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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Electricity Supply Amendment (Energy
Savings Scheme) Bill 2015
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Overview of Bill
The principal object of this Bill is to make amendments to the energy savings scheme in the
Electricity Supply Act 1995 (the principal Act). Under the scheme, electricity network operators
and retailers are required to meet energy savings targets based on their liable acquisitions of
electricity. They meet their targets by purchasing and surrendering energy savings certificates,
that have been created by accredited certificate providers. The amendments in this Bill include
amendments to enable energy savings certificates to be created for activities that involve the
consumption of gas, to extend the scheme to 2025 and to increase energy savings targets.
Outline of provisions
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on a day or days to be appointed
by proclamation.
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
Schedule 1 [1] amends the objects of Part 9 (Energy savings scheme) of the principal Act by
replacing references to electricity consumption with references to energy consumption so that the
objects will extend to gas savings.
Schedule 1 [2]-[4] contain amendments to the definitions section of Part 9 of the principal Act
that are consequential, in particular, on the amendments to sections 106 and 129 of the principal
Act arising from the extension of the scheme to gas savings.
b2015-102.d09
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Explanatory note
Schedule 1 [5] amends section 105 of the principal Act which establishes criteria for a
recommendation by the Minister for a change in an energy savings scheme target for a year or
years. The amendment enables the regulations to establish thresholds for the forming of an
opinion that a change is appropriate because of an under supply or over supply of energy savings
certificates.
Schedule 1 [6]-[9] amend section 106 of the principal Act which establishes individual energy
savings targets for scheme participants. Instead of the targets being expressed in tonnes of carbon
dioxide equivalent of greenhouse gas emissions, the amendments provide that they are to be
expressed in units referred to as notional megawatt hours. This is to accommodate the extension
of the scheme to energy saving activities involving the consumption of gas. The note that is
included makes it clear that the number of notional megawatt hours of individual energy savings
targets of scheme participants will not be the same as the number of actual megawatt hours saved
by end users as a result of energy saving activities for which energy savings certificates are
created.
Schedule 1 [10] inserts a new subsection in section 107 of the principal Act to clarify that if a
scheme participant purchases electricity from another scheme participant, the purchase is not a
liable acquisition if the purchase of the electricity is, or the supply of the electricity is to be treated
as, a liable acquisition for that other scheme participant or for a scheme participant who is further
up the chain of supply of the electricity (that is, closer to the point of generation).
Schedule 1 [11] amends the note to section 110 of the principal Act so that it includes a reference
to energy saving activities involving the consumption of gas.
Schedule 1 [12] and [13] are amendments that reflect that energy savings shortfalls (as well as
targets) are to be expressed in notional megawatt hours.
Schedule 1 [14]-[19] amend sections 113 and 114 of the principal Act which relate to penalty
rates. The amendments are consequential on the amendments that change the units in which
energy savings targets and shortfalls are expressed to notional megawatt hours and on the
amendments that simplify the scheme by omitting Schedule 5A. The methodology for adjusting
the rates for movements in the Consumer Price Index for Sydney will continue to be dealt with in
the regulations. As with the amendment to section 105 of the principal Act, the amendment in
Schedule 1 [18] to section 114 of the principal Act enables the regulations to establish thresholds
for the forming of an opinion by the Minister that a change to the base penalty rate is appropriate
because of an under supply or over supply of energy savings certificates.
Schedule 1 [20] makes an amendment to section 116 of the principal Act that is consequential on
the extension of the scheme to 2025 by the amendment to section 178 of the principal Act.
Schedule 1 [21] amends section 122 of the principal Act which deals with the mechanics of
exemptions from the scheme for an industry or activity that is both emissions intensive and trade
exposed and the mechanics of revocations of exemptions. Instead of an exemption or revocation
taking effect at the beginning of the year after the order granting or revoking the exemption is
made, the amendments provide that the exemption or revocation takes effect on publication of the
order in the Gazette or on a later day specified in the order.
