Roadmap for Incorporating Energy 

Efficiency/Renewable Energy

Policies and Programs into State and Tribal 

Implementation Plans

Appendix C: Existing EPA Energy 

Efficiency/Renewable Energy Guidance
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EPA-456/D-12-001d

July 2012

Roadmap for Incorporating Energy Efficiency/Renewable Energy

Policies and Programs into State and Tribal Implementation Plans

Appendix C: Existing EPA Energy Efficiency/Renewable Energy Guidance

By:

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, North Carolina

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, North Carolina
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ACKNOWLEDGMENTS

We would like to acknowledge substantial contributions from members of an inter-office EPA 

team that included the Office of Atmospheric Programs, the Office of Policy Analysis and 

Review, the Office of General Counsel and Regions 1 and 6. This document also reflects 

comments received from a number of stakeholders, including state and local air quality 

agencies.
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Contents

SECTION C.1: INTRODUCTION................................................................................................................................... C-4

SECTION C.2: EXISTING GUIDANCE ON BASELINE PATHWAY ................................................................................... C-4

SECTION C.3: EXISTING GUIDANCE ON CONTROL STRATEGY PATHWAY ................................................................. C-5

Quantifiable ........................................................................................................................................................... C-5

Surplus................................................................................................................................................................... C-5

Enforceable............................................................................................................................................................ C-6

Permanent............................................................................................................................................................. C-7

SECTION C.4: EXISTING GUIDANCE ON EMERGING/VOLUNTARY MEASURES PATHWAY ........................................ C-7

How a State Can Receive SIP Approval for Emerging/Voluntary Measures .......................................................... C-8

Four Criteria for SIP Emerging/Voluntary Measures ............................................................................................. C-8

Quantifiable ....................................................................................................................................................... C-8

Surplus............................................................................................................................................................... C-9

Enforceable........................................................................................................................................................ C-9

Permanent....................................................................................................................................................... C-10

Emission Reduction Credit................................................................................................................................... C-10

Bundling Emerging/Voluntary Measures............................................................................................................. C-11

SECTION C.5: EXISTING GUIDANCE ON WOE PATHWAY ........................................................................................ C-11

REFERENCES............................................................................................................................................................. C-12
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SECTION C.1: INTRODUCTION

This appendix provides brief information on existing U.S. Environmental Protection Agency 

(EPA) guidance that relates to energy efficiency/renewable energy (EE/RE) and state 

implementation plans (SIPs). It is organized by pathway. The EPA has issued five guidance 

documents related to incorporating EE/RE programs in SIPs:

Guidance on State Implementation Plan (SIP) Credits for Emission Reductions from 

Electric-Sector Energy Efficiency and Renewable Energy Measures, 

http://www.epa.gov/ttn/oarpg/t1/memoranda/ereseerem_gd.pdf, August 2004 

(referred to in this appendix as EE/RE Measures Guidance).

Guidance on Incorporating Emerging and Voluntary Measures in a State Implementation 

Plan (SIP), 

http://dnr.mo.gov/env/apcp/sipworkgrp/control_strategy_wrkgrp/VoluntaryControlMe

asuresPolicyEPA.pdf, September 2004 (referred to in this appendix as 

Emerging/Voluntary Measures Guidance).

Guidance on Incorporating Bundled Measures in a State Implementation Plan, 

http://www.epa.gov/ttn/oarpg/t1/memoranda/10885guideibminsip.pdf, August 2005

(referred to in this appendix as the Bundled Measures Guidance).

Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air 

Quality Goals for Ozone, PM2.5, and Regional Haze, 

http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf, April 2007

(referred to in this appendix as the Modeling Guidance).

Guidance on Emission Projections, Volume X,

(http://www.epa.gov/ttnchie1/eiip/techreport/volume10/x01.pdf, 1999 (referred to in 

this appendix as Emissions Projection Guidance). 

The text included in this appendix consists mostly of direct excerpts from these documents. In 

some cases, changes have been made to improve the readability of the text. In other cases, 

corrections have been made to the text to ensure its accuracy.

