WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 1 

### Pollution Prevention Workshop for the Preparation o f

Section 309 SIPs and TIPs

May 20-21, 2003, Portland, OR

Executive Summary

Background

The workshop brought together representatives of th e energy and air pollution regulatory

communities in the western states to discuss their approaches to the pollution prevention portion of Section 309 of the Regional Haze Rule. The purp ose of the workshop was to reach a common understanding of what the pollution prevention sect ion of S. 309 requires, discuss how best to meet those requirements, and establish a basis for consistency, where appropriate, among states/tribes submitting State Implementation Plans (SIPs) under this section of the Regional

Haze Rule.



### Action Items

• WRAP will find AP2 Forum language that addresses re cognition and beyond–compliance programs provisions in Paragraph (ii);

• Jeff Burks will contact John Nielsen at the Land an d Water Fund of the Rockies regarding

resource atlas documents for each of the states sho wing renewable energy potential in response to Paragraph (iv);

• Lee Alter from the WRAP will create common language that all the states can use to respond to Paragraph (v), (included in the “Key Points” sec tion of this Executive Summary, and also in the Workshop Session Notes at the end of the Par agraph (v) discussion);

• Jeff Burks will develop common language for Paragra ph (v) that every state could file with the regional modeling results from the ICF study;

• Scott Manzano will work on developing common langua ge in response to Paragraph (vi) that will assist the states in explaining why regional d ata has been submitted, rather than data showing how each state is individually contributing to the regional 10 / 20 goals;

• WRAP will identify the regional goals established b y the ICF Consulting report for 2005 and 2015 in response to Paragraph (vi);

• WRAP requested that each of the states provide a dr aft of their S. 309 submittal before July 30 to allow them to undertake some consistency anal ysis on the states’ responses; and

• The states participating in the workshop requested that WRAP post all relevant background documents to the web, including the latest P2 secti ons of the STIP template, the ICF studyWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 2 summary, presentations and notes from this workshop , and example materials from each of

the states.



### Key Points

The group discussed the background and history of t he WRAP, the pollution prevention (P2) provisions of Section 309 of the Regional Haze rule , and the potential for energy efficiency (EE) and renewable energy (RE) to provide solutions to r egional haze.

The workshop featured presentations from ICF Consul ting and The Tellus Institute, which had performed regional modeling to determine the visibi lity and economic impacts of states meeting the 10/20 goals established by the Grand Canyon Vis ibility Transport Commission (GCVTC) in 1996. The participants learned about the latest re visions to the SIP template prepared by WESTAR. States provided their interpretations of t he best way to address the provisions contained in this part of the rule.

Several overarching themes and guidelines came out of the workshop, which focused on developing a baseline of the minimum information ne cessary for an adequate filing. The group noted that, at a minimum, a state’s Section 309 fil ing could center on energy / electricity. However, if a state has information on P2 programs beyond this scope, it can be included for a broader P2 filing.

Key points on the provisions of Section 309 of the regional haze rule, as discussed by workshop participants, follow in a paragraph-by-paragraph fo rmat.

Paragraph (i)

• The group discussed that the initial list of P2 pro grams focus first on EE and RE in states that are going the Section 309 (S. 309) route. It is at a state’s discretion to include other kinds of P2 programs in this list, but states may also want to consider putting information about nonEERE programs in other appropriate sections in thei r S. 309 SIP.

• For purposes of determining what to include in the inventory of all renewable energy generation capacity and production in use or planne d as of 2002, states discussed using two key guidelines:
 Installations that are included in integrated resou rce plans (IRPs); or
 Installations for which there is money on the table or a permit issued or in process.

• To determine a state’s anticipated contribution tow ard the 10/20 goals, the states indicated that not only could a state include the generation capacity of installations within its boundaries, but also that states could interpret th at “contribution” could include the amount of renewable generation consumption occurring in th e state.

• Listing the programs intended for use as EE as well as all the programs intended for use to meet 10 / 20 RE goals coincidentally produces a sum mary of P2 programs. The group noted that off-the-shelf information is preferable to try ing to develop new information. In keepingWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 3 with the discussion of guidelines for renewable ene rgy generation capacity and production, Arizona representatives suggested a rule of thumb t hat considered a project “planned” only if money had been expended or a permit issued, in orde r to reduce the potential for projects in their earliest study stages to be included in the S IP, and later abandoned or not developed.

Paragraph (ii)

• The group noted that “Beyond Compliance” does not n ecessarily refer to the 10 / 20 goals, but could include compliance with other regulations affecting the electricity / energy sector.

• Two approaches to responding to this paragraph were discussed:

 Using a cross-reference to Paragraph (i)’s response , using AP2 Forum language that WRAP offered to identify.

 Focusing on programs such as Supplemental Environme ntal Programs, where available, laws that trade regulatory certainty for early comp liance, and recognition and awards programs, both state-sponsored (such as New Mexico’ s Green Zia program) and national (such as Energy Star).

Paragraph (iii)

• States may wish to use standard language for this s ection. The “best practices” list from AP2 Forum is a good list of areas to investigate / incl ude in a standard response to this section, using the WESTAR STIP template as a basis. A state could supplement this response by including additional information and data in the ap pendices.

Paragraph (iv)

• States may wish to respond to this paragraph in lar ge part by using maps and supporting documentation. Utah, for example, is using maps fr om the Renewable Potential Atlas developed by the Land and Water Fund of the Rockies (LFWR). Jeff Burks will contact LWFR for a packet for each of the 5 states particip ating in the workshop.

• Generally speaking, states indicated that this para graph reflects one idea – areas that are BOTH off-grid AND cost effective for RE. A general rule of thumb that some of the states participating in the workshop use is as follows: If you go farther than 1⁄4 mile from transmission system, RE becomes a cost effective al ternative to transmission line improvements. A reference to this “1⁄4 mile rule of t humb” in the SIP filing may be sufficient to apply in addressing this paragraph.

Paragraph (v)

• The years 2005, 2010, 2015, 2018 are the years used in the in ICF Consulting models, and the sense among participants was that these could b e good dates to use as guidelines for determining “short-term” and “long-term” goals. Th e states noted that a common presentation of the ICF model regional results migh t be appropriate in responding to this paragraph, and pointed out that non-participant sta tes such as CA and NV are doing their partWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 4 to meet the 10/20 goals through their RPS and other mechanisms. In moving forward, Utah representatives said that they would work with the WRAP to draft some common language for all the S.309 states to file, potentially liber ally excerpting from the ICF modeling study.

• The initial draft of common language provided by th e WRAP at the workshop is as follows: "Projections of visibility improvements for the 16 Class I areas on the Colorado Plateau are provided in Table 1 [of the SIP template]. These p rojections include the combined effects of all measures in this SIP, including air pollution p revention programs. Although emission reductions and visibility improvements from air pol lution prevention programs are expected at some level, they were not explicitly calculated because the resolution of the regional air quality modeling system is not currently sufficient to show any significant visibility changes resulting from the marginal nitrogen oxide emission reductions described above for air pollution prevention programs."

Paragraph (vi)

• States noted that providing information based on th e regional data from the ICF modeling could be an appropriate response to this paragraph. A response to this paragraph could make reference to the programs outlined in Paragraph (i) ’s response, the LWFR maps, and make the case that if all 9 states were to participate i n S.309 filings, the state’s contribution to the total 10 / 20 goals would be X; however, since 9 st ates will not participate, the state will update the information about its contribution as pa rt of the next SIP update.

