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Energy: What Every Corporation Should Know About Reliable, Renewable and Distributed Generation. 2004 Bren School Corporate Partners Summit Bill Bryan, Vice President May 14, 2004. 1-in-10 Summer Temperature Demand (Hot). 1-in-2 Summer Temperature Demand (Normal).
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Energy: What Every Corporation Should Know About Reliable, Renewable and Distributed Generation 2004 Bren School Corporate Partners Summit Bill Bryan, Vice President May 14, 2004 05/06/2004
1-in-10 Summer Temperature Demand (Hot) 1-in-2 Summer Temperature Demand (Normal) 1-in-10 Summer with 7% Spinning ReservesAdded by SCE 1-in-2 Summer with 7% Spinning ReservesAdded by SCE Supply Outlook from theCalifornia Energy Commission 65,000 Cold Reserve Capacity 63,000 Emergency Response Programs/ Interruptables 61,000 Spot Market Imports 59,000 High Probability Additions- Only counts 57,000 plants deemed 75% or better chance of being built Megawatts 55,000 Net Firm Imports Existing Generation (reflects adjustments for 53,000 retiring units and both forced & planned outages) 51,000 49,000 47,000 45,000 2004 2005 2006 2007 2008 2009 2010 Source: California Energy Commission Electricity Demand and Supply Outlook, Assembly Utilities and Commerce Committee, January 15, 2004. 05/06/2004 Year
SCE 2004 Projected Power Procurement Portfolio NOTE: Percentages based on SCE’s January 2004 forecast, 2003 GRC Request, and 2004 DWR Interim Revenue Requirement Decision (D.04-01-028). 05/06/2004
SCE’s Current1 Power Content Label 1 April 2004 Bill Insert. 2 Small hydroelectric includes facilities 30MW. 05/06/2004
SCE’s View On Distributed Generation • SCE supports cost-effective customer choice • Rate designs should not distort customer DG choices • Interconnection process should be simple and inexpensive, consistent with ensuring adequate reliability, protection for utility assets and public/employee safety • Subsidies should be explicit, and consistent with California’s adopted policy objectives • SCE utilizes DG as a distribution planning option 05/06/2004
Reliable Electric Service Act of 2004AB 2006 (Nuñez) • Creates a clear, durable regulatory framework to stimulate much needed investment in efficient, cost-effective, environmentally sustainable supply and demand resources • Affirms the utility obligation to provide reliable, reasonably priced electric service • Provides for the recovery of reasonable investments • Stabilizes the customer base (core / non-core) • Resource adequacy requirements and public policy preferences apply equally to all load serving entities • Integrated resource investment plan • Resource selection process to achieve “best value” for customers 05/06/2004
Summary • Supply looks tight in the future • AB 2006 provides a durable regulatory framework for investment in our electrical infrastructure • SCE is committed to renewables and alternative sources of energy • Electricity is different 05/06/2004
Backup 05/06/2004
What’s on the Horizon? • New Economic Development Rate (EDR) Proposal • SCE 2003 General Rate Case • DWR Power Contracts 05/06/2004
Potential System Average Rate1 Impact of 2004 Rate Actions Post-PROACTRate Reduction08/01/2003 2004 Final DWR Rev Req’t 2003 GRC Phase IIImpacts Vary 2 – 3% 2003 GRC Phase I and ERRA 2004 InterimDWR Rev Req’t +2 to 3%2 1 Impacts shown are estimates for Bundled Service Customers. Actual rates will depend on market conditions and actions by the California Public Utilities Commission (CPUC).2 Estimated System Average Increase, based on 2004 Sales Forecast. 05/06/2004