“Workshop on PoA: Challenges and Road Ahead” Session 10: - Should liability be shared by DOE and PP/CME - Perspectives of DOEs DOE/AIE Forum | Werner Betzenbichler | Bonn, May 2011

Topics Erroneous Inclusion – Originator, Detection and Consequences Liability Sharing Possible Solutions

Erroneous Inclusion – Originator, Detection & Consequences Procedure for inclusion: − 23. To include an additional CPA in a registered PoA, the coordinating/managing entity shall forward the completed specific CDM-CPA-DD form to any DOE, after having ensured that the CPA and the specific CDM-CPA-DD meets the requirements determined in the POA and its generic CDM-CPA-DD. − 24. The DOE shall scrutinize the CPA and the specific CDM-CPA-DD against the latest version the POA. If the DOE confirms that the CPA meets the requirements of the POA, … Two parties to perform checks and to confirm consistency, one party to benefit from inclusion, one party to carry liability But by two checks, likelihood for erroneous inclusion should be very low Does this low likelihood justify the acceptance of taking over liability risks?

Erroneous Inclusion – Originator, Detection & Consequences (2) Procedure for detection: − 26. If a DNA involved in the PoA or a Board member identifies information that may disqualify a CPA from inclusion in the PoA or…Such a request for review shall be related to issues associated with the compliance of the CPA with the eligibility criteria specified in the CDM-POA-DD. How can these two parties detect erroneous inclusions, if CME and DOE could not detect it? What happens, if DNA support/understanding changes over time? Does “a Board member” imply similar post-submission procedures like in standard CDM (CC and IRC,….)? Will a verifying DOE report any suspicions or proven errors? Is there any detection risk, which justifies this discussion?

Erroneous Inclusion – Originator, Detection & Consequences (3) Consequences of detection: − Extremely costly review (2 nd DOE, extensive investigation program with illusionary time schedule) − Usual accreditation risk − Possible exclusion of CPAs − Request to DOE to acquire CERs and transfer to cancellation account Low likelihood vs. potential of huge financial impact Not insurable; insurers would have same difficulties to quantify the risk How to communicate this issue to management and legal department? How can we make risks tangible and manageable?

Liability Sharing Whom to blame & penalize for erroneous inclusion? CME & DOE are already penalized by several aspects Amount of required CERs is quite unpredictable Large quantities would lead to uneven consequences CMEs have another role like PPs in standard CDM Only minor change in procedure required, when requesting sharing Fraud, malfeasance and gross negligence can lead to erroneous inclusion - if committed by both - if committed by CME and not detected by DOE - but resulting liability can be dealt with internally by criminal complaints Wouldn‘t sharing be a fair concept?

Possible Solutions Reduce the likelihood of occurrence − Eliminate ambiguous eligibility criteria already in the registration process − Define consistency check list to be applied by CME as part of the PoA-DD Make detection risk tangible − Either no mandate to post-submission assessments, − or clear description of the process − Focus on cases of fraud, malfeasance and gross negligence Limit DOE liability by − Sharing liability with CME − Exclude post-registration changes of procedures And hopefully this helps to avoid its application

Werner Betzenbichler Chair of the DOE/AIE Forum on behalf of TÜV NORD Designated Operational Entities and Independent Entities Association ▪