# UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

# WASHINGTON , D . C . 20460
OFF I CE OF AIR AND RAD I ATI O N 

# MEMORANDUM Subject: From: To: S umm a r y of Stake ho ld e r Meetings Car i ssa C y r an D ocke t s E P A-HQ - OAR - 20 1 3 - 0602 , E P A -HQ-O A R- 20 13-0603, a nd EPA-1-IQOAR-2013-0495 This memorandum s umm arizes meetings with stake hold ers during th e week of Ma rc h 23, 2015. On Marc h 24 , Act in g Assista nt Ad mini s trator for Air and Radiation Jan et McCabe m e t w ith S u e K e ll y , Pr es i dent and CEO fo r Ame ri can Public Power Assoc i at i o n. On March 24 , Assoc i ate Ass i stant Ad mini strator for C lim ate and Sen i or Co un se l for A ir and Radiation Joseph Goffman m e t w ith r ep resentat i ves f r om the National Energy and Uti lit y Affo rd ab ili ty Coa liti on. Sign -in sheet attached. On March 25. Administrator Gina McCa11hy spoke w ith N ic k Ak in of Amer i ca n E l ec tri c P ower. On March 26 , Assoc i ate Ass i stant Adm ini strator for C lim ate an d Se ni or Co un sel for Air and Radiation J oseph Goffman met with represe n tat i ves f r om the Indu strial E ner gy Co n sume r s of A m e ric a. Sign - in sheet a nd h a nd outs are attached . On Ma rch 26. Associa te Assistan t Administrato r fo r Clima te and Senio r Cou n se l for A ir and R a di at i o n J oseph Goffman m e t wi th rep r esen tati ves fro m Western R eso urce Advocat es. S i gn- in s h eet attached. On March 27 , Assoc i ate Ass i s ta nt Adm ini s tr ator for C lim ate and Sen i or Co un se l for A ir a nd R a di a tion J osep h Goffman met with r ep resentat i ves from Genera l E lectric's E n e r gy Financial Services team r egardin g the Ho mer Cit y faci lity a nd the C l ea n Po we r Pl an . Sign- in s h ee t attached.

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# Date: Ma r c h 26 , 2015 Meet in g : IECA Meeti n g Re : EPA's C lean Power P lan



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# IECA/EPA Meeting Joseph Goffman, Associate Assistant Adm i nistrator 

# & Senior Counsel EPA Proposed Clean Power Plan March 26, 2015 Key Points : 

# 1 . IE CA does not oppose action to reduce GHG emissions so long as it is cost - effective . Primary concerns with CPP are related to costs, precedent setting and potential reliability problems . 2 . Reduce competitiveness impact to manufacturing! a . More time is needed to comp ly and keep costs low . b . Remove 2020 interim target. c . More time to develop and submit SIPs. d. Use 2005 as the baseline. e . With more time to comply, reliability concerns diminish. 3. Significant linkages of three major issues: a. Specifically include lan guage that makes it clear that "out-side the fence - line " EGU regulation does not set precedent for the indust rial sector. Support manufacturing jobs. Manufacturing has a proven history that it can reduce GHG intensity without regulation. b . "Ratab le " versus "mass - based" emiss ion reductions . (Growth versus no - growth.) With a mass-based policy re-shoring will not co ntinue and industrial GHG leakage will become the norm, like in the EU . c . Educate states on Energy Intensi ve Trade Exposed (EITE) GHG leakag e issues. • Include sectio n in final rule that addresses implications of industrial GHG leakage , a federal recognized GHG policy issue. • Complete a study on the impacts to EITE industries. Do annually. • Complete border adjustment study. Evaluate so lution s. Create industry advisory group . • Acknowledge GHG emissions via industrial imported goods. Two thirds of imports are from C hina. If we cannot produce them here, higher GHG content product will be imported. 4. Industrial energy efficiency. a. Make clear that industrial electricity-related energy efficiency GHG reductions or avoided emissions should be credited to the industrial. b. GHG reductions and avoidances shou l d not lower the industria l company baseline .

# c. Indu str i a l e nergy efficiency cred i ts so ld to EGU entities to comply with CPP, mu st be vo lun tary . d. Do not impose I SO 50001 certification . e. Demand response: Credited to t h e in dustrial. f. M easurement and verificati on , a state responsib ili ty. 5. Indu stria l CHP/WHP: (bo th ex istin g and new facilities) . a. Should be classi fied as a n "eligible compl ianc e option " . b. For CHP , a ll ow ind u str i al CHP air emission permits budgets to a ppl y agai n st the EGU em i ssion budget , provide full t h e rm a l cred i t and incr ease line lo ss credit.

# EPA's Clean Power Plan: "Industrial Perspective" March 26, 2015 Paul N. Cicio President Industrial Energy Consumers of AmericaIndustrial Energy Consumers of America

• The Industrial Energy Consumers of America is

an association of leading non-partisan manufacturing companies with

$1 trillion in annual sales. More than

1.2 million employees.

• Focused exclusively

on availability,

use and cost of energy , power.

• IECA membership represents a diverse set of mostly energy-intensive industries including: steel, iron

ore, aluminum, commodity and specialty chemicals, fertilizer, paper, refining, food processing, glass, cement
and plastics. '
2ManufacturingisImportanttoU.S.Economy•Contributed$2.09trilliontotheeconomy,upfrom$1.73trillionin2013.•12.0percentofGDP.•Supports17.6millionjobs,oneinsixprivatesectorjobs(12milliondirector9percent).3''Manufacturing's Multiplier Effect

For every one dollar- returns $1.35 in indirect economic activity Manufacturing 1 I I I $1.35 Agriculture, Forestry, Fishing, and Hunti n g $1.20
Const ruction 0 ·97 Transportation and Warehousing Information **~** $1'95 $0.88

1 I I I

Arts, Entertainment

, Recreation, Accomodation

, and Food Services I I I $0.84

Mi nin g Government Other Services, Except Governme nt Educational Services, Health Care, and Social Assista n ce Finance , Insurance, Real Estate

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**~** $0.63 Wholesale Trading J so.58 Retail Trade Profe ss ional and Business Services Util iti es 1 $0.55 I

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. 2 Source: Bureau of Economic Analysis, 2010 Annual Input -O utput Tables 4A Success Story: Industrial Energy Consumption has been Relatively Flat for 44 Years

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# -A Success Story: Industrial Sector- Only Sector with Lower C02 Emissions than 1973

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### Global Industrial Sector, 2011 Country Australia Mexico Canada Korea Japan Russia India EU U.S. China Manufacturing

- Va l ue Added ($Billions) Manufacturing Industries and Construction (Million to n nes of C02)

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·- 1Manufactured Products Trade Deficit Offers Huge Economic Growth & Jobs Opportunity

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Source: En e rgy Inf o rm atio n Ad mini st r ation
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__ . :: " 10The Energy-Intensive Industrial Sector is Unique

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an environiTient of unfair co1npetition I Other countries subsidize energy and Inanufacturing.

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## Energy Price Sensitive Products

are Essential for Economic Growth Building Blocl< Industries Chemicals Plastics Fertilizer
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• Pulp and Paper

• Cement • Food Processing Convert to • • • • • • • • • • Commercial & Consumer Products Food Production Automobiles Consumer goods Construction Medical Supplies Energy Production Appliances Household products Defense industries Telecommunication u

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% - Increase in gas costs versus coal +233% Coal GasCC Gas Steam Gas Peaker 20ThankYou!IndustrialEnergyConsumersofAmerica1776 KStreet,NW,Suite720Washington,DC20006202-223-1661r;>cicio@ieca-us.org21

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