attorney, CLF

Addison Independent, 1/10/2016

“I think TDI did a stellar job of reaching outto everybody, all the stakeholders,” saidChris Recchia, the commissioner of theVermont Department of Public Service,which works on behalf of ratepayers beforethe state’s utility -regulating Public Service

Board, who called it a “textbook case ofhow to do this right .”

Associated Press, 1/12/2016

NECPL Open House - Alburgh, VT

“Well , we've said from the beginning there'sfive, six, seven different projects that couldcome to fruition if we have theauthorization to test the market and seewhat projects actually do exist, and now weactually see one that has already gottenapproval in the state of Vermont ,“

Matt Beaton, Secretary of Energy andEnvironmental AffairsStatehouse News, 1/09/2016

Permitting Summary



77

VT State PermittingCertificate of Public Good (Section 248)

Federal PermittingPresidential Permit

Federal Permitting Army Corps of Engineers

• The Vermont Public

Service Board mustfind that an electrictransmission facilityproject promotes thegeneral good of theState of Vermontpursuant to V.S.A. Title30 Section 248

• Application filed December 8, 2014

• Public hearing held February 24, 2015• Agreements reached with all active parties,

including State Agencies

• Technical hearing on October 20, 2015

• Eight VT Environmental Permits received onNovember 24, 2015

• Application filed May 20, 2014

• Draft Environmental Impact Statement (“EIS”)released May 31, 2015

• Seven comments received on DEIS

• Concurrence received from Departments ofState and Defense, U.S. Fish and WildlifeService, and VT Historic

• FEIS released October 29, 2015, recommendsissuance of a Presidential Permit

• ACOE Sections 10and 404 permitsrequired to ensurecompliance withClean Water Actand Rivers andHarbors Act

• Application filed November 7, 2014

• Application supplemented April 2015

• Application deemed complete and noticed tothe public in July 21, 2015

• Public notice period ended August 21, 2015with minimal comments

• No public hearing required

• Final permit conditions are compatible withProject plans

VT State Sitingpermit issued January 6, 2016

Presidential Permitdecision expected by Q2 2016

Army Corps Permitsissued January 29, 2016

• A Presidential Permit

must be issued forelectric transmissionfacilities at theinternational border

• U.S. Department ofEnergy (“DOE”) issuesthe Presidential Permitand is the lead Federalagency for theenvironmental review

Interconnection Status



78

Proposed Converter Station

Coolidge 345 kV AC Substation

Proposed Interconnection Location near Coolidge Substation in Ludlow

U.S. Interconnection

October 2013 Original Interconnection Request (Q425) filedwith ISO-NE for US Interconnection

February 2015 System Impact Studies work by PTI-Siemenscompleted and submitted to ISO-NE

February 2015 ISO-NE issued new ETU Procedures and NECPLassigned new Queue Position (Q501)

Q2 2016 ISO-NE studies expected to be completed

Canadian Interconnection

October 2013 Interconnection Request filed with Hydro-Quebec TransÉnergie for CanadianInterconnection (177T)

February 2014 Signed System Impact Study Agreement

Q2 2016 Interconnection studies expected to becompleted in Quebec

FERC Approval / Open Solicitation



79

On March 10, 2014, FERC issued an order granting authority to TDI-NE to selltransmission rights on the NECPL at negotiated rates

• FERC’s Order authorizes TDI -NE to allocate transmissioncapacity on the project through an Open Solicitation (“OS”)

• The OS requires TDI-NE to (1) broadly solicit interest frompotential customers and (2) allocate transmission capacity in amanner that is not unduly discriminatory or preferential

• TDI-NE commenced the OS process on October 15, 2015 withthe process being monitored by Boston Pacific, anindependent third party

• Expressions of interest were received on December 4, 2015

• Bilateral negotiations with parties is ongoing

Seven parties submitted expressions of interest for up to 3,200 MW of capacity



Th F f E P li i h



Ronald T. Gerwatowski



The Future of Energy Policy in theRegion – Refereeing the Arguments and

Assuming the Risk of Various Choices



The Future of Energy Policy in the Region –

Refereeing the Arguments and Assuming the

Risk of Various ChoicesRon Gerwatowski

March 18, 2016

82

Massachusetts Driver: Aggressive Global



Massachusetts Driver: Aggressive GlobalWarming Solutions Act goals

• 25% CO2 reductions below 1990 by 2020• 80% CO2 reductions below 1990 by 2050• 2020 goal achievable with “full implementation” of plan

initiatives

• Some stakeholders question whether the long-term goalscan be achieved, as practical matter• Large-scale hydro and other renewables are part of plan• Massachusetts Clean Energy and Climate Plan Update,

