Roadmap for Incorporating Energy 

Efficiency/Renewable Energy

Policies and Programs into State and Tribal 

Implementation Plans

Appendix E: Baseline Emissions Projection Pathway
E-1

EPA-456/D-12-001f

July 2012

Roadmap for Incorporating Energy Efficiency/Renewable Energy

Policies and Programs into State and Tribal Implementation Plans

Appendix E: Baseline Emissions Projection Pathway

By:

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, North Carolina

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, North Carolina
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ACKNOWLEDGMENTS

We would like to acknowledge substantial contributions from members of an inter-office EPA 

team that included the Office of Atmospheric Programs, the Office of Policy Analysis and 

Review, the Office of General Counsel and Regions 1 and 6. This document also reflects 

comments received from a number of stakeholders, including state and local air quality 

agencies.
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Contents

SECTION E.1: BASICS OF BASELINE EMISSONS PROJECTION APPROACHES.............................................................. E-5

Pathway Description.............................................................................................................................................. E-5

Tradeoffs of Pathways........................................................................................................................................... E-5

Circumstances the Pathway is Best Suited For...................................................................................................... E-6

SECTION E.2: BASELINE EMISSONS PROJECTION APPROACHES FOR ELECTRIC GENERATING UNITS....................... E-6

EPA’s Baseline Emissions Projections.................................................................................................................... E-6

Non-EPA Baseline Emission Projections for Electric Generating Units.................................................................. E-7

SECTION E.3: STEPS FOR INCORPORATING “ON THE BOOKS” ENERGY EFFICIENCY POLICIES.................................. E-8

Step 1: Choose a Baseline Demand Forecast for Electric Generating Unit Projections......................................... E-8

Energy Information Administration’s Demand Forecasts.................................................................................. E-9

Regional or State Specific Electricity Demand Forecasts................................................................................... E-9

Step 2: Document Energy Efficiency Policy Assumptions in Electric Generating Unit Baseline Demand Projections

............................................................................................................................................................................. E-10

Energy Information Administration Energy Efficiency Policy Assumptions..................................................... E-10

Regional or State Specific Policy Assumptions ................................................................................................ E-11

Step 3: Review “On the Books” Energy Efficiency Policies for Inclusion in the Electric Generating Unit Baseline 

Demand Projections ............................................................................................................................................ E-11

Comparing “On the Books” Policies Against Energy Information Administration Assumptions..................... E-11

Comparing “On the Books” Policies to State or Regional Forecast Assumptions............................................ E-12

Documentation Procedures............................................................................................................................. E-12

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future ................... E-12

Considerations for Choosing an Electric Generating Unit Baseline Emissions Projection Method ................. E-12

Perform Energy Modeling To Project Electric Generating Unit Baseline Emissions........................................ E-12

Future Attainment Year Baseline Using Other Approaches .................................................................................... E-13

SECTION E.4: STEPS FOR INCORPORATING “ON THE BOOKS” COMBINED HEAT AND POWER POLICIES............... E-13

Step 1: Review Combined Heat and Power Sources in Baseline Inventory and the Relative Emission Rates for 

Combined Heat and Power Generation............................................................................................................... E-14

Step 2: Determine Combined Heat and Power Policy Assumptions in Electric Generating Unit Baseline 

Projections........................................................................................................................................................... E-14

Step 3: Review “On the Books” Combined Heat and Power Policies to Determine if More can be Included in 

Electric Generating Unit Baseline Projections..................................................................................................... E-14

Documentation Procedures............................................................................................................................. E-14

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future ................... E-15

SECTION E.5: STEPS FOR INCORPORATING “ON THE BOOKS” RENEWABLE ENERGY POLICIES.............................. E-15

Step 1: Review Renewable Energy Sources in Baseline Inventory and the Relative Emission Factor for Each Type 

of Renewable Energy ........................................................................................................................................... E-15

Step 2: Determine What Renewable Energy Policy Assumptions are in Electric Generating Unit Baseline Supply 

