1

December 16, 2013

Gina McCarthy

Administrator

Environmental Protection Agency

1200 Pennsylvania Avenue, N.W.

Washington, DC 20460

Dear Administrator McCarthy, 

We are a group of state environmental agency leaders, energy agency leaders, and public utility 

commissioners from 15 states that have taken action to promote clean energy and address 

climate change. Please accept our enclosed joint comments on forthcoming carbon pollution 

standards for existing power plants. The development of these comments was facilitated by the 

Georgetown Climate Center. 

At the outset, we applaud the commitment by President Barack Obama and the United States 

Environmental Protection Agency (EPA) to tackle head-on the challenge of climate change, and 

to focus in part upon reducing carbon emissions from existing power plants, which account for 

33 percent of total greenhouse gas emissions nationwide.1 

The President, in his June 2013 Presidential Memorandum, called on EPA to build on the 

leadership that many states, cities, and companies have already shown in reducing carbon 

pollution from the power sector as it develops its own standards under section 111(d) of the 

Clean Air Act.2 EPA subsequently asked for states to provide feedback on specific issues, 

including state experiences with carbon pollution reduction programs.3

We are happy to share our experiences with you. Our states are already achieving significant 

carbon pollution reductions from the power sector, and are demonstrating a variety of ways in 

which such reductions can be achieved. Through market-based programs, renewable portfolio 

standards, energy efficiency resource standards and funding commitments, utility planning, and 

other efforts, our states have reduced carbon pollution from the electricity sector by 20 percent 

from 2005 to 2011, and similarly improved our net carbon emission rate 19 percent over the 

same time period. Many individual states have achieved even greater reductions in carbon 

pollution—in the range of 30 to 46 percent—in that time period. Our state programs are 

 

1

U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2011 (2013), 

http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html. 

2

Presidential Memorandum from Barack Obama to the EPA, June 25, 2013, http://www.whitehouse.gov/thepress-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards.

3

U.S. EPA, Considerations in the Design of a Program to Reduce Carbon Pollution from Existing Power Plants 

(2013), http://www2.epa.gov/sites/production/files/2013-09/documents/20130923statequestions.pdf. 
2

delivering major economic and health benefits by reducing carbon pollution and traditional 

pollutants while driving investments in energy efficiency and renewable energy.

We encourage EPA to develop a stringent but flexible framework that equitably achieves 

meaningful reductions in carbon pollution from the electricity sector while recognizing that states 

may employ a variety of strategies, including successful state programs already in force, to 

achieve these goals. 

As we detail in our enclosed comments, we urge EPA to: 

 Establish the performance level of the standard based on a “best system of emission 

reduction” that reflects the full range of approaches that states have successfully 

demonstrated can cost-effectively reduce carbon pollution from the electricity system as 

a whole; 

 Establish the form of the emission guideline in a way that equitably recognizes the 

different starting points and circumstances of different states, including the pollution 

reductions achieved by states through climate and clean energy programs; and

 Allow for a variety of rigorous state compliance options, including options for 

compliance through participation in regional emission budget trading programs and 

state portfolio programs. 

We are grateful to EPA for considering these comments. We are confident that by drawing on 

the lessons of state experience, EPA can develop emission guidelines that secure the benefits 

that our states have experienced from carbon pollution reduction for the nation as a whole. 

Sincerely, 

Mary D. Nichols

Chair

California Air Resources Board

Robert B. Weisenmiller

Chair

California Energy Commission

Michael R. Peevey

Chair

California Public Utilities 

Commission

Larry Wolk, MD, MSPH

Executive Director and Chief 

Medical Officer

Colorado Department of 

Public Health and 

Environment

Dan Esty

Commissioner

Connecticut Department of 

Energy and Environmental 

Protection

Collin O’Mara

Secretary

Delaware Department of 

Natural Resources and 

Environmental Control
3

Dallas Winslow

Chairman

Delaware Public Service 

Commission

Douglas P. Scott

Chair

Illinois Commerce 

Commission

David Littell

Commissioner

Maine Public Utilities 

Commission

Robert M. Summers

Secretary

Maryland Department of 

the Environment

Kelly Speakes-Backman

Commissioner

Maryland Public Service 

Commission

Ken Kimmell

Commissioner

Massachusetts Department 

of Environmental Protection

Mark Sylvia

Commissioner

Massachusetts Department 

of Energy Resources

John Linc Stine

Commissioner

Minnesota Pollution Control 

Agency

Mike Rothman

Commissioner

Minnesota Department of 

Commerce

Thomas S. Burack

Commissioner

New Hampshire Department 

of Environmental Services

Joseph Martens

Commissioner

New York State Department of 

Environmental Conservation

Audrey Zibelman

Chair

New York State Public 

Service Commission
4

Dick Pederson

Director

Oregon Department of 

Environmental Quality

Janet Coit

Director

Rhode Island Department of 

Environmental Management

Marion Gold

Commissioner

Rhode Island Office of 

Energy Resources

Deborah Markowitz

Secretary

Vermont Agency of Natural 

Resources

James Volz

Chairman

Vermont Public Service 

Board

Maia Bellon

Director

Washington State 

Department of Ecology
5

States’ §111(d) Implementation Group Input to EPA

on Carbon Pollution Standards for Existing Power Plants

Table of Contents

I. Overarching Principles.........................................................................................................................7

II. States have Demonstrated Various Programs that are Achieving Meaningful CO2 Emission 

Reductions in the Power Sector along with Other Significant Benefits...................................................8

III. EPA Should Draw on the Experiences of States in Identifying the Best System of Emission Reduction 

and in Setting the Performance Level Through a System-Wide Approach ............................................16

IV. The Form of EPA’s Emission Guidelines Should Recognize Different State Starting Points and 

Support the Use of State Programs for Compliance..............................................................................20

IV.A. The Emission Guideline Should Equitably Recognize States’ Different Starting Points and 

Circumstances................................................................................................................................... 20

IV.B. EPA Should Provide a Durable Regulatory Signal for Further Emissions Reductions.................... 21

IV.C. Emission Guideline Should Provide a Mass-Based Performance Level Option............................. 22

IV.D. Emission Guideline Should Recognize that Averaging or Trading Elements Necessarily Take into 

Account Remaining Useful Life........................................................................................................... 23

V. EPA Should Allow for a Variety of Rigorous State Compliance Options............................................25

V.A. EPA Emission Guidelines Should Allow States to Use Effective Current Programs........................ 25

V.B. EPA Should Allow and Promote Interstate Cooperation and Regional Programs ......................... 26

V.C. EPA Should Provide Guidance on How to Address Interstate Issues such as Double-Counting..... 27

V.D. EPA Should Work with States to Develop Compliance Pathways and Model Rules...................... 27

V.E. EPA Should Ensure Consistent Evaluation and Quantification of State Plans................................ 27

V.F. EPA Should Coordinate Efforts with Other Relevant Federal and State Agencies......................... 29

VI. Specific Compliance Models that EPA Should Work with States to Develop ...................................30

VI.A. Regional Budget Trading Programs as a Compliance Pathway.................................................... 30

VI.B. Portfolio of State Programs as a Compliance Pathway ............................................................... 31
6

VII. Appendix: State Experiences with Reducing Carbon Pollution .......................................................34

VII.A. California.................................................................................................................................. 34

VII.B. Colorado................................................................................................................................... 37

VII.C. Connecticut .............................................................................................................................. 39

VII.D. Delaware.................................................................................................................................. 42

VII.E. Illinois....................................................................................................................................... 43

VII.F. Maryland .................................................................................................................................. 45

VII.G. Massachusetts ......................................................................................................................... 47

VII.H. Minnesota................................................................................................................................ 49

VII.I. New Hampshire......................................................................................................................... 51

VII.J. New York................................................................................................................................... 53

VII.K. Oregon ..................................................................................................................................... 55

VII.L. Washington............................................................................................................................... 57

. 
7

I. Overarching Principles

Our states support EPA in developing a program that: 

 Achieves significant emission reductions from the power sector in line with the

reductions needed to protect public health and welfare. State greenhouse gas 

emission reduction goals and the President’s commitment to achieve economy-wide 

carbon pollution reductions of 17 percent below 2005 levels by 2020 reflect the national 

consensus that these pollution reductions are essential. The electricity sector provides 

some of the most substantial cost-effective opportunities for reductions relative to other 

sectors, as evidenced by the reductions in excess of 17 percent already being achieved 

by state programs, changes in energy markets, and advances in clean energy 

technologies. As several states have recognized in their plans to achieve economy-wide 

greenhouse gas reduction goals, the power sector will have to reduce its emissions 

more than the overall 17 percent goal because reductions from other sectors (e.g., 

transportation) will be more difficult to achieve.

 Allows for a variety of flexible compliance options for states by setting rigorous 

targets while giving states the authority to innovate to reach them. This approach

recognizes that different pathways may be appropriate for different states, that flexibility 

allows states to cost-effectively achieve reductions by identifying opportunities created 

by the complex and interconnected nature of the electricity system, and that flexibility 

also facilitates efficient integration with other environmental obligations and reliability 

needs.

 Encourages states that have current effective carbon pollution reduction and 

clean energy programs to use those programs as compliance mechanisms to 

meet federal targets. These include California’s AB 32 and related programs, the

Regional Greenhouse Gas Initiative’s (RGGI) state programs, and other programs such 

as renewable energy standards and energy efficiency resource standards. 

 Recognizes the carbon pollution reductions already achieved by such state 

programs, while still achieving significant additional national carbon pollution 

reductions and creating an equitable national system. 

 Recognizes the various states’ different starting points, but places all states on a 

trajectory to achieve final targets of comparable rigor. 

 Minimizes compliance costs and burdens, maintains electricity reliability, and 

maximizes economic and environmental benefits. 
8

II. States have Demonstrated Various Programs that are Achieving Meaningful CO2

Emission Reductions in the Power Sector along with Other Significant Benefits

Our states—along with others—have developed a variety of state programs that achieve 

substantial, cost-effective carbon emission reductions and improvements in net carbon emission 

rates. Through market-based programs, renewable portfolio standards, energy efficiency 

resource standards and funding commitments, utility planning, and other efforts, our states have 

reduced carbon pollution from the electricity sector by 20 percent from 2005 to 2011, and 

similarly improved our net carbon emission rate 19 percent over the same time period, from 941

to 759 pounds CO2 per megawatt hour of electricity produced (lbs CO2/MWh).4 These programs 

are also delivering numerous additional benefits, including reductions of conventional pollutants 

and the significant public health benefits that accompany those reductions.

Our state programs have been developed through substantial democratic processes, and reflect 

the different on-the-ground experience of our states, including differences in the structure of 

energy markets and market participants.

Taken together, these approaches are driving improvements and innovation throughout the 

electricity system, leading to a cleaner and more efficient system overall.

 

4

Calculated from U.S. Energy Information Administration data. CO2 emissions based on Total Electric Power 

Industry category, U.S. Energy Information Administration, U.S. Electric Power Industry Estimated Emissions by 

State, http://www.eia.gov/electricity/data/state/emission_annual.xls [hereinafter EIA State Electric Power 

Emissions]. Electricity generation data represents the total electricity generated from all electricity generation 

sources in the state, not just fossil fuel-fired sources. U.S. Energy Information Administration, U.S. Energy 

Information Administration, 1990-2012 Net Generation by State by Type of Producer by Energy Source (EIA-906, 

EIA-920, and EIA-923), http://www.eia.gov/electricity/data/state/annual_generation_state.xls [hereinafter EIA 

State Generation]. Generation includes generation from sources that do not emit carbon pollution, including 

renewable and nuclear sources. 
9

Figure 1: Many of our states have experienced very significant reductions in CO2

emissions in the electricity sector over the past decade, demonstrating the levels of 

emission reductions that are achievable. Source: EIA, Total Electric Power Industry 

CO2 Emissions. 

Figure 2: Similarly, many of our states have achieved very significant improvements 

in net carbon pollution emission rates (comparing total carbon pollution from the 

electricity sector to total electricity generation, i.e., lbs CO2 / MWh). Source: EIA, 

Total Electric Power Industry CO2 Emissions and Power Generation by State. 

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

2001 2006 2011

Percent Change in Electricity Sector 

Carbon Dioxide Emissions, from a 2000 Baseline

California

Colorado

Connecticut

Delaware

Maryland

Massachusetts

Minnesota

New York

Oregon

Washington

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2001 2006 2011

Percent Change in the Carbon Dioxide Emissions Rate 

(lbs CO2/ MWh), from a 2000 Baseline, 

Including All Electricty Resources

California

Colorado

Connecticut

Delaware

Maryland

Massachusetts

Minnesota

New Hampshire

New York

Oregon

Rhode Island

Washington
10

Approaches used by our states include the following: 

Market-based programs: States that have market-based emission trading programs have 

demonstrated that these programs are an efficient, cost-effective way to achieve emission 

reductions and efficiently move the electric grid toward a cleaner system. These programs can 

operate as stand-alone programs or as “umbrella” policies that accumulate and account for 

emission reductions from complementary programs, such as renewable portfolio standards, 

energy efficiency programs, and emission reduction programs directed at other pollutants, as 

well as fuel switching and energy efficiency at power plants. Market-based programs can take 

different forms while yielding similar benefits. 

For example, the nine states5participating in the Regional Greenhouse Gas Initiative have 

together reduced carbon pollution in the region by over 40 percent from 2005 to 2012.

6 The new 

RGGI cap7of approximately 78 million tons in 2020 is more than 50 percent below 2005 levels.

Participating states are investing revenue from allowance auctions into energy efficiency and 

clean energy programs that benefit consumers and contribute to carbon pollution reductions.8

These investments in energy efficiency have helped six of the nine RGGI states rank in the top 

ten most energy efficient states, according to the American Council for an Energy Efficient 

Economy. Massachusetts, which invests approximately 90 percent of its RGGI proceeds in 

energy efficiency, has been ranked the number one energy-efficient state for the last three 

years.9 An independent study found that the RGGI states have realized a $1.6 billion net benefit 

from the first three years of the program’s operation, in large part due to the energy efficiency 

investments that have reduced consumer electricity spending and increased economic activity.

10

The same study also found that the region would see a net increase of 16,000 jobs due to these 

energy efficiency investments and other auction revenue spending from the first three years of 

the program.

11

Participating states have found that RGGI captures the benefits of complementary state policies

and has resulted in significant changes across the electricity system to reduce emissions. These 

 

5

Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and 

Vermont. 

6

Regional Greenhouse Gas Initiative, Report on Emission Reduction Efforts of the States Participating in the 

Regional Greenhouse Gas Initiative and Recommendations for Guidelines under Section 111(d) of the Clean Air Act 

1 (2013). 

7

RGGI establishes an overall emissions cap on the power sector. In 2013, the participating RGGI states agreed to 

reduce the emissions cap by 45 percent in 2014. Program Review, Regional Greenhouse Gas Initiative website, 

http://www.rggi.org/design/program_review. 

8

RGGI Benefits, http://www.rggi.org/market/CO2-auctions/results; RGGI, Regional Investment of RGGI CO2

Allowance Proceeds (2012), http://www.rggi.org/docs/Documents/2011-Investment-Report.pdf. 

9

 ACEEE, State Energy Efficiency Scorecard, http://aceee.org/state-policy/scorecard. 

10 The Analysis Group, The Economic Impacts of the Regional Greenhouse Gas Initiative 33 (2011),

http://www.analysisgroup.com/uploadedFiles/Publishing/Articles/Economic_Impact_RGGI_Report.pdf. The study 

looked at years 2009-2011. 

11 Jobs are “job years”, or one job sustained for one year. Id. 
11

include investments by power companies to make existing units more efficient, shifts across the 

electricity system to greater use of cleaner fossil-fuel generation sources, reduction of electricity 

load growth through demand-side energy efficiency strategies, and replacement of fossil-fuel 

generation with increased renewable energy. 

Similarly, the state of California has mounted a comprehensive effort to reduce greenhouse gas 

emissions, reflecting its commitments to cut carbon pollution to 1990 levels by 2020,12 and by 

80 percent below those levels by 2050, while setting ambitious mid-term targets to keep 

emissions trending downwards.

13 In order to achieve these goals, California has implemented a 

comprehensive portfolio of policies, many under the authority of AB 32, California’s Global 

Warming Solutions Act. This includes setting an economy-wide greenhouse gas (GHG)

emissions cap that declines to 2020 along with a trading mechanism.

14 Four successful 

allowance auctions have been held, and the cap is projected to reduce emissions by 25 percent

from 2006 to 2020.15

As a result of these many efforts, California’s utility sector greenhouse gas emissions have 

continued to decline. Based on initial estimates from the California Air Resources Board, 

emissions from in-state and imported power fell by 16 million metric tons, or 16 percent, from 

2005 to the 2010-12 averaging period (from 108 million metric tons CO2e to 91 million tons 

CO2e).16 By 2025, California expects to cut utility sector emissions to below 80 million metric 

tons CO2e, a roughly 25 percent reduction from 2005 levels in that sector, with already low 

emissions compared to other states.17 

Renewable Portfolio Standards: At least 30 states have renewable portfolio standards (RPS) 

or alternative energy portfolio standards, which can increase renewable generation and displace 

carbon-intensive fossil fuel generation. The experience of our states, confirmed by independent 

analyses,18 finds that sufficiently ambitious renewable energy policies can achieve significant

carbon pollution reductions from fossil-fuel fired sources. In addition, these policies can spur

 

12 Cal. Public Health and Safety Code § 38550.

13 Cal. Exec. Order S-3-05 (June 1, 2005).

14 See generally Cal. Public Health and Safety Code §§ 38550 et seq.

15 Center for Climate and Energy Solutions, California Global Warming Solutions Act (AB 32), 

http://www.c2es.org/us-states-regions/action/california/ab32 (last visited Oct. 22, 2013).

