FERC sets carbon pricing and offshore wind tech conferences

U.S. federal electricity regulators have scheduled technical conferences for this autumn to discuss issues related to two major policy initiatives: carbon pricing in organized wholesale electricity markets, and offshore wind integration in regional transmission organizations and independent system operators (RTOs/ISOs). The Federal Energy Regulatory Commission's scheduling of two technical conferences on these topics signals its interest in exploring the interplay between state energy and environmental policies and federally jurisdictional markets.

One technical conference regarding Carbon Pricing in Organized Wholesale Electricity Markets (Docket No. AD20-14-000) will be held on September 30, 2020, "to discuss considerations related to state adoption of mechanisms to price carbon dioxide emissions, commonly referred to as carbon pricing, in regions with Commission-jurisdictional organized wholesale electricity markets." The case has its genesis in a request for such an event, filed on April 13, 2020, by a broad coalition including Advanced Energy Economy, the American Council on Renewable Energy, the American Wind Energy Association, Brookfield Renewable, Calpine Corporation, Competitive Power Ventures, Inc., the Electric Power Supply Association, the Independent Power Producers of New York, Inc., LS Power Associates, L.P., the Natural Gas Supply Association, NextEra Energy, Inc., PJM Power Providers Group, R Street Institute, and Vistra Energy Corp. A number of other utilities, RTOs, and state interests also expressed support, prior to the Commission's issuance of a public notice on June 17 scheduling the event.

Another technical conference regarding Offshore Wind Integration in RTOs/ISOs (Docket No. AD20-18-000), to be held October 27, 2020, will be convened "to discuss whether existing Commission transmission, interconnection, and merchant transmission facility frameworks in RTOs/ISOs can accommodate anticipated growth in offshore wind generation in an efficient and effective manner that safeguards open access transmission principles and to consider possible changes or improvements to the current framework should they be needed to accommodate such growth."

Beyond the fact that the Commission issued notices of both technical conferences on June 17, 2020, the proceedings also share a common focus on the effects of state energy and environmental policies on federally-jurisdictional activities. For now, the prevailing carbon pricing mechanisms -- such as the Regional Greenhouse Gas Initiative adopted by many northeastern states -- and the strongest policies favoring or requiring offshore wind development are arising as a matter of state law and policy, as opposed to federal law.

The boundaries between federal and state jurisdiction are viewed by many as long-settled, although a series of federal court and agency decisions have found specific state electricity procurement and subsidy laws to be preempted by federal regulation, and a case pending before the Commission asks it to find that most state net metering programs are preempted by federal law. Whether the Commission grants or denies the pending request, the June 17 notices of technical conferences on carbon pricing and offshore wind integration suggest continued federal interest in exploring the implications of state policies on FERC-jurisdictional markets.

Energy issues in Maine's 2019 legislative requests

With the 129th Maine Legislature convened for its first regular session, the Office of the Revisor of Statutes has released a list of the titles of proposed legislation timely submitted by legislators. While the text of most of these legislative requests has not yet been publicly released, the preliminary list of working titles of over 2,000 precloture legislator bills suggests the scope of issues that will come before the Maine State Legislature in 2019. On energy matters, themes emerging from this list include reforms to Maine's renewable portfolio standard; efforts to reduce greenhouse gas emissions; incentives for microgrids, renewable energy and electric vehicles; and changes to energy efficiency standards for most newly constructed buildings.

Based on the working titles and legislative committee assignments, a number of bills will propose changes to Maine's renewable portfolio standard or other laws regarding renewable energy. Among others, these bills could include:

• LR 26, An Act To Update Maine's Renewable Energy Policy (Spkr. Gideon of Freeport)
• LR 82, An Act To Update the State's Renewable Energy Goals (Rep. Berry of Bowdoinham)
• LR 119, Resolve, To Establish a Working Group To Develop a Stand-alone Renewable Energy Certificate Program for the Biomass Industry (Sen. Carpenter of Aroostook)
• LR 403, An Act To Diversify Maine's Energy Portfolio with Renewable Energy (Rep. Hubbell of Bar Harbor)
• LR 845, An Act To Encourage the Use of Renewable Energy (Sen. Lawrence of York)
• LR 872, An Act To Extend to December 31, 2020 the Deadline for Community-based Renewable Energy Projects To Become Operational (Rep. Higgins of Dover-Foxcroft)
• LR 1034, An Act To Establish a Green New Deal for Maine (Rep. Maxmin of Nobleboro)
• LR 1123, An Act To Repeal the 100 Megawatt Limit on Power Generation (Rep. Hanley of Pittston)
• LR 1405, An Act To Clarify the Definition of "Renewable Capacity Resource" (Rep. Babine of Scarborough)
• LR 1431, An Act To Study Transmission Solutions To Enable Renewable Energy Investment in the State (Rep. Berry of Bowdoinham)
• LR 1470, An Act To Modernize Maine's Renewable Portfolio Standard (Sen. Lawrence of York)
• LR 1558, An Act To Increase Maine-based Energy Sources (Pres. Jackson of Aroostook)
• LR 1616, An Act To Reform Maine's Renewable Portfolio Standard (Sen. Vitelli of Sagadahoc)
• LR 1803, An Act To Benefit Maine Consumers, Businesses and Communities through Expanded Renewable Energy (Sen. Dow of Lincoln)

Other bill titles suggest possible proposed changes to other aspects of Maine's renewable policy, such as Maine's version of net metering or rules governing community solar projects:

• LR 15, An Act To Eliminate Gross Metering (Rep. Berry of Bowdoinham)
• LR 299, An Act To Replace Net Energy Billing with a Market-based Mechanism (Rep. O'Connor of Berwick)
• LR 404, An Act To Protect Ratepayers from Gross-metering Costs (Rep. Hubbell of Bar Harbor)
• LR 535, An Act To Eliminate the Cap on Solar Energy Generation Farms (Sen. Miramant of Knox)
• LR 536, An Act To Require Transmission and Distribution Utilities To Purchase Electricity from Renewable Resources at Certain Prices (Sen. Miramant of Knox) 
• LR 1259, An Act To Eliminate Restrictions on Community Solar Projects (Rep. Higgins of Dover-Foxcroft)
• LR 1621, An Act To Expand Community-based Solar Energy in Maine (Sen. Sanborn of Cumberland)

Several more bill titles appear designed to expand opportunities for microgrids or other local private sales of electricity:

