*825 NE Multnomah, Suite 2000*

#  Portland, Oregon 97232

*(503) 813-5000*

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Mark Freidrichs, PI-40

Office of Policy and International Affairs

U.S. Department of Energy, Room 1E190

1000 Independence Avenue, SW

Washington, DC 20585

Dear Mr. Freidrichs:

PacifiCorp is an investor-owned utility that serves over 1.5 million
customer accounts in 6 states: California, Oregon, Washington, Idaho,
Wyoming and Utah. We own 8,300 MW of generation, including plants fueled
by coal, natural gas, hydropower, wind and geothermal.

We believe the proposed General Guidelines to Section 1605(b) of the
Energy Policy Act of 1992 (hereafter referred to as "1605(b)") are a
step in the right direction. In general, the revisions clarify
methodologies for defining project-related offsets; encourage broader,
entity-level reporting; and encourages verification of reporting to
ensure credibility and quality.

We recommend U.S. DOE reconsider several elements of the proposed
revisions:

1.  **Inclusion of international projects**. We strongly recommend that
    U.S. DOE include international projects for reporting eligibility.
    Overseas projects have proven to be effective in reducing emissions,
    developing overseas capabilities in project management, and
    providing substantial co-benefits for local populations. Just as
    important, there are numerous examples of projects that are subject
    to rigorous monitoring and verification process focusing on leakage,
    additionality and double-counting. For example, we have invested in
    forest protection and afforestation projects in Bolivia and Belize.
    These award-winning efforts have undergone state-of-the-art review
    by third parties to ensure the associated emissions are real. U.S.
    Initiative on Joint Implementation, in which the U.S. Department of
    Energy has played an important role, has even approved many of these
    projects. We support recognition of these projects and the continued
    development of innovative approaches to project design, monitoring,
    and verification.

2.  **Consistency in definition of "entity".** We suggest that the
    definition of "entity" ensures consistency in reporting. The current
    proposal provides significant leeway in drawing boundaries around
    operations to be covered in annual reports. Such leeway can lead to
    inappropriate data comparisons across different reporting entities,
    in which one entity may include, for example, all operations in the
    U.S., while another can may not. Specifically, entities that choose
    note to report partially owned facilities in their reporting may
    under-report their total emissions compared to an entity that
    chooses to include their partial ownership share of facilities.
    Considering that the data may be used by individuals to compare
    potential future liabilities associated with greenhouse gas
    regulations, we believe that allowing such discretion could penalize
    those entities that try to provide data that is as comprehensive as
    possible.

3.  **Owned versus operated facilities.** We support a policy that
    requires reporting entities to specify whether they are reporting
    emissions from facilities that are owned or those they operate. Such
    disclosure will promote more accurate comparability across entities
    and therefore will provide a more accurate picture of emissions
    trends to the public.

4.  **Disclosure of verification status.** We suggest that the revisions
    require disclosure on whether the reported data has been verified or
    not. This requirement will inform the public about the credibility
    of the data submitted and posted, will reward those entities that
    choose to verify their data, and yet still allow for flexibility by
    not requiring all reporting entities to submit their data for
    verification. Such flexibility is warranted due to the potential
    cost of third-party verification, particularly for smaller entities
    that may have complicated operations. Further, we believe that the
    proposed revisions' encouragement of verification is warranted so
    that entities understand the importance of verification in case they
    wish to assert early action credits in case the federal government
    or state governments choose to institute greenhouse gas regulations
    in the future.

5.  **Absolute and intensity metrics.** We encourage U.S. DOE to require
    two metrics for reporting: intensity and absolute emissions.
    Intensity is essential for understanding how, for example, utilities
    are faring in blending low-emission resources in their mix. Sole
    reliance on absolute metrics can mask substantial efforts to acquire
    renewable energy, since increasing demand for power can offset the
    reductions associated with renewables. Reporting absolute emissions
    satisfies the need for the public to understand emissions trends
    among entities. Further, it is more consistent with emerging global
    regulations governing greenhouse gas emissions, for example in
    Europe. Considering that greenhouse gas emissions have global
    implications, global comparability in emissions appears to be
    warranted.

