United States
              Environmental Protection
    Integrating  Energy Efficiency and
    Renewable  Energy Measures  in  the
    Air Quality Planning Process
    Guidance for State and Local Officials

  In August 2004, the U.S. Environmental
  Protection Agency (EPA) issued "Guidance on
  State Implementation Plan (SIP) Credits for
Emissions Reductions from Electric-Sector Energy
Efficiency or Renewable Energy Measures." This
guidance  provides state and local air quality offi-
cials with  valuable information on how to incorpo-
rate energy efficiency and renewable energy
(EE/RE) measures into their air quality plan, also
known as the  State Implementation Plan (SIP).
The guidance provides:

• General  information and background on incorp-
 orating EE/RE measures in the SIP.
• A step-by-step procedure for estimating emission
 reductions from EE/RE measures.
• A list of tools and resources for more information.
• Examples of proposed SIP submissions.
   What Are the Benefits of Energy
   Efficiency and Renewable Energy?

   EE/RE measures have multiple environmental,
   energy, and economic benefits. Energy effi-
   ciency measures reduce electricity consump-
   tion, and renewable energy can supply energy
   from non-polluting or less polluting sources,
   thus reducing air emissions. In addition, these
   measures can:

   • Save money, reduce the need to build new
    fossil-fuel fired generation facilities, and
    create economic development opportunities.
   • Reduce peak demand for electricity during
    periods of poor air quality.
   • Reduce dependence on foreign  sources of
    fuel and enhance energy security.
   • Increase the reliability of the electricity grid.
  Integrating Energy and Air Quality Goals

  EPA encourages and supports state and local
  efforts to reduce air pollution through EE/RE meas-
  ures. The Agency is working with state and local air
  and energy officials to adopt and implement EE/RE
  measures. EPA is partnering with the U.S.
  Department of Energy and other organizations to
  develop information resources and technical assis-
  tance for state and local governments that wish to
  integrate their energy and air quality programs.
How Can States Incorporate EE/RE into
the Air Quality Planning Process?

EE/RE measures may be incorporated into the SIP
process either implicitly in the projected emission
inventory estimates (baseline) or explicitly as dis-
crete measures that achieve emission reductions
(SIP Credit) from the projected baseline.

What Requirements Should EE/RE Measures
Meet to Obtain SIP Credit?

Under EPA policy and guidance, states can incorporate
EE/RE measures into their SIPs, provided certain criteria
are met. ERA'S guidance describes the criteria for EE/RE
measures and how states can meet them. Proposed
measures should be:
• Quantifiable—reasonable assumptions about how the elec-
 tricity system will respond to the EE/RE measures, where the
 reductions are expected to take place, and current and future
 air emission limitations on electricity generators need to be
• Surplus—emission reductions are surplus as long as they
 are not otherwise relied on to meet air quality attainment
 requirements in air quality programs related to the SIP. In
 areas subject to a cap and trade program, this requirement
 could be met by retiring emission allowances.
• Enforceable—the measure must either be enforceable
 against a responsible party or the state/local government
 submitting the SIP takes responsibility for the emission
 reductions as a "voluntary" measure.
• Permanent—the EE/RE measures need to be in place
 throughout the  SIP timeframe.

Examples of EE/RE Measures

There are many policies, programs, and  projects that could
potentially be  included in the air quality planning process.
Here are a few examples:

Energy Efficiency:

• System benefit funds that install energy efficient
• Improved energy codes.
• Appliance standards.
• Government equipment purchasing standards.
• Utility-run demand side management programs.
• Required or voluntary government energy performance
 improvement projects.
Renewable Energy:

• Renewable portfolio standards.
• Government purchase of green power.
• System benefit funds that install renewable energy
  EE/RE SIP Guidance
  Art Diem
  EPA Office of Atmospheric Programs
  State and Local Capacity Building Branch
  Washington, DC

  David Solomon
  EPA Office of Air Quality Planning and
  Air Quality Strategies and Standards Division
  Research Triangle Park, NC
How Can I  Get More Information?
Resources and Web sites
• Guidance on State Implementation Plan
 (SIP) Credits for Emissions Reductions
 from Electric-Sector Energy Efficiency or
 Renewable Energy Measures, August 2004.

• Incorporating Emerging and Voluntary
 Measures in a State Implementation Plan,
 October 2004. http://www.epa.gov/

• EPA Air Innovations Web site.
      United States Environmental Protection Agency
                              September 2004