UN I TED STATES ENVIRONMENTAL PROT E CTION AGENC Y WA S HI N GTO N , D
. C
. 20 460

OFFICE OF AIR AND RAOIATIQ!I; 

### MEMORAN DUM S ubj ec t: F rom: To: S ummar y of Stakeholder Meeting s Ca ri ss a Cy ran D oc ke t s EPA-HQ-OAR-2013-060 2, EPA-HQ-O A R- 20 1 3 -060 3, a nd EPA-HQOAR-20 1 3 -0495 This m e m o randum s ummarizes meetings with s tak e hold e r s durin g th e wee k ofMarch 30,2015. On March 30, Assoc i ate Ass i sta nt Administrator for C lim a te a nd enior Co un sel for A ir and Radi at i on Joseph Goffman panicipated in a call w ith rep rese nt a ti ves from E n ergyS a vvy . On M a rch 31 . Assoc i ate Ass i s tant Ad mini s trator fo r C lim a t e a nd Senio r Co un sel for Air and R ad i a ti o n J osep h Gof fm an m e t w ith rep resentatives fro m the Assoc i a tion of Home A pplianc e Ma nuf ac tur es. S ig n-in s heet an d pres e ntati o n a re attac h ed . On A pril L Ac tin g D e puty Administrator Stan Meiburg, Ac tin g Ass i s tant A dministrator for Air and Radi a ti o n J a net Mc C abe and Associate Assistant Administ rator lor C limate and Se ni or Coun se l for A ir and Radiation Jo sep h Goffman s poke w ith K e ntu c ky s tate offic ial s, includin g E n ergy a nd E n v iro nm e nt C ab in e t Sec r e tar y Len P ete r s . On Ap ril I , A ssoc iat e Ass i s ta n t Ad mini strator for C lim ate and Se nio r Coun se l for Air a n d Rad i ation J ose ph Goffman pru1 ic ip ated in a confer e nc e ca ll on the C l e a n Pow er Pl an with represe ntati ves from Arkansas. On A pril 2, Assoc iate Ass i s tant Administrato r for C lim ate a nd Se ni o r Co un se l for Air and Radi a ti o n J osep h Goffman met w ith Sue Tierney of the Analysis G ro up , Inc. Sign- in s heet a tt ac hed. On Ap ril 2 . Acting Ass i s tant A dmini s trator fo r Ai r a nd Rad iati o n J a n e t McCabe and Assoc iate Ass i s t a nt Ad mini s trat o r f or C limate and Senior Co un se l fo r A ir a nd Radi at ion J ose ph Goffman m e t \V ith rep rese nt at i ves from Edison Ele c tric In s titut e . S ig n-in s h ee t a tt ac h ed. On A pril 2. Assoc iate Ass i s tant Administra tor for C limate a nd Se ni o r Co un se l for A ir and R a di a ti o n J ose ph Goffman m et w ith representatives from National Rural E lectric Co operati v e Associa ti o n. S i g n-in s h ee t and h andout are attached.

I nternet Address (URL) · http // Wivw epa gov Recyc l e d / R ec y c l a b le •

**Pr~nted** w1th Vegetable OJI Based I nks o n 100% Postconsumer Process Ch l orme Free Recycled Paper

### D a te: March 31, 2015 Meeting: AHAM Meeting S upporting lll(d) Objectives Rule(s) Discu ss ed: 

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# APPLIANCE EARLY REPLACEMENT AND CAA SECTION 111(d) March 31 , 2015



