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Frederick M. Sellars Senior Vice President TRC Environmental Corporation

The Energy Policy Act of 2005 M arket Opportunities Environmental Business Council October 11, 2005. Frederick M. Sellars Senior Vice President TRC Environmental Corporation. The Energy Policy Act of 2005. Signed into law August 8, 2005

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Frederick M. Sellars Senior Vice President TRC Environmental Corporation

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  1. The Energy Policy Act of 2005Market OpportunitiesEnvironmental Business CouncilOctober 11, 2005 Frederick M. Sellars Senior Vice President TRC Environmental Corporation

  2. The Energy Policy Act of 2005 • Signed into law August 8, 2005 • Far-reaching implications for numerous components of the energy industry • Several provisions represent significant industry opportunities: • Repeal of the Public Utility Holding Company Act (PUHCA) • Incentives to encourage the development of petroleum resources • Incentives to encourage LNG, coal gasification and nuclear energy development • Incentives to encourage construction of new electric transmission facilities • Incentives to encourage the development of renewable energy projects • Incentives for energy efficiency improvements

  3. Repeal of PUHCA • Utility mergers no longer need to be contiguous or demonstrate transmission pathways Market Opportunities: • M&A opportunities • Merging companies may require valuation and transfer of liabilities

  4. Incentives for Development of Petroleum Resources • Tax rule changes aimed at encouraging refinery expansion • National assessment of oil and gas resources and reserves • Financial assistance for remediation of orphaned oil and gas well sites Market Opportunities: • Refinery capacity expected to double by 2025 creating opportunities for permitting of new refineries, refinery expansions and new offshore oil and gas sites • Remediation opportunities for abandoned oil and gas well sites

  5. Energy Facility Siting and Development Incentives • FERC given primacy over siting LNG facilities • Accelerated depreciation for natural gas and electric transmission lines as well as coal gasification projects • Production tax credit for advanced nuclear power • Favorable tax provisions for installation of emission controls at existing power plants • Designation of utility corridors in the West Market Opportunities: • Continued favorable climate for LNG development • Increased opportunities for coal gasification projects • Return of nuclear power? • Increased opportunities for emission control retrofit projects • Linear project permitting in designated “corridors”

  6. Transmission Facility Construction Incentives • Uniform reliability standards • Accelerated depreciation for transmission facility investment • DOE designation of “national interest transmission corridors” • FERC “backstop” approval and eminent domain authority • FERC rate-setting directives to encourage investment Market Opportunities: • Increased permitting, engineering and construction activity for electric transmission facilities, especially in congested areas (Northeast), where the grid is weak (Midwest), and in key energy corridors (West)

  7. Incentives for Renewable Energy • Production tax credit extension to 2007 • Additional renewable energy technologies covered • Federal government purchasing requirement • Non-binding “sense of Congress” directive to Secretary of Interior to approve up to 10,000 MW of non-hydropower renewable energy on public lands by 2015 Market Opportunities: • Continuity wind power development activity • Increased development activity for other renewable technologies (biomass, hydro, wave, current and tidal power)

  8. Energy Efficiency Provisions • Tax deductions for 2006 and 2007 for energy efficiency upgrades to commercial and industrial buildings • Business tax credit for purchases of fuel cells or microturbines • Utilities must offer net metering, smart metering and interconnection service to customers with onsite generation Market Opportunities: • New opportunities for energy management and distributed generation

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