&EPA
Roadmap for Incorporating Energy
Efficiency/Renewable Energy
Policies and Programs into State and Tribal
Implementation Plans
Appendix K: State, Tribal and Local Examples and
Opportunities
-------
EPA-456/D-12-001I
July 2012
Roadmap for Incorporating Energy Efficiency/Renewable Energy
Policies and Programs into State and Tribal Implementation Plans
Appendix K: State, Tribal and Local Examples and Opportunities
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
-------
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.
K-2
-------
Contents
FIGURES K-5
TABLES K-6
SECTION K.1-OVERVIEW K-7
SECTION K.2 - STATES THAT ADDRESSED ENERGY EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS IN
THEIR STATE IMPLEMENTATION PLANS FOR THE 1997 OZONE 8-HOUR NATIONAL AMBIENT AIR QUALITY
STANDARDS K-7
Background K-7
Summary K-7
State Examples K-8
Energy Efficiency/Renewable Energy as a Control Measure K-8
Energy Efficiency/Renewable Energy in a Voluntary Control Measure Bundle K-9
States Using Energy Efficiency/Renewable Energy in a Weight of Evidence Finding K-9
SECTION K.3: ENERGY EFFICIENCY/RENEWABLE ENERGY PROGRAM IMPLEMENTATION ON TRIBAL LANDS K-10
Department of Energy's Tribal Energy Program K-ll
EPA's Climate Showcase Communities Program K-ll
SECTION K.4: STATES THAT ARE CONSIDERING INCORPORATING ENERGY EFFICIENCY/RENEWABLE ENERGY
PROGRAMS AND POLICIES INTHEIRSTATE IMPLEMENTATION PLANS K-12
States Considering Incorporating Energy Efficiency/Renewable Energy in State Implementation Plan
Development K-12
Connecticut K-13
Background K-13
Initiate Collaboration among Key State Entities Responsible for Air and Energy Decisions K-13
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs to be Included in the
State Implementation Plan K-14
Understand the Pathways Available Under this Manual for Incorporating Energy Efficiency/Renewable Energy
Programs and Policies into State Implementation Plans K-14
Maryland K-15
Background K-15
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs to be Included in the
State Implementation Plan K-15
Understand the Pathways Available Under this Manual for Incorporating Energy Efficiency/Renewable Energy
Programs and Policies into State Implementation Plans K-15
New Mexico K-16
Background K-16
Initiate Collaboration among Key State Entities Responsible for Air and Energy Decisions K-16
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs to be Included in State
Implementation Plans K-17
Understand the Pathways Available Under this Manual For Incorporating Energy Efficiency/Renewable Energy
Programs and Policies into State Implementation Plans K-17
K-3
-------
SECTION K.5: EMERGING OPPORTUNITIES FOR INCORPORATING ENERGY EFFICIENCY/RENEWABLE ENERGY
POLICIES AND PROGRAMS IN STATE IMPLEMENTATION PLANS K-19
Massachusetts K-19
SECTION K.6: OTHER OPPORTUNITIES TO REDUCE ELECTRICITY CONSUMPTION AND NOX EMISSIONS K-20
Renewable Energy Certificates K-20
Hypothetical Example of Baseline Emissions Reduction Credit from a Local Purchase of Renewable Energy
Certificates K-21
Emissions Reduction Credit from use of Green Infrastructure to Meet Storm Water Mitigation Requirements K-25
EPA'S Storm Water Rules K-25
Hypothetical Example: Tree City Nonattainment Area K-26
ATTACHMENT A: CONNECTICUT'S ENERGY EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS K-29
Renewable Energy Policies and Programs K-29
Energy Efficiency Policies and Programs K-29
Letter from EPA Region 1 to Connecticut K-32
ATTACHMENT B: MARYLAND'S ENERGY EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS K-39
Em Power Maryland K-39
Renewable Portfolio Standards K-39
Regional Greenhouse Gas Initiative K-40
Maryland Clean Car Program K-41
ATTACHMENT C: NEW MEXICO'S ENERGY EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS K-42
REFERENCES K-44
K-4
-------
FIGURES
Figure 1: Steps for New Mexico Analysis K-18
Figure 2: How Connecticut Quantifies Energy Savings from Energy Efficiency, Average Program Example K-31
K-5
-------
TABLES
Table 1: Tribal Projects Funded by EPA's Climate Showcase Communities Program K-12
Table 2: Hypothetical Example for Albuquerque-Bernalillo County K-18
K-6
-------
SECTION K.1 - OVERVIEW
This appendix provides information on:
States that addressed energy efficiency/renewable energy (EE/RE) policies and
programs in their State Implementation Plans (SIPs) for the 1997 8-hour ozone National
Ambient Air Quality Standards (NAAQS)
States that are considering incorporating EE/RE programs and policies in their SIPs
Emerging opportunities for incorporating EE/RE policies and programs in SIPs
Tribal governments that have implemented EE/RE programs on tribal lands
Other opportunities to reduce electricity consumption and nitrogen oxides (NOX)
emissions thru Renewable Energy Certificates credits and storm water mitigation
requirements
Appendix D, among other things, provides key questions for government officials to consider
when evaluating whether it makes sense for state, tribal or local agencies to account for the
future impacts of EE/RE policies in a State Implementation Plan/Tribal Implementation
(SIP/TIP).
SECTION K.2 - STATES THAT ADDRESSED ENERGY
EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS IN THEIR
STATE IMPLEMENTATION PLANS FOR THE 1997 OZONE 8-HOUR
NATIONAL AMBIENT AIR QUALITY STANDARDS
Background
In the mid-2000s, some state air agencies began considering EE/RE policies and programs as
part of their SIPs, which were due in 2007 for the 1997 8-hour ozone NAAQS. Several states
took steps to factor their EE/RE policies and programs into their SIPs. These states established
multi-stakeholder working groups to analyze the emissions benefits of EE/RE policies and
programs, and to specify the policy mechanisms involved with this new approach. Key drivers
for these efforts included impending regulatory deadlines and significant financial assistance
provided under the Department of Energy's (DOE's) "Clean Energy/Air Quality Integration
Initiative." The initiative was active from 2005-2007 and provided assistance to six jurisdictions,
including the states of Illinois, Texas, Louisiana, New Jersey, and Connecticut, and the
Metropolitan Washington Council of Governments (MWCOG).
Summary
State experience with incorporating EE/RE policies and programs in SIPs was initially limited.
States found that analyzing the effects of EE/RE policies and programs on air quality was time
and resource intensive, and that the potential emissions benefits of EE/RE policies and
programs might not have justified the effort necessary to quantify that impact. Part of the
reason this may have been the lack of detailed enough EPA guidance.
K-7
-------
The EPA believes that accounting for the impacts of EE/RE policies and programs in SIPs/TIPs
continues to be an important part of SIP/TIP attainment strategies. In response to the early
concerns and experiences, EPA has produced this EE/RE SIP Roadmap Manual to provide the
"how to" for incorporating EE/RE policies and programs in SIPs and to address any
informational and resource barriers in the way of meeting that goal. The EPA also plans
concerted outreach and technical assistance to help state, tribal and local agencies through the
policy and analytical steps EPA recommends air agencies address as they consider accounting
for and incorporating EE/RE policies and programs in SIPs and TIPs. Finally, along with the
manual, EPA is providing online training on the electric energy sector and tools for quantifying
the emissions benefits of EE/RE strategies.
In terms of policy outcomes, the following jurisdictions did incorporate EE/RE policies and
programs in SIPs and were successful in including EE/RE policies and programs in their air
quality plans:
1. Washington, DC Region (via the MWCOG) -voluntary control measures in 1 hour and 8
hour ozone SIPs
2. Texas - control measure in Dallas, TX 8-hour ozone SIP
3. Shreveport, Louisiana -voluntary control measure in 8 hour ozone early-action compact
SIP revision
4. Connecticut - weight of evidence (WOE) in 8 hour ozone SIP
State Examples
This section highlights examples of states that have taken steps to include EE/RE policies and
programs in their SIPs. In all cases, the states took the following general approach to
quantifying the impacts of EE/RE policies and programs on air quality:
Determining the amount, type, and location of electric generation that would be
displaced by EE/RE measures being pursued in the jurisdiction
Estimating the annual and summer ozone season NOX emission rates from power plants
serving the state/region
Resolving policy barriers to incorporating reductions into state air quality plans
Energy Efficiency/Renewable Energy as a Control Measure
Texas: The Texas Commission on Environmental Quality sought credit for emissions reductions
of 0.72 tons per day (tpd) of NOX for energy-related measures in the 2005 Dallas-Fort Worth
(DFW) five percent Increment of Progress (IOP) SIP revision. (DFW was nonattainment for the
1997 8-hour ozone NAAQS.) It did so by citing Senate Bill (SB) 5 (77th Legislature) and SB 7
(76th Legislature) requirements. The SB 5 and SB 7 directed municipalities in ozone
nonattainment counties and in counties deemed near-nonattainment to reduce their electricity
consumption by 5 percent per year. The EPA approved in the SIP NOX emissions reductions of
0.72 tpd achieved by EE measures that occurred in the DFW nonattainment area. These
reductions were achieved through reduced demand for fossil-fuel generation at power plants,
as a result of EE measures implemented in new construction for single and multi-family
K-8
-------
residences in 2003. These measures were reported to the Texas State Energy Conservation
Office (SECO) under SB 5. The EPA approved the EE measures into the SIP on August 15, 2008
(73 FR 47835).
DFW, Texas SIP:
http://www.gpo.gov/fdsvs/pkg/FR-2008-08-15/pdf/E8-18835.pdf
Energy Efficiency/Renewable Energy in a Voluntary Control Measure Bundle
Washington, DC Region: In 2004, Montgomery County, Maryland led a multi-county buying
group to purchase wind power and undertook a first-of-its-kind analysis to estimate its effect
on air quality. The reductions were ultimately included in the Maryland SIP, which was
approved by EPA in 2005. Building on this success, Metropolitan Washington Council of
Governments (MWCOG) developed a regional air quality plan for the 1997 8-hour ozone
standard for the Washington, DC Region non-attainment area that also included EE/RE
provisions. This 2007 MWCOG air quality plan increased municipal RE purchases fourfold from
2004 to 2009 - with commitments to purchase 123 million kilowatt-hours (kWhs) of RE
certificates annually - and included the installation of LED traffic lights in place of conventional
incandescent lights. The plan was adopted by Virginia, Maryland and the District of Columbia
and the respective ozone SIPs were approved by the EPA regions in 2007.
