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OPSI

Raleigh, NC

Gas Market & Electric Integration

John Lawhorn, Senior Director

Policy & Economic Studies

October. 8, 2013

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Major Interstate Pipelines in the MISO Footprint

OPSI October 8, 2013 Meeting – Raleigh

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MISO’s Gas-Electric Coordination Efforts

Coordination with FERC• MISO has also been actively involved in FERC’s on-going gas-electric coordination efforts, including

participating in technical conferences, providing feedback on key gas-electric issues, and keeping FERC up-to-date on MISO’s collaboration with its Stakeholders and the natural gas industry

OPSI October 8, 2013 Meeting – Raleigh OPSI October 8, 2013 Meeting – Raleigh

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MISO’s Electric and Natural Gas Coordination Task Force

OPSI October 8, 2013 Meeting – Raleigh h

BackgroundMISO Stakeholder group established in Oct. 2012 to provide a forum for cross-industry education and collaboration, to identify gas-electric interdependency challenges, and to develop recommendations for solutions.

Initiative StatusDraft Issue Paper on Misalignment of the Gas/Electric Days Completed Aug. 2013; recommendation to MISO Steering

Committee to survey MISO Market Participants on moving up MISO Day Ahead market schedule

Draft Issue Paper on Resource Adequacy

- Scope Loss of Load Expectation Study to capture fuel risk

In progress; examines GADS reporting, seasonal aspects of resource adequacy, LOLE methodology and capacity accreditation; considers market-based vs. administrative solutions

In progress; study completion targeted for Q1 2014

Draft Issue Paper on Coordinated Operations In progress; examines info/data sharing; trial communication exchange with NG pipelines planned

Develop database of NG generators and associated infrastructure in the MISO footprint

In progress

Develop web platform to consolidate critical pipeline notices impacting MISO, and pipeline overlay overhead display for MISO Ops

Being investigated / in progress

Set up seasonal meetings/conference calls with NG pipelines to improve communication and situational awareness.

Being investigated / in progress

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Phase III Gas Study Overview

OPSI October 8, 2013 Meeting – Raleigh

Takeaways

• The Phase III builds upon MISO’s previous gas infrastructure analyses through the application of complementary methodologies; the outcome is a comprehensive understanding of major gas infrastructure trends in the MISO Midwest and MISO South regions.

MISO Midwest

• There is a clear trend of decreasing sub-regional constraints and increasing interconnectivity in the MISO Midwest footprint, with isolated exceptions.

• Shifting supply and demand fundamentals outside and inside the Midwest Market will increasingly position the region as a destination rather than a waypoint for gas en route to other markets.

• The increased retention of supply passing through the region, the greater diversity of supply options and the growth in Bakken production will provide end users with opportunities to reassess asset portfolios.

• Strong supply basins in the Northeastern US will continue to impact Midwestern flow patterns and will increasingly help serve Midwestern demand; however, infrastructure expansion is still needed to move gas into the region and to address area-specific constraints.

MISO South

• End users in the MISO South Region will continue to have access to numerous supply sources due to an exceptionally well-connected pipeline network.

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APPENDIX

OPSI October 8, 2013 Meeting – Raleigh

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Midwest Demand Still Mostly Residential and Commercial in Base Demand Scenario

Residential /Commercial is largest source of demand in region

Powerburn and Industrial demand have base load growth

Source: Bentek Energy

OPSI October 8, 2013 Meeting – Raleigh

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Midwest Market Area Realizes a More Diversified Supply Portfolio

Source: Bentek Energy

OPSI October 8, 2013 Meeting – Raleigh

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Up to 35% of inflow volumes were destined for downstream markets

Source: Bentek Energy

OPSI October 8, 2013 Meeting – Raleigh

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The future of corridor flows into the Midwest Market

Source: Bentek Energy

OPSI October 8, 2013 Meeting – Raleigh

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Nominal Gas Prices for MTEP13 and Phase III Study Scenarios

OPSI October 8, 2013 Meeting – Raleigh