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• Utilities Balk at Order to Remove Joint & Several Liability Clause from Tariffs
• Critical Agreements Vetted, Get the Nod
• San Joaquin Valley Power Authority Appoints New Officers
• Summer Grid Outlook Shows Continued Reliance on Conservation
• Students Race Solar Cars and Learn about Renewable Energy

Utilities Balk at Order to Remove Joint & Several Liability Clause from Tariffs

Just a few weeks after the San Joaquin Valley Power Authority (SJVPA) received a favorable decision from the California Public Utilities Commission (CPUC) clearing the way to move forward with Community Choice, Pacific Gas and Electric Company (PG&E) and Southern California Edison Company (SCE) petitioned the CPUC for a rehearing on the decision, which ordered the utilities to remove joint and several liability from their tariffs.

The original disagreement focused on whether or not the utilities had the right to insert what is referred to as "Section 20" into their tariffs, in effect unilaterally imposing joint and several liability on the members of a community choice aggregation (CCA) joint powers agency, such as SJVPA.

SJVPA's main concern with Section 20 is that it impeded the authority and rights of local government agencies under California law to make such joint powers agencies - not its members - solely responsible for the obligations of the agencies.

Under California law, local governments have broad discretion in how a joint powers authority (JPA) manages risk and liabilities. PG&E and SCE want to limit that discretion, which allows cities and counties to manage risk at the JPA level and not have it become the obligations of individual members of the JPA.

SJVPA filed a response in June to the utilities' request for rehearing with the CPUC stating that "the rehearing application lacks substance and is undeniably an attempt to sow ambiguity and uncertainty concerning an otherwise clear and final decision." In its response, the SJVPA requested that the CPUC move to issue a rehearing decision as soon as reasonably practicable.

Critical Agreements Vetted, Get the Nod

Earlier this year, key agreements drafted by KRCD and Citigroup Energy Inc. regarding full electricity requirements power supply were released for review by the San Joaquin Valley Power Authority.

As the local governing body for Community Choice, the power authority held three public hearings: February 28 in Kingsburg, March 27 in Clovis and April 24 in Hanford.

At each hearing, KRCD General Manager David Orth provided an overview of the key features of the Electric Supply Agreement (ESA) and Electricity Remarketing Agreement (ERA) and discussed several aspects of the ESA in detail. Included were the economic benefits to the region, certainties provided by the contract, market and regulatory uncertainties, administrative cost increases, impacts of new members, other costs and benefits.

Orth also explained current rate issues relative to Pacific Gas and Electric Company (PG&E) and Southern California Edison Company (SCE) and addressed questions and concerns that were raised. SCE provided comments on the ESA at the first public hearing held in February, whereas PG&E sent an email and fax to power authority members one hour prior to the last public meeting with its comments relating to the ESA.

Members of the board discussed various elements of the ESA and received clarification from staff regarding the 5 percent reduction in generation rates charged to power authority customers, the concept of rate stabilization reserves and the benefits of local control.

After three public hearings, the SJVPA board of directors referred the final vetting of the agreements to the executive committee for consideration pursuant to Section 8.2.3 of the Power Services Agreement (PSA) that they meet the financial objectives of the Community Choice program.

At the April 29th executive committee meeting, Orth addressed PG&E's recent analysis of the ESA and pointed out that many of PG&E's comments had already been addressed in staff reports and supplemental analysis provided in February, plus at each of the three public hearings.

After Orth addressed potential risks and strategies to mitigate those risks, he recommended a 3-step approval process:

• Step 1 - Approve as to form, subject to finalization of Schedule H (costs) and Exhibit D (power resources)
• Step 2 - Approve final Schedule H and Exhibit D
• Step 3 - Authorize KRCD to sign the ESA and ERA

Chair Haglund called for a vote on the motion to approve the ESA and ERA as to form, subject to the finalization of Schedule H and Exhibit D, and it passed unanimously.

