Florida Public Service Commission Workshop Renewable Electrical Generation from Municipal Solid Waste Presented by Jose

1. Safe Waste Disposal and Clean Energy Solutions … For Generations To Come. Florida Public Service Commission Workshop Renewable Electrical Generation from Municipal Solid Waste Presented by Joseph R. Treshler Covanta Energy, Inc. July 26, 2007

2. Introduction • Highlight the current contribution Energy from Waste (EFW) makes to Renewable Energy Production • Quantify the potential for EFW to provide additional Renewable Energy • Identify vehicles to promote Renewable Energy growth • Background on Covanta Energy

3. U.S. Non-Hydro Renewable Generation Total U.S. Electricity Generation The Role of Renewable Electricity Generation in the United States Non-Hydro Renewable 2% 9% of electrical generation is renewable 3,970,000 GWh 88,000 GWh Source: US Department of Energy, Energy Information Administration 2004 Report

4. Energy from Waste Generates 34% of the Nation’s Biomass Renewable Electricity Other BioMass 4% • is a leader in renewable generation • 7,800 GWh produced from Covanta owned and operated facilities • 32 Energy from Waste Facilities • 6 Wood Waste Facilities • 6 Biogas Facilities • Provides nearly 10% of the Nation’s Non-Hydro Renewable Energy Wood 62% Biomass 67% Energy From Waste 34% Source: US Department of Energy, Energy Information Administration 2004 Report = Total U.S Biomass Renewable Generation 60,000 GWh

5. Power: 550 kWh Municipal Solid Waste (MSW): 2000 lbs Metal: 50 lbs Ash: 10% of original volume Inert - no methane generation EfW Technology EfW is a specially designed energy generation facility that uses household waste as fuel and helps solve some of society’s big challenges • Dependence on fossil fuels • Climate change • Population growth • Resource management Clean, renewable electricity Reduces greenhouse gas emissions Safe, reliable waste disposal Recover metal, preserves land and Ground water

6. Industry Overview of Energy from Waste • US EPA -- EFW disposes of 13% of the nation’s waste • 89 facilities • 29 million tons per year • 36 million people served • 27 states • Generation capacityin excess of 2,700 MW • 16 million MWhrs of renewable power generated annually

7. Proven, Utility Grade Technology Exclusive North American licensee for Martin GmbH Reverse Acting Stoker Grate technology – successfully processed more refuse worldwide than any other system available,

8. Florida’s Renewable Generation Capacity is Quite Low Current FL generation Capacity 51,569 MW Current FL renewable generation Capacity 1,081 MW or 2% of the state’s capacity *Includes 1080.7 MW Renewable Energy Generation Source: FL PSC

9. The “Power” of EFW in Florida One ton of MSW Has the energy equivalent of One barrel of fossil fuel oil or 10 MCF of natural gas! • EFW is a proven source of Florida renewable energy • Annually Floridians generate 31.2 million tons of MSW which is the energy equivalent of 31.2 million barrels of oil. • Currently 6.5 million tons (17,900 tons per day) of MSW can be processed annually by Florida’s 12 EFW Facilities. • This eliminates the need for 6.5 million barrels of oil or 65 million MCF of natural gas. • 506 MW of renewable electrical energy is generated on a daily basis by Florida’s EFW Facilities • Saving annually over 8,125 acre feet of precious landfill space through volume reduction.

10. The Environmental Benefits of EFW Produces renewable electricity with less environmental impact than almost any other source of electricity US EPA April 14, 2003 Provides a net reduction in Green House Gas Emissions (GHG) • Displaces CO2 (GHG eqv 1) that would otherwise be generated as a result of producing electricity from other fossil fuels sources • Eliminates the release of uncollectible Methane (GHG eqv 21) from raw Municipal Solid Waste Landfills • Recycling of the Ferrous and Non-ferrous metals recovered following the EFW process avoids the GHG emissions that would be associated with the smelting of virgin ores

11. More EFW is Being Done… • By 2010, Renewable Energy from Florida EFW is planned to increase by 85 MW: • Lee County 20 MW • Hillsborough County 17 MW • Palm Beach County 28 MW • Pasco County 20 MW • Bringing to 591 MW the EFW Renewable Energy made available while processing less than 25% of the Florida MSW being generated.

12. More EFW Can Still Be Done… • Over 18 million tons of raw MSW is still being landfilled every year in Florida. • EFW Technology can convert this waste into approximately 1130 MW of new Renewable Energy • A significant number of highly developed areas of the State still heavily dependent on land filling raw MSW as their primary method of solid waste management. • Orange County 1,820,638 TPY • Duval County 1,483,456 TPY • Brevard County 704,476 TPY • Volusia County 499,242 TPY • Collier County 477,095 TPY • Manatee County 343,095 TPY • Seminole County 303,015 TPY • Sarasota County 297,421 TPY • Developing new EFW capacity to manage the nearly 6 million tons of MSW available from these areas alone would increase the State’s Renewable Energy generation by approximately 372 MW while increasing our energy independence by the equivalent of approximately 6 million barrels of oil each year. • This will only be possible with the right incentives

13. Encouraging Florida Renewables • Current Situation • 63% of Florida’s electrical generation is fueled by oil and gas • Low energy payment rates and contracting structures that have been offered since the early 1990’s for new EFW capacity inhibited further development • Florida has no functional wholesale electricity markets to support EFW or other renewable energy development; local utilities are the only buyers