SECTION C.2: EXISTING GUIDANCE ON BASELINE PATHWAY

Several guidance documents provide recommendations on how to estimate emissions for 

future years. Among point source emissions, there are two major subsets: electric generating 

utilities (EGUs) and non-EGUs. The Clean Air Markets Division (CAMD) of the EPA uses the 

Integrated Planning Model (IPM)1to model emissions trading programs and to predict futureyear emissions from EGUs. Other models and approaches may exist and could be used for 

estimation of future-year emissions. (Appendix E provides more information on what factors 

other approaches need to consider for the baseline pathway.) In addition, EPA Emissions 

Projection Guidance has general information on emission projections, which provides 

important factors that state, tribal and local agencies should consider when projecting 

emissions results for future attainment years. 

 

1

For more information on IPM, go to: http://www.epa.gov/airmarkets/progsregs/epa-ipm/index.html. 
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SECTION C.3: EXISTING GUIDANCE ON CONTROL STRATEGY PATHWAY

The EPA’s EE/RE Measures Guidance addresses the criteria needed for energy EE/RE measures 

to be considered approvable as a SIP control measure:

Quantifiable

Surplus

Enforceable 

Permanent

Quantifiable

The EE/RE Measures Guidance lists four steps to address when trying to quantify EE/RE 

measures:

Step 1: Estimate the energy savings that an energy efficiency measure will produce, or, 

for a renewable energy project, the amount of energy generation that will occur.

Step 2: Convert the energy impact in STEP 1 into an estimated emissions reduction. 

Step 3: Determine the impact from the estimated emission reduction on air quality in 

the nonattainment area.

Step 4: Provide a mechanism to validate or evaluate the effectiveness of the project or 

initiative.

Thus, the guidance indicates that the emission reductions need to be quantifiable and include 

procedures to evaluate and verify over time the level of emission reductions actually achieved. 

The emission quantification approaches in this guidance may be used to address this criterion. 

Evaluation and verification methods can be found in best practices materials on establishing 

and implementing EE programs provided by the National Action Plan for Energy Efficiency

(NAPEE).

2

 However, since there can be many types of EE or RE programs covering many 

different areas, alternative protocols may also be acceptable, and would be evaluated, as 

necessary, on a case-by-case basis.

Surplus

The EE/RE Measures Guidance indicates that emission reductions are surplus as long as they 

are not otherwise relied on to meet air quality attainment requirements in air quality programs 

related to your SIP. In the event that the measures to reduce utility emissions are relied on in a 

jurisdiction’s plan to meet air quality-related program requirements, they are no longer surplus 

and may not be used as an additional reduction to meet SIP emission reduction requirements, 

such as the attainment demonstration or Reasonable Further Progress (RFP). 

The importance of the surplus requirement in areas subject to a cap and trade program merits 

particular focus. To illustrate, if an EE program causes several EGUs that are part of a cap and 

trade program to scale back the amount of electricity they generate and, therefore, reduce 

 

2

For more information on NAPEE, go to: http://www.epa.gov/cleanenergy/energyprograms/suca/resources.html.
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overall emissions, then, absent additional limitations discussed below, it may be difficult to 

show that these reductions meet the “surplus” criteria for crediting the measure. This is 

because the units are still allowed to emit up to the same number of allowances in the program 

even though the amount of electricity they need to generate has been reduced. The EE or RE 

measure, in effect, allows the EGUs to comply with the cap and trade program with a slightly 

higher average emission rate and a theoretically lower allowance price. Therefore, the 

estimated emission reductions from the EE or RE measure would typically not be surplus, and 

would essentially be double counted if EPA permitted the allowances that were freed up by the 

measure to be used in the trading program and if EPA provided additional SIP credit for the EE

actions. 

The presence of a cap and trade program, however, does not necessarily prohibit the use of EE 

and RE measures by a state agency to achieve additional SIP reductions. One acceptable way of 

achieving additional emission reductions from EE and RE measures in the presence of a cap and 

trade program is through the retirement of allowances commensurate to the emissions 

expected to be reduced by the EE measures. The retirement of allowances, which amounts to 

lowering the cap, assures that the EE measures will achieve emission reductions that are 

surplus to the emission reductions under the cap and trade program. Another way is to clearly 

demonstrate that emissions will decrease in the area despite the cap and trade program and 

the ability of plants to sell more electricity to other areas. This demonstration will likely entail a 

detailed analysis of electricity dispatch and allowance markets to determine the specific impact 

of the measures on the system.

Enforceable

The EE/RE Measures Guidance indicates that EE/RE measures may be:

Enforceable directly against a source;

Enforceable against another party responsible for the energy efficiency or renewable 

energy activity; or

Included under our voluntary measures policy where the state would be responsible for 

assuring that the emission reductions credited in the SIP occur.

