1 | P a g e December 1, 2014

U.S. EPA Headquarters 1201 Constitution Ave. NW Washington, DC 20460
Re: AWEA Comments on EPA’s Proposed Carbon Pollution Emission Guidelines for Existing Stationary Sources and Supplemental Proposed Rule Submitted via regulations.gov : EPA

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- 2013

- 0602

- 000 1 , EPA

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- 21640 ; and email : mailto:A

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- Docket@epa.gov
Power plants are the nation’s largest source of carbon dioxide pollution that drives catastrophic climate change, and there are currently no federal limits on their emissions. In his June 25, 2013 , Climate Action Plan and an accompanying memorandum, President Obama directed the Environmental Protection Agency (EPA) to use Section 111 of the Clean Air Act (CAA) to curb carbon dioxide pollution from existing power plants , as well as new such faci lities

. 1 In response, EPA proposed regulation of carbon em issions (Clean Power Plan ) from

1 The President’s Climate Action Plan (June 25, 2013), available at www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.Pdf; Power Sector C arbon Pollution Standards, presidential memorandum, June 25, 2013, www.whitehouse.gov/the

- press - office/2013/06/25/ presidential

- memorandum

- power - sector

- carbon

- pollution

- standards. Carb on dioxide regulations of the electric power sector were required in order to comply with the Supreme Court’s 2007 ruling in Massachusetts vs. EPA, finding that such action would be required if EPA determines, as it did in 2009, that carbon dioxide pollut ion endangers public health or welfare, per the 1990 Clean Air Act Amendments

. Massachusetts v. Environmental Protection Agency , 549 U.S. 497 (2007), available at http://www.supremecour t.gov/opinions/06pdf/05

- 1120.pdf ; see also Endangerment and Cause or Contribute Findings for Greenhouse Gases under Sect ion 202(a) of the Clean Air Act, available at http://www.supremecourt.gov/opinions/06pdf/05

- 1120.pdf.2 | P a g e

existing power plants under Section 111(d) of the CAA in June 2014

. 2 EPA subsequently issued a notice of data availability (NODA) in October 2014 that provides addi tional information on certain issues that have been consistently raised by a diverse set of stakeholders concerning the Clean Power Plan. 3 The American Wind Energy Association (AWEA) 4 applaud s the Clean Power Plan for allowing states to meet the proposed r equired reductions through the use of system

- wide programs and policies, which will allow states to build on existing programs, such as renewable
energy measures, to serve as compliance tool s in state plans. Renewable energy , such as wind generation, is a n effective, widely available, affordable, reliable , and rapidly scalable method for reducing carbon emissions in the power sector and complying with the final Clean Power Plan

. 5 In the proposed rule , EPA correctly recognizes the value of incorporating re newable energy as a component of its “best system of emissions reduction” (BSER ). The emission reduction strategies from renewable energy are already being deployed today to cost

- effectively secure significant reductions in carbon pollution, fulfilling th e CAA’s requirement that the emission limitations be “achievable through the best system of emission reduct ion

. . . taking into
account

. . . cost

. . . [that] has be en adequately demonstrated.” 6 With compliance options like renewable energy, states wil l be able to meet their goals easily and at low cost, while also providing new options for consumers. Indeed, s tate and local

2 Carbon Pollution Emission Guide lines for Existing Stationary Sources: Electric Utility Generating Units ( Jun e 18, 2014 ), available at http://www2.epa.gov/carbon

- pollution

- standards

. 3 Clean Power Plan Clean Power Plan Notice of Data Availability (Oct. 28, 2014), available http://www2.epa.gov/carbon

- pollution

- standards/clean

- power - plan

- proposed

- rule

- notice

- data

- availability

. 4 AWEA is a national trade association representing a broad range of entities with a common interest i n encouraging the expansion and facilitation of wind energy resources in the United States. AWEA members include wind turbine manufacturers, component suppliers, project developers, project owners and operators, financiers, researchers, renewable energy s upporters, utilities, marketers, customers, and their advocate s. 5 See AWEA, “The Clean Air Benefits of Wind Energy”, May 2014, available at : h ttp://awea.files.cms

plus.com/FileDownloads/pdfs/AWEA_Clean_Air_Benefits_WhitePaper%20Final.pdf 6 See Clean Air Act § 111(a)(1), 42 U.S.C. § 7411(a)(1).3 | P a g e

governments have already increased their adoption of renewable energy policies and programs , and these policies can provide appre ciable carbon reduction benefits that state and local air planners c an capture in state plans to meet the forthcoming Section 111(d) carbon reduction targets. By driving investment in renewable energy, the Clean Power Plan will accelerate the country’s tr ansition to a power system that is efficient, reliable, resilient, flexible, clean, affordable, and consumer

- focused. The proposed rule establishes emission goals that states are required to meet, including an interim goal, which would apply between 2020 a nd 2029, and a final goal, which must be achieved starting in 2030. Based on EPA’s method of calculation, state emission goals are not uniform; this means that some states will be required to reduce emissions rates significantly, while others will be requ ired to make smaller reductions. Nevertheless , AWEA believes that states with even the most significant reduction goals will be able to meet their targets with relative ease given EPA’s conservative assumptions used in setting emission performance standar ds and the range of carbon emission reduction options available for compliance , such as renewable energy

. A s a result of certain assumptions and provisions, we believe the proposed rule significantly underestimates the degree to which renewable energy , i n particular, wind energy can help states cost

- effectively meet their carbon reduction goals. As an example, Texas has one of the largest state emission reduction targets at 3 8 percent reductions from 2012 levels by 2030 , but EPA assumes that the state’s renewable en ergy generation growth rate over the 8

- year period from 2012 to 2020 would only be 1/6 th of the growth rate the state achieved in the prior 8

- year period (2004 to 2012) , and roughly equivalent to the total increase in renewable generation that4 | P a g e

occurred fro m 2004 to 2012

. 7 At the same time, some aspects of the proposed rule need to be revised to provide more certainty on specific topics, such as the crediting of interstate effects of carbon emission reductions from renewable energy.
AWEA strongly support s President Obama’s and EPA’s commitment to curb power plant carbon pollution and welcomes the opportunity to offer these comments on how to build on the solid foundation provided in the proposed rule to create a strong program for reducing carbon pollutio n from existing power plants under Section 111(d )

. We hope our comments will help EPA and the states develop smart, cost

- effective programs for existing power plants that will result in real cuts of carbon pollution and, in turn, drive the expansion and u se of clean, non

polluting energy sources, such as renewable energy. As EPA continues to finalize the carbon emissions standards, carbon reductions from renewable energy policies and programs are likely to become increasingly important for jurisdictions t o meet those standards as renewable energy is often the least cost, most rapidly deployable way of reducing carbon pollution and lowering energy costs. In order for states to fully leverage renewable energy as a compliance tool, the final rule should buil d on the solid foundation provided in the Clean Power Plan by addres sing the following key issues, among others addressed in these comments :

 Strengthen the targets for renewable energy by adopting the proposed regional ized technical and economic renewable energy approach, as initially set forth in a technical support document (TSD) that describes EPA's Al ternative Renewable Energy Approach and modified in the N O DA to take on a regionalized approach , for calculation of the renewable energy component of build ing block 3 of the

7 The Texas renewable energy generation target in 2020 is 68,273,785 MWh. Texas renewable energy gen eration was 4,991,243 MWh in 2004, growing 593 percent by 2012. Available at http://www.eia.gov/electricity/data/state/.5 | P a g e BSER, but modify it to better reflect what levels of increased generation from renewable energy are cost

- effectively achievable ;

 Adjust the goal

- setting formula for calculating building block 3 of the BSER to reflect the reduced utilizat i on of affected electric generating units ( EGUs ) through displac ement by renewable energy ;

 Allow the “ banking” of new carbon emission reduction actions, measures and
programs taken after January 1, 2017, to be used for compliance with targets during the co mpliance period (after January 1, 2020 ) ; and

 Provide clear er guidance on the crediting of out

- of

- state renewables to ensure that that the state s in which the environmental attributes of renewable energy are retired are able to claim the full credit for the emissions reductions

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I. TABLE OF CONTENTS ................................ ................................ ................................ ....... 6 II. EXECUTIVE SUMMARY ................................ ................................ ................................ 10
A. Suggested improvements to EPA’s Alternative Renewable Energy Approach and the NODA Regionalized Renewable Energy Approach to make sure t he Clean Power Plan accurately reflects the cost
- effective level of renewable energy deployment that can be achieved. ................. 10
B. A “system
- wide” framework for establishing the BSER and complying with the performance standards esta blished thereunder can drive significant carbon emission reductions at the least cost. ................................ ................................ ................................ ................................ ........................ 13
C. EPA correctly includes wind energy in the calculation of the BSER. ................................ ...... 14
D. EPA should reevaluate the B SER periodically and increase the stringency, as appropriate, and ensure compliance timing. ................................ ................................ ................................ ............ 15
E. EPA should provide further clarification on the crediting of emission reductions from out
of
- state renewable energy to ensure t hat the state that retires the environmental attributes of renewable energy gets to claim the full credit. ................................ ................................ ................... 16
F. EPA should explicitly allow states to use the “state commitment approach” in their compliance plans. ................................ ................................ ................................ ................................ .. 19
G. Emissions changes under a rate
- based plan from substitution of new gas facilities. ............. 19
H. EPA should provide limited banking for carbon reduction actions taken after January 1, 2017, and before the pl an performance period begins. ................................ ................................ ..... 20
I. If a state opts to convert to a mass
- based target, EPA should require a subsequent true - up of the emissions reduction requirement during the compliance time frame based on actual load growt h. Otherwise , the rate - based performance standard may not be met, and it also creates an incentive for states to use high load growth projections for use in the mass - based conversion. ... 20 III. DETAILED COMMENTS ................................ ................................ ......................... 21
A. Comments related to setting the best system of emission reductions

— building blocks. ........ 21
i. Building block 3: the Clean Power Plan’s BSER methodology underestimates the contributions from renewable energ y regarding what is feasible, cost

- effective, and adequately demonstrated.

................................ ................................ ................................ ................................ ..... 21
ii. Necessary improvements to the technical and economic Approaches

– NODA Regionalized Approach and the Alternative Renewable Energy Approach.

................................ ............................ 30
iii. EPA should remove the “technical resource” step in which it imposes an arbitrary cap on the percentage of the technical renewable resource that can be developed in a state or region.

.............. 32
iv. In quantifying which renewable energy resources are economic, EPA should begin with current, real

- world data on the cost of renewable energy technologies.

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v. For projecting changes in the economics and performance of rene wable energy through the year 2030, EPA should rely on the detailed and thoroughly peer

- reviewed cost and performance projections developed by the Department of Energy and the National Renewable Energy Laboratory.

................................ ................................ ................................ ................................ ................... 37
vi. In its economic modeling, EPA should not impose a firm cap on the percentage of variable renewable energy that can be deployed in a state or region, but rather should economically model the cost of renewable curtailment that could occur at extremely high ren ewable energy penetrations, or rely on such modeling that has already been conducted by others.

................................ .................... 39
vii. Changes to the generation mix, changes in fuel prices, and other power system changes that are expected to occur between now and 2030 should also be included in the analysis of the economics and reliability of higher renewable penetrations.

................................ ............................. 41
viii. Because many planned transmission lines will have been placed in service by 2020, and others wil l occur during the compliance period, they should also be included in EPA’s analysis.

... 42
ix. Regarding EPA’s question about how regions should be drawn for purposes of establishing the regions used for setting the NODA Region alized Renewable Energy Approach, we offer the following guidance to ensure the regions are consistent with important policy, economic, and technical boundaries.

................................ ................................ ................................ .......................... 44

x. The reserve margin contribution of wind energy in ERCOT i n EPA’s IPM modeling should be updated to account for updates ERCOT has made to its reserve calculation based on new data.

...... 49
xi. In response to EPA’s question in the NODA, once the regional renewable MWh total is calculated, this should be pro

- rata allocated to states based on the amount of total generation in each state.

................................ ................................ ................................ ................................ ................... 50
xii. Regarding EPA’s question in the NODA about how to treat a state in which the incremental renewable energy and energy efficiency exceeds historical fossil steam generation levels, EPA should credit this excess renewable energy based on the regional steam fossil emissions rate.

........ 50
xiii. EPA should include load growth when economically modeli ng renewable energy growth and examining the reliability of higher renewable penetrations.

................................ ....................... 50
xiv. If EPA decides to use a method in which the resource potential calculation is based to some extent on existing renewable energ y generation, EPA should allocate existing renewable generation to states by looking at power purchase agreements for that generation, not the geographic location of the renewable generation.

................................ ................................ ................................ ................... 51

xv. As outlined in the NODA, E PA should adjust the goal

- setting formula for calculating building block three to reflect the reduced emissions from affected EGUs from displacement by renewable energy.

................................ ................................ ................................ ............................... 51
xvi. The ERCOT IPM region incorrectly does not appea r to include wind resources in the Texas Panhandle.

................................ ................................ ................................ ................................ .......... 548 | P a g e

xvii. EPA should review the wheeling charges described in Table 3.4 on pages 6

- 12 of Chapter 3 of the IPM documentation, as many appear to be higher than current and futu re wheeling charges. 54
xviii. EPA should check the regional transfer limits listed in Table 3.4 on pages 6

- 12 of Chapter 3 of the IPM documentation to verify that the MW transfer limits are an accurate reflection of current reality.

................................ ................................ ................................ ................................ ............... 55
xix. IPM’s assumption of 2.8% inter

- regional transmission losses is much higher than reality.

. 59

xx. IPM’s modeling assumption of “perfect foresight” biases generation investment de cisions against stably

- priced renewable energy.

................................ ................................ ............................ 59
xxi. EPA should not use the Proposed RPS Approach, though if it does it should improve it using the following adjustments.

................................ ................................ ................................ ................. 62
xxii. The Propose d RPS Approach is flawed because state RPSs, which are policy commitments, are not necessarily based on the amount of cost

- effective, achievable renewable energy within a given state’s or region’s borders.

................................ ................................ ................................ ....... 63
B. Building bloc k 1

— using only heat rate improvements would not represent the “best” system of emissions reductions. ................................ ................................ ................................ ........................ 72
i. Building blocks 1 and 2

— EPA should not limit the BSER to only those blocks to calculate the BSER.

................................ ................................ ................................ ................................ ................. 72
ii. The proposed alternate set of state goals reflects an overly conservative approach.

................. 74
iii. State

- specific emission goals should not be adjusted after the final rule is issued absent extraordinary circumstan ces. ................................ ................................ ................................ .............. 75
iv. Creation of the BSER: The proposed BSER framework appropriately recognizes renewable energy as a means of emissions reduction.

................................ ................................ ......................... 75

v. The BSER’s stringency should be increased over ti me. ................................ ............................ 80
vi. Permanent Reductions: EPA should establish BSER

- based state emission performance goals for affected EGUs that extend beyond the proposed planning period.

................................ ............... 81
vii. The Clean Power Plan correctly concludes that wind energy is an appropriate “outside of the fence line” compliance option that satisfies the “best system of emission reduction requirements” and should be factored into determining state emission targets.

................................ ........................ 82
B. Comments related to compliance issues. ................................ ................................ .................. 109
i. The crediting treatment of the interstate effects of renewable energy.

................................ .... 109
ii. Timing issues related to state compliance.

................................ ................................ .............. 126
iii. State compliance considerations.

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iv. EPA should clarify what the term renewable energy “measures” encompasses.

.................... 131

v. Incorporating renewable energy measures unde r a rate

- based approach.

............................... 132
vi. States should be able to comply under either a rate

- based or mass

- based plan approach as long as equivalency is ensured.

................................ ................................ ................................ ................ 133
vii. EPA should issue guidelines for states.

................................ ................................ ............... 134
viii. EPA should permit and encourage multi

- state/regional plans.

................................ ........... 135
ix. State plans should specify reporting requirements.

................................ ................................ . 136

x. Alternative compli ance payments (ACPs) should not be a compliance tool.

.......................... 136
xi. EPA should explicitly allow for carbon pricing as a compliance option.

................................ 137
xii. Banking: EPA should give credit to new emission red uctions from actions taken after January 1, 2014, as long as they are part of a submitted compliance plan.

................................ ...... 139
C. Comments related to enforcement issues. ................................ ................................ ................ 142
i. States should be able to choose a pproaches in their compliance plans under which responsibility for actions achieving reductions is not placed entirely upon emitting EGUs.

........... 142
D. Comments related to miscellaneous issues. ................................ ................................ .............. 143
i. EPA should combine the two existing 111(d) categories and codify in the Code of Federal Regulations.

................................ ................................ ................................ ................................ ...... 143
ii. Accounting for emissions changes from the substitution of new natural gas generation.

....... 144
E. Comments related to legal issues. ................................ ................................ .............................. 145
i. EPA’s Legal Authority to Issue the Rule and to Regulate Carbon Dioxide Emissions.

......... 145 IV. CONCLUSION ................................ ................................ ................................ ......... 153 V. APPEND IX : EPA’s SPECIFC QUESTIONS AND AWEA’S ANSWERS ................... 15510 | P a g e

II. EXECUTIVE SUMMARY Below is a summary of our main points and concerns regarding the design considerations that we feel should be addressed in the forthcoming final Cle an Power Plan in order for EPA and the states to achieve the goal of significant de

- carbonization of the electric power system at low
cost

. We provide a dditional detail and supporting evidence for these recommendations, as well as other points, in the sub sequent section, “Detailed Comments.” A. Suggested i mprovements to EP A’s Alternative Renewable Energy Approach and the NODA Regionalized Renewable Energy A pproach to make sure the Clean Power Plan accurately reflects the cost
- effective level of renewable en ergy deployment that can be achieved . AWEA generally supports the alternative (technical and economic) renewable energy building block 3 approach included in the June 2 Technical Supporting Documents (Alternative Renewable Energy Approach or TSD Appro ach ) , 8 with the modification detailed in the NODA to calculate the economic renewable resource on a regional instead of a state

- by

- state basis (NODA Regionalized Renewable Energy Approach or NODA Approach ) , as well as other revisions discussed herein

. The combination of these two approaches is vastly superior to a pproach based on renewable portfolio standard (RPS Based Approach) that is set forth in the preamble to the proposed Clean Power Plan

. Our comments are primarily focused on suggesting improvement s to our preferred alternative

— a regionalized version of a technical and economic approach

— to

8 The June 2014 proposed rule included two approaches for renewable energy target

- setting. The approach that the EPA proposed establis hed state renewable targets premised upon an average of state RPS requirements across states in certain regions (see 79 FR 34866

- 34869 and Chapter 4 of the technical support document (TSD) titled “GHG Abatement Methods,” Docket ID No. EPA

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- 17180) (Proposed RPS Approach). The EPA also requested comment on an alternative approach that used a state

- by

- state determination of RE targets, based on technical and market potential (see 79 FR 34869

- 34870 and “Alternative RE Approach Technical Support Document,” Docket ID No. EPA

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- 0458) (Alternative Renewable Energy Approach).11 | P a g e

make sure it best reflect s the cost

- effective level of renewable energy deployment that c an be achieved under the BSER. 9 Below is a summary of the s pecific modi fications to the TSD Alternative Renewable Energy Approach and NODA Re gionalized Renewable Energy A pproach that we discuss at greater length in our detailed comments :
1) EPA should remove the “technical resource” step in which it imposes an arbitrary cap on the percentage of the technical renewable resource that can be developed in a state or region. 2) In quantifying which renewable energy resources are economic, EPA should begin with current, real

- world data on the cost of renewable energy technologies. 3) For projecting changes in the economics and performance of renewable energy through the year 2030, EPA should rely on the detailed and thoroughly peer

- reviewed cost and performance projections developed by the Department of Energy and the National Renewabl e Energy Laboratory (NREL)

. 4) In its economic modeling, EPA should not impose a firm cap on the percentage of variable (wind and solar) renewable energy that can be deployed in a state or region, but rather should economically model the cost of curtailm ent of renewable generation that could occur at extremely high renewable energy penetrations, or rely on such modeling that has already been conducted by others. In the alternative, if EPA does impose a cap, it should rely on the results of renewable inte gration studies done by NREL, grid operators, and others, all of which have found penetrations of variable renewable energy resources of 40

- 50% are achievable and can be accommodated with an integration cost lower than that associated with accommodating th e variability of conventional generators. 5) Changes to the generation mix , changes in fuel prices, and other power system changes that are expected to occur between now and 2030, including those that are triggered by the provisions of 111(d) itself, shoul d also be included in the analysis of the economics and reliability of higher renewable penetrations. 6) Because many planned transmission lines will have been placed in service by 2020, they should also be included in EPA’s analysis. Moreover, EPA should account for the fact

9 I f EPA decides to ultimately pursue the RPS Based Appr oach in the final plan, we offer a number of suggestions for improvement in our detailed comments. If EPA decides to pursue the Alternative Renewable Energy Approach (TSD Approach) instead of the Regionalized Renewable Energy Approach (NODA Approach), all of our suggested improvements except numbers 7 and 10 apply to that approach as well.12 | P a g e

that many additional transmission lines, including those that have not yet been approved, will be planned, built, and placed in service during the compliance time period. 7) Regarding EPA’s question about how regions should be drawn f or purposes of establishing the regions used for setting the NODA regionalized technical and economic renewable resource quantities, we offer detailed guidance to ensure the regions are consistent with important policy, economic, and technical boundaries a nd suggest adjustments that are necessary to maintain consistency wi th existing RPS requirements and accurately represent current renewable energy exchanges. 8) The adequately demonstrated ability of Southeastern utilities to import wind energy generation fr om MISO and SPP should be accounted for in the regional or state calculations of economically availab le renewable energy resources. 9) The reserve margin contribution of wind energy in ERCOT in EPA’s IPM modeling should be updated to account for updates ERCO T has made to its reserve calculation based on new data. 10) In response to EPA’s question in the NODA, once the regional renewable MWh total is calculated, this should be pro

- rata allocated to states based on the amount of total generation in each state. 11) Regarding EPA’s question in the NODA about how to treat a state in which the incremental renewable energy and energy efficiency exceeds historical fossil steam generation levels, EPA should credit this excess renewable energy based on the regional steam fossil emissions rate. 12) EPA should include load growth when economically modeling renewable energy growth and examining the reliability of higher renewable penetrations. 13) If EPA decides to use a method in which the resource potential calculation is bas ed to some extent on existing renewable energy generation, EPA should allocate existing renewable generation to states by looking at power purchase agreements for that generation, not the geographic location of the renewable generation. 14) As outlined in t he NODA, EPA should adjust the goal

- setting formula for calculating building block three to reflect the reduced emissions from affected EGUs from displacement by renewable energy. 15) As outlined in the NODA, EPA should adjust the goal

- setting formula for cal culating building block three to reflect the reduced emissions from affected EGUs from displacement by renewable energy. 16) EPA should review the wheeling charges described in Table 3.4 on pages 6

- 12 of Chapter 3 of the IPM documentation, as many appear to b e higher than current and future wheeling charges.13 | P a g e

17) EPA should check the regional transfer limits listed in Table 3.4 on pages 6

- 12 of Chapter 3 of the IPM documentation to verify that the MW transfer limits are an accurate reflection of current reality. 18) IPM’s assumption of 2.8% inte r - regional transmission losses is much higher than reality. 19) IPM’s modeling assumption of “perfect foresight” biases generation investment decisions against stably

-

priced renewable energy. 20) IPM underestimates the wind plan t availability factor. 21) EPA should verify that IPM’s Turn Down/Area Protection Constraints properly account for the actual and future capabilities of conventional generators to cycle and provide power system flexibility.

B. A “system
- wide” framework for e stablishing the BSER and complying with the performance standards established thereunder can drive significant carbon emission reductions at the least cost. AWEA supports EPA’s finding that the BSER is not limited to emission reduction measures that may b e undertaken at existing EGUs , and instead is a “system” that includes other measures from the electric power system that are beyond the “ fence line ” of those individual units

. We also applaud EPA for allowing "beyo nd

- the

- unit" measures to be eligible as compliance tools with the emission performance standards established based on the BSER. EPA’s determination of the level of emission reductions that have been adequately demonstrated through the application of the four b uilding blocks and, in particular, the third one ( b lock 3

— addressing renewables) based on the broader electric power system is consistent with its legal authority under the CAA and common sense. The language of Section 111 of the
CAA

— directing EPA to identify the system of emission reduc tion best able to secure rigorous carbon emission reductions considering cost and impacts on energy use and other environmental considerations

— virtually compels that a system

- based approach be permitted to satisfy the statutory requirement to consider cost s .14 | P a g e

A system

- wide approach is also justifiable because an at

- the

- unit/beyond

- the

- unit distinction is not a meaningful one given the interconnected nature of the electric system. Indeed, s uch an approach w ould permit states and regulated sources to take ful l advantage of the inherent flexibility of the current regionally

- integrated electricity system to achieve the carbon reduction goals in a reliable and cost

- effective manner. The operations of the electricity system itself rely on the flexibility made av ailable and achieved through dispatching between and among multiple interconnected EGUs and other energy resources, including renewable energy, across state lines

. The utilization and ultimate emissions of individual EGUs operating within this system thu s are a function of the performance of the entire system and should not, and need not be, artificially viewed in isolation. For example, the addition of renewable generation permits EGUs to reduce their own output and emissions , thereby displac ing high

- em ission generation with zero

emission generation. Moreover, many a chievable and cost effective emission reduction opportunities , such as renewable energy , are only found outside the fence line of existing EGUs

. In fact, t h ese existing beyond

- the

- fence emi ssion reduction opportunities are we ll established and are already contributing to emission reductions at affected EGUs , and if these opportunities are accounted for in assessing the reasonableness of the costs of state

- specific goals, as they should be, t he resulting performance standards can reduce even more carbon emissions and at lower
costs

. C. EPA correctly includes wind energy in the calculation of the BSER. The statutory directives of Section 111(d) establish the principle that any achievable and adequately demonstrated system of emission reduction available for compliance with a performance standard must also drive the standard’s stringency

. The Clean Power Plan15 | P a g e

determines that states can ramp up renewable electricity generation and, in particula r, wind
energy as a cost

- effective and adequately demonstrated means of reducing emissions from affected EGUs under a system

- based approach . Wind energy is undoubtedly an effective, widely available, affordable, reliable , and rapidly scalable method for r educing carbon emissions in the power sector and , in turn, complying with the final Clean Power Plan . I ndeed, the Clean Power Plan would fall far short of delivering the maximum emission reductions existing plants can achieve at a reasonable cost, as requ ired by the statute, if did not include wind energy in that calculation

. D. EPA s hould re evaluate the BSER periodically and increase the stringency , as appropriate, and ensure compliance timing . Section 111(b)(1)(B) calls for EPA, at least every eight yea rs, to review and, if appropriate, revise federal standards of performance for new sources . This requirement provides for regular updating of performance standards for new sources as advances provide technologies that are cleaner or less costly

. While Se ction 111(d) does not require regular review and revision, as it is silent on the issue, there is nothing preventing EPA from instituting such a review of the standards thereunder . In fact, i t would be inconsistent with the statutory scheme to set a weak standard that adequately demonstrated systems achieve and exceed in practice without updating them. In addition, updating would be consistent with the “no backsliding” policy that is appropriately emphasized in the Clean Power Plan 10 t hat ensure s the stand ards sustain or increase the stringency of the goals

. In order to ensure that the BSER does not ultimately outpace requirements in the 111(d) context as well, EPA should review and revise the Section 111(d) standards to capture technological advance s and c hanging economics ( i.e., new, innovative, or improved compliance

10 Clean Power Plan at 34,917.16 | P a g e

to o ls that have been adequately demonstrated)

. To that end , AWEA recommends that EPA treat the 2030 final goals as a default, and further commit to reviewing, and if appropriate revising, th e 2030 final goals by no later than 2024 (giving states time to revise their plans by the 2025 update deadline and eight years after state pl ans are to be approved by EPA).
E. EPA should provide further clarification on the crediting of emission reductions from out
- of

- state renewable energy to ensure that the state that retires the environmental attributes of renewable energy gets to claim the full credit. We agree with EPA’s proposal that a state should be able take into account all of the
carbon emissi on reductions from renewable energy measures implemented by the state, whether they occur in the state or in other states . The Clean Power Plan offers states a number of options for the treatment of these emission reduction activities. In general, consis tent with one of the options set forth in the proposed rule , the implementing state or entity (i.e., created the measure that led to the production of the energy) should be able to claim the environmental attributes of purchased renewable electricity from out

- of

- state generation , reg ardless of where the emissions reductions occur , in its state compliance plan.
W ith respect to a multi

- state or regional compliance plan s , we also agree that states should be able to address the crediting of the interstate eff ects of renewable energy through cooperative agreements between states and regional determinations. This gives flexibility to states to choose from a variety of pathways to credit emission reductions in a manner that best addresses how they want to distri bute credits , and likely will encourage multi

- state/regional compliance approaches. We encourage EPA to provide further guidance in the final rule on the crediting of the interstate effects of emission reductions. In particular, clarification should be provided on how states should avoid double counting in instances in which one state claims credit for emissions17 | P a g e

reductions caused by renewable generation and another state that holds the environmental attributes of the same energy also claims credit. To t hat end, EPA should provide guidance that every state using renewable energy MWhs to comply with its state goal demonstrate that the

zero - carbon attributes of that renewable energy are dedicated to that state. Doing so will avoid conflicts between states seeking to count the same renewable electricity as part of their compliance plans, minimize double counting concerns, and avoid disruptive uncertainty in the underlying commercial markets. EPA should strongly encourage states to do so through an environme ntal attribute accounting system, whereby the state gets credit from EPA for each unit (e.g., MWh) of renewable energy by retiring the environmental attribute credit associated with that unit of renewable energy or showing that an environmental attribute c redit has been retired by a regulated entity (e.g., EGU or distributio n utility) within that state. U nder any such accounting framework, the environmental attributes would start with the renewable energy generator for each unit of renewable energy generat ed. Environmental attributes could then be transferred using any instrument

— e.g., bundled with power in a bilateral contract, unbundled and sold separately from power, kept and retired by the owner of the renewable facility

— consistent with the law of the state where the generator was located. If a state chooses not to develop or participate in such an environmental crediting accountin g system for renewable energy , EPA should only allow a state to include renewable energy MWhs in its compliance plan if i t can demonstrate entities in the state have submitted environmental attributes ( i.e., credits) for those MWhs. EPA should provide an accounting option for those states that decline to adopt a credit policy so that they can nonetheless use renewable power to comply with their target.18 | P a g e

Because nearly every state experiences significant interstate power flows that cause a large share of the emissions reductions associated with the use of any low

- or zero - carbon

resource to occur in other states, a ccounting m easures will be necessary during both the plan development and approval phase and in the compliance demonstration phase to ensure that the full emissions reductions associated with low

- or zero - carbon resources are credited back to the entity making the in vestment and that other states cannot “free

- ride” on the emissions reductions
that occur in their state due to the compliance actions of another state

. This concern and need for rigorous interstate accounting exists under either a rate

- based or mass

- based compliance approach , and applies to all low

- and zero

- emission carbon reduction solutions

. Depending on the formula used by states and EPA, th e credit received by the state taking the action should include both the MWh and emissions reductions associated with the renewable generation

. Fortunately, accounting measures , including marginal emissions calculations and power system modeling , provide sufficient accuracy to make these accounting adjustments during both the plan development and approval phase and the compliance demonstration phase. EPA should not dictate the form of acceptable environmental attribute credits. State plans could use RECs generated as part of new or existing RPS program , or RECs generated as part of the voluntary REC market, so long as those RECs include the zero

- carbon attributes of the generation. Alternatively, a state plan could use environmental attribute credits that have been unbundled from the renewable attributes of a REC, such as those created as part of existing voluntar y GHG reduction programs, or those developed specifically as part of a Clean Power Plan state plan or multi

- state agreement. However, EPA should be clear that existing REC and environmental attribute crediting platforms

— including voluntary REC tracking sy stems

— are acceptable tools for approvable state plans to use, and that for any existing or newly developed19 | P a g e

system to be approvable it must ensure that the same renewable MWhs do not generate or use credits that can be double counted. AWEA believes that t hese modifications and clarifications should resolve the uncertainty created by the proposed rule and provide a strong signal to renewable energy developers and purchasers that their existing and future contracts for the environmental attributes of the ene rgy will be honored.
F. EPA should explicitly allow states to use the “state commitment a pproach ” in their compliance plans. S tates should be able to choose approaches in their compliance plans under which full responsibility for actions achieving reductio ns is not pla ced entirely upon emitting EGUs.
I nstead, state plans should be able to include measures and poli cies (e.g., RPSs) for which the state itself is responsible. To facilitate this outcome , we support the proposed “ state commitment approach, ” und er which the state requirements would not be components of the state plan and , therefore , would not be federally enforceable

. Rather , the state plan would include an enforceable commitment by the state itself to implement state enforceable (but not federa lly enforceable) measures that would achieve a specified portion of the required emission performance level on behalf of affected EGUs. This flexible approach should serve to incentivize more states to embrace renewable energy programs and measures as com pliance tools if they are concerned about making their renewable energy programs and policies federally enforceable

. G. Emissions changes under a rate
- based pl an from substitution of new gas facilities. Emissions from new gas generation under a rate

- based plan resulting fro m the substitution of new natural gas generation for affected EGUs should be calculated toward a20 | P a g e

required emission performance level for affected EGUs. If new gas generators are used for compliance purposes, they should be factored into the establishment of performance standards to ensure symmetry between the resources considered in setting the target and resources allowed for compliance. A failure to account for emissions from new gas generators would make it misleadingly seem like new gas generation is a non

- emitting re source for purposes of Section 111(d) compliance, when in reality it would continue emitting carbon dioxide , undermining the goal of reducing electric sector carbon emissions. Further, n ot counting these emissions would greatly skew incentives for investment and dispatch decisions towards new gas generation and away from true zero

- carbon alternatives and existing gas generation.
H. EPA should provide limited banking for carbon reducti on actions taken after January 1, 2017, and before the plan performance period begins. EPA should allow credit for new carbon reduction actions (i.e., increasing existing policies , adopting new programs, and building new qualifying facilities ) , taken after January 1, 2017, and before the beginn ing of the plan performance period (2020) to count toward achievement of the state's emissions goals

. This would help ensure that states have an incentive
to engage in carbon reduction measures prior to that period , achieving emissions reductions more

cos t

- effectively and making states better positioned to achieve their final compliance goals

. I. If a state opts to convert to a mass - based target , EPA should require a subsequent true - up of the emissions reduction requirement during the compliance time fram e based on actual load growth. Otherwise , the rate - based performance standard may not be met, and it also creates an incentive for states to use high load growth p rojection s for use in the mass - based conversion. The conversion of a rate

- based standard to a mass

- based standard is highly sensitive to the assumed rate of load growth. This creates a strong incentive for states to try to minimize their emissions reduction requirement by adopting a mass

- based approach and using unjustifiably high assumptions for the rate of future load growth, thereby , in effect, setting a less stringent21 | P a g e

requirement that allows for higher level of emissions. By requiring a “true

- up” during the compliance period to account for the actual rate of load growth, EPA can ensure th at states achieve the level of emissions reductions specified in their rate

- based standard.

III . DETAILED COMMENTS A. Comments related to setting the best system of emission reductions

— building blocks. Building block 3: the Clean Power Plan’s BSER method ology i. underestimates the contributions from renewable energy regarding what is feasible, cost
- effective, and adequately demonstrated . AWEA supports EPA’s general building block

- based approach to the BSER and believes that the overall targets EPA has set through those blocks are achievable. However, particular features of the Clean Power Plan’s BSER methodology have resulted in estimated contributions from various technologies, including renewable energy, that underestimate what is feasible, cost

effecti ve, and adequately demonstrated. As a result, the state goals in the proposed rule reflect a feasible system of emission reduction, but not necessarily the “best” system of emission
reduction. Each individual BSER building block , and the combination of t he four together, can and should better reflect the true potential emission reduction contribution from the cost

- effective

resources in each state and region. AWEA provides recommendations below to make the renewable energy BSER methodology a more accurat e analysis of the technically feasible, demonstrated, and cost

- effective renewable energy resources under available to a state under building block 3

. The Clean Power Plan lays out three primary methodological options for calculating the feasible, demonst rated, and cost

- effective contribution of renewable energ y to reducing emissions under the BSER

. Under the proposed approach (Proposed RPS Approach ), the draft22 | P a g e

r ule uses state RPS policies as the benchmark for achievable renewable energy generation. Und er an alternative approach described in a technical support document to the proposed rule ( Alternative Renewable Energy Approach ), 11 the Clean Power Plan sets forth a state

- based technical and economic a p proach to determine renewable potential within state borders. In addition, under a further alternative approa ch, detailed in the NODA ( “ NODA Regionalized
R enewable A pproach), EPA lays out a regionalized version of the Alternative Renewable Energy
A pproach for calculating each state’s renewable target based on the renewable potential available across a multi

- state region in which the state is located.
AWEA supports EPA’s inclusion of renewab le energy into the BSER as part of building block 3 , but propose s herein a number of revisions to all three of EPA’s proposed methodologies . In particular, we propose revisions to the NODA Regionalized Renewable Energy A pproach that we think would best ensure that the final plan correctly capture s the achievable, cost

- effective, and adequately demonstra ted growth of re newable energy. While w e strongly recommend that EPA strengthen the targets for renewable energy by adopting the NODA Regionalized Energy A pproach for calculation of building block 3 of the BSER, subject to the modifications detailed herein, i f EPA decli nes to adopt that a pproach in the final rule, we recommend, in the alternative, that it adopt the state

- based t echnical and economic approach, as outlined in the TSD Alternative Renewable Energy Approach , subject to the modification s proposed below

. 12 And, if EPA fails to embrace either our preferred NODA approach or the TSD Alternative Renewable Energy Approach in the final rule , but instead

11 Available at http://www2.epa.gov/sites/production/files/2014

- 06/documents/20140602tsd

- alternative

- re approach.pdf

. 12 All of our suggested improvements below, except numbers 7 and 10, also apply to the TSD Approach, while all apply to the NODA Approach.23 | P a g e

adopts the Proposed RPS Approach for calculating building block 3 , we propose numerous revisions thereto to help ens ure that it more accurately captur es renewable energy potential. Although EPA is right to include renewable energy generation as part of its evaluation and application of the BSER, t he Proposed RPS Approach significantly underestimates the amount of electr icity that can be cost

- effectively generated by renewables over the 2 020

- 2030 compliance period. As explained in more detail below , t he Proposed RPS Approach fails to reflect current deployment rates, continued growth, the economics of renewable energy
te chnologies, and the falling costs of renewable energy projects. As such , AWEA believes that EPA should adjust its methodology for calculating state and regional emission reductions targets in the final Clean Power Plan.
A methodology based directly on r enewable resource economics and demonstrated and future cost , such as the methodolog y set forth in the TSD, is a more appropriate measure of achievable and cost

- effective renewable energy than an approach based on historical state policies , such as the Pro posed RPS Approach

. In addition , the regional ized a pproach set forth in the NODA , is an improvement to the state

- by

- state TSD a pproach , as it correctly evaluates the achievable renewable potential of each state based on the quantity and cost of the region al renewable energy resource. Based on extensive historical experience of utilities procuring renewable energy from other states in their region, through bundled RECs or other measures, this is a much more realistic metric of the quantity of renewable ene rgy that is technically feasible, demons trated, and cost

- effective for a particular state to procure for purposes of Section 111(d) compliance

. Therefore, consistent with the NODA approach , each state’s emission reduction goals from renewable energy shoul d be adjusted based on the total renewable energy potential24 | P a g e

available across a multi

- state region

. In other words , a state’s goal sh ould be informed by the opportu nity to develop out

- of

- state renewable resources as part of its state plan

. Power system mo deling conducted by the Natural Resources Defense Council 13 and the Union of Concerned Scientists , 14 respectively using the Integrated Planning Model ( IPM ) and Regional Energy Deployment System ( ReEDS ) models that are regularly employed by the EPA, confirms that larger quantities of renewable energy than assumed by EPA are technically feasible, demonstrated, and cost

- effective

. UCS’s analysi s found that the nation’s renewable electricity generation c ould approximately double the level assumed in EPA ’s propose d approach by 2020 , increasing from 7 percent of total U.S. electricity to 14 percent

. By 2030, UCS’s analysis found 23 percent of generation could come from renewable energy, versus the 12 percent level assumed by EPA. The UCS analysis found this greater use of renewable energy would result in faster and more economic decreases in carbon emissions through 2030. Total carbon reductions achieved by the Clean Power Plan could increase from 30 percent below 2005 levels to nearly 40 percent.
T hese numbers co nservatively assum e that the addition al renewable generation replaces natural
gas generation; if coal generation were replaced, the figures would be even higher. These emission reductions could also be further increased if improvements are made to other C lean Power Plan building blocks. By adopting our recommended modifications to building block 3,
EPA would better represent the cost

- effectively achievable level of renewable energy deployment and thereby cost

- effectively increase the total emissions reduc tions achieved by the Clean Power Plan.

