A Brave New WorldCathy Woollums, SVP, Environmental and Chief Environmental Counsel

NASUCA Mid-Year Meeting – June 2, 2014

Pending EPA Regulations on Electricity Sources – rules not issued in coordinated fashion

Land & Natural

Resources

WaterClimateAir Waste & Chemical

Management

Transmission Siting and Permitting

Avian Protection

Endangered Species

Vegetation Management

Coal Ash

PCBs in Electrical Equipment

HazMat Transport

NSPS – New & Modified Sources

NSPS – Existing Sources

BACT Permitting

International Negotiations

316(b)

Effluent Guidelines Limitations

Waters ofthe U.S.

NPDES Pesticide Permits

Waterbody – Specific Standards

Utility MACT

Interstate Transport (CAIR/CSAPR)

Regional Haze/Visibility

Multiple NAAQS

New SourceReview (NSR)

3

4

• Rising expectations for reliability• Aging plants (nearly 80% of coal plants >30 years

old)• Move from centralized power to customer-generated

power• Changing relationship between utility and customer • Flat load growth nationwide – due to:– Low economic recovery from recession– Distributed generation– Energy efficiency

Disruptive Changes Facing U.S. Utilities

5

• Impact of: – Flat to lower demand for electricity? – Less reliance on coal, more on natural gas and

renewables?– Increased energy efficiency? – EPA regulations?

• Significant decline in greenhouse gas emissions– 2013: U.S. power sector CO2 emissions were 15% below

2005 emission levels – Lowest levels since 1996 – 2020 reduction target under Waxman-Markey climate

change bill was 17% below 2005 levels

Changes and Trends

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• No price on carbon (yet), but utilities act like there is one• Renewables and nuclear need a price or penalty on

carbon emissions in order to grow• Impact of intermittent resources and renewable

integration costs• Minimal growth while investment needs and mandates

increase – Obligations to build renewables (renewable portfolio standard,

PURPA requirements)– Associated transmission – Compliance with EPA rules (pollution controls, fuel switching)

• With flat demand and rising capital needs, the unit cost of electricity will rise

Uncertainties in the Market

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• Choices– Options on renewables– Energy efficiency – Independence (limited connections to grid)– Enhanced reliability

• How to meet or exceed expectations– Transparent– Fair– Cost effective– Informed

Changing Customer Relationships and Expectations

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• Legislation– Colorado Clean Air Clean Jobs Act, Nevada SB 123

• Regulation– Iowa Biennial Emissions Plan and Budget filing

• Hybrids – New Hampshire scrubber bill

• Other Influences– The “Polar Vortex” – Capacity– Reliability– Natural gas prices

• New ideas and consumer protections

Legislative and/or Regulatory Changes?