# Presentation: 276403

## New England’s Platform for Infrastructure Development

**Boston**
**September 13, 2004**

## Stable platform for growth

- Pat Wood, III: Federal Energy Regulatory Commission

## 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

- Pat Wood, III: Federal Energy Regulatory Commission

## New England generation capacity increased 23 percent from Jan. 2000 through May 2004  

**Other**

**Oil**

**Nuclear**

**Hydro**

**Coal**

**Gas**

**New England**

**New York**

**27,956**

**34,521**
**(+ 23%)**

**38,018**
**(+ 7%)**

**35,625**

- Source:  RDI PowerDat.

**New England generation capacity increased 23 percent from Jan. 2000 through May 2004****  **

- Pat Wood, III: Federal Energy Regulatory Commission

## Large increase in gas-fired generation

- Pat Wood, III: Federal Energy Regulatory Commission

## Generation increased overall gas demand

**Generation increased overall gas demand**

- Pat Wood, III: Federal Energy Regulatory Commission

## Gas supply options limited

- 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

**0.25 Bcf/d**

**0.4 Bcf/d**

**0.95 Bcf/d**

**0. 57 Bcf/d**

**0.03 Bcf/d**

**2.7 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.**

- Source:  EEA’s April 2004 Base Case

**Gas supply options limited**

- Pat Wood, III: Federal Energy Regulatory Commission

## Demand close to pipeline capacity

**Source:  EEA’s April 2004 Data Base adjusted**

**Demand close to pipeline capacity**

- Pat Wood, III: Federal Energy Regulatory Commission

## Potential LNG terminals may provide 8.5 Bcf/d by 2010

**1**

**2**

**3**

**4**

**5**

**6**

**7**

**8**

**9**

**10**

**12**

**11**

**Fall River, MA:  0.8 Bcf/d (Weaver’s 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)**

_**Planned Terminals**_

**Existing Import LNG Everett, MA:  1.035 Bcf/d (Tractebel)**

**Potential LNG terminals may ****provide 8.5 Bcf/d by 2010**

- Pat Wood, III: Federal Energy Regulatory Commission

## Transmission grid is strengthening

**Orrington –**
**Point Lepreau**

**New Haven –**
**W. Rutland**

**Plumtree - Norwalk**

**Bergen - NY**

**Sayreville – New Bridge Rd.**

**New Scotland - NYC**

**Holbrook – K Street**

**Canal – Oak St**

**Middletown - Norwalk**

**Millbury - Card**

**Glenbrook - Norwalk**

**New Scobie - Tewksbury**

**Source:  NERC ES&D 2003 version 1, NYISO Power Trends: New York’s Success & Unfinished Business, ISO-New England:  NEPOOL Transmission System Project Listing and PowerMap. **

- Pat Wood, III: Federal Energy Regulatory Commission

## 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

- Pat Wood, III: Federal Energy Regulatory Commission

## 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)

- Pat Wood, III: Federal Energy Regulatory Commission

## Market tests of the platform

- SW Connecticut still stressed
- Pricing/investment signal is distorted
- NYC capacity prices > $100 per kW-year, but next door:
- NE capacity prices < $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

- Pat Wood, III: Federal Energy Regulatory Commission

## 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**

- Pat Wood, III: Federal Energy Regulatory Commission