Clean Power Plan

The table of contents for this document covers the major area of concern for evaluators. We have provided an edited listing of specific areas of interest.

• 1.2 Determining Baselines page 2
• 2. EM&V Guidance Applicable to All Demand-Side EE page 7
• 2.1 EM&V Methods page 8
• 2.2 Electricity Savings Metrics and Baselines page 11
• 2.3 Reporting Timeframes and Considerations page 14
• 2.4 Deemed Savings page 15
• 2.5 Independent Factors Affecting Energy Consumption and Savings page 17
• 2.6 Accuracy and Reliability of Quantified Savings page 18
• 2.7 Avoiding Double Counting page 20
• 2.8 Effective Useful Life and Persistence of Savings page 22
• 2.9 Savings Quantification and Verification Cycles page 23
• 2.10 Transmission and Distribution (T&D) Savings Adders page 24
• • 2.11 Interactive Effects page 25
• 3. Supplemental Guidance for Specific Categories of EE page 30
• 3.1 Demand-Side EE Programs page 30
• • 3.1.2 Applicable Guidance – Direct Action EE Programs page 32
  • 3.1.3 Applicable Guidance – Indirect Action EE Programs page 32
• 3.2 Project-Based Energy Efficiency page 33
• 3.3 Building Energy Codes page 37

Of additional interest in this document: Appendix C. EM&V Methods for Common EE Programs, Projects, and Measures:

Best Practices and Resources

Additional Notes:

– Under the CPP, EM&V applies primarily to states implementing a rate-based plan, in which compliance by affected EGUs is demonstrated using emission rate credits or ERCs. EM&V is generally not required for states taking a mass-based plan approach.

– The EPA has finalized several basic EM&V provisions, but is taking comment on the details. These details are provided in the proposed federal plan and model rules. See: http://www3.epa.gov/airquality/cpp/cpp-proposed-federal-plan.pdf

– The Clean Power Tool Box: EPA is also providing draft EM&V guidance for demand-side EE, which is not a regulatory document but is intended to help states and EE provider’s implementation of the EM&V provisions in the final emissions guidelines and model rules.

See: http://www2.epa.gov/cleanpowerplantoolbox

OPPORTUNITY TO COMMENT

– There is an opportunity for stakeholders to comment on the EM&V provisions in the proposed model rule and in the draft EM&V guidance. Details include:

You have 90 days to comment,

Send feedback on the guidance to: emvinput@epa.gov EPA will consider all comments received Comments related to EM&V in the proposed model rule must be submitted to that docket

– You can contact Niko Dietsch with any questions (dietsch.nikolaas@epa.gov)

Background

On October 23, 2015 the final EPA Carbon Pollution Emission Guidelines for Existing Electric Utility Generating Units (“Clean Power Plan”) were published in the Federal Register. Along with the Clean Power Plan, the EPA also published its Proposed Federal Plan and Model Trading Rules in the Federal Register. This triggered a 90-day public comment period for both of these documents as well as the EPA’s Draft Evaluation, Measurement and Verification (EM&V) Guidance and Clean Energy Incentive Program (CEIP).

The scope of the draft guidance is limited to EM&V for demand-side EE. With renewable energy and other zero- and low-emitting measures that generate electricity, all applicable requirements for quantification and verification are provided in the emission guidelines and proposed model rule, and no further guidance is offered at this time. For mass-based state plans – in which compliance is demonstrated by measuring emissions at the power plant – this guidance has limited applicability, though it may be of use in the design of allowance set-aside programs.

The EPA outlined and initiated the Clean Energy Incentive Program (CEIP) in the final EGs (see section VIII of the final EGs). The program is designed to incentivize investment in certain types of renewable energy (RE) projects, as well as demand-side energy efficiency (EE) projects implemented in low income communities, that generate MWh or reduce end-use energy demand during 2020 and/or 2021. The EPA proposes to apply the CEIP in all states subject to either a rate-based or mass-based federal plan.

Brief introduction to Rate vs. Mass-based Programs

1. The Rate-based Approach

In the first approach, the EPA would implement a rate-based emissions trading program. In a rate-based program, affected EGUs must meet an emission standard, derived from the EGs, expressed as a rate of pounds of CO2 per megawatt hour (lbs/MWh). If sources emit above their assigned rate, they must acquire a sufficient number of emission rate credits (ERC), each representing a zero-emitting megawatt hour (MWh), to bring their rate of emissions into compliance. ERCs may be generated by affected EGUs or by other entities that supply zero- or low emitting electricity resources to the grid through an approval and recognition process that the EPA will administer. ERCs may be bought and sold, or banked for use in later years. The ratebased approach is explained in greater detail in section IV of this preamble.

2. The Mass-based Approach

The agency recognizes that the “remaining useful lives” of facilities subject to a CAA section 111(d) federal plan is a factor that it must consider at the time it implements the federal plan. This factor, and how the agency proposes to consider it, is discussed in section III.G of this preamble below. Page 29 of 755

The second approach to a federal plan that the EPA is proposing in this action is a mass-based trading program. In a mass-based program, the EPA would create a state emissions budget equal to the total tons of CO2 allowed to be emitted by the affected EGUs in each state, consistent with the mass goals established in the EGs. The EPA would initially distribute the allowances within each state budget – less three proposed allowance set-asides – to the affected EGUs based on their historical generation. Allowances may then be transferred, bought, and sold on the open market, or banked for future use. The compliance obligation on each of the affected EGUs is to surrender the number of allowances sufficient to cover the EGU’s respective emissions at the end of a given compliance period. The EPA is also proposing as a part of the mass-based approach three set-asides of allowances: (1) For a Clean Energy Incentive Program; (2) to support RE projects; and (3) to allocate allowances based on an updating measurement of affected-EGU generation. The EPA is also proposing that a jurisdiction may choose to replace the federal-plan allocation provisions with its own allowance allocation provisions. The mass-based approach is explained in greater detail in section V of this preamble.

Regional Office Contacts

• Region
• • Regional contact
  • Email
  • Phone
  • States and protectorates

• Region I
• • Shutsu Wong
  • wong.shutsu@epa.gov
  • 617-918-1078
  • Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, Vermont
• Region II
• • Gavin Lau
  • lau.gavin@epa.gov
  • 212-637-3708
  • New York, New Jersey, Puerto Rico, Virgin Islands
• Region III
• • Mike Gordon
  • gordon.mike@epa.gov
  • 215-814-2039
  • Virginia, Delaware, District of Columbia, Maryland, Pennsylvania, West Virginia
• Region IV
• • Ken Mitchell
  • mitchell.ken@epa.gov
  • 404-562-9065 Florida, Georgia, North Carolina, Alabama, Kentucky, Mississippi, South Carolina, Tennessee
• Region V
• • Alexis Cain
  • cain.alexis@epa.gov
  • 312-886-7018 Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio
• Region VI
• • Rob Lawrence
  • lawrence.rob@epa.gov
  • 214-665-6580 Arkansas, Louisiana, New Mexico, Oklahoma, Texas Region
• Region VII
• • Ward Burns
  • burns.ward@epa.gov
  • 913-551-7960
  • Iowa, Kansas, Missouri, Nebraska
• Region VIII
• • Laura Farris
  • farris.laura@epa.gov
  • 303-312-6388
  • Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming
• Region IX
• • Ray Saracino
  • saracino.ray@epa.gov
  • 415-972-3361
  • Arizona, California, Hawaii, Nevada, American Samoa, Guam, Northern Mariana Islands
• Region X
• • Madonna Narvaez
  • narvaez.madonna@epa.gov
  • 206-553-2117
  • Alaska, Idaho, Oregon, Wa