• Each filing may need to include language to address why this is not parsed out on a state-bystate basis. Oregon offered to develop a draft of such language.

• Currently, there is no coordinated effort working o n adding up 309 states’ contribution and

the estimated contributions from non-309 states to determine whether the 10/20 goals are being met regionally. States suggested that this m ight be a function for the WRAP.



### Next Steps

WRAP requested that states share drafts of their S. 309 filings in order for some consistency review to occur prior to the final submission deadl ine. This was suggested as a way to facilitate a smooth review process with EPA. States participa ting in the workshop indicated they would provide their draft S. 309 filings to the WRAP befo re July 30, 2003.

More complete discussion notes from the workshop, a ction items, and information on approaches states may want to consider regarding S. 309 are in cluded in the attached meeting notes. In addition, there is a possibility that the WRAP may convene one or more conference calls to facilitate an ongoing dialogue to follow up on issu es and discussions from this workshop.

Attachments Workshop Agenda Workshop Session Notes Workshop Attendee ListWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 5 

### Attachment 1: Agenda

Pollution Prevention Workshop for the Preparation o f Section 309 SIPs and TIPs May 20-21, 2003; Portland, OR

Tuesday, May 20

1:00 Workshop Overview and Introductions

1:15 Summary of WRAP Products, and Workshop Materia l

History of AP2 work (Jeff Burks) – 15 minutes

Development of renewable energy options (Jeff Burks ) – 10 minutes

Development of energy efficiency options (David Von Hippel) – 15 minutes

ICF report (Bishal Thapa) – 30 minutes

SIP template (Brian Finneran) – 10 minutes

Summary of Utah process/approach (Van Jamison) – 10 minutes

2:45 Break

The workshop is organized according to the paragrap hs in Section 309 pertaining to air pollution prevention. Through a series of facilita ted roundtable discussions on each paragraph, participants will address the following questions:

What does the paragraph mean and what is required?

What have states done so far?

How can states and tribes use WRAP products and oth er information sources?

What additional assistance might states/tribes need to complete SIPs/TIPs?

How important is inter-state/tribe consistency, and how do we best achieve it?

What issues deserve follow-up with EPA and/or other s?

3:15 Summary of 309(d)(8) Requirements (Bruce Polko wsky)

3:30 Section 309(d)(8)(i)

5:00 Adjourn

Wednesday, May 21

8:00 Section 309(d)(8)(ii)

8:30 Section 309(d)(8)(iii)

9:00 Section 309(d)(8)(iv)WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 6 10:00 Break

10:30 Section 309(d)(8)(v)

12:00 Lunch provided

12:30 Section 309(d)(8)(vi)

2:00 Next steps

2:30 AdjournWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 7 

### Attachment 2: Workshop Session Notes

Agenda Topic 1. History of AP2 Work Pollution prevention can refer to several waste str eams. In this context, the AP2 Forum has interpreted it to focus on measures that affect air quality and specifically to regional haze. The language arises out of work of Grand Canyon Vis ibility Transport Commission. GCVTC concluded that EERE strategies provide real b enefits toward achieving visibility improvements, and developed the 10 / 20 goals: 10% RE in regional portfolio by 2005, 20% by 2015.

(See Jeff Burks’ slides for more detail)

Agenda Topic 2. Development of Renewable Energy Opt ions (see J. Burks’ slides for more detail)

Agenda Topic 3. Development of Energy Efficiency Op tions (see J. Burks’ slides for more detail)

Agenda Topic 4. ICF Report

David von Hippel David Von Hippel made a presentation on the study p erformed by ICF and Tellus that examined the economic impacts of 10 / 20 goals for two regions: West Interior and Oregon / W. Idaho. The model predicted the incremental effe cts of measures that would need to be taken to meet the WRAP’s 10 / 20 renewable energy g oals with, and without, investments in energy efficiency.

The evaluation method used took four steps:

• Grouped measures by type

• Estimated market

• Estimated penetration

• Estimated administration costs

Programs assessed included cooling, residential sys tems, lighting, eating, appliance efficiency, green buildings, refrigeration, fuel sw itching, miscellaneous device efficiency, “retro-commissioning” follow-up, transformer effici ency, motors, CHP, etc., for residential, commercial, industrial sectors.

CHP was removed for the resulting modeling because of anomalies in the model.

Modeling results: Regarding annual energy savings, large contributions were made from commercial lighting and cooling efficiency. Summer peak, cost, etc, were modeled. Savings were calculated and used to develop “measure cost c urves”. Costs were estimated based on electricity sales.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 8 The outputs of the initial ICF modeling run include d regional annual energy and peak savings; net costs; net annual costs; and cost effe ctiveness. The results of this modeling were input into REMI modeling software to determine the economic impact. This modeling considered investments made before 2018 (the horizo n for Regional Haze SIP planning) for improvements going until 2023. (See presentation slides for more detail)

Bishal Thapa, ICF Consulting This presentation focused on a study that Bishal Th apa had performed that compared a

“business as usual” case with what would occur if s tates met 10 / 20 goals. His study does not look at how incentives lead to targets, but loo ks at what economic impacts result from trying to meet a set of targets.

ICF based the study’s assumptions on another previo us market trading forum report that had assumptions that could, in large part, be used agai n for this purpose. The AP2 Forum reviewed these assumptions, discarding or modifying those that were not applicable. The remaining assumptions were plugged into the integra ted planning model. The IPM model figures out how electricity markets adapt to exogen ously produced goals. IPM looks regionally, and this complicates derivation of stat e-level results. The steps taken in this modeling were:

• Modelers derived the state- / tribal-level cost imp acts

• Plugged the results of this analysis into regional economic impact model (REMI) analysis

• REMI produced the regional economic model

The first scenario modeled was for “business as usu al”:

• Provided a basis for comparison with alternate futu res to determine level of impacts;

• Includes the SO2 trading program;

• No additional efforts to promote EERE were included in the assumptions;

• No improvements in the cost of renewable energy tec hnologies; and

• For wind, specifically, there is no significant new penetration, even though there is slight increase in the amount of wind being deployed.

ICF then modeled scenarios based on regional RE tar gets, with and without EE strategies. The adoption of a regional target in the model mean s that no state-level specific targets were developed. To be included in the modeling, a syste m must be within the transmission system, within GCVTC region, and fit cost-effective ness criteria.

The modelers took RE targets and reduced demand for model purposes: anything under 5.1

c/kW was deemed cost effective. Grid load served b y RE is assumed to grow to 8% by 2018. Cost modeling included assumptions for avoided T&D improvements, new generation.

Electricity System Impacts The model results for RE only show that meeting the 10 / 20 goals will increase production costs from $17.4B under BAU to 17.7B for compliance purposes (about 2% of the total). With RE improvements added to the model, the costs increase $900 M by 2018.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 9 Based on generation dispatch, the displacement of f ossil fuels by RE by 2018 will take form

as follows:

• Existing coal persists; expansion of coal is affect ed somewhat;

• Fuel most displaced is new and existing oil and gas ;

• Hypothetical scenario excludes EE and some potentia l unknown effects;

• Potential gremlins include Clear Skies, mercury pro visions, and future carbon regulations.

The model indicates that new RE that is developed w ill be predominantly wind; smaller levels of geothermal, small amount of landfill gas. Solar and biomass / gasification projects were not heavily featured.