DC Region 8 hour ozone SIP, see p. 126:
http://www.mwcog.org/uploads/pub-documents/9FhcXg20070525084306.pdf (html page with above link:
http://www.mwcog.org/environment/air/SIP/default.asp)
Shreveport, Louisiana: As part of its SIP revisions for the purpose of attaining and maintaining
the 8-hour ozone standard, the Louisiana Department of Environmental Quality submitted an
Early Action Compact SIP for the Shreveport area to EPA in 2004. The SIP included the emission
reductions expected to be achieved from installation of energy conserving equipment in City
buildings in Shreveport. The performance contract was estimated to have saved 9,121
megawatt-hours (mWhs) of electricity per year with NOX emission reductions of 0.041 tons per
ozone season-day. The city arrived at this figure after employing several different methods to
determine the emissions avoided through its programs. The EPA Region 6 published approval
of this SIP revision in August, 2005.
Shreveport Early Action Compact, see p. 3:
http://www.deq.louisiana.gov/portal/Portals/0/AirQualityAssessment/Planning/SIP/Progress%20Report%206-30-
04.pdf (html page with above link: http://www.deq.louisiana.gov/portal/Default.aspx?tabid=231l)
States Using Energy Efficiency/Renewable Energy in a Weight of Evidence Finding
Connecticut: The Connecticut Department of Environmental Protection (DEP) - a member of
the Ozone Transport Commission (OTC) - wanted to know if the EE programs managed by
Connecticut Light and Power and the United Illuminating Company could reduce electricity
consumption and NOX emissions on "high electricity demand days." The DEP worked with other
OTC states to analyze the mix of power plants used to meet peak demand and determined that
many had the highest emission rates in the region. The OTC team also found that peak load
K-9
-------
electricity demand on the hottest days was growing two to three times faster than base load
demand. With this information, Connecticut DEP established a team of technical experts to
analyze the effect that EE/RE projects - including high efficiency air conditioners, compact
fluorescent lighting, combined heat and power (CHP) and solar photovoltaic energy - were
having on NOX emissions at critical/peak times. The results were included as WOE in the 8-hour
ozone SIP and submitted to the EPA region in June 2007.
CT1997 8 hour ozone SIP, see page 31:
http://www.ct.gov/dep/lib/dep/air/regulations/proposed and reports/section 8.pdf (html
page with above link:
http://www.ct.gov/dep/cwp/view.asp?a=2684&q=385886&depNav GID=1619)
Texas: In an effort to reduce air pollutant emissions associated with energy use, in 2001, the
Texas State Legislature passed SB 5 to amend the Texas Health and Safety Code. The legislation
required changes in energy use within the state to help the state comply with federal Clean Air
Act (CAA) standards. It applied to all political subdivisions within counties recognized in Texas
as nonattainment areas and "near" nonattainment areas.
In 2007, the Texas Legislature passed SB 12, which, among other things, extended the timeline
set in SB 5 for emissions reductions. Where SB 5 required political subdivisions to reduce their
electrical consumption by five percent for five years beginning January 1, 2002, the SB 12
legislation required that such entities establish a goal to make the five percent reductions each
year for six years, effective September 1, 2007. SB 12 amended the Health and Safety Code
Section 388.005, in part, by requiring affected political subdivisions to:
Implement all cost-effective energy-efficiency measures
Establish a goal to reduce electricity consumption by 5 percent each year for 6 years
Report efforts and progress annually to the Texas SECO
In 2011, the Texas Legislature passed SB 898, extending the SB 5/SB 12 provisions for 10
additional years, through 2021. The current number of counties covered is 41 and includes
institutes of higher education and state agency facilities, as well as political subdivisions.
Dallas/Ft. Worth, Texas SIP:
http://www.gpo.gov/fdsvs/pkg/FR-2008-08-15/pdf/E8-18835.pdf
SECTION K.3: ENERGY EFFICIENCY/RENEWABLE ENERGY PROGRAM
IMPLEMENTATION ON TRIBAL LANDS
The EPA provides capacity building support to tribal governments to implement the CAA in
Indian country. Tribes have made tremendous progress over the last several years. Tribal
K-10
-------
governments continue to develop and refine air quality management programs.1 In addition,
tribal governments have implemented EE/RE programs in Indian country and could explore the
opportunity to capture the criteria air pollutant and air quality benefits of these policies and
programs.
Department of Energy's Tribal Energy Program
Since 2002, DOE's Tribal Energy Program2 has invested more than $30 million in 129 tribal
energy projects across the country (2002-2010). These tribal projects reflect a diversity of
technologies and geographic distributions that address the following areas:
Planning and training
Wind power
Biomass
EE of buildings
Hydro power
Geothermal
Solar
EPA's Climate Showcase Communities Program
In 2009 and 2010, EPA awarded $20 million in competitive grants to help tribal and local
governments establish and implement climate change initiatives. The overall goal of the
Climate Showcase Communities program3 is to create replicable models of cost-effective and
persistent greenhouse gas (GHG) reductions that will catalyze broader local and tribal
government actions to stabilize the climate and improve environmental, economic, health, and
social conditions. While the focus is on reducing GHG emissions through innovative strategies,
implementing EE/RE projects avoids or displaces fossil fuel-fired generation that could also
result in reductions of criteria pollutants.
Forty-nine communities received grants under the program, including six tribal governments.
The tribal funded projects that include EE/RE projects are listed in Table I.4
1 The 1990 CAA Amendments provide 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. As the TAR makes clear, 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 under the CAA.
2 For more information, go to: http://appsl.eere.energy.gov/tribalenergy/.
3 For more information, go to: http://www.epa.gov/statelocalclimate/local/showcase/.
4 For more information, go to: http://www.epa.gov/statelocalclimate/local/showcase/index.html.
K-ll
-------
Table 1: Tribal Projects Funded by EPA's Climate Showcase Communities Program
Project Title Govt. Name State Project Type
Santa Ynez Chumash
Community Energy Project
Healthy Energy Living Project
COOL CAP
Galena Greenhouse Project
Reduction of GHGs Through
Innovative Climate Projects
Efficiency and GHG Reduction
on the Northern Cheyenne
Tribe Reservation
Santa Ynez Band of
Chumash Indians
Choctaw Nation of
Oklahoma
Confederated
Tribes of Siletz
Indians
Tanana Chiefs
Conference
Gila River Indian
Community
Northern
Cheyenne Tribe
CA
OK
OR
AK
AZ
MT
EE retrofits and installations
Efficiency-commercial
RE
CHP
RE and green building projects
Efficiency-public buildings
SECTION K.4: STATES THAT ARE CONSIDERING INCORPORATING
ENERGY EFFICIENCY/RENEWABLE ENERGY PROGRAMS AND POLICIES IN
THEIR STATE IMPLEMENTATION PLANS
States Considering Incorporating Energy Efficiency/Renewable Energy in
State Implementation Plan Development
While there may be others, EPA is aware of at least three states that have explored
opportunities for incorporating EE/RE into future ozone SIPs that are featured in this appendix:
Connecticut
Maryland
New Mexico
States at the early stages of the SIP process will need to consider at least three activities that
include:
Initiating collaboration among key state entities responsible for air and energy decisions
Understanding and identifying EE/RE policies and programs to be included in the SIP, as
well as estimating the magnitude of potential air emissions benefits
Understanding the pathways available under this manual for incorporating EE/RE
programs and policies into SIPs
K-12
-------
Connecticut
Connecticut's experience is used in this section to illustrate one state's approach to addressing
these steps. Background information is provided in Attachment A on the state's EE/RE policies
and programs. Other states can use this experience to inform their own efforts to incorporate
EE/RE into SIPs.
Background
In 2010 the then Connecticut Department of Environmental Protection (CTDEP)5 expressed an
interest to EPA New England in exploring the use of emission reductions associated with the
state's EE and RE programs in their air quality planning documents, such as the SIP for air
quality, in the same manner as emission reductions from more traditional air pollution control
regulations might be used. As noted earlier in this document, Connecticut cited emission
reductions from these programs within its WOE submittal made within its attainment
demonstration for EPA's 1997 8-hour ozone standard. Given the demonstrated ability of EE
and RE programs towards meeting air quality goals, CTDEP intends to rely more heavily on the
benefits of these programs in future attainment demonstrations, such that the impact from the
state's EE/RE programs will be directly factored into the future year modeling effort.
Initiate Collaboration among Key State Entities Responsible for Air and Energy
Decisions
To help ensure that the appropriate state entities are involved in joint air and energy decisions,
Connecticut has taken concrete actions to foster collaboration across agencies. These
partnerships assist in addressing the complex policy and analytic questions that cut across
traditional agency responsibilities for improving air quality and expanding the use of EE/RE
policies and programs. Examples of such questions include:
How to identify the appropriate SIP pathway?
What method to use to estimate the energy impacts from EE/RE?
How to quantify the resulting air quality improvement?
Over the past several years, the CTDEP has established formal lines of communication with the
Connecticut Department of Public Utility Control (CTDPUC). For example, the CTDEP is a
member of the state's Energy Conservation Management Board (ECMB), the Clean Energy
Fund, and the Connecticut Energy Advisory Board. These ties are important, because the
CTDPUC is primarily responsible for oversight of Connecticut's EE and RE programs, including
implementation, monitoring and enforcement. Each of these programs is discussed separately
below. In addition, the state continues to engage with EPA on the key state-federal issues that
will arise if Connecticut formally moves ahead to incorporate EE/RE into its SIP.
