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PUBLIC UTILITY COMMISSION

 

DIVISION 85

GREENHOUSE GAS EMISSIONS

860-085-0005

Scope and Applicability of Greenhouse Gas Emissions Requirements

(1) OAR 860-085-0005 through 860-085-0050 (the “Greenhouse Gas Emissions Requirements”) govern implementation of the greenhouse gas emissions standard for electric companies and electricity service suppliers, under ORS 757.522 through 757.538, and natural gas companies.

(2) Upon request or its own motion, the Commission may waive any of the Greenhouse Gas Emissions Requirements if good cause is shown.

Stat. Auth.: ORS 756.040 & 757.538
Stats. Implemented: 757.538
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0010

Definitions

(1) As used in OAR 860-085-0010 through 860-085-0050:

(a) “Baseload electricity” has the meaning given that term in ORS 757.522.

(b) “Carbon dioxide equivalent” means a unit of measurement that allows the effect of different greenhouse gases and other factors to be compared using carbon dioxide as a standard unit for reference.

(c) “Cogeneration facility” means a facility that produces electric energy and steam or other forms of useful thermal energy (such as heat) by cogeneration that is used for industrial, commercial, heating, or cooling purposes.

(d) “Commission” has the meaning given that term in ORS 756.010.

(e) “Electric company” has the meaning given that term in ORS 757.600.

(f) “Electricity service supplier” has the meaning given that term in ORS 757.600.

(g) “Generating facility” has the meaning given that term in ORS 757.522.

(h) “Greenhouse gas” has the meaning given that term in ORS 468A.210.

(i) “Greenhouse gas emissions” means gaseous emissions expressed as a carbon dioxide equivalent.

(j) “Greenhouse gas emission factors” means the factors, and procedure for use of these factors, as published in United States Environmental Protection Agency publication AP-42 Compilation of Air Pollutant Emission Factors, 2009 Update.

(k) “Long-term financial commitment” has the meaning given that term in ORS 757.522.

(l) “Low-carbon emissions resource” means a generating facility with a greenhouse gas emission rate that is no more than the greenhouse gas emissions standard.

(m) “Natural gas company” has the meaning given that term in ORS 772.610.

(n) Useful thermal energy” means kilowatt hours (kWh) of energy actually sent to be used in a process (whether it be in the form of steam, water, air, products of combustion, or product) net of the kWh of energy discharged from the process as waste (whether it be in the form of steam, water, air, or products of combustion).

(2) As used in ORS 757.522 through 757.536:

(a) “Combined-cycle natural gas generating facility” means a generating facility that employs one or more combustion turbine generators (gas turbine) fueled by natural gas to generate electricity, and one or more gas turbine exhaust heat recovery steam generators producing steam for generation of additional electricity using one or more steam turbine generators (steam turbine).

(b) “Commercially available” means available for purchase and in operation in the United States at no less than 80 percent of rated output (adjusted for the elevation and ambient temperature at the installed location) for no less than 7000 hours during the preceding year.

[Publication: Publications referenced are available from the agency.]

Stat. Auth.: ORS 756.040 & 757.538
Stats. Implemented: 757.538
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0020

Greenhouse Gas Emissions Standard Applicable to Electric Companies and Electricity Service Suppliers

Electric companies and electricity service suppliers will be given an opportunity to comment regarding a proposed modification of the greenhouse gas emissions standard. Electric companies and electricity service suppliers must consider in their comments the effects of modifying the greenhouse gas emissions standard on their system reliability and overall costs to their electricity consumers in this state.

Stat. Auth.: ORS 756.040 & 757.538
Stats. Implemented: 757.538
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0030

Emissions Standard-Based Restrictions on Long-Term Financial Commitments by Electric Companies or Electricity Service Suppliers

(1) Unless the Commission has already made a determination under ORS 757.536(b)(3), an electric company or electricity service supplier must demonstrate to the Commission that the baseload electricity acquired under a long-term financial commitment is produced by a generating facility that complies with the greenhouse gas emissions standard:

(a) For electric companies, the demonstration required in this section must be made when the electric company first seeks recovery of costs of a long-term financial commitment.

