2017 Annual Wequassett Customer Meeting. WEQUASSETT RESORT, Chatham, MA May 24, 2017

Transcription

1 2017 Annual Wequassett Customer Meeting WEQUASSETT RESORT, Chatham, MA May 24,

2 Agenda 2017 Wequassett Customer Event Welcome/Enbridge Update Winter Operations Effects of Non-Rateable Flow New Pipeline Development Brian McKerlie/Rich Paglia Mark MacPherson Bill Whaley Nikki Bruno Break NGA Update Closing Tom Kiley Bill Yardley 2017 Wequassett Customer Event 2

3 Welcome Brian McKerlie Vice President, US Gas Transmission and Storage Rich Paglia Vice President, US Marketing 3

4 Highlights of Strategic Combination Global energy infrastructure leader $166 Billion EV * Unparalleled secured growth program of $27 Billion + $48 Billion in probability weighted development project pipeline Stable and predictable cash flows 96% Take-or-pay and equivalent or regulated Diversified assets and strong investment grade balance sheet Industry leading total return potential 4.6% Yield Superior annual dividend growth 10-12% Through 2024 *As of Feb 24, 2017 Note: 4.6% yield implied by the current share price and the 2017 increase. Slide reflects pro-forma combination with Spectra. For more information please refer to the presentation and news release dated September 6, 2016 which is available on Enbridge s website.

5 What we do We help to fuel the quality of life for millions of people everyday by connecting them with the energy they need. Our liquids business Our natural gas business Our renewables & transmission business Our gas distribution business 16,500 miles (28,000 km) of active pipe 3 million bpd capacity More than 100 unique commodity types 34, 410 miles (55,200 km) of natural gas lines Moving 15% - 20% of North America s gas needs 23 renewable projects in wind, solar, geothermal and waste heat recovery 2,800 megawatts generating capacity 3.5 million customers across Enbridge Gas Distribution and Union Gas Servicing more than 500 different communities 5

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7 Winter Operations Mark MacPherson Director, Capacity Management 7

8 Very Warm Market Area: Dec - Feb 8

9 EHDD Boston Daily Average EHDD % -15.5% -6.7% -10.0% % 19.7% % % -10.7% 45.0% Nov Dec Jan Feb Mar 5yr avg W15_16 W16_17 9

10 Dth Deliveries Winter Algonquin Gas Transmission 300,000,000 Nov - Mar of Each Year 275,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 75,000,000 50,000,000 25,000,

11 Mdth Monthly Deliveries Algonquin Gas Transmission 70,000 60,000 50,000 40,000 30, % 26% of 21.8% 29% of 27% of 16.6% 21% of 24.0% 26% of 18% of 6.8% 16% of 4.4% 18% of 18% of 0.9% 0.4% 15% of 18% of 18% of 20.9% 18% of 23.9% 20% of 17% of 20,000 10,000 0 Nov Dec Jan Feb Mar Prev 5 Winter Avg Pwr W15_16 Pwr W16_17 Pwr Prev 5 Winter Avg Non Pwr W15_16 Non Pwr W16_17 Non Pwr 11

12 Dth Power Load Demand vs EHDD Algonquin Gas Transmission 600, , , , , , EHDD 1415 Winter 1516 Winter 1617 Winter Curve Fit (1415 Winter) Curve Fit (1516 Winter) Curve Fit (1617 Winter) 12

13 Mdth/d Top 25 Days Algonquin Gas Transmission W09/10 W14/15 W15/16 W16/17 13

14 Dth High Hourly Swings Algonquin Gas Transmission 120,000 Top 20 - Max Hourly Flow % vs Scheduled Non OFO 100,000 80,000 62% 44% 43% 38% 37% 36% 33% 32% 32% 32% 31% 30% 30% 29% 29% 29% 28% 27% 27% 29% 60,000 MaxHrFlow Scheduled 40,000 20,

15 Dth Moderate Hourly Swings Algonquin Gas Transmission 140,000 Top 20 - Max Hourly Flow % vs Scheduled - OFO 120, ,000 40% 35% 32% 31% 31% 28% 28% 28% 28% 28% 27% 26% 26% 25% 25% 25% 25% 25% 80,000 37% 35% 60,000 MaxHrFlow Scheduled 40,000 20,

