Climate strategies for public officials: Tri-State’s Greenhouse Gas Management Roadmap Lee Boughey Southwest Renewable Energy Conference September 16, 2010

TRI-STATE G&T Consumer-owned, not-for- profit wholesale power supplier to 44 member co-ops Initiatives Improving existing fleet Renewable energy Transmission development Developing options to manage GHG risk New technology is critical

GREENHOUSE GAS REGULATION There are economic and operating risks associated with potential regulation of greenhouse gas emissions For utilities, managing these risks requires optionality for resource choices and technology adoption Technology development delivers hedge against regulatory uncertainty

EPRI PRISM AND MERGE ANALYSIS FOR MEETING A CARBON CONSTRAINED FUTURE Analytical framework to identify areas and actions with a carbon reduction impact Supports need for optionality

GREENHOUSE GAS MANAGEMENT ROADMAP Outlines Tri-State’s process to evaluate its potential to manage the risks associated with potential GHG regulations Places focus on technology studies, assessments and R&D Received Technology Transfer Award from EPRI

NEW TECHNOLOGY DEVELOPMENT Carbon capture and sequestration Fossil hybrid integration Energy storage CO 2 capture demonstration projects Co-funded project to evaluate the Alstom chilled ammonia process WE Energies Pleasant Prairie project began March 2008 and completed in late 2009 Demonstration used to scale-up to a 30 MW equivalent demonstration at AEP plant AEP project to run five years and sequester CO 2 into underground saline aquifers

NEW TECHNOLOGY DEVELOPMENT CO 2 mitigation and sequestration analyses Translate past, present and future projects into impact on CO 2 emissions Quantify costs of projects in $/metric ton CO 2 Assess potential for storage of CO 2 in vicinity of generation plants Carbon capture and sequestration Fossil/renewable integration Energy storage

NEW TECHNOLOGY DEVELOPMENT CO 2 sequestration study in Western Colorado Partners include Tri-State, U.S. DOE, Colorado Geological Survey and other state’s offices, University of Utah, Southwest Carbon Partnership, Shell and Schlumberger Will characterize promising carbon sequestration formations near Craig Station Field operations including core-drilling, structural mapping and fluid analyses will be performed to refine capacity, injectivity and containment Carbon capture and sequestration Fossil/renewable integration Energy storage

NEW TECHNOLOGY DEVELOPMENT Escalante Station solar augmentation project Hosting EPRI study on feasibility of integrating concentrated solar power technology with coal-based power plant If economical, could provide options to reduce emissions and increase efficiency Carbon capture and sequestration Fossil/renewable integration Energy storage

NEW TECHNOLOGY DEVELOPMENT Nucla Station biomass co-firing Tri-State’s Nucla Station uses atmospheric circulating fluidized-bed combustion that could support co-firing with biomass Tri-State has evaluated technology and economics of co-firing biomass Fuel delivery remains a challenge Carbon capture and sequestration Fossil/renewable integration Energy storage

NEW TECHNOLOGY DEVELOPMENT Compressed air and battery energy storage Energy storage can support better integration of variable energy resources With EPRI, examining above ground compressed air energy storage; will provide also inform below ground storage CRN and EPRI research into energy storage through batteries Carbon capture and sequestration Fossil/renewable integration Energy storage

RENEWABLE ENERGY DEVELOPMENT Member distributed generation and renewables Highline Electric and La Plata Electric recovered energy facilities in Colo. Kit Carson Electric Solar in NM. San Miguel Power hydro facility in SW Colo. Poudre Valley REA methane gas facility in northern Colo. Delta-Montrose EA hydropower project in western Colo. Local projects Utility scale projects

RENEWABLE ENERGY DEVELOPMENT Tri-State solar and wind energy projects 30-megawatt (AC) Cimarron solar photovoltaic project with First Solar will be on- line by end of the year. New Mexico project includes 500,000 thin film solar panels 51-megawatt Kit Carson Windpower Project with Duke Energy will be online at end of year. Eastern Colorado project includes megawatt GE wind turbines Local projects Utility scale projects

ENERGY EFFICIENCY Tri-State consumer/industrial efficiency programs and study Since 1985, Tri-State has offered through its member cooperatives rebate incentives to buy down the first cost of electric technologies that represent a value for its member co-ops through the reduction of future costs Completed comprehensive assessment of the opportunities for consumer energy efficiency and demand reduction measures across its four-state system Consumer/industrial efficiency Utility efficiency

ENERGY EFFICIENCY Fleet and transmission efficiency improvements One of the most significant opportunities for overall reductions in its direct GHG emissions lies in improvements to its existing facilities Tri-State has undertaken significant steps to identify and pursue improved efficiencies within its existing generating fleet and transmission system Consumer/industrial efficiency Utility efficiency

PRUDENT STEPS FOR UTILITIES TO MANAGE GHG REGULATION RISKS IN UNCERTAIN ENVIRONMENT Ensure needed generation and transmissions investments for affordability and reliability until new technologies become commercially available Continue to invest in fleet efficiency Continue to invest in technology research, development, demonstration and commercialization Pursue multiple resource and technology options Encourage energy efficiency and demand-side management help address load growth and shape

PRUDENT CLIMATE POLICY APPROACH FOR PUBLIC OFFICIALS Pursue policies through the U.S. Congress that specifically address climate and energy Federal policies must: Ensure affordability Support reliability Invest in technology Require appropriate timeframes for implementation Incorporate international participation Serve the purpose of reducing GHG