1 October 22, 2009 NESCAUM Low Carbon Fuel Standards Stakeholder Meeting Transportation Fuels Panel Boston, Massachusetts Watson Collins Manager, Business Development Enterprise Planning & Development

2 What are the technical and economic prospects for electric transportation? Conventional Vehicle *Electric Vehicle** % Pump / Plug to Wheels Efficiency (approx.) % Oil, Biofuels, etc.. Energy Supply Resource ›Diverse supply portfolio today ›Primarily natural gas in New England ›Can be almost any renewable resource ›RGGI and RPS policies will continue to drive a cleaner generation fleet in New England 7 metric tons / yearCarbon Profile1.5 metric tons / year $4.80 for 40 milesEnergy Cost$1.60 for 40 miles 27.5 MPG CAFE StandardMPG Rating150 – 250 MPG * 25 MPG vehicle & 15,000 miles per year ** Chevy Volt driven electrically & 15,00 miles per year

3 What is the timeframe for electric vehicles? Expected Vehicle Introductions > Tesla Roadster (Today) > Chevy Volt (2010) > Nissan Leaf (2010) > GM PHEV SUV (2010/11) > Ford Transit Connect (2010/11) > Ford Project M (2011) > Toyota Prius PHEV (2010) > Chrysler platform (2011) > Mitsubishi iMiEV (2011/12) > Tesla Model S (2012) > Fisker Karma (2012) > Volvo (2012) > Audi e-tron (2012) > VW E-up (2013) Vehicle availability and consumer acceptance are key to recognizing environmental benefits

4 Key factors impacting consumer adoption of EVs Macro Drivers Charging Infrastructure Business Environment Consumer Adoption of EVs Gasoline prices Battery costs Societal priorities (Oil dependency, climate change, jobs, etc..) Government legislation, programs and regulations Industry consensus and innovation Business case financials (ROE, risk, capital requirements, etc..) Customer demographics Government financial & nonfinancial incentives Charging stations & processes Vehicle availability Economics of EVs EV features and benefits Will drive automaker rollout plans

5 Utility business questions with electric vehicles How should we pay for public charging infrastructure? ›Contribution from increased kWh sales is insufficient to fully offset annual carrying costs. ›Who should pay? Possible ingredients include; electric customers, surcharge on EV owners, specific electric customers (voluntary or mandated), or funded by transportation sector. How should we handle the cross sector cost shift (transportation to utility sector)? ›EVs result in a net reduction in carbon emissions but increase compliance costs in the utility sector (RPS and RGGI) ›Is this a concern? What mechanisms can be put in place to compensate electric customers? Who is best able to manage this issue? Additional utility infrastructure will be necessary with high penetration levels of EVs ›While the grid can generally handle EV adoption rates expected in the next 5 – 10 years, longer term investment will be necessary to support significant levels of EV adoption. ›Localized distribution impacts (service transformers and wires) may need to be upgraded to support clustering of EVs.

6 Policy Questions Clarity & Balance on Policy Objectives > Reduction of greenhouse gas emissions > Energy security > Support for local renewable development > Economic efficiency of outcomes and innovation Policy Options > Cap & trade > Carbon tax > Fuel tax > Low Carbon Fuel Standard > Fee-bates > Gas guzzler taxes > Fuel mandates > Efficiency mandates > Additional measures …. Who will own the credits generated by EVs? > Vehicle owner > Automakers > Electric generators > T&D utility companies > Charging infrastructure providers Calculation of EV Credits > Geography (Region wide vs ISO specific) > Methodology (Marginal, average, time specific) > Vehicles (vehicle specific, categories, blended average) Miles Traveled x MPG x Carbon Intensity => Carbon Emissions Focus of LCFS