Category Archives: Energy

UCS Says to Add More Renewables to the Clean Power Plan; If It’s Better, Does that Make It Best?

The Union of Concerned Scientists today announced release of a report which attempts to document that the renewable energy energy-renewable-two-workers-installing-rooftop-solar-panels“building block” in EPA’s Clean Power Plan is not sufficiently aggressive. The report argues that, just relying on existing trends and compliance with renewable energy standards, renewable energy can supply 23% of electricity sales nationally by 2030, well above the 12% assumed by EPA. This would translate into a 40% reduction in GHG emissions, rather than the 30% that EPA says the proposed CPP would attain.

I don’t know if… More

Yes, Virginia, It Is Possible To Win A Fee Award Against An Environmental NGO

Last week, Judge Walter Smith, Jr., ordered the Sierra Club to pay more than six million dollars – yes, you read that correctly – to Energy Future Holdings and Luminant Generation, after finding that the Sierra Club’s Clean Air Act citizen suit against them concerning the Big Brown big-brown-coal-plant(great name for a coal-fired facility!) plant was “frivolous, unreasonable, or groundless.”

The Sierra Club had avoided a motion to dismiss, which in the long run was a disaster, because the defendants incurred millions of dollars in discovery and expert witness fees…. More

EPA Refuses to Amend Its Backup Generator Rule: Demand Response Breathes Easier

Last Friday, EPA published notice that it would not be revising its regulations on backup generators in response to three petitions for reconsideration it had received after it promulgated its final rule in January 2013. The rule had sparked controversy, because EPA allowed backup generators to operate for up to 100 hours a year, though EPA did require use of ultra-low sulfur diesel fuel beginning in January 2015.

There were three major issues in the petitions. EPA’s responses addressed them as follows:

• The timing of the requirement to utilize ULSD. EPA rejected arguments that… More

You Can’t Estop the Government — Even When It Wants to Be Estopped

Last week, the 9th Circuit Court of Appeals issued a decision that arguably explains everything from why the Tea Party exists to why otherwise calm and sane executives suddenly lose all their hair. Perhaps most astounding, the decision is clearly correct. Perhaps the law is an ass.

In 2008, Avenal Power submitted an application to EPA for a PSD permit to construct a new 600 MW natural gas-fired power plant in Avenal, California. Although section 165(c) of the Clean Air Act requires EPA to act on such applications within one year, EPA failed to do so.

Subsequently, and before… More

EPA Publishes Final 316(b) Rule: Flexibility for Generators Means Litigation By Environmental Groups

Last Friday, EPA finally published its § 316(b) rule in the Federal Register. As we noted in May, the rule is more significant for what it does not do – require closed cycle cooling – than for what it does.  impinged_herring_732

Indeed, the rule provides a lot of flexibility for generators. It allows several different options for compliance with the impingement requirements. The entrainment requirements, which apply to facilities using 125 million gallons of water per day, will be based on site-specific analyses.

Of course, this very flexibility has… More

The SJC Gives “Great Deference” to the Energy Facilities Siting Board. That’s An Understatement

In two related decisions last week, the Supreme Judicial Court issued three important rulings, and handed the Brockton Power Company one major problem in its long-running effort to build a combined-cycle gas plant in Brockton.

First, in City of Brockton v. EFSB, the SJC rejected all of the challenges by the City of Brockton and certain citizens to the Energy Facilities Siting Board approval of the Brockton Power project.

In a holding that will cheer environmental advocates but strike fear into developers of all stripes, the SJC found that the EFSB’s application of the Commonwealth’s Environmental Justice policy is… More

Still Using Economic (and Safety) Arguments to Reduce Greenhouse Gas Emissions: Massassachusetts Enacts Gas Leak Legislation

As I noted last year, there has been a concerted effort on the part of those fighting climate change to emphasize economic issues in connection with their policy proposals. That post concerned Senator Markey’s efforts to highlight the economic costs resulting from gas leaks. Of course, methane is a much more powerful greenhouse gas than CO2, with a global warming potential of 21.

