E ne rg y I mb alanc e Marke t (E I M) Oc to b e r 21, 2016 1 - - PowerPoint PPT Presentation

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Ma nda to ry GHG Re po rting a nd Ca p-a nd-T ra de Pro g ra m Wo rksho p E ne rg y I mb alanc e Marke t (E I M)

Oc to b e r 21, 2016

Ca lifo rnia Air Re so urc e s Bo a rd

Ac c o unting fo r E le c tric ity E missio ns Unde r AB 32

 AB 32: “Sta te wide GHG e missio ns” inc lude s a ll GHG

e missio ns fro m the g e ne ra tio n o f e le c tric ity de live re d to a nd c o nsume d in Ca lifo rnia , a c c o unting fo r tra nsmissio n a nd distrib utio n line s lo sse s, whe the r tha t e le c tric ity is g e ne ra te d in sta te o r impo rte d

 Ca lifo rnia po we r pla nts must re po rt fa c ility le ve l e missio ns

unde r MRR

 E

le c tric ity impo rte rs must re po rt impo rts b a se d o n physic a l de live ry o f e le c tric ity b y so urc e

 I

mpo rte d e le c tric ity re po rte d a s e ithe r spe c ifie d o r unspe c ifie d

2 Ca lifo rnia Air Re so urc e s Bo a rd

Spe c ifie d vs. Unspe c ifie d I mpo rts

 Spe c ifie d So urc e I

mpo rts

 I

mpo rte r must o wn, o pe ra te , o r c o ntra c t fo r the po we r

 Must b e dire c tly de live re d to Ca lifo rnia fro m the so urc e  Po we r must b e spe c ifie d whe n pa rtie s a g re e to de a l  Unspe c ifie d po we r c a nno t b e re so ld a s spe c ifie d po we r  Re po rt the le sse r o f po we r g e ne ra te d o r sc he dule d (with c e rta in

e xc e ptio ns)

 Unspe c ifie d I

mpo rts

 Ge ne ra tio n so urc e no t spe c ifie d whe n pa rtie s a g re e to de a l  Po we r tha t do e s no t me e t spe c ifie d so urc e re q uire me nts  Unspe c ifie d e missio n fa c to r c a pture s e missio ns impa c t fro m “ma rg ina l”

so urc e in we ste rn po we r ma rke ts

 E

I M impo rts c urre ntly b e ing re po rte d a s spe c ifie d po we r fro m pa rtic ipa ting re so urc e s ide ntifie d b y CAI SO’ s mo de l

3 Ca lifo rnia Air Re so urc e s Bo a rd

Ca lifo rnia Clima te Po lic ie s (1 o f 2)

 E

nsure a c c ura te a c c o unting o f full GHG b urde n o n the a tmo sphe re a s a c o nse q ue nc e o f e le c tric ity g e ne ra te d a nd c o nsume d in Ca lifo rnia

 Ne e de d to tra c k pro g re ss to wa rds the AB 32 g o a ls, inc luding

2020 ta rg e t, a nd a sse ss c o mplia nc e o b lig a tio ns in the Ca p- a nd-T ra de Pro g ra m

 E

nsure imple me nta tio n a nd de sig n o f po lic ie s suppo rting Ca lifo rnia GHG g o a ls

4 Ca lifo rnia Air Re so urc e s Bo a rd

 E

I M o ptimiza tio n le a ds to ina c c ura te GHG a c c o unting fo r e le c tric ity c o nsume d in CA in so me c a se s

 CAI

SO ha s disc usse d this issue in te rms o f e missio ns a sso c ia te d with a “prima ry” a nd “se c o nda ry” dispa tc h

 Prima ry dispa tc h is re fe rre d to in MRR a s e le c tric ity de sig na te d

b y CAI SO’ s E I M o ptimiza tio n mo de l a s e le c tric ity impo rte d to se rve Ca lifo rnia lo a d (se e “impo rte d e le c tric ity” de finitio n)

 Se c o nda ry dispa tc h illustra te s the po te ntia l b a c kfill e ffe c t o f

hig he r e mitting re so urc e s to se rve E I M lo a d whe n the

• ptimiza tio n a ttrib ute s lo we r e mitting re so urc e s to se rve

Ca lifo rnia lo a d

 Se c o nda ry dispa tc h no t de fine d in E

I M ta riff, se c o nda ry dispa tc h no t o b se rva b le b y ma rke t pa rtic ipa nts (CAI SO Ma rke t Re sults I nte rfa c e )

5 Ca lifo rnia Air Re so urc e s Bo a rd

Ca lifo rnia Clima te Po lic ie s (2 o f 2)

ARB Optio ns Unde r Co nside ra tio n fo r Addre ssing E I M Ac c o unting

6 Ca lifo rnia Air Re so urc e s Bo a rd

 I

nc re me nta l a b o ve -e c o no mic -b a se de e ming 1

 Mo difie d o ptimiza tio n with dyna mic hurdle ra te a nd

re ne wa b le c o ntra c ts fo r e xte rna l re so urc e s2

 Othe r o ptio ns, o r va ria tio ns o f o ptio ns, disc usse d b y

CAI SO a t the ir Oc to b e r 13, 2016 wo rksho p (e xc luding c re diting o f e xpo rte d e le c tric ity)

