NECPUC Gas panel Susan Fleck National Grid June 17, 2014

2 Our US Network

3 Our Natural Gas Customers  Customers:  We serve 3.5 million natural gas customers across three States (MA, NY & RI), in both urban and suburban areas  We have added approximately 120,000 customers since 2008 and forecast to add an additional 260,000 customers in the next ten years  Infrastructure:  Over the last five years, we invested a total of $1.2 billion dollars replacing mains and services that are made up of older, leak prone materials  Our spend in this area will increase by 45% to $2.2 billion dollars over the next five years

4 The Landscape Nationally:  Increasing public climate change interest and passion  Desire for increasing energy efficiency  Abundance of domestic natural gas supplies  Increasing public safety concerns And in the Northeast:  National Grid is the largest natural gas infrastructure company  We have one of the oldest networks in the nation  We have an opportunity to convert customers from oil to gas

5 National Grid - US 34,821 Miles PHMSA Average LDC 867 Miles Main Inventory US Comparative Summary

6 Massachusetts 11,021 Miles Rhode Island 3,179 Miles Main Inventory

7 MA Unprotected Steel Main Inventory

8 MA Cast Iron Main Inventory

9 RI Unprotected Steel Main Inventory

10 RI Cast Iron Main Inventory

11 Historical & Future Capital Spend Millions

12 Challenges  Expansive infrastructure replacement programs like National Grid’s come with many challenges.  Differing and often times conflicting political pressures faced by utility commissioners in rate and safety areas  City and town rules and regulations  Availability of construction materials  Availability of qualified and trained workers  Community/public opinion and disruptions  Customer ability to foot the bill

13 Next Steps  Working with our suppliers and contractor communities:  Develop new sources.  Working with our cities and towns:  Develop shared understanding and goals.  Working within our states:  Develop shared understanding of state and National Grid strategic priorities, how they connect and diverge.  Develop infrastructure investment strategies and share best practices.  Working with other leading utilities and industry associations to:  Develop / identify / share methodologies and technologies to repair and replace infrastructure.  Develop and deploy new ways to detect and reduce emissions.