Comments on GHG 9/19 SH Call

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

The Salt River Project Agricultural Improvement and Power District (SRP), Arizona Public Service (APS) and Tucson Electric Power (TEP), collectively identified as the Arizona Utilities, appreciate the opportunity to comment on the September 19 GHG Coordination Working Group.  The Arizona Utilities remain supportive of the CAISO’s plan to implement the GHG Accounting and Reporting Approach. However, the Arizona Utilities are interested in a framework that allows for LSE-level reporting, provides access to raw data for reporting needs, and ensures equitable treatment for entities with both state-mandated and voluntary corporate GHG goals. The Arizona Utilities have concerns that the elements of PGE’s proposal could create preference for state-mandated entities over those entities without state-mandated goals or entities with voluntary corporate goals.

Additionally, the Arizona Utilities are interested in further discussions on key areas such as report applicability, EDAM vs. WEIM emissions reporting, and ensuring that metered load and generation data are used for accurate emissions accounting. The Arizona Utilities are also interested in exploring options for the level of granularity in reports, the frequency of reports, and coordination with WREGIS. The Arizona Utilities look forward to engaging in design aspects discussed during the meeting and in the Discussion Paper.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs.

The Arizona Utilities prefer that the report be produced for LSEs rather than BAAs. LSE-level reporting has the potential to allow more precise tracking and reporting of emissions, which can be beneficial for capturing detailed data that aligns with entities’ reporting needs.

• Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format.

Based on the differences in state mandated and voluntary corporate policies, the Arizona Utilities believe the approach should provide raw data to the extent possible. Each organization should have flexibility in utilizing the data as necessary to meet its needs, whether those needs relate to compliance with state- mandated GHG goals, meeting voluntary corporate GHG reductions goals, or conducting analysis that a standardized metric may not fully support. Raw data may provide organizations the ability to leverage the data in a way that best aligns with their unique requirements. To the extent that a single metric is published, it will need to meet the needs of all participating entities. The Arizona Utilities would like to confirm with the CAISO whether the single metric that is referenced is the residual emission rate.

Additionally, to the extent practicable, the Arizona Utilities request that market reports show actual, final values with minimal revisions after the fact. This will reduce the burden for entities to recalculate metrics if data changes.

• Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate.

The Arizona Utilities believe there could be material differences in emissions Accounting and Reporting depending on how the tracking accounts for bilateral contracts, especially if the contracts are unspecified or system generation. On certain days, it could be possible for an entity to have a nontrivial number of contracts that are ten days or less, which would not align with Master File update timeframes. The Arizona Utilities recommend that this topic be discussed in a future working group meeting to review the options available.

• Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

The Arizona Utilities are interested in further discussions on the treatment of surplus energy inside of the pricing zone to ensure that all entities are treated equitably and that it does not cause any cost shifts. WPTF’s proposal states that GHG costs from resources internal to the pricing zone would impact LMPs outside of the GHG pricing area. The Arizona Utilities would like to discuss implications to dispatch, pricing, and market design if there is special emission treatment for pricing zones.

In addition to the topics above, the Arizona Utilities are interested in discussing the following topics at future working group meetings:

• Applicability - Regarding the applicability of an emissions report, it should be developed for informational purposes and should avoid creating jurisdictional oversight by other states. Emissions reports should be developed to inform how state mandated and corporate voluntary GHG reduction goals are being met.
• EDAM vs. WEIM - The Arizona Utilities are not opposed to creating an emission report for WEIM entities, but in either case there should be an opportunity for an entity to opt out.
• Report Granularity - While data may be available on a five-minute level, hourly data may be sufficient to reflect the system conditions. Management of data on a smaller granularity may be burdensome with minimal benefits. Additionally, any data that is tracked or produced should be aggregated on any public-facing reports to avoid confidentiality issues.
• Metered vs. Dispatched/Forecasted Load and Generation - For an accurate report, the Arizona Utilities believe that metered load and generation should be used for emissions accounting.
• LSE Supply - The Arizona Utilities recommend optionality in assigning generation to LSE load. Options could include using an average or using a stacking methodology. Entities could have different reporting needs based on differences in state and voluntary corporate goals.
• Publication/Data Release - The Arizona Utilities would prefer to see a monthly reporting frequency, but quarterly would be beneficial at a minimum. The Arizona Utilities would prefer final reports to be published on a longer, consistent schedule rather than continuously updated whenever there are short-term data changes.
• Data Coordination with WREGIS - The Arizona Utilities are interested in opportunities for coordination with WREGIS and would like to discuss what options might be available.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

The Arizona Utilities has concerns with PGE’s proposed GHG emissions and accounting approach. PGE’s GHG Regulation Zone approach proposes to allow all GHG-regulated states to solve for each other’s excess and shortfall first, prior to residual market calculations. The Arizona Utilities are concerned that this design would not fairly treat entities with state-mandated goals versus those without state-mandated goals or those entities with voluntary corporate GHG reduction goals and would create a preferential bias towards state-mandated entities in meeting their GHG goals over entities that do not.

The Arizona Utilities have voluntary corporate GHG reduction goals that are not state-mandated. SRP’s goals are set and monitored by its governing Board of Directors. Arizona does not have state-mandated GHG emission reduction goals. 

