IV. Definitions, Criteria for Establishing GHG Reporting and Verification Protocols, and Covered Entities

A. Definitions

Most of the definitions recommended in the Joint Staff proposal are not disputed by parties. We make several changes to the definitions in Attachment A in response to parties' comments and to provide greater clarity.

The California Municipal Utilities Association (CMUA) believes that the Staff report would expand the definition of "leakage" beyond that intended by AB 32 and improperly uses it within the Staff's definition of "contract shuffling." CMUA points out that AB 32 defines "leakage" as "a reduction in emissions of greenhouse gases within the state that is offset by an increase in emissions of greenhouse gases outside the state." We address CMUA's concerns regarding the Joint Staff's proposal regarding contract shuffling in Section V.A. below. We do not adopt the Staff's proposed definition of "leakage," since that term is defined in AB 32. Nor do we see a need to adopt a definition of the term "contract shuffling," since that term is not used in Attachment A.

The Division of Ratepayer Advocates (DRA) recommends that the definitions for "emission factor" be expanded to include all GHG emissions because, in DRA's opinion, AB 32 requires that all retail electricity providers measure GHG emissions related to their consumers' electricity consumption, and because Section 38505(g) defines GHG to include more gases than just carbon dioxide (CO₂). DRA is correct that AB 32 defines GHGs to include six gases: CO₂, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, and perfluorocarbons. ARB will assign emission factors that reflect all six gases. While we clarify the definition of emission factors in Attachment A, we see no need to list the six gases in this definition.

For clarity regarding reporting requirements, we add certain definitions of terms that are used in Attachment A. We also delete certain definitions that were in the Joint Staff proposal, but which are not needed in the Protocol recommended in Attachment A.

B. Covered Entities

The Joint Staff recommends that all retail providers of electricity in California be required to report under the recommended protocol. This encompasses all IOUs, ESPs, CCAs, POUs, and WAPA. As pointed out by the Natural Resources Defense Council and Union of Concerned Scientists (NRDC/UCS), DWR procures electricity to meet the needs of the State's water projects, but was not covered in the Joint Staff's proposal. Section 38530(b) requires that any reporting system adopted by ARB account for all electricity consumed in the State. The reporting Protocol that we recommend would require that DWR, as well as any other state agencies that generate or procure power from entities other than retail providers to meet their electricity needs, report using the retail provider portion of the reporting Protocol in Attachment A.

As a federal agency, WAPA should be requested to report under the Protocol. If WAPA declines to report, ARB should consider requiring end use customers of WAPA to report their receipts of electricity from WAPA.

Several parties recommend that marketers be required to report information regarding power that they import into California. We agree that such a reporting requirement would be helpful, particularly if a deliverer/first-seller regulatory approach is adopted. In addition, marketers should be required to report information regarding power that they export from California. These reporting requirements are specified in the marketers section of the reporting Protocol in Attachment A.