EPA moves forward on renewables, efficiency program

Source: Elizabeth Harball, E&E reporter • Posted: Thursday, April 28, 2016

U.S. EPA today rolled out more details on how the agency would award early credit to states that take certain steps to cut carbon before the federal rule to curb power plant emissions takes effect in 2022.

The agency has sent a proposal on the Clean Energy Incentive Program, or CEIP, to the Office of Management and Budget for review.

The Supreme Court placed a stay on the Clean Power Plan in February, spurring EPA’s foes to place the agency’s work on the rule under intense scrutiny. In a statement, EPA argued that releasing the CEIP proposal to OMB for review “is a routine step and it is consistent with the Supreme Court stay of the Clean Power Plan.”

“Many states and tribes have indicated that they plan to move forward voluntarily to work to cut carbon pollution from power plants and have asked the agency to continue providing support and developing tools that may support those efforts, including the CEIP,” the agency stated.

Proponents of the rule say states and businesses that are still working on carbon-cutting plans would benefit from seeing the CEIP and other unfinished rule elements, including model carbon trading rules.

“Even with the Clean Power Plan under judicial review, states can benefit from having a clear path toward CEIP eligibility,” said Arvin Ganesan, vice president of federal policy for the business group Advanced Energy Economy. “This shows that EPA is moving forward, even under the stay, to give states the tools they need to prepare for action under the Clean Power Plan.”

EPA released details on the draft CEIP as part of the final Clean Power Plan in August.

It is an optional program designed to jump-start carbon emissions reductions in the United States by awarding early credit to states that build wind and solar power and energy efficiency projects in low-income communities in the two years before the Clean Power Plan kicks off in 2022.

Under the program, EPA aims to give out a limited quantity of additional carbon allowances or emission rate credits, which can be used against the states’ carbon emissions reduction targets required under the climate regulation.

However, many details on how the program would be implemented remained unresolved. In comments to the agency, regulatory analysts and renewable energy advocates debated whether the CEIP needed significant changes, especially given that Congress recently granted multiyear extensions of the production tax credit for wind and the investment tax credit for solar.

The CEIP program was also criticized for not offering credit to other alternative energy sources, like geothermal and biomass, or for energy efficiency projects that are not installed in low-income communities.

EPA sought feedback on the CEIP program through a several channels after the final Clean Power Plan was released, including a series of calls and public meetings.

In a statement, EPA said “that engagement will continue, including a public comment period and an opportunity for a public hearing, once the proposal becomes available for public review and comment after the interagency review process is complete.”

Reporter Emily Holden contributed.