CPUC Finds Utility Renewables Procurement Weak

The California Public Utilities Commission told the state's investor-owned utilities to buy more green power than proposed. While the commission conditionally approved utilities' 2006 renewables plans, it ordered the utilities to supplement them with enhanced plans for contingency procurement and transmission facilities within 60 days. The action came at the commission?s first meeting in Los Angeles in more than three years. "We find these plans deficient in several ways," said Mike Peevey, commission president. "We expect to see some real planning instead of just expression of preferences." Under the state?s Energy Action Plan II, 20 percent of utilities' supplies are to come from renewable resources by 2010. Utilities are required to develop annual plans for procuring energy. "Not all [renewables] contracts come to fruition," noted the commission. A safety margin is needed, the commission said, "to guard against reasonably likely problems, such as errors in projects, big changes in load that could not be forecast, and delays in upgrading transmission." Commissioners lauded Southern California Edison for including transmission in its procurement plan. They criticized Pacific Gas & Electric and San Diego Gas & Electric for failing to do the same. Edison's transmission plan, while welcome, needs to be revised to factor in the possibility that not all the planned facilities will be built by 2010, the commission said. Utilities were told they must include contingency planning in their procurement plans based on "current conditions of the renewables portfolio standard program." SDG&E, for instance, cannot rely on out-of-state deliveries of green power and trading renewable energy credits since those strategies are not allowed under the current program. In other action, the commission approved the revised Energy Action Plan II, recently adopted again by the California Energy Commission and amended to incorporate the governor's response to the 2005 Integrated Energy Policy Report. The main changes in the latest version of the plan are that it includes a transportation fuels element and new language stating that the CPUC and California Energy Commission agree to cooperate in streamlining approval of new electric transmission facilities - - even though they disagree on which agency should be in charge. "The EAP II takes a Solomon's approach to this," said commissioner Dian Grueneich. The updated EAP also calls for: - -Better integration of the California Independent System Operator's transmission planning and modeling with both the CEC's power plant licensing process and the CPUC's ratemaking functions. - Legislation to establish a state transmission corridor planning process under the CEC that will be coordinated with local, federal, and Western regional agencies and planning processes. At this week's meeting, commissioners directed staff to develop greenhouse gas emissions standards for procurement of electricity by investor-owned utilities. Eventually, the commission will cover community-choice aggregators and energy service providers. "We do not intend to impose requirements that are not technologically feasible or are financially impractical," said Grueneich. However, she added, "We will not accept 'we can't do it' for an answer." In adopting the directive to its staff, the commission struck a requirement that the standards be based on "state-of-the-art" combined-cycle natural gas generation technology. This will allow staff to develop a greenhouse gas standard for procurement based on emissions from existing combined-cycle natural gas plants, Grueneich said. The change could be instrumental in determining the fate of clean coal technology plants that many Rocky Mountain states are planning.

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CPUC Finds Utility Renewables Procurement Weak

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