The Role of Hydro-Qubec in New England Electric Markets

The New England Electricity Restructuring RoundtableJune 14, 2013

Stephen Molodetz, Vice President of Business Development, HQUS

40,000 MW of hydropower generation 175 TWh of energy storage 20,000 miles of transmission 6,000 MW of export capacityHydro-Qubec: A Snapshot

ck2687 - Access to 40,000 MW of hydropower generation? Just to take into account the 35,000 belonging to HQ and the MW on contract?

Also, we can go with over 21,000 miles of transmission (if you want)

Significant New Development and Investment Hydroelectric Projects: 4,000 MW (2005-2020)Northeast US Transmission Proposals: 2,200 MW

Large Hydropower: Multiple BenefitsReliabilitySecure, non-gas fuel sourceControllable On and off peak deliveries

PriceCost competitive Unaffected by fuel marketsReduced volatilityCost-effective renewable EnvironmentalRenewableLow-carbonFlexibility to balance intermittent renewables Reduced fossil dispatch

Outlook for New England Market: Value of Hydro-Qubec Power Increasing Source: Connecticut IRP 2012Aggressive RPS targetsSupports renewable commitmentBalance greater quantities of windGas reliance creates reliability/price riskUrgent need for non-gas resources near term need to replace at risk generation is also aligned with HQ development projects Source: ISO-NE RSP 2012

*Contributing to New Englands Need for New Capacity: Northern Pass Transmission Project1200 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

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?

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****Solicitations for 4000 MW of wind (Hydro Quebec Distribution)Shut down of nuclear generating facility (Gentilly-2)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