Volume I. Part I - California Public Utilities Commission

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PG&E’s 2006 LTPP sets the stage for implementing the State loading order
established in the Energy Action Plan (“EAP”) and balances three primary objectives:
(1) assembling a reliable and operationally flexible portfolio of resources;
(2) supporting the development of environmentally preferred resources; and
(3) managing customer costs. As with any planning process, there are trade-offs
between these three objectives. PG&E’s recommended plan was selected from a
number of candidate plans based on a comprehensive evaluation of feasibility and
performance metrics across multiple scenarios, keeping in mind PG&E’s
three primary objectives.
PG&E’s recommended plan sets a path to: (1) invest in cost-effective and
available Customer Energy Efficiency (“CEE”); (2) implement the California Solar
Initiative (“CSI”) and other distributed generation programs; (3) procure available
demand response (“DR”) sufficient to meet the Commission’s 5% target; (4) procure
renewable resources to and beyond the Commission’s current 20% target; (5) invest
substantially in transmission to support renewable resources; and (6) procure new
dispatchable and operationally flexible capacity to ensure continued reliable service in
northern California. PG&E’s plan also promotes the development of environmentally
preferred resources by supporting innovation in renewable technologies and enabling
projects to go from demonstration to commercial viability through the proposed
Emerging Renewable Resource Program (“ERRP”). In short, PG&E is
recommending an ambitious long-term plan designed to provide reliable service,
promote environmentally preferred resources and manage customer costs. While
PG&E’s scenario analysis demonstrates that market conditions have a much greater
effect on rates than the choice of a plan that includes higher reliability or a greater
emphasis on environmentally preferred resources, PG&E’s recommended plan best
manages customer costs while supporting important reliability and environmental
policy objectives. The 2006 LTPP provided PG&E an opportunity to evaluate on a
long-term basis the needs of its customers and all electric consumers in northern
California and recommend to the Commission an integrated and comprehensive path
forward.
In Volume 2, PG&E addresses a number of critical policy issues. In particular,
PG&E addresses the impact of various legislative and regulatory events and
requirements such as resource adequacy, implementation of greenhouse gas
legislation, the California Independent System Operator Corporation’s (“CAISO”)
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