On October 23, 2015, the EPA published its Proposed Federal Implementation Plan (FIP), which includes Model Rules for Emission Trading under the Clean Power Plan.  With the formal publication, the EPA opened a 90 day comment period – which expires on January 21, 2016.  Because the Clean Power Plan and the Proposed FIP could be a key opportunity for Tribes to promote renewable energy and energy efficiency projects on tribal lands, Tribes, intertribal organizations, and other parties interested in tribal energy development should strongly consider submitting comments to the EPA.

As described in our previous blog post, the final EPA rule, proposed federal implementation plan and emissions trading rules reveal several key areas that could positively impact Indian Country and support tribal renewable energy and energy efficiency efforts.  For Tribes, the proposed emission trading schemes also represent another key opportunity to benefit financially from the new Clean Power Plan.  Renewable energy and energy efficiency projects on tribal lands and buildings can seek to obtain emission reduction credits (ERCs) or Allowances from either the state or the EPA (depending on who is running the emissions trading program).  Once obtained, these ERCs or Allowances can then be sold to utilities, power plants, and other power producers that need to meet their emission compliance requirements.  

Based on the current proposals, Tribes might consider the following key questions when developing comments:

• Given that the EPA takes the position that, under the Clean Air Act, states do not have jurisdiction over tribal lands, how will EPA treat state implementation plans – and any state emission trading schemes – that include renewable energy or energy efficiency projects on tribal lands?

• If states do not (or cannot) include tribal lands in their implementation plans, should the EPA develop a nationwide federal implementation plan for Indian Country that effectively allows all tribes to link to other emission trading systems?  

• Can a tribe without affected electricity generation units (EGUs) have the option of adopting an individual implementation plan to manage its own energy efficiency and renewable energy projects, contributions toward the total emission reduction goals for the U.S., and the potential economic benefits achieved through participation in the emission trading platform?

• The proposed emission trading model rules contemplates that only wind, solar, hydro, and geothermal resources can earn credits or allowances.  How should the EPA treat other renewable energy sources, such as biomass, waste to energy, biogas, and storage in the emission trading schemes?

• If the EPA administers the emission trading scheme for the federal implementation plan, how will Tribes be allocated ERCs or Allowances for renewable energy or energy efficiency projects on tribal lands?