13 Available at http://www.nrdc.org/air/pollution

- standards/clean

- power - plan

- energy - savings.asp

. 14 Available at http://www.ucsusa.org/sites/default/files/attach/2014/10/Strengthening

- the

- EPA

- Clean

- Power

Plan.pdf

.25 | P a g e

By using more recent data on the cost and performance of renewable energy and energy efficiency than was employed in EPA’s development of the BSER, NRDC found that EPA's proposed state targets could be met at a tot al savings of $1.8 billion to $4.3 billion in 2020, instead of EPA's estimated costs of $5.5 billion and $7.5 billion. Total savings would reach $6.4 billion to $9.4 billion in 2030, instead of the EPA's estimated costs of $7.3 billion to $8.8 billion.
T he updated cost and performance data also resulted in a nearly 50 percent higher level of renewable energy deployment than EPA assumed in the BSER for building block three.
Even t hese level s of renewable energy growth are conservative relative to the findi ngs of two Department of Energy reports which have concluded that wind energy alone could cost

effectively provide 20 percent of U.S. electricity by the year 2030. The Department of Energy’s 2008 report “20 Percent Wind Energy by 2030” 15 and its forthcomin g “Wind Vision” 16 report both found large societal net benefits , including very large reductions in carbon dioxide emissions and m inimal impact on consumer electricity costs , from reaching 20 percent wind energy by 2030. DOE’s forthcoming Wind Vision repor t confirms that greater amounts of wind energy can be deployed at little to no cost to consumers. It found that under the 20 percent wind by 2030 scenario, electric rates would increase just under 1%, but that by 2050 rates are expected to drop by $3/MWh, a 2% savings for ratepayers. 17 UCS’s analysis similarly found that with 23 percent of U.S. electricity provided by renewable energy in 2030, average consum er electricity prices would be at maximum only 0.3 percent higher ( about 18 cents for a typical hous ehold’s

15 Available at http://energy.gov/e ere/wind/20

- wind

- energy - 2030

- increasing

- wind

- energys - contribution

- us electricity

- supply

. 16 Available at http://energy.gov/eere/wind/new

- vision

- united

- states

- wind

- power . 17 Available at http://www.utilitydive.com/news/how

- the

- us - will

- get

- a - third

- of

- its

- energ y - from

- wind

- by

midcentury/335423/

.26 | P a g e

utility bill) than business as usual. 18 This does not even account for the benefit provided to natural gas users outside the electric sector from reducing natural gas prices by nearly 10 percent. DOE’s Wind Vision scenario found that reaching 3 5 p ercent wind energy by 205 0 would make the power system 20% less sensitive to natural gas price fluctuations, resulting in $280 billion in
cumulative benefit s for electricity consumers alone. 19 Greater use of wind energy provides numerous other benefits. By reducing air pollution, the 35 percent wind energy by 2050 Wind Vision scenario saved a cumulative $108 billion in avoided health and economic damages

. The Wind Vision analysis a lso found power system water consumption is reduced 4% by 2020, 11% by 2030 and 23% by 2050. The incremental cost impacts of increasing r enewable generation as proposed under our revised approach fall well within the range that EPA identifies as meeting the BSER cost criteria under the Clean Power Plan , thanks largely to advances in tech nology and decreases in renewable energy costs. The average cost of wind energy has dropped by around 60 percent since 2009, making it cost competitive with new fossil fuel plants in many regions. 20 These trends in improved technology and reduced costs for renewable generation are expected to continue into the future , yet as proposed, the Clean Power Plan does not adequately account for this progress.

a. EPA should adopt the Alternative Renewable Approach , subject to using the NODA Regionalized Approa ch and the modification proposed herein.

18 http://www.ucsusa.org/sites/default/files/attach/2014/10/Strengthening

- the

- EPA

- Clean

- Power

- Plan.pdf , pa ge 5 19 http://www.utilitydive.com/news/how

- the

- us - will

- get

- a - third

- of

- its

- energy - from

- wind

- by

- midcentury/335423/ 20 Lazard Levelized Cost of Energy Analysis, available at http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20

- %20Version%208.0.pdf ; DOE 2013 Wind Technologies Market Report, available at http://emp.lbl.gov/sites/all/files/lbnl

- 6809e.pdf , page 5927 | P a g e

AWEA and others have expressed concern regarding the renewable energy target

- setting component of building block 3 , explaining that there is as a potential misalignment between estimating each state’s target based on in

- state renewables while allowing use of out

- of

- state renewables for compliance with state goals , under the previously discussed methodologies

. The
NODA Regionalized Approach provides a th ird methodological option for renewable targets (beyond the RPS and alternative techno

- economic that were in the proposed rule) that would be b ased on a regionalized approach and remedy this issue

. The NODA Regionalized Approach adjusts each state’s renewable target based on the
renewable potential available across a multi

- state region in which a state is located. Under this approach, a state’s goal would be informed by the opport unity to develop out

- of

- state renewable resources as part of its state plan, and thus would better align renewable targets with the proposa l to allow the use of certain out

- of

- state renewables for compliance

. The NODA states t his regionalized approach could group s tates into regions, then aggregate renewable generation potential a cross the states in each region, and then reappor tion the aggr egate identified renewable generation to individual states on a pro - rata load

- or generation

- weighted basis , regardless of the specific state where the generation would likely o ccur . EPA also states that the regional
struct ures could be informed by NERC regions, FERC Planning Regions, RTOs, current regional renewable energy credit tracking s ystems, or some other approach. EPA seeks comment on the regional structure considerations and the criteria that should be used for reapportioning state renewable tar gets within given regions, as well as a justification for those criteria. The NODA Regionalized Approach’s target

- setting methodology takes into ac count interstate exchanges of renewables in the calculation of state goals and, therefore, is better align ed with existing state renewable policies and potenti al claims on a given state’s renewable28 | P a g e

generation by parties from other states (such as renewable energy certificates and power purchase agreements (PPAs ). Specially, it correctly provides a direct eval uation, by EPA, of the technically and cost

- effectively recovera ble level of renewable energy that each region can provide. T his approach , if implemented as an improvement to the Alternative Renewable Energy Approach and subject to some modifications disc ussed herein, is our preferred approach as it will
accurate ly refl ect the appropriate level of the technical feasibility and cost

- effective ness of renewable energy generation , based on technology and market trends , that should be reflected in state targets

. We think that bett er aligning goal

- setting to probable compliance approaches may mitigate some of these potential concerns. Below we provide responses to various questions posed by EPA in the NODA regarding how to calculate building block 3 for renewa bles and propose suggested improvements to this approach.
b. The NODA correctly takes a regional approach.
AWEA agrees with EPA that : A chievable renewable energy potential exists at significant and comparable levels in all regions of the country. While varied regional characteristics (e.g., the extent of renewable resources available, cost of competing sources of power, and level of past renewable energy development) affect estimates of achievable potential, ongoing improvements in technologies and prac tices, and continually improving strategies for renewable energy development are increasing the extent of economically utilized renewable resources across al l regions of the United States. 21 In light of EPA’s acceptance of the feasibility of significan t achievable levels of renewable energy in all regions, as quoted, AWEA believes that EPA correctly proposes in the
NODA to look at the renewable resources available in a region to inform state targets . Such a

2129 | P a g e

regional approach would take into considerati on the variation of renewable generation potential while accounting for the interconnected nature of the power system and the manner in which utilities have been purchasing renewable energy thus far.
A regional technical and market potential for renewabl e energy deployment would best reflect the real operation of the electricity system, relying on the flexibility made available and achieved through dispatching among multiple interconnected EGUs and other energy sources, including renewable energy, across state lines. A regional approach to quantification also gives a more complete picture of the use of renewable energy as well as the nature of carbon pollution

. The global nature of the dispersion and impacts of carbon pollution supports a regional approa ch , since the location of emissions or emission reductions does not affect the impact of such emissions . In short, in recogniti on of the global nature of carbon emissions and the interstate nature of the electrical system, the NODA rightly relies on a reg ion

- by

- region assessment of renewable energy technical and market potential when determining the target for a particular
state

. States may differ in important ways, including in their mix of existing EGUs and policy priorities, but taking interstate renew able energy opportunities into account will create more achievable and equitable emission reduction goals. The very functioning of th e electricity system itself relies on the inherent flexibility made available and achieved through dispatching between and among multiple EGUs and other energy resources, including renewable energy , interconnected across the broader bulk electric grid and over state lines. Giving greater consideration to interstate opportunities in the goal

- setting process would allow also potential cost savings to be considered in assessing the reasonableness of the costs o f
state

- specific goals. In other words, using regional evaluations allows the recognition of30 | P a g e

additional emission reduction opportunities from renewable energy that would be available at reasonable costs based on a more complete representation of the capabilities of existing infrastructure to accommodate shifts in generation am ong EGUs in multiple states. As such, i f interstate renewable opportunities are accounted for, s tate

- specific goals can likely reduce more carbon, as they will be based on an assessment of the amount of emissions that can be reduced through the application of a broader base for the BSER. Interstate purchases of renewable energy are adequately demon strated and in fact , are quite widespread. AWEA’s analysis of publicly available PPA data finds that nearly 13,000 MW, or more than 20% of the nation’s installed wind generating capacity, is currently under contract with a utility in a state other than th e one in which the generation is located. This includes significant purchases of wind energy across relatively large distances, such as utilities in the Southeast purchasing and receiving physical delivery of wind energy from the Midwest , and utilities in California purchasing wind energy from the Pacific Northwest. In sum, our analysis s hows that the Clean Power Plan w ould better take into account the full value of renewable energy that is achievable and adequately demonstrated for deployment in
states, w hile preserving reliability , ensuring reasonable costs , and deliver ing much deeper reductions in emissions, if it adopts in the final rule based on the regionalized version of its Alternative Renewable Energy Approach set forth in the NODA, subject to the proposed modifications proposed below

.

Necessary i mprovements to the technical and economic Approaches

– ii. NODA Regionalized Approach and the Alternative Renewable Energy Approach. A direct evaluation by EPA of the most technically and cost

- effectively de ployable level of renewable energy in each state can provide a more accurate and conceptually appropriate31 | P a g e

estimate of the contribution of renewable energy to the BSER. EPA has proposed such a methodology in i ts Alternative Renewable Energy Approach and in the NODA Regionalized Renewable Energy Approach. Unlike EPA’s primary proposed renewable energy scenario that relies upon a n application of state RPS commitments , the alternative methodology correctly relies upon an assessment of renewable energy technic al and economic potential. Specifically,
t he TSD and NODA a pproaches present a more accurate evaluation of the level of achievable,
cost

- effective renewable energy in a state than the P roposed RPS A pproach , as it would directly consider the renewable reso urces that will be available to the state at reasonable cost during the compliance period . As discussed in the previous section, AWEA supports the use of the
NODA ’s regionalized a pproach , but believes it must be modified to better represent the current

an d future cost and performance of renewable energy, and a number of features of the power system. The Alternative Renewable Energy Approach calculates the renewable energy target for a state by taking, for each energy resource type (i.e., solar, wind, geoth ermal, biomass, hydro), the lower of: (1) a resource availability (or “benchmark generation”) measure

— based largely on a
NREL GIS

- based study; and (2) the amount of generation from that renewable resource projected through the use of EPA’s Integrated Plann ing Model (IPM) (IPM

- projected generation). 22 The level calculated for each renewable resource type in a state is then summed for determining the total r enewable target for that state. As explained above, the NODA a pproach , which is AWEA’s preferred appr oach (with the modifications discussed herein ), takes this method one

22 On page 7, in the Alternative Renewable Energy Approach from the TSD, EPA a lso proposes an alternative to this second step of the alternative approach that would use an avoided cost calculation instead of an IPM model run. Such an approach should produce a similar outcome as the IPM modeling. Should EPA decide to pursue the avo ided cost methodology, it should also adopt all of the relevant modifications from the list below.32 | P a g e

step further by finding the total regional economic resource, and then allocating that resource out to the states. The TSD and NODA a pproaches are indeed an improvement over the RPS

- base d approach , but they still significantly underestimate the actual renewable energy potential for states today, let alone expected cost reductions and other changes through 2030. If EPA ultimately adopts this approach, it should modify the methodology to s et targets based on what will actually be achievable and cost

- effective during the compliance period. Because of shortcomings in some of the methodology and assumptions employed , which are outlined below, the TSD and NODA a pproach es significantly un derest imate the level of cost

- effective renewable energy that each state can achieve by 2030. Therefore, if EPA adopts the combination of these

a pproach es in the final rule, AWEA recommends that the agency adopt a revised version that corrects these shortcoming s. In this section, we recommend a number of modificati ons that need to be made to such an approach to ensure that it is a more accurate reflection of the technically feasible, cost

- effective level of renewable energy generation based on accurate technolo gy and market trends. EPA should remove the “technical resource” step in which it imposes an

iii. arbitrary cap on the percentage of the technical renewable resource that can be developed in a state or region. In the Alternative Renewable Energy Approach , EPA takes the lesser of this technical cap or the economic quantification of the renewable resource. This technical resource step is redundant , as the economic analysis step already accounts for the quantity and quality of the

resource . M oreover, exper ience shows that such a cap is not binding as many states have already significantly exceeded the cap proposed by EPA . Imposing any technical resource limit that is less than 100% of the total technical resource would be redundant and an inaccurate33 | P a g e

repres entation of the economic factors that drive and limit renewable energy development. In the alternative, the cap should be raised to account for the fact that larger wind turbines, higher hub heights, and declining costs have expanded the viable wind resou rce in many states, enabling many states to greatly exceed the MW cap that EPA has proposed. The Alternative Renewable Energy Approach caps the amount of generation expected from each evaluated technology type for each state based on the development ra te of that technology in the top states in 2012 (deemed “benchmark generation”). That is, the estimated 2030 benchmark generation for each technology type is driven primarily by the amount of generation from that technology in 2012 , rather than from a pro jection of the technically and economically feasible generation from that source in 2030. In reality, t he amount of generation from most renewable technologies increases each
year

— often significantly. For example, since the end of 2005, the U.S. wind energy industry has doubled its installed capacity, on average, every 36 months. Over the last decade, the industry has gone from a low mark of installing 396 MW in 2004 to a high of more than 13,000 MW in 2012, and as of earlier this year there were more wind projects under construction in the U.S. than at any point in U.S. history. U.S. wind energy’s five year average annual growth rate is 19.5 percent from 2009

- 2013. In addition, because each state’s target generation from a particular resource ty pe is capped at the proportion of 2012 generation to technical potential for the top states for all compliance years, this underestimation will only increase over time, as continuous improvements in renewable technology drive increasing deployment. As not ed in the previous section, the amount of generation in a state from a particular technology in 2012 is largely a reflection of state policy, rather than a reflection of resource availability or technological capability.34 | P a g e

T echnological progress for renewa ble energy has been rapid. For example, the U.S. Department of Energy reported several months ago that “[t] he average nameplate capacity of newly installed wind turbines in the United States in 2013 was 1.87 MW, up 162% since 1998

– 1999. The average hub he ight in 2013 was 80 meters, up 45% since 1998

- 1999, while the average rotor diameter was 97 meters, up 103% since 1998

– 1999.” 23 The hub height data is particularly relevant as EPA’s proposed technical cap for all states is based on NREL’s
assessment of the wind resource at 80 meters above the earth’s surface. While 80 meters was the national average hub height in 2013, in all but the best wind resource regions hub heights of 90

- 100 meters or more have become the standard. These taller wind turbines offer access to significantly greater wind resources than can be found at 80 meters, greatly expanding the available resource beyond the limit arbitrarily imposed by the technical resource cap. This is further confirmation that the technical resource limit plac es an inaccurate and unnecessary cap on the potential for wind energy deployment in many states. AWEA data confirm that 31% of the turbines installed in 2012 had hub heights higher than 80 meters. Further evidence that the technical resource cap is an a rbitrary and unrealistic limit is demonstrated by the fact, acknowledged in EPA’s TSD document, that many states have already greatly exceeded the technical resource cap that EPA seeks to impose. In calculating the benchmark developm ent rate for onshore w ind, the Alternative Renewable Energy Approach takes the average development rate of the 16 states with the highest penetration of that technology. Inherent in taking an average is the fact that a sizeable proportion of the states will have a penetration rate that exceeds the technical resource cap. For example, renewable

23 Available at http://emp.lbl.gov/sites/all/files/lbnl

- 6809e.pdf

.35 | P a g e

penetration levels as a share of the technical resource in Washington (14%), California (11%), West Virginia (25%), and Pennsylvania (25%) already exceed th e 9% resource cap.
Moreover , the Alternative Renewable Energy Approach does not justify why it is appropriate to deem the top third as the “best” performers. In fact, other portions of the Clean Power Plan utilize smaller numbers of states to more accurately establish technically fe asible best practice. In addition, when determining the appropriate best

- practices level of achievable annual incremental energy efficiency, the Clean Power Plan deems an incremental savings rate of 1.5 percent as achievable based on the practices of thre e states and the anticipated achievement of an additional nine states.
T he technical resource cap is entirely redundant with the quantification of the economically viable renewable resource that is already c onducted in the IPM modeling. That modeling be gins with the quantification of renewable resource s in each state, and the economic model determines how much of that can be economically deployed. Imposing any technical resource limit of less than 100% would be redundant and an inaccurate representation of the economic factors that actually drive renewable energy development. For all these reasons, it makes little sense to cap 2030 renewable generation based on the 2012 level of deployment, even in the top states. While top states are likely capturi ng an achievable and cost

- effective portion of technical potential renewable generation based on 2012 costs and technological development, that portion will surely increase over time as technology cost and performance continue to improve , particularly for states with lower quality wind resources that are disproportionately benefiting from taller towers and other low

- wind

- speed turbine technologies

. Building block 3 should capture predictable improvements based on established trends when determining the lev el of renewable generation that is feasible in each36 | P a g e

state. Technical potential is simply not a realistic or useful number to use in setting a benchmark. EPA should , therefore, just exclude the technical potential benchmark from the alternative approac h and rely solely on the IPM model results, which would produce a more accurate representation of likely future development. As noted by EPA, the IPM model takes into account the cost of building renewable generation, but the model also takes into account grid conditions in a state and a number of other factors. EPA uses the IPM model to analyze the impact of air emissions policies on the U.S. electric power sector such as the Clean Air Interstate Rule, Cross

- State Air Pollution Rule (CSAPR), the Mercury and Air Toxics Standards (MATS), and the proposed Carbon Pollution Standards for New Power Plants. Therefore, there is precedent to rely solely on the IPM model for setting the renewable targets in each state under the alternative approach. Another opti on would be to use the demonstrated recent growth rates of renewable energy technology as the basis for the benchmar k element of the approach rather than absolute 2012 development rates. As a third alternative, EPA c ould increase the technical cap to acco unt for technological improvements and cost reductions that have expanded the quantity of the renewable resource available , particularly in states and regions that appear to have lower quality wind resources at 80 meter hub heights but actually have signif icant resources at the higher hub heights that are being used in those regions today

.

In quantifying which renewable energy resources are economic, EPA iv. should begin with current, real
- world data on the cost of renewable energy technologies. The wind cap ital cost assumption for the year 2016 that is used in EPA’s IPM run, $2,258/kW in 2011 dollars, 24 is 39% too high relative to current installed wind costs, documented to be at $1,630/kW for installed wind project costs in 2013 by the Department of

24 Available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_4.pdf , page 29.37 | P a g e

Energy a nd Lawrence Berkeley National Laboratory’s dataset. 25 While wind costs have rapidly declined and continue to decline, with wind purchase prices falling by more than half over the last five years, the DOE/LBNL report estimates wind projects slated for insta llation in 2014 are likely to see an average installed cost of $1,750/kW. This is because the 2013 projects were heavily concentrated in the i nterior region s of the U.S. , which has below average costs for wind plant installation relative to other regions. Thus, LBNL concludes that $1,750 /kW may be a more representative indication of wind’s current installed costs on a national basis. Regardless, even in this case, the capital cost figure used in EPA’s IPM run for 2016 is 29% too high. As a secondary ma tter, IPM ’s wind O&M costs are also significantly too high relative to current costs. IPM assumes fixed O&M costs of $38.86/kW/year, while the DOE/LBNL report indicates costs of $28/kW/year in 2013, as indicated by a Bloomberg analysis of the pricing of 5

- year full

- service O&M contracts. Before beginning the more difficult task of estimating how renewable energy costs will decline in the future, EPA should ensure that its current year assumptions for renewable energy costs are brought in line with reality

.

For projecting changes in the economics and performance of renewable v. energy through the year 2030, EPA should rely on the detail ed and thoroughly peer
- reviewed cost and performan ce projections developed by the Department of Energy and the National Renew able Energy Laboratory.
B uilding block 3 ’s economic modeling should reflect expected cost reductions from renewable technologies over time. In addition to technological advances, “ technology learning ” through deployment has been shown to consistently drive down cost as the volume of technology deployed rises. Section 111(d) state compliance plans are likely to encourage additional

25 Available at http://emp.lbl.gov/sites/all/file s/lbnl

- 6809e.pdf , page 50.38 | P a g e

renewable capacity installation and therefore cost reductions, on top of the cost reductions driven by ongoing renewable energy growth. The current IPM modeling conducted by EPA assumes minimal capital cost reductions for wind and solar energy through 2030, with wind costs declining from $2,258/kW in 2016 to $2,250/kW in 2018, $2,220/kW in 2020, $2,123/kW in 2025, and $2 ,039/kW in 2030. 26 In contrast, the Department of Energy report found that the current installed cost of wind energy in 2013 was $1,630/kW, as noted above. It is deeply concerning that under the current IPM modeling inputs, even though the model assumes c ontinued cost reductions, the wind cost in 2030 is still 15

- 25% higher than the wind cost seen today. In the case of wind energy, EPA should rely on the cost reduction projections included in the forthcoming Wind Vision report, which NREL has provided to EPA. In addition to capital costs, EPA should also incorporate these documents’ projections for reductions in O&M costs, which are listed as “OpEx” in the Wind Vision document. The Wind Vision document also contain the necessary data for assessing cur rent and future wind performance, i.e. , capacity factor. The ReEDS model that was used for the Wind Vision analysis contains a detailed representation of hourly renewable plant output in 17 time slices, 27 which can be readily mapped to the hourly wind gene ration profiles employed in the IPM. Wind Vision contains detailed data on expected wind plant capacity factor improvements, broken down by wind resource class. These wind resource classes can be readily translated to the resource classes in the IPM, and used to modify the region and class

- specific hourly wind generation profiles employed in the IPM.

26 Available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_4.pdf , page 29. 27 In ReEDS there are f

our diurnal time slices (morning, afte rnoon, evening, night) for each of the four seasons (winter, spring, summer, fall) and a summer peaking time slice

.39 | P a g e

In addition, Wind Vision’s extensive dataset of regional wind supply curve information should be used by EPA to characterize the economically viable rene wable energy resource in each region

. EPA should tak e care not to double count transmission interconnection costs, regional cost multipliers, and other factors that are already included in both the IPM and the Wind Vision cost numbers

. Finally, the Alte rnative Renewable Energy Approach and the NOD A Renewable Energy Approach do not include estimates of offshore wind generation that is likely to be deployed. While offshore wind is relatively new to the United States, it is well established globally with a market that added over 1,700 MW in 2013, bringing total installed capacity to 7,031 MW. 28 In the U.S., there are 4,900 MW of proposed offshore wind projects in advanced stages of planning, with some projects likely to begin construction in the near future

. 29

In its economic modeling, EPA should not impose a firm cap on the vi. percentage of variable renewable energy that can be deployed in a state or region, but rather should economically model the cost of renewable curtailment that could occur at extremely h igh renewable energy penetrations, or rely on such modeling that has alr eady been conducted by others . A number of technical studies by independent grid operators, utilities, and national laboratories have demonstrated the feasibility of wind penetrat ions of 40% and higher. For example, NREL’s Renewable Energy Futures found no reliability problems for a case in which

28 U.S. Department of Energy, Offshore Wind Market and Economic Analysis: 2014 Annual Market Assessment, Prepared by Navigant Consulting, DE

- EE0005360 (September 8, 2014), http://energy.gov/sites/prod/files/2014/09/f18/2014 percent20Navigant percent20Offshore percent20Wind percent20Market percent20 percent2 6 percent20Economic percent20Analysis.pdf. 29 U.S. Department of Energy, Offshore Wind Market and Economic Analysis: 2014 Annual Market Assessment, Prepared by Navigant Consulting, DE

- EE0005360 (September 8, 2014), http://energy.gov/sites/prod/files/2014/09/f18/2014%20Navigant%20Offshore%20Wind%20Market%20%2 6%20Economic%20Analysis.pdf.40 | P a g e

wind and solar provide nearly 50% of total electricity. 30 The Nebraska Power Association wind integration study found minimal integratio n costs and no reliability concerns associated with wind providing 40% of electricity in the Southwest Power Pool. 31 The Minnesota Department of Commerce just released a comprehensive study that found no challenges to integrating 40% wind and solar energy in Minnesota, including a detailed examination of power system dynamics and other essential reliability services. The study also found no challenges for accommodating the variability associated with wind and solar providing 50% of electricity in the state , though due to time constraints the study did not include a full analysis of power system dynamics in that case. 32 NREL’s analysis of 30+% renewable energy penetrations in the Eastern and Western U.S. also found no reliability problems or economic barrier s. 33 PJM, the grid operator in the Mid

- Atlantic region issued a report in March 2014 that found “no insurmountable operating issues” to integrating up to 30% wind and solar energy, with each of the scenarios resulting in lower fuel and O&M costs. 34 If EPA does decide to impose such a cap, non

- variable renewables, such as biomass and geothermal, should not count towards it

. As explained later in our comments, the cost associated with integrating variable renewable energy onto the grid is typically lower than or comparable to the cost of integrating conventional resources. Even at 40% wind penetration across SPP, the Nebraska wind integration study found wind’s total integration cost to be around $2/MWh of wind energy. For comparison, the cost of accommo dating conventional generator forced outages on a real U.S.

30 http://www.nrel.gov/analysis/re_futures/

. 31 Available at http://www.nepower.org/Wind_Study/final_report.pdf

. 32 Available at https://www.edockets.state.mn.us/EFiling/edockets/searchDocuments.do?method=show Poup&documentId=%7bD6 07FB96

- F80C

- 49EE

- A719

- 39C411D5D7C3%7d&documentTitle=201411

- 104466

- 01

. 33 Available at http://www.nrel.gov/docs/fy11osti/47078.pdf , http://www.nrel.gov/electricity/transmission/western_wind.html

. 34 Available at: http://www.pjm.com/committees

- and

- groups/task

- forces/irt f/pris.aspx

.41 | P a g e

power system was calculated to be $2 per MWh of all load served on that power system. 35 Data from the ERCOT grid operator confirm that wind’s integration cost is significantly lower than
that of c onventional generators’ integration cost, on both a per

- MWh of generation basis and a total basis. 36 Changes to the generation mix , changes in fuel prices, and other power

vii. system changes that are expected to occur between now and 2030 should also be include d in the analysis of the economics and reliability of higher renewable penetrations. Expected increases in fuel prices, such as those forecast in DOE’s Annual Energy Outlook, should also be accounted for in EPA’s analysis of the economics of renewable energy additions. Th e expected retirement of large amounts of inflexible generation and the addition of new flexible resources, such as new gas generation, demand response, and energy efficiency, should also be accounted for as it can facilitate the inte gration of increased amounts of renewa ble generation These and other expected changes should be included in EPA’s analysis of the economic and reliability feasibility of higher levels of renewable generation , as EPA is attempting to determine how renewable energy will be integrated into the future power system, not the power system of today. It would be unreasonable for EPA to estimate future renewable energy deployment patterns through the year 2030 based on the generation mix and power system that existe d in 2012. EPA’s modeling approach should also account for the changes to the generation and capacity mix that are likely to be caused by the Clean Power Plan itself

. EPA should also include an iterative modeling approach that includes the impact of inc reased renewable

35 Available at http://www.consultkirby.com/files/Tm2003

- 152_Allocate_Res_Reg_Cost.pdf

. 36 Available at http://aweablog.org/blog/post/fact

- check

- winds

- integration

- costs

- are - lower

- than

- those

- for

- other

energy - sources , http://variablegen.org/wp

- content/uploads/2012/12/Maggio

Reserve_Cal culation_Methodology_Discussion.pdf

.42 | P a g e

generation on decisions about generator additions, retirement s, commitment, and dispatch. This should even include accounting for how increased renewable generation may encourage more generators to take planned outages during periods of h igh renewable generation . If such analysis is beyond the scope of IPM’s capabilities, EPA should rely on the results of similar analysis described above that has been conducted by DOE, NREL, and grid operators, and use those results as inputs into EPA’s m odeling. Given that enhanced inter

- regional grid operating coordination and other reforms can be and are likely to be implemented by 2020, and are likely to be even more extensively implemented by 2030, these reforms should also be assumed in analyzing the economics and reliability of higher renewable penetrations. For example, many ISOs are moving towards faster and more coordinated generation and transmission scheduling with their neighbors, 37 while in the

non - RTO Western U.S. the use of Energy Imbala nce Markets 38 or comparable regional markets 39

are making the power system more flexible and helping to facilitate very high penetrations of renewable energy. These reforms include fast (5

- minute interval) generator dispatch and the setting of generation sc hedules at 10 minutes or less before the operating hour in areas of the country that currently use hourly generator dispatch, to account for the fact that these regions are moving towards these more efficient operating procedures.

Because many planned tr ansmission lines will have been placed in service viii. by 2020 , and others will occur during the compliance period , they should also be included in EPA’s analysis .

37 Available at http://www.pjm.com/~/media/about

- pjm/newsroom/2014

- releases/20141105

- nyiso

- and

- pjm

implement

- cts.ashx

. 38 Available at http://www.caiso.com/informed/pages/stakeholderprocesses/energyimbalancemarket.aspx

. 39 SNL Energy, November 03, 2014, “ Northwest Power Pool moving full speed toward 5

- minute energy market decision .”43 | P a g e

The impact of future transmission additions could be modeled by at least assuming that the r ate of transmission build over the last several years persists . A better option would be to use the projections made in reports such as NERC’s Long

- Term Reliability Assessment , 40 which found transmission additions during the next 10 years are expected to i nclude 7,400 circuit miles of lines currently under construction, 20,622 circuit miles of planned lines, and 7,360 miles of conceptual lines ; the Department of Energy’s National Electric Transmission Congestion Study , to be finalized in 2015 ; 41 and the Edis on Electric Institute’s (EEI) Transmission Projects: At a Glance , 42 which found EEI’s members ( investor

- owned utilities ) alone plan to spend $60 billion on new transmission infrastructure over the next ten years

. The assumption of an increased transmission build rate beyond that rate could also be justified, as the Clean Power Plan is likely to drive the construction of many new transmission lines , due in part to the fact that the Federal Energy Regulatory Commission’s (FERC) Order No. 1000 requires that in traregional and interregional transmission planning and cost allocation consider public policy requirements , such as the Clean Power Plan. Unfortunately, the IPM documentation appears to indicate that new transmission construction is not factored into the IPM model runs, noting that “[d] ue to uncertainty surrounding the building of new transmission lines in the U.S., EPA Base Case v5.13 does not exercise IPM’s capability to model the building of new transmission lines.” 43 It is unreasonable for EPA to e stimate future renewable energy deployment patterns through the year 2030 based on the transmission system that existed in 2012. If new transmission build is allowed in the IPM

40 Available at http://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/2014LTRA_ERATTA.pdf , page 31. 41 Available at http://www.energy.gov/oe/downloads/national

- electric

- transmission

- congestion

- st udy

- draft

- public

comment

- august

- 2014. 42 Available at http://www.eei.org/issuesandpolicy/transmission/Pages/transmissionprojectsat.aspx

. 43 Available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_2.pdf , page 10.44 | P a g e

modeling , the assumed cost of building new transmission should be validated ag ainst recent transmission cost data

.

Regarding EPA’s question about how regions should be drawn for ix. purposes of establishing the reg ions used for setting the NODA R egionalized Renewable Energy Approach , we offer the following guidance to ensure the region s are consistent with important policy, economic, and technical boundaries. With the following exceptions, AWEA generally supports using the regions from EPA’s June 2014 proposal. 44 For the most part, we think that grouping of states reflects the mann er in which they are currently involved in interstate renewable exchanges and are likely to be so in the future. However, we believe adjustments to the regions, or allowances for renewable energy resources to serve another region , are necessary to maintai n consistency wi th existing RPS requirements and accurately represent current renewable energy exchanges.

a. Illinois, or at least the renewable resources it has access to, should be counted as available to the PJM states (the “East Central” region in the gro uping included in EPA’s June 2 release) for purposes of setting the building block 3 standard under the regionalized NODA approach . Given that the northern Illinois utility Commonwealth Edison’s service territory is in PJM, and that this service terri tory accounts for around half of the total wind generation in PJM, this change is essential to accurately represent which renewable resources are available to which regions. This change is critical as many existing state RPS policies in the PJM states all ow renewable energy delivered to anywhere in PJM’s footprint to count for purposes of RPS compliance. Because many states may choose to comply with Section 111(d) by simply using or increasing their existing RPS requirements while maintaining existing RPS rules for renewable eligibility and deliverability, the BSER should reflect the reality of those existing RPS

44 79 Fed. Reg. 34866

- 34867

.45 | P a g e

provisions. Moreover, renewable resource areas in reasonable proximity to the PJM footprint should be counted towards the economic resource avai lable to PJM states, reflecting the reality that renewable developers have frequently chosen to use generator tie lines and grid upgrades of dozens or even hundreds of miles to access desirable markets, including PJM ’s RPS markets.
T he map below shows , f

or example, that the PJM interconnection queue contains many proposed wind projects extending well into central Illinois. 45 These projects have applied for interconnection to the PJM power system, and therefore their output would be eligible for meeting RP S requirements in many PJM states. The PJM interconnection queue includes 2,569 MW of proposed wind projects in Illinois, a sizeable share of the PJM

- wide total queue of 12,074 MW of proposed wind projects. In contrast, the MISO interconnection queue for Illinois contains 2,276.5 MW of proposed wind generation. 46 There are also 2,651 MW of operating wind projects in the PJM portion of Illinois, nearly half of PJM’s installed wind capacity, and another 1,075 MW of wind projects that are under construction in the PJM portion of Illinois.

