June 18, 2004
In the Matter of the Commission's
Inquiry Into the Provision and
Regulation
of
Electric
Service
Emissions Disclosures.
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Case No. 8973
To All Parties of Record and Interested Persons:
On September 17, 2003, the Public Service Commission ("the Commission")
requested comments for all parties of record and stakeholders in the above-captioned
matter regarding the status of emissions disclosure and fuel mix composition associated
with generation and delivered electricity in Maryland. The impetus for this proceeding
was the introduction by PJM Interconnection, LLC ("PJM") of a proposed conceptual
design for a new regional Generation Attributes Tracking System ("GATS") Phase II.
PJM and supporters of the GATS Phase II have urged the Commission to endorse it for
use in ensuring compliance with Maryland’s fuel mix and emissions disclosure law. MD.
CODE. ANN., Public Utility Companies Article § 7-505(b)(4)(i).
At present, the Commission finds that the costs of GATS Phase II (to the extent
that such costs are known) exceeds the likely benefits associated with emissions and fuel
mix tracking. Therefore, the Commission has determined, at this time, not to direct load
serving entities (LSEs) to certify emissions and fuel mix data using GATS Phase II.
In Order No. 76241, in Case No. 8738 (issued June 15, 2000), the Commission
adopted fuel mix and emissions disclosure label requirements to meet the requirements of
§ 7-505(b)(4)(i). To meet the adequate and accurate information requirement, utility
companies and suppliers were allowed to use regional average data until 6-month
company-specific (or actual) data could be collected, verified and reported. Subsequently,
PJM produced and disseminated a first generation conceptual design for a regional
tracking system - Generation Attributes Tracking System (GATS Phase I).
To All Parties of Record and Interested Persons in Case No. 8973
June 18, 2004
Page 2
The primary objective of GATS Phase I was the deployment and use of a system
or service that would track ownership of generation and contracted-for energy, and
provide that information to utility companies and suppliers on an as requested and as
required basis to meet various state emissions disclosure and fuel mix statutory
requirements for consumer labeling. In Order No. 77412, in Case No. 8738, after
reviewing the comments of the parties in that case, the Commission authorized the use of
GATS Phase I by electric companies and electricity suppliers providing retail electricity
to customers in Maryland. With regard to electric companies and electricity suppliers
making environmental claims, the Commission continued to permit self-certification and
verification of emissions and fuel mix data.
Following the issuance of the Commission's Order directing the general use of
GATS Phase I, the Commission's Technical Staff (or "Staff") notified the Commission
that GATS Phase I had not been completed and was not in fact operational. Staff
indicated that it was unclear when a GATS would be completed and what the costs and
benefits associated with any such system would be. The Commission initiated its inquiry
in this case: to determine the results of PJM's GATS Phase I; to determine how load
serving entities (LSEs) intended to generate emissions disclosure labels going forward;
and, to determine the positions of the parties relative to PJM's GATS Phase II.
Written comments were filed by the Coalition of Electricity Suppliers (Atlantic
Renewable Energy Corporation, Conservation Services Group, Evolution Markets, Green
Mountain Energy Company, H.Q. Energy Services (U.S.) Inc., National Energy & Gas
Transmission, PSEG Energy Resources & Trade LLC, and Washington Gas Energy
Services); Maryland Electric Distribution Companies (Baltimore Gas and Electric,
Conectiv, Potomac Electric Power Company and the Potomac Edison Company); the
Maryland Energy Administration; the Mid-Atlantic Power Supply Association; PJM;
Pepco Energy Services; the Maryland Office of People's Counsel; Staff; the Northeast
Maryland Waste Disposal Authority; Community Energy, Inc. The Commission held
quasi-legislative hearings in this matter on December 3, 2003.
The written comments and the hearing discussions in this matter confirm for the
Commission the Technical Staff's assessment that GATS Phase I had fallen short of some
of the expectations initially indicated for the fuel mix and emissions disclosure tracking
system. While the parties and participants in the case have supported and continue to
support the PJM's GATS concept, as a general matter, they note that the GATS Phase I
labels that were produced were inaccurate. Moreover, few of the LSEs that had requested
them actually used them.
LSEs as well as electricity suppliers support an
administratively simple, cost-effective means of verifying compliance with emissions and
fuel mix disclosure requirements. However, they urge that such design must be
accomplished in a manner that does not require retailers to incur excessive additional
costs.
