AWEA filed comments in the U.S. Environmental Protection Agency’s (EPA) proposed Interstate Air Quality Rule (IAQR) proceeding urging the agency to adopt a rule that will better recognize the contribution of non-emitting energy sources such as wind energy in reducing local pollution.Washington, D.C. – April 15, 2004 [SolarAccess.com] EPA currently regulates sulfur dioxide (SO2) nationally and nitrogen oxides (NOx) in a portion of the eastern half of the country with “cap-and-trade” systems. Under such a system, the state is allocated a certain total level of emissions within industry sectors. A system for allocating and trading emissions allowances is then established so that a company can achieve its (reduced) emission level through a combination of actual emission reductions and/or purchase of reduction credits from other companies that have reduced their emissions below their budget level (the “trade”). The allowances are generally awarded to companies on the basis of fuel inputs-and therefore exclude renewables-except in a few instances where wind and other renewables have been granted allowances from a special state set-aside bank. As the proposed rule is currently written, it would continue to use the cap-and-trade system, expanding the number of states that would be required to regulate NOx. According to AWEA, it would continue to skew pollution control investments in favor of “end-of-pipe controls” because only traditional on-site pollution control investments or the purchase of credits or allowances will be available to help an emitter comply with the regulations. More specifically, AWEA urges the EPA to include language in its final IAQR and supplemental rule to: – Reaffirm the authority of the States to determine the choice of allocation approaches under any proposed Federal NOx cap-and-trade program; – Provide model rules and guidance to States that highlight options available to them to further renewable energy: – by assigning allowances to fossil-fuel and renewable generating units on an output basis (megawatt-hours of energy produced) rather than on the current input-based system (million Btus of fuel input) that places renewable energy and high efficiency combustion at a comparative disadvantage; and – by allowing longer-term allocation assignments, which are important to the need for long-term power contracts and financing needed for capital intensive renewable energy projects; – To the degree that auctions are utilized, some part of the proceeds should flow back to renewable energy plants on the basis of their generation in recognition of their emissions-free characteristics; In addition, AWEA recommended that EPA strongly consider the views of the Ozone Transport Commission (OTC) and many State and local officials who have advocated lower caps for NOx and SO2 emissions than the limits contained in the IAQR. For example, the executive director of the OTC, Christopher Recchia, presented testimony at EPA’s public hearing on February 25, and stressed that: “the NOx and SO2 reductions and timeline proposed in the IAQR are not deep enough to enable states to reach attainment, nor are they soon enough to meet the required deadlines.” AWEA’s comments were the first initiative of a new subcommittee of the AWEA Legislative Committee that is chaired by Kevin Rackstraw of Clipper Windpower. Rackstraw will be working with the subcommittee over the next few months to develop a more comprehensive policy agenda for the Association.