Comments on March 14, 2024 Working Group

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

Bonneville appreciates the CAISO providing space to discuss solutions for meeting GHG compliance and reporting needs.  Bonneville supports the working group prioritizing development of an accounting, tracking, and reporting approach, like the one presented by the WPTF, as a means for meeting a variety of entity’s compliance and reporting needs.  Bonneville looks forward to further discussion on the details of such an approach in the working group.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

Bonneville appreciates the overview of the proposal shared at the meeting.  However, Bonneville does not support further pursuit of such an approach at this time.  A dispatch-based approach introduces significant complexities and has the potential to create market inefficiencies and/or shift costs across participants.  It also appears to have limited application to only utilities with state mandates to reduce GHG emissions, and may not be able to meet the broader set of reporting and tracking needs of participants across the market.

If the working group decides to further pursue a dispatch-based option, Bonneville believes significantly more time would need to be spent discussing the approach proposed by the State Climate Action MOU group.  Bonneville would need to better understand how the two approaches would work, what value they would provide for a utility utilizing them, and what impacts they would have on other market participants. 

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

Bonneville supports the working group prioritizing creation of an accounting, tracking and reporting approach at this time.  Bonneville believes an out-of-market approach like the one presented by WPTF has the potential to solve the needs of many entities while avoiding the consequences mentioned under question 2 above.  Bonneville would like to see the workgroup focus on developing an approach that builds off the WPTF proposal.  Bonneville notes there are alternatives to many of the specific elements that WTPF proposed that warrant discussion and deliberation.  Many of these are noted on the WPTF “policy decisions” slide.  There are also aspects of the approach WPTF presented where there is room for flexibility to accommodate individual participant or state program needs within the overarching framework.  Bonneville looks forward to further discussion of an accounting solution.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

No comment.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

Bonneville itself is not subject to state GHG reduction programs.  The information Bonneville provides is on the requirements of Bonneville’s public power customers in the Pacific Northwest, and thus Bonneville has a need for solutions to support those customers in meeting their state requirements and/or local utility goals. 

Bonneville has identified a need for accounting, tracking and reporting to support its customers generally.  In Oregon, Bonneville’s customers have state GHG reporting requirements, but are not subject to the GHG reduction requirements of HB 2021.  Bonneville believes the WPTF proposal could support this accounting, tracking and reporting need for its Oregon customers.

In Washington, Bonneville’s customers are subject to the Climate Commitment Act (CCA) and the Clean Energy Transformation Act.  As the CAISO is aware, the CCA is already in effect and Bonneville is interested in the application of the market design for GHG accounting for a GHG regulation area to Washington.  Because of the specific compliance requirements of CETA, Bonneville is not aware of a specific need for accounting and reporting for CETA.  However, Bonneville notes that any solution discussed by this workgroup should consider the potential for inadvertently impacting CETA compliance for Washington utilities.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

No comment.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

Bonneville appreciates the grouping of these into workstreams, but found the grouping proposed by PGP and PSE to better articulate the work to be addressed by each workstream.  At any rate, Bonneville hopes to see the working group shift efforts soon toward making progress on solutions for the problem statements/issues articulated for each workstream.

8. Additional comments:

No additional comments.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

We provide high-level comments on the two presentations, and we identify a double counting concern due to the existing REC system. We describe the need for coordination with WREGIS, the potential to expand WREGIS to an all-generation tracking system, and how this could work together with comprehensive energy tracking/accounting in the market. We also highlight how transparency and metrics are needed to avoid double counting for the existing market attributions for GHG pricing states as well as for a new market mechanism or accounting framework to serve non-pricing and clean energy policies and voluntary goals.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

See no. 4 below.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

See no. 4 below.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

First of all, we agree with the problem statement and the need for more comprehensive accounting, and that current market attribution favors GHG-pricing policy and doesn’t give entities in other states a way to meet their emissions requirements/goals. We also agree that this is broader than LSEs with compliance targets and that this is about voluntary goals and energy users with voluntary and compliance targets.

But whether we’re talking about a dispatch-based attribution mechanism or a post-dispatch accounting system, or some combination of both, there is a double counting concern coming from the fact that there is a pre-existing retail attribution system for certain renewable resources in the form of the REC system. This has been presented as an unbundled REC problem or a specific state policy problem. But it is more fundamental than that. It is really about having two different accounting systems for retail claims. As such, we view it as an issue for the market. If we have two different systems for retail attribution of generation in the same region operating simultaneously, whether for the emissions or other attributes or both—i.e. for claims on specified generation—this creates a risk of double counting. Either the associated RECs can already have been transacted to a different entity by the time the resource-specific energy/market transaction/accounting occurs, or the RECs can be transacted to a different entity after the market attribution/accounting. That produces two different retail claims on a single unit of generation. It is clear that energy attribute certificates (EACs), of which RECs are one type, will be used for emissions-related claims by states, LSEs, and energy users. The market cannot decide what constitutes a claim. 

Neither attribution approach that we heard matches how other state programs and new federal programs are allocating generation to load. In particular, consensus is growing at the federal level around the use of EACs for attribution of emissions to load. RECs are a type of EAC. For federal procurement, for tax credits, for federal clean transportation policy, and for production of fuels used for U.S. Clean Air Act compliance by regulated generators.

We agree that there is a need in the West to track energy with attributes, to meet the requirements of western state programs. That makes the West different from other regions where the certificate system is separate from wholesale markets. An out-of-market-only attribution system (like we see in the East) will not meet load- or procurement-based state requirements in the West that require delivery of the energy or measure emissions from the energy serving load (this does not need to mean demonstrating physical delivery to consumers). That means that there is a need for some comprehensive resource-specific tracking and accounting in the market in the West.

Regardless, the accounting system in the West cannot simply ignore certificates. EACs in the West are the same instrument as they are in other regions. Double counting between programs, between states, between states and federal programs, or between voluntary and compliance programs will not meet the purpose of any program. 

We see this as an immediate problem—double counting of WREGIS generation due to attribution in the market—which is the same issue we currently have with attribution to GHG-pricing states, regardless of whether a dispatch-based or post-dispatch accounting method is chosen for attribution. One solution is coordination with the REC system. CAISO would share current market attribution data for GHG-pricing states for WREGIS generators, and share future market attribution data based on either the dispatch-based or post-dispatch resource-specific accounting mechanism for WREGIS generators. That coordination should be built in and discussed as a condition of any new market mechanism for GHG attribution or GHG accounting framework. WREGIS could put market attribution data (e.g. the state of attribution) on RECs associated with attributed generation. With that transparency, every program gets to make its own decision about those RECs. See CRS’s 9-26-2022 comments on CAISO’s EDAM Revised Straw Proposal for more information.