5 The CTDEP was replaced in 2011 with the Connecticut Department of Energy and Environmental Protection
(DEEP) that is charged with conserving, improving and protect the natural resources and the environment of the
Connecticut as well as making cheaper, cleaner and more reliable energy available for the people and businesses
of the state. DEEP was established with the consolidation of the CTDEP, the Department of Public Utility Control,
and energy policy staff from other areas of state government. For more information, go to:
http://www.ct.gov/dep/cwp/view.asp?a=2690&q=322476&depNav GID=1511.
K-13
-------
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs
to be Included in the State Implementation Plan
Connecticut has several existing laws requiring electric utilities to meet minimum percentages
of the state's energy needs with zero-emissions EE and RE. On the RE side, a "renewable
portfolio standard" (RPS) policy requires that electricity distribution companies (Connecticut
Light and Power Company and United Illuminating Company) obtain a minimum percentage of
their retail load from RE; an EE target also applies. The policy became law in 2005 with a
minimum requirement of 4.5 percent in that year, increasing to 27 percent of the state's retail
electricity load by 2020. To ensure compliance, CTDPUC conducts compliance evaluations of
the RPS each year through an administrative docket process. It imposes fines or other
corrective actions if compliance is not shown.
On the efficiency side, Connecticut has over twenty years of experience with EE programs.
There is an efficiency component to the RPS with set targets for Class III resources (4 percent of
retail load) which includes the following efficiency measures - customer-sited CHP systems with
an efficiency of 50 percent or greater, electricity savings from conservation and load
management programs, and systems that recover waste heat or pressure from commercial and
industrial processes. Most funding for EE comes from the Connecticut Energy Efficiency Fund
(CEEF). This CEEF is capitalized by a surcharge of $0.003 per kWh (3 mills per kWh) on utility
customers' electric bills. Each of the two utilities administers and implements efficiency
programs with monies from its ratepayer fund, in accordance with a comprehensive plan
approved by the CTDPUC. Additional sources of funding for the CEEF in 2009 included the
Regional Greenhouse Gas Initiative (RGGI), the Forward Capacity Market (FCM), Class III
Renewable Credits, and the American Recovery and Reinvestment Act (ARRA). To ensure that
all of these program monies are spent in accordance with CT energy efficiency goals and that
the savings impacts are "real," the CTDPUC conducts an annual review and evaluation of the EE
programs implemented by the state's electricity suppliers.
Understand the Pathways Available Under this Manual for Incorporating Energy
Efficiency/Renewable Energy Programs and Policies into State Implementation
Plans
Connecticut's past experience using clean energy in an air-planning context (via its attainment
demonstration for EPA's 1997 8-hour ozone standard) provides a head start in defining and
addressing important analytic and policy challenges. To address current air quality challenges,
CTDEP and its partners are now working to identify the state's options for:
Including EE/RE policies and programs in future attainment demonstrations
Factoring the impact of EE/RE programs directly into future year modeling efforts
Adopting EE/RE in the SIP as a control measure.
As the state proceeds, examples of key issues that the Connecticut will need to address should
it pursue the control strategy pathway are included in the EPA, Region 1 letter to the state
(Attachment B). These issues include what energy-impacts data to use, how to gauge the
impact that EE programs have during high electricity demand days (days typically correlated
K-14
-------
with high ozone episodes), and how to calculate air quality impacts at the appropriate level of
detail. This letter outlines the state's strategy moving forward and raises several outstanding
questions for the state to answer. While uncertainties remain, Connecticut's letter can be used
to inform the work of other states and jurisdictions interested in taking a similar approach.
Maryland
Background
Under 2008 revised ozone standard, parts of Maryland have been designated nonattainment,6
which will pose challenges as the state seeks additional reductions in ozone precursors from
different sectors, potentially including the electric sector. In addition, Maryland also recently
adopted legislation that requires the state to develop a climate action plan to reduce GHG
emissions 25 percent by the year 2020. Coordinated multi-pollutant planning and the
implementation of synergistic strategies will be necessary to successfully meet these two
challenges.
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs
to be Included in the State Implementation Plan
Maryland currently has several pieces of legislation intended to provide a substantial start
toward these goals (see Attachment B for a greater description):
The Healthy Air Act which required coal-fired power plants in Maryland to reduce NOX
by 75 percent, sulfur dioxide (S02) by 85 percent, and mercury by 90 percent, and
Participation in the RGGI to reduce C02 emissions.
The EmPOWER Maryland Energy Efficiency Act of 2008 is designed to reduce per capita
electricity use by Maryland consumers by 15 percent in 2015.
The accelerated RPS standard 20 percent of electricity from renewable resources by
2022.
Understand the Pathways Available Under this Manual for Incorporating Energy
Efficiency/Renewable Energy Programs and Policies into State Implementation
Plans
Maryland anticipates that a WOE demonstration will be necessary to meet the 2008 8-hour
ozone NAAQS in the next round of ozone SIPs to supplement conventional photochemical
modeling. At this time, Maryland believes that emission reductions for EE may be a key
element needed to show attainment.
To separate the emission reductions that should be attributed to EE policies/programs
compared to programs that control emissions through specific emissions caps, Maryland has
contracted with NESCAUM to run an integrated framework of models. The NE-MARKAL (New
England MARKet Allocation model), initiative, which began through a collaboration between
NESCAUM and the EPA Office of Research and Development in 2003, has resulted in the
development of a least-cost optimized linear programming model which is tailored specifically
6 For more information, go to: http://www.epa.gov/ozonedesignations/2008standards/index.htm.
K-15
-------
to the energy infrastructure of several Northeast states.7 NE-MARKAL is a data-rich analytical
framework for examining energy policy options and their resultant impact on energy services in
the region. The model serves as the centerpiece of the integrated policy analysis framework
developed at the Northeast States for Coordinated Air Use Management (NESCAUM) which aids
in developing a comprehensive understanding of technology, economic, environmental and
public health consequences of air quality protection initiatives.
Working with NESCAUM, Maryland has completed Phase I which has included:
A Maryland specific calibration of the NE-MARKAL model
An independent assessment for the impacts of RGGI and Maryland Clean Cars
This type of scenario analysis serves to identify the magnitude of climate, air quality and energy
impacts relative to the other strategies under examination.
In Phase II, Maryland proposes to identify interactions between the strategies that may lead to
climate, air quality and energy outcomes that differ from an analysis that examines only one
strategy at a time.
New Mexico
Background
In 2010, the New Mexico Environment Department and the City of Albuquerque expressed an
early interest in possibly incorporating New Mexico's EE/RE policies and programs into a
potential, future SIP for a future revised ozone NAAQS. Currently, there are no ozone
nonattainment areas in New Mexico and none are immediately anticipated. However, elevated
ozone levels have been experienced in the state in the past.
The EPA held preliminary meetings with the state to help EPA and state air staff and managers
both better understand and identify New Mexico's EE/RE policies and programs and estimate
the magnitude of potential air emissions benefits from those policies and programs. The state
and EPA also discussed the need for interaction between state air staff and state energy
officials. The EPA has explored with the state the pathways available for incorporating EE/RE
programs and policies and programs into SIPs.
Initiate Collaboration among Key State Entities Responsible for Air and Energy
Decisions
New Mexico is a state with a very predominant urban area (Albuquerque-Bernalillo County),
with which cooperation is very important, especially since, for New Mexico, the City of
Albuquerque-Bernalillo County is responsible for its own SIP revision. The state and
Albuquerque-Bernalillo may choose to act together in any ozone SIP technical analyses, so that
the entire state can be analyzed as one for purposes of electric sector EE/RE policies and
For more information, go to: http://www.nescaum.org/topics/ne-markal-model.
K-16
-------
programs. With Albuquerque-Bernalillo constituting such a large percentage of the state's total
population, this cooperative treatment might benefit both entities.
Understand and Identify Energy Efficiency/Renewable Energy Policies and Programs
to be Included in State Implementation Plans
New Mexico has three primary EE/RE policies:
The Renewable Energy Act requires investor-owned electric utilities to produce or buy
increasing amounts of RE, which started at 5 percent in 2006, is 10 percent by 2011, and
increases to 20 percent by 2020.
The Efficient Use of Energy Act requires that public utilities, distribution cooperative
utilities and municipal utilities include cost-effective EE and load management
investments in their energy resource portfolios. In 2008, the statute was amended to
include a State Energy Efficiency Resource Standard (EERS) in which public utilities must
acquire all cost-effective and achievable EE and load management resources available in
their service territories.
The Energy Efficiency and Renewable Energy Bonding Act authorizes up to $20 million in
bonds to finance EE and RE improvements in state government and school buildings.
Attachment C provides more detail on New Mexico's EE/RE policies.
Understand the Pathways Available Under this Manual For Incorporating Energy
Efficiency/Renewable Energy Programs and Policies into State Implementation
Plans
With respect to potential EE/RE SIP demonstrations for a state such as New Mexico, it is unclear
what the state and Albuquerque would choose to do with regard to electric sector EE/RE
policies and programs in any future, potential ozone SIP revision. Below are two control
measure examples that could apply to a state like New Mexico. It should be noted that no New
Mexico counties are currently designated ozone nonattainment, so these examples are
provided for illustrative purposes only. The first example is a general control measure
approach. Figure 1 conceptually illustrates the steps that would apply generically, while Table 2
provides an example for Albuquerque-Bernalillo.
K-17
-------
Figure 1: Steps for New Mexico Analysis
Identify each enforceable control
measure causing electric sector
EE/RE kwh reductions forthe
attainment year (1)
Calculate the NOx emissions
reduction for each power control
area/EGU for each NAA due to
each control measure (3)
For each such control
measure and NAA,
apportion the kWh
reductions geographically
across the State to
specific power control
areas or EGUs (2)
For each NAA, input the NOx
emissions reduction for each
control measure into the
photochemical model and
calculate the ambient ozone
improvement in the future
attainment year
Determine which power
control areas or EGUs will
be included in the
attainment demonstration
for each NAA
The second example in Table 2 illustrates a more specific, hypothetical accounting of EE/RE NOX
reductions for Albuquerque-Bernalillo County alone. In this example, four separate EE/RE
measures are quantified to determine their impacts on reducing NOX emissions in the state and
ultimately ambient ozone in the nonattainment area. Some of these measures are ones
adopted by New Mexico and highlighted in Attachment Cto this appendix. Not all of these NOX
emissions reductions would occur within Albuquerque-Bernalillo County. Also note in this
example it is assumed that seven EGUs are impacted by these various measures, but NOX
emissions from only EGUs 1-5 are determined to impact ozone levels in Albuquerque-Bernalillo.
