New England Roundtable

Fuel Diversity Issues in New England

ISO-NE Phase II Report

April 12, 2002

Richard Levitan

Levitan & Associates, Inc.

Historical Energy Production by Fuel Type

ISO-NE

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000

% o

f To

tal G

Wh Other

Oil

Gas

Coal

Nuclear

Age of New England Conventional Steam Units (Winter)

ISO-NE CELT Report 2002

0

500

1000

1500

2000

2500

3000

3500

4000

4500

>20 >30 >40

Age (years)

Tota

l M

W

Average / Peak Loads in New England

-

5,000

10,000

15,000

20,000

25,000

30,000

Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02

MW

Average

Load

Peak Load

Average / Peak Loads in New England

-

5,000

10,000

15,000

20,000

25,000

30,000

Feb-01

Mar-01

Apr-01

May-01

Jun-01

Jul-01

Aug-01

Sep-01

Oct-01

Nov-01

Dec-01

Jan-02

Feb-02

MW

Average

Load

Peak Load

Net Interchange in ISO-NE

ISO-NE

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Jan-99

Apr-99

Jul-99

Oct-99

Jan-00

Apr-00

Jul-00

Oct-00

Jan-01

Apr-01

Jul-01

Oct-01

Jan-02

Ave

rag

e M

W

HQ Contract terminates

5 x 16 Spark-Spreads in New England

Power Markets Week, Bloomberg

0

5000

10000

15000

20000

25000

30000

Jun-94 Oct-95 Mar-97 Jul-98 Dec-99 Apr-01 Sep-02

Btu/kWh

Spark Spread, PMW 52 Week Avg

Recent Natural Gas and Residual Fuel Oil Prices

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Jan-00

Mar-00

May-00

Jul-00

Sep-00

Nov-00

Jan-01

Mar-01

May-01

Jul-01

Sep-01

Nov-01

$/M

MB

tu

Gas (Henry Hub)

RFO 0.3% (NYH)

Natural Gas Week

Forecast of Energy Productionby Fuel Type

0%

20%

40%

60%

80%

100%

2002 2003 2004 2005 2006 2007 2008 2009 2010

% o

f To

tal G

Wh Other

Oil

Gas

Coal

Nuclear

ISO-NE Phase II Gas Study

• Study time frame:

– Winter 2001-02; Winter 2002-03; Winter 2004-05

• Incorporate new pipeline projects in supply mix

• Revise Reference and High Case natural gas demands

• Quantify amount of “at-risk” gas-fired generation

• Conduct steady-state and transient electric and gas system

contingencies

Merchant Plant Capacity Additions

7,551

10,76611,579

12,542

0

5,000

10,000

15,000

MW

Reference High

Phase I

Phase II

Merchant Plant Entry in New England

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

MW

2000 2001 2002 2003 2004 2005

Phase I High Phase II Reference Phase II High

Phase II Steady-State Modeling Results

• Winter 2002 Peak Day At-Risk 1,352 MW

• Winter 2002-03 Peak Day At-Risk 3,101 MW

• Winter 2004-05 Peak Day At-Risk 2,814 MW

• No delivery constraints in any summer thru ‘05

• Mitigation through distillate oil, in particular

Contingency: Postulated Line Break on Algonquin

BURRILLVILLE

ANP BellinghamNEA Bellingham

Cleary

Dighton

Canal

# Fore River

Manchester

Tiverton

Lake Road

IDC Bellingham

Transient Analysis

2 hours

4 hours

5 hours