1. California Energy Action Plan Joint Public Meeting Electricity System Reliability Activities California Energy Commission July 17, 2003

2. California Energy Action Plan 2 2003 Supply Demand Balance JulyAugSeptOct Expected Available Generation59,56159,52059,45151,734 Net Additions 2,0352,759 2,455 Total Supply 61,59662,27962,21054,189 1-in-2 (Average) Summer Demand 52,073 42,241 Projected Operating Reserve (1-in-2)18%20%19%28% 1-in-10 (Hot) Summer Demand 55,238 43,766 Projected Operating Reserve (1-in-10)12%13% 24%

3. California Energy Action Plan 3 2004 – 2008 Additions and Retirements

4. California Energy Action Plan 4 Approved Power Plants

5. California Energy Action Plan 5 Future Power Plants

6. California Energy Action Plan 6 Projected 2004 – 2008 Conditions 20042005200620072008 Expected Available Generation 62,27960,71962,61662,37762,566 Net Additions -1,4131,797-39189199 Total Supply 60,86662,51662,57762,56662,765 1-in-2 (Average) Summer Demand 53,33154,50055,48756,19557,090 Projected Operating Reserve (1-in-2) 14%15%13%11%10% 1-in-10 (Hot) Summer Demand 56,57157,81158,85859,60960,559 Projected Operating Reserve (1-in-10) 8% 6%5%4%

7. California Energy Action Plan 7

8. 8 Energy Savings and Generation Additions from Demand Reduction, Demand Response, and Renewable Generation Program Goals 20042005200620072008 High DSM Scenario Peak Demand Reduction1145414712983 Incremental New Renewable goals of Energy Action Plan 1 3650145246352 Demand response goals from D-03-06-032 2 8591,1251,5221,9251,965 Total MW 8961,3202,0812,8833,300 Megawatts 1. Dependable Capacity during Peak Hours 2. CPUC Interim Opinion In Phase 1 Addressing Demand Response Goals And Adopting Tariffs And Programs For Large Customers

9. California Energy Action Plan 9 Potential Impacts of Demand Reduction, Demand Response and Renewable Generation Program Goals

10. California Energy Action Plan 10 CPA Current Generation Activities EAP goal to “Add new generation”: 2003 CPA Energy Resource Investment Plan approved 6/03 Reliability/Reserve Peaker Initiative underway Finance baseload generation when/where needed (CEC-permitted, potential step-in) Facilitate San Francisco and Fresno peaker developments (Williams Settlement)

11. California Energy Action Plan 11 CPA Current Generation Activities EAP goal to “Finance...critical plants that are necessary and would otherwise not be built (est. 300 MW for reliability”: Reliability/Reserve Peaker Initiative –CAISO designated reliability needs –CPA mission to “fill gaps” in the market –Target for 2005/06 for dispatch by IOUs –Competitive bidding process for long-term, low cost power purchase contracts with IOUs –Bids being offered through CPUC procurement process