California Public Utilities Commission

hardtofindcurtainΠολεοδομικά Έργα

16 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

190 εμφανίσεις

California Public Utilities Commission


Paul Clanon

Executive Director

August 2011

1

Presentation Overview



About the CPUC



Energy



Climate Change Mitigation



Communications



Water



Rail Safety



Passenger Transportation

2

CPUC Mission

The CPUC serves the public

interest by protecting consumers

and ensuring the provision of safe,

reliable utility service and

infrastructure at reasonable rates,

with a commitment to

environmental enhancement and

a healthy California economy.



We regulate utility services, stimulate innovation, and
promote competitive markets, where possible, in the
communications, energy, transportation, and water
industries.

3

About the CPUC



Californians spend more than $59 billion annually
for services from industries regulated by the CPUC.




Headquartered in San Francisco with offices in
Los Angeles and Sacramento.




1,000 Employees: Including Engineers, Analysts,
Lawyers, Auditors, Support




Five Governor
-
appointed Commissioners serve
staggered six
-
year terms:


Michael R. Peevey

President

Catherine J.K.

Sandoval

Mike Florio

Timothy Alan Simon

Mark Ferron

4

Executive Director Role

The CPUC's Executive Director works with Commissioners,
Directors, staff, oversight agencies, the Legislature, the Governor's
Office, and all external stakeholders to coordinate and facilitate
timely handling of procedural matters and efficient internal
operations.


The Executive Director's office works to

anticipate regulatory and agency needs

in order to develop and implement appropriate

strategies to meet those needs.


Paul Clanon,

CPUC Executive Director

5

CPUC Budget 2009
-
10


The CPUC’s Fiscal Year

2009
-
10 budget is $1,364
million, which consists of
approx. $157 million for
operations and $1,207
million in pass
-
through
funds ($638 for Telco
Universal Service and $569
for Gas Consumption

Surcharge Programs)



The total number of

authorized positions is
1,022

Funding for CPUC $157 million Operating Budget

Federal Trust

Fund $1.3 1%

Reimb. from

Utilities $22.9

15%

Transportation

Accounts $22.4

14%

Telecom

Universal

Service $5.7 4%

Utility Reimb.

Account $104.8

66%

6

CPUC Proposed Budget FY 2010
-
11

($ millions)

FY 2009
-
10

FY 2010
-
11

Increase from
Prior Yr

Positions

1,008

1,024.3

16.3

Appropriation

$1,248

$1,442

$194









Personal Services

$103

$107

$4

Operating Expense & Equipment

$55

$94

$39


Total Operating Budget

$158

$201

$43









Pass Through: Universal Service/

$1,090



$151

Gas Consumption Surcharge

$1,241










Total CPUC Budget

$1,248

$1,442

$194

7

FY 2010
-
11 Authorized Position Changes


Division

Program

PY

2010
-
11 BCP

CPSD

Rail Transit Safety


3

DRA

Energy Efficiency Programs Evaluation


1


DRA

Low Income Assistance Programs Evaluation


1

Energy

RPS and Renewable Transmission


7


Water

Electric Generation Infrastructure


1

Energy

Advanced Energy Storage


3


IMSD

Centralized Fines and Restitution


3


Energy

ARRA Grant


Electricity Regulators Assistance


4


Comm

ARRA Grant


Broadband Mapping


2


IMSD

ARRA Grant


Broadband Mapping


2

Energy

AB 758
-

Energy Efficiency Programs


1

Energy

AB 920
-

Net Energy Metering


2

ALJ

AB 920


Net Energy Metering


0.3


Total, New Positions

30.3

Positions Expiring on
6/30/2010

CPSD

Gas Pipeline Safety program

-
1

IMSD

Centralized Fines and Restitution

-
3

CSID

Universal Lifeline
-
CAB

-
10




Total, Net Changes

16.3

8

Aggressive Recruiting Leads

to Diverse Staffing


90 employees are fluent in 20 different languages combined

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
New Hires
Current Workforce
Asian
African American
Filipino
Hispanic
Pacific Islander
Native American
Other
White
9

Customer Care and Protecti
on

The CPUC responds to ratepayer inquiries, resolves customers’
informal complaints regarding their utility billing and services, assists
the public participating in CPUC proceedings, and investigates and
enforces public safety standards.

10

Environmental Awareness Day

CPUC Staff Participates

in the Community


John Muir School


SF Food Bank


Food From the Bar


Environmental Awareness Day


C5 Children’s School



Halloween Fair for School Children

Food From the Bar

11

CPUC Reaches Out to all Consumers,

Especially the Underserved



Outreach officers


Consumer education campaigns in 13 languages


Bill Fairs


Small Business Expos


Public Hearings and Workshops

Small Business Expo

Bill Fair

12

Helping Consumers



California LifeLine

provides discounted

residential telephone services to qualified

low income consumers




Deaf and Disabled

Telecommunications Program

provides

equipment and services to deaf, hearing

impaired and/or disabled consumers





California Alternate Rates for Energy

provides


low income consumers with a 20 percent discount


on their electric and natural gas bills




Low Income Energy Efficiency Program

provides no
-
cost
weatherization services to low
-
income households


The Low Income Oversight Board

advise the CPUC on low income
electric and gas customer issues and serves as a liaison for the CPUC to
low income consumers

13

CPUC Buys Products and Services


Fiscal Year 2008
-
2009

Statewide Contracting & Procurement Goals:




Small Business


Goal:

25 percent

Achieved:

3.35%




Disabled Veteran Business Enterprises

Goal:

3%

Achieved:

0.92%


Proposition 209 prohibits:


Preferential treatment to any individual or group in public contracting
on the basis of race, sex, color, ethnicity, or national origin

14

Customer Care and Supplier Diversity


Wins for the Consumers:


Resolved through the Consumer Affairs Branch (CAB) over 21,600 utility customer
complaints and helped to obtain $2.3 million in refunds/bill credits in 2010.


Improved CAB response time to consumers by 36%


in 2010 complaints were
resolved, on average, in 45 days; compared to 70 days in 2009.


Technological improvements are being made to CAB’s phone system.


Resolution CSID
-
003 was approved allowing a set of customer complaint data to be
published on the website. Feedback is being solicited on the data posting and will
guide efforts to post additional data.


Online access provides benefit to consumers:


Electronic online form accessed through CPUC website allows consumers to submit
complaints to CAB 24/7.


Electronic online form accessed through CPUC website allows public speakers to
sign up to speak at CPUC Voting/Business Meetings in advance.


15

Customer Care and Supplier Diversity (cont.)


Established a
Small Business Advisory Council

to ensure that small businesses are
educated about regulatory policies and have the right tools to make informed decisions.


Supplier Diversity


General Order 156 Results
-

2010 Performance



Both Verizon and AT&T wireline have
surpassed the 40% mark

in procurement from diverse
suppliers.



Cal
-
AM Water procured over 26%

of their total from diverse suppliers; this has never been
done in the water industry.



Overall, the traditional six

companies once again exceeded their prior year procurement from
diverse suppliers; this time around by an
unprecedented $900 million
.


For calendar year
2009 the traditional six

companies’ total procurement from diverse suppliers was just over $3
billion, while for calendar year 2010 it was just over $3.9 billion.


PG&E = $1.1 billion or 32.67%


SDG&E = $385 million or 36.68%


SoCalGas = $230 million or 37.42%


SCE = $1.1 billion or 27.10%


AT&T = $948 million or 40.04%


Verizon = $123 million or 41.30%

16

Energy

17

Overview of CPUC Energy Oversight



The CPUC regulates the investor
-
owned electric and gas utilities
in California that collectively serve over two
-
thirds of total electricity
demand and over three
-
quarters of natural gas demand throughout
California.



