GREEN MOUNTAIN ENERGY COMPANY

Transcription

1 GREEN MOUNTAIN ENERGY COMPANY INDEPENDENT ACCOUNTANT S REPORT ON APPLYING AGREED-UPON PROCEDURES DECEMBER 31, 2012

2 INDEPENDENT ACCOUNTANT S REPORT ON APPLYING AGREED-UPON PROCEDURES T Green Muntain Energy Cmpany: We have perfrmed the prcedures enumerated belw, which were agreed t by management f Green Muntain Energy Cmpany (the Cmpany), slely t assist the users in evaluating management's assertin that the Schedule f Retirements f Renewable Energy Certificates and Carbn Offsets Against 2012 Sales fr the year ended December 31, 2012, attached as Exhibit I, is presented in accrdance with the terms f the Cmpany s sales bligatins resulting frm the sale f (1) bundled electricity and (2) ther nn-electricity based prducts. This agreed-upn prcedures engagement was cnducted in accrdance with attestatin standards established by the American Institute f Certified Public Accuntants. The sufficiency f these prcedures is slely the respnsibility f the specified users f the reprt. Cnsequently, we make n representatins regarding the sufficiency f the prcedures described belw either fr the purpse fr which this reprt has been requested r fr any ther purpse. The prcedures perfrmed and ur findings are as fllws: 1) Green Bk Prcedures We nted that the Green Bk is the Cmpany s internally-develped tl used t track its purchased supply f renewable energy certificates (RECs) and carbn ffsets and t track the allcatin f that supply in rder t satisfy its sales bligatins f the fllwing prducts: Green-e Energy certified unbundled REC sales t end-use custmers REC supply that was used t prvide end-use custmers with renewable electricity Climate Actin Reserve certified carbn ffset sales t end-use custmers We btained cpies f the Cmpany s 2012 and 2011 Green Bks. We agreed Exhibit I t the 2012 Green Bk with the fllwing exceptin: The 2012 Green Bk reprted 27,050 metric tns f carbn ffset sales while Exhibit I reprts 27,115 metric tns f carbn ffsets retired fr an ver retirement f 65 metric tns. We recalculated the excess unallcated megawatt hur (MWh) inventry f RECs and metric tns f ffsets frm the 2011 Green Bk which was carried frward and used t surce sales in the 2012 Green Bk, withut exceptin. AN INDEPENDENT MEMBER OF BAKER TILLY INTERNATIONAL WEAVER AND TIDWELL LLP CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS HOUSTON 24 GREENWAY PLAZA, SUITE 1800, HOUSTON, TX P: (713) F: (713)

3 Page 2 1) Green Bk Prcedures Cntinued We recalculated the ttal purchases by supplier in the 2012 Green Bk. We cmpared vlumes purchased t vlumes sld per the 2012 Green Bk and nted that purchases were equal t r greater than the MWh r tns allcated t 2012 sales, withut exceptin. 2) Purchase Testing Prcedures We agreed all purchases tested in the Green-e Energy Agreed Upn Prcedures t the 2012 Green Bk withut exceptin. A ttal f 95% f REC purchases were certified as Green-e Energy and tested under thse prcedures. Green-e Energy certificatin means that the RECs meet the eligibility criteria defined in the Green-e Energy Natinal Standard including: Surced frm new renewable resurces built since 1998 Generated within a 21-mnth windw that aligns with the year in which they are sld (e.g., July 2011-March 2013 fr sales ccurring in 2012) The renewable attributes are claimed nly nce and the claims are subject t an annual verificatin prcess We selected a sample f purchases used as supply fr the renewable cmpnent f bundled electricity sales, that were nt tested during the Green-e Energy Agreed Upn Prcedures, frm the 2012 Green Bk. Our sample was selected using a 95% cnfidence level, tlerable deviatin f 10%, and expected deviatin rate f equal t r less than 3%, and resulted in selectin f apprximately an additinal 3% f REC purchases by vlume. We perfrmed the fllwing prcedures n the selected purchases: Obtained a cpy f the Tracking System Reprt r cmpleted and signed Whlesale Attestatin and Generatr Attestatin, as applicable, withut exceptin. Cnfirmed the Cmpany was named as the purchaser n the Whlesale Attestatin r Generatr Attestatin, where applicable, withut exceptin. Cnfirmed the Cmpany is named as the wner f the Tracking System accunt, where applicable, by bserving a Cmpany representative access the Cmpany s Tracking System accunt, withut exceptin.

