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Oregon CO2 Standard Third Five 
Year Report to EFSC 
Sheldon Zakreski 
November 21, 2014
2 
Outline 
• Purpose of the Report 
• About the CO2 Standard 
• About TCT 
• Facility Overview 
• Project Selection + Ove...
3 
PURPOSE OF THE REPORT
4 
Qualified Organization Mandate 
• ORS 469.503(d)(C) 
• QO must submit a report every 5 years 
to EFSC on its performanc...
5 
THE OREGON CO2 
STANDARD
6 
What is the OR CO2 Standard? 
• Applies to new plants 
– 0.675 lbs. CO2/kWh 
– 0.504 lbs. CO2/hp-hr. 
• 30 year life
7 
How are CO2 Emissions Reduced? 
1.8 
1.6 
1.4 
1.2 
1 
0.8 
0.6 
0.4 
0.2 
0 
lbs CO2/kWh 
non-base load gas plant 
bas...
8 
Compliance Options 
• Cogeneration 
• Applicant sponsored projects 
• Monetary Path 
• To date all facilities have chos...
9 
Monetary Pathway Economics 
• Price-based standard 
• Payment split in two 
– 80% purchases 
– 20% management 
• Select...
10 
Price Comparison 
$8.00 
$7.00 
$6.00 
$5.00 
$4.00 
$3.00 
$2.00 
$1.00 
$0.00 
Average Market Price 
Average OR Pric...
11 
Key Monetary Path Features 
• Eligible GHGs- CO2, CH4, N2O 
• Timeliness- 2 years to commit 60% 
• New- offsets are an...
12 
ABOUT THE CLIMATE TRUST
13 
TCT at a glance 
• Established 1997 
• Manage 7 acquisition programs 
• Focus on ag, forestry, and biogas projects (38...
14 
FACILITY OVERVIEW
15 
Facility Statistics 
• 13 monetary payments in 15 years 
• 8 facilities 
– 6 gas-fired plants, 3,069 MW 
– 2 gas stora...
16 
Facility Carbon 
Purchase 
Current 
Obligated 
Current 
Available 
Offsets 
Contracted 
Offsets 
Retired 
KCP (PPM) $9...
17 
PROJECT SELECTION + 
OVERVIEW
18 
FUNDING 
• Facility & TCT sign offset MoU and TCT receives S&C funds 
• Construction Begins 
• Offset Funds Sent to TC...
20 
Program Considerations 
• How does the standard drive project 
selection? 
– Fixed S&C Budget of 5% 
– New offsets onl...
21 
Selection & Contracting Budget 
• Budget comparable to mature 
markets + spot transactions 
• But new market + forward...
22 
The Oregon Clock 
• Projects can take years 
– Offsets latter in 
development stage 
• Funding requirement > 
availabi...
23 
What does this mean for project selection? 
• What matters: 
– Size 
– Reliability 
– Replicability
24 
Projects Summary 
• Totals= 26 projects, $12.8MM, 
2.97MM offsets
25 
Oregon Project Summary 
•17 commitments 
•7 active, 7 complete, 3 terminated 
•Total Obligation= $6,534,572 
•Avg. $4....
Oregon Projects 
Project Name Status 
Contracted 
Offsets 
Retired 
Offsets 
Shorepower Truckstops Active 90,000 0 
Oregon...
27 
Non-Oregon Project Summary 
•16 commitments 
•9 active, 3 complete, 4 terminated 
•Total= $6,271,226 
•Avg. $3.93/offs...
Non-Oregon Projects 
Project Name Status Location 
Contracted 
Offsets 
Retired 
Offsets 
Jatun Sacha Reforestaion Active ...
29 
Example 1: Cool Concrete Projects 
• Large volume 
– Phase I= 212,500; 
– Phase II=156,000 
• Reliable Partner 
– Hors...
30 
Example 2: Van Warmerdam 
• Proven track record 
– Over-delivered in WA 
• Replicability 
– 5 projects with 
principal...
31 
Why non-Oregon Projects? 
• Partially driven by CO2 Standard 
criterion 
• Strong counterparty/ project 
– Benefit/les...
32 
PERFORMANCE METRICS
33 
Performance Criteria 
Timeliness 
Financial 
Oregon Impact 
Climate Impact
34 
Timeliness Performance
35 
Financial Performance 
• Current obligation 
rate 53% 
• $5MM in upfront 
funds 
• Unrecouped funding 
– 3.9%
36 
The Made in Oregon Impact 
• $6.5MM 
– $2.1MM for CH4 
projects 
• 635,321 VERs Retired
37 
OR Program Climate Impact 
• 2.9MM under contract 
• 1,376,379 VERs retired 
• Equivalent to annual GHGs: 
– Lane Coun...
38 
Lessons Learned
39 
Lessons Learned 
• Financial certainty 
– Facilities can factor rate 
into construction costs 
– $0.80/year for avg ho...