Through its oversight of these utilities, the CPUC has played a
key role in making California a national and international leader on
a number of energy related initiatives designed to benefit
consumers, protect the environment, and support California’s
economy.



The CPUC develops and administers energy policy and programs
to serve the public interest and ensures compliance with decisions
and statutory mandates. The CPUC staff provides objective and
expert analyses that promote reliable, safe, and environmentally
sound energy services at lowest reasonable rates for the people

of California.

18

CPUC’s Role and Responsibilities


Key Role:

Ensuring private utility customers have safe,



reliable service at reasonable rates.


Energy


Regulate investor
-
owned electric and gas utilities (such as PG&E, SCE, SDG&E and SCG), which
serve over two
-
thirds of electricity demand and over three
-
quarters of natural gas demand in the
state.


Communications


Administer universal telephone service programs, issue video franchises, enforce customer service
standards for telephone services, and regulate rates for basic phone service and rural carriers.


Consumer Protection and Safety


Enforce consumer protection laws and service standards, investigate fraud and illegal activity, and
prosecute violators of the Public Utilities Code, CPUC orders, and utility tariffs. Inspect and audit
power plant operation, natural gas and electric utility infrastructure, passenger carriers, household
goods movers, freight railroads, and rail transit systems.


Consumer Complaint Resolution


Assist consumers in informally resolving billing and service disputes with utilities. Promotes efficient
use of staff resources to resolve complaints informally, not in the more burdensome formal docketed
process.


Passenger Transportation


License limousines and buses, and enforce statutes and regulations that apply to these carriers’
operations.


Rail Safety


Inspect freight railroad tracks, equipment, and facilities; evaluate and approve railroad crossings for
safety; and verify the safety and security plans of rail transit agencies.


Water


Regulate investor
-
owned water and sewer utilities, which serve about 18 percent of the state’s
residents.

19

CPUC Energy Goals For Next 3
-
5 Years



Reduce per capita energy use through efficiency and conservation




Ensure energy resources to meet demand




Promote renewable power




Decrease the impacts of California energy services on global warming

20

CPUC’s Role in Energy Issues


Set retail rates and requirements for
utilities


Enforce compliance (include levy
fines)


Establish safety standards


Site transmission lines and conduct
environmental review


21

Low Income Programs Provide Bill Assistance and
Energy Efficiency Improvements for Eligible Customers




Two main programs for low income assistance:

1.
California Alternate Rates for Energy (CARE)


Provides a 20% discount on electric and natural gas bills to more than 5 million
households.

2.
Energy Savings Assistance Program (ESAP)


Provides qualified low income households with energy efficient appliances, energy
education and weatherization measures at no cost (formerly known as Low Income
Energy Efficiency Program
).


Need for low income assistance expected to increase:

Increased Reach*:



Now treating 300,000+ homes/year with efficiency solutions, cumulatively reaching 1.2
million homes since 2006


With the CPUC’s goal of 90%+ penetration, as well as the economic downturn, CARE
enrollments have risen to 5 million with an estimated statewide penetration of 94%

Increased Budget**:



ESAP will provide $320 million in efficiency services to low income homes in 2011, and
employ approximately 110 contractor firms and Community Based Organizations in
program delivery.


CARE will provide approximately $877 million in bill discounts in 2011.


The total combined efficiency and bill discount assistance provided to low income
households in 2011 will amount to $1.2 billion, provided by all other ratepayers.


*Data as of December 2010

**2011 Budget as approved in D0811031

22














Serving 30 million
consumers in PG&E,
SCE, and SDG&E and
many municipal utilities

Heat storm in 2006 with
peak load of 50,270 MW
on July 24,2006

43,000 MW of available
generation capacity at
peak after derates for
hydro, wind and outages

9,260 MW net imports on
peak hour

23

Overview of the Western Interconnection

California dependent on imports to help meet peak demand


Includes 14 western states, British
Columbia and part of Mexico


California has accounted for almost
40% of peak demand. This is
declining.


All one interconnected system

24

California Electricity

Regulatory Structure

Jurisdiction

Regulatory Status

Generation

Federal, except
State governs
purchase decisions

Partially
deregulated (hybrid)

Transmission

Federal, except in
case of local public
utilities

Regulated

Distribution

State

Regulated

Retail delivery

State

Partially
deregulated

25

Regulatory Structure in Practice


For utilities under CPUC jurisdiction, state
responsibility to ensure reasonable rates


CPUC governs resource portfolio decisions
(and therefore cost impact to consumers)
for each regulated utility


Federal requirements can sometimes
override state rules


California usually
goes beyond federal minimum
requirements

26

Energy Action Plan I and II


Unprecedented collaboration by
principal energy agencies in
California


Summarizes California’s energy
goals


Identifies specific actions to
implement goals


Lays out the “loading order”


Addresses climate change,
RD&D, and transportation

27

The Loading Order

The “Loading Order” sets priorities for California’s procurement strategy




Clean and Efficient

Fossil
-
Fired Energy

Efficiency and

Demand Response

Renewable Energy

28

Priority One: Energy Efficiency



Energy Efficiency is California’s highest priority

resource to meet energy needs in a clean,

low
-
cost manner and aggressively reduce

greenhouse gas emissions.




In September 2009, the CPUC approved $3.1 billion for energy efficiency
programs.




Innovative new framework of incentives and penalties to drive investor
-
owned utilities above and beyond California’s aggressive energy savings
goals.




Set foundation for making energy efficiency an integral part of "business
as usual" in California through the California Energy Efficiency Strategic
Plan.

29


Eliminates need for 10
new power plants


Eliminates 9 million tons

of CO
2
emissions annually
-

equal to 1.8 million cars
off the road


$10 billion in net savings



to consumers

California’s Aggressive Energy Efficiency Program

2004
-
2013

30

Energy Efficiency Programs

2010
-
2012 Programs


September 2009 Decision approved $3.1 billion for efficiency programs,
and additional $750 million for low income home retrofits.



Energy Efficiency is the least cost, most reliable, and most environmentally
sensitive resource to meet growing demand and GHG reduction goals.



Supports energy, greenhouse gas, and criteria pollutant savings
equivalent to three new power plants.



Estimated to save ratepayers $4.2 billion net.*



Estimated 15,000 to 18,000 new or retained jobs.**



Numerous innovative initiatives aimed at transforming the market.


* Based on forecasted benefit
-
cost ratio of 1.36 in utility applications.

**
Job benefits calculated with a methodology from the Council of Economic Advisers’ May 2009
publication of

“Estimates of Job Creation from the American Recovery and Reinvestment Act of
2009
”.


31

Energy Efficiency Budgets 2010-2012
Residential
23%
Commercial
29%
Industrial
13%
Agriculture
4%
New Construction
4%
Institutional - UC/CSU, DGS,
Etc
4%
Local Gov't Partnerships
6%
HVAC
4%
Evaluation, Meas. &
Verification
4%
OTHER
9%
Residential
Commercial
Industrial
Agriculture
New Construction
Institutional - UC/CSU, DGS, Etc
Local Gov't Partnerships
HVAC
Evaluation, Meas. & Verification
OTHER
Investor
-
Owned Utility 2010
-
12 Energy Efficiency
Budget by Program Areas

32

Energy Efficiency Programs

Boost Savings

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

GWh/year

Appliance Standards

Building Standards

Utility Efficiency

Programs at a cost of

~1% of electric bill

~15% of Annual Electricity Use in California in 2003

33

-
10,000
20,000
30,000
40,000
50,000
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
Year
GDP per Capita
0
3,000
6,000
9,000
12,000
15,000
kWh per Capita
US GDP per Capita
CA GDP per Capita
US kWh per Capita
CA kWh per Capita
U.S. Energy Use Grows While California
Usage Remains Flat

Energy Efficiency and Economic Growth: 1975
-
2005

34

Supply Side Benefits of Energy Efficiency


Generation Benefits


Saves capacity and energy


Lowers fuel costs


Reduces required reserves



Transmission and Distribution Benefits


Defers new investment


Improves reliability

35

The California
Long Term
Energy
Efficiency
Strategic Plan

Making Energy Efficiency a Way of Life in California

36

Next Generation of Energy Efficiency

On Oct. 18, 2007, the CPUC took action to make
energy efficiency “business as usual” in
California.