16 Cal. Air Resources Board analysis, based in part on Cal. Air Resources Board, 2008 to 2012 Emissions for 

Mandatory Greenhouse Gas Emissions Reporting Summary (2013), http://www.arb.ca.gov/cc/reporting/ghgrep/reported-data/2008-2012-ghg-emissions-summary.pdf. This analysis is preliminary, but reflects California’s 

long-term successes and program performance. Emissions in 2012 were relatively higher than in recent years 

because of relatively low hydroelectric generation and the unexpected shutdown of the San Onofre Nuclear 

Generating Station, but the state remains on course to meet emissions targets.

17 Cal. Air Resources Board analysis. 

18 See e.g., Bryan K. Mignone et al., Cost-effectiveness and Economic Incidence of a Clean Energy Standard, 

Economics of Energy and Environmental Policy, Volume 1, Number 3 (2012); Elizabeth Doris and Rachel Gelman, 

National Renewable Energy Laboratory, State of the States 2010: The Role of Policy in Clean Energy Market 

Transformation (2011); Sanya Carley, State Renewable Energy Electricity Policies: An Empirical Evaluation of 

Effectiveness, 37 Energy Policy 3071–3081 (2009).
12

renewable energy innovation and deployment and promote long-term change toward a cleaner 

electricity system.

For example, The New York State Energy Research and Development Authority (NYSERDA) 

estimates that the state’s RPS, which requires 30 percent of electricity used by consumers to 

come from renewables by 2015, avoided 4.1 million tons of CO2 from 2006 to 2012, along with 

4,028 tons of nitrogen oxides (NOx) and 8,853 tons of sulfur dioxide (SO2).

19 NYSERDA expects 

that renewable projects already initiated will inject $2.7 billion into the state’s economy over their 

operating lives.20

Similarly, Minnesota’s Renewable Energy Standard (RES) requires utilities to provide 25 

percent of their power from renewables by 2025.21 As a result of these policies and market 

conditions, Minnesota has seen a dramatic increase in wind resources, experiencing a 

900 percent growth in wind generation from 2000 to 2010.22 In 2011, wind had grown to provide 

12.7 percent of Minnesota’s total electricity generation.

23 All Minnesota utilities have met their 

2012 RES goals and most ratepayers are benefitting from lower costs.

24

Likewise, California has implemented a very aggressive RPS, requiring that 33 percent of state 

power come from renewable sources by 2020.25 With more than 20 percent of its power already 

coming from renewable sources, the state is well on its way to meeting that target, and is 

considering ways to further develop renewable power.

The success of renewable portfolio standards is being demonstrated in many other states 

across the country as well.26

 

19 N.Y. State Energy Research & Development Authority, The New York State Renewable Portfolio Standard 

Performance Report 19 (2012), http://www.nyserda.ny.gov/Publications/Program-Planning-Status-and-EvaluationReports/Renewable-Portfolio-Standard-Reports.aspx.

20 N.Y. State Energy Research & Development Authority, NYSERDA Renewable Portfolio Standard Main Tier 2013 

Program Review Final Report September 5 (2013), http://www.nyserda.ny.gov/Publications/Program-PlanningStatus-and-Evaluation-Reports.Renewable-Portfolio-Standard-Reports.aspx

21 Minn. Stat. 216B.1691 (2013); see also Minnesota, DSIRE: Database for State Incentives for Renewable and 

Efficiency, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=MN14R. Xcel Energy, the state’s 

largest utility, must achieve 30 percent from renewables by 2020, one quarter of which must be met with wind.

22 Provided by Minn. Department of Commerce. 

23 Calculated from EIA State Generation, supra note 4 (Wind generation as percentage of Total Electricity Power 

Industry generation). 

24 Minn. Dep’t. of Commerce, Progress on Compliance by Electric Utilities with the Minnesota Renewable Energy 

Objective and the Renewable Energy Standard 3, 9 (2013), 

http://mn.gov/commerce/energy/images/2013RESLegReport.pdf.

25 See generally RPS Program Overview, Cal. Public Utility Commission, 

http://www.cpuc.ca.gov/PUC/energy/Renewables/overview.htm.

26 See, e.g., World Resources Institute report series, Power Sector Opportunities for Reducing Carbon Dioxide 

Emissions, which identifies significant projected carbon pollution reductions from renewable strategies in specific 

states, including Pennsylvania, Michigan, North Carolina, and Ohio. Michael Obeiter et al., World Resources 

Institute, Power Sector Opportunities for Reducing Carbon Dioxide Emissions, http://www.wri.org/ourwork/project/us-climate-action/publications. 
13

Energy Efficiency Standards and Programs: State energy efficiency programs and dedicated 

investments provide some of the most cost-effective opportunities to reduce carbon pollution, 

reduce electricity costs to rate-payers, increase local economic activity, and create jobs. At least 

25 states have energy efficiency resource standards or dedicated funding for energy efficiency 

established in law. Independent analysis has shown that—when applied across the country—

such energy efficiency programs can achieve incremental annual electricity savings in the range 

of 0.5 to 1 percent annually.27

Experience in some of our states demonstrates that even greater annual savings are 

achievable. Vermont recorded annual savings of 1.8 percent last year through its Efficiency 

Vermont program,28 and ISO New England forecasts that New England states’ combined 

programs will effectively flatten projected demand growth through 2022.

29 These reductions in 

electricity use translate into very significant reductions in carbon pollution. For example, 

Massachusetts projects that its investment in energy efficiency from 2005 through 2015 will 

reduce Massachusetts’ electricity demand by 17.1 percent, resulting in a total annual reduction 

of 3 million tons of CO2 in 2015.30 

In reducing electricity use, these programs also reduce rate-payer costs. For example, Vermont 

will see lifetime benefits of $136.1 million after spending $57.1 million on energy efficiency 

through its Efficiency Vermont program.In Colorado Xcel Energy, Colorado’s largest utility,

anticipates $227 million in net lifetime economic benefits for its customers as a result of its 2010 

demand-side management programs.31 California’s energy efficiency standards have saved 

consumers over $74 billion on their electric bills over their decades of operation.32

In addition to saving rate-payers on electricity costs, demand-side efficiency programs also 

represent investment in the local economy and the creation of jobs, by creating positions for 

those who perform energy efficiency audits or install energy efficiency controls in commercial 

buildings. Investments in energy efficiency by states participating in RGGI were a large driver 

 

27 Galen L. Barbose et al., Lawrence Berkeley National Laboratory, The Shifting Landscape of Ratepayer-Funded 

Energy Efficiency in the U.S. (2009), 

http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/LBNL_Shifting_Landscape_of_Ratepayer_Energy

_Efficiency_REPORT.pdf (finding savings of 0.4 to 0.9 percent achievable under low to high scenarios).

28 2012 Annual Highlights, Efficiency Vermont, 

http://www.efficiencyvermont.com/about_us/information_reports/annual-highlights-2012.aspx. 

29 Presentation, ISO New England, Final 2013 Energy-Efficiency

Forecast 2016-2022 at slide 37, http://www.isone.com/committees/comm_wkgrps/othr/enrgy_effncy_frcst/2013frcst/iso_ne_final_ee_forecast_2016_2022.pdf.

30 Provided by Mass. Department of Environmental Protection.

31 American Council for an Energy-Efficient Economy, Energy Efficiency Resource Standards: A Progress Report on 

State Experience 12 (June 2011), http://aceee.org/research-report/u112. Vermont’s $57.1 million energy efficiency 

spending includes both Efficiency Vermont and participant spending. 

32 Cal. Energy Commission, Draft 2013 Integrated Energy Policy Report 23 (2013), 

http://www.energy.ca.gov/2013publications/CEC-100-2013-001/CEC-100-2013-001-LCD.pdf. 
14

for the finding that the RGGI program overall created 16,000 jobs as a result of the first three 

years of its operation.33

These tremendous cost savings to rate-payers and economic benefits help make energy 

efficiency programs among the most cost-effective measures for reducing carbon pollution. 

State and Utility Planning Efforts and Programs: State and utility planning efforts and 

programs, including planned early retirements of inefficient generation resources, are another 

approach that can significantly drive reductions in carbon pollution.

A prime example is Colorado’s Clean Air – Clean Jobs Act, which required the state’s regulated 

utilities to develop plans for reducing air pollutant emissions from coal-fired power plants 

equaling either 900 MW capacity or 50 percent of their coal fleet. As a result, the state’s public 

utilities commission (PUC) has now approved plans from regulated utilities that will significantly 

reduce GHG emissions from coal plants, largely through plant retirements.34 Colorado’s largest 

utility, Xcel Energy, anticipates reducing its CO2 emissions by 28 percent by 2020 under the 

state’s Clean Air – Clean Jobs Act.35

Minnesota’s Emission Reductions Rider statute similarly encourages utilities to file plans 

containing actions that would reduce emissions and that were not already required by federal 

regulations; the statute then allowed utilities to recover costs for those actions.36 For example, 

the Minnesota Metro Emissions Reduction Project, completed by Xcel Energy from 2007 to 

2009, reduced carbon emissions from three Twin Cities area power projects by 21 percent 

through the replacement of two coal facilities with highly efficient combined cycle units and the 

rehabilitation of an existing coal unit.37

Carbon Capture and Sequestration Programs and Policies: State projects and policies to 

support carbon capture and sequestration for coal plants can play an important role in achieving 

reductions from the existing fossil fleet. For example, lllinois has supported the development of 

clean coal projects through the FutureGen project in conjunction with the U.S. Department of 

Energy.38 Illinois also passed the Clean Coal Portfolio Standard Law, which requires new coal-

 

33 Jobs are “job years,” or one job sustained for one year. The Analysis Group, The Economic Impacts of the 

Regional Greenhouse Gas Initiative 47 (2011),

http://www.analysisgroup.com/uploadedFiles/Publishing/Articles/Economic_Impact_RGGI_Report.pdf. 

34 See Press Release, Gov. Ritter, Bipartisan Lawmakers & Coalition Introduce Colorado Clean Air-Clean Jobs 

Legislation (Mar. 16, 2010), 

http://www.colorado.gov/cs/Satellite%3Fc%3DPage%26childpagename%3DGovRitter%252FGOVRLayout%26cid%

3D1251573201310%26pagename%3DGOVRWrapper. 

35 Xcel Energy, Colorado Clean Air – Clean Jobs Plan, 

http://www.xcelenergy.com/Environment/Doing_Our_Part/Clean_Air_Projects/Colorado_Clean_Air_-

_Clean_Jobs_Plan (reductions presumed from a 2010 baseline).

36 Minn. Stat. § 216B.1692 (2013). 

37 Minn. Public Utility Commission, Report to the Legislature on Emission Reduction Projects Under Minnesota 

Statutes 216B.1692 (2008), http://www.puc.state.mn.us/portal/groups/public/documents/pdf_files/000661.pdf; 

Minnesota Metro Emissions Reduction Project, Xcel Energy, 

http://www.xcelenergy.com/Environment/Doing_Our_Part/Clean_Air_Projects/MN_MERP. 

38 See FutureGen Alliance, http://www.futuregenalliance.org. 
15

fired power plants to capture and store more than half of the carbon emissions that the facility 

would otherwise emit.39

Combined Heat and Power Incentives: Combined heat and power (CHP)—also known as 

cogeneration—is an efficient, clean, and reliable way to generate electricity and heat from a 

single fuel source. Commercial and industrial facilities installing CHP systems can reduce load, 

peak demand, and associated carbon dioxide emissions from the grid by cost effectively 

generating their own electricity with low-emitting technologies such as fuel cells, natural gas 

microturbines, and gas turbines with waste heat recovery boilers. Installing CHP systems can 

significantly increase operational efficiency while lowering energy costs and reducing overall 

emissions from the electricity sector. 

States can play an important role in promoting CHP. For example, Connecticut has

implemented a variety of programs to promote CHP including construction grants, 

standardization of interconnection protocols, low interest loans, and the establishment of a CHP 

portfolio standard. As a result, Connecticut industry has added more than 91 MW of CHP 

capacity between 2005 and 201140

State New Source Performance Standards: California, New York, Oregon, and Washington

all have state emission performance standards for new power plants that have required new 

facilities to be highly efficient.41

The nation as a whole has also made important reductions in carbon pollution emissions,

especially in very recent years, due to a variety of factors, including programs to reduce 

emissions of other pollutants from the power sector (e.g., mercury, nitrogen oxides, and sulfur 

dioxide), the increased availability and lower cost of natural gas, and growing efforts to secure 

the benefits of energy efficiency and renewable power. Overall carbon pollution from the electric 

power sector fell by 10.1 percent from 2005 to 2011, and the net emission rate for the power 

sector as a whole improved 11.1 percent from 1390 to 1236 lbs CO2/MWh.42 Separate data 

available for most recent years show that these improvements have accelerated; in the last 

three years alone, from 2010 to 2012, emissions from the power sector in the United States fell 

by 10.3 percent.

43

 

39 20 Ill. Comp. Stat. 3855/1-10 (2013).

40 Conn. Department of Energy and Environmental Protection, 2013 Conn. Comprehensive Energy Strategy (2013), 

http://www.ct.gov/deep/lib/deep/energy/cep/2013_ces_final.pdf

41 Cal. Pub. Util. Code §§ 8340-41 (2013), SB 1368 Perata (2006); Or. SB 101 (2000); N.Y. Comp. Codes R. & Regs. tit. 

6 Part 251 (2013); Wash. Rev. Code ch. 80.80 (2013), Wash. SB 6001 (2007). 

42 Calculated from U.S. Energy Information Administration data. CO2 emissions based on Total Electric Power 

Industry category. EIA State Electric Power Emissions, supra note 4. Electricity generation data represents the total 

electricity generated from all electricity generation sources in the state, not just fossil fuel-fired sources EIA State 

Generation, supra note 4. 

43 Power Plants, Greenhouse Gas Reporting Program 2012, U.S. Environmental Protection Agency,

http://www.epa.gov/ghgreporting/ghgdata/reported/powerplants.html.
16

III. EPA Should Draw on the Experiences of States in Identifying the Best System of 

Emission Reduction and in Setting the Performance Level Through a System-Wide 

Approach

As we discuss above, states are achieving very significant carbon pollution reductions through a 

variety of state programs, including emission budget and trading programs, renewable portfolio 

standards, energy efficiency programs, state statutes that require or promote planned electricity 

resource changes, and others. Implementation of these programs across our states is driving 

changes to the electricity system as a whole, promoting efficiency improvements at individual 

sources, using a cleaner mix of our existing fossil fuel-fired sources to meet our electricity 

needs, adding additional renewable power and other zero-carbon energy capacity, and reducing 

our overall demand for energy through efficiency. 

As EPA designs its Section 111(d) carbon pollution emission guideline for states on the basis of 

the “best system of emission reduction,”

44 it should take into account all of these types of 

demonstrated successes and the carbon pollution reductions achievable by them. Only by 

considering reductions from all of these types of approaches will EPA be able to establish a 

standard that achieves the most meaningful, cost-effective reductions. 

The state programs can be grouped into three categories of approaches (as identified by EPA in 

its questions), each of which can secure a distinct pool of emission reductions:

1. Changes at individual covered sources to reduce carbon emission intensity. 

These include improving plant efficiency or heat rate, as well as switching to or co-firing 

with lower carbon fuels. Market-based programs can help drive these types of 

improvements. Programs and incentives for combined heat and power generation that is 

more carbon efficient than grid power can also increase the overall efficiency of energy 

generation. Carbon capture and sequestration can also reduce emissions at individual 

sources. Other potential on-site improvements that can be used to reduce emissions 

include: using renewable energy to provide supplemental steam heating; using waste 

heat to remove moisture from coal; implementing advanced systems for combustion and 

dispatch optimization, or oxy-combustion systems, and others.

45

2. Shifts in generation from covered sources that have higher carbon-pollution 

emission rates to others that have lower carbon-pollution emission rates. This 

includes increasing generation at highly efficient natural gas plants and replacing 

existing sources with such efficient sources. Market-based state programs are 

demonstrating the effectiveness of these types of shifts across the electricity system, 

because sources that have lower carbon emission rates can provide electricity at a lower 

 

44 See 42 U.S.C. § 7411(a)(1).

45 See Megan Ceronsky and Tomas Carbonell, Environmental Defense Fund, Section 111(d) of the Clean Air Act, The 

Legal Foundation for Strong, Flexible & Cost-Effective Carbon Pollution Standards for Existing Power Plants 11 

(2013), http://blogs.edf.org/climate411/files/2013/10/Section-111d-of-the-Clean-Air-Act-The-Legal-Foundationfor-Strong-Flexible-Cost-Effective-Carbon-Pollution-Standards-for-Existing-Power-Plants-O.pdf. 
17

compliance cost. State new source performance standards have also driven such 

improvements, as they have required replacement generation to meet emission 

standards. 

3. Reduction of emissions from covered sources through displacement by zerocarbon generation or reduction in electricity demand. This category covers two 

different approaches, both of which have the effect of displacing generation from 

covered fossil-fuel fired power plants thereby reducing carbon pollution from those 

sources. Developing additional zero-carbon electricity generation capacity, for example 

by adding wind and solar energy resources as well as nuclear power,

46 can reduce the 

use of carbon-emitting electricity resources. 

