Clean Power Plan
The Clean Power Plan utilizes Section 111(d) of the Clean Air Act to regulate carbon emissions from existing power plants. The Clean Power Plan establishes specific carbon dioxide (CO2) emission reduction goals for each state based on current emissions levels and potential for achieving reductions. It is projected to reduce CO2 emissions from the power sector 32 percent from 2005 levels by 2030.
It will be up to each state to decide how it will comply with its emissions target. States have the option of taking a rate-based or mass-based approach to compliance, and must submit compliance plans to EPA for approval.
EPA explicitly recognizes energy efficiency as a proven, cost-effective, and widely-available compliance option in the Clean Power Plan. EPA even included a voluntary incentive program - called the Clean Energy Incentive Program (CEIP) - to stimulate early investment in energy efficiency in low-income communities.
Energy Efficiency’s Role
The Clean Power Plan allows for any demand-side energy efficiency measure to be used for compliance, provided that the energy savings are properly quantified and verified. To ensure that energy efficiency savings in rate-based plans are properly quantified and verified, the EPA released draft evaluation, measurement, and verification (EM&V) guidance. EPA identified a number of energy efficiency measures, programs, and policies that can count toward compliance. Examples of these energy efficiency measures include, but are not limited to:
- Energy efficiency measures that reduce electricity use in residential and commercial buildings, industrial facilities, and other grid-connected equipment;
- Energy efficiency measures installed through an energy efficiency deployment program (e.g. appliance replacement and recycling programs, and behavioral programs) administered by electric utilities, state entities, and other private and non-profit entities;
- State or local requirements that result in electricity savings, such as building energy codes and state appliance and equipment standards; and
- Energy efficiency measures installed as the result of individual projects such as those implemented by energy service companies (ESCOs).
HPC has spearheaded residential energy efficiency comments to EPA on all aspects of the Clean Power Plan. HPC submitted comments on the proposed Clean Power Plan, which was finalized in August 2015, as well on the associated Proposed Federal Plan and Model Trading Rules, EM&V Guidance, and CEIP Proposed Rule, which have not yet been finalized. HPC’s comments have:
- Focused on ensuring that residential energy efficiency and home performance count towards Clean Power Plan compliance;
- Urged EPA to promote and provide adequate guidance on the incorporation of residential energy efficiency in state compliance plans;
- Encouraged EPA to include appropriate EM&V provisions that do not present a burden to the home performance industry; and
- Argued for more favorable conditions for energy efficiency under the CEIP.
The Supreme Court issued a stay of the Clean Power Plan in February 2016, effectively halting implementation until litigation concludes. In spite of the stay, EPA continues much of its work on the Clean Power Plan – including reviewing public comments on and developing final versions of the Proposed Federal Plan and Model Trading Rules, Draft EM&V Guidance, and CEIP – and will also continue to provide guidance to any states seeking this technical support.
In addition to continued EPA work on the Clean Power Plan, almost all states continue to plan in some way for some kind of carbon regulation. Energy efficiency is a proven, cost-effective, and widely-available tool, and will be essential in that planning.
For more information on the Clean Power Plan – including a rule summary, history, factsheets, and resources for states – visit the EPA website.