Community Choice Aggregation: A Workshop for Local Government Leaders and Staff. PG&E and Climate Change

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1 10/15/07 12:56 Community Choice Aggregation: A Workshop for Local Government Leaders and Staff Presented by John Newman and Hal La Flash October 10, 2007 Petaluma, CA PG&E and Climate Change We are committed to: minimizing the greenhouse gas emissions from our operations educating communities about ways to reduce greenhouse gas emissions partnering with communities to meet greenhouse gas reduction goals State and national environmental leadership includes: Early supporter of AB 32 at state level Founding member of the U.S. Climate Action Partnership Testified to U.S. Senate twice at request of Sen. Boxer Moving our industry to change the way it has operated Promoting mandatory GHG regulations 1 1

2 10/15/07 12:56 PG&E s Stance on Climate Change I believe climate change and its implications is one of the most pressing issues of our time. It is clear that the link between greenhouse gas emissions and the Earth s warming climate is convincing, the potential consequences serious and the need for action urgent. The U.S. has a tremendous capacity for innovation and it is clear that we have the human capital to develop the solutions. By signaling, as a nation, that we are serious about making progress on clean energy, we can stimulate investment and engage our best and brightest minds in this effort. The longer we wait, the costlier the solutions will likely become. On the other hand, by acting now, we preserve valuable response options. We narrow the uncertainties. And we avoid the economic and social dislocation of drastic changes later. Testimony of Peter A. Darbee, Chairman, CEO and President of PG&E Corporation, before the U.S. Senate Environment and Public Works Committee, February 13, 2007 and June 28, Commitment to Energy Efficiency Key to California Success 14,000 Per Per Capita Capita Electricity Electricity Consumption Use KWh 12,000 10,000 8,000 6,000 4,000 2, US CA Western Europe Source: California Energy Commission 3 2

3 10/15/07 12: California s Gross GHG Emissions Trend Million metric tons of CO2 Equivalent % 10% 21% 8% 8% % California s Greenhouse Gas Footprint U.S. Power Plants The size of each circle represents the quantity of emissions in million tons 15 million tons 4 million tons Coal Gas Oil Source: MJ Bradley and Associates 5 3

4 10/15/07 12:56 How We Rate: Benchmarking PG&E s GHG Emissions Greenhouse Gas Emissions for Delivered Electricity * Source: U.S. Environmental Protection Agency egrid Version 2.1 (updated April 2007 and based on 2004 data) ** PG&E s 2005 emissions rate was independently certified and registered with the California Climate Action Registry 6 PG&E s Diversified Resource Portfolio 2006 Electric Energy Deliveries by Technology Fossil, 42% Fossil breakdown: 40% natural gas, 1% coal, 1% other Nuclear, 24% Large Hydro, 22% Wind, >1% Small Hydro, 4% Geothermal, 2% Bio-Energy, 4% Solar, <1% RPS Renewable 12% 7 4

5 10/15/07 12:56 Aggressive RPS Contracting Annual Cumulative MW RPS Contracts: Geothermal has been a major contributor to PG&E s RPS purchases. # MW % of MW % of MWh Geothermal % 51-57% Wind % 14-17% Bioenergy % 10% Small Hydro 2 1 <1% <1% Solar % 19-22% 29 1,516-1,

6 Projected RPS Deliveries GWhs % 13% 16% 19% 20% 22% 23% 25% 26% 20% Future Procurement New RPS Contracts Pre Contracts Year 10 New Transmission Investment is Necessary Ocean 3 Wind Wind Small Hydro Geothermal Wind Wind Geothermal 2 Bioenergy Transmission Line Project Central California Clean Energy Transmission (previously Midway- Gregg) Vaca Dixon Contra Costa Upgrade California Oregon Upgrade B.C. Renewable Line (possible) Renewable Resources Geothermal and wind resources to the south Solano County wind resources Renewable resources from the Pacific Northwest Proposed to bring British Columbia and NW renewable resource energy to California Wind Solar Geothermal 11 6

7 RPS Procurement Process PG&E conducts annual renewable RFOs, targeting 1 2% increases in supply each year Projects are evaluated on: Market value Creditworthiness Transmission availability Portfolio fit Commercial and technical feasibility Bi-lateral Contracts allows PG&E to negotiate unique renewable opportunities outside the RFO process. Projects are evaluated against the same metrics The utility continually examines new opportunities for utility ownership both via the RFO process and outside it. 12 Clean energy can't meet growing demand By Paul Davidson, USA TODAY October 4, 2007 Demand for renewa ble energy is outstripping supply, pushing up prices and raising the specter that some states may not meet clean -energy mandates. Behind the shortage are the growing number of states requiring utilities to include clean energy in their power mix, as well a s surging demand from big businesses. By 2010, clean -energy demand will outpace generation by at least 37% unless a rush of projects is built, says a report due out next week from the National Renewable Energy Lab. 13 7

8 DSIRE: Renewables Portfolio Standards September *WA: 15% by 2020 OR: 25% by 2025 (large utilities) 5% - 10% by 2025 (smaller utilities) CA: 20% by 2010 *NV: 20% by 2015 AZ: 15% by 2025 MN: 25% by 2025 (Xcel: 30% by 2020) ND: 10% by 2015 MT: 15% by 2015 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) IA: 105 MW CO: 20% by 2020 (IOUs) *10% by 2020 (co-ops & large munis) WI: requirement varies by utility; 10% by 2015 goal IL: 25% by 2025 MO: 11% by 2020 VT: RE meets load growth by 2012 NC: 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) ME: 30% by % by new RE NH: 23.8% in 2025 MA: 4% by % annual increase RI: 16% by 2020 CT: 23% by 2020 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18% by 2020 MD: 9.5% in 2022 *DE: 20% by 2019 DC: 11% by 2022 *VA: 12% by 2022 HI: 20% by 2020 TX: 5,880 MW by 2015 Minimum solar or customer-sited RE requirement * Increased credit for solar or customer-sited RE PA: 8% Tier I / 10% Tier II (includes non-renewables) State RPS State Goal Solar water heating eligible Community Choice Aggregation (CCA) PG&E supports our customers rights to choose alternate generation providers. We believe it is essential that elected officials and members of the public be allowed to make an informed choice and that CCA suppliers provide complete and accurate information so that elected officials and members of the public can make that choice. We are committed to looking after the best interests of our customers, both business and residential, and the CCA proposals we have seen so far pose significant risks to those customers. These risks include the very real prospects of higher rates, reduced supply reliability, higher greenhouse gas portfolio than today, and significant threats to public finances from offering CCA service. 15 8

9 CCA in Sonoma County: Risks, Issues and Uncertainties Cost Supply Financing Rates New Agency Opt-out Exit fee 16 Green Grants: Supporting the Community Sonoma County Climate Protection Campaign Sonoma County Conservation Council Fire Safe Sonoma Laguna de Santa Rosa Foundation Tour de Trees 17 9

10 Sonoma County Programs and Projects CFL give-aways ClimateSmart Energy Audits, Rebates and Incentives Decreasing Auto Exhaust Emissions Energy Reduction in Waste Water Treatment Energy Efficiency in Agriculture Clean Energy in Sonoma County 18 ClimateSmart Customers 19 10

11 Conclusion PG&E is committed to helping Sonoma County and customers throughout Northern California use less energy, reduce emissions and combat global warming. We encourage an intense evaluation of CCA to determine whether it will actually deliver the intended benefits. We encourage Sonoma County and its residents to work with us on new efforts or to expand participation in program currently available