Texas Lignite Industry. Texas Lignite Because >95% of lignite mining operations in Texas are in support of electric generation…..whatever impacts the.

Texas Lignite Industry

Texas Lignite Because >95% of lignite mining operations in Texas are in support of electric generation..whatever impacts the electric generators impacts lignite mining 40 coal-fired electric generating units - produce 21,238 MW 19 operating lignite mines 37% of Texas electric generation from coal Texas is the 5 th largest coal producer in US

Economic Impacts - Texas

Economic Impacts Northeast Texas

Texas: Our Growing State

Texas: No Megawatts to Spare

Pending and Proposed Regulations Cross-State Air Pollution Rule - EPA Greenhouse Gas Rules EPA New power generation units Existing power generation units Mercury Rule - EPA

Cross-State Air Pollution Rule National regulation of power plant's impacting downwind regions. Strict limits on SO 2 and NO X emissions from power plants in 27 states SO 2 precursor to PM2.5 and NO X precursor to both ozone and PM2.5 Proposal phase, Texas was only included for seasonal compliance. Without notice, in final rule EPA forced Texas to comply with strict annual compliance

CSAPR Regulated States

CSAPR Legal Wrangling Finalized July 8, 2011 with compliance by January 1, 2012 Stayed by US District Court of Appeals on December 30, 2011 August 21, 2012, the D.C. Circuit Court of Appeals vacated CSAPR, finding that EPA exceeded its CAA statutory authority EPA appealed to Supreme Court, oral argument on December 10, 2013, with decision is expected within the next few weeks

CSAPR Potential Outcome EPA estimates annualized costs of more than $800 million Electric Reliability Council of Texas (ERCOT) predicted rule would cause between 1,200 to 1,400 MW loss during the peak demand Potential for rolling blackouts De-rate or idle electric generation units Lignite mining operations would see significantly reduced tonnage demands

Greenhouse Gas Rule: New Electric Utility Generating Units Sets standards for CO 2 for new coal and gas fired power plants Prosed rule published April 13, 2013 received 2.5 million comments Revised rule Published January 8, 2014 Ties CO 2 emissions to climate change Allowable emission limits lower than those achieved by any currently existing coal-fired electric generation unit

Greenhouse Gas Rule: Existing Electric Utility Generating Units Prosed rule to be published Fall 2014 Sets standards for CO 2 for existing coal and gas fired power plants Allowable emissions limits could idle or de-rate existing units No real plan for lost megawatts Reduced tonnage demands for lignite mining operations

Mercury and Air Toxic Standards Finalized December 16, 2011 Implementation delayed, anticipated 2016 Strict limits on Hg and other hazardous emissions from power plants Standards are at lowest measurable detection limits of lab equipment Allowable emission limits would idle or de- rate existing units 1,100 coal units to be affected nationwide

Potential Impacts Combination of rules will lead to premature retirement of coal-fired units Texass economy and projected growth indicate no megawatts to spare would impact future economic growth potential Jobs and economy of local communities will be hardest hit by pending rules

Potential Impacts With so many pending regulations, predictable energy costs is impossible Ultimately, regulations will result in a decline in lignite mining Less mining means reduction in the $6.2B economic impact of lignite mining and coal-fired electric generation industry

Questions

Texas Lignite Industry. Texas Lignite Because >95% of lignite mining operations in Texas are in support of electric generation…..whatever impacts the.

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