2019 in review

Here's a roundup of some of the items published on this blog in 2019 that have drawn significant interest:

• The enactment of a portfolio of Maine energy legislation that significant reformed the state's electricity renewable portfolio standard, long-term contracting programs, net energy billing program, and climate policy.
• Increasing public recognition that most of Maine's greenhouse gas emissions arise from the direct combustion of fossil fuels in the transportation and heating sectors, and the need to reduce transportation- and heating-related efforts through "beneficial electrification" or other means.
• Action by the United States to withdraw from the United Nations' Paris Climate Agreement.
• A federal proposal to "reform PURPA" or amend regulations adopted in implementation of a federal law designed to encourage cogeneration and renewable power production.
• Offshore wind procurement processes in Massachusetts and elsewhere.
• Growth in deployment of electric energy storage, following federal regulators' adoption of rules and state legislatures' enactment of incentive programs.
• Federal regulation and enforcement of market manipulation and mandatory reliability standards for the bulk electric system.
• A federal appellate court ruling, Hoopa Valley Tribe v. Federal Energy Regulatory Commission, reshaping a common practice in hydropower licensing by holding that the states and applicants for water quality certifications cannot indefinitely stall federal time limits for state action by repeatedly withdrawing and resubmitting their applications.

Will these trends continue in 2020?

Maine Climate Council legislation enacted

Newly enacted Maine legislation establishes the Maine Climate Council to advise the Governor and state Legislature on ways to mitigate the causes of, prepare for and adapt to the consequences of climate change, and calls for significant reductions in the state's overall greenhouse gas emissions.

On June 26, 2019, Maine Governor Janet Mills signed into law An Act to Promote Clean Energy Jobs and To Establish the Maine Climate Council. One set of provisions in the new law establishes a requirement that Maine reduce gross annual greenhouse gas emissions -- to at least 45% below the 1990 gross annual greenhouse gas emissions level by 2030, at least 80% below the 1990 gross annual greenhouse gas emissions level by 2050, and on track to meet the 2050 target by 2040. The law requires the Department of Environmental Protection to adopt rules to ensure compliance with these levels, and authorizes the Department of Transportation to adopt similar rules.

Crucially, the rules must prioritize greenhouse gas emissions reductions by sectors that are the most significant sources of greenhouse gas emissions, as identified by the United States Energy Information Administration and in the department's biennial reports, taking into account gross greenhouse gas emissions reductions achieved by each sector since 1990 and the cost-effectiveness of future gross greenhouse gas emissions reductions by each sector. While the electricity sector has largely been decarbonized, transportation and heating lag significantly. Maine's transportation sector was responsible for 53 percent of the state's greenhouse gas emissions in 2017, with heating taking the next greatest share. Meanwhile, electricity generation in Maine accounted for just 9 percent of the state's greenhouse gas emissions.

The law also creates a 39-member Maine Climate Council, with a subcommittee for scientific and technical matters and various working groups. The Council must meet at least every three months, report annually to a legislative committee, and prepare an updated climate action plan by December 1, 2020 and every four years thereafter. The climate action plan must include a clean energy economy transition plan.

 

Vermont PUC report on electric vehicles

Vermont utility regulators have recommended steps Vermont could take to accelerate the use of electric vehicles (EVs) in the state, including creating state incentives for EV purchases as well as encouraging electric utilities to adopt new rate structures.

Like most other states, Vermont's transportation sector contributes more greenhouse gas emissions than any other sector of the state's economy. Due in large part to emissions from cars and trucks powered by fossil fuels, the transportation sector is responsible for about 47% of Vermont's total greenhouse gas emissions; by contrast, Vermont's electricity generating sector is relatively small but nearly entirely renewable, and has the lowest carbon dioxide emissions of any state according to federal data. Other New England states are similar -- for example, Maine's transportation sector contributed 53% of the state's total greenhouse gas emissions in 2017, while electric power generation in Maine accounted for just 9 percent of the state’s total carbon emissions.

Indeed, the New England electricity grid has experienced significant decarbonized in recent decades, and renewable energy can now be consumed in the transportation sector through the use of EVs. In 2016, Vermont adopted a Comprehensive Energy Plan aiming to power 10% of transportation with renewable energy by 2025, and 80% by 2050, while reducing the sector's emissions by 30% by 2025. Vermont estimates that reaching these goals would require adding about 50,000 to 60,000 EVs to replace vehicles with internal combustion engines by 2025, for a compound annual growth rate of about 54%.

On June 27, 2019, the Vermont Public Utilities Commission released its report to various state legislative committees, "Promoting the Ownership and Use of Electric Vehicles in the State of Vermont." The report recommends that Vermont create incentives for EV purchases or leases, whether in the form of time-of-sale rebates or tax credits. It also recommends that Vermont buy EVs for the state vehicle fleet, and encourage the development of EV charging infrastructure through zoning or building code modifications.

The report also suggests that the Commission encourage electric utilities to take additional actions to promote EV adoption, such as funding EV purchase incentives through Vermont's Renewable Energy Standard program, or developing time-of-use retail rates to encourage car charging at off-peak times. It also noted that utility rate structures which impose demand charges on most commercial accounts but not on residential accounts make public direct-current fast-charging more expensive than at-home charging.

