Conference on Energy Conference on Energy Infrastructure and Investment Infrastructure and Investment

in Californiain California

Jeff WrightOffice of Energy Projects

Federal Energy Regulatory CommissionJune 2, 2005

June 2, 2005 Office of Energy Projects 1

Total Capacity in 200157,100 MW

Total Capacity in 200566,312 MW

Source: Platts PowerDat, 2001 and 2005 data.

Natural Gas DominatesGeneration Capacity

Natural Gas 54%

Coal 7%

Hydro 21%

Nuclear 8%

Oil 2%

Renewable & Other

8%

Oil 2%

Nuclear 9%

Hydro 24%

Renewable & Other

6%Coal 7%

Natural Gas 51%

June 2, 2005 Office of Energy Projects 2

Additions 11,784 MWAdditions 11,784 MW

Retirements Retirements --3,751 MW3,751 MW

Net additions 8,063 MWNet additions 8,063 MW

Source: Platts PowerDat, April 2005.

Recent Additions toGeneration Capacity

June 2, 2005 Office of Energy Projects 3

Future Retirements Offset Generation Additions

Source: Based onPlatts PowerDat, April 2005.

Additions 5,998 MWAdditions 5,998 MW

Retirements Retirements --3,065 MW3,065 MW

Net additions 2,933 MWNet additions 2,933 MW

June 2, 2005 Office of Energy Projects 4

California’s AgingGeneration Fleet

Source: Based onPlatts PowerDat, April 2005.

30 Years or Older GenerationA CEC study of aging A CEC study of aging power plants identifies a power plants identifies a total of 9,000 MW of aging total of 9,000 MW of aging power plants that are at power plants that are at risk of retirement by 2008.risk of retirement by 2008.

June 2, 2005 Office of Energy Projects 5

Source: POWERmap, CEC Draft Staff White Paper “Upgrading California’s Electric Transmission System: Issues and Actions for 2004 and Beyond” July 2004, NERC Summer Assessment 2005 and FERC database

230 kV500 kVDC

Legend

Contra Costa – Las PositasTrans Bay Cable Project

Tri-Valley Long Term Project

Jefferson - MartinTesla - Newark

Sacramento Area Voltage Support Project

Gates - GreggRector - Tap

Tehachapi Area Project

Vincent – Mira Loma

Lake Elsinore Advanced Pump Storage Project

Miguel - Mission

Otay Mesa Power Purchase Project

Harquahala - Devers

Imperial Valley San Diego Expansion Plan

Electric Transmissionin California

June 2, 2005 Office of Energy Projects 6

Source: POWERmap, FERC Western Energy Infrastructure 2003

Path 66

Path 65

Path 49

Path 46

Path 45

Path 15

Path 26

Path 66

Path 65

Path 49

Path 46

Path 45

Path 15

Path 26

Path 66

Path 65

Path 49

Path 46

Path 45

Path 15

Path 26

Path 46

Path 49Path 26

Path 15

Path 65

Path 66

Path 45

Path 15 Upgrade WillHelp In-State

June 2, 2005 Office of Energy Projects 7

Transmission Help:The Frontier Project

Source: Rocky Mountain Area Transmission Study (RMATS) Final Report, September 2004

June 2, 2005 Office of Energy Projects 8

Congestion Problem AreaSummer ‘05

Source: POWERmap, NERC Summer 2005 Assessment

East of River

Path 26

North of Miguel

South of Lugo SCIT

June 2, 2005 Office of Energy Projects 9

Source: WECC's Summary of Estimated Loads and Resources

55,920

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

June July Aug Sept

Peak

Dem

and

(MW

)

Actual 2001 Actual 2002 Actual 2003Summer 2004 CEC-Statewide 1 in 2 (2005) CEC-Statewide 1 in 10 (2005)

Summer PeaksKeep Increasing

June 2, 2005 Office of Energy Projects 10

Source: California ISO “2005 Summer Operations Assessment," March 2005

-5,000

10,00015,00020,00025,00030,00035,00040,000

June

July

Aug

ust

Sept

embe

r

June

July

Aug

ust

Sept

embe

r

NP-26 SP-26

Meg

awat

ts (M

W)

