From: Wayland, Robertj [mailto:Wayland.Robertj@epa.gov]

Sent: Thursday, May 29, 2014 1:07 PM

To: Cortney Higgins

Cc: Culligan, Kevin

Subject: FW: Comments on TSD Chapter 4 (version dated 5/23)

Cortney –

Here are responses to your comments/questions on Chapter 4. Please let Kevin/me know if you have any questions/concerns.

thanx!

bob

Robert J. Wayland, Ph.D. Leader, Energy Strategies Group U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Sector Policies and Programs Division

Mail Code D243-01 Research Triangle Park, NC 27709 Office: (919) 541-1045 Cell: (919) 306-2290 Fax: (919) 541-5450

Email: wayland.robertj@epa.gov

************************************* DRAFT/Deliberative Document - FOIA Exempt

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From: Stenhouse, Jeb

Sent: Thursday, May 29, 2014 11:21 AM

To: Wayland, Robertj; Srivastava, Ravi

Cc: Culligan, Kevin; Conlin, Beth; Sims, Ryan

Subject: RE: Comments on TSD Chapter 4 (version dated 5/23)

Bob, here are responses that we feel are ready to go back to OMB.

Below are comments received on chapter 4 of the GHG abatement TSD.General comment: It is not clear how prior recommendation to take comment on a wider variety approaches to determining RE potential has been resolved. To reiterate, commenters suggest that EPA allow the targets to grow beyond the regional average to meet existing RPS levels already determined by that state. We recommend that EPA take comment on other approaches as well, including those based on modifications to the existing RPS methodology or those that rely on estimates of economic potential.

EPA: EPA is taking comment on an alternative RE approach that derives targets based on technical and economic potential.

**

Comment A44 & A45: “2013 has been a strong year for solar, and we expect continued acceleration in deployment, especially with the ITC continuing to 2016 and rapidly declining technical costs. We also expect 2014 to be a str ong year for wind, with many projects starting construction prior to expiration of the PTC. Keeping renewable growth flat from 2012 to 2017 will grossly underestimate the renewable deployment in the 2017 start year. For states with existing RPSs, DOE recommends assuming they continue to meet their RPS targets through 2017. “

EPA Response: These calculations apply the RPS requirements as the target-setting criteria to historical generation data that does not make any projections as to future behavior. Any additional qualifying capacity added between 2012 and 2017 will be able to have its generation during the program period count towards state compliance.

New* response to EPA response: Not adjusting for the significant growth in RE generation that we’ve already seen since 2012 weakens the stringency of the rule, since, as EPA stated, states will be able to count generation that has already been deployed, enabling some states to potentially meet their RE goals before the policy ever takes effect. Any generation that was added last year should not be considered “future behavior.” While early action should be counted and encouraged, RE goals should be beyond BAU, in order to adequately represent BSER.

EPA: The proposed RE target-setting approach requires a data set reflecting the current level of performance for all utility-scale RE sources for all states, and the most recent data available is EIA 2012 detailed state generation data. The targets derived from the proposed approach reflect a reasonable increase in RE generation over expected levels across the regions analyzed. EPA is also requesting comment on an alternative method that derives targets based on technical and economic potential, a method which uses 2012 generation of leading states as a benchmark for development of technical potential instead of as a baseline for growth.

Comment A48: EPA response: This is an adjustment made to the method following submission of the TSD to interagency review. This adjustment assures that Alaska and Hawaii are treated differently in determination of growth rate, based upon their unique historical generation.

New* response to EPA response: If EPA is treating HI and AK like the least stringent region (SE), then they should also have to meet the SE’s growth requirement of 13%/year.

EPA: EPA assigned the least stringent regional RE target to Alaska and Hawaii to account for the fact that they do not have bordering states from which we can derive a collective regional basis for RE potential, however this regional target does not reflect the unique RE resources available to these two states. The use of their individual historical RE generation as a basis for their growth factor integrates data unique to Alaska and Hawaii into thederivation of their state targets. EPA is also specifically seeking comment on the treatment of Alaska and Hawaii as part of RE target-setting.

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

Sent: Wednesday, May 28, 2014 5:43 PM

To: Wayland, Robertj

Cc: Culligan, Kevin; Elman, Barry

Subject: Comments on TSD Chapter 4 (version dated 5/23)

Hi Bob,

Below are comments received on chapter 4 of the GHG abatement TSD.

General comment: It is not clear how prior recommendation to take comment on a wider variety approaches to determining RE potential has been resolved. To reiterate, commenters suggest that EPA allow the targets to grow beyond the regional average to meet existing RPS levels already determined by that state. We recommend that EPA take comment on other approaches as well, including those based on modifications to the existing RPS methodology or those that rely on estimates of economic potential.

**

Comment A44 & A45: “2013 has been a strong year for solar, and we expect continued acceleration in deployment, especially with the ITC continuing to 2016 and rapidly declining technical costs. We also expect 2014 to be a str ong year for wind, with many projects starting construction prior to expiration of the PTC. Keeping renewable growth flat from 2012 to 2017 will grossly underestimate the renewable deployment in the 2017 start year. For states with existing RPSs, DOE recommends assuming they continue to meet their RPS targets through 2017. “

EPA Response: These calculations apply the RPS requirements as the target-setting criteria to historical generation data that does not make any projections as to future behavior. Any additional qualifying capacity added between 2012 and 2017 will be able to have its generation during the program period count towards state compliance.

New* response to EPA response: Not adjusting for the significant growth in RE generation that we’ve already seen since 2012 weakens the stringency of the rule, since, as EPA stated, states will be able to count generation that has already been deployed, enabling some states to potentially meet their RE goals before the policy ever takes effect. Any generation that was added last year should not be considered “future behavior.” While early action should be counted and encouraged, RE goals should be beyond BAU, in order to adequately represent BSER.

Comment A48: EPA response: This is an adjustment made to the method following submission of the TSD to interagency review. This adjustment assures that Alaska and Hawaii are treated differently in determination of growth rate, based upon their unique historical generation.New* response to EPA response: If EPA is treating HI and AK like the least stringent region (SE), then they should also have to meet the SE’s growth requirement of 13%/year.