1. Energy Efficiency (EE) & Renewable Energy (RE) in SIPs – EPA’s Roadmap and a Tour of Several States National Air Quality Conference Angie Shatas, U.S. EPA February 12, 2014 1

2. Goals EE/RE – the lay of the land EPA’s Roadmap Touring a few states 2

3. What is EE/RE? Energy Efficiency & Renewable Energy policies and programs Require parties to use or fund EE/RE through regulation, statute or Public Utility Commission (PUC) order Increase adoption of energy efficient practices  End-user education and incentives (e.g., consumer awareness and rebate programs) Increase production and use of RE sources (e.g., solar, wind, biomass) Renewable Portfolio Standards (RPS) and Energy Efficiency Resource Standards (EERS) can be state requirements that include any of the above 3

4. At-a-glance 4 States are adopting EERS Primarily for cost savings  lower electricity bills Co-benefits: emissions reductions (NOx, SO2) State trends in Renewable Portfolio Standards

5. A current map of state EE/RE policies 5 Mandatory - 24 Voluntary - 6 Mandatory - 29 Voluntary - 9

6. Elements for Success when incorporating EE/RE in SIPs State-wide policies produce greater potential emission benefits Dialogue between air and energy agencies Energy agencies provide prospective view of energy savings (for SIP submittal) and retrospective view (verification) Quantification tools to determine if and to what extent an EE/RE initiative is affecting a particular nonattainment area 6

7. Past Experiences with EE/RE in SIPs 2004 EE/RE guidance Feedback from states The expected SIP credit was not worth the analysis effort. Documentation requirements were burdensome. Achievable emissions reductions were not clear. More detailed EPA guidance needed. 7

8. EPA’s Roadmap Help states include EE/RE in SIPs Roadmap Clarifies existing guidance Lays out four pathways for SIP credit Identifies quantification approaches Resources/Tools Baseline analysis - Projected energy impacts of “on- the-books” state EE/RE policies AVoided Emissions and geneRation Tool (AVERT) - emissions quantification (translates EE/RE to emissions) Frequently Asked Questions

9. 4 Pathways BaselineControl Strategy Emerging/ Voluntary Measures Weight of Evidence Emerging Voluntary Types of ProjectsFor “on the books” policies; Best on a state-wide or regional basis For “on the way” policies For locally-based activities; can be bundled Any SIP Credit LimitNone 6% of total required emission reductions (3% mobile + 6% other) 6% of total required emission reductions (3% mobile + 6% other) No credit taken but do get emissions benefits EnforcementState enforceable ** but not Federally enforceable Federally enforceable against the responsible party* Enforceable against the source Not enforceable against the source or implementing party None If SIP reductions do not materialize Air agency required to make up for emission shortfall; CAA SIP call Responsible party required to comply State responsible for reductions SIP revision Level of documentation Significant analysis: show reductions in place for planning period; quantify impacts; ensure no double counting Significant analysis: show reductions are permanent, enforceable, quantifiable, surplus Moderate: show reductions are permanent, enforceable, quantifiable, surplus Moderate: show reductions are permanent, enforceable, quantifiable, surplus Range: depends on level of analysis 9 * May be the load serving entity required to implement EE/RE. ** If a municipality has initiated a measure, then the state may delegate responsibility to the municipality.

10. Baseline Analysis – EE/RE Policies in AEO 2013 Federal appliance standards State building codes Direct federal spending on EE Renewable portfolio standards (RPS) – 29 states and DC as of Nov 2012 EE/RE Policies Explicitly Included in AEO 2013 Energy Efficiency Resource Standards (EERS) – 25 states Other EE program funding (in states without EERS policies) – 5 states Renewable Portfolio Standards (RPS) – 2 states between Dec ’12-Jun ’13 EE/RE Policies NOT Explicitly Included in AEO 2013 10 Policy Assessment Criteria Adopted in state legislation or Public Utility Commission (PUC) order (i.e. “on- the-books”) Goal: EPA and most states use the AEO 2013 energy policy assumptions in their SIP baseline emission projections.

11. Quantification – from Basic to Sophisticated Basic eGRID region non-baseload emission rates Sophisticated Energy Modeling 11 End use demand Energy Model User-defined constraints Technology data Fuel data Emission factors Environmental regulations Economic parameters Intermediate Historical Hourly Emissions Rates

12. AVERT EPA-developed quantification tool Addresses a key reason states have not implemented previous EE/RE SIP guidance Simulates dispatch to predict hourly changes in generation and emissions (NO x, SO 2 and CO 2 ) at electric generating units (EGUs) due to EE/RE Uses actual data reported to EPA’s Clean Air Markets Division (CAMD) through Acid Rain Program 12

13. 13 WA OR CA NV UT ID MT WY CO AZ NM TX OK KS NE SD ND MN WI IA MO ILIN MI OH KY TN AR LA MS ALGA FL SC NC VA WV PA NY ME NH VT MA RI CT NJ DE MD State with active interest State with interest Current Engagement with States State with Ozone Advance area(s)

14. States on the way - Maryland Pathway: Weight of Evidence Ozone attainment SIP for moderate area (due July 2015) Participant in NESCAUM pilot project EE/RE policies and programs in place  Maryland Renewable Portfolio Standard  EmPower Maryland energy conservation program  Regional Greenhouse Gas Initiative (RGGI)  Transit and smart growth initiatives  Green building initiatives  Electric vehicle initiatives 14

15. States on the way – New York Pathway: Control SIP and timing: TBD Participant in NESCAUM pilot project EE/RE policies and programs in place  Combined Heat and Power – also for boiler MACT compliance  NY-Sun Initiative – public/private partnership to increase solar capacity  Build Smart NY – reduce average energy usage in NY public buildings by 20%  Renewable Portfolio Standard  Energy Efficiency Resource Standard 15

16. States on the way - Massachusetts Pathway: Baseline emissions projection SIP and timing: TBD Participant in NESCAUM pilot project EE/RE policies and programs in place  Renewable Portfolio Standard  Energy Efficiency Resource Standard 16

17. Other states on the way – North Carolina, Kentucky, Utah, Louisiana North Carolina  Looking at ozone reductions  In place: Renewable Portfolio Standard Kentucky  In place: Voluntary energy efficiency targets through PUC orders Utah  Case study underway  Looking at PM2.5 emission reductions  In place: Renewable Portfolio Standard Louisiana  Ozone Advance areas  In place: local energy efficiency projects 17

18. For More Information: Angie Shatas, EPA OAQPS 919-541-5454 | shatas.angie@epa.govshatas.angie@epa.gov Robyn DeYoung, EPA OAP 202-343-9080 | deyoung.robyn@epa.govdeyoung.robyn@epa.gov http://www.epa.gov/airquality/eere/ - EE/RE Roadmap manual - Frequently Asked Questions - AVERT 18