2015:

http://www.mass.gov/eea/docs/eea/energy/cecp-for-2020.pdf

83

f










Achieving a low carbon future

• Studies directionally conclude: Radicalelectrification needed

• Transportation• Heating and cooling sources

• Jacobsen Study, Vision of 100% renewables:

http://web.stanford.edu/group/efmh/jacobson/Articles/I/USStatesWWS.pdf

84

l f








Implications for Generation

• Distributed generation plays a role• Large-scale clean resources essential

• Regional generation still important• Reliability must be maintained at the

same time• need for base-load type resources for reliability

85

h i k i h i



The Risks with Resource Mix

• Reliability cannot be maintained with intermittentrenewables alone• Storage has promise to address peaks, but not all

issues

• Distributed generation has limits, and CO2 emissionsoccur from some technologies• Carbon-free nuclear plants will close• What replaces nuclear to act as base-load?

• Likely choice is natural gas• Dilemma: if we increase reliance on natural gas it still

has CO2 emissions

86

l f d f



Implications for Grid Infrastructure

• More dynamic distribution system needed tointegrate distributed generation• Need for transmission investments to reach

large-scale clean resources• Crossing interstate lines not easy• All of these investments must be funded and

will have cost impacts

• Agreeing upon the allocation of costs amongthe states on interstate projects is like “herdingcats”

87

Impacts of Siting Difficulties and



p gLegal Process

• Legal process cuts both ways! (examples: CapeWind and gas pipeline projects)

• Absent federal preemption, well-funded

local legal challenges can stop infrastructure• In the regional context, one state can disruptregional policy

• Will our high regard for due process rightsdisrupt the achievement of policyobjectives?

88

L T C



Long Term Contracts

• Large-scale clean resource projects need long-termcontracts for financing• Unit price of most large-scale clean resources will be above

average wholesale energy prices (no matter what they tell you . . .) ,the cost of achieving the emission reduction objectives .

• Electric transmission for policy projects also need long-termcommitments

• Gas capacity expansion for electric generation, if advanced,would need long-term commitments from utilities

•Costs on many projects assumed locally, but benefitsshared regionally with “free riders”

89

I G



Impact on Generators

• Existing generators tend to be opposed to LTCs for newresources that can suppress energy prices• Revenue losses occur when energy prices are lower and

capacity prices are not high enough to make up the difference• Policy battle emerging between existing generators (needed

for reliability) and new clean resources (needed to meetcarbon reduction goals)• RGGI alone will not result in the broad emissions reduction

goals being achieved• Current market structure is emissions blind• Risk: Not adequately compensating base-load generation

threatens reliability and impacts long-term costs

90

Impacts of State Regulatory



p g yModels

• Policies place heavy reliance on the financialviability of investor-owned utilities, with costspassed through delivery rates over long periods – Risk: Programs and rate designs that provide incentives for

customers to avoid paying the utility can have long-termnegative impacts• Paying for investments, programs, and

initiatives create cost pressure on rates – Risk: Costs will be embedded in rates for 15 to 30 years,

while innovation moves quickly, potentially renderingsome initiatives obsolete and infrastructure stranded

91

The Challenge: Balancing Cost with Clean



Resources, and then choosing the Resources

• Advocates for renewables are often accused ofnot caring about how much it costs• Those concerned about the cost of electricity are

often accused of not caring about ourenvironment

• The challenge of driving a reasonable path downthe middle is before us

• Making thoughtful judgments and choices is noeasy task amidst a multitude of strongly heldopinions from different stakeholders on highlycomplex issues

92

Response Panel



p

Moderator: Dan Belin,Ecology & Environment, Inc.

• Marvin Bellis, Senior Counsel, Eversource Energy

• Josh Bagnato, Vice President, ProjectDevelopment Transmission Developers, Inc.

• Ronald T. Gerwatowski

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