45 Available at http://www.pjm.com/renewables/default.html http://www.pjm.com/renewables/default.html , as of 11/20/2014. 46 Available at https://www.misoenergy.org/Planning/GeneratorInterconnection/Pages/InterconnectionQueue.aspx https://www.misoenergy.org/Planning/GeneratorInterconnection/Pages/InterconnectionQueue.aspx , as of 11/24/2014.46 | P a g e

Moreover, the geographic boundaries of the ComEd region in IPM’s modeling should be validated against the actual PJM footprint map, which appears to show a significantly larger

area. 47
b. Some or all of the renewable resourc es in Indiana and Michigan should also be counted as available to PJM states (EPA’s East Central region) for purposes of setting the building block 3 standard under the NODA Regionalized Renewable Energy A pproach , reflecting that a significant share of the wind resources in those states are located within or near the PJM footprint.
As also indicated in the map above, a large number of proposed wind projects in Indiana, and several in southern Michigan, have applied for interconnection to the PJM power system. Indiana currently has 3,709 MW of proposed wind projects in the PJM interconnection queue, nearly a third of the PJM

- wide total of 12,074. In contrast, the MISO queue for Indiana only contains 1 , 018 .6 MW of proposed wind projects. The PJM portio n of Indiana has 1,902 MW of wind projects in service, with an additional 500 MW under construction. The load/generation of Indiana and Michigan, or at least the vast majority of it, should remain in MISO to reflect that the vast majority of the load/gene ration in those states is in the MISO footprint.

c. North Carolina, or at least the load/generation that is in the PJM footprint and the renewable resources that are in and near the PJM footprint, should also be counted as being in PJM (EPA’s East Central reg ion). As indicated in the map above, there is significant renewable development planned for the PJM portion of North Carolina, and output from these resources would be eligible for compliance with RPS requirements in many PJM states. The proposed win d projects in the PJM

47 Available at htt p://www.pjm.com/~/media/about

- pjm/pjm

- zones.ashx ; in comparison, see, a vailable at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_3.pdf , page 2.47 | P a g e

interconnection queue for North Carolina total 974 MW, an important share of the total of 12,074 MW of wind projects in the PJM interconnection queue.

d. Kentucky’s load/generation and renewable resources should be grouped with MISO (EPA ’s North Central region). In the alternative, Kentucky’s load/generation could be pro

- rata apportioned, with the load/generation for the portion of Kentucky in the MISO footprint allocated to th e North Central region and the load/generation in the PJM footprint allocated to th e East Central region. It should be relatively easy to adjust, on a load

- or generation

- weighted basis, the share of a state ’s load or generation that falls in each region for purposes of setting the renewable energy component of the building block 3 targets

.

e. The adequately demonstrated ability of Southeastern utilities to import wind energy generation from MISO and SPP should be accounted for in the regional or state calculations of economically available renewable energy resour ces. This could be accomplished by grouping at least some Southeast ern states in with MISO (North Central) or SPP (South Central), or making some share of the economically viable renewable energy resources in MISO and SPP available for meeting the Secti on 111(d) compliance needs of the Southeast. This would accurately reflect the fact that Southern Company 48 and TVA 49 are purchasing large amounts of wind energy, with physi cal delivery, from SPP and MISO. EPA should look at existing and new transmission i nto the Southeast and give at least some of those states a target that incorporates transmission

- delivered renewable
energy.

48 http://www.alabamapower.com/environment/news/chisholm

- view

- project

- provides

- low

- cost

- power.asp , http://www.utilitydive.com/news/regulators

- approve - georgia

- powers - 25 0

- mw - wind

- buy/265766/ 49 http://www.tva.com/power/wind_purchases.htm48 | P a g e

It is also important for EPA ’s modeling to include the opportunity for new high

- voltage direct current ( HVDC ) transmission lin es, which have different cost and performance characteristics than AC transmission

. This includes the capabilities of DC transmission voltage source converters to provide a variety of ancillary services, including rapid adjustments to real power output, a llowing variability to be exported to the receiving region. The ability to use HVDC to provide capacity and reserve sharing should also be accounted for. A number of studies have identified how HVDC transmission lines can play an important role in achievi ng cost

- effective reductions of carbon emissions by allowing delivery of low

- cost renewable energy. The Department of Energy

- funded Eastern Interconnectio n Planning Collaborative (EIPC ) studied transmission needs under various scenarios, including a low c arbon scenario which had a carbon emissions reduction goal just 12% higher than the rule proposed by EPA under Section 111(d). 50 T he low

- carbon scenario deployed significant wind generation capacity in the MISO and SPP regions, and found six interregional HVDC lines, each capable of carrying 3,500 MW, to be an optimal solution to alleviate all transmission system constraints and achieve the required emissions reductions

. 51 Because m any of these HVDC lines cross the boundaries of the regions delineated in EP A’s June 2014 proposal , some economic potential for inter

- regional transfer using new HVDC lines should be accounted for in setting state targets under building block 3. Several new inter

- regional HVDC transmission lines, similar in capacity and rationale to those found in EIPC results, are well under development and expected to be in service by 2018. EPA should include these new HVDC projects in its IPM modeling by add ing the expected

50 http://www.eipconline.com/Phase_II_Documents.html 51 U.S. DOE, Phase 2 Report: Interregional Transmission Development and Analysis for Three Stakeholder Selected Scenarios, Draft

- Decemb er 22, 2012. 21. www.eipconline.com/uploads/20130103_Phase2Report_Part2_Final.pdf49 | P a g e

incremental transmission capacity between the US Model Regions in EPA Base Case v.5.13 52 as listed below. Because IPM uses wheeling charges to represent a real

- time cost in order to determine the optimal path for energy transfer , the wheeling charge would be zero for these lines as the wind generation would be directly conne cted to these lines and would not have another path for delivery.

From To 2018 Incremental “Energy” with Project (MW) New or Existing Path in

IPM transmission assumptions SPP_SPS S_C_TVA 3,500 New SPP_SPS S_D_N_AR 500 New SPP_N PJM_West 3,500 New SPP_N MIS_MO 500 Existing MIS_IA PJM_COMD 3,500 Existing WECC_WY WECC_SNV 3,000 New

The reserve margin contribution of wind energy in ERCOT in EPA’s x. IPM modeling should be updated to account for updates ERCOT has made to its reserve calculation based on new data. ERCOT has recently updated its wind reserve margin contribution from 8.7% for all wind generation to a summer value of 12% for non

- coastal wind resources, a winter value of 19% for

non - coastal wind resources, a summer value of 56% for coastal ( land

- based but near the coast) wind resources, and a winter value of 36% for coastal resources. 53

52 EPA. Power Sector Modeling. Chapter 3, Table 3

- 4 Annual Transmission Capabilities of U.S. Model Regions in EPA Base Case v.5.13. http://www.epa.gov/powersectormodeling/docs/v513/Chapter_3.pdf

. 53 Documentation of this change is available at http://www.ercot.com/content/mktrules/issues/nprr/601

- 625/611/keydocs/611NPRR

- 09%20Board%20Report%20101414.doc , http://www.ercot.com/content/gridinfo/resource/2014/windsolar/CDR_PeakAveWindCapacityPercentages_11

- 03

- 2014.xls , http://www.ercot.com/content/gridinfo/resource/2014/adequacy/cdr/CapacityDemandandReserveReport

May2014.pdf50 | P a g e In response to EPA’s question in the NODA, once the regional renewable xi. MWh total is calculated, this should be pro
- rata allocated to states based on the amoun t of total generation in each state. This approach, rather than a load

- based allocation, is better

- aligned with the EGU

focused way in which 111d regulates emissions. This approach will also better ensure that a state’s renewable target is aligned wi th the total quantity of generation in that state.

Regarding EPA’s question in the NODA about how to treat a s tate in xii. which the incremental renewable energy and energy efficiency exceeds historical fossil steam generation levels, EPA should credit this ex cess renewable energy based on the regional steam fossil emissions rate.
Th e regional average fossil steam generator emissions rate will accurately reflect the amount of emissions savings that would be produced by adding renewable energy, given how

re newable resources displace fossil generation resources throughout the region due to the interconnected nature of the power system. If all regional steam fossil generation is exhausted, renewable generation should be credited at the region’s natural gas co mbined cycle (NGCC) emissions rate. EPA should include load growth when economically modeling renewable

xiii. energy growth and examining the reliability of higher renewable penetrations. Load growth is a critically important factor that drives generation e xpansion decisions, yet it was not accounted for in EPA’s proposed method for setting the renewable e nergy component of building block 3. If EPA moves to a technical and eco nomic approach for setting the renewable e nergy target, as outlined here, EPA shou ld make sure to include load growth in its economic modeling. This will ensure that the modeling of expanded renewable generation more accurately reflects the power system that will exist when the renewable generation is added , in51 | P a g e

addition to taking fuel price changes, generator additions and retirements, transmission upgrades, grid operating reforms, and other power changes into account, as outlined above

.

If EPA decides to use a method in which the resource potential xiv. calculation is based to some extent o n existing renewable energy generation, EPA should allocate existing renewable genera tion to states by looking at power purchase a greements for that generation, not the geographic location of the renewable generation. This change would better reflect where and how existing renewable energy is being used. AWEA has compiled data from FERC Form 920 and other sources quantifying such interstate PPAs, and can make this information available to EPA upon request. PPAs where the wind purchaser is located in a different state than where the wind generation is physically located account for nearly 13,000 MW, or more than 20% of currently installed wind capacity. As a result, accounting for existing r enewable generation based on wind’s geographic location rathe r than where it is being purchased provides a distorted picture of where it is being used today.

As outlined in the NODA, EPA should adjust the goal
- setting formula for xv. calculating building block three to reflect the reduced emissions from affected EGUs fr om displacement by renewable energy.52 | P a g e

I n setting the building block 2 requirement , the Clean Power Plan treats the increased utilization of lower

- emitting existing NGCC differently from how it treats increased generation from other low

- and zero

- carbon s ources and from energy savings under building blocks 3 and 4. Building block 2 is calculated by explicitly re

- dispatching certain fossil fuel

- fired EGUs to NGCC. Consistent with how increased utilization of NGCC would occur in the electric system, the ap plication of this block involves incorporating the MWhs of NGCC generation in the denominator and the associated emissions in the numerator of each state’s emission rate calculation and removing the MWhs and emissions of the coal

- and oil

- fired generation the NGCC is presumed to replace. This fully captures the impact that increased utilization of NGCC will have on a state’s emission rate. Despite the fact that building block 3 similarly involves expanded use of generation with carbon intensity that is l ower than the state’s average, the Clean Power Plan treats the expanded use of renewable energy differently. As proposed, the plan evaluates the impact of building block 3 on each state’s carbon intensity only by adding MWhs of expected renewable and
nucl ear generation to the denominator of the state’s 2012 adjusted rate. The calculation of the impact of increa sed generation under building block 3 does not reflect the displacement of emissions and generation from affected EGUs that would result. Consiste nt with EPA’s own description, the final Clean Power Plan should treat generation from renewable energy and existing NGCC in the same way. In calculating the impacts of building block 3 on the state emission rate goals, EPA should be consistent with the a pproach in building block 2 . Emissions associated with affected EGUs should be removed from each state’s carbon emissions numerator. Affected EGU MWhs should be removed from the denominator and the equivalent number of MWhs should be added back based on low

- and zero

- carbon generation from building block 3

.53 | P a g e

The NODA addresses the issue discussed above regarding the calculation of state

‐ specific carbon reduction goals. Specifically, it a cknowledges the concerns of some stakeholders that the formula for calculating each state's goal are not consistent across different resources between building blocks 2 and 3, and proposes to make the bu ilding block 3 calculation consistent with the building block 2 calculation

. AWEA thinks that the proposal in the NODA is the correct approach , as it would correctly remove from each state’s carbon intensity numerator emission reductions from the reduc tion in fossil generation when renewables and energy efficiency increase. That is, affected EGU MWhs should be removed from the denominator and the equivalent number of MWhs should be added back based on low

- and zero

- carbon generation from block three, a nd emissions associated with affected EGUs should be removed from each state’s carbon intensity numerator. This approach would also be consistent with the approach in block two for calculating the impacts of block three on the state emission rate goals.
In the NODA , EPA also requests comment on two different approaches for calculating emissions goals. The first would assume that renewables and energy efficiency would replace fossil fuel power plants on a pro

- rata basis, adjusting the level of assumed fossil generation downward as the other resources increase in output. The second proposal is similar to the first, but instead of assuming that renewables and energy efficiency would replace all fossil generation, it would prioritize replacing dirtier fos sil steam generation first. Renewable energy and energy should be used to remove emissions from the highest emitting resources first. This is consistent with how renewable energy would be used under a best system of emissions reductions, as displacing the highest

- emitting resources first would be the most cost

- effective option for achieving the maximum emissions reductions. Said another54 | P a g e

way, if carbon cost were accounted for in generation dispatch decisions, as it may be in some regions as part of imp lementation of building block 2 , most gas units would be dispatched lower on the supply curve than many coal units, putting coal units onto the margin where they will be displaced by wind generation.

T he ERCOT IPM region incorrectly does not appear to incl ude wind xvi. r esources in the Texas Panhandle . EPA should ensure that a large share if not all of the Texas Panhandle wind resources are available to the ERCOT IPM zone, 54 in addition to being available to SPP West, to properly reflect that both RTOs have t ransmission facilities that allow significant deliverability of wind generation from the Texas Panhandle. 55 If EPA is absolutely unable to model both regions having access to those wind resources, EPA should either split the Texas Panhandle wind

resource s between the two regions or allocate them all to ERCOT, reflecting that with the completion of the CREZ lines ERCOT now has larger deliverability of those wind resources than
SPP. EPA should review the wheeling charges described in Table 3.4 on pages

xvii. 6
- 12 of Chapter 3 of the IPM documentation , as many appear to be higher than current and future wheeling charges.
Many of the assumed wheeling charges appear to be quite high relative to current wheeling charges. 56 Moreover, EPA should account for the f act that these charges are likely to significantly decrease in the future as inter

- regional coordination on grid operations improve and

54 See map on page 2 here: http://www.epa.gov/powersectormodeling/docs/v513/C hapter_3.pdf 55 Available at http://awea.files.cms

plus.com/FileDownloads/pdfs/3Q2014%20AWEA%20Market%20Report%20Public%20Version.pdf , http://www.ercot.com/content/committees/board/keydocs/2014/ERCOT_Monthly_Operational_Overview_201410.p df

. 56 Available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_3.pdf , see the right

- most column entitled “ Transmission Tariff (2011 mills/kWh) .”55 | P a g e

new transmission infrastructure is completed. The following charges appear to be particularly high relative to current wheeling costs:

1. The $6/MWh wheeling charge between both MIS_MAPP and MAP_WAUE and other parts of MISO. The vast majority of these two areas , and the vast majority of the wind resources that have been or are under development in those areas , are in the MIS O footprint and therefore are not subject to any wheeling charges. The extent to which the ongoing integration of some of WAPA’s Balancing Authorities into SPP will reduce wheeling charges and improve transfer limits into with SPP should also be evaluated and incorporated into the IPM modeling assumptions. 2. $8/MWh between LADWP ( WEC_LADW) and the Imperial Irrigation District ( WECC_IID) , and another $8/MWh between these two areas and Southern California Edison (WECC_SCE) and San Diego Gas and Electric ( WEC _SDGE)

. Combined with the $8/MWh wheeling charge from WECC_AZ to WECC_IID, a total pancaked wheeling charge of $16/MWh could exist for paths moving electricity across the Imperial Irrigation District between Arizona and San Diego Gas and Electric , which a ppears to be excessive relative to current practice

. 3. T he assumed $8/MWh wheeling charges among most Western states are very high relative to reality. 57 For example, the WECC_WY

- WECC_UT wheeling charge of $8/MWh should be $0/MWh to reflect that most of bo th areas are within the footprint of PacifiCorp. The same is true for the $8/MWh wheeling charge between WECC_NNV and WECC_PNW, and the charge between WECC_SNV and WECC_UT, as a large share of all of those areas fall within service territories that are no w owned by Pacifi Corp 4. Also of concern are the total pancaked rates of $14/MWh for two wheeling charges moving electricity across S_D_REST between SPP and the TVA ( S_C_TVA) and Southern Company ( S_SOU) IPM regions. These costs seem higher than those that are imposed on existing transactions of wind generation between those regions.
5. EPA should account for how the $3/MWh wheeling charge across the MISO

- PJM seam, and among the other RTOs, will be reduced due to increased inter

- regional coordination in trans mission scheduling over time. EPA should check the regional transfer limits listed in Table 3.4 on pages xviii. 6
- 12 of Chapter 3 of the IPM documentation to verify that the MW transfer limits are an accurate reflection of current reality .

57 A notable exception of a wheeling charge that is co rrectly represented is the Colstrip tie from MT to the PNW , which is correctly represented as $0/MWh.56 | P a g e

EPA should check the regional transfer limits listed in Table 3.4 on pages 6

- 12 of Chapter 3 of the IPM documentation to verify that the MW transfer limits are an accurate reflection of current reality, as well as the increased transfer limits that will be enabled by new t ransmission, as many appear to be lower than indicated in documentation provided by regional reliability entities. For many of the ties in the Western Interconnection, documentation of current transfer limits can be obtained from the WECC Path Rating Cata log. 58 This document indicates that most ties in the Western Interconnection have a significantly higher transfer capability than is assumed in the IPM modeling. Another resource is the Grid Tracker Tool assembled by the Western Interstate Energy Board us ing publicly available transfer capacity information. 59 We were unable to find access to a similar comprehensive listing of current transfer limits for the Eastern Interconnection and ERCOT, though based on the number and magnitude of concerns identified
i n WECC we suspect that there are similar inaccuracies in those lists as well.
As example s outside of WECC , the assumed 10,555 MW transfer limit between ERC_WEST and ERC_REST appears to not include the transfer capacity expansion enabled with the CREZ l ines, as the CREZ lines were supposed to increase the transfer limit to 18,456
MW. 60 In New England, the assumed transfer limit from Maine to the rest of New England ( NENG_ME to NENG

_ REST ) is listed at 1600 MW for capacity and energy. That is the current
l imit, but this is increasing to 1, 900 in 2015. Similarly, the transfer limit from NENG

_ REST to NENG_CT (Connecticut) is listed at 2600 MW , while t he N

- 1 limit is 3050 MW today

. 61

58 WECC Path Rating Catalog 2013. 59 Available at http://www.wiebgridtracker.com/

. 60 Available at http://pbadupws.nrc.gov/docs/ML0914/ML091420467.pdf , page 3. 61 Available at http://www.iso

- ne.c om/static

- assets/documents/2014/11/rsp14_110614_final_read_only.docx , page 64.57 | P a g e

EPA should ensure that other recently completed or under construction trans mission upgrades, such as the Tehachapi Project in Southern California, the Maine Power Reliability Program, some Bonneville Power Administration (BPA) Open Season upgrades, the CapX lines in Minnesota and neighboring states, the Colorado

- Wyoming Intertie, and many others, are also accounted for. Transmission lines that have had their cost allocation approved and will almost certainly be proceeding to construction, such as the MISO Multi

- Value Projects, the SPP Priority Projects, the Colstrip Upgrade Proje ct, and other BPA Open Season lines, should also be included. Finally, as described above, EPA should account for transmission expansions that are expected to be completed by or during the compliance time period of 2020

- 2030.
Our non

- exhaustive list o f discrepancies between the WECC Path Rating Catalog and the IPM assumptions table follows, listed in the order used in the WECC catalog:

1. The WECC_PNW (Pacific Northwest) to CN_BC (British Columbia) tie is listed at only 1,000 MW in the IPM assumptions, w hile the WECC rating catalog lists it at 3,000 MW. 2. The WECC_ID to WECC_PNW tie is listed at 1,800 MW in IPM, while the WECC rating catalog lists two components of it as West of Hatwai at 4,277 MW and Idaho to Northwest as 2,400 MW. 3. The WECC_MT to WECC_PN W is listed as 2,000 MW, slightly less than the 2,200 MW listed in the WECC catalog. 4. The WECC_ID to WECC_NNV (Northern Nevada) is listed as 350 MW in IPM, while the WECC catalog lists it as 500 MW.
5. The WECC_WY to WECC_ID ties is listed as 2,200 MW, while the WECC catalog lists it as 2,400 MW, though the WECC catalog contains a nomogram that acknowledges the rating can be somewhat lower depending on flows on “Path C Northbound.”
6. The WECC_UT to WECC_ID is listed at 775 MW, while the reverse is listed at 68 0 MW in IPM. The WECC catalog lists those (Path C, pre

- Gateway) as 1,250 MW and 1,600 MW respectively. That rating should increase as PacifiCorp’s Gateway South and Gateway West projects come into service.58 | P a g e 7. WECC_NNV to WECC_CALN is listed as 100 MW, the WECC catalog lists Sierra to PG&E at 150 MW. 8. WECC_UT to WECC_LADWP is listed at 1,920 MW, but the WECC catalog lists it (Intermountain) as 2,400 MW. 9. WECC_UT to WECC_NNV is listed at 360 MW, but the WECC catalog lists it as 440. 10. WECC_CO to WECC_UT is lis ted at 650 MW, but the WECC catalog lists it (Bonanza West) as 735 MW to 785 MW, and the TOT2B1 path adds another 600 MW of bi

- directional capacity. 11. WECC_SNV to WECC_UT is listed as 250 MW and the reverse as 140 MW, but the WECC catalog lists the transfer limits as 580 MW and 400 MW respectively. 12. WECC_SNV to WECC_LADW and WECC_SCE are listed as 2,300 MW and 1,700 MW respectively, while the WECC rating catalog lists them (under West of Colorado River) as 2,592 MW and 2,509 MW respectively. 13. The WECC_AZ to WECC_SCE and WECC_AZ to WECC_LADW transfer limits are listed as 1,600 MW and 362 MW respectively, while the West of Colorado listing in the WECC rating catalog puts them at 1,934 MW and 468 MW respectively. 14. The WECC_PNW to WECC_ID is listed as 500 MW in t he IPM assumptions, while the WECC catalog rates the “Brownlee East” lines, a subset of the lines running from Oregon to Idaho, at 1,915 MW. The other set of lines between Oregon and Idaho, the Hemingway

- Summer Lake lines, are rated at 550 MW from Oregon to Idaho. The “TotBeast” tie, which encompasses both, is listed at 2,465 MW in the WECC catalog. 15. The WECC_ID to WECC_PNW is listed at 1,800 MW, but the Hemingway

Summer Lake line alone has 1,500 MW of transfer capacity from Idaho to Oregon, and the Brown lee East adds further transfer capacity that is not defined in the WECC catalog. 16. The WECC_PNW to WECC_LADW transfer limit is listed as 2,600 MW in IPM, with no other deliveries to Southern California utilities listed, while the WECC catalog rates the Paci

fic DC Intertie at 3,100 MW, with 40% to LADWP, 50% to SCE, and the remainder to Southern California municipal utilities. 17. The WECC_PNW to WECC_CALN (Northern California) limit is listed at 4,200 MW in the IPM assumptions, while the WECC catalog puts it at 4,800 MW.59 | P a g e 18. The WECC_UT to WECC_AZ tie, and the reverse, are listed as 250 MW. The WECC catalog lists the UT to AZ tie at 265 MW and the reverse at 300 MW. 19. The WECC_MT to WECC_WY is listed as 400 MW and the reverse 200 MW in IPM, while the WECC catalog li sts Southeast Montana tie as up to 600 MW in both directions, though acknowledges it can be lower depending on generation and load. IPM’s assumption of 2.8% inter
- regional transmission losses is much xix. higher than reality. The EIA data that the IPM docu mentation 62 references as support for the 2.8% figure appears to include lower

- voltage distribution system losses, which account for the vast majority of total power system losses and should not be included in calculating the transmission losses between reg ions. In contrast, PJM’s data are based only on losses on the high

- voltage transmission system, which are significantly less than 1% of total generation on average. This figure is consistent with other reports of transmission

- system losses. Because inte r - regional power transfers will typically occur on high

- voltage transmission lines, this is a more appropriate loss factor for this calculation. I f possible, IPM’s modeling of transmission losses should also be indexed for transmission line loading level and for winter and summer periods, to account for the fact that losses tend to be higher when transmission lines are heavily loaded and when ambient temperatures are higher.

IPM’s modeling assumption of “ perfect foresight ” biases generation xx. investment deci sions against stably
- priced renewable energy. IPM’s modeling assumption 63 of perfect foresight biases generation investment decisions against stably

- priced renewable energy, as it fails to account for the uncertainty associated with

62 “The EPA Base Case 5.13 assumes a 2.8 percent inter

- regional transmission loss of energy transferred. This is based on the average loss factor for the transmission grid calcu lated from the U.S Energy Information Administration (EIA) State Ele ctricity Profiles 2010 report.” Page 14 available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_ 3.pdf

. 63 “ IPM’s assumption of perfect foresight implies that agents know precisely the nature and timing of conditions60 | P a g e

other energy sources , particularly fuel prices. In particular, fossil generation faces significant uncertainty about future fuel prices, as well as uncertainty about pending and future environmental regulations. Many utilities and state regulators have publicly noted wind e nergy’s value for reducing fuel price risk in explaining their reasons for investing in wind energy. 64 A risk

- averse decision

- maker assign s a real financial cost to the fuel price volatility risk associated with fueled generation sources, while non

- fueled resources like renewable energy would correspondingly be viewed as having greater value , as they are not subject to those risks. By analyzing how natural gas forward price contracts tra de at a premium relative to gas price forecasts, Lawrence Berkeley National Laboratory researchers were able to use this market price signal to quantify the cost of gas fuel price risk. Their analysis quantified the gas price risk premium at “$0.4

- $0.8/MMBtu ($0.6/MMBtu on average) [in 2003 dollars] for terms ranging fro m 2

- 10 years. At an aggressive heat rate of 7,000 Btu/kWh, this “premium” translates into
0.3

- 0.6¢/kWh ( 0.4¢/kWh on average) [in 2003 dollars]. ” T hey concluded, “ [t] hus, utilities and others that have relied on EIA reference case gas price forecasts in re source a cquisition, modeling, and planning exercises over the past three years have likely produced results that are biased in favor of gas

- fired generation relative to fixed

- price renewabl e generation (again, presuming that long

- term price stability is an important consideration). ” 65 EPA should make a similar adjustment to the IPM resource cost calculations to appropriately account for the cost of fuel price risk and appropriately value wind generation’s lack of fuel price risk.

a. IPM underestimates the win d plant availabil ity factor .
in future years that affect the ultimate costs of decisions along the way. For example, under IPM there is complete foreknowledge of fu ture electricity demand, fuel supplies, and other variables (including regulatory requirements) that in reality are subject to uncertainty and limited foresight. ” Page 11 available at http://www.epa.gov/powersectormodeli ng/docs/v513/Chapter_2.pdf. 64 Availa ble at http://awea.files.cms

- plus.com/AWEA%20White%20Paper

- Consumer%20Benefits%20final.pdf

. 65 Available at http://emp.lbl.gov/sites/all/files/REPORT%20lbnl%20

- %2053587.pdf , pag e 60.61 | P a g e IPM assumes a wind plant availability factor of 95%, 66 though more recent data

indicate that current wind plant availability is significantly higher. A report by Sandia National Laboratory finds that a large sample of exis ting wind projects ha s an average availability factor of 97.6%. 67 Others report that the availability for newly installed turbines is even higher, and that improvements in availability are expected to continue. EPA should use this value to best account fo r the expected availability of turbines that will be added in the future. Moreover, when assessing the impact of the availability factor on wind plant generation, EPA should take into account that planned outages are typically scheduled for low wind perio ds to minimize the loss of generation and so that, if needed, cranes can be safely operated at the wind plant site.

b. EPA should verify that IPM ’s Turn Down/Area Protection Constraints properly account for the actual and future capabilities of conventional g enerators to cycle and pro vide power system flexibility . EPA should ensure that the IPM turn

- down limit assumptions 68 properly account for the evolving capabilities of conventional generators to cycle and provide power system flexibility. EPA should als o ensure that the modeling captures solutions, like transmission upgrades or the conversion of conventional generators to synchronous condensers, that can be used to meet Area Protection Constraints

. For the Turn

- Down L imit assumptions, n ew gas generator s are demonstrating significantly enhanced flexibility, and future gas generators are expected to continue this trend.

66 Available at http://www.epa.gov/powersectormodeling/docs/v513/Chapter_4.pdf ., page 29. Availability refers to the share of time a wind plant is available to produce pow er and not experiencing a forced or planned outage. 67 Available at http://energy.sandia.g ov/energy/renewable

- energy/wind

- power/materials

- reliability

standards/continuous

- reliability

- enhancement

- for

- wind

- crew - database/ , page 29. 68 “Turn Down/Area Protection Constraints: The model uses these constraints to take into account the cycling capabili ties of the units, i.e., whether or not they can be shut down at night or on weekends, or whether they must operate at all times, or at least at some minimum capacity level. These constraints ensure that the model reflects the distinct operating characteri stics of peaking, cycling, and base load units.”62 | P a g e

In addition, many coal generators demonstrated their ability to move to a more flexible operating profile during 2012 when gas prices we re anomalously low, causing some gas generators to be dispatched as baseload while coal generators were dispatched as mid

- merit cycling units. For the Area Protection Constraints, b ased on the demonstrated experience of successfully building transmissio n, adding Static VAR Compensators 69 (SVCs) , or converting existing conventional generators to synchronous condensers to provide local voltage support , allowing local reliability concerns to be met while allowing uneconomic generating resources to retire, 70 E PA should also ensure that the modeling captures solutions that can be used to meet Area Protection Constraints , including the conversion of conventional generators to synchronous condensers as well as transmission upgrades and the addition of devices such as SVCs

.

EPA should not use the Proposed RPS Approach, though if it does it xxi. should improve it using the following adjustments. To estimate the carbon emission reductions from affected EGUs achievable based on increases in renewable generation, EPA has developed a “best practices” scenario for renewable energy generation based upon RPS requirements already established by a majority of states. Because of the existing state framework and proven track record of existing RPS requirements, in the preamble to the Clean Power Plan, EPA states that it views RPSs as a reasonable foundation upon which to deve lop such a scenario. This methodology, however, represents a significant understatement of the renewable energy potential available to states for the redu ction of greenhouse gas emissions. For instance, seven states had more renewables in 2013 than EPA’s 2030 targets for those very states , and 17

69 Available at http://www.rtoinsider.com/atsi

- plants

- retire

- early

- 1402/

. 70 See the discussion of the conversion of Eastlake units to synchronous condensers on pages 5 and 7 at http://www.pjm.com/~/media/committees

- groups/committees/teac/20120614/20120614

- pjm

- board

- whitepaper.ashx , and at http://www.news

- herald.com/general

- news/20140527/fir stenergy

- in

- middle

- of

- converting

- eastlake

- power plant

- coal

- generating

- units

.63 | P a g e

states would develop less renewable generation under EPA’s target than under their existing mandatory RPSs

. Un der EPA’s proposed method, 25 states also would not reach the proposed regional target by 2030 . EPA’s approach effectively assumes that renewable generation grows at
0.65 percent of total electric sector market share per year, well below the recent market share growth rate of 1 percent per year

. 71 A s such, t he proposed approach’s renewables targets fail to meet the CAA standard for “best” system of emissions reductions.
AWEA believes that an approach that incorporates all renewable energy resources and
t akes into account established trends in market growth would provide a better basis for determining feasible renewable generation growth in each state as part of building block 3. However, t o the extent that EPA continues to rely on state policy as a proxy for evaluations of technical feasibi lity and cost

- effectiveness, AWEA urges EPA to modify the methodology to more accurately reflect those state determinations. To that end, if EPA selects the Proposed RPS Approach, AWEA recommends the following modifica tions :

The Proposed RPS Approach is flawed because state RPSs, which are xxii. policy commitments, are not necessarily based on the amount of cost
effective, achievable renewable energy within a given state’s or region’s borders. The Clean Power Plan assumes that state RPS programs are set based on an assessment of the costs and feasibility of target perc entages of renewable energy. Ho wever, the establishment of the BSER, including evaluations of cost and feasibility, is the responsibility of EPA and not the states. By resting the justification for the level of achievable renewable energy generation on the fact that “states have already had the opportunity to assess those requirements against a range of policy objectives includin g both feasibility and costs, ” 72 EPA’s Proposed RPS Approach does

71 Available at http://www.ucsusa.org/sites/default/files/attach/2014/10/Strengthening

- the

- EPA

- Clean

- Power

Plan.pdf

.64 | P a g e

not directly demonstrate that the Administrator has determined that building block 3 meets the standard for BSER, as Section 111(d) requires. The Proposed RPS Approach also finds that “renewable resource development pote ntial varies by region, and the RPS requirements developed by the states necessarily reflect consideration of the states’ own respective regional contexts.” 73 We agree that the recognition of regions to cost

- effectively support renewable generati on is an important insight that should be used in establishing the BSER. However, this conclusion does not mean that the responsibility to determine BSER for each region should be left to the political decisions reflected in some state policies , which may have bee n devel oped for purposes other than reducing carbon emission s at affected EGUs. 74 It is unlikely that s tate RPS were set based on the same criteria that EPA is required to use when determining BSER. Indeed, the political process is likely to result in pol icies that underestimate what is technically and cost

- effectively achieva ble

. In addition, RPS requirements developed by the states do not necessarily reflect consideration of regional achievability. For instance, many of the existing state RPSs do not
t ake into consideration renewable energy trading markets, achievability of regional emission reduction goals, and the full extent to which renewable generation may be implemented within a particular region. Further, by only examining the impact of one poli cy framework, the analysis is inherently conservative, as many other policy options are available in addition to RPS frameworks for EPA to establish best practices for renewable generation expansion.

72 Clean Power Plan at 34866

. 73 Id. at 34866. 74 Using EPA’s AVER T model, AWEA has calculated that in 2013, wind energy alone reduced emissions nationally by 127 million tons, or more than 5% of power sector emissions. Additional detail is included later in these comments. For more information, also see AWEA’s Clean A ir Benefits of Wind white paper available at: http://awea.files.cms

- plus.com/FileDownloads/pdfs/AWEA_Clean_Air_Benefits_WhitePaper%20Final.pdf

.65 | P a g e a. The Proposed RPS Approach only expects a state to meet a regional average rate of renewable energy generation, even if the state’s renewable generation already is above that average. If EPA retains the Proposed RPS Approach in the final rule, AWEA recommends that EPA not apply the regional growth factor to each state and instead assume that each state can meet the average of the existing RPSs in the region. Under EPA’s proposal, st ates with renewable generation below the regional targets make pre

- determined incremental annual progress; however, once a state reaches that goal, renewable generation remains flat through 2030. This produces an “average

- based” system that results in markedly slower growth in
renewable generation than is achievable to best reduce carbon emissions and is not consistent with statut ory mandate to create “ best practices. ” In addition, using the proposed regional approach to establish generation targets, EPA would effectively be giving some states renewable generation targets lower than the state’s actual reported generation amounts f or 2012. Under EPA ’s Proposed RPS Approach , a region’s annual growth factor is determined by using each state’s historic 2012 renewable generation level to calculate a new level of renewable generation for that state in 2017, the initial year for compl iance. This calculation is then repeated for each subsequent year from 2017 to 2029. If a state reaches a renewable energy generation level that equals or exceeds the regional renewable energy generation percentage target, its renewable generation target is made equal to the renewable percent generation target as applied to the state’s 2012 generation. This target is then kept at that level for the remainder of the time period. This methodology means that if a state’s renewable generation in 2012 has a lready exceeded the regional renewable target, its annual renewable generation levels are held to the regional target for the entirety of the compliance duration, 2017 to 2029. This would result in an66 | P a g e

unintended outcome whereby a number of states would n ot need to reduce carbon emissions below their 2012 levels under building block three , and the same regional renewable generation target in percentage (share of total generation) terms is imposed on all states in a given region. In addition, because of th e application of the regional growth factor to the 2012 renewable generation in a state, t he absolute megawatt

- hour target would be smaller for states starting with a lower amount of renewable generation , and larger for a state starting with a higher absol ute amount of renewable generation. As such, some states would effectively be rewarded for not pursuing cleaner energy portfolios before 201 2 . EPA ’s final rule should reflect a more equitable
solution.
b. The Proposed RPS Approach should use each state’s RPS goals as a floor for achievable renewable generation in that state, not for establishing a ceiling. The Proposed RPS Approach assumes that each state can generate a percentage of its 2012 electric generation consistent with the average of state RPS policies in that state’s region. As discussed above, h owever, if a state’s own RPS is more ambitious than its regional average, the regional average is nevertheless used. By failing to incorporate a state’s own RPS commitments in its BSER determination, EPA undermines its own justification for the Proposed
RPS Approach. This analytical error is particularly acute for the five states that already generate as much or more renewable electricity than their regionally calculated average for 2030. 75 For exam ple, Minnesota currently generates 18 percent of its electricity from renewable generation; however, the regional average RPS target is only 15 percent. Therefore, Minnesota’s goal is set on the assumption that sourcing only 15 percent of total generation from renewable energy is the best

75 Iowa, Maine, Minnesota, North Dakota, and South Dakota all currently have a higher renewable energy generation rate than is deemed achievable and cost effective by 2030 under the Proposed Approach.67 | P a g e

system of emission reduction. Perversely , such a state could increase affected EGU use as a proportion of generation

— and therefore emissions

— and still meet its BSER targets for renewable energy. EPA is taking comment o n whether the level of 2012 renewable energy generation in each state should serve as a floor for the amount of renewable energy generation expected for that state under building block 3 . AWEA strongly supports such a floor; however, to more accurately r eflect the level of renewable generation a state has actually achieved, we recommend that the floor be set at a state’s renewable energy generation when the Clean Power Plan is finalized in 2015. Further, the Clean Power Plan should determine that for sta tes with an RPS policy more ambitious than the regional average, the BSER should require that renewable energy targets are at least as high as the state RPS require ment . This approach is consistent with EPA’s general “no backsliding” policy approach.

c. The Proposed RPS Approach assumes no renewable energy growth between 2012 and 2017, even though deployment of these resources in the market is increasing rapidly.

Under the P roposed RPS A pproach, state level renewable energy targets begin in 2017 and conti nue to ramp up through 2030, even though compliance would not be required until
2020. For each state that has not yet met the regional average RPS target, the Clean Power Plan assumes that the state can increase its level of renewable generation consisten t with the rate it would take the region as a whole to meet the regional average RPS target. However, the methodology assumes the increase starts to occur only after 2017. To determine a state’s 2017 baseline generation levels, EPA takes 2012 renewable g eneration and assumes that as the starting point in 2017

. This approach inadequately assesses renewable potential as it assumes no growth in renewable generation from 2012 through 2017, even though significant renewable capacity68 | P a g e

that was not generating i n 2012 (including a large amount of renewable capacity added during 2012 that contributed less than a full year’s output to 2012 generation) has been installed, is currently under construction, or is under advanced stages of development and will be online by
2017. More specifically, w ind energy generation increased from 141.8 million MWh in 2012 to 167.7 million MWh in 2013. 76 Moreover, t here are currently 13,600 MW of new wind capacity under construction in the United States , which will significantly inc rease generation in the coming years. 77 T he Clean Power Plan should assume each state’s renewable energy generation is able to grow beginning in 2012 until it meets the regional target, rather than expecting zero growth from 2012 to 2017. In particular , if EPA adopts th e Proposed RPS approach , the growth factor assumption should be adjusted to reflect growth throughout those years . If this modification is not made , the best practices scenario for renewable energ y expansion will be based on an underestima tion of the growth factor used for each state in that region

. EPA should instead us e 2012 generation data as a base, and assum e an increase in each state’s level of performance prior to the 2017 scenario start year. There should be an established trend f rom 2012

- 2029 using data that yields an annual growth factor unique to each region and based upon each region’s current and target renewable generation levels. We also believe the Proposed RPS Approach should use a state’s renewable energy generation rat e at the time the Clean Power Plan is finalized as the starting point from which its renewable generation is expected to grow, rather than 2012. It is clearly technically feasible and
cost

- effective for a state to increase renewable energy generation from the amount of generation it has already produced beginning when the Clean Power Plan is finalized.

