1. U. S. CLIMATE CHANGE LEGISLATION
Mike Stroben November 11, 2009

2. DUKE ENERGY POSITION ON CLIMATE CHANGE LEGISLATION
Duke Energy Supports the Enactment of Economically and Environmentally Sustainable Federal Climate Change Cap – and - Trade Legislation
Economic Sustainability Includes Provide Adequate Consumer Price Protection
The Question of Whether GHG Regulation Is Coming Is Settled
EPA is moving to regulate – set to do so in March of 2010
Duke Energy Prefers a Legislative Approach
EPA lacks the legislative authority to craft an environmentally sound program that protects the economy and consumers
A program that can have such broad economic implications for the country’s economy should be the responsibility of an elected and accountable Congress

3. ELECTRIC SECTOR ALLOWANCE ALLOCATION CRITICAL TO CONSUMER PRICE PROTECTION
H.R Allocation Provisions
2012 Allocation Equal to About 85% of Sector’s 2005 CO2 Emissions
Local Distribution Company Allocation Is Split 50/50 Between Emissions and Retail Sales
Duke Energy Carolina Customers Fare Relatively Well Under This Allocation Formula Because of Nuclear Generation
Value of Allowance Allocation Must Flow Back to Customers
Allocation Phases Out Entirely In 2030
Allocation Much Improved From Where Debate Began – Full Auction

4. DUKE ENERGY POSITION ON H.R. 2454
A Step in the Right Direction But it Can Be Improved
As the legislative process moves forward in the Senate Duke Energy will work to win improvements to the legislation to benefit our customers
Implementation schedule and cap trajectory
Size of electric sector allocation and phase-out schedule
Cost-containment mechanisms
Price collar
Offsets
Exemption from EPA regulation
Support for deployment of new nuclear units

5. MOVING FORWARD IN THE SENATE
Senate Environment and Public Works Committee Reported Out a Bill Last Week
Republicans boycotted the process
Senate EPW bill dead on arrival
Senate leadership will craft a bill for floor consideration
Senate Finance Committee Will Work on Allowance Allocations
Floor Action Won’t Occur Until 2010
Health care
Finance reform
Expect Any Bill Passed By the Senate to Be More Favorable to Consumers Than H.R. 2454

6. DUKE ENERGY POSITION ON S. 1733
A Step in the Wrong Direction – Must Be Improved
Allocation to Electric Sector Reduced
Inadequate Exemption from EPA Regulation
Nothing for New Nuclear Unit Deployment

7. EPA WILL REGULATE GREENHOUSE GAS EMISSIONS UNLESS
Supreme Court Ruled In April 2007 That EPA Has the Authority to Regulate GHG Emissions Under the Clean Air Act
EPA Now Using That Authority
EPA Proposed a Rule to Regulate GHG Emissions From New Motor Vehicles – Plans On Finalizing By March 31, 2010
Once finalized the door is open for EPA to regulate other sources
Automatically triggers Prevention of Significant Deterioration permitting requirements for major stationary sources of GHG emissions
EPA proposed a rule to reduce the number of sources subject to PSD but…