1. business and industrial
2. energy
3. renewable energy

Inside Cal/EPA
An exclusive weekly report on environmental legislation, regulation and litigation
from the publishers of Inside EPA
Vol. 26, No. 10 — March 13, 2015
Study Highlights Need For Renewables, Biofuels To Meet 2030 GHG Target
An independent study commissioned by several state energy and environmental agencies is highlighting the
importance of a significant increase in renewable energy supplies and biofuels to meet the state’s 2030 greenhouse gas
(GHG) emission-reduction target that lawmakers are preparing to debate, according to a summary of the report.
The study, by consulting firm Energy & Environmental Economics (E3), was requested by California agencies —
including the state air board and energy commission — as part of their PATHWAYS project to support setting a 2030
GHG target, which is expected to be debated by state lawmakers this year. PATHWAYS is an economy-wide, infrastructure-based GHG and cost analysis tool, according to E3.
It is likely that the report, which may be supplemented with additional information in the coming months, will be
continued on page 4
ARB Finds Some Wood Products Exceed Formaldehyde Emissions Standard
State air board officials have found that some wood products being offered for sale in the state exceed the board’s
emission standard for formaldehyde, and they are continuing investigations that may lead to enforcement actions against
certain companies, a board spokesman indicates this week.
California Air Resources Board (ARB) activities related to enforcement of its “Composite Wood Products Regulation” are being scrutinized this week in the wake of a 60 Minutes report aired March 8 claiming that wood flooring
products being sold by U.S. retailer Lumber Liquidators exceed the ARB formaldehyde standard under the rule.
These allegations are being strongly challenged by the company and its supporters, with one news report this week
claiming that the laboratory 60 Minutes hired to test the wood failed to follow ARB’s testing protocol.
continued on page 6
At Budget Hearing, New DTSC Chief Touts Major Programs’ Improvements
New toxics department director Barbara Lee this week briefed Assembly budget panel members on progress she
said the department is making toward major program improvements, including speeding up permitting, better tracking of
hazardous waste shipments, and recovering site cleanup costs from responsible parties.
Lee noted at the March 11 hearing that she is considering whether to require companies to file for permit renewals
earlier than six months prior to the expiration of existing permits to help reduce administrative backlogs.
Committee lawmakers overseeing the department appeared mostly impressed by Lee’s update during the hearing
and subsequently approved a few core fiscal year 2015-16 budget requests as well as several additional funding proposals that were made by the Brown administration after the release of its proposed budget in January.
continued on page 8
Industry Criticizes OEHHA’S Use Of NTP Study For Styrene Prop. 65 Listing
Styrene producers are criticizing the health hazard office’s use of a 2011 National Toxicology Program (NTP) study
to justify the office’s recent proposed listing of styrene as a carcinogen under Proposition 65, with industry officials
warning that the listing could raise “unnecessary public alarm” over products containing the substance.
The controversial proposal follows a 2012 court ruling that blocked a previous attempt by the Office of Environmental Health Hazard Assessment to list styrene as a carcinogen under its “Labor Code mechanism,” agreeing with
industry plaintiffs that there was not enough scientific evidence to warrant a listing.
But OEHHA on Feb. 27 proposed to list styrene under its “authoritative bodies” mechanism, citing a 2011 NTP
edition of its “Report on Carcinogens” that found the chemical is “reasonably anticipated to be a human carcinogen
continued on next page
INSIDE
WATER QUALITY: EPA Deadlines, Lawmakers’ Queries Add To Scrutiny Of UIC Program .........3
ENERGY: Proposed CPUC Denial Of Power Deal Renews Debate Over GHGs, Reliability ........ 5
CLIMATE: Officials Seek To ‘Phase’ Desert Renewable Power Plan, Sparking Concerns ...........6
CONGRESS: In Rare Accord, Carper Backs State’s Call For Renewable Credits In ESPS .......12
based on limited evidence of carcinogenicity from studies in humans, sufficient evidence of carcinogenicity from studies
in experimental animals, and supporting data on mechanisms of carcinogenesis,” according to an OEHHA notice.
OEHHA is accepting written comments on the proposed listing until March 30.
Under Prop. 65’s authoritative bodies mechanism, a chemical must be listed when two conditions are met: an
authoritative body formally identifies the chemical as causing cancer; and the evidence considered by the authoritative
body meets the scientific sufficiency criteria contained in the regulations, according to OEHHA. NTP is one of the
authoritative bodies observed by OEHHA under the law.
OEHHA’s latest proposal to list the chemical stems from a 2013 legal settlement for a lawsuit filed in Alameda
County Superior Court by the Sierra Club in 2007, according to an OEHHA spokesman.
The lawsuit alleged that the state failed to act in a timely manner to complete decisions on potential Prop. 65 listings
for dozens of chemicals. The settlement did not require OEHHA or the state to add any specific chemicals to the Prop. 65
list. Instead, it established a time frame for OEHHA to make decisions on about 15 chemicals that had been under
consideration, the spokesman says.
Styrene is an “aromatic hydrocarbon used in the synthesis of polymers and resins that are used to fabricate various
industrial and household products including polystyrene packaging, synthetic rubber, fiberglass, automobile parts, and
food containers,” according to the OEHHA notice. The notice is available on InsideEPA.com. See below for details.
(Doc. ID: 179633)
Prop. 65 listing subjects manufacturers and retailers to requirements to post warning notices on products containing
certain amounts of chemicals, and opens them to state enforcement actions and citizen suits. While the law is unique to
California, it has wider impacts because many producers place the labels on all products they sell nationwide.
The Styrene Information & Research Center, an industry trade organization that successfully blocked OEHHA’s 2011
proposed listing under the Labor Code, is questioning whether the latest proposal meets the authoritative bodies
mechanism’s criteria.
“Evaluation is needed to clarify whether or not the criteria used in NTP’s Report on Carcinogens adequately aligns
with and supports the Prop. 65 listing criteria under the ‘authoritative body’ mechanism,” states Jack Snyder, executive
director of the group in a Feb. 27 press release. “This announcement does not automatically add styrene to the Prop. 65,
but rather initiates comment and review periods.”
The group will “develop a response and file comments on this proposed California action, which we believe has the
potential to result in unnecessary public alarm concerning the safety of the thousands of products made from styrene and
styrene-based resins,” Snyder adds. “Consumers can and should continue to use those products with confidence in their
safety.”
Background Documents For This Issue
Subscribers to InsideEPA.com have access to hundreds of documents, as well as a searchable archive of back issues of
Inside Cal/EPA. The following are some of the documents available from this issue of Inside Cal/EPA. For a full list of documents,
go to the latest issue of Inside Cal/EPA on InsideEPA.com. For more information about InsideEPA.com, call 1-800-424-9068.