• LR 18, An Act To Allow Microgrids That Are in the Public Interest (Rep. Devin of Newcastle)
• LR 213, An Act To Authorize Businesses Located Adjacent to Electric Power Generators To Obtain Power Directly (Rep. Campbell of Orrington)
• LR 1464, An Act To Allow the Direct Sale of Electricity (Sen. Woodsome of York)

Beyond a direct focus on renewable energy, several bill titles address Maine's participation in the Regional Greenhouse Gas Initiative or efforts to reduce fossil fuel use:

• LR 254, An Act To Develop a State Energy Plan To Provide a Pathway to a Fossil-free Energy Portfolio (Rep. Devin of Newcastle)
• LR 1493, An Act To Ensure the Regional Greenhouse Gas Initiative Trust Fund Continues To Promote Energy Efficiency and Benefit Maine Ratepayers (Rep. Wadsworth of Hiram)

At least three bill titles call for increased incentives for electric vehicles:

• LR 862, An Act To Provide Purchase Rebates for Battery Electric Vehicles and Fuel Cell Electric Vehicles (Rep. Ingwersen of Arundel)
• LR 1380, An Act To Encourage Municipalities, State Agencies, Colleges and Universities To Adopt Electric Vehicles (Rep. Ingwersen of Arundel)
• LR 1687, An Act To Create an Electric Vehicle Tax Credit (Sen. Chenette of York) 

At least five bill titles address the Maine Uniform Building and Energy Code:

• LR 561, An Act To Amend the Maine Uniform Building and Energy Code (Rep. Kessler of South Portland)
• LR 537, An Act To Strengthen the Maine Uniform Building and Energy Code (Rep. Caiazzo of Scarborough)
• LR 619, An Act Regarding the Maine Uniform Building and Energy Code (Rep. Ingwersen of Arundel)
• LR 866, An Act To Amend the Laws Governing the Maine Uniform Building and Energy Code (Rep. Rykerson of Kittery)
• LR 1743, An Act Regarding the Application and Administration of the Maine Uniform Building and Energy Code (Rep. Fecteau of Biddeford) 

Experience suggests that most of these legislative requests will result in printed bills, and will be given public hearings before legislative committees before votes by the House and Senate.

RGGI states propose tighter carbon budget

The nine states participating in the Regional Greenhouse Gas Initiative have announced consensus on proposed revisions to that program that would provide a further 30% reduction in the regional limit on emissions by 2030, relative to 2020 levels.  The proposed regional program changes are now available for stakeholder comment, after which each participating state will follow its own specific statutory and regulatory processes to propose updates to their own carbon dioxide budget trading programs.

Nine Northeast and Mid-Atlantic states -- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont -- currently participate in RGGI, the first mandatory market-based regulatory program in the U.S. to reduce greenhouse gas emissions.  RGGI is composed of individual CO2 budget trading programs in each state, based on each state’s independent legal authority.  The program imposes an annual aggregate cap on greenhouse emissions from covered sources like fossil-fueled power plants in participating states.  For 2017, the cap is 84.3 million short tons (62.5 million short tons adjusted for banked allowances); it declines 2.5 percent each year until 2020.  Since 2008, participating states have reduced power sector carbon emissions by nearly 50 percent, while generating more than $2.7 billion in allowance auction proceeds for reinvestment in programs to benefit consumers.

RGGI participating states periodically conduct a "program review".  Following their 2012 Program Review, the RGGI states implemented a new 2014 RGGI cap of 91 million short tons -- 45 % below the prior 2014 cap of 165 million short tons. At that time, the participating states decided to commence the next program review no later than 2016.

RGGI's 2016 Program Review is ongoing.  According to an August 23, 2017 announcement, the participating states have reached consensus on proposed changes to the program design.  Proposed changes include a regional cap of 75,147,784 tons in 2021, which will decline by 2.275 million tons per year thereafter, resulting in a total 30% reduction in the regional cap from 2020 to 2030.  The proposed changes also include modifications to the existing Cost Containment Reserve and implementation of a new Emissions Containment Reserve which would add some flexibility to the cap size.

On behalf of participating states, RGGI, Inc. has announced a meeting on September 25 to gather stakeholder input.  According to the announcement, after reviewing stakeholder comments, conducting additional economic analysis, and updating materials, each participating state is expected to execute its own statutory and regulatory process to update its own carbon budget trading program.

Maine's energy legislation carryovers from 2017

When the First Regular Session of the 128th Maine State Legislature adjourned earlier this year, its committees reserved a list of bills for further debate in 2018.  A list of these carryover bills published by the legislative information office includes 16 bills carried over by the Joint Standing Committee on Energy, Utilities, and Technology.  While new legislation may be proposed in the legislature's second session, the committee's work in 2018 will include action on these carried-over bills.

Here's an excerpt from the list of bills carried over, focused on the Energy, Utilities, and Technology committee:

• LD 131, An Act To Protect the Biomass Industry
• LD 140, An Act To Authorize a General Fund Bond Issue To Support Entrepreneurial Activity, Attract Business and Enhance Demographic In-migration by Investing in High-speed Broadband Infrastructure and To Amend the Law Governing the Municipal Gigabit Broadband Network Access Fund
• LD 257, An Act To Enable Municipalities Working with Utilities To Establish Microgrids
• LD 260, An Act to Create the Maine Energy Office
• LD 532, An Act to Remove the 100-megawatt Limit on Hydroelectric Generators under the Renewable Resources Laws
• LD 822, An Act to Ensure Fairness among Large Consumers of Natural Gas
• LD 1176, An Act To Ensure the Safety of Low-income Persons Who Are Deaf and Who Use Video and Captioned Phones by Providing Equitable Access to the Internet
• LD 1224, An Act To Allow for Greater Energy Competition in Maine by Amending the Law Governing Electric Generation or Generation-related Assets by Affiliates
• LD 1372, An Act To Increase Broadband Access for Rural Communities
• LD 1373, An Act To Protect and Expand Access to Solar Power in Maine
• LD 1444, An Act Regarding Large-scale Community Solar Procurement
• LD 1472, An Act To Lower the Costs of Broadband Service by Coordinating the Installation of Broadband Infrastructure
• LD 1487, An Act To Control Electricity Transmission Costs through the Development of Nontransmission Alternatives
• LD 1515, An Act To Reduce Electric Rates for Maine Businesses by Amending the Laws Governing Spending from the Regional Greenhouse Gas Initiative Trust Fund
• LD 1610, An Act To Protect Privacy of Online Customer Personal Information
• LD 1632, An Act To Establish the Manufacturing Jobs Energy Program

Based on these bill titles, the committee will be faced with continuing discussion over broadband; regulation and incentives for renewable energy resources including solar, hydroelectricity and biomass; economic development and reduction of electricity rates.

