SB 32 and AB 197: Future GHG Reduction Targets and Oversight

The Legislature enrolled SB 32 and AB 197 on August 25, 2016.  These bills create both the future target that will govern GHG emission reduction programs and a higher level of legislative oversight over the California Air Resources Board (CARB).  These bills must both become law for either to take effect next January and are expected to be signed by Governor Brown in the near term.  This post will examine these bills to provide the reader with an overview of the where California is and intends to move in the future.

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Tracking GHG Emissions in a Regional ISO: California Stands Alone in the West

When the California Independent System Operator (CAISO) released its original Proposed Principles of Governance for a regional independent system operator (ISO), it included a proposal for the development of a methodology to track and account for emissions that are attributable to California load and resources located in California and out-of state resources serving California load.  I previously wrote about this document to provide an overview and background information.  The revised Proposed Principles of Governance omitted Principle 2 regarding Greenhouse Gas (GHG) accounting but emphasized that such a system remains a priority for the CAISO and necessary piece to an expanded regional ISO.

Specifically, the second bullet of the original proposed Principle 2 stated:

“To accommodate a regional balancing authority area spanning multiple states, the ISO will need to develop a transparent methodology for tracking and accounting for greenhouse gas emissions, which must include a means to identify such emissions that are attributable to California load and resources located in California and out-of-state resources serving California load.”

I will examine exactly what that could entail and lay out some of the issues of creating a system in a multi-state ISO where no other potential participating state regulates GHGs.

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Does Your Rooftop Solar System Reduce Your Carbon Footprint? It Depends…

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At first glance this is a pretty straight forward issue. If you put solar modules on your home or business, you are generating clean, emissions-free electricity. Right? Well, it depends…in part on how you paid for your system. If you bought it either with cash or with your own source of financing, you can claim that your electricity is clean. If you worked with a third party to install solar as part of a power purchase agreement (PPA) or leasing arrangement, it is likely that you don’t have a claim to the “cleanness” and “greenness” associated with your electricity.

This not only has implications for greenhouse gas (GHG) accounting for individual residents or businesses but also California counties and cities that are trying to estimate how a large uptick in distributed solar projects in the last couple years affects their climate action plan. For that matter, it also could affect how California estimates the effects of distributed solar on statewide GHG emissions.

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Federal Housing Administration Issues Guidance on Property Assessed Clean Energy (PACE) Financing

The Federal Housing Administration (FHA), part of the executive branch’s Department of Housing and Urban Development (HUD), recently issued guidance on PACE financing programs (read the full press release here).  The FHA provides mortgage insurance on loans made by FHA-approved lenders that meet specific qualifications for single family and multifamily homes and hospitals.  FHA insurance provides lenders with protection from losses resulting from a property owner defaulting on their mortgage. PACE financing uses voluntary special tax assessments to secure financing for improvements on residential and commercial properties, such as energy or water efficiency improvements or solar panels. PACE assessments are repaid through the property tax bill using the same collection mechanism as other special tax assessments (generally seen as a line item on your property tax bill).

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AB 2188 Implementation Report: A Review of Ordinances Adopted by Local Jurisdictions in California

This post follows the release of the first statewide assessment of AB 2188 in the form of a AB 2188 Implementation Report.  This assessment provides a snap shot in time of AB 2188 implementation across the state of California based on an assessment of confirmed ordinance and process adoption.

The Energy Policy Initiatives Center (EPIC) developed this report in support of the Center for Sustainable Energy (CSE) under California’s Rooftop Solar Challenge program, called the Golden State Solar Impact program.  This program supported the goals of the Department of Energy’s (DOE) Solar Energy Technologies Program and the SunShot Initiative to make solar electricity cost competitive without subsidies by the end of the decade by seeking to address and lower system costs for photovoltaics (PV). EPIC and CSE worked to encourage market transformation through expanding financing options for residential and commercial customers, streamlining permitting processes, and standardizing net metering and interconnection standards across investor-owned and municipally owned utilities in the region under this program. Previous work on AB 2188 included drafting of the AB 2188: Implementation of the Solar Rights Act at the Local Level document and AB 2188 Model Ordinance to implement the amendment to the Solar Rights Act (SRA) and the Governor’s California Solar Permitting Guidebook (Spring 2015 Second Edition). The assessment includes review of ordinance adoption, compliance with minimum statutory requirements under the SRA, and adopted permit application processes. Continue reading

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Threading the Needle: Regional ISO Governance Principles


This post will examine the California Independent System Operator’s (CAISO) June 9th, 2016 Proposed Principles for Governance of a Regional ISO.  This document builds upon previous whitepapers, testimony, presentations, and comments addressing the governance structure of an expanded regional ISO in the west.  It also serves as the focal point for the June 16th, 2016 joint stakeholder meeting between the CAISO and CEC. This post will lay out the proposed principles and examine other relevant regional transmission operator governance structures to inform the reader about the purpose and issues surrounding the proposed CAISO principles for governance. Continue reading

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Causation as the Basis for Attributing Greenhouse Emissions from Electricity

I have written about the importance of electric emissions factors to estimating greenhouse gas emissions in inventories and the impacts of policies to reduce emissions (see here, here, and here). This post discusses the issue of attributing emissions from electricity production to the customers who use it.

We began to think more about this issue during a project to develop a greenhouse gas inventory for an organization that receives its electricity from a direct access provider. We needed the annual average emissions rate (lbs of CO2 equivalent per MWh) of the electricity supply for the year in question. The direct access provider gave us an average emissions rate of 563 lbs CO2e/MWh. This value seemed low to us. It turns out that this value is the emissions rate for electricity included in the US Environmental Protection Agency’s eGrid database for plants located in the California Independent System Operator (CAISO) control area. The justification for using this value was the fact that all electricity is dispatched by the CAISO and there is effectively a large pool of electricity from which electricity is drawn, so the applicable emissions rate for electricity supplied by this provider should be the same.

By analogy, this would be like asking 10 people to put random drops of red, blue, and yellow dye into a pool of clear water and saying that each person contributed the same number and combination of drops. In the end the color of the pool will be the “average” of all the drops entering the pool. But it does not follow that each person entered the same number of drops from the same colors – they each entered a different amount and ratio of colors. Using the average greenhouse gas emissions intensity for an entire pool of electricity – like the CAISO – does not tell us the emissions rate of a particular load serving entity (e.g., utility or direct access provider). For this, it is necessary to determine the contribution of a particular load serving entity to the overall average.

This raised an important question for us: What is the best approach to attribute emissions from electricity production to those who consume it in a utility service territory, city, or specific company?

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