New England Natural Gas Supplies and Demand Presentation to - PowerPoint PPT Presentation

Winter 2013/14 Benchmark and Revised Projections for New England Natural Gas Supplies and Demand Presentation to Planning Advisory Committee April 29, 2014 Kevin Petak Vice President, Natural Gas Markets ICF International 703-218-2753 Comments of Eversource Energy Kevin.Petak@icfi.com Docket No. IR 15-124 Attachment 8 Page 1 of 20 000158

ICF International Disclaimer Warranties and Representations. ICF endeavors to provide information and projections consistent with standard practices in a professional manner. ICF MAKES NO WARRANTIES, HOWEVER, EXPRESS OR IMPLIED (INCLUDING WITHOUT LIMITATION ANY WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), AS TO THIS PRESENTATION. Specifically, but without limitation, ICF makes no warranty or guarantee regarding the accuracy of any forecasts, estimates, or analyses, or that such work products will be accepted by any legal or regulatory body. Waivers. Those viewing this presentation hereby waive any claim at any time, whether now or in the future, against ICF, its officers, directors, employees or agents arising out of or in connection with this presentation. In no event whatsoever shall ICF, its officers, directors, employees, or agents be liable to those viewing this Comments of Eversource Energy presentation. Docket No. IR 15-124 Attachment 8 Page 2 of 20 000159 April 29, 2014 PAC Meeting 2

Study Contacts Mark Babula, ISO Kevin Petak, ICF Wayne Coste, ISO Frank Brock, ICF Project Manager Project Director Technical Manager Lead, Gas Systems Analysis 413-535-4324 703-218-2753 413-540-4266 703-218-2741 mbabula@iso-ne.com Kevin.Petak@icfi.com wcoste@iso-ne.com Frank.Brock@icfi.com Comments of Eversource Energy Docket No. IR 15-124 Attachment 8 Page 3 of 20 000160 3 April 29, 2014 PAC Meeting

Contents  Introduction  Data from Winter 2013/14  Natural Gas Supply and Demand: Projections versus Actual  Revised projection for gas supplies available to electric generators through 2020 Comments of Eversource Energy Docket No. IR 15-124 Attachment 8 Page 4 of 20 000161 4 April 29, 2014 PAC Meeting

Introduction  In 2013, ICF completed the Phase II assessment of New England natural gas supplies, firm LDC demand, and gas supplies remaining for electric generators through 2020. – Phase II included projections for the 90-day winter period (December 1 through February 28) and the peak summer day under a range of weather conditions, based on the prior 20-years of temperature data.  The primary objective of this new “Benchmark” analysis is to re -evaluate the Phase II projections for New England natural gas supplies, firm LDC demand, and gas supplies remaining for electric generators based on data for gas system performance during the winter of 2013/14 (particularly during the polar vortex events), and make adjustment to the projections where necessary.  ISO-NE also provided new projections for peak day winter and summer electric generation gas demand through 2020, based on the results of the latest Forward Capacity Auction (FCA 8). – ICF used these new gas demand projections and the revised projections for gas supplies remaining for electric generators to calculate potential gas supply surplus/deficits on peak winter and summer days Comments of Eversource Energy through 2020. Docket No. IR 15-124 Units used throughout this presentation: Attachment 8 Page 5 of 20 1 Dekatherm (Dth) = 1 MMBtu = 1 Mcf = 1,000 cubic feet 1,000 Dth = 1 MMcf = 1,000,000 cubic feet 000162 April 29, 2014 PAC Meeting 5

The Winter of 2013/14 was the 3 rd Coldest in the Past 20 Years 4,500 Total HDDs, Dec 1 through Feb 28  The winter of 2013/14 was the 1993/94 2013/14 1995/96 coldest in New England since the 2003/04 2007/08 1990s. 4,000 – Between Dec 1 and Feb 28 a 2012/13 3,500 2011/12 total of ~3,500 Heating Degree 2001/02 Days (HDDs), about 10% colder 3,000 than the 20 year average.  Out of the past 21 years, the 2,500 winter of 2013/14 ranks third in 2,000 both total winter HDDs and the coldest average daily 1,500 temperature. – The coldest day was January 3, 1,000 Comments of Eversource Energy 2014, when the weighted average daily temperature was 500 Docket No. IR 15-124 2.7 degrees F.* 0 Attachment 8 Page 6 of 20 * Daily temperatures and total winter HDDs are based on the weighted average hourly temperatures for eight New England weather stations for the gas day ( a 24-hour period starting 10 AM Eastern each day). 000163 6 April 29, 2014 PAC Meeting

