I.OVERVIEW - Green-e Web view2. Center for Resource Solutions ... of a turbine in a pipeline or a turbine in an ... when reviewing Participant’s verification materials and preparing

Annual Verification Audit Protocol For Auditors and Sellers Participating in Green-e® Climate

Reporting Year 2012

Center for Resource Solutions1012 Torney Ave, 2nd Floor

San Francisco, CA 94129415-561-2100 | www.resource-solutions.org

Copyright © 2010 Center for Resource Solutions. All Rights Reserved.

Table of Contents

I. OVERVIEW..........................................................................................................................................1A. Objectives of Verification Audit Protocol................................................................................................1B. Summary Requirements..........................................................................................................................1

II. GENERAL VERIFICATION AUDIT PROVISIONS.......................................................................................3A. Scope of Verification Audit......................................................................................................................3B. Form of Engagement and Report............................................................................................................3C. Scope of Testing......................................................................................................................................4D. Period and Sales Covered by Reporting Requirements...........................................................................4E. Use of the Green-e Climate Protocol for Renewable Energy for Emissions Reductions in Certified

Products..................................................................................................................................................5F. Date the Annual Verification Submission Is Due to the Center for Resource Solutions..........................5G. Other Materials to be Submitted to the Center for Resource Solutions with the Annual Verification

Submission..............................................................................................................................................6H. Use of Sampling Techniques...................................................................................................................6I. Tests of Attributes...................................................................................................................................8J. Principal Testing to Be Performed...........................................................................................................8K. Applying General Procedures to Specific Cases......................................................................................8

III. SPECIFIC VERIFICATION AUDIT REQUIREMENTS..................................................................................9III.A. Verification of Emissions Reduction Retirements and/or Transfers.....................................................11B. Verification of Sales...............................................................................................................................17C. Verification of Product Content Label(s)...............................................................................................21D. Balance of Supply and Sales..................................................................................................................23E. Sales by Customer Location and Type...................................................................................................24F. Sales of Green-e Climate Certified Products by Third-party Distributors.............................................25

IV. GREEN-E CLIMATE PROTOCOL FOR RENEWABLE ENERGY: AUDITING PROCEDURES..........................28A. Verification of Eligibility and Ownership of Supply...............................................................................28

V. FINAL STEPS AND CHECKS.................................................................................................................31A. Additional Auditor Comments...............................................................................................................31B. Signature and Report Completion.........................................................................................................32

VI. AUDITOR’S QUALIFICATIONS.............................................................................................................33

VII. HOW TO GET HELP............................................................................................................................33

APPENDIX A: GLOSSARY OF TERMS.............................................................................................................................34

APPENDIX B: DESCRIPTION OF DOCUMENT TITLES AND OTHER INFORMATION NEEDED BY THE AUDITOR..................39

APPENDIX C: BASELINE EMISSION RATES FROM THE GREEN-E CLIMATE PROTOCOL FOR RENEWABLE ENERGY...........41

APPENDIX D: USING REGISTRIES IN GREEN-E CLIMATE ANNUAL VERIFICATION...........................................................42

APPENDIX E: AUDITOR’S ATTESTATION FOR AGREED-UPON PROCEDURES REPORT....................................................46

The Green-e Climate Annual Verification Audit Protocol RY2012Copyright © 2010 Center for Resource Solutions. All Rights Reserved.

I. OVERVIEWThis document, the Green-e® Climate Annual Verification Audit Protocol (“Audit Protocol”), addresses the verification reporting requirements for the Green-e Climate Program. The term Seller1, as used in this document, refers to a seller of greenhouse gas (GHG) emissions reductions (“emissions reductions”) that has a contract to sell one or more Green-e Climate Certified emissions reduction products (“Certified Products”). This document describes how to conduct the independent verification audit that Green-e Climate requires as part of its annual verification of Certified Products. The verification audit covers all sales of Certified Products in a particular calendar year, referred to as the Reporting Year (RY). The verification audit should be documented in an Agreed-Upon Procedures Report. This report and the entire Green-e Climate Annual Verification Submission (“Annual Verification Submission”) must be received at the Center for Resource Solutions (CRS) no later than June 3, 2013, and must be mailed to the address on the cover page of this document.

The verification audit is as follows.

Sellers must complete the Green-e Climate Verification Worksheets2 (“Worksheets”), described in the Green-e Climate Annual Verification Audit Instructions (“Instructions”), and provide these and supporting documentation described in the Green-e Climate Verification Checklist (“Checklist”) and Appendix B to an independent certified public accountant or certified internal auditor (“Auditor”).

The Auditor then follows this Audit Protocol to verify the accuracy of the information provided by the Seller.

The Auditor’s Agreed-Upon Procedures Report, the Seller’s completed Worksheets, and other supporting documents identified in the Checklist are returned to CRS for final review and acceptance. All of these documents are collectively called the Annual Verification Submission.

A. Objectives of Verification Audit ProtocolThe primary objectives of this Audit Protocol are:

To state the CRS assurance requirements relating to Green-e Climate; and

To provide guidance to Sellers and their Auditors on how to satisfy and report on these assurance requirements.

B. Summary Requirements Under Green-e Climate, the Seller is required to reconcile emissions reduction sales with emissions reduction retirements and/or transfers of emissions reduction ownership in order to

1 Terms defined in Appendix A are indicated in bold type the first time they appear.2 Documents necessary for the Auditor defined in Appendix B are indicated in bold italic type the first time they appear.

The Green-e Climate Annual Verification Audit Protocol RY2012 Page 1 of 47Copyright © 2010 Center for Resource Solutions. All Rights Reserved.

verify that they have retired/transferred enough emissions reductions in quantity and type to meet its customer demand for each specific Certified Product.

Green-e Climate requires that the Certified Products sold by Sellers meet a variety of criteria. These criteria address supply and sales, eligibility of emissions reductions, product marketing, and customer disclosure. Full Program eligibility criteria can be found in the Green-e Climate Code of Conduct. Each Certified Product offered by the Seller must be audited. The purpose of this Audit Protocol is to verify the criteria summarized in the list below. The specific information to be provided by the Seller and the tests to be performed by the Auditor is described in detail in Sections III, and in Section IV for Sellers using the Green-e Climate Protocol for Renewable Energy (“Protocol for Renewable Energy”) as their Endorsed Program.

1. Supply – the Seller retired and/or transferred eligible emissions reductions as defined by the Green-e Climate Program, and the retirement and/or transfer of eligible emissions reductions as reported by the Seller are accurate.3

2. Sales – sales of the Certified Product(s) are reported accurately.

3. The Seller has accurately reported the number and type of customers purchasing the Certified Product(s), the volume of eligible emissions reductions sold to those customers, and the sales channels through which they were sold.

4. Balance of supply and sales – retirements and/or transfers of eligible emissions reductions were sufficient in amount and type to meet Certified Product sales.

5. Information provided to customers on the Product Content Label regarding the emissions reduction project type, the Endorsed Program used, project location(s), vintage and the composition of Certified Product with respect to the aforementioned characteristics is accurate.

6. Information provided to customers on the Project List accurately details the projects from which emissions reductions are sourced at the time of sale.

Criteria Applicable only to Certified Products being wholly or partially supplied by emissions reductions according to the Protocol for Renewable Energy:

7. The emissions reductions are based on electricity generation from facilities that have been approved by CRS as eligible to be used by Sellers selling a Certified Product using the Protocol for Renewable Energy as an Endorsed Program.

8. The emissions reductions from approved renewable energy facilities were based on electricity generation in the calendar year in which the product was sold, the first three months of the following calendar year, and/or the last six months of the prior calendar year.

3 The process for the requirements of registries to substantiate ownership of emissions reductions through retirements and transfers is included in Appendix E of this document, Using Registries in Green-e Climate Annual Verification.


9. The emissions reductions were based on electricity generation occurring after the date the project was approved by CRS as eligible to be used as supply for Sellers selling a Certified Product.

10. The quantity of Megawatt-hours (“MWhs”) of renewable energy generation was accurately reported and correctly converted to metric tons of carbon dioxide equivalent (“CO2e”) using the conversion methodology set forth in the Protocol for Renewable Energy and described in Appendix C of this Audit Protocol, and the MWh of renewable energy were fully retired.

II. GENERAL VERIFICATION AUDIT PROVISIONS

A. Scope of Verification Audit The verification audit addressed in the Audit Protocol is for the annual verification reporting requirements of the Green-e Climate Program. This guidance is to be used by Sellers participating in Green-e Climate and their Auditors. CRS acknowledges that the procedures put forward in the Audit Protocol are sufficient when performed in their entirety.

B. Form of Engagement and ReportSeller must engage an independent certified public accountant to perform this verification audit engagement and report on agreed-upon procedures. Alternatively, the Sellers may elect to have their internal audit department (or the internal audit department of an affiliated company) perform these procedures, provided that the individual accountant signing the report for the internal audit department is a Certified Internal Auditor in good standing with the Institute of Internal Auditors (IIA). The term “Auditor” in this document refers to an independent public accountant or certified internal auditor. The verification audit engagement and report on agreed-upon procedures must be performed in accordance with the Green-e Climate Verification Audit Protocol, and the American Institute of Certified Public Accountants (AICPA) Statements on Standards for Attestation Engagements, Section 600, “Agreed Upon Procedures Engagements,” or under Statements on Auditing Standards, Section 622, “Engagements to Apply Agreed-Upon Procedures to Specified Elements, Accounts, or Items of a Financial Statement.”

The form of the report should follow the instructions in Section III of the Audit Protocol and as such specify the procedures performed and findings in a manner similar to reporting under Section AT600 or AU622 of the AICPA’s attestation or auditing standards, respectively. The Auditor should make reasonable efforts to ensure that the report is prepared in accordance with these minimum standards. In accordance with paragraph .41 of AICPA Section AU622 (in which “accountant” is equivalent to “Auditor”):

“The accountant need not perform procedures beyond the agreed-upon procedures. However, if, in connection with the application of agreed-upon procedures, matters come to the accountant’s attention by other means that significantly contradict the basis of accounting for the specified elements, accounts, or items of a financial


statement referred to in the accountant’s report, the accountant should include this matter in his or her report. For example, if, in connection with the application of agreed-upon procedures, the accountant becomes aware of a potentially material adjustment to that account by means other than performance of the agreed-upon procedures, the accountant should include this matter in his or her report.”

The Seller may elect a higher level of assurance with regard to its reporting requirements conducted by an Auditor. CRS welcomes attestation or similar audit-level assurance with regard to the information, forms and assertions described in this Audit Protocol. Such alternative reporting should also be discussed with Green-e Climate staff prior to submission of the report.

The Agreed-Upon Procedures Report must contain an original signature of the Auditor performing the audit on his or her company letterhead. Photocopies or facsimile copies are not accepted.

In addition, each Auditor must complete a copy of the Auditor Attestation to accompany each Agreed-Upon Procedures Report written. The Auditor Attestation must also contain and original signature, and is included as Appendix E.

