1. California Energy Action Plan July 17, 20031 Energy Action Plan Natural Gas Actions Status Report David Maul California Energy Commission Staff And Richard Myers California Public Utilities Commission Staff

2. California Energy Action Plan July 17, 20032 EAP Goals for Natural Gas Reduce vulnerability to volatile spot market: Identify critically needed facilities Monitor markets Evaluate net benefits of new supply options Support longer term contracts as needed

3. California Energy Action Plan July 17, 20033 Current NG Market Environment Short term: –Manage volatile market prices –Refill NG storage facilities –Encourage conservation and energy efficiency investments Long term: –Develop additional infrastructure –Secure additional supplies at reasonable and stable prices –Reduce reliance on NG electric generation –Improve firm pipeline capacity rights

4. California Energy Action Plan July 17, 20034 CPUC Activities Updating 2001 infrastructure assessment for the period 2004-2008 by this fall. Examining gas price increase of 2000-2001. Funding $275 million in energy efficiency measures Implementing RPS to reduce reliance on natural gas-fired electric generation Evaluating Gas Utility Resource Plans for needed enhancements

5. California Energy Action Plan July 17, 20035 CPUC Activities Establishing rates for natural gas services Reviewing California market structure Representing California before FERC –Investigation of gas price indices –El Paso Market Manipulation settlement –Capacity Allocation proceedings

6. California Energy Action Plan July 17, 20036 CEC Activities Prepare NG Price Spike Reports (Jointly with CPUC) Coordinate with FERC –Price Spike –LNG –Infrastructure Enhance California NG production Seek additional sources of NG supply –Canada –Alaska LNG –Wyoming LNG White Paper LNG safety assessment Governor’s Natural Gas Working Group

7. California Energy Action Plan July 17, 20037 Governor’s Natural Gas Working Group Agencies: ARB, CEC, CPUC, DGS, DOGGR, DWR, OPR, Res Ag, SLC Activities: –Facilitate permitting for: Kern River, Kramer Junction Lateral North Baja Pipeline –Monthly reports on Demand/Supply/Price –Investigate off-spec gas issue –LNG Interagency Permitting Working Group –Monitor regulatory proceedings

8. California Energy Action Plan July 17, 20038 CEC Integrated Energy Policy Report (IEPR) Activities: –Staff NG Market Assessment –IEPR Hearing on Electricity and NG Infrastructure –IEPR Hearing on NG –Upcoming Electricity and NG Report –Targeted workshops –Risk analysis

9. California Energy Action Plan July 17, 20039 CEC IEPR Issues to investigate further: –Data quality—national issue –NG storage capacity and use –Long term infrastructure adequacy –LNG supplies and facilities—cost, safety, environmental issues –Longer term NG contracts—portfolio approach –Back up fuel needs

10. California Energy Action Plan July 17, 200310 Progress Toward EAP Goals Current activities: –NG and electricity assessments –Energy efficiency standards: buildings and appliances –Renewables Additional activities needed: –Accelerate energy efficiency programs –Consider enhanced “Flex Your Power” campaign –Support additional renewables development –Continue evaluating need for LNG –Investigate need for longer term NG contracts –Continue joint progress on activities