6.  **Additionality for project-level reporting.** We recommend strong
    guidance on determining additionality for project-based emissions
    reporting. Such guidance will ensure credibility of "early action"
    reductions associated with project investments. It will also promote
    comparability among entities claiming project-related offsets.
    Finally, it will provide clarity to a burgeoning offsets market
    currently plagued by different interpretations of additionality and
    therefore sending inconsistent signals to the public on the value
    and cost of greenhouse gas reduction efforts. More universal
    standards will therefore help reveal a better cost of greenhouse gas
    reductions that is essential for policymakers to understand as they
    debate different responses to emissions trends.

7.  **Definition of de minimis.** We recommend U.S. DOE base its de
    minimis definition on percentage of overall entity emissions, rather
    than on an absolute tonnage figure. Defining de minimis based on
    percentage most accurately captures the intent of de minimis, which
    should be to allow exclusion of a certain share of overall emissions
    from reporting in order to minimize reporting burdens. The GHG
    Protocol, developed by a wide variety of stakeholders including
    electric utilities, exempts 5% of entity-wide emissions from
    reporting. This approach cleans up the current proposed revisions
    that includes an example of an entity not reporting 10% of its total
    emissions due to the impracticability of estimating such emissions,
    but noting this exclusion in its report. In spite of the note, the
    example opens up further inconsistency in reporting in a valid
    effort to minimize reporting burden.

8.  **Inclusion of biological sequestration including protection.** We
    strongly support inclusion of biological sequestration projects
    based on protection of existing resources within 1605(b). Such
    projects can provide real and measurable emissions reductions
    benefits, as our experiences with forestry projects in Bolivia and
    Belize have amply demonstrated. Further, these projects also provide
    substantial co-benefits to local communities and to global
    biological diversity. Inclusion of such projects will promote
    financial opportunities based on greenhouse reduction benefits,
    thereby improving the economics of biological protection projects in
    the U.S. and overseas.

9.  **Recognition of contracts.** We strongly support the program's
    recognition of contracts in determining which entity holds the
    emissions reduction benefits of a project. In particular, markets
    for renewable energy are developing in part by the desire of end-use
    customers to benefit from the low-emissions properties of
    renewables. Restricting the reporting of such benefits to the equity
    holder of the project would fundamentally contradict the reality
    that such projects would never become reality without a willing
    buyer that ultimately receives the product of the renewable energy
    project. The GHG Protocol's approach is to recognize the generator's
    role in its "Scope 1" reporting and the end-user through "Scope 2"
    reporting for indirect emissions.

10. **Eligible measures for emission intensity reductions.** We believe
    there should be greater clarity in the definitions of acceptable
    reduction in intensity. Namely, the proposed revisions allow for the
    reporting of intensity reductions as long as "acquisitions,
    divestures \[sic\], or changes in products have not contributed
    significantly to the reductions." In the power sector, utilities can
    choose to receive power through owned generation or through
    power-purchase agreements (PPAs). We believe that the revisions
    should not bias utilities to choose one of these paths over another,
    particularly since both paths typically involve the utility making a
    substantial commitment to a resource or set of resources for its
    customers.

11. **Eligible measures for absolute emissions reductions.** We also
    believe that there should be greater clarity in the definitions of
    acceptable reduction in absolute emissions. The proposed revisions
    allow for reporting of absolute reductions in emissions provided
    that the reduction was "not caused by declines in \[the entity's\]
    U.S. output." This approach would effectively eliminate reductions
    associated with energy efficiency efforts, which are a primary tool
    for providing reliable customer service and also to reduce emissions
    associated with many supply-side options. We support recognition of
    energy efficiency efforts in emissions reporting programs.

12. **Credit for energy efficiency measures.** We recommend greater
    clarity on defining what entity is "primarily responsible" for
    reductions associated with, among other measures, reductions in
    energy use. Many energy efficiency projects entail one entity
    financing measures that are housed by another entity---for example,
    improvements in an aluminum plant's efficiency due to investments
    made by an electric utility. We believe that the credit for such
    action should lie at least in part, if not entirely, with the
    investor who covered the up-front increment cost of the project.

We appreciate the opportunity to comment.

Sincerely,

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Bill Edmonds

Director, Environmental Policy