The Office of Administrative Law sent the California Energy Commission\u2019s rules restricting greenhouse gas emissions from public power agencies\u2019 coal power projects back to the drawing board last week. Office of Administrative Law (OAL) senior counsel Michael McNara concluded the CEC\u2019s proposed exemptions were unclear and the rationale insufficient. The Energy Commission\u2019s rules would essentially prohibit muni imports of coal power. The governing law, SB 1368, does \u201cnot give the Energy Commission discretion to alter the scope of the performance standard required to be established,\u201d stated the opinion signed July 2. SB 1368 complements the state\u2019s Global Warming Solutions Act, AB 32, that seeks to reduce greenhouse gas emissions. (Circuit, May 25, 2007). In response, the Energy Commission announced July 11 it would hold an August 2 workshop. It is seeking input on rule revisions following the OAL finding that its proposed exemptions did not comply with the California Administrative Procedure Act. OAL\u2019s main beef was with the unclear language exempting coal power plants that increase their rated capacity by 10 percent from the CEC\u2019s 1,100 lbs. of carbon dioxide\/MWh standard. The OAL was unsure if this carve out was limited to routine maintenance. The ambiguity could allow, for example, an upgrade to a 600 MW power plant that increases the rated capacity by 60 MW to escape the emissions restrictions. The office also took issue with the CEC rule proposal that existing plants that meet the SB 1368 emissions standard and subsequently add less than 50 MW of new capacity are deemed in compliance with the new emissions standard. After the Energy Commission\u2019s public workshop next month, its staff will be directed to modify the regulations to address the OAL\u2019s concern and issue 15 day language for comment and adoption, said Claudia Chandler, CEC spokesperson. The commission hopes to adopt revised regulations by its final August business meeting. SB 1368 requires the Energy Commission to set greenhouse gas limits on out-of-state coal deals the munis sign to ameliorate global warming in and outside the state\u2019s borders. The law also directs the California Public Utilities Commission to limit emissions from the state\u2019s three investor-owned utilities\u2019 power supplies. The CEC\u2019s 10 percent rating increase rule exemption mirrored the regulation approved by the CPUC. However, unlike its sister agency, the CPUC rules are not subject to OAL approval.