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**132 Military Highway Preston, CT 06365**

**Ph: 860-889-4900, X 135 Fx: 860-889-5300**

June 5, 2002

Office of Policy and International Affairs

Office of Electricity and Natural Gas Analysis

PI-23

Attention: Voluntary Reporting Comments

U.S. Department of Energy

Forrestal Building, Room 7H-034

1000 Independence Ave, SW

Washington, D.C. 20585

Re: Voluntary Reporting of Greenhouse Gases Program (VRGGP)

Comments of American Ref-Fuel Company

On behalf of American Ref-Fuel Company (Ref-Fuel), I am pleased to offer
the following comments concerning possible modifications to the
Department of Energy (DOE) Voluntary Reporting of Greenhouse Gases
Program (VRGGP). Ref-Fuel owns and operates six municipal solid
waste-to-energy (WTE) facilities in the northeastern U.S. WTE provides
significant greenhouse gas (GHG) reduction benefits through the
following two mechanisms:

1\) As a renewable energy source, WTE displaces fossil fuel combustion,
and;

2\) As a waste management option, WTE eliminates the generation of
landfill methane.

For the past several years, in conjunction with our industry trade group
the Integrated Waste Services Association (IWSA), we have reported and
quantified WTE's contribution to greenhouse gas reductions under the
DOE's current 1605(b) program. Ref-Fuel's comments here reflect the
knowledge that we have gained by working with the DOE on this reporting.
All of our comments are related to the reporting and quantification of
greenhouse gas reductions achieved by the use of renewable energy in
general and WTE in particular. Where applicable, the relevant section of
the May 6. 2002 Federal Register Notice of Inquiry (NOI) is identified.

Section III.D: Technical Issues: The quantification method for
determining GHG emissions and GHG reductions from WTE should follow the
basic procedure used by the DOE and the IWSA in the 1605(b) program
during the past several years. This approach is correct because it
establishes GHG emissions and reductions from WTE in the context of both
waste management and power generation. It is similar in concept to a
recent USEPA analysis of GHG emissions of various waste management
scenarios including WTE, landfills, recycling and composting. This study
was developed under the direction of the USEPA's Air Pollution
Prevention and Control Division, Office of Research and Development
(ORD). The EPA ORD directed the development of a computer-based decision
support tool for waste management and will soon publish a paper entitled
"The Impact of Municipal Solid Waste Management on Greenhouse Gas
Emissions in the United States". The quantitative analysis used for this
project was reviewed cooperatively by the USEPA, the U.S. Conference of
Mayors, the IWSA, the Solid Waste Association of North America (SWANA)
and other stakeholders.

On a more general note, Ref-Fuel believes that specific GHG measurement
and estimation techniques do need to be identified and prescribed for
the majority of reported GHG reduction programs. If the ultimate goal is
to provide a national registry that provides the basis for transferable
credits and/or protection under future regulatory GHG initiatives, then
uniform methodologies should be established for similar situations.
Otherwise, different reporting entities could use different assumptions,
methods and emission factors, which would compromise the utility and
acceptability of the program as a whole. There can and should still be a
wide variety of different methodologies for determining emissions and
reductions, given that there are a wide variety of different ways of
reducing GHG emissions. However, each type of industry and each type of
GHG reduction calculation should be consistent. Any guideline developed
as a result of the current endeavor can include a procedure to update or
add new methods through a formalized process.

Section III.C. -- Avoided Emissions: As stated in the May 6 NOI, the
current GHG Registry includes avoided emissions as quantifiable GHG
reductions. Ref-Fuel believes strongly that this treatment of avoided
emissions is essential and that it should continue in any future DOE
program. Furthermore, quantifiable avoided emissions should be
recognized as transferable emission reduction credits. Avoided emissions
are real on a national or global scale over a period of years, even if a
specific emission reduction can not be associated with an action that
creates avoided emissions. In many cases, a requirement to identify the
specific emission reduction would mean having to prove a negative. For
example, solid waste that is combusted by a WTE facility over several
years would otherwise have been sent to a landfill, where it would
eventually produce methane gas. In addition, the need for fossil fuel
generation capacity is reduced by the use of WTE. However, the WTE
entity can not usually identify the specific landfill that is not built
to receive that waste, and can not identify the specific fossil fuel
capacity that is not built due to decreased demand, and can therefore
not show specific reductions. A non-emitting or low-emitting renewable
energy technology would have the same problem in having to identify the
high-emitting capacity that is not built over a period of time. This
situation is similar to the "but for" scenarios described in the current
VRGGP General Guidelines, except that those scenarios assume that the
GHG-reducing activity and the associated avoided emissions are under the
control of the same entity. In the case of WTE and some other renewable
technologies, the use of the technology itself creates GHG emissions
that would not have otherwise existed, so the reporting entity's
emission are actually higher than they would have been. However, the GHG
emissions on a national or global scale are less than they would have
been. Given the complexity and potential uncertainty of such
estimations, the use of specific prescribed calculation methods, as
discussed above, would be even more important when estimating avoided
emissions. A common set of assumptions would have to be used, such as
the composition of the fuel mix being displaced by low-emitting
renewable energy.

