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California Public Utilities Commission. Paul Clanon Executive Director August 2011. Presentation Overview. About the CPUC Energy Climate Change Mitigation Communications Water Rail Safety Passenger Transportation. CPUC Mission. - PowerPoint PPT Presentation
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California Public Utilities Commission Paul Clanon Executive Director August 2011 1
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Page 1: California Public Utilities Commission

California Public Utilities Commission

Paul ClanonExecutive Director

August 2011

1

Page 2: California Public Utilities Commission

Presentation Overview• About the CPUC • Energy

– Climate Change Mitigation• Communications• Water• Rail Safety • Passenger Transportation

2

Page 3: California Public Utilities Commission

CPUC MissionThe 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 toenvironmental 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

Page 4: California Public Utilities Commission

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. PeeveyPresident

Catherine J.K.Sandoval

Mike FlorioTimothy Alan Simon Mark Ferron

4

Page 5: California Public Utilities Commission

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

Page 6: California Public Utilities Commission

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

Page 7: California Public Utilities Commission

CPUC Proposed Budget FY 2010-11($ millions)

FY 2009-10 FY 2010-11Increase 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

 

$151Gas Consumption Surcharge $1,241

       

Total CPUC Budget $1,248 $1,442 $194

7

Page 8: California Public Utilities Commission

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

Page 9: California Public Utilities Commission

Aggressive Recruiting Leadsto 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

AsianAfrican AmericanFilipinoHispanicPacific IslanderNative AmericanOtherWhite

9

Page 10: California Public Utilities Commission

Customer Care and Protection

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

Page 11: California Public Utilities Commission

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 Bar11

Page 12: California Public Utilities Commission

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

Page 13: California Public Utilities Commission

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

Page 14: California Public Utilities Commission

CPUC Buys Products and Services Fiscal Year 2008-2009

Statewide Contracting & Procurement Goals:

• Small Business Goal: 25 percent

Achieved: 3.35%

• Disabled Veteran Business EnterprisesGoal: 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

Page 15: California Public Utilities Commission

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

Page 16: California Public Utilities Commission

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

Page 17: California Public Utilities Commission

Energy

17

Page 18: California Public Utilities Commission

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

Page 19: California Public Utilities Commission

CPUC’s Role and ResponsibilitiesKey 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

Page 20: California Public Utilities Commission

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

Page 21: California Public Utilities Commission

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

Page 22: California Public Utilities Commission

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

Page 23: California Public Utilities Commission

Serving 30 million consumers in PG&E, SCE, and SDG&E and many municipal utilitiesHeat storm in 2006 with peak load of 50,270 MW on July 24,200643,000 MW of available generation capacity at peak after derates for hydro, wind and outages9,260 MW net imports on peak hour

23

Page 24: California Public Utilities Commission

Overview of the Western InterconnectionCalifornia 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

Page 25: California Public Utilities Commission

California ElectricityRegulatory 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

Page 26: California Public Utilities Commission

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

Page 27: California Public Utilities Commission

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

Page 28: California Public Utilities Commission

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

Clean and EfficientFossil-Fired Energy

Efficiency andDemand Response

Renewable Energy

28

Page 29: California Public Utilities Commission

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

Page 30: California Public Utilities Commission

• Eliminates need for 10 new power plants

• Eliminates 9 million tons of CO2 emissions annually - equal to 1.8 million cars off the road

• $10 billion in net savings to consumers

California’s Aggressive Energy Efficiency Program2004-2013

30

Page 31: California Public Utilities Commission

Energy Efficiency Programs2010-2012 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

Page 32: California Public Utilities Commission

Energy Efficiency Budgets 2010-2012

Residential23%

Commercial29%

Industrial13%

Agriculture4%

New Construction4%

Institutional - UC/CSU, DGS, Etc4%

Local Gov't Partnerships6%

HVAC4%

Evaluation, Meas. & Verification

4%

OTHER9%

ResidentialCommercialIndustrialAgricultureNew ConstructionInstitutional - UC/CSU, DGS, EtcLocal Gov't PartnershipsHVACEvaluation, Meas. & VerificationOTHER

Investor-Owned Utility 2010-12 Energy Efficiency Budget by Program Areas

32

Page 33: California Public Utilities Commission

Energy Efficiency ProgramsBoost 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

GW

h/ye

ar

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

Page 34: California Public Utilities Commission

-

10,000

20,000

30,000

40,000

50,000

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005Year

GD

P pe

r Ca

pita

0

3,000

6,000

9,000

12,000

15,000

kWh

per

Capi

ta

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: 1975-200534

Page 35: California Public Utilities Commission

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

Page 36: California Public Utilities Commission

The California Long Term

Energy Efficiency

Strategic Plan

Making Energy Efficiency a Way of Life in California36

Page 37: California Public Utilities Commission

Next Generation of Energy EfficiencyOn 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

Page 38: California Public Utilities Commission

• 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

Page 39: California Public Utilities Commission

• 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

Page 40: California Public Utilities Commission

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 MMTherms3 million tons of CO2e avoided

• Equivalent to 3 large power plants

40

Page 41: California Public Utilities Commission

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 CO2e) 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 CO2e avoided per GWh and 5,300 CO2e avoided per MMth.

Goals and Budgets for the 2010-2012 Program Cycle

41

Page 42: California Public Utilities Commission

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

Page 43: California Public Utilities Commission

2008 DSM Clean Energy Revenue Requirements – All IOUs

PROGRAM 2008 IOURevenue

Req.*

% of Total Revenue

Req.

Per Capita**

Energy Efficiency $ 758 2.08%$

27.89Low Income Energy Efficiency $ 157 0.43% $ 5.81

Demand Response $ 141 0.50%$ 5.21

CA Solar Initiative $ 323 1.20%$

11.88Self 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

Page 44: California Public Utilities Commission

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

costs44

Page 45: California Public Utilities Commission

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

Page 46: California Public Utilities Commission

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

Page 47: California Public Utilities Commission

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

Page 48: California Public Utilities Commission

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

Page 49: California Public Utilities Commission

Demand Response Shaves the PeakSept '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

1,00

5

1,25

6

1,50

7

1,75

8

2,00

9

2,26

0

2,51

1

2,76

2

3,01

3

3,26

4

3,51

5

3,76

6

4,01

7

4,26

8

4,51

9

4,77

0

5,02

1

5,27

2

5,52

3

5,77

4

6,02

5

6,27

6

6,52

7

6,77

8

7,02

9

7,28

0

7,53

1

7,78

2

8,03

3

8,28

4

8,53

5

Hour

Hou

rly A

ve. D

eman

d

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

Page 50: California Public Utilities Commission

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 resourcesat lowest cost.

