2.  Ensure utilities plan for and provide services by which Missouri’s residents and businesses can achieve their goals with less energy over time, with the efficiency gains achieved at a pace that makes sense in light of economic, environmental, and social considerations  Ensure that useful and rewarding participation, by NRDC and others, is possible in the planning processes utilities run in support of the above objective 2

3.  Present our view of the criteria defining a meaningful planning process  Explain a fundamental planning objective that NRDC proposes for the Commission’s consideration  Describe a process approach that could guide the next round (or two) of utility plans flexibly but robustly, without the need for detailed rules at this point 3

4.  Makes clear the decision maker’s assumptions and thinking process › To the decision maker › To others  Provides those persons interested in the decision an opportunity to influence both › The assumptions › The thinking process 4

5. Considers all important perspectives:  The people who directly or indirectly experience the utility’s services  The people who comprise(employees) and invest in (debt and equity) the utility organization  The policy and strategic choices of the “community” the utility serves, considered from all relevant levels (e.g. state, regional, federal) 5

6. Articulates where “we” are now:  How efficiently do Missourians apply energy (electricity) in their homes and businesses?  What are the characteristics of the current resources used to supply this electricity?  How efficient is, and what are the capabilities of, the transmission and distribution system used to supply this electricity? 6

7.  Missouri uses more energy per $ of gross state product than the US average and spends more on that energy than the gross state average; the same pattern appears for gross commercial product  Missouri homes use more gas and electricity per heating degree day than the US average  Over the last 25 years, growth in Missouri’s per capita energy consumption has exceeded the US average and growth in electricity consumption has grown faster than average even though population growth was smaller than average  Missouri has over 20,000 MW of electric generating capability, about a third of which was added in the last 10 years or so and almost all of that is natural gas-fired 7

8. States where “we” are trying to go  What are the known challenges (e.g. vulnerability to carbon regulation) and the known opportunities?  What do we want over the long term? › If we transcend current beliefs about what is economic or technically feasible? › If we assume that the outcome is win-win for people applying and people supplying energy? › How would we know this place if we arrived there? 8

9. Examines the options to narrow it, considering:  Pace, as a result of considering: › Economics › Technology › Cultural conditions  And the ability to obtain feedback on the effects of the options taken to influence the next round of decision- making 9

10. Electric utilities provide energy services designed to enable the recipients of those services to safely and efficiently obtain and apply energy in their homes and businesses at a total cost to themselves and each other that is reasonable over the long term. 10

11.  It is “outside-in,” customer-to-utility, not utility-to-customer; it is the characteristics of energy services experienced, not offered  It makes relevant to the planning process (not just to cost effectiveness calculations) costs customers incur now, and will incur in the future, to achieve necessary outcomes with energy such as space conditioning, lighting, and motive power  It makes clear that shifting costs to each other or to the future is not the objective  It moves us beyond rates and bills 11

12. Effects (+/-) on people and nature of outputs or outcomes Value of output or outcomes Cost of structure or equipment + bills Utility bills Rates Utility Customer- Centric view (increasing scope) Societal/ Environmental view Utility-Centric view 12

13.  Useful to add clarity, particularly in a time of transition from one objective and set of expectations to another  Our suggestions: › Make explicit that energy services include both “traditional” cost-effective energy efficiency programs and fee-for-services that increase the efficient use of energy but may accomplish other customer objectives as well 13

14. › Designate the feedback on energy services as increases in the efficiency with which customers use electricity (this could be both cost and thermal) › Make explicit that planning encompasses not just meeting load growth but also assessing the current resource portfolio  In light of current and expected “community” energy policies and objectives  Against needs to reduce carbon or other emissions › Establishes energy efficiency as the preferred choice for load growth and realignment of existing resources 14

15.  The next decades promise high uncertainty around › The pace of technological change › The effects of demographic change on culture/beliefs and the economy › The nature of the emerging world economy  Flexibility is necessary to cope with planning for energy services in this context 15

16.  Plan for the Plan  Plan  Close 16

17.  In a collaborative process, the utility builds (or “refreshes” a view of “where we are now”  Using this, it works with stakeholders to identify: › Questions it needs to answer to develop a near- term set of resource actions › The tools it should use to answer those questions › The information it needs to gather or assumptions it needs to develop for use in those planning tools › The perspectives it is critical to have and how to get them 17

18.  Commission dockets a formal (and accelerated) process to consider the Plan for the Plan › Takes written and oral comments › Interacts with the utility and stakeholders  Commission issues a short order approving the Plan for the Plan with any modifications it deems necessary  Commission sets expectation that parties will participate fully and openly in the planning process, providing substantive comments and suggestions as soon as practicable 18

19. A simple process might include:  Workshops › Information and assumptions › Results of applying the tools  Various means of gathering perspectives  Utility preparation of a draft plan  Comments on the draft  Utility revisions to the draft, showing how it responded to the comments 19

20.  Commission dockets a process to consider whether : › The utility and stakeholders followed the Plan for the Plan › The proposed actions will further the fundamental objective (and any sub-objectives) of planning and include means of obtaining feedback on the outcome (e.g. savings goals met; gains in overall efficiency) › The plan is a good expression of what the utility and stakeholders believed was known or knowable at the time of committing to the actions  Commission issues an order › Finding the Plan meets these criteria; or › Directing the utility and stakeholders how to remedy any deficiencies so the Plan can meet the criteria 20