Exemption, Board of Water and Power Commissioners and City Attorney reports, and Ordinance relative to updating regulatory programs and adding new types of environmental energy and renewable energy credit products available for purchase, sale, and exchange.

Summary

This ordinance amends Section 23.143.1 of the Los Angeles Administrative Code (LAAC) to update regulatory programs and expand the types of environmental and renewable energy credit products that the Department of Water and Power (LADWP) can purchase, sell, or exchange. The amendments are necessary due to changes in federal, state, and local environmental regulations since the code was last updated in 2014. Key changes include:

• New Definitions: Adds "Additional Environmental Attribute" (AEA) to define environmental attributes for renewable energy not attributable to in-state regulatory programs.
• Expanded Credit Types: Incorporates new credit products such as Nitrogen Oxide (NOx) Emission Reduction Credits (ERCs) and Cross-State Air Pollution Rule (CSAPR) allowances, which are becoming relevant due to updated EPA regulations impacting facilities like the Intermountain Power Project and Apex Generating Station.
• Updated Price Limits: Establishes new price caps for NOx ERCs (up to $700,000/lb/day) and CSAPR allowances (up to $450,000/ton), while maintaining existing limits for other credits like RECs ($100/REC) and Greenhouse Gas allowances ($150/allowance).
• Compliance Focus: Reaffirms that LADWP's participation in these markets is strictly for compliance with environmental laws and regulations, not for speculative trading.
• Policy Alignment: Delegates authority to the LADWP General Manager to update the Environmental Credit and Renewable Energy Credit Policy to align with the amended LAAC section and current regulatory requirements.

Citizen Impact

This update ensures LADWP can continue to comply with evolving environmental regulations, which may indirectly affect the cost of electricity. By allowing for the trading of a wider range of environmental credits, LADWP aims to manage compliance costs more effectively, potentially mitigating increases in utility rates.

Confidence

high