San Joaquin Valley Power Authority Appoints New Officers

At the May 22nd board meeting, the San Joaquin Valley Power Authority's board of directors appointed Ron Manfredi, director for Kerman, as the new chair to fill the vacancy left by Thomas Haglund's move from Hanford to become Gilroy's city manager. Robert Ford, director for Clovis, was appointed vice chair.

"Educating the public about Community Choice is a top priority for our board," said newly appointed Chair Manfredi. "Community Choice will give residents and businesses within our 12 municipalities the opportunity, for the first time, to choose who will provide us with electricity."

Summer Grid Outlook Shows Continued Reliance on Conservation

Air conditioners are likely to keep humming this summer without interruption, but the California Independent System Operator (ISO) says conservation will continue to play a role in managing reliability.

The transmission operator issued its annual summer assessment for electricity at the end of April, describing a wide range of possible supply and demand conditions this summer. The report finds that, in most scenarios, there will be adequate electricity supplies to maintain reliability of the power grid.

The California ISO 2008 Summer Assessment for 2008 is based on a range of scenarios using three main variables: demand for electricity, plant outage rates, and import levels. All three of these variables can change, sometimes dramatically, from one hour to the next during intense heat waves.

"California is also transitioning to a vastly different power grid in response to important environmental goals that are helping to 'green the grid'. The transition requires both careful management and greater public understanding of the benefits and challenges," said California ISO President and CEO Yakout Mansour.

Scenario testing, analyzing how the grid is likely to respond during extreme conditions, helps the ISO control room operators, the industry and consumers prepare for measures that will minimize the impacts of heat waves. The state Resource Adequacy program sets aggressive procurement targets for load serving entities, both the year ahead and the month ahead, to ensure enough supply is available most of the time.

Supply is adequate to handle a broad range of operating conditions. But, as is usually the case, system operations will be challenged at the extremes. Conservation and demand response programs will continue to be important this summer and will have an increasingly important role in the years to come.

"Our job is to maintain reliability through all possible conditions, if possible, and minimize the impact at the extremes," said Mansour. "When the weather heats up, we have many tools in our toolbox to call upon. Voluntary conservation is just one of those tools. There is never a good time to waste electricity and managing energy use is good for the grid, good for the environment, and good for your monthly utility bill, too."

The California ISO is once again partnering with Flex Your Power NOW! to alert consumers when energy demand is climbing. "Flex Alerts" are issued 24 to 48 hours in advance of when conservation is needed.

Flex Your Power NOW!

At Home:

• Set your thermostat at 78-80 when home, 85 or off when away.
• Avoid using appliances during the peak usage period 4-6 p.m.
• Turn off your pool pump and avoid outdoor watering during peak periods.

At Work:

• Turn off computer monitor when you are away from your desk.
• Turn off half the overhead lighting.
• Set the thermostat at 78-80.

Additional conservation tips and continuous system condition updates are available at www.caiso.com under Today's Outlook and the California Flex Your Power website at www.fypower.org.

Students Race Solar Cars and Learn about Renewable Energy

Over 600 Alta Sierra Intermediate students raced solar cars that they assembled as part of their science curriculum. The races took place on May 12-14 at the tennis courts on campus.

Teams of three designed and built model cars powered by solar photovoltaic cells that convert the sun's energy into electricity. Students were also asked to consider such critical factors as aerodynamic drag, rolling resistance, weight and drive train when designing their cars for speed and reliability.

Awards were given to the fastest five cars and to the five best designed cars based on technical merit, craftsmanship and innovation.

The solar car kits were donated by the Kings River Conservation District and Cleantech America, Inc. Additional support and coordination was provided by Buchanan High School's new energy program.

Last summer, KRCD and Cleantech America announced that they have entered into a multi-year agreement for providing 80 megawatts of utility-scale solar power to the San Joaquin Valley Power Authority's Community Choice program. The solar farm will generate enough electricity to power approximately 20,800 homes.

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