Bidders Conference December 2015 Clean Energy RFP Bidders Conference December 2015

How We Got Here Objective: Solicit offers of Clean Energy and Transmission to deliver Clean Energy pursuant to Clean Energy goals of Connecticut, Massachusetts and Rhode Island Collaborative process involving utilities and state agencies Coordinated by the New England States Committee on Electricity (NESCOE) February 2015 draft RFP issued for comment June 2015 filed proposed RFP with MA and RI Commissions, final approval received October 26 RFP issued November 12

Collaboration In Development CT DEEP, Eversource, Unitil, National Grid, United Illuminating Company (“UI”), the Connecticut Procurement Manager, the Connecticut Office of Consumer Counsel, the Connecticut Office of the Attorney General, the Massachusetts Department of Energy Resources (“DOER”), Massachusetts DPU, Rhode Island Division of Public Utilities and Carriers and Rhode Island office of Energy Resources New England States Committee on Electricity (“NESCOE”), Independent Consultants, specific consultants separately to the Utilities, to NESCOE, and to the states

RFP Team Composition Soliciting parties – Connecticut Department of Energy and Environmental Protection (“CT DEEP”), Unitil, National Grid, NSTAR and WMECO (Collectively, “Massachusetts EDCs”), and National Grid in Rhode Island Evaluation Team – CT DEEP, Massachusetts EDCs, National Grid for Rhode Island, Connecticut Light and Power (“CL&P”), United Illuminating Company (“UI”), the Connecticut Procurement Manager, the Connecticut Office of Consumer Counsel, the Connecticut Office of the Attorney General, the Massachusetts Department of Energy Resources (“DOER”), Independent Consultants Selection Team – Will vary by state requirements, but in each case Selection Team members and others who signed the Utility Standard of Conduct are prohibited from communicating non-public information regarding the RFP with those developing bids Massachusetts - the Massachusetts EDCs with DOER as an advisory participant Connecticut - CT DEEP acting in consultation with the Connecticut Procurement Manager, the Connecticut Office of Consumer Counsel, and the Connecticut Office of the Attorney General [The selection team may consult with the Evaluation Team] Rhode Island - National Grid working with the Division of Public Utilities and Carriers and office of Energy Resources as advisory participants

Incremental Qualified Clean Energy The goal is to increase the amount of Qualified Clean Energy delivered in or to New England Construction of a new generating unit An upgrade to an existing unit An increase in the capacity factor of an existing unit An increase in imports into New England Qualified Clean Energy Energy produced by a “Tier 1” facility under the Renewable Portfolio Standard (“RPS”) statutes of at least one of the procuring states Energy from a resource otherwise qualifying as a “Tier 1” facility, except that it is located in a non-contiguous control area Energy produced by Hydropower resources that meet the requirements of one of the states

Products Being Solicited Section 1.2.2.1 - Qualified Clean Energy and/or RECs via a PPA Example: a new wind farm proposing to sell Energy and RECs via a PPA Example: a qualifying hydro facility bidding to sell firm Energy via a PPA Section 1.2.2.2 – Qualified Clean Energy and/or RECs via a PPA with a Transmission Project Under a FERC Tariff Example: a new wind farm proposing to sell Energy and RECs via a PPA with a Transmission Project needed to get the Energy to market Example: a qualifying hydro facility bidding to sell firm Energy via a PPA with a Transmission Project needed to get the Energy to market Section 1.2.2.3 – Qualified Clean Energy via a Transmission Project Under a Performance-Based Tariff Containing a Qualified Clean Energy Delivery Commitment; No PPA, [Delivery Commitment Model (DCM)] Example: Transmission Project that will be willing to commit to delivery of Clean Energy into the ISO-NE energy market without signing a PPA with any of the soliciting parties under this RFP

Transmission Projects Significant new AC or DC lines or facilities Significant upgrades to existing lines or facilities, including network upgrades required by ISO-NE to accommodate such new or upgraded facilities. Network Upgrades excludes local generator interconnection facilities. Delivery Commitment Model (DCM), No PPA A FERC-accepted rate schedule and/or, A tariff and service agreement for a Transmission Project A specified amount of Qualified Clean Energy must be delivered Payments must be reduced for failure to meet the qualified Clean Energy delivery commitment

Potential Procurement Levels By State Connecticut 2,750 GWh per year of Qualified Clean Energy under Section 1(c) of Public Act 15-107 1,375 GWh per year of Qualified Clean Energy under Section 7 of Public Act 13-303; and 125 GWh of Class I Qualified Clean Energy Under Section 6 of Public Act 13-303 Massachusetts 817 GWh per year of Class I Qualified Clean Energy under Section 83(a) of the Green Communities Act, as amended Additional Qualified Clean Energy of an undefined amount, so long as bids for such are in the form of the DCM, for contributing to achievement of the goals of the Massachusetts 2008 Global Warming Solutions Act (GWSA) Rhode Island Qualified Clean Energy of an undefined amount, sought by Narragansett only in the form of the DCM, for contributing to the goals of Chapter 31 of Title 39 of the General Laws of Rhode Island, the Affordable Clean Energy Security Act (“Chapter 39-31”) Amounts to be delivered under the DCM (which may qualify under one or more of the above statutes) are not capped  and are subject to bids received

Communication and Bid Submission All communications with the Evaluation Team must be submitted electronically to CleanEnergyRFP@gmail.com Section 1.3.3 – Bidders must submit a public version and a confidential version of their bids Sensitive material must be redacted from the public version by the bidder The required public version will be posted to the Clean Energy website cleanenergyRFP.com Evaluation team can accept no responsibility for sensitive material appearing in the public version – this is strictly the responsibility of the bidder Copies of each version must be submitted by January 28, 2016 at Noon EPT to each of the entities identified in accordance with the instructions in the RFP Appendix I. Bidders must submit the required non-refundable bid fee with each bid at the time of bid submission in accordance with the instructions in the RFP Appendix I.

