1. 1 Colossal Mistake—Long-term Price Projections $3 $6 $9 $12 $15 1990199119921993199419951996199719981999200020012002200320042005 $/mmBtu Natural Gas Oil Coal EIA AEO1996 $2.31 $40/bbl $65/bbl

2. 2 Gasification—Domestic Supply Option Gasification

3. 3 EPACT2005 Summary of Gasification Incentives

4. 4 Loan Guarantees: Access to Capital & Lower Cost IGCCSCPCNGCC ($6 gas) NGCC ($10 gas) IGCC with Loan Guarantee Cent/KWh - 2 4 6 8 10 12 Fuel Capital + O&M Capital + O&M Capital + O&M Capital + O&M 4.6 4.4 5.8 8.5 3.9 Capital + O&M Energy Costs 2 4 6 8 10 12 $/MMBtu Syngas with Loan Guarantee Conversion Fuel Natural Gas Price 14 Gas Costs

5. 5 No Appropriations needed under 3Party Covenant -- 80% loan guarantee -- Lower cost of capital -- Low risk scoring Federal Government ProvidesReceives State PUC -- Assured revenue stream -- Lower electricity/gas rates -- Jobs and development -- 20% equity -- EPC warranties -- Full Cost Recovery Owner