Energy Action Plan Greenhouse by iqm86975

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									   California Public Utilities Commission

       Energy Action Plan


Greenhouse Gas Policy
  Activities / Update



                                              Julie Fitch
                        Director of Strategic Planning
                California Public Utilities Commission

                                       December 11, 2007
                 California Public Utilities Commission


                    Three topics
• Joint CPUC/CEC Greenhouse Gas Policy
  Proceeding Update
   – Electricity Point of Regulation
   – Natural Gas Options
   – Allocation Issues
   – Modeling


• University proposal for California Institute of
  Climate Solutions


• Other related CPUC proceedings/activities

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                California Public Utilities Commission


    Electricity Point of Regulation
Key questions:
• Will California electric sector participate in cap and
  trade?
• If so, who will have compliance obligation?
Four options:
• Load-based (load-serving entities/retail providers)
• Source-based (CA generators only)
• First seller (entity first to deliver to CA grid)
• Source-based for in-state; load-based for imports
  (“hybrid”)

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               California Public Utilities Commission


   Point of Regulation - schedule
Key dates:
• August 21 En Banc Hearing (parties filed comments
  August 6 and replies August 15)
• November 9 ruling asking additional questions on
  options
• December 3 and 17 final comments and replies from
  parties
• Mid-late-January 2008 – mail proposed decision for
  30-day comment
• Late February 2008 – “Interim Decision” before both
  Commissions for final vote

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               California Public Utilities Commission


           Natural Gas Options
Key questions:
• Should end-user emissions from natural gas
  combustion be capped (participate in cap and trade)
  or treated through mandatory/regulatory policies and
  programmatic strategies?
• Can we get more from the natural gas sector if we
  utilize cap and trade?
• Is there a relationship to electricity sector policy?
Two options:
• Cap emissions at local distribution company level
  (similar to load-based for electric)
• Address through programmatic strategies for energy
  efficiency and pipeline leak detection
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                California Public Utilities Commission


          Natural Gas - schedule
Key dates:
• Initial comments from parties filed prior to prehearing
  conference – July 26 2007
• August 2 prehearing conference
• November 16 staff issued data request to gas market
  participants gathering data on sales by customer
  size/type
• November 28 ruling asking for further comments on
  key questions
• Comments due December 12, replies January 8
• Covered in “interim decision” on agendas in late
  February

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                   California Public Utilities Commission


                 Allocation Issues
Key questions:
• Are there particular allocation options that flow from
  different points of regulation?
• What is the most reasonable methodology for
  electricity and natural gas sectors, especially for
  consumers?
• How should methodology adjust over time?
Two main options:
• Auction
• Administrative allocation/distribution based on:
   –   Historical emissions
   –   Historical emissions intensity (emissions per MWh or therm)
   –   Sales (MWh or therms)
   –   Other (population, growth rates, etc.)

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             California Public Utilities Commission


         Allocation - schedule

Key dates:
• First workshop May 22, 2007
• Additional workshop November 5
• Comments received October 31, replies
  November 14, supplemental replies
  December 7
• Preliminary conclusions included in “interim
  decision” on agendas in late February


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                 California Public Utilities Commission


                        Modeling
Key questions:
• Quantity of emissions reductions available in
  electricity and natural gas sectors, at what cost?
• Availability of emissions reductions beyond existing
  efficiency and renewables policies
Two main initial conclusions (preliminary):
• Can get energy sectors back to proportional share of
  1990 emissions with:
   – Energy efficiency at unprecedented levels (around 100% of
     economic potential)
   – Renewables at ~33% level
   – Additional efficiency and renewables in other Western states
• Will not be free
   – Likely rate increases on order of 30% average statewide by
     2020
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                   California Public Utilities Commission


             Modeling - schedule
Key dates:
• Kickoff workshop September 21, 2007
• Initial results workshop November 14
• Parties comments and replies due January 4 and 18,
  2008
• Second stage of analysis complete by April 2008,
  including:
   – Refined cost estimates
   – Analysis of impacts by utility/retail provider (implications for
     allocation policy)
   – Further details of emissions reductions achievable by
     various strategies
• Also coordinating with ARB’s macroeconomic
  modeling
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                  California Public Utilities Commission


Remaining Issues for Joint Proceeding
• Refinement of modeling analysis
   – crucial to determining share of energy sector responsibility
     for overall 2020 goal adopted by ARB
       • Emissions reductions possible
       • Rate impact
   – individual entity analysis required for equity determination
• Elaboration on allowance allocation policy (?)
• Flexible compliance options
   – Includes controversial issue of offsets
   – Banking, borrowing, compliance period definitions
• Final recommendation to ARB by no later than
  August 2008
   – All design to fit into ARB’s “scoping plan” schedule
     (framework for all sectors) by end of 2008
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                California Public Utilities Commission


        California Institute for
  Climate Solutions (CICS) proposal
• Proposal from network of universities:
  –   University of California
  –   Private universities
  –   California State Universities
  –   Community colleges
• Centralized hub to coordinate, fund, and
  disseminate research on climate change
  mitigation
• Would award grants via open, competitive,
  peer-reviewed process

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              California Public Utilities Commission



        CICS Funding Request


• $60 million per year over 10 years

• Collected from electric and gas ratepayers

• Would use this as seed funding, allowing
  CICS to leverage additional state, federal,
  and private funding

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                  California Public Utilities Commission


          CICS Proposed Mission
• Develop Sustainable Energy Roadmap
• Fund primary research for gaps identified in
  Roadmap (avoid duplication)
• Fund education projects, including workforce
  development to train professionals and technicians
• Communicate/disseminate results through
  conferences, newsletters, etc.
• Suggested priorities:
   –   Buildings and homes
   –   Energy supply, sources and technologies
   –   Policy and management
   –   Climate forecasts and analysis
   –   Quality of life

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                     California Public Utilities Commission

                  Other related CPUC
                 proceedings/activities
Proceedings
• Long-term procurement planning proceeding
• Energy efficiency strategic planning
• Treatment of renewable energy certificates in RPS
• Sempra proposal for approval of certain early actions
• Edison proposal for Clean Hydrogen Power Generation
   demonstration plant
Activities
• Western Climate Initiative subcommittees
   –   Electricity
   –   Allocation
   –   Offsets
   –   Reporting
• California Climate Action Team subgroups
   – Chair the Energy subgroup, participate in others


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