Energy Policy Roundtable in the PJM Footprint Maryland’s Offshore Wind Projects Chairman Kevin Hughes Maryland Public Service Commission May 23, 2018

Maryland Qualified Offshore Wind Projects On May 11, 2017, the Commission issued Order No. 88192 in which it awarded ORECs to two offshore wind developers: U.S. Wind, Inc. (248 MW); and Skipjack Offshore Energy, LLC (120 MW) Together, the projects are projected to yield over $1.8 billion of in-state spending, spurring the creation of almost 9,700 new direct and indirect jobs and contributing $74 million in state tax revenues over 20 years ORECs are awarded for a period of 20 years, at a levelized price of $131.93/MWh, beginning in Jan. 2021 (US Wind) and 2023 (Skipjack) Net ratepayer bill impacts are projected to be $1.34/mo. for Res. customers, and yield less than a 1.33% impact on annual bills of C&I customers As proposed, US Wind project constitutes 62 turbines at 12-15 nautical miles offshore, and Skipjack project constitutes 15 turbines at 17-21 nautical miles

Maryland Qualified Offshore Wind Projects (Cont’d) The Commission attached nearly 30 conditions, including: Contribute $6M each to the Maryland Offshore Wind Business Development Fund US Wind is required to locate its project as far to the east (away from the shoreline) of the designated wind energy area as reasonable and practicable. Each developer also must take advantage of the best commercially-available technology to lessen views of the wind turbines by beach-goers and residents, both during the day and at night Next Steps: both OSW projects must proceed through the federal permitting process administered by US DOE – BOEM

Offshore Wind REC Dollar Flows Electric Suppliers ▪ buy ORECs to cover their load ▪ charge retail customers for cost of OREC through supply charges Retail Customers ▪ Pay cost of ORECs through supply charges ▪ Receive PJM revenue Escrow Agent ▪ receives OREC payments from Suppliers ▪ pays OREC revenues to Developers ▪ receives PJM revenue from Developers ▪ pays PJM revenue to Electric Distribution Companies for refunds to Retail Customers Electric Distribution Companies ▪ Receive PJM revenue from Developers (via Escrow Agent) ▪ Pay PJM revenue to Retail Customers Wind Project Developer