16 Supply Diversity Algonquin Gas Transmission Nov 13 - Mar 14 Nov 14 - Mar 15 Nov 15 - Mar 16 Nov 16 - Mar 17 Texas Eastern Tenn Mahwah- AGT Tenn Mahwah- TE 652* 667* 663* 660* Transco Columbia Iroquois Millennium- AGT Millennium- TE 51* 56* 50* 62* West End Supply 1,343 1,431 1,311 1,643 Maritimes Distrigas Tenn - Mendon Excelerate East End Supply

17 Dth Northeast Market Area Deliveries Winter Texas Eastern Transmission, L.P. 800,000,000 Nov - Mar of Each Year 700,000, ,000, ,000, ,000, ,000, ,000, ,000,

18 Mdth Northeast Market Area Monthly Deliveries Texas Eastern Transmission, L.P. 180, , % 140, , , % 14% of 3.1% 16% of 14% of 26.6% 13% of 17.9% 14% of 9% of 5.4% 11% of 11% of 10% of -5.6% 11% of -13.6% 13% of 11% of 17.0% 12% of 11.3% 15% of 8% of 80,000 60,000 40,000 20,000 0 Nov Dec Jan Feb Mar Prev 5 Winter Avg Pwr W15_16 Pwr W16_17 Pwr Prev 5 Winter Avg Non Pwr W15_16 Non Pwr W16_17 Non Pwr 18

19 Mdth/d Northeast Market Area Top 25 Days Texas Eastern Transmission, L.P W13/14 W14/15 W15/16 W16/17 19

20 Dth Market Zone 2&3 Deliveries Winter Texas Eastern Transmission, L.P. 1,200,000,000 Nov - Mar of Each Year 1,000,000, ,000, ,000, ,000, ,000,

21 Mdth Market Zone 2&3 Area Monthly Deliveries Texas Eastern Transmission, L.P. 250, % 200, , % -3.1% 18% of 18% of 28.1% 17% of 8.5% 13% of 17% of 8.6% 16% of 16% of 14% of 3.9% 17% of -13.0% 17% of 15% of 21.5% 18% of 2.7% 19% of 12% of 18% of 100,000 50,000 0 Nov Dec Jan Feb Mar Prev 5 Winter Avg Pwr W15_16 Pwr W16_17 Pwr Prev 5 Winter Avg Non Pwr W15_16 Non Pwr W16_17 Non Pwr 21

22 Mdth/d Zones M2/M3 Top 25 Days Texas Eastern Transmission, L.P W14/15 W15/16 W16/17 22

23 Dth Zone M2/M3 Power Load Demand vs EHDD Texas Eastern Transmission, L.P. 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , , EHDD 1415 Winter 1516 Winter 1617 Winter Curve Fit (1415 Winter) Curve Fit (1516 Winter) Curve Fit (1617 Winter) 23

24 Supply Diversity (MDth/d) Texas Eastern Transmission, L.P. Nov 13 Mar 14 Nov 14 Mar 15 Nov 15 - Mar 16 Nov 16 - Mar 17 TE Marcellus Production 3,011 4,344 5,524 5,612 REX - Clarington Lebanon Area TETLP Mainline (traditional) 906 1, from Access Area from Access Area NJ/NY Hanover TETLP Market Zones Supply 4,526 4,526 7,108 6,919 24

25 Dth Appalachian Shale Supply Growth Texas Eastern Transmission, L.P. 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, /1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/

26 Dth Berne Station Load Duration Apr - Mar Texas Eastern Transmission, L.P. 2,000,000 1,500,000 1,000, ,000 C16_17 C15_16 C14_15 C13_14 Traditional South-to-North 0-500,000-1,000,000-1,500,000 Reverse Flow North-to-South -2,000,000-2,500,000-3,000,000 Days 26

27 Dth Egypt Station Load Duration Apr Mar Texas Eastern Transmission, L.P. 1,500,000 1,000, ,000 C16_17 C15_16 C14_15 C13_14 Traditional South-to-North 0-500,000 Reverse Flow North-to-South -1,000,000-1,500,000 Days 27

