&EPA
Roadmap for Incorporating Energy
Efficiency/Renewable Energy
Policies and Programs into State and Tribal
Implementation Plans
Appendix F: Control Strategy Pathway
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EPA-456/D-12-001g
July 2012
Roadmap for Incorporating Energy Efficiency/Renewable Energy
Policies and Programs into State and Tribal Implementation Plans
Appendix F: Control Strategy Pathway
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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Contents
SECTION F.I: BASICS OF CONTROL STRATEGY PATHWAY F-4
Pathway Description F-4
Tradeoffs of Pathway F-4
Circumstances the Pathway is Best Suited For F-6
SECTION F.2: FOUR CRITERIA OF THE CONTROL STRATEGY PATHWAY F-6
SECTION F.3: QUANTIFICATION CRITERION F-6
Steps to Quantify Emissions Impacts F-6
Provide a Mechanism to Validate and Evaluate the Effectiveness of the Policy F-7
SECTION F.4: SURPLUS CRITERION F-7
SECTION F.5: ENFORCEABLE CRITERION F-8
SECTION F.6: PERMANENT CRITERION F-9
SECTION F.7: SIP CREDIT IN A MULTI-STATE SCENARIO F-9
REFERENCES F-ll
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SECTION F.I: BASICS OF CONTROL STRATEGY PATHWAY
Pathway Description
A control strategy is a policy, program, or requirement used by a state, tribal or local agency in
a nonattainment, attainment, or unclassifiable area to reduce ambient air pollution levels.
States adopt control strategies to satisfy Clean Air Act (CAA) requirements for the purposes of,
as appropriate, attaining or maintaining the National Ambient Air Quality Standards (NAAQS),
demonstrating reasonable further progress (RFP) towards attainment, or meeting other
statutory State Implementation
Plan (SIP) requirements.
Task Checklist:
Control Strategy Pathway
Identify and describe the EE/RE policies and programs to
include as a control measure
Demonstrate EE/RE policies and programs are permanent
Estimate the magnitude of potential emission reductions
before undertaking more comprehensive analysis
•S Estimate the EE energy savings and/or RE
generation
•s Quantify or estimate displaced EGU emissions
S Determine emission reduction impact on air quality
S Provide a mechanism to validate or evaluate the
effectiveness of the project or initiative
Demonstrate EE/RE policies and programs are surplus and
not accounted for as part of another pathway
•S Assess if the EGUs in the nonattainment area are
subject to a cap and trade program for the
applicable pollutant
Ensure EE/RE policies and programs are traditionally
federally enforceable
After jurisdictions adopt control
strategies, they incorporate them
into a SIP or Tribal
Implementation Plan (TIP) for a
particular air pollutant and then
submit them to EPA for review.
Collectively, all of the control
strategies in a SIP/TIP need to
reduce emissions to levels that
satisfy attainment, maintenance,
RFP, and other pertinent SIP
provisions.
This appendix addresses the
tradeoffs, level of effort,
methods, and other key criteria
involved in incorporating energy
efficiency and renewable energy
(EE/RE) policies and programs in a SIP/TIP as a control strategy. As with any SIP/TIP pathway,
EPA recommends that state, tribal and local agencies coordinate with their EPA regional office
as soon as they decide to move forward.
Tradeoffs of Pathway
State, tribal and local agencies can, of course, select more than one pathway for their
jurisdiction's different EE/RE policies and programs. With respect to the control strategy
pathway, including EE/RE policies and programs in a SIP/TIP under that pathway can help
jurisdictions meet their air quality goals by accounting for emission reductions needed to show
attainment, RFP, or maintenance. The control strategy pathway may be an especially appealing
option to state, tribal and local agencies that are having difficulty reaching attainment and are
seeking new and viable emission reductions opportunities.
State, tribal and local agencies should consider several tradeoffs and issues when deciding
whether to include EE/RE policies and programs in the control measure pathway consistent
with the jurisdiction's circumstances and objectives. Reviewing the tradeoffs will enable a
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state, tribal and local agency to evaluate the merits of following the control measure approach
in the context of the other three pathways.