50

Page 51: California Public Utilities Commission

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

Page 52: California Public Utilities Commission

Renewable Portfolio Standard (RPS)

52

Page 53: California Public Utilities Commission

Renewable Energy TargetsMost ambitious in the country: • 20% Renewables by 2010• 33% Renewables by 2020

53

Page 54: California Public Utilities Commission

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 CO2 emissions by 18.7 million metric tons

54

Page 55: California Public Utilities Commission

Meeting the Renewable Energy GoalThe 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

Page 56: California Public Utilities Commission

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

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Page 57: California Public Utilities Commission

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

Ener

gy (T

Wh)

/ ye

ar

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

Page 58: California Public Utilities Commission

Large IOU Bids and Contracts

0

10

20

30

40

50

60

70

80

2004 2005 2006 2007 2008

Ener

gy (T

Wh)

/ ye

ar

Solicitation Bids Short-listed BidsBids Submitted for Approval to Date Bilaterals Submitted for Approval

Source: California Public Utilities Commission, 2nd Quarter 2009

58

Page 59: California Public Utilities Commission

Large IOU Renewable Resource MixExpected to Change Over Time

Status of New Renewable Capacity Approved by the CPUC

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2010 2015 2020

Perc

enta

ge o

f RPS

Gen

erat

ion

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

Page 60: California Public Utilities Commission

Status of New Renewable CapacityApproved by the CPUC

CPUC Approved Contracts for New Capacity Since 2002

New Online MW9%

Under Development - On Schedule

40%

Under Development - Delayed

44%

Cancelled7%

Source: California Public Utilities Commission, 4th Quarter 200960

Page 61: California Public Utilities Commission

RPS Capacity Installed Since 2003, By Year

0

200

400

600

800

1000

1200

2003 2004 2005 2006 2007 2008 2009

Cap

acity

(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

100151

226

339

690

867

1023

+156

2009 actual year to date

2009 forecasted

61

Page 62: California Public Utilities Commission

0

10

20

30

40

50

60

70

80

2003 2004 2005 2006 2007 2008

Solicitation Year

Ener

gy (T

Wh)

/ ye

ar

Wind Solar Small Hydro Geothermal Biogas BiomassSource: California Public Utilities Commission, 3rd Quarter 2009

Number of Bids by Renewable Sourcein IOU Solicitations

62

Page 63: California Public Utilities Commission

California (2000)284 TWh

US (1999)3,752 TWh

Natural GasCoal

Nuclear

Natural Gas

Nuclear

Hydro

HydroImports

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 %

OilRenewables

3.3 %1.6 %

California and U.S. Electricity Supply

Source: California Energy Commission

63

Page 64: California Public Utilities Commission

Ways to Meet Renewable Energy GoalsThe 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

Page 65: California Public Utilities Commission

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

Page 66: California Public Utilities Commission

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

Page 67: California Public Utilities Commission

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 trade67

Page 68: California Public Utilities Commission

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

TradingDifferences 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

Page 69: California Public Utilities Commission

Southern CaliforniaTransmission Projects

Tehachapi Renewable Transmission Project: Segments 1- 11 69

Page 70: California Public Utilities Commission

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

Page 71: California Public Utilities Commission

Distributed Generation

71

Page 72: California Public Utilities Commission

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 4th 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

Page 73: California Public Utilities Commission

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

Page 74: California Public Utilities Commission

Distributed GenerationPolicy 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 3rd Party lease or PPA provider

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

74

Page 75: California Public Utilities Commission

DG Programs and PoliciesCustomer Generation or Self-Generation

Offset Customer’s LoadWholesale Generation

Procurement (Sell to Utility or Other)

Size and Incentives

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

Page 76: California Public Utilities Commission

76

Page 77: California Public Utilities Commission

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

CSIPending

CSI Program

TotalNumber 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

Page 78: California Public Utilities Commission

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

Page 79: California Public Utilities Commission

California Solar InitiativeCPUC Component: $2.2 Billion

• Commercial buildings

• Schools

• Government Buildings

• Industrial facilities

• Agricultural facilities

• Existing residential buildings

79

Page 80: California Public Utilities Commission

California Solar InitiativeCalifornia Energy Commission

Component: $400 million

New residential buildings only

Targets builders and developers

80

Page 81: California Public Utilities Commission

California Solar InitiativePublicly Owned Utilities $784 Million

All building types:new and existing

81

Page 82: California Public Utilities Commission

Solar Initiative By Program Component

California Public Utilities

Commission

California Energy

Commission

Publicly Owned Utilities (POU)

Total

Program California Solar Initiative

New Solar Homes

PartnershipVarious 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

ScopeAll 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

Page 83: California Public Utilities Commission

CSI Provides Incentives Based on Performance Characteristics of Solar

InstallationExpected 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 greaterSystems 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

Page 84: California Public Utilities Commission

Incentives Decline as Demand Grows:CPUC Program Has a Goal of 1,750 MW

84

Page 85: California Public Utilities Commission

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

Page 86: California Public Utilities Commission

CaliforniaSolarStatistics.ca.gov:Provides Weekly Program Data

in customizable charts

86

Page 87: California Public Utilities Commission

Solar Market Progress: 570 MWSolar Interconnections: Over 53,000

customers

0

2000

4000

6000

8000

10000

12000

2001 2002 2003 2004 2005 2006 2007 2008 2009

Year

# of

Inte

rcon

nect

ions

by

Year

87

Page 88: California Public Utilities Commission

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 2009Installed ProjectsApplications 24,835MW 285.5 MWIncentives $ MM $647.4

Pending ProjectsApplications 7,322MW 163.5 MWIncentives $ MM $314.8

Total Installed and Pending ProjectsApplications 32,157MW 449.0 MWIncentives $ MM $962.2

CSI Projects through Program Year 2009Installed ProjectsApplications 24,835MW 285.5 MWIncentives $ MM $647.4

Pending ProjectsApplications 7,322MW 163.5 MWIncentives $ MM $314.8

Total Installed and Pending ProjectsApplications 32,157MW 449.0 MWIncentives $ MM $962.2

Source: CaliforniaSolarStatistics.ca.gov, January 6, 2010

88

Page 89: California Public Utilities Commission

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 Total1 31,689 2,644 34,333 154 429 583

1Program 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 Total1 31,689 2,644 34,333 154 429 583

1Program Total includes CSI projects reservation requests during the transitional year of 2007

Source: CaliforniaSolarStatistics.ca.gov, January89

Page 90: California Public Utilities Commission

Applications & CapacityReceived by Month

Jan

MarMay Ju

lSep Nov Ja

nMar

May Jul

Sep Nov Jan

MarMay Ju

lSep Nov

0

500

1000

1500

2000

2500

3000

3500

0

5

10

15

20

25

30

35

Res Reservation Requests Non-Res Reservation Requests CEC AC MW

Rese

rvat

ion

Requ

ests

CEC

AC M

W

Source: CaliforniaSolarStatistics.ca.gov, January 20, 201090

Page 91: California Public Utilities Commission

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 Total2 21,669 1,272 22,941 101 157 258

