Informational Hearing

Electricity Outlook:
Summer of 2005 and Beyond

State Capitol, John L. Burton Hearing Room (4203)
February 22, 2005
9:30 a.m.

I. Opening Comments

• Senator Martha M. Escutia, Chairwoman
  Senate Energy, Utilities & Communications Committee

II. Overview of California’s Electric Grid

• Bob Therkelsen, Executive Director (PPT)
  California Energy Commission (CEC)

III. The Governor’s Strategy

• Joe Desmond
  Deputy Secretary of Energy
  Resources Agency

IV. Publicly-Owned Utility Control Areas

• Henry Martinez, Acting General Manager (PPT)
  Los Angeles Department of Water and Power
   
• Glenn Steiger, Manager, Energy Department
  Imperial Irrigation District Energy (PPT)
   
• Jim Shetler, Assistant General Manager
  Sacramento Municipal Utility District (PPT)

V. California Independent System Operator (CAISO) Control Area

• Bob Therkelsen, Executive Director
  CEC
   
• Jim Detmers, Vice President, Grid Operations (PPT)
  CAISO
   
• Steve Larson, Executive Director (PPT)
  California Public Utilities Commission

VI. Status of Supply and Demand for Investor-Owned Utilities in CAISO Control Area

• Pedro Pizarro, Vice President of Power Procurement (PDF)
  Southern California Edison
   
• Robert Anderson (PPT)
  Director of Resource Planning (PPT)
  San Diego Gas & Electric (PPT)
   
• William Tom, Manager, Portfolio Optimization Department
  Pacific Gas & Electric

VII. Status of Supply and Demand for Direct Access Providers in CAISO Control Area

• Mona Tierney, Director of Government Affairs (PPT)
  Constellation New Energy
   
• Carolyn McIntyre, Regional Vice President (PPT)
  Sempra Energy Solutions

Senate Energy, Utilities and Communications Committee

Informational Hearing: Electricity Outlook: Summer 2005 and Beyond

February 22, 2005 – 9:30 a.m.
State Capitol – Room 4203

HEARING QUESTIONS FOR WITNESSES

During the Fall and Winter, there has been widespread speculation about the possibility of blackouts during Summer 2005. This informational hearing seeks to explore the procedures for forecasting demand and supply balances, and the responsibilities of state agencies and retail providers to assure safe and reliable electrical service. The hearing will also touch on issues of availability of electricity supply along with prices and costs.

The California Energy Commission (CEC) will provide a background and overview of the structure and governance of the statewide grid, along with a statewide forecast of loads (demand) and resources (supply). The CEC will briefly describe its process for arriving at a statewide forecast, which is used by other entities to plan and acquire electricity to serve the needs of Californians.

For the CEC:

• Provide the latest overall load and resource forecasts for the entire state, Northern California, and Southern California.
• Describe your demand forecasting methodology.

There are four control areas – centralized administrative units – within California, each responsible for maintaining the reliability of a geographic section of the grid in real time. Three of these are public power entities – the Los Angeles Department of Water and Power (LADWP); the Sacramento Municipal Utility District (SMUD); and the Imperial Irrigation District (IID). Each of these serves retail customers. They are vertically integrated, combining distribution to end users with transmission and supply under a single scheme of administrative and operational control.

For each of the public power control areas:

• Describe the loads in your control area for 2005 and 2006.
• Describe the resources in your control area for 2005 and 2006.
• Describe the procedures you use to balance loads and resources.
• Describe the procedures you use to plan and acquire new resources.

The fourth control area – the California Independent System Operator (CAISO) – is a private non-profit corporation vested with operational control of transmission facilities owned by the state’s large investor-owned utilities (IOUs). These are Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E). The CAISO is responsible, along with the IOUs and electric service providers (ESPs) that serve “direct access” retail customers (DA), for maintaining reliable service to about 75 % of Californians. The CAISO coordinates the resources made available by the IOUs and the ESPs.

The CAISO grid is subdivided into two primary zones (with sub-zones adding to the complexity). Northern California, which roughly equates to the PG&E retail service area, is “NP-15.” Southern California, which roughly equates to the SCE and SDG&E retail service areas, but also including some public power retail areas, is “SP-15.”

For the CAISO:

• Describe the loads in your control area (NP-15 and SP-15) for 2005 and 2006, including DA.
• Describe the resources in your control area (NP-15 and SP-15) for 2005 and 2006, including DA.
• Describe the procedures used to balance loads and resources in your control area.
• Describe the procedures used to plan and acquire new resources in your control area.

For each of the IOUs and ESPs:

• Describe the loads in your retail service area (customer base).
• Describe the resources to serve your retail customers.
• Describe the procedures you use to balance loads and resources.
• Describe the procedures you use to plan and acquire new resources.

For the CEC and the CAISO:

• Provide plant-specific details regarding all forecasted additions, retirements, and outages (dates, owner, location, reason).
• Describe any foreseeable available resources not included in the forecasts (e.g. interruptible load, hydro imports).
• Describe the significant transmission constraints in the system and any resulting limitations on delivery of contracted-for power.
• Describe any uncertainties with gas availability, emissions credits, or regulatory standards (e.g. FERC must offer, CPUC plant inspection) which may influence electric service reliability and cost.