28 Dth Opelousas Station Load Duration Apr - Mar Texas Eastern Transmission, L.P. 1,000, ,000 C16_17 C15_16 C14_15 C13_14 Traditional South-to-North 0-500,000 Reverse Flow North-to-South -1,000,000-1,500,000 Days 28

29 Effects of non-rateable flow Bill Whaley Vice President, Gas Control 29

30 April 6 Gas Day

31 April 6 Gas Day

32 April 6 Gas Day

33 April 6 Gas Day G-System Linepack Bottom of G-System Pressure Burrillville to EOL Flow 4AM 11AM 5PM

34 New Pipeline Development Nikki Bruno Business Development Representative 34

35 Growth Now and in the Future Supply to Markets Power Generation Demand Market Growth Northeast & New England Strong throughput throughout winter seasons Market expansion opportunities to serve LDCs, power generators and industrial customers Marcellus/Utica Marcellus averaging 5.5 Bcf/d of flows directly into Texas Eastern By 2017, Spectra Energy will have capacity for transport of ~9.5 Bcf/d out of the basin LNG & Mexico Exports Power Generation Southeast & Gulf Coast Significant incremental growth from power generation coal conversions Gulf Coast regional demand projected to increase 19 Bcf/d by 2025

36 Execution Projects on Tract Atlantic Bridge Enbridge is executing on ~$6B of U.S. natural gas pipeline projects Valley STEP Crossing Stratton Ridge Gulf Markets Expansion NEXUS Lebanon Extension Access South Dawn Hub TEAL Greenfield pipeline Adair Southwest PennEast Sabal Trail Bayway Lateral Project Est. CapEx ($MM) In-Service Gulf Markets* 150 4Q16/2H17 Sabal Trail (1) 1,600 1H17 Atlantic Bridge 500 2H17 2H18 NEXUS (1) 1,100 2H17 TEAL 185 2H17 Access South, Adair Southwest & Lebanon Extension 450 4Q17 STEP 140 2H18 PennEast (1) 120 2H18 Bayway Lateral 30 1H18 Valley Crossing 1,500 4Q18 Stratton Ridge 200 1H19 in Execution ~$ 6,000 * Partial in-service (1) Spectra Energy s expected portion

37 AIM Project Successful Execution in New England

38 AIM Project Successful Execution in New England

39 New Infrastructure is Needed Meeting New England and Atlantic Canada Demands Declining Supplies PORTLAND Algonquin Expansions BOSTON Declining Supplies Expansion needed to move abundant, cheap shale gas supplies to meet New England and Atlantic Canada market demands Will help to alleviate pricing volatility during winter months in New England Henry Hub Texas Eastern M3 AGT Citygates Winter Average Daily Pricing (Nov.1 Mar. 31) $3.01 $2.93 $4.76 New Regional Supplies NEW YORK Winter Top 20 Days Average Daily Pricing $3.59 $4.15 $8.45

40 Atlantic Bridge Project Scope Facilities Provides a physical connection to abundant, economic supplies of natural gas between AGT shale supplies and northern New England and Atlantic Canada markets for the first time and helps shippers diversify away from declining Canadian supply 132,705 Mcf/d Algonquin system expansion Lift and replace of 6.4 miles of 26 pipe with 42 pipe in New York and western Connecticut, horsepower additions at Oxford and Chaplin compressor stations, installation of greenfield compressor at Weymouth, MA and modifications at six meter stations Project Timeline Increased capacity satisfies local distribution and industrial customer demand in New England and Atlantic Canada Received FERC Certificate January 2017 Partial in-service in November 2017 with full in-service in 2018

41 Access Northeast Algonquin and Maritimes systems directly connect to 60% of ISO- NE s gas-fired generators New gas-fired generators totaling ~2,570 MW attaching to Algonquin by 2019 Market area LNG peak shaving Texas Eastern Algonquin NEW YORK Maritimes & Northeast PORTLAND BOSTON With increasing reliance on natural gas for electric generation, the Access Northeast project provides a critical opportunity to improve New England s future energy reliability, cost volatility and competitiveness Project Scope ~$3 billion (100%); 900 MMcf/d Joint development with Eversource and National Grid Project Need New England electric power market continues to become more gas dependent Natural gas generation has increased from 15% to 50% market share since 2000 Likely to rise further with Brayton Point, Pilgrim retirements, new gas-fired facilities coming on line Additional natural gas infrastructure is needed to serve growing gas generation Access Northeast is best positioned to meet growing natural gas demand needs in New England

