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Renewable Energy in Renewable Energy in CaliforniaCalifornia

Brian C Prusnek

Deputy Cabinet Secretary

Governor Arnold Schwarzenegger

The views and opinions discussed in this presentation are my own and not representative of the Schwarzenegger Administration

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Background Background By law established in 2002, California

Investor Owned Utilities must procure 20% of their power from renewable resources by 2010.

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The Major Criticism…The Major Criticism…

“The framework and process for implementing California's policy bears little resemblance to…other states and has…taken longer than…processes used in most states. Indeed, we are unaware of any state RPS process that comes close to approximating the detail, complexity, and duration of the process in California.”[1]

[1] http://www.energy.ca.gov/2005publications/CEC-300-2005-011/CEC-300-2005-011.PDF

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Detail, Complexity and DurationDetail, Complexity and Duration Unnecessary oversight and process

Utilities go through renewable solicitations AND general solicitations. Solution: Set goal and allow renewables to be treated like other resources

under an Integrated Resource Planning approach. Early fears of above-market costs created additional

process To remedy this, a cost socialization element was created whereby an

administratively established market price, the Market Price Referent (MPR), is set annually.

Renewable projects above the MPR, require that utilities have “above market prices” socialized over entire system rather than from its customers. These above market costs are called Supplemental Energy Payments.

Kill one bird with two stones? The RPS is further complicated because the Public Utilities Commission

determines the MPR and approves renewable contracts whether they are above or below the MPR. But because of existing law, if the cost of the approved project is above the MPR, the utility applies to the Energy Commission for approval to gain access to SEPs.

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Other ChallengesOther Challenges Only hydro (less than 30MWs) counts Transmission, transmission, transmission

Transmission Lines Planned

300

1,200

400

400

2,400

3,800

3,000

up to 12,000

900

0 2000 4000 6000 8000 10000 12000

Otay Mesa (2007)

Tehachapi (Seg. 1) (2009)

Devers-Palo Verde (2009)

Trans Bay Cable (2010)

Tehachapi (Seg. 2-3) (2010)

Green Path/Sunrise (2010)

Frontier Multi-State (2011)

Tehachapi (Seg. 4-11) (2011)

Trans West Express (2012)

Sea Breeze Cable (2013)

MW

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Focus on the PositiveFocus on the Positive

RPS based on energy, not capacitySignificant renewable resource opportunitiesFERC decision allows renewable

transmission to be recovered in the Transmission Access Charge

Million Solar Roofs Initiative and world leading energy efficiency programs

Climate change law makes the RPS the floor rather than the ceiling

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IOU Actual and Forecasted RPS Generation

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,00020

03

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

GW

h

Pre-2002 Contracts 2002 Contracts 2003 Contracts 2004 Contracts 2005 Contracts

2006 Contracts Pending Approval Short-listed Bids Expired Contracts RPS Target

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Wind Generation

Solar

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Existing California Renewable Generationand Possible Additions to meet the 20% RPS Goal by 2010*

1,977

765

2513

465

1,214

228

4,577

1,300

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Geothermal Biomass Wind Solar

MW Additional

Existing3,191 MW

993 MW

7,090 MW

1,765 MW

* Data on additional renewable resource is based on a current CEC studies on renewables. Potential retirements of existing resources and repowering projects are not included.

13,039 MW Total 7,319 MW Additonal 5,720 MW Existing

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RecommendationsRecommendations

Renewables should be integrated into utility general procurements

Target should be set – end of story. Transmission must be addressedIf climate change legislation is developing,

it makes little sense to mandate a large amount of renewable resources