RGGI states comment on Clean Power Plan

The nine Northeastern and Mid-Atlantic states participating in the Regional Greenhouse Gas Initiative (RGGI) have submitted joint comments to the United States Environmental Protection Agency in connection with its Clean Power Plan rule.

RGGI is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce carbon dioxide emissions from the electric power sector.  The program establishes a regional cap on the amount of carbon dioxide that power plants can emit through the issuance of a limited number of tradable allowances.  RGGI's first three-year compliance period began on January 1, 2009, making it the nation’s first market-based emissions trading program to reduce greenhouse gas pollution.

On August 3, 2015, the EPA announced its "Clean Power Plan," new regulations limiting power plant carbon emissions under Section 111(d) of the Clean Air Act.  While states are free to build their own compliance plans, the rule establishes emission guidelines for states to follow in developing plans to reduce greenhouse gas emissions from existing fossil fuel-fired electric generating units.  The rule also encourages states and regions to work together in developing compliance plans.

States are now tasked with developing their compliance plans.  The Clean Power Plan gives states until September 6, 2016, to either submit a final carbon-cutting plan or to submit an initial plan along with a two-year extension request.  Many observers have noted that for states already participating in RGGI, that program may be able to serve as a mechanism for Clean Power Plan compliance.  This prospect is natural, as RGGI and the Clean Power Plan share some common goals and features.

This week, the nine RGGI states submitted joint comments to the EPA on the Federal Plan (FP) and Model Rules (MR) proposed as part of the Clean Power Plan.  In those comments, the RGGI states "welcome EPA's continued recognition that well-designed multi-state, market-based programs like RGGI can deliver cost-effective emissions reductions."

In an accompanying press release, the RGGI states note their own "track record of success."  As cited in the joint comments, the "RGGI states have seen benefits to the economy and public health, as well as consumer savings, experiencing 8 percent GDP growth across the region while reducing power sector carbon pollution by more than 40 percent since 2005," while maintaining electric reliability.

Based on this experience, the RGGI states encouraged EPA to select mass-based approaches as the most cost-effective, transparent, and reliable way to achieve emission reductions.  (Mass-based approaches set limits on the total mass of carbon allowed to be emitted -- like 100 million tons.  By contrast, rate-based approaches might limit the rate of carbon emissions per unit of useful electric energy.)

Recognizing that trading platforms can play an important role in markets, increasing participation, access, and liquidity, the RGGI states urged EPA to "adopt a trading platform that is flexible and customizable to encourage broader trading markets."

The RGGI states also asked EPA to encourage auctioning of carbon allowances, and reinvestment of the auction proceeds.  In so doing, the RGGI states pointed to their own reinvestment of RGGI auction proceeds in efficiency and consumer relief.

Finally, the RGGI states encouraged EPA to prevent "leakage" of carbon emissions from existing sources to new sources, by including new sources in a mass-based program or some other equally effective alternative method of allocation.

With states now working to develop Clean Power Plan compliance strategies, how will the RGGI experience shape state plans to comply with the Clean Power Plan?

NERC suggests Clean Power Plan reliability considerations

The electric reliability organization for North America has issued an assessment of reliability considerations it thinks state electricity and environmental regulators should take into account in crafting state plans to comply with the Clean Power Plan.

The North American Electric Reliability Corporation (NERC) is a not‐for‐profit regulatory authority whose mission is to assure the reliability of North America's bulk power system.

Last year, the U.S. Environmental Protection Agency (EPA) issued its Clean Power Plan, a final rule limiting carbon dioxide emissions for existing electric generation facilities.  States are expected to prepare individual or collaborative plans to comply with the regulation.  Because reducing the carbon intensity of electric power generation is the goal, EPA expects that some plans will include a shift from coal-fired power plants to less carbon-intensive sources.  As NERC wrote in its assessment:

The BPS is already undergoing a broad transformation with retirements of coal units and some nuclear units, and additions of resources fueled by natural gas, wind, and solar. Distributed generation, energy efficiency, and demand response are also changing the way in which system planners must account for resources. The CPP has the potential to hasten the transformation of the electric system started by market and political factors such as natural gas supply and pricing and federal and state policy decisions with respect to renewables and energy efficiency and other environmental regulations.

But reliability is a key issue at stake in any shift in the portfolio of generating resources.  The Clean Power Plan rule explicitly requires that states consider reliability as part of their plans.

NERC's assessment, Reliability Considerations for Clean Power Plan Development, presents its view of "aspects of plan design that need to be considered to reliably accommodate this broad transformation."  NERC's ten key reliability considerations are:

• State coordination with system planning entities - planners and coordinators working together
• Essential reliability services - "In order to maintain an adequate level of reliability through this transition, generation resources need to provide sufficient voltage control, frequency support, and ramping capability — essential components to the reliable operation of the BPS. It is necessary for policy makers to recognize the need for these services by ensuring that interconnection requirements, market mechanisms, or other reliability requirements provide sufficient means of adapting the system to accommodate large amounts of variable and/or distributed energy resources (DERs)."
• Timing considerations for energy infrastructure development - "Retirements can happen quickly, but adequate replacement facilities must be in service prior to retirement. As natural gas‐fired generation replaces coal‐fired generation the requisite timeline for natural gas pipeline infrastructure becomes even more relevant."
• Electricity imports and exports - "If a state intends to use resources from nearby states as part of a compliance strategy, it is important to determine if the necessary transmission capability is available to reliably transport electricity from those resources."
• Change in generator cycling and operations - coal plants may serve more seasonal peak demands, so "states should take account of changes in maintenance requirements likely due to cycling and the risk of increased forced outages of these coal‐fired plants. Additionally, increased and sufficient coordination between gas and electric system operators becomes much more critical to ensure adequate amounts of fuel are available."
• Reserve margin assessment - "As more variable and energy ‐ limited resources are added, the system will likely require additional reserve capacity to maintain a similar level of reliability compared to a system with all conventional generation."
• Energy efficiency - "Given that EE can be used as a potential CPP compliance tool, it is important that states evaluate the realistic potential for EE to displace load and the likely duration of those impacts. Shorter term EE measures may serve as a potential bridge to meet CPP requirements."
• Emissions trading - "In general, emissions trading promotes additional reliability compliance options by effectively broadening the compliance region as well as the availability of allowances and credits. However, some resource options that might be assumed available through emissions trading may not be, due to another state’s plan. Because trading is optional, states should coordinate to ensure the most beneficial approach of trading is considered."
• Reliability safety valve - "States must understand how the Reliability Safety Valve works and its limits, recognizing that it cannot be used as a planning tool to meet CPP requirements."
• North American and European precedents - states should review carbon market precedents like RGGI and shifts in Canada and Europe toward renewable and distributed resources as case studies for potential strategies, lessons learned in implementation, and insights as they develop their plans.

