New England Electricity Market Overview IPPNY Spring Conference - PowerPoint PPT Presentation

New England Electricity Market Overview IPPNY Spring Conference New England Power Generators Association May 8, 2018

New England wholesale electricity prices have declined by 49% between 2007 and 2017 90 80 $66.72 70 Price per MW/h 60 50 40 30 $33.94 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: https://www.iso-ne.com/static-assets/documents/2018/03/20180306_pr_2017prices.pdf 2

New England transmission rates have increased more than 400% since 2007 120 $111.96 100 Price per kW/year 80 60 40 $27.91 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: https://www.iso-ne.com/static-assets/documents/2015/12/section2-rate-summary.xls 3

Breakdown of a Connecticut Electricity Bill Monthly Bill for Residential Eversource CT Customer Using 600 kWh/mo Total Cost $140 Total Cost $119 $112 113% $120 Monthly Electricity Cost $7 $4 $100 $44 -35% $80 $68 $60 $40 67% $67 $40 $20 $0 Jan-08 Jan-17 Renewable Energy, RGGI, & Efficiency Program Charges Wholesale Power Market Transmission & Distribution Charges Customer Bills Up 6% in 9 Years with Energy Costs Down 35% Wholesale Power Market costs went from making up 61% of an average residential customer’s bill down to 37%.

New generation representing nearly 15% of peak demand is scheduled to come online by mid-2020 ISO New England New Generation 1,600 1,400 1459 1373 1,200 Capacity, MW 1,000 800 600 674 400 353 200 264 0 2016/17 2017/18 2018/19 2019/20 2020/21 Planning Year (June - May) Over 4,000 MW of new generation is being developed without consumer subsidies or state-backed contracts 5

Administrative changes to demand curve introduces market uncertainty Demand Curve Comparison Illustrative Capacity Market $/kW-mth Revenue Impact $20 $18 Capacity Capacity Price Revenue 2014 $16 $/kW-mth Mil.$ Original Demand Curve $14 2014 Original Demand $14.00 $101 Curve $12 2016 Marginal Reliability 2016 $10 $12.50 $90 2018 Impact Marginal Reliability Proposed Impact $8 MRI +Net CONE+ 2017 Marginal Reliability New BTM Solar Modeling $8.55 $62 Impact + Net CONE $6 $4 2017 MRI + Net CONE + Marginal Reliability Impact + 2018 New BTM Solar $6.40 $46 New Net CONE $2 Modeling 2018 vs. 2014 ($55) $0 % Chg. -54% 30,000 32,000 34,000 36,000 38,000 Note: Assumes 600 MW electric generation Total Capacity Offered unit and the market clears at 34,000 MW in MW 6

Fuel security concerns from ISO-NE are driving major market actions • ISO-NE released fuel security analysis stated that load shedding would occur in 19 of 23 fuel mix scenarios in Winter 2023/2024 • Mystic Generating Station – 2,000 MW outside of Boston – Exelon announced retirement by May 31, 2022 as well as purchase of adjacent LNG terminal (Distrigas) • ISO-NE counters by stating intent to hold Mystic 8 & 9 (1,400 MW) due to “fuel security risk”  Fueled by LNG and largest Distrigas customer • ISO-NE has filed a Tariff waiver with FERC seeking ability to hold for reliability  Exelon will now file two-year cost of service contract bringing Mystic 8 & 9 to mid-2024 7

New England state electricity procurements cut to the core of the competitive market • Massachusetts is reviewing a 20-year contract with Hydro Quebec for 9.45 TWh over the New England Clean Energy Connect transmission line in Maine  RFP also out for offshore wind with requirement to get to 1,600 MW in the next several years • Connecticut issued an RFP for 12.45 TWh from Class I RPS, large- scale hydro and nuclear • These RFPs, coupled with existing RPS requirements, mean:  Nearly 60% of electricity demand in New England could be carved out of competitive wholesale markets 8

New England transportation & power plant CO2 emissions from 1990 to 2015 80.0 70.0 Transportation: 60.0 6% Increase since 1990 50.0 40.0 Power Plants: 30.0 40% Decrease since 1990 20.0 Transportation Power Plants Source : http://www.eia.gov/environment/emissions/state/, released October 24, 2017 9

Questions? www.NEPGA.org Follow us on Twitter – @NEPowerGen