Projections........................................................................................................................................................... E-15
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Step 3: Review “On the Books” Renewable Energy Policies to Determine if More can be Included in the Electric 

Generating Unit Baseline Supply Projections...................................................................................................... E-16

Documentation Procedures............................................................................................................................. E-16

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment Year(s) in the Future ................... E-16

REFERENCES............................................................................................................................................................. E-17
E-5

SECTION E.1: BASICS OF BASELINE EMISSONS PROJECTION APPROACHES

Pathway Description

When developing a State Implementation Plan/Tribal Implementation Plan (SIP/TIP), 

jurisdictions start with an inventory of current emissions and a baseline projection of future 

emissions. The baseline emissions projection shows the level of emissions in the future target 

year that will result if no additional control strategies, policies or programs are implemented. 

The baseline emissions projection includes effects of existing federal, state, tribal and local 

regulations and programs that will come into effect by the future attainment year, but does not 

include any additional explicit (“on the way”) strategies not yet in statute or codified by a 

regulatory body. 

The goal of developing a baseline 

emissions forecast is to account for as 

many variables as possible that affect 

future year emissions and, in turn,

would impact ambient air quality 

levels. Emission levels (in addition to 

meteorology and topography, 

transport and fate of pollutants) are 

one of the most important parameters 

in determining resultant ambient air

quality. For the electric generating 

unit (EGU) sector, future emission 

levels are affected by electricity 

demand growth rates and the future 

resource mix and pollution control 

utilization of electricity generators. 

Existing energy efficiency/renewable 

energy (EE/RE) policies and programs directly affect these inherent electric power sector 

characteristics and are important to consider when projecting future emissions.

Emissions and ambient concentrations are not linear. So, to assess the relationship between 

emission levels and the resultant ambient air quality, state, tribal and local agencies need to 

perform an air quality modeling analysis for a base year and a future attainment year. In 

addition, emission projections provide a basis for developing and analyzing the impacts of 

control strategies for SIPs/TIPs, conducting attainment analyses, and tracking progress towards 

meeting air quality standards. 

Tradeoffs of Pathways

State, tribal and local agencies can, of course, select more than one pathway for their 

jurisdiction’s different EE/RE policies and programs. It is important to understand the tradeoffs 

between the baseline emissions projection pathway and other possible pathways, such as 

control measure, emerging/voluntary and weight of evidence pathways. State, tribal and local 
E-6

agencies can include EE/RE policies that are currently “on the books” in a baseline emissions 

projection. This means the EE/RE policy must already be adopted in federal or state regulation, 

a public utility commission order and/or local law. (The policies included in SIP/TIP baseline 

emissions forecasts are not subject to the same federal enforceability criterion as SIP/TIP 

control measures. For more information, see Appendix F.) During implementation of the 

SIP/TIP, if the EE/RE policy is not being implemented and the area is relying on the EE/RE policy 

in the baseline to help the area attain a NAAQS and the EE/RE policy is not implemented as 

assumed and air quality does not improve so as to meet the NAAQS as anticipated in the 

SIP/TIP, then the jurisdiction may be required to implement backup policies to make up for the 

emissions shortfall. The air agency might also agree voluntarily to revise their SIP. 

Alternatively, EPA may initiate a SIP call under section 110 of the CAA in which EPA can require 

that the state revise the SIP to make up the emissions relied upon to meet the applicable 

NAAQS. 

Circumstances the Pathway is Best Suited For

The baseline pathway is best suited for “on the books” EE/RE policies that state, tribal and local 

agencies want to include in their SIP/TIP baseline, as long as these policies are not accounted 

for elsewhere in the SIP and are not emerging/voluntary programs. If incorporated in the 

baseline, such policies would not be federally enforceable but, if the jurisdiction is relying on 

the EE/RE policy to attain a NAAQS, EPA could initiate a Clean Air Act SIP call, as noted above, if 

the circumstances warranted. The baseline pathway works well when multiple states are 

coordinating on emissions baseline development and air quality modeling due to the 

complexity, resources and expertise needed to complete the task.

