1. 1 Climate Action Team Presentation Peggy Duxbury Seattle City Light September 12, 2007 (206) 615-0538 peggy.duxbury@seattle.gov

2. 2 I.Overall objectives: Seattle City Light’s views II.Leading By Example: Seattle’s voluntary carbon reduction strategy III.Fed / Regional Action & NW Climate Change: Seattle City Light

3. 3 Climate change is real & action needed Mandatory reductions needed Flexible ways to reach goals: “harness market forces” Recognize cost to inaction I. Views of City Light

4. 4 Seattle Times, Nov 1, 2006

5. 5 City Light’s carbon reduction path Conservation: Almost a silver bullet 667 Mayors in US / 28 in WA Support Mayor Nickels’ Climate Protection agreement II. Leadership Through Example

6. 6 Step 1: Conservation: 580,000 tons avoided annually Step 2: Divest of Centralia coal plant: 611,000 tons eliminated Step 3: Purchased new renewables (Wind) 230,000 tons avoided annually Step 4: Purchase Offsets: 200,000 tons annually Success! 2005 / 2006 Seattle City Carbon Neutral – First and only in US The Path to Carbon Neutrality

7. 7 Wall Street’s Favor: Moody’s improved recommendation for SCL bonds based upon low carbon emission profile First-mover advantage: Locked in long term wind before west coast mandates = higher costs Cost effective for customers: Conservation = lowers bills / Offsets cost less than $1 per year for residential customers Catalyst for Change: Biofuels / Port Electrification Benefits of Climate Neutrality

8. 8 SURE! If all utilities reduced carbon emissions 10% (proxy for City Light’s program) CO 2 would be reduced 250 million tons = 46 million cars! Can this work for other utilities?

9. 9 Characteristics of NW Power WA Over 70% hydro Large Role of Public Power & BPA Conservation achieved 40% load growth Major investments in new renewables Diminished reliance on coal III:Voluntary Not Enough: NW Issues around Cap and trade

10. 10 Northwest Efficiency Achievements 1978 – 2005 Since 1978 Utility & BPA Programs, Energy Codes & Federal Efficiency Standards Have Produced Over 3100 aMW of Savings. SOURCE: NW Power and Conservation Council, 2007

11. 11 Highest ranking states: VT, CT, CA, MA, OR, WA, NY, NJ, RI Lowest ranking states (number higher due to ties): ND, WY, MS, SD, AL, MO, AR, OK, TN, AK, IN, LA, GA, VA, KY, WV, NE Source: The State Energy Efficiency Scorecard for 2006, ACEEE, June, 2007 Energy Efficiency Scorecard 6 5 5021 49 25 18 1 48 9 27 15 44 24 11 35 15 38 43 30 35 30 38 33 27 41 35 45 46 12 26 13 41 34 23 40 49 46 29 Maine 15 New Hampshire 18 Vermont 1 Massachusetts 4 Rhode Island 9 Connecticut 1 New York 7 Pennsylvania 14 New Jersey 8 Delaware 30 Maryland 20 Dist. Columbia 22

12. 12 1,500 lbs/MWh 2,000 lbs/MWh 1,000 lbs/MWh LOWEST EMISSION RATES IN US (lbs of CO 2 per mwh of electricity produced)

13. 13 “Coal generation has diminished in utility IRPs to the point where only one utility has a coal plant in its plan.” - IRP Status Memo, Michael Schilmoeller, Power Division, NW Power and Conservation Council, July 31, 2007 I 937 & HB 6001 along w/ similar standards in CA & OR, favor renewables, conservation & natural gas over coal Coal Not Key to NW Resource Plans

14. 14 Allocation Matters! Historic Emissions penalize the NW more than any region in US R&D money must focus equally on non coal technologies to better fit NW planning Encourage (or don’t penalize) conservation When CA Sneezes, NW catches cold Federal / Regional Priorities

15. 15 Emission-Based Gives Many Allowances to Few Emission-Based Gives Many Allowances to Few Source: “Benchmarking Air Emissions of the 100 Largest Electric Generation Owners -2004” *CO 2 allowance allocation based on total electricity output, including fossil, renewable, and incremental nuclear output (relative to 1990). Tons

16. 16 CO 2 Allocation Comparison: Emissions-Based vs. Output- Based* vs. Load-Based Source: EIA 2004 & 2005 data *CO 2 allowance allocation based on total electricity output, including fossil, renewable, and incremental nuclear output (relative to 1990). Tons

17. 17 Hydro most vulnerable power system from unchecked climate change Wall Street beginning to see financial value of utilities w/ low carbon emissions Time for mandatory action & regulatory certainty CONCLUSIONCONCLUSION