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States take lead on climate change plans
Throughout Western's territory, municipal, state and Federal agencies are moving forward on drafting plans to address climate change—plans that will have significant implications for our customers. Given that more than 80 percent of man-made greenhouse gas (GHG) emissions in the United States come from burning coal, oil and natural gas, utilities should be prepared for legislation and policies that target their operations. Renewable portfolio standards—now established in 31 states—are an example, and some form of the much-discussed carbon tax could well be the next one facing power providers. New regulations always present challenges for businesses, but they can offer opportunities to those who plan ahead. Admittedly, tracking climate change legislation is a big job for already overstretched public utilities. So Western has put together a brief summary of activities in our territory, including links to more information. Regional partnershipsWest Coast Governors' Global Warming Initiative: Concerned about the consequences global warming will have on the West Coast states, the governors of Washington, Oregon and California approved a series of detailed recommendations to reduce global warming pollution in 2004. Higher goals and greater incentives to increase retail renewable energy sales and more aggressive energy-efficiency measures in state building codes are among the recommendations utilities might expect to see implemented. The governors are also committed to exploring a market-based carbon allowance program and expanding renewable energy and energy-efficiency markets. Midwest Governors' Accord: In November 2007, nine U.S. governors from the Midwest and one Canadian premier agreed to set GHG reduction targets. The accord was reached between Indiana, Illinois, Iowa, Kansas, Michigan, Minnesota, Ohio, South Dakota, Wisconsin and Manitoba. Notably for utilities, the governors agreed to develop a market-based cap-and-trade mechanism to achieve the reductions. The initiative to build a low-carbon transmission infrastructure to supply the Midwest with sustainable and environmentally responsible energy will also be of interest to utilities. Western Regional Air Partnership (WRAP): This collaborative effort of tribal and state governments and Federal agencies is developing technical and policy tools to aid compliance with the Environmental Protection Agency’s regional haze regulations in the West. Working with the Center for Climate Strategies (CCS) WRAP is producing comprehensive GHG inventories and forecasts for nine western states to lay the foundation for ongoing regional collaboration. Western Climate Initiative (WCI): The governors of Arizona, California, New Mexico, Oregon and Washington launched this initiative in February 2007 to identify, evaluate and implement cooperative measures to reduce GHGs in the region, focusing on a market-based cap-and-trade system. British Columbia, Manitoba and Utah have since joined the partnership, with four states and four provinces from Canada and Mexico participating as observers. WCI recently announced its recommendations, which will cover 90 percent of the region's emissions, including those from electricity, industry, transportation and residential and commercial fuel use. State programsArizona GHG Executive Order 2006-13: Climate Change Action: Between 1990 and 2005, GHG emissions in Arizona increased by an estimated 56 percent. Gov. Janet Napolitano and the state legislature responded by establishing a Climate Change Advisory Group (CCAG). The CCAG’s recommendations form the core of this executive order. Arizona’s goal is to reduce GHG emissions to 2000 levels by 2020 and to 50 percent below 2000 levels by 2040. The recommendations mostly target the transportation sector, calling for increased use of biofuels and hybrid vehicles. California State GHG Bill and California Climate Change Portal: The state that produces roughly 1.4 percent of the world’s GHGs, and 6.2 percent of the U.S. total, is actively working on finding solutions to climate change. Assembly Bill 32, the Global Warming Solutions Act of 2006 was the first of its kind in the nation. The California Air Resources Board (ARB) is the lead agency for implementing AB 32, which requires a reduction in GHG emissions to 1990 levels by 2020. Key elements of interest to utilities in ARB’s preliminary recommendations include:
Colorado Climate Project: The Rocky Mountain Climate Organization brought Coloradans together to reduce the state’s contribution and vulnerability to climate change. In its first phase, a Climate Action Panel developed 70 recommendations for reducing GHG emissions and preparing for the changes that may be coming. The state adopted the recommendations as part of its Climate Action Plan in 2007. The plan pushes energy-efficiency measures to reduce demand for electrical energy and lower utility bills; builds on the state’s recently expanded renewable portfolio standard and looks for ways to develop our renewable energy supplies even further. It also proposes creating economic incentives for major utilities and industries to pay farmers and ranchers to sequester more carbon in the soil. Utah State Energy Resource and Carbon Emission Reduction Initiative: Presented in the 2008 general session, this bill provides that an electrical corporation or municipal electric utility maintain a percentage of electricity sold in the form of renewable energy resources. Another provision relevant to power providers is a requirement that utilities plan and report on acquiring renewable energy resources. Climate Action Plans for Kansas, New Mexico, Minnesota and Montana: In addition to working with regional groups like WRAP, CCS has also helped several states in Western's territory develop climate action plans. The plans incorporate policy analyses and recommendations from technical work groups: agriculture, forestry and waste; energy supply; residential, commercial and industrial; transportation and land use; cross cutting issues and cap-and-trade. Only Montana did not have a cap and trade group contributing to its plan. While each plan is different, many recommendations focus on strategies familiar to utilities for reducing consumption and promoting renewables development. Demand-side management (DSM) and energy-efficiency consumer programs, net-metering and interconnection rules and alternative energy development are featured in most of the plans. Some also contain provisions for efficiency improvements and repowering existing powerplants. Being proactiveRather than waiting to see what actions state and Federal governments take, many utilities are voluntarily joining the Climate Registry. The nonprofit organization establishes consistent standards to help businesses and governments calculate, verify and publicly report their carbon footprints in a single, unified registry. In addition to demonstrating environmental leadership, membership in the Climate Registry provides utilities with resources and technical assistance to document their voluntary actions to control emissions. Members will identify and manage GHG risks and opportunities and take part in discussions related to their industry and evolving GHG policy. Best of all, perhaps, utilities gain a competitive edge by increasing operational efficiency. That’s because many of the strategies states will employ to shrink their carbon footprint are already known to Western customers as ways to control costs and keep customers satisfied. Utilities may discover that "climate change plan" is just another phrase for good business. |
Previous issues
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ResourcesWest Coast Governors' Global Warming Initiative Western Regional Air Partnership WRAP GHG inventories and forecasts |
Resources (cont.)California Air Resources Board Rocky Mountain Climate Organization Colorado Governor's Climate Action Plan Utah State Energy Resource and Carbon Emission Reduction Initiative |
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