Champlain Hudson Power Express Project Overview Presented to

Champlain Hudson Power Express Project Overview Presented to the New York Association for Energy Economics September 27 th, 2012 1

Champlain Hudson Power Express Advancing the Application of Economics www. chpexpress. com 2

Champlain Hudson Power Express Project Overview • In-development since 2008, in-service by 2017 • 333 mile, underground 1, 000 MW High Voltage Direct Current (HVDC) proposed transmission line • Once constructed, the project will: • • • www. chpexpress. com Deliver hydro and wind power to meet the demands of a growing population and economy Create jobs and fuel economic growth Cut power costs for consumers by $650 million a year • Broadly supported • Moving steadily through regulatory process (state and federal) • Private financing ($2. 2 B) 3

Champlain Hudson Power Express Project Overview • FERC mandate to sell merchant service on the line • • • Economics of the project are based on the energy and capacity value spreads • • www. chpexpress. com 4 75% anchor tenant 25% open season auction The FERC/NYISO’s deregulated locational based marginal price (LBMP) markets send proper investment signals Project qualifies as an in-city resource for capacity sales by the controllable nature of the HVdc transmission system Strengthens the Grid • • • Relieves congestion upstate to downstate Diversifies the state fuel supply mix Delivers Black-start capability Submitted proposal into the State Energy Highway Initiative

Champlain Hudson Power Express Commercialization – Generator Push FERC Merchant Mandate • July 2010 • 75% negotiated anchor tenant • 25% open season (auction) Anchor Tenant • Hydro-Quebec • 35 -40 year agreement • Will participate in Open Season • Developing 5, 000 MW of new hydro for the export market • May provide debt for the project Open Season • Internet based auction • Third party execution and reporting to FERC • Credit worthy counter-parties with long term offtake 5

Champlain Hudson Power Express Creating Jobs and Fueling Economic Growth Construction Phase • $150 million increase in New York GDP/year • Average of 300 new direct jobs for 3. 5 years • 1, 200 indirect and induced jobs • Operational Phase New York consumers and businesses will pay less for their power, saving an estimated $650 million annually. • The state’s economy expected to grow by about $600 million per year • 2, 400 new indirect and induced jobs throughout the economy expected over 10 years • Estimated $20 million per year in property taxes to host communities 6 Note: Economic study was completed by London Economics International LLC (LEI). LEI prepared the study using Regional Economic Models, Inc. 's P 1+ macroeconomic model for the state of New York.

Champlain Hudson Power Express Delivering Clean, Reliable Power • CHPE will deliver hydro and wind power generated in Canada and the US to the New York market • Environmental benefits for the region are significant as SOx, NOx, mercury, and CO 2 emissions fall SO 2 NOX CO 2 Reduction 700 tons per 1, 000 tons year per year 3. 7 MM tons per year % of NY Market 2. 5% 9% 5% London Economics International, LLC July 2010 • Through its 40+ year life, CHPE will ensure access to reliable, low-cost electricity for New York consumers, businesses and industries • Establishment of a $117 M Habitat Enhancement, Restoration, and Research/Habitat Improvement Project Trust for Lake Champlain, Hudson, Harlem and East Rivers 7

Champlain Hudson Power Express Broad Support • Twenty members of New York Congressional delegation • NY State and NY City Economic Development Corporations • Local chapters of the International Union of Operating Engineers and Laborers International Union of North America • NY Energy Consumers Council • Coalition Helping Organize a Kleaner Environment • Three daily newspapers editorialized in support of the project • New York League of Conservation Voters 8

Champlain Hudson Power Express Broad Support – PSC Article VII Siting • Filed Joint Proposal of Settlement with the PSC Administrative Law Judges on February 24 th, 2012 • 15 months of confidential negotiations with all interested interveners and parties in the Article VII siting process • Seven State Agencies signed • • • Staff of the PSC Department of Environmental Conservation Department of State Department of Transportation Department of Agriculture and Markets Office of Parks, Recreation and Historic Preservation • Adirondack Park Agency • City of New York and City of Yonkers Signed • Riverkeeper, Scenic Hudson and Trout Unlimited Signed 9

