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The Northern Pass Project
Anne Bartosewicz Transmission Project Director
Northeast Utilities Platts 2012 Transmission Conference
September 11, 2012
This presentation contains statements concerning NU’s expectations, beliefs, plans, objectives, goals, strategies, assumptions of future events, future financial performance or growth and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, a listener or reader can identify these forward-looking statements through the use of words or phrases such as “estimate”, “expect”, “anticipate”, “intend”, “plan”, “project”, “believe”, “forecast”, “should”, “could”, and other similar expressions. Forward-looking statements are based on the current expectations, estimates, assumptions or projections of management and are not guarantees of future performance. These expectations, estimates, assumptions or projections may vary materially from actual results. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors that could cause our actual results to differ materially from those contained in our forward-looking statements, including, but not limited to, actions or inaction of local, state and federal regulatory and taxing bodies; changes in business and economic conditions, including their impact on interest rates, bad debt expense and demand for our products and services; changes in weather patterns; changes in laws, regulations or regulatory policy; changes in levels and timing of capital expenditures; disruptions in the capital markets or other events that make our access to necessary capital more difficult or costly; developments in legal or public policy doctrines; technological developments; changes in accounting standards and financial reporting regulations; actions of rating agencies; the effects and outcome of our merger; and other presently unknown or unforeseen factors. Other risk factors are detailed in our reports filed with the Securities and Exchange Commission (SEC). Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update the information contained in any forward-looking statements to reflect developments or circumstances occurring after the statement is made or to reflect the occurrence of unanticipated events.
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NU Safe Harbor Provisions
Northeast Utilities Transmission System
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Facts At A Glance*
Overhead Transmission Circuit Miles: 3,794
Transmission Underground Bank Miles: 396
Transmission Substations: 54
Transmission & Distribution Substations: 251
* As of May 2012
Today’s Discussion
• The Northern Pass – Project Overview
• New Hampshire’s People, Government, and
Environment
• Project Status Update
• Public Policy Considerations for Large-Scale
Transmission Projects
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Northern Pass Transmission Project Overview
• An initiative proposed by Northeast Utilities (NU) and Hydro Renewable Energy, Inc. (Hydro-Québec)
• Proposes construction of a conventional HVDC transmission line from Des Cantons, Québec (Northern terminus) to Franklin, NH (Southern terminus)
• 1,200 MW transfer capability
Conventional HVDC technology at 300-kV
− Québec terminal converts the power from AC to DC (rectifier)
− US terminal converts the power from DC to AC (inverter)
• $1.1 billion HVDC line, terminal, and AC facilities are participant-funded (approved by FERC); no impact on the New England regional transmission rate
Des Cantons (Québec)
Franklin (New Hampshire)
Deerfield (New Hampshire)
HVDC Line
HVDC Line
terminations
345-kV AC line
termination
345-kV AC Line
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Northern Pass Transmission Project Overview
Approximately 180 miles of new
transmission line
– 140 miles on existing
PSNH rights-of-way (ROW)
– 40 miles of new ROW
About 140 HVDC; 40 miles AC
• AC radial 345-kV line to connect to the New England bulk power grid at Deerfield, NH
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The Participant-Funded Model
HQ Hydro
Renewable
Energy, Inc.
Northern Pass
Transmission,
LLC
Transmission
Service
Agreement
(TSA)
Northern Pass
Transmission Revenue
Requirements
Revenue
Requirements
100% Rights to
Use the NPT Line
• Bilateral agreement
• Cost-based rates
• Approved by FERC
• No impact on
New England regional
transmission rates
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Key Drivers for Pursuing The Northern Pass
New Hampshire Climate Action Plan
Increasing state and federal environmental regulations
Opportunity to secure additional low-cost, clean, and
reliable energy source that acts as base load generation
at no incremental transmission cost to regional or local
customers
Successful HVDC line already in-service in NH from Des
Cantons, Québec to Sandy Pond, MA
• Built in the 1980s; 2,000 MW transfer capability, total of 192
miles in US; 128 miles located in NH
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Project Benefits
Economic Benefits
• Energy market price reductions annually for New England consumers based on the addition
of new capacity to system, and the price taking nature of this generation
• Property taxes – approximately $25 million across 31 communities
• Jobs – 1,200 local jobs during construction
• No increase to regional transmission costs due to the participant-funded nature of the project
Energy Benefits
• Enhanced regional fuel diversity – up to a 20% reduction in reliance on natural gas
(frees up enough natural gas to heat and supply hot water for nearly a million homes)
• Associated regional reliability improvement
• Enhanced regional resource adequacy
• Reduced congestion for exports out of Québec to New England
• Insurance against fuel shortages, major power plant outages or retirements
Environmental Benefits
• Reduced regional carbon emissions, up to 5 million tons per year – equivalent to the annual
emissions of 900,000 cars