The report also notes that increased education and outreach efforts -- by utilities as well as by car dealers and other third parties -- could encourage consumer adoption of EVs.

Maine Climate Change Council legislation unveiled

Maine Governor Janet Mills has introduced proposed legislation to create a Maine Climate Change Council. While the bill had not been formally printed by the legislature's Office of the Revisor of Statutes as of May 1, the Governor's office posted a copy of the bill captioned, LR2478, An Act to Create the Maine Climate Council to Assist Maine to Mitigate, Prepare for and Adapt to Climate Change.

The draft bill includes a variety of provisions designed to advance clean energy goals:

• It includes language requiring the inclusion of more renewable resources in the state's electricity supply -- 80 percent by 2030, and 100 percent by 2050. (Current law requires 40 percent of electricity sold at retail to come from renewable resources. According to the U.S. Energy Information Administration, in 2017, about three-quarters of Maine's net electricity generation came from renewable energy resources, with 30% from hydroelectricity, 26% from wood and other biomass, and 20% from wind.)
• It repeals the existing law setting Maine's goals for reduction of greenhouse gases (which currently calls for a reduction to 1990 levels by 2010, to 10 percent below 1990 levels by 2020, and in the long term "reduction sufficient to eliminate any dangerous threat to the climate. According to the most recent report of the Maine Department of Environmental Protection, in 2015 Maine's greenhouse gas emissions were 11.7 percent below 1990 levels.) It replaces this section with a new section, requiring reduction to 45 percent below 1990 levels by 2030, and 80 percent below 1990 levels by 2050. The bill requires the Department of Environmental Protection to adopt rules to ensure compliance with these new levels.
• It creates the Maine Climate Change Council to advise the Governor and Legislature on ways to mitigate the causes of, prepare for and adapt to the consequences of climate change. The council would be composed of up to about 40 people filling specific roles prescribed in the legislation such as business, youth, and science. The structure would include a scientific and technical subcommittee, plus working groups on transportation, coastal and marine issues, buildings, infrastructure and housing, working lands and ecosystems, and energy topics.
• It requires the Maine Climate Change Council to update the state climate action plan by December 2020, with further updates to the plan every 4 years thereafter. (The Maine Department of Environmental Protection released the current version of the climate action plan in 2004.) The bill also requires the council to report on progress toward implementing the climate action plan by December 2022, and every 2 years thereafter.

In a statement, Governor Mills said that the bill represents a step in combating the threat of climate change by "expanding our clean energy economy, and investing in our future by creating the Maine Climate Council and marshaling experts across the state to take urgent action." The bill's lead sponsor, Senator David Woodsome, is a Republican co-chair of the legislature's energy committee. Procedurally, next steps include the formal printing of the bill by the Revisor, followed by its reference to legislative committee for a public hearing to be scheduled in the coming weeks.

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.

US EPA proposes Affordable Clean Energy rule

The U.S. Environmental Protection Agency has proposed a new rule addressing greenhouse gas emissions from existing coal-fired electric utility generating units and power plants. EPA's proposed "Affordable Clean Energy Rule" is designed to replace the Clean Power Plan regulations adopted in 2015.

On August 21, 2018, EPA announced the Affordable Clean Energy or ACE Rule. As described by the agency, the rule encompasses four main actions to reduce greenhouse gas emissions:

• Defining the “best system of emission reduction” (BSER) for existing power plants as on-site, heat-rate efficiency improvements;
• Providing states a list of “candidate technologies” that can be used to establish standards of performance and be incorporated into their state plans;
• Updating the New Source Review (NSR) permitting program to further encourage efficiency improvements at existing power plants; and
• Aligning regulations under Clean Air Act section 111(d) to give states adequate time and flexibility to develop their state plans. 

According to EPA's regulatory impact analysis, replacing the Clean Power Plan with the ACE Rule would reduce CO2 emissions from their current level, and "could provide $400 million in annual net benefits," largely in the form of reduced compliance burden on covered power plants. While EPA adopted the Clean Power Plan in 2015, in 2016 the Supreme Court granted opponents stay of the regulations, and they never took full effect.

EPA will take comment on the ACE Rule proposal for 60 days after publication in the Federal Register and will hold a public hearing.

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.

Trump executive order on domestic energy policy

U.S. President Donald Trump has signed an executive order affecting domestic energy policy.  His March 28, 2017 Presidential Executive Order on Promoting Energy Independence and Economic Growth includes a variety of directives, generally aimed at reducing federal regulations affecting domestic energy production.  Here's a look at his Executive Order targeting Obama-administration climate regulations and other agency actions that potentially burden the development or use of domestically produced energy resources.

The Executive Order includes 8 operative sections.  One provides policy statements; six call for regulatory reviews that could lead to rule changes or revocations, or directly revoke and rescind Obama-era actions.  The final section includes general provisions.

Section 1 includes five policy statements, such as that "is in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation."  It also sets a federal policy "that executive departments and agencies (agencies) immediately review existing regulations that potentially burden the development or use of domestically produced energy resources and appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources beyond the degree necessary to protect the public interest or otherwise comply with the law."

