Air Pollution Prevention Forum Report to the IOC AP2 Economic Modeling and Analysis March 21, 2002 Tempe, AZ.

AP2 Charter Recommend legislative actions, economic incentives and regulatory policies that will increase the deployment of renewable energy and energy efficiency technologies and programs in the West.

Renewable Recommendations Renewable Recommendations Federal Policies Federal RPSFederal RPS Extend 1.5 cent/kWh PTCExtend 1.5 cent/kWh PTC Fund Public Power IncentiveFund Public Power Incentive “Greenpower” purchase requirement. “Greenpower” purchase requirement. Income tax credits for capital investmentsIncome tax credits for capital investments Funding for R&D and demonstrations.Funding for R&D and demonstrations.

Renewable Recommendations State Policies State Policies RPS or SBC core financial incentivesRPS or SBC core financial incentives State and local tax incentivesState and local tax incentives “Greenpower” purchase requirements“Greenpower” purchase requirements Policies supporting efficient marketsPolicies supporting efficient markets –Net Metering –Transmission Reform –Utility Bill Labeling/Disclosure –Green Tags –Green Pricing Programs

Efficiency Recommendations RESIDENTIAL Efficient Cooling Systems CFL Lighting Energy Star Appliances Appliance Recycling Building Envelope COMMERCIALINDUSTRIAL COMMERCIAL INDUSTRIAL Efficient Cooling Equip Efficient Motors Retro Commissioning Motor Drive Systems Commercial Lighting ( Fans, Pumps, CAir) Efficiency Standards Ind. Transformers Efficient Refrigeration Fuel Switching Commercial Appliances

Modeling Approach ICF/Tellus performed analysis.ICF/Tellus performed analysis. Analysis built on ICF work for MTF.Analysis built on ICF work for MTF. Two models:Two models: –ICF’s Integrated Planning Model. –REMI economic impact model.

IPM Model Engineering-economic production cost modelEngineering-economic production cost model Three regions (Interior West, Ore./W.Id, Ca/Nv)Three regions (Interior West, Ore./W.Id, Ca/Nv) AP2 renewable/efficiency assumptions AP2 renewable/efficiency assumptions Changes in:Changes in: –Renewable energy mix –Fuel expenditures –Electricity expenditures –Emissions –EE technology penetration –Energy efficiency expenditures

REMI Model Outputs of IPM model used as inputs in to REMI Outputs of IPM model used as inputs in to REMI REMI measures economic impacts of renewable energy and energy efficiency measures on regional economy.REMI measures economic impacts of renewable energy and energy efficiency measures on regional economy. Changes in:Changes in: –Employment –Gross regional product –Disposable income

Renewable Results Barriers to renewables development existBarriers to renewables development exist Minimum SO 2 reductions Minimum SO 2 reductions Avoided pollution control costs, Avoided pollution control costs, NOx most significant emission offsetNOx most significant emission offset Financial incentives neededFinancial incentives needed New interregional transmission “not”New interregional transmission “not” 10/20 goal met under “high gas” scenario10/20 goal met under “high gas” scenario Cost of RPS backstop TBD???Cost of RPS backstop TBD???

Efficiency Results Revisions based on preliminary resultsRevisions based on preliminary results Region’s electricity needs reduced by 8%Region’s electricity needs reduced by 8% Substantial cost and energy savingsSubstantial cost and energy savings Small emissions reduction of NOx & PMSmall emissions reduction of NOx & PM CO 2 is a collateral benefitCO 2 is a collateral benefit Project small benefit to region’s economyProject small benefit to region’s economy

Tribal Working Group Renewables Report…Final draft any dayRenewables Report…Final draft any day Energy Efficiency ReportEnergy Efficiency Report –Draft 2-3 weeks out –Final Draft mid-May Coordinaton with ICF/Tellus modelingCoordinaton with ICF/Tellus modeling

Future Schedule IPM modeling revisions, week of March 18 thIPM modeling revisions, week of March 18 th Final IPM report March 31, 2002.Final IPM report March 31, Draft renewable/efficiency report, April 1 stDraft renewable/efficiency report, April 1 st REMI analysis completed April 15 thREMI analysis completed April 15 th 2 nd draft of combined report, May 102 nd draft of combined report, May 10 Final draft report to IOC, June 1Final draft report to IOC, June 1 Final report delivered to WRAP, July 1Final report delivered to WRAP, July 1 Presentation to WRAP, July 22-23, 2002Presentation to WRAP, July 22-23, 2002

Final Report Executive SummaryExecutive Summary WRAP and AP2 Forum and its CharterWRAP and AP2 Forum and its Charter Work of the Forum and Tribal working groupWork of the Forum and Tribal working group Policy Recommendations/Best PracticesPolicy Recommendations/Best Practices –Tribal, state and regional Impacts of RecommendationsImpacts of Recommendations –Energy costs, savings, emissions, economic –State, tribal and regional Appendices: Four (4) reports/Model legislationAppendices: Four (4) reports/Model legislation

Outreach/Implementation WRAP endorsement SIP Guidebook and workshop, August?