Despite Order No Planning Gaps for (Certain) Merchants OPSI Annual Meeting 2013

2 National Grid brings extensive experience in building, owning, and operating large transmission projects in the United States and overseas National Grid owns and operates more than 8,600 miles of transmission in the United States National Grid joins Clean Line’s existing investors that include private equity firm ZBI Ventures National Grid is a key investor in Clean Line Energy Partners

3 Clean Line projects Clean Line’s projects connect the best wind resources to demand centers

4 Rock Island will connect western Iowa with PJM 765 kV system Regulatory Interconnection Converter Stations Outreach Converter station land options acquired in Illinois and Iowa Development agreement with Siemens for HVDC converter stations STATUS Agreements & Partnerships PJM Merchant Queue positions under study since Collins Received FERC negotiated rate approval Filed with the Illinois Commerce Commission in Oct 2012 Iowa Utilities Board Informational Meetings (precursor to filing) Q3-Q Invited 40,000+ residents to 33 open house meetings MOU with Kiewit for EPC development support Siemens as HVDC technology provider Preferred supplier agreement with Southwire (IL)

5 Grain Belt Express has reached key milestones KEY MILESTONES Regulatory Interconnection Outreach Kansas Corporation Commission granted public utility status in Dec 2011 Indiana Utility Regulatory Commission granted public utility status in May 2013 PJM: System Impact Study underway for 3,500 MW near Sullivan 765 kV MISO: Studying 500 MW interconnection near Maywood 345kV [old Palmyra Tap] SPP: Completed Criteria 3.5 Studies(No Harm) Obtained routing feedback from 2,300 Kansans at public open house meetings Granted Franchise Approvals from 16 Missouri counties in study area Obtained routing feedback from 1,250 people at public open houses in Missouri STATUS Routing Proposed Route filed in Kansas in July 2013 – Order expected Nov Developing potential routes in MO and IL and will file for approval and utility status in 2014

6 Grain Belt Express will deliver wind energy from Kansas to PJM 765 kV and MISO 345 kV systems $2 billion transmission project that will enable $7 billion of new wind energy investments 1.4 million homes powered per year 750-mile overhead, direct current (DC) transmission line MISO PJM SPP

Order No. 1000

8 What does Order No say about merchants? Order No requires a transmission developer proposing a merchant transmission project to “provide adequate information and data to allow public utility transmission providers in the transmission planning region to assess the potential reliability and operational impacts of the merchant transmission developer’s proposed transmission facilities on other systems in the region.” Order No. 1000, FERC Stats. & Regs. ¶ 31,323 at P 164.

9 The Order also says… As the Commission noted in Order No. 1000, “nothing in this Final Rule prevents a merchant transmission developer from voluntarily participating in the regional transmission planning process (beyond providing the information and data required above) even if it is not seeking regional cost allocation for its proposed transmission project…we encourage them to do so.” Order No. 1000, FERC Stats. & Regs. ¶ 31,323 at P 165.

10 Compliance Findings… Unfortunately, the Commission rejected Clean Line’s requests that jurisdictional transmission providers be directed to allow transmission developers to submit merchant transmission projects for full evaluation in the regional transmission planning process – even if not seeking cost allocation.

11 To What Effect? PJM, MISO, and SPP all filed compliance plans which failed to include a portal in the regional transmission planning process for merchant developer projects to be submitted for consideration in the regional planning process “not for purposes of cost allocation.”

12 Participant-funded Merchant Projects are Still Outside Looking In…

13 And then, we have another whole area to discuss… Merchant transmission development, benefits, multi- driver approach and partial cost allocation of network upgrades…and, maybe merchant projects themselves. Any Good Ideas