For Immediate Release: November 21, 2008
Media Contact: Susanne Garfield - 916-654-4989

MEDIA ADVISORY

Energy Policy Report Update Continues Push for
Increased Renewable Energy

SACRAMENTO - The California Energy Commission unanimously adopted the 2008 Integrated Energy Policy Report Update (2008 IEPR Update). The report assesses the progress on energy programs and policy recommendations identified in the 2007 Integrated Energy Policy Report that are critical to meeting California's energy and related environmental goals.

"This report can be seen as an update of our progress implementing California's loading order," said Chairman Jackalyne Pfannenstiel. "It looks at how we are doing in investing in energy efficiency. It looks at renewable energy and lays the foundation for the Governor's recently signed Executive Order. It looks at the electricity procurement process and asks whether it's working for the benefit of California ratepayers."

The 2008 IEPR Update focuses on five significant topic areas discussed in the 2007 IEPR:

  • Evaluating the market, physical and operational changes necessary to move to a higher renewable future to support the 33 percent renewable energy goal by 2020.
  • Analyzing how the state's energy efficiency goals and programs interact with the Energy Commission's electricity demand forecast.
  • Improving electricity procurement practices.
  • Assessing nuclear plant vulnerability to seismic/aging issues.
  • Evaluating the California Public Utilities Commission's (CPUC) self-generation incentive program to determine the costs and benefits of providing ratepayer benefits for renewable fossil fuels and distributed generation.

"The Update's analysis builds on the recommendations and important work from the 2007 IEPR," commented Commissioner Jeffrey Byron, Presiding Member 2008 IEPR Update and 2009 IEPR Committees, "and the 2009 IEPR will take this work further to continue advancing strategies that will reduce greenhouse gas emissions, expand energy diversity with renewable energy and alternative fuels and lower energy demand in a cost-effective manner for Californians."

To help meet the Governor's goal of 33 percent renewables by 2020, the Update suggests that the Energy Commission identify ways to overcome the legal and market obstacles to joint transmission lines between the investor-owned and publicly owned utilities, increase transmission-related research and development funding and address the impacts that delays in renewable contract and cancellations might have on reaching our target and environmental concerns.

The report also recommends that if a utility plans to build or purchase its own generating facilities, then the Renewable Portfolio Standards (RPS) procurement proposals should be reviewed, selected, and ranked by an independent party based on publicly published selection criteria. In addition, the Energy Commission urges the CPUC to immediately implement standard contract and prices for all RPS-eligible generating facilities up to 20 MW in size.

California's two operating nuclear facilities represent about 12 percent of the state's electricity supply and a major disruption because of an earthquake or plant aging could shut down one or both of the facilities. The 2008 IEPR Update agreed with the analysis from the Committee's consultant report that evaluated the nuclear plants vulnerability to seismic, and issues on plant aging, waste storage and disposal, replacement power and relicensing.

The Energy Commission recommends that PG&E and Southern California Edison report to the commission during the next IEPR cycle on the overall status and results of their research efforts on seismic and tsunami hazards. The 2008 IEPR Update also recommends that the Energy Commission with the CPUC should work to identify issues the utilities will have to address as part of their nuclear plant license extensions.

The report focuses on the challenge of proper accounting of efficiency and other savings impact in the Energy Commission's electricity demand forecast and recommends major efforts to update, improve and clarify these methods. The report also recognizes the need to improve the electricity procurement process by standardizing assumptions, extending the analysis timeframe and more adequately incorporate risk in the portfolio of projected resources. The Energy Commission recommends that the procurement process is open to all bidders, including utilities and that the principles are fair, objective and transparent; and the bids are reviewed, selected and ranked by independent parties. The procurement process must also consider environmental impacts, the likelihood of receiving permits and previous bidder success.

The 2008 IEPR Update evaluated the CPUC's Self-Generation Incentive Program to consider expanding the program's eligibility to renewable and non-fossil fuel distributed generation. The report recommends that eligibility for financial incentives should be based on overall efficiency and performance of a system regardless of fuel-type.

The report also examined and ranked the progress of 45 recommendations from the 2005, 2006 and 2007 IEPRs that the state has made in addressing electricity and procurement issues, renewable energy issues, energy efficiency requirements, demand response, load management standards, renewable energy issues and goals, distributed system and combined heat and power, nuclear power, transmission, natural gas, transportation, petroleum infrastructure, land use and water/energy.

In one of the few times in more than 30 years, the Energy Commission dedicated the 2008 Integrated Energy Policy Report Update to the memory of Jane Hughes Turnbull, who passed away in October. Ms. Turnbull, the quintessential representative of the Leagues of Women Voters, was a regular, always well-informed participant at many Energy Commission events over numerous years, particularly the Integrated Energy Policy Report and electricity and renewable energy policy proceedings. Her intellectual and personal contributions will be missed.

The 2008 Integrated Energy Policy Report Update is available on the Energy Commission's website at: www.energy.ca.gov/2008_energypolicy

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