Section 2 calls for an immediate review of all agency actions that potentially burden the safe, efficient development of domestic energy resources, "with particular attention to oil, natural gas, coal, and nuclear energy resources."  It directs agency heads to submit a memorandum to the Office of Management and Budget detailing such potentially burdensome actions, and including "specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency actions that burden domestic energy production."  With respect to actions targeted with specific recommendations in a final report, agency heads are directed to "as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law."

Section 3 rescinds or revokes a variety of Presidential actions and reports, including several of President Obama's executive orders regarding climate change, the President's 2013 Climate Action Plan, and the Council on Environmental Quality's 2016 final guidance for federal agencies on consideration of greenhouse gas and climate issues in performing reviews of agency actions under the National Environmental Policy Act.

Section 4 calls for the Administrator of the Environmental Protection Agency to "immediately take all steps necessary to review" the Clean Power Plan governing electricity-sector emissions and related rules "for consistency with the policy set forth in section 1 of this order and, if appropriate, shall, as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules suspending, revising, or rescinding those rules."

Section 5 disbands a working group on the social cost of greenhouse gas emissions, and restricts the ways agencies may account for the monetary value of changes in greenhouse gas emissions resulting from regulations.

Section 6 calls for the Secretary of Interior to lift moratoria on federal land coal leasing activities imposed under a 2015 order, and to commence federal coal leasing activities.

Section 7 calls for review of federal regulations affecting emissions from the oil and gas sector, including 2016 emissions standards for new, reconstructed and modified sources, and a 2015 rule governing hydraulic fracturing on federal and Indian lands, among others.

Section 8 includes general provisions, generally similar to those found in other executive orders.

Adding micro-hydro to licensed hydropower project

What happens when a FERC hydropower licensee applies for a preliminary permit to study the feasibility of developing a micro-hydro project, where the new project will be sited at an existing project's dam?  In a recent case involving the city of Aspen, Colorado, Commission staff dismissed the preliminary permit application, instead suggesting that the licensee apply to amend its existing license to include the proposed new capacity and facilities.  Because many other existing dams may be candidates for the installation of new hydropower facilities, the Aspen Micro Hydro Project case illustrates important dynamics of hydropower licensing under the Federal Power Act.

The case centers on a March 4, 2015 application by the City of Aspen for a preliminary permit, pursuant to section 4(f) of the Federal Power Act, to study the feasibility of developing the Aspen Micro Hydro Project.  Most grid-connected hydropower in the U.S. is regulated under the Federal Power Act, and requires approvals by the Federal Energy Regulatory Commission.  As described in Commission documents, the proposed Aspen project would include an existing concrete diversion dam and intake structure, plus proposed new equipment including a draft tube, 10- to 20-kilowatt turbine-generator unit, and associated facilities interconnected to an existing utility transmission line.  The application describes project values including energy production, protection of the city's water rights, and instream flow protection for environmental benefit.  As noted in the application, "Renewable projects such as the Aspen Micro Hydro Project will permit the City of Aspen to reduce its reliance on coal-fired energy and comports with the City’s goal of reducing its energy-related greenhouse gas emissions. A local facility also will provide tangible evidence to residents and visitors of Aspen’s commitment to renewable energy."

Crucially, as noted by the Commission, the dam proposed for use in the Aspen micro-hydro project is currently licensed as part of another hydropower project: the City of Aspen's Maroon Creek Project.   Commission staff have noted that "for licensed projects, such as the Maroon Creek Project, section 6 of the [Federal Power Act] prohibits the alteration of licensed project works without the mutual consent of the licensee and the Commission."  On April 16, 2015, Commission staff sent the city a letter explaining that because the proposed micro-hydro project would be sited within the existing project boundary of the city’s Maroon Creek Project, any application for a permit or license within the project boundary would be denied.  For this reason, Commission staff concluded that "a preliminary permit for the Aspen Project would serve no purpose."  Instead, Commission staff informed the city "that it could instead file an application to amend its existing license to add the Aspen Project’s proposed capacity and related facilities to the Maroon Creek Project." 

Over a year later, the city filed a status report describing its intention to "enter into a business relationship with T-Lazy Seven Ranch (T-Lazy), a Colorado ranching company, for joint development of the Aspen Project."  The status report describes plans to form a new limited liability company, and ultimately to amend the permit application to replace the city as applicant with the new company.

In a November 15, 2016 Order Dismissing Preliminary Permit Application, Commission staff noted that the purpose of a preliminary permit is "to encourage hydroelectric development by affording its holder priority of application (i.e., guaranteed first-to-file status) with respect to the filing of development applications for the affected site."  The order also notes that the prohibition in section 6 of the Federal Power Act against the alteration of licensed project works without the mutual consent of the licensee and the Commission applies, no matter whether it is the existing licensee or the new entity who seeks to pursue additional development within the project boundary of the Maroon Creek Project.  The Commission's consent to alter licensed project works would presumably come in the form of an order amending the Maroon Creek Project's license -- a consent not formally requested int the Aspen Project's docket.

Continuing to find that a preliminary permit for the Aspen Project would serve no purpose for these reasons, the order dismissed the city's permit application.  The order leaves the door open for the licensee to seek to amend the Maroon Creek Project's license, potentially in concert with an application to transfer the licensee to a new licensee or co-licensee.