 Ope n to sta ke ho lde r pro po sa ls

1 Optio n 2 pre se nte d a t CAI

SO’ s Oc to b e r 13, 2016 wo rksho p

2 Mo dific a tio n to Optio n 3 pre se nte d a t CAI

SO’ s Oc to b e r 13, 2016 wo rksho p

I nc re me nta l De e ming Optio n

 CAI

SO o ptimize s e ne rg y b ids in the a b se nc e o f Ca lifo rnia lo a d a nd g e ne ra tio n the n o ptimize s E I M fo r a c tua l dispa tc h instruc tio ns

 De e me d g e ne ra tio n to se rve Ca lifo rnia lo a d wo uld

c o me fro m the inc re me nta l diffe re nc e b e twe e n the se two sc he dule s

 Ne e ds to e nsure o ptio n a ddre sse s e missio ns a c c o unting

c o nc e rns

 CAI

SO indic a te s full o ptimiza tio n no t c o mputa tio na lly po ssib le a t this time

7 Ca lifo rnia Air Re so urc e s Bo a rd

Dyna mic Hurdle Ra te Optio n (1 o f 2)

 Optimiza tio n a ssig ns impo rts a s de e me d de live re d to

Ca lifo rnia a t the 5-minute a ve ra g e e missio ns ra te o f the e xte rna l g rid

 Co st o f c o mplia nc e wo uld b e inc lude d in the o ptimiza tio n  E

I M impo rts no t a ssig ne d to spe c ific re so urc e s

 Se e king sta ke ho lde r input o n a lte rna tive c a lc ula tio ns o f hurdle

ra te

 Re ne wa b le c o ntra c ts e nte re d into b y Ca lifo rnia lo a d

se rving e ntitie s (L SE ) wo uld b e a ssig ne d a ze ro c o mplia nc e

• b lig a tio n

 E

I M impo rts with c o mplia nc e o b lig a tio n:

 E

I M I mpo rts = CA L

• a d – CA Supply – CA L

SE re ne wa b le c o ntra c ts

 Que stio n: Who wo uld b e a ssig ne d the c o mplia nc e

• b lig a tio n?

8 Ca lifo rnia Air Re so urc e s Bo a rd

 E

missio ns a c c o unting o f e ne rg y impo rts a t a ve ra g e syste m ra te

 Ma inta ins re c o g nitio n fo r re ne wa b le c o ntra c ts b y a pplying

ze ro e missio n fa c to r

 Se c o nda ry dispa tc h no t re le va nt: e ne rg y impo rts a ssig ne d

unifo rm inte rva l-spe c ific e missio ns ra te

 Co uld e xte nd to re g io na l ma rke t a nd multiple c a rb o n

pric ing re g ime s1

 CAI

SO va ria tio n o f this o ptio n re ta ins re so urc e spe c ific a ttrib utio n thro ug h de e ming g e ne ra tio n a nd a pplying a hurdle ra te fo r re ma ining e missio ns

9 Ca lifo rnia Air Re so urc e s Bo a rd

1 Multiple c a rb o n ma rke ts ma y re q uire future mo dific a tio n

Dyna mic Hurdle Ra te Optio n (2 o f 2)

10 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff will c o ntinue to wo rk with sta ke ho lde rs a nd CAI

SO to ide ntify o ptio ns a nd disc uss imple me nta tio n de ta ils

 Ple a se pro vide fe e db a c k a fte r wo rksho p o n the se o ptio ns

• r a dditio na l o ptio ns no t pre se nte d to da y (thro ug h 5pm o n

No ve mb e r 5, 2016)

 Sta ff will pro po se a so lutio n a s pa rt o f the 15-da y

re g ula to ry a me ndme nts fo r b o th MRR a nd Ca p-a nd- T ra de

Ne xt Ste ps

 Ma nda to ry Gre e nho use Ga s Re po rting Pro g ra m:

http:/ / www.a rb .c a .g o v/ c c / re po rting / g hg -re p/ g hg -re p.htm

 Ca p-a nd-T

ra de Pro g ra m:

http:/ / www.a rb .c a .g o v/ c c / c a pa ndtra de / c a pa nd tra d e .htm

 E

ma il q ue stio ns a nd c o mme nts to :

b yro nshe r@ c a le pa .c a .g o v

11 Ca lifo rnia Air Re so urc e s Bo a rd

Additio na l I nfo rma tio n

12

AB 197 & Po st-2020 Ca p-a nd- T ra de Pro g ra m De sig n

Oc to b e r 21, 2016

Ca lifo rnia Air Re so urc e s Bo a rd

 AB 197

 Prio ritize me a sure s re sulting in dire c t re duc tio ns while c o nside ring

the so c ia l c o sts o f c a rb o n a nd fo llo wing AB 32 re q uire me nts suc h a s c o nside ring c o st-e ffe c tive ne ss a nd minimizing le a ka g e

 Do e s no t pro hib it a c a p-a nd-tra de pro g ra m

 Se pte mb e r 2016 Bo a rd He a ring

 E

q uity a nd Ca p-a nd-T ra de Pa pe r

 Bo a rd me mb e r q ue stio ns re g a rding po te ntia l a dve rse impa c ts

to lo c a l a ir q ua lity

 Que stio ns re g a rding pro g ra m e ffe c tive ne ss fo r dire c t re duc tio ns

