New 790-Megawatt Unit. Council Bluffs Energy Center

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1 New 790-Megawatt Unit Council Bluffs Energy Center

2 JUST THE FACTS Council Bluffs Energy Center s New 790-Megawatt Unit Background To ensure a long-term positive impact on Iowa's economy and a secure supply of electricity, MidAmerican Energy is building a new 790-megawatt coalfueled electric generating facility at the existing Council Bluffs Energy Center. When the additional generation is added, the Council Bluffs Energy Center will be capable of producing more than 1,610 megawatts of electricity per hour. The $1.2 billion facility is the largest electric generation construction project in Iowa. It is projected to begin operations during the summer of Employment during construction is expected to peak at more than Council Bluffs Energy Center 1,000 workers, with an estimated $300 million in construction payroll. The new facility is projected to require approximately 70 operations employees, with a combined annual payroll of $4.8 million. Currently, the Council Bluffs Energy Center employs 146 people. MidAmerican is the developer and operator of the project. Several other power industry partners also are involved in ownership. Those owners include: Central Iowa Power Cooperative; Corn Belt Power Cooperative; Lincoln Electric System; Municipal Energy Agency of Nebraska; and the following Iowa cities Alta, Cedar Falls, Eldridge, Montezuma, New Hampton, Pella, Spencer, Sumner, Waverly and West Bend. Environmental Considerations Consistent with MidAmerican's environmental commitment, the company will operate the plant in an environmentally responsible manner. MidAmerican will employ best available control technology to control air emissions and will meet or exceed all required environmental standards for a new, coalfueled generation plant. Transmission of Electricity New 790-Megawatt Unit The transmission system moves electricity from the power plant to the points where it is distributed to customers. New transmission lines and substations will be required to strengthen the existing transmission system to enable the delivery of the new electric supply. All new transmission lines will be sited and constructed under the rules of the Iowa Utilities Board.

3 QUESTION & ANSWER Q. What makes Council Bluffs the ideal site for this new plant? A. Many factors make it the ideal site, including the presence of an existing facility designed to be expanded, which means construction will be easier and more cost-effective. Starting from scratch at a "greenfield" site could add as much as 10 percent to the cost of construction. Also, because some of the existing infrastructure can be utilized and expanded, fewer environmental impacts are expected than if new structures were required. The Council Bluffs site has the added benefit of skilled employees at the existing plant whose expertise will be used at the new facility. In addition, the Council Bluffs site has access to a competitive rail line to keep the cost of coal delivery low. Q. How much energy will Council Bluffs Energy Center Unit 4 provide? A. Unit 4 will produce 790 megawatts of electricity, enough to meet the electric demand of more than 650,000 homes. Q. Will new transmission lines or electrical substations be needed for the new power plant? A. Yes, new transmission lines and substations will be required. MidAmerican has proposed a new 345,000 volt transmission line to be built between Council Bluffs and Des Moines. That line is in the preliminary stages of route selection and will require regulatory approval. Q. Why are new substations and transmission lines needed? A. These new facilities will strengthen the existing transmission system to enable the delivery of the electricity from Unit 4 to customers. Q. Why did you decide on coal when other energy sources are available? A. MidAmerican is committed to a diversity of generation resources. The company's portfolio includes wind, biomass, nuclear, hydro, natural gas, oil and coal. Phase 1 of a 540-megawatt, natural gas-fueled generation station has been completed in Pleasant Hill, Iowa. MidAmerican also has announced its plans to construct 310 megawatts of wind turbine generation facilities in north central Iowa. However, coal is the backbone of MidAmerican's and the nation's electric generation production because it is plentiful, economical and secure. In addition, with modern technology, coal combustion is cleaner and more efficient than in the past. According to the Department of Energy, while coal use increased by 60 percent in recent years, sulfur dioxide emissions decreased 23 percent, and emissions of nitrogen oxides dropped 12 percent. Q. How large will the coal pile be, and how will dust be controlled? A. The current coal pile will be expanded and additional conveyance systems will be installed rather than constructing a second pile. This will minimize the environmental impact. MidAmerican's coal piles are maintained to minimize fugitive dust emissions. Dust collection systems are in operation any time the coal is being transported on the conveyor belts to the boilers. (continued on back)

