California Public Utilities Commission
Paul ClanonExecutive Director
August 2011
1
Presentation Overview• About the CPUC • Energy
– Climate Change Mitigation• Communications• Water• Rail Safety • Passenger Transportation
2
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
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
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
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 $104.8 66%
6
CPUC Proposed Budget FY 2010-11($ 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
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
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
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
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
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
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
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
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
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%
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Energy
17
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
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
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
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
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
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
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
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
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
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
The Loading OrderThe “Loading Order” sets priorities for California’s procurement strategy
Clean and EfficientFossil-Fired Energy
Efficiency andDemand Response
Renewable Energy
28
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
• 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
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
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
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
-
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
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
The California Long Term
Energy Efficiency
Strategic Plan
Making Energy Efficiency a Way of Life in California36
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
• 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
• 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
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
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
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
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
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
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
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
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
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
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
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
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
Renewable Portfolio Standard (RPS)
52
Renewable Energy TargetsMost ambitious in the country: • 20% Renewables by 2010• 33% Renewables by 2020
53
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
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
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
56
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
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
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
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
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
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
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
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
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
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
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
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
Southern CaliforniaTransmission Projects
Tehachapi Renewable Transmission Project: Segments 1- 11 69
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
Distributed Generation
71
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
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
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
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
76
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
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
California Solar InitiativeCPUC Component: $2.2 Billion
• Commercial buildings
• Schools
• Government Buildings
• Industrial facilities
• Agricultural facilities
• Existing residential buildings
79
California Solar InitiativeCalifornia Energy Commission
Component: $400 million
New residential buildings only
Targets builders and developers
80
California Solar InitiativePublicly Owned Utilities $784 Million
All building types:new and existing
81
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
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
Incentives Decline as Demand Grows:CPUC Program Has a Goal of 1,750 MW
84
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
CaliforniaSolarStatistics.ca.gov:Provides Weekly Program Data
in customizable charts
86
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
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
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
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
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
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
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
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
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
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
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
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
Climate Change
99
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
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
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
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
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
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
Greenhouse Gas Emissions Per Capita
Source: California Energy Commission, Inventory of California Greenhouse Gas Emissions and Sinks, 1990-1999, Nov. 2002106
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
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
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
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
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
Overall Conclusion: Greenhouse gas targets can be met
112
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
Transmission
114
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
115
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.
116
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.
117
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
Sep
-10
Dec
-10
Mar
-11
Jun-
11
$/M
MB
tu
PG&E Citygate SoCal Gas Border Henry Hub SoCalGas Citygate
118
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
119
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
120
Map of Line 132
121
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
122
Regulatory Response
National Transportation Safety Board
U.S. Department of Transportation: Pipeline and Hazardous Materials Safety Administration (PHMSA)
California Public Utilities Commission
123
• 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
124
• 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
125
• 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
126
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
127
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.
128
Energy – New Technologies and Smart Grid
129
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
130
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
131
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
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
133
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
134
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
135
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.
136
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)
137
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
138
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)
139
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
140
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
141
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
142
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
143
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.)
144
Smart Grid Funding Breakdown
Source: EPRI145
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
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
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
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
149
Overview of Electric Prices & Trends
150
Electric Rate Changes Have Tracked Inflation Since 2003
0.00
0.02
0.04
0.06
0.08
0.10
0.12
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
151
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.
152
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
153
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
154
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
155
Maintaining Reliability and Safety of the Electric Power System
156
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
157
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/
158
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
159
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.
160
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.
161
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
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.
163
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
164
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
165
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.
166
• 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
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.
168
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
169
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.
170
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.
171
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.
172
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
173
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
174
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
175
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.
176
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
177
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
179
Water
180
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
181
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
182
California Water Usage
• Agriculture/Environment: 80%
• Investor Owned (CPUC Regulated): 4%
• Municipals, Mutuals, Districts: 80%
183
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)
184
California Regulated Water Companies (Continued)
• LocationGenerally suburban
• Customer TypeGenerally small businesses, residential customers
• OrganizationGenerally small operating districts
185
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
186
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
187
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
188
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
189
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
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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