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Energy Action Plan “Report Card” and the AB32 “Umbrella”
CFEE ROUNDTABLE CONFERENCE ON ENERGY
Julie Fitch
California Public Utilities Commission
Director of Strategic Planning
October 9, 2007
3
Energy Action Plan genesis
• First EAP, May 2003, important because:– Brought key energy agencies together to work on
common energy policy goals– Defined concept of “loading order”
• Second EAP, October 2005, important because:– Added sections for climate change, transportation,
and research and developments– Continued EAP tradition of joint policymaking
4
Energy Action Plan 2007 Report Card
Action Area GradeEnergy Efficiency A
Demand Response D
Renewables B
Electricity Adequacy, Reliability, and Infrastructure C
Electricity Market Structure D
Natural Gas Supply, Demand and Infrastructure C
Transportation Fuels Supply, Demand, and Infrastruct. C
Research, Development, and Demonstration Incomplete
Climate Change Incomplete
Overall Report Card C
5
Energy EfficiencySuccesses• Building codes and appliance standards • Strong investor-owned utility programs (projected to
save about one large power plant annually)• Decoupling• Evaluation framework• Opportunity for shareholder rewards (for investor-
owned utilities)Ongoing work• Strategic planning framework• Inclusion of publicly-owned utilities• Comprehensive demand-side strategies• Building code enforcement
6
Demand ResponseSuccesses• Advanced metering infrastructure
– PG&E: installing ~250,000 new meters this year (out of 10 million total);
– SDG&E begins next year; – SCE application under review at CPUC
• 2500 MW of voluntary program enrollment for summer
Ongoing work• Dynamic pricing tariffs (tariffs that vary by time of day
or cost of procuring energy). – Examples: Time of Use, Critical Peak, Real-time Pricing
7
Renewables: Successes
IOU Actual and Forecasted RPS Generation
0
10,000
20,000
30,000
40,000
50,000
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
GW
h
Pre-2002 Contracts 2002 Contracts 2003 Contracts 2004 Contracts
2005 Contracts 2006 Contracts 2007 Contracts Pending Approval
Short-listed Bids Expired Contracts RPS Target
• Solar Initiative applications: 160 MW in first 8 mos. of 2007; current installed capacity in state: ~200 MW
8
Renewables: Ongoing work
Renewables Portfolio Standard• Tradeable renewable energy certificates• Relationship to climate change/AB32• Desirability/necessity of 33% mandate• Inclusion of publicly-owned utilitiesSolar Initiative• Energy efficiency requirements as condition
for solar rebate• Solar water heating?
9
Electricity Adequacy, Reliability, and Infrastructure
Successes• Resource adequacy requirements in place and
working for investor-owned utilities – reserve margin of 15-17%
• New generation coming online• New transmission being built (1600 MW operational,
2100 MW approved, up to 15,000 MW in planning)Ongoing work• Capacity market design• Resource adequacy requirements for publicly-owned
utilities• Combined heat and power/distributed generation• Clean/advanced coal?
10
Electricity Market Structure
Successes• Investor-owned utility procurement role
restored• New utility-owned generationOngoing work• CAISO Market Redesign and Technology
Update (slated for March 2008)• Independent generation (hybrid wholesale
market)?• Retail competition (direct access, retail
choice, core/non-core electricity structure)?
11
Natural Gas Supply, Demand, and Infrastructure
Successes• Natural gas efficiency levels increased• Natural gas quality rules established
Ongoing work• Solar water heating• New gas storage capacity• New pipeline capacity
12
Transportation Fuels Supply, Demand, and Infrastructure
Successes• Increasing focus on alternative fuels
Ongoing work• Continued focus on implementing AB1493
(Pavley) motor vehicle standards• Low Carbon Fuel Standard• Infrastructure for electric or natural gas-fueled
vehicles
13
Research, Development, and Demonstration
Successes• Utility efficiency programs focus on emerging
technologies
Ongoing work• Dry-cooling; once-thru cooling for electricity
generation• Clean/advanced coal, including carbon
capture and storage• Biogas
14
Climate Change
Successes• Implementing existing energy efficiency and
renewables strategies• Incorporating greenhouse gas impacts into
environmental review (CEQA) of projects• Encouraging participation in Climate Action
Registry
Ongoing work• See next few slides…
15
And along came AB32…
• Umbrella over many existing activities in Energy Action Plan framework
• Added impetus to ongoing energy work
16
AB32 Energy Activities
• Joint proceeding (CPUC and Energy Commission) to make recommendations to Air Resources Board for energy sectors (electricity and natural gas)– Agencies will adopt decisions jointly produced
• Comprehensive in scope– Statewide examination– Includes all retail providers: investor-owned
utilities, publicly-owned utilities, electric service providers and community choice aggregators
• Utility sectors will be integrated into ARB overall “scoping plan” structure for California
17
Major Outcomes Expected
Consideration of regulatory and market options• Ongoing role of regulatory measures and
programs to reach AB32 cap• Whether and how to design a cap and trade
system for California• Which entities should be regulated? (utilities,
generators, consumers, etc.)Level of potential reductions• How much mitigation can energy sectors
deliver toward 2020 goal?
18
Major Theme: Everything Relates to Climate Change
Crossing sectoral boundaries• Energy use for water supply and treatment• Electrification of transportation (cars, truck
stops, ports)• Landfill gas capture for electricity production
Crossing traditional regulatory boundaries• Common set of rules to apply to anyone who
supplies electricity and natural gas to retail customers in California