20180126Avista to Staff_DR_220(H1).DOCX

HYDRO ONE LIMITED
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:OREGONDATE PREPARED:11/20/2017
CASE NO.:UM 1897WITNESS:Mayo Schmidt
REQUESTER:PUC StaffRESPONDER:Adele PantusaTYPE:Data RequestDEPT:Law
REQUEST NO.:Staff – 220(H1)TELEPHONE:[phone]EMAIL:[e-mail]:As Ontario joins CA and Quebec in Cap-and-Trade what financial impact does that have on Hydro One? IF WA joined also, how would trading occur, with what savings for Avista?RESPONSE: Amendments to The Cap and Trade Program Regulation (O. Reg. 144/16), which will take effect on January 1, 2018, propose to recognize compliance instruments from California and Quebec, formally linking the Ontario Cap and Trade Program through joint auctions of emission allowances with California and Quebec. Emission allowances and credits from all three jurisdictions will be fully interchangeable and will be available via joint auctions. A single common price will be used by all jurisdictions participating in the joint auctions. Hydro One expects that costs associated with the Cap and Trade Program will increase over time (e.g., on an annual basis the auction reserve sale price is expected to increase). Based on information provided by the Ontario Ministry of Environment and Climate Change, it is estimated that increases could be approximately 5% annually. The current price per ton as of September auction was $18.56 (settlement price). Further information on pricing can be found at https://www.wci-auction.org/on. Hydro One is not in a position to speculate on the market mechanisms that would be in place should Washington State chose to adopt a Cap and Trade or Carbon Tax scheme for reducing greenhouse gases. Further to this, any savings or costs that would be attributed to Avista cannot be calculated.