Utilities seek workaround to broaden CO2 trading options

The Electric Power Research Institute is doing preliminary modeling on how states that pick different kinds of carbon-trading systems under the Clean Power Plan might be able to link those systems.

EPRI is looking at whether states that cap emissions could trade with states that aim for an average rate of emissions while still achieving U.S. EPA's carbon-reduction goals.

EPA has said it will prohibit states that pick a mass-based target from trading with states that pick a rate-based target, but many utilities hope the agency could revise that stance.

In a presentation at the ENV-VISION conference last week in Washington, D.C., Vic Niemeyer, a senior technical executive with EPRI, said a number of utilities, including Oglethorpe Power Corp. and Southern Co., would like EPA to consider developing a way for the two types of trading systems to mesh.

"The people who are proposing this are not trying to make a buck," Niemeyer said. "They're worried about being boxed in."


Based on early modeling, EPRI concluded this could make it cheaper for utilities that want to enter into cross-state carbon-trading systems to comply with the Clean Power Plan.

"After spending three months thinking about this, simulating this ... this seems to be a viable thing to consider," Niemeyer said.

At the EPRI conference, some expressed concerns that allowing trading between rate- and mass-based states would mean fewer total emissions reductions — this is why EPA instituted the restriction in the first place.

Niemeyer acknowledged allowing rate- and mass-based states to trade with each other "does have an impact on total CO2," but he argued it was a modest increase under the models EPRI has run so far.

Today in San Francisco, the Institute for Policy Integrity at NYU School of Law and the Center for Law, Energy & the Environment at Berkeley Law host a discussion on legal challenges to the Clean Power Plan.

Tomorrow, the Minnesota Pollution Control Agency will hold a webinar on modeling on Clean Power Plan options, from the Bipartisan Policy Center and the American Wind Energy Association. MPCA will hold an in-person meeting on May 24.

On Wednesday, the North Carolina Energy Policy Council will meet in Raleigh. E4 Carolinas President David Doctor will speak about a clean energy stakeholder engagement process.

On Thursday, the American Council for an Energy-Efficient Economy will hold a webinar on energy savings possibilities for the industrial sector. The Regulatory Assistance Project will host a webinar on designing and managing carbon markets.

In case you missed it:

  • The Salt Lake Chamber of Commerce is pushing for efficiency and clean energy investments, despite Utah's lawsuit against the Clean Power Plan (OnPoint, May 10).
  • Kansas is barring state agencies from moving forward on the rule (ClimateWire, May 10).
  • Ahead of next month's showdown, lawyers previewed their courtroom arguments in a Chicago classroom (Greenwire, May 9).



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