Comment Log Display

We are very concerned that ARB’s decision to remove the limited
restrictions on the investor-owned utilities’ (IOUs) use of
allowance value is unwarranted and potentially detrimental to the
ongoing process to allocate allowance value in furtherance of the
objectives of AB 32.
 
We disagree with ARB’s decision to remove the provisions in the
rule providing guidance to the electric IOUs on how to return
auction revenue for the benefit of their retail customers, Section
95892(d)(3) page 143 of the revised draft.  The provisions simply
ensure that the IOUs’ use of allowance value will not mute the
carbon price signal embedded in retail rates or be tied exclusively
to an individual utility customers’ energy consumption. 
Maintaining the carbon price at the retail level is at the heart of
staff’s allocation scheme for the utility sector and reflects the
consensus recommendation of nearly every expert body that has
examined the issue - including the Economic Allocation Advisory
Committee.  As designed, we do not believe that the provisions
would unduly interfere with the California Public Utilities
Commission’s (CPUC) jurisdiction over rate setting.
 
Although ARB’s rationale to remove the provisions rests on
questions of legal authority, we are concerned that stakeholders
may attempt to construe ARB’s decision as signaling a change of
position on the matter from a policy perspective.  Past CPUC
decisions have called for ARB’s judgment on questions surrounding
allocating allowance value from the electricity sector and ARB’s
position will be significant in shaping the ultimate resolution. 
Should ARB proceed with the proposed changes, we therefore ask that
ARB reaffirm unequivocally its expert conclusion that “staff
believes that any rebates to residential customers should be made
as separate payments and not simply deducted from customer bills.
The purpose of this restriction is to ensure the carbon price is
reflected in residential electric rates”

Thanks for your consideration.