Annual savings with EE were also modeled to determi ne the annual savings with EE / RE with 10 / 20 goals. EE saves $1 billion even after taking implementation cost into account. Satisfying 10/20 goals increases the costs, but ove rall the savings are approximately $700 million annually.

Emissions Reductions

With regard to emissions reductions, there is a 1-2 % reduction in NOx in the scenario including EE strategies. This occurs in the model because although the model assumptions include cleanest new additions, there is no guarant ee that SCR will be on all systems, nor that gas will predominate future siting. The model ass umes a 65-year lifetime for existing coal facilities – few leave the system in the lifetime o f the model. Therefore modeling reflects that the RE strategies provide a “hedge” against hi gh-emissions capacity additions.

When EE is added to meeting the 10/20 goal assumpti ons in the model, the total electricity generated is less than it would have been without E E. Because the total electricity generated is lower, the 10% and 20% RE contribution goals are lower as well: 10% and 20% of total grid electricity is less in absolute terms because total grid electricity generation is reduced by the implementation of EE.

The model also shows that meeting the 10/20 goals w ith EE will result in 10% – 15% reductions in CO2. The Regional Haze Rule asks for “secondary environmental benefits”, and this is a good example of a secondary environme ntal benefit that can be included in a state’s filing.

The model shows that SO2 emissions will be unaffect ed because of a hard cap that is assumed on SO2 as part of the emissions trading pro gram. Bringing in EE / RE lowers grid demand, but reducing demand under the cap will allo w another producer to emit more, as long as the total emissions remain within the cap l imits. Therefore, meeting the 10 / 20 goals reduces the price of allowances since fossil genera tion does not need as many allowances to meet the cap, which reduces demand for emissions al lowances and consequently reduces the allowance price. Combining EE with the 10 / 20 lev el RE also reduces the need forWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 10 investments in scrubbers by 1200 to 1700 MW (this i s confusing). If a wind supplier retires their SO2 credits, then the cap is effectively lowe red, and the cost of the remaining allowances will increase. If wind and other RE gen erators sell their allowances to recoup differential costs, the level of the cap remains th e same, and prices for allowances decrease.

Economic Impacts The modeling results for meeting the 10/20 goals sh ow that the economic impacts are small; less than 1⁄2 percent regionally. Two states have neg ative employment impacts, but regionally, employment improves. The increased cost of electri city impacts the economy by reducing disposable income (since more will need to go to el ectricity), but regionally, disposable income increases. Gross regional product is affecte d negatively because cost of one raw material – electricity – increases, raising costs f or manufacturers. In a local context, changes can be large-scale; but regionally changes are smal l but positive. Overall costs to electric power sector are 1 – 5 percent.

Agenda Topic 5. SIP Template

Brian Finneran – OR DEQ Brian Finneran provided information on a draft temp late that outlines a potential S.309 filing. The idea for a template to provide some guidance fo r states came from WRAP Air Managers Committee. The goal of producing this document is to help States and tribes write their first 309 SIP filing. Rosanne Sanchez, NM, is developing a SIP template for Tribes.

All the chapters in the template follow the same fo rmat:

• Section 1: verbatim regulatory language

• Section 2: Discussion of requirements

• Section 3: suggested SIP language

• Section 4: summary of available policy and technica l documentation.

Imminent compliance deadlines are driving the speed y development of a final template. The template will be finalized soon and posted online a t http://www.wrapair.org

The Technical Support Document (TSD) included with the SIP template summarizes all the technical documents put together to date for SIPs. For states moving forward, the Draft 309 STIP template is one alternative, and it might be u seful to compare with Utah’s template.

Questions that the group felt warranted considerati on when discussing the SIP Template

included:

• What are the basic requirements for the filing?

• What similarity/consensus is needed among different state SIP submissions?

• What is EPA going to be looking for?

The group generally concurred that the advantage of a consensus document is that greater uniformity increases the chances that EPA will appr ove the filings. It does no good for EPA to approve states’ SIPs piecemeal because of the t rading program, and EPA is aware of this.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 11 If all of the five states considering filing S. 309 filings (UT, OR, AZ, NM, and WY) proceed in this direction, four different EPA regions will be involved in reviewing and approving these filings.

Agenda Topic 6. Summary of Utah Process/Approach

Van Jamison States that decide to file Section 309 will likely face similar “hoops,” so Van Jamison provided information concerning how Utah has interp reted each section as a basis for

discussion.

Utah tried to sort paragraphs of S. 309 (d) (8) int o basic components to determine what information they were supposed to supply. Utah beg an by developing of a matrix of required elements, used this to develop a workplan. They th en developed / gathered / synthesized information to satisfy requirements. One of the ma in lessons learned is that there is no onestop shop for perfect information – but the rule re quires reasonable information with a rational basis for using it, not perfect informatio n.

For example, to determine renewable capacity in Uta h, Van Jamison started with information available from the DOE’s EIA. This program has inf o for 10MW+; Utah has information from net metering, installed credit; etc. Informat ion on renewables that were too small to be significant against the total Utah generating capac ity was not included. Utah did run a survey to find information from some smaller systems that, when aggregated, offered capacity of enough significance to be included. This informati on was carefully parsed through to avoid double-counting in the filing.

For EERE program descriptions, the Utah Energy Offi ce began by developing list of potential information sources. Information gatheri ng was followed by development of program descriptions in a template. This template is a standard reporting format for EERE programs that considers “programs” broadly speaking , and considers the “components” of these programs individually where necessary.

(Note: “Program” means different things to someone with an Energy perspective than to someone with an Air Quality perspective; the latter might look for enforceability. This is reflected in Van Jamison’s approach to filling in U tah’s Component and Program templates, although not all programs included are enforceable. )

The Utah Energy Office has been filling in the data -gathering templates and has created an outline of all the chapters that are outlined in S. 309. Each chapter is being fleshed out by the data from the data-gathering templates. These chap ters, including data modeled after the WESTAR template, form the basis for the current ver sion of Utah’s draft filing. The next steps for developing Utah’s SIP filing include revi ew and input by stakeholders.

Discussion The question was raised about balancing perfect inf ormation with using “rational basis” for actions - how does that interpretation sit with EPA ? Van Jamison’s response was that S. 309,WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 12 once implemented, includes a process for periodic u pdates, so future filings do not need to

reinvent the wheel. The idea is documentation with reasonable support.

Another topic for discussion at the meeting focused on whether the inventory of pollution prevention (P2) in Paragraph (i) refers to a wide s pectrum of P2 activity, or is intended to focus on energy / electricity. The group decided t hat the focus is on energy / electricity, but if there is information that can be surveyed outsid e this area, it is includable. The rule language calls for “an initial summary”. The goal is a SIP that is readable, so filers could put highly technical support information into appendice s. Utah’s current draft includes some of

this – future drafts will move some technical infor mation to appendices. Support documentation (such as the PacifiCorp IRP) will be included in the SIP TSD.

(A suggestion from the group was to follow the exam ple of the AP2 Forum, which passed transportation information to the Mobile Sources Fo rum, rather than dealing with it in the

context of the Pollution Prevention Forum. Similar ly, mobile source reductions could be

addressed in the mobile sources section of the SIP instead of the P2 section.)

The group noted that one potential outcome of this workshop is agreement among the states to develop a common format that meets all of their needs.

