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Comment 51 for Design Comments for the GHG Scoping Plan (sp-design-ws) - 1st Workshop.


First Name: richard
Last Name: dickinson
Email Address: radskier@hotmail.com
Affiliation: Water and Power Associates, Inc.

Subject: AB 32
Comment:
Mary Nichols, Chairperson					July 30, 2008
California Air Resources Board
1001 I Street, P.O. Box 2815
Sacramento, CA 95812

James Goldstene, Executive Director
California Air Resources Board
1001 I Street, P.O. Box 2815
Sacramento, CA 95812



Comments on the
California Climate Change Draft Scoping Plan
June 2008 Discussion Draft


The Los Angeles Water and Power Associates (not to be confused
with the City of Los Angeles Department of Water and Power) is
pleased to offer comments on the above titled Scoping Plan.  The
Los Angeles Water and Power Associates, Inc. (Associates) is a
nonprofit, independent, private organization, incorporated in1971
to inform and educate its members, public officials and the
general public on critical water and energy issues affecting the
citizens of Los Angeles, Southern California and the State of
California.  Its membership of approximately 300 is comprised of
representatives from private industry, education, municipal
service and media.

The Associates comments are general in nature and are provided to
invoke reasoned thought and a thorough development, on a rational
basis, of future proposals to address climate change.  We believe
Assembly Bill 32 goals to reach 1990 greenhouse gas emission
levels by 2020 are achievable with the participation of a
responsible energy community.

The Associates believe that the reliability of the California
electric system, e.g. the ability to provide electric energy when
and where it is required, needs to be fully vetted in this Scoping
Plan.  The displacement of the energy from base-loaded power
generation facilities with renewable energy can and is being
accomplished.  The closure or divestiture of base loaded
facilities is possible, but you must fully analzye the effects on
system reliability?  “Traditional” base-loaded facilities have the
ability to provide capacity, which is the ability to provide the
energy when it is needed “to keep the lights on.”  Most forms of
renewable energy do not have that attribute.  The Cap and Trade
proposal does not address reliability, and energy efficiency and
conservation will only incrementally help to reduce the need for
capacity.  Are new forms of energy storage, backup facilities or
other proposals on the horizon to provide the capacity?  A robust
electric system that will meet the objectives of AB 32, at
reasonable customer rates, will need to be valued in the economic
and emission benefit models.  The Scoping Plan needs to address
the reliability of California’s electric system to insure the
continued high level of service that Californian’s have been
accustomed to.

The Associates recommend that the Scoping Plan assess the issue of
fuel switching by Sector.  As in all planning efforts, it is
prudent to anticipate that not all Sectors identified in the
Scoping Plan will achieve the goals of AB 32 in the envisioned
time frame.  Some Sectors may achieve their allocation by fuel
switching, such as through electrification, thereby increasing the
requirements on the retail electricity providers.  This shift to
electricity, while providing substantial benefits, could strain a
utility’s ability to achieve its emission reduction goal. 
Addressing the potential burden that fuel switching by Sector will
place on electric utilities, in conjunction with addressing the
reliability of California’s electric system, will be integral to
the success of the plan.

The Associates support energy efficiency and conservation
programs, and we believe that they will continue to be
cornerstones in reducing future energy requirements and reducing
the need for new power plants.  The Associates offer the following
comments as a means to achieve the expectations of energy
efficiency and conservation.  Most of these programs are in place
and continue to be expanded.  They are, however, possibly the
softest and most unreliable elements in the draft.  Energy
efficiency and conservation programs are really a “power plant”. 
As such, they should be operated and maintained just as you would
any other power plant.  Once upfront funds are expended on
specific projects, mechanisms need to be in place, including funds
and staff, to ensure that the expected results are being met and
most importantly being maintained.  The expected results need to
be verified and not taken for granted based on industry norms or
name plate values.  If the Scoping Plan is to rely on these
programs to produce continued long term results, then they deserve
attention and accountability, including ongoing audits, to ensure
their success.

The Associates believe that publicly owned electric utilities that
have vertically integrated electric systems are uniquely positioned
to make decisions on how best to achieve the goals of AB 32.  This
can be accomplished through implementation of programs identified
in the Scoping Plan (aggressive RPS programs, purchasing of less
GHG emitting energy to displace existing resources) while
maintaining reliability.  However, the implementation of the Cap
and Trade program could be the most critical element that will
affect the success or failure of achieving the goal.  It is our
belief that the proceeds from an auction must be returned to the
utility that purchased the credits.  Any other distribution would
be no better than a redistribution of monies to others and would
jeopardize/frustrate the utility’s ability to fund the programs
necessary to achieve the GHG reduction goals.  It could be a
windfall for some and a disaster for others.  Estimates of the
potential for misdirected monies could exceed several hundreds of
millions of dollars per year and potentially add significantly to
its customers’ electric bill.  Finally, if a Cap and Trade program
is necessary to achieve the desired results, then the Associates
would support the West wide approach, in lieu of a California only
approach, as identified in the Scoping Plan. Cap and Trade
parameters and all related assumptions need to be thoroughly
studied and explained because they could produce serious
unintended consequences for the public.

In conjunction with a proposed Cap and Trade program, the “first
deliverer” approach to determine the carbon reduction requirements
for publicly owned vertically integrated utilities is not an
appropriate means to determine the type of energy that will be
used in California (California only program).  If reductions in
carbon are required by a specific utility, then it should be up to
that utility to make the decision on the type of energy and source
that will be needed to meet their obligations.  They will make an
informed assessment of their needs that will minimize the costs to
their customers, and make decisions accordingly.  However,
California’s investor owned utilities are different in that they
divested of most of their electric power generating facilities as
part of the State’s deregulation process.  They now purchase a
substantial portion of their energy requirements from the
wholesale market and may not know for certain the source of their
energy.  Therefore, to resolve potential conflicts, it may be
appropriate to develop a separate tracking system to allow
publicly owned utilities to use a “retail provider” approach for
the means to determine their carbon reduction requirements.  And,
as appropriate, establish a separate methodology for privately
owned utilities to track their carbon reduction requirements.

The draft plan recognizes the high use of energy for pumping and
conveying water throughout California.  With the shortages of
water in the west and a renewed interest in reclaimed water, the
draft plan also needs to assess the increased use of energy for
reclaimed water.  Most facilities that will be used for processing
reclaimed water are located at the down stream end of most
collection systems.  Since these systems operate mainly by gravity
flow, any new reclamation facilities will require significant
energy resources for their processes and for placement back into
the water delivery system.

In conclusion, The Associates support the efforts of the
California Air Resources Board in developing a comprehensive plan
to address Climate Change and hope our comments will be helpful in
your efforts.  The electricity sector has an important role in
achieving the goals of AB 32 and with appropriate consideration
for the unique attributes of each utility, whether public or
private, Californians can look to a brighter future.

Sincerely,

Richard Dickinson
President,
Los Angeles Water and Power Associates, Inc.


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Date and Time Comment Was Submitted: 2008-07-31 21:16:09



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