Some states are already developing Clean Power Plan compliance plans.  Meanwhile, judicial challenges have been filed.  Initial plans are due to the EPA later this year.

Maine RGGI report 2015: price impact "relatively modest", programs helpful

For 8 years, states in the Northeastern U.S. have participated in the Regional Greenhouse Gas Initiative.  RGGI, the first market-based greenhouse gas regulatory program in the United States, represents a cooperative effort by participating states to cap and reduce greenhouse gas emissions from the electric power sector, coupled with a market for auctioning and trading emission allowances.  While some groups feared that the RGGI program would increase electricity prices, a recent report by the Maine Public Utilities Commission found that the impact of RGGI on electricity prices in Maine has been relatively modest -- while finding that RGGI-funded programs contribute to economic development and reduce greenhouse gas emissions.

RGGI formed in 2007, when ten states -- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont -- agreed to first cap, and then slowly reduce, the greenhouse gas emissions of their electrical energy sectors by 10% by 2018.  While New Jersey withdrew in 2012, the program has remained strong; in 2014, the remaining states subsequently tightened the RGGI cap for 2014 from 165 million short tons of carbon to 91 million short tons, then further declining 2.5% per year from 2015 to 2020.

While each participating state adopted its own laws implementing RGGI, in general the RGGI laws require certain generators of electricity to track their carbon emissions and acquire an “allowance” for every ton of carbon dioxide or its equivalent that they emit.  States conduct periodic auctions of allowances, and market participants are free to engage in secondary market trades.  Generators must purchase or trade for enough emissions allowances to match the number of tons of CO2-equivalent emitted.  The cost of acquiring these allowances gives generators an incentive to improve their efficiency or switch to fuels with a lower carbon intensity.

Each state also adopted its own laws governing the use of funds raised by state auctions of RGGI allowances.  In Maine, most funds go to the Efficiency Maine Trust for purposes including measures, investments and arrangements that reduce electricity consumption or reduce greenhouse gas emissions and lower energy costs at commercial or industrial facilities, and for investment in measures that lower residential heating energy demand and reduce greenhouse gas emissions.

RGGI has conducted 27 quarterly allowance auctions since September 2008, through which Maine has received a cumulative total of $ 62.22 million in RGGI auction proceeds.  Maine’s auction proceeds in 2014 totaled $11.37 million. According to the Maine Public Utilities Commission's report:

the annual cost to Maine ratepayers of the RGGI program was approximately $0.0024 per kWh. For the average Maine residential customer using 530 kWh per month, the 2014 RGGI program cost was approximately $ 1.27 per month. For a commercial customer using 25,000 kWh per month the 2014 RGGI program cost was approximately $60.00 per month. A large commercial or industrial customer using 500,000 kWh per month would have had a 2014 RGGI program cost of approximately $1,200 per month.

On the benefits side of the ledger, the Commission's report cites a finding that "all RGGI proceeds since 2008 are expected to return more than $2 billion in lifetime energy bill savings to more than 3 million households and more than 12,000 businesses across the eight states taking part in RGGI."  The Commission also cited its July 2014 report to the Legislature quantifying the increases in employment, real personal income, and gross state product expected to occur in Maine as a result of the cap tightening and other changes implemented in 2014.  That report found:

economic impacts for the New England region include a cumulative increase in Gross Regional Product of over $2 billion, a cumulative increase in employment of 38,900 job-years, and a cumulative increase in real personal income of $1.5 billion including a cumulative increase in Maine Gross State Product of $200 million, a cumulative increase in employment of more than 5,000 job-years, and a cumulative increase in real personal income of $100 million.

Based on these observations, the Maine Public Utilities Commission's 2015 report on RGGI concludes that "the impact of RGGI on electricity prices has been relatively modest, while RGGI-funded programs contribute to the gross state product, job growth, and personal income, and also reduce greenhouse gas emissions."

EPA carbon rule: how it works

Last week, the U.S. Environmental Protection Agency issued a groundbreaking proposed rule to limit carbon emissions from power plants.  EPA's Clean Power Plan would require each state to develop a plan to limit the amount of carbon dioxide its power plants produce per unit of electricity generated.  By reducing the carbon intensity of electric generation, EPA projects that the Clean Power Plan would would achieve a 30 percent reduction in CO2 emission from the nation's power sector below CO2 emission levels in 2005, resulting in net climate and health benefits of $48 billion to $82 billion.  Importantly, the Clean Power Plan would rely on federal and state cooperation to achieve this goal.

Public Service of New Hampshire's Schiller Station, in Portsmouth, NH, can burn coal, oil, and wood chips.

EPA proposed the carbon rule pursuant to its authority under Section 111(d) of the Clean Air Act.  As with other Section 111(d) regulations, the Clean Power Plan relies on a combination of federal emission limits and state implementation plans.  First, EPA proposed state-specific carbon dioxide emission goals, stated as an emission rate of pounds of CO2 emitted per net megawatt-hour of electricity generated.  Second, EPA offered states guidelines for how to develop, submit, and implement their own plans to reach those emission goals.

At the federal level, EPA set a carbon emissions rate limit for each state based on the agency's evaluation of how much the state could feasibly reduce emissions by adopting the "best system of emission reduction", or BSER.  Effectively, EPA considered each state's portfolio of electricity generating resources as well as how hard it would be to reduce its carbon intensity.