Another approach is to reduce the overall need for electricity through demand-side 

energy efficiency measures, such as through more efficient lights and appliances, and 

better residential and commercial building efficiency. Market-based programs, renewable 

energy standards, and state demand-side energy efficiency standards and programs are 

all demonstrating the types of emission reductions that can be achieved from covered 

sources through this category of reductions. 

Our experience has demonstrated that meaningful, cost-effective emission reductions are best 

achieved through a system-wide approach that draws from all three of these strategies. 

In particular, state experience has demonstrated that the most cost-effective strategies resulting 

in meaningful reductions are those that promote shifts away from high-emission fossil sources, 

displace emissions with zero-carbon generation, or reduce electricity use through demand-side 

efficiency programs. 

In contrast, more limited emission reductions are available from plant-level efficiency 

improvements, as demonstrated by the extensive technical analysis in EPA’s proposed new 

source standards for the sector.47 Meaningful reductions could be achieved at a reasonable cost 

if the full range of available on-site systems, including efficiency upgrades and other 

improvements, were applied to each source,48 except those nearing the end of their remaining 

useful life. However, we believe that such an approach is less cost-effective, and less effective 

in promoting long-term improvements in the electricity system, than a system-wide approach as 

described above and as demonstrated in our states. 

 

46 Nuclear energy capacity can be increased through facility upgrades or construction of generation stations.

47 U.S. Environmental Protection Agency, Standards of Performance for Greenhouse Gas Emissions from New 

Stationary Sources: Electric Utility Generating Units, EPA-HQ-OAR-2013-0495, at 27 (Sept. 20, 2013), 

http://www2.epa.gov/sites/production/files/2013-09/documents/20130920proposal.pdf. We do note, however, 

that source-level programs which directly and significantly reduce the capacity factor (and hence emissions) of 

inefficient or aging fossil plants, or use similar approaches to limit such plants’ continued operations, may achieve 

substantial reductions.

48 Such improvement could include the full range of options described under the “Changes at individual covered 

sources to reduce carbon emission intensity” category above, but opportunities for application of some of the 

individual strategies may vary by source. See discussion supra note 45. 
18

The best emission reduction systems focus on shifting the grid as a whole away from highcarbon sources because individual generating units do not operate independently. Instead, they 

are part of a system of highly interdependent sources whose aggregate emissions are 

dependent on system management.49 As state experience has shown, reducing demand for 

fossil generation or providing alternative, cleaner, sources of supply achieves emissions 

reductions far beyond the level that can be achieved by improving the operations of individual 

fossil plants. 

Grid-level programs of this sort have delivered major economic benefits along with 

environmental improvements. In California, for instance, expanding energy efficiency alone has 

saved ratepayers billions of dollars while reducing the need for new power plants. The RGGI 

states are adding thousands of jobs as a result of these efforts, while cutting emissions. 

Similarly, state efforts to add renewable power across the country have improved the fuel 

diversity and system performance of the grid, while supporting a national boom in clean energy 

jobs. These opportunities are not available from strategies which focus only on source-level 

reductions, which are necessarily more limited and so provide fewer opportunities to save 

energy and create jobs.

Indeed, one of the Clean Air Act’s most notable successes—the Acid Rain Program—achieved 

tremendous pollution reductions through a grid-level approach, promoting trading between 

generation sources to reduce emissions from the fleet as a whole, rather than focusing narrowly 

on individual sources.50 That effort cut acid gases from power plants in the program by more 

than 70 percent in an extremely cost-effective way, leading EPA to conclude that “market-based 

trading systems can cost-effectively reduce pollution and address environmental damage.”51

Related programs have further cut pollution by providing incentives to move the grid, as a 

whole, toward cleaner energy.52 We agree with EPA that these system-level approaches,53

including efforts to integrate renewable energy and energy efficiency into the grid, “represent ...

a real opportunity” to reduce air pollution.54

EPA needs to seize that opportunity because Section 111(d) standards are to be based on the

“best system of emission reduction,”

55 and the best systems available include all three carbon 

reduction strategies the states have demonstrated. The courts are clear that EPA must “weigh 

cost, energy, and environmental impacts in the broadest sense at the national and regional 

 

49 See U.S. Environmental Protection Agency, Roadmap for Incorporating Energy Efficiency/Renewable Energy 

Policies and Programs into State and Tribal Implementation Plans at Appendix B, B-6 (2012) [hereinafter EPA 

EE/RE Roadmap]. 

50 See generally 42 U.S.C. §§ 7651 et seq.; 

51 U.S. Environmental Protection Agency, Acid Rain and Related Programs 2009 Highlights: 15 Years of Results

(2009), http://www.epa.gov/airmarkets/progress/ARP09_4.html.

52 See, e.g.,NOX SIP Call, 63 Fed. Reg. 57,356 (Oct. 27, 1998); Clean Air Interstate Rule, 70 Fed. Reg. 25,162 (May 12, 

2005).

53 See also Clean Air Mercury Rule, 69 Fed. Reg. 4,652, 4,698-4,705 (proposed Jan. 30, 2004) (discussing benefits of 

allowance system for pollution reduction from the electric power sector while proposing Section 111(d) guidelines 

for the sector).

54 EPA EE/RE Roadmap, supra note 49, at 12.

55 42 U.S.C. §§ 7411(a)(1) & (d)(1) (emphasis added); see also 40 C.F.R. §§ 60.21(e), 60.22(b)(5).
19

levels and over time as opposed to simply at the plant level in the immediate present” as it 

seeks the best ways to reduce emissions.56 We are confident that a broad approach is the best 

path forward here.

Indeed, EPA has recently developed a “Roadmap” that outlines system-level approaches for 

states seeking to reduce fossil fleet emissions in order to maintain compliance with air quality 

standards for pollutants like ozone and soot.57 The Roadmap discusses all three of our 

strategies, including energy efficiency programs, emissions trading systems, and renewable 

portfolio standards which can help reduce grid-level emissions. Those same strategies work to 

reduce greenhouse gas pollution as well. 

EPA must therefore look broadly to ensure that it fully accounts for emission reduction 

opportunities across the electric system, from individual generation stations to the grid as a 

whole. Simply put, achieving meaningful, cost-effective emission reductions across the power 

grid requires taking a grid-level perspective, as states’ experience demonstrates. That 

experience shows carbon pollution reductions in the range of 17 to 46 percent over a seven 

year period (2005-2011) have been achieved by many leading states,

58 along with related 

improvements in emission rates from 18 to 39 percent in the same time frame, demonstrating 

that such broad policies can successfully and cost-effectively achieve real progress.59 

 

56 Sierra Club v. Costle, 657 F.2d 298, 330 (D.C. Cir. 1981).

57 See generally EPA EE/RE Roadmap, supra note 49.

58 Represents range of reductions achieved by Connecticut, Delaware, Maine, Maryland, Massachusetts, 

Minnesota, New Hampshire, New York, Oregon, Vermont, and Washington. Calculated from U.S. Energy 

Information Administration data. CO2 emissions based on Total Electric Power Industry category. EIA State Electric 

Power Emissions, supra note 4. 

59 Represents range of reductions achieved by Connecticut, Delaware, Maine, Massachusetts, New Hampshire, 

New York, and Oregon. Calculated from U.S. Energy Information Administration data. CO2 emissions based on Total 

Electric Power Industry category. EIA State Electric Power Emissions, supra note 4. Electricity generation data 

represents the total electricity generated from all electricity generation sources in the state, not just fossil fuelfired sources EIA State Generation, supra note 4. 
20

IV. The Form of EPA’s Emission Guidelines Should Recognize Different State Starting 

Points and Support the Use of State Programs for Compliance

IV.A. The Emission Guideline Should Equitably Recognize States’ Different 

Starting Points and Circumstances

States all across the country can take advantage of the strategies we discuss above to reduce 

their carbon pollution to a significantly lower level, but will begin with widely differing power 

fleets and existing regulatory initiatives. EPA should balance these differences with the need to 

reduce greenhouse gas emissions across the country by placing all states on a trajectory to 

achieve a uniformly rigorous target, while allowing varying compliance times (recognizing that 

this period of time may extend beyond an initial phase covered by the rulemaking). 

One approach that EPA should consider is setting a single emission intensity target that would 

apply to each state, individually or as part of a region, representing net improvements to the 

carbon intensity of a state’s electricity system that could be achieved through the system-wide 

approaches described above. (This target could be expressed as an aggregate emission rate of 

pounds per megawatt-hour or potentially as a rate of emissions per gross domestic product). 

States that would have further to go to meet the target could have longer compliance times to 

meet the common goal. This approach would require all states to reduce emissions while being 

equitable to states that have already made progress toward meeting the emission intensity 

target. The same goal would be achieved by establishing a mass-based emission budget for 

each state that reflects a level of aggregate emissions from covered sources commensurate 

with full use of the best system of emission reductions. (We discuss ways to convert between 

mass and rate standards below.)

Approaches like these would automatically recognize the substantial emission reductions 

achieved by first-mover states while providing other states the time they need to pursue these 

opportunities. States that have already taken significant action to reduce carbon pollution or 

already have mostly low-carbon energy resources would be on track to meet such common

standards quickly, with fewer opportunities for immediate further improvements beyond those 

already contemplated in their programs. States that have a high-carbon energy portfolio may 

have greater opportunities to achieve significant reductions in the near term through actions that 

other states may have already taken, but may require more time to reach the same level of 

overall emission performance as states that have already taken significant action. 

Reviewing state programs within this framework, EPA would ensure that each state has 

designed its program to put regulated sources on an achievable glide path to reach its target as 

soon as practicable,60 thereby maintaining a clear regulatory incentive to reduce carbon dioxide 

emissions over the compliance period.

EPA has taken these approaches in the past: other Clean Air Act programs allow states time to 

comply, with the time period depending on the degree of pollution reduction required and a 

 

60 States would need to support through analysis that the “glidepath” demonstrates reasonable progress toward 

the target. 
21

showing of “reasonable progress” towards final standards.61 EPA’s Section 111(d) general 

regulations likewise support this approach, as they anticipate that state plans will set 

compliance schedules that include regular progress reports.62

We believe this approach, which focuses on moving states toward a shared endpoint, is 

substantially better than one based on requiring percentage reductions (either in tons or rates) 

from a particular baseline year. Setting an equitable baseline across the states, which have 

varying economic and emissions histories, would be difficult and time-consuming. And because 

states have very different emissions levels now, requiring all states to reduce emissions by the 

same percentage across the board, regardless of starting circumstances, would not treat the 

states equitably, or be the most cost-effective way of achieving reductions.63

We recognize that other equity issues will arise as EPA considers how to move the states 

towards a common target. These include the fact that states may be net importers or exporters 

of power, and so their emissions may be affected by actions in other states that they cannot 

directly control. On a related point, some states may have relatively smaller in-state power 

systems, and so may have limited opportunity for system-wide improvements within the state. 

We believe that encouraging regional 111(d) planning, as we discuss later in these comments, 

may help address these issues.

IV.B. EPA Should Provide a Durable Regulatory Signal for Further Emissions 

Reductions

The 111(d) guidelines should send a durable regulatory signal that greenhouse gas pollution 

from the power sector must be significantly reduced, and that further reductions will be required 

as systems of emission reduction further improve. Sending that signal requires setting 

meaningful endpoints for states to reach during the initial compliance period, and committing to 

regularly review (and, in all likelihood tighten) the guidelines over time. 

Although we recognize that states may reach these endpoints at different times, it is important 

the standards be clear that the endpoints, once reached, are ceilings. Emissions levels 

(whether set as mass ceilings or maximum emissions rates) cannot be allowed to rise above the 

target after the end of the initial compliance period.

EPA should further ensure that it is clear to the regulated industry that further reductions are 

likely in the future. The reduction opportunities available with current adequately demonstrated 

systems will expand down the road as further deployment of existing clean technologies takes 

place. EPA should be clear that it will be regularly revisiting its guidelines to assess new 

pollution control opportunities.

 

61 See, e.g., 42 U.S.C. § 7410 (state plans for criteria pollutants); 42 U.S.C. § 7491(b) (plans need to make 

“reasonable progress” toward visibility improvements).

62 See 40 C.F.R. §§ 60.24(a) & 60.25(e).

63 If EPA nonetheless chooses to pursue the approach of requiring all states to achieve a percentage reduction 

from a baseline year, it should provide states with the option of utilizing an earlier baseline that would recognize 

the progress that they have already achieved. It would also be important for EPA to recognize the relationship 

between the baseline year and current reductions already achieved for the purpose of setting the performance 

level. For example, if EPA were to select 2005 as a baseline year, it should recognize that 2011 emissions 

nationwide are already 11 percent below 2005 emissions, and the average power sector emissions rate in 2011 is 

11 percent below the emission rate in 2005. See discussion supra at notes 42, 43.
22

In particular, Section 111 and its implementing regulations already specify that EPA will review, 

and if appropriate, revise its new source regulations every eight years,64 and that it will publish 

draft and final existing source guidelines “[c]oncurrently upon or after” proposing new source 

standards.65 Although the rules thus anticipate revisions, EPA should further clarify this review 

obligation. It should do so by providing, by rule, that it will review and, if appropriate, revise, its 

existing source standards by a date certain, on the same eight-year timeline as applies to its 

new source standards – a sensible provision that will allow EPA to evaluate the power fleet as a 

whole in each review. 

Such regulatory deadlines are not unusual. In the greenhouse gas context, for instance, EPA 

included enforceable deadlines in its “tailoring” rule for major source permitting, requiring the 

agency to regularly revisit its rulemaking over time, as greenhouse gas regulation experience is 

gained.

66 A similar course is appropriate here. A review commitment will make clear to all 

parties that the emissions glide paths will continue to decline long after the first compliance 

period has passed. 

IV.C. Emission Guideline Should Provide a Mass-Based Performance Level 

Option

Many current state greenhouse gas reduction programs, including the programs of states 

participating in RGGI and the California system, are based on limiting emissions to an overall 

quantity expressed as a mass (e.g., tons of CO2). To ensure that these programs can continue 

to operate smoothly to support compliance with the Section 111(d) rules, EPA should provide 

for a mass-based emission budget compliance option, either by articulating the standard as a 

mass-based emission budget, or providing a mechanism for translating from a rate-based 

standard to a mass-based emission budget. 

Such a methodology could apply an emission rate to the projected or historic generation from 

covered power plants in a state. For example, under a projected generation approach, modeling 

would be used to project how a state’s generation from covered sources would change over a 

period of time, and then the EPA emission rate would be applied to that projected quantity of 

electricity generated.67 Using such an approach would take into account changes in demand, 

and would therefore be more comparable to using a rate-based standard, where the emissions

are proportionate to demand. EPA could require states to reduce or offset the projected demand 

growth with readily available energy efficiency improvements (e.g., one percent annually). This

approach could potentially involve a “true-up” as well—a review of whether actual changes in 

 

64 42 U.S.C. § 7411(b)(1)(B). 

65 40 C.F.R § 60.22(a).

66 See 40 C.F.R. § 50.22.

67 Under such an approach, it would be appropriate to require new sources to be subject to the new source 

standard as part of their New Source Performance Standard compliance obligation, as using projected generation 

to compute a state’s emission budget would inherently reflect any new generation required to meet changes in 

load. Such an approach was proposed by EPA in the Clean Air Mercury Rule. 70 Fed. Reg. 28622 (May 18, 2005). 
23

demand and related factors are consistent with projected changes, and a potential adjustment 

to the budget to reflect those changes.68

If a historic generation approach is used, a state’s emission budget would be based on the 

amount of emissions that would have occurred in a baseline year if the state’s power plants had 

generated the same amount of electricity as they did during the baseline year, but had emitted 

at a target emission rate.69 

Note that under these approaches, the emission budget would represent an aggregate budget 

for all covered sources in a state. States choosing to use the emission budget would be required 

to meet the standard in the aggregate, could use all cost-effective measures—such as 

efficiency, renewables, end-use controls, carbon capture and sequestration—to obtain the 

necessary reductions, and could allow averaging of emissions or trading of emissions 

allowances. Or a state could join a regional market-based program, and could demonstrate

compliance if the group of states collectively met the states’ aggregate mass-based standard. 

If EPA articulates the standard as a rate-based standard, and if EPA’s methodology for 

translating from a rate-based standard to a mass-based standard involves accounting for 

projected changes in generation from covered sources, the methodology should be transparent 

and consistent. The methodology should start with reliable, existing federal data sources, 

including the Clean Air Markets Division emissions database and the EIA Annual Energy 

Outlook. EPA should also allow states to seek to use their own data, but EPA should require 

states to rigorously substantiate any changes to projections based on other, non-federal data 

sources.70

IV.D. Emission Guideline Should Recognize that Averaging or Trading Elements 

Necessarily Take into Account Remaining Useful Life

Section 111(d) requires EPA to allow a state, in applying a standard of performance to any 

particular source, to take into consideration the remaining useful life of the existing source to 

which the standard applies.

71

 

68 A system-wide approach to reducing emissions includes reducing electricity demand through energy efficiency 

or displacing demand for fossil fuel-fired generation through additional zero-carbon energy. Therefore any 

projection of demand change or “true-up” should reflect those anticipated electricity savings or displacement.

