**Chris M. Hobson** 600 North 18^th^ Street

Senior Vice President Birmingham, AL 35203

Research and Tel 205.257.2812

Environmental Affairs Fax 205.257.7938

![](media/image1.png){width="2.0701388888888888in"
height="0.9791666666666666in"}

September 25, 2006

Stephen E. Calopedis

U.S. Department of Energy

Energy Information Administration

EI-81

1000 Independence Avenue, SW

Washington, DC 20585

**Re: [Energy Information Administration Agency Information Collection
Activities: Proposed Collection; Comment Request,]{.underline} 71 *Fed.
Reg. 42637-42639* (July 27, 2006)**

Dear Mr. Calopedis:

Southern Company respectfully submits the following comments in response
to the above-referenced notice and request for comment from the
Department of Energy (DOE). We appreciate the opportunity to submit
comments on the proposed revised form EIA-1605 and the associated
instructions, and request that they be made part of the public docket.

Southern Company has submitted reports using Form EIA-1605 every year
since the program's inception in 1995. For activities through 2005, we
have reported total project-based emissions reductions of 140 million
metric tons CO~2~ equivalent, which approaches a full year of CO~2~
emissions for Southern Company, one of the largest electricity
generators in the U.S. We have already submitted comments under previous
*Federal Register* notices related to the revision of both the General
and Technical Guidelines governing the program. As a result, we are very
familiar with the voluntary reporting program, its guidelines, and the
associated forms and instructions.

We commend EIA on their efforts to date in developing the new forms to
be used with the revised guidelines. We also commend DOE and EIA on
their significant efforts to date to obtain feedback on the revised
guidelines, forms and instructions. However, we note that all the
appendices referenced in the instructions have still not been made
available. We strongly urge EIA to make these appendices available for
public comment as early as possible. Some of these appendices are
critical for entities to begin making decisions on how they might
respond to the revised guidelines and to start collecting the voluminous
new data that are likely to be needed. EIA also has indicated that they
intend to develop some calculation tools for inventories and reductions.
We also urge EIA to seek feedback on these tools, even if only on an
informal basis. We are willing to work with EIA in reviewing such tools.
Finally, please note that Southern Company is interested in beta testing
the software for the forms when it is available.

With regard to the draft forms and instructions, we believe that there
are some specific areas where important changes in the forms and
instructions are still needed. In the comments below, we identify these
changes, categorized as general observations, specific substantive
comments, and technical corrections/minor edits. We also address the
time and resource burden for completing the forms.

Please note that we support the comments submitted by the Edison
Electric Institute (EEI) on the revised form EIA-1605 and the associated
instructions.

**GENERAL OBSERVATIONS**

*[Registering vs. Not Registering / "Just Reporting"
Reductions.]{.underline}* Despite the efforts of both DOE and EIA, there
is still a lot of confusion about exactly what is required to register
reductions, and what is required to "just report" reductions. Table 1
and Figure 1 of the draft Instructions (pages 7 and 8) are helpful as
far as they go, but greater detail is needed. Here are two major
examples:

-   Is continuous reporting required only if an entity is registering
    reductions, or is it required regardless of whether an entity is
    registering or "just reporting" their reductions?

-   Are the requirements for defining subentities different depending on
    whether the entity is registering or "just reporting" reductions?

We urge EIA to significantly expand Table 1 on page 7 of the
instructions and to do whatever else they can to clarify the differences
in requirements depending on whether an entity is registering or "just
reporting" reductions. One change that would help with this would be for
EIA to provide a schematic to go along with Table 1 and Figure 1 on
pages 7 and 8 of the instructions that would summarize what an entity
would need to do and complete in the forms to report only. This
schematic would provide a flow or description of the forms/pages that
would be completed and better explain the process and the required
information for just reporting.

A significant source of confusion in the current guidelines, forms, and
instructions is that the word "report" is used in the broadest sense of
an entity completing and submitting forms as well as in the narrower
sense of an entity that is not registering reductions. It is often
difficult to distinguish between the two uses of the word. A lot of
confusion could be eliminated if EIA would come up with and consistently
use a single term other than "report" for the narrower sense when an
entity is reporting but not registering reductions. While we would
suggest "not registering" as one option, there are probably other
alternatives that would work equally well.

