Southern California Energy SummitPalm Springs, California • October 4-5, 2012

Jonathan M. WeisgallVice President, Legislative & Regulatory Affairs

MidAmerican Energy Holdings Company

The dilemma: We spend more than we take in

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MidAmerican Owned Wind Resources

MidAmericanEnergy CompanyIn-service –1,877.7 megawatts

199920042005200620072008200920102011

Total

2012

Total

PacifiCorpMidAmerican

Energy Total32.1

--

100.5140.4381.7265.5111.0

-

1,031.2

-

1,031.2

$2.1

-160.5200.099.0201.5623.3

--

593.4

1,877.7

407.1

2,284.8

$3.9

32.1160.5200.0199.5341.9

1,005.0265.5111.0593.4

2,908.9

407.1

3,316.0

$6.0Investment (billions)

Owned Wind Generation (MW)

In construction 2012 –407.1 megawatts

PacifiCorpIn-service at acquisition date –32.1 megawatts

In-service since acquisition –999.1 megawatts

–9 percent of total owned generation capacity

–In addition, 937 megawatts contracted through purchased power agreements

–385 megawatts planned 2018-22

–29 percent of total owned generation capacity

–In addition,109 megawatts

contracted through

purchased power

agreements

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• No price on carbon• Natural gas• Customers• Climate change debate• Political arena• Renewables

– Tax incentives– Transmission

Uncertainties in the market

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• Taxes:– PTC– ITC

• Spending:– Loan guarantees– Research and development

• Regulate:– Federal RPS– EPA regulations of coal plants – impact on renewables

What can Congress do?

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• Year-end fiscal cliff• Tax extenders bill• Under construction by 12-31-13 – not on-line• Wide support among Democrats and Republicans –

but Romney opposition• How to justify against tax reform, deficit reduction,

corporate welfare• Phase-out • What happens if PTC isn’t extended?

PTC extension – wind

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• Basic R&D funding• Regulatory certainty and longevity:

– PTC?– ITC?– Bonus depreciation?– Federal clean energy (or renewable portfolio)

standard? – Master limited partnership structure (or REIT)?

• Other ways to “de-risk” development

What does the renewable industry need?

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• R&D funding?• Department of Defense spending?• PTC extension?• ITC?• Clean energy standard (renewable) standard? • Cap and trade? • More stimulus funding?• Loan guarantee program? • §1603 Treasury grant in lieu of credit?• Federal feed-in tariff? • Carbon tax?

What will the renewable industry get?

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• MLP/REIT – counter to tax reform?• Treasury grants out; need partner with tax appetite• Risk mitigation• How to incorporate new technologies?• Other factors affecting industry• Backstop of state RPS programs• Certainty and longevity – California’s record

New business models needed