While they appear at first glance to be strange bedfellows, even in California’s unpredictable regulatory milieu, the newest regulator on the five-member California Public Utilities Commission, Dian Grueneich, told an industry group Friday she is a strong advocate for both addressing global climate change and exploring clean coal power generation options. Coming from a Democrat who was appointed late last year by Republican Gov. Arnold Schwarzenegger, that should not be too surprising.

The CPUC will hold an en banc hearing on climate change this week, but clean coal is more in the state energy commission sector from a research, development and energy planning vein.

Grueneich also told the Western Power Trading Forum (WPTF) winter meeting in Rancho Mirage, CA, that she expects the independent generators/suppliers to help build more infrastructure to make sure there are no major reliability breakdowns this summer or in any of the following years of her six-year term.

More generally, she emphasized the new-found close coordination among the governor’s staff, California Energy Commission and her CPUC colleagues. They meet regularly at the prompting of Schwarzenegger’s energy adviser, Joe Desmond, who attended the WPTF meetings.

Despite the closer coordination, Grueneich said she was surprised to find that not everyone in the state energy agencies shared the same outlook for this summer’s power needs. Thus, the Schwarzenegger administration has decided to wait until around April 1 to come out with a definitive forecast and its plan to mitigate against what some state officials predict could be a 1,700 to 2,000 MW shortfall in Southern California. The estimate, however, doesn’t figure the savings from voluntary demand-response programs with the state’s interruptible major industrial customers, Grueneich said.

“The agencies are working together very, very closely to make sure there is no finger-pointing [later] because now is the time we have to understand the issues, plan and take the necessary action,” she said. “There is a real determination to make sure that we do have reliable supplies.”

Characterizing herself as a “strong supporter of competitive markets,” Grueneich said that with really competitive markets and adequate consumer protection if the state gets through this summer without any major widespread outages, the CPUC and the governor’s office will be looking at how the state “sustains and enhances competition.”

Lurking in the background is the so-called “resource adequacy,” for which the CPUC expects to have a major decision by mid-year, but which is also a great tug-of-war between the entrenched and now financially healthy big three investor-owned utilities in California and the independent power sector, of which WPTF is one of the representative groups in the state.

“The decision in June likely will only be the first step,” Grueneich said. “It is going to be a multi-year process, and the CPUC is not only committed to working with the CAISO and the energy commission, but it is also committed to having the wherewithal to work through the complex issue over the next couple of years to assure we do get it right.”

At the same time, Grueneich said she will be an “extremely strong” advocate for energy efficiency, global climate change mitigation measures and new technology implementation for clean coal and other alternatives.

“I want California to be viewed not just as a national leader in energy efficiency, but as an international leader,” she said. “Everybody talks about clean coal as this wonderful supply source that is going to be brought in by new transmission capacity that also will carry wind-powered supplies. But the question is how we get from here to there.

“In my mind, if all we might be doing is bringing in conventional coal-fired electric supplies into California, we are exposing ourselves to a traditional NIMBY [‘not-in-my-backyard’] criticism of the state for not allowing any coal-fired generation in California. I would like to see California take some national leadership by making a real commitment to saying now that is one of the things we are really committed to trying to achieve.

“In any new transmission coming into the state, we are going to have available to use (wind and clean coal) technologies that are not readily available to us right now.” said Grueneich, asking the independent power producers to be “willing to take the steps to work with those of us in California to determine what it is going to take to develop some clean coal technology.”

She said she will be working with the California governor’s office to see what needs to be done to get the state more involved in clean coal development.

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