Now Massachusetts – that leader in all matters progressive – has done something about it. As Governor Patrick announced earlier this week, Massachusetts has enacted H.4164, “An Act Relative to Natural Gas… More

Does Offshore Wind Finally Have The Wind At Its Back? DOI Announces Plan For Largest Auction To Date

Earlier this week, DOI Secretary Jewell joined with Governor Patrick to announce plans to auction more than 1,000 square miles on the Outer Continental Shelf offshore Massachusetts for wind energy development. The auction, which will be implemented as four separate leases, pretty much will follow the form of earlier lease auctions:

• Bidders will be prequalified to participate in the auction

• The auction will include multiple factors, including non-monetary factors

• The winning bidder or bidders will have one year in which to submit a site assessment for the… More

When Is An Agreement Not To Purchase Electricity a Retail Sale? The DC Circuit Strikes Down FERC Order 745

Last Friday, the D.C. Circuit Court of Appeals struck down FERC Order 745, which required that demand response resources be compensated in the same way as traditional generation resources, at the “locational marginal price”, or LMP. Why is this an environmental case? Because use of demand response at times of peak electricity demand substitutes for traditional generation and thus eliminates the emissions that would result from such generation.

The case is Exhibit A for the proposition that law and economics still often don’t play well together. For example, Commissioner Moeller dissented from the issuance of Order 745 as… More

The RGGI Annual Report for 2013: Do We Finally Have a Real Market for Allowances?

Potomac Economics has released the Annual Report on the Market for RGGI CO2 Allowances for 2013. Based on the data in the report, it appears that a functioning market for CO2 allowances is finally developing. What’s the evidence?

• The share of allowances held by investors as opposed to compliance entities increased from 6% to 24% over the course of 2013.

• The volume of allowance futures trading rose from 2 million in 2012 to 76 million in 2013.

• The number of participants in the RGGI auctions increased by an average of… More

D.C. Circuit Affirms EPA’s Utility Air Toxics Rule: An “Appropriate” Rule Need Not Be Justified By Cost-Benefit Analysis

Yesterday, the D.C. Circuit Court of Appeals affirmed EPA’s rule setting limits for emissions of mercury and other air toxics from fossil-fuel-fired electric steam generating units.  The focus of the decision – and the issue on which Judge Kavanaugh dissented – was whether EPA was required to consider the costs that would be imposed by the rule.  EPA said no and the majority agreed.

Section 112(n) of the Clean Air Act required EPA to perform a study of the health hazards related to hazardous emissions from EGUs prior to regulating them.  How was EPA to utilize the results of… More

What’s the Difference Between ExxonMobil and Shell When It Comes To Climate Change? What’s A Trillion Tons (or Tonnes) Among Friends?

Earlier this week, I posted about ExxonMobil’s shareholder disclosure.  The bookend to ExxonMobil’s disclosure is the release of the Trillion Tonne Communique by the Prince of Wale’s Corporate Leaders Group.  The Communique calls for total carbon emissions to be capped at one trillion tons, a level at which the signers have confidence that global temperature increases can be kept at or below two degrees Celsius.

In order to attain the one trillion ton cap, the Communique calls for a transition over the course of the century to planet-wide net zero carbon emissions.  In order to reach net zero… More

ExxonMobil Admits Climate Change Is Real. It also Imposes an Internal Cost on Carbon. Still Not Enough to Get Any Love From the Greens (Interesting Reading, Though)

Last week, in response to shareholder requests that it disclose information regarding how climate change might affect it in the future, ExxonMobil released two reports, one titled Energy and Climate, and one titled Energy and Carbon – Managing the Risks.  They actually make fascinating reading and seem to represent a new tack by ExxonMobil in its battle with those seeking aggressive action on climate change.

The reports do not deny the reality of climate change.  Indeed, the reports acknowledge climate change, acknowledge the need for both mitigation and adaptation, acknowledge a need to reduce fossil fuel use (at… More

Coal Companies, Don’t Look Behind; EPA May Be Gaining on You

As the lawyers among our readers know, the denial of a certiorari petition does not establish precedent.  However, that doesn’t make it unimportant.  Yesterday, the Supreme Court denied cert. in Mingo Logan Coal Co. v. EPA.  The cert. denial leaves in place the decision by the D.C. Circuit Court of Appeals holding that EPA has authority retroactively to withdraw a site specification for a Clean Water Act § 404 permit issued by the Army Corps of Engineers.  As Hal Quinn, President and CEO of the National Mining Association said in response, this leaves a “cloud of uncertainty”… More

