1 

TABLE OF CONTENTS

CHAPTER 8 ECONOMIC AND EMPLOYMENT IMPACTS .............................................. 2

8.7 Climate Benefits ...................................................................................................................... 2

8.7.1 Climate Science and Climate Benefits ................................................................................ 2

8.7.2 Monetized Climate Benefits .............................................................................................. 27

8.8 Health and Air Quality Co-Benefits .................................................................................... 86

8.9 Reliable affordable electricity ............................................................................................ 132

8.9.1 Changes in operational capacity ..................................................................................... 297

8.9.2 Reduction in excess reserves ........................................................................................... 297

8.9.3 Changes in retirements .................................................................................................... 305

8.9.4 Changes in new capacity additions ................................................................................. 305

8.9.5 Reserve transfers .............................................................................................................. 308

8.9.6 Alternative case ................................................................................................................ 308

8.9.7 Other ................................................................................................................................. 308

8.10 Other .................................................................................................................................. 316
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CHAPTER 8 ECONOMIC AND EMPLOYMENT IMPACTS 

Part 2 - Sections 8.7 Through 8.10 

8.7 CLIMATE BENEFITS 

8.7.1 Climate Science and Climate Benefits 

Comment 1: Several commenters expressed concern about ways in which climate change could 

lead to increased exposure to various pollutants. Commenters discussed several major avenues in 

which this could occur, citing several peer-reviewed studies. First, that climate-change induced 

damage to vegetation and biological soil crusts in Utah and Nevada would lead to soil 

disturbances which would increase dust-borne transport of the carcinogen erionite, potentially 

aggravated by desertification due to increased demand for water from Las Vegas. Second, the 

commenters had similar concerns regarding the potential for dust-borne radionuclides from 

Nevada’s nuclear testing sites. Third, the commenters expressed concerns regarding several 

avenues by which there would be increased release of mercury into the environment: that 

mercury currently trapped in Arctic ice would be released as the ice melts, that increasing 

numbers and intensity of wildfire would aerosolize mercury that had been deposited there, and 

that dropping lake levels due to increased heat and drought in Utah would expose mercury 

contaminated lake beds to windstorms. Fourth, the commenters expressed concern that 

desertification of the Great Basin due to heat, drought, and land use mismanagement would lead 

to creation of dust-bowl conditions, and noted that PM10 from dust has been associated with 

increased death rates from cardiac, respiratory, and cerebrovascular causes. Fifth, the 

commenters expressed concern that hotter temperatures and dust storms would provide 

conditions that would be advantageous for the spread of fungal spores, SARS, meningitis, 

influenza, and foot and mouth disease. Finally, the commenters stated that ecosystem collapse 

due to climate change could lead to future pandemics of infectious diseases. Commenters stated 

that due to higher temperatures and more stagnant air masses, and given constant emissions, that 

climate change will lead to higher ozone concentrations in urban areas. The commenters noted 

that increased ozone concentrations will lead to reduced air quality and public health issues 

related to pediatric respiratory health and some major diseases. 

In contrast, commenters stated that ozone levels have declined dramatically in the last few 

decades because the ozone-precursor emissions have declined. The commenters said that ozone 

formation is becoming less and less sensitive to temperature because there are fewer exceedances 

per hot day in recent years than there were in previous decades. The commenters said that ozone 

levels will continue declining regardless of climate warming because EPA will eliminate most 

ozone-precursor emissions in the upcoming decades. The commenters stated that the studies that 

EPA is using to predict future ozone levels use unrealistically high emissions of ozone 

precursors, which lead to an overestimate of future ozone levels and therefore the effects of 
3 

climate warming on ozone. The commenters said that climate warming will have substantially 

less effect on future ozone levels than what EPA claims. 

Response 1: The EPA recognizes that there are a number of mechanisms by which climate 

change can increase exposure to various kinds of pollutants. The scientific literature supports 

EPA’s conclusion that climate change will lead to increased exposure to tropospheric ozone 

levels that will negatively impact human health, due to increased temperatures and more frequent 

stagnant air conditions, among other factors. The net impact of climate change on particulate 

matter is less clear, although a climate change driven increase in wildfires would lead to an 

increase in particulate emissions in areas impacted by such fires. The various effects of climate 

change on dust-related health impacts like the ones summarized by the commenters are active 

areas of research. As stated, in section II.A of the preamble, the NCA3 indicates that human 

health in the United States will also be impacted by "increased extreme weather events, wildfire, 

decreased air quality, threats to mental health, and illnesses transmitted by food, water, and 

disease-carriers such as mosquitoes and ticks."

Commenters noted that ozone levels have declined historically and will continue to decline due 

to reductions in ozone precursor emissions. The EPA is aware of the decline in ozone 

concentrations due to the agency’s air quality regulations. Regarding the historical and possible 

future decline in ozone concentrations, the EPA stated in the 2009 GHG Endangerment Finding 

that climate change is expected to increase ozone pollutions "relative to air quality levels without 

climate change", not necessarily the absolute ozone levels. As noted in the 2009 GHG 

Endangerment Finding, the existence of a National Ambient Air Quality Standard (NAAQS) to 

prevent exceedances of ozone concentration thresholds does not preclude the possibility of 

public health endangerment due to climate change (see the 2009 Endangerment Finding, p 

66530, where it is noted that the effects of climate on ozone are relevant to public health despite 

the existence of the NAAQS for several reasons: that the NAAQS takes effect only after 

exceedances are detected, that despite the NAAQS, there are some regions where ozone 

exceedances still occur, and that even in regions in attainment an increase in ozone may increase 

the risk to some individuals). 

Comment 2: Commenters discussed the science of climate change, noting that CO2 has 

increased from 280 to 400 ppm, the highest in 800,000 years, and that methane concentrations 

are 2.5 times their concentration in the last 800,000 years. The commenters stated that it is clear 

that these increases are due to human activities, and that the elevated concentrations will lead to 

a warming of the planet. 

Response 2: The EPA agrees and refers to the IPCC AR5, the NCA, and more scientific 

assessments that conclude that CO2 and CH4 concentrations are likely higher than they have 

been in at least 800,000 years, that these elevated concentrations are unambiguously due to 

human activities, and that these elevated concentrations are leading to global warming and 

climate change. These conclusions are based on critical examination of the relevant assessment 

literature that was subject to rigorous and exacting peer review by the expert community. 
4 

Comment 3: A number of commenters argued that the proposal will have minimal impact on 

climate change, or that EPA has not demonstrated that there is a connection between the proposal 

and any particular impact. Several supporting arguments are made. 

One assertion is that the rule covers only a portion of the power generation sector in a single 

country, and that therefore emission reductions must represent less than 5 percent of global GHG 

emissions. Comparing a reduction in CO2 of 555 million tons (based on Option 1 State 

Compliance Approach. RIA at 3-20, Tbl. 3-5) to global anthropogenic emissions of GHGs 

estimated at 49 gigatons per year according to the IPCC AR5, the commenters argued that a 

reduction of 1 to 2 percent is not sufficient to significantly impact climate change, and that the 

rule should therefore be discarded. Commenters noted that the proposal does not directly reduce 

emissions in India or China, and discuss the rapid rate of growth of emissions in those nations. 

Several commenters referenced an analysis of the proposal that used the MAGICC model and 

found that the temperature benefits of the rule in 2100 would be about 0.02 degrees C. The 

commenters stated that this magnitude of temperature change is undetectable and therefore 

inconsequential. Commenters stated the benefit would have been even smaller if they had used 

the climate sensitivity that the commenters preferred. Some commenters objected that the agency 

has not presented its own calculations of global temperature change resulting from the rule and 

requested more detail. 

Several commenters asserted global temperature reduction will be negligible because the 

sensitivity of the climate to increased CO2 concentrations is small. Commenters cited recent 

papers and other sources to assert that the best estimate of transient climate sensitivity is 1.33 

degrees C compared to 1.8 degrees C or higher in most climate models, and that the best estimate 

of equilibrium climate sensitivity is close to 2 degrees C, 40 percent lower than the climate 

assessment best estimate. Commenters calculated their own value for equilibrium climate 

sensitivity, and finds that the equilibrium climate sensitivity for greenhouse gases should be 2.9 

degrees C, but for CO2 should be only 1.8 degrees C. 

Commenters stated that future climate change will be much smaller than projected, arguing that 

historical climate change projections from CEQ and Dr. Hansen have proved to be exaggerated 

and therefore the current projections are also likely to be exaggerated. The commenters also 

argued that reduced solar activity may be leading to a cooling trend, that solar impacts are 

underestimated, and that the medieval warm period was warmer than today. Commenters 

referenced Dr. Koonin who states that GHG emissions can affect the climate by only 1-2 percent, 

and therefore there is a high standard of proof to show that GHG reductions can have an impact. 

Some commenters recognized that there will be an effect on climate change, but argued that the 

impact will be small compared to the costs of implementation. 

Response 3: The Clean Power Plan will result in the largest reductions of carbon dioxide 

emissions from a single regulatory action in U.S. history. However, EPA has been clear that, as 

stated in the 2009 GHG Endangerment Finding under Section 202 of the CAA, "the global 

nature of the air pollution problem and the breadth of countries and sources emitting greenhouse 

gases means that no single country and no single source category dominate or are even close to 

dominating on a global scale." EGUs are the largest contributors of CO2 in the US, and the 
5 

reductions achieved in this rule are an unprecedented and necessary first step towards slowing 

the rate of climate change. 

A number of commenters also specifically suggested that the EPA was overestimating the 

climate sensitivity and that EPA is relying on exaggerated projections of future climate change. 

The EPA relies on the best available science and does not create its own estimate of climate 

sensitivity. Specifically for climate sensitivity, the EPA relies on the major assessment reports, 

including the recent IPCC 5th Assessment Report. These assessment reports consider the entire 

literature in context, rather than a selection of a small number of individual studies. The likely 

range for the climate system response to a doubling of carbon dioxide concentrations (i.e., the 

climate sensitivity) described by the IPCC AR5 assessment of 1.5 to 4.5 degrees represents a 

sound interpretation of the literature, and EPA has determined is the appropriate range on which 

to base EPA’s decisions. Estimating climate sensitivity is an area of ongoing research. Many of 

the studies cited by commenters are based on a method of using simple models and recent 

observed temperatures. It is important to also give appropriate weight to other methodologies, 

such as paleoclimate and theoretical approaches, as was in the IPCC assessment process. Many 

of the studies cited by the commenters were also considered by the IPCC, and a number of 

authors of the cited studies were also IPCC authors. Therefore, EPA finds the IPCC process 

appropriately accounted for the full spectrum of the literature that relates to climate sensitivity 

estimation. The IPCC range does include the possibility that climate sensitivity is below 3 

degrees C, but also acknowledges the possibility that the climate sensitivity is higher than 3 

degrees C. EPA previously responded to a number of similar comments in 2009, in Section 4.3 

of the EPA’s Response to Comments on the 2009 Endangerment Finding. At that time, EPA also 

explained how the approach of the major assessments to determine the Earth’s climate sensitivity 

was sound, and considered the entire body of science in context, rather than relying on individual 

studies that were often sensitive to a choice of specific temperature dataset or single 

methodology. This approach has since been upheld by the Courts. 

Some commenters criticized EPA for not quantifying the temperature impacts of the rule 

referenced a temperature analysis using the MAGICC model. While the MAGICC model is a 

reasonable tool to use to provide estimations of the temperature impacts of mitigation scenarios, 

the analysis referenced by the commenters made several assumptions regarding model inputs that 

results in lower benefits of mitigation compared to other reasonable assumptions. For example, 

the 0.02 degree number cited by most commenters is based on an emissions scenario where the 

U.S., in the absence of any climate policy, peaks in CO2 emissions in 2010 and then declines. 

Assuming that the U.S. will reduce emissions in the absence of climate policy leads to a future in 

which the emission reductions needed to meet the Clean Power plan target are smaller than they 

would otherwise be. This makes the benefits of an emissions target appear smaller than they 

would be compared to a future where emissions continue to grow. While the EPA did not 

analyze the temperature benefits directly, the Social Cost of Carbon was used to determine the 

monetized benefits of the rule for reducing the rate of climate change. 

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence of flaws in the EPA’s approach of relying upon the best estimates of the major peer 

reviewed climate change assessments, or that the assessments did not take into account the new 

literature, nor do the comments demonstrate that the impacts of the regulation will be negligible.
6 

Comment 4: Several commenters argue that observed warming in the troposphere is lower than 

projected by climate models, and that therefore the proposal should be discarded. 

Commenters stated that lower and middle troposphere warming trends over the time period 

1958-2012 are indistinguishable from zero, and that the inconsistency with model trends is 

statistically significant. Including a correction term the commenters asserted that models are 

rejected at smaller significance levels. The commenters also quoted a published review paper 

that states that a lack of tropospheric warming would have fundamental implications for 

understanding of the climate system. Commenters also cited the 1958-2012 tropospheric data, 

arguing that the only warming in the record was due to a step-change in the late 1970s due to the 

Pacific Climate Shift, which means that the historical CO2 influence was small and therefore 

future CO2 influence would also likely be small. 

Commenters also critiqued a Santer et al (2008) paper which they claimed was the science basis 

of the EPA’s RIA. The commenters stated that Santer et al claims agreement/consistency 

between observed tropospheric temperature trends and trend values derived from IPCC 

greenhouse models which they believe is inadequate. Commenters provided 3 critiques of Figure 

7 of the Santer paper: that two of the observations fall outside the model range, that the 7 

observational trends differ from each other and that 5 of the datasets might be flawed, and that if 

the modeled trends were adjusted to be consistent, the observed surface trend that any agreement 

with observations would disappear and that the width of the model uncertainty band is due more 

to model chaotic variability than to model differences. 

Commenters plotted the results of all 102 RCP4.5 IPCC AR5 climate model runs available as of 

August 2014 for a layer of the tropical atmosphere, where according to the commenters, climate 

impacts should be the largest. The commenters then anchored the linear trends for 1979-2014 

(observations through October 2014) for all models and for observations to the year 1979. The 

commenters noted that the results demonstrate that the models do not yet have the ability to 

discern why a climate variation may have occurred simply because they cannot even reproduce 

what has occurred. The commenters claimed that this makes the models inadmissible according 

to the Daubert Standard. The commenters claimed that therefore the proposal should be 

withdrawn. 

Commenters stated that the tropospheric temperature trends were irrefutable and invalidated the 

global surface temperature measurements, and therefore disprove the contention that CO2 causes 

atmospheric temperatures to rise. 

Response 4: The EPA has previously responded to arguments that observed temperature trends 

in the tropical troposphere differ too much from modeled trends: Volume 1.2.1 of the Denial of 

the Petitions to Reconsider the Endangerment and Cause or Contribute Findings 

(http://www.epa.gov/climatechange/endangerment/petitions.html) and Response 3-7 in Volume 

3 of the Response to Comments in the 2009 GHG Endangerment Finding 

(http://www.epa.gov/climatechange/endangerment/comments/volume3.html) both address these 

issues. In previous responses, EPA cited Karl et al. (2009) which stated that when uncertainties 

in models and observations are properly accounted for, newer observational data sets are in 
7 

agreement with climate model results. Commenters on this proposal restate points which were 

previously addressed, and for which the previous responses still hold. 

The most recent discussion of this issue in the assessment literature can be found in Chapter 

9.4.1.4.2 of the IPCC Fifth Assessment Report (AR5). The AR5 does find that most climate 

models show a larger warming in the tropical troposphere than is found in the observational 

datasets, with some of the difference explained by models showing faster sea surface temperature 

warming than has been observed in that region. However, the IPCC AR5 also noted that 

appropriate treatment of uncertainty in the observational and model datasets leads to more 

agreement than was observed in some previous studies. The IPCC also cautions that there is low 

confidence in the observed trends, and indeed, several more recent studies have been published 

indicating that trends in the region may have been underestimated (Sherwood and Nisant, ERL, 

2015, doi:10.1088/1748-9326/10/5/054007 and Po-Chedley et al., Journal of Climate, 2015, 

DOI: 10.1175/JCLI-D-13-00767.1). Generally, model-observation agreement will be best for 

large regions and long time periods, because for small regions, natural variability and fewer 

observations make trends more difficult to observe.

The EPA did not rely on a single paper (e.g., Santer et al. 2008), nor do some differences 

between models and observations in a small region disprove all results from all climate models. 

The IPCC finds that "[c]limate and Earth System models are based on physical principles, and 

they reproduce many important aspects of observed climate. Both aspects contribute to our 

confidence in the models’ suitability for their application in detection and attribution studies and 

for quantitative future predictions and projections." Therefore, EPA has considered these 

comments and determined that they do not provide credible evidence of flaws in the conclusions 

of the scientific assessment reports upon which EPA relies. 

Comment 5: Several commenters stated that a lack of warming for the past 17-26 years despite 

rising CO2 levels indicated that there was no need to regulate CO2. Commenters further argued 

that there has been no observed increase in the rate of sea level rise, but that subsidence can give 

the appearance of sea level rise. Commenters cited 7 articles that conclude that any sea level rise 

has been overstated and is not linked to warming and will not pose a threat. The commenters also 

noted a lack of warming below 1.24 miles in the oceans, and also cited a study that shows that 

natural swing in temperature can explain temperature change in the Northeast Pacific from 1900 

to 2012. 

Response 5: Commenters provided a limited characterization of the available scientific 

evidence. For example, commenters discussed a recent 17 or 26 year pause in the rate of global 

surface temperature rise, but mischaracterize or do not consider a number of important factors 

that put this "pause" in context within observed, long term climatological trends. The first factor 

is that this is not actually a pause but rather a reduction in the rate of surface temperature rise. 

The second is that observations of the slower rate during this pause depends on which dataset is 

chosen, but, according to the IPCC, all global surface temperature datasets do exhibit a warming 

trend over the period 1998-2012. The third is that this reduction in rate is mostly evident only in 

atmospheric temperatures, and that ocean heat content and sea level rise (which can be a proxy 

for ocean heat content) both continue to increase rapidly. Other measures of climate change, such 
8 

as Arctic sea ice retreat, glacial melt, and reductions in snow cover similarly show no pause or 

even demonstrate an acceleration during this time period. A final important factor is that trends 

based on short time periods such as one or two decades often do not adequately reflect larger 

scale factors that are considered when evaluating long-term global change and climate-related 

trends. 

Regarding arguments that sea level rise is overstated, the IPCC found that recent rates of sea 

level rise have been at the upper end of the model projections (see Figure 13.7 in Chapter 13 of 

Working Group I of the IPCC Fifth Assessment AR5 Report), and that recent rates of sea level 

rise have been higher than the rates over the past century. EPA has examined the papers 

submitted by the commenters, and found that some of the papers only concern small regions, and 

therefore are not evidence against global sea level rise, but that the other papers have all been 

considered by the IPCC in reaching its conclusions. For example, groundwater loss is a part of 

the IPCC sea level rise budget. Claims that some part of the deep ocean has not warmed, or that 

some portion of temperature changes in one ocean region are related to natural variability are 

subject to argument. However, even if these claims were true, they do not contradict the 

conclusion that the oceans as a whole are warming due to the energy imbalance from elevated 

greenhouse gas concentrations. 

The EPA has considered these comments, and finds that the assessment literature has adequately 

explained variations in the rate of surface warming in the past few decades, has accurately 

portrayed the rate of sea level rise and related increases in ocean heat content, and that the 

comments do not provide credible evidence of flaws in the assessment literature. 

Comment 6: Several commenters argued that the climate is too complex for computer models or 

EPA to be able to predict the impact of greenhouse gas mitigation. Commenters argued that the 

complexity of the ocean system and the paucity of data older than a few decades (citing Dr. 

Koonin) imply that there is little understanding of the oceans, and that because the importance of 

the oceans in holding heat and influencing the atmosphere, that therefore there is little 

understanding of the climate. The commenters also argued that natural feedback mechanisms 

like clouds and water vapor are too complex to model, because they can only be understood 

through observations not deductions from the laws of chemistry and physics, and because key 

aspects occur at smaller resolutions than models can achieve. 

Commenters argued that if IPCC models cannot hindcast yesterday accurately despite all the 

available data, how can they be expected to forecast the future? Commenters also discussed 

discrepancies between hindcasts and observations, citing precipitation in the tropics and 

subtropics, monsoons, and rainfall over China as examples of poor model performance. The 

commenters argued that the flaws in the models make them unfit for supporting decision making. 

Response 6: The issues raised here are very similar to those previously raised and addressed in 

detail by the Agency. Issues regarding climate models were responded to in Volume 1.2.3 of the 

2010 Denial of the Petitions to Reconsider the Endangerment and Cause or Contribute Findings 

for Greenhouse Gases Under section 202(a) of the Clean Air Act as well as Volume 4.1 of the 

2009 Response to Comments for the EPA Endangerment Finding. As stated in both the Denial of 
9 

the Petitions (http://www.epa.gov/climatechange/endangerment/#petitions) and the Response to 

Comments (http://www.epa.gov/climatechange/endangerment/#comments): 

With respect to the issues commenters raised concerning flaws in the models used for projections 

and attribution studies, it is well recognized that models are representations of complex systems 

and may not be able to perfectly represent all interactions in the system being modeled. For 

example, clouds are too difficult to model computationally because the physics involved in cloud 

formation occurs at scales smaller than the resolution of most climate models. Although modelbased results are subject to some degree of inherent uncertainty, as reflected in the assessment 

literature and in the TSD, these uncertainties are acknowledged; uncertainties do not mean that 

the models are fatally flawed or unreliable representations of the climate system. Climate models 

have been demonstrated to successfully simulate a number of climatic properties, as documented 

in the IPCC, CCSP, NRC, and USGCRP reports on which the TSD primarily relies.

The Responses further quoted the IPCC, CCSP, and USGCRP reports to support this description. 

The most recent IPCC report evaluated climate models in Chapter 9 of Working Group I, finding 

that "Climate and Earth System models are based on physical principles, and they reproduce 

many important aspects of observed climate. Both aspects contribute to our confidence in the 

models’ suitability for their application in detection and attribution studies and for quantitative 

future predictions and projections."

Therefore, the EPA has considered these comments, and finds that despite the complexity of the 

climate system and some differences between models and observations (which are well 

characterized in the scientific literature), models remain a useful tool for understanding the 

climate system. The understanding of the climate system that arises from climate modeling 

supplements theory and evidence from historical observations to support EPA’s continued 

reliance on the results of the major scientific assessments which look across many models and 

address issues pertaining to uncertainty and the characterization of the degree of certainty. 

Comment 7: Several commenters expressed concern that the rule could lead to increased 

emissions of methane by encouraging increased use of natural gas. These commenters were 

concerned that the methane impacts were being underestimated because the climate impacts of 

methane are greater than those accounted for by the EPA. 

Commenters claiming that EPA is underestimating the impacts of methane focused on the use of 

a 100-year GWP of 25, stating this is based on an outdated IPCC assessment. Some claim that 

EPA should be using the 100-yr GWP of 36 in IPCC's AR5, released in 2013, since it includes 

methodological improvements in the GWP calculation by accounting for carbon cycle feedbacks. 

Others expressed concern over the use of 100-year timescale rather than the 20-year timescale, 

arguing that the next 20 years are critical to climate change, that key decadal impacts of shortlived climate forcers are lost when considering impacts on a 100-year timescale, or that the 

timescale used should be on the same timescale as the rule implementation timescale (e.g., by 

2030). Commenters noted that over 20 years, methane emissions are estimated to be 87 times 

more disruptive to the climate than carbon emissions. Commenters also noted that "[a]t the 20-

year timescale, total global emissions of methane are equivalent to over 80% of global carbon 
10 

dioxide emissions. Several commenters cited a 2011 Cornell (Howarth, et al.) study that 

concludes that "[a] complete consideration of all emissions from using natural gas seems likely 

to make natural gas far less attractive than other fossil fuels in terms of the consequences for 

global warming", this study used a 20 year GWP of 105. Commenters added that another 2014 

Howarth report concluded that "both shale gas and conventional natural gas have a larger GHG 

footprint than do coal or oil, for any possible use of natural gas." Some commenters cited studies 

that show that GWPs are inconsistent with temperature targets. 

Some commenters complimented EPA on updating the methane GWP from the IPCC Second 

Assessment Report to the AR4 value, but still argued that EPA should update to AR5 as well as 

present 20 year GWPs besides the 100 year GWPs. Commenters asserted that consistency with 

international reporting requirements under the UN Framework Convention on Climate Change 

(UNFCC) to employ 100-year AR4 GWPs should not govern substantive, domestic rulemakings 

because they state that using values known to be inaccurate is arbitrary and capricious. 

Response 7: See the RIA, Chapter 3 and Appendix 3A, and Response to Comments section 8.2 

for details about EPA’s estimates of methane emissions from natural gas systems. Here, we 

address the appropriate metric with which to compare methane to carbon dioxide and other 

greenhouse gases. EPA believes that the rationale for using a GWP of 25 for methane is valid, 

and thus that methane emissions are appropriately characterized. 

EPA has chosen to use the IPCC Fourth Assessment Report (AR4) 100-year GWP value of 25 

for calculating methane inventories. This is consistent with international reporting standards. 

More recent 100-year GWP values of 28-36 have been reported in the IPCC 5th Assessment 

Report (AR5). While there is no single optimal metric (see discussions in Chapter 2 of the IPCC 

AR5), the EPA considers the 100-year GWP a reasonable measure of the relative importance of 

different greenhouse gases. Regarding the use of 20-year GWPs or other short timeframes, the 

EPA disagrees that these are superior metrics to the 100 year GWP, although they do provide 

additional perspectives. The 20-year GWP assigns no value to any forcing reductions more than 

20 years in the future, whereas the 100-year GWP considers both near-term and long-term 

impacts. Given that climate change is both a near-term and a long-term threat, a metric that 

captures both time periods is more appropriate than one that only acknowledges near-term 

impacts. The EPA also disagrees with commenters who advocate for discarding GWPs because 

GWPs are not designed for meeting any given temperature target. Metrics that are optimally 

designed for achieving a given temperature target are an interesting academic problem, but are 

often not practical as they assume single global policy structures with universal adoption, and 

their theoretical advantages are not clear. 

Comment 8: Commenters believed the EPA is ignoring the benefits of increased atmospheric 

CO2. Commenters note that greenhouses keep CO2 levels at 2,000 ppm to enhance plant growth. 

Commenters stated that increased CO2 levels have and will continue to increase growth rates of 

crops and claims that greenhouse CO2 fertilization experiments have proven that crop yields 

increase under higher CO2 concentrations, when grown under well-watered conditions with 

adequate nutrients and light. Commenters further stated that previously unsuitable areas may 

become available for agriculture as a result of warmer temperatures, reduced incidence of frosts, 
11 

and longer growing seasons, which would offset declines elsewhere. The commenters also noted 

that increased atmospheric CO2 would offset negative effects, even if precipitation decreased 

because of improved water usage by plants. The commenters further commented that many 

models do not properly represent the relationship between plant growth, CO2 fertilization, and 

warming. The commenters believed recent studies show that the CO2 fertilization effect and 

changes in plant water use help explain why models have been incorrect, with plant absorption of 

CO2 being much higher than expected. Commenters stated that if CO2 concentrations were too 

low, life would not be able to exist, and therefore the higher the concentration the safer life on 

this planet will be. 

Response 8: The EPA has never disputed that CO2 is a required ingredient for plant growth and 

survival, or that CO2 can stimulate plant growth. This comment was put forth previously and 

responded to in the Response to Public Comments Document of the Endangerment Finding. The 

2009 Endangerment Finding Technical Support Document (TSD) summarizes the scientific 

assessment literature on the stimulatory, or fertilization effect of CO2 on plant growth and 

productivity. For example, Section 3 states that CO2, "can have a stimulatory or fertilization 

effect on plant growth" and "studies have demonstrated increases in CO2 affects water use and 

water use efficiency in plants" (EPA 2009). Section 9 focuses specifically on U.S. agriculture 

and shows that for grain and oilseed crops, increased CO2 and temperature will likely speed 

plant growth in the near-term future (USDA CCSP 2008). The Endangerment Finding also 

indicated that elevated CO2 can improve water use efficiency, stating "... elevated CO2 causes 

partial stomatal closure, which decreases conductance, and reduces loss of water vapor from 

leaves to the atmosphere." 

However, the EPA considers the stimulatory effects or beneficial influences of elevated CO2 on 

plants alongside other climate change impacts. Many aspects of climate change can negatively 

affect plant growth and crop yields and can outweigh the benefits of CO2 fertilization. For 

instance, the USCGRP found that high temperatures, extreme weather events (i.e., heavy 

downpours, droughts), enhanced pest and weed growth, and ozone exposure can significantly 

limit the benefits of the direct stimulatory CO2 response on plant growth. The UGCRP also 

concluded that as temperature rises beyond a certain threshold in the future, grain and oilseed 

crops will increasingly begin to experience failure, especially if climate variability increases and 

precipitation lessens or becomes more variable. The IPCC (2007) concluded that the global price 

of cereals may decrease with warming below 2oC, but above this temperature, prices could 

increase by 30%. Further, USGCRP concludes that the marketable yield of many horticultural 

crops (e.g., tomatoes, onions, fruits) is very likely to be more sensitive to climate change than 

grain and oilseed crops. With respect to increases in vegetation biomass, the 2009 Endangerment 

Finding reiterates the IPCC (2007) that for North America, "Although recent climate trends have 

increased vegetation growth, continuing increases in disturbances are likely to limit carbon 

storage, facilitate invasive species, and disrupt ecosystem services." More recent assessments 

released by the IPCC (AR5) in 2013, and the USGCRP in 2014, reaffirm these findings. For 

instance, the IPCC states, "based on many studies covering a wide range of regions and crops, 

negative impacts of climate change on crop yields have been more common than positive 

impacts". The USGCRP states that "By mid-century, when temperature increases are projected to 

be between 1.8oF and 5.4oF and precipitation extremes are further intensified, yields of major 

U.S. crops and farm profits are expected to decline." 
12 

With regard to the treatment of CO2 fertilization in climate modeling, the EPA continues to rely 

on the best available science presented in the assessment literature. These assessment reports 

consider the entire literature in context, rather than selecting a small number of individual 

studies, as the commenters have done. The IPCC (2013) notes that CO2 fertilization already 

"plays a dominant role in terrestrial biogeochemical models to explain the global land carbon 

sink". The IPCC’s conclusions regarding climate impacts therefore incorporate estimates of CO2 

fertilization, including accounting for associated uncertainties. 

EPA has considered the comments regarding the effects of elevated CO2 concentrations on 

plants, and determined that they do not provide credible evidence of flaws in the EPA’s approach 

of relying upon the conclusions of the assessment literature which already take into account these 

effects. In particular, the commenters did not recognize that EPA had already considered the 

effects of CO2 fertilization when originally finding that greenhouse gases endanger public health 

and welfare, and had responded to a number of related comments. The commenters generally 

rely on individual studies or news articles presenting benefits of elevated CO2 in the absence of 

any other climate changes and do not present a comprehensive picture of impacts of CO2 on the 

agricultural sector specifically. In contrast, EPA relies on the assessment literature, which 

demonstrates that the net impacts of elevated GHG concentrations on agriculture will likely be 

negative, when considering relevant factors such as temperature, precipitation, weather 

variability, and ground level ozone, and that in the broader context of all climate impacts, it is 

even more clear that climate change represents a threat to public health and welfare.

 

Comment 9: Commenters argued that CO2 is not a pollutant because current levels of 400 ppm 

are much lower than safe levels as defined by either the concentration that humans can tolerate 

(10,000-15,000 ppm) or levels previously seen in Earth’s history (6000 ppm), and that EPA has 

not provided scientific evidence of direct health effects of CO2 in order to justify the proposal. 

Response 9: In 2009, the EPA Administrator found that the current and projected concentrations 

of the six key well-mixed greenhouse gases (GHGs), including carbon dioxide (CO2) – the GHG 

emitted in largest quantity – threaten the public health and welfare of current and future 

generations. The 2009 Endangerment Finding clearly states that, "Current ambient air 

concentrations of CO2 and other GHGs remain well below published exposure thresholds for any 

direct adverse health effects, such as respiratory or toxic effects." However, climate change 

resulting from current, and future human-driven increases in CO2 and other GHG emissions fuel 

a broad range of adverse effects that directly impact human health and welfare. 

The EPA evaluated and considered scientific information on observed and projected health 

impacts during the development of the 2009 Endangerment Finding. The specific health effects 

of climate change have been described in the scientific assessments that the Agency relied upon 

in making the Endangerment Finding. These include effects such as exposure to increased 

temperatures, extreme weather events, higher levels of ozone pollution, and changes in climatesensitive diseases. For more specific information regarding EPA’s consideration of these health 

effects, see Volume 5 of the Response to Comments document supporting the 2009 

Endangerment Finding. More recent assessments, including the 2014 USGCRP National Climate 
13 

Assessment and the 2013 IPCC reaffirm the findings that human health is affected by climate 

change. 

Regarding the comment stating that higher CO2 concentration were present in Earth’s history, the

EPA does not dispute that CO2 concentrations have been higher in the distant past. However, the 

Endangerment Finding considers the impacts of climate change on human health and welfare 

under current and projected future atmospheric CO2 concentrations and finds them to be 

considerable, irrespective of past CO2 concentrations. Additionally, as noted in the section II.A 

of the preamble, current CO2 concentrations are already higher than they have been in at least 

800,000 years, and that without a reduction in emissions, may reach levels not seen for 30 

million years by the end of the century. Further, the rate of change may be one of the largest in 

Earth’s history. 

Comment 10: Many commenters described numerous climate change impacts that threaten the 

health and welfare of individuals, communities, the United States, and the world, ranging from 

changes in weather and extremes, to ecological shifts and environmental degradation, to 

economic and cultural losses and social disruptions. Several commenters noted the negative 

health impacts of climate change, particularly from heat waves and worsened air quality but also 

increases in vectorborne disease, water quality concerns, and food insecurity. Commenters listed 

impacts encompassing all sectors of the American economy, including damages from natural 

disasters, erosion and coastal/wetland destruction, losses in agriculture and fishing yields and 

jobs, property damage and insurance losses, threats to our energy, transportation, wastewater, 

and water resource infrastructure, lost tourism, humanitarian relief costs, increased healthcare 

and energy costs, and slower economic growth.

The majority of the commenters stated that these climate change impacts, many of which the 

United States and other countries have already begun to feel, are a direct consequence of the 

increasing concentrations of greenhouse gases in the atmosphere. Commenters also stated that 

the authors of the USGCRP's Third National Climate Assessment note 'continued warming and 

increased understanding of the U.S. temperature record, as well as multiple other sources of 

evidence, have strengthened our confidence in the conclusions that the warming trend is clear 

and primarily the result of human activities.' Commenters stated that continued emission of 

greenhouse gases, primarily CO2, will cause further warming and long-lasting changes in all 

components of the climate system, increasing the likelihood of severe, pervasive and irreversible 

impacts for people and ecosystems. These commenters noted that failure to make deep 

reductions in carbon emissions will greatly increase the risk of serious economic, health, and 

environmental consequences of climate change. For these reasons, many commenters urged EPA 

to act now and to strengthen carbon emission standards and implement the CPP. Some 

commenters noted that limiting climate change requires substantial and sustained reductions in 

greenhouse gas emissions which, together with adaptation, can limit climate change risks. 

Commenters claimed that the Clean Air Act requires binding limits on any pollutant that 

threatens human health and welfare, making it an appropriate means by which to reduce 

greenhouse gases and avoid climate impacts on health and welfare. Some commenters stated 

power plants are the largest single source of CO2 emissions in the US, representing about 40 

percent of the total, and that reducing emissions from the electric power sector is crucial to tackle 
14 

climate change. Several commenters asserted the proposal represents a historic opportunity for 

the U.S. to take meaningful action to address global climate change while simultaneously 

advancing a modernized and more efficient electricity grid. Additionally, many commenters 

requested EPA to do even more and do it faster to move this nation along the transition away 

from fossil fuels to clean, renewable energy. 

Response 10: The EPA has not changed its view as articulated in the 2009 Endangerment 

Finding that climate change will have a negative impact on human health and welfare.

The EPA continues to rely on the best technical and scientific information, primarily based upon 

the recent, major assessments by the U.S. Global Change Research Program (USGCRP), the 

Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC) 

of the National Academies. These assessment reports consider the entire peer-reviewed literature 

in context to draw conclusions based on the entire body of findings from the literature. 

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide further evidence supporting the 

2009 Endangerment Finding that climate change will have a negative impact on human health 

and welfare.

A number of comments described observations of climate change. While local observed changes 

can be of great concern to individuals and communities, EPA cautions that they must be assessed 

in the context of the broader science, as it is more difficult to draw robust conclusions regarding 

climate change over short time scales and in small geographic regions.

EPA agrees that rising concentrations of GHGs currently endanger human health and welfare, 

and will continue to do so in the future as atmospheric concentrations continue to rise. Thus, 

EPA agrees that action should be taken to reduce GHG emissions. 

Comment 11: Multiple commenters noted the observed and projected human health impacts of 

climate change in the United States, stating that carbon pollution: 

• Worsens air quality by increasing ground level ozone, particulates from wildfires 

and dust storms, and allergens. Exposure to these pollutants result in more 

hospitalizations; asthma attacks and allergic responses; diminished lung function, 

cardiovascular and respiratory complications, illnesses, and premature death. 

Several commenters also noted that climate change can also make ozone 

attainment more difficult to manage for certain areas.

• Increases health threats from warmer temperatures and extreme heat. Hotter 

temperatures can increase the risk of heat stroke and heat exhaustion and can 

increase the risk of hospitalization for cardiovascular and respiratory diseases.
15 

• Expands exposure to vectorborne, waterborne, and foodborne pathogens and 

contaminants, leading to great risk of short-term and chronic gastrointestinal and 

infectious diseases (e.g. Lyme disease, dengue, etc.).

• Results in more extreme weather events, such as drought, heat waves, wildfires, 

storms, heavy rainfall, and flooding which can cause injuries and death during the 

event and also damage soil quality, agricultural yields, and food supplies and 

access; homes, schools, and energy, water, and transportation infrastructure; and 

health infrastructure or access to healthcare services.

• May lead to mental health issues, particularly related to disasters, with increased 

risk of post-traumatic stress disorder; depression and anxiety; increases in 

violence; social maldevelopment; and stress due to relocation.

Commenters noted that certain populations, particularly children, the elderly, people with preexisting health conditions, certain communities of color, low income communities, and certain 

occupational groups are at increased risk from health threats. Several commenters stated that 

carbon pollution will not only affect people’s health, but will be costly in terms of damages and 

healthcare costs. 

Response 11: The EPA has not changed its view, as articulated in the 2009 Endangerment 

Finding, that climate change will have a negative impact on human health and welfare.

EPA acknowledges the health effects listed by the commenters and recognizes the rapid 

emergence of research and published literature on health effects associated with climate change. 

The EPA continues to rely on the best technical and scientific information, primarily based upon 

the recent, major assessments by the U.S. Global Change Research Program (USGCRP), the 

Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC) 

of the National Academies. These assessment reports consider the entire peer-reviewed literature 

in context to draw conclusions based on the entire body of findings from the literature. The 

Endangerment Finding TSD summarizes key conclusions of IPCC (2007), based on their review 

of over 500 articles on the effects of heat and cold; wind, storms, and floods; drought, nutrition, 

and food security; food safety; water and disease; air quality and aeroallergens and disease; 

vector-borne, rodent-borne, and other infectious diseases; occupational health; and ultraviolet 

radiation. The TSD also summarizes the conclusions of the USGCRP second National Climate 

Assessment (Karl et al., 2009), which describes global climate change impacts for the United 

States. This report provides further evidence of the scope and magnitude of health effects, both 

direct (e.g., increased morbidity from heat waves or floods) and non-direct (e.g., increased or 

alteration in the spread and transmission rates of infectious diseases). As noted by the 

commenters, the literature shows poor countries and communities are likely to be 

disproportionately impacted by climate change health risks. For example, IPCC notes that 

adverse health impacts will be greatest in low-income countries and those at greatest risk 

include—in all countries—the urban poor, the elderly and children, traditional societies, 

subsistence farmers, and coastal populations (high confidence, Confalonieri et al. 2007).

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 
16 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide further evidence supporting the 

2009 Endangerment Finding that climate change poses a risk to human health and welfare now 

and in the future. A number of comments described observations of climate change; EPA agrees 

that these types of observations of climate change are consistent with and provide supporting 

evidence of the effects of climate change on human health and welfare. However, though local 

observed changes can be of great concern to individuals and communities, EPA cautions that 

they must be assessed in the context of the broader science, as it is more difficult to draw robust 

conclusions regarding climate change over short time scales and in small geographic regions.

EPA agrees that rising GHGs currently endanger human health and welfare, and will continue to 

do so in the future as atmospheric concentrations continue to rise. Thus, EPA agrees that action 

should be taken to reduce GHG emissions. 

Comment 12: Commenters stated that the proposed EPA standard on carbon emissions is a 

positive step toward both reducing the impacts of climate change on agriculture and creating a 

dynamic where farmers use our land and know-how to develop clean energy-producing 

technologies and to develop practices that can pull increasing amounts of carbon out of the 

atmosphere. The commenters asserted American farmers are not victims of climate change, but 

part of the solution because they can also play a huge role in reducing emissions and actually 

putting carbon back in the ground. The commenters stated that farmers are developing cover 

crops, using no till, and buying higher efficiency equipment. The commenters also noted that 

farmers can also generate clean energy. As an example the commenters discussed that 

Pennsylvania and Iowa are leaders in wind energy; dairy farmers developing methane digesters, 

turning manure into electricity; and farmers that have developed the biofuels industry.

Commenters stated that the climate science that forms the basis of the Endangerment Finding 

provides a legally sufficient and scientifically compelling justification for curbing greenhouse 

gas emissions from power plants. The commenters further stated that global greenhouse gas 

emissions and atmospheric concentrations, as well as the risk of catastrophic damage, have 

increased since EPA issued the Endangerment Finding, which supports the need for emission 

controls.

Commenters stated the Clean Air Act requires the EPA to develop regulations for categories of 

sources which cause or significantly contribute to air pollution which may endanger the public 

health or welfare, and greenhouse gas emissions endanger the public health and welfare.

Response 12: EPA agrees with the commenters that climate change will have impacts on 

agriculture, as concluded in the 2009 Endangerment Finding that climate change will have a 

negative impact on human health and welfare. In the finding, the Administrator considered both 

adverse and beneficial effects of climate change on the current and future agricultural sector, 

over different regions of the United States stating:
17 

 "There is a potential for a net benefit in the near term for certain crops, but there is significant 

uncertainty about whether this benefit will be achieved given the various potential adverse 

impacts of climate change on crop yield, such as the increasing risk of extreme weather events. 

Other aspects of this sector may be adversely affected by climate change, including livestock 

management and irrigation requirements, and there is a risk of adverse effect on a large segment 

of the total crop market. For the near term, the concern over the potential for adverse effects in 

certain parts of the agriculture sector appears generally comparable to the potential for benefits 

for certain crops. However, the body of evidence points towards increasing risk of net adverse 

impacts on U.S. food production and agriculture over time, with the potential for significant 

disruptions and crop failure in the future."

Section II.A of the preamble summarizes new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), which provides further evidence supporting the 2009 Endangerment 

Finding that climate change will have a negative impact on human health and welfare. The 

NCA3 finds that:

"Climate disruptions to agriculture have increased. Many regions will experience 

declines in crop and livestock production from increased stress due to weeds, 

diseases, insect pests, and other climate change induced stresses."

EPA also agrees with the commenters’ statement that American farmers are part of the climate 

solution. Many of the mitigation and adaptation measures mentioned in the comment are also 

outlined in the NCA3 chapter on agriculture. EPA’s own AgSTAR program is an outreach 

program designed to reduce methane emissions from livestock waste management operations by 

promoting the use of biogas recovery systems. Despite advances towards reducing emissions and 

producing clean energy in the agriculture sectors, there is still more work to be done to avoid the 

most severe threats from climate change. NCA3 finds that:

"Agriculture has been able to adapt to recent changes in climate; however, 

increased innovation will be needed to ensure the rate of adaptation of agriculture 

and the associated socioeconomic system can keep pace with climate change over 

the next 25 years."

Comment 13: Commenters stated that as part of an endangerment analysis, the EPA must 

consider how the proposed standards will have a "detectable, quantifiable, and meaningful 

effect" on the 30 indicators highlighted in the EPA report entitled, Climate Change Indicators in 

the United States. The commenters argued that the EPA uses these indicators for climate change 

assessment and as placeholders for the claimed dangers of global warming in general. The 

commenters further argued that the 30 indicators cannot reasonably represent the dangers 

attributable to new or modified/reconstructed EGUs subject to EPA jurisdiction without more 

analysis, and that because EPA failed to do such an analysis, those claimed dangers do not 

provide the statutorily required endangerment determination. 
18 

Response 13: For information regarding the climate and health benefits of the final rule, see the 

Regulatory Impact Analysis (RIA), which is available in the docket for this action. In the RIA, 

the EPA uses the social cost of carbon as its methodological approach for calculating climate 

benefits. The EPA disagrees that he effect of the final rule on the thirty indicators in its report, 

Climate Change Indicators in the United States must be quantified. 

The EPA’s climate change indicators are not intended to serve as programmatic measures of the 

EPA’s efforts to address the climate change problem but rather to communicate the climate 

change problem in an easy to understand manner using long-term observed data trends. The 

EPA’s thirty climate change indicators depict observed trends over time; such trends are best 

understood over long time periods (e.g., multiple decades) and large geographic areas. The 

indicators show that the climate is changing and effects are already happening, here in the United 

States. The scientific connection between each indicator and climate change is strong. 

Compiling and reporting these indicators helps inform EPA, other organizations, and the public 

of the various observed changes and effects related to climate change, particularly in the United 

States. The fact that the effects of climate change are already being observed across the U.S. 

reinforces the need for continued, sensible steps to address emissions of GHGs.

Comment 14: Commenters argued that climate change will have benefits that outweigh the 

harm and that the Endangerment Finding is invalid. The commenters suggested the IPCC report 

implies that warming will not exceed 2 degrees until 2083, and that warming of less than 2 

degrees will be beneficial. The commenters included examples of benefits in the agricultural 

sector and in the number of deaths that occur in winter. 

Response 14: The commenters incorrectly argued that the IPCC projections imply a 50/50 

chance of not exceeding 2 degrees until 2083, and that warming of less than 2 degrees will be 

beneficial. The comment is based only on the lower bound of a range of likely temperature 

values which are based on a high level of global emissions reductions. It also appears that basic 

mathematical errors may have occurred when the commenters represented the concept of climate 

sensitivity. These very same issues were previously addressed in depth in the 2009 

Endangerment Response to Comment Volume 4. See specifically Comment 4-46 for more 

information on equilibrium climate sensitivity. See also NCA3 page 754 for more information on 

the difference between equilibrium climate sensitivity and transient climate response. EPA has 

considered the information provided by the commenters and finds that it does not provide 

credible evidence of flaws in the EPA’s approach of relying upon the synthesis conclusions of 

the major assessments, nor does it demonstrate that the benefits of climate change will outweigh 

the harm.

EPA’s consideration of net (adverse and beneficial) effects can be found in the 2009 

Endangerment Finding response to comments (RTC) Volume 1, Section 1.4. Specific positive 

impacts of climate change (for example on warm-water fisheries, on the increased growth and 

survival of crops and forests through carbon fertilization, and on fewer deaths from cold 

exposure) were discussed in the Endangerment Finding (pages 66948, 66524, 66529 e.g.), 

sections 3, 7, 9, and 10 of the TSD, and throughout the RTC, but particularly in volumes 5 and 6. 
19 

As stated in the Endangerment Finding (page 66947), "The Administrator is using her judgment, 

based on existing science, to weigh the threat for each of the identifiable risks, to weigh the 

potential benefits where relevant, and ultimately to assess whether these risks and effects, when 

viewed in total, endanger public health or welfare."

Impacts of a warming climate are well-documented in numerous vetted scientific documents 

including those from the National Academies of Science. While limited short-term benefits may 

occur in certain regions and sectors in the U.S. (like increases in some agricultural crops), there 

is increasing risk of net adverse impacts in the long-term. Concluding that climate change, even 

less than or equal to two degrees warming by 2083, is beneficial ignores the scientific consensus 

represented in the assessment literature. Thus, the information provided by the commenters does 

not alter the 2009 Endangerment Finding that climate change will have a negative impact on 

human health and welfare.

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), which provides further evidence supporting the 2009 Endangerment 

Finding that climate change will have a negative impact on human health and welfare. The 

NCA3 includes a Frequently Asked Question on whether there are benefits of climate change, 

and finds that:

"Some climate changes currently have beneficial effects or specific sectors or regions. For 

example, current benefits of warming include longer growing seasons for agriculture and longer 

ice-free periods for shipping on the Great Lakes. At the same time, however, longer growing 

seasons, along with higher temperatures and carbon dioxide, can increase pollen production, 

intensifying and lengthening the allergy season. Longer ice-free periods on the Great Lakes can 

result in more lake-effect snowfalls.

Many analyses of this question have concluded that there will be more negative effects than 

positive ones. This is largely because our society and infrastructure have been built for the 

climate of the past, and any rapid change from that climate imposes difficulties and costs. For 

example, many major cities are located on the coasts where they are now vulnerable to sea level 

rise. And there has been rapid population growth in the U.S. Southwest, where increasing heat 

and drought threaten water supplies and cause increased wildfires. In addition, ecosystems that 

we rely on for our food and water are adapted to the cooler climate that our planet has 

experienced over recent centuries."

Specifically in regards to agriculture, the NCA3 finds:

"Climate disruptions to agriculture have increased. Many regions will experience 

declines in crop and livestock production from increased stress due to weeds, 

diseases, insect pests, and other climate change induced stresses."

In regards to reducing the number of deaths that occur in winter, the NCA3 agrees with EPA’s 

previous responses to this same comment, stating that:
20 

"Milder winters resulting from a warming climate can reduce illness, injuries, and deaths 

associated with cold and snow. Vulnerability to winter weather depends on many non-climate 

factors, including housing, age, and baseline health, while deaths and injuries related to extreme 

cold events are projected to decline due to climate change, these reductions are not expected to 

compensate for the increase in heat-related deaths."

Comment 15: Commenters claimed that "humans would flourish in a warmer climate, and 

adaptation will increase the benefits even more", listing several papers. Commenters specifically 

highlight declining trends in heat-related mortality across the U.S from 1987 to 2005. 

Response 15: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. In contrast, the commenters chose to highlight isolated points from a 

limited set of papers, and these papers often address only individual cities, and mostly outside 

the United States. In addition, the commenters did not synthesize the literature that they provided 

nor did they show how this literature contradicts the assessments which already take into account 

issues such as adaptation.

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide additional evidence consistent 

with the 2009 Endangerment Finding that climate change will have a negative impact on human 

health and welfare, including reaffirming the linkages between climate change and extreme 

temperatures. The NCA3 states:

Some of the risks of heat-related sickness and death have diminished in recent decades, possibly 

due to better forecasting, heat-health early warning systems, and/or increased access to air 

conditioning for the U.S. population. However, extreme heat events remain a cause of 

preventable death nationwide.

As noted in EPA’s 2009 Endangerment Finding RTC, Volume 5 (comments 5-5, 5-7 and 5-36), 

risks to human health can be reduced by technology and adaptive measures, but heat presently 

causes substantial mortality in the Unites States and adaptive measures do not eliminate risk. In 

fact, decreased sensitivity or decline in heat-related mortality may not be as pronounced in the 

future since access to air conditioning is already high in most regions (Ebi et al., 2008) (see also 

RTC 5-45, 5-48, 5-51). The major scientific assessments on which EPA relies, including the 

NCA3, IPCC AR5, and the IPCC SREX, all project negative impacts of climate change, and the 

subsequent increase in frequency or severity of extreme events, on human health. EPA has 

considered the comment and finds that it does not provide credible evidence of flaws in the 

EPA’s approach of relying upon the synthesis conclusions of the major assessments.
21 

Comment 16: Commenters suggested warming seas result in flourishing ocean vegetation, 

which acts as a carbon sink and that studies of impacts of acidification and warming on ocean 

life show adaptability and resilience. 

Response 16: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. In contrast, the commenters do not cite any specific scientific 

evidence or studies to support his/her argument.

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide additional evidence consistent 

with the 2009 Endangerment Finding that climate change will have a negative impact on human 

health and welfare, including reaffirming the linkages between rising CO2 levels, ocean 

acidification, and impacts to ocean ecosystems.

The major scientific assessments on which EPA relies, including the NCA3, IPCC AR5, and the 

IPCC SREX, all project net negative impacts of ocean acidification. EPA has considered the 

comment and finds that it does not provide credible evidence of flaws in the EPA’s approach of 

relying upon the synthesis conclusions of the major assessments.

Comment 17: Several commenters stated that EPA’s concerns regarding the impacts of rising 

CO2 levels and climate change are not merited because the scientific literature does not support 

arguments that extreme weather is increasing or being affected by increased CO2. The 

commenters argued that extreme weather is not increasing. 

Response 17: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature, including literature referred to in the comments received, in 

context to draw synthesis conclusions based on the body of findings from the literature.

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide additional evidence consistent 

with the 2009 Endangerment Finding that climate change will have a negative impact on human 

health and welfare, including reaffirming the linkages between climate change and extreme 

weather, while acknowledging the uncertainties involved in projections of complex phenomena. 
22 

The NCA3 concludes that "Certain types of extreme weather events with links to climate change 

have become more frequent and/or intense, including prolonged periods of heat, heavy 

downpours, and, in some regions, floods and droughts". In contrast to the commenters’ 

argument regarding lack of observational evidence of extreme weather trends, additional findings 

of the NCA3 state:

Some extreme weather and climate events have increased in recent decades, and new and 

stronger evidence confirms that some of these increases are related to human activities. 

Changes in extreme weather events are the primary way that most people experience climate 

change. Human-induced climate change has already increased the number and strength of some 

of these extreme events. Over the last 50 years, much of the United States has seen an increase in 

prolonged periods of excessively high temperatures, more heavy downpours, and in some 

regions, more severe droughts (NCA3 pg 24).

The IPCC also finds observed changes in climate extremes related to temperature, precipitation, 

tropical cyclones, and sea level. As noted in the TSD for the 2009 Endangerment Finding, these 

changes "apply generally to all parts of the globe, including the United States, although there are 

some regional and local exceptions due to patterns of natural climate variability". The IPCC 

SREX assessment report (IPCC 2012) further supports the Administrator’s finding regarding 

extreme weather and climate events: 

A changing climate leads to changes in the frequency, intensity, spatial extent, duration, and 

timing of extreme weather and climate events, and can result in unprecedented extreme weather 

and climate events. [...] There is evidence that some extremes have changed as a result of 

anthropogenic influences, including increases in atmospheric concentrations of greenhouse 

gases. [...] Extreme events will have greater impacts on sectors with closer links to climate, such 

as water, agriculture and food security, forestry, health, and tourism.

In light of these conclusions, EPA has considered the information provided by the commenters 

and found that it does not provide credible evidence of flaws in the EPA’s approach of relying 

upon the synthesis conclusions of the major assessments, nor does it demonstrate that no 

observational evidence exists to support a global increase in extreme weather events. 

Comment 18: Several commenters expressed concern over the impact of climate change on 

Indian Tribes and Alaska Natives. Commenters cited a May 2013 NTAA Status of Tribal Air 

Report and listed many types of climate-related changes that are associated with tribal impacts: 

increased aridity, droughts, temperature, acid rain, dust storms, flooding, forest fires, and pests; 

and changes in precipitation, crop changes, wildlife, ocean acidification, etc.

Other commenters discussed adverse effects on traditional food supplies and health, traditional 

cultures, tribal economies, and tribal treaty rights. Specifically, commenters noted that many 

tribal cultural identities are deeply rooted in the natural environment. Commenters stated that as 

climate change disrupts biological communities, the survival of some tribes as distinct cultures 

may be at risk; the loss of traditional cultural practices, due to climate-driven die-off or range 
23 

shift of culturally significant plant and animal species, may prove to be too much for some tribal 

cultures to withstand on top of other external pressures. Commenters stated that some tribes are 

finding that the animals and/or plants on which they depend for their cultural practices and 

identity have either migrated to lands not under their control or have disappeared altogether. 

Commenters stated that many tribal communities are heavily dependent on the use of fish, 

wildlife, and native plants, and may face threats to food supplies from climate change. 

Commenters stated that even where tribes are integrated into the national economy, climatedriven disruption of biological communities is also having a considerable effect on the treaty 

rights which preserve hunting, fishing, and gathering rights for tribes on their lands and in the 

usual and accustomed areas. Commenters also noted that some tribal communities may face 

difficulty relocating due to tribal land limitations.

Regarding climate impacts to Alaska Natives, commenters noted adverse effects on traditional 

food supplies and infrastructure (due to erosion) in Alaska Native Villages, which has already 

resulted in the relocation of several villages away from the eroding coastline. Specifically, 

commenters noted that Alaska Natives may suffer shortages of fresh water and the food they 

have historically hunted or fished, and that food security is threatened as underground food 

cellars thaw. Commenters cited a May 2013 NTAA Status of Tribal Air Report and a 2003 U.S. 

General Accountability Office study as evidence that coastal erosion and thawing permafrost 

threatens civil infrastructure in remote villages. The commenters noted that more than 200 

Alaska Native Villages are affected to some degree by flooding and erosion, 31 villages facing 

imminent threats that are compelling them to consider permanent relocation, and at least 12 of 

the 31 threatened villages have decided to relocate—in part or entirely—or to explore relocation 

options. The commenters stated that Alaska Native Villages are unique because they face 

firsthand the effects of climate change. 

Response 18: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. 

Section II.A of the preamble summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

"Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation" (SREX). These new assessments provide additional evidence consistent 

with the 2009 Endangerment Finding that climate change will have a negative impact on human 

health and welfare, including reaffirming the linkages between climate change and impacts on 

Native American Tribes, including Alaska Natives.

EPA has considered the information provided by the commenters and finds that it is generally 

consistent with the conclusions of the assessment literature. The USGCRP NCA3 finds climate 

change impacts such as the rapid pace of temperature rise, coastal erosion and inundation related 

to sea level rise and storms, ice and snow melt, and permafrost thaw are affecting indigenous 

people in the United States. The NCA3 also concluded that climate change, in addition to 
24 

chronic stresses such as extreme poverty, is affecting indigenous peoples’ health in the United 

States through impacts such as reduced access to traditional foods, decreased water quality, and 

increasing exposure to health and safety hazards. The IPCC AR5 notes, "Climate-related hazards 

exacerbate other stressors, often with negative outcomes for livelihoods, especially for people 

living in poverty (high confidence). Climate-related hazards affect poor people’s lives directly 

through impacts on livelihoods, reductions in crop yields, or destruction of homes and indirectly 

through, for example, increased food prices and food insecurity." 

The NCA3 notes that particularly in Alaska, critical infrastructure and traditional livelihoods are 

threatened by climate change and, "[i]n parts of Alaska, Louisiana, the Pacific Islands, and other 

coastal locations, climate change impacts (through erosion and inundation) are so severe that 

some communities are already relocating from historical homelands to which their traditions and 

cultural identities are tied." The IPCC AR5 finds that climate change-induced warming in the 

Arctic and resultant changes in environment (e.g., permafrost thaw, effects on traditional food 

sources) have significant observed and projected impacts on the health and well-being of Arctic 

residents, especially indigenous peoples. Small, remote, predominantly-indigenous communities 

are especially vulnerable given their "strong dependence on the environment for food, culture, 

and way of life; their political and economic marginalization; existing social, health, and poverty 

disparities; as well as their frequent close proximity to exposed locations along ocean, lake, or 

river shorelines."1

 In addition, increasing temperatures and loss of Arctic sea ice increases the 

risk of drowning for those engaged in traditional hunting and fishing.

Overall, the EPA finds that the information provided by the commenters are generally consistent 

with and does not alter the 2009 Endangerment Finding that climate change will have a negative 

impact on human health and welfare.

Comment 19: Commenters cited 28 articles claiming that any Arctic and Antarctic impacts 

(including ice and non-arctic glaciers) have been overstated and are not linked to warming. 

Response 19: There is clear evidence of climate change impacts in the Arctic and Antarctic. EPA 

has described these impacts previously in the 2009 Endangerment Finding, and more recent 

impacts are described in Section II.A of the preamble of this rule based on more recent climate 

 

1

IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part B: Regional 

Aspects. Contribution of Working Group II to the Fifth Assessment Report of the 

Intergovernmental Panel on Climate Change [Barros, V.R., C.B. Field, D.J. Dokken, M.D. 

Mastrandrea, K.J. Mach, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. 

Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)]. 

Cambridge University Press, Cambridge, p. 1581. 
25 

change assessment reports. Notable impacts in these regions discussed in the preamble include 

an accelerating rate of ice loss from the Greenland and Antarctic ice sheets (since 2002, 215 

gigatons per year and 147 gigatons per year respectively, contributing to global sea level rise), 

continued decline of Arctic sea ice (3.5 to 4.1 percent per decade, including a record low extent 

in 2012 at 40 percent below the 1979-2000 median), increasing permafrost temperatures in most 

regions including Alaska, and decreasing annually-averaged Northern Hemisphere snow cover 

extent. These observations are not in dispute in the scientific community. These trends are strong 

evidence of warming in these regions, which is further confirmed by surface, ocean, and satellite 

based temperature measures. Articles provided by the commenters generally addressed small 

regions such as the Karkoram glaciers rather than global glacier trends, address individual 

mechanisms such as the surface mass balance of an ice sheet rather than the net change in ice 

sheet mass which is the result of the sum of all relevant mechanisms, or are irrelevant to 

detecting and attributing trends or making projections. Additionally, the articles provided by the 

commenters have been considered in the process of developing the conclusions presented in the 

assessment literature. 

Comment 20: Several commenters criticized the EPA’s approach of relying on the major 

scientific assessments, arguing that the IPCC and the USGCRP assessments are deeply flawed. 

Commenters recommended withdrawing the rule until the EPA can make a new scientific 

assessment of the impacts of climate change. Alleged flaws in the IPCC that were highlighted by 

the commenters included the argument that the IPCC does not present a complete picture of the 

scientific understanding of climate change or the ability of the environment and humans to adapt 

to changes, that the IPCC has retracted findings, arguments that the IPCC process is not 

scientifically rigorous and may be biased, and quotes from IPCC authors that expressed concern 

over the politicized nature of the IPCC. Regarding the USGCRP, commenters stated that during 

the public comment period for the National Climate Assessment they had submitted 

overwhelming evidence that the USGCRP report was biased and incomplete, especially 

regarding the ability of Americans to adapt to climate change. Therefore, the commenters argued 

that the NCA should not be relied upon by the EPA. 

Response 20: The major scientific assessments of the USGCRP, IPCC, and the NRC are 

comprehensive in their coverage of GHG and climate change issues, have gone through rigorous 

and exacting peer review by the expert community, and have gone through rigorous levels of 

U.S. government review. Therefore, it is appropriate for the EPA and the Administrator to rely 

on these assessments to provide the technical and scientific information that informs the 

Administrator’s judgment regarding the question of whether GHGs endanger public health and 

welfare. 

The EPA has previously responded at length to critiques of the IPCC and the reliance upon the 

assessments in both the Response to Comments for the 2009 Endangerment Finding (Volume 1 

in particular) and the 2010 Response to Petitions (Volumes 2 and 3). The EPA has reviewed 

alleged errors in the IPCC assessments and found that the limited examples of documented errors 

from the Fourth Assessment Report did not call into question the fundamental and broad 

evidence on which the Endangerment Finding rests. Multiple independent reviews of the IPCC 

by external organizations found no evidence that the scientific conclusions of the IPCC were 
26 

flawed. The USGCRP assessments go through a formal peer review by the National Research 

Council of the National Academies of Science, a public comment review process and 

interagency review. The National Climate Assessment appropriately addressed public comments 

received, adhering to transparency requirements for a major assessment document and the EPA 

finds that the final product is an accurate and unbiased synthesis of the scientific literature. 

In 2009, the EPA described the review and development processes that each of the assessments 

go through, and the numerous levels of review that these assessments undergo make them 

appropriate sources of scientific information. The approach taken by the EPA of relying on these 

assessments was validated in 2012 by the U.S. Court of Appeals for the D.C. Circuit (684 F.3d 

102). 

Since the 2012 decision, several new assessments have been released which improve 

understanding of the climate system, projected climate change impacts, and the significant 

human contribution to climate change. The new assessments strengthen the case that GHGs 

endanger public health and welfare both for current and future generations, as summarized in 

Section II.A of the preamble. The agreement between assessments developed by three different 

national and international scientific organizations is further evidence for the strength of the 

science upon which the EPA relies. 

The commenters have raised no arguments different from those already considered and rejected 

previously. Therefore, the EPA will continue to rely on the major scientific assessments to 

support its scientific determinations. 

Comment 21: Several commenters called attention to the role of CPP in meeting global climate 

targets, expressed as either global average temperature thresholds or atmospheric concentration 

levels; in particular, these commenters questioned whether CPP goes far enough given what may 

be needed, globally, to achieve targets that have either been identified in the scientific literature 

or in international negotiations. 

Different commenters cited different targets that they argue need to be met. Several commenters 

discussed the 2 degree target based on the 2009 Copenhagen Accord and other sources. Other 

commenters cited a 450 ppm CO2 target (some of whom state that this concentration is 

consistent with the 2 degree target). Some commenters argued for a tighter target of 350 ppm 

CO2 and, related, a 1 degree long-term temperature rise. These commenters argued that a failure 

to meet the appropriate temperature or concentration targets will lead to exceeding safe 

temperature levels with potentially catastrophic consequences. Commenters stated that a World 

Bank study concluded that humans might not be able to adapt to a 4 degree temperature increase.

The commenters then discussed which emissions pathways the globe would need to meet in 

order to achieve the targets, with several commenters citing an 80 percent decrease in CO2 

emissions from industrialized nations by 2050 or a 40-70 percent decrease globally. Commenters 

also noted that emission levels near zero would be necessary by 2100. Commenters discussed the 

importance of the power sector in terms of its contributions to CO2 emissions. Commenters 

requested that the EPA compare the CPP to these emissions trajectories, and some commenters 
27 

urged the agency to strengthen the CPP in order to align the future emissions trajectories with 

some of these stabilization scenarios. 

Response 21: EPA agrees that the climate change problem is global in nature, very serious, and 

that actions on the part of the United States and other countries around the world are needed to 

avoid the most serious and long-term risks associated with human-induced climate change. EPA 

also thinks that the CPP is a major, but not the only, component of what the United States must 

do to do its part to tackle global climate change. The CPP is addressing the largest source of U.S. 

CO2 emissions. In fact, EPA views the CPP as a major element of the U.S. domestic strategy that 

will in turn make the U.S. a credible world leader in addressing climate change.

We disagree with some of comments, however, that judge the CPP as inadequate by measuring 

its ambition level against what we view as an unfair yardstick – global-scale climate targets. We 

are of course aware of the global 2 degree Celsius goal that has been put forward under the 

UNFCCC negotiations. However, the CPP falls under a specific section, 111(d), of the Clean Air 

Act and therefore meets requirements of that section. As such, CPP addresses the electric power 

sector of the U.S. Commenters failed to note requirements of the Act and any additional actions 

that EPA is already undertaking to reduce GHG emissions in other important source sectors of 

the U.S. (e.g., stronger fuel economy standards for cars and trucks, and actions to reduce HFC 

and methane emissions). Furthermore, commenters failed to acknowledge the broader U.S. 

Government’s role in tackling climate change (see, for example, the President’s Climate Change 

Action Plan), including efforts to achieve a robust international agreement under the UNFCCC in 

Paris at the end of this year. 

EPA does not - and is not required to, under the Clean Air Act - hold a position on what specific 

level of atmospheric CO2 concentrations represents a specific threshold or safe versus unsafe 

levels. Similar questions and comments arose in response to EPA’s proposed GHG 

endangerment finding under Section 202 of the Act in 2009. EPA stated then that the Agency 

does not need to define a specific level below which there is not endangerment – the issue before 

EPA for that finding was to judge whether the current and projected future air pollution of 

elevated concentrations of GHGs endangers. EPA did so and made the endangerment finding in 

2009 under Section 202 of the Act. Here, tying CPP to specific global atmospheric CO2 targets is 

not germane or required. 

8.7.2 Monetized Climate Benefits 

Comment 1: Many commenters discussed the methodology used to develop the SCC estimates, 

in particular the integrated assessment modes (IAMs) used to estimate the SCC, and provided a 

wide range of perspectives and technical input on how to further refine the SCC estimates. In 

particular, some commenters recommended improvements to the existing IAMs and their 

damage functions, which monetize the damages associated with the physical impacts of climate 

change. 

Choice of IAMs used to estimate the SCC
28 

Some commenters were generally supportive of the choice of the three IAMs used in developing 

the SCC. For example, a letter signed by several commenters noted that these IAMs are 

"reasonably based on current scientific and economic knowledge" and are "widely cited and 

accepted in the academic community." Some commenters said the models reflect "the best 

available, peer-reviewed science to tally the benefits and costs of specific regulations with 

impacts on CO2 emissions. The IAMs include benefits and costs that have been quantified to 

date." Other commenters stated that the three IAMs used to estimate the SCC "represent the best 

tools currently available for determining an appropriate SCC." 

Commenters voiced concern that the economic damages estimated by the IAMs are too uncertain 

to be useful for policy analysis. Several of these commenters included quotations from Pindyck 

(2013) and argued that the current IAMs and their damage functions lack sufficient theoretical or 

empirical foundations, and concluded that the damage functions are arbitrary. Commenters 

suggested that one or more of the models should be rejected. 

Finally, a few commenters suggested that other IAMs should be considered for any future SCC 

updates, specifically the Environmental Impact and Sustainability Applied General Equilibrium 

(ENVISAGE) model and also the Climate and Regional Economics of Development (CRED) 

model. 

Recommendations for improving the IAMs or damage functions

Commenters suggested improvements to one or more of the models, including the models’ 

damage functions, before future SCC updates. In particular, commenters believed that the current 

SCC estimates underestimate the damages and that the potential benefits of the rulemaking 

should be higher. These commenters attributed the underestimation to incomplete or missing 

treatment of a number of damage categories in the IAMs. Commenters added suggestions for 

additional damage categories include: ocean acidification, spillover effects from displaced 

persons, increased variability in weather patterns, wildfires, "catastrophic" damages stemming 

from exceedance of various "tipping points," loss of species and habitat diversity, cultural 

impacts, health effects from increased air pollution, and impacts on global security, among 

others. 

Commenters recommended re-evaluating the specific functional form assumptions in IAMs, for 

example, the assumption of substitutability across economic sectors rather than limited 

substitutability. 

Commenters further noted that "The damage function used in the modeling platforms calculates 

the loss of GDP as a quadratic function of increased global surface temperature but does not 

properly account for economic damages that are likely to intensify at a much faster rate once the 

global surface temperature increases past approximately 3 degrees Celsius above pre-industrial 

levels." 

Commenters stated, "It is also important to recognize that many climate change impacts are 

difficult or impossible to quantify in a meaningful way, and it is critical that future estimates 

account for the non-monetizeable costs of CO2 emissions." As an example, the commenters 

cited IPCC research indicating dramatic decline in global biodiversity and states "This would not 
29 

only have dire economic consequences by drastically disrupting the food supply, but would also 

have immense non-monetizable consequences to our natural world and ecological heritage."

Commenters, however, stated that the SCC estimates do not accurately characterize the damage 

functions included in the models and that the modeling does not provide an acceptable range of 

accuracy for use in policymaking. For example, commenters submitted a joint letter that stated 

the modeling overestimates the probability of extreme events. 

Commenters stated that the results from the IAMs are highly sensitive not only to the model 

input parameters but also to how the models have been developed and what processes they try to 

include. Commenters also referenced a study that concluded IAMs and SCC cannot account for 

threshold effects or nonlinear changes that might be ascribed to additional emissions or emission 

reductions. These commenters disagreed with EPA’s use of the SCC estimates. 

Commenters discussed a recent EPRI report titled ‘Understanding the Social Cost of Carbon: A 

Technical Assessment’. The commenters stated that the USG SCC estimates are difficult to 

interpret and evaluate because the USG SCC estimates are the result of significant aggregation of 

global socioeconomic, climate, and damage modeling over 300 years and aggregation of results 

across three models (DICE, FUND, PAGE), over time, across scenarios, and across impact 

categories and regions. The commenters discussed how the EPRI report has evaluated each 

component of the SCC modeling causal chain as well as the overall experimental design, and 

how it aims to improve understanding of SCC modeling and estimates to inform public 

discussion and facilitate improved SCC analyses and climate change research broadly. The 

commenters provided the following recommendations: 

• Development of a new framework given the challenges associated with a multimodel approach, including inconsistencies, comparability, and independence. 

• External peer review of the modeling, uncertainties, results aggregation, and other 

elements to improve methods and provide the public with greater confidence in 

the resulting estimates. 

• Explicit peer review of the individual models, as is commonly done for other 

models used for regulatory processes.

Evaluation of the robustness of the USG SCC estimates to alternatives to establish confidence in 

the final estimates. 

Response 1: The comments mirror those submitted to the Office of Management and Budget’s 

separate comment solicitation on the SCC (78 FR 70586; November 26, 2013). As a member of 

the interagency working group (IWG) on SC-CO2, EPA has carefully examined and evaluated 

comments submitted to OMB’s separate solicitation. EPA has also carefully examined and 

evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the SC-CO2 methodology, including the models used to estimate the SC-CO2. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 
30 

them by reference.2 The remainder of this section elaborates on these comments in the context of 

this rulemaking. 

EPA appreciates the commenters’ recommendations for potential opportunities to improve the 

SC-CO2 estimates and has considered each one in the context of this rulemaking. EPA and other 

members of the IWG have reconfirmed their commitment to periodic review and update of the 

methodology and estimates to ensure that they continue to reflect the best available science and 

economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.3 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

 

2

 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 6 to 11 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 

3

 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
31 

Choice of IAMs used to estimate the SC-CO2.

EPA agrees with the commenters who regard the selection of the three IAMs—DICE, FUND, 

and PAGE—as the most appropriate for the purpose of estimating the SC-CO2. EPA and all of 

the other IWG members made this determination when they began developing the SCC estimates 

in 2009-2010. DICE, FUND, and PAGE are the most widely used and widely cited models in the 

economic literature that link physical impacts to economic damages for the purposes of 

estimating the SCC. As stated in the 2010 TSD:

These models are frequently cited in the peer-reviewed literature and used in the IPCC 

assessment. ... These models are useful because they combine climate processes, 

economic growth, and feedbacks between the climate and the global economy into a 

single modeling framework. ... Other IAMs may better reflect the complexity of the 

science in their modeling frameworks but do not link physical impacts to economic 

damages.4

In addition, the National Academies of Science (NAS) identified these three models as "the most 

widely used impact assessment models" in a 2010 report (NAS, 2010). Furthermore, in a 

comprehensive literature review and meta-analysis conducted in 2008, the vast majority of the 

independent impact estimates that appeared in the peer-reviewed literature were derived from 

FUND, DICE, or PAGE (Tol, 2008).

While the development of the DICE, FUND and PAGE models necessarily involved 

assumptions and judgments on the part of the modelers, the damage functions are not simply 

arbitrary representations of the modelers’ opinions about climate damages. Rather they are based 

on a review by the modelers of the currently available literature on the effects of climate change 

on society. The conclusions that the modelers draw from the literature, and the bases for these 

conclusions are documented, and all three models are continually updated as new information 

becomes available. While EPA recognizes that there are limitations with these models, including 

some of those discussed in Pindyck (2013), nonetheless IAMs provide valuable information for 

regulatory impact analysis. In a recent article in the peer-reviewed literature, Weyant (2014) 

addressed this issue as follows: 

While Pindyck’s observations about the empirical weaknesses of IAMs or calculations of 

the SCC are worthy of careful study, the conclusion that IAMs are therefore useless 

fundamentally misconceives the enterprise. IAMs and the [SC-CO2] are conceptual 

frameworks for dealing with highly complex, non-linear, dynamic, and uncertain 

systems. The human mind is incapable of solving all the equations simultaneously, and 

 

4 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-ofCarbon-for-RIA.pdf 
32 

modeling allows making "If..., then..." analyses of the impacts of different factors. The

models have provided important insights into many aspects of climate-change policy. 

EPA thus believes that it was appropriate for the IWG to base the SC-CO2 estimates on the 

DICE, FUND and PAGE models. Moving forward, EPA will continue to follow and evaluate the 

latest peer reviewed literature applying IAMs. As previously noted, EPA and all of the other 

IWG members will seek external expert advice on the technical merits and challenges of using 

additional models (e.g., CRED, ENVISAGE) to estimate the SC-CO2 and/or removing existing 

models from the ensemble (DICE, FUND, and PAGE) used to estimate the SCC. 

Improving the IAMs or damage functions 

To date, EPA and the other members of the IWG have accepted the models as currently 

constituted, and omitted any damages or beneficial effects that the model developers themselves 

do not include. EPA recognizes that none of the three IAMs fully incorporates all climate change 

impacts, either positive or negative. Some of the effects referenced by commenters (e.g., 

"catastrophic" effects, disease, and CO2 fertilization) are explicitly modeled in the damage 

functions of one or more of the current models (although the treatment may not be complete), 

and the model developers continue to update their models as new research becomes available. In 

fact, EPA and all of the other IWG members undertook the 2013 revision because of updates to 

the models, which include new or enhanced representation of certain impacts, such as sea level 

rise damages. In addition, some of the categories mentioned by commenters are currently 

speculative or cannot be incorporated into the damage function for lack of appropriate data. 

Using an ensemble of three different models was intended to, at least partially, address the fact 

that no single model includes all of the impacts. EPA recognizes that there may be effects that 

none of the three selected models addresses (e.g., impacts from ocean acidification) or that are 

likely not fully captured (e.g. catastrophic effects). 

EPA agrees that it is important to update the SC-CO2 periodically to incorporate improvements 

in the understanding of greenhouse gas emissions impacts and will continue to follow and 

evaluate the latest science on impact categories that are omitted or not fully addressed in the 

IAMs. Also, EPA and all of the other IWG members will seek external expert advice on the 

technical merits and challenges of potential approaches to update the damage functions in future 

revisions to the SC-CO2 estimates. 

For EPA’s more detailed response to comments on treatment of CO2 fertilization in the IAMs, 

see 8.7.2, comment 6.

For EPA’s more detailed response to comments on peer review, see 8.7.2, comment 5.

For EPA’s more detailed response to comments on aggregation issues, see 8.7.2, comment 8.

Recommendations and comments regarding socioeconomic scenarios.

The rationale for using the EMF-22 scenarios is explained in the 2010 TSD. In addition to the 

fact that they were recent, peer-reviewed, and publicly available, they had the key advantage that 

GDP, population, and emissions trajectories are internally consistent for each model and scenario 
33 

evaluated. As noted in the 2010 TSD, the scenarios used "span a wide range, from the more 

optimistic (e.g. abundant low-cost, low-carbon energy) to more pessimistic (e.g. constraints on 

the availability of nuclear and renewables)."

Regarding the inclusion of a scenario associated with stabilization of atmospheric concentrations 

of GHGs at 550 ppm CO2-e, the 2010 TSD clearly notes that this is "not derived from an 

assessment of what policy is optimal from a benefit-cost standpoint. Rather, it is indicative of 

one possible future outcome." As noted above, OMB guidance in Circular A-4 states that the 

correct baseline for regulatory impact analysis is an agency’s best assessment of the state of the 

world without the regulation, and specifically states that this may include the potential for new 

domestic and foreign policies that would occur absent the regulation. Including a scenario 

representative of future mitigation actions is consistent with this guidance, as long as those future 

policy actions are expected to occur with or without the regulation under examination. As 

explained in the 2010 TSD, the IWG aimed to select scenarios that span most of the plausible 

range of outcomes for the socioeconomic variables. Given the level of uncertainty in these 

trajectories, the IWG felt that it was appropriate to consider a trajectory with significant global 

mitigation, assuming that this is a distinct possibility even in the absence of U.S. actions. 

Because there were five scenarios, and each received equal weighting, the stabilization scenario 

received 20% of the total probability weight. 

Regarding potential inconsistencies between scenarios and IAMs, given the nature of estimating 

the SC-CO2 and available data/resources, a full harmonization along all possible dimensions of 

the three IAMs used to estimate the SC-CO2 with the four models used to develop the scenarios

was not possible. Therefore, the IWG chose to harmonize the models with respect to the scenario 

variables to which SC-CO2 estimates are most sensitive (GDP, population, and emissions) using 

common techniques in the literature. The scenarios used were developed by highly respected 

international modeling groups and published in the peer-reviewed literature. In terms of potential 

inconsistencies across scenario variables past 2100, an effort was made to account for some basic 

correlations among scenario variables in the post-2100 extrapolation. For example, 

extrapolations were based on GDP per capita growth, which implicitly correlates population and 

GDP growth, rather than GDP levels or growth alone. Similarly, extrapolations were based on 

CO2 emissions intensity with respect to GDP, which correlates emissions and GDP growth, 

rather than CO2 emissions levels or growth alone. 

Consistent with historical observations, it is expected that growth rates of rapidly developing 

economies will exceed those of already developed economies in the near term. Scenarios with 

projections of global economic growth that exceed recent trends in developed economies are 

consistent with this expectation.

The chosen scenarios capture a wide range of potential future states of the world, but were not 

intended to represent a comprehensive accounting of the full range of uncertainty, and therefore 

it is possible that future outcomes will fall outside of this range. EPA and the members of the 

IWG have acknowledged that the projection of the scenarios beyond 2100 has greater 

uncertainty than shorter-term projections and will continue to monitor the literature, including 

the development of extended RCP/SSP scenarios, for ways to improve the estimated trajectories 

and improve internal consistency. 
34 

Comment 2: Most of the comments on the climate science components of the SC-CO2 modeling 

addressed the specification of the equilibrium climate sensitivity parameter though some others 

discussed the formulation and parameterization of other physical science components in the 

IAMs. In addition, a number of the commenters generally encouraged continued updating of the 

SC-CO2 to maintain the best scientific understanding of the relevant earth system processes as 

new findings emerge. Some commenters stated that EPA did not use the latest climate science 

findings from the IPCC as part of its assessment of the proposal’s benefits and costs and, in one 

commenter’s view, there are significant differences between AR5 and AR5 related to climate 

impacts. In particular, these commenters stated that "AR5 moderates many of the key findings of 

AR4 which drives the damage functions used in the integrated assessment models" and presents 

excerpts from AR5 and AR4 about five findings (anthropogenic global warming, rate of 

warming extreme temperatures, equilibrium climate sensitivity, and tropical cyclone activity). 

Climate sensitivity. The equilibrium climate sensitivity (ECS) parameter is a measure of the 

climate’s responsiveness to increased concentrations of greenhouse gases in the atmosphere. 

Specifically, the ECS is the long-term increase in the annual global-average surface temperature 

from a sustained doubling of the atmospheric CO2 concentration relative to pre-industrial levels. 

Commenters supported the Interagency Working Group (IWG) approach of calibrating the 

distribution of Roe and Baker (2007) to the IPCC (2007) Fourth Assessment Report (AR4) 

consensus statement on the ECS. However, commenters suggested updating this modeling input. 

Commenters suggested incorporating new research published since the 2010 TSD was released. 

Commenters noted that in its Fifth Assessment Report the IPCC has revised its discussion of the 

likely range of climate sensitivity compared to AR4 (IPCC 2013). Commenters said that use of 

the ECS from AR4 does not satisfy EO 12866 requirements for proposed rules to be based on the 

best science available. Commenters pointed to individual papers, such as Otto et al. (2013), 

which present lower and more constrained probability density functions (pdfs) than either the 

AR4 or AR5 consensus statements, in support of the commenters’ suggestion that the pdf used 

by the IWG was biased high. Several commenters noted in a joint letter that the treatment of 

climate sensitivity was appropriate but that the IWG could go further in highlighting the costs of 

fundamental uncertainties.

Commenters voiced general criticisms of the IWG approach to the ECS due to the uncertainty 

about the shape of the climate sensitivity distribution and the sensitivity of the SCC estimates to 

the specification of the ECS distribution. Commenters suggested that the IPCC has not made 

progress in reducing uncertainty about climate sensitivity and therefore the IPCC consensus 

should not be used. Commenters objected to the IWG use of the Roe and Baker (2007) 

distribution for the ECS. Commenters cited Pindyck (2013), stating that feedback loops within 

the climate system are largely unknown and therefore the shape of the distribution is unknown. 

Commenters suggested that Roe and Baker’s assumption of a normally distributed climate 

feedback factor may not be theoretically correct, and suggested the use of alternative 

distributions. The commenters were particularly concerned that the use of a right-skewed 

distribution for the ECS would lead to an overestimate of the mean SCC if the ECS distribution 

would be more appropriately modeled as symmetric, though some commenters suggested that 

the Roe and Baker approach correctly captured the right-skewed nature of the distribution.
35 

Commenters expressed concern about uncertainty and ECS stated that OMB and the IWG should 

reconsider the substance of its social cost of carbon TSDs as a whole and to take a closer look at 

the transparency, methodology, and assumptions that these commenters believe create a high 

level of uncertainty in the resulting estimates of the social cost of carbon. 

Other physical science components of the integrated assessment models. We define the physical 

science components of the models to include the modeling of physical impacts, such as changes 

in mean global temperature or sea level rise. This definition excludes the functions in the models 

that translate those physical endpoints into economic damages, which is addressed in the 

discussion of damage functions in 8.7.2, comment #1. Commenters expressed approval of the 

physical science components of the models but others criticized specific components as being 

overly simplified or incomplete. For example, some commenters suggested that the version of 

the DICE model used may overestimate sea level rise relative to AR5 projections or estimates 

projected by the MAGICC climate model because of DICE’s reliance on an outdated semiempirical methodology that uses models of reduced complexity in conjunction with statistical 

relationships between sea level and climate forcing.

5

 Commenters therefore concluded that the 

DICE overestimates the SCC. The commenters did not investigate the sea level rise projections 

from the FUND or the PAGE model, but suggested that such an analysis be carried out prior to 

making any judgments about the SCC estimates from those models. 

A group of commenters noted the need for more explicit representation of the potential for lowprobability, high impact "catastrophes," calling for better modeling of multiple "tipping points" 

at the climatic thresholds indicated by the most recent scientific literature. 

Response 2: All of the comments on the climate science components of the modeling underlying 

the SC-CO2 estimates mirror those submitted to the Office of Management and Budget’s 

separate comment solicitation on the SCC (78 FR 70586; November 26, 2013). As a member of 

the interagency working group (IWG) on SC-CO2, EPA has carefully examined and evaluated 

comments submitted to OMB’s separate solicitation. EPA has also carefully examined and 

evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the climate science components of the modeling underlying the SC-CO2. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 

 

5MAGICC is the Model for the Assessment of Greenhouse Gas Induced Climate Change. For 

more information see Meinshausen et al. (2011). 
36 

them by reference.6 The remainder of this section elaborates on these comments in the context 

of this rulemaking. 

EPA appreciates the commenters’ recommendations for potential opportunities to improve the 

SC-CO2 estimates and has considered each one in the context of this rulemaking. EPA and other 

members of the IWG have reconfirmed their commitment to periodic review and update of the 

methodology and estimates to ensure that they continue to reflect the best available science and 

economics. Furthermore, EPA and the other members of the IWG have determined that the SCCO2 methodological recommendations require additional research, review, and public comment 

before it can apply them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.7 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process.

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

 

6Referred to as the "OMB Response to Comments on SC-CO2." See pgs 11 to 17 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 

7See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
37 

Regarding comments on equilibrium climate sensitivity (ECS), the EPA is aware that this is an 

active area of research and as stated in OMB’s Response to Comments on the SC-CO2, the IWG

remains committed to updating the SC-CO2 estimates to incorporate new scientific information 

and accurately reflect the current state of scientific uncertainty regarding the ECS. While EPA 

agrees with commenters that the ECS distribution, along with other climate modeling inputs to 

the SCC calculation, should be updated periodically to reflect the latest scientific consensus, care 

must be exercised in selecting an appropriate range of estimates for this important parameter. 

Many studies estimating climate sensitivity have been published, based on a variety of 

approaches (instrumental record, paleoclimate observations, models, etc.). These individual 

studies report differing values and provide different information. Picking a single study from the 

high or low end of the range, or even in the middle, will exclude relevant information. A valid 

representation of uncertainty regarding climate sensitivity should be obtained from a synthesis 

exercise such as that done by the IPCC that considers the full range of relevant studies.

At the time the 2013 SC-CO2 update was released, the most authoritative statement about ECS 

appeared in the IPCC’s AR4. Since that time, as several commenters noted, the IPCC issued a 

Fifth Assessment Report that updated its discussion of the likely range of climate sensitivity 

compared to AR4. The new assessment reduced the low end of the assessed likely range (high 

confidence) from 2°C to 1.5°C, but retained the high end of the range at 4.5°C. Unlike in AR4, 

the new assessment refrained from indicating a central estimate of ECS. This assessment is based 

on a comprehensive review of the scientific literature and reflects improved understanding, the 

extended temperature record for the atmosphere and oceans, and new estimates of radiative 

forcing. 

Several of the post-AR4 studies highlighted by some commenters were cited in the AR5 

assessment. In particular, both Aldrin et al. (2012) and Otto et al. (2013) were cited in both 

Chapter 10 and Chapter 12 of the AR5 Working Group I assessment. Eight of the authors of Otto 

et al. (2013), including the lead author, were authors of Chapter 12 for AR5’s Working Group I 

and one was a lead author for the chapter. Hence it is clear that the IPCC considered Otto et al. 

(2013) in its synthesis of literature on the ECS. More broadly, the AR5 climate sensitivity 

distribution likely incorporates much of the literature identified by the commenters. EPA will 

continue to follow and evaluate the latest science on the equilibrium climate sensitivity. 

Furthermore, EPA and the other members of the IWG are seeking external expert advice on the 

technical merits and challenges of potential approaches prior to updating the ECS distribution in 

future revisions to the SC-CO2 estimates, including (but not limited to) using the AR5 climate 

sensitivity distribution for the next update of the SC-CO2.8

 

8

 The IWG announced plans to seek independent expert advice from National Academies of 

Sciences, Engineering, and Medicine in July 2015, 
38 

As discussed in Section II.A of the preamble, RTC section 8.7.1, the 2009 Endangerment 

Finding, and in the OMB RTC, among other resources, the links between CO2 and temperature 

are established beyond question by laboratory measurements, physical theory, paleoclimate 

observations, instrumental observations, and observations of other planets. Climate change and 

its impacts, such as sea level rise, have been exhaustively documented, and synthesized 

internationally by the IPCC and domestically by the U.S. National Climate Assessment. Based 

on the wide acceptance of these conclusions in the scientific community, EPA believes that: (1) 

anthropogenic emissions of greenhouse gases are causing atmospheric levels of greenhouse 

gases in our atmosphere to rise to levels unprecedented in human history; (2) the accumulation of 

greenhouse gases in our atmosphere is exerting a warming effect on the global climate; (3) there 

are multiple lines of evidence, including increasing average global surface temperatures, rising 

ocean temperatures and sea levels, and shrinking ice in glaciers, ice sheets, and the Arctic, all 

showing that climate change is occurring, and that the rate of climate change in the past few 

decades has been unusual in the context of the past 1000 years; (4) there is compelling evidence 

that anthropogenic emissions of greenhouse gases are the primary driver of recent observed 

increases in average global temperature; (5) atmospheric levels of most greenhouse gases are 

expected to continue to rise for the foreseeable future; and (6) risks and impacts to public health 

and welfare are expected to grow as climate change continues, and that climate change over this 

century is expected to be greater compared to observed climate change over the past century. 

While there are inherent uncertainties associated with modeling climate systems over long time 

spans, the general circulation models (GCMs) upon which estimates of ECS and other climate 

science research are based have been extensively evaluated. For example, since 1989 the DOE 

has had a large program (The Program for Climate Model Diagnosis and Intercomparison) 

dedicated to evaluating these models.

The ECS parameter is a useful parameter for summarizing the strength of the climate system’s 

response to accumulating GHG concentrations in the atmosphere. However, it is influenced by 

many highly complex and uncertain natural processes, some of which adjust over very long 

periods of time. Therefore, persistent uncertainty about the ECS is not surprising. Furthermore, 

persistent uncertainty does not suggest an absence of useful information. However, EPA does not 

agree that progress has not been made in reducing this uncertainty. Over the last 30 years the 

scientific community has elucidated many aspects of the climate system’s response to GHGs 

accumulating in the atmosphere. While the AR5 "likely" range is slightly larger than that of 

AR4, the assessment presented greater confidence in the tails. AR5 found that climate sensitivity 

is very unlikely to be greater than 6°C, whereas AR4 stated that the "lack of strong constraints 

 

https://www.whitehouse.gov/blog/2015/07/02/estimating-benefits-carbon-dioxide-emissionsreductions. 
39 

limiting high climate sensitivities prevents the specification of a 95th percentile bound." 

Similarly, while the AR5 and the IPCC’s (2001) Third Assessment Report (TAR) bounds look 

similar, the TAR bounds were presented as a range without estimated probabilities.

In response to the commenters citing Pindyck on climate feedbacks and the shape of the ECS 

distribution, we agree that potential climate feedbacks and their strength are uncertain. However, 

the IWG chose a distribution from the peer-reviewed literature based on its evaluation of the 

scientific literature and the relationship between this distribution and IPCC range of the ECS. 

Regarding the skewness of the calibrated ECS distribution, this characteristic is common among 

the many approaches that have been used to study the ECS distribution and is not unique to the 

theoretical approach used by Roe and Baker to define the functional form of their distribution. 

Consistent with the AR4 discussion on limiting the distribution to a range considered possible by 

experts, such as from 0°C to 10°C, the IWG truncated the distribution at 10oC (Hegerl 2007, p 

719). 

EPA disagrees with the comment that "AR5 moderates many of the key findings of AR4." This 

response (8.7.2, comment 2) has already discussed in detail EPA’s assessment of the AR5 

findings on climate sensitivity and the implications for the SC-CO2 estimates. The other 

examples given by the commenters—anthropogenic warming, rate of warming, extreme 

temperatures, and tropical cyclone activity—are not findings that have been moderated in AR5. 