76 http://www.eia.gov/electricity/monthly/current_year/february2014.pdf 77 http://www.awea.org/3Q201469 | P a g e d. The Proposed RPS Approach should set the 2030 regional targets based on 2030 RPS targets. EPA uses 2020 RPS goals to set 2030 targets for a region. While it is true many RPSs have deadlines in 2015 or 2020

– well before the 2030 compliance deadlines set forth within the Secti on 111(d) proposed guidelines

– t he Clean Power Plan includes no justification as to why states should only be expected to meet 2020 targe ts by 2030, rather than 2020. This approach is not consistent with EPA’s justification for using state RPS policies in the first place. If states in a region have determined that a certain level of renewable generation is achievable by 2020, shifting tha t target back 10 years does not constitute adequate demonstrat ion of BSER . The Proposed RPS Approach should , at a minimum, use the target in the final year of a state RPS requirement to set 2030 targets, rather than using 2020 RPS requirements to set 2030 targets. In that way, the calculation of achievable renewable generation as part of building block 3 would not ignore the commitment by policymakers in some states to add r enewable generation after
2020. For states with requirements that do not continu e to increase through 2030, the Proposed RPS Approach should determine a reasonable growth rate based on historical market trends or the historical rate at which that state RPS increased to estimate an achievable level of renewable energy growth between th e last year in which a state has an increasing requirement and 2030.

e. If EPA adopts the Proposed RPS Approach, it should revise it by adding a national benchmark to better reflect the demonstrated growth of renewable energy deployment. If EPA does adopt the Proposed RPS Approach in the final rule, AWEA recommends that EPA revise it to ensure that state emissi ons rate reduction targets and, in particular, renewable growth rates, better reflect deployment rates already being achieved by many states ( what has been adequately demonstrated) and reasonable projections of deployment (what is achievable)

.70 | P a g e

To that end, EPA should revise its preferred alternative to ensure that a “demonstrated growth approach” for setting renewable energy t argets is used. To calculate state renewable energy targets, EPA should use EIA data to calculate each state’s renewable energy growth rate over the five

- year period from 2009 to 2013. EIA data show that states, on average, have increased the share of their total generat ion coming from renewable energy by 1 percent age point annually over this time period (e.g., increasing from providing 4 percent of all electricity in one year to 5 percent of all electricity in the next year)

. This demonstrated growth rate should be used to set the future renewable generation targets. This is not a particularly onerous target to use as a national benchmark , since 11 of the 15 leading states that have achieved annual growth rates at or above one percent age point annual growth have maintai ned this over the past ten years. E stablishing a national benchmark accounts for recent rapid growth in wind and solar generation and captures much of the historic development spurred by state RPSs. Secondly, for states below the one percentage point nati onal benchmark growth rate , 2017 to 2020 would function as a period for states to ramp up deployment , allowing states that have not been active in renewable development to catch up to the national benchmark. After 2020, it would be assumed that renewable energy within these states would grow at the one percentage point national benchmark growth rate through 2030. For the 15 leading states that have deploy ed renewable energy at or above the national benchmark, AWEA proposes that EPA increase their respectiv e renewable energy targets from
2017 to 2030 at each state’s average annual percentage point growth rate during the 2009

- 2013 benchmark period, up to 1.5 percent age points annually. We believe that this is a reasonable7 1 | P a g e

upper limit that is capable of being sustained over time , and a 1.5 percent age point growth rate is consistent with renewable energy targets set by many leading state RPS s . Finally, to account for full compliance with mandatory state RPS laws, states should achieve the greater of two measure s: either the generation projected by this growth rate approach , or the level needed to meet states’ respective RPS targets for each year from 2017 to 2030, as projected by the Department of Energy’s Lawrence Berkeley National Laboratory (LBNL 2013). To ensure reasonably achievable renewable energy penetration rates during the compliance period, EPA could cap the total share of renewable generation for any state at not less than 40 percent of total state electricity sales, a level that several studies by grid operators, utilities, and government agencies have shown can be achieved at the state and regional level in this timeframe while maintaining reliability. While this approach places constraints upon renewable developments, such as a 1.5 percent age poi nt annual growth cap and a 40 percent overall target cap, these restrictions are reflective of current conditions and should remain flexible. As EPA undertakes regular reviews of the Clean Power Plan, these constraints could be adjusted upward or eliminat ed entirely to

a ccount for new renewable technologies, grid integration techniques, other changes in the generation mix, and falling costs over the compliance period.

f. If EPA adopts the Proposed RPS Approach, it should include load growth in the calculatio n of the MWh
- based renewable energy targets. If EPA maintains its P roposed RPS A pproach, it should also account for load growth when calculating the MWh required to meet the future percent

- based renewable energy target s . The calculations included in the TSDs that accompany EPA’s June 2 release indicate that, under the Proposed RPS Approach, the growth rate calculated from the percent

- based renewable target72 | P a g e

that was derived from the regional RPS average target was multiplied by 2012 electricity consumption to arrive at the 2030 renewable energy MWh target. In reality, state RPS targets are almost always written as a share of future electricity consumption , so the conversion to the 2030 MWh target should have used an estimation of future load growth and 203 0 load, such as the state and regional estimates provided in EIA’s Annual Energy Outlook.
B. Building block 1

— using only heat rate improvements would not represent the “best” system of emissions reductions. As previously discussed, AWEA supports the use of all four building block s proposed by
EPA in the determination of the BSER ; however , we oppose the proposed alternati ve BSER calculation method that relies upon solely building block 1 ’s heat rate improvements at coal
facilities. Such an approach would not be consistent with the statutory requirement for the “best” system of emissions reductions. Building blocks 2, 3, and 4 must be components of the BSER , as a failure to include them would result in emissions reductions that are not the most cost

effect ive and would exclude activities that reduce carbon emissions at affected EGUs

. The increase d use of lower emitting power sources, broader implementation of renewable and nuclear generation, and increases in e nergy efficiency are all adequately demonstrate d as they have been widely adopted by utilities and others even in the absence of regulation of carbon emissions. These resources have been widely adopted because they are highly cost

- effective; as a result, a failure to include them would not be the best system of reducing emissions . The adoption of an alternative BSER calculation only dependent upon building block 1 does not adequately consider
prov en existing state frameworks for reducing carbon emissions, or the greater usage reductions from existing coal facilities through efforts put forth in blocks 2, 3, and 4.

Building blocks 1 and 2

— EPA should not limit the BSER to only those i. blocks to calculate the BSER.73 | P a g e

AWEA also opposes the alternative BSER calculation method that relies solely upon heat
rat e improvements for coal facilities (Block 1) and natural gas combined cycle dispatch (Block 2) . This strategy would also result in a higher cost of compliance than an approach that considered all four blocks

. Section 111(a)(1) requires that the BSER shou ld take into account the cost of achieving such reductions and any non

- air quality health and environmental impacts. AWEA created a model that finds the most economic options for states and regions to use to comply with the Clean Power Plan. Using this m odel, AWEA finds that deploying economic wind energy as a part of state compliance plans lowers the overall cost of compliance by $2 billion to nearly $9 billion annually, depending on gas prices, as indicated in the chart below. Figure: Emissions Compli ance Cost Savings of Wind at Various Natural Gas Prices

By considering only heat rate improvements and increases to NGCC generation, EPA would not be effectively considering the reduced costs or non

- air health and environmental benefits of other approach es , such as the water conservation benefits of wind energy, as required74 | P a g e

under the CAA. Renewable generation produces no emissions and requires no fuel for generating electricity , thus drastically lowering the aggregate emission rate and energy use for a

s tate that chooses to use renewable resources for compliance with EPA ’s emission reduction requirements. Failure to adequately include beyond

- the

- unit renewable energy and grid efficiency emissions reductions measures thus produce s a more costly and less effective means of reducing carbon emissions , as the strategies in building block s 3 and 4 often offer significant amounts of

car bon reductions at a lower cost than those within the first two building block s. 78 Moreover, the coal

- to

- gas shifting included u nder building block 2 relies on the interconnected nature of the power system to reduce emissions at a regulated EGU using actions occurring outside the EGU’s fence line, in the same way that building blocks 3 and 4 do. Strategies encomp assing all buildin g blocks have also already b een success fully used by states for reducing carbon emissions.

The proposed alternate set of state goals reflects an overly conservative ii. approach. EPA’s proposed set of alternate goals , which call for a different level of emiss ions reductions to be achieved by 2025 instead of 2030, reflect a les s stringent application of the building block s and a shorter implementation period , ultimately reflecting an overly conservative approach. In particular, t he alternate goals underestimat e the extent to whic h the key elements of the four building block s

— including penetration of renewable resources

— can be achieved rapidly while preserving reliability and remaining reasonable in cost. In addition , the alternate approach

78 See Lazard Cost of Carbon Abatement matrix on page 6 of its Levelized Cost of Energy Analysis, Version 8.0, September 2014 , available at: http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20

- %20Version%208.0.pdf ; IEA, Renewables to surpass gas by 2016 in the global power mi x, http://www.iea.org/newsroomandevents/pressreleases/2013/june/name,39156,en.html.75 | P a g e

proposal for a less stringent program with a 2025 goal year is overly conservative with respect to achievability by that time

.

State
- specific emission goals should not be adjusted after the final rule is iii. issued absent extraordinary circumstances.
AWEA a gree s with EPA’s pr oposal that once the final goals have been promulgated, a state should no longer have an opportunity to request that EPA adjust its carbon target to reflect a change in any one building block analysis unless the state also demonstrates that it could not ge t additional reductions from application of any other of the blocks , or comparable measures

. To demonstrate, states should be required to show that they avail ed themselves of all reasonable and flexible complia nce options, including from out

- of

- state sour ces. Creation of the BSER: The proposed BSER framework appropriately iv. recognizes renewable energy as a means of emissions reduction. In determining the BSER, the Clean Power Plan proposes a “ system

- based approach ” to the BSER, accounting for emission reduc tion opportunities that can be taken beyond the affected unit. AWEA supports this proposal to allow beyond

- the

- unit measures in building block s 2, 3, and 4 to be con sidered components of BSER. A system

- based approach is the best means to set carbon pollu tion emission standards from the existing power sector and is well within EPA ’s discretion under the terms of Section 111(d). Such an approach also substantially simplifies and expands the answer to the question of technical feasibility, because it change s the inquiry from what emission reductions are available to each source acting on its own, to what emission reduction choices are available to each source across the system.
AWEA also agrees with EPA ’s assessment that the “at

- the

- unit” or “beyond

- the

- un it” distinctions are not meaningful when it comes to the methods of emissions reduction as they are both reductions from electric generating units in the interconnected electrical grid. This76 | P a g e

distinction between at

- the

- unit and beyond

- the

- unit measures i s largely artificial, because all of the emission reductions under consideration

— whether from at

- the

- unit measures (e.g., fuel

switching or efficiency upgrades) or from beyond

- the

- unit measures

— are, in fact, emission reductions at or from electric genera ting units on the interconnected electric grid. There are more than 1,500 existing carbon

- emitting power plants, located in every state, 79 that operate in an interdependent, grid

- linked system. This network also includes non

- emitting power plants, as well as consumers who can adopt measures to reduce electricity demand. The interdependent nature of the power system means that the emission impacts and costs of potential control measures cannot be accurately assessed by looking at each power plant in isolat ion. For instance,

source - specific measures that reduce a given plant’s emissions typically also affect its utilization. As such, if those measures increase a plant’s cost of generation, the plant will be used less, and others will be used more, affectin g the emissions of other plants and of the system as a whole. While renewable generation itself does not reduce atmospheric carbon emissions , renewable generation does allow for the reduced usage of fossil EGUs and, therefore, subsequently decreases the am ount of carbon emissions in the aggregate by EGUs. From a legal perspective, it can be argued that all of the systems of emission reduction considered by EPA , including replacing fossil EGUs with renewable generation, can be viewed as at

- the

- unit systems of emission reduction since there will be a reduction in overall emissions from existing fossil EGUs, thus the at

- the

- unit/beyond

- the

- unit distinction becomes largely irrelevant. The definitions of “standard of performance” and “emissions guideline” in Sec tion 111 both specify that standards must achieve as much emission reduction as is technically and

79 I n 2011 , 1 , 5 9 6 po w er p la n t f a cilities e m itt in g at least 25 , 00 0 m et r ic t o n s p er y e a r o f g r e e n h o us e g as e s

— pr e do minantly carbon

—

r e por ted their emi s si on s p u r suant to EPA ’ s G r e en h o use Gas Re por ti n g P ro g r am. EPA, 2012 Greenhouse Gas Emissions from Large Facilities, available at http://ghgdata.epa.gov/ghgp/main.do.77 | P a g e

economically achievable by the sources subject to them. This can only be accomplished with a system

- wide approach. In addition, nothing in the language of Section 111(d) limit EPA’s consideration to measures implemented at the source itself when setting carbon pollution standards for existing sources. Indeed, the term “best system of emission reduction” requires a broader perspective and suggests a system

- b ased analysis is required in order to understand the net emission reductions of any potential standard. Any other approach would fail to achieve as much emission reduction from carbon

- emitting power plants as is technologically and economically achievable

. EPA thus has correctly not set the emissions guideline (carbon pollution standards) for existing power plants merely on the basis of the limited reductions achievable at reasonable cost within the fence line. Such an approach would be contrary to stat ute because the resulting standard would fall far short of delivering as much emission reduction as existing plants can achieve at reasonable cost using the permissible compliance options. In other words, if there are systems of emission reduction that can better optimize pollution reductions considering cost, impacts on energy, and other considerations, EPA must consider such systems in setting the standards for emission reduction targets that can be achieved from the existing power plant fleet
at a reason able cost. If EPA were to adopt a narrow scope of inquiry, closing its eyes to system

wide reduction opportunities, the agency would clearly violate its statutory responsibility to identify the “best system of emission reduction” by ignoring opportunities for greater or more
cost

- effective emission reductions. 80 Looking only at what is achievable at a given source is an

80 Under Section 111(d), state plans must include an enforce able emissions limitation on “any existing source” within the category, i.e. , on each carbon

- emitting power plant. Thus, as a legal matter, the final obligation to comply with standards of performance lies with each such plant. To minimize legal uncertai nty, the compliance obligation should be kept to only covered source units, with the assumption that system

- wide compliance tools, such as78 | P a g e

inadequate system of emission reduction. In short, EPA has rightfully coupled the potential compliance options considered when setting t he performance target; in order to achieve the maximum feasible reductions, as the statute directs, both must be system

- based.

a. Proposed interpretation of the t erm “s ystem” in the Clean Air Act is reasonable. AWEA agrees with EPA ’s “plain meaning” interp retation of the term “system” under the CAA, which does not define the term. The language of Section 111(d) of the CAA is sufficiently broad to encompass a system

- based approach to securing carbon pollution reductions from existing power plants. Indeed, the constraints provided by Section 111

— directing EPA to identify the system of emissions reduction best able to secure rigorous carbon emission reductions considering cost, impacts on energy use, and other environmental considerations

— strongly suggest tha t a system

- based approach is optimal for satisfying those statutory requirements. The Supreme Court of the United States has held in Chevron v. NRDC that the first step in assessing whether an administrative agency’s interpretation of a statute is permis sible hinges on whether Congress has spoken directly to the matter and “[i]f the intent of Congress is clear, that is the end of the matter; for the court as well as the agency must give effect to the unambiguously expressed intent of Congress.” 81 However, under Chevron , if a court has found that Congress has not directly spoken to the matter or “if the statute is silent or ambiguous with respect to the specific question, the issue for the court is whether the agency's answer is based on a permissible constr

uction of the statute.” 82

renewable energy generation, would reduce overall electricity generation at covered sources, thereby reducing overall emissions. 81 Chevron U.S.A. v. NRDC , 467 U.S. 837, 842

– 843 (1984). 82 Id.79 | P a g e

By failing to define “system” as it is used within the CAA, EPA’s “everyday” interpretation of the term “system” , i.e. the integrated electric system, should stand. Indeed, AWEA agrees with EPA that the term should be given its ordinary definition : “a set of things working together as parts of a mechanism or interconnecting network; a complex whole.” Moreover, EPA’s interpretation of the term to include system

- wide measures is valid as reasonable construction under Chevron ’s sec ond step. By considering that the integration of renewable generation reduces the demand for electricity produced from existing fossil EGUs, thereby reducing carbon emissions, it is a permissible interpretation to include renewable energy
in building bloc k 3 as part of a system of emission reduction for existing fossil EGUs under Section 111(d) of the CAA.

b. BSER should be based on more than what is merely “reasonably” achievable. Under EPA ’s draft proposal , in order to achieve state emissions reductions goals, only estimates of what is reasonably achievable are calculated and considered for each building block rather than considering the maximum capabilities of each state. Courts have recognized that identification of BSER is an expansive, flexible endea vor. In the service of securing the maximum emissions reductions, the D.C. Circuit Court has held that EPA may weigh “cost, energy, and environmental impacts in the broadest sense at the national and regional levels.” 83 While the costs of implementing the BSER may not be unduly burdensome or exorbitant, 84 this certainly does not mean the standard must only achieve the minimally reasonable reduction

83 Sierra Club v. Costle , 657 F.2d, 298, 321, 330 (D.C. Cir. 1981) 84 Costs must not be “exorbitant”, Essex Chemical Corp. v. Ruckelshaus , 486 F.2d at 433, see Lignite Energy Council v. EPA , 198 F.3d 930, 933 (D.C. Cir. 1999); “greater than the industry could bear and survive,” Portland Cement Ass’n v. EPA , 513 F.2d 506, 508 (D.C. Cir. 1975); or “excessive” or “unreasonable,” Sierra Club v. Costle , 657 F.2d at 34380 | P a g e

goals. Rather, EPA should assess the technically feasible amount of emissions reductions possible within a re gion when considering emissions reductions goals. 85

c. EPA employs an overly narrow construction of the “energy requirements” language in Section 111(d). EPA’s explanation of the “en ergy requirements” language in Section 111(d) , as it relates solely to reliab ility and providing sufficient flexibility to enable affected sources to follow state energy plans , is more narrow than warranted

. Indeed, the legislative history does not support such a construction of this statute. The 1990 Senate Committee Report expl ained that “the incentives created by the allowance market should stimulate innovations and technologies and strategies used to reduce emissions... [T]he allowance market should encourage sources to exploit energy efficiency, enhanced emission reduction or c ontrol technologies...; fuel

- switching and least

- emissions dispatching in order to maximize emission reductions.” 86 Thus,
C ongressional int ent shows that energy impacts should be considered at the source level, the industry level, and the national level over time. While heat rate improvements for coal EGUs and integration of lower emitting natu ral gas combined cycle units might be essential in the interim for a number of states to lower their emissions levels drastically, exclusive reliance upon just those two building block s , for purposes of compliance, would not address long

- term conside rations of fuel price risk, climate action, or system reliability

. In other words, EPA should design the final rule with a consideration of the energy impacts over time , s uch as avoiding a rule that just results in fuel

- switching from one fossil fuel source to another

.

The BSER’s stringency should be increased over time. v.

85 See 1970 Senate Co mmittee Report No. 91

– 1196 at 15 (“The maximum use of available means of preventing and controlling air pollution is essential to the elimination of new pollution problems”). 86 1990 Senate Committee Report at 316, reprinted in 1990 Legislative History, vol . V, at 8656.81 | P a g e

The CAA Section 111(b)(1)(B) calls for EPA to rev iew, and if appropriate, revise federal standards of performance for new sources at least every eight years. 87 This requirement provides for regular updating of performance standards as technical advances provide technologies that are cleaner or less costl y. AWEA believes this same concept should also apply to Section 111(d), as it keeps implementation of state plans current with technological and programmatic trends. I t is unreasonable to interpret the absence of any express updating authority in Section 111(d) as reflecting a c ongressional intent that EPA regulate a source category only once under Section 111(d). An interpretation that tied EPA’s hands in that way would be grossly inconsistent with the strong emphasis in Section 111

— and in the Clean Air Act generally

— on protecting the environment and public health and promoting technological innovation.

Permanent Reductions: EPA should establish BSER
- based state emission vi. performance goals for affected EGUs that extend beyond the proposed planning period. Congress intended for the emission performance i mprovements required under S ection 111(d) to be permanent . Indeed, EPA has set other S ection 111(d) emission limits to be met permanently . To that end, AWEA agrees that EPA should establish BSER

- based sta te emission performance goals for affected EGUs that extend further into the future (e.g., beyond 2030 ) and that the level of emission performance for affected EGUs represented by the final goal should continue to be maintained in the years after 2030 . A state should be required to compare actual

87 “ The Administrator shall, at least every 8 years, review and, if appropriate, revise such standards following the procedure required by this subsection for promulgation of such standards. Notwithstanding the requirements of the previous sen tence, the Administrator need not review any such standard if the Administrator determines that such review is not appropriate in light of readily available information on the efficacy of such standard. Standards of performance or revisions thereof shall b ecome effective upon promulgation. When implementation and enforcement of any requirement of this chapter indicate that emission limitations and percent reductions beyond those required by the standards promulgated under this section are achieved in practi ce, the Administrator shall, when revising standards promulgated under this section, consider the emission limitations and percent reductions achieved in practice. ” 42 U.S.C. § 7411 (b)(1)(B).82 | P a g e

plan performance against the final goal on a rolling three

- year average basis starting in 2030, and
to be allowed to implement corrective measures if necessary

.

The Clean Power Plan correctly concludes that wind e nergy is an vii. appropriate “outside of the fence line” compliance option that satisfies the “best system of emission reduction requirements” and should be factored into determining state emission targets. As the Clean Power Plan recognizes, wind energy is a n achievable and adequately demonstrated source of carbon reductions under a system

- based approach. In support thereof,

we refer EPA to AWEA ’s U.S

. Wind Industry Annual Market Report for the Year Ending 201 3 (201 3 AWEA Wind Market Report)

. 88 The 100

- plus page market report provides a comprehensive look at the U.S. wind energy industry, including a large body of data that demonstrate that wind energy is an achievable, adequately demonstrated, and affordable technology

. Additional data can be found in the U .S. Department of Energy’s 2013 Wind Technologies Market Report (DOE Market Report). 89 As recognized in the Clean Power Plan, wind energy is an “outside of the fence line” compliance option that satisfies the BSER and, therefore, is available to states in achieving the emission guidelines set by EPA in the Clean Power Plan . The language of Section 111 (d), which direct s EPA to identify the system of emission reduction best able to secure rigorous carbon emission reductions while considering cost and imp acts on energy use and other environmental considerations , requires that a system

- based approach be permitted to satisfy the statutory requirements of the A ct. Failure to incorporate system

- based emission reductions, including wind energy, would not be th e most cost

- effective and therefore not the best system of

88 Available at: http ://www.awea.org/AMR2013 . In addition, AWEA’s quarterly market reports for the first three quarters of 2014 are available at: http://www.awea.org/Resources/Content.aspx?ItemNumber=6 386 . The fourth quarter 2014 report, which will include full year data on several issues, will be available in late January 2015. 89 Available at: http://energy.gov/sites/prod/files/2014/08/f18/2013%20Wind%20Technologies%20Market%20Report_1.pdf83 | P a g e

emissions reductions. Given this, EPA’s standard of performance in the Clean Power Plan correctly takes wind energy into account in setting performance standards for states; indeed, the Clean Powe r Plan would fall far short of delivering the maximum emission reductions existing plants can achieve at a reasonable cost, as required by the statute, if it did not include wind energy in that calculation. Below we place evidence in the record that EP A acted consistent ly with the statutory requirements of Section 111(d) by factoring wind energy into setting targets and allowing it to be used as a cost

- effective compliance option. In turn, the Clean Power Plan will better be able to deliver real cuts i n carbon pollution, while driving the expansion and use of clean, non

- polluting energy sources. Indeed, it would have been inconsistent with the 111(d) statutory scheme to set a weak standard that adequately demonstrated syst ems already achieve and exceed

.

a. Wind Energy is an achievable and adequately demonstrated means to comply with emissions standards under a system
based approach. EPA must set emission guidelines based on the BSER. Specifically, und e r both Section 111 ( a ) ( 1) a nd EPA’s r ules a n d re g ulat ion a t 40 C F R 6 0.21 (e ), a “ stand a rd of
p e r f o rm a n ce ” must be a n obje c t i v e , e n f o rc e a ble, a nd g e n e r a l l y qu a nt i tative li m it that

re fl e c ts t he e m i ss i ons r e du c t i ons ac hie v a ble u sing the BSER. 41 Further, Section 111(a)(1) defines a “standard of performance” as:

“ [A] standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated .” 42 U.S. Code Section 7411 (emphasis added).84 | P a g e

In other words, a “satisfactory” approvable state plan needs to contain standards of perf ormance that meet the statutory requirement to obtain the emission reductions that are “achievable” 90 using the BSER that is “adequately demonstrated,” 91 taking into account the cost and other factors. T hese statutory directives establish the principle that any achievable and adequately demonstrated system of emission reduction available for compliance with a performance standard must also drive the standard’s stringency. We provide data below that demonstrate how wind energy has proven to be an achievable

a nd adequately demonstrated option to reliably and verifiably reduce carbon emissions at a reasonable cost and in an environmentally friendly way , consistent with the requirements laid out in the definition of a standard of performance in the CAA. These a ttributes of wind energy will likely lead many stakeholders to use it as a compliance method for meeting carbon pollution standards under Section 111(d) 92
, just as EPA, in the Clean Power Plan, accounted for achievable emission reductions from wind energy p rograms in setting the stringency of its emission guidelines for existing power plants.

b. Wind energy is adequately demonstrated because it is currently a significant source of electric energy capacity and is growing rapidly. The Third Quarter 201 4 AWEA Market Report f ound there are 6 2 , 30 0 MW of wind energy capacity installed in 39 states and Puerto Rico ( see graphic below ) as of September 30,

90 Case law has established that “achievable” constitutes a combination of what “has been achieved” and “what may fairly be projected, ”,” and that me thods for determining compliance should track the methods used for setting the standard. See, e.g., Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir. 1973)

. 91 The D.C. Circuit has described “[a]n adequately demonstrated system as: one whi ch has been shown to be reasonably reliable, reasonably efficient, and which can reasonably be expected to serve the interests of pollution control without becoming exorbitantly costly in an economic or environmental way.” Essex Chem. Corp. v. Ruckelshaus , 486 F.2d 427, 433 (D.C. Cir. 1973). 92 For instance, the National Association of Clean Air Agencies (NACAA) wrote an August 21, 2013 letter to Administrator McCarthy asking that: “EPA should establish a flexible program that recognizes that . . . rene wable energy investments, policies and programs (‘programs’) and shifting utilization towards lower emitting power plants reduce GHG emissions from the electrical system as a whole.”85 | P a g e

2014 , representing more than 46,000 operational utility

- scale wind turbines. There are now 16 states with 1,000 MW or more of installed wind energy capacity. This represents 5.7 percent of total installed U.S. electric generating capacity.

Figure : Installed U.S. Wind Energy Capacity in MW, by State through 2013

93 In terms of actual electricity production, wind energy accounted for 4.1 percent of electric generation in 2013 (up from 2.9 percent in 2011 and 3.5 percent in 2012). The existing wind turbine fleet provides the electrical output equivalent to 53 average coal plants, or 14 average nuclear plants.
Over the last five years, wind energy has accounted for 31 percent of all newly installed electric generating capacity, second only to natural gas. 94 In 2012, wind energy was the single largest source of all new capacity at 42 percent. In some regions, such a s the Pacific Northwest,

93 AWEA, U.S. Wind Industry Third Quarter 2014 Market Report, available at http://awea.files.cms

plus.com/FileDownloads/pdfs/3Q2014%20AWEA%20Market%20Report%20Public%20Version.pdf 94 AWEA, U.S. Wind Industry Annual Market Report for the Year Ending 2013

.86 | P a g e

Plains states and the Midwest, wind energy has been the primary source of new capacity over the last three years, providing 60 percent or more of all new electric generating capacity. In the Upper Midwest, wind energy provided more than 80 percent of all new generating capacity from
2011

- 2013. Further evidence that wind energy is adequately demonstrated can be found in the percent of total generation that wind energy provides in individual states (see graphic below). On an
average annual basis, wind energy produces more than 25 percent of the electricity in two states, 12 percent or more in nine states, and five percent or more in 17 states. Figure 2: U.S. Wind Energy Share of Electricity Generation during 2013, by State

.

95
Wind e nergy technology is rapidly improving, mostly through taller towers that allow access to higher wind speeds and longer blades that make lower wind speed sites more economic. As a result, wind companies are now showing interest in developing projects in st ates where wind energy was not previously viable, such as much of the Southeast. In addition to the 39 states with existing installed wind energy capacity, wind energy project developers have publicly

95 AWEA’s U.S. Wind Industry Annual Market Report for the Year Ending 201387 | P a g e

proposed wind projects in Kentucky, Virginia, North Ca rolina, Florida, and Alabama, with initial prospecting also being done in Georgia and Louisiana. 96 Moreover, utilities in Tennessee, Arkansas, Georgia, Alabama, and Louisiana have already signed power purchase contracts to buy electricity from wind energy facilities in other states, demonstrating that wind energy is a widely available complian ce option. 97 As our nation’s transmission grid is upgraded and expanded, previously untapped high

quality and low

- cost wind resources are increasingly being developed, making wind energy available to even more Americans. The Competitive Renewable Energy Zone (C RE Z) lines in Texas, which have already enabled more than 9 ,000 MW of proposed wind projects in high quality wind resource areas to sign agreements to connect to the grid , are a prime example. 98 The Southwest Power Pool (SPP) and MISO are following suit with “Priority Projects” 99 and “Multi Value Projects,” 100 respectively, which when completed are likely to bring a combined total of 15,000

- 20,000 MW of new wind gener ation online.

96 The following list provides examples: http://www.windcapitalgroup.com/locations.html , http://shinbonewind.com/about/ , http://www.reuters.com/article/2011/05/03/usa

- energy - iberdrola

idAFN0316807320110503 ; https://ww w.dom.com/about/stations/renewable/virginia

- wind

- projects/ ; https://www.courierpress.com/news/2013/sep/11/duke

- energy - explains

- proposed

- kentucky

- wind / ; http://iberdrolarenewables.us/power

- wind

- development.html ; http://www.wkyt.com/home/headlines/Flordia_company_considers_wind_turbines_for_n_Kentucky_124129244.ht ml ; http://www.nola.com/business/index.ssf/2013/07/lou isianas_first_wind_farm_pla.html

. 97 See, for example http://www.tva.com/power/wind_purchases.htm , http://www.bizjournals.com/atlanta/blog/capitol_vision/2014/05/regulators

- ok

- georgia

- power - wind

energypurchase.html , http://www.alabamapower.com/environment/news/chisholm

- view

- project

- provides

- low

- cost

power.asp , https://www.swepco.com/info/projects/WindPowerPurchase/ , http://www.aecc.com/renewable

resources/wind

- energy . 98 Available at http://www.erc ot.com/content/committees/board/keydocs/2014/ERCOT_Monthly_Operational_Overview_201409.p df , page 19. 99 The "priority" high voltage electric transmission projects are estimated to bring benefits of at least $3.7 billion t o the SPP region over 40 years and will facilitate, among other things, the addition of new renewable and non

generation to the electric grid. Available at http://www.spp.org/ Section .asp?pageID=125

. 100 These projects meet one or more of three goals, including reliably and economically enab ling regional public policy needs (such as state renewable energy portfolios) to be met. Available at https://www.misoenergy.org/Planning/Pages/MVPAnalysis.aspx

.88 | P a g e

As can be seen from the maps above, wind energy is one of the most geographically dispersed energy sources available. Currently, the wind industry supports over 50,000 jobs with a supply chain of over 500 facilities. 101 In fact, there is eith er a wind project or wind

- related manufacturing facility and wind

- related jobs in all 50 states. The Department of Energy anticipates that at 10% wind energy penetration nationwide by 2020, the number of Americans employed by the wind industry could grow to 139,000, with an additional 106,000 induced jobs in communities where wind manufacturing and deployment occur. 102 At 20% wind energy by 2030, these numbers jump to 230,000 wind

- related jobs with 175,000 induced jobs; and 35% wind energy by 2050 correspo nds to an estimated 400,000 wind related jobs and 295,000 induced jobs. 103 Wind projects directly benefit the local economy of communities that host them.
A 2012 study evaluating county

- level economic development effects determined that between 2000 and 20 08 , wind power installations increased personal income by approximately $11 0,000 per megawatt (MW) of installed capacity. 104
A. Wind energy is adequately demonstrated because affected entities have already directly invested in wind energy , and there is even a g reater potential for them to do so to meet emission target levels for purpose s of Section 111(d) compliance . EPA explains that the components of the BSER, including the use of renewable energy, are part of a “system of emission reduction” for the affected EGUs because they either improve the carbon intensity of the affected EGU s in generating electricity, or because of the integrated nature of the electricity system and the fungibility of electricity, they displace the need for

101 U.S. Department of Energy Wind Vision presentation, May 2014, available at: http://energy.gov/sites/prod/files/2014/05/f16/2014%20Wind%20Vision%20Presentation%20at%20AWEA%20WI NDPOWER_3.pdf

. 102 Id. at 18. 103 Id. a t 20. 104 DOE Wind Vision 2014 Report at xxvi.89 | P a g e

generation from those source s and thereby reduce the emissions from those sources. And, EPA correctly concludes that those measures may be undertaken by the affected EGUs themselves. With respect to wind energy, affected entities have already directly invested in wind energy, and
t here is even a greater potential to do so to meet emission target levels for purposes of Section 111(d) compliance. The investment in wind energy by affected EGUs themselves is “adequately demonstrated” and “achievable” because it is already well

- establis hed in numerous states, and there are many options for affected EGUs to make further investments in renewable energy. Many EGUs have already relied on wind energy to reduce GHGs and other air pollutants from fossil fuel

- fired EGUs. Owners of fossil units operating across a wide range of corporate, institutional and market structures (e.g., vertically integrated utilities in regulated markets, independent power producers, municipal utilities, and rural cooperatives) have taken advantage of emission reducti on opportunities from wind energy, and can tap into this potential for compliance with EPA’s proposed carbon emission performance standards. Large vertically integrated utilities generally have multiple options for investing in renewable energy, including building their own renewable generating capacity or procuring renewable generation under a long

- term power purchase agreement. For example, investor owned utilities (IOUs) currently own or have long

- term contracts for over 36,000 MW of wind assets that a re either online or under construction. Some of the top IOUs for purchasing or owning wind power include Xcel Energy, which will have over 6,900 MW of wind capacity under contract or direct ownership by the end of 2015, including roughly 700 MW of direct

o wnership, and Berkshire Hathaway Holdings, formerly MidAmerican Energy, which is expected to have over 5,800 MW of owned or under contract wind capacity by the end of 2015,90 | P a g e

including around4,500 MW through direct ownership. In total, 71 of the nation’s 19 2 IOUs own or purchase wind power or have contracts for wind power projects under construction. Some of the investor

- owned utilities that currently own or purchase wind power include the following: AEP

- Appalachian Power Company; AEP

- Public Service Co mpany of Oklahoma (PSO); AEP

- Southwestern Electric Power Company (SWEPCO); AEP (Indiana Michigan Power Co); AEP (Ohio Power); Alabama Power Company; Alliant Energy (Interstate Power & Light); Alliant Energy (Wisconsin Power & Light); Ameren Illinois; Ari zona Public Service Company; Avista; Bangor Hydro Electric Company; Black Hills Energy; Central Maine Power Company; Central Vermont Public Service; Cheyenne Light, Fuel & Power; ComEd; United Illuminating; Connecticut Light & Power; Consumers Energy Co; D elmarva Power and Light; Detroit Edison; Duke Energy Indiana; El Paso Electric; Empire District Electric Company; Exelon; Georgia Power Company; Green Mountain Power; Hawaiian Electric Co.; Idaho Power; Indianapolis Power & Light; Kansas City Power & Light ; KCP&L Greater Missouri Operations (GMO); Madison Gas & Electric; Massachusetts Electric Company; Maui Electric Co.; MidAmerican Energy Company; Minnesota Power; Montana

- Dakota Utilities; National Grid; North Central Power Co., Inc.; Northern Indiana Publ ic Service Company; NorthWestern Energy; NorthWestern Energy (Montana Power); Northwestern Wisconsin Electric Company; NSTAR Electric Company; NV Energy; Oklahoma Gas & Electric; Otter Tail Power; Pacific Gas & Electric; PacifiCorp; Portland General Electr ic; Public Service Co. of New Hampshire; Public Service Company of New Mexico (PNM); Puerto Rico Electric Power Authority (PREPA) Puget Sound Energy; Rocky Mountain Power; San Diego Gas & Electric; Southern California Edison; Tucson Electric Power; Unisour ce Energy Services; Vectren Energy; We Energies; Westar Energy; Wisconsin Public Service; Xcel Energy (Northern States Power91 | P a g e

Company); Xcel Energy (Public Service Co of Colorado); and Xcel Energy (Southwestern Public Service). Municipal utilities and rural cooperatives that own generating asset portfolios, particularly generation and transmission cooperatives and larger municipal utilities, have also used wind energy to reduce carbon emissions. 105 For example, Austin Energy, the nation’s 8th largest publicly owned utility, currently has contracted over 1,300 MW of wind power within Texas. CPS Energy, representing the city of San Antonio, also purchases more than 1,050 MW of wind power. Large generation & transmission cooperatives like Basin Electric and Asso ciated Electric Cooperative Inc. also purchase significant quantities of wind power for their members. Basin Electric has more than 1,000 MW of wind power under contract, and AECI has nearly 800 MW. In total, over 14,000 MW of wind power is owned or cont racted by municipal utilities, cooperatives, joint action agencies and political subdivisions like the Omaha Public Power District and the Grand River Dam Authority. An additional 1,700 MW is owned or contracted by federal power

- marketing agencies , with T ennessee Valley Authority purchasing more than 1,500 MW of wind power under long

term contracts. For cooperatives and municipal utilities with smaller fleets, these owners can als o use wind energy to reduce carbon emissions, and in many cases financing is available at tax

advantaged or subsidized rates. At the same time, in formulating their compliance plans, states will be in a position to recognize the distinctive attributes of smaller utilities

– and, of course, may consider participating in integrated multi

- state compliance strategies to increase the

105 The NRECA provides a list of all the coops that ar e buying output from various renewable generation technologies, available at http://www.nreca.coop/wp

- content/plugins/nreca

- interactive

- maps/RenewableEnergy/

.92 | P a g e

flexibility and cost

- saving opportunities that would be available to these covered EGUs seeking to invest in renewable energy.

c. Wind energy is adequately demonstrated because its emission reductions are qua ntifiable and verifiable. The fact that wind energy’s emission reductions are readily quantifiable and verifiable further indicates that wind energy is adequately demonstrated in practice. All utility

- scale wind projects have revenue

- grade metering equi pment that measures the amount of wind energy production. Among oth e r rea sons, s u c h e quip m e n t and v e ri f i c a t i on is n ece s s a r y to ensu r e

c omp l ian c e with pow e r p u rc h a se c ontr a c t r e quir e ments a nd for purp o s e s of c laim i n g the fe d e r a l produ c t i on t a x c r e dit ( P TC) , w hich is b a s e d on e l e c trici t y g e n e r a ted. I n addition, rigorous accounting mechanisms for Renewable Energy Credits (RECs) are use d for R PS compliance in 29 states and the District of Columbia, and accounting mechanisms are in place nationwide for verifyi ng renewable energy production to satisfy voluntary REC purchases. 106 These well

established accounting mechanisms could be readily adopted to support compliance with Section 111(d) by ensur ing that renewable energy production is precisely and rigorously qu antified and is not double counted. In addition, a s explained earlier in our initial comments, several tools, such as marginal emissions calculations , fossil plant average emissions rates, and power system modeling, allow carbon emissions reductions to be calculated based on measured wind energy production. 107 In short, the broad de ployment of wind energy across the country and the fact that its emission reductions are easily quantifiable shows that it is adequately demonstrated in practice.

