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DUAL FUEL GENERATION CAPACITY AND ENVIRONMENTAL CONSTRAINTS ANALYSIS Interim Findings Report. Presentation to. Planning Advisory Committee March 3, 2005. Engineers Scientists Consultants. www.essgroup.com. SCOPE OF ANALYSIS. ASSESSMENT OF CURRENT CAPABILITY

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  1. DUAL FUEL GENERATION CAPACITY AND ENVIRONMENTAL CONSTRAINTS ANALYSIS Interim Findings Report Presentation to Planning Advisory Committee March 3, 2005 Engineers Scientists Consultants www.essgroup.com

  2. SCOPE OF ANALYSIS • ASSESSMENT OF CURRENT CAPABILITY • Determine dual fuel generating capacities and limitations • Consider geographic locations, seasonal limitations, and oil storage capacities • CONSTRAINTS ANALYSIS • Determine regulatory, design, and operating constraints on dual fuel operation • Assess primary drivers leading to current conditions • EXPANSION STRATEGIES AND FEASIBILITY ANALYSIS • Identify strategies that may increase dual fuel capabilities • Assess feasibility of technical, regulatory and policy alternatives • Facilitate collaborative process with State Environmental Agency Staffs

  3. TASK 1: CAPABILITY ASSESSMENT • Universe of generators identified using ISO-NE CELT Report • Units classified by state, claimed fuel type(s), & capacity • Gas Only, Oil/Gas, Oil Only, Other (coal, nuclear, MSW, renewables) • Generator air permits obtained from agencies to identify limits • Units summarized by state, fuel type, and permit limits • Gas Only (no oil firing allowed by permit) • Gas w/oil back-up (oil firing limited by permit) • Oil Only w/limitations (annual operating limits in permit) • All other (oil w/o limits, coal, nuclear, renewables, MSW/TDF) • Initial Summary of on-site oil storage capacity • Determine generating capacity with quantity stored on site

  4. CAPABILITY ASSESSMENT – FINDINGS • Winter Capacity by Fuel Type (MW represent permitted capacity) • Total Capacity ~33,800 MW • Gas Only = 19% (6,300 MW) • Gas w/ limited oil back up = 21% (7,200 MW) • Oil Only w/ limitations = 2% (550 MW) • Oil w/ Gas = 12% (4,150 MW) • Oil unlimited = 11% (3,900 MW) • All other = 35% (11,700 MW) • Data shows that 40% of winter generating capacity (13,500 MW) is primarily dependant on natural gas

  5. CAPABILITY ASSESSMENT – FINDINGS • Regional Considerations (Permitted MW) TOTAL PORTION OF CAPACITY RELIANT ON GAS STATECAPACITYGAS ONLYGAS W/LTD OIL%TOTAL MA 14,700 MW 3,300 MW 2,900 MW 42% CT 8,200 MW 250 MW 2,000 MW 27% NH 4,150 MW 535 MW 800 MW 32% ME 3,650 MW 1,400 MW 350 MW 48% RI 2,050 MW 850 MW 1,200 MW 100% VT 1,050 MW 0 MW 0 MW 0%

  6. CAPABILITY ASSESSMENT – FINDINGS • Regional Considerations (Permitted MW Percentages) %NEPOOL PORTION OF CAPACITY RELIANT ON GAS STATECAPACITY%GAS ONLY%GAS W/ LTD OIL%TOTAL MA 44% 22% 20% 42% CT 24% 3% 24% 27% NH 12% 13% 19% 32% ME 11% 38% 10% 48% RI 6% 41% 59% 100% VT 3% 0% 0% 0%

  7. CAPABILITY ASSESSMENT - FINDINGS • Dual Fuel Units – Permit Limitations on Oil Firing • 7,200 MW of gas-fired capacity has limits on firing liquids • 270 MW allowed between 2,300-3,800 hours per year (4%) • ½ in MA, ½ in RI • 1,400 MW allowed up to ~ 2 months per year (20%) • 80% in RI – allowed only when gas is “not available” per air permits • 4,800 MW allowed 30 days or less per year (67%) • Mostly CT and MA units • 1,350 MW in CT allowed only when gas is “not available” per Siting Council Certificates • Oil use is predominantly discretionary (i.e. not limited by season or linked to gas being “not available”) • On-Site Oil Storage Capacity • 3,900 MW of dual fuel units have less than 2 days of oil firing storage capacity on site (54%)

  8. CAPABILITY ASSESSMENT - FINDINGS • Historical Oil Firing Data for Dual Fuel Units • 2002 = 933 MWHr • 2003 = 65,351 MWHr • 1st Quarter 2004 = 364,415 MWHr • Q1 2004 oil firing represents 5-fold increase over all of 2003 and 8% of annual permitted oil firing capacity of all dual fuel units • Nearly all dual fuel facilities permitted to fire oil have done so in the past 2 years • Prospective oil firing considerations • Interest in expanding oil firing capability demonstrated by: • RI facilities seeking clarification and/or elimination of gas “not available” permit clause • CT facilities seeking Siting Council approval to eliminate gas “not available” condition from their Siting Council Certificate. • 2 or more facilities seeking permit changes to increase allowable oil firing hours

  9. CONSTRAINTS ON DUAL FUEL CAPACITY Air Permitting (State, Federal PSD/NSR) Ambient Impacts BACT/LAER Water Use Withdrawal & Discharge Siting Boards/Councils Resource protection issues Transportation impacts Local Approvals & Hearings On-Site Technical Issues Impacts on equipment Staffing Lead time Delivery Dual Fuel Availability Interruptible Supply Low/Very Low Sulfur Distillate Off-site Storage Capacity Infrastructure/Transportation Economics Heat rates & spark spread Maintenance Plant Modifications

  10. EXPANSION STRATEGIES & FEASIBILITY ANALYSIS • Near-Term (2004/2005 Heating Season) • ISO Cold Weather Event Operating Procedure • Regional framework for emergency provisions under severe weather & strained capacity (modeled under Mass 7.53 rule) • Procedures under individual state statutory authorities for emergencies • Evaluation of generation use and concerns • Mid-Term • Seek increased dual fuel capacity and capability • Generation decision • Some permitting already in process • Long-Term • Engagement & Analysis of oil suppliers • Storage capacity, contracts, fleet & staff • Development of Regional Generation Rules • Banking programs, permit modification processes • Diversification of Supply and Demand • Distributed Generation, Demand Response, Alternative energy sources

  11. EXPANSION STRATEGIES & FEASIBILITY ANALYSIS • Next Steps • Development of Policy & Implementation tools w/ regulators for 2004/2005 heating season (procedures under statutory authorities for emergencies) • Assessment of generators’ use and concerns • Collaborative development of longer term approaches to regulatory issues

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