Agenda Topic 7. S. 309 (d) (8) overview

Bruce Polkowsky, NPS Bruce Polkowsky began his remarks by noting that he had played a role in putting together the rule language, and that although it had been so me time since he was with the relevant EPA office, he would try to detail some of the orig ins and original intent of the language in

the rule.

He noted that this section is new to EPA as well as to states, so states have an opportunity to help define what satisfies the rule’s requirements. Furthermore, EPA’s attention may focus on the command-and-control market piece, and not de al with the P2 section as thoroughly.

Paragraph (i) focuses on documenting programs that are in your state.

Paragraph (ii) deals with incentives for actions th at take a state beyond compliance. The difficulty arises for states that do not have exist ing programs that go beyond compliance: do you need to have such programs to satisfy the rule requirements?

Paragraph (iii) asks for programs that “preserve an d expand energy conservation”. There has been an emphasis on market-driven initiatives since deregulation and restructuring occurred in many states. The concern at the time the rule w as written was that rate-based sponsors of demand side management (DSM) would be taken out of the picture under restructured market-based electricity systems. This section foc uses on how states can preserve DSM programs in the face of deregulation.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 13 Paragraph (iv) was focused on tribes, to encourage states to look for areas where capacity additions could be served by renewables. More gene rally, Paragraph (iv) looks for ways to develop RE in off-grid areas.

Paragraph (v) allows states to turn to work done by groups like WRAP to provide information for SIP at the state level. A question raised during discussion was whether or not this could be sufficient. States may or may not h ave to justify their own portion of the model results with regards to their contributions t o the regional goals. EPA may accept regional-based TSD information for Paragraphs (v) a nd (vi).

Upon completion of the introductory presentations a nd remarks, workshop participants engaged in a paragraph-by-paragraph discussion of t he meaning and requirements of the Section 309 rule language.

Agenda Topic 8. Paragraph-By-Paragraph Review

Paragraph (i): An initial summary of all pollution prevention pro grams currently in place, an inventory of all renewable energy generation cap acity and production in use, or planned as of the year 2002 (expressed in megawatts and megawatt-hours), the total energy generation capacity and production for the S tate, the percent of the total that is renewable energy, and the State’s anticipated contr ibution toward the renewable energy goals for 2005 and 2015, as provided in §51.309(d)( 8)(vi).

Discussion Notes

The group discussed whether it made sense to first examine “ an initial summary of all pollution prevention programs currently in place” , and get any interpretations from states.

The group noted that the rule’s authors intended fo r there to be a difference between EE, RE and P2 programs. Consequently it may be aimed at mo re traditional energy sources, as well as a broader range of activities that result in pol lution prevention (example: solvent substitution)

One comment was that the authors wanted as broad a set of included programs as possible. Therefore it might be worthwhile to prioritize prog rams based on effectiveness at reducing regional haze. One direction would be to approach EPA with prioritized list.

The group was informed that Arizona focused on EE a nd RE programs, and not on broader P2 programs. Representatives from Utah said that a potential approach would be to prioritize those that have greatest impact on Class 1 areas. The group noted that if you claim credit for

mobile and area source P2 in the mobile and area so urce sections, rather than here, it is reasonable to think EPA will allow you to focus on energy in section 309 d 8.

The group discussed whether listing the programs in tended for use as EE, and all the programs intended for use to meet 10 / 20 goals, co incidentally produces a summary of P2 programs. The group observed that this could create a common minimum to satisfy the filing,WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 14 although some states could do more if they chose to . States considering going beyond energy / electric generation P2 could do so, but the focus for this workshop was on developing the baseline for an adequate filing, the “Volkswagen” m odel for a SIP filing, not the “Cadillac.”

Next item : “inventory of RE generation capacity and producti on numbers in use, or planned as of the year 2002 (expressed in megawatts and megawatt-hours) ”

In the definition of RE, the AP2 Forum recommends i ncluding only hydroelectric power (hydro) meeting Hydro Institute’s renewable certifi cation requirements. Utah has no certified facilities, so for now, is not counting h ydro in SIP as renewable; leaving open the possibility of future-certified facilities in futur e SIP filings. Small capacity systems were surveyed at a “reasonable” level by contacting vend ors, looking at PSC records for netmetering tariff. Basic intent was to provide basis for claim that policies exist to encourage RE. Oregon representatives noted that this state’s Public Service Commission tracks renewables for solar, wind, etc. at a low nameplate capacity level.

The group observed that off-the-shelf information i s preferable to trying to develop new information. Record-keeping may vary by state. It may require polling more than one office – energy office, PSC, etc. Some states may choose to provide web-based information as

well.

Utah representatives noted that if the region were to consider hydro as renewable, then the 10 / 20 goals have already been met. The question is whether the rule’s intent was to encourage the AP2 Forum definition of “renewable” – excluding hydropower with substantive impacts to river ecosystems - or not. Utah representatives noted that they will provide two types of data, one which will report two data types, separat ing the capacity of the state’s “non-hydro

renewable” resources from the amount of “renewable with hydro” in its tables.

The group discussed what the potential definitions for “planned” were, based on the intentions of the rule writers. Arizona representa tives suggested a rule of thumb that considered a project “planned” only if money had be en expended or a permit issued, in order to reduce the potential for projects in their earli est study stages to be included in the SIP, and later abandoned or not developed.

Utah representatives noted that they planned to ide ntify anything that has gone through a regulated planning process that identifies RE, such as PacifiCorp’s IRP. (In PacifiCorp’s case, RE and EE are a risk management tool, and the y include EE and RE programs in their planning filings to the state).

The group discussed how this affects states that do not require IRP filings. (Oregon, Utah, Wyoming, New Mexico, Idaho require these). Arizona ’s standard - money on the table or permit in hand – may serve as a good criterion when looking at situations with merchant plants or other situations were development is outs ide the PUC’s jurisdiction. Rural co-ops and others who purchase from WAPA and BPA need to f ile IRPs, so this might be another source of “planning” information.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 15 Annual Energy Outlook from EIA might be another sou rce of “planned” RE capacity expansion. Tom Petersic (sp?) at EIA puts this inf ormation together. The group could think about the difference in the definition between “pro posed” and “planned”

The California Energy Commission’s (CEC) energy gen eration tracking website may have good regional information. Their website URL is: http://www.energy.ca.gov/electricity/wscc_proposed_ generation.html

Utah is looking at installed capacity. They noted t hat progress could be measured by determining:

Total amount of RE consumed in your state / Total c onsumption within your state.

Utah representatives explained that their rationale is that if you contribute to RE consumption in another state (by paying for it), you should get credit for it. States must demonstrate their contribution of the regional goal, not simply meeti ng an in-state goal. It is important to avoid double-counting, and it is possible that EPA will l ook at generation state-by state to determine regional progress towards achieving the r egional goal. However, for purposes of states trying to demonstrate their contribution to the regional goals, they should report consumption. Although tracking electrons is diffic ult, tracking investments is easier.

Two metrics are required:
 Inventory of all RE generation in-state (for report ing all planned / installed RE)
 Tracking of RE consumption in state (for reporting contribution to 10 / 20 goal)

The minimum for addressing paragraph (i) would be t o include EE / RE in this section; look at including mobile P2 in the mobile section, and t he area-source P2 in area-source section.

A question for EPA: should P2 consideration be limi ted to electricity / energy? One suggestion was to check with John Nielsen before pr oceeding. The group observed that it might make more sense to proceed, focusing on the m ost credible information, and focusing on “the big rocks” – programs and components that h ave significant impacts and directing research and energy in that direction.