Bid Fee Example Bidders must submit the required non-refundable bid fee with each bid at the time of bid submission in accordance with the instructions in the RFP Appendix I The fee for one pricing offer is calculated as follows: Minimum bid fee $7,500 for a 20 MW Project Bid fee increases by $375 for each additional MW of Project size Maximum bid fee is $100,000 For each additional pricing offer only, for the same Project the additional bid fee is: $10,000 for a Project of less than 100 MW and $25,000 for all others If a Project wants to vary any other aspect of their bid a new bid fee is required. Bid Fee Calculation Example 1 50 MW $7,500 + (30 MW * $375) = $18,750 200 MW $7,500 + (180MW * $375) = $75,000 Example 2: 50 MW Project has a second pricing offer, 200 MW Project has a second delivery location An additional bid fee of $10,000 is required for a total bid fee of 28,750 for both offers An additional bid fee of $75,000 is required for a total bid fee of $150,000 for both offers

Bid Completion Section 2.2.14 – Bids must be complete in every aspect to fully describe their Project and enable a thorough review A redlined version of the applicable draft contract in a form that the bidder would be willing to sign must accompany each bid, alternatively the draft contract must be accepted as is For Connecticut bids including storage or balancing energy will require some contract changes but the risk profile must be maintained Both bid forms, Excel and Word form, must be filled out and every question answered in each of those bid forms

Bid Evaluation Each Project will be subject to stage 1 evaluation for minimum threshold criteria (more fully described in Section 2.2 of the RFP), including but not limited to: Eligible Bidder – owns the development rights to the Project Eligible Project – satisfies state statutes, DCM to be considered Site Control - generation Project must demonstrate unconditional site control by the time contracts are signed, Transmission Projects must have rights to a substantial portion of the property required Minimum contract size, term lengths etc. Any bid that does not meet stage 1 threshold requirements in section 2.2 of the RFP is subject to rejection Bids that meet the minimum criteria will move on to stage 2 evaluation

Stage 2 Quantitative Evaluation [Criteria to be finalized before bids are due] Projects that move to stage 2 evaluation will be subject to a quantitative and qualitative analysis More fully described in Section 2.3 A screening process to compare the economic competitiveness of the each bid If the consensus view of the Evaluation Team is that a bid is not economically competitive it will be removed from consideration Bids will then be evaluated for their direct and indirect economic benefits for customers (this portion of the evaluation is worth a maximum of 75 points) Indirect benefits will be measured using a nodal electric market simulation model comparing outputs with and without the bid Direct benefits will be measured comparing the bid prices of the offered products with the projected market price The metric to be used for rankings is a benefit to cost ratio based upon the combination of direct and indirect benefits Bids deemed uneconomic will be eliminated from further consideration

Each state will perform this portion of the evaluation independently Stage 2 – Qualitative Evaluation [Criteria to be finalized before bids are due] The qualitative portion of the evaluation is worth up to 25 points out of a total score of 100 points Each state will perform this portion of the evaluation independently May include different criteria Will weight some or all criteria differently Will depend on specific state mandates and other factors

Stage 2 - Qualitative Evaluation (continued) Each state will conform to its statutory obligation but criteria likely to include, (but not limited to): Project Viability Team financing experience, likelihood of subsidies, viability of Transmission plans Project Feasibility Bidder experience in developing similar Projects, status of permits, conformance to FERC and state regulatory requirements Development Status Progress in interconnection, ability to meet proposed schedule Price Firmness Extent to which the offered price is firm, contains cost containment provisions for cost of service transmission projects, or proposes purely cost of service pricing Selection Team is unlikely to select a project without significant cost containment features At the conclusion states will come together to see if a mutually acceptable portfolio of Projects to reduce costs and meet state Clean Energy goals can be created Note that it cannot be guaranteed that any projects will be selected, and that the RFP does not create any legal obligation running from the Evaluation or Selection Teams or their members to the bidders

Contracting Bidders will be notified whether they have been selected to negotiate a PPA or other agreement with one or more of the EDCs Selected Bidders will enter into separate contracts with one or more EDCs if the negotiations are successful Bidders are responsible for satisfying all state and FERC requirements, and making all necessary filings and submissions to obtain all approvals for their projects Each bidder will be responsible for posting 50 percent of their development period security with the EDCs at contract execution

Schedule Release RFP to bidders Bidder conference   11/12/15 Bidder conference 12/03/15 Deadline for submitting written questions 12/29/15 Official responses to Q&A posted on the website 01/14/16 Due date for submission of proposals 01/28/16 Selection of winning bidders for contract negotiation 04/26/16 to 07/26/16 Execute contracts 06/23/16 09/22/16 Submit contracts for regulatory approval 10/25/16 Regulatory approval expected 2016

Today’s Q&A Protocol All answers provided at this forum are for information only Official answers will be provided in writing to questions submitted to cleanenergyRFP@gmail.com The Moderator will guide the question and answer phase today When called on please announce your name and entity you represent Panelists will attempt to answer questions but may call on other members of the team to assist