40 
Thank you! 
Sheldon Zakreski 
Director of Programs 
szakreski@climatetrust.org 
(503)238-1915 x215
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Five Year Report Presentation to Oregon Energy Facility Siting Council

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The Climate Trust, a mission-driven nonprofit that specializes in climate solutions, delivered a presentation on the findings of their five year performance report to the Oregon Energy Facility Siting Council (EFSC); the body responsible for overseeing The Trust’s activities on behalf of regulated energy facilities. In addition to performance metrics, the report provides insight into policy and carbon market trends that impact the work of The Trust, and offers lessons learned from years of managing this carbon price based standard.

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Five Year Report Presentation to Oregon Energy Facility Siting Council

  1. 1. Oregon CO2 Standard Third Five Year Report to EFSC Sheldon Zakreski November 21, 2014
  2. 2. 2 Outline • Purpose of the Report • About the CO2 Standard • About TCT • Facility Overview • Project Selection + Overview • TCT’s Performance • Lessons Learned
  3. 3. 3 PURPOSE OF THE REPORT
  4. 4. 4 Qualified Organization Mandate • ORS 469.503(d)(C) • QO must submit a report every 5 years to EFSC on its performance • EFSC can make recommendations to Legislature
  5. 5. 5 THE OREGON CO2 STANDARD
  6. 6. 6 What is the OR CO2 Standard? • Applies to new plants – 0.675 lbs. CO2/kWh – 0.504 lbs. CO2/hp-hr. • 30 year life
  7. 7. 7 How are CO2 Emissions Reduced? 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 lbs CO2/kWh non-base load gas plant baseload gas plant OR CO2 Standard Standard exceeds Best Available Control Technology
  8. 8. 8 Compliance Options • Cogeneration • Applicant sponsored projects • Monetary Path • To date all facilities have chosen the monetary path under the Standard
  9. 9. 9 Monetary Pathway Economics • Price-based standard • Payment split in two – 80% purchases – 20% management • Selection & Contracting – Additional 5% (equiv $0.07) • Front-loaded – Carty equiv $0.000075/kWh over 30 years Offset Purchase Funds Offset Management Funds $1.12 $0.28
  10. 10. 10 Price Comparison $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Average Market Price Average OR Price Monetary Rate
  11. 11. 11 Key Monetary Path Features • Eligible GHGs- CO2, CH4, N2O • Timeliness- 2 years to commit 60% • New- offsets are an action that will occur (verification) – earliest vintage = year of construction – Carty- offsets 2014 vintage and later
  12. 12. 12 ABOUT THE CLIMATE TRUST
  13. 13. 13 TCT at a glance • Established 1997 • Manage 7 acquisition programs • Focus on ag, forestry, and biogas projects (38 total) • Several firsts- nutrient management offset purchase
  14. 14. 14 FACILITY OVERVIEW
  15. 15. 15 Facility Statistics • 13 monetary payments in 15 years • 8 facilities – 6 gas-fired plants, 3,069 MW – 2 gas storage facilities • Over $30MM in payments – 80% for purchase/20% for management
  16. 16. 16 Facility Carbon Purchase Current Obligated Current Available Offsets Contracted Offsets Retired KCP (PPM) $958,158 $841,749 $116,409 401,143 86,354 Coyote Springs Unit 2 $2,114,477 $1,448,193 $666,284 464,702 439,731 Klamath Expansion $209,182 $136,590 $72,592 22,090 13,123 Project Mist Facility $18,853.45 $17,023.45 $1,830 3,068 1,147 Hermiston Power Project $3,375,008 $2,336,395 $1,038,613 615,671 455,967 Hermiston True-Up $347,313 $335,856.59 $11,456 82,706 76,918 Port Westward $4,320,452 $3,240,280 $1,080,172 750,973 188,693 Klamath Generation $847 $847 $0 285 285 Peakers Klamath True-Up $400,462 $347,647 $52,815 60,567 33,851 Molalla $26,913 $23,357 $3,556 4,092 2,303 KCP (Iberdrola) $2,649,222 $223,500 $2,425,722 70,904 55,023 Port Westward 2 $3,532,388 $2,661,760 $870,628 340,721 22,984 Carty $6,332,879 $1,192,600 $5,140,279 149,000 Total $24,286,154 $12,805,798 $11,480,356 2,965,922 1,376,379
  17. 17. 17 PROJECT SELECTION + OVERVIEW
  18. 18. 18 FUNDING • Facility & TCT sign offset MoU and TCT receives S&C funds • Construction Begins • Offset Funds Sent to TCT DEVELOP-MENT • TCT solicits offset projects • Transaction terms are negotiated • TCT conducts due diligence on counterparty and on project CONTRACT-ING • TCT presents project to Programs Committee • If approved, contract negotiations begin (ERPA) • ERPA presented to the Board of Directors and executed if approved DELIVERY • Project monitored • Offsets verified by third party • TCT retires verified offsets