We should also consider the potential of regional all-generation certificate tracking in WREGIS in the future—i.e. expanding tracking in WREGIS to all resources and generation—potentially working in combination with comprehensive GHG accounting for energy in the market. We see that as a real possibility, and it does not require that everyone opt in to have a WREGIS account. In other regions, regional all-generation certificate tracking is used to produce an accurate region-wide residual mix based on the distribution of certificates, for comprehensive accounting of all generation regionally without double counting, such that everyone knows what they are getting. That residual mix of unsold certificates is assigned to unfulfilled LSE load—load not met with specified attributes—at the end of defined trading periods. That would be a big step forward compared to default emissions factors. This could work together with comprehensive emissions accounting/attribution in the market, again to address state requirements for delivered energy and enable specified resource transactions for market participants, as well as to produce a market-specific residual mix. In this scenario, there is again a need for coordination with the certificate system. Comprehensive emissions attribution in the market needs to be married with an all-generation certificate tracking system at WREGIS. In that case, CAISO would share all market attribution data for all generators in the market with all-generation tracking in WREGIS.

There are issues to discuss related to data sharing and coordination with WREGIS, e.g. related to what data is shared, the frequency, how to avoid confidentiality concerns, etc. Perhaps we should have a full conversation in this group on coordination with WREGIS and the issues and questions surrounding that. 

But in general, I would encourage the group to think about RECs and EACs as a potential tracking solution, to the extent that we may have an existing system that we can use and strengthen, and that regardless that we will have to work with (cannot ignore) if we build something new. Certificate systems do not currently track energy transactions, but they could be used for that or to help define energy transactions in a way that is least disruptive to markets.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

None at this time.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

None at this time.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

We support the creation of workstreams. Our primary comment is that we need transparency and metrics to avoid double counting for the existing market attributions (PS 6) for GHG pricing states, not just for a new market mechanism or accounting framework to serve non-pricing and clean energy policies and voluntary goals. This does not appear to be covered any of the work streams. To the extent that current PS 6 directs discussion to address what is needed for the current markets now (i.e. attribution for GHG-pricing states), while we also work toward something new and more comprehensive for non-pricing states and avoiding double counting with that (work streams # 2 and 3), that should be maintained. Avoiding double counting is relevant to both current and future GHG attribution and accounting. We suggest this be reflected in the work streams.

8. Additional comments:

None at this time.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

NV Energy is appreciative of CAISO for initiating the work group discussions in order to help companies meet the GHG goals or requirements for the non-priced GHG programs that several states have developed.  While NV Energy supports the process for stakeholders to discuss the different approaches that could be adopted to help companies meet the individual state requirements, NV Energy is concerned by some of the discussions and proposals presented in the latest working group meeting. CAISO should first pursue a tracking and reporting methodology that develops reports for each state that has a non-priced GHG program to provide the information that is necessary to meet that state’s requirements. These reports should be requested by either state regulators or the market participant with the reporting obligation and should be designed to specifically report on the metrics that are required to meet those individual states requirements.  If the tracking and reporting methodology does not meet the needs of a state, only then should a constraint or priced methodology be designed to accommodate the law or regulatory requirements of that specific state, similar to the approach taken for the pricing states.  A market constraint, priced solution, or special report should only be implemented by the individual request of a state representative or a market participant with the reporting obligation rather than at the request of any market participant. Additionally, NV Energy would be more supportive of efforts that are uniquely tailored to meet the individual requirements that are needed for each state rather than proposals from stakeholders that treat all states as having the same metrics.

NV Energy would oppose creating a dispatch solution that requires uniform treatment of GHG attribution that might conflict with the requirements of states that may not have adopted rules requiring those forms of restrictions which could result in increased cost to customers for GHG compliance beyond the rules established by state legislators and regulators. Specifically, states might have different treatment for resource types, market awards, and/or requirements for the reporting. NV Energy understands that this would add additional layers of complexity to tailor the design to each specific state laws but believes that it is necessary so that each state’s policy is respected and the market produces just and reasonable rates.  Additionally, the proposal identified in this working group may have an impact on price formation and ultimately the benefits that are achieved through the market. For this reason, it is important that this decision or election only come from each states regulator or a market participant with the reporting obligation rather than elected by any market participant.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

NV Energy is appreciative for the proposal to help provide tools for utilities that need dispatch solutions in order to meet the non-priced GHG programs developed by states. Currently, NV Energy does not believe a dispatch solution would be the best option considering the impacts to customer benefits but proposes the following questions for the working group when considering the proposal further:

1. How would the market design treat states with no language or policy about how to treat market transactions?
2. Could these dispatch solutions be developed differently for each non-priced GHG program or is this too complex of a solution for the optimization to be able to handle?
3. Could CAISO weigh in on the proposed dispatch solutions for implementation feasibility and list the potential issues that this proposed solution could create within the market?

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

NV Energy is appreciative for the proposal to help provide reports for utilities that need market reporting in order to meet the non-priced GHG programs developed by states. Currently, NV Energy supports the reporting proposal as long as the market operator develops specific reports for each states reporting requirements and does not uniformly apply the reporting metrics to all states. It may be more harmful than helpful to create reports that honor one states policies and do not respect the policies and reporting requirements of another.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

As stated in the general comments, NV Energy is more supportive of the market reporting approach with caveats prior to the consideration of a dispatch solution due to the potential market complexities and the impact to market benefits.

It should be noted that each state has a robust Renewable Portfolio Standard (“RPS”) that develops targets within the Integrated Resource Plans (“IRPs”) to build a cleaner system with more renewables entering the grid every year.  Additionally, some states have gone beyond this standard to develop GHG programs that either develop specific prices for the emissions and others have not but establish future goals to the reduce emissions. Therefore, if the intent of this working group is to develop specific tools for companies to be able to meet and demonstrate their compliance, then there should be no reason to push beyond the individual state laws and policies that are already in place. Wholesale markets like the EIM are powerful tools to dispatch renewable, variable resources within the entire footprint to reduce curtailments. Any proposal put forth from this group should not harm the current economic dispatch structure unless narrowly tailored to meet a state-specific need. The working group should ask whether each proposal would impact the dispatch to renewable resources, would it increase costs within the market potentially allowing more emitting resources to be considered in the stack, and is the proposed improvement worth the reduction in customer benefits while keeping in mind that the grid will become cleaner overtime with the individual state requirements that are already in place. Furthermore, the working group should also consider the role of the market operator and whether or not proposals are pursuing policies that are beyond individual state requirements.  NV Energy does not believe it would be appropriate for a market operator or a market to implement market designs that go beyond the individual state policies that are in place. 

