New England Electricity Market Overview IPPNY Spring Conference New England Power Generators Association May 8, 2018
New England wholesale electricity prices have declined by 49% between 2007 and 2017 90 80 $66.72 70 Price per MW/h 60 50 40 30 $33.94 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: https://www.iso-ne.com/static-assets/documents/2018/03/20180306_pr_2017prices.pdf 2
New England transmission rates have increased more than 400% since 2007 120 $111.96 100 Price per kW/year 80 60 40 $27.91 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: https://www.iso-ne.com/static-assets/documents/2015/12/section2-rate-summary.xls 3
Breakdown of a Connecticut Electricity Bill Monthly Bill for Residential Eversource CT Customer Using 600 kWh/mo Total Cost $140 Total Cost $119 $112 113% $120 Monthly Electricity Cost $7 $4 $100 $44 -35% $80 $68 $60 $40 67% $67 $40 $20 $0 Jan-08 Jan-17 Renewable Energy, RGGI, & Efficiency Program Charges Wholesale Power Market Transmission & Distribution Charges Customer Bills Up 6% in 9 Years with Energy Costs Down 35% Wholesale Power Market costs went from making up 61% of an average residential customer’s bill down to 37%.
New generation representing nearly 15% of peak demand is scheduled to come online by mid-2020 ISO New England New Generation 1,600 1,400 1459 1373 1,200 Capacity, MW 1,000 800 600 674 400 353 200 264 0 2016/17 2017/18 2018/19 2019/20 2020/21 Planning Year (June - May) Over 4,000 MW of new generation is being developed without consumer subsidies or state-backed contracts 5
Administrative changes to demand curve introduces market uncertainty Demand Curve Comparison Illustrative Capacity Market $/kW-mth Revenue Impact $20 $18 Capacity Capacity Price Revenue 2014 $16 $/kW-mth Mil.$ Original Demand Curve $14 2014 Original Demand $14.00 $101 Curve $12 2016 Marginal Reliability 2016 $10 $12.50 $90 2018 Impact Marginal Reliability Proposed Impact $8 MRI +Net CONE+ 2017 Marginal Reliability New BTM Solar Modeling $8.55 $62 Impact + Net CONE $6 $4 2017 MRI + Net CONE + Marginal Reliability Impact + 2018 New BTM Solar $6.40 $46 New Net CONE $2 Modeling 2018 vs. 2014 ($55) $0 % Chg. -54% 30,000 32,000 34,000 36,000 38,000 Note: Assumes 600 MW electric generation Total Capacity Offered unit and the market clears at 34,000 MW in MW 6
Fuel security concerns from ISO-NE are driving major market actions • ISO-NE released fuel security analysis stated that load shedding would occur in 19 of 23 fuel mix scenarios in Winter 2023/2024 • Mystic Generating Station – 2,000 MW outside of Boston – Exelon announced retirement by May 31, 2022 as well as purchase of adjacent LNG terminal (Distrigas) • ISO-NE counters by stating intent to hold Mystic 8 & 9 (1,400 MW) due to “fuel security risk” Fueled by LNG and largest Distrigas customer • ISO-NE has filed a Tariff waiver with FERC seeking ability to hold for reliability Exelon will now file two-year cost of service contract bringing Mystic 8 & 9 to mid-2024 7
New England state electricity procurements cut to the core of the competitive market • Massachusetts is reviewing a 20-year contract with Hydro Quebec for 9.45 TWh over the New England Clean Energy Connect transmission line in Maine RFP also out for offshore wind with requirement to get to 1,600 MW in the next several years • Connecticut issued an RFP for 12.45 TWh from Class I RPS, large- scale hydro and nuclear • These RFPs, coupled with existing RPS requirements, mean: Nearly 60% of electricity demand in New England could be carved out of competitive wholesale markets 8
New England transportation & power plant CO2 emissions from 1990 to 2015 80.0 70.0 Transportation: 60.0 6% Increase since 1990 50.0 40.0 Power Plants: 30.0 40% Decrease since 1990 20.0 Transportation Power Plants Source : http://www.eia.gov/environment/emissions/state/, released October 24, 2017 9
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