1. IEP’s 34th Annual Meeting - 2016 Challenges for the Independent Power Industry Panel Joe Greco

2. Overview Market Opportunities Market Challenges
Valuation Needs and Developments

3. Market Opportunities California’s 50% RPS CARB reduction goals
OTC and Nuclear Facility closures
CAISO’s expansion
Western markets effort to value transmission and true integration costs
PTC/ITC extension
Geothermal parity being considered
CA and Western States have abundant geothermal resources
EPA Clean Power Plan Clean Energy Incentive
Program

4. Policy Impact on U.S. Industry
PTC reenacted for 2 years
Megawatts

5. Reliability and Cost Benefits
System reliability is critical
Renewable baseload generation offers system stability
Baseload generation offers stability to allow renewable diversification
Ramping capabilities offer system flexibility
Expanded ISO and EIM create options
Renewable integration needs to be fully evaluated
Curtailments effect overall system costs and individual generators
Renewable baseload generation offers opportunities to minimize curtailments
Transparency is needed to assess true cost impacts to ratepayers
Local economic benefits
High property and sales taxes
High paying construction and operations jobs in rural communities
Highest number of permanent local jobs

6. Geothermal Market Impacts
Federal and State subsidies for renewable choices become asymmetrical
State policies promote least cost on a project by project basis
True system impacts may be overlooked
Utility evaluations may be impacted by policy
State policies do not appropriately recognize baseload value
Replacement for coal; improved GHG region wide
Natural gas prices remain low

7. Geothermal Challenges
Long permitting and development cycles
Plant designed after resource is proven
Resource development risk
Majority of wells must be drilled prior to financing; all fuel is purchased prior to COD
Wells depths range from 3,000 to 11,000 ft.
Resource locations designate interconnection costs
Limited equipment manufacturer competition
Gaining full economic value for system benefits

8. Industry Challenge: Understanding Factors that will Enhance Renewable Baseload Generation
How can we improve the true evaluation of increased renewable penetration?
What are transmission and reliability needs?
Are distributed generation impacts fully understood?
Will an ISO expansion improve economics?
What approach are utilities taking to incorporate renewable baseload generation?
How can policies be implemented that foster existing fleet and new growth?
How to restore value for diversity in power supply procurement?

9. Thank You