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

The state of Nevada established a Renewable Portfolio Standard (“RPS”) in Senate Bill 358 and an economy wide Greenhouse Emission goal in Senate Bill 254. The RPS sets the percentage of renewable energy sale that is required to meet the customer load and the Greenhouse Emission Goal sets the statewide goal to lower the emissions by a percentage from the 2005 baseline.  SB 358 imposes specific criteria as to how to measure the company’s compliance requirements. These are based on the output of NV Energy’s own resources and those under contract.  There are no adjustments for market sales or purchases, even though the legislation was passed in 2019, after the start of NV Energy’s EIM participation in 2015. Stated another way, the legislature adopted a simplified, objective reporting regime.

SB 254 requires Nevada’s Department of Conservation and Natural Resources to issue a report on  state-wide emissions by December 31, 2019 and annually thereafter that provides a 20-year forecast of GHG emissions in the state.  The report includes GHG emissions projections for certain sectors including electric production.  The law requires a qualitative assessment of whether state polices will meet GHG reductions of 28% by 2025, 45% by 2030, and zero or near zero by 2050. The law’s focus is on in-state emissions. Therefore, NV Energy would support reporting solutions that are voluntary and individually developed to meet that specific state requirement because each state may have different reporting requirements. 

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

No comment. 

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

No comment. 

8. Additional comments:

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

PacifiCorp thanks the presenters of the March 13, 2024, GHG working group for their hard work and dedication on recommending approaches to satisfy requirements for organized market purchases attributed to states with non-price based emissions reduction policies. WPTF’s proposal contemplates an accounting-based compliance reporting approach supported by a centralized database, that would capture all owned and contracted resources and power purchase agreements as well as the portion serving the market, with the value proposition of ensuring no double claims on resources serving load serving entity (LSE) internal load before allowing resources to be available to the market. In contrast, the State Climate Action MOU Group offered two proposals for incorporating emissions-based policies within the market dispatch. PacifiCorp supports further exploring the principles WPTF’s approach because it builds off existing compliance accounting frameworks, is likely to support cost-allocation based emissions accounting for multijurisdictional utilities such as PacifiCorp and would not interfere with market dispatch and price formation. Additionally, PacifiCorp supports the three work streams as shown in the work stream document posted as it captures the efforts of the GHG working group and appropriately categorizes the problem statements.  

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

PacifiCorp thanks Doug Howe for presenting two proposals to the CAISO GHG working group that discussed an in-market dispatch solution using emission and import constraints to support compliance with non-price-based GHG programs. However, PacifiCorp does not believe an in-market solution is required and would like to explore options that would not affect market dispatch.  

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

PacifiCorp is supportive of WPTF’s proposal for an accounting based approach accompanied by a CAISO-hosted or third-party developed comprehensive energy and GHG accounting and reporting system database. The database would account for all capacity an LSE planned to use to meet its individual load requirements, while subtracting specified sales before the market claims surplus supply for energy users. If surplus supply exists, that supply is then given an average emission rate from the BAA and counted as residual market supply with its own associated residual emission rate.  In principle, the accounting approach builds off existing GHG accounting practices for multijurisdictional LSE that PacifiCorp currently adheres to. Currently, on an annual actuals basis, PacifiCorp assigns emissions to its states consistent with the portion of the specified resources its retail customers are allocated and pay for in their retail rates. Any unspecified transactions are also shared among the states and assigned a state-determined unspecified emissions rate. PacifiCorp believes the WPTF accounting proposal largely preserves this framework. From these early conversations, PacifiCorp is supportive of the average residual emissions rate approach reflecting the BAA system average, consistent with WPTF’s proposal but more conversation is needed. 

During the call, CAISO noted that the market is currently set up with resources assigned to scheduling coordinators and not on an LSE basis. PacifiCorp requests that CAISO evaluate the feasibility of appropriately assigning resources on an LSE basis, and what information would be required from the LSE at what frequency. It is possible that scheduling coordinators could provide this information. While PacifiCorp is supportive of accounting-based frameworks in principle, the proposal raises operational and regulatory questions about maintaining this database, depending on its functions. PacifiCorp would like more conversation in a future workshop to discuss which entity would maintain the database, and what costs would be borne from its maintenance and reporting service. Depending on what reporting is required, PacifiCorp maintains its position that state regulators need to be a part of these conversations to ensure the accounting outputs of the database conform with regulatory requirements, and that costs are captured appropriately. PacifiCorp believes the GHG working group could be an appropriate venue for refinement of this framework, though regulations would ultimately need to be adopted to direct LSE reporting. 

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

PacifiCorp is supportive of a reporting approach that represents an evolution to current accounting and reporting practices. It is possible that a market dispatch approach could affect price signals and potentially increase costs. PacifiCorp’s position is that markets will continue to reduce emissions through more efficient use of the transmission system and generating resources leading to increased renewable generation. 

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

No comment. 

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

PacifiCorp agrees to the proposed refinements to the metrics. 

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

PacifiCorp is supportive of reorganizing problem statements into three discrete work streams as discussed in the GHG working group. The document provided was helpful in contextualizing how stakeholders should approach the problem statements within each work stream. 

8. Additional comments:

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

The March 14 discussion of potential solutions to the challenges facing utilities in states with non-priced GHG policies was a helpful and productive advance in the working group.  We are discussing both presentations internally to have a better understanding of these approaches and bring constructive questions to the April working group meeting. We are interested in seeing examples of these approaches using actual data from a recent year where possible to help evaluate how these potential solutions would fit with PGE’s compliance needs.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

See question 1. 

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

See question 1 

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

The Table on slide 51 was a helpful and objective representation of both the market and the reporting approaches PGE suggests that CAISO continue to update the table as the workgroup's discussions evolve.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

PGE recently announced that it plans to join the EDAM. We are also working to reduce the emissions associated with serving retail customers by 80 percent from a 2010-2012 average baseline by 2030 and 100 percent by 2040. Based on the helpful presentations at the March working group meeting, we are internally evaluating how the WPTF and MOU group proposals would further PGE’s efforts to comply with Oregon’s clean electricity law.

We expect that both proposals may require changes to Oregon greenhouse reporting program regulations in order to accurately reflect the power allocated to or dispatched to PGE retail load.  We are beginning conversations with our state air quality regulator on this topic, as well as a short-term adjustment to allow reporting with the average emissions rate now published by CAISO.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

PGE supports the consolidation problem statements and supports moving forward with solution discussions, such as the presentations held in the March meeting. PGE believes this consolidation will help streamline the solution process and appreciates PGP and PSE's proposal to do so.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

PGE’s priority issues are reflected in Workstream 3, Problem Statements 6A and 7A. If this reorganization goes forward, CAISO should revise the titles and subtitles of Workstream 2 and Workstream 3 because they overlap (both refer to state policies and non-pricing states) don’t fully include the items below them. However, we do not suggest that the working group devote much more time to problem statement refinement.  

