Cathy S. Woollums Sr. V.P. Environmental MidAmerican Energy Holdings Company NARUC Annual Convention November 12, 2007 U.S. Climate Policy: It Takes a Martyr

“No one should underestimate the challenge of de-carbonizing an economy that has relied on carbon- based fuels for two centuries.” Testimony of David L. Sokol, Chairman and CEO MidAmerican Energy Holdings Company Subcommittee on Energy and Air Quality, Committee on Energy and Commerce U.S. House of Representatives March 20, 2007

States with Greenhouse Gas Emission Reduction Targets Source – Pew Center on Global Climate Change

State and Regional Initiatives California (GHG mandatory reporting, cap-and-trade, emissions performance standard) Montana (advisory committee recommendations) Oregon (RPS, GHG mandatory reporting, possible cap-and-trade and emissions performance standard) Utah (Blue Ribbon Advisory Committee recommendations) Washington (RPS, GHG emissions performance standard, GHG mandatory reporting, Climate Advisory Team recommendations) Wyoming (IGCC, energy efficiency, carbon capture and sequestration) Iowa (Climate Change Advisory Council) Illinois (GHG target, renewables requirement) Colorado (Climate Action Plan) Arizona (GHG target) New York (GHG target) Western Climate Initiative Regional Greenhouse Gas Initiative

State Renewable Portfolio Standards

Key Policy Challenges and Opportunities Coordination of policies and programs that consider energy, economics and the environment Nuances of utility regulation Mandates, incentives and unintended consequences Electricity supply and reliability Cost impacts on all customers Development of new electricity generating facilities and associated infrastructure Investment perspectives Economic safety valves and policy off-ramps

Achieving the Right Balance Consumers’ elevated expectations  Uninterrupted service  Acceptable energy costs Energy demand  Energy efficiency won’t power a plasma t.v. or manufacture a wind turbine Energy supply options  All energy production has consequences  All energy production has detractors Political ambitions  Desire to be re-elected  Jobs, tax revenues and a robust economy revolve around energy

Transition to a Low-Carbon Economy Requires a Well-Constructed Plan All of the following will be necessary: Smart grids and communication infrastructures Grid infrastructure with capacity and reliability to operate with % intermittent renewables Significant expansion of nuclear Commercial-scale coal-based generation units operating with 90+% CO 2 capture and storage Efficiency Renewables Plug-in hybrid electric vehicles Distributed energy resources