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Energy Action Plan Greenhouse Gas Policy Activities / Update. Julie Fitch Director of Strategic Planning California Public Utilities Commission December 11, 2007. Three topics. Joint CPUC/CEC Greenhouse Gas Policy Proceeding Update Electricity Point of Regulation Natural Gas Options

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energy action plan greenhouse gas policy activities update

Energy Action PlanGreenhouse Gas Policy Activities / Update

Julie Fitch

Director of Strategic Planning

California Public Utilities Commission

December 11, 2007

three topics
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
electricity point of regulation
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”)
point of regulation schedule
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
natural gas options
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
natural gas schedule
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
allocation issues
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.)
allocation schedule
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

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
modeling schedule
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
remaining issues for joint proceeding
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
california institute for climate solutions cics proposal
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
cics funding request
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
cics proposed mission
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
other related cpuc proceedings activities
Other related CPUC proceedings/activities


  • 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


  • Western Climate Initiative subcommittees
    • Electricity
    • Allocation
    • Offsets
    • Reporting
  • California Climate Action Team subgroups
    • Chair the Energy subgroup, participate in others