By California Governor Arnold Schwarzenegger
When the people sent me to Sacramento, I pledged to change government into an instrument of action, to fix the problems facing California. Working together, we have steered California in the right direction to repair our finances, turn the economy around and change the way we do business in the State Capitol.
And now it is time to take action on California's energy problems. We must not wait for the next blackout to plan for our energy future.
I have proposed a plan that will steer us away from the system that plunged California into a crisis and hurt businesses and consumers. But neither will I lead us back to a time when government over-regulation and utility monopolies had Californians paying rates 50 percent higher than the national average.
The thrust of my energy plan is simple: more power and lower prices. Simply put, California needs more power plants to ensure that families and businesses have an abundant, affordable power supply today and tomorrow.
Getting more power plants online requires a regulatory structure that emphasizes adequate reserve margins, long-term contracts and competitive procurement. In April, I called upon the California Public Utilities Commission to move up the requirement that all electricity sellers provide a minimum 15 percent energy reserve level. This strong reserve margin will provide a "sunny day" reserve of energy so that even during peak power demand, Californians will never have to worry about blackouts. This will be the most stringent reserve requirement in the nation.
One of the major contributing factors of the energy crisis was over-reliance on the volatile, short-term "spot market." Instead of buying power on the spot market, utilities should be allowed to enter into long-term contracts that assure power supplies are available when needed. The PUC must to create an open, competitive procurement process, to ensure that ratepayers get the lowest cost power available in the market.
Strong reserve margins, long-term contracts and competitive procurement are the right incentives for investors to build new power plants and expand the transmission grid in California. The money is out there, the investors are eager to enter the power generation market.
Particularly, it is the ability of utilities to engage in long-term contracts that attracts investors and gets power plants built. In July, the PUC approved a plan designed to meet San Diego's energy needs through this decade. The plan includes building two large power plants that will generate 1,085 megawatts of power. (One megawatt powers roughly 1,000 homes). Two more facilities planned for San Diego, one of which is a renewable biomass facility, will bring an additional 85 megawatts.
I am also working closely with the PUC to complete similar plans for the state's other investor-owned utilities, to make sure that there are plenty of new power projects in the state's pipeline. As I said in my State of the State speech, something is wrong when it is easier to create energy agencies and bureaucracies than it is to create power plants.
My energy plan also takes us well into the future, by capitalizing on technologies we already have today--specifically, renewable energy sources.
California is fully capable of increasing the amount of power we receive from renewable resources such as wind, solar, biomass and geothermal. The PUC should accelerate the goal of using 20 percent renewable power by 2010, rather than 2017 as was previously mandated. The PUC has adopted this renewable goal for California.
This summer, I also announced my "Million Solar Roofs" campaign, to dramatically increase the number of solar power systems on residential and commercial rooftops around California, all while promoting efficiency and conservation. In September, I signed a bill that will get us on the right track by making it more affordable for 12,000 homes to install solar power systems.
Solar power transforms homes or businesses from simple consumers of power into producers, as well. And when a solar system produces excess power, it should be able to sell the surplus back to the grid for others to use. It's like adding thousands of small, clean-energy power plants to California.
Consumers can also benefit from the installation of "real-time" electricity meters. Real-time price information would let people make more informed decisions about their electricity use and provide incentives to invest in energy saving technologies.
Building more energy production, expanding our transmission capacity and diversifying our energy sources to include renewables, will enable us to secure our state's energy future. The steps we take today will ensure that we have an adequate energy supply to meet growing needs, more efficiently use our resources, and make California's economic engine roar.
As governor, I have pledged to return the power to the people. That goes for energy as well.
The above content reflects the opinions of the author and not necessarily the policies of the National Governors Association.