Summary of Discussion on Paragraph (i) : The group discussed that the initial list of P2 pro grams focus first on EE and RE in states that are going the S. 309 route. It is at the state’s d iscretion to include other kinds of P2 programs in this list, but states may also want to consider putting information about non-EERE programs in other appropriate sections in their S. 309 SIP.

For purposes of determining what to include in the inventory of all renewable energy generation capacity and production in use or planne d as of 2002, states discussed using two key guidelines:

o Installations that are included in integrated resou rce plans (IRPs); orWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 16 o Installations for which there is money on the table or a permit issued or in

process.

To determine a state’s anticipated contribution tow ard the 10/20 goals, the states indicated that not only could a state include the generation capacity of installations within its boundaries, but also that for purposes of addressin g this paragraph, states could interpret that

“contribution” could include the amount of renewabl e generation consumption occurring in

the state.

Listing the programs intended for use as EE as well as all the programs intended for use to meet 10 / 20 RE goals coincidentally produces a sum mary of P2 programs. The group noted that off-the-shelf information is preferable to try ing to develop new information. Arizona representatives suggested a rule of thumb that cons idered a project “planned” only if money had been expended or a permit issued, in order to r educe the potential for projects in their earliest study stages to be included in the SIP, an d later abandoned or not developed.

Paragraph (ii): Programs to provide incentives that reward efforts that go beyond compliance and/or achieve early compliance with air -pollution related requirements.

Discussion Notes

Utah representatives noted that one potential progr am to satisfy this section were Supplemental Environmental Programs (SEPs). In Uta h, an emphasis on green power purchases in SEPs is complicated by general fund is sues. The group discussed how the decision to include this type of program was affect ed by the fact that this is a compliance penalty-related program).

AZ has a trading program that provides additional r ewards for renewable energy generation. The resulting reward is an allowance in an SO2 prog ram.

The group noted that “Beyond Compliance” is not nec essarily referring to the 10 / 20 goals, but could also include compliance with other regula tions affecting the electricity / energy

sector.

The group discussed whether there is a place in thi s section for financial mechanisms such as SBC, possibly through a cross-reference to another paragraph’s section (such as Paragraph (i). The ICF modeling showed that a credible RPS r esulted in early implementation of RE – sometimes it makes economic sense to have your RE c ome on line prior to compliance date. One potential solution to responding to the section that was suggested would be to simply ignore it, possibly by responding with language suc h as “See Paragraph (vi)”. One opinion was that states should commit to making programs cr edible, by referring to regional modeling showing that there is potential to have RE come online early, and by demonstrating that the state is serious about achieving objective s discussed under Paragraph (i).

Another approach suggested was to list voluntary / beyond compliance programs where they exist, such as an AZ program that rewards RE in emi ssions trading. Unexpected funds orWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 17 efforts towards EE / RE could potentially result in contributions to 10 / 20 goals, and where data for these programs exist, they could be includ ed. For example, language could be included such as: “the state will look at using SEP s as a mechanism that could potentially help achieve the goals earlier”.

Of all the provisions in the rule, this might be th e one that is least directly linked to RE. One solution would be to discuss the authority to take actions such as SEPs, without discussing it in too much detail. Another example is a Colorado law that provides regulatory certainty in exchange for voluntary beyond-compliance actions.

Where Paragraph (i) was focused on EERE, this secti on might be interpreted as any P2 effort that goes beyond compliance and results in air-poll ution-related improvements. NM has a voluntary program (“Green Zia”) that recognizes pol lution prevention activities with an award – the sole reward here is recognition. CO ha s a similar program. This might fit the requirements for this section. There is language i n the AP2 Forum’s RE recommendations policy that is consistent with this approach, and t his language might be useful for states to

reference.

The group discussed whether states need programs if they do no have them already. If you are signing up for 309, you already have the market trading provision. States may also have the SEP authority (but the filing should point to l anguage that provides this authority), and recognition programs (including national programs s uch as Energy Star etc. that are being implemented in your state) can be included.

Summary of Discussion on Paragraph (ii) : The group noted that “Beyond Compliance” does not n ecessarily refer to the 10 / 20 goals, but could also include compliance with other regula tions affecting the electricity / energy

sector.

Two approaches to responding to this paragraph were discussed:

1. Using a cross-reference to Paragraph (1)’s response ; and

2. Focusing on programs such as Supplemental Environme ntal Programs, where available, laws that trade regulatory certainty for early compliance, and recognition and awards programs, both state-sponsored (such as New Mexico’s Green Zia program) and national (such as Energy Star).

ACTION ITEM: There is language in the AP2 Forum’s RE recommendations policy that is consistent with this approach, and this language mi ght be useful for states to reference.

Paragraph (iii): Programs to preserve and expand energy conservation efforts

.

Discussion Notes

Oregon has had utility and state programs since the 1970s to meet this requirement. For states without formal programs, there is the menu o f options from the AP2 Forum (residential, commercial, industrial) programs.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 18 PacifiCorp and other utilities have PSC-mandated efforts, in some areas there are countylevel building codes; many states have state buildi ngs programs.

 Preserve = ongoing programs that are already in pla ce  Expand = programs such as PacifiCorp IRP that are p lanned or proposed (and documented)

Utah’s representatives noted that the “best practi ces” list from AP2 Forum is a good list of areas to investigate / include in this section.

While the formatting of the Utah filing does not di stinguish between “preserve” and “expand”, they did use this as a guideline for excl uding programs that will not be ongoing. Is it important that states characterize the programs as existing / ongoing, and planned? How much consistency is needed between states? (For Ut ah, existing program benefits were documentable using available information, and they are moving towards improving information for future compliance).

The rule language comes from 1996, during the heigh t of interest in electric industry restructuring, and it was included as a way to keep incentives for demand management in the wake of the expected deregulated environment. Rest ructuring has not gone forward to the degree that was expected – MT and CA are moving rec onsidering their moves toward deregulation, and most western states continue to r equire resource planning.

Oregon’s representatives commented that their state ’s programs can deal with both energy and electricity. Does this play a role in the fili ng? If so, where? Does this section focus on electricity generation alone? Utah commented that i n their state’s case, they had passed the

mobile P2 information to the mobile section. Utah also does not include fossil fuel conservation programs in its current draft filing. This has an effect on weatherization and other building programs. AP2 Forum’s recommendation is to focus on electricity generation, and not on direct energy use.

One comment was to keep in mind the effectiveness o f programs relative to visibility improvements for Class 1 areas – use this to priori tize programs included. Utilities incorporate energy and electricity – if the program information exists, there is no harm in its

inclusion.

One area that the group felt was logical was that s ince states have several programs that they are all involved in, they can try to use standard l anguage for these sections. The group could develop language that all states filing / consideri ng filing under S. 309 can use.

The group reviewed the PacifiCorp IRP vs. Arizona P 2 programs as a model - AZ’s program is simpler. Participants noted that the rule langu age is looking for a list. Scott: a link to a website is a good way to refer to a program without filling up the document. The group noted that a list is an appropriate approach, suppo rted with appendices.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 19 An option is for states to list the programs they w ill need to create the projections in Paragraph (v). One participant noted that taking the right approach will be important since the SIP documents are enforceable, but readability is an issue as well, especially in light of the fact that S.309 filings are based on contributi ons to the 10 / 20 goals, among other things. The 10 / 20 goals are not enforceable, for example, so listing the programs could be satisfactory. The supporting data needs to be incl uded, but to help with readability, possibly in appendices.