In fact, AR5 strengthened the conclusions about attribution of anthropogenic global warming by 

accounting for pollutants with a cooling effect and by strengthening the likelihood of warming 

("very likely" in AR4 to "extremely likely" in AR5). Similarly, the AR5 findings on tropical 

cyclone activity strengthened from "suggestions" in AR4 to "virtually certain" increases in 

frequency and intensity of the strongest tropical cyclones in the North Atlantic basin. The 

remaining two examples given by the commenters highlight historical information, not 

projections. EPA further notes that the commenters have not identified or discussed whether and 

how these particular AR5 findings would affect the SC-CO2 estimates. 

In addition, EPA notes that Section II of the preamble discusses many new assessment reports 

published since the 2009 Endangerment Finding, including the recent USGCRP’s 2014 Third 

National Climate Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and 

IPCC’s 2012 "Special Report on Managing the Risks of Extreme Events and Disasters to 

Advance Climate Change Adaptation" (SREX). Section II of the preamble highlights changes, 

such as sea level rise, and cites the confidence in human attribution. The preamble concludes 

that the "findings of the recent scientific assessments confirm and strengthen the conclusion that 

greenhouse gases endanger public health, now and in the future." See also section 8.7.1, 

comment 3, of this RTC for EPA’s response to comments about use of the latest climate science, 

including AR5 findings, in analyses separate from the IWG SC-CO2 estimates. Section 8.7.2, 

comment 1, provides a detailed response to comments on the methodology, including the 

damage functions in the integrated assessment models, used to estimate the SC-CO2. Section 

8.7.2, comment 5 provides a detailed response to comments regarding the transparency of the 

SC-CO2 process.

Other physical science components of the integrated assessment models.
40 

A key objective of the IWG was to draw from the insights of the three models while respecting 

the different approaches to linking GHG emissions and monetized damages taken by modelers in 

the published literature. After conducting an extensive literature review, the interagency group 

selected three sets of input parameters (climate sensitivity, socioeconomic and emissions 

trajectories, and discount rates) to use consistently in each model. All other model features were 

left unchanged, relying on the model developers’ best estimates and judgments, as informed by 

the then-current literature. While the IAMs are periodically updated, the rapid pace of research in 

the area of climate science means that at any given time there may be new research that has not 

yet been incorporated into one or more models. Thus, while a given model may not always 

reflect the most recent research regarding any given climate subsystem, the IWG concluded that, 

at the time, the IAMs collectively represented the state of the science by bringing all these 

systems together into a single framework.9

A benefit of using an ensemble of three models is that they cover a range of potential outcomes 

as expressed in the literature. For example the three models used collectively span a range of 

carbon cycle and climate change responsiveness that reflects the uncertainty in the literature. 

With regards to comments on the temperature response function, the past 15 years of observed 

atmospheric temperatures cannot be compared directly to climate model simulations because (1) 

observed temperatures were influenced by volcanic eruptions that were not included in 

simulations because the timing and spatial distribution of eruptions are not known in advance; 

and (2) the last 15 years of atmospheric temperatures have been strongly influenced by natural 

climate variability due to oceanic fluctuations, such as the El Niño Southern-Oscillation; models 

include this variability, but no attempt is made to synchronize the models’ timing of this 

variability with observed variability. In other words, while the models incorporate variability 

around a trend over time, they cannot predict how that variability affects measured temperatures 

in a specific year.

Regarding the criticisms by commenters of the sea level rise projections in DICE, EPA 

recognizes that sea level rise projections are also an area of ongoing research. One key issue 

involves projections of melt from the Greenland and West Antarctic ice sheets. The IPCC AR5 

report notes there is a possibility of sea level rise "substantially above" their best estimate of a 

likely range because of uncertainties regarding the response of the Antarctic ice sheet (AR5 

Working Group I, Chapter 13). In AR5 the IPCC also discusses semi-empirical methods, stating 

a low confidence in projections based on such methods, which calibrate a mathematical model 

 

9As previously noted, EPA is a member of the IWG and has reviewed the IWG modeling 

decisions in the context of this rulemaking. EPA concurs with the IWG’s conclusion that it is 

reasonable, and scientifically appropriate, to use the current SC-CO2 estimates for purposes of 

regulatory impact analysis, including for this proceeding. 
41 

against observations rather than projecting individual processes. However, the IPCC did not 

entirely discount these methods. Further supporting the use of semi-empirical methods, the U.S. 

National Climate Assessment uses an average of the high end of semi-empirical projections in 

order to define their "Intermediate-High" Scenario (Parris et al., 2012). Therefore, it is 

reasonable for one out of three models used by the IWG to include some reliance upon semiempirical methods.

EPA is aware that more sophisticated yet still relatively simplified climate models, such as 

MAGICC, could be used to replace the highly simplified climate science components of the 

three IAMs. However, given the range of climate models available and the technical issues 

associated with such a change, replacing the climate modules or other structural features of the 

IAMs requires additional investigation before it can be applied to SCC estimation. EPA will 

continue to follow and evaluate the latest science on climate modeling and, along with other 

members of the IWG, is seeking external expert advice on the technical merits and challenges of 

potential approaches to updating this component of the IAMs in future revisions to the SCC 

estimates. 

We agree with the commenters who suggested the IAMs do not fully capture the impacts 

associated with changes in climate variability and weather extremes. For example, as discussed 

in the 2010 TSD, the calibrations in FUND and DICE do not account for increases in climate 

variability that may occur and would affect the agricultural sector. Similarly, we agree that the 

models’ functional forms may not adequately capture potentially discontinuous "tipping point" 

behavior in Earth systems. In fact, large-scale earth system feedback effects (e.g., Arctic sea ice 

loss, melting permafrost, large scale forest dieback, changing ocean circulation patterns) are not 

modeled at all in one IAM, and are imperfectly captured in the others. This limitation of the three 

IAMs is discussed extensively in the 2010 TSD, and again in the 2013 update. The SC-CO2

estimate associated with the 95th percentile of the distribution based on the 3 percent discount 

rate is included in the recommended range partly to address this concern. EPA and the other 

members of the IWG will continue to follow and evaluate the latest science on climate 

variability and potential tipping points, and seek external expert advice on the technical merits 

and challenges of potential approaches to improve the representation of these components of the 

modeling in future revisions.

Comment 3: Many commenters discussed the scope of the SCC estimates, specifically whether 

damages experienced outside U.S. borders should be considered in domestic regulatory analysis. 

Commenters that supported use of global SCC estimates explained that climate change is a 

global commons problem because carbon pollution does not remain within one country's borders, 

and that the use of global damages in the SCC is consistent with the economic theory of the 

commons. These commenters further stated that if damage estimates are limited to only those 

within each country's borders, any actions based on those estimates would lead to a collective 

failure to optimally mitigate GHG emissions. Commenters referred to the importance of this 

effect by stating that the consideration of global damages in domestic rulemaking can be based 

on an expectation of reciprocity from other countries. Commenters stressed the importance of the 

use of global SCC estimates as a tool in international negotiations. Finally, commenters offered 

other reasons for considering damages in regions outside of the United States, including liability, 
42 

national security concerns, trade-related "spillover effects," and the principle in international 

environmental law of reducing cross-border harm. 

In addition, commenters interpreted use of a global SCC as consistent with Clean Air Act 115. 

Commenters stated "The U.S. National Environmental Policy Act recognizes 'the worldwide and 

long-range character of environmental problems' and requires federal agencies to include 

reasonably foreseeable transboundary effects in their environmental impact statements." "Section 

115 of the CAA directs EPA and the states to mitigate U.S. emissions that endanger foreign 

health and welfare. The global perspective on climate costs and benefits required by that 

provision should inform all regulatory actions developed under the CAA."

Commenters, however, disagreed with the use of a global SCC estimate and stated that domestic 

damage estimates should be used instead. Some commenters stated that use of a global SCC to 

compare international benefits and domestic costs was arbitrary and capricious and contrary to 

law and federal policy. Commenters stated they "do not believe EPA has the authority to 

regulate GHG emissions outside the fenceline." Some commenters presented assumptions about 

the U.S. fraction of a global SCC estimate (e.g., U.S. SCC as 7 percent of the global SCC) and 

used those assumptions to recalculate the climate benefits of the proposal.

Several commenters stated that use of the global SCC violated section 115 of the Clean Air Act. 

For example, commenters stated that Section 115(a) specifically requires that when the 

Administrator of the EPA "has reason to believe that any air pollutant or pollutants emitted in the 

U.S. cause or contribute to air pollution which may be reasonably anticipated to endanger public 

health or welfare in a foreign country or whenever the Secretary of State requests him to do so 

with respect to pollution which the Secretary of State alleges is of such a nature, the 

Administrator shall give formal notification thereof to the Governors of the State in which such 

emissions originate." "Without such actions, EPA is forbidden from counting these harms or 

benefits in its analysis."

Similarly, other commenters stated that Section 115 of the Clean Air Act outlines EPA's required 

steps for addressing U.S. -originated pollution for the purpose of mitigating impact on public 

health and welfare in foreign countries. The commenters said that Section 115 clearly states that 

EPA must formally notify the Governors of the offending States to submit a plan under section 

110. The commenters said that in order for EPA to count international benefits under 111(d) and 

thus justify its rulemaking, the plain language of Act requires EPA to first list CO2 (and/or other 

GHGs) as a criteria pollutant, establish a limit and then direct States to develop plans and that no 

such steps have been taken by EPA. The commenters clarified that as per Section 115, EPA may 

only proceed with mitigating impacts on countries with which the U.S. has established 

reciprocity agreements.

In addition, commenters stated that domestic SCC estimates must be used in RIAs to ensure 

consistency with OMB Circular A-4 requirements. 

Additional excerpts from commenters that disagreed with use of a global SCC:

Commenters also stated "In a statutory purpose statement accompanying the subchapter of which 

CAA Section 111(d) is a part, Congress made clear that its purpose is to benefit the national 
43 

environment - not the world at large." The commenters also stated "EPA's reliance on global 

climate change effects to justify its rule is inconsistent with the agency's former acknowledgment 

that for rulemaking under the CAA, foreign effects are not relevant in themselves but only 

insofar as they impact the U.S." 

Commenters also stated "EPA attempts to justify its reliance on foreign benefits by the 

observation that 'we expect other governments to consider the global consequences of their 

greenhouse gas emissions when setting their own domestic policies.' But of course EPA has no 

power to control whether foreign countries regulate greenhouse gases at all, much less how they 

calculate the benefits of their own regulation." "In the absence of... reciprocal action by other 

nations... the global benefits of SCC cannot be regarded as a legitimate entry in the benefit-cost 

ledger." 

Response 3: The comments regarding the scope of the SC-CO2 estimates mirror those submitted 

to the Office of Management and Budget’s separate comment solicitation on the SC-CO2 (78 FR 

70586; November 26, 2013). As a member of the interagency working group (IWG) on SC-CO2, 

EPA has carefully examined and evaluated comments submitted to OMB’s separate solicitation. 

EPA has also carefully examined and evaluated all comments received regarding SC-CO2

through this rulemaking process and determined that the IWG responses to the comments on the 

OMB solicitation address the comments on the scope of SC-CO2 estimates and use of the 

estimates in this RIA. Specifically, EPA concurs with the IWG’s response to these comments 

and hereby incorporates them by reference.10 

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.11

 

In addition, the comments regarding consistency with OMB Circular A-4 are addressed in 8.7.2, 

comment 5. The remainder of this section elaborates on these comments in the context of this 

rulemaking.

 

10Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 30 to 32 

at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 

11See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
44 

EPA agrees with the commenters stating that a focus on global SC-CO2 estimates in RIAs is 

appropriate. As discussed in the 2010 TSD, the IWG determined that a global measure of SCCO2 is appropriate in this context because emissions of most greenhouse gases contribute to 

damages around the world and the world’s economies are now highly interconnected. To reflect 

the global nature of the problem, the SC-CO2 incorporates the full damages caused by CO2

emissions and other governments are expected to consider the global consequences of their 

greenhouse gas emissions when setting their own domestic policies. 

As stated in the OMB Response to Comments on SC-CO2, if all countries acted independently to 

set policies based only on the domestic costs and benefits of carbon emissions, it would lead to 

an economically inefficient level of emissions reductions which could be harmful to all 

countries, including the United States, because each country would be underestimating the full 

value of its own reductions. This is a classic public goods problem because each country’s 

reductions benefit everyone else and no country can be excluded from enjoying the benefits of 

other countries’ reductions, even if it provides no reductions itself. In this situation, the only way

to achieve an economically efficient level of emissions reductions is for countries to cooperate in 

providing mutually beneficial reductions beyond the level that would be justified only by their 

own domestic benefits. By adopting a global estimate of the SC-CO2, the U.S. government can 

signal its leadership in this effort. In reference to the public good nature of mitigation and its role 

in foreign relations, thirteen prominent academics noted that these "are compelling reasons to 

focus on a global [SC-CO2]" in a recent article on the SC-CO2 (Pizer et al., 2014). In addition, as 

noted by commenters, there is no bright line between domestic and global damages. Adverse 

impacts on other countries can have spillover effects on the United States, particularly in the 

areas of national security, international trade, public health and humanitarian concerns. 

GHG emissions in the United States will have impacts abroad, some of which may, in turn, 

affect the United States. For this reason, a purely domestic measure is likely to understate actual 

impacts to the United States. Also, as stated above, the EPA and the other members of IWG 

believes that accounting for global benefits can encourage reciprocal action by other nations, 

leading ultimately to international cooperation that increases both global and U.S. net benefits 

relative to what could be achieved if each nation considered only its own domestic costs and 

benefits when determining its climate policies. 

Further, as explained in the 2010 TSD, from a technical perspective, the development of a 

domestic SC-CO2 was greatly complicated by the relatively few region- or country-specific 

estimates of the SC-CO2 in the literature, and impacts beyond our borders have spillover effects 

on the United States, particularly in the areas of national security, international trade, and public 

health. As a result, it was only possible to include an "approximate, provisional, and highly 

speculative" range of 7 to 23 percent for the share of domestic benefits in the 2010 TSD. This 

range was based on two strands of evidence: direct domestic estimates resulting from the FUND 

model, and an alternative approach under which the fraction of GDP lost due to climate change 

is assumed to be similar across countries. 

Regarding the comments on Clean Air Act Section 115 and the implications for use of a global 

SC-CO2, EPA notes that these commenters read into section 115 limitations and requirements 

that do not appear in the statutory text. 
45 

Section 115(a) of the Clean Air Act requires the Administrator to give formal notification to the 

Governor of a State in a very specific and limited circumstances. Specifically, the provision 

provides: "Whenever the Administrator, upon receipt of reports, surveys or studies from any duly 

constituted international agency has reason to believe that any air pollutant or pollutants emitted 

in the United States cause or contribute to air pollution which may reasonably be anticipated to 

endanger public health or welfare in a foreign country or whenever the Secretary of State 

requests [her] to do so with respect to such pollution which the Secretary of State alleges is of 

such a nature, the Administrator shall give formal notification thereof to the Governor of the 

State in which such emissions originate." Section 115(b) further provides that notices issued 

under 115(a) are deemed to be findings under section 110(a)(2)(H)(ii) of the Clean Air Act and 

thus any state receiving such a notice must revise its state implementation plan to address the 

offending emissions. 

Section 115(c), in turn, provides that the section only applies "to a foreign country which the 

Administrator determines has given the United States essentially the same rights with respect to 

the prevention or control of air pollution occurring in that country as is given that country by this 

section." In other words, unless the Administrator determines a foreign country has given the 

United States the same rights section 115 gives to foreign countries, the Administrator is not 

required issue any notification that would otherwise be required under 115(a). Contrary to the 

commenters’ assertion, section 115 does not mention or refer to "reciprocity agreements." 

Moreover, section 115(c) does not in any way limit the Administrator’s discretion to act under 

other statutory provisions. It simply limits the reach of 115(a) by defining which countries are 

covered by the requirement for the Administrator to give formal notification under that section 

regarding pollution originating in the United States that affects health and welfare in a foreign 

country. 

There is also no support in section 115 or any provision of the Clean Air Act for the 

commenters’ assertion that EPA is forbidden from counting harms or benefits occurring in other 

countries without first taking action under section 115. Section 115 requires the Administrator to 

issue a formal notification in the limited set of specific circumstances outlined above and 

identifies the obligations that flow from the issuance of such notifications. It does not, as the 

commenters suggest, include language prohibiting the EPA from considering the impact of U.S. 

emissions on foreign countries in other contexts. Indeed, the United States has a long history of 

working together with other countries to address air quality issues. As explained above, the 

reciprocity provision in section 115(c) merely defines the applicability of section 115. Nothing 

in the text of the section addresses the extent to which EPA may consider or address the impacts 

beyond its borders that are related to air pollution originating in the United States, or suggests 

that action under section 115 is a prerequisite to counting international harms and benefits in any 

analysis.

Finally, there is no support for the assertion that section 115 requires EPA to list CO2 and/or 

other GHGs as criteria pollutants and notify state Governors to submit plans under section 110 

before taking any action to mitigate the impact of U.S. emissions on public health and welfare in 

foreign countries or counting international benefits in other rulemaking contexts. Not only does 

the limitation commenters identify simply not appear in the statutory text, but section 115(d) 

explicitly retains certain prior recommendations with respect to pollutants for which NAAQS 
46 

have not been established. It would be absurd to interpret a section that explicitly retains 

recommendations relating to the impact of non-NAAQS pollutants on foreign countries as 

prohibiting the Administrator from considering such impacts unless a NAAQS has been 

established for the pollutant. 

Regarding the comment that EPA lacks authority to regulate GHG emissions outside the 

fenceline, EPA notes that application of the SC-CO2 to estimate the social benefits of emission 

reductions is entirely separate from regulating emissions. Conducting an economic analysis does 

not confer any legal or regulatory obligations. See the preamble, including section IV, for 

discussion about the scope of the final rule and the legal justification. 

As stated in the OMB Response to Comments on SC-CO2, the IWG concluded that the only way 

to achieve an efficient allocation of resources for emissions reduction on a global basis is for all 

countries to base their policies on global estimates of damages. The IWG has therefore 

continued to recommend the use of global SC-CO2 estimates in regulatory impact analyses. EPA 

agrees with the IWG conclusion and has used the global SC-CO2 estimates in the RIA for this 

rulemaking. 

Comment 4: EPA received comments on the analyses and presentation of uncertainty in the 

TSD as well as comments regarding the implications of uncertainty for the use of SC-CO2

estimates in the RIA.

• Commenters stated "The [SC-CO2] is an important and accepted tool for 

regulatory policy-making based on well-established law and fundamental 

economics." "The legal and analytic basis for using the [SC-CO2] is clear and 

well-established. As a matter of law and economics, uncertainty in the benefits 

estimates does not mean they should be excluded from regulatory impact 

analyses."

• Commenters stated that the SC-CO2 estimates reflect an inadequate treatment of 

uncertainty and that the modeling does not provide an acceptable range of 

accuracy for use in policymaking. 

• Commenters recommended re-considering the approach used to treat uncertainty 

in the estimation of the SC-CO2, and referred to the EPRI report, Understanding 

the Social Cost of Carbon: A Technical Assessment, for details. The report 

highlights concerns with the treatment of uncertainties standardized across models 

(socioeconomic and emissions scenarios, equilibrium climate sensitivity) as well 

as treatment of model structure uncertainty via use of multiple models and the 

analysis of model-specific parameteric uncertainties. Regarding model structure 

uncertainty, the commenters found "significant differences in responses across 

models (e.g., climate change, climate damages, and response sensitivity) that need 

to be further evaluated to establish that they are legitimate reflections of 

uncertainty". For model specific parametric uncertainties, the report finds 

substantial inconsistency in the climate change and damage uncertainties 
47 

considered across models. The models explore very different parametric 

uncertainty in both components and therefore represent different uncertainty 

spaces. The USG modeling uses the means from these uncertainties, yet these 

means do not appear to come from the same statistical population, which is 

required for averaging." The commenters stated that the report finds that there are 

also additional categories of uncertainty to consider in the modeling (e.g., 

socioeconomic structure, alternative climate modeling, alternative specifications 

for 2013 revisions, and alternative 2300 extrapolations). 

• Commenters recommended a robustness evaluation to test the sensitivity of 

modeling results to alternatives, develop an experimental design that produces 

results that are robust to alternatives, and to provide the public with greater 

confidence in final SCC estimates. The commenters stated that they have 

identified reasonable alternatives to the current modeling and that robustness was 

not evaluated in the USG SCC exercise.

• The wide range of SC-CO2 values that EPA and the other IWG members 

developed is too broad to be useful, but still does not reflect the full range of 

uncertainty associated with measuring the impacts (both positive and negative) of 

climate change; and 

• There are serious questions regarding the usefulness of a single dollar amount to 

represent the asserted climate benefits of rulemakings, particularly given the 

severe limitations of climate science and the associated uncertainties with 

estimating the future costs and benefits of a regulation's impact on climate 

change."

Response 4: The comments regarding the consideration of uncertainty in SC-CO2 estimates 

mirror those submitted to the Office of Management and Budget’s separate comment solicitation 

on the SC-CO2 (78 FR 70586; November 26, 2013). As a member of the interagency working 

group (IWG) on SC-CO2, EPA has carefully examined and evaluated comments submitted to 

OMB’s separate solicitation. EPA has also carefully examined and evaluated all comments 

received regarding SC-CO2 through this rulemaking process and determined that the IWG 

responses to the comments on the OMB solicitation address the process comments summarized 

in this section. Specifically, EPA concurs with the IWG’s response to these comments and 

hereby incorporates them by reference.12 

 

12Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 28 to 30 

at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 
48 

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.13 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

The remainder of this section elaborates on the uncertainty comments in the context of this 

rulemaking. 

EPA agrees with the comments that supported the rigor of its uncertainty analysis. Uncertainty is 

inherent in all regulatory impact analysis. It is especially salient in regards to the SC-CO2 

estimates because of their broad spatial and temporal dimensions. In addition to conducting 

Monte Carlo analysis for a subset of key parameters, the EPA and the other members of the IWG 

included extensive discussion of uncertainty in the TSDs, and the documentation for the 

individual IAMs themselves contains additional discussion of the assumptions and uncertainties 

in the models. The 2010 TSD and the updated 2013 TSD provided visual depictions of the 

distributions of the SC-CO2 estimates in addition to detailed statistics including percentiles and 

higher order moments. In addition to the extensive information provided in the TSDs, EPA has 

provided the full range of model results to outside researchers upon request and will continue to 

do so. 

Regarding comments on uncertainty in the context of the socioeconomic-emission scenarios, see 

8.7.2, comment 1. 

The 2010 TSD reports SC-CO2 estimates out to one decimal place (i.e., at least two significant 

digits) and the current TSD reports to the nearest dollar (i.e., two or three significant digits, 

depending on the year and discount rate/statistic). EPA and the other members of the IWG chose 

not to use decimal places in the 2013 TSD to avoid the impression of artificial precision but will 

also explore presentation with a consistent number of significant digits. EPA and the other IWG 

members welcome the recommendations to strengthen the characterization of uncertainty and 

plan to seek external expert advice on the technical merits and challenges of potential approaches 

to improve the characterization and analysis of uncertainty in future updates.

 

13See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
49 

Regarding comments on the modeling of uncertainty in the SC-CO2 analysis, including the 

uncertainty explicitly represented in the IAMs and whether it captures the full range of 

uncertainty of the "true" value of the SC-CO2, see section 8.7.2, comment 8. 

EPA disagrees with the comments stating that the SC-CO2 is neither useful nor appropriate 

because of uncertainty, the broad range of estimates. EPA also disagrees that it is inappropriate 

to try to value the impacts of reductions in CO2 emissions. EPA notes that in 2007, the Ninth 

Circuit Court remanded a fuel economy rule to DOT for failing to monetize the benefits of the 

CO2 emissions reductions in its regulatory impact analysis, noting that "the value of carbon 

emissions reduction is certainly not zero." 

All regulatory impact analysis involves uncertainty. EPA acknowledges uncertainty in the SCCO2 estimates but disagrees that the uncertainty is so great as to undermine use of the SC-CO2

estimates in regulatory impact analysis. The uncertainty in the SC-CO2 estimates is fully 

acknowledged and comprehensively discussed in the TSDs and supporting academic literature. 

While uncertainty must be acknowledged and addressed in regulatory impact analyses, even an 

uncertain analysis provides useful information to decision makers and the public. For example, if 

an analysis shows that benefits of a policy option consistently do (or do not) justify costs even 

over a broad range of estimates, this may increase confidence in the robustness of this 

conclusion. Conversely, if choices among parameter estimates within a plausible range 

significantly affect the conclusions of the analysis, this is an important consideration in deciding 

how to weigh the analytical results in the decision making process. The presence of uncertainty 

is thus not a reason to exclude the best available estimates of quantified/monetized benefits, as 

long as it is appropriately characterized. Rather, good regulatory practice requires that agencies 

use the best available scientific, technical and economic information to derive the best estimates 

of costs and benefits that they can, and then communicate to the public the limitations and 

uncertainties of the analyses. The RIA for this rulemaking and the SC-CO2 TSDs clearly discuss 

the limitations and uncertainties of the analysis. As noted in the RIA and TSDs, EPA is 

committed to periodic updates in the estimates to reflect ongoing developments in our 

understanding of the science and economics of climate change, including the treatment of 

uncertainty. 

Comment 5: Commenters either voiced support for or criticized particular aspects of the 

interagency process used to develop the SC-CO2 estimates. Process issues raised included 

legal/statutory authority for issuing the estimates and consistency with applicable OMB guidance 

documents, transparency, opportunity for public comment. The commenters that criticized the 
50 

process used to develop the SC-CO2 estimates incorporated by reference the SC-CO2 comments 

it had submitted to OMB in response to the OMB SC-CO2 comment solicitation.14 

Legal/statutory authority for issuing the SC-CO2 estimates

• Commenters stated that the SCC is an "agency action" as defined by 5 USC 

551(13) of the APA and by itself can be considered a "rule" as defined by 5 USC 

551(4). 

• Commenters stated that given EPA's usage of the SCC, the commenter 

recommended that the new Congress use procedural mechanisms of the 

Congressional Review Act (CRA) to enable effective oversight of the SC-CO2.

• Commenters noted that the CRA explicitly establishes that it is the Congress that 

determines the scope of its provisions to rules, not EPA, and that it may do so 

without interference from the Executive or the Judiciary. Commenters noted that 

the CRA can enable deliberation by both Houses of Congress and floor votes on 

identifiable rules by way of joint resolutions of disapproval and that filibusters in 

the Senate may be avoided. Commenters also noted that while such resolutions 

may be approved or vetoed by the President, the respective floor votes may be 

used by the Congress in its deliberations over what appropriations may or may not 

be used by corresponding agency actions to administer and enforce the respective 

rule. 

Consistency with applicable OMB guidance documents, transparency, opportunity for public 

comment

• Commenters stated "The analytic work of the IWG has been transparent. The 

2010 TSD set out in detail the IWG's decision-making process with respect to 

how it assessed and employed the models." "The 2013 TSD also establishes that 

the increase in the SCC estimate from 2010 to 2013 resulted solely from updates 

to three underlying IAMs." "Furthermore, the GAO found that 'the working 

group's processes and methods reflected the following three principles: Used 

consensus-based decision making, Relied on existing academic literature and 

models, and Took steps to disclose limitations and incorporate new information." 

"The OMB last year created a further opportunity for public comments and 

transparent review specifically on the SCC." 

 

14See OMB-2013-0007-0091 
51 

• Other commenters objected to EPA's use of SCC estimates to justify regulation 

because of the nontransparent manner and methodology as well as the 

inconclusive results of the analysis. The commenters stated that the choice of nonreviewed IAMs and associated input assumptions used to develop the SCC are 

arbitrary, and that discount rates were also applied inconsistently. The 

commenters, in conjunction with other entities, identified the following issues 

with the SCC estimates: 

− "The estimates were derived from a closed and nontransparent process; 

− The process deviated from established OMB guidelines by not analyzing a 

seven percent discount rate and by not providing domestic SCC values; 

− The government's choice of inputs to the IAMs, and the choice of IAMs 

themselves, that were used to derive the SCC estimates did not undergo peer 

review or public comment and are highly uncertain. Commenters stated that 

EPA's use of the 2013 Technical support Document for the Social Cost of 

Carbon for Regulatory Impact Analysis (SCC) under E.O. 12866 is 

foundational and unacceptably flawed. 

• Commenters stated that stakeholder engagement has been absent at critical 

definitional stages, such as initial modeling parameters and assumptions used to 

develop SCC values, and that must allow stakeholders the opportunity to provide 

public comments during the entire development of SCC values. 

• Commenters stated "The EPA's cost benefit analysis is also problematic because it 

is based in part upon SCC estimates which have not gone through a rulemaking 

process or been subject to the rigors of notice, public comment, and peer review."

• Commenters stated that "the proposed rule is a violation of federal law and is 

counter to the public's interest" because "Executive Order 12866 clearly states, 

that among other things, agencies should assess all costs and benefits." "First, 

EPA has incorporated OMB draft estimates of the SCC for use in the CPP but 

they have yet to go through either public or peer review." 

• Commenters stated "EPA must forego use of the SCC until there is full peer 

review and an opportunity for public comment on all aspects of the SCC." 

"Throughout the 2009-2013 process, the IWG repeatedly notes the tremendous 

uncertainties involved with trying to assess future damages from climate change 

and how to assess the true environmental costs in order to assign a value to the 

SCC to address potential future damages. Yet, the IWG proceeded without 

reaching out for greater public and stakeholder input on how to appropriately 

address these great uncertainties." 

• "Second, in terms of practical implementation, use of the SCC has lacked 

transparency and has violated long-standing OMB guidelines." 
52 

• Commenters stated the reliance on SCC to estimate the benefits of reducing CO2 

emissions "is arbitrary and capricious due to multiple flaws in OMB's analysis. 

Among the flaws in the [SCC] are the government's opaque process and lack of 

transparency in formulating the [SCC] estimates, reliance upon modeling with 

inputs that lacked peer review, the failure to disclose and quantify key 

uncertainties involved in the modeling, the failure to incorporate benefits 

associated with increased temperature, the reliance on low discount rates that 

inflate benefits compared to the 7-10% discount rates at which many business 

decisions are made, the failure to apply present value adjustments to future costs 

and benefits, and the sue of a global benefit estimate that severely limits the 

SCC's utility to determining possible costs to the United States." 

• Commenters expressed concern that this modeling analysis lacks transparency 

and grossly overstates the benefit of this action on the global environment." 

• Commenters stated "Further, the SCC is predicated upon as assumptions of global 

rather than domestic benefits, which a recent GAO report indicated was contrary 

to guidance requiring domestic estimates." 

• Commenters stated that "EPA's SCC estimates fail in terms of process and 

transparency. EPA's SCC estimates fail to comply with guidance for developing 

influential policy-relevant information under the IQA. EPA's SCC estimates are 

the product of an opaque process and any pretensions to their supposed accuracy 

(and therefore usefulness in policy-making) are unsupportable." 

• Commenters stated "EPA personnel made the SCC estimates modeling runs and it 

is the EPA that is reviewing and compiling the comments while shielding itself 

behind an ad hoc IWG being resourced almost entirely by EPA." "EPA deprives 

the IWG, OMB and the other executive rulemaking agencies of the benefit of any 

public input on the critical decisions, inputs, and assumptions that form the basis 

of the SCC estimates." "The SCC estimates are inconsistent with the 

Administration's stated goals for transparency in scientific information." 

• Commenters stated, "The need for external peer review is even more compelling 

due to EPA's use of its own unsubstantiated methodology in the SCC estimates." 

The IAM damage functions, which drive the estimates, are entirely speculative. It 

is not clear which model EPA prefers and why it is preferable." "EPA's process of 

selecting the models and input assumptions, including much of the basic 

information underlying these decisions, has been shielded from public scrutiny." 

"Because it is a highly influential scientific document, EPA's SCC estimates are 

subject to the highest standards under its own peer review handbook under the 

IQA. Further, EPA combined three separate IAMs into a distinct methodology in 

its SCC estimates. EPA should comply with the IQA and President Obama's 

Scientific Integrity directive by submitting its SCC estimates and inputs and 

assumptions for external and independent peer review." 
53 

• Commenters stated "EPA inappropriately relied on questionable SCC estimates to 

justify the proposal. The estimates were derived through an opaque process and 

used IAMs that were not peer reviewed or subject to public comment." 

• Commenters stated "The EPA's cost-benefit analysis is also problematic because 

it is based in part upon SCC estimates which have not gone through a rulemaking 

process or been subject to the rigors of notice, public comment, and peer review. 

The lack of transparency and data quality surrounding the SCC estimates should 

automatically disqualify them from use in any rulemaking process until these 

problems can be addressed." 

• Commenters claimed "EPA overestimates the climate benefits of the proposed 

ESPS regulation" and provided the following criticism of the SCC estimates: (1) 

Lack of transparency and peer review in the process by which the estimates were 

generated and (2) IWG should provide all data, models, assumptions, and analysis 

relied on to arrive at the SCC estimates. 

Response 5: The comments regarding the process issues mirror those submitted to the Office of 

Management and Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; 

November 26, 2013). As a member of the interagency working group (IWG) on SC-CO2, EPA 

has carefully examined and evaluated comments submitted to OMB’s separate solicitation. EPA 

has also carefully examined and evaluated all comments received regarding SC-CO2 through this 

rulemaking process and determined that the IWG responses to the comments on the OMB 

solicitation address the process comments summarized in this section. Specifically, EPA concurs 

with the IWG’s response to these comments and hereby incorporates them by reference.15 

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.16 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

 

15 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 34 to 41 

at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 

16 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
54 

See section 8.7.2, comment 3, for EPA’s detailed response to comments on the use of a global 

versus domestic SCC. See section 8.7.2, comment 7, for EPA’s detailed response to comments 

about the selection of the discount rate. See also EPA’s detailed response to comments on the 

IAMs and damage functions in 8.7.2, comment 1, EPA’s response to comments on uncertainty in 

8.7.2, comment 4, and EPA’s response to comments regarding the application of the SC-CO2 

estimates to this rulemaking in 8.7.2, comment 8. 

The remainder of this section elaborates on the process comments in the context of this 

rulemaking. 

Legal/statutory authority for issuing the SC-CO2 estimates 

EPA agrees with commenters who believe that federal agencies have legal authority to develop 

these estimates, and notes that the IWG was cognizant of the Ninth Circuit decision referenced 

by these commenters when it decided to do so. EPA does not agree that the IWG’s issuance of 

the SC-CO2 estimates constituted an APA rulemaking. As noted in the OMB Response to 

Comments on SC-CO2, the IWG did not agree with comments that issuance of the SCC 

estimates constitutes an APA rule making (page 34). The APA definition of a rule is "an agency 

statement of general or particular applicability and future effect designed to implement, interpret, 

or prescribe law or policy." The SCC estimates are not designed to implement, interpret, or 

prescribe law or policy. Rather they are intended to provide guidance to agencies on a sciencebased methodology for estimating the benefits of CO2 reductions in regulatory impact analysis. 

EPA notes that OMB has long-established authority to oversee the regulatory review process, 

including preparation of regulatory impact analyses. OMB’s authority in this area is contained in 

Executive Orders 12866 and 13563, among others, and has been acknowledged by Congress in a 

series of statutes, including the Small Business Regulatory Enforcement and Fairness Act, the 

Congressional Review Act, the Information Quality Act, and the Regulatory Right to Know Act. 

It is fully consistent with this authority for OMB to offer guidance to agencies on best practices 

for conducting regulatory impact analysis, as it did, for example, in issuing Circular A-4. In the 

case of the SC-CO2 estimates and underlying TSDs, OMB determined that it was appropriate to 

exercise this authority through a consensus-based process involving a broad range of agencies 

that may issue rules affecting CO2 emissions. 

The TSDs explain in detail the factual and policy basis for all of the various methodological 

choices involved in developing the SCC estimates. The IAMs are documented in the scientific 

literature. In addition, EPA has assisted interested members of the public in obtaining additional 

information on the workings of the models. It has also provided full technical details of its own 

use of the models, including output of model runs, to interested parties upon request. However, 

because the SC-CO2 estimates are not a rule, as a legal matter they are not subject to the arbitrary 

and capricious standard of the APA. 

Consistency with applicable OMB guidance documents, transparency, opportunity for public 

comment 

EPA agrees with the commenters that concluded the analytic work of the IWG has been 

transparent and provided clear examples in support of this conclusion. As discussed below, EPA 
55 

disagrees with the comments that (1) the process to develop the SC-CO2 was non-transparent 

and (2) that this process was inconsistent with the Administration’s goals for transparency in 

scientific information. 

Furthermore, EPA strongly disagrees with the claim that the Agency has not provided 

information necessary to understand the SC-CO2 estimates and that it "deprives the IWG, OMB 

and other executive rulemaking agencies of the benefit of any public input on the critical 

decisions, inputs, and assumptions that form the basis of the SCC estimates." First, EPA notes 

that the estimates and supporting TSDs are developed and issued through a consensus based 

process involving the entire working group. Second, EPA has assisted individual requestors in 

obtaining more detailed information about the modeling. For example, one requestor noted 

publically that the EPA "modelers have been very open, collegial, and helpful."17 EPA has also 

responded to numerous letters from members of Congress regarding the SC-CO2 estimates as 

well as requests under FOIA.18

In particular, EPA believes that the process was inclusive, transparent, and appropriately 

considered public input. The TSDs fully document the methodology used to develop the 

estimates and the considerations that led the IWG to adopt this methodology. While the details of 

the IWG’s internal processes were not discussed in the TSDs, this is common for most 

government (and non-government) documents. Such details were not considered germane to the 

public’s understanding of the SC-CO2 estimates and the methodology used to produce them, but 

a general overview is provided here. 

In developing the 2010 estimates, the EPA and other members of the IWG met frequently in the 

year preceding the release of the February 2010 TSD. For the 2013 update, only a few meetings 

were needed because the group decided to make no changes beyond incorporating the most 

recent versions of the IAMs. IWG members, in particular professional economic staff with 

modeling expertise oversaw the primary modeling and calculations for both the 2010 and 2013 

SCC estimates using the most recent versions of the three IAMs available at the time. To develop 

the 2010 estimates, the staff members ran two of the three models and contracted with the 

developer of the third model to perform those runs. The contractor did not participate in any of 

the interagency meetings but rather received instructions for how to conduct the model runs (e.g., 

specification of the three sets of input assumptions as determined by the working group). The 

staff members ran all three models to develop the 2013 estimates. Decision making for both the 

2010 and 2013 processes was by consensus of IWG members. The details of internal discussions 

 

17 See http://dailysignal.com/2013/11/06/white-house-reopens-the-scc/

18 For example, January 16, 2014 letter from Joel Beauvais, Associate Administrator, to Senator 

Vitter. EPA also responded to FOIA requests submitted by Sidley and Austin (EPA-HQ-2013-

009517, EPA-HQ-2013-009518, EPA-HQ-2013-009523). 
56 

are deliberative, but the discussions were generally technical in nature and the issues discussed 

and conclusions reached are well documented in the TSDs. Regarding the transparency of the 

underlying models themselves, the IWG notes that they are well documented in the academic 

literature. 

The Government Accountability Office (GAO) also completed a review of the process used to 

develop the SCC estimates. In its 2014 report, GAO concluded that according to IWG 

participants, all major issues discussed were documented in the TSDs, which is consistent with 

Federal standards for internal control, and the processes and methods used were based on the 

principles of (1) consensus-based decision-making, (2) reliance on existing academic literature 

and modeling, and (3) disclosure of limitations and incorporation of new information through 

consideration of public comments and revision of the estimates as updated research became 

available.19 Furthermore, the level of documentation for this interagency exercise was not found 

to be unique to this working group. The GAO report confirms that interagency working groups 

use a variety of mechanisms to implement interagency collaborative efforts, including temporary 

working groups, and that not all collaborative arrangements, particularly those that are informal, 

need to be documented through written guidance and agreements. 

Regarding the explanation in the TSD for the 2013 revisions, no changes were made to the input 

assumptions developed by the IWG between the 2010 and 2013 estimates. The only changes 

were those made by the model developers themselves to the underlying models, which are 

documented in the academic literature. To assist the public in understanding these changes, the 

2013 TSD provides a summary of the most important ones, as well as references to the relevant 

literature where more detailed information can be found. As with the 2010 TSD, the IWG did not 

attempt to evaluate the modeling choices made by the modelers. Rather, by selecting the three 

"most widely used impact assessment models" (NAS, 2010), the IWG intended to reflect a 

reasonable range of modeling choices and approaches that collectively reflect the current 

literature on the estimation of damages from CO2 emissions. As explained in the 2010 TSD: 

The parameters and assumptions embedded in the three models vary widely. A key 

objective of the interagency process was to enable a consistent exploration of the three 

models while respecting the different approaches to quantifying damages taken by the 

key modelers in the field. An extensive review of the literature was conducted to select 

three sets of input parameters for these models: climate sensitivity, socio-economic and 

emissions trajectories, and discount rates...All other model features were left unchanged, 

relying on the model developers’ best estimates and judgments...The sensitivity of the 

results to other aspects of the models (e.g. the carbon cycle or damage function) is also 

 

19 See http://www.gao.gov/products/GAO-14-663. 
57 

important to explore in the context of future revisions to the SCC but has not been 

incorporated into these estimates. 

Accordingly, the IWG did not attempt to explain in detail how the damage functions in the 

models were constructed or their strengths and weaknesses, either for the earlier model versions 

used in the 2010 estimates or for the updated versions used for the 2013 estimates. Rather, 

stakeholders who are interested in these details are encouraged to consult the model 

documentation and the related academic literature referenced in the TSDs, as well as the model 

developers themselves. As noted in the OMB Response to Comments on SC-CO2, the IWG 

accepts the point that clearer citations to specific model versions and revisions would be helpful 

and will attempt to address this in the next update of the TSD. 

Regarding opportunities for public comment, EPA notes that such opportunities have been 

provided on all aspects of the SCC estimates in the interim estimates (2009) selected by the IWG 

and in the numerous proposed rules, including the proposal for this rulemaking, issued by EPA 

since February 2010 that made use of the estimates. As a general practice, EPA requests 

comments on all aspects of the regulatory impact analysis, thereby providing ample opportunity 

for the public to comment on SC-CO2 estimates used in these analyses. These comments helped 

inform the development of the 2013 revised estimates. In addition, OMB provided a stand-alone 

comment period on the 2013 estimates. 

Regarding the adequacy of the information provided to the public as a basis for comment, the 

TSDs provide a complete record of the methodology and assumptions used to develop the SCC 

estimates, including references to the academic literature. As previously noted, independent 

analysts have sought and received information from EPA allowing them to implement the IWG’s 

SC-CO2 approach and modify it further if they choose. Additional documentation is available in 

the academic literature on the IAMs themselves. 

With regard to peer review, the assumptions and models employed in generating the SC-CO2 

estimates are all drawn from the peer-reviewed academic literature. To further strengthen the 

robustness of the SCC estimate, EPA and the other members of the IWG plan to seek external 

expert advice on technical opportunities to improve the SCC estimates in future updates, 

including many of the approaches suggested by commenters and peer-reviewed literature, and 

summarized in this document. 

Regarding comments that the estimates not be used until a future update that corrects the 

commenters’ perceived flaws is completed, EPA does not feel that it is appropriate to withdraw 

the current estimates. As previously noted, EPA has carefully examined and evaluated the full 

range of comments and associated technical issues described in section 8.7.2, and determined 

that it will continue to use the current SC-CO2 estimates until further updates can be made to 

reflect forthcoming guidance from the Academies. EPA believes that the current estimates 

continue to represent the best scientific information on the impacts of climate change available in 

a form appropriate for incorporating the damages from incremental CO2 emissions changes into 

regulatory analysis. EPA will continue to consider these comments and will share the 

recommendations with the IWG as it moves forward with the Academies process. 
58 

EPA disagrees that the TSDs and SC-CO2 estimates are inconsistent with OMB and EPA 

guidance, including OMB Circular A-4 and guidelines under the Information Quality Act. To 

ensure that the SC-CO2 methodology is transparent, the TSDs are comprehensive and 

technically rigorous in explaining the sources of data, the assumptions employed, the analytic 

methods applied, and the statistical assumptions employed. To ensure that the results are 

reproducible, EPA and other IWG members have provided technical assistance and modeling 

results to external stakeholders upon request. 

Circular A-4 is a living document, which may be updated as appropriate to reflect new 

developments and unforeseen issues. OMB was fully involved in the development of the SCCO2 estimates as a working group co-chair and supports the recommendations regarding the 

discount rate and the focus on global damages. The departure from the standard discount rate 

recommendations in Circular A-4 is explained in detail in the TSDs and in Section 8.7.2, 

comment 7, of this document. Briefly, the use of 7 percent is not considered appropriate for 

intergenerational discounting. There is wide support for this view in the academic literature, and 

it is recognized in Circular A-4 itself. The emphasis on global rather than domestic damages is 

also explained in detail in the TSDs. Beyond the fact that good methodologies for estimating 

domestic damages do not currently exist, basing decisions on only the domestic damages from 

carbon emissions will lead to an inefficient allocation of resources to reducing them, especially if 

all countries adopt a similarly short-sighted approach. An efficient outcome can only be achieved 

if all countries consider the full costs and benefits of their actions; the United States continues to

be a leader in working to establish such a regime internationally. 

In addition, consistent EPA-wide implementation of its peer review and information quality act 

guidelines has been an agency priority for many years. The most recent document describing 

this EPA guidance, Guidance for Evaluating and Documenting the Quality of Existing Scientific 

and Technical Information, was issued in December 2012 as an addendum to a 2003 EPA 

guidance document entitled, A Summary of General Assessment Factors for Evaluating the 

Quality of Scientific and Technical Information. The December 2012 addendum does not create 

new standards for assessing and accepting data from other organizations – the Agency’s existing 

information quality guidance continues to be applied to previous and future actions. Rather, the 

December 2012 addendum references EPA’s comprehensive existing information quality 

guidance and creates a consistent Agency-wide approach for reviewing and documenting the use 

of existing scientific and technical information from other organizations. 

The 2010 TSD for the SC-CO2 estimates provides documentation of the interagency decisions 

and the 2013 TSD documents the technical update. Consistent with EPA’s 2003 data quality 

guidance document and the December 2012 addendum referenced above, the 2010 and 2013 

TSDs for the SC-CO2 estimates describe the type and quality of information used to estimate the 

social cost of carbon as well as the sources for the information used (documentation of modeling 

inputs—e.g., climate sensitivity and socioeconomic scenarios—in the peer reviewed literature). 

The 2010 and 2013 TSDs also provide exhaustive documentation of how the IWG’s review 

identified, evaluated, and adopted the data, assumptions, and analytical framework used to 

develop the SC-CO2 estimates. Furthermore, the IAMs used to develop the IWG SC-CO2 

estimates are documented within the peer reviewed literature and source code is available on the 

model developers’ websites or upon request from the relevant developer. 
59 

Finally, commenters significantly misstate the law regarding both the rights afforded under the 

Data Quality Act and the nature of guidance implementing it. First, Prime Time Int’l Inc. v. 

Vilsack, 599 F.3d 678, 685 (D.C. Cir. 2010) does not stand for the proposition that IQA claims 

are judicially reviewable, contrary to commenters’ assertions. The case makes no such 

statement, and the D.C. Circuit has indicated otherwise by its citation, in State of Mississippi, of 

Salt Institute’s holding that such claims are not reviewable (see text above). See also Mississippi 

Comm’n on Environmental Quality v. EPA, No. 12-1309 at n. 29, 2015 WL 3461262, (D.C. Cir. 

June 2, 2015) noting that Prime Time dismissed an IQA challenge "without addressing argument 

that the statute creates no legal rights in third parties", and, as quoted above, stated that "almost 

every court that has addressed an Information Quality Act challenge has held that the statute 

‘creates no legal rights in any third parties’"(quoting Salt Institute)). The commenters also fail to

acknowledge all of the other cases uniformly rejecting this claim, and indeed, fail to 

acknowledge the text of the IQA itself. See Styrene Info. & Research Ctr., Inc. v. Sebelius, 944 

F. Supp. 2d 71, at 82 (D.D.C. 2013) (concluding "that the IQA and OMB guidelines do not 

provide judicially manageable standards); Harkonen v. U.S. Dept. of Justice, 2012 U.S. Dist. 

LEXIS 171415, at **30–36 (N.D. Cal. 2012) (dismissing argument that D.C. Circuit reached the 

merits of an IQA claim in Prime Time); Family Farm Alliance v. Salazar, 749 F. Supp. 2d 1083, 

1096–1100 (E.D. Cal. 2010) (rejecting argument that D.C. Circuit in Prime Time found an 

implicit right of action under the IQA). 

The commenters also read Prime Time as holding that the OMB Guidelines are binding 

legislative rules. Guidelines are just that: they provide assistance and are not binding. 

Describing these OMB Guidelines, the D.C. Circuit noted that the Guidelines provide "‘policy 

and procedural guidance’", are meant to be "flexible" and are to be implemented differently by 

different agencies accounting for circumstances. State of Mississippi, 744 F.3d at 1347; see 

Styrene Info. & Research Ctr, Inc., 944 F. Supp. 2d at 82. State of Mississippi antedates Prime 

Time. EPA consequently believes that the OMB Guidelines are not binding legislative rules. 

Nor are EPA’s Peer Review guidelines binding legislative rules. EPA first issued its Peer 

Review Policy in 1993, and in 1998 issued its Peer Review Handbook to provide non-binding 

guidance for implementation of the Peer Review Policy. In 2004, OMB issued its Final 

Information Quality Bulletin for Peer Review (OMB Bulletin) to provide government-wide 

guidance to enhance the practice of peer review. EPA subsequently updated its Peer Review 

Policy and Peer Review Handbook to incorporate the provisions of the OMB Bulletin. EPA’s 

IQGs, Peer Review Policy, and Peer Review Handbook do not bind the Agency, but instead 

guide EPA’s exercise of discretion when making decisions about information quality and peer 

review. API v. EPA, 684 F. 3d 1342, 1348 (D.C. Cir. 2012) (chastising industry petitioners for 

characterizing the EPA peer review guidance as binding ("perhaps the API should have had its 

brief peer-reviewed"); State of Mississippi v. EPA, 744 F.3d at 1347 (D.C. Cir. 2013). The 

suggestion in the comments that EPA’s Inspector General has decreed that the Peer Review 

guidance is binding both mischaracterizes the IG’s statements and that Office’s function. It does 

not determine the legal status of agency documents, much less countermand the holding of the 

D.C. Circuit just cited. 
60 

Comment 6: Commenters disagreed about whether the integrated assessment models 

overestimate or underestimate CO2 fertilization effects in the agriculture and forestry sectors. For 

example, commenters wrote "only one of the three IAMs used by the IWG has any substantial 

impact from CO2 fertilization, and the one that does, underestimates the effect by approximately 

2-3 times," referencing Idso (2013). However, other commenters argued that "the models do not 

reflect recent research on agricultural changes, which suggests that CO2 fertilization is 

overestimated, particularly in the FUND model, and that much, if not all, of the fertilization 

benefits may be cancelled out by negative impacts on agriculture." 

Some commenters also stated that the SCC severely underestimates the "greening" effect and 

that only one of the three models included in the SCC even addresses it. 

Response 6: The comments regarding CO2 fertilization effects in the agriculture and forestry 

sectors and "greening effect" issues mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; November 26, 2013). As 

a member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the CO2

fertilization effects in the agriculture and forestry sectors and "greening effect" issues 

summarized in this section. Specifically, EPA concurs with the IWG’s interagency working 

group’s response to these comments and hereby incorporates them by reference.20  

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.21 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

The remainder of this section elaborates on the comments in the context of this rulemaking.

 

20 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 7-11 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf. 

21 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
61 

As noted in the OMB Response to Comments on SC-CO2, to date, the IWG has accepted the 

models as currently constituted, and omitted any damages or beneficial effects that the model 

developers themselves do not include. The IWG recognizes that none of the three IAMs fully 

incorporates all climate change impacts, either positive or negative. Some of the effects 

referenced by commenters (e.g., "catastrophic" effects, disease, and CO2 fertilization) are 

explicitly modeled in the damage functions of one or more of the current models (although the 

treatment may not be complete), and the model developers continue to update their models as 

new research becomes available. In fact, the IWG undertook the 2013 revision because of 

updates to the models, which include new or enhanced representation of certain impacts, such as 

sea level rise damages. In addition, some of the categories mentioned by commenters are 

currently speculative or cannot be incorporated into the damage function for lack of appropriate 

data. Using an ensemble of three different models was intended to, at least partially, address the 

fact that no single model includes all of the impacts. We recognize that there may be effects that 

none of the three selected models addresses (e.g., impacts from ocean acidification) or that are 

likely not fully captured (e.g. catastrophic effects). 

EPA also recognizes that the impacts of climate change on agriculture is an area of active 

research and that methodological and data challenges persist. As a result there is uncertainty as to 

the magnitude of these impacts and the role of interactions between changes in the climate and 

other factors, such as CO2 fertilization, temperature, precipitation, ozone, pests, etc. 

Additionally, these effects are likely to vary widely across regions and crops. However, with 

high confidence the IPCC (2013) stated in its Fifth Assessment Report (AR5) that "[b]ased on 

many studies covering a wide range of regions and crops, negative impacts of climate change on 

crop yields have been more common than positive impacts." As noted above, the IWG’s 

approach to date has been to rely on the damage functions included in the three IAMs by their 

developers. 

EPA agrees that it is important to update the SC-CO2 periodically to incorporate improvements 

in the understanding of greenhouse gas emissions impacts and will continue to follow and 

evaluate the latest science on impact categories that are omitted or not fully addressed in the 

IAMs. Also, EPA and the other members of the IWG will seek external expert advice on the 

technical merits and challenges of potential approaches to update the damage functions in future 

revisions to the SC-CO2 estimates. 

See also 8.7.1, comment 8, for EPA’s response to comments about carbon fertilization, including 

EPA’s general treatment of the impact of increased CO2 on plant growth and about treatment of 

CO2 fertilization in models. 

Comment 7: Numerous commenters discussed the discount rates used to estimate the SC-CO2. 

Some commenters stated that it would be appropriate to include a 7 percent discount rate in the 

range used to estimate the SCC while others stated that the central SC-CO2 estimate should be 

based on a discount rate lower than 3 percent or on a rate that declines over time. 

Recommendations for a 7 percent discount rate 
62 

Most commenters who made this comment cited OMB’s Circular A-4, which identifies 3 percent 

and 7 percent as appropriate discount rates for regulatory impact analysis conducted pursuant to 

Executive Order 12866. A few commenters offered more specific rationales for using a higher 

discount rate. Some commenters noted that in the United States market interest rates of around 7 

percent per year have typically been associated with per capita GDP growth rates of around 1.5 

percent per year, and the socio-economic scenarios used in estimating the SCC assume per capita 

GDP growth rates at least this high. Other commenters noted that low discount rates place 

relatively more weight on outcomes further in the future, which are more uncertain than near 

term outcomes. Several commenters indicated that a 7 percent discount rate is appropriate 

because it represents a better estimate of the opportunity cost of capital investments that would 

be displaced under compliance with a potential regulation to mitigate CO2 emissions. 

A couple of commenters claimed that EPA presents climate benefits figures in the preamble at 

only the 3 percent discount rate rather than at all four discount rates, including the 5 percent rate,

recommended by the IWG. 

Recommendations for lower discount rates 

Some commenters recommended a declining discount rate; they emphasized discount rate 

uncertainty and cited research by Weitzman (2001), Newell and Pizer (2003), and Arrow et al. 

(2013) on this topic, noting that these studies show that under persistent uncertainty about the 

discount rate, and/or economic growth, the maximization of expected net present value implies a 

discount rate that declines over time. 

Commenter also stated "the discount rates used in the modeling platforms minimize the SCC 

estimates, as they do not accord a sufficient measure of equity between current and future 

generations. Rather, presume a constant measure of positive economic growth even though the 

models predict significant GDP losses due to climate change." 

Several commenters noted that uncertainty about future economic growth rates implies that 

future benefits and costs should be discounted to the present at a rate lower than what would be 

appropriate in the absence of uncertainty. 

Other discounting comments 

Some commenters disagreed with applying different discount rates to benefit estimates for CO2 

emission reductions than to the estimates for other emissions, concluding that this treatment 

causes a bias in the economic analysis. 

Response 7: The comments regarding discount rates applied to the SC-CO2 estimates mirror 

those submitted to the Office of Management and Budget’s separate comment solicitation on the 

SCC (78 FR 70586; November 26, 2013). As a member of the interagency working group 

(IWG) on SC-CO2, EPA has carefully examined and evaluated comments submitted to OMB’s 

separate solicitation. EPA has also carefully examined and evaluated all comments received 

regarding SC-CO2 through this rulemaking process and determined that the IWG responses to 

the comments on the OMB solicitation address the comments on the discount rates applied to the 

SC-CO2 estimates. Specifically, EPA concurs with the IWG’s response to these comments and 
63 

hereby incorporates them by reference.22 The remainder of this section elaborates on these

comments in the context of this rulemaking. 

EPA and other members of the IWG have reconfirmed their commitment to periodic review and 

update of the methodology and estimates to ensure that they continue to reflect the best available 

science and economics. Furthermore, EPA has determined that the SCC methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2 

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SCC estimates in future updates. Input from 

the Academies, informed by the comments submitted to this rulemaking and the peer-reviewed 

literature, will help to ensure that the SCC estimates used by EPA continue to reflect the best 

available science and methodologies. 

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.23 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

Recommendations to use a 7 percent discount rate 

 

22 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 20 to 25 

at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf . 

23 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
64 

OMB guidance in Circular A-4 recommends that discount rates of 3 percent and 7 percent be 

used in regulatory impact analysis. The 7 percent rate is an estimate of the average before-tax 

real rate of return to private capital in the U.S. economy. It is a broad measure that reflects the 

returns to real estate and small business and corporate capital and is meant to approximate the 

opportunity cost of capital in the United States. The 3 percent rate is an estimate of the real rate 

at which consumers discount future consumption flows to their present value, often referred to as 

the social rate of time preference or the consumption rate of interest. As stated in the 2010 TSD, 

in a market with no distortions, the return to savings would equal the private return on 

investment, and the market rate of interest would be the appropriate choice for the social 

discount rate. In the real world, however, risk, taxes, and other market imperfections drive a 

wedge between the risk-free rate of return on capital and the consumption rate of interest. 

While most regulatory impact analysis is conducted over a time frame in the range of 20 to 50 

years, OMB guidance in Circular A-4 recognizes that special ethical considerations arise when 

comparing benefits and costs across generations. Although most people demonstrate time 

preference in their own consumption behavior, it may not be appropriate for society to 

demonstrate a similar preference when deciding between the well-being of current and future 

generations. Future citizens who are affected by such choices cannot take part in making them, 

and today's society must act with some consideration of their interest. Even in an 

intergenerational context, however, it would still be correct to discount future costs and benefits 

generally (though perhaps at a lower rate than for intragenerational analysis), due to the 

expectation that future generations will be wealthier and thus will value a marginal dollar of 

benefits or costs less than the current generation. Therefore, it is appropriate to discount future 

benefits and costs relative to current benefits and costs, even if the welfare of future generations 

is not being discounted. Estimates of the discount rate appropriate in this case, from the 1990s, 

ranged from 1 to 3 percent. After reviewing those considerations, Circular A-4 states that if a 

rule will have important intergenerational benefits or costs, agencies should consider a further 

sensitivity analysis using a lower but positive discount rate in addition to calculating net benefits 

using discount rates of 3 and 7 percent. 

EPA and the other members of the IWG examined the economics literature and concluded that 

the consumption rate of interest is the correct concept to use in evaluating the net social costs of 

a marginal change in CO2 emissions, as the impacts of climate change are measured in 

consumption-equivalent units in the three IAMs used to estimate the SCC. This is consistent with 

OMB’s guidance in Circular A-4, which states that when a regulation is expected to primarily 

affect private consumption—for instance, via higher prices for goods and services--it is 

appropriate to use the consumption rate of interest to reflect how private individuals trade-off 

current and future consumption. 

As explained in the 2010 TSD, after a thorough review of the discounting literature, the IWG 

chose to use three discount rates to span a plausible range of constant discount rates: 2.5, 3, and 5 

percent per year. The central value, 3 percent, is consistent with estimates provided in the 

economics literature and OMB’s Circular A-4 guidance for the consumption rate of interest. The 

upper value of 5 percent represents the possibility that climate damages are positively correlated 

with market returns, which would suggest a rate higher than the risk-free rate of 3 percent. 

Additionally, this discount rate may be justified by the high interest rates that many consumers 
65 

use to smooth consumption across periods. The low value, 2.5 percent, is included to incorporate 

the concern that interest rates are highly uncertain over time. It represents the average rate after 

adjusting for uncertainty using a mean-reverting and random walk approach as described in 

Newell and Pizer (2003), starting at a discount rate of 3 percent. Further, a rate below the riskless 

rate would be justified if climate investments are negatively correlated with the overall market 

rate of return. Use of this lower value also responds to the ethical concerns discussed above 

regarding intergenerational discounting. 

EPA recognizes that disagreement remains in the academic literature over the appropriate 

discount rate to use for regulatory analysis of actions with significant intergenerational impacts, 

such as CO2 emissions changes that affect the global climate on long time scales. EPA and the 

members of the IWG will continue to follow and evaluate the latest science on intergenerational 

discounting and seek external expert advice on issues related to discounting in the context of 

climate change. 

EPA notes that the comment that EPA only presents climate benefits figures in the preamble at 

only the 3 percent discount rate rather than at all four discount rates recommended by the IWG is 

incorrect. The tables clearly present climate benefits based on all 4 recommended SC-CO2 

estimates; see, for example, Tables 12 and 13 at 79 FR 34936; June 18, 2014. The summary 

tables presented in the beginning of the preamble use the central SC-CO2 estimate and clearly 

note that additional SC-CO2 estimates were considered and presented in the RIA. 

Recommendations for lower discount rates or a declining rate 

As noted above, the EPA and the other members of the IWG selected a range of discount rates 

from 2.5 to 5 percent; a review of the literature and the reasoning that led to the selection of this 

range are discussed in detail in the 2010 TSD. Several of the issues raised by commenters were 

explicitly considered and were part of the rationale for the selected range. 

The TSD discusses both descriptive and prescriptive approaches to selecting discount rates. A 

descriptive approach reflects a positive (non-normative) perspective based on observations of 

people’s actual choices (e.g., savings versus consumption and allocation of savings over more 

and less risky investments). The prescriptive approach adds a normative component and 

incorporates judgments that decision makers believe should be reflected in the policy choices 

that the discount rate is intended to inform. For example, some have argued on ethical grounds 

that in the Ramsey formula—which dissects market rates into three components, the pure rate of 

time preference (ρ), growth rate of per-capita consumption (g), and coefficient of relative risk 

aversion (η)—the ρ component should be set to zero so that the welfare of all generations is 

valued equally. After considering a range of plausible values from the literature for g and η, the 

IWG concluded that setting a very low ρ (e.g., 0.1 percent per year) could yield rates in the range 

of 1.4 to 3.1 percent. 

The TSD also discussed uncertainty and its effects on discount rates. The certainty equivalent 

values of the future benefits of reducing current CO2 emissions will be lower than the expected 

value if the benefits and future consumption are positively correlated, assuming people are risk 

averse on average. This in turn implies that when discounting expected future benefits a discount 
66 

rate that accounts for uncertainty should exceed a riskless rate. As explained in the TSD, this 

consideration was part of the logic for setting the upper end of the selected range at 5 percent. 

EPA and other members of the IWG also considered the issue of "climate catastrophes." To the 

extent that such outcomes may not be adequately represented in the IAMs, the central tendency 

estimates from these models may not capture the full range of potential damages from CO2 

emissions. For this reason, in addition to the three mean SCC estimates using discount rates of 

2.5, 3 and 5 percent, EPA and other members of the IWG recommended including a rate based 

on the 95th percentile damage estimate (with a 3 percent discount rate) for the upper end of the 

range of plausible SC-CO2 estimates. 

With respect to declining discount rates, EPA and other members of the IWG agrees that this is 

an important area of emerging research. However, no widely-accepted declining discount rate 

schedule has yet been developed. Some key technical issues warrant careful consideration before 

adopting a declining discount rate schedule, such as determining how to update the discount rate 

schedule as uncertainty is resolved over time and ensuring that the use of declining discount rates 

does not lead to the possibility of time-inconsistent choices. A recent workshop sponsored by the 

federal government resulted in a paper in Science authored by thirteen prominent economists 

who concluded that a declining discount rate would be appropriate to analyze impacts that occur 

far into the future (Arrow et al., 2014). However, additional research and analysis is still needed 

to develop a methodology for implementing a declining discount rate and to understand the 

implications of applying these theoretical lessons in practice. The EPA and other members of the 

IWG will continue to follow and evaluate the latest science on the use of declining discount rates 

in intergenerational contexts and seek external expert advice on issues related to discounting in 

the context of climate change. 

Finally, regarding the comment about the consistency of discount rates applied to the climate 

benefits versus other monetized impacts: while EPA continues to find the discount rates applied 

to the SC-CO2 estimates to be appropriate, it recognizes that different discount rates are applied 

to other impacts. The workshop mentioned in the preceding paragraph discussed how to apply 

discounting in a regulation where some costs and benefits accrue intra-generationally while 

others accrue inter-generationally. The experts noted that one solution to this problem is to apply 

a declining discount rate schedule to all regulations.24 As previously noted, additional research 

and analysis is needed to develop a methodology for implementing a declining discount rate. 

The EPA and other members of the IWG will continue to follow and evaluate the latest science 

on the use of declining discount rates in intergenerational contexts and seek external expert 

advice on issues related to discounting in the context of climate change. 

 

24 See http://rff.org/Documents/Events/Workshops%20and%20Conferences/110922-

Discounting/Main_Points.pdf 
67 

Comment 8: Commenters discussed the aggregation of IAM results and the selection of the final 

range of SCC estimates as well as the application of the SCC estimates to proposed rulemaking. 

Aggregation and selection of SCC estimates 

Some commenters were concerned that pooling the SCC estimates across scenarios and models 

ignores variability and uncertainties in the estimates and inappropriately implies that the "true" 

value of the SCC falls within the range of estimates calculated by the three models. Other 

commenters argued that pooling the results across models and scenarios should be abandoned 

given the uncertainty around the factors that drive the estimates. A few commenters suggested 

that the median of the distribution of SCC estimates rather than the mean, as used by the IWG, 

would be a more appropriate measure of the central tendency of the SCC estimates. 

Commenters stated that the SCC estimates are difficult to interpret and evaluate because they are 

the result of significant aggregation of global socioeconomic, climate, and damage modeling 

over 300 years and aggregation of results across three models (DICE, FUND, PAGE), over time, 

across scenarios, and across impact categories and regions. The commenters provided the 

following recommendations: 

• A detailed review of modeling differences, alternatives, and uncertainties 

represented would be beneficial to resolve or justify differences, improve 

comparability and uncertainties represented, and enhance robustness. 

• Estimates of global CO2 changes associated with the rule for proper use of the 

SCC for CO2 reduction benefits calculations. 

• Resolution of inconsistencies in the estimated compliance costs and CO2 benefits 

for proper comparison. 

• Guidance regarding use of the four USG SCC estimates. 

Application to the Clean Power Plan RIA 

Commenters supported the application of SCC to estimate the benefits of the rulemaking, though 

some offered recommendations. 

• Commenters stated, "The SCC provides an important, if conservative, estimate of 

the costs of climate change and the benefits of reducing carbon pollution." "In the 

context of agency rulemakings, the SCC provides the best available means to 

factor those costs into benefit-cost analyses." 

• Some commenters stated that "In the final Clean Power Plan and the final 

regulatory impact analysis, EPA should detail all significant, unquantified climate 
68 

effects, as consistent with administration-wide policy, the IWG's instructions, 

EPA's best practices, and best economic practices." 

Commenters stated that the IWG's "efforts pass legal muster from a standpoint of federal 

regulatory law and policy. Moreover, the IWG's most recently updated estimates utilized 

accepted science, economics, and technical modeling. EPA's reliance on those estimates in 

support of the proposed rule was therefore reasonable and justified." 

• Other commenters stated that EPA does not fully detail all of the qualitative 

climate benefits from carbon dioxide reductions that are not currently included in 

the monetized estimate of the social cost of carbon. The commenters said that in 

the final CPP and the final regulatory impact analysis, EPA should detail all 

significant, unquantified climate effects, as consistent with administration-wide 

policy, the Interagency Working Group's instructions, EPA's past practices, and 

best economic practices. 

Other commenters disagreed with application of the SCC to the Clean Power Plan RIA stating 

that EPA's reliance on SCC is arbitrary and capricious and that the SCC overstates the benefits 

associated with reducing CO2 emissions from electric generating units ("EGUs"). Many of these 

commenters disagreed with the use of a global SCC estimate and with the selection of discount 

rates, and therefore concluded that they should not form the basis of the rulemaking’s benefit 

estimates. Ccommenters also stated that EPA must first appropriately review all public 

comments related to the federal government's SCC values prior to using them in a rulemaking, 

which were submitted in early 2014. Excerpts from the commenters that disagreed with the use 

of SCC in this rulemaking are as follows: 

• Commenters noted that SCC is meant to analyze impacts of regulations with a 

marginal effect on CO2 emissions. Commenters concluded that while the 

proposal would have a marginal effect on emissions, it would have a large effect 

on the industry and competitiveness, and therefore should not use the SCC as 

basis. Commenters also stated that the SCC should "go through a rigorous public 

notice process with appropriate revisions made based on public comment" before 

being used as the basis for a proposed rule. 

• Commenters stated SCC values are "speculative, selective, based on untested and 

inconsistent economic models, based on climate models that grossly over-predict, 

and are not tied to domestic policy and results." Commenters also stated, "If the 

benefits of the proposed guidelines are properly characterized - that is, which 

inappropriately claiming benefits from the U.S. Government's SCC estimates and 

the benefits of reducing pollutants that are regulated to protective levels by other 

rules, there are no benefits to weigh against the exorbitant costs. Therefore, the 

proposed guidelines cannot be justified and are unlawful." 

• Commenters stated "The CPP's climate benefits are illusory." The commenters 

cite three primary reasons: 1) The SCC is a "guestimate" and "an unknown 

quantity, discernible in neither physical nor economic data." By fiddling with 

non-validated climate parameters, made-up damage functions, and below-market 
69 

discounts rates, SCC analysts can get almost any result they desire. 2) "EPA uses 

global rather than domestic SCC values to calculate climate benefits. 3) "Most 

importantly, the rule's climate benefits are not actually an estimate of the damages 

avoided in 2030." The climate benefits are the product of CO2 avoided and 

estimates of the present value of all cumulative damages caused by each 

incremental ton of CO2 emission over an immense time span - from 2010 to 

2300. "In other words, none of the rule's alleged climate benefits will be 

discernible in 2030 and likely not even in 2100." 

• Commenters stated the "alleged benefits are wholly unsubstantiated," and that 

some have stated the benefits of avoided climate change (as calculated by SCC) 

are "both unpredictable and unpriceable." Commenters also stated that SCC 

values are not trusted because "they have increased dramatically in recent years" 

due in part to the many assumptions required for calculating SCC. Commenters 

also believe SCC values are easily manipulated. 

• Commenters stated that "The EPA has not provided a single quantifiable climate 

benefit of the proposed rule. The EPA's purported climate benefits of the rule are 

based solely on the Office of Management and Budget's Social Cost of Carbon 

(SCC). Furthermore, the EPA used the global SCC yet did not consider the 

potential global impacts of the rule or other international changes in CO2 

emissions." 

• Commenters stated "The RIA for the proposed rule states that the impact of 

'reduced climate effects' has been 'monetized' but not 'quantified.' In other words, 

EPA does not claim that the Proposed Rule would affect the climate. 

Commenters stated, "EPA cites its recently updated SCC document as a foundational basis for 

assessing the costs and benefits associated with GHG emissions reductions. This is a document 

that is significantly flawed and was/is subject to opposition by GCLC, its members, and many 

others. It should not be used in any rulemaking, including this Rule Proposal." 

Commenters stated that analyses performed by NERA indicate the maximum temperature 

increase avoided by the CPP is about 0.003 degrees C which occurs several decades after the 

CPP's emission reductions. Commenters stated, "This is about a 0.2% change in the baseline 

temperature increase projected by that time. This sort of very small deviation from baseline 

temperature change must be viewed as a very tenuous basis for any projected amount of global 

damage." 

• Commenters stated "Our research team found that the SCC calculation process, as 

well as input data assumptions for the process, and resulting published values for 

SCC, are obviously biased to yield high values of SCC. 

• "Our investigation of the SCC calculation process reveals that it violates several 

provisions of EPA's own document No. EPA/260R-02-008. Certainly using the 

results of un-validated and obviously inaccurate complex computer models on 
70 

which the IPCC ECS uncertainty range is based, cannot be claimed to be 

consistent with the intent of these guidelines." 

• Commenters concluded with "All proposed rulemaking related to CO2 emissions 

should be halted until such time as the current SCC calculation process can be 

reviewed by an independent scientific review team and critical scientific flaws in 

the current SCC computation process are corrected."

Several commenters discussed concerns about emissions leakage in the context of SCC. 

• Commenters stated that the RIA estimates CO2 benefits by multiplying the USG 

SCC values by estimated CO2 reductions within the power sector only, which is 

problematic because the SCC should only be applied to estimated net changes in 

global CO2 emissions. The commenters stated that the RIA applications should be 

sure to estimate changes in net global emissions associated with a proposed rule, 

or justify why it is unnecessary and that emission reduction effects beyond the 

boundaries of the power sector should be accounted for to properly estimate CO2 

benefits. 

• "...the SCC failed to include any consideration of industrial GHG leakage" that 

could result in movement of production facilities offshore. " 

• Commenter stated the CO2 reduction benefits have not been adjusted for the 

increased emissions from new exempt fossil fueled sources that will be built due 

to the proposal. 

Commenters stated that "The proposed rule's base case is inconsistent with the 

socioeconomic/emissions scenarios used in the SCC calculations. Specifically, the U.S. CO2 

emissions, energy system, and economic condition underlying the estimated CO2 reductions and 

compliance costs are inconsistent with the socioeconomic and emissions futures underlying the 

USG SCC estimates used to value the proposed rules CO2 reduction benefits. The SCC estimates 

are computed using five alternative global socioeconomic and GHG emissions futures designed 

to span a range of possible global futures, with each future considered equally likely. 

Compliance costs and CO2 reductions in the RIA, on the other hand, assume a single, U.S. 

power sector projection (based on the AEO 2013 Reference Case). This is an issue because the 

underlying USG modeling shows that SCC values vary across socioeconomic and emissions 

assumptions (USG, 2014). Therefore, one would want the same reference case assumptions for 

the SCC, CO2 reductions, and compliance costs, or an argument for why it is unnecessary." 

Commenters found that when comparing the USG SCC and AEO2013 Reference Case 

socioeconomic and emissions projections, "the AEO2013 projections do not compare well with 

any of the USG SCC input scenarios, with lower projected U.S. energy sector CO2 emissions 

and higher GDP that are based on much lower assumptions regarding the emissions and energy 

intensity of output (CO2/GDP and Btu/GDP respectively)". 

Commenters stated that "USG SCC technical documentation recommends using all four of the 

USG time profiles of SCC values. The four have meaningful differences in discounting and what 
71 

they represent probabilistically. However, there is no USG guidance on how agencies should 

apply the different SCC values jointly and consistently in rulemaking." Commenters stated that 

"EPA overestimates the climate benefits of the proposed ESPS regulation" and that the SCC 

estimates are projected for excessively long model time horizons. Commenters stated, "Global 

warming (now climate change) is an artifact of modeling and SCC is therefore a model of 

models." 

Commenters stated "the SCC's models make assumptions about the vulnerability of society to 

climate change, which is primarily driven by levels of economic development. Ironically, the 

economic damage inflicted by the Proposed Rule would increase society's vulnerability to the 

very impacts that EPA claims it wishes to avoid." 

Commenter stated "the estimates of the SCC have no connection to the real world, nor do the 

Global Circulation Models. Physics may tell us that increasing greenhouse gases will increase 

global temperature but it tells us nothing at this point in our knowledge about what that increase 

will do to global temperatures and climate." 

Commenters stated that EPA's assessment of the costs of the Proposed Rule is arbitrary as it fails 

to accurately account for the benefits of greenhouse gas reduction by understating the climate 

costs of fossil methane combustion and the social cost of carbon, and omitting any calculation of 

the consequences of the rule's proposed compliance delay. 

Commenters cited the study by Bobb et al., 2014, which examined the trends in heat-related 

mortality across the U.S. using data from 1987 through 2005. The commenters said the study 

provides strong evidence that acute (e.g., same-day) heat-related mortality risk has declined over 

time in the US, even in more recent years. The commenters also cited different studies with 

similar results on community-specific mortality rates in the U.S., using earlier data from 1960s 

through mid-1990s (e.g. Davis et al. 2003a; Davis et al. 2003b). The commenters also cited 

European studies that found temporal declines in heat-related mortality risk (Carson et al. 2006; 

Donaldson et al. 2003; Kysely and Plavcova 2011; Schifano et al. 2012). The commenters added 

these studies support the hypothesis that the population is continually adapting to heat, despite 

the rise in temperature leading to an increased magnitude and frequency of heat events. The 

commenters said that sensitivity to heat is declining and the cause for this is likely found in a 

collection of adaptations including increased access to air-conditioning, better medical care, 

community response programs, heat watch/warning systems, and biophysical changes. The 

commenters said that there is no reason to think that such response measures won't continue to 

exist and be improved upon into the future. The commenters concluded stating that through the 

collective adaptive response, climate change not only does not result in negative human health 

outcomes, but may, in fact, spur positive ones. The commenters said these findings render the 

EPA's contention to the contrary to be shallow and misleading and unfit to justify this regulation. 

Response 8: The comments regarding the aggregation of the SC-CO2 estimates and general 

application in a rulemaking context mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; November 26, 2013). As 

a member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined 

and evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully 

examined and evaluated all comments received regarding SC-CO2 through this rulemaking 
72 

process and determined that the IWG responses to the comments on the OMB solicitation 

address the comments on the aggregation of SC-CO2 estimates and use of the estimates in this 

RIA. Specifically, EPA concurs with the IWG’s response to these comments and hereby 

incorporates them by reference.25 The remainder of this section elaborates on these comments in 

the context of this rulemaking. 

EPA and other members of the IWG have reconfirmed their commitment to periodic review and 

update of the methodology and estimates to ensure that they continue to reflect the best available 

science and economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2 

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies. 

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in this rulemaking.26 EPA will continue to consider these comments 

and will share the recommendations with the IWG as it moves forward with the Academies 

process. 

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

 

25 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 25 to 28, 

40-41 at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-commentsfinal-july-2015.pdf . 

26 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf 
73 

Aggregation and selection of SC-CO2 estimates 

Some comments discussed the aggregation of model results and the selection of the final range 

of SC-CO2 estimates. Both the 2010 TSD and the current TSD present information about the full 

distribution of SC-CO2 estimates within and across possible combinations of the three models 

and five socioeconomic-emissions scenarios, for each of three discount rates (45 combinations in 

total) (see tables A2-A4 in Appendix A of the TSDs). Additional summary statistics for the 

distributions of the SC-CO2 estimates are also provided for each of the three models (see Table 

A5 in Appendix A). EPA believes that the information presented in the TSDs is sufficiently 

disaggregated to reflect the variability of the SC-CO2 estimates across models, input 

assumptions, and discount rates. In addition, EPA has provided the full set of Monte Carlo 

modeling results (10,000 model runs for each combination, for a total of 450,000 observations 

per emissions year) to outside researchers upon request and will continue to do so. 

As discussed in the 2010 TSD, using the full distribution of the SC-CO2 estimates from the 45 

scenarios would be impractical in a regulatory impact analysis. To produce a range of plausible 

estimates that still reflects the uncertainty about the SCC estimates, the results from the various 

model and scenario combinations (150,000 observations per emissions year for each of the three 

discount rates) were pooled to produce three separate probability distributions for the SC-CO2

for emissions in a given year, one for each assumed discount rate (2.5, 3 and 5 percent). Three 

point estimates were then derived from these pooled distributions representing the mean at each 

discount rate. EPA considers this approach for presenting expected SC-CO2 values across a 

range of discount rates to be appropriate for representing the central tendency of the SC-CO2

estimates across scenarios. The fourth value, the 95

th percentile of the pooled distribution using a 

3 percent discount rate, is included to represent higher-than-expected economic impacts from 

climate change further out in the tail of the SC-CO2 distribution - i.e., impacts that may have 

lower probability of occurring but relatively high damages. For purposes of representing the 

uncertainties involved, the TSDs emphasized the importance of considering and presenting the 

full range of these four estimates in regulatory impact analysis. 

EPA agrees that the modeling of uncertainty in our analysis, including the uncertainty explicitly 

represented in the IAMs, may not capture the full range of uncertainty of the "true" value of the 

SC-CO2. This concern is common to most quantitative assessments of uncertainty. By definition, 

the modeling of uncertainty requires a model, and therefore cannot capture the uncertainty 

associated with model selection. However, EPA does not agree that pooling results across 

models implies that the estimates capture the full range of uncertainty, nor is such a claim made 

in the TSDs or the rulemaking’s supporting documents. Rather, EPA attempted to capture a 

reasonable range of uncertainty using information available in the peer-reviewed literature and 

the uncertainty analysis built into the models themselves. Using three models rather than one 

helps address, but does not eliminate, uncertainty associated with model choice. 
74 

Along with the four selected SC-CO2 estimates for each emissions year, the IWG presented more 

detailed information about the full distribution of SC-CO2 estimates for emissions in the year 

2020. Specifically, the 2013 TSD reports information on the full distribution of the SCC 

estimates for emissions in year 2020 for each model, scenario, and discount rate combination , 

including the low-end percentiles (i.e., 1st, 5th and 10th percentiles).27 In addition, as noted above, 

complete distributions for all emissions years are available upon request. While the TSDs did not 

present a summary 5th percentile estimate (i.e., pooling results across the models and scenarios) 

for use in regulatory impact analysis, for reasons discussed below, the model and scenario 

specific statistics for 2020 provide a general sense of how the 5th percentile relates to the mean. 

Furthermore, as we note above, EPA has provided the full set of Monte Carlo modeling results to 

outside researchers upon request and will continue to do so. This information may be used to 

calculate a full set of 5th percentile summary statistics that are comparable to the 95th percentile 

estimates provided in the TSDs. 

As the 2010 TSD discusses, the SC-CO2 estimates derived from the three integrated assessment 

models have several significant limitations that could lead to a substantial underestimation of the 

SC-CO2. These limitations include the incomplete treatment and monetization of noncatastrophic damages, the incomplete treatment of potential "catastrophic" damages, and 

uncertainty in extrapolation of damages to high temperatures. The IPCC Fourth Assessment 

Report, which was the most current IPCC assessment available at the time of the IWG’s 2009-

2010 review, discussed these limitations and concluded that it was "very likely that [SCC] 

underestimates" climate change damages. Based on the current scientific understanding of 

climate change and its impacts, and on the limitations of the IAMs in quantifying and monetizing 

the full array of potential "catastrophic" and non-catastrophic damages, EPA and the other 

members of the IWG concluded that the distribution of SCC estimates may be biased 

downwards. Since then, the peer-reviewed literature has continued to support this conclusion. 

For example, the IPCC Fifth Assessment report observed that SC-CO2 estimates continue to omit 

various impacts that would likely increase damages. The 95th percentile estimate was included in 

the recommended range for regulatory impact analysis to address these concerns. 

In addition, as acknowledged in the 2010 TSD, the SC-CO2 estimates derived from the three 

IAMs did not take into consideration the possibility of risk aversion. That is, individuals may 

have a higher willingness-to-pay to reduce the likelihood of low-probability, high-impact 

damages than they do to reduce the likelihood of higher-probability, lower-impact damages with 

the same expected cost. The inclusion of the 95th percentile estimate in the SC-CO2 values was 

also motivated by this concern. In contrast, EPA is not aware of systematic upward biases in the 

 

27 The 2010 TSD including information on the full distribution of SCC estimates for the emission 

year 2010, however the 2013 TSD presented this information for the 2020 emissions year as 

2010 was then a historical year.
75 

estimates comparable to the downward biases discussed above. For this reason, while EPA and 

other members of the IWG have been fully transparent regarding the entire range of uncertainty 

reflected in the probability distributions, EPA did not include a 5th percentile estimate in the 

selected range for regulatory impact analysis. 

The choice of the mean or the median as a measure of central tendency depends on the context. 

In skewed distributions, such as for the SC-CO2 estimates, the median will often give a more 

"typical" outcome, while the mean will give full weight to the tails of the distribution. In some 

cases, the typical outcome is of most interest. For example, in describing household incomes the 

median is most often used because the focus is on understanding the income of the typical 

household, and using the mean might distort this picture by giving undue weight to a small 

number of very wealthy households. In the climate change context, however, sound decisionmaking requires consideration of not only the typical or most likely outcomes, but also less likely 

outcomes that could have very large (or small, or even negative) damages (the tails of the 

distribution). Use of the median to represent the SC-CO2 in a regulatory impact analysis would 

not necessarily lead to the most efficient policy choice that uses resources wisely to mitigate 

potential climate impacts (e.g., maximize the expected net benefits). In this case, EPA believes 

that the mean is the appropriate measure of central tendency. 

Application to the Clean Power Plan 

EPA agrees with those supportive of the application of the estimates. Commenters who stated 

that the benefits do not exceed the costs based this conclusion on use of a domestic estimate and 

different discount rates. See section 8.7.2, comment 3, for EPA’s detailed response to comments 

on the use of a global versus domestic SC-CO2. See section 8.7.2, comment 7, for EPA’s 

detailed response to comments about the selection of the discount rate. See also EPA’s detailed 

response to comments on the IAMs and damage functions in 8.7.2, comment 1, and EPA’s 

response to comments regarding peer review and other process-related issues for SC-CO2, 

including the documentation discussing SC-CO2 methodology, in 8.7.2, comment 5. See section 

8.7.2, comment 11, for EPA’s response to comments regarding the time horizon included in the 

benefits analysis. 

Regarding the recommendation to detail the significant and unquantified climate effects in the 

RIA, i.e. the impacts currently omitted from the IAMs used to estimate the SC-CO2, EPA has 

updated the RIA discussion to reference several publications that identify and discuss some of 

the important, unquantified climate effects. EPA notes, however, that it is not possible at this 

time to provide a precise list of each model’s treatment (i.e., included, excluded) of climate 

impacts. Instead, the TSDs present a robust discussion of this key analytical issue, e.g., how 

each model estimates climate impacts, the known parameters and assumptions underlying those 

models, and the implications of incomplete treatment of impacts (catastrophic and noncatastrophic) for the SC-CO2 estimates. Moreover, the discussion in the SC-CO2 TSD 

underscores the difficulty in accurately distilling the models’ treatment of impacts in table-form. 

Most notably, the use of aggregate damage functions—which consolidate information about 

impacts from multiple studies—in two of the models poses a challenge in listing included 

impacts. For example, within the broad agricultural impacts category, some of the sub-grouped 

impacts are not explicitly modeled but are highly correlated to other subcategories that are 

explicitly modeled. EPA agrees that it is important to update the SC-CO2 periodically to 
76 

incorporate improvements in the understanding of greenhouse gas emissions impacts and will 

continue to follow and evaluate the latest science on impact categories that are omitted or not 

fully addressed in the IAMs. As previously noted, EPA and the other IWG members will seek 

external expert advice on the technical merits and challenges of potential approaches to update 

the damage functions in future revisions to the SCC estimates. Finally, the RIA also continues to 

discuss climate change impacts, specifically an overview of the 2009 Endangerment Finding and 

climate science assessments released since then (see RIA, Chapter 4). 

EPA disagrees with the comment that EPA should not apply the SC-CO2 to marginal emission 

impacts because of the rulemaking’s potential impact on industry and competitiveness, and notes 

that the commenters have misunderstood the discussion about the applicability of SC-CO2

estimates. The SC-CO2 is an estimate of the marginal benefit of a net one-ton reduction in CO2

emissions. The SC-CO2 estimates are multiplied by estimates of net CO2 emissions changes in a 

given year to calculate the value of the benefits associated with the policy action that achieves 

the emissions reductions. Given that the definition of marginal in this context relates to the 

change in CO2 emissions relative to the global level of CO2 emissions, the SC-CO2 is the 

appropriate metric to use in estimating the benefits of emissions changes as a result of this 

rulemaking. The applicability of the SC-CO2 to monetizing the benefits of an emissions change 

is not related to rulemaking’s costs or economic impacts. These factors are independent of the 

SC-CO2 estimates and are therefore not related to the applicability of the SC-CO2. The 

estimation of the social benefits of avoiding or reducing CO2 emissions is a separate and 

independent calculation from the analysis of the policy’s compliance costs and impacts on 

industry competitiveness. See section V of the final rule preamble for a discussion of the costs of 

the final guidelines and RIA Chapter 3 for a discussion of the cost estimates of the rulemaking 

for illustrative compliance scenarios and Chapter 5 and RTC section 8.7.6 for a discussion of 

secondary market impacts. 

EPA disagrees with the comments that characterize the SC-CO2 as an illusory or otherwise 

unsupportable metric. EPA acknowledges uncertainty in the SC-CO2 estimates but disagrees that 

the uncertainty is so great as to undermine use of the SC-CO2 estimates in regulatory impact 

analysis. The uncertainty in the SC-CO2 estimates is fully acknowledged and comprehensively 

discussed in the TSDs and supporting academic literature. While uncertainty must be 

acknowledged and addressed in regulatory impact analyses, even an uncertain analysis provides 

useful information to decision makers and the public. For example, if an analysis shows that 

benefits of a policy option consistently do (or do not) justify costs even over a broad range of 

estimates, this may increase confidence in the robustness of this conclusion. Conversely, if 

choices among parameter estimates within a plausible range significantly affect the conclusions 

of the analysis, this is an important consideration in deciding how to weigh the analytical results 

in the decision making process. The presence of uncertainty is thus not a reason to exclude the 

best available estimates of quantified/monetized benefits, as long as it is appropriately 

characterized. Rather, good regulatory practice requires that agencies use the best available 

scientific, technical and economic information to derive the best estimates of costs and benefits 

that they can, and then communicate to the public the limitations and uncertainties of the 

analyses. This is what EPA and all of the members of the IWG have attempted to do in 

developing and discussing the SC-CO2 estimates. As noted in the SC-CO2 TSDs, the EPA and 

the other IWG members are committed to periodic updates in the estimates to reflect ongoing 
77 

developments in our understanding of the science and economics of climate change, including 

the treatment of uncertainty. Moreover, as previously stated, EPA has determined that the current 

SC-CO2 estimates continue to represent the best scientific information on the impacts of climate 

change available in a form appropriate for incorporating the damages from incremental CO2 

emissions changes into regulatory analyses. See also Coalition for Responsible Regulation v. 

EPA, No. 09-1322 (D.C. Cir. June 26, 2012) slip op. p. 27 ("State and Industry Petitioners assert 

that EPA ‘delegated’ its judgment to the IPCC, USGCRP, and NRC by relying on these 

assessments of clime-change science. This argument is little more than a semantic trick....EPA 

simply did here what it and other decision-makers often must do to make a science-based 

judgment: it sought out and reviewed existing scientific evidence to determine whether a 

particular finding was warranted. It makes no difference that much of the scientific evidence in 

large part consisted of ‘syntheses’ of individual studies and research. Even individual studies 

and research papers often synthesize past work in an area and then build upon it. This is how 

science works. EPA is not required to re-prove the existence of the atom every time it 

approaches a scientific question.") 

EPA disagrees with the comment that SC-CO2 values are not trusted because "they have 

increased dramatically in recent years" due in part to the many assumptions required for 

calculating SC-CO2. Commenters also believe SC-CO2 values are easily manipulated. EPA and 

other federal agencies had received multiple public comments urging them to update the 

estimates. In response to these comments and consistent with the 2010 commitment to 

periodically revise the SC-CO2 estimates, in 2013 the IWG released an update to the SC-CO2 

estimates that maintained the same methodology underpinning the previous estimates, but 

applied the most current versions of the three IAMs. The science underlying the assessment and 

valuation of climate change impacts is constantly evolving. Since the publication of the initial 

SC-CO2 estimates in 2010, the representation of the science and economic consequences of 

climate change in the three IAMs has improved. The 2013 SC-CO2 technical update allowed the 

SC-CO2 estimates to reflect these improvements. Some of the model revisions tended to increase 

the value of SC-CO2 while others tended decreased it. The updated values reflected the net 

effect of all of those changes. None of interagency working group’s 2010 modeling decisions 

were revisited as a part of the 2013 update. The 2013 update used the same approach and 

assumptions as the 2010 analysis, but with the latest version of each of the three models 

available. In addition, the TSDs fully discuss the sensitivities of the SC-CO2 and how the 

interagency working group explored those sensitivities. See also 8.7.2, comment 4 for 

discussion about treatment of uncertainty. 

EPA strongly disagrees with the comment that climate change is an artifact of modeling, Global 

Circulation Models have no connection to the real world, and SCC is therefore a model of 

models. See 8.7.2, comment 1, for detailed response to comments criticizing the IAMs and 

section 8.7.1, comment 6 for response to comments arguing that climate is too complex for 

computer models or EPA to be able to predict the impact of GHG mitigation. 

Regarding the comments about quantification versus monetization of the climate benefits and the 

comment that the Agency has not provided a single quantifiable climate benefit of the proposed 

rule, EPA disagrees and notes that it has in fact provided the estimated value of climate benefits. 

