VI. Recommended Reporting Protocol
A. What Will Be Reported
In the Joint Staff's proposal, California retail providers would be required to report total GHG emissions from all power used to serve their load in California. That proposal would require that retail providers submit the total quantity of power generated and purchased separately for specified and unspecified sources, emission factors for specified sources, and wholesale sales. However, as described above in Section III, ARB intends to establish emission factors for all specified and unspecified sources. ARB will also determine the total GHG responsibility for each retail provider. As a result, the reporting and verification protocol in Attachment A, which we recommend to ARB, reflects ARB's planned process.
We recommend that ARB require retail providers to report the source of all power used to serve load in California. For specified sources, retail providers would identify the amount of power received and a unique ARB plant identification code. For partially-owned power plants, the percentage ownership share is required. For unspecified sources, retail providers would report the amount of power received and the region that is the source of the power. Retail providers would also report wholesale sales by counterparty and by destination region (California, Northwest, and Southwest). Wholesale sales are also to be differentiated between sales from owned or partially owned power plants, other specified sources, and unspecified sales from the retail provider's pool of generated and purchased power.
As several parties suggest, we recommend that ARB adopt reporting requirements for 2008 that would facilitate consideration by ARB and the Commissions of the deliverer/first-seller type of GHG regulation. We recommend additional reporting requirements, which would direct marketers that either import power into or export power from California to report all such sales by counterparty, disaggregated by region as appropriate. Marketers would also be required to report any power wheeled through the state of California. Additional details regarding the reporting requirements for retail providers and marketers are contained in Attachment A.
B. Submission Process
1. State Agency Responsibilities for Receiving and Maintaining Data
The Joint Staff proposes that ARB be the primary recipient of all GHG emission reports and that both Commissions receive simultaneous copies of all reports filed with ARB. At this time, we do not see a need for the two Commissions to routinely receive the GHG emission reports. Each Commission may develop data-sharing agreements to ARB. We may also request that reporting entities provide their GHG reports directly if the need arises. If needed, the Commissions will assist ARB in the validation of data submitted in the GHG reports.
The Joint Staff proposes that retail providers submit annual GHG reports. Most parties support this proposal. DRA wants quarterly reporting as a means to increase transparency. PG&E recommends that the frequency of reporting be consistent with the nature of the market and recommends that the appropriate frequency be determined after the market has been designed. We agree with Staff's suggestion and recommend that ARB require that retail providers and marketers submit annual reports.
Verification is vital to any credible tracking system. ARB proposes to use third-party certification for all reporting under AB 32, and is developing a training and certification program for third party auditors.
While the Joint Staff considers the development of verification rules to be within the ARB's responsibilities, some parties want the Commissions to address verification in more detail. Several parties note that verification would be very difficult for out-of-state operations. Others are concerned about the burden that a verification system might place on retail providers. ED and DRA stress the importance of a strong compliance mechanism in an effective reporting and tracking system.
We agree that verification is a critical component to any mandatory GHG reporting mechanism. ARB is developing a verification process including requirements for third-party certifiers. We believe that ARB is in the best position to develop appropriate verification requirements, and we direct our Staff to work with ARB to address any unique verification requirements for the electricity sector.
The Joint Staff proposal includes a reporting template. Several parties recommend clarifications and minor corrections to the template. The Alliance for Retail Markets (AREM) wants a streamlined reporting template for non-asset-owning retail providers.
As we have noted, the Joint Staff's proposal assumes that retail providers would report emission factors and total GHG emission responsibilities. With ARB's plan to develop emission factors itself, we modify the reporting template proposed by the Joint Staff to reflect ARB's planned reporting system. As a result, some of the recommended clarifications and minor corrections proposed by parties are moot.
The reporting requirements that we recommend to ARB are contained in Attachment A, which also contains the template of a sample reporting form that parties could use, subject to any modifications in the reporting requirements that ARB may adopt.
C. Reducing Reporting Burden
Some of the smaller retail providers believe that the Joint Staff reporting proposal should be modified to reduce the burden and costs on smaller retail providers of reporting GHG emissions. AREM and several POUs desire a web-based reporting system. Some of the smaller retail providers recommend that the Energy Commission work with ARB to reduce duplicative reporting of facility generation. CMUA encourages the Energy Commission, the Public Utilities Commission, and ARB to work toward a single, unified set of reporting requirements.
In modifying the reporting protocol to be consistent with ARB's planned reporting process, we have responded to parties' request for a streamlined reporting protocol that reduces the burden on reporting entities.
D. Review of Adopted Protocols
Staff recommends that reporting protocols implemented in 2008 be reviewed no later than 2011 so that they can be refined for the first compliance year in 2012.
We agree with Staff that a comprehensive review of the reporting protocol should be conducted prior to the first compliance year in 2012. The review should occur early enough to allow time to implement any revisions in 2011, so that parties may accommodate any revisions prior to the first year of compliance. We recommend that ARB undertake a review early enough to ensure that any revisions will be effective during the 2011 reporting year.
E. Reporting and Tracking under Deliverer/First-Seller Regulation
Many parties submit that the Joint Staff reporting proposal would need to be modified if a deliverer/first-seller structure is adopted. Some of these parties propose detailed modifications to the Joint Staff proposal to provide the reporting needed under a deliverer/first-seller structure. Most of the proposed changes would require that the first entity that sells power into California track and report the emissions associated with such sales.
We do not address the merits of the deliverer/first-seller approach today, but we recommend that ARB include requirements that marketers report any sales where the marketer is the first party to deliver power into California. This, combined with ARB's intention to require most generators to report source emissions directly to ARB, would provide much, if not all, of the additional information regarding GHG emissions that would be needed if the deliverer/first-seller approach is adopted. It may also reduce retail providers' uncertainty regarding the sources of power bought from marketers. Because the deliverer/first seller approach still requires development, additional reporting changes may be necessary if the deliverer/first-seller approach is adopted.
F. Confidentiality
AREM requests that the reporting protocol include provisions to maintain the confidentiality of market-sensitive information and to avoid disclosure of detailed transaction data. AREM recommends that the reporting protocol include the "window of confidentiality concept" adopted by the Public Utilities Commission in D.06-06-066.
While we agree with AREM that the early release of market-sensitive information could adversely affect retail providers, we do not make recommendations to ARB regarding the extent to which the data reported to ARB should be treated confidentially. AREM should address its concerns about the release of market-sensitive information in the ARB process that is currently developing confidentiality requirements. In adopting final reporting regulations, ARB will determine what, if any, information will be treated confidentially.
