Solar for Low-income Communities and More! EPA’s Clean Energy Incentive Program

UPDATE: Soon after this blog was published, EPA announced it was extending the public comment period deadline from Aug. 29 to Nov. 1, 2016, to afford more time for tribal consultations. This blog has been updated to reflect this change.

Southeastern states may soon have an added incentive for developing energy efficiency and renewable energy resources that directly benefit low-income communities and utility customers. These potential new incentives come in the form of draft federal regulatory language, which the Environmental Protection Agency (EPA) is working to finalize as part of the entire rulemaking process for the Clean Power Plan (CPP).

This program, known as the Clean Energy Incentive Program (CEIP), is an early-action, voluntary piece of the larger CPP aimed at ensuring communities who suffered the negative effects of fossil-fuel energy generation and economically disadvantaged communities see real benefits from increased clean energy development. Although utilities, state agencies, industry, and the general public have all weighed in on pieces of the CEIP in previous CPP related comment period, the current EPA document open for comment will become the official design details for the CEIP.  Comments can be sent directly to EPA (info on how to do that here) and are due by 11:59pm, Tuesday, Nov. 1st.

Below are some key points SACE will include in comments we will submit as part of the comment period.

Low-income Community Solar Projects: SACE applauds EPA for adding solar generation projects that directly benefit economically disadvantaged communities as an eligible CEIP project – meaning these projects can earn CEIP-matching credits from EPA that can be used to lower overall CPP compliance costs for a state. Nearly one-third of all American adults live in a low- or lower-middle-cost housing area, making it all the more important to ensure these growing communities are not left out of the clean energy economy. Some states, like Louisiana, have already put in place policies that incentivize solar projects that serve economically vulnerable or low-income communities. Just last month, the Obama administration announced its own initiative to increase solar access and clean energy savings for all and help clean up the air and lower utility bills for all utility customers.

Southeastern Electric Power Market Map - Tennessee Valley Authority (TVA), Southern Balancing Authority (SBA), Carolinas and Florida Reliability Coordinating Council (FRCC)

Unique Southeastern Electric Power Market: The Southeastern power sector and electrical grid is unique compared to other regions in the country because our area lacks a third-party authority that oversees the power market and control dispatch of generation resources. Currently, about 60% of the U.S. electric power supply answers to a Regional Transmission Organization (RTO). Without this oversight in the Southeast, it is important that all CPP compliance credits are properly tracked and accounted for in order to protect against manipulation of the credit market. (see map to right)

Need for More Low-income Energy Efficiency Projects in Southeast: There is a significant need to jump start investments in home weatherization energy efficiency programs that help economically disadvantaged communities in the Southeast lower needlessly high utility bills. We support EPA’s definition of “commence operation” as it pertains to the point at which an energy efficiency program that serves low-income communities become eligible for CEIP matching credits. However, we believe EPA should further expand this definition to include programs with even earlier commencement dates. Expanding the eligibility date for low-income energy efficiency programs will protect against delayed investments of desperately needed home weatherization that may accompany a later eligibility date.

EPA is moving forward with finalizing these rules despite a Supreme Court ruling that stayed implementation of the CPP until current legal challenges are resolved. Oral arguments in front of a full panel of federal appeals judges will take place in late September of this year. Once that legal challenge is resolved, and the CPP is upheld, states will submit initial compliance plans to EPA for approval. If a state fails to indicate in their initial plan that they will take part in the CEIP, the will be unable to take part in it, period. But, a state may indicate in the initial plan that it will participate in the CEIP and then ultimately decide not to take part in its final compliance plan submitted to EPA. So – there’s really no reason, not to include participation in the CEIP in a state’s initial compliance plan submission to EPA.

Despite the political pushback on the Clean Power Plan popular in some of our Southeastern states, we are hopeful that our states will take advantage of the CEIP, not only to lower CPP compliance costs for their state, but to bring low-cost, clean energy resources to communities who want and need them.

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