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Clean Energy, A Strong Economy, and a Healthy Environment

William J. Keese Western Governors’ Association

June 1, 2007

European InsulationManufacturers

General Meeting

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Western Governors’ Association

Represents governors of 19 States and 3 U.S. Flag Pacific Islands

Address – Policy and governance issues in the Western U.S.

Focus - natural resources, the environment, human services, economic development, international relations and state governance.

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Energy Policy - Clean and DiversifiedDriven by the Environment Reduce Greenhouse Gas Emissions

Decrease reliance on fossil-fired generation through the use of energy efficiency and renewable resources

Balance new and traditional technologies to strengthen economic growth, stabilize energy prices, maximize reliability, and mitigate environmental impacts

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Clean and Diversified Policies The CDEAC Report

Bring 30,000 MW of new clean energy online by 2015

Increase energy efficiency 20% by 2020 Meet transmission needs over the next

25 years

Western Governors sought technically and financially viable incentive-based recommendations to:

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Potential Generation Capabilities in the Western U.S. - 2015

Biomass 10,000 MW

Geothermal5,600 MW

Advanced Coal5,000 MW

Solar 8,000 MW

5,000 – 54,000 MW

48,000 MW

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Clean and Diversified Energy -Energy Efficiency is First Easiest, cheapest and least

controversial strategy

No need to wait for “untested” and expensive technologies

Successful implementation of energy efficiency requires some governmental intervention National and regional energy efficiency

standards and building standards Tax credits for energy efficiency

investments

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Clean and Diversified Energy -Renewable Energy is Next Renewable energy sources can

compete with other energy sources

Short-term financial support needed Need to extend production and

investment tax credits Increase cap on residential investment

tax credit Clean Renewable Energy Bonds for

public power and cooperatives Development of adequate

transmission is a must

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United States Geothermal Resources

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Clean and Diversified Energy -Fossil Fuels Are Still Important Natural gas is a “clean” energy

option but other fossil alternatives must be pursued

Coal must be a part of a clean energy future

WGA supports development of zero-emission technologies

R&D critical to realizing clean energy goals

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Moving into Implementation - CDEi Governors called for implementation of the

CDEAC’s recommendations Formation of a D.C. strategy group to push for

adoption of federal recommendations Creation of partnerships and formal coalitions Western Renewable Energy Generation Information

System (WREGIS) development

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States are Leading the Way

23 states and the District of Columbia have Renewable Portfolio Standards Arizona: 15% by 2015 California: 20% by 2010, with 3000 MW Solar goal New Mexico: Targeting 15% by 2015, 20% by 2020 Washington: 15% by 2020

National standard being debated in Congress

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States are Leading the Way

West Coast Governors Global Warming Initiative 15% savings: Residential buildings by 2015

California Green Building Initiative 20% savings: Non-residential standards by 2015

Seven Western States State buildings built to LEED Silver standards

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Energy Action PlanCalifornia’s Loading Order

First resource of choice: allcost-effective energy efficiency

and demand response.

After all energy efficiency and demand response is deployed,

utilize renewables and distributed generation

If energy efficiency, demand response, renewables, and distributed generation

cannot satisfy increasing needs,California can turn to clean and efficient

fossil-fired generation.

The Loading Order is integrated into all major CPUC decisions governing energy policy and procurement.

Enacted in 2003

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Energy Savings from California Efficiency Programs and Standards

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

19

75

19

80

19

85

19

90

19

95

20

00

GW

h/y

ear

~15% of California Annual Energy Use: 2003

Utility Efficiency Programs

at cost of

~1% of electric bill

Building Standards

Appliance Standards

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California IOU’s Investment in Energy Efficiency

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,00019

76

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Mill

ions

of $

2002

per

Yea

r

Forecast

Profits decoupled from sales

Performance Incentives

Market Restructuring

Crisis

IRP2% of 2004

IOU Electric Revenues

Public Goods Charge

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Additional Information

To learn more about the WGA and these Initiatives, please visit

www.westgov.org

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