C. Scope of TestingThe management of the Seller will need to make certain decisions regarding the scope of testing. This is due to the guidance involving agreed-upon procedures conducted in accordance with the AICPA, at Section AT600 or Section AU622, which results in an Auditor’s report that is in the form of procedures and findings and not in the form of an opinion or negative assurance. Additionally, the specified users of the Agreed-Upon Procedures Report are responsible for the sufficiency (nature, timing and extent) of the agreed-upon procedures, and assume the risk that such procedures might be insufficient for their purpose or that they might misunderstand or inappropriately use findings properly reported by the Auditors.

CRS has attempted to provide an Audit Protocol that requires limited decisions necessary from the management of the Seller or from the Auditor. However, in those situations where it is necessary, the Audit Protocol clearly indicates when scope decisions are necessary and who should make those decisions. If questions regarding the scope arise, please contact Green-e Climate staff for guidance, and for approval of any changes that may be necessary to address scope issues.

D. Period and Sales Covered by Reporting Requirements The Agreed-Upon Procedures Report must be prepared for Green-e Climate on a calendar year basis. For those companies that began participating in Green-e Climate in the middle of a RY, the reports should be prepared for the period starting on the date the Seller signed their Green-e Climate contract and ending on December 31 of the RY, or alternatively for the full RY if given permission of Green-e Climate staff.


RY2012 verification should cover sales made between January 1, 2012 and December 31, 2012—that is, sales that originated in 2012 or deliveries to be made in 2012 under Multi-year Purchase Agreements or contracts entered into in previous years. The time of delivery for sales that originated in 2012 may not line up exactly with the time of sale, and deliveries for 2012 sales may occur up until verification of RY2012 (which occurs in 2013). As long as the delivery is made in accordance with a 2012 sale or 2012 scheduled delivery under a multi-year purchase agreement, then the sale falls under the verification audit for RY2012. The year of sale or scheduled delivery should be evident based on Internal Reporting Documents and Billing Statements, but if it is not, then Seller can simply confirm the time of sale with the Auditor.

The time of sale and time of delivery are different from the vintage, which is when the reduction occurred. Sellers must report the vintage to customers on the Product Content Label. The reduction must have occurred, been verified and credited by an Endorsed Program, and been delivered (fully retired/transferred) by the Seller by the time of the verification audit. Green-e Climate has other vintage eligibility requirements only for emissions reductions from the Green-e Climate Protocol for Renewable Energy, which overlap from year to year4.

E. Use of the Green-e Climate Protocol for Renewable Energy for Emissions Reductions in Certified Products

If the Seller is sourcing all or part of their emissions reductions from renewable energy facilities according to the Protocol for Renewable Energy, additional auditing procedures are required. These procedures are detailed in Section IV, Green-e Climate Protocol for Renewable Energy: Auditing Procedures. These procedures are not applicable to Sellers that do not use projects approved under the Green-e Climate Protocol for Renewable Energy to supply their Certified Product(s). The Checklist indicates if the Seller is using the Protocol for Renewable Energy to supply their Certified Product(s). Please note that the Protocol for Renewable Energy will expire after RY2012.

F. Date the Annual Verification Submission Is Due to the Center for Resource SolutionsThe Agreed-Upon Procedures Report must be submitted to CRS and received no later than the date provided in the Reporting Year 2012 Annual Verification Submission Timeline and Deadlines (“Verification Timeline”). For RY2012, this due date is June 3, 2013. Materials may be submitted electronically or in hardcopy, though completed Verification Worksheets must be submitted both in hardcopy and in Microsoft Excel™ compatible electronic format. Electronic copies of materials and the electronic version of the Worksheets must be emailed to [email protected] (Subject: RY2012 Green-e Climate Verification Submission) and received no later than the date provided in the Verification Timeline for RY2012. Hard copy materials must be mailed to the following address.

Center for Resource Solutions1012 Torney Avenue, 2nd FloorSan Francisco, CA 94129

4 For RY2012, reductions from facilities approved under the Protocol for Renewable Energy must have occurred within 2012, the last two quarters of 2011, or the first quarter of 2013.


mailto:[email protected]

ATTN: Green-e Climate

G. Other Materials to be Submitted to the Center for Resource Solutions with the Annual Verification Submission

The following reports and information should accompany the Auditor’s Agreed-Upon Procedures Report:

Copies of the Product Content Label(s) for each Certified Product sold during RY2012;

Copy of the Project List informing the customer of the source of supply during RY2012;

Copies of offset card(s) active in RY2012 for each unique combination of organization type and Certified Product, where applicable;

Copies of Green-e Climate Verification Worksheets 1-7, both in hardcopy and in Microsoft Excel™ electronic format;

Registry Reports detailing the retirement and/or transfer of emissions reductions on behalf of Green-e Climate sales;

Written explanation from the Seller for any exceptions in the Worksheets; and

A completed Green-e Climate Attestation from Program Seller for the Seller for whom this verification audit is being conducted.

An original copy of the Auditor Attestation completed by the Auditor that has signed the Agreed-Upon Procedures Report; and

The Agreed-Upon Procedures Report must also contain an original signature of the Auditor performing the audit on his or her company letterhead.

H. Use of Sampling TechniquesIn certain procedures in Section III of the Protocol, the Auditor may use sampling techniques to test the attributes of the Participant’s data. Sampling criteria have been established by CRS to be followed in the performance of the agreed-upon procedures. Additionally, the Participant and the Auditor will need to make certain decisions and judgments in the process of establishing the appropriate sample size, following the guidance set forth in the AICPA AU Section 350, Audit Sampling. CRS will allow alternative methods to determine sample size than what is given below, provided that the resultant sample size is greater than or equal to that which results from the method below. If the Auditor chooses not to use approved sampling techniques or an alternative method that results in greater or equal sampling size, then 100% of the population must be tested.

CRS has determined that an attributes sampling methodology is most appropriate given the characteristics of the populations for which sampling is utilized in the agreed upon procedures. Attributes sampling is used to reach a conclusion about a population in terms of the rate of occurrence of a certain attribute. For the purposes of sampling, an attribute is defined as a characteristic that is either present or absent in a sampling unit. Each sampling event required in the agreed upon procedures will identify the applicable sampling unit, but in general the


sampling unit is each individual sale transaction, donation, or other transaction that conveys or retires GHG emissions reductions to the benefit of another party. Each occurrence (the presence or absence of an attribute) is given equal weight in the sample evaluation, regardless of the size of the transaction.

If the Auditor elects to utilize sampling techniques rather than test 100% of the population, they must first ascertain the population size. The population size is defined in terms of the number of sampling units. If the population is greater than or equal to 2,000 transactions, the Auditor will utilize Table A-1 in Appendix A of the AICPA Audit Guide on Audit Sampling. The Auditor will determine the sample size based on 5% risk of overreliance, tolerable deviation rate of 10% and expected deviation rate of 3%. If the population is less than 2,000 transactions, then the Auditor will utilize the table below to determine the appropriate sample size.

Population Sample Size

1-19 Same as population size

20-25 1926-30 2131-40 2541-50 2851-60 3161-70 3471-80 3681-90 37

91-100 39101-120 42121-140 44141-160 45161-180 47181-200 48201-300 52301-400 54401-500 56501-600 57601-700 58

701-1000 591001-1999 60

The table above was created by using statistical attribute sampling software using the above guidance.


Once the appropriate sample size has been determined, the sample selection should be made on a random basis with a random number generator or similar process as the preferred approach. Other sample selection methods (e.g., systematic), are acceptable, provided the resultant selection is ultimately random in nature (e.g., each member of the population has an equal chance of being selected). In any event, no more than 50% of the selected transactions may relate to any one month unless more than 50% of the population relates to the same month (in which case this should be included in the notes section of the applicable area of the agreed upon procedures report).

Once testing is complete, the Auditor must evaluate the results of the testing to ensure the objectives of the test were met. If a greater number of deviations are found than were planned for, then the test objective has not been met and there is a high risk that the deviation rate in the population exceeds the tolerable deviation rate. If the number of deviations noted in the initial sample selection exceeds 3%, then an additional sample must be selected. The additional sample should equal the lesser of the initial sample size or the remaining items in the population. Once the additional sample is tested, if the total number of deviations is less than 3% of the total expanded sample (sum of initial sample and additional sample), no further test procedures are necessary. If after expanding the sample, the total number of deviations exceeds 3% of the total expanded sample, please contact CRS for additional guidance.

I. Tests of AttributesWhen performing the procedures described in the Protocol, it is important that the Auditor understand the objectives and nature of the tests to be performed. Each of the procedures addressed in Sections III and IV is designed to test specific attributes, and the objectives of the procedures are noted at the beginning of each testing section. Each transaction or sampling unit may need to be tested for multiple attributes and any exception will need to be evaluated in accordance with the guidance noted above in Use of Sampling Techniques. Auditors who do not understand the objectives and nature of the tests to be performed should contact Green-e Climate staff for clarification.

J. Principal Testing to Be PerformedThe principal testing to be performed by the Auditor will be reading, vouching, comparing and recalculating information provided to the Auditor by the Participant. See Section III (and Section IV for Sellers using the Protocol for Renewable Energy as an Endorsed Program) for specific tests to be performed.

K. Applying General Procedures to Specific CasesThis document provides guidance and specific examples of the procedures to be performed in order to provide CRS with assurances as to the accuracy and completeness of the Worksheets that are to be completed by the Seller. The nature and complexity of supply and sale transactions differ among Sellers participating in Green-e Climate. Additionally, accounting systems and transaction data structures of each Seller will vary along with the types of information and reports internally available. Accordingly, the following requirements enumerated in the following sections are not intended to be all-inclusive, but rather represent


the minimum standards to be applied in performing tests of the documentation associated with the information submitted to CRS by the Seller. Judgment will need to be applied in order to execute the agreed-upon procedures engagement under each specific circumstance.

III. SPECIFIC VERIFICATION AUDIT REQUIREMENTS Section III (and Section IV for Sellers using the Protocol for Renewable Energy as their Endorsed Program) directs the Auditor to perform a number of procedures for the following purposes:

Test emissions reduction retirements and/or transfers;

Verify eligibility of the emission reductions retired and/or transferred;

Test emissions reduction sales;

Verify Product Content Label(s);

Verify Project List;

Verify balance of supply and sales;

Verify sales of emissions reductions by customer type, location and sales channel; and

Verify completeness of verification submittal

The Auditor, including a Certified Internal Auditor, shall not complete the Worksheets. The Worksheets must be completed by an employee of the Seller that is not performing the audit or part of the Seller’s internal audit department.

