Last Comments Come in on EPA’s CEIP Proposal

Posted on November 8, 2016 by Jeff Bayne

On November 1, 2016, the period for public comments closed on EPA’s Clean Energy Incentive Program (CEIP). Over 100,000 comments were received on EPA’s optional program to encourage early investment in solar and wind renewable-energy generation and efficiency programs in low-income communities. While some entities filed comments months in advance (the comment deadline originally was August 29, 2016), others waited until closer to the deadline. Here are some highlights from the more recently filed comments:

  • The Sierra Club and the Center for Biological Diversity jointly submitted comments generally supporting EPA’s goal of encouraging clean energy investment and the CEIP’s emphasis on low-income communities. However, these groups are also concerned that incentives in the form of pollution credits or allowances will weaken both the CPP and the CEIP. They explain that if EPA distributes all of the matching allowances proposed in the CEIP, this will allow affected sources to emit 300 million tons of carbon dioxide beyond the limits set in the CPP. As a result, the Sierra Club and the Center for Biological Diversity urge EPA to narrow the focus on the CEIP to only those projects that will most benefit from an incentive and that are most likely to offset the additional pollution credits being allocated.
  • The Utility Air Regulatory Group (UARG), a group of electric-generation companies and national trade associations, submitted comments opposing the CEIP. As an initial matter, UARG argues that this EPA rulemaking is improper and unnecessary given the current stay and pending judicial review of the CPP. In addition to legal and procedural arguments, UARG objects to the general design of the CEIP. It argues that the CEIP should expand the types of projects eligible for the CEIP and that it should provide states and existing sources with more flexibility.
  • The U.S. Conference of Mayors and the National League of Cities jointly submitted comments generally in support of the CEIP. Not surprisingly, a large portion of these comments focuses on ways in which the CEIP could include a greater role for local government. The U.S. Conference of Mayors and National League of Cities urge EPA to explore options to allow local governments to participate in the CEIP even if their states decline to participate. They also request that EPA require state consultation with cities and businesses, instead of merely encouraging such consultation.
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New York Looks to Encourage Increased Deployment of Distributed Energy Resources

Posted on November 3, 2016 by Amber Martin

A newly released staff report from the New York State Department of Public Service (NYDPS) proposes to increase the penetration of solar, wind, battery storage, and other consumer-driven technologies in New York through efforts to better quantify the value these technologies provide to the grid.  The report is part of the New York Public Service Commission’s (NYPSC) ongoing Value of Distributed Energy Resources (DERs) proceeding and its ongoing efforts to “Reform[] the Energy Vision” in New York.

According to the report, reforming the energy vision will require increased reliance on DERs, including end-use energy efficiency, demand response, distributed storage, and distributed generation.  The staff proposal envisions that more appropriately compensating DERs will spur increased utilization of these resources and, in turn, reduce system costs overall for the benefit of all customers.  The report proposes a series of measures to achieve this and other goals, including a process to better calculate the value of DERs; development of “Virtual Generation Portfolios,” under which private utilities will develop DERs; encouragement of community distributed generation projects; and increased deployment of energy storage.  NYDPS will accept initial comments on the report through December 5, 2016; replies to those comments are due December 19, 2016.

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Briefs Have Been Filed, Oral Arguments Have Been Presented, Pens Continue to Write

Posted on November 2, 2016 by Anjali Patel

Although Clean Power Plan briefing was completed in April and oral argument was held at the end of September, parties are continuing to update the court on information relevant to their positions.  Rule 28(j) of the Federal Rules of Appellate Procedure allows parties to file short (350 words or less) letters “[i]f pertinent and significant authorities come to a party’s attention after the party’s brief has been filed—or after oral argument but before decision.”  To date, two such letters have been filed, and until the decision is rendered more are to be expected.

