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• Community Choice Approaches Last Hurdles
• Community Choice Takes Hold in the State
• Peak Demand on the Rise
• New Generation and Transmission Projects Proposed for the Valley

Community Choice Approaches Last Hurdles

Eleven cities and one county, which make up the San Joaquin Valley Power Authority, have been working with the Kings River Conservation District for over five years to develop a Community Choice program in the central San Joaquin Valley, giving residents and businesses the option to lower their electrical bills.

Although much has been accomplished to bring Community Choice close to the point of implementation, the program will not start until certain regulatory issues are resolved and financial objectives are met.

A key regulatory issue is the resolution of whether joint and several liability applies to the members of the San Joaquin Valley Power Authority. If it does, each member would be liable for the debts and obligations of the power authority's community choice program.

In May of this year, Pacific Gas and Electric Company and Southern California Edison jointly filed a request for rehearing the California Public Utilities Commission's April 24 decision to remove a mandatory joint and several liability provision from the service agreements that the San Joaquin Valley Power Authority must sign with the utilities.

On September 4, the CPUC issued its decision to deny the utilities' rehearing application and instead modify the language of the contested April 24 decision. As it now stands, the issue of joint and several liability will need to be considered on a case-by-case basis as part of the overall creditworthiness review of a particular joint powers agency rather than be a general rule that applies to all joint powers agencies pursuing community choice aggregation. The power authority creditworthiness review is underway.

In addition, the continued uncertainty in the energy markets is making it difficult to secure contracts at costs that allow the power authority to meet its financial objectives. The San Joaquin Valley Power Authority has established financial objectives including the intent to offer an initial 5 percent cost savings on the generation component of the bill. Furthermore, the cost of power purchased under the initial contract must not increase by more than 2 percent per year through 2015.

In light of this and the regulatory delays, the power authority board of directors took action at the October 2 board meeting to extend for one year the timeframe for Kings River Conservation District to execute an electric supply agreement. The deadline for execution was originally set for October 15 of this year.

Community Choice Takes Hold in the State

Many communities throughout the state are considering community choice aggregation as a viable option to provide choice and local control when it comes to energy issues. While the San Joaquin Valley Power Authority finds itself furthest along in this endeavor, other cities and counties are in various stages of implementing community choice aggregation.

Marin County and eleven cities in the area are currently considering the formation of a joint powers authority similar to the San Joaquin Valley Power Authority, which would buy renewable power directly for their residents and businesses. More details about this effort can be found at Marin Clean Energy and Marin Community Energy.

Other communities that are investigating community choice aggregation include Berkeley, Beverly Hills, Emeryville, Davis, Los Angeles County, Moreno Valley, Oakland, Pleasanton, San Luis Obispo, Santa Barbara, the city and county of San Francisco, Sonoma County, Victorville and West Hollywood.

Like the San Joaquin Valley Power Authority, many of these communities see community choice aggregation as an opportunity to be part of the solution of providing reliable, clean energy to their residents and businesses.

Peak Demand on the Rise

California's population of over 37 million has doubled since 1965, a growth rate faster than any other developed region in the world. The State Department of Finance predicts that California will add another 7 million people in the next dozen years, moving towards 60 million residents by 2050.

The quickly growing inland areas are driving the demand for more electricity due to the hotter climate requiring more air conditioning than the coastal zone. This increases the state's peak electricity use even faster than it pushes the overall demand for electricity. According to the California Energy Commission's 2007 Integrated Energy Policy Report, statewide annual peak demand is projected to grow, on average, 850 megawatts per year for the next 10 years.

While more generation resources are certainly needed to meet increasing demand, improvements in how efficiently Californians use electricity have helped to offset growth so that the per capita use has grown very slowly. Building and appliance standards have offset rising consumption from the increase in the number of different types of electronic equipment in homes and businesses.

The growth in peak demand is somewhat offset by projected increases in the electricity provided by self-generation, reflecting the effects of the California Solar Initiative, the New Solar Homes Partnership and the Self-Generation Incentive Program.

New Generation and Transmission Projects Proposed for the Valley

California must provide a reliable supply of electricity for its citizens. A significant disruption in the flow of electricity would bring the California economy to an abrupt standstill, costing hundreds of millions of dollars to the state as well as to individual commercial and personal enterprises.

The challenge we face is continuing to provide a quality environment and reliable energy services to support a world-class economy.

The following projects will help shore up a reliable supply while complying with strict environmental regulations.

Natural Gas-Fired Power Plants

Natural gas is cleaner than other petroleum-based fuels and has become California's fuel of choice for most new power plants because of its environmental benefits. It now provides more than 41 percent of the state's electricity.

Currently there are six natural gas power plants that are in various stages of development in the San Joaquin Valley.

Capturing Carbon Dioxide

Clean Energy Systems (CES) has proposed a 50-megawatt power plant in Kern County that will not emit any of the gases that cause smog or are believed to lead to global warming.

