1. Market Response to Winter 2013-2014 Dupont Group Energy Summit New England Power Generators Association Carol J. Holahan, Esq. October 5, 2015

2. Who is NEPGA The trade association representing competitive electric generators in New England Our member plants represent 25,000 MW – or 80% – of all New England generating capacity Our core mission is to promote sound energy policies which will further economic development, jobs & balanced environmental policy 2 NEPGA is a regional trade association representing a diverse portfolio of plants, including natural gas, oil, coal, hydro, nuclear, and other renewable resources.

4. PAY FOR PERFORMANCE: KEY ELEMENTS New capacity market design that first took effect in FCA 9, corresponding to the June 1, 2018 – June 1, 2019 capacity delivery period. Intended to incent resources to make the capital and O&M investments necessary to improve resource performance. Resources that clear the base Forward Capacity Auction will be penalized if they fail to deliver during times of system stress, with no excuse for non-performance. A resource-neutral structure that allows all resources to compete.

6. MARKET RESPONSE-- INVESTMENT INFLUX OF INVESTMENT CAPITAL INTO THE REGION AS A RESULT OF THE OPEN, COMPETITIVE MARKET STRUCTURES IN PLACE CURRENTLY MORE THAN 90 MARKET-BASED PROJECTS TOTALING APPROXIMATELY 1,300 MW PENDING WITH ISO-NE APPROXIMATELY 8,500 MW OF NEW RESOURCES WERE QUALIFIED FOR THE MOST RECENT FORWARD CAPACITY AUCTION

7. Generation Investments Capacity Auction Responses – 1,700 MW of new plants have cleared in recent capacity auctions beginning delivery in 2017 – 16,000 MW of new plants have expressed an interest in next auction Interconnection Queue – Over 13,000 MW currently in ISO-NE interconnection queue, only 6,000 MW in 2014 We’ve Done This Before – In the years following restructuring over 13,000 MW of new merchant generation was built in New England

8. SOME EXAMPLES OF NEW GENERATION EXELON—MEDWAY, MA—195 MW FOOTPRINT—SALEM, MA—700 MW CPV—OXFORD, CT—700 MW LS POWER—WALLINGFORD, CT—150 MW EMERA—TIVERTON, RI—22 MW NRG–CANAL, SANDWICH, MA—330 MW DEEPWATER WIND--BLOCK ISLAND, RI--30 MW INVENERGY—BURRILLSVILLE, RI—900 MW

9. The Markets Today Tight Supply – Power plants being retired, new plants being built and concerns of natural gas supply infrastructure Winter Volatility – Following price spikes in 2013/2014, major influx of LNG and improved generator performance drove 2014/2015 winter price reductions Changing Market Design – FCM Pay-for-Performance and major energy market pricing changes

12. The Markets Today Limited Demand Growth — Increase energy efficiency and demand response programs limiting load growth Environmental--Carbon Mandates – State environmental regimes raising questions on future supply mix and increase in renewable energy requirements Siting—Regulatory Uncertainty – Protracted and expensive process for siting of any new generation facility Technology and Innovation Driving Market – Developments with storage and other technologies will affect market

13. Questions? www.NEPGA.org Follow us on Twitter – @_NEPGA@_NEPGA 13