Financing the Decarbonized Electric Future Our biggest challenge yet?
NARUC Summer 2010 Committee MeetingsSacramento, California
Remarks of
Ron Binz, Chairman
Colorado Public Utilities Commission
July 17, 2010
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Outline of this presentation
• CapEx for US Electric Supply 2010-2030
– With and without carbon regulation
• How big is the challenge?
• What are the regional differences?
• What are our regulatory and policy tools?
• Implications for design of carbon legislation
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Caveat
• I am one of three equal commissioners
• My positions are my own
• I am confused by many things and have not made up my mind on much at all
• I don’t even agree with some of the things I say
• Good advice: don’t believe everything you think
What Would EPRI Do?
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Efficiency
Biomass
Wind
Hydro
Nuclear
Gas
Retrofit CCS
New CCS
Non-CCS Coal
Efficiency
Biomass
Wind
Hydro
Nuclear
Gas
Retrofit CCS
New CCS
Non-CCS Coal
• US Investor-owned utilities total assets: $1.1 Trillion
• Brattle Group estimates $2.0 trillion CapEx needed in 2010-2030 under climate legislaton assumption; $1.5 trillion otherwise
Brattle Group CapEx Estimate
EIA Regional Groupings
Brattle Group CapEx Estimate
Brattle Group CapEx Estimate
International Energy Agency View
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$1.1 T $2.7 T
$3.8 Trillion
Implications for Climate Legislation
• Urgency: important to start soon– Electric sector ready to move now– Encourage early action
• Cost containment: climate adds to cost pressure– Allocation of allowances– Curbs on speculation
• Innovation needed: Manhattan Project scale– Substantial R&D funding essential
• Keep options open: EPRI may be right– CCS and nuclear must be kept viable
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Available atwww.fortnightly.co
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• Electric power fIrst• Carbon cap• $4/ton CO2 research fee• Allowance allocation• Dampened trading• Early action provision
Implications for State Regulation
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Thanks for the invitation.
I look forward to your questions.