Duke Energy Corporation (holding Company) · NYSE:DUK

Duke Energy Corporation (holding Company) — Corporate Update (March 2015)

46 slides from Duke Energy Corporation (holding Company)'s corporate update, Mar 17, 2015

1. Slide 1: 2015 Integrated Resource Plan Stakeholder Workshop #1

   2015 Integrated Resource Plan Stakeholder Workshop #1 March 17, 2015 Plainfield, IN

2. Slide 2: Welcome

   Doug Esamann, State President- Indiana, Duke Energy Welcome 2

3. Slide 3: Welcome

   Welcome  Safety message  Why are we here today?  Objectives for stakeholder process  Introduce the facilitator 3

4. Slide 4: The Facilitator

   The Facilitator  Duke Energy Indiana hired Dr. Marty Rozelle of The Rozelle Group and her colleagues to:  Help us develop the IRP stakeholder engagement process  Facilitate and document stakeholder workshops 4

5. Slide 5: Why are we here today?

   Why are we here today?  Duke Energy Indiana developing 2015 Integrated Resource Plan (IRP)  Proactively complying with proposed Commission IRP rule  Today is the first of four stakeholder workshops prior to filing the IRP by November 1, 2015 5

6. Slide 6: Objectives for Stakeholder Process

   Objectives for Stakeholder Process  Listen: Understand concerns and objectives  Inform: Increase stakeholders’ understanding of the IRP process, key assumptions, and challenges we face  Consider: Provide a forum for productive stakeholder feedback at key points in the IRP process to inform Duke E

7. Slide 7: Agenda

   Agenda 08:30 Registration & Continental Breakfast 09:00 Welcome, Introductions, Agenda 09:30 Overview of Duke Energy Indiana 09:45 Review of 2013 Stakeholder Process and IRP 10:15 Break 10:30 Lessons Learned 11:00 Overview of 2015 Stakeholder Process and IRP 11:45 Lunch 12:30 Scenario Planning Overv

8. Slide 8: Overview of Duke Energy Indiana

   Brian Bak, Lead Planning Analyst Overview of Duke Energy Indiana 8

9. Slide 9: Duke Energy Indiana: Overview

   Duke Energy Indiana: Overview  Indiana’s largest electric utility  790,000 customers  22,000 square miles Lafayette  Portions of 69 counties including cities of Bloomington, Terre Haute, Lafayette, and suburban Indianapolis areas near Indianapolis, Louisville and Cincinnati Terre Haute Bloomingt

10. Slide 10: Existing generation resources

    Existing generation resources  Coal (4,765 MW)  Combustion Turbine  Cayuga 1 & 2  Gas Fired (1619MW)  Gallagher 2 & 4  Oil Fired (166MW)  Gibson 1-5  Wabash River 2-6 (668MW)  Hydro (45 MW)  IGCC (595 MW)  Wind (100 MW PPA)  Combined Cycle (285 MW)  Solar (20 MW PPA) Type Of Power Facil

11. Slide 11: Planned Near-term Retirements & Additions

    Planned Near-term Retirements & Additions  Retirement of Wabash River 2-5  Suspension of Wabash River 6  Retirement of oil-fired CTs  Additional environmental controls:  Gibson: Precipitator refurbishments, monitoring  Cayuga: SCR addition, monitoring 11

12. Slide 12: Existing Generation Mix: Capacity and Energy

    Existing Generation Mix: Capacity and Energy 12

13. Slide 13: Review of 2013 Process and IRP

    Jim Hobbs, Lead Engineer Review of 2013 Process and IRP 13

14. Slide 14: Meetings

    5 Meetings Meeting 1 – December 5, 2012 Meeting 2 – January 30, 2013 Meeting 3 – April 4, 2013 Meeting 4 – July 19, 2013 Meeting 5 – October 9, 2013 IRP Filing – November 1, 2013 14

15. Slide 15: Meetings and Topics

    Meetings 1 and 2 Meeting 1  Process Overview  Scenario Development  Driving Forces Exercise Meeting 2  Energy Efficiency and Renewable Energy  Scenario Development Exercise 15

16. Slide 16: Meetings and Topics

    Meetings 3 and 4 Meeting 3  Load and Energy Forecasting  Fundamentals Forecasting  Scenario Consolidation  Exercise: Range of Assumptions Meeting 4  Portfolios  Sensitivities 16

