6.1a. ERMUSR 09-08-2015 - Laserfiche WebLink

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RI ENERGVER Clean Power Plan Position GREAT Y,M 12300 Elm Creek Boulevard Maple Grove, Minnesota 553694718 • 763 445-5000 • greatriverenergy,com On August 3,2015,the U.S. Environmental Protection Agency(EPA) issued its final Clean Power Plan (CPP) regulating carbon dioxide (CO2)emissions from existing power plants.Although Great River Energy staff are still studying the CPP and analyzing its impact, it is clear the rule imposes stringent requirements on power plants across the nation, including our Coal Creek,Stanton and Spiritwood Stations. Great River Energy's approach to the business issue of climate change and carbon regulation Great River Energy has long recognized that impending carbon regulation is a business issue of the first magnitude. For that reason we have taken steps to prepare for regulation and have actively engaged in the debate. Our view has been that we will be better able to create value for our members if we engage in the process.We want to help ensure CO2 regulation is implemented in a way that best preserves reliability and affordability for our members. Now that the final CPP has been issued,we believe engagement is more important than ever. Regardless of whether the CPP survives court challenges,CO2 emissions from power plants will be regulated.After the U.S.Supreme Court ruled in 2007 that greenhouse gases are pollutants under the Clean Air Act,the EPA became obligated to begin the process of regulating CO2. If the CPP is overturned,another regulation will take its place. Although the CPP is stringent, it will at least provide our industry with needed clarity. In the absence of any certainty,we have implemented approaches we believe are effective in any scenario,such as accelerating depreciation on Coal Creek and Stanton Stations. In addition,without CO2 regulation at the federal level, states like Minnesota have filled the void with a patchwork of laws to address climate change.We believe federal guidance and a consistent approach regarding CO2 regulation are preferable to state-by-state approaches.Today,we are faced with many decisions, such as the strategic evolution of our portfolio,which will be more clear once we see how the states implement the CPP. For all of these reasons,we believe the wisest course is to continue to engage in the process.Therefore,we are devoting our resources to understanding the CPP and finding opportunities to minimize its cost impacts. Great River Energy is well positioned to thrive in a carbon constrained environment The CPP sets North Dakota's CO2 intensity goal at 1,305 lbs/MWh,which is tied for the least stringent in the United States, but still substantially below current state levels. Great River Energy owns three of the most efficient power plants in North Dakota, positioning us well to comply with the CPP. • Coal Creek Station emitted CO2 at a rate of 2,276 lbs/MWh in 2014, due in part to the DryFining TM coal refining technology. • Stanton Station emitted 2,154 lbs/MWh of CO2 in 2014. Its lower rate is due in part to the use of Powder River Basin coal. • Spiritwood Station is the most efficient plant of all. Due to its combined heat and power(CHP) design,and based on EPA's own methodology for determining the CO2 efficiency of CHP plants,we project Spiritwood will emit CO2 in a range of 1,100 to 1,300 lbs/MWh,which is below the goal the CPP sets for North Dakota. The final CPP recognizes the importance of baseload coal to reliability.As stringent as the CPP is, most of the nation's coal plants would still be operating after full compliance with the CPP in 2030.Those plants that survive—the last ' plants standing—will be the most efficient. 183