California

Energy Efficiency Strategic Plan



offers long
-
term (through 2020), statewide

utility strategic plan for energy efficiency



All new residential construction in California will be zero
net energy by 2020


All new commercial construction in California will be zero
net energy by 2030


Heating, Ventilation, and Air Conditioning industry will be
reshaped to ensure optimal equipment performance




37


Develop path to Zero Net Energy

Building Design by 2030



Leverage opportunities from

emerging technologies initiatives,

incentive programs, and local

initiatives targeting commercial

building/property developers



Plan “exit strategy” via
California Energy
Commission

standards over next 6
-
10 years

Commercial New Construction

Goal

38


Residential new construction and major
renovations exceed Title 24 standards by 35%

by 2011


Incorporate these into minimum 2011 Title 24
standards


Plan path to zero net energy homes by 2020

Residential New Construction

Goal

39

Implementing the Strategic Plan:

2010
-
2012 Programs

September 24, 2009, CPUC Decision


Approves $3.13 billion for energy efficiency
programs


Three Year Savings Potential:



7,000 GWH


1,500 MW


150 MMTherms



3 million tons of CO2e
avoided


Equivalent to
3

large power plants


40

PG&E

SCE

SDG&E

SoCal


Total

2010
-
2012 Program Cycle Electricity Savings
(GWh)

3,100

3,316

539

-

6,965

Cumulative Savings (GWh)

6,950

7,581

1,379

-

15,910

2010
-
2012 Program Cycle Peak Savings (MW)

703

727

107

-

1,537

Cumulative Peak Savings (MW)

1,546

1,644

269

-

3,459

2010
-
2012 Program Cycle Natural Gas Savings
(MMTh)

48.9

-

11.4

90

150.3

Cumulative Natural Gas Savings (MMTh)

108.8

-

24.2

175

308.1

2010
-
2012 GHG Reductions (MMt CO
2
e)

1.27

1.08

0.24

0.48

3.07

2010
-
2012 Budgets (millions)

$ 1,338

$ 1,228

$ 278

$ 285

$ 3,129

Notes:

1.
Cumulative Savings include annual goals set for the 2006
-
2008 program cycle. Under CPUC policy IOUs are
required to ensure that savings claimed in prior program cycles persist over time and any shortfalls between goals and
achievements are made up in subsequent cycles.

2.
GHG calculations assume 326 MMt CO
2
e avoided per GWh and 5,300 CO
2
e avoided per MMth.

Goals and Budgets for the 2010
-
2012 Program Cycle


41

Economic Impact:

2010
-
2012 Snapshot


$3.1 billion invested in California


15,000


18,000
new

jobs


$122 million for workforce training


$260 million for local government programs


Additional $750 million for low income home retrofits
and appliances

*Job benefits calculated based on Council of Economic Advisers’ May 2009 publication of “
Estimates
of Job Creation from the American Recovery and Reinvestment Act of 2009”


42

2008 DSM Clean Energy Revenue Requirements


All IOUs

PROGRAM

2008 IOU

Revenue Req.*

% of Total
Revenue Req.

Per
Capita**

Energy Efficiency

$ 758

2.08%

$ 27.89

Low Income Energy
Efficiency

$ 157

0.43%

$ 5.81

Demand Response

$ 141

0.50%

$ 5.21

CA Solar Initiative

$ 323

1.20%

$ 11.88

Self Generation Incentives

$ 90

0.25%

$ 3.35

TOTAL

$1,469

4.46%

$ 54.14


* 2008 Revenue Requirements for PG&E, SCE, SDG&E and SoCalGas. Actual level of spending varies based on
availability of carry
-
over funding from prior years.


** Does not reflect actual amount paid on utility bills. Bill impact will vary depending on the tariff rate and usage.

43

Utility Budgets


IOUs Proposed Budgets = $3.7 billion


Approved Budgets = $3.1 billion


42% higher than previous cycle


20% lower than requested


Cost Caps and Targets


10% cap on Administrative Costs (utility
overhead, labor and general expenses)


6% cap on Marketing and Outreach


4% cap on EM&V


20% target on non
-
incentive/rebate program
costs

44

Program Highlights


12 Statewide Programs


Statewide Education Campaign to Create Behavior
Change


Web Portal for Efficiency Professionals


Continuous Energy Improvement Programs for Industry


Investment in Advanced Lighting Technologies


Review of Best Practices for Measurement and
Verification

45

LONG
-
LASTING Energy Savings in Buildings


Cal SPREE (Statewide Program for Residential
Energy Efficiency)


Commercial and Government Benchmarking
and Retrofits


Comprehensive HVAC program


Commercial and Institutional On
-
Bill Financing


Training for Building and Appliance Contractors,
Architects, Owners, Managers, and Inspectors


Zero Net Energy New Construction

46

California is Advancing All

Cost
-
Effective Energy Efficiency


California Memo of Understanding has
16
signatories committed to National Action Plan for
Energy Efficiency:


10 public utilities


3 large investor
-
owned utilities


2 state agencies


1 environmental Non
-
Governmental Organization


CPUC's current energy efficiency goals for utilities
are through 2013, soon to be extended to 2020


California Energy Commission’s Assembly Bill 2021
process will adopt 10
-
year statewide energy
efficiency goals


47

Demand Response



Demand Response enhances electric system reliability, reduces power
purchases and individual consumer costs, and protects the environment



Allows consumers to “respond” by lowering energy usage during periods
of high “demand”



Examples:



Advanced Metering



Air Conditioning Cycling Program for PG&E



Interruptible programs




In 2009, the CPUC adopted a default dynamic rate (referred to as “Critical
Peak Pricing”) for Edison’s largest customers (to begin in 2010), and
opened a proceeding to do the same for PG&E’s largest customers
(decision expected in February 2010). SDG&E implemented a default
dynamic pricing rate for its medium and large customers in 2008 and
continued the rate through 2009.


48

Demand Response Shaves the Peak

Sept '05 to Sept '06
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
1
252
503
754
1,005
1,256
1,507
1,758
2,009
2,260
2,511
2,762
3,013
3,264
3,515
3,766
4,017
4,268
4,519
4,770
5,021
5,272
5,523
5,774
6,025
6,276
6,527
6,778
7,029
7,280
7,531
7,782
8,033
8,284
8,535
Hour
Hourly Ave. Demand
50,085 MW Peak 7/24/06
Greater than 45,000 MW 57 hours or 0.65%
Greater than 40,000 MW 279 hours or 3.2%
Greater than 35,000 MW 805 hours or 9.2%
Winter Peak 33,275 MW 12/14/05
California Independent System Operator Load Duration Curve

49

Resource Adequacy and Energy Procurement Programs Ensure
Reliable Electric Service at Reasonable Cost

Ensuring resource adequacy


The CPUC’s Resource Adequacy program ensures that sufficient generation is
under contract to meet short term needs (monthly and annually).


The CPUC’s Long Term Procurement Program ensures sufficient new resources
are constructed to meet long term needs (10 years out).


962 MW of new natural gas fueled generation came into operation in 2010 as
a result of utility procurement activities.


CPUC approved applications for the construction of 1,743 MW of new natural
gas fueled generation in 2010.