69 For a simplified example, assume that the standard is 1100 lbs/MWh (the proposed rate for new coal plants), 

and that state “X” has one gas plant and one coal plant, each of 500 MW. In the hypothetical base year of 2013, 

the gas and coal plant together generate 7 million MWh of electricity and emit 5.2 million tons of CO2, at an 

average 2013 rate of 1500 lbs/MWh. The state’s cap in 2025 would assume the same generation--7 million 

MWh—and multiply that by the 2025 rate-based standard-- 1100 lbs/MWh. This yields a cap of 3.8 million tons 

per year, 27 percent less than actual emissions in 2013. Note that this method could be adapted to accommodate 

different rates for different fuels or plant types, such as those proposed in the new plant standard. 

70 EPA should consider providing guidance for how a state can provide a rigorous demonstration of changes from 

specific factors, for example if a state is projecting significant increases in electricity demand due to increased

electric vehicle deployment as a result of state policies that are not reflected in federal projections. 

71 42 U.S.C. § 7411(d)(1). 
24

Programs that include averaging and trading inherently take into account remaining useful life, 

as they allow market participants to make decisions about operations based on market prices.

The owners of an older, inefficient facility nearing retirement need not choose between 

significant modifications to continue operating for only a few years or immediate retirement; 

instead the owners of such a facility could choose to continue to operate for several years and 

comply through the purchase of allowances or through averaging emissions with more efficient 

facilities. In this way, regulated entities may continue to operate facilities that would not be 

economically feasible to operate if emission reductions were required from each facility, but are 

economically feasible to operate under a market-based program. In a market-based or 

averaging program, EPA should consider that allowing states to elect such mechanisms is one 

way to allow states to take into consideration remaining useful life.

EPA should also consider an option for states without such averaging or trading systems to treat 

specific facilities separately, for example, if those facilities enter into a legally enforceable 

agreement to retire by a certain date. If a facility commits to retire during the compliance period, 

a state might not require it to take all the regulatory steps that would be necessary to reduce its 

emissions to the level required at the end of that period, because the source will no longer be 

operating.

For states that use a mass-based approach on a system-wide basis, consideration of useful life 

could support a declining cap on emissions. For example, a system-wide cap could, over time, 

decline to a level that corresponds to the emission level of new fossil-fired plants, as higheremitting existing sources are assumed to retire at the end of their useful lives. Of course, the 

market signals would determine whether those aging systems actually retire or whether the 

required emission reductions would be achieved from other plants reducing their generation.
25

V. EPA Should Allow for a Variety of Rigorous State Compliance Options

V.A. EPA Emission Guidelines Should Allow States to Use Effective Current 

Programs

As we have discussed above, the states have developed a wide array of emissions reductions 

programs that are now operating. EPA should incorporate into its “Best System of Emission 

Reduction” determination all of the approaches that states are already demonstrating achieve 

cost-effective, meaningful reductions from covered sources, including reductions from onsite 

improvements, shifts in generation among covered sources, and displacement from zero-carbon 

generation increases or demand-side efficiency. Even if EPA does not explicitly base the “best 

system of reduction” on the variety of state programs described above, EPA should allow states 

with any effective existing programs the option of using these programs as the basis of 

compliance as long as states can demonstrate through a rigorous, consistent methodology 

identified by EPA that those programs will achieve the required reductions. 

States managing greenhouse gas reduction, energy efficiency, and renewable energy programs 

have built these programs through their own democratic and stakeholder processes, and with a 

deep understanding of conditions within their power grids. To the extent that those programs are 

delivering a substantial portion of the reductions needed to comply with Section 111(d) 

guidelines, EPA should ensure that its federal framework provides states with the option of 

incorporating their current programs with minimal change or burden as long as they achieve 

equivalent reductions. As its governing regulations require, EPA has regularly invited the states 

to propose a range of approaches to meet federal standards, in whole or in part, and we expect 

it to follow the same course here.72

 

72 See, e.g., Emission Guidelines for Municipal Waste Combustors, 60 Fed. Reg. 65,837, 65,402 (Dec. 19, 1995) 

(111(d) rules for municipal waste combustors, inviting states to submit trading plans to meet federal standards); 

Clean Air Mercury Rule, 70 Fed. Reg. 28,606, 28,619 (May 18, 2005) (allowing states to develop their own plans to 

comply with power plant Section 111(d) standards); Clean Air Mercury Rule, 69 Fed. Reg. 12,398, 12,406 

(supplemental proposed Mar. 16, 2004) (allowing states to develop their own plans to comply with power plant 

Section 111(d) standards).
26

V.B. EPA Should Allow and Promote Interstate Cooperation and Regional 

Programs

Many existing programs already have a regional component, and others may well incorporate 

one. EPA should encourage interstate coordination and collaboration, recognizing that the 

electricity system is a complex, interstate system, and that allowing interstate coordination and 

collaboration can reduce costs and help avoid challenges that arise when limiting systems to a 

specific state. Interstate cooperation can also lower the administrative burden on states and 

compliance entities, and helps to resolve equity issues that might otherwise arise between 

power-exporting and power-importing states. 

Interstate programs have already been successful in a variety of contexts. On a national basis, 

as we have noted above, EPA has promoted multi-state trading systems through its Acid Rain 

Program and Cross-State Air Pollution Rule, as well as efforts to decrease regional haze and to 

address ozone transport issues between and among the states.73 These programs are 

frequently identified as being highly cost-effective.74

RGGI is a prime example of how an interstate program helps to ensure that the most costeffective emission reductions occur across the region. Since the program began, coal-fired 

plants closed within the RGGI region and the capacity of those plants was replaced by 

increased generation from cleaner and more efficient renewable and natural gas powered 

sources elsewhere in the region. Indeed, emissions in at least one state actually increased, 

because that state is the location of some of the more efficient natural gas-fired power plants in 

the region that had excess capacity. 

As RGGI demonstrates, a program that corresponds with or is more closely aligned with the 

borders of an electricity grid (for example, among states in the same NERC interconnections or 

regional transmission organizations) is potentially more efficient than programs that are 

constrained by state borders. 

A regional program can also avoid market distortions that would result in less than optimal 

policy decisions due to some of the interstate issues raised by EPA in its questions. For 

example, if one state’s energy efficiency investments reduce emissions in a neighboring state, a

regional program that encompasses both states would be able to reap the emission reduction 

benefits of that energy efficiency under a regional emissions cap.

 

73 Acid Rain Program, Clean Air Act Title IV, 42 U.S.C. §§ 7651-7651o; 40 C.F.R. Parts 72-28 (Acid Rain Program 

implementing regulations, establishing interstate trading program); Cross State Air Pollution Rule, 76 Fed. Reg. 

48208, 48210 (Aug. 8, 2011) (establishing state trading programs that allow interstate trading); Regional Haze

Regulations, 64 Fed. Reg. 35,714, 35,715 (July 1, 1999) (allowing multi-state approaches to controlling regional 

haze); Overview of the Ozone Transport Commission NOx Budget Program, U.S. Environmental Protection Agency, 

http://www.epa.gov/AIRMARKET/progsregs/nox/otc-overview.html (describing Northeastern states 

implementation of NOx budget trading program); NOx SIP Call, 63 Fed. Reg. 57,359 (Oct. 27, 1998) (establishing 

recommended multi-state budget trading program to control ozone precursor NOx). 

74 See, e.g., William F. Pederson, Should EPA Use Emissions Averaging or Cap and Trade to Implement §111(d) of 

the Clean Air Act?, 34 Env. L Rptr. 10731 (2013). 
27

V.C. EPA Should Provide Guidance on How to Address Interstate Issues such as 

Double-Counting. 

Regional collaboration on state Section 111(d) plans can directly address double-counting, 

either through coordination of compliance systems or through agreements on how to address 

any double-counting problems. In order to promote such regional cooperation, EPA and DOE 

should make available information about regional electricity flows and interstate impacts of state 

programs and policies. EPA should consider providing guidance on how states can collaborate 

regionally on implementation plans. For example, EPA should allow states using mass-based 

emission budgets to “pool” emission budgets, and to demonstrate how their state plans will 

jointly achieve an aggregated emission budget. 

But not all states may opt to join regional plans, and clear accounting will be important between

and among different regions.

EPA should also provide guidance on how it will address complications that may arise due to 

the use of different types of state programs. Such complications include situations where one 

state proposes a program that would achieve reductions through the displacement of fossil fuel 

generation due to the state’s renewable portfolio standards, long-term power purchase 

agreements, energy efficiency resource standards, or similar state policies, but where the actual 

reduction of emissions from fossil generation takes place in another state. If EPA provides a 

state with credit from emission reductions occurring outside its borders, EPA must establish a 

process for ensuring that states that see their emissions reduced as a result exclude the 

resulting emissions reductions from their compliance demonstration. A similar situation would 

arise when a state seeks compliance through planned shut-downs of fossil fuel generation, but 

then would see that generation replaced by increased carbon generation in another state. 

V.D. EPA Should Work with States to Develop Compliance Pathways and Model 

Rules

To help states develop state-level and regional plans, EPA should work with states to develop 

compliance pathways for existing programs, for example by developing model State Plans in 

collaboration with states or making clear that model State Plans developed by states are 

approvable. (See section VII below for proposed RGGI and State Portfolio compliance 

pathways). 

As part of this work, EPA should develop a procedure for allowing states to demonstrate 

equivalency with the emission guideline, even if EPA does not explicitly contemplate a state’s 

program type in a model rule. Such a procedure should ensure that equivalent reductions will be 

achieved through the use of consistent evaluation and quantification methods, as discussed 

below.

In order to meet the timetable in the Presidential Memorandum requiring states to submit plans 

by June 30, 2016, EPA should provide a clear indication that it expects certain compliance 

pathways to be approvable prior to its publication of the final rule by July 1, 2015. 

V.E. EPA Should Ensure Consistent Evaluation and Quantification of State Plans

Accommodating a range of state and regional program designs will require EPA to provide

program evaluation metrics along with the draft guidelines. Those metrics should offer a 

transparent, nationally consistent, and readily usable way for states to evaluate their existing 

programs to determine whether they suffice to comply with the guideline’s emissions level, or if 

additional reductions will be required. By setting out these goal posts early, EPA will make it 
28

easier for states to quickly advance strong programs through the Section 111(d) process, and to 

identify ways to improve weaker ones.

EPA should build on current program evaluation guidance such as the “Roadmap for 

Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State and Tribal 

Implementation Plans”

75 or the State and Local Energy Efficiency Action Network’s “Energy 

Efficiency Program Impact Evaluation Guide.”

76 These guides describe the terminology, 

structures, and approaches used for evaluating energy and demand savings as well as methods 

for calculating avoided emissions and other non-energy benefits resulting from energy efficiency 

programs that are implemented by local governments, states, utilities, private companies, and 

nonprofits. They provide context, planning guidance, and discussion of issues that help illustrate

appropriate evaluation objectives and approaches for different efficiency portfolios. By 

promoting the use of standard evaluation terminology and structures and approaches, 

evaluations can support the adoption, continuation, and expansion of effective efficiency actions 

for consistent inclusion in State Plans. EPA and DOE should continue to work with state and 

local energy and environmental agencies to ensure that renewable energy and energy efficiency

programs are evaluated transparently and consistently so that appropriate credit is provided for 

these programs.

Energy efficiency evaluation methodologies are particularly important for programs ranging from 

LED lighting replacement to combined heat and power projects. Consistent quantification 

methodologies are needed for projecting reductions in energy use as part of a baseline energy 

use forecast and for calculating reductions documented after-the-fact as part of a compliance 

effort.

 

75 EPA EE/RE Roadmap, supra note 49. 

76 State and Local Energy Efficiency Action Network, Energy Efficiency Program Impact Evaluation Guide (2012), 

www1.eere.energy.gov/seeaction/impactguide.
29

V.F. EPA Should Coordinate Efforts with Other Relevant Federal and State 

Agencies

Implementing the guidelines will be a collaborative effort between and among numerous federal

and regional entities, as well as with the states. We trust that EPA will work particularly closely 

with federal and state energy regulators, including the Federal Energy Regulatory Commission 

(FERC), the Department of Energy (DOE), and through the National Association of Regulatory 

Utility Commissioners (NARUC), state utility regulators, as well as regional grid operators and 

reliability coordinators. This work will be critical to developing durable system-level standards 

and accessing state plans employing a variety of policies that may affect the grid. Strong 

collaboration between EPA and the energy regulators will also be important to make sure that 

these entities provide maximum support to states investing in emissions controls, by ensuring 

that energy markets are designed and operated in a way that ensures that clean energy 

investments are fully valued and able to participate.

Initially, we urge EPA to work particularly closely with DOE in order to develop clear evaluation 

metrics and modeling tools that EPA and the states can use to assess their various grid-level 

programs against the level of the emission guidelines, and to assess compliance pathways. As 

these programs move forward, EPA should also work with FERC and regional grid entities to 

ensure that reliability-related issues are addressed early in the process, without delaying 

Section 111(d)’s implementation, just as EPA has done during other Clean Air Act rulemakings. 

FERC’s recent Order 1000, which is helping to integrate public policy mandates into grid 

planning, should help with this process by enabling measures that complement and support 

states’ emission reduction strategies. EPA should work with FERC, the grid operators, and the 

states to ensure that the effects of Section 111(d) plans are accounted for in planning early and 

that any necessary costs are allocated equitably to the affected parties. It will be important for 

the regional and inter-regional grid plans to be able to account for changes driven by Section 

111, and to properly allocate any resulting costs.

FERC should also support transmission upgrades that facilitate increased reliance on 

renewable generation.

States will also need help from federal energy regulators to properly deploy their plans. We trust 

the energy regulators will help states assess the effects of their policy proposals, and to design 

effective grid-related programs, and ask that EPA help to coordinate efforts in this direction. 

Likewise, it is vitally important that federal programs not present unnecessary impediments to 

state efforts. All members of the federal family should support ambitious carbon pollution 

reduction efforts. We remain concerned, for instance, that the Federal Housing Finance Agency 

continues to complicate financing for the Property Assessed Clean Energy (PACE) program, 

which should be providing a ready funding stream to help further clean energy improvements. 

EPA, working with the White House Council on Environmental Quality and other federal 

coordinating bodies, should ensure that the states do not face conflicting federal messages as 

they work to reduce carbon pollution.
30

VI. Specific Compliance Models that EPA Should Work with States to Develop

VI.A. Regional Budget Trading Programs as a Compliance Pathway

EPA’s guidelines should recognize the regional nature of electrical grids by allowing 

participating states to demonstrate compliance with Section 111(d) guidelines on a regional 

basis. 

In a regional budget trading program, overall emissions are capped and sources comply by 

holding emission allowances equal to their emissions. Individual states participating in a 

regional program may also reduce emissions through a variety of state-specific energy 

programs like renewable portfolio standards and energy efficiency programs. The regional 

emission cap can operate as an umbrella, encompassing and accounting for the emission 

reductions from these complementary programs. Because overall emissions are limited by the 

emissions cap, the complementary programs would not need to be federally enforceable. The 

complementary programs also serve to reduce the cost of complying with the regional 

emissions cap. RGGI offers one example of this approach.

Under Section 111(d), the states in the regional budget trading program could be given the 

option of demonstrating in each of their individual state plans that the overall regional emissions 

cap—which is made up of each individual state’s emission budget—collectively meets EPA’s 

standard for the region as a whole. As long as the overall regional emissions cap complies with 

the guidelines, it should be immaterial to EPA how the participating states elect to apportion the 

regional emissions cap among the states. Likewise, although a particular state’s actual 

emissions could theoretically exceed its individual state emission budget in a particular year, 

this should not affect EPA’s ability to accept a regional program as a pathway for compliance. 

As long as the regional program demonstrates that emissions from sources within the region will 

collectively meet EPA’s emission guideline, it can serve as the basis for individual state plans. 

As long as EPA provides a mechanism that enables states to have an annual mass-based 

emissions budget under Section 111(d), then determining whether a regional budget trading 

program is equivalent to EPA’s emission guideline will be a simple matter. In particular, the 

participating states will have to demonstrate that the annual regional emission cap under the 

regional program achieves emission reductions equal to or greater than those required by 

EPA’s guidelines.

Although determining equivalency for a regional program like RGGI will generally be 

straightforward, EPA should develop a mechanism to address any differences in the scope of 

sources covered by the Section 111(d) guidelines and the scope of sources subject to the 

requirements of the emission budget trading program. For example, depending on the final 

shape of EPA’s guidelines, it is possible that RGGI could include certain smaller sources that 

may not be covered by EPA’s Section 111(d) guidelines. If the regional budget meets EPA’s 

guidelines even with those additional sources, it clearly suffices. If the additional sources cause 

the regional budget to be higher than the guidelines, the participating states would demonstrate, 

using a rigorous and equitable methodology prescribed by EPA, that emissions from the 

sources covered by Section 111(d) would comply with EPA’s guidelines. 

Regional budget trading programs may have design elements intended to limit sharp cost 

escalations. For example, RGGI allows sources to use offsets for a small portion (three percent) 

of their compliance obligations, and the program revisions that will take effect in 2014 include a 

Cost Containment Reserve (CCR), which allows the distribution of a limited amount of additional 

allowances if prices exceed specified levels. These elements are intended to respond to 

unforeseen market conditions, such as greater-than-anticipated demand growth, but they may 
31

lessen emission reductions. In their implementation plans, the participating states could either 

demonstrate that these design elements will not allow emissions in excess of those allowed by 

EPA’s emission guideline, or include supplemental measures to ensure consistency with EPA’s 

guideline. 

