Roseville enters statewide cap-and-trade program
Roseville Electric is figuring out how exactly to comply with a new statewide cap-and-trade program.
Director Michelle Bertolino calls the program's rules and details "a moving target," as regulations are being written in real-time and a lot of questions remain unanswered. One question involves how much the program will cost the local utility provider.
"At this time, we're still looking at the nuances of the law to figure out what will comply with their requirements and that's a very challenging thing to do," Bertolino said during the Aug. 15 Roseville City Council meeting.
The council voted unanimously, with Councilwoman Carol Garcia absent, to approve implementing the cap-and-trade program, which was established by A.B. 32, also known as the Global Warming Solutions Act of 2006 that aims to reduce greenhouse-gas emissions to 1990 levels by 2020.
The state will implement a declining cap for emissions through 2020, which requires any entity that emits emissions to secure a "permit to pollute." These permits are "allowances." Regulations specify how many allowances are created each year, representing the "cap."
Entities considered "heavy" emitters, such as electric utilities, are required to be the first to comply. Utilities will receive a large number of "freely allocated allowances" at no cost on behalf of their ratepayers to provide protection against the fiscal impact of this program.
Roseville will receive 468,000 of these allowances in September and use 300,000 next year to offest emissions, and sell the rest for proceeds. The amount of proceeds will be determined by market prices. The financial impact is unknown but about $1 million is included in the fiscal year 2012-13 Electric Department budget.
Proceeds have to be used to directly benefit ratepayers and these funds must be kept in a separate account and only spent with the city council's approval.
The first allowance auction takes place in November. Estimates suggest California's cap-and-trade market will reach $15 billion, Berolinto said.
Vice Mayor Susan Rohan and Councilman John Allard both expressed opposition to the cap-and-trade, but voted in favor of the item because the program is required under the law.
"You may like these policies and it's great having clean air and all that, but you got to pay for it," Allard said.
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