Leveraging Market Input in Energy Policy

1. Leveraging Market Input in Energy Policy Air & Waste Management Association Annual Seminar Dennis Elsenbeck Director, Stakeholder Engagement and Policy

2. Engaging in the Energy Landscape Social & Economic Pressure on Central Power Plants Electric Transmission Congestion Natural Gas Transmission Access • Reforming the Energy Vision (REV) • Alignment with Connect21 • Demonstrations • Fruit Belt Neighborhood Solar • Potsdam Resiliency • Clifton Park Convenience 50% Renewable Energy Target by the 2030

3. Regulatory and Legislative • Reforming the Energy Vision (PSC) • Defining the “Utility of the Future” • Utility acts as a platform for products and services • Promote Renewable Energy • Move from Centralized Generation • Distributed System Implementation Plan • Renewable Supply 50/2030 (NYS) • Currently we are Supply Rich • What Drives the Model – Economic Sustainability • Roof Top versus Large Scale

4. Current Utility Structure Privately Held Utility Ownership Market

5. What is REV? • DSIP • Physical Planning • Utilities ID Immediate System Changes • Includes AMI • Filed – 6/30/205 • BCA Framework • Economic Framework • Alternative Investments • Economic & Environmental • Filed – 6/30/16 • NMPC Rate Case • Filing 4/2017 • Incorporates Track 2 • Includes DSIP Costs • Includes New Earnings Opportunities • REV Demos • Test Business Models • NG has Four Demonstrations • Filed and in Development • Business Transparency • REV Track Two • Reform Utility Business Models • Revenue Streams to Align Financial Incentives with Optimizing DERs • Order 5/19/16 • REV Track One • Utility as a “Distribution System Platform (DSP) Provider” • Facilitate DERs • Order – 2/26/15

6. BNMC 2011 Energy Plan Mutually define and implement the global standard for an efficient, modern, high-quality, and customer-driven energy platform Supporting pillars Long-term financial strength for all partners Solutions tailored to the local assets and needs Holistic, systems approach Partnership and collaboration Ability to replicate elsewhere Sustainability innovation Opportunity areas Cost-Cutting Energy Efficiency Foster Local Economic Growth Alternative Energy & Transportation Community Learning Hub Health + Energy Innovations

7. BNMC Energy Activity to Date Distributed System Platform Demonstration eThink Energy Center Stage 2 Micro Grid Study Application Installed Solar Potential Parking Lot Solar Project 25 Electric Vehicle Charging Stations Installed Campus-wide Fruit Belt Neighborhood Solar Demonstration Off Grid Wind & Solar Lighting Bike & Car Share Program In Place Grid Modernization Study In-Progress

8. National Grid REV Demonstrations Buffalo Niagara Medical Campus Determine Market Value Value of Feeder Focused? • Avoided Infrastructure • Capacity & Quality Relief • Promote Underserved Market • Impact on Bad Debt Value of “D”? • DSP – Local ISO • Infrastructure Offset Price • Distributed Resource Flex • Blue Sky & Resilience Fruit Belt “Neighborhood” Solar • LMI • Utility Ownership • Multiplier • System Impact BNMC DSP • Value of “D” • Unlocking DER Potential • Test Platform of “POC” • Vendor Partner Alignment

9. Focused Feeder Test

10. The Role of the DSP and DSIP • Consider diverse and distributed energy resources • Coordinate with ISO and bulk systems • Integrate market and operations drivers in forecasts Integrated System Planning • Operate in a secure, reliable and resilient manner • Increase system flexibility in a dynamic environment • Implement economic and energy efficient solutions DSP Grid Operations • Provide rich information for consumers and suppliers in a transparent fashion • Utilize new technologies and develop innovative products and services Market Operations

