02-17-2012 BPU RPT 08 - Laserfiche WebLink

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W A T E R E R E R G Y I I F t RIVERSIDE PUBLIC UTILITIES W& Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: February 17, 2012 ITEM NO: 8 SUBJECT: AUTHORIZATION TO DESIGNATE AUTHORIZED REPRESENTATIVES IN COMPLIANCE WITH AB 32 CAP-AND-TRADE REGULATIONS ISSUE: That the Board of Public Utilities consider approval for certain designations to comply with the Global Warming Solutions Act (AB 32) Cap-and-Trade regulations and to administer associated compliance activities. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Designate Riverside's Authorized Representative (AR) and Alternate Authorized Representative (AAR) to be the Riverside Public Utilities' (RPU) General Manager and the RPU Assistant General Manager -- Resources, respectively, in accordance with AB 32 Cap-and-Trade regulations; 2. Authorize the AR and the AAR to perform additional activities as may be required to comply with AB 32 associated regulations that may be modified from time to time; and 3. Authorize further delegations from the AR/AAR to designated RPU staff members to perform AB 32 Cap-and-Trade compliance activities in accordance with said regulations. BACKGROUND: AB 32, enacted in 2006, mandated that the California Air Resources Board (CARB) develop a framework and associated regulations to limit the emissions of green house gases (GHG) in California to 1990 levels by year 2020. In December 2011, CARB developed its framework, the associated regulations, and the market mechanisms as required by AB 32. The cornerstone mechanism is the Cap-and-Trade program, which requires that electric utilities such as RPU, have sufficient "rights" on an annual basis to offset GHG emissions associated with generating electricity. Such "rights" are also called GHG "Allowances". Initially, CARB will provide a "free" allocation of GHG allowance to each electric utility for compliance purposes to mitigate retail rate impacts that may be caused by the Cap-and-Trade compliance program. The amount of freely allocated allowances will decline over time and utilities will be required to purchase sufficient allowances through an auction to offset its associated GHG emissions. The regulations also require that electric utilities, including Riverside, pre-register with the CARB by January 31, 2012, and officially designate an AR and AAR by mid March, in order to establish regulatory accounts for each applicable facility to receive and dispose of GHG Allowances. The regulations require that the AR and the AAR be individuals who can legally bind Riverside and attest to the accuracy of information and activities reported under the Cap-and-Trade program.