1. Clean and Diversified Energy Initiative Rich Halvey Western Governors’ Association Legislative Forum Monterrey, N.L., Mexico

2. Clean and Diversified Energy Initiative Background  North American Energy Summit  June 2004 Governors’ Resolution 1.Protection against shortages and spikes 2.Regional energy policy that is diverse and contains both conventional and alternative energy resource development, energy efficiency, and conservation 3.Meet the energy needs of the West 4.Respond to environmental challenges 5.Take advantage of new technologies that lower the cost of renewable energy and reduce emissions control

3. Enlibra Principles National Standards, Neighborhood Solutions -- Assign responsibilities at the right level Collaboration, Not Polarization -- Use collaborative processes to break down barriers and find solutions Reward Results, Not Programs -- Move to a performance-based system Science for Facts, Process for Priorities -- Separate subjective choices from objective data gathering Markets Before Mandates -- Pursue economic incentives whenever appropriate Change a Heart, Change a Nation -- Environmental understanding is crucial Recognition of Costs and Benefits -- Make sure all decisions affecting infrastructure, development and environment are fully informed Solutions Transcend Political Boundaries -- Use appropriate geographic boundaries for environmental problems

4. Clean and Diversified Energy Initiative Western Governors’ Resolution Goals 1. Add 30,000 megawatts of clean energy by 2015 2. Increase energy efficiency 20% by 2020 3. Meet transmission needs over the next 25 years => Clean and Diversified Energy Advisory Committee (CDEAC) formed to provide recommendations that are technically and financially viable and that mitigate environmental impacts. They should be voluntary, not mandatory.

5. Clean and Diversified Energy Initiative Clean and Diversified Energy Advisory Committee Public Comments Quantitative Working Group

6. Clean and Diversified Energy Initiative Sample of Organizations Participating:

7. Clean and Diversified Energy Initiative CDEAC Recommendations –  The CDEAC has put forth a suite of recommendations from the task force reports that will assist in meeting the governors’ clean energy goals  Recommendations focus on state, regional, and national policies regarding energy efficiency, renewable energy, and advanced fossil fuel generation

8. Clean and Diversified Energy Initiative Sample State Recommendations -  Support continuing efforts to improve the efficiency and environmental performance of all advanced coal technologies, with the ultimate goal of achieving near zero emissions of all emissions at a competitive cost of electricity.  Expand those energy efficiency programs that have proven effective in promoting best practices in industrial energy management and combined heat and power.  Support well-designed comprehensive integrated resource planning and procurement rules that weigh the full costs, benefits and risks (including environmental) of various resource options for public and investor-owned utilities.

9. Clean and Diversified Energy Initiative Sample Regional Recommendations -  Encourage Western state REC trading for appropriately defined environmental attributes as agreed upon by the participants.  Continue regional collaboration on clean energy policy, linking efficiency, clean generation and transmission  Continue regional transmission planning efforts, including establishment of energy transmission corridors that facilitate wheeling of energy from clean energy sources and an open season process by project developers to demonstrate demand and value for new transmission projects.

10. Clean and Diversified Energy Initiative Sample Federal Recommendations -  Advocate federal action on a long-term (10 year) extension of the production tax credit and investment tax credit across all clean energy technologies, provide for partnership sharing of tax credits for certain entities such as tribes, extend and raise the cap on new clean energy bonding authority for non-profits (public power) and Native American tribal authorities, and raise the cap on the residential investment tax credit to $10,000  Support increased federal support and tax incentives for the construction of multiple pilot facilities that demonstrate IGCC, in the Western United States in high altitude areas using western coal.  Encourage timely adoption of updates to the national appliance efficiency standards.

11. Clean and Diversified Energy Initiative CDEAC Report  Demonstrates there are proven energy efficiency measures, abundant renewable resources, and emerging advanced fossil fuel technologies that can not only help the West achieve the Governors’ ambitious energy goals for the region, but exceed them in an environmentally responsible way.  Ultimately the market will determine what gets built and where it gets built, but the CDEAC policies can make it viable for companies to invest in clean fuels and technologies while meeting demand.

12. Clean and Diversified Energy Initiative Next Steps  All the task force reports are finalized  CDEAC will submit its report to Governors prior to the 2006 WGA Annual Meeting  Governors will consider the report and discuss continuing efforts at meeting June 2006 in Sedona, AZ

13. Clean and Diversified Energy Initiative Please visit the WGA web site for more information on the CDEAC and the full task force reports www.westgov.org