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April 23, 2013
NATIONAL COAL CONFERENCE
Chairman Robert F. PowelsonPennsylvania Public Utility Commission
PA PUBLIC UTILITY COMMISSION
Created in 1937 5 commissioners 500 employees $65 million budget
Regulates around 8,000 utilities in the following sectors:• Electricity• Natural Gas• Water
• Telecommunications • Transportation
THE NEW ENERGY REALITY
World energy consumption predicted to grow by 53% from 2008 to 2035
Fossil fuels will continue to supply much of the energy used worldwide
Renewable share of total energy use is predicted to increase from 10% in 2008 to 14% in 2035
There are 1.6 billion people without electricity worldwide Source: EIA’ s International Energy Outlook 2011
U.S. ELECTRICITY CONSUMPTIONEXPECTED TO GROW 30% BY 2035
1950 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 20350
1,000
2,000
3,000
4,000
5,000
6,000
Annual U.S. Electricity Consumption 1950-2035
Projected
KWH(Billions)
Source: Energy Information Administration 4
U.S. COAL PRODUCTIONThe U.S. holds the worlds largest estimated recoverable
reserves of coal
In 2011, approximately
72% of coal production
originated in 5 states:• PA• WY • WV• KY• TX
PA is the 4 th largest coal producing state in the U.S.
Coal production is vital to PA’s economy
In 2011, PA’s coal industry:• Contributed $3.2 billion in economic
output • Supplied well-paying jobs for 41,500
Pennsylvania residents• Provided more than $750 million in
federal, state, and local personal income and payroll tax revenue
PENNSYLVANIA + COAL
Over 90% of U.S. coal consumption is in the electric power sector• Coal-fired generation still holds the largest
share among all sources of electricity• In March 2012, coal's share of total U.S.
generation was 34%
However, coal’s use has declined since 2007 due to: • Slow growth in electricity demand• Strong price competition with natural gas• Increased used of renewables
COAL + ELECTRICITY
2013 PJM GENERATION BY FUEL TYPE
Source: PJM Environmental Information Services
Nuclear 35.8%
Solid Waste 0.5%
Hydro 1.1%
Natural Gas 15.0%
Oil 0.1%
Coal 44.7%Wind 2.4%Other 0.4%
2013 PENNSYLVANIA GENERATION BY FUEL TYPE
Natural gas
20.5% Hydro 1.3%
Coal 39.7%
OtherRe-
new-ables 2.7%
Nuclear 35.5%
Petroleum 0.3%
Sources: U.S. Energy Information Administration
THE FUTURE OF ELECTRIC GENERATION
Coal is the most important commodity carried by America’s railroads• Coal accounts for 43 percent of all tonnage
shipped• Coal generates over 24 percent of all gross rail
revenues
The business of coal, rail, and power generation are inextricably linked • 70 percent of all call delivered to U.S.
power plants is delivered by rail• Coal industry accounts for 1 in 5
railroad jobs
COAL AND RAIL
FUTURE OF COALUnknown impact of environmental regulations creates
tremendous uncertainty for the coal industry.
Dominion Resources Inc.:
Completed construction of new coal plant in 2012.
One of the last new coal plants?
Brandon Shores, Crane & Wagner
Generating Stations:
Scrubbed for billions, but sold
for only $400 million
REAL WORLD EXAMPLES
PJM Plant Retirements:Almost 9,000 MW
did not clear in PJM’s Capacity Auction
for 2014-2015FUTURE OF COAL
Homer City Generating Station:Edison & GE Capital planning to invest
$700 million in scrubbing this plant
With the rising demand for electricity, we need to rely on all sources of generation, from wind to coal
A diverse mix, or portfolio, approach is the answer
For coal plants to compete in the future, clean coal technology is a must
Coal will be a major player in the future of electric generation
CONCLUSION
THANK YOU