3-18-16 Regional Energy Infrastructure
Transcript of 3-18-16 Regional Energy Infrastructure
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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
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Welcome
John Wadsworth
Chair, EBC Energy Resources Committee
Partner, Brown Rudnick LLP
Environmental Business Council of New EnglandEnergy Environment Economy
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Welcome
Jeff Nield
Program Co-Chair and ModeratorBusiness Vice President – Area Manager
CH2M
Environmental Business Council of New EnglandEnergy Environment Economy
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Bob Bibbo
Former Principal Environmental EnergyConsultant & Executive
Environmental Business Council of New EnglandEnergy Environment Economy
Has the New England EnergyIndustry Hit the Turning Point?
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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
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Key Stats Inequality Among States
Your New England Electrical Grid“Here For You Here with You”
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We are Forced into Using Clunker Units because of a Lack ofPipeline Capacity during Winter Cold Snaps
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Cheap Natural Gas & Renewables Are Forcing Coaland Nuclear Units to Retire (VY and Pilgrim)
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Power Plants To Be Shuttered
Norwalk Station (oil)350Mws
Brayton Point Station(coal, oil, gas) 1600 Mws
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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
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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
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North-South Transmission Lines to bring Big Canadian Hydro and WindGenerated Power in Southern NE
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Offshore Wind (OSW)On Shore Wind Farm
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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
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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?
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ISO New England Sees Natural Gas and Wind as the Big Winners
ISONE’s Expectations 2013 Grid
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Move West To Regulated Power
Looking South from Denver (lots of wind to the East)
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Maybe
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NEVER
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Nikki Bruno
Manager, Business DevelopmentSpectra Energy
Environmental Business Council of New EnglandEnergy Environment Economy
Has the New England EnergyIndustry Hit the Turning Point?
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EBC Energy Resources Program
Nikki BrunoManager, Business Development
Meeting the Natural GasNeeds of New England
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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
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EBC Energy Resources Program |
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
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EBC Energy Resources Program |
Meeting New England and Atlantic Canada DemandsNew Infrastructure is Needed
NewRegionalSupplies
DecliningSupplies
Algonquinexpansion
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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
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EBC Energy Resources Program |
Algonquin Incremental Market AIM Expansion
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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
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EBC Energy Resources Program |
Atlantic Bridge
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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
Algonquin GasTransmission
Maritimes &Northeast
TexasEastern
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EBC Energy Resources Program |
Firm to the “Last Mile” is Critical Fueling Gas-Fired Power in New England
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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
Algonquin GasTransmission
Maritimes &Northeast
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
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EBC Energy Resources Program |
BOSTON
PORTLAND
NEW YORK
Algonquin GasTransmission
Maritimes &Northeast
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
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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
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EBC Energy Resources Program |
In the WinterNew England Shifts to Coal & Oil
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Source: ISO-NE, Gordan van Welie presentation, November 2015
Winter 2014-2015 Fossil Fuel Mix
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EBC Energy Resources Program |
Reductions - Greenhouse Gas Emissions
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• 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
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EBC Energy Resources Program |
Access Northeast – Key Benefits
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• 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
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Carol J. Holahan, Esq.
Director of Government AffairsNew England Power Generators
Association
Environmental Business Council of New EnglandEnergy Environment Economy
Has the New England EnergyIndustry Hit the Turning Point?
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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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0.0
5.0
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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
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50.0
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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 Economy-Wide CO2 Emissions
83.6MMT
New England economy-wide CO2emissions have dropped 16% since 1990
Source : U.S. Energy Information Administration,www.eia.gov/environment/emissions/state , October 26, 2015
22% drop
from 199065.3MMT
New England Sector CO2 Emissions
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Source : U.S. Energy Information Administration,www.eia.gov/environment/emissions/state , October 26, 2015
Transportationrepresents thelargest share ofCO2 emissions inNew England.
Transportation isthe only sectorwhere CO2emissionsincreased from1990.
0.0
10.0
20.0
30.0
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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
New England Sector CO2 Emissions
Residential Commercial Industrial Transportation Electric
40%Decrease
10% Decrease
18% Decrease
28% Decrease
2% Increase
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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
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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
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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
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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.
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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
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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
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Networking Break
Environmental Business Council of New EnglandEnergy Environment Economy
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Marvin Bellis
Senior CounselEversource Energy
Environmental Business Council of New England
Energy Environment Economy
ISO New England’s Energy Future:Generation and Transmission
Project Proposals
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Click to edit Master title style
Northern Pass Transmission
Marvin BellisSenior Counsel
Eversource EnergyMarch 18, 2016
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Today’s Discussion :Project Introduction
Our Journey to Permitting Approvals To-Date
Project ScheduleObservations and Lessons Learned
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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
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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
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Future Diminishing Supply = Higher Prices
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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 –
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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”
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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 &
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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)
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New Hampshire s People, Government &Environment
Northern Pass:
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Northern Pass:Providing Needed Energy Diversity
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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
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New Hampshire Receives Significant
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$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
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Overview of State and Federal Siting Process
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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
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Milestones for the Northern Pass Project
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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
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Conclusion
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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.)
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Josh Bagnato
Vice President, Project DevelopmentTransmission Developers, Inc.
Environmental Business Council of New England
Energy Environment Economy
ISO New England’s Energy Future:Generation and Transmission
Project Proposals
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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
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• 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
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• 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
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• 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
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• 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)
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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
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New England Clean Power Link Overview
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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
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• 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
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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
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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
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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
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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
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Th F f E P li i h
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Ronald T. Gerwatowski
Environmental Business Council of New England
Energy Environment Economy
The Future of Energy Policy in theRegion – Refereeing the Arguments and
Assuming the Risk of Various Choices
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The Future of Energy Policy in the Region –
Refereeing the Arguments and Assuming the
Risk of Various ChoicesRon Gerwatowski
March 18, 2016
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Massachusetts Driver: Aggressive Global
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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
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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
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l f
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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
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h i k i h i
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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
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l f d f
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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”
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Impacts of Siting Difficulties and
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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?
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L T C
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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”
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I G
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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
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Impacts of State Regulatory
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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
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The Challenge: Balancing Cost with Clean
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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
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Response Panel
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p
Moderator: Dan Belin,Ecology & Environment, Inc.
• Marvin Bellis, Senior Counsel, Eversource Energy
• Josh Bagnato, Vice President, ProjectDevelopment Transmission Developers, Inc.
• Ronald T. Gerwatowski