Table 2: Hypothetical Example for Albuquerque-Bernalillo County
EE/RE Measure
LED retrofits for traffic lights (in
NAA)
Resulting Electricity Reductions
1 million kWh
NOX Reduction at PCA/EGU
(tons/ozone season day)
ECU 1:0.1, ECU 2: 0.2, ECU 3:
0.05
State Renewable Energy
Production Tax Credit
(Corporate) (in NAA)
2 million kWh
ECU 1:0.2, ECU 2: 0.05, EGUS:
0.2, ECU 4: 0.3
8 In concert with the State, EE/RE control measures can include not only those that actually occur in Albuquerque-
Bernalillo but also those that occur in outlying areas but that cause a reduction in emissions from EGUs that impact
Albuquerque-Bernalillo.
9 In this example only EGUs 1-5 affect ozone concentrations in the Albuquerque-Bernalillo NAA. Therefore,
emissions reductions from only EGUs 1-5 would be input into the photochemical model to assess the ambient
ozone reductions due to the electric sector EE/RE measures.
K-18
-------
EE/RE Measure
Sustainable Building Tax Credit
(in NAA)
Resulting Electricity Reductions
1 million kWh
NOX Reduction at PCA/EGU
(tons/ozone season day)
ECU 2: 0.05, ECU 4: 0.25
State Renewable Energy
Production Tax Credit
(Corporate) in County A (outside
NAA)
10 million kWh
ECU 4:2.0, ECU 5:1.0, ECU 6: 2.0,
ECU 7:1.5
SECTION K.5: EMERGING OPPORTUNITIES FOR INCORPORATING
ENERGY EFFICIENCY/RENEWABLE ENERGY POLICIES AND PROGRAMS IN
STATE IMPLEMENTATION PLANS
Massachusetts
Massachusetts has several programs in the state that provide incentives for CHP and other
technologies. Emissions benefits stemming from these policies could potentially be accounted
for in future SIPs.
Massachusetts recently established several policies designed to promote CHP and other EE
technologies. In 2008, Massachusetts passed the Green Communities Act10 which outlined a
collection of incentive programs. One of the programs called out in the Green Communities Act
is an Alternative Energy Portfolio Standard (AEPS), which requires that 5 percent of the state's
electric load come from "alternative energy" by 2020. The emissions benefits resulting from
these policies could potentially be accounted for in SIPs.
This program functions through a certificate trading program similar to the state's RPS. CHP
systems, flywheel storage, coal gasification, and efficient steam technologies qualify if the
project began operation in 2008 or later. However, it is anticipated that CHP will represent a
significant portion of this portfolio Eligible projects receive alternative energy certificates (AECs)
which were valued around $18 per certificate in early 2011. Under the APS, CHP certificates are
measured in megawatts based upon a performance-based formula that rewards efficient
production of electricity and use of thermal energy. Compliance for the standard started in
2009, and during the first year of the program, CHP systems accounted for 99 percent of the
compliance obligation. Funding for this program comes from the electric load serving entities
who must comply with the standard by purchasing the AECs.
The Green Communities Act also directs Massachusetts utilities to purchase all energy
efficiency that is cost effective, including CHP as an eligible efficiency measure for both gas and
electric programs. Under this program, now offered exclusively through the electric utilities
(because CHP results in reduced kWh and increased gas on-site), CHP systems that pass a cost-
For more information, go to:
http://www.mass.gov/?pagelD=eoeeasubtopic&L=3&LO=Home&Ll=Energy%2C+Utilities+%26+Clean+Technologie
s&L2=Green+Communities&sid=Eoeea.
K-19
-------
effectiveness test are eligible for a payment. Eligible projects must be located in territories of
the Investor Owned Utilities. The payment structure is as follows: $250/kW for feasibility study
and an upfront rebate of up to $750/kW for installation. Funding for the EE/CHP program
comes from the efficiency charge on customer bills.
SECTION K.6: OTHER OPPORTUNITIES TO REDUCE ELECTRICITY
CONSUMPTION AND NOX EMISSIONS
Renewable Energy Certificates
A renewable energy certificates or REC (pronounced: rek) represents the property rights to the
environmental, social, and other non-power related qualities of renewable electricity
generation. A REC, and its associated attributes and benefits, can be sold separately from the
underlying physical electricity associated with a renewable-based generation source.
RECs provide buyers flexibility:
In procuring green power across a diverse geographical area.
In applying the renewable attributes to the electricity use at a facility of choice.
This flexibility allows organizations to support RE development and protect the environment
when green power products are not locally available.
All grid-tied renewable-based electricity generators produce two distinct products:
Physical electricity
RECs
At the point of generation, both product components can be sold together or separately, as a
bundled or unbundled product. In either case, the renewable generator feeds the physical
electricity onto the electricity grid, where it mixes with electricity from other generation
sources. Since electrons from all generation sources are indistinguishable, it is impossible to
track the physical electrons from a specific point of generation to a specific point of use.
As renewable generators produce electricity, they create one REC for every 1,000 kWhs (or 1
mWh) of electricity placed on the grid. If the physical electricity and the associated RECs are
sold to separate buyers, the electricity is no longer considered "renewable" or "green." The
REC product is what conveys the attributes and benefits of the renewable electricity, not the
electricity itself.
RECs allow the end-user to exclusively claim or account for the associated attributes of
renewable-based generation. The REC and the associated underlying physical electricity may
take separate pathways to the point of end use. As renewable generators produce low-
emission electricity, they also impact the need for fossil fuel-based generation sources to meet
K-20
-------
consumer demand. The following are the inherent primary attributes that a REC can convey to
an owner:
Renewable fuel source
Emissions of the renewable generation
Geographic location of the generator
Vintage of the generator
Eligibility for certification or RPS
Here are the derived attributes that a REC can convey to an owner:
Avoided emissions
Eligibility for emission reduction credits or offsets
Price stability
RECs and the attributes they represent are an ingredient of all green power products. REC
providersincluding utilities, REC marketers, and other third-party entitiesmay sell RECs
alone or sell them bundled with electricity. As of 2007, more than 50 percent of utility
customers have access to green power bundled products, whereas all customers have access to
buying renewable energy certificates.11
Hypothetical Example of Baseline Emissions Reduction Credit from a Local
Purchase of Renewable Energy Certificates
Many local communities purchase RECs to operate their municipal operations with "green
power." In many instances, these communities are in or near existing EPA nonattainment areas
and are purchasing a very significant quantity.12
RECs are an important additional incentive for RE facilities, often necessary to turn an
uneconomical project into a viable one. For project developers, RECs represent an additional
revenue source: a wind farm, for instance, will produce two saleable productselectrons and
RECs. This added revenue helps developers recover costs, pay off debt, and reduce project risk.
Increased demand for RECs will help developers to pay for new projects, which influences the
mix of resources used to generate electricity. Purchasing RECs through long-term contracts is
even more desirable for project developers because such contracts further reduce risk and
uncertainty.
Generally speaking, new renewable electricity facilities deliver electricity that affects the order
in which existing facilities generate electricity for the grid and the future plans for fossil-fueled
generators. As a result of bringing new renewable electricity facilities online, the electricity
sector emits fewer tons of emissions than it would have if these RE sources had not been
For more information on green power suppliers, use EPA's Green Power Locator tool:
http://www.epa.gov/greenpower/pubs/gplocator.htm.
12 For more information, go to: http://www.epa.gov/greenpower/toplists/top20localgov.htm.
K-21
-------
operating or built. Thus, any NOX reductions from EGUs in or near these nonattainment areas
due to REC purchases could potentially reduce the area's ambient air pollution and be
incorporated in the SIP.
While there is potential for reductions and being able to incorporate those reductions in the
SIP, it should be noted that, in some cases, there can be a fundamental complication in
assessing whether such purchases actually reduce demand from EGUs in or near the
nonattainment areas. Unlike direct powering of municipal operations with dedicated, on-site
RE, RECs may be purchased by communities from RE facilities anywhere in the U.S. If a
community is in a grid Independent System Operator (ISO) that has restrictions on power
exchanges with other ISOs (an extreme example of which may be the ERGOT grid in Texas), then
REC purchases outside the home grid ISOs may not result in power demand reductions at EGUs
within those home grid ISOs. Similarly, even without such a formal restriction, if the purchasing
city's Power Control Area (PCA) within its grid ISO does not historically conduct power transfers
between itself and the PCA/ISO home where the RE is produced for the RECs, then it is unlikely
the RECs purchase actually decreases energy demand (hence air emissions) from the EGUs near
the city. Communities should check with their grid ISOs, PUCs, and/or State Energy Offices to
determine if either a formal or operational restrictions like these may apply.
In attempting to determine the degree of benefit to the SIP, it is necessary to apportion the
reductions in demand for fossil fuel fired power geographically due to REC purchases by ECU
based on the emissions reduction technique you have employed. As cited in previous examples
in this manual, the grid ISO may be able to assist the community in determining the
proportional ECU contribution or other state agencies such as PUCs and Energy Offices may be
able to help; EPA may also be able to suggest estimation techniques.
Another issue is, if a community wants baseline emissions reduction credit for its RECs
purchase, many states may question the purchase's enforceability. After all, a community's
purchase may be limited in duration and subject to reversal by a vote of the city council, for
instance. If a state is uncomfortable and unwilling in guaranteeing reductions from such
purchases itself, then either the community may be compelled to offer something enforceable
as a back-up to the REC purchase or the state may refuse to consider the purchase in the SIP.
The following is a hypothetical scenario in which a community purchases RECs to earn SIP credit
via the baseline emissions scenario:
Tree City is a non-attainment area for ozone, with a required attainment date eight
years from now. Sizable NOX reductions will likely be needed for Tree City to attain the
ozone NAAQS by the attainment date. It is estimated that mobile sources constitute
approximately 2/3 of the NOX inventory in Tree City's nonattainment area.