The Song Remains the Same: Cape Wind Wins Another Case and the Opponents Declare Victory

Late last week, in Public Employees for Environmental Responsibility v. Beaudreu, Judge Reggie Walton gave Cape Wind and its federal co-defendants an almost across the board victory in a series of challenges by Cape Wind opponents to a variety of environmental decisions made by federal agencies.  We’ll see how many more of these victories Cape Wind can take.  Their opponents certainly aren’t going away.  In fact, the opponents declared victory themselves.

Judge Walton agreed with the opponents on two issues.  First, he found that the Fish and Wildlife Service erred in essentially delegating to the Bureau of Ocean Energy… More

Sold-Out RGGI Auction Triggers Cost Containment Reserve (Which Sells Out, Too)

Last week’s auction of CO2 allowances by the Regional Greenhouse Gas Initiative (RGGI) was the 23rd in the program’s history, but the first auction under the new RGGI rules and reduced cap.  The new rules undoubtedly explain why the auction yielded the highest sales price in RGGI history — $4 per allowance.  Even more notable, it was the first auction where the clearing price was high enough to trigger the cost containment reserve (CCR).  The CCR, which was intended as a safety valve to keep allowance prices from spiking, was introduced in the 2013 changes to RGGI, and last Wednesday’s auction… More

NSR Emissions Projections — Finally, An Area Where It is the Regulated Entity Which Is Entitled to Deference

Last spring, the 6th Circuit Court of Appeals ruled that when power plant owners compare actual emissions to projected future actual emissions for the purpose of determining whether a project is subject to the Clean Air Act’s NSR provisions, EPA may bring an enforcement action if the operator does not “make projections according to the requirements for such projections contained in the regulations.”  At the same time, however, the 6th Circuit made clear that EPA may not “second-guess” the proponent’s projections and that the regulatory scheme does not anticipate “prior approval” by EPA.

On Monday, we learned at least… More

Investment of RGGI Funds Sees Big Returns for States and Consumers

Through the end of 2012, the nine states remaining in the Regional Greenhouse Gas Initiative invested just over $707 million of the proceeds from the RGGI Auctions.  But the impact this money will have in the future is even more impressive.  According to a report released this week, these investments are projected to return more than $2 billion in lifetime energy bill savings to more than 3 million participating households and 12,000 businesses in the region.  Over the lifetime of these programs the states have funded thus far, they will offset a projected 8.5 million megawatt hours… More

EPA May Rely — In Part — on Projects Funded Under the Energy Policy Act to Justify the Greenhouse Gas NSPS. That’s Its Story and It’s Sticking To It

As those following EPA’s efforts to promulgate NSPS for greenhouse gas emissions from new fossil fuel-fired electric generating plants know, EPA has come under fire for basing its proposal on demonstrations of feasibility at projects that have received federal funding or tax credits under the Energy Policy Act of 2005.  Apparently, EPA is sufficiently concerned that they have prepared a Notice of Data Availability to be published in the Federal Register.  The NODA explains why the rule would not violate the Energy Policy Act.

In short (but explained at greater length in its accompanying Technical Support Document):

EPA’s… More

BOEM Gives a Lesson on How Not To Survive NEPA Review

Last week, the Ninth Circuit Court of Appeals agreed with the plaintiffs that the Environmental Impact Statement issued by the Bureau of Ocean Energy Management to support oil and gas leasing in the Chukchi Sea was flawed.  Although the decision was split and the Ninth Circuit’s track record on appeal is less than perfect, I think that they probably got it right.  Moreover, the flaws identified by the court provide a useful lesson to agencies in performing environmental analysis of probabilistic outcomes.

The issue on which BOEM got reversed was its use of a 1 billion barrel estimate of… More

Cape Wind Survives a Legal Challenge to FAA Approval: Is the Opposition Strategy to Play Whac-A-Mole?