 E

JAC re c o mme nda tio ns

 Pre sc riptive re g ula tio ns in lie u o f po st-2020 Ca p-a nd-T

ra de Pro g ra m

Re vie w o f Pro g ra m De sig n

13 Ca lifo rnia Air Re so urc e s Bo a rd

 Co nside r whic h Pro g ra m fe a ture s c o uld b e re fine d to

suppo rt g re a te r e missio ns re duc tio ns a t c o ve re d e ntitie s

 Po te ntia l c ha ng e s must b e c o o rdina te d with o ur linke d

pa rtne rs

 Po te ntia l c ha ng e s will b e e va lua te d fo r impa c t to

c o mplia nc e c o st fo r c o ve re d e ntitie s

Po te ntia l De sig n Cha ng e s

14 Ca lifo rnia Air Re so urc e s Bo a rd

 An o ffse t c re dit re pre se nts a re a l, q ua ntifia b le ,

e nfo rc e a b le , ve rifia b le , a dditio na l, a nd pe rma ne nt GHG re duc tio n

 Offse t c re dits pro vide re duc tio ns o utside o f c o ve re d

se c to rs

 Offse t c re dits a re a c o mplia nc e c o st ma na g e me nt

fe a ture

 Curre nt o ffse t c re dit usa g e limit is 8%  Sta ff c o nside ring lo we ring the o ffse t usa g e limit po st-2020

 T

his c ha ng e wo uld b e sub je c t to c o st- c o nta inme nt/ e c o no mic a na lysis

Ro le o f Offse t Cre dits

15 Ca lifo rnia Air Re so urc e s Bo a rd

 Curre ntly, a llo wa nc e a llo c a tio n to industria l c o ve re d

e ntitie s is fo r le a ka g e pre ve ntio n a nd tra nsitio n a ssista nc e

 Allo c a tio n is c a lc ula te d b a se d o n pro duc tio n o r histo ric

e ne rg y use

 Allo c a tio n me tho do lo g y c o uld shift to a c o st-b urde n

a ppro a c h

 Allo c a tio n wo uld b e re duc e d a nnua lly to re fle c t re duc e d

c o mplia nc e o b lig a tio n o wing to e xpe c te d o nsite e missio ns re duc tio ns

 T

his shift in me tho do lo g y wo uld b e c o nsiste nt with the E AAC re c o mme nda tio n to mo ve to mo re a uc tio ning a nd le ss fre e a llo c a tio n

I ndustria l Allo wa nc e Allo c a tio n

16 Ca lifo rnia Air Re so urc e s Bo a rd

 ARB c o uld re tire so me o r a ll unso ld Sta te -o wne d

a llo wa nc e s with vinta g e ye a r 2020 o r e a rlie r

 T

he Pro g ra m a lre a dy inc lude s a se lf-re g ula ting me c ha nism fo r pe rio ds whe n a llo wa nc e de ma nd is lo w

 T

his a djustme nt c o uld b e do ne to re c o g nize tha t e missio ns a re c urre ntly de c lining fa ste r tha n a ntic ipa te d

 T

his c ha ng e wo uld b e sub je c t to c o st-c o nta inme nt e va lua tio n

 Must b e c o o rdina te d with linke d pa rtne r(s)

T re a tme nt o f Unso ld Allo wa nc e s

17 Ca lifo rnia Air Re so urc e s Bo a rd

18

Ma rke t Da ta T ra nspa re nc y

Ca lifo rnia Air Re so urc e s Bo a rd

Ma rke t I nfo rma tio n Curre ntly Co lle c te d b y ARB

 ARB c o lle c ts ma rke t se nsitive a nd c o nfide ntia l b usine ss

info rma tio n (CBI ) thro ug h

 CI

T SS Use r Re g istra tio n (kno w-yo ur-c usto me r da ta )

 Re g istra tio n (e mplo ye e s, o wne rs, c o rpo ra te a sso c ia tio ns)  Allo c a tio n (o utput da ta )  T

ra ding (pric e s, tra ding pa rtne r ide ntitie s, o the r c o ntra c t te rms)

 CI

T SS a c c o unt b a la nc e s (c o mplia nc e instrume nts he ld )

 Ce rta in ma rke t se nsitive info rma tio n a nd CBI

ma y b e e xe mpt fro m disc lo sure unde r the Ca lifo rnia Pub lic Re c o rds Ac t (PRA) a nd pro te c te d b y a pplic a b le priva c y la ws

 ARB pre ve nts a symme tric re le a se o f ma rke t se nsitive da ta to

a vo id c o nfe rring ma rke t a dva nta g e

19 Ca lifo rnia Air Re so urc e s Bo a rd

Re le a se o f I nfo rma tio n Co lle c te d By Ca p-a nd-T ra de Pro g ra m (1 o f 2)

 Curre nt re g ula tio n tre a ts so me info rma tio n a s c o nfide ntia l

 I

nfo rma tio n c o lle c te d dire c tly fro m individua ls (e .g ., CI T SS use rs)

