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On January 5, 2024, the Oregon Public Utility Commission adopted Order No. 24-002 on issues related to the implementation of HB 2021, the Oregon Clean Energy Targets bill. In response to this order, the Green-e® Governance Board voted to amend the Green-e® Renewable Energy Standard for Canada and the United States (the “Standard”) to add an appendix entitled “A.10 Oregon.” Under this amendment, RECs associated with electricity generation as of January 1, 2024, and reported to the Oregon DEQ for compliance with Oregon HB2021 (2021) may not be used in a Green-e® Energy certified renewable energy product.

Since the Standard amendment was adopted, CRS has received questions about how it affects Green-e® Energy compliance. This document provides more information regarding the basis for the amendment and how CRS intends to administer it.

Further background on Green-e® Energy rules related to HB 2021 can be found in the Standard and in a press release sent to Green-e® Energy participants on February 21, 2024.

Please note that the information provided below does not guarantee that any particular REC can be used in a Green-e® Energy certified product. Conformance with Green-e® Energy requirements is determined through the annual Green-e® Energy verification audit. The information provided in this communication is for information purposes only, and should not be considered or relied upon as legal or business advice.

 

Questions and Answers

Why was the change deemed necessary and adopted by the Green-e® Governance Board?
The new Appendix was approved by the Green-e® Governance Board to protect the benefits of Green-e® Energy certified renewable energy for electricity users in response to policy implementation in Oregon. Without this new Appendix, Green-e® Energy certified renewable energy would not go above and beyond state requirements, and customers’ voluntary dollars would merely subsidize utility compliance with state laws. Even while HB 2021 requires that retail electricity providers eliminate greenhouse gas emissions associated with serving Oregon retail electricity consumers by 2040, voluntary renewable energy purchases can nevertheless play an important role in incrementally affecting clean energy development and decarbonization both in Oregon and regionally in the West, provided that the generation sold to voluntary purchasers is surplus to regulation.

CRS has historically partnered with several important regional organizations dedicated to accelerating the transition to clean electricity in the Pacific Northwest, including Renewable Northwest (RNW), the Green Energy Institute (GEI) at Lewis & Clark Law School, and the NW Energy Coalition (NWEC).

According to GEI, “Green-e® has made a tough but ultimately correct decision to preserve the integrity and impact of voluntary renewable energy purchases in light of policy implementation in Oregon. This decision ensures that Green-e® certified voluntary renewable energy in Oregon and regionally in the West can be credibly claimed and can make a difference.”

Additionally, according to RNW, “Although REC retirement is not required to demonstrate compliance with HB 2021, the market has the right to assess the quality of RECs associated with power that Oregon utilities report to DEQ as zero-emissions. Green-e’s decision reflects an assessment by a cross-section of market participants that these RECs are lower quality, due primarily to the risk that the purchasers of these RECs will be effectively double-counting zero-emissions claims.”

And NW Energy Coalition stated that it “supports CRS’s decision not to provide Green-e® certification to RECs generated from Oregon utility resources that were procured due to a regulatory or legislative mandate. Voluntary renewable customers should receive high-quality RECs from resources that provide additionality and go beyond what utilities are required to do. This step will provide benefits to voluntary renewable customers and ensure accurate accounting and tracking of environmental attributes.”

 

Does the Standard prohibit RECs from all Oregon facilities from being used toward Green-e® Energy Certified products?
No. What cannot be used are RECs that are associated with electricity that is reported to the Oregon Department of Environmental Quality (DEQ) for compliance with HB 2021.

Because Oregon retail electricity providers regulated by HB 2021 that report to the OR DEQ can procure electricity from outside of Oregon, the location of the generating facility is not relevant. Electricity generation both from within and outside of Oregon may be permissible depending on whether it is included in OR DEQ HB 2021 compliance reporting.

 

How will CRS evaluate resources against the Standard?
During annual Green-e® Energy verification, all reported MWh will be checked against annual DEQ reporting. This is the only way to ensure that the corresponding REC can be used in a certified product.

There are steps and checks that can be done to reduce the risk of buying and selling RECs from MWh that are likely to appear on reporting to the DEQ, which are discussed below, but these checks cannot be a replacement for annual Green-e® Energy verification.

 

Why does the program change take effect starting January 1, 2024, rather than in 2030, which is the first compliance target year in HB 2021?
While the DEQ’s GHG emissions reporting program has been in place for some time, the passage of HB 2021 creates regulatory compliance targets for the emissions reported, changing the regulatory status of reported generation and affecting the voluntary market. And while the emission reduction target dates in the law are 2030, 2035, and 2040, the PUC clarifies in Order No. 24-002 that the basis for compliance is emissions reporting to the DEQ. Though emissions reduction requirements do not begin until 2030, HB 2021 compliance reporting to DEQ has already begun. Generation that is reported for compliance cannot be considered surplus to regulation, i.e. voluntary.

 

What is the timing of OR DEQ reporting?
Oregon DEQ reporting occurs annually. Utilities that deliver retail electricity into Oregon in a given year must report that year’s electricity deliveries to the OR DEQ by June 1st of the following year. A third party then verifies the data by September 30th. For example, 2024 retail electricity deliveries aren’t fully verified until September 30th of 2025.