Under a budget trading program like RGGI, enforceability, measurement, and verification are 

already incorporated into the program in a straightforward matter. In terms of enforceability, 

sources subject to a budget trading program like RGGI are required to obtain and hold a 

sufficient amount of allowances by the relevant compliance deadline to cover emissions over 

the relevant compliance period. Under the existing terms of RGGI states’ respective 

implementing regulations, this is a regulatory requirement that is generally incorporated as a 

condition of each source’s operating permit. 

Thus, under a regional budget trading program, an emission cap is enforceable directly against 

individual sources in a state where the sources are located, and the failure of a source to hold 

sufficient allowances would violate the state’s program and the source’s permit. Under an 

approved Section 111(d) plan, this obligation of each individual source to comply with the 

budget trading program would become a federally enforceable condition of an individual 

source’s Title V permit. At the end of the compliance period, the “true-up” process, in which 

states deduct allowances to cover sources’ emissions, provides verification that the emission 

reductions included as part of the participating states’ 111(d) plans are actually achieved.

VI.B. Portfolio of State Programs as a Compliance Pathway

As we discuss above, because Section 111(d)-covered fossil plants are embedded in larger 

power grids, states can reduce emissions through a wide array of programs that improve the 

performance of the grid as a whole, as well as addressing the plants themselves. Such 

“portfolio” approaches would integrate an array of programs to reduce emissions from Section 

111(d) sources. Because the breadth of such approaches provides an effective platform for 

emission reductions, EPA should ensure that its proposed Section 111(d) guidelines can 

accommodate them. EPA’s Roadmap for Incorporating Energy Efficiency and Renewable 

Energy in State Implementation Plans provides a sound foundation for that effort.

In essence, a state putting forward a portfolio plan would demonstrate to EPA that its collection 

of programs can collectively achieve the emissions reductions required by EPA’s Section 111(d) 

guidelines. These programs might include, for example, energy efficiency standards that reduce 

demand now being satisfied by fossil plants, renewable energy standards that increase the 

amount of emission-free power on the grid, and dispatch rules that favor lower-carbon sources 

of energy over higher-carbon sources. Thus, by chipping away at demand for fossil power, 

introducing new supplies, and lowering the emissions from any fossil generation that is required, 

states would implement durable grid-level reforms to comply with Section 111(d).

Many states have programs that could help support such an approach. At least thirty states 

have enforceable renewable portfolio standards, and at least another seven have policy goals to 

increase renewable power in their states.77 Similarly, although state energy efficiency efforts 

 

77 Most states have renewable portfolio standards, U.S. Energy Information Administration, 

http://www.eia.gov/todayinenergy/detail.cfm?id=4850.
32

vary widely in stringency, almost all states have implemented at least some such programs, 

some very aggressively.78 

Some states have taken particularly comprehensive approaches. These include California, 

whose AB 32 programs and related energy sector work include a 33 percent renewable portfolio 

standard requirement by 2020,79 extensive energy efficiency standards, and an economy-wide 

cap-and-trade program, among other efforts. 

We expect states to present these programs to EPA in one of two general ways, both outlined in 

the Roadmap:

Some states may choose to present many of their programs as federally-enforceable “control 

strategies” within their Section 111(d) plans.80 Under that approach, EPA and the state would 

share enforcement authority over the state’s portfolio of programs, and EPA could either call for 

plan revisions or enforce directly against a regulated party if required emissions reductions were 

not forthcoming.81

We anticipate, however, that most states will prefer to instead use EPA’s “[b]aseline emissions 

projection pathway.”82 Under that pathway, states first canvass existing energy efficiency and 

renewable energy programs (among other programs that may affect emissions of Section 

111(d) programs) and project the emissions of covered Section 111(d) sources as those 

programs operate over the course of the compliance period.83 If the portfolio operates as 

intended, those projections will likely show that the portfolio programs substantially limit section 

Section 111(d) source emissions. 

Because the portfolio of programs constraining section Section 111(d) emissions forms the 

background for future emissions projections, the programs themselves are not part of the state’s 

federally-enforceable section Section 111(d) plan, as long as other compliance obligations limit 

emissions.

84 For example, in California, emissions are limited by the multi-sector emissions cap, 

and California would demonstrate that the energy efficiency and renewable energy programs, 

coupled with sources’ obligation to hold allowances, limit emissions from the power sector 

sources to below the state’s Section 111(d) budget. 

The acceptability of this demonstration turns upon the rigor of the modeling used to test various 

baseline assumptions. We therefore anticipate working with EPA to develop a modeling “toolkit” 

that would outline program evaluation methods and acceptable modeling protocols and 

assumptions for use in such analyses. Such evaluation tools would be used to demonstrate, at 

 

78 See generally State Energy Efficiency Scorecard, American Council for an Energy Efficient Economy (2012), 

http://aceee.org/state-policy/scorecard.

79 See, e.g., Cal. Public Utilities Commission, Renewable Portfolio Standard: Quarterly Report, 1st Quarter 2013 

(2013), http://www.cpuc.ca.gov/NR/rdonlyres/384E3432-6EAB-4492-BF88-

992874A7B978/0/2013_Q1RPSReportFINAL.pdf. 

80 EPA EE/RE Roadmap, supra note 49, Appendix F: Control Strategy Pathway.

81 We note, in this regard, that EPA’ Section 111(d) regulations do allow state agencies other than the state air 

pollution agency – such as a utility commission which may have primary responsibility over renewable portfolio 

requirements -- to enforce portions of Section 111(d) plans. See 40 C.F.R. § 60.26(d).

82 See EPA EE/RE Roadmap, supra note 49, at 33.

83 Id. at Appendix E: Baseline Emissions Projection Pathway (explaining this process).

84 Id. at E-6.
33

a minimum, that, under a reasonable range of starting assumptions, Section 111(d) source 

emissions will fall below guideline levels by the time compliance is due, and will not then rise 

above those levels at any time thereafter. 

While many of the grid-level programs themselves are not federally-enforceable under this 

approach, sources remain accountable for their emissions and could be subject to federal 

enforcement if necessary. In states with cap-and-trade programs, for instance, sources could be 

required to hold sufficient allowances to cover their emissions as a federally-enforceable 

program condition, just as in the RGGI example above. To show that this condition suffices to 

guarantee compliance, a state could demonstrate that its Section 111(d) source emissions will 

follow an acceptable trajectory as a result of the state portfolio of programs, and that the capand-trade system’s allowance allocation likewise follows this trajectory under all reasonably 

probable trading outcomes. If that demonstration is made, requiring covered sources to hold 

allowances to cover their emissions would guarantee compliance because those sources would 

not be able to acquire sufficient allowances to exceed the aggregate emission level required by 

the Section 111(d) guidelines.85 

States that don’t have existing cap-and-trade programs could propose such programs as a 

backstop obligation for covered sources. Alternatively, a similar result could be achieved by 

modeling how many hours covered sources may run without exceeding the guidelines (while 

taking reliability needs into account). Programs to reduce fossil demand will reduce the need for 

fossil sources, and so reduce their operating hours. States could then incorporate 

commensurate operating hour restrictions into the operating permits for covered sources. 

We believe that this portfolio approach would apply to groups of states submitting joint plans. In 

that circumstance, states would undertake the modeling exercises together, thereby accounting 

for the total impact of all programs on sources within their boundaries. 

In sum, the portfolio approach is a natural extension of the baseline modeling states routinely do 

when developing state implementation plans for air quality programs. Such existing programs 

form an important foundation for these new planning efforts and can even potentially contribute 

substantively to achieving required emission reductions if they are sufficiently stringent. As long 

as states develop clear mechanisms to hold sources to the modeled emission trajectories, and 

commit to regular program evaluations and necessary revisions, this portfolio approach provides 

an important way of recognizing state efforts to reduce emissions across the grid.

 

85 If there were a serious question as to whether the portfolio (including the allowance market) would function as 

expected, states could also consider developing an additional, automatic, backstop mechanism which might 

require sources to retire additional allowances if emissions trajectories deviated sharply from what modeling had 

predicted.
34

VII. Appendix: State Experiences with Reducing Carbon Pollution

Individual descriptions of state experiences with reducing carbon pollution in the electricity 

sector are provided in this appendix.

VII.A. California

California has implemented a suite of programs to meet its goals of reducing greenhouse gas 

emissions to 1990 levels by 2020 and 80 percent below 1990 levels by 2050.86 These policies 

include groundbreaking energy efficiency programs, the most ambitious renewable energy 

programs in the country, and a multi-sector cap-and trade program. 

California’s energy efficiency standards are the bedrock upon which its climate policies are 

built.87 Energy efficiency is the first resource procured under California’s loading order.88

Because California has decoupled utility profits from sales and offered utilities the opportunity to 

profit from efficiency, its utilities have strong incentives to pursue these savings.89 Savings are 

projected at nearly 70 million megawatt hours (MWh) in 2013 alone.90 California’s efficiency 

efforts are an economic driver; the state produces twice as much economic output per kilowatthour than the national average.91 The California Energy Commission estimates that efficiency 

standards have generated $74 billion in savings for Californians.92 According to independent 

analysts, California’s average monthly residential energy bills are 25 percent below the national 

average.93 Analysts have concluded that hundreds of thousands of jobs can be created by the 

program.94

California strives to fill any remaining energy needs with renewable energy. California’s 

Renewable Portfolio Standard (RPS) requires that 33 percent of electricity come from 

renewable sources by 2020.95 Companies have responded with large-scale renewable projects 

and citizens have installed small-scale renewable energy. California has 15,000 megawatts 

 

86 See Cal. Air Res. Bd., Climate Change Scoping Plan 31-32, 41-46 (2008), available at 

http://www.arb.ca.gov/cc/scopingplan/document/adopted_scoping_plan.pdf.

87 See generally Cal. Energy Commission, Tracking Progress: Energy Efficiency (2013), 

http://www.energy.ca.gov/renewables/tracking_progress/documents/energy_efficiency.pdf.

88 Cal. Energy Commission, Implementing California’s Loading Order for Electricity Resources (2004), 

http://www.energy.ca.gov/2005publications/CEC-400-2005-043/CEC-400-2005-043.PDF.

89 See State Energy Efficiency Database: California, American Council for an Energy-Efficient Economy, 

http://aceee.org/sector/state-policy/california. 

90 Id.

91 Id.

92 See Id.

93 Devra Wang, Natural Resources Defense Council, California’s Energy Efficiency Success Story (2013), 

http://www.nrdc.org/energy/files/ca-success-story-FS.pdf.

94 David Roland-Holst, Energy Efficiency, Innovation, and Job Creation in California 35 (2008), 

http://are.berkeley.edu/~dwrh/CERES_Web/Docs/UCB%20Energy%20Innovation%20and%20Job%20Creation%20

10-20-08.pdf.

95 See California’s Renewables Portfolio Standard (RPS), Cal. Public Utility Commission, 

http://www.cpuc.ca.gov/PUC/energy/Renewables/index.htm.
35

(MW) of installed renewable capacity, more than doubling its installed capacity since 2002.96 

In 2012, California served about 22 percent of retail energy sales with renewable energy.97 

Proponents of the RPS believe the measure could generate $60 billion and create up to 

235,000 jobs.98 The RPS avoided 3.5 million metric tons of CO2e in 2011 alone.99

California is also a leader in deploying small renewable energy systems. In 2007, the state 

launched the California Solar Initiative, a first-of-its kind effort to deploy 3,000 MW of rooftop 

solar photovoltaic (PV) systems and create a self-sustaining market for the technology. It is on 

track to meet its goal two years early, creating thousands of local jobs and spurring 

technological innovation.100

Importantly, California’s cap-and-trade program includes power plants. By placing a price on the 

carbon content of electricity, the program encourages use of cleaner electricity.101 

The state is also promoting energy storage efforts which will help further integrate renewable 

power into the grid,102 investing in development of other low-emission technologies,103

implementing a GHG permitting program for new major sources of carbon pollution, and 

maintaining a GHG emission reporting system.104

These efforts support one of the lowest-emitting electricity systems in the country. California’s 

in-state fossil generation is almost entirely natural gas-fired,105 and the state is rapidly phasing 

out imported power from higher-emitting coal-fired power plants. These coal imports represent 

only about 10 percent of California’s energy portfolio, and are expected to decline by nearly 

two-thirds by 2020.106

As a result of these efforts, California’s utility sector’s GHG emissions have continued to 

decline. Based upon the Air Resources Board’s initial analysis, emissions from in-state and 

imported power fell by 16 million metric tons, or 16 percent, from 2005 to the 2010-12 

 

96 Cal. Energy Commission, Tracking Progress: Renewable Energy (2013), 

http://www.energy.ca.gov/renewables/tracking_progress/documents/renewable.pdf.

97 Id.

98 Office of Senate Floor Analyses, Bill Analysis for 2011 Senate Bill 2X1 at 10 (2011), 

http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0001-0050/sbx1_2_cfa_20110223_155225_sen_floor.html.

99 Cal. Environmental Protection Agency, State Agency Greenhouse Gas Reduction Report Card 10, 16 (2013), 

http://www.climatechange.ca.gov/climate_action_team/reports/2013_CalEPA_Report_Card.pdf.From 2008-2011.

100 Cal. Solar Initiative 2013 Annual Program Assessment, Cal. Public Utilities Commission, 

http://www.cpuc.ca.gov/PUC/energy/Solar/2013_Annual_Program_Assessment.htm

101 See generally Cal. Air Resources Board, Proposed Regulation to Implement the California Cap and Trade 

Program, Initial Statement of Reasons (2010), http://www.arb.ca.gov/regact/2010/capandtrade10/capisor.pdf.

102 Electric Energy Storage, Cal. Public Utility Commission, (2013), 

http://www.cpuc.ca.gov/PUC/energy/electric/storage.htm.

103 Electric Program Investment Charge, Cal. Energy Commission, http://www.energy.ca.gov/research/epic/.

104 Mandatory Greenhouse Gas Reporting, Cal. Air Resources Board, (2013), 

http://www.arb.ca.gov/cc/reporting/ghg-rep/ghg-rep.htm.

105 Cal. Energy Commission, Tracking Progress: Installed Capacity (2013), 

http://www.energy.ca.gov/renewables/tracking_progress/documents/installed_capacity.pdf.

106 Cal. Energy Commission, Tracking Progress: Current and Expected Energy from Coal in California (2013), 

http://www.energy.ca.gov/renewables/tracking_progress/documents/current_expected_energy_from_coal.pdf. 
36

averaging period (from 108 million metric tons CO2e to 91 million tons CO2e).107 By 2025, 

California expects to cut utility sector emissions to below 80 million metric tons CO2e, a roughly 

25 percent reduction from 2005 levels.108 Carbon emissions from all generation are expected to 

decline over the 2005-2025 period, with emissions from in-state generation projected to drop by 

9 million metric tons and from imported power by 20 million metric tons. California’s carbon 

emissions rates have also fallen, from approximately 1,245 lbs CO2e/MWh for fossil generation 

(considering both in-state and imported power) and 875 lbs CO2e/MWh for all power in 2005 to 

an average of approximately 1,090 lbs CO2e/MWh and 775 lbs CO2e/MWh in the three years 

before 2012. Those rates are expected to decline to an estimated rate in the range of 830 lbs 

CO2e/MWh for fossil sources and of about 581 lbs CO2e/MWh for all generation by 2025.

 

107 Cal. Air Resources Board analysis, based in part on CARB, 2008 to 2012 Emissions for Mandatory Greenhouse 

Gas Emissions Reporting Summary, http://www.arb.ca.gov/cc/reporting/ghg-rep/reported-data/2008-2012-ghgemissions-summary.pdf (last visited Nov. 13, 2013). Analysis is preliminary, but representative. Emissions in 2012 

were relatively higher than in recent years because of relatively low hydroelectric generation and the unexpected 

shutdown of the San Onofre Nuclear Generating Station, but the state remains on course to meet emissions 

targets.

108 Cal. Air Resources Board analysis.
37

VII.B. Colorado

Colorado is on track to achieve a 29 percent reduction in carbon dioxide emissions by 2018109

and has experienced significant growth in renewable power in recent years.110 Policies to 

promote energy efficiency, support renewable energy, and reduce carbon pollution play an 

important role in Colorado’s energy outlook, including Colorado’s Clean Air – Clean Jobs Act. 

Colorado’s efforts to reduce carbon pollution will also result in reductions in other air pollutants 

and promote cleaner energy sources to meet electricity needs while promoting economic 

development. 

To support greater energy efficiency—and reduce energy costs—Colorado law requires a 

5 percent reduction from 2006 electricity sales by 2018 and 5 percent reduction from 2006 peak 

demand by 2018.111 In 2012, the electricity demand-side management plans of the Public 

Service Company of Colorado and Black Hills Energy resulted in net economic benefits of 

$103.7 million.112 Energy efficiency goals set for Xcel Energy and Black Hills Energy under the 

law reduced CO2 emissions by 1 million tons from 2009 to 2011.113

In 2010, Colorado increased its Renewable Energy Standard (RES) from 20 percent to 30 percent

by 2020 for investor-owned utilities.114 Under legislation passed in 2013, larger rural electric 

co-ops must meet a 20 percent renewable target by 2020, while smaller co-ops and most 

municipal utilities have a 10 percent target.115 Caps on retail cost increases address concerns 

about price spikes for consumers.

116 The RES is projected to create more than 33,000 jobs 

during construction and $4.3 billion in lifetime economic output.117 These benefits are in addition 

to some 30 million tons of avoided CO2.