The EPA believes that most measures you may consider under the guidance would fall into the 

second or third categories listed above. EE or RE measures are unlike traditional control 

measures on stationary sources. There is typically a physical distance between where the 

measure is implemented and where the emission reductions occur, as well as a geographic 

distribution to the emission reductions. Since EGUs are interconnected in the electric grid, a 

reduction in energy demand or generation from a renewable resource will likely affect the 

operation and emissions of several fossil fired units in the system. The EE or RE measure itself 

may be enforceable against the entities undertaking the activity even though they are not 

responsible for the operation of the electric generators at which the emission reductions are 

estimated for purposes of the SIP. For example, you could require certain entities to purchase 

an amount of RE. If you rely upon such requirements within the SIP, then this measure could 

be enforceable against those entities required to purchase the RE electricity or to reduce 
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energy consumption, even if those entities are not responsible for the operation of the 

electricity generating units at which the emission reductions are expected to occur.

If the reductions are “enforceable directly against the source” or are “enforceable against 

another party responsible for the energy efficiency or renewable energy activity,” then the

reductions are considered enforceable if:

They are independently verifiable;

Violations are defined;

Those liable for violations can be identified;

The state and EPA maintain the ability to apply penalties and secure appropriate 

corrective actions where applicable;

Citizens have access to all the emissions-related and activity information obtained from 

the source;

Citizens can file suits against the source or responsible party for violations; and

They are practicably enforceable in accordance with EPA guidance on practicable 

enforceability.3

Permanent

The EE/RE measure should be permanent throughout the term for which the credit is granted 

unless it is replaced by another measure or the state demonstrates in a SIP revision that the 

emission reductions from the measure are no longer needed to meet all applicable statutory 

and regulatory requirements.

SECTION C.4: EXISTING GUIDANCE ON EMERGING/VOLUNTARY 

MEASURES PATHWAY

The EPA’s Emerging/Voluntary Measures Guidance describes an emerging measure as a new 

emission reduction or pollutant reduction measure that is more difficult to accurately quantify 

than traditional SIP emission reduction measures. The difficulty in quantifying the emission or 

pollutant reductions may be due to scientific, technological, or informational uncertainty. The 

ability to quantify reductions from emerging measures may necessitate development of a 

protocol based on assumptions and/or modeling to estimate the reduction impacts of the 

emerging measure. 

A voluntary measure is an action by a source that will reduce emissions of a criteria pollutant or 

a precursor to a criteria pollutant that the state could claim as an emission reduction in its SIP 

for purposes of demonstrating attainment or maintenance of the National Ambient Air Quality 

Standards (NAAQS), or RFP, but that is not directly enforceable against a source. The EPA’s

guidance also describes how states can identify individual voluntary and emerging measures 

and "bundle" them in a single SIP submission. 

 

3

EPA (1989) and EPA (1992).
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How a State Can Receive SIP Approval for Emerging/Voluntary Measures

The SIP submitted by the state to EPA:

Identifies and describes the measure;

Contains projections of emission or pollutant reductions attributable to the program, 

along with relevant technical support documentation:

o For emerging measures, a full discussion of the relevant best available science 

supporting the measure;

Enforceably commits the state to implement those parts of the measure for which the 

state or local government is responsible;

Enforceably commits the state to monitor, evaluate, and report at least every three 

years to the public and EPA on the resulting emissions effect of the emission or 

pollutant reduction measure;

Enforceably commits the state to remedy any SIP credit shortfall in a timely manner, if 

the program does not achieve projected emission reductions;

Meets all other requirements for SIP revisions under sections 110 and 172, and any 

other applicable sections, of the Clean Air Act (CAA); and

Undergoes public notice and comment (like any other SIP revision).

Four Criteria for SIP Emerging/Voluntary Measures

The Emerging/Voluntary Measures Guidance addresses the criteria needed for energy EE/RE 

measures to be considered approvable as emerging/voluntary measures:

Quantifiable

Surplus

Enforceable 

Permanent

Quantifiable

Emissions and emission reductions attributed to the measure are quantifiable if someone can 

reliably measure or determine them and replicate the results. Any uncertainty in the 

quantification should be addressed by following the guidance contained in the Economic 

Incentives Program4in section 5.2 (b). A voluntary measure should meet this provision and, if 

the measure is also an emerging measure, then it should meet the criteria for emerging 

measures.

