U.S. States & Regions

States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
 

Innovative financing program helps South Carolina homeowners save money through energy efficiency retrofits

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An innovative energy-financing program has helped customers of South Carolina rural electric cooperatives to undertake energy efficiency retrofits for their homes, substantially reducing their energy use and saving money. 

Through on-bill financing (OBF), customers pay back the cost of the retrofit through monthly installments on their electricity bill. This strategy helps to expand access to costly energy retrofits to low-income residents and makes the financial benefits immediately apparent. If monthly energy savings are greater than or equal to the loan repayment, then OBF will be “bill neutral” and result in the same or lower monthly electricity bills . In addition, the financial obligation of OBF is tied to the electricity meter of each house and can be passed on to subsequent owners and residents; thus, customers only pay for the energy retrofits for as long as they live there. 

A preliminary review of South Carolina’s pilot program, called “Help my House,” found that the 125 participating households are projected to save an average of $400 each year after loan repayments. Energy use could be reduced by thirty-five percent, or approximately 11,000 kilowatt-hours each year. The retrofits, which included improvements to insulation, sealing, and heating, ventilation, and air-conditioning (HVAC) systems, cost an average of $7,200, with projected simple payback periods of 5.86 years. In addition, ninety-six percent of participants reported satisfaction with the efficiency installations and rated their homes as more comfortable after the retrofit.

The program was launched in 2011 by the Central Electric Power Cooperative, which supplies wholesale electricity to 20 rural South Carolina electric cooperatives, and the Electric Cooperatives of South Carolina, the co-ops’ marketing and policy partner, with support from the Environmental and Energy Study Institute. A full-scale OBF energy-efficiency program implemented by South Carolina cooperatives could save an estimated $270 million per year in electricity costs and create more than 7,000 jobs after 20 years, according to an analysis by Coastal Carolina University.

South Carolina utilities were authorized to offer OBF through the passage of Senate Bill 1096 in 2010. The bill eliminated the need for credit checks by tying the financial obligation to the meter rather than to the individual borrower, and allowed utilities to disconnect power if loan repayments are not made. Utilities in 22 other states offer OBF, with supporting state legislation in Illinois, Hawaii, Oregon, California, Kentucky, Georgia, Michigan, and New York.

In addition, “Help my House” was funded by a $740,000 loan from the U.S. Department of Agriculture’s (USDA) Rural Utility Service (RUS), which supports the development of electric, water, and telecommunications services in rural regions. This was the first time RUS funded an energy efficiency initiative, but more cooperatives around the country may follow South Carolina’s example. On July 17 USDA proposed a rule that would create a new RUS program to provide up to $250 million in loans for energy efficiency improvements. The proposed Energy Efficiency and Conservation Loan Program would allow rural electric cooperatives to provide energy efficiency retrofits, including those funded by OBF programs, audits, renewable energy systems, and more. 

For more information: 

Help My House Pilot Program – Summary Report

Environmental and Energy Study Institute – Fact Sheet

 

Business and government start preparing for climate impacts

Today’s Senate hearing isn’t just about the science of climate change. It’s also about the actions that need to be taken now to adapt to the reality of a changing climate. Businesses and governments each have a critical role to play in building resilient communities and economies.

Business-as-usual is already being interrupted by extreme heat, historic drought, record-setting wildfires, and flooding. Events from water shortages to floods are disrupting the supply chains for such companies as Honda, Toyota, Kraft, Nestle and MillerCoors. By the end of 2011, the United States had recorded more billion-dollar disasters than it did during all of the 1980s, totaling about $55 billion in losses.

New York adopts regulations limiting power plant carbon emissions

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On June 28, 2012, New York State finalized its rule limiting carbon dioxide emissions from new power plants, and capacity additions to existing plants, within the state. The rule, 6 NYCRR Part 251, would effectively prevent the construction of new coal-fired power plants unless they are combined with carbon capture and sequestration technology. The new state standard is stricter than the federal rule proposed by the U.S. Environmental Protection Agency in April 2012. The regulation takes effect July 12, 2012.