# Goals of Presentation

**~** 

### Underscore AHAM support for CPP energy efficiency goals

**~** 

### Emphasize potential contribution to CPP goals of compre hensive appliance early replacement ( ER) program

**~** 

### Describe benefits of linked disposal/replacement programs 

### .> Highlight detailed AHAM analysis (TSD ) demonstrating large energy savings/GHG reductions from ER prog ram 

### .> Seek EPA support for DOE-led webinar on AHAM proposal and possible stakeholder process to develop model protocol

**~** 

### Seek EPA re cognition of ER program benefits in final CPP package and support materials 

# > Underscore potential for early reduction credits to jumpstart EE programs under CPP
)to- 1 

## Al-lAM

# AHAM Position on 111 (d) Proposal Th e applian c e industry supports the use of energy e ffi c ienc y to reduce GHG em i ssion s EPA can capture significant untapped efficien cy opportunit i es if it incentivize s st at es and utilit ie s to redu c e e le ctricity c onsumption States and ut i lities may not pursue aggressive EE options without clear guidelines and e x amples of acceptable programs

**~** 

## EPA en c ouragement and support of ambitious and inno v ative EE programs are very important

**~** 2 

# AliAM 

# Early Replacement's Contribution to EPA 111 (d) EE Targets >- Because of dramatic efficiency gains , today ' s refrigerators use much less power than older units Un de r 20 14 DOE standards , lat es t p rod u cts are 25 perc en t m ore effi cie nt than th o se p rodu ce d in 20 1 3 

## Applian c es have a long useful life and remain on the grid for many years 147 mi ll ion ref r ig erators a re expected to be on the grid in 2016 

# .>- Earl y repla c ement and disposal of a port i on of these older refrigerato rs will yield immediate , large -s cal e e nerg y savings and GHG reduction s Aggressive rebate-dri v en ER progra m s can deliver significant benefits to states and utilities looking for low - cost compliance options under 111 (d )

**~** 3 

# AliAMI 

# Strengthening Existing Rebate Programs

**~** 

### Well-publicized rebate programs are proven motivators ARRA 

### (stimulus legislation) provided $300M for rebates to replace older appliances

.,... DOE 

### ca lled the program a " huge success "

**~** 

### E xisting appliance rebate programs have achieved modest success , but have not tapped full EE potential

**~** 

### Current programs are hampered by -- Lack of consistent methodolog i es across jurisdictions 

### >- Limited consumer recognition because of weak promotion Incomplete coverage-only 50% of US 

### households have access to a refrigerator rebate

.,... Burdensome EM&V requirements that increase overhead and reduce benefits that flow to consumers Stronger rebate programs with national promotion tied to 111(d) goals will achieve greater energy savings and GHG reductions

.,.. 4 

# Al-fAM 

# Changing the Paradigm: Linking Purchase and Disposal Rebates

**~** 

### Programs combining purchase and disposal rebates are nearly non-existent (serving only 

## 0
. 2-0.4% of US households)

,. E x isting programs seek to remove older appliances from the grid or incentivize purchase of new products , but not both

, Energ y savings are often measured as the difference between new ENERGY STAR and regular models

**~** 

### Linking purchase and disposal rebates (i.e. requiring proof that old unit is removed from grid) will capture much greater efficiency increment between old and new unit

**~** 

### Accord ing to NRDC: linked purchase/disposal rebates " greatly increase energy savings and cost-effectiveness while providing a wide range of environmental benefits"

.,.. 5 

# Al-fAM

# Basic Program Design: AHAM Prototype National Program**~** 

## Minimum fi v e y ear program 

# > Robust national edu c ation / marketing campaign > Ma nu fa ct u re rs and re t a il ers h av e clea r i n c e ntive to p romote pla n 

# > Rebate le v els in $ 100 range 

## > T ie red , h i g h er reba t e for ENE RGY ST A R purchases 

### > Add i tiona l rebat e for remov in g 2nd uni t

### ~ 

## Rebate c onditioned on purc hase of new unit a n d proper recyc ling of old one ( i.e ., n o re s ale allow ed , v e r ification require d ) 

# > No restricti o n on age of eligible refrigerat o rs - ma x imize ben e fits 

# > Some "free riders" ma y recei v e rebates , as in all su c h pr o grams , but w ould be a c counted f or in measuring program benefit s 

# » GHG redu ction c redit ba s ed o n diffe ren c e in energ y c onsumption be tween o ld and ne w refrigerator for remaining s ervi c e life o f old unit

