August 17, 2006

ICF Consulting

RGGI Preliminary

Electricity Sector Modeling ResultsPhase III RGGI Reference and Package

Scenario

2

Updates to Reference and Package Cases

The following changes were made to the Phase III Reference Case relative to the September 2005 Reference Case:

• Oil and gas prices updated to most recent EEA projection

• Electric peak and demand updated to most recent projections from NYISO, ISO-NE and PJM

• Calibrated NH generation mix through 2009

• 600 MW IGCC with 50% carbon capture capability added in upstate NY in 2018

The following changes were made to the Phase III Package Case relative to the September 2005 Package Case:

• Updated offset supply curves

• Implemented Revised offset triggers from MOU

3

Package Scenario

The Package Scenario presented here is based off of the Phase III RGGI Reference Case and includes the following:

• CO2 Policy – Phased-in cap to 2018 (see table below)

• Offsets – Updated supply curves with limits as defined in MOU (table below assumes 3.3% offset limit)

• Efficiency Measures – Options as defined by ACEEE limited by Program Cost Budget Equivalent to 1.0-times Current Program Expenditures

Reference Case, Phase

III, 9 state (MMTons)

Policy GuideRGGI Cap (MMTons)

Offset Limit (%)

Offset Limit (MMTons)

2006 121.5 2006 levels (early action) 121.5 3.3% 4.012007 121.6 2006 levels (early action) 121.5 3.3% 4.012008 121.8 2006 levels (early action) 121.5 3.3% 4.012009 121.9 2006 levels 121.5 3.3% 4.012010 122.6 2006 levels 121.5 3.3% 4.012011 123.4 2006 levels 121.5 3.3% 4.012012 124.1 2006 levels 121.5 3.3% 4.012013 125.8 2006 levels 121.5 3.3% 4.012014 127.4 2006 levels 121.5 3.3% 4.012015 129.1 2.5% Below 2006 Levels 118.5 3.3% 3.912016 131.1 5.0% Below 2006 Levels 115.4 3.3% 3.812017 133.0 7.5% Below 2006 Levels 112.4 3.3% 3.712018 135.0 10% Below 2006 levels 109.4 3.3% 3.612019 136.1 10% Below 2006 levels 109.4 3.3% 3.612020 137.1 10% Below 2006 levels 109.4 3.3% 3.612021 138.2 10% Below 2006 levels 109.4 3.3% 3.612022 139.8 10% Below 2006 levels 109.4 3.3% 3.612023 141.4 10% Below 2006 levels 109.4 3.3% 3.612024 143.0 10% Below 2006 levels 109.4 3.3% 3.61

RGGI Package Scenario

5

RGGI Cumulative Capacity Additions by 2024

-

5

10

15

20

25

30

35

40

Reference Case Package Case

GW

Other Renewables

Wind

Gas

Coal

Nuclear

6

RGGI Generation Mix in 2024

-

100

200

300

400

500

600

Reference Case Package Case

TW

h

Net Imports

OtherRenewablesWind

Other

Oil/Gas

Gas

Coal

Nuclear

7

RGGI 9-State CO2 Emissions

0

20

40

60

80

100

120

140

160

2006 2009 2012 2015 2018 2021 2024

Mill

ion

Ton

s

Reference Case

Package Case With Offsets

Package Case Cap

8

CO2 Allowance Prices – Package Case

0

1

2

3

4

5

6

7

8

2006 2009 2012 2015 2018 2021 2024

$/T

on

9

RGGI Average Annual Energy Prices

NOTE: Energy prices include annualized capacity prices.

0

10

20

30

40

50

60

70

80

2006 2009 2012 2015 2018 2021 2024

$/M

Wh

Reference Case

Package Case

10

Change in RGGI Average Annual Energy Prices

NOTE: Energy prices include annualized capacity prices.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

2006 2009 2012 2015 2018 2021 2024

Cha

nge

in E

nerg

y P

rice

Package Case

11

RGGI Net Imports

0

10

20

30

40

50

60

70

80

90

2006 2009 2012 2015 2018 2021 2024

TW

h

Reference Case

Package Case

12

Cumulative CO2 Reductions by 2015 and 2021RGGI and Eastern Interconnect/Canada

0

50

100

150

200

250

300

350

400

RGGI EI & Canada RGGI EI & Canada

Mill

ion

Ton

s

Offsets

On SystemReductions

2015 2021