All of the Above and Below

Transcription

1 National Association of State Energy Officials May 1, 2014

2 All of the Above and Below 2 Since January 18, 2011, Governor Corbett has implemented a straight forward energy policy. His All of the Above and Below approach reflects Pennsylvania s diverse energy portfolio. Home to abundant resources such as coal, natural gas, nuclear, oil, hydropower, wind, solar and other renewables, Pennsylvania is a national leader in both energy production and resource diversity.

3 PA Energy Policy Core Principles 3 All of the Above and Below We need all our resources Embracing free markets Consumers win when they can choose Energy independence leads to energy security Energy imported = dollars exported Abundant, affordable & domestic American energy for American jobs Enhancing our environment Yesterday s legacies are today s opportunities

4 How is Energy Meeting Gov. Corbett s Goals? 4 Putting Pennsylvania on Sound Fiscal Ground? Contributions to PA s Economy and Tax Revenues Creating Jobs for All Pennsylvanians? Employment (direct, indirect & induced) within each energy sector Increasing competitiveness of PA businesses Helping to Create an Educated & Trained Workforce? PA seizing opportunities to produce and use energy Aligning job-training & workforce development initiatives with opportunities

5 Who is the Audience? 5 Job-Creators: Business & Industry Capital Investors & Decision Makers Regional Chambers of Commerce Governor s Administration Cabinet Members Agency Personnel Involved in Energy Policy & Economic Development General Assembly & Other Elected Officials All Pennsylvanians Clear Understanding of Pennsylvanians Assets Clear Understanding of Gov. Corbett s Vision for these Assets

6 Plan Contents 6 Pennsylvania s history as an Energy Capital The energy resources positioning PA as the new Energy Capital Energy Portfolio What we have Making use of our resources Benefits & opportunities for job-creators Abundant, affordable, domestic Enhancing Pennsylvanians quality of life Today s opportunities helping clean up yesterday s environmental legacies Highlighting success stories Resources Where to go next?

7 7 Keystone State s Energy Portfolio ~ continued ~ 2 nd largest energy field in the world 4 th largest energy producer in U.S. 2 nd largest electric generator in U.S. 2 nd largest nuclear generator in U.S. 4 th largest coal producer in U.S. 2 nd in natural gas production in U.S. 3 TCF in 2013; 50% increase from 2012 Net exporter for first time in 100 years 9 th in total solar capacity installed 15 th in total wind capacity installed 2.2 million electric choice customers

8 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Reduced Energy Costs Historical & Future Prices for PJM Electricity PJM $/MWh Price

9 Reduced Energy Costs Lower Purchased Gas Costs Utility PGC Rate / mcf % Change Customer^ Savings 2008* 2013* Monthly PECO $11.10 $ % $75.45 NFG $10.34 $ % $76.35 PGW $10.58 $ % $67.65 Columbia $10.25 $ % $81.60 Equitable $11.81 $ % $86.40 UGI $11.79 $ % $76.20 UGI Penn $10.66 $ % $76.65 Peoples $9.53 $ % $74.10 * 1st Quarter 2008 & PUC-approved rate for 2013 * Residential heating customer using 15 mcf/month

10 Marcellus Shale A Game Changer tcf of technically recoverable gas (2009 T. Engelder) Largest unconventional shale gas play in nation 12 bcf/day 25% of all U.S. shale gas production Production doubled in 2011 & 2012 (50% in 13)

11 By the Numbers...Drilling 11 Gas wells drilled* 7,733 (since 2005) 1,365 (2012) 1,210 (2013) 304 (2014 thru 3/30) Gas production* 4,922 producing wells (Dec. 31, 2013) 686 well increase Amount of production reported every 6 months 894 bcf (Jan-June 12) 1,146 bcf (July-Dec 12) 1,406 bcf (Jan-June 13) 1,689 bcf (July-Dec 13) * PA Unconventional

12 Natural Gas Production Marcellus Shale Region 12 Source: Energy Information Administration, January 2014

13 A Changing Energy Landscape PA Electricity Generation by Fuel Type

14 14 A Changing Energy Landscape Pending Coal Fired Power Plant Retirements

15 A Changing Energy Landscape Proposed Gas Fired Power Plants 15 Applicant County Approximate Capacity (MW) Panda Power Bradford 900 Berks Hollow Energy Associates, LLC Berks 855 Panda Power Lycoming 900 Bakers Farm Energy, LLC York 650 Hickory Run Energy, LLC Lawrence 750 Tenaska Pennsylvania Partners, LLC Westmoreland 900 Tenaska Pennsylvania II Partners, LLC Lebanon 900 Sunbury Generation LP Snyder 1,064 Future Power PA, Inc. Schuylkill 300 TOTAL 7,219 Source: PA Department of Environmental Protection

16 16 A Changing Energy Landscape PJM Fuel Mix:

17 17 Benefits to Consumers Reduced Energy Costs 2008 v. 2012

18 18 Benefits to Consumers Improved Air Quality

19 Alternative & Renewable Energy 19 Alternative Energy Portfolio Standards Act Tier 1, Tier 2 & solar carve out 18% by % Tier 1 (including 0.5% solar) 10% Tier 2 Alternative Energy Investment Act $650 million $180 m residential & commercial solar projects Competitive Electricity Markets At least 20 suppliers offering 24 green products

20 Energy Efficiency & Demand Response 20 Energy Efficiency Act 129 of 2008 Phase 1: 3.5% consumption reductions by May 2013 $1.5 : $1 benefit to cost ratio Phase 2: Staggered targets May 2013-May 2016: Utility Territory Three-Year % of Energy Efficiency Reductions Duquesne 2.0 Met-Ed 2.3 Penelec 2.2 Penn Power 2.0 PPL 2.1 PECO 2.9 West Penn 1.6 AVERAGE 2.2

21 Energy Efficiency & Demand Response 21 Demand Response Act 129 of % reduction during summer 2012 peak 100 hours Robust economic DR participation in PJM Auction: 14,832 MW in 3-yr forward auction (May 2012) 12,408 MW in 3-yr forward auction (May 2013) FERC Order 745 full wholesale price paid for economic DR instead of difference with retail pricing

22 Competitive Markets Electric Competition in PA 22 2,208,484 customers shopping* 39% of all customers 38% residential 47% commercial 87% industrial 1st in nation with 47 licensed residential suppliers** 109 total suppliers & 200 brokers/marketers 2nd in nation in competitive residential markets** Drivers: Lower costs, locked-in rates & associated products Preferred generation sources * As of 3/26/14 ** Annual Baseline Assessment of Choice in Canada & the United States (ABACCUS)

23 Making Use of PA s Resources 23 Increasing energy independence & security Enhancing & restoring Pennsylvania s environment Building our infrastructure Delivering energy and goods from production to consumption PA s economic development network PA s workforce development network Educating for the jobs of today & tomorrow Research & development Lower costs for PA consumers

24 Website: governor.pa.gov/energy 24 Pennsylvania State Energy Plan Hayley Book (717)