Message-ID: <27202508.1075858656468.JavaMail.evans@thyme>
Date: Mon, 17 Sep 2001 07:44:19 -0700 (PDT)
From: stacey.bolton@enron.com
To: john.shelk@enron.com
Subject: FW: Kevin Presto comments on the summary of Bingaman bill
Cc: linda.robertson@enron.com, jeff.keeler@enron.com, l..nicolay@enron.com,
d..steffes@enron.com, elliot.mainzer@enron.com,
charles.yeung@enron.com, andy.rodriquez@enron.com,
richard.shapiro@enron.com, rogers.herndon@enron.com,
don.black@enron.com, sarah.novosel@enron.com,
pat.shortridge@enron.com, janel.guerrero@enron.com,
richard.ring@enron.com
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John:
I thought it might be helpful to expound on several important principles th=
at we have learned through experience regarding RPS/disclosure. I've been=
working on these issues for about 2 years, and they have a long and often =
complex history. After you've had a chance to digest the below, I'm glad t=
o help out in our response.
1. RPS and disclosure requirements need to be developed together. Further,=
since environmental disclosure is a requirement in 14 states and RPS in 7 =
states, it's important that we don't have overlapping, redundant requiremen=
ts on a national level. This can ultimately add to the customer's bill bec=
ause of the administrative cost to comply with these requirements.
2. For disclosure, the label calculation (how you derive the fuel mix) is =
the most crucial. Suppliers need the following:=20
=09a. the ability to project what they will deliver to customers over a spe=
cified "settlement period" (we greatly prefer annually) if they are differe=
ntiating their products (either with bilateral contracts or claims about th=
e environmental benefits of the product). Otherwise, suppliers would submit=
a label with the default mix for spot market purchases. (As Kevin pointed=
out below, this allows flexibility in determining how the products will be=
sourced -- either through bilaterals, spot and/or renewable energy certifi=
cate (REC) purchases).
=09b. For suppliers purchasing from the spot market, there needs to be defa=
ult fuel mix data provided to suppliers.
=09c. After a calendar year, suppliers would provide customers with an annu=
al label based on actual fuel purchases ("historic label") for differentia=
ted products (including REC purchases and bilaterals). For system mix produ=
cts, the projections and historical would be the same. The latter has worke=
d well for EES.
=09d. There needs to be a lag in-between the timing of label distribution f=
or projections and historic label for the product claim. This will allow an=
y necessary true up between unanticipated customer usage and the amount of =
power purchased for the customer.=20
3. For RPS and disclosure: It is extremely important that any national RPS=
/disclosure requirement be developed with a certificate trading program. A=
certificate is usually defined as one MWh of renewable energy that has bee=
n generated, and represents the attributes or environmental benefits of the=
generation separate from the underlying power. This should be a tradable =
instrument separate from the power. Renewable energy certificates "RECs" c=
an be bought sold, traded separately from power, and allows vital flexibili=
ty to get renewables to regions of the country where the supply might be co=
nstrained or where renewables such as wind and solar are not conducive to b=
eing sited. RECs also provide verification for the purchase of power attri=
butes for RPS and disclosure. As Christi was stating below, it is impossibl=
e with our sophisticated wholesale markets to track all electrons from gene=
ration to end use consumption. The beauty of certificate trading programs =
is that they create a secondary market by which the attributes of power can=
be tracked through various trades. Certificates trading programs are not a=
lways limited to renewable energy. In New England, they are developing a f=
ull certificates based system by which all generation would be issued certi=
ficates. This helps support the disclosure requirements in the East.
Regards,
Stacey Bolton
Environmental Strategies
Enron Corp
713-853-9916 direct=20
713-303-2632 cell=20
sbolton@enron.com <mailto:sbolton@enron.com>
=20
-----Original Message-----
From: =09Guerrero, Janel =20
Sent:=09Monday, September 17, 2001 7:41 AM
To:=09Bolton, Stacey; Mainzer, Elliot; Keeler, Jeff
Cc:=09Nicolay, Christi L.; Lindberg, Susan
Subject:=09Kevin Presto comments on the summary of Bingaman bill
Stacey et al,
I thought you should see Presto's comments on the Bingaman energy legislati=
on as it relates to environmental disclosure and renewable issues. If you h=
ave additional questions, you might want to follow up with Christi Nicolay =
or Susan Lindberg.
-----Original Message-----
From: =09Nicolay, Christi L. =20
Sent:=09Thursday, September 13, 2001 8:45 AM
To:=09Shelk, John
Cc:=09Yeung, Charles; Rodriquez, Andy; Steffes, James D.; Robertson, Linda;=
Shapiro, Richard; Herndon, Rogers; Black, Don; Novosel, Sarah; Shortridge,=
Pat; Guerrero, Janel
Subject:=09Kevin Presto comments on the summary of Bingaman bill
John -- Kevin Presto, head of East Power Trading, had these comments:
Under Title IV Electric Reliability Standards -- Kevin says, "NERC should b=
e eliminated."
Under Title V Subtitle B Environmental Disclosure: -- Kevin says that the "=
uniform reporting to consumers, in monthly electric bills, of the known ene=
rgy sources" is not good because it supports day-ahead source requirements =
for retail suppliers. Enron advocates the ability of customers to choose h=
ow to source their portfolio, whether from bilateral contracts done on an a=
head basis or purchases in the spot market. =20
John, the renewable portfolio standard provisions later in the draft bill m=
ay alleviate this concern, but I don't know enough about how that works. S=
everal years ago credits were discussed as credits that accrued to the clea=
n energy generator and it can trade those credits. Therefore, the seller o=
f clean energy to endusers would need to have a certain amount of clean cre=
dits in order to claim it sold clean energy (meaning that the clean generat=
or was supported by the marketplace since sellers needed a certain amount o=
f credits). That program recognized that you can't specifically source a c=
lean generator to a load because electricity doesn't flow that way. Thus, =
portfolio sourcing could continue and clean energy is supported. But I don=
't know how this bill's provisions would work. You probably have the Enron=
experts on this (used to be Janel G.) Thanks.