Power Supply/ Power Plant Project

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• Power Supply/Power Plant Project
• 2006
• Power for the future of Braintree

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AGENDA

• Mission statement
• Status of power plants in New England
• Why BELD wants to build a power plant
• Power plants effect on your electric bill
• Involvement of other utilities
• Risks constructing a power plant
• Who is helping us build the power plant
• Why now
• Benefits to the Town of Braintree

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BELD MISSION STATEMENT

• Provide safe, reliable, economical electricity
  and broadband service to our customers in
  Braintree

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RELIABLE ELECTRICITY

• BELD has complete control over our own
  transmission and distribution system
• Invest in TD to insure highest reliability
• Staff appropriately and train our employees
• Average Service Availability Index 99.997
• BELD relies on ISO-NE (regulator) to plan for and
  operate power plants in New England
• No power plants currently being developed
• Private generating companies need incentives to
  build new power plants.
• Banks need guarantee that loans will be repaid

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HISTORICAL/FUTURE LOAD VS. GENERATION
Total Installed Generation Net Generation
Available 50/50 Load Line 90/10 Load Line
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RELIABLE ELECTRICITYINCENTIVES TO POWER PLANTS

• Brownouts/blackouts are possible starting in 2008
• Incentive is new fixed payment for generating
  companies called Forward Capacity Market (FCM)
• Electric utilities (BELD, NSTAR, TMLP, NGRID
  etc.) will be charged a fixed fee based on the
  load they serve
• Who pays? Rate payers

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RELIABLE ELECTRICITYINCENTIVES TO POWER PLANTS

• Incentives phased in through 2010 (per 100 MWs)
• 2007 305,000/month
• 2008 375,000/month
• 2009 410,000/month
• 2010 450,000/month1,600,000
• Allows electrical utilities to self supply

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WHY A NEW POWER PLANT?

• Current generating capacity of 87 MWs
• 67 MW Potter II
• 7.5 MW Seabrook
• 2.5 MW NY Hydro
• 10 MW Cleary Unit 9 Taunton
• Current peak load (usage) 91 MWs
• Expected peak load (usage) 110115 MWs (2012)

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WHY A NEW POWER PLANT?

• Build it or pay for it
• Incentives will be paid to generating companies
  to build power plants (450,0001,600,000/month
  (FCM payments)
• We can build plant for 800,000/month and expect
  FCM to be at this level or higher (Debt service
  fixed OM)
• Will provide BELD with 30 MWs of capacity we need
  in the future
• BELDs share of debt service and fixed OM
  240,000/month
• 115 MWs in 2015

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ECONOMICAL ELECTRICITYWHY A NEW POWER PLANT?

• Generate electricity or pay someone else a profit
• As less-efficient power plants run more,
  electricity costs will go up
• Private generating companies want high
  prices/high profits
• Older, less-efficient power plants will set
  market priceall power plants will get paid at
  that price

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FORWARD ON-PEAK MARKET HEAT RATE PRICING
New Power Plant Heat Rate
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ELECTRICITY SUPPLYWITH NEW POWER PLANT
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2006 POWER SUPPLY SAMPLE PEAK HOUR
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NEW POWER PLANTEFFECT ON RATES
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NEW POWER PLANTEFFECT ON RATES
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INVOLVEMENT OF OTHER MUNICIPAL UTILITIES

• BELD will own 100 of new power plantcomplete
  control over all decisions
• Contract with other municipal utilities
• Entitlement to capacity and electricity
• Charge other municipal utilities a fee
• Helps BELD diversify their risk
• Keep 30 of output
• Not too many eggs in one basket

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RISK of NEW POWER PLANT

• Financial (Braintrees 30 MWs)
• General Obligation Bonds2.25 million/year in
  debt payments (3.65/month on average bill)
• Forward Capacity Market minimum (4.50/KW
  month)1.62 million/year revenue (2.63/month on
  average bill)
• Net carrying cost of debt1.02/month on average
  bill
• Schedulingspread project out 56 years, very
  achievable (started in 2004)
• Technical
• Hired the best consultants
• Evaluated many different power plant
  configurations
• Evaluated many different gas turbine manufacturers

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WHO IS HELPING USBUILD THE POWER PLANT

• Owners engineerCH2MHill/Lockwood Green
• Legal/contractRubin and Rudman
• Project managementDMJM Harris
• PermittingEpsilon Associates
• Environmental consultingWoodward and Curran
• Power supplyEnergy New England

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WHY BUILD THE POWER PLANT NOW?

• Inflationwill add 45 million/year to cost
• Labor force availablecentral artery complete, no
  other power plant construction
• Want to be completed prior to 2010 FCM full
  implementation

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NEW POWER PLANTSCHEDULE

• Legislation signed by Governor
• Town Meeting May 1
• Permitting 20062007
• Site prep 20062007
• RFP for gas turbine 20062007
• RFP for EPC contractor 20062007
• Engineering 20072008
• Construction 20082009
• Commercial operation summer 2009

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SAFE, RELIABLE, AND ECONMICAL ELECTRICIY FOR
BRAINTREE

• Allows Braintree to control its own destiny
• Fully covers BELDs capacity requirement at less
  than market rates
• Provides an efficient source of electricity for
  the future
• Increased In Lieu of Tax payment500,000/year

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CURRENT BELD SITE
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NEW POWER PLANT
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NEW POWER PLANT
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NEW POWER PLANT
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• Power Supply/Power Plant Project
• 2006
• QUESTIONS ??