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1 . California is actively evaluating and implementing such pricing systems in a CPUC rulemaking (R.02-06-001). 2 The Energy Commission's 2005 building standards, to be adopted in 2003, when combined with training and enforcement, are expected to reduce energy needs in new buildings by approximately 5 percent. 3 New federal appliance standards will increase air conditioner efficiency by approximately 20 percent, but if California were granted a waiver from federal standards, by 2007 California air conditioner efficiency would increase another 10 percent. 4 Electricity sales by the Investor-owned utilities totaled about 169,000 GWh in 2001. The renewables portfolio standard requires an annual increase in renewable generation equivalent to 1 percent of sales, or about 1,700 GWh. Assuming a capacity factor of about 50 percent, this is roughly equivalent to 385 MW. Accelerating achievement of the RPS goal to 20 percent by 2010 would mean adding 4,200 MW of renewables over 7 years, or 600 MW (1.6 percent) per year. California is implementing the Renewable Portfolio Standard for the Investor-owned utilities in a PUC rulemaking (R.01-10-024). 5 The Western Electricity Coordinating Council (WECC) has established minimum operational requirements of loss-of-load probability of no more than one day in ten years. Current information suggests that the WECC criteria can be met with approximately 15 - 18 percent reserve margins. 6 Peak demand growth is expected to be approximately 1,400 MW per year for the next two years, depending on weather and other factors. California is evaluating statewide generation resource needs in the CEC development of the Integrated Energy Policy Report (02-IEP-01). 7 The CAISO in 2002 identified generation-deficient areas and sub-areas within its control area, such as the greater Bay Area, Humboldt, Battle Creek and Vaca Dixon. Although some of these constraints may be solved by transmission improvements, it may prove more cost-effective to add new generation in some areas perhaps utilizing the CPA's authority to finance new power plants.

8 California is undertaking this effort in a PUC rulemaking (R.02-11-039).

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