To All Parties of Record and Interested Persons in Case No. 8973
June 18, 2004
Page 3
In its comments, PJM described the GATS Phase I conceptual design, provided a
development and status update regarding the PJM GATS Working Group, and requested
that the Commission determine whether it supports the GATS Phase II design. The
Commission was further requested to consider whether it is willing to require Maryland
suppliers to utilize and contribute to the funding of the development and operation of the
GATS Phase II. (The GATS Phase II design is essentially an unbundled certificate
model, as compared to the contract path model found in GATS Phase I). For both GATS
Phase I and GATS Phase II, PJM estimated that the total system development costs
would be approximately $1 million with an annual support cost of approximately
$325,000.1
OPC noted in its comments that it continues to support third party verification of
emissions and fuel mix disclosure, and that PJM is an appropriate proper entity to verify
data. However, OPC also noted that it is not yet certain that the proposed program
currently under consideration at PJM fulfills the needs of Maryland customers. 2 Staff
also joins with other parties in pointing out the shortcomings of PJM GATS Phase I
labeling. Staff believes that the Commission should require electric companies and
electricity suppliers to comply with the rules adopted by the Commission in June 2000.3
The existing rules require either the use of GATS Phase I, or self-certification of
disclosure by firms making environmental claims for a product.4
Staff has urged the Commission to revise Order Nos. 77412 and 77666 to no
longer require the use of PJM GATS Phase I, and to allow self-certification for all LSEs.5
According to data submitted by Staff, company-specific data in 2001 demonstrates that
LSE can provide actual data to meet the § 7-505(b)(4) requirement on their own.6 Staff
also submits that "[t]he absence of a regional tracking system does not release electricity
suppliers and electric companies from their statutory requirement to provide adequate and
accurate information to their customers regarding emissions and fuel mix."7 In its reply
comments, PJM noted that it will continue to produce a regional average label, which
meets the Maryland statutory requirement for providing accurate and adequate data.8
1
See PJM Comments at 13.
OPC Comments at 2.
3
Order No. 76241.
4
Staff Comments at 15-16.
5
Id. at 16-17.
6
In its reply comments, Staff noted that it continues to believe that the disclosure of regional fuel mix and
emissions data falls short of the adequate and accurate information standard required under § 7-505(b)(4).
Staff Reply Comments at 8.
7
Staff Comments at 11.
8
See PJM Reply Comments at 3.
2
To All Parties of Record and Interested Persons in Case No. 8973
June 18, 2004
Page 4
Upon review of the written comments and after hearing from all parties in this
matter, the Commission finds that GATS Phase I did not produce reliable emissions and
fuel mix disclosure labels for use by LSEs in Maryland. Accordingly, the Commission’s
previous directive authorizing LSEs to utilize GATS Phase I is hereby vacated. Further,
the evidence in the case does not support that GATS Phase II, as proposed by PJM,
would be a prudent and cost beneficial approach for electric companies and electricity
suppliers to use to provide the required emission and fuel mix data to Maryland
customers.
With a view towards progress, and in light of developments regarding renewable
portfolio standards (RPS) legislation, the Commission encourages continued efforts by
PJM and the stakeholders in the development of a uniform emissions tracking system that
will meet the needs of consumers with regard to information disclosure as well as
electricity suppliers and LSEs with regard to the certification of emissions attributes.
With the recent passage of Maryland’s RPS law, the Commission is required,
among other things, to develop a trading and tracking system for renewable energy
consumed in Maryland. The Commission is currently analyzing its responsibilities under
this new law and developing a framework for its implementation. The Commission
envisions a stakeholder participation process to commence during the Summer of 2004 to
assist in this effort. The Commission leaves open the possibility that a regional tracking
system may be considered as part of the RPS implementation framework.
Wherefore, for the foregoing reasons, the Commission will not direct Maryland
load serving entities to use a specific PJM GATS design (either as put forth in Phase I or
Phase II) for emissions and fuel mix tracking and disclosure. Consistent with Order No.
76241 (in Case No. 8738), load serving entities may utilize regional average data or
provide self-certified company-specific data, as available, with appropriate third-party
verification to meet their emissions and fuel mix disclosure requirements in Maryland.
By Direction of the Commission,
Felecia L. Greer
Executive Secretary
FLG/lvs