4 Q. By adding an additional 790-megawatt coal plant, won't emissions just continue to grow in the state, especially over the long-term? A. No. Power from the new plant will be produced more efficiently than power produced from older units. This plant will employ best-available control technology to reduce emissions. As older, less-efficient units are dispatched less frequently and eventually retired and replaced by plants with state-of-the-art technology, electrical plant emissions will actually decrease. Q. Will MidAmerican retire other plants when this one comes on-line? A. It is a possibility, since generating plants have a finite lifespan and some MidAmerican plants were built in the 1950s and early 1960s. This new, highly efficient plant will help protect our customers against an energy shortfall if we have to take an aging plant off-line. Q. How many of the 1,000 construction jobs will be filled with area residents? A. Virtually all the construction jobs will go to regional workers. Q. Will Unit 4 pay taxes? A. The plant will generate a total of $3.4 million in annual property taxes, of which $1.724 million will be distributed to Pottawattamie County, the city of Council Bluffs, the Lewis Central School District and other local government bodies. Q. How will Unit 4 benefit Nebraska? A. Approximately 19 percent of the 790-megawatt capacity is under contract to Nebraska utilities, helping to secure Nebraska's energy future. And because the Council Bluffs Energy Center sits virtually on the state line, across from Nebraska's largest urban area, it's safe to assume that many construction jobs and permanent operations jobs will go to Nebraska residents.

5 HOW A COAL-FUELED POWER PLANT WORKS 1. Coal Supply Coal from the mine is transported, via railway, to the coal yard. Through a series of transfer belts, the coal is delivered to the coal hopper where it is crushed to 2 inches in size. The coal is processed and delivered by a conveyor belt to the generating plant. 2. Coal Pulverizer The coal is then pulverized, or crushed, to a fine powder, mixed with air and blown into the boiler for combustion. 3. Boiler The coal/air mixture is ignited in the boiler. Millions of gallons per hour of purified water are pumped through tubes inside the boiler. Intense heat from the burning coal turns the water in the boiler tubes into steam, which spins the turbine (8) to create electricity. 4. SCR Selective catalytic reduction is the state-of-the-art technology for the reduction of nitrogen oxide (NOx) from flue gas. This process uses contact with ammonia to reduce the NOx to nitrogen and water. (continued on back)

6 5. SO 2 Scrubber The process is known as flue gas desulfurization (FGD). The flue gas will come in contact with a lime slurry. This will help remove sulfur dioxide and other acid gases from the exiting flue gas. 6. Baghouse Fly ash, which is very light, exits in the boiler along with the hot gases. A baghouse (a huge air filter) removes the fly ash before the flue gases are expelled into the atmosphere through the stack. 7. Stack After the flue gas goes through the series of cooling and cleaning processes, it is vented to the atmosphere. 8. Turbines and Generator Water in the boiler tubes picks up heat from the boiler and turns to steam. The high-pressure steam from the boiler passes into the turbine. Once the steam hits the turbine blades, it causes the turbine to spin rapidly. The spinning turbine causes a shaft to turn inside the generator, creating an electric current. 9. Condenser Cooling water is drawn into the plant and passes through the condensers, which cools the exiting steam from the turbine. Steam from the turbine also passes through the condensers in separate pipes from cooling water. The cold water is warmed by the steam, which condenses back into liquid water and returns to the boiler to begin the process of generating electricity again. 10. Cooling Tower The cooling tower is used to return the temperature of the circulating cooling water to a temperature cool enough to condense the steam. This water is recycled through the system. Additional water is added to the system to make up for evaporation and ventilation loss. 11. Substation, Transformer and Transmission Lines Once the electricity is generated, transformers increase the voltage so it can be carried across the transmission lines. Once electricity reaches the substations in various cities and towns, the voltage applied to the distribution lines is reduced to distribute electricity to customers.

