1 A Look at Energy Policy v Elements of a Balanced Policy v Bush/Cheney Proposal v NEMA v IEEE USA v Alliance for Energy and Economic Growth v Generation Plans v Transmission v Energy Efficiency v Other

v Per DOE, US energy use ~ 100 Quads/yr in 1998 v (1) Quad = BTU v Balanced US Energy Policy needed

3 v Energy Sourcing v Energy Conversion/Transportation Infrastructure v Energy Efficiency and Conservation Balance Requires 3 Ingredients

 Oil, Coal, Nuclear, and Natural Gas are basis of present economy  Each fuel/technology should be expanded  We should not concentrate all efforts on one singular choice  Alternatives, like renewables and the nuclear power option should be encouraged  We should favor domestic sources of BTU’s v Energy Sourcing

 We need regulatory policies that encourage investment  Electric transmission is in direly short supply v Energy Conversion/Transportation Infrastructure

 1998 total US energy consumption was BTU’s from all uses  Energy conservation is an important means of reducing demand  We must work to improve energy efficiency of all power products v Energy Efficiency and Conservation

v Three Important Guidelines:  Doable with known technology  Pays for itself within 3-5 years  Results in real energy savings These guidelines are built into NEMA TP-1 distribution transformer energy efficiency These guidelines should be used by all power equipment

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9 Conservation Sources Infrastructure

10 1.3% yr growth 3 % yr growth Energy Efficiency Helps Meet Demand

11 Energy Efficiency Does Not Mean Sacrifice

12 Wide-spread use of Energy Efficient Products has made a difference!

13 Electric Generation from Multiple Energy Sources

14 High-tech power plants, like this combined cycle plant are signaling a new age in electric power generation. The capability to co-produce electricity and a slate of fuels and chemicals makes the technology economically attractive to a broad range of industrial applications. Combined Cycle Clean Coal Cuts Pollution and Costs

15 Calvert Cliffs is the first US nuclear plant to receive license from the Nuclear Regulatory Commission. The renewal will allow the plant to continue producing environmentally sound electricity for an additional twenty years. Nuclear Energy an Important Part

16 Renewable hydropower has long provided a significant contribution to the US energy supply. Today, hydropower is competitive with other forms of conventionally generated electricity. Hydro-generation Renewable and Economical

17 A pressing long-term electricity challenge is to build enough new generation and transmission capacity to meet projected growth in demand Transmission Infrastructure Upgrades Seriously Needed

18 Several federal agencies are authorized to grant rights of way for oil and gas pipeline and electric transmission systems on federal lands and each approaches the issue from a unique perspective. Authorizing agencies include the Bureau of Land Management, the U.S. Forest Service, the National Park Service, the U.S. Fish and Wildlife Service, the Bureau of Reclamation, and the Bureau of Indian Affairs. Infrastructure Siting a Very Critical Issue

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20 v Contains the 3 Balanced Objectives v Compliments Bush/Cheney Policy

21 v Energy Efficiency v Regulatory Policies encouraging growth in infrastructure of generation, transmission and distribution v Generation of power from all economically viable and socially acceptable sources. Market Based Policy Issued May 2001emphasizing:

22 Energy Efficiency: v National Concern v Should be driven by market forces v Must be based on three factors Technological feasibility Economic viability Real energy savings v Federal Government’s Role Promoting user education on energy efficiency Supporting energy efficient upgrades through programs such as the Federal Energy Management Program Encouraging performance-based incentives in the private sector and use of economically sound energy efficient products and systems

23 Generation, Transmission and Distribution Infrastructure That technology can provide the basis for major capacity and reliability improvements for the transmission and distribution systems That siting permits for new transmission lines and generation facilities need to be expedited Market based incentives and regulatory policies are needed to encourage investment into new infrastructure and allow cost recovery States should be allowed to enter into regional compacts to address siting issues. NEMA’s Beliefs and Proposals

24 Who Are They? Who belongs to them? Where are They Located? What’s their position on Energy?

25 Who Are They? Broad coalition of interests that develop, deliver and consume energy from all sources. Works to build a National Consensus for a comprehensive US Energy Strategy Seeks a balance of supply, demand, and environmental safeguards Website:

26 Who Belongs to Them? v Very large organization v 60 + members v Includes: NEMA EEI Most American manufacturers-all industries Many communities Individual corporations and utilities

27 Where Are They Located? U.S. Chamber of Commerce Environment, Technology & Regulatory Affairs 1615 H Street, NW Washington, DC Fax: (202) Luke Popovich or Chad McGinnis Ph: (703)

28 What’s Their Position on Energy? Goals: Increase energy efficiency and conservation Assure adequate energy supplies and generation Renew and expand the energy infrastructure Encourage investment in new energy technologies Provide energy assistance to low-income households Assure appropriate consideration of the impacts of regulatory policies on energy.

29 Who Are They? World’s largest technical professional society Composed of 230,000 electrical, electronic, computer, and software engineers Power related membership approximately 16,000

30 Comments on Bush/CheneyUS Energy Policy Proposal IEEE-USA applauds the efforts of George W. Bush and members of both parties in Congress to create a national consensus on energy policy. Believes policy should support a broad and balanced range of electric generation and conservation options. States that our nation must invest in new technologies needed to satisfy future demand. Specifically supports policies that promote: Energy Efficiency Cleaner conversion fossil fuels Commercialization of renewable energy resources Nuclear power Advanced technologies such as fusion and hydrogen

v DOE Assumptions v Actual 1. Electric Demand Growth 1.3%/yr 2. 25% Reserve Generation Capacity Excessive 3. Not much need for new infrastructure > 3%/yr Nationwide > 11% CA National energy shortages California reserve < 1.5% Urgent needs for massive installation of generation and transmission year after year. V Fuel costs especially Natural Gas inflated 2-10 times in 1 year due to shortages V Infrastructure costs to end consumer will be higher without a guaranteed customer base V Utilities must be allowed to earn a profit

v Base Generation and Transmission System Expansion are measured in Billion $ increments v Affordability and financing are the biggest issues:  30 year amortization and 11.9% return on investment were common under regulation  3 year amortization and 35% return on investment are needed with an uncertain customer base under Deregulation How can Deregulation be improved to accommodate expensive infrastructure requirements?

33 Doug is: Principle Project Manager of RDI Consulting RDI is a trademark of Financial Times Energy, Inc Walnut St. Bolder Colorado ph: fax: Financial Times web: RDI has developed a comprehensive database on the US and Canadian Electric Utility Systems