Schedule 1 [22] amends section 124 of the principal Act to prevent an energy savings certificate
being surrendered by a scheme participant for the purposes of meeting its individual energy
savings target or remedying a carried forward shortfall if it relates to energy saving activities
outside New South Wales unless the activity occurred in a State or Territory for which there is an
approved corresponding scheme and the Minister has approved the surrender in New South Wales
of such certificates for those purposes.
Schedule 1 [23] makes an amendment to section 127 of the principal Act so that it includes
references to energy saving activities involving the consumption of gas.
Schedule 1 [24] amends section 127 of the principal Act to require the approval of a
corresponding scheme by the Minister to be by order published in the Gazette. This is designed to
provide appropriate evidence of the approval.
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Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Explanatory note
Schedule 1 [25] makes an amendment to section 128 of the principal Act so that energy savings
certificates will relate to energy savings expressed in notional megawatt hours.
Schedule 1 [26] replaces section 129 of the principal Act which sets out how energy savings
attributable to recognised energy saving activities are to be calculated. The amendment
contemplates certificate conversion factors for both electricity and gas and for the scheme rules to
provide for the methodology for calculating the number of megawatt hours of energy savings
arising from a recognised energy saving activity and for applying the certificate conversion
factors.
Schedule 1 [27]-[31] amend section 130 of the principal Act to introduce a separate certificate
conversion factor for gas, namely, 0.39, and by making amendments necessary to simplify the
presentation of the scheme by omitting Schedule 5B.
Schedule 1 [32] makes an amendment to section 135 of the principal Act related to the expansion
of energy saving activities to include activities involving the consumption of gas.
Schedule 1 [33] and [34] amend section 142 of the principal Act which sets out the circumstances
in which the Scheme Administrator may require surrender of energy savings certificates. Instead
of the person having to have been found guilty of certain offences, the amendment provides that
surrender may be required if the Scheme Administrator is satisfied, on the balance of probabilities
on the basis of an audit conducted under the principal Act or the regulations or of information
otherwise obtained by the Administrator under the principal Act or the regulations, that the person
is guilty of an offence.
Schedule 1 [35] and [36] amend section 143 of the principal Act which requires energy savings
certificates to be registered. The amendments contemplate that the fee for an application for
registration of a certificate set out in the regulations will be subject to CPI increases as set out in
the regulations.
Schedule 1 [37] amends the functions of the Scheme Regulator set out in section 152 of the
principal Act to include the function of providing advice to the Minister on request about the
extent of any under supply or over supply of energy savings certificates that may be surrendered
under Part 9 of the principal Act.
Schedule 1 [38] mirrors the amendment to the functions of the Scheme Regulator in the functions
of the Scheme Administrator set out in section 154 of the principal Act.
Schedule 1 [39] amends section 163 of the principal Act which sets out matters that must be
included on the register of energy savings certificates. The amendment requires that, for an
activity that takes place outside New South Wales under an approved corresponding scheme, the
register must include the State or Territory in which the activity occurred.
Schedule 1 [40] makes an amendment to section 167 (Scheme rules) of the principal Act
consequential on the amendment to section 129 of the principal Act.
Schedule 1 [41]-[44] amend section 174 of the principal Act which sets out matters to be included
in the Scheme Regulator's annual report. The amendments require further statistics and
assessments to be included in the report relevant to the question of whether there is an under
supply or over supply of energy savings certificates that may be surrendered and clarify that
existing references to actual energy savings relate to savings realised by end users.
Schedule 1 [45] amends section 178 of the principal Act to extend the scheme from the end of
2020 to the end of 2025.
Schedule 1 [46] and [47] amend section 187 of the principal Act which allows for penalty notices.
The current provision empowers an authorised officer or police officer to issue a penalty notice.
However, an authorised officer under the principal Act is a person authorised by an electricity
entity who is given certain powers such as the power to enter a property to read a meter. The
amendment alters the reference in this provision to enforcement officer defined as an employee of
a government sector agency (within the meaning of the Government Sector Employment
Act 2013) authorised in writing by the Minister to act as an enforcement officer.