118

The Clean Air – Clean Jobs Act enacted in 2010 will significantly reduce air pollution, including 

GHG emissions, while improving public health, supporting in-state energy production, and 

spurring job creation. The law, which was supported by a diverse group of stakeholders,

 

109 Per Colo. Department of Public Health and Environment. 

110 EIA State Generation, supra note 4. 

111 Colo. Rev. Stat. § 40-3.2-104 (2013).

112 Colo. Public Utility Commission, 2013 Report to the Colorado General Assembly on Demand Side Management 6 

(2013), http://cdn.colorado.gov/cs/Satellite/DORA-PUC/CBON/DORA/1251638492924.

113 Southwest Energy Efficiency Project, House Bill 07-1037: A Success Story for Homes and Businesses in Colorado 

Serviced by Xcel Energy and Black Hills Energy (2011), 

http://www.swenergy.org/news/news/documents/file/CO%20House%20Bill%201037%20fact%20sheet.pdf.

114 Colo. House Bill 10-1001 (2010); see Colo. Governor’s Energy Office, Colorado’s 30% Renewable Energy 

Standard: Policy Design and New Markets 3 (2010), http://cnee.colostate.edu/graphics/uploads/HB10-1001-

Colorados-30-percent-Renewable-Energy-Standard.pdf.

115 Colo. Senate Bill 13-252 (2013).

116 See Press Release, Gov. Hickenlooper Signs Executive Order, Issues Signing Statement Related to SB13-252 (June 

5, 2013), 

http://www.colorado.gov/cs/Satellite?c=Page&cid=1251643166067&p=1251643166067&pagename=GovHickenlo

oper%2FCBONLayout. 

117 Colo. Governor’s Energy Office, Colorado’s 30% Renewable Energy Standard: Policy Design and New Markets 10 

(2010), http://cnee.colostate.edu/graphics/uploads/HB10-1001-Colorados-30-percent-Renewable-EnergyStandard.pdf.

118 Id.
38

including utilities, environmental groups, the natural gas industry, and state officials, requires 

utilities to develop plans to reduce air pollution emissions from dirtier plants.

119 Xcel Energy, 

Colorado’s largest utility, anticipates reducing its emissions of CO2 in Colorado by 28 percent,

NOX by 86 percent, SO2 by 83 percent, and mercury by 82 percent by 2020 under the law (Xcel 

Energy was also a participant in this dialogue).

120 Xcel’s plan is predicted to have a positive 

economic impact of $590 million on the state from 2010 to 2026, and to create about 1,500 jobs 

during peak construction.

121

Colorado’s electricity generation mix is made up of 10 percent renewables, 62 percent coal, and 

27 percent natural gas.122 From 2005-2011, power generation from wind jumped 570 percent

providing 4.4 million MWh—a significant increase that in part reflects the effectiveness of the 

state’s RES.123 During this time, Colorado’s CO2 emissions declined by 1.9 million tons and its 

CO2 emissions rate dropped 7.9 percent while power generation increased 3.7 percent.

124

 

119 See Press Release, Gov. Ritter, Bipartisan Lawmakers & Coalition Introduce Colorado Clean Air-Clean Jobs 

Legislation (Mar. 16, 2010), 

http://www.colorado.gov/cs/Satellite%3Fc%3DPage%26childpagename%3DGovRitter%252FGOVRLayout%26cid%

3D1251573201310%26pagename%3DGOVRWrapper. 

120

 Colorado Clean Air – Clean Jobs Act, Xcel Energy,

http://www.xcelenergy.com/Environment/Doing_Our_Part/Clean_Air_Projects/Colorado_Clean_Air_-

_Clean_Jobs_Plan. 

121 Id.

122 Generation, Colo. Energy Office, 

http://www.colorado.gov/cs/Satellite/GovEnergyOffice/CBON/1251599939003.

123 EIA State Generation, supra note 25. 

124 Id.
39

VII.C. Connecticut

Connecticut’s early leadership to mitigate the effects of climate change produced its 2005 

Climate Change Action Plan, which included increasing investments in energy efficiency, 

supporting the expansion of Connecticut’s Renewable Portfolio Standard (RPS), and 

participation in the Regional Greenhouse Gas Initiatives (RGGI) among its top ten strategies for 

reducing the state’s greenhouse gases emissions.

125 The strategies embodied in that plan set 

Connecticut on a firm trajectory toward meeting the emissions reductions requirements of the 

state’s 2008 Global Warming Solutions Act: a 10 percent reduction from 1990 emissions by 

2020 and an 80 percent reduction from 2001 emissions by 2050.126

From 2005 to 2011, Connecticut expanded climate mitigation efforts to include initiatives on: 

clean cars, green building standards, smart growth, appliance standards and an expansion of 

energy efficiency to include oil heat customers.127 As a result of these actions statewide GHG 

emissions decreased by nearly 5 percent from 1990 levels; bringing Connecticut almost halfway 

to its 2020 goal under its Global Warming Solutions Act. At the same time, Gross State Product 

has increased by 64 percent.

128

Between 2005 and 2011, Connecticut reduced annual emissions of carbon dioxide from its 

power sector by nearly 30 percent (from 11.7 to 8.2 million metric tons) and reduced the carbon 

intensity of its generating fleet by 30 percent (from 766 lbs/MWh to 535 lbs/MWh)129 due to 

reductions in energy consumption and a shift to cleaner generation sources, catalyzed by 

successful state air quality regulations, including the Regional Greenhouse Gas Initiative 

(RGGI); improved economics and supply of natural gas as a fuel for power generation; 

investments in energy efficiency; and increased deployment of renewable energy sources 

through the RPS and other market-based tools.

Connecticut is saving energy and reducing emissions every year through investments in energy 

efficiency as the state pursues its statutory goal of “all cost effective energy efficiency” through 

its utility-administered, conservation and load management programs. Each $1 invested in 

these programs provides direct energy savings for participating residents and businesses, and 

results in more than $2 of system-wide benefits. Since 2006, the State’s energy efficiency 

programs have resulted in average annual electricity savings of more than 300 million 

kilowatt/hrs per year,130 which is enough electricity to power more than 30,000 homes for a year. 

Connecticut’s efficiency programs have helped reduce electricity consumption by 10 percent

 

125 Conn. Climate Change Action Plan (2005), 

http://www.ct.gov/deep/lib/deep/climatechange/ct_climate_change_action_plan_2005.pdf.

126 An Act Concerning Connecticut Global Warming Solutions, Public Act No. 08-98, 

http://www.cga.ct.gov/2008/ACT/PA/2008PA-00098-R00HB-05600-PA.htm. 

127 Climate Actions, Conn. Department of Energy & Environmental Protection, 

http://www.ct.gov/deep/cwp/view.asp?a=4423&q=530720&DEEPNAV_GID=2121. 

128 Calculated based on Federal Reserve Economic Data, http://research.stlouisfed.org/fred2. 

129 Calculated from EIA data. EIA State Generation, supra note 4. 

130 Conn. Statewide Energy Efficiency Dashboard, http://www.ctenergydashboard.com/Public/PublicHome.aspx
40

from 2005 levels,131 resulting in avoiding the emission of more than 2 million tons of carbon 

dioxide. 

Connecticut’s renewable portfolio standard (RPS) requires all retail electricity suppliers to obtain 

at least 27 percent of their supply from renewable sources by 2020.132 In recent years, 

Connecticut has launched new initiatives that harness market forces to boost the supply of lowcost, in-state renewables. Small-scale (up to 1-2 MW) renewable distributed generation projects 

can compete for long-term power purchase agreements that Connecticut’s electric distribution 

companies are required to offer through reverse auctions.133 These projects support local 

economic development and also reduce local electricity consumption. Additionally, through 

various innovative financing mechanisms from the Clean Energy Finance and Investment 

Authority (CEFIA), Connecticut’s groundbreaking “green bank,” installed solar capacity within 

the state continues to grow.134 CEFIA has also employed its model of leveraging state funding to 

attract private capital and investment in clean energy to ramp up the deployment of fuel cells 

throughout Connecticut. As a result of these programs, the state has increased its deployment 

of in-state renewables more than ten-fold since 2010, and will deploy more than 55 MW in 

2013.135 At the regional level, in 2013, Connecticut’s electric companies have signed long-term 

power purchase agreements that will bring more grid-scale solar and wind to the regional 

wholesale power market, while staying on track to meet its RPS goals and displace fossil fuel 

generating units.

Connecticut participates in RGGI, the nation’s first market-based, regulatory program to cap and 

reduce greenhouse gas emissions from large fossil fueled power plants. Connecticut has 

received more than $87 million in proceeds from the auction of emission allowances. The state 

reinvests nearly 70 percent of those proceeds in energy efficiency programs that benefit 

individuals, businesses, and state and local governments. Connecticut also invested 23 percent

of its RGGI proceeds in the deployment of more than 6 MW of clean energy systems, including 

residential and commercial solar photovoltaic power systems and commercial fuel cell power 

systems.136 Studies indicate that each dollar of Connecticut investment of RGGI proceeds will 

yield more than $394 million in net economic value to Connecticut and produce 2,036 job years 

of employment over 10 years.137

Connecticut has also promoted the use of combined heat and power to achieve additional 

emission reductions. Through a variety of programs—including construction grants, 

 

131 Calculated from EIA data, Retail Sales of Electricity by State by Sector by Provider, 

http://www.eia.gov/electricity/data/state/. 

132 Conn. Renewable Portfolio Standards Overview, Conn. Department of Energy & Environmental Protection, 

Public Utilities Regulatory Authority, http://www.ct.gov/pura/cwp/view.asp?a=3354&q=415186.

133 Low and Zero Emissions Renewable Energy Credit Program, Conn. Department of Energy & Environmental 

Protection http://www.ct.gov/deep/cwp/view.asp?a=4120&Q=503720.

134 Clean Energy Finance and Investment Authority, http://www.ctcleanenergy.com/Default.aspx.

135 Conn. Department of Energy & Environmental Protection, Restructuring Connecticut’s Renewable Portfolio 

Standard ii (2013), http://www.ct.gov/deep/lib/deep/energy/rps/rps_final.pdf.

136 Conn. Program Investments, Regional Greenhouse Gas Initiative, 

http://www.rggi.org/rggi_benefits/program_investments/connecticut.

137 Environment Northeast, Economic Benefits of RGGI in CT (June 2013), http://www.envne.org/public/resources/ENE_RGGI_Economic_Benefits_CT_20130627.pdf. 
41

standardization of interconnection protocols, low interest loans, and the establishment of a CHP 

portfolio standard—Connecticut industry added more than 91 MW of CHP capacity, which is 

more than any state in the region between 2005 and 2011.

138

 

138 Conn. Department of Energy and Environmental Protection, 2013 Conn. Comprehensive Energy Strategy (2013), 

http://www.ct.gov/deep/lib/deep/energy/cep/2013_ces_final.pdf. 
42

VII.D. Delaware

Delaware’s efforts to transform its electric generation fleet have resulted in drastic reduction in 

CO2 emissions. Compared to 2005, all sources of electric power generation in Delaware have 

lowered their CO2 emissions by 43 percent and CO2 emissions from coal fired units have been 

reduced by nearly 70 percent.139 This is a result of a coordinated effort involving adoption of 

regulations that required installation of controls on coal and oil fired generating units,140

participation in the Regional Greenhouse Gas Initiative, adoption of Renewable Portfolio 

Standards, 141 and aggressive implementation of energy efficiency and combined heat and 

power.

Nine out of ten uncontrolled coal units that existed in 2005 have either retired, converted to 

natural gas or repowered to more efficient natural gas fired CHP. The remaining unit is 

equipped with activated carbon for mercury control, state of the art scrubber to reduce acid 

gases, and selective catalytic reduction (SCR) to control NOx. New state-of-the-art natural gas 

units are replacing any lost capacity.

In addition, solar deployment has increased 25-fold, from two MW to more than 50 MW of 

installed capacity, and Delaware hosts some of the largest fuel cell farms in the nation. In 

addition, the state has invested more than $120 million in efficiency in the past three years, 

including more than $72 million in public facilities through the innovative green bonds of the 

Delaware Sustainable Energy Utility. 142

 

139 2005-2011. EIA State Emissions, supra note 4.

140 Electric Generating Unit (EGU) Multi-Pollutant Regulation, 7-1100 Del. Admin. Code § 1146 (2013), available at

http://regulations.delaware.gov/AdminCode/title7/1000/1100/1146.shtml#TopOfPage

141 Delaware’s Renewable Portfolio Standard, Delaware Public Service Commission, 

http://depsc.delaware.gov/electric/delrps.shtml. 

142 Gayathri Vaidyanathan, Del. Creates Utility Fund for Public Building Retrofits, Greenwire (Oct. 20, 2011), 

available at http://www.seude.org/Press/2011_media_E&E_News_Greenwire_SEU_Bond_Story_10Oct%2020.pdf. 
43

VII.E. Illinois

Illinois encourages efforts to reduce carbon pollution and increase clean energy through its

energy efficiency and renewable energy standards. In addition, the state plays a leading role in 

advancing carbon capture and storage (CCS) technologies through the FutureGen project in 

conjunction with the U.S. Department of Energy.143

Energy efficiency policies require electric utilities to save two percent of electricity annually by 

2015 and have reduced rate-payer spending on electricity.

144 For example, in the first year 

(2008-2009) of the Illinois Public Utilities Act, Ameren Illinois Utilities (AIU) customers saved 

almost 90,000 MWh, far exceeding AIU’s goal for that year.

145 In Plan Year 3 (June 2010-May 

2011), another major utility, Commonwealth Edison Company (ComEd), achieved about 

662,000 MWh net energy savings through its energy-efficiency and demand-response 

programs.146

Under its RPS, Illinois requires that 25 percent of its electricity come from renewables by 

2025.147 The state has experienced significant growth in wind power development as a result—

electricity generation from wind increased by more than six million MWh from 2005-2011.148

Growth in wind energy from 2003 to 2010 alone created almost 10,000 new local jobs during 

construction and a lifetime economic benefit of $3.2 billion, according to one analysis.

149 In 

2011, Illinois avoided about five million tons of CO2 emissions from renewable resource 

integration, along with four million tons of NOX.

150

In addition to its CCS work on FutureGen, Illinois aims to significantly reduce carbon pollution

from any new coal plants through emission standards. From 2009-2015, any new coal-fueled 

power plant must capture and store 50 percent of the carbon emissions that the facility 

would otherwise emit.151 This target increases to 70 percent from 2016-2017 and to 90

 

143 See FutureGen Alliance, http://www.futuregenalliance.org/. 

144 220 Ill. Comp. Stat. 5/8-103(b) (2013).

145 See Ameren Ill. Utilities, ActOnEnergy Energy Efficiency and Demand-Response Program Results 9 (2010), 

available at 

http://library.cee1.org/sites/default/files/library/8579/CEE_Eval_AIUEnergyEfficiencyPofolioReport2008_2009_1Ja

n2010.pdf.

146 Navigant Consulting, Inc., Evaluation Report: Summary Report Final 1 (2012), available at 

http://ilsagfiles.org/SAG_files/Evaluation_Documents/ComEd/ComEd%20EPY3%20Evaluation%20Reports/ComEd_

Summary_PY3_Evaluation_Report_Final.pdf. 

147 Ill. Pub. Act 095-0481 (2007). 

148 EIA State Generation, supra note 4.

149 Ctr. for Renewable Energy, Illinois State University, Economic Impact: Wind Energy Development in Illinois 6, 25 

(2010), http://web.extension.illinois.edu/lgien/pdf/events/2012_04-19_economic.pdf.

150 Ill. Power Agency, Annual Report: The Costs and Benefits of Renewable Resource Procurement in Illinois Under 

the Illinois Power Agency and Illinois Public Utilities Acts 35 (2013), 

http://www2.illinois.gov/ipa/Documents/201304-IPA-Renewables-Report.pdf.

151 Ill. Clean Coal Portfolio Standard, Public Act 095-1027 (2009). 
44

percent after 2017.152 These policies are especially notable as coal provides 45 percent of the 

state’s electricity.153

 

152 Id. 

153 2011 data. EIA State Generation, supra note 4.
45

VII.F. Maryland

Maryland has achieved significant electricity sector GHG emission reductions since 2006—a 

decline of 9.7 million metric tons, or 30 percent—due in significant part to its participation in the 

Regional Greenhouse Gas Initiative (RGGI), a requirement to reduce energy use, its RPS, and 

regional fuel switching.

154

In July 2013, a plan released by Governor Martin O’Malley outlined more aggressive measures

the state can take to meet its economy-wide goal to reduce GHG pollution 25 percent from 2006 

levels by 2020.

155 Continuing to reduce carbon pollution from the electricity sector through 

participation in RGGI, energy efficiency programs, and renewable energy programs are key 

components of the plan. An independent study found the overall collection of climate and 

energy proposals would generate $1.6 billion for Maryland’s economy and support 37,000 

jobs.156

Through recently announced programmatic changes to RGGI, including a reduction in the 

regional emissions cap of more than 50 percent from 2005 levels by 2020, Maryland expects to 

further reduce the state’s 2020 CO2 emissions from the electricity sector by an additional 

3.6 million metric tons.

157

The state’s EmPOWER Maryland initiative mandates a 15 percent reduction in peak demand 

and per-capita electricity consumption and demand by 2015 from 2007 levels. Ten percent of 

the overall reduction must come from measures implemented by the state’s utilities and five 

percent from other energy efficiency programs.