Section III.C -- Transferable credits and transferring ownership of
reductions: The question of ownership of GHG reduction credits can be
complicated when the reporting entity creates avoided emissions or
indirect emission reductions. Ref-Fuel believes that any GHG Registry
should attribute ownership of avoided GHG emission reduction credits to
the entity that creates the avoided emissions. For example, the owners
and operators of a renewable energy facility should by default own the
GHG emission reduction credits that are estimated to be generated by the
facility. The developers of such a project have provided the financing
and expertise, and have assumed the project's risk. Ownership rights to
the GHG emission reduction credits would provide certainty on the issue
and increase the incentive for renewable energy development. To attempt
to distribute ownership of avoided GHG reduction credits to sources
outside of the reporting entity that may be affected by the action would
generally be overly complicated, and it could provide credits to
entities that have taken no action whatsoever to reduce GHG emissions.
Entities that purchase the energy from a renewable energy project are
not purchasing the GHG reduction credits, unless such an agreement is
specified by the power purchase contract.

Section III.C -- Level of Reporting: As discussed above, Ref-Fuel
believes that reporting under the VRGGP should include emissions
avoidance as well as direct emission reduction projects. Both types of
projects (as well as carbon sequestration, which we have not addressed)
should be subject to prescribed procedures for measurement and
estimation, and emission reductions from both types should be acceptable
for transferable credits. Ref-Fuel also believes that avoided emission
reductions must be acknowledged in light of future climate policy. In
the case of renewable energy projects, including WTE, avoided GHG
emissions are an inherent part of the technology. Further GHG reductions
from WTE are not possible. By reporting these avoided emission reduction
credits under the 1605(b) program, WTE facilities should not be
penalized under any future GHG programs that require additional GHG
reductions.

Section III.C -- Baselines (or reference cases) definition. In general,
the VRGGP General Guidelines identifies a baseline period of 1987 --
1990. Direct emission reductions achieved prior to this date are
generally not eligible as reportable reductions. This type of "hard
date" baseline is not appropriate for WTE. WTE emission reductions are
avoided emissions, not direct reductions. In addition, the reduction of
landfill methane generation from the use of WTE is not contemporaneous
with the use of a specific unit of waste as fuel. A ton of waste
combusted as fuel today in a WTE facility would otherwise be landfilled
and generate methane several years in the future over a long period of
time. The current 1605(b) methodology for WTE, and the USEPA analysis
discussed above, base GHG emission reductions on each ton of used as
fuel in a WTE facility. In this way the calculation of a reference case
is simplified. The amount of waste managed and the amount of electricity
generated by a WTE facility is accurately measured. For each ton of
waste, a GHG credit is calculated and assigned to the WTE facility.

In conclusion, Ref-Fuel believes that the VRGGP is a strong program that
can become the national GHG emissions registry for future programs. We
believe that standardized procedures for quantifying GHG emissions and
emission reductions for the wide variety of reported activities are
needed in order to ensure consistency and verifiability. These
procedures should follow existing programs where possible, or they
should be developed with input from affected stakeholders. It is also
important for the DOE to continue to recognize avoided emissions and
indirect emission reductions as valid, transferable GHG emission
reductions. This type of recognition would provide certainty for
independent renewable energy projects such as WTE. Ownership of credits
from avoided emissions created by renewable energy projects should by
default reside with the entity that owns the renewable energy project,
not the purchaser of the energy. Finally, baseline determinations will
have to vary depending upon the type of project. In the case of
renewable energy projects, including WTE, the annual GHG benefits should
continue to be recognized each year regardless of the year of facility
construction.

Thank you for this opportunity to comment. If you have any questions,
please contact me at (860) 889-4900 x135.

Sincerely,

Derek Grasso

American Ref-Fuel Company

Manager of Regulatory Affairs

Cc: S. King

A. Szurgot

G. Gesell

J. Waffenschmidt