Administrative delays have kept California utilities from funneling almost $400 million in carbon allowance revenue back to consumers last year, regulators said.
The California’s Air Resources Board (ARB) said in a report that the delays meant half the proceeds from the vintage 2013 carbon auctions still remain to be given back to consumers this year.
The report covers how the state’s electric utilities deployed revenues from their allocation under the WCI’s first five auctions to November 2013.
State law requires investor-owned utilities (IOUs) to return 85% of allowance revenues to customers via rebates to offset cost increases due to the WCI but California’s Public Utility Commission (CPUC) had not authorized final provisions for the rebate programs or spending programs for the categories covering the other 15% in time for the report’s June 2014 cut-off (it has since).
The bureaucratic delays and the report’s cut-off date means it captures just 20% of the spending.
When fully spent, ARB said nearly 97% of the $776 million in revenue is expected to be credited back to the utilities’ residential and small business customers, while 3% of the monies should be spent to help mitigate carbon leakage risk for industrials.
The state’s publicly-owned utilities (POUs) and cooperatives – which account for the remaining third of power sold in California and are not subject to CPUC oversight – showed a broader pattern of spending.
Unlike the IOU’s, the California’s public utilities are not required to consign their entire allocation to auctions and the report showed they banked 84% of their $373 million-worth of CCAs for compliance.
Of the rest 4% of the rest went on buying additional CCAs, with 5% on renewables, 2.3% customer rate reductions. Smaller amount were put towards energy saving, transport and research, with about 4% unspent.
Some POUs also bought almost $15 million worth of allowances in the secondary market on behalf of third-party generators supplying them with electricity, as well as for their own use.
By Robert Mullin – firstname.lastname@example.org