Reuters Turns to Manatt Professional on Resource Shuffling Regulations

"Regulator Urges Change in California Cap-and-Trade Program"
Reuters

August 8, 2012 - Reuters looked to Manatt's Jon Costantino, a senior advisor in the firm's Climate Change, Environmental and Clean Energy Policy Practice, for insight into the regulation of California's cap-and-trade program, particularly its "resource shuffling" policies.

Reuters reported that one of the five commissioners of the Federal Energy Regulatory Commission sent a letter to California's governor asking him to suspend a section of the state's cap-and-trade regulations that addresses power imported from out of state. The commissioner warned that California's approach to "resource shuffling" regulation may disrupt its electricity market. Currently, California requires power importers to pledge in writing each year that they're not shuffling their resources, which occurs when a regulated plant imports lower-emission electricity to California while sending its more carbon-intensive electricity to other states.

Critics, including the commissioner, think that California's definition of resource shuffling is too broad. The California Air Resources Board, which regulates the program, said it will continue to pay close attention to the design and enforcement of cap-and-trade.

Costantino thinks it's unlikely that the warnings of one commissioner will sway California regulators.

"It is only one commissioner, so until we hear that a majority feel the same way, it is just one voice," he said, adding that there has been no indication from the Brown administration that it will change direction.

Read the article here.