Documents available from this issue of Inside Cal/EPA:
„
„
„
„
„
„
California Re-Proposes Styrene For Prop. 65 List (179633)
EPA Sets New Deadlines For California UIC Program Compliance (179634)
California Utilities Seek Relaxation Of RPS Eligibility Rules (179635)
California Proposes Rejection Of Disputed Peaker Plant Power Deal (179636)
Study Highlights Renewables, Biofuels In Meeting California GHG Targets (179637)
CARB Chair Supports EPA ESPS In Congressional Testimony (179638)
Not an online subscriber? Now you can still have access to all the background documents referenced in this issue through
our new pay-per-view Environmental NewsStand. Go to www.EnvironmentalNewsStand.com to find out more.
2
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
EPA Deadlines, Lawmakers’ Queries Add To Scrutiny Of State’s UIC Program
U.S. EPA is setting target deadlines through late 2016 for California to correct major deficiencies in its compliance
with federal oil and gas well underground injection control (UIC) rules, adding to scrutiny of the state’s UIC program
following a hearing this week where lawmakers queried regulators about their efforts to improve the program.
State energy and water officials are scrambling to comply with EPA’s directives to fix the problems with the program
while responding to ongoing media reports of wells around the state being unregulated and potentially threatening to
underground water supplies.
Last year, EPA Region IX required state agencies to submit by last month a plan to address the results of a 2011 EPA
audit and 2012 review of the UIC rules, which found numerous deficiencies with the state’s program, including that
officials may have allowed drillers to inject wastewater into “non-exempt aquifers,” potentially posing a threat to valuable
drinking water supplies in violation of the Safe Drinking Water Act (SDWA) and EPA’s rules.
In their Feb. 6 response to EPA, officials with the Water Resources Control Board and Department of Conservation’s
Division of Oil, Gas & Geothermal Resources (DOGGR) said they plan to bring the program into compliance with
federal requirements, including via the development of a suite of new rules, a phaseout of wastewater disposal wells that
are considered a threat to drinking water supplies, and the elimination of permits for wells that cannot qualify for exemptions from the UIC program (Inside Cal/EPA, Feb. 13).
DOGGR found that more than 2,000 wells in the state currently are permitted to inject gas and oil waste fluids into
protected sources of water in violation of the SDWA. Among those wells, 532 are used for disposal of oil and gas
wastewater, and 2,021 are for the injection of fluids or steam for enhanced oil recovery.
The WRCB-DOGGR compliance plan in part will use a combination of administrative mechanisms to ensure that
existing and new injection into non-exempt aquifers and 11 aquifers that have historically been treated as exempt “is
either phased out or covered by an aquifer exemption, and that any threats to drinking water or other beneficial uses of
water are urgently addressed,” the plan states.
But EPA Region IX is now asking for the state to meet new deadlines in their plan addressing non-exempt aquifers
and the aquifer exemption process, according to a March 9 letter to the state agencies.
“A critical aspect of the aquifer exemption process will be providing EPA with adequate time to review any proposed
exemption to determine whether it satisfies the SDWA’s regulatory requirements,” the letter states.
Given the state’s current compliance deadlines to eliminate all injection into non-exempt aquifers by Oct. 15, 2015,
for wells injecting into non-hydrocarbon bearing zones under 3,000 milligrams per liter (mg/L) of total dissolved solids
(TDS), and Feb. 15, 2017 for all remaining Class II wells, “EPA is establishing interim milestones to make sure that EPA
does not receive a substantial number of aquifer exemption applications to review at the last minute, and to prioritize any
exemptions sought for disposal wells injecting into non-hydrocarbon-bearing aquifers,” the letter says.
As a result, EPA directs the state to submit aquifer exemption applications as follows: 100 percent of proposed
aquifer exemptions for Category 1 disposal wells injecting into nonexempt, non-hydrocarbon-bearing aquifers containing
3,000 mg/L TDS or less: July 15, 2015; 90 percent of proposed aquifer exemptions for Category 1 disposal wells with
injection into nonexempt, non-hydrocarbon bearing aquifers containing 3,000 -10,000 mg/L TDS, and all proposed
exemptions for any of the 11 aquifers historically treated as exempt: Nov. 15, 2015; 90 percent of proposed aquifer
exemptions for Category 2 wells: Feb. 15, 2016; 90 percent of proposed aquifer exemptions for Category 3 wells: Aug.
15, 2016; and 100 percent of remaining proposed aquifer exemptions for existing wells by Oct. 15, 2016, according to the
letter. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 179634)
Failure to submit applications in accordance with this schedule “will seriously jeopardize EPA’s ability to take final
action on aquifer exemption requests in advance of the compliance deadlines,” Region IX says.
With respect to the 11 aquifers that have historically been treated as exempt, “we look forward to working with your
agencies to evaluate whether those aquifers meet state and EPA criteria for Class II injection.”
As an initial step, EPA asks the state to evaluate the current quality of each of the aquifers and provide a preliminary
assessment by July 15, 2015, of whether available data would support an aquifer exemption proposal, the letter says.
Given existing data that indicate these aquifers contain less than 3,000 mg/L TDS and are not hydrocarbon-bearing, the
state “shall not permit new injection wells in these aquifers, even in the limited circumstances proposed” by the state
“prior to state submittal of supporting information to EPA and an EPA decision.”
The state must also require that existing wells cease injection into these aquifers by Dec. 31, 2016, absent an EPA
decision that they meet criteria for Class II injection based on state data between now and then, EPA says.
Meanwhile, state lawmakers queried DOGGR and WRCB officials during a March 10 UIC program oversight
hearing held jointly by the Senate Environmental Quality and Senate Natural Resources & Water Committees.
Sen. Hannah-Beth Jackson (D-Santa Barbara) called the state’s noncompliance with UIC rules an “endemic problem”
caused by a cozy relationship between the industry and regulators that has lasted for decades.
She asked John Laird, secretary of the Department of Conservation, which houses DOGGR, how such a situation
could occur and how it could be prevented in the future.
Laird responded that taking managerial actions to change the culture within the state agency departments is a critical
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
3
way to start improving the situation. In addition, following the extensive UIC compliance plan laid out last month by the
agencies is paramount, he said.
Environmentalists continue to press state officials to halt all injections into the more than 2,000 wells identified by
the state’s own review regardless of whether the aquifers will ever be used as drinking water sources.
Oil and gas industry representatives who generally support the state’s plan to comply with the federal UIC rules have
raised concerns that the agencies are not providing enough time to complete new regulations and other elements of the
compliance strategy, potentially meaning that companies could be forced to close wells or reduce production.
Study Finds Large GHG Cuts Achievable By 2030 . . . begins on page one
used by state agencies to set the 2030 GHG-reduction target and tailor existing and future GHG programs and policies to
achieve the target, in a manner that also enables the state to reach its goal of cutting GHGs 80 percent by 2050.