106 See, for example: http://www.resource

- solutions.org/pub_pdfs/Tracking%20Renewable%20Energy.pdf , and http://www.cesa.org/assets/2014

- Files/RECs

- Attribute

- Definitions

- Hamrin

- June

- 2014.pdf

. 107 See Appendix A II, at 22

- 25.93 | P a g e d. Wind energy is a chievable because it is a cost
- effective means to reduce carbon emissions. Wind energy directly offsets fossil fuel use and emissions at other power plants on a 1:1 basis. Because power plants are interconnected on an electrical grid that operates based on market principles, electricity produced by wind yields an equivalent decrease in electricity production at the most expensive power plant operating at the time , which is typically the least efficient operating fossil

- fired power plant for the fuel type that is on the margin

. 108 As such, bringing wind energy online to replace the least efficient operating fossil

- fired power plant means that, rather than supplying energy from a source with a high rate of carbon pollution, energy is produced with zero associ ated carbon pollution. W ind energy has deployed more new

zero - emission energy capacity than any other source for the past three decades. Using zero carbon generation resources like wind energy to reduce or replace the use of fossil generation is necessary to maximize emissions reductions and improve the prospects of mitigating climate change. As the Executive Director of the International Energy Agency, Maria van der Hoeven, said earlier this year , "[L]et me be clear: an expansion of gas alone is no panacea for cl imate change

. ” Hoeven went on to say the temperature increase that would be caused by a continued expansion of natural gas use "is well above the globally agreed maximum target of 2 degrees Celsius." 109 I mpor t a nt l y , wind e n e r g y d e l i v e rs sustain e d

e m i ss i ons r e du c t i ons, in c ontr a s t t o the mo r e f le e t i n g e m i ss i ons r e du c t i ons th a t ha d o c c u rr e d in

108 See EPA, Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into Sta te and Tribal Implementation Plans, available at http://www.epa.gov/airquality/eere/pdfs/EE renewable energy manual.pdf

. In apparent recognition of this fact , EPA has expressly provided that “fuel switching” (producing more energy from renewable sources) is an effective strategy to reduce carbon emissions. See Overview of Greenhouse Gases: Carbon Dioxide Emissions, EPA, available at http://www.epa.gov/climatechange/ghgemissions/gases/ ca rbon .html

. 109 “IEA: Lawmakers need to protect renewables, foster clean innovation,” SNL Financial, February 25, 2014. Available (for subscribers) at: http://www.snl.com/Interac tiveX/article.aspx?ID=27027293&KPLT=494 | P a g e

2012 from increased gas generation a s the p r ice of n a tur a l g a s g e n e r a t i on tempo ra ri l y dipped b e l o w th a t of c o a l , but were to some extent reversed in 2013

. 110
AWEA used E PA ’s new AVERT modeling tool to quantify the state

- by

- state pollution reductions wind energy currently provid es , and the results are shown in the map and tables below. The 167.7 million MWh of wind energy produced in the U.S. in 2013 reduced CO 2 emission s by 126.8 million short tons, the equivalent of reducing power sector emissions by more than five percent or taking 20 million cars off the road. These emissions savings were broadly distributed across nearly every state, accounting for the fact that win d energy is widely deployed and that many utilities in states without wind plants are purchasing wind energy from other states. In fact, according to the AWEA analysis, 11 states are achieving emissions savings of 10 percent or more from wind energy alone , with three additional states just under 10 percent. Emissions savings are reported in the states where the AVERT model indicates fossil

- fired power plants are reducing their emissions due to wind generation, which in interstate power markets are not alw ays the states in which the wind plants are located

.

110 EPA released data showing that power plant carbon dioxide emissions declined 10 percent between 2010

- 2012, though DOE data indicate that emissions have likely increased in 2013, available at http://www.awea.org/Med iaCenter/pressrelease.aspx?ItemNumber=5748.95 | P a g e

Figure : Short Tons of CO 2 Emissions R educed by Wind Power, by State

.

According to the results from the AVERT tool, on average one M W h of wind energy avoids .75 short tons, or 1,500 pounds, of ca rb o n dioxide emissions. A typical 2 MW wind turbine a voids a round 4,000

- 4,500 tons of ca rbon emissions a n n u a l l y , e q u iva l e nt to the a nnu a l

c a rbon e m i ssions o f mo r e than 700 ca rs. Importantly, the AVERT analysis prepared by AWEA also demonstrates that wind

ene rgy plays an important role in reducing emissions of SO 2 and NO x , facilitating compliance with EPA regulations limiting those pollutants. Wind energy currently reduces SO 2 emissions by nearly 347 million pounds per year and NO x by 214 million pounds per y ear. And, AWEA has calculated that in 2013 wind energy saved 36.5 billion gallons of water that would have been96 | P a g e

consumed at conventional power plants, the equivalent of roughly 116 gallons per person in the U.S. or 276 billion bottles of water, providing critical relief in drought

- stricken areas. 111 As impressive as wind energy’s contribution to emissions reductions is, it is poised to play an even more significant role going forward. DOE estimated the net present value o f wind’s carbon emission reductions through the year 2050 at around $400 billion, and the air pollution benefits at around $108 billion. 112
I n d e p e nd e nt s y stem op er a tors a nd re g io n a l t r a ns m is s ion or g a ni z a t i ons h a ve also

c ondu c ted stud i e s that identi f y the i mpa c t of w ind g e n e r a t i o n on s y ste m - wi d e c a rbon

e m i ss i ons, a nd h a ve c on c luded that wind e n e r g y disp l a ce s b e tw e e n 0. 4 4

– 0.74 met r ic tons of c a rbon p e r M W h g e n e r a ted , generally consistent with the AVERT findings discussed above

. 113 Th e se r e g io n a l va r iations in a v e rage e m i ss i ons displa ce ments a re due to v a ri a t i ons in the gen e r a t i on mi x , pri m a ri l y d riv e n b y v a r i a t i ons in the sh a re of c o a l a nd n a tur a l g a s provid i ng ma r g i n a l gen e r a t i on f r om r e g ion t o re g io n . AWEA’s AVERT analysis similarly found that wind produ ces large emissions savings nationwide, with some variations among regions. M ore than half of U.S. wind is in regions where wind displace s 65 percent or more high

- carbon generation, according to the AVERT analysis.

111 AWEA Annual Market Report for the Year Ending 2013. 112 Available at http://www.utilitydive.com /news/how

- the

- us - will

- get

- a - third

- of

- its

- energy - from

- wind

- by

midcentury/335423/

. 113 AWEA Annual Market Report for the Year Ending 2013.97 | P a g e

Figure: Wind Energy Emissions Reducti on by Geographic Region

Wind’s 2013 savings, CO 2 (tons) Wind’s 2013

savings, SO 2 (tons) Wind’s 2013

savings, NOx (tons) Wind ’s CO2

savings rate , lbs/MWh % of wind

MWh displacing high
carbon gen Wind

MWh, share of national MISO 34,344,200 56,391 30,042 1,834 85.4% 22.3% Texas 22,235,300 29,681 11,998 1,341 38.2% 19.6% SPP 19,099,400 26,544 18,772 1,675 67.1% 13.3% PJM 13,906,200 33,281 12,238 1,545 66.4% 10.7% California 10,044,500 900 7,532 985 10.0% 12.2% CO+WY 10,242,200 7,878 10,057 1,771 70.8% 6.7%
Northwest and Interior West 9,005,700 5,805 9,976 1,404 41.8% 7.6% Southeast 3,805,700 9,216 2,523 1,350 53.9% 3.4% Northeast 2,948,600 2,564 1,925 1,109 14.2% 3.2% Southwest 642,600 151 465 1,116 24.2% 0.7% AK+HI 551,781 1,150 1,785 1,722 14.9% 0.4% Total 126,826,000 172,300 105,500 1,500 54.1% 100%
A renewable integration study released in March 2014 for PJM, 114 the regional grid operator for the Mid

- Atlantic and part of the Great Lakes region, indicates that wind energy tends to disproportion ately displace higher

- emitting electricity sources, particularly at higher levels of wind energy use. In the scenario in which 14 percent of PJM generation comes from renewable resources , 100 MWh of renewable energy displaces 51 MWh of coal and imported g eneration (imports are primarily coal generation from other regions), with nearly

114 PJM study results, slide 11, available a t http://www.pjm.com/~/media/committees

groups/committees/mic/20140303/20140303

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all of the remainder offsetting gas generation. In the 20 percent renewable energy scenario that primarily deployed land

- based wind, coal and imports displacement from 100 MW h of wind increases to 62 MWh, and in the 30 percent scenario it reaches 72

- 73 MWh. PJM’s study found that power sector carbon dioxide emissions declined by 27

- 41 percent in the 30 percent renewable scenarios, with the cases with the largest amount of lan d

- based wind energy producing the largest emissions reductions. Other n a t i ons h a ve a l so se e n si g nif i ca nt d e c l i n e s in c a rbon e m i ss i ons a s th e y h a ve

r a mped up th e ir use o f w ind en e r g y . T a b l e s 1 a n d 2 pr e s e nt I nt e rn a t i on a l E n e r g y A g e n c y data for f ive c ountri e s that pro d u c e the l ar g e st s h a r e of their e l e c trici t y f r om wind e n e r g y : G e rm a n y , S p a in, P o r t u g a l, D e nma r k, a nd I r e land

. 115 T a ble 1 sho w s how the s e c ountri e s
g r ea t l y inc rea s e d their use o f wind e n e r g y b e t w ee n 1999 a nd 2010

Ta b le 1: Wi n d E n er gy G r o w th in t h e F ive Hi g h e st Wi n d E n er gy Use Cou n t r ies Cou n t r y Wi n d

E n er gy’s Percent S h a r e of Ele c t r icity in 2010 Wi n d

E n er gy’s Percent S h a r e of Ele c t r icity in 1999 I n cre ase in w i nd ’s

e le c t r icity p e r ce n tage s h a r e f r om 1999 to 2 0 1 0
D e nma r k 22.6 8.8 13.8 P o r tu g a l 2 0.2 0.3 19.9 S p a in 17.0 1.6 15.4 I r e land 11.0 0.9 10.1 G e rm a n y 6.9 0.03 6.9 All OECD Eu r ope 4.3 0.5 3.8
T a ble 2 sho w s that the c o untri e s that add e d the m o st wind e n e r g y saw t h e g rea test d ec l i n e s in el ec tr i c se c tor ca rbon e m i ss i ons inte nsi t y , while c ountr i e s that a dd e d less wind

e n er g y (like G e rm a n y a nd the a g g re g a t i on of a ll OECD E u r op e ) s a w sm a l l e r de c l i n e s in t h e ir

115 IEA, Sta tistics, available at http://www.iea.org/statistics/.99 | P a g e

e m i ss i ons in t e nsi t ies. By d r a st i ca l l y inc r ea si n g their u s e of wind e n e r g y , S p a in and P o r tu g a l ha v e c ut the c a rbon e m i ss i ons intensity of their e le c tr i c se c tors i n h a lf.

Ta b le 2: P e rce n t Cha n ge in Ele c t r ic Se c tor C arbon E m is s io n s/ k Wh f r om 199 9
- 2010

Count r y Percent Ch a n ge in

carbon emissions / k Wh f

r om 1999
- 2010 I n c re a se in wind ’ s

el ec trici t y p e r c e n t a g e sh a re f rom 1999 to 2010 P o r tu g a l
- 53.07 percent 19.9 S p a in
- 46.45 percent 15.4 D e nma r k
- 24.96 percent 13.8 I r e land
- 34.24 percent 10.1 G e rm a n y - 12.58 percent 6.9 All OECD Eu r ope - 12.60 percent 3.8 Further, the emissions reductions attributable to wind energy persist even when any additional cycling of fossil generation is included in the analysis. A p ee r - r e vi e w e d a n a l y sis b y the D e p a rtme n t of En er g y ’s National Renewable En erg y Laboratory e x a m i n e d re a l

- wo r l d hour l y e m i ss i ons f

r om ev e r y po w e r pl a nt i n the w e st e r n U.S. , focusing on any i m p ac t wi n d

e n e r g y h a s on t h e e f

fi c i e n c y of oth e r pow e r pl a n ts b y ca usi n g them to change their output

mo r e f r e qu e nt l y by modestly increasing the total variability of all sources of supply and demand . The stu d y f

o und that for a s c e n a rio w i th wind and solar p r ovid i ng 33 percent o f

e le c t ri c i t y on the W e ste r n U.S. pow e r s y ste m , one M W h of w ind en e r g y s a v e s more than 1190 pounds o f ca rbon pol l ut i on on a v e ra g e, with t hose s a vi n g s r e du ce d b y on l y 0.2 percent ,

or 2 .4 pounds, a s a re sult o f in c re a s e d c y c l i ng of fossi l

- fi re d po w e r p l a nt s . 116 D O E d a ta a lso

con f irm th a t s t a tes t h a t have r a mped up th e ir use o f w ind en er g y the m ost have se e n the

116 Available at http://www.nrel.gov/electricity/transmission/western_wind .html

.100 | P a g e

e f f ici e n c y of th e ir fossi l

- fi re d pow e r pl a nts hold up as w e ll or b e t t e r t h a n st a tes th a t use the
l e a s t wind e n e r g y . 117
This oc c u r s b e ca use wind e n e r g y on l y m i ni m a l l y a dds to to t a l pow e r s y st e m

va r iabil i t y and flexible reserve needs , a s most c h a n g e s in wind output a re of f s e t b y ot h e r

c h a n g e s in s upp l y or demand

. 118 F or e x a mp l e , s y stem op e r a tors in T e x a s ha v e in te g r a ted

mo r e t h a n 10,000 MW of w ind e n e r g y with on l y v e r y s m a ll inc rea s e s in t h e ir n ee d f or fl e x ib l e

r e s e r v e s . 119 Further analysis of this data by AWEA demonstrates that the impact of wind energy on the need for and cost of flexible reserves is less th an 1/17 th of the cost for the flexible reserves used to manage abrupt outages of large conventional power plants. 120 T he Mid c ont i n e nt I n d e p e nd e nt S y stem Op e r a tor ( M I SO ) h a s also stat e d t h a t t he i m p ac t wind
po w e r h a s on its ne e d for the f le x ib l e r e s e rv e s u s e d to a cc om m od a te v a ri a bi l i t y in el ec tr i c i t y
supp l y a nd d e mand h a s b e e n “ l i t t le to non e . ” 121 In addition, the previously noted PJM wind integration study confirms that wind energy only minimally contributes to total power system variability, with the increas e in operating reserve needs in the 14 percent renewable energy scenario amounting to 340 MW, about 1/10 th of the 3,350 MW of the operating reserves PJM needs at all times to maintain reliability in case a large conventional power plant abruptly fails. 122

117 See Goggin, Michael. “ Wind energy’s emissions reductions: A statistical analysis .” Presented at IEEE PES, July 2013. http://ieeexplore.ieee.org/xpl/login.jsp?tp=&arnumber=6672865&url=http percent 3A percent 2F percent 2Fieeexplore.ieee.org percent 2Fiel7 percent 2F6657332 percent 2F6672065 percent 2F06672865.pdf percent 3Farnumbe r percent 3D6672865

. 118 For a comprehensive list of wind integration studies that support this conclusion, available at http://variablegen.org/resources/

. 119 Available at http://variablegen.org/wp

- content/uploads/2012/12/Maggio

Reserve_Calculation_Methodology_Discussion.pdf

. 120 Available at http://aweablog.org/blog/post/fact

- check

- winds

- integration

- costs

- are - lower

- than

- those

- for

- other

energy - sources 121 Available at http://variablegen.org/wp

- content/uploads/2012/12/Navid

- Reserve_Calculation.pdf 122 PJM study results, slide 111, available at: http://www.pjm.com/~/media/committees

groups/committees/mic/20140303/20140303

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Wi nd energy is also competitively priced. Lazard, a well-respected financial and asset management firm, in a September 2014 report 123 found that the levelized cost of energy for wind power has decreased 58% since 2009, and 15% in the last year alone. The analysis finds that wind energy is one of the most affordable options for new electric generation, with an unsubsidized levelized cost of $37-$81 per MWh, compared to NGCC at $61 -$87, coal at $66 -$151 , coal IGCC at $101 -$171 , and n uclear at $92 -$132 /MWh. The U.S. Energy Information Administration has also found that wind energy is one of the most affordable options for new electric generation. 124 The Lazard report also calculated that wind energy is the most cost-effective generation option for carbon abatement by a wide margin. Separately, an economic model AWEA created for its internal analysis of wind market opportunity finds that using renewable energy as a compliance tool will lower overall compliance costs with the Clean Power Plan by around $2 billion to $9 billion nationally, depending on natural gas prices, compared to a scenario without that renewable energy being available, as shown in the graphic below. A May 2013 report by Synapse Energy Economics found that doubling the use of wind energy in the Mid-Atlantic and Great Lakes states would save $6.9 billion per year on net, after accounting for all wind and transmission investment costs. 125 More than a dozen other studies confirm the finding that wind energy drives electricity prices down. 126 The Department of Energy

123 Lazard Levelized Cost of Energy Report, Version 8.0, September 2014, available at: http://www.lazard.com/PDF/Levelized%20Cost%20of%20Energy%20-%20Version%208.0.pdf

. 124 Available at: http://www.eia.gov/forecasts/aeo/electricity_generation.cfm

. 125 Synapse Energy Economics, The Net Benefit of Increased Wind Power in PJM, by Bob Fagan, Patrick Luckow, Dr. David White, and Rachel Wilson (Cambridge, MA, 2013) , a vailable at: http://www.synapseenergy.com/Downloads/SynapseReport.2013-05.EFC.Increased-Wind-Power- in -PJM.12-062.pdf

. 126 See, e.g., Annual Report: The Costs and Benefits of Renewable Resource Procurement in Illinois Under the Illinois Power Agency and Illinois Public Utilities Acts, available at http://www2.illinois.gov/ipa/Documents/April2012 -Renewables-Report-3- 26 -AAJ-Final.pdf ; Recent Electricity Market Reforms in Massachusetts: A Report of Benefits and Costs, available at http://www.mass.gov/eea/docs/doer/publications/electricity-report-jul12-2011.pdf ;102 | P a g e

estimates that under a scenario in which wind generation reaches 35% of energy by 2050, cumulative system costs from 2013

- 2050 for capital expenditures, oper ations and maintenance, and fuel costs across the entire power sector would decrease by $150 billion, primarily due to reduced fossil fuel consumption costs. 127 The Department of Energy estimates that with 35 percent of the U.S. power supply coming from win d by 2050, the nation would see electricity price savings of roughly 3 percent, or a $4 per MWh decline in prices. 128
W ind energy is affordable, and can be purchased under long

- term (15

- 25 year) contracts that offer stable pricing, a feature not available for non - renewable sources due to their fluctuating fuel prices. 129 Wind energy keeps energy prices low much like a fixed rate mortgage protects

European Wind Energy Association ,Wind Energy and Electricity Prices: Exploring the ‘merit order effect, available at http://www.ewea.org/fileadmin/ewea_documents/documents/publications/reports/MeritOrder.pdf (lists 6 studies); CRA, First two Loops of SPP EHV Overlay Transmission Expansion :Analysis of Benefit s and Costs, available at http://www.crai.com/uploadedFiles/ renewable energy LATING_MATERIALS/Publications/BC/Energy_and_Environment/files/Southwest percent 20Power percent 20Pool percent 20Extra

- High

- Voltage percent 20Transmission percent 20Study.pdf ; Synapse, The Potential Rate Effects of Wind Energy and Transmission in the Mi dwest ISO Region, available at http://www.synapse

- energy.com/Downloads/SynapseReport.2012

- 08.EFC.MISO

- T

- and

- Wind.11

- 086.pdf ; Duke University, Nich olas Institute, Renewable Energy in the S outh , available at http://s3.amazonaws.com/zanran_storage/www.seealliance.org/ContentPages/824124081.pdf ; NYSERD A , available at http://www.nyserda.ny.gov/P ublications/Program

- Planning

- Status

- and

- Evaluation

Reports/~/media/Files/EDPPP/Energy percent 20and percent 20Environmental percent 20Markets/RPS/RPS percent 20Documents/rps

- performance

- report

- 2009.ashx ; GE Energy, New England Wind Integration Study, availabl e at http://variablegen.org/wp

- content/uploads/2013/01/newis_report.pdf

. 127 DOE Wind Vision Presentation at 24. 128 These price estimates are dependent upon the volatility of f ossil fuel markets and so may be markedly higher if fossil fuel shortages occur or a carbon tax is enacted. DOE Wind Vision Presentation 2014 at 23. 129 The following quotes provide examples of utilities acknowledging the affordability of wind energy: “Wind Prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants. These projects offer a great hedge against rising and often volatile fuel prices.” David Sparby, president & CEO of Xcel Energy’s Nort hern States Power announcing 600 MW of new wind power contracts on July 16, 2013, available at http://www.greentechmedia.com/articles/read/wind

- power - said

- to

- beat

- natural

- gas - in

- midwest ; a n AEP subsidiary in Oklahoma tripled the amount of wind energy it planned to buy last year because “extraordinary pricing opportunities that will lower costs for PSO customers by an estimated $53 million in the first year of the contract s . .

. annual savings are expected to grow each year o ver the lives of the contracts.” available at www.nawindpower.com/e107_plugins/content/conte nt.php?content.12588 ; John Kelley, Alabama Power’s Director of Forecasting and Resource Planning stated : “These agreements [referring to contracts to purchase wind power] are good for our customers for one very basic reason, and that is, they save our cus tomers money.” available at http://www.renewableenergyworld.com/rea/news/article/2012/10/alabama

- power - wants

- more - affordable

- wind

pow er ; MidAmerican Energy’s 2013 press release after the Iowa Utilities Board approved the addition of 1,050 MW of wind generation in Iowa “ The expansion is planned to be built at no net cost to the company’s customers and will103 | P a g e

homeowners from interest rate spikes. As the Lawrence Berkeley National Lab reported, wind energy acts as a hedg e to keep energy prices depressed even if natural gas prices are low. 130 A graphic from another Lawrence Berkeley National Lab report shows how fixed

- priced wind energy becomes an even more economic option if one compares the costs of wind energy versus oth er fuels that have variable and increasing prices over the life of both generation options. 131
The following chart demonstrates that contracts signed for wind energy over the last several years all come in below EIA’s projected range of gas prices going forward.

AWEA has also conducted analysis quantifying the production cost and consumer benefits provided by wind energy in Independent System Operator areas, using grid o perator data

help stabilize electric rates over the long term by providing a rate reduction totaling $10 million per year by 2017 , commencing with a $3 .3 million reduction in 2015.” http://www.midamericanenergy.com/wind_news.aspx 130 Ern est Orlando Lawrence Berkeley National Laboratory, Revisiting the Long

- Term Hedge Value of Wind Power in an Era of Low Natural Gas Prices 21 (March 2013), available at http://emp.lbl.gov/site s/all/files/lbnl

- 6103e.pdf (“.

. . even in today’s low gas price environment, and with the promise of shale gas having driven down future gas price expectations

– wind power can still provide protection against many of the higher

- priced natural gas scena rios

. . .”). 131 Available at http://emp.lbl.gov/sites/all/files/2013_Wind_Technologies_Market_Report_Final3.pdf , page 62.104 | P a g e

and generation supply curve data provided by SNL Energy. The analysis for ERCOT found gross production cost savings of $973 million from ERCOT’s wind fleet in 2013, savings that expand to an annual average of $1.526 billion once the costs of natural gas price increases and volatility are taken into account. 132 The consumer benefits of wind energy from reducing electricity prices were found to average $1.187 billion annually over the life of ERCOT’s wind projects. Similar results were found for the Southwest Power Pool region, with gross production cost savings of $1.22 billion annually over the life of the wind projects, and annual consumer benefits of $1.95 billion. 133 Analyses of wind’s benefits in other grid operating areas are forthcoming.
D epartment of Energy data 134 show that states that use the most wind energy have tended
to have lower retail electricity prices on average tha n states that use less wind energy. The eleven states that produce more than seven percent of their electricity from wind energy have seen their load

- weighted average electricity prices fall by 0.37 percent over the last 5 years, while all other states have seen their electricity prices increase by 7.79 percent over the same time period. Between the end of 2008 and the end of 2013, these eleven top wind states more than doubled their operating wind power, increasing their wind capacity by 116 percent

.

e. Wind Energy is an adequately demonstrated resource, and large deployments are achievable because large quantities of w ind energy can be reliably integrated . Wind energy is also a reliable source of electric power. Dozens of wind integration studies in the United States and Europe have found that wind energy can supply at least 20

- 30

132 Available at http://awea.files.cms

- plus.com/ERCOT%20report%2011

- 7FINAL.pdf

. 133 Available at http://awea.files.cms

- plus.com/SPP%20report%20November%202014%20final.pdf

. 134 U.S. Energy Information Administration, El ectric Power Monthly with Data for November 2013 (January 2014), available at http://www.eia.gov/electricity/monthly/pdf/epm.pdf ; Additional analysis available in the AWEA report Wind Power ’s Consumer Benefits available at: http://awea.files.cms

- plus.com/AWEA percent 20White percent 20Paper

- Consumer percent 20Benefits percent 20final.pdf105 | P a g e

percent of electricity on the power system, 135 with some studies analyzing wind providing 40 percent or more of total electricity on an annual basis , all without any reliability problems

. 136 Wind energy currently accounts for more than 25 percent of the electricity in Iowa and South Dakota; in 9 states, wind energy provides 12 percent or more of the generation; and in a total of 17 states, wind energy provides 5 percent or more of the generation. 137 In addition, over the last year, at the regional grid operator level, wind energy has at times pr oduced 7 percent of the electricity in PJM, 17 percent in CAISO, 25 percent in MISO, 40 percent in ERCOT, and 33 percent in SPP. At times, Xcel Energy’s Colorado power system has obtained more than 60 percent of its electricity from wind energy.

135 The Eastern Wind Integration and Transmission Study, available at http://www.nrel.gov/docs/fy11osti/47078.pdf , and the Western Wind and Solar Integration Study ( http://www.nrel.gov/docs/fy10osti/47434 .pdf ) by the National Renewable Energy Laboratory are the largest of the U.S. studies, while more than a dozen state and regional studies have also been conducted, available at http://variablegen.org/resources/#!/3700/u

- s - regional

- and

- state

- studies

. 136 For example, the Nebraska wind integration study found that the Southwest Power Pool could reliably accommodate 40 percent wind energy at a very low integration cost of around $2/MWh, available at http://variablegen.org/wp

- content/uploads/2013/01/ne_study.pdf . NREL’s in

- depth Renewable Energy Futures study found that wind and solar energy c ould reliably provide nearly 50% of electricity, with total renewable energy providing 80% or 90% of electricity, available at: http://www.nrel.gov/analysis/re_futures/ Another example is the just

- r eleased Minnesota Renewable Integration and Transmission Study, which found that 40% wind and solar energy penetration in Minnesota is achievable, and that the variability associated with 50% wind and solar energy can also be reliably accommodated. This s tudy is available at: https://www.edockets.state.mn.us/EFiling/edockets /searchDocuments.do?method=showPoup&documentId={D607F B96

- F80C

- 49EE

- A719

- 39C411D5D7C3}&documentTitle=201411

- 104466

- 01

. 137 Available at http://www.awea.org/MediaCenter/pressre lease.aspx?ItemNumber=6184

.106 | P a g e

Figur e : Wind energy instantaneous output records

Some commenters have raised concerns about the impact of significant growth in variable generation like wind energy on essential services needed to maintain grid reliability. The reality is that in many cases renewable resources actually exceed conventional resources in their ability to provide and in their provision of essential reliability services. Wind turbines are able to provide services that help with frequency response, system inertia, voltage and freq uency ride

- through, voltage control, and other reliability needs. For example, as explained by the North American Electric Reliability Corporation, or NERC, wind and solar “may provide voltage regulation and reactive power control capabilities comparable to107 | P a g e

that of conventional generation.” 138 Wind plants meet a higher standard for and far exceed the ability of conventional power plants to “ride

- through” power system disturbances, which is essential for maintaining reliability when voltage and frequency dist urbances occur, such as when large conventional power plants experience forced outages. 139 All modern wind turbines have sophisticated power electronics that allow the turbine to provide significant voltage and reactive power control at all times, even when the wind turbine is not producing electricity. As illustrated by the actual power system data presented in the chart below , 140 wind turbines can significantly improve power system voltage stability, indicated by the fact that power system voltage is much be tter regulated when wind turbine generators (WTGs) are online than when they are not.

Regarding inertia and system stability, analysis by WECC in 2013 found that in a scenario with very high renewable penetration across the West, “the system results di d not

138 NERC, “Accommodating High Levels of Variable Generation,” April 2009, available at http://www.nerc.com/docs/pc/ivgtf/IVGTF_Report_041609.pdf , page 22

. 139 FERC Order 661A provides strict ride

- through requirements for wind turbines, requirements that do not apply to conventional generators and that many conventional generators are unable to meet. http://www.ferc.gov/whats

new/comm

- meet/052505/E

- 1.pdf 140 Miller, N., GE Presentation, June 2008

.108 | P a g e

identify any adverse impacts due to the lower system inertia or differently stressed paths due to the higher penetration of variable generation resources.” 141 Analysis conducted for the California grid operator identified no major concerns for frequen cy response in a transition to a high renewable future, finding that “ [n] one of the credible conditions examined, even cases with significantly high levels of wind and solar generation (up to 50% penetration in California), resulted in under

- frequency load shedding (ULFS) or other stability problems.” 142 Adding wind generation can increase total power system frequency response by causing conventional power plants to have their output reduced, which provides them with more range to increase their output and pr ovide frequency response. 143 In addition, new techniques employing wind plants’ sophisticated controls and power electronics enable wind plants themselves to provide fast

- acting frequency response. NREL recently released in

- depth analysis that concluded “w ind power can act in an equal or superior manner to conventional generation when providing active power control, supporting the system frequency response and improving reliability.” 144 The report further documented how major utilities like Xcel Energy are us ing this capability of wind plants in some hours to provide some

or all of the frequency response and regulation needed to maintain power system reliability, which has enabled Xcel’s Colorado power system to at times reliably obtain more than 60 percent of its electricity from wind energy.

141 Available at http://www.wecc.biz/committees/StandingCommittees/PCC/RS/RPEWG%20

- %20RS%20Meetings8

- 21

- 13/Lists/Minutes/1/VGSStudy7

- 15

- 13.doc 142 Available at http://www.caiso.com/Docum ents/Report

- FrequencyResponseStudy.pdf 143 http://web.mit.edu/windenergy/windweek/Presentations/G E%20Impact%20of%20Frequency%20Responsive%20 Wind%20Plant%20Controls%20Pres%20and%20Paper.pdf 144 Available at http://www.nrel.gov/docs/fy14osti/60574.pdf

.109 | P a g e

NREL also performed a study 145 on frequency response in the Eastern Interconnection, including in scenarios with high wind energy penetration, which found adding wind generation is unlikely to significantly reduce frequency response and can actually improve it. It should also be noted that many conventional generators currently provide little to no frequency response. NERC has explained that a failure of conventional generators to provide frequency response is the primary c ause of observed declines in system

- wide frequency response, while NERC explicitly notes that the growth of wind and solar is not responsible for the decline. 146 In sum, as EPA correctly recognizes in the Clean Power Plan, wind energy offers a highly afforda ble ( i.e. , economically achievable) and reliable means of reducing carbon emissions and, therefore, is rightfully incorporated into the BSER and made available as a compliance option

. B. Comments related to compliance issues. i. The crediting treatment of the interstate effects of renewable energy .
a. A state should be able to take into account all of the carbon emission reductions from renewable energy measures implemen ted by the state, regardless of where they occur , as long as the environmental attributes of t he energy are retired in that state . Renewable energy, along with the environmental attributes associated with it, is regularly sold across state boundaries. The ability to sell the environmental attributes of renewable power to buyers that will retire t he attributes for compliance or other purposes is a critical component of the business model of renewable energy developers. As discussed above, around 13,000 MW, or more than 20% of currently installed U .S. wind generating capacity, are under power purch ase

a greement s with a utility in another state. The Clean Power Plan, when finalized, should not

145 Available at: http://www.nrel.gov/docs/fy13osti/58077.pdf

. 146 Available at: http://www.nerc.com/files/FinalFile_Comments_Resp_to_Sept_Freq_R esp_Tech_Conf.pdf

.110 | P a g e

disrupt current and expanding interstate markets for renewable energy and associated environmental attributes or credits. These transactions contribute to co mpliance with state RPSs and other renewable energy policies. The Clean Power Plan offers states a number of options for the treatment of these emission reduction activities. AWEA concurs with EPA ’s proposed option that states may take into account all th e carbon emission reductions from renewable energy measures, consistent with existing state RPS policies , regardless of whether they occur in that state, as long as the environmental attribute of the energy is retired in the state

. In general, therefore , the implementing state or entity (i.e., the entity that created the measure that led to the production of the energy) should be able to claim the environmental attributes of purchased renewable electricity from out

- of

- state generation in its state complian ce plan.
b. A ccount ing for emissions reductions from low
- or zero emitting resources . N early every state experiences significant interstate power flows that cause a large share of the emissions reductions associated with renewable energy and other low

- or zero - emission

resources to occur in other states . As a result, accounting measures will be necessary during both the compliance plan development and approval phase and the compliance demonstration phase to ensure that the full emissions reductions associa ted with use of these resources are credited back to the entity making the investment and that other states cannot “free

- ride” on the emissions reductions that occur in their state due to renewable energy being used elsewhere. These accounting measures wi ll be needed under either a rate

- based or a mass

- based system, and for all

zero - and low

- emitting resources, as any state or region experiencing interstate power flows will face the challenge that a significant share of the emissions reduction benefits of any emissions reduction strategy occur outside of that state or region. Anything less than full crediting for the111 | P a g e

actual emissions reductions produced by the use of renewable energy will result in an inefficient outcome by skewing incentives, reducing the incentive for a state to use renewable energy to comply and allowing other states to do less than they optimally can to reduce emissions

. Fortunately, various accounting measures provide sufficient accuracy to make these accounting adjustments during bot h the plan development and approval phase and the compliance demonstration phase. These include marginal emissions calculations and power system modeling. EPA should allow the use of a simpler but less precise accounting method during the plan developmen t and approval phase, out of recognition of the fact that it is impossible to predict with any certainty how fuel prices, generator additions and retirements, and other factors affecting generator commitment and dispatch will change in the future. This co uld include allowing states to simply credit generation from a non - emitting resource at the state or regional average fossil emissions rate. More sophisticated but easily implementable approaches, such as a marginal emissions calculation, could also be use d. EPA’s AVERT tool is particularly
well

- suited for conducting such calculations with a combination of ease and accuracy , and the AVERT tool even allows the user to include forward

- looking information about expected generator additions and retirements. 147
F or the purposes of developing and evaluating state plans, EPA could even assist states by providing region

- wide quantifications of the emissions reductions produced by non

- emitting

resources . This would also avoid “chicken and egg” problems whereby the em issions reductions produced by one state’s compliance action will change due to power system changes caused by another state’s compliance action. By jointly assessing state plan and/or using regional modeling , EPA can also avoid some of these challenges.

