InFocus: Climate Change

Our Position

· Human-induced greenhouse gas emissions are key drivers of climate change.

· A carbon emission reduction strategy must use all available options including conservation, reduction and efficiency.

· A cap-and-trade system is the most effective way of finding a price for carbon—and provides needed incentives for investment in low-carbon technologies.

· Our parent company Centrica recently signed the Copenhagen Communiqué, a call to world leaders to set out a strong and effective framework to reduce carbon emissions.

Direct Energy Actions

Managing our internal footprint

Reducing our own carbon footprint of our buildings, fleet and • travel 8.5% by 2013 relative to a 2007 baseline.

Offering low-carbon products and services to customers^*

Renewable power options.

•  Carbon-neutral natural gas.

•  Energy efficiency products and services.

•  Renewable energy credits and carbon offsets.

•  Carbon footprint measurement and management.

•  Demand response solutions.

Maintaining a responsible generation fleet

· Our 3 power plants, with combined-cycle natural gas turbines, combined with our five wind power purchase agreements yield one of the lowest carbon intensity fleets in North America.

Advocating with key stakeholders

· At federal, state and provincial levels, we advocate for accurate price signals for energy conservation and solutions to decrease emissions through appropriate legislation, technology and incentives.

Impact of Climate Change (examples)

Rising temperature and sea level

Rapidly retreating glaciers

More extreme and volatile weather

Thawing permafrost

Unpredictable growing seasons

Water scarcity

Population displacement

Loss of biodiversity

Key North American Policies

Federal • – The US is likely to enact a national Greenhouse Gas cap-and-trade scheme in the near future. Canadian officials have indicated they will enact policies to align with the US model.

Regional • – 24 states and four provinces are developing regional carbon emissions management schemes. Examples include the Regional Greenhouse Gas Initiative in the northeastern and mid-Atlantic states, Western Climate Initiative, and Midwest Regional Greenhouse Gas Reduction Accord.

Provincial • – British Columbia has implemented North America’s first carbon tax. Ontario has introduced the Green Energy Act to advance renewable energy and conservation.

State • – 29 states have renewable portfolio standards and net metering policies (to measure each household’s energy use) exist in 42 states. 19 states have energy efficiency resource standards.

Recent Scientific Findings

· The annual atmospheric emissions growth rate between 2000-2007 increased to 3.5%, four times the 0.9% seen between 1990-1999, faster than worst-case scenarios from the Intergovernmental Panel on Climate Change.

· The global average temperature has increased 0.6 oC above pre-industrial levels. It is projected to increase further at least 1.4o to 4.3oC by 2100.

· September 2009 was the second warmest September ever recorded (highest was 2005) and had the second lowest extent of Arctic sea ice on record (lowest was 2007).

· The Earth’s oceans had a record warm summer this year, 1.04 oF above the 20th century average.

· Ice melt from glaciers is accelerating. The rate of ice loss from 30 reference glaciers has doubled since 2000 over the previous two decades.