11

Interchangeability Sensitive Receptor

Inventory

Algonquin Gas Transmission New England Customer Meeting

Robert D. WilsonDirector, Environmental Operations

KeySpan

22

Survey ParticipantsSurvey Participants

KeySpanKeySpan PSE&GPSE&G Connecticut NaturalConnecticut Natural Southern ConnecticutSouthern Connecticut NISOURCENISOURCE

NStarNStar ConEdConEd New England GasNew England Gas Middleboro Gas & ElecMiddleboro Gas & Elec Bay State / NUBay State / NU

33

Our Goal………….Our Goal…………. Work Work Collaboratively Collaboratively with with

Pipelines & Suppliers to Pipelines & Suppliers to understand potential impacts of understand potential impacts of new supplies on end use & new supplies on end use & address gas quality issues address gas quality issues appropriately in appropriately in Pipeline TariffsPipeline Tariffs

QualifyQualify and and QuantifyQuantify end use end use applications that may require applications that may require retrofits of “substance” & retrofits of “substance” & negotiate best economic “fix”negotiate best economic “fix”

Understand which end use Understand which end use applications may need applications may need “adjustments”“adjustments” prior to prior to introduction of new suppliesintroduction of new supplies

(Appliance field assessments?)(Appliance field assessments?)

3

Interchangeability Implementation Process

1

Understand Historical Supply

2

Identify “Sensitive Receptors”

- LDC’s catalog potential sensitive customer equipment

4

Assessment

- Assess sensitive equipment- Establish extent of retrofits- Negotiate fixes

5

SettlementAgreement

- Establish interchangeability Tariff parameters - Establish most economical retrofit strategy , schedule & cost sharing mechanism

- Work with Pipelines to establish system adjustment

gas

• Work with Pipelines and Suppliers• Establish reasonable supply compositions

Understand “Zone ofInfluence”

55

Specific Industry Groups Include:

- Commercial Food Commercial Food ProcessingProcessing

- Chemicals & Allied Chemicals & Allied ProductsProducts

- Rubber & Miscellaneous Rubber & Miscellaneous PlasticsPlastics

- Electronic & Other Electronic & Other EquipmentEquipment

- Stone, Clay & ConcreteStone, Clay & Concrete

- Primary Metals IndustriesPrimary Metals Industries

66

Other Applications Considered

Distributed GenerationDistributed Generation

- - Engines/CogenEngines/Cogen

- Fuel Cells- Fuel Cells

- Micro Turbines- Micro Turbines

Power GenerationPower Generation

- - Gas TurbinesGas Turbines

NGV’sNGV’s

LNG Liquefaction PlantsLNG Liquefaction Plants

77

KeySpan Identified KeySpan Identified 158158 PSRs in NE PSRs in NE

Potential Sensitive Receptors NE

35

4532

16

1911

Chem ical & Allied Products Electronic & Other Equipm ent, Com ponents etc.

Indus trial Food Process ing Prim ary Metal Indus tries

Rubber & Miscellaneous Plas tic Products Stone, Clay Glass & Concrete

88

KeySpan Identified KeySpan Identified 213213 PSRs in NY PSRs in NY

Potential Sensitive Receptors NY

44

35

55

26

35

18

Chem ical & Allied Products Electronic & Other Equipm ent, Com ponents etc.

Indus trial Food Process ing Prim ary Metal Indus tries

Rubber & Miscellaneous Plas tic Products Stone, Clay Glass & Concrete

99

KeySpan Identified KeySpan Identified 164164 DG Applications in DG Applications in NY/NENY/NE

Direct Generation Customers

137

225

Engines

Fuel Cell

Microturbine

1010

KeySpan Identified KeySpan Identified 370370 HD CNG Engines in NE HD CNG Engines in NE

Manufacturer ModelEstimated Life

(# of years)Number of Engines

State Pipeline Fleet Type Model Year Comments

John Deere 6068H (6.8 liter) 3 MA 1999 Tewksbury, MAJohn Deere 6081H (8.1 liter) 6 MA 2004 Tewksbury, MACummins B+ 5.9G 1 MA 2004 Everett, MAJohn Deere 6068H (6.8 liter) 2 MA 2001 Newton, MADetroit Diesel Series 50G "MK" 44 MA 2002 Boston, MACummins C+ 8.3G 190 MA 2003 Boston, MACummins C+ 8.3G 124 MA 2003 Jamaica Plain, MA

CNG HEAVY DUTY ENGINES

1111

Northeast LNG Liquefaction PlantsNortheast LNG Liquefaction Plants

New EnglandNew England

KeySpan KeySpan

Southern ConnecticutSouthern Connecticut

Connecticut Natural Connecticut Natural

Bay State / NUBay State / NU

New York / NJNew York / NJ

KeySpan – 2KeySpan – 2

Con EdCon Ed

WilliamsWilliams

1212

Technical ConsiderationsReal or Perceived ?

AppliancesAppliances Power Generation - DLE Gas TurbinesPower Generation - DLE Gas Turbines Vehicle & Stationary EnginesVehicle & Stationary Engines Feedstock ApplicationsFeedstock Applications Commercial / Industrial BurnersCommercial / Industrial Burners

1313

Merging Policy & ScienceMerging Policy & Science

White Paper Provides the technical framework for White Paper Provides the technical framework for policy makers policy makers

Selective or “piecemeal” interpretation of the Selective or “piecemeal” interpretation of the White Paper is unacceptable White Paper is unacceptable

FERC understands the White Paper is more than FERC understands the White Paper is more than just “Interim Numerical Guidelines”just “Interim Numerical Guidelines”

How do we How do we negotiate “fixes”negotiate “fixes” for issues of for issues of substance which will allow for substance which will allow for Tariff FlexibilityTariff Flexibility

1414

Next Steps……….

• Consolidate End Use Data

• Proposal To Have an independent third party “expert”, (GTI), assess the surveys to qualify and quantify real vs perceived impacts

• Study to be funded collaboratively via stake holders from all segments…….

• Results of the study will be made “public” in the best interest of the industry to resolve similar issues

1515

Remaining Challenges……..

• Responsibility of all stake holders in the value chain. Suppliers / Producers, Pipes, LDC’s and End Users need to work together and build on the technical foundation laid by the NGC+ technical teams.

• Realization that many existing tariffs will need to be updated to address interchangeability, hydrocarbon liquid dropout and overall gas quality issues. • Timing is a challenge….. LNG terminals need to know now what design options are necessary to accommodate future tariff requirements.

1616

Tariff Issues…..Tariff Issues…..We are Getting Closer !We are Getting Closer !

Need to complete PSR Assessment Need to complete PSR Assessment ASAPASAP

Need to come to agreement on “adjustment gas”Need to come to agreement on “adjustment gas” propertiesproperties

Need to resolve “language” necessary to address HDP Need to resolve “language” necessary to address HDP flexibility issues considering a 15F CHDPflexibility issues considering a 15F CHDP

Based on determination of required Based on determination of required retrofits of substanceretrofits of substance…. …. determine the most economical fix associated and / or determine the most economical fix associated and / or Tariff Specifications to address compatibility issues Tariff Specifications to address compatibility issues

Cost recovery mechanisms - “who pays & how”.Cost recovery mechanisms - “who pays & how”.