1. Financing the Decarbonized Electric Future Our biggest challenge yet? NARUC Summer 2010 Committee Meetings Sacramento, California Remarks of Ron Binz, Chairman Colorado Public Utilities Commission July 17, 2010

2. 1 Outline of this presentation CapEx for US Electric Supply 2010-2030 –With and without carbon regulation How big is the challenge? What are the regional differences? What are our regulatory and policy tools? Implications for design of carbon legislation

3. 2 Caveat I am one of three equal commissioners My positions are my own I am confused by many things and have not made up my mind on much at all I dont even agree with some of the things I say Good advice: dont believe everything you think

4. What Would EPRI Do?

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10. Efficiency Biomass Wind Hydro Nuclear Gas Retrofit CCS New CCS Non-CCS Coal

11. Efficiency Biomass Wind Hydro Nuclear Gas Retrofit CCS New CCS Non-CCS Coal

12. US Investor-owned utilities total assets: $1.1 Trillion Brattle Group estimates $2.0 trillion CapEx needed in 2010-2030 under climate legislaton assumption; $1.5 trillion otherwise

14. Brattle Group CapEx Estimate

15. EIA Regional Groupings

16. Brattle Group CapEx Estimate

18. International Energy Agency View 17 $1.1 T$2.7 T $3.8 Trillion

19. Implications for Climate Legislation Urgency: important to start soon –Electric sector ready to move now –Encourage early action Cost containment: climate adds to cost pressure –Allocation of allowances –Curbs on speculation Innovation needed: Manhattan Project scale –Substantial R&D funding essential Keep options open: EPRI may be right –CCS and nuclear must be kept viable 18

20. 19 Available at www.fortnightly.com Electric power fIrst Carbon cap $4/ton CO 2 research fee Allowance allocation Dampened trading Early action provision

21. Implications for State Regulation

24. 23 Thanks for the invitation. I look forward to your questions.