The Arizona Utilities request that the CAISO’s GHG Emissions Accounting and Reporting framework include protocols that allow entities with state-mandates and voluntary corporate goals to be treated fairly through means of a transparent accounting and reporting system that avoids cost-shifts.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

The Arizona Utilities appreciate the CAISO publishing GHG Price Formation trainings and looks forward to reviewing this material.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

BPA appreciates the CAISO’s continued work on this topic.  Generally, BPA would like to see the CAISO facilitate additional dialogue among stakeholders in future workgroups on the important questions below and other areas identified in the 9/19 presentation as requiring more discussion.  BPA hopes that the CAISO does not prematurely publish an issue paper before this discussion can take place.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

Regarding whether the Accounting and Reporting Approach should be produced for BAAs or LSEs:

BPA asks for more clarification on what the CAISO means by LSE as it pertains to BPA.  The accounting should be provided for BPA as a market participant responsible for meeting load in its service territory.  However, BPA is not a traditional LSE in the sense that BPA does not meet retail load.  BPA does not need the accounting to be provided for the individual LSEs that are within BPA’s service territory and are preference customers of BPA. 

It is not useful to provide the accounting on a BAA level.  GHG reporting is specific to power supplied to retail load.  Accounting for resource dispatch and emissions at a BAA level would incorporate multiple resources located in BPA’s BAA that are owned by IPPs or retail utilities and are not owned or contracted to BPA.

Regarding whether the Accounting and Reporting Approach report should provide raw data or a single metric in a standardized format:

BPA recommends the CAISO provide raw data.  At this time the differences in GHG accounting rules across states would make it challenging to provide a single, useable metric across the West.  Perhaps in the future this can be revisited if there is increased consistency across state programs.  BPA notes that there are challenges even in providing raw data related to null power that necessitate further discussion.

Regarding whether there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater for individual LSEs:

BPA is concerned that if the CAISO did not enable less than 10-day contracts to be recorded and assigned to the purchasing entity then it could hinder the value and use of low-carbon specified source contracts in the future.  BPA suggests that the CAISO should work toward IT systems that enable recording shorter-term contracts, even if such updates are not available by the start of EDAM.  BPA would also like to understand whether the current IT limitations would prevent parts of longer-term (e.g., monthly) contracts to be recorded if they began within the 10-day window limitation.  If so, BPA would share the same concerns.

Regarding approaches to calculate the residual rate:

BPA suggests this needs more discussion and withholds any opinion at this time.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

BPA believes this topic necessitates further conversation.  From what BPA understands about PGE’s initial proposal, it appears that it would inappropriately result in shifting claims on resources/emissions where those resources were already part of the market equation for attribution to GHG pricing regulation areas – without compensation for costs borne by LSEs in those states for such clean energy.  However, BPA supports further conversation on whether there should be multiple residual mixes based on shared region or state policy objectives.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

BPA appreciates the CAISO making these trainings available.  BPA anticipates they will be helpful for many BPA staff.  Those at BPA that have watched the trainings do not have any specific feedback at this time.  The areas the CAISO listed as not covered by the trainings (e.g. counterfactual, net export constraint) would also be very helpful.  And generally, BPA believes discussion will be needed in the work group as well as a training on bidding into multiple GHG regulation areas.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

Please see the attached Comments from the Department of Market Monitoring.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

Please see the attached Comments from the Department of Market Monitoring.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

Please see the attached Comments from the Department of Market Monitoring.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

Please see the attached Comments from the Department of Market Monitoring.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

Regarding the GHG Accounting and Reporting Approach, CRS sees the most value in load-based, LSE-level, GHG metrics. In this case, coordination with WREGIS is needed to avoid double counting. CRS is most interested in design elements within the approach related to the alignment of GHG attribution in the market and allocation to LSEs, accounting for null power, residual mix calculations, and reports and metrics for LSEs, WREGIS, and the public.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

CAISO staff presented a question about the “philosophy” of the WPTF approach, referring to whether the objective is/should be only to determine the generation and emissions for which load is responsible (or what we would call load-based accounting), or to instead or also determine emissions from portfolios of generation. From our perspective, the greatest need is for load-based GHG data, for states, LSEs, and consumers, to characterize and report what they are getting from the market. The Discussion Paper also describes the objective as to “allow entities to after the fact, outside of the market, account for the emissions they are responsible for,” for both compliance and voluntary purposes. Load-based emissions data, however, must consider specified transactions of generation and attributes, which occur both inside and outside the market and along different timeframes, as well as differences among states and reporting programs in terms of which transactions get reported and how generation is allocated to reporting entities, e.g. related to RECs and null power. If the approach also provides other data (e.g. about groups or portfolios of generation associated with different entities or states, but not necessarily attributable to any particular load), clear descriptions of what different data represents (what generation is included and calculation methodologies) and the differences between data should be provided. Specifically, it should be clear which data represents generation and emissions attributed to load (load-based data), suitable for retail claims and reporting by LSEs, states, and consumers, and which does not.

