CEC Policy Update Supports Cold Standby, Capacity Market

The California Energy Commission?s new update of its Integrated Energy Policy focuses on transmission but gives scant attention to conservation. Last week?s update also signaled increased interest in staving off the retirements of older plants for reliability and stated that fully-staffed cold standby plants could be an economic hedge against low hydropower in dry years. Cold standby plants ?would remain shut down but fully staffed during most of the year, so that they could be called upon to start up with advanced notices, typically six weeks to three months, to provide capacity during known times of shortages,? the report said. This could be done at ?minimal cost,? according to the authors, commissioners John Geesman and Jim Boyd. A tradable capacity market, endorsed by the report, is another way to squeeze power out of otherwise unused plants. A capacity market is envisioned to allow sellers not under contract, and those willing to engaged in demand response, to sell 1 MW tags for capacity available under certain terms. In its quest to streamline transmission project approvals, the CEC committee proposed the state initiate a ?comprehensive, statewide transmission planning process as a part of the California Independent System Operator?s (CAISO) current grid management plan.? The report noted California should re-examine the link between the CAISO transmission expansion process and local area reliability to ensure that the process stimulates investment. It added that the state should begin a transmission corridor planning process to facility right-of-way banking. That process could be used to facilitate wind energy deliveries from the Tehachapi area and geothermal power from southeastern California. A new tariff might be needed to facilitate renewables transmission, according to the report. Current CAISO tariffs include promoting economic efficiency and reliability?but that is not the policy objective of accumulating renewable supplies. In its quest to encourage renewable energy, the report suggested that the current renewable requirement be accelerated even further, with 33 percent of all utilities and municipal agencies? portfolios be fueled by renewable power by 2020. The report picked out Southern California Edison in particular for an increase in renewable power. The update suggests Edison should increase its renewable portfolio by 1 percent?to be 25 percent by 2010 and 30 percent by 2015. For photovoltaics, the report endorsed the governor?s solar initiative for new home building and retrofits. It also proffered a $10 million performance-based PV incentive pilot program. The pilot would provide payments for kWhs of production tied directly to system performance. A workshop on the proposal is set for September 27. While most of the report focused on supply and transmission, demand response?or the lack of it?was also a component of integrated energy policy. The state that prides itself on conservation is apparently falling behind in demand-response programs. The report noted that if California only met the load reduction achieved by Florida, ?the sunshine state? another 2,000 MW in peak load could be reduced. It calls for 5 percent of bundled peak be met with demand response programs in 2007?2,600 MW in total. Conservationists bemoaned the update?s lack of plans to get consumers to voluntarily use less energy. They note the state has acceded to the Southern California Edison-administered ?Flex Your Power? campaign that promotes efficiency, but not conservation. The state leaned toward efficiency program because, unlike conservation, they can be quantified, according to policy staff.

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CEC Policy Update Supports Cold Standby, Capacity Market

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