Champlain Hudson Power Express Significant Public Outreach Transmission Developers Inc (Mar 2010) Albany; Scotia; Plattsburgh; Yonkers; Kingston Department of Energy (July 2010) Yonkers; NYC; Kingston; Albany; Glens Falls; Plattsburgh NYS Public Service Commission (Nov 2010) Yonkers; Kingston; Schenectady; Whitehall; Plattsburgh NYS Public Service Commission (April 2012) Whitehall; Catskill; Ravena; Schenectady; Haverstraw; Astoria 10

Champlain Hudson Power Express Significant Public Outreach Champlain Hudson Power Express Website • www. CHPExpress. com Department of Energy (DOE) EIS Website • www. chpexpresseis. org NYS Public Service Commission Article VII • 10 -T-0139 FERC • ER 10 -1175 -000 11

Champlain Hudson Power Express Significant Public Outreach 12

Champlain Hudson Power Express Financing by Private Sector TDI Acquired by The Blackstone Group in 2010 • New York based asset management firm, $190 Billion under management • Invests on behalf of 23 million public pensioners in the U. S. • Providing all development and project equity capital • $30 M in development spent to date Financing • Debt from shippers and export development banks • Equity from Blackstone 13

Champlain Hudson Power Express NY State Regulatory Process Moving Steadily Through the Regulatory Process 2010 Blackstone investment in TDI January 25, 2010 Mar New York State Article VII Filing Jun Jan Presidential Permit Application Filed With DOE www. chpexpresseis. or g July Public Scoping Meetings Completed Feb Public Scoping Report Complete Feb. 24, 2012 Joint Proposal of Settlement filed with NY State PSC NYS Article VII Negotiated Settlement Discussions with Parties Begin Aug July Public Comment Period Closed Feb Filing Updated To Reflect Conditions In CZMA Ruling Dec July Filing Updated To Reflect Conditions In CZMA Ruling Clean Water Act 404 Dredge And Fill/Rivers and Harbors Act, Section 10 Permit Applications Filed With Army Corps June 14 CZMA Consistency Determination 2012 Nov Dec New York State Completeness Determination NY State Issues Conditional Coastal Zone Consistency Ruling Under The Federal Coastal Zone Management Act Presidential Permit 2011 Aug Army Corps of Engineers Permitting New York State Issues Conditional Coastal Zone Consistency Ruling Under The Federal Coastal Zone Management Act Feb. 28, 2012 Application Updated To Reflect Joint Proposal

Champlain Hudson Power Express Moving Steadily Through the Regulatory Process NY State Regulatory Process Presidential Permit 2012 Apr 6 Public Hearings For Comments On Joint Proposal 2013 Jul Sep Jun ALJ hearing on Issues Environmental Compatibility And Public Need Certificate Issued Sep Dec DEIS Issued For Public Comment DEIS Issued For Governmental Review Mar 30, 2012 DOE noticed planned reopening of scoping process Mar Consultation TDI May Dec ALJ Recommendation To PSC Commission Mar Army Corps of Engineers Permitting Nov Environmental Management and Compliance Plan Filed Mar Final EIS Issued Mar Comments Draft Environmental Impact Statement (DEIS) 15 Comment Final EIS Governmental Review May June Secretary Of Defense And Secretary Of State Approval Presidential Permit Issued June 404 Permit And Section 10 Permits Issued

Champlain Hudson Power Express Engineering, Procurement and Construction Transmission Service Agreements Commercialization Schedule 2012 May 2013 Sep-Nov EPC Negotiation EPC RFP Issued Finance 2014 Q 1 Dec Notice to Proceed EPC Contract Signed Detailed inwater and land survey Jun TSA Negotiations commence Sep Project Finance Negotiations Dec Mar Jun TSA Execution Open Season Auction FERC Report Dec Finance Agreement Execution 16 Q 1 TSA Conditions Precedent Achieved

Champlain Hudson Power Express Happy to answer your Questions www. chpexpress. com 17