I"™ I"! II
Roadmap for Incorporating Energy
Efficiency/Renewable Energy
Policies and Programs into State and Tribal
Implementation Plans
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EPA-456/D-12-001a
July 2012
Roadmap for Incorporating Energy Efficiency/Renewable Energy
Policies and Programs into State and Tribal Implementation Plans
By:
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Outreach and Information Division
Research Triangle Park, North Carolina
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Outreach and Information Division
Research Triangle Park, North Carolina
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ACKNOWLEDGMENTS
We would like to acknowledge substantial contributions from members of an inter-
office EPA team that included the Office of Atmospheric Programs, the Office of Policy
Analysis and Review, the Office of General Counsel and Regions 1 and 6. This document
also reflects comments received from a number of stakeholders, including state and
local air quality agencies.
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TABLE OF CONTENTS
APPENDICES 4
FIGURES 5
TABLES 6
ACRONYMS 7
EXECUTIVE SUMMARY 9
Purpose of the Roadmap 9
The Four Pathways 9
SECTION 1.0: PURPOSE AND ROADMAP ORGANIZATION 11
Energy Efficiency/Renewable Energy Policies and Programs as Cost- Effective Strategies 12
Four Reasons to Take Advantage of Energy Efficiency/Renewable Energy Policies and Programs in Air
Plans 12
Four Pathways Available 14
Challenges of Incorporating Energy Efficiency/Renewable Energy Policies and Programs in State and
Tribal Implementation Plans 15
This Roadmap Clarifies Existing Guidance and is Not a Regulation 16
Scope of Roadmap 16
SECTION 2.0: ACTIVITIES FOR GETTING STARTED 19
Functioning of the Electric System 19
Roles and Responsibilities of Key State Electric Energy Organizations 19
State, Tribal and Local Energy Efficiency/Renewable Energy Policies and Programs in Jurisdictions 20
Estimating Potential Emission Reductions 21
Understanding Existing EPA Energy Efficiency/Renewable Energy SIP Guidance 21
Common "Getting Started" Questions and Answers 21
SECTION 3.0: DECISION-MAKING FOR NAVIGATING THE FOUR PATHWAYS 27
Decision-Making Flowchart 27
Pathways for Jurisdictions That Have Emerging and/or Voluntary Measures 28
Pathways for Jurisdictions That Do Not Have Emerging and/or Voluntary Measures 28
Additional Resources 29
SECTION 4.0: BASELINE EMISSIONS PROJECTION PATHWAY 33
Qualifying Criteria 34
Mandatory Policies That Are Not Federally Enforceable 34
SECTION 5.0: CONTROL STRATEGY PATHWAY 35
Control Strategy Pathway Must Meet Four Criteria 35
SECTION 6.0: EMERGING/VOLUNTARY MEASURES PATHWAY 37
SECTION 7.0: WEIGHTOF EVIDENCE PATHWAY 39
REFERENCES 41
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APPENDICES
Appendix A: Glossary A-l
Appendix B: Overview of the U.S. Electric System B-l
Appendix C: Existing EPA Energy Efficiency/Renewable Energy Guidance C-l
Appendix D: Understanding State Energy Efficiency and
Renewable Energy Policies and Programs D-l
Appendix E: Baseline Emissions Projection Pathway E-l
Appendix F: Control Strategy Pathway F-l
Appendix G: Emerging/Voluntary Measures Pathway G-l
Appendix H: Weight of Evidence Pathway H-l
Appendix I: Methods for Quantifying Energy Efficiency and Renewable Energy Emission Reductions 1-1
Appendix J: Draft Methodology for EPA's Analysis of Existing State Energy Efficiency/Renewable Energy
Policies J-l
Appendix K: State, Tribal and Local Examples and Opportunities K-l
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FIGURES
Figure 1: Organization of the Roadmap 11
Figure 2: Electric Energy Efficiency Program Budgets 13
Figure 3: Growth in State Policies for Renewable Portfolio Standards 14
Figure 4: How the Appendices Support the Four Pathways 18
Figure 5: Energy Efficiency/Renewable Energy Pathway Flowchart for State and Tribal Implementation
Plans 22
Figure 6: Energy Organizations' Roles and Responsibilities 23
Figure 7: Characteristics of Policies and Programs Suitable for Each Pathway 30
Figure 8: Four Criteria the Control Strategy Pathway Must Meet 36
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TABLES
Table 1: Common "Getting Started" Questions and Answers 24
Table 2: Examples of Energy Efficiency/Renewable Energy Policies and Programs for the Four State and
Tribal Air Planning Pathways 31
Table 3: Information on State and Tribal Implementation Plan Credit and Quantification Approaches .... 32
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ACRONYMS
AAGR: Annual Average Growth Rate
AEO: Annual Energy Outlook
ARRA: American Recovery and Reinvestment Act
CAA: Clean Air Act
CFEC: Capacity Factor Emission Calculator
CHP: Combined Heat and Power
CO: Carbon Monoxide
C02: Carbon Dioxide
DEP: Department of Environmental Protection
EE: Energy Efficiency
EERS: Energy Efficiency Resource Standard
eGRID: Emissions & Generation Resource Integrated Database
ECU: Electric Generating Unit
EIA: Energy Information Administration
EIP: Economic Incentive Program
EM&V: Evaluation, Measurement and Verification
EMM: Electricity Market Module
GWhs: Gigawatt Hours
HEDO: High Electric Demand Days
Hg: Mercury
IPM: Integrated Planning Model
ISO: Independent System Operator
KWh: Kilowatt-Hour
MW: Megawatt
MWh: Megawatt-Hour
NAAQS: National Ambient Air Quality Standard
NEEDS: National Electric Energy Data System
NEMS: National Energy Modeling System
NERC: North American Electric Reliability Corporation
Pb: Lead
PM: Particulate Matter
PUC: Public Utility Commission
RE: Renewable Energy
RFP: Reasonable Further Progress
RGGI: Regional Greenhouse Gas Initiative
RPS: Renewable Portfolio Standard
RTO: Regional Transmission Organization
SEO: State Energy Office
SIP: State Implementation Plan
S02: Sulfur Dioxide
TIP: Tribal Implementation Plan
WOE: Weight of Evidence
ACEEE: American Council for an Energy-Efficient Economy
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LCSE: Levelized Costs of Saved Energy
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EXECUTIVE SUMMARY
The U.S. Environmental Protection Agency's (EPA's) Office of Air and Radiation
encourages state, tribal and local agencies to consider incorporating energy efficiency
(EE) and renewable energy (RE) policies and programs in their State and Tribal
Implementation Plans (SIPs/TIPs). State and local governments have increased their
adoption of EE/RE policies and programs since EPA last issued guidance on the topic in
2004. This increase in activity has the potential to provide appreciable emission benefits
for air quality that state, tribal and local air planners could capture in SIPs/TIPs. As EPA
continues to review and, as appropriate, revise National Ambient Air Quality Standards
(NAAQS) to protect public health, emission reductions from EE/RE policies and programs
may become increasingly important for jurisdictions designated as nonattainment. The
goal of this document is to facilitate the use of EE/RE emissions reduction strategies in
air quality plans. This is made possible by the abundance of information available on
the energy impacts of EE/RE policies and programs and by the availability of the SIP/TIP
pathway decision-making framework provided here in this roadmap.
Purpose of the Roadmap
The EPA is issuing this roadmap to reduce the barriers for state, tribal and local agencies
to incorporate EE/RE policies and programs in SIPs/TIPs by clarifying existing EPA
guidance and providing new and detailed information. The roadmap provides a section
on "getting started" that includes charts and tables for decision-makers to consider in
weighing which pathway or pathways to pursue for incorporating EE/RE policies and
programs in SIPs/TIPs. The charts and tables also describe the advantages and
disadvantages of each pathway. Attached to the roadmap are detailed appendices that
include new information. A range of topics is covered from basic information on
understanding the electric system and EE/RE policies and programs to details on four
different approaches for quantifying EE/RE benefits. The appendices also provide basic
information on each pathway, including SIP/TIP documentation.
The Four Pathways
The roadmap describes the four SIP/TIP pathways that are available to state, tribal and
local agencies as they consider which approach to adopt for incorporating policies and
programs in SIPs/TIPs. The four pathways described in the roadmap are:
1. Baseline emissions projection pathway;
2. Control strategy pathway;
3. Emerging/voluntary measures pathway; and
4. Weight of evidence (WOE) determination pathway.
State, tribal and local agencies can, of course, select more than one pathway for their
jurisdiction's different EE/RE policies and programs. Each option is appropriate for a
specific set of circumstances and has its own documentation and analytical provisions.