The climate benefits estimates have been calculated using the estimated values of marginal 
78 

climate impacts, known as the social cost of carbon (SC-CO2), presented in the Technical 

Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact 

Analysis under Executive Order 12866. The SC-CO2 is a metric that estimates the monetary 

value of impacts associated with marginal changes in CO2 emissions in a given year. It includes 

a wide range of anticipated climate impacts, such as net changes in agricultural productivity and 

human health, property damage from increased flood risk, and changes in energy system costs, 

such as reduced costs for heating and increased costs for air conditioning. It is typically used to 

assess the avoided damages as a result of regulatory actions (i.e., benefits of rulemakings that 

have an incremental impact on cumulative global CO2 emissions). In order to calculate the dollar 

value for emission reductions, the SC-CO2 estimate for each emissions year is applied to 

changes in CO2 emissions for that year, and then discounted back to the analysis year using the 

same discount rate used to estimate the SC-CO2. While the impacts of CO2 emissions changes, 

such as sea level rise, are estimated within each integrated assessment model as part of the 

calculation of the SC-CO2, it is the resulting monetized damages that are relevant for conducting 

the benefit-cost analysis. As such, it is the SC-CO2 estimates that are used in the RIA to 

estimate the welfare effects of quantified changes in CO2 emissions. 

Regarding the comments on leakage, specifically that multiplying the SC-CO2 values by 

estimated CO2 reductions within the power sector only is problematic because the SC-CO2

should only be applied to estimated net changes in global CO2 emissions, EPA notes that it has 

applied the SC-CO2 estimates to the best available estimate of the net emissions impact and 

includes emissions from the new fossil fuel sources subject to the final 111(b) standard (see RIA 

Chapter 3 and the final rule for 111(b)). As discussed in RIA Chapter 5, EPA has not quantified 

the emissions leakage, if any, that may result from secondary market impacts. The final 111(d) 

emission guidelines cover existing fossil fuel-fired EGUs, and the EPA does not see evidence 

that notable changes would result from secondary markets, including industry, given the 

relatively modest changes in electricity prices; see also the RTC, Section 8.6, comment 18. EPA 

recognizes that this is an important issue for analysts to consider in determining the net CO2 

reductions to be valued in an RIA but notes that it does not affect the calculation of the SC-CO2

itself, which is an estimate of the marginal benefit of a net one-ton reduction in CO2 emissions. 

The SC-CO2 estimates are multiplied by estimates of net GHG emissions changes to calculate 

the value of benefits associated with a policy action in a given year. It is in the estimation of net 

GHG emissions, and not the SC-CO2, that any leakage should be accounted for. 

Regarding the comment about inconsistencies in the scenarios underlying the rulemaking’s base 

case (AEO) and the SCC estimates (EMF-22), and specifically the recommendation to use the 

same scenarios in the calculation of the SC-CO2, EPA has determined that updating the scenarios 

underlying the SC-CO2 estimates requires additional research. The selection and harmonization 

of scenario variables among the IAMs used to estimate the SC-CO2 involved extensive 

discussion and analysis by EPA and other members of the IWG. Given the time and resources 

required to run the IAMs in addition to the difficulty in incorporating new scenarios to the IAMs, 

it is not feasible to change the scenarios and re-estimate the SC-CO2 for every rulemaking at 

every agency. The EMF-22 scenarios were peer-reviewed, and publicly available, they had the 

key advantage that GDP, population, and emissions trajectories are internally consistent for each 

model and scenario evaluated. As noted in the 2010 TSD, the scenarios used "span a wide range, 

from the more optimistic (e.g. abundant low-cost, low-carbon energy) to more pessimistic (e.g. 
79 

constraints on the availability of nuclear and renewables)." EPA will continue to follow and 

evaluate the latest science on socioeconomic-emissions scenarios and along with all the members 

of the IWG, is seeking external expert advice on the technical merits and challenges of potential 

approaches to update these scenarios in future revisions to the SC-CO2 estimates. See the OMB 

Response to Comments document on SC-CO2 for a full discussion about the EMF-22 scenarios 

and consideration of potential inconsistencies between the scenarios and IAMs.28

Regarding the recommendation for USG guidance on the application of the SC-CO2, specifically 

guidance that would clarify the TSD’s recommendation to use all four SC-CO2 estimates in 

rulemaking analyses, EPA first notes that it has followed the current guidance to consider all four 

values in regulatory impact analysis. EPA agrees that consistent and appropriate application of 

the SC-CO2 estimates is important. EPA will inform OMB of this comment requesting 

additional guidance of the application of the SC-CO2 to regulatory impact analysis. 

EPA disagrees with the comment that the rulemaking would increase society’s vulnerability to 

climate change. See RIA for complete discussion of the rulemakings estimated benefits and 

costs for illustrative implementation scenarios and section XI.D of the final rule preamble for 

discussion of the costs of the emission guidelines. See RTC section 8.7.2, comment 1, for 

additional responses to comments about the IAMs. 

EPA disagrees with the comment that the Agency has not accurately accounted for greenhouse 

gas impacts by "understating the climate costs of fossil methane combustion and the social cost 

of carbon, and omitting any calculation of the consequences of the rule's proposed compliance 

delay." See the following sections: 

• Fossil methane combustion: EPA has analyzed the potential changes in upstream 

methane emissions from the natural gas and coal production sectors that may 

result from the illustrative approaches examined in the RIA. See RIA, Chapter 3 

and Appendix 3A, and Response to Comments section 8.2, comment 18, for 

details about EPA’s estimates of methane emissions from natural gas systems. 

• Social cost of carbon: regarding the treatment of climate change impacts 

consideration from CO2 emissions, see 8.7.2, comment 1, for broad discussion 

about the integrated assessment models’ treatment of climate change impacts and 

8.7.2, comment 6, for discussion specific to the integrated assessment models’ 

treatment of carbon fertilization in the agriculture and forestry sectors. 

 

28 See the OMB Response to Comments, pgs 17-20, at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf 
80 

• Proposed compliance delay: EPA disagrees with the commenters’ conclusion that 

the RIA should have calculated the impact of a "proposed compliance delay" 

because there is no delay relative to the baseline scenario, i.e., a world without the 

proposed rulemaking. Rather, the final rulemaking establishes an 8-year interim 

compliance period that begins in 2022 with a glide path for meeting interim CO2 

emission performance rates separated into three steps: 2022-2024, 2025-2027, 

and 2028-2029. This results in interim and final statewide goal values unique to 

each state’s historical blend of fossil steam and stationary combustion turbine 

generation. States and tribes with one or more affected EGUs will be required to 

develop and implement plans to ensure that their affected EGUs, individually, in 

aggregate, or in combination with other measures undertaken by the state, achieve 

the equivalent of the final CO2 emission performance rates by 2030. See preamble 

section VIII.B, "Timeline for state plan performance and Provisions to Encourage 

Early Action" for detailed discussion about the timing of achieving the emission 

guidelines and state plan performance periods. Consistent with EPA’s economic 

guidelines and OMB’s guidance for RIAs, EPA analyzed the potential benefits 

and costs of approaches states may take to achieve the interim and final CO2 

emission performance rates and compared them to a baseline that reflects the 

world without this rulemaking. Given the flexibilities afforded states in 

complying with the emission guidelines, the benefits, cost and economic impacts 

reported in this RIA are not definitive estimates. The impact estimates are instead 

illustrative of approaches that states may take; see RIA Chapter 3 for details about 

the baseline and illustrative scenarios. See section V of the preamble for a 

discussion of the costs of the final guidelines. 

For comments regarding the studies on heat-related mortality, see RTC 8.7.1, comment 15. 

Comment 9: Value of goods and services whose production is associated with CO2 emissions 

Some commenters felt that the SC-CO2 estimates should include the value to society of the 

goods and services whose production is associated with CO2 emissions. Many of these 

commenters mentioned goods produced using fossil fuels, such as "plastics, chemicals, nitrogen 

fertilizer, steel, aluminum, synthetic rubber for tires, glass, pharmaceuticals, and paper." Some 

commenters argued for including the benefits to "regions that depend on employment from 

energy intensive industry, regions dependent on fossil fuels for heating, cooling, food production 

and other components associated with preserving their standard of living and regions that are in 

need of low cost fossil fuels to enable the economic development improving their standard of 

living." Similarly, other commenters focused on the negative consequences of regulating CO2 

emissions, such as the potential effect on energy prices, economic growth, or international 

competitiveness. Commenters suggested the inclusion of "... the social costs and economic 

dislocations that could result from carbon reduction policies that would eliminate fuel options 

such as coal, the social costs associated with higher electricity prices, and the economic and 

security risks associated with electric reliability problems." 
81 

Response 9: Rigorous evaluation of benefits and costs is a core tenet of the rulemaking process. 

EPA agrees that these are important issues that may be relevant to assessing the impacts of 

policies that reduce CO2 emissions. However, these issues are not relevant to the SC-CO2 itself. 

The SC-CO2 is an estimate of the net economic damages resulting from CO2 emissions, and 

therefore is used to estimate the benefit of reducing those emissions. 

A rule that affects CO2 emissions may also affect the production or consumption of goods and 

services, in which case it could create costs and benefits for businesses and households that 

either produce or use those goods and services. These costs and benefits are important to include 

in an analysis of the rule’s impacts, but are not a result of changes in CO2 emissions. The SCCO2 is not a measure of social welfare from the consumption of goods and services whose 

production results in CO2 emissions, or other positive or negative externalities associated with 

the production of those goods and services. In other words, the SC-CO2 is just one component of 

a larger analysis that includes consideration of many other potential impacts, including labor 

market changes, energy security, electricity reliability, and changes in emissions of other 

pollutants, among others. 

Comment 10: Commenters stated general agreement that the costs and benefits associated with 

coal-fired power plants and climate change (social or otherwise) are real. Commenters provided 

the following citations and statements:

Some commenters cited the National Climatic Data Center which reported the U.S. experienced 

nine climate or weather disasters that each caused more than a billion dollars of damage in 2013. 

Other commenter stated "The cost of doing nothing is huge. Arguments that the EPA regulations 

will be too costly today ignore the future economic costs of climate change. Sea level rise, 

changes in temperature, and increases in hurricanes and other extreme events will wreak havoc 

on the economies across the country, and even worker productivity. Climate and weather 

disasters in 2012 alone cost the American economy more than $100 billion." 

Other commenters stated, "Over the last decade, the winter tourism industry has lost an estimated 

$1 billion and as many as 27,000 jobs." 

Other commenters stated "The costs of climate change are already proving to be staggering. In 

2012, global costs from natural catastrophes were $160 billion. Domestically, studies have 

found that over the last 30 years weather-related loss events in North America have quintupled. 

In the U.S., 11 weather events costing more than $1 billion each occurred in 2012 with the cost 

of Superstorm Sandy alone exceeding $60 billion and the drought which afflicted half the 

country costing $11 billion. These costs are expected to rise as climate change continues." 

Other commenters cited several climate-related impact projections from a study by Dr. Katherine 

Hayhoe of Texas Tech University and goes on to state the "Cost of inaction exceeds the cost of 

action." "In the future, agriculture around the San Antonio Texas Edwards Aquifer region is 

likely to suffer enormously because of climate change induced water shortages and extreme heat. 

The regional impact may reach losses for $3.6 to $6.5 billion by 2030. Meanwhile, with even a 
82 

small increase of carbon, health care costs in Texas could increase from $79 million to $1.7 

billion annually because of subsequent rise in all kinds of heat-related illnesses, medical 

conditions, and diseases." 

Other commenters stated "Climate change is projected to cause tremendous harm as a matter of 

economic cost alone. A 2008 analysis estimating the U.S. costs of climate change... found costs 

ranging from $271 billion in 2025 to $1.9 trillion in 2100. A 2014 analysis projects costs of $525 

billion of the next 15 years just from damage to coastal property and infrastructure. It also 

projects at 10% decline in crop yield in some Midwestern and Southern counties over the next 5 

to 25 years and up to $300 billion in costs over the same period for new electric generation to 

meet increased demand for cooling." 

Commenters stated that the rulemaking’s benefits analysis showed that the "benefits of EPA's 

CPP proposal are substantial and far exceed its costs." 

Commenters voiced general agreement with the climate benefits of the proposed rule and stated 

"For Virginia to avoid the spiraling consequences of climate change, carbon emissions must be 

reduced significantly." The commenters noted "Rising sea levels have already forced the Navy 

to implement a $60 million replacement of 14 piers in Norfolk, to protect the Navy's ship repair 

facilities." Also, the commenters stated "Rising sea levels and increased storm surges attributed 

to climate change have caused increasingly severe and widespread property damage nationally. 

In 2012 alone, insured losses in the U.S. totaled $58 billion. The effects of climate change have 

been felt strongly in Virginia, particularly in the Virginia Beach/Norfolk/Hampton Roads 

region." Commenters also stated "EPA determined the carbon reduction benefits of the CPP by 

using its SCC which measures these benefits on a global, rather than state-specific scale." "We 

applied EPA's SCC assumptions to the Virginia-specific carbon reductions to calculate the 

carbon reduction benefits of the proposal." 

Commenters stated that "Climate change poses immense risks to public health, infrastructure, 

and economic vitality of New York City." "The high winds and unprecedented storm surge that 

accompanied Sandy left 45 people dead in the City with countless others injured, with at least 

$19 billion in damages and lost economic activity in New York City alone." 

Commenter referenced a study by the faculty of Harvard Medical School in 2011 which 

quantified social costs incurred in the U.S. by using coal to generate electricity. The commenters 

stated that study "estimates that the life cycle effects of coal and the waste stream generated are 

costing the American public from one-third to over one-half of a trillion dollars annually. The 

cost of complying with EPA's proposed standard is trivial in comparison." Commenters also 

stated "The Harvard study conservatively estimates that if all of the external costs of coal were 

accounted for, they would double or triple the price of coal." 

Some commenters cited recent studies from Lawrence Berkeley National Laboratory, the 

National Institute of Environmental Health Sciences and the University of Washington that 

indicate that emission reductions from plant efficiency improvements, building infrastructure 

improvements, and substitutions for lower carbon energy sources will generate between $6 and 

$30 billion in economic benefits due to reduced exposure to harmful emissions, equivalent to 

$40 and $198 per metric ton of CO2 generated. The commenters also cited a 2013 IWG on the 
83 

Social Cost of Carbon report which provided updated values on the cost of each metric ton of 

CO2 at $12, $43, $65, and $129 for the year 2020. The commenters stated that while these 

figures may underestimate the true cost of carbon, the reports to illustrate the potential impact of 

carbon emissions and highlight the urgency to act to protect public health and welfare from 

climate change. 

Response 10: EPA thanks the commenters for submitting this information and agrees that the 

public health and climate benefits of the rulemaking far outweigh the estimated annual costs of 

meeting the standards. Implementing the standards will generate climate benefits by reducing 

CO2 emissions. Carbon pollution leads to long-lasting changes in our climate, such as rising 

global temperatures; rising sea level; and changes in weather and precipitation patterns. These 

impacts lead to changes in net agricultural productivity, human health, property damages from 

increased flood risk, and the value of ecosystem services, among other effects. The RIA presents 

a complete and detailed analysis of the final rulemaking’s benefits and costs of illustrative 

implementation scenarios. See section V of the final rule preamble for a discussion of the costs 

of the final guidelines. 

Comment 11: Some commenters discussed the comparison of costs and benefits and concluded 

that the RIA has incorrectly compared annualized costs to climate benefits. These commenters 

recommended comparing the present value of costs to the present value of benefits. 

• Some commenters stated that "The RIA compares levelized (or annualized) 

compliance costs to annual CO2 benefits. This is an inconsistent comparison with 

no practical meaning. The proper comparison is a comparison of the net present 

value streams of fixed and variable compliance costs and estimated benefits (both 

for CO2 and air pollution reductions)." 

• Commenters stated that the tons of reduction that are achieved in the three 

annualized years in the RIA (2020, 2025 and 2030) result from the full 

expenditure of the capital investments that enable those reductions, and that 

capital spending occurs entirely in the years before, not after, the emissions 

reductions can be achieved. The commenters therefore stated that the values do 

not reflect the spending in the years in which the society actually makes those 

investments of capital and labor. The commenters presented an alternative 

comparison of the costs and benefits that omits the stream of benefits occurring 

beyond the year 2030. The commenters stated this alternative analysis showed 

smaller benefits relative to those presented in EPA’s RIA. Commenters stated that 

"the RIA's cost analysis indicates that the U.S. will have spent approximately 

$182 billion to comply with the CPP through 2030, yet the that will have globally 

accumulated by that time are estimated to be only $3.5 to 4.6 billion. The 

commenters concluded that any RIA that involves large upfront spending with 

delayed benefits should report the temporal patterns in the estimated benefits and 

costs in this manner. 
84 

• Other commenters stated that readers may incorrectly assume the benefits 

presented for the years 2020, 2025, and 2030 will actually be experienced in those 

years. 

Commenters stated that SC-CO2 estimates are projected for excessively long model time 

horizons. 

Commenters reiterated that the SCC is an estimate of the total benefits through 2300 of a ton of 

avoided incremental CO2 emissions in any given year, stated as a present value in the year of 

emission. The commenters described a few "aspects of the IAM calculations that cause most of 

that present value to be associated with benefits far in the future." 

Commenters discussed the distributional impacts of the proposed rule's costs and benefits, stating 

that the RIA should discuss a "distributional question of who pays and who gains from the 

regulation from an income distribution perspective." Commenters also disagreed with use of the 

global SC-CO2. 

Response 11: EPA disagrees with the comment that there is "no practical meaning" in the 

comparison between the levelized compliance costs and year-specific benefit estimates. RIA, 

Chapter 3, discusses the basis for using levelized costs, stating that the power sector modeling 

and analysis reflect the EPA’s best assessment of likely impacts of the Clean Power Plan (CPP) 

under a range of approaches that states may adopt, but due to uncertainty over the ultimate 

approaches adopted by states are "intended to be illustrative in nature". The modeling is designed 

to reflect the rule’s requirements, including the timing, applicability to sources, and flexibilities 

across the power system as accurately as possible to represent the nature and scope of the CPP. 

The analysis is a reasonable expectation of the incremental effects of the rule and cost to the 

power sector (inclusive of the cost of demand-side energy efficiency), and is consistent with past 

EPA analyses of power sector regulatory requirements (and estimates of the costs and benefits)." 

The RIA, Chapter 3, concludes that "Although the analysis of the CPP does not include estimates 

of the costs and benefits of the CPP across each year of the rule in a year-by-year manner, the 

EPA has reflected the structure of the rule, including the interim and the final state goals of the 

CPP, in a manner that is consistent with the regulatory requirements." Chapter 4 of the RIA 

likewise provides a robust discussion of the SC-CO2 estimates used to estimate the benefits. 

Furthermore, it is not feasible to develop a stream of the benefits estimates for reductions in nonCO2 pollutant emissions as would be required for a net present value calculation given that 

emissions reductions for non-CO2 pollutants are only available for certain years; thus quantified 

benefits from reductions of non-CO2 pollutants are only available for those years. It is not 

appropriate to interpolate the benefits of reductions in non-CO2 pollutant emissions between the 

years analyzed because regional power sector non-CO2 emissions vary non-systematically 

between years, making linear interpolation methods invalid. 

EPA disagrees with the alternative benefit-cost comparison presented by the commenters that 

truncated benefits to the year 2030. EPA likewise disagrees with comments that the rule's 

climate benefits do not represent an estimate of the damages avoided and with comments that the 

time horizon modeled is excessively long. The commenters have misunderstood the basis for the 

benefit calculation and the nature of damages resulting from CO2 emissions. The SC-CO2

estimate for the year 2030 represents the estimated present value of additional damages expected 
85 

to be borne by society from the year 2030 through the year 2300 as a result of an incremental ton 

being emitted in 2030, not additional damages from the year 2010 to 2300 as incorrectly stated 

by some commenters. Consistent with standard economic theory and practice, the SC-CO2

represents the present value of the stream of damages associated with forgone emissions in a 

given year, accounting for the long-lived nature of greenhouse gases. The damages that result 

from a ton of CO2 emitted in the year 2030, for example, accrue over time, and focusing only on 

the year of the CO2 emissions change—or the subset of years covered by the rulemaking29—

would be inconsistent with standard economic theory and practice as it would fail to account for 

a substantial portion of the benefits associated with the emissions reduction. The 2010 TSD 

explains that each IAM was run through 2300 because of the long atmospheric lifetime of CO2; 

using too short a time horizon could miss a significant fraction of damages under certain 

assumptions about the growth of marginal damages. 

Regarding the comment that readers may not understand how to interpret present values, EPA 

notes that the preamble impacts discussion (Section XI) clearly defines the benefit estimates and 

references the RIA, which provides a detailed explanation to enhance readers’ understanding. 

See section 8.7.2, comment 1, for additional discussion about the integrated assessment models 

(IAMs) used to estimate the SC-CO2; section 8.7.2, comment 2 for discussion about the climate 

science components of the IAMs; section 8.7.2, comment 3 for discussion about the use of a 

global SC-CO2 rather than a domestic SC-CO2; and section 8.7.2, comment 8 for discussion 

about the application of the SC-CO2 estimates to the Clean Power Plan RIA. 

See section V of the final rule preamble for discussion of costs of the emission guidelines and 

RIA Chapter 3 and RTC section 8.5 for discussion of the costs of the illustrative implementation 

scenarios analyzed by EPA. 

See section 8.6, comments 2 and 9, for discussion about distributional impacts. 

Comment 12: Commenter stated that IAMs do not recognize the possibility that we will adapt 

to climate change, or that a reduction in GHG emissions in the United States might result in an 

increase in GHG emissions elsewhere and it is not possible to accurately measure the 

contribution of a regulation to climate change in isolation because other emissions and change 

factors are not held constant.

 

29 Note that this refers to SC-CO2, i.e., the damages associated with an incremental change in 

emissions. The total benefits, i.e., the monetized value of all emission changes attributed to this 

rulemaking, are calculated based on emissions changes within the rulemaking time period, which 

in this case is through the year 2030. 
86 

Response 12: EPA disagrees with the comment that the IAMs used to estimate the SC-CO2 do 

not recognize the possibility of adaptation to climate change. The 2010 TSD clearly states that 

each of the three IAMs assumes a certain degree of low or no-cost adaptation (page 31) and the 

current TSD discusses updates to treatment of adaptation in one of the models (page 11).30 The 

2010 TSD, however, acknowledges that the treatment of adaptation in the three models is 

incomplete. EPA and other members of the IWG have reconfirmed their commitment to 

periodic review and update of the SC-CO2 methodology and estimates to ensure that they 

continue to reflect the best available science and economics. To help synthesize the technical 

information and input reflected in SC-CO2 comments, including those on treatment of adaptation 

in the IAMs, and to add additional rigor to the next update of the SC-CO2, the EPA and all of the 

other IWG members plan to seek independent expert advice on technical opportunities to 

improve the SC-CO2 estimates, including the approaches suggested by commenters and 

summarized in this document. Specifically, EPA and all of the other IWG members plan to ask 

the National Academies of Sciences, Engineering, and Medicine (Academies) to examine the 

technical merits and challenges of potential approaches to improving the SC-CO2 estimates in 

future updates. Input from the Academies, informed by the comments submitted to this 

rulemaking and the peer-reviewed literature, will help to ensure that the SC-CO2 estimates used 

by EPA continue to reflect the best available science and methodologies. 

8.8 HEALTH AND AIR QUALITY CO-BENEFITS 

Comment 1: General Health Co-Benefits 

Commenters in this summary discussed the health benefits purported by the rule by avoiding 

illnesses and death. 

Commenters stated support for the rule and the limits proposed for the reduction of carbon and 

other air pollutants emitted by power plants. The commenters said that the emissions reductions 

of toxic air pollutants will prevent risk of hospitalization and emergency room visits, reduce 

health risks, premature deaths, and avoid diseases and missing school/work days. 

Commenters stated that according to the American Lung Association, nearly half of Americans 

live in counties that have unhealthy levels of dirty air. The commenters said that dirty air caused 

by carbon pollution disproportionately affects low-income communities, children, seniors and 

those who work or play outdoors. The commenters added dirty air can also lead to hundreds of 

missed work and low activity days. 

 

30 See https://www.whitehouse.gov/omb/oira/social-cost-of-carbon for both TSDs. 
87 

Commenters stated that the proposed rule will reduce the pollution that leads to soot and smog 

(ground-level ozone) by more than 25%. The commenters said that pollution reductions in 2030 

are projected to avoid thousands of premature deaths, heart attacks and hospital admissions, up to 

150,000 asthma attacks in children, and almost 500,000 missed school and work days. 

Commenters stated that lifesaving benefits to public health can begin immediately, explaining 

that in addition to reducing the longer-term risks from climate change, steps to cut carbon 

pollution will cut other toxic emissions as well. Commenters offered estimated reductions that 

include: 54,000 to 56,000 tons of PM2.5; 424,000 to 471,000 tons of sulfur dioxide; and 407,000 

to 428,000 tons of nitrogen dioxide. Those pollutants directly form particulate matter and ozone 

that cause widespread harm and premature death as described earlier. Commenters stated that 

based on those reductions, EPA estimated that implementing the Clean Power Plan could avoid 

2,700 to 6,600 premature deaths in 2030. In 2030, children would suffer 140,000 to 150,000 

fewer asthma attacks. People with cardiovascular disease would have 340 to 3,300 fewer heart 

attacks, and hospital admissions for cardiovascular and respiratory conditions would drop, with 

2,700 to 2,800 fewer admissions in 2030. Commenters noted that it is important to recognize that 

the modeling actually minimizes the real-world benefits of these reductions, explaining that the 

EPA's use of established BenMAP modeling is appropriate to make these estimates, but the 

predictions focus on findings from certain studies looking at specific outcomes. Commenters 

noted that the BenMAP model cannot estimate the impact on other, also demonstrated, benefits; 

for example, although the World Health Organization has determined that particulate matter 

causes lung cancer, science currently lacks appropriate modeling to estimate how many fewer 

cases of lung cancer would occur in 2030 with the reductions in particulate matter. 

Commenters stated that combustion from fossil fuels, particularly from coal, emits numerous air 

pollutants into the atmosphere that have serious ramifications for public health and well-being, 

including SO2 and NOx. The commenters said that coal plants are the leading source of SO2 and 

NOx emissions in the United States, with an average controlled unit emitting between 7,000 and 

3,000 tons per year, respectively; while if uncontrolled, the unit can emit an average of 14,000 

and 10,000 tons per year, respectively. The commenters also said that once emitted into the 

atmosphere, SO2 forms PM2.5, or soot, which can cause asthma attacks, chronic obstructive 

pulmonary disease (COPD), stunted lung development, lung cancer, stroke, heart attack, and 

congestive heart failure. The commenters said that fossil plants also emit PM2.5 and PM2.5 

precursors directly into the atmosphere, and while control technologies exist to limit these 

emissions, substantial emissions still result from the operation of well-controlled units. The 

commenters said that NOx compounds interact with volatile organic compounds (VOCs) in the 

presence of sunlight to form ground-level ozone, a highly toxic and reactive pollutant and that at 

times ozone can also interact with other atmospheric matter to form a smoky fog of deadly 

pollutants known as smog. 

Commenters stated that until the U.S. can get a handle on the dirty air, exacerbated by the 

climate change caused by carbon pollution, we will continue to see thousands of premature 

deaths, respiratory disease, and a higher risk of asthma attacks. 

Commenters stated that the benefits of reducing carbon emissions will not only be to ameliorate 

climate change but also to improve public health as we clean up our air and water. 
88 

Commenters cited statistics by American Lung Association that 47% of Americans "live where 

pollution levels are too often dangerous to breathe" and that ozone was much worse in 2010 and 

2012 due potentially to warmer temperatures. The commenters said the proposed rule is a critical 

piece in reducing dangerous pollution levels. 

Commenters similarly stated that standards limiting carbon dioxide (CO2) emissions from 

existing power plants can also decrease emissions of non-carbon pollutants (co-pollutants) from 

the electric utility sector such as sulfur dioxide (SO2), nitrogen oxides (NOx), and directly 

emitted particulate matter (PM). The commenters said that as a result, the standards can 

contribute to improved air quality, public health co-benefits, and environmental improvements. 

Commenters stated that fine particles and ground-level ozone are serious health pollutants. The 

commenters provided a list of respiratory diseases as a result of breathing ground-level ozone. 

Commenters stated that the projected electric power price increase of 6-7% by the proposal is a 

paltry price to pay, especially when considering the existential threat from GHG. The 

commenters added that the health co-benefits are larger than the costs. 

Commenters stated concerns with regard to higher temperatures and harmful air pollution in 

public health. The commenters said that we need to have a strong CPP in place to cut carbon 

pollution and lessen the burdens on the health of millions of Americans. The commenters urged 

EPA to adopt standards that will ensure we do as much as we can to fight these threats and 

protect public health. 

Commenters stated that by cleaning up and modernizing power plants we will begin to clean up 

our air and curb climate disruption. The commenters said that by reducing carbon pollution from 

power plants we will save billions of dollars each year. 

Commenters stated that re-dispatching from less efficient EGUs (presumably older) to more 

efficient EGUs (presumably newer) would also result in less emissions of other pollutants, as the 

newer units are likely to have greater and more effective pollution controls. The commenters 

added that any reduction in the use of coal-fired EGUs or improvement in the efficiency of coalfired EGUs has significant and quantifiable impacts on environmental and public health. 

Commenters stated that based on EPA's estimates the proposed rule will have a real and 

measureable positive impact on air quality and public health across the nation. The commenters 

further stated that if EPA strengthens the state targets, the health benefits, in terms of the number 

of lives saved and asthma attacks avoided, will increase markedly. 

Commenters stated that EPA's proposed limits on carbon pollution from power plants will lead 

to significant health benefits, including "prevent up to 4,000 premature deaths and 100,000 

asthma attacks in the first year they are in place, and prevent up to 6,600 premature deaths and 

150,000 asthma attacks in 2030" as stated by Harold Wimmer, National President and CEO of 

the American Lung Association. Commenters said that when some of the big polluters try to 

persuade EPA to weaken the standards so they can continue to profit while putting the health of 

all Missourians at risk, they hope EPA will stand strong and require them do their part to make 

our state a safer place to live and breathe. 
89 

Commenters stated that the financial benefits of this rule are undeniable. The commenters said 

that climate and health benefits are estimated to be $55 billion to $93 billion by 2030 and that 

these monetary benefits outweigh annual costs of the plan, which are estimated to be $7.3 billion 

to $8.8 billion in 2030. The commenters said that the rule is also expected to reduce electricity 

costs, and that by 2030 electricity bills are expected to be roughly 8% lower than would be the 

case under "business as usual," and this will save Americans about $8.00 on an average monthly 

residential electricity bill. 

Commenters stated that based on soot and smog reductions alone (25% by 2030 as projected by 

EPA), for every dollar invested to comply with the proposed regulations, American families will 

see up to $7 in health benefits. 

Commenters stated that reducing carbon pollution will result in less illness and less days lost at 

work and school, less disability, fewer deaths, reduced hospitalizations, and other related 

healthcare costs which all equate to a savings to our economy of over $1.3 trillion or 9.6% of 

GDP. 

Commenters urged the states and national leaders to respond positively to the proposed carbon 

rules with investments in greater energy efficiency to move to a carbon free and toxin free 

energy development program. The commenters said that we need to move swiftly to approve this 

Clean Power Plan, to slow down our carbon pollution and to make sure dirty energy does not 

cause physical harm to more generations of Americans. 

Commenters stated that they would like to see the EPA demonstrate how each of their proposed 

methods for carbon reduction in the Clean Power Plan protects human health. The commenters 

said the Clean Power Plan does not address all these environmental impacts to human health and 

externalities of the whole fuel-cycle as the basis for decision-making, and as such, it is assumed 

that human costs are acceptable even though alternatives exist that will not expose people to 

harm. 

Commenters stated combusting fossil fuels -- particularly coal -- not only drives global climate 

change, but also emits numerous air pollutants into the atmosphere that have serious 

ramifications for public health and well-being. The commenters said that as components of the 

overall PM2.5 mix, emissions of fine nitrate and sulfate particles cause significant pulmonary and 

cardiovascular ailments and lead to increased rates of missed work, hospitalization, and 

premature death. The commenters added that coal-fired EGUs are responsible for more than half 

of the human-made emissions of mercury. The commenters also said that coal-fired plants that 

are not properly controlled can emit significant quantities of other hazardous air pollutants, 

including toxic heavy metals such as lead and cadmium, carbon monoxide, volatile organic 

compounds, and arsenic. The commenters said that pollution from coal plants causes tens of 

thousands of premature deaths, emergency room visits, and heart attacks each year, and hundreds 

of thousands of asthma attacks, which amounts to over $100 billion in annual health care costs. 

The commenters said that EPA has issued regulations to reduce these emissions, but until we 

transition to genuinely clean energy, the lives and health of countless Americans remain at risk. 

Commenters also stated that Alpine Geophysics, LLC and ENVIRON International Corporation 

analyzed ambient air quality data on regional and state geographic scales. The commenters said 
90 

that the report, which tracked the trends of PM2.5 and ozone emissions, found that emissions have 

significantly decreased and air quality is significantly improved as a result of recently adopted 

regulations, and is expected to continue to improve as existing regulations are fully implemented 

in the upcoming years. 

Commenters said that other recent proposed and final federal rule-makings will act in concert 

with the proposed rule to reduce air pollution, and provided examples of other recent EPA rules 

that will improve air quality. The commenters requested that EPA finalize health standards for 

ozone at 60 parts per billion in its 2015 NAAQS review and draft a future transport rule to 

address the 2011 PM2.5 NAAQS and 2008 ozone NAAQS. 

Commenters stated that EE and RE have multi-pollutant benefits, and as EE and RE programs 

reduce demand for fossil fuel-fired generation, states can achieve emissions reductions of GHGs, 

criteria air pollutants and hazardous air pollutants. The commenters said that this is particularly 

true on high energy demand days, which often coincide with poor air quality. 

Response 1: The EPA agrees that poor air quality results in negative health effects and that 

reducing levels of fine particles and ozone will lead to significant human health benefits. EPA 

estimates the benefits of reductions in of SO2, NOx, and fine particles using methods based on 

the best available peer-reviewed science that have been reviewed by the EPA’s independent 

Science Advisory Board and the National Academy of Sciences (NRC, 2002). These benefits 

estimates indicate that the Clean Power Plan will result in substantial health benefits beyond 

those expected to result from other EPA regulations. 

National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air 

Pollution Regulations. Washington, DC: The National Academies Press. Washington, DC. 

Comment 2: Including Co-Benefits 

Commenters in this summary raised issues related to assumptions and methods used for the 

determination of health benefits associated with the rule.

Commenters argued against the comments that state that EPA's consideration of indirect and 

qualitative benefits from the rule is inappropriate. The commenters stated that EPA's treatment 

of these co-benefits and qualitative benefits is well-justified based upon agency practice and 

Office of Management and Budget (OMB) guidance stretching back decades. The commenters 

said that if anything, EPA should give even more consideration to qualitative benefits in its final 

rule and regulatory impact analysis. 

Commenters stated that EPA's cost-benefit analysis for this proposed regulation is troublesome. 

The commenters said that EPA continues to justify a regulation with benefits that are derived not 

from the pollutant that EPA cites as the justification for promulgating the regulation (carbon 

dioxide), but from pollutants incidentally reduced by the primary regulatory requirements (ozone 

and particulate matter). 
91 

Commenters also argued that the new rule is promulgated to solve many problems such as fine 

particles pollution. The commenters said that according to EPA, PM2.5 levels have decreased 

nationally by 34% since 2000, and raised the question of why additional regulations on this 

pollutant are necessary. 

Commenters stated that including co-benefits obscures the impact of the rule on the targeted 

pollutant (CO2) and hinders both the public's ability to understand the agency's policies and to 

hold the agency accountable for those policies. The commenters said this also hinders EPA's own 

ability to improve the analysis underlying its regulatory initiatives. 

Commenters stated that EPA's justification for double-regulation with regard to criteria 

pollutants is not sufficient because the agency is also working on tightening standards on current 

rules, so therefore, they are not static like this proposed rule implies. The commenters said that 

EPA fails to explain whether further emissions reductions are desirable or feasible and that EPA 

should justify the proposed rule based on climate benefits alone. 

Commenters stated that EPA has improperly included co-benefits from reductions of pollutants 

other than CO2 (e.g. fine particulates, ozone, sulfur dioxide and nitrogen oxides) that are 

regulated to levels protective of public health under other regulations. Commenters said that 

EPA's estimate of as much as $62 billion in 2030 in "air pollution" co-benefits is irrelevant, 

inappropriate, and should not be included. 

Commenters stated, "The EPA should not be claiming co-benefits from reductions in other 

pollutants such as sulfur dioxide (SO2) and nitrogen oxides (NOx) from the proposed rule." "Not 

only are criteria pollutants not the purpose of the proposed rule, the EPA’s claimed co-benefits 

from the proposed rule are likely overestimated." "It is in appropriate for the EPA to claim a 

benefit from reducing a criteria pollutant in a nonattainment area for this proposed rule when that 

reduction is already required to occur under separate CAA obligations regardless of whether the 

EPA adopts the proposed carbon pollution emission guidelines for existing power plants." 

Commenters stated that EPA’s reliance on co-benefits from simultaneous reductions in 

pollutants other than GHGs is misplaced and must be revised to more appropriately reflect the 

health benefits that would actually be attributable to this proposed rule. 

Commenters stated that including criteria pollutants, SOx, NOx and particulate matter (PM), 

already regulated by a variety of regulations, double counts those benefits attributed to CPP. The 

commenters added that if the existing regulations are effective at protecting human health to the 

standards established by the EPA, then it is not clear that further reductions would provide 

additional health benefits. The commenters added that in the case that the existing regulations are 

not sufficient to protect human health, then, there may be a case for the EPA to consider costeffective measures that will further reduce the pollutants without the need for measures targeting 

reductions in carbon dioxide. The commenters stated that the inclusion of "co-benefits" in the 

RIA results in massive overestimation of the benefits of the CPP. The commenters said that if 

co-benefits are removed, it is most unlikely that the benefits of the CPP would exceed the costs. 

Commenters stated that the inclusion of co-benefits exposes two structural deficiencies in the 

RIA: 1) inclusion of global benefits compared to domestic costs, and 2) the use of different time 
92 

horizons for estimated costs and for estimated benefits. The commenters said that both are 

conflicting with OMB direction, and further distort the cost and benefit calculations in the RIA. 

Commenters said that nearly 40% of EPA's assumed benefits are international carbon benefits, 

and 60% are health co-benefits from reductions of other emissions, not CO2. The commenters 

added that over 90% of these assumed global carbon benefits accrue outside the U.S., while the 

costs are borne only in the U.S. The commenters said that these perceived co-benefits are not 

related to carbon dioxide removal, and their claimed value, reliable or not, result from other EPA 

rules that address those emissions directly. 

Commenters stated that EPA uses a cost/benefit analysis in justification of the rule that 

improperly calculates the rule's expected benefits and fails to account for the global nature of 

climate change. The commenters also stated that the cost/benefits analysis is flawed since on 

average 60% of the claimed monetary benefit used in EPA's cost/benefit analysis for this rule 

relies on non-GHG emissions-related health claims. The commenters said that it is 

unsupportable and bordering on disingenuous for EPA to make its claims for the health benefits 

of the 111(d) rule using this "double-counting" method. 

Commenters stated that EPA is double-counting benefits of the proposed rule because reducing 

particulates is governed by other regulations. The commenters stated that the technique skews 

the cost-benefits and imposes unnecessary costs which have impacts on human health due to 

higher electricity prices and economic constraints on the U.S. economy that have not been 

addressed and weighed against the speculative benefit conclusions presented by EPA. 

Commenters suggested that EPA should focus on calculating the benefits of reduced carbon 

emissions because the proposed rule regulates carbon and that the proposed rule should not be 

used as a catch all for a desired air quality scheme. The commenters remarked that there is no 

relationship between reduced carbon emissions and improved human health aside from the 

indirect effect on climate. The commenters added that experts at the Harvard School for Public 

Health have estimated that expensive environmental rules save 100 times fewer lives than when 

the federal government redeployed those assets to address higher risks and stated that EPA 

should not be so cavalier in its benefits analysis.

Commenters stated that EPA is mistaken in asserting that this rule would result in net benefits 

from avoided negative health effects. The commenters said that based on CDC data more people 

are dying each year, but stated that this is because of an increase in the population and people 

getting older. The commenters said that when the increase in the population size and age is 

factored into the death rate, the overall trend is that the death rate is declining. The commenters 

said that anthropogenic climate change does not seem have slowed the decline of the death rate, 

but may have actually increased the speed of the decline. 

Commenters argued EPA estimates that in order to achieve their building blocks, concurrent 

reductions in criteria pollutants will occur, but the rule contains no enforceable standards for 

criteria pollutants. Commenters stated if compliance with the rule does not need to follow EPA's 

building block approach, EPA cannot claim the concurrent reductions of an estimated path to a 

building block that they will not enforce. In other words, the rule claims a side-benefit that won't 

necessarily occur. 
93 

Commenters stated that EPA's reliance on co-benefits violated the CAA. The commenters said 

the majority of the alleged net benefits of the rule proposal are derived from co-benefits of 

reducing non-GHG pollutants, primarily PM2.5 and ozone. The commenters said this approach is 

flawed because: 1) there is no basis in CAA Section 111(d) to include the co-benefits of 

emissions reductions from pollutants not targeted by the rule, 2) any inclusion of co-benefits 

effectively double-counts the benefits of these reductions that are already regulated by other 

rules, 3) EPA is counting the benefits of these reductions in criteria pollutants in areas that have 

already achieved attainment with NAAQS and these areas are not shown to receive any 

additional benefits, and 4) calculation of the benefits uses a no-threshold linear-regression-tozero model design, which counts the benefits of even the smallest reduction in PM2.5. The 

commenters said this contradicts all standard procedures for health analysis, by not establishing a 

threshold-cut off to determine benefits of reductions. 

Commenters stated that emission trading mechanisms such as the Regional Greenhouse Gas 

Initiative (RGGI) have proven very successful at cost-effectively reducing carbon dioxide 

emissions and simultaneously generating funds can be used to promote renewable energy and 

energy efficiency. Commenters stated that, however, to the extent they allow coal-fired power 

plants to continue operating at full capacity and purchase emissions credits, such trading 

programs ignore the co-benefits that occur when a power plant actually reduces its carbon 

dioxide emissions. Commenters stated that these co-benefits include reductions in emissions of 

heavy metals and smog-creating air pollution. Commenters stated that the EPA should be 

cognizant of the problem and strive to generate a rule that not only addresses climate change but 

also ensures that communities near power plants actually breathe cleaner air. 

Commenters stated that efforts for carbon emissions reductions also cut emissions of nitrogen 

oxide, sulfur dioxide and mercury, which affect public health. 

Commenters stated that the rule will have the substantial co-benefit of bringing about significant 

additional reductions in other air pollutants that are subject to NAAQS. The commenters said 

there will be significant reductions in sulfur dioxide, nitrogen oxides, and fine particulate matter 

(PM2.5) pollution, and that mercury emissions will probably also be reduced. The commenters 

said that overall it is expected there will be a 25% reduction in soot and smog (ozone) pollution. 

Commenters stated that private sector-delivered energy efficiency projects produce significant 

non-GHG air quality benefits by reducing the level of needed electric generation and, therefore, 

the associated emissions of criteria pollutants. The commenters said EPA has identified energy 

efficiency as an eligible tool to be used in SIPs to comply with NAAQS. The commenters said 

that as NAAQS are tightened in future years, and more areas are placed in nonattainment, the cobenefit of reducing criteria pollutants through energy efficiency will be highly valued. The 

commenters added that whether projects are pursued for cost savings, GHG reductions, or energy 

savings, the benefits of reducing criteria pollutants are always present. 

Commenters stated that the benefits identified by EPA are derived from the reductions of criteria 

pollutants and not CO2 reductions, and that depending on the discount rate that is applied, these 

co-benefits can be as much as an order of magnitude greater than the benefits associated with 

reducing CO2 emissions alone. The commenters said that it is arbitrary, capricious, and 

unreasonable for EPA to justify the rule based on ancillary or unintended benefits. The 
94 

commenters said that if EPA seeks to regulate a pollutant under Section 111, it must demonstrate 

that health and environmental benefits from reducing emissions of that pollutant will be costeffective. The commenters also added that EPA's reliance on co-benefits from reducing 

emissions of criteria pollutants is particularly problematic because EPA is barred from directly 

regulating criteria pollutants under Section 111(d). The commenters said that EPA's approach 

here would allow it to indirectly regulate criteria pollutants from a source category by finding a 

surrogate air pollutant that can be regulated under Section 111(d), and added that if EPA moves 

forward with this rule, it must justify it solely on the domestic benefits of reducing CO2

emissions, a standard that EPA is unlikely to meet.

Commenters stated that EPA inappropriately relies on the benefits of reductions in criteria 

pollutant levels for economic justification of the proposed rule. The commenters said that in 

evaluating the economic benefits of the proposed rule, EPA not only quantified the climate 

benefits from reduced emissions of CO2 but also added in the health co-benefits from reduced 

exposure to fine particulate matter (PM2.5) and ozone. The commenters said that between 45-

69% of all of the benefits said to be related to this proposal are in the form of co-benefits related 

to health-based standards. 

Commenters argued EPA's statement with regard to "the net climate and health benefits of $48 

billion to $82 billion" of the rule, stating that in order for EPA to assert that this rule will result in 

America expanding its economy by billions of dollars, the benefits must be real, must be 

attributable to the requirements of this rule only, and must be enforceable. The commenters said 

that since the vast majority of EPA's calculated "benefit" is based on estimated health benefits 

from other rules such as CSAPR, it urges the EPA to assign true co-benefit from the rule for an 

appropriate evaluation of the regulatory benefit. The commenters said that not only should EPA 

refrain from double-counting co-benefits, the health benefit can only be attributed to a rule that 

will enforce the claimed criteria pollutant reductions. 

Commenters stated that EPA has provided no legal basis for relying on "health co-benefits" and 

that EPA has provided little quantitative evidence to support these values. Commenters stated 

that NAAQS should be properly set to achieve and maintain public health so there should not be 

a substantial number of avoidable deaths and illnesses attributable to the proposed rule. The 

commenters further stated that the exorbitant costs of the proposal and unproven benefits 

mandate withdrawal of the proposed rule. 

Commenters stated that the majority of the alleged net benefits of the rule proposal are derived 

from co-benefits of reducing non-GHG pollutants, primarily PM2.5 and ozone. The commenters 

stated that is flawed and provided arguments for this as follows. The commenters said that there 

is no basis in CAA Section 111(d) to include the co-benefits of emissions reductions from 

pollutants not targeted by the rule. The commenters said that there is certainly no endangerment 

finding related to these co-benefit pollutants and that the listed NAAQS criteria pollutants are 

specifically excluded from Section 111(d) rulemaking; therefore, these pollutants have no basis 

to be considered in the cost-benefit analysis in this rulemaking. The commenters also stated that 

any inclusion of co-benefits effectively double-counts the benefits of these reductions. The 

commenters said that co-benefits from the reduction of ozone, and particularly PM2.5, are 

already counted in numerous other rules. The commenters also stated that EPA is counting the 

benefits of these reductions in criteria pollutants in areas that have already achieved attainment 
95 

with the relevant NAAQS; therefore, these areas are not shown to, statutorily, receive any 

additional benefit from reductions in those attainment areas. 

Commenters stated that attempting to overhaul the entire electricity market to address the same 

acute health impacts already more thoroughly regulated as criteria pollutants is the wrong 

approach. The commenters said that by justifying this rule based almost entirely on secondary 

criteria pollutant reductions of pollutants already regulated, U.S. EPA has overstepped logical 

regulatory authority. U.S. EPA cannot ride the coat tails of reductions applicable under other 

Clean Air Act (CAA) programs as justification for a proposal to reduce CO2 emissions. 

Response 2: The EPA agrees with the commenters that it is appropriate to evaluate all of the 

direct and indirect benefits of the proposed rule, including the air quality co-benefits resulting 

from anticipated reductions in SO2, NOx, and fine particle emissions. The EPA disagrees that it 

is double-counting the benefits of this proposal. All of the estimated health benefits are 

attributable to the emissions reductions associated with this rule. The estimated health benefits 

are incremental to a baseline that includes existing regulations. Consistent with OMB (OMB, 

2003) and EPA guidance (U.S. EPA, 2010a) the EPA estimates all of the anticipated costs and 

benefits associated with a regulatory action, to the extent feasible, for the purpose of determining 

the likely impacts, not to justify an action. Accounting for ancillary benefits is standard practice 

in benefit-cost analysis, regardless of the rule’s intended purpose. The EPA disagrees with the 

commenters that PM2.5 health co-benefits should be excluded in estimating the health benefits 

anticipated by this proposal. As a direct result of the actions needed to meet the CO2 

requirements of the proposed rule, the proposed rule is expected to achieve substantial PM2.5 

health benefits resulting from primary PM and SO2 emissions reductions, and these co-benefits 

are an important and real benefit to quantify. 

Considering ancillary benefits in benefit-cost analysis is directed by OMB Circular A-4 (OMB 

2003, p. 26) -- "Your analysis should look beyond the direct benefits and direct costs of your 

rulemaking and consider any important ancillary benefits and countervailing risks. An ancillary 

benefit is a favorable impact of the rule that is typically unrelated or secondary to the statutory 

purpose of the rulemaking (e.g., reduced refinery emissions due to more stringent fuel economy 

standards for light trucks) while a countervailing risk is an adverse economic, health, safety, or 

environmental consequence that occurs due to a rule and is not already accounted for in the 

direct cost of the rule (e.g., adverse safety impacts from more stringent fuel-economy standards 

for light trucks)." Considering ancillary benefits is also directed by the EPA’s Guidelines for 

Preparation of Economic Analyses (U.S. EPA, 2010ap. 11-2) -- "An economic analysis of 

regulatory or policy options should present all identifiable costs and benefits that are incremental 

to the regulation or policy under consideration. These should include directly intended effects 

and associated costs, as well as ancillary (or co-) benefits and costs." 

EPA also disagrees with the commenters that it is inappropriate to use a log-linear no-threshold 

model in calculating the benefits of PM2.5 reductions. The most recent review of the PM.25 

scientific literature contained in the peer-reviewed Integrated Science Assessment for PM2.5 

(U.S. EPA, 2009) concluded that "Overall, the studies evaluated further support the use of a nothreshold log-linear model." 
96 

In addition, the EPA disagrees with the commenters that the benefits of the proposed rule do not 

exceed the costs. The benefits of this proposed rule include the benefits of CO2 reductions and 

the co-benefits to human health achieved by PM2.5 and ozone precursor emissions reductions. As 

the analyses presented in the RIA indicate for the illustrative implementation scenarios analyzed, 

the benefits outweigh the costs by a large margin. We further note that we were unable to 

monetize other important benefits, including additional health benefits of reductions in ozone 

and PM2.5, direct health benefits associated with reducing NOx and SO2 emissions, and benefits 

of reducing mercury emissions. If we were able to fully monetize these benefits, the benefits 

would exceed the costs by an even greater margin. 

Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. 

Washington, DC. Available on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a4.html. 

U.S. Environmental Protection Agency (U.S. EPA). 2010a. Guidelines for Preparing Economic 

Analyses. EPA 240-R-10-001. National Center for Environmental Economics, Office of Policy 

Economics and Innovation. Washington, DC. December. Available on the Internet at 

http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0568-50.pdf/$file/EE-0568- 50.pdf. 

Comment 3: Relation to NAAQS and Effects at Low Concentrations 

Commenters in this summary discussed the overlap between the benefits attributed to the 

proposed rule and the pollutant reductions related to NAAQS. 

Commenters stated that nearly all of the health benefits that EPA claims are from reductions in 

ozone and particulate matter emissions, which are already a result of regulations under NAAQS 

and other recent stringent regulatory actions. The commenters said that further reducing carbon 

dioxide emissions does not prevent asthma or reduce incidents of heart attacks, but these are the 

health benefits pedaled to the public. 

Commenters stated "Section 111(d) excludes regulation of NAAQS pollutants like PM2.5 and 

ozone." "Although the proposed rule does not purport to regulate PM2.5 and ozone directly, a 

significant majority of projected benefits of the proposed rule come from reducing those 

NAAQS pollutants." "Counting PM2.5 and ozone reductions as benefits of the rule violates the 

statutory prohibition on regulating NAAQS pollutants through Section 111(d)." 

The commenters said that currently historically low levels of ozone are not a significant concern 

for human health, and future levels will be even lower. The commenters said that EPA uses 

selective characterization of evidence. The commenters added that laboratory studies with human 

volunteers indicate that an 8-hour ozone standard of 85 ppb is protective of human health with 

room to spare. 

Commenters stated that EPA counts the benefits associated with reductions in criteria pollutants 

in locations that attain the NAAQS, when EPA has not shown that the emissions reductions that 

will flow from this rule are necessary to achieve any NAAQS. 
97 

Commenters stated that in addition to counting benefits from PM2.5 and ozone reductions already 

mandated by the relevant NAAQS, the proposed rule counts benefits of reducing emissions of 

these pollutants even below the level required by the NAAQS. The commenters said that 

specifically, the RIA asserts that its benefits "estimates include health co-benefits from reducing 

fine particles in areas that are in attainment with the PM2.5 NAAQS, down to the lowest modeled 

concentrations." The commenters said that including these benefits is contrary to the NAAQS 

regulations' premise that these "benefits" are inconsequential. 

Commenters stated that it is improper for the proposed rule to count PM2.5 and ozone reductions 

below the NAAQS as benefits, because the NAAQS represent the level of pollution control EPA 

deems "requisite to protect the public health" with "an adequate margin of safety." 

Commenters cited a statement by a former Chairman of the Texas Commission on 

Environmental Quality which stated that "If reducing particulate matter had the enormous 

benefits that EPA's analysis claims, it has a legal responsibility to lower the national ambient 

standard to a level that is actually protective of human health. The fact that it has not done so 

suggests that the EPA does not really believe its own numbers. The EPA set the new NAAQS for 

annual PM2.5 at 12 ug/m3

, an ambient level still far above the lowest measured levels (LMLs) that 

the EPA used to identify risk of death in cost-benefit analyses... This...gives a misleading picture 

of the relative costs and benefits of EPA regulations". Kathleen Hartnett White & Josiah Neeley, 

WHO REGULATES THE REGULATOR?: COST-EFFECTIVENESS ANALYSIS IN TEXAS 

STATE AGENCY RULEMAKING, 14 Tex. Tech. Admin. L.J. 401, 412 (2013). 

Commenters added that to avoid the implication that the proposed rule is claiming benefits from 

reducing emissions of pollutants below the levels at which they have a significant effect on 

human health, the RIA improperly jettisons the assumptions and models on which EPA relied in 

setting the NAAQS. The commenters said the RIA explicitly "assume[s] that the health impact 

function for fine particles is log-linear without a threshold in this analysis." The commenters said 

that this assumption violates the best available science on which EPA relied when it updated the 

PM2.5 NAAQS in 2013. The commenters said that in that rulemaking, the agency selected a 

threshold of 12.0 ug/m3 because "it was somewhat below the lowest long-term mean 

concentration shown by certain key epidemiologic studies to cause adverse health effects." Nat'l 

Ass'n of Mfrs. v. EPA, 750 F.3d 921, 924 (D.C. Cir. 2014). The commenters said that by 

counting PM2.5 reductions in areas that are already in attainment with the NAAQS, "down to the 

lowest modeled concentrations," the proposed rule assigns mortality-avoidance benefits to 

reducing PM2.5 below the level at which that pollutant has a measurable effect on mortality. 

Commenters stated that the proposed rule contradicts the 2013 PM2.5 NAAQS rule's 

determination that "an annual standard level of 12 ug/m3 would be requisite to protect the public 

health with an adequate margin of safety from effects associated with long- and short-term PM2.5 

exposures," because that level is "somewhat below the lowest long-term mean concentration in 

the full set of studies considered." The commenters said that in the PM2.5 NAAQS rule, EPA 

explicitly considered and rejected proposals to mandate lower levels of PM2.5, because such a 

standard is not necessary to adequately protect human health. The commenters said that the 

proposed rule ignores these conclusions and treats all emissions reductions alike, whether or not 

they occur below the NAAQS level. 
98 

Commenters stated that EPA provides no adequate explanation for its decision to count PM2.5 

mortality benefits all the way down to the lowest measured level (LML). The commenters added 

that decision contradicts the PM2.5 NAAQS rule's conclusion that the limited evidence of PM2.5's 

contribution to adverse health effects at low concentrations "does not justify" a more stringent 

standard. 

Commenters proposed several reasons why the co-benefit estimates are overstated and should 

also not be included in the RIA. First, the commenters stated that many of the estimated benefits 

are associated with PM2.5 and ozone reductions that are already at levels below the Federal health 

standards for those pollutants that are set at a level that protects the public health with an 

adequate margin of safety. The commenters discussed the review process used to set and accept 

confident and protective NAAQS standards by EPA and the District Court, and the uncertainties 

associated with levels below the set standard. Therefore, the commenters stated that the RIA is 

only able to generate large co-benefits estimates by assuming that EPA has full confidence in the 

existence of the health effects associations all the way to zero ambient concentrations, but 

benefits may be de minimis. The commenters noted that these reductions may be enforced 

without the proposed rule by implementation of other regulations, and these benefits have 

nothing to do with climate change. 

Commenters recommended counting only exposure above the scientifically established National 

Ambient Air Quality Standard when calculating reduced premature deaths, which drops the 

health benefits from $62 billion to $3 billion. The commenters said that the rationale for this is 

that the scientifically established National Ambient Air Quality Standards are set to a level that 

will not cause harm in even sensitive groups, such as asthmatics. The commenters also said that 

$59 billion of the $62 billion, or 95%, in estimated annualized health cost savings is based on the 

misguided assumption that exposure to fine particle pollution (PM2.5) levels below the Air 

Quality Standard is harmful. 

Commenters stated that the EPA estimated health co-benefits are based almost entirely (greater 

than 98%) on premature deaths avoided by reducing PM2.5 emissions. The commenters said that 

since the average PM2.5 levels in the US are 25% below the National Ambient Air Quality 

Standard (NAAQS), there should be no premature deaths avoided due to reduced ambient levels 

of PM2.5. The commenters also said that they believe the ESPS costs ($8.8 billion annually in 

2030) will likely greatly exceed the monetized benefits (between $27 billion to $62 billion 

annually) as estimated by EPA. 

Commenters stated that EPA does not reflect the increasing uncertainty in claiming mortality 

benefits from reductions in PM2.5 at lower ambient concentrations, where much of EPA's claimed 

mortality benefits occur. The commenters said that OMB Circular A-4 requires a quantitative 

analysis of uncertainty for rules as costly as the proposed ESPS regulation and that in the RIA, 

EPA adds the highly uncertain mortality benefits calculated by applying the concentrationresponse functions (CRFs) at lower ambient concentrations to the less uncertain benefits 

calculated by applying the same CRFs at higher levels. The commenters expressed concerns in 

applying the selected CRFs at "lower levels" in either of two ways: 1) At levels lower than the 

primary NAAQS for PM2.5, which presumably establishes an ambient concentration below which 

exposures are "safe;" and 2) At levels lower than most of those considered in the epidemiology 

studies underlying the CRFs; at these lower levels the CRFs estimated in the studies become 
99 

highly uncertain. The commenters said EPA has not estimated in this RIA the fraction of PM2.5 

mortalities avoided due to the proposed rule that will occur among individuals exposed at less 

than the current NAAQS, but assumed that this fraction is high. The commenters added that one 

would think that EPA would somehow reflect in the benefits analysis the uncertainty of benefits 

estimates at lower ambient concentrations if 65-95% of EPA's total calculated benefits accrue to 

individuals who are exposed at levels deemed to be "safe". 

Commenters stated that there is another sort of uncertainty when EPA calculates mortality 

benefits at ambient PM2.5 concentrations approaching the lower extreme of the concentrations 

analyzed in the epidemiological studies from which EPA selected the CRFs. The commenters 

said the statistical uncertainty of a slope relationship (e.g., a CRF) estimated from a scatter of 

data points will typically widen substantially as one moves toward the extremes of the 

underlying data. The commenters said that uncertainty about the magnitude of the CRFs 

estimated in the two selected studies increases as one approaches the lowest measured levels 

(LMLs) of ambient average PM2.5 concentrations that prevailed in the cities comprising the 

datasets analyzed in the two studies. The commenters said the confidence interval may even 

widen sufficiently so that the estimated CRF is not statistically significantly different from zero 

at or near the LML, even though the average slope over the full range of the underlying data is 

statistically significant. The commenters added that the agency does nothing in any quantitative 

way in the benefits analysis in the ESPS RIA to reflect this increasing uncertainty at lower 

concentration levels. 

Commenters added that EPA calculated that 89% of the U.S. population modeled in the ESPS 

RIA is exposed at PM2.5 concentrations below 1 standard deviation below the mean air quality in 

the Krewski et al (ACS) data set. The commenters said that based on Lepeule et al (2012), they 

estimated that 93% of the population considered in the ESPS RIA is exposed at levels below 1 

standard deviation below the mean for this extended cohort. The commenters added that based 

on this their conclusion is nearly identical for both of the two epidemiological studies that EPA 

chooses to provide the lower and upper benefits estimates for avoided PM2.5 mortality, and added 

that the vast majority (89-93%) of PM2.5 exposures that will be affected by the proposed ESPS 

regulation occur at concentrations below the levels at which EPA has "appreciably less 

confidence in the associations observed in the epidemiological studies." The commenters added 

that neither the Krewski et al (2006) nor Lepeule et al (2012) studies can be used confidently to 

assess risks at PM2.5 concentrations of less than about 12 ug/m3, and virtually all of the air quality 

improvements projected as resulting from the proposed ESPS regulation will occur at these 

lower concentrations. The commenters said EPA should acknowledge in the RIA this large 

source of uncertainty, and should consider alternative risk assessment approaches that might 

yield more confident risk estimates at the lower ambient concentrations that are at issue for this 

regulation. 

Commenters presented concerns with EPA's assumptions on causal relationship and the use of 

the no-threshold linear model between PM2.5 and mortality rates, and stated that the literature

demonstrates these are inaccurate. The commenters said that the linear no-threshold model is 

faulty and unreliable, and presents the hormesis model as an alternative. The commenters said 

that hormesis model is superior as a representation of these toxicological concentration-response 

functions, and that recent research demonstrates that an observable hormetic dose-response 
100 

relationship exists specifically between fine particulate matter (PM2.5) and mortality 

(http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1299203/). 

Commenters stated that the benefits due to reductions in pollutants other than CO2 are 

independently regulated under the NAAQS program and cannot be attributed to or doublecounted by the proposed rule. The commenters further stated that the NAAQS reflects a level of 

air pollution deemed by EPA to protect public health and welfare. Commenters noted that the 

Clean Air Scientific Advisory Committee and EPA "(a) has yet to identify a discernible PM2.5 

threshold and (b) indicates significant increases in uncertainty of the dose-response at lower 

concentrations". 

Commenters stated that the EPA estimated health co-benefits are based almost entirely (97% 

plus) on premature deaths avoided by reducing PM2.5 emissions, but since the average PM2.5 

levels in the U.S. are 25% below the National Ambient Air Quality Standard (NAAQS), there 

should be no premature deaths avoided due to reduced ambient levels PM2.5. The commenters 

stated that while EPA estimates that the CPP will cost $8.8 billion annually in 2030, the 

monetized benefits in 2030 are estimated to be between $27 billion to $62 billion annually. 

Commenters added that it is disingenuous for EPA attribute public health benefits to reducing 

concentrations of these pollutants below levels for which EPA recently determined the 

uncertainty of health risks were too great to warrant regulation, especially when these highly 

uncertain benefits are used to justify a rule targeting a different pollutant altogether. Commenters 

stated that EPA should either address any issues with NAAQS not sufficiently protecting public 

health through NAAQS, not through the back door via CO2 regulations. 

Commenters stated that most of the health co-benefits are attributable to exposures to pollutants 

at levels below those EPA has found protective of public health, and even those fictional benefits 

are largely due to emissions reductions that will occur even in the absence of the proposed 

guidelines. 

Commenters cited comments by EPRI, which stated that EPA essentially double counts benefits 

of pollution reductions resulting from the rule. The commenters added that EPRI points out that 

EPA's own data in the RIA demonstrates that approximately 95% of the U.S. population 

experiences fine particulate matter levels that are already at or below the National Ambient Air 

Quality Standard of 12 ug/m3 before implementation of the proposed rule. However, commenters 

added, these same populations are included in EPA's benefits calculations for the proposed rule. 

The commenters said that it is not appropriate for health benefits to accrue at levels of particulate 

matter that are already deemed to be protective of human health. 

Commenters stated that EPA improperly attributes public health benefits to the proposed rule in 

two main ways: 1) by crediting the proposed rule with public health benefits from reductions in 

PM2.5 and ozone (O3) already mandated by existing regulatory programs, including NAAQS; and 

2) by attributing public health benefits to the rule that stem from reductions in concentrations of 

PM2.5 and O3 below what is already required under the NAAQS. The commenters said that EPA 

already set the NAAQS at levels that the agency determined are protective of public health, and 

which incorporate an adequate margin of safety. The commenters said that the agency cannot 

fairly credit the proposed rule with the health benefits of emissions reductions that will occur 
101 

regardless of the implementation of EPA's Section 111(d) proposal. The commenters said that it 

is improper for the agency to credit health benefits to the proposed rule based on exposure to 

PM2.5 and O3 at levels below the thresholds that EPA has already deemed protective of public 

health. 

Commenters stated that Clean Air Act expressly excludes NAAQS pollutants from those that can 

be regulated under section 111(d) and the benefits of reducing emissions from PM2.5 and ozone 

have already been quantified and used to justify EPA's costly NAAQS regulations. The 

commenters said that EPA's RIA asserted that its benefits calculation "include[s] health cobenefits from reducing fine particles in areas with varied concentrations of PM2.5, including areas 

that do not meet" the PM2.5 NAAQS. The commenters said that the extent of this problem is 

unclear, because EPA fails to estimate the portion of the projected emissions reductions that will 

occur in nonattainment areas. The commenters said that to whatever extent the proposed rule 

counts in its cost-benefit analysis the effects of reducing PM2.5 and ozone to the levels already 

required by their respective NAAQS, the agency is improperly double-counting those benefits to 

justify two sets of regulations. The commenters said that the benefits of achieving the NAAQS 

standards cannot rationally be counted as benefits of other rules. 

Commenters stated that EPA inflates the benefits of the proposal by including reductions in fine 

particulate matter and ozone that cannot be attributed to the proposal, these reductions are 

already required and projected to be attained under the NAAQS program and other rules. The 

commenters said that since the NAAQS are already set at levels that are supposed to be 

protective of public health, it is not clear how EPA can assert that reducing emissions below 

levels that are protective of public health actually benefits public health. The commenters added 

that under a proper, un-inflated cost-benefit analysis, the costs of the proposal outweigh the 

benefits, thus the proposal is unjustified and should be withdrawn. 

Commenters stated that EPA cannot take credit for emissions reductions in this rule that 

Congress specifically defined EPA could not regulate under Section 111(d). The commenters 

said that the reason for this exclusion is that Congress already requires regulation of criteria 

pollutants from these sources in other areas of the Clean Air Act. The commenters added that 

EPA has already promulgated regulations to this effect, and taken credit for the estimated health 

benefits through those separate rules. The commenters added that the EPA uses quantification for 

health co-benefits that consider none of the required reductions from other rules, nor does it 

compare to the health-based thresholds that serve as the foundation of the Clean Air Act: the 

NAAQS. The commenters said the EPA is required to establish the NAAQS at a level that 

protects public health without consideration of cost and that the entire state of Florida is 

designated attainment/unclassifiable for both PM2.5 and ozone. The commenters then said that as 

such, there are no possible health co-benefits that can be quantified in Florida from the Clean 

Power Plan as the state is already meeting the protective thresholds. The commenters said that if 

the EPA quantifies health co-benefits in Florida and other attaining areas, they undermine the 

protective level of the NAAQS they defend in court. The commenters added that if the EPA 

claims that reductions in Florida from the proposed rule lead to significant reductions in out-ofstate nonattainment areas, then they undermine the effectiveness of CSAPR to already achieve 

the necessary reductions, and admit to duplicative regulation. 
102 

Commenters also stated that in order to avoid these contradictory claims, EPA develop a 

proposed GHG rule that rests on the merits of its meaningful GHG reductions alone, and allow 

the regulations required by other sections of the Clean Air Act to work as intended for criteria 

pollutant reductions. 

Commenters stated that most of the co-benefits in the RIA would be attributed to changes in the 

criteria pollutants in areas already in compliance with the health-based NAAQS. The 

commenters said that those co-benefits must be viewed as overstated and potentially nonexistent, and that the question should be what should be done with co-benefits in areas that the 

baseline regulatory scenario does not find to be attaining the NAAQS. The commenters said that 

although the RIA does not provide the requisite data, this must be an exceedingly small portion 

of the co-benefits, if any, because the baseline for the CPP contains all existing regulations. The 

commenters stated that only a few areas in California would not attain that NAAQS by 2020, and 

cited analyses by Smith (2014b) which showed that only a very small geographic portion of 

those areas would actually be above the NAAQS level. The commenters said that the small 

quantity of the co-benefits that the RIA attributes to the CPP are associated with changes in areas 

not already attaining each NAAQS and that those reductions are going to occur even if the CPP 

were not to be implemented. The commenters added that state implementation plans (SIPs) will 

be required and enforced in those areas during the same time period, whether or not the CPP 

exists. The commenters also said that even if individuals other than the EPA Administrator were 

to have confidence in the continued existence of such substantial health effects associations for 

PM2.5 and ozone, to let a climate-related regulation take credit for those reductions is a recipe for 

unnecessary regulations that result in economically inefficient management of the public health. 

Commenters stated the benefits that EPA asserts are produced at ambient air concentrations that 

are lower than the NAAQS, even though EPA set the NAAQS at a level it deemed requisite to 

protect the public health with an adequate margin of safety and without considering compliance 

costs. 

Commenters stated that EPA relies on a series of conjectures that infer rises in ozone and PM2.5 

concentrations, as a result of increased heat waves and drought. However, ozone and PM2.5 are 

criteria pollutants regulated through the establishment of NAAQS under CAA Section 110. The 

commenters said that these health-based standards must, by law, adequately protect human 

health, including that of sensitive populations; therefore, it is inappropriate for EPA to consider 

further reductions in criteria pollutants as a justification for additional GHG regulation in this 

situation. The commenters said that EPA has not identified any GHG as a criteria pollutant nor 

has the agency established a related primary NAAQS which is associated with human health. 

The commenters said that EPA has failed to make a direct correlation to specific concentrations 

of GHG, including CO2, that would directly affect ground-level ozone or PM2.5 concentrations 

and that otherwise, EPA would be compelled to consider these substances as pollutant precursors 

and regulate them under a NAAQS. 

Commenters stated that NOx and SO2 are currently regulated by the EPA. The commenters said 

that as of October 2012, no area of the country has been found to be out of compliance for NOx 

and that since 1980, SO2 concentrations have decreased by 71%. The commenters questioned 

why is the EPA touting any increased air quality benefits now, when these gases are already 

being adequately regulated. 
103 

Commenters stated that the methodology EPA uses to calculate benefits, particularly from PM2.5 

reductions, is fundamentally flawed. The commenters said that EPA uses a no-threshold linearregression-to-zero model design; which counts the benefits of even the smallest reduction in 

PM2.5. The commenters said that this contradicts all standard procedures for health analysis, by 

not establishing a threshold-cut off to determine benefits of reductions. 

Response 3: The proposed rule is not based on the estimates of air quality co-benefits provided 

in the RIA. The benefit-cost analysis included in the RIA accompanying the proposed rule was 

conducted in compliance with Executive Order 12866, which requires a cost-benefit analysis for 

major regulations with an expected impact of greater than $100 million annually. Consistent 

with OMB (OMB, 2003) and EPA guidance (U.S. EPA, 2010a), when conducting a cost-benefit 

analysis to meet the requirements of EO 12866, the EPA estimates all of the anticipated costs 

and benefits associated with a regulatory action to the extent feasible, including benefits 

anticipated to occur from reducing air pollution to below the NAAQS levels. As EPA has 

consistently stated, the NAAQS are not risk free, and as a result, consistent with scientific 

evidence and CASAC review, EPA includes benefits of reductions in air pollution at levels 

below the NAAQS and in areas that attain the NAAQS, even if there is potentially reduced 

confidence in the specific magnitude or those benefits. The most recent Integrated Science 

Assessments (ISA) for ozone and PM2.5 indicate that the science supports use of log-linear nothreshold concentration-response functions for both ozone and PM2.5 (U.S. EPA, 2009, 2013). 

Our use of no-threshold models directly follows this science. The EPA disagrees with 

commenters who suggest it is inappropriate to use no-threshold models, and disagree that these 

models are not reliable. The EPA also disagrees with the commenters who suggested use of a 

Hormesis based model. The scientific literature for PM2.5 does not support this type of model, 

and the literature cited by the commenters is not directly relevant to air pollution exposures or 

PM2.5 and ozone specifically. 

The EPA believes that the best estimate of benefits includes benefits both above and below the 

levels of the NAAQS and maintains it is not double-counting benefits simply because the 

magnitude of the health benefits that occur at lower concentrations are more uncertain. 

The EPA’s standard practice for its rules is to estimate, to the extent data and time allow, all 

benefits of the emissions reductions achieved by a rule beyond control requirements for other 

rules, i.e., establish a baseline. While it can be difficult to account for concurrent rulemakings in 

a baseline, the EPA clearly identifies what is and what is not in the baseline for each analysis. If 

this proposed rule was duplicative of other rules, then there would be no additional costs or 

benefits attributable to this proposed rule. Prior to estimating the health benefits of this proposed

rule (and any other rule), we simulated what PM2.5 concentrations would be in the future to 

account for the air quality benefits that would occur due to other regulations (e.g., MATS) or 

economic factors in this baseline. Any emissions changes expected as a result of this proposed 

rule are additional emissions reductions beyond the other regulations included in the baseline 

(e.g., MATS). Therefore, the benefits from particle reductions are not double-counted – they are 

real health benefits from emissions reductions anticipated to be achieved by this proposed rule. 

Further, the PM2.5 and ozone health co-benefits expected from this proposed rule are not doublecounted with benefits estimated in the NAAQS RIAs. NAAQS RIAs illustrate, but do not 

predict, the emissions reductions strategies that States may choose to enact when implementing a 
104 

revised NAAQS. Subsequent Federal and State implementation rules will be reflected in future 

baselines for PM and ozone NAAQS reviews. Also, because it is not possible to accurately 

account for rules that have not yet been promulgated, RIAs prepared for a future rulemaking will 

likely include any additional rulemakings in the baseline. For example, the baseline in this RIA 

reflects many recently promulgated rulemakings, including MATS, CSAPR, and CCR. 

Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. 

Washington, DC. Available on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a4.html. 

U.S. Environmental Protection Agency (U.S. EPA). 2010a. Guidelines for Preparing Economic 

Analyses. EPA 240-R-10-001. National Center for Environmental Economics, Office of Policy 

Economics and Innovation. Washington, DC. December. Available on the Internet at 

<http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0568-50.pdf/$file/EE-0568- 50.pdf>. 

U.S. EPA. 2009 Final Report: Integrated Science Assessment for Particulate Matter. U.S. 

Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F, 2009. 

U.S. EPA. 2013 Final Report: Integrated Science Assessment of Ozone and Related 

Photochemical Oxidants. U.S. Environmental Protection Agency, Washington, DC, EPA/600/R10/076F, 2013. 

Comment 4: Epi Studies and Burden Analysis 

Commenters stated that the estimates that attribute 90% of the health benefits in 2030 (estimated 

$23 billion to $59 billion) to the reduction in premature fatalities as a result of reducing ozone 

and fine particulate (PM2.5) pollution are erroneous. The commenters argued that EPA claims 

that the propose rule can avoid thousands of American deaths due to PM2.5 pollution are based on 

"cherry-picked studies". The commenters said that these claims also conflict with toxicological 

studies that show that PM2.5 concentration in U.S. cities are too low to cause significant disease 

or death. The commenters also said that the rule's purported health benefits for ozone reduction 

and asthma are less plausible, since according to the EPA, ozone concentrations have declined by 

25%, while asthma rates have increased since 1980. 

Commenters stated that EPA should use the study by Cao et al. (2012) to replace the 

epidemiologic population study from Harvard Six Cities (Lepuele et al. 2012) used to determine 

the health impacts of PM2.5, especially mortality rates. The commenters said that the Cao el al. 

study performed in Xi'an, China covered 1,000 times more people, and Xi'an is the second most 

polluted city on earth where exposure to PM2.5 ranged up to 25 times higher than the Six Cities 

study. The commenters said the study used the same methodology as the Six Cities and ACS 

studies, but that EPA ignored anomalies in both studies that show a relationship between 

pollution and premature deaths for people with an education of high school or less but not for 

people with education above high school. The commenters said the studies concluded that a 14% 

(Six City), and 7% (ACS) increase in death rates would occur linearly for each 10 ug/m3 of 
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added PM2.5 exposure, while the Cao et al. study found a 0.27% increase in death rates for each 

10 ug/m3, and a lower threshold for pre-mature deaths for each 25 ug/m3. 

Commenters stated that EPA's estimate of annual benefits associated with public health from $55 

to $93 billion is totally unsupported by clinical studies or toxicological data. The commenters 

said the EPA admits in its regulatory impact analysis that such benefits are not possible to 

quantify or monetize, and stated that CO2 emissions, which we cause by exhaling, have no direct 

impact on human health. The commenters said EPA did not follow all of the required steps to 

prepare an adequate scientific assessment of alleged health benefits. The commenters stated that 

the EPA's methodology is in violation of the Federal Data Quality Act. 

Commenters stated that in the benefits analysis, EPA ignores the significant share of long-term 

PM2.5 mortality studies that find either no statistically significant increase in mortality with 

increasing PM2.5 concentrations or an inverse relationship. The commenters said EPA should 

reflect this uncertainty about whether long-term PM2.5 exposure increases mortality by adopting 

a lower estimate for PM2.5 mortality benefits that assumes no causal relationship between 

PM2.5 exposure and mortality. The commenters said that EPA's chosen lower and upper 

estimates for the PM2.5 concentration-response function both appear to be too high to fairly 

characterize the range of findings across most long-term mortality studies in the U.S. 

Commenters cited the study by Fann, Gilmore and Walker (2013), a recent quantitative metaanalysis that pooled the results of recent epidemiological studies through 2012 for each of the 12 

U.S. cohorts. The analysis examined the relationship between long-term exposure to PM2.5 and 

the risk of premature mortality among adults. The commenters said that the study did not find a 

statistically significant positive relationship between PM2.5 concentration and mortality. The 

commenters also said that these negative findings are sufficiently frequent (42% of the twelve 

studies/cohorts) as to warrant a lower estimate in the RIA to the effect that there is no causal 

relationship between long-term PM2.5 exposure and increased mortality. The commenters said 

that in the ESPS RIA, EPA has established a lower mortality benefits estimate by applying the 

concentration-response relationship estimated in Krewski et al. (2009) (ACS cohort) of 6% per 

10 ug/m3. The commenters said that four of the ten cohorts (excluding ACS and Harvard Six 

Cities) included in the meta-analysis obtain estimates that are at or below the agency's lower 

estimate. The commenters said in the RIA, EPA has established an upper mortality benefits 

estimate by applying the concentration-response estimate derived in Lepeule et al. (2012) (H6C 

cohort) of 14% per 10 ug/m3. The commenters said that nine of the ten cohorts (again excluding 

ACS and H6C) considered in the meta-analysis obtain estimates that are approximately at or 

below the agency's upper estimate. The commenters said that both EPA's chosen lower estimate 

and upper estimate are too high to fairly represent the range of findings across most of the 

studies. The commenters added that the pooled estimate from the meta-analysis, obtained after 

considering both the sample size and uncertainty of the individual studies, appeared to be about 

7% per 10 ug/m3 of PM2.5. This is very close to the 6% estimate obtained by Krewski et al. 

(2009) and posed by EPA as the lower estimate. 

Commenters stated that EPA has chosen concentration-response functions for PM2.5 and ozone 

mortality that result in estimates of total excess deaths from exposure to these pollutants that are 

implausibly large when compared against aggregate national mortality statistics and other 

reference information. The commenters said that in order to show that EPA's chosen 
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concentration-response functions for these pollutants yield mortality estimates that are 

unreasonably large, they made two sets of comparisons between EPA's estimates of mortality 

attributable to PM2.5 and ozone and other figures. The commenters also said that in the first of 

these sets of comparisons, they compared an EPA estimate of mortality due to these pollutants 

against nationwide data on deaths and cause of death as reported for the year 2005 in the Centers 

for Disease Control and Prevention's (CDC's) National Vital Statistics reports. 

Commenters cited a study by Fann, et al (2012), which developed estimates, using nearly 

identical CRFs as those that EPA has applied in estimating ESPS co-benefits, for the national 

public health burden associated with exposure to ambient PM2.5 and ozone at their 2005 

concentrations. The commenters said that this study found that PM2.5 alone is responsible for 

97.8% of premature mortalities, in comparison to ozone. The commenters said that using the 

results by Fann et al. (2010), they compared only the PM2.5 mortality based on EPA's chosen 

CRFs and aggregate mortality figures from the CDC for the identical population. The 

commenters stated that several of these comparisons suggested that EPA's estimate for the 

number of premature fatalities due to PM2.5 is too high and provided a detailed discussion on 

the effects of PM2.5 on cancer and cardiovascular deaths, as well as accidental and intentional 

fatalities. 

Commenters stated that synergistic effects of a mixture of pollutants are not being considered 

during the EPA's estimated of health benefits for the rule. The commenters cited epidemiologic 

studies in Europe and a project called Euroheat, which looked at health impacts of air pollution 

in combination with heat waves. The commenters said that toxic interactions can have 

significant effects on public health and that there is evidence of high temperatures enhancing 

particulate matter toxicity, and for PM enhancing ozone toxicity. The commenters said they have 

not modeled the three-way interaction nor the four-way combination that includes stress and 

questioned the inclusion of interactions in the dose-response model. The commenters urged EPA 

to take interaction of pollutants into consideration for health benefits analyses. 

Commenters cited the work by Cox (2013) which addressed the assumption of causal 

relationship between PM 2.5 and mortality rates. The commenters noted that the study found 

that after the application of different statistical techniques and tests to the data supporting this 

assumption, the seemingly causal relationship between PM2.5 exposure and mortality 

disappears, and other factors, most notably temperature, emerge as the likely causes of increased 

mortality. (http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3748846/#!po=1.72414). The 

commenters said that in all the scenarios with 5% climate benefit future discount rate, net 

benefits range from around one to two billion dollars in net costs (negative benefits) to less than 

a half billion dollars in net benefits, and stated that more rigorous review is necessary before 

finalization of these rules. The commenters said that at the very least, presentation and serious 

consideration of alternatives, if not abandonment of the log linear no-threshold model and 

adoption of a superior hormetic model altogether, is crucial. 

Commenters stated that EPA's assumptions to generate the premature deaths avoided used to 

monetize the health co-benefits are unreasonable and unsuitable for justifying a rule with such 

far-reaching impacts on the U.S. economy. The commenters discussed the three assumptions, 

and stated that EPA's assumptions have a tendency to overestimate the health co-benefits of the 

ESPS rule. The commenters said that the agency first assumed that all fine particles, regardless 
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of their chemical composition, are equally potent in causing premature mortality. The 

commenters said that the scientific evidence is not yet sufficient to allow differentiation of the 

effects estimated by particle type. The commenters said that the agency also assumes that the 

health impact function for fine particulates is log-linear without a threshold in this analysis. The 

commenters said the estimates include health co-benefits from reducing fine particulates in areas 

with varied concentrations of PM2.5, including both areas that do not meet the fine particulate 

standard and those areas that are in attainment, down to the lowest model 

concentrations. Finally, the commenters said that the agency also assumes that there is a 

"cessation" lag between the change in PM exposures and the total realization of changes in 

mortality effects. The commenters said that specifically, the agency assumes that some of the 

incidents of premature mortality related to PM2.5 exposures occur in a distributed fashion over 

the 20 years following the exposure based on the advice of the SAB-HES, which affects the 

valuation of the mortality co-benefits at different discount rates. The commenters said that the 

assumption that health impact function for fine particulates is log-linear without a threshold in 

this analysis, has the greatest impact in that the vast majority of the U.S. population is exposed to 

PM levels well below the National Ambient Air Quality Standards (NAAQS). 

Response 4: The U.S. EPA follows a highly structured, transparent and peer-reviewed process 

for estimating the human health impacts attributable to poor air quality. As a first step, the 

Agency identifies the health endpoints to quantify by consulting the Integrated Science 

Assessment, a systematic review of the clinical, toxicological and epidemiological literature. 

This document is reviewed by the independent Clean Air Scientific Advisory Committee. The 

Agency quantifies those endpoints classified by the ISA as being causal or likely causal, 

selecting concentration-response relationships from studies that satisfy a host of criteria—most 

notably whether the population characteristics match those affected by the regulation, thus 

excluding studies performed outside of the U.S. and Canada. The Agency’s approach for 

characterizing the benefits of air quality changes has been extensively reviewed by independent 

scientific bodies including the National Academies of Sciences and the U.S. EPA Science 

Advisory Board (SAB). The EPA represents the uncertainty in the magnitude of the benefits of 

reducing PM2.5 concentrations by including a range of estimates reflecting the most appropriate 

available scientific studies, and by including additional ranges based on the statistical uncertainty 

in each of those studies, as well as estimates based on the results of an expert elicitation 

conducted by the EPA. The U.S. EPA SAB has consistently advised the EPA to base its benefits 

estimates on application of the concentration-response functions derived from the two highest 

quality, most representative U.S. cohorts, the American Cancer Society cohort and the Harvard 

6-cities cohort. EPA has implemented this advice in all recent RIAs, presenting a range of 

primary estimates using concentration-response functions based on the most recent analysis of 

the American Cancer Society cohort provided in Krewski et al, 2009, and the most recent 

analysis of the Harvard 6-cities cohort provided in Lepeule et al, 2012. The EPA notes that the 

study by Fann, Gilmore, and Walker (2013) cited by commenters is unpublished, and thus is not 

appropriate to inform the RIA, and even if it were published, has not been subjected to review by 

the Science Advisory Board and thus would not be included as part of regulatory impact 

analyses. 

Consistent with the findings of the PM ISA, which found that the log-linear no-threshold model 

best estimates PM-related premature death, the Agency quantifies PM impacts resulting from 
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changes in ambient concentrations at all levels. The RIA provides information on the 

distribution of PM2.5 concentrations across the populations for the air quality modeling used to 

support the benefits estimates to allow readers to better understand how benefits are distributed 

across the range of PM2.5 concentrations. The RIA acknowledges that there is reduced 

confidence in benefits that occur due to reductions at lower PM2.5 concentration levels. 

Comment 5: Asthma 

Commenters in this summary discussed the contribution of power plants to air pollution, and 

how this has an effect on asthma. They also discussed economic impacts associated with asthma 

and how the rule can improve conditions for people suffering from asthma. Commenters raise 

questions about the link between ozone and asthma. 

Commenters cited some statistics that stated the proportion of people with asthma in the United 

States has grown by nearly 15% in the last decade, and that the mortality rate of asthma sufferers 

is about nine lives lost each day. The commenters said that even one death related to 

environmental causes is unacceptable, and that with climate change, we can expect an increase in 

air contaminant triggers, which will impact environmental justice communities 

disproportionately. 

Commenters stated that coal-fired power plants are the largest sources of carbon emissions in the 

nation. The commenters said that warmer temperatures can lead to ozone formation, which is a 

trigger for asthma and poor air quality. The commenters said asthma is one of the leading 

chronic illnesses among children and adolescents in the U.S., and it is one of the leading causes 

of school absenteeism. The commenters also said children who regularly breathe in ozone 

pollution may face reduced lung function in adulthood, and a reduction in lung function 

increases the risk of respiratory disease later in life. 

Commenters stated that Kentucky has some of the highest rates of asthma in the nation, and that 

according to the CDC, an estimated 312,561 adults in Kentucky had asthma in 2008. The 

commenters said that adult lifetime asthma prevalence was 14.7% and adult current asthma 

prevalence was 9.7% compared with U.S. rates of 13.3% and 8.5%, respectively. 

Commenters stated that any increase in ozone will lead to more childhood asthma attacks and 

complications for those with lung diseases. 

Commenters stated that coal-fired power plant pollution is affecting the quality of life of children 

with asthma and their families. 

Commenters stated that asthma in children can be the result of respiratory infections, often 

caused by exposure to harmful air pollutants in the regions in which they live. The commenters 

said this exposure is especially problematic when issues of environmental justice arise, where 

socioeconomically diverse and disadvantaged children are living and/or playing in close 

proximity to polluting power plants. 
109 

Commenters stated their experience as a family with a child who suffers asthma and how this 

condition affected school and work attendance, and therefore, their economy. 

Commenters stated that targeting fossil-fuel fired power plants will benefit the health and safety 

of our most vulnerable populations and drive a 25% cut in soot and smog causing pollution. The 

commenters said asthma is especially prevalent in New York, with an estimated 1.7 million 

people suffering from the disease. The commenters cited that according to the New York State 

Comptroller, the state's asthma-related Medicaid expenditures rose more than 26% in the last 

five years adding up to $1.3 billion in health care costs and lost workforce productivity. 

Commenters stated that over 25 million Americans live with asthma and that almost 1.9 million 

asthma attacks make up the approximately one-fourth of all emergency room visits. The 

commenters said that U.S. spends almost $56 billion on asthma annually. The commenters said 

no one should have to sacrifice their health for dirty energy. 

Commenters stated that it is estimated that by lowering of the coal-fired power plant emissions, 

there will be lowering of deaths from asthma and respiratory illnesses. 

Commenters stated that the proposed Clean Power Plan provides an opportunity for us to 

improve public health such as these threats from childhood asthma (exposure to ozone and 

particulate matter), by cleaning up the region's air and helping to address climate disruption. 

Commenters stated that 40% of carbon dioxide emissions come from the smoke stacks of coal 

burning power stations and it is essential to regulate these pollutants. The commenters said that 

until EPA establishes these regulations and begins to require compliance, untold numbers of 

children and adults will suffer needlessly from asthma. 

Commenters stated that ozone pollution on the delicate lining of the lungs is analogous to the 

effects of sunburn on the skin. The commenters said ozone aggravates respiratory diseases like 

asthma, and impairs lung function in the population. The commenters cited a study led by 

Brigham Young University's Arden Pope which demonstrated that ozone exposure increases 

rates of respiratory death by about 25% along the Wasatch Front, Utah's Uinta Basin. The 

commenters said other studies have established that ground-level ozone negatively impacts lung 

function across all segments of the population, including young, healthy adults, even at levels 

below current national ambient air quality standards. 

Commenters also argued the purported benefit that the rule will also reduce ozone levels and 

prevent asthma attacks, and stated that it is extremely unclear about the exact nature of the 

relationship between ozone and asthma. The commenters cited that the Texas Commission on 

Environmental Quality (TCEQ) recently reviewed EPA's Health Risk and Exposure Assessment 

(HREA) for the Ozone NAAQs and pointed out that EPA's own Clean Air Scientific Advisory 

Committee (CASAC) has "repeatedly indicated that the limited evidence on new-onset asthma 

should not contribute greatly to the consideration of the strength of evidence for respiratoryrelated effects." The commenters added that ozone levels have declined by 25% between 1980 

and 2012 (according to EPA itself), but that asthma levels have been increasing. The commenters 

questioned, "If ozone worsens asthma, then why do the data run in opposite directions?" The 

commenters also said that until EPA can clearly point to a causal relationship between its 
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rulemakings and reductions in the number of people suffering from asthma, it is inappropriate for 

the agency to claim this as a benefit. 

Response 5: We agree that poor air quality aggravates asthma, and that reducing levels of fine 

particles and ozone will benefit asthmatic populations. We disagree with the conclusion of 

commenters that increased overall asthma during a period of ozone declines is evidence of no 

association between ozone and asthma. A number of environmental and genetic factors 

contribute to the development of asthma and these are well characterized in the medical 

literature. Improved air quality over the past several decades has directly benefited asthmatic 

populations, but factors unrelated to poor air quality have contributed to the growth in the 

measured prevalence of the size of this population. Epidemiologic and toxicological studies 

reviewed as part of the most recent ozone Integrated Science Assessment (U.S. EPA, 2013) 

provide scientific evidence that exposure to ozone is likely to cause respiratory effects, and 

studies include associations between ozone and new onset of asthma. In addition, ozone is 

linked with asthma exacerbations in children who already have asthma, and reducing ozone is 

expected to reduce symptoms, including emergency room visits, in these asthmatic children. 

Comment 6: State-Specific 

Commenters in this summary discussed the public health effects from power plant emissions in 

specific states. 

Commenters stated that health impacts alone are a powerful reason for advancing the EPA's 

Clean Power Plan in Missouri. The commenters said that the White House estimated that 7,700 

asthma related hospital visits occurred in Missouri in 2011 alone, and although it is nearly 

impossible to quantify the number of these visits that occurred as a direct result of air pollution 

from burning fossil fuels, we do know that asthma attacks are higher when chemical particulates 

caused by burning coal and other fossil fuels (specifically particulate matter, ground-level ozone, 

sulfur dioxide, and nitrogen oxide) are more concentrated in the air. The commenters said that 

reducing the pollution in our air will surely mean lessening the severity of respiratory issues for 

thousands of Missourians who will then be more free to live their lives how they see fit. 

Commenters stated that any attempt to mitigate the asthma-related hospital visits will have far 

reaching impacts on Missouri communities. The commenters said that each hospital visit costs an 

average of $14,300 according to the White House's study, totaling $110 million and that a 

portion of that $110 million would never have occurred if Missouri wasn't so heavily dependent 

upon coal-fired energy. The commenters said that as the cost of health care continues to rise, the 

amount of money that carbon-based energy is costing Missouri in health care will become an 

ever larger drag on our economy. The commenters added that from a purely economic 

standpoint, the impact that the Clean Power Plan will have on Missourians' healthcare is 

dramatic. The commenters cited the Harvard School of Public Health and the estimate that over 

1,200 Missourians would be spared from a premature death between now and 2030 due to the 

Clean Power Plan. The commenters stated that even if this estimate is overstated and only 600 

lives are spared by moving towards clean energy by 2030, Missouri would still have more than 

enough reason to move forward. 
111 

Commenters indicated that the state of Colorado has done significant changes to limit carbon 

emission and has achieved dramatic multi-pollutant emissions reductions; however, even with 

these efforts, the air pollution from coal-fired power plants contributes to 53 deaths, 81 heart 

attacks, over 1,000 asthma attacks, and over $400 million in health care costs every year. 

