1. Clean Power Plan Training Conducted for: Environmental Justice Leadership Forum on Climate Change and Building Equity and Alignment Initiative Coordinated by: Nicky Sheats, Esq., Ph.D. Director, Center for the Urban Environment, John S. Watson Institute for Public Policy of Thomas Edison State University and member of the New Jersey Environmental Justice Alliance Cecilia Martinez, Ph.D Director of Research Programs, Center for Earth, Energy and Democracy

2. Table of Contents The Clean Power Plan and the U.S. Electricity System Dr. Cecilia Martinez Climate Change Mitigation Policy and Emissions Reductions for Environmental Justice Communities Dr. Nicky Sheats Clean Energy Incentive Program

3. The Clean Power Plan and the U.S. Electricity System Dr. Cecilia Martinez Director of Research Programs Center for Earth, Energy and Democracy

4. U.S. Electricity System The current U.S. electricity system is comprised of: 145,000, 000 customers 19000 power plants 55,000 substations 476,000, HVL 6,000,000 distribution lines

5. Source: Energy Information Administration

6. WESTERN Interconnection TEXAS Interconnection EASTERN Interconnection Source: ERCOT

7. Source: Energy Information Administration

8. Which power plants are covered by the Clean Power Plan? About 3000 plants Plants with generating capacity > 25 MW Plants operating in 2012 Plants under construction prior to January 8, 2014 Plants beginning construction after January 8, 2014 covered under the New Source Performance Standard (NSPS) Power Plants http://public.tableau.com/profile/cmart225#!/vizhome/CLeanPowerPlanEGUbyState/Dashboard1

10. GENERATION TRANSMISSION DISTRIBUTION CLEAN POWER PLAN

11. Federal – State –Tribal Complexity Federal EPA Federal Energy Regulatory Commission Department of Energy State Regulatory Agency (or designee) Energy Planning Agency Public Utilities Commission (PUC) Public Service Commission (PSC) State Law and Policy (e.g., Renewable Portfolio Standards, State Climate Policy Tribal (3 EGUs) Tribal Government Tribes “OPT” to do a Plan; if opt out the Federal government through EPA will implement Tribes can produce “zero carbon emitting” electricity and enter into the ERC market.

12. CEIP August 2015 September 2016 September 2018 202020212022 20242025202720282029 2030 CPP Released SIP or Extension DUE States with Granted Extensions SIP DUE Interim Period 1 Interim Period 2 Interim Period 3 States Must be in Full Compliance in 2030 Milestone Report Due July 21 st CEIP Projects with approved State plans earn credits In 2020 and 2021 State “Glide Path”

13. Best System of Emission Reduction (BSER) Performance Standard Building BlockCalculationExamples #1. Improved Efficiency at the Power Plants Increases the efficiency of the power plant (needs less fuel to generate electricity) Improve operations #2. Shifting Generation from “Higher Emitting” power plants to “Lower Emitting” Natural Gas Power Plants Substitute generation from existing natural gas units Increase generation at natural gas units (NGCC) #3. Shifts to “Clean Energy” Substitute from new zero- emitting generating technologies Increase generation from solar, wind.

14. Best System of Reductions: The “3 Building Blocks” #1 Power Plant Efficiency #2 Shift to Natural Gas #3 Shift to zero carbon NATIONAL STANDARD Fossil-fired Steam 1305 lbs/MWh Combustion Turbine 771 lbs/MWh

15. STATE PLAN DESIGN OPTIONS Emission Standards Federally Enforceable Rate-Based Mass-Based State Measures Measures not included as fed enforceable standards Example: Renewable Portfolio Standards, Energy Efficiency Resource Standards Mass-based Single state (“Trading Ready”); Multi-State

16. Standards* State Targets (Goals) STANDARDS STATE FLEET of Power Plants STATE GOALS 1305 lbs/MWh 771 lbs/MWh # of Coal Plants in the State # of Gas Plants in the State RATE-Based Goal in CO2 lbs/MWh WHICH EPA CONVERTED TO: MASS-Based Goal in Total lbs CO2 * Also referred to as Guidelines The same standard applies to all plants across the country regardless of region

17. State Plan Compliance Options Natural GasEfficiencyRenewablesNuclearWaste to EnergyCarbon Capture and SequestrationTrading SchemesAnd ………….

