The Path Forward for the
New Energy Economy
NASEO 2011 Annual Meeting
September 12, 2011
Introduction to CPS Energy
Largest Municipally Owned Electric and Gas Utility in the US
• Serving over 700,000 electric and 300,000 gas customers
• Vertically integrated: power plants, T&D infrastructure, retail service
• JD Power number 1 customer satisfaction in the Southern Region
• Nearly $10B in assets with AA credit rating for the company.
Big Steps being taken in SA
Early retirement of coal:
Decision to deactivate and
mothball Deely Units 1&2 by 2018 (871MW of capacity)
Avoid building a power plant:
A comprehensive energy
efficiency program (STEP) to save 771MW by 2020
Strong renewables portfolio:
A goal of 1500MW or 20%
of our generation capacity from renewables by 2020
Innovative smart grid program:
A 250MW virtual power
plant that aggregates savings from 140,000 customers
Building a New Energy economy:
Bringing partners to
4
The Business Case
• Cost/benefit of capital investment in retrofitting aging
fossil fuel plants versus New Energy resources
• Minimizing Three Major Future Risks to our Rate
Payers
– Environmental risks
– Technology risks
– Fuel risks
Environmental/Regulatory
Requirements for the Utility Industry
Ozone
PM
2.5 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Beginning CAIR Phase I Seasonal NOx Cap HAPs MACT proposed rule Second Phase of CSAPR Compliance Revised Ozone NAAQS Begin CAIR Phase I Annual SO2 Cap Next PM-2.5 NAAQS Revision Next Ozone NAAQS Revision SO2 Primary NAAQS SO2/NO2 Secondary NAAQS NO2 Primary NAAQSSO
2/NO
2 New PM-2.5 NAAQS Designations CAMR & Delisting Rule vacatedHg/HAPS
Final EPA Nonattainment Designations PM-2.5 SIPs due (‘06) Proposed CAIR Replacement Rule (Transport Rule) HAPS MACT final rule expected CAIR Vacated HAPS MACT Compliance 3 yrsafter final rule (Nov 2014) CAIR Remanded
CAIR/CSAPR
Begin CAIR Phase I Annual NOx Cap PM-2.5 SIPs due (‘97) 316(b) proposed rule expected 316(b) final rule expected 316(b) Compliance Up to 8 yrs after final rule Effluent Guidelines proposed rule expectedWater
Effluent GuidelinesFinal rule expected Effluent Guidelines Compliance 3-5 yrs after final rule
Begin Compliance Requirements under Final CCB Rule (ground water monitoring, double monitors, closure, dry ash conversion)
Ash
Proposed Rule for CCBs Management Final Rule for CCBs Mgmt Final CSAPR Rule Compliance with CSAPRCO
2 Reconsidered Ozone NAAQS5
6
A Diversified Portfolio
Projected Generation 2020
Total Generation = 26,316,425 MWh
Total Projected = 32,994,919 MWh
Traditional sources = 77%
Renewable sources = 14%
Demand Reduction, Purchases = 9%
Traditional sources = 85%
Renewable sources = 8%
Demand Reduction, Purchases =
7%
2010 GenerationGas
7%
Coal
46%
Nuclear
32%
STEP
2%
Wind
8%
Solar
0.03%
Landfill Gas
0.2%
Purch Pwr
5%
2010 Generation w/OSS (MWh)
Gas 20% Coal 34% Nuclear 23% STEP 8% Wind 12% Solar 2% Landfill Gas0.2% Purch Pwr 1%2020 Generation w/OSS (MWh)
Renewable Energy
Projects
7 Sweetwater 3 – 100.5 MW Sweetwater 4 – 240.8 MW Desert Sky – 160.5 MW Covel Gardens Landfill – 9.6 MW Penascal – 76.8 MW Papalote Creek – 130.4 MW Cedro Hill – 150 MWProjects in Commercial Operation Desert Sky (wind) 160.5 MW Sweetwater 3 (wind) 100.5 MW Covel Gardens (landfill gas) 9.6 MW
Sweetwater 4 (wind) 240.8 MW Penascal (wind) 76.8 MW Papalote Creek (wind) 130.4 MW Blue Wing Solar (solar) 14.4 MW Cedro Hill (wind) 150.0 MW Total 883.0 MW Projects in Development
SunE CPS, 3 x 10 (solar) 30.0 MW
Nelson Gardens (landfill gas) 3.0 MW
Los Vientos (wind) 200.0 MW
Total 233.0 MW
Renewable Projects Under Contract Wind 1,059.0 MW
Landfill Gas 12.6 MW Solar 44.4 MW Total 1,116.0 MW
Blue Wing Solar – 14.4 MW SunE CPS 1 – 10 MW SunE CPS 2 – 10 MW SunE CPS 3 – 10 MW Nelson Gardens Landfill – 3.0 MW Los Vientos – 200 MW
