New England Governors’ Infrastructure Initiative
NEPOOL Participants Committee Update
May 2, 2014

Overview

• Report on NEPOOL Sector Meetings
• Update on continuing State Discussions
• Gas Concept Request for Feedback

NEPOOL Sector Meetings

• States met with each NEPOOL Sector over two days – March 31 & April 14
  • States appreciated Sector member time in preparing for and attending discussions
  • States provided written summary of Sector meetings in memo dated April 29, 2014
• Common Issues/Questions Across Sectors
  • Whether supportive or concerned about state action, there was generally consistent agreement that New England has a problem to solve
  • Nature of the problem: reliability and economic competitiveness
  • Markets vs. other means
  • ISO-NE role

Status of State Discussions To Date

No and/or Low Carbon Resources

• Anticipate one-time solicitation for incremental transmission
• All states share in costs of transmission
• EDC participation in seeking & evaluating power proposals critical, in some states statutorily required
  • States developing protocols to address EDC Conflicts of Interest
• States that enter power contracts will share power costs

Natural Gas Pipeline

• Anticipate one-time solicitation for incremental capacity
• Will request proposals priced in increments of 200 mmcf/day, to allow the evaluation of the cost of adding sufficient increments of additional capacity to achieve levels of at least 1bcf above 2013 levels.
• Seeking input on, alternatives to concept states set out in April 30, 2014 memo by May 30, 2014

Cost Allocation on Transmission, Pipeline: Still talking, anticipate consensus view in the near-term

Natural Gas Pipeline Development Concept

The six New England states are interested in exploring a concept through which to develop incremental gas pipeline for electric power system reliability as explained in a memorandum dated April 30, 2014. To that end, the states welcome comment –

• On the approach generally, and on characteristics of contracting entity and capacity manager to best serve electric customers and to minimize transaction costs
  • On any alternative configurations and structural means to minimize market distortions
• On the utility proposal as set forth in April 22, 2014 letter to NESCOE
• On specific going-forward market adjustments that would eliminate the need for state action to ensure reliability and economic competitiveness through infrastructure investment after the one-time action currently in process

States presently intend to advance a proposal to NEPOOL for discussion in June toward a Participant Committee vote in September. Because time is of the essence, comments to RegionalInfrastructure@nescoe.com as soon as possible appreciated.