1. CAMPUT 2015 Energy Regulation Course: Electricity Industry Overview Francis Bradley 22 June 2015, Kingston ON

2. The Canadian Electricity Association (CEA) Founded in 1891, the Canadian Electricity Association is the national forum and voice of the evolving electricity business in Canada. Mission : A safe, secure, reliable, sustainable and competitively priced supply of electricity is essential to Canada’s prosperity. CEA is the voice of the Canadian electricity industry, promoting electricity as the critical enabler of the economy and Canadians’ expectations for an enhanced quality of life. Page 2

3. CEA Utility Members Page 3

4. Generating Electricity Affects of moving magnets past wire. Moving magnets past a wire makes electrons move through it, thereby generating electricity. Energy can neither be created nor destroyed -it can only be transformed (converted) from one form to another Page 4

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9. Canada’s Multi-Jurisdictional Environment Page 9 Jurisdictional Division of Responsibility Provincial/Territorial GovernmentsFederal Government Resource management within provincial boundaries Intra-provincial trade and commerce Intra-provincial environmental impacts Generation and transmission of electrical energy Conservation and demand response policies  Resource management on frontier lands  Nuclear safety  Inter-provincial and international trade  Trans-boundary environmental impacts  Environmental impacts where federal lands, investment or powers apply  Codes, standards and labeling relating to conservation and demand  Other policies of national interest

10. Canada’s Regulatory Regime for Energy Projects Page 10 *Permits required under other Acts trigger CEAA OGD participants Illustrative – some components would not apply to same project NWPA – Navigable Waters Protection Act / YESAA – Yukon Environmental and Socio-Economic Assessment Act MVRMA – Mackenzie Valley Resource Management Act / MBCA - Migratory Birds Convention Act / IBWTA – International Boundary Waters Treaty Act / CPRA – Canadian Petroleum Resource Act / Offshore Accords – Canada - NS and NFLD Offshore Accords / CEPA – Canadian Environmental Protection Act

11. Electricity Demand in Canada by Sector, 2012 Page 11 *Numbers may not sum to 100 percent due to rounding Source: Statistics Canada, Catalogue no 57-003-X, Report on Energy Supply and Demand in Canada, 2012 preliminary. Table 1-1.

12. Canada’s Future Residential Electricity Needs Page 12 Reference: Graphics from BC Hydro: Lighting the Way. Estimates based on a business as usual scenario. Stats Canada Population Projections: Table 052-0005

13. Electricity Generation in Canada by Fuel Type, 2013 Page 13 *Numbers may not sum to 100 percent due to rounding. Source: Statistics Canada, Electric Power and Generation -Annual (CANSIM 127-0007), 2013. Retrieved September 10, 2014

14. Electricity Generation in Canada by Province and Fuel Type, 2013 Page 14 Total Electricity Generation in Canada, 2013 = 611.31 TWh Source: Statistics Canada, Electric Power and Generation - Annual (CANSIM 127-0007), 2013. Retrieved 25 May 2014 63.6164.05 35.87 13.99 42.14 0.15 149.82 10.53 206.8 23.08 *Point Lepreau nuclear generating station resumed power production on November 23, 2012, nuclear is expected to be a major source (about 30%) of electricity in New Brunswick.

15. Installed Wind Capacity in Canada as of July 2014 Page 15 Source: Canadian Wind Energy Association, retrieved September 10, 2014

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17. Coal Fleet Profile (MW) Page 17 (Source: NPRI data). * Retirement age 45-50 years as per the 2012 Reduction of Carbon Dioxide Emissions from Coal- Fired Generation of Electricity Regulations. Includes Ontario coal shutdown by 2014.

18. Greenhouse Gas (GHG) Emissions in Canada and the US by Sector, 2012 Page 18 *includes all the other energy sector emission sources, such as mining, manufacturing, and construction, fugitive sources and agriculture/forestry/fisheries Source: Environment Canada, National Inventory Report and US GHG Emissions and Sinks 1990- 2012. Retrieved June 13, 2014.

19. Electricity leading all Canadian industrial sectors in reduction of CO 2 Page 19

20. North American Electric Reliability Corporation (NERC) Regions Page 20

21. Major Canada-U.S. Transmission Interconnections Page 21 Map copyright CEA. Lines shown are 345kV and above. There are numerous interconnections between Canada and the U.S. under 345KV that do not appear on this map.