8. Additional comments:

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

PGP again appreciates the opportunity to submit comments on this greenhouse gas (GHG) working group discussion. The March 14, 2024, GHG Coordination Working Group meeting marked a pivotal turning point in the working group process from the problem statement development phase to the discussion of two concrete proposals for solving those problems: the first, presented by Doug Howe on behalf of the State Climate Action MOU Group, a proposal for two potential dispatch control mechanisms for addressing non-priced GHG programs in a day-ahead market; and the second, presented by Clare Breidenich for the Western Power Trading Forum (WPTF), a proposal for a comprehensive energy and GHG accounting and reporting system within an existing market design. PGP appreciates the robust dialogue on both proposals; however, PGP is concerned about the complexity of adopting dispatch solutions to address the unique needs of disparate state non-pricing GHG and clean energy policies at this time. For this reason, PGP reiterates our comments submitted March 7th on the February 22, 2024, GHG Coordination Working Group encouraging the group to first pursue an accounting framework for addressing non-pricing GHG reduction and clean energy programs as well as voluntary goals prior to pursuing a dispatch solution. To that end, we support continued consideration and discussion of the WPTF accounting and reporting proposal.

In addition to discussion of these two proposals, the March 14th working group session included consideration of a proposal by PGP and Puget Sound Energy to re-frame the existing problem statements into discrete categories or “work streams.” We understand that the ongoing assignment of sponsors and co-sponsors to these problem statements complicates our previous proposal to consolidate them at this time, and so support the working group moving forward with the adoption of a modified version of the work stream/problem statement crosswalk developed and published by the CAISO on March 19, 2024, for the sake of expediency. However, PGP continues to believe that the work of this group would be better served as we move toward discussing solutions and arriving at consensus if these problem statements—which now number 14, when counting all six sub-problems of Problem Statement 6 and all three sub-problems of Problem Statement 7 separately—were consolidated into more holistic, discrete themes.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

PGP appreciates the overview of the State Climate Action MOU Group’s proposal for non-priced GHG programs. In the case of Washington, we disagree with the proposal’s characterization of the requirements of the Clean Energy Transformation Act (CETA) and whether those requirements can simply be reframed as, “In year XXXX, GHG emissions to meet utility’s load must not exceed Y metric tons/MWh.” Between January 1, 2030, and December 31, 2044, electric utilities’ demonstration of compliance with the state’s GHG Neutral Standard is based on four-year compliance periods, rather than annually. This four-year compliance framework allows for inter-year variability within a compliance period that does not align with a static annual emissions threshold. By the end of each compliance period, the utility must demonstrate that it has “use[d] electricity from renewable resources and nonemitting electric generation in an amount equal to 100 percent of the utility’s electric loads” over the course of that multiyear period (RCW 19.405.040(1)(a)). Electricity from renewable resources used to meet this standard must be verified by the retirement of the associated renewable energy credits (RECs). However, up to 20 percent of a utility’s total multiyear compliance may be met through alternative compliance options, including but not limited to the use of unbundled RECS. This REC-based compliance accounting also does not translate easily to a static annual emissions threshold. PGP does not believe that either of the two control mechanisms currently proposed by the State Climate Action MOU Group—emission constrained dispatch or import constrained dispatch—would meet the 2030-2045 CETA compliance needs of Washington market participants.

As noted on slide 10 of the presentation, all the non-priced GHG and clean energy programs in the WECC, including Washington’s CETA, vary in policy design, timeframes, and phasing. As noted in Response (1) above, PGP is concerned about the complexity of adopting dispatch solutions to address the unique needs of different state non-pricing GHG and clean energy policies at this time. PGP recommends that the working group first pursue an accounting framework for addressing non-pricing GHG reduction and clean energy programs as well as voluntary goals prior to pursuing a dispatch solution for incorporating price signals into the market that reflect these policies.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

PGP appreciates the overview of WPTF’s proposal for a comprehensive energy and GHG accounting reporting system. At this time, PGP supports continued consideration and discussion of the WPTF proposal, which we believe can be designed to meet the attribution and information needs of both GHG-priced and non-priced GHG and clean energy policies in the West at a lower implementation cost and complexity than any dispatch solution.

One area PGP will be interested in specific to the accounting proposal will be treatment and overlay of REC accounting systems and specific Washington’s interpretation and prohibition of double-counting. Under WAC 194-40-420(2)(b), Washington’s regulations implementing CETA, if energy associated with a REC is delivered, reported, or claimed as a zero-emission specified source or assigned the emissions rate of the renewable’s generating facility under a GHG program, that REC may not be available for CETA compliance. PGP is concerned with any accounting system that may not reflect REC claims in alignment with this requirement. While PGP believes that there are ways to manage this issue, it is recommended that the group discuss this specific topic as the discussion evolves.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

No comment at this time.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

 Please see Responses (2) and (3) above.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

PGP reiterates our response to this question from our March 7th comments on the February 22, 2024, working group session. Problem Statements 6a – 6f incorporate many issues associated with the other problem statements including current WEIM GHG design, tracking and reporting, and state coordination. Rather than include a separate problem statement for metrics, PGP proposes that each issue category include a sub-category or sub-problem statement dealing with metrics and identifying the metrics specifically related to that issue category or problem statements.

Furthermore, the current problem statement 6a – 6f does not adequately address the issue of key metrics that stakeholder would like to see for transparency purposes but that are not necessarily otherwise tied to a particular issue category or problem statement. The availability of metrics should not be tied to a specific problem statement since data availability generally supports transparency and assists stakeholders in evaluating issues generally. PGP understands that every request for a specific metric may not be prioritized for a variety of reasons, including workload associated with producing requested data, but the availability of data and transparency is a general value and requests for metrics should be supported regardless of their relationship to a specific problem statement.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

PGP thanks CAISO staff for taking on the task of providing a crosswalk between PGP’s proposed issue categories/work streams and the existing problem statements. However, as noted in Response (1) above, PGP continues to believe that the work of this group would be better served as we move toward discussing solutions and arriving at consensus if these problem statements—which now number 14, when counting all six sub-problems of Problem Statement 6 and all three sub-problems of Problem Statement 7 separately—were consolidated into more holistic, discrete themes.

PGP offers the following comments on the work stream/problem statement crosswalk for consideration by other stakeholders and CAISO staff, grouped by applicable work stream:

Work Stream #1: ISO Market Operations & GHG Design – Current Approach to GHG Pricing Programs in WEIM

PGP believes that Problem Statements 1, 2, 3, and 6e are all communicating the same core problem in slightly different terminology, and should be consolidated into one problem statement focused on the issue of the current attribution framework and the potential for secondary dispatch.

Work Stream #2: Addressing Non-Pricing and Clean Energy Policies, and Voluntary Goals

Problem Statement 7 is no longer a standalone problem statement—it is now broken out into Problem Statements 7a-c, all of which are grouped into Work Stream #3—and so should be stricken from this work stream.

Problem Statement 5 is included in both this work stream and Work Stream #3. In order to minimize the potential for confusion or redundant work, PGP recommends that problem statements not be duplicated across work streams. To that end, our preference would be for Problem Statement 5 to remain in Work Stream #2, and be removed from Work Stream #3.

