II. Background

AB 32 requires that, on or before January 1, 2008, ARB adopt regulations to require the reporting and verification of statewide GHG emissions and to monitor and enforce compliance with the program. (Section 38530(a).) The statute specifies that "statewide GHG emissions" includes the total annual emissions of GHG gases in the state. (Section 38505(m).) While certain language in AB 32 focuses on "electricity consumed in the state," we interpret the statutory definition of "statewide GHG emissions" to include emissions from electricity generated in California and exported from the state, in addition to electricity consumed in the state.

Decision (D.) 07-05-059, the second order amending the Order Instituting Rulemaking (R.) 06-04-009, and the Scoping Memo for Phase 2 of this proceeding provide that the Public Utilities Commission, in collaboration with the Energy Commission, will provide recommendations to ARB regarding, among other things, the reporting and verification regulations that ARB will adopt pursuant to AB 32.

The Public Utilities Commission and the Energy Commission jointly held a workshop on April 12 and 13, 2007 that addressed GHG reporting and verification issues, among other subjects. Based on information presented at that workshop, subsequent ARB workshops, and existing reporting protocols of the Energy Commission and the California Climate Action Registry, staff from the two agencies (Joint Staff or Staff) developed a Joint Staff proposal for an electricity retail provider GHG reporting protocol. Pursuant to a June 12, 2007 ruling by the Administrative Law Judges (ALJs), parties were invited to comment on the Joint Staff proposal. The ALJ ruling also asked parties to comment, among other things, on whether modifications to the Joint Staff reporting proposal would be needed to support a deliverer/first-seller GHG regulatory structure for the electricity sector.

Today's decision is based on information presented at the April 12 and 13, workshop; the Joint Staff reporting proposal; materials incorporated into the record by ALJ rulings dated June 18, June 27, and July 19, 2007; and comments filed by the parties in this proceeding.