California is in good shape to meet expected load this summer but should get a move on preparations for next summer, when conditions will be tougher, warned a California Independent System Operator official at a March 23 Energy Action Plan meeting. There is ?just enough time to be ready for 2006? if organizations start planning now, predicted Yakout Mansour, CAISO chief executive officer. The grid operator?s concerns include transmission constraints and scarcity of power plant projects in Southern California. CAISO will conduct a demonstration in April to simulate how the grid will access power from utility contracts on hot days this summer, Mansour explained. Joe Desmond, the state?s energy czar, said Governor Arnold Schwarzenegger will want to be present at the event. Mansour?s optimism for this summer comes amid California Energy Commission projections that Southern California could face a 1,800 MW shortfall in meeting a 7 percent operating reserve if this summer is a scorcher. CAISO?s supply assessment is set for release on March 28. Mike Peevey, California Public Utilities Commission president, prodded sister organizations to factor in demand-response and related programs as resources. He also noted that the Los Angeles Department of Water & Power expects to have a minimum of 250 MW to spare. ?These Cassandra-like projections seem a bit misplaced? and can foster alarm, Peevey said. Dian Grueneich, CPUC member, voiced similar concerns. While energy efficiency is the state?s top policy priority, she said, the supply outlook doesn?t reflect expected energy savings from these efforts. Likewise, Sean Gallagher, Energy Division acting director, noted that the state expects to reap 750 MW in energy savings this year, compared to 380 MW last year, through more aggressive efficiency targets. That can also help make up the difference in the CEC?s supply forecast, he said. Southern California Edison and San Diego Gas & Electric told state officials that supplies will be tight but they will be able to meet projected load this summer. SDG&E stressed it will need to boost transmission to meet future resource-adequacy goals. The utility is conducting a study of up to 15 possible combinations of 500 kV lines. SDG&E, however, has not yet come up with proposed routes. Pacific Gas & Electric also said it has adequate resources for the coming months. As for power plants coming on line this summer, the CEC expects 802 MW in Northern California and 1,164 MW in Southern California. Looking ahead, state organizations agreed to develop an accounting method to include demand-response, interruptible, and energy-efficiency programs in firm resources for future supply forecasts. Also in the works is an Energy Action Plan Two, according to Peevey. The CPUC president said that the Western Area Power Administration?s recent break with CAISO and move to the Sacramento Municipal Utility District points to balkanization of transmission planning policy. Load-serving entities need to address this fragmentation, Peevey said. State officials also discussed the CEC?s 2004 Integrated Energy Policy Report. Desmond repeated that the governor will comment on the legislatively mandated report but didn?t say when. Schwarzenegger is committed to responding to the report, which came out last November, Desmond said. The study has reached cabinet-level review.