Work Stream #3: Exploring Mechanisms for Addressing Non-Pricing and Clean Energy Policies, and Voluntary Goals

As noted above, since Problem Statement 5 is already included in Work Stream #2, PGP recommends it be removed from this work stream.

We also think that Problem Statement 6a would be better situated in Work Stream #2, since annual reporting obligations that require data do not inherently necessitate a market mechanism.

With these suggestions, PGP also recognizes that there are likely diminishing returns associated with continued time and effort spent on refining the specific workstreams and associated problem statements. It is not PGP’s intent to propose modifying any of the substance of existing problem statements, but rather recognition that there is a need to organize them in a more coherent manner. PGP recommends that, following this round of comments, the working group not spend significant additional time discussing the problem statements but begin focusing on substantive issue discussions. PGP recommends that CAISO staff further refine its proposed workstreams based on comments received this round and from there publish final workstreams and problem statements.

8. Additional comments:

Thank you for considering these comments and thank you to CAISO staff and working group members who have been advancing the conversation on these complex issues to date.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

SMUD appreciates CAISO’s efforts to address GHG accounting and the development of this pre-initiative process.  SMUD supports further exploration of the WPTF proposal, and as part of this further development, encourages both accounting and reporting of emission data on at least an hourly basis to respective market participants.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

SMUD appreciates the presentation by the State Climate Action MOU Group regarding the emission and import constraint options.  While SMUD recognizes that one or both approaches may have merit and does not oppose either proposal, SMUD favors solutions that would not add market constraints impacting resource dispatch.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

SMUD supports further exploration of the WPTF GHG accounting and reporting proposal.  While SMUD recognizes the many considerations to work through, the benefits of this approach are compelling.  For example, the WPTF proposal appears to provide a comprehensive accounting framework that would allow entities to attribute their procured resources (both physical and contractual) more accurately to their emission portfolio.  This would support proper attribution of emissions from resources serving the market and prevent under- or over-counting of emissions.  The WPTF proposal is appealing in that it would not require additional market constraints and may be simpler and more efficient to implement.  Additionally, SMUD sees value for participants to be able to access hourly carbon intensity data from the CAISO’s markets and sees potential for determining and reporting this information as part of this effort.  This information will allow market participants to develop more accurate emission optimization strategies that could help manage individual GHG targets in resource portfolios.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

See responses to questions 2 and 3.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

California’s Cap-and-Trade program currently accounts for “leakage” or secondary dispatch by reducing allowances for electric distribution utilities. To the extent that the WPTF proposal could minimize or eliminate the risk of leakage, this greater accounting specificity could inform further development of the Cap-and-Trade program.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

No comment at this time.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

No comment at this time.

8. Additional comments:

While SMUD does not have an opinion on the structure of the workstreams or recategorization, SMUD does want to underscore two problem statements that are necessary to explore in this working group.  The first is Work Stream #1, Problem Statement 6d (in the document linked in Question 7, above), which addresses the lack of transparency into emissions intensity of the marginal resource.  The second is Work Stream #2, Problem Statement 7, which explains that the market lacks a mechanism that enables Load Serving Entities to accurately account for energy and associated emissions used to serve load under regulatory and voluntary emission reduction goals.  These are critically important issues to address in this working group, and as noted in response to Question 3, above, should be further explored alongside emission accounting solutions.  Evaluating these Problem Statements will facilitate the development of solutions during the policy phase of this process.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

The Salt River Project Agricultural Improvement and Power District (SRP) appreciates the opportunity to comment on the March 14 GHG Coordination Working Group (WG). SRP agrees with stakeholders’ and presenters’ objectives of establishing a robust tracking mechanism for carbon emissions and an accurate import emission rate to enhance management of voluntary or mandatory emissions targets. Additionally, SRP remains engaged in discussions regarding dispatch options that may give entities more control through a market mechanism. It is important that these mechanisms apply equally to entities with corporate goals as well as state mandated targets.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

SRP appreciates the detailed explanation of the State Climate Action MOU Group’s proposals for the non-priced GHG programs; however, SRP is interested in further clarification on how these proposals would interact with existing market structures and the potential need for new market designs to accommodate these mechanisms. SRP continues to evaluate whether a dispatch mechanism or an after-the-fact (ATF) accounting mechanism would better align with SRP’s efforts to manage carbon emissions that are tracked as part of our corporate goals. A dispatch option would allow participants to be confident in reaching their goals without a need to self-schedule green energy, possibly allowing more capacity to be optimized by the market clearing process. SRP agrees that resource designation is a key element of this proposal, as well as voluntary attribution in the event that Balancing Authorities (BAs) choose not to allow energy to be deemed to the priced or non-priced areas. 

A primary concern of SRP with this proposal is whether FERC would approve a maximum emission rate for entities without state mandates, the absence of which could adversely affect areas with corporate goals if low-emitting resources are deemed to other areas or prices increase. Additionally, SRP would like to understand the potential cost shifts in scenarios where carbon metrics vary between areas. SRP requests more information on how zones with no maximum emission rates or those with low maximum emission rates may be impacted and how these variations could affect the GHG marginal price or implicit energy costs differences.

Further, SRP requests more information and/or an example demonstrating the Must Offer Requirement.  Would a resource portfolio that is bid into the market need to meet both the capacity requirements and the emissions targets simultaneously, or is it acceptable that the internal generation meet one or the other independently with different optimization outcomes for that interval?

SRP has specific questions concerning the Import Constrained Dispatch option, SRP requests clarity about the formula provided for setting the emission target:

Internal Generation Emission + Imported Emissions-Exported Emissions ≤ Maximum Emission Target

In this context, SRP requests the CAISO clarify if the formula is referring to net imports and exports, or if it is possible that an entity is importing and exporting at the same time and would have non-zero values for both imports and exports.

SRP also requests detailed information on how the imported emission rate is re-calculated after the optimization process and the timeline for the information to be made available for participants to make necessary adjustments.

Overall, SRP is interested in further discussion and details on these proposals. However, if there is a significant risk of ineffectiveness for entities with corporate goals, SRP believes that this would not adequately address Problem Statement 7 and should not be implemented.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

SRP appreciates the detail provided in WPTF’s proposal for ATF accounting. SRP encourages further discussion on this topic and clarity if the ATF accounting method would be sufficient to manage carbon reduction goals or state mandates, as this is only done after the market clears. SRP believes this method may offer a viable solution for establishing a more accurate import emission rate, aiding all participants in better accounting for market transfers. 

