1. Clean Smokestacks Act Benefits Update Division of Air Quality March 17, 2010 3/17/2010

2. Air Quality Management Findings of the Southern Appalachian Mountains Initiative and subsequent regional modeling studies: – Reductions in NOx emissions are the most effective way to reduce ozone levels in NC and the Southeastern US – Reductions in SO2 emissions are the most effective way to reduce fine particle levels in NC and the Southeastern US – Reductions in NOx and SO2 emissions will reduce acid rain and nitrogen deposition as well as improve visibility – Emissions reductions applied in a particular State would generate the most benefit in that State 3/17/2010

3. Ozone Control Strategy Implementation Significant progress has been made in this decade to reduce emissions and lower ozone levels NOx reductions have been realized: – Utility sector (State Clean Smokestacks Act), – Utility and industrial boilers (Federal NOx SIP Call rule, Clean Air Interstate Rule), – Mobile (Federal engine and fuel standards, State vehicle inspection program) – Nonroad (Federal engine standards) 3/17/2010

5. Duke and Progress Energy NOx Emissions Note: Final NOx reduction goal in Clean Smokestacks Act is 2009 3/17/2010

7. Ozone levels are decreasing 3/17/2010

8. Fine Particle Control Strategy Implementation Significant progress has been made in this decade to reduce emissions and lower fine particle levels SO2 reductions have been realized: – Utility sector (State Clean Smokestacks Act), – Utility and industrial boilers (Federal Clean Air Interstate Rule), – Mobile (Federal diesel engine and fuel standards) – Nonroad (Federal diesel engine and fuel standards) 3/17/2010

9. Duke and Progress Energy SO2 Emissions Note: Final 2013 SO2 reduction goal in Clean Smokestacks Act is 130,000 tons 3/17/2010

10. Fine Particle levels are decreasing 3/17/2010

11. Clean Smokestacks Act - Summary Implementation of the Clean Smokestacks Act ensured significant reductions of NOx and SO2 emissions in NC. It required each of the two major utilities in NC to reduce emissions below a system wide cap in NC. It did not allow sources to purchase credits to meet emission reduction goals in NC. 3/17/2010

12. Clean Smokestacks Act - Summary Implementation of the Clean Smokestacks Act provides significant co-benefits in the form of: – Mercury emission reductions – Reductions in Nitrogen deposition – Reductions in acid deposition The co-benefits are significant as they serve to protect and improve our air quality, water quality, plant life, fisheries, and ecosystems. 3/17/2010

13. Clean Smokestacks Act - Summary Implementation of the Clean Smokestacks Act better positions NC to respond to more stringent National Ambient Air Quality Standards for ozone and fine particles proposed by USEPA. 3/17/2010