The baseline pathway can also include cases where a local community wants to capture local 

EE/RE SIP measures that are not part of federal or state regulations or statutes. The EPA is 

open to the concept of a state entering into a binding commitment with a community in order 

to capture such reductions within the baseline pathway, and the details of such a commitment 

are crucial. Any such commitment must provide for complete restoration of any shortfall in 

emission reductions if the local community does not successfully implement the local EE/RE SIP 

measures and the measures are needed to attain the applicable National Ambient Air Quality 

Standards (NAAQS). The state would be ultimately responsible for achieving the emission 

reductions, so the language in the commitment must satisfy the state. The EPA regional offices 

are prepared to give timely feedback to states on acceptability of such commitment language, 

as the states pursue a memorandum of understanding or similar written commitments with 

local communities

SECTION E.2: BASELINE EMISSONS PROJECTION APPROACHES FOR 

ELECTRIC GENERATING UNITS

EPA’s Baseline Emissions Projections

The EPA develops and periodically updates a power sector database, the National Electric 

Energy Data System (NEEDS). The NEEDS contains the following data on EGUs:
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Current and future projections for the unit level records of all existing and 

planned/committed EGUs as reflected in EPA’s power sector modeling applications;

Basic geography;

Operating assumptions;

Air emissions; and 

Other EGU characteristics.

The EPA uses the Integrated Planning Model (IPM) to simulate the behavior of the power sector 

and to analyze the impact of environmental regulations.1 The IPM is a multi-regional, dynamic, 

deterministic linear programming model of the U.S. electric power sector. It provides forecasts 

of least cost capacity expansion, electricity dispatch, and emission control strategies, while 

meeting energy demand and environmental, transmission, dispatch, and reliability constraints. 

The IPM can be used to evaluate the cost and emission impacts of proposed policies that limit 

emissions of key pollutants from the electric power sector, including sulfur dioxide, nitrogen 

oxides, carbon dioxide, and mercury. Other emissions (including PM2.5 and PM10) are also 

calculated with a post-processing step. The IPM’s capabilities in power sector modeling include

the ability to analyze the impact of:

On-the-books or proposed EE/RE policies for the baseline and control strategy 

pathways, respectively; and

Constraints such as federal or state-level rules, settlements and consent decrees, cap 

and trade programs as well as EE/RE policies. 

Outputs from IPM are processed to be used as direct inputs into air quality models.

Non-EPA Baseline Emission Projections for Electric Generating Units

State, tribal and local agencies have the choice to independently develop baseline emissions 

projections for the EGU sector or to use EPA’s baseline emissions projections. If a state, tribal

or local agency chooses to develop its own baseline emissions projections for SIP/TIP purposes, 

the agency must make and document assumptions that reflect (1) electricity demand and 

electricity supply, (2) EGU emission characteristics and (3) how and when EGUs will operate in 

the future. The projection of new generation does not need to be an independent forecast 

developed by the state, tribal or local air agency, but can be derived from other available 

forecasts. When other forecasts of generation capacity are used, there should be 

documentation of the assumptions in those forecasts and how the assumptions relate to other 

assumptions of the baseline emission projection, such as demand and emissions.

Regardless of whether the EGU baseline projection is developed in-house or externally, the 

following assumptions should be documented:

 

1

For more information on detailed documentation of the latest publicly available versions of NEEDS and IPM, go 

to: http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html.
E-8

Projected economic growth, fuel prices, and wholesale and retail electricity prices 

Projected emissions based on the above electricity demand forecast assumptions with:

o Cost and performance of future generation 

o Cost and performance of future retrofit technology 

o Emission limits and rates and retirements as a result of environmental and 

economic constraints

The methodology for projecting new generating capacity 

Alternative baseline emission projections (should include the methods used for

projecting future emissions, determining how generating capacity was dispatched to 

meet the assumed demand, and how emissions projections are related to the dispatch 

of generation)

2

Identify and quantify energy impacts of EE and demand response policies and programs 

in the baseline projections

Identify and quantify energy impacts of RE policies and programs in the baseline 

projections 

SECTION E.3: STEPS FOR INCORPORATING “ON THE BOOKS” ENERGY 

EFFICIENCY POLICIES

Federal, state, tribal and local EE policies that are currently “on the books” can be incorporated 

into an electricity demand forecast used for a baseline emissions projection. Use the following 

four steps to account for the EE policies within the baseline emissions projection pathway. 

