Making Democracy Work

Energy Study

Letter RE: Russell City Energy Center

Attached is information about the upcoming State League Energy Study we will be doing. A study meeting is planned for some time in February to review the extensive materials on this important issue. All League members and others interested in the issue are welcome to attend.

The consensus questions the study group will be answering were published in the November VOTER. They are also included at the end of the update information below.

More information is included here which provides some additional background information.

If you want to view the full 80-page study document, it can be found on http://www.ca.lwv.org/lwvonly/studies/energy.

Energy Update 12/30/05

LWVC ENERGY POSITION UPDATE STUDY

We hope you will join our local League in reviewing, reaching consensus and advising the state League on updating its position on Energy. Our local League has a committee which is studying the topic and developing processes for member and public participation in this timely and important study.

BACKGROUND

Over the past two years, the LWVC Energy Update Study Committee has posted a series of four short papers designed to acquaint members and the public about the ways in which the electricity system in California functions. The articles point out the system weaknesses and strengths and the ways in which it is governed. These informative articles were reprinted in the December 2005 VOTER. The complete Energy Study Guide and those articles are on the LWVC website LWV California "lwvonly" -- for Members and LWVC Energy Study 2003-2006

HISTORY OF LWVC POSITION

Following the deregulation of California's electric system that resulted from passage of Assembly Bill 1890 in 1996, the League of Women Voters of California's (LWVC) interest in the topic of energy grew steadily. Since 1997, League committees have explored the implications of that legislation, and energy was chosen as a League Issue for Emphasis in 2001.
During the 2001-2003 biennium, League committee members became aware of the profound impact of the effort to introduce competition into what had been a regulated monopoly system, one in which exclusive service areas were granted and a single company provided generation, transmission and distribution of power for each area. At their recommendation, delegates to the 2003 LWVC convention called for a study to update our existing state Energy position. The LWVC's existing Energy position was last revised in 1980. It strongly supports conservation, efficiency and renewable sources of energy. But the public policy problems associated with a new electric system having both state regulation and a free market--a hybrid system--are different in kind and in magnitude from those addressed before. Major shifts in regulatory roles and jurisdictions have come about, with new and greater demands placed on the system infrastructure. Generating electricity is now a competitive business. The state's three major investor-owned utilities were required to sell most of their generating units to out-of-state utilities and merchant generators. Policy makers are grappling with the complexities of managing the resulting system. Hence the urgency of updating our position.

THE BIG PICTURE

California's economic vitality depends on affordable, reliable energy. Industry, agriculture and the water sector together use 30 percent of all the electricity consumed annually in the state. Over the past decade energy demand has been rising as a result of population growth and advances in technology. High-tech and manufacturing companies need a reliable source of energy, both natural gas and electricity, to ensure continuing increases in productivity. The state's economy has become increasingly dependent upon highly automated industries. Productivity gains of recent years have been accomplished through digital controls, advanced sensors and the effective integration of electronics into manufacturing operations. These advances, beneficial as they are, are susceptible to power quality problems (a lack of voltage stability). The smallest variation can disrupt a production or an information transfer process and cause significant economic losses. The most vulnerable industries include food processing, petrochemicals, pharmaceuticals, biotech, electronics and data processing. Interruptions not only cause momentary operational problems, they also may do fundamental damage to expensive equipment. California agriculture is worth about $30 billion in cash receipts annually. It, too, is highly dependent on electricity for irrigation as well as for food processing. The water sector also is electricity dependent, requiring electricity for conveyance, treatment and recycling. Moreover, the increasing need for treatment of brackish and salt water has placed additional pressures on the electric industry. Recent disruptions of electric service have produced a critical need for better protection against unexpected or prolonged supply disruptions. Electricity is not a luxury; it is a critical commodity for California and Californians.

NEXT STEPS

Building new power plants is not the only way to meet growing demand. Improved building standards and appliance and lighting efficiencies have contributed greatly to reducing per capita demands for electricity. In fact, conservation is the least expensive form of "new" energy. According to data for 2004 released by the CEC in July 2005, the incremental cost of saving a kilowatt-hour of electricity is about 2.6--cheaper than power from natural gas, wind, biomass and photovoltaics. Demand-side planning involves personal decisions--individuals taking responsibility for how and when they elect to use the available electricity. When a person sets an air-conditioner to 78 degrees rather than 74 degrees, the demand for peak power is notably reduced. If people decide to run their dishwashers and washing machines after 8 p.m., they also are placing less stress on the system. Since the peaking units that have to come on line in the middle of a hot summer day are much more expensive to operate than the more efficient baseload units, in coming years customers will be given financial incentives to shift power use to times of less demand. Residential and commercial meters will make it possible for users to know the cost of the power being produced--and sold to them+in 10 or 15 minute intervals. Thus, they will be able to affect their electric bills directly, as they make personal decisions regarding their power use. Because both the population and the economy of the state continue to grow, energy efficiency improvements and demand-side planning will not be adequate to meet future needs. CAISO tracks daily usage and had estimated the rate of growth in demand to be about 2 percent annually. However, growth in the southern part of the state came close to 4 percent in 2004. And in several southeastern counties, growth in demand has been close to 10 percent. It is clear that the challenges associated with keeping the lights on will continue with us for years to come.

LOCAL LEAGUE ENERGY POSTION UPDATE STUDY

The LWVEA Energy Study Committee has met to discuss process for presentation of information to members and the public and how we will reach consensus. The consensus questions were printed in the LWVEA November VOTER, and will be included on this website for those who did not see or keep a copy.
The tentative date picked for the study presentation and discussion is Saturday, February 20. The committee felt that it would be better to have an all day session than two half-day sessions.
If you would like to join the committee and/or get additional information on this study, please call Suzanne at (510) 538-9678.

Articles for the Energy Study

LWVC Consensus Questions