ELECTRONICALLY FILED. Docket No STATE OF MAINE. March 20, 2015 PUBLIC UTILITIES COMMISSION

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1 ELECTRONICALLY FILED STATE OF MAINE PUBLIC UTILITIES COMMISSION Docket No March 20, 2015 MAINE PUBLIC UTILITIES COMMISSION Investigation of Parameters for Exercising Authority Pursuant to the Maine Energy Cost Reduction Act, 35-A M.R.S NORTHEAST ENERGY SOLUTIONS,INC.'S STATEMENT IN OPPOSITION TO TENNESSEE GAS PIPELINE COMPANY, LLC' S APPEAL OF PROCEDURAL ORDER DENYING MOTION TO ESTABLISH SCHEDULE NOW COMES Northeast Energy Solutions, Inc. ("NEES"), and pursuant to Chapter 110, 5(B) of the Rules of Practice and Procedure (the "Rules") of the Maine Public Utilities Commission (the "Commission"), submits this Statement in Opposition to Tennessee Gas Pipeline Company, LLC's ("TGP") motion to appeal the Procedural Order Ruling on Scheduling Motions issued by the Commission. In support of its Statement in Opposition, NESS states as follows: Background 1. On February 21, 2015, the Industrial Energy Consumer Group ("IECG") filed a letter with the Commission, requesting the Commission to expedite this proceeding. Thereafter, the Commission received additional motions concerning whether the Commission should continue with the Schedule in Place or establish an amended schedule with accelerated dates for Phase 2 of this proceeding. Page 1 of 5

2 2. On March 12, 2015, the Commission issued a Procedural Order Ruling on Scheduling Motions denying the requests of IECG and TGP to establish an expedited schedule for decision on the Phase 2 proposals by May or June of On March 17, 2015, TGP filed a motion to appeal the Procedural Order, pursuant to Chapter 110, 11(D) of the Rules, and requesting the Commission to establish a prompt schedule for the remainder of this proceeding ("TGP's Appeal"). TGP argues the Commission is not acting with urgency and is acting against the legislative intent of the Energy Cost Reduction Act. Discussion 4. NEES submits that the Commission continues to act with urgency and with jurisdictional prudence. The mandate of the Act is quite clear: The Commission must conduct a cost benefit analysis of the purported benefits of any proposed pipeline expansion contract. That notwithstanding, TGP's Appeal accuses the Commission of repeating "all of the aspects of the energy cost crisis the Legislature itself considered in fashioning the Act..." Nothing could be further from the truth. The Commission is currently reviewing capacity proposals within the context of the modern economics of the global energy market. The Legislature did not have a single developer proposal formally before them during its deliberations in adopting the Act; nor, did the Legislature have the ability to foresee the current seasonal differentiations from then to now. The Commission is not re-litigating any elements that were eventually embodied within the Act. The Commission, quite simply, is implementing the Act. Page 2 of 5

3 The TGP Appeal again pleads for the Commission to encourage the State of Maine to become an economic partner to TGP's proposed Northeast Direct project. However, the TGP Appeal does not include any legal authority under the Act to authenticate their plea. In fact, the Act requires the opposite as noted in the Commission's Procedural Order Ruling on Scheduling Motions issued by the Hearing Examiners on March 12, 2015: "...the Act gives authority to the Commission to do so only after it has determined that the benefits of a pipeline expansion contract will exceed its costs. The analysis of the costs and benefits of pipeline capacity expansions is a complex undertaking, for which the Commission has engaged London Economics International (LEI), an expert consultant. LEI will employ sophisticated econometric and regional energy modelling to gain a full understanding of the likely effects of each of the project proposals. The results of this detailed analysis will be critical to the Commission's decision-making..." 6. TGP's Appeal also provides some discussion regarding legislative intent by way of quoting Senator Cleveland: "It is the goal of this legislation to accomplish the following actions to address these cost increases and grid reliability threats... Third, with the newly created natural gas pipeline capacity purchase capability of the Public Utilities Commission and through the participation in regional energy organizations by public and utility officials, cause the development by 2017 of at least 2 billion cubic foot per day additional natural gas pipeline capacity into southern New England." Notwithstanding whether two billion cubic feet per day of additional natural gas pipeline capacity is required in our region to meet current and foreseeable, actual need, sufficient capacity is being developed by way of other projects, both planned and. Page 3 of 5

