California Energy Commission Issues Revised Proposal for Implementation of GHG Provisions for the Power Source Disclosure Program

The California Energy Commission staff has issued a revised staff paper for implementation of new Power Source Disclosure (“PSD”) program requirements that were added by Assembly Bill (“AB”) 1110 in 2016. AB 1110 amended the program by requiring suppliers to also report and disclose the greenhouse gas (“GHG”) emission intensities and the unbundled renewable energy credits (“REC”) associated with their retail sales.

The staff’s paper, Revised Assembly Bill 1110 Implementation Proposal for Power Source Disclosure, is part of the pre-rulemaking process for AB 1110 implementation (Docket No. 16-OIR-05). The Energy Commission expects to commence a formal rulemaking in late 2018, which will introduce proposed regulatory language and commence the statutorily mandated one year deadline to conclude the rulemaking.

PSD Program Changes to Accommodate GHG Emissions Intensity

The GHG emissions intensity, or emissions factor, is the rate of GHG emissions that results from one megawatt of generation. AB 1110 requires GHG emissions intensity to be reported on Power Content Labels starting 2020, meaning data will be reported for 2019 retail sales. The Energy Commission has developed its GHG intensity proposal in consultation with the California Air Resources Board (“CARB”), and is making efforts for consistency with that agency’s Mandatory Reporting Regulation (“MRR”) for GHG emissions.

Proposed PSD program changes to accommodate reporting of GHG emissions intensity includes the following:

• To report an electricity portfolio’s total GHG emissions, total procured generation must be reconciled with retail sales. To do this, GHG emissions associated with self-consumption, transmission and distribution losses, power wheeling, and transmission-interconnected energy storage will be excluded.
• The PSD program considers procurement to fall under the category of specified sources and unspecified sources. Unspecified sources are procurements that cannot be traced to a specific generation source. For these and for spot market purchases, staff proposes using the MRR’s default emissions factor of 0.428 MT CO2e/MWh, as it may be revised by CARB.
• For each procurement claim from a specified resource, electricity suppliers will multiply the GHG emissions intensity of the generator by the total procurement from the generator. The Energy Commission will use the most recent MRR data to develop generator-specific emissions intensities.
• Specified sources have the subcategories of (1) directly delivered procurements, (2) firmed-and-shaped procurements, (3) null power and (4) asset-controlling suppliers’ (“ASC”) system power. Directly delivered procurements either have a first point of interconnection with a California balancing authority (“BA”), or have a first point of interconnection with distribution facilities used to serve end users within a California BA, or are scheduled from the generation source into a California BA via a continuous physical transmission path, or have an agreement to dynamically transfer electricity to a California BA. These sources are assigned the GHG emissions intensity of the generator. Firmed-and-shaped procurements are bundled products in which RECs are matched with incremental substitute electricity imported from outside a California BA. For this product, the GHG emissions intensities of the generator that produced the substitute electricity must be reported, and if not known, then it will be treated like unspecified electricity. Null power, which is electricity generated from a renewable resource that has been disassociated from its RECs, will be given the GHG intensity of the specified source, where the source is known. For procurement from asset-controlling suppliers, such as Powerex and Bonneville Power Administration, the Energy Commission will annually post the resource mix factors and system GHG emissions intensity factors for individual ACS system power procurements.
• For small generators that do not meet the MRR reporting threshold, Energy Commission staff will calculate GHG emissions using publically available EIA data and the MRR’s method for determining global worming potential of certain GHGs.
• For cogeneration, only the portion of GHG emissions associated with electricity generation would be used in the emissions intensity calculation. To determine this, staff will use EIA fuel consumption data.
• Retail suppliers' GHG emissions reporting shall include emissions from geothermal and biogenic sources; however, CO₂ emissions from biogenic sources would not be included in the GHG emission intensity calculation.
• For a POU that demonstrates it has generated GHG emission-free electricity in excess of retail and wholesale sales, such as a POU with considerable hydroelectric generation, emission credits may be generated. The credits will equal generation in excess of sales from the specified source multiplied by the default emissions factor for unspecified sources.These credits would have a 20-year life.

Proposed Treatment of RECs and Unbundled RECs

The Renewable Portfolio Standard program has a multiyear compliance period that allows retail suppliers to retire RECs up to 36-months from the generation date. The revised staff paper differentiates this program from the PSD program’s required annual reporting of an electric portfolio’s eligible renewable electricity. As such, the staff paper states that electricity from renewable energy sources should be reported according to the year it was generated, and these transactions only count if the REC and electricity were transacted together. Additionally, staff proposes that RECs will not be used to track or reduce GHG emissions. Unbundled RECs may not be classified as renewable energy in the PSD power mix, but suppliers can disclose their retired, unbundled RECs as a percentage of retail sales in a footnote on the Power Content Label.

A workshop is scheduled for February 1 and written comments are due February 23. Please contact Brian Biering if you have any concerns regarding AB 1110 implementation or are interested in assistance participating in the Energy Commission’s stakeholder processes.