The participants concurred that one approach would be to include a standard-format program description in the body of the filing, with additio nal details and data put into appendices

whose contents would be at the discretion of the st ate. The group concurred that the STIP template could be a basis for a standard format.

Summary of Discussion on Paragraph (iii) : States may wish to use standard language for this s ection. The “best practices” list from AP2 Forum is a good list of areas to investigate / incl ude in a standard response to this section, which could be based on the WESTAR STIP template. T his response could be supplemented with data included in the appendices.

Paragraph (iv): The identification of specific areas where renewabl e energy has the potential to supply power where it is now lacking a nd where renewable energy is most costeffective.

Discussion Notes

During the previous day’s discussion of Paragraph ( i), it was suggested that this paragraph’s language was included to encourage off-grid RE deve lopment. Utah representatives explained that they had interpreted this paragraph’ s language to mean a map. NREL has done work on resource availability, and this is lan guage intended to merge resource availability with grid maps. Some states, such as Oregon, reported that their off-grid areas are unpopulated and consequently have no electric d emand. States also do not necessarily have the resources to catalogue state renewable pot ential. The Land and Water Fund of the Rockies (LWFR) has a renewable potential atlas that Utah has used in its filings. Programs to electrify areas under the jurisdiction of the Na tional Park Service (NPS) and other park sites with RE are good opportunities that might be listed, as well as tribal areas, because they have not yet been electrified to the same extent as other areas. To the extent that you have programs to support those types of projects, this i s the place to list them.

There was discussion among the group about whether tribal lands are will be included in

SIPs. States and tribes need to communicate to avo id double-counting. One option for dealing with RE projects on Tribal lands is to take a “hands off” approach unless it is statefunded, along with a recognition that it is occurri ng on tribal lands.

States are likely to use LWFR maps in common: conta ct is John Nielson (303) 444 1188 ext. 232. Jeff Burks will contact John for a packet for each of the five states.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 20 The maps provided by LWFR should not be expected to provide high-resolution data; Utah has supported the maps with statements that provide , generally speaking, information on cost effectiveness of resource, broad description of act ivities underway to identify areas of cost

effectiveness.

In terms of including this information, participant s discussed whether they might be a way to account for potential improvements in technology / cost in the future. They were also interested in whether there might be a standard num ber available to express a point of costeffectiveness, and whether each state has informati on for potential utility customers to

determine cost effectiveness.

One direction forward for responding to this paragr aph would be to express the resource availability, then make a statement about cost effe ctiveness (based on state or other guidelines or information such as NPS), broadly spe aking, in the areas that these maps identify as having resource potential that are off- grid. NPS has guidelines for incorporating

environmental externalities in cost-effectiveness i n evaluation of projects. “Cost effectiveness” means lowest cost way to reach goals – goals are broader than just “getting electricity”, can also include meeting air quality goals.

Note – does the cost-effectiveness question refer o nly to areas that lack grid connectivity? The group discussed whether “remote” areas are the ones to be addressed in this section.

Consistency in state interpretation of this section will be important. Generally speaking, this paragraph should be read as one idea – areas that a re BOTH off-grid AND cost effective for

RE. Rule of thumb: If you go farther than 1⁄4 mile from t ransmission system, RE

becomes cost effective. Maps exist for 50 kV system overlaid with the resou rce potential maps for some states, but not all, and even this do es not provide a high-resolution view of areas without grid interconnection.

In the “Volkswagen” version of a state filing, a re ference to the “1⁄4 mile rule of thumb” in the SIP might be enough. Potential language might read : “Areas located more than 1⁄4 mile from transmission might consider RE as a cost-effective approach”

(Note – another model is being developed by Walter Short at NREL that determines RE resource cost effectiveness, this might be the dire ction to explore for a “Cadillac” version)

The group discussed the validity of web-based mater ial in the filings. The participants noted that since URLs change, filings can use the URL, bu t also provide a contact, and make a paper copy available for state files in the air qua lity offices for future reference if needed.

Summary of Discussion on Paragraph (vi) : This paragraph can be largely responded to by using maps and supporting documentation. States are likely to use maps from the Renewable Po tential Atlas developed by the Land and

Water Fund of the Rockies. Jeff Burks will contact LWFR for a packet for each of the five states. Generally speaking, this paragraph should b e read as one idea – areas that are BOTH off-grid AND cost effective for RE. There is a rul e of thumb: If you go farther than 1⁄4 mileWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 21 from transmission system, RE becomes a cost effecti ve alternative to transmission line improvements. A reference to this “1⁄4 mile rule of t humb” in the SIP filing might be enough for a state to provide in responding to this paragr aph.

Paragraph (v) Projections of the short- and long-term emissions r eductions, visibility improvements, cost savings, and secondary benefits associated with the renewable energy goals, energy efficiency and pollution prevention a ctivities.

is the group tried to come to a definition for what the rule language meant by “Long-Term.” For Utah, the end-point of “long term” is 2018, the end-point for compliance in the rule. The first report date, 2008, is the end-point for short -term actions (compared to a baseline of 1990 – 2003). The years 2005, 2010, 2015, 2018 are the years in ICF models, and the group discussed this as another option, ultimately agreei ng to try to be consistent using the ICF dates where necessary.

The ICF modeling “forced” nine states to adopt 10 / 20 goals, and the group discussed their concern that using the results of this modeling wou ld be affected by only having four or five states file S.309 filings. Year-by-year estimates can be summarized from data that is available from ICF report.

WRAP did a state-by-state emissions analysis compar ing the results from 10 / 20 + EE in

2018 with the “business as usual” case. The result s can be summarized as:

State NOx emissions (tpy) SO2 reductions (tpy)

AZ 3267 +5558

CO -1370 -1119

NV -430 -307

NM -7053 -5135

UT -780 -595

WY -1374 +1598 Total -14274 0 (because of cap)

In the context of the overall cap, the NOx reductio ns are very small, but they are reductions

nonetheless.

Overall, with regard to visibility improvements, th e 10 / 20 goals will also have a positive impact, but initially will not, by themselves, resu lt in sufficient improvements. Natural conditions = 7.5 deciviews, and WRAP is doing some simple calculations to determine visibility improvements as well. The rule does not say you need to project improvements for each policy – just progress towards improving visib ility overall though a package of strategies. There has not been analysis of how the shifting of pollutants from one area to another affects specific Class 1 areas.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 22 A question for EPA: is analysis that focuses on the full package satisfactory for the SIP filing? The group discussed whether visibility imp rovements on this small a scale are useful for inclusion in the model, since they are lost in the “noise” of the model.

One suggestion was to submit the entire ICF model, with regional data and not state-specific data. This submission could be supplemented with a statement explaining that the EERE effects on visibility are small and lost within the noise of the model. There will be no detriment to visibility from NOx (a slight improvem ent overall) and no effect on SO2 because of the cap. The argument to be made is tha t compliance is met at lower cost. If this were the route taken, there would not be not any wa y for a state to draft something quantitative beyond this.

ACTION ITEM: Lee Alter will draft text for the above approach. This text is included at the end of the notes for Paragraph (v), below.

Oregon’s representatives noted that the cost for ga s is higher now and continuing to be high, this could be an ongoing gremlin in the model that affects the cost-effectiveness of EERE P2

measures.

