From: Higgins, Cortney [mailto:Cortney_Higgins@omb.eop.gov] 

Sent: Monday, May 19, 2014 9:10 PM 

To: Wayland, Robertj 

Subject: FW: TIME TO MEET: 111(d) Rule 

Hi Bob, 

Again, here’s information we received today. 

Regards, 

Cortney 

From: Jennifer Kefer [mailto:jennifer@dgardiner.com] 

Sent: Wednesday, May 14, 2014 12:35 PM 

To: Echols, Mabel E. 

Cc: David Gardiner 

Subject: RE: TIME TO MEET: 111(d) Rule 

Mabel – David and I look forward to meeting with OMB to discuss the forthcoming GHG rule next 

week. As we know that you are aiming to finalize and publish the rule by June 1, we thought it 

would be a good idea to share the language we are hoping to discuss in advance of our 

conversation. We are proposing a few paragraphs to incorporate into the preamble, which 

highlights EPA’s support for combined heat and power (“CHP”), lays out some of its benefits, notes 

how policies that support greater deployment are consistent with other efforts that the 

Administration is taking, and then notes a number of existing resources that states will be able to 

use to help incorporate CHP into their compliance plans. I understand that other stakeholders 

(particularly NARUC, NACAA and NASEO) have developed similar language elaborating the 

benefits of energy efficiency generally. While we are confident that these benefits extend to CHP, 

we think it is important the EPA explicitly address CHP in the preamble. We plan to talk through 

this language when we meet next week, but were hoping you could share it with the appropriate 

people beforehand. 

Thanks in advance for your consideration. Please let me know if I can provide any additional 

background before we meet next Wednesday. 

Jennifer 

<< Preamble Language_Submitted 5_14_2014.pdf >> 
David Gardiner & Associates, LLC | 2609 11th St. North | Arlington, VA 22201 | 202.463.6363 | www.dgardiner.com/alliance

Industrial Efficiency

The Alliance for 

May 14, 2014

To Whom It May Concern:

In recent Clean Air Act rulemakings, EPA has consistently supported policies that advance 

support energy efficiency generally and combined heat and power and waste heat to power in 

particular. We are hopeful that the forthcoming GHG NSPS for New Power Plants will likewise 

embrace these technologies. We believe it is essential that the rule explicitly highlight the 

benefits of CHP and WHP, as many states do not consider these supply-side measures when 

thinking of energy efficiency. To ensure that these technologies are not overlooked, we propose 

the following language be incorporated into the preamble:

“In addition to end-use energy efficiency, the rule encourages states to make the 

commercial, industrial and institutional sectors more efficient through the use of 

combined heat and power (CHP) and waste heat to power (WHP). Conventional power 

generation is only about 35 percent efficient, which means that nearly two-thirds of fuel 

inputs are simply vented into the atmosphere. CHP and WHP virtually eliminate that 

waste. By producing both heat and power from a single fuel source (CHP) and by 

capturing otherwise wasted heat from industrial processes to generate additional 

electricity (WHP), CHP and WHP dramatically lower energy use and associated 

emissions, while also delivering economic benefits. In fact, CHP can deliver the same 

amount of useful energy and produce one-half the carbon dioxide (CO2) emissions of 

traditional power generation. WHP produces electricity with no additional combustion 

and no incremental carbon emissions.

“At the same time, these technologies reduce the burden on the existing transmission 

system, keep energy prices low, improve national security, increase resilience to 

extreme weather events, and enhance manufacturing competitiveness. As noted in the 

Administration’s Hurricane Sandy Rebuilding Task Force, because CHP systems 

generate power locally and use the grid as a backup, if the grid were to go down, these 

systems can operate without connection to local electricity infrastructure. This reduces 

the burden on transmission and distribution systems and increases electric reliability. By 

ensuring highly efficient use of fuels, especially natural gas, CHP reduces demand, 

enhances America’s energy independence, and keeps prices low. When installed at 

manufacturing and other facilities, it enhances their competitiveness by cutting energy 

costs by reducing energy use. Indeed, the industrial sector accounts for the largest 

share of energy consumption in the United States and the majority of energy growth over 

the next decade will occur in the industrial sector. For this reason, supporting policies 
David Gardiner & Associates, LLC | 2609 11th St. North | Arlington, VA 22201 | 202.463.6363 | www.dgardiner.com/alliance

that improve efficiency at these facilities can have a significant impact on reducing the 

amount of energy used in the United States. Because it provides all these benefits, the 

Administration strongly supports the use of CHP and WHP; President Obama recently 

established a national goal of increasing deployment by 40 gigawatts (50 percent). 

“States can serve as partners in achieving this goal by embracing favorable policies in 

their compliance plans. States can adopt a variety of policies to support deployment of 

CHP and WHP, incorporating CHP and WHP in state energy portfolio standards, offering 

innovative financing to support projects, overcoming utility barriers through modified 

standby rates and simplified interconnection standards, requiring consideration of CHP 

in critical infrastructure, and offering a streamlined permitting process for relatively small 

CHP and WHP projects. The State and Local Energy Efficiency Action Network has 

identified a number of these best practices, which can be incorporated into state 

compliance plans.1

“CHP’s chief benefit is that it produces both thermal and electric energy from a single 

fuel source. To account for the emission benefits from these systems, it is therefore 

essential that states credit all of the electric and thermal energy produced by these 

systems. EPA has developed a variety of tools to enable states to measure energy 

produced and to determine avoided emissions. These include a guide to Accounting for 

CHP in Output-Based Regulations, a Fuel and Carbon Dioxide Savings Calculation 

Methodology for Combined Heat and Power Systems, and the AVoided Emissions 

geneRation Tool (AVERT).

2

”

We look forward to discussing this proposed text with you in person. Please let us know if we 

can provide any additional background.

Sincerely, 

David Gardiner Jennifer Kefer

 1 See, e.g. SEEAction, March 2013, Guide to the Successful Implementation of State Combined Heat and 

Power Policies (http://www1.eere.energy.gov/seeaction/pdfs/see_action_chp_policies_guide.pdf); 

SEEAction, March 2014, Industrial Energy Efficiency: Designing Effective State Programs for the 

Industrial Sector (http://www1.eere.energy.gov/seeaction/pdfs/industrial_energy_efficiency.pdf). 2 U.S. EPA, CHP Partnership, Feb. 2013, Accounting for CHP in Output-Based Regulations

((http://www.epa.gov/chp/documents/accounting.pdf); U.S. EPA, CHP Partnership, Aug. 2012, Fuel and 

Carbon Dioxide Savings Calculation Methodology for Combined Heat and Power Systems

(http://www.epa.gov/chp/documents/fuel_and_co2_savings.pdf); Avoided Emissions geneRation Tool 

(AVERT) (http://epa.gov/avert/).