Prairie State Generating

Company Next Generation of Coal

1

The Campus

2

The Energy Campus

• Power Plant and Coal Mine on same campus

• Best Available Control Technology allows for use of Illinois Basin Coal

• Nearly 7 Million Tons of Coal Mined Annually to fuel 1,600 megawatt Power Plant

• Largest coal power plant built in the U.S. since 1982

• 4,000 construction jobs at peak; more than 500 permanent jobs

3

4

Prairie State’s Owners Serve More

Than 2.5 Million People In Eight States

AMP

368 MW

Indiana Municipal Power

200 MW

Missouri Joint Municipal

Electric Utility Commission

195 MW

Prairie Power, Inc.

130 MW

Illinois Municipal Electric

240 MW

Southern Illinois

Power Cooperative

125 MW

Northern Illinois Municipal

Power 120 MW

Kentucky Municipal Power

124 MW

Lively Grove Mine

5

Power Plant

6

The Prairie State Environmental Difference

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• Super Critical Technology

• Runs at a higher temperature and pressure

• Less coal needed = Less CO2

• Without accounting for $1 billion investment in air quality control system, produces 15 percent less CO2 than the typical U.S. coal plant

• Mine mouth design completely eliminates CO2 emissions associated with coal transportation

How Prairie State Reduces CO2

8

Why Coal? Why now?

9

Electricity Enables People to Live

Longer and Better

United Nations Links Affordable Energy to Quality of Life

*CIA World Fact Book 2009, U.N.’s Development Program’s Human Development Report, 2009

10

Low-Cost Electricity from Coal

*Energy Information Administration, February 2012 11

Decades of Declines:

Lowest Income Pay Price for Inaction

*American Coalition for Clean Coal Electricity, “Energy Cost Burdens on American Families,” Trisko, 2010. 12

Second Act for Illinois Coal

• 300-year history in the

state

• 65 percent of the state’s

geography

• 38 Billion Metric Tons of

coal

• More BTUs than foreign

oil supplies

• High energy producing

10,000 – 14,000 BTUs/lb

13

Why Coal is Here to Stay

*U.S. Energy Information Administration │ Annual Energy Outlook 2012 363(12)

Average Natural Gas Prices Average Minemouth Coal Prices

14

Prairie State’s Economics

• Base load, responsible,

reliable power for its

Owners at low $50’s per

Megawatt Hour

• Midwestern Megawatt

Hour Prices = $200 -

$2,500 during summer

months

• PSGC’s coal cost is

very stable

• Availability = Demand

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

2011 2015 2020 2030

Natural Gas Coal PSGC Coal

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Prioritize Energy Reduction Opportunities (TBL)

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

Illin

ois

Fo

rwar

d C

apac

ity

Pri

ces

(201

2$/k

W/Y

ear)

Illin

ois

Fo

rwar

d E

ner

gy P

rice

(201

2$/M

Wh

)

Comparison of MISO - Illinois Forward Energy and Capacity Prices

2008 Forward Capacity Price ($/kW/Year)

2012 Forward Capacity Price ($/kW/Year)

2008 Forward ($/MWh)

2012 Forward ($/MWh)

Increase due to assumed GHG Pricing

Comparison of MISO Forecasts

16

Prioritize Energy Reduction Opportunities (TBL)

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Ener

gy P

rocu

rem

ent C

ost

(201

2$/M

Wh

)Comparison of Energy Procurement Cost - Prairie State vs. Market

(Assumes Customer with 60% Load Factor)

Market Cost at 60% Load Factor ($/MWh)

Prairie State Cost at 60% Load Factor ($/MWh)

Levelized CostPrairie State: $60.75/MWhMarket Purchases: $63.03/MWh

Energy Procurement Cost Comparison

17

Clean Coal Technology, A Success Story

*EPA’s Clean Air Markets database, July 2011; Project Permits, FutureGen Environmental Impact Study, November 2007 18

Questions?

19