Some sources believe that the study may support calls for state policymakers to replace the current renewable
portfolio standard after 2020 with a novel “low-carbon electricity standard” that would set an overall electricity-sector
GHG-reduction target for 2030 and require state grid operators to prioritize energy efficiency, demand response and
energy storage technologies to help stabilize and modernize California’s electricity grid.
To this end, Gov. Jerry Brown (D) in January called on the state to achieve by 2030 a 50 percent renewable power
level, a 50 percent cut in petroleum use, and a doubling of energy efficiency in buildings (Inside Cal/EPA, Jan. 9).
GHG reductions of 25-36 percent below 1990 levels “appears achievable in 2030 with a significant increase in GHG
reduction efforts [and] mitigation of key risks,” according to a recent slide presentation the firm made at the University of
California-Davis summarizing the report. Relevant documents are available on InsideEPA.com. See page 2 for details.
(Doc. ID: 179637)
The firm assumes in its multi-scenario analysis that California will achieve a 50 to 60 percent renewable power level
by 2030, featuring a “relatively diverse renewable portfolio of wind and solar across geographies; increased imports and
exports of power across the state’s transmission interties; an increase in the flexibility and efficiency of natural gas
generation and a phasing out of non-dispatchable fossil resources; an increase in “responsive loads,” including flexible
loads in buildings and industry and smart charging of electric vehicles; and either flexible production of low-carbon fuels
from electricity or an increase in long-duration energy storage, according to a summary of the report.
A renewable power industry source says the study includes details showing “that we will need at least as much wind
[energy] as utility-scale solar in a cost-effective mix of renewables.”
All scenarios analyzed assume a doubling of energy efficiency achieved in buildings and industry by 2030; that
over 50 percent of new sales of residential water heaters and HVAC systems for buildings will be high efficiency
electric heat pumps by 2030 or over 50 percent natural gas demand is supplied with biogas by 2030; a rapid increase in near-zero and zero emission vehicles by 2030 — such as between 3 million and 8 million of these vehicles
being on the road in 2030; and a significant increase in the use of sustainable biofuels, with a large share likely to be
imported from out of state.
In addition, the study assumes a significant reduction in high global warming-potential gases such as methane and
fluorinated gases.
The study also assesses and compares the cost implications of different 2030 GHG targets for households, evaluating
a range of potential future technology costs and fossil fuel prices, according to the summary.
Under “base-case cost assumptions,” the average household direct cost is $8 per month in 2030. This estimate
includes all direct effects, including changes in the average household’s cost of transportation fuel, electricity and
natural gas bills as well as the incremental capital outlays on energy efficiency and low-carbon vehicles, the summary says.
If all commercial and industrial costs are assumed to be passed on to households, the average household cost impact
is $12 per month in 2030 relative to current policy, according to the study.
SUBSCRIPTIONS:
703-416-8500 or 800-424-9068
custsvc@iwpnews.com
NEWS OFFICES:
Sacramento
916-449-6171
Fax: 916-449-6174
Washington
703-416-8516
Fax: 703-416-8543
4
Publisher:
Editor:
Rick Weber, Washington, DC
Curt Barry (cbarry@iwpnews.com)
717 K Street, Suite 503, Sacramento, CA 95814-2736
Production Manager:
Production Specialists:
Lori Nicholson (lori.nicholson@iwpnews.com)
Daniel Arrieta, Michelle Moodhe
Inside Cal/EPA is published every Friday by Inside Washington Publishers, P.O. Box 7167, Ben Franklin
Station, Washington, DC 20044. Subscription rates: $715 per year in U.S. and Canada; $765 per year
elsewhere (air mail). © Inside Washington Publishers, 2015. All rights reserved. Contents of Inside Cal/EPA
are protected by U.S. copyright laws. No part of this publication may be reproduced, transmitted, transcribed,
stored in a retrieval system, or translated into any language in any form or by any means, electronic or
mechanical, without written permission of Inside Washington Publishers.
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
Proposed CPUC Denial Of Power Deal Renews Debate Over GHGs, Reliability
A state utilities commission administrative law judge is proposing to reject an energy procurement contract between a
major southern California utility and a new natural gas-fired “peaking” power plant, renewing debate over how state
officials should consider greenhouse gas (GHG) emissions and electricity reliability in overseeing actions to replace
electricity lost due to the permanent closure of the San Onofre nuclear plant in southern California.
How state officials plan and develop power generation, including renewable energy, and transmission in the coming
years, especially in southern California, is a hot-button issue among a variety of stakeholders. A central debate is whether
and to what degree new natural gas-fired power plants must be built to ensure a reliable electricity supply in the region,
given the permanent shutdown in 2013 of the San Onofre nuclear power plant and the potential closure of several older
coastal power plants in the coming years due to the state water board’s phaseout of once-through-cooling (OTC) systems.
For example, state energy grid operators, the California Air Resources Board, and utility officials have argued that
new natural gas-fired peaker plants are vital to enable more renewable energy projects to be implemented throughout the
state and especially in southern California.
Activists, however, are adamant that state officials mandate primarily renewable energy generation, energy storage and
other “preferred resources” to fill the void created by the closure of the nuclear plant, and reject new natural gas-fired plants.
Hallie Yacknin, an administrative law judge (ALJ) with the California Public Utilities Commission (CPUC), stirred
up new debate over the issues when she released a proposed decision March 6 to reject an application by San Diego Gas
& Electric Co. (SDG&E) to enter into a power purchase agreement with Carlsbad Energy Center, LLC, to fill 600
megawatts (MW) of local power needs. The commission may vote on the proposal as early as April 9, sources say.
The Carlsbad Energy Center by NRG Energy is a planned 600-MW, natural gas, simple-cycle, peaking power plant
located adjacent to the existing Encina Power Station in Carlsbad, according to the ALJ’s proposed decision. The Carlsbad
project is scheduled to come on-line on Nov. 1, 2017, while the Encina plant is scheduled to close in the coming years.
Yacknin concluded that approval of the power purchase agreement “would preclude SDG&E from procuring preferred
resources and energy storage” in excess of a required minimum 200 MW as mandated by a previous CPUC decision.
In addition, a previous, general SDG&E request for offer to fill the power void “has produced a robust number of
offers for preferred resources and energy storage which could potentially meet some, if not all, of the 600 MW” of local
power needs SDG&E is seeking, Yacknin concludes in the proposed decision.
“While it is not possible at this juncture to determine the viability of offers for preferred resources and energy
storage, the evidence does not lead us to presume that the [offer] will fail to produce any preferred resource options to
meet SDG&E’s procurement requirement beyond the 200 MW minimum of preferred resources and energy storage,” the
judge states. The decision is available on InsideEPA.com. See page 2 for details. (Doc. ID: 179636)
Environmentalists hailed the decision as a win for clean power and the avoidance of new GHG emissions.