On Wednesday, the Court of Appeals rejected a challenge by the Town of Barnstable to the FAA’s “no hazard” determination for Cape Wind.  As background, the same court had determined in 2010 that a prior no hazard determination by the FAA had not been adequately supported.  This time, the FAA did better, in part because the facts on the ground were better.  One significant concern in 2010 had been the potential impact of the turbines on the radar system at Otis Airfield.  However, that concern was largely addressed in the interim by the addition of a digital processor to… More

Governor Patrick Announces Climate Change Preparedness Initiatives: Not Everyone’s On Board

On Tuesday, Governor Patrick announced a series of climate change preparedness initiatives, including about $50 million in funds for a variety of programs.  Before summarizing the plan, I’ll note that Massachusetts appears to have jettisoned “adaptation” as the descriptor for programs designed to mitigate the effects of  climate change.  We are no longer “adapting”.  Now, like the Boy Scouts, we will be “prepared.”  Shrewd call.

The biggest piece of the pie with be $40 million for a municipal “resilience” grant program, the main purpose of which will be to harden energy supply infrastructure, including projects to deploy micro-grids.  There… More

Massachusetts Issues Draft SREC II Regulations: Headed Toward 1.6GW of Solar By 2020?

Last year, Governor Patrick announced a goal of 1.6GW of solar electricity in Massachusetts by 2020; a goal that requires more than 1.2GW of new solar in the next six years.  The Massachusetts Department of Energy Resources has now issued draft regulations for its SREC II program.  The regulations are too complicated to summarize in a blog post, but you can read the details in our client alert.

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One More Update on the GHG NSPS Rule: EPA Has Improved Its Odds of Surviving Judicial Review, But I’m Still, Still, Skeptical

When EPA’s NSPS Rule for GHGs was published in the Federal Register last week, I noted that the rule might be on shaky ground, because an EPA Science Advisory Board work group had questioned the basis for EPA’s decision that carbon capture and storage is feasible technology.  Now it turns out that EPA has provided the work group with some additional information and the work group issued a memorandum last week stating that further review by the SAB is not required.  The work group concluded that “the agency is using the best available science and has conducted… More

Is Renewable Energy At Parity With Fossil Fuels? Not Quite, But Certainly Closer

According to ClimateWire on Tuesday, a Minnesota state administrative law Judge’s recommendation to the state Public Utility Commission may be the first time that a solar project has been declared cost-competitive against natural gas in an open bidding situation.  That might be a little bit hyperbolic, given that Xcel Energy, which would be purchasing the power, has an obligation to significantly increase its solar portfolio and the decision recognized the economic value of the solar renewable energy credits that the recommended winner, Geronimo Energy, would produce.  Nonetheless, if affirmed, it will be an important decision and is certainly… More

Offshore Wind Marches On: Is Momentum Starting To Build?

Those of us with an interest in renewable energy have long wondered if offshore wind would ever reach its promise.  The knots into which Cape Wind has been tied provide an object lesson – and an abject lesson – in how not to incentivize new technologies.  As of now, offshore wind in the United States remains all promise, and no delivery.

Is the future finally around the corner?  Two developments this past week at least give the optimists reason to believe.  First came news that, according the Siemens, Cape Wind’s turbine supplier, construction has in fact begun, allowing Cape… More

RGGI: the Hot New Investment Tip?

In last week’s auction held by the Regional Greenhouse Gas Initiative (RGGI), not only did the allowances sell at $3 — the highest clearing price in four years, other than the June auction’s $3.21 — but a majority of the allowances sold to investors, rather than the large generators of electricity whose carbon dioxide emissions are regulated under RGGI.  Fifty-seven percent of the allowances were bought by commodities firms, traders, and other third parties, marking the first time in RGGI history that an auction garnered such interest and participation from these outside entities. By comparison, 81% of the allowances… More

Just a Hiccup or a Major Obstacle? EPA Science Advisory Board Work Group Recommends that the SAB Review the Science Behind EPA’s Proposed NSPS For Greenhouse Gases

I have posted numerous times in recent years on the importance of the views of EPA’s own science advisors in judicial determinations whether EPA regulatory actions are arbitrary and capricious.  With few exceptions, courts have affirmed EPA when the regulations were supported by EPA’s science advisors, and struck down the regulations when not supported by those advisors.

