Telework and HEDD Weight of Evidence: Control Strategies

1. Telework and HEDDWeight of Evidence: Control Strategies MARAMA Weight of Evidence Workshop Diane Franks February 6, 2007

2. Topics • Very Long-Term Strategy Concept • Telework on Code Red/Orange Days • High Electricity Demand Days ( HEDD)

3. Why did MD include controls in WOE? • Control Measures for the SIP • Meet four criteria • Real • Surplus • Quantifiable • Enforceable • No episodic or weather-related measures • More flexibility – Cap and trade, Voluntary measures and innovative bundles

4. Innovative/Voluntary Measures or WOE? • Used measures like wind-power, clean vehicle purchases and others in SIP as voluntary bundle • Other measures like urban tree canopy and Smart Ways are likely to reach full potential far beyond 2009 attainment date • Starting implementation now produces little credit but begins building the program • Through WOE tried to quantify potential

5. Innovative SIP Bundle • A very flexible part of the SIP that: • Bundles together several programs that generate air quality benefits • Directionally correct • Difficult to quantify • Voluntary • Establishes conservative emission reductions targets (Approx. 1.5 tons) • Includes additional data collection and analysis to support a mid-course review and a “true-up” • Builds off EPA voluntary measures guidance • Encourages local government participation

6. Code Red Telework Program • Several programs already exist in the Baltimore-Washington Region to promote teleworking • Currently about 12% of commuters telework in the Washington Region • MD government striving to reach 10% of eligible workers teleworking • Goal to increase teleworking as an episodic strategy – “snow-day in summer” – to achieve very high participation • Hope to achieve the “Atlanta effect” where teleworking participation remains high even after the Olympics are gone

7. Sensitivity Runs for Code Red Telework • Assumed implementation in all MD nonattainment areas including Philadelphia region • Modeled very high participation • Difference between average ozone values from 2009 future base scenario and high telework on Code Red/Orange days • 2-3 ppb lower ozone for Code Red Telework

8. University of Maryland

9. Clean Air Telework Pilot Project • Pilot program managed by Clean Air Partners to launch spring of 2007 • Objective is to promote teleworking throughout government and business community when air quality is forecasted to be in the unhealthy range (Code Orange or above) • Strategies will be developed to increase the number of employees who telework on a weekly basis, while in addition increasing the frequency by linking teleworking to air quality

10. Clean Air Telework Pilot Project • The decision to initiate Clean Air telework days will be guided by the Air Quality Index (AQI), a color-coded scale used to communicate current and forecasted air quality levels to the public. • Three-day forecasts are issued by the Maryland Department of the Environment and the Metropolitan Washington Council of Governments • “Code Orange” is considered unhealthy for sensitive groups and “Code Red” is considered unhealthy for everyone. “Code Purple,” which occurs very infrequently in the metropolitan Baltimore/Washington region, is considered very unhealthy for everyone. • Clean Air Partners, a nonprofit organization that encourages voluntary action to improve air quality, helps to promote the three-day air quality forecast and encourage voluntary actions to reduce pollution to local employers through its Air Quality Action Day (AQAD) program. • Clean Air Partners will work with additional organizations (i.e. Commuter Connections) that have extensive resources and engage in similar efforts

11. Clean Air Telework Toolkit • Clean Air Partners will develop a toolkit that will assist organizations in promoting, establishing, and tracking a Telework program and provide resources for keeping abreast of forecasted and current air quality levels in the region.