Key tradeoffs and considerations when deciding whether to pursue the control strategy
pathway include:
• Transparency: Of the four pathways, this option offers the most transparent and direct
approach to estimating the air quality impacts of EE/RE policies. State, tribal and local
agencies will gain a better understanding of how much generation from which fossil
fuel-fired EGUs will be displaced as a result of future EE/RE policies/programs. State,
tribal and local agencies will have a tons-per-day amount of emissions for each fossil
fuel-fired ECU they expect to reduce based on a specified EE/RE policy and program.
State, tribal and local agencies will have emission reductions from a control strategy to
help them attain.
• Documentation: This option needs more documentation than the future baseline and
WOE approaches because under the CAA a jurisdiction would have to show that the
EE/RE policy/program was permanent, enforceable, quantifiable, and surplus. As better
information about the success of EE/RE policies and programs becomes available, EPA
believes it will be feasible for air agencies to make the necessary demonstration to
address the requirements in their SIPs/TIPS.
• Federal Enforceability: To gain SIP/TIP approval, the EE/RE policies and programs that
are included as a control strategy need to be enforceable against a responsible party.
State, tribal and local agencies should consider their role and responsibility, as well as
the associated resources needed to enforce EE/RE policies included in a control strategy.
• Coordination: Early coordination will help ensure that responsible agencies and entities
understand their roles and have sufficient time dedicated to incorporating EE/RE
policies and programs as a SIP/TIP control strategy. Developing strategies and
determining their efficacy for meeting and maintaining compliance with NAAQS
necessitates a high level of coordination among multiple government agencies.
• Level of Analytical Rigor: Overall, quantification under this pathway can be more
resource intensive because the state, tribal or local agency would have to perform an
ECU analysis that shows where emissions are likely to go down in relation to the
nonattainment area of interest. The specific level of effort necessary for quantifying the
emission reduction impacts depends on the analytical approach selected. Appendix I
describes four different approaches of analysis that vary in sophistication.
• Coordination Across Relevant State Agencies: Another factor affecting level of effort is
the degree to which agencies responsible for SIP implementation coordinate with
entities responsible for overseeing and evaluating EE/RE policies and programs (e.g.,
typically the state's public utility commission (PUC) or state energy office). The purpose
of these discussions is to:
• Help air quality planners fully understand the jurisdiction's EE/RE policies/programs,
including their extent, duration, and anticipated impact.
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• Ensure that all parties understand the implications of including EE/RE in the SIP,
including the obligation to sustain the program consistent with agreements in the
SIP and federal enforceability of SIP provisions.
• Help the respective agencies better understand the other's roles and
responsibilities.
o In many cases, formal agreements can be established between state air agencies
and PUCs to outline each entity's obligations for implementing the state's EE/RE
activities, quantifying their impacts, and including them in the SIP.
Circumstances the Pathway is Best Suited For
The control strategy pathway is best suited for "on the way" EE/RE policies that state, tribal and
local agencies want to include in their SIP/TIP control strategy that have not been accounted for
elsewhere in the SIP and that are not emerging/voluntary programs. (This could include
policies that were adopted after preparation of the SIP emissions baseline that were, thus, not
considered "on the books" when the baseline was prepared.) If incorporated in the control
strategy, such policies would be federally enforceable.
SECTION F.2: FOUR CRITERIA OF THE CONTROL STRATEGY PATHWAY
To become part of the SIP/TIP as a control strategy, the EE/RE policy or program needs to be:
• Quantifiable
• Surplus
• Permanent
• Enforceable
SECTION F.3: QUANTIFICATION CRITERION
Steps to Quantify Emissions Impacts
Emissions and emission reductions attributed to the measure are quantifiable if someone can
reliably measure or determine their magnitude in a manner that can be replicated. The
recommended procedure for determining the amount of SIP/TIP credit generated by an EE/RE
policy or program follows four basic steps:
• Step 1: Estimate the energy savings that an EE measure will produce, or, for a RE
project, the amount of energy generation that will occur.
• Step 2: Convert the energy impact in STEP 1 into an estimated emissions reduction.
• Step 3: Determine the impact from the estimated emission reduction on air quality in
the nonattainment area.
• Step 4: Provide a mechanism to validate or evaluate the effectiveness of the project or
initiative.