2Program Total includes CSI projects completed during the transitional 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 Total2 21,669 1,272 22,941 101 157 258

2Program Total includes CSI projects completed during the transitional year of 2007

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

91

Page 92: California Public Utilities Commission

Completed Projects & Capacity by Month

Jan

MarMay Ju

lSep Nov Ja

nMar

May Jul

Sep Nov Jan

MarMay Ju

lSep Nov

0

500

1000

1500

2000

2500

3000

3500

0

5

10

15

20

25

30

35

Res Completed Projects Non-Res Completed Projects Completed MW

Com

plet

ed P

roje

cts

CEC

AC M

W

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

92

Page 93: California Public Utilities Commission

CSI Progress Towards 1,750 MW Goal

SCE - Non-Residential

SCE - Residential

PG&E - Non-Residential

PG&E - Residential

CCSE - Non-Residential

CCSE - Residential

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

69

30

96

70

15

13

38

9

65

19

28

6

433

228

353

163

77

40

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

93

Page 94: California Public Utilities Commission

Average $/Watt Cost by System Size

2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 $-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$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

Average $/W (<10 kW Sys Size - CEC AC)

Aver

age

Cost

per

Wat

t

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

94

Page 95: California Public Utilities Commission

Average $/Watt Cost by Sys Size - <10 kW

2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 $-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

$9.75 $9.67 $9.64 $9.49 $9.51 $9.52

$9.90 $9.77 $9.77 $9.34

$8.99

$10.06

Apps Reserved (<10 kW - CEC AC) Systems Installed (<10 kW - CEC AC )

Aver

age

Cost

per

Wat

t

Appl

icat

ions

Res

erve

d an

d In

stal

led

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

95

Page 96: California Public Utilities Commission

Average $/Watt Cost by Sys Size - >10 kW

2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009 Q3 2009 Q4 $-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

0

50

100

150

200

250

300

350

400

450

$8.60 $9.06

$9.60 $9.30 $9.04

$8.87 $9.09 $9.29

$8.84 $8.35

$7.82 $7.70

Apps Reserved (>10 kW - CEC AC) Systems Installed (>10 kW - CEC AC)

Aver

age

Cost

per

Wat

t

Appl

icat

ions

Res

erve

d an

d In

stal

led

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

96

Page 97: California Public Utilities Commission

Completed Projects $/Watt Costs

up to

$4

$4 -

4.5

$4.5

- 5

$5 -

5.5

$5.5

- 6

$6 -

6.5

$6.5

- 7

$7 -

7.5

$7.5

- 8

$8 -

8.5

$8.5

- 9

$9 -

9.5

$9.5

- 10

$10 -

10.5

$10.5

- 11

$11 -

11.5

$11.5

- 12

$12 -

12.5

$12.5

- 13

$13 -

13.5

$13.5

- 14

$14 -

14.5

$14.5

- 15

$15 -

15.5

$15.5

- 16

$16 -

16.5

$16.5

- 17

$17 a

nd up

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

($9.57)

($8.91)

less than or equal to 10 kW greater than 10 kW

Perc

ent o

f Com

plet

ed P

roje

cts

Source: CaliforniaSolarStatistics.ca.gov, January 20, 2010

97

Page 98: California Public Utilities Commission

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.html

• 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.htm

Photo: Pritesh Sampat, La Habra HeightsInstaller & Seller: AMECO, Long Beach, CA California Solar Initiative Funded System 2007, 8.2 kW

98

Page 99: California Public Utilities Commission

Climate Change

99

Page 100: California Public Utilities Commission

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 SchwarzeneggerWorld Environment Day, 2005

100

Page 101: California Public Utilities Commission

Climate Change MitigationThe 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

Page 102: California Public Utilities Commission

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

Page 103: California Public Utilities Commission

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

Page 104: California Public Utilities Commission

California’s Electricity Related Greenhouse Gas Emissions

Source: California Energy Commission Emissions Inventory

2004 Electricity Sales (MWh)Imports

23%

In-State Generat-

ion77%

Emissions (MMT CO2e)

In-State Generat-

ion44%

Imports56%

104

Page 105: California Public Utilities Commission

World’s Largest Greenhouse Gas Emitters

1. USA…………..5,661…………….…..19 2. China…………2,795………….……..023. Russia………..1,437………….……..104. Japan…………1,186………….……..095. India…………..1,073……….………..016. Germany……….787……….………..107. UK………………569……….………..098. Canada…………437……….………..139. California……….430……….………..1210. Italy……………..429………….……...0711. South Korea…...428………….……...09

12. Mexico………….425………….……...04

2000 Emissions Per Capita(Mt CO2) Emissions

Sources: Courtesy of CalEPAResearch conducted by Oak Ridge National Lab & The Tellus Institute

105

Page 106: California Public Utilities Commission

Greenhouse Gas Emissions Per Capita

Source: California Energy Commission, Inventory of California Greenhouse Gas Emissions and Sinks, 1990-1999, Nov. 2002106

Page 107: California Public Utilities Commission

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

Page 108: California Public Utilities Commission

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

Page 109: California Public Utilities Commission

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

Page 110: California Public Utilities Commission

Assembly Bill 32 TimetableItem DateSigned into law Sept. 2006Early action measures identified June 30, 2007Convene environmental justice advisory committee July 1, 2007

Mandatory reporting regulations Jan. 1, 2008Emissions inventory finalized Jan. 1, 2008Adoption of scoping plan Jan. 1, 2009Greenhouse gas limits and reduction measures adopted in regulation Jan. 1, 2011

Greenhouse gas limits become operative Jan. 1, 2012

110

Page 111: California Public Utilities Commission

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

Page 112: California Public Utilities Commission

Overall Conclusion: Greenhouse gas targets can be met

112

Page 113: California Public Utilities Commission

Western States GreenhouseGas 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

Page 114: California Public Utilities Commission

Transmission

114

Page 115: California Public Utilities Commission

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

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Natural GasCPUC 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 andsuppliers 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.

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Ensuring Natural Gas ProcurementCosts 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.

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Gas Daily Monthly Spot Gas Prices

02468

101214

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

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-10

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-10

Mar

-11

Jun-

11

$/M

MB

tu

PG&E Citygate SoCal Gas Border Henry Hub SoCalGas Citygate

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Overview of San Bruno Pipeline Failure

• 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

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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

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Map of Line 132

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The InvestigationAreas 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

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Regulatory Response

National Transportation Safety Board

U.S. Department of Transportation: Pipeline and Hazardous Materials Safety Administration (PHMSA)

California Public Utilities Commission

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• 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 anticipatedAugust 2011

NTSB Findings and Recommendations to Date

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Page 125: California Public Utilities Commission

• 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

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Page 126: California Public Utilities Commission

• 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

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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

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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.