Now comes word that a work group of EPA’s Science Advisory Board has recommended that the SAB review the science supporting EPA’s proposed New Source Performance Standards for GHG emissions from electric generating units.  In proposing the rule, EPA stated that… More

Man Bites Dog: DOE Issues Electric Motor Efficiency Standards; Everyone Applauds

On November 25, the world was stunned as DOE proposed new energy efficiency standards for electric motors, and no one complained.  The standards will apply to motors from 1 to 500 horsepower and will cost roughly $500 million annually over the expected 30-year life of the rule.  However, they are also expected to save approximately one trillion kilowatt-hours of electricity over that period.  That’s $23 billion in energy costs and 400 million tons of CO2.

What did the relevant trade group, the National Electrical Manufacturers Association, have to say about the rule?

The DOE’s proposed rule on electric… More

The Old Razzle Dazzle Is Not Sufficient: DOE May Not Collect a Nuclear Waste Disposal Fee If It Has No Way to Dispose of the Waste

In an opinion last week surprising only for the shortness of the shrift that the Court gave to DOE’s arguments, the DC Circuit Court of Appeals ruled that DOE may not continue to collect nuclear waste handling/disposal fees from nuclear plant operators when DOE does not have a plausible estimate of the cost to construct and operate a nuclear waste disposal site.

The Court had previously ruled that DOE had violated a statutory obligation to determine annually what the waste disposal fee should be.  It remanded, giving DOE six months to conduct a new fee assessment.  DOE did not… More

More on the Adaptation Front: Comprehensive Climate Planning Is Coming To Boston

If you are still wondering whether municipalities are serious about planning for climate change, the Boston Redevelopment Authority’s announcement this week of its new draft Guidelines for the inclusion of planning for climate change in its Article 80 review (basically the Boston local version of NEPA) might convince you.  While the Guidelines are fairly broad, the accompanying Climate Change Resiliency and Preparedness Checklist gets way down into the weeds.

Over the expected life the of the project, the proponent must analyze how the project is prepared to address extreme weather events, including heat waves, storms, wind, and… More

EPA Issues Revised Draft NSPS for Carbon Emissions From New Power Plants: It’s All About Technology Forcing

Last Friday, EPA reissued its draft NSPS addressing carbon emissions from new power plants.  It’s not actually that different from the prior proposal, which would have required all new fossil-fuel plants to meet a 1,000 lbs CO2/MWh standard.  The new proposal would require new large gas plants to meet the 1,000 lbs/MWh standard, but would relax the standard to 1,100 lbs/MWh for small gas plants and for coal plants.  Coal plants would, in the alternative, have the option of choosing a more stringent 1,000-1,050 lbs/MWh standard, averaged over seven years, if they want the flexibility to attain the more… More

The Atomic Energy Act Preempts Vermont’s Efforts To Close Vermont Yankee: Sometimes, Legislative Intent Is Just Too Clear To Ignore

Last week, in Entergy v. Shumlin, the 2nd Circuit Court of Appeals largely struck down Vermont’s efforts to close Vermont Yankee.  Although three separate Vermont statutes were at issue, and Entergy made both preemption and dormant Commerce Clause arguments, the essence of the case was simply that Vermont sought to require explicit legislative approval for Vermont Yankee’s continued operation.  Dismissing various proffered rationales for Vermont’s scheme, the Court concluded that the legislation was a poorly veiled attempt to end nuclear power generation in Vermont in response to public concerns about reactor safety and environmental issues.

At some level, the… More

Making Economic Arguments to Reduce GHG Releases: Senator Markey Releases a Report on Methane Leaks From Gas Distribution Lines

Two years ago, when I participated in a D.C. fly-in with a renewable energy group, we were instructed not to use the words “climate change.”  Instead, we were told to focus on “growing the clean energy economy.”  The push to frame the climate debate in economic terms continues.  This week, Senator Markey released a report asserting that, in Massachusetts alone in 2011, 69 billion cubic feet of natural gas was released from gas distribution lines.  The economic cost to consumers of this “lost gas” was put at between $650 million and $1.5 billion from 2000-2011.