“From the beginning, we knew that 100 percent of San Onofre could be replaced with clean energy,” says Matt Vespa, a
senior staff attorney with the Sierra Club, in a March 6 press release. “The decision recognizes that clean energy is a
viable option and must be allowed to compete against dirty fossil fuels.”
Vespa notes, however, that CPUC Chairman Michael Picker and the rest of the CPUC members must “uphold the
decision” by Yacknin when they take a vote on the proposed decision, scheduled for next month. “This is an opportunity
for the commission to regain public trust during a time when they have shown favoritism to utilities.”
Tamara Zakim, associate attorney with Earthjustice, says the proposed decision is “about common sense and smart
energy planning,” the release states. “California needs to consider and utilize its plentiful renewable energy options
before it builds dirty new power plants that contribute to climate change. The closure of the San Onofre Nuclear Generating Station (SONGS) in southern California gives the state an important opportunity to do things right by addressing
climate change and filling its energy needs with clean power.”
But an SDG&E spokeswoman responds that it is important to note that Yacknin's proposed decision recommends that
the decision “to move forward with the Carlsbad Energy Center is delayed until SDG&E has more time to evaluate the
responses to its current all-source request for offers [RFO]. The legal term that the ALJ uses is 'deny without prejudice,'
which means in this case that we are free to re-file a similar application for the Carlsbad Energy Center once we have
more time to evaluate the responses to the RFO.”
In addition, the spokeswoman notes that the draft decision “acknowledges the reliability benefits, renewable integration benefits and locational benefits of the Carlsbad project. The draft decision also recognizes that the proposed
Carlsbad [power purchase agreement] price, term and conditions compare reasonably to the recent Pio Pico Energy
Center [agreement] as well as to costs for comparable generating units. The draft decision essentially defers action until
we have an opportunity to review the results from the RFO.”
Last spring, CPUC approved a decision under its Long Term Procurement Planning (LTPP) proceeding that authorizes “long-term procurement for local capacity requirements” due to the permanent retirement of SONGS.
The decision directed both SDG&E and Southern California Edison (SCE) to procure energy supplies to meet the
region’s needs. SDG&E must procure between 600 and 900 MW by 2022 to meet local capacity needs stemming from the
retired SONGS, sources say.
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
5
ARB Enforcement Powers Debated Over Wood Rule . . . begins on page one
The ARB spokesman declined to answer any specific questions about the company or the 60 Minutes report. “We have
tested products that contain composite wood and found products that exceed the standards,” the spokesman says. “We are
engaged in continuing investigations with those companies and cannot comment any further on these investigations.”
Enforcement of the ARB regulation outside of California and the rest of the United States, particularly in China, has
been the subject of considerable debate over the past several years.
For example, U.S. wood product industry organizations have argued that they are at a severe disadvantage because it
is much easier for ARB to initiate enforcement actions against their member companies than it is to pursue actions against
foreign companies.
ARB’s regulation aims to reduce public exposure to formaldehyde through the establishment of strict emission
performance standards on particleboard, medium density fiberboard and hardwood plywood, according to an ARB fact
sheet posted on the board’s website this week.
The regulation, adopted in 2007, established two phases of emissions standards: an initial Phase I, and later, a more
stringent Phase 2 that requires all finished goods, such as flooring, destined for sale or use in California to be made using
complying composite wood products. As of January 2014, only Phase 2 products are legal for sale in California, the fact
sheet says.
U.S. EPA is in the midst of developing its own national wood products formaldehyde regulation, which is supposed
to harmonize with the California rule. The ARB rule is considered the first of its kind in the nation and one of the most
stringent in the world.
Formaldehyde, produced on a large scale worldwide, is present in adhesives and resins used in wood products, ARB
says. Formaldehyde was designated as a toxic air contaminant by California in 1992 with no safe level of exposure.
Officials Seek To ‘Phase’ Desert Renewable Power Plan, Sparking Concerns
A surprising announcement this week by state and federal officials to “phase in” their controversial proposed
renewable power siting plan for California’s southeastern desert region is sparking fresh questions and concerns over the
strategy, including from clean energy industry representatives who say the altered direction creates uncertainty over how
much public land will be set aside for wind and solar projects.
But conservationists fear the new plan may shift more renewable power development to public lands and have a
bigger impact on imperiled wildlife while at the same time resulting in less public land being identified as important
conservation areas.
At issue is the draft Desert Renewable Energy Conservation Plan (DRECP) and accompanying environmental impact
analyses, which were released for public comment last September by the California Energy Commission (CEC), California
Department of Fish & Game, the U.S. Bureau of Land Management (BLM), and the U.S. Fish & Wildlife Service (FWS).
The DRECP maps out preferred areas to develop renewable power in the desert regions and adjacent lands of seven
California counties — Imperial, Inyo, Kern, Los Angeles, Riverside, San Bernardino and San Diego. The plan also
includes mitigation and variance areas.
The plan’s alternatives all aim to establish approximately 20,000 megawatts (MW) of renewable power development
in the area. Depending on the various alternatives proposed in the plan, solar power would make up roughly 12,00014,000 MW and wind would fall in the 4,000-6,000 MW range.
The plan is considered critical for developing renewable power in California while protecting the environment, and
outlines how to streamline wind, solar and geothermal power permitting. It is also designed to help utilities meet the
state’s renewable portfolio standard, which requires that 33 percent of the electricity supplied to customers come from
renewable sources by the end of 2020.
But a written comment period on the draft plan ended Feb. 23, with numerous stakeholder organizations, as well as
U.S. EPA, raising substantial objections with many provisions in the proposal (Inside Cal/EPA, March 6).
In response to the thousands of written comments on the proposal expressing dire concerns about a spectrum of
issues, state and federal officials announced March 10 that they have decided to “adjust” the planning process and use a
“phased approach” to approve the plan’s three fundamental components. They are BLM’s Land Use Plan Amendment; the
federal General Conservation Plan; and the state Natural Community Conservation Plan.
The new phased approach aims to focus on concerns raised by counties that they are being overlooked in terms of
how projects will be developed on private land within their jurisdictions.
“Using a phased approach to the DRECP allows us to build on county priorities and address local needs in the
planning process,” said Karen Douglas, a CEC commissioner, in a March 10 press release by the agencies. “We believe
moving forward in this way will help California and the nation meet long-term climate and clean energy goals while
conserving our desert’s unique and valuable resources.”
To allow more time to address the county concerns, the agencies will first focus on completing the BLM component
6
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
of the DRECP that designates development focus areas and conservation areas on public lands, officials say.
“Continued engagement with the counties will help determine the best options and timing for proceeding with the
private land components and better align renewable energy development and conservation at the local, state and federal
level,” the release states. “It will also allow the agencies to explore opportunities for a tailored, county-by-county
approach that fits with the DRECP plan.”
However, key stakeholders say the new approach raises questions about how much development will ultimately be
allowed in both areas.