Regarding raw data vs. metrics, metrics are more useful, and several different metrics may be provided. That will require agreement on how to define and calculate each metric. Raw data would be less useful, and may produce less harmonization, more fragmentation. But it would meet all needs and avoid tough decisions.

Regarding LSEs vs. BAAs, LSE-level accounting is more precise and potentially more useful, since LSE claims are for a specific group of customers. For load-based accounting, this question is about the boundary within which the retail claim/attributes need to remain and between which double counting needs to be prevented. If allocation is to load in a larger boundary, rather than a single group of customers, then trading, individual claims, and differentiated reporting is still possible within the boundary. The individual retail claims may be unclear, and this may make enforcement of the allocation to load (i.e. preventing attributes from leaving the larger boundary) more difficult.

CAISO Staff also requested feedback on potential data coordination and interface with WREGIS. Again, we refer to the objective of the accounting and reporting approach as described in the Discussion Paper—to “allow entities to after the fact, outside of the market, account for the emissions they are responsible for,” for both compliance and voluntary purposes. If the accounting and reporting approach is for load-based accounting, then coordination is needed to avoid double counting since WREGIS certificates are used to attribute generation to load and for retail usage claims. Problem statements 5(b) and 6b articulate these concerns.

CRS is most interested in design elements within the approach related to:
•    Alignment of attribution to GHG pricing states with allocation to LSEs
•    The approach to accounting for null power, in both LSE allocations and the residual mix
•    LSE-specific reports and metrics
•    Public reports and metrics
•    Data coordination and reporting to WREGIS

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

Our general understanding of the Intra GHG Pricing Zone Adjustment is that it avoids exports from the GHG Pricing Zone and associated carbon costs from impacting prices outside the zone. As such, we believe it would apply only to the GHG Pricing Area. Since the costs of GHG compliance in non-pricing states are not factored into the market and they are not a part of the Pricing Zone, it is unclear to us how PGE’s request to extend this pre-residual mix assignment of excess generation to LSEs in all states with clean energy portfolio requirements (including those outside the GHG Pricing Area) would avoid exports from the Pricing Zone. Beyond this, it is unclear why there should be an assignment of excess to other LSE unfulfilled load (load not met with specified purchases) before assignment to the residual mix, which seems to defeat the purpose of the residual mix.

In general, we recommend that attributed generation remain in the GHG pricing zone and that otherwise all excess and uncontracted generation go to the residual mix. But the interaction between and alignment of in-market attribution to GHG pricing states and post-dispatch allocation to LSEs should be explored further.
 

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

None at this time.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

NV Energy appreciates the opportunity to comment on the GHG working group meeting that occurred on September 19, 2024. In general, NV Energy supports the stakeholder process to establish reports that can be issued to each state showing how the market is impacting their GHG goals or requirements. However, NV Energy recommends that the reports be tailored to each individual state in order to capture the reporting requirements reflective of that state’s policy.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

NV Energy understands the rationale for GHG reporting at the LSE level rather than the BAA level, however, NV Energy has concerns regarding the potential costs associated with the development of a new IT system that CAISO indicated would be necessary for LSE level reporting. For the entire accounting and reporting framework being developed in this work group, it is important for stakeholders to understand the costs that would be involved with a new IT system and the tradeoffs for the level of reporting that is being proposed in this work group. To make an informed decision, stakeholders should know the costs that would be incurred by the reports versus the level of accuracy being proposed. The costs may outweigh the benefits for such reporting and NV Energy may have concerns with certain market reporting choices.  Meaning, NV Energy needs more information before taking a position in this working group about the specific reporting requirements, inputs, verification that is needed, and the costs that would be incurred.

NV Energy prefers the raw data GHG reporting approach rather than a single metric calculated by CAISO. Each state has different methodology and requirements for emission accounting and the market operator should not calculate and report one metric for every state or determine a single methodology for all states.  A single metric approach could create unnecessary confusion and would likely create more harm than good. Furthermore, if stakeholders decide to use a metric approach for all reporting, then CAISO should get all states involved that will be included in this single reporting metric. This should be a metric that has support from all states in order to reduce any confusion and increase transparency about the information that is being portrayed in the report.

Finally, NV Energy needs more information regarding the accounting framework that is being proposed in these working groups. It is difficult to tell which aspects of specific proposals are being considered to move forward in the accounting framework.  Therefore, NV Energy recommends that in the next workshop that CAISO and stakeholders lay out the details of the specific reporting proposals for further comment.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

NV Energy does not have enough information to provide a response about this proposal. It is not clear which states would be included, what design would be proposed for the reporting, or what benefit this creates.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

NV Energy appreciates all the training material that CAISO has provided and does not have a training material request at this time.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

PacifiCorp thanks the presenters at the September 19, 2024 GHG coordination working group session. PacifiCorp continues to appreciate the CAISO hosting a forum for GHG-specific conversations and believes it is important that stakeholders have a place where they can share perspectives from multiple compliance areas and propose solutions.  Leveraging the stakeholder community is critical to achieve an equitable market for all market participants. PacifiCorp believes the following based on the conversation. 

• The Accounting and Reporting Approach should be produced for LSEs as reporting is done on an LSE basis. 

• Raw data should be provided to stakeholders so they can shape the data to meet individual state requirements.  

