LONG TERM ELECTRICAL SUPPLY PLAN

STAFF RESPONSE TO QUESTIONS, ISSUES, AND

RECOMMENDATIONS MADE IN NOVEMBER 2004

Presentation to the Gainesville City Commission

December 13, 2004

2

WE RESPONDED TO:

1. Alachua County Department of Environmental Protection Technical Report (Nov 15)

2. Alachua County Environmental Protection Advisory Committee Recommendation (Nov 15)

3. R.W. Beck’s Report (Nov 15)

3

WE RESPONDED TO:(Continued)

4. Alachua County Board of County Commissioners (Nov 23)

5. Additional Issues - Biomass Estimates- Forestry Practices- Emissions From Open Wood Burning- New Emission Control Technology- Cost Comparisons

4

ADDITIONAL ANALYSES PERFORMEDIN RESPONSE TO COMMENTS

1. Additional PM2.5 Air Quality Modeling

2. Emissions From Open Burning

3. An Alternative Low Case Natural Gas Price Forecast

4. Sensitivity of Project to $200/ton Carbon Tax ($55/ton CO2)

5

RESULTS FROM USING RECOMMENDED* DATA WERE SLIGHT

ANNUAL AVERAGE PM2.5

0.038 0.031 0.038 0.037

9.6

15

0

2

4

6

8

10

12

14

16

Air QualityStandard

Ambient AirQuality

ActualOperations

FutureOperations

ActualOperations

FutureOperations

ug

/m3

* As recommended by the Alachua County Environmental Protection Department and Environmental Protection Advisory Committee

Original ResultsUF Data

Revised Results EPA AP 42 Data

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ONE BENEFIT IS REDUCED PARTICULATE EMISSIONS FROM OPEN BURNING OF WASTE WOOD

Particulate Reduction -766 tons/year From Use Biomass

Increased Particulates 65 tons/year From Solid Fuel Power Plant

Net Particulate Decrease -701 tons/yearFrom Proposed Plan* Estimate based on amount of wood required to sustain 30 MW of baseload capacity. Assumes 50% would have been burned in the field.

7

NATURAL GAS PRICE FORECASTS

0

2

4

6

8

10

12

14

16

18

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

Del

iver

ed N

om

inal

$/M

MB

tu

Revised Low Range

AEO2004 Reference

Revised High Range

Apr-04 Low Range

Apr-04 Base Case

Apr-04 High Range

Historical Actual Prices

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“RENT CAPACITY” PLAN SYSTEM EXPENSES

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Year

Exp

ense

s ($

/Yea

r)

FuelOther ExpensesScrubber Debt Service

9

“Gas Build” Plan System Expenses

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Year

Exp

ense

s ($

/Yea

r)

Fuel

Other

New Plant & Scrubber Debt Service

10

“Solid Fuel” Plan System Expenses

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Year

Exp

ense

s ($

/Yea

r)

Fuel

Other Expenses

New Plant & Scrubber Debt Service

11

SYSTEM EXPENSES BY SCENARIO

12

RESIDENTIAL ELECTRIC BILL (1000 kWh Consumption)

Solid Fuel, Gas and Rented Capacity Plans

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Year

To

tal

Res

iden

tial

Bil

l ($

/Mo

nth

)

SOLID FUEL

GAS

RENTED CAPACITY

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ADDITIONS TO THE PROPOSAL PLAN*

1. Additional Ambient Air Particulate Monitoring

2. A Greenhouse Gas Fund For Local Projects

3. A Conservation And Renewable Energy Goal

*In conjunction with affirmative decision to proceed with the development of the proposed plan.

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PROPOSED FUNDING MECHANISM: 1.5% of Capital Cost

Fiscal Year

Projected Spending

PlanPrincipal Draw

Greenhouse Gas Fund

2005 2.0% $8,388,696 $125,8302006 3.0% $12,960,536 $194,4082007 2.0% $8,899,568 $133,4942008 14.0% $64,165,885 $962,4882009 41.0% $193,551,810 $2,903,2772010 33.0% $160,459,171 $2,406,8882011 5.0% $25,041,356 $375,620

Nominal Total $7,102,005

Present Value Total $4,921,728

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PROPOSED RENEWABLE ENERGYAND CONSERVATION GOAL

The following goal is attainable by Gainesville Regional Utilities if the proposed long term electric supply plan is implemented.

“Meet an additional 10% of our customers’ electrical needs through renewable energy and conservation by 2012”.

This goal is higher than that of any other electric utility in Florida.

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Thank You