Analyses of Energy Efficiency programs, Demand Response programs,
Renewable energy projects, and cost effective combined
-
heat and power
projects are on
-
going to ensure that the use of fossil generation is minimized.


CPUC is working closely with California agencies to eliminate once
-
through
-
cooling systems in electric power plants and meet air restrictions in the L.A.
Basin while ensuring that electric reliability is not threatened.

Implementing energy procurement policy to ensure reliable service at a
reasonable cost


Increased focus on integrating preferred renewable resources

at lowest cost.

50

51

Electric Energy Storage


July 2010: CPUC releases Staff White Paper on barriers
and opportunities for energy storage.


September 2010: AB 2415 (Skinner) chaptered


Asks CPUC to determine appropriate targets to procure viable and
cost
-
effective energy storage.


Procurement targets, if any, to be achieved by end of 2015 and
2020.


December 2010: Issued Order Instituting Rulemaking


Legislation asks for proceeding to commence by March 2013;
CPUC is ahead of schedule.


Will address overall policy goals of energy storage and establish
cost
-
effectiveness methodology.


Held workshops on March 9, 2011 and June 28, 2011.

51

Renewable Portfolio Standard (RPS)

52

Renewable Energy Targets

Most ambitious in the country:


20% Renewables by 2010


33% Renewables by 2020

53

California Leads the Way in Renewable Power


California is the largest single market
of all the states for renewable energy


California’s renewable goals will:


Add 6,750 MW of new renewable
power


Reduce CO
2

emissions by 18.7
million metric tons

54

Meeting the Renewable Energy Goal

The CPUC is aggressively implementing the renewable energy plan



Based on contracts currently approved or in the

pipeline, utilities should get very close to 20% by 2010







2009 Activities



The CPUC approved over 20 renewable energy contracts with a
combined capacity, upon operation, of over 3,000 MW.




More than 300 MW of new renewable capacity came online in 2009,
bringing the total online capacity of new renewable resources to 1,020 MW
since the start of the RPS program.

55

Aggressive Implementation of


Renewable Portfolio Standard (RPS)



Large IOUs achieved 17% RPS in 2010 (
Increase from 15% in 2009)


PG&E
-

15.9% (14.4% in 2009)


SCE
-

19.3% (17.4% in 2009)


SDG&E
-

11.9% (10.5% in 2009)



CPUC continues to push hard to reach 20% and 33% mandates


CPUC has approved 191 contracts for nearly 17,000+ MW of new and existing RPS
-
eligible
capacity


Nearly 6,000 MW are under review, nearly all for new capacity


2,001 MW of new renewable capacity has come online since 2003


IOUs have sufficient projects under contract to meet a 33% RPS, but more work is needed to
replace projects that may fail and to ensure that projects are developed in 2020 timeframe


CPUC has begun implementation of 33% by 2020 (SB x2)


On May 5, 2011, the CPUC opened R.11
-
05
-
005 to continue the implementation and
administration of RPS Program


The Commission intends to issue proposed decisions in the fourth quarter 2011 setting: 1)
new portfolio content categories, 2) new RPS procurement targets, 3) the most urgent new
compliance rules, and 4) implementing changes to the renewable feed
-
in tariff



56

Large IOU RPS Actual and Forecasted
Generation
0
10
20
30
40
50
60
70
80
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Energy (TWh) / year
Online Generation
Expiring Generation
Contracted Generation
Pending Approval
Under Negotiation
Annual RPS Target
Source: California Public Utilities Commission, 4th Quarter 2009
2020 33% RPS Target
57

Large IOU Bids and Contracts

Large IOU RPS Bids and Contracts
0
10
20
30
40
50
60
70
80
2004
2005
2006
2007
2008
Energy (TWh) / year
Solicitation Bids
Short-listed Bids
Bids Submitted for Approval to Date
Bilaterals Submitted for Approval
Source: California Public Utilities Commission, 2nd Quarter 2009
58

Large IOU Renewable Resource Mix

Expected to Change Over Time

Status of New Renewable Capacity Approved by the CPUC

Actual and Forecasted Large IOU
RPS Resource Mix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005
2010
2015
2020
Percentage of RPS Generation
wind
solar
small hydro
geothermal
biogas
biomass
Source: California Public Utilities Commission, 4th Quarter 2009
22.5 TWh
32.8 TWh
65.7 TWh
70.5 TWh
59

Status of New Renewable Capacity

Approved by the CPUC

CPUC Approved Contracts for New
Capacity Since 2002
New Online MW
9%
Under Development -
On Schedule
40%
Under Development -
Delayed
44%
Cancelled
7%
Source: California Public Utilities Commission, 4th Quarter 2009
60

RPS Capacity Installed Since 2003, By Year


Large IOU New Online RPS Capacity
0
200
400
600
800
1000
1200
2003
2004
2005
2006
2007
2008
2009
Capacity (MW)
Capacity Added in Prior Years
Capacity Added In Current Year
2009 Forecasted
Source: California Public Utilities Commission, 4th Quarter 2009
+66
+51
+75
+113
+350
+177
+33
33
100
151
226
339
690
867
1023
+156
2009 actual
year to date
2009
forecasted
61

0
10
20
30
40
50
60
70
80
2003
2004
2005
2006
2007
2008
Solicitation Year
Energy (TWh) / year
Wind
Solar
Small Hydro
Geothermal
Biogas
Biomass
Source: California Public Utilities Commission, 3rd Quarter 2009
Number of Bids by Renewable Source

in IOU Solicitations

62

California (2000)
284 TWh
US (1999)
3,752 TWh
Natural Gas
Coal
Nuclear
Natural Gas
Nuclear
Hydro
Hydro
Imports
NG = 15%
Hydro = 33%
Coal = 52%
37.6 %
12.4 %
14.8 %
25.5 %
50.2 %
14.8 %
19.4 %
8.5 %
Renewables
8.4 %
Oil
Renewables
3.3 %
1.6 %
California and U.S. Electricity Supply

Source: California Energy Commission

63

Ways to Meet Renewable Energy Goals

The CPUC has approved numerous methods for utilities to
satisfy renewable energy targets:



Long
-
term contracts



Short
-
term contracts



Contracts having curtailability as an attribute



Contracts with delivery at any point in California



Contracts that include firmed or shaped products



Contracts that are “repackaged” from larger

contracts of specific types



Contracts entered into by a procurement entity



Renewable Portfolio Standard
-
eligible generation owned by the utility

64

Coordination of Planning Processes


to Facilitate Achievement of RPS Goals

Transmission planning within California and throughout the West:


Working closely with CAISO and stakeholders to facilitate necessary “network”
expansions of the grid to support clean energy goals, through implementation of
a new category of “policy
-
driven” transmission projects within ISO tariff.

Coordinating resource and transmission planning:


Pursuant to a May 2010 MOU, CPUC and ISO are coordinating resource and
transmission planning to strengthen the state’s planning and permitting
processes.


CPUC and ISO processes use CEC IEPR forecasts and information developed by the
Renewable Energy Transmission Initiative to promote consistency between processes
at the CPUC, CAISO, CEC and IOUs.


CPUC provided 33% by 2020 RPS scenarios for the ISO’s use in its 2011
-
2012
transmission planning process. ISO vetted these scenarios with ISO stakeholders.


Working with ISO to ensure consideration of long
-
term procurement priorities, costs,
and high
-
level siting considerations
early

in the transmission planning process, to
smooth permitting at the CPUC.

65

Bioenergy Helps Meet Renewable Goals


Bioenergy uses renewable biomass resources such as
plant matter and animal waste to produce energy.



Bioenergy will help California meet its aggressive
renewable energy goals.



