governor’s conference on energy federal/state/local role in permitting & regulating energy...
TRANSCRIPT
Governor’s Conference on Energy
Federal/State/Local Role in Permitting & Regulating Energy
Projects
October 16, 2013
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Indianapolis Power & Light Company (IPL)
• IPL supplies electricity to about 470,000 customers
• An Investor Owned Utility whose parent is the AES Corporation
• Most of IPL’s energy comes from the combustion of coal
• Available wind and solar generation about 7%
Monument Circle
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AES – The Power of Being Global
• The AES Corporation has– A widely
diversified generation mix
– Generating capacity > 40,000 MW
– In 27 countries on five continents
– $17 billion annual revenues
– A global force of more than 27,000 people
Natural Gas 37%
Coal 34%
Renewables24%
Oil, Diesel 5%
AES Generation Mix
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Significant spending at IPL on Environmentally Related Regulations and Considerations
• $600 million Spent in the Past 10 Years For Clean Coal Controls – NOx, SOx, PM reduction
• Additional ~$500 million being invested to comply with Mercury and Air Toxics Standards (“MATS”) at IPL’s largest coal units.
• ~600 MW of small coal units being shut down– 200 MW to be refueled with natural gas – 650 MW to be replaced with new gas fired combined
cycle project – ~$600 million of additional investment
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Some thoughts based on 25 years of developing power projects
• Electricity is a great and essential product• No perfect way to generate electricity
– What’s best or better changes over time (fuel prices, technology advances, environmental considerations, etc.)
– Diversification is important
• New power plant capacity will almost certainly be overwhelmingly be gas fired combined or simple cycle power projects for the next decade or longer
• Mercury and Air Toxic Standards (“MATS”) and other requirements are driving the retirement of a huge amount of coal fired capacity– Development of new gas fired combined cycle projects will continue to
steadily accelerate
• Developing a power project is a wildly challenging, multi-year, expensive and risky proposition. Most project efforts don’t succeed.
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Some thoughts based on 25 years of developing power projects
• Counties and states can scarcely do better than to attract a new gas fired combined cycle power project– Long term, high paying jobs; Long term, reliable property taxes; Economic
development (construction jobs, support services, downstream benefits)
• Local: Don’t let the vocal minority rule the county (or state or federal process)
• Local/State: Differences in regulations, reception and taxation can meaningfully influence where a developer expends resources to develop a power project
• State/Federal: New rules and regulations can result in huge costs to comply – Ultimately the utility customer will have to pay– Be mindful of the cost/benefit balance
• Local/State/Federal: – Definitive time line to decision– Consistent and sensible rules and regulations
Charlie Falter
(240) 381-7777
Governor’s Conference on Energy
Federal/State/Local Role in Permitting & Regulating Energy Projects