Commenters stated that Kentucky is a state that has elevated asthma rates and cardiovascular 

disease, both of which are linked to carbon pollution. The commenters said the Clean Power Plan 

does not address all these environmental impacts to human health within its decision-making 

process, and that EPA's proposed clean air standards for industrial carbon pollution from power 

plants could protect our citizens more by reducing the smog that triggers asthma attacks and 

other health threats. The commenters added the state's history with coal as a singular source of 

energy has resulted in an environment where state standards that protect human health from coal 

pollution are not strongly enforced. 

Commenters stated that Kentucky has high levels of small-particulates pollution both from 

vehicle emissions and from power plant emissions. 

Commenters cited a report by Kentucky Environmental Foundation called a "Health Impact 

Assessment of Coal and Clean Energy Options in Kentucky," which outlined sources of data 

showing the relationships between the extraction, processing, transportation, burning, and 

disposal of coal combustion waste and health. The commenters said the report outlines the wide 

range of health impacts that coal-based energy can create while also outlining the health benefits 

of cleaner energy sources. 

Commenters also cited the report by Kentucky Environmental Foundation called a "Health 

Impact Assessment of Coal and Clean Energy Options in Kentucky", which outlined the wide 

range of health impacts that coal based energy can create while also outlining the health benefits 

of cleaner energy sources. The commenters also cited their own report on the Shawnee Health 

Impact Assessment, which outlined the more imminent challenges of continuing to support the 

aging, carbon-based power system at the expense of human health instead of transitioning to 

cleaner power sources. 

Commenters also stated that air pollution can affect cardiovascular diseases, and that 

Kentuckians have significantly higher rates of diseases affecting the heart and circulatory system 

than other states across the country. The commenters said that according to Kentucky's Cabinet 

for Health and Family Services, cardiovascular disease accounted for 30% (12,547) of all deaths 

in Kentucky in 2009 and Kentucky ranked 8th out of 50 states for death rates due to 

cardiovascular disease. The commenters stated that EPA's proposed clean air standards for 

industrial carbon pollution from power plants could protect our citizens more by reducing the 

smog that triggers asthma attacks and other health threats, but that efforts by our state regulators 

and state enforcement efforts still leave Kentuckians near the bottom of every indicator 

compared to what is actually possible, or being achieved in other states. 

Commenters stated that by reducing the need for fossil-fuel generation, the Clean Power Plan 

will benefit the health and welfare of people across North Carolina. Cleaner air and cleaner water 

will result in lower incidences of illness and disease and fewer deaths from pollution-related 

illnesses. The commenters said that the proposal encouragement for energy efficiency and 
112 

renewable energy will have many additional co-benefits. The commenters said that EPA's 

expectation that the rule would avoid 2,700-6,600 premature deaths and 140,000-150,000 asthma 

attacks every year, translate to North Carolina's benefits of 1,300 lives saved from 2020 to 2030, 

as well as hundreds of avoided hospitalizations and heart attacks. 

Commenters stated that smog in the District of Columbia impacts the health and welfare of over 

600,000 residents, up to half a million commuters, and millions of tourists on an annual basis. 

Commenters stated that the proposed rule could have significant benefits for the District of 

Columbia's air quality and the magnitude of those benefits will depend on the stringency of the 

emissions goals established by EPA and the approach taken by states to meet them. The 

commenters said that the air quality in the District, including concentrations of particulate 

pollution and ground-level ozone precursors, is heavily influenced by emissions from power 

plants in upwind states. The commenters cited the Harvard School of Public Health study, which 

highlights the particular air quality benefits to the region surrounding the District when 

regulating carbon pollution from existing power plants. The commenters added that this study 

also found that the magnitude and extent of the health and air quality co-benefits of the proposed 

rule will depend on critical policy decisions in the final standards and state plans; and that an 

approach similar to what is proposed by EPA, will result in the greatest co-benefits. 

Commenters stated that Georgia's air quality is poor and how this affects the life style of people 

that love the outdoors. 

Commenters also stated that the rule could also help the District of Columbia to attain Federal air 

quality standards and protect public health. The commenters said that this is especially important 

in light of recommendations from EPA's Clean Air Scientific Advisory Committee (CASAC) 

that the ozone standard be lowered from the current level of 75 parts per billion to 60 to 70 parts 

per billion. 

Commenters stated that Wisconsin recognizes that EPA's proposal will likely result in cobenefits for criteria pollutant emissions such as NOx, VOCs, and SO2. The commenters said that 

based on this EPA should ensure that any reductions in these emissions as a result from the rule 

can be counted by states towards meeting their statutory and regulatory requirements for criteria 

pollutants. 

Commenters stated that the proposed rule provides only incidental benefits and ignores the 

effects of cross-state air pollution. The commenters said that targeting all air pollutant emissions 

would produce much greater environmental and public health benefits than a focus on CO2

emissions alone. The commenters said that EPA has failed to adequately address nitrogen oxide 

emissions from other states, resulting in violations of the ozone health standard in New Jersey. 

The commenters said the proposed rule continues the inequity by approving less stringent CO2

goals for some of the very states that remain the source of high nitrogen oxide emissions, and, 

consequently, the source of serious health issues, both in New Jersey and within their own state. 

Commenters stated that EPA should measure the benefits of emissions reductions from PM2.5, 

NOx, SO2 and ozone on a regional, rather than state-specific scale. 
113 

Commenters felt being considered a sacrifice because of where he lives because of dealing with 

emissions that create the energy to supply some of the major cities in the Four Corner states, 

including Phoenix but has to deal with the suffering of those emissions directly. Commenters 

stated that EPA's mission is to ensure that all Americans are protected from significant risks to 

human health and the environment where they live, learn, and work, and as a human and 

American, wished to be treated equally. 

Commenters understood the industries are conducting an environment impact statement, but 

these studies do not include impact on the health of the people or the impact on the water. 

Commenters stated that there has been no health impact study on the Navajo -- on Navajo land. 

Commenters stated that a recent survey conducted by the Navajo Nation states that asthma and 

respiratory illness on the Navajo land is almost at the same rate as the United States and with the 

high rate of respiratory illness on Navajo land, many are in poor health already with little 

resources to address the rising health costs. Commenters stated that the emissions from coal 

power plants must also include other pollutant, not just carbon. Commenters stated that coal 

plants add millions of tons of pollutant to the air that we breathe every day and we deserve 

nothing less than the same eco-protection that's being granted to every American across the 

Country. 

Response 6: The EPA agrees that poor air quality results in negative health effects and that 

reducing levels of fine particles, ozone, and other emissions will lead to significant human health 

benefits and improvements in quality of life. The broad reductions in air pollution emissions 

expected to result from implementing the proposed rule are expected to improve air quality 

across the U.S., and improve health and environmental quality for the U.S. population. 

Comment 7: Benefit-Per-Ton and Air Quality Modeling 

Commenters stated that EPA has relied on very simplistic dollar per ton estimates for the criteria 

pollutant precursor emissions, which don’t account for the levels of criteria pollutant in the areas 

where emissions are reduced and that EPA has not developed a baseline projection for PM2.5 and 

ozone levels to compare with precursor emissions. The commenters cited Smith and Gans (2014) 

and stated that these issues create large uncertainties. 

Commenters stated that the EPA use of a "benefit-per-ton" approach for PM2.5 when calculating 

the health benefits of the proposed rule is irreconcilable with its recently-promulgated rule 

reducing the annual PM2.5 NAAQS to 12.0 ug/m3 and that the available evidence does not justify 

a standard level set below 12 ug/m3

 as necessary to protect public health with an adequate 

margin of safety. The commenters stated that EPA must reassess the health benefits of the 

proposed rule. 

Commenters stated that EPA's "benefit-per-ton" figures were estimated based on a particular 

inventory of precursor emissions from EGUs and use of "source apportionment" techniques to 

identify the air quality impacts of this emissions inventory at receptor points. The commenters 

said the inventory of changes in EGU precursor emissions expected from the proposed ESPS 
114 

regulation will likely differ in ways that EPA has not examined from the inventory underlying 

the benefit-per-ton estimates. 

Commenters stated that the application of the benefit-per-ton estimate derived from one 

inventory of EGU precursor emissions should not be applied to an inventory of EGU precursor 

emissions or emissions reductions that is substantially different from the first inventory. The 

commenters added that this will lead to inaccuracy in using the benefit-per-ton approach for 

estimating benefits rather than conducting new, policy-specific air quality modeling. The 

commenters said that as one would not want to apply a benefit-per-ton estimate developed for 

EGU precursor emissions in the southeast to a policy situation where precursor emissions would 

be reduced in the northeast, one might also not want to apply an estimate developed for 

precursors from a mix of coal- and gas-fired EGUs to a set of emissions reductions from coalfired EGUs only. The commenters stated that EPA used inventories that were either national or 

regional inventories, and applied these to a much smaller set of projected precursor emissions 

reductions from only some of these EGUs, and that the agency assumed these inventories were 

similar. The commenters argued these inventories differ in important ways such as: 1) the 

distribution of precursor emissions reductions across individual states will likely be substantially 

different from the distribution of inventoried baseline precursor emissions across states, and 2) 

the proposed ESPS regulation will likely elicit reductions in precursor emissions mostly from 

older, coal-fired units, while the inventory for which the benefit-per-ton figures were derived 

consists of emissions from many newer and/or gas-fired units. The commenters said that EPA 

should examine this issue in order to determine if these differences are sufficient to result in 

meaningful revisions to the co-benefits estimates. The commenters added that other attributes of 

the inventory can be important, in addition to location, such as: 

1. The release characteristics of the EGUs (e.g., stack height, exit velocity) -- this affects 

the mix of air quality impacts that the inventoried emissions will cause and whether 

the resulting air quality impacts will tend to be more local or more distant. 

2. The meteorologies around the inventoried EGUs. 

3. The distances of the inventoried EGUs from population centers -- this will determine 

whether the share of these EGUs' precursor emissions that have more local impacts 

will affect sparsely populated areas or more densely populated areas. 

4. The air quality and concentrations of air pollutants from other sources currently 

surrounding the particular EGUs likely to be affected by the ESPS regulation. 

Commenters stated that the source apportionment approach evidently introduces increased 

inaccuracy when the relevant atmospheric chemistry involves nonlinear processes and/or 

multiple pollutant species. The commenters stated that EPA assumed that there are no significant 

non-linearities or cross-pollutant interactions in the atmospheric chemistry whereby precursor 

emissions (consisting in this analysis of direct PM2.5 of several sorts, SO2, and NOx) eventually 

become concentrations of PM2.5 and ozone that may cause the alleged health damages. The 

commenters said that they suspect that the non-linearities and cross-pollutant interactions 

involving NOx in particular will result in lesser reductions in ozone and PM2.5 concentrations in 
115 

practice than those that EPA projected based on the benefit-per-ton approach (source 

apportionment followed by something akin to assumed proportional rollback). 

Commenters also stated that for a regulation as costly and important as the ESPS, EPA should 

consider simulating the geographic distribution of emissions reductions, atmospheric processes 

and population exposures using policy-specific, de novo atmospheric modeling, not the "shortcut" benefit-per-ton approach. The commenters said EPA introduced needless inaccuracy and 

apparently some upward bias to the Agency's benefits estimates by relying on the benefit-per-ton 

approach. 

Commenters stated EPA has failed to estimate the "benefit-per-ton" to the extent that precursor 

emissions from sources other than EGUs will increase as a result of the proposed rule 

Commenters stated that in the proposed rule, EPA throws out a controlling premise of the 2013 

PM2.5 NAAQS and asserts that the agency is "unable to estimate the percentage of premature 

mortality associated with the emission reductions at each PM2.5 concentration, as we have done 

for previous rules with air quality modeling." The commenters added that EPA offers no 

explanation for why it lacks the modeling data it used in the 2013 NAAQS rule, but this 

omission has an enormous benefit-inflating effect. The commenters said that in a major 

understatement, the agency admits that it is "less confident in the risk we estimate from 

simulated PM2.5 concentrations that fall below the bulk of the observed data in the relevant 

studies," and acknowledges that "these results are not consistent with results from RIAs that had 

air quality modeling." The commenters said because the agency lacks "the necessary air quality 

modeling input and/or monitoring data to run the benefits model," the proposed rule's RIA also 

lacks "the type of detailed uncertainty assessment found in the PM2.5 and ozone NAAQS." 

Response 7: The EPA disagrees that the benefit-per-ton approach is inappropriate. The 

methodology used for the proposal analysis for estimating the health benefits associated with 

reducing PM2.5 and ozone precursor emissions is based on peer-reviewed publications (see Fann 

et al., 2012). For the final rule, EPA has provided a more representative benefits analysis that 

relies on air quality modeling of the proposed rule. EPA generated updated benefit-per-ton 

estimates based on modeling ozone and PM2.5 responses to reductions in NOx, SO2, and 

directly emitted fine particles estimated for the proposed Clean Power Plan (see Appendix 4A of 

the final RIA). These updated benefits-per-ton reflect the proposed rule, and are appropriate for 

modeling the benefits of the final rule. National average benefit-per-ton estimates are inherently 

more uncertain than benefits directly derived from air quality modeling. EPA has generated 

regional (east, west, California) benefit per ton estimates to reduce this uncertainty, and EPA has 

high confidence in the magnitude of total monetized benefits at the national and regional level. 

EPA notes that the benefits for specific locations may vary, and thus there would be substantially 

more uncertainty regarding state level benefits. EPA has not generated state-level benefits 

estimates. 

Comment 8: Enstrom 
116 

Commenters challenged the public health basis for the June 2, 2014 EPA Clean Power Plan, 

particularly the validity of the EPA Fact Sheet claim that "Americans will see billions of dollars 

in public health and climate benefits, now and for future generations. The Clean Power Plan will 

lead to climate and health benefits worth an estimated $55 billion to $93 billion in 2030, 

including avoiding 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in 

children." The commenters cited sections 4.3.1.1 (Mortality Concentration-Response Function 

for PM2.5) and 4.3.2 (Economic Valuation for Health Co-benefits) of the June 2, 2014 EPA 

"Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power 

Plants and Emission Standards for Modified and Reconstructed Power Plants" and stated that 

they have assembled overwhelming evidence that challenges the validity of the relationship 

between PM2.5 and total mortality ("premature deaths") as described in publications based on 

the American Cancer Society (ACS) Cancer Prevention Study II (CPS II) cohort, such as, 

Krewski et al., 2009. The commenters also said that this evidence is detailed in their attached 

November 15, 2013 critique "Scientific Misconduct in Fine Particulate Matter Epidemiology by 

Dr. C. Arden Pope, III, in Collaboration with Drs. Daniel Krewski, Michael Jerrett, and Richard 

Burnett, with the Complete Cooperation of the American Cancer Society", and that can be found 

on the following link (http://www.scientificintegrityinstitute.org/Pope111513.pdf). 

Commenters added this critique is supported by the attached November 7, 2013 email request to 

Dr. Alpa V. Patel of ACS Epidemiology describing their serious concerns about the use of CPS 

II data for examining PM2.5 and mortality 

(http://www.scientificintegrityinstitute.org/Patel110713.pdf). The commenters said that the 

critique is further supported by the 50 attached pages of January 6, 2010 to May 17, 2011 

correspondence between an Ad Hoc Group of California businessmen and the University of 

California President Mark G. Yudof regarding U.C. Berkeley Professor Michael Jerrett and his 

unethical use of ACS CPS II data in the analysis and characterization of the relationship between 

PM2.5 and mortality in California during 1982-2000 (http://calcontrk.org/Jerrett051711.pdf). 

Response 8: The EPA strongly disagrees with the commenters' interpretation of evidence related 

to the impact of PM2.5 on mortality. EPA completed a comprehensive, highly peer-reviewed 

assessment of the scientific evidence on PM2.5 and health in 2009, and an updated provisional 

review of new information published between 2009 and 2012, prior to issuing updated National 

Ambient Air Quality Standards in 2012. EPA concluded that the full body of evidence supports 

a determination that long-term exposure to PM2.5 causes mortality (U.S. EPA, 2009, 2012). 

Numerous scientific bodies, including the American Heart Association (Brook et al, 2010), and 

the World Health Organization (WHO/Europe, 2013), have affirmed this finding of a causal 

relationship. Further, EPA's approach to estimating the mortality benefits of reducing PM2.5 

concentrations has been extensively reviewed by the National Research Council and EPA's 

independent Advisory Council on Clean Air Compliance Analysis, and the consensus conclusion 

of that panel was that the studies (those using the American Cancer Society and Harvard 6-city 

cohorts) used by EPA to estimate mortality benefits are "good foundations for the health 

benefits estimates for PM and these studies are supported by other recent studies and expert 

evidence gathered by the EPA project team." EPA provided information on studies published 

since 2009 in the 2012 PM NAAQS RIA, including summarizing risk results presented in 

Enstrom 2005. 
117 

References: 

Enstrom JE 2005. "Fine particulate air pollution and total mortality among elderly Californians, 

1973-2002." Inhal Toxicol 17: 803-816. 

U.S. Environmental Protection Agency (U.S. EPA). 2009. Integrated Science Assessment for 

Particulate Matter (Final Report). EPA-600-R-08-139F. National Center for Environmental 

Assessment—RTP Division. December. Available on the Internet at 

<http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>. 

U.S. Environmental Protection Agency (U.S. EPA). 2012. Provisional Assessment of Recent 

Studies on Health Effects of Particulate Matter Exposure. EPA/600/R-12/056A. National Center 

for Environmental Assessment—RTP Division. December. 

U.S. Environmental Protection Agency (U.S. EPA). 2012. Integrated Science Assessment for 

Particulate Ozone and Related Photochemical Oxidants (Third External Review Draft). 

EPA/600/R-10/076C. National Center for Environmental Assessment—RTP Division. June. 

Available on the Internet at <http://cfpub.epa.gov/ncea/isa/recordisplay.cfm?deid=242490>. 

Comment 9: BenMAP 

Commenters in this summary expressed opposition to the rule with regard to public health and 

its purported benefits. 

Commenters discussion focused on two topics: (1) appropriateness of calculating benefits of 

pollutant reductions in populations already meeting the NAAQS for PM2.5 and ozone and (2) 

limitations of BenMAP. The commenters stated that it is not appropriate for health benefits to 

accrue at PM levels that are already deemed to be protective of human health, and that there are 

inconsistencies between how NAAQS standards have been set at a level below which uncertainty 

becomes too large and how the RIA has assumed a 100% certainty for the elevated risk for all 

ambient pollutant exposure concentrations below the NAAQS. The commenters referred EPA to 

the Smith 2014 research which discusses this type of inconsistency in greater detail, but 

summarized that "due to inclusion of risks calculated in areas in attainment with the NAAQS, the 

benefits estimates in RIAs the expected value that can be inferred from the rationale for the 

NAAQS. This upward bias is even larger for PM2.5 co-benefits in RIAs for non-PM2.5 

regulations". 

Commenters discussed BenMAP and its "concentration-response function" and stated that the 

limitations of BenMAP should be recognized. The commenters stated that some of the embedded 

options are limited and inconsistent with the literature, such as the three PM-mortality 

concentration-response functions which do not reflect the totality of the literature. The 

commenters cited a recent analysis by Smith and Gans that identified 22 studies containing valid 

concentration-response functions and identified 59 appropriate risk estimates from these studies. 

The commenters said that BenMAP includes only one risk coefficient (0.0058) whereas studies 

may include several coefficients, which gives the impression of much more precise conclusions 
118 

from that study than is the case. The commenters also said that if the range of risk coefficients 

identified by Smith and Gans is used, the same analysis produces risk estimates ranging from 0 

to 516,000 deaths, which is not only much wider but also reveals a chance there is no risk at all. 

Commenters also stated that BenMAP's benefit ranges only reflect the range of the two 

concentration-response functions used and does not consider any other sources of uncertainty. 

The commenters added that sensitivity analyses are limited because alternatives not embedded 

within BenMAP are not easily considered and there is no clear way to consider the impacts of 

simultaneously varying more than one input or assumption into BenMAP at a time. The 

commenters concluded that because of these issues, BenMAP can give a misleading impression 

about the uncertainty ranges that are biased toward suggesting less uncertainty than there 

probably is. The commenters said that "EPRI is currently supporting research to develop an 

integrated uncertainty analysis that is expected to illustrate the greater policy insights that can be

obtained using this approach rather than a set of deterministic calculations as currently exists 

within BenMAP". 

Commenters stated that BenMAP offers no provision for considering different species or 

components of PM2.5 despite increasing evidence that some components of PM2.5 may be more 

highly associated with adverse health effects. The commenters cited a Rohr and Wyzga literature 

review that concluded that more scrutiny needs to be given to elemental and organic carbon 

components of PM. 

Response 9: The environmental Benefits Mapping and Analysis Program—Community Edition 

(BenMAP-CE) is an open-source PC-based software program that estimates the incidence and 

economic value of air quality changes. Users can quantify impacts by applying the 

concentration-response and economic valuation functions that U.S. EPA applies in its Regulatory 

Impact Analysis, or users can specify their own functions from the epidemiology and economics 

literature. When selecting among concentration-response functions to use in BenMAP-CE, the 

U.S. EPA selects among those health endpoints whose relationship with air pollution the Clean 

Air Scientific Advisory Committee (CASAC) has determined to be "causal" or "likely causal." 

U.S. EPA quantifies long-term PM2.5-related premature deaths using concentration-response 

relationships recommended by CASAC. If users prefer instead to supply their own 

concentration-response and economic value functions, they may use the built-in health impact 

function or economic value function editor. Finally, the development team is exploring new 

features that will allow analysts to characterize the uncertainty associated with reducing two or 

more pollutants (e.g., PM2.5 and ozone) or two or more pollutants and stressors (e.g., temperature 

and ozone). 

In addition, EPA has include in the RIA a number of additional uncertainty and sensitivity 

analyses, including showing how mortality benefits are affected by the use of concentrationresponse functions based on the results of an expert elicitation which evaluated the scientific 

uncertainties in the relationship between PM2.5 and premature mortality. EPA provides 

estimates based on the responses of 12 different experts to demonstrate the range of uncertainty. 

As discussed in the RIA for the proposed rule, because the experts relied upon the American 

Cancer Society and Harvard Six Cities cohort studies to inform their concentration-response 

functions, the benefits estimates derived from the expert responses generally fall between results 

derived from these studies, and thus the range of benefits provided by EPA in the RIA is largely 
119 

representative of the broader range of uncertainty. BenMAP includes all of the concentrationresponse functions based on the expert elicitation.

Comment 10: Differential Toxicity 

Commenters discussed EPA's assumptions regarding the composition and potency of each 

component of PM2.5. The commenters cited Smith and Gans (2014) and Fraas and Lutter (2013) 

to state that the equal potency assumption likely overstates risks from PM2.5 changes, perhaps up 

to 100%, especially because such a very large portion of the co-benefits is derived from sulfate 

as a component of PM2.5. 

Commenters recommended EPA eliminate the fine particles of ammonium sulfate from the 

health benefit calculations as they have been shown to be non-toxic. The commenters said that 

three quarters of the health benefit calculation is based on ammonium sulfate reduction, which 

drops health benefits from $62 billion to $15.5 billion. The commenters added that most of the 

fine particulate matter from coal-fired power plants comes indirectly from sulfur dioxide 

emissions forming particulate ammonium sulfate and that studies show no link between 

ammonium sulfate and health issues. The commenters also said ammonium sulfate has been 

used as an inert control material in studies of health impacts of aerosols.

Response 10: While the EPA agrees that there is some uncertainty regarding the assumption of 

equal toxicity of PM species, the EPA disagrees that there is no link between sulfate exposure 

and adverse health effects. The PM ISA concluded that "many constituents of PM2.5 can be 

linked with multiple health effects, and the evidence is not yet sufficient to allow differentiation 

of those constituents or sources that are more closely related to specific outcomes" (U.S. EPA, 

2009). While some particles may have higher or lower toxicity than the average for all fine 

particles, the body of scientific evidence supports the conclusion that reducing fine particles will 

result in substantial public health benefits. 

We therefore follow the advice of the EPA’s Clean Air Scientific Advisory Committee (Hammitt 

et al. 2010, available at: 

http://yosemite.epa.gov/sab/sabproduct.nsf/fedrgstr_activites/2nd%20Prospective%20812%20St

udy!OpenDocument&TableRow=2.3#2), which concluded that "Although the possibility of 

differential toxicity among PM2.5 components could be an important issue, the Council concludes 

that the state of the knowledge does not permit a useful sensitivity analysis at this time" (p. 6). 

Comment 11: Valuation and VSL 

Commenters stated that 98% of EPA's estimated co-benefits involve avoided premature 

mortality. The commenters said that these mortality benefits would decline sharply, if the 

agency were to improve the analysis by estimating and valuing "statistical life-years gained" 

rather than "statistical lives saved". The commenters drew attention to the population assessed 

during the studies from which EPA drew the estimated value of a statistical life (VSL). The 
120 

commenters said the population assessed during those studies should have been older with many 

fewer average years of life expectancy remaining. The commenters stated that it is inappropriate 

for EPA to value the statistical lives at risk from PM2.5 air pollution -- for populations for whom 

the potential loss in life expectancy is usually small -- by reference to studies on wholly different 

populations where deaths involve much greater loss in life expectancy. 

Commenters stated that in the benefit-per-ton calculations for estimating co-benefits, EPA 

estimated the value of avoided mortality by multiplying the projected number of statistical deaths 

avoided due to the proposed rule by the wrongly chosen VSL. The commenters said a better 

approach for monetizing the benefits of avoiding premature mortality would be for EPA to 

estimate the number of life-years gained as a result of the regulation and then multiply by the 

value of a statistical life-year (VSLY). The commenters added that depending on the particular 

VSLY that is chosen, this different approach to valuation would reduce the monetized benefits 

that EPA estimates for the proposed ESPS regulation by between 47% and 95%. 

Commenters also stated that to estimate the total monetized benefits, EPA might alternatively 

have estimated the monetized value of the agency's projected reduction in risk of premature 

mortality by calculating the number of life-years that would be saved or extended rather than the 

number of premature deaths avoided, and then multiplying by the value of a statistical life-year 

(VSLY) rather than by the value of a statistical life (VSL). The commenters said the VSLY 

approach would yield lower, and perhaps much lower, estimated benefits for the proposed rule 

than the VSL approach that EPA has applied. The commenters provided comments with regard 

to the use of VSL or VSLY as the preferred metric to valuate health benefits. The commenters 

said that: 1) EPA did not follow the suggestion by OMB that agencies should present benefits 

estimates showing both statistical lives saved and statistical life-years saved and 2) it is 

inappropriate for EPA to value the premature deaths avoided by this proposed regulation at the 

same VSL as has been derived from a set of studies where each avoided premature death 

involves many more years of life expectancy. The commenters said that OMB suggests that 

"when there are significant differences between the effect on life expectancy for the population 

affected by a particular health risk and the populations studied in the labor market studies, it is 

preferable to adopt a VSLY approach to reflect those differences. You should consider 

providing estimates of both VSL and VSLY..." The commenters provided a list of several 

estimated VSLY, and stated that if EPA were to use them it would lead to lower estimates of 

PM2.5 mortality benefits than those EPA calculated in the ESPS RIA. 

Commenters also recommended EPA use lost earnings potential instead of willing-to-pay 

surveys to determine the value of one year of added life. The commenters said the willingnessto-pay survey is 100 times the rate of the lost earnings calculation; it drops health benefits from 

$62 billion to $0.6 billion. The commenters said that the estimated number of expected 

premature deaths is multiplied by $10.1 million/premature death. The commenters said that this 

is based on "Willingness-to-Pay" surveys and that this is an exaggerated measure. The 

commenters said that the American Lung Association estimates the total cost of all COPD 

premature deaths at $12.4 billion but the cost was spread over 134,000 deaths for an average cost 

of about $93,000/premature death. The commenters compared this value to the $62 billion EPA 

estimate for 6,200 premature deaths. The commenters said that the cost covers lost potential 
121 

earnings with a 3% discount factor, and is reasonable as most of the premature COPD deaths 

(85%) occurred in people over 65 years old. 

Commenters stated that EPA's estimates of the health and economic benefits of reducing ambient 

PM2.5 and ozone appear similarly implausible when the reductions are carried forward to the 

year 2020, the first year for which the ESPS RIA estimates costs and benefits. The commenters 

said that a 50% reduction in ambient levels of PM2.5 cannot have as much public health impact 

as completely eliminating active smoking in the U.S. population. The commenters also argued 

the EPA's projected economic value of mortality reductions stating that: 1) EPA's central 

estimate of the economic benefits of PM2.5 reductions would exceed the projected GDPs of all 

but 10 countries in the world, 2) EPA's high estimate of the economic benefits of PM2.5 

reductions would exceed the total GDPs of all countries except the U.S. and China; and 3) EPA's 

estimate of the economic benefits of PM2.5 reductions is equal to 10-28% of the total projected 

U.S. GDP in the year 2020. 

Commenters said that when measuring costs and benefits to children under this proposal, we 

must take into account that we are considering health effects to children that will occur over a 

number of years and across generations. The commenters also said that traditional cost-benefit 

analyses and discounting methods systemically reduce the value of long-term benefits such as 

preventing a health effect in the future and that this is not correct or acceptable in measuring the 

true value of this proposal. 

Response 11: The EPA’s approach for monetizing benefits from reductions in mortality risk 

(including sources of estimates and methods for adjustment over time) is based on standard 

welfare economics, is appropriate for use in these economic analyses and has been peer reviewed 

by the Agency’s Science Advisory Board (SAB). Specifically, the SAB noted that, in this 

context, "the value of a reduction in mortality risk (e.g., in the probability of dying over a stated 

period) is what a person is willing to pay for it" (U.S.EPA SAB 2000). The EPA uses estimates 

of the willingness to pay for small reductions in individual mortality risks drawn from the peerreviewed literature and published in its peer-reviewed Guidelines for Preparing Economic 

Analyses (U.S. EPA 2010). When applied to the population affected by a regulation, these risk 

reductions are reported as statistical lives and the associated value, the "value of a statistical life." 

Regarding the application of a Value of Statistical Life Year (VSLY) approach, Circular A-4 

(OMB, 2003) suggests that agencies consider providing the benefits of reduced mortality risk in 

these terms, but does not require an agency to do so. The EPA has since explored the issue of 

remaining life expectancy and its potential effect on WTP and has received guidance from the 

SAB on the matter (U.S. EPA-SAB, 2007). To summarize, the SAB concluded that, while age 

and health status would likely have an effect on willingness to pay for mortality risk reductions, 

economic theory is ambiguous on how people’s willingness to pay to reduce mortality risks 

should change over their lifetime leaving it, therefore, as an empirical matter (U.S. EPA-SAB, 

2007). The judgment of the SAB, however, is that the empirical literature is not advanced 

enough to provide clear guidance on how age and health status affect willingness to pay to 

reduce mortality risks and that "...the use of a constant Value of a Statistical Life Year (VSLY), 

which assumes that the VSL is strictly proportional to remaining life expectancy, is 

unwarranted" (U.S. EPA, 2007, p. ii). Instead, the SAB recommended that EPA use an ageindependent valuation of mortality risk reductions. 
122 

This position was upheld by the National Research Council of the National Academies in their 

2008 report on Estimating Mortality Risk Reduction and Economic Benefits from Controlling 

Ozone Air Pollution. In this report, the NRC stated the following: 

"Unless future research produces empirical support for the assumptions that underlie a 

constant VSLY, EPA should not attempt to make valuation adjustments for changes in 

remaining life expectancy by estimating life years saved and applying a constant VSLY" 

These recommendations are reflected in EPA’s Guidelines for Preparing Economic Analyses 

(USEPA 2010) and applied in this RIA. 

Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. 

Washington, DC. Available on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a4.html. 

U.S. Environmental Protection Agency—Science Advisory Board (U.S. EPA-SAB). 2000. An 

SAB Report on EPA’s White Paper Valuing the Benefits of Fatal Cancer Risk Reduction. EPASAB-EEAC-00-013. July. Available on the Internet at

<http://yosemite.epa.gov/sab%5CSABPRODUCT.NSF/41334524148BCCD6852571A70051649

8/$File/eeacf013.pdf>. 

U.S. Environmental Protection Agency—Science Advisory Board (U.S. EPA-SAB). 2007. SAB 

Advisory on EPA's Issues in Valuing Mortality Risk Reduction. EPA-SAB-08-001. October. 

Available on the Internet at 

<http://yosemite.epa.gov/sab/sabproduct.nsf/02ad90b136fc21ef85256eba00436459/4128007E78

76B8F0852573760058A978/$File/sab-08-001.pdf>. 

National Research Council of the National Academies. 2008. Estimating Mortality Risk 

Reduction and Economic Benefits from Controlling Ozone Air Pollution. The National 

Academies Press: Washington, DC. 

U.S EPA 2010. Guidelines for Preparing Economic Analyses. EPA 240-R-10-001. December. 

Available at: http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html 

Comment 12: Other Estimates of CPP Co-Benefits -- Harvard/Syracuse, Schwartz, NRDC 

Commenters in this summary discussed the economic benefits that implementing the rule will 

provide to public health and to projected effects of climate change.

Commenters cited the results from the Driscoll et al. 2014 and Schwartz et al. 2014 studies, 

which indicated that the magnitude of these air quality and health co-benefits can vary 

substantially and depend on the design of the final standards. The commenters added that their 

results suggest that carbon standards that have stringent CO2 emissions reductions targets but 

have high compliance flexibility and promote substantial investments in demand-side energy 

efficiency have the greatest estimated air quality and health co-benefits in both absolute terms 

and on unitized basis of per-ton-of-CO2 reduced. The commenters also added the studies also 
123 

showed that carbon standards focused strictly on power plant retrofits could increase emissions 

with little to no health co-benefits nationwide. The commenters said the results underscore that 

the design of power plant carbon standards strongly influences the magnitude and distribution of 

air quality improvements and health co-benefits that accrue to states and to local communities. 

The commenters added that quantifying and valuing local benefits could be an important 

additional motivator for taking action on climate change. The commenters said that given the 

vast difference in air quality and health results and the potential for increased emissions and 

adverse effects under some options, the final rule and subsequent state implementation plans 

should include an estimate of changes in emissions of co-pollutants (e.g., SO2, NOx, PM, and 

Hg) and potential consequences for air quality, atmospheric deposition and health effects in the 

affected and downwind states. 

Commenters cited a recent study by Driscoll et al. (2014) that modeled policy approaches, one of 

which was closely approximated to the proposed rule by considering state-based CO2 emissions 

targets, flexible compliance options, and significant program investments in new end-user energy 

efficiency, and resulted in the greatest air pollution reductions out of all modeled scenarios. The 

commenters stated that the results indicate that the CPP may affect a 35% decrease in carbon 

emissions, as well as decreases in NOx, SOx, SO2, ozone, and PM2.5. The commenters said the 

study estimated that the scenario similar to the proposed rule would result in "3,500 premature 

deaths avoided, 1,000 hospital admissions avoided from heart and lung disease, [and] 220 heart 

attacks prevented each year," with all states receiving benefits from the standards. No negative 

health endpoints were observed by the researchers for the scenario, while other scenarios less 

similar to the proposed rule indicated some negative health endpoints from different policy 

choices. The commenters stated that based on this, EPA and states must guard against negative 

health endpoints when developing plans. 

Commenters stated that strong limits on carbon pollution from existing power plants could 

improve air quality and prevent an estimated 3,500 (780 to 6,100, 95% CI) premature deaths in 

2020 along with other significant benefits to human health, according to an analysis released in 

September by researchers from Harvard University, Syracuse University, and Boston University. 

The commenters said that the report evaluated alternative approaches for reducing carbon 

pollution from power plants, and showed that a strong, enforceable and flexible approach to 

reducing carbon pollution would reduce emissions of sulfur dioxide and nitrogen oxides by about 

775,000 tons each year. The commenters said that the report stated that in addition to reducing 

premature deaths, the strongest options avoided 530 to 1,500 hospital admissions for 

cardiovascular and respiratory diseases in 2020; and that as a result of lower emissions, all of the 

lower 48 U.S. states would experience cleaner air. 

Commenters cited a study by scientists at Syracuse and Harvard, which showed that cleaning up 

carbon pollution will clean up other forms of pollution. The commenters said that effective 

limits on carbon pollution are estimated to reduce about 775,000 tons annually of coal pollutants 

like sulfur dioxide, nitrogen oxide and mercury, and to decrease ozone and particulate matter, 

which are serious health hazards that increase the risk for asthma attacks, affect fetal 

development and contribute to premature death. The commenters urged the EPA to move 

forward with strong limits on carbon pollution to prevent diseases and premature deaths. 
124 

Commenters cited the study by Harvard School for Public Health and indicated that the results of 

this study show that carbon standards for existing power plants that are aimed at addressing the 

long-term issue of global climate change can bring substantial near-term state and local health 

co-benefits. The commenters also said that the study also demonstrated that the specific policy 

design choices for power plant carbon standards have a critical influence on the magnitude and 

distribution of the health co-benefits that occur. 

Commenters cited the Harvard School of Public Health, Syracuse University, and Boston 

University's research, which found that significant investment in energy efficiency and giving 

states flexibility for implementation similar to the Clean Power Plan yielded greater health 

benefits than other strategies for carbon pollution reductions. The commenters stated that like 

EPA's analysis, the research found reductions in premature deaths, heart attacks, and hospital 

admissions. The commenters said the study found that the health co-benefits were achieved in 

states such as Pennsylvania, Ohio, and Texas that have historically borne the brunt of coal power 

plant pollution. 

Commenters argued the claims that CPP will lead to increases in the price of energy and job 

losses and stated that the electric bill is the least of our worries. The commenters cited Harvard 

Medical School estimates that coal costs the U.S. economy $150 to $250 billion a year mostly in 

adverse health impacts. The commenters stated that even at the lower estimate it would double 

the cost of coal if these costs, which are disingenuously described as hidden, were taken into 

account. The commenters added that American families are paying for these expenses and suffer 

the consequences. The commenters also pointed out the costs of wildfires and the costs of 

fighting those fires. The commenters cited the cost of Colorado's 2013 September flood, which 

was estimated to top $2 billion and stated that that is the cost of climate change in only one state. 

The commenters also addressed the ecosystem costs that could be potentially far more 

catastrophic but harder to define: "And here are just a few: The billion trees, what's the cost of 

that and who will pay? What is the cost of rapidly worsening ocean acidification which threatens 

the collapse of entire ocean ecosystems? What would be the cost of losing insects that pollinate 

our food crops or the cost of hand pollinating? And finally, to me one of the saddest statistics of 

all and the most frightening, many scientists have estimated we will lose between a quarter and a 

third of the earth's species by 2050 due to the combined impact of global warming and habitat 

loss. This cost is incalculable." 

Commenters stated that by 2030 under the CPP, not only do the climate benefits alone from CO2

reductions amount to about $30 billion annually, but the corresponding health co-benefits are 

valuated at up to twice as much as the climate benefit portion. The commenters said that those 

annual total benefits accrue to a range between six and twelve times the accompanying 

compliance costs. The commenters cited the Syracuse and Harvard University's co-benefits 

report, which showed air quality improvements in western Pennsylvania projected to occur under 

this rule to be among the largest in the country. 

Commenters cited a study by Schwartz et al. 2014, which implemented three policy scenarios to 

determine the effectiveness and efficiency of each scenario for establishing power plant carbon 

standards and their subsequent co-benefits. The commenters said, the scenario which resembled 

what EPA outlines in the CPP (Electricity Sector Improvements (incorporating moderate 

stringency, high flexibility, and high user efficiency)), provided the most co-benefits of the 
125 

scenarios analyzed as it would result in larger CO2 and co-pollutant (NOx, SO2, and Hg) 

emissions reductions than the other two scenarios. 

Commenters cited the Clean Air Task Force report, which determined that presently coal-fired 

emissions cause or contribute to premature deaths of over 13,000 people annually, and estimated 

that the U.S. societal cost annually in health care and lost work days due to sicknesses is over 

$100 million. The commenters stated that due to the Obamacare, it is the public's burden to carry 

the insurance for everybody, thus, pollution is an economic cost that should be placed on the 

generation of any power plant. The commenters argued the investment to make coal power 

plants more efficient (e.g., scrubbers) may not achieve the goal; however, encouraged the use of 

wind power and stated that wind power had the same cost as mass coal power. 

Commenters stated that the NRDC's study (Lashof et el., 2014) was designed prior to and 

strongly resembles the CPP. The commenters said that the study proposed six policy cases to 

mitigate carbon pollution, each with varying degrees of regulation (i.e., Moderate, Full 

Efficiency case; Moderate Constrained Efficiency; Ambitious, Full Efficiency; Ambitious, 

Constrained Efficiency; and Ambitious, Constrained Efficiency, Product Tax Credit (for wind 

power)). The commenters said these cases were compared to a reference case, and that each case 

was analyzed using ICF's Integrated Planning Model (IPM) and NRDC's assumptions, which 

were based on fuel prices, expected policies, and energy demand, to determine CO2 reductions 

by 2020. The commenters said the IPM model showed substantial reductions in each case, with a 

21% drop from 2012 levels (using the Moderate, Constrained Efficiency case) to 31% (using the 

Ambitious, Constrained Efficiency, Product Tax Credit case). The commenters said that IPM 

also showed the economic impetus for pursuing NRDC's suggestions as the benefits outweighed 

costs by at least $21 billion in each case. The commenters also said the scale of environmental 

and health benefits these cases could bring as CO2 reductions would mitigate climate change and 

cuts in co-pollutants would "prevent more than 17,000 asthma attacks annually, avoid more than 

1,000 emergency room visits and hospital admissions per year, and prevent thousands of 

premature deaths, among other benefits." 

Response 12: The EPA agrees that it is important to estimate all of the benefits associated with 

implementation of the alternative options for the Clean Power Plan, including benefits from 

reductions in CO2 emissions and co-benefits from reductions in emissions of NOx, SO2, and 

directly emitted PM2.5. As we did in the RIA for the proposed rule, we estimate the health 

benefits from improvements in air quality resulting from the Clean Power Plan, which includes 

reductions in mortality and morbidity associated with ambient concentrations of ozone and 

PM2.5. We agree that these benefits are substantial and are an important component of the 

overall monetized benefits of the proposed rule. 

Comment 13: Ecosystem Effects and Non-criteria Pollutants 

Commenters in this summary discussed the benefits of the rule on environmental quality and how 

this will help the health of the public and the environment.
126 

Commenters stated that the reduction of coal ash waste disposal is a major side benefit of the 

proposed rule and that this action will reduce the toxicity of citizens' land, air, and water over 

and above smokestack emissions reductions. 

Commenters also stated that coal burning power plants are the major source of atmospheric 

mercury pollution in the State of Montana and through the deposition of mercury to land and 

water surfaces this lead to contamination of local fish and aquatic ecosystems. 

Commenters also stated "The rule would also provide several benefits that the researches did not 

quantify, such as reducing asthma symptoms, preventing unquantified damage to ecosystems and 

agriculture, and reducing the accumulation of toxic mercury in fish. The agency quantifies and 

monetizes only a portion of the CPP's non-climate-related health benefits, but they are still 

massive." "For all these reasons, we strongly support the CPP." 

Commenters also stated that acid rain is caused by burning of sulfur-bearing coal. 

Commenters stated that they support wind energy as a practice to reduce emissions of nitrogen 

oxide, mercury, and sulfur oxide, and conserve water. The commenters said that 11 states had 

already achieved a 10% reduction in carbon emissions using wind energy. 

Commenters stated that federal and state governments make the assumption that most poisons, 

including those in ambient air, are harmless below a certain threshold concentration, and the 

public policy task is to find that threshold and keep the poisonous substance below it. The 

commenters said that this precept has been shown to be false by a wealth of more recent studies 

that show that the principal fossil fuel pollutants (lead, mercury, fine particulates, and ozone) 

harm human health at every level of concentration. The commenters cited a survey of recent 

research by the WHO which concluded that "new epidemiological studies, conducted over the 

last decade, using sensitive designs and methods of analysis, have identified adverse health 

effects caused by combustion-derived air pollution even at the low ambient concentrations that 

now generally prevail in cities in North America and western Europe" (Health Effects Institute 

2001). The commenters added that many studies show that these pollutants not only cause 

significant damage at very low concentrations, but that the damage is proportionally the greatest 

(on a parts per billion basis) at the lowest concentrations. The commenters described in detail 

the effects of lead and mercury, sourced by coal-fired power plants, on public health. 

Commenters stated that curtailing burning of coal as rapidly as possible is the best for 

humankind. The commenters said that coal mining results in miner's death and illnesses, and air 

pollutants from burning coal cause or contribute to asthma and other respiratory illnesses. The 

commenters said that mercury from burning coal has resulted in almost all areas in the U.S. 

having fish with mercury levels that make it unsafe for at-risk populations to consume more than 

a limited amount of many fish species. The commenters also said that coal ash ponds create a 

tremendous risk to people and their rivers, as already demonstrated more than once in the 

Southeast, and added that coal ash contains a witch’s brew of toxic heavy metals and arsenic 

which appears to be responsible for cancer around coal facilities. 

Commenters stated that CDC conceded in 2012 that there is no blood lead level that is small 

enough to be considered "safe", and that as a result CDC cut its tolerance level for blood-level 
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lead from 10.0 ug/dL to 5.0 ug/dL. The commenters said that even a level of 5.0 ug/dL is 25 

times too high, according to the most recent research. The commenters cited a study that found 

that the I.Q. of Italian teenagers is reduced in proportion to their lead exposure, no matter how 

small their lead exposure is. The commenters added the study demonstrated that every 0.19 

micrograms per deciliter in an adolescent's blood is accompanied by a one-point reduction in 

his/her I.Q. The commenters said the study results imply that the I.Q. of preschoolers in the 

United States has been reduced by 7 points, on average, due to their exposure to lead pollution 

(average in U.S. is 1.3ug/dL). The commenters said that lead exposure has three main sources: 

lead paint, leaded gasoline, and coal-fired power plants; and since exposure to paint and gasoline 

is mostly under control, coal-burning power plants are the primary sources. The commenters 

said that the harm to public health from lead pollution from coal-fired power plants is modest 

compared to the harm caused by mercury pollution. 

Commenters stated that coal-fired power plants are the largest environmental source of mercury 

in the U.S. (65%). The commenters said a typical coal-fired power plant without modern 

pollution controls emits 170 pounds of mercury each year, and that in 2009, coal-fired power 

plants in the U.S. injected 134,365 pounds (more than 67 tons) of mercury into the environment. 

The commenters said that 90% of this mercury could have been removed by using activated 

carbon injection (ACI) technology combined with bag-houses, but that as of 2011, only 8% of 

coal-fired power plants were equipped with this technology. The commenters said that according 

to WHO, exposure to methylmercury damages not just the nervous system, but the digestive, 

respiratory, and immune systems as well. The commenters said that in 47 of the 50 states, wild 

fish cannot be eaten because their methyl mercury exceeds safe levels. The commenters also said 

the estimated safe blood level of a mother bearing a child is 0.58ug/dL, and stated that the 

neurotoxicity of methylmercury is much higher than that of lead, therefore, the definition of a 

safe blood level of methylmercury (if there were one) should be well below that of lead 

(0.5ug/dL). 

Commenters stated that renewable resources and energy efficiency also protect water quality and 

save water. The commenters said that renewable resources like solar PV and wind turbines 

operate using no water, unlike steam cycle thermal power plants such as fossil and nuclear 

plants. The commenters said that renewable resources and efficiency also eliminate the many 

risks to public health and the environment posed by fossil and nuclear plants, including 

contamination of ground and surface water by coal ash pits, catastrophic failure of coal ash dams 

and nuclear plants, thermal discharges (i.e., heat pollution) by plants that lack closed-loop 

cooling systems, discharges of pollutants to surface waters, and loss of fish and other aquatic life 

that are impinged and entrained in power plant cooling systems. 

Commenters stated that fossil fuel power plants, particularly those fueled by coal, are one of the 

chief sources of toxic and other pollutants into our waters and air. The commenters said that 

these other pollutants have immense impacts on wildlife, killing and poisoning fish and other 

species, reducing the enjoyment of wildlife-related outdoor activities, and making fish in many 

lakes, streams and rivers unsafe to eat. The commenters said that the CPP promises to make our 

air and waters cleaner, our wildlife healthier, and help allow us to enjoy wildlife-based activities 

with less pollution and health risks. The commenters added that an even stronger final plan will 
128 

have greater additional benefits for wildlife and human health by further reducing dangerous 

pollutants associated with fossil fuel-derived electric generation. 

Commenters stated that the proposed rule can reduce mercury and water pollution. The 

commenters said that pollutants such as mercury, arsenic, chromium and nickel, reach the 

environment as a result of coal-fired power generation processes (atmospheric deposition and 

direct discharge). Commenters said that cleaner power sources, especially renewables, do not 

pose waste disposal problems, in comparison to the fossil fuel power plants, which contribute 50-

60% of all toxic pollutants discharged in the nation's surface waters. Commenters said EPA 

estimates that the CPP will remove 3,400 to 4,200 pounds of mercury from the environment, and 

stated that a quicker transition to clean energy would remove even more mercury and make fish 

safer to eat. 

Commenters stated that the rule will be protecting wildlife from water intake systems used 

during fossil fuel power generation. The commenters said that process results in mortality of 

aquatic life, including threatened and endangered species. The commenters said that by spurring 

the transition to a clean energy economy, the CPP will help reduce the need for these cooling 

water intake systems and thus reduce wildlife casualties. 

Commenters also stated that the rule will help reduce acid rain, mostly formed by sulfur dioxide 

and nitrogen oxides emissions from coal plants. The commenters said that EPA estimates that 

CPP will remove between 424,000 to 471,000 tons of sulfur dioxide and 407,000 to 428,000 ton 

of nitrogen oxides, which will mean less acid rain in the streams and lakes downwind of power 

plants. The commenters said that a strengthened rule will achieve even further reductions of 

these many harmful pollutants associated with fossil fuel power plant electricity generation. 

Commenters stated that different air pollutants (sulfur dioxide, nitrogen oxide, mercury, lead and 

particulate matter) as a result of burning coal have significant effects on human and 

environmental health. The commenters said that toxic level of acid deposition are inflicting 

damage on trees and aquatic life, and stated that EPA need to fulfill its mission to protect our 

environment and significantly slow and reduce the amount of coal being burned, and restrict its 

use as an energy source. 

Commenters stated that the CPP will result in reducing not only CO2 but also other harmful 

pollutants, including sulfur dioxide, nitrogen oxides and particulate matter. The commenters said 

that these "co-benefits" are projected to include the reduction of hundreds of thousands of tons of 

non-CO2 pollutants, benefiting public health invaluably and improving the air quality in our 

national parks and wilderness areas. The commenters said that there are extensive studies 

identifying specific national parks, species and ecosystems impacted by pollutants released by 

coal burning power plants. The commenters added that as EPA moves to finalize the CPP we 

strongly support the agency taking into account the co-benefits that CO2 reductions will have on 

our national parks and the Appalachian Mountains. 

Commenters stated that EPA is not protecting the health of the Deni people, the Hopi people and 

the ecosystems that they depend on. Commenters stated that, when you're looking at climate 

change the impact is going to be on the frontline communities, and those are the people that live 
129 

right there. Commenters stated that a lot of studies coming out look at the cost benefits, but are 

not looking at the health of the communities and the ecosystems. 

Response 13: The EPA agrees that there are environmental effects from various aspects of 

electricity generation, including fossil fuel extraction, transportation, combustion, and waste 

management. These effects reach different mediums, including air, water, and land and impact 

human health and ecosystem health. The EPA agrees that reducing CO2 emissions from the 

power sector under the Clean Power Plan proposal would provide both human health and 

ecosystem health co-benefits by reducing non-CO2 environmental risks, including risks 

associated with mercury and acid rain. Consistent with OMB (OMB, 2003) and EPA guidance 

(U.S. EPA, 2010) the EPA estimates all of the anticipated costs and benefits associated with a 

regulatory action, to the extent feasible, for the purpose of determining the likely impacts. We 

also include a list of unquantified benefit categories in the RIA of Clean Power Plan proposal 

which identifies reductions in exposure to methyl mercury and related health and environmental 

effects, reductions in other air toxics exposures, improved visibility in parks and urban areas, 

reductions in acid and toxics deposition and associated environmental damages, and reduction in 

nutrient enrichment as important unquantified benefits of the Clean Power Plan proposal. 

U.S. Office of Management and Budget. Circular A-4. September 17, 2003. 

U.S EPA 2010. Guidelines for Preparing Economic Analyses. EPA 240-R-10-001. December. 

Available at: http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html 

Comment 14: Other 

Commenters in this summary discussed the role of power plants on impacts to public health.

Commenters stated that we are treating the electricity industry very different to the way we treat 

other industries in America. The commenters said that for some reason it seems to be a hurdle in 

the public's mind that we could force a public health and safety upgrade during the life of a plant, 

when the usual practice is take action not only to protect health and safety of the public, but also 

to mitigate the costs associated with that issue. 

Commenters stated that we cannot simply replace coal with natural gas, or replace coal burned in 

dirtier plants with that same coal burned in slightly cleaner plants, without considering the 

climate change and public health costs of the full production cycle of these fuels, not simply the 

cost of their combustion. 

Commenters stated that EPA needs to make sure these carbon rules are as stringent as possible to 

offer much needed relief to people living within the dirty coal cycle like my community. 

Commenters cited in southwestern Pennsylvania many coal field areas are exploding with shale 

gas extraction, so without a plan that focuses on renewables, these same communities will see 

shale gas drilling increase even more as power plants convert to gas. Commenters stated this 

will not alleviate the negative health impacts already seen from the coal cycle, because the gas 

extraction has serious health impacts as well in massive methane emissions that would increase 
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climate change damages. Commenters closed, stating that these new regulations will create 

significant changes to front line communities, and the EPA is responsible for making sure the 

regulations are just and equitable. 

Commenters cited a study called ARIES, conducted by EPRI, that showed a direct correlation 

between high pollutant concentrations and emergency health department visits and mortality. 

The commenters stated that even though there is evidence, the power companies are not required 

to pay the hospital, the insurance companies, or the patients for the billions of dollars of costs 

caused by their emissions. 

Commenters stated that although carbon doesn't directly cause health effects, its potency as a 

greenhouse gas traps other pollutants (e.g., mercury, arsenic, lead, dioxins) that come from 

power plants. 

Response 14: The EPA agrees that there are additional impacts from various aspects of 

electricity generation, including fossil fuel extraction, transportation, combustion, and waste 

management. These effects reach different mediums, including air, water, and land and impact 

human health and ecosystem health. The EPA has quantified the co-benefits from reductions in 

other non-CO2 air pollution emissions, but agrees that there are other important beneficial 

impacts of the proposed rule which we were not able to quantify. The proposed Clean Power 

Plan uses the EPA’s Clean Air Act authority to address power sector CO2 emissions. While 

EPA did not directly address these other unquantified effects in the proposal, there may be also 

other laws, regulations, and voluntary programs at the federal, state, and local level that address 

these additional effects. EPA’s analysis of the emissions impacts and benefits of the proposed 

Clean Power Plan evaluated the full power sector impacts of the rule, which includes changes in 

fuels, changes in levels of power generation, and use of renewable and traditional fossil fuels, not 

just the impacts of emissions control devices. 

Comment 15: Concerns about EPA air quality co-benefit estimates

Commenters stated that EPA is trying to conflate addressing CO2 emissions with addressing air 

pollution in its proposed rule. The commenters said that messages such as the President's 

statements that by addressing "dangerous carbon pollution," this rule will also "cut down 

on...smog, and soot that threaten the health of the most vulnerable Americans" and "In just the 

first year that these standards go into effect, up to 100,000 asthma attacks and 2,100 heart attacks 

will be avoided" are causing public confusion, and making the public believe that CO2 emissions 

are somehow linked with asthma and heart disease when they are not. 

Commenters stated that EPA should carefully consider whether the benefits are worth the costs 

of the proposed rule. The commenters added that the current course of CO2 emission reductions 

will likely produce similar positive results as would the proposed regulations over the same time 

as technology improves and replacement capacity comes on line. 
131 

Commenters argued the opposition statements of the fossil fuel industry towards the rule (i.e., 

energy cost increases and job losses), and questioned the costs of estimated effects of climate 

change, and health impacts, including job loss productivity and death as consequence of inaction. 

Commenters stated that scenarios that assume lower discount rates for costs and/or benefits, 

show costs for the proposed regulation exceed the climate benefits for the U.S., and climate 

benefits exceed the costs of the rule only if climate benefits are added for the non-U.S. world 

population. (For a response to this comment, please see 8.7.2, comment 7 for information about 

the selection of discount rates applied to the SC-CO2. The response to 8.7.2, comment 3, 

addresses why EPA uses a global rather than domestic SC-CO2. 

The commenters said that positive net benefits for the rule depend on the large estimated criteria 

pollutant co-benefits and that the proposed regulation would show negative net benefits if criteria 

pollutant co-benefits were not included. The commenters also said that criteria pollutant cobenefits account for more than 90% of U.S. benefits, with PM2.5 accounting for 95% of cobenefits and ozone 5%. The commenters said that avoided mortality accounts for 98% of cobenefits and morbidity 2%. 

Commenters stated concerns with the EPA's statement "At this time, we don't have any estimates 

regarding the benefits and costs of this action, but we do expect it to be a significant regulatory 

action with annual effects on the economy exceeding $100 million." The commenters noted 

that EPA projects that net climate and health benefits are $48 billion to $82 billion by 2030. The 

commenters said that in the overview, the benefits climb to $55 billion to $93 billion in 2030, 

including avoiding 2,700 to 6,600 deaths and 140,000 to 150,000 asthma attacks in children. The 

commenters stated these numbers are important to consider because the nation deserves a 

credible approach that yields tangible results, and as taxpayers, people deserve justification of 

the financial costs and claimed benefits of the rule. The commenters noted that EPA has 

highlighted the dramatic improvements in air quality over the past 30 years to support using this 

action to reduce climate attacks and fatalities despite the increase in population, the state of the 

economy, and vehicle miles traveled. 

Response 15: The actions taken by states and emissions sources to meet the Clean Power Plan 

requirements will have broad impacts on both CO2 and co-emissions of many other pollutants, 

including SO2, NOx, fine particles, and mercury. Following best economic practices and 

consistent with many previous rulemakings, EPA has appropriately included both the direct 

benefits of CO2 reductions through reductions in climate impacts, and the co-benefits of 

reductions in ambient concentrations of PM2.5 and ozone. Consistent with OMB (OMB, 2003) 

and EPA guidance (U.S. EPA, 2010a) the EPA estimates all of the anticipated costs and benefits 

associated with a regulatory action, to the extent feasible, for the purpose of determining the 

likely impacts. Further, the EPA’s methods for quantifying the human health benefits of 

emissions reductions are based on the best available peer-reviewed science and methods that 

have withstood scrutiny from the EPA’s independent Science Advisory Board (SAB), the 

National Academy of Sciences (NRC, 2002), and continuous interagency review. 

Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. 

Washington, DC. Available on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a4.html. 
132 

U.S. Environmental Protection Agency (U.S. EPA). 2010a. Guidelines for Preparing Economic 

Analyses. EPA 240-R-10-001. National Center for Environmental Economics, Office of Policy 

Economics and Innovation. Washington, DC. December. Available on the Internet at 

<http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0568-50.pdf/$file/EE-0568- 50.pdf>. 

National Research Council (NRC). 2002. Estimating the Public Health Benefits of Proposed Air 

Pollution Regulations. Washington, DC: The National Academies Press. Washington, DC. 

8.9 RELIABLE AFFORDABLE ELECTRICITY 

Comment 1: Commenters discuss FERC response to CPP. 

Commenters cited FERC's criticism of the rule with regard to reliability. The commenters said 

FERC can and should help the EPA understand the implications that such regulations may have 

on electric reliability and support utility compliance with those regulations where necessary and 

to the extent possible. The commenters said it speaks volumes about EPA's proposal when the 

leadership of the executive agency currently charged with developing and implementing national 

energy policy expresses such grave concerns about the Proposed Rule. 

Response 1: FERC staff and Commissioners have been very helpful to EPA as EPA has 

developed the final rule. EPA staff and managers have met with FERC staff and all of the 

Commissioners to get advice regarding the CPP. In addition FERC held several Technical 

Conferences about reliability and the CPP and EPA management participated in all of them. 

EPA is very grateful to FERC for their engagement in developing the final rule. 

Comment 2: Commenters stated that coal use has benefits for reliability. 

Commenters stated that coal has been the anchor for generation when drought reduced 

hydropower output, fuel oil prices became subject to extreme volatility, natural gas was feared to 

be in short supply, and more recently, when Mother Nature does not cooperate with intermittent 

renewable sources. The commenters stated that as coal-fired generation has increased 158 

percent since 1970, there has been a 91 percent reduction in sulfur dioxide emission, 84 percent 

reduction in nitrogen oxide, and 89 percent reduction in particulate matter. The commenters 

stated that the EPA's proposed regulations will drastically limit the options utilities have to 

provide low-cost and reliable power, with dire consequences for our nation's electric grid, 

consumers, and the U.S. economy. 

Commenters stated that the interpretation of BSER is problematic because it is sufficiently broad 

to include actions and restrictions that go beyond the fence line of existing power plants and may 

vary widely from state to state. The commenters stated that the proposed rule for existing power 

plants will force coal-fired units to retire because the installation of controls such as carboncapture systems to reduce emissions is not viable, and the incentives in these proposed rules to 
133 

eliminate coal-fired units will disrupt current energy grid reliability and will significantly 

increase energy costs for U.S. manufacturing operations. 

Commenters stated that residential rates are projected to increase by 20 percent to 36 percent as a 

result of the Clean Power Plan and industrial rates are expected to increase 22 percent. The 

commenters stated that preliminary modeling demonstrates that the rule would leave Utah's 

electric reliability jurisdiction only 0.53 percent above the region's 15 percent target for reserve 

margin, which means that adequate supply would tighten dramatically. 

Commenters operated 4,890 miles of distribution line in three retail transmission organizations 

("RTOs"). The commenters operated on the seam across ERCOT, MISO and SPP. The 

commenters stated that many companies operate and coordinate with multiple RTOs. However, 

the commenters noted that most companies serve more than 4 meters per mile. The commenters 

stated that due to the low density of consumers and the geographic location relative to multiple 

RTO's, there has been minimal transmission investment in the commenters' service area. The 

commenters further stated that the proposed dispatch of combine cycle gas units and running gas 

units at a higher capacity factor only works if the transmission infrastructure supports the 

delivery of electricity from the units, and the commenters noted that the transmission 

infrastructure supplying power to their area cannot support the aggressive targets outlined in the 

Clean Power Plan. Commenters added our reliability will suffer. 

Commenters indicated that the Clean Power Plan can potentially raise our electrical rates by as 

much as 30%. Commenters stated a 30% increase in electrical power cost would have a 

significant impact on the rates we charge our customers, both residential and industrial. 

Commenters stated that according to the Energy Information Administration, in 2010, nearly 48 

percent of Illinois' electricity came from nuclear power while 47% of the state's electric power 

was generated by coal. The commenters noted that the second targeted block of the Clean Power 

Plan relies on moving to increased use of existing natural gas fired power plants. The 

commenters stated that since Illinois' energy portfolio includes a limited amount of natural gas 

fired generation, this requirement would jeopardize our state's ability to meet the requirement, 

and compliance would be extremely expensive leading to significant increases in cost and 

decreases in reliability for energy customers. 

Commenters first cited the following (three) estimates of the Clean Power Plan's impact on the 

cost of energy supplies in the United States: (1) The US Department of Energy estimates that the 

EPA's Clean Power Plan could close several hundred coal-based electricity plants across the 

country leading to electricity price spike estimated to reach up to $2,000/Mwh in some parts of 

the country (Electricity Grid Reliability: Close to the Edge. National Mining Association, 2014); 

(2) Reduction in generation capacity due to closure of coal fueled EGU's could lead to natural 

gas prices to increase from $5 per million Btu to $123 per million Btu (NMA 2014); (3) 

Wholesale electricity prices will increase 27%-55% across the nation with the closure of power 

plants over the next two years (NMA 2014). The commenters stated that the combination of 

significantly increased energy costs, increasing energy demand from an expanding population 

and lack of transmission capacity would place a sustainable strain on our nation's power grid in 

the years to come, likely leading to prolonged brown-outs across the country. The commenters 

also stated that the consequences of these "blank spots" in our electricity supply would not only 
134 

create immediate problems such as loss of power to our homes, businesses, hospitals etc., but 

also cause great uncertainty for business looking to invest in expansion and improvements of 

their operation. 

Commenters stated that compliance with the proposed emissions guidelines would likely raise 

serious concerns with the electric system reliability due to the shutdown of coal-fired generating 

units in the state. Commenters stated that replacement of coal generation with another type of 

generation (such as natural gas combined cycle), possibly at a different location, could result in 

potential outages or voltage collapse since Florida's transmission system was not designed and 

built to accommodate these types of drastic changes. Commenters stated that if, for example, 

many coal units are forced to retire and the replacement power has to come through Central 

Florida, this could create serious issues and hardship for us as our transmission system is very 

sensitive to generation dispatch pattern outside of our territory. 

Commenters stated that rapid early retirement of coal units in the region could lead to thermal 

overloads, low voltage and collapsed voltage on the transmission system. Commenters stated that 

for potential impacts of the Proposal on reliability, please see the comments of the North 

American Electric Reliability Corporation (NERC) and MISO. Commenters stated that the 

EPA's reliability assessment fails to adequately address regional concerns and the need to keep 

units operational until suitable base load capable replacements can be brought on line or 

transmission mitigation projects can be implemented. 

Commenters stated that EPA fails to consider the competitive impacts of its Proposed Rule. 

Commenters stated that many utilities have a far greater dependence on coal-fired plants than 

natural gas plants. Commenters stated that utilities that would be required to prematurely close 

viable coal plants with years of remaining operating life, and given the limited time period for redispatch, would be forced to purchase energy from other utilities. Commenters stated that 

ratepayers of such utilities would lose the use and benefit of investments made in capital 

intensive coal plants and, be forced to pay for new transmission lines and pipelines to other 

utilities to buy electricity from gas generation plants they do not own while paying down the debt 

on their own stranded investments as they sit idle. 

Commenters stated that recent extreme weather resulted in a loss of 22% of generation capacity 

(including 13,700 MW of coal generation) and severely stressed PJM reserve 

capability. Commenters stated that it is noteworthy that coal generation has the ability to store 

backup supply on site whereas gas-fired generation does not have onsite storage capability which 

led to at least some of the reliability issues. 

Commenters stated that they have concerns over the impacts of BB1 on the remaining PJM coal 

generation and the threats it poses to future reliability. Commenters stated that the import of the 

EPA BB1 proposal will be the inevitable premature retirement of coal generation facilities, 

including facilities wherein significant environmental compliance investment has already 

occurred with the simultaneous reduction in both generation portfolio diversity and system 

reliability. 

Commenters stated that in the face of the complexity of addressing nationwide reliability, the 

Proposal wrongly presumes that an air regulator in any given state can impose controls on its 
135 

state's piece of the BES that will dramatically reduce its emission levels in 2020, without 

impairing or damaging the system's ability to remain within all these other critical constraints. 

Commenters stated that ignoring or inadequately evaluating these system constraints can cause 

significant long-run problems. Commenters stated that this is because a big enough short-run 

impact, e.g., re-dispatch or displacement of sufficient energy production from existing coal 

plants, will render them uneconomic to keep operating. Commenters stated that IPM modeling 

demonstrates that a price on carbon or administrative control that is stringent enough to achieve 

the emission reductions required by the Proposal's interim goals and ten-year-averaging 

constraint would also render a significant number of coal plants uneconomic to operate at the 

very start of the 2020 compliance period - practically overnight, especially in light of the 

uncertain legal challenges the Proposal faces. Commenters stated that substantially more plants 

than these modeling exercises indicate may retire due to the rule. Commenters stated that while 

both regulated and merchant plants are at risk, rapid retirement is particularly likely for the 42% 

of the country's generation fleet comprised of merchant generating units that depend on market 

revenues for covering operating costs. 

Response 2: EPA disagrees with these comments. While EPA recognizes that there will be 

impacts from this rule, EPA believes these comments to be seriously overstated. EPA has 

conducted a thorough analysis to the impact of the rule and has concluded that the impact on 

generation changes and costs will be modest. For details of this analysis, see Chapter 3 of the 

Regulatory Impact Analysis. EPA also believes that concerns about reliability are misplaced, 

because reliability has been carefully considered in the development of the rule, through flexible 

provisions and through being built into the state planning process; in the unlikely event that the 

rules will lead to further impacts under well-designed state plans, EPA has provided a Reliability 

Safety Valve mechanism that ensures reliability can be maintained. 

Comment 3: Commenters discussed the function of Intercompany Interchange Contract. 

Commenters discussed the function of the Intercompany Interchange Contract in allowing 

member companies to provide reliable affordable electricity and stated that if member companies 

must alter their operations to meet the proposed rule, they will not be able to achieve 

expectations of member companies under the IIC. The commenters posited that if IIC 

expectations are not met, each member company will have to take independent actions that they 

deem necessary in order to protect themselves accordingly and the IIC membership would be 

diminished, if not eliminated altogether. 

Response 3: EPA does not believe that the Intercompany Interchange Contract, or any similar 

provisions for coordination of operations among utility operating companies, will be diminished 

by this rule. The rule provides for flexible state implementation, and does not prescribe the 

methods that states must use to ensure compliance, not does it limit that ability of states to work 

with neighboring states to ensure efficient implementation. The rule permits continued 

operations through current approaches, such as security constrained economic dispatch and 

reserve sharing agreements, and there is no reason to believe these will not continue. Multi-state 

companies have a long history of working successfully to continue to coordinate the load and 
136 

generation functions of their operating companies, while continuing to comply with both 

environmental and state PUC regulation. Nothing in this rule will impede continued success. 

Comment 4: EPA should work with DOE to ensure grid reliability. 

Commenters stated that EPA and the United States must ensure that DOE uses its statutory 

authority to make sure that EPA rules don't endanger grid reliability. The commenters also 

supported tax incentives for efficiency upgrades at existing plants. The commenters stated that 

the current rules prohibiting advanced fossil fuel programs from receiving federal grants and 

loan guarantees need to be removed along with the regulatory impediments that delay or 

discourage efficiency projects. 

Response 4: The EPA will be working closely with DOE to monitor implementation of the final 

Clean Power Plan, as we have in the past. In addition DOE has agreed to provide technical 

assistance to states and tribes to help them develop state and regional plans. DOE’s expertise will 

be a valuable asset in this process. EPA recommends that the commenters posed additional 

comments to the agencies that can address them. 

Comment 5: Commenters stated that the CPP does not provide enough time to implement cost 

effectively and described consequences of tight deadlines for interim and final compliance. 

Commenters stated that the proposed rule does not provide enough time to implement the most 

cost effective solutions. 

Commenters noted "concerns regarding the need for additional time to mitigate the impacts of 

the carbon regulation. The proposed timeline does not provide enough time to develop sufficient 

resources to ensure continued reliable operation of the electric grid by 2020. To attempt to do so 

would increase the use of controlled load shedding and potential for wide-scale, uncontrolled 

outages." 

Commenters stated that the investments required to transform its fleet to meet the proposed 

standard may cost $7 billion in capital investments, which it will seek to recover through electric 

rate increases. The commenters recommended that EPA consider comments related to the 

aggressive timeframe and its potential impacts on electricity prices and develop a more workable 

timeline that minimizes unreasonable impacts on electricity prices. 

Commenters stated that increasing utility rates to pay for the CSAPR regulation alone will have a 

devastating effect on OUC customers and the Central Florida economy, and that the impacts of 

the Clean Power Plan and UMACT exacerbate these impacts. The commenters stated that its 

position is not to challenge the Rule, but to demonstrate the need for more time to reach the 

emission requirements identified. 

Commenters stated that the EPA completely fails to analyze the regulatory, time, and cost 

impacts triggered by Building Blocks Two and Three, which would require major changes to the 
137 

regional energy market, involving more infrastructure, including pipelines and transmission 

lines. The commenters stated that transmission line construction involves negotiations with 

landowners for easements and possible eminent domain proceedings, in addition to permitting 

and engineering, which would add significant time and costs to the timeline and implementation 

of the Proposed Rule. 

Commenters stated that any compliance costs borne by ratepayers through higher rates will be 

magnified if utilities do not have sufficient lead time for the development of new or increased 

demand side programs, construction of new generation, and/or extensive upgrades to existing 

coal-fired generation. The commenters stated that compliance timelines must not prevent state 

regulators from having an adequate opportunity to review utility compliance plans to assure that 

ratepayers are being provided reliable service at the lowest reasonable cost. The commenters 

stated that compliance timelines must take into account the impact of rate increases that can 

result as utilities seek recovery from customers. 

Commenters stated that electric utilities need more time to build replacement generation and 

make significant investments in transmission and other mitigation to maintain reliability. The 

commenters recalled when our overall environment was nowhere near the quality we have now, 

and the soot in the air represented progress. The commenters also recalled that back then, 

thoughts of the long term ramifications were not paramount, that we are now much smarter, and 

we have made great strides in cleaning up our emissions. However, the commenters noted that 

now is not the time to make these draconian demands on our country's energy infrastructure. The 

commenters stated that the loss of jobs, coupled with the drastic increases in electricity rates, will

create a huge burden on our citizens. Both commenters felt that we should strive to continue the 

technological advances that have already provided us with a much cleaner environment; 

however, arbitrary deadlines and unproven benefits will only harm our still fragile economy. 

Commenters stated that EPA assumed that all emission rate reductions from Building Blocks 1 

and 2 could be achieved at the start of the ten-year interim compliance period, thus for many 

states, almost all of the emission rate reductions that the Proposed Rule ultimately requires must 

be achieved in the first year of the ten-year interim compliance period. The commenters stated 

that Pennsylvania is left with little or no flexibility to determine a different compliance path to 

avoid the 2020 compliance cliff. The commenters stated that EPA intends to finalize the 

Proposed Rule in mid-2015, which means that the earliest state implementation plans would be 

approved by EPA is mid-2017. The commenters stated that this schedule leaves 2-and-a-half 

years for electric generating companies to achieve aggressive emission reductions and states to 

make sweeping changes to their existing regulations and electric generation, transmission, and 

distribution systems. The commenters stated that the proposed implementation schedule will 

force states to rely on coal unit closures to achieve compliance and the constricted timeline will 

prevent states from cushioning economic impacts from retirements. 

Commenters expressed the belief that the proposals in the Clean Power Plan would take more 

time to be implemented by Arkansas than allotted under the proposed rule. The commenters 

stated that we must be smart about how we make changes to our electricity sector, and rushing to 

meet arbitrary, self-imposed deadlines does not give states like Arkansas sufficient time to 

explore innovative ways to reduce its GHG emissions without requiring the closure of useful 

baseload power plants and the associated increase in electricity rates. 
138 

Commenters stated that in proposing the state emission rate goals and compliance periods, EPA 

did not assess the interconnected power system's reliability requirements, nor what effect the 

Building Blocks had on each other or on the bulk power system when simultaneously undertaken 

at the levels EPA proposed are achievable. Commenters stated that because the goals and 

compliance periods proposed do not reflect the reliability implications of the changes to the 

interconnected power system that will be required to implement the BSER Building Blocks, they 

do not fully depict the changes the system may have to implement (or the time that will take). 

Commenters stated that States need glide path flexibility to address concerns about price 

volatility, they also need flexibility to ensure on-going system reliability. Commenters stated that 

time will be needed to upgrade the electric transmission grid and natural gas distribution systems 

to accommodate a resource mix that meets Clean Power Plan targets. Commenters stated that 

these upgrades will require regional coordination and compliance with other federal laws 

designed to ensure reliability. 

Commenters stated that, according to the EPA's Regulatory Impact Assessment, generation 

capacity would be reduced by between 108 and 134 GW by 2020. Commenters stated that 

constructing suitable replacement generation resources to maintain adequate planning reserve 

margins would be a challenge given the constrained time frame that the states were given. 

Commenters stated that in addition, in order to accommodate the greater use of natural-gas fired 

generation, gas pipeline expansion would be necessary to maintain a reliable source of fuel, 

particularly during the peak winter heating season. Commenters stated that anticipated changes 

in resource mix and new dispatching protocols will necessitate comprehensive reliability 

assessments to identify changes in power flow and develop new operating procedures to 

maintain reliability. Commenters stated system operators and ISO/RTOs need to develop 

appropriate processes, tools, and operating practices to adequately address operational changes 

on the system. Commenters stated that more time must be given to understand the implications 

of the CPP and to accommodate reliability enhancements. 

Commenters stated that he proposed rule states that "the U.S. economy depends on this sector 

[electric energy] for a reliable supply of power at a reasonable cost." 79 Fed. Reg. at 

34,844. Commenters stated that the quick shift to natural gas, coupled with intermittent 

resources, puts that reliability at risk by failing to have sufficient time frames for transmission, 

generation, and gas infrastructure build-out. Commenters stated that it also threatens reliability 

by shifting away from coal to heavy reliance on gas without significant modeling and 

infrastructure build-out or planning which puts the grid at risk. Commenters stated that in order 

to maintain even minimal reliability, the rule pushes utilities and states to look beyond what may 

constitute "reasonable cost," to invest quickly in expensive transmission and natural gas 

infrastructure and the quick build-up on additional NGCC to meet peak, base load, voltage 

support, renewable support and dispatchable reserve resource demands. 

Commenters stated that the quick shift to natural gas, coupled with intermittent resources, puts 

that reliability at risk by failing to have sufficient time frames for transmission, generation, and 

gas infrastructure build-out. Commenters stated that it also threatens reliability by shifting away 

from coal to heavy reliance on gas without significant modeling and infrastructure build-out or 

planning which puts the grid at risk. Commenters stated that in order to maintain even minimal 

reliability, the rule pushes utilities and states to look beyond what may constitute "reasonable 
139 

cost," to invest quickly in expensive transmission and natural gas infrastructure and the quick 

build-up on additional NGCC to meet peak, base load, voltage support, renewable support and 

dispatchable reserve resource demands. 

Commenters stated that there is a profound disconnect between the early emission reductions 

that would be required under the Proposal and emission reduction trajectories that could be 

realistically achieved by states, without stranding assets needed for reliability. Commenters 

stated that these immediate results would destabilize and distort markets by driving the supply of 

power well below the levels needed by the BES to meet demand and ensure grid reliability. 

Commenters stated that the implementation of the proposed Clean Power Plan will have a 

significant impact on the planning and operation of the ERCOT grid. Commenters stated the 

proposed CO2 emissions limitations will result in significant retirement of coal generation 

capacity, could result in transmission reliability issues due to the loss of fossil fuel-fired 

generation resources in and around major urban centers, and will strain ERCOT's ability to 

integrate new intermittent renewable generation resources. 

Commenters stated that SPP's Assessment makes it very clear that new generation and 

transmission expansion will be necessary to maintain reliability during summer peak conditions 

if EPA's projected generator retirements occur. Commenters stated that even the scenario that 

assumes optimal resource expansion using new natural gas fired resources could be problematic 

during extreme winter load conditions with gas supply and delivery challenges "Unprecedented 

coordination and cooperation beyond regional planning efforts will be necessary." 

Commenters stated that compliance with the interim performance requirements will force actions 

to be taken by 2020. Commenters stated that MISO's initial analysis indicates that up to 25 

percent of the remaining coal capacity in MISO - which equates to 14 gigawatts - could 

potentially retire in order to comply with the proposed rule. Commenters stated that this impact 

is in addition to the 10 to 12 gigawatts of retirements expected due to MATS. Commenters stated 

that to avoid reliability and resource adequacy issues, retiring capacity will need to be replaced at 

the time it comes offline. Commenters stated that to comply with the interim performance 

requirements, a significant amount of retirements - approximately 11 gigawatts - would need to 

occur in the 2020 timeframe. Commenters stated that this is well before sufficient replacement 

capacity can be placed into service; new combined-cycle natural gas generation is the most 

probable option to replace retiring coal-fired plants and comply with the proposed rule. 

Commenters stated that the potential reliability impacts associated with the transition from the 

these traditional high-inertia resources (and related loss of essential reliability services such as 

frequency and voltage support) to other forms of generation need to be studied to ensure that 

proposed state compliance plans do not reduce the reliability of the BES. 

Commenters stated that this proposal raises reliability concerns. Commenters stated that the 

amount of down time that will be necessitated in order to make HRI upgrades in such a short 

amount of time is unknown due to this national averaging approach in lieu of unit-by-unit 

capabilities analysis. Commenters stated that obtaining NSR permits in some cases will take 

additional time, and there is just not enough time under this proposal, especially considering HRI 

improvements is the very building block U.S. EPA assumes can be achieved the quickest. 
140 

Commenters stated that based upon study results, retired generation identified due to the 

proposed EPA Plan will require system modifications. Commenters stated that additional 

requests for commenters to secure firm ATC may be required. Commenters stated that 

significant BPS modifications will likely result in system upgrades that potentially cannot be 

achieved based upon the time requirements proposed in the EPA's plan. Commenters stated that 

reliability assurance mechanisms should be in place to allow for sufficient planning and 

construction of projects for the most feasible options with compliance dates dependent upon 

system study results and requirements with projected in service dates and lead times. 

Commenters stated that each facility change should be evaluated on specific system 

identifications as listed in the NERC Report Potential Reliability Impacts of EPA's Proposed 

Clean Power Plan as guidance. 

Response 5: Numerous commenters have suggested that the time allowed states to develop state 

plans and to come into compliance with the interim deadline of 2020 was inadequate. Although 

the proposal provided flexibility in the timing with which emission reductions could be made 

over the course of the 2020-2029 period in order to achieve compliance with the emission 

limitations applicable to that interim period, many commenters perceived the start of the period 

as too soon and stated that it provided insufficient time for planning and investments necessary 

for sources to begin complying while maintaining reliable electricity supplies. The EPA has 

considered these comments and in the final rule has established an interim compliance period of 

2022-2029, providing two final rule’s requirements in an orderly manner while maintaining 

reliability of electricity supplies. See section VII.G.2 of the final preamble to the CPP for 

discussion of reliability issues. 

The final rule provides sufficient time to ensure system reliability and a phase-in that allows for 

additional time to complete potential infrastructure improvements (e.g., natural gas pipeline 

expansion or transmission improvements) that might be needed to support more use of existing 

natural gas-fired generation, and provides states with increased ability coordinate actions taken 

under building block additional years for planning and investment before the start of compliance. 

We are persuaded by comments and by our own further analysis that this timeframe is 

appropriate given the nature and magnitude of planning and investment activities that will be 

necessary to begin compliance with the actions taken under building block 3 (operation of new 

renewable capacity). Additionally, this phase-in increases the flexibility provided to states to 

address capital investment concerns regarding individual sources when scheduling compliance 

actions over the course of the interim and final periods. 

Comment 6: Commenters requested adjustable timing including safety valve. 

Commenters requested that EPA include a safety valve provision in the final rule that would 

include mechanisms to adjust timing and possibly state goals given extraordinary conditions that 

would affect the economy, public safety or reliability. 

Commenters stated that without certainty of the compliance timeline under the proposed rule, 

OMU must wait until the SIP is approved by EPA before finalizing compliance plans, but OMU 

must make definitive decisions regarding participation in the RPM market each May for a three-
141 

year forward obligation. The commenters stated that the loss of RPM revenues would require 

OMU to raise rates to its customers. The commenters stated that based upon the most recent 

clearing price of the RPM, where OMU to not participate, electric rates would have to rise by 7% 

to make up for the lost capacity revenues. The commenters stated that these adverse impacts 

could be significantly reduced were the final rule to eliminate the interim compliance date and 

allow OMU to work with the Division of Air Quality to implement compliance measures by 

2030. 

Commenters stated that if the flexibility measures in EPA's proposed rule prove unworkable, or 

are limited by judicial decisions, higher rate impacts could result. 

Commenters stated that the EPA should create an affordability safety valve mechanism within 

the final rule if cumulative rate increases exceed a certain threshold established in the rule. 

Multiple commenters discussed the time and effort needed to implement the proposed rule and 

meet reliability needs. 

Commenters stated that it is necessary that enough time, flexibility and support to invest, plan, 

permit, design and build what will be almost an entirely new infrastructure of power generation, 

transmission systems and CCS. The commenters also stated that it is absolutely vital that the 

emissions reduction be implemented in a manner that is balanced with the equally compelling 

needs for a reliable power supply, reasonable cost controls to protect consumers, development of 

an adequate generation capacity using zero-and low-emitting sources. 

Commenters remarked that that the grid is ill equipped to meet the expansion and connection 

needs as a result of the new renewable generation capacities needed to fulfill CPP obligations. 

The commenters stated that this infrastructure will require significant time to plan, permit, site, 

and construct. The commenters cited a recent renewable integration study that indicated the need 

for "at least $3.7 billion in transmission upgrades to support a 14% regional RPS, and this figure 

could reach $13.7 billion under higher penetration scenarios", in addition to the costs of 

implementing the CPP upgrades required to mitigate reliability impacts of coal unit retirements. 

Commenters cited NERC conclusions that "the proposed timeline does not provide enough time 

to develop sufficient resources to ensure continued reliable operation of the electric grid by 2020. 

To attempt to do so would increase the use of controlled load shedding and potential for widescale, uncontrolled outages." The commenters stated that EPA must consider reliability 

constraints in determining emission reductions achievable through the four building blocks to 

ensure that reliability concerns not addressed by ex post analysis employed for the CPP are truly 

addressed. 

Commenters stated that the proposed state goals and compliance period do not adequately 

account for the complexity of power grid operations or how the need to maintain reliability 

affects the pace and timing of implementing such changes. The commenters also stated that 

EPA's limited analysis focused primarily upon resource adequacy as measured by generation 

reserve margins and assumed that the state plan development process provides adequate 

opportunity to address other reliability issues. The commenters further stated that "while EPA 

does not have the expertise to assess fully the implications of the proposed guidelines on the 
142 

interconnected power system that does not mean that the Agency can ignore the complexity of 

the electric system when developing state-specific emission rate goals and compliance 

timelines." The commenters added that the reliability studies and information that EPA should 

use to assess the significant changes that will be required to achieve the interim and 2030 goals 

will not be available before EPA finalizes the proposed guidelines or even before states are 

required to submit compliance plans for EPA approval. The commenters stated that states, 

electric utilities, system operators and other regulators will need sufficient time to assess the 

changes that will be required to implement the state plans and will need the time required to 

make the system changes and develop the infrastructure needed to implement the state plans and 

maintain reliability and meet the 2030 goals. 

Commenters stated that state and regional plans must be approved by the EPA, which is 

anticipated to require up to one year, leaving as little as six months to two years to implement the 

approved plan. The commenters stated that areas that experience a large shift in their resource 

mix are expected to require transmission enhancements to maintain reliability, and that 

constructing the resource additions, as well as the expected transmission enhancements, may 

represent a significant reliability challenge given the constrained time period for 

implementation. 

Commenters stated that because of the long compliance period (12 years or more under the CPP 

to achieve the final 2030 compliance deadline) and range of resources available to achieve 

compliance, states and grid operators will have sufficient time to identify and avoid reliability 

issues associated with the CPP. The commenters stated that States can scale up energy 

efficiency, coal-to-gas conversions and re-dispatch, and other actions achievable in the next five 

years, and that states and grid operators can begin the process of identifying longer lead-time 

resources such as new transmission needed for expansion of wind and solar power. 

Commenters stated concerns with the time constraints associated with proposed rule given the 

time needed to make complicated bulk power system decisions, complete research needed to 

clarify the regional and national impacts the CPP may have on the generation mix, infrastructure 

needs, and electric reliability, and complete the proposal, acceptance, planning, investment and 

implementation process for SIPs. The commenters stated that although it is possible to achieve 

environmental goals and keep our power supply diverse, reliable, and inexpensive, the current 

EPA proposal will not achieve these goals. 

Commenters stated that EPA has not taken into account the time needed to construct renewable 

energy, transmission infrastructure and reliability enhancements needed. Commenters added that 

high voltage lines can take five to 15 years depending on the voltage class to construct and stated 

that EPA must consider reliability concerns and the timeline associated with ensuring reliability. 

Commenters added that the siting process can include real estate negotiations, environmental 

permitting, public opposition, and regulatory approval from various entities that can be costly 

and take up to three years for simple projects or up to ten years for complicated projects where 

large energy projects can affect federal, state, tribal, and private lands simultaneously. 

Commenters stated that integration of large amounts of renewables must be done over a 

reasonable time period to preserve grid reliability. The commenters added that EPA proposal 

gives no consideration to the price and price policy implications which arise from the adoption of 
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renewable energy goals, such as the fate of price containment policies in which states pay new 

renewable generation at lower rates when certain goals are achieved. 

Commenters stated the Proposed Rule does not provide companies sufficient time to evaluate 

potential compliance options and, if necessary, construct new generating resources and 

transmission facilities. The commenters further stated to ensure grid stability and reliability, EPA 

must provide electric generation companies with sufficient time to evaluate and implement 

potential compliance options. 

Commenters stated timelines must provide sufficient time and flexibility to maintain the integrity 

and reliability of the existing electrical system given the following: 

• it is anticipated that the nation's utilities will have to retrofit existing generation 

plants, close older coal-fired electric generation plants and develop new supply 

and/or demand-side resources over the next three to five years; 

• the goal of state ratemaking, integrated resource planning and other regulatory 

proceedings will be to determine the most cost-effective means to comply with 

the EPA regulations and to determine the just and reasonable costs of any supply 

side and demand side resources to replace the capacity and energy currently 

supplied by older coal-fired generation plants; 

• the development of demand-side resources, building new generation and/or 

making extensive upgrades to existing coal plants requires adequate lead time for 

engineering, procurement, construction and regulatory review; 

• utility ratepayers in many states are already facing substantial rate increases due 

to a variety of factors, in addition to any costs related to complying with the EPA 

regulations; 

• any compliance costs borne by ratepayers through higher rates will be magnified 

if utilities do not have sufficient lead time for the development of new or 

increased demand side programs, construction of new generation, and/or 

extensive upgrades to existing coal-fired generation; 

• compliance timelines that do not account for supply chain constraints could 

unnecessarily raise prices; and 

• compliance timelines must not prevent state regulators from having an adequate 

opportunity to review utility compliance plans to assure that ratepayers are being 

provided reliable service at the lowest reasonable cost. 

Commenters stated while natural gas, nuclear alternative, and renewable electricity generation 

have become a much more important part of the fuel mix over the last several decades, and are 

certainly capable of increasing their contributions to the grid, developing additional capacity 

from these sources and the necessary infrastructure to realize these expansions will take time and 

likely come with significant costs to consumers. 
144 

Commenters stated that studies of their actual regional grid have found that combinations of 

solar, wind and electro chemical storage can power the grid with up to 99.9 percent 

reliability. The commenters further stated that this measure alone won't reverse global warming, 

but it is a good step in the right direction, and by pushing the required renewable technologies 

now, the Unites States can gain a competitive advantage, true energy independence and 

substantially enhance national security. 

Commenters stated that the plan is about making the power supply as reliable and efficient as 

possible. The commenters stated further the Clean Power Plan will promote innovative ways to 

upgrade and invest in our electric grid and overall infrastructure. Commenters added that it's 

imperative that we make these investments to prevent infrastructure failures like the 2003 

blackout. 

Commenters stated the rule prolongs this addiction to coal at a time when alternatives are more 

reliable and affordable than ever. The commenters urged the EPA not to tie the future of our 

economy to a dirty and unreliable fuel, and instead keep the path clear for renewable energy and 

energy efficiency. 

Commenters stated that a key building block, reduce generation at coal-fired power plants and 

re-dispatch natural gas fired plants at a 70 percent capacity factor, makes assumptions regarding 

the availability and cost of natural gas fired generation to replace coal-fired generation. The 

commenters also questioned EPA's assumption regarding the availability of natural gas 

infrastructure in sufficient time to meet demand due to the proposed rule and EPA does not 

consider whether new pipelines or generating facilities can be operational by 2020. 

Commenters referenced NERC's reliability concerns raised in the November 2014 assessment of 

the proposed rule and that they support NERC's recommendation that a reliability back-stop or 

safety valve be implemented for reliability assurance. The commenters urged EPA to reconsider 

the targeted timeline of the proposed rule, consider the need for new natural gas infrastructure, 

and include flexibility for reliable operation of the electric system. 

Response 6: The final rule features overall flexibility, a long planning and implementation 

horizon, and the widest possible range of options for states and affected EGUs to achieve the 

CO2 emissions goal, and an opportunity to trade credits or allowances. This design reflects, 

among other things, the EPA’s commitment to ensuring that the final rule does not interfere with 

the industry’s ability to maintain the reliability of the nation’s electricity supply. Given this, it is 

highly unlikely that there will be a situation where an effected EGU cannot meet its requirements 

under a state plan. 

While some have pointed out severe weather or other short-term events as potentially conflicting 

with state plans, we note that most of those events are of short duration and would not require 

major adjustments to emission standards on affected EGUs or state plans. However, should such 

a situation develop the ability to use ERCs and allowances in effect provides a safety valve. 

EPA recognizes however that some states may choose to place inflexible requirements on 

individual plants as part of their state plans and not authorize the use of credits and allowances. 

Those states will be more vulnerable to an unanticipated catastrophic event that could create a 
145 

conflict that would interfere with reliability. To address this possibility, EPA is providing a 

safety valve in the nature of a short term modification to the state plan. See section VIII. G.2.e. 

of the final preamble to the CPP for more information. 

Comment 7: Commenters expressed reliability concerns relating to CPP. Multiple commenters 

noted that reliability is threatened by the rule. 