Since 2002, the CPUC has approved:


16 biomass projects (209 MW)


15 biogas projects (56 MW)

66

Renewable Energy Credits (RECs)


Senate Bill 107


CPUC is authorized (not mandated) to allow RECs to count for
Renewable Portfolio Standard goals


Delivery Rules: Renewable energy must be delivered into
California


REC Eligibility: No RECs created for contracts signed prior to

Jan. 1, 2005, unless explicitly stated or for Qualifying Facility
contracts signed post
-
Jan. 1, 2005


Regulatory Reality:


Complex and lengthy permitting and

siting processes


Energy Infrastructure Reality:


Transmission infrastructure needed

statewide


Transmission congestion prevalent

statewide


No surplus renewable energy to trade

67

California’s Renewable Policies and Energy Market
Differ from Other States with REC Trading


Differences between California and other states:


Hybrid vs. fully deregulated market


Permitting and siting rules


Transmission: infrastructure, number

of control areas


Diversified renewable resources


Flexible procurement options, flexible compliance mechanisms


Penalties

68

Southern California

Transmission Projects

Tehachapi Renewable Transmission Project: Segments 1
-

11

69

Combined Heat and Power (CHP)


CHP is a large cornerstone of the CA electric grid (6,000+ MW) and is a
preferred resource.


GHG Benefits, economic development, locational benefits to the grid and
reliability.


December 2010: CPUC adopted a major all party settlement agreement
creating a new CHP program through 2020, resolving major pending
litigation and provides orderly transition into new competitive procurement
paradigm.


In June 2011 FERC granted utility request to eliminate the must take
obligation for QF facilities 20 MW and greater, setting the stage for the
settlement to go into effect.



December 2010: CPUC adopts decision implementing CHP Feed
-
in Tariff
(AB 1613, Blakeslee).


July and October 2010: CPUC effectively argued at FERC to pave the
pathway for Feed
-
in Tariffs for preferred resources (small new highly
efficient CHP in this instance).


In the wake of FERC determinations, CPUC resolved utility applications for
rehearing of AB1613 decision


modified advice letters are currently pending
before the Commission.


Overall, the CPUC has created an environment conducive to the
deployment of efficient CHP; we anticipate major activity over the next few
years.

70

Distributed Generation

71

Increased focus on wholesale distributed generation


Diversifying RPS procurement with smaller RPS projects could potentially avoid the need
for new transmission to meet RPS targets.


Potential benefits of the sector include:


Quick project development timelines


Avoidance of new transmission


Declining technology prices (i.e., solar PV)


Insurance for riskier, large
-
scale renewable projects


CPUC adopted the Renewable Auction Mechanism (RAM) (December, 2010)


RAM solicitations open to all technologies, 0
-

20 MW in size


Project viability screens, standard contract, and pay as bid


First auction will occur in 4
th

Quarter 2011


CPUC implementing changes to Renewable FIT statute (SB 32 and SB 2 (1x))


ALJ intends to issue a proposed decision by the end of the year


Distribution interconnection reform


Interconnection process and timing is a challenge to quick system
-
side DG development


CPUC staff re
-
launched the Rule 21 Working Group in April 2011 and has scheduled a
second workshop for August 2011 in order to update and reform the current Rule 21 tariff


72

Self
-
Generation Incentive Program


Self Generation Incentive Program has funded:


Over 1,270 on
-
line SGIP projects


Over 337 MW of rebated generating capacity


Funded large solar projects prior to 2007


Technologies


Currently Funds rebates for:


Wind


Fuel Cells (including Biogas
-
fueled Fuel Cells)


Storage coupled with wind & fuel cells


Considering Program Modifications to fund rebates for:


Stand alone Storage


Combined Heat and Power

73

Distributed Generation

Policy
Preference

State of California’s Energy Action Plan:

“Distributed Generation” is in State’s Preferred Loading Order

Benefits

Voltage Support, Reduce Transmission & Distribution, Local
Reliability, Procurement Porfolio Diversity, Demand Reduction,
Supply Renewables for Renewables Porfolio Standard

Interconnection

At Distribution Voltage, Not at Transmission Voltage

Size

Up to 20 MW

Use of
Generation



Self
-
Generation or Customer Generation = Offset Customer
Load



Wholesale Generation = Procurement (Sell to Utility or Other)

Ownership

Customer, utility, merchant, or 3
rd

Party lease or PPA provider

Technologies

Solar, Wind, Biomass, Biogas, Fuel Cell, Combined Heat &
Power (CHP)

74

DG Programs and Policies

Customer Generation or Self
-
Generation

Offset Customer’s Load

Wholesale Generation

Procurement (Sell to Utility or Other)

Size and
Incentiv
es

Supports Generation up to 5 MW in project size with
Incentives:



Solar = up to 1 MW eligible for incentives
through California Solar Initiative (CSI)



Wind and Fuel Cells = Up to 3 MW eligible for
incentives through Self
-
Generation incentive
Program

Projects of any size eligible for contract, but not for
incentives, rebates or subsidies. Price based on contract
path:



Renewable Portfolio Standard (RPS)
Competitive Solicitations



Feed
-
in Tariff



Qualifying Facility program



Utility solar programs

RPS?

Does
not

qualify for RPS



Customer Retains Renewable Energy

Credits (RECs)

Does qualify for RPS



RECs transfer to buyer as per contract

NEM?

Does qualify for Net Energy Metering (NEM) and

Net Surplus Compensation (not yet implemented)

Does
not

qualify for Net Energy Metering (NEM)

Export?

Projects sized to customer load,

not designed for export

Projects sized for export of generation, size larger than
customer onsite load if located at a customer

Demand
vs.
Supply?

Reduce Electricity Demand: Counts Towards Reduced
Demand Forecast like Energy Efficiency

Provide Electricity Supply: Counts Towards Procurement
and Resource Adequacy Obligations

Intercon
-
nection
?

Most exempt from interconnection charges: Rule 21
allows for “Simplified Interconnection”

Generation pays interconnection charges: May
interconnect under CPUC’s Rule 21 or FERC’s Self
Generation Interconnection Protocol (SGIP)

75

76

Key Highlights of California Solar Initiative (CSI)





CSI is 53% of the way towards its goals in less
than 5 years.


CSI installed 33% of goal and has another 23% of
goal pending installation.


CSI combined with other state solar programs
accounts for 90,000+ solar projects and 900+ MW
installed statewide.

CSI
Installed

CSI

Pending

CSI

Program
Total

Number of
Solar
Projects

53,225

11,161

64,386

Megawatts
(MW)

584

348

932

Incentives
(millions)


$1,090 M


$417 M


$1,507 M


Average system costs have declined by 20%+

since 2007


Started at $2.50/watt


now $0.35/watt.


CSI rebates now cover just 4% of the average system cost.



Solar installations continue to rise despite decline in incentives.


CSI now installs an average of 20 MW per month.


CSI installed a record of 147 MW in 2011.



CSI Research and Development (RD&D) Program focuses on integrating solar
projects into the grid and new solar business models.


CSI RD&D program has awarded 18 grants for $34 million in funding.


Projects work with 50 organizations and leverage $17 million in matching
funds.


Low Income Solar Programs target affordable housing units with solar.


1,400+ pending and installed projects, for 29 MW of new solar on affordable housing.



Source: www.CaliforniaSolarStatistics.ca.gov; August 3, 2011


77

The California Solar Initiative




The second largest solar incentive program in the

world with the goal to create 3,000 megawatts of

new, solar
-
produced electricity by 2017


moving

the state toward a cleaner energy future and helping

lower the cost of solar systems for consumers




Statewide budget of $3.3 billion over 10 years;

Incentives decline to zero by 2017



Provides rebates for solar based on performance



Rewards optimally
-
sited and maintained systems to ensure
performance, maximize ratepayer return on investment




Adopted a plan for allocating $50 million in grants for RD&D and an
unprecedented $108 million low
-
income incentive program
-

the first
statewide low
-
income solar program to be implemented at this scale.




