AEE Reacts to EPA Release of Updated Draft
Model Trading Rule for Clean Power Plan
[Washington, D.C., Dec. 19, 2016] — Upon the release by the U.S. Environmental Protection Agency (EPA) of the updated draft Model Trading Rules and other supporting materials for the Clean Power Plan, Advanced Energy Economy (AEE) issued the following statement:
“While the future of the Clean Power Plan itself is uncertain, these updated draft model trading rules give states and utilities a blueprint for moving toward more cost-effective advanced energy options — a transition well underway with or without the CPP in place," said Matt Stanberry, vice president of market development for Advanced Energy Economy, a national business association. "The new working draft includes important improvements in areas where we had expressed concerns previously, and we look forward to digging in further.”
In comments submitted to EPA on the proposed model trading rule, AEE made several suggestions for improvements. From our initial review of the working drafts released today, we are pleased to see that some of our suggestions have been adopted—and we look forward to a full review of changes made by the Agency in the following areas:
- Improved allowance allocation under mass-based plans: AEE is pleased to see that EPA has moved away from a single, default allocation approach that would dampen competition and increase compliance costs. AEE is glad to see EPA instead emphasize the flexibility for states to choose different approaches to meet their specific state goals, such as minimizing costs, delivering ratepayer savings, and increasing resource diversity.
- Stronger provisions to address leakage: AEE was very concerned that the allowance set-asides as originally designed under the proposed mass-based model trading rule would have excluded key technologies and failed to address leakage, and we are glad to see that EPA has not finalized any single allowance allocation-based approach as a presumptively approvable means to address leakage. Fixing this is key to incent a robust market response and to meet CPP targets. We look forward to reviewing EPA’s Leakage Requirements document, also released today.
- Ensure that all advanced energy technologies can participate and compete: Throughout the mass-based and rate-based model trading rule, as originally proposed, there were certain eligibility requirements that intentionally and unintentionally excluded cost-effective and commercially proven technologies. AEE commented extensively on these issues, and we will be reviewing all sections of the working draft of the model trading rules carefully looking for key changes that provide for more robust participation across different technologies.
EPA’s Model Trading Rules provide states with guidance and regulatory language that can be used in full or in part as states develop compliance plans under the Clean Power Plan. The proposed Model Trading Rules were included alongside EPA’s proposed Federal Plan, which was released August 3, 2015. EPA asked for comments on the entire Federal Plan rulemaking, including the Model Trading Rules, by January 21, 2016.
On the basis of the input received, EPA has updated its Model Trading Rules, resulting in the working drafts released today. These drafts will not be published in the Federal Register, and the docket for the Model Trading Rules and Federal Plan remains open.
In addition to providing input on the proposed Model Trading Rules and Federal Plan, AEE has published several reports on the CPP, including:
- A Performance-based Approach to Allowance Allocation for Clean Power Plan Compliance is here.
- Competitiveness of Renewable Energy and Energy Efficiency in U.S. Markets report is here.
- Markets Drive Innovation: Why history shows that Clean Power Plan will stimulate a robust industry response report is here.
- Integrating Renewable Energy into the Electricity Grid, The Brattle Group (with case studies from ERCOT and Xcel Energy Colorado) report is here.
- State CPP compliance modeling shows for various states analyzed, most can comply and reduce electric costs for customers by incorporating energy efficiency, renewables and natural gas. See analysis and access modeling tools for several states here.
- “Use of ‘Third-Party Entities’ for State and Federal Implementation of the Clean Power Plan: Issues and Options,” written by attorneys at the law firm Van Ness Feldman is here.
- This is Advanced Energy, directory of 52 technologies, is here.
About Advanced Energy Economy
Advanced Energy Economy is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. AEE and its State and Regional Partner organizations are active in 27 states across the country, representing more than 1,000 companies and organizations in the advanced energy industry. Visit AEE online at www.aee.net.