4 underway, as of March 16, 2015, in the northeast as shown in Exhibit A to this Statement in Opposition. Moreover, none of the projects listed in Exhibit A but for Northeast Direct are pleading to the State of Maine for financial viability. 7. TGP's Appeal also discusses purported ECRC "off ramps" being "ignore[d]" by the Commission. However, TGP's analysis of their proposal's "flexibility" comparative to Spectra's proposal only serves the Commission as an optimal example of why the Commission must continue with detailed analysis. According to TGP's Appeal, Spectra's flexibility is based upon developer confidence in Spectra's proposed project proceeding solely "based on market support irrespective of a Maine ECRC." In other words, Spectra will be building its proposed capacity without the Commission endorsing any particular project as a result of this proceeding. Also according to TGP's Appeal, TGP's flexibility is based upon "exit strategies... entered into at the conclusion of this proceeding." TGP goes onto quote its own proposal in order to explain that the purported "exit strategies" would only be the State of Maine's ability to sell the very capacity it had secured from TGP. There is great need to examine these proposals in detail, and for the Commission to not rely on any particular developer's unqualified assertions made at any time during this proceeding. 8. TGP's Appeal asserts that NESCOE is stalled. Conversely, NESCOE's Annual Report, dated March 11, 2015, states: "In 2015 and beyond, NESCOE will continue to advance proposals and support market modifications that recognize the imperative that regional planning and wholesale market mechanisms find an appropriate balance to enable the states to execute the requirements of state energy and environmental laws, Page 4 of 5

5 reflect consumer investment in local energy resources, and consider wholesale market concerns. It is critical that federal regulators and the entities they regulate respect state energy and environmental laws and reflect consumer investment in local energy resources. These may include but are not limited to state renewable energy requirements, implementation of microgrids, sustained aggressive investment in energy efficiency and small local generation resources, and other means to enhance grid reliability and continue progress to reduce the region's reliance on higher emissions fuel sources." Further, according to a March 10, 2015 WBUR, a NPR news station, report by Bruce Gellerman, As Winter Electricity Prices Jump, Mass. Debate Over Natural Gas Pipelines Heats Up: "In the coming weeks, Massachusetts Gov. Charlie Baker is planning to host fellow New England governors for an energy summit. Topic one for the Boston gathering will be the soaring cost of electricity." NESCOE may be retying up, not stalled. Conclusion Wherefore NEES respectfully urges the Commission to deny TGP's Appeal and uphold the Procedural Order dated March 12, Respectfully submitted on this 20t~' day of March, i~..~ ~{ V BY: Northeast Energy Solutions, Inc. Vincent Devito, Esq. Bowditch &Dewey LLP One International Place, 44th Floor Boston, Massachusetts (617) vdevito(a,bowditch. com Page 5 of 5

