New Englands Platform for Infrastructure Development

1
New Englands Platform for Infrastructure
Development

• Boston
• September 13, 2004

2
Stable platform for growth
3
Infrastructure status

• Healthy generation supply
• Needed closer to load
• New gas supply needed
• LNG facilities could satisfy this demand
• Transmission improvements generally in progress
• Need to ensure progress in certain areas

4
New England generation capacity increased 23
percent from Jan. 2000 through May 2004
New England
34,521 ( 23)
38,018 ( 7)
27,956
35,625
Other
Oil
Hydro
Nuclear
Coal
New York
Gas
Source RDI PowerDat.
5
Large increase in gas-fired generation
6
Generation increased overall gas demand
7
Gas supply options limited
0.25 Bcf/d
0.4 Bcf/d
No additional pipeline capacity is projected to
serve the New England region through 2005. The
last approved expansion of the DOMAC LNG facility
will provide some additional LNG volumes.
0.95 Bcf/d
2.7 Bcf/d
Algonquin Gas Transmission Co. Iroquois Gas
Transmission System, L.P. Maritimes Northeast
Pipeline, Llc Portland Natural Gas Transmission
System Tennessee Gas Pipeline Co. Joint
Maritimes/PNGTS
0.03 Bcf/d
0. 57 Bcf/d
Source EEAs April 2004 Base Case
8
Demand close to pipeline capacity
New England
Source EEAs April 2004 Data Base adjusted
9
Potential LNG terminals may provide 8.5 Bcf/d by
2010
7
6
8
10
9
5
Planned Terminals

• Fall River, MA 0.8 Bcf/d (Weavers Cove Energy)
• Somerset, MA 0.65 Bcf/d (Somerset LNG)
• Providence, RI 0.5 Bcf/d (KeySpan BG LNG)
• Offshore Boston, MA 0.8 Bcf/d (Northeast
  Gateway)
• Pleasant Point, ME 0.5 Bcf/d (Quoddy Bay, LLC)
• Quebec City, QC 0.5 Bcf/d (Enbridge/Gaz Met/Gaz
  de France)
• Riviere-Du Loup, QC 0.5 Bcf/d (Cacouna Energy)
• St. John, NB 1.0 Bcf/d (Irving Oil Canaport)
• Point Tupper, NS 1.0 Bcf/d (Access Northeast
  Energy)
• Goldboro, NS 1.0 Bcf/d (Keltic Petrochemicals)
• Belmar, NJ Offshore N/A (El Paso Global
• Logan Township, NJ 1.2 Bcf/d (Crown Landing
  LNG-BP)

Existing Import LNG Everett, MA 1.035 Bcf/d
(Tractebel)
4
1
3
2
11
12
Source Compiled by FERC Staff
10
Transmission grid is strengthening
Orrington Point Lepreau
New Haven W. Rutland
New Scobie - Tewksbury
New Scotland - NYC
Millbury - Card
Holbrook K Street
Plumtree - Norwalk
Canal Oak St
Source NERC ESD 2003 version 1, NYISO Power
Trends New Yorks Success Unfinished Business,
ISO-New England NEPOOL Transmission System
Project Listing and PowerMap.
Bergen - NY
Middletown - Norwalk
Glenbrook - Norwalk
Sayreville New Bridge Rd.
11
Test of platform during cold snap

• Gas and power systems delivered despite record
  low temperatures and record load
• Gas capacity limits reached
• Behavior was competitive
• Gas moved from electric generation to retail
  heating based on price signal
• Gas generation was not appropriately valued, and
  oil units could have been used
• Stress exposed a need for better market
  integration

12
ISO-NE Achieves the Wholesale Power Market
Platform

• Regional independent grid operation
• Regional transmission planning
• Fair cost allocation for new and existing
  transmission
• Market monitoring and market power mitigation
• Spot markets (real time and day ahead markets)
• Transparent efficient congestion management
• Firm transmission rights (financial rights)
• Resource adequacy (capacity obligations and
  markets)

13
Market tests of the platform

• SW Connecticut still stressed
• Pricing/investment signal is distorted
• NYC capacity prices gt 100 per kW-year, but next
  door
• NE capacity prices lt 2 per kW-year, including SW
  Conn
• Which is the correct capacity value given their
  similar supply-demand balance?
• Boston congestion largely resolved
• Proper pricing signals work

14
Further Progress Expected

• Finalize RTO status
• Independence
• Tariff filing rights
• Liability indemnification
• Regional State Committee (NESCOE)
• Seams with NYISO
• Elimination of import/export fees with NYISO
• Virtual regional dispatch
• Resource adequacy