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Energy – New Technologies and Smart Grid

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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

                                          

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Page 131: California Public Utilities Commission

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

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Greening the Valley

Region 2000 Population2015

Population % ChangeBay 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 Finance132

Page 133: California Public Utilities Commission

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

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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

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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

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Why Smart Grid (continued)

ENERGY EFFICIENCY & DEMAND RESPONSE

RENEWABLES

GENERATION

TRANS-MISSION

Policy Drivers• Aging Infrastructure

– Significant investment in T&D system likely in coming years

• Help Achieve / Integrate policy goals– Renewable Portfolio Standards– Greenhouse Gas Reductions– CA Loading Order

Business Drivers• Exceptional customer service.• Maturing workforce.• Utilities need to create a power grid that meets

the growing and changing needs of customers.• Advance State policy initiatives by incorporating

green renewable resources.• Advancements in IT and communication systems

are accelerating and provide opportunities to achieve operational efficiencies, streamline processes, and incorporate new technologies.

• Utilities are already planning to incorporate modern grid technologies and building blocks when available and cost effective.

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California Committed toImplement Smart Grid

• Statewide advanced metering deployment launched in 2006• California regulatory agencies are launching key Smart Grid

initiatives– California Public Utilities Commission – California Energy Commission

• Three large Investor-Owned Utilities have significant Smart Grid initiatives in progress

• Smart Grid legislation currently pending in California legislature (SB14)

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Advanced Meters Leading the Way to Smart Grid and Demand Reduction Opportunities

• Advanced Meters currently in full-scale deployment by PG&E, SCE, SDG&E, and SoCalGas.

– To date, 12.3 M meters installed out of 23M meters – Expected completion by end of 2012 (electric)– Represents a $5.6 billion investment– Enables significant operational savings to utilities and

new consumer benefits by providing hourly usage data, automatic data collection, and timely detection of grid reliability issues

• CPUC conducted independent investigation of accuracy of Advanced Meters in 2010 and found that PG&E’s advanced meters are accurate

• CPUC initiated an advanced meter opt-out proceeding to investigate opt-out options– Workshop is scheduled in September 2010 to gather information on potential

costs & implementation issues. – All IOUs will participate in workshop and provide data / analysis with respect to

their AMI systems.• CPUC required PG&E, SCE, SDG&E to file 10-year smart grid deployment plans in

late June 2011 to comply with Commission’s Smart Grid policy decisions and SB 17.– Commission will review utility plans for Smart Grid and issue a decision in mid-

2012 on utility smart grid plans.• CPUC adopted privacy rules to protect customer’s Advanced Meter usage data

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Smart Grid Title XIII – Smart Grid, SEC. 1301. Statement of Policy on

Modernization of Electricity Grid:

• It is the policy of the United States to support the modernization of the Nation's electricity transmission and distribution system to maintain a reliable and secure electricity infrastructure that can meet future demand growth and to achieve each of the following, which together characterize a Smart Grid:…(see Appendix)

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California Regulatory AgenciesPursuing Smart Grid

• CPUC– Smart Grid Rulemaking opened in December 2008– Held Smart Grid Symposium on April 21, 2009

• California Energy Commission– Two public workshops on Smart Grid scheduled for May 13th and

14th to discuss policy and technology– Public Interest Energy Research group to fund development of

2020 Smart Grid goals

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CPUC Smart GridRulemaking Expectations

• Comply with federal Energy Independent Security Act of 2007 and potential new state law

• Develop state-wide Smart Grid visionand consistent framework

• Process expected to last two years– Initiate public workshops– Explore role of standards– Consider other policy issues

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Utility Investments in Smart Grid• Three largest investor-owned utilities have significant smart grid

initiatives already in progress. Some examples:– Advanced metering infrastructure – Substation and Distribution automation– Grid failure prevention, detection, repair– Enable integration of Distributed Energy Resources– Operational efficiencies

• No specific Smart Grid related regulatory framework is guiding these deployments to-date

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Challenges Facing a Smart Grid System• Regulatory Challenges

• Federal, state and industry alignment• Coordinating proceedings and activities• Approvals, implementation and integration• Infrastructure development• Dynamic pricing

• Costs and Rate Pressure

• Investment Climate

• Technology Maturity, Standardization and Adoption

• Information and Systems Security

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Page 144: California Public Utilities Commission

American Recovery and ReinvestmentAct of 2009

$4.5 Billion – Smart Grid Research, Development, Demonstration,

and Deployment

For expenses necessary for electricity delivery and energy reliability activities to modernize the electric grid, including: demand responsive equipment, enhance security and reliability of the energy infrastructure, energy storage research, development, demonstration and deployment, and facilitate recovery from disruptions to the energy supply, and for implementation of programs authorized under title XIII of the Energy Independence and Security Act of 2007 (42 U.S.C. 17381 et seq.)

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Smart Grid Funding Breakdown

Source: EPRI145

Page 146: California Public Utilities Commission

Smart Grid Investment Grant ProgramOverview

Competitive, merit-based solicitation; more than 1,500 applications expected Covers electric transmission, distribution, and customer-side applications Deployment of Phasor Measurement Units (PMU) within the transmission system

is a specific program goalAnticipated Schedule

Activity Date

Notice of Intent(NOI)

April 16, 2009

Comments Due May 6, 2009

Funding Opportunity Announcement (FOA)

[June 17], 2009

Application Due Dates [July 29, 2009; Dec. 2, 2009; Mar.

31, 2010]

All Funds Obligated September 2010

Eligibility and Funding

• $3.375 billion available• Funding provided for up to 50% of

qualified investments requested by grant applicants

• Applications expected from eligible entities such as electric utilities, load serving entities, appliance and equipment manufacturers, and IT vendors

• Expected project awards range from $500,000 to $20,000,000 ($100,000 to $5,000,000 for PMU projects)

Source: DOE146

Page 147: California Public Utilities Commission

Smart Grid DemonstrationsOverview

Competitive, merit-based solicitation; several hundred proposals expected Covers electric transmission, distribution, and customer-side projects at a scale

that can be replicated across the country Scope includes (1) Regional smart grid demonstrations, (2) Utility-scale energy

storage demonstrations, (3) Grid monitoring demonstrations

Anticipated Schedule

Activity Date

Draft Funding Opportunity Notice (FOA)

April 16, 2009

Comments Due May 6, 2009

Funding Opportunity Announcement (FOA)

TBD

Application Due Dates TBD

All Funds Obligated September 2010

Eligibility and Funding• $615 million available • Applicant’s cost share must be at

least 50% of the total allowable costs

• Expect applications from all types of organizations including state and local agencies, universities, electric utilities, equipment manufacturers, and project developers

• Expect to fund: 8-12 regional demonstrations, 12-19 energy storage projects, and 4-5 grid monitoring projects; $5m to $60m per project

Source: DOE147

Page 148: California Public Utilities Commission

Five Technologies to Look forin Smart Grid Projects

• Integrated communications, connecting components to open architecture for real-time information and control, allowing every part of the grid to both ‘talk’ and ‘listen’

• Sensing and measurement technologies, to support faster and more accurate response such as remote monitoring, time-of-use pricing and demand-side management

• Advanced components, to apply the latest research in superconductivity, storage, power electronics and diagnostics

• Advanced control methods, to monitor essential components, enabling rapid diagnosis and precise solutions appropriate to any event

• Improved interfaces and decision support, to amplify human decision-making, transforming grid operators and managers quite literally into visionaries when it come to seeing into their systems

Source: DOE148

Page 149: California Public Utilities Commission

Alternative-Fueled Vehicle Rulemaking Status• October 2009: SB 626 (Kehoe) enacted.