Although, the main concern is that this approach could incentivize entities to self-schedule renewable resources, which might limit imports and result in a high residual emission rate. SRP is also concerned with the following bullet from slide 37:

If energy assigned to LSE > LSE load, excess energy assigned to residual market supply at   LSE’s system average emission rate (i.e. all energy assigned to that LSE)

This approach could inaccurately reflect the carbon emissions assigned to residual supply, especially if an entity’s exports are primarily sourced from emitting resources. Additionally, the LSE’s system emission rate may appear to be much higher than what is truly being used to serve retail load. SRP understands that this may be the optimal method for emission accounting but encourages further dialogue on these aspects.

Lastly, SRP requests clarity on whether an entity’s owned or contracted energy could be excluded from the average system emission rate under this proposal.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

SRP appreciates the comparative analysis that the CAISO compiled of the various approaches. SRP encourages the exploration of hybrid approaches that leverage the strengths of both market-based and reporting-based mechanisms. The primary concern for SRP is ensuring that the selected approach is considerate of all entities, including those with corporate or voluntary goals. SRP suggest the CAISO update the comparative analysis after reviewing stakeholder comments to include additional considerations.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

SRP’s publicly posted sustainability goals state:

Our goals are to reduce the amount of CO2 emitted by generation serving retail load (per MWh) by 82% from 2005 levels by 2035, with a 2050 goal of net zero carbon emissions.

While these goals are not mandated by the state of Arizona, SRP’s goals are approved by the elected SRP Board and are fundamental to SRP’s long-term strategy; therefore, clarity in regards to the flexibility and adaptability of the proposed mechanisms to accommodate such goals will be critical. SRP requests the CAISO assist in evaluating whether the dispatch options presented are feasible and offer better control over carbon metrics for entities with corporate goals. It is unclear how these dispatch options may impact pricing.

An improved ATF accounting mechanism will likely be needed, even if a dispatch mechanism is used. SRP believes that an emission rate that better characterizes import emission rates on a granular time interval (for example, hourly) is important for all entities that track carbon. SRP is interested in further discussion regarding the WTPF proposal.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

SRP appreciates the CAISO’s edits to include corporate goals in addition to state mandates in the metrics problem statements, which enhance emission tracking for all entities.

SRP is supportive of item 6(f), as it is intended to develop a metric for quantifying the financial and emissions impacts for the CAISO’s GHG design, it is a good addition to this problem statement. SRP looks forward to conversations on this topic.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

SRP requests more clarification on the difference between Work Stream #2 and Work Stream #3. There appears to be significant overlap between these two work streams, and a more detailed explanation on their distinct objectives and intended outcomes would be beneficial.

8. Additional comments:

 No additional comments at this time.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

The Six Cities have significant concerns regarding the feasibility of implementing the proposals for non-priced GHG programs summarized at slides 8-27 of the presentation for the March 14, 2024 working group meeting as well as concerns regarding the impacts of altering dispatch at the direction of one non-priced GHG area on all other areas in the market.  The Six Cities do not support further consideration at this time of the market constraint-based approaches for seeking to control emissions assignable to various market participants.

The Six Cities have not identified any preliminary concerns with the accounting and reporting approach for GHG emissions data proposed by WPTF and support further evaluation and consideration of that proposed framework.

The Six Cities provide a number of recommendations for eliminating duplication and adding clarity to various problem statements, including the sub-issues in Problem Statement 6 and problem statements included in the three proposed work streams.  With respect to Problem Statement 6b and all three of the sub-issues included in Problem Statement 7, the Six Cities raise the question of whether it is sound policy to expect markets to implement or ensure compliance with non-priced policies or goals.  Such an expectation is especially problematic when the market footprint encompasses multiple regulatory jurisdictions that have differing policies and goals.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

The Six Cities have significant concerns regarding the feasibility of implementing the proposals for non-priced GHG programs summarized at slides 8-27 of the presentation for the March 14, 2024 working group meeting as well as concerns regarding the impacts of altering dispatch at the direction of one non-priced GHG area on all other areas in the market. 

With respect to the proposal to allow a non-priced GHG area to impose an emission constraint on dispatch of resources to meet the needs of that area, there appear to be daunting complexities.  If there are multiple non-priced GHG areas, as would seem likely, how would it be possible to follow different emissions constraint directives?  It does not seem feasible to require the market operator to identify and implement multiple dispatch sequences based on differing emissions constraints while simultaneously minimizing overall costs and respecting transmission limits and resource operating capabilities.  Moreover, honoring the dispatch preferences of one non-priced GHG area necessarily would affect the resources available to meet the needs of other areas in the market, and the effects of such interactions could not necessarily be redressed through differences in prices among the affected areas. 

The concept of allowing a non-priced GHG area to establish an import constraint based on emissions targets would appear to be somewhat less complex.  But although the import constraint approach may have fewer potential impacts on other areas of the market, the addition of such constraints could undermine market efficiency.

With respect to both the emissions dispatch constraint and import constraint approaches, it appears that both proposals contemplate implementation at sub-BAA levels (i.e., at the utility or compliance entity level).  Adding multiple sub-areas to the markets also would increase complexity of market operations and the potential for inefficiencies or unintended reliability impacts.  It also would be necessary to consider the effects of either a dispatch constraint or import constraint on application of the Resource Sufficiency Evaluation tests to assure that RSE test outcomes accurately reflect resources available to meet needs within a designated area.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

Based on the descriptions in slides 30-48 and the discussion in the March 14^th working group meeting, the Six Cities have not identified any preliminary concerns with the accounting and reporting approach for GHG emissions data proposed by WPTF. 

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

For all of the reasons described in response to Item 2 above, the Six Cities do not support further consideration at this time of the market constraint-based approaches for seeking to control emissions assignable to various market participants.  As noted by several commenters during the March 14^th working group discussion, it is not clear that dispatch or transfer constraints are necessary to facilitate compliance with non-price GHG requirements or goals.  Conversely, it seems abundantly clear that dispatch or import constraints would dramatically increase the complexity of market operations and potentially undermine market efficiency or reliability or both.

Consistent with recommendations of several commenters during the March 14^th working group discussion, the Six Cities support further evaluation and consideration of the accounting and reporting framework proposed by WPTF. 

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

The Six Cities believe that the CAISO is familiar with the state regulatory requirements and emission reduction policies applicable to the Cities.  In addition to such state requirements and policies, the City Council of the City of Pasadena has adopted Resolution No. 9977 establishing a policy goal to source 100% of Pasadena's electricity from carbon free sources by the end of 2030.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

The Six Cities have the following comments with respect to the revised versions of the sub-issues for Problem Statement 6 shown on slides 56-59 of the March 14^th working group presentation:

The statements of sub-issues 6a and 6c appear to be substantially or entirely duplicative.  The Six Cities recommend combining the two sub-issues.  Of the two formulations, sub-issue 6c appears to describe the underlying issues more clearly.

