In chronically deficit-ridden California, lawmakers can be expected to raid the billions of dollars in revenue set to be generated by the California Air Resources Board\u2019s carbon cap-and-trade market, according to Mary Nichols, Air Board chair. \u201cAt some point, the Legislature will want to weigh in\u201d on the distribution of auction proceeds, she said in opening the California Independent System Operator\u2019s Sept. 7-8 symposium. Nichols predicted the state\u2019s trading market proceeds will be of particular interest after the first three-year trading market compliance cycle, when annual auction proceeds are expected to rise from $500 million to $2 billion. The market is set to begin in 2013 and be expanded in 2015 from power plants and other stationary industrial sources of greenhouse gases to include the transportation and natural gas sectors. Because a future with less greenhouse gases requires steep infrastructure investments, the symposium focused on controlling power rates in the transition, while at the same time maintaining system reliability. Participants also discussed the limited amount of load reduction attributed to ineffective demand-response and efficiency measures. \u201cWe are at the end of the beginning in the energy industry,\u201d said V. John White, Center for Energy Efficiency and Renewable Technologies executive director. Renewable resources, he said, \u201chave gone from being a side salad to being the center of the procurement planning plate.\u201d Key issues are the mix and distribution of alternative and fossil energy resources. Some are concerned about an excess of photovoltaic resources, because of declining panel costs. That scenario would cause a shortage of baseload renewables, such as geothermal energy, said Jan Smutny-Jones, Independent Energy Producers executive director. California\u2019s one-third renewables portfolio requirement is to reduce annual greenhouse gas emissions by about 11.4 million tons by 2020, according to the Air Board. The state\u2019s climate protection law--along with the 33 percent alternate energy mandate and other complementary programs, such as energy efficiency--is supposed to cut emissions by a total of 146.7 million tons by 2020. Nichols warned that if projected drops in greenhouse gas emissions from the state\u2019s 33 percent renewable mandate by 2020 don\u2019t come to fruition, carbon curbs are to be sought in other sectors. The Air Board chair acknowledged that carbon trading has its fair share of problems, but said \u201cfail-safe\u201d monitoring and compliance tracking mechanisms are being built into the market scheme, including reports, restrictions on offsets, and procedures aimed at preventing price volatility. There\u2019s a shortfall of energy savings in the state\u2019s energy market, according to the grid operator--which also operates the state\u2019s major wholesale electric market. \u201cNegawatts are not happening in California,\u201d said Steve Berberich, CAISO chief executive officer. Marc Ulrich, Southern California Edison vice president of alternative resources, attributed the lack of savings to the dearth of interest in real-time pricing aimed at shifting peak demand to times of lower demand. He noted that few large industrial customers in California are willing to stop production at times of high demand and costly power. As a result, demand reduction is reaped from \u201caggregating lots of little stuff,\u2019 he said.