Renewable Energy Certificates Associated with
Energy Imported into California via the Energy
Imbalance Market
Mary Wiencke & Pooja Kishore, PacifiCorp
Oregon Department of Energy Stakeholder Meeting
June 15, 2017
Energy Imbalance Market—Simplified
2
Participating resources bid energy and
optional GHG adder into the EIM for the
real-time operating hour
California Independent System Operator
(CAISO) dispatches the entire EIM footprint
on a simultaneous basis every five minutes
Dispatches result in transfers within each
balancing authority area and between
balancing authority areas
Renewable Energy Certificates (RECs) are
not incorporated into EIM energy bids
California Cap-and-Trade Program Obligation in the EIM
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Under California Mandatory Reporting Program, all energy imported into California,
including zero-emitting energy, must be reported to the California Air Resources Board
(ARB)
Reporting null power is not allowed
Under the Cap-and-Trade Program, emissions associated with imported energy are subject
to a compliance obligation (compliance obligation is assigned to importer referred to as
“first jurisdictional deliverer”)
Outside of the EIM, first jurisdictional deliverers are identified as the purchase-selling
entity, identified on the e-Tag, on transmission paths crossing into the CAISO balancing
authority area
This approach does not work for EIM since there is one e-Tag for total EIM transfer
into California
CAISO developed methodology to identify specific resources deemed imported into the
CAISO balancing authority area via the EIM
ARB modified regulations to assign reporting and compliance obligations based on
CAISO’s methodology
CAISO EIM Import Methodology & RECs
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The CAISO methodology for determining resources that are imported to California
solves for least-cost based on GHG bid adders
Lower cost (zero-emitting) resources are selected first
CAISO methodology currently undergoing revision
Compliance costs associated with energy imported to the CAISO balancing authority
area via the EIM are recovered from California load through market prices
Benefits associated with lower compliance obligations accrue to California
entities
Under Cap-and-Trade Program, retirement of RECs associated with imported energy is
not required
Under California Renewable Portfolio Standard, RECs associated with imported energy
may be used for RPS compliance
California REC definition includes avoided emissions however the California
Public Utilities Commission concluded that no avoided emission value in a
capped jurisdiction
Issues
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If RECs associated with energy bid into EIM are “used” when reported to ARB as zero-
emitting, PacifiCorp has few options to allow RPS-eligible resources to fully participate
in the EIM
RECs generated from PacifiCorp resources are allocated to each of PacifiCorp six
states—PacifiCorp cannot unilaterally render RECs unusable without
compensation to customers
Because PacifiCorp does not know beforehand which resources or the amounts
that will be deemed delivered to California, the Company cannot compare
financial benefit of allowing resources to be deemed delivered to California
versus keeping the RECs
In general, market restrictions limit flexibility and reduce market benefits
At this time, because of how the CAISO import deeming methodology works, it does
not appear that preventing RPS resources from participating in the EIM is impacting
EIM power cost benefits or increasing renewable curtailments
However, CAISO is proposing to change its methodology and market optimization
so this may need to be revisited
