1	Investing in America’s Electric Future Bill Brier Vice President, Policy & Public Affairs EEI-North Dakota Forums April 15-17, 2008
2	Overview Customers are consuming more electricity: Utilities are meeting that demand Energy efficiency, demand-side management: Making a difference Resource diversity: Key to reliability and environmental responsibility Environmental standards: Impact on planning and costs
3	Electricity use in the typical U.S. home
4	U.S. economic growth: Linked to electricity growth
5	Demand for electricity: Projected to increase 30% by 2030
6	Electricity Supply Margins Projected to Fall Below Minimum Target Levels in Some Areas of North America in Next 2-3 Years
7	Investments in Generation Inefficient, older power plants will be retired; new plants built. 240 gigawatts (GW) of new capacity will be needed by 2030.* New capacity costs likely will be in excess of $400 billion.
8	Transmission Investments Nearly $75 billion will have been invested between 2000 and 2010. Customers will benefit from newer technologies and reliability.
9	Distribution Investments Since 2000, the industry has invested almost $109 billion in the nation’s distribution system.
10	Environmental Compliance Costs From 2002-2005, the electric utility industry spent at least $21 billion to comply with federal environmental laws; state and local rules drive costs even higher. EPA estimates that two rulemakings—the Clean Air Interstate Rule and the Clean Air Mercury Rule—will cost electric utilities and their customers almost $50 billion from 2007 to 2025.* New technologies are needed to reduce greenhouse gas (GHG) emissions, but will come with a cost. * CAMR is currently being resolved in the courts; compliance costs could rise under alternative regulatory regimes.
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12	Energy-efficiency makes a difference
13	EEI’s Energy-Efficiency Initiatives Five key efforts underway: Encouraging “smart” and energy-efficient buildings Promoting “smart” and energy-efficient appliances and electric technologies Commercializing plug-in hybrid electric vehicles (PHEVs) Accelerating development of “smart” grid and advanced metering infrastructure Developing “smart” rates to give customers more control over electricity bills
14	The regulatory dilemma State regulatory agencies must balance several priorities: Affordable electricity prices Reliable service Environmental protection Agencies may reach different conclusions about right path for their states
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16	Benefits of Renewables Help promote fuel diversity Reduce environmental impact Low or no fuel costs
17	Challenges of renewables High initial capital costs Geographic limitations Intermittent nature Transmission availability and cost Frequent expiration of production tax credit Environmental and aesthetic challenges (NIMBY)
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19	Wind generation
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21	Environmental planning and costs EEI supports federal action or legislation to reduce GHG emissions that: Ensures the development and cost-effective deployment of a full suite of “climate-friendly” technologies, and helps provide for their funding; Minimizes economic disruption to customers and avoids harm to the competitiveness of U.S. industry; Utilizes an economy-wide approach to GHG reductions. * The full text of the EEI climate change principles is available at www.eei.org.
22	What Will It Take? Addressing climate change requires an aggressive and sustained commitment to a full set of technologies: Efficiency Renewables Clean coal technologies Carbon capture and storage Nuclear Plug-in hybrid electric vehicles
23	CO₂ Reductions… What’s technically feasible?
24	Key technology challenges Smart grids and communications infrastructures. A grid infrastructure able to operate with up to 30% intermittent renewable generation. Significant expansion of nuclear energy and a viable strategy for managing spent fuel. New coal-based generation units operating with 90+% CO₂ capture and storage in a variety of geologies.
25	Key Funding Challenges According to EPRI, it will cost up to $1.8 trillion to dramatically reduce CO₂emissions by 2050. Investing now in research and development could reduce overall costs. EPRI believes investments of about $1.4 billion per year, through 2030, could decrease the cost to $900 billion. After technology reaches commercialization phase, continued investment is needed to operate and maintain technologies.
26	Review The industry is in a “build” phase to meet demand projections. The industry promotes energy efficiency and demand-side management. Resource diversity is the key to reliability and environmental responsibility. Environmental standards impact planning and costs.
27	"Questions" Questions?