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Energy Production and Use in California

Energy Production and Use in California. 2002. 2001. Source: California Energy Commission http://www.energy.ca.gov/html/energysources.html. Source: California Energy Commission http://www.energy.ca.gov. California Electricity Use (Average MW). Source: California Energy Commission.

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Energy Production and Use in California

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  1. Energy Production and Use in California

  2. 2002 2001 Source: California Energy Commission http://www.energy.ca.gov/html/energysources.html

  3. Source: California Energy Commission http://www.energy.ca.gov

  4. California Electricity Use (Average MW) Source: California Energy Commission

  5. Recent Problem: The California Energy Crisis

  6. The Dual Crisis in California • Electricity Crisis • Inadequate Supply • High Wholesale Prices • Financial Crisis • Draining all Financial Assets of Utilities • PG&E Bankruptcy • SCE Settlement after Almost Bankruptcy • Decimation of State Budget

  7. Non-Firm Peak Power Prices. Average of High and Low for Week Source: Western Price Survey

  8. Non-Firm Peak Power Prices. Average of High and Low for Week Source: Western Price Survey

  9. Marginal Cost of Natural Gas per MWhr

  10. Natural Gas Spot Prices in California Source: Enerfax.com

  11. Marginal Cost of Natural Gas per MWhr

  12. The Dual Crisis • Although all municipal utilities and investor-owned utilities (IOUs) throughout the West faced the electricity crisis, on the California IOUs experienced the financial crisis. • Only these were under direct regulatory control of the California governor and the CPUC. • Two regulatory rules forced California IOUs into a financial crisis. IOUs were precluded from using long-term electricity purchase contracts to protect themselves from wholesale price spikes. Once wholesale prices sky-rocketed, Governor Davis and CPUC refused to allow retail price increases needed to keep investor-owned utilities financially viable and to encourage energy conservation.

  13. Current Problem: High Prices of Delivered Energy

  14. Long Term Contracts Entered Into By California Expected Price Range with $3 - $5 Gas

  15. Bond Payments • $13 Billion Bonds Proposed • 15 Year Payments • 4% to 5% Interest • Annual Payment for Next 15 years: $1.2 Billion Per Year

  16. The Challenge: Adequate Electricity Supplies for the Future

  17. Policy Framework Advanced by Arnold Schwarzenegger DuringCampaign

  18. Arnold Schwarzenegger’s Announced Energy Program • Create a coherent energy strategy to stimulate private investment; align the state energy agencies to support that strategy • Reform the wholesale power market to ensure stable supplies • Reform retail power markets to ensure competitive prices and better demand response • Assure adequate electricity generation capacity • Assure adequate and diverse fuel for power generation • Support all cost effective conservation and efficiency • Increase the reliability of the transmission grid • Support and encourage appropriate energy research and development • Explore ways to lower the cost of California’s overpriced power purchase agreements Source: http://www.joinarnold.com/en/agenda/

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