The San Diego Community Power board on June 26 adopted an update to its Energy Risk Management Policy to authorize procurement of California carbon allowances and carbon offset products to meet compliance obligations under the state cap‑and‑trade program.

Janine Kamara, director of portfolio management, said the change adds an addendum authorizing the CEO to approve purchases of allowances through quarterly auctions and on secondary markets, restricted to volumes that meet forecasted compliance obligations and prohibiting speculative trading.

Kamara said the addendum imposes per‑transaction limits to manage exposure: no single transaction will exceed 20,000 allowances (or cover emissions equivalent to 20,000 metric tons of CO2e) and no transaction will exceed $1,000,000 in notional value. "The addendum will allow us to meet our compliance obligations and make sure that we stay in compliance with state products or state mandates," she said.

Why it matters: As an importer of electricity, SDCP has cap‑and‑trade compliance obligations for California’s declining statewide emissions cap. The policy update clarifies internal authority and sets guardrails for purchasing allowances and offsets while preserving the portfolio management policy’s prohibition on speculation.

The board approved the resolution by roll call vote.

The updated policy authorizes the CEO, within the established limits, to procure carbon‑compliance instruments and directs staff to consider carbon costs when evaluating imported energy.