Charlotte Chamber

U. S. CLIMATE CHANGE LEGISLATION

Mike Stroben November 11, 2009

DUKE ENERGY POSITION ON CLIMATE CHANGE LEGISLATION

Duke Energy Supports the Enactment of Economically and Environmentally Sustainable Federal Climate Change Cap – and - Trade Legislation

Economic Sustainability Includes Provide Adequate Consumer Price Protection

The Question of Whether GHG Regulation Is Coming Is Settled EPA is moving to regulate – set to do so in March of 2010

Duke Energy Prefers a Legislative Approach EPA lacks the legislative authority to craft an environmentally sound

program that protects the economy and consumers A program that can have such broad economic implications for the

country’s economy should be the responsibility of an elected and accountable Congress

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ELECTRIC SECTOR ALLOWANCE ALLOCATION CRITICAL TO CONSUMER PRICE PROTECTION

H.R. 2454 Allocation Provisions 2012 Allocation Equal to About 85% of Sector’s 2005 CO2 Emissions Local Distribution Company Allocation Is Split 50/50 Between

Emissions and Retail Sales Duke Energy Carolina Customers Fare Relatively Well Under This

Allocation Formula Because of Nuclear Generation Value of Allowance Allocation Must Flow Back to Customers Allocation Phases Out Entirely In 2030 Allocation Much Improved From Where Debate Began – Full Auction

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DUKE ENERGY POSITION ON H.R. 2454

A Step in the Right Direction But it Can Be Improved As the legislative process moves forward in the Senate Duke Energy will

work to win improvements to the legislation to benefit our customers Implementation schedule and cap trajectory Size of electric sector allocation and phase-out schedule Cost-containment mechanisms

Price collar Offsets

Exemption from EPA regulation Support for deployment of new nuclear units

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MOVING FORWARD IN THE SENATE Senate Environment and Public Works Committee Reported Out a Bill

Last Week Republicans boycotted the process Senate EPW bill dead on arrival Senate leadership will craft a bill for floor consideration

Senate Finance Committee Will Work on Allowance Allocations Floor Action Won’t Occur Until 2010

Health care Finance reform

Expect Any Bill Passed By the Senate to Be More Favorable to Consumers Than H.R. 2454

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DUKE ENERGY POSITION ON S. 1733

A Step in the Wrong Direction – Must Be Improved

Allocation to Electric Sector Reduced

Inadequate Exemption from EPA Regulation

Nothing for New Nuclear Unit Deployment

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EPA WILL REGULATE GREENHOUSE GAS EMISSIONS UNLESS

Supreme Court Ruled In April 2007 That EPA Has the Authority to Regulate GHG Emissions Under the Clean Air Act

EPA Now Using That Authority EPA Proposed a Rule to Regulate GHG Emissions From New Motor

Vehicles – Plans On Finalizing By March 31, 2010 Once finalized the door is open for EPA to regulate other sources Automatically triggers Prevention of Significant Deterioration permitting

requirements for major stationary sources of GHG emissions EPA proposed a rule to reduce the number of sources subject to PSD

but…

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