> [*Registering* and *"Just Reporting" Reductions?*]{.underline} Another
> related question is whether an entity can *[both]{.underline}*
> register *[and]{.underline}* report reductions. Even if an entity
> meets all the requirements and registers reductions, it may want to
> document the details of project-specific actions that are subsumed in
> the registered entity-wide reductions. While the forms do seem to
> offer some opportunity to qualitatively document types of actions that
> are reflected in the entity-wide reductions, it is less clear whether
> a registrant can document the specific quantity of tons and the
> underlying methodology in determining that quantity for each action in
> a more detailed, structured manner. A clear mechanism for doing so
> would be valuable. One simple way to do this would be to allow
> entities to use the forms already provided in Addendum A for such
> individual actions. EIA could add a check box at the top of each form
> that would indicate whether the information on the form is intended
> for non-registration of reductions or to provide additional detail on
> actions subsumed within the registered reductions in the report.
> Allowing the schedules in Addendum A to be used in this manner would
> be beneficial to the entities providing the information as a means to
> document in greater detail what they have done *[and]{.underline}* to
> the public at large by providing greater transparency as to what
> individual entities have done. We strongly urge EIA to implement this
> approach.

We would also suggest several modifications that would make the entire
set of forms and instructions more user-friendly. These include:

-   *[Cross-referencing each subsection of forms to appropriate pages in
    the instructions and in the General and Technical
    Guidelines.]{.underline}* This would save a lot of time for users to
    get all the information on a particular element in front of them as
    they complete the forms. This would be particularly valuable in the
    first few years when entities are learning the new rules and
    reporting mechanisms.

-   *[When data values are transferred from one part of the form to
    another, including the specific form and line reference from which
    the value is transferred.]{.underline}* This is already done in some
    places, but is not done consistently throughout the form. In the
    electronic forms, it would also be helpful if all appropriate data
    automatically transferred from the point of original entry to all
    other places where it is needed. This would eliminate the potential
    for clerical errors in transferring the data, and reduce a bit of
    the time needed to complete the forms.

-   *[Providing a line and column reference letter/number for all items
    on all schedules.]{.underline}* This would make it much easier to
    incorporate the cross-referencing suggested above.

-   *[Allowing users to add as many lines as necessary in the electronic
    forms.]{.underline}* For large entities, the number of lines
    provided in the paper, draft forms will not be adequate for
    providing the required information.

**SPECIFICS**

*[Instructions Page 3.]{.underline}* The last paragraph indicates that
it is necessary to comply with §300.7 in order to register instructions,
but does not mention that compliance with §300.6 is also required.

**Schedule I Entity Information**

*[Forms Pages 6 & 13; Instructions Pages 14 & 26, Indirect
Emissions.]{.underline}* For electricity providers, how do you treat
electricity purchased and consumed if the provider has purchased the
electricity from itself (e.g., electricity used by Alabama Power in its
corporate offices that is purchased from Alabama Power)? It does not fit
the definition of indirect emissions, because this use affects its
***[own]{.underline}*** emissions, not the emissions of others. Since
any separate, explicit inclusion of these indirect emissions would be
double-counting the generation-related emissions within the entity
(which is strictly prohibited), it seems that emissions associated with
such use should not be separately inventoried. Is this correct?

*[Forms Pages 4; Instructions Pages 1, Section 1 Item 8c.]{.underline}*
The term "joint venture" is used, but is never defined. Some guidance is
needed on what criteria must be met for an activity to qualify as a
joint venture in the context of the 1605(b) program.

*[Forms Pages 6 -- 19, Section 2.]{.underline}* Supplemental
spreadsheet/tables for summing up all emissions by fuel source category
for each of the tables would be helpful. Perhaps this could be part of
the Calculations Tools that EIA has indicated they intend to develop.
Ratings for the various estimation methods, including forestry, should
be provided conveniently here in the tables as well.

*[Forms Pages 9 - 10; Instructions Pages 18 -- 22, Section 2, Part B,
Item 1c.]{.underline}* A line should be added specifically for sulfur
hexafluoride (SF~6~) from electricity generation, transmission, and
distribution. SF~6~ is currently shown only under industrial processes
and magnesium production. SF~6~ emissions are an important part of
reporting for the electric utility industry. An accompanying section
should be added to the instructions as well. Further, additions should
be made to both the forms and instructions for Schedule III to indicate
how this element is carried through.

**Schedule II Subentity Information**

There is still significant confusion among potential reporters with the
"subentity" concept. Taken together, the Guidelines, the instructions,
and the forms do not provide clear guidance on exactly what constitutes
a "subentity." The definition of "subentity" in §300.2 the General
Guidelines states,

> *"Subentity means a component of any entity, such as a discrete
> business line, facility, plant, vehicle fleet, or energy using system,
> which has associated with it emissions of greenhouse gases that can be
> distinguished from the emissions of all other components of the same
> entity; and, when summed with the emissions of all other subentities,
> equals the entity's total emissions."*

This definition, which is repeated almost verbatim in the instructions
on page 5, focuses on entity organizational and operational
characteristics as the key determination of what is a valid subentity.
It seems to indicate that all reporters have broad latitude in defining
their subentities, with the primary criteria being that the component is
"discrete" and that the emissions of the subentity can be
"distinguished" from other emissions.

