HomeMy WebLinkAboutReso 2013-070 - REU Policy
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RESOLUTION NO. 2013-070
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
TO ADOPT THE REDDING ELECTRIC UTILITY ALLOCATED
ALLOWANCE USE AND PROCEEDS POLICY
WHEREAS, Assembly Bill 32 (AB 32) requires California to reduce its greenhouse gas
(GHG) emissions to 1990 levels by 2020; and
WHEREAS, the California Cap-and- Trade Program is a key tool designed by the California
Air Resources Board to achieve the state's GHG reduction goal; and
WHEREAS, Redding Electric Utility (REU) is required to participate in the California Cap-
and- Trade Program; and
WHEREAS, RED has been allocated emission allowances for free for the benefit of REU' s
ratepayers; and
WHEREAS, the California Cap-and- Trade regulation requires that any proceeds REU
generates from selling free allowances in the Cap-and- Trade auctions must be used exclusively for
the benefit ofREU's retail electric ratepayers, consistent with the goals of AB 32.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL THAT:
1. The Redding Electric Utility Allocated Allowance Use and Proceeds Policy provides REU
with appropriate guidelines for the designation of allocated allowances into REU's Cap-and-
Trade compliance account or the sale of allocated allowances into the Cap-and- Trade
auction;
2. The Redding Electric Utility Allocated Allowance Use and Proceeds Policy outlines the
parameters for use of proceeds from the sale of allocated allowances in accordance with the
requirements of the Cap-and- Trade regulation;
3. That the attached Redding Electric Utility Allocated Allowance Use and Proceeds Policy is
hereby adopted.
4. REU will report to the City Council annually on the use of these auction proceeds and
allowance value; and
5. The City Council grants the Electric Utility Director (or his designee) the authority to
implement the Redding Electric Utility Allocated Allowance Use and Proceeds Policy as
defined herein.
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I HEREBY CERTIFY the foregoing resolution was adopted at a regular meeting of the
City Council of the City of Redding on this 6th day of Augu~t, 2013, by the following vote:
AYES:
,NOES:
ABSENT:
ABST AIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Cadd, Jones, Sullivan, & Bosetti
None
McArthur
None
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RICKBOSETTI, Mayor
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APPROVED AS TO FORM:
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RICHARD A. DUVERNAY, Ity Attorney
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Redding Electric Utility Allocated Allow~nce Use and Proceeds Policy
1. On an annual basis, Redding Electric Utility (REU) will designate to the California Air Resources
Board (CARB) the forecasted quantity of allowances needed for REU load for the subject year to be
directly placed into REU's compliance account. Such quantity may be adjusted to true-up the
previous year's forecasted allowances needed for REU load.
2.' REU will consign for sale all remaining allowances evenly within the four quarterly auctions of the
subject year.
3. REU will place all proceeds from the allowance auctio'l sales in a restricted reserve account to be
used as set forth in this policy.
4. REU will need to procure additional allowances for wholesale sales or compliance obligations to
counterparties. Such allowances (or other compliance instruments) may be purchased in
quarterly auctions, the bilateral market, or other trading platforms. . REU shall not use funds from
the restricted reserve account to procure these additional allowances.
5. REU may require counterparties to transfer allowances directly to REU for REU's compliance
obligation on the counterparty's behalf. Conversely, REU may be required to transfer allowances
directly to the counterparty for the counterparty'scompliance obligation on REU's behalf.
6. Proceeds from allowance auction sales shall be used exclusively for the benefit of REU ratepayers,
consistent with the goals of AB 32, and may not be used for the benefit of entities or persons
other than such ratepayers. Eligible expenditures may incluqe, but are not limited to:
6.1. Investments in renewable resources such as generation projects or the purchase of renewable
electricity.
6.2. Investments in energy efficiency programs.
6.3. Investments or expenditures associated with carbon reducing measures at retail electric
customer facilities.
6.4. Investments in electric vehicle charging infrastructure.
6.5. Minor projects or programs that address the indirect costs from implementation of the Cap-
and-Trade Regulation on REU's electric retail ratepayers.
6.6. Purchases of allowances needed for REU load.
6.7. Installation of Advanced Metering Infrastructure and related technology and equipment for
the purpose of grid efficiencies and customer focused energy efficiency.
7. Use of the value of any allowance allocated to REU, other than for the benefit of REV ratepayers
consistent with the goals of AB 32, is prohibited, including the use of such allowances to meet
compliance obligations for electricity sold into the California Independent System Operator
markets.
8. As specified in the Cap-and-Trade Regulation, REU will submit an annual report to CARB on the.use
of auction proceeds and allowance value describing the disposition of any auction proceeds and
allowance value, as well as how REU has complied with the requirements of AB 32.
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Emission Allowance Process Map
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Needed for
REU Load
Reqding ~tectri(dJtai~y
Consignment
To Auctions
$
Needed for Wholesale
Sales, True Ups, etc.
Needed for Imports
on REU's Behalf