1. California Energy Action Plan December 7, 2004 Energy Report: 2004 and 2005 Overview December 7, 2004

2. California Energy Action Plan December 7, 20041 Energy Report - Senate Bill 1389 Integrated policy development The Energy Commission “shall use [its] assessments and forecasts to develop energy policies that conserve resources, protect the environment, ensure energy reliability, enhance the state’s economy, and protect public health and safety….” (Pub. Res. Code 25301(a)) “The integrated energy policy report shall present policy recommendations based on an in depth and integrated analysis of the most current and pressing energy issues facing the state….” (Pub. Res. Code 25302(b)) Timing A policy report … will be adopted by the Energy Commission every two years, and a supplement to the previous energy report on specific issues will be adopted in the off years.

3. California Energy Action Plan December 7, 20042 Energy Report - Senate Bill 1389 (continued) Common information base The state’s energy agencies will use the information and analyses contained in the report to carry out their energy-related duties. (Pub. Res. Code 25302(f)) Basis for future energy activities “For the purpose of ensuring consistency in the underlying information that forms the foundation of energy policies and decisions affecting the state, those entities shall carry out their energy-related duties and responsibilities based upon the information and analyses contained in the report….” (Pub. Res. Code 25302(f))

4. California Energy Action Plan December 7, 20043 2004 Energy Report Update Approved November 3, 2004 Areas of focus:  Aging Power Plant Operations and Retirements  Upgrading California’s Electric Transmission System  Accelerated Renewable Energy Development

5. California Energy Action Plan December 7, 20044 Aging Power Plants Demand response: All utilities should work aggressively to attain the 2007 statewide goal of 7% peak demand reduction. Capacity market: The energy agencies should work together to develop a capacity market. Supply management: The energy agencies and all utilities should enhance supply management by:  Better coordinating planning and reserve sharing  Alleviating transmission barriers to sharing generation reserves  Pursuing cost effective seasonal exchanges with the Pacific Northwest

6. California Energy Action Plan December 7, 20045 Transmission Strategic transmission planning: Per SB 1565, the CEC should establish a comprehensive statewide transmission planning process with the CPUC, the CA ISO and other parties to:  Assess statewide transmission needs for reliability, economic projects and support for renewable portfolio standard goals  Examine non-wires alternatives to transmission  Approve transmission infrastructure investments that can move into permitting  Examine the right-of-way needs for future transmission projects and designate and conduct environmental reviews of needed corridors  Assess transmission costs and benefits that recognize the 30-50 year useful life of transmission assets, incorporate methods to assess the long-term strategic benefits of transmission and use an appropriate social discount rate

7. California Energy Action Plan December 7, 20046 Renewables Renewable Portfolio Standard: The state should enact legislation to:  Codify that all retail suppliers of electricity, including large publicly owned electric utilities meet the accelerated eligible renewable goal of 20% by 2010 and 33% by 2020.  Allow the CPUC to require SCE to purchase at least 1 percent of additional renewable energy per year to reach 25% by 2010, 30% by 2015, and 35% by 2020. Wind resources: Wind turbines should be repowered to improve efficiency and prevent bird deaths. Solar roofs: Key principles to guide implementation of the Governor’s million solar roofs proposal.

8. California Energy Action Plan December 7, 20047 2005 Energy Report Status and Trends  Transportation fuels  Electricity  Natural gas Issues  Preferred energy loading order  Energy and environment  Global climate change  California-Baja California border issues  Water / energy interactions

9. California Energy Action Plan December 7, 20048 Statewide Coordination Objectives  Forum for consideration of statewide and regional issues  Development of integrated statewide policy  Address parties not under jurisdiction of any single agency Challenge:  Many of the issues of interest for the 2005 Energy Report are being considered in other proceedings.  To avoid duplication of effort, information from other proceedings and sources will be incorporated into the record for the Energy Report.

10. California Energy Action Plan December 7, 20049 Statewide Coordination (Continued) CEC’s Energy Report process will: estimate need for resource additions, evaluate policies, and recommend appropriate resource strategies

11. California Energy Action Plan December 7, 200410 Statewide Coordination (Continued) CPUC’s procurement process will: produce IOU-specific procurement plans, require competitive generation solicitations, incorporate needed transmission upgrades, and guide preferred resource acquisition to ensure resource adequacy on a biennial cycle beginning in 2006.

12. California Energy Action Plan December 7, 200411 Statewide Coordination ( Continued) Cal ISO’s Grid Planning Process will: receive information from the Energy Report and the procurement process prepare a comprehensive view for the CA ISO-controlled grid, and develop a project-specific set of preferred transmission projects.

13. California Energy Action Plan December 7, 200412 Proposed Framework and Schedule 20042005 SepNovJanMarMayJulSep Nov Workshops Analytic activities Staff papers and reports Development of 2005 Energy Rpt.

14. California Energy Action Plan December 7, 200413 Call for Participation  Not only does SB 1389 require collaboration with other entities, we believe this collaboration is essential, and we are taking every opportunity – including this one – to call for that participation  Active participation of interested and affected parties needed, including: –Workshops participation –Submission of data and comments –Development of independent analyses