Request for Proposals
For
RENEWABLE ELECTRIC POWER SUPPLY PROPOSALS

Jim Feider's Testimony on Trinity River before House Subcommittee on Water & Power 09-18-07

NCPA Letter To Congressman Thompson regarding Trinity River Restoration Fund H.R. 2733 07-19-07 

H.R. 2733 Trinity River Restoration Fund Legislation - June 14, 2007

NCPA supports federal, regional, and statewide efforts to reduce greenhouse gas emissions and combat global climate change. 

In California, NCPA has taken affirmative steps to work with state agencies responsible for the implementation of California Assembly Bill 32, landmark legislation calling for California to return to 1990 greenhouse gas emission levels by 2020.  NCPA is actively involved in proceedings at the California Air Resources Board (CARB), the agency responsible for implementing the program in California, as well as the California Public Utilities Commission and the California Energy Commission, the agencies providing key guidance to CARB as it relates to the electricity sector.

Outside the state, NCPA is engaged in ongoing regional efforts with the Western Climate Initiative as well as playing key roles in the ongoing federal debate in Washington, DC.  Key NCPA filings in a variety of regulatory proceedings can be found on the right side of this page. 

NCPA and its members have a long history of environmental stewardship and have expended considerable resources to develop significant amounts of renewable electric generation resources, investments that are consistent with the fundamental objectives of climate change policy.  

Key California Agencies Addressing Climate Change 

Testimony Submitted by NCPA Related to Climate Change

8/28/07- Testimony of James Pope, Before the California Senate Energy, Utilities and Communcations Committee, AB32 Oversight

Key Congressional Committees Addressing Climate Change

      - Subcommittee on Energy and Air Quality

Miscellaneous Links Related to Climate Change

The NCPA and its member agencies’ long-standing commitment to energy efficiency is an extension of fundamental principles dedicated to social and environmental responsibility, ensuring reliability, and keeping rates low for the communities we serve. Energy Efficiency is of the utmost importance to municipal utilities. Energy efficiency is a critical element of the resource planning process, generation, transmission, distribution, and demand.  NCPA and municipal utilities’ commitment to energy efficiency is guided by four important concepts:

• We place a high priority on energy efficiency, renewable investment, low income programs, and economic development.  Local elected officials govern and regulate public power to ensure our direct accountability on these important issues.

• Operational Energy Efficiency.  Public power has important energy efficiency programs that optimize generation and transmission resources, and ensure more optimal operation of the grid.

• Demand-side Energy Efficiency.  This is our major focus.  It includes, but is not limited to: appliances, air-conditioners, building codes and standards, education, electricity management, and weatherization, all coordinated with customer-specific programs.

• Cost-effective Energy Efficiency.  Cost-effective EE lowers the cost of providing electricity to our communities.  Our customers are our shareholders and benefits related to energy efficiency are realized by all of our customer-owners.

 Key Letters Related to MRTU

• 06/01/06 Letter to CAISO from Western Coalition
• 08/06      Letter to FERC from Senators Hatch and Bennett (Utah)

Of all the challenges confronting NCPA---and the Electricity Industry as a whole---as they seek to provide for their future needs, three interlocking dilemmas carry the most threat: 1) how, in the face of a finite supply of fossil fuel and an increasingly problematic international situation, to assure a secure and stable supply of energy; 2) how to minimize the long term health and environmental risks, including global warming, which can result from the generation of electricity; and 3) how to protect customers from the ever rising fuel costs which electric utilities are facing. 

Increasing the amount of electricity we use generated from renewable sources, and using that energy more efficiently, is the key to at once solving the environmental and energy issues that California will face in the future.

NCPA takes its commitment to renewable energy very seriously.  Following the passage of Assembly Bill 1890 (Brulte) in 1996, all California utilities were required to set aside a portion of their gross revenues for various community and environmental programs, including renewable energy programs, which were expected to be jeopardized in what was thought would be a competitive electricity market.  While the competitive energy market did not materialize as anticipated, public power’s commitment and leadership in renewable energy remained continued uninterrupted.