LDC Firm Demand: Reported Sendout on Peak Days  The Northeast Gas Association (NGA) provided ISO-NE with recent sendout data and revised Winter Daily LDC Firm Demand: design day estimates for 17 of the 21 New 4-Day Sample Data and New Design Day England LDCs. – The 17 LDCs represent 94% of the region’s 4500 firm demand; the estimates for total New Original Design Day Estimate England LDC sendout were adjusted upward to account for the LDCs that did not report. Revised Design Day Estimate LDC Sendout (1,000 Dth) 4250 – The LDCs did not report the temperatures assumed for the new design day estimates; ICF has assumed a design day temperature Jan 3 Jan 22 of 0 degrees F. 4000  Sendout data was provided for 4 days: Jan 7 January 3, 7, 22, and 23, of 2014. Jan 23 3750 – These were 4 of the 6 coldest days this winter, with average daily temperatures Holiday week and snow storm ranging from 2.7 to 10.1 degrees F. resulted in school and business Comments of Eversource Energy 3500  The highest observed sendout this winter was closures on January 3, 2014 on January 3, which was also the coldest day. which reduced LDC gas demand. Docket No. IR 15-124 – Even though it was the highest demand day, 3250 the combination of a holiday week and a Attachment 8 Page 7 of 20 regional snow storm resulted in January 3, -1 0 1 2 3 4 5 6 7 8 9 10 11 2014 demand being lower than we would Average Daily Temperature (Degrees Fahrenheit) have expected, given the temperature. 000164 7 April 29, 2014 PAC Meeting

LDC Firm Demand: Revision to LDC Firm Demand Model  Based on the new LDC sendout Winter Daily LDC Firm Demand: data, ICF redesigns its model for 4-Day Sample Data versus Model Projections winter daily LDC firm demand. 4,500  The revised design day demand is Original LDC Demand Model about 3% lower than ICF’s Revised LDC Demand Model original estimate at the peak. LDC Sendout (1,000 Dth) 4,250  However, the revised projections for demands between 63 and 45 4,000 HDDs (2 to 20 degrees F) are higher than ICF’s original projection. 3,750 Comments of Eversource Energy 3,500 Docket No. IR 15-124 3,250 Attachment 8 Page 8 of 20 66 65 64 63 62 61 60 59 58 57 56 55 54 Heating Degree Days 000165 8 April 29, 2014 PAC Meeting

LDC Firm Demand: Original and Revised Estimates for Winter 2013/14  Based on this winter’s average 4,500 daily temperatures, the 4,000 Original and Revised models Revised Model have similar results for both LDC Firm Demand (1,000 Dth) 3,500 Peak-Day Demand and 90-Day Original Model Total Demand. 3,000  However, the Revised model’s 2,500 load curve has a Steeper Slope than the Original model: 2,000 – LDC demand averages 5% higher on the 30 Highest 1,500 Days. 1,000 – LDC demand averages 4% Comments of Eversource Energy lower on the 60 Lowest Days. 500 Docket No. IR 15-124 0 1 10 20 30 40 50 60 70 80 90 Attachment 8 Page 9 of 20 12/1/13 through 2/28/14, Ordered Coldest to Warmest Day 000166 9 April 29, 2014 PAC Meeting

Gas Supplies: Pipeline Capacities and Flows  In Phase II, ICF updated it’s assessment of New England In-Bound Pipelines: contracted pipeline capacity into New England. Aggregate Flows versus Aggregate Capacity – For Phase II, ICF estimated contracted 4,000 capacity into the region is 3,719 MMcf/d. – ICF currently projects that capacity 3,500 additions on Algonquin and Tennessee will add a total of 414 MMcf/d of capacity in November 2016; this is slightly lower than 3,000 the Phase II projection of 450 MMcf/d. MMcf / 1,000 Dth  ICF compared this winter’s daily flows 2,500 (derived from nomination data posted on the pipelines’ electronic bulletin boards) to our 2,000 current capacity assumption.  As in past years, we observed that 1,500 nominations on several pipelines were Total Contracted Pipeline Capacity into New England slightly higher than ICF’s estimate of contracted capacity on a few days; on 1,000 January 3 (the peak demand day), total flows Observed Daily Pipeline Flows, Winter 2013/14 Comments of Eversource Energy were about 100 MMcf/d (~2%) above aggregate pipeline capacity. 500 Docket No. IR 15-124 – However, flows were below aggregate capacity on several other high demand - Page 10 of 20 days; therefore we have not changed our Attachment 8 estimate of current pipeline capacity. 000167 10 April 29, 2014 PAC Meeting