The first 28(j) letter, filed shortly before oral argument by state and state agency petitioners, concerns California’s proposed CPP compliance plan.  In the letter, the Petitioners claim that California’s proposed plan supports their arguments that EPA had failed to demonstrate “that its national-average performance rates are achievable by each State” or that “a sufficient interstate [trading] program will emerge to enable nationwide compliance.”  The Petitioners further claim that “States who can over-comply with EPA’s performance rates can and may very well either refuse entirely to trade with States like Montana, Kentucky, North Dakota, and West Virginia, or force those States to adopt more stringent regimes than the Rule provides, as the price for ‘linkage’ and compliance.”  California, Massachusetts, and New York—who are supporting EPA in the litigation—filed a response shortly thereafter rebutting the allegation that California’s proposal refused to “link to other States’ future plans.”  The response letter also claims that “[i]n any case, the CPP does not depend on trading, and Petitioners cannot show it is required for compliance.”

The second 28(j) letter, filed on Halloween by Petitioner National Mining Association, concerns EPA’s predictions for the amount of coal generation that would retire absent the CPP.  The Petitioner has argued that EPA’s CPP modeling “exaggerat[es]” the retirement rate.  In the letter, Petitioner explains that EPA “has now tacitly conceded Petitioners’ point” because EPA’s recently published Cross-State Air Pollution Rule Update includes a base case scenario for 2016 with 268 GW of coal generation, and that this amount is higher than EPA’s CPP base case scenario which predicted that if the rule was not adopted there would be 214 GW of coal generation in 2016.  Petitioner asserts that the amount of coal in service must “fall significantly to meet the CPP’s requirements.”  EPA and parties supporting EPA have an opportunity to file a limited response.

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EIA, Others Report Renewable Energy Gained Significant Ground During 2015

Posted on October 27, 2016 by Amber Martin

The Energy Information Administration reports that during 2015, eleven states generated at least 10% of their total electricity from wind, a significant increase from 2010, during which only three states had at least a 10% wind share.  Of the states that reached or crossed the 10% wind share threshold, Iowa had the largest wind generation share, with 31.3%, followed by South Dakota, with a 25.5% wind share, and Kansas, with 23.9%.  On a national scale, wind generators produced 190,927 gigawatt-hours of electricity in 2015, roughly 4.7% of net U.S. electric power generation and more than double the 2010 wind production.

The year 2015 was not just a good one for wind.  According to the Department of Energy’s Revolution Now 2016 update, wind and utility-scale and distributed solar accounted for over 66% of all new capacity installed in the nation in 2015.  And the International Energy Agency, in its recently released Medium-Term Renewable Market Report, reports that in 2015 renewables collectively surpassed coal to become the largest source of installed power capacity in the world.

Reliance on renewables is expected to continue to climb.  EIA indicates that wind production is expected to be even higher for 2016, with monthly data through July indicating that 5.6% of U.S. generation in 2016 to date has come from wind.  And according to DOE’s report, analysts expect that over half of all solar capacity installations in 2016 will be driven by factors outside of Renewable Portfolio Standard obligations.

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Cross-State Air Pollution Rule Update Published in the Federal Register

Posted on October 26, 2016 by Anjali Patel

EPA’s Cross-State Air Pollution Rule (CSAPR) Update for the 2008 Ozone National Ambient Air Quality Standards (NAAQS) was published in today’s Federal Register, 81 Fed. Reg. 74,504, triggering the start of the 60-day deadline to file a petition for review.*

As discussed in an earlier post, the update finalizes new or revised Federal Implementation Plans and sets new summertime (May–September) ozone season Nitrogen Oxide (NOx) emission budgets for power plants in 22 eastern states.  Although the Clean Air Act provides that petitions for review of EPA actions under 42 U.S.C. § 7410 should generally be filed in the federal appellate circuit where the action is applicable, the update includes a determination that the rulemaking is “nationally applicable” and of “nationwide scope and effect.”  As such, petitions for review of the update must be filed in the U.S. Court of Appeals for the D.C. Circuit.

* The 60th day falls on December 25. If you are considering a petition for review, you should consult legal counsel to clarify the appropriate date. This blog does not provide legal advice.

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