For example, the baseline emissions projection pathway is an option for agencies that
have already adopted EE/RE policies and programs that they wish to incorporate in their
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emissions forecast. Alternatively, if the jurisdiction is contemplating adopting new
EE/RE policies before it submits its SIP/TIP to EPA, then the control strategy pathway is
an option. In cases where jurisdictions have adopted emerging and/or voluntary
measures (i.e., those that are difficult to enforce and/or quantify), the
emerging/voluntary measures pathway may be the preferred route. The WOE pathway
is a supplemental analysis to an attainment demonstration in cases where a jurisdiction
is not predicted to attain an air quality standard based on air quality modeling; it is a
recommended option for accounting for EE/RE policies and programs where a state,
tribal or local agency wants to claim emissions benefit that will potentially affect air
quality in the attainment year, but where modeling the impacts of the policy or program
is either too resource intensive or not feasible for other reasons and/or the jurisdiction
is not interested in SIP/TIP credit.
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Getting Started
Section 2.0
SECTION 1.0: PURPOSE AND ROADMAP ORGANIZATION
This document provides a roadmap to assist state, tribal and local agencies with
accounting for and incorporating
energy efficiency and renewable F'g"re 1: Organization of the Roadmap
energy (EE/RE) policies and
programs in State
Implementation Plans (SIPs) and
Tribal Implementation Plans1
(TIPs). The roadmap
accomplishes this task by
clarifying guidance2 the U.S.
Environmental Protection
Agency (EPA) issued in 2004 on
incorporating EE/RE policies and
programs into SIPs, as well as
related guidance3 EPA issued in
that year and in 2005. in SIPs/TIPs \ \^ Emerging/Voluntary Measures
Pathway
Section 6.0
Decision-Making for Navigating
the Four Pathways
Section 3.0
Baseline Emissions Projection Pathway
Sect ion 4.0
Control Strategy Pathway
Section 5.0
Weight of Evidence Pathway
Section 7.0
Information on All Four Pathways
Appendices
States are required, under the
Clean Air Act (CAA), to submit
SIPs when an area is designated
as nonattainment for a National
Ambient Air Quality Standard
(NAAQS). The EPA is then
required to either approve or disapprove the SIP/TIP, based on whether the plan meets
the requirements of the CAA. EE/RE policies and programs are increasingly being
explored by state, tribal and local agencies for use in meeting air quality goals and
SIP/TIP requirements (i.e., emission reductions needed to demonstrate attainment
and/or satisfy other CAA requirements).4
To help state, tribal and local air quality planners start, the main body of this roadmap
provides several resources, is designed to be user friendly and is intentionally brief. The
detailed appendices describe the electric system mechanics, emission quantification
1 The Clean Air Act provides authority for tribes to implement CAA programs and instructed EPA to adopt
regulations so that eligible Tribes may manage their own EPA-approved air pollution control programs
under the CAA. The 1998 Tribal Authority Rule (TAR) implements the provisions of section 301(d) of the
CAA to authorize eligible Tribes to develop their own tribal programs. Under the TAR, a Tribe may be
approved by EPA to be eligible to be treated in the same manner as a state for one or more CAA
programs. Such a program may include, but is not limited to, a TIP. Tribal governments are not required
to submit a TIP, nor are they subject to deadlines mandated under the CAA. However, EPA must meet its
obligations with respect to tribal lands under the CAA.
2EPA(2004a).
3 EPA (2004b) and EPA (2005).
4 The other requirements include: Reasonable Further Progress and Reasonably Available Control
Technology/Reasonably Available Control Measures.
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approaches and detailed provisions for incorporating EE/RE policies and programs in the
four SIP pathways. References to outside sources are also provided.5 Figure 1 provides
the overall organization of the roadmap. Figure 4 describes each appendix and its
applicability to each of the four pathways.
Energy Efficiency/Renewable Energy Policies and Programs as Cost-
Effective Strategies
EE/RE policies and programs (as described in Section 2.0) offer the potential to achieve
emission reductions at a cost that can be lower than traditional control measures. The
EPA is gaining experience with these potentially cost-effective strategies in rulemakings
affecting the utility and other sectors.6 The EPA is working to define how and when
EE/RE policies can lower the overall cost of achieving compliance with the requirements
of emissions standards.
EE/RE policies and programs may be a cost-effective strategy that state, tribal and local
agencies can use as part of multi-pollutant emissions reduction approaches to help
attain and maintain compliance with NAAQS, as well as achieve other regulatory or non-
regulatory objectives such as improving visibility, reducing regional haze, reducing air
toxics, and limiting greenhouse gases.
Four Reasons to Take Advantage of Energy Efficiency/Renewable
Energy Policies and Programs in Air Plans
EE/RE policies and programs represent a real opportunity for improving air quality. The
EPA encourages state, tribal and local air quality planners to quantify and take
advantage of the emission benefits of EE/RE policies and programs. Over the past 10
years, states have made substantial investments in EE/RE initiatives and are seeing
significant increases in EE savings and renewable generation as a result. These
commitments have the potential to provide appreciable emission benefits for air quality
that state, tribal and local air planners could capture in SIPs/TIPs.
Four reasons for state, tribal and local agencies to consider EE/RE policies and programs
in SIPs and TIPs are:
1) From 2006 to 2011, states have increased their budget investments in electric EE
programs significantly, committing over $5 billion of ratepayer resources in 2011
to electric EE programs. (See Figure 2 for growth in state EE expenditures from
5 For links to sources external to EPA, note that EPA cannot attest to the accuracy of non-EPA information
provided by these third-party sites or any other linked site. The EPA provides these links as a reference.
In doing so, EPA does not endorse any non-government websites, companies or applications.
6 For example, a recent EPA modeling scenario for EPA's Mercury and Air Toxics Standard rule predicts
that moderate levels of energy-demand reduction - equivalent to the continuation of current policies -
could lower total compliance costs, reduce ratepayer bills over the long term, and in some cases, delay or
avoid the need for equipment upgrades or new construction of generating facilities and emissions
controls. This energy-demand reduction is also likely to reduce emissions of air pollutants on high
electricity demand days when air quality can be especially harmful (Federal Register 2011a).
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2006-2011.)7 Additionally, nearly all states (48) have EE programs reporting
efficiency program budgets.8
2) As of 2011, twenty-nine states (and Washington, DC) had adopted renewable
portfolio standards (RPS) which require retail electricity providers to supply a
minimum percentage or amount of retail demand with renewable resources,
more than double the number of states in 2000 (see Figure 3).9
3) As EPA periodically reviews NAAQS to strengthen public health protection, the
need for state, tribal and local agencies to find greater emission reductions may
well continue. EE/RE policies and programs can provide a resource to help meet
that need.
4) Information about the energy impacts of EE/RE policies and programs and their
resulting emission benefits is now more widely available. State, tribal and local
agencies do not have to start analyses from scratch, but can access existing,
quality data. (Refer to Appendix D for a list of resources.)
Figure 2: Electric Energy Efficiency Program Budgets
LO
c
o
CD
$6
$5
$4
$3
$2
$1
2006
2007
2008
2009
2010
2011
Source: http://www.ceel.org/ee-pe/2011AIR.php3
7 For more information, go to: http://www.ceel.org/ee-pe/2011AIR.php3.
8 ACEEE (2012), Appendix A.
9 For more information, go to: http://www.cleanenergystates.org/assets/Uploads/2011-RPS-Summit-
Combined-Presentations-File.pdf
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Figure 3: Growth in State Policies for Renewable Portfolio Standards
CO
(2007)
HI IL
(2005) (2008)
MA CT MD DC NH Ml
(2003) (2000) (2006) (2007) (2008) (2012)
ME PA NJ NY DE NC MO
(2000) (2001) (2001) (2006) (2007) (2010) (2011)
MN AZ NV Wl TX NM CA Rl MT WA OR OH KS
(2002) (1999) (2001) (2000) (2002) (2002) (2003) (2007) (2008) (2012) (2011) (2009) (2011)
0 BI0BB0 B I9HHH^HHB^HHH^HHH0HHHI0HHHI^HHH0HHH0BHHI^HHHI0HHB^BHHI0HHI^BHI^1
1983 1991 1994 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
IA MN AZ MN NM CT NJ CT AZ CA DC HI CO CA
Wl NV MN NM CO CA CO DE IL DE CT
NV PA NV CT CT HI ME IL DC
TX HI DE MA MN MA DE
NJ MD MD NV MD MD
_ Enactment (above timeline) wl ME NJ OR NJ NC
B MajorRevisions(belowtimeline) UN RI NY wi
NJ
() Yearof First Requirement NM
PA
TX
Source: http://www.cleanenergystates.org/assets/Uploads/2011-RPS-Summit-Combined-Presentations-File.pdf
Four Pathways Available
The EPA recognizes that state, tribal and local agencies interested in incorporating these
policies and programs in SIPs/TIPs may need more detailed information on how to
achieve this goal. To that end, this manual provides a roadmap for understanding the
parameters and other aspects of the four pathways available for incorporating EE/RE
policies and programs in SIPs/TIPs. State, tribal and local agencies can, of course, select
more than one pathway for their jurisdiction's different EE/RE policies and programs.
