Energy Efficiency (EE) & Renewable Energy (RE) in SIPs – EPA’s Roadmap and a Tour of Several States

1. Energy Efficiency (EE) & Renewable Energy (RE) in SIPs – EPA’s Roadmap and a Tour of Several States National Air Quality Conference Angie Shatas, U.S. EPA February 12, 2014

2. Goals • EE/RE – the lay of the land • EPA’s Roadmap • Touring a few states

3. What is EE/RE? • Energy Efficiency & Renewable Energy policies and programs • Require parties to use or fund EE/RE through regulation, statute or Public Utility Commission (PUC) order • Increase adoption of energy efficient practices • End-user education and incentives (e.g., consumer awareness and rebate programs) • Increase production and use of RE sources (e.g., solar, wind, biomass) • Renewable Portfolio Standards (RPS) and Energy Efficiency Resource Standards (EERS) can be state requirements that include any of the above

4. A current map of state EE/RE policies Mandatory - 29 Mandatory - 24 Voluntary - 9 Voluntary - 6

5. Elements for Success when incorporating EE/RE in SIPs • State-wide policies produce greater potential emission benefits • Dialogue between air and energy agencies Energy agencies provide prospective view of energy savings (for SIP submittal) and retrospective view (verification) • Quantification tools to determine if and to what extent an EE/RE initiative is affecting a particular nonattainment area

6. Past Experiences with EE/RE in SIPs • 2004 EE/RE guidance • Feedback from states • The expected SIP credit was not worth the analysis effort. • Documentation requirements were burdensome. • Achievable emissions reductions were not clear. • More detailed EPA guidance needed.

7. EPA’s Roadmap • Help states include EE/RE in SIPs • Roadmap • Clarifies existing guidance • Lays out four pathways for SIP credit • Identifies quantification approaches • Resources/Tools • Baseline analysis - Projected energy impacts of “on-the-books” state EE/RE policies • AVoided Emissions and geneRation Tool (AVERT) - emissions quantification (translates EE/RE to emissions) • Frequently Asked Questions

8. 4 Pathways * May be the load serving entity required to implement EE/RE. ** If a municipality has initiated a measure, then the state may delegate responsibility to the municipality.

9. Baseline Analysis – EE/RE Policies in AEO 2013 EPA and most states use the AEO 2013 energy policy assumptions in their SIP baseline emission projections. Policy Assessment Criteria Adopted in state legislation or Public Utility Commission (PUC) order (i.e. “on-the-books”) Goal:

10. Quantification –from Basic to Sophisticated Basic eGRID region non-baseload emission rates Sophisticated Energy Modeling Intermediate Historical Hourly Emissions Rates Economic parameters End use demand User-defined constraints Environmental regulations Energy Model Technology data Emission factors Fuel data

11. AVERT • EPA-developed quantification tool • Addresses a key reason states have not implemented previous EE/RE SIP guidance • Simulates dispatch to predict hourly changes in generation and emissions (NOx, SO2 and CO2) at electric generating units (EGUs) due to EE/RE • Uses actual data reported to EPA’s Clean Air Markets Division (CAMD) through Acid Rain Program

12. Current Engagement with States WA NH ME VT MT ND MN OR WI MA ID SD NY WY MI RI IA PA CT NE NV OH IL IN NJ UT CO WV DE KS MO VA CA KY MD NC TN AZ OK NM AR SC MS AL GA TX LA State with active interest FL State with interest State with Ozone Advance area(s)

13. States on the way - Maryland • Pathway: Weight of Evidence • Ozone attainment SIP for moderate area (due July 2015) • Participant in NESCAUM pilot project • EE/RE policies and programs in place • Maryland Renewable Portfolio Standard • EmPower Maryland energy conservation program • Regional Greenhouse Gas Initiative (RGGI) • Transit and smart growth initiatives • Green building initiatives • Electric vehicle initiatives

14. States on the way – New York • Pathway: Control • SIP and timing: TBD • Participant in NESCAUM pilot project • EE/RE policies and programs in place • Combined Heat and Power – also for boiler MACT compliance • NY-Sun Initiative – public/private partnership to increase solar capacity • Build Smart NY – reduce average energy usage in NY public buildings by 20% • Renewable Portfolio Standard • Energy Efficiency Resource Standard

15. States on the way - Massachusetts • Pathway: Baseline emissions projection • SIP and timing: TBD • Participant in NESCAUM pilot project • EE/RE policies and programs in place • Renewable Portfolio Standard • Energy Efficiency Resource Standard

16. Other states on the way – North Carolina, Kentucky, Utah, Louisiana • North Carolina • Looking at ozone reductions • In place: Renewable Portfolio Standard • Kentucky • In place: Voluntary energy efficiency targets through PUC orders • Utah • Case study underway • Looking at PM2.5 emission reductions • In place: Renewable Portfolio Standard • Louisiana • Ozone Advance areas • In place: local energy efficiency projects

17. For More Information: Angie Shatas, EPA OAQPS 919-541-5454 | shatas.angie@epa.gov Robyn DeYoung, EPA OAP 202-343-9080 | deyoung.robyn@epa.gov http://www.epa.gov/airquality/eere/ - EE/RE Roadmap manual - Frequently Asked Questions - AVERT