Western States’ Greenhouse Gas Proposal Sinks

By Published On: March 14, 2008

Last week, the Western Climate Initiative electricity subcommittee proposed holding generators inside the affected area responsible for meeting carbon emission reduction requirements. This is known as the “first deliverer” point of regulation. On March 11, Initiative officials put some meat on the skeleton proposal, including clarifying it would regulate emissions from utilities and other entities not captured by the first deliver strategy. Those would largely be importers to California. “Monitoring and getting compliance from the different entities will be very complex,” warned Christine Tam, Division of Ratepayer Advocates analyst. California, several other states, and some Canadian provinces are collaborating on curbing greenhouse gas emissions from the electricity sector in the West. Like the California Public Utilities Commission and California Energy Commission, Western Initiative officials say that the first deliverer strategy allows for easier tracking of emissions and is less difficult than regulating emissions at the utility level, known as a “load-based” approach. However, Western Initiative representatives admitted mid-week that their proposal would cover less than half of the electricity sector’s global warming gases. To capture up to 80-90 percent of all emissions from electricity supplies fueling the West, WCI is considering also regulating imported power emissions by targeting the entities that first send power into the participating states, which are known as “first jurisdictional deliverers.” At the national level, Senator Barbara Boxer (D-CA), among others, is attempting to reduce greenhouse gases by 80 percent. In addition, to capture emissions from electricity provided by the Bonneville Power Administration and Western Area Power Administration, which are not subject to state law, the municipal power agencies that buy the federal power would be responsible for the associated emission cuts. The states are also weighing other strategies, including assigning a set emissions level for unspecified megawatts, known as a default carbon equivalent emissions level. The Initiative is considering covering emissions from BPA and WAPA power, although they are only a “very small” amount of emissions. WCI official David Van’t Hof, chair of the electricity subcommittee, said the concern is that the federal entities “could become conduits for sales of high carbon power flowing through the system.” A multi-layered approach caused some stakeholders to question whether this approach was indeed more manageable than a load-based strategy. For example, mixing and matching these could cause emissions from multi-jurisdictional utilities, such as Sierra Pacific that serves Nevada and California, to be regulated twice, Tam said. The committee has not yet recommended what level of emissions it will consider too small to regulate. Nor has it decided how to handle cogeneration facilities or renewable power supplies that have gas-fired backup power. Another issue still to be addressed is how a western cap may impact grid reliability, particularly if carbon traders push to maximize their return from trades without considering the need for adequate supplies of power. California, Arizona, Oregon, New Mexico, Utah, and Washington agreed in February 2007, to cut state emissions by 15 percent by 2020. In addition, California’s global warming law, AB 32, sets a 25 percent reduction mandate by 2020. The Western Initiative is seeking comments on its draft recommendation through the end of this month.

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