17. Slide 17: Three Scenarios and Three Portfolios

    Meeting 5 – Three Scenarios and Three Portfolios Low Regulation Scenario: Traditional Portfolio  Carbon Emissions Price: $0/ton  Lower Environmental Requirements  Higher Fuel Prices Reference Case Scenario: Blended Approach Portfolio  Carbon Emissions Price: $17/ton in 2020, $50/ton in 2033  In

18. Slide 18: Modeling Results

    Meeting 5 – Modeling Results TRADITIONAL PORTFOLIO (Optimized for Low Regulation Scenario) Energy Efficiency Renewable Energy 2014-2033 (% of Retail Sales) (% of Total Sales) Coal (948 MW) Retirements 2% in 2020 Oil CTs (166 MW) 6% in 2020 4% in 2033 12% in 2033 WR 6 NG Conversion 672 MW in 2033 Add

19. Slide 19: Lessons Learned

    Scott Park, Director IRP Analytics - Midwest Lessons Learned 19

20. Slide 20: Lessons Learned

    Lessons Learned Feature 2013 We heard/observed… 2015 Exercise considered Appeared to be too much Scenario Participant exercise to focus on driving driving forces to define information to process in a Development forces that will be used to develop scenarios a scenario short period of time Need more

21. Slide 21: Lessons Learned

    Lessons Learned Feature 2013 We heard/observed… 2015 Portfolio attributes will be solicited from Optimized Participants want to propose Portfolios participants and included in portfolio portfolios evaluated portfolios for consideration development We are working to get relevant Not modeled due to CH

22. Slide 22: Lessons Learned

    Lessons Learned Feature 2013 We heard/observed… 2015 Modeled as a load We are planning to model EE Energy Efficiency Model as a resource reduction as a resource Trends, ranges, and Specific data will be shared in-person at Confidentiality of Access to confidential publicly available the DEI-Plainfie

23. Slide 23: Lessons Learned

    Lessons Learned Feature 2013 We heard/observed… 2015 Difficult for in-person Presentation slides will be web-posted and Remote Live Meeting attendees to hear callers callers will be provided a dial in number to participation questions/comments participate Significant revisions Presentation made afte

24. Slide 24: IRP Overview

    Scott Park, Director IRP Analytics - Midwest IRP Overview 24

25. Slide 25: Overview of IRP Process

    Overview of IRP Process  Meeting 1- Process Overview & Scenario Development (Today)  Meeting 2 - Resource discussion & Portfolio Development (early June)  Meeting 3 - Preliminary Modeling Results (August)  Meeting 4 - Final Modeling Results (early October) Note- The scenarios and sensitivities a

26. Slide 26: IRP is about "filling the gap"

    IRP is about “filling the gap” 26

27. Slide 27: Serving load requires a variety of resource types

    Serving load requires a variety of resource types Traditional supply side • Combustion turbines Peaking • Hydro • Coal Intermediate • Combined cycle • Hydro • Coal & IGCC • Nuclear Baseload • Combined cycle • Biomass Demand side Variable energy • Energy efficiency • Wind • Demand response • Solar •

28. Slide 28: How does the IRP process work?

    How does the IRP process work?  Complex process involving input from many internal and external groups  Some components mandated (e.g. MISO reserve margin requirement)  Requires extensive modeling and analysis Step 1: Step 3: Gather data, create Step 2: Step 4: Analyze portfolios, scenarios, deve

29. Slide 29: Step 1: Data, assumptions, technology screening and scenarios

    Step 1: Data, assumptions, technology screening and scenarios Step 1 Step 2 Step 3 Step 4 Gather data Create scenarios Develop input Screen technologies assumptions • Gather data such as: • Identify range of • Develop input • Screen technologies to • Operational driving forces and input assumptions

30. Slide 30: Step 2: Develop portfolios

    Step 2: Develop portfolios Step 1 Step 2 Step 3 Step 4 Review scenarios Develop Optimized Portfolios Develop Stakeholder Portfolios • Review scenarios and impact on • Use model to develop portfolios • Create portfolios that reflect fuel costs, energy and capacity optimized for each scenario stakehol