42 Northeast and New England Development Opportunities Connecting cheap supply to meet the market demands of the northeast region Connecting Northeast Marcellus to Markets Expansion opportunities to serve Texas Eastern M3 and Ramapo/Mahwah to Algonquin expansions Expanding Market Deliveries Transportation for power plants Incremental city gate deliveries

43 APPENDIX

44 Access South, Adair Southwest & Lebanon Extension Projects Delivering Appalachian shale supply to markets in the Midwest and Southeast Lebanon Extension Kosciusko Lebanon Access South Adair Co. KY Uniontown Adair Southwest Combined Projects Scope Capacity: 622 MMcf/d Access South 320 MMcf/d Adair Southwest 200 MMcf/d Lebanon Extension 102 MMcf/d CapEx: $450MM Timeline Received FERC Certificate December 2016 On target for in-service 2H17

45 Gulf Markets Expansion & Stratton Ridge MARCELLUS Expanding Texas Eastern to serve Gulf Coast LNG markets UTICA M2 Gulf Markets Under construction Phase 1 in-service Phase 2 target in-service 3Q17 Stratton Ridge M1 Gulf Markets Gulf Markets Transporting Texas Eastern M1, East Texas and South Texas gas to Freeport LNG s Stratton Ridge storage facility Expect 1H17 FERC filing Targeting 1H19 in-service Project Volume (MMcf/d) Target In-Service Gulf Markets /17 Stratton Ridge 322 1H19

46 NEXUS & TEAL QC Connecting Marcellus and Utica supplies to LDCs, power generators and industrials in Ohio, Michigan, Chicago and Ontario MI NEXUS Dawn Hub DETROIT OH TEAL Parkway Texas Eastern TORONTO MARCELLUS / UTICA SUPPLY ON U.S. Northeast PA NY Project Scope NEXUS 1.5 Bcf/d design capacity, ~255 miles, 36 pipeline; $2.2B (50% ownership) TEAL 950 MMcf/d expansion of Texas Eastern and reversal of OPEN line to deliver into NEXUS; $184MM (100% ownership) Supply Sources Kensington Processing Plant, Tennessee Gas, Texas Eastern Pipeline Interconnects DTE Gas, Vector, ANR, PEPL, Great Lakes Transmission, Union Gas, Texas Eastern, Tennessee Gas Project Status Filed FERC application November 2015 Received Final EIS from FERC November 2016 Expected in-service November 2017

47 Northeast Expansions on Texas Eastern MARCELLUS PennEast PA MD NY Marcellus to Market NJ Greater Philadelphia Expansion Bayway Lateral Continued opportunities on Texas Eastern to link supply to growing Northeast markets In Execution Bayway Lateral 300 MMcf/d lateral expansion to serve Bayway Refinery & Linden Cogen; in-service January 2018 PennEast 1.1 Bcf/d greenfield project connecting Northeast Pennsylvania supply with New Jersey and New York markets; in-service November 2018 In Development Marcellus to Market Texas Eastern expansion up to 200 MMcf/d from Lambertville; in development Greater Philadelphia Expansion Project incremental lateral capacity to serve growing power, industrial and LDC market; in development

48 PennEast & Texas Eastern Marcellus to Market Project Providing direct connection to abundant, affordable Northeast Pennsylvania Marcellus supplies with growing Texas Eastern M3 market Project Scope PennEast will provide an incremental 1.1 Bcf/d of capacity to Lambertville Texas Eastern Capacity: 125,000 MMcf/d Project Status PennEast filed FERC Application Sept 2015 PennEast received FERC FEIS April 2017 PennEast expects to receive FERC Certificate 3Q17 In-service 2H18 Preliminary Facilities Marcellus to Market will consist of Texas Eastern piping and meter station modifications to create firm capacity from Lambertville to the west