Sub-issue 6b appears to be overly broad and to exceed the appropriate scope for a CAISO initiative.  It is the Six Cities’ understanding that the CAISO has no responsibility for nor authority over generation/tag data reported to WREGIS.  If that is the case, the CAISO cannot and should not unilaterally undertake an effort to identify and redress any inconsistencies between WREGIS reporting conventions and the CAISO’s GHG attribution methodology.  If WREGIS and the CAISO concur that differences between reports to WREGIS and CAISO’s GHG attribution methodology may give rise to double counting, a joint effort to evaluate issues and develop resolutions may be appropriate.

The statement of sub-issue 6f also is overly broad and vague.  CAISO reports currently include some metrics that quantify financial and emissions impacts of the CAISO’s GHG design.  Stakeholders who believe that additional metrics should be developed and reported should identify such additional metrics with specificity so that the costs versus benefits of assembling the additional data can be evaluated.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

With respect to Work Stream #1, the Six Cities agree with grouping the identified Problem Statements under the general topic of concerns with the current approach to GHG pricing programs in the WEIM.  Although it appears that there is significant overlap among the problem statements included within the group, it is difficult to be certain.  The Six Cities recommend further evaluation regarding whether some of the problem statements included in Work Stream #1 could be combined.

Work Stream #2 appears to focus on accounting limitations and needs for information to support demonstration of compliance with non-priced clean energy policies and voluntary goals.  In the Six Cities’ view, it is generally reasonable for the CAISO to provide informational support for efforts to implement and comply with clean energy policies and goals that are not reflected in market prices, provided that such supporting information can be assembled at reasonable cost. 

However, CAISO’s markets should not be expected to take on all responsibility for implementing non-priced clean energy policies and goals.  For example, as noted in response to Item 6 above, Problem Statement 6b appears to be overly broad and to exceed the appropriate scope for a CAISO initiative.  It is the Six Cities’ understanding that the CAISO has no responsibility for nor authority over generation/tag data reported to WREGIS.  If that is the case, the CAISO cannot and should not unilaterally undertake an effort to identify and redress any inconsistencies between WREGIS reporting conventions and the CAISO’s GHG attribution methodology.  If WREGIS and the CAISO concur that differences between reports to WREGIS and CAISO’s GHG attribution methodology may give rise to double counting, a joint effort to evaluate issues and develop resolutions may be appropriate.

With regard to Work Stream #3, there appears to be substantial overlap with Work Stream #2.  Problem Statement 5 and Problem Statement 6a appear to fit better in Work Stream #2.  Of the remaining problem statements in Work Stream #3, Problem Statements 7a and 7c are overlapping, and Problem Statement 7c can be subsumed within Problem Statement 7a.  All three of the Problem Statement 7 sub-issues (i.e., Problem Statements 7a, 7b, and 7c) also raise the question of whether it is sound policy to expect markets to implement or ensure compliance with non-priced policies or goals.  Such an expectation is especially problematic when the market footprint encompasses multiple regulatory jurisdictions that have differing policies and goals.

8. Additional comments:

The Six Cities have no additional comments at this time.

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

Continued discussion and evaluation of design and reporting approaches will be critical to support accurate emissions accounting and non-pricing state regulatory compliance.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

WRA appreciates the State Climate Action MOU Group proposal for non-priced GHG programs. These Emisison Constrained and Import Constrained approaches appear potentially well-suited to adapt EDAM GHG design and we look forward to further discussion and evaluation of these methods. We look forward to any future updated whitepaper from Mr. Howe on these methods. Finding a solution for non-priced GHG programs is essential to ensure entities in states with non-pricing emission reduction requirements can participate in the market and continue to comply with regulatory requirements.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

WRA appreciates WPTF's proposal to account for energy and associated emissions and will provide additional thoughts upon further evaluation. 

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

This comparison is helpful and WRA will continue to evaluate these approaches.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

Colorado (compared to 2005 levels): 50% emission reduction by 2030, 75% emission reduction by 2040, and net-zero emissions by 2050. 

New Mexico Energy Transition Act: 40% renewables by 2025, 50% renewables by 2030, 80% renewables by 2040,100% carbon-free by 2045.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

WRA supports these refinements.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

Overall, WRA appreciates the identification of discrete work streams, though the titles of Work Streams 2 and 3 could potentially use further refinement to emphasize the distinction between the two. The continued prioritization of GHG and clean energy state policies and voluntary utility and customer GHG or clean energy goals will be essential to a well-operating EDAM.

8. Additional comments:

N/A

1. Provide a summary of your organization’s comments on the March 14, 2024 GHG Coordination Working Group:

WPTF appreciates the opportunity to provide these comments on the CAISO's latest Greenhouse Gas Coordination working group meeting.

2. Provide your organization’s comments and any additional questions you have on the State Climate Action MOU Group’s proposal for non-priced GHG programs (slides 8-27):

WPTF does not support the MOU group’s proposal for several reasons as discussed below.

First, both approaches proposed by the MOU group create dispatch inefficiencies in the market and result in price signals that, while mathematically correct (e.g., shadow price of the constraint), do not represent a true marginal cost from a market economics perspective. Introducing the emissions and import constraints into the market results in a suboptimal solution that moves away from what should be the overall least cost dispatch that results in the optimal use of resources to meet load. Furthermore, these constraints now generate a price signal in the market that is not associated with any actual marginal cost. Unlike the cap-and-trade programs that have a compliance cost in terms of $/MWh of generation, the clean energy programs do not have a similar cost imposed thus should not be creating a price signal through the market. It’s imperative that any price signal generated by the market provides clear and transparent cost signals such that entities can be confident is using that information when making business and investment decisions that aid in long-term efficient markets.

For example, in the emissions constraint approach the proposal creates a new marginal GHG cost. It is unclear to WPTF what that marginal GHG cost represents other than the shadow price of the constraint. Based on the stakeholder discussion that shadow price of  the constraint is based on the change in energy cost associated with having to redispatch resources to comply with the emissions constraint; this is not a representation of marginal costs associated with emissions but rather just a difference in energy cost between resources. Additionally, it is unclear to WPTF how this new marginal GHG cost (and the one under the import constraint approach) would interact with not only the existing marginal GHG cost but also the overall GHG market design. Will there now be two different marginal GHG costs generated by the market?

Regarding the second proposed approach (import constraint); this too generates a price signal that does not seem to provide a meaningful signal from a market economics perspective. In this case the design creates two different system marginal energy costs (SMECs) which deviates from the purpose of a uniform SMEC across the system. While we understand that under EDAM, the CAISO has proposed that each BAA will have a different SMEC, that is because the proposal is adding to the uniform SMEC the shadow price of transfer constraints between BAAs to create different SMECs. To be clear, WPTF voiced concern with that approach in the EDAM policy efforts and continues to believe that the shadow prices of the transfer constraints should be a separate component of the overall LMPs for transparency purposes rather than being added to the “true” SMEC. This proposal is taking a similar approach and for the same reasons, WPTF does not support adding shadow prices of constraints to the “true” SMEC. Under this approach we could end up in a situation where the SMECs are made up of an unknown portion of the “true” SMEC, an unknown portion of transfer constraints, and an unknown portion of a proxy cost for complying with clean energy programs. Lastly, and similar to the first approach, it is unclear to WPTF what the difference in the SMECs due to the import constraint actually represents other than the difference in energy costs of resources being redispatched to meet the constraint; this does not provide any meaningful marginal price signal as it relates to emissions because there is no explicit marginal cost associated with complying with clean energy programs.