Commenters listed the following reliability concerns: "1) the loss of production from member 

company facilities due to supply shortages or transmission outages 2) the potential damage to 

equipment caused by unplanned outages, and 3) environmental releases caused from unplanned 

outages." 

Commenters stated, "The effects of EPA's policies will vary dramatically and hinge on a wide 

variety of issues including everything from existing power resources and access to low cost 

alternatives to infrastructure constraints and energy demands." Commenters stated, "Americans 

deserve the bottom line: what does it cost and what will we get for the money?" 

Commenters noted that another reliability issue is "the impacts of the distribution of generating 

resources that support regional operations." 

Commenters cited the Polar Vortex of late 2013 and early 2014 as a demonstration of reliability 

concerns. Commenters noted that the unusually cold weather caused much of the United States 

to be at risk of blackouts and further retirements of coal-fired units could make blackouts a 

recurring danger. 

Commenters stated, "On January 7, 2014, available power totaled slightly more than 142 GW" 

and "Demand peaked that day at 141 GW, meaning the grid was very close to failure." 

Commenters questioned whether "the grid will be in a position to deal with the scenario we faced 

this past January." 

Commenters stated, "the lights almost went out during the Polar Vortex, but that was with many 

tens of thousands of MWs of coal-fired capacity that will not be there in the future if this rule is 

finalized in its present form." Commenters stated that "the implementation of EPA's proposed 

environmental dispatch scheme appears to be premised on assumptions about the existence of 

infrastructure, market forces, and market incentives that either are not correct or cannot be 

effectively implemented to accommodate mandatory environmental dispatch without 

compromising electric reliability." 

Commenters stated that "almost every coal-fired electric generation unit slated for closure in the 

next few years due to EPA regulations was required to operate this past winter 'simply to keep 

the electric grid functioning.'" 

Many commenters cited the NERC study as supporting evidence for reliability concerns. 
146 

Commenters stated "The Proposed Regulation, if not amended, could subject customers to the 

very outages that Congress sought to avoid when it directed, less than 10 years ago, the 

establishment of mandatory reliability standards by NERC." According to commenters, "NERC's 

concerns cannot be taken lightly as NERC is certified under federal law as the organization with 

the reliability expertise to establish mandatory electric reliability standards for the bulk power 

system in Virginia and throughout the United States." 

Commenters noted a study conducted by NERA Economic Consulting [NERA Economic 

Consulting, Potential Energy Impacts of the EPA Proposed Clean Power Plan, October 2014, 

http://americaspower.org/sites/default/files/NERA_CPP%20Report_Final_Oct%202014.pdf 

Commenters stated, "NERA's analysis tested two separate scenarios for compliance - one 

'unconstrained' scenario in which states had all four building blocks as viable options and one 

'constrained' scenario in which states were limited by available resources to only two building 

blocks." According to commenters, "In the constrained scenario, over 200 GW of coal-fired 

power would be set to retire by 2029, while in the unconstrained scenario, almost 100 GW would 

retire. According to commenters, "NERA's report also estimates that between 18 and 68 percent 

of coal capacity could by retired across the U.S. by 2031." According to commenters, "the 

Southeast, the South Central, and the Northeast regions stand to lose the greatest percentage of 

coal-fired capacity by 2031." 

Commenters cited a reliability analysis conducted by Southwest Power Pool (SPP) [SPP 

Reliability Assessment of EPA 111(d) Clean Power Plan Rule, SPP (Aug. 19, 2014), 

http://www.spp.org/publications/SPC%20Materials%20081914.pdf.] 

Commenters noted "The SPP warns that the proposal will result in cascading outages and 

voltage collapse in six of the eight states where it operates the electric grid."

Commenters cited a reliability analysis conducted by the Electric Reliability Council of 

Texas (ERCOT) 

Commenters stated they are very concerned about the impact of the Clean Power Plan on their 

ability to adequately meet their customers' power supply needs, especially in the short timeframe 

proposed. The commenters further stated that the reduction in fossil-fueled generation as well as 

the manner in which the remaining generating units are dispatched will impose significant 

adverse consequences on the electric industry generally and the ETCs specifically, the 

commenters noted that NERC has stated more power plants will likely retire than EPA estimates, 

leaving many regions of the country without adequate resources to meet their power supply 

requirements and that the compliance timelines proposed by EPA, especially the proposed 

interim deadline of 2020, do not provide sufficient time for utilities to either develop new, 

cleaner power resources or construct transmission to access alternative supplies. 

Commenters noted reliability concerns of several RTOs, including SPP, MISO, and SWEPCO: 

• SPP found that "the generating-unit retirements expected as a result of the [Clean 

Power Plan] will cause significant reactive power deficiencies and numerous 

overloaded facilities." 
147 

• MISO concluded that the Clean Power Plan, as currently proposed, would place 

approximately 14,000 MW of coal-fueled generating capacity at risk of 

retirement, exacerbating existing resource adequacy concerns unless new 

generation is constructed 

• SWEPCO stated the proposal makes no accommodation for the strength -- or lack 

of strength -- of Southwest Power Pool's current transmission system, nor does it 

recognize the conflict between state implementation plans and multiple RTOs 

within a state and that the CPP, provides no recognition that loss of local, base 

load generation requires significant investments in both new capacity and new 

transmission, and the proposed timeline gives no recognition to the planning, 

approval, permitting and siting time needed to approve and install new generation 

and transmission. 

Commenters noted that they will experience many of the resource adequacy concerns identified 

by NERC, SPP, MISO, and SWEPCO, threatening their ability to provide reliable service to their 

customers. 

Commenters stated that by EPA's own estimate, four of the eleven power plants in which they 

hold ownership interests will be forced to retire as a result of the CPP and that they will lose 294 

MWs of capacity, or 22.5% of the total generation capacity they own seriously hindering their 

flexibility to adjust their generation portfolio to respond to system emergencies, plant outages 

and peak loads. The commenters further noted that the harm may be even worse if the majority 

owner of another power plant decides the final requirements of the Clean Power Plan are 

unachievable. 

Commenters stated that The Proposed Rule will negatively impact the reliability of the supply of 

electricity, particularly in the ERCOT region and that an analysis by ERCOT estimated that 

between 3,300 and 5,700 MW of coal-fired generation could be retired as a result of just this 

rule. The commenters stated that EPA's IPM results projected that almost 6,500 MW of coalfired generation must be retired in Texas and such large potential retirements of coal-fired 

generation pose reliability risks, with one concern being the potential for system inertial support 

to be degraded. 

Commenters stated that proposed changes could impact reliability of electric sources. 

Commenters stated that the economic vitality of industrial operations depends on reliable as well 

as reasonably priced energy supplies. Commenters stated that many manufacturers operate 

around the clock, with consistent energy needs at all times. Commenters stated that in the event 

of supply constraints or system emergencies, industrial consumers are subject to service 

curtailment in advance of residential and human needs customers. Commenters stated that the 

risk of any impairment to reliability, consequently, falls earlier and harder on industrials. 

Commenters stated that at the same time, service interruptions impose serious hardship on such 

operations, halting production, idling workers, disrupting downstream processes and potentially 

damaging product and equipment. 
148 

Commenters continued with: regulations that significantly alter the generation and supply of 

essential energy resources, accordingly, should be implemented with due care to mitigate the 

potential disruption and economic impact of any degradation in reliability. Commenters stated 

that as indicated by a recent report by the North American Electric Reliability Corporation 

(NERC), there is substantial reason for concern that the proposed regulations may impair the 

reliability of electricity service in the United States. 

Commenters stated that reducing electric and gas reliability could result in the temporary or 

permanent shutdown of manufacturing facilities which could result in costs starting from tens of 

millions of dollars to $100 million per day. 

Commenters stated that nationwide, 132 gigawatts of generating capacity is projected to retire 

between 2016 and 2020, of which 68 GW is directly attributable to the Clean Power Plan, 

according to EPA modeling. Reliability watchdog North American Reliability Corporation has 

warned that "essential reliability services may be strained by the proposed Clean Power Plan." 

Commenters stated that the Edison Electric Institute cautioned that, "The dynamics of 

compliance, under circumstances of any unexpected shortfall in the non-emitting resources 

required for compliance, creates the risk of multi-state compliance failures that would disrupt 

interstate power flows." 

Commenters stated that in their state, EPA modeling predicts that 3,425 megawatts of fossil fuel 

electric generating capacity would retire as a result of the rule. It is unclear if their state, and 

neighboring states similarly impacted, can afford to lose this much capacity. The resulting threat 

of rolling blackouts is very real. 

Commenters stated that the Western Electricity Coordinating Council, a non-profit corporation 

that exists to assure a reliable bulk electric system in a 10-State region in the west, shows that the

loss of generating capacity leaves the Northwest WECC region only 0.53 percent above the 

region's 15 percent target for reserve margin. 

Commenters stated that FERC Commissioner Philip Moeller told Congress that the rule 

threatened the 15-State Midcontinent Independent Service Operator footprint with "widespread 

rotating blackouts." Commenters stated that in a November interview with Bloomberg, Thomas 

Fanning, the CEO of Southern Company, which services a four state region in the southeast, said 

that "I don't think we have the ability to maintain a reliable system" and also comply with EPA' s 

Section 111(d) rule. Commenters stated that a reliability analysis performed by ERCOT, the 

independent service operator that maintains Texas's grid, warned the rule "could result in 

transmission reliability issues due to the loss of generation resources in and around major urban 

centers." 

Commenters stated that the impact of the CPP on the existing electric generation fleet raises 

significant reliability concerns. Commenters stated that prior to the release of the CPP, the DOE 

had modeled 60GW of coal plant closures by 2020. Commenters stated that EPA anticipates an 

additional retirement of close to 50GW of coal based generation as a result of the CPP. Private 

parties have suggested even more closures. Commenters stated that the loss of at least 110GW of 

capacity from the electric sector raises red flags for the industry and additional assessment of the 
149 

reliability of the grid under the CPP is warranted. Commenters stated that such additional 

assessments are called for by numerous electric reliability organizations including the NERC. 

Commenters stated that FERC Commissioner Moeller stated "[t]here are profound reliability 

implications of the Clean Power Plan that need to be thoroughly discussed and studied to assure 

the continued reliability of the nation's bulk power system." 

Commenters stated that climate impacts will be minimal but adverse reliability impacts will be 

significant. 

Response 7: EPA does not agree that the Clean Power Plan will cause unplanned outages, or 

voltage collapse. It also does not mandate or even contemplate environmental dispatch. Very 

much to the contrary, the CPP features overall flexibility, a long planning and implementation 

horizon, and the widest possible range of options for states and affected EGUs to achieve the 

CO2 emissions goal. This design reflects, among other things, the EPA’s commitment to 

ensuring that the final rule does not interfere with the industry’s ability to maintain the reliability 

of the nation’s electricity supply. As further described in the preamble to the final rule, states can

develop plans to meet the CO2 emission performance rates or state CO2 emission goals by 

choosing from a variety of state plan types and approaches that afford states and affected EGUs 

appropriate flexibility. EE and other non-BSER approaches can strengthen a state’s ability to 

establish a plan to meet the CO2 emission performance rates or state CO2 emission goals by 

providing a considerable amount of headroom above the levels of the rates and goals. EE 

especially, because it reduces load, can provide assurance that reliability can and will be 

maintained. Additionally, the final rule offers opportunities for trading among affected EGUs 

within and between states, and other multi-state compliance approaches that will further support 

electric system reliability. 

In addition states can, if problems arise revise their state plans and in the unlikely event that a 

very rigidly designed state plan conflicts with what must be done to respond to an emergency, 

the state can use a short term "reliability safety valve". 

EPA is aware that some parties have published studies that predict that the CPP will result in 

resource adequacy and other problems. EPA’s own analysis does not confirm this finding. Many 

of these studies assume that states, rather than developing state plans that make use of the wide 

latitude in the final rule to develop plans that are consistent with that state’s energy sector and 

policies, that every state simply implement the building blocks in cookie cutter fashion the 

building blocks are how the level of the standard is set. It isn’t how the states are to develop 

their plans. There are several other common mistakes made in these studies. Please see section 

VIII.G of the final preamble to the CPP for a discussion of reliability studies. 

Comment 8: Commenters supplied reliability-related reasons that climate change should be 

addressed in the near future. 

Commenters noted the following reasons why "Addressing climate change is an essential part of 

maintaining reliable and affordable power:" 
150 

• impact of unmitigated climate change in the Southwest will be a hotter and drier 

climate with more frequent and severe droughts 

• Current water shortages have already decreased hydroelectric generation in the 

southwest 

• future unmitigated climate change will warm rivers and lakes, reducing the 

capacity of thermal power plants, especially so in the summer when demand 

peaks 

• projected increase in electric cooling demand, primarily driven by increased use 

of air conditioning 

Commenters stated that an important aspect of the impacts this rule could have on reliability of 

the electric energy supply system not considered by EPA is the vulnerabilities and challenges the 

system is facing from climate change and extreme weather events. The commenters cited DOE's 

July 2013 report on vulnerability of the energy sector to climate change: 

"Increasing temperatures, decreasing water availability, more intense storm events, and sea level 

rise will each independently, and in some cases in combination, affect the ability of the United 

States to produce and transmit electricity from fossil, nuclear, and existing and emerging 

renewable energy sources. These changes are also projected to affect the nation's demand for 

energy. An assessment of impacts - both positive and negative - is necessary to inform forwardlooking efforts to enhance energy security." 

Commenters summarized several findings from the DOE report on electric power generation 

facilities, energy infrastructure, renewable energy resources, electric transmission and 

distribution, fuel transport, and increased electricity demand resulting from climate change. 

Commenters stated that while EPA made a high level assessment of impacts to the electric 

supply system from power plant retirements and the shift to different electric supply sources 

using EPA's IPM Modeling, it did not take into consideration scenarios incorporating the risks 

the electric system is facing from ever increasing risks from climate change and extreme weather 

events. The commenters concluded that reliability of the electric system to yesterday's system 

demands is not adequate for determining reliability of an energy system that also needs to 

operate effectively to a changing climate. 

Commenters reviewed the effort of the National Climate Assessment Development Committee to 

create a set of physical, ecological, and societal indicators that would inform decision-makers 

and the public about our nation's changing climate. The commenters urged EPA to identify 

appropriate climate change and extreme weather event frequency scenarios and to consider the 

potential impacts of these scenarios on electric system reliability in concert with expected unit 

retirements, load pockets, and greater reliance on interruptible sources of energy. The 

commenters stated that these considerations exacerbate the difficulties caused by the interim, and 

even the final, state emission rate standards. 

Commenters identified and presented three comparative load forecasts. 
151 

Commenters noted that they analyzed the feasibility of complying with the 2020 interim 

standards in a different way, without regard to EPA's IPM results, using its own transmission 

constrained dispatch models to estimate how much coal-to-gas redispatch it could achieve while 

maintaining reliable service. The commenters then noted that they then calculated the gap 

between the emissions rate reduction achieved through maximum redispatch and EPA's assumed 

improvement in coal heat rates (which is not a realistic assumption) and the 2020 standards 

(using a range of assumptions about how the state standards would be "allocated"). The gap, 

which presumably would have to be achieved through additional use of renewables and through 

energy efficiency, was larger than the total potential assumed by EPA for those Building Blocks 

in several of the states served. 

Commenters stated that renewable energy projects must balance all environmental impacts 

including state and local community considerations and believe the CPP can play a significant 

role in advancing the amount of energy that renewables can contribute to our overall energy 

needs. The commenters stated that at the same time the CPP should not advance policies that 

disproportionately contribute to other environmental impacts from energy projects beyond 

climate change. 

Response 8: EPA agrees with commenters that the impacts of climate change are a threat to 

electricity reliability. Storms create threats to the distribution system that many Americans are 

familiar with. Trees and tree limbs fall on wires and cause losses of power. Water shortages are 

reducing the capacity of hydroelectric plants in the southwest31. Warming of rivers, lakes and 

coastal waters are limiting their ability to coal thermal power plants.32 

Comment 9: Commenters expressed the importance of including reliability experts. 

Multiple commenters made statements concerning the importance of including reliability experts 

in this rulemaking. These include FERC, NERC, ISOs, RTOs, industry stakeholders, states, 

DOE, WECC, electric industry, gas industry, etc. Commenters offered specific guidance on ways 

to include the reliability experts in this rulemaking. 

Commenters asked that EPA use a "series of technical conferences jointly sponsored by FERC 

and the EPA" to discuss the "impacts of the proposed CPP on power system reliability, impacts 

on regional markets, and how to move forward in a coordinated fashion that best facilitates 

accomplishment of both EPA and FERC objectives." 

 

31http://www.eia.gov/todayinenergy/detail.cfm?id=14911 

32http://green.blogs.nytimes.com/2012/08/13/heat-shuts-down-a-coastal-reactor/ 
152 

Commenters stated the following solution to improving regional energy planning by developing 

"a memorandum of understanding (MOU) between EPA and FERC that cross references the 

EPA rule with the FERC 1000 rule." Commenters asked that the agencies "collaborate with 

states and regional transmission authorities to make sure both greenhouse gas reduction and 

energy reliability needs are addressed nationally and locally." 

Commenters asked that EPA "sink up its rules with requirements for state energy plans and 

improved regional coordination with FERC." Commenters noted that "A strong tie to long-term 

energy planning is necessary for the EPA Clean Power Plan to be successful." To make 

environmental and energy policy more consistent, commenters recommended that EPA develop 

a "memorandum of understanding (MOU) with the Department of Energy and the Federal 

Regulatory Energy Commission" and "work closely with state Public Utility Commissions and 

regional entities such as the Regional Transmission Organizations (RTO) and Independent 

System Operator (ISO)." According to commenters, "The RTO and ISO are similar in that both 

are responsible for coordination of regional transmission systems and reliability of the electric 

system. 

Commenters offered the following example of the need for interagency coordination. According 

to commenters, "managing the necessary infrastructure build out for an aging electric energy grid 

and gas pipeline system across the U.S." is a key area for coordination because "containing 

utilities desire to over build infrastructure to support their legacy electrical system" must be 

tempered with knowledge of "the growth of distributed energy resources (DERs) in a changing 

system." According to commenters, FERC landmark Order 1000 rule requires the "utilities and 

others responsible for our high voltage transmission grid to participate in a regional planning 

process, eliminate certain provisions that give incumbent utilities a competitive edge in 

transmission planning, establish methods to clarify who will pay for the costs of transmission 

projects, and include procedures to consider how public policies like federal carbon pollution 

standards and state clean energy policies impact the grid." The FERC authority was upheld in the 

D.C. Circuit Court of Appeals in August 2014, with the order forcing utilities to consider 

renewable energy in their transmission planning. According to commenters, the following trends 

in the U.S. energy market could cause regulatory conflict and require coordination between 

FERC and EPA: 

• the current low natural gas prices causing existing aging coal plant closures, 

• some nuclear plant closures such as Wisconsin's Kewaunee plant, and 

• the ability to replace this generation capacity. 

• "whose regulating authority [FERC or EPA] trumps the other over the issue of 

reliability or carbon reduction?" 

• "There could be problems with the state-by-state nature of EPA carbon emission 

regulations and the regional energy planning." 

Commenters suggested a requirement that DOE work with FERC and EPA to develop a new 

national energy plan for the transition from the legacy carbon economy to the new clean energy 
153 

economy. According to commenters, "The DOE invests in energy research, programs like 

APRA-E, and could shape the necessary energy technology innovation system advances to 

continue providing critical GHG reduction." Therefore, commenters suggested that one 

dimension of the plan include an energy technology roadmap. Commenters continued that "input 

is needed from DOE and FERC on critical infrastructure investments such as the electric 

expansion or natural gas pipeline upgrade and expansion" because the increased integration of 

renewable energy will dramatically re-shape energy infrastructure needs as well as require 

changes in the electric energy utility business model. According to commenters, "Planning 

documents can help make this a smooth transition versus disruptive change." Commenters 

suggested that "the energy vision, goals and metrics document should be produced by January of 

2016" and states using integrated resource planning and regional transmission plans through 

FERC 1000 could be used to continually feed into and update the federal plan document. 

Commenters noted that there may be an opportunity for EPA and FERC to coordinate with the 

states through the requirements for regional transmission planning under the FERC 1000 rule. 

According to commenters, the FERC rule required consideration of non-transmission alternatives 

(NTAs) during regional transmission planning and NTAs can replace the need for additional 

transmission through energy efficiency, demand response, distributed generation, or centralized 

generation sited near load. 

Commenters noted that NTAs have the following additional benefits: 

• avoided energy costs, 

• reduced wholesale electricity costs, 

• reduced air pollution 

• reduced water usage, and 

• avoided land use and siting costs. 

Commenters suggested a "memorandum of understanding between EPA and FERC with a 

linkage to language in the final rules for the Clean Power Plan" to "simultaneously address gaps 

in grid reliability issues, regional energy planning (specifically transmission planning under 

FERC 1000)" and "add a requirement to develop a calculation of costs and environmental 

benefits of reduced air pollution (including greenhouse gas reductions) and reduced water usage 

from the greater use of NTAs, and some requirement for participation of public utility 

commissions and state air and water quality regulators to participate in mutual planning 

processes." 

Commenters noted that NTAs and the proposed rule complement each other in the following 

ways: 

• energy efficiency, 

• demand response, and 
154 

• increasing distributed generation 

• advancing microgrids and energy storage 

Commenters suggested that EPA "strongly consider additional coordination with states, NERC, 

the Federal Energy Regulatory Commission ("FERC"), and Independent System Operators to 

develop mechanisms that allow for greater flexibility to maintain compliance and ensure 

reliability." 

Commenters also stated that "the need for coordination between U.S. EPA and FERC regarding 

the feasibility of compliance with the proposed rule cannot be understated." 

Commenters noted that the "Colstrip Plant in Montana is in 5 separate BAs [balancing areas] 

because the generation from Colstrip is used for serving load centers in several states." 

According to commenters, "As this example illustrates the Clean Power Plan compliance plans 

in one state can and will impact several states, highlighting the need for the EPA to work with 

WECC and all stakeholders to analyze and model the complex interaction of proposed state 

compliance plans." 

Commenters stated that "The electric and gas industry should be invited to provide electric and 

gas system modeling and expertise regarding the impact to reliability of proposed 

implementation. Without such modeling, stakeholders cannot appropriately evaluate the proposal 

and the complex interactions between states and regions." 

Commenters stated that recent grid operator comments mistakenly suggest that the CPP's 

deadlines are too onerous and risk triggering reliability issues underscore that reliability cannot 

be viewed in a vacuum; instead, grid operators are obligated and empowered under Order 1000 

to use their planning tools to support state implementation of the CPP. Commenters stated that 

FERC-jurisdictional grid operators should provide whatever technical and analytical support the 

states require to help develop their plans and that acting under Orders 890, 1000, and other 

FERC authorities, they regularly assess how state public policy requirements (e.g., state 

renewable energy and energy efficiency standards, the forthcoming CPP) will affect system 

needs. The commenters stated that grid operators will provide the necessary information and 

guidance to states to allow them to determine how their state-jurisdictional CPP compliance 

solutions could better meet grid reliability needs and avoid or minimize the need to continue to 

run plants otherwise slated for retirement. 

Commenters stated that FERC orders require every grid planner (including both individual 

public utility transmission providers and the regional grid planners) to participate in a regional 

system planning process, create processes and forums for all stakeholders, including states, to 

consider such public policies as the CPP, and evaluate both transmission and non-wires solutions 

to meet system needs. The commenters stated that the planning process helps link the system's 

physical/electrical needs to both transmission and "non-wires solutions" - which include onsite 

generation, demand response, and energy efficiency - that can identify and resolve reliability 

needs, and that from the states' perspective, the regional planning process can help states develop 

and implement a cost-effective and on-time state plan for the CPP. 
155 

Commenters stated that FERC's grid planning rules create a forum for states to craft and 

implement effective and reliable CPP state plans and that FERC orders have evolved to reflect 

changes in the generation and delivery over time. The commenters stated that the regional 

planning process required by FERC can help states develop and implement a cost-effective and 

on-time state plan for the CPP. 

Commenters stated that one of FERC's critical responsibilities is to review and approve grid 

planning and operating standards created by the NERC, none of which would change under the 

Clean Power Plan. The commenters stated that all regions plan to have capacity above expected 

demand to accommodate unplanned power plant outages, transmission failures, unexpectedly 

high demand, or other contingencies and that most regions maintain minimum target reserve 

margins of about 15 percent above their forecast demand. The commenters stated that this would 

continue to be the case under the Clean Power Plan and that states that exercise traditional 

regulation over vertically integrated electric companies often use integrated resource planning 

processes to ensure that electric distribution companies have sufficient resources available to 

meet projected load and reserve requirements at least cost. 

Commenters reiterated the request for a formal role for FERC with the EPA as it relates 

especially to the reliability implications of the proposal. The commenters recommended 

convening the appropriate reliability experts to examine the reliability implications necessary to 

avoid additional unintended consequences. The commenters noted that it's the details of 

calculating proper reserve margins and specific load pockets that matter from a reliability 

perspective and that although a specific generating plant may not contribute significant power to 

the grid, its other outputs such as voltage support or "inertia" qualities may contribute 

significantly to grid stability. 

Commenters also stated that the details of how reserve margins are calculated can have a 

significant impact on the ability of excess capacity in one load pocket to transfer power to 

another load pocket that is short, but these challenges can be addressed. The commenters stated 

further that infrastructure improvement sometimes cannot be implemented within the deadlines 

of specific rules. 

Commenters stated that getting the electricity reliability experts together in a public and 

transparent forum to address these questions and develop answers is the responsible approach to 

publicly discuss the extent of reliability challenges under the proposal and potential solutions to 

these challenges. The commenters continued that the responsibility to formally address the 

reliability implications should be promoted by the EPA with their involvement, must be open 

and transparent, and cannot be merely a private and paperless discussion between government 

employees. 

Response 9: The EPA agrees that consideration of reliability is an important part of developing a 

sound plan to reduce CO2 emissions from power plants. EPA consulted often with DOE, FERC, 

the ISO/RTO Council, other planning authorities, reliability organizations and other stakeholders 

in developing the CPP. The EPA is requiring that each state demonstrate as part of its state plan 

submission that it has considered reliability issues while developing its plan in order to ensure 

that standards of performance can be implemented and enforced. 
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A number of commenters, notably ISOs and RTOs, pointed out that planning and anticipation of 

change are among the essential ingredients of ensuring the ongoing reliability of the electricity 

system. To that end, they recommended that as states are developing state plans, their activity 

include the consideration of the reliability needs of the region in which affected EGUs operate 

and of the potential impact of actions to be taken in compliance with state plans. Therefore, we 

are requiring that each state demonstrate in its final state plan submittal that it has considered 

reliability issues in developing its plan. One particularly effective way in which a state can make 

this demonstration is by consulting with the relevant ISOs/RTOs or other planning authorities as 

they develop their plans and documenting this consultation process in their state plan 

submissions. If a state chooses to consider reliability through consultation with the ISO/RTO or 

other planning authority, the state should request that the planning authority review the state plan 

at least once during the plan development stage and provide its assessment of any reliability 

implications of the plan. While following the recommendations of the planning authority would 

not be mandatory, the state should document its consultation process, any response and 

recommendations from the planning authority, and the state’s response to those 

recommendations in its state plan submittal to the EPA. This consultation is designed to inform 

how the state might adjust its plan for meeting the CO2 reduction goal required under this 

guideline; the consultation is not a basis for relaxing that goal. While we consider this process to 

be an effective way for a state to demonstrate that it considered reliability in developing its state 

plan, a state may provide other comparable support for a demonstration that it has considered 

reliability during the state plan development process. The EPA believes that this requirement to 

demonstrate consideration of reliability will provide an essential reliability evaluation in the state

plan development process. It should further help states avoid any conflicts between state plans 

and the maintenance of reliability during implementation of the state plan and associated 

emission standards. 

In addition, the EPA, DOE, and FERC have agreed to coordinate efforts to help ensure continued 

reliable electricity generation and transmission during the implementation of the final rule. The 

three agencies have set out a memorandum that reflects their joint understanding of how they 

will work together to monitor final rule implementation, share information, and resolve any 

difficulties that may be encountered. This effort is based on the successful working relationship 

that the three agencies established in their joint effort to work together to monitor reliability 

during MATS implementation. 

Comment 10: Multiple commenters stated that the rule does not threaten grid reliability. 

Commenters stated, "We believe strengthening and energetically pursuing this proposal will 

protect public health and address climate change while ensuring reliable, clean power and that 

new clean energy technology will create a new generation of green jobs." 

Commenters stated, "for anyone saying that this threatens grid reliability, that's a laughable 

statement." According to commenters, "In the record heat in Texas in August 2011, multiple coal 

plants that needed maintenance ended up shutting down, but it was the onshore wind farms, 

along the Texas Gulf Coast, south of Corpus Christi, that kept the lights and the air conditioners 

running during those first three days of August 2011." 
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Commenters stated, "While the retirement of fossil generating units poses a hypothetical 

challenge to the reliability of the electric grid, the adoption of proper policies, technologies, and 

procedures will allow the grid to evolve and meet the challenge of a changing generation mix, 

ultimately ensuring that frequently-voiced reliability concerns never materialize." 

Commenters noted the following: 

• "a well-balanced mix of low-carbon and renewable resources, including natural 

gas, biomass, solar, wind, geothermal, hydropower, and other distributed 

resources like fuel cells, can replace retired generating units with electricity that is 

both clean and reliable." 

• "advanced grid technologies can help integrate variable renewable generation, 

increasing the output from these non-emitting sources and amplifying their 

contribution to resource adequacy. These technologies include energy storage, 

advanced metering infrastructure, demand response, distribution automation, 

microgrids, high voltage direct current transmission, and smart grid management 

technologies." 

• "demand-side management technologies such as energy efficiency and demand 

response reduce peak demand, thus lowering the necessary reserve capacity and 

improving resource adequacy," adding that." Lawrence Berkley National 

Laboratory (LBNL) cites load shifting, energy efficiency, and renewable energy 

as viable strategies to address resource adequacy and thereby improve overall grid 

reliability." 

Commenters stated that the guidelines will improve the reliability of electricity in the United 

States by "diversifying the electric generation portfolio and by improving energy efficiency 

measures that reduce peak demand." 

Commenters noted the following features of the proposed rule that will preserve reliability: 

• allows states flexibility to meet their carbon pollution goals through a variety of 

low- carbon resources. 

• provides great flexibility as to how states may demonstrate compliance - allowing 

states, among other things, to average their emissions over the period from 2020 

to 2029; average the emissions of multiple EGUs when determining fleet-wide 

emission rates; and utilize market-based mechanisms, including credit trading 

systems that build on frameworks already in place in many states, to show that 

carbon pollution goals are being met. 

• provides a multi-year period for developing state plans as well as for 

demonstrating compliance. The relatively extended period for implementing 

these guidelines allows sufficient time for stakeholders to plan for future resource 

needs, and develop and deploy any infrastructure that may be needed to maintain 

reliability while reducing emissions from existing EGUs. 
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Commenters noted that the analyses from SPP and ERCOT contained incorrect assumptions that 

undermine the determinations that reliability is threatened by the proposed rule. Specific 

criticisms are mostly contained in the commenters' arguments against the inclusion of a safety or 

reliability valve. 

Commenters stated that there is no valid reason to doubt that system operators will be able to 

maintain system reliability as the Clean Power Plan is implemented. The commenters stated that 

there is a strong federal and state structure in place to plan for and achieve adequate system 

reliability, and maintaining reliability under the Clean Power Plan will be facilitated by the 

significant flexibility provided by the multi-year compliance period and the system-based 

compliance options. 

Commenters provided the following examples: "plants needed for reliability may continue to 

operate as long as needed under a credit-based compliance program simply by obtaining a 

sufficient supply of low-emission credits from renewable energy, energy-efficiency or other 

lower emitting generation. Similarly, multi-year averaging compliance will allow a plant 

essential for maintenance of reliability to continue to operate even if there are not adequate 

credits available in a particular year so long as the average emission rate is met over the multiyear period." 

Commenters refuted commenters that stated that increasing the share of overall generation 

served by natural gas will reduce fuel diversity and threaten the reliability of the electric grid. 

The commenters stated that data shows that poor generator performance at the beginning of the 

Polar Vortex was more an issue of lack of preparedness and impaired generator availability than 

natural gas supply availability. For example, the commenters cited data that indicated that during 

the Polar Vortex' peak demand hour, 22% of PJM's generation capacity was reportedly out of 

service, not due to lack of gas availability, but due to weather-related forced outages, a rate that 

is two to three times higher than the normal peak winter outage rate of around 7-10%. The 

commenters added that issues will likely be alleviated by the continued build-out of natural gas 

pipeline infrastructure, and that decreased reliance on existing coal-fired power plants will 

increase fuel diversity in the electric generating fleet. 

Commenters stated that a study was conducted by PJM, the regional grid operator, found that 

there would be no significant reliability issues from phasing in this level of renewable energy, 

even with current technology. 

Commenters stated that we should strive to have more of all forms of energy and not simply pick 

one energy resource against another. 

Commenters cited the E3 Study, NREL and NERC to note that reliability concerns can be 

addressed by CSP while satisfying emission reduction goals and the need for a cost-effective, 

reliable energy supply. The commenters requested that EPA incorporate a requirement within 

BSER to evaluate and address grid integration and reliability issues and help ensure that 

renewable energy assets will have a positive impact, decrease the risk that they will be curtailed, 

and increase their effectiveness and decrease their costs. Additionally, commenters supported the 

flexibility that the Proposed Rule would offer to the States in developing their State Plans but 

recommends that EPA require that grid integration and reliability issues be evaluated and 
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addressed in addition to the cost of State Plans, economic benefits, jobs, and benefits of CSP+ 

TES and other technologies in designing State Plans. 

Commenters queried how does the EPA proposes that we obtain our national energy supply if we 

cut carbon but do not move as quickly as possible to sustainable, renewable replacement sources 

such as wind, solar, geothermal and efficiency. 

Commenters stated that recent comments submitted by the Kentucky Energy and Environment 

Cabinet raise the issue, repeated by many, of "grid reliability," with many citing a recent report 

by the North American Electric Reliability Corp (NERC). Commenters stated that this report 

fails to consider several factors. The Union of Concerned Scientists challenge that the NERC 

report fails to include additional renewable generation. Commenters stated that UCS particularly 

cites the MISO market, where renewables are increasing substantially. Commenters stated that 

parts of their state (Kentucky) fall within the MISO region. 

Commenters stated that EPA should recognize Texas's role as a leader in maintaining system 

reliability. Commenters stated that concerns about reliability are largely overstated. Commenters 

stated that industry groups have often raised concerns about potential electric system reliability 

impacts from major new EPA regulations affecting power plants, but the implementation of new 

environmental rules has never actually produced any reliability problems. Commenters stated 

that this is, in large part, due to the fact that the industry has proven itself capable of responding

effectively to such regulations. Commenters stated that electric utilities, ERCOT, other grid 

operators, federal and state regulators, and others, have taken a wide variety of steps to ensure 

reliability in the face of previously promulgated environmental regulations. 

Commenters stated that there have been recent developments in transmission line construction 

and best practices in renewable energy dispatch that are helping to address any reliability 

concerns with respect to wind energy. 

Commenters stated that energy storage services can also provide additional reliability, and have a 

critical role to play in preserving the stability of the grid. Commenters stated the PUC has 

approved new rules and ERCOT has approved new protocols establishing some basic rules for 

energy storage facilities in Texas. Commenters added battery systems have been added by AEP 

near Presidio, Texas and at a wind farm in West Texas by Duke Energy. 

Commenters stated that Oncor Electric Delivery, owner of the largest power-line network in 

Texas announced a proposed plan to spend more than $2 billion on up to 5000 MW of storage to 

address the problem of fluctuating wind and solar output, subject to needed rule changes at the 

PUC. 

Commenters stated that they do not agree with ERCOT or NERC that distributed generation 

represents a serious reliability concern in the near-term future, to give one example, the 9 to 13.5 

GW of new solar capacity ERCOT's model anticipates over the next fifteen years is entirely 

utility-scale generation, but to the extent some market changes are needed, we note again that 

grid operators are already examining the various changes that may be required. 
160 

Response 10: The EPA generally agrees with the commenters that electricity system is well 

positioned to respond to the final rule while maintaining reliability. The changes made to the 

rule since proposal especially bolter the ability of the industry to maintain electric reliability. 

EPA agrees in large part with these commenters regarding a reliability safety valve. While we 

have offered a reliability safety valve, it would only be of use in states that do not make use of 

the opportunity offered to develop a plan that avoids inflexible requirements on individual plants. 

Our own analysis does not point to any problems regarding resource adequacy throughout the 

compliance period. Please see section VIII of the final rule preamble and the Resource 

Adequacy Technical Support Document. For more information. 

Comment 11: Commenters discussed the potential for including a safety value or reliability 

mechanism in the CPP. 

Commenters discussed the potential inclusion of a safety or reliability mechanism in the rule. 

According to the commenters, the provisions would allow units that are critical to grid reliability 

to continue operation. 

Commenters referred to the "reliability safety valve" that was proposed by the ISO/RTO 

Council. Commenters referenced the safety valve concept proposed by PJM. Commenters cited 

an idea set forth by the FERC Commissioner. Commenters referenced the one-year compliance 

extension in the MATS Rule. 

Commenters stated "States should also be granted a structured exemption to allow emissions in 

excess of their target levels for a declared emergency period." 

Commenters asked that FERC, NERC, or possibly state utility commissions "should be 

authorized to review the operation of the overall electric grid and identify any units that are 

'necessary for grid stability and reliability' as exempt from redispatch requirements under BB2 as 

well as state goal-setting." 

Commenters stated, "The final rule should include built-in mechanisms for suspending or 

modifying plans to address unforeseen reliability emergencies." For example, commenters stated, 

"EPA provides flexibility in the operation of emergency generators at 40 CFR section 

60.4211(f)(2)(ii) and (iii) and EPA provides a model rule for flexibility in the use of solid waste 

incinerators in emergencies at section 60.3061." 

Commenters stated "Additional flexibility for states in implementing compliance plans is 

necessary. As plans are implemented, there will be unexpected and unintended consequences and 

EPA must allow states to address these by revising their compliance plans as necessary. States 

should not be locked in to a particular approach as there are simply too many variables 

associated with the interconnected power system and the proposed Clean Power Plan." 

Commenters asked that EPA include a safety valve. Commenters asked that it be triggered 

"when the Plan is determined to be resulting in unit retirements that would harm reliability 

and/or have other unacceptable impacts that outweigh the benefit of further emission reductions" 

and "targeted to units that are needed for reliability and in the hours in which those units are 
161 

needed for reliability." Commenters asked that the safety valve not "interfere with the provision 

of an accurate market price signal for the value of CO2 emission reductions." 

Commenters suggested that the provision would permit a state, "if it had concerns about the 

reliability implications of its or another state's plan, to cause the plan to be submitted to the 

"local transmission operator or operators, or to the regional transmission planning body that is 

constituted under Orders 890 and 1000 of the Federal Energy Regulatory Commission, or to the 

local ERO or RTO." According to commenters "The selection of the appropriate body to submit 

the plan to would depend both on the geographic scope of the body and its willingness to 

undertake the analysis." According to commenters, "If the plan was found by the relevant body 

not to result in reliable operations of the grid, then the plan would be suspended and the state 

would be required to submit a revision to the plan to ensure reliability." 

Commenters asked that EPA "allow [state] plans to be studied in tandem and for their effects on 

the reliability of the region." 

Commenters noted that "Additionally, states should be authorized to provide reliability 

exemptions or minimum exempt run periods for smaller units that are necessary for local voltage 

support or to provide the needed peak load support during high load months." Commenters noted 

that "This could be accomplished through a subcategory or through operational limitations that 

allow for exemptions from the program." commenters cited as an example, the "EPA's RICE 

Rules which allow for a certain number of reliability run hours from uncontrolled diesel engines 

or even in the application of reformulated gasoline standards that allow for certain fuels to be 

sold during certain times of the year." 

Commenters stated that the proposed rule does not address how or even whether the proposed 

emissions standards could or should be relaxed or temporarily waived in the event of electric 

grid emergencies, including natural disasters, terrorist attacks, and forced outages, which would 

leave utilities potentially vulnerable to private citizen lawsuits for non-compliance with a CAA 

requirement even if states exercise enforcement discretion. The commenters stated that it has 

presented a reliability safety valve proposal to EPA and urges EPA to adopt the proposal in order 

to ensure that rules and SIPs assess and mitigate reliability impacts and stated that NERC also 

supports a reliability backstop. 

Commenters quoted NERC's Reliability Impact Review which states that strict compliance with 

the proposed timelines will impact reliability. The commenters recommended that EPA work 

with NERC and the industry to develop and adopt a reliability assurance mechanism in the final 

rule. The commenters further suggested that transmission planners and planning coordinators be 

used to analyze the impact of resource changes due to implementation of the proposed rule, and 

that annual evaluations by the planners will anticipate negative reliability effects due to changes 

in generation resources. The commenters stated that if a reliability issue is identified that cannot 

be mitigated over the planning horizon, then a reliability back-stop mechanism will be needed to 

preserve BPS reliability and allow operators to comply within NERC limits. The commenters 

quoted the NERC reliability standard and discussed the effects of changes in load, such as 

possible sharp declines in generation which may lead to operating conditions close to NERC 

reliability limits and give operators few options during emergencies. The commenters stated that 

the backstop must incorporate grid modeling conducted by qualified personnel who understand 
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BPS operations and also allow adequate time for BPS modifications based on the modeling 

conclusions. 

Commenters supported the inclusion of a reliability safety valve (RSV) in the EPA's proposed 

rule to provide flexibility in the event that reliability is adversely impacted by meeting state goals

within the required time frame. The commenters quoted the ISO/RTO Council's proposed review 

process, plan and benefits regarding the reliability safety valve. However, the commenters stated 

that they do not necessarily endorse the specific RSV plan, rather that an RSV plan is essential to 

provide flexibility to address any unforeseen reliability impacts in various state or regional 

planning strategies and to address the associated market risks and uncertainty. The commenters 

provided an example of a situation where an RSV may be needed, such as if compliance plans 

entail a significant increase in variable renewable resources without sufficient flexible ramping 

capability in conjunction with the retirement of baseload resources in order to meet compliance 

goals. The commenters also noted that RTO regions with mandatory capacity markets present 

significant impediments to the construction of new resources, adding risk and uncertainty. The 

commenters stated that reliability safeguards and flexibility measures that allow for interim 

solutions are necessary to guard against adverse impacts to reliability, such as if planned 

resources are not built or cannot obtain affordable financing because of market risk. The 

commenters concluded that incorporating flexibility measure such as an RSV into the Proposal 

will allow for more sustainable implementation strategies and is superior to an immediate 

approach that restricts the states to shorter-term options that sacrifice reliability in exchange for 

full compliance. 

Commenters recommended adopting an RSV process applicable during State Plan 

implementation to address unanticipated grid reliability impacts resulting from the administration 

of the State Plan. The commenters also stated that the RSV process and relief should be separate 

from the enforcement function. 

Similarly, commenters stated that EPA's final guidelines should not exclude states from 

providing compliance exemptions during reliability-critical situations. 

Commenters also stated that relatively long implementation periods could create disconnects 

between actual system conditions during those periods and system topology assumptions utilized 

during the Final Rule and State Plan development stages, and that these disconnects could create 

reliability issues. The commenters recommended, to mitigate potential grid reliability impacts 

that arise over time due to changing grid conditions and/or other unforeseen circumstances that 

the Final Rule include a procedural mechanism (like the RSV) to identify and respond to 

reliability challenges. The commenters stated that consideration of grid reliability should be 

incorporated in the Final Rule to: (1) formalize the requirement to consider grid reliability; (2) 

minimize administrative burdens and/or difficulties for both States and EPA, (3) ensure their 

effectiveness in mitigating impacts to grid reliability; and (4) minimize impacts to the 

achievement of the objectives of the Final Rule. 

Commenters stated that the Final Rule should provide for adequate mitigation of unforeseen grid 

reliability impacts that may arise during the implementation of State Plans and which cannot be 

addressed within the extended compliance time frames. The commenters recommended an RSV 

process that provides relief from compliance schedules, proposed State Plan activities, or 
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performance expectations should be employed, where necessary, to preserve grid reliability. The 

commenters stated that to address state, multi-state, and/or regional grid reliability issues arising 

at that time, the Final Rule should include a mechanism that: (1) is available without initiation of 

enforcement processes and (2) allows for course corrections when State Plan implementation 

strategies cause negative impacts to state, multi-state, and/or regional grid reliability and the 

identified mitigation strategies would not allow the state to return to compliance with the existing 

compliance schedule and/or State Plan goals or performance expectations. 

Commenters recommended that EPA include in its Clean Power Plan a "safety-valve" in the 

event that natural gas prices rise rapidly due to some type of market disruption (for example, a 

large natural disaster or a significant national security issue may cause a temporary price spike in 

natural gas prices, or a sharp curtailment in the availability of natural gas at any price). The 

commenters noted inaccuracies in predictions of future gas prices. 

Commenters stated that EPA must consider a reliability safety valve. The commenters appended 

a document outlining reliability concerns as a result of unforeseen events, such as a turbine loss 

at a nuclear plant that could last up to a year, and possible solutions to accommodating reliability 

issues, including adjusting the single year CO2 rate or the normal averaging time. The 

commenters added that if the averaging time were lengthened, it would be necessary to adjust 

over a period of five or more years to accommodate reaching the normalized state goal to keep 

generation resources critical to maintain reliability on the system until transmission solutions can 

be implemented to ensure retirements or curtailments do not create reliability constraints. The 

commenters stated that periodic state reporting could explain and verify the event, correction, 

and demonstrate the achievement of the goal over the allowed period. 

Commenters stated that based on the existing market-based approach in Michigan, jurisdictional 

issues may arise between the state regulators overseeing implementation of the proposed rule and 

the RTOs managing the economic-based dispatch of all generation, including NGCC units. The 

commenters noted that a fundamental change in this system would be necessary in order to 

account for re-dispatch of NGCC units and suggested that EPA strongly consider a reliability 

safety valve for purposes of meeting electric demand in RTOs. The commenters stated that a 

safety valve will keep generation resources critical to maintain reliability on the system until 

transmission solutions can be implemented to ensure retirements or curtailments do not create 

reliability problems. The commenters added that EPA must consider that some of these units are 

on interruptible gas supplies and will not be able to operate if a shortage occurs. 

Commenters cited FERC, Western Electricity Coordinating Council, Southwest Power Pool, Mid 

Continent System Operator statements and explanations of reliability concerns, the need for 

additional reliability assessments, and the need for a reliability safety valve that would allow for 

the suspension of the program should the electric grid be put at risk by implementation of the 

Rule. The commenters stated that in lieu of "a rational Rule that accounts for the myriad of risks 

imposed on the electric system, [the commenters] strongly argue that this Rule must include 

some sort of failsafe to prevent the economic and physical harm that will accrue to US citizens 

should it be implemented as proposed." 

Commenters also stated that a safety valve is needed which aligns with MISO procedures and 

defines levels of progressive action necessary to ensure reliability, safety and security during 
164 

abnormal operating conditions or emergency situations. The commenters further stated that the 

inclusion of a safety valve during the transition period as the system adapts to changing 

generation and transmission infrastructure will provide a critical buffer enabling the resolution of 

reliability issues with minimal power disruption or unnecessary costs. The commenters noted the 

importance of understanding and recognizing local reliability events and stated that the ability 

for electric utilities to support and restore power during emergency situations should also be 

recognized by EPA due to the unpredictable nature and timing of these events. 

Commenters stated that EPA fails to consider the location of existing units necessary for grid 

stability in the proposed rule and requested EPA account for the generation of the volt-ampere 

reactive power when determining the state-specific goals by subtracting this generation from the 

goal computation. The commenters explained that as units are retired, the operation of the 

remaining existing units will be necessary to provide voltage support and will emit without 

actually generating megawatts for sale while serving as voltage regulators. Commenters also 

recommended that EPA implement a safety valve mechanism that deducts emissions associated 

with energy generation required in must-run conditions due to transmission constraints. The 

commenters stated concerns that the proposed rule will affect the ability to transmit electricity 

from the generating units to the load areas, especially during the timeframe between when the 

proposed rule is final and when the transmission system can be updated to comply with the final 

rule. 

Commenters recommended that an RSV that provides a process for undertaking timely reliability 

assessments at various stages in the process as well as the requisite compliance and/or 

enforcement flexibility to implement any identified reliability solutions. The commenters stated 

that an RSV can help to ensure outcomes that address reliability issues without affecting the core 

policies underlying the 111(d) rule compliance design. 

Commenters also recommended that the proposed rule include an RSV that provides alternative 

compliance options, including deferred timelines for both EGUs and states in circumstances 

where grid reliability is threatened. The commenters added that the safety valve should protect 

states and utilities from penalties/fines and civil lawsuits in the event that the emission targets 

cannot be met due to the need to maintain reliable operations. The commenters suggested that 

one way to effectuate a safety valve would be to ensure that no state, federal, or regional 

implementation plan shall take effect until such time as FERC certifies that the implementation 

plan will not have a detrimental effect on bulk electric system reliability. 

Commenters strongly encouraged EPA to heed warnings in NERC's November 2014 Initial 

Reliability Review and incorporate a "safety valve" or reliability assurance mechanism to keep 

strategically important units online to maintain adequate power supplies to support vulnerable 

sections of the grid. The commenters also recommended that EPA adopt some type of grid 

reliability consultation and protection mechanism that will take into account the incredibly 

challenging prospect of merging individual state implementation plans and regional approaches 

into competitive markets for dispatching power generation. 

Commenters stated that EPA should incorporate a safety valve in the final rule to mitigate 

reliability impacts. 
165 

Commenters stated that the ISO/RTO Council has offered to work with EPA to develop a 

"Reliability Safety Valve" in establishing "processes to assess and, as relevant, to mitigate 

electric system reliability impacts" from the proposed rule as well as other EPA rules. The 

commenters stated that NERC reliability review concludes that "essential reliability services may 

be strained by the and "more time for implementation may be needed to accommodate reliability 

enhancements." The commenters encouraged EPA to work with these organizations to ensure 

that the electric system continues to be able to reliably supply homes, businesses and industry 

with the essential energy they need. 

Commenters stated that it is imperative that EPA incorporate a safety valve in the final rule and 

that the safety valve should mitigate significant reliability impacts due to transmission line and 

natural gas pipeline limitations, recognizing that lengthy permitting, design and construction will 

be necessary. The commenters stated further that not only must EPA provide a mechanism for 

keeping some baseload coal plants online for reliability purposes, EPA must allow utilities to use 

those plants without risk of punitive measures when they are running to fill key capacity during 

times such as cold weather. 

Commenters requested EPA consider allowing states to adopt an emergency provision or "safety 

valve" that would allow carbon-intensive sources to operate beyond permitted emission limits in 

the event that grid reliability is compromised within a region. The commenters stated that 

without natural gas units to provide reliable, base-load, lower-emitting CO2 generation, 

electricity providers will have to rely on higher-emitting coal-fired units in extreme cold weather 

events in the future but doing so could subject the company to prosecution under the CAA. 

Commenters stated that the assumption that coal generation can be one-for-one diverted to 

existing NGCC units is inaccurate, and the magnitude and timing would make the Arizona's 

electric supply unreliable. The commenters stated the NERC report on the CPP cites the need 

for a 10 to 15 year outlook for planning transmission development due to the time required for 

engineering, contracting, siting and permitting, as well as the various federal, state, provincial, 

and municipal approvals required. The commenters stated the CPP interim goals would allow 

for less than a 5 year outlook. The commenters stated that the timing of the final state plan 

approval and the typical five-year timeframe to site and construct new power plants would result 

in real reserve margin declines. The commenters stated that Arizona will need to seek relief 

from the CPP's interim goals in order to maintain grid reliability and security and that EPA 

should include a reliability safety valve mechanism in the final rule. 

Commenters submitted, as an attachment to their comment, an RSV administrative process 

recommended for incorporation into the Final Rule. The commenters’ recommendation 

would limit the scope of entities that are eligible to submit RSV petitions to EPA to those entities 

that have responsibility for grid reliability. In addition, the commenters recommended 

establishing rules related to the reliability assessment to be performed in support of the petition, 

the entities qualified to perform that assessment, the process for submission of such petitions to 

EPA, and the role of relevant regulatory authorities, including the FERC. The commenters 

recommended that the petition be required to identify the reliability issue, provide verification of 

the reliability issue, provide an explanation regarding why the grid reliability issue (state, multistate, and/or regional) cannot be addressed through a State Plan modification, include grid 

reliability assessment, a mitigation strategy, and supporting material. 
166 

Commenters stated that a "reliability safety valve" should allow the extension of time to address 

the reliability issue. Commenters stated the "reliability safety valve" would also allow generating 

units to be excluded from the rule if it can be demonstrated that there is not a cost-effective 

alternative to retiring the unit, and that the generator is needed for reliability. The commenters 

stated further, because FERC and NERC have authority and responsibility to assure reliability, 

they should be allowed to grant the time extension or exception, and EPA should defer to their 

bulk-power system regulatory and reliability expertise in making its decision. 

Commenters stated that Brownouts or blackouts are not acceptable to the public. Commenters 

stated that for this reason, the EPA should include a process to support effective management of 

electric system reliability issues that may arise due to the implementation of the CPP. 

Commenters stated that states should have the flexibility to request a compliance extension 

deadline if they can make the case that reliability is threatened. 

Commenters stated that dangers could be avoided by including a safety valve in its plan, a point 

echoed by officials at the PJM Interconnection regional transmission organization and the North 

American Electric Reliability Corporation. The commenters stated dangers could also be avoided 

if EPA did not require states to make dramatic cuts in GHG emissions by 2020, which is less 

than six years away, front-loading compliance burdens through a rapidly approaching date that 

does not provide adequate time for states to make the major planning decisions necessary to 

comply. 

Commenters stated that it is of crucial importance that EPA study and take into account the 

potential effect of the proposed rule on the reliability of the electric system and the overall 

impact on residential, commercial and industrial customers. Commenters stated that a Reliability 

Safety Valve (RSV) is an appropriate measure that should be included in the rule as a means of 

avoiding potential reliability events in Kansas and the Midwest. 

Commenters stated that Kansas is heavily reliant upon coal-fired generation to provide the 

baseload power and ancillary services, such as reactive power, voltage control, and ramping 

capability are necessary to reliably and economically provide electricity. Commenters stated that 

should the owner/operator of a coal-fired power plant choose to comply with the proposed rule 

by simply retiring a unit or units, system reliability issues could be triggered in certain areas. 

Commenters stated that they support adding a provision that will eliminate compliance penalties 

and allow for revisions to implementation plans in circumstances where reliability needs require 

continued operation of fossil units otherwise scheduled for retirement or reduced operation. 

Commenters stated that there should be an exemption in the rule to use carbon generating 

sources if RE or nuclear sources go off line. Commenters stated that EPA's schedule is 

unrealistic and as a result creates serious risks to the reliability of the electrical system. 

Commenters stated that NERC supports policies that include a reliability assurance mechanism 

to manage emerging and impending risks to the BPS, and urges policy makers and the EPA to 

ensure that a flexible and effective reliability assurance mechanism is included in the rule's 

implementation. 
167 

Response 11: EPA understands the concerns of these commenters but we feel that we have 

addressed them in ways that do not undermine achievement of the goals of the CPP. There are 

numerous features of the final rule, some of which were added to address concerns like these. 

But first we note that there are multiple features in the electricity system that ensure that electric

system reliability will be maintained. Electric system reliability is continually being considered 

and planned for. There are also numerous remedies that are routinely employed when there is a 

specific local or regional reliability issue. These include transmission system upgrades, 

installation of new generating capacity, calling on demand response, and other demand-side 

actions. 

Many aspects of the final rule’s design are intended to support system reliability, especially the 

long compliance period and the basic design that allows states flexibility to include a large 

variety of approaches and measures to achieve the environmental goals in a way that is tailored 

to each state’s energy resources and policies. Indeed, as with numerous prior CAA regulations 

affecting the electric power sector, environmental requirements for this industry are 

accommodated within the existing extensive framework established by federal and state law to 

ensure that electricity production and delivery are balanced on an ongoing basis and planned 

sufficiently to ensure reliability and affordability into the future. Changes that the EPA is making 

in this final rule respond directly to the comments and the suggestions that we received on these 

issues and provide further assurance that implementation of the final rule will not create 

reliability concerns. 

First, the final rule allows significant flexibility in how the applicable CO2 emission performance 

rates or the statewide CO2 goals are met. Given the differing characteristics of the electric grid 

within each state and region, there are many paths to meeting the final rule’s requirements that 

can be taken while continuing to maintain a reliable electricity supply. States can develop plans 

to meet the CO2 emission performance rates or state CO2 emission goals by choosing from a 

variety of state plan types and approaches that afford states and affected EGUs appropriate 

flexibility. EE and other non-BSER approaches can strengthen a state’s ability to establish a plan 

to meet the CO2 emission performance rates or state CO2 emission goals by providing a 

considerable amount of headroom above the levels of the rates and goals. EE especially, because 

it reduces load, can provide assurance that reliability can and will be maintained. Additionally, 

the final rule offers opportunities for trading among affected EGUs within and between states, 

and other multi-state compliance approaches that will further support electric system reliability. 

Second, the final rule provides sufficient time to ensure system reliability. The final rule retains 

the 2030 date for the final period, which commenters largely supported as reasonable and not a 

concern for reliability, and addresses one of the key issues that commenters pointed to as a 

reliability-related concern by both moving the start of the interim period from 2020 to 2022 and 

adjusting the interim goals to provide a less dramatic initial reduction requirement and a more 

gradual glide path to the final 2030 goals. Both FERC’s May 15, 2015 letter and the comment 

record made it clear that providing sufficient time for planning and implementation was essential 

to ensuring electric system reliability. The EPA has responded by provided additional time to 

allow for planning and implementation of the final rule requirements. 

As a result of these changes, the states themselves will have a meaningful opportunity to 

determine the timing, cadence and sequence of actions needed for states and sources to meet 
168 

final rule requirements while accommodating the ongoing activity needed to ensure system 

reliability. The final rule provides more than six years before reductions are required and an 

eight-year period from 2022 to 2029 to meet interim goals. Moreover, while the final rule 

requires each state to submit a plan by August 31, 2016, we recognize that some states may need 

more than one year to complete all of the actions needed for their final state plans, including 

consultation with reliability entities. Therefore, the EPA is allowing an optional two-phased 

submittal process for state plans. If the state needs additional time to submit a final plan, then the

state may submit an initial plan by August 31, 2016, that documents the reasons that the state 

needs more time and includes commitments to concrete steps that will ensure that the state will 

submit a final plan by August 31, 2018. 

Third, we are including in the final rule a requirement that each state demonstrate in its state plan 

submittal that it has considered reliability issues in developing its plan. This was suggested by a 

number of commenters, and we agree that it is a useful element to state plan development. 

Fourth, the final rule provides a mechanism for a state to seek a revision to its plan in order to 

address changes in circumstances that could have reliability impacts if not accommodated in the 

plan. The long compliance timeframe, with several interim steps, naturally provides 

opportunities for states, working with their utilities and reliability entities, to assess how 

implementation is proceeding, identify unforeseen changes that may warrant plan revisions, and 

work with the EPA to make necessary revisions. 

Finally, in response to a variety of comments, we are providing a reliability safety mechanism 

that provides a path for a state to come to the EPA during an immediate unforeseen, emergency 

situation that threatens reliability to inform the EPA that an affected EGU or EGUs may need to 

temporarily comply with modified emission standards to respond to this kind of reliability 

concern. See section VIII of the preamble for a discussion of the safety valve. 

Commenters stated that NERC supports policies that include a reliability assurance mechanism 

to manage emerging and impending risks to the BPS, and urges policy makers and the EPA to 

ensure that a flexible and effective reliability assurance mechanism is included in the rule's 

implementation. Commenters stated that plan should have reliability assurances built into it 

similar to MATS. Commenters stated that EPA recognized that overly aggressive schedules for 

implementation could undermine the reliability of the electric utility sector, and wisely provided 

for a reliability safety valve. Commenters stated that EPA should recognize that this rule also 

poses significant risks to reliability. 

Comment 12: Commenters stated that a reliability safety valve is not needed for the CPP. 

Commenters specifically referenced an analysis from Southwest Power Pool (SPP) [SPP 

Reliability Assessment of EPA 111(d) Clean Power Plan Rule, SPP (Aug. 19, 2014), 

http://www.spp.org/publications/SPC%20Materials%20081914.pdf.] wherein SPP stated that the 

rule "would shrink the region's 'reserve margin' (the percent by which generating capacity 

exceeds expected demand) from 13.6 to 4.7 percent by 2020, and to -4.0 percent in 2024." 

Commenters noted one issue with the analysis in that "it assumed that almost 15 percent of the 
169 

region's power supply would retire without replacing it with any new power sources or demandside management." Commenters stated that "Those conclusions are not, however, based in the 

reality of what CPP is expected to accomplish or how resource planning unfolds: the CPP 

objectives will be reached only if states invest in renewable resources, demand-side management 

strategies, and other new, low-carbon emitting generation." According to commenters, "Nothing 

in the rule requires that any of the coal-burning capacity in SPP retire, much less prior to other 

generation coming online." 

Commenters further stated that "SPP is well-positioned to transition under the Clean Power Plan, 

given that it achieved a reserve margin of 47 percent in 2013 and has not had a margin below 32 

percent in the last six years at least (both numbers are far above its 13.6 percent requirement), 

and that it is located in the heart of our nation's strongest potential regions for wind power 

production." Assuming the SPP and its member states plan for the transition, commenters noted 

that "it should have no difficulties ensuring resource adequacy." 

Commenters also referenced an analysis from Electric Reliability Council of Texas (ERCOT) 

[ERCOT Analysis of the Impacts of the Clean Power Plan, ERCOT (Nov. 17, 2014), 

http://www.ercot.com/content/news/presentations/2014/ERCOTAnalysisImpactsCleanPowerPlan.pdf] wherein ERCOT "predicts retirement of between 5.7 and 7.8 GW 

of electricity generation capacity between now and 2029 under the CPP (compared to a baseline 

of 2.8 GW of retirements), and addition of 16.9 to 19.3 GW of new generation, about 90 percent 

from wind and solar alone (compared to baseline of 14.5 GW of new generation, about twothirds from wind and solar)." Commenters noted that "ERCOT's model does predict a capacity 

constraint sometime between 2018 and 2022, when coal plants are trying to retire and 

renewables have not yet been fully built out" but "ERCOT's concerns are unfounded because the 

CPP provides enough flexibility that, if necessary, coal plants can continue operating early in the 

compliance period." Commenters also noted that ERCOT "can and should supplement alreadyplanned major transmission line improvements with additional projects serving load centers in 

the state, and as a last-resort (as ERCOT acknowledges), it can keep coal plants operating using 

reliability-must-run contracts to cover identified shortfalls, or shift generation from existing coal 

to gas units." 

Commenters also noted the following flaws in the ERCOT modeling assumptions: 

• "ERCOT assumed, without any apparent basis for this assumption, that Texas 

would enact a flat price on greenhouse gas emissions to meet its obligations under 

the CPP." 

• "the third scenario applied CPP limits in the most cost-effective way possible, 

supposedly to determine the ideal compliance option, but that study requires 

ERCOT to meet the applicable emission rate goal every year, thereby failing to 

take advantage of the 2020-2029 compliance averaging, which is one of the CPP's 

key flexibility mechanisms." 

• "ERCOT also dismisses that scenario as unrealistic because it may not be 

achievable 'within the current electricity market design in ERCOT'" but "there is 

no requirement that the current market design remain in place: ERCOT can 
170 

clearly redesign its market to accommodate faster market changes, and in fact 

already is looking into redesigning its ancillary services market to accommodate 

distributed generation (and demand response resources)." 

• "ERCOT also assumes efficiency gains of just over half EPA's projections by 

relying on historical trends instead of considering future potential; and it assumes 

the current Production Tax Credit (which has incentivized huge wind build-out in 

the state) will expire with no replacement, even though that would be an easy way 

to continue the current rate of wind generation construction." 

• "And finally, ERCOT's model does not include any "negawatts" for demand 

response services, which could be a huge contributor to the reliability of Texas's 

power grid." 

Commenters referenced the PJM reliability analysis [PJM Reliability Review] and noted that 

"PJM apparently believes that six states (Ohio, Pennsylvania, New Jersey, Kentucky, Virginia, 

and Maryland) will meet their 2020 interim targets simply by following through on planned coal 

retirements in their states." Although commenters disagreed with this analysis because "we 

believe PJM used a higher mass cap on emissions than will be allowed under the CPP," 

commenters stated that the "analysis nonetheless demonstrates, at least in the PJM region, that 

the CPP will not impose any insurmountable burden on those states' power grids, and belies 

PJM's contention in public forums that policy protections are needed to ensure grid reliability." 

Commenters stated that a safety valve is not necessary in this rule and noted the following: 

• it would seriously impact greenhouse gas emissions by allowing old, dirty plants 

to continue operating well past when they would otherwise retire. 

• it would reduce motivation for regional and state grid operators to actively 

prepare for changes in customer demand, and related power needs and supplies of 

the future" 

• significant advanced planning, and coordination with states in designing their 

plans, will be required to ensure power grids are equipped to manage our 

changing resource structures. "A safety valve provision would undermine those 

conversations by removing a base level of accountability, and would therefore 

leave us less prepared in the long term." 

• "the provision proposed by IRC would impose a huge administrative cost on EPA, 

states, and grid operators, all of which would be required to go through a 

reliability determination and approval process at several stages throughout the 

plan approval process." 

• Each additional administrative decision could be subject to challenge by industry 

or environmental groups, which could make the CPP implementation process 

even more difficult than the plan approval process already can be. 
171 

• While supportive of state coordination with the ISO/RTO and neighboring states, 

commenters did not believe that the "formalized veto process proposed by the 

IRC will be constructive." 

• "The ISO/RTOs already have mechanisms such as reliability-must-run 

requirements as a final measure to ensure system reliability." 

• "none of the justifications leading EPA to limit its enforcement of MATS 

obligations come into play here 

Commenters stated that State plans should require that emissions from plants needed for grid 

reliability purposes are offset with emissions credits elsewhere. The commenters supported RTO 

and other planning regions' overriding interest and mandate to preserve and enhance grid 

reliability; however, commenters stated that the reliability safety valve as proposed by the 

ISO/RTO council is unnecessary. The commenters stated that the CPP essentially has three 

"reliability safety valves" already embedded in the structure of the rule: i) flexibility to take 

advantage of a broad array of system resources, including both supply-side and demand-side 

resources; ii) an extended compliance period spanning at least 10 years and multi-year 

averaging; and iii) compliance flexibility, including emissions trading and averaging to avoid 

mandating reductions at any individual plant, or at any specific period of time. 

Response 12: EPA agrees that it is highly unlikely, given the many features of the electricity 

industry that safeguard reliability and the many flexible options in the final rule, that there could 

be a conflict between maintaining reliability and operations under the requirements of a state 

plan. But among the flexibilities given the states is the option to design a plan that places very 

rigid and inflexible requirements on specific affected EGUs. If a plan has such requirements it is 

possible that a severe, unanticipated event could put such a requirement on a specific affected 

EGU in conflict with what needs to be done to maintain reliability. In that case, if certain 

conditions are met, the affected EGU can operate for 90 days only, above the level called for in 

the state plan. The state however must meet its goal. If the problem reoccurs the state must revise 

its plan to avoid such conflicts. 

Comment 13: Multiple commenters stated that a complete and proper grid reliability analysis 

was not conducted. 

Commenters noted "The current electric power grid has evolved incrementally over the last 40-

plus years to provide a reliable supply of power in support of the current mix of generation 

assets." Commenters stated, "The changes being proposed by the EPA in the proposed timeframe 

will dramatically change use of the current system and will need to be thoroughly evaluated, 

modified as necessary, and implemented in a timely and responsible manner to avoid imposition 

of unnecessarily high costs and reliability risks to customers." 

Commenters stated, "The extensive work by states to implement the carbon rule requires that 

each generator and the entire system be evaluated" making this "an ideal opportunity to assess 

potential climate vulnerabilities and needed resilience measures to protect the electric system." 
172 

Commenters stated that "EPA has not demonstrated that reliability constraints permit redispatch. 

Commenters asked that EPA consider "whether state's NGCC fleets can reliably operate at a 

70% capacity factor. Commenters noted that "A 70% capacity factor would change the purpose 

and design of the nation's NGCC fleet at large, and EPA must consider whether fleets by state or 

NERC reliability zones can operate reliably at such a capacity factor." 

Commenters asked that "a detailed unit commitment dispatch analysis should be conducted to 

ensure reliable operation of the system with increased renewable generation." 

Commenters stated that "EPA's purported grid reliability analysis is made obsolete by the D.C. 

Circuit's decision in Electric Power Supply Ass'n v. FERC, 753 F. 3d 216 (D.C. Cir. 2014), in 

which the Court struck down FERC's authority to implement mandatory demand-response 

measures" which have become a "major part of the way grid operators ensure that reserve 

margins are met." Commenters further noted that "the court's decision will have a very 

significant effect on the ability of grid regulators to maintain adequate reserves." 

Commenters stated "the EPA has not given sufficient consideration to the impacts its proposal 

will have on organized electricity markets and the challenges that the proposal presents to system 

reliability and the economy." 

Response 13: The final rule requires that every state consider reliability as a part of its 

development of a state plan. We have suggested that a very good way of doing that is to consult 

with the grid operator. In addition please see the Technical Support Document on resource 

adequacy in the docket for this rulemaking. Regarding concerns about whether the NGCC fleets 

can reliably operate at a 70% capacity factor the preamble to the final rule has a full description 

of the basis for Building Block 2 which is a gradual shifting of generation from existing fossil 

steam to existing NGCC within each region up to a maximum NGCC utilization of 75% on a net 

summer basis. In that section EPA discusses the technical basis for using this as a part of BSER, 

taking into account important factors such as reliability of the electric system, natural gas 

infrastructure, natural gas production potential, transmission planning and cost considerations. 

Please see Chapter V.D. of the preamble. In addition there is a Technical Support Document, 

entitled GHG Mitigation Measures Technical Support. This Technical Support Document also 

discusses renewable energy feasibility. The Preamble to the rule addresses considerations for 

feasibility of the 2030 level of RE deployment, and the rate of progress during the interim period 

in getting to that level, in section V.E on building block three of the preamble to the final rule. 

RE feasibility is addressed in more detail in the GHG Abatement Measures technical support 

document. EPA found that these levels were supported by comments received, DOE analysis, 

and external studies evaluating the costs of and potential for higher levels of RE 

penetration. Finally, commenters are most likely aware that the US Supreme Court has agreed 

to review the D.C. Circuit's decision in Electric Power Supply Ass'n v. FERC, 753 F. 3d 216 

(D.C. Cir. 2014), 
173 

Comment 14: Multiple commenters stated that the reliability analysis conducted by EPA and the 

use of the Integrated Planning Model (IPM) to determine reliability is not appropriate and the 

analysis is flawed. 

Commenters stated that the analysis is flawed "because it does not consider potential subregional supply deficits below the 64-subregion level provided by the IPM model, and assumes 

large-scale reductions in electric demand resulting from the rule's energy efficiency building 

block. These reductions may not occur either because states do not pursue them, or efficiency 

goals are not met due to economic growth or other factors." 

Commenters noted that the NERC study stated that "EPA's modeling of its proposed rule 

assumptions is not a detailed system evaluation. According to commenters, the IPM "lacks the 

granularity and realism capable of identifying the real risk of the proposed ESPS at the 

operational level." Commenters stated, "The necessary details to assess reliability are simply 

missing from EPA's model." Commenters noted the following areas where the IPM analysis was 

insufficient: 

• IPM dispatches on a seasonal basis using load duration curves and regional load 

shapes, which is a "gross generalization of actual real-time dispatch practices." 

• IPM does not effectively model individual power plants, 

• does not model the random intermittency of wind and solar, 

• relies on an "unrealistic, simplified industry structure (i.e., 64 model regions in 

lower 48 States as proxies for the actual utilities and transmission operators)," 

• relies on an even more "simplified 'model" of natural gas supply and demand." 

Commenters noted that "The EPA's parsed IPM results for 2025 indicate that many NGCC units 

do not retire, but are projected to have zero generation." Commenters asked how zero generation 

is "different from retirement?" and why are these units are "not modeled as retiring?" 

Commenters stated that "The models used by the RTOs, ISOs, and NERC are more appropriate 

for assessing electric system reliability than is the EPA's Integrated Planning Model (IPM), and 

these organizations also have planning expertise that could promote a more robust analysis." 

Commenters stated that the Resource Adequacy and Reliability Analysis TSD contains "broad, 

unsubstantiated generalizations about the existing transmission system to imply that the proposal 

will have little impact on system reliability." According to commenters, "Experts and key 

stakeholders disagree with this approach, its conclusion, and with statements from EPA 

Administrator Gina McCarthy such as 'nothing we do can threaten reliability.'" 

Commenters stated, "EPA's use of the Integrated Planning Model does not assess the impact of 

the proposed rule on system reliability because the model is not capable of incorporating 

operating reserve requirements, actual transmission system constraints, or variable resources 

with sufficient granularity." 
174 

Commenters also noted that the IPM does not "adequately model transmission constraints or 

system reliability that may be associated with retiring and adding generation resources." 

According to commenters, IPM recognizes known transmission capacity constraints by 

"limit[ing] the ability to transfer power between regions to certain values for each transfer path" 

but "because the actual transmission system is not modeled, simulation results from the IPM 

cannot predict the performance of the transmission system itself." 

Commenters also noted that the IPM is "insufficient to address reliability issues associated with 

increased wind and other variable resources." According to commenters, "Generation may only 

be added if it does not compromise the stability or reliability of the transmission system" which 

requires "detailed system impact and facilities studies." Commenters noted that "the hourly 

outputs of variable resources are typically modeled in production cost programs using a variety 

of simulation methods" and "the outcomes of these simulations are used to assess the range and 

probabilities of possible impacts." According to commenters, "variable resources are represented 

in IPM in one or more simulations where their output is modeled as an average expected value" 

and "does not accurately simulate transfers across constrained paths because constraints are 

expected to occur at the resources' respective maximum outputs." 

Commenters noted that EPA's IPM analysis results in the Birchwood plant shutting down or 

idling for multiple years under three of the four scenarios. Commenters stated that two of the 

options have the Birchwood plant idling for multiple years and then being reactivated for 

multiple years. Commenters noted the following concerns with this result: 

• "Birchwood would continue to have substantial fixed and variable costs, including 

its loan payments, ongoing maintenance, and its staffing needs. It is quite unlikely 

that the Birchwood plant could remain viable for long if it is not earning revenues 

sufficient to meet its fixed and variable O&M costs." 

• "Moreover, idling a facility, even temporarily, opens up a host of issues regarding 

the plant's permitting status, including whether the air permit remains in full force 

and effect." 

• "Finally, PJM rules require a plant that has been mothballed for three years to 

surrender its interconnection rights. To re-connect, the plant is considered as new 

generation and would likely incur significant costs to upgrade the PJM grid if it 

wanted to begin generating power after that time." 

• "It is quite likely that if the Birchwood plant is idled for the periods indicated in 

the IPM modeling, it will not return to service." 

Commenters stated that there were "flawed assumptions used by the EPA when it evaluated the 

re-dispatch of coal-fired generation to NGCC." According to commenters, "The most likely 

outcome of the proposed policy is that the state's utilities will be left with the difficult decision of 

whether to jeopardize electric reliability in Arizona, risk noncompliance with the proposed 

carbon reduction goals, or spend exorbitant amounts of money to offset flawed assumptions." 
175 

Commenters stated, "EPA's assumptions about reduced coal usage in Montana are infeasible 

because 'the reduction that EPA assumes relative to Big Stone[, for example,] would result in the 

plant operating at 23 percent of its capacity" while "its minimum run level is 40 percent.'" 

Commenters stated that the IPM analysis consists of "inconsistent assumptions concerning the 

loss of investments, the number and timing of unit retirements, and the number and timing of 

new construction." 

Commenters noted that several studies on the impact of renewables on power system operating 

requirements have been conducted during the past decade. According to commenters, "These 

studies show that requiring an increased operating reserve is one of the major operating impacts 

due to higher-level penetration of wind generation." Commenters stated that EPA has not 

"analyzed these studies or conducted any additional study to support the feasibility of the 

substantial increase of wind generation." Commenters asked that a "detailed model mimicking a 

system's actual scheduling, dispatch, and regulation processes and timelines is needed to study 

the impact of renewables on operating reserve requirements." Commenters noted that "Minuteto-minute variations and statistical interactions of the system parameters involved in these 

processes need to be depicted with sufficient details to provide a robust and accurate assessment 

of the additional operating reserve requirements caused by higher penetration of renewable 

resources." Commenters stated, "In addition, a detailed model that more accurately represents the 

time lags in the dispatch system and in generator response to dispatch commands is needed to 

capture the variation of increased operating reserve requirements with the season, month, and 

hour." 

Commenters noted "To avoid system overloads and violations of mandatory reliability standards 

required and approved under federal law, system operators must continually monitor thermal, 

reactive, and stability limits on the transmission system." Commenters added that "System 

planners must also consider such limits when evaluating, through the use of power flow models, 

where and when new transmission facilities are needed." Commenters noted that the IPM 

analysis ignores such constraints. 

Commenters stated that the IPM analysis "ignores real-world barriers to resource development" 

and that "system dispatch is subject to localized constraints that impede the flow of electricity 

across broad regions, including intra-regional transmission constraints, particularly around 

metropolitan areas." According to commenters, "These constraints create transmission-congested 

'load pockets' with limited access to remote resources" meaning that "certain local, primarily 

coal, units cannot be retired because they are needed to maintain voltage levels and to assure 

'black start' capability (to bring generation on line quickly in the event of a system emergency)." 

Commenters stated that "EPA's modeling replaces the 2,851 MW of fossil-fuel generation it 

projects will retire in the Dominion transmission zone by 2020 with only 351 MW of intermittent 

onshore wind." Commenters stated "It is not clear how EPA concludes (if indeed it has) that 

reliability could be maintained in the Dominion transmission zone." 

Commenters stated, "IPM fails because the model builds as many new natural gas units as are 

necessary to meet reserve requirements" but "the construction of new natural gas units may be 
176 

constrained by numerous factors, including the need to obtain sites and regulatory approvals and 

to bid into capacity markets where applicable." 

Commenters noted, "EPA's use of a generation resource adequacy model to determine whether 

the transmission grid will operate reliably is arbitrary and capricious. Sierra Club v. Costle, 657 

F.2d 298, 333 (D.C. Cir. 1981), rev 'd on other grounds, 463 U.S. 680 (1983) (A model may not 

be used for purposes that 'exceed the bounds of its usefulness.')." According to commenters, this 

is no small matter because 'local' grid reliability impacts can have cascading effects over a broad 

region." 

Commenters noted modeling shows that there are several units operating at low revenues and/or 

low capacity factors that would likely be retired, especially when other non-modeled factors are 

taken into account. 

According to commenters, "Based on a review of capacity factors and operating revenues for the 

remaining coal units, ERCOT anticipates the retirement of an additional 2,000 MW of coal 

capacity and the seasonal mothball of 1,000 MW of coal capacity beyond what is specified in the 

model output." 

Commenters noted "The EPA's assumptions regarding costs and resource adequacy are deeply 

flawed, and the Proposed Rule generally ignores the extreme reliability challenges created by the 

rapid, unrealistic transition envisioned by the Proposed 

Commenters stated that EPA's reliability analyses were inadequate because they did not consider 

potential electricity supply deficits below the 64-subregion level of the IPM model, and 

erroneously assume large-scale reductions in electric demand resulting from the rule's energy 

efficiency building block. The commenters also stated that EPA's assumption that, within each 

model region, adequate transmission capacity exists in in contrast to the latest NERC Long Term 

Reliability Assessment which projects that many electric supply regions will fail to meet 

reference reserve margin levels in 2023. 

Commenters stated that the CPP is not based on any detailed reliability analysis and would force 

the electric system to evolve without considering activities such as planning and analysis that 

must precede such changes. The commenters stated that the transmission grid is not prepared to 

accommodate the sweeping changes in the generation portfolio that would result from the coal 

retirements and addition of substantial new renewable generation associated with the CPP. 

Commenters stated that EPA has provided no analysis to validate the claim that local grid 

reliability issues can be managed using the flexible resource option and timeframes in the rule, 

and that developing the transmission necessary to address reliability in time to achieve building 

blocks 1 and 2 reductions by 2020 is not achievable. 

Commenters stated that EPA's goals do not consider reliability issues of the interconnected 

power system or the interaction between building blocks, and thus the costs and time required to 

meet the goals have not been accurately estimated. 
177 

Commenters stated that EPA failed to conduct an adequate reliability analysis to determine the 

extent of potential improvements needed in order to maintain reliability with the implementation 

of the proposed rule. The commenters cited EPA-HQ-OAR-2013-0602-24030 A3; Attachment 

ID 2501, pg 76-98, which "indicates up to $2 billion in potential improvements may be necessary 

on the AEP transmission system alone as a result of the proposed rule". The commenters stated 

that EPA must thoroughly evaluate and weigh costs associated with transmission upgrades in the 

RIA for the proposed rule. 

Commenters stated that EPA has failed to evaluate the impact that Building Block 2 will have on 

grid reliability. 

Similarly, commenters stated that a more robust analysis of the impacts the CPP will have on 

energy consumption and infrastructure must occur before this rule is adopted due to reliability 

and electricity price concerns. 

Commenters stated that EPA has proposed this rule without due regard to its effect on reliable 

operation of the electric grid and EPA's reliability analysis is wholly inadequate. The 

commenters further stated that EPA has failed to substantively engage FERC and NERC, which 

was not engaged to study, model and simulate the effects of the proposal. The commenters also 

noted that RTOs have raised questions and that until such time as NERC has validated the 

reliability of the proposed rule, it must be delayed pending such validation by NERC. 

Commenters stated that EPA needs to balance concern for the environment with reliability and 

cost. The proposed rule contains virtually no discussion of its impact on electric system 

reliability and cost to consumers. The commenters added that the proposed rule does not take 

into account increased costs to consumers, as utilities pass on potential higher operating costs 

due to increased reliance on natural gas and the need to invest in new, potentially higher cost 

technology to comply with the rule, nor does it take into account the potential cost to society that 

may result from reduced reliability. The commenters further noted that the environmental 

benefits of the rule could well be counterbalanced by reduced reliability and substantial cost 

increases to residential consumers and businesses. 

Commenters stated that concerns about grid reliability are incomplete, stating the NERC report 

fails to consider several factors such including additional renewable generation. 

Commenters stated reliability and cost modeling analysis does not adequately address the 

reliability implications of the proposed rule which predicts that Arizona would take a 

significantly different approach to meet the CO2 goals than EPA assumed in setting those goals. 

The commenters said both approaches are unrealistic and do not accurately reflect the path that 

Arizona would likely follow to meet EPA's stringent CO2 goals. The commenters said EPA's 

Reliability and Cost Modeling Analysis is premised on an inappropriate reliance on out-of-state 

imports, erroneous assumptions about power plant ownership, and overly aggressive energy 

efficiency assumptions, and both the target setting and compliance analyses are flawed and fail 

to properly reflect how the rule will affect reliability of energy availability in Arizona. 

Commenters stated an assessment performed by PACE Global concluded EPA's interim goals 

would generate the following reliability concerns in Arizona: 
178 

• All non-tribal coal in Arizona would need to be retired by 2020, implying a 

stranded investment of more than $3 billion. 

• Coal retirements would result in the need for at least 2.4 GW of incremental 

natural gas capacity within a 3-year period at a cost of around $2 billion to 

maintain reserve margins. 

• Additional electric transmission infrastructure would be required to ensure 

electric reliability and deliverability since most coal generation is in the eastern 

part of Arizona and most of the existing natural gas generation is in western 

Arizona. 

• Additional natural gas pipeline infrastructure would be required to support the 

two existing main natural gas pipelines serving Arizona since one is already near 

capacity throughout the year and both are near capacity during peak periods. 

Commenters stated that changes to the mix of generation resources require a full assessment of 

the capabilities of the transmission grid from utilities, cooperatives, balancing authorities, and 

many others, and that EPA has failed to complete an adequate reliability analysis. The 

commenters noted that during implementation of the MATS rule, regional transmission 

authorities played a critical role in protecting the grid from the unintended consequences of 

generator retirements by working with state authorities and generators review compliance plans 

and identify the activities and construction projects necessary to maintain reliability in those new 

configurations. The commenters stated that the MATS assessments indicated the need for 

additional time, and states worked with generators to provide the needed flexibility in 

scheduling. 

Commenters stated that assessments by individual RTOs, the NERC, and others indicate that 

new generation and transmission expansion will be necessary to maintain regional reliability 

standards and avoid widespread reliability concerns as an estimated 46 and 49 GW of baseload 

generation is retired. The commenters remarked that EPA has failed to meet their obligation to 

adequately evaluate reliability impacts that may have significant impacts on public health and 

welfare, rendering the proposal arbitrary and capricious. 

Commenters added that a reliability analysis studies to evaluate the impacts of both retiring 

generation and integration of new generation resources must be performed by RTOs and other 

regional entities because any modifications to electric generation or transmission in one state will 

inevitably impact surrounding states due to the interconnectedness of the electric power system. 

The commenters requested that, under the guidance of NERC, regional and interregional 

comprehensive assessments of reliability be mandated because it will be impossible for states 

that have facilities in multiple RTOs to develop a compliance plan without interregional 

coordination. 

Commenters discussed the proposed rule's impacts on generation resources and stated that if 

implemented as proposed, the propose rule will cause a realignment of the BPS transmission 

system to new gas fired generation and/or non-emitting energy resources. The commenters stated 

that the realignment must be studied for the reliability impact to the whole system. The 
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commenters provided the loss of inertial mass on the BPS system as one example impact, which 

provides stability during a fault or loss of a major generating unit. The commenters stated that 

the loss of inertial mass may cause a cascade in faults and blackouts. 

Commenters stated concern that proposed rule will not preserve the reliability of the bulk power 

system unless significantly modified. The commenters discussed the history and intent of the 

NERC reliability standards and supports NERC's statement that "industry stakeholders and 

regulators will need to develop an approach that accommodates the time required for 

infrastructure deployments, market enhancements, and reliability needs if the environmental 

objectives of the proposed rule are to be achieved". The commenters encouraged EPA to 

incorporate a detailed and thorough BPS reliability analysis into the final rule to inform the 

reliable integration of new resources and decommissioning of old resources, assure that all flows 

of electricity are balanced and help system operators respond to unexpected loss of equipment to 

prevent a blackout, cascade or uncontrolled separation of equipment. 

Commenters listed the many types of local and regional reliability assessments required to 

demonstrate reliability. Commenters provided recommendations to: NERC in order to continue 

to assess the reliability implications of the proposed CPP and provide independent evaluations to 

stakeholders and policy makers; to regional and multi-regional industry planning and analysis 

groups to perform reliability assessments and coordinate with states to ensure SIPs are aligned 

with what is technically achievable within the known time constraints, and to policy makers and 

EPA to make timing adjustments and to grant extensions in order to address reliability concerns 

and infrastructure deployments. Commenters stated that the final rule must take into account the 

complexity of reliable BPS operation and that further study to plan for changing loads, to operate 

within system performance standards. 

Commenters quoted the following four primary impact recommendations identified by NERC: 

• "Fossil-Fired Retirements and Accelerated Declines in Reserve Margins" The 

Regions, ISO/RTOs, and states should perform further analyses to examine 

potential resource adequacy concerns. 

• Transmission Planning and Timing Constraints. EPA and states, along with 

industry, should consider the time required to integrate potential transmission 

enhancements and additions necessary to address impacts to reliability from the 

Proposed Rule. EPA and policy makers should recognize the complexity of the 

reliability challenges posed by the rule and ensure it provides sufficient time for 

the industry to take the steps needed to significantly change the country's resource 

mix and operations without negatively affecting BPS reliability. 

• Regional Reliability Assessment of the Proposed CPP. Other ISO/RTOs, states, 

and Regions should prepare for the potential impacts to grid reliability, taking into 

consideration the time required to plan and build transmission infrastructure. 

• Reliability Assurance. EPA, FERC, DOE, and state utility regulators should 

employ the array of tools and their regulatory authority to develop a reliability 

assurance mechanism, such as a "reliability back-stop." These mechanisms 
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include timing adjustments and granting extensions where there is a demonstrated 

reliability need. 

The commenters stated that they support NERC's initial reliability review and recommended that 

EPA take into account the issues identified as well as NERC's anticipated 2015 Special 

Reliability Assessment prior to developing the final rule and implementation timelines. 

Commenters discussed the importance of ancillary services and stated that "even the seemingly 

simple decision to close a single fossil base load unit and replace it with a renewable generator 

requires consideration of, at least, the availability of sufficient generation to meet demand, the 

need for ramping and back-up power, the availability of natural gas supplies and the 

infrastructure to deliver it, the impact on the transmission system and the need to maintain 

inertia, frequency and voltage control." The commenters stated that a simultaneous feasibility 

study, which is both time and resource intensive, must be done to determine whether the 

electricity actually can be moved from the point of production to other points on the transmission 

system. Commenters stated that the results of the study determine whether transmission upgrades 

or expansions are needed to accommodate the increased generation. Commenters stated 

managing these considerations requires a significant amount of rigorous and time-intensive study 

and coordination. 

Commenters stated that that the proposed guidelines will require major changes to the way the 

interconnected power system is planned and operated in order to ensure reliability while 

achieving emission reductions, and that given the interconnected nature of the system, specific 

reliability impacts and necessary system changes cannot be assessed and coordinated until after 

all state compliance plans are finalized and approved, which will not be until 2017 at the earliest. 

The commenters stated that as a practical matter, this schedule does not allow adequate time for 

the needed reliability assessments and system changes to be accomplished before 2020. The 

commenters stated that changes to the interconnected power system require close management to 

ensure continued reliability. The commenters stated that retiring a coal based EGU reduces the 

ability to arrest and stabilize system frequency following a grid disturbance or the loss of a large 

generator, even if the capacity is replaced with renewables. The commenters stated that 

replacing the coal-based units with increased generation from an existing NGCC unit may be 

feasible, but this requires other assessments to determine if the transmission system can accept 

this increased generation or if transmission or interconnection modifications first will need to be 

made. The commenters further noted the importance of ensuring that increased amounts of solar 

photovoltaic generation do not lead to decreased system inertia and frequency response 

capabilities that are critical for maintaining reliability, and that voltage support concerns also 

must be addressed. The commenters also stated that in order for electric utilities, states and other 

regulators to fully realize the potential benefits of increased DSM and EE measures, there must 

be close coordination between entities responsible for DSM and EE to ensure appropriate 

capacity values are estimated and that assuring adequate measurement and verification of the 

load response, will require advanced metering, load curtailment technologies and two-way 

customer communications. 

Commenters stated that the anticipated changes in the resource mix and new dispatching 

protocols will require comprehensive reliability assessments to identify changes in power flows 

and Essential Reliability Services including (1) load and resource balance; (2) voltage support; 
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and (3) frequency support. The commenters stated that more transmission and new operating 

procedures may be needed to maintain reliability. 

Commenters stated that as the EPA is scheduled to finalize its rule by June 2015, NERC will 

develop a specific reliability assessment in early 2015 that will focus on evaluating generation 

and transmission adequacy and reliability impacts. The commenters stated that after the EPA rule 

is finalized, the states, either individually or in multi-state groups, are required to develop their 

SIPs by 2016 and 2018, respectively and NERC plans to provide a more specific and 

comprehensive reliability assessment before SIPs are submitted to the EPA. The commenters 

further stated that a Phase III approach is tentatively planned for December 2016, which will 

examine (generation and transmission adequacy and reliability in light of) finalized SIPs. 

Commenters stated that NERC has issued an initial reliability review of EPA's Proposed 

Guidelines that has identified numerous serious concerns. The commenters stated that NERC is 

planning to conduct three more special assessments between now and December 2016 to 

evaluate more comprehensively the impact of EPA's Proposed Guidelines and of the state plans 

that will be submitted if the Proposed Guidelines are not withdrawn. The commenters 

recommended that EPA pause and reconsider the feasibility of the Proposed Guidelines. 

Commenters cited concerns of NERC and RTOs that if possible, the guidelines would take 

longer to implement than EPA envisions due to required approval time, and time for construction 

of generation and transmission capacity. The commenters cited RTO concerns that the proposed 

schedule would result in decreased reliability and increased costs. 

Commenters stated that curtailment of coal plants will result in localized voltage sag and other 

operational issues and will require reliability studies to assess voltage/reactive power control 

issues; how to replace frequency response, inertial support, and ramping capability provided by 

retiring units; and the necessity of potential transmission upgrades. 

Commenters stated EPA should perform state-specific analysis of transmission and grid 

capability to ensure that renewable goals set for states are not established at levels that pose 

threats to transmission capacity and grid reliability. The commenters stated the ability to 

construct new wind energy facilities in Montana and neighboring Western states is limited by 

transmission system constraints and grid reliability referencing studies performed by the WECC 

in which the path constraints of the transmission lines from Montana to the Northwest were 

pushed to the limit, resulting in energy generated but not transmitted nearly half of the time. The 

commenters stated EPA's proposed regulation has failed to identify the monetary costs and 

timeline delays associated with constructing or upgrading transmission lines and building 

sufficient generators to ensure the provision of ancillary services to renewable generators. 

Commenters stated that the changes being proposed by the EPA in the proposed timeframe will 

dramatically change use of the current system and will need to be thoroughly evaluated, 

modified as necessary, and implemented in a timely and responsible manner to avoid imposition 

of unnecessarily high costs and reliability risks to customers. The commenters noted that other 

parties have documented that the costs to consumers due to the Clean Power Plan proposal will 

increase significantly. The commenters stated that they continue to advocate that the EPA work 

closely with the regions, the states and all interested parties to ensure that any final CO2 rule 
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maintains bulk electric system reliability compatible with a reliable, efficient market dispatch of 

available generation. 

