Illinois Governor Rod R. Blagojevich Climate Change Advisory Group (ICCAG) ENERGY 2020 Reference Case July 10, 2007 DRAFT – Numbers subject to revision

2 Data Sources - Economic Economic output and employment forecast from REMI model (Provided by IDECO) Economic output and employment forecast from REMI model (Provided by IDECO) Energy prices from U.S. D.O.E. Annual Energy Outlook (AEO) for 2007 to 2030 Energy prices from U.S. D.O.E. Annual Energy Outlook (AEO) for 2007 to 2030 Moderate population growth (<1% annually) Moderate population growth (<1% annually) Real personal income expected to grow more rapidly - raising income/capita Real personal income expected to grow more rapidly - raising income/capita

3 Data Sources - Economic Population and Income: Average Annual Growth Population (Thousands)10,82512,77013,81615,3561.1%0.6% Personal Income (Billions 2000$) ,6361.8%4.1% Income per Capita ($/Capita)32,51536,60465,713106,5320.8%3.5%

4 Data Sources - Economic Employment patterns have shifted over the past 15 years Employment patterns have shifted over the past 15 years Service economy growth has offset decreased industrial/agricultural employment. Service economy growth has offset decreased industrial/agricultural employment. Pattern is expected to continue over the forecast period. Pattern is expected to continue over the forecast period.

5 Data Sources - Economic Employment Average Annual Growth Industrial1,3351,1691,1301, % Commercial4,8245,1735,8936,3080.6% Government % Agriculture & Forestry % Total -6,9517,1817,8928,3710.4%

6 Historic Energy Use Data

7

8 Data Sources - Prices Oil prices from AEO (figure follows) Oil prices from AEO (figure follows) Wellhead price of natural gas based on AEO Wellhead price of natural gas based on AEO Coal price based on the AEO (both mine mouth and delivered prices for electric power plant) Coal price based on the AEO (both mine mouth and delivered prices for electric power plant) Historic electricity prices from Energy Information Administration (EIA) ( Federal Electricity Regulatory Commission (FERC) Form 1). Historic electricity prices from Energy Information Administration (EIA) ( Federal Electricity Regulatory Commission (FERC) Form 1). Model calculates power prices based on generation costs. (Actual prices may differ as a result of political, regulatory or market influences). Model calculates power prices based on generation costs. (Actual prices may differ as a result of political, regulatory or market influences).

9 Data Sources - Prices

10 Data Sources - Prices

11 Data Sources – Power Sector Generation from EPAs National Electric Energy Data System (NEEDS) 2006 database Generation from EPAs National Electric Energy Data System (NEEDS) 2006 database Reviewed additional sources regarding planned generation and for calibration: Reviewed additional sources regarding planned generation and for calibration: Implementation of EGU1 and EGU2 Policies Using the Integrated Planning Model (IPM®) in the Midwest RPO Region Prepared for Lake Michigan Air Directors Consortium (LADCO) Study of Emissions Impact by the Illinois Sustainable Energy Plan Based on Optimal Power Flow Modeling, PowerWorld Tracking New Coal-Fired Power Plants Coals Resurgence in Electric Power Generation, DOE National Energy Technology Laboratory.

12 Points of Comparison Power Sector Power Sector LADCO and PowerWorld reports LADCO and PowerWorld reports NETL re planned generation NETL re planned generation September 2006 Illinois Auction Post-Auction Public Report of the Staff, Illinois Commerce Commission re prices GHG Emissions – US EPA Inventory and WRI report for Illinois. GHG Emissions – US EPA Inventory and WRI report for Illinois. Transportation - Illinois EPA and DOT Transportation - Illinois EPA and DOT

13 Built Environment Housing Splits by Type Single Family65% 66% Multi Family33% 32% Other Residential2% The Reference Case assumes no significant change in the mix of the housing stock over the forecast period.

14 Reference Case - Power Sector Assumed 2,400 MW of coal capacity now in planning stage will come o n-line in 2009 – 2011 (reflects additions already in play). Assumed 2,400 MW of coal capacity now in planning stage will come o n-line in 2009 – 2011 (reflects additions already in play). 1,460 MW of Coal capacity assumed to be retired prior to 2009 when mercury emissions requirements come into effect. 1,460 MW of Coal capacity assumed to be retired prior to 2009 when mercury emissions requirements come into effect. For modeling purposes only – no assumptions re specific plants. For modeling purposes only – no assumptions re specific plants. Transmission interconnections modeled based on existing capacities as obtained from NERC. Transmission interconnections modeled based on existing capacities as obtained from NERC.

15 Reference Case - Power Sector

16 Illinois Power Generation

17 Power Sector – Generation by Source Generation Summary (GWh/year) Gas/Oil 2,720 11,178 22,087 32,352 36,068 Coal 79,936 83,023 88,479 99,674 Nuclear 89,186 91,844 92,264 Hydro Landfill Gas/EFW ,308 1,664 Wind ,626 2,779 Other (0) Total 172, , , , ,479

18 Power Sector Nuclear and coal contribution declines (as share of total) as alternative sources increase. Oil/Gas share more than doubles. Nuclear and coal contribution declines (as share of total) as alternative sources increase. Oil/Gas share more than doubles. Wind, LFG and EFW reach almost 2% of supply Wind, LFG and EFW reach almost 2% of supply Growth in Illinois demand approximately 1.3% per year. Growth in Illinois demand approximately 1.3% per year. Growth in line with previous forecasts (LADCO & Shaw reports). Growth in line with previous forecasts (LADCO & Shaw reports).

19 Transportation Sector - Demand Average Annual Growth 1990 to to 2030 Passenger1.7%1.9% Freight0.7%0.9% Growth in passenger energy use continues to exceed rate of growth in population. Freight energy use grows at a more moderate rate. Bulk of passenger energy use for personal vehicles.

20 Transportation Sector No major increase in vehicle efficiencies assumed in Reference Case.

21 Industry Sector Energy Intensive Industries represent 27% of GO in Energy use per dollar output in these industries is typically an order of magnitude higher than in other/general manufacturing.

22 Industry Sector Energy Intensive industries projected to fall from 27% of industrial gross output in 2005 to 22% by 2030.

23 Illinois GHG Emissions – Base Case

24 GHG Emissions by Sector

25 Illinois GHG Emissions – Base Case

26 Questions?