General Notes on Performing the Audit and Preparing the Agreed-Upon Procedures Report

The Agreed-Upon Procedures Report must be produced by specifically responding to each review step beginning on page 11 through Section V of this Protocol. Each review step for the Auditor is followed by a box as shown in the example below:

Step EXAMPLE was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

Each review step is numbered in accordance with the structure of this document. The first step for Worksheet 1 review is “III.A.1.” In the box that corresponds to each review step, the Auditor must check one of the three checkboxes indicating whether the step was completed as written or whether the step did not apply. Also, the Auditor must provide explanation of any exceptions, any notes resulting from completion of the procedure, any notes on how the Auditor’s review differed from the specified instructions, and any reasons that “N/A” was checked because the step did not apply.

Once the Auditor has responded to each review step, the Auditor must print page 11 through Section V of this document, with Section V.B on company letterhead, and sign Section V.B. This


signed printout, along with the Auditor Attestation in Appendix E, constitutes the Agreed-Upon Procedures Report due to CRS.

Certain Worksheets will not be applicable to all Sellers. Ensure that at a minimum, all Worksheets have been filled in with RY, Date Completed, Seller Name and Name of Person Completing the Form. In the case that the given Worksheet is not applicable, ensure that “Not Applicable” has been entered in the first row of the first table in the Worksheet. Note any exceptions. If the Worksheet is not applicable, note this in the first available space in that Worksheet’s section of the Agreed-Upon Procedures Report.

If review of documents provided by Participant and the review of this Protocol lead the Auditor to believe that a certain Worksheet(s) is applicable to the Participant’s sales of a Green-e Climate Certified Product despite being filled in as “Not Applicable,” note this in the first available space in that Worksheet’s section of the Agreed-Upon Procedures Report. A description of each Worksheet appears in Appendix B.

For Certified Products wholly or partially supplied by emission reductions from projects approved under the Protocol for Renewable Energy, all entries in the Worksheets must be recorded in metric tons CO2e, and not in MWh of renewable energy, unless otherwise specified.

Starting on the page 10, the review steps for the Auditor to complete and on which the Auditor must comment begin. The introductory language before Section III.A is to be included in the Agreed-Upon Procedures Report. The Auditor must fill in the blank spaces in this introductory language.

If Green-e Climate Staff find that the Agreed-Upon Procedures Report is incomplete or prepared incorrectly, the Annual Verification Submission will not be considered complete until the Agreed-Upon Procedures Report is satisfactorily revised to reflect that the full audit was conducted correctly in accordance with this Audit Protocol.

Auditors that do not provide a satisfactory Agreed-Upon Procedures Report will not be eligible to be listed on the list of auditors on the Green-e website ( http://www.green-e.org/auditors.html ), may be removed from that list if the Auditor has appeared on it in the past, may be placed on probation, and may be barred from performing future Green-e Climate audits, at the sole discretion of Green-e Climate staff. For Auditors placed on probation, should the quality of the subsequent year’s Agreed-Upon Procedures Reporting not improve, the Auditor may be deemed unacceptable to perform the Green-e Climate Annual Verification Audit thereafter.


http://www.green-e.org/auditors.html

Independent Auditor’s Report on Applying Agreed-Upon Procedures

To the Board of Directors of [Participant Company for which Audit was Performed] and Center for Resource Solutions (CRS):

[Name of Auditor Company] has performed the procedures enumerated below, which were agreed to by [Participant Company for which Audit was Performed], solely to assist [Participant Company for which Audit was Performed] with respect to complying with annual reporting requirements of the Center for Resource Solutions’ Green-e Climate program for the year ended December 31, 2012. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the specified users of the report.

Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

III.A. Verification of Emissions Reduction Retirements and/or TransfersThe objectives of performing these procedures are to provide assurances relating to the following:

The emissions reductions retired and transferred by Seller were eligible emissions reductions and accurately measured, reported and documented.

1. Obtain a completed copy of Worksheet 15 from the Seller, containing the detail of the annual retirements and transfers of emissions reductions used to supply a Certified Product. For every project that is identified on Worksheet 1, the Project Name, Project Type, Project Location (country), Project Start Date (year), Vintage (year), Endorsed Program, Project Verifier6, Supply of Emissions Reductions (Metric tons CO2e), Registry Name, Facility ID in Registry, Registry Serial ID Number(s) (range), and Name of Wholesale Supplier (where applicable) must be disclosed on Worksheet 1. Note any exceptions.

Step III.A.1 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. For each project listed on Worksheet 1, confirm that the Project Name, Project Type, Project Location, and Endorsed Program match the information found on the Checklist. Note if any projects on the Checklist are not included on Worksheet 1, and if any projects on Worksheet 1 are not included on the Checklist.

Step III.A.2 was performed: Yes. No. N/A.

5 For descriptions of the individual Worksheets, see Appendix B.6 The project verifier may be left blank for projects approved under the Green-e Climate Protocol for Renewable Energy.


Exceptions, Notes, Reason for “No” or “N/A”:

3. For ownership of emissions reductions from the Climate Action Reserve (CAR), the Verified Carbon Standard (VCS), the Clean Development Mechanism (CDM), the Gold Standard (GS), and the Green-e Climate Protocol for Renewable Energy (PRE) listed on Worksheet 1, the Seller must have a Registry Report from an Approved Registry demonstrating the retirement or transfer of emissions reductions for Certified Product sales. Obtain these Registry Reports.


a. For each unique row on Worksheet 1, verify that the combination of Project Name7 (Column 1A) and Facility ID in Registry (Column 1J) matches the project information in the Registry Reports. Note any exceptions.

Step III.A.3.a was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

b. For each unique row on Worksheet 1 that lists the Endorsed Program as CAR, VCS, GS, or CDM, verify that the combination of Project Name (Column 1A), Vintage (year) (Column 1E), Facility ID in Registry (Column 1J), Supply of Emissions Reductions (metric tons CO2e) (Column 1H), and Registry Serial ID Number(s) (Column 1K) reported matches and corresponds to retirements/transfers, or aggregations thereof8, listed on the Registry Reports. Note a discrepancy in any of the above categories as an exception. Also for these retirements/transfers, please note if the “retirement reason” or “memo” field, and/or the “subaccount name” in the Registry Report indicates retirement for a voluntary program other than Green-e Climate or a compliance program, or for a RY that is not RY2012.

Step III.A.3.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

c. On all Registry Reports, examine the Registry Serial ID Number(s) associated with all retirements/transfers indicated or marked as being for RY2012 Green-e Climate Certified sales and verify that these numbers are included in the numbers or ranges reported in Column 1K on Worksheet 1. Note any exceptions.

Step III.A.3.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

d. Confirm the accuracy of all Registry Reports by accessing Seller’s Registry electronic account(s) and comparing Registry Reports to actual data in the Seller’s account(s).

7 Project name will not appear on the Registry Reports of certain registries (e.g. ERCOT). Where this is the case, look up the project name designated by the Facility ID that is listed on the Registry Report in the Registry and verify that this matches the project name reported on Worksheet 1.8 Individual retirements/transfers listed in Registry Reports may be aggregated in Worksheet 1 by vintage year.


Follow the instructions in Section I of Appendix D and verify that the information in the Registry matches the information on the Registry Reports. Note any exceptions.

Step III.A.3.d was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

e. The Registry used must be an Approved Registry listed on the Checklist. Note any exceptions.

Step III.A.3.e was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

4. For each project that lists the Endorsed Program as CAR, VCS, GS, or CDM, verify that the total unique Registry Serial ID Number(s) in Column 1K equals the total Supply of Emissions Reductions in Column 1H (if a range is provided, end serial ID - beginning serial ID + 1 = metric tons reported in Column 1H). Note any exceptions.


5. Obtain a copy of the Seller’s Product Content Label(s) for each Certified Product. Examine the projects listed on Worksheet 1 and verify that each project contains an eligible combination of Project Type, Project Location (country), Vintage (year), and Endorsed Program, in Columns 1B, 1C, 1E, and 1F of Worksheet 1, respectively, according to the Seller’s Product Content Label(s). Note any exceptions.


6. Examine the vintage year reported in Column 1E for each unique combination of Project Type, Project Location (country), and Endorsed Program on Worksheet 1 and verify that the Vintage (year) reported in Column 1E matches or falls within the Vintage (year or range of years) reported in Column 3D of Worksheet 3 for that combination.


7. Examine the projects listed on Worksheet 1 and verify that they are included in the Seller’s Project List. Note any exceptions.



8. For hydropower facilities listed on Worksheet 19 where the Project Location (country) in Column 1C is listed as the United States or Canada, verify that at least one of the following is true for each hydropower facility listed:

a. The facility is listed on the Low Impact Hydropower Institute (LIHI) website, at: http://www.lowimpacthydro.org/certified-facilities/; also in this case, check that the date of LIHI certification is on or before the first generation date of any emissions reduction being claimed from a LIHI Certified facility; note any exceptions;

b. For Canadian hydropower facilities only, the facility is listed as EcoLogoTM Certified at: http://www.ecologo.org/en/participatingcompanies/10; also in this case, check that the date of EcoLogo certification is on or before the first generation date of any emissions reduction being claimed from a EcoLogo Certified facility; and/or

c. The hydropower facility consists of a turbine in a pipeline or a turbine in an irrigation canal.

Explain how these were confirmed11 and note any exceptions.


9. For hydropower facilities listed on Worksheet 1 where the Project Location (country) in Column 1C is listed as a country other than the United States or Canada, verify that the nameplate capacity of the hydropower facility is less than 10MW, or if it is a “grouped project” (consisting of more than one instance of the project activity at multiple locations within a defined geographic boundary), which is certified as a group or program of activities, verify that no single instance of the project within the group exceeds 10MW nameplate capacity.12 Note any exceptions.


9 Where neither the Project Type or Project Name reported on Worksheet 1 indicate whether or not the project is a hydropower project (e.g. Project Type is reported as “Renewable Energy” and the Project Name does not contain words indicating the technology type, such as the word wind, solar, hydro, etc.), check the Registry Reports or elsewhere in the Registry to confirm.10 If the EcoLogo website does not list the supplying facility, request documentation from the Seller that shows that the facility is EcoLogo Certified.11 Confirming (c) may require accessing Project Description documentation for the project, which for VCS, GS, and CDM projects is available through the Registries and through public reports or project registries available on their respective websites. For PRE projects, confirming (c) may require accessing documentation describing the project, which can be obtained from the Seller, through public reports of the tracking systems, and/or from the Facility Assessment Documents prepared by CRS (please contact Green-e Climate staff for these Facility Assessment Documents).12 Confirming this may require accessing Project Description documentation for the project, which for VCS, GS, and CDM projects is available through the Registries and through public reports or project registries available on their respective websites.


http://www.ecologo.org/en/participatingcompanies/

http://www.lowimpacthydro.org/certified-facilities/

10. Examine any projects where the Endorsed Program in Column 1F is listed as CAR and the Project Type in Column 1B is listed as Forestry, and verify that the project was certified/validated under version 3.0 or later of the CAR Forest Protocol.13 Note any exceptions.