At the state level, EPA expects each state to propose a plan based on a combination of four "building blocks" or types of measures:

• Reducing the carbon intensity of generation at individual affected fossil-fired electric generating units (or EGUs) through heat rate improvements
• Reducing emissions from the most carbon-intensive affected EGUs by substituting generation at those EGUs with generation from natural gas combined cycle power plants and other less carbon-intensive fossil-fired units
• Reducing emissions from affected EGUs by substituting generation at those EGUs with expanded low- or zero-carbon generation
• Reducing emissions from affected EGUs through demand-side energy efficiency measures 

State plans would be subject to EPA approval, based on their enforceability, ability to achieve emission performance, verifiability, and reporting process.  EPA suggested that states may develop collaborative multistate programs.  States may also incorporate existing CO2 emissions reduction programs such as the Regional Greenhouse Gas Initiative or California's carbon market into their plans.  Procedurally, EPA expects that states would submit their plans by June 30, 2016, for review and approval, with the possibility of a one-year extension of this deadline.

EPA is now taking public comment on its proposed Clean Power Plan rule for 120 days, and will hold public hearings on the proposal in July and August.  EPA projects that it would issue its final Clean Power Plan rule in June 2015.

Maine enacts energy bill to promote natural gas, energy efficiency

The Maine Legislature has enacted an omnibus energy bill designed to save consumers over $200 million per year.   For reasons ranging from a reliance on oil for home heating to inadequate natural gas pipeline capacity into New England, Maine’s energy costs are well above the national average. In response, a bipartisan group of legislators pulled together a package of measures to cut energy costs.

The Maine State House, Augusta, Maine.

The resulting bill, LD 1559, "An Act To Reduce Energy Costs, Increase Energy Efficiency, Promote Electric System Reliability and Protect the Environment", brings together elements of over ten other bills that came before the Joint Standing Committee on Energy, Utility, and Technology this year.  Last week, the Legislature enacted the bill by wide margins in both chambers: it received a vote of 131-7 in the House, and 29-6 in the Senate.

Highlights of the bill as enacted include:

Requires the Public Utilities Commission to help cut electricity costs:

• For the first time ever, requires the Public Utilities Commission to work to minimize the cost of energy to Maine’s consumers and to set rates to achieve economic efficiency

Expands heating options:

• Extends utility pilot programs to offer efficient electric heat pumps

Improves energy efficiency:

• Gives the Public Utilities Commission and Efficiency Maine Trust a revised policy directive to reduce energy costs and improve security of the state and local economies by pursuing all cost-effective energy efficiency for homes and businesses, including conservation in both electricity and heating fuel consumption
• Directs Regional Greenhouse Gas Initiative proceeds to lower commercial and industrial energy costs, reduce residential heating energy demand in a fuel-neutral way, and provide rate relief
• Caps electric efficiency spending at no more than 4% of total retail electricity and transmission and distribution sales in Maine
• Gives the Public Utilities Commission improved tools for overseeing efficiency programs
• Uses Maine Yankee litigation settlement funds for energy efficiency investment and rate relief
• Approves the Trust’s contract with Maine utilities for energy efficiency

Lowers electricity and natural gas costs:

• Authorizes the Public Utilities Commission to execute or direct utilities to execute energy cost-reduction contracts if necessary and appropriate to reduce the “basis differential” cost of natural gas in New England and thus to reduce the cost of electricity in Maine
• Protects ratepayers from cost increases resulting from the energy cost-reduction contracts
• Creates the Energy Cost Reduction Trust Fund to hold energy cost-reduction contract revenues, to be held in trust for the purposes of reducing the energy costs of Maine consumers

Improves controls over the cost of electricity transmission:

• Establishes a least cost electric transmission policy that gives the Public Utilities Commission improved tools to evaluate whether non-transmission alternatives can   address identified needs at lower cost

Improves the Regional Greenhouse Gas Initiative:

• Aligns Maine’s carbon emissions budget with other RGGI states’ budgets
• Adopts the new RGGI reforestation offset to benefit both large and small Maine forest owners.
• Directs the Department of Environmental Protection and Public Utilities Commission to develop incentives for consumers to reduce greenhouse gas emissions by switching from oil and coal to alternative fuels such as natural gas, biomass, or other renewables

Brings competition into municipal streetlighting:

• Requires transmission and distribution utilities to give municipalities options to participate in the ownership and management of their own streetlighting systems

Expands ocean energy options:

• Gives consideration to the University of Maine’s deepwater floating offshore wind pilot project and potential ocean energy projects, in addition to Statoil’s proposal

With the bill enacted as an emergency measure, absent a procedural roadblock it will become law later this month.

Linking North American carbon markets

As nations, states, and provinces establish carbon markets, there is considerable interest in establishing links between these markets.  Two of North America's leading carbon markets - one overseen by the California Air Resources Board (CARB), the other by the Canadian province of Quebec - appear to be on track to link their cap-and-trade systems by January 1, 2014.

A 2006 California law known as AB 32, the Global Warming Solutions Act, established a greenhouse gas cap-and-trade program.  The program covers major sources of greenhouse gas emissions in the California, including refineries, power plants, industrial facilities, and transportation fuels.  CARB established regulations which set an enforceable greenhouse gas emissions cap.  This cap will decline over time.  The law requires covered entities to acquire allowances issued by CARB to cover their carbon emissions.  These allowances are tradeable permits allowing the holder to emit a given amount of carbon dioxide or its equivalent.

Quebec joined the Western Climate Initiative (WCI) in April 2008, a group of American states and Canadian provinces that have decided to adopt a common approach toward addressing climate change.  WCI's goals include the creation of a North American market for trading carbon emission rights.  Each WCI member government first creates its own greenhouse gas emissions cap-and-trade system, then links to others through intergovernmental recognition agreements.

California and Quebec's programs are now in the process of linking up.  According to a recently-issued CARB document, California and Quebec have been working together to ensure that both systems' operations are compatible and will work together and without disruption to California-covered entities.

According to the notice, linkage between California and Quebec will need to be effective as of January 1, 2014.  In the interim, California and Quebec will hold a practice joint auction to test their auction platform, allow market participants to gain familiarity with the future procedures for a linked market, and to allow the jurisdictions to evaluate their readiness for the newly expanded market. 

This linkage would not directly affect other North American carbon markets, such as the Regional Greenhouse Gas Initiative or RGGI market.  RGGI represents an agreement by nine northeastern states to create a pooled carbon market.  Other jurisdictions could join the RGGI market, and it is possible that the RGGI market could one day merge with the CARB and Quebec markets to form a broader North American carbon market.  The linkage of the California and Quebec programs may serve as a test of the effectiveness of linking the various North American carbon markets.