• It is unclear what the impact of emissions would be if shorter term energy contracts were excluded but believes more conversation is warranted.  

• PacifiCorp does not support PGE’s recommendation to create a “GHG Regulation Zone” that encompasses price-based states (i.e., Cap-and-Trade and Cap-and-Invest programs) and non-price based states that have clean energy mandates. 

• PacifiCorp found the Evergreen training very informative and looks forward to additional topics.  

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

PacifiCorp thanks the CAISO for their continued work to aid market participants with their individual reporting needs. PacifiCorp has the following feedback: 

• The Accounting and Reporting Approach is applicable on an LSE basis.  

• The report should provide raw data so market participants can shape the data to align with individual state requirements. 

• For all market participants, it is unclear what the impact of emissions would be if shorter term energy contracts were excluded -- but more conversation is warranted. It is likely that in PacifiCorp’s case, short and long term contracts will not impact the residual rate as materially as the larger assignment of resources to individual state loads. This may not be the case for other market participants. In the event that an entity is not able to provide contract data at this granularity, PacifiCorp recommends, for discussion, an iterative approach in which the contracts and load assignments of larger capacity are captured first. Even a monthly or annual granularity may be sufficient to launch the approach for a proof-of-concept.    

• PacifiCorp supports the original proposal presented by WPTF that does not include states with non-price based climate policies incorporated into an “Intra GHG Pricing Zone Adjustment” that exchanges clean energy within the zone prior to the assignment of that clean energy into the residual mix.  

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

PacifiCorp appreciates the presentation given by PGE which recommended a modification to the “Intra GHG Pricing Zone Adjustment” proposed by WPTF as part of their Accounting and Reporting Approach. The recommendation given by PGE expands the “Intra GHG Pricing Zone Adjustment” to include all GHG regulated states described as the “GHG Regulation Zone” (“Zone”). This Zone would encompass price-based states (i.e., Cap-and-Trade and Cap-and-Invest programs) and non-price based states (i.e., states with volumetric emissions reduction mandates). PacifiCorp understands the need of the proposal given, as market participants subject to clean energy standards and policies without a price (i.e., PGE and HB 2021 in OR) do not have a way to assign a price reflecting their preference of clean energy resources. However, PacifiCorp does not support the modification to create an Intra GHG Pricing Zone Adjustment. This modification would inherently create a price for states without a price on carbon which PacifiCorp does not believe it is appropriate and has expressed its concerns with this concept in the past.  

If this modification went forward, two emission rates would result. One emission rate for the Zone and another for the residual mix assigned to the rest of the market. In this case, the broader market is guaranteed to have a higher emission rate if, in this case, OR, WA, and CA were to solve each other’s shortfalls before giving any excess energy to the market residual emission rate. Notwithstanding combining all GHG regulated states into a single Zone would not guarantee clean resources are allocated first to those states which appeared to be the intent of the presentation. In addition, this preferential treatment would be discriminatory and would potentially diminish diversity benefits sought out by market participants. PacifiCorp supports the “Intra GHG Pricing Zone Adjustment” as articulated in the WPTF comments on this workshop which describe two zones for each price-based state (i.e., California and Washington) and does not support an expansion of a GHG Regulated Zone to include all GHG regulated states. PacifiCorp does support the continuation of exploring in the working group how non-price based states can reach their goals while still participating in the market. 

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

PacifiCorp thanks the CAISO for their efforts on the Evergreen training and believes the material will help get stakeholders up to speed, especially those with newer employees.  

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

Portland General Electric (“PGE”) appreciates the opportunity to bring forward a proposal to modify the existing Accounting and Reporting framework developed by WPTF. PGE is supportive of the efforts to move the accounting and reporting tool into the policy development phase and considers the PGE proposal part of this ongoing process.

PGE is interested in reviewing feedback from working group participants in response to our initial proposal. PGE underscores that considering this design alteration will avoid any modification to market dispatch, which has been a key concern for some participants. Building the strongest possible accounting framework – one which recognizes the inherent difficulty of achieving LSE compliance with robust state emissions caps – could provide additional avenues for achieving specific emissions reductions targets without affecting market dispatch.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

• PGE recommends that the report be produced at the LSE level.  There are several LSEs in the PGE BAA, and each LSE is required to report its own emissions independently to the Oregon Department of Environmental Quality ("ODEQ").  Having this approach applied to the LSE and not the BAA will help ensure that there is not double counting for emissions attribution.
• While PGE has not reached a conclusion on the format of this report, PGE notes that it must be sufficient to meet reporting compliance requirements established by the ODEQ. PGE also requests that the CAISO, in accordance with standard stakeholder practices, convene a team of market participants to design the report format.
• PGE would like more information on the cost implications of capturing contractual information at the LSE level. Regardless of the cadence of the contract data collection, PGE requests that the CAISO confirm that such information would be solely focused on allowing emissions attribution to specified sources associated with such contracts, and not any other data, financial or otherwise.
• PGE strongly believes that this refinement to the residual rate should include states with non-priced emissions caps. However, there is considerable nuance in (1) which exact non-priced policies should be included in the GHG Regulation Zone adjustment and (2) the number of GHG attribution passes and their sequencing.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

PGE believes that the current proposal’s attribution framework for residual clean energy should be expanded to include states with compliance-based emissions caps in addition to the priced states. The current design would not consider GHG regulations capping GHG emissions that are fully binding but do not include a pricing component. One such example is HB2021 (Oregon), which applies to several LSEs in Oregon, including PGE. HB2021 rules require an 80% reduction in GHG emissions associated with serving retail load from a 2010-2012 baseline by 2030 and a 100% reduction by 2040.

