Volume I. Part I - California Public Utilities Commission

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represent different states of the world which are out of PG&E’s control. The
candidate plans are alternative combinations of procurement actions that PG&E could
pursue, including demand-side, supply–side and transmission actions. Finally,
metrics are measures used to determine feasibility and performance of the candidate
plans under each scenario. PG&E’s planning framework is described in more detail
in Volume 1, Sections IV.D and IV.H.
PG&E will implement the recommended plan through a number of
procurement activities. First, PG&E is actively involved in demand-side programs
consistent with EAP II and the State Loading Order. PG&E’s energy efficiency,
demand response and distributed generation programs are included in the
recommended plan and effectively reduce procurement need.
Second, PG&E is aggressively pursuing renewable resources, consistent with
EAP II and the Commission’s RPS decisions.
Third, PG&E uses its short-term procurement authority for contracts that are
five years or less in duration. These contracts allow PG&E the flexibility to purchase
energy and other products to meet changing needs.
Fourth, PG&E is proposing to procure 2,300 MW of new, long-term
dispatchable and operationally flexible resources. PG&E intends to procure this
additional generation through RFOs which include Procurement Review Group
(“PRG”) review and the use of an Independent Evaluator (“IE”).
Fifth, PG&E is proposing procurement plans for the fuel used to generate
electricity, including natural gas and nuclear fuel.
Finally, PG&E is proposing procurement of natural gas pipeline transportation
and storage to manage the physical needs of its electric portfolio, and hedging for
electric and gas price risk.
C. Utility Service Profile
PG&E’s service territory covers 70,000 square miles in northern California
extending from the California-Oregon border to the Tehachapi Mountains at the
southern end of the San Joaquin Valley. PG&E provides electric service to
approximately 5.1 million customers in 47 out of 58 counties in California. Most of
the PG&E Service Area has a Mediterranean-like climate, with rainy winters and
warm dry summers. At coastal locations the influence of the ocean generally
moderates temperature extremes, creating mild winters and relatively cool summers.
The cool California Current offshore, enhanced by upwelling of cold sub-surface
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