States that may seek international assistance in achieving their CPP emission reduction targets can look to a June 2016 report prepared by the Brattle Group for ideas. The report, Enabling Canadian Electricity Imports for Clean Power Plan Compliance, was prepared for the Canadian Electricity Association, Canadian Hydropower Association, Canadian Wind Energy Association, the governments of Canada and Québec, Emera Inc., Manitoba Hydro, Nalcor Energy, and Powerex Corporation, and offers technical guidance for states that may include clean energy imports from Canada as part of their CPP compliance plans.
According to the report, mass-based plans offer more flexibility than rate-based plans for incorporating clean energy imports from Canada for CPP compliance because imports only need to displace domestic fossil-based generation and associated carbon dioxide emissions in order to contribute to mass-based compliance. In contrast, Brattle reports that in order to qualify under rate-based plans, Canadian imports will require states to set, and generators to meet, additional eligibility criteria, including demonstrating that the international generator is physically interconnected to the U.S. grid and has contracted to sell energy to a U.S. entity. Accounting for these differences, Brattle offers targeted recommendations aimed at facilitating clean energy imports from Canada based on the type of compliance a state elects. For states that choose to comply through mass-based plans, Brattle recommends states craft allowance set-asides that enable all zero-emission generation to participate, and minimize the potential for domestic and international emission leakage risks. For rate-based plan states, Brattle suggests states accept a broad range of approaches to demonstrating physical interconnection and contracting requirements.
Regardless of whether states elect rate- or mass-based compliance, Brattle also provides a list of options for states seeking to enable clean Canadian imports as a means of complying with the CPP (if the CPP is ultimately upheld on judicial review) or to achieve other state clean energy goals, including:
- Minimizing barriers for clean energy imports from Canada to participate under Renewable Portfolio Standard programs and other state policy objectives;
- Working with resource owners and system planners to develop the necessary transmission infrastructure to facilitate clean energy imports; and
- Structuring competitive solicitations for clean energy resources to enable all types of resources to be developed.