Senator Markey is not… More

One Step At A Time Is Just Too Late: The DC Circuit Strikes Down EPA’s Deferral of GHG Regulation of Biomass Emissions

On Friday, in Center For Biological Diversity v. EPA, the D.C. Circuit Court of Appeals struck down EPA’s rule deferring regulation of GHG emissions from “biogenic” sources.  EPA had promulgated the rule, delaying regulation of emissions from biogenic sources from July 20, 2011, to July 21, 2014, on the ground that the carbon cycle is sufficiently complex that EPA is not yet in a position to judge what the actual carbon impact of different biogenic sources might be.  In fact, the record before the Court indicated that EPA believes that some biogenic sources may on net reduce GHG levels… More

MassDEP Proposes Amendments to CO2 Budget Trading Regs to Implement RGGI Program Changes

On Friday, MassDEP released for public review and comment draft amendments to the CO2 Budget Trading Program regulations.   These amendments are designed to implement the changes to the Regional Greenhouse Gas Initiative (RGGI) agreed to by the RGGI states earlier this year as part of the 2012 Program Review.

As Seth previously discussed, the major change is a new cap that reduces the baseline budget of allowances for 2014 by 45%, with additional 2.5% reductions in the years 2015 through 2020.   The reduction is designed to address the significant excess supply… More

The President Issues His Climate Action Plan: Not Much Mention of Congress

President Obama yesterday released his Climate Action Plan, together with a Memorandum concerning EPA’s issuance of rules governing carbon emissions from new and existing power plants under the Clean Air Act.  At a certain level, there is not much new here.  The mere existence of the Plan and the commitment to address climate issues is presumably the point.

The Plan does not provide many specifics.  The Memorandum does provide specifics regarding the issuance of new source performance standards.  EPA is directed to issue a new proposal by September 20, 2013.  That’s not a lot of time, so EPA… More

The Supreme Court Agrees to Review the CSAPR Decision: Might EPA Avoid Version 3 of the Transport Rule?

The Supreme Court today granted certiorari in EPA v. EME Homer City, the challenge to EPA’s Cross-State Air Pollution Rule, or CSAPR.  The Court of Appeals for the District of Columbia had struck down the rule, over a fairly blistering dissent from Judge Judith Rogers.

Speculation over the reasons why the Supreme Court takes a case is often pointless, but I will say this:  Consideration of the history of EPA’s rulemaking leads to the conclusion that the rule should be upheld.

The D.C. Circuit struck down EPA’s original transport rule, known as CAIR, in 2008, in North… More

Is the Offshore Wind Market Really Ready to Fly? BOEM Announces First Lease Auction for July 31

On Tuesday, the Bureau of Ocean Energy Management announced that the first auction of leases of offshore wind areas will be held on July 31.  Even though it now looks as though Cape Wind will eventually get to the finish line, this competitive lease auction, for areas off the coast of Rhode Island and Massachusetts, can really be seen to mark the true beginning of an offshore wind market.Map of the Rhode Island and Massachusetts Lease Areas

The formal notice contains substantial information – much more than can be… More

Boston Joins the Building Disclosure Bandwagon: Ordinance Will Require Reporting in 2014

On May 8, the Boston City Council approved an ordinance requiring building owners to report annual energy and water use.  The final ordinance is slightly different from the one about which we posted in February.  Highlights include the following:

Building owners subject to the ordinance will have to report on May 15 of each year:

The previous calendar year’s energy and water use of each building and other building characteristics necessary to evaluate absolute and relative energy use intensity.

Non-residential buildings of at least 50,000 square feet would be required to report beginning in 2014.  Non-residential buildings… More

Massachusetts Releases Its Revised Solid Waste Master Plan: Are We Really on a Pathway to Zero Waste?

On Tuesday, MassDEP announced release of its updated Solid Waste Master Plan, subtitled “Pathway to Zero Waste.”  The Plan’s most significant discussion relates to the state of the solid waste market and the Plan’s goal for disposal reduction.  The Plan announces a goal of reducing solid waste disposal by 30% from 2008 to 2020, from 6,550,000 tons to 4,550,000 tons.  However, the Plan acknowledges that, even if that ambitious goal is met, there will still be a shortfall of 700,000 tons in solid waste handling capacity in Massachusetts.