The pathways are:
1. Baseline emissions projection pathway: This is an option for agencies that have
already adopted EE/RE policies and programs and they wish to incorporate the
impact of those policies and programs in their SIP/TIP forecast of emissions for
the electric generating units (EGUs).
2. Control strategy pathway: If a jurisdiction is contemplating adopting new EE/RE
policies before it submits its SIP/TIP to EPA, then the control strategy pathway is
an option. EE/RE policies incorporated in a SIP/TIP as a control strategy must be
quantifiable, surplus, enforceable and permanent.
3. Emerging/voluntary measures pathway: In cases where jurisdictions have
adopted emerging and/or voluntary EE/RE measures (i.e., those that are difficult
to enforce and/or quantify), the emerging/voluntary measures pathway is the
preferred route.
4. Weight of evidence (WOE) determination pathway: The WOE pathway is a
supplemental analysis to an attainment demonstration in cases where a
jurisdiction is not predicted to attain an air quality standard based on air quality
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modeling; it is a recommended option for accounting for EE/RE policies and
programs where a state, tribal or local agency wants to claim emissions benefit
that will potentially affect air quality in the attainment year, but where modeling
the impacts of the policy or program is either too resource intensive or not
feasible for other reasons and/or the jurisdiction is not interested in SIP/TIP
credit.
Each pathway is appropriate for a specific set of circumstances and has its own
documentation and analytical provisions.
Challenges of Incorporating Energy Efficiency/Renewable Energy
Policies and Programs in State and Tribal Implementation Plans
In addition to the advantages, the EPA also recognizes the challenges associated with
incorporating EE/RE policies and programs in SIPs, including:
• Establishing partnerships between air and energy regulators in jurisdictions
• Quantifying the emissions and air quality benefits of EE/RE policies and programs
One challenge is establishing strong, productive partnerships among energy and
environmental agencies within state, tribal or local governments. In many jurisdictions,
environmental agencies have not traditionally partnered with public utility commissions
(PUCs) and state energy offices (SEOs). Collaborating with PUCs and SEOs can help all
parties understand the details of relevant EE/RE policies and how the associated
emission benefits can help an area attain one or more NAAQS. Greater collaboration
may help with the transfer of energy information that is needed for SIP/TIP
documentation from energy to air agencies. Partnerships among state air and energy
offices can facilitate successful monitoring of compliance with adopted EE/RE policies
and evaluation of their impacts; this will ensure that projected energy and emission
benefits are achieved.
The EPA also recognizes that quantifying the emission impacts of EE/RE policies and
programs in a manner acceptable for SIPs/TIPs can be challenging, especially in cases
where air agencies need to determine whether and to what extent the EE/RE initiative is
affecting a particular nonattainment area. Appendix I of the roadmap describes
emission quantification approaches state, tribal and local agencies can apply to
understand the magnitude and location of EE/RE policy and program emission impacts.
Depending upon the emission quantification approach used, emission reductions can be
attributed to specific EGUs within (or upwind of) a nonattainment area.
One of the key issues is to identify where and when the emission reductions need to
occur to reduce harmful air quality levels for a particular NAAQS in a particular area. For
criteria pollutants like sulfur dioxide (S02) and primary particulate matter (PM),
reductions in electricity demand from a fossil fuel-fired ECU can produce air quality
improvements in the area around the ECU in a shorter time frame. For other criteria
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pollutants, like ozone or secondary PM, the air quality improvements from EE/RE
policies and programs would occur at a larger regional scale and over a longer period
since these pollutants form in the atmosphere over a greater period of time and at a
greater distance from the pollution source.
Air agencies should evaluate the effectiveness of an EE/RE policy or program on
achieving benefits to air quality within a nonattainment area. This can depend upon the
form of the NAAQS - that is, short-term versus long-term concern - and on local
impacts versus long distance concerns. To address these challenges, in Appendix I, EPA
describes four emission quantification approaches for EE/RE policies and programs.
These approaches encompass a range of techniques that can be used to support the
four SIP pathways. In addition, the appendix addresses pertinent analytical questions,
as well as a description of the advantages and disadvantages of each approach.
This Roadmap Clarifies Existing Guidance and is Not a Regulation
This roadmap is being issued to clarify existing guidance and does not create new
guidance. In addition, the CAA and implementing regulations at the Code of Federal
Register, Title 40, Part 51: Requirements for Preparation, Adoption, and Submittal of
Implementation Plans (40 CFR Part 51) contain legally binding requirements. This
roadmap does not substitute for those provisions or regulations, nor is it a regulation
itself. Thus, it does not impose binding, enforceable requirements on any party, and
may not be applicable in all situations.
The EPA and state, tribal and local agency decision makers retain the discretion to adopt
approaches for approval of SIPs/TIPs that differ from this guidance where appropriate
and consistent with applicable law. Any final decisions made by EPA on a submitted
revision for a particular SIP will be made based on the statute and regulations within the
context of EPA notice and comment rulemaking. Therefore, interested parties may raise
questions and objections about the substance of this roadmap and appropriateness of
its application to a particular situation. The EPA will, and state, tribal and local agencies
should similarly, consider whether the recommendations in the roadmap are
appropriate in a particular situation.
This roadmap is a living document and may be revised periodically without public
notice. However, the EPA welcomes public comments on this document at any time and
will consider those comments in any future revision of this document. Finally, this
document does not prejudice any future final EPA decision regarding approval of any
SIP, which will only be completed through notice and comment rulemaking.
Scope of Roadmap
The roadmap described in this document pertains only to the impact of EE/RE policies
and programs on air emissions from the electric utility sector, which is a major
stationary source of emissions contributing to ozone, S02 and PM2.s air quality levels.
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Other source sectors, especially mobile sources,10 can also contribute to ambient levels
of these pollutants. In addressing nonattainment air quality problems, state, tribal and
local agencies will need to consider emission reductions from more than the utility
sector.
10 EPA (1997).
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Figure 4: How the Appendices Support the Four Pathways
For all four
pathways, see:
•Appendix A for glossary of energy and air quality terms
•Appendix B for information on how electric power distribution works in an area
•Appendix D for the fundamentals of EE/RE policies and some key information to
determine which policies and programs your area has adopted and is implementing
•Appendix I for an easy way to obtain a rough estimate of the emission benefits from
EE/RE policies and programs
•Appendix J for information on energy savings from EE/RE policies that are "on the
books"
• Appendix K for state examples of past or proposed incorporation of EE/RE in SIPs
For the baseline
emissions
projection
pathway, see:
•Appendix C.2 for information on existing EPA baseline guidance
•Appendix E for details on the baseline pathway
For the control
strategy
pathway, see:
•Appendix C.3 for information on existing EPA control strategy guidance
•Appendix F for details on the control strategy pathway
For the
emerging/
voluntary
measures
pathway, see:
•Appendix C.4 for information on existing EPA voluntary/emerging measures guidance
•Appendix G for details on the voluntary/emerging measures pathway
For the WOE
pathway, see:
•Appendix C.5 for information on existing EPA WOE guidance
•Appendix H for details on the WOE pathway
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SECTION 2.0: ACTIVITIES FOR GETTING STARTED
The purpose of this section is to help state, tribal and local agencies understand what
activities EPA recommends agencies consider when deciding whether to incorporate
EE/RE policies and programs in a SIP/TIP. The EE/RE SIP Pathway Flowchart (Figure 5)
recommends initially that agencies become familiar with:
• Basic functioning of the electric system
• Roles and responsibilities of key state energy-related organizations
• State, tribal and local EE/RE policies and programs in the jurisdiction
• Estimating potential emission reductions
• Understanding existing EPA EE/RE SIP guidance
• Common "getting started" questions and answers
More information on each one of these topics can be found in the appendices.
