HomeMy WebLinkAbout16 Monetize LCFS Credits_020222 (2)Monetization of Current Low Carbon
Fuel Standard (LCFS) Credits
Background
-Registered with CARB in 2017 as an electric “Load Serving Entity” & fuel “pathways” within LCFS program.
-LCFS credits earned for electricity sold to fuel transportation equipment.
-The District generates LCFS credits quarterly from two sources:
Base Credits:
CARB estimates non-metered EV charging in District territory using DMV
registration data in Truckee.
Pathway Credits:Credits received from directly metered electricity used for EV charging (District
owned public charging stations)
Fuel Pathways: A Low Carbon energy source used to fuel transportation vehicles in place
of traditional fossil fuels. For the District this is electricity.
LCFS Program:A Cap and Trade framework which assigns value to avoided CO2
emissions from traditional high carbon fuels in the transportation sector.
LCFS Credits: Unit of trade within the LCFS program. One credit represents one ton of
avoided CO2 emissions.
Important Terms
Current Balance and Forecasted Accruals
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Year Credits Received Credits Sold EOY Balance
2017 147 0 147
2018 196 0 343
2019 254 0 597
2020 171 0 768
2021 279 0 1,047
2022 277 1,047 277
2023 302 277 302
-Credits have continued to accrue since
2017
-No credits have been sold to date
-Forecast of 579 credits for ’22 to ’23
budget cycle
Current balance
Forecasted Accruals
LCFS Credit Valuation
-Market for LCFS credits is displaying
downward trend.
-Expected to continue declining as intention of
program accelerates the reduction of carbon
content in transportation fuels
-Current market value estimated to be $142
per credit.
LCFS Credits Value
Existing Credits 1,047 $148,674
Forecasted Credits (per Year)317 $44,962
Total for 2022-2023 Budget Cycle 1,364 $193,636
Spending Requirements
Funds received from LCFS Credit sales can be used to…
1)Provide incentives:
1)Support for purchasing/leasing EV’s or other
electrification transportation equipment.
2)direct investment for installing EV charging
infrastructure.
3)Encourage EV charging during off-peak hours to
provide grid benefits.
4)Promote the use of electric transportation.
2)Market, education, & outreach programs to provide
information and material it inform the public on the
benefits of EV transportation.
Category Description
Clean Fuel Reward
(CFR) Program
Small publically owned utilities (POUs)must
contribute a minimum of 2%of base credits to
the CFR beginning in 2023
Holdback Credit
Equity
Requirements
Starting January 1,2022 a minimum of 30%of the
credits not contributed to CFR must be used to
support transportation electrification for the
primary benefit of (or primarily serving)(1)
Disadvantaged communities,(2)Low-income
communities,(3)Low-income individuals,(4)
Rural area.The minimum percentage increases to
40%in 2023 and then finally to 50%in 2024 and
beyond.
Sales Process
-NCPA provides a service to its member utilities under the Market
Purchase Program which enables NCPA to buy and/or sell certain
commodities on behalf of its member utilities.
-TDPUD can allocate its existing LCFS credits to NCPA through the
LRT-CBTS (online tool) to sell on its behalf.
Important Dates
-NCPA is currently preparing to pool
together LCFS credits from its member
utilities to aggregate to a large enough
scale as to improve the potential sale
price.
-NCPA Sale expected to happen March 31st
Planned Usage of Proceeds
Measure Incentive Amount
(per)
Residential EV chargers (Base Charger)$500
Residential EV chargers (Smart Charger)$700
Commercial EV Chargers $2,000
Main Panel Upgrade (Residential)$1,000 (may increase)
-Staff have expanded rebate program targeting
transportation electrification
-Such programs are consistent with District
decarbonization goals
-Actively working with community partners to
identify potential transportation electrification
projects which will benefit disadvantaged members
of our community.
-Additional activities may include:
-Multilingual marketing, education, and
outreach regarding electric transportation
options and benefits
-Rebates towards purchase of new or used Evs
-Contributions towards electrification of local
public transit buses, school buses, or drayage
trucks.
Current Rebate Offerings
Fiscal Impact
-Sale will generate unbudgeted revenue of $148,674 for the initial sale
and an estimated $44,962 each year for the 2022/2023 budget cycle
for a combined total of $193,636
-Funds will be deposited in a restricted cash account (similar to AB32
auction sale proceeds)
-Staff have already developed programs which will meet CARB
requirements and worked the associated expenses into the budget for
the 2022-2023 budget cycle
-Indirectly, the District will see incremental increases in revenue due to
the load growth associated with transportation electrification.
Recommendation
A.Authorize the General Manager to execute an agreement (Attachment F) with Northern California Power Agency
(NCPA) to enter into NCPA’s Market Purchase Program.
B.Authorize the General Manager to sell District owned Low Carbon Fuel Standard (LCFS) credits in the LCFS market of
a quantity up to 1,100, which is estimated to result in unbudgeted revenue and restricted cash funds to the District
for year 2022 and annually thereafter