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Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Explanatory note
Schedule 1 [48] increases the energy savings targets and energy conversion factors for 2016 to
2020 set out in Schedule 5 to the principal Act and adds targets and factors for 2021 to 2025.
Schedule 1 [49] omits Schedules 5A and 5B from the principal Act. The material contained in
these Schedules is moved to the relevant provisions in the body of the principal Act for the
purposes of simplifying the presentation of the scheme.
Schedule 1 [50] inserts a transitional provision into Schedule 6 to the principal Act relevant to
converting energy savings certificates and energy savings shortfalls to notional megawatt hours.
Other transitional provisions may be included in the regulations as provided for by clause 1 (1) of
Schedule 6 to the principal Act.
Page 4
First print
New South Wales
Electricity Supply Amendment (Energy
Savings Scheme) Bill 2015
Contents
Page
1 Name of Act 2
2 Commencement 2
Schedule 1 Amendment of Electricity Supply Act 1995 No 94 3
b2015-102.d09
New South Wales
Electricity Supply Amendment (Energy
Savings Scheme) Bill 2015
No , 2015
A Bill for
An Act to amend the Electricity Supply Act 1995 to make changes to the energy savings scheme;
and for other purposes.
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
The Legislature of New South Wales enacts: 1
1 Name of Act 2
This Act is the Electricity Supply Amendment (Energy Savings Scheme) Act 2015. 3
2 Commencement 4
This Act commences on a day or days to be appointed by proclamation. 5
Page 2
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
Schedule 1 Amendment of Electricity Supply Act 1995 No 94 1
[1] Section 98 Objects of Part 2
Omit "electricity" wherever occurring in section 98 (1) and (2) (a). Insert instead "energy". 3
[2] Section 99 Definitions 4
Omit the definitions of carbon dioxide equivalent and greenhouse gas from section 99 (1). 5
[3] Section 99 (1), definition of "certificate conversion factor" 6
Omit "factor". Insert instead "factors". 7
[4] Section 99 (1) 8
Insert in alphabetical order: 9
notional megawatt hours--see section 106 (1). 10
[5] Section 105 Conditions under which energy savings scheme targets may be 11
changed 12
Omit section 105 (b) and (c). Insert instead: 13
(b) the change to the energy savings scheme target is appropriate because 14
of an under supply or over supply of energy savings certificates that 15
may be surrendered under this Part, as evidenced in the manner set out 16
in the regulations, or 17
[6] Section 106 Individual energy savings targets 18
Omit "expressed in tonnes of carbon dioxide equivalent of greenhouse gas emissions" from 19
section 106 (1). 20
Insert instead "expressed in units referred to as notional megawatt hours". 21
[7] Section 106 (1) (a) 22
Omit the paragraph. Insert instead: 23
(a) Step 1 24
Multiply the total value of all liable acquisitions made by the scheme 25
participant during that year (expressed in megawatt hours) by the 26
energy savings scheme target for the year (the megawatt hours target). 27
[8] Section 106 (2) 28
Omit "tonne" wherever occurring. Insert instead "notional megawatt hour". 29
[9] Section 106, note 30
Omit the note. Insert instead: 31
Note. For example, if a scheme participant has liable acquisitions in the year 2016 of 32
75,050 megawatt hours, to calculate the scheme participant's individual energy 33
savings target under subsection (1): 34
(a) Step 1 requires the 75,050 megawatt hours to be multiplied by 0.07 (the energy 35
savings scheme target for 2016), resulting in a megawatt hours target of 36
5,253.5, and 37
(b) Step 2 requires the figure of 5,253.5 to be multiplied by 1.00 (the energy 38
conversion factor for 2016), resulting in an individual energy savings target of 39
5,253.5 notional megawatt hours. 40
The result is then rounded up to 5,254 in accordance with subsection (2). 41
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Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
The scheme participant has an individual energy savings target for the year 2016 of 1
5,254 notional megawatt hours. 2
The scheme participant can meet this target by surrendering energy savings 3
