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W A T E R I E N E R 5 Y , L I F E RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B L I C U T I L I T I E S BOARD OF PUBLIC UTILITIES DATE: April 16, 2010 ITEM NO: 6 SUBJECT: AMENDMENT TO BROKERAGE SERVICES AGREEMENT WITH EVOLUTION MARKETS, INC. ISSUE: Consideration of proposed Amendment No. 1 to the Brokerage Services Agreement between Evolution Markets, Inc. and City of Riverside for brokerage services with respect to Emissions Reduction Credits, Reclaim Trading Credits and Renewable Energy Credits. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve Amendment No. 1 to the Brokerage Services Agreement between Riverside and Evolution Markets, Inc.; and 2. Authorize the City Manager, or his designee, to execute subsequent amendments to the Proposed Agreement. BACKGROUND: The City of Riverside entered into the Brokerage Services Agreement ("Agreement") with Evolution Markets in December 2004. The Agreement was intended to facilitate purchases and sales of SOx and NOx emission credits required for the operation of the Springs Generating Facility and Riverside Energy Resource Center in the South Coast Air Quality Management District (SCAQMD) regulated air basin. The brokerage service was justified as potential holders and purchasers of emission credits were not readily known and broker service provided the added value of finding potential sellers and purchasers of emission credits who offered the most cost effective emission credits. The changes to the Proposed Agreement will enhance Riverside's ability to use brokerage service to find: (1) The most cost effective Renewable Energy Credits (RECs) or Green Energy in fulfillment of Riverside's Renewable Portfolio Standard. One REC represents all the renewable and environmental attributes associated with one megawatt hour (MWh) of electricity that was generated and delivered by an eligible renewable energy resource; and (2) The most cost effective greenhouse gas (GHG) allowance credits in fulfillment of AB 32 greenhouse gas reduction mandate as currently contemplated to be implemented through the proposed cap and trade regulations by the California Air Resources Board.