1. Finding a Reasoned Path Forward in an Uncertain Environment William H. Downey, President & COO June 2010

2. 2 March 2010 The intersection of policy and technology…

3. 3 March 2010 Goal line: maintaining reliable service and competitive rates Business Week (July 2008)

4. 4 March 2010 Missouri’s electricity generation portfolio 78% Coal fired power plants 11% Nuclear power plants (Callaway & Wolf Creek) 4% Natural gas fired power plants 7% Renewable power plants (primarily hydro-electric and wind)

5. 5 March 2010 The evolution of climate change legislation… Waxman-Markey  17 % reduction by 2020  83 % reduction by 2050  Cap-and-trade mechanism  Allowances in early years that decline over time for electric utilities  No cost collar on prices for carbon offsets  Renewable energy portfolio standard Kerry-Lieberman  17 % reduction by 2020  83 % reduction by 2050  Cap-and-trade mechanism  Same as Waxman-Markey but utilities get 2.2 billion more allowances  Price collar with floor of $12/ton rising at CPI+3%/yr. and ceiling of $25/ton rising at CPI+5%/yr.  Unclear if a RPS will be included

6. 6 March 2010 Train Wreck: It’s not all about climate change Possible Timeline for Environmental Regulatory Requirements for the Utility Industry

7. 7 March 2010 Midwest: Greater risk and uncertainty with existing environmental regulations Most will need environmental retrofits to continue operation under existing EPA regulations Source: MEDA Presentation to Joint Committee on Missouri’s Energy Future

8. 8 March 2010 Existing environmental regulations will cause plant retirements… Source: MEDA Presentation to Joint Committee on Missouri’s Energy Future

9. 9 March 2010 Finding a reasoned path forward…

10. 10 March 2010 The importance of Prop C and energy efficiency Proposition C  2% by 2011 to 15% by 2021  2% must come from solar and provides for solar rebates  A maximum average retail rate increase of one percent Energy Efficiency  Recover costs related to approved energy efficiency programs  Value the same as traditional supply investments  Opt-out provision for industrial customers “To save power is the equivalent of making power.” – Governor Jay Nixon (Signing the Missouri Energy Efficiency Act into law)

11. 11 March 2010 Conclusion: small proactive steps and flexibility are key…  Missouri’s next major baseload generation will come in the next 10-20 years, what it will be remains uncertain  Uncertainty leads to increased cost—need ground rules  No one right answer, need a portfolio of solutions  Need to rationalize national energy and environmental policy with commercial availability of technology  Government policy and regulatory policy needs to be aligned  Must continue to work with customers to mitigate cost-impacts and understand their changing needs