1. PRESENTATION ON THE FUTURE OF THE ELECTRIC INDUSTRY IN MISSOURI LEWIS MILLS MISSOURI PUBLIC COUNSEL September 22, 2011

2. MISSOURI OFFICE OF THE PUBLIC COUNSEL 2 MISSOURI OPC AT A GLANCE GREW OUT OF DUTIES PREVIOUSLY COVERED BY THE PSC GENERAL COUNSEL TRANSFER FROM PSC TO OPC IN 1974 WAS TO CREATE A MORE EFFECTIVE A CONSUMER ADVOCATE:  A CONSUMER ADVOCATE INDEPENDENT OF THE PSC  A CONSUMER ADVOCATE WITH NO ROLE AS THE PSC’S LAWYER  A CONSUMER ADVOCATE THAT COULD CHALLENGE PSC DECISIONS IN COURT

3. MISSOURI OPC AT A GLANCE, CONTINUED STRUCTURE – THREE ATTORNEYS – TWO ECONOMISTS – TWO ACCOUNTANTS WORKLOAD – ELECTRIC – GAS – WATER AND SEWER – TELECOMMUNICATIONS MISSOURI OFFICE OF THE PUBLIC COUNSEL 3

4. “Prediction is very difficult, especially if it's about the future.” (Niels Bohr, who received the Nobel Prize in physics in 1922.) A former Chairman of the Missouri PSC in 1997 predicted the end of utility monopolies within 12 years. The Kansas City Star wrote “The freedom consumers will feel when they can choose from whom to buy all their utilities, he said, is no less significant that the freedom Eastern Bloc residents felt with the collapse of communism.” MISSOURI OFFICE OF THE PUBLIC COUNSEL 4

5. TO BUILD OR NOT TO BUILD MISSOURI OFFICE OF THE PUBLIC COUNSEL 5

6. TO BUILD OR NOT TO BUILD MISSOURI OFFICE OF THE PUBLIC COUNSEL 6

7. TO BUILD OR NOT TO BUILD HOW MUCH TO BUILD MISSOURI OFFICE OF THE PUBLIC COUNSEL 7

8. TO BUILD OR NOT TO BUILD HOW MUCH TO BUILD WHEN TO BUILD IT MISSOURI OFFICE OF THE PUBLIC COUNSEL 8

9. TO BUILD OR NOT TO BUILD HOW MUCH TO BUILD WHEN TO BUILD IT WHAT TO BUILD MISSOURI OFFICE OF THE PUBLIC COUNSEL 9

10. A NATIONAL PERSPECTIVE MISSOURI OFFICE OF THE PUBLIC COUNSEL 10

11. EIA SHORT TERM ENERGY OUTLOOK 2009 August 2009 Outlook notes: “This Outlook begins reporting projected carbon dioxide (CO2) emissions from fossil fuels, which fell by 3.2 percent in 2008. We project CO2 emissions will decline by 5 percent this year with lower CO2 emissions from coal accounting for more than one-half of this decline. Economic recovery next year and modest growth in energy consumption are expected to lead to a 0.7- percent increase in CO2 emissions.” MISSOURI OFFICE OF THE PUBLIC COUNSEL 11

12. EIA SHORT TERM ENERGY OUTLOOK 2010 August 2010 Outlook notes: “Forecasted economic growth combined with increased use of coal and natural gas is expected to contribute to increases in fossil‐fuel CO2 emissions of 3.6 percent in 2010.” MISSOURI OFFICE OF THE PUBLIC COUNSEL 12

13. EIA SHORT TERM ENERGY OUTLOOK 2011 September 2011 Outlook notes: “EIA estimates that CO2 emissions from combusting fossil fuels increased by 3.9 percent in 2010. Forecast fossil-fuel CO2 emissions fall by 0.7 percent in 2011, as emission increases from higher natural gas consumption are offset by declines in coal and petroleum consumption. Increases in hydroelectric generation and other renewable energy sources in 2011 also help to mitigate emissions growth. Fossil-fuel CO2 emissions in 2012 remain stable …. MISSOURI OFFICE OF THE PUBLIC COUNSEL 13

