Federal and State Energy Policy

Related Links:
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California’s energy action plan 
Solar energy basics
Photovoltaic basics
DOE smart grid
Do we need more transmission lines?
A $535 million loan to solar energy firm
CA Transmission PlanningResources.htmlhttp://www.energy.ca.gov/energy_action_plan/index.htmlhttp://www.nrel.gov/learning/re_solar.htmlhttp://www1.eere.energy.gov/solar/photovoltaics.htmlhttp://www.oe.energy.gov/smartgrid.htmhttp://www.energy.ca.gov/energy_action_plan/index.htmlhttp://www.energy.gov/news2009/7078.htmTangled_Wires_files/Western%20WREZ.pdfshapeimage_2_link_0shapeimage_2_link_1shapeimage_2_link_2shapeimage_2_link_3shapeimage_2_link_4shapeimage_2_link_5shapeimage_2_link_6shapeimage_2_link_7

Tangled Wires

Municipal utilities are in many ways unregulated, other than being responsible to their city councils, or boards of directors for the Irrigation Districts, and having their decisions subject to challenge in court. They set their own rates, do all their own planning, conduct their own environmental reviews for smaller power plants and most transmission projects, and make all decisions concerning whether and what to build, and who to buy power from. Regulated utilities, such as PG&E and SoCal Edison, must get approval from a government agency for all of those things.

There are a few exceptions, in that municipal utilities must go through other agencies for licenses for certain types of power plants. In California, all "thermal" power plants 50 megawatts (MW) or larger must go through the California Energy Commission's licensing process. Thermal power plants are those that use a heat source to make power, including fossil fuels, geothermal, and biomass.

Hydroelectric plants are the sole jurisdiction of the Federal Energy Regulatory Commission (FERC), and nuclear plants are all under the Nuclear Regulatory Commission. The Energy Commission specified "thermal power plants" basically because at the time that meant all power plants except hydroelectric and nuclear plants; solar and wind came later.

The one exception to all these jurisdictions are power plants built by the federal government, which other than hydro projects are few and far between. The Bureau of Reclamation conducts its own environmental review of all the federal hydroelectric projects it operates. The transmission lines built for federal projects are generally owned by one of four power marketing administrations, with the Western Area Power Administration (WAPA) owning all federal lines in the Western US except those in Washington and Oregon, which are owned by the Bonneville Power Administration. WAPA conducts its own environmental review for the projects it builds.

Municipal utilities can conduct their own environmental review for all in-state transmission projects, though often some additional review is required for interconnections and shared facilities, such as the National Environmental Policy Act (NEPA) process required for TANC's interconnections with WAPA's facilities. Interstate lines are the jurisdiction of FERC.

In California, all transmission owners, including the municipal utilities, can chose to participate in the transmission system planning process and/or control area operation offered by the California Independent System Operator (CalISO). The state's investor-owned utilities are required to go through the CalISO's processes. To date, no municipal utility has chosen to enter the ISO's transmission planning process, and only a few very small municipal utilities have chosen the ISO as their control area operator. (The control area operator has physical control of the transmission system, and operates it to accommodate all scheduled power deliveries from power plant to distribution system.)

Allocation of taxpayer funds is a major method by which all administrations implement their energy policies on the electric utility and power industries. It makes no sense to spend a penny on speculative transmission projects based on distant renewable, nuclear or coal energy as long as that penny can be better spent (provide greater public benefit) on local efficiency and photovoltaic power. Once we have our system down to a cost-effective minimum, then we can start building cost-effective renewable (and perhaps nuclear) power plants to give a diverse, secure, carbon-neutral and reasonably inexpensive generation base.

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