“If you’re trying to meet a 20,000 MW goal for renewable energy, how does a phased approach accomplish that, not
knowing what the rest of the phase is?” asks one renewable power industry source. “Our biggest criticism is that they
weren’t planning for enough renewable energy on public lands. How does BLM move forward towards a goal when they
don’t know how much private land is going to carry” the projects?
But some conservation groups say that because counties have expressed concerns about too many renewable power
projects being located on private lands, it is likely that the new phased approach will shift more development to public
lands, which they may oppose.
“County participation is essential to make the private lands portion of the plan work, but conservationists are
concerned that this ‘phased approach’ may shift more renewable energy development to public lands and have a bigger
impact on imperiled wildlife while at the same time resulting in less public lands identified as important conservation
lands,” states a March 10 press release by Defenders of Wildlife.
What appears to be certain is that finalization of the DRECP will be further delayed because of the new phased
approach, sources say.
Counties are likely to be pleased by the revised approach, based on their strong reservations about the draft plan
detailed in written comments submitted last month.
For example, Riverside County officials in a Feb. 23 letter said that “large-scale renewable energy projects permanently alter the landscape and preclude all other potential uses including, but not limited to, agricultural, recreational,
commercial, residential and open space uses.”
At the same time, the county also recognizes that the conservation areas contemplated by the DRECP may result in
lost economic development potential such as jobs and property tax revenue, the Riverside officials note in the letter.
“Without further explanation in the plan and appropriate ways to reduce and balance these impacts, Riverside County
remains concerned that its residents, businesses and visitors will either disproportionally bear the burden for renewable
energy production for the state because it is uniquely suited for the location of such renewable energy facilities or will
disproportionally bear the burden of conservation for the state resulting in other lost opportunities,” the letter adds.
Top state and federal officials working on the plan held a March 10 phone call briefing to announce their new phased
approach to the plan, but did not take any questions from stakeholders or reporters.
Utilities Press CEC To Ease RPS Eligibility Given State GHG, Energy Goals
Major California municipal utilities are urging the California Energy Commission (CEC) to ease credit-eligibility
rules under the state’s renewable portfolio standard (RPS), citing the state’s aggressive new long-term targets for clean
power generation and greenhouse gas (GHG) emission reductions.
In comments last month, the California Municipal Utilities Association (CMUA) urged CEC to “keep the governor’s
proposed long-term goals in mind while balancing the costs, burdens, and system benefits of implementing such a
policy.” Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 179635)
The RPS, which currently requires utilities to ensure that 33 percent of the power they supply comes from renewable
sources by 2020, is a key element of California’s strategy to reduce GHG emissions to 1990 levels by 2020 and 80
percent below 1990 levels by 2050. Gov. Jerry Brown (D) in January set a new goal for the state to achieve a 50 percent
renewables level by 2030.
CEC, which enforces the RPS for public utilities while the California Public Utilities Commission regulates the
major investor-owned utilities, proposed in January to amend provisions of its RPS “Eligibility Guidebook,” which
provides utilities, clean energy generators and other stakeholders with specific criteria for determining what types and
amounts of power will qualify for various levels of credit under the program.
CEC plans to release a revised version of the proposal in April based on stakeholder comments and adopt the plan in
May, according to a spokeswoman.
Representatives of major publicly owned utilities, energy companies and other key stakeholders recently submitted
written comments to CEC on how to revise the January draft proposal for the “8th edition” of the guidebook, emphasizing
Brown’s new target of reaching 50 percent renewables by 2030.
“In order to identify issues and potential solutions to achieving a fifty percent renewables goal, the state is going to
need to evaluate the manner in which it categorizes eligible renewable energy resources,” CMUA says. “For example, it
will likely be necessary for distributed generation, and rooftop solar in particular, to play a larger role.”
CMUA notes that under current plans, state officials will be categorizing significant amounts of rooftop solar
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
7
electricity generation later sold as renewable energy credits (RECs) as eligible only for the lowest level of credit under
the RPS, referred to as the “third bucket.” CEC “should recognize the contractual and ownership structures under which
distributed generation qualifies” under the highest level of RPS credit, or “bucket 1,” CMUA argues.
The utility group is also recommending CEC scale back restrictions on the amount of hydroelectric power that may
be creditable under the regulation, ease requirements for retroactive creation of RECs and allow more credits to be
generated for energy storage projects, according to its February comments.
Regarding hydroelectricity, CMUA argues that CEC’s RPS rules are failing to fully implement a recent law
aimed at incentivizing more generation through “incremental upgrades” of hydro facilities. “Instead, to date there have
been only three applications by all of California utilities to seek RPS-eligibility for their incremental hydroelectric
generation and the only one to be approved . . . was specifically identified as RPS-eligible in the implementing legislation,” the group states. “Several CMUA members, in reviewing the CEC’s application process, found the benefits not
worth the effort and uncertainty involved in filing an application.”
To promote more hydropower and fulfill the new law, CEC “should identify as part of its guidebook revisions how it
can simplify the application process and improve its certainty,” the comments add.
CMUA and some of the state’s major POUs are also urging CEC to revise provisions affecting biomethane generation and crediting under the RPS.
For example, the Los Angeles Department of Water & Power (LADWP), in its February comments, says that the
draft guidebook lists several types of contract “adjustments” that would cause additional biomethane procurement
received from existing contracts to be subjected to new contract requirements, which will likely significantly lessen the
amount of biomethane that will be creditable under the RPS.
The utility also objects to language in the draft guidebook stating in part that a POU or electricity generator involved
in a biomethane contract “shall not make a marketing, regulatory, or retail claim that asserts that the biomethane procurement contract resulted, or will result, in GHG reductions related to the destruction of methane if the capture and destruction of methane are required by law.”
This provision may conflict with an exemption from certain compliance obligations for biomethane contained in the
California Air Resources Board’s GHG cap-and-trade regulation, LADWP argues.
“Use of biomethane instead of natural gas results in a reduction in GHG emissions because the biomethane (biomass
derived fuel) is displacing natural gas (fossil fuel) that would otherwise have been burned to produce electricity,”
LADWP contends. “Good public policy should encourage the beneficial use of biomethane, not discourage it.”
Regarding energy storage, CMUA argues the draft guidebook unnecessarily restricts what types of storage projects
are eligible for RPS credit. CEC should develop a methodology to determine the storage efficiency for a certified energy
storage facility, and develop a process where a “bundled product” — energy and RECs — can be transferred to the
energy storage facility “and then that facility can subsequently transfer a bundled product . . . to a third party, subject to
adjustment based on the storage efficiency,” CMUA states in its comments to CEC.
Panel Approves New DTSC Program Funding . . . begins on page one
Lee was appointed by Gov. Jerry Brown (D) as director of the Department of Toxic Substances Control on Oct. 31, at
a time when the department was being heavily criticized by some lawmakers and environmental organizations for failing
to protect public health and the environment across several major programs. Lee replaced acting director Miriam
Ingenito, who had served since former director Debbie Raphael resigned on May 30, 2014 (Inside Cal/EPA, Nov. 7).
