Transcript EL PASO ELECTRIC COMPANY BOARD OF DIRECTORS MEETING

Energy Sustainability in a Carbon
Constrained World
George A. Williams
Senior Vice President and
Chief Operating Officer
Climate Change Legislation
Since December, little has happened on Capitol Hill
regarding climate change and energy policy.
A federal bill to reduce greenhouse gas emissions is unlikely to
pass Congress this year (2010).
There is no agreement on the details of a cap-and-trade system.
If Congress doesn't move forward, emission reductions will be
forced by federal regulators (EPA), ultimately driving up utility
rates.
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Climate Change Legislation
Cap and Trade is an administrative approach used to control pollution by
providing economic incentives for achieving reductions in the emissions of
pollutants.
A governmental body sets a limit or cap on the amount of a pollutant that
can be emitted.
Companies are issued emission permits and are required to hold an
equivalent number of allowances (or credits) which represent the right to
emit a specific amount. The total amount of allowances and credits cannot
exceed the cap, limiting total emissions to that level.
Companies that need to increase their emission allowance must buy
credits from those who pollute less. The transfer of allowances is referred
to as a trade.
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Climate Change Legislation
WORLDWIDE
10.4 billion metric tons
annual CO2 emissions
CHINA
2.8 billion metric
tons annual CO2
Emissions;
0.86 tons per MWh
UNITED STATES
2.5 billion metric
tons annual CO2
emissions;
0.62 tons per MWh
THE REST
India, Russia and
Germany round out
the top 5
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Climate Change Legislation
UNITED STATES
2.5 billion metric
tons annual
CO2 emissions
EE
2.2 million metric
tons annual CO2
Emissions
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Climate Change Legislation
Report No. DOE/EIA-0226 (2009/12); Released December 16, 2009
*Other is petroleum
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Climate Change Legislation
Report No. DOE/EIA-0226 (2009/12); Released December 16, 2009
*Other is petroleum
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Climate Change Legislation
The U.S. can reduce its CO2 emissions by approximately 500
million metric tons per year by moving to an approximate
energy mix of:
30%
30%
25%
10%
5%
coal
nuclear
natural gas
renewable
hydro
(19% decrease from current)
(10% increase)
(4% increase)
(7% increase)
(no change)
This reduction would effectively move the U.S. intensity from
0.62 to 0.45 metric tons per MWh generated (20% reduction).
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EE’s Carbon Footprint
EE
APS
SPS
PNM
National average
Austin Energy
0.31
0.48
0.92
0.94
0.67
0.49
tons of CO2 per MWh generated (short-tons)
2008 data, Source – Carbon Monitoring for Action - CARMA
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EE’s Energy Sales
Nuclear
4,693 GWh
Natural Gas 2,682
Coal
671
Renewable
1
Purchases 3,152
TOTAL
11,175 GWh
42%
24%
6%
<1%
28%
100%
2008 data
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COST OF ENERGY BY RESOURCE TYPE
Industry Data by
Resource Type
Costs are in 2009$
Capacity/
Availability
Factor*
Installed
$/kW*
Total
¢/KWh*
Wind
Solar (thermal)
Solar (photovoltaic)
Biomass (landfill)
20%
20%
20%
90%
1,825
6,150
6,150
1,350
12.3
32.9
28.5
5.9
Nuclear (advanced)
Coal (scrubbed)
Natural Gas CC
90%
85%
85%
4,100
2,975
1,250
7.9
7.2
10.0
*EPRI 2009 Techni ca l Summa ry Reports (s ome va l ue rounded).
Cos ts s hown a re "a t the bus ba r" - no del i very cos ts i ncl uded.
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Climate Change Legislation
Climate change legislation may require building of more
Renewable Energy Projects
This will increase cost of electricity for El Paso Electric’s
customers since renewable energy is more expensive than
traditional sources of power
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