Every single one of NCPA’s members’ local governing bodies, consistent with Senate Bill 1078 (Sher), has adopted Renewable Portfolio Standards (RPS) that are tailored to their individual communities.  Our member utilities are already on track to meet and exceed the goal of that legislation, passed in 2002, which requires investor owned utilities (IOUs) to procure 20% of their electricity supplies from renewable sources by 2017.  There is currently pending legislation, Senate Bill 107 (Simitian), that would accelerate that 20% goal to 2010.  Because decisions regarding the RPS are made at the local level, they are tailored to the individual community's specific conditions and needs, maximizing their effectiveness. 

Our sustainability efforts began more than twenty years ago when NCPA, responding to customer-owners' core values of environmental responsibility and energy security, incorporated a significant amount of renewable energy into their resource base through the acquisition of the Geysers Geothermal Project.  That was then followed by the construction of the North Fork Stanislaus River Hydroelectric Development Project on the North Fork of the Stanislaus River in Alpine, Calaveras, and Tuolumne Counties, which provides nearly 250 megawatts of emissions-free electricity.   As a result, NCPA's resource base is currently 64% renewable.  Just how impressive this is becomes clear when you compare it to the rest of California which, in 2004, had only 10.2% of their electricity coming from renewables.

Recently Senate Bill 1 (Murray), which was supported by NCPA and signed into law by Governor Schwarzenegger, placed into statute the requirement that each public power system in California initiate a public proceeding to establish a solar subsidy program by January 1, 2008, at a minimum $2.80 per watt.  As these programs will be locally designed, they will be able to be tailored to make the most of the opportunities and community characteristics and thus ensure maximum results and benefits.  In fact, many NCPA member utilities already offer solar programs to their customers at subsidy levels far above the state requirement, in part to create a quicker payback incentive due to the lower electricity rates that public power customers enjoy. 

There is no question that public power is leading the way in California in providing clean and reliable energy for our ratepayers.  In fact, recent California Energy Commission (CEC) reports on the progress of the State’s utility RPS programs have confirmed that publicly owned utilities’ renewable energy procurement efforts lead the State in compliance. 

NCPA and its member utilities place a high value on their ability to be flexible and to pursue programs that have the support of their governing boards and customers.  In meeting the needs of its members, whose customer counts range from a few hundred up to a hundred thousand (compared to IOUs, which have millions of customers), NCPA has firsthand experience that a “one size fits all” approach to energy resource and conservation development is likely to be inefficient and ineffective.  Local control and decision making has proven successful in placing public power out in front of providing the solutions our state needs to face the energy and environmental policy issues now confronting us.

NCPA, along with Palo Alto, Santa Clara, and the city of Gridley are proud supporters of the National Action Plan for Energy Efficiency. The Action Plan was released July 31, 2006 at the Summer National Association of Regulated Utility Commissioners (NARUC) held in San Francisco.

The Action Plan’s recommendations call for electric and gas utilities to do the following:

• Recognize energy efficiency as a high-priority energy resource,
• Make a strong, long-term commitment to the implementation of cost-effective energy efficiency as a resource,
• Broadly communicate the benefits of, and opportunities for, energy efficiency,
• Promote sufficient, timely, and stable program funding to deliver energy efficiency where cost-effective, Modify policies to align utility incentives with the delivery of cost-effective energy efficiency, and modify ratemaking practices to promote energy efficiency investments.

At the same time, California and its energy leaders, including NCPA and its members, have pledged support for the National Action Plan for Energy Efficiency via a Memorandum of Understanding (California MOU), signed concurrently with the national plan.  The California MOU includes the following commitments:

• Providing resources to promote recommendations from the National Action Plan for Energy Efficiency at speaking engagements and other educational opportunities, including participation in “buddy system” outreach efforts in which the signatories engage fellow political leaders, regulators, utilities and other stakeholders to inform them about the National Action Plan for Energy Efficiency's best practice findings and recommendations.  
• As appropriate for each signatory, model California’s best practices and policies identified in the National Action Plan for Energy Efficiency, including:
• designation of energy efficiency as a high priority resource option;
• adoption of targets for energy efficiency; pursuit of energy efficiency resources under a long-term resource planning and procurement framework;
• institution of a regulatory framework that encourages utility investment in energy efficiency; and
• sharing California's successes with others interested in energy efficiency and learning from others' successes in the planning and delivery of cost-effective energy efficiency programs.

