What progress is being made on being able to identify organisations that qualify for EPC?

1
What progress is being made on being able to
identify organisations that qualify for EPC?
UK ETG 26 January 2007

• Driving a legally-defined step-by-step solution

2
Defining the EPC organisation

• Where has the issue of organisational boundaries
  been dealt with before?
• The Greehouse Gas Protocol
• UK ETS

3
The Greenhouse Gas Protocol

• Developed by
• The World Business Council for Sustainable
  Development (WBCSD) is a coalition of 175
  international companies united by a shared
  commitment to sustainable development. Its
  members are drawn from more than 35 countries and
  20 major industrial sectors.
• The World Research Institute (WRI) is an
  independent nonprofit organisation with a staff
  of more than 100 scientists, economists, business
  analysts, statistical analysts, mapmakers and
  communicators working to protect the Earth and
  peoples lives.

4
The Greenhouse Gas Protocol
Goal The Greenhouse Gas Protocols goal is to
help business better manage their greenhouse gas
(GHG) emissions, create a GHG accounting platform
to ensure that different trading schemes and
other climate related initiatives adopt
consistent approaches and to generally expand GHG
accounting capacity around the world. The
Corporate Accounting and Reporting Standard is
available at www.ghgprotocol.org adopted by the
International Standards Organisation
5
The Greenhouse Gas Protocol
Two distinct approaches to defining
organisational boundaries Equity Share accounts
for Green House gases (GHGs) from operations
according to its share of equity in the
operation. Control a company accounts for 100
of GHGs from operations over which it has either
financial or operational control.
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The Greenhouse Gas Protocol
Financial control A company has financial
control over the operation if the former has the
ability to direct the financial and operational
policies of the latter with a view to gaining
economic benefit from its activities.
Operational control A company has operational
control over an operation if the former or one of
its subsidiaries has full authority to introduce
and implement its operating policies at the
operation. This is the definition for EU ETS
CCA
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The Greenhouse Gas Protocol
Financial control
A company has financial control where an
operation is fully consolidated in financial
accounts. Financial control usually exists if the
company has the right to the majority of the
benefits. For joint ventures where partners have
joint financial control emissions are based on
the equity share approach. Further information
can be found in the GHG Protocol document.
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UK ETS

• Companies (voluntarily) entered the UK ETS as a
  direct participant
• Each company had to include every source
  within a sector over which it has management
  control
• Management control , when a direct participant
  
• exercises dominant influence over the emissions
  from a source, through having the ability to
  direct the financial and operating policies
  governing the emissions from a source
• This management control definition is
  essentially referring to financial control

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Other GHG Programmes
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Defining organisation for the EPC Scheme
A key objective is to engage the attention and
action of public and private sector Management
Boards. To take a top-down view when
identifying an organisation to see whether or
not it meets the qualification criteria for the
EPC scheme. To tag each mandatory half-hourly
meter with the organisation name for the EPC
scheme as defined by Defra.
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A Suggested Definition
For the purposes of the EPC Scheme organisation
might be defined as The UK organisation that has
financial control over the operation that is
consuming the electricity at the HH meter
site. In most instances, this definition is
expected to identify UK parent companies. A
company has financial control where an operation
is fully consolidated in financial
accounts. Landlord - tenant issues are discussed
later.
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Applying the EPC Scheme Rules
Step 1 Identify all UK organisation with
financial control over HH meter sites. Step 2
Remove organisations that have aggregated annual
mandatory HH meter consumption lt 3000 MWh. Step
3 Organisations that have more than 25 of their
energy use emissions in CCAs would petition for
exemption from EPC.
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The Need for Case Studies
To test that this definition works in the
majority of cases? To test how the definition can
be applied to the public sector? To test
landlord-tenant issues? We are looking for 20-30
case studies covering - the private sector
- the public sector - landlord-tenant Can
you help? Contact Carl Lynch -
carl.lynch_at_hedra.com Target date Monday 5th
February
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Landlord - Tenant
Where owner/long-term tenant is invoiced
directly for HH meter, then UK organisation that
has financial control over the owner/long-term
tenant is the EPC organisation. Sole tenant of
large property where tenant is invoiced directly
for HH meter, then UK organisation that has
financial control over the tenant is the EPC
organisation.
15
Landlord - Tenant (contd)
Multi-tenancy properties Scenario 1 Property
Management Company or Managing Agent is invoiced
for the HH meter consumption and pays the whole
electricity bill. It uses sub-meters to
apportionate share of the bill to the tenants or
tenants pay a service charge that includes
electricity use. EPC organisation would be UK
organisation that has financial control over the
Property Management Company or Managing
Agent. Scenaro 2 Tenant is invoiced directly for
the HH meter consumption. The Property Management
Company/Managing agent is invoiced directly for
common-parts usage (e.g. lifts, lighting and
central plant). Both tenant and Property
Management Company/Managing Agent could qualify
for the EPC Scheme, dependent on whether or not
their organisations agreggated consumption
exceeds 3000 MWh per annum.
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Summary of Suggested Approach for EPC registration

• Find MPANs in database, check site address ADD
• EPC Organisation/address
• EPC Co. Registration Number
• EPC Org contact name /address

Audit Process Sort non-registered companies by
billing organisation apply Dun Bradstreet
ownership check

• Consolidate data from all suppliers in database
• All MPANs
• Annual Consumption
• Billing Org/address
• Contract Org/address

Defra
Letters to non-compliant customers
Electronic File

• Notify each customer (billing or contract
  address) of their
• MPANS site addresses
• EPC qualification guidance

• Provide Annual return to Defra listing
• All MPANs
• Annual consumption
• Billing Org/address
• Contract Org/address

Electricty Suppliers
Letter to all MPAN customers
Submit data to register for EPC - website or
letter
Write to customer stating their legal obligation
to join EPC (subject to Defras information being
correct)

• Consolidate customer list of
• MPAN site address
• EPC Organisation name
• EPC Co. Registration name
• EPC Org contact name /address

• Check data from each supplier
• Consolidate data from all suppliers (if more than
  one) to check if gt3000MWh

Customer Decides EPC eligibility
Customer