The Legislative Role in Potential Interstate Collaboration on the Clean Power Plan

7/1/2015

This brief explores the implications of state legislation as foundational to multistate compliance approaches for the U.S. Environmental Protection Agency’s (EPA) proposed Clean Power Plan.

It examines the role played by state legislatures and offers a checklist of questions about legislative authorities that can be used by policymakers seeking interstate coordination. This document provides examples of “where to look” language in different state statutes that may guide policymakers interested in exploring the potential for interstate collaboration.

Electric LightingState policymakers—driven by the desire to make the electric grid reliable, cost-effective and efficient—have acted on a number of fronts to promote interstate collaboration on energy resource planning and infrastructure development. Since state efforts to reduce carbon emissions are likely to have infrastructure and operational impacts beyond state borders, states may wish to consider a number of existing state policies as a jumping off point for creating a multi-state approach to EPA Clean Power Plan compliance.

Most legislative examples of interstate activity in this area have involved renewable energy credit trading and carbon emissions trading.

States have chosen multi-state approaches since they allow states to meet their policy goals at lower costs. States that can cheaply reduce emissions or build renewable energy can sell their credits to states with higher compliance costs. These states can, in turn, attain credits for less than it would cost them to reduce emissions or build renewable generation themselves. As mentioned earlier, economic modelling has demonstrated that, for most states, a regional approach to the Clean Power Plan will also result in economic benefits and lower compliance costs.

States have created multistate programs either through a formal interstate agreement or by coordinating less formal stakeholder agreements. States can utilize existing multistate programs to meet Clean Power Plan requirements at lower cost. Any degree of collaboration requires planning to reach a consensus or develop common components and tracking systems across participating states. Following are several examples of state policies that could be harnessed to facilitate multistate coordination for Clean Power Plan compliance.

This document originally appeared as Appendix A in “Multistate Coordination Resources for Clean Power Plan Compliance: Sample Documents for Consideration,” released by the National Association of Regulatory Utility Commissioners (NARUC). View the entire publication on the NARUC website.

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