Please see our original news story for the details of the regulatory standard.

U.S. States: Emissions Caps for Electricity

New York Dept. of Environmental Conservation: Adopted Part 251 CO2 Performance Standards for Major Electric Generating Facilities
 

New Ohio law tackles broad sweep of energy measures

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On June 11, Ohio governor John Kasich signed a new energy law that establishes one of the United States’ strictest regulatory frameworks for new natural gas drilling technologies. The law, S.B. 315, also makes cogeneration an eligible option for meeting the state’s target of 12.5 percent renewable energy generation by 2025. Other measures address smart grids and electricity pricing, natural gas vehicles, alternative fuel loans, and green building standards for state-owned buildings. 

New Regulations for Natural Gas Drilling

Eastern Ohio’s deep shale formations may be among the largest natural gas reservoirs in the U.S., and the new law will regulate the horizontal drilling and hydraulic fracturing (commonly known as “fracking”) necessary to explore these resources. Fracking, in particular, raises concerns for its use of industrial chemicals and potential impacts on water quality.

S.B. 315 addresses those concerns with requirements for the disclosure of chemicals and additives used in all stages of the drilling and fracking process. It also requires developers to conduct tests of water wells in the vicinity before drilling a new horizontal well or any well in an urbanized area. Developers must also identify in their permit applications all water sources that will be used for drilling. 

Supported by the oil and gas industry, the law has met with criticism from environmental groups, since companies can avoid disclosing chemicals by claiming them as proprietary trade secrets. Other objections are that operators do not have to disclose chemicals until up to sixty days after the completion of drilling, and the lack of public commenting throughout the permit application process.

Cogeneration to Qualify as Renewable Energy

The new energy law reclassifies cogeneration as a renewable energy technology under Ohio’s alternative energy portfolio standard (AEPS). The portfolio standard, which governs the state’s electricity generation mix, includes separate targets of 12.5 percent each for both renewable (such as wind and solar) and advanced energy (such as clean coal or nuclear) generation by 2025. Previously, cogeneration counted toward the advanced energy target, but because the advanced energy standard lacks interim targets, electric utilities made little progress in developing new cogeneration projects.

To encourage faster development, S.B. 315 revises the AEPS to allow certain kinds of cogeneration to count toward the renewable energy standard, which does have yearly interim targets. Specifically, utilities can use electricity generated from waste energy recovery (WER) systems to fulfill either the renewable target or a separate energy efficiency standard, but not both. Under the new definition, Ohio is the only state to classify electricity generation from waste heat as a renewable energy source.

Critics worry that including WER systems under the renewable energy standard will undermine the development of renewable energy sources such as wind and solar in Ohio. Wind developers argue that the incremental targets are not ambitious enough to provide room for both renewables and WER systems, and may damage the prospects of several wind energy projects that are already underway.

Other Clean Energy Measures: Transportation, Grid, and Buildings

Finally, the new law includes several other clean energy measures, such as one supporting the wider adoption of natural gas vehicles. The Public Utilities Commission of Ohio (PUCO) and Ohio Department of Transportation (ODOT) will conduct a study on the cost-effectiveness of compressed natural gas vehicles, including the conversion of the state’s fleet to run on natural gas. The law also authorizes ODOT to work with other states on a regional study of the development of compressed natural gas infrastructure for transportation.

In addition, the law authorizes PUCO to undertake several electricity-related initiatives. The commission will periodically review any green pricing programs offered by utilities. It will also undertake a study on how increased energy efficiency, demand response, generation, transmission, and emerging technologies can increase opportunities for consumer choice. In addition, PUCO will review the electricity distribution and transmission infrastructure and evaluate the need for improvements, additions, and upgrades.

S.B. 315 also updates and expands several green-building codes for state-owned buildings. The law requires that cogeneration be considered as a potential energy source as part of the lifecycle cost analysis for state-funded facility projects with a construction cost of $50 million or more. The new law also expands the definition of energy conservation measures to include tri-generation systems (which produce electricity and both heat and cooling), renewable energy systems producing electricity for the building, and the optimization of computer servers, data storage devices, and other information technology infrastructure.

