The Loading Order – How Are We Doing?

California Energy Commission

The Loading Order – How Are We Doing?The Loading Order – How Are We Doing?

Jackalyne Pfannenstiel Chairman


Independent Energy Producers Independent Energy Producers Annual MeetingAnnual MeetingOctober 10, 2006October 10, 2006


Energy Action Plan’s Loading Order Directs Resource

Additions

1. Energy efficiency and demand response

2. Renewable energy resources

3. Clean and efficient fossil generation


2006 Heat Storm Was a Wake-Up Call

How hot was it?

Northern California peak temperatures at once-in-28-year levels.

Southern California peak temperatures at once-in-10-years, even over the weekend.

SDG&E load peaked on Saturday - first time ever.

Record 11 days over 100° in Sacramento.

Northern California overnight lows were highest in recorded history - at least 1 in 57 years.


An Improbable Peak

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

40,000 42,000 44,000 46,000 48,000 50,000 52,000 54,000

Load (MW)

Probability

+3 Std Dev± 1 Std Dev-2 Std Dev +2 Std Dev-3 Std Dev

1 in 2

1 in 10

Actual Peak:

about 1 in 50


Surviving The Heat Storm

What worked:

Coordination and communication

Generation, transmission and import availability

Demand response

Praying

What didn’t:

Distribution transformers


Lessons For Next Time Distribution transformers fail under extreme heat

conditions.

Demand response well-suited for low probability events.

Peak load system operations needs planning and coordination.

Demand forecast needs to be updated often.

Luck is not a resource.


Resource Needs

Loads growing at 1.5%-2% per year

Peaks growing faster


Peak Demand Growth

0

10000

20000

30000

40000

50000

60000

1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003


Declining Load Factors

25

30

35

40

45

50

55

60

65

70

75

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004


New Residential Construction in California from 1975-2005

-

50

100

150

200

250

300

350

1975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005Year

Number of units

Multi-family

Single

Housing Drives Load Growth


New Homes Add to Peak Demand

1.2 million new homes by 2017

Most in hottest areas

AC loads add 2,400 MW at peak


Air Conditioning Contributes to the Peak

More Central Air

Conditioning

Housing Growth in Hotter

Areas

More AC in Existing Urban

Centers

Revised Peak Forecast for

Summer 2006 and Beyond0

1020304050607080

Before 19751975-19831984-1991

1992-

Saturation of Central AC


Loading Order: Energy Efficiency

First: Use energy efficiency and demand response as preferred means of meeting growing energy needs.


Energy Efficiency WorksPer Capita Electricity Consumption

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1960 1965 1970 1975 1980 1985 1990 1995 2000

kWh/person

Source: http://www.eia.doe.gov/emeu/states/sep_use/total/csv/use_csv.html

United States

California

California Energy CommissionAnnual Energy Savings from Efficiency Programs and Standards

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

19751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003

GWh/year

Appliance Standards

Building Standards

Utility Efficiency Programs at a cost of

~1% of electric bill

~15% of Annual Electricity Use in California in 2003Energy Efficiency Resource Additions


Meeting EE Goals

Annual Goals As of July 2006Achieved Annual Savings

YTD

Achieved Savings As% of 2006

Goal

2006 2007 2008

Net Summer Peak MW

442 478 528

84 19%

Net Annual MWh 2 million

2.2 million

2.5 million

382,000 19%

Net Annual Therms 30 million

37.3 million

44.4 million

4.3 million 14%


Loading Order: Renewables and Disributed Generation

Second: New generation needs met first by renewable energy resources and distributed generation, such as combined heat and power

.


Renewable Energy Growth

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

198319841985198619871988198919901991199219931994199519961997199819992000

YEAR

GWH

Geothermal

Biomass

WindSolar


Renewables: Stuck in Neutral?

0.00%

5.00%

10.00%

15.00%

20.00%

2002 2003 2004 2005


Loading Order: Clean and Efficient Fossil-fuel Generation

Third: To the extent the above are unable to satisfy energy and capacity needs, support clean and efficient fossil-fuel fired generation.


We’ve Been Adding Power Plants


More Applications Are Being Considered

In Active Review 14 4,506 MW

Possible New Filings through June 30, 2007 ~12 ~5,000 MW

Plants on Line for Summer 2007 1 160 MW

Plants on Line for Summer 2008 2 893 MW

Plants on Line for Summer 2009 ~4 1,350 MW

Projects No. MW


9,036 MW Licensed, But Not Built

Number MW

Cancelled/expired 6 1,393

No contract 6 5,057

Other reasons 5 2,586


Overall, How Are We Doing With the Loading Order?

Resource Goal Progress

Efficiency 2 Million MWH 19%

Demand Response

2,400 MW 1,100 MW

RPS 20% by 2010 11%

Fossil As Needed 2,400 MW for next 3 years


Prospects for Improvement

Energy legislation

Transmission progress

Utility solicitations: renewable, non-renewable

Advanced metering

Integrated Energy Policy Report

– RPS improvement

– Load Management Standards authority


2006 Energy Legislation

AB 32 Greenhouse Gases – GHG emission reductions

AB 2021 Energy Efficiency – Statewide EE target

SB 1 Solar Energy – 3,000 MW goal

SB 107 Renewable Energy – Acceleration of RPS

SB 1059Transmission -- Designation of corridors for future use

SB 1368 Greenhouse Gas Emissions – Emissions performance

standards for utilities


Transmission Progress Devers-Palo Verde No. 2

– Expected Operating Date: December 2009

Tehachapi– Agreed on Plan of Service

– Permitting of First Phase in Process

– Phase 2 and 3 CPCN applications 2007

Sunrise– Application Accepted as Adequate Sept. 2006

– Will allow 700 MW of renewable generation

Trans-Bay Cable– Approvals and Construction Started in 2007


Progress in Procurement

The CPUC process is underway

Solicitations are resulting in signed contracts

- renewables and non-renewables

Stakeholder groups are expressing optimism


Progress With Renewables

CPUC has approved nearly 3,000 MW of

contracts

WREGIS is expected to be deployed in 2007

The California Solar Initiative, beginning in

2007, has a goal of 3,000 MW of PV in ten

years


Advanced Metering Update

PG&E– Network deployment begun in September – Meter deployment to begin in November in the Bakersfield

area.

SDG&E– CPUC decision scheduled for the first quarter of 2007.– AMI deployment is expected to be completed mid-2008-2010.

SCE – Pre-deployment efforts positive: expects compatible system

available soon.– AMI project application and business case filing expected in

July 2007.


Loading Order Still Works

The Energy Action Plan was a valuable call to action;

there’s been too little action since

We need more energy efficiency, more demand

response, more renewables, more fossil generation

We’re not out of the woods yet on summer reliability

We need to find new approaches

We all need to take responsibility

Documents

The Loading Order – How Are We Doing?