certificates to the Scheme Regulator in accordance with this Part. Since each 4
certificate has a value of 1 notional megawatt hour (see section 128), the scheme 5
participant can meet this target by surrendering 5,254 certificates. 6
Energy savings certificates may be created in respect of activities that involve the 7
consumption of electricity or gas or both electricity and gas. Certificate conversion 8
factors are applied to the actual energy savings of end users resulting from an energy 9
saving activity to produce energy savings expressed in notional megawatt hours for the 10
purposes of energy savings targets. See Division 7. 11
Consequently, the number of notional megawatt hours of individual energy savings 12
targets of scheme participants will not be the same as the number of actual megawatt 13
hours saved by end users as a result of energy saving activities for which energy 14
savings certificates are created. 15
[10] Section 107 Liable acquisitions 16
Insert after section 107 (2): 17
(2A) However, if a scheme participant purchases electricity from another scheme 18
participant, the purchase is not a liable acquisition if the purchase of the 19
electricity is, or the supply of the electricity is to be treated as, a liable 20
acquisition for that other scheme participant or for a scheme participant who 21
is further up the chain of supply of the electricity. 22
[11] Section 110 What are the energy savings attributable to a scheme participant? 23
Insert "or gas or both electricity and gas" after "electricity" in the note at the end of the 24
section. 25
[12] Section 111 Failure to meet individual energy savings target--energy savings 26
shortfalls 27
Omit "tonnes of carbon dioxide equivalent of greenhouse gas emissions" from 28
section 111 (2). 29
Insert instead "notional megawatt hours". 30
[13] Section 113 Penalty rates 31
Omit "tonne of carbon dioxide equivalent of greenhouse gas emissions" from 32
section 113 (1). 33
Insert instead "notional megawatt hour". 34
[14] Section 113 (2)-(7) 35
Omit the subsections. Insert instead: 36
(2) Subject to section 114: 37
(a) the base penalty rate is as follows: 38
(i) for 2009 and 2010--$24.50 per notional megawatt hour, 39
(ii) for each subsequent year--the base penalty rate for a previous 40
year specified in the regulations and adjusted for movements in 41
the consumer price index in accordance with the regulations, and 42
(b) the penalty conversion factor for a year is 0.94. 43
(3) The Scheme Regulator is to cause notice of the adjusted base penalty rate for 44
a year to be published on its website before the beginning of that year. 45
Page 4
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
[15] Section 114 Changes to base penalty rates and penalty conversion factors 1
Omit "amend Schedule 5A to" from section 114 (1). 2
[16] Section 114 (2) 3
Omit the subsection. 4
[17] Section 114 (4) 5
Omit "to amend Schedule 5A". 6
[18] Section 114 (4) (b) and (c) 7
Omit the paragraphs. Insert instead: 8
(b) the change to the base penalty rate is appropriate because of an under 9
supply or over supply of energy savings certificates that may be 10
surrendered under this Part, as evidenced in the manner set out in the 11
regulations, or 12
[19] Section 114 (6), note 13
Omit the note. 14
[20] Section 116 Energy savings shortfalls may be carried forward 15
Omit "2020" wherever occurring in section 116 (6) (including the note). 16
Insert instead "2025". 17
[21] Section 122 General provisions with respect to exemptions 18
Omit section 122 (1)-(3). Insert instead: 19
(1) An exemption takes effect on the day the order granting the exemption is 20
published in the Gazette or, if a later day is specified in the order, on that later 21
day. 22
(2) An exemption may be revoked by order of the Minister published in the 23
Gazette. 24
(3) If an exemption is revoked, the revocation takes effect on the day the order 25
revoking the exemption is published in the Gazette or, if a later day is specified 26
in the order, on that later day. 27
[22] Section 124 Restrictions on surrender of energy savings certificates 28
Insert at the end of section 124 (1) (c): 29
, and 30
(d) in the case of a certificate that relates to an energy saving activity that 31
occurred in a State or Territory for which there is an approved 32
