Western Governors Association Renewable Energy Certificates Initiative for the West

1. Western Governors AssociationRenewable Energy CertificatesInitiative for the West National Wind Coordinating Committee Renewable Energy Certificates Workshop November 7, 2002 Chicago, Illinois

2. Western Policy Landscape • Renewable resource potential in the west. • WRAP implementation of Regional Haze Rule • Passage of RPS in western states • Improved economics for renewables • Emerging “green power” markets in the west • Federal “green” purchasing requirements

3. Second WGA“Enlibra” Summit • Renewable energy workshop looked at how to expand use of renewable energy in the West. Two questions: • Are “green tags” a desirable strategy for promoting development of renewable energy in the West? • What market architecture is needed to facilitate a regional “green tags” market? • Panelists: Jan Hamrin, CRS; Ben Feldman, NatSource; Eric Blank, Community Energy; Andy MacRitchie, PacifiCorp; Richard Hayslip, Salt River Project.

4. Renewable Energy Certificates Conclusions • RECs are flexible, market-based “tools” that improve economics and efficiency of market transactions. • Needed mechanisms to facilitate green tags market? • Standard definition • Registry for recording certificates. • Single, independent institution to register, issue, track and oversee trades. • Western Interconnect is an appropriate geography

5. Renewable Energy Certificates RECOMMENDATIONS Western Governors should: • Support the creation of a single Western market for RECs • Consult with Tribal governments and regional stakeholders • Recognize Western Interconnection as appropriate geography for registry • Adopt a standard definition and certification • Support development of regional generation tracking system • Endorse a single RECs accrediting body

6. WGA Resolution 02-26 on RECs “Western Governors recognize that environmental attributes of electricity generated from renewable sources have economic value and can be sold separately from the energy as Renewable Energy Credits (RECs)….. RECs lower the costs of renewable energy and, in combination with other public policies supported by Western Governors, can accelerate the development of the West’s most promising renewable resources.”

7. WGA Resolution 02-26 (cont’d) Western Governors support: • Establishment of a single institution in the West that will issue, track and oversee REC trading, • Development of a standard set of market design and operating guidelines for trading RECs within the Western Interconnection, and • Creation of an independent, regional generation tracking system to provide data necessary to substantiate the number of megawatt hours generated from renewable energy sources and support verification, tracking and trading of RECs.

8. WGA Management Directive “Western Governors direct WGA to seek funding and convene a regional meeting of stakeholders to define an institutional structure, design operating guidelines and identify information needed to establish a market for trading of RECs in the western interconnected system.”

9. Western Geography

10. WGA Actions to Date • Created Steering Committee in cooperation with Western Interstate Energy Board • Identified complementary efforts in the west • Developed draft scope of work. • Seek funding sources to support study.

11. Key Issues • Standard “regional” definition of renewables • Role of WECC • Seams issues with three western RTOs • Compatibility with policies of states, and two countries • Interface with AAIB • Scope of RECs: Energy vs Air Quality

12. WGA Next Steps • Secure funding for WGA RECs initiative • Develop final scope of work • Prepare “Scoping” document • Host regional stakeholder meeting • Establish Western RECs working group(s)