494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC The Electric Grid: OSW Integration and Storm-Hardening in New Jersey Kenneth J. Sheehan Director, Energy and Utility Law Practice

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Existing NJ Grid 2

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Proposed Renewable Generation 3

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Proposed Renewable Generation 4

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Proposed Renewable Generation 5

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC NJ Electric Imports 6

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC 2011 Energy Master Plan New Jersey’s Energy Master Plan Statute, N.J.S.A. 52:27F-14 Released by the Christie Administration, serves as the “roadmap” for State development. – Reduce the cost of energy – Increase the value of renewable and energy efficiency programs 7

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC 2011 Energy Master Plan “Promote a diverse portfolio of new, clean, in- State generation” Released by the Christie Administration, serves as the “roadmap” for State development. – Reduce the cost of energy – Increase the value of renewable and energy efficiency programs 8

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Connected to the distribution system Following issues with the interconnection of solar facilities within certain NJ territories, the legislature modified the statutory language to allow “directly connected to the electric grid at 69 kilovolts or less, regardless of how an electric public utility classifies that portion of its electric grid” as a solution. P.L. 2012, c. 23 9

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Offshore Wind The “Offshore Wind Economic Development Act” (OWEDA) - P.L. 2010, c. 57 Develops an offshore wind renewable energy certificate (OREC) Provided for “qualified offshore wind project” = Atlantic Ocean and connected into New Jersey Economic development is key component 10

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Offshore Wind Wind carve-out to support at least 1,100 megawatts of generation Carved-out of Class I renewable requirement Percentage set shall not be reduced by the Board for a period of at least 20 years 11

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Offshore Wind OREC set by application process, designed to ensure a known economic flow for an offshore wind project No OREC paid unless energy is produced Once an OREC price is set, it may not be changed without agreement by the developer = NUG contract 12

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Offshore Wind Radial v. HVDC lines New Jersey Energy Link Capacity pick-up from the loss of nuclear generation at Oyster Creek in

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Hurricane Sandy October 29, 2012 – landfall made in NJ 14

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Hurricane Sandy 7 million people left without power 346,000 homes damaged or destroyed 8,000 jobs estimated lost 1,400 sunken vessels 15

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Hurricane Sandy Expect actions from the Board, the Legislature, and the individual utilities Key issues: underground facilities; substation flooding; vegetation management; capital expenditure and upkeep 16

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Hurricane Sandy Example – PSE&G’s Energy Strong $1.7 billion to raise, relocate or protect 31 electric switching and substations affected by recent storms as well as those in newly designated flood zones. $454 million for smart grid technologies that will add intelligence to the system and increase the utility’s ability to detect problems and make fixes 17

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Hurricane Sandy $200 million to create additional redundancy in the system, reducing both and amount and the time of outages $60 million to bury 20 miles of overhead electric distribution lines in areas that could see the biggest benefit 18

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC The Future Susquehanna-Roseland North Central Reliability Project Repower BL England NJ Energy Link 19

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Information New Jersey Board of Public Utilities NJ EMP - Master_Plan.pdf Master_Plan.pdf PSE&G Energy Strong - /press_kit/index.jsp /press_kit/index.jsp 20

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Bio Kenneth J. Sheehan, Counsel in the Firm’s Newark, New Jersey office, is the Director of the Energy and Utility Law Practice Group. Prior to joining Genova Burns Giantomasi Webster, Mr. Sheehan served as the Chief Counsel of the New Jersey Board of Public Utilities, where he provided advice to the members of the Board, other cabinet-level officials, and the Executive Branch. In addition, Mr. Sheehan has served as both a Deputy Attorney general and the Section Chief of the Public Utilities Section in the Division of Law. Mr. Sheehan concentrates his practice in those fields associated with public utilities on a State and federal level, including: electric and gas, water, waste-water, traditional and clean energy, telecommunications, and cable television. / Phone: 21

494 Broad Street. Newark. New Jersey Genova Burns Giantomasi Webster LLC Firm Info PRACTICE AREAS Appellate Practice Aviation & Aircraft Law Business Law & Commercial Transactions Casino & Resort Development Commercial Real Estate, Redevelopment & Environmental Law Complex Commercial Litigation Construction Law & Litigation Corporate Political Activity Law Education Law Employment Law & Litigation Energy and Utility Law Health & Hospital Law Intellectual Property Law Labor Law Non-Profit and Tax Exempt Organizations Public Contract Law & Bid Protest Litigation Trusts & Estates Wage & Hour Compliance White Collar Criminal Defense, Corporate Internal Investigations & Corporate Ethics OFFICES Newark, NJ New York, NY Red Bank, NJ Camden, NJ Philadelphia, PA Jersey City, NJ 22