Subject: Re: More PacifiCorp legal news
THEY ARE GOING TO BE CRAWLING AND BEGGING WARREN SOON

ARLP Call:

Beyond the obvious limitations of renewable resources for round-the-clock availability, the actual investment in needed high-voltage transmission to utilize those renewable sources has not come close to expectations, making the ability to shift supply across regions far less practical, or in many cases even possible.

Another example is a recent op-ed in the Wall Street Journal [Technical Difficulty] are pushing the power grid to what could become a breaking point”. In it, they cited Georgia Power's recent 17-fold increase in winter power demand forecast by 2031 from growth in EV and battery facilities. PJMs doubled 15-year annual forecasts for demand growth and a new micron chip plant in New York that is expected to draw more power than the States of New Hampshire and Vermont combined, among other examples.

Finally, the Washington Post published an article on March 7 entitled “amid explosive demand, America is running out of power”. In it, they describe how vast swaths of the U.S. are at risk of running short of power due to the growth of data centers and clean tech facilities. Georgia's industrial demand is at record levels. Arizona public service expects to be out of transmission capability before the end of the decade without major investment. Northern Virginia needs the equivalent of several large nuclear reactors to serve all of the data centers being planned in Texas, as we know is already facing frequent shortages and interruptions, they said.

Notwithstanding these warnings and the practical realities of how the grid works, The Biden Administration through the United States Environmental Protection Agency last Thursday, finalized several regulations designed to prematurely close existing coal plants that are essential to providing grid saving baseload power in heavily energy consuming states.

In response to these rules, the National Mining Association called out EPA for: One, refusing to account for irrefutable evidence that electricity demand is soaring. Two, disregarding validated warnings from grid experts related to coal plant closures. And three, ignoring the basic fact that there is no adequate replacement ready to replace the sorely needed dispatchable generating capacity coal was providing.

America's Power also issued a statement last week in response to the EPA's new Clean Power Plan 2.0 they described the rule as “an extreme and unlawful overreach that endangers America's supply of dependable and affordable electricity”. They followed by saying “the new Clean Power Plan is the same kind of overreach that caused the U.S. Supreme Court to reject EPA's first Clean Power plan in 2022”.

At the end of the day, it is our view that physics will always trump bad policy that we believe is impossible to meet. For example, the Edison Electric Institute, a trade association representing the interest of all U.S. investor-owned electric companies, responded to the EPA package of final rules for power plants by stating “we are disappointed that the agency did not address the concerns we raised about carbon capture and storage. CCS is not yet ready for full-scale economy-wide deployment, nor is there sufficient time to permit, finance, and build the CCS infrastructure needed for compliance by 2032”.

The Wall Street Journal editorial board also weighed in by writing, “Section 111 of the Clean Air Act says, the EPA can regulate pollutants from stationary sources [Technical Difficulty] through the “best system of the emission reduction” that [Technical Difficulty] neither the best nor adequately demonstrated. As of last year, only one commercial scale coal plant in the world used carbon capture, and no gas-fired plants did”. They went on to say “by the way, EPA plans to unveil soon another rule to reduce CO2 emissions from existing gas-fired plants, so some of them may also have to shut down. Meantime, China has added about 200 gigawatts of coal power over the last five years, about as much as the entire U.S. coal fleet. The Biden fossil fuel onslaught will have no effect on global temperatures”.

Government directives designed to support greater dependence on renewables cannot change the fundamental realities of how electricity is generated and transmitted as we look at expected supply and demand. Our customers, whose job it is to keep the lights on reliably and affordably, know this. That is why we believe the U.S. will continue to see delays and extensions in the premature closure of critical coal plants and why we are committed to serving these markets for many years to come.

Over the past few quarters, utilities have extended the planned operating life of approximately 10 gigawatts of coal generating capacity as a result of increasing electricity demand and delays in the construction of replacement generation, and we see room for that number to increase.

Now turning to strategic updates related to our business, this year in our coal segment we expect to complete major infrastructure projects at Tunnel Ridge, Hamilton, Warrior, and our River View complex. These already well-capitalized mines will benefit from these payout projects, making them more productive, improving their cost structure, and extending their overall mine lives. As a result, we expect to maintain our position as the most reliable, low-cost producer in our operating regions for many years to come.

Turning to our Royalties Segment, we remain committed to growing our oil and gas royalties business, which delivered record volumes in 2023 and again in the first quarter of this year. We like the cash flow potential the segment offers via hedge-free exposure to commodity prices and organic growth. We are