Transcript Slide 1

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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