• Equivalent to 3,750 MW of wind (2,500 1.5 MW turbines)
• Equivalent to 10,000 MW of solar (over 40,000 acres)
• Helps meet state and regional clean air goals
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Federal and State Permits & Approvals
Federal Level:
– US Department of Energy: Presidential Permit
(includes NEPA Environmental Impact Statement)
– Army Corps of Engineers (floodplains and wetlands)
– US Department of Agriculture/US Forest Service: Special
Use permit (required to cross White Mountain National
Forest on an existing ROW)
– Federal Energy Regulatory Commission -- Transmission
Service Agreement (complete)
State Level:
NH Site Evaluation Committee: “Certificate of Site and Facility”
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New Hampshire’s People, Government, and
Environment
Total population of about 1.3M
– Most residents live in the
southern part of the state
– More than 50% live in two
southern counties that border
Massachusetts
Topography is heavily forested
– mountainous in the north
– hilly in the Southern and West
– flat along the coastal Southeast
Northern region has about 50% of
its land under protective easement
Called “The Granite State” because
of its extensive granite quarries
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New Hampshire’s People, Government and
Environment
Tradition of self-sufficiency,
independence, and decentralized
power
Private property rights are highly valued
and viewed as sacred
State government is close to the people
– Town Meeting form of government dominates
– Largest state Legislature in the United States
• 400 representatives and 24 senators
• One state representative for every 2,500 citizens
• All state officials are elected every two years
First in the nation presidential primary encourages political activism
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Advancing The Northern Pass in NH
October 2010
Project announced publically – event attended by NH’s
Governor, local officials, represented labor, and media
• Submission of formal DOE application coincided with
announcement; included the identification of a preliminary
referred route and alternate routes
• Proposed preferred route: 140 miles on existing ROW; 40
miles on new ROW from Deerfield to the Canadian border
• Alternative routes proposed were outside of the existing
ROW and would have required additional land acquisition
• Initial media coverage about project and its benefits was
favorable
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Advancing The Northern Pass in NH
October 2010 - 2011
Project initiated intensive communications and outreach along the
preliminary preferred route filed with the DOE
Negative reactions from residents in Northern NH almost
immediately received; they mobilized through the use of community
meetings and protests, newsletters, and social media
• Opponents’ concerns focused on private property rights, their
fear of the use of eminent domain, view shed impacts, effects
on property values and travel and tourism
DOE held seven scoping meetings around the state in March 2011
Legislation proposed in 2011 to prevent the use of eminent domain
for non-reliability projects
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Advancing The Northern Pass in NH
October 2010 – 2011
In April, project amended its DOE application; withdrew most of
the alternative routes to focus on the use of existing ROWs; and
began to identify and secure land or easements in the
northernmost section of the state that have the support of
underlying landowners.
Spring 2012
The Legislature modified the state's existing eminent domain
process to prohibit its use for a transmission facility, unless a
project is deemed a reliability upgrade
Fall 2012
The project is very close to securing a Northern route; we
expect to announce it later this year
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Since Our Project Announcement, New England’s
Dependence on Natural Gas Has Climbed to Historic Levels
16 Source Data: ISO-NE
New England Energy Production
The Increasing Need for Energy Diversity in New England
has Not Deterred Northern Pass Project Opponents
Not unlike other large-scale transmission projects, opponents
include:
• merchant energy generators
• environmental organizations
• local residents and abutters
Ironically, since the time The Northern Pass was announced,
many of these same organizations have not opposed the visual
impacts of two significant wind projects with 400-foot towers
located on virgin ridge lines in New Hampshire’s northern and
central regions and their associated transmission lines
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Our Northern Pass Experience Raises Interesting Public Policy
Questions that Our Industry Must Continue to Sort Through,
Some Being Addressed in FERC Order 1000
At a time when consumers are demanding lower rates,
improved reliability, and cleaner energy sources, how do we
overcome the NIMBY challenges inherent in siting new
transmission?
Is a decentralized, “free market” approach to transmission
planning keeping up with society’s increasing demand for
electricity?
With siting authority split between federal and state agencies,
who is ultimately responsible for ensuring that the
“public good” is appropriately considered?
Is it realistic to expect participant-funded projects to step
forward, given the public opposition and protracted siting and
permitting challenges that have become the norm for many
large transmission projects, despite the economic consumer
benefits these projects provide?
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We Believe The Northern Pass Continues to
Be Critical to Our Region’s Energy Stability
NU remains committed to delivering the
economic, environmental, and energy supply
benefits The Northern Pass will provide to
New Hampshire and New England consumers
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