EPA's Clean Power Plan: Evaluating State Compliance Plan Options

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1 NASEO Energy Policy Outlook Conference EPA's Clean Power Plan: Evaluating State Compliance Plan Options February 5, 25

2 Tools for (d) Compliance Incorporating Energy Efficiency and Renewable Energy Policies into Section (d) Greenhouse Gas Compliance Plans. Report prepared for NASEO on state energy efficiency and renewable energy policies, including case studies of potential (d) compliance scenarios for Minnesota, Arizona, and Pennsylvania. MJB&A Clean Power Plan Evaluation Tool. User friendly software tool for evaluating alternative Building Block assumptions. MJB&A Clean Power Plan Evaluation Tool (Second Generation). User friendly software tool for evaluating alternative Building Block assumptions and alternative state or regional compliance scenarios. 5 February 25 2

3 State Plan Decision Tree Rate Based Goal Selection Mass Based 2 State Only State or Regional Regional Cooperation 3 Regulatory Options Rate Based Trading System Mass Based Trading System Portfolio of Measures Rate Based Trading System Mass Based Trading System Renewable Energy Standard Energy Efficiency Programs Integrated Resource Plan Components 5 February 25 3

4 Survey of State Policies Policy Type Supply Side Demand Side Mandate Renewable energy standards Alternative energy portfolio standards Renewable energy procurement requirements Energy efficiency resource standards State appliance standards Building energy codes (and code enforcement) Financial incentives Tax credits Grant programs Net metering State tax credits Alternative rate mechanisms Lead by example programs and energy savings performance contracting 5 February 25 4

5 Generation Fuel Mix Generation by Fuel Type Arizona Minnesota Pennsylvania TWh TWh TWh February 25 5

6 CO 2 Emissions Electric Sector CO 2 Emissions Trends Arizona Minnesota Pennsylvania million short tons million short tons million short tons February 25 6

7 Compliance Analysis State RES EERS Arizona 5% by 225 (with distributed energy carve out) 22% cumulative savings by 22 Minnesota 3% by 22 Xcel Energy 25% by 225 Other Utilities.5% annual savings (from three year average baseline) Pennsylvania 8% by 22 (Tier I only)* Phase III (to be determined) *Wind, wood waste, and landfill gas accounted for 84% of Tier I resources in February 25 7

8 RES Forecasts RES Levels by State Estimated Level of Renewable Ouput Required by RES GWh 25, 2, Minnesota 5, Pennsylvania (85%), 5, Arizona In-State Renewable Generation: Arizona Minnesota Pennsylvania Analysis Notes:. Pennsylvania's Alternative Energy Portfolio Standard (AEPS) also includes non-renewable resources. Wind, landfill gas, and wood waste accounted for 84% of Tier I resources in 22. [PA Public Utility Commission. 22 Annual Report: Alternative Energy Portfolio Standards Act of 24. October 23.]. Because of this, the Estimated Level of Renewable Output for Pennsylvania (green dash line) is adjusted as 85% of the RPS forecast through February 25 8

9 Rate-Based Compliance Formula EPA s Compliance Formula CO 2 Emissions from fossil fuel-fired power plants fossil MWh + + renewable nuclear MWh* + MWh energy savings = State Average CO 2 Rate *EPA s proposed rule would allow states to include 5.8% of existing nuclear capacity and % of under construction nuclear capacity (both at an assumed 9% capacity factor).. 5 February 25 9

10 Projected Emissions Rates Projected CO 2 Emissions Rate lbs/mwh,4 Arizona Minnesota Pennsylvania lbs/mwh lbs/mwh,4,4,3,2,3,3,,2,2 interim goal,,, 9,, final goal 8 7 interim goal final goal 9 interim goal final goal February 25

11 MJB&A Clean Power Plan Evaluation Tool Main Dashboard 5 February 25

12 Tool Registration To request a copy of the Clean Power Plan Evaluation Tool, please go to 5 February 25 2