1. Mike Hachey Director, Power Marketing TransCanada Power Marketing Ltd
Mike Hachey Director, Power Marketing TransCanada Power Marketing Ltd. Interrelationship Between Gas and Electricity Markets in New England – A Generator’s Perspective Restructuring Roundtable May 21, 2004

2. Power Generation Assets
ManChief
Kapuskasing
Castleton
North Bay
Bécancour
Sundance A & B
Nipigon
Calstock
Carseland
Curtis Palmer
Bruce Power
Tunis
Ocean State
Grandview
Williams Lake
Bear Creek
Redwater
MacKay River
Cancarb
Since 1996, our interests in power facilities have grown from two plants with less than 300 megawatts to 20 plants with nearly 4,700 megawatts of capacity.
This amount of power can meet the needs of approximately 4.7 million average households.
We are the largest partner in TransCanada Power, L.P., a publicly held limited partnership traded on the Toronto Stock Exchange, that owns power plants in both countries.
Our plants use a diverse range of fuels including natural gas, hydro, waste heat and wood waste.
Our leading-edge expertise in the fuel-efficient and environmentally responsible process of cogeneration has made us a partner of choice for large industrial customers to develop on-site power generation.
TransCanada also markets, develops and operates electrical generation across Canada and the northern United States.
TransCanada Power, L.P. 7 plants; 328 MW
TransCanada 20 plants; 4,700 MW (including LP and plants in development)
TransCanada
December 6, 2018

3. Natural Gas Transmission Assets
Alberta System
Trans Québec & Maritimes
Canadian Mainline
Foothills
BC System
Portland
TransCanada’s natural gas pipeline network is one of the largest and most sophisticated in the world.
We transport the majority of western Canada’s natural gas production, offering our customers quick, flexible and reliable access to key markets in eastern Canada, the Pacific Northwest, Midwest and Northeast United States.
We connect almost 1,000 receipt points and ship for well over 300 customers.
We also have interests in a number of pipelines in the United States both directly and as general partner of TC PipeLines, LP.
We are well-positioned to play a role in moving new gas supplies – including Alaska and Mackenzie Delta natural gas, and offshore liquified natural gas -- to key growth markets.
We’re focused on optimizing our pipeline network by connecting new supply, providing better access to markets and introducing competitive and innovative approaches to meeting customers’ needs.
Great Lakes
Northern Border
Iroquois
Tuscarora
24,000 miles of wholly owned pipeline; 12 Bcf/day
TransCanada
December 6, 2018

4. Issues List Fuel Switching and Regional Energy Policy
Available Information
Pipeline Nomination Schedule vs. NEPOOL Market Schedule
(Straw proposal #1)
Intraday Market
(Straw proposal #2)
Fuel Switching and Regional Energy Policy
TransCanada
December 6, 2018

5. Available Information
Numerous Gas Fired Generators Not Scheduled in DAM
ISO Morning Reports of 1/14-1/16 Showed Surplus, No OP4
OP4 on 1/14 Posted 5PM, 2 HR Duration, 108 MW Relief
Gas Market Signals Strong: Tenn Z6 Mid $19/50/20 /MMBTU
Now we know:
DAM understated due to bid load, virtual generation
Severe electric scheduling uncertainty at ISO
TransCanada
December 6, 2018

6. Pipe Nominations vs. NEPOOL Mkt Schedule
Today, gas pipeline nominations due 1230, electric DAM schedule issued 1600, physical dispatch schedule issued
2200
Straw Proposal #1
Extreme days only
Provide firm electric schedule before pipeline nominations are due
TransCanada
December 6, 2018

7. Intraday Market
On extremely cold days, intraday gas difficult to impossible to find
Straw Proposal #2
On extreme days, ISO to assume gas-fired units not scheduled by 1200 unavailable unless told otherwise
Levitan, Jan ‘02: “ISO-NE should not rely upon gas-fired merchant power plants to provide operating reserves [during OFOs]”
TransCanada
December 6, 2018

8. Fuel Switching and Regional Energy Policy
Substantial amount of gas-fired capacity in NEPOOL cannot switch to light oil unless no gas available
Expensive to maintain oil burn capability for “once in a blue moon”
Limited oil burn during extreme cold relieves price pressure on gas and electric markets, improves reliability
’90s vintage plants burning low S #2 cleaner than ’60s and ’70s vintage plants burning #6 oil
TransCanada
December 6, 2018

9. Thank you!
TransCanada
December 6, 2018