Implementing one of the most ambitious renewable energy standards in the country CALIFORNIA’S Implementing one of the most ambitious renewable energy standards in the country California Public Utilities Commission RENEWABLES PORTFOLIO STANDARD May 21, 2010

2 California’s RPS Goals Retail energy sellers must procure 20% renewable energy by 2010 –All RPS-obligated retail sellers* must procure an incremental 1% of retail sales per year until 2010 –20% obligation continues post-2010 RPS procurement compliance is measured in terms of electricity deliveries, not signed contracts California has set itself a further goal of 33% by 2020 *RPS-obligated entities include: Investor owned utilities, energy service providers, small and multi-jurisdictional utilities, and community choice aggregators. Municipal utilities (not regulated by the CPUC) have a voluntary RPS obligation.

3 Progress Towards 20% RPS CPUC has approved 142 contracts for over 12,500 MW of new and existing eligible renewable energy capacity (about 4,000 from out-of-state) –~7,000 MW of contracts under review, >2,000 MW from out-of-state 1049 MW of renewable energy has come online since the start of RPS program in 2003; 357 MW in 2009 IOUs are forecasted to achieve 20% RPS in the 2011 – 2012 timeframe Recent RPS solicitations have been robust: –Increased participation from larger and more experienced developers –Dramatic increase in number of solar PV bids –2009 RPS solicitation resulted in 100,000 GWh of bids –Shortlisted 2009 bids would meet half of IOUs’ 33% target

44 Progress Towards 20% RPS

5 Large IOUs – RPS Bids by Fuel Type 5

6 Renewable Energy Transmission Initiative Statewide collaborative effort to identify and facilitate the development of transmission to access the most cost-effective and environmentally-preferable renewable resources in CA and neighboring states Engages a broad range of stakeholders early in the planning process –Environmentalists, ratepayer advocates, tribal representatives –Transmission owners, load-serving entities, generation developers –CPUC, California Energy Commission, California Independent System Operator, local governments –Federal agencies and the military

7 Phase 1 Results (updated May 2010): CREZ and non- CREZ resources identified throughout the study area

8 Example: Southeast California Resource Area

9 Phase 1 Results (as updated in Phase 2)

10 RETI Phase 2A Results Report presents new, transparent, objective methodology for conceptual planning, in a process that supports active participation by diverse stakeholders. Base case scenario evaluates 102 network line segments: – 23 “Renewable Foundation” Lines – 13 “Renewable Delivery” Lines – 12 groups of “Renewable Collector” Lines, grouped by resource area Relative value of line segments to deliver renewable energy, and relative environmental concern assessed Foundation Lines, Delivery Lines recommended for immediate study at California ISO, POUs – “least regrets” additions to CA grid

11 RETI Phase 2 Conceptual Plan – Northern California

12 RETI Phase 2 Conceptual Plan – Southern California

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14 RETI’s Current Activities Coordinating with newly-formed California Transmission Planning Group –Provided two 33% RPS scenarios for CTPG planning –Rating environmental impact of new line segments identified by CTPG –CTPG’s statewide conceptual plan would be input to formal CAISO planning process under new CAISO proposal Supporting transmission corridor designation at CEC Coordinating with Desert Renewable Energy Conservation Plan, BLM Solar PEIS, other planning activities as appropriate Providing input into CPUC’s long-term resource planning work

15 CPUC’s bi-annual Long-Term Procurement Plan (LTPP) proceeding authorizes IOU procurement of conventional generation resources, with a 10-year planning horizon 2010 LTPP considers needs to 2020 – a 33% by 2020 RPS would have substantial implications for the amount and type of needed conventional generation CPUC staff using RETI and contracting activity to develop 3-5 renewable generation scenarios, representing possible 33% RPS futures in –IOUs would file LTPPs that include the conventional generation and transmission needed to accommodate these RPS scenarios. Decision on conventional need determination expected in late 2011, but it will not direct renewable procurement Long-Term Planning for Renewables 15

16 33% of 2020 Retail Sales Approach to 33% RPS Scenario Development 16 RPS generation under dev’t & contracted to CA by Q Discounted Core Cost- constrained Scenario Time- constrained Scenario Environmentally- constrained Scenario Trajectory Scenario RPS generation delivering to CA by Q GWh/yr

17 Umbrella LTPP proceeding considers EE, demand response, distributed generation, utility-scale renewables, fossil retirements, when determining overall system need –CPUC must consider these same things when assessing the need for individual transmission projects, pursuant to statute CPUC and California ISO signed MOU on May 13, 2010 –Agrees on certain elements of the ISO’s new proposed annual Transmission Planning Process –Commits to closer coordination between resource and transmission planning – ISO planning process considers scenarios provided by CPUC, CPUC gives substantial weight in the permitting process to projects consistent with ISO plan Coordinating Resource & Transmission Planning 17