14. Encouraging Florida Renewables • The Future • 81% of Florida capacity additions are currently proposed to be fueled by oil and natural gas • Renewables including EFW must be a part of changing this future • Executive Order 07-127 signed by Governor Crist at the Climate Change Conference limits allowable GHG for electric utilities • Executive Order 07-127 requires utilities to produce substantial additional amounts of electricity from renewable sources

15. Encouraging Florida Renewables • The Future (Continued) • Recent Supreme Court Ruling United Haulers Association Inc. vs. Oneida-Herkimer affecting the landmark 1994 flow-control decision in C&A Carbone vs Clarkstown • New (and renewed) EFW contracted energy generation must be valued based on avoiding the most expensive fossil fuels • Development of a functional and liquid wholesale electricity and renewable credit trading markets will stimulate growth • Long-Term fairly priced energy contracts will encourage new project financing • Encourage/require Renewable Portfolio Standard (“RPS”) to encourage the development of new renewable energy generation in the state

16. DSIRE: www.dsireusa.org June 2007 Renewables PortfolioStandards ME: 30% by 2000 10% by 2017 goal - new RE MN: 25% by 2025 (Xcel: 30% by 2020) VT: RE meets load growth by 2012 *WA: 15% by 2020 • NH: 23.8% in 2025 WI: requirement varies by utility; 10% by 2015 goal MT: 15% by 2015 MA: 4% by 2009 + 1% annual increase OR: 25% by 2025 (large utilities) 5% - 10% by 2025 for smaller utilities RI: 15% by 2020 CT: 23% by 2020 • NV: 20% by 2015 IA: 105 MW • NY: 24% by 2013 • CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) IL: 8% by 2013 • NJ: 22.5% by 2021 CA: 20% by 2010 • PA: 18%¹ by 2020 MO: 11% by 2020 • MD: 9.5% in 2022 *NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) • AZ: 15% by 2025 *DE: 10% by 2019 • DC: 11% by 2022 *VA: 12% by 2022 TX: 5,880 MW by 2015 HI: 20% by 2020 State RPS State Goal • Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE • ¹PA: 8% Tier I / 10% Tier II (includes non-renewables); SWH is a Tier II resource Solar water heating (SWH) eligible

17. EFW: A Proven Component of Florida’s Renewable Energy Future • Florida (+ 22 other states and Washington DC) define EFW as Renewable Energy • To date 12 states and Washington DC define EFW as eligible for Renewable Portfolio Standards • Efficiently recovers/exports over 550 KWhrs/per ton of MSW processed • EFW is clean - “Exceeds requirements of the Clean Air Act” – US EPA • Most advanced pollution controls of any energy generation source • Reduces landfill requirements in excess of 90% • Eliminates the release of toxic emissions and GHG’s (especially methane) from “raw waste” landfills • EFW and recycling are compatible: Recycling rate of EFW communities exceeds the national average by over 5%

18. Key Elements of a Successful Renewable Portfolio Standard • Establishes clear annual targets that must be met by any load serving entity selling electricity to end-users in the state (private, public, munis, etc.) • Ensures aggressive targets to foster renewable energy innovation and development • Clearly defines qualifying technologies/fuels • Allows markets to foster technology development without favoring specific technologies or fuels • Allows Renewable Energy Certificate (“REC”) trading as separate product from traditional capacity, energy, and ancillary service produced by a generator • Establishes independently operated entity to operate trading markets and monitor/verify REC generation, use, and load serving entity compliance • Contains compliance, enforcement, and penalty provisions • Defines Alternative Compliance Payment (“ACP”) in the $50 to $80/MWh range to be paid by any load serving entity that does not meet the RPS annual target • Uses the funds generated by the ACP to support renewable generation R&D and energy efficiency programs

19. “Florida has a beautiful precious environment that needs to be protected. This should be our issue”Gov. Charlie Crist

20. Additional Information

21. Covanta Energy Corporation • The 32 EFW facilities Covanta operates: • Dispose of nearly 5% of nation’s waste • Process about 15 million tons • Produce about 1,200 megawatts of clean, renewable energy. • Generate nearly 10% of the Nation’s Non-Hydro Renewable Energy • In Florida, Covanta operates: • 4 EFW facilities: • Pasco County, FL • Hillsborough County, FL • Lee County, FL • Lake County, FL • These facilities: • Process over 1.25 million tons per year of MSW • Generate about 114.5 megawatts per hour

22. EFW Energy is Renewable Energy Municipal Solid Waste (MSW) is a sustainable resource for “local” power • MSW is biomass. • EFW efficiently converts energy value of MSW to electricity and/or steam • EFW contributes to fuel diversity • EFW facilities are located near power users, increasing cost efficiency. • EFW avoids vehicle fuel consumption/emissions associated with increasingly distant transportation to landfills. • EFW avoids landfill greenhouse gases and toxic emissions

23. EFW: A Success Story “Upgrading of the emissions control systems of large combustors to exceed the requirements of the Clean Air Act Section 129 standards is an impressive accomplishment. The completion of retrofits of the large combustion units enables us to continue to rely on municipal solid waste as a clean, reliable, renewable source of energy. With the capacity to handle approximately 15 percent of the waste generated in the US, these plants produce 2,800 megawatts of electricity with less environmental impact than almost any other source of electricity.” -- letter to IWSA from Assistant Administrators Jeff Holmstead and Marianne Horinko, US EPA February 2003