Step 1: Choose a baseline demand forecast for electric generating unit projections

Step 2: Document EE policy assumptions in electric generating unit baseline demand 

projections

Step 3: Review “on the books” EE policies for inclusion in the electric generating unit 

baseline demand projections

Step 4: Project electric generating unit baseline emissions for attainment year(s) in the 

future

(Step 4 also applies to the steps in Sections E.4 and E.5 for incorporating “on the books” 

combined heat and power policies and “on the books” renewable energy policies, respectively. 

The step is the same in all three sections, E.3, E.4 and E.5.)

Step 1: Choose a Baseline Demand Forecast for Electric Generating Unit

Projections

State, tribal and local agencies can reference a number of information sources that produce 

electricity demand forecasts. Each information source may already reflect different levels of 

“on the books” EE policies, so it is important to understand and document how these are 

 

2

The method used to estimate the dispatch of generation can differ from the method used in EPA's baseline 

forecast, but should establish a clear relationship between forecasts of demand, costs, generating capacity, and 

emissions.
E-9

incorporated. Jurisdictions can determine the most appropriate source for their electricity 

demand forecast (to be used for the emissions baseline projection) by reviewing the forecast’s 

growth rates, policy assumptions and economic conditions. Keep in mind that if a group of 

states uses electricity demand forecasts from different information sources, then any 

inconsistencies between approaches and assumptions should be addressed. 

Energy Information Administration’s Demand Forecasts

The standard national baseline projection for the EGU sector comes from the Energy 

Information Administration (EIA), which is the statistical arm of the U.S. Department of Energy

(DOE), and the projection is called the Annual Energy Outlook (AEO).

3

 It is published every year 

and forecasts the future 25 years of U.S. energy demand, supply, and price. For its power 

sector demand projections, EPA uses EIA’s electricity demand forecast, likewise growth rates 

for U.S. electricity demand forecasts, and underlying EE policy assumptions, can be found in 

AEO.4The EPA updates IPM platforms with the new AEO forecasts as they become available. 

Energy supply and demand projections from the AEO are also used as growth indicators upon 

which growth factors for fuel/combustion-related processes are based.

Projections included in the AEO forecast are generated from the National Energy Modeling 

System (NEMS), which is a computer-based, energy-economy modeling system developed and 

maintained by DOE. It projects the production, imports, conversion, consumption, and prices of 

energy. These projections are subject to assumptions about macroeconomic and financial 

factors, world energy markets, resource availability and costs, behavioral and technological 

choice criteria, cost and performance characteristics of energy technologies, and demographics.

Regional or State Specific Electricity Demand Forecasts 

State, tribal and local agencies can choose to use regional or state specific electricity demand 

forecasts for their baseline emission projections. Many organizations have an electricity 

demand forecast air agencies can use in the baseline emissions projections for SIPs; these 

organizations include:

North American Electric Reliability Corporation (NERC)

Regional Transmission Organizations (e.g., PJM)

Independent Service Operators (e.g., ISO NE, ISO NY)

Electric system operators (e.g., a large power company that operates the electricity 

system for a specific region)

State energy agencies (e.g., State Energy Office or Public Utility Commission) 

Regional councils that develop energy planning (e.g., Northwest Power and 

Conservation Council) 

 

3 Most recent version as of the release of this document is AEO 2012.

4

The AEO serves as the basis for EPA’s forecasts of future demand for electricity, which is an input to IPM. IPM 

provides future estimates of EGU emissions. It is important to know which version of AEO EPA is using in a given 

IPM run. There is a brief time lag between EPA’s modeling platform update and the most recent AEO forecast 

release. For more information, go to: http://www.eia.gov/forecasts/aeo/.
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Determining the most appropriate electricity demand forecast will be based on reviewing the

growth rates, policy assumptions, and economic conditions used in developing the forecast. 