For emerging measures, EPA’s policy provides flexibility for the quantification requirement. 

Some areas want to try new types of emission control or pollution reduction strategies. Some 

of these new strategies have a substantial chance to be as effective (and possibly more 

effective) than current measures in reducing criteria pollutant levels. The EPA supports and 

wishes to promote the testing of new emissions and pollutant control strategies. This policy 

provides a mechanism for states to receive provisional emission reduction credit in their SIP for 

 

4

EPA (2001).
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new emission control and pollutant reduction strategies that have the potential to generate 

additional emission reductions or air quality benefits. Provisional emission reductions or 

pollutant reduction strategies can become permanent through a SIP revision when postimplementation evaluations validate the amount of emission reductions achieved. 

“Provisional” in this case means the state may use particular emission reductions for RFP or 

other purposes before the quantification procedure has been fully validated. Even though EPA 

believes that these emission reductions can be used to fulfill CAA emission reduction 

requirements, if post implementation evaluations do not show that all the projected emission 

reductions have occurred, the state would need to reconcile the difference between the 

projected and actual emission reductions. In order to encourage emerging new programs with 

which EPA and the states do not have significant experience, but which are technically and 

scientifically sound, the Agency believes it is appropriate to allow quantification based on best 

available science or information where direct, empirically verified data are not available. In 

these circumstances, the state should quantify the pollution reduction based on the best 

knowledge currently available for the measure being considered. The state should develop a 

protocol based on a carefully considered determination of the activities that it is committing to 

undertake and the activities’ projected impact on pollution. The estimates may be based on 

modeling, on extrapolated experience for similar types of projects, or on another approach that 

is likely to yield a reasonable estimate of pollution reduction.

Surplus

Emission reductions used to meet air quality attainment requirements are surplus as long as 

they are not otherwise relied on in air quality-related programs relating to a SIP. For voluntary 

and emerging measures, EPA believes these reductions should also be surplus to adopted state

air quality programs, even those programs that are not in the SIP, such as a consent decree and 

federal rules that focus on reducing criteria pollutants or their precursors. For emission 

reductions used for attainment, RFP, maintenance or general conformity, the emission 

reductions cannot already be assumed for the same requirement, where the requirements are 

cumulative. An emission reduction may be used for more than one of these requirements. For 

example, emission reductions used to meet the RFP requirement may also be used for the 

attainment demonstration. However, emission reductions are not surplus if they have already 

been assumed in a program. In other words, states cannot claim emission reductions that are 

already assumed in the existing SIP, or that result from any other emission reduction or 

limitation of a criteria pollutant or precursor that the state is required to have to attain or 

maintain a NAAQS or to satisfy other CAA requirements. In the event that emission reductions 

relied on from a measure are subsequently required by a new air quality related program, such 

as those listed above, those emission reductions would no longer be surplus for this purpose.

Enforceable

While EPA has already stated that voluntary measures are not enforceable against the source, 

the state would be responsible for ensuring that the emission reductions credited in the SIP do, 

in fact, occur. The state would make an enforceable commitment to monitor, assess, and 

report on the emission reductions resulting from the voluntary measures and to remedy any 

shortfalls from forecasted emission reductions in a timely manner, as discussed below. 
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Emission reductions and other mandatory state or local actions are enforceable against the 

source if, for each source:

The emission reductions are independently verifiable;

Program violations are defined;

Those responsible for the violations can be identified;

For emerging measures, the state and the EPA maintain the ability to apply penalties 

and secure appropriate corrective action where applicable;

The emission reductions are enforceable in accordance with other EPA guidance on 

practicable enforceability;

For voluntary measures, the EPA maintains the ability to apply penalties and secure 

appropriate corrective action from the state where applicable and the state maintains 

the secure appropriate corrective action with respect to portions of the program that 

are directly enforceable against the source;

Citizens have access to all the emissions-related information obtained from the source; 

and

For emerging measures, citizens can file suits against sources for violations.

Permanent

The Emerging/Voluntary Measures Guidance indicates that an emission reduction strategy 

needs to continue throughout the term that the credit is granted unless it is replaced by 

another measure (through a SIP revision). Alternatively, the state can demonstrate in a SIP 

revision that the emission reductions from the measure are no longer needed to meet the 

criteria that apply to voluntary and emerging measures or any other CAA requirements.