6 {Client Files/REA/308841/0004/B DOCX;I }.docx;l ) Exhibit A

7 PLANNED ENHANCEMENTS, NORTHEAST NATURAL GAS PIPELINE SYSTEMS (as of ) The Northeast Gas Association (NGA) has prepared this summary based on publicly-available information. NGA will strive to keep the information as updated as possible and notes that this information may change pending project developments. May not include all projects. PROJECT COMPANY DESCRIPTION EST. STATUS IN-SERVICE Rockaway Williams /Transco The project involves a proposed 3.2-mile 26-inch lateral, 15` qtr Precedent agreements signed June Lateral consisting of approximately 2.9 miles of offshore Filed with FERC, FERC pipeline and approximately 03 miles of onshore issues final EIS, Approved by pipeline. Designed to provide approx. 647,000 Dth/d of FERC, Under construction. natural gas delivery capacity to National Grid's gas distribution system in Brooklyn and Queens, NY. Tuscarora National Fuel Gas Supply Planned capacity of 95,000 Dth/d. 17 miles of pipeline Nov Jointly filed with FERC, March Lateral &Empire Pipeline plus storage wells and lines. Market is on-system utilities Approved by FERC, March for TGP's Niagara Expansion Project, which is designed to provide transportation from the prolific Marcellus Shale in Pennsylvania to TGP's interconnect with TransCanada Pipeline in Niagara County, N.Y. The project will involve the installation of two natural gas pipelines with approximately 9.5 miles of pipeline in Chester County, PA and 9.5 miles of pipeline in Gloucester County, NJ. The project will also include modifications and upgrades to certain station facilities. Fa Filed with FERC, March Approved by FERC, Feb Filed with FERC, Feb Approved by FERC, Feb Authorized by FERC, Prepared by Northeast Gas Association, March Based on publicly-available information; details may change.

8 PLANNED ENHANCEMENTS, NORTHEAST NATURAL GAS PIPELINE SYSTEMS (as of ), page 2 PROJECT COMPANY West Side 2015 National Fuel Gas Supply Expansion Constitution Cabot/Williams Pipeline Wright Iroquois Gas Transmission Interconnect Project (WIP) Northern Access National Fuel Gas Supply & 2016 Empire Pipeline New Market Dominion Pipeline Project AIM Algonquin Gas Transmission / Spectra Energy Connecticut Tennessee Gas Pipeline Expansion DESCRIPTION Adds 175,000 Dth/day of incremental capacity. 23 miles of 24" pipeline and additional horsepower at Mercer (TGP Sta. 219). Approx. 120-mile Constitution Pipeline is being designed to extend from Susquehanna County, PA, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, N.Y. Proposed capacity of 650 MMCf/d. Cabot and Southwestern are shippers. WIP will enable delivery of up to 650,000 Dth/d of natural gas from the terminus of the proposed Constitution Pipeline in Schoharie County, NY into both Iroquois and the Tennessee Gas Pipeline under a 15 year capacity lease agreement with Constitution. Capacity of 350,000 Dth/day. Deliveries to Chippawa, with new interconnect at TGP 200 Line. ] 00+miles of 24"/30" pipeline and Empire compressor station. Planned for customers in upstate NY (National Grid). Will include the addition of 2 new compressor stations along DTI's existing transmission pipeline; and increased compression at an existing station. Capacity of 112 MMcf/d. Providing 342 MMcf/d of additional capacity to move Marcellus production to Algonquin City Gates. Shippers are 6 gas utilities in New England. Capacity of 72,100 Dth/d. Pipeline looping on TGP 200 and 3001ines. Market is CT natural gas utilities. EST. IN-SERVICE Nov STATUS Filed with FERC, Feb Approved by FERC. Late 2016 Announced spring Filed with FERC, FERC issued final EIS, Authorized by FERC, Announced Filed with FERC, FERC issued final EIS, Authorized by FERC, Nov In FERC pre-filing process, July Nov Filed with FERC, June "a half 2016 Open season held, fall Filed with FERC, FERC issues draft EIS, FERC issues final E1S, Approved by FERC, Nov Open Season held July Filed with FERC, Prepared by Northeast Gas Association, March Based on publicly-available information; details may change.

