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.