Environmental Initiative Policy ForumNatural Gas and Minnesota’s Energy Future –         The Gas Utility Perspective      ...
Impact on Gas Utility Planning andInvestment•    Gas utilities are different than electric utilities in that we     don’t ...
Inexpensive Gas does change ourfuture growth potential•    Abundant, affordable natural gas makes it more likely that     ...
Benefits of Natural Gas   Natural gas provides a number of benefits to U.S. consumers:                              Afford...
Key Benefits of GasRecent developments in the Natural Gas industry have createdcompelling benefits compared to other forms...
Key Benefits of GasRecent developments in the Natural Gas industry have createdcompelling benefits compared to other forms...
Growth areas due to abundant andaffordable natural gasElectric Generation•   Significant switching from older coal-fired g...
Growth areas due to abundant andaffordable natural gasCombined Heat & Power (CHP)•  An efficient way for customers to prod...
Growth areas due to abundant andaffordable natural gasNatural Gas Vehicles (NGVs)•  Natural gas vehicles – using natural g...
Background on Energy Efficiency inMN            CIP Spending Since 1992 (in millions)$28                                  ...
Background on Energy Efficiency inMN                     Historical CIP Energy Savings (MCF) 	  1,600,000 	  1,400,000 	  ...
SummaryØ  Natural gas provides a lot of benefits to US consumers    (affordable, abundant, domestic, and clean)Ø  The st...
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Policy Forum Series: Daugherty - Natural Gas & Minnesota's Energy Future, the Gas Utility Perspective

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Policy Forum Series: Daugherty - Natural Gas & Minnesota's Energy Future, the Gas Utility Perspective

  1. 1. Environmental Initiative Policy ForumNatural Gas and Minnesota’s Energy Future – The Gas Utility Perspective Jeff Daugherty Director of Regulatory Affairs CenterPoint Energy September 21, 2012
  2. 2. Impact on Gas Utility Planning andInvestment•  Gas utilities are different than electric utilities in that we don’t need to plan for and build the production and transmission components, i.e., gas production wells and interstate pipelines•  Gas utilities typically build out their distribution systems based on current customer needs and shorter-term projections•  Thus, inexpensive natural gas does not significantly change how we plan and invest in our distribution system. 2
  3. 3. Inexpensive Gas does change ourfuture growth potential•  Abundant, affordable natural gas makes it more likely that customers will choose natural gas for their space heating, water heating, and other applications•  The direct use of natural gas produces significant environmental benefits, which is driving growth in new natural gas applications 3
  4. 4. Benefits of Natural Gas Natural gas provides a number of benefits to U.S. consumers: Affordable Comfortable Abundant Better for the Domestic Environment Economic Development/ Energy Security 4
  5. 5. Key Benefits of GasRecent developments in the Natural Gas industry have createdcompelling benefits compared to other forms of energy Clean-burning natural gas costs less to use than any Affordable other energy source - about half the cost of other fuels, including electricity. There is more than a 100-year supply of natural gas in Abundant the United States. 98 percent of the natural gas used in the U.S. comes Domestic from North America. 5
  6. 6. Key Benefits of GasRecent developments in the Natural Gas industry have createdcompelling benefits compared to other forms of energy Economic The natural gas industry currently employs nearly three Development/ million Americans and provides a huge boost to the Energy Security American economy. A home that uses natural gas for heating, water heating, Better for the cooking and clothes drying leaves about half the carbon Environment footprint of an all-electric home. Natural gas water heaters recover twice as fast and Comfortable natural gas furnaces deliver air at a much warmer temperature compared to electric models. 6
  7. 7. Growth areas due to abundant andaffordable natural gasElectric Generation•  Significant switching from older coal-fired generation to newer combined-cycle gas generation•  Natural gas generation is much cleaner than coal: 50% lower CO2; 72% less NOx; 99% less SO2; 100% less Mercury•  Note – in a recent EIA report, US CO2 emissions for the 1st quarter of 2012 were at their lowest levels since 1992, with coal to gas switching for EG being a key reason.•  Also, while lower gas costs are driving more gas generation now, much of the future growth in gas generation will be driven by more stringent environmental standards (e.g., MATS, NAAQS, Regional Haze, GHGs) 7
  8. 8. Growth areas due to abundant andaffordable natural gasCombined Heat & Power (CHP)•  An efficient way for customers to produce both electricity and useful thermal energy (up to 80% efficiency); also significantly reduces environmental emissions•  Examples: Engine-driven systems; combustion turbines; micro- turbines; fuel cells•  According to a recent study, MN is currently using only 30% of its CHP technical potential•  On August 30, President Obama issued an Executive Order setting a national goal of a 50% increase in new CHP capacity by 2020 8
  9. 9. Growth areas due to abundant andaffordable natural gasNatural Gas Vehicles (NGVs)•  Natural gas vehicles – using natural gas in the transportation sector instead of petroleum•  Growing customer interest in NGVs due to cost savings and environmental benefits •  CNG retails for ~$2 gasoline gallon equivalent (~50% less) •  CNG much cleaner than gasoline or diesel (20-30% less GHGs; 85% less NOx and CO)•  Primary initial market – fleet vehicles that operate a lot of hours (e.g., garbage trucks, buses, delivery trucks)•  Current barriers – lack of refueling infrastructure and higher initial vehicle cost•  However, we have seen 15 new CNG stations in the last year, with 2 new stations in MN and more expected next year•  An industry expert predicts that the NGV industry will grow 25% per year (i.e., will quadruple in next 6 years!) 9
  10. 10. Background on Energy Efficiency inMN CIP Spending Since 1992 (in millions)$28 Actual Spending$25 Budget$23$20$18$15$13$10$8$5$3$0 10
  11. 11. Background on Energy Efficiency inMN Historical CIP Energy Savings (MCF)  1,600,000  1,400,000  1,200,000  1,000,000  800,000  600,000  400,000  200,000  -­‐ 11
  12. 12. SummaryØ  Natural gas provides a lot of benefits to US consumers (affordable, abundant, domestic, and clean)Ø  The strong value of natural gas is driving rapid growth in new markets, such as Electric Generation, CHP, and NGVsØ  The expanded use of natural gas produces significant environmental benefitsØ  Even at today’s prices, natural gas energy efficiency programs remain cost-effective and, with prices likely to increase in the future, should be retained 12

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