April12,2016
RajinderSahota
BranchChief
CaliforniaCap-and-TradeProgram
CaliforniaAirResourcesBoard(ARB)
1001IStreet
Sacramento,CA95814
Re:CommentsofCenterforResourceSolutions(CRS)inresponsetotheMarch29,2016Workshopon
Cap-and-TradeRegulationPost-2020EmissionsCapsandAllowanceAllocation
DearMs.Sahota:
CRSappreciatestheopportunitytosubmitcommentsregardingpotential2016amendmentstotheCapand-TradeRegulationsdiscussedattheARB’sMarch29,2016WorkshoponCap-and-TradeRegulation
Post-2020EmissionsCapsandAllowanceAllocation.Specifically,thesecommentspertaintoslide32of
theARB’spresentationonVoluntaryRenewableElectricity(VRE)allowanceretirement.
1. WestronglysupportthepreservationandcontinueduseoftheVREreserveaccount
mechanism1toaccommodatethevoluntarymarketsforrenewableenergyinCalifornia.
StaffisproposingtocontinueVoluntaryRenewableElectricity(VRE)allowanceretirement,andwe
stronglysupportthisproposal.TheVREreserveaccounthaswidesupport—whenadoptedinCalifornia,
over50organizationspublicallysupportedsuchapolicy,includingenergycompanies,project
developers,environmentalandpublichealthadvocates,industryassociations,academicinstitutions,
andothers.2ThemechanismallowsVREpurchasestoreducetheoveralllevelofgreenhousegas
emissionsinCalifornia,andletCaliforniaenjoythebenefitsprovidedbysuchamarket.Withoutthe
inclusionoftheVREreserveaccount,VREpurchaseswouldnolongerreduceemissionsbeyondthelevel
ofthecap.
Thevoluntaryrenewableenergymarketpromotescleanenergydevelopment,whichinturnleadsto
morejobsandgreatereconomicgrowth.Itleveragesprivate,non-ratepayerfundingtohelpspeedthe
transitiontorenewableenergysources.Itprovidesapathwaywherebytheappetiteforvoluntaryaction
canbechanneledtocleanenergydevelopmentinCalifornia,andavoidsasituationwherebythe
willingnesstoinvestinvoluntaryactionisdivertedtoout-of-stateprojects.TheVREreserveaccountwill
helpCaliforniaachieveitsclimategoalsbeyond2020byencouragingin-statecleanenergydevelopment.
DiscontinuingtheVREreserveaccountwouldfailtoadequatelyrecognizethecarbon-reductionvalueof
voluntaryrenewableenergypurchasesandon-sitegeneration,themanybenefitsofvoluntary
renewablemarketswouldbelost,andthecappedlevelwouldbecometheceilingforgreenhousegas
1
2
17CCR§95841.1
SeethePreviousCommentsonVRESetAsideMechanismslistedbelow.
emissionsreductionsinsteadofthefloor.Thiswoulddiscourageallactors,andspecificallycommercial
customers,frommakingprivateinvestmentsinrenewableenergy.
PreviousCommentsonVRESetAsideMechanisms
• JointLetterinSupportforVoluntaryRenewableEnergySet-AsideintheProposedCaliforniaCapand-TradeProgram,December13,2010,http://resource-solutions.org/site/wpcontent/uploads/2015/08/Voluntary-Renewable-Set-Aside_12-13-10.pdf
• CoalitionlettertoKevinKennedy,CARBOfficeofClimateChangeontheissueofoff-the-top
treatmentofvoluntaryrenewableenergypurchases,June7,2010,http://www.resourcesolutions.org/pub_pdfs/nonprofit_and_clean_energy_coalition_7_7_2010.pdf
• CommentsofRenewableEnergymarketsAssociation(REMA)onaWesternClimateInitiative
(WCI)paper,February19,2010,http://www.renewablemarketers.org/pdf/file_111.pdf
• LettertoSenatorBoxeronRecommendedChangestoCap-and-TradeDesignUnderACESAto
SupporttheVoluntaryRenewableEnergyMarket,July23,2009,http://resourcesolutions.org/site/wp-content/uploads/2015/08/Senate_EPW__off_the_top_072309.pdf
• LettertoClaudiaOrlando,CaliforniaAirResourcesBoardsupportingoff-the-topapproachto
voluntaryrenewableenergypurchasesinaCaliforniacap-and-tradeprogram,June12,2009,
http://resource-solutions.org/site/wp-content/uploads/2015/08/Center-for-ResourceSolutions-comment.pdf
2. TheVREprogramhasbeenundersubscribedto-datelikelyduetoalackofawarenessonthe
partofself-generatingconsumers(distributedgenerationfacilitiesusedforonsite
consumption)andnon-Green-eCertifiedvoluntaryprograms.Werecommendadditional
outreachbyARBaswellasconsiderationofanalternativeprocedureforallowance
retirementintheVREreserveaccount.
AccordingtoStaff’spresentation,lessthan15%of2013-2014VREallowanceshavebeenretiredtodate.
StaffhasaskedforfeedbackonwhytheVREprogramisundersubscribed.
AllVREsellersandbuyersinthestateshouldbeusingthereserveaccountinordertoensurethat
generationusedtomeetvoluntarydemandhasaneffectongridemissionsandisincrementaltothecap
(i.e.issurplustoregulation),includingonsitesolarandotherdistributedgenerationwheretheRECsare
retainedbytheconsumer.OnsitesolaruserskeepingtheRECsmaynotknowabouttheVREsetaside
and/oritmaybetoodifficulttouse.Inaddition,whileGreen-erequiresthatallcertifiedsalesusedthe
setaside,non-Green-ecertifiedvoluntaryprogramsinCalifornia,again,maynotknowabouttheVRE
setasideormaynotbeapplyingorinformingtheirparticipantsofthebenefits.