As part of an overall sustainability initiative, Tree City's Council is considering signing a
one-year contract to purchase RECs for wind power from a wind farm within its home
grid ISO, in an adjoining PCA. The two PCAs conduct regular and frequent power
K-22
-------
transfers. Tree City currently contracts with an investor-owned utility to purchase grid
power it needs for City operations. The RECs purchase would amount to 50 percent of
the annual kwh required by the City, or approximately 300 million kwh.
The City Council wants to condition continuing its RECs contract on the state agreeing to
seek NOX SIP credit for the purchase, which would benefit the Tree City nonattainment
area as the state prepares and submits to EPA its ozone SIP revision.
Tree City's Environment Office staff work with the state DEQ, following these steps:
Step 1: Identify the control measure:
RECs purchase for 300 million kWh per year
Step 2: Work with the home grid ISO, PUC, State Energy Office to determine if a RECs
purchase may cause real energy demand reduction at ISO EGUs:
Tree City and the state DEQ learn that the RECs would be purchased for power
produced at a wind farm within the home grid ISO, approximately 200 miles from
Tree City. The ISO confirms that such a purchase would have the effect of reducing
energy demand on the grid and in Tree City's PCA.
Step 3: Apportion the grid kWh purchased by Tree City by ECU:
Tree City and the state DEQ glean historical dispatch modeling results from the
home grid ISO. These results show that seven separate conventional (i.e., fossil-
fired) EGUs in the ISO supply the Tree City with electrical power, in the following
kwh proportion:
Plant 1: 30 percent
Plant 2: 20 percent
PlantS: 20 percent
Plant 4: 10 percent
PlantS: 10 percent
Plant 6: 5 percent
Plant 7: 5 percent
Step 4: Determine which EGUs will be included in the nonattainment analysis for
Tree City:
Distance and direction from Tree City may eliminate some of these EGUs from
having any significant impact potential on the Tree City nonattainment area. In this
case, the state DEQ decides that only Plants 1-4 will have any meaningful potential
to impact Tree City; Plants 5-7 are located over 300 miles away and in a direction
K-23
-------
where winds during the ozone season blow rarely and with a very low correlation to
higher ozone days.
Step 5: Quantify the current NOX emissions from Tree City's purchase of 300 million
kWh of grid power at the relevant EGUs:
State DEQ supplies the average ozone season values of NOX emissions from Plants 1-
4 above (in Ibs NOX /mWh); these emissions rates and total emissions due to Tree
City's energy demand are:
Plant 1: 8.0 Ib/MWh 360 tons NOX
(i.e., total emissions = 30 percent x 300 million kWh x 8.0 Ib/MWh)
Plant 2: 7.0 Ib/MWh 210 tons NOX
(i.e., total emissions = 20 percent x 300 million kw kWh h x 7.0 Ib/MWh)
Plants: 7.0 Ib/MWh 210 tons NOX
Plant 4: 6.0 Ib/MWh 90tonsNOx
(i.e., total emissions = 10 percent x 300 million kWh x 6.0 Ib/MWh)
Step 6: Seek state concurrence as to whether these reductions would be significant
at the projected attainment year
Even though the state DEQ estimates NOX emissions rates at Plants 1-4 will decrease
to 50 percent of current values by the attainment date in eight years (hence the
estimated NOX reductions due to the RECs purchase would only be 50 percent of the
estimated values above), the state DEQ agrees that the NOX reductions at Plants 1-4
due to Tree City's proposed RECs purchase would still be significant at the projected
attainment year. The state DEQ intends to perform ozone air modeling to
determine the NOX reductions needed overall for Tree City to attain the ozone
NAAQS by the attainment date. This will include quantification of NOX emissions
reductions necessary at Plants 1-4. The NOX reductions for the attainment year at
each plant due to the RECs purchases will be subtracted from the required, total
attainment year NOX reductions at each of these four plants as determined by
modeling. Thus, the RECs purchase will cause a reduction in the emissions baselines
for Plants 1-4 at the attainment year (as well as in earlier years when the RECs
purchase is in effect).
Step 7: Determine whether the City and the state can agree upon an enforceable
mechanism so that the RECs purchase can continue to be counted as a NOX
reduction measure in the SIP through and beyond the attainment date
K-24
-------
Maintenance of ozone NAAQS attainment at Tree City requires a continuation of the
magnitude of NOX reductions that the RECs purchase creates. So, this is potentially a
long-term commitment on the part of the Tree City.
Nevertheless, the state and the City reach a formal, enforceable agreement that
binds the City to purchasing RECs through the attainment year. The City may elect
to substitute another strategy that reduces an equivalent ambient ozone amount,
but the ambient ozone impact of this other strategy must be confirmed via modeling
by the state and approved by EPA in a separate SIP revision. Similarly, for
maintenance purposes, the City may elect to substitute another strategy subject to
the same conditions as above. Failure of the City to abide by this formal agreement
with the state would result in a penalty payable by the City to the state which would
be sufficient for the state to acquire the NOX reductions by other means.
Emissions Reduction Credit from use of Green Infrastructure to Meet Storm
Water Mitigation Requirements
EPA'S Storm Water Rules
The EPA's Office of Water (OW) is issuing new storm water mitigation regulations. Compliance
measures for these new regulations are expected to rely heavily on best practices for "green
infrastructure," a series of actions and technologies that encourage natural processes to
accommodate and minimize storm water runoff (see examples below). These kinds of measures
can directly result in reducing electricity consumption and NOX emissions in the following ways:
Reduce municipal electricity demand
due to less frequent pumping, (easiest
to quantify and attribute to NOX
emission reductions);
Obviating construction of
conventional, artificial storm water
channeling, processing, and controlled
discharge systems;
Reduction in electricity demand for
cooling in buildings near green
infrastructure-implementation areas;
and
Reduction in photochemical
generation potential due to cooling of
urban core.
Green Infrastructure Measure
Examples
Increasing vegetated surfaces in developed
areas
Swales
Water gardens
Holding ponds
Permeable pavements
Green roofs
A recent report for the Philadelphia metropolitan area is an excellent resource that can help
locals and states interested in pursuing NOX SIP reductions in this way.
13
Stratus Consulting (2009).
K-25
-------
Hypothetical Example: Tree City Nonattainment Area
The Tree City, a leader in sustainable practices and a current ozone nonattainment area with its
attainment date in eight years, sees alignment among overall sustainability/livability measures
it has adopted locally, mitigation actions to meet the ozone NAAQS, and actions that can aid
the City in meeting EPA's new storm water regulations, expected in 2012. These actions include
the following:
Recently funded, livability initiatives to convert 50 percent of the public conventionally
paved areas to vegetation; cool permeable pavements or trees within the next 25 years
To further encourage NOX emissions reductions from power plants, another program
with the local investor-owned utility to incentivize strategic tree-planting around
businesses and residences in order to reduce energy demand in the summer cooling
season
A recently passed City ordinance, requiring all commercial buildings and property within
10 years to establish green roofs and rainwater harvesting or storm water best
management practices for intercepted precipitation.
To comply with EPA's proposed storm water regulations, redesign of the City's
conventional public storm water management infrastructure to create water gardens,
swales, and holding ponds (to be effected within the next eight years and intended to
result in minimal need to artificially manage storm water runoff)
The City and state DEQ staff estimate the following kWh reductions from the above measures:
Items in (a), (b), and (c) will prompt a 50 percent reduction in City water pumping
requirements, resulting in a savings of 250 million kWh annually within 25 years and 150
million kWh annually within eight years
Within eight years, items in (a) and (b) will prompt a 150 million kWh reduction in
energy demand in commercial buildings and residences from cooling requirements in
the summer season; this reduction will amount to 250 million kWh within 25 years
In order to assess the extent to which the above measures can be incorporated into the future
ozone SIP revision, Tree City staff work closely with the state DEQ in the following steps (see
"Hypothetical example of baseline emissions reduction credit from a local purchase of
Renewable Energy Certificates (RECs)," above, for more explanation):
Step 1: Identify the control measures:
150 million kWh reduction in energy demand due to cutback in need for city water
pumping
150 million kWh reduction in energy demand from summer season cooling
requirements, due to green roofs, tree planting, enhanced vegetation, and cool
permeable pavements
Total: 300 million kWh by the attainment date
K-26
-------
Step 2: Work with the home grid ISO, PUC, State Energy Office to determine if these
measures will cause real energy demand reduction at ISO EGUs:
Yes, these are on-site reductions in Tree City directly traceable to reductions at EGUs
in the home grid ISO.
Step 3: Apportion the grid kWh purchased by Tree City by ECU (See "Hypothetical
example of baseline emissions reduction credit from a local purchase of Renewable
Energy Certificates (RECs)," Step 3)
Plant 1: 30 percent
Plant 2: 20 percent
Plant 3: 20 percent
Plant 4: 10 percent
PlantS: 10 percent
Plant 6: 5 percent
Plant 7: 5 percent
Step 4: Determine which EGUs will be included in the nonattainment analysis for Tree
City (See "Hypothetical example of baseline emissions reduction credit from a local
purchase of Renewable Energy Certificates (RECs)," Step 4):
According to the state DEQ, only Plants 1-4 significantly impact Tree City in the
ozone season.
Step 5: Quantify the current NOX emissions from Tree City's purchase of 300 million kWh
of grid power at the relevant EGUs (See "Hypothetical example of baseline emissions
reduction credit from a local purchase of Renewable Energy Certificates (RECs)," Step 5):
Plant 1: 360 tons NOX
Plant 2: 210 tons NOX
PlantS: 210 tons NOX
Plant 4: 90 tons NOX
Step 6: Seek state concurrence as to whether these reductions would be significant at
the projected attainment year? (See "Hypothetical example of baseline emissions
reduction credit from a local purchase of Renewable Energy Certificates (RECs), " Step 6)
Yes. Even though the state DEQ estimates NOX emissions rates at Plants 1-4 will
decrease to 50 percent of current values by the attainment date in eight years (hence
the estimated NOX reductions due to Tree City's storm water-livability initiatives would
only be 50 percent of the estimated values above), the state DEQ agrees that the NOX
K-27
-------
reductions at Plants 1-4 due to these proposed actions would still be significant at the
projected attainment year. The state DEQ intends to perform ozone air modeling to
determine the NOX reductions needed overall for Tree City to attain the ozone NAAQS
by the attainment date. This will include quantification of NOX emissions reductions
necessary at Plants 1-4. The NOX reductions for the attainment year at each plant due
to these storm water-livability initiatives will be subtracted from the required, total
attainment year NOX reductions at each of these four plants as determined by modeling.
