TESTIMONY OF JAMES H. POPE
NORTHERN CALIFORNIA POWER AGENCY

SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE

August 28, 2007

I. Introduction

NCPA is a joint action agency that manages the wholesale power supply needs for a public power pool and represents the interests of 17 public power systems throughout northern and central California from the Sierras to the San Francisco Bay Area.

NCPA has a long history of environmental stewardship – as evidenced by our 96% carbon-free owned generation portfolio – and we look forward to continuing our ongoing partnership with state policymakers in the implementation of the goals of AB 32 to ensure meaningful reductions in our state’s greenhouse gas emissions. As public power systems, overseen by locally elected officials, we are very directly connected to the communities and districts we serve, and reductions in greenhouse gas emissions are strong priorities locally as well as statewide. Toward that end, we are always looking for innovative ways to be out in front with regard to environmental technologies and investment, and have a long record demonstrating that commitment and those results.

II. What is Your Plan for Meeting Electricity Sector GHG reductions?

With regard to AB 32 implementation and our interest in ensuring a reduction in greenhouse gas emissions, we are actively pursuing renewable energy opportunities, and employing innovative techniques to extend the life of our existing geothermal resources. We have led statewide efforts to create energy efficiency goals, and have established a new Member Services program to provide leadership and support our member systems’ efforts in this area. We have developed collaborative programs through our joint action agency construct to ensure the sharing of best practices among our member cities and districts – and have also committed to verifying program performance through independent evaluation which is currently underway

As well, we are actively participating in all proceedings surrounding AB 32, and partnering with state policymakers to ensure successful implementation. Working closely with policymakers and agency staff as that process goes forward, we are advocating careful consideration of consumer interests and needs as climate policies are formulated.

III. Energy Efficiency

NCPA members are fully committed to achieving all cost effective, reliable, and feasible energy efficiency, consistent with Senate Bill 1037 and the state’s loading order. This requires flexibility and a solid understanding of customer needs at the local level. For example, Redding Electric’s highly-successful Earth Advantage Program is a locally-endorsed green building program for residential construction that promotes the construction of highly-efficient and sustainable homes. The program provides incentives for builders to recycle building waste and develop site plans that endorse and encourage the efficient use of water and other natural resources. By comparison, Alameda, located in an area with no air conditioning load, turns its program attention to its local community schools, focusing its funds on reducing energy consumption in public facilities.

In terms of meeting future energy needs, NCPA is working with its members as well as CMUA and SCPPA to implement energy efficiency targets, consistent with AB 2021 directives. As these targets are being adopted by local governing boards during the coming weeks, I am pleased to report that members are already accelerating program implementation, with many utilities expected to more than double their historical energy savings.

IV. Renewable Portfolio Standard

As noted earlier, NCPA’s owned generation is 96% carbon emission free as a result of our longstanding commitment to responsible energy sources. As public power systems, the interest of our member communities in clean generation resources has spurred us to be a leader in the renewable energy arena. Our geothermal facility at the Geysers as well as our hydroelectric facilities in Calaveras County reflect that commitment to clean and renewable generation. In fact, our hydroelectric facility, built in 1985, has been a higher-cost resource to our members, yet it has a high value to our communities as a source of clean generation.

Looking forward, we have many interesting projects underway in this area. We are currently looking to install a solar array at our Geysers geothermal facility to help power the pumping of treated effluent water from Lake County into our steam reservoirs to help ensure the health of nearby Clear Lake while extending the life of our geothermal steamfield. As well, we have established a new Green Pool program through which NCPA members can join together to invest in sizeable renewable generation such as solar and wind energy facilities.

In addition to our joint efforts, our individual member communities continue to lead the way in this area as one of the benefits of public power is the ability to develop successful programs tailored specifically to local characteristics and consumer interests. A good example is the City of Roseville’s “Green Roseville” program providing a renewable energy alternative to its consumers that is 98% powered by California-based wind energy. This program has been Green-e certified for meeting strict standards for environmental protection. Roseville is also soon to open its new state-of-the-art Utility Exploration Center which is designed to provide interactive learning experiences regarding the preservation of our environment through energy efficiency and other measures. As well, the Turlock Irrigation district is collaborating with the City of Turlock to install a 1.2 MW fuel cell to convert methane gas from the city’s Water Quality Control Facility into electricity. The City of Palo Alto’s City Council has made climate protection one of its top priorities, and Palo Alto’s electric utility boasts the #1 voluntary green energy program in the country with over 16% of customers receiving 100% green energy from California wind and solar facilities. Plumas-Sierra Rural Electric Cooperative received the largest Clean Renewable Energy Bond allocation in the first distribution of this federal program, and is making significant investments in a new 22 megawatt Black Mountain Wind Energy Project.

Both collectively and individually, NCPA’s members are leading the way on new renewable energy investment – and the differences in these programs demonstrate the value of programs tailored to local attributes.

V. Regulation Or Is the Market the “End All Be All”?

Any emission reduction strategy envisioned by AB32 will clearly require a combination of regulatory and market-based approaches. NCPA is pleased that the California Air Resources Board has publicly stated its intent to give full consideration to all available emission reduction tools – as it develops the state’s official greenhouse gas reduction plan between now and the end of next year.

It is critical that the final strategy adopted by the state fully consider the wide range of public debate being undertaken at the CPUC, the CEC, and the Air Resources Board. Toward that end, NCPA fully intends to be engaged in all aspects of the regulatory debate. As these strategies are developed, it is important that the implementation process guard against the imposition of unneeded complexity and potential for market abuses. Additionally, it is essential that the needs and interests of our state’s electric consumers are carefully considered, and reflected in any final policy. Moreover, it is important that early voluntary actions by utilities should be recognized.

VI. Conclusion

Thank you for the opportunity to share NCPA’s views today. NCPA looks forward to continuing our state and local partnership on behalf of the vitally important environmental objectives of AB 32.