... 6 

# Al-lAM 

# AHAM Cost-Benefit Analysis of Prototype Program**~** 

# Presented in Technical Support Document (TSD) to AHAM CPP comments 

# > TSD models likely reductions in energy consumption , GHG emissions and associated costs 

# > Uses decision-tree approach from DOE Uniform Methods Project (UMP) and EPA methodologies for c onverting energy savings into GHG reductions 

# > Draws on extensive data in published literature , DOE reports and industry sources E x cludes "free riders " from calculation of benefits

... 7 

# Al-lAM

# Results of AHAM Modeling
.> Per-unit energy savings: 

# .> Total energy savings: 

# .> Total C0 2 

# reduction: 

# .> Program rebate cost: 

# >- Total rebate costs: 

# .> Total consumer savings: 3 , 491 kWh 52 ,3 68 GWh 36.1 MMtC0 2 

# 2.8¢/kWh $1.5 billion $6.8 billion

**~** 8 

# Al-lAM 

# The Path Forward: Developing an 

# ER Model Protocol "» 

### An " off the shelf ' toolkit with standardized and va lidated EM&V protocols for refrigerator ER programs would : 

## »- Avoid the need for states/utilities to rei n vent the wheel Maximize the likelihood of state adoption and EPA approval Align national/regional promotion and consumer education 

### "» 

### AHAM has been working with DOE to developER toolkit DOE sponsor ing Ap ril 30 webinar so AHAM can present TSD to a broad range of stakeholders DOE cons idering stakeholder process to develop consensus-based toolkit ( perhaps using UMP or SEEAction framework) CEQ supportive of DOE efforts 

## .>- Decision-tree approach in AHAM T SD could provide template for standardized EM &V metrics for quantifying energy savings and GHG reductions

_. Can we count on EPA support and participation?

**~** 9 

# Al-lAM

# The Path Forward: Recognizing ER Benefits in Final CPP Package**~** 

# Final CPP package can provide strong recognition and encouragement for ER programs by: Emphasizing linked purchase/disposal paradigm**~** 

# Citing TSD projections of ER benefits and costs**~** 

# Underscoring potential for standardized EM&V metrics using AHAM decision-tree**~** 

# Highlighting benefits of coordinating ER programs at regional or national scale**~** 

# AHAM members will work with EPA and DOE to communicate EE opportunities under final CPP 

# » 10 

# Al-fAM 

# Jumpstarting a National ER Program with Early Reduct i on Credits >- EPA should include a robust "credit for early action " mechanism in its 111 (d) rule 

# .> This would create incentives to begin implementing stronger EE programs immediately , before the 2020 effective date Combined with a model ER toolkit, an early action mechanism would enable states and industry to launch a nationally coordinated ER program in 2015-2016 

# >- Would provide strong early evidence of the success of 111(d)


# » 11 

# AliAM

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## Conc e p tua l E l e ments of a l l l (d) 