4 Page 3 2) Purchase Testing Prcedures Cntinued Agreed the facility name, resurce type, perid f generatin, and MWh generated r purchased per the 2012 Green Bk t the Tracking System Reprt r Whlesale and Generatr Attestatin, as applicable, withut exceptin. Fr supply listed in the 2012 Green Bk as new, we verified that the date f the generating facility s first peratins r repwering date was after January 1, 1998 thrugh review f the Generatr Attestatin, Green-e Energy website s Generatrs that have submitted Tracking System Attestatins r the United States Energy Infrmatin Administratin database f all generatrs, withut exceptin. Fr supply listed in the 2012 Green Bk as existing, we verified that the date f the generating facility s first peratins was befre January 1, 1998 thrugh review f the Generatr Attestatin r the United States Energy Infrmatin Administratin, withut exceptin. We cnfirmed that the perid f generatin fr supply allcated t 2012 sales was within the perid f July 1, 2011 thrugh March 31, 2013 fr all REC purchases, except fr RECs resld t whlesale custmers fr cmpliance with the Texas renewable prtfli standard, which allws RECs frm the previus tw calendar years (in this case, 2010 and 2011) t be used fr cmpliance bligatins in the current calendar year; t meet custmer lad fr participants in the New Jersey Clean Pwer Chice prgram; r meet the requirements f the New Jersey Renewable Prtfli Standard, which perates n a reprting year frm June thrugh May (in this case, June 1, 2011 thrugh May 31, 2012), withut exceptin. We cnfirmed that supply purchased prir t 2012 which was used t surce 2012 sales was nt als allcated t sales in previus perids by tracing that supply t the 2011 Green Bk and verifying it was nt previusly allcated t sales, withut exceptin. We selected all purchases used t supply carbn ffset retirements frm the 2012 Green Bk. We perfrmed the fllwing prcedures n the purchases: We btained a cpy f the purchase cntract and agreed the prject name, metric tns purchased, and vintage t the 2012 Green Bk withut exceptin.

5 Page 4 3) Sales Testing Prcedures We btained the Cmpany s internal custmer usage reprts fr the Texas Residential Services regin and perfrmed the fllwing prcedures: Agreed the ttal MWh sld per the internal custmer usage reprts t the sales fr the Texas Residential Services prducts per the 2012 Green Bk, withut exceptin. Selected the mnths f March and July 2012 frm the Texas Residential Services sales usage reprts and perfrmed the fllwing: Obtained detailed internal sales reprts fr the Texas Residential Services sales fr the selected mnths. Agreed the mnthly usage detail t the internal sales reprts, with the fllwing exceptins: The internal sales reprts fr March 2012 reprted 0.030% less MWh than the sales bligatins per the 2012 Green Bk. The internal sales reprts fr July 2012 reprted 0.001% less MWh than the sales bligatins per the 2012 Green Bk. Randmly selected invices frm the March and July 2012 internal sales reprts using a 95% cnfidence level, tlerable deviatin f 10%, and expected deviatin rate f equal t r less than 3%. Fr the selected invices, we agreed the ttal kilwatt-hur (kwh) usage per the invice t the internal sales reprts, withut exceptin. We btained electricity usage reprts fr the renewable energy prducts that the Cmpany sld t residential and cmmercial custmers participating in Prtland General Electric s (PGE) green pricing prgram. The Cmpany represented t us that the usage reprts cntained unaltered data received directly frm PGE. We agreed the ttal MWh sld per the electricity usage reprts t the sales fr PGE renewable energy per the 2012 Green Bk, withut exceptin.

6 Page 5 3) Sales Testing Prcedures Cntinued We btained electricity usage reprts fr the renewable energy prduct that the Cmpany sld t residential custmers participating in the New Jersey Clean Pwer Chice prgram. The Cmpany represented t us that the usage reprts cntained unaltered data received directly frm lad-serving utilities f custmers participating in the Clean Pwer Chice Prgram. We agreed the ttal MWh sld per the electricity usage reprts t the sales fr the New Jersey prduct, withut exceptin. We btained electricity usage reprts fr the renewable energy prduct that the Cmpany sld t residential custmers participating in the New Yrk Natinal Grid GreenUp prgram. The Cmpany represented t us that the usage reprts cntained unaltered data received directly frm Natinal Grid. We agreed the ttal MWh sld per the electricity usage reprts t the sales fr the New Yrk prduct per the 2012 Green Bk, withut exceptin. We btained the third party billing reprts fr Texas Cmmercial Services, New Yrk Residential and Cmmercial Services, Pennsylvania Residential and Cmmercial Services and New Jersey Cmmercial Services sales. We agreed the ttal MWh sld per the third party billing reprts t the sales fr the Texas Cmmercial Services, New Yrk Residential and Cmmercial Services, Pennsylvania Residential and Cmmercial Services and New Jersey Cmmercial Services prducts per the 2012 Green Bk, with the fllwing exceptins: The third party billing data reprted 0.002% mre MWh than the sales per the 2012 Green Bk fr New Yrk Residential Services. The third party billing data reprted 0.093% less MWh than the sales per the 2012 Green Bk fr the New Jersey Cmmercial Services.

