Cal. Code Regs. Tit. 20, § 1394.2 - Auditing and Verification

(a) By October 1 of each year, all retail suppliers shall provide a report prepared by an auditor who has conducted the procedures identified in subdivision (b). The report shall contain a summary of the results of the procedures and a proof of service of the annual power content label to customers.

(1) The retail supplier shall engage an auditor to verify the accuracy and completeness of data reported in the annual report submitted to the Energy Commission.

(A) The auditor shall be a Certified Public Accountant in good standing with the American Institute of Certified Public Accountants (AICPA) or a Certified Internal Auditor in good standing with the Institute of Certified Internal Auditors.

(B) The engagement shall be performed in accordance with the American Institute of Certified Public Accountants (AICPA) Statements on Standards for Attestation Engagements, Section 600, AICPA Statements on Auditing Standards, Section 622, or the Generally Accepted Government Auditing Standards for Attestation Engagements or Performance Audits as specified under Chapter 1 of the Government Auditing Standards (July 2018), which is hereby incorporated by reference.

(2) A retail supplier that is a public agency providing electric services is not required to comply with the provisions of subdivision (a)(1) if the board of directors of the public agency submits to the Energy Commission an attestation of the veracity of each annual report and power content label for the previous year.

(b) Audit Procedures

(1) The auditor shall review the information used to prepare the annual report and perform the procedures identified below, noting any exceptions.

(A) The auditor shall agree the specified purchases and resales by facility name, facility number provided by EIA, WREGIS, and RPS if applicable, kilowatt hours, and fuel type from the information used to prepare the annual report is consistent with the information presented in the annual report. The auditor shall agree the purchases of unspecified sources of power, unbundled RECs, and resales from the information used to prepare the annual report is consistent with the information presented in the annual report. The auditor shall agree the retail sales are accurately reflected in the annual report. The auditor shall also test the mathematical accuracy of the annual report.

(B) The auditor shall select a sample of purchases from the information used to prepare Schedule 1, and for each purchase in the sample perform the following procedures:

1. Agree the facility name, facility numbers provided by EIA, WREGIS, and RPS if applicable, kilowatt hours, and the fuel type from the invoice to the information used to prepare Schedule 1.

2. For facilities owned by the retail supplier, agree the kilowatt hours with meter readings made by an independent third party, or confirm that the retail supplier has another internal auditing procedure that assures facility production agrees to production claims.

3. Agree the date of generation from the invoice to the reporting period of the information used to prepare Schedule 1.

4. Agree the unbundled RECs reported on Schedule 2 were retired within the reporting year.

(C) The auditor shall agree any excluded emissions meet the requirements pursuant to section 1393(d).

(2) The auditor shall obtain a copy of the annual power content label provided to customers for each electricity portfolio. Using the information reported in the associated annual reports, the auditor shall then compare the information to that identified on the power content label. The auditor shall note any exceptions.

(c) The Energy Commission may on its own motion, or as a result of a request from a member of the public or other agency, investigate electricity transactions identified by a retail supplier to determine whether the transactions are traceable to specific generating facilities and whether they provide commercial verification that the electricity source claimed has been sold once and only once to retail consumers. In conducting its investigation, the Energy Commission may require the production of the service lists used to comply with the requirements of subdivision (b) of this section, as well as commercial documents, such as contracts, invoices, the verification procedures performed pursuant to subdivision (b) of this section, and attestations.

Notes

Cal. Code Regs. Tit. 20, § 1394.2

1. Redesignation and amendment of former section 1394, Appendix A as new section 1394.2 filed 5-4-2020; operative 5-4-2020 pursuant to Government Code section 11343.4(b)(3) (Register 2020, No. 19).

Note: Authority cited: Section 25213, Public Resources Code; and Section 398.5, Public Utilities Code. Reference: Sections 25216 and 25216.5, Public Resources Code; and Section 398.5, Public Utilities Code.

1. Redesignation and amendment of former section 1394, Appendix A as new section 1394.2 filed 5-4-2020; operative 5/4/2020 pursuant to Government Code section 11343.4(b)(3) (Register 2020, No. 19).