Senate climate bill proposes carbon fee

Senators Barbara Boxer of California and Bernie Sanders of Vermont have introduced climate legislation that would impose a fee of $20 per ton of carbon or methane equivalent emitted.  The Climate Protection Act of 2013 provides measures designed to "address climate disruptions, reduce carbon pollution, enhance the use of clean energy, and promote resilience in the infrastructure of the United States".  What does the Senate climate bill do -- and what are its chances of passage?

The centerpiece of the Climate Protection Act of 2013 is a fee imposed by the Administrator of the U.S. Environmental Protection Agency on carbon emissions.  Starting in 2014, the carbon pollution fee would be $20 per ton of carbon dioxide or equivalent.  For the next 10 years, the fee would increase by 5.6 percent per year, after which it would hold steady at about $34 per ton.

The fee would apply to any manufacturer, producer, or importer of a carbon polluting substance, defined as coal (including lignite and peat), petroleum and any petroleum product, or natural gas that releases greenhouse gas emissions when combusted or used.  The fee would apply whether the carbon polluting substance is produced in the U.S. or is imported.  As designed, it would be an "upstream" fee, meaning only the first producer or importer of the substance would have to pay the fee directly; subsequent users would not be liable for the fee, although they would likely pay a higher price to acquire the fuel as the the upstream entity passes its costs along.

60% of the funds raised from the carbon pollution fee would be used to provide a monthly residential environmental rebate to legal residents of the United States.  The remainder would be used to create a Pollution Reduction Trust Fund. The Trust Fund would be divided up for five purposes.  $7.5 billion per year would go to the EPA to mitigate the economic impacts of the carbon pollution fee on energy-intensive and trade-exposed industries.  $5 billion shall be available to the Department of Energy to carry out a Weatherization Assistance Program for Low-Income Persons.  $1 billion would go to the Secretary of Labor for job training, education, and transition assistance for individuals employed by the fossil fuel industry.  $2 billion will go to the Advanced Research Projects Agency-Energy program.  The balance shall be used shall be used for federal budget deficit reduction, as would the entire Trust Fund after 2024.

To protect domestic industry against competitive harms caused by the carbon pollution fee, the Climate Protection Act of 2013 also includes a carbon equivalency fee on imports of carbon pollution-intensive goods.  Those goods would include iron, steel, a steel mill product (including pipe and tube), aluminum, cement, glass (including flat, container, and specialty glass and fiberglass), pulp, paper, a chemical, or an industrial ceramic, as well as any other goods whose production is deemed to have similar carbon intensity.

Funds raised the carbon equivalency fee would be split between the EPA and the Department of Transportation.  The EPA would use its share primarily to fund state and local programs that assist communities in adapting to climate change, improving the resiliency of critical infrastructure; and protecting environmental quality and wildlife.  EPA could also use the funds to meet international commitments made by the United States to assist with climate change adaptation.  The Department of Transportation's share would be used to fund state and local programs that assist communities in improving the resiliency of critical infrastructure and for projects that provide preferential parking for carpools, including the addition of electric vehicle charging stations.

Will the Climate Protection Act of 2013 pass?  Congress has previously considered several structures to encourage a shift to lower-carbon energy resources, ranging from creating a national cap-and-trade market to a carbon tax.  To date, none has passed, although individual states and regions have created cap-and-trade programs like the Regional Greenhouse Gas Initiative (RGGI) and the California Air Resources Board market.  President Obama called on Congress to address climate change and carbon emissions in his 2013 State of the Union address, and other jurisdictions such as the Canadian province of British Columbia have enacted a carbon tax.  Could the carbon fee and dividend structure proposed in the Climate Protection Act of 2013 be the solution?  At the least, it will provoke a national dialogue about carbon emissions and the federal government's role in managing them.

3 years of RGGI carbon market results

A report released this week by the Regional Greenhouse Gas Initiative (RGGI) shows that carbon dioxide emissions from power plants in RGGI member states fell by 23% over the program's first three years.

RGGI, the first major market-based greenhouse gas regulatory program in the United States, represents a cap-and-trade approach to reducing the emission of carbon dioxide and other greenhouse gases.  Ten states - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont - originally agreed to cap and reduce the greenhouse gas emissions of their electrical energy sectors by 10% by 2018.  (New Jersey subsequently withdrew from the compact effective January 1, 2012.)  RGGI's first three-year compliance period ran from January 1, 2009 through December 31, 2011.

This week's report documents the performance of the RGGI member states in reducing greenhouse gas emissions from the electricity sector.  According to the report, 97% of covered power plants - 206 out of 211 covered units - met program compliance obligations.  (Raw data on each plant's performance is available through the RGGI CO2 Allowance Tracking System, also known as COATS.)  Over the three-year period, annual CO2 emissions for the three-year period averaged 126 million short tons.  This represents a 23% reduction compared to 2006-2008. 

Part of the reduction may be attributed to increased state investment in energy efficiency as well as the economic slowdown.  However, CO2 emissions in the region decreased nearly ten times more than electricity consumption did: according to the U.S. Energy Information Administration, three-year average electricity consumption across the ten-state region experienced only a 2.4% decrease over the same time. This points to another significant trend in northeastern electricity markets: a shift away from coal to natural gas as the combustion fuel of choice for thermal power plants.

Will NJ stay in RGGI?

The New Jersey Senate has passed a bill which would require the state to remain a member of the Regional Greenhouse Gas Initiative, the carbon cap-and-trade compact covering the Northeast and mid-Atlantic states. The bill, S. 1322, is described as clarifying the legislature's intent regarding NJ’s required participation in RGGI.

RGGI is the first major market-based greenhouse gas regulatory program in the United States.  RGGI represents a cooperative effort by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.  These ten states agreed to cap and reduce their electrical energy sector's greenhouse gas emissions by 10% by 2018.  Each state was free to develop its own implementation of the compact, including both how carbon allowances would be allocated and how proceeds from their sale would be used.  For example, Maine chose to invest its share of RGGI auction proceeds in energy efficiency, managed by the Efficiency Maine Trust.  A February 2012 report found that, for every dollar of RGGI auction revenues that was invested in energy efficiency in 2010, participating states received $1.3 to $6.8 in total energy benefits, with a weighted average of $2.3 in return on investment.