State policies like Oregon’s HB 2021 are at least as stringent as the cap-and-trade programs in place in California and Washington, but crucially do not provide a mechanism for PGE or others to signal willingness to pay for non-emitting energy with a GHG price adder. 

HB 2021 and similar policies will greatly incentivize impacted market participants to build a resource portfolio in compliance with these emission constraints. PGE’s proposal would enable market participants who have similar GHG content portfolio and emission restrictions to assign emissions ahead of the market-wide residual rate.

Specifically, the design revision would allow equitable access to excess clean energy for market participants subject to state laws. This would apply to those laws that include enforceable greenhouse gas emissions reduction targets in the electricity sector. Such an amendment could provide greater parity for such market participants in demonstrating compliance with GHG policy.

Separating the entities which have a GHG regulation and those that do not have any compliance obligations could result in an improved residual emissions rate by pooling together the clean attributes built out because of the GHG regulations to which such entities, including PGE, are subject. Absent PGE’s recommend changes, market participants operating under a compliance-based program could potentially be required to self-schedule non-emitting generation or otherwise designate them as non-participating, significantly reducing both economic efficiency and the ability of the market to be a tool to reduce overall GHG emissions. Implementing this alteration could improve efficiency and preserve the economic benefits of market integration.

PGE recognizes that there is significant design work remaining with the stakeholder community to develop this proposal and welcomes those discussions.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

PGE thanks the CAISO for its commitment to educating stakeholders on the functioning of existing CAISO structures and the interoperability of this design with the regulatory constructs of market participants across the region.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

PGP appreciates the opportunity to comment on progress made so far in the GHG Coordination Working Group. In these comments, PGP makes several suggestions with respect to the topics discussed at the September 19, 2024, working group meeting and in the ISO’s September 16th Discussion Paper.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

PGP appreciates the ISO’s moving the Accounting and Reporting Approach to the policy development phase, and we look forward to reviewing the ISO’s issue paper and straw proposal this Fall. However, PGP is concerned by the assertion made on page 6 of the September 16th Discussion Paper that the Accounting and Reporting Approach “would not be available where there are already state GHG reporting frameworks, unless requested by that state. The Accounting and Reporting Approach is intended for states with climate policies not based on price, and to support voluntary and corporate reporting programs.” PGP strongly supports a framework that is voluntary for all market participants and load-serving entities who wish to participate in the accounting and reporting framework. Such a voluntary framework would mean that participants would be required to “opt-in” and agree to the requirements of the framework. The framework will also need to address how to treat entities who do not wish to participate in the accounting and reporting process and what “non-participation” may require, if anything. PGP is concerned with any CAISO policy that incorporates an explicit state policy or regulatory requirement where none already exists at the state level. Assuming the framework is voluntary, states who do not wish their regulated utilities to participate in the tracking and reporting program may so indicate to those regulated entities. Entities within states who already have GHG reporting frameworks may, in some instances, not be jurisdictional to those reporting frameworks, may desire to opt-in to the reporting and accounting framework for informational purposes, or may have corporate goals beyond state policy requirements. PGP recommends that CAISO refrain from adopting such a blanket policy as to prohibit entities in states with GHG reporting frameworks from accessing the accounting and reporting approach developed by this working group. Rather, the program should be built with flexibility so that entities and any relevant state regulators may determine whether it is appropriate for them to participate.

Additionally, PGP would like to offer the following feedback on the specific questions posed by the ISO below:

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs.

Generally, PGP’s view is that the likely intent of the accounting and reporting approach is to enable load-serving entities to account for energy and emissions used to serve their load. To the extent possible, PGP supports a framework that would establish reporting at the LSE level. However, PGP is interested in understanding the tradeoffs associated with different approaches and is specifically interested in understanding the accounting needs of entities with compliance obligations.

• Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format.

The WPTF framework contemplates the development of a residual market mix that reflects the energy available to serve load from the market. PGP’s understanding is that the development and calculation of this residual mix is likely to require information from individual market participants that may be confidential. PGP is therefore not sure that CAISO can publish sufficient raw data for organizations to produce a report. PGP is interested in hearing from entities with compliance requirements with respect to whether confidential information is needed to develop calculations necessary for compliance purposes.

• Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate.

PGP does not have any specific feedback on this question at this time, but we would generally like to understand what types or categories of contracts may typically fall within the 10-day window.

• Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

Any calculations of a residual rate will have to be responsive to concerns about the inclusion of null power resources. For example, the State of Washington (Dept. of Ecology, Dept. of Commerce, and Utilities & Transportation Commission) has expressed that the association of fuel types or an emissions rate with “null power” may prevent entities from using the associated Renewable Energy Certificate (RECs) for compliance with the state’s Clean Energy Transformation Act (CETA) depending on a number of factors, including the temporal granularity at which residual rates are calculated and/or publicly reported. This issue is particularly critical for entities with large hydro portfolios who, during certain times of the year, may generate more clean energy than their load. If RECs are retained by those entities but the underlying energy is contributed to a residual mix as non-emitting and used by third parties to calculate their own emissions, it may compromise those utilities’ ability to use the RECs for compliance purposes. This outcome would frustrate the intent of CETA, which designed four-year compliance periods in part to address the seasonal and annual variability inherent in hydro production.  

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

PGP supports continued discussion in the working group of options for an alternative accounting adjustment to the “Intra GHG Pricing Zone Adjustment” that would reflect all GHG regulated zones, rather than only GHG Pricing Zones. PGP recognizes the concern raised by PGE related to the potential for disproportionate impacts and/or competitive disadvantage of states with non-priced policies relative to states with pricing policies. If non-emitting energy is preferentially allocated or attributed to priced zones, there may be a negative impact on the residual mix and/or the quantity of non-emitting supply available to non-pricing zones. However, in the absence of a mechanism for LSEs in non-pricing states to signal a willingness to pay a premium non-emitting energy (as exists in pricing zones), it may not be appropriate to simply create an accounting adjustment that creates parity between non-pricing and pricing states when such parity does not exist within the market dispatch or price formation design.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

PGP appreciates the ISO’s offering of evergreen training on GHG Price Formation. 

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

SDG&E values the opportunity to provide feedback on the September 19, 2024, GHG Coordination Working Group initiative meeting. SDG&E is optimistic about CAISO’s direction in creating consistent and equitable GHG emissions costs across jurisdictions. SDG&E looks forward to contributing insights on overall GHG reduction goals and supports initiatives that enhance transparency and data accessibility for GHG management across all entities.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

• Should the Accounting and Reporting Approach be produced for BAAs or LSEs?

SDG&E requests that CAISO provide more detail on the cost and effort associated with producing the Accounting and Reporting Approach at the LSE-specific level versus the BAA level. Understanding these cost and time implications will provide insight; a significant cost difference could inform our position. Additionally, it will be helpful to learn from other parties’ comments why more granular LSE-specific information is necessary for their purposes.

• Should the report provide raw data or a single metric in a standardized format?

SDG&E finds advantages in both approaches. The raw data approach prioritizes flexibility and transparency, enabling more granular analysis and customization. This allows entities to tailor reports based on specific state mandates and meet precise policy needs and regulations. However, having the option for CAISO to produce a single metric in a standardized format could be beneficial for report consistency, comparative analysis, and benchmarking across different entities.

If the incremental cost is minimal, a hybrid approach might be most beneficial. This could involve providing a standardized metric for high-level reporting and decision-making while offering access to raw data for entities requiring more detailed analysis. This approach balances the need for consistency and simplicity with the flexibility and transparency of raw data.

• Is there a material difference in emissions if only contracts of ten days or greater are captured in the LSE rate?

SDG&E has no comments at this time. 

• Recommendations for calculating the residual rate

SDG&E appreciates WPTF’s presentation and generally agrees that more discussion on the proposed residual rate framework is necessary. We are particularly interested in understanding the trade-offs between including only priced regions and incorporating states with non-price-based climate policies.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

SDG&E has no comments at this time. 

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

SDG&E appreciates the Evergreen GHG Price Formation Trainings shared with the GHG initiative stakeholders. Additional topics would be beneficial, including: (1) The GHG counterfactual in the Western Energy Imbalance Market (WEIM) and the GHG reference pass in the Extended Day-Ahead Market (EDAM); (2) Net export constraints including leakage; and (3) Bidding examples among different regulated areas and secondary dispatch mechanisms, which will be discussed in future GHG initiative working group meetings.

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

Six Cities’ Summary:  With respect to the granularity of GHG data reporting, the Six Cities request additional information regarding the compliance requirements for BAAs and LSEs expecting to participate in the EDAM and the relative costs, complexities, and benefits of tracking and reporting data at the LSE level versus the BAA level.  Any data tracked at the LSE level should be distributed to each LSE on resources used to serve its own load, and each LSE should have responsibility and authority for further distribution of its own data based on policies or requirements established by its Local Regulatory Authority or other local, state, or federal regulatory authorities having applicable jurisdiction.

With regard to calculation of a residual rate, the Six Cities at this time take no substantive position concerning the appropriateness of any Intra GHG Pricing Zone Adjustment and request further explanation of the rationale for and evaluation of the potential consequences of any reassignment of surplus designated energy within a GHG zone, rather than consideration as residual energy, prior to adoption of any reassignment mechanism.

The Six Cities welcome the availability of the GHG training materials and identify two questions regarding the examples in Chapter 3.

