Natural Gas: A Compliance Option for EPA’s Clean Power Plan - July 2015

Report July 27, 2015

With guidance from AGA’s Board, Legislative Committee, State Affairs Committee, Environmental Regulatory Action Committee and Sustainable Growth Committee, AGA has been developing opportunities for promoting the use of natural gas CHP and other direct use applications as compliance options under EPA’s Clean Power Plan a/k/a 111d proposed rule.

As directed by our membership, AGA has not been involved in the debate regarding whether EPA has legal authority to set an emission standard or goal based on what can be achieved outside the fence of affected power plants. Instead, AGA has focused narrowly on advocating to include natural gas CHP and direct use in the states’ optional tool box as cost-effective methods for achieving whatever goal EPA ends up establishing in the final rule.

AGA, along with the American Chemistry Council and American Forest & Paper Association, commissioned David Gardiner & Associates and the Institute of Industrial Productivity to develop a resource document designed for states to use for evaluating whether CHP could be a meaningful and cost-effective component of their compliance plans for achieving whatever goal EPA ends up establishing in the final rule.

The AGA EPA Clean Power Plan Project Steering Committee comprised of representatives from the above referenced AGA Committees was established to provide guidance and feedback to AGA during the development of the resource document. The report from this project, Combined Heat and Power (CHP) as a Compliance Option under the Clean Power Plan: A template and Policy Options for State Regulators can be accessed by clicking on the link provided below.

If the Clean Power Plan (CPP) is implemented in a form close to what has been proposed, this report demonstrates that CHP can be a valuable approach for reducing emissions and helping states achieve their targets. While actual plans will vary dependent upon state-specific factors and determinations, the report provides the tools and methodology that states will need to begin the process. It provides key background information to help states incorporate CHP into their plans and it demonstrates that CHP can be a cost effective option for reducing emissions. The report also provides information on the accountability principles EPA has established for state 111(d) compliance plans, including methodologies for ensuring CHP projects can meet monitoring, evaluation and verification criteria.

chp_pathway_final_7_23_15.pdf1.5 MB