Functioning of the Electric System
Many air agencies are already familiar with the electric system, and the roles and
responsibilities of energy agencies in their state. For those who want more information
on the topic, it is provided here. It is important to understand the workings of the
electric system and to address key issues that arise in energy and air quality planning,
most notably quantifying the emission impacts and accounting for the EE/RE policies
and programs in SIPs/TIPs (see Appendix I). The operation of regional power systems is
complex and dynamic, so predicting how these systems will react to new resources -
including EE and RE - is likewise a complex undertaking.
The decision of which ECU to dispatch and in what order is based in principle on
economics, with the lowest cost resources dispatched first and the highest cost
resources last. The last resources to be called upon are referred to as the marginal
units, which are typically the most expensive units to run. In some cases in certain parts
of the country, these plants can also be among the highest emitting and least efficient
EGUs of the power plant fleet.
EE/RE can affect dispatch in different ways, though both cause marginal units to run less
frequently and can result in fewer air emissions. In the case of EE, energy savings occur
at the point of consumption, resulting in a reduction in demand on the electric system
and a corresponding reduction in emissions from the power plant fleet. In the case of
RE, energy savings occur at the point of generation, resulting in a reduction of
generation by fossil fuel-fired EGUs and a corresponding reduction in emissions from
the power plant fuel. (Refer to Appendix B for more information on the electric
system.)
Roles and Responsibilities of Key State Electric Energy Organizations
Reaching out to your energy counterparts and explaining the emissions and air quality
benefits of EE/RE policies and programs within your jurisdiction is one way to start
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identifying partnership opportunities, common objectives and policy goals. In most
cases, the SEOs and PUCs will have information on the state's adopted or planned EE/RE
policies and programs. The regional planning organizations and sustainability
coordinators, within the city or county operations, will most likely have information on
adopted or planned local EE/RE policies and programs. Tribal jurisdictions may also
have a designated representative that is knowledgeable on EE/RE policy and program
issues.
Building partnerships with energy agencies and organizations within your jurisdiction,
prior to and during the SIP planning stages, can help facilitate information exchange on
areas such as: energy impacts of EE/RE policies and programs for required SIP/TIP
emission quantification and documentation. To get started, EPA recommends reviewing
the roles and responsibilities of the following energy-related organizations: SEOs, PUCs
and Regional Transmission Organizations/Independent System Operators. To assist,
Figure 6 lays out what they do, the types of policies and programs they oversee and the
types of information they can provide. The EPA encourages state, tribal and local
agencies to collaborate with these energy experts to obtain information on their
jurisdiction's EE/RE policies and programs. (Appendix B provides more information on
the different types of agencies and how they interact.)
State, Tribal and Local Energy Efficiency/Renewable Energy Policies and
Programs in Jurisdictions
The following questions can help lead state, tribal and local agencies in the appropriate
direction:
• Which EE/RE policies and programs has the jurisdiction adopted?
• What are the details of those policies and programs in terms of implementation
dates, stringency, financial commitments, historic investments in EE/RE and
important enforcement features?
• Is there any information on the energy impacts (projected and/or historical) of
those EE/RE policies in terms of energy saved, quantities of RE procured and air
emission impacts?
• Which organization or agency monitors and evaluates the energy impacts of
those EE/RE policies?
Certain terms are important to understand as state, tribal and local agencies review this
roadmap:
• EE/RE policies are regulations, statutes, or state public utility commission orders
that require parties to acquire EE and/or RE or to commit to funding levels for
programs aimed at acquiring EE/RE. Policies can include Renewable Portfolio
Standards (RPS) and Energy Efficiency Resource Standards (EERS).
• EE programs are designed to increase adoption of energy efficient technologies
and practices in particular end-use sectors through education and outreach,
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financial incentives, financing mechanisms, and/or technical or deployment
assistance. Such programs are frequently implemented in support of mandatory
state-level policy goals (e.g., an EERS).
• RE programs are designed to increase the production and use of RE sources
through resource procurement and development, education and outreach,
financial incentives, and/or technical assistance. Such programs may be
implemented in support of mandatory state-level policy goals (e.g., an RPS), or
may be for other purposes (e.g., voluntary purchases of RE).
Estimating Potential Emission Reductions
After a jurisdiction determines what state, tribal and local EE/RE policies and programs
are in place and gathers information on their energy impacts, EPA recommends air
quality professionals conduct an initial calculation of potential emission benefits.
Estimating the potential emission reductions allows a jurisdiction to determine whether
further investigation is warranted.
Appendix I describes four different emissions quantification approaches for EE/RE
policies and programs. Three of these quantification approaches could help with
performing back-of-the-envelope calculations of potential emission reductions of EE/RE
policies and programs. Having a sense of the emissions impact of a policy or program
will help a jurisdiction decide whether and how to move forward with incorporating an
EE/RE policy or program in a SIP/TIP.
Understanding Existing EPA Energy Efficiency/Renewable Energy SIP
Guidance
The EPA has issued five guidance documents related to incorporating EE/RE programs in
SIPs. Appendix C provides highlights of the parts of those documents relevant to EE/RE
and SIPs. State, tribal and local agencies should gain a basic understanding of EPA's
existing guidance (and this roadmap's clarifications) before deciding on which pathway
or pathways to pursue for its policies and programs.
Common "Getting Started" Questions and Answers
The EPA has also identified important EE/RE policy and program frequently asked
questions state, tribal and local agencies could ask when determining whether to
incorporate the emission impacts of EE/RE policies and programs in a SIP/TIP. Table 1
includes several "getting started" questions and answers to help state, tribal and local
agencies address some basic issues.
21
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Figure 5: Energy Efficiency/Renewable Energy Pathway Flowchart for State and Tribal Implementation Plans
Take initial steps to get started, including learning about EE/RE policies and programs in the jurisdiction, the electric system, roles and responsibilities of key
state energy-related organizations, the magnitude of potential emission benefits, and existing EPA EE/RE SIP guidance
See Appendices A. B and C
I
Does the
urisdiction
haveEERE
emerging or
voluntary
programs?
process
for each
policy/
program
Does the
urisdiction
vwnt a federally
enforceable
contro
strategy?
On the books"
EERE policies and
programsinthe
urisdiction
Onthev\ey"
EEjRE policies
andprogramsin
thejurisdiction
EmergingA/oluntary
Measures Path way
See Section 5.0
sad AppeiHta G
Control Strategy
Pathvoy
See Section 40
dtid f\pp*ndrt f
Note: Th is flowch art is in tended to accommodate most EE/PE policies/programs, but not necessarily all
State, tribal and local agencies should con sultwith EPA regional offices on individual policies/programs
that the flowch art does not address.
22
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Figure 6: Energy Organizations' Roles and Responsibilities
State Energy
Offices
What this aeencv does:
• Provide assistance in achieving state energy-related goals
Develop analysis for energy policies
• Design and implement energy programs in the state that affect the industrial, commercial and
residential sectors
Types of policies and programs this agency oversees:
* State energy program funded programs, weatherization programs (e.g., funds from American
Reinvestment and Recovery Act)
• Renewable energy grants and loan guarantees
Support the development and adoption of EE codes and standards
Information this organization can provide:
Energy savings and generation impacts from policies listed above
Public Utility
Commissions
Whal this agency does:
• Regulate the rates and services of a regulated utility that provides essential services, including
electricity and natural gas
• Responsible for assuring reliable utility service at fair, just, and reasonable rates
• Oversee EE/RE policies and programs managed by regulated utilities or that involve ratepayer funds
Types of policies and programs this agency oversees:
• Energy Efficiency Resource Standards
• Renewable Portfolio Standards
• Public Benefits Funds
Information this organization can provide:
• Energy savings and generation from policies listed above
• Evaluation, measurement and verification of energy impacts
• Decisions made by the commission in dockets, orders or rules
Regional
Transmission
Organizations and
Independent
System Operators
What this organization does:
• Serve as grid operators, coordinating the power grid to ensure reliable delivery
• Match generation to load instantaneously to keep electricity supply and demand balanced
• Administer forward capacity markets in cases where utilities can use energy efficiency as a
resource to meet demand
Types of policies and programs this organization oversees:
• Forward capacity markets to procure enough capacity to meet forecasted energy demand a
certain number of years in advance
Information this organization can provide:
• Load growth projections and future generation capacity expected to meet demand in near
term future
23
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Table 1: Common "Getting Started" Questions and Answers
Question
With all the other regulatory activities I'm
responsible for, why should I take time to
consider EE/RE measures?