DTSC is in the midst of a major overhaul of its core programs, an effort dubbed “Fixing the Foundation” that was
launched in 2012, Lee told lawmakers this week. The department has completed 210 of 297 “specific action items”
identified under the initiative to vastly improve operations, Lee said.
Lee detailed progress on four key program reforms that have received substantial amounts of funding in the current
budget year and are proposed to receive additional money and staffing in the 2015-16 fiscal year.
For example, in terms of recovering an outstanding $194 million from responsible parties for DTSC-funded contaminated site cleanups over the last several decades, Lee said $52.2 million in claims has been “resolved”; $29 million in
costs has been determined to have no responsible party and been assigned to the state’s “orphan fund” for reimbursement;
and another $69 million in claims has either been referred to the state attorney general or other prosecutors for legal
action or is involved in bankruptcy cases.
The remaining $71 million in uncollected costs is “on track to be resolved” in the 2015-16 budget year, Lee told
lawmakers at the hearing.
In addition, DTSC has implemented six of 11 recommendations to improve its cost recovery program that were
included in a state audit last year, Lee said. Two others require legislation and are included in recently introduced bills by
the Assembly Environmental Safety & Toxic Materials Committee, she noted. The three remaining recommendations are
in the process of being implemented.
With regard to resolving a significant permit processing backlog, Lee said the department is in the process of
reducing the time it takes to issue or renew permits from about four years to two years. Although the current backlog is
8
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
being reduced, the number of “continued” permits is expected to increase over the next year because many facilities must
submit applications to renew permits that are set to expire, she said.
“Continued” permits are those that have expired but are still allowed to be used while DTSC processes permit
renewals. Under current law, facilities must submit applications for permit renewals at least six months prior to the
expiration of their existing permits.
The budget subcommittee approved DTSC’s request for an additional $1.6 million and 16 two-year limited term
staff positions in fiscal year 2015-16 to address the permit backlog.
Assemblyman Jim Patterson (R-Fresno) questioned whether it is realistic to expect the department to be able to cut
permit processing durations from four to two years in such a short time frame. “How in the world does that get cut in
half?” he asked Lee.
Lee responded that the department has undertaken a “very comprehensive review of the process, using engineering
and business approaches used by major companies like Toyota and others, to analyze process work flow, cut waste,
eliminate duplication, [and] better align timing of different steps.” DTSC has “already seen significant improvements in
the timing of our permit reviews,” she added.
Panel chairman Richard Bloom (D-Santa Monica) asked whether Lee has considered whether it would be advisable to
require facilities to submit applications for permit renewals sooner than six months prior to the expiration of existing permits.
Lee responded that “this is something that I’m looking at now.” If DTSC can make changes to the program to reduce
the number of permits on “continued” status by requiring companies to submit applications earlier, “it would be to our
benefit and to the public’s,” Lee said.
However, because she has only been at her post for several months, her staff has not completed an analysis of such a
change in regulation, Lee said, including what may be required programmatically to make the change and whether it may
require legislation or could be done through a DTSC rulemaking.
DTSC is also making progress to improve its hazardous waste tracking system, including the correction of errors on
manifests required to be used by transport companies and others, Lee told the panel. “We now have staff examining waste
manifests every day looking for errors, [and to] detect illegal shipments to unauthorized facilities,” Lee said.
While department staff has not uncovered any illegal shipments since last fall, it has found “illegal transporters,” she
said, which are being pursued with enforcement actions.
Since new staff was hired several months ago, the department has corrected 7,500 manifests, Lee reported, and has
compiled a correction rate of about 6.7 percent, compared with total manifests reviewed.
Some of the other DTSC budget funding requests the subcommittee approved at the hearing are: $840,000 and
six, two-year staff positions to develop, implement and evaluate projects that reduce the generation of hazardous wastes
that are treated or disposed in California; $600,000 and 2 limited-term positions for two years to support the department’s
biomonitoring program; and $734,000 and 5.5 staff positions for a limited-term of three years to implement an enforcement order against an Exide Technologies lead battery-recycling facility in southern California.
The Exide facility has been a thorn in DTSC’s side for years, as it had been processing its “continued” permit, but
recently carried out an enforcement order to close the operation.
This week, Senate President Pro Tem Kevin de Leon (D-Los Angeles) criticized DTSC for failing to shut down the
facility earlier for violations of its expired permit.
“Repeated failures by DTSC have shown that our current system for handling hazardous waste is broken,” de Leon
says in a March 9 press release. “Exide Technologies has operated a lead battery recycling facility without a permit in
Vernon for over 30 years and repeatedly violated environmental and safety standards emitting lead, arsenic and other
contaminants into communities.”
The facility “has represented a dangerous lapse in the state’s hazardous waste tracking system and lack of enforcement has led to detrimental impacts on public health and the environment within communities I represent in Los Angeles,
including Boyle Heights, East and South East L.A.,” de Leon said. “Serious reforms are needed at DTSC to prevent this
from ever happening again.”
Boxer, AG Charge TSCA-Reform Bill Preempts Landmark California Rules
The California attorney general (AG) and Sen. Barbara Boxer (D-CA) are charging that revised draft legislation being
floated in the U.S. Senate to reform the Toxic Substances Control Act (TSCA) would preempt California’s landmark green
chemistry regulatory program and its Proposition 65 chemical warning law, and are vowing to fight the measure.
In response, Boxer and Edward Markey (D-MA), announced March 12 they are introducing the “Alan Reinstein and
Trevor Schaefer Toxic Chemical Protection Act,” they say provides critical safeguards to protect children and communities from the dangers of toxic chemicals, in addition to maintaining states’ rights to implement their own green chemistry
programs that may be more stringent than federal law.
The legislation being opposed by Boxer and the California AG was released March 10 and is a revised version of a
prior failed bill to overhaul the 1976 TSCA. It seeks to give U.S. EPA authority to address the thousands of chemicals
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
9
already in the marketplace. Among the revisions are new limits on the bill’s preemption of state programs to restrictions
on chemicals that EPA has designated as high priority and commenced a safety assessment — which appears narrower
than the earlier drafts of the legislation.
The bill also makes changes to the previous legislation’s safety standard under which EPA would assess chemical
safety, and establishes new plans for a fee system that would provide funding for implementation.
But some say the bill raises new questions over whether it would fix major flaws in TSCA that many attribute to
EPA’s 1991 failure to ban the chemical asbestos — such as whether the bill’s revised language requiring a cost-benefit
analysis of agency action to ban or restrict a chemical would create similar problems to those in the asbestos case.
