T he C onnecticut E nergy A dvisory B oard Mary J. Healey Vice Chair, CEAB CT Consumer Counsel Connecticut Power & Energy Society March 13, 2006

Mission: CEAB’s primary goal is to encourage competing energy solutions and to provide the opportunity to review multiple energy solutions simultaneously CEAB is responsible for identifying and coordinating state energy needs & recommending strategies & solutions to meet those needs in a manner that is not only environmentally responsible, but also meets reasonable cost & reliability criteria. CEAB Guiding Principles –Citizens and businesses in CT must have access to a safe, affordable, diverse and reliable energy supply. –CT’s policy makers must act in forums where the state's energy interests can be advanced. –CT’s policy makers must act in a coordinated fashion on both a state & regional basis to address energy issues using CEAB's energy plan as a blueprint for action. The Connecticut Energy Advisory Board CEAB Purpose

New Role for CEAB – to review/ evaluate proposed energy solutions CEAB membership changed – independent, restricted membership by parties with interest – (ex. lobbyists/ project developers) Independent funding – through Combined Public Benefits Charge funded by ratepayers Primary duties – develop a state energy plan; develop preferential criteria for evaluating solutions for energy needs Planning Entity per PA The Connecticut Energy Advisory Board

Primary duties – develop a state energy plan; develop preferential criteria for evaluating solutions for energy needs identifying & coordinating state energy needs recommending strategies & solutions to meet those needs - CEAB Preferential Criteria - Balance 5 Overall Policy Goals: Energy (reliability) Economics (costs) Environment (air and water quality) Energy Efficiency/Conservation/Demand Response Quality of Life (local impact concerns) Send signals to energy market/planners - on what preferred features/characteristics the solutions should fulfill Role in State Energy Planning The Connecticut Energy Advisory Board

Triggered by two different scenarios: Reactive RFP Activated in response to an energy project application filed with CT Siting Council CEAB is then required to issue an RFP seeking an alternative solution(s) Proactive RFP CEAB determines that an energy-related need or problem exists for which it will solicit a possible solution(s) CEAB will then issue an RFP requesting that the parties respond with a possible solution(s) Review Process Application The Connecticut Energy Advisory Board

In both scenarios – the range of solutions may include transmission, electric generation, demand-side changes, any other strategy or combination of strategies. Multiple responses to an RFP – will be examined simultaneously & reviewed at the macro-level against the Preferential Criteria Different strategies or combinations of strategies - will be considered relative to each other Review Process (cont’d) The Connecticut Energy Advisory Board

Submits report to CT Siting Council - with commentary on each proposal’s ability to meet energy goals/needs Includes any information obtained through the RFP process - and may also identify issues requiring further review Serves as an advisory document - which will provide information to the CSC for consideration in its review of energy projects, and also inform other states agencies of cognizance Energy project that receive CSC’s approval - will continue to be required to receive approval by the appropriate state regulatory agencies (ensuring all applicable statutory & regulatory requirements are satisfied) The CEAB Report The Connecticut Energy Advisory Board

CT Policy Approach to Improve Electric System AAC Energy Independence (Public Act 05-1/June Special Session) Basic concept – unique hybrid approach…state is catalyst for market to respond directly to identified needs Four basic strategies promoted: 1) Customer-side/ Grid-side distributed generation 2) Incentives for other new generation (capacity contracts) 3) Demand side resources – demand response & EE 4) Rate changes: New C&I rates – Time-of-Use/ TOU (1/1/07); voluntary interruptible or load response (6/1/06) New seasonal rates – for all users (4/1/07) The Connecticut Energy Advisory Board

First Report (Sept. 2005) – CEAB filed a Needs Assessment on near-term FMCC reduction measures (1/1/06) Recommendations on Actions: Mitigate CT’s peak demand Preserve CT’s local generation & encourage new generation resources Improve CT’s transmission Second Report – CEAB Needs Assessment to make determination on longer-term FMCC reduction measures (Mar-Apr RFP). AAC Energy Independence – carved out projects awarded under DPUC 2006 RFP from CEAB RFP process CEAB’s Role in DPUC Implementation of Energy Independence Act REPORT The Connecticut Energy Advisory Board

Benefits of Implementation of CT Strategies New & upgraded facilities - will result in improvements to system reliability & efficiency Load management & reduction will: –decrease customer & system costs –operate to cut $$$ for LMP, LICAP The Connecticut Energy Advisory Board

CEAB Board Members Donald W. Downes, CEAB Chairman Chairman Commissioner F. Philip Prelli Department of Public Utility Control Department of Agriculture Mary Healey, CEAB Vice Chairman John A. Mengacci Consumer Counsel Designee of the Secretary, OPM Commissioner Gina McCarthy Kathleen O'Connor Dept. of Environmental Protection Governor's Appointee Commissioner Stephen E. Korta IIIJames P. Sandler Department of Transportation Appointee of Senate President Pro Tempore Carl J. Schiessl Appointee of the Speaker of the House CEAB website: The Connecticut Energy Advisory Board