 E

ntity re g istra tio n info rma tio n invo lving individua ls

 I

de ntity o f c o unte rpa rtie s to a CI T SS tra nsfe r

 Ac c o unt b a la nc e s o f ide ntifia b le individua l CI

T SS a c c o unts

 Allo c a tio ns, whic h a re b a se d o n CBI

• utput da ta

20 Ca lifo rnia Air Re so urc e s Bo a rd

 Curre nt re g ula tio n a llo ws pub lic a tio n o f o the r da ta

 Pric e s a nd q ua ntitie s o f individua l tra nsfe rs with ide ntitie s o f

pa rtie s ma ske d

 Ag g re g a te d o r o the rwise no n-ide ntifia b le CI

T SS a c c o unt ho lding s

 Re tire me nts b y q ua ntity, vinta g e a nd instrume nt type

(a g g re g a te d a nd e ntity-spe c ific )

 Da ta ma y b e re le a se d a s pa rt o f ma rke t inve stig a tio n a nd

e nfo rc e me nt (inc luding sha ring with F e de ra l a g e nc ie s)

 Pro po se d re g ula to ry a me ndme nts do no t a lte r po te ntia l

re le a se s

21

Re le a se o f I nfo rma tio n Co lle c te d By Ca p-a nd-T ra de Pro g ra m (1 o f 2)

Ca lifo rnia Air Re so urc e s Bo a rd

Ma rke t Da ta Ava ila b le Online

 Qua rte rly CI

T SS Re g istra nt Re po rts list a ll re g iste re d e ntitie s a nd c o rre spo nding re po rting fa c ility I Ds

 Qua rte rly Auc tio n Summa ry Re sults Re po rts inc lude s a uc tio n

se ttle me nt pric e , q ua ntitie s so ld, a nd b id me tric s

 Annua l Co mplia nc e Re po rts inc lude re tire me nts b y e ntity,

instrume nt type , a nd vinta g e

 Annua l summa ry o f tra nsfe rs re po rts c o nta in to ta l tra nsfe rs,

q ua ntity a nd a ve ra g e pric e b y instrume nt type (b e g inning with 2014 da ta )

 Qua rte rly Co mplia nc e I

nstrume nt Re po rt c o nta ins a g g re g a te d a c c o unt da ta b y vinta g e a nd a c c o unt type

 Da ta re la te d to Ca p-a nd-T

ra de

 GHG E

missio ns Re po rting (a nnua l b y re po rting e ntitie s)

 Pro c e e ds a nd Ca lifo rnia Clima te I

nve stme nts

 Ove rvie w: https:/ / www.a rb .c a .g o v/ c c / c a pa ndtra de / pub lic _info .pdf

22 Ca lifo rnia Air Re so urc e s Bo a rd

Additio na l Ma rke t Da ta Pub lic a tio n Unde r Co nside ra tio n

 ARB pub lishe s tra nsfe r q ua ntitie s a nd a ve ra g e pric e s

a nnua lly. Co nside ring if po ssib le to pub lish mo re fre q ue ntly

 E

missio ns Ma rke t Adviso ry Co mmitte e (E MAC) sug g e ste d:

 Ma rke t ne e ds mo re info rma tio n o n a va ila b ility o f instrume nts vs.

• b lig a tio ns

 Me tric : e ntity po sitio ns (e ntity-le ve l ho lding s vs. o b lig a tio ns, ma sk

ide ntitie s)

 F

• rma t: b a r g ra ph ra ng ing fro m e ntitie s with lo ng e st to sho rte st

po sitio n b a se d o n e stima te d o b lig a tio ns

 https:/ / www.a rb .c a .g o v/ c c / c a pa ndtra de / e missio nsma rke ta sse

ssme nt/ info rma tio n_re le a se _2014fe b _re v.pdf

 Sta ff c o ntinue s to disc uss with pa rtne r jurisdic tio ns a nd to

a sse ss whe n this type o f info rma tio n c o uld b e re a dy fo r re le a se

23 Ca lifo rnia Air Re so urc e s Bo a rd

Wha t a dditio na l info rma tio n sho uld b e ma de pub lic ?

 ARB sta ff is so lic iting ide a s o n wha t a dditio na l info rma tio n

c o uld b e ma de pub lic

 Re q ue st sta ke ho lde rs sub mit ide a s, inc luding a ra tio na le fo r

why suc h da ta is impo rta nt to re le a se , whe n sub mitting c o mme nts o n this wo rksho p

 As me ntio ne d pre vio usly, sta ff will c o ntinue to disc uss with

pa rtne r jurisdic tio ns to a sse ss o the r type s o f info rma tio n re le a se

24 Ca lifo rnia Air Re so urc e s Bo a rd

25

Que stio ns a nd Co mme nts

Ca lifo rnia Air Re so urc e s Bo a rd

26

Po st-2020 Allo wa nc e Allo c a tio n

Oc to b e r 21, 2016

Ca lifo rnia Air Re so urc e s Bo a rd

 Dire c t a llo c a tio n is pro vide d to minimize e missio ns

le a ka g e a nd to pro vide tra nsitio n a ssista nc e in the first a nd se c o nd c o mplia nc e pe rio ds o f the pro g ra m (2013–2017)

 All se c to rs re c e ive 100% a ssista nc e fa c to r (i.e ., 100% x

b e nc hma rk x c a p a djustme nt fa c to r x o utput o r histo ric a l fue l use )