## D y n am ic R e li abi li ty S afety Va l ve P e ti t ion I. Purpo se of D y nami c R e liabili ty S af e ty V a lv e P e tition (DRSV): A pe t iti o n 's f u nc ti o n u nd e r th e DR SV i s t o req u es t reli e f fro m E PA f o r a ff ec ted state s, reg io n s, a nd utili ty e nt iti es, as t he case m ay b e, fro m C 02 e m i ss io n r e d u c ti o n m and ates inc lu de d i n an a ppr ove d s t ate o r mu lt i
- s t ate p lan ( S P) or in a f e d era l pl a n ( FP ) to th e exte nt necess ary o r a s r eq uired i n o rder to m a i nta i n ad e qu at e a nd re liab l e e l ec tri c serv ice. 2 . Pote ntial td gg cring e v e nt s includ e : u nf o rese en an d u n a vo id ab l e c ircu m s ta nc e s o r sys te m i c c h a n ges in the av a il a b il ity a nd o p e rabil i ty o f e l ect ri c e ne rgy re so urces re li ed o n by t he p e t i t ion e r to m eet th e SP o r FP . T ri ggeri n g eve nt s in c lud e b ut a re not limited t o: la rge c h a n ges in ava il abl e e lec tric ge ne rati o n o r e l ec t ri c tra n s m i ss i o n ca p a b iliti es; fu e l s h o rta ges or cos ts that i m pa ir t he abi li t y to ac q uire fu e l, incl udi n g fu e l tra n s p o rt ati o n s h o r tfa ll s; e x t re me wea th e r eve nt s, n at u ra l di sas t e r s, and ac ts o f wa r ; o r c h a nges i n th e laws, regul at io n s a nd ru l es a ffec t i n g a va il a b ili ty o f s u c h reso urces. 3 . Wh o m ay s ubmit a p et ition: A p et i ti o n m ay b e in d iv idu a ll y or j o in tl y s ubm itt e d to E PA b y t he party o r p arty s ubj ec t to co mpli a nce o bli gati o n und e r th e S P o r FP , in c lud i n g a n aff e c te d s tate o r s tates a nd/o r an a ff ec te d e l ec tri c ut il i ty e nti ty o r ut i li ty e nt i t i

es. A p e t it ion m ay b e a ccom p a ni e d by a re g ion a l RTO/ I SO o r ba lanc in g auth o rit y in a j o ind e r, bu t s u c h a j o ind e r is n o t req ui re d. 4. Co nt e nt of p e tition: Th e p e titi o n s h a ll i n c lud e th e f o ll ow i ng inf o r ma ti o n: ( I) a d esc ripti on o f t he c ir c u m stan ces re latin g t o a d eq u ate and re liab l e e le ctri c se rv i ce t h at p e t i ti o ne rs b e l ieve m a ke fu l l o r t im e l y co mp l iance wi th a S P o r FP 's C02 em i ss io n re duc ti on budget, ta rge t o r mi l es t o ne i mposs ib le, imp ra c t i cab l e, o r unr easo nabl e . (2) a n acco un t in g o f t he am o un t b y w hi c h C 0 2 e mi ss i o n s a r e l i ke l y t o exc eed th e budge t, targe t or m i l es to ne i n o rde r to e n s ure ad e q ua te an d re liab le e l ec tri c s erv ice a nd a n es t imat io n o f th e du ra ti o n o f t he antic ip ate d e xc e e d an ce, ( 3 ) a desc r ipti o n o f ac t io n s th at have or m ay b e und e rta k e n to remedy o r miti g ate the exceedan ce w hi l e e n s ur in g a de q u ate and re li ab l e e lec tr ic s ervi ce, o r an ex p l a n ati o n o f w hy n o ac t i o n s a re ava il a ble , (4) if act io n s are id e ntifi e d , an ex p lanati o n o f wh ic h a c t io n s t he s ta te , r eg io n , o r e ntity ha s i mp le me nte d o r p rop oses to im pl e me n t, toge t h e r with a sc he dul e f o r i m pl e me nti n g the se l ec ted ac ti o n s and a n est i m a ti o n o f annu al C 0 2 e m iss ion s d ev iat io n s fro m th e S P o r F P d u rin g and f o ll o w in g impl e me nta t i o n of th e se l e c te d a c ti o n s, (5) a sc hed ul e f o r c o m pl et io n o f th e se lec ted ac t io n s, a nd (6 ) a re q u es t for te mp o ra r )' or p e r manen t a dj u s tm e nt in t he s ta t e, reg ion , or e nt i ty 's e m iss i o n bud ge t, targe t o r m ile sto ne a s th e c a se may req u ir e . 5 . R e que s t e d reli e f and r e medial action s : Pe t iti o n s can i n c lud e re q u es t s f or p ros pec ti v e and /o r re t r os p ect ive re li e f fro m a C02 e mi ss io n bud ge t, targe t o r m il es to ne on a n a nn ual o r s um of yea r ·s b as i s to t he ex te nt re qui red a nd base d on th e a nnu a l C 0 2 e mi ss io n s de v ia ti o n s es timat e d in th e p e t i ti o n ; h o w e ve r , E PA h a s t he rig h t of annu a l rev iew to a s c e rta i n th at a ff ec te d s tate s, reg i o n s, a nd e nti t i

es g rante d t he re l ief are ta k i ng re me dia l act io n s a s de s c rib e d in th e p e t it i o n to re medy th e c ircum s t a n ces necess itat in g th e gran te d re l i ef

