ProposedCLEAN POWER PLANReducing Carbon Pollution FromExisting Power PlantsCalifornia Environmental Dialogue - PlenaryAnita Lee, Air Division, US EPA, Region 9July 23, 2014Outline•Summary of Proposal•Background on Clean Air Act Section 111(d)•Pre-proposal Outreach & What We Heard•Setting State Goals•State Plans for Meeting Goals•Costs and Benefits•Next Steps2•Reduce carbon pollution from existing power plants, for which there arecurrently no national limits.•Significant reductions achieved over a glide path beginningin 2020.•By 2030, reduce nationwide carbon dioxide (CO2) emissions, from thepower sector by approximately 30% from 2005 levels.•Build on actions states, cities and businesses across thecountry arealready taking to address the risks of climate change.•Provide an array of tools states can use to formulateapprovable plans.•Maintain an affordable, reliable energy system.•Spur investment in cleaner and more efficient technologies, creatingjobs and driving innovation.•Recognize that investments in infrastructure can take time to put inplace and avoid stranded assets.3Summary of ProposalCarbon Pollution and Health•Public health risks include:•Increase in heat stroke and heat-related deaths•Extreme heat events are the leading weather-relatedcause of death in the U.S.•Worsening smog (also called ground-level ozone pollution) and, in somecases, particle pollution•Increasing intensity of extreme events, like hurricanes, extremeprecipitation and flooding•Increasing the range of insects that spread diseases such as Lyme diseaseand West Nile virus.4Actions to Reduce Carbon Pollution•Building a 21stcenturytransportation sector•Cutting energy waste in homes,businesses, and factories•Reducing methane and HFCs•Preparing the U.S. for the impactsof climate change•Leading international efforts toaddress global climate change•Reducing carbon pollution frompower plants5Reducing Carbon Pollution From Power PlantsPresident’s Directive to EPA:Develop carbon pollution standards, regulations orguidelines, as appropriate, for:1. New power plants•Proposed: January 8, 20142. Modified and reconstructed power plants•Proposal: June 2014•Final: June 20153. Existing power plants•Proposed Guidelines: June 2014•Final Guidelines: June 2015•State Plans due: June 20166Background: Clean Air Act Section 111(d)Best System of Emission Reduction7•Previous EPA rules under this section of the Clean Air Act haveconsidered “add-on” control technologies – like scrubbers -- that aretechnically feasible to deploy at virtually any facility.•In contrast, there are a wide variety of ways to reduce carbon pollutionthat are commercially available, technically feasible, and cost effective.•The opportunities vary from state to state, depending on how electricityis generated, energy infrastructure, and other factors.•In this proposal, EPA took an approach that viewed the Clean Air Actfactors in determining Best System of Emission Reduction in light of theinterconnected nature of power generation.•BSER factors•Costs•Size of reductions•Technology•Feasibility•EPA conducted a robust pre-proposalstakeholder engagement process.•Participated in meetings with over 300 utility,consumer, labor and environmental groups since June2013.•Held 11 public listening sessions around the country.•3,300 people attended.•More than 1,600 people offered oral statements.•Reached out to all 50 states.•Some states noted their programs to address carbonevolved because of:•The need to address carbon pollution;•Electric system that is dynamic, and in the midst ofmarket changes; and•Modernizing the power sector is good for the economy.•Common themes included reliability, flexibility,affordability, time for plans andimplementation.8Early Outreach Informed This ProposalStates and Communities withPrograms That Reduce Carbon PollutionState programs that reduce carbon includecarbon cap and trade programs and energyefficiency and renewable energy standards orgoals.9EPA Establishes a Goal for Every State•EPA analyzed the practical and affordable strategies that states and utilities arealready using to lower carbon pollution from the power sector.•Proposed goals are based on a consistent national formula, calculated with stateand regional specific information.•The result of the equation is the state goal.•Each state goal is a rate – a statewide number for the future carbon intensity ofcovered existing fossil-fuel-fired power plants ina state.•Encompasses the dynamic variables that ultimately determine how much carbonpollution is emitted by fossil fuel power plants.•Accommodates the fact that CO2emissions from fossil fuel-fired power plantsare influenced by how efficiently they operate andby how much they operate.•The state goal rate is calculated to account for the mix of power sources in eachstate and the application of the “building blocks”that make up the best systemof emission reduction.•States will need to meet an interim goal and a final goal.10States Have FlexibilityBasis for state goal–Potential emissionspathway reflectingEPA’s analysis2020 2021 20222023 2024 20252026 2027 2028 2029A state can choose any trajectoryof emission improvement as longas the interim performance goal ismet on average over 10 years, andthe final goal is met by 203011

