The California “Energy Nightmare”

1. The California “Energy Nightmare” There is only one way to wake up…

2. Its the Supply, Stupid! California is the 6th largest economy in the world! So, why is it so difficult to get folks to build power plants here?

3. 25 Years of Neglect… California Energy Commission: The Graveyard of Power Projects! Since 1979, California has approved, constructed and brought on-line about 4,200 megawatts of power generating capacity. Since 1979, California has lost the opportunity to construct about 42,000 megawatts of power generating capacity. Added: 4,200 megawatts Lost: 42,000 megawatts

4. Power Generation added since 1996: 470 megawatts 9,343 megawatts Power plants under construction: 9 27 6,107 megawatts 13,991 megawatts Generation plants currently planned: 24 31 9,327 megawatts 18,454 megawatts “We have nine plants currently under construction - more than any other state in the nation” Governor Gray Davis, Press Release May 12, 2001 “A great sound bite! Too bad it is not true.”Senator Tom McClintock A Tale of Two States California Texas Population 33,871,648 Population 20,851,820 As of May 12, 2001 Existing In-State Generation Capacity: 53,991 megawatts 63,941 megawatts

5. A long time in the making! With no new major plants and the Rancho Seco nuclear plant taken off-line, California’s generating capacity actually declined while the demand was exploding. Source: Generation-Federal Dept. of Energy, Peak California Energy Commission

6. Cal-ISO 2001 Projections Look Grim “Since 1974 California has actively discouraged the construction of new power plants, and the day has arrived when we have run out of power.”Senator Tom McClintock 2001Estimated Surplus or Shortage in Megawatts Source: California Independent System Operator projections for 2001

7. Depending on Our Neighbors California’s dependence on imported energy grew from 12% in 1988 to almost 20% in 1998, energy that is in very short supply this year Source: Federal Department of Energy: All figures in millions of megawatt hours

8. Keep Out How Can California Get More Power for the New Economy? There is a Right Way, and there is a Wrong Way:

9. The Right Way… Putting out the welcome mat! Provide bold LEADERSHIP by showing that California is in the ‘power plant building business’ Prudent use of emergency powers to clear bureaucratic hurdles that companies face Provide incentives for rapid construction of transmission lines and power plants Revenue bonds for clean Hydro & Nuclear projects

10. Keep Out The Wrong Way… Threatening confiscation of property and criminal penalties “But if I have to use the power of eminent domain … then that's exactly what I will do.” “… if they're illegally gaming or manipulating the market, the Attorney General will track them down.” “… there are other, more drastic measures that I am prepared to take.” Governor Gray Davis, January 2001

11. California must ADD 30,000 megawatts of new electric power generating capacity over the next ten years It’s the Supply Stupid! 22,000 megawatts needed for 4% Growth Plus an immediate addition of 8,000 megawatts for proper reserves

12. Fixing the Grid “So far, all Governor Davis has done with his emergency power proclamation is hold a press conference”Senator Tom McClintock • Immediately use emergency powers to fix Path 15 in weeks rather than years • Would have prevented January blackouts • Use emergency powers to site and construct lines needed for San Francisco and San Diego • San Francisco saw blackouts LAST summer • Legislature could authorize revenue bonds if needed

13. Rising to the OccasionCalifornia Has a Long History of Public Works Successes In the 1860’s In the 1930’s Golden Gate & Bay bridges constructed in five years during the great depression Ten miles of rail laid by Transcontinental Team in a SINGLE day! In the 1940’s In the 1960’s Shasta Dam built in seven years during World War II California aqueduct built in under ten years

14. The purpose of emergency powers: From this… To this:In 66 DAYS The Santa Monica Freeway When the Northridge earthquake made the I-10 impassable, Los Angeles was losing $1 million per day in lost productivity. Governor Wilson used his emergency powers to issue contracts with special incentives and the freeway was rebuilt in record time.

15. Fixing California’s Power “Gridlock”Governor should use ‘Santa Monica Freeway’ model to prevent further blackouts “Federal energy authorities see the problem and suggest that a new regional authority…might be set up in order to cut through the tangle” “During the month of December, the average day-ahead wholesale price in the north was $308.74 per megawatt hour, compared with $223.07 to the south.” “They [regional power authorities] also admit that nobody seems to be anxious to take the lead in solving the problem.” “So that leaves Northern Californians with the prospect of ongoing power disruptions even when surplus energy is available on the southern side of the Path 15 bottleneck.” Source: San Francisco Chronicle, January 30, 2001

16. Short-term Power NeedsState needs 8,000 megawatts to restore proper reserves • Use emergency powers to get plants planned or those under construction completed quickly • Could reduce blackouts this summer • Use emergency powers to site and construct San Jose, Tracy and Los Angeles power plants by summer 2002 • San Francisco suffered blackouts last summer

17. A Long-term Power PlanState needs an additional 22,000 megawatts over next ten years • Finish construction of gas generated plants for additional 6,000 megawatts • Bring on-line 5,000 megawatts of clean hydro-power in 3-10 years • Bring on-line 11,900 megawatts of clean nuclear power in 3-10 years • Investigate other clean power alternatives to fossil fuel plants Power that is clean, affordable and abundant