 I

n the third c o mplia nc e pe rio d (2018–2020), a ssista nc e fa c to rs will de c re a se fo r se c to rs a t me dium (75 pe rc e nt) a nd lo w (50 pe rc e nt) risk o f le a ka g e

 E

a c h c o ve re d se c to r’ s risk o f le a ka g e wa s de te rmine d thro ug h a na lysis o f e missio ns inte nsity a nd tra de e xpo sure

I ndustria l Allo c a tio n: 2013–2020 Assista nc e F a c to rs

27 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff pro po se s to utilize le a ka g e studie s c o mple te d in 2016

to c a lc ula te a ssista nc e fa c to rs fo r the po st-2020 pe rio d

 Po st-2020 a ssista nc e fa c to rs wo uld b e c a lc ula te d a s the

sum o f two c o mpo ne nts ta rg e te d to minimize inte rna tio na l le a ka g e risk a nd do me stic le a ka g e risk:

Sta ff Pro po sa l fo r Po st-2020 Assista nc e F a c to rs

28 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff pro po se s to c a lc ula te inte rna tio na l le a ka g e risk

using inte rna tio na l ma rke t tra nsfe r (I MT ) fro m the UC Be rke le y le a ka g e study

 I

MT = pe rc e nt o f e ve ry do lla r de c re a se in do me stic va lue a dde d tha t is o ffse t b y a n inc re a se in inte rna tio na l pro duc tio n in re spo nse to a GHG c o mplia nc e c o st

I nte rna tio na l L e a ka g e Pre ve ntio n: Studie d Se c to rs (1 o f 2)

29 Ca lifo rnia Air Re so urc e s Bo a rd

 I

ndustry-spe c ific I MT wo uld b e c a lc ula te d a s the simple a ve ra g e o f ra w I MT (i.e ., I MT dire c tly fro m the UC Be rke le y study) a nd a re g re ssio n I MT

 T

he re g re ssio n I MT use s line a r re g re ssio n o f a se c to r’ s ra w I MT re la tive to tra de e xpo sure a nd e ne rg y c o st inte nsity to o b ta in c o e ffic ie nts:

 T

his smo o thing wa s re c o mme nde d b y the UC Be rke le y re se a rc he rs

 Re g re ssio n I

MT = (tra de e xpo sure c o e ffic ie nt * industry tra de e xpo sure ) + (e ne rg y c o st inte nsity c o e ffic ie nt * industry e ne rg y c o st inte nsity)

 Se c to rs with hig h tra de e xpo sure wo uld re c e ive hig h re g re ssio n I

MT

 Appro a c h is de sc rib e d o n pa g e s 4 a nd 5 o f the info rma l sta ff

pro po sa l (https:/ / www.a rb .c a .g o v/ c c / c a pa ndtra de / me e ting s/ 20161021/ c t- a f-pro po sa l-101416.pdf )

I nte rna tio na l L e a ka g e Pre ve ntio n: Studie d Se c to rs (2 o f 2)

30 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff pro po se s to c a lc ula te do me stic le a ka g e risk using

do me stic dro p fro m the Re so urc e s fo r the F uture (RF F ) le a ka g e study

 Do me stic dro p is the e stima te o f de c re a se s in o utput o r va lue

a dde d due to do me stic c o mpe titio n b a se d o n a GHG c o mplia nc e c o st

 Sta ff use d fo ur do me stic dro p va lue s, two fro m the RF

F study a nd two va lue s c a lc ula te d a s re g re ssio ns o f tho se va lue s:

 Va lue a dde d do me stic dro p  Output do me stic dro p  Re g re sse d va lue a dde d do me stic dro p  Re g re sse d o utput do me stic dro p

 Re g re sse d va lue s smo o th RF

F e stima te s b a se d o n e ne rg y c o st inte nsity

Do me stic L e a ka g e Pre ve ntio n: Studie d Se c to rs (1 o f 3)

31 Ca lifo rnia Air Re so urc e s Bo a rd

 F

• r the do me stic c o mpo ne nt o f the a ssista nc e fa c to r, sta ff

pro po se s to use the a ve ra g e o f the a ssista nc e fa c to r fo r e a c h do me stic dro p tha t pre ve nts a 7 pe rc e nt dro p in (re g re sse d o r no n-re g re sse d) o utput o r va lue a dde d a t the 2022 a uc tio n re se rve pric e . F

• r e xa mple , fo r va lue -a dde d do me stic dro p fo r

se c to r X:

 20 pe rc e nt a ssista nc e fa c to r  7.2% va lue -a dde d do me stic dro p  30 pe rc e nt a ssista nc e fa c to r  6.5% va lue -a dde d do me stic dro p  T

he re fo re , se c to r X re c e ive s 30 pe rc e nt a ssista nc e fa c to r fo r the va lue -a dde d do me stic dro p me tho do lo g y

 Pro po se d do me stic a ssista nc e fa c to r c o mpo ne nt =

a ve ra g e o f fo ur a ssista nc e fa c to rs de te rmine d b y a pplic a tio n o f e a c h do me stic dro p

Do me stic L e a ka g e Pre ve ntio n: Studie d Se c to rs (2 o f 3)