Sen. David Vitter (R-LA), who introduced the bill in Washington, D.C., with Sen. Tom Udall (D-NM), said that the
legislation addresses various concerns that a group of senators raised about an earlier version of TSCA reform Vitter
worked on last year. “Every one of those specific areas was address in a substantive way,” he said. “I couldn’t be more
pleased,” though he declined to provide specific examples of how the concerns were addressed.
Udall also touted the compromise legislation and its bipartisan support, as well as various stakeholder groups. “I’m
very proud of what we’ve done. We pulled together attorneys who were interested in access to the courthouse for their
clients, states, EPA, industry, public health and safety and environmental groups. . . . Nobody got everything they wanted.
. . . We pulled people together and developed a product that I think is very, very solid.”
But Boxer, the Senate Environment & Public Works Committee (EPW) ranking member, in a March 10 statement
said that, “Legal experts who have examined the . . . toxics bill at my request tell me this bill is worse than current law.
This means there will be fewer protections from the most dangerous chemicals for communities and families. In addition,
the bill in its current form devastates the role of states in protecting their people, and the sponsors declined to ensure
asbestos and children’s cancer clusters are addressed.”
Preemption looks likely to be another major area of contention for the revised legislation, despite Vitter’s and Udall’s
comments. Boxer in her statement said that the revised legislation “devastates the role of states in protecting their
people,” and fails to ensure children’s cancer clusters and asbestos would be addressed.
The new bill seeks to address preemption concerns, including grandfathering against preemption any state programs
that restrict chemicals that were taken before Jan. 1, 2015 — which appears to reflect fears from Boxer and California
officials over California’s Proposition 65 program — or any state law in effect on Aug. 31, 2003.
The revised bill would also narrow preemption for new state actions to those chemicals for which EPA designates as
high priority and develops a scope for conducting a safety assessment, while existing programs would be preempted only
after a safety determination is completed under section 6, and appears to provide more details on conditions under which
states may receive a waiver from the preemption provisions.
But opponents of the bill say the revised preemption provision would still leave a regulatory “void” under which
state programs would be barred but EPA action would not yet be final, which an environmentalist says “robs the only cop
on the beat of any authority” for a time period that could be at least seven years.
In a March 5 letter to Boxer, California state AG General Counsel Brian Nelson already flagged concerns over the
bill, saying it would create “excessive displacement of states from the promulgation and enforcement of chemicals health
and safety regulations,” including “the preemption of state authority to enact new protections with respect to high priority
chemicals years before federal regulations take effect.”
Carper, a co-sponsor of the bill, in a March 10 statement also hinted that the preemption dispute has not been fully
resolved. “Important progress has been made on this legislation, and must be recognized, but our work is not yet finished.
For instance, I believe we should further examine the ways in which states and the public can review EPA’s chemical
safety decisions, and the role states will play in implementing the new law. I remain confident we can make progress and
find a reasonable compromise as we move this bill through committee and to the Senate floor.”
The environmentalist says “the real test is asbestos,” noting that while the bill would eliminate TSCA’s current
mandate that EPA examine the “least burdensome” alternative to banning a chemical, it would still require the agency to
consider costs and benefits associated with regulating a chemical under section 6 of the law. Critics fear that this could
create hurdles for attempts to use the toxics law to regulate substances of concern.
The early push-back from Boxer and some environmentalists suggests that the revisions to the legislation might have
created further questions and hurdles in the attempt to resolve existing doubts.
The bill, known as the Frank R. Lautenberg Chemical Safety for the 21st Century Act after the late Democratic
senator from New Jersey who advocated for TSCA reform, is the latest effort by Vitter, Udall, Senate EPW Chairman
James Inhofe (R-OK) and others to advance efforts to overhaul the decades-old law.
Efforts to move TSCA reform in the Senate in the 113th Congress stalled in EPW under then-Chairman Boxer, who
objected to what she said were extensive state preemption provisions in earlier bills.
The bill was introduced with the support of Sens. Inhofe, Joe Manchin (D-WV), Tom Carper (D-DE), Roy Blunt (RMO), Chris Coons (D-DE), John Boozman (R-AR), Joe Donnelly (D-IN), Mike Crapo (R-ID), Martin Heinrich (D-NM),
Shelley Moore Capito (R-WV), Heidi Heitkamp (D-ND), John Hoeven (R-ND), Debbie Stabenow (D-MI), and Bill
Cassidy (R-LA) for a total of 14 co-sponsors — 7 Republicans and 7 Democrats in addition to Udall and Vitter.
The version of the bill introduced in the 113th Congress, S. 1009, ended with 23 co-sponsors including Sen. Kirsten
10
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
Gillibrand (D-NY) who has not signed on as an original co-sponsor of the new bill.
Vitter described the latest version of the TSCA reform legislation as a grand compromise. “Republicans agree to give
EPA a whole lot of new, additional authority, which we’re not in the habit of getting excited about, to state the obvious. In
exchange that leads to, once the EPA takes action, a common rulebook” on how chemicals will be regulated. “That leads
to the fundamental nature of a compromise, and I think that’s what has brought Democrats and Republicans on board and
I expect support to grow on both sides” since the bill’s introduction, he said.
“If this piece of legislation can be adopted and put in a position that the EPA can look at the whole field of chemicals,
and start dealing with them, then EPA can start dealing with things like asbestos. . . . There are many chemicals that are
out that have issues and we need an agency to be able to deal with them and that’s what this bill does. I think it reaches
the right balance on preemption,” added Udall. But he said that both he and Vitter would be willing to consider “ideas”
for improving the legislation as the Senate begins its consideration of it.
And Vitter said that “In terms of alternatives, I’d ask those asking questions about asbestos and other things, what is
the alternative to acting in that regard? This is the only realistic model in sight.” — Bridget DiCosmo & Maria Hegstad
ARB’s Nichols Backs EPA Power Plant Rule . . . continued from page 12
regulation would lead to higher electricity prices for Wyoming and adjoining states and predicted stranded investments of
$1.5 billion in his state due to coal fleet retirements.
And Wisconsin’s Public Service Commission Chair Ellen Nowak called EPA’s approach to developing the rule’s
compliance options or building blocks “arbitrary and unsupportable” and said the state expects electricity rate increase in
her state to be in the double digits, and possibly in the “upper 20 percent” of an increase depending on the compliance
strategy for the rule, assuming it survives in court.
State Support
But California Air Resources Board Chairman Mary Nichols and New York Attorney General environment bureau
chief Michael Myers defended EPA’s rule. Myers argued that contrary to critics, EPA’s authority to regulate carbon dioxide has
been affirmed by three Supreme Court rulings. And both officials touted their state’s successes in reducing emissions at little
cost or even net benefit by using investments and other strategies to help lower customers total utility bills.
Myers said EPA’s ESPS plan would build upon emissions reductions to date by New York and other members of the
RGGI, who have already reduced emission 40 percent from 2005 while using investments from that program to keep
power costs in check.