18 Ensure timely transmission access to viable, priority generation resources – resource planning is not the core competency of California ISO/CTPG Smooth transmission need determination – CPUC can give greater deference to projects resulting from CAISO/CTPG planning if assumptions and alternatives considered there are consistent with LTPP Reducing risk of successful legal challenges to CPUC need determination – Inconsistency between resource assumptions adopted in LTPP (EE and DG levels, etc.) and those used to justify a transmission line leaves CPUC transmission need determination vulnerable Why is this coordination important? 18

19 More Information CPUC RPS Website: Long-Term Procurement Plan proceeding: Transmission Siting and Environmental Permitting: Questions: Anne Gillette, Renewable Procurement and Resource Planning Phone: Ken Lewis, Electric Transmission Planning, Permitting, and Reliability Phone:

20 Electric Generation and Transmission Permitting in California May 21, 2010 Ken Lewis Deputy Director Energy Division CPUC

21 Topics to be Discussed  Current Permitting Processes in California  Initiatives to Streamline CPUC Permitting  Renewable Transmission Permitting Status

22 Permitting Electric Generation  Conventional Thermal and Solar thermal Projects over 50 MW. California Energy Commission And BLM if on BLM controlled property  Conventional Thermal projects less than 50 MW, Wind, and Photovoltaic (PV) Projects County And BLM if on BLM controlled property

23 Permits needed to Construct Transmission lines  Construction Permits for Transmission Lines CPUC  Certificate of Public Convenience and Necessary (CPCN) For Project voltages greater than 200 kV  Permit To Construct (PTC) For project voltages less than 200 kV and greater than 50 kV If on federal controlled land – Need NEPA review and a Record of Decision (ROD)

24 Other Possible Permits Need From The State  State Water Resources Control Board (SWRCB)  California Department of Fish and Game (CDFG)  States Lands Commission  California Coastal Commission  CalEPA

25 Possible Federal Permits Required  Bureau of Land Management (BLM)  US Forrest Service (USFS)  United State Fish and Wildlife (USFW)  Army Corp of Engineers

26 Permit Streamlining Done in last Five Years  Pre-filing Review Work with the applicant during the development of their alternatives Collaborate on visual simulations  Run all the simulations only once Oversee biological and cultural surveys early  Try to do only once

27 CPUC Permitting Streamlining  Clarified Proponents Environmental Assessment (PEA) checklist  Earlier agency outreach to avoid misunderstandings and establish time lines  Pre-filing meetings with utility to get a complete application  Joint CPUC/ NEPA documents to avoid duplication  Use other state and federal agency’s or county environmental documents

28 CPUC Permitting Streamlining  Regular Meetings with all other Agencies together at one time: BLM, USFS, USF&W, State F&G, CalEPA, State Parks, States Land Commission, USEPA, Army Corp of Engineers, State Water Resources Control Board Out  Held web workshop with cities and counties  Regular meetings with the Utilities on what is and what is not working

29 CPUC Permitting That Needs Review and Possible Modification  The number of mitigation measures and their complexity

30 Renewable Transmission Applications Since 2004  Tehachapi One of four purely renewable projects filed with the CPUC since 2004 CPUC ordered SCE to file the first two CPCN’s for this project Project includes 11 transmission segments 4500 MW Construction of segments 1 – 3 completed November 2009 CPUC Permitting of segments 4 – 11 completed March 2009 Joint CPUC/USFS Project Waiting on USFS ROD for two segments Construction completion 2015

31 Renewable Transmission Applications Since 2004  SDG&E Sunrise Power Link Application filed December MW ~100 miles Joint CPUC/USFS Project CPCN approved December 2008 Waiting for USFS ROD A lot of NIMBY’s Construction completion 2012

32 Renewable Transmission Applications Since 2004  SCE Ivanpah Project Application filed May 2009 Estimated Approval December 2010 ~26 Miles 1400 MW Joint CPUC/BLM Project  SDG&E ECO Substation Application Filed August 2009 Estimated approval December MW of connected renewables Joint CPUC/BLM Project

33 Renewable Transmission Applications Since 2004  Devers-Palo Verde 2 (DPV2) Originally approved January 2007 on economics, but modified as a renewables interconnection project in November MW ~100 Miles Connection for renewable projects along the highway I10 corridor Construction complete in 2014

34 Renewable Energy Policy Group  Currently working on September 2010 CEC/BLM approval for 25 Wind and Solar projects in three CREZ’s to meet ARRA funding December 31, 2010 deadline Maximum capacity is 9153 MW for the 25 projects Probable capacity will be 20 projects and 7751 MW

35 Renewable Energy Policy Group  CAISO Phase II studies in June will identify future transmission cluster upgrades Could have impact on solar developers projects Large Generator Interconnection Agreements (LGIA)  Renewable Energy Action Team (REAT) established by Governor’s Executive Order of November 2008 Purpose is a one-stop shop for renewable permitting in the desert Draft Desert Renewable Energy Conservation Plan (DRECP) to be completed in December 2010 with a final by June 2012  Will have impact on available land in the desert  Possible impact on transmission routing

36 Finally  We need a specific (real) transmission plan with projects that have preliminary engineered routing corridors soon if California is make its 2020 RPS 33% goal