TECHNICAL SUPPORT DOCUMENT FOR
ELECTRICITY PURCHASES: PROPOSED RULE
FOR MANDATORY REPORTING OF
GREENHOUSE GASES
Office of Air and Radiation
U.S. Environmental Protection Agency
July 30, 2008
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CONTENTS
1. Source Description 3
2. Total Emissions (Based on Inventory) 3
3. Review of Existing Programs and Methodologies 4
4. Type of Emissions Information to be Reported 4
5. Options for Reporting Threshold 4
6. Options for Monitoring Methods 5
6.1. Monitoring Methods for Option 1 5
6.2. Monitoring Methods for Option 2 6
6.2. Monitoring Methods for Option 3 6
7. Options for Estimating Missing Data 7
8. QA/QC Requirements 7
9. References 7
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1. Source Description
The electric utility sector is the largest emitter of GHG emissions in the United States.
The level of GHG emissions associated with electricity use is determined not just by the
fuel and combustion technology onsite at the power plant, but also by customer demand
for electricity. Accordingly, electricity use and the efficiency of this use at industrial
facilities indirectly affect the emissions of CO2, CH4 and N2O from the combustion of
fossil fuel at electric generating stations.
For many industrial facilities, purchased electricity represents a large part of onsite
energy consumption, and their overall GHG emissions footprint when taking into account
the indirect emissions from fossil fuel combusted for the electricity generated. Therefore,
the reporting of electricity purchase data from industrial facilities can provide a better
understanding of energy usage in the economy and the major industry sector.
The collection of electricity purchase data would benefit a wide variety of future
complementary GHG program design decisions. In many energy intensive sectors
production metrics, such as electricity usage, are used to help verify reported emissions
data. Including purchased electricity from these sources provides more accurate
production intensity data, especially from industries where electricity and fuel use are
equally critical. Data from purchased electricity can be critical in designing performance
benchmarks for these energy intensive sectors and could be used to set minimum or
incentive-based performance standards for various energy-intensive industries. In
addition, many large electricity consumers such as data centers or large commercial
buildings may not be included in a GHG mandatory reporting program if purchased
electricity data are not included. Requiring these companies to report either purchased
electricity or the GHG emissions attributed to their electricity purchases would encourage
energy efficiency and reduce GHG emissions.
The inclusion of indirect GHG emissions (i.e., emissions from the purchase of electricity)
would be consistent with the direction of current state-level GHG mandatory and
voluntary reporting programs, such as the California Air Resources Board (CARB), The
Climate Registry, and the long history of corporate voluntary reporting, and would help
maintain the consistency and scope of corporate GHG emissions data over time.
2. Total Emissions (Based on Inventory)
National emissions from the generation of electricity from fossil fuels (U.S EPA 2008)
totaled 2,328 million metric tons of CO2e (MMTCO2e) in 2006. Electricity-related
emissions are largest in the residential sector (843 MMTCO2e) and commercial sectors
(810 MMTCO2e), followed by the industrial sector (658 MMTCO2e), agriculture sector
(62 MMTCO2e), and the transportation sector (5 MMTCO2e).
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3. Review of Existing Programs and Methodologies
Most reporting programs require reporting of indirect emissions and are based on the
GHG protocol established by the World Resources Institute and World Business Council
for Sustainable Development (WRI/WBCSD). Data on electricity purchases and use are
typically readily available to large companies.
• EPA Climate Leaders/The Climate Registry/California Climate Action
Registry programs all use EPA Emissions & Generation Resource Integrated
Database (eGRID) data to calculate GHG emissions from electricity use.
Transmission and Distribution (T&D) losses are assigned to T&D companies.
• The Department of Energy (DOE) 1605(b) Voluntary Reporting of
Greenhouse Gas Emissions Program uses state-based Energy Information
Administration (EIA) factors that include T&D losses to calculate GHG
emissions from electricity use.
• The United Kingdom's Carbon Reduction Commitment (CRC) program uses
a single national grid emission factor for all
4. Type of Emissions Information to be Reported
Considering the design of current GHG emissions reporting programs with respect to
electricity data and indirect emissions, the following information could be reported:
• Facility-level electricity purchased data in standard units, such as kilowatt
hour (kWh), and/or
• Facility-level indirect emissions calculated from the electricity purchased
data, in units of MMTCC^e. This data could be calculated using collected
electricity purchased data and standard emission factors.
5. Options for Reporting Threshold
The following options were considered for the reporting of indirect emissions from the
purchase of electricity:
• Option 1: Do not require the reporting of indirect emissions from any facility.
• Option 2: Require reporting on electricity purchases (kWh) only from those
facilities that will already be required to report GHG emissions data.
Although indirect emissions data would not be directly reported, this option
would enable indirect emissions for facilities to be calculated. This option
would be the least burdensome to reporting facilities since the data are easily
available to reporters. No additional facilities would be impacted with this
option.
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• Option 3: Require reporting of indirect emissions from all facilities where
annual facility CCVequivalent emissions from electricity purchases combined
with the emissions from the facility's direct emission sources exceed one of
the following thresholds:
o
o
o
o
100,000 tons CCVequivalent facility emissions
(approximately 250 facilities affected)
25,000 tons CO2-equivalent facility emissions
(approximately 5,000 facilities affected)
10,000 tons CCVequivalent facility emissions
(approximately 15,000 facilities affected)
1,000 tons CO2-equivalent facility emissions
(approximately 185,000 facilities affected)
The number of affected facilities for Option 3 above includes both industrial and non-
industrial facilities that would be subject to report indirect emissions from electricity
purchases.