Thus, the storm water-livability initiatives will cause a reduction in the emissions
baselines for Plants 1-4 at the attainment year (and increasingly in subsequent years).
Step 7: Determine whether the City and the state can agree upon an enforceable
mechanism so that these reductions can continue to be counted as a NOX reduction
measure in the SIP through and beyond the attainment date
The state may be satisfied with the enforceability of these City plans, given the financial
and contractual commitments the City has made. However, the state may want to have
a formal agreement with the City to the effect that failure of the City to abide by this
formal agreement with the state would result in a penalty payable by the City to the
state which would be sufficient for the state to acquire the NOX reductions by other
means. A similar provision could be included for maintenance of the NOX emissions
once the area has attained the ozone NAAQS. Because the NOX reductions in this
example are expected to increase after the attainment year, this should not be a major
concern.
K-28
-------
ATTACHMENT A: CONNECTICUT'S ENERGY EFFICIENCY/RENEWABLE
ENERGY POLICIES AND PROGRAMS
Renewable Energy Policies and Programs
Connecticut's RPS began in 1998 as part of the electric deregulation initiative. It requires that
electricity suppliers obtain a minimum percentage of their retail load from renewable sources.
The minimum percent requirement was 4.5 percent in 2005, and it increases each year until
2020, at which point 27 percent of the state's retail electricity load must come from renewable
energy sources. Of the total target, 4 percent must be meet by EE resources which includes
CHP systems, conservation and load management programs, and waste heat recovery systems.
CTDPUC evaluates each electricity supplier's compliance with the RPS requirement each year
through an administrative docket process, and imposes fines or other corrective actions if
compliance is not shown. To date, Connecticut's electricity suppliers have been able to meet
their obligations every year but one, and the CTDPUC imposed substantial monetary fines for
each MWh shortfall in meeting the required RPS. Under CT's RPS program, there is a
requirement for a quarterly truing up and an annual report. The CTDPUC requires the electric
distribution company (EDC) to look back to see if the RPS minimum percentage requirement
was met. If it has not been met, then the CTDPUC requires the EDC to pay a fee or essentially a
fine.
Utilizing RPS in air quality plans is complicated by the fact that electricity suppliers may
demonstrate compliance with the RPS (for traditional renewable resources - Class I and Class II)
through the purchase of RECs from out of state RE generators, whereas the federal CAA
requires that reductions relied on for RFP or attainment must come from within the
nonattainment area. Additionally, for Class III resources such as CHP, the emissions benefits
need to be carefully assessed since there may be increased emissions on-site but decreased
overall emissions in due to the displacement of grid-supplied power. Connecticut intends to
work with the region's ISO, the ISO-New England, to analyze which electric generating units
(EGUs) are likely to ramp down as more "must-take" RE resources are made available. A key
aspect of this analysis will be predicting the location of future RE resources in New England, and
identifying the fossil-fuel fired units that either shut-down or operate less due to the increased
electricity produced from renewable resources.
Under CT's RPS program the renewable power generally can come from the New England or NY
power pools, although the statutory region includes New England states, NY, PA, NJ, MD, DE.
All of these states have RPS programs except VT.
Energy Efficiency Policies and Programs
Connecticut has over twenty years of experience with EE programs. Even before the
restructuring of the electric power industry that occurred in 1998, electric utilities in Fairfield
County used EE programs to supplement energy generation and to help mitigate transmission
constraints. These early successes were then developed into statewide programs when, in
1998, the state's legislature established the CEEF and created the ECMB. These programs are
funded primarily by ratepayers but are supplemented with funds from other sources such as
K-29
-------
proceeds from the auction of allowances in the RGGI program. The CEEF is funded by a
surcharge of $0.003 per kWh (3 mills per kWh) on Connecticut Light and Power (CL&P) and
United Illuminating (Ul) customers' electric bills. Each of the two utilities administers and
implements efficiency programs with monies from its ratepayer fund, in accordance with a
comprehensive plan approved by the CTDPUC. The utilities develop their plans with advice and
assistance from the state's ECMB. Additional sources of funding for the CEEF in 2009 included
the RGGI, the FCM, Class III Renewable Credits, and the ARRA. Figure 2 provides an average
program example of how Connecticut quantifies energy savings from energy efficiency.
As with the state's RPS program, the CTDPUC conducts an annual review and evaluation of the
EE programs implemented by the state's electricity suppliers. Connecticut is evaluating
whether some of these programs may be suitable for incorporating into its SIP. Connecticut is
also reviewing options for quantifying the emission reduction impact from these measures.
With regard to quantification, the state may use as a starting point the somewhat conservative
estimate of energy savings bid into and accepted by the ISO-New England's FCM. Additionally,
the state is exploring how to gauge the impact that its EE programs have during high electricity
demand days, as these days typically correlate well with high ozone episodes.
Connecticut's original electric-industry restructuring legislation (Public Act 98-28) was enacted
in April 1998 and created the CEEF. The mission of the CEEF is to advance the efficient use of
energy, to reduce air pollution and negative environmental impacts, and to promote economic
development and energy security.
K-30
-------
Figure 2: How Connecticut Quantifies Energy Savings from Energy Efficiency, Average Program Example
TakeEE
Measure
Define Method
Add and
Subtract
Secondary
Benefits
Determine Determine %
Confidence of of Time Units
Installation are Operating
Determine
Coincidence with
Peak (Summer
and Winter)
Replaced lighting + Un-needed
(kWdfkW,J Additional
C&I + Cooling
Standard Occupancy Sensors
Lighting 0.31 x £( P lights on - Additional
sensor x Heating
wattage/light) Needed
41.67°(
'042
£(Hours of
Operation per
Operating
Unit)
A) Occupancy
Coincidence
Factor.
-Winter=0.13*
-Summer=0.15*
B) Lighting
Coincidence
Factor.
-Winter=0.55*
-Summer=0.70*
1 Von Neida, Bill et al (2000). pp. 433-459.
2 Rundquistetal, R.A. (1993).
*Average winter coincidence factor of each factor calculated by the above.
K-31
-------
Letter from EPA Region 1 to Connecticut
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 1
5 POST OFFICE SQUARE. SUITE 100
BOSTON. MA 02109-3912
September 30, 2010
Anne Gobin, Chief
Bureau of Air Management
Connecticut Dept. of Environmental Protection
79 Elm Street
Hartford, Connecticut 06106-5127
Dear Ms. Gobin:
As you know, on January 6, 2010 EPA proposed to tighten the national ambient air
quality standard (NAAQS) for ground level ozone. This letter is intended to convey to
you our preliminary suggestions for how Connecticut could pursue expanded emission
reduction credit from your state's energy efficiency and renewable energy programs
within the SIP Connecticut will need to develop to meet this forthcoming standard.
Members of our respective staffs have met a number of times over the past several
months to discuss the various aspects of Connecticut's energy efficiency (EE) and
renewable energy (RE) legislation, and the merits of incorporating these programs into
your SIP. Through these discussions, it has become clear that establishing linkages
between Connecticut's EE/RE programs and your state's more established criteria
pollutant air quality management planning process is desirable, appropriate and
technically feasible. Therefore, we are providing you with our preliminary
recommendations for the technical support materials we think should be assembled to
document emission reductions from the fossil fuel fired electrical generating units in
Connecticut due to implementation of these programs. Although the focus of our
discussions has been on NOx emission reductions from EGUs and ozone SIPs, we
believe this methodology can be used to determine emission reductions from other
pollutants for SIPs as well.
In addition to our collaborative effort with Connecticut, you should also be aware that a
larger effort is underway within EPA nationally to provide clarifying guidance on the
incorporation of EE/RE measures in SIPs. As that develops, we will provide additional
feedback as necessary.
In 2004, EPA published the following two documents that .contain guidance for states
seeking to incorporate emission reductions from EE/RE programs into their SIPs:
^'Guidance on SIP Credits from Emission Reductions from Electric-Sector Energy
Efficiency and Renewable Energy Measures," and.
"Incorporating Emerging and Voluntary Measures in a SIP."
Toll Free-1-888-372-7341
Internet Address (URL) http.//www.epa.gov/regioni
Recycled/Recyclable Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Poslconsumor)
K-32
-------
Pursuant to this guidance, energy efficiency and renewable energy programs were
generally considered emerging measures. The guidance stated that, "Voluntary and
emerging measures are limited to 6 percent of the total amount of emission reductions
required for the rate-of-progress, reasonable further progress, attainment, or maintenance
demonstration purposes." However, measures that can be shown to meet the federal
Clean Air Act's requirements for approvable SIP measures are not subject to this
limitation. Given Connecticut's considerable track record in implementing its
legislatively mandated EE and RE programs, we believe that your state can pursue SIP
credit from these programs as traditional measures such that they would not be subject to
the 6 percent limitation. The Enclosure offers suggestions for how to document the
emission reductions from these programs.
The incorporation of expanded emission reduction credit from Connecticut's energy
efficiency and renewable energy programs represents a new and important aspect of your
state's overall air quality management program, and we look forward to continuing to
work with your staff to bring this to fruition. It is clear that the formal lines of
communication that your agency has forged with your state's Department of Public
Utility Control have been beneficial to Connecticut in this endeavor, and we encourage
you to maintain this relationship in the future.
Please thank Rick Rodrigue, Paul Bodner, and Paul Farrell of you staff for the
considerable amount of time, energy, and leadership that they are providing to meet this
objective.
