Gino DiCaro

More Energy Infrastructure Needed, Says Gov.

By Gino DiCaro, VP, Communications

Capitol Update, Jan. 9, 2005 Share this on FacebookTweet thisEmail this to a friend

In his annual State of the State message, Governor Arnold Schwarzenegger said the state urgently needs more power infrastructure.

"California has long been the national leader in energy conservation. We must continue that leadership, but we cannot conserve our way out of our long-term energy crunch," said Schwarzenegger. "Yes, we need conservation. Yes, we need renewable energy. But California also needs power plants and transmission lines. We need more of them and we need them as soon as possible."

The Governor also made reference to the California Public Utilities Commission’s competitive procurement process for long-term power contracts, which he said "will put steel in the ground and power on the lines." He then went on to say, "This is a modern society and a modern society must have abundant and affordable power."

CMTA is particularly concerned about natural gas prices and supply, two interconnected and increasingly urgent problems facing the state. Natural gas prices have moved steadily upward in the last two years, a trend that is likely to continue and even worsen in coming years as demand grows and supply coming into the state remains stagnant.

Increased natural gas prices also have a significant impact on electricity prices since more than 40 percent of the state’s electricity generating capacity is fueled by natural gas. An example of this is the recently proposed electricity rate increase for customers in the Sacramento Municipal Utility District, where the utility is considering a 6 percent rate increase to cover rising natural gas costs.

Current gas supplies delivered by pipeline aren’t going to be sufficient to meet the forecast demand in coming years. This means the state is going to need to look to alternative means of bringing natural gas into the state, including liquefied natural gas (LNG). LNG is natural gas cooled and condensed to a liquid form and transportable by ship from producing regions to California where it can be stored, re-gasified and delivered through pipelines to businesses and consumers. While common throughout the world, LNG receiving terminals do not exist on the west coast.

CMTA is heading up a recently formed coalition of business and consumer groups aimed at promoting the siting of LNG facilities to serve California. The coalition, Californians for Clean Affordable and Safe Energy (Cal-CASE) will launch a web site and serve as an expert resource for media, policymakers, community groups and others interested in the safety, economic and environmental benefits of increasing natural gas supplies through LNG.

The Governor hit the nail on the head when he said during his State of the State address that the state "must have abundant and affordable power." The state’s economy, and the energy-intensive manufacturing sector in particular, will need both in order to be strong and healthy in the future.
Read more Energy articles

Capitol updates archive 989898989