However, the text on page 5 also includes the following additional
statement not found in the §300.2 definition in the General Guidelines:

> *"If you intend to use more than one method to calculate emission
> reductions you must divide your entity into two or more subentities,
> including the use of different output measures when using the changes
> in emissions intensity method."*

This text seems to take a totally different approach to determine a
valid subentity, one that focuses on emission reduction calculation
methodology as the key criterion. Further, text that occurs later in the
instructions (page 39) and corresponds to Section 1, item 2 on the forms
(page 26) focuses in on the methodological approach to the apparent
exclusion of the broader criteria in the first sentences. Specifically,
this portion of the form and instructions provides a check box for only
three reasons for delineating a subentity. Is it allowable to leave all
three boxes unchecked, implying that there are other reasons for
delineating the subentity? Or is the reporter only allowed to use one of
the three listed reasons, implying significantly narrow latitude in
defining subentities? Is a reporter allowed to have two or more
subentities that use the same method for calculating reductions, or that
use the same output measure under an emissions intensity approach? Is
the answer to these questions the same for large emitters registering
reductions, small emitters registering reductions, or any entity
reporting but not registering reductions?

We strongly urge EIA to provide greater clarity on what is and is not an
"allowable" subentity. Additional definition, information, and
clarification of the "subentity" and on the relationship of the
"subentity" and the "entity" are needed. Reporting options for
subentities should be further detailed in the Instructions. At a
minimum, an "Other" category should be added to Section 1 Item 2 for
subentities with an accompanying field for explaining the delineation.
Beyond that, however, there is a desperate need for significantly
greater explanation of the concept and how it is practicably
implemented. Addition of numerous examples would clearly help. And if
the criteria for what is an "allowable" subentity are different
depending on whether the reporter's size (over or under 10,000 tons) and
intent regarding registration of reductions, a table delineating the
differences would also extremely be helpful.

**Schedule III Entity-wide Reductions Summary**

*[Forms Pages 31 - 35; Instructions Pages 41 -- 46, Section 1 Part A and
Section 2 Part A.]{.underline}* It is not clear where SF~6~ reductions
fit on these two forms. Can SF~6~ emission reductions be reported under
Item I, Transmission and Distribution Improvements? If not, where are
these reductions reported? Additions should be made to both the forms
and instructions for Schedule III to indicate how this element is
carried through Sections 1 and 2 as appropriate.

**Schedule IV Verification and Certification**

*[Forms Page 38, Section 2, Item 2, First Box, Third
Bullet.]{.underline}* The reports under the new guidelines of all
companies who previously have filed reports under the 1994 guidelines
will not be consistent with those previous reports. Because this program
is very different from the previous 1605(b) program, consistency between
the two programs cannot be compared directly and cannot be certified.
Wording should be changed to indicate that consistency is only related
to previous reports under the newly revised guidelines. Similar issues
are likely to arise every three years when guidelines are again revised.

**Addendum A**

Each Addendum schedule A1 through A15 has the following two items
somewhere in the form: (1) Types of actions that were likely the cause
of the reductions; and (2) Actions that were the likely causes of the
reductions. They sound the same. What is the distinction trying to be
made? Is it level of detail in the description, or something else? It
would be helpful if EIA would add some additional discussion in the
instructions to make the distinction clear.

**Addendum A5 Emission Reductions from Energy Generation and
Distribution**

*[Form Pages A11 -- A12 and Instructions Page 58.]{.underline}* The
second introductory paragraph indicates that a separate copy of this
addendum must be completed for each energy product sold by the entity.
However, the instructions and the form do not seem to contemplate the
situation where an entity sells a particular product (e.g., electricity)
in multiple regions across the country. Because the avoided emissions
benchmark varies by region, entities selling electricity in more than
one region will need to use different benchmarks and therefore, do a
different set of calculations for each region. This can be remedied by
simply adding the following sentence after the first sentence of the
second paragraph of the instructions:

> *"Similarly, if your entity generates and sells a particular energy
> product in more than one region, create a separate subentity and
> complete one copy of Addendum A5 for each region in which the energy
> product is sold."*

*[Form Pages A11, Instructions Page 58, Item 2h.]{.underline}* Because
Appendix P has not yet been provided for review and comment, we do not
know how EIA will specify regions for the avoided emissions benchmarks.
However, there are preliminary indications that the regions will be
specified as groups of states, with the groups
*[approximating]{.underline}* NERC regions. The reasoning behind this
approach is that DOE would like the avoided emissions benchmark regions
(used for generation of electricity) to exactly match the regions for
indirect emissions factors (used by consumers of electricity), and
state-based regions (as opposed to actual NERC regions) would make it
easier for electricity consumers to identify the proper factor.

