Exposing the Myth

1. Exposing the Myth Showing that America can have a Clean Environment and Affordable Energy

2. Possibility Thinking

3. Empowering America • electricity demand now accounts for 41% of total U.S. energy consumption compared to 20% in 1970 • between 1970 and 1999, each percentage increase in GDP was equaled by just over a one-percent increase in electricity usage Source: U.S. Energy Information Administration - 2002

4. Growing Demand U.S. Electricity Demand1970-Projected to 2020(in billion kilowatthours) History Projections Coal Natural Gas Nuclear Renewables Petroleum Source: U.S. Energy Information Administration, 2002

5. Affordable Energy … GOOD! Source: U.S. Energy Information Administration, 2002

6. Household Energy Expenditures By Income* 29% 29% 13% 13% 4% 4% $10,000 to Annual Annual Over Over Under Under Income Income $50,000 $50,000 $10,000 $10,000 $25,000 $25,000 Empowering Families Source: U.S. Department of Energy - 1997 *Household energy expenditures include both residential and transportation energy costs

7. Empowering Economic Growth The value to the U.S. economy of using domestic coal reserves to generate electricity in the year 2010 will be between: • $163 to $659 billion in increased economic output • $40 to $224 billion in increased household earnings • 800,000 to 6.4 million additional American jobs

8. Empowering Kentucky The value to the Kentucky’s economy of using domestic coal reserves to generate electricity in the year 2010 will be between: • $11.2 to $36.2 billion in increased economic output • $3 to $10 billion in increased household earnings • 73,000 to 317,000 additional Kentucky jobs

9. Exposing the Myth Coal-based electricity has nearly tripled +188% Since 1970 Emissions of health related pollutants reduced by nearly one-third -32% Source: U.S. Department of Energy and Environmental Protection Agency, 2002

10. Continuing Progress SO2 NOx PM10 Source: U.S. Environmental Protection Agency and Department of Energy, 2002

11. Guaranteeing Continued Progress LGE Upgrades at Existing Facilities • $500 million SCR installation at LGE Trimble County station • revolutionary multi-pollutant control device to be tested at KU Ghent plant • $70 million investment at WKE Coleman station for SO2 controls LGE’s Trimble County station is one of the lowest emitters of NOx in the nation thanks to the installation of Selective Catalytic Reduction technology.

12. Guaranteeing Continued Progress EKPC Upgrades at Existing Facilities • $200 million upgrade at EKPC Spurlock Station • Conducting initial engineering and planning for SCR’s or other environmental upgrades at Cooper station EKPC’s $200 million investment in upgrades at the Spurlock Station include the installation of SCR’s and a new precipitator.

13. Modeling the Way Kentucky Pioneer IGCC Project • SO2 capture efficiency greater than 99% • NOx emissions controlled at 0.15 lbs/106 Btu • 20% reduction of CO2 emissions compared to typical pulverized coal plant

14. Modeling the Way Thoroughbred Energy Campus • SO2 capture efficiency greater than 98% • NOx emissions controlled at 0.08 lbs/106 Btu • exceeds the 2018 requirements of the Clear Skies proposal

15. Modeling the Way EKPC Gilbert Unit Expansion • $400 million investment in 268-MWe CFB unit at existing Spurlock station • SO2 capture efficiency greater than 98% • NOx emissions controlled at 0.07 to 0.10 lbs/106 Btu

16. Keys for Success • Access to electricity is essential to economic growth and prosperity in Kentucky • Energy costs matter both to Kentucky’s businesses and working families • Technology provides the key to increasing environmental performance of power plants that use coal

17. Possibility Thinking