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California’s power industry would report its greenhouse gas emissions annually beginning next year under intricate rules that the California Air Resources Board may adopt December 6. Stakeholders, however, are clearly uncomfortable with the prospect of filing under the proposed requirements. “The regulation is a hundred page monster,” said Patrick Gaffney, Air Board reporting regulation leader. Gary Schoonyan, Southern California Edison regulatory affairs director, called the rules “administratively burdensome,” adding he hoped the regulations would soon be streamlined. A key aim of the reporting mandate, according to the Air Board staff, is to prevent “contract shuffling.” Regulators fear some in-state companies will sell their fossil fuel power out of state and replace it with renewable power purchases to lower their own emissions. That would result in no net reduction of greenhouse gases in an import-export scheme reminiscent of the market manipulation debacle that led to the 2000-01 energy crisis. The rules are aimed at tracking emissions under California’s climate protection law, AB 32. The statute requires the Air Board to account for emissions related to all power used in the state. The Air Board’s dilemma is that it must adopt the reporting rules before it chooses an approach for requiring the power industry to actually reduce emissions. Accordingly, the staff report for the proposed rules notes they require enough information to support any emissions reduction option. Among the choices is a load-based approach, which would place emission reduction requirements on retail electricity providers. Placing reduction requirements on power generators and wholesalers is known as the “first seller” approach. The other approach, a “source based” strategy, would cover only generating plants, putting most of the burden on utilities. The proposed reporting rules seek extensive information from every level of the industry--including generators, public and investor owned utilities, community choice aggregators, and electricity service providers. The California Department of Water Resources and Western Area Power Administration would have to report greenhouse gas emissions. Co-generators would be covered, as would biomass plants. After the agency determines an approach for requiring emissions reductions from the power industry, it will review the rules with an eye toward reducing paperwork, said Pam Burmich, Air Board power/utilities leader. The proposed rules would require the industry to report emissions of up to six greenhouse gases listed under the Kyoto Protocol. For the power sector these include carbon dioxide, nitrous oxide, methane, and fugitive emissions of sulfur hexafluoride. All facilities and entities with capacities of at least 1 MW and emitting at least 2,500 metric tons of greenhouse gases a year would have to report their emissions by April 1 for the proceeding year. Beginning in 2010, those reports would have to be verified by Air Board-certified third party auditors within six months of filing. These could be either private companies or existing local air districts. Among the information organizations within the power sector would have to report would be: -Generating capacity; -Fuel consumption; -Heat content by fuel type; -Carbon content, if measured; -Annual net power generated; -Power exported out of state; -Power imported into the state; -Power bought and sold; -Share of ownership of generating facilities; -Contract dates; -Native load; and -Disposition of green tags associated with any renewable power purchases. To meet the requirements, generators could report their emissions either based on real time readings with continuous emissions monitors placed on smokestacks or calculated using pre-established emission factors based on fuel usage. However, once a company started using one method or another, it would have to stick with it to provide regulators with consistent emissions data, the staff report said. Editors’ note: For more details on the CARB greenhouse gas reporting rules, see the story in our sister publication E=MC2 – Energy Meets Climate Challenge. You can find it at www.energymeetsclimate.com.

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