Hodnik - Environmental Progress and Challenges

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Hodnik - Environmental Progress and Challenges

  1. 1. Environmental Progress and Challenges Margaret HodnikVice President – Regulatory and Legislative Affairs 1 April, 2012
  2. 2. Overview•  Fleet evolution•  Emission reduction progress to date•  Further emission reduction2
  3. 3. Customers at a Glance•  Large Industrial Customers•  High Load Factor•  16 Municipal Wholesale Customers•  141,000 Electric Customers Taconite 34% Other 52% Paper & Pulp 12% Regulated Utility MWH Sales Pipeline 2% 3
  4. 4. Our Constant Responsibility •  Provide a balanced regional energy supply, i.e., •  affordable, reliable, minimizes environmental impact •  support a competitive business environment and an exceptional quality of lifeFleet Evolution Since 2005 •  Reduced emissions: 70% system-wide •  Added renewables: 20% by 2013 •  Lead / exceed state conservation goals (2.1% in 2011)4
  5. 5. Power Supply PrinciplesResults in a competitive, compliant and socially responsible regional power supply 5
  6. 6. Delivering Energy SavingsMP Conservation Results 80,000,000 2.5% MN Conservation 70,000,000 Goal of 1.5% 2.0% 60,000,000 50,000,000 1.5% PowerGrant Triple E PluskWh 40,000,000 Energy Partners - Low Income 1.0% Percent of Savings 30,000,000 20,000,000 0.5% 10,000,000 - 0.0% 2004 2005 2006 2007 2008 2009 2010 * 2011 Year*2011 Results filed April 2012 6
  7. 7. Cost Effective Emission Reductions To Date 60,000 50,000 40,000 Annual Tons 2005 30,000 2011 20,000 10,000 0 NOx SOx PM Hg in lbs Total7
  8. 8. Mercury Emissions – Past/Projected THEC LEC 400 BEC 4 BEC 3 350 BEC 1&2 300mercury, lb/year 250 200 2016 - Estimated mercury emissions 150 associated with anticipated controls 100 50 0 2005 2010 2016 8
  9. 9. Reshaping for Long-Term MP Energy Sources in 2012 MP Energy Sources in 2024 Latest Integrated Resource Plan Market Purchases Market 11% Purchases Expanded 8%Manitoba Existing 1% Conservation Coal 1%MHEB ShortTerm 75% 1% Manitoba Wind LongTerm Coal 6% 11% 53% Hydro 4% Biomass Wind 2% 21% Hydro Biomass 4% 2% 9
  10. 10. Positioning for the Best Resources Access to Canadian Hydro Generation Access to quality wind sites in U.S. Ontario Manitoba Minn. •  Capacity factor 43-45%, double the U.S.•  New 250 MW contract with Manitoba through 2035 ü  Power Purchase Agreement ~ Approved average •  60,000 acres ü  Transmission ~ Under development ü  Bison 1 ~ Complete •  Bison 2 Under •  Bison 3 Construction 10
  11. 11. Resource Plan Strategy•  Continue strong conservation program•  Further reshape generation portfolio –  Diversify fuel supply –  Accelerate carbon reduction –  Continue ND wind implementation –  Deliver Manitoba Hydro resource –  While remaining reliable, cost competitive11
  12. 12. Further Emission Reductions•  EPA rules in formation to further reduce air, water and waste emissions are projected to have 2 to 3 times the cost of MP environmental retrofit initiatives completed between 2006 and 2010.•  Investments at Boswell 4 (largest unit) are showing environmental and economic benefits for customers for the long-term.•  Costs of anticipated controls to meet new EPA requirements impact Minnesota Power s smaller and oldest units the most.•  Coal based generation shutdowns would carry significant costs to customers, including those associated with transitioning to new energy supply options.12
  13. 13. Moving ForwardWe will ensure a regional energy supply that is: •  affordable, •  reliable, •  reduces environmental impact and •  promotes a competitive business environment and an exceptional quality of life.13
  14. 14. Margaret Hodnik Vice President – Regulatory and Legislative Affairs mhodnik@mnpower.com14

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