Compatibility with AB 32

Parties were asked whether a pure source-based program would be compliant with AB 32, which requires that ARB adopt GHG reporting requirements that account for the GHG emissions associated with electricity imported into and consumed in California. Several parties, including SDG&E/SoCalGas, Calpine, IEP, LADWP, SCPPA, GPI, and AREM, assert that the exclusion of import-related emissions from a tradable cap would violate the requirements of AB 32.

DRA counters with an alternative view that, while AB 32 requires ARB to adopt regulations that account for imports, it does not require direct regulation of emissions associated with imported electricity as long as the overall emissions goal is achieved.