But beyond that, two questions left unanswered since the 2000-01 energy crisis cast shadows over the state's medium and long-term electricity outlook:
Who will build power plants, and why? Conservation efforts and a slow economy cut electricity demand and helped end California's last energy crisis. But an economic revival and steady population growth will eventually boost demand, and older power plants will shut because of pollution rules and competitive pressures. Investors won't pony up billions of dollars for new plants without clear rules that limit risks.
Not everyone wants to rush to build more plants.
Green activists stress the importance of reducing energy use and shifting load to renewable wind, solar and geothermal power sources. ... Sagging gas prices helped California escape the crisis in 2001, but recently prices have jumped to $6 per million Btus. Relief may be a long way off. On June 10, Federal Reserve Chairman Alan Greenspan told a Congressional hearing on the natural gas market that "we are not apt to return to earlier periods of relative abundance and low prices anytime soon."
With uncharacteristic clarity, Greenspan explained that "in the United States, rising demand for natural gas, especially as a clean-burning source of electric power, is pressing against a supply essentially restricted to North American production."
To get out of that bind, the United States needs to tap natural gas reserves overseas, he added. Most of those reserves are in Russia and the Middle East and must be chilled and compressed into liquid form to be shipped to the United States. Handling that flow of liquefied natural gas "will require a major expansion of LNG terminal import capacity," he said.
That will cost billions of dollars, and won't happen soon and almost certainly not in California, which has no existing facilities.
Public opposition recently prompted the Vallejo City Council to reject a plan for a LNG terminal at the former Mare Island Naval Shipyard. Other California communities aren't likely to be more welcoming, so several energy companies have set their sights on the West Coast of Mexico as a host for new LNG facilities. But no project has the needed permits, and imports remain years away.
