Power Generation and Public Policy: What Might the Future Hold? - Presentation by John Shelk, Electric Power Supply

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John Shelk, Electric Power Supply - Speaker at the marcus evans Generation Summit 2013, held in Dallas, TX, delivered his presentation entitled Power Generation and Public Policy: What Might the Future Hold?

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Power Generation and Public Policy: What Might the Future Hold? - Presentation by John Shelk, Electric Power Supply

  1. 1. Title Page g GENERATION SUMMIT 2013 “Power Generation and Public Policy: What Might The Future Hold?” John E. Shelk, EPSA President & CEO , Monday, February 25, 2013
  2. 2. OVERVIEWWho does EPSA represent?What market fundamentals and business trends are key to ypower sector public policy issues?What might the future hold for public policy issues thatimpact the power generation sector? 2 2
  3. 3. Who does EPSA represent? Leading Independent Power ProducersCalpine GDF SUEZ Energy N.A.Capital Power p Northern Star GenerationDynegy NRG EnergyEdison Mission Energy TenaskaEquiPower Resources US Power Generating Co Co. 3 3
  4. 4. Competitive Supply Affiliates of Major Utility Companies Exelon Corp. Corp PPL Corp. PSEG Power Sempra U S G & P S U.S. Gas PowerPower Marketing BP Energy Co. Shell Energy North America 4 4
  5. 5. Key Characteristics About EPSA MembershipCEO and Senior Executive Driven on Policy PrioritiesNationwide with emphasis on organized wholesale marketsPrimary suppliers in key metro areas coast-to-coastAll fuels and technologies to generate electricityLargest natural gas, nuclear and solar electricity suppliersLeaders on controlling emissions from coal-fired plantsLargest retail competitive suppliers in addition to wholesaleEPSA works with State and Regional Partner trade groupsEPSA focuses on federal legislation and regulation 5 5
  6. 6. EPSA Strategic Direction 2013 Onward (Summary)Mission: Promote well-functioning, fair, robust and competitive wholesale markets h l l kPriorities: Improve wholesale market rules; oppose utility self- p ; pp y build; influence Demand Response policies; promote non-discrimination as to existing/new sources, technologies and fuelsActively Monitor: Retail market issues, technology developments, and environmental matters as d l d i l to impacts on wholesale markets 6 6
  7. 7. What market fundamentals and business trends are key to power sector public policy issues? Lowest wholesale prices in organized market history Low natural gas prices, natural gas often at the margin Excess power supply in most if not all wholesale markets Weak demand growth – temporary or structural? Growth in footprint/customers of organized markets Significant political intervention in electricity markets Extensive regulation of all aspects of the power business The “ribbon cutting syndrome” and “anvils” on the scales 7 7
  8. 8. What might the future hold for key public policy issues? Themes Electricity is transformational and foundational Everyone says “all of the above” but what does it mean? Everyone says “fuel diversity” but what does it mean? Competitive market forces should work here as elsewhere p For competition to work, must let “markets be markets” Regulation should produce well-functioning markets Political pressures in cost-of-service and competitive states cost of service 8 8
  9. 9. “Lightning Round on Key Public Policy Issues” Congress: More of the Same Dysfunction?Climate ChangeClean Energy StandardCl E St d dCyber SecurityEnergy EfficiencyNatural Gas ExportsSenate “advise and consent” on nominationsCongressional oversight 9 9
  10. 10. Regulation: Where The Action Is and Will Be! EPAGHG New Source Performance Standards-New PlantsGHG N S New Source P f Performance St d d E i ti Plants Standards-Existing Pl tFurther Action on Mercury and Cross-State RulesOnce Through Cooling (“316(b)” Water Issue)Coal Ash Combustion WasteRegulation of “Demand Response” Back Up Generators 10 10
  11. 11. Regulation: Where The Action Is and Will Be! Federal Energy Regulatory CommissionCapacity Markets and Resource Adequacy GenerallyGas/Electric CoordinationNERC R li bilit Standards and Cyber Security Reliability St d d dC b S itDemand Response CompensationMarket Mitigation (Over-Mitigation)Order 1000 transmission planning (displace generation?)Enforcement Actions and Theories on Market ManipulationFERC and State Actions that Distort Wholesale Markets 11 11
  12. 12. States as Laboratories of Democracy In Electricity, Too! Utility Self-Build – Case Study of Virginia Compare and Contrast – IL/PA/OH versus Michigan Are we repeating the 1970s/1980s in cost-of-service states? e cost of ser ice 12 12
  13. 13. Rumsfeld’s Rules: Watch Out for Unknown, Unknowns!What is the next game changing, disruptive development? Policies on climate change and renewable energy? Technological developments bring down costs of solar? Electric hi l ? El t i vehicles? Distributed Generation/Demand Response/Efficiency? Energy storage? Greater retail competition? Key – will still need conventional generation and it must be fairly compensated, whether market based or cost-of- market-based cost of service, as nature of demands for it may change over time 13 13
  14. 14. John E. Shelk President & CEOElectric Power Supply Association 1401 New York Ave., NW Suite 1230 Washington, DC 20005 Telephone: (202) 628-8200 Fax: (202) 628 8260 628-8260 E-mail: jshelk@epsa.org Website: www.epsa.org 14 14

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