Informational Hearing
Long-Term Electricity Outlook

State Capitol, Room 112
March 13, 2007
9:30 a.m.

I. Opening Comments

• Senator Christine Kehoe, Chairwoman
  Senate Energy, Utilities & Communications Committee

II. Witnesses

• John Geesman, Commissioner
  California Energy Commission
• Sean Gallagher, Director, Energy Division
  California Public Utilities Commission
• Robert Kinosian, Policy Advisor
  Division of Ratepayer Advocates
• Gary Stern, Director of Market Strategy and Resource Planning
  Southern California Edison
• Roy Kuga, Vice President of Energy Supply
  Pacific Gas and Electric
• Mike Niggli, Chief Operating Officer
  Sempra Energy Utilities
• Eric Tharp, Director of Generation
  Los Angeles Department of Water and Power
• Jim Tracy, Chief Financial Officer
  Sacramento Municipal Utility District
• Mary Stegall, Vice Mayor
  City of Redding
• Mary Lynch, Vice President, Regulatory and Legislative Affairs
  Constellation Energy
• Jane Williams, Executive Director
  California Communities Against Toxics
• Bill Marcus, Consultant
  The Utility Reform Network (TURN)
• Bill Booth, Regulatory Attorney
  California Large Energy Consumers Association

Senate Energy, Utilities and Communications Committee
March 13, 2007 Hearing
Long-Term Electricity Outlook

Background

Reliable electric service has long been considered an important indicator of a developed society and a fundamental ingredient of an advanced economy. In California, reliable electric service is expected, if not taken for granted. In fact, state policies and utility practices have taken the extra step of adding elements of social responsibility into electric service.

For example, every electric utility has programs to assist low-income customers with rate discounts and efficiency measures to reduce their bills. Utility employment and contracting practices promote diversity. Utilities have been required to invest in alternative energy and energy efficiency for decades, which has helped make California a leader in these fields. Most recently, utilities are expected to drive reductions in greenhouse gas emissions to help combat global climate change. These initiatives may contribute to California’s high electricity rates, but they are also the reason that the state has a relatively clean energy supply and per capita electricity consumption is among the lowest in the nation.

The evolution and restructuring of California’s electric industry has complicated not only the provision of basic electric service, but also the execution of many of our state policies (see attached Background on Electricity Policy paper for more). The result is an elaborate, if not unwieldy, electric system where responsibility is divided among multiple federal, state and local agencies, public and private utilities, grid operators, generation and transmission owners, and retail service providers.

As the state presses forward with an ambitious agenda and high expectations for electric service, many questions arise about what lies ahead.

 

Questions for Witnesses

For the CEC:

1. What are the forecasted electric energy needs for the state over the next 10 years?
    
2. How reliable is this forecast? What are the major variables? Please compare prior forecasts to actual results.
    
3. What new resources are required to meet forecasted energy needs? For example, how many power plants must be added? How much of an increase in efficiency is required?
    
4. What amounts of renewable resource additions are needed to meet 20% and 33% of forecasted energy sales in 2020?
    
5. What amounts of carbon-free resource additions or efficiency are needed to reduce utility greenhouse gas emissions 25% by 2020?
   
   For the CEC, CPUC and DRA:
    
6. How does the state determine whether individual proposed resource additions are consistent with broader objectives including affordable costs, secure and reliable fuel supply, renewable energy development, and greenhouse gas emission reductions?
    
7. How does the state evaluate and compare resource alternatives, such as conventional generation, renewable generation, distributed generation, efficiency and transmission, to ensure the best solutions are chosen?
    
8. What are the agencies roles in developing and carrying out utility resource plans? How does the state ensure that preferred resource additions are carried out to completion?
   
   For each utility:
    
9. What are your forecasted electric energy needs? How do you use the CEC forecast? Does your forecast agree with the CEC forecast?
    
10. What is your plan for meeting your needs? Which key projects have been identified?
     
11. How does the utility determine whether individual proposed resource additions are consistent with broader objectives including affordable costs, secure and reliable fuel supply, renewable energy development, and greenhouse gas emission reductions?
     
12. How does the utility evaluate and compare resource alternatives, such as conventional generation, renewable generation, distributed generation, efficiency and transmission, to ensure the best solutions are chosen?
     
13. How are local community plans considered and reflected in utility plans, and vice-versa?
     
14. Have the state’s greenhouse gas policies altered utility plans yet? How do you expect these policies to change your plans over the next 10 years?
     
15. How does affordability figure in to your plans? Do you have any specific objectives?
    
    For other witnesses:
     
16. Please comment on the questions above.