Proposed Rule for Clean Energy Incentive Program (CEIP) Design Details



On June 30, 2016, USEPA published in the federal register proposed design details for the Clean Energy Incentive Program (CEIP) as part of the Clean Power Plan.

The EPA describes the CEIP as a "voluntary matching fund program that states can use to incentivize early investment in eligible Renewable Energy (RE), as well as demand-side energy efficiency projects that are implemented in low-income communities."  As such, states will receive matching CO2 credits from the EPA as an incentive for completing certain projects before the Clean Power Plan target CO2 reduction date of 2022 (See below for further details on possible delays in implementation).

The Clean Power Plan already lays out the basic structure of the CEIP, with this new proposal adding the following specifics on how the program will work.

  • The CEIP establishes a pool of 300 million short tons of CO2 allowances for participating states.  This rule proposes that the 300 million allowances be separated into 150 million allowances for renewable projects and 150 million allowances for low income community energy efficiency projects.
  • Note:  The Clean Power Plan already establishes that renewable energy projects will receive 1 credit for 1 MWh of generation and low income community energy efficiency projects receive 2 credits per MWh saved.  The CEIP is a matching program, so a 1/2 credit from the state will be matched with a 1/2 credit from the EPA to get the total of 1 credit in the case of RE projects.
  • Proposes solar energy in low income communities be eligible for double the credit.
  • The rule proposes a timeline for projects eligible for the matching credits.  Renewable energy projects that commence operation after January 1, 2020 and low income community projects that begin operation after September 6, 2017 would be eligible for the aforementioned credits.
  • The Clean Power Plan establishes wind and solar as the only eligible renewable technology eligible for credits.  This proposal adds geothermal and hydropower to the list of eligible technologies.
  • Proposes four different definitions of a "low income community".  This definition will be finalized after the comment period and public hearing.
  • Each state will be eligible for a portion of the 300 million matching credits as shown in Tables 1 and 2 of the proposal.

Keep in mind that the Supreme Court stayed the implementation of the clean power plan on February 9, 2016.  The Washington, D.C. Court of Appeals is scheduled to hear the case against the plan in September of 2016.  Despite the setbacks with the CPP, the CEIP is an optional program, so EPA believes that it can stand on its own ground.  The dates proposed in this rule are subject to change depending on the outcome of the Clean Power Plan hearing.  For more information, contact your local Trinity office at (800) 229-6655.