NOVA SCOTIA TO NEW YORK AN EMERA PERSPECTIVE

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1 NOVA SCOTIA TO NEW YORK Emera Snapshot AN EMERA PERSPECTIVE NPCC 2002 General Meeting Common Market Developments Panel $4 B in assets $1 B in revenues 550,000 customers Business interests along the energy value chain in northeast North America Electricity Midstream Pipeline Offshore Gas Infrastructure Fuel Oil Distribution James L. Connors, Q.C. Vice President, Regulatory Affairs

2 Emera At A Glance (all amounts Canadian $) $4 B in assets / $1 B in revenues Over $100 M in earnings 550,000 customers Energy operations in northeast North America Electricity Midstream Pipeline Offshore Gas Infrastructure Downstream Fuel Oil Distribution Energy Services

3 Nova Scotia Power A Solid Foundation NSPI generates, transmits and distributes 97% of Nova Scotia s electricity. Installed generating capacity of 2,183 megawatts of thermal and hydro power. The company is committed to providing its 440,000 customers with a safe and reliable energy source. NSPI provides solid earnings and cash flow to fund shareholder dividends and investments for growth.

4 Bangor Hydro Builds Business Bangor Hydro acquired by Emera in2001 Maine s 2 nd largest utility with 110,000 customers A pure transmission and distribution business Standardization with NSPI is underway in operational processes and realizing synergies Strategic addition for Emera with opportunities for additional north/south transmission.

5 Emera Energy Invests for Growth 12.5% interest in M&NP gas transmission pipeline 8.4% interest in Sable offshore platforms & sub-sea sea gathering lines Greyhawk Gas Storage; a joint venture with Falcon Gas Storage in New York Emera Fuels distributes oil products throughout Maritimes (N.S., N.B., & P.E.I.) Energy Services leverages asset base Business Development seeks strategic opportunities throughout the Northeast Market

6 Emera Envisions...

7 Maine Market Developments Maine legislature is having MPUC consider advisability of a Maine/Maritimes RTO We think that Maine s view should be south as well as east Better for customers in Maine FERC s SMD NOPR Customers in Maine should benefit

8 New England / New York Nova Scotia Power congratulates the efforts of ISO- NE and NYISO in working together to advance a common market design and develop a Northeast RTO. We will work with them in their efforts to address market interface issues with a goal to achieve more compatible and seamless competitive markets. - NSPI COO, Chris Huskilson on NERTO

9 Nova Scotia Market Developments Canada lacks a FERC to drive market standardization so each province has been evolving at its own pace In Nova Scotia the process is moving at a speed customers seem comfortable with Some may think it slow but we want to be sure of what we do

10 Seizing the Opportunity Nova Scotia s Energy Strategy 2001 Government led a consultative process around energy issues Oil, gas and electricity opportunities Managing all our energy resources Powering the economy Improving the Environment Securing our future Opportunities and Challenges

11 NS Energy Strategy Priority driving our market change is the desire to have and maintain an electrical energy supply that is secure, reliable, affordable and produced in an environmentally responsible manner Strategy seeks to carefully increase competition And encourage the growth of renewable energy sources in Nova Scotia

12 Carefully Increasing Competition Electricity Marketplace Governance Committee to recommend the implementation, development, structure and rules for the future NS electricity market Work with NSPI and stakeholders to carefully and gradually open up the electricity marketplace in NS Wholesale customers will be able to purchase competitively (six municipal utilities) Competition for the construction of any future generation

13 Open Access and Other Changes Open access transmission on NSPI facilities for all generators selling to wholesale customers and into the export market Steps to be taken to meet US reciprocity requirements to export electricity NS supports the US goal of a seamless and highly efficient national grid Green power producers may retail directly

14 Managing Change Carefully NSPI is a relatively small utility by North American standards. Retaining its vertically integrated structure and its economy of scale is considered very important for its business and residential customers Government/Stakeholders Breaking up NSPI or forcing divestiture of assets is not being considered NSPI will separately account for key utility functions: generation, transmission, distribution, ancillary services

15 New Brunswick / Nova Scotia NS has only a single path to the rest of the world through NB 300 MW So the seams choices NB makes are very important to us Have had an interconnection agreement with NB Power since 1950 s A high degree of cooperation - sharing capacity and reserves

16 Let s Not Lose Economic Opportunities for Those on Both Sides of the Border We want to work towards the resolution of seams issues within the Maritimes (NS, NB, and PEI) Have the Maritimes work to resolve seams issues with New England/New York Transactions between the Maritimes and New England are fraught with seams issues that it is in our mutual interest to resolve

17 The Customer Seam Emera s Nova Scotia to New York perspective is very much informed by the customer view Often don t find the word customer in seams and related market discussions Much of market standardization is focused on the wholesale market and not on end users Yet the implications of everything NPCC and others do translates into prices paid by residential, commercial and industrial customers

18 The Northeast - - An Exciting Opportunity As Emera diversifies into the larger energy scene, there is a real excitement in getting into new opportunities in the U.S. and at home David Mann, President & C.E.O. Emera Inc.

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