AGT Assessment of Gas Quality for Interchangeability March 8, 2007

1. AGT Assessment of Gas Quality for InterchangeabilityMarch 8, 2007 Gregg McBrideVice President, Rates and Economic Analysis

2. Purpose & Agenda Develop a gas quality specification which reasonably facilitates and accommodates regasified LNG as a source of supply for the markets served, while not being unduly burdensome to any customers affected by regasified LNG. • Maximize Supply Options for Customers and Markets. • Minimize Operating and Cost Impacts from Changing Supply • Implement Tariff Modifications in a Manner that Facilitates Accomplishing Objectives 1 and 2. Agenda • Interchangeability Implementation Process • GTI Interchangeability Studies • Strawman – Proposed Tariff Considerations

3. 3 2 4 5 1 Identify “Sensitive Receptors” Understand Historical Supply Settlement Agreement Understand “Zone of Influence” Assessment - Establish interchangeability Tariff parameters - Establish most economical retrofit strategy , schedule & cost sharing mechanism - Work with Pipelines to establish system adjustment gas Work with Pipelines and Suppliers Establish reasonable supply compositions - Assess sensitive equipment - Establish extent of retrofits - Negotiate fixes - LDC’s catalog potential sensitive customer equipment Interchangeability Implementation Process 06/15/2006 GTI Collaborative 12/01/2006 GTI 1st Draft Report 03/08/2007 Assessment Mtg. 02/02/2006 Historical Supplies 03/07/2006 Add. Flow Studies 04/11/2006 Stakeholder Issues 05/04/2006 Technical Data Source: B. Wilson, Keyspan

4. Assessment of Gas Quality for Interchangeability • Objective/Deliverables • Given a list of potentially sensitive natural gas end use applications and a survey of possible liquefied natural gas (LNG) imports, estimate the range of gas quality that would or would not require a specific retrofit and the estimated per-unit cost of such retrofit. The natural gas compositions in the report are representative of the possible LNG imports by Suppliers, and the equipment are the potentially sensitive end uses identified by the Northeast Stakeholders Group. • Research Contractor:Gas Technology Institute • Stakeholders: • Algonquin Gas Transmission, LLC • Bay State Gas Company • BP Energy Company • Connecticut Natural Gas Corporation • Consolidated Edison Company of New York, Inc. • Distrigas of Massachusetts, LLC • Excelarate Energy, L.P. • Keyspan Energy Delivery Companies • Orange and Rockland Utilities, inc. • Public Service Electric and Gas Company • Repsol Energy North America Corporation • Shell NA LNG LLC • The Southern Connecticut Gas Company • Virginia Power Energy Marketing, Inc. • Weaver’s Cove Energy, LLC • Yankee Gas Services Company

5. Assessment of Gas Quality for Interchangeability • Three classes of natural gas end use were identified in the assessment: • power generation • process heating • use as feedstock • Each had particular performance needs, and were further classified into equipment that are not likely to require retrofit, equipment that may require retrofit, equipment that may require an operational change, and equipment for which gas quality variation is not well known. • The assessment comprises of six total documents: • Executive Summary • Properties of the Representative LNGs • Reciprocating Engines, Gas Turbines, and Fuel Cells • Feedstock Applications Including Liquefaction Facilities • Industrial Process Heaters • Appendices

6. Abbreviated Summary of GTI Study • Sensitive end users of natural gas included: • The liquefaction process for peak shaving facilities, • Some utility-scale gas turbine burners, • Older reciprocating engines without knock sensing or newer reciprocating engines with high BMEP and no emissions control. • Those systems which cannot accommodate a gas supply with wider variability than has historically been present could be retrofited or replaced at some cost. • Process heating end users should to be aware of the changes to gas quality so that they can adjust their air-to-fuel ratio to accommodate both the historical and future Wobbe Number values.

7. Strawman - Path Forward • Understand the impacts to AGT Customers based on proposed Gas Quality Tariff under consideration. • Identify Sensitive End User Data Requirements • Equipment • Age • Location • Flow volume • Determine Cost Impacts • End Users • Suppliers • Proposed Tariff Language Action Item: Provide Geographically accurate AGT Map with delivery point names/cities for placement of end user facilities. Out to attendees first of next week (NLT 13-Mar-07)LDCs to place sensitive receptors on map with data items from data requirements above.Breakout volumes by Winter/Summer seasons.Rate of Change after volume information is obtained and plotted.Turnaround time for data: two weeks.Looking to provide GTI the data 7 to 10 days after data is received.

8. AGT Gas Quality Tariff Consideration

9. Figure 16. Wobbe Number vs. HHV Wobbe Number vs. HHV for AGT and LNGs LNG Supplies compared to NGC+ Recommendations: • Interchangeable: 26% • Interchangeable w/2% Stab. 74% • Non-Interchangeable: 26% • Interchangeable w/4% Stab. 92% • Non-Interchangeable: 8% Source: Assessment of a Gas Quality Survey for Interchangeability: Properties of the Representative LNGs, February 2007 DRAFT

10. Acceptable LNG Sources (green & orange) LNG Supplies compared to NGC+ Recommendations and AGT Considerations: • Interchangeable: 26% • Interchangeable w/2.5% Stab. 82% • Non-Interchangeable: 18%

11. AGT Assessment of Gas Quality for Interchangeability Meeting March 8, 2007