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Skip Navigation LinksAbout CPUC > Commissioners > Former Commissioners > Timothy Alan Simon > Speeches, Statements, and Publications > Emerging Issues Policy Forum (September 15, 2008)

Supply and Demand Responses to the Energy Challenge

Emerging Issues Policy Forum -- September 15, 2008 -- Amelia Island, Florida

Good morning, everyone.  I’d like to take a few moments to discuss the interesting and critically important work being done in California to balance the supply and demand of energy.  California’s Energy Efficiency Strategic Plan, Demand Response programs, and Renewable Portfolio Standard are the top priorities in the resource procurement Loading Order for the Energy Action Plan that we established in 2003.  Among other preferred policy programs, these initiatives offer clean, diverse, and essential tools for demand-side and supply-side management of our energy resources. 

Energy Efficiency

The California Commission is in the process of adopting and implementing a long term, aggressive strategic plan for Energy Efficiency that goes beyond the utility sector in promoting “total market gross” efficiency goals.  Among the targets delineated in this plan is the “Zero Net Energy” goal for new residential and commercial construction by 2020 and 2030, respectively.

Recent cost modeling efforts in California’s groundbreaking Greenhouse Gas proceeding have identified Energy Efficiency as by far the most cost-effective procurement resource for reducing greenhouse gas emissions in compliance with Assembly Bill 32.  Thus, Energy Efficiency is a versatile form of both demand- and supply-side management that helps ratepayers make investments and energy consumption choices to reduce their electricity bills while also decreasing our reliance on fossil-based energy supply.

Renewable Portfolio Standard

California Senate Bills 1078 and 107 have set forth goals of 20% and 33% renewables procurement, respectively, for the purposes of attaining new and diverse energy supply and achieving greenhouse gas emissions reductions.  California is widely recognized as a leader in renewable project development as it continues to push the envelope to incentivize increasingly clean and diverse energy resource procurement.  The California Solar Initiative and other programs designed to promote market transformation and deployment of other renewable projects such as wind and biomass will continue to be a high priority as we move toward an increasingly carbon-constrained world.

Demand Response

The California Public Utilities Commission very recently adopted a decision granting Southern California Edison authority to spend $1.63 billion in Advanced Metering Infrastructure (AMI).  This large investment is calculated to provide significant benefits to consumers, allowing them to make real time consumption choices to save on energy costs. 

As California continues to adopt such smart technologies, we can reduce peak demand and reliance on fossil-based “peaker” generating units.  Along with Energy Efficiency strategies, Demand Response is a critical step forward in mitigating the increasing costs of energy on the retail end and incrementally reducing greenhouse gas emissions.

The Far Reaching Impacts of Assembly Bill 32

As California and the rest of the nation implements a regulatory framework for greenhouse gas emissions reduction and Climate Change mitigation, increasing demand- and supply-side management program mandates for energy resources become essential.  Combined with a prospective cap-and-trade system, such program mandates must be strategically developed to find the least-cost path to emissions reductions.  And as the low-hanging fruit of emissions reductions is achieved through these regulatory measures, the cost of additional emissions reductions will increase.  This will necessitate investment in carbon-reducing technologies and creative demand- and supply-side management techniques in order to mitigate ever-expanding costs to consumers.

We must carefully and strategically work to avoid overburdening electricity sector consumers as we balance supply and demand in this new energy economy.  I look forward to working with all of you as we collectively address these policy challenges.  Thank you.



Last Modified: 9/15/2008

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