Beyond the City of Aspen's interests in hydropower, the case has regulatory implications for other proposals to develop micro-hydro or new generating capacity at dams or other structures already part of FERC-licensed projects.  A Department of Energy report released earlier this year found significant national potential to increase hydropower capacity, including by adding power at existing dams and canals.  Where the existing assets are part of a FERC-licensed project, developers will be wise to be mindful of how the Commission interprets the Federal Power Act.

Massachusetts climate change executive order

Massachusetts Governor Charlie Baker signed an executive order last month setting a comprehensive approach to climate change.  Executive Order No. 569, Establishing An Integrated Climate Change Strategy for the Commonwealth, directs state agencies to take a portfolio of actions to reduce greenhouse gas emissions, protect against the impacts of climate change, and improve resilience.

The order opens with acknowledgements that climate change and associated extreme weather events present serious threats.  It also notes the state's Global Warming Solutions Act, and the greenhouse gas emissions limits mandated by that law -- a 25% reduction below 1990 levels, achieved by 2020.  Following a decision by the Massachusetts Supreme Judicial Court earlier this year, regulations under that law must establish "declining annual aggregate emissions" for greenhouse gases.

Turning to action items, Executive Order No. 569 requires the Secretary of Energy and Environmental Affairs to publish a "comprehensive energy plan" within 2 years, with an update every 5 years thereafter.

The executive order also requires the Department of Environmental Protection to issue regulations to ensure that Massachusetts meets the 2020 statewide emissions limit required by the Global Warming Solutions Act.   Pursuant to the executive order, these regulations must be finally promulgated by August 11, 2017.

Executive Order No. 569 also requires coordination between the state's Energy and Environmental Affairs and Public Safety offices, with respect to strengthening community resilience, preparing for the impacts of climate change, and preparing for and mitigating damage from extreme weather events.  Within 2 years, this coordination will result in a Climate Adaptation Plan presenting a statewide adaptation strategy.

U.S., China ratify Paris climate agreement

The U.S. has formally ratified the global climate change agreement reached in Paris last year, as has China.  This moves the Paris climate agreement closer to legal effectiveness -- but more nations must accept the pact before it can enter into force.

At issue is the Paris Agreement, an agreement brokered at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC).  In December 2015, over 190 countries meeting under UNFCCC adopted the Paris Agreement agreement to limit global warming.  The Paris Agreement describes climate change as an "urgent threat" and a "common concern of humankind."  The agreement's aim is to strengthen global response to this threat, through a variety of means.  These include the creation of individual national commitments to reduce greenhouse gas emissions, increased adaptation to climate change, and assistance for developing nations.

But the Paris Agreement has not yet taken its full legal force, because it contains a provision limiting its effectiveness until enough nations agree to comply.  As is common for multilateral international agreements, the Paris Agreement calls for parties to express their consent to be bound by the agreement, by depositing instruments of ratification, acceptance, approval or accession with the depositary established by the convention.  In this way, the agreement draws a distinction between Parties -- those signing the Agreement -- and those nations which have deposited their ratification instruments. 

Under its Article 21, the Paris Agreement "shall enter into force on the thirtieth day after the date on which at least 55 Parties to the Convention accounting in total for at least an estimated 55 percent of the total global greenhouse gas emissions have deposited their instruments of ratification, acceptance, approval or accession."  Practically speaking, this means that as new countries submit their ratifications, the convention's secretariat must calculate the total greenhouse gas emissions of Parties that have ratified the Paris Agreement, as a percentage of global greenhouse gas emissions.  Once the 55 percent threshold is hit, the Paris Agreement will become legally effective and operational.  The UNFCCC has said that while it cannot predict when this will occur, "it is conceivable that the Agreement may enter into force before 2020."

On April 22, 2016, the Paris Agreement was opened for signature.  At the opening ceremony, 15 states deposited instruments of ratification.  By September 1, reportedly 24 states accounting for just over 1% of global greenhouse gas emissions had ratified the agreement.

The Paris Agreement's path to effectiveness advanced on September 3, when President Obama announced that the U.S. and China had formally joined the Paris agreement in a ceremony in China.  In recent years, these nations have been among the world's top emitters of carbon dioxide.  As described by the White House, "Both leaders expressed satisfaction with jointly joining the Paris climate agreement and pledged to work together and with other parties to bring the Paris agreement into force as early as possible."  The Obama administration also noted other recent U.S. climate actions taken jointly with China, including support for a proposed amendment to the Montreal Protocol to phase down the consumption and production of hydrofluorocarbons (HFCs) globally, and efforts to address international aviation emissions.

Following the U.S.-China announcement, the convention secretariat announced that as of September 7, 27 states had deposited instruments of ratification, acceptance or approval accounting in total for 39.08% of the total global greenhouse gas emissions.

NEPA guidance on greenhouse gas emissions

Federal agencies have new guidance on how to address the effects of greenhouse gas emissions and climate change as those agencies satisfy their duties under the National Environmental Policy Act.  This month the White House Council on Environmental Quality or CEQ issued its Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews.  The document is designed to improve clarity and consistency in how federal agencies address climate change in the environmental impact assessment process under NEPA.