32 Ca lifo rnia Air Re so urc e s Bo a rd

 So me studie d se c to rs ha ve e missio ns no t c o nside re d b y the

do me stic (Re so urc e s fo r the F uture ) le a ka g e study

 T

a b le 2 o f the info rma l sta ff pro po sa l lists the fra c tio n o f e missio ns fro m fue ls c o nside re d b y the do me stic study ve rsus:

 Pro c e ss e missio ns;  No n-purc ha se d fue l e missio ns (e .g ., re fine ry fue l g a s); a nd  Co a l a nd c o ke use (e .g ., c e me nt industry)

 Re g re ssio n do me stic dro p e stima te s re g re ss industry do me stic

dro ps (va lue a dde d o r o utput) o n lo g g e d e ne rg y inte nsity

 F

• r se c to rs liste d in ta b le 2, e ne rg y inte nsity is a djuste d upwa rds a s

fo llo ws: re g re ssio n e ne rg y inte nsity = do me stic study e ne rg y inte nsity / (ta b le 2 purc ha se d fue ls fra c tio n)

Do me stic L e a ka g e Pre ve ntio n: Studie d Se c to rs (3 o f 3)

33 Ca lifo rnia Air Re so urc e s Bo a rd

 Po st-2020 a ssista nc e fa c to rs fo r no n-studie d se c to rs a re sho wn

a s “T BD”

 Sta ff’ s initia l pla n wa s to ma tc h no n-studie d se c to rs to I

MT a nd do me stic dro p o f o ve ra ll ma nufa c turing se c to r using :

 E

ne rg y c o st inte nsity da ta fro m U.S. E c o no mic Ce nsus

 T

ra de e xpo sure da ta fro m U.S. Ce nsus a nd USA T ra de Online

 T

his a ppro a c h is simila r to re g re sse d I MT a nd re g re sse d do me stic dro p a ppro a c he s fo r ma nufa c turing (a lso a djuste d fo r pro c e ss e missio ns)

 Ho we ve r, sta ff disc o ve re d misma tc he s in da ta b e twe e n the U.S.

Ce nsus a nd USA T ra de Online da ta

 Sta ff is fo llo wing up with U.S. Ce nsus sta ff to c he c k da ta q ua lity fo r

a ll no n-studie d se c to rs

 Sta ff re q ue sts sug g e stio ns fo r o the r a pplic a b le da ta so urc e s fo r

the se se c to rs

No n-Studie d Se c to rs

34 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff a iming fo r tra nspa re nc y in info rma l sta ff pro po sa l a nd

a c c o mpa nying inte rna tio na l study da ta se t1 re le a se

 T

• da y’ s wo rksho p c o ntinue s the c o nve rsa tio n b e g un in

the 45-da y rule ma king pa c ka g e o n po st-2020 industria l a llo c a tio n:

 Wo rksho p c o mme nt pe rio d (thro ug h 5 pm o n No ve mb e r 5, 2016)

– Sta ff e spe c ia lly re q ue sts sug g e stio ns o n da ta so urc e s to use to a pply the pro po se d a ssista nc e fa c to r c a lc ula tio n me tho do lo g y to no n-studie d se c to rs

 Offic ia l 15-da y c o mme nt pe rio d

Co nc luding T ho ug hts

35 Ca lifo rnia Air Re so urc e s Bo a rd 1 https:/ / www.a rb .c a .g o v/ c c / c a pa nd tra d e / me e ting s/ 20161021/ uc b -le a ka g e -stud y-d a ta .xlsx

36

Po st-2020 Allo wa nc e Allo c a tio n to E le c tric a l Distrib utio n Utilitie s (E DUs)

Ca lifo rnia Air Re so urc e s Bo a rd

 I

n re spo nse to sta ke ho lde r c o mme nts, sta ff is c o nside ring a re fine me nt to the pre vio usly pro po se d po st-2020 e le c tric a l distrib utio n utility (E DU) a llo c a tio n me tho do lo g y, a nd pre se nte d two o ptio ns, b o th b a se d o n c o st b urde n

 Co st b urde n is the a ntic ipa te d inc re me nta l c o st o f po we r to

se rve lo a d due to the re q uire me nt to surre nde r c o mplia nc e instrume nts in the Ca p-a nd-T ra de Pro g ra m

 T

he a llo c a tio n c a lc ula tio n me tho do lo g y is simila r to the me tho do lo g y use d fo r 2013-2020 a llo c a tio n to E DUs

 Also in re spo nse to sta ke ho lde r c o mme nts, sta ff is

re c o nside ring the pre vio us pro po sa l to re mo ve the RPS a djustme nt po st-2020

2021-2030 Allo c a tio n to E le c tric a l Distrib utio n Utilitie s

37 Ca lifo rnia Air Re so urc e s Bo a rd

 Ca lc ula te Pro g ra m c o st b urde n fo r e a c h ye a r (2021–2030)

 Da ta so urc e s a re CE

C’ s 2015 de ma nd fo re c a st a nd E DUs’ 2015 S-2 re so urc e pla ns (whe re a va ila b le )

 Co st b urde n wo uld b e b a se d o n e missio ns fro m na tura l g a s (0.4354

MT CO 2e / MWh) a nd so lid fue l re so urc e s (g e ne ra to r-spe c ific e missio n fa c to r)

