California's regulatory agencies charged with reducing greenhouse gas emissions and ensuring the state's transition to renewable sources of electricity have been quite busy over the past couple of months.
On March 11, 2010, the California Air Resources Control Board ("CARB") released its preliminary draft regulations for a state Renewable Electricity Standard, or "RES." The RES would apply to publicly owned electric utilities (as well as other electricity providers) and is intended to complement the Renewable Portfolio Standard, or "RPS," which applies to investor-owned utilities (and other energy service providers). The primary purpose of the proposed RES regulations is to reduce greenhouse gas emissions associated with the generation of electricity by requiring electric utilities to provide 33 percent of their retail sales from renewable energy sources by 2020, as required by the RPS program. Many fear the RES regulations will not achieve the stated goal of complementing (rather than conflicting with) the RPS program. CARB is hosting public workshops on the proposed RES regulations this spring. It intends to release its final proposed RES regulations by June 3, 2010, and to adopt the regulations in July.
On March 11, 2010, the California Public Utilities Commission established the structure and rules for a carbon market through which electricity providers may procure and use tradable renewable energy credits to meet RPS requirements. A renewable energy credit is a certificate of proof that one unit of renewable energy has been generated. Under the Commission's new rules, utilities no longer will be required to procure exclusively "bundled" renewable contracts that include both the energy and the renewable energy credit associated with that energy. Utilities may now buy renewable energy credits separate from the associated energy.
Finally, CARB announced that it is considering revisions to its Mandatory Greenhouse Gas Reporting Regulations, including:
- Aligning California's mandatory reporting requirements with U.S. EPA's program;
- Requiring facilities with greenhouse gas emissions above 10,000 metric tons of CO2 equivalent to report, rather than the current threshold of 25,000 metric tons;
- Imposing new reporting requirements for industrial process emissions from iron and steel production, nitric acid production, oil and natural gas systems, glass manufacturing, lime production, and pulp and paper production;
- Revising reporting requirements for producers and importers of electricity; and
- Requiring producers and importers of natural gas and transportation fuels to report emissions arising from the downstream combustion of those fuels.
The revisions would apply to reports due in 2012 covering 2011 greenhouse gas emissions. CARB intends to release preliminary draft regulations in the spring and to hold public workshops this summer.