The California Energy Commission?s inclusion of plans to site transmission lines in its proposed integrated energy policy is unlawful, according to California Public Utilities Commission president Mike Peevey. The energy commission?s final proposed integrated energy policy was scheduled to be publicly available late last week, but its release has been postponed?officially in order to integrate comments from hearings around the state held this month, and unofficially in deference to a new governor. Energy commission spokesperson Claudia Chandler, however, said that Peevey?s comments won?t cause any additional delay in the release of the final version. ?We believe the Draft Integrated Energy Policy Report is inconsistent with the law, or lacks adequate analysis? in its discussion of transmission planning, said Peevey in an October 20 letter to the energy commission. Peevey supported the report?s analysis of efficiency and renewables, however. The proposed report arrives while the state budget is slowly contracting like a boa constrictor around agencies? financial lifelines. The timing of the integrated policy report gives the energy commission, and now the CPUC, a chance to spotlight their roles and potentially prevent their budgets from being squeezed just when a new governor will be tackling the deficit. The energy commission wants to prevent its own expendability and to be essential to the state. The CPUC, while still fairly invulnerable to politics, lost its immortality with the crisis of deregulating electricity markets and became a target for legislators? attempts at cleaning up the energy crisis mess. The CPUC had the following to say about the proposed integrated resource plan: <b>Renewables:<\/b> The energy commission?s plan is to solicit legislation to accelerate the amount of renewable supplies in utilities? portfolios. Recent legislation requires utilities to have 20 percent of their electricity provided by renewable sources by 2017. Peevey noted that ?it may be premature to solicit legislation? to hasten that increase because the impact of acceleration on the price of renewable power is unknown. Governor-elect Schwarzenegger proposed acceleration in an early draft of his energy policy, but it?s omitted in his latest iteration. <b>Liquefied natural gas (LNG):<\/b> Peevey appears unwilling to let the hot topic of liquefied natural gas go to the energy commission. ?Our commissions should continue working together to identify the benefits and costs of pursuing LNG supplies for the state,? Peevey said. <b>Transmission:<\/b> ?The CPUC strongly disagrees,? Peevey stated, ?that transmission planning should rest primarily with the energy commission. This would effectively require us to defer our responsibility to assess need for transmission projects . . . we cannot relinquish such a responsibility, not only because it is inconsistent with the law, but also because it does not improve the current process.? The energy commission proposes that the ?permitting process for all new bulk transmission lines should be consolidated within the energy commission.? <b>Reserve requirement:<\/b> Peevey notes that the CPUC is supposed to resolve the operating reserve issue by the end of the year. Thus, it?s not just the energy commission and the CPUC that want a hand in determining the correct amount of ?extra? electricity needed on standby to prevent blackouts. The California Independent System Operator (CAISO) and the California Power Authority also want to weigh in on the subject. While CAISO is not suffering potential budget cuts, Schwarzenegger has promised to get rid of the power authority. <b>Direct access<\/b> (a.k.a. ?core-noncore?)<b>:<\/b> An early favorite of the governor-elect is the energy commission?s recommendation for exploring the potential for customers to sign up with electricity providers outside the standard utility. Peevey invokes the past experiment with direct access, in which the market for small consumers simply fell apart. The market for large customers was halted by the commission to staunch utilities? financial hemorrhaging. The CPUC ?staff is conducting a study to explore market structure changes and their implications for ratepayers, reliability, the environment, investor confidence, and market volatility,? Peevey said. He offered to have both commissions ?explore the complexities? of moving to direct access for large customers. This is the first integrated energy report since the state deregulated electricity?when the free market was supposed to take over supply-and-demand planning from the state. In many respects, the report is a return to what the energy commission was created for: modeling future supply and demand. Its proposed integrated plan is directed to politicians and policy makers to determine the state?s long-term energy policy. After deregulation gave legislators headaches, the state passed SB 1389 to reauthorize the energy commission?s role in future planning. The energy commission board still must approve the plan before it goes to lawmakers, which was supposed to happen by November 1. It is now set for approval November 12. From there, the governor has 90 days to present the legislature with his energy plan. The law says that if the governor disagrees with all or part of the commission?s recommendations, he can ?specify the alternate policy [he] finds appropriate.?