Black & Veatch's proprietary Energy Market Perspective is an information and planning resource for the energy industry that assesses how current energy industry trends will affect future fuel prices and asset performance. Infrastructure investors, utility leaders and asset owners use the Energy Market Perspective to support transactional due diligence, project financing, strategy development, portfolio optimization, and feasibility studies that include operating and revenue forecasts of prospective and existing assets. The Energy Market Perspective draws upon Black & Veatch’s vast knowledge and experience within the oil and gas markets, and our EPC (engineering, procurement and construction) capabilities within the power, water and telecommunications industries. We understand the costs required for new power plants – or for upgrading and maintaining existing assets – as well as transmission infrastructure and pipelines. We combine this capability with our fuel, market and regulatory consulting expertise to provide our clients with a more informed view of future energy markets. Our analysis includes: Detailed oil, coal and natural gas price forecasts, including outlooks for supply sources and infrastructure expansions. 8,760 hours per year of electric energy prices, forecasted across 71 North American zones for a 25-year study period. A forecast of Renewable Portfolio Standards compliance and generation sector carbon emissions. Cost estimates for other environmental regulations including the Mercury and Air Toxics Standard, the Cross State Air Pollution Rule Remand, the Regional Haze Program, and analysis of the effect regulations could have on energy prices. Inclusion of announced and projected retirements/additions of generating and transmission assets. The Energy Market Perspective report is issued each January and is updated in June to reflect market changes. The viewpoint of the Energy Market Perspective features analytical neutrality. The perspective is neither "conservative" nor "aggressive" to advocate certain technologies or agendas.

1. 28January2015
BLACK & VEATCH
ENERGY MARKET PERSPECTIVE
2015 OUTLOOK

2. 2
28 January 2015
About the Energy Market
Perspective (EMP)
• Semi-annual subscription-based report
(released January and July of each year)
• Gives our customers insights on industry
trends and market opportunities
• Provides fundamental capacity, energy,
emission and power fuel price forecasts for
the North American energy markets
Black & Veatch Energy Market Perspective | 2015 Outlook

3. 3
28 January 2015
Deliverables
• Key prices and metrics (spreadsheet format)
• Executive summary/briefing (PowerPoint
format)
• Methodologies and Principal Assumptions
document (PDF format)
• Access to subject matter expertise
Our customers use the EMP to plan for and
manage risks associated with the shift to
natural gas generation across North America
Black & Veatch Energy Market Perspective | 2015 Outlook

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28 January 2015
The EMP currently delivers
two cases as follows
No Carbon Regulation Case assumes a
“business as usual” approach, or no new
carbon regulations. This model accounts for
existing regional/state regulations.
Black & Veatch View models a combination of
variables needed to achieve the carbon
reduction targets of the proposed EPA Clean
Power Plan.
Black & Veatch Energy Market Perspective | 2015 Outlook
No Carbon Regulation Case:
No federal GHG emission limits or
allowances
Black & Veatch View:
Energy market models based on the
“rates” or “mass” analysis of the
proposed Clean Power Plan

5. AGENDA
• Oil’s influence on natural gas prices
• Black & Veatch View of the Clean Power Plan
 Impact on natural gas
 Evolving energy portfolio
 Impact on energy market
 Impact on natural gas infrastructure
• Q&A session
5

6. North American production
50-60% “wet” plays
Lower prices for NGLs shrink profits and lead to reduced production.
Demand becomes greater than supply.
composed of Natural Gas and Natural Gas Liquids (NGL)
oil’s influence on
Natural Gas Prices
Higher-priced NGLs provide producers with an incentive to keep drilling.
NGL prices follow oil prices. When oil prices drop, NGL prices follow.$ $
6
28 January 2015Black & Veatch Energy Market Perspective | 2015 Outlook

7. 28 January 2015
7
Henry Hub Natural Gas & West Texas Intermediate Spot Price Comparison
Black & Veatch Energy Market Perspective | 2015 Outlook

8. 28 January 2015
8
HenryHubPrice
($/MMBtu)
HeatingDegreeDays
(7-DayRollingAverage)
Black & Veatch Energy Market Perspective | 2015 Outlook
U.S. Weekly Average Heating Degree Days Compared to Henry Hub

9. 28 January 2015
9
Black & Veatch View:
North American shale
production will nearly
double by 2039
* Other includes coal bed methane,
LNG imports and SNG.
Bcf/d
Black & Veatch Energy Market Perspective | 2015 Outlook
Natural Gas Production Forecast