11. Examine any projects where the Endorsed Program in Column 1F is listed as VCS.

a. Confirm that the project was validated according to version VCS 2007 or VCS 3.0.14 Note any exceptions.


b. If the project was validated according to version VCS 2007 and used VCS “Test 2 – Performance Test” to demonstrate additionality (see the Project Design Document for the project, available on the VCS website15), confirm that the performance standard used explicitly lists eligible technologies. Note any exceptions.


c. Where the Project Type in Column 1B is NOT listed as Agriculture, Forestry and/or Land Use, confirm that the period of time for which GHG reductions/removals are verified (verification period) does not exceed three years.16

Step III.A.11.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

13 Verifying this may require accessing documentation for the project, which can be obtained through the CAR Registry or using the Project Documentation link here: https://thereserve1.apx.com/myModule/rpt/myrpt.asp?r=111. Go to “Projects” under public reports.14 Confirming this may require accessing documentation for the project, which can be obtained through the VCS Registry or through the VCS Project Database located here: https://vcsprojectdatabase2.apx.com/myModule/Interactive.asp?Tab=Projects&a=1. Auditors should review the validation (not verification) report and Project Design Document (PDD). If still unsure, Auditors should contact VCS at 202-296-2312.15 The PDD can be obtained through the VCS Registry or through the VCS Project Database located here: https://vcsprojectdatabase2.apx.com/myModule/Interactive.asp?Tab=Projects&a=1.16 Confirming this may require accessing documentation for the project, which can be obtained through the VCS Registry or through the VCS Project Database located here: https://vcsprojectdatabase2.apx.com/myModule/Interactive.asp?Tab=Projects&a=1. Auditors should review the verification (not validation) report. If still unsure, Auditors should contact VCS at 202-296-2312.


https://vcsprojectdatabase2.apx.com/myModule/Interactive.asp?Tab=Projects&a=1



https://thereserve1.apx.com/myModule/rpt/myrpt.asp?r=111

https://thereserve1.apx.com/myModule/rpt/myrpt.asp?r=111

d. Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use project, confirm that the period of time for which GHG reductions/removals are verified (verification period) does exceed seven years.17

Step III.A.11.d was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

e. Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use, verify receipt of proof from Seller that the project meets the native species requirement under the Green-e Climate Standard v.2.0 (Section 6.4.d, pg. 10). Note any exceptions.

Step III.A.11.e was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

f. Where the Project Type in Column 1B is listed as Agriculture, Forestry, and/or Land Use, and where the project start date is before 2002, verify that the project was validated with 5 years of the start date.18

Step III.A.11.f was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

12. For rows in Worksheet 1 listing the Green-e Climate Protocol for Renewable Energy (or PRE) as the Endorsed Program in Column 1F:

a. Verify that Sellers have reported the Supply of Emissions Reductions (Column 1H) in metric tons of CO2e, not megawatt-hours (MWhs) of renewable energy, or any other unit (e.g. pounds) of CO2e. Note any exceptions.


b. Verify that the sum of Supply of Emissions Reductions (metric tons CO2e) Column 1H matches the total Metric tons CO2e in the last row of Column 7I on Worksheet 7. Note any exceptions.


13. For any project listed on Worksheet 1 that lists Green-e Climate or the Protocol for Renewable Energy (or PRE) as the Endorsed Program, verify that project information matches all project details reported on Worksheet 7, including Project Name, Project Start

17 Ibid.18 Confirming this may require accessing documentation for the project, which can be obtained through the VCS Registry or through the VCS Project Database located here: https://vcsprojectdatabase2.apx.com/myModule/Interactive.asp?Tab=Projects&a=1. If still unsure, Auditors should contact VCS at 202-296-2312.



Date (year), Vintage/Year of Generation, Facility ID in Registry, Registry Serial ID Number(s), and Metric tons CO2e.19 Note any exceptions.


14. Test the mathematical accuracy of Worksheet 1. Agree total Supply of Emissions Reductions in Column 1H of Table 1 to the total listed in the last row of Column 1H. Note any exceptions.


B. Verification of SalesThe objectives of performing these procedures are to provide assurances relating to the following:

The emissions reductions sold were accurately measured and reported.

1. Obtain a completed copy of Worksheet 2. Reference the Seller’s Checklist for a list of the products that must be included in Worksheet 2. Note if any products on the Checklist are not included on Worksheet 2, or if any products on Worksheet 2 are not included on the Checklist.

Step III.B.1 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. Obtain copies of Internal Reporting Documents that Indicate Sales (“internal reporting documents”) from the Seller that were used to complete Worksheet 2. They should contain the details of sales or scheduled deliveries under multi-year purchase agreements per customer for each Certified Product sold, the type of Certified Product sold (Customized Mix or Fixed Mix), the sales channel utilized (online sales, offline sales, multi-year purchase agreement, or Third-party Distributor), and differentiate between individual, commercial, and wholesale customers (see Appendix B for a list of documents that Sellers should supply to their Auditor). From the Internal Reporting Documents:

a. Recalculate the Total Sales (metric tons CO2e) per Certified Product and agree this to sales recorded in Column 2K. Note any exceptions.

Step III.B.2.a was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

b. Recalculate the sales and scheduled deliveries to individual customers per Certified Product and agree this to the sum of Columns 2B, 2D and 2G. Note any exceptions.

19 Be aware that Worksheet 7 is further disaggregated into vintage quarter (whereas Worksheet 1 is disaggregated only into vintage year), so project information reported in a single row in Worksheet 1 may be reported in multiple rows in Worksheet 7.


Step III.B.2.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

c. Recalculate the sales and scheduled deliveries to commercial customers per Certified Product and agree this to the sum of Columns 2C, 2E and 2H. Note any exceptions.

Step III.B.2.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

d. Recalculate the sales and scheduled deliveries to wholesale customers per Certified Product and agree this to the sum of Columns 2F and 2I.20 Note any exceptions.

Step III.B.2.d was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

e. Recalculate the sales by Third-party Distributors per Certified Product and agree this to sales recorded in Column 2J.21 Note any exceptions.

Step III.B.2.e was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

f. Recalculate the scheduled RY2012 deliveries under multi-year purchase agreements per Certified Product and agree this to the sum of Columns 2G, 2H, and 2I.22 Note any exceptions.

Step III.B.2.f was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

3. Using the Sampling Guidelines in Section II.H, select a sample of customer sales transactions detailed in the Internal Reporting Documents for customers that purchased fewer than 25,000 metric tons CO2e of emissions reductions from Seller.23,24 Report the total population size and the sample size chosen.

Step III.B.3 was performed: Yes. No. N/A.Total population: Sample size: Exceptions, Notes, Reason for “No” or “N/A”:

20 Sales to wholesale customers should not be included in sales to individuals or commercial customers in Columns 2B through 2E. Rather, wholesale sales should be recorded separately in Columns 2F and 2I.21 Third-party Distributor sales should not be included in sales to individuals or commercial customers in Columns 2B through 2E. Rather, Third-party Distributor sales should be recorded separately in Column 2J.22 Sales recorded in Columns 2B through 2F should not include scheduled RY2012 deliveries under multi-year purchase agreements. Rather, scheduled RY2012 deliveries under multi-year purchase agreements with individual, commercial, and wholesales customers should be recorded separately in Columns 2G, 2H, and 2I, respectively.23 Transactions made through Third-party Distributors should be included as a part of the population being sampled. Auditor should be granted access to all Third-party Distributor Billing Statements. See Step III.F.2. 24 Sales of 25,000 metric tons CO2e or more to an individual customer will be checked as part of Worksheet 3.


4. For each transaction selected in III.B.3:

a. Obtain copies of Billing Statements and/or any other necessary records that contain the details of the emissions reductions sales by Certified Product by customer, if different from Internal Reporting Documents. Also, sales made in RY2012 could include amounts of Certified Product to be delivered in RY2012 under multi-year agreements that were entered into in previous RYs. Specify what type of records are used.


b. Using Billing Statements, confirm that the emissions reductions sold per customer that is reported on the Internal Reporting Documents is accurate in terms of the amount of emissions reductions and type of Certified Product sold. Note any exceptions.


c. For Sellers using the Green-e Climate Protocol for Renewable Energy, note if the Billing Statements or contract language indicates that actual sales were made in units other than CO2e (metric tons or pounds) (for example, note if sales were made in MWh), and in this case note the unit used.

Step III.B.4.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

d. Verify that the sale of each Certified Product in RY2012 occurred within the range of “Dates when Active in 2012” reported on the Checklist. Note any exceptions.

Step III.B.4.d was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

e. Note if review of RY2012 Billing Statements reveals evidence or indication that Certified Sales were made (Billing Statements exist for sales) which were not reported on Internal Reporting Documents.

Step III.B.4.e was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

5. Using the Sampling Guidelines in Section II.H, select a sample of transactions detailed in the Internal Reporting Documents for customers scheduled to receive deliveries in RY2012 in accordance with multi-year purchase agreements. Report the total population size and the sample size chosen.

Step III.B.5 was performed: Yes. No. N/A.Total population: Sample size:



a. For each transaction selected in III.B.5, verify that customer was informed of quantity to be delivered each year, either within the agreement (schedule of delivery) or historically by the time of this audit. Note any exceptions.


b. For each transaction selected in III.B.5, verify that a 2012 Product Content Label was delivered to the customer by the time of this audit, OR that a Green-e Climate Product Content Label is provided and maintained on Seller’s website. Note any exceptions.


6. Using the Sampling Guidelines in Section II.H, select a sample of customer sales transactions detailed in the Internal Company Documents for customers that purchased Customized Mix Products from Seller. Report the total population size and the sample size chosen.

Step III.B.6 was performed: Yes. No. N/A.Total population: Sample size: Exceptions, Notes, Reason for “No” or “N/A”:

a. For each transaction selected in III.B.6, compare the information reported on the Internal Reporting Documents to a copy of the Product Content Label that the customer received and verify that the customer received the emissions reductions from the correct type of project, project location (by country) and Endorsed Program. Note any exceptions.


b. For each transaction selected in III.B.6, verify that the customer was provided with a Product Content Label reflecting the customer’s unique selected proportions of different GHG emissions reductions from project type(s), location(s), and Endorsed Program(s), within 30 days of purchase (i.e. a Product Content Label on which the proportions of each are not listed as “up to 100%”). Note any exceptions.


7. Test that Total Third-party Distributor Sales (metric tons CO2e) in Column 2J matches the sum of Columns 6G and 6N on Worksheet 6 for each Certified Product.

Step III.B.7 was performed: Yes. No. N/A.



8. Test the mathematical accuracy of Table 2:

a. Agree that the sum of Columns 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, and 2J equals Column 2K for each row. Note any exceptions.


b. Agree that the sum of rows in Columns 2B, 2C, 2D, 2E, 2F, 2G, 2H, 2I, and 2J, respectively, equals the total listed in the last row of each Column. Note any exceptions.


