05-22-2023 BPU RPT 06 - Laserfiche WebLink

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P U B L I C U T I L I T I E S RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: MAY 22, 2023 SUBJECT: ANNUAL REPORT ON CITY OF RIVERSIDE'S USE OF ALLOWANCE VALUE AND PROCEEDS OF GREENHOUSE GAS ALLOWANCES ISSUE: Consider an update on 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 of 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. The Cap and Trade Program was established as one of the market-based mechanisms established by CARB to help the state meet its GHG emissions target. 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 established 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: California Cap and Trade Program Regulations and Planning The cornerstone of CARB's GHG regulations is the statewide Cap and Trade Program. Electric distribution utilities and other industries that emit GHGs, such as from the use of fossil fuels to generate electricity (e.g., from the combustion of coal and natural gas), have an annual compliance obligation and must annually submit to the CARB sufficient GHG allowances to cover the total GHG emissions. To mitigate rate impacts for electric distribution utilities' customers, the Cap and Trade Program provides the utilities with allocations of GHG allowances through 2030.