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DTE's perspective: how climate change is changing the energy market.

Greenhouse gas emmissions and their impact on climate change is one of today's foremost issues of public and political concern. Most energy companies recognize that climate change legislation, including mandatory greenshouse gas reductions, are certain.

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Skiles Boyd, vice president of environmental management and resources for DTE Energy, talked to the Detroiter about the steps DTE Energy is taking to plan of rthe future impact of greenhouse gas regualtions on energy costs.

DTE Energy supports mandatory greenhouse gas emission policy that is economy-wide, implements the reduction in a reasonable time frame and is structured to minimize costs, to the extent possible, on electric customers in Michigan. We have developed the following key principles to guide us in our review of proposed climate change legislation:

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Start modestly and set greenhouse gas emission reduction goals that are concurrent with the availability of emerging technology

* Aggressive greenhouse gas reduction requirements in the early years will sign ficantly impact energy prices because of the absence of short-term low carbon emitting alternative to the existing fleet of fossil-fuel based generation.

* Renewable technologies (e.g. wind power) can account for a portion of the reduction, but are constratined in the short term by equipment back logs and available transmission lines.

* Carbon capture and storage technologies for long term sequestration of carbon emissions from coal fired power plants are in the development stage and will not be readily available for widespread commercial use until the mid 2020s.

* We believe nuclear energy has a significant role in a carbon constrarned world; however, licensing and construction limes prevent this technology from having a significant emission reduction impact in the shot to mid-term.

* Over-reliance on natural gas for electric generation in the near-term, which would result if we try to do too much too fast, would further raise natural gas prices and volatility.

Allocate allowances such that Michigan residents only pay their fair share for actions to reduce emissions - Detroit Edison actual emissions are already at 1990 levels. An unfair allocation would penalize Detroit Edison customers for reductions already gained. The action of emissions credits would hurt Michigan residents.

Allow verifiable offsets of carbon emissions (e.g.,) forestry projects) -DTE Energy has been a leader in forest carbon sequestration activities and and ill methane capture.

Encourage and finance technology research, development and deployment -Early investments in renewables, clean coal technologies and nuclear power will significantly decrease long-term costs.

Provide reasonable price certainly -A mandatory greenhouse gas reduction program has such widespread potential impact on energy availability, and thus the economy, that caution must be taken to avoid significant economic impacts.

Apply economy-wide -This is oritical for minimizing the overall cost to the public.

Include major developing countries is some manner - greenhouse gas emissions from major developing countries like China and India are increasing and quickly surpassing developed countries, Major reductions in the U.S. will be meaningless if emissions continue to increase in the developing countries.

Harmonize overlapping requirements with federal and state greenhouse gas requirements -Local, state and regional greenhouse gas initiatives as well as energy and environmental federal programs should not conflict with or confuse any legislation.

Several bills have been introduced in Congress to address climate change and we expect passage of legilation in the not too distant future. DTE Energy is supportive of legislation to address this issue. However, legislation that is not consistent with the above principles can harm not only Michigan's but the U.S. economy.

Skiles Boyd

Vice President of Environmental Management and Resources DTE Energy
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Title Annotation:FEATURE
Publication:Detroiter
Date:May 1, 2008
Words:586
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