 Na tura l g a s g e ne ra tio n = (to ta l g e ne ra tio n fo r lo a d) – (c o a l

g e ne ra tio n) – (ze ro -e missio n g e ne ra tio n)

 E

a c h E DU is a ssume d to me e t ma nda te d RPS re q uire me nts (33 pe rc e nt o f lo a d in 2020 to 50 pe rc e nt o f lo a d in 2030)

 L

• a d se rve d b y na tura l g a s is a ssume d to ne ve r dro p b e lo w 5

pe rc e nt to a c c o unt fo r suppo rt fo r va ria b le re ne wa b le re so urc e s

 Re duc e a llo c a tio n e a c h ye a r with the c a p

2021-2030 E DU Allo c a tio n Me tho do lo g y Pro po sa l (1 o f 2)

38 Ca lifo rnia Air Re so urc e s Bo a rd

 F

• r E

DUs with industria l c o ve re d e ntity c usto me rs, c a lc ula te d c o st b urde n is re duc e d to a c c o unt fo r e missio ns a sso c ia te d with industria l c o ve re d e ntitie s’ purc ha se d e le c tric ity

 E

a c h E DU’ s industria l c o ve re d e ntity e missio ns wo uld b e c a lc ula te d a s the pro duc t o f b a se line e le c tric ity c o nsumptio n, e a c h ye a r’ s c a p a djustme nt fa c to r, a nd a n E DU-spe c ific e missio n fa c to r fo r e a c h ye a r

 I

ndustria l c o ve re d e ntity info rma tio n fo r e a c h E DU (to the e xte nt a llo we d b y c o nfide ntia lity) is sho wn in the la st two c o lumns o f T a b le 1 o f sta ff’ s info rma l E DU pro po sa l: https:/ / www.a rb .c a .g o v/ c c / c a pa ndtra de / me e ting s/ 20161021/ c t-e du-a llo c a tio n-101416.pdf

2021-2030 E DU Allo c a tio n Me tho do lo g y Pro po sa l (2 o f 2)

39 Ca lifo rnia Air Re so urc e s Bo a rd

 T

he o nly diffe re nc e b e twe e n the two o ptio ns unde r c o nside ra tio n is the a ssume d lo a d fo r e a c h ye a r

 Optio n 1: E

DUs’ g e ne ra tio n fo r lo a d c ha ng e s o ve r time a s e stima te d in the CE C de ma nd fo re c a st o r S-2s

 Optio n 2: L

• a ds a re fixe d fo r 2021–2030 a t the le ve l

e stima te d fo r 2020 in the de ma nd fo re c a st o r S-2s

Optio ns Unde r Co nside ra tio n

40 Ca lifo rnia Air Re so urc e s Bo a rd

 No to p-do wn c o mpo ne nt b a se d o n a n e le c tric ity se c to r-wide

a llo c a tio n with a pe rc e nta g e o f to ta l to e a c h E DU

 No e ne rg y e ffic ie nc y/ e a rly a c tio n c re dit b e c a use e a rly a c tio n

ha s a lre a dy b e e n re c o g nize d a nd e ne rg y e ffic ie nc y/ RPS re q uire me nts a re no w e sse ntia lly the sa me fo r a ll E DUs

 No a ssumptio n tha t po we r fro m re ne wa b le q ua lifying fa c ilitie s

is pric e d a t ma rke t

 Pro je c te d a mo unt o f po we r fro m re ne wa b le QF

s: 101 GWh in 2024 (do wn fro m 3,121 GWh in 2013; so urc e : 2015 S-2s)

 Ca lc ula te d c o st b urde n fo r E

DUs with industria l c o ve re d e ntitie s wo uld b e re duc e d to a c c o unt fo r e missio ns a sso c ia te d with purc ha se d e le c tric ity

Diffe re nc e s fro m the 2013-2020 E DU Allo c a tio n Me tho do lo g y

41 Ca lifo rnia Air Re so urc e s Bo a rd

 Pre vio us sta ff pro po sa l fro m 45-da y a me ndme nt pa c ka g e :

e limina te the RPS a djustme nt a fte r 2020 a nd pro vide E DUs with po st-2020 a llo c a tio n to c o mpe nsa te fo r inve stme nts in re ne wa b le e le c tric ity tha t is no t dire c tly de live re d to Ca lifo rnia

 I

n re spo nse to sta ke ho lde r c o mme nts, sta ff no w pro po se s to c o ntinue the RPS a djustme nt with the e xisting re po rting a nd ve rific a tio n re q uire me nts, a nd to no t pro vide a ny a dditio na l po st-2020 a llo c a tio n a s a sub stitute

 Sta ff c o ntinue s to wo rk with re po rte rs o n ho w to c la im a n

RPS a djustme nt in c o mplia nc e with MRR

RPS Adjustme nt

42 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff will c o ntinue to c o o rdina te with e ne rg y a g e nc ie s

a nd sta ke ho lde rs to a sse ss the po te ntia l fo r a llo c a ting fo r e missio ns re sulting fro m e le c trific a tio n o f tra nspo rta tio n