For more information:

Renewable and Alternative Energy Portfolio Standards

Climate Techbook: Cogeneration / Combined Heat and Power (CHP)

Climate Techbook: Natural Gas

Ohio General Assembly: S.B. 315

Ohio.gov: Senate Bill 315 – Improving Regulatory Framework

Bricker & Eckler LLP: Ohio Senate Bill 315: A Summary of Governor Kasich’s Energy Bill

Midwest Energy News: Ohio could pit cogeneration against wind farms

U.S.’s first mandatory, market-based program to reduce greenhouse gas emissions reports 23 percent reduction

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The Regional Greenhouse Gas Initiative (RGGI) is undertaking a review of its first compliance period, which ran from 2009 through 2011 and saw successful reductions in greenhouse gas emissions below its initial targets. The power sector of nine Northeast and North Atlantic states reported annual average carbon emissions of 126 million short tons during the three year-period, representing a 23 percent reduction compared to the previous three-year span of 2006 through 2008. 

Overall, 206 out of the 211 power plants within RGGI's jurisdiction achieved their compliance objectives. Emission levels in the first compliance period were 33 percent below the program's annual cap of 188 million short tons.

The decline in carbon emissions was achieved without a comparable decline in the total quantity of electricity consumption, which dropped just 2.4 percent during the same timeframe. The reasons for the emission reduction include a greater use of natural gas for electricity generation instead of coal, investment in energy efficiency, and the increased use of renewable energy as part of states' renewable portfolio standards.

RGGI includes nine states of the Northeast and Mid-Atlantic and is the United States' first mandatory, market-based program to reduce carbon emissions through cap and trade. Regulated entities are required to purchase and hold one allowance, or credit, for each short ton of carbon dioxide they emit. The program limits the total amount of emissions by issuing a set number of allowances (the cap). Entities whose emissions exceed their allowances can purchase more from those that emit less (the trade), creating an incentive to reduce emissions for those that can do so cheaply. The cap can be decreased each year to reduce overall emissions.

In addition, RGGI has created many benefits for participating states, generating 16,000 job-years of work and $1.6 billion worth of economic activity over the three years, according to an Analysis Group study. Energy efficiency improvements funded through RGGI allowance auctions will also help customers save $1.3 billion on their electricity, natural gas, and heating bills over the next decade.

The second compliance period extends from 2012 through 2014, with an annual emissions cap of 165 million short tons. Starting in 2015, the cap will be reduced by 2.5 percent each year, for a total reduction of 10 percent from 2009 levels by 2018. But because the program has already outperformed this target, six out of the nine RGGI states are now considering tightening the cap for even further reductions.   

For more information:

Regional Greenhouse Gas Initiative (RGGI)

Emissions Caps for Electricity

RGGI: 97% of RGGI Units Meet First Compliance Period Obligations

Analysis Group: New Analysis Quantifies Economic Impact of Regional Greenhouse Gas Initiative in Ten States
 

California's net-metering program gains new lease on life

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Rooftop solar received a major boost in California with a new ruling from state regulators on May 24. The California Public Utilities Commission (CPUC) voted unanimously to reinterpret a cap on its net-metering program, more than doubling the potential amount of rooftop solar in the state.

Net metering provides a financial incentive for small businesses and homeowners to install energy generation on-site, usually solar photovoltaic panels. Any electricity in excess of customer usage is sold back to the utility at the retail rate – higher than the wholesale rate earned by traditional generators. This is credited to the customer's bill to offset consumption from the grid when the customer's electricity demand exceeds their own generation.

However, the program was approaching a cap that the utilities were allowed to set. This limited each utility’s available net-metering capacity to five percent of its "aggregated customer peak demand." Utility companies had previously interpreted this to mean their highest overall demand on one particular day. Using this definition, Pacific Gas & Electric (PG&E), the state’s largest electric utility, was expected to reach its limit in 2013, after which it would no longer accept participants. The new decision expands the cap by defining "aggregated customer peak demand" as the sum of the highest electricity demand of each utility customer. This more than doubles the potential size of the program from the current 1.2 gigawatts (GW) to 4 GW, according to Environment California. This is about six percent of California’s net summer capacity. 

