1. 1 Interchangeability Sensitive Receptor Inventory Algonquin Gas Transmission New England Customer Meeting Robert D. Wilson Director, Environmental Operations KeySpan

2. 2 Survey Participants KeySpan KeySpan PSE&G PSE&G Connecticut Natural Connecticut Natural Southern Connecticut Southern Connecticut NISOURCE NISOURCE NStar NStar ConEd ConEd New England Gas New England Gas Middleboro Gas & Elec Middleboro Gas & Elec Bay State / NU Bay State / NU

3. 3 Our Goal…………. Work Collaboratively with Pipelines & Suppliers to understand potential impacts of new supplies on end use & address gas quality issues appropriately in Pipeline Tariffs Work Collaboratively with Pipelines & Suppliers to understand potential impacts of new supplies on end use & address gas quality issues appropriately in Pipeline Tariffs Qualify and Quantify end use applications that may require retrofits of “substance” & negotiate best economic “fix” Qualify and Quantify end use applications that may require retrofits of “substance” & negotiate best economic “fix” Understand which end use applications may need “adjustments” prior to introduction of new supplies Understand which end use applications may need “adjustments” prior to introduction of new supplies (Appliance field assessments?) (Appliance field assessments?)

4. 3 Interchangeability Implementation Process 1 Understand Historical Supply 2 Identify “Sensitive Receptors” - LDC’s catalog potential sensitive customer equipment 4 Assessment - Assess sensitive equipment - Establish extent of retrofits - Negotiate fixes 5 Settlement Agreement - Establish interchangeability Tariff parameters - Establish most economical retrofit strategy, schedule & cost sharing mechanism - Work with Pipelines to establish system adjustment gas Work with Pipelines and Suppliers Establish reasonable supply compositions Understand “Zone of Influence”

5. 5 Specific Industry Groups Include: - Commercial Food Processing - Chemicals & Allied Products - Rubber & Miscellaneous Plastics - Electronic & Other Equipment - Stone, Clay & Concrete - Primary Metals Industries

6. 6 Other Applications Considered Distributed Generation Distributed Generation - Engines/Cogen - Engines/Cogen - Fuel Cells - Fuel Cells - Micro Turbines - Micro Turbines Power Generation Power Generation - Gas Turbines - Gas Turbines NGV’s NGV’s LNG Liquefaction Plants LNG Liquefaction Plants

7. 7 KeySpan Identified 158 PSRs in NE

8. 8 KeySpan Identified 213 PSRs in NY

9. 9 KeySpan Identified 164 DG Applications in NY/NE

10. 10 KeySpan Identified 370 HD CNG Engines in NE

11. 11 Northeast LNG Liquefaction Plants New England New England KeySpan KeySpan Southern Connecticut Southern Connecticut Connecticut Natural Connecticut Natural Bay State / NU Bay State / NU New York / NJ New York / NJ KeySpan – 2 KeySpan – 2 Con Ed Con Ed Williams Williams

12. 12 Technical Considerations Real or Perceived ? Appliances Appliances Power Generation - DLE Gas Turbines Power Generation - DLE Gas Turbines Vehicle & Stationary Engines Vehicle & Stationary Engines Feedstock Applications Feedstock Applications Commercial / Industrial Burners Commercial / Industrial Burners

13. 13 Merging Policy & Science White Paper Provides the technical framework for policy makers White Paper Provides the technical framework for policy makers Selective or “piecemeal” interpretation of the White Paper is unacceptable Selective or “piecemeal” interpretation of the White Paper is unacceptable FERC understands the White Paper is more than just “Interim Numerical Guidelines” FERC understands the White Paper is more than just “Interim Numerical Guidelines” How do we negotiate “fixes” for issues of substance which will allow for Tariff Flexibility How do we negotiate “fixes” for issues of substance which will allow for Tariff Flexibility

14. 14 Next Steps………. Consolidate End Use Data Proposal To Have an independent third party “expert”, (GTI), assess the surveys to qualify and quantify real vs perceived impacts Study to be funded collaboratively via stake holders from all segments……. Results of the study will be made “public” in the best interest of the industry to resolve similar issues

15. 15 Remaining Challenges…….. Responsibility of all stake holders in the value chain. Suppliers / Producers, Pipes, LDC’s and End Users need to work together and build on the technical foundation laid by the NGC+ technical teams. Realization that many existing tariffs will need to be updated to address interchangeability, hydrocarbon liquid dropout and overall gas quality issues. Timing is a challenge….. LNG terminals need to know now what design options are necessary to accommodate future tariff requirements.

16. 16 Tariff Issues….. We are Getting Closer ! Need to complete PSR Assessment ASAP Need to complete PSR Assessment ASAP Need to come to agreement on “adjustment gas” Need to come to agreement on “adjustment gas” properties properties Need to resolve “language” necessary to address HDP flexibility issues considering a 15F CHDP Need to resolve “language” necessary to address HDP flexibility issues considering a 15F CHDP Based on determination of required retrofits of substance…. determine the most economical fix associated and / or Tariff Specifications to address compatibility issues Based on determination of required retrofits of substance…. determine the most economical fix associated and / or Tariff Specifications to address compatibility issues Cost recovery mechanisms - “who pays & how”. Cost recovery mechanisms - “who pays & how”.