This is where the Plan’s controversial modification of the existing… More

Coming to a Steam Electric Generating Plant Near You in May 2014 — New Effluent Limitation Guidelines

Last Friday, EPA announced release of its draft proposal to revise the effluent guidelines and standards for the steam electric power generating industry, last revised in 1982.  The proposal was in conformance with a litigation settlement with environmental groups, which also calls for a final rule by May 22, 2014.

The proposed rule actually sets out four different regulatory options, and they are sufficiently complicated that EPA’s Fact Sheet on the proposal does not even attempt to summarize them.  For that reason, I provide here the Executive Summary of the proposed rule, which does summarize the… More

California GHG Auction: Some Anecdotal Evidence of the Cost of Regulatory Uncertainty?

The California Air Resources Board just released the results of its second auction of GHG allowances.  While the auction for vintage 2013 allowances was still healthy, with all allowances sold at $13.62/allowance, the future auction, for vintage 2016 allowances, did not fare so well.  Fewer than half the allowances sold, and the clearing price was CARB’s reserve price of $10.71/allowance.

Why the disparity?  It’s significantly above any reasonable discount rate.  Could it be that uncertainty about the future of the allowance program might depress prices in the out years?  Given the fits and starts with which carbon regulation has… More

Building Energy Reporting Comes To Boston (Almost)

Today, Mayor Menino forwarded to the Boston City Council proposed amendments to the City of Boston Code that would require owners of many city buildings to report their energy and water use annually.  That information would then be made available to the public – presumably so that the market can work its magic and informed consumers can put pressure on building owners to increase the efficiency of their buildings.

Key aspects of the proposal include the following:

Non-residential buildings of at least 50,000 square feet would be required to report beginning in 2014.  Non-residential buildings of at least 25,000… More

Combine New Gas Plants, Lower Gas Prices, and More Stringent Emission Controls and What Do You Get? Lower Emissions

ISO New England has just released its Electric Generator Air Emissions Report for 2011.  The bottom line?

Total emissions of NOx, SO2, and CO2 have decreased by 12.1%, 29.5%, and 10.2% from 2010 to 2011 Emission rates for NOx, SO2, and CO2 have decreased by 8.7%, 25.8%, and 5.9% over the same time period

As our observant readers will have inferred, ISO reports that total energy generation was down by 4.6% from 2010 to 2011.  ISO attributes most of the emissions decrease to an increase in gas-fired generation and a corresponding decrease in coal- and oil-fired generation.  According… More

RGGI Ratchets Down the Cap: We’re Still Going to Have to Adapt

It was a busy week on the climate change front in Boston.  First, RGGI announced a new Model Rule.  Under the new Model Rule, summarized here, the 2014 cap would be reduced by 45%, from 165 million tons to 91 million tons.  Because such a sharp decrease in allowances will be expected to cause an increase in allowance prices, RGGI has now provided a safety valve, known as the cost containment reserve.  The CCR will make additional allowances available – 5 million allowances in 2014 and 10 million allowances thereafter – if the price exceeds a trigger, which… More

EPA Splits the Baby on Backup Generators: Still Allows 100 Hours Use, But Now Requires Ultra Low Sulfur Diesel

Yesterday, EPA finalized revisions to the National Emissions Standards for Hazardous Air Pollutants for stationary reciprocating internal combustion engines, or – one of my new favorite acronyms – RICE.  The biggest dispute over the rule was the extent to which it would allow backup diesel generators to run for demand response purposes.

As we had noted previously, EPA proposed last May to allow backup generators to run for up to 100 hours for demand response purposes without being subject to emissions limits.  Both the Electric Power Supply Association and environmentalists raised concerns about allowing such extensive use of… More

Can Wind Energy Serve As Baseload Power? The First Circuit Agrees with the NRC That, For Now, The Answer Is “Not Yet.”

In an interesting decision issued last Friday, the Court of Appeals for the First Circuit, in Beyond Nuclear v. NextEra Energy Seabrook, affirmed the decision by the NRC rejecting a challenge to Seabrook’s relicensing posed by a coalition of environmental groups.  The decision seems clearly correct, but raises an important policy issue that is likely to recur as renewable energy technologies advance, so seemed worth mention.

The issue in the case was that the environmental groups, known collectively as “Beyond Nuclear,” contended that the relicensing proceeding should include wind… More