Answer
In many cases, state, tribal and local governments have
already adopted EE/RE policies and programs for reasons
other than air quality improvement. It may be a matter of
simply accounting for the emission impacts of these
existing initiatives. The EE/RE policies and programs may
be able to provide emission reductions, which could
include criteria pollutants, toxic air pollutants, and
greenhouse gases. Air quality planners will benefit from
understanding the full benefits of these strategies
I represent a city government in a
nonattainment area that wants to take
credit for locally-initiated EE measures.
The plan for the nonattainment area is a
SIP, managed by the state government,
not a local plan. What should I first do?
One of the first actions EPA recommends is to talk with
your state environment department to understand its
position. The SIP is a State Implementation Plan, so an
important first step is to engage the state agency
primarily responsible for that plan. Analyses will need to
be performed of the expected emission benefits of the
measures and any impact on air quality in the
nonattainment area. Agreements between local and state
government agencies can clearly delineate responsibility
for making up any discrepancies that might arise if
emission reductions do not occur as expected.
Some states may be apprehensive about
depending on EE/RE policies or programs
for emission reductions in the SIP because,
if the reductions fail to materialize, then
the state will have to make up the
reductions elsewhere. Is this an issue?
Some states have expressed this apprehension. If this is a
concern, states can evaluate which SIP pathway can
accommodate a jurisdiction's unique needs. The WOE
pathway is also available to reach attainment goals even if
reductions fail to materialize. In addition, for the baseline
pathway and voluntary measures, if the state finds the
EE/RE policy or program is not needed to attain the
NAAQS, then action would not be needed to make up the
shortfall.
Are daily emission reductions from electric
sector EE/RE SIP initiatives typically small?
The jurisdictions that have requested SIP credit in a
nonattainment area have typically claimed less than 1
ton/day of nitrogen oxides (NOX) credit for an ozone SIP.
However, EPA is aware of some state proposals that
would seek multiple tons/day of NOX credit. The
magnitude of emission reductions depends on the
aggressiveness of the EE/RE policy or program and its
effects on EGU emissions. The EPA encourages state and
local governments initially to review more aggressive
EE/RE policies and programs so that jurisdictions can
capture the largest benefits first.
24
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Question
How much effort does it take to complete
the technical documentation to account
for emission impacts of EE/RE policies and
programs in SIPs/TIPs?
Answer
It varies depending upon a number of factors, including
which EE/RE policies and/or programs state, tribal or local
agencies have adopted; the energy data availability;
whether the air agency has an established relationship
with energy regulators; and the chosen SIP pathway. For
example, relatively less effort is needed to fold existing
EE/RE policies into a baseline emission projection analysis.
For the emerging/voluntary measures and WOE
pathways, documentation is based on a jurisdiction's
desired level of rigor and energy information availability.
By contrast, for the control strategy approach, a higher
level of documentation and communication with energy
regulators is needed and the particular EE/RE provisions
need to be enforceable.
We have been designated as a
nonattainment area for ozone and are
subject to an emissions budget program
for NOX. Can we get SIP credit for EE/RE
policies or programs?
Yes, SIP credit is available under these circumstances.
One acceptable way is by achieving additional emission
reductions from EE/RE policies or programs in the
presence of this type of program through the retirement
of allowances commensurate to the emissions expected
to be reduced by the EE/RE policy or program. Another
way is to clearly demonstrate that emissions will decrease
in the nonattainment area and/or time of interest despite
the presence of the emissions cap.12
Where do you go to find the major steps
to proceed from having a state or local
EE/RE policy or program to realizing SIP
credit for such a measure in a SIP revision?
The EPA has designed this roadmap to cover the major
principles common for each SIP pathway, Figure 5 of this
roadmap is provided as a starting point. Depending upon
which SIP pathway is pursued, further information on the
major steps for each pathway can be found in the
roadmap appendices that illustrate the major steps a
state, tribal or local agency would take to quantify
emission reductions, documentation and other applicable
requirements.
How do I know which state, tribal or local
EE/RE policies or programs may already be
accounted for in a future emissions
inventory, which is incorporated in a SIP
baseline emissions projection?
Appendix E of this roadmap outlines the steps state, tribal
and local governments can take to understand what EE/RE
policies and programs are already reflected in the SIP
emission baseline projections. First, a state, tribal or local
agency needs to know the information source of energy
forecast and evaluate which EE/RE policies are affecting
the demand and supply assumptions in the energy
forecast.
EPA (2004a), pp. 9-10.
" The Agency plans to provide an example of such a demonstration and to further clarify this answer.
25
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Question
What specific tools are available to enable
me to estimate the kilowatt-hours (kwh)
impacts from various, common EE and RE
programs (e.g., green building codes,
renewable energy credit purchases, water
conservation and water pumping
improvements, retrofits of public
buildings)?
Answer
The energy regulators within your state or energy-related
local government offices are normally the people who
manage these common EE/RE programs. The EPA
encourages you to reach out to your colleagues to
understand the tools and methods that are employed to
estimate the energy impacts of specific programs. You
can also refer to the following website for general
information on this topic.
http://www.epa.gov/statelocalclimate/state/activities/me
asuring-savings.html.
How can I specifically estimate the
magnitude of kwh reduced (and emissions
reductions) from each EGU that supplies
the geographic area where the EE/RE
policies and programs are being
implemented?
Examples supplied in Appendix K of this roadmap discuss
this methodology. An energy model such as a dispatch
modeling has the capability of performing this type of
analysis. Performing a regional analysis is the best
approach for this situation because the electricity
suppliers generally cross state boundaries to meet the
demand or reduce demand when EE/RE programs are
brought onto the electric grid in a particular area.
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SECTION 3.0: DECISION-MAKING FOR NAVIGATING THE FOUR
PATHWAYS
After completing the initial tasks identified at the top of the EE/RE Pathway Flowchart
(Figure 5), the next activity EPA recommends is exploring which of the four pathways
described above represents the most appropriate mechanism for incorporating a
jurisdiction's EE/RE policies and programs in their SIP/TIP. The purpose of this section is
to help state, tribal and local agencies with this task by navigating through the decision-
making flowchart.
To use the flowchart, jurisdictions need to understand certain definitions contained in
the EPA's 2004 guidance13 and for federal enforceability:
• An emerging program does not have the same high level of certainty as
traditional measures for quantification purposes. (Traditional measures are
generally thought of as control measures applied to stationary industrial sources
that can take the form of emissions limitations.)
• A voluntary program is not enforceable against an individual source or
implementing party.
• Federal enforceability refers to the fact that in the SIP planning process when
EPA approves a SIP control strategy submitted to it for review, the SIP becomes
federally enforceable, which provides EPA with authority to ensure the SIP is
implemented. Once EE/RE policies and programs become federally enforceable,
EPA has the authority under the CAA to apply CAA-authorized penalties against
the noncompliant party.
Decision-Making Flowchart
The EPA has identified certain key EE/RE policy/program characteristics agencies should
address when determining which pathway they can pursue to account for the emission
impacts of EE/RE policies and programs in a SIP or TIP. State, tribal and local agencies
can apply these characteristics to their unique situations and needs. As additional aids,
for each pathway Figure 7 provides characteristics of policies and programs that would
suit each approach and Table 2 contains examples of EE/RE policies and programs for
the four pathways.
Five key questions will aid jurisdictions in determining what SIP pathway(s) to pursue for
each EE/RE policy or program, or group of EE/RE policies or programs:
1) Does the jurisdiction have emerging or voluntary programs?
2) If the answer is "yes," then does the jurisdiction want SIP/TIP credit under EPA's
emerging/voluntary measures policy?
13 EPA (2004a, 2004b).
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• The term "SIP/TIP credit" means emission reductions achieved by using
technologies or strategies, used by a state or tribe for the purpose of
meeting emission reduction requirements in its reasonable further
progress (RFP14), attainment or maintenance strategy.
3) If the answer is "no," then does the jurisdiction want a federally enforceable
control strategy?
4) Are the EE/RE policies and programs "on the books" (i.e., already adopted by a
legislative or regulatory body)?
• If the policies and programs are not "on the books," then the logical
assumption is whether the jurisdiction has EE/RE policies and programs
that are "on the way" to being adopted prior to SIP submittal to EPA.
5) Does the jurisdiction have access to emissions projection modeling or can it
perform baseline emissions projections itself?
State, tribal and local agencies can do a combination of any, or all, of the four pathways.
They should proceed through the steps in the flowchart in Figure 5 for each separate
policy and program in their jurisdiction so that they evaluate each policy and program
separately.
Whether a jurisdiction has emerging and voluntary measures serves as the entry point
question into the decision-making flowchart. The next two sections describe the
possible scenarios that can result from whether the answer to this question for a
specific policy or program is "yes" or "no."
