Financing the Decarbonized Electric Future Our biggest challenge yet? NARUC Summer 2010 Committee...

Financing the Decarbonized Electric Future Our biggest challenge yet?

NARUC Summer 2010 Committee MeetingsSacramento, California

Remarks of

Ron Binz, Chairman

Colorado Public Utilities Commission

July 17, 2010

2

Outline of this presentation

• CapEx for US Electric Supply 2010-2030

– With and without carbon regulation

• How big is the challenge?

• What are the regional differences?

• What are our regulatory and policy tools?

• Implications for design of carbon legislation

3

Caveat

• I am one of three equal commissioners

• My positions are my own

• I am confused by many things and have not made up my mind on much at all

• I don’t even agree with some of the things I say

• Good advice: don’t believe everything you think

What Would EPRI Do?

8

Efficiency

Biomass

Wind

Hydro

Nuclear

Gas

Retrofit CCS

New CCS

Non-CCS Coal

Efficiency

Biomass

Wind

Hydro

Nuclear

Gas

Retrofit CCS

New CCS

Non-CCS Coal

• US Investor-owned utilities total assets: $1.1 Trillion

• Brattle Group estimates $2.0 trillion CapEx needed in 2010-2030 under climate legislaton assumption; $1.5 trillion otherwise

Brattle Group CapEx Estimate

EIA Regional Groupings

Brattle Group CapEx Estimate

Brattle Group CapEx Estimate

International Energy Agency View

18

$1.1 T $2.7 T

$3.8 Trillion

Implications for Climate Legislation

• Urgency: important to start soon– Electric sector ready to move now– Encourage early action

• Cost containment: climate adds to cost pressure– Allocation of allowances– Curbs on speculation

• Innovation needed: Manhattan Project scale– Substantial R&D funding essential

• Keep options open: EPRI may be right– CCS and nuclear must be kept viable

19

20

Available atwww.fortnightly.co

m

• Electric power fIrst• Carbon cap• $4/ton CO2 research fee• Allowance allocation• Dampened trading• Early action provision

Implications for State Regulation

24

Thanks for the invitation.

I look forward to your questions.