The Zero Emissions Power Plant (ZEPP-1) will use pure oxygen rather than air, effectively eliminating formation of nitrogen oxides (NOx). Like conventional power plants, the CES project produces carbon dioxide, so the company found a way to capture those gases and sequester them under 7,000 feet of rock about 20 miles north of Bakersfield.

That makes the plant - in the eyes of the California Energy Commission - an "ultraclean" operation that is essentially a zero-emission fossil fuel power plant. While the project will use natural gas for fuel, the same technology could eventually use methane produced by biomass or urban waste.

The nation's first industrial-scale power plant utilizing carbon capture and sequestration has been proposed by Hydrogen Energy International LLC. The facility will make hydrogen from petroleum coke (a by-product of the refining process) which will be used to generate 390 megawatts of base-load electricity. The resulting carbon dioxide will be captured and used to increase the efficiency of oil drilling in the nearby Elk Hills oil field.

Solar Projects

Solar power is attractive because its output peaks during the afternoon, when electrical demand is at its highest. Another factor contributing to the intense interest in solar is the fact that technologies that harness the sun's power have reached a point where they can compete in the commercial power market. Until now, solar panels have been largely relegated to small-scale residential units.

Cleantech America Inc. is developing two large photovoltaic (PV) solar projects in the central San Joaquin Valley. CalRENEW-1 will be located in Fresno County near PG&E's Mendota Substation and will add 5 megawatts of renewable energy to PG&E's portfolio. Cleantech America is also pursuing an 80-megawatt utility-scale solar project to provide energy to the San Joaquin Valley Power Authority's Community Choice program.

San Joaquin Solar LLC recently announced that it will be developing a solar thermal-biofuel hybrid power plant located near Coalinga. The plant's design will allow it to do something not typically associated with solar power. It will keep running, and generating power, at night. The biofuel will be supplied from a combination of locally produced agricultural wastes, green wastes and livestock manure.

Three solar projects have been proposed for the eastern part of San Luis Obispo County near the Kern County line in an area called California Valley. The area contains nonprime farmland that can be converted to solar projects without significantly reducing the county's agricultural output. It's near transmission lines and PG&E's Carrizo Plain Substation, making it easy to plug the solar farms into the electrical grid.

Utility-scale PV solar projects, such as California Solar Ranch and Topaz Solar Farm, feature photovoltaic solar modules, which convert sunlight directly into electricity and produce the greatest amounts of power during the afternoons, when electricity demand is high.

Solar thermal plants, like Carrizo Energy Solar Farm, don't draw energy directly from the sun. Instead, they use curved mirrors to focus sunlight on liquid-filled tubes. The concentrated light heats the liquid, which is used to generate steam and run a turbine. This solar thermal power plant will use groundwater, which will be recycled within the plant. After spinning the turbines, the water will be cooled through a system much like a car radiator, with the ambient air carrying off the heat. The water will then flow back to the boilers to be turned into steam once again.

Transmission Upgrades for the Valley

The San Joaquin Valley is one of the fastest growing regions in California. This increased growth has resulted in an increased demand for electricity. Existing transmission lines are operating at or near their limits and will be unable to deliver sufficient electricity to safely and reliably serve this increased demand.

The Central California Clean Energy Transmission Project (C3ETP) (formerly known as the Midway-Gregg Project) has been proposed by Pacific Gas and Electric Company (PG&E). The C3ETP involves construction of a new 500-kV double-circuit tower line (DCTL) from the Midway 500-kV station to the Fresno area. For the 500-kV line, the original route was identified as "Midway-Gregg". However, a more preferred route, "Midway-E2," has been identified with the proposed 500-kV line terminating at a new 500/230-kV substation named "E2."

The California Independent System Operator (CAISO) has conducted a preliminary economic planning study for the Midway-E2 500-kV line and is expanding the study scope to evaluate more transmission alternatives to compare with the Midway-E2 500-kV proposal. The new transmission alternatives being studied include additional 500-kV alternatives, a number of 230-kV alternatives and a plan to establish an interconnection between PG&E and Southern California Edison (SCE) in the Fresno-Big Creek area. CAISO recently conducted stakeholder meetings for this project and anticipate that more stakeholder meetings will be conducted during the course of this project. Additional information related to the C3ETP is available through the CAISO website.

SCE is proposing to construct the San Joaquin Cross Valley Loop Project (SJXVL), which consists of the construction of a new 19-mile double-circuit 220-kilovolt transmission line. This proposed line would connect to an existing 220-kilovolt line, which would allow SCE to deliver additional power from SCE's Big Creek hydroelectric facilities in the Sierra Nevada Mountains into the Rector Substation located southeast of Visalia.

The California Public Utilities Commission (CPUC) is currently in the process of preparing the Environmental Impact Report (EIR). In order for the public and regulatory agencies to have an opportunity to ask questions and submit comments on the scope of the EIR, public meetings were held on September 17 in Farmersville and September 18 in Woodlake. Additional information related to the San Joaquin Cross Valley Loop Project is available through the CPUC website.

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