147 Available at http://epa.gov/avert/

.112 | P a g e

Because more detailed empirical data will be available during the compliance time period for validating what and where emissions reductions have actually occurred, more precise accounting methods can be used. EPA’s AVERT tool is accompanied by annual upda tes to the underlying dataset that statistically determines which power plants had their output reduced by the addition of non

- emitting resources, so this updated data can be used during the compliance timeframe. Because this data for future years is obvi ously not available during the plan development phase, it would be sufficiently accurate to allow states to use the most recent year’s dataset for purposes of plan development and approval. Other approaches for a marginal emissions calculation or power sy stem modeling can also be made more precise and accurate during the compliance timeframe by incorporating empirical data on fuel prices and other factors aff ecting actual dispatch patterns

.

c. Different levels of credit should be awarded to different non
emit ting resource types based on each resource type’s output profile and the region to which its generation is physically delivered. The carbon emiss ion reductions provided by renewable energy and energy efficiency vary significantly depending on the time and location in which the resource is delivered. For example, a non

- emitting resource that produces more energy during off

- peak periods or in a region where coal generation is typically on the margin will produce significantly larger emissions reductions tha n a resource that produces on

- peak or in a region where gas generation is typically on the margin. Calculations using EPA’s AVERT tool confirm that emissions
reductions from a non

- emitting MWh in one region can be twice as large as those in another region

. The impact of location and time of production on emissions reductions should be accounted for during both the plan approval phase and also during the compliance phase. During113 | P a g e

the plan approval phase, states can use the emissions calculations tools des cribed above to quantify the expected emissions reductions from different resources, or EPA can provide standardized regional estimates for the emissions reductions from different types of resources. During the compliance phase, in the process of retiring a REC, a state or other entity should be required to demonstrate the type and region of the resource that produced the REC so that its emissions reductions can be properly accounted for. Information about the type and region of the resource should alread y be included in the provenance documentation that accompanies a REC, and energy efficiency measures are also likely to specify the type and region of the resource s being deployed, so this step should not require additional documentation beyond what alread y exists. When renewable energy produced in one region is physically delivered to another region, such as through a pseudo

- tie, dynamic scheduling, or a dedicated transmission line, the credit should be awarded based on the avoided emissions rate in the r eceiving region.

d. A tradable credit i ng approach for account ing for avoided emissions. When renewable energy is to be used for 111(d) compliance purposes, avoided emissions should be tracked using some common instrument to avoid double counting and underrep orting within and between states. RECs are the most effective instru ment to track renewable energy for the purposes of 111(d) and pr event the double counting that could otherwise occur under the proposed rule. RECs are an esta blished mechanism for convey ing renewable electricity attributes and the use of rene wable electricity to individual grid user s in the United States. They also convey avoided g rid emissions associated with renewable generation. In short, if RECs determine claims on renewable energy for 111(d) compliance (electricity is not required for renewable energy c laims for 111(d ) compliance), then t here is no double counting within 111 (d) and no double counting with RPSs and the voluntary market, provid ed that adjustments are made114 | P a g e

to rates and masses based on REC ownership and to true up the physical emissions reductions provided by renewable energy

. EPA correctly proposes to allow renewable energy regulations and programs that meet Evaluation, Measurement, and Verification ( EM&V ) requirement s to generate RECs , based on of the quantity of energy savings or renewable energy generation. Depending on the formula ultimately adopte d by states and EPA, this accounting credit should include both the MWh and emissions reductions associated with renew able energy. Based on the proposed rule, credits could be used by affected EGUs toward demonstration of complianc e with state rate

- based carbon emission limits within a particular region. Credits could also be issued on a program or project basis. State accounting for interstate emission effects would be done though a tradable credit market , or some other means, and determined based on credits held by affected EGUs. Under a tradable credit approach, credits sh ould be issued for all avoided carbon emiss ions resulting from applicable state plan measures, without regard to where t he avoided emissions occurred. Consistent with this approach, renewable energy actions that meet applicable requirements of quantification, monitoring, and verification would be issued tradable credits that could be applied by affected EGUs to their reported carbon emission rates when demonstrating compliance with an emission limitation in a state plan

. Because the tradable credit system would be limited to affected EGUs, use of the credits by these entities , when demonstrating compliance with rate

- based emission limits, would functionally apply the avoided carbon emissions to the state that was responsible for the measure , as long as the environmental attribute associated with th e energy was retired therein

. This approach would provide a clear policy signal and incentives that reward state actions that reduce EGU carbon emissions on a system

- wide, regional basis. We note that s ome state RPSs require that electricity from115 | P a g e

qualify ing renewable energy sources be produced within the state or a specified grid region, or if outside the states or region, that electricity be delivered to the state or grid region. However, EPA should not impose any such restrictions , as they are not nece ssary for purposes of verifiability , although states c ould be free to consider such limitations

. All

‐ generation tracking systems, where they exist, can also be used to calculate instate emissions from affected EGUs and to allocat e emissions, where these are regulated under state plans . Tracking systems are currently in existence in many regions of the country and can serve as a method of accounting for the transfer of renewable energy. If used properly, these systems could effectively avoid double count ing and aid states in demonstrating compliance with the rule.

 Example 1 : 148 W hen the renewable energy produced by in

- state renewable electricity generator is used to comply with renewable energy requirements , t he renewable energy produced is transferred fr om the generators to the l oad

- serving entity (LSE) in the same state

. T he LSE then retires the renewable energy credit and can use it for in state compliance. This can easily be tracked and accounted for using existing systems

.

 Example 2 : 149 When renewabl e g enerators in State A sell to LSEs in State B , the renewable energy credit , t hrough the tracking system , would be taken from one account and deposited into the LSE in State B. State B would then retire the renewable energy credit and be able to account f or it in State B.

148 Robin Quarrier and David Farnsworth, Tracking Renewable Energy for the US EPA’s Clean Power Plan: Guidelines for States to Use Existing renewable energy Tracking Systems to Comply with 111(d), Re gulatory Assistance Program, June 25, 2014, available at CRS_QuarrierFarnsworth_Tracking renewable energy forEPACleanPowerPlan_2014_JUL.pdf

. 149 Id

.116 | P a g e  Example 3 : 150 State C has a “capacity

- based” renewable requirement that generators are able to meet by claiming the installed capacity to the state regulator . There is potential for double counting here, if the State C generators sell

rene wable energy to State D, and the renewable energy credits are not taken out of the State C account. The rule should make clear that in this situation State C should not include capacity associated with renewable energy bought by the LSE
i n State D towards their 111(d) compliance

. EPA should not , however, dictate the form of the credit. State plans should be able to use renewable energy generated as part of a new or existing RPS program, as part of the voluntary renewable energy market, or as separate cre dits developed specifically as part of a Clean Power Plan state plan. EPA should be clear , though, that existing renewable energy and environmental crediting platforms

— including voluntary renewable energy tracking systems

— are acceptable tools, and that a ny new system must ensure that the same renewable MWhs do not generate credits that can be double counted.

e. Avoided emissions must not be disaggregated from RECs for 111(d) compliance. EPA should not constrain state policy as to whether credits are bund led with electric power or not. Such decisions should be left to the market and individual state policies. Furthermore, a voided emissions must not be disaggregated from RECs for 111(d) compliance. Disaggregating this benefit would not sim plify 111(d) com pliance since a tracking mechanism for avoided emissions would still be required. 151 Disaggregation would also disrupt RPSs, man y

150 Id

. 151 Most state definitions of RECs and green attributes support the use of RECs for tracking avoided emiss ions from renewable energy under 111(d), but, variations in state REC or attribute definitions should be not be used as grounds to disaggregate the REC or allow double counting of avoided emissions attributes under 111(d).117 | P a g e

of which are intended to help reduce emissions from electricity. If emissions are displaced out of
state a nd those avoided emi ssions remained in that stat e, the RPS and customers in the RPS state could not claim the full emissio ns benefit of their generation. As such, d isaggregation would limit the use of R PSs for 111(d) where RPSs allow unbundled RECs. Finally, d isaggregation (whether this involves creati ng a new instrument or not, but especially if it involves creating a new instrument) will increas e the costs of compliance for states, since they will have t o buy the new instrument on top of the RPS or otherwise obtain and pro bably pay for avoided emissions which are now separate from the REC.

f. The crediting of renewable energy must avoid double counting. The fundamental question with respect to the crediting of renewable energy is whether the generation creates emissions redu ctions either in state or out of state and whether these reductio ns have been allocated without double counting. Beyond this, for 111(d) purposes, it is not material whether the state with the REC (a voided emissions) also uses the electricity generated at the renewable plant. Renewable energy can be supported by multiple policies a nd by multiple states, but that doesn’t mean that each policy or state can count (i.e. , adjust their rate or reflect in their mass) the same generati on or benefits (reductions) for 111(d). In other words ,

a single REC must not be counted for multiple states’ 111(d) compliance (e.g., in multiple state RPSs), under multiple state p rograms within a state plan, or by multiple comp liance entities within a state.
EPA should attempt to prevent double counting of renewable energy before it occurs, as it undermines the intent of the regulations. And, it will be hard to address double counting after it has occurred and state plans have been approved. To that end, EPA should cross refer ence state plans to check for double counting and duplicative standards where there is known trading118 | P a g e

of electricity across state boundaries

. EPA can also account for the expected interstate impacts of renewable energy on the emissions of EGUs when reviewi ng and approving plans, particularly by jointly assessing state plan and using regional modeling

. For example , a state whose fossil generators will have their output reduced by renewable generation from another state should not be allowed to use a complia nce plan that relies on reducing the output of its fossil generators due to that renewable energy

. Responsibility for the generati on must be allocated or divided such that there is no double counting

. I t is possible that two states will both seek to c laim credit for the same renewable energy MWhs (double counting) , and such uncertainty may delay or im pede renewable energy projects and the approval of state plans. Double counting can also occur between states due to rate

‐ and

mass ‐ based compliance and interstate effects of renewable generation. Mass

‐ based reporting
will automaticall y reflect the impact of trading electricity, and in turn, states using a mass

‐ based approach will ref

lect the activities of neighboring state s. Thus, if only the location of renewable
energy and displaced gen eration determines claims on renewable energy for 111(d) compliance and RECs are not used to track avoided emissions for 111(d)), t here is likelihood for double counting or under reporting if trading states don’t use the same reporting method (rate or mass)

. For example, a state using rate

‐ based reporting uses in

‐ state renewable energy to adjust its rate (using either avoided emissions or MWh crediting) while a neighboring state using mass

- based reporting in the same power pool also reflects avoided emissions associated with that renewable energy in its mass total. This can be avoided by using RECs in combination with the interstate emissions accounting and true

- up methods discussed above.119 | P a g e

In addition, double counting may arise where a voluntary buyer 152 of RECs uses the REC for its own benef

it, but then a state or affected EGU seeks to claim the benefit of the same MWh of renewable electricity. For instance, there would be a potential for double counting wit h RPSs and the voluntary market when ever RECs (used in RPSs and the voluntary market) and displaced
gener ation are not in the same state. 153
A. EPA should provide clarification to avoid double counting . While we think EPA’s proposal is generally on the right track regarding the crediting of renewable energy, the lack of clarity in the propos ed rule as to the approaches EPA will require and approve for crediting interstate sales is already creating uncertainty for project developers and buyers. AWEA urges EPA to finalize the Clean Power Plan with clearer and more certain treatment of out

- of

- s tate renewable energy, consistent with our suggestions herein. EPA’s statement that “a state could” count out

- of state renewable energy creates uncertainty as to whether EPA will only approve state plans that allow for the interstate transfer of renewable attributes , or whether states may develop plans that mandate that the environmental attributes of renewable generation within the state be used for that state’s compliance. 154 EPA’s failure to specify acceptable and unacceptable attribution approaches also introduces significant uncertainty as to how conflicts among states will be resolved. Without clear crediting rules, it will be hard to distinguish whether renewable energy generated in a state is due to measures implemented by another state , as a result of a policy in the

152 Voluntary buyers purchase renewable above the minimum standards required by government regulations, and just like a buyer in an RPS market, a voluntary customer purchases the exclusive rights to claim that REC for itself. 153 The renewable energy industry in the United States has been boosted by a vibrant voluntary market for RECs. According to NREL, i n 2012, total retail sales of renewable energy in voluntary purchase markets exceeded 48 million megawatt

- hours (MWh) and represented approximately 1.3% of t otal U.S. electricity sales. J. Heeter and T. Nicholas , Status and Trends in the U.S. Voluntary Green Power Market, National Renewable Energy Laboratory (2012 Data)

. 154 Clean Power Plan at 34922.120 | P a g e

state where generation is located , or for non

- policy (e.g., market ) reasons. For instance, a state compliance plan that claims credit for in

- state renewable energy generation even when the environmental attributes are sold out

- of

- sta te could introduce significant un certainty into the marketplace, the 111(d) compliance process, and may lead to the double counting of renewable
energy. In order to clear up this uncertainty and avoid the conflict between states seeking to count the same r enewable electricity as part of their compliance plans, EPA should provide more defined guidance. EPA should provide clarification on how states should avoid double counting in instances in which one state claims credit for emissions reductions caused by renewable generation and another state that holds the environmental attributes of the same energy also claims credit. To that end, AWEA recommends that the Clean Power Plan encourage states to develop or participate in an environmental crediting accounti ng system for renewable energy. Under such a system, REC ownership would determine the claim on avoided emissions fr om renewable energy for 111(d). For state renewable policies that do not current ly involve the transfer of RECs (e.g. , performance tax inc entives, ne t metering, R&D support, etc.), states will need to “add” accounting u sing REC ownership in order for the renewable energy to be assigned to these diffe rent policies and counted under 111(d). These policies have not historically involved the
tr an sfer of RECs (or attribute claims of any kind necess arily) because the benefiting renewable
energy or attributes/benefits were not being clai med or counted toward a target, but 111(d) creates the need for a com mon instrument across policies. States need not change these programs to require the transfer of RECs, provided that the RECs retired in a sta te are not also counted toward another mechanism or policy being used for 111(d) compliance

.121 | P a g e

EPA should encourage any state wishing to use renewable energy MWhs to demonstrate compliance with its state goal to establish an environmental attribute credit accounting system. Each unit (e.g., MWh) of renewable energy would generate an environmental attribute credit originating with the project. The state where that credit is ultimately retired would be the state able to count the credit towards demonstration of its compliance with its target

. Thus, r enewable energy generation would be associated with credits regardless of the contractual arrangement regarding the electricity

— including bilateral contracts, participation in wholesale markets, utility

- owned renewables, distributed generation, or other instruments. Because renewable
energy tracking system s follow the credit from the point of issuance to retirement , including all interim transactions, it minimizes the opportunity fo r renewable energy to be double counted

. States could use such a system to allow private actors to contr act for environmental credits associated with renewable power, letting the market determine the best use of the credit. EPA should thus provide guidance that RECs for 111(d) complia nce should be identified in a tracking system and retired on behalf of 111(d) compl iance or a state mechanism that has been included in the state plan. T he state must demonstrate to EPA sufficient REC retirement to satisfy the RPS or other measure included in the state plan. This does not r equire that the retiring party, e.g. LSEs or individual generation owners/use rs complying with the RPS, have a 111(d) compliance obligation. Tracking systems can identify RECs that have been included in a state plan

. RECs for 111(d) compliance should not be tracked separately from other RECs, but rather shoul d be tracked using existing renewable tracking sy stems already in place covering the country. If a state chooses not to use a REC tracking system , EPA should only allow a state to include renewable energy MWhs in its compliance plan if it can demonstrate that an entity in that122 | P a g e

state has submitted environmental attrib utes (i.e., credits) for those MWhs. Therefore, f or states that choose not to include a crediting policy as part of their compliance plan, EPA should establish a default rule whereby a state wishing to count renewable power in demonstrating compliance wit h its target should demonstrate

— through clear contractual agreements

— that the holder of the environmental attribute associated with that power is located in that state. In addition, EPA should ma ke clear that state plans do not alter current contractual a greements between renewable energy project developers and purchasers of power and/or environmental credits

. Similarly, i n order to account for voluntary REC purchases in rate

- based state plans, EPA should provide guidance that the party claiming 111(d) com pliance benefits must own and retire the associated REC. In order to account for voluntary REC purchases in mass

- based plans, EPA should provide guidance along the lines of California’s practices in it s AB 32 cap and trade
program. California has enacted a voluntary renewable energy p rogram that retires emission allowances equivalent to the avoided emissions associated with voluntary REC purchases. 155 RGGI’s cap and trade program has also adopted allowance set

‐ asides for voluntary renewable energy purchases to ensure that this benefit is retained for the voluntary market in that region. The retirement of these allowances ensures that the owner of the REC is able claim the emission reduction benefits from their purchase. In the absence of this allowance retirement, parties other than the REC owner would be able to claim the benefits of the REC’s avoided emissions, thereby negating the emissions reductions benefi ts owned by the REC purchaser.

155 See California Air Resources Board, Chapter 7: The Process for Retiring Allowances from the Voluntary Renewable Electricity Reserve Account (Apr. 2012), available at http://www.arb.ca.gov/cc/capandtrade/guidance/chapter7.pdf

.123 | P a g e

EPA should also p rovide guidance regarding the r equirements for RECs under 111(d) and adjustmen ts to rates and masses to avoid double counting of renewable energy. Adjustments to
rates caused by renewable energy must be limited to renewable energy generation that has avoi ded emissions at affected EGUs, (as a result of which the re has been an actual reduction of emissions at an affected EGU), that has not be en double counted, and that was included in the state plan. EPA should also provide that no adju stments be made to ra tes for renewable energy without RECs and for renewable energy not included i n a state plan. EPA should also provide clarity that it will require an upwa rd adjustment to masses for renewable s without RECs (both
power that is imported without the RECs and in

‐ state renewable generation where RECs are sold out of state) and fo r renewable energy not included in a state plan. Unless the renewable energy is included in a measure in its plan and it has the RECs, a mass

- based state must demonstrate that renewable energy is not affecting the mass in order to avoid adjustment of the mass. Further, EPA should signal that e ven under a mass

‐ based approach, adjustments will be necessary to
addr ess interstate effects, such as when measures undertaken pursuant to one sta te’s plan are
exp ected to be associated with decreases in fossil fuel

‐ fired generation and carbon emissions in another state. Adjustments for renewable energy can be applied on a statewide basis as an adjustment to the statewide rate after the rate has be en calculated. This was the method used by EPA for calculations of proposed state goals. Adjustments for renewable energy could also be applied to individual EGUs’ rates, provided there is no double counting, since the renewable energy MWh wouldn’t be us ed to support anyone else’s compliance and someone else’s rate or mass would be going up or not allowed to go down as a result. Mass

‐ based multi

‐ state regions must also make similar adjustments as mass

‐ based states since even multi

‐ state regions are not isolated. For124 | P a g e

example, even though RGGI is effectively one big mass

‐ based state, because there is trading between RGGI and surroundin g states, particularly the RGGI states in PJM, there could be double counting between RGGI and these states unless RGGI adjusts its mass to account for imported and exported renewable energy and renewable energy not included in the multi

‐ state plan.
g. States should be able to distribute avoided emission credits how they see fit if they enter multi
- state or regional agreements to do so.
AWEA agrees with EPA’s proposal that multiple states should be allowed to come to agreements amongst each other as to how th ey will distribute the avoided carbon emissions from state plan measures across their respective EGU fleets. In particular, states should be able to address the crediting of the interstate effects of renewable energy through cooperative agreements between states and regional determinations. This gives flexibility to the states to choose from a variety of pathways to credit emission reductions in a manner that best addresses how they want to distribute credits , and likely will encourage multi

- state/regiona l compliance approaches.
S tates that are parti cipating in multi

- state plans should thus be able to distribute carbon emission reductions among states in the multi

- state area, as long as the total carbon emission reductions claimed are equal to the sum o f each state’s in

- state emission reductions from renewable energy measures. Similarly, states should be able to jointly demonstrate carbon emission performance by affected EGUs though a multi

- state plan for a coterminous electric grid region, in which cas e, attribution among states of emission reductions from renewable energy measures would not be necessary. In this manner, avoided carbon emissions are distributed among states by an agreed upon formula they derive. For example, an accounting “credit” in125 | P a g e

one state for out

- of

- state avoided carbon emissions is complemented by an accounting “debit” in
the other state where the avoided carbon emissions occurred (e.g., through an increase in reported carbon emissions or carbon emission rate). Ultimately, a re gional credit market could be premised on an agreement between the states, that the accounting of interstate effects would be based o n prices in the credit market. This approach would potentially avoid double counting of emission effects of state measures among participating states. AWEA believes that these modifications and clarifications to the proposed rule w ould resolve the uncertainty created by the proposed rule and provide a strong signal to renewable energy developers and purchasers that their exi sting and future contracts for the environmental attributes of the energy will be honored. We also request that EPA encourage the expansion of the existing framework for tracking/crediting renewable energy to an even larger footprint in order to further e nable the verification and quantification of emission reductions from renewable
energy . In sum, AWEA recommends that the Clean Power Plan encourage states to develop or participa te in an environmental crediting accounting system for renewable energy

. If a state chooses not to do so, EPA should only allow a state to include renewable energy MWhs in its compliance plan if it can demonstrate entities in the state have submitted environmental attributes (i.e., credits) for those MWhs. AWEA believ es that these modifications should resolve the uncertainty created by the proposed r ule and provide a strong signal to renewable energy developers and purchasers that their existing and future contracts for the environmental attributes of the energy will be honored. We also note that c ustomers in many states purchase renewable generation from out of state for reasons other than compliance with a state RPS or other regulatory requirements, such126 | P a g e

as reducing electricity costs, diversifying supply, or meeting corporate su stainability commitments. In some cases renewable generators sign bilateral contracts to provide purchasers of energy from renewable generation with all current and future environmental attributes associated with that energy (bundled renewable energy )

. H owever, t he proposed r ule say s little about how states with renewable energy policies that do not include a renewable energy trading system can account for renewable generation in demonstrating compliance with the state goals. For instance, p ower purchase agreements (PPA s ) for out

- of

- state renewables under a state

appro ved integrated resource plan should be able to be used as a compliance option

. The final rule should clarify all of these issues.

ii. Timing issues related to state compliance. The challenge inherent in predicting the technological progress that will take place by 2030 and beyond cre ates several issues in the Clean Power Plan

. AWEA is concern ed that the proposed plan, based on timing issues, might fail to achieve emissions reductions as fast or as deep as are possible. Our concern stems from the considerable flexibility the proposal give s to states with respect to timeframes for plan development and implementation

. G iven the rapid rate of improvement in renewable energy, as well as other e nergy technologies , any 2014 EPA projection of emission reduction potential in 2030 is likely to underestimate the technological improvements and associated cost reduction s for renewable
energy .
a. EPA should follow the proposed compliance time frame.
EPA should also follow the requirements of the implementing regulations, and not extend the proposed timetables unless the state has a valid reason for an extension. At a minimum, states should file an initial proposal within one year and then can submit thei r complete plans to127 | P a g e

EPA if they get an extension. This approach for compliance timing is reasonable and appropriate and would best support the optimization of overall carbon reductions consistent with the statutory requirements. Accordingly , AWEA does no t support EPA’s alternative option, a 5

- year period for compliance, in combination with a less stringent set of carbo n emission performance levels

. AWEA firmly believes that e xisting state programs could immediately play a role in helping to achieve thi s rule’s propos ed emission performance levels; thus for many states , development of compliance st rategies need not wait for over five years from the plan’s

announcement. In anticipation of this proposal, many states were already contemplating design
strat egies that would achieve carbon reductions equivalent to those that could be required by Section 111(d) emission standards. EPA recognizes that, with many measures, states can achieve emission reductions in the short

- term . H owever , we take issue with EP A’s conclusion that renewable generating capacity can take longer than other methods to ramp

- up . Renewable energy, such as wind, is rapidly scalable and deployable. Land

- based wind power is readily available for development, and totals more than 8 ,000 ,00 0 M W of potential capacity in the United States , enough to meet the total electricity needs of the U.S. more than 7 times over

. 156 The wind industry has seen tremendous growth in the past decade , increasing from 6,723 MW of installed capacity in 2004 to 61, 946 MW in 2014, 157 and shows continued growth with 1 3 , 6 00 MW under construction as of the end of the third quarter of 2014

. 158 As explained above, EPA grossly underestimates the ability of renewable energy to be quickly installed and integrated into the grid as a compliance measure

.

156 DOE, 20% Wind Energy by 2030, 2008, available at http://20percentwind.org/report/Chapter1_Executive_Summary_and_Overview.pdf

. 157 U.S. Wind Industry Fast Facts, http://www.windenergyfoundation.org/about

- wind

- energy/us

- wind

- industry

- fast

facts

. 158 Id.128 | P a g e b. EPA should engage in interim r eview s and m ilestones for state plans to ensure they are on course. AWEA supports EPA’s decision that a state plan should include a process for reporting on plan implementation, progress toward ach ieving carbon goals, and implementation of corrective actions, if necessary. In addition to demonstrating the projected plan performance will meet the interim goals, state plan s should contain milestone requirements for tracking actual plan performance du ring implementation. For plans that do not include enforceable requirements for affected EGUs that ensure achievement of the full level of required emissions performance and interim progress, the state plans should be required to include periodic program implementation milestones and emission performance checks, and include corrective measures to be implemented if mid

- course corrections are necessary. Further i nterim emission performance checks durin g the plan’s performance period and
milestones should b e added in the final rule to ensure that states are on the trajectory of meeting their final targets. To that end, we support EPA’s alternative proposal with respect to this issue , under which , in addition to submitting a plan demonstrating emission per fo rmance through 2030,
states w ould be required to make a second submittal in 2025 demonstrating that their plan

m easures will achieve the level of emission performance required in 2030

. If the plan is not on course to do so, the state submittal sh ould be r equired to strengthen or add to measures in the state plan to the extent necessary to achieve that level of performance. States should report the reasons for deficient performance and should be required to implement corrective measures if actual emission performance is inferior to the projected performance by eight percent or more , as proposed

. A lower percentage would allow even earlier identification of a trajectory that is falling short of targets

. State l egislative and/or regulatory action to adopt corrective measures after a deficiency is discovered will take129 | P a g e

significant time; therefore, state processes to activate corrective measures should be triggered earlier if corrective measures are not adopted in regulation and ready to implement. This allow s for a faster and more efficient approach and ensures compliance by the target date. For plans without corrective measures adopted into regulation prior to complete plan submittal, a higher percent emission performance de viation trigger is appropriate.
E PA propo ses that some types of plans would be “self

- correcting” in that they would inherently assure interim performance and full achievement of the state plan’s required level of emission performance through requirements that are enforceable against affec ted EGUs. AWEA
agrees that self

- correcting plans do not need to contain interim milestones consisting of program implementation steps because these state plans would require both interim progress and achievement of the full level of required emission perf ormance in a manner that is federally enf orceable against affected EGUs. For plans that are not self

- correcting, EPA proposes that the state plan must identify periodic program implementation milestones (e.g., increase in portfolio percentage requirements under a renewable portfolio standard) that are appropriate to the programs and measures included in the plan. AWEA agrees that if, during plan implementation, a state were to miss program implementation milestones in its plan, it should report the delay t o EPA, explain the cause, and describe the steps the state will take to accelerate subsequent implementation to achieve the planned improv ements in emission performance. EPA should promulgate a mechanism under 111(d) similar to the SIP call mechanism in Section 110. Under this approach, after the agency makes a finding of the plan’s failure to achieve the state goal during a performance period, EPA would require the state to cure the deficiency with a new plan within a specified time period (e.g., 18 mon ths). If the state still130 | P a g e

lacked an approved plan by the end of that time period, EPA would have the authority to promulgate a federal plan under Section 111(d)(2)(A).

iii. State compliance considerations.

a. EPA correctly uses e xisting carbon reduction framework s and recognizes the interconnected nature of the grid for reducing carbon emissions. AWEA believes that EPA’s reliance on existing carbon reduction frameworks and the interconnected nature of the electric grid create s an effective means to reduce carbon emissions from existing fossil EGUs. EPA has appropriately provided a flexible framework for compliance with carbon emissions reduction plans and builds upon existing company, state, and regional approaches. As such, t hese plans can continue to rely on t he interconnected nature of the grid to reduce carbon reductions from fossil fuel

- fired EGUs , including by flexible state approaches such as market

- based instruments, interstate trading, and regional approaches

.

b. EPA should consider non - air environmental impacts when approving compliance plans. Under Section 111(d), state plans must establish standards of performance that reflect the degree of emissions limitations achievable through the application of BSER that takes into account not only the costs of pe rformance but also any non

- air quality health and environmental impacts and energy requirements. While non

- air health and environmental benefits are discussed as they pertain to building block s 1, 2, and 4, EPA minimizes the broader positive environmental and public health benefits of renewable, pollution

- free energy generation, such as wind energy . In particular, even though EPA acknowledges that generation from renewable energy, including wind energy, has associated non - air health and environmental benef its, the agency does not state that it will factor these benefits in to its review of state plans

.131 | P a g e

AWEA believes the fact that wind energy should be given consideration in the agency’s
review because it s generation produce s no solid waste, require s no co oling water, and lacks a fuel supply that brings its own environmental and health impacts , in addition to numerous other non

air health and environmental benefits

. DOE has stated that wind power has the potential to reduce national electric

- sector water w ithdrawals (6 percent in 2020, 15 percent in 2030, 20 percent in 2050) and consumption (6 percent in 2020, 16 percent in 2030, 28 percent in 2050) , which helps reduce competition for scarce water resources in water

- stressed areas . 159 Indeed, these benefits are one of the driving reasons for the broader implementation of renewable generation, alongside the reduction of carbon emissions. Specifically, EPA should ensure that state compliance measures do not impose greater non - air health and environmental benef its than would be the case if, for example, renewable generation were used as a compliance tool rather than switching to another energy source .

iv. EPA should clarify what the term renewable energy “measures” encompasses. EPA states that the definition of an : E xisting state program, req uirement, or measure means, in the context of a state plan, a regulation, requirement, program, or measure administered by a state, utility, or other entity that is currently established. This may include a regulation or other l egal requirement that includes past, current, and future obligations, or current programs and measures that are in place and are anticipated to be continued or expanded in the future, in accordance with established plans. An existing state program, require ment, or measure may have past, current, and future impacts on EGU carbon emissions

. 160

However, EPA never defines what “measures” constitutes even though it uses it to mean something separate from a state “program” in many instances throughout the plan. While we

159 DOE Wind Vision 2014 Report at xxxiv. 160 Clean Power Plan at 638

.132 | P a g e

support a broad definition of that term, EPA should clarify, from a compliance perspective, what types of measures might constitute a “measure” as long as it is incorporated into a state plan.
AWEA seeks clarification in the final rule as to whe ther “measure” can be merely included in a state plan to make it a “legal requirement.” EPA should also clarify the standard for “legal requirement” so that it provides flexibility for bilateral contracts to be used as compliance tools, as long as they ar e enforceabl e at the state or federal level.

v. Incorporating renewable energy m easures under a rate
- based approach. AWEA supports EPA’s proposal that renewable energy measures may be incorporated into a rate

- based approach through an adjustment or tradable credit system applied to an EGU’s reported carbon emission rate. We also support EPA’s alternative approach to provide an adjustment based on the estimated carbon emissions that are avoided from the power pool or identified region as a result of renewable energy . This approach implicitly assumes that the avoided carbon emissions come from the electric power pool or other identified region as a whole, rather than an individual EGU. As an alternative to EPA’s proposed approach of allowing a broad range of renewable
energy programs to be included in state plans, provided that supporting evaluation, measurement, and verification (EM&V) documentation meets applicable minimum requirements, EPA is requesting comment on whether guidance should limit consideratio n to certain well

- established programs, such as those characterized in Section 4.2.1 of the State Plan Considerations TSD. AWEA strongly discourages EPA from limiting the type of renewable energy “measures” that may be considered as compliance tools. By placing limitations on the types of renewable energy measures considered, EPA establishes a more onerous burden on states to comply with EPA133 | P a g e

mandates and impairs the ability of building block 3 to be implemented to its full potential as a low

- cost means of reducing carbon emissions

.

vi. States should be able to comply under either a rate - based or mass - based plan approach as long as equivalency is ensured . AWEA s upport s that a mass

- based goal should be approvable based upon a demonstration that the state’s p lan would achieve equivalent stringency, including compliance timing, to the state

- specific rate

- based goal set by EPA

. As outlined above, that should include truing up actual load growth to that projected in a rate

- to mass

- based conversion to ensure
equ ivalent stringency. We also s upport EPA’s finding that renewable energy measures may be incorporated into a rate

- based approach through an adjustment or tradable credit system applied to an EGU’s reported carbon emission rate

. Under such a process, measu res that avoid carbon emissions from affected EGUs, such as quantified and verified renewable energy generation, could be credited toward a demonstrated carbon emission rate for EGU compliance purposes or used by the state to administratively adjust the av erage carbon emission rate of affected EGUs when demonstrating achievement of the required rate

- based emission performance level in a state plan

. AWEA believes that c redit should be provided as an adjustment based on the estimated carbon emissions that a re avoided from the power pool or identified region as a result of renewable energy measures . This approach should implicitly assume that the avoided carbon emissions come from the electric power pool or other identified region as a whole, rather than an individual EGU

. The avoided carbon emissions should be determined based on the MWh saved or generated and then multiplied by a carbon emission rate for the power pool or region

. This carbon emission rate should be based on the average or marginal emissio n rate in the power pool134 | P a g e

or region, or should be based on the emission rate that represents the required rate

- based emission performance level in the plan

. EGUs should be able to comply with a carbon emission rate limit in part through the use of credits f

or actions that avoid carbon emissions from affected EGUs

. If a state is implementing a portfolio approach, then the state should administratively adjust the average carbon emission rate of affected EGUs through a similar process, provided that the carbon

- avoiding measures are enforceable elements of the state plan

.

vii. EPA should issue guidelines for s tates . AWEA s upport s the Clean Power Plan’s inclusion of greater detail on approvability criteria, requirements for state plan components, the process and tim ing for state plan submittal , and the process and timing for demonstrating achievement of the carbon emission performance level in the state plan . AWEA also s upport s that the proposal provide s for more guidance to states on options for meeting the state

- s pecific goals established by EPA in a flexible manner that accommodates a diverse range o f state approaches. EPA should provide clarity as to the technologies that can be used as compliance options, provide guidance on incorporating them into state plans , and factor them into the BSER. While EPA should provide as much specific guidance as possible on approva ble measures and policies, it should also reiterate and make clear that additional measures and policies can be approved even if not specifically nam ed in the Clean Power Plan. This guidance should contain as many default approvable policies as possible and criteria on which additional state policies will be evaluated. The Clean Power Plan notes that there is a broad range of compliance options avai lable to states as they develop their implementation plans. Natural gas, renewable energy, nuclear,135 | P a g e

energy efficiency, transmission and distribution improvements, and energy storage are listed as options. While EPA has indicated that states ca n propose o ptions outside of that list, there is a great deal of uncertainty as to what other options EPA might allow. In the final rule, EPA should explicitly recognize the technologies that can serve as compliance options and provide guidance to states on the use of these technologies in compliance plans. Furthermore, to the extent EPA expands the available compliance options, the emissions reductions that can be provided by those

resources should also be factored into the BSER in order to ensure symmetry

. In pa rticular, EPA should put forth a model rule for an interstate emissions credit

- trading program that could be easily adopted by states who wanted to use such a program for its plan. This will help states establish a sensible trading and ceiling policy that is in compliance with EPA requirements

.

EPA should permit and encourage multi
- state/regional plans. viii. AWEA supports EPA’s proposal for states to be allowed to develop multi

- state /regional compliance programs. S uch regional approaches could offer cost

- ef fective carbon solutions and allow for multi

- state coordination to address compliance issues

. Multi

- state compliance plans help deal wi th technical challenges such as cross - state power flow and crediting and they simplify the work of businesses by decreas ing the number of markets created and increasing t he size of each region . R egional approaches would also lower implementation costs

. EPA’s proposal that only one multi

- state plan c ould be submitted on behalf of all participating states should help encoura ge the adoption of such approaches. But, s tates participating in a multi

- state plan should also be given the option o f providing a single submittal for their respective state . We su pport the proposal that if a state develops a plan that includes a multi

- state approach, it would have additional time to submit a complete plan. While compliance136 | P a g e

timeframes should be as short as possible, giving more time in this respect could serve to incentivize more states to embrace a multi

- state approach

. AWEA also suppo rts EPA’s effort to encourage cooperation and urges EPA to further help states see the benefits of engaging in regio nal compliance discussions. We also encourage EPA to make clear that states need not form full multi

- state compliance plans to benefit from regional coordination. Multi

- state agreements on discrete issues

— such as the treatment of interstate renewable energy flows and related accounting and compliance issues

— can help reduce interstate conflict. Such plans also simplify compliance obligations and market structures for businesses operating in multiple states and increase market transparency and competition, ultimately leading to lower implementation costs. EPA should provide states a clearly approvable avenue to realize the benefits of issue

- s pecific mult i

- state agreements even if they cannot come to an agreement on drafting a comprehensive multi

- state compliance plan. For instance, we urge EPA to provide states an avenue to form and join multi

- state compliance plans over time

—

potentially as p art of the regular Section 111(d) review cycle proposed herein

. State plans should specify r eporting r equirements . ix. AWEA agrees with EPA that a state plan should specify appropriate periodic reporting requirements for each affected entity in a state plan that will be electronically reported a t least biennially and disclosed on a state database accessible by the public and EPA. Reports should be submitted directly by the affected entities to EPA, as well as to the state.

Alternative compliance payments (A CPs) should not be a compliance tool. x.
Many states allow a n RPS compliance alternative which requires obligated entities to pay a predetermined fee to the state for each MWh of RPS shortfall. Although these ACP payments may be directed to programs to p romote the deployment of renewable energy technologies, these137 | P a g e

payments are not equivalent to renewable energy generation and should not be counted as such in state plans. Accordingly, we agree with EPA that ACPs should not be a compliance option.