(b) For electricity service suppliers, the demonstration required in this section must be made when the electricity service supplier first seeks certification renewal after making a long-term financial commitment.

(2) For electricity supplied from long-term financial commitments for which emissions can readily be determined with specificity, the demonstration required in section (1) of this rule for those sources must use the emissions calculation procedures provided in OAR 340-215-0010 through 340-215-0060, or greenhouse gas emission factors.

(3) For the demonstration required in section (1) of this rule, electric companies and electricity service suppliers must identify long-term financial commitments for which emissions cannot readily be determined with any specificity. The electric companies and electricity service suppliers must propose for approval by the Commission the greenhouse gas emissions rate to be applied to these sources.

(4) Electric companies and electricity service suppliers may submit to the Commission for determination under ORS 757.531(2)(c) a plan for a generating facility to be a low-carbon emissions resource.

Stat. Auth.: ORS 756.040 & 757.538
Stats. Implemented: 757.538
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0040

Commission Review of Plans and Rates to Ensure Compliance with Greenhouse Gas Emissions Standard Rules

ORS 757.536(1) does not apply to a facility that meets one or more of the requirements for exemption set forth by ORS 757.531(2).

Stat. Auth.: ORS 756.040 & 757.538
Stats. Implemented: 757.538
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0050

Rate Impact Estimating and Reports

(1) Electric companies and natural gas companies must submit a report to the Commission by July 1 of even numbered years, beginning in 2012, presenting estimates of, and analysis methods used and assumptions made in estimating the impacts to customer rates for meeting the following Oregon energy consumption based greenhouse gas emission reduction goals by January 1, 2020:

(a) Ten percent below 1990 levels, under ORS 468A.205; and

(b) Fifteen percent below 2005 levels. The rate impacts must be presented as the percent of change compared to a base case with no greenhouse gas emission reduction goals.

(2) Electric companies and natural gas companies must use analysis methods and assumptions that are technically and economically feasible, and that contain all life-cycle costs.

(3) Electric companies and natural gas companies must include a calculation of their Oregon energy consumption based greenhouse gas emissions for 1990 (estimated actual), 2005 (estimated actual) and 2020 (projected) in the report required in section (1) of this rule.

(4) For electric companies the calculation required in section (3) of this rule must:

(a) Utilize greenhouse gas emission factors for the specific generating technology used at each electric company’s own generating facilities. An electric company's own generating facilities include company-owned resources and wholesale purchases from specific generating units, less wholesale sales from those specific generating units.

(b) Utilize the greenhouse gas emission rate proposed by the electric company and approved by the Commission for net market purchases, standard offer sales, and electricity service suppliers where generating technology cannot readily be determined with specificity.

(5) For natural gas companies the calculation required in section (3) of this rule must reflect greenhouse gas emissions due to all natural gas company operations, activities and facilities.

(6) The Commission will develop estimates of the rate impacts for electric companies and natural gas companies to meet the following alternative greenhouse gas emission reduction goals for 2020:

(a) Ten percent below 1990 levels, as specified in ORS 468A.205; and

(b) Fifteen percent below 2005 levels.

(7) The Commission will submit a report presenting the estimates and explaining the analysis used to develop the estimates to the appropriate interim committee of the Legislative Assembly prior to November 1 of each even-numbered year.

(8) Sections (1) through (7) of this rule are repealed on January 2, 2020.

Stat. Auth.: ORS 756.040 & 2009 OL Ch. 751 § 9
Stats. Implemented: 757.538 & 2009 OL Ch. 751 § 9
Hist.: PUC 11-2011, f. & cert. ef. 11-15-11

860-085-0500

Voluntary Emission Reduction Projects

OAR 860-085-0500 through 860-085-0750 are established under ORS 757.539 and are to be read in conjunction with that statute. For purposes of these rules, “Emission Reduction Project” or “Project” means a single or set of voluntary measures, including all labor, equipment, materials, items, or actions, designed to reduce anthropogenic greenhouse gas emissions within a defined boundary that would not otherwise occur.

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

860-085-0550

Project Eligibility Criteria

To be eligible for Commission approval, the Project must satisfy the minimum criteria set forth in ORS 757.539(3).

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

860-085-0600

Project Application Requirements

In addition to the information required by ORS 757.539(4)(a)–(k), a Project application must include:

(1) General information:

(a) A description of how the Project satisfies the minimum eligibility criteria described in ORS 757.539(3)(a)–(f);

(b) A discussion of all Project measures being employed to reduce emissions;

(c) The estimated Project measure life;

(d) A description of the Project boundary and scope;

(e) A discussion of the emission reduction strategy used, and why the approach is appropriate, timely, and merits approval; and

(f) Whether the Project is able to generate environmental credits or certificates and any potential revenues associated with their sale or use. The utility must explain the rationale for the proposed treatment of any credits and refer to any appropriate protocols, certification systems, regulatory regimes, or other rules for generating, trading, and retirement of such credits or certificates;

(2) Cost recovery information:

(a) A requested method for cost recovery as described in ORS 757.539(8);

(b) A showing of the Project benefits received and the allocation of benefits for each type of ratepayer. “Project benefits” means those benefits that accrue to ratepayers of the utility when such benefits can reasonably be attributed to the Project;

(c) A description of any requested incentive payments, and requested recovery that complies with OAR 860-085-0750. A utility may propose an incentive structure with its initial Project proposal that can then be applied to subsequently approved Projects; and

(d) Any required tariffs; and

(3) An Emissions Reduction Verification Plan that includes;

(a) The methodology used to calculate the projected emission reductions. The methodology must identify:

(A) A Project baseline; that is, an estimate of the emissions that would occur under the ordinary course of business or set of conditions reasonably expected to occur within the defined boundary and scope of an Emission Reduction Project in the absence of the Emission Reduction Project, taking into account all current laws and regulations, as well as current economic and technological trends;

(B) Emission leakage and Project emissions, which must be deducted from the emission reductions generated by the Project activity. “Emission leakage” means a reduction in greenhouse gas emissions within the Project that is offset by an increase in greenhouse gas emissions outside the Project. “Project emissions” means any emissions attributable to the implementation of an Emission Reduction Project; and

(C) How the emission reduction verification methodology was developed; and

(b) A plan for monitoring emission reductions, including the ongoing collection and retention of data for determining the Project baseline, Project emissions, and emissions reductions that are attributable to the Project. With the plan, the utility must describe the methods and equipment used, and identify the anticipated costs of monitoring and verifying emission reductions.

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

860-085-0650

Project Threshold

For the purpose of determining whether an application will be subjected to the procedural process described in either ORS 757.539(6) or (7), Tier-1 and Tier-2 Projects are defined as follows:

(1) A Tier-1 Project is one that has projected costs that would be borne by the ratepayers of the utility proposing the Project that are equal to or less than $1 million and has an overall project cost of less than $85 per metric ton of reduced emissions.

(2) A Tier-2 Project is one that has projected costs that would be borne by the ratepayers of the utility proposing the Project that are greater than $1 million or has an overall project cost of equal to or greater than $85 per metric ton of reduced emissions.

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

860-085-0700

Project Cap

Projected costs to ratepayers of all Emission Reduction Projects must not exceed 4 percent of the utility's last approved retail revenue requirement, inclusive of all revenue collected under adjustment schedules. The costs of incentives the utility proposes to recover under this rule will be included in the determination of the costs to ratepayers under this cap.

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

860-085-0750

Utility Incentives for Applicable Projects

(1) The Commission may grant incentive payments for an Emission Reduction Project.

(2) The total costs to ratepayers of all incentives received by the utility may not exceed 25 percent of the project cap specified in 860-085-0700;

(3) The Commission may structure incentives such that the amounts allowed:

(a) Are linked to the amount of emissions reduced; or

(b) Vary depending on whether a Project is recovered as an expense or an investment placed in rate base.

(4) The Commission may discontinue or reduce the incentives to be paid to the utility if a Project is out of compliance with any requirements of the Commission’s approval order.

Stat. Auth.: ORS Ch. 183, 756 & 757
Stats. Implemented: ORS 757.539
Hist.: PUC 8-2014, f. & cert. ef. 12-3-14

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