7 JUST THE FACTS MidAmerican Energy Proposed Iowa Wind Project MidAmerican Energy Company is proposing to develop one of the world's largest land-based wind projects in Iowa. The project is designed to simultaneously help meet the governor's stated goal of 1,000 megawatts of renewable generation in the state by 2010 while taking steps to meet Iowa's future energy needs. The $323 million project will be built in multiple phases in northwest or north central Iowa. The project will consist of 180 to 200 turbines, each generating approximately 1.5 to 1.65 megawatts. Key Facts MidAmerican's proposed 310-megawatt wind energy facility in Iowa will be one of the largest landbased wind projects in the world according to the Department of Energy Renewable Energy Lab. MidAmerican's proposal includes an electric rate freeze for Iowa customers through 2010, which is an extension of the current rate freeze due to expire in If approved by the Iowa Utilities Board, MidAmerican customers will see stable electric rates for at least another seven years. The company will invest $323 million in this project in addition to its $1.1 billion investment in other electric generation projects currently being developed in Iowa. When the project is complete, MidAmerican will own or have under contract more than 435 megawatts of renewable energy or more than 43 percent of Gov. Vilsack's goal of 1,000 megawatts of renewable energy by It should be noted that MidAmerican currently serves approximately 41 percent of the Iowa electric load. The project is dependent upon regulatory approvals and acceptable ratemaking rulings from the Iowa Utilities Board. This is a win-win-win project for Iowa. Iowa is becoming a leading producer of renewable energy in the country, MidAmerican's Iowa customers would have stable rates through 2010, and Iowa has the potential for a new product green power to export from the state.

8 JUST THE FACTS Greater Des Moines Energy Center The Greater Des Moines Energy Center is a natural gas-fueled, combined-cycle generation plant owned by MidAmerican Energy Company, a subsidiary of MidAmerican Energy Holdings Company. The $357 million plant will operate with combustion turbines only until the combinedcycle equipment is delivered and installed. The first phase was completed in May The second phase (combined cycle) is scheduled to be completed by December Construction on the plant began in early The project will require approximately: 14,000 cubic yards of concrete 1,700 tons of structural steel 10 miles of piping 180 miles of electric cable 400 to 500 construction jobs At full load, the plant will produce about 540 megawatts of electricity, consuming about 159 million therms of natural gas per year. When fully operational, the plant will employ a staff of 24 full-time employees and provide $2 million in annual taxes. Major Equipment Components Major equipment used by the plant will include: Two natural gas-fueled combustion turbine generators Two heat-recovery steam generators to produce steam from waste heat generated from the combustion turbine exhaust One steam turbine generator to produce electricity from the steam produced by the heat-recovery steam generators (HRSGs) A selective catalytic reduction system for reducing emission of nitrogen oxides Emissions-monitoring equipment Substation facilities to connect the plant to the electric power grid Evaporative cooling equipment for cooling the plant's equipment and for condensing steam to reuse in the steam turbine generator Support equipment for plant operations Support facilities, such as offices, a storeroom and maintenance shop The Environment MidAmerican will minimize the environmental impact of a large-scale electric generation facility by using clean-burning natural gas, installing state-of-the-art emission controls and using a high-efficiency heatrecovery system that captures waste heat to produce additional electricity. Plant cooling will be provided by closed-loop cooling systems. This facility is designed to meet all existing standards for emissions and employs best available control technology.

9 MAJOR ECONOMIC DEVELOPMENT PROJECTS IN IOWA $2.18B 2.2B 2B 1.8B 1.6B 1.4B $1.2B 1.2B 1B 800M 600M 400M $357M $323M $300M 200M 0 Greater Des Moines Energy Center Council Bluffs Energy Center Unit 4 MidAmerican s Proposed Wind Generation Project MidAmerican s Clear Skies Investment TOTAL INVESTMENT

10 Cents per kwh MIDAMERICAN ENERGY COMPANY IOWA RESIDENTIAL ELECTRIC RATES Actual rates relatively flat Inflation-adjusted rates have been declining for nearly 20 years! Time Inflation-Adjusted Average Residential Electric Rates Actual Average Residential Electric Rates

11 MidAmerican Electric Rates: Well Below Consumer Price Index Percentage of Increase Consumer Price Index (price of all goods and services) 0 9 kwh MidAmerican Electric Rates kwh 8.5 kwh 8.5 kwh 8.5 kwh 8.5 kwh 8.5 kwh 8.5 kwh 8.5 kwh While MidAmerican's average residential electric rate has fallen approximately 5.6 percent since 1995, the Consumer Price Index has risen approximately 18 percent.

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