Last year, NJ Governor Chris Christie vowed to remove New Jersey from RGGI, arguing that RGGI participation represents a tax without producing any measurable impact on the environment.  Democrats in the state legislature introduced legislation (A4108/S2946) to require NJ to remain in RGGI, but in August 2011 Gov. Christie vetoed that bill.

S. 1322 now faces debate before the New Jersey Assembly.  If it passes out of the Assembly, it will then face an anticipated veto from the governor.  Will New Jersey remain in RGGI?

Vermont wind project contested

A wind energy project in northern Vermont is the focus of significant controversy.  Utility Green Mountain Power is currently developing the Kingdom Community Wind project on Lowell Mountain near the town of Lowell in Vermont's Northeast Kingdom.  The 63 MW project is the first large-scale generation facility proposed by one of Vermont's investor-owned regulated utilities since the Searsburg wind project was approved in 1996. 

In May 2010, Green Mountain Power Corporation, Vermont Electric Cooperative, Inc and Vermont Electric Power Company, Inc. filed a petition with the Vermont Public Service Board seeking approval to build up to a 63MW wind generation facility, and to install or upgrade about 17 miles of transmission line and associated substations.

A year later, the Vermont Public Service Board issued its final order and certificate of public good approving the project (182 page PDF).  In the order, the Board found that "the proposed project will promote the general good of the state".  Among the factors supporting the Board's decision was the fact that the project would produce energy without greenhouse gas emissions, and would thus support the goals of the Regional Greenhouse Gas Initiative (RGGI).  The Board also noted that the project would help the state meet its goals of promoting new renewable generation as required in Vermont's SPEED, or Sustainably Priced Energy Enterprise Development Program.  SPEED requires that, by 2012, at least 10% of the state's electric load be served by new sources of renewable energy.  The Board also noted economic development benefits from the project, including job creation and tax revenues as well as the benefits of providing the developing utilities a long-term source of stably priced power.

The project drew opposition from a variety of sources, including those who oppose mountaintop wind development generically as well as those opposing development of this particular site.  Now, while Green Mountain Power is preparing the site for construction, a group of protesters has set up a camp near the ridgeline.  Abutting landowners have also asked a court to delay blasting and other work, claiming that they own part of the land where the blasting will occur.

What will happen to the Lowell Mountain project?  Green Mountain Power planned to complete the project by December 3, 2011.  As the Burlington Free Press has noted, the company has argued that delay is costly, and that too much delay would be fatal: Green Mountain Power must have project up and running by December 31, 2012 to qualify for $48 million in federal tax credit that are part of the project's overall financing plan.

June 13, 2011 - RGGI carbon auction results

The latest carbon auction results from the RGGI program show a market in uncertainty.

The "Old Woolen Mill" on the Great Works River in North Berwick, Maine.

The Regional Greenhouse Gas Initiative (RGGI) is the first market-based greenhouse gas regulatory program in the United States.  RGGI represents a cooperative effort by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.  These ten states agreed to cap and reduce their electrical energy sector's greenhouse gas emissions by 10% by 2018.

While each state's legislature implemented its own version of the compact, the overall structure is that carbon allowances are auctioned off to the power sector.  Proceeds from these auctions are invested in energy efficiency, renewable energy, and other clean energy technologies.  The program has been a success in creating jobs, reducing greenhouse gas emissions from the power sector, and funding high-yield energy efficiency projects at businesses.

RGGI just held its twelfth auction.  (You can read the market monitor's report, a 10-page PDF, here.)  Altogether, the auction raised $25.5 million.  Each participating state's energy programs get a share in those proceeds based on how the underlying carbon allowances were allocated; for Maine, the twelfth auction yielded just under $770,000.  Since 2007, Maine has received $26 million through the program, which has been invested in energy efficiency through the Efficiency Maine Trust.

Interestingly, only 30 percent of the current-period carbon allowances available in the auction actually changed hands.  This low demand for allowances is striking, particularly since the price was as low as it could be: the auction floor price of $1.89 per short ton of CO2.  This apparent oversupply has emerged as the RGGI market matured; in the initial auction, the bid demand was four times larger than the supply.  While supply first outpaced demand for the tenth auction, held in December 2010, the 30% figure represents a new low for auction demand.

RGGI's thirteenth auction is scheduled for September 7, 2011.

May 26, 2011 - NJ to withdraw from greenhouse gas compact

New Jersey Governor Chris Christie has announced that he will pull New Jersey out of the nation's leading regional greenhouse gas cap-and-trade program.

The Maine State House, seen on a recent day of legislative debate over energy policy.

Since 2007, New Jersey has participated in the Regional Greenhouse Gas Initiative.  RGGI is the first market-based greenhouse gas regulatory program in the United States.  RGGI represents a cooperative effort by Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.  These ten states agreed to cap and reduce their electrical energy sector's greenhouse gas emissions by 10% by 2018.

While each state's legislature implemented its own version of the compact, the overall structure is that carbon allowances are auctioned off to the power sector.  Proceeds from these auctions are invested in energy efficiency, renewable energy, and other clean energy technologies.  The program has been a success in creating jobs, reducing greenhouse gas emissions from the power sector, and funding high-yield energy efficiency projects at businesses.

If New Jersey withdraws from RGGI, it will be the first state to end its participation in the program.  Other states are considering whether to stay in the compact.  For example, New Hampshire recently considered the question, and the Maine Legislature's energy committee recently voted to support a bill to withdraw from RGGI if enough other states withdraw first.  Under LD 793 as amended, Maine would withdraw from RGGI if the total carbon dioxide emissions budget for remaining states is less than 35,000,000 tons.  While New Jersey's departure alone would not shrink the program below Maine's proposed threshold, it would represent the first concrete erosion of RGGI's base.

July 28, 2010 - Alta Wind Energy Center breaks ground; PACE financing

Today's picture: Central Maine Power transmission lines off Route 201 in Topsham, Maine.