Pathways for Jurisdictions That Have Emerging and/or Voluntary
Measures
If a jurisdiction has EE/RE policies and programs that meet the emerging and/or
voluntary measures definition and wants SIP/TIP credit for the emission reductions,
then it should consider the emerging/voluntary measures pathway. If it does not
choose that pathway, but nevertheless wants to reflect the emissions reduction benefit
of its EE/RE policies and programs in its SIP/TIP, then the WOE pathway would be the
appropriate option.
Pathways for Jurisdictions That Do Not Have Emerging and/or
Voluntary Measures
If a jurisdiction does not have EE/RE emerging and/or voluntary programs, then it can
consider at least two or three of the other pathways. The first important question is
whether or not the jurisdiction wants the EE/RE policy or program to be a federally
14 Under the Clean Air Act, the term "reasonable further progress" means such annual incremental
reductions in emissions of the relevant air pollutant as are required by the CAA or may reasonably be
required by the Administrator for the purpose of ensuring attainment of the applicable NAAQS by the
applicable date. In previous guidance, when referring to SIP requirements EPA also referred to rate of
progress or ROP, which was intended to cover a portion of emissions needed to satisfy reasonable further
progress. In this guidance, EPA has dropped the ROP term and is now referring to the reasonable further
progress requirement only as RFP.
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enforceable control strategy. If the answer is "yes," then the control strategy pathway
would be the recommended option. If the answer is "no," then the next decision point
hinges on whether the jurisdiction has access to emissions projection modeling or can
perform the baseline emissions projections itself. If the answer is "yes," EPA
recommends that "on the books" policies and programs be accounted for in the
baseline emissions projection pathway. If the answer is "no", then EPA recommends the
WOE pathway.
Additional Resources
Table 3 contains summary information on SIP credit for each pathway, including
appropriate percentage of SIP "credit," suggested quantification methods and relevant
EPA guidance. It also includes suggested emission quantification approaches state,
tribal and local agencies can use as guidelines when accounting for emission impacts of
EE/RE policies and programs within a certain SIP/TIP pathway. These approaches are
suggestions only, so a jurisdiction can choose to use an alternative approach, not listed
here, that has comparable rigor and emission results. Before getting too deeply into any
EE/RE emissions analysis, contact the air program in an EPA regional office15 to discuss
options for emission quantification approaches that are appropriate for the EE/RE
policies and programs at hand.
For more information, go to: http://www.epa.gov/aboutepa/where.html.
29
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Figure 7: Characteristics of Policies and Programs Suitable for Each Pathway
Baseline Emissions
Projection Pathway
• EE/RE policies that are"on the books," have not been accounted for elsewhere in the SIP and are
not emerging and/or voluntary programs
•Can be state enforceable but is not federally enforceable
•Revisions could be required through a CAA SIP call if reductions from an EE/RE policy are needed to
attain the NAAQS and policy is not implemented as assumed in baseline projections
• ECU baseline projections are best done on a coordinated, regional basis
•When available, agencies can utilize EPA's EGU baseline projections or develop their own
projections model or approach
•EGU baseline projections using energy models or similar methods reflect EGU operations as a whole
system
Control Strategy
Pathway
•"On the way" policies and programs that are not emerging and/or voluntary programs and that will
produce emissions benefits in the planning timeframe of their SIP/TIP
•EE/RE policies and programs for which the state, tribal or local agency wishes to seek SIP credit
• Once approved into the SIP, federally enforceable (enforceable against an air pollution source or
implementing party)
•State, tribal and local agencies will have emission reductions from a control strategy to help them
attain the NAAQS
• Documentation is needed to demonstrate that the EE/RE policy and/or program is permanent,
enforceable, quantifiable, and surplus
Emerging/Voluntary
Measures Pathway
•Good option for locally-based EE/RE activities
• Voluntary EE/RE policies and programs that are not enforceable against an air pollution source or
implementing party
• Emerging EE/RE policies and programs for which it is difficult to quantify emission impacts
• EE/RE policies and programs for which state, tribal or local agency wishes to seek SIP credit
•Emerging/voluntary measures can be "bundled" in a single SIP submission and considered as a
whole
• EPA will propose to approve through the SIP rulemaking process SIP/TIP credit up to six percent for
EE/RE policies and programs, or more, if they can make a clear convincing case
Weigh of Evidence
Pathway
•EE/RE policies and programs for which state, tribal or local agency does not wish to seek SIP credit
and for which quantification of the air quality impacts of the emissions reductions is unavailable or
infeasible
• Can include unspecified emission reductions from any policy or program in weight of evidence that
may impact a nonattatnment area
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Table 2: Examples of Energy Efficiency/Renewable Energy Policies and Programs for the Four
State and Tribal Air Planning Pathways16
Policies Programs
Baseline Emissions Projection Pathway
Existing policies such as:
• Renewable portfolio standards
• Energy efficiency resource standards
• Public benefit funds
• Not applicable
Control Strategy Pathway
New policies (or proposed increases in
stringency for existing policies) with respect
to:
• Renewable portfolio standards
• Energy efficiency resource standards
• Public benefit funds
• Not applicable
Emerging/Voluntary Measures Pathway
New or existing policies such as:
• Mandatory commercial whole-building
energy use disclosure at time of sale or
lease
• On-bill financing for EE retrofits
New or existing programs such as:
• Development and implementation of municipal
energy conservation plan
• Municipal building retrofit programs
• Statewide EE awareness program
• Customer feedback on energy usage
Weight of Evidence Pathway
New or existing policies such as:
• Renewable portfolio standards
• Energy efficiency resource standards
• Public benefit funds
• Mandatory commercial whole-building
energy use disclosure at time of sale or
lease
New or existing programs such as:
• Development and implementation of municipal
energy conservation plan
• Municipal building retrofit programs
• Statewide EE awareness program
• Customer feedback on energy usage
16 Example policies are provided here for all four pathways. Generally, because of their larger scope,
EE/RE policies have the potential to provide greater emission reductions than programs. By contrast,
EE/RE programs are frequently implemented in support of mandatory state-level policy goals and
individually have the potential to achieve smaller emission impacts. Example programs are provided for
only two of the four pathways - the emerging/voluntary measures and WOE pathways. Example
programs are not provided for the baseline emissions projection and control strategy pathways because
they are not anticipated to provide enough potential emission reductions to warrant the time and
resources necessary to satisfy the SIP documentation needs of each of those pathways. However,
jurisdictions can decide if this is true in their unique circumstances. Reviewing the resources needed can
help provide the context for EE/RE policies and programs as jurisdictions consider which SIP/TIP pathway
is appropriate for each of its EE/RE policies and programs.
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Table 3: Information on State and Tribal Implementation Plan Credit and Quantification
Approaches
Percentage of SIP "Credit" Suggested Quantification Relevant EPA Guidance
Allowed Methods
Baseline Emissions Projection Pathway
• No SIP credit limit
• Allows for jurisdictions to
account for established EE/RE
policies in the SIP
• Energy model approach
• Historical hourly emission
rate approach
• Alternative emissions
projection tools or analysis
• More information on IPM is
available at
http://www.epa.gov/airmarkt/epa
-ipm/
• "EIIP, Emissions Projections
Volume X", EPA,
http://www.epa.gov/ttnchiel/eiip
/techreport/volumelO/xOl.pdf.