Keep in mind that if a group of states working jointly on SIP modeling analyses uses electricity 

demand forecasts from different information sources, it will be important to reconcile any 

inconsistencies between approaches and assumptions. 

An organization’s reason for developing a demand forecast may also influence which 

information resource a state, tribal or local agency chooses. For example, the NERC demand 

forecasts are developed from utility level forecasts provided to NERC as part of annual, longterm reliability assessments. Available regional forecasts may be developed as a part of 

regional transmission planning activities established by the Federal Energy Regulatory 

Commission, which may also include separate scenarios incorporating alternative assumptions 

about environmental regulations. State, tribal and local agencies should work closely with their 

EPA regional office if their demand forecast information comes from one of these organizations 

to ensure all environmental regulations are accounted for in the analysis. 

Step 2: Document Energy Efficiency Policy Assumptions in Electric Generating 

Unit Baseline Demand Projections 

Energy Information Administration Energy Efficiency Policy Assumptions

The Energy Information Administration’s AEO documentation includes descriptions of the 

assumptions reflected in their modeling. For AEO 2010, EIA includes several EE/RE federal 

policies and regulations that are “on the books” as of September 2009. The EE policies that are 

explicitly in the AEO 2010 baseline projections5are:

Federal Appliance Standards6

o 10 Residential and 10 Commercial Appliance Categories

Federal Funding for EE and Related Programs (e.g., through the American Recovery and 

Reinvestment Act)7

o State Energy Program and Energy Efficiency Community Block Grant

o Weatherization Program

o Green Schools 

o Smart Grid Expenditures 

Building Energy Codes

8

o All states adopt and enforce:

 International Energy Conservation Code (IECC) 2006 (Residential Building 

Code) by 2011

 IECC 2009 by 2018

 American Society of Heating, Refrigerating and Air-Conditioning 

Engineers 90.1-2007 (Commercial Building Code) by 2018

 

5

For more information, go to: http://www.eia.doe.gov/oiaf/archive/aeo10/index.html. 

6

EIA (2010), Appendix A, pp. 170-185.

7

EIA (2010), pp. 8-10.

8

EIA (2010), p. 8.
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Regional or State Specific Policy Assumptions

If a state, tribal or local agency is using a demand forecast that is an alternative to EIA’s AEO,

then it is important to understand if and how the following EE policies are captured in, the 

electricity demand forecast:

EE policies or programs funded by utility ratepayers

Existing federal appliance and lighting efficiency standards that are already in effect

New federal appliance and lighting standards that are scheduled to take effect over the 

forecast period

State appliance or lighting efficiency standards (if applicable)

State building energy codes

CHP capacity additions

Other distributed generation capacity additions

Other applicable policies/programs (e.g., codified local policies)

There are at least two ways these policies can be captured in an existing demand forecast: 

1) Explicitly model EE policies to show a direct connection between the EE policy and its 

impacts on energy demand.

2) Fully or partially reflect the impacts of EE policies in a demand forecast indirectly,

through econometric or other assumptions in the model.

Step 3: Review “On the Books” Energy Efficiency Policies for Inclusion in the 

Electric Generating Unit Baseline Demand Projections

Comparing “On the Books” Policies Against Energy Information Administration 

Assumptions

If state, tribal and local agencies are using AEO 2010 demand forecast assumptions, EPA has

already identified “on the books” EE policies not explicitly incorporated into AEO 2010. To 

estimate the energy savings of these policies, EPA accounted for impacts of existing state EE 

policies that are embedded within EIA’s load forecast (e.g., accounted for econometrically). By 

taking this extra step, EPA avoided double counting the energy savings from existing EE policies 

and programs. 

