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Clean Energy Credits Sought for Low-Income Communities

August 4, 2016, Bloomberg BNA Energy & Climate Report
By Michael J. Bologna

Aug. 3 — The Environmental Protection Agency should require states to allocate at least half of all credits available under the proposed Clean Energy Incentive Program to projects in low-income communities, dozens of environmental justice advocates said.

Advocates at the Aug. 3 hearing in Chicago also recommended the EPA adopt a flexible definition of “low-income community,” giving states and tribes wider opportunities to use the Clean Energy Incentive Program (CEIP) to address economic and demographic conditions within their control.

In addition, environmental justice groups called on the EPA to develop rules emphasizing local control and local benefits for renewable projects receiving assistance. Such requirements, they said, would address the difficult legacy of environmental harm suffered disproportionately by Americans living in low-income and minority communities.

“The EPA must ensure that the majority of the jobs and the job-training opportunities created by, or connected to, CEIP-credited low-income projects go to people from the communities they serve, particularly those communities that suffer undue pollution burdens and/or those that are currently or historically economically dependent on the fossil fuel industry,” said Rev. Tony Pierce, president of Illinois People's Action.

The majority of speakers represented environmental, public health, religious and community-based organizations. EPA will be accepting comments on the design features of the proposed incentive plan through Sept. 2.

Voluntary Measures Rewarded

The EPA's proposed Clean Energy Incentive Program (RIN:2060-AS84) rewards states with additional emissions allowances or emissions rate credits for early efforts to comply with the Clean Power Plan, which limits carbon dioxide emissions from the existing fleet of power plants.

While the states are not required to participate, more than a dozen have called on the EPA to finalize the Clean Energy Incentive Program, permitting them to participate.

The incentive program originally was designed to reward investments in wind and solar generation. In June, EPA adjusted the program by adding hydropower and geothermal generation to the criteria of projects eligible for emissions reductions credits.

Eligible projects would be granted two emissions credits for every megawatt-hour of electricity demand reduced through energy efficiency in low-income communities beginning Sept. 6, 2018, and one credit for each megawatt-hour of zero emissions generation for projects that begin commercial operation after Jan. 1, 2020. The EPA also would provide matching credits up to the equivalent of 300 million short tons of carbon dioxide emissions reductions to be distributed to states on a prorated basis.

Cheryl Newton, EPA Region 5's acting deputy regional administrator, acknowledged that the U.S. Supreme Court stayed implementation of the Clean Power Plan, pending judicial review. But Newton said the agency believes it has legal authority to push forward on voluntary components of the plan, including the incentive program.

Low-Income Communities

A huge block of speakers from community organizations and environmental justice groups demanded changes to the incentive program to ensure that at least half the credits go to projects in low-income communities.

“We believe that the final rule should allow at least 50 percent of CEIP credits to go to low-income clean energy projects and that the households that face the greatest boundaries to investments in renewable energy be targeted as the recipients of the project benefits,” said Kelly Nichols, a field organizer for Moms Clean Air Force.

Several speakers focused on the need for a more useful definition of “low-income community” and expressed concerns that some states might limit their programs by applying overly restrictive definitions. The EPA has said states and tribes can use one or more existing definitions from programs offering benefits to low-income communities, but the agency also requested comments for alternative strategies.

Khalil Shahyd, urban solutions project manager for the Natural Resources Defense Council, pointed to four “presumptively approvable” definitions linked to federal programs depicting different facets of the same community. Shahyd suggested the EPA recommend states rely on a definition used by the Department of Housing and Urban Development, saying it was both inclusive and easy to administer.

“[We] recommend that EPA include as presumptively eligible any household receiving federal assistance where program eligibility is set at 80 percent of [area median income] or less (such as Section 8, SNAP and TANF),” Shahyd said. “This approach would also reduce the administrative burden on program providers to verify the income level of applicants, which can be very costly and time-consuming.”

Additional Technologies?

The Business Council for Sustainable Energy, one of the few industry groups to speak at the hearing, expressed frustration with the limited list of technologies eligible for credits under the incentive program.

Carolyn Sloan, the council's manager of federal policy, applauded the EPA's recent addition of geothermal and hydropower to the renewable energy section of Clean Energy Incentive Program, but called on the agency to expand the portfolio of energy efficiency and renewable energy technologies that qualify.

“Specifically, we urge EPA to expand the eligibility to other renewable energy technologies, including biomass, biogas and waste to energy under the renewable energy section,” Sloan said in written testimony to the EPA. “Many states are looking to these technologies as ways to comply with the Clean Power Plan, but may be discouraged from doing so if they are not included in the CEIP.”