12. Implementation • Conduct Pilot – MDE, National Wildlife Federation, and several local government agencies will pilot the effort in Spring of 2007 • Tracking System - participants will be asked to track their participation using a web-based system that tracks auto emission reductions resulting from teleworking (NOx, VOC, CO, and CO2); (https://www.secure-teletrips.com/) • Communications - send out several email communications to all participants prior to the launch of the “Clean Air Teleworking” pilot, during implementation, and at the conclusion of the pilot to explain objectives and keep employees informed • Expand Program – reach out to all state, local, and federal government agencies in the region. Target business community and seek out potential participants

13. HEDD Overview • Emissionsfrom Electric Generating Units • (EGUs) are higher on high electric • demand days • This results inpoorer air quality • Flexibility and innovation needed to • develop successful programs to address • this issue

14. CT Electric Generating Utility Average Percent Operating Time 2002-2005 Ozone Seasons Not all units run every day

15. In New York City and New Jersey the source is primarily gas and diesel fired combustion turbines

16. The Air Quality Opportunity • Seasonal or annual trading control programs do not address the problem • Reductions of NOx on peak days will provide significant ozone reduction benefit

17. Cannot Attain and Maintain without Addressing Peak Days • Demand for electricity is increasing and the • increase in the peak is growing faster than • the base: • -PJM Interconnection: consumer peak demand for electricity • will rise ~ 1.6% annually over the next decade. • - NE ISO: peak demand will rise ~2.4% annually. • - NYISO: relies heavily on many combustion turbines to • maintain NYC grid. • Meeting hot day peak electrical demand requires • bringing on more units, which are not necessarily • clean. These same units appear insignificant in • inventory.

18. Robust OTC Stakeholder Process • ISOs • PUCs • Generating Companies • EPA • State staff Process started in April 2006

19. OTC Accomplishments • Established a list of HEDD units in a 6 state area (MD, DE, PA, NJ, NY, CT) • Established an emission reduction goal • Looked at the emission difference between a Typical Summer Day (June 4, 2005) and a High Electric Demand Day (July 26, 2005) • Units Included in the Analysis • Combustion Turbines – Included all units • Non-Base Load Boilers • List adjusted by states • Applied an emission reduction level to Uncontrolled Units

20. HEDD Bundled SIP HEDD Strategy Address Moles (behind the meter & emergency engines) Performance Standards Max State EE/RE Commitments Partnership 2009

21. State – Generator HEDD Partnership Agreement contents: • Emission Reduction Responsibility • Defined Actions on High Electric Demand Days and Trigger • Quantification Methods • Reporting Requirements

22. Additional Components of Partnership • States are reviewing existing rules to close ‘loop holes’ that enable dirty distributed generation to exacerbate our air quality problems • States can enhance Energy Efficiency programs to reduce energy demand and therefore, emissions

23. Challenges • States agreeing to long term ‘clean’ performance standards and timing • Prevent anticipated electric demand growth from creating growth in peak needs. Pursue reductions with energy partners. • Challenge the market to find funding to ‘make’ HEDD units clean in the long term

24. ChallengesLeverage Energy Markets and PUC Actions • Efforts to Reduce Electrical Demand • Energy Efficiency Programs • Efforts to Improve System Reliability • Efforts to Promote Fuel Diversity • Renewable Energy Programs • Diversity Requirements • Actions Include: • Real Time Metering Infrastructure • Cost Considerations • Dynamic pricing for retail customers • Removal of electric distribution company disincentives - decoupling • Broaden the focus on energy efficiency to include demand response and make energy efficiency a resource that can compete for market share

25. Flexibility & Certainty • Flexibility • HEDD unit owners choose the most cost effective path • Can avoid “Command & Control” approach • Can use conservation to minimize peaks & minimize the commitment impact • If not double-counted, HEDD unit owners responsibility can span state borders, if directionally correct • Allows time to comply and continue to plan

26. Flexibility & Certainty • Certainty • State and the source enter into a mutually agreed upon plan using a formal agreement as the “contract” which gets submitted in the SIP • Lays out what is expected of both parties • Provides the certainty required to plan future actions

27. What’s in it for… The State: Attainment HEDD Unit Owners: Flexibility & Certainty

28. Control Strategies in WOE • Allows exploration of potential reductions for difficult to implement strategies • Supports early implementation of directionally correct measures • EPA positive feedback