1. Governor Rod R. Blagojevich Climate Change Advisory Group Policy Option Modeling: Update Meeting of the Illinois Climate Change Advisory Group 130 West Mason Street, Springfield, IL April 3, 2007 Governor Rod R. Blagojevich Climate Change Advisory Group

2. Why model? Examine different policy scenarios, including sensitivities Examine the cost of policy packages Assess interplay between policy options

3. Governor Rod R. Blagojevich Climate Change Advisory Group Timeline Cost Capability Track record Factors influencing choice of model approach

4. Governor Rod R. Blagojevich Climate Change Advisory Group Power sector modeling with separate analysis for other sectors New Policies Transport - VMT - mode switching Power - dispatch - electricity prices - new builds Industry Commercial Residential Agriculture - production - efficiency Energy Prices Energy Demand GSP Employment Emissions - reductions - cost of reductions REMI Modeling of Macroeconomic impacts Separate Analyses Modeling

5. Governor Rod R. Blagojevich Climate Change Advisory Group Next steps: Subgroup considerations Reference Case –3 critical assumptions for power sector modeling: Price of natural gas Rate of electrical load growth Cost and performance of new power plants –Off the shelf assumptions from EIA and EPA available Determine which policies are appropriate for modeling Report to CCAG

6. Governor Rod R. Blagojevich Climate Change Advisory Group Discussion Questions and Comments