7 Page 6 3) Sales Testing Prcedures Cntinued Selected the mnths f March and July 2012 frm the Texas Cmmercial Services, New Yrk Residential and Cmmercial Services, Pennsylvania Residential and Cmmercial Services and New Jersey Cmmercial Services sales usage reprts and perfrmed the fllwing: Obtained detailed internal sales reprts fr the Texas Cmmercial Services, New Yrk Residential and Cmmercial Services, Pennsylvania Residential and Cmmercial Services and New Jersey Cmmercial Services sales fr the selected mnths. Agreed the mnthly usage detail t the internal sales reprts, with the fllwing exceptins: The internal sales reprts fr March 2012 reprted 0.001% less MWh than the sales bligatins per the 2012 Green Bk. The internal sales reprts fr July 2012 reprted 0.004% less MWh than the sales bligatins per the 2012 Green Bk. Randmly selected sales frm the ppulatin f Texas Cmmercial Services, New Yrk Residential and Cmmercial Services, Pennsylvania Residential and Cmmercial Services and New Jersey Cmmercial Services sales invices, using a 95% cnfidence level, tlerable deviatin f 10%, and expected deviatin rate f equal t r less than 3%. Fr the selected sales, we agreed the kwh usage per the invices t the billing system summary reprt fr the service perid and t the third party billing reprt, withut exceptin. We nted that apprximately 97% f the unbundled REC sales per the 2012 Green Bk were tested thrugh the Green-e Energy Agreed Upn Prcedures.

8 Page 7 3) Sales Testing Prcedures Cntinued We btained internal Cmpany reprts fr sales f the carbn ffset prducts. We agreed the ttal ffset bligatins t the 2012 Green Bk, withut exceptin. We randmly selected a sample f ffset sales using a 95% cnfidence level, tlerable deviatin f 10%, and expected deviatin rate f equal t r less than 3%. We perfrmed the fllwing prcedures n the selected sales: Agreed selected sales t cpies f invices, cntracts and/r sales cnfirmatins, with the fllwing exceptins: We nted a ttal f 1.961% mre carbn ffsets than required were allcated t the selected sales in the 2012 Green Bk. These prcedures resulted in testing 90% f ffsets sales by vlume. We selected all vluntary and mandatry REC retirements and transfers (Oregn nly) fr the Texas, Oregn, New Yrk, New Jersey and Pennsylvania regins and agreed the retirements r transfers (Oregn nly) t the Cmpany s ERCOT, WREGIS, MRETS, and PJM-GATS tracking system accunts, withut exceptin. We selected all ffset retirements frm Exhibit I and agreed the retirements t the Cmpany s Carbn Actin Registry tracking system accunt, withut exceptin. 3) Prduct Cntent Requirements Prcedures We btained prduct cntent labels r electricity facts labels fr each electricity prduct with sales f mre than 10,000 MWh and sales agreements r ther prduct cntent dcumentatin fr all carbn ffsets sld. We agreed the prduct definitins per the 2012 Green Bk t the dcumentatin selected, withut exceptin.

9 Page 8 4) Prduct Cntent Requirements Prcedures Cntinued We recalculated the REC and carbn ffset requirements per the 2012 Green Bk fr each prduct definitin, withut exceptin. Each REC sld is equivalent t 1 MWh, and each ffset sld is equivalent t 1 metric tn f carbn dixide-equivalent. We recalculated the net pen psitins, defined as the difference between the RECs required based n sales data and the RECs allcated t each regin in the 2012 Green Bk, and nted the fllwing: The Cmpany allcated less than 0.001% mre RECs t the Texas Residential prducts than required. The Cmpany allcated 0.003% fewer RECs t the New Yrk Residential prducts than required. The Cmpany allcated 0.093% mre RECs t the New Jersey Cmmercial prducts than required. We recalculated the ttal metric tns f carbn dixide ffset thrugh sales f ffsets. We recalculated the difference between the carbn ffsets required based n sales data and the carbn ffsets retired in the Carbn Actin Registry, and nted the fllwing: The Cmpany retired a ttal f 1.04% mre ffsets than required. The abve prcedures were agreed t by management t assist the users in evaluating management s assertin that the Schedule f Retirements f Renewable Energy Certificates and Carbn Offsets against 2012 Sales (Exhibit I) f Green Muntain Energy Cmpany fr the year ended December 31, 2012 is presented in accrdance with the terms f the Cmpany s sales bligatins resulting frm the sale f (1) bundled electricity and (2) ther nn-electricity based prducts. We were nt engaged t, and did nt perfrm an examinatin, the bjective f which wuld be the expressin f an pinin n management's assertin. Accrdingly, we d nt express such an pinin. Had we perfrmed additinal prcedures, ther matters might have cme t ur attentin that wuld have been reprted t yu.

10 Page 9 This reprt is intended slely fr the infrmatin and use f management and shuld nt be used by thse wh have nt agreed t the prcedures and taken respnsibility fr the sufficiency f the prcedures fr their purpses and is nt intended t be and shuld nt be used by anyne ther than these specified parties. WEAVER AND TIDWELL, L.L.P. Hustn, Texas