Joint PUC/CEC website:
www.GoSolarCalifornia.ca.gov



Photo: Brian Peterson,

Sierra Nevada Brewing
Company, Chico. CSI Funded System, 1,258
kW, September 2007. Installer: Chico Electric

78

California Solar Initiative

CPUC Component: $2.2 Billion


Commercial
buildings


Schools


Government
Buildings


Industrial facilities


Agricultural facilities


Existing residential
buildings


79

California Solar Initiative

California Energy Commission
Component: $400 million

New residential

buildings only

Targets builders

and developers

80


California Solar Initiative

Publicly Owned Utilities $784 Million


All building types:



new and existing

81

Solar Initiative By Program Component

California Public

Utilities
Commission

California
Energy

Commission

Publicly
Owned

Utilities
(POU)

Total

Program

California Solar
Initiative

New Solar
Homes
Partnership

Various

Go Solar
California

Budget

$2,167 million

$400 million

$784 million

$3,351
million

Solar Goals (MW)

1,940 MW

360 MW

700 MW

3,000 MW

Scope

All solar systems
in

IOU areas
except


new homes

Solar systems
on

new homes in

IOU territories

All solar

systems in


POU areas

All of
California

82

CSI Provides Incentives Based on
Performance Characteristics of Solar
Installation

Expected Performance
-
Based Buydown (EPBB)

(Paid in dollars/Watt)

Performance
-
Based Incentive (PBI)

(Paid in cents/kWh)

One
-
time, lump sum
upfront

payment

60 monthly payments
over five years

Used mainly by residential and small business

Used by larger customers

Systems less than 30 kW

Mandatory for all systems 30 kW and greater

Systems less than 30kW can opt
-
in

Incentive paid per watt


Uses EPBB Calculator to determine System’s Design Factor


looks at location, orientation and shading

Incentive paid based on the actual production


Uses metering to record actual energy produced by the solar
system, measured in kilowatt
-
hours

83

Incentives Decline as Demand Grows:

CPUC Program Has a Goal of 1,750 MW

84

CSI Program Components


SASH Program


Provides higher rebate to low income customers in deed
-
restricted single
-
family residences


MASH Program


Provides higher rebate to multifamily affordable housing in deed
restricted multi
-
family residences


RD&D Program


Provides up to $50 million in a program for RD&D projects
related to CSI goals


CSI
-
Thermal Program


New in 2010: Provides up to $350 million for solar water heating
and solar heating/cooling technologies


Will accept applications in May 2010, replaces a San Diego pilot

85

CaliforniaSolarStatistics.ca.gov:

Provides Weekly Program Data

in customizable charts

86

Solar Market Progress: 570 MW

Solar Interconnections: Over 53,000
customers

0
2000
4000
6000
8000
10000
12000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Year
# of Interconnections by Year
87

CSI Through Q4 2009


25% of program’s
MW installed/pending


Over $900 million
paid/committed


Q4 MW installed
-

28.5


Q4 incentives paid
-
$42.4 million

CSI Projects through Program Year 2009
Installed Projects
Applications
24,835
MW
285.5 MW
Incentives $ MM
$647.4
Pending Projects
Applications
7,322
MW
163.5 MW
Incentives $ MM
$314.8
Total Installed and Pending Projects
Applications
32,157
MW
449.0 MW
Incentives $ MM
$962.2
CSI Projects through Program Year 2009
Installed Projects
Applications
24,835
MW
285.5 MW
Incentives $ MM
$647.4
Pending Projects
Applications
7,322
MW
163.5 MW
Incentives $ MM
$314.8
Total Installed and Pending Projects
Applications
32,157
MW
449.0 MW
Incentives $ MM
$962.2
Source: CaliforniaSolarStatistics.ca.gov, January 6, 2010

88

Steady Increase in Demand Volume

Reservation Request #
Reservation Request MW
Res
Non
-
Res
Total
Res
Non
-
Res
Total
2008
10,538
829
11,367
49
108
157
2009
14,294
937
15,231
71
138
209
Program
Total
1
31,689
2,644
34,333
154
429
583
1
Program Total includes CSI projects reservation requests during
the transitional year of 2007
Reservation Request #
Reservation Request MW
Res
Non
-
Res
Total
Res
Non
-
Res
Total
2008
10,538
829
11,367
49
108
157
2009
14,294
937
15,231
71
138
209
Program
Total
1
31,689
2,644
34,333
154
429
583
1
Program Total includes CSI projects reservation requests during
the transitional year of 2007
Source: CaliforniaSolarStatistics.ca.gov, January

89

Applications & Capacity

Received by Month

0
5
10
15
20
25
30
35
0
500
1000
1500
2000
2500
3000
3500
CEC AC MW

Reservation Requests

Res Reservation Requests
Non-Res Reservation Requests
CEC AC MW
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

90

Completed Projects

Completed #
Completed MW
Res
Non
-
Res
Total
Res
Non
-
Res
Total
2008
7,951
528
8,479
37
57
94
2009
11,319
673
11,992
54
97
151
Program
Total
2
21,669
1,272
22,941
101
157
258
2
Program Total includes CSI projects completed during the transit
ional year of 2007
Completed #
Completed MW
Res
Non
-
Res
Total
Res
Non
-
Res
Total
2008
7,951
528
8,479
37
57
94
2009
11,319
673
11,992
54
97
151
Program
Total
2
21,669
1,272
22,941
101
157
258
2
Program Total includes CSI projects completed during the transit
ional year of 2007
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

91

Completed Projects & Capacity by Month

0
5
10
15
20
25
30
35
0
500
1000
1500
2000
2500
3000
3500
CEC AC MW

Completed Projects

Res Completed Projects
Non-Res Completed Projects
Completed MW
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

92

CSI Progress Towards 1,750 MW Goal

69

30

96

70

15

13

38

9

65

19

28

6

433

228

353

163

77

40

0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SCE - Non-Residential
SCE - Residential
PG&E - Non-Residential
PG&E - Residential
CCSE - Non-Residential
CCSE - Residential
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

93

Average $/Watt Cost by System Size


$9.75


$9.67


$9.64


$9.49


$9.51


$9.52


$9.90


$9.77


$9.77


$9.34


$8.99


$10.06


$8.60


$9.06


$9.60


$9.30


$9.04


$8.87


$9.09


$9.29


$8.84


$8.35


$7.82


$7.70

$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
Average Cost per Watt

Average $/W (<10 kW Sys Size - CEC AC)
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

94

Average $/Watt Cost by Sys Size
-

<10 kW


$9.75


$9.67


$9.64


$9.49


$9.51


$9.52


$9.90


$9.77


$9.77


$9.34


$8.99


$10.06

0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
Applications Reserved and Installed

Average Cost per Watt

Apps Reserved (<10 kW - CEC AC)
Systems Installed (<10 kW - CEC AC )
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

95

Average $/Watt Cost by Sys Size
-

>10 kW


$8.60


$9.06


$9.60


$9.30


$9.04


$8.87


$9.09


$9.29


$8.84


$8.35


$7.82


$7.70

0
50
100
150
200
250
300
350
400
450
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
Applications Reserved and Installed

Average Cost per Watt

Apps Reserved (>10 kW - CEC AC)
Systems Installed (>10 kW - CEC AC)
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

96

Completed Projects $/Watt Costs

($9.57)

($8.91)

0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Percent of Completed Projects

less than or equal to 10 kW
greater than 10 kW
Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

97

California Solar Initiative Resources


The statewide consumer website

www.GoSolarCalifornia.ca.gov


The CSI Program Handbook includes eligibility
information and application information:
www.GoSolarCalifornia.ca.gov/documents/index.htm
l


The CSI Program Administrators developed a
tool to calculate the up
-
front EPBB incentive,
known as the EPBB Calculator:

www.csi
-
epbb.com


The CSI Program Administrators launched an
online application tool and reporting database,
known as Powerclerk:

csi.powerclerk.com


Up
-
to
-
date information about the program's
current incentive level, or "step" can be found
on the online CSI Trigger Tracker:

www.csi
-
trigger.com


Information about the CPUC regulatory
proceeding that deals with the CSI program at:


www.cpuc.ca.gov/static/energy/solar/_index.ht
m

Photo: Pritesh Sampat, La Habra Heights

Installer & Seller: AMECO, Long Beach, CA

California Solar Initiative Funded System 2007, 8.2 kW

98

Climate Change

99

California’s Leadership


“I say the debate is over. We know
the science. We see the threat. And
we know the time for action is now.”