9 PLANNED ENHANCEMENTS, NORTHEAST NATURAL GAS PIPELINE SYSTEMS (as of ), page 3 PROJECT COMPANY DESCRIPTION EST. STATUS IN-SERVICE Garden State Williams/Transco The project has been designed to provide up to 180,000 Nov Filed with FERC, Feb Expansion dekatherms per day of natural gas service in two phases Nov Project to a new delivery point with New Jersey Natural Gas in Burlington County, N.J. The project will include the installation of a new compressor station, meter and regulating station on land located in Burlington County, N.J. It will also require modifications and the addition of compression at an existing compressor station. No expansion of the pipeline is required. Corning to Millennium Pipeline Company looks to expand capacity along its natural gas 2017 Open season announced March Rockland pipeline that extends from Corning, New York to Rockland County, New York to meet customer demand. Continent to PNGTS C2C will access natural gas supplies from key North Nov Open season, April 1 to June 28, Coast (C2C) American natural gas basins via TransCanada Pipeline. Open season re-convened, Dec Expansion Atlantic Canada markets can then transport on PNGTS to Jan Relaunch of open season, an interconnect with Maritimes and Northeast Pipeline at Jan. Feb Westbrook, ME. Shippers interested in moving natural gas further south into New England can transport on PNGTS to interconnects with other NE natural gas pipelines. May raise PNGTS' current capacity of 168,000 Dth/d to approx. 300,000 Dth/d. South-to-North Iroquois Gas Transmission Reverse flow on Iroquois offering physical transport to Nov Open season held, Dec Jan. ("SoNo") Project U.S./Canada border. The Soho project would transport Relaunch of open season, Jan. up to 300,000 Dth/day from Iroquois' existing Feb interconnects with Dominion Transmission in Canajoharie, NY and Algonquin Gas Transmission in Brookfield, CT, as well as the proposed Constitution Pipeline in Wright, NY. Atlantic Bridge Spectra Energy Incremental expansion on Algonquin and Maritimes 2017 Announced, Feb Open season Northeast, to serve New England and Canadian held, Feb.- March, In pre-filing Maritimes. Capacity of 220,000 Dth/d. with FERC, Feb Prepared by Northeast Gas Association, March Based onpublicly-available information; details nzay change.

10 PLANNED ENHANCEMENTS, NORTHEAST NATURAL GAS PIPELINE SYSTEMS (as of ), page 4 PROJECT COMPANY PennEast AGL Resources, NJR Pipeline Project Company, South Jersey Industries, UGI Energy Services, Spectra Energy and PSE&G Power LLC Northeast Tennessee Gas Pipeline / Energy Direct Kinder Morgan (NED) Project Access Northeast Spectra Energy, Eversource Energy, National Grid DESCRIPTION 100-mile pipeline intended to bring lower cost natural gas produced in the Marcellus Shale region to homes and businesses in Pennsylvania and New Jersey. Designed to provide natural gas service. to the equivalent of 4.7 million homes, up to 1 Bcf per day. PennEast is investing nearly $1 billion to build the pipeline with the costs split among the four entities. Construction of the pipeline could begin in 2017 pending regulatory approvals. This project is a combination of TGP's proposed Pennsylvania to Wright, NY and Wright, NY to Dracut, MA projects. Proposes construction of greenfield pipeline, additional meter stations and compressor stations, and modifications to existing facilities in Pennsylvania, New York, Massachusetts, Connecticut, and New Hampshire. Scalable capacity from 1.2 (30") to 2.2 (36") Bcf/d. Approximately 90% co-located along existing utility corridors / adjacent to TGP mainline. The gas pipeline expansion project will enhance the Algonquin and Maritimes pipeline systems and market area storage assets in New England to deliver up to one billion cubic feet of natural gas per day for electric generation markets. Alliance with Iroquois Gas Transmission announced, EST. IN-SERVICE 2017/2018 STATUS Announced Aug Open season held August Nov Open season held, Feb.-March, In July 2014, Kinder Morgan announced that 9 gas utilities in region have committed to project as initial shippers, at level of approx. 500,000 dekatherms per day (Dth/d). In FERC pre-filing process as of Updated routes announced, Nov Announced Solicitation of interest held, fa open season announced, to run till May 1, Prepared by Northeast Cas Association, March Based on publicly-available information; details may change.