T he C onnecticut E nergy A dvisory B oard

1. The ConnecticutEnergyAdvisoryBoard Mary J. Healey Vice Chair, CEAB CT Consumer Counsel Connecticut Power & Energy Society March 13, 2006

2. The Connecticut Energy Advisory Board CEAB Purpose • Mission: CEAB’s primary goal is to encourage competing energy solutions and to provide the opportunity to review multiple energy solutions simultaneously • CEAB is responsible for identifying and coordinating state energy needs & recommending strategies & solutions to meet those needs in a manner that is not only environmentally responsible, but also meets reasonable cost & reliability criteria. • CEAB Guiding Principles • Citizens and businesses in CT must have access to a safe, affordable, diverse and reliable energy supply. • CT’s policy makers must act in forums where the state's energy interests can be advanced. • CT’s policy makers must act in a coordinated fashion on both a state & regional basis to address energy issues using CEAB's energy plan as a blueprint for action.

3. The Connecticut Energy Advisory Board Planning Entity per PA 03-140 New Role for CEAB – to review/ evaluate proposed energy solutions CEAB membership changed – independent, restricted membership by parties with interest – (ex. lobbyists/ project developers) Independent funding – through Combined Public Benefits Charge funded by ratepayers Primary duties – develop a state energy plan; develop preferential criteria for evaluating solutions for energy needs

4. The Connecticut Energy Advisory Board Role in State Energy Planning Primary duties – develop a state energy plan; develop preferential criteria for evaluating solutions forenergy needs identifying & coordinating state energy needs recommending strategies & solutions to meet those needs CEAB Preferential Criteria - Balance 5 Overall Policy Goals: Energy (reliability) Economics (costs) Environment (air and water quality) Energy Efficiency/Conservation/Demand Response Quality of Life (local impact concerns) Send signals to energy market/planners - on what preferred features/characteristics the solutions should fulfill

5. The Connecticut Energy Advisory Board Application Review Process Triggered by two different scenarios: Reactive RFP Activated in response to an energy project application filed with CT Siting Council CEAB is then required to issue an RFP seeking an alternative solution(s) Proactive RFP CEAB determines that an energy-related need or problem exists for which it will solicit a possible solution(s) CEAB will then issue an RFP requesting that the parties respond with a possible solution(s)

6. The Connecticut Energy Advisory Board Review Process (cont’d) In both scenarios – the range of solutions may include transmission, electric generation, demand-side changes, any other strategy or combination of strategies. Multiple responses to an RFP – will be examined simultaneously & reviewed at the macro-level against the Preferential Criteria Different strategies or combinations of strategies - will be considered relative to each other

7. The Connecticut Energy Advisory Board The CEAB Report Submits report to CT Siting Council - with commentary on each proposal’s ability to meet energy goals/needs Includes any information obtained through the RFP process - and may also identify issues requiring further review Serves as an advisory document - which will provide information to the CSC for consideration in its review of energy projects, and also inform other states agencies of cognizance Energy project that receive CSC’s approval - will continue to be required to receive approval by the appropriate state regulatory agencies (ensuring all applicable statutory & regulatory requirements are satisfied)

8. The Connecticut Energy Advisory Board CT Policy Approach to Improve Electric System AAC Energy Independence (Public Act 05-1/June Special Session) Basic concept – unique hybrid approach…state is catalyst for market to respond directly to identified needs Four basic strategies promoted: 1) Customer-side/ Grid-side distributed generation 2) Incentives for other new generation (capacity contracts) 3) Demand side resources – demand response & EE 4) Rate changes: New C&I rates – Time-of-Use/ TOU (1/1/07); voluntary interruptible or load response (6/1/06) New seasonal rates – for all users (4/1/07)

9. The Connecticut Energy Advisory Board REPORT CEAB’s Role in DPUC Implementation of Energy Independence Act First Report (Sept. 2005) – CEAB filed a Needs Assessment on near-term FMCC reduction measures (1/1/06) Recommendations on Actions: Mitigate CT’s peak demand Preserve CT’s local generation & encourage new generation resources Improve CT’s transmission Second Report – CEAB Needs Assessment to make determination on longer-term FMCC reduction measures (Mar-Apr. 2006 RFP). AAC Energy Independence – carved out projects awarded under DPUC 2006 RFP from CEAB RFP process

10. The Connecticut Energy Advisory Board Benefits of Implementation of CT Strategies • New & upgraded facilities - will result in improvements to system reliability & efficiency • Load management & reduction will: • decrease customer & system costs • operate to cut $$$ for LMP, LICAP

11. The Connecticut Energy Advisory Board CEAB Board Members Donald W. Downes, CEAB Chairman            Chairman Commissioner F. Philip PrelliDepartment of Public Utility Control             Department of AgricultureMary Healey, CEAB Vice Chairman             John A. MengacciConsumer Counsel                                     Designee of the Secretary, OPMCommissioner Gina McCarthy  Kathleen O'Connor Dept. of Environmental Protection                   Governor's Appointee Commissioner Stephen E. Korta III James P. Sandler       Department of Transportation Appointee of Senate President Pro Tempore       Carl J. Schiessl                                                              Appointee of the Speaker of the House CEAB website:www.ctenergy.org