Similarly, commenters noted that the installation of new capacity is likely to approach and 

potentially exceed 20% of the total installed base, which could jeopardize the ability of the 

changing resource mix to adequately fulfill peak demands over the course of a year. The 

commenters stated that improved modeling will be required to determine the capability of the 

changed resource mix to reliably serve load. The commenters supported the "development of 

probabilistic planning tools to assist in scenario-based studies that determine likely on-peak 

availability of the variable energy resources as well as hydro generation, and natural gas 

deliverability." 

Commenters stated that models such as IPM are inadequate for identifying future reliability 

issues, and do not address critical issues such as balancing supply with demand while 

maintaining voltage, frequency, and other criteria. The commenters stated that detailed 

transmission reliability studies are required to identify these issues and determine the supply and 

transmission changes required to meet FERC requirements to maintain Bulk Electric System 

(BES) reliability, and until such studies are completed, the costs and schedules for measures 

required to maintain BES reliability cannot be accurately determined. 

Commenters stated that preliminary evaluations of the CPP's proposed standards have limited 

value and do not realistically model contributions from energy efficiency, demand response, and 

renewable energy in achieving compliance and maintaining grid reliability. The commenters 

stated that in some cases they force implementation of the EPA BSER building blocks rather 

than achieving the state goal at least cost. The commenters cited the Southwest Power Pool's 

reliability-only assessment which unrealistically assumed the closure of thousands of megawatts 

of coal plants by 2020 but considered none of the replacement power resources which would 

occur during CPP implementation. The commenters quoted the report, "due to time constraints 

[SPP] did not evaluate the viability or reliability impacts of any of the building blocks used to 

establish [the CPP's] proposed goals." The commenters cited errors (ignoring averaging 

flexibility, ignoring new generation and ignoring efficiency improvements). 

Commenters stated that IPM is not suited to analyzing reliability and is not a substitute for load 

power flow or stability studies because IPM assumes that there will be no impact to the 

transmission grid inside the regions, despite dramatically altering the generation resources within 

them, and does not consider NERC standards. The commenters discussed how IPM is structured 

and added that it does not take into consideration the voltage/reactive power requirements of the 

transmission grid or the full range of possible contingency events and only considers a small 

number of outage events. Commenters further stated that the changes contemplated as part of the 

proposed presents a multitude of uncertainties and complications that increase the risk of 

extensive disruptions to the grid and stated that this is supported by NERC's preliminary review 

of the proposed rule. The commenters discussed models maintained by RTOs and ISOs to assess 

reliability and factors such as load forecasts, expected service dates of new transmission 

facilities, reactive resource capabilities, and generation additions, retirements, or other dispatch 

scenarios. The commenters stated that the proposed rule will require NERC, transmission 

planners, and planning coordinators to perform short-term and long-term analyses to determine 
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the reliability impact of the proposal because the proposed rule will have a tremendous effect on 

one or more of these factors. 

Commenters stated the application of the four building blocks contained within the proposed 

Best System of Emissions Reductions (BSER) has not been subjected to modeling that 

meaningfully studies its impact on system reliability for which the changes pose a significant 

threat to grid reliability in the West. The commenters stated that no reliability analysis of EPA's 

proposed BSER has been conducted for the Western Interconnection, which spans 14 states, two 

Canadian provinces, and Mexico's Baja California, and it is inaccurate for EPA to assert that its 

BSER is adequately demonstrated absent a transmission modeling study that concludes that 

EPA's building block approach would result in a system as reliable as the one we have today. 

The commenters stated the IPM model does not model the operations of the transmission grid 

and whether resources that exist in a particular region can be delivered to the consumer location 

of demand; rather, the model focuses on whether, in a particular region, there are an adequate 

amount of electric supply resources to meet consumer demand. The commenters referenced the 

Western Electricity Coordinating Council (WECC), the Electric Reliability Organization (ERO) 

empowered by Section 215 of the Federal Power Act for establishing reliability standards in the 

Western Interconnection, and a preliminary technical analysis of the BSER's application to the 

interconnection. The commenters also discussed Deer Creek and Big Stone, South Dakota as an 

example of how the proposed EPA rule does not comport with transmission realities. 

Commenters stated EPA has not conducted an adequate analysis of the impact its proposal will 

have on grid reliability. The commenters said EPA conducted what it inaccurately called a grid 

reliability analysis by running the Integrated Planning Model (IPM), but IPM grid simulations 

are not true reliability analyses because they provide a much simpler "resource adequacy" 

analysis, examining only whether the total amount of electric capacity that will be forced to retire 

within broad regions will cause capacity levels to fall below regional reserve requirements. The 

commenters said IPM "assumes that adequate transmission capacity exists to deliver any 

resources located in, or transferred to, the region." The commenters also referenced the WECC's 

Phase I Technical Summary Report that focused on frequency response in the grid from 

increased renewable generation which concluded needs further monitoring and review. 

Commenters also stated they are particularly concerned about grid stability across northern 

Nevada which is a rural area with numerous mining operations and high industrial load demands. 

The commenters said power generation in the area consisted of three coal-fired EGUs which 

would all be closed by 2020 under the proposed rule. 

Commenters stated that a modeling assessment showed Arizona complying with EPA's interim 

and final goals but the results shown in this analysis are not achievable given the real world 

timeframes needed to construct new generation, transmission and gas pipeline infrastructure. 

Commenters stated the proposal, and the modeling used to support it, misrepresents the 

"interconnected" grid as a single open market; that its implementation would jeopardize the 

utility's ability to continue to meet state regulatory expectations. The commenters stated that the 

proposal would effectively reduce the utility's direct control over its generation and transmission 

assets, in favor of shifting Arizona's generation resource reliance to merchant-based resources. 
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Commenters stated EPA's insistence that the rule is achievable appears to be based on modeling 

that it conducted using the IPM, however, IPM is not equipped to perform detailed technical 

studies that include stability analysis. The commenters stated that they believe the model is being 

misapplied, and should at the very least be accompanied by comprehensive production cost and 

detailed power flow/stability analyses. The commenters stated that as a result of the proposed 

rule, WECC has performed preliminary analyses in order to provide a starting point for 

additional discussions and more detailed assessments. The commenters stated they agree with 

WECC's two key recommendations: 1) allow additional time following the filing of state 

compliance plans for the NERC, WECC, and other reliability entities to concurrently evaluate 

the potential reliability impacts of those plans; and 2) creating a process within the proposed 

Clean Power Plan that considers timing adjustments or the granting of extensions if there is a 

demonstrable reliability need identified. 

Commenters stated both parts of the TSIA (Transmission System Impact Analysis) identified 

significant reliability issues. 

Commenters stated the power flow analysis performed in Part 1 of the TSIA showed SPP 

network was so severely stressed by large reactive deficiencies that the software used in the 

analysis was unable to produce meaningful results, which is generally indicative of voltage 

collapse and blackout conditions. The commenters stated further that the analysis indicates 

approximately 5,200 MVAR of reactive deficiencies in the SPP footprint during system intact 

conditions resulted from modeled EPA generator retirements. 

Commenters stated Part 2 of the TSIA utilized the latest optimal generation resource plans 

available to SPP as well as existing wind resources to mitigate generation shortfalls within SPP. 

The commenters stated that an N-1 assessment revealed 38 overloaded elements in portions of 

six states and that cascading outages and voltage collapse would occur. 

Commenters stated that EPA concludes that, based on the results of the IPM model, 

implementation of the proposed rule can be achieved without undermining resource adequacy or 

reliability. The commenters stated that the model effectively assumes that states will implement 

programs in response to this rule that do not impair resource adequacy and reliability. 

Commenters stated that because of the flexibility provided to states under the proposed 

regulation, there is no way to predict how individual or groups of states will choose to comply 

with GHG targets. The commenters stated that interaction of multiple different state 

implementation plans within the same interconnection could exacerbate any impacts on system 

reliability or resource availability and is highlighted by the Western Electricity Coordinating 

Council in a preliminary technical report evaluating the potential reliability impacts on the 

western electrical grid. 

Commenters stated that a thorough assessment of the potential reliability risks of the CPP would 

help ensure its successful implementation by enabling EPA and the states to avoid reliability 

impacts and make better choices in the design of implementation plans. 

Commenters stated that the modeling analysis indicates that significantly more analysis by the 

EPA must be done to assess the impacts on electric reliability and costs for upgraded electric and 
185 

gas infrastructure. The commenters stated that the modeling does not assess feasible schedules 

for installing this capacity or necessary work to the natural gas infrastructure nor does the 

modeling assess the electric reliability implications of retiring coal capacity. The commenters 

also stated that the cost of additional infrastructure installation costs is excluded. 

Commenters stated that EPA's assessment of impacts on reliability is flawed. Commenters 

stated that the loss of 30 GW capacity, as called for by the rule, is not fully or accurately defined.

Commenters stated that the impacts from the retirements on the reliability of the grid must be 

studied by transmission operators and reliability organizations to determine what specific 

impacts will be created by these changes in supply. Commenters stated that planning, permitting 

and construction of bulk electric system transmission lines can take 8 to 10 years. Commenters 

stated that with State plan approvals by the EPA (either individual or regional) not completed 

until as late as 2018 or 2019 with extensions, is will not be possible to place such facilities in 

service before later in the next decade. Commenters stated that it is also not clear how or if IPM 

(EPA's predictive model) addresses RTO/ISO seams issues, which affect the deliverability of 

power even when there is a surplus of generation. Commenters stated that further, IPM's regions 

do not align with the planning regions used by the RTOs/ISOs. As EPA notes, IPM also does not 

address intra-regional transmissions constraints. Commenters stated that these limits impact 

EPA's ability to address local reliability concerns. 

Commenters stated that EPA's use of a generation resource adequacy model to determine 

whether the transmission grid will operate reliably is not rationally based. Sierra Club v. Costle, 

657 F.2d 298, 333 (D.C. Cir. 1981), rev'd on other grounds, 463 U.S. 680 (1983) (A model may 

not be used for purposes that "exceed the bounds of its usefulness."). Commenters stated that this 

is no small matter because "local" grid reliability impacts can have cascading effects over a 

broad region. Commenters stated that in the absence of any reasoned explanation to justify EPA's 

confidence that the real-world grid can accommodate the near-term impacts of its Proposed Rule, 

the proposal lacks a rational justification. 

Response 14: EPA disagrees with these comments. IPM is the best available modeling tool for 

assessing power sector/environmental impacts of policy initiatives. IPM is a multi-regional, 

dynamic, deterministic linear programming model of the U.S. electric power sector. It provides 

forecasts of least cost capacity expansion, electricity dispatch, and emission control strategies 

while meeting energy demand and environmental, transmission, dispatch, and reliability 

constraints. The model is designed to reflect electricity markets as accurately as possible. The 

EPA uses the best available information from utilities, industry experts, gas and coal market 

experts, financial institutions, and government statistics as the basis for the detailed power sector 

modeling in IPM. The model documentation provides additional information on the assumptions 

discussed here as well as all other model assumptions and inputs. Detailed information and 

documentation of EPA’s Base Case using IPM (v5.15), including all the underlying assumptions, 

data sources, and architecture parameters can be found on EPA’s website at: 

http://www.epa.gov/powersectormodeling/BaseCasev513.html 

Regarding the commenters’ view that the use of a generation resource adequacy model to 

determine whether the grid will operate reliably is arbitrary and capricious, EPA recognizes that 

local reliability conditions can be critical. EPA addresses resource adequacy and reliability 

considerations only insofar as these concerns can be assessed at a general level at this time. The 
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modeling examines those potential implications that can be studied at the stage of the rulemaking 

process, that is, the broad changes in transmission generation patterns and transmission flows 

that are projected in modeling the impacts of the rule. Any realistic appraisal of reliability 

cannot be conducted until the CPP planning and implementation process provides the necessary 

information for reliability authorities to conduct the necessary analysis. EPA fully addresses this 

process in the rule, first by providing the flexibility to states to develop plans that will not raise

reliability concerns, and also by ensuring the reliability is addressed in state plans and by 

including a reliability safety valve mechanism in the rule. 

Comment 15: Commenters noted that relying on natural gas as a replacement for coal-fired 

generation has negative consequences. 

Commenters noted the following issues: 

• natural gas is a price-volatile fuel and low prices are unlikely to continue 

• natural gas cannot be stored on site as easily as coal 

• natural gas is more difficult to transport than coal 

• natural gas availability is limited by natural gas transmission pipelines, which are 

near capacity 

• competition for natural gas supplies due to increased demand 

• costs to increase natural gas transmission infrastructure and storage capacity will 

result in higher costs for natural gas 

Commenters stated that "maximum annual NGCC capacity can be limited by natural gas 

curtailments, transmission constraints, and/or air permit requirements." 

Commenters noted that switching from coal to NGCC is only a short-term solution. According to 

commenters, "In order to achieve an 80 percent reduction by 2050 compared to 2012 emission 

levels, even though NGCC technology is required in the near-term to meet the year 2030 targets, 

such technology cannot meet the 2050 GHG target, making NGCC investments obsolete longterm." Commenters also noted that utilities will be "forced to make costly long-term decisions 

that will produce only short- or medium term results" which will result in "accelerated 

depreciation and other stranded costs that result from retiring generation resources well ahead of 

their economic or useful lives." 

Commenters noted that "It will take dramatic increases in energy technology innovation to meet 

long-term greenhouse gas reduction goals and the EPA rule as written does not adequately take 

into account how the rule drives private market investment." Commenters asked, "What are some 

complementary steps the EPA, DOE and FERC might take in a coordinated fashion to advance 

the Energy Technology Innovation System in the U.S.?" 
187 

Commenters noted the following concerns: 

• "The desirability of and need for firm natural gas supply and pipeline capacity 

contracts by generators" 

• "The interruption protocols for natural gas delivery during cold weather events 

and the ability of pipelines to provide very short-term-supply flexibility (pack and 

draft)" 

• "The ability of the gas transmission industry to make timely infrastructure 

investments." 

According to commenters, "Coal fired plants have on average a thirty-day supply of energy onsite, whereas natural gas fired plants typically have no fuel storage capability." Citing the Polar 

Vortex of 2014, commenters noted that "There was simply not enough natural gas transportation 

capacity available to satisfy the home heating and power generation needs." 

Commenters cited a NERC study that found that during the 2013-2014 Polar Vortex, "natural gas 

units represented over 55 percent of the total outages during the Polar Vortex, twice the rate of 

coal units". 

Commenters stated "Natural gas supplies can be temporarily strained, particularly in regions 

where there is insufficient pipeline capacity to meet the spike in demand." Commenters also 

commented on increasing demand for natural gas: "During the 2014 polar vortex, some regions 

of the country experienced demand for natural gas in excess of supply, which would have led to 

interruptions of electricity service if other generating resources - particular those powered by 

coal - were not there." 

Commenters noted that "increased reliance on NGCCs for electric generation also renders the 

electric system and its customers more vulnerable to natural gas shortages and delivery 

congestion." 

Commenters noted that siting new NGCC generation at all existing coal generation locations 

could be difficult "because of the altitude impact on NGCC output and because gas transmission 

pipelines do not run near these locations." 

Commenters stated "Re-dispatching coal generation to NGCCs may increase operation of 

Combustion Turbines (CT) during peak loads" and "Additional renewable energy, such as wind 

or solar generation, will require greater variability in the amount of fossil generation and 

potentially increase peaking CT generation." 

Commenters noted the following potential issues of converting to NGCC units: 

• permit limits, 

• electric transmission constraints, and 
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• natural gas delivery constraints 

Commenters stated that "an important distinction between the use of coal and natural gas is the 

ability of coal to be stored in inventory at power plants, which allows for quick response to 

changes in generation demand." According to commenters, "there is no such buffer for natural 

gas plants so the effects of a supply disruption to plant operations, and thus dispatch availability, 

are immediate." 

Commenters stated that as reliance increases more on natural gas for both baseload and on-peak 

capacity, it is important to examine potential risks associated with reduced diversity and 

increased dependence on a single fuel type. The commenters stated that currently, natural-gasfired resources account for large portions of both the total and on-peak resource mix in several 

assessment areas when considering both existing capacity and planned additions. The 

commenters stated that with this shift toward more natural gas consumption in the power sector, 

the power industry will become increasingly vulnerable to natural gas supply and transportation 

risks, and that extreme conditions, although rare, must be studied and integrated in planning. The 

commenters stated that overdependence on a single fuel type increases the risk of common-mode 

or area-wide conditions and disruptions, especially during extreme weather events. The 

commenters stated that the CPP proposal accelerates the shift toward more natural gas generation 

and could create additional pipeline needs. The commenters concluded that the increased 

demand can be addressed with sufficient lead time (i.e., more than three years), which is needed 

to plan, collect contracts, permit, procure, and build new pipelines. 

Commenters added that the proposed guidelines actually could prohibit the building of new 

natural gas-based units because, in some states, the emission rate goals are less than the emission 

rate allowed these units under CAA section 111(b). 

Commenters stated that IPM does not consider that in many cases, coal units that are retired will 

be replaced with additional generation added at another location, or with new onsite NGCC 

generation. The commenters stated that where a multi-unit coal plant is replaced by a NGCC 

plant, both the reliability of the onsite generation and the operational flexibility of the 

transmission system will be decreased, especially during transmission outage season. The 

commenters stated that remotely located generation cannot provide the necessary dynamic 

reactive power, resulting in the need for a transmission solution. The commenters stated that 

there are areas that will require transmission upgrades that are not addressed by EPA's resource 

adequacy and reliability assessment. The commenters recommended that EPA revise its analysis 

to appropriately consider these potential impacts and outcomes. 

Commenters also stated that EPA fails to consider reliability concerns associated with increased 

reliance on natural gas. Commenters noted special concern during unforeseen events that disrupt 

natural gas supply and delivery for the power sector in high-congestion regions, increasing the 

risk for potential blackouts. The commenters stated that NERC has also expressed concern 

regarding reliability issues and constrained natural gas delivery and storage during peak usages. 

The commenters added that due the IPM's overestimation of potential gains in energy output 

through increased utilization of NGCC units and underestimation of the number of NGCC units 

that will be needed to provide reactive support and load-following for variable energy resources, 

the commenters opposed proposals that displace coal, either by NGCC generation under 
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Building Block 2 or by RE and EE generation under Blocks 3 and 4. Commenters added that 

EPA's reference to flexibility is misleading due to threats to fuel diversity and the hard limits and 

compliance deadlines. 

Commenters stated that EPA's assumption that natural gas plants can increase annual utilization 

to 70% across the entire fleet presents huge technological challenges both at the plants and 

within the supply chain and has not been fully considered in EPA's analyses. The commenters 

noted that 70% utilization rates have been exceptionally rare and therefore technical feasibility 

requires detailed modeling, contingency planning, and real-word testing. 

Commenters stated concern that the CPP could adversely impact the reliability of the electric 

power grid as early as 2017. The commenters stated the CPP promotes future increases in 

natural gas and renewable electric generation at the expense of coal fired generation, which 

places additional financial pressure on coal fired generation units that will most likely lead to an 

additional wave of coal generation unit retirements beginning as early as 2020. The commenters 

noted that this wave of retirements is in addition to the approximate 60 GW of coal fired 

generation that has already retired or is anticipated to retire within the next five years due to 

previously enacted environmental rules coupled with low natural gas prices and stated that EPA's 

own modeling of the impacts of the CPP predicts an additional 40 to 48 GW of fossil unit 

retirements by 2020. The commenters indicated it is unlikely that, given long lead times for 

permitting and construction of replacement generation and transmission, the industry will be 

prepared for such a dramatic change in the time period required by the CPP. The commenters 

provided an example that would drop reserve margins to below 5% and place customers in the 

perilous position of being dependent on other regions to meet their electric power needs. 

Commenters expressed concern that the CCP may shrink capacity margins, damage power 

quality, and leave the grid unprepared for extreme weather conditions. The commenters cited 

NERC's worry that the CPP is moving too far too fast and is not paying sufficient attention to the 

question of electric reliability, costs and the risk of power failures. 

Commenters stated that the industry will primarily increase its dependence on natural gas fired 

generation and given the "just-in-time" nature of natural gas fueling, the industry will become 

more vulnerable to natural gas supply and transportation disruptions which add to the reliability 

risk especially during extreme weather events. The commenters further stated that unlike coal 

units, combustion turbine EGUs do not have onsite storage of fuel. The commenters indicated 

that the time necessary to develop the required natural gas infrastructure (e.g. pipelines and 

storage facilities), is not offered in the 2020 start date of the CPP thus creating even more risk to 

electric service reliability. 

Commenters noted that the CPP is designed to promote power generation from a subset of 

renewable resources. The commenters stated that current wind and solar PV technology provides 

intermittent generation that is non-dispatchable and is subject to large variations in 

output, requiring increased generation ramping flexibility by conventional units. The 

commenters cited there are reliability issues with large onsets of non-dispatchable resources 

having already created operational challenges in California, Hawaii, and Germany. 
190 

Commenters also noted that generation variation challenges can be accommodated, but the 

changes to the grid require further study and planning, the time for which is not offered in the 

CPP. 

Commenters also requested a safety valve or "off-ramp" to address unexpected scenarios and to 

address electric system reliability and the CPP should include a predetermined procedure that 

would allow the provision of the program to be adjusted or suspended to address adverse impacts 

of the program on electric system reliability. The commenters further recommended that safety 

valve or "off-ramp" provision could also offer states and/or affected entities protection in terms 

of not being penalized for fewer emission reductions resulting from the unpredictable 

performance of renewable generation units. 

Commenters stated that the EPA proposes that almost a third of the existing coal-fired generation 

will be retired between 2020 and 2022 a third of existing coal-fired generation will be gone. The 

commenters further stated that these plants currently provide electricity that sustains our 

economy and the health and well-being of our citizens and when these plants are shuttered, our 

electricity supply will be entirely dependent upon EPA's predictions about energy efficiency and 

the growth of costly and currently underdeveloped alternative energies. The commenters stated 

that their fear is that without current generating facilities, all it will take is another polar vortex or 

heat wave to expose vulnerabilities and subject businesses and citizens to energy shortages and 

price shocks. 

Commenters stated that EPA projects that this rule will cause the loss of 41 to 49 gigawatts of 

coal-generating capacity by the year 2020. Commenters stated EPA's estimates are far too 

low. These retirements are in addition to the 92 gigawatts of coal capacity that the EPA has 

already projected will shut down between 2012 and 2020, due in large part to the compliance 

with the 2012 mercury and air toxic rule. The commenters stated that losing around 130 

gigawatts of base-load coal capacity, nearly 40 percent of the nation's coal generation fleet in 

2012 raises serious concerns about the future reliability of our electrical power supplies. 

Commenters stated that in its reliability study, NERC also identified reliability concerns with 

increased reliance on natural-gas-fired generation. The commenters stated further that 

historically, NGCC units have been used for load following and are better suited for this purpose. 

The commenters noted that extreme weather (as experienced in last winter's polar vortex) 

impacts fuel availability for NGCC units, and can result in forced outages. The commenters 

stated that overreliance on NGCC sources will undermine the resiliency and fuel diversification 

built into the existing system and increased reliance on NGCC units will naturally increase 

demand for natural gas. The commenters stated that additional infrastructure will have to be 

constructed to supply natural gas to new generation and the implementation timeline presented in 

the CPP does not adequately account for the time necessary to create required infrastructure. 

Commenters stated the following concerns regarding reliability: 

• The carbon emission rate that EPA proposes for Virginia will require the 

retirement of a significant amount of fossil-fuel generation in a timeframe that 

compromises reliability. 
191 

• EPA's modeling shows 2,851 megawatts of dispatchable fossil-fuel generation in 

Virginia being retired and replaced, before 2020, with 351 megawatts of nondispatchable onshore wind. 

• Additional near-term generator retirements caused by the Proposed Regulation 

will compound existing, unresolved reliability concerns in the Commonwealth. 

Commenters stated EPA's proposed rule would prevent replacement of coal-fired base load, 

creating a gap that natural gas cannot completely fill, thereby leading to decreased reliability and 

security of the power grid. The commenters stated that the reliability concerns stem from the fact 

that natural gas, unlike coal, cannot reliably be stored for immediate availability at EGUs during 

demand spikes. The commenters stated that decreased reliance on coal due to the retirement of 

coal-fired EGUs has led many to become concerned over grid reliability issues, such as FERC 

officials, AEP, SPP, and ERCOT. 

Commenters stated disruptive changes such as retirements, retrofits and/or changes in the 

operating characteristics of base load resources, must be considered carefully and communicated 

clearly in a transparent and open process. The commenters stated that findings in their 

assessment make it clear that new generation and transmission expansion will be necessary to 

maintain reliability during summer peak conditions if EPA's projected generator retirements 

occur. The commenters stated more comprehensive planning efforts with stakeholders and new 

tools/metrics will be required and coordination and cooperation beyond regional planning efforts 

will be necessary, but may not be timely given significant challenges with interregional planning 

and necessary system expansion. The commenters stated broader system assessments of the bulk 

power system, and natural gas pipeline and storage systems based on environmental constraints 

will be required. The commenters stated that implementation of approved state plans will take 

time, as will potential mitigation measures to address unacceptable system conditions to 

accommodate retirements, and/or retrofits to existing plants. 

Commenters stated that in some instances, the most cost-effective means of complying with the 

EPA's rule may be to retire more coal-based generation than is already projected to retire due to 

the EPA's MATS regulation. The commenters stated that CO2 regulation could increase coal 

plant retirements and thereby place substantial new pressure on the grid to ensure reliability. The 

commenters stated that EPA is under an obligation to ensure that the shift in the industry's 

generation mix as a result of the CPP does not undermine the reliability of the North American 

electric system. 

Commenters stated that if the CPP is adopted and implemented, the proposed requirements will 

necessitate a monumental shift in how our country generates electricity, including premature 

retirement of coal-based power plants along with an unprecedented expansion of natural gasbased and renewable electricity. The commenters stated that the rule could have significant 

negative impacts on the reliability and affordability of electricity because of the scope of the 

changes necessary to achieve the emission requirements set forth in the Proposed Rule, and the 

short time frame to achieve the majority of these changes. 

Commenters stated that it is unclear whether the proposed rule has taken into account future 

potential load growth from population shifts or increases in the electrification of states' 
192 

transportation sectors and could leave states unable to comply with their performance standards. 

The commenters stated that electrification of the transportation sector is widely viewed as an 

important means of reducing GHG emissions from mobile sources, and EPA should not create a 

disincentive for states to pursue these policies. The commenters remarked that load growth and 

peak energy demand increases from future population shifts and increases in electrification of the 

transportation sector mean that zero- and low-emitting sources will likely be operating at 

capacity and states will be forced to rely on higher-emitting sources to meet their increased 

generation needs. 

Commenters stated very concerned about the reliability of the service we provide to their 

customers. The commenters noted that proposal is silent on providing for an increase in demand 

from an expanding population or the addition of an energy intensive industry or customer and 

that energy efficiency and renewable energy will not be sufficient to attract any business to 

compete in these markets. The commenters stated that they are very concerned about the 

reliance on natural gas by substantially increasing the operating capacity of the natural gas 

combined cycle plans. The commenters noted that there is a lack of understanding in the 

proposal about how natural gas electric generating units are used to ensure the reliability of 

renewable energy, power quality and intermittent operation which will exclude many units from 

being available for base load generation, and reliance on more natural gas generation will only 

exacerbate the problem. 

Commenters stated that they question implementation of Building Block 2 and limiting use of 

coal burning plants could result in not meeting needs in times of high demand. 

Commenters stated that Building Block 2 of EPA's "Best System of Emissions Reduction" 

assumes transmission operators increase the dispatch of NGCC plants to 70 percent of capacity. 

Commenters stated that the proposed rule applies to NGCC plants that "were in operation or had 

commenced construction as of January 8, 2014. Commenters stated that "uncertainties exist 

regarding what, if any, regulatory agency would have the authority to enforce a minimum 

utilization limit, or to design a permitting condition for specific sources. Commenters stated that 

because transmission operators employ "security-constrained economic dispatch," environmental 

considerations do not directly factor into dispatch decisions. Commenters stated that instead, 

existing environmental regulations have had an indirect impact on dispatch decisions by altering 

the variable cost of electricity produced at EGUs. Commenters stated that in this regulatory and 

policy context, EPA proposes two ways for states to implement Building Block 2. Commenters 

stated that states can superimpose a de-facto price on carbon through a variety of market-based 

mechanisms, which would increase the variable cost of dispatching higher-emitting EGUs. 

Commenters stated that states can "impose limits on utilization or CO2 emissions at higheremitting EGUs." Commenters stated that they believe placing direct limits on plants' operating 

conditions entails significant legal and practical difficulties for Indiana. Commenters stated 

further that directly limiting the number of hours a coal-fired plant can operate puts a hard 

ceiling on the amount of electricity the plant can provide to the grid. Commenters stated that in 

periods of unusually high demand, Indiana's coal-fired plants may be necessary to preserve the 

state's bulk power reliability. Commenters stated that during the early 2014 cold spell the vast 

majority of coal-fired units that were slated for retirement because of EPA's MATS were running 

at full capacity to meet demand. Commenters stated that to the extent that displacing coal-fired 
193 

units with NGCC units causes the former to adopt a reduced operating profile, Building Block 2 

could leave utilities without the tools needed to respond to extreme conditions. 

Commenters stated an assessment of pipeline expansion was needed to meet the expected 

reliance on natural gas for electric generation. The commenters stated that though the EPA 

concluded, in its assessment of Building Block 2, that major gas infrastructure investment is not 

needed to support the increased gas consumption by the power sector, there are some very 

obvious and critical regions of the country that will need major capital investments. The 

commenters gave the example the current pipeline capacity in the North East that is constrained 

as evidenced during the 2014 polar vortex where power prices skyrocketed, the region is in need 

of additional pipeline capacity. 

Commenters said the current constraint in the North East does not address the scheduled, or 

anticipated, increase in gas demand from EGUs replacing baseload coal unit retirements, and that 

this gas generation requires dedicated pipeline capacity that lessens interdependency issues and 

decreases potential blackouts. The commenters said to get to a point where gas transmission 

capacity meets gas generation demand, there must be a thorough consideration of the time 

required for such projects to be constructed, and that an industry planning and analysis group 

will be able to look at the multitude of variables incorporated into critical infrastructure 

construction, which often include: Planning, Permitting, Financing, Purchase agreements, 

Construction, and Timetables. 

Commenters stated that the over-reliance on natural gas also creates a less-diverse generation 

portfolio. Commenters stated that they believe that its portfolio should be diverse both in terms 

of geography and fuel (to the extent possible given its limited size). Commenters stated that the 

proposed rules rely heavily on natural gas for base load, reactive power, voltage support, inertia, 

and grid reliability. Commenters stated that this heavy reliance on one fuel for grid stability 

leaves the grid and customers vulnerable to potential disasters like the gas explosions mentioned 

here, or the extreme cold of 2014 which caused a lack of natural gas supply for some generators 

as heating demands reached record levels, causing emergency conditions in PJM and ISO-NE. 

Commenters stated that there are concern related to reliability due to concentration on a single 

fuel and the time schedule to adjust infrastructure. 

Commenters stated that they disagree with U.S. EPA's contention that the re-dispatch to natural 

gas is a "routine and well-established operating practice," especially when the proposed rule is 

predicated on offsetting generation from coal sources to natural gas on a one-to-one basis. 

Commenters stated that examination of U.S. EPA's IPM results demonstrates this result (one-toone generation offset) is predicted only when significant amounts of coal retirements occur (46-

49 GW) by 2020 nationwide. Commenters stated that they have strong concerns that shutdowns 

of this magnitude on a short time-table will have negative impacts on grid reliability and energy 

costs even though U.S. EPA emphatically states it "will not jeopardize system reliability." 

Commenters stated that U.S. EPA is over-estimating the ability to convert without any technical 

basis and knowledge of individual state capabilities. 

Response 15: The preamble to the final rule has a full description of the basis for Building Block 

2 which is a gradual shifting of generation from existing fossil steam to existing NGCC within 
194 

each region up to a maximum NGCC utilization of 75% on a net summer basis. In that section 

EPA discusses the technical basis for using this as a part of BSER, taking into account important 

factors such as reliability of the electric system, natural gas infrastructure, natural gas production

potential, transmission planning and cost considerations. Please see Chapter V.D. of the 

preamble. In addition there is a Technical Support Document, entitled GHG Mitigation Measures 

Technical Support Document discusses technical and cost issues including a discussion of 

natural gas prices. 

Regarding the extreme cold or "polar vortex" experienced in early 2014, we note that all kinds of 

generation, not only gas-fueled units, experienced difficulty.(See 

:https://www.pjm.com/~/media/documents/reports/20140509-analysis-of-operational-eventsand-market-impacts-during-the-jan-2014-cold-weather-events.ashx) We also note that in a 

similar extreme cold weather event the following year, most operators had managed to overcome 

the problems that had been experienced only a year earlier. We further note that permit limits 

and electric transmission constraints are not unique to NGCC units. 

With regards to the comment that it is unclear as to whether future population growth and 

industry demand growth are considered in the development of the CPP, the EPA does consider 

future electricity demand in the IPM modeling conducted. EIA forecasts are incorporated into 

IPM. See Chapter 3 of the RIA and documentation for the IPM model available at: 

http://www.epa.gov/powersectormodeling 

Comment 16: Commenters noted that the economics of the natural gas market are more volatile 

than the coal market, causing negative consequences on reliability and electricity costs. 

Commenters offered the following comments on the economics of natural gas and the 

underpinnings of the market. According to commenters, "Because natural gas prices were at or 

near historical lows when the proposed rules were drafted, any supply or demand issues will 

drive prices further upward. A multitude of factors can drive significant gas price increases in the 

future: 

• "Gas prices were recently low because of perceived supply [or oversupply] for the 

long term. If any event occurs to change the perception of plentiful supply or the 

actual level of supply, gas prices will rise." 

• "Gas supplies may tighten because at current price levels many gas producers are 

losing money or showing small profits. As a result they may cut back on 

production (or go bankrupt) to stop losing money and to reduce supply- which 

will increase prices. Some experts believe that sustainable profits cannot be made 

on natural gas development until prices rise to more than $7.00 per MMBtu." 

• "Gas supplies may tighten because productivity decreases due to greater difficulty 

in extracting natural gas easily from wells that are drying up and new wells are 

simply less productive." 
195 

• "New, more stringent environmental regulations and in some cases outright bans 

on fracking, the most common technique for extracting natural gas from shale, 

will increase gas production costs and potentially reduce productivity- both of 

which will cause natural gas price increases." 

• "Demand for natural gas will increase as the economy continues to rise out of the 

Great Recession because natural gas is a feedstock for many products and is used 

by industrial facilities for heat and steam. Experts predict as much as 2.6 trillion 

cubic feet per year additional demand for usage in industrial steam and industrial 

combined heat/power applications." 

According to commenters, "It is dangerous public policy for EPA to base regulatory decisions on 

the highly volatile economics of natural gas prices, particularly when the current prices are on 

the low side of the volatility curve." Commenters noted that if the rule "drives more electricity 

producers to natural gas and away from the more stable and plentiful coal, the cost of electricity 

will rise." Furthermore, commenters noted that "it will be more difficult for utilities to switch 

back to coal because of the uncertain regulatory environment for coal-fired power plants and new 

coal-fired power plants cannot be built if the proposed New Source Performance Standards for 

coal-fired plants is ever finalized." 

Furthermore, commenters stated, "EPA's directive to push greater investment in natural gas 

generation also ignores the high degree of sensitivity investment in natural gas based generation 

has to the cost of gas." Commenters agreed with EPA that "the vast majority of the overall cost 

of building and operating an NGCC facility is the cost of the natural gas" and "when natural gas 

costs are low, the economic driver for building NGCC facilities is very strong." On the other 

hand, commenters noted that "as gas prices increase, the drive to shift to cheaper baseload 

generation facilities is equally strong" and "the economics are exacerbated by the fact that the 

stranded capital costs in an NGCC facility are so low which in turn provides an incentive to 

switch away from those facilities." According to commenters, "When gas prices increase, power 

producers will have strong impetus to turn to older, less energy efficient coal facilities for lower 

cost baseload generation" and "there will be fewer new NGCC facilities built, which then creates 

a supply risk, particularly if too many existing coal facilities have been shuttered." 

Commenters noted that "there is great risk that new natural gas units cannot replace existing 

coal-fired units that will be shut down as a result of this rule." Commenters noted that "Investors 

won't invest in new pipeline capacity unless gas suppliers will make long term commitments 

regarding gas shipments" and "suppliers are currently reluctant to make commitments under 

current market scenarios because prices are low (in many cases below production costs) and 

there is a fear of significant natural gas price increases created by increased demand and 

potentially tighter supply caused by power generators needing more natural gas." 

Commenters stated, "Natural gas prices also tend to be more volatile than coal prices, putting 

remaining baseload electricity at risk once coal plants have closed. Although new supplies and 

infrastructure will help, price volatility will remain a challenge because of how many sectors of 

the economy use natural gas for various purposes. Government policies that create more demand 

for natural gas will likely only worsen the problem." 
196 

Commenters stated that in addition to the potential impact on electric reliability, the proposed 

regulations will also have potential impact on the reliability of natural gas service. Commenters 

stated that the NPRM recognizes that a mandatory increase in utilization of gas-fired generation 

will necessitate construction and investment in production and transportation 

capabilities. Commenters stated that if those changes cannot be implemented as quickly and 

efficiently as assumed, the reliability of natural gas service could be compromised by the 

required shift to gas-fired generation. 

Response 16: The preamble to the final rule has a full description of the basis for Building Block 

2 which is a gradual shifting of generation from existing fossil steam to existing NGCC within 

each region up to a maximum NGCC utilization of 75% on a net summer basis. In that section 

EPA discusses the technical basis for using this as a part of BSER, taking into account important 

factors such as reliability of the electric system, natural gas infrastructure, natural gas production

potential, transmission planning and cost considerations. Please see Chapter V.D. of the 

preamble. In addition there is a Technical Support Document, entitled GHG Mitigation Measures 

Technical Support Document discusses technical and cost issues including a discussion of 

natural gas prices. 

Comment 17: Commenters noted that the rule is lacking in fuel diversity, which will negatively 

impact reliability of the electric system. On the other hand, commenters noted that the proposed 

rule itself will contribute to the increase of fuel diversity. 

Commenters noted "Diversity of energy supply is not only critical in keeping energy costs 

reasonable, it is essential in ensuring steady and reliable streams of energy to power our factories 

and heat our homes" 

Commenters stated, "The proposed rule does not adequately consider fuel diversity and the long 

term impacts of relying too heavily on predominant fuels such as natural gas and intermittent 

generation from renewables." 

Commenters stated, "A diverse energy supply is not only critical in keeping energy costs 

reasonable, but it is essential in ensuring steady and reliable streams of energy to power farms 

and heat our member's homes." According to commenters "For many farmers, energy represents 

a major input cost that can ultimately determine viability and prosperity." 

Commenters noted, "A prominent energy research group, IHS Energy, recently found that the 

current diversified portfolio of U.S. power supply lowers the cost of generating electricity by 

more than $93 billion per year versus a less diversified supply with no meaningful amount of 

coal or nuclear generation." [IHS Energy, The Value of U.S. Power Supply Diversity 34 (July 

2014), available at 

http://www.energyxxi.org/sites/default/files/USPowerSupplyDiversityStudy.pdf.] 

Commenters noted that "a reliable and economic power system should be composed of all 

categories of power generation - fossil fired steam, natural gas simple cycle, natural gas 

combined cycle, nuclear, hydro, solar, and wind." 
197 

Commenters noted, "We believe the U.S. needs an energy policy that emphasizes expanded 

production of all forms of energy and the development of new forms of energy." 

Commenters noted that "Adoption and implementation of the EPA's current plan introduces 

similar risks and consequences" as the Fuel Use Act from the late 1970s that "restricted 

construction of power plants using oil or natural gas and encouraged the use of coal, nuclear 

energy and other alternative fuels." 

Commenters stated "Because Florida imports most of its fuel and is a peninsula, which limits 

opportunities to import power, fuel diversity is critical for electricity reliability in Florida." 

Commenters noted the importance of fuel diversity during cold weather and hurricanes when 

natural gas supply may not be available." 

Commenters stated "Reliability requires a diversified portfolio of resources, so that when one 

generation technology is temporarily unavailable, others can fill in." Commenters noted that "A 

diverse portfolio of generation technologies that includes fossil fuel sources and renewables can 

complement one another to create a reliable supply of electricity for customers." Commenters 

concluded with "No single source of electricity generation is the answer." 

Conversely, commenters noted that the rule can "spur further investment in clean energy 

technologies [and] increase energy supply diversity." Commenters also stated that "By 

employing increasingly competitive renewable technologies, along with energy efficiency and 

other low-carbon energy technologies, states will be able to cost-effectively meet the emission 

reduction targets of the Clean Power Plan, while diversifying their energy mix." 

Commenters stated that possibly the most troubling finding by the NERC that the rule may 

create an over-reliance on gas, narrowing the diverse fuel mix required to minimize the risk from 

unforeseen events and pointed out that NERC notes that fuel diversification is an important 

component of an "all hazards" approach to system planning, and the dangers of placing too much 

reliance on natural gas were evident when the polar vortex weather system swept down across 

the United States in January 2014. The commenters added that an alarming number of power 

plants were unable to operate at peak levels because they could not secure enough gas, straining 

reliability to the limit and forcing operators to take emergency measures. The commenters stated 

that many manufacturers were asked to curtail production or shut down altogether during that 

period. The commenters concluded as power generation shifts more towards more natural gas 

consumption, the NERC warns that the industry will become increasingly vulnerable to natural 

gas supply and transportation risks. 

Commenters said EPA's attempt to cut carbon emissions through re-dispatch to lower or zero 

emitting EGUs could come at the cost of reliability which depends on maintaining a portfolio of 

various resources across the region. The commenters stated EPA's goal-setting formula proposes 

to diminish fuel diversity by creating an energy portfolio consisting almost entirely of natural gas 

and renewable resources, which can be unpredictable and unreliable unless paired with other 

fossil fuel generation resources. The commenters referenced the System Operator for New 

England (ISO-NE) who identified the three biggest factors that create risk to the reliable supply 

of power to New England as: natural gas dependency, power plant retirements, and renewable 

resource integration. 
198 

Commenters also referenced the success of the ISO-NE's 2013/2014 Winter Reliability Program 

which provided compensation for EGU's to maintain oil inventory throughout the winter months 

and FERC's approval of the program for the 2014/2015 winter. The commenters said the planned 

retirements of coal and nuclear plants in New England compound the region's reliability issues 

and increase the importance of fuel diversity. 

Commenters also referenced the ISO-NE's finding that the factors contributing to natural gas fuel 

availability issues include inadequate infrastructure, unreliable fuel arrangements, limited 

storage, and out of sync markets, and these factors have a substantial effect on power grid 

reliability and wholesale prices. The commenters stated that under the EPA's model, New 

England as a whole is projected to have no remaining oil or coal resources, which would be 

highly detrimental to the region's reliability as well as customer rates. The commenters stated 

many renewable sources are intermittent, cannot be dispatched on-demand, and require reliable 

back-up generation sources. With regard to resource inadequacies, the commenters gave the 

example of when ISO-NE called on wind farms to reduce output during the heat wave of the 

2013 summer due to insufficient transmission systems even though demand required additional 

resources to be dispatched. The commenters said the reduction was required due to insufficient 

transmission systems. 

Commenters also recommended EPA consider the effects of renewable resource goals on the 

reliability of the electric grid as many are intermittent, cannot be dispatched on-demand, and 

require reliable back-up generation sources. 

Commenters stated that if implemented in the current form, the CPP will impact the reliability 

and diversity of the nation's electricity supply, which could dramatically destabilize electricity 

prices and energy security. 

Commenters stated that NERC expressed concern about the CPP-induced shift from coal to 

natural gas and renewables for power generation. Commenters stated that, as NERC explained, 

greater reliance on natural gas requires significant construction of new natural gas pipelines, 

while more transmission capacity is needed to deliver renewable generation to demand centers. 

Commenters stated that the CPP will accelerate the ongoing shift toward greater use of naturalgas-fired generation and variable energy resources (VERs) (renewable generation). Commenters 

stated increased dependence on renewable energy generation will require additional transmission 

to access areas that have higher-grade wind and solar resources (generally located in remote 

areas). Commenters stated that increased natural gas use will require pipeline expansion to 

maintain a reliable source of fuel, particularly during the peak winter heating season. 

Commenters stated that pipeline constraints and growing gas and electric interdependency 

challenges impede the electric industry's ability to obtain needed natural gas services, especially 

during high-use horizons. 

Response 17: With changes in relative costs of generation by fuel type the electricity sector is 

becoming more diverse, rather than less and the final rule will encourage that movement toward 

a more diverse electricity sector. With lower natural gas prices, natural gas fueled generation has 

grown but as the cost of renewable electricity is falling as well renewable are becoming a larger 

share of the generation mix. We refer the commenters to Chapter 3 of the Regulatory Impact 
199 

Analysis for a discussion of EPA’s projections regarding fuel mix with an illustrative scenario 

under the final rule compared to the fuel mix in the base case. Regarding the intermittent nature 

of renewable energy, this was considered by EPA in quantification of building block 3 potential. 

See preamble section V.E. 

Comment 18: Multiple commenters noted that additional transmission infrastructure will be 

needed to accommodate new capacity and maintain reliability. Multiple commenters noted that 

relying on the existing infrastructure implies that replacement generation will be built in the 

same place as the retiring units, which is not realistic. 

Commenters stated that "additional transmission infrastructure will be needed to maintain 

reliable operation of the grid." Commenters’ assessment "revealed 38 overloaded elements that 

commenters would be required to mitigate with transmission planning solutions." Commenters 

further noted that "portions of the system in the Texas panhandle, western Kansas, and northern 

Arkansas were so severely overloaded that cascading outages and voltage collapse would occur 

and would result in violations of NERC reliability standards." 

Commenters stated that unless the proposed rule is modified significantly, the commenter's 

transmission system impact evaluation indicates "serious, detrimental impacts on the reliable 

operation of the bulk electric system in the SPP region, introducing the very real possibility of 

rolling blackouts or cascading outages that will have significant impacts on human health, public 

safety and economic activity within the region." 

Commenters stated that "The remaining useful life of expensive infrastructure modifications 

undertaken to comply with other requirements imposed by EPA can and should be recognized in 

this rulemaking" and "utility and customer investments required by the government to effect 

these environmental remediations should not be confiscated by operation of a subsequent 

requirement." 

Commenters stated "The second issue is the ability of the transmission system to reliably 

transmit power to load." Commenters used a "well-established path-rating process for the BES." 

According to commenters, "Those ratings may be affected due to the changing resource mix, 

resulting in a need for path re-rating and transmission utilization analysis to ensure available 

generation can actually be delivered to load centers." 

Commenters noted the following concerns: 

• "EPA inadequately considers electric transmission facilities in establishing the 

timeline for the interim goals in the draft CCP" 

• "the energy efficiency assumptions relied upon in the CPP are unrealistic and not 

sustainable" 

• "utilization of a 70% capacity factor for combined cycle units is unsound" 
200 

• "failure to consider the availability of the materials and labor for constructing the 

electric transmission and generation infrastructure required to comply with the 

CPP proposed rule" 

• "the short time frame to meet interim goals by 2020 risks the reliability of the 

bulk electric system" 

Commenters noted that "Existing natural gas pipelines are operating at near capacity today, and 

some regions have inadequate capacity." 

Commenters explained that the BPS is a network of transmission lines that allow electricity to 

flow from generating sources to customer loads even if certain sections of the transmission 

network are out of service. According to commenters, the realignment of generation resources 

contemplated in the Proposed Rule may reverse the flow of electricity on a transmission 

network. Commenters asked that these flows be studied so they can be anticipated and managed. 

Commenters specified a study conducted by the Brattle Group for SRP that evaluates the 

challenges of new flows on the Western Interconnect with the loss of fossil-fired generation in 

Arizona. 

Commenters noted that increased dependence on renewable energy generation will require 

"additional transmission to access areas that have higher-grade wind and solar resources 

(generally located in remote areas)." Commenters also noted that "increased natural gas use will 

require pipeline expansion to maintain a reliable source of fuel, particularly during the peak 

winter heating season." 

Commenters raised reliability concerns for six states, including parts of Texas. According to an 

evaluation by commenters, additional transmission infrastructure will be needed to maintain grid 

reliability. The commenters stated that the proposed rule "will impede reliable operation of the 

electric transmission grid in the SPP region, resulting in violations of NERC's mandatory 

reliability standards and exposing the power grid to significant interruption or loss of load." 

Commenters noted that "the total re-dispatch of all coal-fired generation to NGCC will create an 

imbalance in the state's electrical transmission system" which can cause overloading of 

transmission lines, overheating of the lines, and failure of the transmission system. Commenters 

noted that the loss of coal generation will lead to "reliance on congested transmission" lines. 

Commenters stated, "A robust electric transmission grid is an essential component of a CO2 

emissions reductions strategy." Commenters added that "renewable resources are often located in 

remote areas, some distance from load centers" and "if sufficient levels of transmission capacity 

are not built, utilities will not be able to fully access this country's substantial renewable 

electricity potential." 

Commenters added that the rule should "recognize that a robust transmission grid is critical for 

reducing emissions and ensure that transmission investments are appropriately monetized by 

permitting states to receive credit for consuming renewable electricity generated in another 

state." 
201 

Commenters noted that electric transmission provides the following benefits: 

• "available transmission capacity can reduce electric rates by adding new 

generation supply options and also can enhance grid reliability" 

• "Investments in grid modernization are likewise essential for improving 

operational and system efficiency. A modernized transmission system will enable 

new products and services that reduce emissions both by more effectively using 

electricity and enhancing grid resiliency." 

• "It will also serve as a platform to enable customers and markets to reduce CO2 

emissions." 

Commenters stated, "EPA fails to recognize the length of time necessary to incrementally 

identify and construct transmission, generation, and natural gas infrastructure adequate for the 

transformation of the currently adequate and existing energy supply infrastructure into that 

required by this proposal." 

Commenters stated "Recent estimates of the cost of expanding grid lines are in the range of 

$1,000,000 per mile, and such projects could take several years to complete." 

Commenters stated "Without upgrades to the Alaska Intertie, which is currently operating at or 

near capacity, the only generation resources that could replace the Healy coal generation are old, 

oil-fueled generation resources in North Pole and Fairbanks." Commenters continued that "By 

contrast, Healy is co-located with its fuel source, Usibelli Coal Mine." 

Commenters noted that it takes more than a decision to build more pipeline capacity because the 

pipeline must be certificated, and routed, which could raise eminent domain issues. 

Commenters stated that "the increased development and utilization of renewable energy 

resources introduces a number of concerns regarding the need to upgrade and/or expand the 

existing grid." Commenters noted that the concerns become more significant when "coupled with 

the impact of all the building blocks on the grid in terms of changes to the location and 

capabilities of generation versus load centers." According to commenters, "NERC has identified 

a number of issues that must be addressed in order to accommodate the increased development 

of renewable resources." 

Commenters stated "replacing a significant amount of base load capacity and production 

without compromising reliability will require the rapid development of significant new 

infrastructure." 

Commenters noted "The Electric Reliability Council of Texas has noted that the proposed rule 

would result in an increase in energy costs of up to 20% by 2020." However, according to 

commenters, that estimate does not account for "costs associated with transmission upgrades, 

natural gas supply infrastructure upgrades, procurement of additional ancillary services, energy 

efficiency investments, capital costs of new capacity, and other costs associated with the 

retirement or decreased operation of coal-fired capacity." 
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Commenters stated that "renewable energy requires expansion of the transmission grid." 

Commenters noted that "The change in generation will almost certainly require development of 

new transmission to ensure operational reliability, but scheduling outages of existing facilities 

will be difficult if simultaneous upgrades across many systems are needed such that the time 

lines for commissioning of new transmission facilities may be delayed." 

Commenters stated the proposed CPP does not adequately provide for planned integration of 

generation and transmission resources to meet the substantial CO2 reductions targets suggested 

by the EPA. The commenters stated that the retirement of base-load resources and the prospect 

of their replacement by the re-dispatch of intermediate-duty generating facilities will require 

substantial natural gas pipeline and electric transmission infrastructure additions and 

improvements crossing the entire country and that the CPP proposes to undertake this 

reinvention on an unprecedented timeline. 

Commenters stated that Building block 1 will require existing coal generation sources ("Coal 

Generation") to be modified and refurbished to achieve the required heat rate improvements. 

Commenters stated that to meet these requirements, existing Coal Generation will need to be 

taken out of service and then brought back on line after the modifications are complete. 

Commenters stated that transmission capacity will be critical to ensure continued grid reliability 

as the Coal Generation is taken out of service. 

Commenters stated that Transmission investment will likely be necessary to ensure the 

availability of the Replacement Generation as it may not be possible to locate Replacement 

Generation at the sites where the Coal Generation will be retired. Commenters stated that natural 

gas generation may be sited near existing pipelines to avoid additional costs of gas 

transportation, and certain renewable generation sources like wind and solar will necessarily be 

sited where the renewable resources are abundant, even though those locations may be distant 

from load, because those types of fuel sources are not transportable. Commenters stated that as 

generation resources change, the existing transmission infrastructure may be insufficient to 

deliver the replacement generation reliably to consumers. 

Commenters stated that with its diverse portfolio of energy assets they have maintained electric 

reliability in the area with minimal transmission support. Since the transmission system in this 

part of the state was not built to support the community, service from their plants is necessary to 

preserve that electric reliability. Commenters stated that the closure of generation would make it 

very difficult to meet peak loads, and the Proposed Rule would compound the dilemma of 

inadequate power supply by indirectly restricting new generation from natural gas, and 

significant emphasis on greater wind and solar power, or some combination thereof. 

Commenters stated that regulations such as the Clean Power Plan must be crafted so as to 

preserve, not undermine, their continued vitality of Municipal Power Providers. 

Commenters stated that RTOs are mandated by the Federal Energy Regulatory Commission 

(FERC) to ensure reliable supplies of power, adequate transmission infrastructure, and a 

competitive wholesale electricity marketplace. Commenters stated that commenters’ areas are 

serviced by the Southwest Power Pool (SPP) and Midcontinent Independent System Operator 

(MISO). Commenters stated that SPP relayed the results of its assessment of the impacts that the 
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Clean Power Plan (CPP) will have on reliability in the SPP region. Commenters stated that SPP 

concluded that "unless the proposed [CPP] is modified significantly, SPP's transmission system 

impact evaluation indicates serious, detrimental impacts on the reliable operation of the bulk 

electric system in the SPP region, introducing the very real possibility of rolling blackouts or 

cascading outages that will have significant impacts on human health, public safety and 

economic activity within the region." 

Commenters stated that SPP concluded: "if the assumed EGU retirements were to occur absent 

requisite transmission and generation infrastructure improvements, the power grid would suffer 

extreme reactive deficiencies ... that would expose it to widespread reliability risks resulting in 

significant loss of load and violations of [North American Electric Reliability Corporation 

(NERC)] reliability standards...even with generation capacity added to replace the assumed 

EGU retirements, additional transmission infrastructure will be needed to maintain reliable 

operation of the grid. This assessment revealed overloaded elements that SPP would be required 

to mitigate with transmission planning solutions." 

Commenters stated that the IPM model that EPA relies upon assumes the availability of 

transmission adequate to meet the changing pattern of electric supply and demand that the 

proposed rule would induce. Commenters stated that transmission lines can take 10 years or 

more to site and construct. Commenters stated that there is simply insufficient time to ensure that 

electric transmission upgrades and new line construction, with their attendant permitting and 

regulatory approvals, can occur to meet an initial 2020 compliance schedule. 

Commenters stated that the potential risks to reliability posed by the Clean Power Plan are 

illustrated by the latest Long-Term Reliability Assessment by the National Electric Reliability 

Corporation (NERC). NERC's December 2013 analysis, prepared prior to the development of 

this rule, cites concerns about increased reliance on natural gas, difficulties in integrating 

planned intermittent renewable energy sources within the existing bulk power system, and 

uncertainties associated with current and anticipated levels of energy efficiency and demandresponse resources. Commenters stated that NERC's overall assessment identifies substantial 

portions of the eastern and western United States that are projected not to meet planning reserve 

margin requirements in 2023. 

Commenters stated that as a vertically integrated municipal utility, providing not only 

generation, but also transmission and distribution to their customers, they own and operate 64 

miles of 138kV and 66 miles of 69 kV transmission lines for the 80 square miles of their service 

territory. Commenters stated that their original system and substations were all built on the 69kV 

transmission line, from which the majority of their load is served. Commenters stated that as part 

of the engineering and economic assessment of options to make APC and EE upgrades, they 

concluded the cost to retire these units was disproportionate to any gain. Commenters stated that 

one notable concern is the impact early retirement will have on their transmission system. 

Commenters stated that analysis of removal of 31 and 32 generation concludes reliability 

consequences of sufficient magnitude to require significant transmission upgrades and to 

mitigate these reliability issues, they would be required to install multiple new connections 

between the 69 kV to 138 kV system. Commenters stated that two engineering alternatives are 

available but costly. Commenters stated that the least expensive option that is deemed necessary 

but adequate is estimated to cost approximately $8,900,000 for upgrades that include new 
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transformers and a new 138 kV line. Commenters stated that the other option, which provides 

greater benefits, is estimated to cost more ($12,216,800 in 2012 dollars). Commenters stated that 

additional facility study would be necessary to determine a more accurate cost estimate, which 

would include a short-circuit analysis and stability analysis, and would also require a very 

coordinated outage schedule to complete any upgrades and additionally, these investments would 

have to be proposed analyzed and approved by the MISO, a time consuming and expensive 

process. 

Commenters stated that other logistical and financial issues arise with the concept of closing 

units 31 and 32. Commenters stated that in addition to the transmission voltage step down costs, 

the building that serves units 31 and 32 also houses unit 33. Commenters stated that during a unit 

33 outage, heat that is currently provided by units 31 and 32 boilers to the building and would no 

longer be available. Commenters stated that while this may seem inconsequential, the estimate to 

install building heat is $1.5 million. Commenters stated that closing the plant is estimated to cost 

an additional $1M, to address closure issues such as hydrogen and oil removal and other closure 

expenses. Commenters stated that sales associated with units 31 and 32 provide significant 

income to the City's general fund by contributing 30% of revenue of sales from these units. 

Commenters stated that revenue from sales associated with units 31 and 32 are also directed to 

fund their energy efficiency programs and therefore, early retirement of units 31 and 32 would 

require the City to determine not only how to pay for the transmission voltage step down, heating 

and closure costs, but also how to raise funds for the City services and their energy efficiency 

programs. 

Response 18: EPA believes the comments are primarily answered by the overall provisions of a 

long compliance period and flexible implementation in the rule. However, EPA is also sensitive 

to the need to maintain adequate infrastructure and to the time required to do so. EPA has 

considered these comments, along with others, and has modified the compliance period to 

provide for a later start year – 2022 rather than 2020 – and modified compliance requirements so 

provide a smoother path during the interim period from 2022 to 2029. EPA believes these 

modifications will provide sufficient time and flexibility to build transmission and related 

infrastructure to meet the requirements of the rule. 

Contrary to this comment, EPA does not rely solely on existing infrastructure or assume no 

additional transmission will be built. Planning for new infrastructure is a regular part of electric 

power industry operations and EPA believes that infrastructure required for this rule is within the 

normal planning parameters and can be achieved at modest additional cost. With respect to 

Building Block 2 and natural gas, the rule is expected to lead to increases at existing facilities, 

which can lead to less need for new transmission than new facilities. In the case of Building 

Block 3, new transmission infrastructure is already being developed to meet current increases in 

wind and solar power; increases that occur under the rule can be efficiently incorporated into 

these existing planning processes. For further information on natural can and renewables 

infrastructure, see the GHG Mitigation Measures TSD. See also the State Goal Computation 

section of this RTC in Chapter 4 for more information. 
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Comment 19: Multiple commenters noted that the intermittent operating nature of renewables 

could negatively influence reliability. Commenters also asked for funding related to variable 

generation resources and reliability issues. 

Commenters stated, "Replacing coal with alternative energy sources like wind turbines 

endangers electric grid reliability because the winds do not always blow." 

Commenters stated "The proposed Clean Power Plan will likely result in increased penetration of 

variable energy resources that will impact the operating characteristics and practices of the 

power system" leading to the need for "adequate flexibility to integrate intermittency and to 

provide regulation and other system reserve services." 

According to commenters, "increased operation and storage ability are key drivers" to "increase 

the reliability of variable generation resources." Commenters asked that "funding be available for 

research and development into the light-weighting of wind blades and turbines and development 

of new battery technologies." 

Commenters expected that "renewable generation [will] be constructed in states with higher 

wind and solar capacity and therefore not in the end use states." Commenters stated that "the 

transferring of renewable generation from one state to another to meet the CPP [will] result in 

additional system transfers which will increase the possibility of system frequency variations, 

congestion and reliability concerns." 

Commenters also noted that "line loss will increase during the system transfer of renewables." 

Commenters asked that EPA "incentivize states with low capacity factors for renewable energy 

by allowing for a multiplier for energy produced in the state." As an example, commenters 

stated, "some states in their renewable portfolio standard allow for a 1.25 to 1.5 multiplier for 

MWh produced in the state" bringing "projects, employment and economic develop[ment] to 

rural areas in a state and provides for a more efficient electric system paid for by 

members/customers who actually utilize the energy." 

Commenters stated that "prematurely retiring large quantities of reliable coal-based power while 

pushing intermittent renewable sources higher in the 'merit order of dispatch' could complicate 

the task of balancing loads and ensuring grid reliability." 

Commenters stated "Until there are massive breakthroughs in storage technologies, these 

intermittent sources have little hope of supplying base load energy." 

Commenters stated, "Renewables, at least at this point, are insufficient by themselves to ensure a 

reliable energy supply, so coal-fired plants must remain open to fill the demand gap and to 

provide back-up capacity in times of greater demand." 

Commenters stated, "One of the major issues with renewables is their impact on the electric 

grid's reliability due to the intermittent nature of their operation." Commenters added, "Another 

is the inability to match the times of peak electric demand with renewable energy availability 

(e.g., sun, wind, etc.)." According to commenters, "As a result, the grid requires fossil units to be 
206 

used as backups resulting in their operation at low loads and hence increased heat rate operating 

regime (i.e., low efficiency)." 

Commenters noted "As resource mix changes, the reliability characteristics associated with 

different generation types must be considered" due to "the challenge of steep daily ramps 

associated with intermittent resources such as wind and solar generators all coming online or 

going offline at the same time." Commenters also noted that "Some renewable resources 

generally operate at full production, rather than below maximum related output, which provides 

less flexibility." 

Commenters cited NERC studies that show "as variable sources of energy generation increase, 

maintaining voltage stability becomes challenging" and that "voltage stability is essential to a 

reliable electricity grid." 

Commenters noted "The rapid, unrealistic growth in variable renewable resources assumed under 

the Proposed Rule will pose acute challenges for maintaining grid reliability. For instance, 

commenters noted that "dispatchable resources like coal and natural gas provide a number of 

essential reliability services, including reactive power support, voltage support, frequency and 

ramping responses, and inertial support." According to commenters, "These are essential 

reliability services that variable renewable resources cannot presently provide in a reliable and 

economical manner." 

Commenters noted that "Renewable sources, such as wind and solar, are variable in nature and, 

as a result, are less reliable in providing energy and grid reliability services such as voltage 

support, frequency response, and contingency support." 

Commenters stated, "EPA's assumption that renewable energy can be increased to offset coal 

plants like Big Stone probably raises issues with respect to physical inertia necessary for long 

distance transmission." 

Commenters noted that "Integrating large amounts of renewable resources into the bulk power 

system requires significant changes to power system planning and operations to maintain the 

adequate level of system reliability." Commenters stated that "The major attributes of wind and 

solar photovoltaic ("PV") generation that are different from conventional forms of generation are 

variability and uncertainty of the available power output." Commenters added that "It is vital to 

understand the specific attributes of wind and solar PV generation and resulting impacts on 

power system performance." Commenters also added that "Large-scale penetration of renewable 

generation will displace the self-regulating characteristics of conventional synchronous 

generators and affect system stability." 

According to commenters, some of the attributes of renewable energy that affect system stability 

include inertia, frequency response, regulation, voltage stability, and low and high voltage ridethrough: 

• Related to inertia, commenters stated, "The energy rotating machines such as 

synchronous and induction generators can store and release, helping system 

transient stability. According to commenters, the "latest converter control 
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technologies in wind turbine generators and PV inverters can emulate inertial 

behavior similar, but are limited in magnitude, when compared to that of 

synchronous machines." 

• Related to frequency response, commenters stated that "Synchronous generators 

are equipped with a turbine-governor that provides corrective adjustment of 

power output in response to frequency excursion." According to commenters, 

"Conventional generators designated as Automatic Generation Control units 

control the power output to increase when the system frequency falls below or 

rises above the target (60 Hz) frequency." Commenters noted that without 

modifications that would reduce the amount of delivered power, "PV generation 

offers little to no frequency response, and wind generation offers virtually none 

unless specifically designed to do so." Commenters noted that recent studies 

suggested a need of over-frequency drop response capabilities on renewable 

resources." 

• Related to regulation, commenters noted that "Reliable operation of the power 

system requires continuous balancing of power supply and demand as demand for 

electricity ramps up and down." According to commenters, "conventional 

generation provide[s] controlled output following the fluctuating demand" but 

"wind and solar PV generation output is subject to instant available power from 

wind or solar irradiation." According to commenters, "the output of wind and 

solar PV generation is seen by the operator as negative demand, and the effective 

net demand (actual demand minus output from renewable resources) is controlled 

by traditional generation." According to commenters, "Managing the supply and 

demand balance can be challenging for system operators if the wind and solar PV 

output decreases as demand increases and vice versa." 

• Related to voltage stability, commenters stated, "Dependence on increasingly 

remote resources (such as those located in wind-rich rural regions of Texas) 

creates the need for increasingly expensive transmission equipment to ensure 

stable and reliable delivery because of the long distance and weak grid 

conditions." According to commenters, "The lightly loaded transmission 

infrastructure connecting concentrated wind resources in the Texas Panhandle is a 

prime example." Referencing ERCOT's recent study, commenters noted, "'The 

ERCOT panhandle grid is remote from synchronous generators and requires long 

distance power transfer to the load centers in ERCOT's Stability challenges and 

weak system strength are expected to be significant constraints for the Panhandle 

Export." 

• Related to low and high voltage ride-through, commenters stated "Renewable 

resources are required to stay connected after a certain disturbance period as 

specified in FERC Order No. 661-A." According to commenters, "Modern wind 

turbine generators and solar PV inverters are designed to have the low/high 

voltage ride-through capability through the converter controls." 
208 

Commenters stated that the notion that fossil fuel-fired baseload units can be replaced with 

intermittent RE generation and EE measures is not appropriate, as RE and EE are not 

dispatchable, intermittent and cannot be used for reliability. The commenters stated that the 

backup generation needed would likely be natural gas, which would diminish CO2 reductions 

and lead to more investment for natural gas capacity and therefore higher electricity prices. 

Commenters stated that electricity is fungible and that there is no way to distinguish between 

resources on the basis of environmental attributes. The commenters also stated that in many 

cases renewable or otherwise environmentally preferred resources are more expensive and that 

wind and solar at present cannot be dispatched at times of peak demand. The commenters further 

stated that the Clean Power Plan is likely to increase electricity costs and destabilize grid security

and power reliability due to overreliance on certain fuel sources and is likely to increase 

electricity costs and destabilize grid security and power reliability. 

Commenters stated that renewable energy resources require significant amount of reactive 

support and ramping capability and that EPA failed to consider the impact that increased reliance 

on renewable energy could have on increased reserve requirements, reliability of operations and 

the need for additional transmission infrastructure. Commenters stated that renewables require 

additional dispatchable generation (typically gas-fired combustion turbines) as backup for 

reliability purposes and the combination will be significantly more expensive than the existing 

coal plants. The commenters stated that it is unclear if EPA considered the additional 

transmission requirements that would be required to serve the projected levels of renewable 

generation in Building Block 3, particularly if they are in remote areas. 

Commenters stated that the proposed guidelines seek to more than double the energy capacity 

that currently is provided by variable energy resources, like wind and solar which will 

significantly increase the demand for reactive power and ramping flexibility and make 

maintaining voltage stability more challenging. 

Commenters stated that grid reliability issues associated with increased variable resources are not 

directly addressed in the EPA's proposed Building Blocks. The commenters stated that while 

conventional generators are able to respond automatically to frequency changes and historically 

have provided most of the power system's essential support services, a large penetration of 

variable energy resources will require maintaining a sufficient amount of reactive support and 

ramping capability. The commenters stated that more frequent ramping needed to provide this 

capability could increase cycling on conventional generation. The commenters stated this could 

contribute to increased maintenance hours or higher forced outage rates, potentially increasing 

operating reserve requirements. 

Commenters stated that renewables are an important source of electricity but large penetration of 

intermittent renewables will have a significant implication on many aspects of power system 

planning, operation and control. The commenters further stated that the proposed regulation will 

strand assets, raise the cost of operating due to load cycling, possibly raise the costs of meeting 

long term service agreements put in place before the onset of rapid and frequent cycling and 

diminish future investments in clean air technology. The commenters recommended that systems 

be put in place to ensure that artificial market mechanisms or regulations are not established that 
209 

encourages the deployment of assets favoring of a single technology that could aggravate the 

intention of ensuring a reliability electrical system. 

Commenters noted that in Europe, only 4% of the wind installed capacity has a probability of 

being available 95% of the time, solar power is characterized is well correlated with hours of 

high demand however large fluctuations in output are observed, and wind may result in such a 

low value of net demand that forces a large number of thermal units to shut down only to have to 

start up a few hours later. The commenters stated that by putting environmental dispatch as the 

first priority, Europe created an artificial market that encouraged the significant over-investment 

in renewables and exaggerated the impact of renewables on grid integrity, so that production 

from renewables can only be limited by security reasons. The commenters stated that in other 

words, whenever the market price equals zero or a negative value, even if the optimal solution is 

to curtail wind rather than stop a conventional thermal plant for a short period of time, renewable 

production will be scheduled to receive the feed-in tariff or premium. The commenters stated 

that this should not be considered acceptable and that conventional power plants should not be 

penalized for the inability of non-dispatchable power to meet peak demand. The commenters 

recommended that a different approach is needed to consider the cost of achieving environmental 

benefits, including subsidies that are not being considered. 

Commenters discussed the challenges associated with integrating new wind and solar resources, 

including the need for improved forecasting capabilities and the need to avoid curtailment to 

maintain operational reliability if sufficient ramping capability and operational reserves are not 

available during periods of high renewable penetration. The commenters detailed and discussed 

the modeling scenarios assessed by ERCOT which found that if a $25/ton CO2 scenario is 

employed, intermittent renewable generation sources will contribute 22% of energy on an annual 

basis in 2029 and meet interim and final goals through the installation of a higher proportion of 

solar and lower proportion of wind resources. The commenters noted limitations to the model, 

including difficulties modeling the real world challenges of accommodating maximum ramps 

from solar and wind generation decline and accurately forecasting the proportion, size and 

location of resources. The commenters stated that if wind resources are the majority of new 

renewable resources, the reliability impacts may be more severe because it results in lower net 

loads. The commenters also stated that regulation and non-spinning reserves will need to be 

increased to address increased intra-hour variability and uncertainty of power production from 

wind and solar, forecasting systems for wind and solar will become increasingly important, and 

market mechanisms for flexible generation to be reflected in real time energy prices will be 

needed. 

Commenters stated that EPA's analysis does not take into account operational or reliability 

impacts, and the impacts of the required transmission infrastructure, associated with the change 

in renewable energy generation that would be required to meet the goal. Commenters stated that 

increased use of wind power will significantly increase the demand for reactive power and 

ramping flexibility, which will increase cycling on conventional generation and often results in 

either increased maintenance hours or higher forced outage rates. The commenters stated that 

increased variable energy resource may also result in the need for increased reserve margins, 

which is problematic because the proposed rule will leave several regions with significant 

deficiencies in their reserve margin. The commenters also stated that new transmission will be 
210 

required to integrate new resources, which generally require a large amount of space and are 

often built in rural areas that are distant from the point of interconnection, with the existing 

electrical grid. The commenters added that in many cases variable energy resources will only be 

able to produce enough power to meet minimum voltage requirements. 

Commenters discussed the potential impacts if solar is expanded to meet the CO2 target goals 

amount, and stated that it would result in insufficient fossil generation on line to deal with 

system regulation and the loss of solar generation due to its variability. 

Commenters stated that impacts to the system from increased reliance on renewables must be 

included in the analysis of benefits included in the Clean Power Plan. The commenters provided 

a detailed explanation of the impacts of renewables and how they can negate the intended 

benefits of changing fuel source, including results of a net load projection developed by 

California ISO. The commenters recommended that: (1) a penalty be assigned to intermittent 

energy sources that result in negative impacts on other power sources relied upon to meet net 

load demands, impacts on energy losses in the electric grid resulting from increased use of 

intermittent sources, and impacts on downstream equipment that decrease overall system 

efficiency and equipment life; and (2) benefits be included for facility owners that invest in 

improving the reliability and efficiency of the entire system that will result in a net decrease in 

CO2, such as upgrading transmission and distribution systems though the inclusion of power 

factor upgrading devices or incorporating grid-scale energy storage, especially when it can be 

integrated into an existing generation facility. 

Commenters stated that DOE, EPRI, and several utilities acknowledge that high amounts of 

variable renewable generation (specifically solar, but also wind) present significant operational 

challenges to maintaining a secure and reliable electric grid, including the possibility of bottomout conditions in low load periods and ramping challenges, and that it is difficult to forecast long 

term capacities and impacts. The commenters remarked that the knowledge gained from the 

Sunrise project and other efforts is required before the impacts of large amounts of solar 

generation to distribution, transmission, and generation systems can be fully understood and 

quantified. The commenters also noted that renewables can create the need for additional 

regulating reserves in the short term which could impose additional regulating reserve costs and 

increase consumer costs. 

Commenters also noted that forecasting non-dispatchable renewables can be far more uncertain 

than forecasting temperature or load. Commenters cited an October 2011 study by EPRI 

indicating that day ahead wind production forecast errors could vary from 10 percent to 25 

percent or more. The commenters stated that forecast errors can only be overcome by having and 

using resources that are flexible enough to respond in the 30 to 60 minute timeframe which 

creates the need for "flexible" reserves in addition to the regulating and spinning reserves 

currently required by NERC standards. 

Commenters stated additional reliable backup generation will be required to ensure grid 

reliability and proper balancing since a significant portion of the additional renewable generation 

needed to attain Building Block 3 goals is wind. The commenters added that system frequency 

and voltages must be maintained within defined, extremely tight tolerances and wind and solar 

PV technologies present challenges to power system operators, owing to variability and 
211 

uncertainty of their generation output on the timescales relevant to the task of maintaining 

system reliability. The commenters indicated that the proposal failed to consider these needed 

generation resources and how they would be acquired and financed. 

Commenters cited, as an example, the California ISO, with its RPS of 33 percent of retail 

electricity from renewables by 2020, who indicate its grid's flexible generator capacity is 

nowhere near what it needs to be to accommodate increasing wind and solar energy on the grid. 

The commenters stated that any capital investment costs for increased flexible generator 

capacity, transmission system build-outs, and associated O&M cost increases, will be charged to 

rate payers via rate schedules and fees on electric bills, not to wind turbine owners. 

Commenters stated that NERC concluded that Building Block 3 would pose several reliability 

challenges: 

• EPA's analysis relies on resource projections that may overestimate reasonably 

achievable expansion levels and do not fully reflect the reliability consequences 

of renewable resources; 

• Increased reliance on of Variable Energy Resources (VERs) (e.g., wind and solar) 

can significantly impact reliability operations and requires more transmission and 

adequate ERSs to maintain reliability; and 

• With a greater reliance on VERs, transmission and related infrastructure 

expansion lead times may not align with the NOPR's implementation timeline. 

Commenters stated the EVA's analysis concluded that the flaws in EPA's assumptions suggest 

that as a technical and practical matter, the proposed rule is likely to be unachievable, and that 

the total costs will far exceed EPA's ten-year projections (2020-2030): EVA found that the 

proposed rule would increase wholesale electricity costs by $274 Billion, non-power natural gas 

costs by $80 Billion, and require additional capital costs for replacement power of $53 Billion.

Commenters stated that they are concerned that the increased use of renewable power and NGCC 

units anticipated by the Proposed Rule will result in greater cycling of existing baseload units 

which were not designed to run at variable generating rates. The commenters stated that 

operating at variable rates will increase the wear on plant equipment, in part due to metal 

expansion and contraction, which in turn will increase the occurrence of unscheduled outages 

and detrimentally impact reliability of the total electric system and that this unintended cycling 

will also lead to potential heat rate increases in coal units, contrary to the purpose of the 

Proposed Rule. 

Commenters stated that grid reliability issues associated with increased renewable resources are 

not directly addressed as part of the EPA's proposed building block approach and as the 

penetration of variable generation resources increases, maintaining system reliability will 

become more challenging. The commenters stated that given that Arizona would be required to 

retire all of its existing coal-fired generation in 2020 to comply with EPA's goals, additional 

assessments will be needed. 
212 

Commenters stated grid reliability issues associated with increased renewable resources are not 

directly addressed as part of the EPA's proposed building block approach, and based on recent 

industry studies and prior NERC reliability assessments, as the penetration of variable generation 

resources increases, maintaining system reliability will become more challenging. 

Commenters stated ERCOT's analysis indicates that the impacts of proposed and recently 

finalized environmental regulations will result in retirement of legacy base-load generation and 

development of new renewable generation resources will have a significant impact on the 

reliability of the transmission system and will likely require significant upgrades to the 

transmission infrastructure of the ERCOT system. The commenters said retirement of resources 

would result in a loss of real and reactive power, potentially exceeding thermal transmission 

limitations and the ability to maintain stable transmission voltages while reliably moving power 

from distant resources to major load centers. The commenters also said in the ERCOT region, it 

takes at least five years for a new major transmission project to be planned, routed, approved and 

constructed, and as such, the need must be seen at least five years in advance, though unit 

retirement decisions will likely be made with only the minimum required notification (currently 

90 days). 

Commenters stated units that are at risk of retirement from the proposed rule are located near 

load centers, and future transmission needs would be increased or accelerated by the likely 

retirements. The commenters gave examples in the Houston, San Antonio, and Dallas-Fort 

Worth regions. The commenters also stated growth in renewable generation would also likely 

have a significant impact on transmission requirements and provided examples to illustrate costs 

on recent upgrades. The commenters concluded that wile recent upgrades provide transmission 

capacity beyond current generation development, the new circuits will not provide sufficient 

capacity to reliably integrate the amount of renewables necessary to achieve the requirements of 

the proposed rule. 

Commenters concluded the retirement of existing capacity in ERCOT could result in localized 

transmission reliability issues due to the loss or fossil fuel-fired generation resources in and 

around major urban centers, and will strain ERCOT's ability to integrate new intermittent 

renewable generation resources. The commenters stated the CPP will also result in increased 

energy costs for consumers in the ERCOT region by up 20%. The commenters stated there is 

uncertainty regarding the implementation of environmental regulations. 

Commenters stated the CPP is likely to negatively and significantly impact the reliability of the 

electrical service they receive. 

Commenters stated the RIA understates the cost of intermittent sources of power, such as wind 

and solar as it is necessary to have available other power sources readily available and capable of 

supplying and balancing the total peak load of electricity to avoid disruption in supply. The 

commenters said, these "intermediate sources" are effectively constantly spinning and consuming 

fuel. The commenters gave the example of the variable nature of wind power. The commenters 

referenced the Idaho Public Utility Commission who placed a cost on the integration of variable 

sources of about $21/MWh. The commenters stated improved energy efficiency at power plants 

(CPP Building Block 1) would likely be at least partially offset by efficiency degradation 
213 

wrought by reliance on intermittent renewable energy technologies as a result of imposed 

efficiency degradation at power plants forced into grid balancing operation. 

Commenters stated modeling of blackouts and brownouts indicates that the higher the percentage 

of wind power on the grid, the greater the unreliability of the grid and the greater the likelihood 

of blackouts and brownouts, and the risk increases exponentially, not linearly, with increasing 

levels of wind generation. The commenters referenced NERC as having recognized the 

operational impact of variable energy resources such as wind and solar, which are the bulk of 

CPP building block 3. The commenters stated that operationally, an increase in wind and solar 

resources continues to challenge operators with the inherent swings, or ramps, in power output, 

and system planners accommodate added variability by increasing the amount of available 

regulating reserves and potentially carrying additional operating reserves. 

Commenters stated that Building Block 3 assumes state-level increases in renewable energy 

generation based on regional renewable energy targets and the preservation of "at risk" nuclear 

and under construction nuclear. The commenters stated that any significant changes involving 

new generation, retiring generation, and/or changes in the dispatch or operating parameters of 

existing generation can have significant power system (grid) reliability impacts and that 

compliance with this proposal as currently drafted could significantly alter the generation mix. 

The commenters stated that assessments to determine which specific units may be retired and 

specific units will replace them cannot readily be performed and could vary depending upon the 

actual provisions in the final state plan. The commenters stated that transmission facilities will be 

required to reliably integrate new facilities into the system. 

Commenters stated they worked with members of the AUG to develop proposed improvements 

to goal calculations for Arizona. The commenters stated if EPA would implement these 

improvements, the impact to customers would be $2.4 billion less than if the commenters were 

forced the implement the rule as proposed by EPA. The commenters also stated it is important 

for EPA to support a rational path for carbon reductions that fully accounts for the complex 

structure of the country's current electric generation and transmission grid, natural gas supply 

network, and the recent infrastructure investments mandated by EPA. 

Commenters stated concerns about renewables, nuclear, and infrastructure. 

Commenters stated that that the proposal makes broad assumptions about access to renewables 

and fails to consider how increased renewable penetration will impact grid reliability and 

existing base-load capacity. The commenters asked the following questions: 

• Has the federal government conducted an analysis to determine the environmental 

impact of building renewable energy systems at the scale envisioned in the 

proposal? 

• Given the amount of land required by renewable energy systems, has the 

Administration considered that federal land permitting requirements may preclude 

or stall the development of renewable projects? 
214 

• Has the Administration mapped out a transition pathway for renewables from an 

artificial to a competitive market? 

Commenters stated that the proposal supports nuclear power as a key part of carbon dioxide 

emissions reduction strategy and maintaining existing reactors and building new units is essential 

for many states to reach their assigned reduction targets; however, at least nine states have bans 

on new nuclear builds. The commenters asked the following questions: 

• Will a viable, long-term solution for disposal that would win public support and 

the necessary votes in Congress be brought forward, and if so, when? 

• If not, are the states with bans on new nuclear facilities expected to revise their 

laws? 

Commenters stated that the proposal entails significant fuel switching from coal to natural gas, 

but most retiring coal plants cannot simply be replaced by natural gas plants. The commenters 

asked the following questions: 

• What steps will be taken to ensure the necessary construction of interstate natural 

gas infrastructure, including pipelines? Will you consider expediting the 

environmental impact study (EIS) process so that gas transmission can be built to 

serve constrained regions? 

• What is the estimated cost of the gas infrastructure required to meet compliance 

targets under the proposal, and who does the federal government foresee paying 

for it? 

Commenters stated that adding significant renewable resources to the grid could create additional 

interconnection, congestion and dispatch problems, threatening the reliability of the electrical 

supply. Commenters stated that congestion is currently a problem for the 800+ wind turbines 

located in and around White County, Indiana. Commenters stated that this problem has been 

acknowledged by other U.S. federal agencies. Commenters stated that a 2014 draft study on 

congestion by the U.S. Department of Energy found that in the Midwest "congestion results from 

high and growing levels of wind generation that cannot be delivered from western sources to 

more distant loads, and the lack of additional transmission to enable further development in 

renewable-rich areas." Commenters stated that they have no reason to believe EPA took these 

unique circumstances into consideration when drafting the proposed rule, which calls into 

question the appropriateness of the agency's expectations for Indiana. 

The commenters stated that the TSD states that, where needed for reserve margin, retiring 

capacity is replaced by new generation sources, including 10 GWs of wind. Commenters stated 

that the TSD incorrectly discusses wind generation as if it can provide the same capacity as 

baseload resources. Commenters stated that it is inappropriate to assume that wind can provide 

capacity to ensure reliability. Commenters stated that periods of peak demand often occur when 

wind is minimal (i.e., hot summer days/nights with stagnant air conditions). Commenters stated 

that during the coldest winter days/nights, wind conditions do not consistently support 
215 

generation. Commenters stated that during these periods, it is a high risk to assume that 10 GWs 

of wind will be available. 

Commenters stated that wind and solar power generation naturally fluctuate depending on 

weather conditions and therefore require a solid alternative backstop to ensure that provision of 

electricity remains constant. Commenters stated that Building Block 3, as amended by the 

NODA, undermines this security by forcing the reduction of coal-fired EGUs as RE utilization 

climbs. Commenters stated that the significant re-dispatch of NGCCs also takes away some of 

the margin currently available to firm renewables. 

Commenters stated that EPA's proposal to nearly double the state's RE sources in Building Block 

3 poses additional problems for rules put in place by the SPP to ensure reliable operation of the 

regional grid. Commenters stated that based on criteria, they can only consider approximately 5 

percent of its wind generation toward its planning capacity margin requirements. So, in order to 

replace a 500 MW coal plant with enough wind to meet the capacity requirements of the SPP, 

commenters stated that they would need to install 10,000 MW of wind generation (which, again, 

under the Proposed Rule and NODA would mandate the reduction of coal-fired generation, 

resulting in a vicious cycle. 

Commenters stated that they do not believe that it has been adequately demonstrated that noncombustion renewable sources can serve as providers of base load power. Commenters stated 

that they do not believe that the differences in generation dispatched to serve various demand 

levels were considered fully in either the RE goal setting calculations or the IPM model. 

Commenters stated that there are significant grid reliability concerns that have not been 

adequately addressed. Commenters stated that a clear distinction between base load and non-base 

load capable renewable sources must be made in both the goal setting and IPM projections. 

Commenters stated that EPA acknowledges some renewable resources provide intermittent 

availability. Commenters stated that EPA indicates that storage can serve to bridge the 

intermittent availability of those resources. Commenters stated that they believe EPA is 

overestimating the ability of electricity storage technologies and that it cannot be counted on to 

address reliability issues with RE sources. Commenters stated that electricity storage technology 

has not advanced to a degree that it can be reliably considered. Commenters stated that DOE 

states: "Industrial standards for grid storage are in their infancy. Industry acceptance could also 

gain ground when we reduce the uncertainty surrounding how storage technology is used, and 

monetized, at scale. Ultimately, it will be the experience and real-world use of storage that will 

provide the confidence and desire to expand installed storage." 

Response 19: The EPA addresses considerations for feasibility of the 2030 level of RE 

deployment, and the rate of progress during the interim period in getting to that level, in section 

V.E on building block three of the preamble to the final rule. RE feasibility is addressed in more 

detail in the GHG Abatement Measures technical support document. EPA found that these levels 

were supported by comments received, DOE analysis, and external studies evaluating the costs 

of and potential for higher levels of RE penetration. 
216 

Comment 20: Commenters stated that renewable generation sources do not interfere with the 

reliability of the electricity system. 

Commenters stated, "despite being an intermittent resource, wind energy has proven to be a 

reliable source of energy" and has provided "more than 10 percent of the energy mix in multiple 

states across the country, and it has not led to any reliability concerns throughout those states." 

Commenters offered counterpoints to common arguments about voltage support and frequency 

stability services, two "Essential Reliability Services" (ERSs) that could be negatively affected 

by renewable generation sources: 

• Voltage support. According to commenters, voltage support "mostly comes down 

to the grid's ability to balance 'real' power (the usable power on the grid) with 

'reactive' power (the unusable power on the grid, also called phantom power)." 

Commenters cited NERC's ERS Task Force in stating that "generators attached to 

wind or solar plants also can provide both real and reactive power, and inverters 

attached to those generators can do so even when the plants are not producing any 

electricity." 

• Frequency stability. According to commenters frequency services "are primarily 

focused on maintaining the system at the standard frequency (in the United States, 

this is 60 Hertz, or power cycles/second)." Commenters noted that "Perhaps the 

most pervasive critique of renewable energy resources from a reliability 

perspective is that they are unsuited for providing ramping services because their 

output is constrained by meteorology." According to commenters noted that 

"Wind power plants in particular, but also large-scale solar installations, are 

already required to have the capability to provide ramping services as required." 

Commenters ended their argument with "This is not to say, of course, that it will 

necessarily be good policy to ask too much ramping from utility-scale renewable 

generators, because doing so normally requires curtailing their power output 

(which reduces their overall capacity factors); but finding the right balance is part 

of the challenge to which EPA rightly expects states and grid operators can and 

will respond." 

Commenters noted that "technical experts have concluded that variable renewable energy 

resources can represent as much as 50 percent of electric systems, provided that utilities make 

'investment in additional distribution and transmission system infrastructure as well as changes 

in electric system operations, markets, and planning to achieve reliability.'" 

Commenters supplied detailed information related to the inherent reliability of renewable 

generation sources in the next comment. 

Commenters stated that to absorb more solar energy into the electric grid, there are ways that the 

electric grid can be adapted and as part of a balanced energy portfolio, solar can improve grid 

reliability and provide benefits to the existing energy infrastructure, including reducing 

transmission losses and relieving congestion on the grid. The commenters stated that advanced 

features enable solar PV to provide a state or region with additional system flexibility by 
217 

responding to utility and independent system operator instructions. The commenters went on to 

describe operations by a solar provider. 

Commenters stated that on an aggregated basis, utility scale and distributed solar resources 

provide significant reliability and transmission benefits to a state or regional grid. Commenters 

stated even if solar output varies at a few individual locations due to localized cloud coverage, 

when the sum of the solar installations in a geographic area is assessed, the variability is reduced 

and can be managed by the grid operator. The commenters stated further that targeted 

deployment of solar generation in congested areas can provide relief to transmission and 

distribution systems, defer costly transmission upgrades, and help maintain grid reliability. The 

commenters stated that solar technologies that require transmission investment often do not 

require pipelines, coal transport or the associated production and processing infrastructure 

needed by coal and gas industries, thus having the potential to save immense costs as the energy 

infrastructure in the U.S. ages and requires repairs. 

Commenters stated that the CPP encourages the use of modern electricity resources, such as 

solar power and energy efficiency, which have many additional co-benefits. The commenters 

noted that solar is a zero-fuel resource, so solar energy protects customers from the risks of price 

volatility from fossil fuel generation and as a result, can provide important hedge value to 

customers, insulating them from potential future increases in fuel prices from natural gas and 

coal. The commenters stated further that distributed solar power and energy efficiency benefit 

our transmission system and because they allow us to generate electricity right where we need it, 

these resources can lessen the strain on our aging grid and reduce the need for expensive new 

transmission and distribution infrastructure. 

Commenters stated solar can improve grid reliability and provide benefits to the existing energy 

infrastructure, including reducing transmission losses and relieving congestion on the grid. 

Commenters stated that there are several resources the EPA can look to for understanding how 

solar fits into the grid in terms of reliability and higher penetrations of renewable energy. 

Reliability and Transmission Benefits of Solar: Commenters stated solar energy can be 

configured and operated to provide various reliability services and transmission benefits that will 

be essential to electric power system operations in conjunction with the state implementation of 

111(d) regulations. 

Commenters stated that on an aggregated basis and utility-scale, distributed solar resources 

provide significant reliability and transmission benefits to a state or regional grid. Commenters 

stated that even if solar output varies at a few individual locations due to localized cloud 

coverage, when the sum of the solar installations in a geographic area is assessed, the variability 

is reduced and can be managed by the grid operator. Commenters stated that solar technologies 

that require transmission investment often do not require pipelines, coal transport or the 

associated production and processing infrastructure needed by coal and gas industries. 

Commenters stated that this has the potential to save immense costs as the energy infrastructure 

in the U.S. ages and requires repairs. 

Commenters stated that they do not agree with ERCOT or NERC that distributed generation 

represents a serious reliability concern in the near-term future, to give one example, the 9 to 13.5 
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GW of new solar capacity ERCOT's model anticipates over the next fifteen years is entirely 

utility-scale generation, but to the extent some market changes are needed, we note again that 

grid operators are already examining the various changes that may be required. 

Response 20: The EPA appreciates this comment and agrees that RE can be an important part of 

the mix of generation types in a system. Please see the GHG Abatement Measures technical 

support document for more information. 

Comment 21: Commenters noted the following details on the reliability of renewable generation 

sources: 

"With the potential for utilities in the Southeast to deploy renewable energy resources on their 

systems at a scale of 15% or more over the next decade, some may raise concerns about 

reliability risks or other operational considerations. Elsewhere in the country, technical experts 

have concluded that variable renewable energy resources can represent as much as 50 percent of 

electric systems, provided that utilities make 'investment in additional distribution and 

transmission system infrastructure as well as changes in electric system operations, markets, and 

planning to achieve reliability.' 

Across much of the United States, these questions are systematically addressed through the 

planning processes of regional transmission operators (RTOs), independent system operators 

(ISOs) and super-regional planning councils. For example, the US DOE SunShot analysis 

included GridView simulations to verify the basic hourly operational feasibility of high solar 

scenarios, confirming that electricity demand and operating reserves are completely served in all 

areas during every hour of the year. 

However, in the Southeast, several large vertically-integrated utilities conduct their own resource 

adequacy, reliability and operational planning with minimal market exposure. Due to historically 

limited solar and wind development, vertically-integrated utilities in the Southeast have not 

provided analyses of renewable energy that are as comprehensive or similarly robust as those in 

RTO or ISO regions. While few of their planning studies have thoroughly examined renewable 

energy resources, these studies do often raise questions regarding renewable resource adequacy, 

reliability and flexibility. 

A new study by SACE, provided as Attachment A, summarizes the information available from 

these utilities, and answers several key questions (laid out below) with analysis that could be 

used in a variety of energy planning activities. 