Cost savings:

• Outputs of the model are focused on electricity pro duction costs (avoided energy use and avoided capacity additions).

• The regional market makes it difficult to predict s avings on a state-by-state basis.

The group was asked if, assuming that the regional model does not provide enough for a state-specific evaluation, will providing regional data satisfy the state’s SIP process?

New Mexico’s representatives noted that the rule la nguage does not specifically ask for a state-by-state basis for response to this paragraph (it does as for state-based results in other paragraphs, notably, Paragraph (i)).

The modelers suggested that states could apply para meterized results to state / tribal targets and report on a state-by-state basis. The targets could be related to a basic unit (i.e. each state’s load share). The key assumption to this app roach would be that there is some consistency in cost. In this model, the State data comes from total compliance cost averaged out over a state-specific emissions factor.

Using the ICF model, to obtain results under the th ree scenarios (the 10 / 20 goals; only EE; and EE+10/20 goals), states would need to find dat a for the following metrics:

• Compliance cost ($/MWh)

• Emissions (lbs/MWh)

• Employment (jobs/GWh)

• GRP ($/MWh)

• Disposable income ($/MWh)WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 23 Since the SIP is looking at the effects on a region al level – regional haze –a regional response for visibility might be appropriate.

Although only 3 to 5 of the nine states could be go ing with S.308 filings, some states outside the 5 (i.e. Nevada) have an RPS, and their contribu tion through non-S.309 methods are nonetheless contributions towards visibility goals. Therefore, even though only five states (at most) might file S.309 filings, a regional response could be appropriate. Participants noted that some sort of improvement data must be filed be cause EPA is unlikely to take “the presumption of improvement” to mean that no data ne eds to be supplied.

Another potential solution is to do both: use regio nal data, then extrapolate based on this data to a state-by-state level of analysis through param eterization. Filers could provide statespecific information where addressing areas outside of the model projections. This might be important because many states lack the resources to model visibility etc. on an individual basis. In addition, this only makes a compelling c ase for states with positive results regarding net emission reductions and job increases . Arizona has a focus on solar (rather than wind, which in many areas is more cost-competi tive), consequently some of the figures for “least cost” RE might not be as applicable to t his state. Furthermore, the emission benefits of investments in RE may not occur in the state making the RE investment – a solar investment in AZ might displace a fossil plant in C O or elsewhere, so although for some states, the translation from investment to in-state emissions reductions may not be perfect, these investments should result in regional emissio ns reduction.

Oregon’s representatives noted that costs are not a s big a concern in the SIP filing – there may not be cost savings... so what? They are leaning towards parameterization.

One parameter that could be used: RE consumption wi thin the state over total consumption, not simply based on generation. Once your target is set (determining the state-specific target is for elsewhere – makes an assumption that the tar get is linear, averaged across the states) then apply parameters. Compare your state’s target s to ICF’s average parameterized factors.

Reporting on the state impacts of a regional proble m requires reporting:

• Visibility improvements on a regional basis

• Economic (costs, secondary benefits) on a state by state basis

One difficulty is that the five states can detail t heir contribution to the nine state goal, but what about the other four? Paragraph (v) asks “wha t do you think your slice of regional program’s visibility, cost, and economic impacts ar e?” Paragraph (vi) asks for the update – “are we making the goals?”

Since the parameters are regional, SIP filers are o nly finding out the state’s slice of a regional number – not a state-specific number. The benefits within that slice may not actually be tangible benefits in the state. One solution would be to multiply GWh by parameters. Where

does the GWh number come from? The results are not additive, so if each state multiplies by its own number, the numbers will not add up to the same data that the ICF model has.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 24 State filers are presented with two choices:

• Either present bulk regional numbers, note that CA and NV are doing their part through RPS, and that’s our best guess; or

• Say “here is the total, here is our slice through t he ICF parameters”

State participants were polled as to their preferen ces, and one approach recommended by some workshop participants was to provide regional data, rather than splitting the data by state using parameterization. The participants note d that the 10/20 goal itself is not something that all 9 states in the region are required to mee t, by regulation or other formal agreement.

As such, states filing regional data can make the c ase that they are presenting a picture of the results if the states participating in filing under S.309 and the non-participants collectively reach the 10/20 goal. This is will allow them to t ake credit for EE and RE and P2 activities that are happening anyway.

In moving forward, Utah offered to work with the WR AP and look at drafting some common language for all the S.309 states to file, potentia lly liberally excerpting from the ICF modeling study.

Inserted Text from WRAP:

"Projections of visibility improvements for the 16 Class I areas on the Colorado Plateau are provided in Table 1 [of the SIP template]. The se projections include the combined effects of all measures in this SIP, including air pollution prevention programs. Although emission reductions and visibility improvements fro m air pollution prevention programs are expected at some level, they were not explicitl y calculated because the resolution of the regional air quality modeling system is not current ly sufficient to show any significant visibility changes resulting from the marginal nitr ogen oxide emission reductions described above for air pollution prevention progra ms."

WRAP’s Note: For the projections of short- and long -term emissions reductions, we agreed to use the data presented for 2005, 2010, 20 15, and 2018 in ICF's Executive Summary (and in the body) on the regional emission change in NOx.

Summary of Discussion on Paragraph (v) : The years 2005, 2010, 2015, 2018 are the milestone years in ICF models, and the workshop participants remarked that these might be good date s to use as guidelines for determining “short-term” and “long-term” goals. The participan ts stated that a common presentation of the ICF model regional results might be appropriate in responding to this paragraph, noting that non-participant states such as CA and NV are d oing their part to meet the 10/20 goals through their RPS and other mechanisms. In movin g forward, Utah offered to look at drafting some common language for all the S.309 sta tes to file, potentially liberally excerpting from the ICF modeling study.

Paragraph (vi): A description of the programs relied on to achieve the State's contribution toward the Commission's goal that rene wable energy will comprise 10 percentWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 25 of the regional power needs by 2005 and 20 percent by 2015, and a demonstration of the progress toward achievement of the renewable energy goals in the years 2003, 2008, 2013, and 2018. This description must include documentati on of the potential for renewable energy resources, the percentage of renewable energ y associated with new power generation projects implemented or planned, and the renewable energy generation capacity and production in use and planned in the S tate. To the extent that it is not feasible for a State to meet its contribution to the regiona l renewable energy goals, the State must identify in the progress reports the measures imple mented to achieve its contribution and explain why meeting the State's contribution was no t feasible.

There is potential here for inclusion of a summary, reference, or referral to Paragraph (i) response. Paragraph (i) might not get at the under lying programs, instead focusing on the specific RE programs. As with Paragraph (i), the r esponse to this Paragraph in the SIP could look like a list, potentially with more descriptive detail. One approach would be to use the

same list.

Overlap comes up again as a concern in this section : WGA is working on a tradable regional REC system, which might be a solution in the long t erm. In the short term, the earlier generally-accepted “the funding state gets the cred it” principle could be a way forward.

Documentation will need to be provided with the fil ing anyway, potentially in this paragraph’s response or potentially in the appendix

.

For the PacifiCorp states, there could be a mention (as in Paragraph (i)) that there are planned additions through the regulated resource planning p rocess.

The group noted that Paragraph (i) requires an aggr egated response and discussed whether Paragraph (vi) requires a more explicit program bre akdown. It appears that aggregated approach is more effective:

 Does the “potential for renewable power” require a consideration of cost effectiveness? Since the language does not indicat e that this is required, potentially include the LWFR maps in response.