Enacted in 1970, NEPA generally requires agencies to consider the environmental effects of proposed agency actions, and to provide the public and decision makers with useful information regarding reasonable alternatives and mitigation measures.  To coordinate federal environmental efforts, NEPA also established CEQ within the Executive Office of the President.  CEQ is now charged with issuing mandatory regulations for NEPA implementation, as well as guidance documents such as the recent greenhouse gas guidance.

In its final greenhouse gas guidance, CEQ described climate change as "a fundamental environmental issue" whose effects fall squarely within NEPA's purview.  In CEQ's words, "Analyzing a proposed action’s GHG emissions and the effects of climate change relevant to a proposed action — particularly how climate change may change an action’s environmental effects — can provide useful information to decision makers and the public." CEQ views focused and effective consideration of climate change in NEPA reviews as enabling higher quality agency decisions.

To this end, CEQ offered guidance that:

when addressing climate change agencies should consider: (1) The potential effects of a proposed action on climate change as indicated by assessing GHG emissions (e.g., to include, where applicable, carbon sequestration); and, (2) The effects of climate change on a proposed action and its environmental impacts.

The guidance presents further information and interpretation on each of these points. For example, it recommends that agencies quantify the direct and indirect greenhouse gas emission resulting from a proposed agency action, as well as both short- and long-term adverse and beneficial effects.  The guidance also stated that "a NEPA review should consider an action in the context of the future state of the environment." 

In one sense, the final guidance is just guidance.  As CEQ noted, agencies have discretion in how they tailor their individual NEPA reviews to accommodate the guidance. CEQ directed that agencies should apply this guidance to all new proposed agency actions as of the initiation of NEPA review.  It suggested that agencies "should exercise judgment" when considering the application of the guidance to an on-going NEPA process, but that CEQ does not expect agencies to apply the guidance to concluded NEPA reviews, nor to any actions for which a final Environmental Impact Statement (EIS) or Environmental Assessment (EA) has been issued.

CEQ recommended that agencies review their NEPA procedures and propose any updates they deem necessary or appropriate to facilitate their consideration of greenhouse gas emissions and climate change.  Agency procedures to implement NEPA may be in the form of regulations, although they are not required to take that form.  CEQ's final guidance on greenhouse gas emissions may lead other federal agencies to revise regulations, policies, or implementing procedures to ensure full compliance with NEPA.

Canada NEB starts Energy East pipeline review

Canada's National Energy Board has ruled that the applications are complete for the Energy East Pipeline Project and a related gas project.  This determination starts the NEB's review process, under which the Board must issue its recommendations to the Minister of Natural Resources within 21 months.

The National Energy Board is an independent federal regulator of several parts of Canada's energy industry, including the regulation of pipelines, energy development and trade in the Canadian public interest.

As envisioned by proponents TransCanada and Energy East Pipeline Ltd., Energy East would be a 4,500-kilometer pipeline that will transport approximately 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to the refineries of Eastern Canada and a marine terminal in New Brunswick.  Some existing natural gas pipeline would be converted to oil transportation pipeline, while other facilities would be newly built.  The project is motivated in part by a relative surplus of Western Canadian crude production, with relatively few ways to ship that crude to refineries or ports.

The related Eastern Mainline Project entails about 279 kilometers of new gas pipeline and related components, designed to let TransCanada continue to supply gas after the proposed transfer of certain Canadian Mainline facilities to Energy East Pipeline Ltd. for conversion to crude oil service.

On June 16, 2016, the National Energy Board announced its determination that due to the interconnections between the applications, the Energy East and Eastern Mainline projects are more effectively assessed within a single hearing process, with one record, reviewed by one Panel of Board Members.   It also deemed the applications complete to proceed to assessment and a public hearing, starting the 21-month review process.

The Panel must submit a report to the Minister of Natural Resources recommending whether or not the projects should proceed, or on what conditions. This report is due no later than March 16, 2018.  According to the NEB, the process will include hearings, panel sessions, and assessments of the upstream greenhouse gas emissions associated with the project.

Maine enacts biomass energy support

Maine has adopted a new law to support the state's biomass energy industry.  Governor Paul LePage has signed LD 1676, An Act To Establish a Process for the Procurement of Biomass Resources, as emergency legislation.  As a result, the bill has been enacted into law as Public Law, Chapter 483, from the 127th Maine Legislature.

The Maine State House.

The bill directs the Maine Public Utilities Commission to initiate a competitive solicitation as soon as practicable.  That solicitation will ask for proposals for 2-year contracts for up to 80 megawatts of biomass resources.  To qualify, a biomass resource must be a source of electrical generation fueled by wood, wood waste or landfill gas that produces energy that may be physically delivered to the ISO New England or Northern Maine Independent System Administrator markets.  A resource must also operate at least at a 50% capacity for 60 days prior to the initiation of a competitive solicitation and continues to operate at that capacity except for planned and forced outages.

The law gives the Commission some direction on how to select proposals for contracting.  It requires the Commission to seek to ensure, "to the maximum extent possible" that a contract provides benefits to ratepayers as well as in-state economic development benefits, reduces greenhouse gas emissions, promotes fuel diversity, and supports or improves grid reliability.

The costs of the contracts, other than above-market costs, and all direct financial benefits from the contracts must be allocated to ratepayers according to Maine's statute on allocation of costs and benefits of long-term energy contracts.  Above-market costs will be paid for from a cost recovery fund created by the new law, which allocates up to $13.4 million from the unappropriated surplus of the state's General Fund. 