1999
Control Strategy Pathway
• No SIP credit limit
• Need to present case for
credit
• Energy model approach
• Historical hourly emission
rate approach
• Capacity factor approach
• "Guidance on SIP Credits from
Emission Reductions from Electric-
Sector Energy Efficiency and
Renewable Energy Measures,"
EPA,
http://www.epa.gov/ttncaaal/tl/
memoranda/ereseerem gd.pdf,
August 2004
Emerging/Voluntary Measures Pathway
• Presumptive limit is 6 percent
of the total amount of
emission reductions required
for SIP purposes
• Limit applies to the total
number of emission
reductions that can be
claimed from any
combination of emerging
and/or voluntary measures
• Can be greater than six
percent where a clear and
convincing justification is
made
• Capacity factor approach
• "Incorporating Emerging and
Voluntary Measures in a State
Implementation Plan (SIP)," EPA,
http://www.epa.gov/ttncaaal/tl/
memoranda/evm ievm g.pdf,
September 2004
• "Guidance on Incorporating
Bundled Measures in a State
Implementation Plan," EPA,
http://www.epa.gov/ttn/caaa/tl/
memoranda/10885guideibminsip.
pdf, August 2005
Weight of Evidence Pathway
• No SIP credit limit
• Only an option if the
predicted air quality value in
the attainment
demonstration (using
modeling) is within a
prescribed margin of
attaining the NAAQS
• Energy model approach
• Historical hourly emission
rate approach
• Capacity factor approach
• eGRID sub region non-base
load emission rates
• "Guidance on the Use of Models
and Other Analyses for
Demonstrating Attainment of Air
Quality Goals for Ozone, PM2.5,
and Regional Haze," EPA,
http://www.epa.gov/ttn/scram/gu
idance/guide/final-03-pm-rh-
guidance.pdf, April 2007
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Baseline Emissions
Projection Pathway
For an understanding of existing baseline
pathway guidance
See Appendix C.2
SECTION 4.0: BASELINE EMISSIONS PROJECTION PATHWAY
When developing a SIP/TIP, jurisdictions must have an inventory of current emissions
and a baseline projection of future emissions. The baseline emissions projection shows
the level of emissions in the future
target year that will result if no
additional control strategies, policies
or programs are implemented. The
baseline emissions projection
includes effects of existing federal,
state, tribal or local policies or
programs that will come into effect
by the future attainment year, but
does not include any additional ("on
the way") strategies not yet in
statute or codified by a regulatory
body. These strategies can include
cases where a local community
wants to capture local EE/RE SIP measures that are not part of federal or state
regulations or statutes. The EPA will consider the concept of a state entering into a
binding commitment with a community in order to capture such reductions within the
baseline emissions projection pathway.
Jurisdictions can take steps to understand the impacts of their existing EE/RE policies
and programs, and to represent these impacts in baseline emission projections. State,
tribal and local agencies interested in accounting for "on the books" EE/RE policies in
the baseline emissions projections pathway can conduct their own analysis or use EPA's
emissions projections of the ECU sector.
For information on the baseline pathway
See Appendix E
--••
Task Checklist:
Baseline Emissions Projection Pathway
•S Identify and describe EE/RE programs and
policies to include in the baseline emissions
projection
•S Ensure EE/RE programs and policies will be in
place for the duration of the planning period
S Perform an analysis of the energy impacts
expected from the policies and programs
•S Ensure EE/RE emission reductions in the
baseline emission projections are not accounted
for as part of another pathway to avoid double
counting
Appendix E provides
details on incorporating
"on the books" EE/RE
policies in the SIP/TIP
baseline pathway and on
implementing this
pathway. Agencies
interested in EPA's energy
modeling capability (using
the IPM model) to account
for EE/RE policies in their
baseline emission
projections can start by
reviewing Appendix E.2.
State, tribal and local
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agencies considering developing their own method can also review Appendix J which
describes the methodology EPA used to develop energy savings estimates for state
EE/RE policies, provides an overview of the information EPA is making available and
outlines potential uses for the information.
Qualifying Criteria
Certain qualifying criteria have to be met in order to include a policy in the future
baseline attainment year. First, EE/RE policies in the baseline need to be mandatory
policies adopted by a governing body in a jurisdiction. For example, EERS that have
been adopted in law can be included in the baseline emissions forecast. However, if a
state, tribal or local agency is currently discussing whether to adopt such a policy, or has
proposed but not yet adopted one, then it is not appropriate to include. Voluntary
EE/RE policies - where there is no regulatory obligation - are likewise ineligible.
Second, EPA wants to ensure that the emission reductions from EE/RE policies are not
Baseline Emissions Projection Pathway:
Qualifying Criteria
• State, tribal and local agencies can include a specific
EE/RE policy in the future SIP/TIP attainment year
emissions baseline if:
• It has already been adopted by a governing body in
a jurisdiction AND
•The effects of the policy have not already been
accounted for in the SIP/TIP (no double counting).
counted twice. Prior to
adjusting the baseline
emission projections, state,
tribal and local agencies must
clearly understand which
EE/RE policies and programs
are already assumed in the
baseline. Likewise, any EE/RE
policies accounted for in the
baseline cannot be
incorporated in any other SIP pathway.
Mandatory Policies That Are Not Federally Enforceable
EE/RE policies incorporated into the baseline emission projections are not federally
enforceable and the EPA may not bring an enforcement action if a state fails to
implement such an initiative. However, if the state, tribal or local air agency is relying
on the EE/RE policy in the baseline to help the area attain a NAAQS and the EE/RE policy
is not implemented as assumed and air quality does not improve so as to meet the
NAAQS as anticipated in the SIP/TIP, then the jurisdiction may be required to implement
backup policies to make up for the emissions shortfall. The air agency might also agree
voluntarily to revise their SIP. Alternatively, EPA may initiate a SIP call under section 110
of the CAA in which EPA can require that the state revise the SIP to make up the
emissions relied upon to meet the applicable NAAQS. In addition, state public utility
commissions typically have mechanisms to require compliance with state EE/RE policy
requirements, including financial incentives for exceeding state policy requirements and
penalties for non-compliance. These enforcement mechanisms can provide more
certainty that EE/RE policy requirements will be achieved.
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Control Strategy Pathway
For an understanding of existing control
measure pathway guidance
See Appendix C.3
SECTION 5.0: CONTROL STRATEGY PATHWAY
SIPs and TIPs include strategies containing
control measures to provide emission
reductions to enable nonattainment
areas to attain and meet SIP
requirements. The control strategy
pathway would provide state, tribal and
local agencies the opportunity to include
EE/RE policies as part of a control
strategy. It is best suited for a state,
tribal or local agency that is
contemplating adopting EE/RE policies
before submitting its SIP to EPA ("on the
way" policies) and whose emission
benefits will be realized coincident with
the planning timeframe of its SIP. The
control strategy pathway offers the most visible and direct benefit in the SIP context, is
federally enforceable and represents the pathway taken when an agency adopts a
traditional control measure into a SIP/TIP (e.g., a control measure for a stationary
source).
For information on the control strategy
pathway
See AppendixF
This pathway involves significant
documentation and quantification
efforts. State, tribal and local
agencies that undertake the
control strategy option have to
provide a demonstration that the
emission reductions resulting
from their mandatory EE/RE
policies are permanent,
enforceable, quantifiable and
surplus. This roadmap clarifies
how those requirements can be
satisfied. As better information
about the success of these policies
and programs becomes available, EPA believes that it will be feasible for air agencies to
make the necessary demonstration to address the requirements in their SIPs/TIPS.
Control Strategy Pathway Must Meet Four Criteria
Because the control strategy pathway is federally enforceable, coordination issues could
be significant. The state, tribal or local air quality office will most likely need to reach
out to the state public utility commission and others to explain the implications of
making the state, tribal or local agency's mandatory EE/RE policies federally
enforceable.
Task Checklist:
Control Strategy Pathway
Identify and describe the EE/RE programs and
policies to include as control measures
Demonstrate EE/RE programs and policies are
permanent
Estimate the magnitude of potential emission
reductions before undertaking more
comprehensive analysis
Demonstrate EE/RE programs and policies are
surplus and not accounted for as part of another
pathway
Ensure EE/RE programs and policies are federally
enforceable
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Additional details about this pathway are included in Appendix F. Appendix F contains
information on four criteria that have to be met and how a state, tribal or local agency
can satisfy them (see Figure 8). The strategy must be permanent throughout the term
for which the credit is granted unless it is replaced by another measure or the state
demonstrates in a SIP revision that the emission reductions from the measure are no
longer needed to meet applicable requirements. The strategy must be federally
enforceable and its emission reductions must be quantifiable and include procedures to
evaluate and verify over time the level of emission reductions actually achieved. The
emission reductions must be surplus and not double counted.
With respect to quantifying the benefits of mandatory EE/RE policies, the approaches
outlined in Appendix I reflect that some state, tribal and local agencies (or groups of
state, tribal and local agencies) will possess the resources and capability to perform
sophisticated modeling analyses of the energy and air benefits of mandatory EE/RE
policies, while others will not. Appendix I contains four quantification approaches that
range in sophistication and describes how to handle uncertainty, including which
approaches would be appropriate for the control strategy pathway.