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

Six Cities’ Comments:  With respect to the granularity of GHG data reporting, the Six Cities request additional information regarding the compliance requirements for BAAs and LSEs expecting to participate in the EDAM and the relative costs, complexities, and benefits of tracking and reporting data at the LSE level versus the BAA level.  If data are tracked at the LSE level, such data should be distributed to each LSE on resources used to serve its own load.  Each LSE should have responsibility and authority for further distribution of its own data based on policies or requirements established by its Local Regulatory Authority or other local, state, or federal regulatory authorities having applicable jurisdiction.  Even if LSE level data are tracked and distributed as described above, the Six Cities also support aggregation of data at the BAA level and publication of such aggregated data in order to provide an overview of GHG impacts across the markets.  The Six Cities recommend further evaluation and discussion with stakeholders and interested regulatory authorities regarding the granularity of data to be tracked and reported and to develop metrics for which aggregated data are reported.

If data tracking is implemented at the LSE level, the Six Cities support providing to each LSE its own raw data in a format that will enable LSEs receiving the data to analyze the information based on a variety of perspectives or metrics.

With regard to calculation of a residual rate, the Six Cities at this time take no substantive position concerning the appropriateness of any Intra GHG Pricing Zone Adjustment, either as suggested in WPTF’s April 17, 2024 Energy and GHG Accounting Framework Illustration or an alternative, broader approach as suggested in PGE’s presentation at the September 19, 2024 working group session.  The Six Cities request further explanation of the rationale for and evaluation of the potential consequences of any reassignment of surplus designated energy within a GHG zone rather than consideration as residual energy prior to adoption of a reassignment mechanism. 

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

Six Cities’ Response:  See Six Cities’ Comments in response to Item 2 above.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

Six Cities’ Comments:  The Six Cities appreciate the CAISO’s development and posting of the Evergreen Training materials on the impacts of GHG adders on price formation.  At this time, the Six Cities have the following questions - -

1. With reference to examples in Chapter 3, why dispatch resources from the Non-GHG Area to serve load in the GHG Area if there is energy available in the GHG Area and no difference in price?
2. In the optimization as applied in the markets, do losses affect the selection of resources to meet load in different areas?

1. Please provide a summary of your organization's comments on the September 19, 2024 GHG Coordination Working Group.

WPTF appreciates the opportunity to provide these comments on the most recent GHG Working Group discussions. The comments attached primarily focus on the GHG Accounting and Reporting Framework elements of the meeting. Although we would be remiss in not noting our appreciation for the CAISO’s GHG Price Formation Evergreen training.

The comments below reflect the following points:

• The Accounting and Reporting approach should enable reporting at the LSE level given several states have established LSE specific targets
• The more granular the data, the more adaptable the framework will be to changes overtime or even differences between reporting requirements among LSEs
• Clarifies the role of the Intra GHG Pricing Zone Adjustment feature as a mechanism intended to align the GHG accounting with the implicit and explicit deeming that occurs from the market dispatch
• Seek confirmation of our understanding of PGE’s proposed modification in that it essentially creates a cleaner market residual emissions rate for LSEs subject to a cap-and-trade or clean energy standards
• Seek additional discussion around what types of contracts can be used to claim clean energy as means to further support LSEs subject to clean energy standards under the proposed framework

2. Please provide your organization's feedback in response to the ISO’s “Designing the GHG Accounting and Reporting Approach” presentation. What design elements within the approach is your organization most interested in discussing at the next working group meeting?

• Please provide your organization’s feedback on if the Accounting and Reporting Approach should be produced for BAAs or LSEs. • Please provide your organization's feedback on if the Accounting and Reporting Approach report should provide raw data so that your organization can produce the report or if the CAISO should produce a single metric in a standardized format. • Please provide your organization's feedback on if there is a material difference in emissions if the Accounting and Reporting Approach only captures contracts that are ten days or greater in the LSE rate. If they are not captured in the LSE emissions rate they would be captured in the residual rate. • Please provide your organization’s recommendations for approaches to calculate the residual rate for the Accounting and Reporting Approach. For example, should WTPF’s proposal for an “Intra GHG Pricing Zone Adjustment” in the residual rate only include priced regions or should it also include states with climate policies not based on a price?

Several states, including Oregon, establish GHG targets for individual LSEs. For this reason, we consider it important that this approach enables Accounting and Reporting at the LSE level.

WPTF understands that there are trade-offs between the level of granularity the data is provided and the cost to implement more granular data. However, one of the benefits of more granularity is the ease of adapting as reporting requirements evolve over time. It could be the case that some LSEs are required to produce the data in slightly different formats, or the way an LSE reports data changes, thus to the extent the data can be provided in raw format to support the variations of reporting that will be required, the more useful this framework will be.

The length of period for contracts to be captured in the LSE emission rate is a policy question that warrants further discussion, especially as it relates to how the non-priced GHG regions will leverage this framework to meet their renewable standards and goals. For example, if a non-priced GHG region can contract with a clean energy resource of a shorter duration (i.e., less than 10 day contract) then it may be worthwhile to consider allowing that contract to be reflected in the LSE’s portfolio under the Accounting and Reporting Framework. However, if the clean energy standards are determined to have been met by accounting for clean energy used across a longer timeframe (e.g., month or year) then its less likely shorter duration contracts are needed and thus may not be an issue. Here again, this is another policy discussion to ensure appropriate balance between duration of contracts that can be used to claim energy in the accounting and reporting framework and how the LSEs envision using such contracts to ensure they meet the clean energy standards.

