This year’s Earth Day theme is Our Power, Our Planet. As we celebrate, let’s explore how hydropower and strategic investments in renewable energy support a sustainable future. Most of the power City Light delivers is generated from hydroelectricity, some of which comes from our fully owned hydroelectric projects. Hydropower is a renewable, reliable, and flexible energy resource that continues to play a key role in helping balance the grid and meet the rising demand for electricity.
But, sometimes we buy more power to meet our needs. So, we supplement our hydropower with investments into other renewable energy resources in the region. These investments help ensure that we reduce the greenhouse gas (GHG) emissions in our energy portfolio. They also support our longstanding commitment to meet the energy needs of our customers with “no net GHG emissions,” which we first met in 2005.
Balancing our energy portfolio to meet our energy needs and keep our GHG emissions minimal requires some specific tools. So, how do we do this?
How we balance our energy portfolio
We use the terms “GHG neutral” or “carbon neutral” to describe these efforts. These terms can be ambiguous and mixed up with other terms such as “neutral,” “net zero CO2,” “net zero emissions,” and sometime even “clean.”
When we use “GHG neutral” or “carbon neutral,” we are referring to our efforts to
1) Account for and minimize GHG emissions associated with our business.
2) Balance any remaining emissions by buying and retiring carbon offset credits.
As we account for and balance emissions in our work, we buy “renewable energy credits” (RECs). These inform our emissions reports. RECs are often compared to carbon offset credits, but these represent two different tools used for different purposes.
What is a REC?
A REC is represents 1 MWh of renewable energy that is generated and delivered to the power grid. The owner of that REC has the right to claim the environmental, social, or other non-power attributes of that energy. The owner can also trade RECs. Think of RECs as a receipt showing that one megawatt-hour of electricity came from renewable sources like wind or solar.
RECs come in two forms: bundled or unbundled. A bundled REC is sold together with its associated electricity. An unbundled REC is separate from the electricity it represents and the non-power attributes are provided to the owner.
Why do companies and utilities use RECs?
Many companies buy RECs to lower the reported GHG emissions associated with their electricity consumption.
Electric utilities use RECs to show compliance with state policies that require the use or delivery of renewable electricity . For example, we use RECs to support compliance with Washington’s Energy Independence Act. We also use RECs when developing utility-specific emission factors, which represent the emissions intensity of that utility’s energy portfolio.
What is an offset credit?
A carbon offset credit represents a GHG emission reduction, removal, or avoidance of 1 metric ton of carbon dioxide. Like a REC, this credit can be owned and traded.
Organizations like City Light will buy offset credits from another entity to compensate for or counterbalance any reported operational emissions. This purchase helps them achieve a net emissions position. Organizations often use offset credits while taking other actions to reduce their emissions.
At City Light, we use RECs and carbon offset credits to support our efforts to reduce our GHG emissions. We know our efforts can’t stop there. Addressing climate change requires a broad portfolio of innovative tools and solutions. We will continue to collaborate and innovate with our customers and other stakeholders to meet the challenges of today and tomorrow.