Utilities oppose the expansion, arguing that by paying less or no money on their bills, net-metering participants are passing on their fair share of system costs onto other customers. These costs include payments for transmission grid upgrades and maintenance, low-income customer assistance programs, and municipal electricity systems. PG&E has 65,000 net-metering customers out of a total of 5.1 million. 

Clean energy supporters and the solar industry say that the program has been critical in driving development of the industry. The net-metering program has already brought in over one billion dollars of investment to California. In a statement, CPUC President Michael Peevey said, "Today’s decision ensures that the solar industry will continue to thrive for years to come, and we are fully committed to developing a long-term solution that secures the future of the industry in California."

The CPUC will commission a study analyzing the costs and benefits of solar net metering, including its impact on nonparticipants. Unless new policies are adopted, the net-metering program will be closed to new customers on January 1, 2015.

California leads the U.S. in installed solar energy capacity, whether it’s distributed rooftop installations or utility-scale solar farms. Indeed, PG&E's net-metering customers alone represent one-third of U.S. total rooftop solar capacity. In 2011, California installed 542.2 megawatts of solar photovoltaic panels, the highest amount in the nation and more than doubling its existing capacity in 2010. Much of this is due to the state’s plethora of policies, rebates, and incentives at all levels of government, from utility loans to city-level rebates to the $3.2 billion state-wide California Solar Initiative. In addition, the state is home to over 1,000 companies in the solar industry, employing more than 25,000 people.

For more information:

Solar Power in C2ES Climate Techbook

C2ES Map of Net-Metering Programs

CPUC Press Release: CPUC takes action to support solar by clarifying net-metering cap

Wall Street Journal: California Expands Rooftop Solar-Power Program

ClimateWire: Calif. lifts limit on number of consumers who can sell power to utilities

Solar Energy Industries Association: California Solar Fact Sheet (pdf)

Clean Technica: 2011 U.S. Solar Market Report – Top 7 Findings & Charts

 

 

Report Highlights Climate Change Risks to Key Gulf Coast Industries

Press Release
June 6, 2012

Contact: Rebecca Matulka, 703-516-4146, matulkar@c2es.org

 

Report Highlights Climate Change Risks to Key Gulf Coast Industries
Recommends Steps to Reduce Impacts on Region’s Energy and Fishing Sectors 

Climate change is already having major impacts on the Gulf Coast region and action is needed to protect its vital industries from the likely impacts of continued warming, according to a new report from the Center for Climate and Energy Solutions (C2ES).

The report, Impacts and Adaptation Options in the Gulf Coast, examines the risks that climate change poses to the region’s energy and fishing industries, and to its residents and local governments. It concludes that climate impacts are already being felt across these sectors, and outlines measures that can be taken to adapt to the growing risks, reducing the region’s vulnerability and the costs associated with future impacts.

The convergence of several geographical characteristics—an unusually flat terrain both offshore and inland, ongoing land subsidence, dwindling wetlands, and fewer barrier islands than along other coasts—make the Gulf Coast region especially vulnerable to climate change. Among the impacts and risks cited in the report:

  • Over the past century, both air and water temperatures have been on the rise across the region;
  • Rising ocean temperatures heighten hurricane intensity, and recent years have seen a number of large, damaging hurricanes;
  • In some Gulf Coast locations, local sea level is increasing at over ten times the global rate, increasing the risk of severe flooding; and
  • Saltwater intrusion from rising sea levels damages wetlands, an important line of coastal defense against storm surge and spawning grounds for commercially valuable fish and shellfish.

“Nowhere else in the U.S. do we see the same convergence of critical energy infrastructure and high vulnerability to climate change,” said C2ES President Eileen Claussen. “These risks are not borne by the Gulf Coast alone. A major energy supply disruption, for instance, would be felt nationwide. We must respond on two fronts: We have to work harder to reduce the greenhouse gas emissions causing climate change. And we must take steps, in the Gulf Coast and elsewhere, to prepare for the impacts that can’t be avoided.”