C. Verification of Product Content Label(s) Verification of all products’ disclosure claims is required. The objectives of performing these procedures are to provide assurances relating to the following:

The quantity and characteristics of the emissions reductions sold are accurately calculated and reported.

1. Obtain from Seller a completed copy of Worksheet 3. Reference the Seller’s Checklist and Product Content Label(s) to identify the Certified Products that must be included in Worksheet 3. The name of each Certified Product must be input in the cells below “Certified Product 1” in Columns 3F and 3G, below “Certified Product 2” in Columns 3H and 3I, etc. as needed. All Certified sales for RY2012, including those to the large retail customers also listed in Table 3.2, must be included in Table 3.1. Sales made through Third-party Distributors should be included in Table 3.1 as well.

a. Note if any Certified Products included on the Checklist are not included on Worksheet 3, or if any Certified Products included on Worksheet 3 are not included on the Checklist.

Step III.C.1.a was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

b. For each Certified Product, verify that the information listed in Worksheet 3 matches the information provided on the Checklist, including the Project Type(s), Project Location(s) (country), and Endorsed Program(s) included, and whether the product is a Fixed or Customized Mix Product. Note any exceptions.

Step III.C.1.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:


c. For each Certified Product, verify that the information listed in Worksheet 3 matches the information provided on the Product Content Label for that product, including the Project Type(s), Project Location(s) (country), and Endorsed Program(s) included.25 Note any exceptions.

Step III.C.1.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. For each Certified Product, obtain from the Seller a copy of the RY2012 Product Content Label. If the project type, project location, or Endorsed Program of a given Certified Product changed during RY2012, the Certified Product should be treated as a new product and should be recorded on a new pair of columns (e.g. 3F and 3G, 3H and 3I, etc. if needed) for reporting purposes. For each Fixed Mix Product being tested (denoted by a check mark next to “Fixed” in columns 3F, 3H, etc.), agree the percentages in the column labeled “% of Product” (Column 3G, 3I, 3K, etc. if needed) on Worksheet 3 with the “% of product” claims displayed on the Product Content Labels and on the Checklist. Note as an exception any differences that are greater than 20% of the percent promised on the Product Content Label and listed in the Checklist. For example, if the Product Content Label promised 30% of a specific combination of project type, location and Endorsed Program, the actual percent on Worksheet 3 must fall between 24% and 36% (30% +/- (.2*30%), or 30% +/- 6%). If the difference is greater than 20%, please attach to the Agreed-Upon Procedures Report the Seller’s explanation for this difference.

Step III.C.2 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

3. Examine the Vintage (year or range of years) listed in Column 3D on Worksheet 3 and verify that they fall within the vintage years displayed on the Product Content Label for each applicable Certified Product. Note any exceptions.


4. Test the mathematical accuracy of Table 3.1. Agree the sum of Sales for Products (Columns 3F, 3H, 3J, 3L, 3N, etc.) equals Total Sales in Column 3E for each row. Note any exceptions.


5. Agree the total Sales for Product (metric tons CO2e) in the last row of Columns 3F, 3H, 3J, 3L, 3N, etc.26 with the totals listed for each Certified Product in Column 2K of Worksheet 2. Note any exceptions.

Step III.C.5 was performed: Yes. No. N/A.

25 The project type and project location reported on Worksheet 3 must be as specific as what is specified on the Product Content Label. 26 Sales made through Third-party Distributors should be included in these columns.



6. Using Internal Reporting Documents (obtained in III.B), and Billing Statements if necessary, confirm that all customers listed on these documents that purchased 25,000 metric tons CO2e or more in total are listed in Table 3.2 of Worksheet 3. Note any exceptions.


7. For each customer listed in Table 3.2 in Worksheet 3, compare the Metric tons CO2e purchased in RY2012 reported in Column 3R to copies of Billing Statements and/or any other necessary records that contain the details of the emissions reductions sales by Certified Product by customer (specify in the report what, if any, other record was used). Verify that the Certified Product name and Metric tons CO2e reported in Table 3.2 accurately matches the Billing Statements for sales to this customer in RY2012. Note any exceptions. Also, note if Billing Statements reveal that sales were made in units other than CO2e, and in this case note the unit used.


D. Balance of Supply and SalesThe objectives of performing these procedures are to provide assurances relating to the following:

The Seller retired or transferred correct tons CO2e to meet its customer sales.

1. Obtain a completed copy of Worksheet 4 from the Seller, containing the detail of the balance of supply and sales of emissions reductions sold as Green-e Climate certified. Referencing Worksheet 1, verify that each unique combination of Project Type (Column 1B), Project Location (Column 1C), and Endorsed Program (Column 1F) appears on Worksheet 4 in Columns 4A, 4B, and 4C, respectively. Note any exceptions.

Step III.D.1 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. For each unique combination of Project Type, Project Location and Endorsed Program on Worksheet 1, sum the Supply of Emission Reductions (metric tons CO2e) in Column 1H and verify that this matches the Supply listed in Column 4D of Worksheet 4 for each unique combination. Note any exceptions.


3. Referencing Worksheet 3, for each unique combination of Project Type (Column 3A), Project Location (Column 3B), and Endorsed Program (Column 3C), verify that the Total


Sales in each row of Column 3E matches the Sales listed in Column 4E of Worksheet 4. Note any exceptions.


4. Test the mathematical accuracy of Column 4F, Net: Supply minus Sales, by subtracting Sales in Column 4E from Supply in Column 4D for each row. Note any exceptions.


5. Report as an exception if the “Net: Supply minus Sales” is a negative number in any row on Worksheet 4. For each instance, attach to the Agreed-Upon Procedures Report the Seller’s explanation for this exception.


E. Sales by Customer Location and TypeThe objectives of performing these procedures are to provide assurances relating to the following:

The emissions reductions sold by customer type and location were accurately measured and reported.

1. Obtain a completed copy of Worksheet 5 and copies of Internal Reporting Documents from the Seller that were used to complete Worksheet 5. They should contain the details of sales per customer for all Certified Products sold, the sales channel utilized (including sales made through Third-party Distributors), and differentiate between individual, commercial, and wholesale customers, as well as the location of the customer by state.27 From the Internal Reporting Documents, recalculate the amount of emissions reductions sold by customer type (individual, commercial and wholesale) and Third-party Distributor sales by location and agree this to the sales reported in Worksheet 5. Sales recorded in Columns 5B through 5E should include both online and offline sales, as well as multi-year purchase agreement deliveries. Note any exceptions. The number of customers reported on Table 5 (Columns 5F through 5I) does not have to be tested.

Step III.E.1 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. Test the mathematical accuracy of Worksheet 5. Agree that the sum of rows in Columns 5B, 5C, 5D, and 5E, respectively, equals the total listed in the last row of each Column. Note any exceptions.

27 Sales to wholesale customers should not be included in sales to individuals or commercial customers in Columns 5B and 5C.



3. Verify that the total Sales to Individuals in the last row of Column 5B of Worksheet 5 equals the sum of the totals in the last row of Columns 2B, 2D, and 2G of Worksheet 2. Note any exceptions.


4. Verify that the total Sales to Commercial Customers in the last row of Column 5C of Worksheet 5 equals the sum of the totals in the last row of Columns 2C, 2E, and 2H of Worksheet 2. Note any exceptions.


5. Verify that the total Third-party Distributor Sales in the last row of Column 5D of Worksheet 5 equals the total Third-party Distributor Sales in the last row of Column 2J of Worksheet 2. Note any exceptions.


6. Verify that the total Wholesale Sales in the last row of Column 5E of Worksheet 5 equals the sum of the totals in the last row of Columns 2F and 2I of Worksheet 2. Note any exceptions.


F. Sales of Green-e Climate Certified Products by Third-party Distributors Worksheet 6 applies only to Sellers selling Certified Products through one or more Third-party Distributors. The objectives of performing these procedures are to provide assurances relating to the following:

The emissions reductions sold by Third-party Distributors were accurately measured and reported.

1. Obtain a completed copy of Worksheet 6 from Seller. Reference the Checklist to identify the Third-party Distributors and Organization Types selling Offset Cards that must be included in Worksheet 6.

a. The name of each Third-party Distributor must be input in the first cell in Columns 6B, 6C, 6D, 6E, 6F, etc. as needed in Table 6.1. Note if any Third-party Distributors included in Table 6.1 are not included on the Checklist, or if any Third-party Distributors included on the Checklist are not included in Table 6.1.

Step III.F.1.a was performed: Yes. No. N/A.



b. Confirm that all Certified Products listed in Column 6A of Table 6.1 are fixed-mix products by referencing the Seller Checklist. Note any exceptions

Step III.F.1.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

c. The name of each Organization Type selling Offset Cards on behalf of Seller must be input in the first cell in Columns 6I, 6J, 6K, 6L, 6M, etc. as needed in Table 6.2. Note if any Organization Types included in Table 6.2 are not included on the Checklist, or if any Organization Types included on the Checklist are not included in Table 6.2.

Step III.F.1.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. Obtain copies of Third-party Distributors’ Internal Reporting Documents that were used by Seller to complete Worksheet 6. For traditional Third-party sales (reported in Table 6.1), these documents should contain the details of Third-party sales of Certified Product(s) per customer. For Third-party sales of offset cards (reported in Table 6.2), these documents should contain the number of cards (and equivalent number of tons CO2e) sold by each individual Third-party Distributor within each Organization Type by Certified Product. Auditor should have access to all Internal Reporting Documents and Billing Statements of the Third-party Distributor for sales of Certified Product(s) and Offset Cards. Note if access to Third-party Distributor records was not granted.

Step III.F.2 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

3. For traditional Third-party Distributors (not distributors of Offset Cards), if the Distributor reported no sales for RY2012, it must provide a letter on company letterhead with a wet signature from the manager of emissions reduction sales attesting that in RY2012 they:

a. Made no Green-e Climate Certified sales,

b. Did not represent any sales as Green-e Climate Certified, and

c. Did not authorize any of their sales to be represented as Green-e Climate Certified.

Verify that for all traditional Third-party Distributors with zero sales a letter was received attesting to these statements.



4. Using the Internal Reporting Documents, recalculate the amount of emissions reductions sold by each Third-party Distributor for each Certified Product and agree this to the sales reported in Table 6.1. Note any exceptions.


5. Verify that RY2012 sales by each Third-party Distributor occurred within the range of “Dates when Active in 2012” for Third-party Distributors reported on the Checklist. Note any exceptions.


6. Using the Internal Reporting Documents, recalculate the amount of emissions reductions sold as Offset Cards by Third-party Distributors for each Certified Product and agree this to the sales reported in Table 6.2. Note any exceptions.


7. Verify that RY2012 sales of Offset Cards by each Third-party Distributor occurred within the range of “Dates when Active in 2012” for Distributors of Offset Cards reported on the Checklist. Note any exceptions.


8. Test the mathematical accuracy of all products on Worksheet 6:

a. Agree total Sales by each Third-party Distributor (in Column 6B, 6C, 6D, 6E, 6F, etc. as needed) of Table 6.1 to the total listed in the last row of each column. Note any exceptions.

