Pat Wood, III, Chairman Federal Energy Regulatory Commission Energy Infrastructure Washington D.C. April 5, 2005

Pat Wood, III: Federal Energy Regulatory Commission 1 The total U.S. energy consumption in 2004 was nearly 100 quadrillion Btus Nuclear 8% Oil 40% Coal 22% Renewable and Other 7% Natural Gas 23% Source: Based on data from EIA Annual Energy Outlook 2005 Oil and Petroleum Products Dry Natural Gas Coal Nuclear Renewable and Other

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 2 Projected domestic energy production shows 3% growth from 2004 to 2005, then leveling off until after Oil and Petroleum Products Dry Natural Gas Coal Nuclear Renewable and Other Source: Based on data from EIA Annual Energy Outlook 2005

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 3 Oil and Petroleum Products Natural Gas Coal Energy imports are projected to increase Source: Based on data from EIA Annual Energy Outlook 2005

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 4 A total of 131 new hydropower licenses and relicenses have been issued since June 2001 have been issued since June 2001 Relicensed Projects Newly Licensed Projects

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 5 Major Pipeline Projects Certificated (MMcf/d) June 2001 to March BCF/D Total 3,612 Miles

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 6 Copiah (3.3) SG Resources (12.0) Seneca (0.8) Dominion (5.6) Gulf South (18.5) Natural (10.7) Wyckoff (6.0) KM (6.5) Saltville (5.8) Pine Prarie (24.0) Natural (10.0) Petal (8.0) Storage Projects (Capacity in Bcf) June 2001 to March 2005 Certificated Since 6/1/2001

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 7 Constructed A. Everett, MA: Bcfd (Tractebel - DOMAC) B. Cove Point, MD: 1.0 Bcfd (Dominion - Cove Point LNG) C. Elba Island, GA: 0.68 Bcfd (El Paso - Southern LNG) D. Lake Charles, LA : 1.0 Bcfd (Southern Union – Trunkline LNG) E. Gulf of Mexico: 0.5 Bcf/d (Gulf Gateway Energy Bridge – Excelerate Energy) Approved by FERC 1. Lake Charles, LA: 1.1 Bcfd (Southern Union – Trunkline LNG) 2. Hackberry, LA: 1.5 Bcfd, (Sempra Energy) 3. Bahamas: 0.84 Bcfd, (AES Ocean Express)* 4. Bahamas: 0.83 Bcfd, (Calypso Tractebel)* 5. Freeport, TX: 1.5 Bcfd, (Cheniere/Freeport LNG Dev.) 6. Sabine, LA: 2.6 Bcfd (Cheniere LNG) 7. Elba Island, GA: 0.54 Bcfd (El Paso - Southern LNG) Approved by MARAD/Coast Guard 8. Port Pelican: 1.6 Bcfd (Chevron Texaco) 9. Louisiana Offshore: 1.0 Bcfd (Gulf Landing – Shell) Mexican and Canadian Approved 10. St. John, NB: 1.0 Bcfd (Canaport – Irving Oil) 11. Point Tupper, NS: 1.0 Bcfd (Bear Head LNG – Anadarko) 12. Altamira, Tamulipas: 0.7 Bcfd (Shell/Total/Mitsui) 13. Baja California, MX: 1.0 Bcfd (Sempra & Shell) Existing and Approved North American LNG Terminals As of March 25, 2005 A 3 4 E B US Jurisdiction FERC US Coast Guard * US pipeline approved; LNG terminal pending in Bahamas 7 C 2 D,

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 8 Existing Bulk Electric Transmission Grid Derived from Platts POWERmap

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 9 New generation units added from June 1, 2001 to March 2, 2005 totals 185,908 MW Source: Derived from Platts POWERmap

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission Transmission Projects completed February 2003 – March 2005 (GTE 230kV & GTE 40 miles) Source: Derived from NERC ES&D database and Platts PowerMap 500 kV 345 kV 230 kV Transmission Projects

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 11 Electric Transmission Needed to meet 2025 demand Possible Transmission Projects

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 12  Need/Cost Recovery  It is difficult to determine need and cost allocation for new transmission lines  Lack of investment capital  Difficulty in securing long-term transmission rights  Regulatory uncertainty regarding regional transmission organizations in relations to infrastructure needs  Siting  Stakeholder concerns adversely affect the ability to successfully site and construct needed transmission lines, in a timely manner.  The lack of an effective forum/policy for coordinating or resolving multi-state disagreements on siting. Impediments to new transmission include determining need, cost recovery and siting.

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 13 Licensed and exempted hydropower projects provide 59 GW of electric generation capacity provide 59 GW of electric generation capacity

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 14 With a modest 2% growth in electricity demand, projected available generation capacity will be able to meet demand through Projected Available Capacity Demand Net additions included retirements and plants currently under construction and in advanced development. Source: Based on data from EEA January 2005, PLATTS PowerDat and NewGen.

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 15  Timely and efficient licensing process as provided by the ILP  Congressional incentives  Renewable portfolio standards  Rational siting process  Encourage new technologies Removing impediments to hydro development

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 16 Existing major natural gas pipelines in U.S and Canada Source: Based on Platts PowerMap

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 17 Existing natural gas storage and LNG facilities Source: Based on Platts PowerMap

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 18 Impediments to new LNG terminals and natural gas pipeline and storage facilities  Safety/Security concerns  Take away capacity  Local acceptance  Redundant federal and state approval

April 5, 2005 Pat Wood, III: Federal Energy Regulatory Commission 19 Conclusions  Challenges lie ahead  Coordination of integrated national energy infrastructure planning  Authority to ensure that projects in the national interest are constructed in a timely manner  Jurisdiction over bulk electric transmission used in interstate commerce.  Rational Siting Process