22. Manitoba Hydro (MH): 500 kV line to U.S. border. Minnesota Power (MP): 500 kV line from border to Duluth. “Hydro by wire” from Manitoba enables “wind by wire” from North Dakota. Overall project enhances regional reliability and provides energy market benefits. 2020 expected in-service date. Page 22 Winnipeg HVDC Line +/- 500kV (600 miles) HVDC Line +/- 500kV (850 miles) Manitoba Hydro Minnesota Power Manitoba-Minnesota Transmission Project New Line Existing Line

23. Major Canada-U.S. Transmission Interconnections Page 23 Source: National Energy Board

24. Canada-U.S Electricity Trade – 2012 (GWh) Page 24 Source: National Energy Board – Electricity Imports and Exports

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26. Canada-U.S. Electricity Trade Revenue, 1990 – 2013 Page 26 California Energy Crisis of 2000 and 2001 was the situation when California had a shortage of electricity California Energy Crisis \ Source: National Energy Board, Electricity Exports and Imports, 2013 Retrieved August 19, 2014

27. 2013 Canadian Electricity Export Destinations Alaska Arizona California Colorado Idaho Indiana Maine Massachusetts Michigan Minnesota Missouri Montana Nevada New England ISO New Mexico New York North Dakota Oregon PJM (Pen/NJ/Maryland) Pennsylvania Texas Utah Vermont Washington Wyoming Page 27

28. Building the Next Generation of Infrastructure: Capital Investment Requirements Page 28 Billions of 2010 CDN dollars GenerationTransmissionDistributionTotal 2010 – 2030195.735.862.3293.8 Source: The Conference Board of Canada, Shedding Light on the Economic Impact of Investing in Electricity Infrastructure, February 2012 Total Canadian Electric Sector Investment Required by 2030 = 293.8 Billion in 2010 CDN dollars, or 347.5 Billion in current CDN dollars.

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30. Average Residential Electricity Price in Canada, 1998 – 2013 (2008 cents/kWh) Page 30 Notes: Based on 1,000 kWh monthly consumption Average electricity price is an average of 11 major Canadian cities for years 1998-2008 and an average of 12 major Canadian cities for years 2009-2013; and may not represent an exact national average. Source: Hydro Quebec, Comparison of Electricity Prices in Major North American Cities, 1998 – 2013; Ontario Hydro: Electricity Rates by Province, Retrieved May 28, 2014.

31. Selected World Residential Electricity Prices, 2012 Page 31 Source : International Energy Agency, Key World Energy Statistics 2013 with 2012 data

32. Selected World Industrial Electricity Prices, 2012 Page 32 Source : International Energy Agency, Key World Energy Statistics 2013 with 2012 data

33. Page 33 Saskatchewan Wholesale open access Vertically-integrated Crown corporation Alberta Mandatory Power Pool Wholesale & retail open access since 2001 Fully competitive wholesale market Manitoba Wholesale open access Vertically-integrated Crown corporation Ontario Industry unbundling in 1998 Wholesale & retail open access since 2002 Hybrid regulation and competition model Québec Wholesale open access Vertically-integrated Crown corporation Expanding IPP development Newfoundland Vertically- integrated Crown corporation and investor-owned distribution utility New Brunswick Wholesale open access Returning to vertically-integrated utility model Nova Scotia Wholesale open access Investor-owned utility regulated on cost-of-service BC Wholesale & industrial open access Vertically-integrated Crown corporation serves 94% of customers PEI Procures electricity from New England market and long- term contracts with New Brunswick Electricity Market Structures in Canada

34. EPRI: The Integrated Grid REALIZING THE FULL VALUE OF CENTRAL AND DISTRIBUTED ENERGY RESOURCES Page 34

35. Value of the Integrated Grid Page 35

36. New York: Reforming the Energy Vision (REV) New York will have a system operator at the distribution (retail) level These Distributed System Platform (DSP) Providers will serve as a retail-level dispatcher for a grid supplied not only by traditional power plants, but also by a vastly expanded fleet of Distributed Energy Resources (DER). DER is defined in the REV order as: "including end-use energy efficiency, demand response, distributed storage, and distributed generation. Page 36

37. For more information: Francis Bradley Vice-president, Policy Development Canadian Electricity Association t 613 230 5027 bradley@electricity.ca www.electricity.ca Page 37