Step III.F.8.a was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

b. Verify that Total Sales (metric tons CO2e) in Column 6G equals the sum of all Sales of Certified Products by Third-party Distributors (Columns 6B, 6C, 6D, 6E, 6F, etc. as needed) for each row in Table 6.1. Note any exceptions.

Step III.F.8.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

c. Agree total Sales by each Organization Type selling Offset Cards (in Column 6I, 6J, 6K, 6L, 6M, etc. as needed) in Table 6.2 to the total listed in the last row of each column. Note any exceptions.

Step III.F.8.c was performed: Yes. No. N/A.



d. Verify that Total Sales (metric tons CO2e) of Offset Cards in Column 6N equals the sum of all Sales of Certified Products by Third-party Distributors (Columns 6I, 6J, 6K, 6L, 6M, etc. as needed) for each row in Table 6.2. Note any exceptions.

Step III.F.8.d was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

IV. GREEN-E CLIMATE PROTOCOL FOR RENEWABLE ENERGY: AUDITING PROCEDURES

The Green-e Climate Protocol for Renewable Energy defines the eligibility criteria of U.S. grid-connected renewable energy facilities to generate eligible emissions reductions. In order to demonstrate the retirement/transfer, ownership, and quantity of emissions reductions from facilities under the Green-e Climate Protocol for Renewable Energy, additional auditing procedures are required. This section only applies to Sellers supplying their Certified Products with renewable energy from facilities approved by the Green-e Climate Protocol for Renewable Energy.

Additional rules also apply to the vintage of emissions reductions from facilities under the Green-e Climate Protocol for Renewable Energy sold in each RY. Emissions reductions from the Green-e Climate Protocol for Renewable Energy may only be based on electricity generation that took place in the calendar year in which the Certified Product is sold, the first three months of the following calendar year, or the last six months of the prior calendar year. For example, for RY2012 sales, emissions reductions must have been created (i.e. electricity generation occurred) between July 1, 2011 and March 31, 2013 in order to be eligible.

Additionally, emissions reductions from the Green-e Climate Protocol for Renewable Energy may only be based on electricity generation occurring after the project was approved by CRS as eligible to be used as supply for a Certified Product.

A. Verification of Eligibility and Ownership of SupplyThe objectives of performing these procedures are to provide assurances relating to the following:

The emissions reductions are based on electricity generation from facilities that have been approved by the Green-e Climate Protocol for Renewable Energy as eligible;

The quantity of retired MWhs from renewable energy facilities was reported accurately;

The baseline emission rate (BER) and calculated emissions reductions (in metric tons CO2e) were reported accurately;

The emissions reductions were created after the project became eligible to supply Certified Products and within the 21-month window of eligibility; and


The renewable, greenhouse gas and all other environmental attributes resulting from the electricity generation are owned by the Seller and retired on behalf of their Green-e Climate Certified sales through use of an Approved Registry.

1. Obtain a completed copy of Worksheet 7 from the Seller, containing the details of the specific renewable energy generation on which the emissions reductions are based. For every project that is identified on Worksheet 7, the Project Name, Resource Type, NERC Region, Project Start Date (year), Vintage/Quarter of Generation (1,2,3,4), Vintage/Year of Generation, Supply of Renewable Energy (MWhs), Baseline Emission Rate, Metric tons CO2e, Registry Name, Facility ID in Registry, Registry Serial ID Number(s) (range), and Utility/Electricity Purchaser (the name of the utility or load-serving entity that purchased the electricity associated with the renewable energy certificates [RECs] or was involved in the transaction) must be disclosed on Worksheet 7. Note any exceptions.

Step IV.A.1 was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

2. For every project that is identified on Worksheet 7, verify that the facility is listed as eligible on the Seller’s Checklist and by the Green-e Climate program. A list of eligible facilities can be found at http://www.green-e.org/getcert_ghg_re_protocol.shtml or obtained by contacting Green-e Climate staff. Note any exceptions.


3. Verify that the vintage (Column 7E and 7F) of the electricity generation that the emissions reductions are based upon falls within the 21-month eligibility window. For RY2012 sales, emissions reductions must have been created between July 1, 2011 and March 31, 2013 in order to be eligible. Note any exceptions.


4. Verify that the vintage (Column 7E and 7F) of the electricity generation that the emissions reductions are based upon falls on or after the “Date Eligible to Supply Certified Products” reported on the Checklist for each project.28 Note any exceptions.


5. For each row on Worksheet 7, verify that the combination of Facility ID in Registry (Column 7K), Vintage (quarter) (Column 7E), Vintage (year) (Column 7F), Supply of Renewable Energy (MWhs) (Column 7G), and Registry Serial ID Number(s) (Column 7L) reported matches and

28 Projects approved under the Protocol for Renewable Energy prior to July 1, 2011 will not have an eligibility date since all generation falling within the 21-month vintage eligibility window will have occurred after the project was approved. These projects are denoted by NA on the Checklist.


http://www.green-e.org/getcert_ghg_re_protocol.shtml

corresponds to retirements, or aggregations thereof29, listed on the Registry Reports. Note a discrepancy in any of the above categories as an exception. Also for these retirements/transfers, please note if the “retirement reason” or “memo” field, and/or the “subaccount name” in the Registry Report indicates retirement for another voluntary program (e.g. Green-e Energy) or a compliance program, or for a RY that is not RY2012.


6. Verify that the total unique Registry Serial ID Number(s) in Column 7L equals the total MWhs in Column 7G for each project (if a range is provided, end serial ID - beginning serial ID + 1 = MWh in Column 7G). Also verify that the supply of renewable energy (in MWhs) reported in Column 7G has been reported in whole numbers. Note any exceptions.


7. For every project that is identified on Worksheet 7, verify that the correct BER is listed in Column 7H. The Green-e Climate Protocol on Renewable Energy determines the appropriate BER to use based on the location (by NERC region) and resource type of each facility (i.e. solar, wind etc.). The full set of BERs is included in Appendix C of this Audit Protocol. Note any exceptions.


8. Test the mathematical accuracy of Worksheet 7:

a. Agree Metric tons CO2e in Column 7I equals the product of Columns 7G and 7H divided by 2204.6226 for each row of Table 7. Note any exceptions.

Step IV.A.8.a was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

b. Agree total Supply of Renewable Energy (MWhs) listed in Column 7G to the total listed in the last row of Column 7G. Note any exceptions.

Step IV.A.8.b was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

c. Agree total Metric tons CO2e listed in Column 7I to the total listed in the last row of Column 7I. Note any exceptions.

Step IV.A.8.c was performed: Yes. No. N/A.Exceptions, Notes, Reason for “No” or “N/A”:

29 Individual retirements/transfers listed in Registry Reports may be aggregated in Worksheet 7 by vintage quarter.


V. FINAL STEPS AND CHECKS

A. Additional Auditor Comments


B. Signature and Report CompletionWe were not engaged to and did not perform an examination the objective of which would be the

expression of an opinion on the compliance of the annual reporting requirements of the Center for Resource Solutions’ Green-e Climate Program. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to [Participant Company for which Audit was Performed] and Center for Resource Solutions.

This report is intended solely for the use of the specified users listed above and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes.

Date: [Date of Report Completion]

Name: [Name of Lead Auditor]

Signed: _____________________________


VI. AUDITOR’S QUALIFICATIONSThe Auditor shall be a member in good standing with the American Institute of Certified Public Accountants or a member in good standing and certified as an internal auditor with the Institute of Internal Auditors (IIA). For more information see Section II.B.

VII. HOW TO GET HELPShould assistance be required, Center for Resource Solutions staff are available to answer questions. Questions relating to the verification may be directed to: Todd Jones at 415-561-2100 or [email protected]. Electronic copies of this document, along with attestations and Worksheets, are available on the Green-e Climate Web page at http://www.green-e.org/climateverification.


http://www.green-e.org/climateverification

mailto:[email protected]

APPENDIX A: GLOSSARY OF TERMS

Agreed-Upon Procedures Report: The report supplied to CRS prepared by the Auditor detailing the results of the annual verification audit by performing the procedures stipulated in the Green-e Climate Annual Verification Audit Protocol.

Approved Registry: An emissions reduction or renewable energy registry deemed eligible by Green-e Climate as an acceptable software database to document ownership and the retirement of emissions reductions for purposes of Green-e Climate verification. A list of approved registries is included in the Checklist for each Seller.

Auditor: An independent public accountant or certified internal auditor that performs the Green-e Climate Verification Audit and reports on agreed-upon procedures. See Section II.B and V of the Audit Protocol for auditor qualifications.

Auditor Attestation: A short attestation to be completed by the Auditor signing the Agreed-Upon Procedures Report, which states that the Auditor has followed certain practices when reviewing Participant’s verification materials and preparing the Agreed-Upon Procedures Report. It is available as Appendix E of the Audit Protocol.

Baseline Emission Rate (BER): An estimate of GHG emissions, removals, or storage from a GHG emissions reduction project associated with a baseline scenario.

Carbon Dioxide Equivalent (CO2e): The universal unit of measurement used to indicate the global warming potential of GHGs and to trade ownership of GHG emissions reductions. Used to evaluate and compare the impacts of releasing (or avoiding the release of) different GHGs.

Certified Product: Under Green-e Climate, a product is defined by its resource mix (e.g. 60% forestry, 38% renewable energy, 2% manure management), generation location for its resources, and Endorsed Program certification. A Certified Product is a mix of GHG emissions reductions that are supported by eligible Endorsed Program protocols, sold by a Seller who has a contract with the Center for Resource Solutions, and follow the requirements of the Green-e Climate Code of Conduct.

Clean Development Mechanism (CDM): The Clean Development Mechanism is a mechanism under the Kyoto Protocol through which developed countries may finance GHG emissions reduction or removal projects in developing countries, and receive credits for doing so which they may apply towards meeting mandatory limits on their own emissions. CDM credits not used in the compliance market can be sold in voluntary markets. The CDM is supervised by the CDM Executive Board and is under the guidance of the Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC). The CDM is an Endorsed Program under Green-e Climate.

Climate Action Reserve (CAR): The Climate Action Reserve is a national offsets program working to ensure integrity, transparency and financial value in the U.S. carbon market. It does this by establishing regulatory-quality standards for the development, quantification and verification of greenhouse gas emissions reduction projects in North America; issuing carbon offset credits known as Climate Reserve Tonnes (CRT) generated from such projects; and tracking the transaction of credits over time in a transparent, publicly-accessible system. CAR is an Endorsed Program under Green-e Climate.


Customer: For the purposes of this Audit Protocol, the customer is identified as the party who has purchased a Certified Product from the Seller.

Customized Mix Product: A Certified Product in which a customer can choose a unique combination of different emissions reductions from project type(s), location(s) and Endorsed Program(s).