The EPA is providing a methodology and energy savings information for future years through 

2030 (see Appendix J) for the following EE policies:

9

Energy Efficiency Resource Standards

EE programs funded by Public Benefits Funds

EE programs funded by the Regional Greenhouse Gas Initiative10

 

9

For more details on the methodology and energy savings/generation information for the policies listed here, go 

to Appendix J.

10 For more information, go to: http://www.rggi.org/.
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If states are using a different version of EIA’s AEO, then state, tribal and local agencies should 

review the EE assumptions with the respective AEO forecast to determine which policies could 

be added.

Comparing “On the Books” Policies to State or Regional Forecast Assumptions

If a state, tribal or local agency does not use EIA’s demand forecasts, then the jurisdiction 

should talk with the organization providing the demand forecast to determine if additional “on 

the books” state EE policies can be incorporated in their forecast. 

Documentation Procedures

Energy efficiency policies represent just one of many assumptions made in EGU baseline

emissions projections. Any EE policies that are explicitly included in an EGU baseline projection 

should include the following information:

Policy name 

Whether the policy is codified in state or local rule

Year enacted

Last year of policy requirement

Policy requirements (e.g., targets in megawatt hours (MWh) or percentage)

Annual energy savings base year (MWh)

Annual energy savings in the future attainment year (MWh)

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment 

Year(s) in the Future 

Considerations for Choosing an Electric Generating Unit Baseline Emissions 

Projection Method

The baseline emissions projection method is an important decision for state, tribal and local

agencies because having a consistent emissions quantification method for the EGU sector will 

produce the most reliable results. However, agencies have the option to use the same or 

different EGU emissions quantification approaches throughout the SIP process. If different EGU 

emission quantification approaches are applied throughout the SIP process, the state, tribal and 

local agency should explain the procedures taken to ensure that differences in methodologies

do not lead to inconsistencies in future EGU emissions results. (Refer to Appendix I for all 

available emission quantification approaches.)

Perform Energy Modeling To Project Electric Generating Unit Baseline Emissions

Integrated Planning Model of Electric Generating Unit Baseline Emission Projections 

The EPA uses IPM to simulate the power sector behavior and to analyze the impact of 

environmental regulations.11 The emission outputs generated by EPA’s modeling are average 

seasonal emissions (ozone and non-ozone seasons) at the emission unit level and are

streamlined to be used as direct inputs into air quality models. Even where jurisdictions use the 

 

11 For more information on detailed documentation of the latest publicly available versions of NEEDS and IPM, go 

to: http://www.epa.gov/airmarkets/progsregs/epa-ipm/BaseCasev410.html.
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baseline emission projections generated by IPM, state, tribal and local agencies need not use 

IPM in the SIP process. However, if a jurisdiction uses IPM in part for its EGU SIP analysis in 

conjunction with an alternative method, then it is important for state, tribal and local agencies 

to explain the procedures taken to help ensure consistent results.

Future Attainment Year Baseline Using Other Approaches 

State, tribal and local agencies can develop their own SIP/TIP baseline emissions 

growth/forecast for the electric power sector. If an agency chooses to develop its own baseline 

emissions projections for SIP/TIP purposes, assumptions must be made to reflect:

1) Electricity demand and electricity supply, 

2) EGU emission characteristics, and 

3) How and when EGUs will operate in the future. 

The projection of new generation does not need to be an independent forecast developed by 

the state, tribal or local air agency, but can be derived from other available forecasts. When 

other forecasts of generation capacity are used, document the assumptions in those forecasts 

and how the assumptions relate to other assumptions of the baseline emission projection, such 

as demand and emissions.

Refer to pages E-13 and E-14, of this appendix, for more details on the proper documentation 

state, tribal and local agencies should provide when conducting an analysis with EE/RE policies 

and programs. 