EPA shou ld explicitly allow for carbon pricing as a compliance option. xi. AWEA believes that EPA should allow for regional assignments of carbon pricing as a “beyond

- the

- fenceline” approach to state compliance. In order to clarify the use of this compliance, EPA s hould consider drafting a model rule for states on the adoption of regional or
state

- wide administered carbon pricing schemes. This approach could look to use existing energy market infrastructure, such as RTOs and ISOs, to achieve emission reduction targ ets while ensuring reliability and minimizing cost impacts. The goal would be to disincentivize the dispatch of higher emitting plants and correspondingly incentivize the dispatch of lower

- emitting

resources . This approach would utilize the existing mar ket structure to determine the least

- cost compliance solutions on a regional level and automatically account for factors affecting compliance costs, such as operational constraints of plants, transmission congestion, and the timing and magnitude of previou s investments and retirements. This approach would also explicitly reflect reliability contributions of plants , as it would fit within the current organized market bidding procedures, which consider reliability concerns when dispatching. This could be don e, for instance, by translating carbon emission reduction targets proposed by EPA into targets for regional power markets (RTOs/ISOs), applying those reductions through a market

- administered carbon price to the existing processes for economic dispatch of electri c generation within the market. Under such an approach , the market would charge carbon

- emitting power plants a t a rate per ton of carbon emissions; thus, plants with higher carbon emissions would face a higher charge per megawatt

- hour produced.138 | P a g e

Setting the carbon prices would necessarily incorpo rate short

- term and long

- term operational and reliability concerns, while ensuring that the prices are sufficiently high to achieve the required emissions reductions. The carbon price would also be reflected in wholesale prices, which would send an efficie nt price signal to both buyers and sellers in the wholesale power market. By adding appropriate carbon prices to the bids of individual generators, lower carbon

emitting resources will be dispatched more frequently than higher carbon

- emitting resources an d also will enjoy higher generator energy margins

. Given that RTOs/ISOs often have the best insights into the resources needed to ensure reliable supply of electricity, they should likely be involved in the analytical efforts . AWEA believes that allowin g states to implement carbon prices administered by an independent not

- for

profit entity could provide for a predictable and stable system of carbon pricing, thus reducing uncertainty for all market participants. RTOs/ISOs currently already implement a le ast

- cost approach to dispatch subject to reliability constraints; thus, carbon pricing could be more efficient than direct control of individual generation sources. AWEA believes that a regional carbon price will be more efficient than “state

- by

- state”

c arbon pricing approach and would likely lower the average cost to consumers of meeting the requirements of Section 111(d). The ability to use a regional carbon pricing initiative as a compliance tool could also provide states with an alternative, market

- b ased approach to complying with such regulations and would leave the compliance

- related investment decisions in the hands of market participants, potentially reducing total compliance costs. For these reasons, AWEA urges EPA to allow for regional carbon pricing as a compliance tool for states in reducing their carbon emissions and asks that EPA prepare a model rule for state compliance through such pricing initiatives.139 | P a g e Banking: EPA should give credit to new emission reductions from xii. actions taken after Ja nuary 1, 2014, as long as they are part of a submitted compliance plan. The Clean Power Plan only gives credit to emission reductions that occur during the interim compliance period (2020

- 2029) or beyond. This approach could significantly distort the

marketplace for renewables in the near term. I t could encourage states and/or developers that otherwise would implement new renewable energy measures prior to 2020 to wait until such time as they are el igible for credit under a state compliance plan. For example, wind developers would have an incentive to wait to expend their capital until the compliance period begins in order to maximize the potential benefits received under a state plan. In addition to economic and business risk, such a delay risks reducing the overall environmental effectiveness of the Clean Power Plan, as emission reductions that may have occurred before 2020 absent the rule are pushed off to the compliance period. EPA should have a strong preference for securing emission reductions as early as possible, as there are significant environmental and economic costs associated with delay. With that end in mind, g ranting credit to specified actions prior to 2014 would stimulate the marke t, accelerate emission reductions, and give states a longer period for ramping up compliance activities. In the proposed rule, EPA requests comment on a range of possible approaches to this type of credit for early action. In the first approach, full acco unting of emission reductions continues to begin in 2020 but credit could be received for certain pre

- 2020 reductions that would lower the amount of emission reductions needed during the 2020

- 2029 period. EPA also requests comment in the proposed rule on a second approach in which states could choose early (e.g., pre

- 2020) implementation of state goal requirements, which could provide states with the140 | P a g e

ability to achieve the same amount of overall emission reductions but do so by making some reductions earli er. In the NODA, EPA discusses potential technical challenges , described by some stakeholders , associated with achieving all of the reductions that states would be required to make as early as 2020, when the compliance period begins. To address this sit uation , the agency announced in the NOPR it would seek further comment on two specific adjustments to the proposed regulations , including whether it should allow credit for reductions earlier than 2020 to enable a more gradual reduction of emissions betwee n 2020 and 2030. In order to avoid market distortions and encourage emission reductions before 2020, AWEA supports the alternate proposal (second approach) from the Clean Power Plan in which a state would be permitted to provide credit to emission reduct ions that occur prior to 2020 so long as the emission reduction measures are put in place after the date the Clean Power Plan was published in the Federal Register (June 18, 2014), but EPA should modify it slightly. While there are a number of policy app roaches to encourage pre

- 2020 emission reductions, AWEA believes the most workable and flexible option would be to allow banking under which states could credit any new emission reductions achieved through approved compliance options, as long as they occur after January 1, 2014, and are the result of new emission reduction measures. In other words, EPA should allow credit for new carbon reduction actions, including increasing existing policies, adopting new policies and deploying new facilities, taken afte r that date and before the plan performance period (2020) to count toward achievement of the state's carbon emission targets. This would help ensure that the states have an incentive to reduce carbon emissions through the use of new renewable energy measur es, as well as other “additive” compliance tools,141 | P a g e

prior to 2020. This would also allow states to make themselves better positioned to achieve their final compliance goals; in other words, it would give states mo re time to meet their targets. Finally, by limiting the proposal to “new” emission reduction measures (which could include expanding existing programs/measures/actions or establishing new ones), states would be in a better position to meet th e required emission performance standards beginning in 20 20. 161 This

wo uld also be consistent with EPA’s “no backsliding” principle on overall plan emi ssion performance set forth in the proposed rule, 162 as it would only allow additive actions taken pursuant to an existing state program, requirement, or measure (su ch as compliance with a regulatory obligation or initiation of an action related to a program, action or measure) and, therefore, would sustain the overall stringency of emission reductions in the compliance period, as the actions would not have been taken but for compliance with the final rule. The approach of banking is not foreign to states, as many states already permit the carryover of renewable energy produced in one year to satisfy RPS requirements in a subsequent
year , and EPA already proposes to al low banking during the plan performance period . The accounting for year

- to

- year carryover should be addressed in a state plan. EPA could signal to states that it will approve plans that include banking provisions by describing, in some detail, the type a nd quantity of banking it will find acceptable. It will be particularly important to provide
up - front clarity on this issue in the final rule because uncertainty is already contributing to unnecessary slowdowns in energy project development, as purchasers and developers wait to see what regulatory obligations and benefits will apply to a project

.

161 EPA’s proposed state

- specific goals already reflect actions that many states have already taken to reduce or avoid EGU carbon emissions. Carbon emission reductions due to shifts to existing lower carbon

- emitting power generation are also represented in the 2012 base period that was used to assess certain building blocks that are applied in calculating a state emission performance goal. 162 Proposed Rule at 34917

.142 | P a g e

C. Comments related to enforcement issues. i. S tates should be able to choose approaches in their compliance plans under which responsibility for actions achievin g reductions is not placed entirely upon emitting EGUs. AWEA agrees that states should be able to choose approaches in their compliance plans under which responsibility for actions achieving reductions is not placed entirely upon emitting EGUs; instead, state plans should be able to include measures and policies (e.g., renewable portfolio standards) for which the state itself is responsible. EPA reasonably interpret ed Section 111(d)(1) to allow states to adopt plans that require EGUs and other entities to be legally responsible for actions required under the plan that will, in aggregate, achieve the emission performance level.
AWEA also agrees that EPA should authorize states either to submit plans that hold the affected EGUs fully and solely responsib le for achieving the emission performance level, or to submit plans that rely in part on measures imposed on entities other than affected EGUs to achieve at least part of that level, as well as on measures imposed on affected EGUs to achie ve the balance of that level. This approach is preferable to the approach under which state plans simply would be required to hold the affected EGUs fully and solely responsible for achieving the emission performance level. S tate plans should include measures enforceable against other entities that support reduced generation by, and therefore carbon emission reductions from, the affected EGUs. Plans with rate

- based emission limits could incorporate enforceable renewable energy measures by adjusting an EGU’s carbon emiss ion rate when demonstrating compliance through either an administrative adjustment by the state or use of a tradable credit approach. As such,

s tates should be able to rely on certain renewable energy programs as complementary measures143 | P a g e

to reduce costs for , and otherwise facilitate, EGU emission limits without including those measures in the Section 111(d) state plan. The EGU emission limits would be federally enforceable, but certain renewable energy measures could serve as complementary measures and woul d not be enforceable under federal law; instead, they would remain enforceable under state law. This approach would work for certain types of state programs, such as RPSs, particularly because they are well

- established and can be expected to achieve their intended results. The state plan would include an enforceable commitment (state commitment approach) by the state itself to implement state

- enforceable (but not federally enforceable) measures that would achieve a specified portion of the required emissi on performance le vel on behalf of the affected EGUs. A state plan that imposes a mass limit on affected EGUs that is sufficiently stringent to achieve the emission performance level should not need to include renewable energy measures as an enforceable com ponent of the plan to assure the achievement of that performance level. The mass limit itself would suffice. However, the state may wish to implement renewable energy measures as a complement to the plan to support forward

- looking achievement of the mass limit at lesser cost.
D. Comments related to miscellaneous issues. i. EPA should combine the two existing 111(d) c atego ries and codify in the Code of Federal Regulations . In 1971 and 1979 EPA listed fossil fuel

- fired steam generating boilers and fossil fuel

f ired combustion turbines, respectively, as categories subject to Section 111 rulemaking. In regards to the proposed rulemaking at issue here, AWEA supports combining the two existing categories into a single category for purposes of carbon emissions from existing affected EGUs. AWEA further supports EPA ’s proposal to codify all of the proposed requirements for the affected EGUs in a new subpart, 40 CFR part 60 subpart “UUUU.” Combining the two144 | P a g e

categories would offer additional flexibility by facilitating implementation of carbon mitigation measures, such as emission trading amo ng sources in both categories. AWEA agrees that because the two cate gories are pre

- existing, and EPA would not be subjecting any additional sources to regulation, that the combined category should not be considered a new category that EPA must list under Section 111(b)(1)(A). Therefore, EPA should not be required to make a finding that the combined category causes or contributes significantly to air pollution which may be reasonably anticipated to en danger public health or welfare

. A ccounting for e missions changes from the substitution of new natural

ii. gas generation . Emissions resulting from substitution of generation by new natural gas generation for generation by affected EGUs sh ould be calculated toward a required emission performance level for affected EGUs. Incorrectly treating new gas generators as if they have zero carbon emissions would result in less overall carbon emission reductions, as the actual emissions associated wi th operating the new gas generators would not be bound by the cap created by 111(d). A failure to account for the emissions associated with new gas generators would effectively allow a state to
treat new gas facilities as if they were zero

- emission resour ces, skewing investment and dispatch decisions away from true zero

- emission resources and even creating a strong distortionary incentive to substitute new gas generation for existing combined cycle generation in investment and dispatch decisions. EPA shou ld also periodically reevaluate, such as during the eight

- year review process (as suggeste d above ), to provide a mechanism for updating the fleet of facilities subject to the regulation in order to ensure that the 111(d) regulations continue to achieve sig nificant emission reductions from fossil

- fuel power plants, consistent with the no backsliding policy.145 | P a g e

E. Comments related to legal issues. i. EPA’s Legal Authority to Issue the Rule and to Regulate Carbon Dioxide Emissions.
AWEA a grees with EPA that it has t he legal authority to regulate carbon emissions from EGUs under Section 111(d). EPA has ident ified carbon as a pollutant subject to Section 111(d) regulation under a reasonable construction of the provisions of Section 111(d)(1)(A)(i) that identify air po llutants subject to regulation. And, t wo Supreme Court decisions support EPA ’s position on the issue of carbon dioxide regulation. 163 The Court has held that greenhouse gases, including carbon dioxide , are a n “air pollutant” under the CAA. 164 Further, the C ourt has ruled that “the Clean Air Act and EPA actions it authorizes displace any federal common law right to seek abatement of carbon

- dioxide emissions from fossil fuel

- fired power plants,” and importantly, premised that holding on the Court’s understandi ng that Section 111, including 111(d), applies to carbon emissions f rom those sources. 165

a. EPA reasonably interprets the provisions identifying which air pollutants are covered under Section 111(d) to authorize EPA to regulate carbon emissions from fossil fu el
- fired EGUs. Drafting errors that occurred during enactment of the 1990 CAA Amendments do not call EPA’s legal authority into question . Both houses of Congress passed an amendment to Section 111(d) 166 and the t wo versions differed from and conflicted wit h each other , creating ambiguity.
A s they were not reconciled during the House

- Senate Conference Committee, both were

163 [cite] EPA v. EME Homer City Generation , 5 72 U.S. ___ (2014); Utility Air Regulatory Group v. EPA , 134 S.Ct. 418 (2013). 164 Massachusetts. v. EPA , 549 U.S. 497 (2007). 165 American Electric Power Co. v. Connecticut , 131 S. Ct. 2527, 2537

- 38 (2011)

. 166 Pub. L. No. 101

- 549, § 108(g), 104 Stat. at 2467 ( Nov. 15, 1990).146 | P a g e

approved by bo th houses and enacted into law

— one in title I of the bill, the other in title III of the bill (both amendments were to be c odified in Section 111(d)). 167 AWEA agrees with EPA that the enacted law, with both conflicting and thus ambiguous amendments, signed by the President (as recorded in the U.S. Statutes at Large) is cont rolling, not the U.S. Code that inaccurately presents only one of the two amendments. Under such circumstances, EPA may reasonably construe the provisions of Section 111(d) to aut horize regulation of carbon thereunder

. Before the 1990 CAA Amendments, Section 111(d)(1) read: The Administrator shall prescribe regulations . . . for any existing source for any air pollutant for which air quality criteria have not been issued or which is not included on a list published under Section 7408(a) or 7412(b)(1)(A) [§ 112(b)(1)(A)] of this title, but to which a standard of performance under this Section would apply if such existing source were a new source. . .” 168 In this version, there was a provision (Section 112 Exclusion) excluding from regulation, pollutants that were provided in Section 112. The 1990 CAA Amendments altered the Section 112 Exclusion ambiguously because there were two different versions both enacted into law. As presented in the U.S. Code, the House written version of Section 111(d)(1) reads: The Administrator shall prescribe regulations . . . for an y existing source for any air pollutant for which air quality criteria have not been issued or which is not included on a list published under Section 7408 (a) of this title or emitted from a source category which is regulated under Section 7412 [Section 112] of this title but to which a standard of performance under this Section would apply if such existing source were a new source, and provides for the imp lementation and enforcement. . . 169

167 The Senate version would exclude the regulation of any pollutant which is “included on a list published under [ Section ] 112(b). Pub. L. No. 101

- 549, § 302(a), 10 4 Stat. at 2574 (Nov. 15, 1990). 168 42 U.S.C. § 7411(d) (1970)

. 169 42 U.S.C. § 7411, 111(d)(1)

.147 | P a g e

The conflict in interpreting the statute comes from the revision of the Section 112 Exclusion defining one category of air pollutants that are “emitted from a source category which is regulated under [ Section 112] ” as exc luded from regulation. This alters the Section 112 Exclusion from applying to Section 112 pollutants to categories of sources that emit those pollutants. Therefore, the U.S. Code version can be constructed to read that the provision (Section 112 Exclus io n) precludes GHGs because they are emitted from EGUs and those regulated entities are a source categor y regulated under Section 112. 170 But , under this construction, the Section 112 Exclusion would be read to exclude almost every pollutant from regulation u nder Section 111(d), as it would be challenging to identify any pollutant that is not emitted from at least one source category that is regulated under Section 112. This circular construction of Section 111(d) would render itself inef fective, and as such, can be neither a reasonable construction nor the intent of Congress. Such an unreasonable construction can only be derived by looking at only the text of Section 111(d) as presented in the U.S. Code, but this does not accurately reproduce the Section 112 Exclusion as enacted by Congress and signed by the President in the 1990 CAA Amendments. The Senate written version reads as follows: The Administrator shall prescribe regulations . . . for any existing source for any air pollutant for which air quality criteria have not been issued or which is not included on a list published under Section 7408 (a) or 7412(b) [Section 112(b)] of this title, but to which a standard of performance under this Section would apply if such existing source were a new source. . . S.1630.ENR, 101st Cong. (1990).

170 “ Electric utility steam generating unit

- The term “electric utility steam generating unit” means any fossil fuel fired combustion unit of more than 25 megawatts that serves a generator that produces electricity for sale. A unit that co generates steam and electricity and supplies more than one

- third of its potential electric output capacity and more than 25 megawatts electrical output to any utility power distribution system for sale shall be considered an electric utility steam generati ng unit.” 42 U.S.C. § 741 2 ( 8 ) (1970)

.148 | P a g e

This version simply revises the list of pollutants to which it refers because in the 1990 CAA Amendments, Congress amended Section 112 to include a statutory list of hazardous air pollutants for EPA to regulate, as oppos ed to relying on EPA to develop its own list. As shown, these two versions conflict and are thus ambiguous. The controlling statement of the Section 112 Exclusion, found in the U.S. Statutes at Large, has both conflicting versions (each passed by each hou se of Congress) and is thus ambiguous. Under these circumstances,
EPA may reasonably construe the Section 112 Exclusion to allow for and authorize the regulation of GHGs under Section 111(d). In doing so, it would not be reasonable to give little

or no e ffect to the Senate version and instead defer entirely or almost entirely to the House version because a strict reading of the House version would mean that EPA could not regulate any air pollutant from a source category regulated under Section 112 and wou ld render Section 111(d) ineffective , which was not the intent of Congress. Moreover, Congress desired the 1990 CAA Amendments to require EPA to regulate more substances, and not eliminate EPA ’s ability to regulate lar ge categories of air pollutants. 171 Fu rther, EPA has historically regulated non

hazardous air pollutants under Section 111(d), even where those air pollutants were emitted from a source category actual ly regulated under Section 112.
EPA reasonably interprets the provisions identifying which ai r pollutants are covered under Section 111(d) to authorize EPA to regulate carbon emissions from fossil fuel

- fired
EGUs. And, EPA has reasonably interpreted the ambiguous Section 112 Exclusion in a manner to give effect to both amendments, and thus the ap parent intent of C ongress. Specifically, EPA has interpreted the Secti on 112 Exclusion to mean that “[w] here a source category is regulated under Section 112, as Section 111(d) standard of performance cannot be established to address

171 See 70 F ed. R eg. 16031

- 32

.149 | P a g e

any hazardous air pol lutants listed under Section 112(b) that may be emitted from that particular source category.” 172 EGUs are a source category that is regulated under Section 112, but GHGs
are not a hazardous air pollutant regulated under Section 112. Accordingly, the Secti on 112 exclusion in Section 111(d) does not apply to GHGs, and 111(d) does not preclude EPA from establishing guidelines covering GHGs from EGUs. Therefore, this interpretation authorizes
EPA to establish Section 111(d) guidelines for GHG emissions from E GUs, and this interpretation is reasonable and entitled to deference. This authority is not divested by the fact that EPA has regulated EGU emissions of mercury and other hazardous air pollutants under Section 112 under the a gency’s established constructi on of the ambiguous provisions in Section 111(d)(1)(A)(i) that identify air pollutants subject t o Section 111(d).

b. Section 111 does not require that EPA issue a formal endangerment finding.
EPA has stated that it is rational to regulate GHGs from fossil

- f uel fired EGUs , through the Clean Power Plan, based up on previous EPA findings that GHG emissions endanger public health and welfare, and that the electric generating industry emits a significant amount of GHGs. AWEA agrees with EPA that Section 111 does not require that EPA issue a formal endangerment finding, and that even if Section 111 did require such a finding, EPA ’s rational basis would qualify as one. AWEA also agrees that parallel EPA rulemakings under Section 111(b) properly address and resolve the endangerment question : s pecifically , the discussions of endangerment from carbon emissions put forth in EPA’s 111(b) regulation of new or modified power plants. 173

172 “Revision of December 2000 Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units and the Removal of Coal

- and Oil

- Fired Electric Ut ility Steam Generating Units From the Section 112(c) List,” 70 FR 15994, 16029

- 32 (March 29, 2005). 173 79 F ed. R eg. 1429 , Jan. 8, 2014.150 | P a g e c. EPA has the authority to determine the BSER , not the states.

AWEA supports EPA in it s determination that the regulation makes clear that it is EPA , not the states, that determines the BSER. AWEA believes the statutory directive that Section 111(d) regulations shall establish procedures “similar to that provided by Section 110” supports

a n interpretation of the former section that allows states sufficient flexibility in meeting the state goal set thereunder to include in their compliance plans other measures (i.e., measures that are neither performance standards nor measures that enforce o r implement performance standards). Section 111(d)(1) further requires each state to submit a plan that “(A) establishes standards of performance for any existing source [for certain air pollutants] . . . and (B) provides for the implementation and enforc ement of such standards of performance.” And, Section 111(a)(1) defines a “standard of performance” as “a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of

em ission reduction ... adequately demonstrated

. ” 174 These provisions make it abundantly clear that emission limits that are enforceable against affected EGUs appropriately belong in state plans because they clearly are “standards of performance.”

d. State plans may include measures, other than limits on EG Us, fo r achieving the required emission performance goals. The terms of Section 111(d)(1) do not explicitly address whether, in addition to emission limits on affected EGUs, state plans may include other measu res for achieving the required emission performance goals. The terms of the CAA also fail to address whether entities other than affected EGUs may be subject to requirements that contribute to reducing EGU emissions.
T he U.S. Supreme Court determined in its 1984 decision in Chevron U.S.A. Inc. v. NRDC that where the statute leaves a gap, the agency has discretion to fashion an interpretation that is a

174 42 U.S.C. § 7411 ( a ) (1), (1970).151 | P a g e

reasonable construction of the law. 175 Hence, EPA ’s reasonable construction of 111(d) is a valid interpret ation as long as it is reasonable.
EPA ’s proposed interpretation is based, in part, on Section 111(d)’s requirement that states set performance standards “for” affected sources. Although “for” could reasonably be read as meaning that the standards must ap ply to affected sources, “for” is also reasonably interpreted to have a more capacious meaning to include standards with an effect on affected sources. EPA standards, such as renewable energy, are reasonably considered to be “for” affected sources if they would have an effect on affected sources by, for example, causing reductions in affected EGUs’ carbon emissions by decreasing the amount of generation needed from affected EGUs.
Under EPA ’s specific interpretation, and depending on the specific provision s of a state’s plan, renewable energy would be “for” fossil fuel

- fired EGUs, even if the standards do not apply directly to fossil fuel

- fired EGUs.
T he “standards of performance for [affected sources]” is reasonably read , consistent with EPA’s interpretati on, to include the emission performance level (i.e., the state goal) on the grounds that the level is “a standard for emissions” because it is in the nature of a requirement that concerns emissions and it is “for” the affected sources because it helps dete rmine their obligations under the plan . Measures, such as renewable energy deployment, may be considered “implement[ing]” measures in state plans if they are not directly tied to emission reductions that affected sources are required to make through emiss ion limits, and if they are requirements on entities other than the affected sources.

e. EPA has the legal authority to allow a portfolio approach.

175 Chevron U.S.A. v. NRDC , 467 U.S. 837, 842

– 843 (1984).152 | P a g e

AWEA agrees with EPA ’s proposal to interpret Section 111(d)(1) to allow state plans to include components of t he portfolio approach that are measures that would reduce emissions from affected sources, even if those measures are neither “standards of performance for existing sources” nor measures “for the implementation and enforcement of such standards of performa nce.” There is no specific language in Section 111(d) or elsewhere in the act that prohibits states from including measures other than performance standards, implementation, and enforcement measures, provided that they reduce emissions from affected EGUs.
AWEA app lauds EPA for finding that the BSER includes a system that goes beyond the fence line of individual EGUs. In justifying the beyond the fence approach to BSER, EPA accurately cites the interconnected n ature of the electric system. 176 Ultimately, th e electric power system is not simply a set of individual generation units, but rather an interconnected system of generation, transmission and distribution facilities and end users managed in real

- time to keep the system in balance. The utilization and u ltimate emissions of individual EGUs operating within this system are a function of the performance of the entire system and should not and need not be artificially viewed in isolation. Achievable and cost effective emission reduction opportunities can be found beyond the fence line of EGUs with application of technologies such as renewable energy . These technologies , like renewables, are well established, cost effective, and are already contributing to emission reductions at affected EGUs. EPA’s approach to determining the level of emission reductions that have been adequately demonstrated

— whether justified as the application of four BSER “ building block s” to the broadly conceived electric system or as a quantification of the

176 Clean Power Plan at 34875.153 | P a g e

emission reductions achievabl e through reduced utilization of affected EGUs

— i s consistent with its legal authority. f. Section 111(d) continues to apply even after a modification or reconstruction of a source.
Because Section 111(d) does not address whether an existing source that is subject to a Section 111(d) program remains subject to that program even after it modifies or reconstructs,
EPA has authority to provide a reasonable interpretation, under the Supreme Court’s decision in Chevron U.S.A. Inc. v NRDC . AWEA agrees with EPA’s proposal that an existing source becomes subject to requirements under Section 111(d) will continue to be subject to those requirements even after it undertakes a modification or reconstruction. Under this interpretation, a modified or reconstructed sour ce would be subject to both : (1) the Section 111(d) requirements that it had previously been subject to ; and (2) the modified source or reconstructed source standard being promulgated under Section 111(b) simultaneously with this rulemaking

. This interpr etation , which is supported by the statutory text, is a sensible policy and will further the goals of the statute

. AWEA agrees with EPA that owners and operators of units might have incentives to modify purely because of potential discrepancies in the st ringency of the two programs, which would undermine the emission reduction goals of Section 111(d). And, the uncertainty about whether units would remain in the program could be very disruptive to the operation of the program. EPA’s interpretation of Sec tion 111(d) will avoid creating incentives for sources to seek to avoid their obligations thereunder by undertaking modifications and, therefore, will assure the integrity of the Section 111(d) program.

I V . CONCLUSION154 | P a g e

Thank you for your careful considerat ion of the recommendations and other issues raised by AWEA in these comments. AWEA looks forward to continuing its productive relationship with EPA on this critical issue in the coming months as it finalizes the Clean Power Plan

. Sincerely,
Tom Vinson Vice President of Regulatory Affairs Michael Goggin Director of Research
Gene Grace Senior Counsel American Wind Energy Association Suite 1000 1501 M St, NW Washingt on DC 20005 Phone: (202) 383

‐ 2500 Fax: (202) 383

‐ 2505 E

‐ mail: ggrace@awea.org155 | P a g e

V. APPENDIX: EPA’s SPECIFC QUESTIONS AND AWEA’S ANSWERS Questions taken from the “Listing of EPA’s Requests for Comment,” Proposed Clean Power
Plan for Existing Power Plants , available at http://www2.epa.gov/sites/production/files/2014

- 08/documents/clean

- power - plan

- comment

- categories.pd f . Further explanation of many of these issues is offered above in our detailed comments,
C a t e go r y C o m m e n t P age N o. in F e d e r a l R e gist e r Ge n e r a l T he E P A is o ffer i n g the oppo r tuni t y to c omm e nt on the

p r opos e d B S E R, the p r opos e d m e thodol o gy f o r c omputing s t a te g o a ls b a s e d on a ppli ca tion of the B S E R, a nd the st a t e - s p e c i f

ic d a ta us e d in the c omput a tions. 34835

AWEA Response AWEA believes that the BSER should be a system

- wide

framework. Compli a n c e T ime T he a g e n c y is a lso re q u e sting c omm e nt on a n a lt e r n a ti ve

option, a 5

- y e a r p er iod f

or c ompli a n ce , in c ombin a tion w ith a l e ss st r in g e nt s e t of C O 2 e mission p erf o r m a n c e l e v e ls. 34839

AWEA Response AWEA agrees with the EPA’s consideration of time as a

component of the BSER, especially given that climate change m ay be mitigated best through prompt and early action; however, the alternate approach proposed for a less stringent program with a 2025 goal year is overly conservative with respect to achievability by that time. Building block s T he E P A is a lso s ee ki n g c omm e nt on di ffe r e nt

c o mbin a tions of building block s a nd di ff e re nt l e v e ls of st r in g e n c y f

o r eac h building block

. 34839

AWEA Response The stringency of building block t hree should be drastically increased as renewable generation is an inexpensive, proven, reliable, and clean form of emissions reduction and is underestimated by the Clean Power Plan

.156 | P a g e

S t a k e hold e r P r opos a ls O th e r st a k e hold e r s s u g g e st e d th a t a n ‘‘ inside the f e n ce ’ ’ pl a nt

- or unit

- s p e c i f

ic a ss e ssm e nt link e d to the a v a il a bili t y of c ont r ol a t th e sou r c e su c h a s h ea t r a te imp r ov e m e n ts should be c onsid ere d. T h e y indi c a t e d th a t on c e pl a nt

sp ec i f ic g o a ls ar e e s t a blish e d b a s e d on on - site C O 2 re du c tion oppo r tuniti e s, the sou rc e s h ould h a ve the f l e x ibili t y t o look ‘‘ outside the fe n c e ’ ’ f o r the m ea ns to ac hi e ve t h e g o a ls, in c luding the u s e of e missions t ra ding a nd a v e r a g i n g . T he E P A invit e s c omm e nt on th e se s u g g e stions. 34848

AWEA Response AWEA agrees on the use of emissions trading and

averaging as a means for affected EGUs to reduce their emissions lev els however, and we disagree with the sole use of “inside the fence” actions as a sole means of compliance for states and EGUs. L e g a l I nt e rp re t a tion T he E P A dis c uss e s its l e g a l int erp re t a tion in mo r e d e t a il

in oth e r p ar ts of t h is p rea mble a nd dis c uss e s cer t a in issu e s in mo r e d e t a il in the L e g a l M e mo ra ndum in c lud e d i n the do c k e t f or this r ul e m a kin g . T he E P A soli c its c omm e nt on a ll a sp ec ts of its l e g a l int er p re t a tions, in c luding the d i s c ussion in the L e g a l M e mo ra ndum. 34853

AWEA Response AWEA believes th at the EPA has authority to regulate

carbon dioxide emissions under the Clean Air Act and that it is rational to regulate greenhouse gases based upon previous findings of endangerment to public health and welfare. AWEA also believes that 111(d) of the CAA gives the EPA authority to determine the BSER and that state plans may include measures other than limits on EGUs to meet emission performance goals, as well as a llow for a portfolio approach and that 111(d) continues to apply even after a modification or reconstruction of a source. Combining C a t e g o r i e s T he E P A is soli c iting c o mm e nt on c ombining the t w o

e x isting ca t e g o r i e s f

or the af f ec t e d EGU s into a sin g le ca t e g o r y f

or pu rpos e s of f

a c ilit a ting e mission t ra di n g a mo n g sou r ce s in both ca t e g or i e s. 34855

AWEA Response EPA should combine the two existing categories for the

affected EGUs into a single category for purposes of facilitating emission trading among sources in both categories. Combining C a t e g o r i e s T he E P A is p r oposing e mission g uid e lin e s f o r t h e t w o ca t e g o r i e s a nd is s oli c iting c omm e nt on c o mbining the t w o ca t e g o r i e s into a si n g le c a t e g o r y f or p u rpos e s of t he C O 2 e missions fr om e x i s ting af f ec t e d E GU s. 34855157 | P a g e

AWEA Response AWEA supports combining the two existing categories into

a single cate gory for purposes of carbon emissions from existing affected EGUs. Combining C a t e g o r i e s T he E P A soli c its c omm e nt on w h e th e r c ombini n g the t w o

ca t e g o r i e s w ou l d o ffe r a ddition a l f l e x ibi l i t y , f

or e x a mpl e , b y fac ilit a ting impl e m e nt a t i on of C O 2 miti g a tion m ea su re s, su c h a s shi f

ting g e n era tion f

r om hi g h e r to lo wer - c ar bon int e nsi t y g e n e ra tion a m o ng e x isting sou r c e s (e

. g ., shi f ting fr om boil er s to N G CC units) or fac ilit a ting e missions t ra di n g a mong sou r ce s. 34855

AWEA Response AWEA believes that combining the two categories would

offer additional flexibility, by facilitating implementation of carbon mitigation measures, such as emission trading among sources in both categories. Building block s F or some st a t e s, the renewable energy g e n era tion t a r g e ts

d e v e lo p e d using the p r opos e d a p p r o ac h a r e l e ss th a n t h e st a t e s’ re p o r t e d renewable energy g e n era tion a mounts f o r 2 012. W e invite c omm e nt on w h e th e r the a pp r o a c h f or qu a nti f y i n g the renewable energy g e n era tion c ompon e nt of e a c h st a t e ’ s g o a l should be modi f i e d to i n c lude a f

loor b a s e d on re po r t e d 2012 renewable energy g e n era tion in th a t st a t e . 34868

AWEA Response If this approach is adopted, the renewable energy

generation component of each state’s goal should be modified to include a floor based on reported 2012 r enewable energy generation in that state. Building block s T he E P A invit e s c omm e nt on w h e th e r the a p p r o a c h f or qu a nti f y i n g the renewable energy g e n era tion c ompo n e nt of eac h s t a t e’ s g o a l should be modi f i e d so th a t the di ffe r e n c e b e t w e e n a st a t e’ s renewab le energy g e n e ra tion t a r g e t a nd its 2012 l e v e l o f c o rr e sponding renewable energy g e n era tion do e s not e x cee d the st a t e’ s r e po r t e d 2 0 12 f ossil f u e l

- f i re d g e n e r a tion. 34868

- 34869

AWEA Response AWEA does not believe that there should be such a cap

placed upo n the expansion of renewable energy generation. Building block s W e invite c omm e nt on t h e p r opos e d a p p r o a c h to

t rea tm e nt of r e n e w a ble g e n era ti n g ca p ac i t y a s a b a s is f or the b e st s y st e m of e mission re du c tion a d e qu a t e l y d e monst r a t e d a nd f

o r qu a nti f i ca ti o n of st a te g o a ls. 34869158 | P a g e

AWEA Response AWEA believes that renewable energy generation should

be considered a basis for the best system of emission reduction because it is adequately demonstrated and readily quantifiable. Building block s W e invite c omm e nt on t h e a lt er n a tive a pp r o a c h to

qu a nti f i ca tion of renewable energy g e n era tion to suppo r t the B S E R d e s cr ib e d on p a g e s 34869

- 70. W e note th a t the th re e sp e c i f

ic r e qu e sts f

or c omm e nt m a d e a bove w ith r e sp ec t to t he p r opos e d qu a nti f i ca tion a pp r o ac h

— a dd re ssi n g , f

i r st, the p ossibili t y of a f

loor b a s e d on 2012 renewable energy g e n era tion, s ec ond, the possibili t y of a limit a tion b a s e d on 2012 f ossil f u e l

- f i re d g e n era tion a nd, th i r d, the t rea tm e nt of h y dr opo we r g e n era tion

— a pp l y to this a lt er n a tive a p p r o ac h a s we ll. 34870

AWEA Response AWEA agrees with the alternative approach to

quantification of renewable energy and believes that renewable energy should be calculated using an economic and technical feasibility assessment , subject to the modifications discussed in o ur detailed comments

. Building block s T he E P A invit e s c omm e nt on oth e r possible t ec h no ec onomic a p p r o a c h e s to qu a nti f i ca tion of renewable energy g e n era tion to suppo r t the B S E R. F or e x a mpl e , a c on c e ptu a l f

r a m ew o r k f

or a noth e r t ec hno

- ec on o mic a pp r o ac h is p r ovi d e d in the A lt er n a tive renewable energy A pp r o ac h T S D

. 34870

AWEA Response We strongly recommend that EPA strengthen the targets

for renewable energy by adopting the NODA’s Regionalized Technical and Economic Renewable Approach for calculation of buil ding block 3 of the BSER, but modifying it to better reflect an assessment of what levels of increased generation from renewable energy are technically and cost

- effectively achievable. Building block s A s dis c uss e d in S ec tion V I I .E b e lo w , t h e E P A is a lso

t a king c omm e nt on a l e ss st r ing e nt a lt er n a ti v e f or s e tti n g st a te g o a ls. 34873

AWEA Response AWEA does not support the less stringent alternative to

establishing state goals. Building block s W e invite c omm e nt on a pot e nti a l B S E R c omp r ising a

c ombin a t ion of building block s 1 a nd 2. 34878 AWEA Response AWEA disagrees with a potential BSER comprised of only

building blocks 1 and 2 as the improvement of fossil power efficiency and replacement of coal with natural gas does not constitute a “best” system o f emissions reduction. 34885159 | P a g e

Building block s W e note th a t some st a k e hold er s h a ve a r g u e d th a t C A A

s ec tion 111 (a ) ( 1) d o e s not a utho r i z e the E P A to id e nti f y re disp a t c h, lo w - o r z er o - e mitting g e n e r a tion, or d e m a nd

side e n e rg y e ff

i c i e n c y m ea s u re s ( building b lock s 2, 3, a nd 4) a s c ompon e nts of the ‘‘ b e st s y st e m of e mission re du c tion . . . a d e qu a t e l y d e m o nst ra t e d. ’ ’ A cc o r di n g to t h e se st a k e hold e r s, a s a l e g a l m a tt er , t h e B S E R is lim i t e d to m ea su r e s th a t m a y be un d er t a k e n a t the af f ec t e d units, a nd not m ea su re s t h a t a r e b e y ond t h e a f fec t e d units; the m ea su re s in building block s 2, 3, a nd 4 a r e ‘ ‘ b e y on d

- th e unit ’ ’ o r ‘‘ b e y o nd

- th e - fe n ce lin e ’ ’ m ea su re s b e ca u s e th e y a r e impl e m e nt e d outside of the af f ec t e d units a nd o u tside th e ir c ont

r ol; a nd a s a re sult, those m ea su re s c a nnot be c ons i d ere d c ompo n e nts of the B S E R. W e we l c ome c o m m e nt on this issu e . 34888

