The Environmental Protection Agency may be picking winners and losers as it wraps up talks with states, utilities and others on creating a clean energy program meant to drive solar, wind and energy efficiency to help states comply with far-reaching emission rules.
The EPA wrapped up initial calls with stakeholders Tuesday on its Clean Energy Incentive Program, after President Obama left Paris after the beginning of the United Nations climate change negotiations that will conclude Dec. 11.
The incentive program is a key part of EPA's climate rules for power plants, which are integral to the U.S. meeting its commitments under any U.N. agreement on emission reductions. The weeks of calls the agency concluded Tuesday were meant to field questions about the clean energy program, which was not included in the draft rules but added when the rules were finalized.
As one could imagine, there are many questions over how the program will work.
EPA Assistant Administrator Janet McCabe, noting that 140 people were on Tuesday's call, said the Clean Energy Incentive Program seeks "to reward early" action on meeting the emissions reduction targets under the agency's Clean Power Plan, which 27 states are opposing in federal appeals court.
The plan requires states to reduce a third of their greenhouse gas emissions by 2030. Many scientists say the emissions are causing the Earth's climate to warm, resulting in more severe weather. The states opposing the rules say the rules go far beyond EPA's authority under the law and are unconstitutional by violating states' rights.
A lawyer representing rural utilities on the call asked if the clean energy program could go beyond supporting wind and solar. He said he understood why the EPA was promoting the two resources, because they can be deployed rapidly. Nevertheless, one of his utility clients has a new hydro-electric power project that is environmentally benign and will be serving low-income communities, but it won't get credits even though it was built in response to the climate rules that go into effect in 2022.
A geothermal industry official submitted written comments to the EPA Tuesday, scolding the agency for missing a huge opportunity by ignoring low-emission technologies beyond solar and wind.
"The EPA is missing a giant opportunity with regard to the Clean Energy Incentive Program," said Rick Clemenzi, an engineer with Geothermal Design Center Inc. He said geothermal heat pump technologies are proven to be the most efficient for providing residential heating, cooling and hot water by using the constant temperature of the Earth. "Yet this very important technology has been left out of [the incentive program]."
Geothermal heat pumps can reduce and "even eliminate" carbon dioxide and greenhouse gas "production from the heating and cooling of buildings which can eliminate almost 40 percent of our current [greenhouse gas] pollution." It also helps buildings to shift away from using expensive peak electric power from the grid, "thus reducing the peak electric generating capacity required."
Any reduction in peak electric generation will directly reduce greenhouse gas pollution because fossil fuels are used for peak production, Clemenzi wrote.
EPA staff noted that suggestions for modifying the program should be submitted in written comments by Dec. 15.
McCabe described the clean energy program as providing states with matching credits for ramping up solar and wind energy, or by increasing energy-efficiency programs that benefit low-income residents.
The states would establish their own systems to provide credits to clean energy and efficiency providers, which the EPA will match up to 300 million tons of carbon dioxide emissions reduced, according to McCabe and EPA staff. The state credits would need to undergo third-party verification to ascertain the amount of energy saved, or clean energy produced before receiving the matching credits from the EPA.
The credits can be sold to fossil power plant operators to help them comply with the low-emission standards.
A public official with one of the states participating in the Northeast region's cap-and-trade program, called the Regional Greenhouse Gas Initiative, said he was concerned that the credits would be useless in states that already have separate credit trading and emission allowance programs.
"RGGI has its own mass-based allowance system, but [the EPA] allowances won't be RGGI allowances, that won't be tradable in the RGGI region," the official said.
An EPA staffer said the two credits would be two commodities, so on that point "you're right," and advised further discussion in written comments.
The agency says states can volunteer to participate in the Clean Energy Incentive Program in a "non-binding" statement of intention that they must include in the Clean Power Plan compliance plans they must begin submitting next year.