1. www.IN.gov/OUCC Perspective On Growing EPA Environmental Mandates David Stippler, Indiana Utility Consumer Counselor 2012 NASUCA Annual Meeting Baltimore, Maryland November 11, 2012 1-888-441-2494 www.IN.gov/OUCC

2. Challenges Ahead: Growing Federal Mandates Environmental Environmental –Mercury and Air Toxic Standards (MATS) Rule (finalized December 21, 2012) –Cross-State Air Pollution Rule (CSAPR) (vacated by D.C. Circuit decision on August 21, 2012) –Proposed Cooling Water Intake Structures Rule-Sec.316(b) of Clean Water Act (published April 20, 2011) –Coal Combustion Residuals Rule (CCR) (late 2012-expected final rule date) –Proposed Greenhouse Gas (GHG) New Source Performance Standards (published April, 2012)

3. www.IN.gov/OUCC Compliance Costs and Consequences Late last year the SUFG (Purdue University) projected electricity prices to increase 20% by 2017. Late last year the SUFG (Purdue University) projected electricity prices to increase 20% by 2017. SUFG then estimated earlier this year that electricity would rise another 14% due to EPA regulations over the next decade. SUFG then estimated earlier this year that electricity would rise another 14% due to EPA regulations over the next decade.

4. www.IN.gov/OUCC Compliance Costs and Consequences The SUFG’s estimates portend a significant rise in electricity prices for Indiana consumers in the near future. The SUFG’s estimates portend a significant rise in electricity prices for Indiana consumers in the near future. Coupling the estimate as to the impact of EPA regulations with its construction cost estimates would equate to an increased residential monthly bill of about $146/month for 1,000 kWhs of consumption or about another $444/year for electricity. Coupling the estimate as to the impact of EPA regulations with its construction cost estimates would equate to an increased residential monthly bill of about $146/month for 1,000 kWhs of consumption or about another $444/year for electricity.

5. www.IN.gov/OUCC Compliance Costs and Consequences Recent estimates by the Indiana Energy Association (IEA) for Indiana’s 5 largest IOUs to comply with mandates may exceed $11.5B. Recent estimates by the Indiana Energy Association (IEA) for Indiana’s 5 largest IOUs to comply with mandates may exceed $11.5B. Impact of capital costs on revenue requirements on Indiana alone will be in range of $1.5B annually. Impact of capital costs on revenue requirements on Indiana alone will be in range of $1.5B annually. An overall rate increase of about 22 per cent over time, when compared to the combined 2010 operating revenues of these 5 utilities. An overall rate increase of about 22 per cent over time, when compared to the combined 2010 operating revenues of these 5 utilities.

6. www.IN.gov/OUCC Challenges Ahead Cost estimates-CPCN requests Cost estimates-CPCN requests –OUCC’s ongoing concern over escalating increases in project costs and impact on rate payers. –A call for more discipline in project costs estimation. –IURC recent statements re: cost estimates to support grant of CPCN.

7. www.IN.gov/OUCC Contact Information David Stippler Utility Consumer Counselor www.in.gov/oucc Phone: 317.232.2494 Direct: 317.233.3232 Toll Free: 1.888.441.2494