49 Philadelphia Lateral Expansion Provide existing Philadelphia Lateral shippers with additional capacity to meet their growth needs Connect Appalachian supplies to the growing Greater Philadelphia power generation and industrial markets Market LDC growth Power Generation/Industrial/Refinery/LNG Project Timeline Facilities Binding Open Season: 2017 Target In-service: 2020/2021 Facilities to be determined based on ultimate project scope. Likely take up and relay of 22 miles of pipe (with larger diameter pipe) from Eagle to Chester Junction, plus additional work downstream of Chester Junction. Potential for receipt interconnects with Transco and Columbia

50 Sabal Trail & Loudon Serving Southeast power generation growth Loudon Loudon East Tennessee expansion to serve a power plant conversion from coal to natural gas In-service Sept 2016 Sabal Trail Sabal Trail 515-mile greenfield pipeline to provide incremental supply to FPL and Duke Energy Joint venture with NextEra and Duke Energy Under construction Phase I in-service end of 2Q17 Project Volume (MMcf/d) Target In-Service Loudon 40 Sept 16 Sabal Trail 1,075 2Q17

51 Valley Crossing Pipeline & Texas Eastern STEP TEXAS EASTERN Nueces VIDOR South Texas Expansion Project STEP New intrastate pipeline to export reliable natural gas supply to meet Mexico s growing electric generation needs Texas Eastern mainline reversal Customer Comision Federal de Electricidad Capacity 400 MMcf/d FERC filing target 4Q16 Expect FERC certificate 4Q17 In-Service 4Q18 Brownsville Valley Crossing Greenfield intrastate, 170 miles of 42 and 48 pipeline, 258,000 HP, 8 receipt meters, export meter to MX Infraestructura Marina del Golfo Customer Comision Federal de Electricidad Capacity 2.6 Bcf/d Mainline, 5 Bcf/d Nueces Header CapEx $1.5B Commence construction 1H17 In-Service 4Q18

52 Break 15 minutes

53 NGA Update Tom Kiley President & CEO, Northeast Gas Association 53

54 May 24, 2017 Chatham, MA Regional Gas Market Update Presentation to: Enbridge Customer Group Meeting Tom Kiley Northeast Gas Association

55 Objective NGA S ANTITRUST COMPLIANCE PROCEDURES Adopted by the NGA Board of Directors on June 4, 2003 The Northeast Gas Association (NGA) and its member companies are committed to full compliance with all laws and regulations, and to maintaining the highest ethical standards in the way we conduct our operations and activities. Our commitment includes strict compliance with federal and state antitrust laws, which are designed to protect this country s free competitive economy. Responsibility for Antitrust Compliance Compliance with the antitrust laws is a serious business. Antitrust violations may result in heavy fines for corporations, and in fines and even imprisonment for individuals. While NGA s attorneys provide guidance on antitrust matters, you bear the ultimate responsibility for assuring that your actions and the actions of any of those under your direction comply with the antitrust laws. Antitrust Guidelines In all NGA operations and activities, you must avoid any discussions or conduct that might violate the antitrust laws or even raise an appearance of impropriety. The following guidelines will help you do that: Do consult counsel about any documents that touch on sensitive antitrust subjects such as pricing, market allocations, refusals to deal with any company, and the like. Continued on NGA web site 2.

56 Natural Gas Service Areas 3.

57 Topics Natural Gas Market Growth Regulatory Issues Environmental Issues Pro-Gas Coalitions & Messaging 4.

58 Natural Gas Market Growth 5.

59 Gas Customer Base in Region Continues to Grow Natural Gas added over 1 million new household customers in last 8 years. Of that, New England added 350,

60 Gas Remains Leading Fuel for Home Heating, but Some legislative proposals for all renewables and backing out of fossil fuels for residential heating and transport by 2035? 2050? Concept being floated by Regulatory Assistance Project (RAP): Beneficial Electrification RAP, Jan. 2017: One of the dramatic changes underway is environmentally beneficial electrification, a term that describes the electrification of end-uses that have historically been powered by fossil fuels (natural gas, propane, fuel oil, or gasoline), in order to reduce costs as well as greenhouse gas and other emissions. Examples include electrification of vehicles, space heating, and water heating. FYI, RI PUC & RI Energy Office holding technical meetings this spring on future of RI s electric grid exploring beneficial electrification for heating as part of this. 7.