corresponding scheme under section 127--the Minister has, by the 33
order approving the corresponding scheme or by a subsequent order 34
published in the Gazette, approved the surrender of such certificates by 35
a scheme participant for those purposes. 36
[23] Section 127 Activities in respect of which energy savings certificates may be created 37
Insert "or gas" after "electricity" wherever occurring. 38
[24] Section 127 (3) 39
Omit "in writing". Insert instead "published in the Gazette". 40
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Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
[25] Section 128 Energy savings represented by certificates 1
Omit "tonne of carbon dioxide equivalent of greenhouse gas emissions" wherever 2
occurring. 3
Insert instead "notional megawatt hour". 4
[26] Section 129 5
Omit the section. Insert instead: 6
129 Calculation of energy savings attributable to recognised energy saving 7
activities 8
(1) The number of notional megawatt hours attributable to energy savings arising 9
from a recognised energy savings activity is to be calculated by applying the 10
certificate conversion factor or factors for the year in which the energy savings 11
for which the certificate is created occurred to the number of megawatt hours 12
of energy savings arising from the activity. 13
(2) Depending on the nature of the energy saving activity and the scheme rules, 14
the calculation may require the application of the certificate conversion factor 15
for electricity or the certificate conversion factor for gas or both the certificate 16
conversion factor for electricity and the certificate conversion factor for gas. 17
(3) The scheme rules may provide for the methodology for calculating the number 18
of megawatt hours of energy savings arising from a recognised energy saving 19
activity and for applying the certificate conversion factors. 20
[27] Section 130 Certificate conversion factor 21
Omit section 130 (1). Insert instead: 22
(1) Subject to this section, the certificate conversion factors for a year are as 23
follows: 24
(a) for electricity--1.06, 25
(b) for gas--0.39. 26
[28] Section 130 (2) 27
Omit the subsection. 28
[29] Section 130 (3) 29
Omit "amend Schedule 5B to change the". Insert instead "change a". 30
[30] Section 130 (4) 31
Omit the subsection. 32
[31] Section 130 (5) 33
Omit "the certificate". Insert instead "a certificate". 34
[32] Section 135 Eligibility for accreditation 35
Insert "or gas" after "electricity" in section 135 (2). 36
[33] Section 142 Scheme Administrator may require surrender of certificates 37
Omit section 142 (2). Insert instead: 38
(2) An order may be made against a person under this section only if the Scheme 39
Administrator is satisfied (on the balance of probabilities on the basis of an 40
Page 6
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
audit conducted under this Act or the regulations or of information otherwise 1
obtained by the Administrator under this Act or the regulations) that: 2
(a) the person is guilty of an offence involving the improper creation of 3
energy savings certificates (that is, an offence under section 133), or 4
(b) the person is guilty of an offence of contravening a condition of the 5
person's accreditation as a certificate provider (that is, an offence under 6
section 138). 7
[34] Section 142 (3) 8
Omit "found guilty of an offence". Insert instead "on grounds". 9
[35] Section 143 Creation of certificate must be registered 10
Insert "(adjusted for movements in the consumer price index for each year in accordance 11
with the regulations)" after "fee" in section 143 (6). 12
[36] Section 143 (7) 13
Insert after section 143 (6): 14
(7) The Scheme Regulator is to cause notice of any adjusted application fee to be 15
published on its website before the beginning of the year to which the 16
application fee applies. 17
[37] Section 152 Functions of Scheme Regulator 18
Insert after section 152 (1) (d): 19
(d1) to provide advice to the Minister on request about the extent of any 20
under supply or over supply of energy savings certificates that may be 21
surrendered under this Part, 22
[38] Section 154 Functions of Scheme Administrator 23
Insert after section 154 (1) (c): 24