In California, the Alta Wind Energy Center — with plans for thousands of acres of turbines to generate electricity for 600,000 Southern California homes — officially broke ground yesterday.  Here's the official project website, which is running a bit slowly today (likely due to all the interest in the project).  Terra-Gen Power, LLC does have a slick website that is worth checking out.  Some highlights include:

• The Alta Wind Energy Center (AWEC), under developed by Terra-Gen Power, is composed of multiple projects.  The first AWEC development is the Alta-Oak Creek Mojave Project.
• The Alta-Oak Creek Mojave Project will be composed of up to 320 wind turbine generators and supporting infrastructure.
• The Project will be developed primarily on privately-owned land adjacent to existing wind energy developments in the Tehachapi area of California.
• The Project is projected to add 50 full-time jobs to the Kern County economy.

 Interest in smart grid deployment is growing.  Federal policy supports smart grid development, and many states are following suit with more specific provisions.  For example, this spring, the Maine Legislature enacted LD 1535 (now P.L. 2009 Ch. 539).  This bill, sponsored by Representative Jon Hinck of Portland, gives Maine a specific smart-grid policy for the first time.  Both CMP and Bangor Hydro, Maine's largest investor-owned utilities are already rolling out smart meters; the legislative policy declaration builds upon this head start.

In enacting the smart grid bill, the Maine Legislature found that:

• The cost of electricity to consumers in this State is high in comparison to costs in similar markets and impedes economic development;
• The State has recognized the consequences of climate change and has committed to policies to reduce emissions of greenhouse gases;
• The State's electric grid and long-term infrastructure investment are vital to continued security and economic development, and smart grid functions will deliver electricity from suppliers to consumers using modern technology to increase reliability and reduce costs in a way that saves energy and to enable greater consumer choice;
• The State currently lacks a comprehensive smart grid policy but faces critical decisions regarding the implementation of smart grid functions and associated infrastructure, technology and applications, and the commission and the Legislature will play central roles in making those decisions; and
• It is vital that a smart grid policy be developed in order to ensure that all ratepayers and the State as a whole are afforded the benefits of smart grid functions and associated infrastructure, technology and applications.

Based on these findings, the Legislature enacted a policy of promoting the development, implementation, availability and use of smart grid functions and associated infrastructure, technology and applications in the State.

With this policy in place, the ball is now in the court of smart grid infrastructure developers.  We now have a law that will support roll-out of smart grid projects in Maine.  Who will be the first to propose one?

A bit of personal news, related to energy: an article I co-authored with a colleague and a client has been published in Paper360 Magazine. Click through to read about how a pulp and paper mill navigates the waters of compliance with the Regional Greenhouse Gas Initiative (RGGI) and other climate change regulation.



How about PACE financing? PACE-promoting provisions got stripped out of the current Senate energy bill. These tweaks are viewed as necessary to let PACE programs flourish, as government-backed lenders Fannie Mae and Freddie Mac have suggested that they won't play with PACE.

Maine energy efficiency grants

Right now, there are a number of energy efficiency grants that are up for grabs in Maine. In particular, three Requests for Proposals (RFPs) I'm following are:

RFP#201004675: Commercial Project Grants

• $1.4 million in total program funding this round
• Grants matching up to $50,000 of eligible investment
• eligible activities include energy efficiency improvements, boilers and steam systems including biomass fired, combined heat and power, waste heat recovery, geothermal, and renewables
• RFP issued May 6, 2010
• Proposals due 2:00 p.m., June 21, 2010

RFP#201004668: Large Greenhouse Gas Reduction Projects

• $3 million in total program funding this round
  
• Grants from $100,000 to expected maximum of $750,000
• bang for the buck in reducing greenhouse gas emissions, on the basis of short tons of CO2 equivalent avoided per year per award dollar requested
  
• RFP issued April 30, 2010
• Proposals due 2:00 p.m., June 25, 2010

RFP#201004668: Large Electrical Efficiency and Conservation Projects

• $3 million in total program funding this round
  
• Grants from $300,000 to expected maximum of $750,000
• bang for the buck in reducing kWh per year per award dollar requested
• Applicants must show that the project results in a decrease in net source Btu.
  
• RFP issued April 30, 2010
  
• Proposals due 2:00 p.m., June 25, 2010

I'm working with a number of applicants to pursue these Maine energy grants.

1/11/10

Looks like despite a lack of governmental support, businesses in China are solar thermal technology -- using mirrors to concentrate light, make steam, and turn turbines to generate electricity. As usual, the story emphasizes not only the value of siting generation in China, but also the value of producing solar thermal components for sales abroad -- the classic energy/manufacturing complex that is touted for deepwater offshore wind in Maine. Commercially, up to 2,000 MW of capacity may be developed by a partnership between Californian developer eSolar and Chinese manufacturer Penglai Electric. However, the Chinese government is officially skeptical about the merits of solar thermal, on the theory that China lacks sites where there is abundant water, sun, and cheap land.

Climate change? Global warming? A number of places around the world continue to face record low temperatures, which have remained in place for weeks. NYT reports that this is the largest and most persistent Arctic high pressure system to take hold since the 1950. This Arctic high deflects the jet stream south of our latitude, bathing us in cold Canadian air.

In Maine news, we have the $9 million in RGGI grants for industrial energy efficiency projects announced last week, a $12.4 million grant for the UMaine composites lab for deepwater offshore wind research, and rebates of $1500 to $3000 to homeowners for qualifying energy audits and weatherization projects.

1/7/10

Happy New Year! It's been a busy week of 2010 so far... so who else is still writing 2009 half the time?

Efficiency Maine and the soon-to-be-former Energy and Carbon Savings Trust -- the two agencies charged with distributing the proceeds of Maine's Regional Greenhouse Gas Initiative -- have made their selections of 16 grant winners for energy efficiency and greenhouse gas reduction projects. In all, $8.9 million in funds will be awarded, leveraging over $80 million in private funds to create a total project value of $90.8 million. My firm and I were privileged to assist a number of successful applicants for these grants.

In local Maine news, Bath Iron Works has been awarded another $6.9 million contract from the Navy for engineering work on destroyers. This work will last through November. Simultaneously, BIW has sought City Council approval of an expansion to its two year-old Ultra Hall indoor fabrication facility.

In a case of the federal government stepping in on states' rights where states refuse to act, the US EPA has announced a proposal to place new strict limits on smog (NYT article). EPA suggests a range of 60 to 70 parts per billion for ground-level ozone; EPA will select a specific figure within that range later this year. This represents a reduction from previous limits (84 ppb from 1997-2008, and 75 ppb since 2008). EPA estimates this stricter limit will increase the costs of doing business from between $19 billion to $90 billion a year by 2020.