  19. 19. 20 Program Considerations • How does the standard drive project selection? – Fixed S&C Budget of 5% – New offsets only – Two year commitment clock
  20. 20. 21 Selection & Contracting Budget • Budget comparable to mature markets + spot transactions • But new market + forward transactions • S&C- not easily recovered • Implication- – narrow project types + maximize volume
  21. 21. 22 The Oregon Clock • Projects can take years – Offsets latter in development stage • Funding requirement > availability • Implication – Maximize search area
  22. 22. 23 What does this mean for project selection? • What matters: – Size – Reliability – Replicability
  23. 23. 24 Projects Summary • Totals= 26 projects, $12.8MM, 2.97MM offsets
  24. 24. 25 Oregon Project Summary •17 commitments •7 active, 7 complete, 3 terminated •Total Obligation= $6,534,572 •Avg. $4.82/offset
  25. 25. Oregon Projects Project Name Status Contracted Offsets Retired Offsets Shorepower Truckstops Active 90,000 0 Oregon State University Cogeneration Active 338,790 44,342 Roseburg LFG Active 66,000 0 JC Biomethane Active 70,000 0 Farm Power Misty Meadow Active 1,124 0 Farm Power Tillamook Active 7,300 0 TMF Biofuels Active 162,000 0 CarpoolMatchNW Completed 30,000 1,021 BEF Wind Financing Completed 23,178 23,178 Portland Energy Efficiency Completed 240,172 242,408 Portland Traffic Signals Optimization Completed 150,600 157,488 Blue Heron Energy Efficiency Completed 191,232 133,533 Portland Energy Efficiency Momentum Completed 66,666 33,333 Portland Traffic Signals Extension Completed 18 18 Deschutes Reforestation Terminated 233,333 0 Collins Pine Terminated 27,785 0 Biotactics Terminated 12,750 0
  26. 26. 27 Non-Oregon Project Summary •16 commitments •9 active, 3 complete, 4 terminated •Total= $6,271,226 •Avg. $3.93/offset
  27. 27. Non-Oregon Projects Project Name Status Location Contracted Offsets Retired Offsets Jatun Sacha Reforestaion Active Ecuador 58,890 52,573 JCI Duluth Steam Plant Retrofit Active Minnesota 210,328 0 John Galt Biogas Van Warmerdam Active California 12,000 0 Camco Afognak Forestry Active Alaska 386,007 233,507 ECC Composting Portfolio Active CO, DE, NV 240,812 37,314 Delta Nutrient Management Active Midwest 30,675 2 WA Beef LLC Organic Digestion Active Washington 75,000 0 AMC Katahdin IMF Active Maine 25,645 25,645 Lummi Sequestration Active Washington 263,159 0 Horst Blended-Cement Completed Nationwide 212,500 212,500 Cedar Grove OWC Completed Washington 33,910 23,018 West Main Cool Climate Concrete Completed Nationwide 300,000 156,499 Klickitat LFG Terminated Washington 342,000 0 Native Energy Terminated Iowa 135,165 0 Sure Power I Terminated Nationwide 800,000 0 CERF/IIEC Terminated Nationwide 350,000 0
  28. 28. 29 Example 1: Cool Concrete Projects • Large volume – Phase I= 212,500; – Phase II=156,000 • Reliable Partner – Horst led to West Main
  29. 29. 30 Example 2: Van Warmerdam • Proven track record – Over-delivered in WA • Replicability – 5 projects with principal – 2 in Oregon (Misty Meadow + Tillamook)
  30. 30. 31 Why non-Oregon Projects? • Partially driven by CO2 Standard criterion • Strong counterparty/ project – Benefit/lessons for Oregon • Project availability
  31. 31. 32 PERFORMANCE METRICS
  32. 32. 33 Performance Criteria Timeliness Financial Oregon Impact Climate Impact
  33. 33. 34 Timeliness Performance
  34. 34. 35 Financial Performance • Current obligation rate 53% • $5MM in upfront funds • Unrecouped funding – 3.9%
  35. 35. 36 The Made in Oregon Impact • $6.5MM – $2.1MM for CH4 projects • 635,321 VERs Retired
  36. 36. 37 OR Program Climate Impact • 2.9MM under contract • 1,376,379 VERs retired • Equivalent to annual GHGs: – Lane County vehicles – All homes in Salem and Gresham
  37. 37. 38 Lessons Learned
  38. 38. 39 Lessons Learned • Financial certainty – Facilities can factor rate into construction costs – $0.80/year for avg house • Qualified Org Advantage • Econ Development tool Construction FP Tillamook
  39. 39. 40 Thank you! Sheldon Zakreski Director of Programs szakreski@climatetrust.org (503)238-1915 x215

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