AWEA Response Under the U.S. Supreme Court’s 1984 decision in

Chevron U.S.A. Inc. v. NRDC, where the statute leaves a gap, the agency has discretion to fashion an inter pretation that is a reasonable construction of the law. Hence, the EPA’s reasonable construction of 111( d) is a valid interpretation as it is reasonable. Building block s A s dis c uss e d a bov e , the E P A is soli c iting c omm e nt on

c ombining the c a t e g o r y o f s t ea m EGU s a nd the ca t e g o r y of c ombustion tu r

bin e s (w hi c h in c lude NG CC units) into a sin g le c a t e g o r y f

or f ossil f u e l

- f i re d EG U s, f

or pu rpos e s of p r omul g a ti n g e mission guid e lin e s f or C O 2 e missions. 34892

AWEA Response AWEA supports combining the two existin g categories into

a single category for purposes of promulgating carbon emissions guideline s from existing affected EGUs

. Building block s T he E P A soli c its c omm e nt on w h e th e r c ombini n g the

ca t e g o r i e s is, a s a l e g a l m a tt er , a p r ere quisite f or ( i) id e nti f y i n g a s a c ompon e nt of the B S E R re - disp a t c h b e t w ee n s o u rce s in the t w o c a t e g o r i e s ( i. e ., r e - disp a t c h b e t w e e n st ea m EGU s a nd NG CC units ) , or ( ii) fac i l it a ting a v e r a g i n g or t r a ding s y st e ms th a t in c lude s ou rce s in both ca t e g o r i e s, w hi c h st a t e s m a y w ish to a dopt

. 34892

AWEA Response AWEA supports the EPA codifying all of the proposed

requirements for the affected EGUs in a new s ubpart UUUU of 40 CFR part 60

.160 | P a g e

Building block s W e invite c omm e nt on a ll a sp ec ts of our p r opos e d

int erp re t a tion a nd a lt er n a te int erp r e t a tion of the B S E R f or C O 2 e missions fr om e x isting f ossil f u e l

- f i re d E G U s, both a s id e nti f

i e d a bove a n d a s f

u r th e r di s c uss e d in the L e g a l M e mo ra ndum in the do c k e t. I n p ar ti c ul a r , w e inv i te c omm e nt on our a n a l y sis of the f our building block s a s c ompon e nts o f the B S E R, w h e th e r a n y oth e r p ot e nti a l m ea su r e s should be c onsid ere d, o ur a n a l y sis of the c ombi n a tions of building block s 1 a nd 2 a nd of a ll f our building block s, a nd the l e g a l, t ec hni c a l, a nd ec onomic b a s e s o f our c o n c lusions. 34892

AWEA Response AWEA b elieves that all four building blocks should be

considered when determining the BSER for CO2 emission reductions. We oppose consideration of solely building block 1 or a combination of blocks 1 and 2 as these methods fail to provide drastic reductions of emissions in a least

- cost manner. Building block s S ome c omm e nt er s not e d th a t t ra ding p r o g ra ms li k e

R G G I h a v e b ee n s u c ce ss f ul a t re du c i n g G H G s, a nd oth e r c omm e nt er s p r ovid e d s p ec i f ic B S E R p r opos a ls b a s e d on t ra di n g a nd/or e missions a v er a g ing a pp r o ac h e s. W e sp ec i f i ca l l y r e qu e st c o m m e nt on w h e th e r a n y o f t h e se a pp r o ac h e s should be c onsid e r e d a s the B S E R. 34892

AWEA Response AWEA agrees with the implementation of regional

emissions trading programs. The EPA should put forth a model rule for an interstate emissions credit trading program that could be easily adopted by states who wanted to use such a program for its plan. This will help states establish a sensible trading and ceiling policy that is in compliance with EPA requireme nts
. S t a te G o a ls W e ar e r e qu e sting c omm e nt on a s ec ond s e t of st a t e sp ec i f ic g o a ls th a t w o uld ref

l ec t l e ss st

r i n g e nt a ppli ca tion of the s a me B S E R, in this ca se b y 2025, w ith int er im g o a ls th a t w ould a pp l y o v e r a 2020

– 2024 ph a s e - in p er iod. 34892

AWEA Response AWEA does not suppor t a reduction in the stringency of

the application of BSER.161 | P a g e

S t a te G o a ls A st a t e’ s in a bili t y to m e e t the l e v e l of e mission

r e du c tions a nti c ip a t e d th r o u g h use o f one building block m a y fr e e up re sou r c e s th a t the st a te c ould th e n d e vote to mo r e st r in g e nt impl e m e nt a ti o n of a noth e r building block

. T his a

pp r o a c h w ould m ea n th a t ov e r a ll, the s a me n a tion w ide l e v e l of e mission re du c tions a s p r opos e d w ould be a c hi e v e d. T he E P A invit e s c omm e nt on this a sp ec t of the p r opos a l. 34893

AWEA Response AWEA agrees with t he use of all the building blocks

to facilitate emissions reductions; however, this should not lead to an over

- reliance upon efficiency improvements an d/or gas redispatch to address emissions reductions. S t a te G o a ls T he d e t a ils of how st a t e s c ould a tt a in e mission

p e r f o r m a n c e l e v e ls c onsist e nt w ith the g o a ls th r o u g h di ffere nt st a t e pl a n a pp r o ac h e s th a t r e c o g ni z e e mission re du c tions a c hi e v e d th r o u g h a ll the building block s a r e dis c uss e d f

u r th e r in Se c tion V II I on st a te p l a ns. W e invite c omm e nt on a ll a sp ec ts of the g o a l c omput a tion p r o ce du r e . (N ote th a t w e a lso invite c omm e nt on cer t a in s p e c i f ic a lt er n a te d a ta inputs to the p r o ce d u r e in S ec ti o n V I .C a bov e)

. W e a lso sp ec i f i ca l l y invite c omm e nt on the st a t e - sp e c i f

ic histo r i ca l d a ta to w h i c h the building blo ck s a r e a ppli e d in o r d e r to c o m pute the st a te g o a ls, a s we ll a s the st a t e - sp ec i f

ic d a ta us e d to d e v e lop the st a t e - sp e c i f ic d a t a inputs f

or building block s 3 a nd 4. 34896

- 34897

AWEA Response AWEA believes that the EPA should take a number

of steps to bett er compute state compliance goals including the use of more recent renewable energy data, inclusion of growth between 2012

- 2017, and less reliance on RPS figures

. S t a te G o a ls I n a ddition to the p r opos e d st a t e sp ec i f i c e mission ra t e b a s e d g o a ls d e s cr ib e d a bov e , the E P A h a s d e v e lop e d f or public c omm e nt a n a lt er n a te s e t of g o a ls ref l ec ti n g l e ss st r in g e nt a ppli ca tion of the building block s a nd a s h o r t e r impl e m e nt a tion p er iod. T he a lt er n a t e f in a l g o a ls r e p re s e nt e mission p erf

o r m a n c e th a t w ould b e ac h i e v a ble b y 2025, af

t e r a 2020

– 2024 ph a s e - in p e r iod, w ith int er im g o a ls t h a t w ould a pp l y d u r ing t he 2020

– 2024 p er iod on a c umul a tive or a v er a ge b a sis a s st a t e s pr o g r e ss to war d the f

in a l go a ls. 34898

AWEA Response AWEA does not support a reduction in the stringency of

the application of BSER.162 | P a g e

S t a te G o a ls W e re qu e st c omm e nt on w h e th er , a nd i f so ho w , t he E P A

should in c o rpo r a te g r ea t e r c onsid e ra tion o f multi

- st a te a pp r o ac h e s into the g o a l s e tting p r o c e ss, a nd on t h e issue of w h e t h er , a nd if so ho w , the pot e nti a l c o s t s a vin g s a sso c i a t e d w ith multi

- st a te a pp r o ac h e s should be c onsid e r e d in a ss e ssing the r e a son a b l e n e ss. 34899

AWEA Response AWEA supports the EPA’s proposal for states to be

allowed to develop multi

- state/regional compliance programs. Such regional app roaches could offer cost

effective carbon solutions and allow for multi

- state coordination to address compliance issues. See I I I. J.8 of comments
. S t a te G o a ls T he f l e x ibili t y inh e r e nt in the r ule is re sponsive t o the C AA’ s r e c o g nition th a t st a te pl a ns f o r e miss i on re du c tion ca n, a nd must, be c onsist e nt w ith a vib ra nt a nd g r o w i ng e c ono m y a nd r e li a bl e , aff o r d a ble e l e c t r i c i t y to suppo r t th a t ec ono m y . T he E P A we l c om e s c omm e nts a nd sugg e stions on this issu e . 34900

AWEA Response The plan’s flexibility allows f or economic growth and reliability as it provides states with the ability to use renewable energy and energy efficiency to comply with goals. This complies with the CAA as renewable energy and EE are demonstrated cost effective and reliable means for emis sions reductions. S t a te P l a ns W ith th i s in mind, w e ar e p r oposing to p r ovide st a t e s

w ith a ddition a l time to submit c ompl e te pl a ns if th e y do so a s p ar t of a multist a te pl a n, a nd w e soli c it c omm e nt on oth e r pot e nti a l m ec h a nisms f or f ost er i n g multi

- st a te c oll a bo ra tion. 34900

AWEA Response We support the proposal that if a state develops a plan

that includes a multi

- state approach, it would have additional time to submit a complete plan. While compliance time frames should be as short as possible, giving more time in this respect could serve to incentivize more states to embrace a multi

- state approach. S t a te P l a ns T he E P A re q u e sts c omm e nt on this p r opos e d a pp r o ac h,

a s oppos e d to the a pp r o ac h und e r w hi c h st a t e pl a ns simp l y w ould be re qui r e d to hold the af f ec t e d E G U s f ully a nd so l e l y re sponsible f or ac hi e vi n g the e mission p erf o r m a n c e l e v e l. 34901163 | P a g e

AWEA Response AWEA agrees that the EPA should authorize states either

to submit plans that hold the affected EGUs fully and solely responsible for achieving th e emission performance level, or to submit plans that rely in part on measures imposed on entities other than affected EGUs to achieve at least part of that level, as well as on measures imposed on affected EGUs to achieve the balance of that level. S t a te P l a ns I n a ddition, the E P A is soli c iting c omm e nt on s e v era l

oth e r t y p e s of st a te p l a ns th a t m a y a ssu r e the r e quisite l e v e l of e mission p erf

o r m a n c e w ithout re nd er i n g c er t a in t y p e s of m ea su r e s fe d er a l l y e n f o rc e a ble a nd th a t l i mit the obli g a tions of the a f

f ec t e d EGU s. 34901

AWEA Response We support the proposed state commitment approach,

under which the state requirements for entities other than affected EGUs would not be components of the state plan and, therefore, would not be federally enforceable. In stead, the state plan would include an enforceable commitment by the state itself to implement state enforceable (but not federally enforceable) measures that would achieve a specified portion of the required emission performance level on behalf of affecte d EGUs. This flexible approach should incentivize more states to embrace renewable energy programs and measures as compliance tools. S t a te P l a ns E P A re qu e sts c omm e nt o n w h a t w e r ef e r to a s a ‘ ‘ st a te c ommitm e nt a pp r o a c h. ’ ’ T his a p p r o ac h di f f e r s fr om th e p r opos e d po r t f

olio a pp r o ac h, d e s c r ib e d a bo v e , in one m a jor w a y : U n d e r t h e st a te c ommitm e nt a pp r o ac h, the st a te re qui re m e nts f

o r e ntiti e s oth e r th a n a f

fec t e d EGU s w ould not be c ompon e n t s of the st a te pl a n a nd th e ref o r e w ould not be fe d e r a l l y e n f o r c e a bl e . I n s t ea d, the st a te pl a n w ould in c lude a n e n f o r c ea ble c ommitm e nt b y the st a t e its e lf to impl e m e nt st a t e - e n f o rc e a ble ( but not fe d e r a l l y e n f

o r c e a bl e ) m ea su re s th a t w ould ac hi e ve a sp ec i f i e d po r tion of the re qui re d e mission p erf o r m a n c e l e v e l on b e h a lf of af

f ec t e d EGU s. T he a g e n c y r e qu e sts c omm e nt on the a pp r op r i a t e n e ss of this a pp r o ac h. 34902164 | P a g e

AWEA Response States should be able to choose approaches in their

compliance plans under which full responsibility for actions achieving reductions is not placed entirely upon emitting EGUs; instead, state plans should be able to include measures and policies (e.g., renewable portfolio standards) for which the state itself is responsible. Therefore, we support the proposed state commitment approach, under which the state requirements for entities other than affected EGUs would not be components of the state plan and, therefore, would not be federally enforceable. S t a te P l a ns T he a g e n c y a lso re q u e sts c omm e nt on the poli c y

r a mi f i ca tions of the f

oll o w in g : U nd e r this a pp r o ac h, the st a te p r o g ra ms upon w hi c h the st a te b a s e s its c ommitm e nt m a y , i n tu r n, re l y on c ompli a n c e b y thi r d p ar ti e s, a nd if t hose st a te p r o g r a ms fa il to ac hi e ve t h e e x p ec t e d e mission re du c tions, the st a te c ould be subj e c t to c h a ll e n g e s

— in c ludi n g b y c iti z e n g r oups

— f or viol a ting C A A re qui r e m e nts a nd, a s a re sult, c ould be h e ld li a ble f

or C A A p e n a lti e s. 34902

AWEA Response We support the proposed state commitment approach,

under which the state requirements for entities other than affected EGUs would not be components of the state plan and, therefore, would not be federally enforceable. Instead, the state plan would include an enforceable commitment by the state itself to implement state enforceable (but not federally enforceable) measures that would achiev e a specified portion of the required emission performance level on behalf of affected EGUs. This flexible approach should incentivize more states to embrace renewable energy programs and measures as compliance tools. S t a te P l a ns W e a lso soli c it c omm e nt on a v ar i a tion of this st a t e

c ommitm e nt pl a n a pp r o ac h th a t is a lso d e s i g n e d to a dd re ss st a k e hold e r c o n cer ns, no t e d a bov e , a bout imposing sole l e g a l re sponsibility on a ff e c t e d E G U s f

or a c hi e ving t h e e mission p erf o r m a n c e l e v e l. 34902

AWEA Response AWEA b elieves states should be able to choose

approaches in their compliance plans under which full responsibility for actions achieving reductions is not placed entirely upon emitting EGUs; instead, state plans should be able to include measures and policies (e .g., renewable portfolio standards) for which the state itself is responsible.165 | P a g e

S t a te P l a ns T he E P A a lso re q u e sts c omm e nt on a noth e r

a pp r o ac h: W h e th e r ‘‘ s t a nd ar d s of p erf o r m a n c e f

or [ af f ec t e d sou r ce s ] ’ ’ is rea son a b l y r ea d to in c lu d e the e mission p erf

o r m a n c e l e v e l ( i

. e ., the st a te g o a l) on g r ounds th a t the l e v e l is ‘‘ a st a nd a r d f or e missions ’ ’ b e ca use i t is in the n a tu r e of a r e q ui re m e nt th a t c on c er ns e missions a nd it is ‘‘f o r’ ’ the af f ec t e d so u rce s b eca use it h e lps d e t er mi n e th e ir oblig a tions und e r the pl a n. 34903

AWEA Response The “standards of perf ormance for [affected sources]” is reasonably read, consistent with EPA’s interpretation, to include the emission performance level (i.e., the state goal) on the grounds that the level is “a standard for emis sions” because it is in the nature of a requirement that concerns emissions and it is “for” the affected sources because it helps determine their obligations under the plan. Measures, such as renewable energy deployment, may be considered “implement[ing]” measures in state plans if they are not directly tied to emission reductions that affected sources are required to make through emission limits, and if they are requirements on entities other than the affected sources. S t a te P l a ns W e soli c it c omm e nt on t he e x t e nt to w hi c h m ea su re s su c h a s renewable energy a nd d e m a nd

- side E E m a y be c onsid ere d ‘‘ impl e m e nt [ in g ] ’’ m ea s u re s in st a te pl a ns if th e y a r e not di rec t l y ti e d to e m i ssion re du c tions th a t af f e c t e d sou r c e s a r e re qui re d to m a k e th r o u g h e mission limi t s, a nd if th e y ar e re qui r e m e nts on e ntiti e s oth e r th a n the af f e c t e d sou r c e s. 34903

AWEA Response Measures, such as renewable energy deployment, may

be considered “implement[ing]” measures in state plans if they are not directly tied to emission reductions tha t affected sources are required to make through emission limits, and if they are requirements on entities other than the affected sources.1 66 | P a g e

S t a te P l a ns T his a lt er n a tive int er p r e t a tion w ould be b a s e d on, f or e x a mpl e : A d e t er mi n a tion th a t C A A s ec tion 111 ( d )( 1) must be rea d a s p rec ludi n g a s t a te pl a n fr om in c luding m e a su re s th a t a r e n e ith e r st a n d ar ds of p e rf o r m a n c e n o r m ea su re s f

o r the impl e m e nt a tion or e n f o r c e m e nt of su c h st a nd a r ds; a n int er

p re t a tion th a t the st a t e’ s obli g a tion to s e t p erf o r m a n c e st a nd ar ds ‘ ‘ f

o r ’ ’ e x isting sou rce s m ea ns t h a t the st a nd ar ds must a

pp l y to af f ec t e d EGU s a nd not to oth e r e ntiti e s; a nd a n int er p r e t a tion th a t m ea su re s ‘ ‘f or t h e impl e m e nt a tion a nd e n f o r ce m e nt of su c h p erf o r m a n c e st a nd ar ds ’ ’ do not in c lude m ea su r e s th a t a r e not int e nd e d or d e s i g n e d to a ssist affec t e d EGU s i n m ee ting the p erf

o r m a n c e st a nd a r ds. T he E P A re qu e sts c omm e nt o n w h e th e r it must a dopt this a lt er n a tive int erp r e t a t ion. I

f so, t h e E P A a lso t a k e s c omm e nt on w h e th e r th e r e is a w a y , n on e th e l e ss, to a llow st a t e s to r e l y on the p o r t f

olio a pp r o ac h to some e x t e nt a nd/or f or some p er iod of tim e . 34903

AWEA Response AWEA agrees with the EPA’s proposal to interpret

Section 111(d)(1) to allow state plans to include components of the portfolio approach that are measures that would reduce emissions from affected sources, even if those measures are neither “standards of performance for existing sources” nor measures “for the implementation and enforcement of such standards of performance.” There is no specific language in Sect ion 111(d) or elsewhere in the act that prohibits states from including measures other than performance standards, implementation, and enforcement measures, provided that they reduce emissions from affected EGUs. S t a te P l a ns T he E P A invit e s c omm e nts on this int er p re t a tion of C A A

s ec tion 111 ( d ) ( 1 ) , in c luding w h e th e r this int er p re t a tion is suppo r t e d b y t h e st a tuto r y t e x t a nd w h e th e r this i n t er p re t a tion is s e nsible p oli c y a nd w ill f u r th e r the g o a ls of t h e st a tut e . 34904

AWEA Response AWEA believes that th e EPA’s interpretation of CAA

section 111(d)(1) is rational and supported by statutory text that further the policies of the CAA.167 | P a g e

S t a te P l a ns I n Se c tion V II I

. B .2.f o f t his p rea mbl e , the a g e n c y a lso

re qu e sts c omm e nt o n a lt er n a tive r e qui re m e n t s a im e d a t c ontinu e d e mission p erf

o r m a n c e imp r ov e m e nt af t e r 2029. I n S ec tion V II I

. B .2

. g of this p rea mbl e , the E P A p r o p os e s f

l e x ibili t y f

or st a t e s to c h a n ge fr om m a ss - b a s e d to r a t e - b a s e d g o a ls in di f

f ere nt p erf o r m a n c e p e r iods a nd, in Se c tion V II I

. B .2.h, w e soli c it c om m e nt on pl a nning re qu i re m e nts th a t m a t c h the option of a lt er n a t i v e , l e ss st r ing e nt st a te g o a ls. 34904

AWEA Response Congress intended for the emission performance

improvements required under Section 111(d) to be permanent. Indeed, EPA has set other Secti on 111(d) emission limits to be met permanently. S t a te P l a ns T he a g e n c y re q u e sts c o m m e nt on a s ec ond option in

w hi c h, in a ddition to s ubmitting a pl a n d e monst ra ting e mission p erf

o r m a n c e th r o u g h 20 3 0, st a t e s w ould be re qui r e d to m a ke a s e c ond su b mitt a l i n 2025 sho w ing w h e th e r th e ir pl a n m ea su re s w ould m a int a in the f in a l

g o a l l e v e l of e mission p erf o r m a n c e o v e r tim e . I f not, the st a te s u bmitt a l w ould be re qui re d to st re n g t h e n or a dd to m ea su re s in the s t a te pl a n to the e x t e nt n e c e ss a r y to m a int a in th a t l e v e l of p erf o r m a n c e ov e r tim e . 34905

AWEA Response We support the EPA’s alternative proposal, under which,

in addition to submitting a plan demonstrating emission performance through 2030, states would be required to make a second submittal in 2025 demonstr ating that their plan measures will achieve the final

- goal level of emission performance over time. S t a te P l a ns T he E P A a lt er n a tiv e l y r e qu e sts c omm e nt on w h e t h e r

st a t e s should be r e qui re d to c r ea te l e g a l a utho r it y a nd/or a dopt r e g ul a tions p r oviding f or c o rr e c tive m ea s u re s in d e v e loping t h e st a te pl a n. T he a g e n c y re q u e sts c o m m e nt g e n era l l y on the c onditions th a t should t r ig g e r c o r rec tive m e a s u r e re qui r e m e nts. 34907

AWEA Response Legislative and/or regulatory action to adopt corrective

measures after a de

ficiency is discovered will take significant time; therefore, state processes to activate corrective measures should be triggered earlier if corrective measures are not adopted in regulation and ready to implement. This allows for a faster and more effici ent approach and ensures compliance by the target date. For plans without corrective measures adopted into regulation prior to complete plan submittal, a higher percent emission performance deviation trigger is appropriate.168 | P a g e

S t a te P l a ns T he E P A a lso re q u e sts c omm e nt on the mil e stone

a pp r o ac h a nd e mission p erf o r m a n c e c h ec ks outli n e d in the c ont e x t of the a lt er n a tive 5

- y ea r p e r f o r m a n c e p er iod a nd t h e pl a nning a p p r o ac h f or a l t er n a tive st a te g o a ls. 34907

AWEA Response AWEA disagrees with the use of a short ened but less

stringent compliance period. S t a te P l a ns T he a g e n c y re q u e sts c o m m e nt on the a pp r op r i a t e time

p er iod ( s) a nd f

in a l y ea r f

o r the E P A’ s c a l c ul a tion of st a te g o a ls th a t ref

l e c t a ppli ca tion of the B S E R und e r this a p p r o ac h. 34908

AWEA Response AWEA feels that a ten year compliance period is an

adequate amount of time for states to reach the CO2 emission reductions goals

. S t a te P l a ns T he E P A not e s th a t C A A s ec tion 111 ( b )( 1 ) ( B ) c a lls f or the E P A , a t l ea st e v e r y e i g ht y e a r s, to re vi e w a nd, if a pp r o p r i a t e , re vise fe d e r a l st a nd ar ds o f p erf o r m a n c e f

or n e w s o u rce s. T his r e qui re m e nt p r ovid e s f or r e g ul a r up d a ting of p erf

o r m a n c e st a nd ar ds a s t e c hni ca l a d v a n ce s p r ovi d e t ec hnol o gi e s th a t ar e c l ea n e r or l e s s c ost l y . T he a g e n c y re q u e sts c omm e nt on the imp li ca tions of this c on ce pt, if a n y , f

o r C A A s ec tion 111 ( d )

. 34908

AWEA Response While Section 111(d) does not require regular review and

revision, as it is silent on the issue, there is nothing preventing EPA from instituting such a review of the standards . In order to ensure that the BSER does not ultimately outpace requirements (new, innovative, or improved compliance tools have been adequately demonstrated) in the 111(d) context as well, EPA should review and revise the Section 111(d) standards as well to capture the technological advance. It would be inconsistent with the statutory scheme to set a weak standard that adequately demonstrated systems achieve and exceed in practice without updating them. Thus, the eight

- year review concept should be applie d to Section 111(d).169 | P a g e

S t a te P l a ns I n Se c tion V I I , the E P A r e qu e sts c omm e nt on

a lt e r n a tiv e , f

iv e - y e a r st a te e m ission p erf o r m a n c e g o a ls f or a f fec t e d EGU s sho w n in Ta ble 9. T he a lt er n a tive g o a ls re p re s e nt e mission ra t e s ac h i e v a ble on a v er a ge du r i n g the 202 0

– 2024 p er iod, a s we ll a s e mission ra t e s to be ac hi e v e d a nd m a int a in e d af t e r 2024. T h e se a lt er n a tive go a ls ar e l e ss st r in g e nt th a n the p r opo s e d g o a ls in Ta ble 8. T o a cc omp a n y the a lt er n a tive g o a ls, the E P A re qu e sts c omm e nt on a noth e r a pp r o ac h f or st a te p l a n p erf

o r m a n c e p er iods. 34909

AWEA Response AWEA disagrees with the use of a shortened but less

stringent compliance period. S t a te P l a ns A s dis c uss e d in s ec tion V II I

. F .1, the E P A is s ee k ing

c omm e nt on w h e th e r the a g e n c y should p r ovi d e g ui d a n c e on e n f

o r c ea bili t y c onsid e r a tions re l a t e d to re qu i re m e n ts in a st a te pl a n f or e ntiti e s oth e r th a n a ff e c t e d E G U s (a nd if so, w hi c h t y p e s of e ntiti e s )

. A lso, a s dis c uss e d in s ec t ion V II I

. F .4, the E P A int e nds to d e v e lop g uid a n c e f

or e v a l u a tion, monito r in g , a nd v e r i f i ca t ion (E M & V ) o f re n ewa b l e e n e rg y a nd d e m a n d

side e n e rg y eff

i c i e n c y p r o g r a ms a nd m ea su r e s in c o r po ra t e d in st a te p l a n s. 34909

AWEA Response EPA guidance on enforceability and EM&V of renewable

energy and EE measures in state plans would be helpful in provi ding s tates with information on how to properly craft a state plan. S t a te P l a ns W e re qu e st c omm e nt on a ll a sp ec ts a sso c i a t e d w i t h

e n f o r c ea bili t y o f a st a te pl a n a nd how to e nsu r e c ompli a n ce . W e ar e a lso s ee ki n g c omm e nt on e n f o r c ea bili t y c onsid e r a tions un d e r di ff e re nt st a te pl a n a pp r o a c h e s, w hi c h i s a dd re ss e d in S ec tion V II I

. F .1. 34909

- 34910

AWEA Response The EGU emission limits would be federally

enforceable, but certain renewable energy measures could serve as complementary measures and would not be en forceable under federal law; instead, they would remain enforceable under state law. The state plan would include an enforceable commitment (state commitment approach) by the state itself to implement state

- enforceable (but not federally enforceable) meas ures that would achieve a specified portion of the required emission performance level on behalf of the affected EGUs.170 | P a g e

S t a te P l a ns T he E P A is s ee ki n g c o m m e nt on w h e th e r st a t e s

p ar ti c ip a ting in a multi

- st a te pl a n should a lso be g iv e n the option of p r ovi ding a si n g le submitt a l

— si g n e d b y a uth o r i z e d o ff

i c i a ls fr om e ac h p ar t i c ip a ting st a te

— th a t a d d re ss e s c ommon pl a n e l e m e nts. I ndividu a l p ar ti c ip a ting s t a t e s w ou l d a lso be re qui r e d to p r o vide individu a l submitt a l s th a t p r ovide st a t e - sp ec i f ic e l e m e nts of th e multi

- st a te pl a n. 34911

AWEA Response EPA’s proposal that only one multi

- state plan could be

submitted on behalf of all participating states should help encourage the adoption of such approaches. But, states participating in a multi

- state plan should a lso be given the option of providing a single submittal.
S t a te P l a ns T he E P A is soli c iting c o mm e nt on w h e th e r th e r e ar e

oth e r e l e m e nts th a t a st a te must in c lude in its i niti a l submitt a l to qu a li f

y f or a d a te e x t e nsion. S p ec i f i ca l l y , the E P A re qu e sts c omm e nt on w h e th e r the g uid e lin e s sho u ld re qui r e a st a te to h a ve t a k e n si g ni f i c a nt, c on c re te st e ps to war d a dopti n g a c ompl e te pl a n f or the initi a l pl a n to be a

pp r ov a bl e . 34916

AWEA Response The EPA should also follow the requirements of the

implementing r egulations, and not extend the timetables, as proposed, unless the state has a valid reason for an extension. At a minimum, states should file an initial proposal within one year and then can submit their complete plans to the EPA if they get an extension . The guidelines should require a state to have taken significant, concrete steps toward adopting a complete plan for the initial plan to be approvable

. S t a te P l a ns T he E P A re q u e sts c omm e nt on this option

– th a t

e mission re du c tion eff

e c ts th a t o cc ur p r ior to the b e g inni n g of the initi a l pl a n p erf o r m a n c e p er iod c ould be a ppli e d t o war d m ee ti n g the re qui r e d l e v e l of e mission p e rf o r m a n c e in a s t a te pl a n. 34919

AWEA Response EPA should allow credit for new carbon reduction

actions, including increasing exis ting policies, taken after January 1, 2014, and before the plan performance period (2020) to count toward achievement of the state's 2030 carbon emission goal. The accounting for year

- to

- year carryover should be addressed in a state plan, in order to dete rmine the credits that occurred in a respective reporting year or compliance period. This could include time differentiation on an hourly, daily, or seasonal basis.171 | P a g e

S t a te P l a ns W e ar e s e e king c omm e nt on w h e th e r the e mission eff e c ts of a c tions th a t a r e t a k e n a f t e r p r opo s a l or p r omul g a tion of the e mission g uid e lin e s or t h e a pp r ov a l o f a st a te pl a n , but w hi c h o cc ur p r ior to the b e g inning of t h e initi a l st a te pl a n p erf o r m a n c e p er iod, c ou l d be a ppli e d to war d m ee t ing the r e qui re d l e v e l of e mission p erf o r m a n c e in a st a te pl a n. 34919

AWEA Response EPA should allow credit for new carbon reduction actions,

including increasing existing policies, taken after January 1, 2014, and before the plan performance period (2020) to count toward achievement of the state's 2030 carbon emission goal. S t a te P l a ns W e ar e s e e king c omm e nt on the suit a bili t y o f th e s e

a pp r o a c h e s in the c ont e x t of a n a pp r ov a ble st a te pl a n, a nd on w h e th e r h a r moni z a tion of st a te a pp r o ac h e s, o r su p pl e m e nt a l ac tions a nd p r o ce du re s, should b e re qu i r e d in a n a p p r ov a ble st a te pl a n. I n p ar ti c u l ar , w e int e nd to e st a blish g u i d a n c e f

o r a cce p t a ble qu a nti f

i ca tion, monito r in g , a nd v er i f

i ca tion of renewable energy a nd d e m a nd

- side E E m e a su re s f or a n a pp r o v a ble E M & V pl a n, a nd a r e s ee k i ng c omm e nt on cr iti ca l f ea t u re s of s u c h g uid a n ce , in c ludi n g s c o p e , a ppli ca bili t y , a nd minimum cr it er i a . W e a r e a l s o s ee king c omm e nt on the a pp r op r i a te b a sis f or a nd t e c hni ca l r e sou r c e s us e d to e st a blish su c h g uid a n ce , in c ludi n g c on s id era tion of e x isting st a te a nd utili t y p r oto c ols, a s we ll a s e x isting int er n a tion a l, n a tio n a l, a nd r e g ion a l c ons e ns u s st a nd ar ds or p r oto c ols. 34921

AWEA Response AWEA also supports the EPA developing guidance

materials on acceptable EM&V methods that could be incorporated in an approvable EM&V plan that is included as part of an approvable state plan. The EPA should issue a guidance document as soon as possible and seek public comment on that document so that states will have a better idea of how to develop a state plan. Such a guidance document should include the analytic methods, assumptions, and data sources that the state will employ during the state performance periods to determine the energy savings and energy generation related to renewable energy and EE measures. S t a te P l a ns T he E P A is re qu e sti n g c o mm e nt on the m er its of this

a pp r o ac h, in c ludi n g w h e th e r su c h g ui d a n c e s hould id e nti f y t y p e s of renewable energy a nd d e m a nd

- side E E m ea su re s a nd p r o g r a ms f

or w hi c h e v a lu a tion of re sults is re l a tiv e l y st r a i g ht f o rwar d a nd w hi c h ar e a pp r op r i a te f or in c lus ion in a st a te pl a n. 34921172 | P a g e

AWEA Response AWEA strongly discourages the EPA from limiting the

type of renewable energy “measures” that may be considered as compliance tools. However, a list of renewable energy and EE measures for which evaluation of resul ts ins relatively straightforward may be of use to states as a way of identifying pathways to compliance. See III.J.5 of comments

. S t a te P l a ns A s a n a lt er n a tive to the E P A’ s p r opos e d a pp r o ac h of

a llo w ing a b r o a d ra n ge of renewable energy a nd d e m a n d

side E E m ea su re s a nd p r og ra ms to be in c lud e d i n st a te pl a ns, p r ovid e d t h a t suppo r ting E M & V do c um e nt a tion m ee ts a ppli c a ble minimum re qui re m e nts, the E P A is re qu e sti n g c omm e nt on w h e th e r g uid a n c e should limit c onsid era tion to cer t a in we ll

- e st a blish e d p r og ra ms, s u c h a s those c h ar a c t er i z e d in S ec tion V

. A .4.2.1 of the S t a te P l a n Consid era tions T S D

. 34921

AWEA Response AWEA strongly discourages the EPA from limiting

the type of renewable energy “measures” that may be considered as compliance tools. By placing limit ations on the types of renewable energy measures considered, the EPA establishes a more onerous burden on states to comply with EPA mandates and impairs the ability of building block Three to be implemented to its full potential as a means of reducing carb on emissions. AWEA strongly urges the EPA to signal that all renewable energy purchases that are not entered into pursuant to such things as state plans or measures, such as an RPS, can be used as compliance tools. See III.J

. 5 of comments

. S t a te P l a ns T he E P A is s ee ki n g c o m m e nt on the options f or t rea tm e nt of int er st a te ef

f e c ts summ ar i z e d b e lo w , a s we ll a s a lt er n a tiv e s. 34921

AWEA Response We agree with EPA’s proposal that a state should be

able take into account all of the carbon emission reductions from renewable energy measures implemented by the state, whether they occur in the state or in other states. See III.G of comments

. S t a te P l a ns T he E P A is a lso s ee ki n g c omm e nt on how to a void double

c ounting e mission re du c tions using the p r opos e d a pp r o a c h f or a c c ounting f

or C O 2 e mission re du c tions fr om re n e w a ble e n e rg y m e a su r e s impl e m e nt e d b y t h e st a t e . 34922173 | P a g e

AWEA Response Tracking systems currently in existence can serve as a

method of accounting for the transfer of renewable energy . If used properly t hese systems could effectively avoid double counting and aid states in demonstrating compliance with the rule. See II. E and III.G.5 of comments

. S t a te P l a ns W e a lso re qu e st c omm e n t on the option of a llo w ing

a st a t e to t a ke into a c c o unt on l y those C O 2 e m ission re du c tions o cc u rr i n g in its st a t e . 34922

AWEA Response AWEA disagrees with the option of allowing a state

to take into account only those emission reductions occurring in state as a robust trading and regional market allows for more effective emiss ions reductions and lower compliance costs. S t a te P l a ns W e a lso re qu e st c omm e n t on w h e th e r a st a t e should be

a ble to t a ke cre dit f

o r e mission re du c tions out of st a te due to re n e w a ble e n e rg y m e a su r e s if the st a te c a n d e mo n st ra te th a t the re d u c tions w ill not be double c ount e d w h e n the re l e v a nt st a t e s re po r t on th e ir ac h i e v e d pl a n p e rf o r m a n ce , a nd on w h a t su c h a d e monst ra tion should e nt a il. 34922

AWEA Response AWEA agrees with the crediting of emissions reductions

from out of state sources due to renewabl e energy measures if the state can demonstrate that double counting has not occurred. State can use a number of existing measures to prevent double counting. S t a te P l a ns W e ar e s e e king f u r th e r c omm e nt on w h e th e r the E P A should d e v e lop g u i d a n c e th a t d e s cr ib e s ac ce pt a ble p r oj ec tion a pp r o ac h e s, tools, a nd m e thods f or use in a n a pp r ov a ble pl a n, a s w e ll a s p r oviding t ec hni c a l r e sou r c e s f or c ondu c ting p r oj ec tions. 34923

AWEA Response AWEA believes that EPA guidance for states on crafting

an approvable plan will provide for faster and smoother adoption of state plans. S t a te P l a ns T he ag e ncy soli c its c omm e nt on w h e th e r c er t a in oth e r

m ea sur e s not us e d to s e t st a te go a ls a re a pprop r i a te to in c lude in a state plan to achieve CO2 emission reductions from affecte d EGUs. In addition to the specific requests for comment re l a t e d to spe c i f ic t ec hnologi e s id e nti f

i e d, we a lso re qu e st c omm e nt on oth e r m ea sur e s th a t w ould be a pp r op r i a t e . In a ddition, w e re qu e st c omm e nt on w h e th e r the E PA should p r ovide sp ec i f ic guid a n c e o n in c lusion of th e se m ea su re s in a st a te pl a n. 34923174 | P a g e

AWEA Response EPA should provide clarity as to the technologies that

can be used as compliance options, provide guidance on incorporating them into state plans, and factor them into the BSER. In the f

inal rule, EPA should explicitly recognize the technologies that can serve as compliance options and provide guidance to states on the use of these technologies in compliance plans. S t a te P l a ns T he a g e n c y re q u e sts c o m m e nt on how e mission c h a ng e s

und e r a ra t e - b a s e d pl a n re sulting f r om substitution of g e n era tion b y n e w NG C C f or g e n e r a tion b y af

f e c t e d EGU s should be c a l c ul a t e d t o war d a re qui r e d e mission p erf o r m a n c e l e v e l f

or af f ec t e d EGU s. 34924

AWEA Response Emissions changes under a rate

- based plan res ulting from

substitution of generation by NGCC for generation by affected EGUs should be calculated toward a required emission performance level for affected EGUs. If not, some states with modest targets could achieve their 111(d) goals by merely closing existing coal plants and replaci ng them with natural gas plants, resulting in less overall carbon emission reductions.