California’s Nichols said the state believes it can meet or even exceed EPA’s targets, and added that the state’s
economy is growing faster than the rest of the country — including a 3.3 percent increase in jobs since the start of
California’s carbon market — despite implementation of the economy-wide carbon program.
Nichols touted benefits from EPA’s rule of $48 billion to $82 billion in net benefits in 2030 and noted that California
has the ninth lowest energy bills in the country. Nichols’ written testimony is available on InsideEPA.com. See page 2 for
details. (Doc. ID: 179638)
Sen. Barbara Boxer (D-CA), the committee’s ranking Democrat, echoed those arguments, inserting into the record a
chart she said shows Californians are paying $20 less per month for electricity than the national average, despite
California’s ongoing carbon program.
And she also pressed Wyoming’s Parfitt on whether he agreed with recent comments from the environmental counsel
for Berkshire Hathaway Energy — which owns generation in Wyoming and other states — urging the state to develop a
compliance plan rather than leave itself at the mercy of a federal plan.
Parfitt declined to characterize industry views on the plan but argued that, as a whole, it does not work for Wyoming.
Inhofe, meanwhile, responded to Boxer by introducing data into the record citing what he said is California’s high
poverty rate as well as migration from California to Oklahoma.
And Sen. Jeff Sessions (R-AL) asked several questions likening EPA’s rule to an energy tax.
Sen. Sheldon Whitehouse (D-RI), a co-chair of the bicameral climate change task force, queried critics of EPA’s rule
on whether there was any measure of climate damages that would trump their concerns about higher electricity rates and
other adverse impacts — a figure the state critics declined to provide.
And he pressed Wyoming about news reports downplaying the state’s willingness to cooperate with Montana on
strategies that could reduce the rule’s cost. Parfitt said in response that the state is engaged in multi-state dialogue with
Montana and others on the rule, but argued that EPA’s plan for crediting renewables does not match assumptions Montana
is using to assess EPA’s rule.
And Democrat Sen. Jeff Merkley (D-OR) asked Nichols to expound on the successes of the existing acid rain trading
program — a program that was being implemented during her tenure as an assistant air administrator at EPA and which
Congress pursued as a model for curbing GHGs before the collapse of the cap and trade effort in 2010 in the Senate.
Nichols said it worked inexpensively and that California voters chose to keep the idea of trading when the state implemented its GHG program. She noted, however, that under EPA’s rule trading is “allowable. It is not required.” — Doug Obey
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015
11
In Rare Accord, Carper Backs State’s Call For Renewable Credits In ESPS
Sen. Tom Carper (D-DE) is calling on states and U.S. EPA to resolve concerns from Wyoming and other states that
export renewable electricity but do not receive compliance credit for the low-carbon energy under the agency’s proposed
rule governing greenhouse gases (GHGs) from existing power plants.
“We ought to be able to reach some common sense agreement on how to deal with that,” Carper said at a March 11
hearing before the Senate environment committee.
His comments marked a rare moment of accord at the hearing, which highlighted the duel between states like
Wisconsin, Wyoming and Indiana — whose officials charged that EPA’s proposed rule represents a threat to the economy
and the power grid — and officials from California and New York who argued that the rule is an opportunity to reduce
GHGs with significant economic benefits.
The proceeding largely showcased prior regional and partisan divisions over EPA’s rule, with California and New
York — states with Democratic governors and existing GHG programs — defending the regulation and Republican-led
states of Wisconsin, Wyoming, and Indiana characterizing it as largely unworkable.
But the hearing also hinted at some potential common ground on tweaks to the regulation, after Carper, whose home
state is a member of the Regional Greenhouse Gas Initiative (RGGI), acknowledged concerns from a Wyoming official
that EPA’s proposed rule appears to give no regulatory credit to Wyoming or other states that export low-carbon renewable energy.
“My understanding [is] you don’t get a lot of credit for that” renewable energy under EPA’s proposal, Carper said in
reaction to testimony from Wyoming Department of Environmental Quality Director Todd Parfitt, who restated state
concerns over EPA’s accounting in the rule for states that export low-carbon renewables.
“The credit I guess goes to California, goes to other [importing] states,” Carper said.
As proposed, EPA’s existing source performance standards (ESPS) says that a state “could take into account all of the
[carbon dioxide (CO2)] emission reductions from renewable energy measures implemented by the state, whether they
occur in the state or in other states.” While many stakeholders are seeking clarification on that point, observers say that
likely would mean exported renewable power in states such as Wyoming could not be used to meet its ESPS target.
The issue has long been a concern for Wyoming officials, who are already suing to block development of the rule and
have long raised questions over how it fails to credit their extensive wind energy production, much of which is exported
to California to help the state attain its renewable energy standards.
Last month, for example, Wyoming Public Service Commission Chairman Alan Minier told utility commissioners
meeting in Washington, DC, that EPA should consider giving credit to both importing and exporting states for “some
period of time.”
The extent to which EPA is receptive — or even legally able to embrace such a proposal — is not clear, given that
such crediting could raise the issue of double counting emission cuts under the ESPS. But a top EPA official recently
suggested that the agency is looking for ways to accommodate coal-heavy Wyoming’s numerous concerns over the rule.
Rare Moment
Carper’s olive branch to Wyoming was one of the few moments of agreement at a generally contentious hearing over
the merits of EPA’s GHG rule.
And the limits of his conciliatory tone were made clear when he expressed exasperation with “cheap, dirty” electricity from upwind states that has complicated his state’s attainment with air quality standards and contributes to sea-level
rise due to related GHG emissions.
“Delaware is the lowest lying state in the country . . . I am not interested in seeing EPA jam anything down your
throats but we need to figure out how to work on this together,” he told states objecting to EPA’s rule.
The committee’s Chairman, James Inhofe (R-OK), a longtime climate skeptic, in his opening remarks called EPA’s
rule a “blatant and selfish power grab” and presented a chart listing 32 states that have expressed opposition to EPA’s rule
including in lawsuits, new laws or resolutions.
Inhofe pressed witnesses to clarify their multiple concerns over issues including the multi-year timeframe it would
take states to submit plans and estimates of electricity price increases under the regulation.
Indiana Department of Environmental Management Commissioner Thomas Easterly said his state is the “most
manufacturing intensive state” in the US and cited a prediction that the rule would hike the state’s electrical costs by as
much as 30 percent.
He said this would result in an increase in GHG emissions due to “leakage” as manufacturers move their production
to less-regulated but less-costly sites in China and India, harming the economy without “measurable benefit.”
Easterly added that his state is considering all options for complying, including the so-called “just say no” approach
where the state fails to submit a pollution plan.
Wyoming’s Parfitt said there is a “wide gap” between EPA’s and the state’s analysis of its ability to attain Wyoming’s
target in the rule. He reiterated his state’s concern over the treatment of power exports, expressed concern that the
continued on page 11
12
INSIDE Cal/EPA - www.InsideEPA.com - March 13, 2015