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With the final Clean Power Plan (CPP), the EPA provided a Clean Energy Incentive Program (CEIP), a program that states may use at their own option to incentivize early investments in renewable power generation, as well as measures in low-income communities that help reduce rate-payers burdens. On February 9, 2016, the Supreme Court stayed implementation of the Clean Power Plan pending judicial review. While the stay is in place, the CPP is unenforceable. However, the stay does not stop states, tribes, utilities and other stakeholders from continuing to act on climate change. The EPA will move forward developing this action in a way that is consistent with the stay. In the final CPP, the agency laid out the general parameters of the CEIP and stated that we would undertake additional public and stakeholder engagement and seek input before fully developing the design details of the program. In the EPA's proposed Federal Plan and Model Rules, published on October 23, 2015, the EPA proposed CEIP Federal Plan and Model Rule provisions and solicited comment on a number of issues related to design details of the CEIP. On June 30, 2016, the EPA proposed design details of the CEIP for public comment, including some changes to the original CEIP as finalized in the CPP, and re-proposed optional example CEIP rule text for States that choose to incorporate CEIP provisions. When finalized, this action will provide a fully-implementable CEIP, including parameters for eligible programs and projects, matching allocation provisions, conditions on program participation and final optional example CEIP rule text that states may use.

Statement of Need: The Clean Energy Incentive Program (CEIP) Design Details proposal provides a number of details needed for states who opt to participate in the CEIP to consider in the design of their plans. The CEIP was originally included in the final Clean Power Plan (CPP) promulgated in October 2015. The CEIP is a voluntary "matching" program that states can use to incentivize early investment in eligible renewable energy (RE), as well as demand-side energy efficiency (EE) and solar projects that are implemented in low-income communities. The CEIP is anticipated to help reduce the costs of compliance with and smooth the transition to the first performance period of the CPP. The CEIP will encourage the widespread development and deployment of these technologies, which is essential to longer term clean energy and climate strategies and consistent with the Clean Air Act's directive to advance less polluting technologies. Other potential benefits related to the program include jumpstarting clean energy job gains that are anticipated from construction and installation of RE and EE projects under the CPP; providing incentives to follow through on planned investments in zero-emitting wind and solar power in advance of the CPP's first performance period; providing near term health benefits from reductions in other pollutants in addition to carbon dioxide; and leveling the playing field for implementing EE in low-income communities, which has been historically limited by economic barriers, bringing jobs and lower energy costs to consumers in those areas.

Summary of the Legal Basis: The CEIP is an optional component of the CPP that states may adopt as a part of their state plans, and the CPP is an exercise of the EPA's authority under section 111(d) of the CAA, 42 U.S.C. 7411(d).

Alternatives: For the CEIP Design Details proposal, we solicit comment on a number of provisions where alternatives are presented, including how to appropriately set requirements for a definition of ‘low-income', how to maintain stringency under a rate-based plan, what should be considered as eligible RE and low-income community projects for the CEIP and what are the appropriate dates for when an eligible project can begin. We specifically propose that eligible RE projects should be broadened to include geothermal and hydropower in addition to wind and solar; as well as that eligible low-income community projects should include certain types of solar projects in addition to demand-side energy-efficiency projects.

Anticipated Costs and Benefits: Given that the framework of the CEIP has already been established in the CPP Emission Guidelines, the design details proposed in this action are not expected to result in significant costs, benefits or economic impacts, beyond those associated with the CPP Emission Guidelines.

Risks: Due to the voluntary nature of the program, and given that the framework of the CEIP was finalized in the CPP, we do not anticipate any risks to health related to this action.