District Energy - 2005 First Quarter

models from Texas, California and RAP, the state has yet to include a credit for CHP. So as states begin to embrace policies that recognize and encourage more energy-efficient technologies, there is still work to be done to ensure that all usable energy products are fairly credited. Even though CHP systems can be upwards of 80 percent efficient, this efficiency can continue not to be fully recognized in regulation.

Resources for Decision
Makers

Resources to aid regulators and other decision makers on output-based emissions policies are starting to grow. In addition to the model rules and reports mentioned above, this article is based on a larger report, Output-Based Emission Standards: Advancing Innovative Energy Technologies, published by the Northeast-Midwest Institute in 2003 ( www.ne mw.org/output_emissions.pdf). The report addresses the role of output-based regulations in a changing federal policy framework and within state air-quality policies. In addition, it identifies alternative emissions models developed by regional and environmental groups and highlights initiatives abroad.

In August 2004, the EPA released a handbook for state regulators on output-based regulations to assist air regulators in developing emissions regulations that recognize the pollution-prevention benefits of efficient energy generation. The handbook, Output-based Regulations: A Handbook for Air Regulators, provides practical information to help regulators decide if they want to use output-based regulations and explains how to develop an output-based emissions standard. (See www.epa.gov/chp/pdf/output_ rpt.pdf.) The agency has since worked with the Northeast States for Coordinated Air Use Management on an educational effort to demonstrate to the region’s air regulators the benefits of this energy-efficiency and pollution-prevention method.

The movement toward output-based emission policies will continue as decision makers learn more about how electricity generation affects the environment and the opportunities available to incorporate energy efficiency into air regulation. Tracking emissions per kilowatt-hour is a logical next step in monitoring air quality. Since the use of output-based standards is still relatively new, states need to learn from each other how best to integrate those measures into future

emissions-permitting and cap-and-trade programs. Federal direction also will be needed. Regulations must reflect the environmental benefits of more energy-efficient, cleaner technologies. The marketplace is ready for this change.

Susan Freedman is the senior policy analyst for the San Diego Regional Energy Office, an independent, public-benefit, nonprofit 501(c)( 3) organization that provides objective information, research, analysis and long-term planning on energy issues for the San Diego region. She engages in legislative and regulatory affairs at the local, state and federal levels. Freedman was formerly the energy policy analyst for the Northeast-Midwest Institute, a Washington, D.C.-based, nonpartisan regional policy center where she authored the report, Output-Based Emission Standards: Advancing Innovative Energy Technologies, and worked with congressional staff on implementation of output-based approaches. She holds a master’s degree in energy and environmental policy from the College of Urban Affairs and Public Policy at the University of Delaware and has a bachelor’s degree in political science and human and natural ecology from Emory University. Freedman is the Webmaster for the U.S. Combined Heat and Power Association. She may be reached at susan. freedman@sdenergy.org.

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