The analysis in Table 1 below is a preliminary screening to gauge the magnitude of the
impacts for industrial facilities, which was developed to support how many additional
facilities would be impacted by the requirements of Option 3. These calculations include
emissions from electricity purchases only. The information provided in Table 1 was
gathered from the Department of Energy, Energy Information Administration, Office of
Energy Markets and End Use, Energy Consumption Division, Form EIA-846, "2002
Manufacturing Energy Consumption Survey", and Office of Oil and Gas, Petroleum
Supply Division, Form EIA-810, "Monthly Refinery Report" for 2002, and the Bureau of
the Census, data files for the "2002 Economic Census, Manufacturing - Industry Series."
Table 1. Preliminary Screening of Impacts for Industrial Sectors
Source
Category
All
Manufact
uring
Industries
Emissions
Level
mtCO2e
> 1,000
>10,000
>25,000
>100,000
Total
National
Emissions
MMT
CO2e
586.6
586.6
586.6
586.6
Total National
Establishments
Number
350,828
350,828
350,828
350,828
Emissions
Covered
MMT
CO2e
526.5
343.6
232.6
46.7
Percent
90%
59%
40%
8%
Establishments
Covered
Number
61,605
11,433
4,981
251
Percent
18%
3%
1%
0%
6. Options for Monitoring Methods
The following monitoring methods are provided for each of the possible reporting
threshold options.
6.1. Monitoring Methods for Option 1
There are no monitoring requirements for Option 1.
5
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6.2. Monitoring Methods for Option 2
No calculations would be required for reporting, as facilities would report only total
electricity purchased data in standard units (i.e., kWh).
The monitoring method for this option would involve the facility-level summation of
electricity purchased data on an annual basis. The total facility electrical purchased data
would be based on electricity supplier receipts or records, and/or facility meter data.
Several steps of this method would be necessary:
1) Each facility would need to internally develop the methodology and
monitoring plan for collecting total electricity purchase data.
2) Facility managers would be required to collect data on electricity purchased
for all buildings and operations located at the facility annually.
3) Each facility would be required to conduct quality assurance and quality
control of the electricity purchase information and any supplier's information.
This procedure would be conducted annually.
These required activities would involve labor hours for industrial managers, industrial
engineers/technicians, administrative support, and lawyers. There is no capital cost
involved in this monitoring method.
6.2. Monitoring Methods for Option 3
The monitoring methods for this option are the same as provided above for Option 2.
However, in addition to the monitoring methods of Option 2, facilities would have to
calculate their indirect emissions from electricity usage. Indirect emissions are calculated
using default emission factors for mass of CO2, CH4 and N2O per MWh of electricity use.
Default emission factors are based on average emission rates that best represent the
electricity actually purchased. The U.S. Environmental Protection Agency's Emissions
& Generation Resource Integrated Database (eGRID) provides default emission rates in
varying level of detail including by generating company, states, North American Electric
Reliability Council (NERC) regions, and U.S. average.
Calculations of indirect emissions follows the equation:
Eco2e = 2(EF; * Electricity Purchases)
Where:
Eco2 = Emissions of CO2
EF; = Emissions factor for CO2, CFLt or N2O
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7. Options for Estimating Missing Data
It is assumed that a facility will likely be able to supply facility-level electricity
purchases. However, in the event that electricity purchase data are missing the facility
would estimate its electricity usage for the missing data period based on historical data
(i.e., previous electricity purchase records). If a facility is using electric meter data and
has a missing data period, the facility would estimate purchased electricity based on
electricity provider records and historical meter data. Any historical data used to estimate
missing data should represent similar circumstances to the period over which data are
missing (e.g., seasonal).
8. QA/QC Requirements
Facilities should conduct quality assurance and quality control (QA/QC) for electricity
supplier receipts or records, and/or facility meter data. Facilities are encouraged to
prepare an in-depth quality assurance and quality control plan which would include
checks on electricity purchases data, and calculations performed. Some examples of
specific QA/QC procedures to include in a QA/QC plan are:
• Check for temporal consistency in purchased electricity data,
• Determine the "reasonableness" of the data estimate by comparing it to
previous year's estimates,
• Maintain data documentation, including comprehensive documentation of data
received through personal communication, and
• Compare supplier provided electricity purchases data versus internal meter
data.
9. References
IPCC (2006) 2006IPCC Guidelines for National Greenhouse Gas Inventories. The
National Greenhouse Gas Inventories Programme, The Intergovernmental Panel on
Climate Change, H.S. Eggleston, L. Buenida, K. Miwa, T Ngara, and K. Tanabe (eds.).
Hayama, Kanagawa, Japan.
U.S. EPA (2008) Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2006.
U.S. Environmental Protection Agency, Washington D.C. USEPA #430-R-08-005.
The Greenhouse Gas Protocol, Corporate Accounting and Reporting Standard, Revised
Edition, World Resources Institute and World Business Council for Sustainable
Development.
EPA Climate Leaders Greenhouse Gas Inventory Protocol Core Module Guidance,
Indirect Emissions from Purchases/Sales of Electricity and Steam.
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