18. Emission Standards Federally Enforceable Rate-Based Mass-Based TRADING READY Exchange Units Rate Based Emission Rate Credits (ERCs) Zero emissions/MWh Mass-Based Allowances Foundation of CPP is Carbon Trading Schemes

19. Clean Power Plan Summary The EPA calculated power plant standards based on the Best System of Emission Reductions (BSER) The Building Blocks used to determine the BSER Efficiency Improvements at affected coal fired plants Generation shift among affected plants Renewable generation Resulting Standards Coal: 1305 Combustion turbine: 771 The power plant standards were converted into State Goals

20. What qualifies as an ERC? “Zero- Carbon Emitting Electricity” Renewable electric generating technologies: wind, solar, geothermal, hydro, wave, tidal Qualified biomass Waste-to-energy (biogenic portion only) Nuclear power A non affected combined heat and power unit including waste heat power Demand side energy efficiency or demand side management A category identified in a State plan and approved by the EPA to generate ERCs

21. What CANNOT be used for an ERC? Measures that reduce emissions outside the electric power sector, including GHG offset projects representing reductions that occur in the forestry and agriculture sectors, transportation sector due to EV If biomass is an eligible source, SIP must include why the proposed feedstocks should qualify as an approach for controlling COP2 levels in the atmosphere.

24. CPP and EJ in the SIPs Meaningful community engagement Stakeholder processes “Encourage” to do EJ analysis Voluntary low-income CEIP “Encourage” monitoring

25. Some Challenges I Examples of how the CPP minimizes environmental justice considerations

26. Nicky Sheats, Esq., Ph.D. Director, Center for the Urban Environment, John S. Watson Institute for Public Policy of Thomas Edison State University and member of the New Jersey Environmental Justice Alliance Climate Change Mitigation Policy and Emissions Reductions for Environmental Justice Communities

27. The Premise Climate change mitigation policy should produce emissions reductions for Environmental Justice communities. Investigations have found that EJ communities are disproportionately exposed to unwanted land uses and environmental hazards, including air pollution. See Morello-Frosch et al. 2011; Ash et al. 2009; See also California EPA 2010; Bullard et al. 2007; Mohai and Saha 2007; Houston et al. 2004; Jarrett et al. 2001; Wernette and Nieves 1992.

28. More Detailed Premise Guaranteed emissions reductions in and near EJ communities; preferably with GHG co-pollutant reductions intentionally maximized, but reductions either way. Co-pollutant of concern: fine particulate matter should show reductions. Power plants that affect EJ communities should reduce emissions. EQUITY OR JUSTICE MEANS THAT:

29. More on Co- Pollutants Fine Particulate Matter (PM 2.5 ) is linked to premature death (200,000 estimated in 2005), cardiovascular disease, pulmonary disease, lung cancer. Nitrogen Oxides (NO x ) and sulfur dioxide (SO 2 ) also have some effects of their own, but are also precursors to PM and ozone. Ozone (O 3 ) is linked to premature death (10,000 estimated in 2005), asthma, reduced lung function. Hazardous Air Pollutants (HAPs) are linked to cancer; neurological disorders; and respiratory, reproductive and developmental disorders.

30. Potential Co-Pollutant and GHG Emissions from New Natural Gas Plant* Air ContaminantProposed Maximum Potential Emissions from NEC PSD Applicability Threshold PSD Applicable Carbon Monoxide483.70100Yes Nitrous Oxides139.1040Yes Sulfur Dioxide19.7340No Particulate Matter67.1725Yes PM 10101.2715Yes PM 2.597.65N/A Volatile Organic Compounds 24.9940No Lead.0002.6No Sulfuric Acid Mist10.557Yes Greenhouse Gases2,003,654100,000Yes New Jersey Department of Environmental Protection (2012). Data taken from permit application in Newark, New Jersey. Units are in TPY

31. Goal and Opportunities for the CPP Drive down concentrations of fine particulate matter and other GHG co- pollutants as low as possible. Fine particulate matter has no lower threshold for health benefits; that is lowering emissions continues to have health benefits Makes climate change policy immediately relevant to EJ communities.

32. Relationship Between Cumulative Impact & Percent Minority Relationship Between Cumulative Impact & Percent Poverty Relationship between Cumulative Impact and Socio-economic Indicators Grouped all block groups based on percent minority and poverty Calculated cumulative impact score for combined groups Cumulative impact scores increase steadily with increased percent poverty and minority

33. A Preliminary Screening Method to Estimate Cumulative Environmental Impact In a Presentation by the New Jersey Department of Environmental Protection to the Environmental Justice Advisory Council (December 2, 2009), the following indicators were used to estimate cumulative environmental impact NATA diesel (1999); NATA cancer risk; NJDEP benzene estimates; Traffic (all); Traffic (trucks); Density of major regulated sites; Density of known contaminated sites; Density of dry cleaners; Density of junkyards.

34. New Jersey Screen Indicators NATA diesel (1999); NATA cancer risk; NJDEP benzene estimates; Traffic (all); Traffic (trucks); Density of major regulated sites; Density of known contaminated sites; Density of dry cleaners; Density of junkyards.

