05-24-2021 BPU RPT 08 - Laserfiche WebLink

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W A Y£ R I£ N E R G Y L l E E RIVERSIDE PUBLIC UTILITIES 69& P U B L i U T i L r 7 i E 5 Board Memorandum BOARD OF PUBLIC UTILITIES DATE: May 24, 2021 SUBJECT: ANNUAL REPORT ON CITY OF RIVERSIDE'S USE OF ALLOWANCE VALUE AND PROCEEDS OF GREENHOUSE GAS ALLOWANCES ISSUE: Receive and file update on the City of Riverside's use of allowance value and proceeds of Greenhouse Gas Allowances. RECOMMENDATION: That the Board of Public Utilities receive and file an update on the City of Riverside's use of allowance value and proceeds of Greenhouse Gas Allowances. LEGISLATIVE HISTORY: Assembly Bill (AB) 32, enacted in 2006, mandates the California Air Resources Board (CARB) to develop regulations to limit California's greenhouse gas (GHG) emissions to 1990 levels by 2020. In December 2011, CARB developed its framework, associated regulations, and market mechanisms to implement AB 32, effective January 1, 2012. Two subsequent bills, Senate Bill (SB) 32 in 2016 and AB 398 in 2017, established new GHG emissions reduction targets and extended the State's authorization to use market mechanisms to meet these targets. Specifically, SB 32 expands the limit on GHG emissions to 40% below 1990 levels by 2030, and AB 398 permits the continued use of the Cap and Trade Program through 2030. BACKGROUND: The cornerstone of CARB's GHG regulations is its Cap and Trade Program for GHG allowances. Electric distribution utilities that emit GHGs, such as from the use of fossil fuels (e.g. coal and natural gas) to generate electricity have an annual compliance obligation and must possess sufficient GHG allowances to offset such GHG emissions. To mitigate rate impacts, the Cap and Trade Program provides utilities with "free" allocations of GHG allowances through 2030. Publicly owned utilities such as Riverside Public Utilities (RPU) can use these GHG allowances to offset their compliance obligations.