Emission Reduction Credit

The EPA believes that it is appropriate to presumptively limit the amount of emission 

reductions allowed for approval under this policy. Although EPA concludes that emerging 

measures are consistent with the statute because all emerging measures will be accompanied 

with an appropriate enforceable backstop commitment from the state as described in this 

policy, EPA believes it is appropriate to limit these measures to a small portion of the SIP, given 

the untested nature of the control mechanisms. 

The presumptive limit is 6 percent of the total amount of emission reductions required for the 

RFP, attainment, or maintenance demonstration purposes. The limit applies to the total 

number of emission reductions that can be claimed from any combination of voluntary and/or 

emerging measures, including those measures that are both voluntary and emerging. The limit 

is presumptive in that EPA believes it may approve measures into a SIP in excess of the 

presumptive 6 percent when a clear and convincing justification is made by the state as to why 

a higher limit should apply in their case. Any request for a higher limit will be reviewed by EPA 

on a case-by-case basis. Any approval of emerging measures under this policy will be conducted 

through full notice-and-comment rulemaking in the context of a particular state SIP revision.
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Bundling Emerging/Voluntary Measures 

As explained in EPA’s Bundled Measures Guidance, emerging/voluntary measures can be 

bundled together. The emission reductions for each measure in the bundle would be 

quantified and, after applying an appropriate discount factor for uncertainty, the total 

reductions would be summed together in the SIP submission. After SIP approval, each 

individual measure would be implemented according to its schedule in the SIP. It is the 

performance of the entire bundle (the sum of the emission reductions from all the measures in 

the bundle) that is considered for SIP evaluation purposes, not the effectiveness of any 

individual measure.

SECTION C.5: EXISTING GUIDANCE ON WOE PATHWAY

The EPA Modeling Guidance issued in 2007 addresses the weight-of-evidence (WOE) approach 

for attainment demonstrations. The guidance indicates that states/tribes should always 

perform complementary analyses of air quality, emissions and meteorological data, and 

consider outputs of modeling other than the results of the attainment test. Such analyses are 

instrumental in guiding the conduct of an air quality modeling application. Sometimes, the 

results of corroboratory analyses may be used in a WOE determination to show that attainment 

is likely despite modeled results (which may be inconclusive). The further the attainment test is 

from being passed, the more compelling the contrary evidence produced by corroboratory 

analyses would need to be to draw a conclusion different from that implied by the modeled 

attainment test results. If a conclusion differs from the outcome of the modeled test, then the 

need increases for subsequent, future review with more complete databases is increased. If 

the test is failed by a wide margin (e.g., future design values are outside the recommended 

range at an individual site or multiple sites/locations), it is far less likely that the more 

qualitative arguments made in a weight of evidence determination would be sufficiently 

convincing to conclude that the NAAQS will be attained. 

In a WOE determination, states/tribes should review results from several diverse types of air 

quality analyses, including results from the modeled attainment test. As a first step, 

states/tribes should note whether the results of these analyses support a conclusion that the 

proposed strategy will meet the air quality goal. Second, states/tribes should weigh each type 

of analysis according to its credibility, as well as its ability to address the question being posed 

(i.e., is the strategy adequate for meeting the NAAQS by a defined deadline?). The conclusions 

derived in the two preceding steps are combined to make an overall assessment of the 

likelihood of meeting the air quality goal. This last step is a qualitative one. If the conclusion is 

that a strategy is inadequate to demonstrate attainment, then a new strategy is selected for 

review, and the process is repeated. States and tribes should provide a written rationale 

documenting the adequacy of the final selected strategy. Results obtained with air quality 

models are an essential part of a weight of evidence determination and should ordinarily be 

very influential in deciding whether the NAAQS will be met.
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REFERENCES

EPA (1989). Guidance on Limiting Potential to Emit in New Source Permitting. June 13, 1989. Available 

online at <http://www.epa.gov/reg3artd/permitting/t5_epa_guidance.htm>.

EPA (1992). Use of Long Term Rolling Averages to Limit Potential to Emit. February 24, 1992. Available 

online at <http://www.epa.gov/region7/air/title5/t5memos/rollave.pdf>

EPA (2001). Improving Air Quality with Economic Incentive Programs. January 2001. Available online at 

<http://www.epa.gov/ttncaaa1/t1/memoranda/eipfin.pdf>
13

United States

Environmental Protection

Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, NC

Publication No. EPA-456/D-12-001d

July 2012