Current through Register Vol. 54, No. 49, December 7, 2024
Section 69.293 - Regulatory oversight of emission allowance trading(a)Approval of compliance plans.(1) The Commission will, upon request, review a jurisdictional utility's proposed CAAA compliance plan under 66 Pa.C.S. § 530 (relating to Clean Air Act implementation plans), including planned sales or purchases of emission allowances. Absent special circumstances, the Commission will not approve specific transactions. A proposed plan shall detail the analysis used by the utility to derive its plan and the alternatives considered with enough specificity to permit reasonable evaluation. In addition, the Commission may require that companies supply specific information to support these plans.(2) If a utility chooses not to have its compliance plan approved, the plan will only be reviewed in the context of a subsequent base rate or other proceeding in which that utility seeks recovery of its compliance costs.(3) Public utilities are not required to obtain certificates of public convenience under 66 Pa.C.S. § 1102 (relating to enumeration of acts requiring certificate) to engage in emissions allowances transactions.(4) Emissions allowances transactions, including the purchase and sale of emissions allowances, allowance options and future contracts, do not constitute the issuance or assumption of securities within the meaning of 66 Pa.C.S. § 1901(b) and (c) (relating to registration of securities to be issued or assumed) and therefore no registration of a securities certificate is required.(b)Banking. (1) A utility may bank some level of emission allowances to prepare for unforeseen future contingencies. The Commission will not set generic or benchmark reserve levels or benchmark prices. The determination of an appropriate number of banked allowances will depend upon a utility's specific circumstances. The utility has the burden of proof concerning the appropriate number of banked allowances. The Commission will view a utility's decision to bank allowances as a part of its overall compliance plan. Approval of a utility's decision to bank allowances does not assure a prudency finding for purposes of ratemaking.(2) The Commission finds it inappropriate to adopt a categorical approach to reserve allowances because individual utility circumstances will differ. Operating contingency allowance reserves, determined to be prudent, will be granted appropriate ratemaking treatment in base rate proceedings under § 69.294(b) (relating to ratemaking treatment of emission allowances).(c)Pooling arrangements. The Commission recognizes that pooling arrangements which are consistent with section 405 of the Clean Air Act Amendments of 1990 ( 42 U.S.C.A. § 651d ) may be appropriate. Pooling options will be reviewed by the Commission as part of the compliance plan review process.(d)Sales of allowances to nonutility generators. The Commission will not require allowance preferences for the sale of emissions allowances to nonutility generating facilities, such as qualifying facilities, independent power producers and exempt wholesale generators.The provisions of this § 69.293 adopted February 26, 1993, effective 2/27/1993, 23 Pa.B. 972. This section cited in 52 Pa. Code § 69.291 (relating to general); and 52 Pa. Code § 69.292 (relating to definitions).