1. Illinois Governor Rod R. Blagojevich Climate Change Advisory Group (ICCAG) Modeling of Policy Proposals July 10, 2007 DRAFT – Numbers subject to revision

2. 2 Policy Proposals

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4. 4

5. 5 Portfolio Scenarios Portfolio Runs: (In addition to the Reference Case) Portfolio Runs: (In addition to the Reference Case) All strategies approved for modeling by the ICCAG (All-In) excluding CT-05-12. All strategies approved for modeling by the ICCAG (All-In) excluding CT-05-12. (Note – CT-10-16 included in All In but CT-05-12 excluded at present)(Note – CT-10-16 included in All In but CT-05-12 excluded at present) All-In with linkage to the RGGI states. All-In with linkage to the RGGI states. All-In: Assume high oil and natural gas prices (based on RGGI high prices) All-In: Assume high oil and natural gas prices (based on RGGI high prices) All-In minus the Cap and Trade (CT-10-16) proposal All-In minus the Cap and Trade (CT-10-16) proposal

6. 6 Optional Runs: (if time and resources permit) Optional Runs: (if time and resources permit) For each run all Policies with the following changes : For each run all Policies with the following changes : 1. Minus proposal EP-50-09, CCS Portfolio Standard. 2. Minus cap and trade plus a modification of Proposal EP-05-05, Carbon Performance Standards, to include existing sources as well as new sources (effectively Carbon Performance Standard replaces Cap and Trade). 3. Apply cap and trade to existing sources only (carbon performance standards still apply to new sources). 4. For Proposal TR-10-18, California Vehicle Emissions Standards, assume change to vehicle purchase price as per auto manufacturers projections. 5. With Proposals CI-40-02 (Tree Planting), CI-10-21 (No-till Farming), and CI-30-11 (Methane Capture) eligible as offset projects under Cap and Trade but not eligible for other new incentives. Portfolio Scenarios

7. 7 Illinois GHG Emissions – Base Case

8. 8 Illinois GHG Emissions- with Policies

9. 9

10. 10 Policy Leakage A portion of emission reductions associated with some policies may occur outside of Illinois. A portion of emission reductions associated with some policies may occur outside of Illinois. Model tracks emissions in Illinois, surrounding region and balance of continent. Model tracks emissions in Illinois, surrounding region and balance of continent. Additional analysis will be provided to identify policies subject to such leakage Additional analysis will be provided to identify policies subject to such leakage

11. 11 Policy Leakage Initial policies identified as affected by leakage Initial policies identified as affected by leakage Electric energy efficiency policies – power may still be generated for sale outside of Illinois. Electric energy efficiency policies – power may still be generated for sale outside of Illinois.

12. 12 Questions?