Other Allocation

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Overview

In addition to allocating to industrial facilities,  electrical distribution utilities, and natural gas suppliers, CARB allocates allowances to several other types of facilities.  These sectors, whose allocations focus on transition assistance and ratepayer protection, consist of:

  • Legacy contract generators
  • Universities and public service facilities
  • Public wholesale water agencies
  • Waste-to-energy facilities

Legacy Contract Generators

CARB allocates allowances annually to eligible facilities that generate electricity or thermal output under legacy contracts to provide transition assistance for the Cap-and-Trade Program costs that are not recovered through these contracts.  These facilities are known as legacy contract generators.  Legacy contracts are contracts that (1) were executed prior to September 1, 2006, (2) govern the sale of electricity or thermal output, and (3) do not provide for the seller to recover Cap-and-Trade Program costs.  Assembly Bill 32, the legislation authorizing the Cap-and-Trade Program, was adopted September 1, 2006.

Pursuant to Cap-and-Trade Regulation sections 95871(f) and 95894, legacy contract generators that wish to apply for this assistance for the subsequent vintage year must submit the required information to CARB no later than June 1 of the calendar year immediately preceding the vintage year.  The Legacy Contract Transition Assistance Application Form may be used for this purpose.  This form is provided for clarity and convenience and does not supersede any law or regulation.

Universities and Public Service Facilities

CARB allocates allowances annually to universities and public service facilities for transition assistance and to recognize their early actions to reduce GHG emissions.  Universities and public service facilities are eligible for allowance allocation if they meet the definitions in section 95802(a) and the requirements of sections 95871(e) and 95890(d) of the Cap-and-Trade Regulation.

Universities and public service facilities must each submit a report to CARB by June 30 each year describing both the disposition of any allowance value from the previous budget year's allocated allowances and how the allowance value was used to achieve additional environmental and economic benefits for California.  The University and Public Service Facility Use of Allocated Allowance Value Form may be used for this purpose.  This form is provided for clarity and convenience and does not supersede any law or regulation. 

Public Wholesale Water Agencies

CARB allocates allowances annually to public wholesale water agencies for the protection of water ratepayers pursuant to section 95871(c)(2) of the Cap-and-Trade Regulation.  Section 95895 of the Cap-and-Trade Regulation specifies the level of allocation to public wholesale water agencies for each year.

Waste-to-Energy Facilities

CARB will allocate allowances annually to waste-to-energy facilities through the vintage 2024 budget year for transition assistance pursuant to section 95871(i) of the Cap-and-Trade Regulation. Section 95891(f) specifies the method for calculating annual allocation to waste-to-energy facilities. Waste-to-energy facilities were exempt from a Cap-and-Trade Program compliance obligation during the period 2013-2017.

Limited Exemption of Emissions Associated with Qualified Thermal Output

Certain facilities may have a limited exemption of emissions from a Cap-and-Trade Program compliance obligation if they meet the requirements of section 95852(j) of the Cap-and-Trade Regulation. Two types of facilities may be eligible:

  1. Facilities with cogeneration units that would not exceed the Cap-and-Trade Program inclusion threshold (25,000 metric tons of CO2e per year) but for their electricity produced on-site by cogeneration; and
  2. District heating facilities that serve multiple end users, none of which would exceed the Cap-and-Trade Program inclusion threshold (25,000 metric tons of CO2e per year) if they produced the same amount of emissions that the district heating facility produces in the process of serving that end user.

To receive the limited exemption, a facility must meet the eligibility requirements and have submitted an application with the required information to CARB by September 2, 2020, and CARB must have approved the submitted information and confirmed eligibility for the facility.