(c1) to provide advice to the Minister on request about the extent of any 25
under supply or over supply of energy savings certificates that may be 26
surrendered under this Part, 27
[39] Section 163 Register of energy savings certificates 28
Insert after section 163 (1) (b): 29
(b1) if the Minister has approved a corresponding scheme for a State or 30
Territory for the purposes of section 127 and the energy saving activity 31
to which the certificate relates occurred in such a State or Territory-- 32
the State or Territory in which the activity occurred, 33
[40] Section 167 Scheme rules 34
Insert "and for applying the certificate conversion factors" after "activity" in paragraph (b) 35
of the note to section 167 (1). 36
[41] Section 174 Annual report by Scheme Regulator 37
Insert after section 174 (2) (c): 38
(c1) the total number of energy savings certificates created in previous years 39
and not surrendered under this Part before the beginning of the year to 40
which the report relates, 41
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Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
(c2) an assessment of the extent of any under supply or over supply of energy 1
savings certificates that may be surrendered under this Part in the year 2
to which the report relates, 3
[42] Section 174 (2) (d) 4
Omit "actual energy savings that have been realised". 5
Insert instead "actual electricity and gas savings that have been realised by end users". 6
[43] Section 174 (2) (e) 7
Omit "actual energy savings that will be realised". 8
Insert instead "actual electricity and gas savings that will be realised by end users". 9
[44] Section 174 (2A) 10
Insert after section 174 (2): 11
(2A) For the purposes of subsection (2), any energy savings certificates created 12
under an approved corresponding scheme that are not able to be surrendered 13
by a scheme participant for the purpose of meeting its annual energy savings 14
target or remedying a carried forward shortfall are to be disregarded. 15
[45] Section 178 Automatic termination of scheme at end of year 2025 16
Omit "2020" wherever occurring. Insert instead "2025". 17
[46] Section 187 Penalty notices for certain offences 18
Omit "authorised officer" from section 187 (1). Insert instead "enforcement officer". 19
[47] Section 187 (9) 20
Insert after section 187 (8): 21
(9) In this section, enforcement officer means an employee of a government 22
sector agency (within the meaning of the Government Sector Employment 23
Act 2013) authorised in writing by the Minister to act as an enforcement 24
officer for the purposes of this section. 25
[48] Schedule 5 Energy savings scheme--targets and energy conversion factors 26
Omit the matter relating to the years 2016 to 2020. Insert instead: 27
28
2016 0.070 1.00
2017 0.075 1.00
2018 0.080 1.00
2019 0.085 1.00
2020 0.085 1.00
2021 0.085 1.00
2022 0.085 1.00
2023 0.085 1.00
2024 0.085 1.00
2025 0.085 1.00
Page 8
Electricity Supply Amendment (Energy Savings Scheme) Bill 2015 [NSW]
Schedule 1 Amendment of Electricity Supply Act 1995 No 94
[49] Schedules 5A and 5B 1
Omit the Schedules. 2
[50] Schedule 6 Savings, transitional and other provisions 3
Insert after Part 12 of Schedule 6: 4
Part 13 Provisions consequent on enactment of Electricity 5
Supply Amendment (Energy Savings Scheme) 6
Act 2015 7
65 Units in which energy savings certificates and energy savings shortfalls are 8
expressed 9
(1) On and after the date of commencement of Schedule 1 [12] to the Electricity 10
Supply Amendment (Energy Savings Scheme) Act 2015, an energy savings 11
shortfall, or a carried forward energy savings shortfall, of a number of tonnes 12
of carbon dioxide equivalent of greenhouse gas emissions, is to be regarded as 13
an energy savings shortfall or a carried forward energy savings shortfall (as the 14
case requires) of the same number of notional megawatt hours. 15
(2) On and after the date of commencement of Schedule 1 [25] to the Electricity 16
Supply Amendment (Energy Savings Scheme) Act 2015, the value of each 17
registered energy savings certificate is one notional megawatt hour rather than 18
one tonne of carbon dioxide equivalent of greenhouse gas emissions. 19
Page 9
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