 

What does this mean for Green-e® Energy verification?
Due to the timing of OR DEQ reporting, CRS cannot know, for example, if 2024 generation is usable in a Green-e® Energy certified sale until October 2025. This additional lag will continue to occur for as long as HB 2021 is in effect or until Oregon agencies change their rules or practices. However, CRS will monitor available data and will update verification practices to the extent possible. Please also see information below on reducing the risk of buying RECs associated with electricity reported to the DEQ.

 

What if DEQ reporting reveals that RECs reported in Green-e® Energy verification cannot be used toward a certified product?
In general, after CRS has completed reviewing a participant’s Green-e® Energy verification audit, it sends a confirmation letter to the participant. This letter will state that CRS cannot verify some supply pending OR DEQ reporting.

If conflicts with OR DEQ reporting are found and replacement supply is needed to ensure regulatory surplus and compliance with Green-e® program rules, that supply will be audited during the following year’s verification.

 

What data exists to reduce the risk of buying and selling RECs that are not allowable under the Green-e® program because of OR DEQ reporting?
CRS cannot guarantee in advance that any particular REC is usable toward a certified product, but Green-e® Energy participants may find the following resources to be useful as they seek to minimize the risks associated with DEQ reporting:

Spot Market Electricity Sales
Because only MWh from identifiable facilities can be reported to the OR DEQ as having come from that facility, RECs bought from facilities that are selling associated electricity into the spot market (and not to a load-serving entity (LSE) that is obligated to report to the OR DEQ) should pose less risk. There are at least seven obligated LSEs that report electricity to OR DEQ: Portland General Electric, PacifiCorp, Avangrid, Brookfield Renewables, Shell, Calpine, and Constellation NewEnergy.

If one of the Oregon obligated LSEs is purchasing the electricity associated with your RECs, there is a chance that the electricity will be reported to OR DEQ for compliance with HB2021, which would make your REC purchase unable to be used in a Green-e® Energy certified sale.

DEQ Emissions Factors
The OR DEQ also publishes emissions factors for facilities that have appeared on HB2021 reporting to the DEQ in the past; see the “Greenhouse Gas Emissions Projections” section of this page. While the specific list of facilities appearing on HB2021 can vary each year, facilities that appear on this list of emissions factors may be used in future reporting as well, putting their RECs at some level of risk of being unusable toward Green-e® Energy certification.

Integrated Resource Plans
Another data source that may be useful, if available to a Participant, is Integrated Resource Plans (IRPs) for the above obligated LSEs.  IRPs may show facilities with which LSEs have long-term electricity purchase contracts, and if electricity from one of these facilities is delivered to that LSE’s OR retail customers then that electricity must be reported to the DEQ and the corresponding RECs will not be usable in a Green-e® Energy certified product. Similar data sources showing facility-specific contracts with LSEs could be used in a similar fashion.

CRS Listed™ Site
As noted on the CRS Listed website, appearing on that site does not guarantee that any of the facility’s output can be used in a Green-e Energy certified sale. The CRS Listed website cannot currently exclude facilities based on the possibility that their output might be reported to the OR DEQ however, CRS staff is exploring the possibility of using the CRS Listed page to help provide additional insight to buyers. Any additional information related to whether and how the CRS Listed data might be used to evaluate facilities will be posted on that site.

 

Data analysis from available DEQ records
As of January 1^st, 2024, any RECs generated in North America can come from generation reported to OR DEQ for compliance with HB2021, although based on the emissions factors data mentioned above, the vast majority of facilities reported to the OR DEQ in the last few years are located in the WECC.

CRS has received verified 2022 and unverified 2023 HB 2021 reporting data from the DEQ as well, and interpreted the current OR DEQ data to determine:

• The location of the facilities reported in 2022 and 2023 is in the WECC (state breakdown; 58.2% Oregon, 16.9% Utah, 7.9% Wyoming, 6.1% Idaho, 3.9% Washington, 3.0% N/A (Unspecified/ Net Metered), 1.4% California, 1.2% Montana, 0.7% Colorado, 0.6% Multiple [Bonneville Power Administration])
• 95.4% of the facilities reported in 2023 were also reported in 2022
• 96% of the facilities reported in 2022 and 2023 were reported by Portland General Electric and PacifiCorp

Data from 2023 and before does not guarantee any particular outcomes for 2024 data.

CRS does not guarantee the accuracy of the data analysis provided above. Any person may submit a formal records request through the OR DEQ public records system to request the same verified 2022 and unverified 2023 annual electricity data reported to the Oregon DEQ for compliance with HB2021 Energy Targets, which CRS has requested and interpreted above.

 

Looking to the future, and how to get involved
CRS will remain engaged in this issue and continue to monitor and comment on Oregon policy to ensure the ongoing wellbeing of the voluntary renewable energy market, and to find long-term solutions to maintain the value of voluntary procurement in the context of HB 2021, the Oregon RPS and future developments.

If you are interested in discussing policy changes in OR that would help clarify this and protect the voluntary market, or if you would like more detail on what could change in OR, or want to learn more about what we’re advocating for, please contact Pat Brewer (pat.brewer@resource-solutions.org) regarding this, or with any other questions or concerns.