• July 2010: CPUC Decision that 3rd party EV service providers not regulated as public utilities.

• July 2011: CPUC Decision:– Affirms TOU rates and metering arrangements– Orders EV notification assessment report– Upgrade costs treated as shared until 2013– Orders load profile and cost research– Initiates lower-cost customer-owned submeter

protocol process– Supports customer choice and competitive

charging equipment market

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Overview of Electric Prices & Trends

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Electric Rate Changes Have Tracked Inflation Since 2003

0.00

0.02

0.04

0.06

0.08

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0.14

0.16

2003 2004 2005 2006 2007 2008 2009 2010

$ kW

h

PurchasedPower

Bonds & Fees

Demand SideManagement

Transmission

Distribution

Utility OwnedGeneration

2003 Inflation-adjusted rate

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Page 152: California Public Utilities Commission

2008 DSM Clean Energy Revenue Requirements – All IOUs

PROGRAM 2008 IOURevenue

Req.*

% of Total Revenue

Req.

Per Capita**

Energy Efficiency $758 2.08% $27.89Low Income Energy Efficiency $157 0.43% $5.81Demand Response $141 0.50% $5.21CA Solar Initiative $323 1.20% $11.88Self Generation Incentives $90 0.25% $3.35TOTAL $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.

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PG&E Average Bundled Rates by Class - 2000-2008 (cents/kWh)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Cent

s pe

r kW

h Residential

Sm/Med Commercial

Lg Commercial/Industrial

Agricultural

Street Lighting

System Average

Residential 10.7 12.8 13.3 13.2 12.7 12.9 14.3 15.2 15.0

Sm/Med Commercial 10.2 14.2 15.6 15.7 14.3 14.1 14.5 15.1 14.7

Lg Commercial/Industrial 7.1 10.6 12.6 12.5 11.3 11.2 11.7 11.5 10.7

Agricultural 11.1 13.1 13.7 13.8 11.7 11.8 12.2 12.4 13.2

Street Lighting 12.3 16.0 17.6 17.0 15.1 15.0 15.9 17.2 15.6

System Average 9.7 12.7 14.0 14.0 12.9 12.9 13.8 14.0 13.7

2000 2001 2002 2003 2004 2005 2006 2007 2008

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SCE Average Bundled Rates by Class - 2000-2008 (cents/kWh)

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Cent

s pe

r kW

h Residential

Sm/Med Commercial

Lg Commercial/Industrial

Agricultural

Street Lighting

System Average

Residential 11.5 13.0 13.5 12.8 12.5 12.9 14.8 14.8 15.0

Sm/Med Commercial 10.4 13.7 15.8 14.4 13.5 13.6 15.6 15.6 14.6

Lg Commercial/Industrial 7.7 10.6 12.6 11.2 9.9 10.0 12.3 11.9 10.9

Agricultural 8.7 10.6 11.1 9.9 9.4 9.5 10.7 11.3 11.1

Street Lighting 13.9 15.8 17.3 15.5 14.7 14.0 15.4 16.9 19.5

System Average 10.0 12.5 14.0 12.9 12.2 12.4 14.3 14.3 13.8

2000 2001 2002 2003 2004 2005 2006 2007 2008

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SDG&E Average Bundled Rates by Class - 2000-2008 (cents/kWh)

2000 2001 2002 2003 2004 2005 2006 2007 2008

Residential 11.3 13.7 14.3 14.6 14.3 14.6 15.4 16 15.6Small Commercial 11.7 14 16.5 16.9 17.2 16.8 15.8 16.8 16Medium & Large C&I 11.8 12.1 12.6 12.3 11.8 11.7 11.8 13.2 13.6Agricultural 16.5 15.2 15.5 14.9 14 13.8 14.3 15.9 15.6Street Lighting 11 12.9 14.9 15.3 16.4 16.1 14.2 15.2 14.7System Average 11.4 12.8 13.6 13.5 13.2 13.3 13.5 14.5 14.5

0

2

4

6

8

10

12

14

16

18

20

Cent

s pe

r kW

h

Residential

Small Commercial

Medium & Large C&I

Agricultural

Street Lighting

System Average

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Maintaining Reliability and Safety of the Electric Power System

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CPUC Electric Reliability Program

Distribution -The CPUC regulates electric distribution operations (below 69 kV):

• Reliability Standards Minutes of Outage per Year per Customer Reports (CPUC Decision 96-09-045)

• Emergency Standards General Order of the CPUC (G.O.) 166• Rotating Outage Plans CPUC Rulemaking 00-10-002• Inspection and Maintenance Standards G.O. 165Generation -

The CPUC enforces G.O. 167 for reliable power plant performance using:

• Operation and maintenance audits • Outage inspections and investigations of incidents• See Generation Performance:

http://www.cpuc.ca.gov/PUC/aboutus/Divisions/Consumer+Protection/egpb/index.htm

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Reliability MeasuresThe 5 Largest Electric Distribution Utilities Must

Annually Reporta :

1. Outage Duration and Frequency using minutes of outages per year per customer and number of outages per customer per year measures (SAIDI – System Average Interruption Duration Index)

e.g., PG&E about 1.5 outage per customer per year and 157 minutes per year.

– Data Must exclude Major Events per CPUC decision – May exclude Major Events per Institute of Electrical and Electronic

Engineers (IEEE) 1366 Standard2. Top 10 power outage events 3. Circuits having over 12 sustained outages in the year.

ahttp://www.cpuc.ca.gov/PUC/energy/ElectricSR/Reliability/annualreports/

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Emergency Standards

During Major Storms Utility Performance is Reasonable if:

• Service is Restored in 570 minutes or less (average wait per customer interrupted); and

• Customer calls on average are Answered with Less than 30% Busy Signals

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Page 160: California Public Utilities Commission

Inspection and Maintenance Standards• Walk, drive, or fly by their systems every year in

urban areas and every 2 years in rural areas.

• Conduct detailed inspections every 3-5 years:– Specify the condition– Problems found, and – A scheduled date for corrective action. 

• Submit an annual report summarizing – Inspections made– Equipment condition observed– Repairs made. 

