Governor to CPUC: Get Moving on New Power Plants

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, April 30, 2004 Share this on FacebookTweet thisEmail this to a friend

In his first major policy statement on energy since taking office, Governor Arnold Schwarzenegger urged the California Public Utilities Commission (CPUC) to get off the dime and implement current law on utility procurement of new power supplies.

In a letter to CPUC President Michael R. Peevey, the Governor called on the CPUC to "expeditiously implement" AB 57 (Roderick Wright, D-So. Ctrl LA), legislation signed into law in 2002 that requires utilities to submit a procurement plan that utilizes a competitive procurement process.

"California cannot afford to delay the construction of new power plants," wrote Schwarzenegger, who noted that investment in California's infrastructure has been stymied by regulatory uncertainty.

CMTA supported AB 57 and earlier this month urged lawmakers to reject AB 2006 (Fabian Nunez, D-Los Angeles), the Southern California Edison-backed bill that seeks to supersede AB 57. (AB 2006 cleared it's first hurdle recently when it was approved by the Assembly Utilities and Commerce Committee.)

Pointing to reliability concerns, the Governor also urged the CPUC to move up the 15 percent reserve margin requirement by two years (from ’08 to ’06) to prevent future shortages and blackouts. "I am concerned that the Commission's phase-in date of 2008 is too slow," wrote Schwarzenegger. "The California Independent System Operator's recent Summer Assessment concludes that strong economic growth and low hydro conditions could cause electricity shortages as early as this summer."

The Governor also reaffirmed his support for retail direct access for large customers.

In a statement to the media, CMTA President Jack Stewart said the Governor's letter "sends a strong signal to energy companies and California businesses that the Governor will pursue an energy policy that will support a robust and growing California economy by reducing costs and reversing job losses for industrial customers. Energy companies will start building new power plants as soon as utilities conduct competitive procurements and enter into supply contracts. There is nothing standing in the way of this except regulatory inertia. We applaud the Governor for urging the CPUC to proceed with competitive procurements to achieve the lowest cost new energy resources for California consumers" concluded Stewart.

Link to full statement:
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