New York’s Energy Opportunities 2010

Good News and Bad News

1. Historic low energy prices…today.2. Capital Region still pays more than it should3. Cap and Trade upside for NY.4. Energy renewables agenda.5. Energy infrastructure agenda.6. Consumers have the responsibility to

choose.

Why are prices low?

Demand destruction: The Great Recession (Bad news)

Speculators out of market (Good news)

Natural gas supplies are up. Unconventional, shale gas. (Good news)

Wholesale Power Prices at Historic Low in 2009 (NYISO)

Load Av.Electric Av.NatGas

GWh $/MWh $/MMBtu2000 428 $58.26 $5.522001 430 $51.22 $4.542002 435 $49.90 $3.852003 433 $62.58 $6.482004 438 $62.80 $6.802005 458 $93.83 $10.012006 444 $76.45 $7.362007 458 $80.29 $8.502008 452 $95.31 $10.132009 435 $48.63 $4.87

Wholesale Electricity Price Trend 2000-2009 (Average, NYS)

Average Wholesale Electric prices $/MWh (NYISO 2010)

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Price $/MWh

Wholesale Natural Gas Price Trends 2000-2009 (Average, NYS)

Average NatGas Prices $/MMBtu

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

NatGas$/MMBtu

Total Electric DemandNYS 2000-2009

Load GWh (NYISO 2010)

410

415

420

425

430

435

440

445

450

455

460

465

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Load GWh

NYMEX Natural Gas Prices

Natural gas storage trend, last 24 months (USEIA)

January 3, 2010, 1 p.m.

January 6, 2010, 9 a.m.

Capital Region Pricing Factors

Transmission congestion Insufficient local generation Stable, growing demand (Global Foundries) Cost to region +/- $200,000,000 per year.

Grid upgrade plans (NYISO 2010)

Firm: Spier Falls to Rotterdam

Non-firm:Spier to Luther ForestRotterdam to Luther ForestMohican to Luther ForestNorth Troy to Luther ForestIrish Road to Luther Forest

Just announced: Champlain-Hudson Express

Cap and Trade: Good News for New York ratepayers

Carbon tax will raise price of coal-fired generation.

Other states are more dependent on coal than New York.

Electric prices will normalize.

New York vs U.S.

New York State 15.27 cents/kwh U.S. average 8.90 cents/kwh

Pennsylvania Electric generation fuel mix, Nov. 2009

Coal

Petroleum

Natural Gas

Nuclear

Renewables

Ohio Electric generation fuel mix Nov. 2009

Coal

Petroleum

Natural Gas

Nuclear

Renewables

NY State Electric generation by fuel source Nov. 2009

Coal

Petroleum

Natural Gas

Nuclear

Renewables

Renewables by 2015 (NYS Energy Plan)

Wind (1,280MW as of 2009): On shore 7,993 MW Off shore 534 MW

Solar PV: 100 MW (14.6MW as of 2006)

Total NYS peak electric demand 2008: +/- 38,720 MW (USEIA)

New York wind resources

Private Investment in renewables

Energy price hedge On-site, behind the meter, PPAs Bi-lateral deals with developers

Green marketing Renewable Energy Credits (RECs)

…What’s next?

NYS Energy Plan encourages

1. New capacity, both Generation and Transmission.

2. Fuel diversity, especially renewables. 3. Clear signals to consumers from

energy markets to induce efficiency.

Other policy initiatives under way

Smart metering – Installations began 2008. Net metering – Customer sited generation

banking. Article 10 - One-stop permitting expired

2002. Is renewed effort in store? Federal ARRA funding, block grants

Consumer Choices and Responsibilities

Shop for energy supplies, price, rate, tax savings. Pay less.

Energy efficiency, SCR, NYSERDA programs. Use less.

Federal incentives, tax credits for efficiency and renewables