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A Western Perspective on the Clean Power Plan

October 19, 2015 by Jeffrey J. Cook

After the Labor Day weekend, state air quality officials, energy office personnel, utility commissioners, utilities, and a host of other western regional stakeholders converged in Denver, Colorado for a workshop on the Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP) hosted by Colorado State University’s Center for the New Energy Economy (CNEE). The goal of the workshop and previous workshops convened by CNEE, was to build a common understanding among western regulators, utilities, and other stakeholders around the CPP and critical issues that states will face in thinking through compliance.

The September workshop focused on the content of the final CPP and its implications for western states. Presentations from CNEE, Georgetown Climate Center, and the Great Plains Institute kicked off the workshop with a broad discussion of compliance pathways and the EPA’s proposed federal plan.

Representatives from state governments offered their perspectives on the implications of the CPP, including opportunities and challenges for compliance in their respective states and, more generally, the West. Pacific Gas & Electric (PG&E) presented initial Integrated Planning Model (IPM) results regarding the impacts of the plan on the Western Interconnection. This “first cut” analysis suggests that the West is regionally well positioned for compliance given existing policy but some states will have a more difficult path than others.

A major theme throughout the discussion was that the actual impacts of the CPP on the West will not be fully known until state plans begin to take shape. How the plans look will also be contingent on further guidance from the EPA. Given this reality, a significant portion of the workshop discussion focused on clarifying the content of the EPA’s final rule with EPA Acting Assistant Administrator for the Office of Air and Radiation, Janet McCabe, and Associate Assistant Administrator, Joe Goffman, both in attendance.

Of particular interest to participants—and likely renewable and efficiency practitioners—is forthcoming guidance on the Clean Energy Incentive Program (CEIP). How the matching and allocation process is finalized could influence the value of this clean energy mechanism for certain states. Currently, the allocation of potential CEIP credit in the proposed federal plan is distributed proportionally based on each state’s required emissions reductions, thus, it is unequal among the states. In addition, participants were interested in learning more regarding how to devise interstate trading programs that would be approved by the EPA. The PG&E preliminary modeling suggested the West could be a net seller of allowances, which may spark more interest in trading and renewable generation in the West.

Going forward, CNEE will continue the dialogue with an increasing focus on more specific compliance and implementation issues. The presentation materials and resources provided to workshop participants are publicly available at http://www.westernstate111dplans.com.

Tags: Policy - Interconnection Policy