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Page 161: California Public Utilities Commission

Electric Safety Program

The CPUC audits the maintenance and inspection programs of electric distribution facilities:

• Overhead per General Order 95• Underground General Order 128

– If violations are found, citation letters listing the violations are issued.

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Page 162: California Public Utilities Commission

Other Energy Agency Roles • Federal Energy Regulatory Commission (FERC)

– Interstate commerce: wholesale power contracts and high voltage transmission costs

• California Independent System Operator (CAISO)– Transmission grid operation and wholesale market

administration; regulated by FERC

• California Energy Commission (CEC)– Includes research, load forecasting, generation siting, program

administration

• Municipal Electric Utilities (Various)– Can manage own grid operation or become a participating

transmission owner (PTO)162

Page 163: California Public Utilities Commission

The Communications Industry

The CPUC manages universal telephone service programs, issues video franchises, monitors customer service and public safety standards for telephone services, regulates rates for basic phone service and rural carriers, licenses telephone corporations, and responds to federal telecommunications initiatives.

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CPUC Communications Goals For Next 3-5 Years

• Expand consumer education and community action

• Increase the speed and effectiveness of consumer complaint resolution

• Enhance enforcement and fraud prevention measures

• Promote access and remove barriers to technology rollout in supporting economic development

• Ensure maximum deployment of emergency response and disaster recovery system

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Investigation (OII) of AT&T Inc’s. Proposed Acquisition of T-Mobile

CPUC is analyzing specific impact on California in order to:

● Develop a record to inform CPUC Comments to the FCC on the proposed acquisition;

● Determine if any conditions related to California-specific effects of the merger may be appropriate;

CPUC Decision Expected in November 2011

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Ensuring Universal Telephone Service

• LifeLine Program– LifeLine provides discounted basic local telephone service to an average of 1.7 million

subscribers per month.– In 2011, the CPUC will implement Decision 10-11-033 which allows non-traditional

carriers (wireless and VoIP) to participate in the program. In order to accomplish this, the decision: • Caps current LifeLine rate at $6.84 until December 31, 2012, and limits the LifeLine

rate to no more than 50% of a carrier’s basic service rate; • Expands the LifeLine program to include data services for consumers that receive

wireless equipment through the DDTP program. • Delinks LifeLine rates from AT&T’s basic service rates;• Provides a set monthly subsidy to customers;• Establishes an annual process to determine a Lifeline subsidy;

• Fiscal Year 2011/2012 Budget of $375 million is funded by a 1.15% surcharge on intrastate telecommunications services.

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• California Teleconnect Fund (CTF) Program: – The CTF provides a 50% discount on eligible telecommunications and

internet access services to schools, libraries, government health care providers, non profit community-based organizations (CBOs), and California Community Colleges.

– At the end of June 2011, the CTF program had approximately 5,900 participants, of which over 3,100 are CBOs.

– To assist the CTF program in bridging the digital divide, a contractor was selected to conduct outreach to CBOs and government health care providers.

– Commencing Fall 2011, the CTF will further leverage its resources by requiring federal discounts be applied to rural health care provider’s eligible services prior to applying the CTF discount.

• Deaf and Disabled Telecommunications Program (DDTP)– DDTP provides relay service and assistive telecommunications equipment

for persons who are deaf and disabled through the California Relay Service and California Telephone Access Program, respectively.

– In 2012, CPUC expects to continue to move forward to include wireless equipment as a permanent part of DDTP.

Ensuring Universal Telephone Service (continued)

167

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Service QualityCPUC standard (G.O. 133-C) is that communications carriers restore

customer telephone service within 24 hours 90% of the time. The four Large Local Exchange Carriers did not meet the goal in 2010.

Verizon, Sure West and Citizens of California restoral percentage ranged from a low of 60% to a high of 96%.

AT&T’s results ranged from a low of 32% to high of 70% Average duration for outages for AT&T is 36 hours.

Of 12 Small Local Exchange Carriers, nine met or exceeded the 90% in 24 Hour Standard in most cases. Pinnacles, Ponderosa, and Volcano fell short of the goal.

Staff report issued in March 2011 on the results of reported General Order 133-C Service Quality measures and the impact of Winter 2010/11 storms on service outages and recommended that the CPUC consider issuing an Order Instituting Investigation and Rulemaking to: Revisit the existing standards Consider incentive/penalty mechanisms Implement Real-time reporting processes during states of emergency or catastrophic

events Staff is preparing an OII/OIR for CPUC consideration in September.

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California Advanced Service Fund The total CASF award to date is $44.98 million for 33 projects covering 10,186

square miles and benefiting 286,572 households Unserved areas : $ 5.08 million for 16 projects covering 3,254square miles

and benefiting 31,159 households Underserved areas : $39.90 million for 17 projects covering 6,932 square

miles and benefiting 255,413 households Funding for 17 previously approved projects have been rescinded because

applicants: opted out of the project or are unable to secure funding either through loans, private investments or through the Recovery Act

14 projects have been completed Other projects are either under construction or undergoing pre-construction activities Senate Bill (SB) 1040 extended CASF indefinitely, expanded it to include three

accounts, and provided funding for the three accounts as follows: (1) Broadband Infrastructure Grant Account - $100 M (2) Rural and Regional Urban Consortia Grant Account - $10 M and (3) Broadband Infrastructure Revolving Loan Account. - $15 M

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Page 170: California Public Utilities Commission

Mapping Broadband Deployment CPUC received a $7.9 million dollar federal Recovery Act grant in order to

collect broadband availability data from all broadband providers in the state and to support the California Broadband Council

Data collection and mapping efforts support both state and federal programs Spring 2011 CPUC submission of data to the NTIA CASF, DIVCA, Rural Telecommunications Infrastructure (RTI)

Broadband Deployment is increasing 71% of households served by state-issued video franchisees and their affiliates

subscribe to wireline broadband. This is up from 66% last year. 23% of the 27.7 million Californians over 17 years old, subscribe to mobile

wireless broadband faster than 200 kbps in one direction.

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BroadbandThe CPUC has fostered deployment of broadband over power lines (BPL) for California consumers

BPL service uses the electric utilities' power lines to carry broadband signals into a consumer's home, thus solving the "last mile" problem and increasing choice for consumers in Internet broadband providers

The Federal Communications Commission's Rural Health Care Pilot Program decision granted over $22 million over a three-year period to a statewide California Telehealth Network.

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DIVCA Implementation of State Issued Video Franchises

Under the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), video competition has increased quickly

The CPUC has issued 144 Video Franchises and amendments to 41 companies

AT&T and Verizon have exceeded their three year and two year build out obligations to offer video services to more than 35% and 25% of the households in their service areas. Combined, both companies now offer video to more than 5.3 million households in California.

As of December 2010, 70% of all video customers in the state are served by state video franchise holders. This is up from 62% in Dec. 2009.

