On Tuesday, EPA issued a Notice of Data Availability, requesting further comment on some specific issues that have been raised since it published its draft Clean Power Plan in June.  My immediate reaction?  My head hurts.

I don’t mean to trivialize the implementation issues that would likely arise if Congress enacted either a cap-and-trade system or a carbon tax, but they’ve got to pale in comparison to the Rube Goldberg-like system that’s going to be in place once EPA promulgates a final rule.  This is not meant as a criticism of EPA.  To the contrary.  The agency has to know that it’s not going to get any credit from the right for any improvements that it makes to the Clean Power Plan.  Thus, the only explanation for all the agency’s efforts, including this NODA, is that they really want to get this right and have the ultimate plan be as cost-effective as possible, given the serious constrains under which they are operating.

That being said, I’ll briefly discuss just one issue raised in the NODA.  The state targets proposed in June are based on two arguably inconsistent assumptions.  With respect to Building Block 2, increased use of natural gas combined cycle generation, the proposal assumes that increased NGCC generation will replace older fossil fuel, i.e. coal, generation.  However,  with respect to Building Blocks 3 and 4, increased use of renewable energy (RE) and energy efficiency (RE), EPA assumes instead that RE and EE simply add incrementally to baseline generation, rather than displacing such generation.

In the NODA, EPA is now asking for comment regarding whether it should assume that RE and EE displace existing baseline generation and, if so, should it assume that RE and EE replace all existing generating sources pro rata or that RE and EE preferentially replace coal first.  As EPA has acknowledged, if the rule assumes that RE and EE replace baseline generation, rather than adding to it, the result would be to reduce GHG emissions, thus leading to more stringent state reduction targets.

I’m not sure I know the answer, but I admit I don’t see a reason for treating generation from RE and EE any differently than generation from NGCC.  In any case, keep those comments coming into EPA.  It appears that the agency really wants to know what you think.