Second, it is not clear to us that any of the utilities or other load-serving entities subject to the GHG reduction programs in Oregon or Colorado actually need the ability to apply an emission constraint within the dispatch engine to comply with these state programs. Rather, accurate accounting to LSEs of the energy and associated emissions provided from contracted clean resources dispatched by the market, as proposed by WPTF, would facilitate compliance with these procurement based programs without the need of a market emission constraint.

Additionally, the MOU group proposal would not in any way facilitate utility compliance with state programs that establish clean energy targets as a percentage of load.

3. Provide your organization’s comments and any additional questions you have on WPTF’s proposal for a comprehensive energy and GHG accounting and reporting system (slides 30-48):

WPTF has proposed that resources be assigned to utilities on a portfolio basis because several existing regulatory programs, such as the Oregon and Colorado GHG reduction programs, and the Washington Clean Energy Transformation Act, assign energy and or emissions to load-serving entities on a portfolio basis.  The approach we have proposed would align with those state programs. Additionally, the accounting framework needs a rule for how to treat generation owned by entities that are not subject to state GHG or clean energy programs, or without voluntary goals.  Assigning utility-owned resources to the relevant utilities is a reasonable approach that is consistent with utility IRPs, can be easily implemented by the CAISO, and does not impose any administrative burden on those utilities.

However, we believe that our proposed framework is flexible enough to accommodate different state rules for assigning energy and associated emissions to regulated load-serving entities. For instance, the California CPUC excludes dispatchable gas generation from regulated entities’ portfolios in estimating GHG emissions for SB350 GHG Planning targets, and instead considers these resources to be CAISO ‘system power’.  The CPUC rules could be accommodated by simply assigning California LSE-owned gas generation to the residual market supply. The GHG Accounting Framework should defer to state rules for assigning resources and energy to regulated LSE portfolios where such rules exist.

Additionally, WPTF suggests that the GHG Working group consider the time-frame for entity registration of contracted energy. For example, WPTF believes that it would be beneficial for entities to be able to register contracted clean resources at any time prior to the day-ahead market run, and that entities be allowed to register resources under short-term contracts. This would improve the ability of entities to control the energy designated to them relative to approach that limited registration to longer term contracts.

4. Provide your organization’s comments on the comparison of the market vs. reporting approaches:

WPTF would characterize our approach as an accounting approach, rather than simply a reporting approach. Regarding the mechanics, we would also note that our approach allows for accounting of purchases in line with state policies and/or voluntary goals.

On policy considerations, the issues that are listed under the WPTF approach (Competing claims/attribution/RECs, MJR Issues, Metrics and EFs) are also relevant for both the MOU market approaches.  An additional policy consideration for the MOU approach is how it would apply for energy service suppliers.

5. Please provide applicable regulatory requirements and timelines for emission reduction policies that the ISO should be aware of. Please also indicate to the extent you are able to, the extent that your organization views the State Climate Action MOU Group and/or the WPTF proposals could potentially address compliance requirements.

No comment.

6. Provide your organization’s comments on the proposed refinements to the metrics problem statements (slides 56-59):

WPTF continues to believe that there is substantial overlap and redundancy in the problem statements. However, we do not support additional work to refine the problem statements. Rather, we should simply begin substantive discussion of the issues and groupings under the new workstream structure. This will reduce duplication of effort in our ongoing work.

7. In response to Public Generating Pool and Puget Sound Energy’s written comments submitted on March 7 and feedback received during the March 14 working group discussion, the ISO has posted a document reorganizing the current problem statements identified by the working group into 3 discrete work streams. Please provide your organization’s comments on the creation of these work streams, and the reorganization of the current problem statements under this framework:

The work stream document is available on the GHG Coordination webpage here: https://www.caiso.com/InitiativeDocuments/WorkStreams-GreenhouseGasCoordination.pdf

WPTF supports the proposal to group problem statements into workstreams, but does not support the groupings proposed by CAISO.  Instead, we propose 3 separate workstreams: one on the current design for GHG pricing, a second to address non-pricing and clean energy programs and voluntary goals, and a third on GHG metrics and reporting, as described below. We recommend that the CAISO simply adopt a title for each workstream and identify which problem statements will be addressed under each workstream. We strongly recommend that CAISO not include a high-level description/unifying problem statement for each workstream, because the workgroup would inevitably waste more time discussing and negotiating the description.

• Workstream 1: ISO Market Operations & GHG Design – Current Approach to GHG Pricing Programs in WEIM
  Market participants and stakeholders do not have enough information to evaluate whether the WEIM design works as intended
  
  While WPTF agrees that additional data is needed to assess the extent to which the current GHG design works as intended, this is only one aspect of the problem statements compiled here. An equally import objective of this workstream is the assessment of the current GHG design in achieving the intended outcomes.  We support inclusion of problem statements 1-4, and 6(e) under this Workstream. Problem statements 6(d) and 6(f) should be moved to Workstream 3. 

• Work Stream #2: Addressing Non-Pricing and Clean Energy Policies, and Voluntary Goals
  The current WEIM and proposed EDAM GHG designs only address GHG pricing programs and do not facilitate the needs of other types of GHG or clean energy state policies or voluntary utility or customer GHG or clean energy goals.
  
  This Workstream should first consider an accounting approach to addressing non-pricing and clean energy programs and voluntary goals, as proposed by WPTF. Only after gaining experience under an accounting approach, and in the event market participants believe a market solution is needed, should a market based design be considered under a future working group structure. Problem statements 6(c) and 7(a)(b) and (c) should be addressed under this Workstream. Problem statements 5 and 6(b) should be moved to Workstream 3.
  
   
• Work Stream #3: GHG & Related Metrics Exploring Mechanisms for Addressing Non-Pricing and Clean Energy Policies, and Voluntary Goals
  No market mechanism currently exists to reflect policies that require emissions reductions but do not establish a GHG price.

As proposed by CAISO, this Workstream is redundant of Workstream 2. WPTF recommends instead that Workstream 3 address the publication and reporting of GHG metrics and related data that result from the market dispatch, recognizing that eventual decisions regarding these metrics will be dependent on the outcome of discussions under Workstreams 2 and 3.

Workstream 3 should cover problem statements 5 and 6(a), (b),(d) and (f).

8. Additional comments: