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Developing a Western Regional Green-Tag Market

Developing a Western Regional Green-Tag Market. Mike Winslow Managing Director - Air Quality. Objectives. Separate “Green” attribute from Power Develop Western standards for green certification, product design, and trading & tracking protocols

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Developing a Western Regional Green-Tag Market

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  1. Developing a Western Regional Green-Tag Market Mike Winslow Managing Director - Air Quality

  2. Objectives • Separate “Green” attribute from Power • Develop Western standards for green certification, product design, and trading & tracking protocols • Maximize public participation in developing mechanisms in the Green-Tag market; e.g., an electronic clearinghouse -1-

  3. The Time is Right for a Western Regional Green-Tag Market • WRAP Renewables Objectives • WGA Renewables Reports • NARUC White Paper on Renewable Portfolio Standards (RPS) -2-

  4. Market Drivers • Renewable Portfolio Standards • Federal purchasing requirements • Clean Air Act • Local government green power purchase policies • Energy Policy considerations (Fuel Diversity, Climate Change, etc.) • Increased public awareness of and demand for green power • Brokers -3-

  5. Objective: Separate “Green” attribute from Power Green-Tag Transaction -4-

  6. Benefits of Green-Tags • Benefits to Purchaser • Meet Renewable Portfolio Standards • Meet end-use purchasing requirements • Practical method to support green power development • No physical delivery required (load balancing and price spikes) • Can be acquired from multiple sources • Not constrained by geography or service territory • Benefits to Supplier • Contract for supply not required • Increased siting flexibility • Increased demand for green power products • Not constrained by geography or service territory -5-

  7. Existing Green-Tag Programs Bilateral Contract (wholesale) • Large Utilities • Environmental NGOs • Government Agencies • Aggregators “Retail” Participation • Los Angeles Dept. of Water & Power • PacifiCorp “Blue Sky” Program Traded via Broker/Electronic Exchange • Texas: ERCOT and the Texas PUC--Wholesale; Texas only • California Automated Power Exchange (APX) “Green Ticket” Trading Program--Power and Green attribute linked European Markets • Renewable Energy Certificates System (RECS) -6-

  8. Western Regional TradingProgram Need for Standardization • Certification • Participation • Product Design • Bankability • Tracking and Verification • Administration Develop Western Regional Standards for “Green-Tags” Market -7-

  9. Western Regional Trading Program Key Issue: Certification Renewable Resources: • Wind • Solar • Geothermal • Biomass • Low impact Hydro • New vs. Existing Certification Body: • Green-E • Renew 2000 • American Rivers’ Low Impact Hydro -8-

  10. Western Regional Trading Program Key Issue: Administration Role of Administrator: • Facilitate trades between generators and purchasers (and subsequent purchasers) • Retire Green Tags as they expire or are used for compliance • Tracking and Audit • Monitor market activity Potential Administrators: • Western Governors Association • RTO • Private Clearinghouse • Environmental NGO’s -9-

  11. Objective The “People’s” Green-Tag Develop a Transparent, Electronic Green-Tag Market that would Maximize Public Participation in Green-Tag Market -10-

  12. The “People’s” Green-Tag--Constraints • Potential regulation by SEC and CFTC • State PUC and Consumer Regulation • Credit considerations • Administratively burdensome -11-

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