David B. Conroy, Chie^
Air Programs Branch
cc: Rick Rodrigue, CT-DEP
Paul Bodner, CT-DEP
Paul Farrell, CT-DEP
K-33
-------
ENCLOSURE
Energy Efficiency (EE) and Renewable Energy (RE) in Connecticut's Ozone State
Implementation Plan (SIP)
In order to meet federal Clean Air Act (CAA) requirements, emission control measures
must be shown to be quantifiable, surplus, enforceable, and permanent. Each of these
criteria are discussed below along with our suggestions for the information that
Connecticut could gather to illustrate how its EE and RE programs meet these criteria.
Quantifiable: Pollution control measures submitted for inclusion within a SIP must be
quantifiable and amenable to verification over time so that the level of emission reduction
claimed can be tracked to see if it has actually been achieved.
Quantification of RE measures: Section 16-245(a) of the Connecticut General Statutes
established a renewable portfolio standard mandate that requires electricity suppliers
providing services to the state ensure that a portion of the electricity they make available
is generated by renewable resources. The portion of electricity that must come from
renewable resources is 14% for 2010, and this percent requirement increases each year
through 2020. Connecticut's legislation also requires a quarterly truing up and an annual
report that compels EGUs to confirm whether or not the RPS minimum percentage
requirement was met.
The Connecticut Department of Public Utility Control (DPUC), in implementing this
legislation, allows the renewable energy used to meet Connecticut's RPS requirements to
come from within the state, within the ISO-New England control area, or from an
adjacent power control area. This large geographic area from which Connecticut's
electricity suppliers may seek renewable energy resources complicates the analysis of the
NOx emissions that are avoided due to fossil fuel fired electrical generating units (EGUs)
running less as renewable suppliers become available. However, we believe sufficient
data exist that will allow Connecticut to gauge the impact of its RPS legislation on NOx
emissions from the production of electricity in the area.
One method Connecticut could explore is analysis of the location and NOx emitting
characteristics of the fossil fuel fired EGUs that have been able to reduce their output as
renewable energy resources were made available on past days. The output based NOx
emission rates for these units (e.g., units of Ibs. NOx per megawatt-hour) can then be
multiplied by the actual number of megawatt-hours of renewable electricity procured by
the state's electricity suppliers. This method can provide an approximation of the NOx
emissions avoided as a result of Connecticut's RPS program. Given the
interconnectedness of the region's electricity grid, and the existence of RPS programs in
neighboring states, it may be advantageous for Connecticut to approach ISO-New
England, the regional transmission organization (RTO) that oversees operation of New
England's electric power system, for assistance in performing this analysis.
K-34
-------
A second quantification approach could entail review of dispatch modeling prepared by
other entities such as ISO-New England, or if resources allow dispatch modeling tailored
to this specific project, to provide an indication of how the dispatch of EGUs in the future
will be affected by implementation of Connecticut's RPS program.
Quantification ofEE measures: Over the past several years much work has been
performed in the area of measurement and verification of the impact that energy
efficiency programs have on electricity demand, and linkage of these savings to
reductions in air pollutant emissions. For example, Connecticut's energy efficiency
program requires documentation of estimated energy savings from the state's ratepayer
funded EE program before and after energy efficiency programs are implemented.
More recently, ISO-New England took the significant step of allowing electricity savings
from energy efficiency, distributed generation, load management, and load response to be
bid into its forward capacity market (FCM). Market participants earn payments for the
qualifying resources successfully bid into the market. The inclusion of energy efficiency
in the FCM, which includes payments made by ISO-New England for the electricity
savings represented by these measures, provides additional evidence that the calculated
EE savings are real and also provides an additional accountability mechanism to ensure
that they occur. We suggest that Connecticut DEP explore use of the amount of
electricity savings bid in to the FCM by the state's electricity suppliers as a starting point
in determining the amount of NOx emissions avoided from the state's EE programs. This
could be supplemented with other readily available approximations of the electricity
savings from energy efficiency measures such as those documented in the ISO-New
England Regional System Plan, or in Connecticut's Integrated Resource Plan. As a side
note, we also encourage Connecticut DEP to monitor the distributed generation resources
in the state to ensure that these resources' participation in this market have a positive
impact on air quality.
In addition to the above, an understanding of how the regional photochemical urban
airshed modeling that will be used to support Connecticut's SIP treats state RPS
standards is imperative to avoid double counting the impact of these measures on future
year emissions from the ECU sector. EPA headquarters is currently looking into
technical analyses it may be able to perform that will help shed light on this issue. EPA
and CT-DEP should continue to work collaboratively on this effort as EPA's analysis is
developed and refined.
Surplus: Emission reductions are considered surplus as long as they aren't otherwise
used to meet attainment requirements in the SIP. Accordingly, Connecticut should
ensure that it has a good understanding of the assumptions, made in the electricity sector
future year baseline modeling done to support its next ozone SIP. One manner of
accounting for the NOx emission reductions from Connecticut's energy efficiency and
renewable portfolio standards programs would be to ensure that the future baseline
assumptions for the electricity sector in the state's modeled attainment demonstration
accurately reflect the impact of the state's programs. Alternatively, Connecticut could
K-35
-------
take steps to ensure that the future year baseline modeling does not incorporate the
impact from its EE/RE programs, and then determine their impact separately akin to how
traditional control measure reductions are determined.
EPA recently proposed a rule to address air pollution transported from one state to
another in the Eastern U.S. The proposed rule includes annual and ozone season NOx
budgets for Connecticut. If this rule is finalized as it was proposed, NOx emissions from
EGUs in Connecticut will be subject to emissions caps and will be allocated allowances
to use as a means of demonstrating compliance with their obligations under the rule
developed to implement this program. Connecticut should ensure that emission
reductions which accrue from the implementation of its energy efficiency programs do
not simply result in the freeing up of allowances that EOUs in the state can use or sell to
other entities in need of allowances to cover their air emitting activity. One method for
accomplishing that would be for the state to set aside allowances for EE/RE and then
retire them as these measures come to fruition, but there may be other viable approaches
that address this concern.
Enforceable: Emission reductions used to meet SIP RFP or attainment needs must be
enforceable against a source, and the state and EPA must have the ability to apply
penalties if deemed appropriated. Additionally, citizens must have access to the
emissions related information obtained from the sources, and must be able to file suits
against the source for violations.
In Connecticut's case, the state's renewable portfolio standards and energy efficiency
programs are mandatory programs created by specific state legislation that is primarily
implemented by the state's Department of Public Utility Control (DPUC). As we have
discussed over the past several months, submittal of these programs for incorporation into
the Connecticut State Implementation plan (SIP) will enable these programs to also
become federally enforceable. This federal enforceability is key to EPA being able to
provide expanded SIP credit for these programs. In the coming months, we envision that
Connecticut DEP and EPA staff will be able to work out the details of the specific
legislation and/or rules that should be submitted to EPA, as well as the development of
any formal agreements between CT-DEP and CT-DPUC regarding overview and
enforcement of these programs.
Permanent: The emission reductions expected from the state's EE/RE programs should
continue through the term for which the credit is granted unless replaced by another
measure, or the state demonstrates through a SIP revision that the measure is no longer
necessary. With regard to Connecticut's renewable portfolio standards program, given
that the state has adopted legislation for this program and has an established track record
of oversight and enforcement for it, we believe the "permanent" criterion could be
addressed by the state committing in the SIP to continued implementation of the program.
With regard to Connecticut's energy efficiency programs, the permanence of some
programs, such as purchase programs for energy efficient equipment and products, would
need to be addressed in that there is no guarantee that the purchased equipment/products,
K-36
-------
take steps to ensure that the future year baseline modeling does not incorporate the
impact from its EE/RE programs, and then determine their impact separately akin to how
traditional control measure reductions are determined.
EPA recently proposed a rule to address air pollution transported from one state to
another in the Eastern U.S. The proposed rule includes annual and ozone season NOx
budgets for Connecticut. If this rule is finalized as it was proposed, NOx emissions from
EGUs in Connecticut will be subject to emissions caps and will be allocated allowances
to use as a means of demonstrating compliance with their obligations under the rule
developed to implement this program. Connecticut should ensure that emission
reductions which accrue from the implementation of its energy efficiency programs do
not simply result in the freeing up of allowances that EOUs in the state can use or sell to
other entities in need of allowances to cover their air emitting activity. One method for
accomplishing that would be for the state to set aside allowances for EE/RE and then
retire them as these measures come to fruition, but there may be other viable approaches
that address this concern.
Enforceable: Emission reductions used to meet SIP RFP or attainment needs must be
enforceable against a source, and the state and EPA must have the ability to apply
penalties if deemed appropriated. Additionally, citizens must have access to the
emissions related information obtained from the sources, and must be able to file suits
against the source for violations.
In Connecticut's case, the state's renewable portfolio standards and energy efficiency
programs are mandatory programs created by specific state legislation that is primarily
implemented by the state's Department of Public Utility Control (DPUC). As we have
discussed over the past several months, submittal of these programs for incorporation into
the Connecticut State Implementation plan (SIP) will enable these programs to also
become federally enforceable. This federal enforceability is key to EPA being able to
provide expanded SIP credit for these programs. In the coming months, we envision that
Connecticut DEP and EPA staff will be able to work out the details of the specific
legislation and/or rules that should be submitted to EPA, as well as the development of
any formal agreements between CT-DEP and CT-DPUC regarding overview and
enforcement of these programs.
Permanent: The emission reductions expected from the state's EE/RE programs should
continue through the term for which the credit is granted unless replaced by another
measure, or the state demonstrates through a SIP revision that the measure is no longer
necessary. With regard to Connecticut's renewable portfolio standards program, given
that the state has adopted legislation for this program and has an established track record
of oversight and enforcement for it, we believe the "permanent" criterion could be
addressed by the state committing in the SIP to continued implementation of the program.
With regard to Connecticut's energy efficiency programs, the permanence of some
programs, such as purchase programs for energy efficient equipment and products, would
need to be addressed in that there is no guarantee that the purchased equipment/products,
K-37
-------
would be replaced at the end of their useful lives with comparably efficient equipment.
