Gov’s Letter on CEC Energy Report Delays Action

By Published On: August 27, 2005

A letter to the Legislature by Governor Arnold Schwarzenegger delivered late on August 23 left little time for legislators or the California Energy Commission to incorporate its information into hearings and meetings held the next morning. In response, the commission delayed action on the possible adoption of the interagency Energy Action Plan II. “We want to make sure it’s completely consistent” with the governor’s response, said commissioner and acting chair Jackie Pfannenstiel. The goal, she said, is “to make sure all the latest information is incorporated.” Down the street at the Capitol, commission chair Joe Desmond found that members of the Senate Energy, Utilities and Commerce Committee had either not yet received or not reviewed the letter. Lawmakers said they believed it was largely unresponsive to the issue of what to do about reorganizing the state’s energy bureaucracy. “I do not believe that we need to take that up in the next 18 days,” said Senator Dave Cox (R-Roseville), who also complained that the governor released the letter to the press before sending it to lawmakers. The governor’s letter addressed the last commission report from 2004, sent to him at the end of last year. State law SB 1389 requires that the administration “on or before 90 days after receipt of the report, report further to the Legislature the Governor’s agreement or disagreement with the policy recommendations contained in that report.” The governor’s overall energy plan in the tardy letter bows to the last Integrated Energy Policy Report, including:<ul><li><b>Resource adequacy:</b> It supports the California Public Utilities Commission “loading order” that calls for efficiency and renewables before contracting for fossil-fueled power plants for new supply.</li> <li><b>Competition:</b> The governor approves of guaranteed cost recovery for utilities and long-term contracts to “encourage the addition of new conventional and renewable energy supplies and the maximum availability of existing supplies.”</li> <li><b>Transmission:</b> The policy includes transmission line improvements, as well as support for distributed generation to take pressure off the transmission system. Also included is improving coordination with the Western system.</li> <li><b>DWR:</b> Schwarzenegger wants renegotiation of remaining Department of Water Resources long-term contracts for rate relief.</li> <li><b>LNG:</b> iquefied natural gas is not mentioned, although the governor included increasing gas supply and storage.</li> <li><b>Renewables:</b> He states that a 33 percent renewables portfolio is “possible.”</li> <li><b>Advanced meters:</b> A policy is expected in the near future that all electricity customers should have smart meters.</li> <li><b>Direct access:</b> The governor specifies a commitment to “allowing large customers to shop for competitive wholesale power prices, provided that cost-shifting” doesn’t occur and no new stranded assets are created.</li></ul>

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