1. Sustainable Energy Institute Climate Change Discussion Michael Bradley, M.J. Bradley & Associates, Inc. September 24, 2004

2. Recent Developments New Bush Administration report “Our Changing Planet” implicates human causes of climate change States continue to develop mandatory CO 2 reduction programs Cover Stories on Climate Change in BusinessWeek and National Geographic Attorneys General from 7 states and NY city filed suit against the 5 largest CO 2 -emitting electric generating companies Shareholders have demanded climate change risk reports from many of the largest companies

3. CEG Companies supporting CAPA Calpine Corporation Entergy Corporation Exelon Corporation Florida Power & Light NiSource, Inc. PG&E Corporation Public Service Enterprise Group, Inc. Sempra Energy

4. Clean Energy Group supports Multi-Pollutant Legislation Multi-Pollutant Legislation: –Provides business and investment certainty –Is more cost-effective than dealing with one pollutant at a time –Can utilize market forces to minimize costs CAPA addresses CO 2 in the context of multi- pollutant legislation to provide investment certainty: –Controlling greenhouse gases (GHG) is inevitable; more than 25 states have already established GHG initiatives –CAPA establishes a flexible, market-based approach that stabilizes CO 2 emissions at today’s levels and creates the framework for more robust CO 2 control efforts –CAPA creates a national level playing field in terms of regulatory requirements

5. Targets under CAPA 2009: 2005 Levels (2.6 Billion Tons + Flexibility/Offsets) 2013: 2001 Levels (2.4 Billion Tons + Flexibility/Offsets)

6. GHG Coalition Members BP America, Inc. Calpine Corporation Consolidated Edison, Inc. National Energy and Gas Transmission, Inc. Northeast Utilities Pfizer, Inc. Public Service Enterprise Group, Inc. United Technologies Corporation Waste Management, Inc.

7. RGGI ( Regional Greenhouse Gas Initiative) Step in developing a national model (which is the preferred level of action) Strong Preference for Multi-State approach instead of state-by-state GHG coalition members participating at forefront of RGGI