Executive perspectives

Sempra Energy is doing its part
to supply the Southwest with power

05/04/05
by Don Felsinger
President and Chief Operating Officer, Sempra Energy

The California Independent System Operator (ISO), the agency that manages the statewide power system, says electricity supplies should cover the expected demand for power this summer-if the weather is normal. But, it warns that customers could teeter on the brink of blackouts if temperatures go too high in August and September.

The ISO says the ongoing issue of transmission congestion, and the fact that fewer new power plants were built in the past year in Southern California than in the northern part of the state, mean there's a greater potential for power shortages for customers in the Southern California region.

At Sempra Energy, we're doing everything we can to make sure the region has all the power it needs.

New energy supplies
We know that our future is linked to our customers' future. And that means that through all of our operations, we are committed to bringing new energy supplies to the marketplace-not just in Southern California, but throughout the Southwest and other parts of the country-and helping our customers manage their energy costs. We're doing that by building new power plants, adding transmission lines, promoting energy conservation and increasing the use of renewable energy resources.

Last year, for instance, our Sempra Generation business began building a new, 550-megawatt (MW) power plant in Escondido, Calif., called Palomar Energy. When it's finished, Generation will sell the plant to our San Diego Gas & Electric (SDG&E) subsidiary to provide more energy for its Southern California customers.

Just since 2000, Generation and its partners have been involved in the construction of five new power plants in the Southwest, including Baja California, Mexico. These five plants produce more than 2,800 MW of power-enough for more than 2.5 million homes. And, we have three more proposed plants in the West that could add another 2,600 MW to this total.

More transmission-interconnection capacity
One of those proposed plants, Granite Fox Power, 100 miles north of Reno, Nev., near the town of Gerlach, could produce enough power to serve 1.5 million homes. But, just as vital, our proposal for Granite Fox Power calls for us to add new transmission-interconnection capacity. This will not only allow us to get the power from Granite Fox Power to energy customers, it will also make it affordable for generators of renewable power in the area-wind, geothermal and solar-to get their power to market.

Back in San Diego, SDG&E has been working hard, too, to get a new 230-kilovolt transmission line energized early-in time to address the power problems we might face this summer. The new Miguel-Mission line will ease local transmission congestion in the San Diego region, reduce congestion-related energy costs and help ensure regional grid reliability.

Other supply options
What's more, SDG&E is increasing the use of renewable resources, with the goal to have 20 percent of its power portfolio come from renewable resources such as wind, solar and biomass by 2010.

SDG&E has also proposed a range of new technologies such as advanced metering to give customers greater control over how and when they use electricity by urging them to use energy off-peak when it costs less. Such a program would help to reduce the threat of electrical shortages by shifting usage away from critical high-demand hours.

Beyond these efforts, Sempra Energy is helping to address the growing shortages in natural gas supplies by moving to the forefront of liquefied natural gas (LNG) development in North America. When it begins operations in 2008, Energía Costa Azul will become the first LNG receipt terminal on North America's West Coast able to supply natural gas markets in the Southwestern United States and Mexico. We also have two other LNG receipt terminals under development on the Gulf Coast.

Clearly, Sempra Energy is one of the leaders in providing the power people need-not only in the Southwest, but throughout the country. And, that should go a long way toward avoiding shortages this summer and beyond.

National energy policy
But, we can't do it alone. If we're really going to fix the energy-supply problem in this country, we need a national energy policy that addresses the need for new electrical generation and transmission infrastructure nationwide, as well as new supplies of natural gas. We need an energy policy that not only identifies supply-and-demand issues, but enables us to move forward in a timely fashion to address those needs.

And that's why, in general, we support the comprehensive energy bill passed by the U.S. House of Representatives on April 22, 2005. We hope the Congress will maintain its progress on this bill and enact this legislation.

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