Maine PUC considers NTA coordinator

Maine utility regulators have launched an investigation into the designation of a "Non-Transmission Alternative Coordinator."  The case could shape whether and how Maine coordinates alternatives to electric transmission line development.

Non-transmission alternatives or NTAs are smart grid programs and technologies that complement and improve operation of existing electricity transmission systems, deferring or eliminating the need for upgrades to the transmission system.  NTAs can an deliver improvements to the grid at a lower cost than some transmission projects.  Distributed generation, storage, and demand response can play roles in NTA projects.

In Maine, legislative policy supports selecting NTAs over transmission development if an NTA can meet an identified reliability need at a lower cost to consumers than the proposed transmission project.  But under current law, no single entity formally coordinates or is required to postulate alternatives to transmission development.

In previous cases, the Maine Public Utilities Commission has investigated the need for a smart grid coordinator, approved a non-transmission alternative pilot project in the Boothbay region, and considered the scope of what an NTA Coordinator might do.  From these dockets, a vision has emerged of the NTA Coordinator as an entity that would develop cost-effective alternatives to transmission projects.  Under this vision, the NTA Coordinator would address the policy and goals of the Maine's Smart Grid Policy Act to “improve the overall reliability and efficiency of the electric system, reduce ratepayers’ costs in a way that improves the overall efficiency of electric energy resources, reduce and better manage energy consumption and reduce greenhouse gas emissions.”

But key questions remain, including whether and how an NTA Coordinator will be designated, the scope of its functions and duties.  Another fundamental question is whether these functions will be performed by transmission and distribution utilities, or by some third party entity.

In a Notice of Investigation dated April 4, 2016, the Maine Public Utilities Commission opened its investigation into these questions.  The notice describes the proceeding as focused on one approach to economically optimizing the electric system between generation and transmission:

Specifically, through this proceeding, the Commission expects to address this legislative policy by (1) developing the framework for selecting a NTA Coordinator and (2) determining the scope of the NTA Coordinator’s functions and duties. The Commission will also resolve the question of whether a third party entity or the transmission and distribution (T&D) utilities should perform the NTA Coordinator functions. This investigation will also address the role of an Advisory Planning Committee (APC) and the process for NTA development both within a CPCN proceeding and for transmission and distribution projects that are not required to file a CPCN petition. Finally, an end-product of this proceeding will be either the contours of an RFP or that of a rate incentive proposal should the Commission determine that the utility and not a third party should perform the functions of an NTA Coordinator.

Along with the notice of investigation, the Commission also issued "Strawman" and "Process Chart" documents for comment.

The notice set deadlines for filing petitions to intervene by April 21, 2016, and for comments on the Strawman and Process Chart by April 28, 2016.  An initial case conference was scheduled for May 12, 2016.

U.S., China to sign Paris climate agreement

The U.S. and China have announced plans to sign the international climate change agreement reached in Paris last December.

The White House.

The Paris Agreement, adopted at the "COP21" U.N. Conference on Climate Change, establishes a framework for reducing global greenhouse gas emissions.  It takes effect once 55 countries accounting for at least 55% of global emissions formally commit to undertaking the low carbon measures it outlines.

According to a March 31 joint presidential statement on climate change, over the past 3 years, "climate change has become a pillar of the U.S.-China bilateral relationship."  The statement notes domestic efforts by the U.S. and China to "build green, low-carbon and climate-resilient economies", as well as the international action culminating in the December 2015 conference decision to adopt the Paris Agreement.

The joint statement declares that U.S. and China "will sign the Paris Agreement on April 22nd and take their respective domestic steps in order to join the Agreement as early as possible this year." April 22 represents the first day that the Paris Agreement will be formally open for signature by adopting nations.

A White House blog post describes this step as a "critical milestone" because it represents a commitment by "the world's two largest polluters" who account for 40% of global emissions.  According to that blog, this commitment places the 55% threshold for implementation "well within reach," "demonstrating to the international community that there is no turning back on the path towards a low carbon future." 

Paris climate agreement walkthrough

On December 12, the Parties to the United Nations Framework Convention on Climate Change adopted Decision 1/CP.21, adopting the Paris Agreement under that convention. The Paris Agreement itself is 12 pages long, and includes a preamble and 29 articles.  Its details merit a close read, as parties spent countless hours negotiating every word and piece of punctuation in the document.  Some articles have many operative clauses and address topics like temperature change and greenhouse gas emissions, while other articles are more ministerial.  Billions of dollars, and maybe the fate of the world, rests on the terms of these legal documents and how they are implemented.

