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For immediate release: November 20, 2001
Media Contact: Claudia Chandler - 916-654-4989



Summer 2002 Electricity Forecast
Calls Upon Continued Conservation and New Power Plants
To Get California through Next Summer



The California Energy Commission forecasts that the State would have adequate supplies of electricity to meet next summer's electricity demand as long as planned power plants are built and current levels of conservation continue. The 2002 Monthly Electricity Forecast projected electricity supplies and demand over the next nine months. While the report assumes that the market will function normally, price spikes continue to be a concern if electricity supplies are tight.

Energy conservation efforts by consumers and businesses played a critical role in helping the State avoid blackouts this past summer. Clearly the State's $800 million investment in energy efficiency including the voluntary conservation efforts achieved through the Governor's Flex Your Power public awareness campaign and 20/20 utility rebate program were key contributors to reducing electricity demand last summer. An important question in forecasting electricity demand is how much of last summer's conservation efforts will continue next summer? If summer 2002 conservation efforts stay the same or decline only moderately, the State should have adequate electricity supplies to meet demand.

July may present the most challenging month for the State's supply and demand balance next summer. The Energy Commission projects a supply surplus of approximately 340 megawatts including new generation of 4,000 megawatts expected on line by July 2002. In an emergency declared by the Independent System Operator, there are also an additional 1,700 megawatts of electricity that could be available from large users participating in interruptible/emergency demand responsive programs.

A key concern continues to be whether there are adequate electricity supplies for all regions of the State. This overall statewide supply and demand electricity balance does not, however, focus on the problem of local area reliability issues. Problems with transmission line congestion and generation in a specific region could result in constrained supplies and local distribution problems.

To meet California's electricity crisis, the Governor established Emergency Executive Orders that streamlined the licensing of new power plants and encouraged new generation from a variety of sources to meet Summer 2001 electricity demand. Twelve Energy Commission licensed power plants, including ten simple cycle units, added 2,100 megawatts of new generation to the State's electricity system this year. There also was an additional 1,400 megawatts of new generation available from restarting and/or boosting generation from existing power plants, adding new renewable energy facilities, and new power plants that were licensed by local jurisdictions.

The Joint Legislative Audit Committee requested the Commission's electricity supply and demand analysis for the summers of 2002 through 2004. The 2002 Monthly Electricity Forecast: California Supply/Demand Capacity Balances for January September 2002 and the California Summer Electricity Outlook for 2002-2004 provide the analysis and assumptions used in responding to the Committee's request. The reports will be presented at the Joint Legislative Audit Committee hearing at 9 a.m. on November 26, 2001.

Both reports are available at the Energy Commission's web site:

www.energy.ca.gov/reports/

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