Energy Policy Leadership

TJ Deora

Colorado has a typical electric power resource mix today…

Fuel source by gWh generated

…but soon our portfolio will be significantly different

How did we do it?

2004

2007

2010

Amendment 37

HB07-1281

HB10-1001

HB10-1365

10% RES by 2015 (IOUs)

20% RES by 2020 (IOUs)

30% RES by 2020 (IOUs)

900 MW Coal to Gas

Colorado State Policy Drivers

Why could we do it?

Colorado is well positioned to demonstrate energy policy

leadership:

1. High awareness of, and concern about, health & environment

2. Abundant traditional & renewable energy resources

3. Straightforward (relatively) energy markets

4. Willing host communities

5. Bold leadership

Is it worth it?

Oong

CostsRetail Rate Impact

BenefitsR

ES

DSM

2%

2%1% 5%

Tota

l

CAC

JEconomic Development• Over $5 Billion Invested • ~16,000 Net New Jobs

Health and Environmental• Improved Local Air Quality• Clean Air Interstate Rule

Compliance

Consumer• Reduced Demand• Forward Price Stability• Long Term Cost Reduction

There are many forces affecting our energy markets

Energy Markets

Demand

Technology

RegulationCapitalAvailability

Colorado’s Renewable Energy Standard (RES) has a low impact on retail rates

$-

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

Average Monthly PSCo Residential Electric Bill by Component

ECA

RESA

TCA

AQIR

DSMCA

Fort St Vrain

Comanche

Base S&F

PCCA

CPI

Consumer Price Index

Fuel(natural gas and coal)

Base rates(utility asset recovery)

RES(~1.3 GW, 2% rate impact)

New coal generation(~0.9 GW, 6% rate impact)

ECA= Electric Cost Adjustment; RESA= Renewable Energy Standard Adjustment; TCA=Transmission Cost Adjustment; AQIR= Air Quality Improvement Rider; DSMCA= Demand Side Management Cost Adjustment;

Fort St. Vrain= PSCo-owned gas peaking units; Comanche= coal-fired generating station in Pueblo; Base S&F= Base Service and Facility Rates or Base Rate; PCCA= Purchased Capacity Cost Adjustment paid to independent power

producers; CPI= Consumer Price Index

Source: CoPUC

Federal policies are of critical importance to complement state policies

Markets

Technology

Regulation

Capital Availability

• PTC / ITC• Modified Accelerated

Cost Recovery System• Loan Guarantees

• National Labs• R&D Tax Credits• ARPA-E

• Renewable Energy Standards• Clean Air-Clean Jobs Act/

State Implementation Plan• Sales and Property Tax

FEDERAL STATE

•Clean Air Act

Policy (or lack thereof) reinforces broader market trends

Reduced Investment

Levels

Low Energy Prices

Regulatory Uncertainty

Natural gas prices

Why is Federal policy support so unstable?

Our country should do more to support renewable energy…

Democrats Independents Republicans

Can we establish successful national energy policy?

1. High awareness of and concern about health & environment

2. Abundant traditional & renewable energy resources

3. Straightforward (relatively) energy markets

4. Willing host communities

5. Bold leadership

What is next for GEO?

Implement the legislative framework for maximum benefit

Jobs• Increase manufacturing• Increase energy project

development and construction by providing commercialization capital (revolving loan funds)

Consumer Cost• Support residential EE finance• Promote energy performance

contracting for commercial sector

• Simplify PV/RE permits & regulations

• Diversify to hedge price volatility

• Increase ROI of weatherization programs

Environmental• Capture coal mine methane• Advance oil & gas best

practices• Increase energy productivity• Utilize beetle kill

What is next for Colorado?

2. Understand portfolio potential post-2020

Lower Emission Power

Generation

New Supply / Demand Dynamics

Cost effective integration

beyond 30%

COAL NATURAL GAS RENEWABLES

What is next for Colorado?

3. Find the next big opportunity, e.g.

Diversification of Our Transportation Fuel MixNatural Gas, Electricity,

Biofuels, Other?

Improved Local Air Quality

Lower Consumer

Prices

Energy Security

Investment & Jobs