158 To date, Maryland has achieved a 10.8 

percent reduction in peak electricity demand, equivalent to avoiding one coal power plant.159

The state is on track to exceed its peak demand target with a current projected 17.7 percent 

reduction in peak demand by 2015. The EmPOWER Maryland program has funded measures 

that will reduce ratepayer electricity use by more than 2 million MWh per year and save $250 

million annually.160 These savings will continue for years, with currently existing measures 

saving ratepayers $3.7 billion over their useful life.161 Total annual GHG emission reductions 

attributable to aggressive implementation of EmPOWER Maryland could reach 10.52 million 

metric tons of CO2e in 2020.

162

 

154 Reduction based on emissions from in-state electricity generation. Per Md. Department of the Environment. 

155 Md. Department of the Environment, Maryland’s Greenhouse Gas Reduction Plan (2013) 

http://www.climatechangemaryland.org/site/assets/files/1184/mde_ggrp_execsummary_2013.pdf [hereinafter 

Md. 2013 GHG Reduction Plan]. Maryland’s Greenhouse Gas Reduction Act requires Maryland to achieve a 25

percent reduction in state-wide greenhouse gases from 2006 levels by 2020 and establishes a long-term goal to 

reduce emissions 90 percent by 2050. Md. Code Ann., Envir. §§ 2-1201 to 1211. 

156 Md. 2013 GHG Reduction Plan, supra note 155, at 192-93. 

157 Press Release, Md. Energy Administration, RGGI States Propose Lowering Regional CO2 Emissions Cap 40%, 

http://www.mde.state.md.us/programs/PressRoom/Pages/0207RGGIAnnouncement.aspx. 

158 Per Md. Energy Administration. 

159 Id. Similarly, since 2007, the state’s per capita energy consumption has declined by nearly 10 percent.

160 EmPOWER Maryland Planning, Md. Energy Administration, http://energy.maryland.gov/empower3/. 

161 Id.

162 Md. 2013 GHG Reduction Plan, supra note 155, at 84.
46

Maryland’s RPS requires 20 percent of electricity consumed in the state to be generated by 

renewable energy sources in 2022. A proposal to increase the RPS to 25 percent by 2020 is 

under consideration. 163 Maryland’s RPS includes a solar “carve out” requiring 2 percent of all 

electricity delivered in Maryland to come from in-state solar generation (photovoltaic or thermal) 

by 2020.164 The Maryland Offshore Wind Energy Act of 2013 establishes revenue certainty for 

20 years for a 200 MW offshore wind project, and is a key component of the state’s renewable 

energy expansion.

165

Coal is the single largest source of electricity in Maryland’s generation portfolio. However, 

during the period from 2005 to 2012, the percentage of electricity generated from coal 

dropped from 56 to 43 percent. Maryland’s CO2 emission rate per MWh hour declined by 12

percent during 2005-2011.166 The state’s Calvert Cliffs nuclear plant provides 35 percent of the 

state’s electricity, and renewables, including hydroelectric plants, wind farms, and solar cells 

now contribute nearly seven percent.167

 

163 Id. at 84-85; Md. Code Ann., Pub. Util. Cos. § 7-701 et seq.

164 Md. Code Ann., Pub. Util. Cos. § 7-701.

165 Per Md. Energy Administration June 27 presentation or comments; see also Md. Offshore Wind Energy Act of 

2013, House Bill 226 (2013). 

166 Emission rate calculated using all electricity generation. EIA State Generation, supra note 4; EIA State Emissions, 

supra note 4. 

167 2011 data. U.S. Energy Information Administration, Maryland State Profile, 

http://www.eia.gov/state/?sid=MD#tabs-4.
47

VII.G. Massachusetts

The Global Warming Solutions Act (GWSA), signed by Governor Patrick in August of 2008, 

created a framework for reducing heat-trapping emissions to levels that scientists believe give 

us a decent chance of avoiding the worst effects of global warming. It requires reductions from 

all sectors of the economy to reach a 25 percent reduction of greenhouse gas emissions 

(GHGs) below 1990 levels by 2020 and an 80 percent reduction by 2050, the path toward which 

is laid out in the Massachusetts Clean Energy and Climate Plan for 2020.168

 Massachusetts is showing the way to a clean energy economy—and it is reaping some 

of the direct benefits in economic growth—through the development of smart, targeted 

policies that reduce emissions by promoting greater energy efficiency, developing 

renewable energy, and encouraging other alternatives to the combustion of fossil fuels. 

Elements of this success include:

 From 1990 to 2011, the New England electric grid operator indicates total 

Massachusetts electric consumption increased by 22 percent; however, associated 

emissions dropped 37 percent because higher carbon fuels like coal and oil are being 

replaced with cleaner fuels like natural gas and renewable sources. This shift can be 

attributed to successes of the renewable energy requirements, the regional CO2 capand-trade system, air quality regulations and the recent natural gas boom in the United 

States. In recent years the growth rate in electric demand has flattened due in large part 

to investment in end-use energy efficiency. 169 

 Massachusetts is one of the states participating in the Regional Greenhouse Gas 

Initiative (RGGI), the nation's first market-based regulatory program to cap and reduce 

greenhouse gas emissions from large fossil-fueled power plants. Massachusetts has 

directed the vast majority of its RGGI proceeds into clean energy programs and 

initiatives. Since 2008, Massachusetts has received more than $233 million in RGGI 

auction proceeds, which it has used to implement energy programs that improve building 

efficiency, comfort, durability, health, and affordability for individuals, businesses, and 

state and local governments. 

 Massachusetts is saving energy every year through with new energy efficiency 

investments and programs as the state continues to embrace efficiency as its “First 

Fuel.” These diverse programs have saved enough electricity to power almost 110,000 

homes for a year and enough natural gas to heat 15,000 homes for a year. Energy 

 

168 Massachusetts Clean Energy and Climate Plan for 2020 (2010), 

http://www.mass.gov/eea/docs/eea/energy/2020-clean-energy-plan.pdf. For more information, see the Global 

Warming Solutions Act Dashboard: http://www.mass.gov/eea/air-water-climate-change/climatechange/massachusetts-global-warming-solutions-act/global-warming-solutions-act-dashboard.html. Except for 

where otherwise noted, all data in this document is drawn from the Dashboard, updated by MassDEP October 

2013.

169Regional Greenhouse Gas Initiative Auction Proceeds, Massachusetts Executive Office of Energy and 

Environmental Affairs, http://www.mass.gov/eea/grants-and-tech-assistance/guidance-technicalassistance/agencies-and-divisions/doer/rggi-auction-proceeds.html.
48

efficiency has reduced greenhouse gas emissions by more than 431,000 metric tons—

the equivalent of taking about 85,000 cars off Massachusetts’ roads for a whole year. 

For every one dollar invested in efficiency, the average benefit was $4.17 for 

homeowners and $5.10 for businesses. Massachusetts’ bold energy efficiency initiatives 

have made it the most energy efficient state in the country for the last three years, 

according to the American Council on an Energy Efficient Economy.170

 Massachusetts is dramatically boosting renewable energy generation. Due to financial 

incentives such as renewable energy credits, net metering, and long-term contracts, 

solar energy capacity has grown from 1.64 MW in 2007 to 327 MW in 2013, reaching 

Governor Patrick’s goal of 250 MW 4 years early;171 wind energy has grown from 1.64 

MW to 103 MW in these same years.172 And Massachusetts is vigorously pursuing other 

clean energy solutions, such as combined heat and power, and energy from the 

anaerobic digestion of food waste.

 Green building standards have created new markets for energy efficient building design, 

retrofit, and operations. Almost 200 new LEED-certified buildings were constructed in 

Massachusetts from 2001-2011.

 The Commonwealth’s clean energy industry is growing rapidly, despite a tough 

economic environment nationally. Surveys by the Clean Energy Center show that there 

was an increase in clean energy jobs of 11.8 percent in 2013 and now almost 80,000 

employees are working in clean energy throughout the Commonwealth. Since 2011, this 

growth has outpaced the growth in the Massachusetts economy by more than eight 

times. Clean energy continues to maintain its place as one of the Commonwealth’s 

marquee industries with 1.9 percent of the total Massachusetts work force.

Thanks to a combination of these measures, since 1990 statewide GHG emissions have fallen 

10%, while over the same period Gross State Product has increased 68 percent. These results 

clearly disprove the myth that environmental protection hinders economic progress. In the past 

decades—against a backdrop of tightening federal and state emission limits on many sectors,

from factories and power plants to automobiles—Massachusetts’ population and total energy 

use have grown modestly as the state’s economy has increased dramatically. Over the same 

period, emissions of greenhouse gases and other air pollutants have dropped. Massachusetts 

looks forward to continuing this trend of emissions reductions coupled with economic growth as 

it works toward the limits set by the Global Warming Solutions Act and federal stationary source 

GHG regulations.

 

170 ACEEE, The State Energy Efficiency Scorecard, http://aceee.org/state-policy/scorecard. 

171 Mass. Department of Energy Resources, Installed Solar Capacity (2013), 

http://www.mass.gov/eea/docs/doer/renewables/installed-solar.pdf. 

172 Mass. Department of Energy Resources, Installed Wind Capacity (2013), 

http://www.mass.gov/eea/docs/doer/renewables/installed-wind.pdf. 
49

VII.H. Minnesota

From 2005-2011, Minnesota experienced a 17.5 percent reduction in carbon dioxide pollution.173

Policies to reduce carbon dioxide emissions, reduce emissions of mercury and other air 

pollutants, increase renewable energy use, and improve energy efficiency have helped drive 

these reductions. To build on this progress, the state has established goals to reduce 

greenhouse gas emissions by 15 percent from 2005 levels by 2015, by 30 percent by 2025, and 

by 80 percent by 2050.174

Minnesota has a target of reducing energy use by 1.5 percent per year through energy 

efficiency measures.175 Minnesota’s Conservation Improvement Program (CIP) requires utilities 

to spend a minimum of 1.5 percent of annual operating revenues on incentives like rebates on 

high-efficiency appliances and efficient lighting programs.176 CO2 emissions reductions from the 

CIP have been increasing in recent years, reaching more than 800,000 tons in 2010.177

Minnesota’s Renewable Energy Standard (RES) requires utilities to generate 25 percent of their 

power from renewables by 2025.178 Xcel Energy, the state’s largest utility, must achieve 30 

percent from renewables by 2020, one quarter of which must be met with wind. All utilities have 

met their 2012 RES goals and most ratepayers are experiencing cost benefits.179 New 

legislation creates an additional solar energy standard that will require investor-owned utilities to 

obtain 1.5 percent of their power from solar energy by 2020.180 Between 2000 and 2010, wind 

power generation in Minnesota increased 900 percent and natural gas generation increased 

250 percent.181 Most of the growth in natural gas use occurred after its price dropped from 

historic highs in 2008.182 Also between 2000 and 2010, the use of biomass for power generation 

increased 60 percent, while the use of coal for power generation decreased about 17 percent 

and use of petroleum for power generation decreased 94 percent.183 The chart below shows 

the current electricity generating mix in Minnesota today.184

 

173 Reduction in in-state electricity generation. EIA State Emissions, supra note 4. 

174 Minn. Stat. § 216H.02. 

175 Minn. Stat. § 216B.2401. Amended 2013 to “at least” 1.5%.

176 How CIP Works, Minn. Department of Commerce, http://mn.gov/commerce/energy/topics/conservation/HowCIP-Works.jsp; Minn. Stat. 216B.241.

177 Minn. Department of Commerce, Minnesota Conservation Improvement Program Energy and Carbon Dioxide 

Savings Report for 2009-2010 at 3 (2012), http://mn.gov/commerce/energy/images/CIPCO2Rpt2012.pdf. 

178 Renewable Energy, Minn., http://mn.gov/portal/natural-resources/renewable-energy/; Minn. Stat. § 

216B.1691.

179 Minn. Department of Commerce, Progress on Compliance by Electric Utilities with the Minnesota Renewable 

Energy Objective and the Renewable Energy Standard 3, 9 (2013), 

http://mn.gov/commerce/energy/images/2013RESLegReport.pdf.

180 Governor OKs Solar Energy Bill, Greenwire (May 24, 2013); Minn. Stat. § 216B.1691 (Subd. 2f.).

181 Provided by Minn. Department of Commerce.

182 Id.

183 Id.

184 Id.
50

Under the 2007 Next Generation Energy Act, Minnesota prohibits new coal-fired power plants 

that produce a net increase in carbon emissions.185 Utilities cannot import electricity from large 

fossil fuel-fired power plants in another state that were not operating by January 1, 2007.186

Minnesota also has a longstanding moratorium on new nuclear power plants, although two 

existing plants operate.187

From 2005-2011, Minnesota reduced its CO2 emissions by 6.9 million tons, lowering its CO2

emissions rate by 17.5 percent, even while power generation slightly increased.188 Minnesota 

experienced economic growth as emissions have dropped and electricity rates remain 

competitive.189 Minnesota is committed to continuing its transformation of the nature of the 

generation of electric power used in Minnesota and look to this federal rulemaking to help meet 

our commitments.

 

185 Minn. Stat. § 216H.03. 

186 Id.

187 Per Minn. Department of Pollution Control Agency. 

188 In-state electricity generation. EIA State Emissions, supra note 4.

189 Per Ellen Anderson, Energy Adviser to Minnesota Gov. Mark Dayton. 
51

VII.I. New Hampshire

New Hampshire demonstrated early leadership to mitigate the effects of climate change by 

enacting its Clean Power Act in 2002. It also produced its revised March 2009 Climate Change 

Action Plan, which included recommendations for maximizing energy efficiency, increasing 

renewable energy required by its Renewable Portfolio Standard (RPS), and participation in the 

Regional Greenhouse Gas Initiatives (RGGI) among its top strategies for reducing the state’s 

greenhouse gases emissions.190 The strategies embodied in that plan set New Hampshire on a 

firm trajectory toward meeting the emissions reductions goals: a 20 percent reduction from 1990 

emissions by 2025 and an 80 percent reduction by 2050. 

New Hampshire has achieved a 38 percent reduction in carbon pollution from the power sector 

in the past seven years due to policies that have capped carbon emissions, required more 

renewable energy generation, invested in energy efficiency, and experienced fuel-switching 

from coal to natural gas.191 New Hampshire’s policies have resulted in significant new clean 

generation sources, including increased operation of new, efficient natural gas plants, increased 

operation of a nuclear plant, and increased renewable power generation. New Hampshire’s 

participation in RGGI is a major factor in the state’s efforts to curb carbon pollution while 

generating more than $57 million in proceeds from the auction of emission allowances.192

New Hampshire is one of nine states that form RGGI, the first emissions budget and allowance 

trading program in the United States to reduce GHG emissions from the power sector. A study 

by The Analysis Group found the first three years of RGGI produced $1.6 billion in economic 

growth while lowering consumer energy bills.193 New Hampshire uses a portion of the proceeds 

from RGGI allowance auctions to invest in energy efficiency in communities and support green 

jobs. As of June 2012, New Hampshire’s cumulative energy savings due to projects that 

received RGGI funds ($21.8 million spent) are expected to be $107.8 million through 2030 

based on current energy prices. For every dollar spent as of June 2012, the expected return is 

$4.95 in energy savings.194

 

190 NH Climate Change Action Plan (2009), 

http://des.nh.gov/organization/divisions/air/tsb/tps/climate/action_plan/nh_climate_action_plan.htm. 

191 2005-2011. EIA State Emissions, supra note 4.

192 2013 RGGI Annual Report to Legislative Committees (2013), 

http://puc.nh.gov/Sustainable%20Energy/GHGERF/RGGI%20Annual%20Reports/2013%20RGGI%20Annual%20Rep

ort%20to%20NH%20Legislature.pdf. 

193 Analysis Group, The Regional Greenhouse Gas Initiative: Economic Impacts of the First Three Years (2011), 

http://www.analysisgroup.com/uploadedFiles/Publishing/Articles/Economic_Impact_RGGI_Fact_Sheet.pdf. 

194 Carbon Solutions New England, New Hampshire Greenhouse Gas Emissions Reduction Fund (GHGERF): Year 3 

(July 2011 – June 2012) Evaluation (2012), 

http://puc.nh.gov/Sustainable%20Energy/GHGERF/Evaulations/GHGERF_Year%203_annual_report_2011-

12_FINAL.pdf 

(Greenhouse Gas Emissions Reduction Fund administered by the NH Public Utilities Commission (PUC)). 
52

New Hampshire’s RPS calls for 24.8 percent of the state’s electricity to come from renewable 

sources by 2025.195 This policy boosted the use of biomass and hydroelectric resources and 

jumpstarted wind power development. The New Hampshire Public Utilities Commission (PUC) 

administers the Renewable Energy Fund, (REF) under which it has established five grant and 

rebate programs that have seen substantial demand and growth since their creation following 

the REF’s establishment in 2009. The REF has awarded 1,614 rebates for renewable energy 

systems, and provided New Hampshire homeowners, businesses, schools, towns, non-profit 

organizations and other eligible entities with $7,455,536 in funding toward these systems. In 

addition, the PUC’s competitive grant program has provided close to $2 million in funding for 

renewable projects featuring technologies from biomass heating systems to hydroelectricity 

upgrades to photovoltaic, solar hot air, and landfill-gas-to-energy, among others. In 2013, it is 

expected that an additional $4 million will be awarded through additional grants for renewable 

energy projects. These rebate and grant funds have leveraged $38.4 million in private 

investment, providing a boost to the state’s economy and creating jobs for electricians, 

plumbers, and alternative energy businesses.196

These new policies and the low price of natural gas have delivered a cleaner power sector in 

New Hampshire and resulted in lower wholesale electricity prices. Fourteen percent of New 

Hampshire's 2011 net electricity generation came from renewable energy.197 Natural gas 

accounted for 33 percent of New Hampshire’s net electricity generation in 2011, up from 24 

percent in 2010. 198 The Seabrook nuclear power reactor, the largest in New England, provided 

42 percent of New Hampshire’s 2011 net electricity generation.199

 

195 Electric Renewable Portfolio Standard, New Hampshire Public Utilities Commission, 

http://puc.nh.gov/Sustainable%20Energy/Renewable_Portfolio_Standard_Program.htm 

196 New Hampshire Public Utilities Commission, 2013 REF Annual Report to Legislative Committees (2013), 

http://puc.nh.gov/Sustainable%20Energy/Renewable%20Energy%20Fund/2013%20REF%20Report%20to%20Legisl

ature%2010-1-13.pdf . 

