1. The Role of Hydro-Québec in New England Electric Markets The New England Electricity Restructuring Roundtable June 14, Stephen Molodetz, Vice President of Business Development, HQUS

2. Hydro-Québec: A Snapshot
40,000 MW of hydropower generation
175 TWh of energy storage
20,000 miles of transmission
6,000 MW of export capacity

3. Significant New Development and Investment.
Significant New Development and Investment
Hydroelectric Projects: 4,000 MW ( )
Northeast US Transmission Proposals: 2,200 MW

4. Large Hydropower: Multiple Benefits
Reliability
Secure, non-gas fuel source
Controllable
On and off peak deliveries
Price
Cost competitive
Unaffected by fuel markets
Reduced volatility
Cost-effective renewable
Environmental
Renewable
Low-carbon
Flexibility to balance intermittent renewables
Reduced fossil dispatch

5. Outlook for New England Market: Value of Hydro-Québec Power Increasing
Aggressive RPS targets
Supports renewable commitment
Balance greater quantities of wind
Source: ISO-NE RSP 2012
Gas reliance creates reliability/price risk
Urgent need for non-gas resources
Source: Connecticut IRP 2012
… near term need to replace “at risk” generation is also aligned with HQ development projects

6. Contributing to New England’s Need for New Capacity: Northern Pass Transmission Project
1200 MW HVDC link between Quebec and Deerfield, NH
HQ funded project
Would offer a large amount of capacity, in a single project
Ensures that replacement resources will not be all natural gas

7. Issues to Consider
New England is facing a significant transformation of the power system
Should the region proactively seek solutions to mitigate current risks and advance public policy goals?
If so, what role should the states play?
What is the evaluation of consumer cost ?
What is the appropriate forum for a discussion of regional projects such as NPT ?
If the status quo continues, will existing risks be exacerbated?
HQ hydropower offers multiple attributes to the New England power system
Non-gas, flexibility and controllability are all attributes that the power system needs -- and should be pursued in the development of new capacity
In addition, the states seek renewability and low-carbon attributes for the power system
Dilemma: There is currently no market mechanism to ensure that these attributes are delivered or to increase imports of these attributes
HQUS believes that the region has a unique opportunity to consider appropriate mechanisms that can ensure the continued development of NPT as a promising project that can provide additional capacity with all of these attributes
Solicitations for 4000 MW of wind (Hydro Quebec Distribution)
Shut down of nuclear generating facility (Gentilly-2)