Here's a overview-level walkthrough of the Paris Agreement:

• Preamble: recognizes climate change as a "common concern of humankind" and an "urgent threat" to which an "effective and progressive response" is necessary, that least developed countries and others may have specific needs, and interactions with other social values like food security, decent work and quality jobs, and "the importance for some of the concept of 'climate justice'".
• Article 1 provides definitions for Convention, Conference of the Parties, and Party.
• Article 2 defines the Agreement's aim as "to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty," including a long-term temperature goal, a call for increased adaptation, and "making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development."
• Article 3 requires all parties "to undertake and communicate ambitious efforts as defined in Articles 4, 7, 8, 10, 11, and 13" as "nationally determined contributions to the global response to climate change."
• Article 4 addresses the long-term temperature goal established in Article 2.  It requires each party to "prepare, communicate and maintain successive nationally determined contributions that it intends to achieve" and to pursue domestic mitigation measures.  Parties are expected to increase the level of ambition reflected in their nationally determined contributions over time.  Developed country parties are expected to take the lead, while supporting developing country parties and small island developing states.
• Article 5 calls for conservation and enhancement of sinks and reservoirs of greenhouse gases, including forests.  
• Article 6 recognizes that some parties may choose to pursue voluntary cooperation in implementing their nationally determined contributions.  It establishes a mechanism to promote and track "internationally transferred mitigation outcomes."  It also defines a framework to promote non-market approaches.
• Article 7 establishes a global goal of enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change.  It requires parties to engage in adaptation planning processes and actions.  It also requires periodic "adaptation communication" reporting to the secretariat.
• Article 8 addresses averting, minimizing, and dealing with "loss and damage" associated with the adverse effects of climate change, "including extreme weather events and slow onset events."  It uses the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts as its basis.
• Article 9 calls for developed country parties to provide financial resources to assist developing country parties with respect to both mitigation and adaptation, and to take the lead in "mobilizing climate finance from a wide variety of sources, instruments, and channels."
• Article 10 promotes technology development and transfer to "improve resilience to climate change and to reduce greenhouse gas emissions."
• Article 11 calls for "capacity-building", to enhance the capacity and ability of developing country and vulnerable parties to take effective climate change action such as adaptation and mitigation.
• Article 12 requires cooperation on "climate change education, training, public awareness, public participation and public access to information."
• Article 13 creates an "enhanced transparency framework for action and support" to build trust and confidence while allowing flexible and effective implementation.  It requires each party to regularly provide a "national inventory report of anthropogenic emissions by sources and removals by sinks of greenhouse gases," and information on how it has provided financial, technology transfer and capacity-building support to other countries.
• Article 14 requires a "global stocktake" -- that the parties periodically "take stock of the implementation of this Agreement to assess the collective progress towards achieving the purpose of this Agreement and its long-term goals."  Article 14 provides that the Conference of the Parties shall undertake its first global stocktake in 2023 and every five years thereafter unless the Conference otherwise decides.
• Article 15 establishes an expert-based committee as "a mechanism to facilitate implementation of and promote compliance with" the Paris Agreement.
• Article 16 provides procedures for aligning future meetings of parties to the Paris Agreement with the meetings of the Conference of the Parties.
• Articles 17, 18, and 19 provide procedures for the Convention secretariat, Subsidiary Body for Scientific and Technological Advice and Subsidiary Body for Implementation established by the Convention to also apply to the Paris Agreement.
• Article 20 provides processes for signature, ratification, acceptance, approval and accession of the Paris Agreement.
• Article 21 provides that the Paris Agreement "shall enter into force on the thirtieth day after the date on which at least 55 Parties to the Convention accounting in total for at least an estimated 55 percent of the total global greenhouse gas emissions have deposited their instruments of ratification, acceptance, approval or accession."
• Articles 22 and 23 provide processes for adopting any amendments or annexes to the Paris Agreement.
• Article 24 governs dispute resolution.
• Article 25 provides that each party shall have one vote, and establishes a process for "regional economic integration organizations" to vote as a bloc.
• Article 26 provides that the Secretary-General of the United Nations shall be the Depositary of the Paris Agreement.
• Article 27 prohibits any reservations being made to the Agreement.
• Article 28 provides a process for a party to withdraw from the Paris Agreement.
• Article 29 governs the original of the Paris Agreement.

The final language of the Paris Agreement's 29 articles, and Decision 1/CP.21 adopting the Paris Agreement, were each adopted by consensus by all of the 195 member states and the European Union participating in the COP21 summit.  Decision 1/CP.21 and the Paris Agreement will play important roles going forward as the world tackles climate change.  Their language will shape business, government, society, and the environment. 

Guide to the Paris climate agreement decision

Representatives from 195 countries signed a climate agreement on Saturday at the COP21 United Nations climate summit in Paris.  The resulting Paris climate agreement calls upon both developed and developing nations to reduce emissions of greenhouse gases, and establishes a framework for reviewing progress every five years.  This post examines the formal decision to adopt the Paris Agreement taken by the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC).

Under the procedural rules governing the Conference of the Parties, the parties adopted "decision 1/CP.21", the draft of which was proposed by the President of the Conference of the Parties.  Decision 1/CP.21 formally adopts the Paris Agreement -- contained in an annex to the decision -- and creates processes supporting its implementation.