WerecommendthatARBdoadditionaloutreachtoboththesolarcommunityaswellasvoluntary
suppliers(andretailsupplierswithvoluntaryprograms)inthestatearoundtheVREreserveaccount,
howitworks,andthebenefitsitprovidestovoluntarybuyers.WealsorecommendthatARBconsider
alternativeapproachestoVREallowanceretirement.Forexample,ratherthansettingafixedamountof
allowancestosetasidefortheVREreserveaccount(afixedpercentofthetotalallowancebudget)and
requiringtheVREseller,generator,purchaser,orownerofself-generationtoapplytotheset-asidefor
in-statevoluntarygeneration,ARBcouldgatherdataonvoluntarymarkettransactionsinCalifornia(we
canhelpprovidedataforthepartofthemarketthatisGreen-ecertified)andmakeretirements
automaticallyonbehalfofthevoluntarymarket.Thiswouldremovetheapplicationprocess.
3. Wemayexpectdramaticgrowthinuseof/subscriptiontotheVREreserveaccountduetothe
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launchofthreelargeGreen-ecertifiedvoluntarygreenpricingprogramsbythestate’s
investorownedutilities(IOUs)aswellasotherdevelopmentsinthevoluntarymarket.Asa
result,Staff’sproposaltonotsetasideadditionalVREallowancespost2020isinappropriate.
StaffhasproposedthatnofurtherVREallowancesbesetasidepost-2020,butthatentitieswillbeable
torequestretirementofremainingVREallowances.Therearetwoimportantreasonswhythisproposal
maynotbeappropriateandwhyweshouldnotassumethatpastclaimsonset-asidewillbeatall
predictiveoffuturedemand.
First,inJanuary2015,theCaliforniaPublicUtilitiesCommission(CPUC)directedthethreelargestIOUs
inthestate—PacificGasandElectricCompany(PG&E),SouthernCaliforniaEdisonCompany(SCE),and
SanDiegoGasandElectricCompany(SDG&E),whichtogethercovernearly80%ofthestate—tooffera
Green-eEnergycertified100%renewableenergyoptiontotheircustomers.3Assuch,theseproducts
willneedtocomplywithGreen-erequirementsincludingthatrenewableelectricityorRECsfrom
facilitieslocatedinCaliforniaordirectlydeliveringtoCaliforniaretireallowancethroughVREreserve
account.4Thelaunchofthesethreelargevoluntaryprogramswilldramaticallyincreasesubscriptionto
theVREreserveaccount.Infact,iftheIOUshitthecapacitycapfortheprograms,thiswouldamountto
approximately1.3millionmegawatt-hours(MWh)soldannually,whichtranslatestoapproximately
562,392metrictonsannually(usingARB’sVREprogramemissionsfactor).Thisrepresentstwo-thirdsof
thetotalVREreserveaccountin2020.5Thispluscurrentsubscriptions,approximately676,000
allowances,6representsafloorofwhatwillbeneededintheVREreserveaccountannually.
TheotherdevelopmentistheexpansionofCommunityChoiceAggregation(CCA)programsinCalifornia,
whichtypicallydeliverrenewableenergyinexcessoftheRPS.Green-ecertifiestheDeepGreenProduct
fortheMarinCleanEnergyprogramandexpectstocertifyotherdevelopingprogramsinthefutureas
well,andwillagainenforceexistingrequirementstousetheVREreserveaccount.Again,uncertified
programsshouldbeinformedabouttheVREreserveaccountanditsbenefitsfortheircustomers.So,
theactualamountofallowancesintheVREreserveaccounteachyearwilllikelyneedtobemuchhigher
thanthe676,000floor,withadditionofnewCCAs,increaseduseamongstonsitesolarcustomers,and
regulargrowth.
StaffisalsoconsideringchangestoalloweligibilityforprojectsthatmeetSolarElectricIncentive
ProgramGuidelines.Wesupportthis,providedthattheseprojectsretaintheRECs.Again,allsolar
wheretheRECsareretainedshouldbeusingtheVREreserveaccount,andwesupportanyoutreach
thatARBorotherscandotoensurethatparticipantsinspecificprogramsareawareofandsubscribeto
theVREreserveaccount.
3
CPUC.Decision15-01-051January29,2015.DecisionApprovingGreenTariffSharedRenewablesProgramforSan
DiegoGas&ElectricCompany,PacificGasandElectricCompany,andSouthernCaliforniaEdisonCompany
pursuanttoSenateBill43.Availableonline:
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M146/K250/146250314.PDF.
4
Green-e’sstate-specificrequirementsforCaliforniacanbefoundonpg.30-34oftheGreen-eEnergyNational
Standard,availableonline:http://www.green-e.org/docs/energy/Green-eEnergyNationalStandard.pdf.
5
SeetheVREreserveaccountannualallocationhere:
http://www.arb.ca.gov/cc/capandtrade/guidance/chapter7.pdf.
6
113,489allowancesretiredbyCARBthroughtheVREPforRY2014.
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March29,2016Workshop
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Pleasefeeltocontactuswithanyquestionsaboutthesecomments,orifwecanotherwisebeof
assistance.
Sincerely,
ToddJones
SeniorManager,PolicyandClimateChangePrograms
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