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Video Franchising• The CPUC has the responsibility for issuing, suspending, terminating,

and renewing state video franchises, and enforcing non-discrimination and build-out requirements

• Local governments retain control over environmental protection, consumer protection, and use of their public rights of way, and will continue to receive franchise fees from video service providers

• Approved video franchises for AT&T California, Cableview Communications, Cox Communications, Time Warner, Verizon California, and Wave Broadband

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Video Franchising Goals• Create a fair and level playing field for all market competitors that does not

disadvantage or advantage one service provider or technology over another

• Promote the widespread access to the most technologically advanced cable and video services to all California communities in a nondiscriminatory manner regardless of socioeconomic status

• Protect local government revenues and their control of public rights-of-way

• Require market participants to comply with all applicable consumer protection laws

• Complement efforts to increase investment in broadband infrastructure and close the digital divide

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Page 175: California Public Utilities Commission

Video FranchisingBuild-Out Requirements

• Holders may not discriminate against or deny access to service to any group of potential residential subscribers because of the income of the residents in the local area in which the group resides

• Holders or their affiliates with fewer than 1,000,000 telephone customers satisfy this section if they offer video service to all customers within their telephone service area within a reasonable time, as determined by the CPUC

• Holders or their affiliates with more than 1,000,000 telephone customers shall provide access to its video service 25-35 percent of the customer households in the holder’s telephone service area within two years after it begins providing video service, and to a number at least equal to 40-50 percent of those households within five years

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Video Franchising Nondiscrimination Requirements

• State franchisee may not discriminate against or deny access to service to any group of potential residential subscribers because of the income of the residents

• A holder with more than 1,000,000 telephone customers satisfies this requirement if all of the following conditions are met:

– Within three years after it begins providing video service, at least 25 percent of households with access to the holder’s video service are low-income households, and within five years, 30% are low-income

– It provides service to community centers in underserved areas, as determined by the holder, without charge, at a ratio of one community center for every 10,000 video customers.

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Video FranchisingLocal Entity Responsibilities

• Franchise fees

• Customer service standards

– ½ of fines to Digital Divide Account

• California Environmental Quality Act review

• Encroachment permits

• Emergency alert

• Public, educational, and government/support

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Consumer Protection Initiative

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TALK CampaignTelephones, Advice, Laws and Knowledge

• $1.2 million outreach program utilizing a statewide network of 45 Community Based Organizations (CBOs) throughout state.

• CBOs provide information and education to targeted, hard-to-reach communities and consumers including:• Seniors• Disabled• Low-income• Non- and limited-English proficient

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Water

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CPUC and WaterThe CPUC regulates 140 investor owned water and 12 sewer utilities

CPUC's Water Action Plan sets forth the approach for regulating investor owned water utilities and rests on four key principles:

• Safe, high quality water

• Highly reliable water supplies

• Efficient use of water

• Reasonable rates and viable utilities

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CPUC Water Goals ForNext 3-5 Years

• Ensure reliable water supplies by developing policies and regulatory mechanisms to address water shortages

• Implement procedures to ensure a high quality water supply

• Develop and implement rules for the efficient use of water and of water producing resources

• Augment consumer outreach / rules enforcement

• Increase accounting and auditing services to industry divisions and increase oversight over long-term debt

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California Water Usage

• Agriculture/Environment: 80%

• Investor Owned (CPUC Regulated): 4%

• Municipals, Mutuals, Districts: 80%

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California RegulatedWater Companies

• 9 Class A (> 10,000 Customers)• 5 Class B (< 10,000 but > 2,000)• 25 Class C (< 2,000 but > 500)• 102 Class D (< 500)

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California Regulated Water Companies (Continued)

• LocationGenerally suburban

• Customer TypeGenerally small businesses, residential customers

• OrganizationGenerally small operating districts

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Objectives That Will Guide Water Action Plan Implementation

1. Maintain Highest Standards of Water Quality

2. Strengthen Water Conservation Programs to a Level Comparable to those of Energy Utilities

3. Promote Water Infrastructure Investment

4. Assist Low Income Ratepayers

5. Streamline CPUC Regulatory Decision-making

6. Set Rates that Balance Investment, Conservation, and Affordability

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Maintaining Highest Standards of Water Quality Is Vital to the Health of Customers• Strengthen inter-agency relations with Department of Health

Services• Strengthen the CPUC's role in water

quality regulations and monitoring procedures

• Require water utilities to provide water quality reporting to the CPUC in their General Rate Case filings

• Develop alternative funding mechanisms to address water quality infrastructure investments for smaller water companies

• Provide incentives for the acquisition or the operation of small private water utilities by larger private or municipal water utilities

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Strengthening Water Conservation Programs

• Promote metered water service to encourage conservation• Educate water industry stakeholders regarding policies and

practices that reduce water and energy consumption• Direct participation by all California Class A and B water utilities in the Urban

Water Conservation Council and encourage implementation of the Council’s Best Conservation Management Practices

• Encourage increasing conservation and efficiency rate designs (such as increasing block rates) where feasible to promote greater conservation

• Remove current financial disincentives to water conservation• Establish utility financial incentives for greater conservation• Consider energy usage as an important outcome of all water policy

decisions and work toward a 10% reduction in energy consumption by the utilities over the next three years

• Collaborate with the California Environmental Protection Agency to reduce California greenhouse gas emissions

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Promoting Water Infrastructure Investment Will Assist in Achieving All The Objectives

• Allow utilities’ PUC-filed “Water Management Program” to serve as a basis for approval of needed infrastructure

• Consider authorization of a Distribution System Improvement Charge to promote infrastructure improvements

• Work with other state and local agencies toward the common goal of maintaining reliable water supplies

• Provide timely compensation for water pollution clean-up costs that are due water utilities

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Assisting Low Income Ratepayers Will Increase Affordability of a Vital Resource for

Those Least Able to Afford it

• Develop a low income rate assistanceprogram for water customers taking service from PUC-regulated water utilities

• Implement a pooling mechanism as well as a standard low-income rate assistance program based on the results of individual company programs

• Examine policy and legislative changes needed to address low-income consumers dwelling in multi-family housing

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Streamlining CPUC Regulatory Decision-making Will Benefit Both Utilities and Consumers

• Adopt incentive regulation where feasible and effective• Streamline the existing process for review

of cost of service and rate of return for all classes of water utilities

• Acquisition of small private water utilities by larger private or municipal water utilities may reduce regulatory burden

• Consider elimination of Reserve Accounts for purchased water, purchased power, and pump tax

• Evaluate efficiencies of consolidating rate cases• Use Alternative Dispute Resolution in place of more time-consuming

regulatory procedures wherever a fair and efficient regulatory result can be accomplished

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Advancing Water Regulation CPUC regulates 127 water utilities serving about 18% of

California residents; and 13 sewer utilities.

Water Supply and Conservation Water Action Plan 2010 Update Adopted

• Water Conservation is the best, lowest cost of supply.• Implementing the 2009 Comprehensive Water Package – 20%

reduction in water use by 2020 - now.• Coordinating our efforts with other state agencies.

