Carbon Pollution Standards for Future Power Plants 

Dick Munson 

Recycled Energy Development 

24 May 2012 

My name is Dick Munson, and fm senior vice president of Recycled Energy Development, a 

cogeneration and waste-energy-recovery developer based here in Chicago. I had the opportunity 

to participate in EPA's listening sessions on NSPS and have worked with the Alliance for 

Industrial Efficiency to submit comments. 

My basic message is to commend the Environmental Protection Agency for recognizing the 

economic and environmental benefits of efficiency. The Utility MATS sensitivity analysis 

showed a handful of energy-efficiency activities would reduce compliance costs of that rule by 

$I I billion by 2020. The benefits of efficient combined heat and power are equally startling; 

according to the Oak Ridge National Laboratory, aggressive deployment of cogeneration would 

reduce C02 emissions by more than 800 million metric tons per year, prompt $234 billion of new 

investments, and create nearly I million new highly-skilled jobs. My hope is EPA continues its 

efficiency focus in the forthcoming NSPS rules for existing sources. 

Concentrating on efficiency, EPA in recent rulemakings has appropriately changed its metric for 

measuring pollution to an output-based standard. By expressing pollution limits as emissions per 

unit of useful energy output (e.g., pounds per megawatt hour), this approach rewards generators 

with the highest"outpul' of megawatt hours and the lowest"outpul' of pollutants. 

In addition to offering commendations, allow me to make a few suggestions to further enhance 

efficiency in ways that save money and reduce pollution. Take the issue of thermal energy. 

EPA wisely recognized power plants produce two products-electricity and heat. In fact, the 

generation of heat and power accounts for a whopping 69 percent of the nation's C02 emissions, 

almost five times the pollution from all the automobiles on the road. While the agency implicitly 

defined gross output to include thermal energy, EPA should make the availability of a thermal 

credit more explicit, in part by highlighting it in the preamble. EPA, moreover, should not 

arbitrarily limit credits to 75 percent of the thermal output, but instead should encourage the 

efficient generation of both heat and power. Following the example of Thomas Edison, whose 

early power plants sold both electricity and steam to nearby buildings, EPA should support the 

generation of these two products with the efficient burning of a single flame-rather than one 

flame in a turbine or engine to generate electricity and another flame in a boiler to provide heat. 

That can be done by providing credit for I 00 percent of the useful thermal output. 

Another issue is the draft rule's narrow definition ofCHP. While EPA is to be commended for 

recognizing the benefits of efficiency cogeneration and clean waste energy recovery. the agency 

should amend its definition by deleting"steani'as a descriptive term for a CHP generating unit 
since a few cogeneration units use hot oil or other media to simultaneously produce electricity 

and thermal energy from the same primary energy source. I also encourage EPA to follow the 

example of several states and provide separate definitions for CHP and waste energy recovery 

because those two approaches have different attributes and benefits. Finally, the agency should 

set some standards to ensure a CHP unit's efficiency; the tax code, for instance, calls for 60 

percent efficiency and at least 20 percent of the unit's output must be for useful thermal 

applications. 

EPA asked about the wisdom of adopting net-output based standards. Allow me to weigh in 

favorably. By basing output-based standards on net-energy output, facilities would have an 

incentive to minimize parasitic energy demands from pollution- control equipment, and, as a 

result, spur further efficiency. 

EPA also asked about adopting a 5-percent credit for CHP units that avoid transmission and 

distribution line losses. The agency is to be applauded for recognizing a problem that loses 236 

million megawatt-hours of electricity per year, equivalent to the annual consumption of 

California, and costs the U.S. economy some $23 billion annually- yet EPA's 5-percent figure is 

too low. Average line losses are almost 7 percent and exceed 20 percent when wires are at peak 

load. Recent research from Carnegie Mellon University and Massachusetts Institute of 

Technology suggests the grid benefits of distributed CHP range from 20 to 45 percent. While 

there may be no perfect number. it's clear 5 percent is too low. 

In conclusion, EPA is to be commended for highlighting efficiency, output-based standards. and 

cogeneration. Thank you for your consideration of my suggestions to strengthen the rule.