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Appendix I provides guidance on the first three of the four steps and describes two
quantification approaches that EPA suggests for estimating the emission reductions of EE/RE
control strategies:
• Dispatch or Capacity Expansion Model Approach
• Historical Hourly Emission Rate Approach
Provide a Mechanism to Validate and Evaluate the Effectiveness of the Policy
The purpose of step four is to determine the type of monitoring, record keeping, and reporting
that is needed to evaluate whether the expected energy impacts, emission reductions and/or
air quality improvements were achieved in practice. If an air agency wants to incorporate EE
policies as a control measure, the agency should conduct evaluation, measurement, and
verification (EM&V) of the EE impacts over time, as savings accrue. In jurisdictions with
significant levels of EE investment in place, a robust EM&V framework likely already exists and
is overseen by the PUC. Communications with these officials can reveal the frequency, rigor,
and scope of the EM&V effort needed, as well as the timing for impacts reporting.
Air officials can then use these data to document and validate the effectiveness of the EE policy
for SIP purposes. Public utility commissions can also point to any irregularities with the data, as
well as any issues with EE reporting that may affect the policy validation process. In
jurisdictions where the entity overseeing and evaluating the EE policy is not immediately
apparent, an inquiry with the EE service provider (often a utility or non-profit organization) or a
local organization can help. While it is not necessary for air officials to become experts in EE
EM&V, it may be useful to understand the sources of EE data, along with reporting schedules,
overall level of rigor, the roles played by leading organizations, and other basic information
relevant to the successful linkage of air and energy policy. For more information on EE EM&V,
see the National Action Plan for Energy Efficiency Guide on this topic.1
For RE policies and programs, jurisdictions should have a system in place to track whether
energy providers are meeting required percentage targets for procurement of RE. Typically, the
PUCs or state energy offices monitor utility compliance or performance on a year-to-year basis.
SECTION F.4: SURPLUS CRITERION
Jurisdictions cannot "double count" emissions reductions. Emission reductions associated with
EE/RE policies and programs may not be relied upon in any of the other three pathways
included in a jurisdiction's SIP/TIP. To demonstrate that this criterion has been met,
jurisdictions should provide:
• A statement that the appropriate agency has reviewed the control strategy and
confirms that it is not accounted for as part of other pathways in the SIP; and
1 EPA and U.S. Department of Energy (2006).
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• A statement describing the potential areas of overlap, if any, and steps to ensure that
emission reductions are surplus and that there is no double-counting.
Emission reductions associated with the EE/RE policies and programs may be relied upon to
satisfy the SIP Reasonably Available Control Technology and RFP requirements, as well as CAA
requirements for emissions standards.
SECTION F.5: ENFORCEABLE CRITERION
The jurisdiction's EE/RE policies and programs need to be mandatory, created either by specific
state legislation, commission order, or regulation. Under the CAA, states are required to have
enforcement authority for the policy or program. If a state submits a SIP that incorporates
EE/RE programs, the programs also become federally enforceable. Making state adopted EE/RE
programs federally enforceable puts them on par with more traditional air pollution control
programs for which states have sought SIP credit in the past. Once these policies and programs
become federally enforceable EPA has the authority under the CAA to apply CAA-mandated
penalties against the party responsible for noncompliance. Depending on the policy, the
responsible party would not be the agency administering the policy - typically a PUC. Instead,
the party may be the load serving entity responsible for delivering power to customers and
upon whom the duty to use EE/RE has been placed, for example, through a permit or the rate
setting process. For example, under a Renewable Portfolio Standard policy, a state could
require certain entities to purchase an amount of RE. If the state relies upon such requirements
within the SIP, then such measure could be enforceable against the entities required to
purchase the renewable electricity, even if those entities are not responsible for the operation
of the electricity generating units at which the emission reductions are expected to occur.
Additionally, if the reductions are enforceable against another party responsible for the EE or
RE activity, then they are considered enforceable if:
• The activity or measure is independently verifiable;
• Violations are defined;
• Those liable for violations can be identified;
• The activity or measure is practicably enforceable in accordance with EPA guidance on
practicable enforceability;2 and
• The state maintains the ability to apply penalties and secure appropriate corrective
actions where applicable.