E le c trific a tio n o f T ra nspo rta tio n

43 Ca lifo rnia Air Re so urc e s Bo a rd

44

Additio na l Pro po sa ls Re la te d to Allo wa nc e Allo c a tio n

Ca lifo rnia Air Re so urc e s Bo a rd

Po st-2020 Na tura l Ga s Supplie r Allo c a tio n

 As pro po se d in the I

nitia l Sta te me nt o f Re a so ns (I SOR) to the 45-da y a me ndme nt pa c ka g e , sta ff still pro po se s tha t na tura l g a s supplie r a llo c a tio n c o ntinue po st-2020 b a se d

• n the c urre nt c a lc ula tio n me tho do lo g y

 Co nsiste nt with the pro po sa l in the I

SOR, sta ff pro po se s tha t na tura l g a s supplie rs c o nsig n 100 pe rc e nt o f a llo wa nc e s sta rting in 2021 (o ptio n 1 fro m Ma rc h 29 wo rksho p)

 I

nc re a se d c o nsig nme nt inc e ntivize s inc re a se d GHG re duc tio ns

 F

ull c o nsig nme nt a lig ns with E DU c o nsig nme nt re q uire me nt a nd c re a te s e q uity b e twe e n e ntitie s tha t a re dire c tly a nd indire c tly c o ve re d b y the Pro g ra m

45 Ca lifo rnia Air Re so urc e s Bo a rd

 Sta ff still pro po se s tha t po st-2020 a llo c a tio n to unive rsitie s

a nd pub lic se rvic e fa c ilitie s, le g a c y c o ntra c t g e ne ra to rs with industria l c o unte rpa rtie s, a nd pub lic who le sa le wa te r a g e nc ie s wo uld c o ntinue unde r the c urre nt me tho do lo g ie s

 Allo c a tio ns wo uld a djust e a c h ye a r with the c a p a djustme nt

fa c to r

Othe r Po st-2020 Allo wa nc e Allo c a tio n

46 Ca lifo rnia Air Re so urc e s Bo a rd

Pro po se d 2021–2030 Ca p Adjustme nt F a c to rs

47 Ca lifo rnia Air Re so urc e s Bo a rd

Ye ar c t Standar d Nonstandar d#

2020 0.851 0.925 2021 0.817 0.908 2022 0.783 0.891 2023 0.749 0.874 2024 0.715 0.857 2025 0.681 0.840 2026 0.647 0.823 2027 0.613 0.806 2028 0.579 0.789 2029 0.545 0.772 2030 0.511 0.755

# No nsta nda rd se c to rs a re tho se with g re a te r tha n 50 pe rc e nt pro c e ss e missio ns a nd hig h le a ka g e risk.

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Ca p Adjustme nt F a c to r (c t) No nsta nda rd Sta nda rd

#

 T

he c urre nt Re g ula tio n inc lude s a limite d e xe mptio n o f e missio ns fo r wa ste -to -e ne rg y fa c ilitie s thro ug h 2015

 I

n this ye a r’ s 45-da y a me ndme nts to the Re g ula tio n, sta ff pro po se d e xte nding this e xe mptio n thro ug h the se c o nd c o mplia nc e pe rio d (i.e ., thro ug h 2017)

 T

he E nviro nme nta l Justic e Adviso ry Co mmitte e ha s re c o mme nde d tha t the se fa c ilitie s b e sub je c t to a c o mplia nc e o b lig a tio n

 I

n re spo nse to this re c o mme nda tio n a nd disc ussio n a t

Se pte mb e r Bo a rd he a ring , sta ff pla ns to re ve rt to the e xisting la ng ua g e (i.e ., with the limite d e xe mptio n e nding in 2015) in 15-da y c ha ng e s to the Re g ula tio n

Wa ste -to -E ne rg y L imite d E xe mptio n o f E missio ns

48 Ca lifo rnia Air Re so urc e s Bo a rd

T e nta tive Sc he dule

 Ca p-a nd-T

ra de Re g ula tio n

 No ve mb e r Annua l Bo a rd upda te  F

a ll re le a se o f first 15-da y c ha ng e s

 E

a rly 2017 re le a se o f po te ntia l se c o nd 15-da y c ha ng e s

 Spring 2017 fina l b o a rd he a ring  Wo rksho ps– to b e no tic e d

 Sc o ping Pla n

 No ve mb e r 7th– Po lic y sc e na rio s wo rksho p  No ve mb e r Bo a rd upda te o n po lic y sc e na rio s  L

a te No ve mb e r – Dra ft Sc o ping Pla n re le a se

 Ja nua ry – F

irst full dra ft with CE QA

 Ma rc h – F

ina l dra ft

 Wo rksho ps– to b e no tic e d

49 Ca lifo rnia Air Re so urc e s Bo a rd

Que stio ns/ Co mme nts

50 Ca lifo rnia Air Re so urc e s Bo a rd

 An info rma l c o mme nt pe rio d will run thro ug h F

rida y, No ve mb e r 4 a t 5 pm:

 https:/ / www.a rb .c a .g o v/ lispub / c o mm2/ b c sub fo rm.php? listna me

=c t-a me ndme nts-ws&c o mm_pe rio d=1

 Sta ff will c o nside r c o mme nts whe n dra fting the ne xt (15-

da y) re g ula to ry a me ndme nts fo r re le a se this fa ll