During the 2005-06 California legislative session, two significant pieces of legislation were adopted which have an impact on public power. 

• Senate Bill 1037 (Kehoe), requires all publicly-owned utilities to report to the California Energy Commission and its local governing boards about curent and projected energy efficiency programs, including expenditures and savings. 
• Assembly Bill 2021 (Levine) - reaffirms SB1037 mandates but also requires publicly-owned utilities to develop energy efficiency targets on a triennial basis provide an independent assessment of measured savings.

The public power community responded to these Bills with major efforts to develop coordinated and comprehensive reports among the nearly 40 public power utilities providing electricity to customers in California.  The first report under SB1037 was submitted by the California Municipal Utilities Association, in close collaboration with NCPA and the Southern California Public Power Authority on December 15, 2006.  The 2008 edition was filed with the Califorina Energy Commission on March 17, 2008.  The next version of this report is due on March 15, 2009.

The first report establishing energy efficiency targets, pursuant to AB2021, was provided to the California Energy Commission on October 15, 2007. The next edition will be submitted in 2010.

Each document is available on the top right portion of the adjacent bar. 

In a post 9/11 environment, the Bureau of Reclamation (Reclamation) has greatly increased the security surrounding the federal facilities it oversees.  A portion of these costs are the responsibility of the water and power agencies, and systems that rely on the federal power generated by these facilities.  NCPA is currently working closely with public power systems across the country, and with the water community in California, to advance proposals that assure full funding of these facilities, while providing cost certainty and predictability for all parties involved. 

Legislation to stabilize the payments made by power and water customers for security cost at federal hydroelectric facilities at the same, 15% rate applied to all other Safety of Dams costs, has now been introduced in both bodies of the U.S, Congress. In the House of Representatives, California Congresswoman Grace Napolitano (D- Norwalk) has introduced H.R. 1662, and NCPA submitted testimony at a hearing on the bill. HR 1662 has been passed out of the House Resources Water and Power Subcommittee, and is pending consideration by the full House Resources Committee.  In the U.S. Senate, Senator Maria Cantwell (D-WA) has introduced S. 1258, and NCPA has submitted testimony at a Senate hearing on the bill.

These bills represent a durable solution that will spare Congress the need to annually address the allocation of these costs. Moreover, they assure the Bureau of Reclamation a steady and consistent supply of funding to protect the vitally important federal facilities under their purview.

The amount of exposure to security costs has been unclear, and each year the amount has changed and the issue has had to be decided by Congressional action. We are willing to support these costs, but we seek a standard method of allocating the costs on a stabilized basis. HR 1662 and S 1258 would set power and water costs at 15 percent of all security cost, the same limit that is currently applied to all other Safety of Dams expenses. The bills also allow Congress to exercise vigorous oversight of the site security program to keep the escalation of future costs within reasonable bounds.

In 1992, the U.S. Congress passed the Central Valley Project Improvement Act (CVPIA) – which included provisions under Section 3406 of the Act establishing environmental mitigation activities to be undertaken utilizing federal and state funding, and creating a Restoration Fund comprised of contributions from power and water contractors for this purpose on an annual basis.  The CVPIA anticipated that the initial undertaking of the 3406 activities would require intensive effort for a number of years, and stipulated in Section 3407 that when the initial activities were accomplished, annual payments into the restoration fund would be reduced by half. 

At this writing, NCPA is collaborating with the Bureau of Reclamation, the US Fish and Wildlife Service, and other stakeholders, to closely examine Section 3406 to ensure its implementation in accordance with the intent of the CVPIA.  What is needed is an inventory of goals within Section 3406 that have been achieved, and a shared understanding and agreement regarding future actions needed to fulfill the required mitigation-related objectives of the Act going forward.

Because public power systems contribute public dollars toward these important programs, a clear accounting of the funds contributed – and effective implementation of the provisions of the CVPIA is needed.  The ongoing review process is designed to advance this important objective, while assuring achievement of the environmental goals surrounding the Central Valley Project.