EcoLogo: Founded in 1988, EcoLogo a multi-attribute criteria certification program for North America based in Canada and managed by TerraChoice, an environmental consultancy.

Eligible Emissions Reductions: Emissions reductions that are certified by an Endorsed Program, and therefore an eligible source of supply in a Certified Product. This includes emissions reductions derived from offset projects according to certain protocols of the Climate Action Reserve, the Clean Development Mechanism, the Gold Standard, the Verified Carbon Standard, and the Green-e Climate Protocol for Renewable Energy.

Endorsed Program: A greenhouse gas project certification program identified by Green-e Climate Stakeholders and the Green-e Governance Board as meeting the requirements set forth by the Green-e Climate Standard. Certain project protocols of Endorsed Programs are eligible sources of supply for Certified Products. The Endorsed Programs include the Clean Development Mechanism, the Climate Action Reserve, the Gold Standard, the Verified Carbon Standard, and the Green-e Climate Protocol for Renewable Energy.

Fixed Mix Product: A Certified Product with the same combination and proportion of emissions reductions from project type(s), location(s) and Endorsed Program(s) sold to all customers.

Gold Standard (GS): The Gold Standard Foundation is a project certification program for CDM and voluntary offset projects. Renewable energy and energy efficiency projects with sustainable development benefits are eligible. The Gold Standard is a non-profit foundation under Swiss law and funded by public and private donors. The Gold Standard is an Endorsed Program under Green-e Climate.

Greenhouse Gas (GHG): Gases that trap heat in the atmosphere and are emitted through natural processes and human activities. Green-e Climate addresses GHG emissions reductions that originate from the six principal greenhouse gases included in the Kyoto Protocol, namely carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride (CO2, N2O, CH4, HFCs, PFCs and SF6).

Greenhouse Gas Emissions Reductions (emissions reductions): Reductions, removals or the permanent storage of greenhouse gases produced by projects or project activities that have been validated, verified and certified according to the program requirements of an Endorsed Program. GHG emissions reductions must originate from projects or parts of projects that meet the principles and criteria contained in the Green-e Climate Standard. They must meet the requirement of being real, verifiable, permanent and enforceable. They may not be claimed or registered by more than one end-user (quantified in metric tons of carbon dioxide equivalent).

Green-e Climate Annual Verification Audit Instructions (Instructions): Provides instructions for Sellers in Green-e Climate on how to fill in the Worksheets and what materials to assemble for the Auditor to complete the Agreed-Upon Procedures Report.


Green-e Climate Annual Verification Submission (Annual Verification Submission): The collected, completed and audited documents required to be submitted annually to the Center for Resource Solutions as part of the requirements of Green-e Climate certification. These documents include: The Agreed-Upon Procedures Report, all completed Worksheets and all documents required by the Checklist.

Green-e Climate Code of Conduct: The Green-e Climate Code of Conduct contains the Ethical Guidelines, Certification Categories, and Disclosure & Verification Requirements that apply to sellers of Green-e Climate Certified Greenhouse Gas Emission Reduction Products.

Green-e Climate Protocol for Renewable Energy (Protocol for Renewable Energy, PRE): The Green-e Climate Protocol for Renewable Energy determines the eligibility of renewable energy projects in the U.S. to generate GHG emissions reductions, as well as defines a method for determining the carbon value (in tons of CO2e) of renewable energy generation. It contains the eligibility requirements for Green-e Climate Certification of GHG emissions reductions from renewable energy, the methodology used to calculate GHG emissions reductions, and other requirements related to tracking, prevention of double counting and double claiming, additionality, and verification. The Green-e Climate Protocol for Renewable Energy is an Endorsed Program under Green-e Climate.

Green-e Climate Standard: The governing document for Green-e Climate, the Green-e Climate Standard details the principles for Green-e Climate, as well as the criteria the Endorsed Programs must meet. It is available on the Green-e Climate Web site at http://www.green-e.org/getcert_ghg_standard.shtml.

Low Impact Hydropower Institute (LIHI): The Low Impact Hydropower Institute is a national non-profit organization dedicated to reducing the impacts of hydropower generation through the certification of hydropower projects that have avoided or reduced their environmental impacts pursuant to the Low Impact Hydropower Institute’s criteria.

Megawatt-hour (MWh): The most commonly-used unit of measure telling the amount of electricity generated or consumed over time. It refers to one megawatt of electricity supplied for one hour.

Multi-year Purchase Agreement: A contract or sales agreement for the purchase and delivery of Green-e Climate Certified offsets over a number of years.

Offline Sales: Sales of Green-e Climate Certified offsets not transacted via a web-based sales channel.

Offset Card: A pre-printed, single-denomination (uniform quantity and type of product) card (need not be in actual card form) used for in-person, over-the-counter offset transactions.

Online Sales: Sales of Green-e Climate Certified offsets transacted via a web-based sales channel.

Project type: The type of resource used to create emissions reductions (including but not limited to renewable energy, energy efficiency, methane destruction, forestry, etc). A list of eligible project types is available on the Green-e Climate Web site at http://www.green-e.org/getcert_ghg_endorsed.shtml. The project type for each Certified Product is found on the Product Content Label.


http://www.green-e.org/getcert_ghg_endorsed.shtml

Registry: A software-based system in place to issue emissions reductions, track the ownership of emissions reduction and record retirement of emissions reductions. Also referred to as a tracking system.

Renewable Energy Certificate (REC): Renewable electricity generation can be split into two parts: the electricity or electrical energy produced by a renewable generator and the renewable “attributes” of that generation. These renewable attributes are sold separately as renewable energy certificates (RECs). One REC is issued for each megawatt-hour (MWh) unit of renewable electricity produced. RECs contain specific information about the renewable energy generated, including where, when, at what facility, and with what type of generation.

Reporting Year (RY): The reporting year is the period beginning January 1 in the sales year being reported or the date the Seller began selling its Certified Product and ending on December 31 of that year.

Reporting Year 2012 Annual Verification Submission Timeline and Deadlines (Verification Timeline): A document provided to Sellers that details the timeline, due dates and penalties associated with preparing and submitting all verification materials in Reporting Year 2012.

Retirement: The process for setting aside, designating or allocating specific emissions reductions in a registry to ensure that said emissions reductions can no longer be traded. Specific processes and terminology regarding retirement will vary by registry, and more specific instructions for what constitutes appropriate retirement in a given Approved Registry can be found in Appendix D of the Audit Instructions.

Seller: An entity offering for sale at least one Certified Product to customers.

Third-party Distributor: A company that sells a Certified Product without any direct relation to procurement, but rather through an arrangement with a Seller of a Certified Product.

Transfer: The process by which an account holder in a registry delivers specific emissions reductions from its registry account to the separate registry account of another party. The specific processes for transfers, the terminology and the documentation required for Green-e Climate verification with respect to such transfers may vary by registry, and more registry-specific instructions on this topic can be found in Appendix D of the Audit Instructions.

Using Registries in Green-e Climate Annual Verification: This document details the requirements for using registries to substantiate ownership of emissions reductions or MWh. It is available on the Green-e Web site at http://www.green-e.org/climateverification and is included with the verification materials sent to Sellers each year. It is also included as Appendix D of the Audit Instructions.

Verified Carbon Standard (VCS): The VCS 2007 is a standard for voluntary GHG emissions reduction and removal projects and their validation and verification. The VCS program is managed by the VCS Association which is an independent, non-profit organization registered under Swiss law. The founding partners of the VCS are The Climate Group, the International Emissions Trading Association (IETA) and the World Business Council for Sustainable Development. The VCS 2007 is an Endorsed Program under Green-e Climate.


http://www.green-e.org/climateverification

Vintage: The date or time period that the emissions reduction was generated or created.

Wholesale Customer: A company that buys emissions reductions from a Seller with the intension of reselling them to another wholesale or retail customer.

Wholesale Supplier: A company that sells emissions reductions to a Seller of emissions reductions that intends to resell them.


APPENDIX B: DESCRIPTION OF DOCUMENT TITLES AND OTHER INFORMATION NEEDED BY THE AUDITOR

The following is a list of information that Sellers need to provide to their Auditor and should be tailored to each particular engagement as reports and information will vary.

a. Internal Reporting Documents that Indicate Sales (internal reporting documents), which is any report from the Seller that contains the detail of sales per customer for each Certified Product sold and that was used to complete Worksheets 2 and 5. These documents will indicate sales made in RY2012, and could include amounts of Certified Product delivered in RY2012 under multi-year agreements that were entered into in previous RYs. The Auditor will need to have the data sorted by customer class, by Certified Product, and by customer location (state).

b. Billing Statements and/or any other necessary records of individual sales (e.g. contracts, purchase agreements, invoices, receipts of purchase, etc.), and also records of delivery for offset donations; should contain the emissions reductions sales by Certified Product by customer. These should be provided to the Auditor upon request to substantiate Internal Reporting Documents, where different.

c. Registry Reports (Tracking System Report): Reports generated from Sellers’ Approved Registry accounts to substantiate the retirement of eligible emissions reductions. All Sellers must follow the rules in Appendix D of the Audit Instructions.

d. Green-e Climate Annual Verification Audit Protocol (Audit Protocol): Provides instructions for the Auditor on the procedures to perform in order to verify a Seller’s annual sales and supply of eligible emissions reductions.

e. Green-e Climate Attestation from Program Seller signed by the Seller company for which the audit protocol is being conducted. It is included as Appendix E of the Instructions.

f. Green-e Climate Verification Checklist (Checklist): This document is provided by CRS to the Seller. It contains information regarding the Certified Products that are subject to this verification audit, the projects that are used to supply the Certified Products, and any additional reporting requirements for the Seller. Seller should provide a copy to the Auditor.

g. Green-e Climate Verification Worksheets: A series of worksheets to be filled in by the Seller with data from the supply for and sales of Certified Products that are verified by the Auditor.

i. Worksheet 1: Supply: A report that contains the detail of retirements of emissions reductions used by Sellers in their Certified Product(s).

ii. Worksheet 2: Sales: This worksheet provides information about quantity of Certified Products sold by Sellers to individual, commercial, and wholesale customers.


iii. Worksheet 3: Verification of Product Content Label: This worksheet converts the percentage of specific retirements in each Certified Product to each resource sold to customers.

iv. Worksheet 4: Balance of Supply and Sales: This worksheet checks that actual supply of emissions reductions claimed in Certified Products meets or exceeds product sales.

v. Worksheet 5: Sales by Customer Location and Type: This worksheet contains the details of sales of Certified Products broken down by customer type, customer location and Third-party Distributor sales.

vi. Worksheet 6: Sales by Third-party Distributors: This worksheet contains details about the sales of each Certified Product by each Third-party Distributor.

vii. Worksheet 7: Supply from Green-e Climate Protocol for Renewable Energy Approved Facilities: A report that contains the detail of retirements of MWhs from renewable energy facilities approved under the Green-e Climate Protocol for Renewable Energy and used by Sellers in their Certified Product(s).

h. Product Content Label: The disclosure to customers of the mix of resources used to supply a Certified Product for RY2012.

i. Offset Card(s): A copy of each card active in RY2012, where applicable; one copy for each unique combination of organization type and Certified Product.

j. Project List: The list disclosed to customers of the emissions reductions projects used to supply a Certified Product. The Project List should include the project name, project type, project location, project start date, vintage of GHG emissions reductions (year or range of years), Endorsed Program, and the Registry in which the project is registered. For projects certified by the Climate Action Reserve, the Clean Development Mechanism, the Verified Carbon Standard, or the Gold Standard, also include the project verifier.


