Energy Efficiency in the Clean Power Plan Opportunities for Virginia Mary Shoemaker Research Assistant Spring 2015 VAEEC Meeting May 11, 2015

The American Council for an Energy- Efficient Economy (ACEEE) ACEEE is a 501(c)(3) nonprofit that acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, & behaviors 50 staff; headquarters in Washington, D.C. Focus on end-use efficiency in industry, buildings, & transportation Other research in economic analysis; behavior; energy efficiency programs; & national, state, & local policy Funding: ◦Foundation Grants (52%) ◦Contract Work & Gov’t. Grants (20%) ◦Conferences & Publications (20%) ◦Contributions & Other (8%)

Today we’ll discuss Overview of the Clean Power Plan (CPP) Role of energy efficiency in the CPP Energy efficiency in Virginia in context of CPP 3

EPA’s Clean Power Plan EPA proposing to regulate carbon emissions from existing power plants under section 111(d) of the Clean Air Act. 17% reduction in GHG emissions by 2030 relative to 2012 levels, or 30% reduction by 2030 relative to 2005 levels Individually tailored state targets Allows for flexible approaches including energy efficiency!

Timeline of EPA and State Actions Spring - Summer 2015 EPA releases sample federal model plan for states Summer 2015 EPA releases final rule for existing power plants Summer 2016 Final state plans due to EPA (may request extension until Summer 2017) Summer 2017 Final multi-state plans due to EPA (may request extension until Summer 2018) Present - Summer 2016 State air agencies conduct stakeholder engagement

State Compliance Plans States develop and submit a written document or set of documents detailing all the things the state will do to reach its goal. Air agencies are most likely responsible for developing the plans, but other agencies will likely be brought in. States submit plans to regional EPA offices. Potential for EPA Federal Implementation Plan (FIP)

State Targets Source: National Conference of State Legislatures

State Targets States can opt for an emissions rate limit (lb/MWh) or an emissions cap (tons CO2). EPA determined that the best way to cost-effectively reduce emissions from existing power plants was through a system that includes 4 “building blocks”: 1.EE improvements at the plant – “supply-side EE” 2.Dispatch more gas and less coal 3.Renewables 4.End-use EE

What Can be in a Compliance Plan? The kitchen sink! Maybe not quite…. The 4 building blocks as EPA suggested The 4 building blocks in greater or lesser amounts than EPA suggested Activities beyond the 4 building blocks if the activity reduces CO2 from existing power plants

The multiple benefits of energy efficiency as a compliance option Low-cost and reliable resource Saves utility customers money Reduces multiple pollutants Boosts state economies 10

Comparing the costs of some compliance options

How Energy Efficiency Creates Jobs Source:

Efficiency Policies and Programs under 111(d) EPA seems to have a lot of comfort with ratepayer funded EE. Demand-side EE programs Energy Efficiency Resource Standards States can think outside the box! 13

ACEEE’s 2014 State Energy Efficiency Scorecard 14 Appliance and Equipment Efficiency Standards (4%) States have been doing EE for years, so it’s a tried and true method. Variety of ways states can plan for efficiency

State Scorecard Results

Virginia in the State Scorecard 35 th place12.5/50 points 16

Virginia in the Clean Power Plan Virginia rate reduction: 44% by 2030 Opportunity for job growth: between 54,000 and 122,000 jobs added as a result of compliance. 17

18 99% of EPA's goal achieved by selected measures Virginia: A Policy Scenario Impact of measures on emissions rate compared to EPA goal (as a percentage)

Impact of Clean Power Plan in Virginia Stakeholders: anyone who uses electricity Presents opportunities on many levels, for Utilities as their business model shifts, customer awareness of efficiency grows, and efficiency becomes a firm earnings opportunity Localities as they weigh in on programs and contribute towards state pollution savings 19

What can Virginia do right now? Identify existing programs and estimate their pollution reduction potential. Convene a variety of stakeholders to solicit input. Evaluate current regulatory structures and laws. 20

ACEEE Resources ACEEE 111(d) site National Association of State Energy Officials (NASEO) and ACEEE 111(d) Resource Hub Compliance templates Building codes CHP Financing EERS State and Utility Pollution Reduction Calculator (SUPR) Energizing Virginia: Efficiency First Technical assistance as needed! 21

Additional Resources E&E’s Power Plan Hub: Bipartisan Policy Center CPP Comments Map: map/ map/ NCSL -Summary of State Reactions to CPP: reactions-to-proposed-epa-greenhouse-gas-emissions-standards aspxhttp:// reactions-to-proposed-epa-greenhouse-gas-emissions-standards aspx -Energy and Environmental Legislation database: database.aspx database.aspx SEEA 111(d) Web Portal: initiatives/clean-air/ initiatives/clean-air/ Questions? Comments? Mary Shoemaker Research Assistant

Conclusion Clean Power Plan Opportunity for efficiency Pathways for efficiency in Virginia ESCOs, CHP, Building Codes, and annual savings target Engagement of utilities and municipalities Action steps! 23

Questions? Comments? Mary Shoemaker Research Assistant