Governor Schwarzenegger

World Environment Day, 2005

100

Climate Change Mitigation




The CPUC plays a key role in making California a




national and international leader on a number of




clean energy related initiatives and policies




designed to benefit consumers, the





environment, and the economy.





California Global Warming Solutions Act




requires emissions to be reduced to 1990 levels




by 2020, roughly a 25% decrease from business




as usual.


Require the state's investor
-
owned utilities to account for the financial risk associated
with greenhouse gas emissions in evaluating new long
-
term resource investments.


Adopted an interim Greenhouse Gas Emissions Performance Standard in an effort to
help mitigate global warming.

101

Governor’s Greenhouse Gas Targets




2010:

Emissions at 2000 levels


59 Million Tons Emission Reductions


11% Below Business as Usual



2020:

Emissions at 1990 Levels


145 Million Tons Emission Reductions


25% Below Business as Usual



2050:

Emissions 80% Below 1990 Levels


Kyoto goal for U.S. would be 7% below 1990 levels by 2012

102

California’s Greenhouse Gas Emissions

Industrial
Facilities (Over
40% Petroleum
Refineries), 23%
In-State
Electricity
Generation, 10%
Out-of-State
Generation, 10%
Other, 16%
Transportation,
41%
Source: California Energy Commission

103

California’s Electricity Related

Greenhouse Gas Emissions

Source: California Energy Commission Emissions Inventory

2004 Electricity Sales (MWh)
Imports
23%
In-State
Generat-
ion
77%
Emissions (MMT CO
2
e)
In-State
Generat-
ion
44%
Imports
56%
104

World’s Largest Greenhouse Gas Emitters


1.


USA…………..5,661…………….…..19

2.


China…………2,795………….……..02

3.


Russia………..1,437………….……..10

4.


Japan…………1,186………….……..09

5.


India…………..1,073……….………..01

6.


Germany……….787……….………..10

7.


UK………………569……….………..09

8.


Canada…………437……….………..13

9.


California……….430……….………..12

10.

Italy……………..429………….……...07

11.

South Korea…...428………….……...09

12. Mexico………….425………….……...04

2000 Emissions Per Capita

(Mt CO2)



Emissions

Sources: Courtesy of CalEPA

Research conducted by Oak Ridge National Lab & The Tellus Institute

105

Greenhouse Gas Emissions Per Capita

Source: California Energy Commission, Inventory of California Greenhouse Gas Emissions
and Sinks, 1990
-
1999, Nov. 2002

106

Emissions Performance Standard


Adopted February 2007


Mandated by Senate Bill 1368


Designed to prevent increased greenhouse gas
emissions by electricity generators


Ensures that any long
-
term baseload power
commitments to meet California’s energy needs are at
least as clean as a natural gas
-
fired plant using
combined cycle turbine technology

107

Eyes on California

Assembly Bill 32: Landmark Legislation


Creates framework for

statewide market
-
based

greenhouse gas regulation

(aka “cap and trade”)


Includes electric sector


Mandatory emissions verification and reporting

under California Air Resources Board


Distributes costs and benefits equitably


Governor’s Executive Order (S
-
20
-
06)
-

October 2006


Restates commitment to Climate Action Team structure (committee of
multiple regulatory agencies) and charges California Environmental
Protection Agency Secretary with Leadership


States intent to develop market
-
based solutions


Establishes Market Advisory Committee


States intent to establish trading compatibility with

Regional Greenhouse Gas Initiative, European Union, etc.

108

Policy Options for Assembly Bill 32


Command and Control Regulations


Existing programs like Renewable Portfolio
Standard and energy efficiency


Other agencies looking for opportunities as well


Carbon Tax


Explicit inclusion of cost of carbon

in all goods and services


Not a lot of political support for this option


Cap and Trade


Preference of Governor Schwarzenegger


109

Assembly Bill 32 Timetable

Item

Date

Signed into law

Sept. 2006

Early action measures identified

June 30, 2007

Convene environmental justice
advisory committee

July 1, 2007

Mandatory reporting regulations

Jan. 1, 2008

Emissions inventory finalized

Jan. 1, 2008

Adoption of scoping plan

Jan. 1, 2009

Greenhouse gas limits and reduction
measures adopted in regulation

Jan. 1, 2011

Greenhouse gas limits become
operative

Jan. 1, 2012

110

Load
-
Based Cap


What is it?


Capped entities are load
-
serving entities instead of generators


Still requires emissions reporting and tracking by source


Emissions are then attributed to load
-
serving entities (utilities and other
service providers) based on energy delivered to consumers


Can be linked with other source
-
based sectors and systems


Why choose load
-
based?


Captures imports (required by Assembly Bill 32)


Allows for portfolio choices to be made by load
-
serving entities to capture
economic tradeoffs among efficiency, renewables, and conventional supply
choices


Alternative


Market Advisory Committee has proposed a “first seller” approach, where the
compliance obligation would be placed on the first entity to sell the electricity
within state borders


PUC/California Energy Commission considering this newly identified
alternative

111

Overall Conclusion:

Greenhouse gas targets can be met

112

Western States Greenhouse

Gas Agreement


Memorandum of Understanding signed by California,
Oregon, Washington, Arizona, New Mexico, Utah,
and British Columbia


Commitment to establish greenhouse gas reduction
targets


Primarily led by environmental agencies (not energy)


Process just beginning

113

Transmission

114

Transmission

Infrastructure to

Support Renewable Power

CPUC Transmission Cases




Approved construction of the Antelope
-
Vincent,

Antelope
-
Pardee, and Antelope
-
Tehachapi

Transmission Projects. When completed, the

Tehachapi Renewable Transmission Project will

provide 4,500 MW of capacity from the wind
-
rich

Tehachapi area into the Los Angeles Basin.

Currently evaluating Segments 4
-
11. Projected online date: 2011




Approved San Diego Gas and Electric Company’s application for its Sunrise
Powerlink Transmission Project, a 500 kV line and several 230 kV lines that have the
capacity to import up to 1,000 MW of electricity




Green Path (joint venture of Los Angeles Department of Water and Power, Imperial
Irrigation District, and Citizens) accesses renewables and increases transfer capacity
into Los Angeles region; projected on
-
line date 2010; non
-
jurisdictional project


115

Natural Gas

CPUC works to assure adequate natural gas supplies and infrastructure,
rational gas transmission framework, reasonable gas utility rates, and
safe liquefied natural gas terminals




Adopted reliability standards, procedures for


firm delivery on local transmission, terms for

operational agreements between pipelines and

suppliers and utilities, and new gas quality specifications




PUC/Attorney General 2006 settlement with Sempra related to 2000
-
2001 gas curtailments will provide significant consumer benefits




Adopted a gas transmission framework for Southern California and will
focus on implementation in 2007




Examining issues relating to whether and how the largest California
utilities should enter into procurement contracts for natural gas from
Liquefied Natural Gas suppliers on the West Coast.