• Renewable energy offers dependable on-peak capacity that is effective at 

replacing conventional power resources. While the specific values vary by 

technology, a blended portfolio of wind and solar resources is likely to provide 

dependable capacity of approximately 50 MW per 100 MW of nameplate 

capacity. 
219 

• While the dependable capacity ratings of renewable energy would decline with 

large scale deployment, that decline will be gradual and predictable, and will 

remain substantial at generation levels of 10-20% of annual energy demand. 

• While renewable energy resources are variable, they perform very well during 

high demand periods when utility systems need to use most of their generation 

resources. On average, regional solar and imported wind resources should 

generate at 50-60% capacity factors during these hours. At current and near-term 

levels of renewable energy use, long-term modeling analysis indicates no 

increased reliability risks at the system level--even during hours in which 

renewable energy production might be low. Even if renewable energy is increased 

to meet 10-20% of annual energy demand, reliability should be relatively 

unaffected on balance. At these higher levels of renewable energy use, there 

would be a balance of increased and decreased risks that utilities would need to 

study and monitor. Hours with increased reliability risks would occur very 

infrequently, roughly one hour per year on average. That same level of renewable 

energy generation would also increase the number of hours in which reliability is 

ensured by about 80 hours per year. 

1. Solar power is unlikely to cause some utility systems to effectively shift from a 

summer to winter peak. With responsible planning and management, renewable 

energy will not be a problem during a "polar vortex" type event. 

2. Utility operators will not need to increase the ramping of convention generation in the 

near future. Up to around 10% of energy supply, utility systems may actually be 

easier to operate, since solar energy in the Southeast is closely aligned with system 

peaks. While the transition point depends on the utility system and the resources 

applied, even at 10-20% of annual energy demand, the California "duck curve" 

problem of high ramp rates for conventional generation is unlikely to appear in the 

Southeast. 

These questions have been answered by matching industry-standard data about potential wind 

and solar generation to the historical generation data supplied by Duke Energy (in the Carolinas), 

Southern Company (including Alabama, Florida, Georgia and Mississippi subsidiaries), and the 

Tennessee Valley Authority (serving portions of seven Southeastern states). The methods applied 

in these analyses apply industry-standard techniques, enhanced to more carefully examine 

concerns about renewable energy development in the Southeast." 

Response 21: The EPA addresses considerations for feasibility of the 2030 level of RE 

deployment, and the rate of progress during the interim period in getting to that level, in of the 

preamble to the final rule in section V.E which discusses building block three. It is further 

addressed in more detail in the GHG Abatement Measures technical support document. EPA 

found that these levels were supported by comments received, DOE analysis, and external 

studies evaluating the costs of and potential for higher levels of RE penetration. 
220 

Comment 22: Commenters commented on the national security and cybersecurity risks that will 

be increased by the proposed rule. 

Commenters noted that "the U.S. power sector already faces serious cyber security threats." For 

example, commenters noted, "Recently, Admiral Michael Rogers, director of the National 

Security Agency and head of U.S. Cyber Command, testified before a House Intelligence 

Committee hearing on cybersecurity threats that other countries are currently capable of 

launching cyber-attacks that would shut down the electric grid." Commenters stated that "EPA 

must work with the NSA, Homeland Security and all stakeholders to ensure implementation of 

the Clean Power Plan, with its heavy reliance on natural gas, does not exacerbate this situation." 

Commenters stated that "Reliable and secure electric generation and transmission are essential to 

national security and the economy." According to commenters, "EPA is proposing sweeping 

unprecedented changes to the interconnected power system, including the natural gas 

transmission system, yet has not conducted a baseline study of the cumulative interstate and 

intrastate effects of the proposed building blocks on stability, reliability and security." 

Commenters also noted the national security aspects of the rule by stating, "the effect of applying 

the Proposed Carbon Rule also adversely affects national security with respect to critical energy 

infrastructure facilities by rendering that infrastructure less resilient to natural or man-made 

disasters." 

Commenters stated that as indicated above, the heavy reliance on intermittent resources and 

natural gas, raises serious reliability questions. Commenters stated that with reliability concerns 

come national security concerns. Commenters stated that if the grid becomes heavily reliant on 

natural gas, the natural gas supply as well as the pipelines themselves become targets for the 

disruption on our electric grid, whether by vandals or domestic or foreign 

terrorists. Commenters stated that in January, 2014, a TransCanada natural gas pipeline near 

Winnipeg ruptured and exploded. Commenters stated that the explosion not only affected 

TransCanada, but led to the precautionary closure of two nearby pipelines, resulting in the loss or 

severe limitation of natural gas to more than 100,000 customers in the upper 

Midwest. Commenters stated that utilities responded by asking home-heating and other 

customers to limit natural gas consumption. Commenters stated that markets responded with a 

dramatic jump in natural gas prices. Commenters stated that in May, 2014, a natural gas line 

belonging to Viking Gas Transmission Co. exploded, affecting customers again. Commenters 

stated that if those same customers were also reliant on that natural gas for electricity as well, the

results would have been even worse. 

Commenters stated that the proposed rule moves the nation away from centralized power to a 

more decentralized or distributed placement of generation. Commenters stated that with a 

centralized generation approach, security and reliability is protected by redundancy in the 

system, particularly with redundancy in transmission and distribution lines. Commenters stated 

that as the nation moves to a more decentralized approach, there will need to be transmission and 

distribution upgrades not only to support the new generation being built, but also for reliability 

and redundancy. Commenters stated that if that redundancy in infrastructure is not met or 

delayed, it again opens the grid to a national security risk. Commenters stated that without 
221 

sufficient redundancy, a portion of the grid may go down without the possibility of "re-routing" 

the power around the disrupted portion of the grid to serve customers. 

Commenters stated that it would be highly irresponsible for EPA to adopt the Clean Power Plan 

in a vacuum, disregarding the fact that significant impacts on the electric industry pose a direct 

threat to the most critical missions of our national defense. Commenters stated that the failure of 

EPA to evaluate grid vulnerabilities that can impact defense missions, and lead to major 

economic ramifications, demonstrates that EPA has not adequately evaluated the reliability 

issues created by its proposal. Commenters stated that until it does so, in close collaboration 

with NERC and FERC, the proposal should be delayed indefinitely. 

Commenters stated that one of the biggest impacts of block 2 is that it means shutting down or 

reducing coal-fired generation. Commenters stated that shutting down coal-fired plants, 

particularly in the short period of time allowed by the glide path and the interim goals, means 

that there is less base load on the grid to provide vital ancillary services. Commenters stated that 

it is assumed that given the short time for compliance, it will force more reliance on and buildout of NGCC. Commenters stated that the decrease in diversity is also a decrease in reliability, 

as well as a possible national security issue. Commenters stated that the reliance on significant 

increases in intermittent renewables coupled with competing natural gas uses (peaking, base 

load, voltage support, harmonics, and dispatchable power, not to mention winter heating) puts 

the robustness and stability of the grid at risk. 

Response 22: EPA is sensitive to potential implication of the rule for national security and cyber 

security risks, but does not agree that the rule increases these risks. The specific concerns 

expressed in this comment have been addressed in other responses in this section. For 

infrastructure concerns, see Response 18; for reliability concerns see Responses 7 and 9 in 

section 8.9 of this RTC. 

Comment 23: Commenters asked that skill certification standards be put in place to improve the 

reliability of the electricity system. 

Commenters suggested that EPA consider requiring the industry to "adopt skill certification 

standards to ensure that all new and modified facilities we are going to rely on for our future 

energy systems" are "correctly designed, [and] properly constructed, which means the skills of 

the construction craft personnel should be specified, evaluated and verified or the end goal of 

reliability will again be put at risk." 

Response 23: The EPA agrees worker certification can help to ensure that that construction 

personnel are well qualified to perform high quality work which can benefit the program and 

achievement of state goals. EPA encourages states to ask for a demonstration that the work is 

performed by a proficient workforce. We further suggest that a good way of ensure such a 

workforce is to require that workers have been certified by: 1) an apprenticeship program that is 

registered with the U.S. DOL, Office of Apprenticeship or a state apprenticeship program 

approved by the DOL; 2) a skill certification aligned with the U.S. DOE Better Building 
222 

Workforce Guidelines and validated by a third party accrediting body recognized by DOE; or 3) 

other skill certification validated by a third party accrediting body. 

Comment 24: Commenters noted that the proposed rule interferes with existing state authorities 

and mandates to provide reliable, affordable electricity. 

Commenters stated that "Implementation of the Clean Power Plan raises a host of complicated 

jurisdictional questions that promise to roil state oversight of the electricity sector in Montana." 

Commenters gave the following examples: 

• "EPA's proposal is silent as to which state body should implement the regulatory 

regime." For commenters, federal environmental statutes have been administered 

in Montana by the Board of Environmental Review and the Department of 

Environmental Quality while the Board of Environmental Review has rulemaking 

authority and the Department of Environmental Quality is delegated enforcement 

and administration of air quality laws. Commenters stated, "the proposed 

regulation lends no insight into which body should take the lead." For example, 

commenters offered, "Were the Board of Environmental Review and the 

Department of Environmental Quality to adopt their traditional roles, and assume 

responsibility for the implementation of section 111(d), the two state bodies, in so 

doing, undoubtedly would override the Public Service Commission's legal 

authority to oversee the state's electricity market." Commenters stated that "In all 

likelihood, the legislature would have to decide who leads by passing an enabling 

statute." 

• "The Clean Power Plan also confuses Montana's participation in multistate power 

grids." According to commenters, "the Clean Power Plan seems to require the 

State to somehow deputize regional grid operators as part of its State 

Implementation Plan" and "it is unclear how this could be accomplished." 

• "EPA's Clean Power Plan would thrust into regulatory limbo the state's 

municipally-owned utilities." According to commenters, "these 'munis' would 

have to be part of any Montana strategy to achieve the Clean Power Plan, but they 

are exempt from rate regulation by the Public Service Commission." 

• "The proposed regulation is silent as to how Montana should incorporate its 

public power utilities into a compliance plan" and "any attempt to further regulate 

these entities no doubt would court a political battle." 

Commenters noted "States have jurisdiction over retail markets, while FERC has jurisdiction 

over wholesale markets." 

Commenters stated, "The Proposed Rule materially intrudes on Montana's authority to make 

determinations critical to the interests of Montana's retail and wholesale electric ratepayers, 

including LCG's members." 
223 

According to commenters, the rule "violates both Missouri state law and federalism principles 

guaranteed to Missouri under the Constitution of the United States by Tying the Hands of 

Missouri's Public Service Commission from Managing the State's Electricity Grid". Commenters 

added these specifics: 

• "by setting emission rate limits that can be achieved only through aggressive 

outside-the-fence measures, EPA is attempting to substitute its judgment for that 

of our State's PSC, utilities, grid operators, and other Missouri decision-makers 

with respect to allowable amounts of electricity from coal, natural gas, nuclear, 

and renewables." 

• "EPA is presuming how much electricity Missourians should use. This is the job 

we have delegated to the PSC. If EPA requires transmission utilities to dispatch 

electricity to draw from 'greener' energy sources instead of the most costeffective--for example, favoring drawing power from wind plants instead of coal 

plants--EPA would infringe on the authority of energy regulators at all levels. In 

this regard, the Proposed Rule would deprive the Missouri PSC of its ability to 

maintain constant and reliable electricity supply at the times it is most needed." 

Commenters stated that the rule "threatens to disrupt long-term, proactive planning of Georgia's 

energy generation and distribution networks that will potentially lead to reduced reliability, 

supply disruptions, wasted resources and more expensive energy supplies." 

Commenters noted that Missouri River Energy Services (MRES) is already "allowing municipal 

utilities to make their own resource decisions to meet state goals and mandates." As a result, 

commenters added, they are "able to carefully study and select those resource projects that best 

fit the needs of its 61 member communities in four states, and do so without creating major rate 

shock." According to commenters, "The Clean Power Plan is the direct opposite of the thorough 

and deliberative process used by MRES and municipal utilities everywhere to provide reliable, 

cost-effective long term energy and energy services in a fiscally responsible and environmentally 

sensitive manner" and "gives no credence to reliability, planning horizons, and power quality." 

Commenters stated that wind and solar, the predominant renewables being deployed currently, 

are both intermittent resources which strain the system and require redundant resources to back 

up when they are not available. Commenters stated that the NERC report says that in 2008, 

Texas faced a near catastrophic event when it unexpectedly experienced a loss of all of its wind 

capacity at once when a major weather system moved through the state. Commenters stated that 

the NERC report says that dramatic events like that will only become more common with the 

massive deployment of renewables contemplated by the Clean Power Plan. Commenters stated 

that the NERC report says that in such a case, fossil resources will need to be called upon to try 

to pick up the load and avoid a voltage collapse, causing a widespread black out. 

Commenters stated that Wyoming has vast wind resources which it is eager to 

develop. Commenters stated that the NERC report says that since it has no significant load to 

utilize those resources, high voltage transmission must be built from Wyoming across multiple 

states to reach its intended Nevada or California destination. Commenters stated that without 

that build-out of transmission, the renewables demanded by the Clean Power Plan lack the 
224 

critical infrastructure to move forward with a currently proposed 1,000 MW wind farm. 

Commenters stated that it is irresponsible to take the approach that forces utilities and others to 

build renewables without first ensuring the reliability of the underlying infrastructure. 

Commenters stated that one of the underlying assumptions of the proposed rule is that natural 

gas, renewables, and energy efficiency can each replace coal-fired generation and that each are 

interchangeable with the other. Commenters stated that when it comes to reliability, the fact is 

that electric generation is not fungible as EPA states. Commenters stated that intermittent 

renewable energy cannot provide voltage control or dispatchable (reactive) power. Commenters 

stated that in 2008 when the ERCOT system came dangerously close to experiencing a black out, 

the grid frequency dropped suddenly when wind production fell from more than 1,700 

megawatts to 300 MW and a system emergency was declared. Commenters stated that multiple 

power suppliers fell below the amount of power they were scheduled to produce. Commenters 

stated that this created problems moving power to the west from North Texas, leading to the 

emergency. 

Commenters stated that NERC explicitly points out that an increasing reliance on natural gas 

poses reliability concerns when, for example, extreme weather strains demand for 

electricity. Commenters stated that NERC reported that during Winter 2012-2014, there were 

over 35,000 MW of outages due to cold weather and fuel issues; 17,700 MW of those outages 

were caused by frozen equipment, controls, and frozen coal. Commenters stated that a number 

of generators were exposed to extremely high fuel prices and interruptible gas transportation was 

often unavailable. Commenters stated that, as a result, uplift costs in organized electricity 

markets for the month of January 2014 rivaled the total uplift incurred by the RTOs for an entire 

year. (PJM reported energy uplift costs greater than $500 million for January 

2014.) Commenters stated that in addition, record high natural gas price spikes drove up prices 

to electric end use customers, both in real-time and over the past year, as higher wholesale 

electric prices were passed through in retail electric rates. 

Commenters stated that the final rule should be modeled and studied by NERC, the RTOs, and 

by state utility boards to simulate the impact on reliability. Commenters stated that the modeling 

should include recommendations and cost estimates for infrastructure and upgrades needed to 

maintain high reliability and power quality, including transmission and distribution equipment 

upgrades and build-out, plans to meet incremental and large load growth, and build-out of 

transmission and natural gas infrastructure. 

Commenters stated that in SPP's Reliability Impact Assessment of the EPA's Proposed Clean 

Power Plan dated October 8, 2014, the RTO reported on its analysis of the impact of the 

proposed rule. Commenters stated that its work indicates an expected increase in thermal 

overloads and low voltages due to EPA's assumed retirements, and that its summer peak 

modeling runs were not solving under a single contingency due to an extreme lack of reactive 

support. Commenters stated that under the Clean Power Plan, its minimum required reserve 

margin of 13.6% cannot be maintained and the reserve margin will fall to a -4.0% by 2024, as it 

experiences a capacity deficit of approximately 10,100 MW. Commenters stated that SPP has 

emphasized in its Assessment that the Clean Power Plan will require an unprecedented level of 

coordination and study by local, regional and national experts before it can possibly be 

implemented. 
225 

Commenters stated that the NERC report emphasizes the need for a "Reliability Assurance 

Mechanism," or a reliability "back-stop" to preserve the reliability of the Bulk Power System 

(BPS) and manage impending risks to the BPS. 

Response 24: The implementing regulations at 40 CFR part 60.26 require that each state plan 

show the State has legal authority to carry out the plan. The EPA notes that for state plans under 

CAA section 111d, usually it is the state environmental agency that will be responsible for 

submitting and implementing a plan per the emission guidelines. However, under the 

implementing regulations, states may authorize a state governmental agency, or local agency, 

other than the air pollution control agency to carry out the plan if the plan demonstrates to the 

EPA’s satisfaction that such agency has the legal authority to implement the plan. 

EPA encourages the State agency with appropriate legal authority to work closely with the other 

state agencies where a state plan affects those agencies area of jurisdiction. These other agencies 

are likely to include the state public utility commission and state energy offices and possibly 

others. Close coordination among these agencies will help to produce a high quality plan. 

The ISOs/ and RTO’s are not under the jurisdiction of states. However the ISO/RTO Council 

has offered to assit the states as they develop and implement their plans. EPA encourages the 

states to discuss state plan design with these organizations and make use of their capabilities. 

Comment 25: Multiple commenters made statements concerning FERC regulations and 

FERC jurisdiction under the FPA. 

Commenters asked that "EPA, in its dealings with FERC, seek ways to assess the effect of the 

proposed Rule on natural gas delivery systems and ensure natural gas deliverability, which is 

outside the control of electric utilities, is sufficiently reliable to permit compliance with the final 

rule." 

Commenters stated that "FERC is legally-designated with the authority and responsibility for 

grid reliability" and "The most efficient and productive manner of moving forward with the 

proposed Rule's implementation is for FERC and EPA to work closely and effectively together 

regarding the mandates imposed by the proposed Rule, mindful of reliability and other electric 

grid issues, for the benefit of the country, including the electric industry." Commenters noted that 

there are "aspects of the proposed Rule that have the potential to abridge or affect FERC's 

jurisdiction over grid reliability, specifically, and the utility industry, generally."

Commenters noted that FERC "has oversight over the re-dispatch from coal-fired EGUs to 

natural gas-fired EGUs to the extent that it includes wholesale generation or interstate 

commerce transactions." Commenters noted that "to comply with the Clean Power Plan, states 

may have to submit plans that may contradict FERC requirements, which potentially sets states 

up for failure." Commenters asked for guidance to address this potential conflict between the two 

agencies. 
226 

Commenters stated that FERC and NERC "have the expertise on the reliability implications of 

altering the generation resource mix in the nation's energy markets." 

Commenters asked that FERC be involved to assess "both the reliability implications of the 

Clean Power Plan as well as its implications for a host of issues that fall within FERC's 

jurisdiction." 

Commenters reminded EPA of the Energy Policy Act of 2005 where Congress recognized that 

"the population density of the New York City area, the percentage of the population that lives or 

works in very tall buildings and relies upon underground transportation, and the critical 

importance of institutions located there intensify the need to maintain the reliability of New 

York's electric system." 

Commenters stated, "EPA's proposed CPP rule impinges on FERC's regulatory primacy over 

energy markets and ensuring the reliable operation of the bulk electric system" and "EPA should 

respect the equal and exclusive jurisdiction of FERC and not seek to dictate electricity policy 

that could have harmful impacts on grid reliability." 

Commenters noted, "Congress clearly intended FERC to have exclusive jurisdiction over 

wholesale, transmission and grid reliability because it granted the agency such jurisdiction in the 

FPA as modified by the Energy Policy Act of 2005." Commenters noted that Congress "intended 

that the CAA be confined to the regulation of air pollution and not the energy sector writ large, 

which is under the statutory jurisdiction of FERC." and "clearly intended that matters that can be 

left to the states must be left with the states." 

Commenters noted "States have jurisdiction over retail markets, while FERC has jurisdiction 

over wholesale markets." 

Commenters stated that "The Section 111(d) proposal presents significant jurisdictional 

challenges between the Federal Energy Regulatory Commission (FERC) and U.S. EPA, and in 

fact has been referred to as a 'jurisdictional train wreck." 

Commenters stated, "Under the Federal Power Act, FERC has jurisdiction to promulgate and 

enforce mandatory reliability standards for the bulk-power system, a power that FERC has 

delegated to the North American Reliability Council (NERC)" to "ensure reliable operation of 

the bulk-power system." 

Commenters noted that "States cannot force retirement of generation facilities if the facilities 

must run to ensure system reliability." According to commenters, "Even if states were to adopt 

laws completely prohibiting production by certain types of generation facilities, states could not 

guarantee that those facilities would retire or cease to dispatch" because Section 215 of the FPA 

grants FERC jurisdiction to "promulgate and enforce mandatory 'reliability standards' for the 

bulk-power system, a power that FERC has delegated to the North American Electric Reliability 

Corporation (NERC)." According to commenters, "If a generation facility proposes to retire, the 

relevant RTO must determine whether the retirement of that facility will result in the violation of 

a NERC reliability standard or otherwise jeopardize the reliable operation of the bulk-power 

system." Commenters continued by noted that "If the RTO determines that retirement of a 
227 

facility will jeopardize the reliable operation of the bulk-power system, the RTO may require 

that the facility continue to operate." Commenters further noted that "an RTO may require a 

facility to continue running if it determines that the facility's retirement will result in the overload 

of transmission facilities or unacceptable voltage levels." 

Commenters noted, "there is a direct conflict in the building block 4 energy efficiency measures 

and the objectives of FERC in Order 745 to encourage demand-side participation in organized 

markets." according to commenters, "Allowing energy efficiency to participate in regional cap 

and trade markets could tie the concepts together, but as currently formulated the CPP does not 

allow a regional approach to energy efficiency." 

On Order 1000, commenters stated that the rule does not directly address transmission but will 

"have other impacts on transmission planning and investment" including "changes in dispatch 

under building block 2" that will "change flows on the transmission system, and could even 

overload certain lines." Commenters noted that "Utilities and RTOs with responsibilities for 

transmission planning and operations will have to take these changes into account, but without 

knowledge of what the final rules will look like or how plants will be dispatched, it is extremely 

difficult to do the kind of transmission planning envisioned and encouraged by FERC Order 

1000." Commenters noted that "It seems like the two agencies, EPA and FERC, have different 

visions of how the future electric industry should operate." 

Commenters also commented on FERC's role in dispatch decisions: "FERC has regulatory 

authority over the rates, terms and conditions of wholesale power sales and interstate 

transmission" which includes "exclusive authority over RTOs (with the exception of the Electric 

Reliability Council of Texas ISO which [is] exempt from FERC regulation under a provision of 

the Federal Power Act)." According to commenters, "Regulation of RTOs occurs primarily under 

sections 205 and 206 of the Federal Power Act, which require that rates, terms and conditions of 

service be 'just and reasonable' and not unduly discriminatory" which traditionally has meant that 

"rates be set at the lowest possible level consistent with adequate returns for investors." 

Commenters continued: "The just and reasonableness standard of the Federal Power Act is really 

an economic standard, but under the CPP, RTOs may be required to make planning and 

operational decisions based on environmental requirements." According to commenters, "The 

changes in operating and other agreements that will be needed to allow the RTO to make these 

decisions will have to be approved by FERC under the just and reasonable standard." According 

to commenters, "There is little precedent, and not much analysis to suggest how FERC can and 

will apply this economic standard to environmental decisions." 

Commenters commented on the Energy Policy Act of 2005, which gave the FERC authority to 

set reliability standards governing the nation's interconnected electric systems. Commenters 

noted that the rule "does not expect that reliability of electric systems will be harmed by 

requiring states to meet the proposed emission requirements" but "is silent about what happens if 

an operating RTO or utility is faced with violating emissions requirements or violating reliability 

standards or criteria." According to commenters, "Operators are trained to ensure reliability first, 

but there may be situations where choices are necessary with economic consequences." 

According to commenters, "FERC has not yet said anything about its expectations for 

maintaining reliability under the CPP, nor has it initiated any studies." Commenters asked that 
228 

the two regulatory regimes be reconciled so that utility operators are not faced with the 

"reliability versus environmental penalty dilemma." 

Commenters stated, "EPA's proposed rule to regulate existing EGUs under Section 111(d) of the 

CAA impinges on the Federal Energy Regulatory Commission's ('FERC') regulatory primacy 

over wholesale energy markets and reliable operation of the bulk electric system." Commenters 

also noted, "EPA must respect the equal and exclusive jurisdiction of FERC and not seek to 

dictate electricity policy that could have harmful impacts on grid reliability." Commenters noted 

"Under section 215 of the FPA, FERC is the executive agency responsible for promoting the 

reliability of the nation's bulk power system." Commenters continued, "To that end, FERC has 

certified the North American Electric Reliability Corporation ("NERC") to develop mandatory 

and enforceable reliability standards, subject to FERC's approval." According to commenters, "It 

is thus FERC and NERC, rather than the EPA, which have the expertise on the reliability 

implications of altering the generation resource mix in the nation's energy markets." 

Commenters noted "The Federal Energy Regulatory Commission (FERC) has over the past few 

years adopted policies to promote expansion of transmission lines" including "Order 1000 

adopted on July 21, 2011." 

Commenters noted that "Section 215 of the Federal Power Act authorizes FERC to oversee the 

reliable operation of the Nation's interconnected electrical bulk power system" and stated that 

"FERC's jurisdiction over the nationwide interconnected electrical bulk power system means that 

FERC has a crucial role to play in ensuring that environmental regulation does not impair or 

impede grid reliability." However, according to commenters, "there has been a troublesome lack 

of coordination between FERC and EPA regarding this proposal." Commenters shared the 

opinion of Southwest Power Pool (SPP) and North American Electric Reliability Corporation 

(NERC) that "significant concerns [with] the Proposed Rule as drafted could pose a threat to the 

reliability of the electric power grid." Commenters noted that FERC has exclusive jurisdiction to 

regulate wholesale sales of electricity and the transmission of electricity in interstate commerce. 

According to commenters, "The Proposed Rule contemplates that States will direct utilities to 

substitute the use of higher emitting CO2 generators with lower- or zero-emitting generators, 

through some combination of shifting from coal-fired units to increased dependence on gas 

generation, renewables and/or demand response." Commenters noted that the rule "incorrectly 

assumes that States can regulate activities that are subject to FERC's jurisdiction or are otherwise 

beyond their authority." 

Commenters noted that the proposed rule's environmental dispatch is "likely inconsistent with a 

long list of provisions in FERC's Open Access Transmission Tariff (OATT) defining 

transmission customers' transmission rights, including the priorities different customers have for 

access to the transmission system." As an example, commenters noted that "the OATT provides 

'first-in-time' priority to transmission capacity for generation resources that qualify as 

'Designated Network Resources' under FERC's pro forma OATT." According to commenters, 

"priority to transmission capacity used for 'long-term firm transmission service' over the bulk 

transmission system is assigned transmission customers based on a standard that allocates 

transmission capacity to users (including utilities seeking to serve their own native load) based 

on a 'first-in-time principle' which applies "regardless of the fuel-source of any generation that 

may be competing for access to the transmission system." According to commenters, "a 
229 

transmission customer using transmission capacity for purposes of delivering power from a coalfired generation unit has priority access to transmission capacity over the incumbent utility that 

may want the same transmission capacity to serve native load with renewable generation as long 

as the transmission customer requested transmission service first." According to commenters, "A 

utility cannot reserve transmission capacity for future but currently 'undesignated' network 

resources to the detriment to a transmission customers' prior-queued request for transmission 

service." 

Commenters stated that "while FERC has made significant steps towards the integration of 

renewables, those efforts are in their preliminary stages, partially because of their potential to 

impact reliability." Commenters also noted that "States cannot lawfully implement an 

environmental dispatch that conflicts with FERC tariffs, whether they relate to organized 

markets or any other FERC-jurisdictional service." According to commenters, "it is FERC, and 

not the States, that must control how renewable resources may be used to implement the 

environmental dispatch that the Proposed Rule contemplates." 

Commenters stated that it is vital to the security of America's electric power supply that EPA reexamine the grid reliability impacts of the proposed rule, particularly in conjunction with other 

EPA rules that are also closing our most dependable sources of electricity. Commenters stated 

that EPA has not done enough to ensure that the power grid remains reliable during the very 

aggressive implementation period it has proposed. Commenters stated that in the face of an 

unprecedented number of power plant closures, the EPA has consistently shrugged off potential 

reliability problems. In the rule, EPA sums up its position by simply stating, "the proposed rule 

will not raise significant concerns over regional resource adequacy or raise the potential for 

interregional grid problems." 

Commenters stated that a number of stakeholders hold an opposite position. Commenters stated 

that the organizations, utilities, and regulatory bodies that have the most direct interest in grid 

reliability are warning EPA that the rule most certainly does raise significant concerns. 

Commenters stated that the Electric Reliability Council of Texas (ERCOT) issued a report 

criticizing the impacts of the proposed plan. Commenters stated that the Southwest Power Pool 

(SPP) similarly concluded in its own report on the rule that the impacts would be significant and 

problematic. Commenters stated that the North American Electric Reliability Corporation 

(NERC), the organization tasked with developing mandatory grid reliability standards after the 

2003 blackout, also issued a report in November that was very critical of the EPA rule and its 

effects on the grid. 

Commenters stated that NERC concludes that coal retirement is problematic. Commenters stated 

that the report notes: The number of estimated retirements identified in the EPA's proposed rule 

may be conservative if the assumptions prove to be unachievable. Commenters stated that 

developing suitable replacement generation resources to maintain adequate reserve margin levels 

may represent a significant reliability challenge, given the constrained time period for 

implementation. Commenters stated that new reliability challenges may arise with the integration 

of generation resources that have different ERS characteristics than the units that are projected to 

retire. Commenters stated that NERC is concerned that developing replacement generation 

sources during EPA's constrained implementation time period will be difficult, and it calls into 
230 

the question EPA's assumptions. Given that, commenters stated, the agency should be prepared 

for a scenario in which more capacity is lost than it previously anticipated. 

Commenters stated that FERC has issued warnings similar to those of IER's report. Commenters 

stated that the agency's analysis is particularly important because FERC officials are the 

government's experts on grid reliability. Commenters stated that FERC Commissioner Philip 

Moeller, warned: Prices will definitely rise. Commenters stated he testified as well before the 

Senate Committee on Energy and Natural Resources on April 10, 2014 and again affirmed the 

importance of grid reliability over anything else. Commenters stated that Moeller expressed 

skepticism about the proposed rule, saying that he feared that EPA had "greatly underestimated 

the amount of power production that would be retired due to these rules." EPA should thus 

seriously reconsider its estimates of how much power would go offline as a result of its rule. 

Commenters stated that regional grid operators across the country warn of the reliability risks 

associated with the sweeping retirements of coal-fired generation that would result from the 

combination of EPA power plant rules, including the proposed rulemaking. 

Commenters stated that the Midcontinent Independent System Operator (MISO) conducted an 

analysis which suggests that the proposal would put an additional 14,000 MW of coal-fired 

power at risk of retirement, on top of the 12,600 MW already slated to retire by 2016 because of 

the MATS rule. Commenters stated that the rule may increase the likelihood of a loss of load and 

an emergency situation. Commenters stated that EPA's analysis in the proposed rule is 

inadequate, and we urge the agency to seriously consider and address these issues. 

Commenters stated that NERC claims that: compliance with the carbon regulations will not be 

possible without significant investment in new generation and associated major improvements to 

both the electric transmission and natural gas infrastructure to accommodate new generation. 

Commenters stated the results indicate that by 2020, SPP's anticipated reserve margin would be 5 

percent, representing a capacity margin deficit of approximately 4,500 MW. By 2024, 10,000 

MW beyond current plans would be needed to maintain their reserve margin. Commenters stated 

given the 8- to 10-year timeline needed to plan for and construct these additional resources, SPP 

has concluded that there is not sufficient time to achieve compliance with the EPA's interim 

goals, and that widespread reliability impacts are likely. 

Commenters stated SPP's conclusion that as a result of the assumed EPA retirements with no 

resource additions, the SPP network was so severely stressed by large reactive deficiencies that 

the software used in the analysis was unable to produce meaningful results, which is generally 

indicative of voltage collapse and blackout conditions. 

Commenters stated that ERCOT's primary concern with the Clean Power Plan is that the timing 

and scale of the expected changes needed to reach the CO2 emission goals could have a harmful 

impact on reliability. Commenters stated that specifically, implementation of the Clean Power 

Plan in the ERCOT region, particularly to meet the Plan's interim goal, is likely to lead to 

reduced grid reliability for certain periods and an increase in localized grid challenges 

Commenters stated that EPA's Response to Grid Experts Does Not Address Their Concerns. 

Commenters stated that EPA has been summarily dismissive of concerns to grid reliability. 
231 

Commenters stated that administrator Gina McCarthy gave a speech arguing that "for decades, 

power plants have met pollution limits without risking reliability." Commenters added, 

McCarthy, however, ignores large differences between past regulations and the proposed 

rulemaking. Commenters stated that the proposed rule will likely cause an unprecedented 

number of power plants to close without reliable sources of replacement generation. Commenters 

stated that McCarthy also fails to address the reliability effects of integrating renewables into the 

electric grid, arguing, "If anything, what threatens reliability and causes blackouts is devastating 

extreme weather fueled by climate change." Commenters stated that her statement, however, 

stands in opposition to the Intergovernmental Panel on Climate Change (IPCC)'s latest report. 

Commenters stated that this Fifth Assessment Report notes that "there is limited evidence of 

changes in extremes associated with other climate variables since the mid-20th century." 

Commenters stated that the IPCC's opinion matters because it is frequently cited as the leading 

expert source on climate change assessments. Commenters stated that even if extreme weather 

events do occur, Americans will be unable to cope with them without reliable power to keep 

their homes and offices lit and warm. Commenters stated that EPA responded to NERC's 

concerns by arguing that "there have been no instances in which "the Clean Air Act standards 

have caused the lights to go out and the Clean Power Plan reflects the EPA's continued 

commitment to ensuring reliability as standards and programs move forward." Commenters 

stated that although EPA compares the proposed rulemaking to other rules promulgated under 

the Clean Air Act, it provides no basis for claiming that this rule will have the exact same effects 

as prior rules. Commenters stated that arguing that, because other rules did not cause blackouts 

or brownouts, the proposed rulemaking will also have no negative impacts on the grid, requires 

far more substantive evidence specific to the proposed rule. 

Commenters stated that there appears to be a high likelihood that implementation of the proposed 

EPSP could threaten grid reliability and stability.

Commenters referenced NERC who has stated that the proposed rule could harm the reliability 

of the power grid, and who cautioned that the proposed rule contemplates a wholesale shift from 

coal combustion towards more efficient and cleaner-burning combined cycle natural gas plants, 

an increase in renewables and big efficiency improvements to cut electricity demand through the 

2020s. The commenters also stated the NERC has expressed concerns that such a rapid transition 

will damage capacity margins, make it harder to maintain aspects of power quality and leave the 

grid vulnerable to extreme weather; and any one of these outcome would be detrimental to 

manufacturers. 

Commenters stated that the Proposed Rule underestimates the critical importance of ensuring the 

reliability of the electric system. Commenters stated that building blocks 2 and 3 involve the 

displacement of coal-fired EGUs, which are the most reliable form of generation. Commenters 

stated that the risk associated with coal plant retirements was made evident during the severe 

cold weather events of the winter of 2013-2014. Commenters stated that during this period of 

increased energy demand, wind produced only 4.7 percent of the nation's power while solar 

produced less than 0.2 percent Nuclear provided only 5 percent of incremental year-over-year 

generation, and hydroelectric output declined 13 percent. Commenters stated that power 

generation from natural gas decreased when the resource was diverted for residential heating 

needs and gas prices soared to over three times that of coal (Btu basis). Commenters stated that 
232 

only the availability and operation of coal units scheduled for retirement over the next two years 

enabled the power sector to meet demand during periods of harsh weather events. 

Commenters stated that before making any changes to the generation portfolio pursuant to 

building blocks 2 and 3, states, utilities, FERC, and reliability councils will need to assess 

resource adequacy, regional power flow, regional stability and voltage security, natural gas 

supply and pipeline constraints, operating reserves, system restoration and blackstart protocols, 

and limited controllability of renewable generation. Increased reliance on natural gas over coal 

also will require expansion of natural gas pipeline transportation and storage capabilities. 

Commenters stated that potential reliability issues are most acute in areas where power 

generators rely on interruptible natural gas pipeline transportation. 

Commenters stated that in November 2014, NERC published a white paper titled "Potential 

Reliability Impacts of EPA's Proposed Clean Power Plan," in which NERC provided valuable 

insight into planned generation retirements, load growth, renewable resource development, and 

energy efficiency measures that impact CO2 emissions and the EPA's target-driven assumptions. 

Commenters stated that they support NERC's conclusions and recommendations and reiterates 

herein that analysis must be performed to demonstrate electric system reliability before states 

commit to plans that include changes to their current generation portfolios. 

Commenters wrote of concerns of accelerated retirement of units by resource owners in ERCOT 

within a short period of time rather retrofitting to comply with environmental regulations. The 

commenters stated if ERCOT did not receive early notification it could affect reliability of the 

ERCOT grid since coal resources provide essential reliability services, including reactive power 

and voltage support, inertial support, frequency response, and ramping capability. 

Commenters stated that the Rule should require EPA to complete a reliability study on a state by 

state basis to assess impact of rule requirements. Commenters stated that in so doing, EPA 

should invite and consider technical input from FERC, the North American Electric Reliability 

Corporation, RTOs and other balancing authorities, on potential electric reliability impacts of the 

section 111(d) program, as well as economic analyses from states on rate and other cost impacts 

of the program. 

Commenters stated that as drafted, the proposal requires wholesale shifts in the way electricity is 

generated in this country and does so without regard to the need for expanded electric and natural 

gas transmission infrastructure. Commenters stated that the failure of EPA to conduct 

meaningful and substantive consultation with NERC and FERC to ensure that the Clean Power 

Plan can be implemented without grave threats to reliability requires that the proposal be 

withdrawn until such time as those rigorous studies are completed and can fully inform the 

rulemaking process. 

Commenters stated that as is demonstrated by the recent publication by NERC of its analysis of 

the Clean Power Plan, the proposal represents an unprecedented and unproven attempt to make 

wholesale changes to the operation of the electric infrastructure, which threatens the continued 

operation of the electric grid on a local, regional and national level. Commenters stated that in 

its report "Potential Reliability Impacts of EPA's Proposed Clean Power Plan: Initial Reliability 

Review," November 2014 (hereafter "NERC Report"), NERC provides a non-partisan, objective 
233 

evaluation of the potential implication of the proposed environmental regulations in an effort to 

"inform regulators, state officials, public utility commissioners, utilities, and other impacted 

stakeholders." Commenters stated that this NERC Report establishes that the EPA proposal has 

not undergone a rigorous reliability evaluation, and that in initiating such an assessment, there 

are serious and complex reliability issues that have not been addressed in the Clean Power Plan, 

and that it should not go into effect until those concerns have been adequately addressed and 

resolved 

Commenters stated that the NERC report says that the Clean Power Plan will force the premature 

closure of base load plants around the country that have not been included in existing NERC case 

study work to evaluate the impact of such closures, jeopardizing reliable power supply for 

millions of Americans. Commenters stated that even if we assume that energy efficiency will 

reduce demand by 1.5% nationwide (an assumption with which commenters do not agree), that 

will be inadequate to fill the major void caused when hundreds of gigawatts of coal-fired power 

plants close. Commenters stated that the NERC report says that "As reliance increases more on 

natural gas for both baseload and on-peak capacity, it is important to also examine potential risks 

associated with reduced diversity and increased dependence on a single fuel type. Commenters 

stated that the NERC report says that with this shift toward more natural gas consumption in the 

power sector, the power industry will become increasingly vulnerable to natural gas supply and 

transportation risks." 

Commenters stated that the NERC report says that the necessary transmission to support natural 

gas cannot be permitted, sited and constructed in time to avoid a major shortfall in resources 

around the country, a concern that NERC details throughout its report. Commenters stated that 

the NERC report says that instead, the Clean Power Plan's "analysis" "assumes that adequate 

transmission capacity is available to deliver any resources located in, or transferred to, the 

region." 

Commenters stated that independent experts and key stakeholders are increasingly alarmed that 

the Proposed Rule will dramatically increase electrical grid stress and reliability challenges. 

Commenters stated that the North American Electricity Reliability Corporation ("NERC") 

reviewed the Proposed Rule and concluded that the agency's proposed regulatory deadlines 

"would increase the use of controlled load shedding and potential for wide-scale, uncontrolled 

outages." Commenters stated that the Southwest Power Pool ("SPP"), which is the Federal 

Energy Regulatory Commission ("FERC") approved Regional Transmission Organization 

("RTO") for AECC (NSA and NYS's wholesale electricity provider), has determined through 

modeling that without significant changes, the Proposed Rule, will result in "numerous thermal 

overloads and low voltage occurrences" in the SPP Region, and that the Proposed Rule will have 

"serious, detrimental impacts on the reliable operation of the bulk electric system in the SPP 

region, introducing the very real possibility of rolling blackouts or cascading outages that will 

have significant impacts on human health, public safety and economic activity within the 

region." Commenters stated that during winter 2013-1014, extreme cold temperatures put a 

tremendous strain on the electrical grid and resulted in a price spike on the electricity spot market 

covering the mid-Atlantic and parts of the Midwest. Commenters stated that specifically, the cost 

of producing electricity in those areas climbed above $1,000 per Mwh for the first time as cold 

temperatures hit the East Coast. Commenters stated that according to the Energy Information 
234 

Administration, the average wholesale price in that region last year was $42/Mwh. Commenters 

stated that this price spike was due to strong demand for natural gas for heating and electricity 

production. 

Commenters stated that they are amazed that U.S. EPA would not formally analyze information 

obtained during EPA, FERC, DOE meetings regarding reliability, as it appears U.S. EPA has 

also not done under this proposal. Commenters stated that FERC reported "concerns and 

uncertainty related to potential reliability and price impacts associated with environmental 

regulations." Commenters stated that PJM coordinates the movement of electricity through all or 

parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, 

Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. 

Commenters stated that this geographically concentrated retirement is occurring all within the 

PJM region yet U.S. EPA made no attempt to specifically analyze reliability concerns within the 

specific regions under this proposal 

Commenters stated that IRC prepared a proposal that would provide a means to assess and 

mitigate reliability impacts resulting from compliance action. Commenters cited the NERC 

report that assesses reliability in response to the rule. 

Commenters stated that to promote open and competitive markets, FERC encouraged the 

formation of System Operators. Commenters said in areas of the country where the grid is 

controlled by a System Operator, the System Operator facilitates "the interstate sales of 

electricity products, including energy and capacity, by managing marketplaces where those 

products may be exchanged." Commenters said the System Operator also "manages the flow of 

electric energy through the regional power grid, 'dispatching' energy in real time to where it is 

needed." Commenters said in regions controlled by System Operators, these energy and capacity 

auctions determine the rates for the transmission and sale of energy in interstate commerce. 

Commenters said accordingly, these wholesale electricity and capacity markets are subject to the 

exclusive oversight and regulation of FERC. 

Commenters stated, EPA claims that the Proposed Guidelines were "substantially informed by 

the extensive input from states and a wide range of stakeholders . . . since the summer of 2013." 

79 Fed. Reg. at 34,835; see also Id. at 34,845-51. Commenters said, it is clear, however, from 

statements made by FERC commissioners, including their sworn testimony before the House of 

Representatives' Committee on Energy and Commerce, Subcommittee on Energy and Power on 

July 29, 2014, that consultations with FERC have been extremely limited. Commenters said, it 

appears that only the office of FERC's Chairman had any contact with EPA and that those 

contacts were both limited and "private and paperless." Moeller Testimony at 7. Commenters 

said, no other Commissioners appear to have been involved in, or made aware of the details of, 

the limited FERC staff communications with EPA. 

Commenters stated, the Commissioners' testimony and responses to written questions also make 

it clear that FERC: (i) was not involved in preparing the Technical Support Document ("TSD") 

entitled "Resource Adequacy and Reliability Analysis," EPA-HQ-OAR-2013-0602-0368, that 

accompanied the Proposed Guidelines; (ii) has not conducted an independent study of the 

Proposed Guidelines' reliability impacts; and (iii) did not verify the feasibility of EPA's 

optimistic assumptions concerning the major new electric transmission and gas pipeline 
235 

infrastructure development that must take place for the emission reductions contemplated by the 

Proposed Guidelines to be achieved (which are discussed separately). Commenters said, to date, 

EPA has also not accepted requests that FERC be given a formal role, along with NERC and 

other entities with reliability expertise, in discussing the reliability implications of the Proposed 

Guidelines. Moeller Testimony at 6 ("Going forward and at a minimum, I will reiterate my 

request for a formal role for the Commission with the EPA as it relates especially to the 

reliability implications of the proposal. Convening the appropriate reliability experts (including 

the Commission, and possibly the North American Electric Reliability Corporation, electric 

wholesale market operators, power generators, electricity consumers, along with input from the 

states) to examine the reliability implications is necessary to avoid additional unintended 

consequences."). 

Commenters stated, Commissioner Clark recently reiterated that EPA has not seriously engaged 

FERC on reliability issues. Commenters said, most recently, the Chairmen of the House Energy 

and Commerce Committee and the Subcommittee on Energy & Power and the Ranking Member 

of the Senate Energy & Natural Resources Committee wrote a letter to FERC Chairman Cheryl 

A. LaFleur that noted the evident lack of substantive outreach by EPA. Commenters said, the 

letter asked FERC to take action to "begin to mitigate EPA's failure to engage FERC and other 

relevant agencies . . . ." 

Commenters stated, EPA's refusal to consider FERC's expertise regarding wholesale power 

markets, transmission operations, the real world impact of transmission constraints, and the BPS 

is inexplicable, arbitrary, and capricious. Commenters said, Article III courts frequently 

recognize and defer to FERC's expertise in these matters. Commenters said, EPA's failure to 

show similar deference has resulted in a proposed rule that fundamentally misunderstands the 

technical realities of the modern utility sector and is therefore not the product of reasoned 

decision-making. 

Response 25: EPA disagrees with these comments where they suggest a conflict between FERC 

and this final rule. The final rule will not conflict with FERC jurisdiction or regulations. 

Commenters raise concerns about the final rule and FERC jurisdiction over grid reliability and 

wholesale market dispatch. There concerns are simply not valid; EPA regulations have 

successfully coexisted with FERC regulations to ensure that grid operations are both secure and 

environmentally sound, and will continue to do so under this rule. Contrary to these comments, 

the final rule is entirely consistent with continuing operation of security constrained economic 

dispatch in FERC jurisdictional markets, and does not prescribe anything resembling economic 

dispatch. On the contrary, the final rule assumes planning for transmission will occur along the 

lines of FERC transmission planning regulations, such as Order 1000, which provides planning 

mechanisms to incorporate public policy initiative like this final rule. 

EPA also relies on FERC designated or regulated entities, such as NERC and the Reliability 

Authorities, to provide information and assistance in ensuring that state planning considers 

reliability. EPA works closely with RTOs in implementing current EPA regulations such as 

MATS and expects to have a continuing coordination during the implementation of this rule. 

EPA has carefully considered reliability in the development of this rule, and does not believe 

there are conflicts between the rule and reliability. 
236 

Comment 26: Multiple commenters noted the importance that reliability plays in rural America, 

especially with respect to farming, ranching, and agriculture. Commenters noted that the rule 

will violate the Rural Electrification Act (REA) Mandate to Provide Affordable and Reliable 

Power to Rural America. 

Commenters noted, "Texans who live in the rural areas of my county can face greater electricreliability challenges than some more urban areas of the state." Commenters noted that "Rural 

electric cooperatives in parts of Texas have often struggled over the years to have adequate and 

economical sources of generation and transmission to provide to their members." 

Commenters further stated that the rule will "result in the significant reduction in either the 

operation of or retirement of nearly all coal-fired EGUs, many of which are owned and operated 

by rural electric cooperatives." 

Commenters stated that the rule "violates the [Rural Electrification Act] and over sixteen 

additional statutes establishing the federal mandate that rural electric cooperatives reliably serve 

rural America." 

Commenters noted, "Tennessee farmers need an efficient, reliable, and affordable energy supply. 

Energy is a major expense for producers of crops, livestock, poultry, and dairy commodities." 

Commenters noted that "Agricultural industries that supply, process, and produce agricultural 

products and input items also are major users of energy" and this proposal "affect[s] the bottom 

line of farmers" and "places Tennessee farmers at a competitive disadvantage to producers in 

other nations." 

Commenters stated, "Farmers and ranchers depend on reliable as well as affordable sources of 

energy to operate their businesses and depend upon stable input costs to bring agricultural 

products to American and worldwide consumers. " 

Response 26: The EPA is well aware of the concerns about the CPP in rural America. 

Fortunately the rule is not expected to have a large impact on electricity prices. Further the 

USDA has programs that can help rural electric cooperatives and others in rural America invest 

in renewable generation and in energy efficiency which can both help states achieve the goals of 

the CPP. We note that Texas, with its well-developed energy efficiency program and substantial 

renewable generation is well situated to respond to the CPP. 

Comment 27: Commenters noted that the role of regional transmission organizations (RTOs) 

should not be given the authority to create new markets as compliance vehicles. 

Commenters noted that "the creation of new, mandatory markets or trading platforms run by the 

RTOs will significantly complicate the already overly complex competitive energy market and 

could very well add unnecessary costs." Commenters voiced concerns with "the lack of 

consumer focus and transparency in the mandatory energy and capacity markets that some RTOs 
237 

run today, as well as how the RTOs themselves are operated and governed" and asked that those 

approaches not be broadened. Commenters also noted that it is "important to balance the 

reliability and environmental compliance with the ultimate costs on load (consumers and 

wholesale customers)." 

Response 27: The EPA recognizes that the RTOs and ISOs can play a valuable role in CPP 

compliance. The final rule suggests that the states consult with them as to the reliability impacts 

of state plans as they are developing those plans. States can chose to incorporate a larger role for 

the RTO’s in their state plans if they see that as appropriate; however, regional transmission 

organizations in wholesale electricity markets are regulated by FERC, and any new markets run 

by RTOs cannot be created except through FERC orders under its rules for such organizations. 

The final rule, itself, does not give them authority to run trading platforms. 

Comment 28: Commenters commented on the plan's reliance on nuclear power plants. 

Commenters stated that there were no issues "supplying places in the Northeast with nuclear 

energy" during the Polar Vortex. 

Commenters noted that "EPA's conception that nuclear power is reliable is not applicable in the 

real world, because it is a logical fallacy to assume that only 6% of a reactor's capacity would be 

available." 

Commenters noted that nuclear plants are more expensive to operate than coal or renewable 

energy resources. 

Commenters noted that EPA is unlawfully encroaching upon the regulatory domain of the NRC 

and "EPA should avoid trespassing on NRC's unique regulatory domain by presuming a positive 

outcome for NRC license renewal reviews." According to commenters, "Even assuming for 

purposes of argument that such encroachment is lawful, it would be extremely poor public policy 

for the EPA to build extended operation of aging and increasingly dangerous reactors into its 

regulatory scheme as a fait accompli." 

Response 28: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the proposed provisions for nuclear units in the setting of state 

goals. Please see VIII.G.2 of the preamble for further discussion of the flexibility states have in 

developing state plans appropriate to ensure compliance, the requirement that states consider 

system reliability in plan submittal, and a discussion of a Reliability Safety Valve. 

Comment 29: Multiple commenters noted that the forced retirement of coal-fired generation will 

have a negative impact on reliability in the energy sector and would result in a large amount of 

stranded costs. 
238 

Commenters noted that the impact of unit retirements is high. The commenters noted that the 

number of retirements could be underestimated by EPA because of other environmental 

regulations (e.g., 316(b) rule, CSAPR, MATS, FIP for Texas, the Regional Haze program, etc.). 

Commenters stated that "Interior Alaska uses coal fired power plants because it is the only 

available energy source capable [of] generating cost effective, on-demand power." According to 

commenters, "Massive natural gas reserves are available hundreds of miles north at Prudhoe 

Bay, but until a multibillion dollar gas pipeline is built that fuel is not an option." 

Commenters stated, "Fossil fuels, such as coal, and environmental protection are not mutually 

exclusive--Georgia's energy portfolio is evidence of this fact". 

According to commenters, coal-fired generation is critical to the reliability of this nation's energy 

sector. According to the commenters, if a "significant portion of this nation's coal-fired 

generation is forced into retirement, which is a realistic consequence of the Existing Source 

Proposal, then there may be catastrophic failures of the grid in response to extreme weather 

events such as the polar vortex that occurred this past winter." See NERC, Potential Reliability 

Impacts of EPA's Proposed Clean Power Plan (Nov. 2014) at 10. 

Commenters noted that "Coal-fired generation has proven for decades that it is a reliable, 

predictable source of energy" because "our nation has plentiful supplies of coal, which keeps 

costs low and predictable" and "because the fuel is solid and tangible, it is easily transported and 

stored." 

Commenters noted that coal is crucial due to its: 

• availability 

• affordability 

• reliability 

• delivery advantages over other sources 

Commenters noted that "Coal-fired capacity provides reliable base power to help stabilize the 

electrical grid and a shift away from coal toward less predictable renewable energy sources as 

planned by this proposed rule will be problematic."

Commenters noted that "dispatchable resources like coal and natural gas provide a number of 

essential reliability services, including reactive power support, voltage support, frequency and 

ramping responses, and inertial support" that "variable renewable resources cannot presently 

provide in a reliable and economical manner." 

Commenters listed multiple reasons that coal should not be eliminated from electricity 

generation: 
239 

• Clean. According to commenters, "Since 1970, coal generation in this country has 

tripled, but regulated emissions have decreased more than 90 percent" and work 

continues on "creating more efficient, cleaner burning coal-fired technology." 

• Reliable. According to commenters, "Coal has provided more than 75 percent of 

Missouri's electric power for decades because it is a highly stable, reliable baseload fuel." Commenters noted that during the Polar Vortex, "coal fired-plants 

were the only sources of energy with the capacity to meet the high demand." 

• Affordable. Commenters noted that "Since 2000, the cost to produce electric 

power from coal has been one third of the cost to produce natural gas" showing 

that "the relative affordability of coal is the primary reason Missourians are 

accustomed to comparatively low energy rates." 

• Abundant. According to commenters, "The U.S. has 27 percent of the world's coal 

securely located within its borders" and it is an "abundant local source of energy 

for the vast majority of states in the middle of the country." 

• Predictable. According to commenters, "Coal has the most stable pricing and 

output of any fuel" while natural gas, "has had the greatest price volatility of any 

fuel" and renewable energy sources, "such as wind and solar, are not reliable 

enough to be base-load fuels." 

• Sustainable. According to commenters, "Contemporaneous land restoration 

ensures that active areas for mining operations remain small and are left in 

conditions that benefit local mining communities." Commenters also noted that 

"carbon capture and other clean coal technologies continue to be developed and 

U.S. should lead the world in their continued development." 

• Long-term resource. Commenters noted that "The U.S. has hundreds of years of 

coal in its mines and has the ability to advance clean coal technologies toward 

near-zero emissions." 

Commenters stated that the rule will "limit stability and reliability by remov[ing] a viable fuel 

source from our nation's supply" and will "shut down virtually all existing coal fired fuel plants 

within 15 years." Commenters noted that "It is irresponsible for the federal government to 

impose unrealistic and unachievable goals on our state, and the pressure on supply will 

negative[ly] impact our consumers and our economy."

Commenters noted the importance of coal to the US and the world: 

• "Coal is essential to the achievement of the United Nations' Millennium 

Development Goals, which range from halving extreme poverty rates to achieving 

universal primary education." 

• "strong relationship between coal and fossil fuel use and global prosperity" 
240 

• "coal is a plentiful, affordable resource and will therefore be essential to 

continued economic progress" 

• "In the end, the World Bank and "its biggest shareholder," the United States, 

recognized that raising the developing world out of poverty depends on intelligent 

development and utilization of coal. That is an important lesson for the United 

States domestically as well." 

Commenters noted that "No fossil-fueled generation facility in Virginia currently meets the 

carbon emission rate proposed for Virginia" because "that rate is lower than the emission rate of 

a new combined cycle natural gas facility." According to commenters, "a compliance strategy of 

replacing all coal-fired generation facilities in Virginia with comparable amounts of state-of-theart natural gas combined cycle facilities would not satisfy the proposed rule. 

Commenters referenced an analysis from ERCOT that stated, "as electricity generation owners 

consider potential CPP compliance together with other pending environmental regulations such 

as MATS, regional haze, and the 316(b) Cooling Water Intake Structures rule, they may decide 

to retire units early rather than make investments to retrofit them to meet the requirements of 

these other rules." According to commenters, "ERCOT indicates that if such earlier coal 

retirements occur, grid reliability challenges could be experienced even sooner." 

Commenters also stated that "There is simply no economic, reliable, scalable, and timely way to 

replace the one-third to three-fourths of the coal plant shutdowns anticipated due to this proposed 

rule and other previous EPA environmental regulations while also continuing to have electricity 

supplied at the flip-of-a-switch." Commenters stated, "This is especially apparent and especially 

critical given EPA's timeline for the existing source rule as proposed, with interim goals from 

2020-2029." According to commenters, "those interim goals would require carbon reductions 

before 2020." 

Commenters stated that shuttering coal facilities will result in stranded investments, which 

"further undermines and erodes the State's economic health." 

Commenters stated that utilities would essentially be penalized for increasing electricity 

production from existing sources and forced to provide energy from lower emitting sources in 

order to comply with the proposed state based goals despite the fact the electrification programs 

would result in lower carbon emissions. 

Commenters stated that the weather event in January and the reduction of generation capabilities 

within the PJM footprint demonstrated the vulnerability of the system and is a preview of the 

challenges the system faces if generation capacity is prematurely taken off-line by these 

proposed rules. The commenters stated that the unreliability of the electricity supply is a 

disincentive for businesses and manufacturers to invest in Ohio and the Cleveland region and 

that additional burdensome regulation will accelerate this problem. 

Response 29: EPA disagrees with these comments. The final rule does not force coal plants to 

close, and coal remains a major source of power throughout compliance with this rule, as 

documented in Chapter 3 of the RIA for this rule. Nor will the compliance lead to reliability 
241 

issues. See previous responses in this section and Section VIII.G of the preamble for the 

treatment of reliability issues in the rule. 

EPA also disagrees with comments that maintain the rule will result in stranded costs at coal 

plants. See Section 5.11 of this RTC for stranded costs issues. 

Comment 30: Multiple commenters noted that there are differences between baseload 

generation and intermediate resources and replacing coal with NGCC as baseload generation will 

likely have negative impacts on grid reliability. 

According to commenters, base-load resources "are designed to run continuously, irrespective of 

the short-term price signals" and "environmental re-dispatch of these units (without regard to its 

questionable technically feasibility, since these units have long startup and shutdown times) will 

further deteriorate the underlying economics of base-load generation in the ISOs by limiting the 

output that is sold." 

Commenters also noted that coal units dispatched with minimum load will increase the emissions 

per MWh (of CO2 and criteria pollutant emissions) due to inefficient operations. 

Commenters stated that "Conventional power plants should not be penalized for the inability of 

non-dispatchable power to meet peak demand" and "a different approach is needed to consider 

the cost of achieving environmental benefits, including subsidies that are not being considered." 

Commenters stated "EPA has not performed a proper assessment of whether the proposed Clean 

Power Plan will result in an appropriate mix of baseload and intermediate resources needed to 

serve load reliably and cost-effectively." 

Commenters noted that coal units "are generally run as base load units, operating at or near full 

output around the clock" and are "ill-suited to following variations in load over the course of the 

day" due to "long ramp times." According to commenters, "NGCC units can also run as baseload 

[but] they are better suited to provide flexible service, including operation as intermediate 

resources, which can ramp up or down quickly in response to changes in demand and changes in 

other resources, such as wind and solar generation." 

Commenters stated that "Baseload capacity is a key component of a reliable generating system 

and provides value particularly during the peak hours of a utility's peak season" and "If Unit 3 is 

shut down, Tri-State will not have sufficient capacity to serve firm load, and will be required to 

construct new generation to replace that capacity, further increasing costs to its member 

systems." 

According to commenters, "Nuclear units, coal units and other forms of baseload capacity 

provide these necessary services that are crucial for grid reliability, without which any power 

system cannot operate safely and reliably." 

Response 30: Economic dispatch which helps to assure affordable electricity in the US and the 

economics of the power sector are dictating the types of generating capacity that is used in the 
242 

electric power sector. The availability of abundant low cost natural gas is replacing coal for base 

load capacity even in the absence of the Clean Power Plan. In addition, the growth of renewable 

generation, itself dictated by falling prices, is also making natural gas an attractive source of 

power as it is flexible and can be used along with variable renewables in a way that neither coal, 

nor nuclear can. Nuclear energy with its very low fuel costs is in a different position than coal as 

it will run as long as it is available. However, even with the CPP fully implemented, coal does 

not go away. Even in 2030 and substantial part of the electricity generated in the US will come 

from coal. 

Comment 31: Multiple commenters noted that unit retirements ahead of the unit's end of useful 

life is detrimental to reliability. 

Commenters noted that "Another consequence of the forced closure of the existing fleet of 

generating units that cannot achieve the more stringent emissions targets will be accelerated 

depreciation and other stranded costs that result from retiring generation resources well ahead of 

their economic or useful lives." 

Commenters recommended "Retiring coal units as they reach their normal end-of-life" rather 

than according to the rule schedule. 

Commenters stated that the guidelines should "Avoid premature retirements and stranded 

assets." 

Commenters asked that EPA consider the loss of useful life from coal-fired units, such as those 

that have seen significant investment based on prior EPA rulemakings. Commenters stated that 

"The utilities making these investments - and the rate-payers who are ultimately paying for them 

- had a reasonable, investment-backed expectation that these upgraded, coal-fired units, would be 

able to operate through the end of their useful lives." 

Commenters noted that "EPA should allow the full value of existing coal plants to be realized 

before retirement." 

Response 31: EPA disagrees with these comments. See response to comment 29 in section 8.9 

of this RTC. 

Comment 32: Multiple commenters noted that entities should receive full credit for any 

retirement of existing fossil-fueled units prior to the beginning of the interim period and 

regardless of the reasoning for the retirement. 

Commenters asked that EPA allow for the following 

• "expressly allow states to rely on unit retirements occurring after the baseline 

year(s) to meet Section 111(d) goals." 
243 

• "retirements should be given equal credit under a rate-based or a mass-based 

program. As proposed, the rule would not allow states that have adopted a ratebased goal to fully benefit from unit retirements if the replacement generation 

comes from out-of-state. This is because, in coal-heavy states, the pre-retirement 

and post-retirement emission rate for the state will remain largely unchanged, 

even if the generation is not increased in-state." 

• "In states that adopt a mass-based standard, EPA should allow all EGUs that a 

company or state has agreed to retire to be included in the state's 'reference case.' 

The generation from the reference case would then be used to determine the massbased goal. If generation from the retiring unit is not built into the reference case, 

then the lower generation and emission rate would result in a lower mass-based 

target." 

• "The purpose of the retirement should be irrelevant, since all existing EGU 

retirements result in substantial reductions in GHG emissions. Ensuring that states 

and companies receive credit for retirements will help ensure that utilities and 

states that are planning retirements of existing coal plants are not penalized by 

that action. It also will incentivize future retirements, resulting in additional GHG 

emission reductions." 

Commenters stated "EPA should make clear that CO2 emission reductions due to unit 

retirements after the 2012 base year may be applied toward goal achievement after 2020, and 

may be banked prior to 2020 beginning on the date of retirement, without requiring states or 

utilities to make any demonstration that the retirement would not have occurred in the absence of 

the CAA section 111(d) program." According to commenters, "This should include retirements 

that, in addition to CO2 reduction, achieve compliance with MATS or other regulations, as well 

as retirements that are carried out in fulfillment of state legislative program such as the Clean Air 

Clean Jobs Act in Colorado." Commenters continued, "EPA should specify in the final rule how 

such retirements will be credited, under both rate-based plans and in the event that a state elects 

to convert its rate target to a mass budget." 

Commenters noted that changes to its energy generation mix has already happened: "In 2006, the 

majority of electricity in Georgia was produced by coal (63 percent)" and "In 2001, just 3 percent 

of Georgia's electricity was generated by natural gas, whereas in 2012, natural gas share of the 

generation capacity has risen markedly to 35.6 percent." Commenters asked that they "gain full 

credit for these early and proactive investments." 

Commenters asked that EPA "recognize the quantifiable emission reductions achieved as a result 

of retirements that occur after the baseline period elected by the state and prior to the start of the

interim compliance period" by converting them into bankable credits that are allowed to count in 

future compliance period(s) once the compliance program begins. Commenters offered a 

potential way to incorporate this idea into the plan is to "assume the unit's generation was 

replaced by the existing natural gas combined cycle generation located within the state." 

According to commenters, "the credit would be based on the reduction in emissions caused by 

the change in the generation source" and "calculated by subtracting the state's existing NGCC 

emission rate (lbs.CO2 /MWh) from the emission rate of the retired unit and then dividing that 
244 

difference by the emission rate of the retired unit to obtain the percentage reduction in emissions 

resulting from the retirement." According to commenters, "multiply the percentage reduction by 

the average annual MWh generated by the retired unit during its last three years of operation and 

by the number of years prior to the start of the section 111(d) interim compliance period the 

retirement occurred" and the "resulting number of MWh would be available to be added to the 

denominator in calculating a state's emission rate during one or more compliance periods." 

Commenters also stated, "EPA's emissions guidelines should make it clear that states may 

provide full compliance credit for the avoided CO2 emissions that result from the retirement of 

existing fossil-fueled units prior to the beginning of the interim compliance period, without 

regard to the reason for the shutdown." 

Response 32: EPA realizes that reductions will be occurring before the start of the interim 

period and first notes that these retirements will reduce emissions from the existing fossil steam 

fleet. The purpose of these retirements does not matter for purposes of the rule, what matters is 

the reduction of emissions, and these reductions will facilitate compliance: in a mass-based state, 

emission emissions levels will be lower; in a rate-based state, retiring a high emitting unit will 

result in a lower emissions rate. The rule also provides for early credit where the generation from 

the retiring unit is replaced by renewable generation. See section VIII.B of the final preamble to 

the CPP. 

Comment 33: Commenters commented on the loss of lignite-fueled electricity generation. 

Commenters asked that "New efficient lignite-fueled baseload electric generation facilities 

should not be removed as an option available for meeting the substantial projected demand." 

Commenters also asked that "existing lignite-fueled facilities should not be curtailed or closed by 

any of EPA's GHG-related rulemaking initiatives." 

Commenters noted that the rule "threatens North Dakota's ability to continue to use lignite and 

other coals as a low cost electricity generation option and a means to enable responsible 

development of the Bakken oil reserves that are critical to North Dakota's continued economic 

development." 

Response 33: The final CPP does not require that any type of electricity generation be removed 

as an option for meeting demand, nor does it curtail or close specific facilities. Rather it sets 

goals for the states to meet by any of a wide range of policies and measures that they choose. 

State should make those choices based on the situation in their states. 

Comment 34: Commenters noted, "EPA has not sufficiently considered the effects that 

redispatch at the level Building Block 2 requires would likely have on the grid" including 

reliability and the feasibility of implementing the required level of redispatch. 

According to commenters, "Generation dispatch must account for the variety of factors that can 

affect available generation" including the following: 
245 

• higher- or lower-than-expected demand, 

• planned or unplanned generator outages, 

• planned or unplanned transmission outages, 

• weather, 

• fuel availability, and 

• events on a neighboring system. 

Response 34: The final rule does not require any level of "redispatch" or shift in generation from 

one kind to source to another. States have wide latitude to choose the policies and measure that 

they will include in their state plans to achieve the reductions they need to achieve their state 

goals. 

Comment 35: Commenters noted that the rule requires the replacement of economic dispatch 

with environmental dispatch. 

Commenters stated that the rule will "require RTOs to replace economic dispatch with 

environmental dispatch, while trying to maintain reliability for different states, all of which have 

different emissions reduction targets." According to commenters, "The underlying premise of an 

RTO is to help their members’ access the lowest cost generation on a continual basis, regardless 

of the location of the generation or the location of the member, while maintaining grid 

reliability." According to commenters, "under the proposed Rule every state has a different CO2 

emission reduction target, and presumably each state implementation plan will propose to 

achieve its respective target differently" and "RTOs will be forced to implement environmental 

dispatch of generating units, i.e. RTOs will first consider environmental effects of operating 

generating units before the economic benefits of operating those same units." Commenters 

stated, "This is contrary to the purpose for which RTOs were formed and also violates those 

regional entities' obligations under the Federal Power Act to dispatch generation economically." 

Citing Europe's experience with increasing the use of renewables, commenters stated, "By 

putting environmental dispatch as the first priority, Europe created an artificial market that 

encouraged the significant over-investment in renewables and exaggerated the impact of 

renewables on grid integrity." 

Commenters stated, "The existing natural gas system infrastructure struggles at times to 

effectively handle current demand for natural gas during peak usage, let alone the increased 

pressures that would result from demands for increased natural gas dispatch as envisioned by the 

proposal." According to commenters, "the multiple factors currently at work in the energy 

market that drive the dispatch of the existing generation fleet can effectively be transitioned to 

prioritize environmental dispatch within the proposed timeline." 
246 

Commenters stated "While there are several problems with the EPA's assumptions relating to 

environmental dispatch, the fundamental flaw lies in the assumption that states or utilities plan 

for anticipated loads and resources using data averaged over the course of a year." According to 

commenters, utilities "are required to provide firm resources to meet the peak hour anticipated 

load while maintaining adequate reserve margin." 

Commenters stated that the Proposed Rule marks a shift from economic to environmental 

dispatch and such a change in dispatch philosophy could potentially upset the significant gains in 

power market efficiencies. The commenters stated further that power markets have struggled 

with the balance of maintaining resource adequacy and efficient dispatch and that adding another 

layer of complexity, through implementation of the Proposed Rule, would likely upset that 

balance. 

Commenters stated that because MISO employs security constrained economic dispatch for 

electric generation, environmental considerations do not factor directly into dispatch decisions. 

Instead, the commenters stated existing environmental regulations have an indirect impact on 

dispatch decisions by altering the variable cost of electricity produced at EGUs. The commenters 

stated that EPA proposes two ways for states to implement Building Block 2: 1) states can 

superimpose a de-facto price on carbon through a variety of market-based mechanisms, which 

would increase the variable cost of dispatching higher emitting EGUs, and 2) states can "impose 

limits on utilization or CO2 emissions at higher emitting EGUs." The commenters said neither 

recognizes that RTOs like MISO are designed to accommodate a security-constrained economic 

dispatch, not an environmentally-based dispatch. 

Response 35: These commenters mistakenly think that EPA in the CPP is requiring 

environmental dispatch. In fact, nothing in the rule requires dispatch entities to depart from 

current economic dispatch principles. This final rules makes that point even clearer by 

emphasizing the role of market based approaches and the use of tradable emission rate credits 

and mass allowances that enable the incorporation of costs as part of the standard economic 

dispatch. 

 

Comment 36: Commenters noted that distributed energy resources (DERs) are increasing and 

have negative impacts on reliability. 

Commenters, referring to NERC's reliability report (dated November 5, 2014), noted, "NERC 

warns that increases in distributed energy resources (DERs), such as rooftop photovoltaic arrays, 

under the proposed rule will pose significant challenges to system operators. Id. at 25-26. This 

resource cannot be dispatched and is generally invisible to the operator, but will rely on the 

system for backup services, placing a greater and unpredictable demand for ERSs." 

Commenters noted that the increasing penetration of DERs impacts reliability due to the "limited 

visibility and controllability of these resources." 

Response 36: These comments are not directly relevant to the final rule, because DERs are not 

included as part of BSER, and not relied on in setting state goals. EPA also believes DERs can 
247 

be reliably managed and contribute to energy efficiency and be effectively managed to contribute 

to reliability by reducing peak demand as well as overall load. 

Comment 37: Commenters noted that there are other factors that influence reliability. 

Commenters noted that "By capturing CO2 from existing coal or gas-fired plants, [the 

commenter] will help maintain total system reliability, and our ability to pay for the CO2 will 

ensure that there is minimal impact on electricity prices." 

Commenters noted that "The unprecedented closure of coal base load capacity is not the only 

development affecting the future reliability and affordability of the electric grid." Commenters 

elaborated that "approximately 25 percent of the coal, natural gas and nuclear base load capacity 

is 40 years or older" and "within ten years, the 40-plus years demographic will increase to about 

50 percent of the entire base load fleet." 

Commenters noted that "much of Arizona's fleet of combined cycle natural gas plants is owned 

by merchant operators" which is currently committed to Arizona facilities but "there is no 

guarantee that these contracts will be extended into the future." According to commenters "The 

capacity currently available to Arizona utilities could be sold to utilities in other states" and "may

not be available to Arizona utilities in sufficient quantity to meet EPA's 2020 interim goal." 

Commenters expressed concern that there is the potential for many irreconcilable differences in 

emission compliance plans between the 13 PJM states in RTOs due to the diverse characteristics 

of the states (economic makeup, generation rich vs. generation constrained, states with 

renewable portfolio standards vs. states without these standards, vertically integrated vs. 

deregulated state). The commenters stated there is the potential for many irreconcilable 

differences in emission compliance plans between the states; PJM will ultimately be required to 

manage the end result of these plans which could negatively impact reliability and affordability. 

Commenters recommended that EPA amend Building Block 1 stipulating that no reductions 

associated with coal plant heat rate improvements will be required for states that generated less 

than 10% of their total annual energy from coal. Commenters stated that there are many reasons 

EPA should exclude states with limited coal production from Building Block 1. Commenters 

stated that first and foremost those states with less than 10% of their total energy generated from 

coal have already undergone a significant change in the energy mix. Commenters stated that the 

coal currently operating in New York is performing a needed function as it helps to address local 

reliability issues and in many instances is operating because those units must run for local 

reliability needs. 

Commenters stated that EPA fails to account for additional capital expenditures needed to ensure 

system reliability concerns. The commenters discussed factors, such as the highest cooling 

degree days in the continental U.S., that require Florida to rely heavily on a robust and 

dispatchable generating fleet contrary to many of the low carbon/zero carbon technologies the 

EPA uses to justify the 10 percent Block 3 calculation. The commenters added that the low 

capacity factors of many low carbon/zero carbon technologies (excepting nuclear) combined 
248 

with Florida's need for dispatchable generation means Florida would need to build additional 

natural gas-fired facilities and related infrastructure, which would again be fully paid for by 

Florida's citizens, for use as stand-by units for reliability purposes. 

Commenters stated that EPA's assumptions do not apply to Alaska where the majority of the 

EGUs are not interconnected via a grid, and none of the EGUs can engage in the type of 

economic dispatch practices assumed by EPA. The commenters were thus unable to fully 

evaluate and understand the proposed rule. The commenters further stated that reliability is 

important in Alaska's extreme climate and that electric utilities most directly affected by this 

proposed rule are municipal or cooperative utilities not investor owned utilities. The commenters 

stated that as a result, the financial impact will be borne directly by consumers. 

Commenters stated that EPA has failed to consider that Arizona has only two major natural gas 

pipeline systems serving the state and no in-state natural gas storage. Commenters cited NERC 

findings that the addition of CPP-induced power generation demand in the Southwest could lead 

to a situation where the current pipeline system is inadequate to serve all demand during periods 

of peak usage. 

Commenters also discussed disproportionate impacts to Arizona state-wide as a result of the rule 

due to one of the most severe carbon emission reduction targets of all states with a reduction 

below its baseline of 52 percent. The commenters stated that Arizona stands out as the state most 

impacted by building block 2 due to its high coal-fired generation and significant existing NGCC 

capacity, which will result in significant cost impacts from new infrastructure investments and 

the recovery of stranded investments, and put the state at a significant competitive disadvantage 

compared to neighboring states resulting in job impacts. 

Commenters stated that Building Block 2 will result in a major shift to natural gas in a short 

period of time, away from the current more optimal mix of generation sources. Commenters also 

discussed the Integrated Resource Planning rule which requires utilities to demonstrate how it 

will meet its future energy requirements in an efficient, cost-effective, and responsible manner. 

The commenters remarked that the proposed rule will result in significant risk from natural gas 

supply disruptions as well as price increases and security risks. 

Commenters added that EPA's building blocks provides Arizona no flexibility, would require 

Arizona to shut down all coal plants by 2020 in order to comply, and would jeopardize grid 

reliability and the reliability of electric service. The commenters further stated that the proposed 

rule will cause a health and safety problem during the load peaking summer months for the many 

elderly, fixed income citizens. 

Commenters stated that EPA fails to ensure that utilities can meet peak demand and that 

implementation of BB2 will jeopardize the reliability of Arizona's electricity grid. Commenters 

added that it is not clear that Arizona utilities can purchase sufficient power to attempt to make 

up for shortfalls through purchases on the short-term market because other states in the region 

also experience peak demand during the summer. The commenters stated that an NGCC resource 

could easily run at a 90 percent capacity factor during the peak summer hours in Arizona leaving 

no existing NGCC generation to replace existing coal and OG steam generation during this 
249 

period, despite an annual NGCC capacity factor around 30 percent. The commenters provided 

examples and illustrated the shortfalls that would occur without coal generation. 

Commenters also stated that coal generation was not designed to cycle with intermittent 

resources, does not possess the ramping capabilities to do so, would place heavy wear-and-tear 

on these units, and result in escalating costs of operations. The commenters added that EPA 

insufficiently estimated the availability and cost of renewable resources, as well as the cost of 

fossil fuel source backup. 

Commenters stated that the proposed rule is an overreach of federal administrative authority with 

the potential to increase uncertainty and impact the reliability and affordability of energy for 

residents and businesses of Arizona. The commenters discussed the disproportionate financial 

burden to citizens in rural areas due to the areas' significant reliance on coal investments that are 

still being paid off. The commenters remarked that the issue of stranded assets must be addressed 

to provide relief for our most vulnerable citizens.

Commenters stated that EPA's assumption that coal-fired generation cannot be re-dispatched to 

NGCC units as envisioned by EPA, and incremental, lower-emitting generation resources cannot 

be permitted and brought online in a two to three year period. The commenters further remarked 

that virtually a megawatt-for-megawatt replacement of this generation to maintain safe reserve 

margins. 

Commenters discussed the proposed rule's impacts resulting from shifts in electricity generation 

from coal to natural gas, such as upward pressure on natural gas demand and price burdens. The 

commenters stated that North Carolina is served by only one major interstate pipeline and 

significant natural gas transportation constraints and prices were realized during the polar vortex. 

The commenters also stated that supply constraints could force utilities to burn fuel oil or more 

polluting fuels which would be contrary to the mission of EPA's Clean Power Plan. 

Commenters stated concern about impacts to Montanans as a result of the decisions that may be 

made by other states as they implement the rule within their borders. The commenters stated 

Montana coal is a mainstay for many power plants in the Midwest, where it has been projected 

that many plants may close, and the reshuffling of the industry could have significant impacts for 

Montana families such as electric rate increases in the future since the eastern part of the state 

draws much of their electricity from the Midwest. The commenters also stated that many of the 

ratepayers are customers of small rural electric cooperatives that may not have resources to 

further embrace renewables and energy efficiency. 

Commenters also stated there may be ways to address these concerns, and still achieve the goal 

of reducing the nation's carbon emissions. The commenters stated regional planning must remain 

a key feature of the final rule and may allow for coordination, cost allocation, and a least cost 

strategy. The commenters strongly encouraged EPA to tailor the rule and its goals more to the 

useful life of the nation's coal fleet, such that already planned and anticipated retirements can 

play a more central role in complying with the final rule, capturing efficiencies and minimizing 

the negative economic impacts attributable to the rule itself. 
250 

Commenters stated residential rates in Montana are projected to increase by 16 percent to 19 

percent as a result of the Clean Power Plan; Industrial rates are expected to increase 23 percent, 

and perhaps as much as 40 percent in the eastern part of the State. The commenters stated the 

rule also poses a threat to electric reliability and the preliminary modeling demonstrates the rule 

threatens the State's reserve margin. 

Commenters stated a minimum level of coal and oil-fired generation must be preserved to avoid 

the potential for extreme economic consequences and hardship that could occur due to the loss of 

any one type of fuel supply. The commenters referenced the winter of 2013-2014 when the 

northeast was exposed to a period of extreme cold temperatures. The commenters stated NJ 

would likely have had brownouts and blackouts if not for the remaining coal and oil-fired EGUs. 

The commenters said assumed emissions reductions from Building Block 2 would eliminate NJ's 

remaining coal and oil-fired electric generation which are equipped with approximately $2 

billion in air pollution controls. The commenters stated it would be unreasonable for EPA to 

impose requirements that could lead to calamitous results in New Jersey while allowing higher 

emitting coal units in many other states to continue operations. 

Commenters stated that EPA's plan is a solution in search of a problem, and it's looking in the 

wrong place and that Colorado's clean low sulfur, low mercury, low ash coal is not a major 

contributor to pollution. The commenters noted that, according to the Energy Information 

Administration, carbon dioxide emissions from U.S. coal amount to only about 3 percent of the 

global total. The commenters suggested that a more prudent federal policy for pollution control 

would perhaps involve facilitating exports of Colorado's clean coal to nations to replace the 

dirtier forms that they are currently using. 

Commenters stated there are serious concerns regarding the proposal's impact on Florida's 

infrastructure. The commenters stated further that EPA has not studied the ability for Florida's 

limited natural gas pipeline infrastructure to deliver the needed natural gas, nor has EPA assessed 

the feasibility of adding new generation resources within required timeframes. 

Commenters stated that they have serious concerns about the impact that EPA's Clean Power 

Plan would have on the reliability of Florida's electric grid, and on the electric utility ratepayers 

that would be forced to pay significantly higher electric bills. The commenters noted that their 

comments are based on the understanding that the CPP would require at least 90% of Florida's 

coal-based electric generating capacity to be retired. 

Commenters stated that they believe the CPP's timelines will create an unrealistic and 

unachievable mandate for Florida's utilities to replace their existing coal facilities in a relatively

short time period while maintaining grid reliability. The commenters have requested that the 

EPA withdraw or significantly redraft the CPP in light of the consequences that almost surely 

will result from the CPP because the new proposed rule should not place utilities in the position 

of being forced to incur fines and potentially criminal penalties if they need to utilize a power 

plant that is required to run in order to keep the lights on, and should not unduly burden the 

ratepayers. 

Commenters noted that: Reliability - EPA's compliance modeling results (Option 1 - State 

compliance scenario) depicts a significant amount of retirements by 2020. The commenters 
251 

stated that this option depicts 12,222 megawatts of fossil fuel-fired retirements for the state of 

Florida by 2020, and of that amount, 9,995 megawatts are incremental retirements from EPA's 

base case scenario. The commenters stated that the retirement of this amount of baseload 

capacity raises reliability concerns and provided an example. The commenters stated that it is 

highly unlikely there is sufficient time, materials or craft labor to construct this replacement 

generation in the state of Florida, much less so to have this replacement generation in place 

nationwide by 2020. 

Commenters stated that the potential impact of the proposed rule to disrupt power generation 

within Illinois and within the ISO footprints is great. The commenters stated further that 

resources in PJM are already strained with the so-called "polar vortex" contributed to the 

inability of 22% of its installed capacity to operate within the RTO, and left PJM perilously close 

to instituting select outages to maintain system integrity. The commenters stated further that the 

situation is so serious that PJM has instituted a special procedure to alter the means it uses to 

compensate for capacity, to better insure resource adequacy in the event of such a situation. The 

commenters also noted that MISO anticipates similar capacity shortfalls that, if unresolved, 

could see systemic reliability issues within its footprint, and MISO's reserve margin dropping 

below the generally accepted reserve requirement of 15% as early as 2015. 

Commenters stated that complicating this issue is that Illinois, as a deregulated state, has no 

regulatory mechanism in place to ensure resource adequacy within its borders. 

Commenters stated that given the tenuous nature of the current capacity resource situation in 

Illinois (based on past and pending capacity retirements) as well as the uncertain ability of RTO 

markets to provide for timely capacity replacement within the RTOs, USEPA should adopt a 

safety valve or off-ramp of some sort that acknowledges the vital importance of resource 

adequacy for the health and safety of Illinois' citizens and allows for delay or deferral of 

greenhouse gas reduction requirements in the event that adequate resource thresholds cannot be 

met under the rule as adopted. 

Commenters stated that in adopting policies that realign their State's energy generators, decision 

makers must take care not to strain our already overburdened energy infrastructure. The 

commenters stated that MISO predicted that over the next ten years the North/Central Region 

will suffer an increasingly pronounced energy shortfall given current trends in energy 

generation. The commenters stated further that if policy changes force existing sources of 

energy to retire early, without sufficient time to find suitable replacement sources or develop 

efficiency increases to offset the loss in generation, residents and businesses throughout the 

region may find themselves without power when they need it. 

Commenters stated concern about electric reliability and that EPA has not adequately examined 

the impact of the proposal on this issue. The commenters stated that they are very concerned that 

a shift away from a coal-fired fleet to natural gas plants, which are designed to supplement coalgenerated power to meet peak demands, will jeopardize their ability to meet electricity needs. 

Commenters stated EPA's primary renewable energy proposal fails to recognize real-world 

constraints on the integration of new renewable energy capacity and generation, and it ignores 

other potential constraints on the growth of renewable energy resources that are likely to be 
252 

state-specific. The commenters included the following examples: increasing renewable energy 

generation often requires increased transmission infrastructure to transmit long distances; and 

there must be sufficient back-up fossil fuel-fired resources to meet peak demand in the event that 

a peak occurs at a time when renewable resources are unavailable, of particular importance to 

New Mexico, where winter peak demand is almost as high as summer peak demand, but during 

winter some renewable energy resources are typically far less productive. 

Commenters stated EPA inappropriately assumes that all renewable generation will provide the 

same level of service: wind energy capacity can be expanded relatively rapidly but is least likely 

to be available when demand is at a peak while solar energy matches peaks in demand well but is 

more difficult to expand quickly. The commenters said this was first realized in New Mexico 

with the interconnection of PNM's first significant variable energy resource in 2003 during 

which came the awareness that the variable nature of wind energy can have a significant impact 

on system operations, particularly in regard to the regulation for moment-to-moment power 

fluctuations. The commenters said a study was commissioned that concluded that 700 MW of 

wind could not be accommodated given PNM's low peak load, current resource mix, and 

transmission constraints even though New Mexico has significant wind resources. 

Commenters explained that during low peak demand levels, fluctuations in the variable 

generation resources will have a more significant impact by affecting a larger percentage of the 

total on-line capacity. The commenters also stated the existing dispatchable resource mix in New 

Mexico is dominated by large coal-fired units and out-of-state nuclear capacity that cannot 

provide as rapid a response as may be needed to support rapid fluctuations in renewable energy 

generating levels. The commenters added, New Mexico has relatively limited interconnections to 

neighboring utilities, which makes it difficult for the State to purchase the additional 

dispatchable power needed to support the development of additional renewable generation 

resources. 

Commenters stated integrating new wind and solar resources will increase the challenges of 

reliably operating the ERCOT grid, and almost 10% of the ERCOT region's annual generation 

came from wind resources. The commenters stated the increased penetration of intermittent 

renewable generation, as projected by modeling results, will increase the challenges of reliably 

operating all generation resources, and if there is not sufficient ramping capability and 

operational reserves during periods of high renewable penetration, the need to maintain 

operational reliability could require the curtailment of renewable generation resources which 

would reduce production from renewable resources, leading to possible non-compliance with the 

proposed rule deadlines. 

Commenters stated intermittent renewable generation sources will contribute 22% of energy on 

an annual basis in 2029; however, during 628 hours of the year intermittent generation will serve 

more than 40% of system load. The commenters continued, during 128 hours, instantaneous 

renewable penetration will be higher than 50%, and the peak instantaneous renewable 

penetration from the model results is 61%; the highest renewable penetration hours will be 

driven by maximum solar production during relatively high wind periods, occurring during the 

day (8 a.m. to 5 p.m.), as opposed to early morning hours (usually 2 to 4 AM], as currently 

experienced in the ERCOT region. 
253 

Commenters wrote in detail about the model results and the unrealistic assumptions made by the 

model and the challenges of real-time operations. The commenters said to ensure grid reliability, 

there would need to be increased consideration of operational activities on the distribution and 

transmission systems. The commenters said based on ERCOT's modeling, the majority of new 

renewable generation resource additions are anticipated to be solar. However, if instead ERCOT 

sees a large amount of wind resource capacity additions, then the reliability impacts may be more 

severe. The commenters stated wind production in West Texas results in high renewable 

penetration during early morning hours, when load is lowest, and a larger expansion in wind 

production relative to solar may result in lower net loads and significant reliability issues. The 

commenters concluded if ERCOT cannot reliably operate the grid with these high renewable 

penetration levels, then production from these resources will be curtailed to maintain operational 

reliability which would reduce production from renewable resources, leading to possible noncompliance with the proposed rule deadlines. 

Commenters stated that the concerns about legal challenges - about the uncertainty of litigation 

involving aspects of the plan - are irrelevant to the core issues the plan is attempting to 

address. The commenters stated that lack of significant innovation and diversification in our 

state that has now resulted in the costly, aging and polluting infrastructure we now have, creating 

a highly uncertain future for coal-generated power.

Commenters stated that, with Louisiana as part of SPP and MISO, uncertainty increases with the 

potential for carbon emission limitations. While the specifics of any carbon proposal are unclear, 

any carbon emission limitations will negatively impact MISO's coal generation fleet and further 

increase the resource deficiency. 

Commenters stated that Arizona needs to protect the reliability of its energy grid because it is 

unclear if Arizona could survive the loss of a natural gas pipeline and still support the grid 

demand without retaining backup coal-fired options. The commenters stated that the assumption 

that coal generation can be one-for-one diverted to existing NGCC units is inaccurate. The 

commenters also stated that the Proposed Rule will eliminate energy reserves and has timing 

issues that will significantly risk the reliability of the Arizona electric transmission network. The

commenters stated that in order to maintain grid reliability and security, EPA should include a 

reliability safety valve mechanism in the final rule, as well as including circumstances under 

which compliance can be delayed to manage real time issues that will compromise electric 

reliability. The commenters stated further that the modeling does not take into account regionspecific technical issues. 

Commenters stated that EGU owners and operators, as well as FERC and NERC are concerned 

with impacts to reliability. Commenters stated that many of the concerns stem from its 

impossibly short timelines, as previously discussed. Commenters stated that it is not clear how 

customers would be able to invest in its units in various states to meet the compliance of the 

units' local state and how that would interplay with Indiana's compliance. Commenters stated 

that the proposed rule would require generating units to comply in the individual state of its 

location or suggests that states may cooperate with one another. Commenters stated MISO and 

PJM in combination control a substantial amount of the whole U.S. power grid and also part of 

Canada's. Commenters stated that the EPA calls the proposed rule flexible but does nothing to 

solve the problem of the interconnectedness of the whole power system. 
254 

Commenters stated that the dispatch of generating units is currently handled on an economic 

basis by the MISO and PJM RTOs. Commenters stated that the proposed rule assumes that 

NGCC units will all operate at 70 percent capacity factor. Commenters stated that this upends 

running the most economical unit first in the RTO's dispatch order. Commenters stated that 

spinning reserve will also have to be maintained which effectively are units running at reduced 

output at the ready if another unit that is online needs to come offline due to a problem. 

Commenters stated that if the coal units are backed off to meet the 70 percent NGCC capacity 

factor level or the state's emission rate target, those units are running at a lower efficiency level 

and at a higher CO2 emission rate. Commenters stated that environmental dispatch in place of 

economic dispatch of generating units as is now done by the RTOs will increase cost to 

customers by disturbing the economic order of dispatch keeping lower marginal cost units on the 

sidelines. 

Response 37: These comments show the many factors that influence reliable operation of the 

electricity system, and EPA generally that these multiple factors are important. As many of 

these commenters noted the electric power sector is complex with differing market structures, 

ownership structures, fuel mixes, and state requirements across the country. But, as we pointed 

out in Chapter VIII of the preamble, there are multiple features well embedded in the electricity 

system that ensure that electric system reliability will be maintained. The CPP is designed to 

assure that it does not interfere with the industry’s ability to maintain electric reliability. Please 

see Chapter VIII.G.2 for a discussion of this. The final rule has been modified from the proposal 

to address comments that express concern over the 2020 start of the compliance period, and 

issues raised in comments that address the use of natural gas and renewables are discussed in The 

GHG Mitigation Measures TSD. 

Comment 38: As an example of maintaining reliability during coal phase-out, commenters 

offered "the province of Ontario's experience in phasing-out coal from its supply mix." 

Commenters stated "Whereas 7,500 MW of coal represented approximately 25% of provincial 

capacity in 2003, Ontario shut down its last coal-fired generating station in April 2014 and 

passed legislation to prevent restarting." Commenters stated "This generation has been replaced 

by a mix of non- and low-emitting resources such as natural gas, hydropower, nuclear, wind and 

solar." 

Commenters noted, "In order to protect reliability, though, Ontario was compelled to adjust its 

coal phase-out schedule on several occasions." Commenters stated "A shutdown originally 

scheduled to occur in four years ultimately took more than 10 years." Commenters noted that 

"The province achieved a significant accomplishment in becoming the first jurisdiction in North 

America to eliminate coal as a power generation source" but noted that "preserving electric 

reliability was a paramount imperative and extended timelines became necessary as a result." 

Response 38: EPA appreciates this comment. EPA has considered these types of issues in 

developing the final rule. The final rule does not attempt to shut down coal generation 

prematurely, provides flexibility to states in designing plans for compliance, and provides a long 

period to ensure reliable transition to a changing generation mix. 
255 

Comment 39: Multiple commenters cited analyses by NERC and other organizations regarding 

reliability concerns. 

Commenters referenced NERC's concerns about potential reliability risks. 

Commenters cited NERC, MISO, and PJM concerns regarding reliability. Similarly, 

Commenters cited NERC, SPP, MISO, ERCOT and AEP assessments indicating the CPP will 

result in reliability threats due to coal retirements, shifts to natural gas, and increased RE that 

may result in issues with reserve margins, vulnerability to natural gas supply constraints, the 

need for increased essential reliability services, thermal overloads, voltage collapse, and 

increased time and costs related to additional transmission infrastructure. 