The report’s lead author is Hal Needham, a researcher at Louisiana State University’s Southern Climate Impacts Planning Program (SCIPP) and an expert on hurricane storm surges in the Gulf Coast. The co-authors are David Brown, an assistant professor in LSU’s Department of Geography and Anthropology, and Lynne Carter, associate director of SCIPP.

In their analysis of the Gulf Coast’s energy industry, which comprises about 90 percent of the region’s industrial assets, the authors found significant risks from hurricanes, sea level rise, rising temperatures and drought. The report noted the considerable damage the energy industry sustained from recent hurricanes in 2004, 2005 and 2008.  Thirty percent of the nation’s refineries are located in Texas and Louisiana, and Louisiana Offshore Oil Port in Port Fourchon is the country’s only deep-water oil import facility. At its current elevation, Louisiana Highway 1, the only access to the port, is projected to be flooded 300 days a year by 2050.

For the region’s other major industry, fishing, the report details major infrastructure risks, especially relating to coastal docking and fish processing. Fish and shellfish populations are also vulnerable to climate impacts, with a combination of warmer water, ocean acidification, and excessive runoff from the Mississippi River combining to increase the risk of large-scale changes in the Gulf ecosystem.

The authors emphasize that advance planning can reduce the region’s vulnerability and the costs incurred from future climate impacts.

For the energy sector, adaptation strategies include learning from recent hurricanes to more rigorously assess vulnerabilities; strengthening design standards for drilling platforms and other infrastructure; and undertaking projects such as the planned raising of sections of Highway 1 to Port Fourchon. To reduce vulnerability in the fishing industry, options include strengthening docking facilities and other infrastructure subject to storm surges, and limiting fertilizer use upstream on the Mississippi River to reduce the incidence of hypoxia (oxygen-starved waters) in the Gulf.

“Climate change is already taking a toll on the Gulf Coast, but if we act now to become more resilient, we can reduce the risks, save billions in future costs, and preserve a way of life,” said Needham. “The Gulf Coast is one of the first regions to feel the impacts of climate change. It only makes sense to be a first mover on climate adaptation as well.”

###

About C2ES
The Center for Climate and Energy Solutions (C2ES) is an independent non-profit, non-partisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change, long recognized in the United States and abroad as an influential and pragmatic voice on climate issues. C2ES is led by Eileen Claussen, who previously led the Pew Center and is the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.

 

Impacts and Adaptation Options in the Gulf Coast

Impacts and Adaptation Options in the Gulf Coast

June 2012

by Hal Needman, David Brown, and Lynne Carter

Download the full report (PDF)

Press Release

Press briefing (mp3)

 

Introduction

The central and western U.S. Gulf Coast is increasingly vulnerable to a range of potential hazards associated with climate change. Hurricanes are high-profile hazards that threaten this region with strong winds, heavy rain, storm surge and high waves. Sea-level rise is a longer-term hazard that threatens to exacerbate storm surges, and increases the rate of coastal erosion and wetland loss. Loss of wetlands threatens to damage the fragile coastal ecosystem and accelerates the rate of coastal erosion.

These hazards threaten to inflict economic and ecological losses in this region, as well as loss of life during destructive hurricanes. In addition, they impact vital economic sectors, such as the energy and fishing industries, which are foundational to the local and regional economy. Impacts to these sectors are also realized on a national scale; Gulf oil and gas is used throughout the country to heat homes, power cars, and generate a variety of products, such as rubber and plastics, while seafood from the region is shipped to restaurants across the country.

This report reviews observed and projected changes for each of these hazards, as well as potential impacts and adaptation options. Information about the scale and relative importance of the energy and fishing industries is also provided, as well as insight into potential vulnerabilities of these industries to climate change. This report also identifies some adaptation options for those industries.

