2008 Corporate Responsibility Report

How we are creating a smarter foundation for a sustainable future

Planning for California’s Clean Energy Future

PG&E uses a comprehensive energy strategy to meet its customers' future power needs in ways that are consistent with the state's Energy Action Plan. The strategy relies on an aggressive expansion of customer energy efficiency and demand-side management programs and looks to secure additional renewable power resources before seeking to meet the remainder of customers' energy needs through efficient traditional generation sources.

In 2008, PG&E’s retail customers purchased 81,935 GWh of electricity. Of that amount, 25,481 GWh were generated by PG&E's own natural gas, hydroelectric and nuclear facilities, as well as small amounts of fuel oil, diesel and solar energy. The remainder was purchased under contracts or from the open market. The charts to the right show our overall electricity supply mix for 2008, which included energy PG&E generated and purchased from third parties.

PG&E’s 2008 Electric Power Mix Delivered to Retail Customers*

* The continued drought conditions in California have reduced hydroelectric generation. As a result, PG&E purchased more electricity than usual from the wholesale market in 2008. California regulators require us to assume that a certain portion of these market purchases comes from coal-fired generation and renewable resources. As a result, the chart shows an increase in coal-fired generation, although PG&E’s direct purchases of coal, which we are required to buy from small power producers, remain minimal at 1.7%. Additionally, 12 percent of PG&E’s delivered energy came from Renewable Portfolio Standard (RPS)-eligible resources; the chart shows 14 percent, reflecting an additional 2 percent from open-market purchases that do not count toward the state's RPS target. Source: April 2009 Power Content Label, consistent with PG&E’s submittal to the CEC on March 2, 2009.

PG&E’s 2008 Total Eligible Renewable Resources**

** As defined in Senate Bill 1078, which created California's Renewable Portfolio Standard, an eligible renewable resource includes geothermal facilities, hydroelectric facilities with a capacity rating of 30 MW or less, biomass, selected municipal solid waste facilities, solar facilities and wind facilities.

Large hydroelectric power stations generate a significant amount of electricity for our customers. However, under California law, these resources do not qualify toward California's Renewable Portfolio Standard. PG&E's supplies of California-eligible renewable resources plus non-eligible hydroelectricity were approximately 30 percent of total energy deliveries in 2008.

PG&E’s Long-Term Procurement Plan

PG&E procures resources to meet its customer electricity needs based on a long-term procurement plan approved by the CPUC.

In preparing its plan, PG&E puts first priority on reducing consumption through energy efficiency and then relies significantly on preferred and environmentally friendly resources, such as demand response programs, renewable generation, distributed generation (including solar power) and new, clean and efficient fossil-fuel units.

For example, over the next 10 years, PG&E expects to meet approximately half of the anticipated demand growth in its service area through energy efficiency and customer-owned solar. PG&E estimates that due to these demand-reduction programs, its electricity sales would grow at an average rate of just 1 percent per year between 2009 and 2018; in the absence of these programs, electricity sales would grow at an average rate of 2 percent per year.

Projected Energy Load Growth Met by
Demand-Side Resources, 2009–2018