Figure 8: Four Criteria the Control Strategy Pathway Must Meet
Permanent
Enforceable
Quantifiable
Surplus
•Evidence that
regulation or
legislation is
mandated
throughout
attainment
planning period
•EPA has ability to
enforce EE/RE
policies and
programs brought
into SIPs as control
strategies
•Federal
enforceability is key
for expanded SIP
credit
•Use a reliable and
replicable emissions
quantification
approach that
illustrates which
EGUs will reduce
emissions based on
EE/RE policies and
programs
•Document no
double counting of
emissions
reductions
•Demonstrate
emission reductions
are not used for
other CAA
requirements (e.g.,
under a cap and
trade program)
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Emerging/Voluntary Measures
Pathway
SECTION 6.0: EMERGING/VOLUNTARY MEASURES PATHWAY
In the 2004 guidance,17 EPA recognized that many jurisdictions of the country had
implemented most available, traditional emission control strategies and wanted to try
new types of pollutant reduction strategies to attain NAAQS, including emerging and
voluntary EE/RE programs. The EPA
supports and encourages the testing of
emerging and voluntary pollutant reduction
strategies. An emerging measure is a
measure or strategy that does not have the
same high level of certainty as traditional
measures for quantification purposes. A
voluntary measure is a measure or strategy that
is not enforceable against an individual
emissions source or a party responsible for
implementing the EE/RE activity. A measure can be
both emerging and voluntary. These measures can be state initiatives, but are generally
locally-based initiatives, that are designed to encourage or require citizens, businesses
or local government to reduce emissions.
For an understanding of existing
voluntary/emerging measures pathway guidance
See Appendix C.4
For information on the voluntary/emerging
measures pathway
See Appendix G
Task Checklist:
Emerging/Voluntary Measures Pathway
Identify and describe the emerging/voluntary EE/RE
policies and programs to be included in pathway
Calculate emissions reductions, including description
of quantification technique
The state, tribal, or local agency needs to make an
enforceable commitment to:
S Implement those parts of the measure for
which the agency is responsible
s Monitor, evaluate, and report at least every
three years on progress toward emission
reductions
s Remedy any SIP/TIP credit shortfall if the
program does not achieve projected emission
reductions
Certify EE/RE policies and programs are permanent
Certify EE/RE policies and programs are surplus and
not accounted for as part of another pathway
In addition, the individual emerging
and/or voluntary measure can be
"bundled" in a single SIP submission. The
emission reductions for each measure in
the bundle would be quantified and the
total reductions would be summed
together in the SIP submission. After SIP
approval, each individual measure would
be implemented according to its schedule
in the SIP. It is the performance of the
entire bundle (the sum of the emission
reductions from all the measures in the
bundle) that is considered for SIP
evaluation purposes, not the effectiveness
of any individual measure.
18
This pathway is similar to the control
strategy pathway in that an EE/RE
program can receive emission reduction
SIP credit. For emerging/voluntary stationary measures, the presumptive SIP credit limit
is 6 percent of the total amount of emission reductions required for RFP, attainment or
1 EPA (2004b).
! These measures can be bundled with non-EE/RE measures.
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maintenance demonstration purposes.19 These measures must satisfy the four criteria
for SIP measures:
• Permanent
• Enforceable
• Quantifiable
• Surplus
The 2004 guidance provides flexibility for emerging measures on the quantifiable
criterion and for voluntary measures it provides flexibility on the enforceable criterion.
The pathway is well suited for jurisdictions that have emerging and/or voluntary EE/RE
policies and programs that are not easy to enforce and/or quantify but for which the
jurisdiction would like SIP credit. The pathway establishes conditions that limit the
credit that emerging/voluntary measures can receive. (See Table 3 for details on how
much SIP credit is allowed under this pathway compared to other pathways.) The
emerging/voluntary measures pathway provides a mechanism that allows state, tribal
or local agencies to receive provisional emission reduction credit in their SIP for new
emission control and pollutant reduction strategies that have the potential to generate
additional emission reductions or air quality benefits. Provisional emission reductions
or pollutant reduction strategies can become permanent when post-implementation
evaluations validate the amount of emission reductions achieved.
19 EPA (2004b).
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SECTION 7.0: WEIGHT OF EVIDENCE PATHWAY
When state, tribal and local agencies prepare SIP/TIP demonstrations of attainment,
sometimes air quality modeling results can be inconclusive and predict that jurisdictions
may not attain a NAAQS based solely on air quality modeling. In those cases, EPA
guidance allows state, tribal or local agencies to submit WOE demonstrations to show
that, despite inconclusive modeling results, the nonattainment area will still attain
based on other evidence. The WOE
pathway can reflect mandatory and
voluntary EE/RE policies and programs
that demonstrate, through objective
analysis, which emission reductions will occur
within the same planning timeframe as that
used for attainment.
Weight of Evidence Pathway
For an understanding of existing WOE
pathway guidance
See Appendix C.5
For information on the WOE measures
pathway
See AppendixH
The WOE pathway is applicable where a state,
tribal or local agency has prepared an attainment
demonstration that includes modeling that results
in projected future air quality that is close to the NAAQS, but does not meet the level of
the NAAQS. In this case, an agency may choose to submit a WOE analysis, which may
include, among other things, alternative modeling results, emissions controls that were
not modeled, and ambient data trends and analyses. As part of the WOE showing, the
agency may wish to take advantage of EE/RE policies or programs adopted in its
jurisdiction for purposes other than the SIP/TIP. They may want to reflect the emission
benefits of the policies or programs in the determination because they believe that the
positive benefits will potentially affect air quality in the attainment year, but modeling
the impact of the policy or program is
Task Checklist:
Weight-of-Evidence Pathway
Identify and describe the EE/RE policies and programs
that it wishes to include in the WOE demonstration
Ensure EE/RE policies and programs will be in place for
the duration of the planning period
Perform an objective analysis of the benefits expected
from the policies and programs
Ensure that any EE/RE emission reductions included in
the WOE demonstration are not double counted as
part of another pathway
either too resource intensive or not
feasible for other reasons or the
jurisdiction is not interested in SIP/TIP
credit.
Agencies need to perform objective
analyses of the benefits expected from
the EE/RE programs and policies reflected
in the WOE demonstration that are
intended to help improve air quality in
the nonattainment area in question. The
more robust the analysis supporting the
WOE demonstration, then the stronger
the argument that the area will attain despite inconclusive air quality modeling results.
The WOE demonstration can be strengthened in several ways, including obtaining
commitments from SEO or PUCs that the EE/RE policy or program requirements are
approved or will be in place for the duration of the attainment plan. Process issues
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associated with this pathway can be more or less significant, depending on the extent of
the supporting analysis.
WOE demonstrations are generally a set of analyses of air quality, emissions,
meteorological data, and modeling data that state, tribal and local agencies can use to
show that attainment of a NAAQS is likely, despite initial modeled results that may not
show attainment or may be close to the level of the NAAQS. The greater the difference
between the modeled design value and the level of the standard, the more compelling
the additional evidence produced by analyses must be in order to conclude (based on
the WOE results) that attainment is likely despite the inconclusive modeled attainment
test. WOE demonstrations are described in guidance EPA has issued on their use in SIP
attainment demonstrations.20 The EPA guidance includes guidelines for assessing when
corroborating analyses and/or WOE determinations may be appropriate.
Emission reductions from mandatory EE/RE policies and voluntary programs proposed
for use in the WOE demonstration cannot be used elsewhere in the SIP. In other words,
no double counting is permitted. In addition, the measures must be in place for the
duration of the SIP planning period. Appendix H describes the WOE approach in more
depth and provides information on WOE analyses and Appendix K provides two
examples of states that incorporated EE/RE policies and programs in their SIP WOE
demonstrations.
20 EPA (2007).
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REFERENCES
American Council for an Energy-Efficient Economy (2011). The 2011 State Energy Efficiency
Scorecard. October 2011. Available online at
EPA (1997). Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in
State Implementation Plans (SIPs). October 1997. Available online at
EPA (2004a). Guidance on SIP Credits from Emission Reductions from Electric-Sector Energy
Efficiency and Renewable Energy Measures. August 2004. Available online at
EPA (2004b). Incorporating Emerging and Voluntary Measures in a State Implementation Plan
(SIP). September 2004. Available online at
EPA (2005). Guidance on Incorporating Bundled Measures in a State Implementation Plan.
August 2005. Available online at
EPA (2007). Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of
Air Quality Goals for Ozone, PM2.5, and Regional Haze. April 2007. Available online at
Federal Register (2011a). Vol. 76. No. 85. pp. 24976- 25147. Proposed Rule: National Emission
Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam
Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility,
Industrial-Commercial-lnstitutional, and Small Industrial-Commercial-lnstitutional Steam
Generating Units. May 3, 2011. Available online at
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United States Office of Air Quality Planning and Standards Publication No. EPA-456/D-12-001a
Environmental Protection Outreach and Information Division July 2012
Agency Research Triangle Park, NC
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