2017 Greenhouse Inventory June 2018 Prepared by: Puget Sound Energy Prepared by: Puget Sound Energy 2017 Greenhouse Inventory TABLE OF CONTENTS EXECUTIVE SUMMARY ................................................................................................. 3 1.0 INTRODUCTION ............................................................................. 4 1.1 Purpose ........................................................................................... 4 1.2 Inventory Organization .................................................................... 4 2.0 BACKGROUND .............................................................................. 5 2.1 Regulatory Actions .......................................................................... 5 2.2 Inventory and GHG Reporting Compliance ..................................... 6 3.0 MAJOR ACCOUNTING ISSUES .................................................... 7 4.0 BOUNDARIES AND SOURCES ..................................................... 8 4.1 Organizational Boundaries .............................................................. 8 4.1.1 Electrical Operations .............................................................................................. 8 4.1.2 Natural Gas Operations ......................................................................................... 8 4.2 Operational Boundaries .................................................................. 9 4.2.1 Scope I (Direct Emissions) ..................................................................................... 9 4.2.2 Scope II (Indirect Emissions from Electric Power) ............................................... 11 4.2.3 Scope III (Other Indirect Emissions) .................................................................... 11 5.0 METHODOLOGY .......................................................................... 12 5.1 Scope I .......................................................................................... 12 5.1.1 Electric Operations ............................................................................................... 12 5.1.2 Natural Gas Operations ....................................................................................... 12 5.1.3 Other Scope I Emissions ..................................................................................... 12 5.2 Scope II (Indirect Emissions Associated With the Purchase of Electricity) 12 1 Prepared by: Puget Sound Energy 5.3 Scope III (Other Indirect Emissions) Electric Operations .............. 12 5.3.1 Electric Operations ............................................................................................... 12 5.3.2 Natural Gas Supply .............................................................................................. 13 6.0 GHG EMISSIONS ......................................................................... 14 7.0 Sources and Uncertainties of GHG Emissions .............................. 15 7.1 Sources of GHG Emissions .......................................................... 15 7.2 Uncertainties in the GHG Emissions Inventory ............................. 16 7.2.1 Potential Sources of GHG Emissions Not Included ............................................. 16 7.2.2 Uncertainty Associated with Data Sources and Methodology ............................. 17 8.0 GHG EMISSIONS TIME TRENDS ................................................ 18 8.1 Changes in Organizational Boundaries ......................................... 18 8.2 Changes in Emissions – 2017 v. 2016 .......................................... 18 8.3 Changes in Methodology .............................................................. 19 8.3.1 All Emissions ........................................................................................................ 19 8.3.2 Scope I (Direct Emissions) ................................................................................... 19 8.3.3 Scope III (Other Indirect Emissions) .................................................................... 21 9.0 CONSERVATION PROGRAMS AND GHG EMISSIONS AVOIDED 23 10.0 REFERENCES.............................................................................. 24 2 Prepared by: Puget Sound Energy EXECUTIVE SUMMARY Puget Sound Energy’s (PSE) operating rates and greenhouse gas (GHG) emissions for calendar year 2017 are summarized in Table ES-1, Table ES-2, and Table ES-3. The emission percentages indicated in Table ES-2 are the percentage of the total emissions of the particular pollutant within each scope. The emission percentages indicated in Table ES-3 are the percentage of the total emissions of the particular pollutant among all sources. A majority of the carbon dioxide (CO2) emissions were from generated and purchased electricity (65.7%), while the remaining emissions were from natural gas supply to end-users (34.3%). For methane (CH4), the majority of emissions were fugitive from natural gas operations (80.9%). Generated and purchased electricity also accounted for all nitrous oxide (N2O) emissions and all sulfur hexafluoride (SF6) emissions. Compared to 2016, total electricity delivered to customers in 2017 was down by 7.6%, and total emissions were down by 0.3%. This trend is largely due to PSE dispatching less of its owned generation (coal, gas and renewable) with more purchased energy being delivered into PSE’s system under firm contract, but less from the spot market. In addition, emissions from PSE’s owned generating sources were down in 2017 for several reasons including: marginally less dispatch of PSE’s coal-based Colstrip Generating Station (emissions down 3.4%); more deliveries from firm contracted resources (emission up 29.5%); less PSE gas generation (emissions down 7.6%); and less deliveries of purchased unspecified energy (emissions down 22.7%). The “direct use” of natural gas often includes heating for water, buildings, and industrial processes, as well as use as a raw material to produce petrochemicals, plastics, paints, and a wide variety of other products. The emissions associated with the “direct use” of natural gas by end-users together with the emissions associated with power generation and power deliveries from natural gas combustion (direct and indirect) are accounted for in this inventory. 3 Prepared by: Puget Sound Energy 1.0 INTRODUCTION This document presents an inventory of greenhouse gas (GHG) emissions from Puget Sound Energy (PSE) operations during the calendar year 2017. PSE’s primary business is electric generation, purchase, distribution, and sales and natural gas purchase, distribution, and sales. This inventory accounts for the four major GHGs most relevant to PSE’s businesses. They are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and sulfur hexafluoride (SF6). GHG emissions were calculated in accordance with a standardized nationally accepted protocol. 1.1 Purpose This inventory is intended to provide PSE with the information to achieve five major goals: Maintaining an accurate and transparent estimate of GHG emissions; Analyzing PSE’s GHG emission sources in relation to size and impact; Tracking PSE’s GHG emissions over time; Evaluating PSE’s GHG emissions from electric production and purchase relative to those of other electric generators and electric utilities; and Estimating the emissions avoided through PSE’s conservation programs. 1.2 Inventory Organization This inventory is organized into 9 sections. The introduction explains the purpose and organization of this inventory. The background of PSE’s GHG inventory is described in Section 2.0. Major accounting issues within PSE’s GHG inventory are discussed in Section 3.0. Section 4.0 presents the choice of organizational and operational boundaries used in the inventory. Section 5.0 documents the calculation methodology, data sources, and assumptions made to estimate PSE’s GHG emissions. Section 6.0 provides a list of tables used to present and analyze PSE’s GHG emissions during calendar year 2016. Section 7.0 provides an evaluation of the sources of PSE’s GHG emissions and discusses potential uncertainties in the inventory. Section 8.0 describes changes in PSE’s GHG inventory over time. Section 9.0 presents PSE’s conservation programs that are relevant to the inventory and the estimated amount of GHG emissions avoided as a result of these conservation programs. The last section contains a list of references used to compile this inventory. 4 Prepared by: Puget Sound Energy 2.0 BACKGROUND From 2002 to 2010, PSE’s GHG inventories have followed a widely-accepted international GHG accounting protocol, the Greenhouse Gas Protocol (WRI/WBCSD 2004). The Greenhouse Gas Protocol (GHG Protocol) was developed by a consortium of businesses, business organizations, governments, and non-governmental organizations led jointly by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The WRI/WBCSD GHG Protocol has set the standard for development of GHG accounting methods for many industries and state GHG programs. Under the GHG Protocol, six groups of GHGs are tracked: CO2, CH4, N2O, SF6, hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs). Two of the groups of gases, HFCs and PFCs, are not tracked quantitatively in this inventory because PSE’s emissions of these GHGs are negligible. 2.1 Regulatory Actions This inventory continues to incorporate many of the standards developed by the WRI/WBSCD. However, regulatory actions taken at the federal and state levels now require PSE to disclose its emissions using