However, we believe the permanence of energy efficiency measures can be adequately
demonstrated and will continue to work with staff from Connecticut DEP to address it.
For example, from a broad perspective it seems reasonable to conclude that as
technological innovations in this industry continue, future equipment replacements will
likely take the form of comparable or improved equipment from an EE perspective.
Additionally, Connecticut's ten plus years of experience with funding and
implementation of its EE programs coupled with a SIP commitment to continue doing so
should help address the permanence criterion.
K-38
-------
ATTACHMENT B: MARYLAND'S ENERGY EFFICIENCY/RENEWABLE
ENERGY POLICIES AND PROGRAMS
EmPower Maryland
EmPOWER Maryland, enacted in 2007, requires utilities and the Maryland Energy
Administration (MEA) to reduce per capita peak demand and per capita electricity consumption
in the state 15 percent by 2015. The utilities are in the process of implementing residential,
commercial, and industrial sector programs to achieve the goal, and the MEA is implementing
complementary programs, including:
EmPOWER Maryland State Agency Loan Program (SALP): a loan program for state
agencies to expand the use of energy performance contracts to make state buildings
more efficient;
EmPOWER Maryland Empowering Finance Initiative: a loan program targeted at helping
residential consumers afford clean energy improvements
EmPOWER Maryland Appliance and Lighting Rebate Programs: rebate programs to
incentivize the purchase of energy efficient appliances and light bulbs
EmPOWER Maryland Industrial and Commercial Programs: various programs targeting
the industrial and commercial sector, including a loan program to help finance the cost
of EE projects in commercial and industrial facilities and a program to provide Maryland
industries access to informational resources, workshops, technical support and energy
assessment opportunities
EmPOWER Maryland Residential Initiatives: various programs, including a grant program
in coordination with DHCD to conduct EE retrofits in apartment units to reduce energy
bills for low and moderate income families
These EmPOWER Maryland programs incorporate several of the other policies recommended in
the Maryland Climate Action Plan, including:
RCI-2: Demand-Side Management Energy Efficiency Programs (captured by the utilities'
peak demand programs)
RCI-3: Low Cost Loans for Energy Efficiency (captured by EmPower Maryland SALP,
Empowering Finance and Industrial and Commercial Programs, described above)
RCI-7: More Stringent Appliance/Equipment Efficiency Standards (captured by the
EmPOWER Maryland Program Appliance and Lighting Rebate Programs, described
above. MEA also continues to advocate for legislation for stronger standards.)
RCI-11: Promotion and Incentives for Energy-Efficient Lighting (captured by the
EmPOWER Maryland Program Appliance and Lighting Rebate Programs)
Renewable Portfolio Standards
The goal of Maryland's RPS is for the state to obtain 20 percent of its electricity from renewable
resources by 2022, with intermediate targets of 7.5 percent by 2011 and 18 percent by 2020.
To help Maryland reach these ambitious targets, MEA has focused on advocating for policies to
promote RE and on running programs to stimulate the RE market.
K-39
-------
This past year, MEA advocated for legislation, passed by the Maryland General Assembly, to
amend the RPS to accelerate the solar RPS requirement in the near term (2011-2017), resulting
in more incentives for solar development. MEA also advocated for legislation, passed by the
Maryland General Assembly, to reauthorize the Maryland RE production tax credit, offering up
to $2.5 million to eligible taxpayers for the production of renewable electricity.
Through its residential renewables grant program, MEA awarded hundreds of grants (ranging
from $1,000-10,000) to homeowners and businesses to offset the cost of installing wind,
geothermal and solar PV systems. Demand has increased from 200 systems a year to 200
systems a month, even with significantly reduced incentives.
MEA also developed and implemented Project Sunburst, a program offering rebates of up to
$1,000 per KW of solar PV capacity installed on public buildings. The program will incentivize
the building of about 10 MW of solar in Maryland over the next year, more than doubling
current capacity in the state.
In addition, leading by example, MEA and DCS partnered with the University System to launch
the Generating Clean Horizons Initiative, which resulted in Power Purchase Agreements with 3
new, utility scale renewable developments (65 MW of onshore wind and 17 MW of thin film
solar).
To promote all different types of renewables, MEA has a program manager dedicated to
biomass, biofuels and electric vehicles; a program manager dedicated to wind; and two
program managers dedicated to solar. These program managers focus on providing support for
the development and adoption of their respective technologies.
Finally, MEA administered the RE production tax credit. Over the past three years, more than
$5 million in these credits have been claimed.
As demonstrated above, MEA's efforts to help the state reach the RPS goal incorporate several
of the other policies recommended in the Maryland Climate Action Plan, including:
ES-1: Promotion of Renewable Resources
ES-2: Technology-focused Initiatives for Electricity Supply
ES-5: Clean Distributed Generation
Regional Greenhouse Gas Initiative
The Regional Greenhouse Gas Initiative (RGGI) is a market-based C02 cap and trade program
designed to reduce C02 emissions from fossil fuel-fired power plants. The program will be
implemented by the participating states in January 2009. As there are no technological controls
available to reduce C02 emissions, the program provides for the sale of a determined quantity
of C02 allowances. Electric generators will be required to purchase one C02 allowance for every
ton of C02 emitted. The proceeds will be used to fund EE programs, resulting in reduced C02
K-40
-------
emissions achieved through reduced electrical demand. These regulations will apply to fossil
fuel-fired generating units over 25 MWs.
Regional reduction targets have been agreed upon as a two-phase regional emissions cap:
2009 through 2015: Hold regional emissions constant at current levels (about 150
million tons C02), with a built-in review of the RGGI program no later than 2015.
2015-2020: Reduce emissions by 10 percent below current levels
Maryland Clean Car Program
The Maryland Clean Cars Program required adoption of the California clean car program for
implementation beginning in Maryland in model year 2011. The implementing regulations
were originally adopted in 2007 and updated in both 2009 and 2010. The following legislation
passed in 2010 created incentives for the purchase of advanced technology vehicles that are
required by the Clean Car Program:
HB 469 (SB281) Motor Vehicle Excise Tax - Tax Credit for Electric Vehicles - provides
credit against the motor vehicle excise tax for qualified vehicles.
HB 674 (SB) High Occupancy Vehicle (HOV) Lanes - Use by Plug-In Vehicles - allows
qualified vehicles access to HOV lanes without the required minimum occupancy.
The Maryland Clean Cars Act of 2007 required MDE to adopt regulations implementing the
California Clean Car Program. Maryland's implementing regulations adopted, through
incorporation by reference, the applicable California regulations. The California program is a
dynamic, changing program in which many of the relevant California regulations are
continuously updated. To retain the California program, Maryland must remain consistent with
their regulations, hence when California updates its regulations; Maryland has to update their
regulations. The Maryland regulations were updated in 2009 and 2010.
K-41
-------
ATTACHMENT C: NEW MEXICO'S ENERGY EFFICIENCY/RENEWABLE
ENERGY POLICIES AND PROGRAMS
New Mexico has three primary EE/RE policies. First, the state has a RPS. The original RPS law
required investor-owned utilities (lOUs) to get 10 percent of their electricity retail sales by 2011
from renewable energy sources. Under the 2007 amendment, lOUs must have renewable
energy sources providing 15 percent of their electricity retail sales by 2015 and then increase to
20 percent by 2020. Rural electric cooperatives must have RE for 5 percent of their electricity
retail sales by 2015, increasing to 10 percent by 2020. Renewable energy can come from new
hydropower facilities, fuel cells that are not fossil-fueled, and biomass, solar, wind, and
geothermal resources.
Second, the state requires that lOUs must offer a voluntary RE program to their customers. In
addition to and within the total portfolio percentage requirements, utilities must design their
public utility procurement plans to achieve a fully diversified RE portfolio no later than January
1, 2011, as follows:
No less than 20 percent Wind
No less than 20 percent Solar
No less than 10 percent Other technologies
No less than 1.5 percent Distributed Generation (2011-2014) and 3 percent Distributed
Generation by 2015.
Third, enacted in 2005, New Mexico's Efficient Use of Energy Act (Section 62-17-1 NMSA 1978)
requires that public utilities, distribution cooperative utilities and municipal utilities include
cost-effective EE and load management investments in their energy resource portfolios and
that any regulatory disincentives that may exist to public utility investments in cost-effective EE
and load management are eliminated.
In 2008, the statute was amended to include a State Energy Efficiency Resource Standard
(EERS). Under this amendment public utilities providing electricity and natural gas service to
New Mexico customers shall, subject to commission approval, acquire all cost-effective and
achievable EE and load management resources available in their service territories. This
requirement, however, for public utilities providing electricity service, shall not be less than
savings of five percent of 2005 total retail kWh sales to New Mexico customers in calendar year
2014 and ten percent of 2005 total retail kWh sales to New Mexico customers in 2020 as a
result of EE and load management programs implemented starting in 2007.
The Energy Efficiency and Renewable Energy Bonding Act (Sections 6-21D-1 through 6-21D-10
NMSA 1978) authorizes up to $20 million in bonds to finance EE and RE improvements in state
government and school buildings. State agencies or school districts may request an energy
assessment from the New Mexico Energy, Minerals and Natural Resources Department to
identify specific energy saving measures. A wide range of measures are eligible for funding,
K-42
-------
including CHP and waste heat recovery systems. Bonds are to be paid back by realized energy
savings.
K-43
-------
REFERENCES
Rundquistetal, R.A. (1993). Calculating Lighting and HVAC Interactions. ASHRAE Journal.
Stratus Consulting (2009). A Triple Bottom Line Assessment of Traditional and Green Infrastructure
Options for Controlling CSO Events in Philadelphia Watersheds. 2009. Available online at
Von Neida, Bill et al (2000). An analysis of the energy and cost savings potential of occupancy sensors
for commercial lighting systems. Illuminating Engineering Society of North America 2000 Annual
Conference: Proceedings. Available online at
K-44
-------
United States Office of Air Quality Planning and Standards Publication No. EPA-456/D-12-001I
Environmental Protection Outreach and Information Division July 2012
Agency Research Triangle Park, NC
------- |