61 Growing Role for Gas in Power in Northeast in Last Decade Chart: U.S. EIA, Natural Gas was 23% of total regional electric mix in 2006 increased to 41% in

62 Gas Remains Leading Fuel for New Power Gen, but State policy preference for renewables: NY s Clean Energy Standard MA 2016 legislation on hydro, offshore wind 3-state clean energy RFP Importance of clearing capacity auction in New England (e.g., Killingly). ISO-NE notes concerns over looming unit retirements, but without clearing capacity auction CT Siting Council, in May 2017 decision against proposed gas plant in Killingly (KEC): ISO-NE has effectively determined that KEC is not required for resource adequacy, at least through the Capacity Commitment Period (CCP) of

63 Regulatory Issues 12.

64 New Administration, New Appointments, New Direction FERC nominations, on the way to a quorum: Trump Administration: pro-energy development, pro-pipeline, pro-reducing regulatory overhang. Neil Chatterjee, energy policy advisor to Sen. Mitch McConnell Robert Powelson, Commissioner (and former Chairman), PA PUC Powelson is currently President of NARUC if he is confirmed to FERC, the new President of NARUC would be Commissioner John Betkoski of CT PURA But also engendering pushback with energy infrastructure on front line. 25.

65 NARUC Task Force Looking at Gas Access NARUC set up new Natural Gas Access and Expansion Task Force in April. Charged with developing best practices and recommendations regarding natural gas service for underserved and unserved areas of the country, including, but not limited to rural communities. Co-chair is Commissioner John F. Coleman Jr. of PA PUC. MA DPU Commissioner Robert Hayden is a member. 13.

66 Delays & Siting Challenges at State & Local Levels Federal approval process remains consistent, but region is seeing increasing delays at state (and local) level regarding final environmental permitting. NY, MA are among the most challenging regulatory environments for new project development in the nation. Local opposition to projects on the rise and not just to natural gas. 14.

67 Operator Qualification: Testing Protocol Upgrades Security breaches of online OQ exams in NGA program reported to NYS DPS in Dec Program suspended in NY State in late Dec. In Jan. 2017, NGA temporarily suspended its online testing in the entire region. Later that month, NGA introduced new online testing procedures, enhanced security protocols, and entire suite of updated tests. Long-term solution being proposed to NGA Board of Directors in next month. 15.

68 Environmental Issues 16.

69 Environmental Issues GHG, Methane Charts: MA DEP, GHG Emissions Inventory, , released March 2017 Methane emissions from natural gas systems in MA have declined by 67% since 1990, according to MA DEP s recent GHG inventory report. Natural gas sector in MA = 1.1% of total state GHG emissions (it was 2.6% in 1990). 17.

70 Gas Sector Emissions Declining, but Utility methane emissions are key local and state issue for activists and many legislators. LAUF (lost and unaccounted for gas) and methane are the 2 leading gas issues for the new Senate Chair of the Energy Committee in MA. 18.

71 Pro-Gas Coalitions & Messaging 19.

72 Coalitions & Advocacy American Gas Association (AGA): Your Energy is about ensuring you and your community have the energy you need while also protecting the environment. We know that natural gas gives us a better life and is helping solve climate change. American Petroleum Institute (API): Natural Gas Solutions campaign with focus on increasing pipeline infrastructure in New England. U.S. Chamber of Commerce s Institute for 21 st Century Energy: Report addressing What if pipelines aren t built into the Northeast? Business Council of New York State: New Yorkers for Affordable Energy campaign announced in last month. 20.

73 NGA & MA LDCs: MA Gas Outreach Initiative Focus on consistent industry messaging on leaks, environmental improvements, economic contributions of gas system. Op-eds published. Industry report being released in coming weeks. Gas Awareness Day in late June in Boston. 21.

74 Getting the Message Out Massachusetts families count on natural gas million homes in MA use natural gas 200,000+ heating customers have converted to natural gas since % Of residences heat with natural gas 10 s of 1000s more use gas for basic life necessities Natural gas utilities have experienced consistently expanding consumer demand, with annual growth around 1 percent Sources: Denterlein, McMahon Communications; chart by McMahon 22.

75 Questions?

76 Closing Bill Yardley President, Gas Transmission