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Item 34: Joint PUC/CEC Decision on recommendations to CARB for policies to implement AB32 for the electricity and natur

Item 34: Joint PUC/CEC Decision on recommendations to CARB for policies to implement AB32 for the electricity and natural gas industries. October 16, 2008. CPUC/CEC Role in AB32. Joint CPUC/CEC proceeding to make recommendations to ARB on policies for electricity and natural gas sectors

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Item 34: Joint PUC/CEC Decision on recommendations to CARB for policies to implement AB32 for the electricity and natur

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  1. Item 34:Joint PUC/CEC Decision on recommendations to CARB for policies to implement AB32 for the electricity and natural gas industries October 16, 2008

  2. CPUC/CEC Role in AB32 • Joint CPUC/CEC proceeding to make recommendations to ARB on policies for electricity and natural gas sectors • Joint CPUC/CEC decisions to convey recommendations • March 2008– Resolve threshold issues • September 2008– Comprehensive recommendations • Ongoing coordination with ARB and California Environmental Protection Agency

  3. Overview of Proposed Decision: Mandates Pursue all cost-effective energy efficiency Expand renewable energy use to 33 percent Require comparable investment in renewable energy and energy efficiency from all retail providers of electricity Consistent with Draft Scoping Plan

  4. Overview of Proposed Decision: Cap and Trade Program • Endorses creation of a multi-sector, regional cap-and-trade market • Recognizes that WCI is the principal forum • Focus on specific electric sector issues • Recommendations in 4 key areas • Contribution of electric sector to meeting AB32 target • Allowance allocation • Market design and flexible compliance • Treatment of CHP

  5. The Electric Sector Accounts for 20-25% of California’s GHG Emissions

  6. Nearly 40% of reductions from mandates are from electric sector programs Total Reductions from 2020 BAU: 169 MMTCO2E Electricity/Gas Mandates: 49.7 MMTCO2E 21.2M 26.4M 2.1M Source: CARB Draft Scoping Plan

  7. MORE SAME LESS “Bookend” Scenarios forElectric Sector GHG Emissions

  8. SAME LESS MORE Comparative Rate Impacts of “Bookend” Scenarios Current Projected

  9. CARB’s allocation decision determines who pays for the other 35 MMtCO2e Total Reductions from 2020 BAU: 169 MMTCO2E Cap and Trade Program: 35 MMTCO2E ? ? ? ? Source: CARB Draft Scoping Plan

  10. Retailers start from different places Emissions Intensity(Tons CO2e/GWh)

  11. Recommended Approach to Allowance Allocation for Electric Sector Declining Cap

  12. Impact of Recommended Allocation Approach on Average Retail Rates Low = -0.2 ¢/kWh High = +0.8 ¢/kWh

  13. Market Design and Flexible Compliance:Key Recommendations • Multi-sector, regional cap-and-trade market • Link to other equally stringent cap-and-trade programs • No restrictions on market participation • Three-year compliance periods • Unlimited banking of allowances and offsets • No geographic limits on offsets • No safety valves or price triggers

  14. Thanks to the GHG Team!

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