Comments on WREGIS Governance Proposal

 8/25/2011

PG&E Comments on the July 25, 2011 WREGIS Governance Proposal (Governance Proposal)

PG&E wishes first to acknowledge and commend the critical role of the Western Electricity Coordinating Council (WECC) along with co-sponsors the California Energy Commission (CEC) and the Western Governor’s Association (WGA) in the successful formation and start-up of the Western Renewable Energy Generation Information System (WREGIS).  Based on the growth and operations to date, WREGIS has successfully established itself as one of the nation’s major renewable energy registry and tracking systems.  WREGIS achieved this success through the dedicated and tireless work of WREGIS and CEC staff and with the cooperative and generous involvement of a large group of stakeholders representing industry, state, and provincial interests from throughout the western grid. 

The July 25, 2011 WREGIS Governance Proposal (Governance Proposal), however, represents a significant departure from the cooperative governance structure in place at WREGIS today.  For the reasons discussed below, PG&E objects to the proposed Governance Proposal and instead supports the proposal offered by the WREGIS Committee.   The WREGIS Committee proposal would strengthen WREGIS through the continued engagement of a representative stakeholder committee, which would provide significant benefits to both WREGIS and its stakeholders. Among other benefits, a stakeholder committee would help WREGIS identify critical issues and resolve anticipated new challenges, including more complex renewables requirements, and would protect stakeholder interests through increased transparency compared to the Governance Proposal.

Background

Since early 2006, WREGIS has been governed by the WREGIS Committee, a seven member organization representing a cross section of industry and government interests and the three founding sponsors.  Under the WREGIS Committee’s leadership, WREGIS has evolved from its development/pre-operational phase to its current status as a fully operational renewable energy registry and tracking system, providing renewable energy tracking services to seven western states and some voluntary renewable programs throughout the WECC.  Through its governance role, the WREGIS Committee has been closely involved with WREGIS since its inception.  Among the items the WREGIS Committee, its various subcommittees, working groups and the Stakeholder Advisory Committee have helped shaped are the operating rules, the terms of use agreement, changes to WREGIS functionality, the operating budget and user fees.

Resolution and implementation of these key WREGIS policy decisions required stakeholder input.  The diverse perspectives of the WREGIS Committee membership helped to ensure that all aspects of potential issues were considered, appropriately balanced, and addressed in establishing procedures and making changes.  In contrast, a single governance perspective would not have provided the necessary insights to evaluate fully the range of issues and challenges that WREGIS has encountered and may encounter in the future. 

Ongoing Stakeholder Input Is Essential To WREGIS’s Continued Success

The renewable energy field is continuing to develop.  Every year, the states and provinces within the western interconnection, as well as the federal authorities, continue to adopt new laws and requirements for renewable energy, often with increased complexity. For example, California recently passed a new 33% RPS law which may require WREGIS system modifications to implement.  As a result, WREGIS will face ongoing challenges in modifying its procedures to adapt to these new rules. WREGIS needs the thorough and inclusive input of the WREGIS stakeholders in order to continue to evolve to meet the needs of these oftentimes intricate rules and its WREGIS’s stakeholders.

If adopted, the Governance Proposal would dissolve the WREGIS Committee and replace it with a new advisory group without management, operational, or decision-making power.  Managerial authority would solely reside in WECC.  Under the Governance  Proposal, stakeholder input would be limited to recommendations made through the new advisory group.  There are no provisions guaranteeing reasonable consideration of the new advisory group’s recommendations.  Instead, all decisions would be made by WREGIS staff, subject only to limited WECC oversight.  Future modifications to operating rules, the terms of use agreement, fees, and WREGIS functionality would essentially be at the discretion of WREGIS staff, beyond the control of its many stakeholders in industry and government. 

PG&E appreciates WECC’s motive for increasing independent WECC control of WREGIS upon the conclusion of the CEC contract. However, PG&E has significant concerns with how this proposed new governance structure will affect WREGIS' accountability to its many accountholders and program administrators, all of whom are becoming increasingly reliant on WREGIS to comply with state RPS programs. From the perspective of a California load serving entity account holder, which has a regulatory requirement to use WREGIS, the lack of stakeholder-based representation in WREGIS governance is unacceptable.  Without such representation, the entities that must rely on WREGIS would have no substantive input into the oversight of the registry going forward. 

Governance Proposal Marks A Significant Departure From the Governance of Other Tracking Systems

Further, there are significant differences between the Governance Proposal and the governance structures predominantly used for other REC tracking systems throughout the United States.  With the exception of a single tracking system (one used in PJM), all other tracking systems are either stakeholder-governed or confined to one state and are under the direct control of that state’s public utilities commission (see, e.g., MIRECs and NC-RETs administered by NYSE Blue, ERCOT, Nepool-GIS, and the North American Renewables Registry designated as the tracking system for Missouri, Kansas, and Illinois).  Under either a stakeholder-governed or single state based mechanism, stakeholders have a reasonable opportunity to resolve matters related to the renewables tracking system.  Should WECC adopt the Governance Proposal, WREGIS would depart from the established norm and disadvantage its accountholders.  Moreover, if this governing structure is implemented, accountholders unable to resolve matters acceptably with WREGIS may seek to petition their respective state RPS administrators to use other renewable energy registries and tracking systems that will meet the needs of that state’s requirements and the needs of the stakeholders.

For the reasons discussed above PG&E has significant concerns with the July 25, 2011 WREGIS Governance Proposal and fully supports and agrees with the comments and governance proposal offered by the WREGIS Committee.  PG&E appreciates the opportunity to provide these comments.

Jomo Thorne                                                                                                                          PG&E

8/25/2011

Click here to view CEC Comments on WREGIS Governance Proposal.

Carla Peterman & James Boyd                                    California Energy Commission

8/24/2011

The WREGIS Committee has been very valuable to WREGIS’s success, so would like to it continue as a key committee in the future.  The formation of WAG to give stakeholders a voice would be good, but not having any operational, managerial, or decision making authority over WREGIS raises some concerns for the stakeholders.  This is not to say that WREGIS or WECC isn’t capable of this authority, but it gives less authority to the stakeholders.  Perhaps, there could be a compromise in some of the decision making rules where WREGIS can make certain decisions, but when it comes to “key” or “major” decisions that affect a majority, the stakeholders would have the authority to make the final decisions.  Thank you for the opportunity to comment. 

Linda Watts                                                                                                              SDG&E

8/24/2011

Having read and considered the WREGIS Governance Proposal Geysers Power Company (GPC) respectfully offers the following comments:

The July 25 WREGIS Governance Proposal provides a clear overview of the proposed organizational structure and relationship between WECC and WREGIS, however, GPC believes the Proposal would be strengthened and clarity added if it were expanded to address WREGIS’s Mission and Purpose under the new structure. 

One way of doing this would be to include a draft WREGIS Charter revision as part of or appendix to the Proposal. Besides the obvious replacement of “WREGIS Committee” with “WREGIS Advisory Group”, and incorporating a ‘reserve revenues will meet or exceed three months operating expenses’ clause into Section 3.3 to address a WECC Board concern, it would be of interest to see if the obligations to the Founding Sponsors (Section 1, 3.9.4, and 6.2) have been fulfilled or are continued forward.

Assuming that Charter Section 5.4.1 remains basically unchanged, the last sentence of the Task Force Recommendation of the Proposal might be revised to read “The representatives will be selected by their respective class groups as outlined in Section 5.4.1 of the WREGIS Charter.”   

Dean Cooley                                                                       Geysers Power Company 

Click here to view comments on this topic from the WREGIS Committee.