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Florida Revives Lapsed Tax Credits for Renewable Electricity

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On April 14, 2012, Florida enacted H.B. 7117, the state’s first comprehensive energy law in four years.  Passing with overwhelming bipartisan majorities in the House and Senate, the law includes several provisions for clean energy, including a renewal of renewable electricity production tax credits that were allowed to expire in 2010.  Independent analysis suggests the law’s package of incentives will support around 3,000 jobs in all economic sectors and generate tax revenue that will match and exceed the cost of the incentives within a three year window.

Among the law’s key provisions are:

  • A production tax credit of $0.01 per kilowatt-hour of renewable electricity.  For fiscal year 2012-2013, up to $5 million of credits may be claimed, while $10 million of credits will be available annually from fiscal year 2013-2014 through fiscal year 2016-2017.
  • An investment tax credit for capital costs, operations and maintenance, and research and development costs related to investment in the production, storage, and distribution of biodiesel, ethanol, and other renewable fuels. Up to $10 million of credits will be available annually from July 2012 to July 2016.
  • Mechanisms to support residential and commercial energy efficiency improvements, rebates for renewable energy technologies, and rules for awarding the bill’s incentives.
  • Rescission of a directive for the Public Service Commission to develop a Renewable Portfolio Standard of 20% renewable energy by 2020.
  • The new law also removes some barriers to electric vehicle charging by defining it as a public service. 

Florida Department of Agriculture and Consumer Services Commissioner, Adam H. Putnam, said, “The bill offers technology-agnostic tax credits to businesses that demonstrate investment in energy production and create jobs in Florida.  Any form of renewable energy is eligible; the market will determine how investments are made.”  Overall, supporters of H.B. 7117 view it as an important step for establishing a long-term energy policy in Florida and encouraging investment in renewable energy.

Florida Department of Agriculture and Consumer Services Press Release

Florida Department of Agriculture and Consumer Services - Economic Analysis Link

Senate Hearing on Bingaman Clean Energy Standard

My C2ES colleague, Judi Greenwald, will be testifying on Thursday at a hearing of the Senate Energy and Natural Resources Committee on the Clean Energy Standard Act of 2012, a bill written by Sen. Jeff Bingaman (D-NM), the committee chairman. As mentioned in my previous blogs (The Bingaman Clean Energy Standard: Let the Conversation Begin and The Bingaman Clean Energy Standard: What is "Clean"?) and in our primer on the design of a clean energy standard (CES), we think a CES holds a lot of potential for maintaining a diverse energy mix, advancing clean energy technology and associated industries, and reducing the environmental footprint of the electric power sector—including the sector's greenhouse gas emissions, which account for about one third of the U.S. total.

As Judi will attest, we also think Sen. Bingaman's bill is a great start, and balances the multiple objectives we would have for such a measure.  On Thursday, we get to hear what a few other people think. 

Watch this space Thursday morning as I live blog from the hearing and post updates below.

Update May 17, 11:58 am: It’s a standing-room-only crowd at this morning’s hearing before the Senate Energy and Natural Resources Committee on Senator Jeff Bingaman’s proposal for a federal clean energy standard.

Senators in attendance: Committee chairman Sen. Bingaman (D-NM), top committee Republican Sen. Murkowski (R-AK), Barrasso (R-WY), Cantwell (D-WA), Coons (D-DE), Corker (R-TN), Franken (D-MN), Manchin (D-WV), Risch (R-ID), Shaheen (D-NH), Udall (D-CO), Wyden (D-OR)

Here are some highlights of the question-and-answer session during the hearing’s first panel, with witnesses David Sandalow, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energy, and Dr. Howard Gruenspecht, Acting Administrator of the Energy Information Administration:

Sen. Bingaman pointed out that EIA projects that electricity rates would increase by 2035 under the CES, but then asked how would electricity bills will be affected.  Mr. Sandalow answered that the modeling shows that the average household energy bill would actually decline by $5 a month by 2035, in large part because of the energy efficiency promoted by the bill. Dr. Gruenspecht agreed.