Carbon emissions from affected power plants in an example stateAs an example, states could do less in the early years, and more in the lateryears, as long as on average it meets the goalTiming of Power Plant Emission ReductionsBuilding Block Strategy EPA Used toCalculate the State GoalMaximum Flexibility:Examples of StateCompliance Measures1. Make fossil fuel-firedpower plants moreefficientEfficiency Improvements • Efficiency improvements• Co-firing or switching tonatural gas• Coal retirements• Retrofit CCS (e.g.,WAParish in Texas)2. Use lower-emitting powersources moreDispatch changes toexisting natural gascombined cycle (CC)• Dispatch changes to existingnatural gas CC3. Build more zero/lowemitting energy sourcesRenewable EnergyCertain Nuclear• New NGCC• Renewables• Nuclear (new and up-rates)• New coal with CCS4. Use electricity moreefficientlyDemand-side energyefficiency programs• Demand-side energyefficiency programs• Transmission efficiencyimprovements• Energy storage12When States Plan, They Can:•Look broadly across the power sector for strategiesthat get reductions.•Choose to rely to varying degrees on measures thatEPA used to calculatethe goal, or on other measures that were not part of the state goalsetting analysis.•Invest in existing energy efficiency programs or create new ones.•Consider market trends toward improved energy efficiency and a greaterreliance on lower carbon energy.•Tap into investments already being made to upgradeaging infrastructure.•Expand renewable energy capacity.•Integrate their plans into existing power sector planning processes.•Design plans that use innovative, cost-effective regulatory strategies.•Develop a state-only plan or collaborate with eachother to develop planson a multi-state basis.•Decide how to treat power plants nearing the end oftheir useful life andhow to help plants avoid “stranded investments.”13Flexibilities Available To States•Timing:•Up to two or three years tosubmit final plans.•Up to 15-year window inwhich to plan for and achievereductions in carbon pollution.•Form of goal: States can useeither a rate-based or massbased goal.•Single or multi-state plans:States can collaborate anddevelop plans on a multistate basis.•Selection of measures:•States will choose how tomeet the goal throughwhatever collection ofmeasures reflects its particularcircumstances and policyobjectives.•State measures may impactand, in fact may be explicitlydesigned to reduce, CO2emissions from utilities on aregional basis.•EPA would support building offexisting reduction programs.14States Choose How to Meet the Goals•Demand-side energy efficiencyprograms.*•Generating electricity fromlow/zero-emitting facilities.*•Expanding use of existing NGCCunits.*•Transmission efficiencyimprovements.•Energy storage technology.•Working with utilities to considerretiring units that are highemitting.•Energy conservation programs.•Retrofitting units with partial CCS.•Use of certain biomass.•Efficiency improvements at higheremitting plants.*•Market-based trading programs.•Building new renewables.•Dispatch changes.•Co-firing or switching to natural gas.•Building new natural gas combinedcycle units.*Measures EPA used in calculating the stategoals15Details About State Plans•EPA provided a list of about a dozen components that willneed to be included in the plan.•Measures to meet the state’s interim goal and finalgoal.•Interim goal -- average over a 10-year period from 2020-2029;•Final goal -- meet in 2030 and thereafter.•Individual and multi-state plans due June 30, 2016.•Proposed timing of extensions to submit a completeplan, ifjustified and supported:•Submit initial plan by June 30, 2016;•Individual state plans: a one-year extension (June30, 2017);and•Multi-state plans: a two-year extension (June 30, 2018).16Next Steps•Proposed rule and supporting documents availableonline at:http://www.epa.gov/cleanpowerplan•4 public hearings the week of July 28thin Denver,Atlanta, Pittsburgh and Washington, D.C.•120-day public comment period closesOctober 16,2014.•Comments on the proposal should be identified byDocket ID No. EPA-HQ-OAR-2013-0602.•Final Action June 201517Additional SlidesThis Proposal Deals With the LargestSource of GHG Emissions in the U.S.19•Cut hundreds of thousands of tons of harmful particle pollution,sulfur dioxide and nitrogen oxides as a co-benefit.•Provide important health protections to the most vulnerable,such as children and older Americans.•Lead to health and climate benefits worth an estimated $55billion to $93 billion in 2030.•From soot and smog reductions alone, for every dollar investedthrough the Clean Power Plan – American families will see up to$7 in health benefits.Summary (continued)2021By June 30, 2016State submits initial multistate plan and request for 2-year extensionEPA reviews initial planand determines ifextension is warrantedby June 30, 2017State submits progressreport of planby June 30, 2018States submits multistate planState submits Negative DeclarationState submits complete implementation Plan by June30, 2016State submits initial Plan by June 30, 2016 and request 1-year extensionState submits initial multi-state Plan by June 30,2016 and request 2-year extensionEmissionGuidelinePromulgationJune 1, 2015by June 30, 2016State submits negativedeclarationEPA publishes FR noticeby June 30, 2016State submits planby June 30, 2016State submits initial planand request for 1-yearextensionEPA reviews initial plan anddetermines if extension iswarrantedby June 30, 2017State submits complete plan20152019Proposed Implementation TimelineComplianceperiod begins20202020EPA reviews plan andpublishes final decisionwithin 12 months onapproval/disapprovalEPA reviews plan andpublishes final decisionwithin 12 months onapproval/disapprovalEPA reviews plan andpublishes final decisionwithin 12 months onapproval/disapproval201620172018Benefits and Costs•Nationwide, by 2030, this rule would help reduce CO2emissions fromthe power sector by approximately 30% from 2005 levels.•Also by 2030, reduce by over 25% pollutants that contribute to the soot andsmog that make people sick.•These reductions will lead to public health and climate benefits worthan estimated $55 billion to $93 billion in 2030.•Proposal will avoid an estimated 2,700 to 6,600 premature deaths and140,000 to 150,000 asthma attacks in 2030.•Health and climate benefits far outweigh the estimated annual costs ofmeeting the standards.•Estimated at $7.3 billion to $8.8 billion in 2030.•Proposal protects children and other vulnerable Americans from thehealth threats posed by a range of pollutants.•Move us toward a cleaner, more stable environment for futuregenerations.•Ensures an ongoing supply of the reliable, affordable power needed foreconomic growth.22Other Impacts23Electricity bills down8% in 2030$0$20$40$60$80$100$1201990 1995 2000 2005 2010 2015 2020 2025 2030Monthly Residential Electricity Bills (2011$)Historical - Converted to 2011$Base CaseClean Power PlanAfter Proposal, Coal & Natural Gas RemainLeading Sources of Electricity Generation24Each more than 30% of projected generation in 2030