WPTF would like to take this opportunity to clarify the role the “Intra GHG Pricing Zone Adjustment” plays in the framework. The Intra GHG Pricing Zone Adjustment is intended to align accounting and reporting with deeming of energy (or lack therefore) to a GHG regulated area and the LSEs within that area. It is not intended to further deem resources (above what the market optimization deems) from one GHG regulated area to serve load in another GHG regulated area first. For example, if there are two LSEs within the CA GHG regulated area and one is short (LSE 1) and the other long (LSE 2), and CA is not exporting, then it’s reasonable to assume the energy inside CA is staying inside CA to serve its own load. Thus, the excess energy from LSE 2 is first used to meet the shortage of LSE 1 in the Accounting and Reporting Framework.

The Intra GHG Pricing Zone Adjustment does not allow excess energy from one LSE in CA (LSE 2) to help meet any shortages of LSEs in another GHG regulated area (e.g., WA LSE) above and beyond what the market deemed/attributed resources from one GHG regulated area to meet load in the other GHG regulated area. Continuing with the above example, if after the excess energy from LSE 2 is used to meet the shortage of LSE 1 there still remains excess then there are two potential outcomes. One, if the market deems the remaining excess energy to another GHG regulated area (e.g., WA) then that energy would be allocated to LSEs within WA. Two, if the market does not deem the excess energy to another GHG regulated area, then the excess energy goes to the residual emission rate along with any other energy from non-GHG regulated areas which could include additional clean energy (e.g., excess solar from NV).

In other words, the Intra GHG Pricing Zone Adjustment does not provide GHG regulated areas with first access to excess clean energy from other GHG regulated areas. The only way excess clean energy from one GHG regulated area is, for purposes of accounting and reporting, moved to another LSE in another GHG regulated area is (1) the market has deemed that energy as being used to serve load in the GHG regulated area or (2) the LSEs in the “other” GHG regulated area have contracted for that energy.

3. Please provide your organization's feedback in response to PGE’s “CAISO GHG Emissions Accounting and Reporting WPTF Proposal” presentation.

WPTF appreciates the effort PGE has put forth in further evolving the WPTF Accounting and Reporting Framework. It is our understanding that PGE is proposing adjustments to how excess clean energy from one LSE is allocated to other LSEs that have either a cap-and-trade program (e.g., CA and WA) or clean energy standards/goals (e.g., OR). Furthermore, it is our understanding PGE is proposing this accounting adjustment to be made outside the market optimization and thus can be considered an amendment to the WPTF framework.

First, we agree with PGE that any accounting of energy to meet clean energy standards should be done outside the market optimization. Our understanding of PGE’s concern with the current framework is that LSEs with clean energy standards are subject to more restrictions than LSEs without clean energy standards, and thus should have access to cleaner energy when having to lean on the market for clean energy above and beyond what it has already contracted for. We also understand that PGE’s preference would be for LSEs under clean energy standards to be part of the GHG regulated area that allows LSEs with long excess clean energy to help offset LSEs that are short excess clean energy first – being referred to as the Intra GHG Pricing Zone Adjustment – instead of that excess clean energy contributing to the residual supply for the market as a whole. However, as discussed in response to #2 above, the Intra GHG Pricing Zone Adjustment would not result in attribution of energy from one GHG Pricing zone to another unless that energy was deemed into the second pricing zone. To be clear, the Intra GHG Pricing Zone Adjustment does not provide LSEs in one GHG regulated area access to additional clean energy from LSEs in another GHG regulated area above and beyond what the market dispatch has deemed/attributed.

If this is interpretation is correct, then PGE is effectively proposing another residual emissions rate that is separate from the overall market residual emission rate, and only includes excess energy from LSEs subject to either cap-and-trade or clean energy standards. It essentially creates another cleaner residual emissions rate based on the GHG areas subject to certain programs, standards, and/or requirements that is used for the LSEs in those GHG areas. 

There are two bookends to consider – with and without the PGE modification. On one end, with the one residual emissions rate (i.e., current WPTF framework), if all the excess energy going into the residual emissions rate is from emitting resources, the LSE with a clean energy standard will face a higher emissions rate, making it more challenging to meet its requirements. On the other end, if the framework creates a new cleaner emissions rate just for LSEs that face either a cap-and-trade program or clean energy standards, then LSEs with clean energy standards that have not procured or forward contracted sufficiently can lean on other LSEs that have contracted and procured sufficient clean energy without having to incur any additional costs.

Within the proposed WPTF framework there is still an outstanding policy question with regards to the duration of contracts that can be used to claim clean energy. We encourage the CAISO and stakeholders to think through how that element of the proposed framework can be used to address the concern raised by PGE and potentially strike a balance between the two bookends discussed above. For example, if an LSE foresees it may be short clean energy to meet its requirement, it could then go out and forward contract with additional clean energy such that meets the contracting requirements to then be claimed under the proposed WPTF framework.

4. Please provide your organization’s feedback in response to the ISO’s “GHG Price Formation Evergreen Training Update and Discussion”. Do you have any feedback or questions on the existing Price Formation training? What additional content would you like to see in future GHG training materials?

No comment.