APPENDIX C: BASELINE EMISSION RATES FROM THE GREEN-E CLIMATE PROTOCOL FOR RENEWABLE ENERGY

Use these emissions factors as directed by Section IV.A.7 above. All values are in pounds per megawatt-hour (lbs/MWh).

The Build Margin is the baseline emission rate for biomass, geothermal, ocean thermal and hydro facilities.

The Combined Margin is the baseline emission rate for solar, wind, tidal and wave facilities.

RegionOperating margin

(lbs/MWh)Build Margin (lbs/MWh)

Combined Margin (lbs/MWh)

Alaska Systems Coordinating Council (ASCC) 1,437 1,541 1,489

Electric Reliability Council of Texas (ERCOT) 1,335 1,306 1,320

Florida Reliability Coordinating Council (FRCC) 1,475 1,109 1,292

Hawaiian Islands Coordinating Council (HICC) 1,698 1,456 1,577

Midwest Reliability Organization (MRO) 2,192 1,433 1,813

Northeast Power Coordinating Council (NPCC) 1,539 1,142 1,341

Reliability First Corporation (RFC) 1,987 1,083 1,535

SERC Reliability Corporation (SERC) 1,842 1,306 1,574

Southwest Power Pool, Inc. (SPP) 1,659 1,034 1,346Western Electricity Coordinating Council (WECC) 1,411 1,179 1,295

The baseline emission rates for the Banner Wind project are as follows:

Operating margin (lbs/MWh)

Build Margin (lbs/MWh)

Combined Margin (lbs/MWh)

1,354 1,358 1,356


APPENDIX D: USING REGISTRIES IN GREEN-E CLIMATE ANNUAL VERIFICATION

In combination with Appendix D of the Audit Instructions, these requirements govern the use of Registries toward the annual verification requirements for participants in Green-e Climate. This Appendix describes the procedures to be followed by Auditors when reviewing Registry Reports. Appendix D of the Audit Instructions includes the procedures for Sellers using a Registry for sales made to a customer without a Registry account (Section I) and the procedures for Sellers using a Registry for sales made to a customer with a Registry account (Section II).

I. Procedures to be Followed By Auditors When Reviewing Registry Reports

A. Verification of Retirements in a Verified Carbon Standard Registry

This section applies to sellers supplying one or more Certified Product(s) with projects certified by the Verified Carbon Standard.

i. APX Gain access to Seller’s account in the APX VCS registry. Request a Login with

Limited Access to View the Account. Compare information included in the Registry Report(s) provided by Seller with

the actual registry account, checking both records of retirements as well as inter-registry transfers. Note any discrepancies found.

Ensure that all information recorded in Worksheet 1: Supply can be accurately substantiated in Seller’s registry account. For each row of Table 1 in which “VCS” is listed in column 1F and APX is listed in column 1I, ensure that the emissions reductions listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 1.

Ensure that the following information in the Registry matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Project ID, VCU Serial Numbers and Quantity of VCUs.

While logged in to the Seller’s registry account, access the additional documentation associated with each VCS project in the APX registry. Ensure that that Project Location (country), Project Start Date (year) and Project Verifier have been listed accurately in Table 1.

ii. Markit Environmental Registry Gain access to Seller’s account in the Markit VCS registry. Request a Login with




Ensure that all information recorded in Worksheet 1: Supply can be accurately substantiated in Seller’s registry account. For each row of Table 1 in which “VCS” is listed in column 1F and TZ1 or Markit is listed in column 1I, ensure that the emissions reductions listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 1.

Ensure that the following information in the Registry matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Project ID, VCU Serial Numbers and Quantity of VCUs.

While logged in to the Seller’s registry account, access the additional documentation associated with each VCS project in the Markit registry. Ensure that that Project Location (country), Project Start Date (year) and Project Verifier have been listed accurately in Table 1.

B. Verification of Retirements in a Climate Action Reserve Registry

This section applies to sellers supplying one or more Certified Product(s) with projects certified by the Climate Action Reserve.

i. APX Gain access to Seller’s account in the APX CAR registry. Request a Login with



Ensure that all information recorded in Worksheet 1: Supply can be accurately substantiated in Seller’s registry account. For each row of Table 1 in which “CAR” is listed in column 1F and APX is listed in column 1I, ensure that the emissions reductions listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 1.

Ensure that the following information in the Registry matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Project ID, CRT Serial Numbers and Quantity of CRTs.

While logged in to the Seller’s registry account, access the additional documentation associated with each CAR project in the APX registry. Ensure that that Project Location (country), Project Start Date (year) and Project Verifier have been listed accurately in Table 1.

C. Verification of Retirements in a Gold Standard Registry

This section applies to sellers supplying one or more Certified Product(s) with projects certified by the Gold Standard.

i. APX


Gain access to Seller’s account in the APX GS registry. Request a Login with Limited Access to View the Account.

Compare information included in the Registry Report(s) provided by Seller with the actual registry account, checking both records of retirements as well as inter-registry transfers. Note any discrepancies found.

Ensure that all information recorded in Worksheet 1: Supply can be accurately substantiated in Seller’s registry account. For each row of Table 1 in which “GS” is listed in column 1F and APX is listed in column 1I, ensure that the emissions reductions listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 1.

Ensure that the following information in the Registry matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Project ID, VER Serial Numbers and Quantity of VERs.

While logged in to the Seller’s registry account, access the additional documentation associated with each GS project in the APX registry. Ensure that that Project Location (country), Project Start Date (year) and Project Verifier have been listed accurately in Table 1.

i. Markit Environmental Registry Gain access to Seller’s account in the Markit GS registry. Request a Login with



Ensure that all information recorded in Worksheet 1: Supply can be accurately substantiated in Seller’s registry account. For each row of Table 1 in which “GS” is listed in column 1F and TZ1 or Markit is listed in column 1I, ensure that the emissions reductions listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 1.

Ensure that the following information in the Registry matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Project ID, VER Serial Numbers and Quantity of VERs.

While logged in to the Seller’s registry account, access the additional documentation associated with each GS project in the Markit registry. Ensure that that Project Location (country), Project Start Date (year) and Project Verifier have been listed accurately in Table 1.

D. Verification of Retirements in a Renewable Energy Tracking System

This section applies to sellers supplying one or more Certified Product(s) with renewable energy from facilities approved under the Green-e Climate Protocol for Renewable Energy.


i. Midwest Renewable Energy Tracking System (M-RETS), Western Regional Energy Generation Information System (WREGIS), PJM Generation Attribute Tracking System (PJM-GATS), and North American Renewables Registry (N.A.R.R.) Gain access to Seller’s account in the M-RETS, WREGIS, PJM-GATS, or N.A.R.R.

Tracking System. Compare information included in the Registry Report(s) provided by Seller with

the actual tracking system account, checking both records of retirements as well as inter-registry transfers. Note any discrepancies found.

Ensure that all information recorded in Worksheet 1 can be accurately substantiated in Seller’s tracking system account. For each project in Table 7, ensure that the MWhs listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 7.

Ensure that the following information in the Tracking System matches the information on the printed Registry Report: Project Name, Project Type, Vintage, Facility ID, Serial Number IDs and Quantity of MWhs or RECs.

ii. Texas’ Statewide Tracking System (ERCOT) Gain access to Seller’s account in the ERCOT Tracking System. Compare information included in the Registry Report(s) provided by Seller with

the actual tracking system account, checking both records of retirements as well as inter-registry transfers. Note any discrepancies found.

Ensure that all information recorded in Worksheet 1 can be accurately substantiated in Seller’s tracking system account. For each project in Table 7, ensure that the MWhs listed in that row have in fact been retired or transferred by Seller and that they have been entered accurately into Worksheet 7.

Ensure that the following information in the Tracking System matches the information on the printed Registry Report: Project Type, Vintage, Facility ID, Serial Number IDs and Quantity of MWhs or RECs.

While logged in to the Seller’s registry account, access the additional documentation associated with each project in the ERCOT tracking system. Ensure that that Project Name matches the Facility ID, and that both have been listed accurately in Worksheet 1 and Worksheet 7.


APPENDIX E: AUDITOR’S ATTESTATION FOR AGREED-UPON PROCEDURES REPORT

This attestation has been completed by the Auditor, in regards to the Green-e Climate Certified sales of [Seller for which Audit was Performed] (“Participant”) made in 2012.

Auditor Company Name:[Auditor Company Name]Business Address: [Address of Auditor Company]

AUDITOR DECLARATION

I declare that I am qualified to perform the Green-e Climate audit, as I am (check one):

An external auditor and CPA; or

Working for the Green-e Climate Seller company whose sales are being verified and I am a Certified Internal Auditor (CIA).

I did not fill in the Green-e Climate Verification Worksheets.

The RY2012 version of the Green-e Climate Verification Audit Protocol (“Audit Protocol”) was read and its procedures were followed with due diligence.

The Green-e Climate Agreed-Upon Procedures Report was completed according to the instructions in the Audit Protocol, to assist the Participant (or specified parties) in complying with the annual reporting requirements of the Center for Resource Solutions’ Green-e Climate certification program for the Reporting Year ended December 31, 2012.

The Agreed-Upon Procedures Report was performed in accordance with the standards established by the American Institute of Certified Public Accountants and all requirements in Section II of the Audit Protocol.

All information within the Agreed-Upon Procedures Report and in this attestation fairly represents the results of my assessment.

AGREED UPON PROCEDURES REPORT SUMMARY

Based on the Green-e Climate Audit Protocol and the results of the Agreed-Upon Procedures, [Auditor Company Name] (“Auditor”) asserts that Seller has:


NO EXCEPTIONS with regard to its compliance of the Green-e Climate verification reporting requirements put forth in the Annual Verification Instructions and Protocol;

-- Or --

EXCEPTIONS with regard to its compliance of the Green-e Climate verification reporting requirements put forth in the Annual Verification Instructions and Protocol, and these exceptions are listed in the Agreed-Upon Procedures Report.

[Date Attesation Signed]Signature Date Signed

[Name of Lead Auditor] [Title of Lead Auditor]Printed Name Title

*If more than one Auditor conducted the Agreed-Upon Procedures Report (AUPR), the manager of the audit procedures should sign this Auditor Attestation. The names of those others who were involved in the AUPR may be listed below:

[Names of Additional Auditors]