14. AN ENORMOUS OPPORTUNITY?? 14

15. ACEEE MISSOURI REPORT Released August 2011 “Historically, Missouri has not made significant statewide investments in energy efficiency compared to other leading states. Missouri has ranked in the lower tier [bottom 10] of ACEEE annual State Energy Efficiency Scorecards….” “Missouri is only one of eight states which does not have a statewide building energy code for either residential or commercial buildings….” MISSOURI OFFICE OF THE PUBLIC COUNSEL 15

16. MISSOURI ENERGY TASK FORCE III. Recommendation to Reduce Missouri’s Dependence on Oil and other Fossil Fuels. Action Item 2: The state should promote the adoption of county and municipal energy efficiency codes on a county-by-county, city-by-city basis. The Missouri General Assembly should develop a Model Energy Efficiency Code for Missouri based on the 2004 IEEC; If the General Assembly does not adopt a code, the DNR Energy Center should develop and promote a code for first and second-class counties. Status: DNR plans to offer training to local government officials in 2010/2011… Status Report, December 2010 MISSOURI OFFICE OF THE PUBLIC COUNSEL 16

17. ENERGY USE BY SECTOR MISSOURI OFFICE OF THE PUBLIC COUNSEL 17 Source: Architecture 2030

18. ENERGY USE BY SECTOR, A DIFFERENT VIEW MISSOURI OFFICE OF THE PUBLIC COUNSEL 18 Source: Architecture 2030

19. ELECTRIC ENERGY USAGE MISSOURI OFFICE OF THE PUBLIC COUNSEL19 Source: Architecture 2030

20. MISSOURI OFFICE OF THE PUBLIC COUNSEL The total US building stock equals approximately 300 billion square feet. In the US every year, we tear down approximately 1.75 billion square feet of buildings. Every year, we renovate approximately 5 billion square feet. Every year, we build new approximately 5 billion square feet. Herein lies the hope. By the year 2035, approximately three-quarters (75%) of the built environment will be either new or renovated. BB BUILDING STOCK TURNOVER LD The total US building stock equals approximately 300 billion square feet. In the US every year, we tear down approximately 1.75 billion square feet of buildings. Every year, we renovate approximately 5 billion square feet. Every year, we build new approximately 5 billion square feet. By the year 2035, approximately three-quarters (75%) of the built environment will be either new or renovated. Source: Architecture 2030 20

21. ENERGY CODES Energy benefits of building codes include saving on energy bills, reducing peak energy demand, and improving system reliability. California’s building standards have helped save businesses and residents more than $15.8 billion in electricity and natural gas costs since 1975, and these savings are expected to climb to $59 billion by 2011. Upgrading the energy efficiency of commercial buildings to comply with the code would cost about $1.60 per square foot but would result in $0.68 per square foot of energy bill savings per year, meaning a simple payback of about 2.4 years. Source: “Building Codes for Energy Efficiency,” EPA Pub. MISSOURI OFFICE OF THE PUBLIC COUNSEL 21

22. CONCLUSION PREDICTIONS – THERE WILL NOT BE COMPLETE CHOICE IN ENERGY UTILITIES IN THE NEXT TWELVE YEARS. – A FOCUS ON ENERGY EFFICIENCY IS HERE TO STAY. REGARDLESS OF WHEN (OR HOW) THE ECONOMY RECOVERS, USAGE GROWTH WILL SLOW DRASTICALLY. – RENEWABLES WILL PLAY AN INCREASING ROLE IN MISSOURI, THE US, AND THE WORLD. – ALGAE MISSOURI OFFICE OF THE PUBLIC COUNSEL 22

23. CONTACT INFORMATION Lewis Mills 200 Madison St., Suite 650 Jefferson City, Missouri 65101 Telephone: 573-751-4857 Toll free: 866-922-2959 Email: lewis.mills@ded.mo.govlewis.mills@ded.mo.gov www.opc.mo.gov MISSOURI OFFICE OF THE PUBLIC COUNSEL 23