NARUC

1101 Vermont Ave. NW

Suite 200

Washington DC 20005

www.naruc.org

Coming Attractions in

Energy Regulation

Miles Keogh, Director

Julie Taylor, Sr. Program Officer

NARUC Grants & Research

NCSL – December 5 2012

Washington DC

2

Disclaimer

NARUC is the association of State

Commissions.

These are opinions, not NARUC policy,

nor policy of its members.

There are 50 states + DC, with over 200

Commissioners.

Everything will apply to some state, but

there are exceptions to everything in here

in some state too.

3

Agenda

Shifts:

Resource shifts

Technology shifts

Market and regulatory structure shifts

“Known unknowns”

“Unknown Unknowns”

The Game

Paths out of the Game

4

The map of the machine:

three interconnections

Map of the Fleet

Map of the Resources

GasCoal

Nuclear Hydro

Renewable Resources

WindSolar

Biomass Geothermal

Agricultural resources

Wood resources

Agricultural and

Low inventory

residues

and residues

wood residues

Temperature <90C

Temperature >90C

Geopressured resources

o

o

10

10

12

12

14

14

16

16

18

1820

20

2224

26

2224

26

16

14

14

1614

12

10

10

12 <10

10-12

12-14

14-16

16-18

18-20

20-22

22-24

24-26

26-28

>28

6.0-6.5 m/s13.4-14.6 mph

6.5-70 m/s14.6-15.7 mph

>7.0 m/s15.7+ mph

Megajoules/m2

8

What you “burn” is what you pay

Source: Energy Information Administration, Form EIA-861, “Annual Electric Power Industry Report.”

9

Reliable: how should we meet

growth?

Sources: U.S. Department of Energy, Energy Information Administration, Annual Energy Review 2006and Annual Energy Outlook 2008 Early Release

*Electricity demand projections based on expected growth between 2006-2030

Bill

on

kilo

Wat

tho

urs

Recession

Impact?

Shale Gas: The Game Changer

12

13

Climate Policy by State

Source: Pew Center on Global Climate Change

Regional Initiatives

NARUC Projects, EPA outreach, and the

“Labs”

EPA Office of Air and Radiation has provided grant funding to help Regulators understand and proactively address the EPA regulations. National dialogue (the “3N’s

meeting”, the National Council on Electricity policy)

State and regional dialogue (such as this one)

“Labs”Key topics

Key outcomes14

The way out of the game

Everything we know now may be wrong in

5 years

Minimize your regrets

Use Planning

Diversity of resources

Hedges, where needed

15

16

The Many Charms Of EfficiencyCosts less than a power plant!

Pays you back – now with local

benefits!

NIMBY-proof!

Terrorist-proof!

Hurricane-proof!

Hugo Chavez-proof!

Easy to install: no wires or pipes!

100% NOx and SOx-free!

Legal everywhere, and Yucca-free!

Bird / Bat-friendly!

Good-looking!

More Popular Every Day!

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Challenging Reliable, Affordable, Clean

Regulators care about resource adequacy above all, demand is growing & new supply is tough to get.

The “golden era” of declining prices is probably over, and some big bills are coming due.

Maintenance and planned expansion investments are worth 2x the existing system.

Climate is a smaller factor than we thought.

Is the future one of massive stranded investment?

“We cannot solve the most serious problems using the same thinking that created them.”

- Albert Einstein

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Conclusions

State regulators play a broad role with wide-ranging responsibilities

Regulatory policy is an important driver for what the grid looks like

Technology is shifting, but maybe not the technologies we think

The hybrid of markets and vertical integration are here to stay

Climate caps are out, but we’re still decarbonizing

With some huge spending coming, we need to make as many no-regrets choices as possible.

I Will Now Confront

Your Most Challenging Questions!

Or! Later if you prefer!

Miles Keogh, 202-898-2217 mkeogh@naruc.org