197 2011 data. U.S. Energy Information Administration, New Hampshire State Profile, 

http://www.eia.gov/state/?sid=NH . 

198 Id. 

199 Id. 
53

VII.J. New York

New York has achieved a 39 percent reduction in carbon pollution from the power sector in the 

past seven years due to policies that have capped carbon emissions, required more renewable 

energy generation, and invested in energy efficiency, as well as a switch in generation sources 

from coal to natural gas due in part to low natural gas prices.200 New York’s policies have 

resulted in significant additions of clean generation sources, including new efficient natural gas 

plants and renewables. New York’s participation in RGGI is a major factor in the state’s efforts 

to curb carbon pollution while generating nearly $600 million to date for a broad spectrum of 

clean energy programs.201

New York is one of nine states that form RGGI, the first emissions budget and allowance trading 

program in the United States to reduce GHG emissions from the power sector. An independent

study by the Analysis Group found the first three years of RGGI produced $1.6 billion in 

economic growth while lowering consumer energy bills.202 New York uses proceeds from RGGI 

allowance auctions, which are projected at approximately $65 million annually, to invest in 

comprehensive strategies that help achieve the RGGI CO2 emission reduction goals to reduce 

GHG pollution through energy efficiency, renewable energy, and carbon abatement 

technology.203 RGGI revenues support green jobs, including the training of 1,000 workers to 

implement building retrofits.204 The revenues also fund solar power installation efforts.205

Overall, RGGI-funded projects have benefited more than 55,000 households and 600 

businesses in New York.206

New York implemented an energy efficiency goal reducing energy consumption 15 percent by 

2015.207 As a result of this Energy Efficiency Portfolio Standard, the 2009 New York State 

Energy Plan projected emissions reductions of more than 9 million tons of CO2 in 2015, as well 

as 6,544 tons of NOX and 9,040 tons of SO2.

208 While more savings are achievable, third party 

 

200 2005-2011. EIA State Emissions, supra note 4. 

201 $583.4 million in cumulative proceeds from auction of New York allowances, as of Dec. 6, 2013. Cumulative 

Allowances and Proceeds by State, Regional Greenhouse Gas Initiative, 

http://www.rggi.org/market/co2_auctions/results#state_proceeds. 

202 Analysis Group, The Regional Greenhouse Gas Initiative: Economic Impacts of the First Three Years (2011) 

http://www.analysisgroup.com/uploadedFiles/Publishing/Articles/Economic_Impact_RGGI_Fact_Sheet.pdf. 

203 N.Y. State Department of Environmental Conservation. See also N.Y. State Energy Research & Development

Authority, Regional Greenhouse Gas Initiative Investment Plan (2013), http://www.nyserda.ny.gov/Energy-andthe-Environment/Regional-Greenhouse-Gas-Initiative/Auction-Proceeds.aspx. 

204 N.Y. State Department of Environmental Conservation.

205 Id.

206 Id.; Regional Greenhouse Gas Initiative, N.Y. State Department of Environmental Conservation, 

http://www.dec.ny.gov/energy/rggi.html#Rulemaking. 

207 N.Y. State Public Service Commission, Order Establishing Energy Efficiency Portfolio Standard and Approving 

Programs, Case 07-M-0548 (June 18, 2008), available at

http://www3.dps.ny.gov/W/PSCWeb.nsf/0/06F2FEE55575BD8A852576E4006F9AF7?OpenDocument. 

208 State Energy Planning Bd., Energy Efficiency Assessment, New York State Energy Plan 2009 at 29 (2009), 

http://www.nysenergyplan.com/Prior-State-Energy-Plans/2009stateenergyplan.aspx.
54

analysis shows by the end of 2011 the program had avoided $3.2 billion in wasted energy costs 

and created about 10,000 jobs.209

New York’s RPS calls for 30 percent of the state’s electricity to come from renewable sources 

by 2015.210 This policy has boosted wind power development and jumpstarted solar resource 

development in the Empire State. The New York State Energy Research and Development 

Authority (NYSERDA) estimates that the RPS avoided 4.1 million tons of CO2 from 2006 to 

2012, along with 4,028 tons of NOx and 8,853 tons of SO2.

211 NYSERDA expects that projects 

initiated to meet the standard will inject $1.1 billion into the state’s economy over their operating 

lives.212

These new policies and the low price of natural gas have delivered a cleaner power sector in 

New York and resulted in lower wholesale electricity prices.213 New York currently gets 22 

percent of its energy from renewable sources, 18 percent of which comes from hydroelectric 

power.214 Prior to implementing an RPS, New York generated only a nominal amount of wind 

power.215 It now has more than 1,600 MW of installed wind energy capacity, accounting for two 

percent of the state’s power.216 Natural gas power plants generate 44 percent of New York’s 

electricity.217 Nuclear power plants produce 30 percent of the generation mix.218 From 2005-

2011, New York reduced 24 million tons of CO2 emissions from the power sector and its CO2

emission rate declined 35 percent.219

 

209 Pace Energy & Climate Center, Energy Efficiency in New York: Midcourse Status Report of ’15 by 15’ at 6 (2012), 

http://energy.pace.edu/sites/default/files/publications/Energy%20Efficiency%20in%20New%20York%2015x15_0.p

df.

210 Per N.Y. State Department of Environmental Conservation June 27 presentation, comments; N.Y. State Public 

Service Commission, Order Establishing New RPS Goal and Resolving Main Tier Issues, Case 03-E-0188 

(Jan. 8, 2010), available at

http://www3.dps.ny.gov/W/PSCWeb.nsf/0/1008ED2F934294AE85257687006F38BD?OpenDocument. 

211 N.Y. State Energy Research & Development Authority, The New York State Renewable Portfolio Standard 

Performance Report 19 (2012), http://www.nyserda.ny.gov/Publications/Program-Planning-Status-and-EvaluationReports/Renewable-Portfolio-Standard-Reports.aspx.

212 Id.

213 Per N.Y. State Department of Environmental Conservation. 

214 2012 data. EIA State Generation, supra note 4. 

215N.Y. State Energy Research & Development Authority, RPS Performance Report (2013), 

http://www.nyserda.ny.gov/Energy-Data-and-Prices-Planning-and-Policy/Program-Planning/Renewable-PortfolioStandard/Main-Tier/Documents.aspx. 

216 2011 data, U.S. Energy Information Administration, Existing Nameplate and Net Summer Capacity by Energy 

Source, Producer Type and State (EIA-860), http://www.eia.gov/electricity/data/state/existcapacity_annual.xls. 

217 2012 data. EIA State Generation, supra note 4.

218 Id.

219 Id.; EIA State Electric Power Emissions, supra note 4. 
55

VII.K. Oregon

In 2007, Oregon established ambitious goals for reducing statewide emissions to 75 percent

below 1990 levels by 2050.220 While significant progress is required to meet this goal, the state 

recently announced that the first interim goal—arresting growth and beginning to reduce 

emissions by 2010—has been met.

221 A significant part of this progress has been achieved 

through a variety of programs that have improved energy efficiency across the state and 

increased investment in renewable energy. Following are brief descriptions of several programs 

Oregon has implemented that have reduced emissions from the power sector.

 The Energy Facility Siting Council Carbon Dioxide Standard sets carbon dioxide 

emissions standards for new energy facilities (currently 0.675 lbs/KWh for baseload gas 

plants). An applicant has three alternatives for meeting the standard: 1) on-site

cogeneration, 2) implementing offset projects directly or through a third party; or, 3) to 

pay the Climate Trust $1.27 per ton to offset emissions for the applicant.222

 The Emissions Performance Standard requires that all long-term commitments for power

meet an emissions standard of 1,100 lbs/MWh, regardless of the geographic location of 

the generation.223

 The Renewable Portfolio Standard requires that all utilities serving Oregon load must 

include in their portfolio a percentage of electricity generated from qualifying renewable 

energy sources. The percentage of qualifying electricity that must be included varies by 

utility, with Oregon’s three largest utilities required to reach 5 percent in 2011, 15 percent

in 2015, 20 percent in 2020, and 25 percent in 2025.224

 The Oregon PUC's integrated resource planning approach requires electric utilities to 

update 20-year plans every two years that identify the resources to meet expected 

demand that provide the best mix of cost and risk. Costs of potential future greenhouse 

gas regulation are required to be explicitly evaluated for major capital investments and

environmental compliance investments in existing resources.

 Oregon's public purpose charge takes 3 percent of the total revenues collected by the 

utilities to provide roughly $60 million per year to support energy efficiency, renewable 

energy, and low-income programs in Oregon. Furthermore, utilities are required to 

assess the achievable cost effective conservation potential in their service territories. If 

there is a gap between the potential and what can be achieved through funding provided 

by the public purpose charge funding, the utilities can ask for rate recovery in order to

 

220 Global Warming Actions, 2007 Or. Laws 907, 

http://www.oregonlegislature.gov/bills_laws/lawsstatutes/2007orLaw0907.html.

221 Or. Global Warming Commission Report to Legislature (2013), 

http://www.keeporegoncool.org/sites/default/files/ogwc-standard-documents/OGWC_2013_Rpt_Leg.pdf

222 Or. Department of Energy, Oregon’s Carbon Dioxide Standards For New Energy Facilities (2010), 

http://www.oregon.gov/energy/Siting/docs/Reports/CO2Standard.pdf.

223 Or. Department of Energy, Greenhouse Gas Emissions Standard, 

http://www.oregon.gov/energy/GBLWRM/docs/GHG_Rules.pdf. 

224 Renewable Portfolio Standard, Or. Department of Energy, 

http://www.oregon.gov/energy/RENEW/RPS/Pages/index.aspx.
56

pursue the additional conservation. Recently, this has provided approximately $125 

million per year for cost-effective energy efficiency.

225

 Oregon’s Residential Energy Tax Credit program has provided a wide variety of tax 

credits for efficient appliances, cars and energy systems.226 Similarly, tax credits aimed 

at business and commercial customers provided a wide range of credits for energy 

efficiency and renewable energy. Currently this program provides credits for high 

efficiency heating and air conditioning systems, as well as energy generation and 

alternative fuel systems.

Overall, Oregon has made considerable reductions in greenhouse gas emissions associated 

with the generation of electricity supplied in the state. Between 2005 and 2010, emissions 

associated with electricity used by Oregon households and businesses declined 10 percent.227

This reduction—spurred by the policies described above—has helped the state meet its first 

greenhouse gas reduction goal; meeting the ambitious goals for the future will require the state 

to build on these policies and the introduction of new approaches.

 

225 Public Purpose Charges for PGE, PacifiCorp, Or. Department of Energy, 

http://www.oregon.gov/energy/cons/pages/sb1149/business/ppcinvest.aspx. 

226 About Oregon’s Residential Energy Tax Credit Program, Or. Department of Energy, 

http://www.oregon.gov/ENERGY/RESIDENTIAL/Pages/residential_energy_tax_credits.aspx. 

227 Or. Department of Environmental Quality, Oregon’s Greenhouse Gas Emissions Through 2010: In-Boundary, 

Consumption-Based and Expanded Transportation Sector Inventories (2013), 

http://www.oregon.gov/DEQ/AQ/Pages/Greenhouse-Gas-Inventory-Report.aspx. 
57

VII.L. Washington

Washington produces very low carbon emissions from its electricity sector due to its expansive 

hydroelectric resources. The state is taking steps to further reduce its carbon emissions through 

energy conservation and renewable energy programs, as well as by requiring the early closure 

of its only coal plant. Washington achieved a 46 percent carbon emissions reduction from 2005 

to 2011, and reduced its carbon emissions rate by 52 percent over the same period, from 328 to 

158 lbs CO2/MWh of electricity generated.228

Washington has achieved significant savings from its energy conversation programs. In 2012, 

the State of Washington achieved 980,643 MWh of incremental conservation savings, out of 

retail sales of 92,675,126 MWh.

Washington voters approved ballot initiative 937 in November 2006 which set new renewable 

energy resource and conservation requirements for electric utilities to meet.229 Codified in 

Chapter 19.285 RCW, the energy conservation section requires each qualifying utility to “pursue 

all available conservation that is cost-effective, reliable and feasible.” Seventeen utilities, 

representing about 84 percent of Washington's load, currently meet the definition of qualifying 

utility.

The law requires utilities to use the Northwest Power and Conservation Council’s methodology 

to determine their achievable cost-effective conservation potential every two years for the 

subsequent ten-year period. Utilities also must establish and update a biennial conservation 

acquisition every two years. If a utility does not meet its conservation goals, it must pay an 

administrative fine for each MWh of shortfall, starting at $50 and adjusting annually for inflation 

beginning in 2007.230

The Northwest Power and Conservation Council approved its Sixth Power Plan, in 2010. The 

Power Plan is a regional energy blueprint that guides the region’s electric utilities. Covering the 

20 year period from 2010-2020, the Power Plan called for 6,000 – 7,000 average megawatts of 

conservation savings to meet 85 percent of the region’s load growth.

231 The Pacific Northwest is 

on track to meet this goal, and expects to continue investing heavily in efficiency. Under federal 

law, the Council revises the 20-year plan every five years.

Washington's private and public utilities also have long records of offering customer energy 

efficiency and conservation programs supported by regional organizations including the 

Northwest Energy Efficiency Alliance. The Northwest Energy Efficiency Alliance seeks to 

 

228 Calculated from U.S. Energy Information Administration data. CO2 emissions based on Total Electric Power 

Industry category. EIA State Electric Power Emissions, supra note 4. Electricity generation data represents the total 

electricity generated from all electricity generation sources in the state, not just fossil fuel-fired sources EIA State 

Generation, supra note 4.

229 Energy Independence Act, Washington Initiative Measure No. 937, 

http://www.secstate.wa.gov/elections/initiatives/text/i937.pdf.

230 ACEEE, State Energy Efficiency Policy Database: Washington, http://aceee.org/sector/statepolicy/washington#Energy Efficiency Resource Standards (last updated Aug. 12, 2013).

231 Northwest Power and Conservation Council, Power Planning, http://www.nwcouncil.org/energy/powerplan/.
58

transform markets for energy efficient products. Its market transformation program impacts 

consumer goods, as well as building codes, design, construction and operations.232

Washington has also taken significant steps to increase renewable resources. In addition to 

conservation requirements, ballot initiative 937 set new renewable energy resource 

requirements for electric utilities. Codified in Chapter 19.285 RCW, the law requires qualifying 

utilities to meet 15 percent of their electric load with new renewable energy by 2020.

According to the Utilities and Transportation Commission, in 2012 Washington’s investor-owned 

electric utilities, which combined serve about half the state of Washington’s residents, generated 

or acquired 2.35 million megawatt hours of new clean electricity.233 This only includes energy 

generated from new renewable projects, and not energy generated from the region’s 

considerable fleet of older hydroelectric dams. According to the Washington State Energy 

Office, in 2012 state of Washington produced about 73 percent of its electricity from carbon-free 

sources.234

And this new renewable energy is not as expensive as many claimed it would be when the law 

was passed by Washington’s voters. The investor owned utilities’ filings show that complying 

with the RPS only cost their customers an additional $35 million in 2012 — an increase to the 

average household bill of 1.2 percent, or a little over $1 a month.235

Finally, Washington will achieve significant further reductions through the early closure of its 

only coal-fired power plant. In 2011 the Washington State Legislature passed, and the Governor 

signed into law, legislation requiring the closure of the only coal powered electricity plant located 

in Washington. The Centralia plant was the largest single source greenhouse gas emission in 

the state, and through the deal closes one coal boiler in 2020 and the other by 2025. 

Additionally, the plant will meet a schedule of emissions reductions along the way.236

 

232 Northwest Energy Efficiency Alliance, Market Transformation, http://neea.org/about-neea/markettransformation. 

233 Washington Utilities and Transportation Commission, Renewable Energy, 

http://www.utc.wa.gov/regulatedIndustries/utilities/energy/Pages/renewalEnergy.aspx. 

234 Washington Dept. of Commerce State Energy Office, Fuel Mix Disclosure,

http://www.commerce.wa.gov/Programs/Energy/Office/Utilities/Pages/FuelMix.aspx. 

235 Washington Utilities and Transportation Commission, Company Annual Reports, 

http://www.utc.wa.gov/regulatedIndustries/utilities/energy/Pages/CompanyAnnualReports.aspx. 

236 Coal-Fired Electric Generation Facilities, ch. 180, 2011 Wash. Laws 1330, 

http://www.leg.wa.gov/CodeReviser/documents/sessionlaw/2011pam2.pdf.