EPA moves to spur early action in states

Source: Elizabeth Harball, E&E reporter • Posted: Sunday, June 19, 2016

U.S. EPA gave its stamp of approval yesterday to solar installations in low-income communities as part of an optional, early-action program under the Clean Power Plan. The proposal would also allow geothermal energy and hydropower.

The Obama administration yesterday rolled out more details on its proposed Clean Energy Incentive Program (CEIP) . The optional program would give states early credit for certain actions to reduce emissions before the Clean Power Plan would take effect, like installing wind farms or energy efficiency projects in low-income communities.

“For nearly a year we have collaborated with communities and other stakeholders, listening closely to ideas about how to design a range of elements of the CEIP. Today’s proposal keeps that conversation moving forward,” Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, said in a statement.

The plan includes changes from earlier an version, which was outlined in the agency’s Federal Plan released last year. EPA yesterday proposed that in addition to wind, solar, and energy efficiency projects in low-income communities, geothermal energy, hydropower and solar installations in low-income communities may also be eligible for early credit in the form of carbon allowances or credits.

EPA would set aside 300 million short tons of CO2 emissions for this purpose, intended for use in a larger carbon-trading program.

Also in the proposal, EPA defended its decision to continue releasing information on how states can comply with the Clean Power Plan under the Supreme Court stay.

“The EPA has not been enjoined by any court from continuing to work with state partners in the development of frameworks to reduce CO2 emissions from affected [electricity-generating units],” it stated.

The proposal also shows that EPA is not ready to say the deadlines around the Clean Power Plan’s implementation will shift because of the high court’s decision.

“The Supreme Court’s orders granting the stay did not discuss the parties’ differing views of whether and how the stay would affect the Clean Power Plan’s deadlines, and did not expressly resolve that issue,” the proposal stated. “In this context, the legal effect of the stay on the Clean Power Plan’s deadlines is ambiguous, and the question of whether and to what extent tolling is appropriate will need to be resolved once the validity of the Clean Power Plan is finally adjudicated.”

‘Stay means stay,’ says W.Va. AG

Sen. Jim Inhofe (R-Okla.), an opponent of EPA’s climate rule, released a statement yesterday calling for states to ignore the CEIP, calling it a “last-ditch effort to save the president’s legacy carbon mandates.”

“The agency has no respect for the rule of law or decisions from the Supreme Court of the United States and would rather progress a political priority at the expense of American taxpayers,” Inhofe said. “The highest court in the land has already ruled that EPA’s activities are on legally vulnerable ground and states heeding the court’s direction should not fear penalty.”

EPA’s critics have blasted the agency’s continued work on the Clean Power Plan and its unwillingness to say whether the climate rule’s deadlines will change. Opponents have also called on states to “put their pencils down” and stop the planning that would be necessary to comply with the rule.

“Stay means stay. EPA’s continued work on its unlawful Power Plan amounts to wasted effort and money,” West Virginia Attorney General Patrick Morrisey, who is leading a multistate lawsuit challenging the rule, said in a statement.

Morrisey added his office “will closely review the proposal and take appropriate action.”

Attorneys general from states challenging the Clean Power Plan in court, including Morrisey, have indicated they will not pursue a separate legal action against EPA for moving forward on proposals like the CEIP (ClimateWire, May 24).

The Clean Power Plan’s supporters praised the proposal’s release. They noted that states in support of the rule have asked EPA for additional information on the climate rule, including more information on the Clean Energy Incentive Program.

“By moving ahead with this proposal, EPA is providing valuable information and guidance for companies and state policymakers that want to harness this voluntary opportunity to reduce pollution and catalyze investment in clean energy solutions,” Pam Kiely, senior director of regulatory strategy for the Environmental Defense Fund, said in a statement.

Matt Stanberry, vice president of market development for Advanced Energy Economy, said, “Our view on this is that we are happy to see EPA move forward on the Clean Energy Incentive Program.

“I think it wasn’t necessarily a guarantee that they would,” he added.

Geothermal, hydropower advocates celebrate

The American Wind Energy Association also offered early praise for the proposal, although the group said it was still reviewing the details.

“The program will result in additional environmental benefits — through carbon reductions before state emission obligations kick in — and, in turn, provide states the opportunity to meet their ultimate emission targets on a smoother glide path,” Rob Gramlich, a senior vice president, said in a statement.

The addition of geothermal and hydropower to the CEIP proposal is a significant change. EPA previously hinted it was not likely to allow other forms of renewable technologies to qualify under the program (ClimateWire, Nov. 12, 2015). The announcement was cheered by advocates for those technologies.

“We applaud the EPA for proposing to include geothermal power in its Clean Energy Incentive Program under the Clean Power Plan,” stated Geothermal Energy Association Executive Director Karl Gawell.

LeRoy Coleman, a spokesman for the National Hydropower Association, also said his organization was pleased with the change.

“States are searching for clean energy solutions to meet their goals, and CEIP will help to lower the barrier to greater investment in hydropower,” Coleman said.

Solar projects in low-income communities will also be eligible for early credit, marking another change.

Additionally, the proposal states renewable energy projects will be eligible for early credit when they begin operating, rather than when construction begins as EPA had initially floated. The agency set Jan. 1, 2020, as the date when renewable energy projects will be eligible for credit.

The proposal delineates that half of the pool of allowances or credits will be available to low-income projects and the other half will be for renewable energy projects. It also restricts states’ ability to use allowances or credits that are not used by other states.

EPA will take comments on the CEIP proposal for 60 days after it is published in the Federal Register. The agency will also hold a public hearing on the proposal in Chicago on Aug. 3.

This story also appears in EnergyWire.