Other appendices in this document describe the emission quantification approaches 

jurisdictions can use for an alternative baseline emissions projection. Refer to Appendix I for 

more information on emission quantification approaches. Appendix J provides information on 

how state, tribal and local agencies can utilize estimates of energy savings and generation for 

state “on the books” EE/RE policies. 

SECTION E.4: STEPS FOR INCORPORATING “ON THE BOOKS” COMBINED 

HEAT AND POWER POLICIES

This section describes the four steps state, tribal and local agencies should consider when 

incorporating “on the books” CHP policies within the baseline.

Step 1: Review CHP sources in baseline inventory and the relative emission rates for CHP

generation

Step 2: Determine CHP policy assumptions in electric generating unit baseline 

projections

Step 3: Review “on the books” CHP policies to determine if more can be included in 

electric generating unit baseline projections

Step 4: Project electric generating unit baseline emissions for attainment year(s) in the 

future 
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Step 1: Review Combined Heat and Power Sources in Baseline Inventory and 

the Relative Emission Rates for Combined Heat and Power Generation

The first step is to review the baseline inventory and assess if combined heat and power 

facilities are already present in the inventory. The EPA recommends that agencies assume that 

CHP facilities in baseline inventory will also have the same annual emission rates in the future 

year inventory, unless the jurisdiction knows a facility is modifying or shutting down prior to the 

future year inventory.

Step 2: Determine Combined Heat and Power Policy Assumptions in Electric 

Generating Unit Baseline Projections

The EIA develops CHP capacity (MW) and net generation (MWh) projections in its AEO by fuel 

type for the commercial and industrial sectors. The projections cover all size ranges, fuels and 

applications appropriate for CHP. The projections are based on the economics of CHP based on 

projected electricity and fuel prices and CHP system cost and performance. On-site CHP is then 

reflected as a reduction in each sectors’ purchased electricity demand profile in the AEO 

projection. Incremental fuel and emissions at the site due to CHP are included in each sectors 

fuel consumption and emissions projection. The CHP policy that is explicitly included in the 

2010 AEO baseline projections12 is the Federal Investment Tax Credit, which is in place through 

December 31, 2016 and provides a 10 percent tax credit for the first 15 MW on systems up to 

50 MW in size.

Step 3: Review “On the Books” Combined Heat and Power Policies to 

Determine if More can be Included in Electric Generating Unit Baseline 

Projections

State, tribal and local agencies should examine if the information source for EGU projections 

includes adopted state CHP policies. If agencies are using EIA’s forecast assumptions, EPA has 

identified “on the books” CHP policies already explicitly incorporated into AEO 2010, as 

described above. The EPA is providing a methodology and energy information for future years 

through 2020.

13

 State-level CHP policies that could potentially be included in the EGU baseline 

include the following.

State renewable or energy efficiency portfolio standards that include CHP

Financial incentive programs for CHP and EE measures 

Documentation Procedures

CHP policies are only a few of the many assumptions incorporated into an EGU baseline 

projection. Any CHP policies that are explicitly included in an EGU baseline projection would 

need to be documented with the following information:

Policy name 

Whether the policy is codified in state or local rule

Are the affects of the CHP policy already captured by another EE or RE policy?

 

12 For more information on AEO 2010, go to: http://www.eia.doe.gov/oiaf/archive/aeo10/index.html.

13 For more details on the methodology and energy savings/generation information, go to Appendix J.
E-15

Year enacted

Last year of policy requirement

Policy requirements (e.g., targets in MWh or percent)

Annual energy savings base year (MWh)

Annual energy savings in the future attainment year (MWh)

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment 

Year(s) in the Future 

Step 4 is described above in Section E.3. It applies in all three sections – E.3, E.4 and E.5 – for 

incorporating “on the books” energy efficiency policies, “on the books” combined heat and 

power policies and “on the books” renewable energy policies, respectively. 

SECTION E.5: STEPS FOR INCORPORATING “ON THE BOOKS” 

RENEWABLE ENERGY POLICIES

This section describes the four steps state, tribal and local agencies should consider when 

incorporating “on the books” RE policies within the baseline. 

