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Discussion of Sec 111(d) options. System averaging is a concept that has been used since 2004-2005 since the CAIR rule. Looking at our system as a system rather than individual units is desirable and makes sense.
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Discussion of Sec 111(d) options • System averaging is a concept that has been used since 2004-2005 since the CAIR rule. Looking at our system as a system rather than individual units is desirable and makes sense. • As a consumer, concern that the whole carbon market is volatile and uncertain (per EU ETS experience). Prefer averaging as a more predictable path to ensuring value for consumers than trading approaches. • Example of NOx market as a caution: Prior to vacation of the CAIR rule, the allowance price rose to nearly $4,500 than dropped to nearly $1,000 or lower. We need to be considering options that present lower market risk simply due to speculation. Who benefits from that volatility.
Discussion of Section 111(d) • Natural gas markets another example of volatility. • Participants see a clear distinction between trading mechanisms for criteria pollutants and for CO2 due to reasons of scale, experience, technology and diversity of market participants. • Consideration/question: could market participation be limited to avoid risk and speculation? • RGGI has data re who has participated and to what extent, but its not clear how valuable that it is given that the NE is deregulated and the cap is not very stringent. • Question as to relevance of CA emissions performance standard. • Is there a way to take advantage of the natural cycle of generation mix and the remaining useful life of different emissions sources to enable a transition to new generation in ways that minimize costs to consumers? To accomplish this, there might need to be commitments to retire certain units at specified times for it to be enforceable. • Plant by plant retirement approach. It has essentially already been done in MN with Xcel’s system through the retirement and retrofit of a number of plants. This raises the importance of recognizing early action and not penalizing these early investments. • Desire to learn more about RGGI and its applicability.
How to incorporate the CO2 emissions reductions built into the implementation of Minnesota’s state EE and RE policies? How to work with EPA to recognize them. This would recognize the costs that consumers are already paying to implement these programs, as well as increase the relative value of the programs. • Possibility of some sort of emissions “backstop” for EPA compliance in case state policy does not deliver as expected. Could be a stack by stack emissions rate as a backstop.
