14th Annual International Legislators Forum

EPA Carbon Regulation

June 26, 2014

Eric J. OlsenVice President and General Counsel

Great River Energy

Presentation Outline

• Great River Energy and electric cooperative background

• Potential impact of the proposed rule on GRE

• GRE’s action plan regarding the proposed regulations

GRE and our membership

28 member cooperatives – 1.7 million consumers

4th largest G&T in the nation• $3.7 billion total assets• $2.8 billion total debt• $980.4 million revenue

880 employees (MN and ND) 3,619 MW generation

• 701 MW renewables 4,660 miles transmission

GRE is a G&T cooperative

• Generation and transmission cooperatives (G&Ts) generate and transmit electricity to distribution co‑ops

• Distribution cooperatives deliver electricity to the consumer

• G&Ts are owned by distribution cooperatives

• Distribution co-ops are owned by member electric consumers

U.S. electric co-ops

• 846 distribution & 66 G&T cooperatives• Serve an estimated 42 million people

in 47 states, including: o 18 million businesses, homes, schools,

churches, farms, irrigation systems & other establishments in 2,500 of 3,141 counties in the U.S.

• Nearly 13% of the nation's METERS are customers of rural electric co-ops

Great River Energy’sMembers Rely on Coal Plants

• Coal Creek Station 1140 MW• Stanton Station 188 MW• Spiritwood Station 99 MW

• 67% of GRE’s energy comes from coal

• GRE’s North Dakota coal-fired plants are the economic foundation for our members’ affordable rates

Great River Energy’s Minnesota Generation

• 1300 MW of gas-fired peaking plants provide reliability

• 31 MW waste to energy plant provides renewable energy

• 300 MW of Minnesota wind purchases are carbon free

• 650 KW of new solar provides valuable R&D benefits

Great River Energy Prepared for Carbon Regulation

• Accelerate depreciation of Coal Creek and Stanton Stations

• Reduced CO2 emissions 20% below 2005 levels

• Substantially reduce reliance on coal• Meet growth with conservation, energy efficiency

renewables, natural gas, and the market• Use municipal waste for power generation; don’t

landfill it• Work with our members to develop solar and other

nontraditional generation

Impact of the Proposed Rule on Great River Energy

• North Dakota carbon intensity reduction requirement is 11%o DryFining™ coal refining system reduces CO2 emissions by

4%o Spiritwood combined heat and power plant is half as

carbon intense as conventional coal

• Minnesota carbon intensity requirement is 41%o GRE’s Minnesota generation is low or no carbono GRE is meeting Minnesota’s renewable energy standard

and conservation goals

Reliability and Affordability Remain Care Concerns

• The nation and region rely on the market for reliable energy and low cost resources

• What affects the market affects Great River Energy and our members; no utility is an island

• Carefully analyze the rule’s impact on reliability and cost

Great River Energy Advocacy Regarding the Proposed Rule

• Multiple efforts to shape outcome• Midwest Power Sector Collaborative• Coalition for Innovative Climate Solutions• National Rural Electric Cooperative Association• Work with federal and state policymakers

Thank you.