1. TransmissionHub Quarterly Market Update June 8, 2015 Kent Knutson, Director Hub Services, PennWell Corporation Sponsored by

2. What’s Driving Transmission? Capital expenditures on record pace Election year uncertainty – Commissioner vacancies at FERC Clean Power Plan fate awaits en banc hearing Energy Policy Modernization Act passes the Senate – now its on to the House FERC technical conference on Order 1000 Interregional planning concepts take center stage Build out of renewable and gas generation driving new transmission development

3. TransmissionHub data.... Overall Investment staying strong Fewer big projects expected online in 2016-17 Healthy construction – $24.6bn 2018 and beyond forecast stays robust but includes a number of merchant and conceptual projects slowly moving through the development cycle Most new project announcements have been smaller with focus on reliability and interconnecting renewables Transmission Investment Trends

4. Discussing the Brattle Group’s recent white paper highlighting how improved transmission planning is key to the transition to a carbon constrained future..... “The positive case for modernizing, integrating and upgrading the high voltage system can and should be made by its planners, especially in organized markets. But, old habits die hard. It’s easier to focus largely on reliability needs, or to limit planning to incremental grid additions, or to wait and see what transpires at the generation level of the system..... Transmission investment is about preserving options and delivering value, long-term. The failure to plan proactively could impose real costs on consumers and the economy.” - Jim Hoecker, WIRES Counsel and Former FERC Chairman Industry Quotes...

5. US/Canada Planned Transmission Investments - $M

6. HVDC – $47.2bn Underground and water – $18.2bn $10.6bn in 2016 – (TransmissionHub forecast $11.3bn in March 16’) $10.6bn in 2016 – $8.2bn UC $10.3bn in 2017 – $5.2bn UC $30.1bn in 2018 – $7.0bn UC $28.5bn in 2019 – $4.1bn UC 2016 – 130 projects, 23 > $100m 2017 – 132 projects, 29 > $100m 2018 – 150 projects, 58 > $100m 2019 – 84 projects, 45 > $100m Statistics Support Robust Transmission Market, but Slowing...

7. Transmission Capital Expenditures Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities

8. Industry Capital Expenditures by HoldCo Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities

9. Transmission Investment Additions Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities Up 9.7%Essentially Flat $53.4bn over 3 years

10. Transmission O&M Expenses Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities Up 10.3% Up 11.7% $32.7bn over 3 years

11. Transmission Capital Additions by OPCo Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities

12. Transmission O&M Expenses by OPCo Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities

13. Transmission New Line Expenses by OPCo Source: FERC Form 1 Annual Financial Reports for Major Electric Utilities

14. Transmission Development by Sponsor Type ($M)

15. Major Project Groups: Progress and Delays $M

16. CapX2020: Blueprint for Interregional Planning New Report from Humphrey School of Public Affairs at the University of Minnesota CapX2020 was the brainchild of Will Kaul (Great River) and Teresa Mogensen (Xcel Energy) $2.1bn – 800+ mile 345kV project 11 Midwestern utilities collaborated On Budget and 3 years ahead of schedule 12 years of effort – planning prior to ISO/RTO Huge benefits to states with jobs and tax base Local vs. regional challenges

17. Transmission Investment by ISO/RTO ($M)

18. Age of New York Transmission Facilities by Percentage of Circuit Mile Source: New York ISO – Power Trends 2015, Rightsizing the Grid

19. Top US/Canada Transmission Projects Scheduled Online in 2016

20. Top US/Canada Transmission Projects Scheduled Online in 2017

21. Top US/Canada Transmission Projects Scheduled Online in 2018

22. Transmission Investment in the News...

23. Investments in the news...

24. Projects on the Move...

26. Policy, Acquisitions and Regional Concepts in the News

27. Generation Interconnect Projects Are Driving Transmission...

28. Interconnection Projects in the News...

29. US Current Electric Capacity First Year Online by Fuel Type (MW) Gas, Wind and Solar Continue to Dominate the Generation Landscape US Investment 2016-18 Gas: 87.4 GW (59%) Wind: 29.7 GW (20%) Solar: 21.3 GW (15%) GWS: 138.5 GW (94%) All: 147.3 GW

30. New Capacity Additions (MW)

31. Planned Gas Power by Status (MW)

32. RECENT TRENDS US Electric Utility Fuel Mix – Electric Generation Most Recent 12 Months – Ending February 2016 Most Recent 12 months ending February, 2016 compared with same period in prior year: Gas 17.1% Coal -15.4% Nuclear -0.2% Hydro -5.3% Other Renew 10.2%

33. Trends in Average Delivered Price of Coal and Natural Gas to US Electric Power Plants Most Recent 12 months ending February, 2016 compared with same period in prior year: Electric Utilities Coal down 6.7% to $2.16/mmBtu Gas down 30.9% $3.34 Independent Power Producers Coal down 8.1% to $2.06/mmBtu Gas down 38.1% to $2.66 Electric Rates Residential up 0.4% to 12.7 c/kWh All Customers down 0.8% to 10.4 $/mmBtu

34. CME HH Futures June 16’$2.07 July 16’$2.23 January 18’$3.28 Henry Hub Daily & Quarterly Average Price

35. Electric Sales most recent 12 months ending in February 16’ compared with same period in 15’.... Residential down 0.6% Commercial up 0.4% Industrial down 3.7% All Sales down 1.1% US Electricity Demand Growth

36. Annual Electric Energy Demand in NY 2000-2014 Source: New York ISO – Power Trends 2015, Rightsizing the Grid

37. Planning for a carbon constrained future – now's the time to plan for 2030 and beyond Replacement of Aging Infrastructure With lower approved ROE’s is transmission the best place for your money? Near term boom in tax credit supported wind and solar means more transmission investment – the party’s going to end by the end of the decade Declining and flat load growth will slow development Transmission Investment Opportunities and Challenges

38. Questions and Answers At this point I would like to field any questions.... Thank You to Our Sponsor

39. To find out more about TransmissionHub and to schedule a demonstration of our online intelligence service call or email.... Shaun JamesonDoug Stephens(918) 832-9291 shaunj@pennwell.comshaunj@pennwell.com dstephens@pennwell.comdstephens@pennwell.com Thank You for Attending.... June 27-28, 2016