Aggressive water conservation policies in place for our larger water utilities• Decoupled Sales and Revenues.• Implemented Tiered Rates.• Increased water conservation budgets

Recycled Water rulemaking opened

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Advancing Water Regulation (continued)

• Low-Income Ratepayer Assistance– Programs in place at our ten largest water utilities, serving 95%

of our water ratepayers.– Rules issued to increase up-take rate for these programs.

• Sharing of information among water and energy utilities.

• Water / Energy Nexus– Re-defining water conservation as an energy efficiency strategy

• Conserve water, use less energy intensive water, make delivery systems more efficient.

– RD&D programs underway now• Operating well pump / motor combination at optimal

efficiency levels using specialized software programs.• Replacement of mechanical pressure reducing valves with

modern electrical regenerative flow control valves.

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Transportation

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CPUC Rail Safety Goals For Next 3-5 Years

• Promote changes to the Federal Railroad Safety Act to balance authority between federal and state railroad safety authorities

• Oversee heavy rail system safety programs to influence railroads’ budgets, goals, objectives, and workplans

• Develop cross-functional rail safety teams across Rail Operations Safety, Rail Transit Engineering, and Rail Crossings Safety sections

• Develop an improved, centralized database for safety and accident data and safety improvement strategies

• Intervene early in construction projects that impact rail crossing safety

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Railroad Safety• 50 railroad corporations operate in California. There are 11,000

public grade crossings located within 52 counties and 400 cities in California.

The CPUC:• Employs federally certified inspectors and coordinates with the

Federal Railroad Administration to ensure railroads comply with safety regulations.

• Investigates railroad accidents.

• Ensures that railroad-highway grade crossings are designed, constructed, and properly maintained to ensure the public safety.

• Is an active participant in Operation Lifesaver, a grade crossing awareness training program.196

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CPUC Passenger Transportation Goals For Next 3-5 Years

• Develop a streamlined, state-of-the-art electronic licensing processAssist non-English speakers to comply with licensing and enforcement requirements

• Broaden enforcement activities directed at interstate movers

• Increase public awareness of the CPUC's rules and regulation of moving companies and passenger carriers

• Improve enforcement by conducting joint enforcement with other agencies and by strengthening enforcement tools

• Limit opportunities for unfair competition amongst passenger carriers by strengthening the regulatory fee mechanism.

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Passenger Transportation• Moving companies obtain permits from the CPUC after showing financial

and safety fitness. They must also prove to the CPUC that they have adequate insurance and they are subject to criminal background clearance by the California Department of Justice and Federal Bureau of Investigation

• Passenger carriers (limousines, airport shuttles, charter and scheduled bus operators, and others) obtain permits or certificates after providing financial responsibility and safety information to the CPUC, including evidence of liability insurance and a California Highway Patrol safety inspection

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Federal Stimulus FundsThe American Recovery and Reinvestment Act (ARRA) of 2009 will provide $787 billion in economic investment nationally, with California possibly receiving more than $50 billion for a variety of statewide programs. 

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How CPUC Expects to HelpCoordinate Stimulus Spending

1. Collaborate with CEC on Discretionary Funding Plans• State Energy Program (SEP): Contribute to shaping content of SEP, drawing on Energy Action Plan, California Energy Efficiency Strategic Plan, Integrated Energy Policy Report

• Energy Star Appliance Rebates: Advise on cost-efficient administrative mechanism

2. Direct Utilities to Facilitate Effective Use of Funds• Low Income Efficiency: Coordinate selected outreach, service delivery, & monitoring of utility Low Income EE programs with Community Services and Development’s Weatherization Program

• Targeted Utility Facilitation: Direct IOU efficiency, renewable, & demand response programs to help energy users

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How CPUC Expects to Help Coordinate Stimulus Spending (continued)

3. Support California Success with Competitive Awards:• Smart Grid: Working collaboratively with CEC, CAISO, utilities and others to garner significant funding for competitive applicants to demonstrate and deploy components of the Smart Grid

• Alternative & Electrified Transportation:– Promote existing CPUC policies to help California applicants secure competitive grants for alternative transportation

– Ensure appropriate regulatory actions regarding utility distribution infrastructure investments and energy tariffs for charging stations to support alternative transportation and operations

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Four Investor-Owned Utilities’ Combined 2009-2010 Efficiency & Demand Response Current Spending on Areas Eligible for Stimulus Funding

Energy Efficiency• 2009 $800 million authorized for program activities (excluding evaluation)• 2010 $1.2 billion proposed for programs

Low Income Energy EfficiencyTotal

• 2007 (Actual) $146,943,276• 2008 (Budgeted) $157,725,601• 2009 (Projected) $240,054,282• 2010 (Projected) $310,685,254$Demand Response Programs (one dimension of Smart Grid)

$325 million for large customers statewide$867 million (2009) and $1 billion (2010) statewide for SmartMeters

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Alternative TransportationCPUC authorized utility programs & activities

• EPAct Compliance programs

• Safety Studies

• Customer Outreach • Load Management Studies (EV load is addressed under DR and EE load management programs)

• System Impact Studies

•Truckstop and Port Electrification programs

• Codes and plug standardization programs • Impact of vehicle electrification on Long-Term Procurement Plans and Smart Grid Proceedings

• Low Emission Vehicle Programs

• Advanced Metering Infrastructure/SmartMeter Program

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Alternative Transportation (continued)Tariff-Related Activities• CPUC has authorized Time of Use rates specific to EV battery charging and CNG refueling. (Off-peak rate is much lower than the partial peak and on-peak charge)

• CPUC studying further revisions to rate structure to increase the economic incentive to drive alternative fuel vehicles.

Utility Funding 2009 & 2010Total projected 2009 & 2010 IOU ratepayer funds for alternative transportation: $51.5 million

- PG&E: $11.7 million per year- Edison: $11.1 million per year- SDG&E/SoCalGas: $3 million per year

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CPUC Administrative Initiatives

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CPUC Initiatives SB 960 Compliance

Resolved 320 proceedings consistent with legislative deadlines. Closed 355 proceedings in 2010 and reduced the average time that

formal matters were open by approximately 67 days, or 26%.

Modernizing the CPUC Continued to streamline processes and procedures to take advantage of new

technology while maintaining parties’ due process rights. In 2010 received 92% of filings electronically and processed them 30% faster

(on average) than in 2009. Expanding e-filing system to allow submission of testimony and exhibits

electronically.

Reviewing CPUC processes Implemented a new agenda format to highlight proposed outcome and costs. Launched a subscription service to allow the public to follow proceedings

more easily. Established working groups with internal and external stakeholders to focus

on improving ex parte rules, public access, and practice and procedure.

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Thank you!For Additional Information:

www.cpuc.ca.gov www.GoSolarCalifornia.ca.gov

www.CalPhoneInfo.com

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