> However, state-based regions (rather than actual NERC regions) for
> generators will create some anomalies that will reduce the accuracy of
> the reductions based on emissions intensity reported by generators. We
> are one of the companies that will face one of these anomalies. All of
> Southern Company's regulated generation is produced by four operating
> subsidiaries: Alabama Power, Georgia Power, Gulf Power, and
> Mississippi Power. If the emissions benchmark is based on SERC itself,
> all of the generation of these four subsidiaries will be covered by a
> single calculation because the SERC benchmark will apply to all four
> companies. However, if state-based *[approximations]{.underline}* are
> used, it is likely that Florida will be one region based on the FRCC
> NERC region, and Alabama, Georgia, and Mississippi will be in a
> separate region based on SERC. Under this scenario, Gulf Power would
> be governed by the factor for Florida (because it is located in
> Florida), even though its generation is part of SERC and is actually
> operated as part of SERC. As a result, Gulf Power's quantified
> emissions reductions would be determined largely by FRCC's fossil
> generation mix, which is significantly different from SERC's.
>
> As a result, we strongly urge EIA to specify regions for the avoided
> emissions benchmarks to be used by generators based on actual NERC
> regions, not on the state-based approximations. Generators should know
> what NERC region in which they operate, so using NERC regions would
> not make it difficult for any generator to easily identify the
> appropriate factor to use. We believe the advantage of this approach
> in terms of improving the accuracy of the reduction calculations
> outweighs any disadvantage resulting from having somewhat different
> regions for generators and consumers of electricity. If EIA does
> decide to use state-based regions instead of actual NERC-based regions
> for the avoided emissions benchmarks, they should allow entities such
> as Gulf Power that are caught in the anomalies created to calculate
> their reductions based on the region that actually reflects the
> generation of their NERC region (SERC in the case of Gulf Power)
> rather than the state-based region which misrepresents their actual
> operating circumstances (Florida/FRCC in the case of Gulf Power).

**Simplified Emissions Inventory Tool (SEIT)**

We appreciate the opportunity to review and comment on the draft
Simplified Emissions Inventory Tool (SEIT). This tool is an Excel
spreadsheet where users can plug in activity data and estimate some
emissions from a range of source types and activities. The estimates are
based on emissions factors that EIA has incorporated into the
spreadsheet. At this point in time, the tool does not appear to
comprehensively include all emissions from the common source types, and
there is no written documentation to accompany this spreadsheet.

One use of the tool is to estimate emissions for purposes of *de
minimis* calculations. Unfortunately, the tool does not appear to be
sufficiently complete to be used for this purpose. The guidelines
require entities seeking to register reductions to do a complete
inventory, including not just CO~2~ emissions from these sources but
also the CH~4~ and N~2~O emissions. However, the tool only appears to
include CO~2~ emissions in calculations for stationary and mobile
sources, not the CH~4~ and N~2~O emissions that are the more challenging
to calculate! Further, it does not appear to include factors to estimate
HFCs associated with air conditioning in mobile sources, another small
but challenging element to calculate!

Since our initial review, we have learned that components for the CH~4~
and N~2~O emissions associated with mobile sources are actually embedded
in the CO~2~ factors included in the spreadsheet. However, there is no
way to determine that from the spreadsheet.

We strongly urge EIA to incorporate the missing factors into the
spreadsheet for the common stationary combustion and mobile sources,
including CH~4~ and N~2~O emissions for stationary combustion sources
and the HFCs for air conditioning in mobile sources. Further, we also
strongly urge EIA to provide documentation for the SEIT, with particular
attention to delineating exactly what components are and are not
included in the emissions factors used. This is extremely necessary for
users to understand exactly what is captured in the emissions factors
used and, therefore, make proper use of this tool.

**TECHNICAL CORRECTIONS AND MINOR EDITS**

**Schedule I Entity Information**

*[Forms Page 21. Box labeled "All the methods used to estimate
reductions were rated B or higher. If not, do not complete the remainder
of Part D."]{.underline}* Is this the opposite of how it should read? If
so, a correction is necessary.