35. Results:

36. The EJ Problem in the CPP The CPP Rule allows rate averaging and so does not mandate reductions at any specific facility; In this way it’s similar to carbon trading; Both leave equity to chance. Note: 1) CPP allows trading under either a rate based system or mass based system; 2) Do we need more on carbon trading or ERCs?

37. The Problem Under the CPP and carbon trading three things can happen to emissions (GHGs and co-pollutants) in EJ communities: Emissions can increase Emissions can stay the same Emissions can be reduced Note: Let’s talk more about framing our message.

38. More CPP Problems CPP talks about working with states to prevent disproportionate impacts and emissions increases but doesn’t say how. Does not talk a lot about obtaining reductions for EJ communities.

39. A Solution Plants located in and near EJ communities must reduce emissions, THEREFORE STATES MUST: Identify plants in EJ communities (look at proximity analyses); Require those plants to reduce.

40. Provided EJ SCREEN in Final Rule Demographic Percent “Minority” Percent Low Income Percent < High School Percent Linguistic Isolation Percent Under Age 5 Percent Over Age 64 Environmental Indicators Air (NATA) Air Other – Traffic Dust/Lead paint Waste/air/water Water

41. EPA EJ Screen for NJ Plants Subject to CPP

42. Issues Connected to Solutions What is an EJ community? (> 50%; > state average) Reduce by how much? (sub-category rate; overall state rate; amount of estimated reductions – 32%; some other fixed percentage – 10%, 25%, 33%) How can RE and EE threaten emissions reductions? Incentive Program? What do you think?

43. Equity and Justice Equity/Justice should be part of climate change mitigation policy. Equity/Justice should not left to chance or addressed later. The market should not make our equity/justice decisions.

44. Recommendations for Framing the EJ Message Focus on: Achieving emissions reductions for EJ communities; The market should not be making our equity decisions. As opposed to possible emissions increases. What do you think?

45. How Important are Equity and Justice to you? Our Challenge: Make obtaining emissions reductions for EJ communities as important as obtaining GHG reductions.

46. Clean Energy Incentive Program Dr. Cecilia Martinez Director of Research Programs Center for Earth, Energy and Democracy

47. Clean Energy Incentive Program Reward early investment CEIP is optional but States must include intention in SIP Main elements of the CEIP Project developer can approach state, state award additional ERCs or additional allowances EPA will match with a matching pool of allowances or ERCs maxed at 300 million tons EPA will pro rate state’s allocation based on level of reductions required

48. (CEIP) Energy Efficiency “Incentivizes” energy efficiency in low-income communities The CEIP is considered an “early launch” program because emission reduction credits will be earned in 2020-2021 (CPP Compliance begins in 2022) Eligibility: Projects that begin construction AFTER state submits plan. Operational in 2021 and 2022 EPA provides “matches” in Emission Rate Credits or Allowances (EPA will provide 2 for every 1 earned) EPA to 300 million tons allocation to each state based on pro rated state targets

49. CEIP Renewable Energy Part of Clean Energy Incentive Program “early launch” Solar and Wind Projects Eligibility: Projects that begin construction AFTER state submits plan. Operational in 2021 and 2022 EPA provides “matches” in Emission Rate Credits or Allowances Up to 300 million tons allocation

50. “INCENTIVIZING” Low-Income Investment Energy Efficiency EE in Low Income Communities EPA Match EPA will provide a matching ERCs (or the equivalent number of allowances) for each earned. For every one MWh in end-use demand savings achieved, the project will receive one ERC from the state (or the equivalent number of allowances). The result is 2 credits for each MWh of avoided carbon-generated electricity

51. Renewable EnergyMWh Wind or SolarEPA Match For every MWh generated, the project will receive half an ERC or Allowance from the state EPA will provide a half ERC or Allowance match Wind and Solar Renewable Energy Wind or solar projects will receive 1 credit for 1 MWh of generation (i.e., half early action credit from the state and half matching credit from the EPA) Renewable Energy credits are universal and not targeted to low- income communities

52. Electronics Clothes Washer 1% Freezers 2% Dishwashers 2% Computers 2% Cooking 2% Furnace Fans 3% Source: Energy Information Administration Electricity consumption in Homes (quadrillion BTU)

53. Low Income Population Diverse Housing Characteristics Source: Serj Berelson, Opower

54. Low Income Electricity Consumption Source: Serj Berelson, Opower

55. Thank You Contact Information for Trainers: Dr. Nicky Sheats Center for the Urban Environment, John S. Watson Institute for Public Policy at Thomas Edison State University New Jersey Environmental Justice Alliance newbian8@Verizon.net Dr. Cecilia Martinez Center for Earth, Energy and Democracy cmartinez@ceed.org