11. BNMC “Distributed Energy Resources”

12. DSP DemonstrationPrice Event Interaction

13. DSP DemonstrationServices

14. Campus Institutions BNP Energy Policy Advocacy City of Buffalo Stakeholder Management Plan Allentown Neighborhood NY Prize Fruit Belt Neighborhood BNMC Market Input End Use Participants REV Demo Public Officials Grid Mod Study NG Innovation Plan BNMC energizeBNMC National Fuel Thermal Load Study Stakeholder Feedback Loop Community Groups Vendor Partners

15. National Grid REV Demonstrations Determine Market Value Potsdam Clifton Park Value of Resiliency? • Residential • Small Business • Municipalities; Services • Large Commercial Value of Information? • 12,000 Customers • ESCo Peak Incentives • Information • Advanced Meter Functionality Resiliency • Area System Exposure • Aligned DG Assets • Community Partnership • Infrastructure Demand Reduction • Energy Insights • Smart Appliances • Peak Reward • Choice & Control

16. River Bend/South Buffalo Survey • Collaboration • UB and BNP – Survey Leads • 120 Market Participants • Study Alignment • 3,000 Acres (River Bend is 120 Acres) • Remediated Brown Fields • Smart Growth • REDC Priority Focus • External Validation • The Voice of the Market

17. River Bend/South Buffalo Survey Forecasted Demand Future state (3-5 yrs) Leverage Infrastructure Municipalities & Utilities Current Electric Design $75 Million Employ Integrated Resource Planning Renewable Energy’s Role 32 mW of Installed Wind 6 mW of Planned Solar Net Zero Building 175 KW 9 KW 673 KW 35,000 KW 1,473 KW 10,000 KW 150% GROWTH!

18. Value of Distributed Energy Resources $ • Investment Balance • Supply • Demand • Distribution • Evolving Pricing Model • Valuation • LMP + D + E • Location Marginal Price • Value of “D” (Offset) • Value of “E” (Credit?) SUPPLY DEMAND DISTRIBUTION

19. Integrated Resource Plan“Balance! A KW by Any Other Name is a KW” Demand Demand Response Energy Efficiency Energy Management Peak Shaving Ice Storage Human Behavior Usage Pattern Vehicle of the Future Supply Central or Local Renewable Energy Source • Wind • Solar • Bio • Hydro Co-Generation • District Htg/Clg Delivery Age of Infrastructure Size to Supply Size to Consumption Prep for the Future? Overhead – Underground Voltage Diversity Reliability & Power Quality B A L A N C E Storage!

20. “Smart Planning” Power Quality • Optimize Technology • Integrated Resource Plan – REV Options • Market Driven Solutions • Sustainability Studies • Network Plans • Land Use Plans • Policy • Legislative and Regulatory • Leverage Investments • Leader in Smart Design Community Solar Car & Bike Share Storage Net Zero Building Wind & Solar DR Alternative Fuel Transportation

21. Stakeholder Plan

22. Market Input Challenge • Technology • Adaptive to New Application • Innovation • Policy • Regulation • Legislation • Who Pays? • Market Place • Market Perception • Market Acceptance • Market Demand Policy Technology Market Place

23. Leveraging an Energy Hub Regional Priorities National Grid Integrated Resource Plan Network Strategy Engineering eThink Holistic Energy Engineering Energy Advocacy Positions UB Law Energy Innovation Participants Smart Growth Integration Energy Policy Objectives Business

24. Avoiding the Wall “German cabinet puts brakes on clean energy transition” September 6, 2016 – Richard Fuchs “How Ontario’s pursuit of renewable energy broke the provinces electricity system” October 6, 2016 – Terence Corcoran “Subsidies in the wrong places skew Renewable Energy’s Power” May 3, 2016 – Joseph Aldy

25. Next Steps • Solve the Three Legged Energy Stool • Technology, Market Demand and Policy • Market need to refine its VOICE! • Co-Develop Sustainable Models • Environment & Economic Alignment • Exercise the Academic Community • Engineering, Business, Law and Environmental Schools • Develop Objective Proof Points • Leverage Available Investments!