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Carbon Policies & Impact

2012 Corporate Responsibility Report

The national discussion on climate change and policies to address it has now expanded into both the legislative and regulatory arenas. While state and regional initiatives continue to take shape in parts of the country, we continue to believe that this issue requires a national policy framework – one that is focused on achieving the greatest reduction in GHG emissions at the lowest cost to the consumer. We are working to develop consensus-based strategies with policymakers and stakeholders to effectively address the challenges and opportunities associated with global climate change.uclear power.

Congressional landscape

The discussion in Congress over national climate and energy policies has changed significantly since 2010. The 111th Congress did not pass broad climate or energy legislation.  It is unlikely that the current 112th Congress will pass a comprehensive climate and energy package, although there are discussions regarding a possible clean energy standard bill. In addition, debate continues regarding the EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act.

Regulatory landscape

In 2007, the U.S. Supreme Court ruled that the EPA has the authority to regulate greenhouse gases under the Clean Air Act.  Although the court did not require the EPA to exercise this authority as part of the decision, on Dec. 15, 2009, the agency published an endangerment finding for greenhouse gases. This finding has been challenged by a number of parties.

Using the endangerment finding as a foundation for additional regulation of GHG under the Clean Air Act, the EPA issued the first GHG emissions standards for new automobiles and light trucks in April 2010. Regulation of GHG emissions from stationary sources such as power plants, refineries and manufacturing plants began Jan. 2, 2011. In addition, in March 2012 EPA issued proposed New Source Performance Standards for GHG emissions from new fossil fuel-fired power plants. The proposal would require that new plants achieve a stringent CO2 emission rate corresponding to an efficient, natural gas-fired combustion turbine regardless of the fuel used. If finalized as proposed, this will have the effect of eliminating new coal-fired plants unless technology such as carbon capture and storage can be fully developed and commercially available. The final standards are expected to be issued after the 2012 presidential election.

The Clean Air Act was developed to address pollutants that have direct effects on human health and welfare on a local or sometimes regional level. We do not believe it was designed to deal with gases such as CO2, which has generally uniform concentrations and whose effects on health and welfare are indirect and very difficult to quantify.Indeed, the Administration, the EPA and industry all agree that regulation of GHG through the Clean Air Act is not the desired approach. As stated in our position, Progress Energy strongly believes that legislation developed specifically to address complex climate change on a consistent, national basis is the appropriate policy approach.

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