Step 1: Review RE sources in baseline inventory and the relative emission factor for each 

type of RE

Step 2: Determine what RE policy assumptions are in electric generating unit baseline 

supply projections

Step 3: Review “on the books” RE policies to determine if more can be included in the 

electric generating unit baseline supply projections

Step 4: Project electric generating unit baseline emissions for attainment year(s) in the 

future 

Step 1: Review Renewable Energy Sources in Baseline Inventory and the

Relative Emission Factor for Each Type of Renewable Energy 

The first step is to review the baseline inventory and assess if renewable energy facilities are 

already present in the inventory. Renewable energy facilities can be defined in different ways; 

some renewable energy definitions only include zero emitting facilities, while other definitions 

include facilities that are low emitting facilities. Regardless of the definition, each RE facility 

should be examined to determine the amount of annual emissions generated by each RE facility

in the base and future attainment year. 

Step 2: Determine What Renewable Energy Policy Assumptions are in Electric 

Generating Unit Baseline Supply Projections

The RE policies that are explicitly included in AEO 201014 baseline projections and EPA’s EGU 

projections are the Renewable Portfolio Standards (RPS)15 for 30 states (and Washington, D.C.)

that were adopted and effective as of September 2009. The EIA periodically updates the AEO

 

14 For more information on AEO 2010, go to: http://www.eia.doe.gov/oiaf/archive/aeo10/index.html.

15 EIA (2010), pp.14-17. 
E-16

forecasts and assumptions; therefore, jurisdictions should explain any new assumptions that 

affect RE policy inclusions in the AEO forecast. 

Step 3: Review “On the Books” Renewable Energy Policies to Determine if 

More can be Included in the Electric Generating Unit Baseline Supply 

Projections

States should examine if the information source for EGU supply projections includes all state RE 

adopted policies. If states are using EIA’s supply forecast assumptions, EPA has identified “on 

the books” RE policies not already explicitly incorporated into AEO 2010. For RE, this includes 

RPSs for 30 states (and Washington, D.C.) that were adopted and effective as of September

2009.

16

The EPA is providing a methodology for estimating energy impacts of EE/RE policies and energy 

information for future attainment years through 2020.

17

 If states are using a different version 

of EIA’s AEO, then state, tribal and local agencies should review the RE assumptions with the 

AEO to determine which policies could be added. 

Documentation Procedures

Renewable energy policies represent only one of the many assumptions incorporated into an 

EGU baseline projection. Any RE policies that are explicitly included in an EGU baseline 

projection should include the following information: 

Policy name 

Whether the policy is codified in state or local rule

Year enacted

Last year of policy requirement

Policy requirements (e.g., targets in MWh or percent)

Annual energy generation base year (MWh)

Annual energy generation in the future attainment year (MWh)

If a state’s RPS allows EGUs using fuels, (such as clean coal or biomass) that emit pollutants to 

qualify as RE sources, then air quality planners need to account for the emissions associated 

with the sources used to meet the RPS targets in the base and future attainment year. 

Step 4: Project Electric Generating Unit Baseline Emissions for Attainment 

Year(s) in the Future 

Step 4 is described above in Section E.3. It applies in all three sections – E.3, E.4 and E.5 – for 

incorporating “on the books” energy efficiency policies, “on the books” combined heat and 

power policies and “on the books” renewable energy policies, respectively. 

 

 

16 EIA (2010), pp.14-17.

17 For more details on the methodology and energy savings/generation information for the policies listed here, go 

to Appendix J.
E-17

REFERENCES

EIA (2010). Assumptions to the AEO 2010 With Projections to 2035. April 2010. Available online at 

<http://www.eia.gov/oiaf/aeo/assumption/pdf/0554(2010).pdf>
18

United States

Environmental Protection

Agency

Office of Air Quality Planning and Standards

Outreach and Information Division

Research Triangle Park, NC

Publication No. EPA-456/D-12-001f

July 2012