2015 New Hampshire Energy Summit

5 October 2015

Robert Scott, Commissioner, New Hampshire Public Utilities Commission

Key Factors Impacting Winter Prices

• Electric Generating Unit Fuel Costs– Natural Gas Pipeline Capacity• Natural Gas Price

– LNG Imports and Price– Fuel Oil Availability and Price

• Import of Electricity Into Region• Weather and Demand for Natural Gas• Demand for Electricity

2015-2016 Winter Period Electric Utility Rate Filings are Lower Than Last Winter

o Energy Service (rate to cover electricity only) filings that cover the upcoming winter period • Liberty - 9.221 cents per kWh for residential customers

~40% less than last winter’s rate of 15.487 cents per kWh Effective November 2015 – July 2016

• PSNH - estimate is 9.65 cents per kWh (with temporary 0.98 cent scrubber recovery rate) 8.6% lower than last winter’s rate Annual rate effective January 1, 2016

• Unitil – 9.409 cents per kWh for residential customers ~40% lower than last winter’s rate of 15.544 cents per kWh Proposed rate effective December 2015 – May 2016

• NHEC - 9.5 cents per kWh 18% lower than last winter’s rate of 11.6 cents per kWh Effective November 1, 2015 – April 30, 2016

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Wholesale Electricity at New England Hub (Real-Time LMP) Natural Gas

The Region has Experienced Volatile Gas and Electric Prices in the Past Few Winters

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Hurricanes hit the Gulf

Before the Recession and

Marcellus Shale gas boom

Winter 2012/2013

Winter 2013/2014

Elec

tric

Ene

rgy

$/M

Wh

Fuel $/MM

Btu

Monthly Average Natural Gas and Wholesale Electricity Prices in New England

Record low natural gas and wholesale electricity prices

Winter 2014/2015

Slide courtesy ISO-NE

55Source: ISO New England, New York ISO, PJM Interconnection

2010-11 2011-12 2012-13 2013-2014 2014-20150

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Winter Season (Dec-Feb) Average Wholesale Electricity Prices2010 –March 2015

ISO-NENYISOPJM EastPJM West

Dolla

rs p

er M

egaw

att H

our (

$/M

Wh)

In Winter 2014-2015, ISO-NE prices were: 88% higher than NYISO, 37% higher than PJM East, and 65% higher than PJM West

6Source: ISO New England

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Dramatically reduced coal/oil operations

New England has Seen Dramatic Changes in Energy Mix

Source: ISO-NE

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$1.00

$2.00

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$6.00

$7.00

2011 - 2012 2012 - 2013 2013 - 2014 2014 - 2015

$1.9 B

$4.9 B

$2 B $1.6 Bbaseline year

$3.5 B

$6.5 B

$3.6 BBillions

New England Winter Wholesale Electricity Costs compared to baseline* December through March

Additional cost compared to Winter 2011/12 baseline Winter Wholesale Electricity Costs

Cost data sourced from ISO- NE's Wholesale Load Cost Reports.

Wholesale costs for 2014/2015 include estimate for March 2015.

*Winter 2011/12 was warmer than normal and natural gas- fired generators had relatively ready access to pipeline capacity without producing significant constraints.

New England’s Expected Retirements

9Source: ISO New England

Robert Scott Commissioner

New Hampshire Public Utilities Commission