 In compiling information, balance being effective i n identifying projected potential program results with being overly exhaustive. “Foc us on the big rocks” – for Utah, PacifiCorp IRP.

 States with RPS can potentially count this in their estimation of future RE.

For 2003, data to be provided would focus on base c ase (2003), and where some future info is available (from IRPs, RPS), states should make t hat info available. Utah has identified planned additions as part of its program descriptio n; including caveat language that the program might be subject to revision by the time re vision occurs. Because it is the same set of programs, the same definition of “planned” appli es – funded or committed subject to regulatory oversight.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 26 States noted that they could include language antic ipating updated information at the milestone dates for SIP revision, such as “in 2008, state will file information that updates progress.”

Feasibility for 2003 programs could include languag e indicating that in the future (2008) the state will report on success of these 2003 programs in meeting goals.

One approach for 2008: Each state could use an in-s tate guideline of 10% and 20% (or the goal set out in Paragraph (i), and if your state do es not meet the in-state guideline, explain (i.e. EE efforts, other state’s efforts, and relati ve success versus the contribution identified in Paragraph (i))

 Utah is planning to use current programs to project what future RE is going to be,

estimate what this contribution will be towards 10 / 20 goals. Using this, Utah will have data for the anticipated contributions for 200 5, 2015. This provides a “bottomup assessment”, regardless of whether it provides 1 0%.

 Arizona could use projections of growth compared to RPS. Another possible addition is to determine historical participation in green p ricing programs and analyzing this relative to projected consumption growth.

 New Mexico has an RPS in the works, and is comforta ble with the idea of finding the data in-state to meet its own in-state goals.

 There is no need to explain how your state’s goals will make the regional goals achievable in the first reporting period.

A second approach would be to file language that re ads along the lines of: “if all 9 states were to participate in S.309 filings, our state’s c ontribution would be X; however, since 9 states will not participate, our state will update as this information becomes available”.

A third approach would be to use 2003 data based on information developed in Paragraph (i), and explain that this information will be updated i n 2008.

(For 2003 filing, states can add language about the ir energy efficiency at their discretion, i.e. “efforts with EE make it easier to reach RE goal”. However, there is no language mandating a description of EE programs in Paragraph (vi))

Language from the WRAP’s STIP template language mig ht be useful in this section, potentially reading: “As information becomes availa ble between revisions, State will continue to work with WRAP to determine progress to wards regional goals”. The WRAP AP2 Forum will continue to investigate ways to help States respond to the SIP.

The group discussed whether it was worthwhile to ha ve information compiled to predict whether states are on track to reaching regional go al. Currently, there is no coordinatedWRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 27 effort working on adding up 309 states’ contributio n and the estimated contributions from non-309 states to determine whether the 10/20 goals are being met regionally. This might be

a function for the WRAP.

One solution of the problem is to follow a 10 / 20 goal per state. Proposed language: “Until a capturing mechanism is in place, state will not rep ort on regional accounting that does not exist yet.”

Each filing may need language to address why the st ate not looking at the allocation parsed out among states – Oregon will work to develop a dr aft of this language. WRAP will find the 2005 and 2015 goals included in the ICF Consult ing report for future analysis to see if states are on track to meet the 10/20 goals.

Summary of Discussion on Paragraph (vi) : States noted that providing information based on t he regional data from the ICF modeling could be an appropriate response to this paragraph. A response to this paragraph could make reference to the programs outlined in Paragraph (i) ’s response, the LWFR maps, and argue that if all 9 states were to participate in S.309 f ilings, the state’s contribution to the total 10 / 20 goals would be X; however, since 9 states will n ot participate, the state will update the information about its contribution as part of the n ext SIP update.

While there is currently no coordinated effort to c ompile information that could help to predict whether states are on track to reaching reg ional goal, this may be a function for the WRAP to consider taking on in the future.

Wrap Up and Next Steps

The WRAP requested that the states email Lee Alter a copy of their draft submittals for comparison with other states. The states discussed their internal deadlines, and each will try to accomplish putting a draft together for review b y the other states prior to each state’s public comment period.

There may be a possibility that some technical supp ort could be provided to the states. In addition, the states discussed the possibility of h aving an external group such as GETF provide some consistency analysis.

The states have an opportunity to provide a draft o f their submittal before July 30. GETF, WRAP, and other interested parties will discuss the possibility of preparing a comparison matrix for those in the states responsible for prod ucing and filing the SIPs.

Currently, there is no coordinated effort working o n adding up 309 states’ contribution and

the estimated contributions from non-309 states to determine whether the 10/20 goals are being met regionally. This might be a function for the WRAP. There may also be a role for a third party to provide some consistency review pr ior to the filing deadline in order to help states provide EPA with consistent filings.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 28 GETF agreed to provide the summary and action items from this meeting in a timely manner to the state participants. The group discussed the possibility of having some follow-up dialogue from the workshop, in the form of a confer ence call or other communication.WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 29 

### Attachment 3: Workshop Attendees List

Lee Alter

Western Governors’ Association lalter@westgov.org (520) 628-3173

Don Arkell

WESTAR darkell@westar.org (541) 895-3664

Neil Butt Air Quality Division, City of Albuquerque NButt@cabq.gov (505)768-2660

Jeff Burks Utah Energy Office jeffburks@utah.gov (801) 538-5414

Phillip H. Carver Oregon Department of Energy Philip.h.carver@state.or.us

503-373-6874

Brian Finneran Oregon Department of Environmental Quality finneran.brian@deq.state.or.us (503) 229-6278

Anna Garcia

GETF agarcia@getf.org (703) 750-6401

Van Jamison

GETF wakanpowair@msn.com (406) 443-0815

Chris Janick Salt River Project crjanick@srpnet.com (602) 236-5374

Miles Keogh

GETF mkeogh@getf.org (703) 750-6401 Jerry Kotas US DOE, Denver Regional Office jerry.kotas@ee.doe.gov (303) 275-4850

Bob Lebens

WESTAR blebens@westar.org (503) 387-1660 ext. 6

Scott Manzano Oregon Department of Environmental Quality MANZANO.Scott@deq.state.or.us (503) 229-6480

Louise Martinez New Mexico Energy Office

lnmartinez@state.nm.us (505) 476-3310

Jan Miller Utah Department of Environmental Quality janmiller@utah.gov (801) 536-4042

Dave Nichols

Tellus Insitute

d.nichols@earthlink.net (617) 277-7950

Bruce Polkowski

National Park Service bruce_polkowsky@nps.gov (303) 987-6944

Theresa Rigney Arizona Department of Environmental Quality rigney.theresa@ev.state.az.us

602-771-2349

Steve Roseberry Wyoming Department of Environmental Quality SROSEB@state.wy.us

307-777-6105

Bishal Thapa ICF Consulting bthapa@icfconsulting.com (703) 934-3904WRAP • Pollution Prevention Workshop for Section 309 SIPs and TIPs • May 20-21, 2003, Portland, Oregon 30 Rita Trujillo New Mexico Air Quality Bureau rita_trujillo@nmenv.state.nm.us (505) 827-1494

David Von Hippel

Tellus Institute dvonhip@igc.org (541) 687-9275

Lisa Yoder Utah Energy Office lisayoder@utah.gov

801-538-4761