Sen. Murkowski asked whether the cost of renewable energy being used by federal agencies under the Energy Policy Act of 2007 is an indication of the costs that would be seen under Sen. Bingaman’s bill. Mr. Sandalow pointed out that a key difference between Sen. Bingaman’s bill and the 2007 law is that the CES would give credit not only for renewable energy, but for nuclear power, natural gas, and clean coal, which would lead to lower prices than renewable energy alone.

Sen. Barrasso asked whether the Obama administration would rescind greenhouse gas regulations promulgated under the Clean Air Act if Sen. Bingaman’s bill were enacted.  Mr. Sandalow said the administration would not support such an amendment to the Clean Air Act.  For the record, C2ES believes that if a CES, or any other measure, led to significant reductions in GHG emissions from a given economic sector, we should be open to using that measure rather than the existing provisions of the Clean Air Act that pertain to that sector.

Sen. Franken suggested that it might be worth setting aside a fraction of the bill’s requirement for clean energy specifically for renewable energy.  In fact, while most states have renewable energy standards in place, four—Michigan, Ohio, Pennsylvania, and West Virginia—have alternative energy standards, similar to Sen. Bingaman’s clean energy standard proposal, and each of the four takes an approach that favors renewable energy sources over the other qualifying clean energy sources.

Update May 17, 1:55 pm: Here are some quick notes on the second panel of this morning’s hearing. The room is still full even though many of the Senators and journalists have left—thus missing a discussion on preemption that was arguably the most noteworthy exchange of the entire hearing.

After the opening statements, Senators Bingaman and Murkowski had an extended back-and-forth with the panelists about the overlap between the Bingaman bill and other regulatory programs. The panelists offered a range of views, with a couple supporting preemption of the Clean Air Act authority. C2ES’s Judi Greenwald expressed a more nuanced view:

The key issue is environmental results. If a CES is ambitious enough, and can achieve greater environmental benefits than we can get under existing Clean Air Act Authority, it might make sense to consider replacing some Clean Air Act provisions with a CES. However, we need to be very cautious. The Clean Air Act has very broad authority to address GHG emissions throughout the economy and the CES only applies to power plants. We would need to ensure that EPA maintains its authority to continue to make progress in other sectors, for example, as with the successful greenhouse gas standards for vehicles.

Perhaps the biggest obstacle to exploring this issue is the deep partisan divide over EPA and the Clean Air Act. With members of Congress calling for an evisceration of EPA and the Clean Air Act, there is a legitimate concern that opening up the Act for an ostensibly narrow revision would lead to a gutting of provisions having nothing to do with greenhouse gases.

On another topic, Sen. Franken discussed Minnesota’s energy efficiency resource standard, and asked whether incentives for energy efficiency could be incorporated into the Bingaman bill. Judi Greenwald pointed out that many of the bill’s features would indeed promote energy efficiency: crediting of combined heat and power, the use of revenues raised through the alternative compliance payment, and the very structure of the proposed standard—it would be set as a percentage of total electricity production; if electricity use goes down, the requirement is easier to meet. 

One thing we wish we could've said:

During the first panel, Sen. Corker said carbon capture and storage (CCS) will be broadly deployed when donkeys fly. Sen. Manchin, who takes a decidedly more favorable view towards CCS, was nevertheless concerned that the bill does not promote CCS.

Here's what we would have said, had they raised those points during the second panel:

While EIA projects that CCS is not deployed under the bill, it could be. CCS could play a bigger role under this bill if we can bring down its costs. There are a number of options for doing that. For example, C2ES co-convenes the National Enhanced Oil Recovery Initiative, which is calling for a federal tax credit to capture and transport CO2 from power plants and industrial sources for use in enhanced oil recovery. In addition to driving a lot of domestic oil production, and reducing CO2 emissions, it would generate additional revenue to cover the cost of CCS.  We would expect that as CCS costs come down, it would enable coal to have a bigger role. A CES could help in other ways as well. AEP put the Mountaineer project on hold and withdrew from its partnership with DOE on this project because regulators in several states could not justify the expense for a technology that is not required by law. The CES could make the case for projects like Mountaineer to go forward.

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