. S h o uld s uc h re m e dial ac ti o n s b eco me n o l o n ge r v i abl e , t he aff ec te d parti es h a ve t he ri g ht to s ubm it a rev i se d p e t i ti o n identi fy in g t he fa c to rs cau s in g t he af o re me nti o ne d ac ti on s to n o lon ge r b e viabl e and pr o p os in g di ff e re nt re me dial actio n s o r , as necess ary , furth e r re li e f fro m th e S P o r F P 's e mis s io n s budge t, t ar g et o r m i l es to ne.6. Due proc ess and proc e dural ste p s: A petition subm itted before a rel eva nt emissions compliance or true-up date s hall se r ve to toll that date u n til E PA 's approval o r d e nial of the petitio n . E PA sha ll eva luat e the petition for comp l ete ne ss within a reaso nable time , n ot to exceed 60 days after s ubmittal. Within thi s 60 day period EPA s ha ll request a ny addit i o n al in format io n n ee d e d to complete the petition. Within 30 day s af te r t h e ini tial 60 -d ay period o r , if addit i ona l i nformation i s submit t ed in re s pon se to a request by EPA , w ith in 30 day s after s u ch inf ormation is submitted , EPA sha ll pro p ose eithe r to grant the petiti o n , den y the petition , or g rant th e petition in part and deny the petiti o n in part , and shall cause s u c h pro posal to be submitted to the Federal R eg i s ter for publication. E PA s hall take public comment on its proposed actio n f or a p e ri o d of30 days. Aft er conside rin g any comments subm i tted , EPA s hall take final action on it s pro po sa l i n accordance with 42 U.S. C. 

### § 7607. 7. E PA consultation with FERC on r e liabilit y matter s : E PA s h a ll req u est consu l tation and gu id ance wit h FERC in matters re lated to re liabi li ty as co ntai n ed in a petition and sha ll give deference to F E RC's response . EPA may not deny a p et iti on in whole o r part without requ est in g such consultation fro m FERC. EPA ma y depart from F ERC 's rec o mmendations r elatin g to rel iabil i ty o nl y if EPA ex plains its rea so n s for d o in g so. 8. Sco p e of reli ef t o b e g r a nt e d b y EPA: E PA s h all n ot as a conditio n of petition approval or partial petition approva l require emission offsets and s hall n ot imp ose n oncomplia nc e p ena lti es for any action s or ina c tion s t h at a re t h e s ubjec t of 

## a · n app rove d p e titi on o r fo r any act i o n s o r inacti o n s that ar e the su bj ect of a part ia ll y approved petiti on. The SP or FP as the case may be will be amend e d to th e ex tent required to re flect th e relief g ranted in a f ull or part ia ll y granted petition. Such re li e f sha ll i nclude ad j ustm e nt s in the compliance o bligation s of th e affected facili ti es as the case may require. 9. F inal agency ac ti o n and judicial r eview: E PA 's grant or denial of a p e titi o n f o r relief und e r th e DSRV s hall be cons idered a final agency action that i s l ocally or regionally applicab l e. EPA's fa ilu re to act on a petition within the time periods prov id ed sha ll b e cons idered a de ni al of the peti tion and treate d as fina l age n cy act i o n . P et ition s for judicial rev iew of E PA's g r a n t or d e ni al of a pet ition may be filed in the U n ited States Court of Appea ls for t h e appropr ia te c ircu i t in accordance w ith 42 U.S.C. 

### § 7607(b).



### 2