10. 28 January 2015
10
Black & Veatch View:
Gas demand from power
generation will increase
by ~20% (nearly 5 Bcf/d)
by 2025
* Other includes residential, commercial,
industrial and transportation demand
Black & Veatch Energy Market Perspective | 2015 Outlook
Bcf/d
Natural Gas Demand Forecast

11. 28 January 2015
11
2014$/MMBtu
Power Generation Fuel Price Forecast
Black & Veatch View:
Power Generation Fuel
Prices
• Increasing natural gas demand
for power generation will result
in higher natural gas prices
• Coal prices will remain flat as a
result of weakening demand
domestically and abroad
Black & Veatch Energy Market Perspective | 2015 Outlook

12. 28 January 2015
12
Black & Veatch View:
Baseload retirements in
the East reshaping the
energy portfolio
• 40 GW of coal to retire by 2020
in East alone
• Second wave of retirements
after 2030, mostly in the East
Capacity Retirements and Additions (Lower 48)
Black & Veatch Energy Market Perspective | 2015 Outlook
GWs

13. 28 January 2015
13
Black & Veatch View:
Wind outlook
(Nameplate capacity additions)
East: Capacity will nearly double in the next
10 years to more than 75,000 MW
WECC: More than 6,000 MW in new capacity
within next 10 years
ERCOT: Nearly 8,000 MW of new capacity
by 2025
Black & Veatch Energy Market Perspective | 2015 Outlook

14. 28 January 2015
14
Black & Veatch View:
Solar outlook
(Nameplate capacity additions)
East: Capacity will more than double by 2025 to
more than 12,000 MW
WECC: Capacity will nearly double by 2025 to
more than 25,000 MW
ERCOT: Limited growth during the next 10 years
Black & Veatch Energy Market Perspective | 2015 Outlook

15. 28 January 2015
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Net dependable
capacity is the
amount of capacity
that can be counted
toward the
planning reserve
margin, or be bid
into a formal
capacity market
Black & Veatch Energy Market Perspective | 2015 Outlook

16. 28 January 2015
16
Generation
represents the
amount of energy
produced by each
fuel type or
technology to cover
changes in load
throughout the day
Black & Veatch Energy Market Perspective | 2015 Outlook

17. 28 January 2015
17
Electricity Price Forecast
AverageElectricityPrice
2014$/MWh
Black & Veatch Energy Market Perspective | 2015 Outlook
Black & Veatch View:
Electricity prices will be
greater than the “business as
usual case” as a result of:
• Increased gas demand
• Higher penetration of
renewables
• Changes in dispatch

18. 28 January 2015
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Black & Veatch View:
Carbon emissions
• Emission rate reductions in the
East due in part to MATS
• Rates in the West decline at a
lower rate due to large amounts
of wind and low amounts of coal
to displace
AnnualEmissions
(MillionsofTons)
AnnualEmissionsRate
(lbs/MWh)
National Carbon Emissions Forecast
(Lower 48, Existing Sources)
Black & Veatch Energy Market Perspective | 2015 Outlook

19. As Combined Cycle Generation increases,
emissions rates decrease
An increase in natural gas prices should drive an upward demand for Wind.
Higher gas prices push coal to generate more, which increases emission rates.
due to the displacement of Coal Generation
natural gas’ influence on
Emissions
Lower Coal Generation may accelerate the retirement of marginal coal.
Lower energy revenue requires higher capacity payment revenue.
19
CO2
28 January 2015Black & Veatch Energy Market Perspective | 2015 Outlook

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Annual Comparison of Monthly U.S. Natural Gas Demand
Bcf/day
28 January 2015Black & Veatch Energy Market Perspective | 2015 Outlook

21. 2015-2024 Flows Decrease
2015-2024 Flows Stable
Natural Gas Pipelines
2015-2024 Flows Increase
Pipeline flows have and
will continue to change
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28 January 2015Black & Veatch Energy Market Perspective | 2015 Outlook

22. 28 January 2015
22
Black & Veatch Key Findings
• North American shale gas production will
nearly double, but so will demand
• Significant infrastructure investment needed
in the power generation and natural gas
value chains
• Clean Power Plan compliance will result in
increased energy costs
• The exact level of price increases will vary by
state and region, and is dependent upon the
final rules adopted by EPA
Black & Veatch Energy Market Perspective | 2015 Outlook

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A recording of the full webcast is available at
www.bv.com/EMP
For additional information, or questions regarding
the EMP, please contact:
Patrick Rhea | Account Executive
e RheaPW@BV.com
p +1 212-973-1339 ext. 37

24. www.bv.com