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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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