CARB’s revised discussion draft removes a previously proposed de minimis exemption for owners of SF6 GIE.

On August 15, 2019, California Air Resources Board (CARB) staff published a revised discussion draft (Revised Draft) of potential changes to the Regulation for Reducing Sulfur Hexafluoride Emissions from Gas Insulated Switchgear (SF6 Regulation). The Revised Draft takes into account comments received from stakeholders in the past several months. Notably, it proposes several significant changes to the SF6 Regulation, including removing a previously proposed de minimis exemption to compliance with the SF6 Regulation emissions limit and revising the phase-out schedule for SF6 gas-insulated equipment (GIE). Latham & Watkins examined the previous discussion draft in this March 4, 2019, blog post.

CARB held a workshop in Sacramento the same day it released the Revised Draft, during which staff presented an overview of the changes, answered stakeholders’ questions, and solicited any questions or concerns stakeholders may have. CARB is accepting public comments on the Revised Draft through August 29, 2019.

Updated Proposals

The Revised Draft’s proposed changes to the SF6 Regulation include the following:

Removing the de minimis exemption. Under the previous discussion draft, GIE owners with less than 5,500 MTCO2e of average capacity would not have been required to comply with an emissions limit. This de minimis exemption would have allowed smaller GIE owners relief from the rule’s stringent requirements, while requiring an estimated 99% of GIE capacity in the state to comply with an emissions limit. However, the Revised Draft removes the de minimis exemption. CARB now proposes that the annual emissions limit for smaller GIE owners be at 5% of baseline capacity.

Setting the baseline in 2019. Complicating matters, under the Revised Draft a GIE owner would face an emissions limit tied to the owner’s average capacity as of 2019. There is no mechanism to adjust average capacity, and thus the applicable emissions limit, to take into account new GIE placed in service after 2019. For example, if a new facility were to begin operations in 2021, the facility’s emissions limit would be zero. Even if the facility experienced a mechanical failure of only one GIE resulting in a release of an infinitesimal amount of insulating gas, the GIE owner would be in violation of the regulation, assuming the gas has a global warming potential (GWP) of 1 or greater. This proposed change could push those installing new GIE toward nitrogen or vacuum GIE (if available at reasonable cost).

Maintaining emissions limits for larger GIE owners. The Revised Draft maintains the previous draft’s larger GIE owner threshold at 5,500 MTCO2e despite multiple comments suggesting that this threshold be increased to 10,000 MTCO2e. CARB proposes maintaining the emissions limits of 1% (of baseline 2019 capacity) for years 2020 through 2034. After 2034, these limits would gradually decrease to reach 0.60% by 2049.

Phasing out the use of SF6 in newly acquired GIE. CARB staff is asking for additional comment on a revised proposed phase-out schedule that would prohibit the acquisition of new SF6 GIE after certain dates. This new phase-out schedule, developed based on staff communication with GIE manufacturers and stakeholder comments, addresses transmission-level and distribution-level GIE and sets phase-out dates based on the voltage class of equipment, the interrupting current, and the above/below ground placement. For distribution-level SF6 GIE, commenters have suggested phase-out dates of: (a) January 1, 2025, for aboveground GIE that is less than or equal to 17.5 kV; (b) January 1, 2031, for aboveground GIE that is greater than 17.5 kV; and (c) January 1, 2031, for belowground GIE regardless of kV. For all other SF6 GIE, commenters have suggested that the phase-out should take place between January 1, 2025, and January 1, 2029, unless voltage is greater than 145 kV, in which case the phase-out date would be either January 1, 2029, or January 1, 2031, depending on the exact size.

Easing the phase-out exemption process. CARB has requested comment on whether to ease the process for obtaining an exemption to the GIE phase-out requirement, particularly in the event of a catastrophic failure.

The Revised Draft also proposes the following changes:

  • GIE owners must account for “permanently decommissioned” GIE.
  • Reporting is not required for GIE that uses an insulating gas with a GWP of less than 1.
  • Defective SF6 GIE may be exchanged for new SF6 GIE after the phase-out if it is still under the manufacturer’s warranty.
  • Replacement parts are not subject to the phase-out.
  • GIE owners are subject to monitoring, recordkeeping, and reporting requirements for gas carts.

Conclusion

The Revised Draft’s proposed changes to the SF6 Regulation would still require GIE owners to further reduce SF6 emissions starting in 2020, and to eventually replace all SF6 GIE with alternative technology. With this regulation, CARB appears to be pushing stakeholders to adopt and install equipment utilizing nitrogen gas or vacuum technology as opposed to other insulating gases with higher GWPs. The technological and economic feasibility of this transition are subject to uncertainty. CARB has provided an economic analysis suggesting that costs to replace SF6 GIE would not be substantial given reduced maintenance and reporting costs, though stakeholders have taken issue with those estimates.

CARB staff anticipates that a proposed amended rule will be presented to the Board in early 2020 and will become effective in late 2020.