31. Slide 31: Step 3: Analyze Portfolios & Identify Preferred Portfolio

    Step 3: Analyze Portfolios & Identify Preferred Portfolio Step 1 Step 2 Step 3 Step 4 Analyze portfolios Risk assessment Identify preferred portfolio • Evaluate portfolios in each • Consider portfolio risks • Identify the portfolio that scenario • Variability of costs performs best overall • Stress

32. Slide 32: Step 4: Develop IRP report

    Step 4: Develop IRP report Step 1 Step 2 Step 3 Step 4 Develop draft report Management approval File report • Work with internal groups to • Gain approval and ensure the • File 2015 IRP by Nov. 1, 2015 write sections of report proposed plan meets all • Develop tables and regulatory requirements appe

33. Slide 33: Lunch

    Lunch DUKE 8 & ENERGY.

34. Slide 34: Scenario Planning

    Scott Park, Director IRP Analytics - Midwest Scenario Planning 34

35. Slide 35: What are scenarios?

    What are scenarios? A scenario is a well reasoned story that defines a plausible future worth considering in long term planning. When combined, several scenarios can describe a range of futures that add to the breadth and depth of the analysis. “Each scenario….tells a logical “story” about the futur

36. Slide 36: Scenarios should…

    Scenarios should…  Help us find an “always acceptable” solution across a range of possible futures instead of an “optimal” solution for one potential future  Force us to consider a robust range of possible futures  Focus on key drivers and input variables that drive action and change outcomes  I

37. Slide 37: Why do we use scenarios?

    Why do we use scenarios?  Future is uncertain  Scenarios are plausible views of what the world might look like over the next 20 years  Scenario planning intended to make decision-making process more robust  Preferred portfolio performs best overall across the multiple scenarios and sensitivities

38. Slide 38: What are the key driving forces?

    What are the key driving forces? Economic outlook Energy & environmental •Fiscal policies policy and regulations •Economic growth •Renewable energy •Interest rates Energy & •Energy efficiency •International trade policies Economic environ. •Air emissions outlook policy and •Water & waste regulations

39. Slide 39: Driving Forces Determine Key Input Variables

    Driving Forces Determine Key Input Variables Driving Forces Scenarios Key model input variables Capital & Natural gas Price of Load growth Coal prices construction prices carbon costs 39

40. Slide 40: Clean Power Plan

    Clean Power Plan  What is the Clean Power Plan (CPP)?  EPA’s proposed rule for regulating CO2 emissions from existing fossil fuel-fired power plants  As proposed, the rule is intended to reduce power sector CO2 emissions by 30% from 2005 levels by 2030  Emission reduction “building blocks”  Blo

41. Slide 41: Clean Power Plan (continued)

    Clean Power Plan (continued)  Proposed Indiana reduction goal: 2012 Baseline After Applying After Applying After Applying After Applying Total Percentage (lbs CO2/MWh) Building Block 1 Building Block 1 & 2 Building Block 1 - 3 Building Block 1 - 4 Reduction 1923 1817 1772 1707 1531 -20%  How is Du

42. Slide 42: Driving Force & Scenario Discussion

    Scott Park, Director IRP Analytics - Midwest Driving Force & Scenario Discussion 42

43. Slide 43: Overview of driving forces and scenario discussion

    Overview of driving forces and scenario discussion Purpose  Gather a range of information and perspectives on the driving forces that will inform the development of scenarios Things to remember  Consider the range and plausibility of input  Consider various/other stakeholder perspectives for each

44. Slide 44: Wrap up

    Wrap up  Combine stakeholder feedback that we heard today and from any post meeting comments  Develop a number of scenarios that reflect the themes of the discussion and comments  Specify details of scenarios that will be used for analysis  Manageable number of scenarios  Quantifiable  Plausib

45. Slide 45: Closing Comments, Stakeholder Comments

    Marty Rozelle, President, Rozelle Group Closing Comments, Stakeholder Comments 45

46. Slide 46: Next Steps

    Next Steps  Please complete comment cards or send by March 24 to Marty at: RGL97marty@rozellegroup.com  Meeting summary and other materials will be posted on website by March 31 (http://www.duke-energy.com/indiana/in-irp-2015.asp)  Next workshop tentatively scheduled for June 4 46

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