PGE seeking to buy CO2 allowances, offset credits in RFO
Washington (Platts)–2Feb2012/103 pm EST/1803 GMT
Pacific Gas and Electric is seeking carbon dioxide allowances and offset
credits that can be used to comply with California’s greenhouse gas
cap-and-trade program, which is scheduled to start in 2013.
This marks the first time California’s largest investor-owned utility
has issued a request for compliance instruments.
PGE’s request for offers, released Wednesday, did not specify how many
compliance instruments the utility would like to buy, but the minimum offer
size must be 25,000 mt of CO2-equivalent, the RFO said.
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One allowance, or offset credit, represents a single metric ton of CO2e.
PGE says it prefers allowances and offsets created as late as 2014, but
will consider offers that include later “vintage” years.
PGE will accept offset credits generated from projects under
development, but these projects must be operational within 12 months after a
contract is signed.
One of the factors that PGE will use to select winners is by comparing
the offer against a forward curve of compliance instruments based on market
prices. The deadline for offers is March 8 and interested parties may consult
PGE’s website, www.pge.com/rfo.
California’s cap-and-trade rules require certain companies, including
utilities, to secure enough compliance instruments in the form of CO2
allowances and offsets, to cover their GHG emissions.
The number of CO2 allowances equals the cap, which declines over time,
with the goal of lowering GHG emissions to 1990 levels by 2020.
–Geoffrey Craig, email@example.com