*[Forms Page 7, Schedule I Section 2, Part B.]{.underline}* For
clarification, add "for registered reductions" to the parenthetical
portion of the heading for Item 1a.

Also, add a footnote for Column 9 of this table that says, "If this is a
Start Year report, leave Column 9 blank." Other explanatory notes from
the Instructions would make this table easier to use and better assure
DOE/EIA of getting the desired, accurate information in the early years
of reporting.

*[Instructions Page 26, Section 2, Part B, Items 2b and
2c.]{.underline}* It would be helpful if a sentence or two were added to
the instructions for each of these items indicating that the emissions
factor to be used are based on where the electricity customer is located
geographically. This should include a brief explanation of the basis for
the different regional factors (average emissions rate for all
electricity in the region for inventories, and average emissions rate
for fossil-based electricity only for reductions). Presumably the
regionally based factors will be part of Appendices J and N.

**Addendum A**

Each Addendum Schedule A1 through A15 has the following item: "If
Reporting Subentities, Enter Name of Subentity." It would also be
helpful to assign a name to each Addendum scheduled used even if not
reporting a subentity.

*[Forms Page A11, Part B, Item I.]{.underline}* Should formula read,
\[(C -- F) \* B\]? If so, a correction is necessary.

*[Forms Page A42, Line 10.]{.underline}* No guidance is provided on what
emissions factor should be used to convert units of energy to GHGs. This
should be remedied. For electricity, the factor used to convert
kilowatt-hours should be consistent with the regional factors used to
convert to GHGs in other parts of the form.

**TIME AND RESOURCE BURDEN**

Southern Company has submitted an extensive Form EIA-1605(b) report
every year since 1995. Through this effort and many other reporting
activities, the company has developed considerable expertise in
estimating the time and resource burden for preparing such a document.
We estimate that preparation of the most recent 2005/2006 Form EIA-1605
report, under the old program, required an investment of about 80 to 100
labor hours across Southern Company.

For the new EIA-1605(b) program, the forms and the instructions are
longer and more detailed. The structure of the program has changed from
project based reporting to comprehensive accounting, with the added
dimension of grading/rating. Data for minor and *de minimis* sources
must be gathered and studied. Clearly, the time and resource burden has
to be greater under the new program.

As with any new program or effort, an initial learning curve is
involved. Well in excess of 100 labor hours has already been spent just
starting to learn the new requirements. Communication tools and methods
must be developed, information about the program must be disseminated
across the company, spreadsheets and templates specific to the company
must be prepared, and accurate, consistent data must be gathered. One
would expect that preparation of base year reports and first-time
reporting year reports would present an added time and resource burden.
However even beyond the early years of the program, we estimate that the
labor hour requirement for the new program will certainly be greater
than for the old program, simply because more people will be involved,
more data points must be gathered, and additional accounting,
verification, and certification are required.

Of special note, gathering data for minor emitting sources significantly
increases the time and resource burden to register/report. Identifying
minor sources and collecting this data is often more involved than
collecting data for the company's more basic functions. For historical
and baseline years, some of this data will be very difficult, if not
impossible, to compile. In preparation for the new reporting program,
Southern Company initiated an exercise in mid-2006 to begin identifying
sources and contacts for much of the required data. The intent of this
exercise was to learn about data sources and potential problem areas
with collecting data, particularly from minor emitting sources. This
exercise alone took about 120 labor hours. Through an exercise such as
this, the time and resource burden for the program begins to become even
more apparent

**SUMMARY**

We strongly urge EIA to make the changes to the forms and instructions
that we have outlined in these comments. These changes will enable users
to better understand what is required and should contribute to some
reductions in the time and resources it takes to complete the forms.

Southern Company appreciates the opportunity to submit these comments,
and looks forward to further discussion and work with DOE and EIA on
these and other issues relating to the form EIA-1605, its instructions
and other associated material. If there are any questions about these
comments, please contact Lee Ann Kozak at (704) 660-6717.

Sincerely,

![](media/image2.jpeg){width="3.157638888888889in"
height="0.9215277777777777in"}

Chris M. Hobson, Senior Vice President

Research & Environmental Affairs

cc: <stephen.calopedis@eia.doe.gov>

> Howard Gruenspecht, Energy Information Administration, Department of
> Energy
>
> Paul McArdle, Energy Information Administration, Department of Energy
>
> Mark Friedrichs, Department of Energy
>
> Stephen Eule, Department of Energy