Existing Imports CEC Demand 1 in 2 CEC Demand 1 in 10

SP26 Needs Imports

June 2, 2005 Office of Energy Projects 11

2005:Dry in Northwest; Wet in California

-500

0

500

1,000

1,500

2,000

2,500

3,000

Source: Northwest Power Pool

June 2, 2005 Office of Energy Projects 12

2001

2004

Staff estimate based on April Columbia River streamflow projections

RankingWettest to

Driest1 to 451 19 7 25 44 23 35 37

2005

41

1997 1998 1999 2000 2001 2002 2003 2004

Dry Year = Less Hydro Imports

GW

h

J F M A M J J A S O N D

June 2, 2005 Office of Energy Projects 13

Source: CEC, NWPPC, and U.S. Census

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Gig

awat

thou

rs

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Trill

ions

of B

TUs

Series1

1983 20

00

1990 20

05

Exports to California Energy Use in Pacific NW

Trend Lines

1995

2010

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

Gig

awat

thou

rs

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Trill

ions

of B

TUs

Series1

1983 20

00

1990 20

05

Exports to California Energy Use in Pacific NW

Trend Lines

1995

2010

Northwest Load Increases,Hydro Exports Decline

June 2, 2005 Office of Energy Projects 14

Source: Data from EEA’s April 2005 Compass

Power Generation DrivesGas Demand

June 2, 2005 Office of Energy Projects 15

Source: Platts NewGen.

5404385,514Total

58475932008

16131602007

105851,0702006

3612933,6912005

Related gas demand with heat rate of

7,000 Btu/kWh(MMcf/d)

Related gas demand with heat rate of

5,687 Btu/kWh (MMcf/d)

Proposed Generation

in MWYear

Source: Based on Platts NewGen and PowerMap.

Future Generation NeedsMore Gas

June 2, 2005 Office of Energy Projects 16

California Gas Facts

11%2.3 Tcf21.6 TcfTotal Gas Consumption

2%0.3 Tcf19.4 TcfTotal Dry Gas Production(2003)

20%0.08 Tcf0.4 TcfTotal Exports to Mexico

15%0.48 Tcf3.3 TcfTotal Net Imports from Canada

5%0.45 Tcf8.2 TcfTotal Storage Capacity

1%2.4 Tcf189.0 TcfTotal Proved Gas Reserves (2003)

% of United States

CaliforniaUnited States

Source: Data from EIA’s Natural Gas Monthly February 2005 and US Crude Oil, Natural Gas, and Natural Gas Liquid Reserves 2003 Report; EEA’s April 2005 Compass; CEC’s NaturalGas Assessment Update, Staff Report 02/05; DOE’s Fossil Energy’s Natural Gas Imports and Exports 4th Quarter Report; and the NEB’s Natural Gas Export by US Region

June 2, 2005 Office of Energy Projects 17

California imports approximately 85 percent of its natural gas supplies from other states and Canada. The four major supply sources to California are the Permian Basin; San Juan Basin; Rocky Mountains; and Western Canada.Source: Figure 14 and data from The California Energy Commission’s Natural Gas Assessment Update, Staff Report dated February 2005

California Gas Sources

June 2, 2005 Office of Energy Projects 18

Pipeline ImportsTrending Lower

Source: Platts Power Map; Office of Fossil Energy’s Natural Gas Imports/Exports for 2004; EIA’s Natural Gas Annual 2001 through 2003; and the NEB’s Natural Gas Exports by US Region

Sumas Eastport

Otay Calexico

Northwest Pipeline

Gas Transmission

Northwest

OgilbySan Diego

710 742 727676 674

552 544

431477

0 0.3 2 4 13 23 35 4480

0

100

200

300

400

500

600

700

800

1996 1997 1998 1999 2000 2001 2002 2003 2004

Bcf

/Yr

Canadian Imports Mexican Exports

June 2, 2005 Office of Energy Projects 19

Planned LNG Import Terminals

LNG Could Help

Source: Platts Powermap; The California Energy Commission’s Website; and FERC Staff

1

2

34

5

6

1. Baja California: 1.0 Bcfd, 2007(Sempra/Shell)

2. Baja California Offshore: 1.4 Bcfd, 2006 (Chevron Texaco)

3. Long Beach Harbor, CA: 0.7 Bcfd, 2008(Mitsubishi/ConocoPhillips)

4. S. California Offshore: 0.5 Bcf/d, 2006(Crystal Energy)

5. California Offshore: 1.5 Bcfd, 2008(BHP Billiton)

6. California Offshore: 0.75 Bcfd, 2009(Chevron Texaco)

Conclusions

June 2, 2005 Office of Energy Projects 20