116

Ensuring Natural Gas Procurement

Costs Are Reasonable


Due to moderate natural gas prices (shown on next slide), core
bundled gas rates in 2010 remained low relative to previous years.


Neither the CPUC nor the FERC regulates the price of natural gas.


The CPUC oversees utility procurement of natural gas supplies by:


adopting gas cost incentive mechanisms,


adopting an expedited process under which utilities obtain interstate
pipeline capacity,


ensuring that core customers have adequate storage capacity.


In January 2010, the CPUC ordered the utilities to be at risk for
some of their gas hedging costs, which should require the utilities’
price risk management to be more efficient.


In late 2008, the CPUC approved long
-
term interstate transportation
contracts for PG&E on the proposed Ruby Pipeline. A major new
interstate pipeline delivering Rockies supplies to California, Ruby
Pipeline went into operation in July 2011.


117

Gas Daily Monthly Spot Gas Prices
0
2
4
6
8
10
12
14
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
$/MMBtu
PG&E Citygate
SoCal Gas Border
Henry Hub
SoCalGas Citygate
118

Overview of San Bruno Pipeline Failu
re



On Sept. 9, 2010, a PG&E pipeline (132)
exploded in San Bruno



Line 132 Statistics:



30
-
inches in diameter



.375” wall thickness



Steel



Operating Pressure: 386 psig at time of rupture
(MAOP: 400 psig)



Runs from Milpitas to San Francisco (>50 miles)

28
-
foot
-
long ruptured section of pipeline at laboratory
facilities at the NTSB Training Center, Ashburn, VA

119

Impact of Pipeline Failure



8 Deaths



65 Injuries



37 Homes destroyed or
demolished



48 Homes damaged


View of ruptured section of pipeline with NTSB
investigator cleaning a fracture surface

120

Map of Line 132

121

The Investigation

Areas of Inquiry:



PG&E recordkeeping



Setting maximum pressures



Corrosion



Excavation damage



Maintenance Records



Pipeline inspection technology



Internal



External



Automatic valves and remote controlled valves



Rate Regulation for Infrastructure Maintenance,


Improvement, and Replacement

CPUC Inspector on
-
site in San Bruno

122

Regulatory Response


National Transportation Safety
Board



U.S. Department of Transportation:


Pipeline and Hazardous Materials
Safety Administration (PHMSA)



California Public Utilities
Commission




123


Ruptured segment installed in 1956


Metallurgy report indicates longitudinal weld failure


No evidence of corrosion or dig
-
in damage


PG&E records appeared to show pipe was seamless


Slight pressure spike (from 375 to 386 psig) just prior to
rupture, due to equipment failure upstream at Milpitas


“Urgent Safety Recommendation” that PG&E diligently
search for as
-
built drawings and other pipeline records


Hearing on San Bruno accident conducted March 1
-
3,
2011; final NTSB investigation report anticipated

August 2011


NTSB Findings and

Recommendations to Date

124


The Federal Department of Transportation’s PHMSA is
responsible for natural gas pipeline safety regulations
codified at 49 C.F.R.


Pipeline Safety Forum hosted by DOT Secretary Ray
LaHood, Washington, D.C., April 18, 2011


PHMSA relies on state agencies (such as CPUC) as
partners to conduct inspections and enforce federal
pipeline safety rules

Pipeline and Hazardous Materials Safety
Administration (PHMSA) Response

125


Immediate pressure reductions on specified PG&E pipelines


Participation in NTSB’s ongoing “root cause” investigation


Appointment of Independent Review Panel


Enforcement against PG&E, alleging poor record
-
keeping


Calibrating Maximum Allowable Operating Pressure (MAOP)


Rulemaking for new, statewide pipeline safety rules


Educational Symposiums on Hydrostatic Testing and In
-
Line
Inspection Tools


Ordered all California natural gas transmission operators to develop
and file for CPUC consideration a Natural Gas Transmission
Pipeline Comprehensive Pressure Testing Implementation Plan to
achieve the goal of orderly and cost effectively replacing or testing
all natural gas transmission pipeline that have not been pressure
tested.


Creation of a new Risk Assessment Unit to research, develop, and
propose tools to improve pipeline safety and oversight in the state,
and is also augmenting its pipeline inspector team by five.

CPUC Response
-

Overview

126

Next Steps



NTSB Final Report



Possible future additional CPUC enforcement action
against PG&E, depending on what NTSB finds



Continuing consideration of rule changes for all gas pipeline
operators in California



Continuing consideration of penalties against PG&E for poor
recordkeeping

127

Ensuring the Lights Stay on


Resource Adequacy
and Procurement


The CPUC reviews and approves

plans for the utilities to purchase

energy and ensures that the utilities

maintain a set amount of capacity

above what they estimate they will

need to serve their customers

(called a reserve margin). The

current reserve margin is 15
-
17%


The three largest utilities (PG&E,

Edison, and SDG&E) spend about $11 billion annually on
procurement


The CPUC requires the utilities to implement a long
-
term energy
planning process.

128

Energy


New Technologies and Smart Grid

129

California Emerging Technology Program



Accelerate introduction of energy efficiency
technologies into the market



Create a culture for innovation



Shepherd promising technologies

into systems and products




Players Include: California Energy Commission,
Utilities, Public Interest Energy Research, Emerging
Technologies Coordinating Council






130

California Clean Energy Fund





Non
-
profit




Invests in clean
-
tech ventures




Profits reinvested




Stimulates innovation




Helps bring green energy investments to market




More information:
www.calcef.org


131

Greening the Valley

Region

2000 Population

2015
Population

% Change

Bay Area

7,199,291

8,308,080

15.4%

Central Coast

1,874,448

2,370,148

26.4%

Central Valley/Sierra

1,149,033

1,591,237

38.5%

Inland Empire

3,298,337

4,859,820

47.3%

Los Angeles

8,838,861

10,978,502

11.6%

North Valley/Sierra

2,085,706

2,736,248

31.2%

Northern California

904,963

1,149,853

27.1%

Orange County

2,833,190

3,277,959

15.7%

San Diego

3,097,190

3,900,304

25.9%

South Valley/Sierra

2,372,133

3,198,748

34.9%

Total

34,653,395

42,370,899

22.3%

Projected Population Growth by Region: 2000
-
15

Source: California Department of Finance

132

Greening the Valley



Challenges & Inspiration


Challenges: Tremendous Growth and Energy Demand


2 million people in the next 15 to 20 years


Over 1 million new homes, offices, schools industrial
buildings


Energy needs increase, greenhouse gas emissions
increase


Inspiration: State of California


Sets aggressive energy savings goals with a consistently
growing population


Advances renewable generation and supports solar


Prioritize technological development and foster culture of
innovation


133

What is Smart Grid


A Smart Grid is a constantly evolving energy network that operates efficiently and
seamlessly integrates and adjusts to dynamic operational, supply and demand conditions.
A Smart Grid will enable utilities to leverage technology and information to provide reliable
and timely service to customers.



The Smart Grid employs:


Advanced information technology and ubiquitous communications infrastructure;


Distributed sensors


Automated control technologies and methodologies


Real
-
time ratings


Renewables and other distributed resources


Informed decisions and optimization strategies


Customer feedback and participation


134

Why Smart Grid?


Growth of renewables and distributed generation


Dynamics that could have a huge effect on a utility's ability
to deliver reliable power at a reasonable price


Distribution systems are inefficient




Huge amounts of energy are wasted in line losses and an
inefficient system (5%)


Aging infrastructure that will impact the reliability of power as
well as inevitable rising costs


Generation shortfalls as demand growth well exceeds new
generation


The need for infrastructure to support dispatchable demand
response

135

Why Smart Grid (continued)