From the standpoint of federal SIP enforceability, an agreement among state agencies is not
necessary for EPA to approve an EE/RE policy into a SIP as a control measure. However, it is
recommended to ensure adequate coordination and communication at the state level so that
expectations and responsibilities are clear. The EPA recommends a memorandum of
understanding between the state department of environmental protection (DEP) and the PUC
2 EPA (1989) and EPA (1992).
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or other state entity to ensure adequate program coordination. From EPA's standpoint, it does
not matter what part of state government implements the program - it could be the DEP or the
PUC - so long as the state agency in question has authority from the legislature to administer
the program. The governor (or its designee) would need to sign the SIP to give the proper state
agency authority in this situation where one state agency - typically a PUC - is administering
the EE/RE policy or program and the state DEP is responsible for developing the SIP.
SECTION F.6: PERMANENT CRITERION
The impacts of the EE/RE policy and/or program control strategy need to continue through the
future attainment year unless it is replaced by another control measure or the state
demonstrates in a SIP revision that the emission reductions from the EE/RE policy or program
are no longer needed to meet applicable statutory and regulatory requirements. The state,
tribal or local agency should demonstrate that the EE/RE policy was adopted in a state
regulation or enacted in statute.
To demonstrate permanence in the case of EE, the jurisdiction should ensure that the projected
emissions impacts of the EE policy and program are achieved by the attainment year. If the EE
policy or program is not fully implemented by the attainment year, then new programs should
be adopted to deliver the same results. One way to increase the likelihood that EE programs
will result in emissions reductions is to secure a commitment for continued support and funding
for the EE programs in the future.
SECTION F.7: SIP CREDIT IN A MULTI-STATE SCENARIO
Electricity continuously flows through the electric grid, as electricity providers produce power
to meet demand both within and across state boundaries. This dynamic raises the question of
how to apportion emission reduction SIP credit between states that buy and sell electricity from
each other. Historically, about half of the states (e.g., California, Virginia) import electricity to
meet electricity demand within the state, while about half of the states (e.g., New Mexico, New
Hampshire) export electricity to meet demand elsewhere.3 For a state to obtain "credit" for
emission reductions associated with these electricity transfers, a state would need to account
for these transfers as part of the analysis it conducts for estimating future ECU emissions. For
example, imports and exports of electricity across state lines are accounted for in dispatch and
capacity expansion models, such as IPM energy modeling that EPA provides to support
regulatory analysis.4 Estimates of future year ECU emissions made by states using other
techniques should also account for imports and exports of electricity across state lines.
For a state to obtain credit under the control strategy pathway for emission reductions that are
associated with these electricity transfers, the state should ensure that its estimate of reduced
3 For more information on state-level export/import data, go to: http://www.epa.gov/cleanenergv/energy-
resources/egrid/index.html.
4
Note that EPA's IPM modeling only includes "on the books" EE/RE policies and programs that have been adopted
in regulation, statute or commission order.
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future year ECU emissions includes the impact of these policies and programs as outlined
within the control strategy. Typically, Regional Planning Organizations model the air quality
impact of state control strategies across multiple states in a "control strategy" modeling run.
After the baseline modeling is constructed, states put forth the suite of strategies they intend
to adopt as part of the SIP to be modeled in the "control strategy" modeling run. Those control
strategies need to meet the provisions outlined per the four SIP control strategy criteria
discussed above. Ultimately, when EPA reviews the SIP it needs to determine whether or not
the suite of control strategies assumed in the multi-state SIP modeling were actually adopted
by the states in question, including EE/RE policies and programs.
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REFERENCES
EPA (1989). Guidance on Limiting Potential to Emit in New Source Permitting. June 13, 1989. Available
online at
EPA (1992). Use of Long Term Rolling Averages to Limit Potential to Emit. February 24, 1992. Available
online at
EPA and U.S. Department of Energy (2006). National Action Plan for Energy Efficiency. July 2006.
Available online at
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United States Office of Air Quality Planning and Standards Publication No. EPA-456/D-12-001g
Environmental Protection Outreach and Information Division July 2012
Agency Research Triangle Park, NC
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