Decision 1/CP.21 emerges from the parliamentary procedures used by the U.N. and the Conference of the Parties.  Written in formal language, the draft decision includes a preamble and six active sections:

• The preamble recites the agreed-upon facts motivating the Paris agreement, such as, "climate change represents an urgent and potentially irreversible threat to human societies and the planet and thus requires the widest possible cooperation by all countries."
• Section I, "Adoption," formally adopts the Paris Agreement under the United Nations Framework Convention on Climate Change as contained in the annex, and establish the Ad Hoc Working Group on the Paris Agreement to facilitate its implementation.
• Section II, "Intended Nationally Determined Contributions," invites participating countries to submit "intended nationally determined contributions" towards achieving the objective of the Convention "as soon as possible and well in advance of the twenty-second session of the Conference of the Parties (November 2016)."
• Section III, "Decisions to Give Effect to the Agreement," includes sections covering mitigation, adaptation, loss and damage, finance, technology development and transfer, capacity-building, transparency of action and support, global stocktake, facilitating implementation and compliance.
• Section IV, "Enhanced Action prior to 2020," calls for "the highest possible mitigation efforts in the pre-2020 period," such as "the provision of urgent and adequate finance, technology and capacity-building support by developed country Parties in order to enhance the level of ambition of pre-2020 action by Parties," with a goal of jointly providing USD 100 billion annually by 2020 for mitigation and adaptation.
• Section V, "Non-Party Stakeholders," welcomes interest, participation, and parallel efforts by non-Party Stakeholders, such as "civil society, the private sector, financial institutions, cities and other subnational authorities."
• Section VI, "Administrative and Budgetary Matters," notes potential limits on available financial resources, and urges that parties voluntarily make additional resources available.

Through this COP21 decision, the Conference of Parties adopted the Paris Agreement itself.   In a companion post, I provide a walkthrough of the terms of the Paris Agreement itself.

Resources on Clean Power Plan

Yesterday President Obama announced his administration's "Clean Power Plan," the U.S. Environmental Protection Agency's new regulations limiting power plant carbon emissions under Section 111(d) of the Clean Air Act.

EPA's final Clean Power Plan rule establishes emission guidelines for states to follow in developing plans to reduce greenhouse gas  emissions from existing fossil fuel-fired electric generating units. 

Here are some quick resources I've compiled as a guide to the Clean Power Plan and its release:

• Clean Power Plan Final Rule (PDF) (1560 pages)
• EPA's Regulatory Impact Analysis of the final rule 
• EPA's press release,  "Obama Administration Takes Historic Action on Climate Change/Clean Power Plan to protect public health, spur clean energy investments and strengthen U.S. leadership."
• EPA's overall Clean Power Plan website
• EPA's "key topics" handout
• EPA, DOE, FERC memorandum on coordination in implementing the Clean Power Plan
• EPA fact sheets:
• Overview of the Clean Power Plan: Cutting Carbon Pollution from Power Plants 
• Clean Power Plan: Key Changes and Improvements
• By the Numbers: Cutting Carbon Pollution from Power Plants
• Benefits of a Cleaner, More Efficient Power Sector
• Components of the Clean Power Plan: Setting State Goals to Cut Carbon Pollution
• The Role of States: States Decide How to Meet Their Goal
• Built on a Solid Legal and Scientific Foundation
• Clean Energy Now and in the Future
• Clean Energy Incentive Program
• Keeping Energy Affordable and Reliable
• Resources about the 2014 draft Clean Power Plan:
• A look at EPA's cost/benefit analysis
• Early questions about the Clean Power Plan
• FERC plans conferences about the Clean Power Plan
  

US Clean Power Plan adopted

President Obama will formally unveil the Clean Power Plan today, a set of regulations by the U.S. Environmental Protection Agency (EPA) to reduce carbon emissions associated with the electric power industry.  A blog post by EPA Administrator Gina McCarthy emphasizes the Clean Power Plan's protection of health and the environment, states' rights to choose their own implementation paths, reduction of future energy costs, and leadership on climate issues.  But some politicians, utilities and states have expressed concern about the regulations' impact, and could launch legal challenges -- or states might refuse to comply.  What's in store for the Clean Power Plan?

It has been just over a year since EPA first released its draft Clean Power Plan in June 2014.  These regulations under Section 111(d) of the Clean Air Act are designed to reduce the carbon intensity of the U.S. electric power sector -- essentially, how many pounds of carbon are emitted per megawatt-hour of electric energy produced.  Under the draft Clean Power Plan, EPA sets carbon intensity limits for each state, collectively designed to reduce carbon emissions by 30% below 2005 levels.  Each state then designs its own compliance plan using any combination of "building blocks": types of measures like improving the efficiency of fossil fuel power plants, switching out coal- and oil-fired power plants in favor of natural gas, and increasing low- and zero-carbon generation.

While the final Clean Power Plan's basic structure remains much the same, EPA has made some modifications in reaction to concerns about the greenhouse gas regulations' costs and impacts to grid reliability.

Changes from the 2014 draft include:

• Two extra years (until 2022) for states to meet their targets, and greater flexibility for states to form regional pacts to facilitate emissions-cutting projects across state lines, such as the Regional Greenhouse Gas Initiative.
• A new “safety valve” feature, to let states appeal for extensions and other relief if complying with the regulations causes disruptions to power supply.
• Increased social justice incentives for utilities to construct renewable energy projects in poorer neighborhoods, reducing pollution-related illness and eventually lowering electricity rates.
• Energy efficiency is still encouraged, but has been eliminated as one of the rule’s "building blocks” for states to use in building their own carbon-reduction plans.

How will the Clean Power Plan story continue to play out?  Will it be challenged in court?  Will states comply?  What impacts will it have on the U.S. electric power industry?