Commenters provided a lengthy description of resource adequacy and the importance of 

providing reliable power, citing the FERC primer, a NERC ERS report and several FERC 

regulations. The commenters also explained that there are many entities involved in maintaining 

reliability, described the interconnections of the U.S. electric grid, listed key functions of system 

operators, and summarized energy markets. The commenters stated that "significant market 

changes impact price signals which could have reliability and resource adequacy implications if 

the price signals do not incent construction of needed new generation and infrastructure." 

Commenters also referenced the November 2014 NERC Reliability Study which highlights the 

reliability impacts of coal-fired generation units that may be forced into retirement as a result of 

building block 2 and the importance of diversification of fuel sources to offset unforeseen events 

such as abnormal weather, regional transfers and unplanned outages. The commenters also 

referenced the September 2014 NERC study reviewing the events of the polar vortex. The stated 

the CPP lacks meaningful discussion on how to mitigate any detrimental impacts that may arise 

as a result of an increased reliance on VERs. 

Commenters stated the NERC Reliability Study sets forth the following concerns with building 

block 4, all of which could impact reliability of the electric grid: 

• US EPA appears to overestimate the amount of energy efficiency expected to 

reduce electricity demand over the compliance time frame; 

• Substantial increases in energy efficiency programs exceed recent trends and 

projections; 

• The CPP assumption appears to underestimate costs and may underestimate the 

capital investments that would be required by utilities to sustain energy efficiency 

performance through 2030; and 

• The offsetting requirements in more coal retirements, along with expansions in 

natural gas and VERs, in a constrained time period could potentially result in 

reliability or ERS constraints. 
256 

Commenters listed the following issues in the proposed rule as identified by the Initial NERC 

report: (1) EPA assumed "rapid growth in non-hydro renewable generation exceeds its own 

forecast" in the RIA of 356 TWh/year by 2030; (2) EPA overlooked real world differences 

among state renewable portfolio standards that are contrary to EPA's assumptions; and (3) EPA 

failed to address the well-known grid reliability challenges associated with increased dependence 

on "variable" resources, which have also been noted by FERC Commissioners. The commenters 

quoted NERCs initial reliability report which stated that as variable resources increase, a 

sufficient amount of reactive support and ramping capability is needed that could increase 

cycling on conventional generation and contribute to increased maintenance hours or higher 

forced outage rates, potentially increasing operating reserve requirements. The commenters 

stated the report further stated that successful large-scale storage solutions have not yet been 

commercialized. The commenters stated that the report makes it clear that increased dependence 

may seriously impact reliability. 

Commenters cited NERC's November 2014 report in discussing the potential for resiliency and 

fuel diversification to be degraded as a result of the proposed rule, which is crucial to keeping 

energy prices affordable, supporting grid reliability, and mitigating unanticipated events such as 

weather, strikes, and outages. The commenters also noted that the U.S. has an unparalleled 

opportunity for energy independence and security as a result of housing 28% of coal reserves and 

increasingly available oil and gas reserves, and cited Tom Donilon's statements on the 

relationship between energy, foreign policy, economic strength and world leadership. The 

commenters concluded that "purposefully moving away from energy diversity in the United 

States is a short-sighted, irresponsible policy choice that benefits neither our nation nor the rest 

of the world." 

Commenters cited NERC as having grave reliability concerns with the proposal, which NERC 

believes would result in between 108 and 134 GW of generation retirements by 2020, most of 

which will disproportionately impact base-load coal generation in the U.S. The commenters cited 

NERC's concern over pipeline constraints, growing gas and electric interdependency, increased 

transmission projects, policy and operations and regional and multi-regional coordination for 

electric utility planning. The commenters cited NERC's conclusion that the EPA's "proposed 

timeline does not provide enough time to develop sufficient resources to ensure continued 

reliable operation of the electric grid by 2020". The commenters warned of a high probability of 

blackouts occurring around the country as a result of the proposed rule. 

Commenters cited Southwest Power Pool comments, NERC's reliability impact analysis, and 

DOE's 2012 study on large power transformers and the electric grid, to highlight their concern 

surrounding reliability issues and the proposed rule timeframe. The commenters discussed 

planning, materials procurement, and construction timelines, and stated that manufacturing of 

transmission systems may take one to five years if procurement of raw materials and equipment 

from foreign countries do not slow the process. The commenters also cited DOE's discussion of 

lead times which may extend from five months to five years depending on the manufacturer and 

location of the materials. The commenters stated that new extra-high voltage transmission 

systems will need to be studied and built to maintain reliability and that if the timeline in the 

Propose Rule is not adjusted, certain regions may see significant impact on reliable operations. 
257 

Commenters stated that the CPP puts the reliability of the U.S. electricity supply at risk and cited 

statements by NERC, MISO, PJM, SPP and ERCOT for support. The commenters attached 

analyses by MISO, ERCC and PJM that indicate uncertainty and reliability concerns. The 

commenters suggested that because every independent non-partisan analysis by system operators 

agrees that the CPP may threaten electric reliability, EPA should reconsider the proposed rule, 

because reliability risks entail serious legal and public policy consequences. The commenters 

provided several attachments discussing reliability concerns, such as one from U.S. Government 

Accountability Office, as well as several FERC Commissioners. The commenters also stated that 

electrical outages endanger economic growth and have a demonstrable negative effect on public 

health, as noted by health care professionals who also serve as Members of Congress, such as 

unemployment, disease, extreme weather, and food safety, among other benefits. The 

commenters stated putting these public benefits at risk is undesirable and wrong, especially when 

the alleged benefits associated with the CPP are tenuous and unverifiable. The commenters cited 

ISO New England's statements on the importance of reliable electricity, the Institute of Electrical 

and Electronics Engineers of the U.S. observations that "even minor disruptions in the electric 

power grid can sometimes lead to catastrophic 'cascading' blackouts, and that the loss of a single 

generator can result in an imbalance between load and generation. The commenters stated the 

resulting blackouts cause incalculable economic damage. The commenters added that for 

example, the direct costs to high technology manufacturing in the San Francisco Bay Area alone 

during the California blackouts alone ran as high as one million dollars a minute due to lost 

production, and the relatively brief Northeast blackout of 2003 cost business about $13 billion in 

lost productivity." The commenters noted that the "polar vortex made it clear that coal-fired 

generation, much of which is currently scheduled to be retired as a result of EPA rules, is vital to 

the reliability of our electricity supply. In some areas, coal-fired plants thought to be obsolete 

were discovered to be essential to reliability, and one of the nation's largest electricity generators

reported that 89 percent of the coal-fired generation slated for retirement by 2015 as a result of 

EPA rules was needed to supply electricity during the cold weather." 

Commenters also referenced the polar vortex as evidence of potential reliability concerns and 

cited NERC's statements regarding potential reliability concerns. The commenters urged EPA to 

address these concerns regarding the aggressive timetable of emission reductions required under 

the Proposed Rule. 

Commenters cited an October 2014 NERA study of the CPP stating that the Proposal will result 

in from 46 to 169 additional gigawatts retired unless EPA makes significant corrections to the 

rule, which is likely to seriously threaten the nation's electric reliability The commenters stated 

that state regulators and industry stakeholders have warned that the proposal will force them to 

choose between meeting its requirements at the risk of potentially violating FERC reliability 

mandates, or complying with those mandates at the risk of failure to comply with the proposal. 

The commenters further cited: 

• Southwest Power Pool predictions that the proposal will increase retirements in its 

area by 200%, with significant economic, health, and safety impacts resulting 

from "rolling blackouts or cascading outages"; 
258 

• Electric Reliability Council of Texas warnings that the proposal will have "a 

harmful impact on reliability" and "will have a significant impact on the planning 

and operation of" its grid, forcing the retirement of between 3.3 and 8.7 gigawatts 

in its region alone; 

• North Dakota officials' concern that FERC may reject state 111(d) plans on 

reliability grounds and may even impose significant penalties for any blackouts 

and similar failures that might result from states efforts to meet EPA's 

requirements; 

• FERC Commissioner Moeller's warnings that the proposed shift from least-cost to 

least-emission dispatch priorities "has the potential to completely undermine the 

market principles that underpin dispatch of the system"; 

• NERC's determinations that "Essential Reliability Services may be strained by the 

proposed" rule, and that the rule requirements "represent a significant reliability 

challenge." 

• The commenters also paraphrased NERC in the following statements: "[p]ipeline 

constraints and growing gas and electric interdependency challenges" and the 

need for "more transmission and new operating procedures" will limit state and 

utility ability to comply with the proposal while preserving reliability. And the 

retirements of coal-fired units due to the proposal will "lessen industry 

diversification of fuel sources." Cumulatively, these issues mean the proposal will 

impair the reliability of the grid, especially under extreme weather conditions 

such as last winter's "polar vortex." 

Commenters cited SPP comments on reliability impacts as a result of compliance with the 

proposed rule, such the lack of time available to upgrade transmission and the challenges 

associated with increased regional and interregional planning efforts needed to handle the 

necessary system expansions. 

Commenters stated their concern for reliability under the proposed rule and cited several system 

operators, reliability councils, and public service commissions including APPA, NERC, TVA, 

SPP, National Rural Electric Cooperative Association, ERCOT, ISO/RTO Council regarding the 

CPP's effect on bulk electric system reliability. The commenters specifically cited: NERC's 

initial reliability review discussions of adequate reserve margin levels, constrained time periods, 

and resource mix shifting: SPP's comments regarding NERC violations, transmission expansion 

time and cost restraints, and reliability during extreme events as a result of the proposed rule; 

ERCOT's analysis indicating reliability and management challenges associated with market 

design, increased renewables, coal plant closures, transmission system upgrades and dispatchable 

generation capacity issues; and TVA's comments stating that there is insufficient implementation 

time for implementing the glide path, that IPM is inadequate, and that detailed transmission 

reliability studies are required to determine the supply and transmission changes required to meet 

FERC requirements to maintain Bulk Electric System reliability. 
259 

Commenters cited statements from FERC Commissioner Moeller and Chair LaFleur as well as 

representatives from Alliance for Cooperative Energy Services and American Electric Power 

discussing recent winter grid reliability issues and the potential reliability impacts of EPA's 

recent and proposed rules, such as those resulting from coal fleet closures. The commenters 

discussed the instability of natural gas prices when compare to coal during the winter, included a 

figure illustrating the point, and stated that electricity price spiked followed the natural gas price

increases- primarily as a result of a less diverse electricity grid driven by policy-induced closures 

of coal power plants. The commenters cited Southern Company reports to indicate the 

importance of fuel diversity and coal power for electricity prices. The commenters then 

summarized findings of Energy Ventures Analysis' (EVA) study for the NMA and cited 

statements from PJM, MISO, JP Morgan as well as EIA statistics to illustrate the importance of 

the existing coal fleet to reliability, reserve margins and electric prices and provide projections 

increases in costs and prices in various seasons and scenarios. The commenters further cited 

ConocoPhillips who projects domestic natural gas demand will exceed DOE/EIA's projection by 

30 percent in 2017. Commenters provided further citations from SPP regarding the impact of the 

proposed rule's timeline on reliability due to new transmission needs, and from NERC, MISO 

and ERCOT regarding the negative reliability and reserve margin impacts of the interim 

performance requirements on reliability. The commenters also discussed NERC's concerns of 

overdependence on a single fuel type and the effect of increased reliance on wind and solar on 

the reliability of the grid due to storage, ramping flexibility, reactive power, and voltage stability

issues. The commenters added statements from First Energy and Virginia State Corporation 

Commission that stated that EPA rules will lead to less reliable service over time and that the 

EPA Section 111(d) proposal could have an impact similar to the MATS rule that has brought 

the electric grid to the edge. The commenters summarized that the proposed rule creates an 

unacceptable risk to our nation's electricity generation, transmission and delivery system that 

may result in widespread voltage degradation, collapse and cascading outages in its system. 

Similarly, commenters cited NERC, MISO, SPP, NERA, ERCOT to indicate that the CPP, 

especially its interim targets, will create significant reliability risks by forcing early retirement of 

fossil units that cannot be timely replaced with any form of generation, let alone generation with 

similar reliability attributes. The commenters also stated that the proposed rule will also create 

difficulties with respect to state efforts to develop an effective portfolio of generation resources 

and discussed NERC's concerns of overdependence on a single fuel type and the effect of 

increased reliance on wind and solar on the reliability of the grid. 

Commenters summarized and cited PJM and ISO New England's proposals as well as MISO 

statements to illustrate that every market has its own unique resource performance issues and 

EPA's capacity mandates in the BSER could exacerbate such issues by restricting the ability of 

these markets to utilize all types of generation to ensure reliability. 

Commenters stated the CPP was developed without thorough consultation with the Federal 

Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation 

(NERC), or any of the regional transmission organizations that regulate and control grid 

reliability. The commenters stated the FERC has approved mandatory, enforceable reliability 

standards with which electric utilities must comply or face civil monetary penalties. The 

commenters agreed with the Southwest Power Pool (SPP) who stated the bulk electric system 
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will be at serious risk of violating limits if the CPP remains as-is and the likelihood would 

increase if not given enough time to construct the infrastructure necessary to facilitate 

compliance with the state goals being contemplated under the proposed CPP. The commenters 

stated that planning, design, siting, permitting, and construction can easily take as long as a 

decade. The commenters also stated the CPP clearly advocates a greater transition from coalpower generation to natural gas-fired generation, but there has been no assessment as to whether 

there will be adequate natural gas supplies or infrastructure to meet the increased demands 

created by the CPP. 

Commenters also stated the need for EPA to consult with FERC, NERC, and RTOs to determine 

impacts to reliability, cost stabilization and national security issues. The commenters referenced 

concerns raised by NERC, MISO, and SPP. The commenters stated a lack of sufficient pipeline 

infrastructure to increase supply of natural gas and the impossibility to modify existing plants 

and build new plants to meet EPA deadlines. 

Commenters listed the following negative reliability impacts that will result from the proposed 

rule: 

• overall reliability of service impacts to New Mexico's electric grid and the 

utilities' electric grid if plants are shuttered or if plant output is reduced; 

• reliability of service impacts to utility customers, industries and the State's 

economy if plants are shuttered or if plant output is reduced; 

• utility's ability to integrate existing and prospective New Mexico located 

renewable energy projects if plants are shuttered or if plant output is reduced; 

• promotion of New Mexico's renewable energy industry and the State's economy if 

plants are shuttered or if plant output is reduced; and 

• State's ability to attract economic development. 

Commenters stated that EPA's power plan will not work and poses an unacceptable risk to our 

nation's electricity generation, transmission and delivery system. The commenters stated that a 

growing number of experts are warning that the agency's proposal will degrade grid reliability 

and produce substantially higher utility and energy costs for all Americans. The commenters 

noted NERC's conclusion that implementation of the proposal will prove impossible while 

damaging the reliability of the nation's electricity supply and the proposal "would increase the 

use of controlled load shedding and potential for wide-scale, uncontrolled outages." The 

commenters further noted NERC's findings that these results are inevitable because EPA's plan 

underestimates the number of power plants that will be closed and overestimates the amount of 

new power sources and increased energy efficiency expected to offset the power generation 

lost. The commenters stated concerns of several power organizations: Southwest Power Pool's 

warning that the proposal will result in cascading outages and voltage collapse; MISO's forecasts 

that the power reserves needed in the fifteen-state region will fall below safe margins and only 

get worse; and American Electric Power studies that indicated the plan would result in 

widespread voltage degradation, collapse and cascading outages in its system. 
261 

Commenters stated concern about how the implementation of the Plan will impact grid reliability 

in coming years. The commenters further cited concerns by NERC, MISO, and SPP about how 

the retirement of significant coal-fired capacity will impact the reliability of the nation's electric

grid. The commenters noted an observation by NERC that while NGCC units are capable of 

running at a high capacity factor, those units are generally not designed to be utilized as baseload 

resources. The commenters also noted that NERC pointed out that overreliance on one fuel 

source threatens the fuel diversification that utilities rely on to help maintain reliability. The 

commenters also noted that EPA's finding that 10% of the 464 NGCC units in service in 2012 

had a capacity factor of 70% or greater does not support a conclusion that all of these generating 

units can be used at the same rate. 

Commenters reiterated concerns raised by SPP, noting that SPP performed an evaluation of the 

impacts of the projected EGU retirements on SPP's reserve margin and concluded that by 2020, 

SPP's reserve margin would fall to 4.7%, which is 8.9% below SPP's minimum reserve margin 

requirement and would result in a violation of SPP's reliability criteria and NERC reliability 

standards. The commenters further noted that out of the fourteen load-serving members 

impacted by the EPA's projected EGU retirements, nine would be deficient in 2020. 

Furthermore, SPP found that its anticipated reserve margin would fall to -4.0% by 2024, causing 

ten of SPP's load-serving members to be deficient. 

Commenters also presented information by other reliability experts: 

• In a letter to EPA, 18 current and former State PUC Commissioners asserted that 

"[p]oor forecasting by EPA [in the proposed rule] also means the reliability of the 

electric grid will be threatened due to coal shutdowns ...." 

• Several sources have concluded that, if the NOPR were implemented, the 

Midcontinent Independent System Operator ("MISO") and SPP would be forced 

to operate well below FERC's required 14.5% reserve capacity. 

• A joint study by NERC and the California ISO concluded that the reliability of 

bulk power supply can be diminished when renewable resources reach 20% or 

more of total supply (19) - a number that EPA projects can be achieved or 

exceeded by 24 States to achieve the NOPR's emissions reduction mandates. 

Commenters stated that the concerns being raised by the organizations that focus on electricity 

grid reliability issues highlight not only the unprecedented scope of the NOPR, but also the risks 

it would create in an area where it has less expertise than other federal agencies such as FERC or 

industry bodies such as NERC and SPP. The commenters further stated that reliability impacts 

have not been adequately addressed in the NOPR or related technical support documents and that 

the impacts are so substantial that the NOPR should be withdrawn to enable them to be more 

adequately assessed on a nationwide basis. 

Commenters summarized some of the concerns by SPP that the NOPR would pose a "serious 

risk" to reliability and the bulk electric system will be at serious risk of violating limits [to ensure 

that transmission lines are not overloaded and voltage is maintained]. The commenters presented 

SPP's conclusions from the assessments: 
262 

• If the assumed EGU retirements were to occur absent requisite transmission and 

generation infrastructure improvements, the power grid would suffer extreme 

reactive deficiencies that would expose it to widespread reliability risks resulting 

in significant loss of load and violations of NERC reliability standards. 

• Even with generation capacity added to replace the assumed EGU retirements, 

additional transmission infrastructure will be needed to maintain reliable 

operation of the grid. The assessment revealed 38 overloaded elements in portions 

of six states that SPP would be required to mitigate with transmission planning 

solutions. 

Commenters noted that the transmission expansion currently planned in SPP does not consider 

EGU retirements expected as a result of the CPP and that EPA's projected EGU retirements 

represent approximately 6,000 MW of additional capacity being retired in the SPP region beyond 

that currently expected by 2020, or approximately a 200% increase in retired generating capacity 

compared to SPP's current expectations. The commenters noted that SPP's transmission system 

impact evaluation indicates serious, detrimental impacts on the reliable operation of the bulk 

electric system in the SPP region, introducing the very real possibility of rolling blackouts or 

cascading outages that will have significant impacts on human health, public safety and 

economic activity within the region. 

Commenters said EPA's analysis does not appropriately consider all of the potential impacts on 

the safe and reliable provision of electricity, nor the potential adverse impacts on the cost of 

electricity that can result from implementation of the Proposed Rule as drafted. The commenters 

said increased renewable generation resulting from building block 2 will likely result in the need 

for additional electric transmission facilities or constrain existing facilities; likewise, greater 

reliance on cleaner-burning natural gas will create a greater demand on natural gas infrastructure. 

The commenters said the interrelated nature of the natural gas and electricity markets, combined 

with varying compliance costs and mandates between neighboring states, will complicate the 

ability to permit and develop the needed infrastructure, resulting in a direct impact on electric 

system reliability. The commenters stated, furthermore, EPA's analysis does not appear to review 

how the proposed requirements would influence the dispatch of electric generation resources, 

potentially shifting the market away from an efficient economic dispatch structure, to one that is 

driven by environmental mandates, and this could significantly increase the cost of electricity to 

consumers and adversely impact the economies of the states involved, as well as negatively 

affect grid reliability. 

Commenters stated EPA's assessment must include an evaluation of how the proposed reduction 

targets would impact individual states within an interconnected electrical planning region where 

the interconnected states have widely varying reduction mandates. The commenters said that 

impacts could adversely affect the cost and reliability of electricity throughout a region, and 

based on comments already received from stakeholders, EPA has recognized the interrelated 

nature of the building blocks and the need to develop necessary infrastructure. The commenters 

said there is insufficient data in the record to conclude that the Proposed Rule will not adversely 

impact the availability or reliability of electricity. The commenters said while EPA indicated that 

it had consulted with ISO and RTOs, other agencies that would be most optimally positioned to 
263 

assess the impacts of the Proposed Rule on electricity reliability and costs - the Federal Energy 

Regulatory Commission (FERC), the North American Electric Reliability Corporation (NERC), 

the Western Electric Coordinating Council (WECC), and other local and regional balancing 

authorities - do not appear to have been engaged in EPA's initial assessment. The commenters 

stated that emphasizing the importance of ensuring that the Proposed Rule does not jeopardize 

the electricity bulk system, on November 7, 2014, FERC Chairman Cheryl LaFleur called for a 

reliability mechanism to be incorporated into the Clean Power Plan, noting that "protecting 

reliability isn't optional". The commenters said the EPA should utilize the expertise and regional 

insights of these various agencies to further refine the Proposed Rule in a manner that addresses 

the concerns that have been raised. The commenters stated that at the national level, NERC has 

undertaken reliability assessments to examine the Clean Power Plan and identify the reliability 

implications and potential consequences from the implementation of the Proposed Rule and the 

EPA's underlying assumptions. The commenters added that the NERC Initial Reliability Review 

notes that there are several assumptions embedded in EPA's building blocks that are likely to 

impact the reliability of the bulk power system, and which should be further considered prior to 

finalizing the Clean Power Plan. The commenters said NERC identified several assumptions that 

warrant further consideration, including the following: 

• Development of replacement generation for facilities that will be retired may be 

too conservative, and developing replacement generation in the constrained time 

period allowed for implementation under the Proposed Rule could present 

significant reliability challenges; 

• Constraints on electric transmission and gas pipelines due to greater reliance on 

variable resources and natural gas are not properly accounted for; 

• Proposed energy efficiency expansions are not supported by peer data; 

• Changes to the resource mix resulting from implementation of the Proposed Rule 

will result in changes to the operations and expected behaviors on the bulk power 

system that are not addressed in the Clean Power Plan; 

• Necessary reliability enhancements are not likely to be implemented within the 

timeframe contemplated under the Proposed Rule. 

Commenters stated NERC also recommends that the Proposed Rule include a form of reliability 

assurance, which should be developed on a multi-agency and state level, and "EPA, FERC, the 

DOE, and state utility regulators should employ the array of tools and their regulatory authority 

to develop a reliability assurance mechanism, such as a 'reliability back-stop'" (NERC Initial 

Reliability Review, p. 3). The commenters stated the EPA should continue its outreach to 

stakeholder groups and work with NERC and other agencies that will be conducting reliability 

assessments to ensure that the development - and implementation - of the final rule does not have 

the unintended result of disrupting the reliability of the nation's bulk power system. 

Commenters stated, in addition to the nationwide review conducted by NERC, in the west, 

WECC has undertaken a phased-study process that is intended to provide the industry with 

unbiased and independent analysis of the potential reliability impacts of the Proposed Rule. The 
264 

commenters said that in WECC's preliminary report, one result of exploratory sensitivities 

regarding carbon price "highlighted the interconnected nature of the Western Grid" (WECC 

Preliminary Technical Report at p. 30). The commenters said this emphasis on the 

interconnected nature of the regions relevant to the provision of electricity cannot be understated, 

and must be recognized by EPA in the final rule that is promulgated. 

Commenters said coordination with FERC, NERC, and WECC to determine the real impact of 

the Clean Power Plan on regional and national operations and markets is essential, and must be 

done prior to making any final determinations regarding the Proposed Rule's impact on the 

electricity markets. The commenters urged EPA to review the studies being done by NERC, 

WECC, and other regional entities, and to address national and regional ramifications of the 

EPA's proposal in the final rule. The commenters said EPA simply cannot promulgate massive, 

national emission reduction strategies like those proposed in the Clean Power Plan without fully 

analyzing the impacts on the provision of electricity and the cost of the electricity. 

Commenters said concerns regarding impacts to reliability have been raised at the national, 

regional, and state-wide level. The commenters said that in a prepared testimony, FERC 

Commissioner Moeller raised concerns regarding the impacts of the Clean Power Plan on the 

integrated electricity grid, including concerns regarding infrastructure constraints and integration 

issues. The commenters said the integrated nature of the electric grid and the need for multi-state 

coordination are not adequately address in the Proposed Rule, and as more fully addressed 

below, there would likely be significant benefits to having a regional plan in the west, given the 

interconnected nature of the electric grid. The commenters stated that while multi-state and 

regional plans and agreements would address many of the "seams" issues associated with the 

interconnected nature of the electricity grid, there are a number of impediments that are likely to 

thwart the timely development of such regional plans, including the level of reductions required 

of neighboring states, the interaction between potential rate- and mass-based approaches utilized 

by neighboring states, and the amount of time that will be required to coordinate such a plan 

between multiple governmental agencies. The commenters said it is these very concerns that 

have prompted FERC Chair LaFleur to note that FERC will need to be involved in 

implementation and enforcement of the Proposed Rule to ensure that reliability is protected, and 

LaFleur has also noted the complexities associated with regional implications, which would 

require a lot of "work to help regional transmission organizations patch together state plans to 

ensure that states can comply with the rule while power generation is dispatched regionally". 

Commenters stated that SPP's comments filed on October 9, 2014 in response to the proposed 

rule and based on SPP's own evaluation are centered around a reliability impact assessment 

based on the EPA's plan. The commenters identified several of SPP's concerns including the 

SPP region will experience numerous thermal overloads and low voltage occurrences. The 

commenters also stated that based on the SPP's analysis, it is clear EPA has not adequately 

demonstrated the reliability of its Clean Power Plan and due to the shortcomings of the EPA's 

IPM modeling, EPA cannot demonstrate whether its Clean Power Plan is reliable. The 

commenters stated that EPA must rely on Regional Transmission Organizations and utilities to 

determine what changes to generation mix are feasible while still ensuring reliability of the 

electric grid. 
265 

Commenters stated that the organization supports NERC's conclusions and recommendations in 

the November 2014 report and reiterates that analysis must be performed to demonstrate electric 

system reliability before states commit to plans that include changes to their current generation 

portfolios. 

Commenters cited concerns from NERC, Edison Electric Institute, MISO, and SPP regarding 

retirements and shrinking reserve margins of coal-generated power and its impacts on reliability 

for various regions of the country. The commenters stated that electric grid operators in their 

region will be placed into a situation where an increasing amount of backup and emergency 

procedures are necessary to ensure the adequate supply of electricity. 

Commenters stated that several entities such as NERC, FERC, SPP, MISO and SO/RTO Council 

have examined the reliability impacts of the Proposal, and have found that it would exacerbate 

the reliability concerns that already exist due to the nation's transition from coal-fired generation 

to natural gas and renewables. The commenters stated some of the reliability concerns raised by 

NERC with regard to the four building blocks. The commenters stated challenges to reliability 

that would occur from the change in resource mix contemplated by the Proposal and that with 

greater reliance on natural gas, there are risks from the reduced diversity and increased reliance 

on a single fuel source. The commenters cited NERC's recommendations to ensure reliability 

including a Reliability Safety Valve, immediate coordination and meetings among EPA and state 

and industry planning and analysis groups, more time for implementation of the Proposal, and a 

"reliability back-stop" that would allow for greater timing readjustments and granting extensions, 

when needed. 

Commenters stated MISO performed an initial analysis of the Proposal and concluded that up to 

14 gigawatts (GW) of coal capacity could be at-risk for retirement in addition to the 10 to 12 GW 

expected to retire to comply with the MATS. The commenters stated that MISO already faces 

extremely tight reserve margins, increased probability of reliance on emergency operating 

procedures, and loss of load. The commenters noted that MISO called for removal of the interim 

compliance requirements and greater flexibility in any final rule to reduce reliability risks. 

Commenters stated that a FERC commissioner raised reliability concerns and indicated support 

for a RSV that also included cost as part of the reliability assessment. The commenters also 

stated that SPP recommended EPA provide more time for compliance with any final rule and 

include a RSV. The commenters also stated that AF&PA and AWC support adoption of an RSV, 

and the other mechanisms to reduce reliability risks discussed in this comment. 

Commenters referenced NERC's reliability impact study their concerns related to the CPP that 

are more impactful than prior environmental compliance programs due to the extensive impact to 

fossil-fired generation NERC's questioning many of the assumptions EPA used to support its 

economic impact analysis of the CPP. The commenters cited NERC who stated EPA's 

assessment of the potential coal plant retirements could be conservative, and that, if EPA's 

assumptions prove wrong, "developing suitable replacement generation resources to maintain 

adequate reserve margin levels may represent a significant reliability challenge, given the 

constrained time period for implementation". The commenters also wrote about NERC's concern 

about the CPP-induced shift from coal to natural gas and renewables for power generation. 
266 

Commenters stated that with respect to Building Block 1, the Initial NERC Report acknowledges 

that improving the existing coal generation fleet's efficiency by six percent "may be difficult to 

achieve." Commenters stated that it explains that EPA calculated unit-specific heat rates using 

gross generation data from the CEMS, thereby ignoring "generation-reducing effects from postcombustion environmental controls . . . .", and that EPA also used net-generation data, without 

considering the fact that these retrofits would reduce the net output and net heat rate efficiency of 

affected units. "Not considering these reductions creates an inconsistent approach, especially 

considering that most coal-fired EGUs will require control retrofits to comply with 

environmental regulations, such as [MATS] and Section 316(b) of the Clean Water Act." 

Commenters further stated that EPA also assumed that turbine overhauls would result in major 

heat rate improvements but "[r]egular turbine overhauls are generally not practical or 

economical" because they require units to be out of service for protracted periods, and that the 

notion that there are significant efficiencies to be obtained through overhauls also ignores the 

reality that generation owners have strong incentives to operate at peak efficiency, including 

profit incentives in FERC-regulated wholesale power markets. Commenters stated that, 

moreover, the Initial NERC Report notes that EPA fails to account for factors that have 

"profound effects on the process efficiency of a coal-fired EGU," including "(1) subcritical 

versus supercritical boiler designs; (2) fluidized bed combustion, integrated gasification 

combined-cycle (IGCC), and pulverized coal; (3) unit size and age; and (4) coal quality 

variations in moisture and ash (i.e., every 5 percent change in coal moisture results in a 1 percent 

change in boiler heat rate efficiency)." 

Commenters stated that in the November 2014 "Potential Reliability Impacts of EPA's Clean 

Power Plan" report, NERC stated: "NERC is concerned that the assumed improvements may not 

be realized across the entire generation fleet since many plant efficiencies have already been 

realized and economic heat rates have been achieved. Commenters stated that multiple incentives 

are in place to operate units at peak efficiency, and periodic turbine overhauls are already a best 

practice". 

Commenters stated that NERC pointed out a number of areas which EPA's analysis fails to 

account for that impact coal unit efficiency and ultimately have reliability implications: 1) 

factors including subcritical versus supercritical boiler designs, 2) fluidized bed combustion, 

integrated gasification combined cycle (IGCC), and pulverized coal, 3) unit size and age, and 4) 

coal quality variations in moisture and ash. 

Commenters stated that the NERC reliability study highlights faults with US EPA's regression 

analysis. Commenters stated that NERC also cites numerous problems with US EPA's regression 

analysis in building block 1. Commenters stated that the NERC Reliability Study states that US 

EPA fails to account for (1) coal-fired plant retrofits; (2) subcritical vs. supercritical boiler 

designs; (3) fluidized bed combustion, integrated gasification combined-cycle (IGCC), and 

pulverized coal; (4) unit size and age; and (5) coal quality variations in moisture and ash. 

Commenters stated that over time, the utilities will want to retire the coal plants that operate at 

low capacity factors, but that can be delayed until they can be made redundant by efficiency, 

renewables, new gas plants, CCS coal, nuclear, transmission, or other solutions. 

Commenters stated that some observers assume that the Plan would require shutdown of power 

plants required for reliability. Commenters stated that AEP CEO Akins said: 
267 

"I instructed my team here at AEP to run system planning and performance studies, typically 

known as load-flow studies that engineers use to plan and confirm the reliable operation of the 

grid. And I asked them to assume the EPA 2020 cornerstone assumptions and add generation 

that's included in the PJM queue. The results of those studies found widespread occurrences of 

voltage degradation, collapse, and in fact, cascading outages of the electric grid. These results are 

even before any contingency outages, such as loss of generation or transmission facilities. The 

Southwest Power Pool ran their own studies and confirmed the same results for their region of 

the country, which we also serve." 

Commenters stated that indeed SPP's presentation in Arkansas (October Presentation 4) claims 

as follows: “If CPP compliance begins before generation and transmission infrastructure is added 

[the region will experience] extreme reactive deficiencies of approximately 5,200 MVAR across 

SPP system, [which] will result in significant loss of load and violations of NERC reliability 

standards. During CPP compliance without additional transmission infrastructure, loading on 38 

facilities in SPP [would] exceed equipment ratings, some overloads would be so severe that 

cascading outages would occur, [resulting] in violations of NERC reliability standards. (Slide 11) 

By 2020, SPP's anticipated reserve margin would be 4.7%, representing a capacity margin 

deficiency of approximately 4,600 MW. By 2024, SPP's anticipated reserve margin would be -

4.0%, representing a capacity margin deficiency of approximately 10,100 MW”. 

Commenters stated that our nation's electrical power grid is interconnected and dependent upon a 

stable and constant flow of energy. Commenters said that regional power organizations such as 

the Southwest Power Pool (SPP) and the North American Electricity Reliability Corporation 

(NERC) are mandated by the Federal Energy Regulatory Commission to ensure reliable supplies 

of power, adequate transmission infrastructure, and competitive wholesale prices of electricity. 

Commenters said that several of these organizations have expressed serious concern with the 

impact of the rule. 

Commenters stated that they concur with NERC conclusions. Commenters stated that the 

interim goals provide a constrained time period for implementation to the point of being 

unrealistic and efforts to meet the interim goal will raise reliability concerns. Commenters stated 

that the heat rate improvements contained in Block 1 are unrealistic because heat rate 

improvements that are technically available already have been implemented. 

Commenters stated that the EPA should schedule technical conferences with FERC, NERC and 

the regional transmission organizations to fully evaluate potential impacts of the CPP on power 

grid reliability. 

Commenters stated that Section 215 of the FPA authorizes FERC to certify an electric reliability 

organization to develop and enforce mandatory reliability standards for the nation's bulk-power 

system, and further authorizes FERC to approve and enforce those reliability standards. 

Commenters stated that pursuant to this authority, FERC has certified the NERC as the electric 

reliability organization. Commenters stated that NERC and its various regional reliability entities 

now administer a comprehensive set of mandatory reliability standards subject to FERC's 

oversight. Commenters stated that the Proposed Rule acknowledges that reliability is an issue of 

concern, but ultimately rests on a conclusion that it provides sufficient flexibility to avoid 

reliability concerns. 
268 

Commenters stated that EPA has not adequately consulted with FERC or NERC regarding its 

conclusion on the potential reliability implications of the Proposed Rule or other issues related to 

NERC's reliability standards approved by FERC. Commenters stated that there is every 

indication, however, that the massive changes in generation dispatch that the Proposed Rule 

would require will lead to conflicts between EPA's policies and NERC's reliability standards. 

Commenters stated that EPA contravenes Section 215 of the FPA by supplanting FERC as the 

ultimate authority over the reliability of the bulk-power system. 

Commenters explained the process by which the Arizona Cooperation Commission monitors 

readiness of facilities to meet energy demands, and address issues of quality and reliability. The 

commenters stated that the EPA's proposal will overtake well thought out existing state processes 

designed to ensure reliability electric service to customers, and jeopardize reliability of the grid 

and electric service in the state. 

Commenters claimed that the EPA did not consider reliability in their analysis for the CPP. 

Commenters stated that the requirement to redispatch NGCC units to achieve a 70% capacity 

factor may require significant transmission upgrades that are necessary to maintain system 

reliability. The commenters referenced the NERC's and SPP's Reliability Impact Assessments of 

the CPP, NERC's report published in November 2014, entitled "Potential Reliability Impacts of 

EPA's Proposed Clean Power Plan" and SPP's assessment published October 2014. Commenters 

referred to the FERC's reliability standards. 

Commenters stated, EPA's assumption that the Proposed Guidelines' emission reductions could 

be achieved on the contemplated timetable without significant negative impacts on electric 

reliability and reliability markets is contradicted by independent expert analyses. Commenters 

extensively referenced the "Initial NERC Report" and also noted some other expert analyses. 

Commenters said, these detailed comments are related to the "arbitrary and capricious" issue but 

are more specifically related to technical concerns of electric system reliability and so are 

presented in section 8.10, Reliable affordable electricity. 

Response 39: Since issuing the proposed rule, EPA has held many discussions concerning the 

potential reliability concerns with the proposed rule, and has modified the proposal to address 

reliability in this final rule. On reviewing the comments that appear throughout this section, 

EPA notes that some comments on reliability express concerns that the rule will adversely 

impact reliability, while others do not foresee such impacts, and some see benefits in terms of 

modernizing the generation fleet. EPA believes that reliability can be addressed in the state 

planning process in ways that will ensure that conflicts with reliability requirements and 

compliance with this final rule will be very unlikely, and also provides a Reliability Safety Valve 

mechanism in the event of such unlikely and unanticipated occurrences. See section VIII.G.2 of 

the preamble for the final rule for a discussion of electric reliability and for the important 

provisions on reliability in this rule. 
269 

Comment 40: Multiple commenters discussed reliability concerns with the proposed rule. 

Commenters stated that the timing and scale of the expected changes needed to reach the CO2 

emission goals could have a harmful impact on grid reliability given current regional market 

designs and existing transmission infrastructures. The commenters stated that there is a limit to 

how fast compliance can be achieved within applicable reliability criteria and that resource mix 

changes will force the following reliability impacts: retirement of up to half of existing coal 

capacity in the ERCOT region and an associated loss of dispatchable generation capacity, 

increased challenges to integrate renewable resources and the associated costs to procure 

additional regulating services, improve forecast accuracy, and address system inertia issues, 

improvements in transmission systems to integrate resource mix changes, and changes to energy 

market design and their associated costs. The commenters stated that the final rule must include a 

process to effectively manage electric system reliability issues and a more flexible 

implementation timeline to address each state's or region's unique market characteristics. 

Commenters stated that the proposed rule could jeopardize the security of ancillary services, a 

crucial element to reliability in ERCOT system, due to additional renewables on the grid. The 

commenters further explained that because the five-minute dispatch in ERCOT does not insure 

that appropriate resources are available to balance system generation and system load, ERCOT 

procures ancillary services to ensure that sufficient resources with necessary characteristics are 

available to balance any additional variability and to maintain system frequency through a 

variety of potential conditions, including unit trips, large up or down ramps, and ensuring enough 

capacity is available. The commenters noted that NERC also recognized this issue in its 

reliability assessment report and provided supporting text from the report noting ERSs' role in 

load and resource balance, voltage support and frequency support that may be impacted by a 

changing resource mix. 

Commenters stated that "EPA, [in] its own words, merely assumed that adequate transmission 

capacity would be available to deliver resources seamlessly and reliably. However, this 

assumption may not even be valid for the system that will exists in 2016, after all MATS 

retirements have occurred, and certainly cannot be assumed to be the case once all other 

recommended changes introduced by the CPP take place." 

Commenters stated that EPA's assumption that transmission is adequate within or between 

regions is flawed and unsubstantiated. The commenters discussed the results of AEP's 

preliminary power flow analyses for the transmission systems in PJM and SPP based on EPA's 

modeled unit retirements in 2020 and stated that the analyses identified severe, widespread 

reliability concerns such as thermal overloads, low voltages, and voltage collapse leading to 

cascading outages. The commenters noted that the study results are likely to be conservative 

because they did not include an analysis of inter-regional impacts or the effects of adding 

substantial amounts of new renewable generation. The commenters anticipated that the reliability 

issues identified would require significant upgrades to the transmission infrastructure to maintain 

system reliability, accommodate new generation, and to support the dispatch of the system in a 

manner significantly different from historical operations. 

The commenters also noted that the study's reliability analysis showed significant reliability 

problems within many of the 64 IPM model regions and the assumed ratings of the interfaces 
270 

between the IPM regions are negatively impacted by the changes to the generation fleet. The 

commenters added that these interface ratings are established using power flow models and often 

are limited by voltage limitations as opposed to transmission line capacity, and that AEP's 

analysis shows that the capacity of key interfaces within PJM could be reduced by as much as 

20% due to a reduction in voltage support following retirement of coal generating plants. 

Commenters recommended that at a minimum, RTOs should facilitate development of 

transmission upgrades necessary to sustain reliability and ensure the integrity of the transmission 

grid is maintained during the implementation period. 

Commenters stated that the proposed rule could negatively impact large industrial customers due 

to reliability risks stemming from the proposed rule and other recent regulatory burdens. The 

commenters cited reliability concerns of NERC, SPP and ERCOT. 

Commenters discussed reliability concerns associated with the 120 gigawatts of installed coal 

capacity due to be retired as a result of the previous and proposed rules and stated that replacing 

this amount of installed capacity cannot be done with intermittent renewable sources alone. The 

commenters noted that events such as the polar vortex may overwhelm infrastructure without 

coal-fired plants if enough natural gas is unable to be secured like previous events. 

Commenters also discussed reliability and cost concerns associated with the proposed rule during 

extreme events. Commenters further stated that the proposed rule does not account for 

infrastructure challenges associated with redispatching, and stressed the importance of coal fired 

plants in maintaining fuel diversity and hedging against price volatilities that disproportionately 

impact low and fixed income citizens. 

Commenters stated that the difference between previous rules and the proposed rule is that the 

power grid's fuel flexibility and choice was maintained under previous actions, whereas the 

proposed rule will displace fuel sources and upset reliability and cost-effectiveness. 

Commenters also stated concerns with the affordability and reliability impacts of the proposed 

rule. 

Commenters stated the proposed EPA rule considers only the adequacy perspective of the 

reliability impact of the rule and does not address the potential thermal, voltage, or frequency 

impacts. The commenters further stated that the rule does not consider the associated potential 

transmission economic implications of additional facilities required to ensure operational 

reliability or financial implications of stranded transmission investments that become 

underutilized as a result of the change in system power flows. 

Commenters also stated that constructing new facilities requires outages on existing facilities, 

which are increasingly difficult to schedule, and coordinating outages across many systems that 

are attempting to simultaneously develop new transmission facilities will be challenging and 

likely result in increased congestion costs and longer lead times to commission the new facilities 

as sequencing of outages will be required. The commenters noted that most of the transmission 

reliability considerations can be mitigated with additional investments in transmission 

infrastructure, but the impact of these costs and timing of these facility upgrades on reliability 

during transitional periods should be considered as part of the proposed rule. 
271 

Commenters stated that under Clean Power Plan conditions and forecasts, it should be prudent 

for EPA to provide leeway for states, for Regional Transmission Organizations (RTOs), and the 

various Independent System Operators (ISOs) to incorporate into EPA's Clean Power Plan 

safeguards that better protect the reliability of the bulk power system and the resiliency of the 

bulk power system. The commenters stated that EPA needs to consider transitional precautions, 

such as retaining some of the inactivated coal-fired generating units in New England as 

emergency, or "black start" reserves, to prevent long term regional grid outages during the 15-

year (2015-2030) EPA Clean Energy Plan transition. 

Commenters stated that EPA Clean Power Plan is based upon a rationale that needs to include 

greater robustness to cope with emergency grid outages. The commenters stated that NERC 

conducted a review of the EPA Clean Power Plan and found greater reliance on natural gas-fired 

generation and long distance electricity transmission are likely results of the EPA plan, as well as 

challenges to reliability. The commenters also provided quotations from a FERC commissioner 

on planning for gas-electric interdependence as well as findings of the Lincoln Laboratory at 

MIT that the electricity generation system has become increasingly dependent on the operation 

of the natural gas system. 

Commenters stated the central issue with the NOPR is that EPA has not adequately assessed its 

impact on the reliability of the electricity grid and that the rule would have significant adverse 

impact on grid reliability. The commenters further stated that EPA's failure to fully and properly 

assess and account for the NOPR's impact on grid reliability puts at risk the economic viability 

of thousands of manufacturing facilities in the United States that are interconnected to their 

utilities at transmission voltages. The commenters provided examples of the economic effects of 

power outages on the industrial sector. 

Commenters referenced NERC's November 2014 report, which identifies concerns related to the 

changes in resource mix and the consequent reliability issues that would be forced by the NOPR. 

The commenters further stated the NERC found that the NOPR would constrain the availability 

of Essential Reliability Services resulting from the intermittent nature of Variable Energy 

Resources ("VERs") such as wind and solar. The commenters also noted that NERC indicated 

that the number of estimated retirements identified by EPA "may be conservative if the 

assumptions prove to be unachievable. Developing suitable replacement generation resources to 

maintain adequate reserve margin levels may represent a significant reliability challenge, given 

the constrained time period for implementation. The commenters further noted the NERC 

warned that increased penetration under the NOPR of so-called Distributed Energy Resources 

("DERs"), which most commonly are roof-top photovoltaic arrays, will pose significant 

challenges to system operators because this resource cannot be dispatched and is generally 

invisible to the operator. 

Commenters stated that the compliance with the proposal for reductions in CO emissions by 

almost 30 percent will directly cost the state by increased energy rates, loss of jobs in industry, 

and a negative impact of less in energy reliability. The commenters further stated that the U.S. 

Chamber of Commerce predicts that the compliance cost of these new regulations will be $28 

billion each year to 2030, which is a cumulative total of nearly $480 billion. The commenters 

noted this is three times larger than EPA's estimate and rising electric rates would damage our 
272 

gross domestic product (GDP), with the loss in GDP to be $50 billion per year and peaking at 

$100 billion in 2025. 

Commenters stated that energy reliability could be jeopardized because these rules will remove 

coal from the energy mix and reduce the overall amount of power generation available and that 

their nursery business cannot continue our record of successful business with rolling blackouts or 

brownouts and plants that rely on irrigation would not survive. 

Commenters stated that by eliminating diversity in fuel choices, this rule creates the potential of 

future electricity shortages and price spikes that would do great harm to those who can least 

afford it: hardworking American consumers. 

Commenters stated that this past winter provided a clear warning that our bulk power system is 

close to the edge of breaking, and additional power plant retirements induced by EPA rules 

would push it over the edge. The commenters stated businesses and families in many parts of the 

country paid unprecedented high prices for electricity. The commenters stated that coal based 

power plants supplied 92 percent of the incremental demand for power this winter. 

Commenters stated that an analysis performed by the Energy Ventures Analysis shows that 

wholesale power prices will rise 27 to 55 percent across different regions of the country, with no 

state spared, and businesses and households paying $35 billion more for natural gas. The 

commenters continued that EPA's assessment of the economic impacts of its rules inspires little 

confidence in the estimate that would cause less than 5,000 megawatts of power capacity to 

close. The commenters stated that it will likely be 10 to 12 times more. 

Commenters stated that there are few definitive answers about how this rule can actually work, 

that the cost and risks are real, but the benefits are not. The commenters further stated that 

residents' economic and energy security are put at great risk, control of their electricity and 

energy supplies and infrastructure surrendered, and their state's full potential for economic 

growth forfeited. 

Commenters expressed concern about the reliability risks that are created by the proposal and the 

proposal needs to be carefully analyzed before anything like this is adopted. The commenters 

stated that EPA's proposal clearly increases the risk that our electricity supply will be less 

reliable and that EPA's own analysis suggests that roughly a third of the generation fleet will be 

retired between 2020 and 2030. 

Commenters stated that EPA has not made any serious attempt to consider the practical and legal 

difficulty of getting all the approvals necessary to build not only new power plants, but also the 

transmission lines and pipelines that will be necessary for those plants. The commenters further 

stated that extreme weather conditions may expose people who are most vulnerable to energy 

shortages and blackouts. 

Commenters stated EPA claims that it has looked at the 18 reliability impacts. The commenters 

claimed EPA doesn't have expertise in this area, and there has been no consultation between 

EPA and those who really are responsible for reliability, especially those at FERC. 
273 

Commenters stated given their experience with MATS those numbers could become far worse 

and closing so much coal so fast threatens the reliability of the nation's electric grid, creating the

potential for widespread blackouts and brownouts during periods of peak usage. The commenters 

noted that during the recent polar vortex 90 percent of American electric powers coal plants 

scheduled to be closed under MATS were used to generate electricity and that PJM, a regional 

transmission authority operating in the Mid-Atlantic and Eastern Midwest reportedly came 

within 700 megawatts of being unable to meet electricity demand. 

Commenters stated the implementation of the proposed rule would cause serious economic 

harm, reduce energy diversity, increase electricity prices, jeopardize grid reliability, result 

in major job losses, hinder coal technology advances, and fail to achieve the administration and 

EPA's goal of global leadership on CO2. 

Commenters stated that the discussion needs to include the critical importance of the reliability 

of our electricity supply. The commenters stated that coal is, from all accounts, the most reliable 

fuel source to generate electricity on this plan[e]t and as Americans we take it for granted how 

reliable our electricity is. The commenters noted that in many cases it is literally a life giving 

and sustaining resource and for [EPA] to tamper with the reliability of electricity by forcing the 

switch to less reliable fuel sources is wrong-headed and simply dangerous. 

Commenters stated that the reliability risk created by this proposal are significant and need to be 

analyzed carefully prior to the adoption of climate change policies at the federal and state level. 

The commenters further stated that EPA's building blocks require the states seeking EPA 

approval to reconfigure how electricity is generated and how it is dispatched. The commenters 

stated that at the end of the process the proposal promises that almost a third of the existing coal 

fired generation fleet will be retired between 2020 and 2022 and that these plants currently 

provide electricity that sustains our economy and the health and well-being of our citizens. The 

commenters noted that when these plants are shuttered, our electricity supply will be entirely 

dependent on EPA predictions about energy efficiency and the growth of costly underdeveloped 

alternative energies. 

Commenters stated that EPA is not in the best position to craft reliability policies, and EPA has 

never been tasked with this authority by Congress. The commenters stated that the most effective 

reliability policies result from the careful coordination between the federal energy regulatory 

commission, state and regional regulators, reliability organizations and other stakeholders, and 

under this proposal, EPA would be given the power to trump their decisions by approving or 

disapproving state energy policies. 

Commenters provided a review of available generation sources as an argument about reliability 

of coal and stated that coal accounts for 38 percent of the electric power generated, which is 

1340 terawatts per hour, and the overall demand is expected to grow by 15 percent by 2030. The 

commenters summarized the status of nuclear energy, noted that the current pipeline 

infrastructure for natural gas cannot support the required growth to cover the loss of coal, 

production of solar panels is not economical due to global oversupply, and wind produced less 

than 3% of the current need. The commenters noted that energy production by solar and wind 

are weather dependent. The commenters also identified what other energy sources could replace 
274 

coal, including biomass and algae, which are still in early stages and ethanol, which costs 3 

dollars for every dollar's worth of fuel. 

Commenters stated that closing coal plants and increasing the amounts on natural gas for 

generation are adversely impacting reliability, affordability and supply. The commenters noted 

that American Electric Power relied on over 89 percent of its coal fired capacity from sources 

slated to close in April 2015 to meet the demand during the "polar vortex", and the Southern 

Company relied on 75% of its announced closures. 

Commenters stated concerns about the loss of jobs due to the EPA's proposed Clean Power Plan 

and estimates that the Clean Power Plan could kill 52,000 direct jobs and more than 100,000 

associated positions by the year 2020 and EPA projects that this rule will cause the loss of 41 to 

49 gigawatts of coal-generating capacity by the year 2020. The commenters noted that these 

retirements are in addition to the 92 gigawatts of coal capacity that the EPA is already projecting 

will shut down between 2012 and 2020, due in large part to the compliance with the 2012 

Mercury and Air Toxic Rule. The commenters stated that these things raise serious, serious 

concerns for the reliability of the electric power supplies and that gas alone is not the answer. 

Commenters recommended that the proposed rule provide credit to states that have already 

reduced carbon emissions to help meet EPA targets and also a delay in the implementation of the 

Clean Power Plan to give states and utilities adequate time to implement compliance with these 

strategies. 

Commenters stated that one of the keys to achieving those goals is maintaining a stable electric 

grid that delivers reliable and affordable power, but the electricity service that we take for 

granted is under stress from market dynamics, from inadequate transmission infrastructure, from 

too few new power plants that we need for supply, and new federal regulations. The commenters 

further stated that the federal government does not have a plan to ensure the stability of the grid 

and instead, has taken a series of piecemeal and ad hoc actions without a complete understanding 

of how they all interact together and impact the grid. 

Commenters stated that this country's course on the electric grid is unsustainable and 

recommended to stop ad hoc regulation and changes to the electrical system, to appoint a task 

force with representatives from the EPA, Department of Energy, the Nuclear Regulatory 

Commission, the Federal Energy Regulatory Commission, plus regional transmission operators, 

electric generator companies, and others to develop a comprehensive, integrated cross-functional 

national grid policy and an action plan that will help to ensure an adequate, affordable, and 

reliable electric grid. 

Commenters stated that they believe the EPA's expedited timeline to replace Florida's baseload 

coal generation with natural gas and intermittent renewables has serious implications for the 

reliability of Florida's electric grid. The commenters made several points to support the 

conclusions: first, under normal circumstances it takes more than 5 years to plan, permit, and 

construct a natural gas combined-cycle plant, which is the only new baseload capacity that can 

be added within the CPP's timeline; second there is the question of whether there will be enough 

pipeline capacity in Florida to supply natural gas to all of the new generators that would be 

required by the CPP. The commenters stated that reliability issues must be fully evaluated 
275 

before the CPP can be adopted and this must be coordinated with the states and federal agencies 

that have exclusive jurisdiction over the reliability of the electric grid. 

Commenters stated that the CPP appears to usurp the authority of FERC and NERC even though 

Congress clearly has granted this responsibility to the FERC and the states, and has not granted 

any such authority to the EPA. The commenters noted that both FERC and NERC have 

expressed concerns about the CPP. 

Commenters stated that the reliability of the electric grid is vital to the health, safety and 

wellbeing of everyone in the United States and to our economy, and reliability issues must be 

fully vetted with the states and with PERC before the EPA issues its final rule. 

Commenters stated that compliance with the emission limits contained in the proposed rule has 

the potential to raise electric system reliability concerns associated with the shutdown of coalfired generating units. The commenters further stated that the transmission system is planned and 

built to ensure reliable delivery of system resources to identified load centers and all of the 

planning work is performed in accordance with NERC planning standards. 

Commenters stated that transmission planning analysis focuses on a future horizon that allows 

sufficient lead time to complete corrective measures before the identified issues can occur and 

that the corrective measures are chosen based on cost effectiveness. The commenters identified 

a concern expressed by NERC with the transmission and timing constraints that EPA's proposal 

ignores. 

Commenters stated that when generating resources are affected by new environmental 

regulations, and compliance with those regulations affects continued operation of those 

resources, the approach to compliance must recognize that any resulting changes to generating 

resource operation, up to and including possible shutdown of that resource, will affect the pattern 

of system flows on the transmission system and potentially have a negative impact on 

transmission system reliability. The commenters stated that significant changes to the pattern of 

power flows could result in cascading outages or voltage collapse under contingency conditions 

that were not considered in the original planning if there is not sufficient time to implement 

corrective measures on the transmission system. 

Commenters stated the real impact to a specific system cannot be known without study of the 

specific effects of proposed environmental regulation on the generation fleet. The commenters 

further stated assumptions cannot be made as to whether or not there will be a serious impact 

without completion of a transmission planning analysis based on the best estimate of generation 

impacts, and it would be imprudent to establish a compliance deadline for the environmental 

regulation without consideration of the transmission reliability effects. 

Commenters stated the proposed regulations will push the system over the brink and trigger 

rolling blackouts during times of peak electricity demand in the winter and summer. 

Commenters stated that the rule would substantially reduce the use of coal fired generation. The 

commenters listed some of the advantages of using coal. The commenters stated that the rule 

would increase dependency on natural gas, which is delivered in real time and not stockpiled like 
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coal, for power generation. The commenters further stated that the rule would also increase 

reliance on renewable energy, which can be very expensive and is also unreliable. The 

commenters stated that grid reliability problems lead to electricity curtailments of manufacturing 

facilities that can cost small manufacturers tens of thousands of dollars a day, and large 

manufacturing companies tens of millions of dollars a day and is especially troublesome during 

peak demand periods. 

Commenters stated we have the energy resource to continue to provide cheap and efficient 

power, yet we throw it all away for hope and a prayer. The commenters stated that this policy 

will simply not be sustainable when fully implemented and no one can tell what the actual 

impact will be on the power grid that cannot react to immediate increased power needs on a 

lower scale. The commenters also stated it is certain wind and solar cannot meet any of these 

instantaneous demands and if we continue to travel down this road towards energy deficiency, 

somebody had better written another rule to determine power rationing. 

Commenters stated that several organizations that are responsible for electric reliability or 

efficient grid operation have expressed serious concerns about the proposed rule's threat to on 

electric reliability. The commenters identified these organizations include the North American 

Electric Reliability Corporation, the Southwest Power Pool, the Midcontinent Independent 

System Operator, and the Electric Reliability Council of Texas. Part of the concern expressed by 

these organizations is the short period of time EPA proposes between approval of state 

compliance plans and the substantial CO2 reductions required during the first years of the 

CPP. The commenters noted this front-loading of the CO2 reduction requirement has the effect 

of requiring states to achieve, on average, 75 percent of the total reductions required during the 

first 10-year implementation period (2020-2029) there is simply not enough time to achieve 

these reductions due to the limited opportunity to build out the additional generation capacity and 

natural gas and transmission infrastructure that would be necessary. 

Commenters stated that to assure the reliability of the electric grid, NERC and the various other 

regional transmission authorities must have an opportunity to evaluate the potential reliability 

impacts of state plans. The commenters stated further that due to the interconnections of the 

electricity grid across state boundaries, a comprehensive evaluation of potential reliability 

impacts can be accomplished only after all state plans are finalized. The commenters stated that 

this is not possible under the compressed schedule as currently proposed nor does the proposed 

schedule allow enough time for transmission operators to begin the design and permitting 

process for new infrastructure. 

Commenters stated that independent, third-party studies in Georgia project that the CPP alone 

will cause significant increase in electricity prices for all Georgia consumers. The commenters 

stated that NERA Economic Consulting projects that the CPP alone will cause a 12-13% increase 

in retail electricity prices and the National Mining Association estimates similar impacts, 

including a peak year wholesale electricity price increase of 15.5% for Georgia consumers. The 

commenters noted that the CPP will dramatically increase electrical grid stress and reliability 

challenges. 

Commenters stated that NERC reviewed EPA's rule and concluded that the agency's proposed 

regulatory deadlines "would increase the use of controlled load shedding and potential for wide-
277 

scale, uncontrolled outages" and the impact of the January 2014 polar vortex had on energy 

markets further demonstrates the importance of a diverse electricity power fleet. 

Commenters stated it is imperative that these cost and reliability concerns be addressed, and 

accordingly, respectfully requests that EPA work with economic and reliability experts, states, 

and industry stakeholders to undertake a detailed, comprehensive analysis of potential cost and 

reliability impacts of the CPP before it is finalized. 

Commenters stated that EPA has not adequately considered or explained its determination that 

the proposed rule will not affect electric grid reliability and that rather than conduct a sufficient 

review of reliability issues, the EPA flatly dismisses them. The commenters provided several 

(cited) quotations from several documents to support the position. 

Commenters stated that EPA's dismissal of these serious reliability concerns cannot be 

explained. The commenters stated that FERC has raised significant concerns with the proposed 

rule that the EPA appears to ignore. The commenters stated EPA claims that it has met on 

several occasions with staff from FERC and the Department of Energy to discuss EPA's 

approach to the rule and its potential impact on the power system but EPA does not indicate 

what, if any, position FERC or DOE staff has taken with respect to these critical issues. The 

commenters stated that moreover, the EPA appears to have ignored critical reliability 

observations made by FERC Staff and noted some of the correspondence between EPA and 

FERC. The commenters stated that regarding infrastructure development needed to meet the 

requirements of building blocks 2 and 3, FERC's Office of Electric Reliability alerted the EPA 

that such development could lead to significant costs for new pipelines and transmission. 

Commenters stated several concerns by NERC, and among other things, that the proposed rule 

introduces potential reliability concerns that are more impactful than prior environmental 

compliance programs due to the extensive impact to fossil-fired generation. The commenters 

also noted NERC's concern that a number of studies and analyses must be performed to 

demonstrate reliability, and industry must closely coordinate with the states to ensure the SIPs 

are aligned with what is technically achievable within the known time constraints. The 

commenters stated that NERC also raised significant concerns about the EPA's analysis (or lack 

thereof) of the four building blocks. The commenters provided brief comments about each of the 

building blocks. 

Commenters stated that similar concerns have been raised by other organizations that have 

evaluated the impacts of the proposed rule on their service territories. The commenters stated 

that SPP found that serious, detrimental impacts on the reliable operation of the bulk electric 

system in the SPP region and that it is clear that the proposed rule will impede reliable operation 

of the electric transmission grid in the SPP region. The commenters further stated that ERCOT 

performed an analysis of the proposed rule and warned that, if implemented, the rule is likely to 

lead to reduced grid reliability for certain periods and an increase in localized grid challenges as 

well as have a significant impact on the planning and operation of the ERCOT grid. 

Commenters stated implementation of the Proposed Rule as it is currently structured will 

negatively impact reliability in the MISO region by forcing retirements of baseload coal plants 

earlier than they would have otherwise ceased operating. The commenters stated further that 
278 

relative to an analysis in which the Proposed Rule is not implemented, EPA projects in its RIA 

that about 30 to 49 gigawatts of coal-fired capacity is projected to be uneconomic to maintain 

(about 12 percent to 19 percent of all coal-fired capacity projected to be in service in the base 

case) by 2020. 

Commenters stated that compliance with the proposed rule will threaten the reliability of 

electricity generation and the reliability of electricity delivery to manufacturers. The commenters 

said conventional fossil fuel generators and hydro provide many essential reliability services, 

including frequency response, voltage support, reactive power operating reserves and ramping 

capability to ensure that high-quality power is always available to manufacturing customers, as 

well as others. The commenters said, with the exception of hydro, zero-emissions sources such 

as wind and solar, which are contemplated under EPA's plan to at least partially supplant 

generation lost due to retiring coal plants, generally cannot provide these services in the same 

way. The commenters said more fossil-fueled generators (mostly gas-fired) will need to be kept 

on standby or operated part-loaded to provide important reliability services, which will increase 

capital, operating and maintenance costs throughout the electric generation industry. 

Commenters stated that EPA may want to consider the potential impact of the Proposed Rule on 

grid reliability. The commenters stated that as a company with large, energy intensive 

manufacturing facilities in the U.S., reliable electricity is critical and power outages have severe 

economic impacts. The commenters stated they develop contingency plans to prepare for these 

outages in their facilities and that these plans, along with investments in alterative electricity 

supply options, are costly. The commenters asked EPA consider the severe impact of outages 

and the importance of grid reliability to U.S. manufacturers in developing the final Clean Power 

Plan. 

Commenters stated that MISO estimates that within MISO 14 GW of coal units will be retired as 

a result of the CPP, on top of the 12.6 GW retired due to MATS. The commenters stated that 

MISO projects that it will be short on capacity as the CPP is implemented and that energy will 

have to be imported to meet peak demand; however adjacent systems will also be impacted by 

the CPP meaning additional energy may not be available for import. The commenters stated that 

MISO and similar energy markets operate based on reliability-centered economic dispatch of 

resources and since 2003 MISO has approved $20.6 billion in reliability-centered projects. The 

commenters stated that changing the dispatch parameters may reduce the value of the previous 

infrastructure investment and the proposed CPP forces a fundamental change by requiring 

environmental dispatch of resources without consideration of reliability or economic impacts. 

Commenters stated that numerous studies and analyses of the CPP have been conducted and 

these studies uniformly conclude that the CPP, as proposed, will negatively impact the reliability 

of the rural electric power supply. The commenters stated that EPRI explained in its comments 

on the CPP that if the levels of RE, nuclear credits, and EE (Building Blocks 3 & 4) 

contemplated by the proposed CPP are not achieved, power generators may be forced to choose 

between compliance and reliability, resulting in a shortage of electricity if the CPP is not 

properly implemented. The commenters stated further that comparable findings were made by 

NERC in its reliability study. 
279 

Commenters stated that in the proposed CPP, EPA is taking an unprecedented approach to 

environmental regulation and that EPA is directing utilities how to generate electricity. The 

commenters stated that because the proposed CPP places severe restrictions on utility operation, 

and because it impacts nearly all power generation in a relatively short time frame, impact on 

grid reliability will be greater from the CPP when compared to prior environmental regulation 

programs. 

Commenters provided an example in which the CPP's EE goals far exceed recent trends and 

projections included in reports and analysis conducted by NERC, the Energy Information 

Administration (EIA), EPRI and various utilities. The commenters stated if a state cannot meet 

the EE goal, offsets in the form of coal retirements may be required. The commenters stated that 

separate pending EPA regulations could also require some coal units to be retired, which would 

cause additional strain on the system and could negatively impact reserve margins and 

reliability. 

Commenters stated that according to a study by IHS Energy, several states in the North Central 

region face significant compliance gaps between their assigned CPP emission rate goals (both 

interim and final 2030). The commenters presented IHS calculations of the compliance gaps for 

several states. The commenters stated that accomplishing the EE goals and obtaining RE 

alternatives is highly unlikely, therefore, the primary compliance action would be eliminating 

enough coal-fired generation to meet EPA's proposed goal. The commenters stated that the IHS 

energy report indicates that reliance on coal-fired generator retirements as the compliance 

mechanism would mean significantly reducing the amount of coal-fired generation. 

Commenters stated that NERC's studies show that as variable sources of energy generation 

increase, maintaining voltage stability becomes challenging. The commenters stated further that 

coal-fired generators are able to respond automatically to frequency changes, provide operating 

reserves ramping capability and disturbance performance, and that RE sources are not similarly 

capable of. The commenters stated that NERC concluded that the RE goals established in the 

CPP may overestimate reasonably achievable expansion levels for RE sources and do not fully 

reflect reliability consequences of RE sources. The commenters stated that FERC is also 

concerned the CPP will hamper reliability of the energy grid and that FERC commissioners' 

testimony makes clear that the agency is gravely concerned about impacts that the proposed CPP 

will have on grid reliability. 

Commenters stated that studies and analyses undertaken by, and on behalf of, numerous rural 

electric cooperatives all reached the same conclusion: the reliability of the power supply grid will 

be significantly harmed by the CPP's proposal to retire numerous EGUs, nor does the CPP 

provide adequate mechanisms to successfully replace these lost power sources with NGCC, RE 

or through reduced demand in the form of EE. 

Commenters summarized the findings of the NERC's November 2014 major conclusions: 

• The number of estimated retirements identified in EPA's proposed rule may be 

conservative if the assumptions prove to be unachievable; developing suitable 

replacement generation resources to maintain adequate reserve margin levels may 

represent a significant reliability challenge. 
280 

• The assumed improvements in heat rates may not be realized across the entire 

generating fleet. 

• Increased natural gas use will require pipeline expansion to maintain a reliable 

source of fuel, particularly during the peak winter heating season. 

• With such aggressive energy efficiency expansion, the EPA assumes that energy 

efficiency will grow faster than electricity demand, with total electricity demand 

shrinking after 2020. If the EPA-assumed energy efficiency growth rate cannot be 

obtained, additional carbon reduction measures would be required. 

• State and regional plans must be approved by EPA which is anticipated to require 

up to one year leaving as little as 6 months to 2 years to implement the approved 

plan. Areas that experience a large shift in their resource mix are expected to 

require transmission enhancements to maintain reliability. 

Commenters concluded that based on the Initial Reliability Review, it is apparent that EPA did 

not fully consider the serious reliability impacts of the proposed CPP rule and that many of the 

NERC reliability concerns could be ameliorated by extending the initial, interim and final 

compliance goal deadlines for the rule to account for NERC and industry reliability concerns. 

Commenters stated that separate studied by independent parties (NERA Economic Consulting 

and Energy Ventures Analysis) will cause increases in retail electricity prices ranging from 12% 

to 31%. The commenters stated that independent experts and key stakeholders are increasingly 

alarmed that the CPP will dramatically increase electrical grid stress and reliability challenges. 

The commenters stated that NERC's review of EPA's rule would increase the use of controlled 

load shedding and potential for wide-scale, uncontrolled outages. The commenters stated further 

that the impact that the January 2014 polar vortex had on energy markets further demonstrates 

the importance of a diverse electricity power fleet and how further federal regulations aimed at 

limiting fuel options could threaten the nation's electrical grid. 

Commenters stated that EPA work with economic and reliability experts, states, and industry 

stakeholders to undertake a detailed, comprehensive analysis of potential cost and reliability 

impacts of the CPP before taking any further action on the proposal. 

Commenters stated that the CPP will reduce the reliability of electricity to consumers because it 

forces dramatic reductions in the use of some of the more highly reliable forms of generation, 

including early retirement of conventional generating units, and potentially forces limits on the 

hours of operation, while requiring the increased use of less reliable and more expensive 

renewable energy generation. 

Commenters stated that the rule also poses a threat to electric reliability and that nationwide, 132 

gigawatts of generating capacity is projected to retire between 2016 and 2020, of which 68 GW 

is directly attributable to the Clean Power Plan, while in Colorado, 645 megawatts of fossil fuel 

electric generating capacity is projected to retire, and it is uncertain if Colorado, and neighboring 

states similarly impacted, can afford to lose this capacity. 
281 

Commenters stated that the Edison Electric Institute cautioned that, "The dynamics of 

compliance, under circumstances of any unexpected shortfall in the non-emitting resources 

required for compliance, creates the risk of multi-state compliance failures that would disrupt 

interstate power flows." The commenters also noted comments by the FERC Commissioner 

warned that the rule threatened the 15-State MISO footprint. The commenters provided further 

comments from other RTOs and electric power companies: the Southwest Power Pool, a regional 

transmission organization spanning eight states, warned that the Clean Power Plan 

"introduce[ed] the very real possibility of rolling blackouts or cascading outages"; the CEO of 

Southern Company, which services a multistate region in the southeast, said that "I don't think 

we have the ability to maintain a reliable system"; and ERCOT, the independent service operator 

that maintains Texas's grid, warned the rule "could result in transmission reliability issues due to 

the loss of generation resources in and around major urban centers." The commenters also stated 

that the proposal would have serious consequences for Colorado and its citizens. 

Commenters stated that these dangers potentially could have been avoided if EPA had included a 

safety valve in its plan, and if EPA had not proposed to require states to make dramatic cuts in 

GHG emissions by 2020, front-loading compliance burdens through a rapidly approaching date 

that does not provide adequate time for states to make the major planning decisions necessary to 

comply. 

Commenters stated the Proposed Rule threatens reliability of electricity for their Members. The 

commenters stated that MISO has expressed growing concern of the effect on reliability caused 

by multiple environmental regulations. MISO is already anticipating impacts from MATS that 

include significant coal retirements, increased challenges with outage coordination, shrinking 

reserve margins, and a growing dependence on natural gas. The commenters stated that MISO's 

goal is to maintain a reserve margin of 14.8% and that the Proposed Rule significantly adds to an 

expected shortfall resulting in the reserve margin falling to -3.3% in 2020 and -11.8% in 2023. 

Commenters stated that numerous studies and analyses of the Proposed Rule have been 

conducted by (and on behalf of) rural electric cooperatives, concluding that that the Proposed 

Rule will significantly impact the reliability of the rural electric power supply. The commenters 

stated that comparable findings were made by NERC, concluding that the projected energy 

efficiency (EE) goals will lead to reliability issues and that the EE goals far exceed recent trends 

and projections included in reports and analysis conducted by NERC, EIA, EPRI and various 

utilities. The commenters stated further that the Proposed Rule EE goals appear to underestimate 

costs and the capital investments necessary to sustain EE performance through 2030, and if a 

state cannot meet the EE goal, offsets in the form of coal retirements may be required. 

Commenters stated that the Proposed Rule anticipates shifting a substantial percentage of 

electricity generation to existing NGCC units; however, there is not enough existing NGCC in 

this country to make up for the forced reductions in coal generation, and EPA recognizes this 

fact in the Notice of Data Availability (NODA) that was issued in this docket. The commenters 

stated that that these NGCC units were not designed to operate at capacity factors close to EPA's 

70 percent redispatch goal. 

Commenters stated that separate from the Proposed Rule, demand for natural gas is expanding 

and additional reliance on NGCC sources may not be feasible considering the natural gas market 
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and infrastructure is already at its edge. The commenters continued that without considering the 

NGCC expansion proposed in the Proposed Rule, the Interstate Natural Gas Association of 

America (INGAA) estimated that the U.S. and Canada will need 28,900 to 61,600 miles of 

additional natural gas pipelines through 2030. 

Commenters stated that NERC's reliability study also identified reliability concerns with 

increased reliance on natural-gas-fired generation. The commenters stated further that NERC's 

studies show that as variable sources of energy generation increase, maintaining voltage stability 

becomes challenging and pointed out that voltage stability is essential to a reliable electricity 

grid. 

Commenters stated that existing generation methods serve as a foundation for reliable electricity 

for ratepayers and cooperative members served. The commenters stated that testimony from 

FERC commissioners makes clear that the agency is concerned about the impacts that the 

Proposed Rule will have on grid reliability and that FERC is eager to work collaboratively with 

EPA to ensure reliable electricity remains available to all. 

Commenters stated that EPA is taking an unprecedented approach to environmental regulation in 

attempting to regulate what type of energy source a utility can use to serve its members. The 

commenters stated that rather than allow a utility to determine how best to provide reliable and 

affordable power to its customers and regulating the emissions produced from that generation, 

EPA is directing the utilities how to generate electricity. 

Commenters stated that although they support the EPA's decision to encourage states to reduce 

CO2 emissions, we are concerned about the Proposed Rule's potential impacts on electric 

reliability. The commenters stated that emission goals the EPA proposes to establish under the 

Proposed Rule will likely result in significant changes to the electric power sector and some of 

these changes could lead to significant electric reliability issues in certain areas or during certain

seasons. 

Commenters stated that in California, significant increases in RE generation are already leading 

to major, short-term electric reliability problems during peak hours and the changes needed to 

comply with the Proposed Rule could further exacerbate these problems. 

Commenters stated that NERC's preliminary study of the Proposed Rule finds that new reliability 

challenges may arise with the integration of generation resources that have different essential 

reliability service characteristics than the units that are projected to retire. 

Commenters stated that in approving state plans, the EPA must, at a minimum, consider the 

potential impacts that other state plans in the region will have on local and regional electric 

reliability and that EPA should establish a process or procedure to approve an initial state plan 

with an extended implementation schedule in those cases in which additional time may be 

necessary to ensure the reliability of electricity grid. 

Commenters stated that another issue with EPA's assumption that NGCC units could increase 

their capacity factors to 70% is that doing so could compromise electric reliability on a local or 

regional basis. The commenters stated that if NGCC utilization were to increase to the levels that 
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the EPA assumes, the system could become even more vulnerable to periodic blackouts or 

curtailments during high-demand, low-variable-supply scenarios, as well as periodic weather- or 

natural disaster-related reliability issues. 

Commenters stated NERC's concern over the number of coal unit retirements, reliability, time 

period for implementation, and construction of resource additions and transmission 

enhancements. The commenters stated that the proposed rule threatens the U.S. electrical grid 

reliability, and, if implemented, would harm more citizens than it would ever protect. The 

commenters identified studies by regional transmission organizations warning that EPA's 

proposal will create electricity generation capacity shortages with a greater likelihood of rotating 

or cascading outages. 

Commenters reported on a two-part assessment of the impacts that the proposed CPP will have 

on reliability in the SPP region. The commenters noted as a result of the assessment that the SPP 

region will experience numerous thermal overloads and low voltage occurrences under both 

scenarios studied. Commenters stated results of the first part of the transmission system impact 

evaluation indicate that if the assumed EGU retirements were to occur absent requisite 

transmission and generation infrastructure improvements, the power grid would suffer extreme 

reactive deficiencies that would expose it to widespread reliability risks resulting in significant 

loss of load and violations of NERC reliability standards. 

Commenters stated that coal needs to remain within the energy resource mix to provide for a 

high degree of reliability for power generation during times of peak demands. The commenters 

stated that in terms of renewables, the reliability of these energy sources is tied to the 

unpredictable nature of weather and the ability of fossil fuel power generation to supplement 

power demands. The commenters stated that keeping coal as part of the energy mix of our nation 

will not only provide support for gas and renewable energy production, but it will provide a 

reliable cost effective source of energy that will diversify the energy portfolio of the nation and 

help maintain jobs and stabilize the economic base of energy producing states and communities 

across the nation. 

Commenters stated industry's concern on how the proposed CPP will impact reliability of power 

and is as significant as our concern regarding increased energy prices. The commenters stated 

that reliability of the power system is vital for our country to have a productive manufacturing 

sector and that reliability concerns are fully analyzed and addressed before this rule is finalized. 

Commenters stated EPA fails to include adequate information that clearly demonstrates the 

proposed BSER, when applied state-by-state and nationally at the levels proscribed by EPA, 

could be implemented without negative impact to the electric system. The commenters stated 

that the proposed guidelines do not take into account the regional nature of the electricity 

markets, and the potential adverse system impacts that the proposed BSER would have on the 

adequacy and reliability of electricity supply. The commenters stated that NERC challenges 

some of EPA's assumptions about reliability under the proposed guidelines and recommends 

EPA address NERC's concerns and provide a clear demonstration of how the proposed BSER, as 

implemented state-by-state and nationally, will not negatively impact electric system reliability. 
284 

Commenters stated concerns about EPA's proposed rule that would result in several adverse 

effects in that it would have the unintended consequences to threaten or to disrupt the reliability 

of the Eastern interconnection transmission grid. 

Commenters stated that under the Proposed Rule, Arizona becomes very dependent upon two 

natural gas pipeline systems and loss of one for any period may result in substantial service 

disruptions and significant reliability issues would be likely in the event of a pipeline failure. 

Commenters stated that the electric reliability issues from CPP are associated with both supply 

and deliverability and the elimination of existing coal-fired generation reduces overall electric 

supply. The commenters stated that the assumption that incremental, lower-emitting generation 

resources can be permitted and brought online in a two to three year period from state plan 

development to compliance is not possible and would drive lower reserve margins. The 

commenters estimated that 3.5 GW of new natural gas capacity by 2020 and over 10 GW by 

2030 would be needed to meet reserve margin requirements in Arizona by 2030 following the 

retirement of all affected coal capacity within the state. 

Commenters stated that the rule poses a distinct threat to electric reliability. The commenters 

stated that on account of both the retirement of coal-fired electric generating capacity due to EPA 

regulations and the inadequacy of existing natural gas pipeline capacity in the region, there is a 

distinct possibility that the CPP, if implemented in its current form, would lead to trouble with 

keeping the lights on, especially in the event of unusually cold temperatures. 

Commenters stated that Arizona relies on its base-load coal generation to meet summer peak 

load needs when ambient temperatures can exceed 115 degrees and questioned if EPA analyzed 

the impact of its proposal on the state's ability to continue to reliably serve customers when 

energy is needed most. 

Commenters stated the Proposal would create unnecessary reliability risks relating to electricity 

and natural gas service. 

Commenters stated removing coal as a power source from the generation portfolio unnecessarily 

reduces reliability and market flexibility while increasing costs. 

Commenters stated the electric power industry has raised numerous concerns about the potential 

impacts of EPA's proposal on both grid reliability and cost to the consumer and urge EPA to 

listen to all stakeholders and evaluate the true costs and technical feasibility of implementing 

what amounts to sweeping changes to the nation's electric system. 

Commenters stated that their organization recommends that EPA establish a formal process with 

the FERC for review of the potential reliability impacts of the Clean Power Plan to identify and 

enable EPA to address any reliability risks that flow from the design of the rule; 2) to provide 

guidance to states on potential reliability risks arising from various implementation options; and 

3) to assess the potential reliability impacts of proposed state implementation plans. The 

commenters noted that that NERC has already indicated its intention to conduct a multi-stage 

review of the potential reliability impacts of the Clean Power Plan and the commenters indicated 
285 

their proposed process would align well with NERC's schedule and could draw upon NERC's 

assessment. 

Commenters stated that in addition to the challenges to utilities posed by the building blocks in 

the Plan, they are concerned about how the implementation of the Plan will impact grid 

reliability in coming years. The commenters also presented supporting arguments from NERC, 

MISO, and SPP. 

Commenters stated that changes to the composition and operation of the nation's electric system, 

within a relatively short period of time, and changing the operating characteristics of units has 

the potential to adversely impact system reliability. The commenters suggested that EPA include 

a "reliability safety valve" mechanism to provide additional compliance and/or enforcement 

flexibility to ensure electric system reliability. 

Commenters stated the mandates in the Proposed Rule stand to disrupt the provision of reliable 

electric service at just and reasonable rates, and will cause direct, immediate, and long-term harm 

to organization members. 

Commenters stated that the Proposed Rule raises significant electric reliability concerns. The 

commenters stated that CO2 emission rate EPA proposes for Wyoming and neighboring states 

directly or indirectly threatens the retirement of a significant amount of coal-fueled generation in 

a timeframe that compromises the continued reliable distribution and delivery of generated 

electricity. The commenters stated that the Proposed Rule incorporates generic and unsupported 

expectations of levels of integrated renewable generation and energy efficiency that, when 

applied to Wyoming, are extremely ambitious, almost certainly unachievable, and uneconomic 

under traditional standards. 

Commenters stated that EPA's rule will cause a dramatic shift in the way the United States 

produces electric energy and maintains reliability of the electric grid, and that EPA remain 

committed to understanding the reliability impacts of the rule, adjusting the final rule as 

necessary to avoid detrimental impacts to electric reliability. 

Commenters stated that the EPA needs to consider the impacts of the Proposed Rule on 

reliability of the electric grid. The commenters stated that the Proposed Rule will potentially 

cause the early retirement of fossil fueled electric generation, and that the time frame needed to 

install new renewable resources and replacement fossil fueled electric generation will most likely 

exceed the allowed timeframe proposed by the CPP 

Commenters reiterated the primary areas of concern expressed by SPP in its comments on the 

proposed rule: 1) the CPP will impact reliability of the bulk electric system; 2) the timing 

proposed by EPA for compliance is infeasible; and 3) the proposed CPP will have material 

impacts on the market-based dispatch of electric generating units within the SPP region. 

Commenters stated that there appears to be a high likelihood that implementation of the proposed 

EPSP could threaten grid reliability and stability.
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Commenters stated that as traditional fossil-fired generation is retired as a result of the Clean 

Power Plan to reduce CO2 emissions, the availability of Essential Reliability Services (ERS) - 

load and resource balance, voltage support, and frequency support - will decline and will 

adversely impact bulk-power system reliability. The commenters stated that ERS is not typically 

provided by non-conventional generation resources, such as renewable resources. 

Commenters stated that the lack of certainty as to the requirements that will be included in the 

final rule and the required state plans make it impossible to assess the impacts on grid reliability 

or the economic costs of the proposed requirements.

Commenters stated as large coal-fired generation units are retired, utilities must be provided 

sufficient time to plan, obtain regulatory approvals for, and construct replacement generation; 

generation planning and transmission planning must include sufficient lead time to identify 

issues and develop corrective measures to ensure reliability in the system. The commenters said 

EPA should allow utilities and other organizations with the expertise in generation planning and 

transmission planning to determine how the rule impacts South Carolina's generation mix and the 

state's transmission system to ensure a reliable and cost effective solution is obtained. The 

commenters listed the following areas of concern with regard to reliability of the electric system: 

The substantial amount of fossil fuel generation retirement, which will likely result in stranded 

assets that increase consumer costs, 

Insufficient time to address transmission constraints and resource reliability, 

Significant reliance on energy efficiency ("EE") to displace demand growth, 

Considerable reliance on variable energy resources and natural gas-fired generation, 

• Impact of resource mix change, and 

• Fast track of the Proposed Rule scheduled to begin in 2020. 

The commenters said South Carolina has limited capacity to bring additional natural gas 

volumes to our state, and expansion of interstate and intrastate pipelines to meet the increased 

demand of natural gas would be required. The commenters said the intermittent nature of solar 

and other types of renewable generation create challenges in the need for new backup capacity, 

and modeling potential compliance costs will be necessary to determine which existing fossilfired generation units will be needed as backup and to assess which grid infrastructure upgrades 

will be needed to tolerate fluctuations in power supplies and increased bi-directional line activity 

associated with renewable generation. 

Commenters stated EPA should set a consistent and practical state goal which includes 

consideration of the effects on grid reliability. 

Commenters stated EPA estimates that 12,400 megawatts of fossil fuel electricity generating 

capacity would retire in Texas due to the rule, and it is uncertain if Texas, and neighboring States 

similarly affected, can afford to lose this much capacity. The commenters said ERCOT warned 
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the rule "could result in transmission reliability issues due to the loss of generation resources in 

and around major urban centers," and the FERC Commissioner warned that the rule threatened 

the 15-State Midcontinent Independent Service Operator region-which includes pockets of 

eastern Texas-with "widespread rotating blackouts." The commenters said the SPP cautioned that 

the CCP "introduce(s) the very real possibility of rolling blackouts or cascading outages." 

Commenters said the proposed rule would require state plans to achieve a 30 percent reduction in 

CO2 emissions from existing power plants below 2005 levels, and while the full level of 

reductions is not required until 2030, substantial CO2 reductions are required under the state 

plans as early as 2020. The commenters stated while each of the building blocks generates 

reductions that are used to develop a total required reduction, the Proposed Rule allows states to 

have the flexibility to develop plans to meet these emission reduction targets, and this flexibility 

necessarily allows for greater-than-anticipated reductions to offset lower-than-anticipated 

reductions in other areas. The commenters said it is possible that more coal-fired power plants 

will need to be retired than originally projected in order to make up for shortfalls in emission 

reductions from other categories. The commenters cited NERC and their concerns about 

reliability. 

Commenters stated EPA's Proposed Guidelines are founded upon numerous fundamental factual 

errors that violate the "reasoned decision-making" requirement under the Administrative 

Procedure Act ("APA"). 5 U.S.C. 706(2)(A). The commenters said the Proposed Guidelines 

wrongly assume that various "technically feasible" but impracticable objectives can be achieved 

without serious harm to wholesale electric markets or to BPS reliability, the EPA has 

unreasonably excluded FERC from a substantive role in developing the Proposed Guidelines and 

has irrationally deprived itself of the input of the federal agency that has real world expertise 

overseeing electricity markets, transmission grids, and electric reliability. 

Commenters stated that the draft rules go beyond the authority of the Clean Air Act, jeopardize 

reliability, and drive-up costs by essentially dictating to states which generation resources will be 

deployed and at what time. 

Response 40: See section VIII.G.2 of the preamble for the final rule for a discussion of electric 

reliability and for the important provisions on reliability in this rule. Also see the Resource 

Adequacy and Reliability Analysis TSD for a discussion of the treatment of resource adequacy in 

the analysis of the impact of this final rule. 

Comment 41: Commenters asserted there are potential legal outcomes associated with reliability 

concerns. 

Commenters stated that "potential legal outcomes associated with reliability disruptions are also 

severe. Power plant owners might be trapped between lawsuits and federal enforcement actions, 

all because EPA neglected to adequately consider the implications of the CPP on our nation's 

electricity supply." 
288 

Commenters stated that the finding that the CPP will not significantly impact electric reliability 

involved no substantive coordination with FERC, and that EPA's failure to adequately consult 

with, and defer to, FERC concerning issues that fall squarely within its expertise is arbitrary and 

capricious. 

Commenters stated that neither EPA nor the states can force retirement of units that must run to 

ensure system reliability. 

Commenters stated that the CPP is legally flawed and should be withdrawn in its entirety. 

Commenters stated that the rule needs to address reliability-related issues in a diligent fashion 

through the development of a reliability-based study process that would include a number of 

regional technical conferences, conducted jointly between the EPA, the FERC, state regulatory 

commissions, and regional transmission organizations/reliability organizations. 

Response 41: Commenters are ill informed regarding EPA’s consideration of reliability and 

EPA’s extensive and ongoing coordination with FERC regarding the final rule. 

As for commenters asserting that neither EPA nor the states can force retirements of units, the 

meaning in the context of the final rule, which does not force retirements of units, is unclear. 

Comment 42: Reliability concerns are needlessly pessimistic 

Commenters stated EPA has calculated that implementation of the CPP could lead to retirement 

of an additional 50 GW of coal-based electricity production over the base case by 2025. The 

commenters stated that according to EPA's BSER formula, lost generation will be replaced 

through a combination of capacity factor increases at gas facilities, increased generation from 

renewable energy resources, and demand-side energy efficiency, and renewable generation and 

efficiency improvements would also replace lost capacity, along with increased electricity 

storage and demand response, as discussed further below. The commenters stated that one of the 

broadest critiques of EPA's overall calculations has come from NERC, in its Initial Reliability 

Review, in particular, NERC questions the viability of EPA's proposed renewable energy, 

transmission, and energy efficiency build-out goals. The commenters stated these critiques paint 

a needlessly pessimistic view of what is achievable, and run contrary to several studies 

demonstrating the potential for renewable energy and energy efficiency to replace existing 

generation. 

Commenters stated NERC and other grid operators dismiss transmission planning as an 

excessively long-term solution, arguing that it takes too long to fully install new planned 

transmission lines. The commenters said NERC in particular uses an assumed 10-15 year 

timetable to justify its calls to delay implementation of the CPP, arguing further that regional 

grid operators cannot even begin to plan transmission until state plans are approved under the 

CPP, which would give them less than two years to build out the necessary transmission. The 

commenters said NERC's use of this supposed transmission "bottleneck" is inapposite for several 

reasons; first, transmission lines simply don't take 10-15 years to build on a regular basis. The 

commenters said ERCOT, in its analysis of the CPP notes that major transmission projects can 
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be planned, routed, approved and constructed in five years. The commented said furthermore, the 

process of building out transmission to transport renewable energy to load centers has already 

begun in recent years, and will ramp up significantly if grid operators take appropriate steps to 

prepare for CPP implementation; multiple RTOs are considering transmission improvements 

already. The commenters said, in particular, Clean Line Energy Partners is currently working to 

construct five major transmission lines to move 15.5 GW of largely wind-sourced electricity in 

the middle of the country out to load centers in the Midwest, Southwest, and on the West Coast. 

Commenters stated that NERC misstates the timeline on which transmission projects could be 

planned and needed. The commenters said states and grid operators do not need to wait until 

plans are approved to begin studying what transmission upgrades may be needed, and grid 

operators have an obligation to assess and respond to policy developments and how they will 

affect the need for generation and transmission; forthcoming regulatory obligations such as the 

CPP therefore give rise to their duty to begin planning for future transmission needs despite 

some degree of uncertainty about some details in state plans. The commenters stated CPP's 

compliance schedule contemplates a slow ramping of stringency, and transmission 

improvements are generally considered to be a mid- to long-term need, rather than an immediate 

one 

Commenters stated that NERC overlooks numerous alternatives to new transmission projects 

that also could resolve its predicted transmission constraints including: adding lines to existing 

transmission corridors, reconductoring, or otherwise upgrading existing facilities. The 

commenters said these types of projects take far less time, both for regulatory approval and 

construction, require no siting process, they are less expensive than building new transmission 

lines, and can be implemented more quickly and at lower cost than new transmission. The 

commenters pointed out that transmission system planners are required to consider nontransmission alternatives to new wires projects such as demand-side management. The 

commenters also stated NERC's evaluation fails to reflect how energy efficiency will lessen the 

need for new transmission infrastructure in general, or how states could design targeted demandside management programs to resolve areas of congestion. 

Commenters stated with regard to ("ride-through" and quick-start or "black-start" capabilities, 

transition to cleaner electricity sources will unambiguously help: wind and solar plants are often 

more able to ride out disturbances, and return to service more quickly, because they are already 

necessarily designed to deal with fluctuating power over time, and they lack complicated thermal 

or mechanical systems that require significant amounts of time to restart. The commenters said 

the smaller capacity and more distributed nature of wind and solar plants address some of the 

root of the problem - a malfunction at a 50 MW solar facility is less likely to cause a large 

system shock than when a 800 MW central-station generator trips offline. 

Commenters stated NERC has raised concerns that increasing the share of electricity produced 

by gas-burning power plants would make the grid more vulnerable to disturbances like that 

where single events act to reduce the supply of gas over a large region such as the polar vortex. 

The commenters said the polar vortex did not result in widespread power losses in the region, 

even though it was by any measure an extreme weather event; and improved electricity 

transmission infrastructure can alleviate the risk that any one region suffers from a power 

shortage. The commenters added that sensible planning and low cost power plant upgrades 
290 

would have avoided a large part of the problem, in which a big part of the problem leading to 

these capacity constraints was that coal and gas plants were simply unprepared for these climatic 

conditions. The commenters said most of the plants that were out of service were unavailable 

because of operational and mechanical problems like frozen coal stockpiles, boiler tube failures, 

and faulty ignition, and grid operators are working on corrective measures and are evaluating 

additional financial incentives to reward plant operators that deliver higher performance 

levels. The commenters also said pipeline capacity and gas supplies were not the problem; rather 

sufficient gas supply was available, but an anomaly in the power and gas markets kept some gasfired generators from obtaining sufficient fuel on high-demand days. The commenters said in 

October 2014 FERC shared its intention to better coordinate daily natural gas and electricity 

markets; enable gas-burning power plants to run temporarily on oil during emergencies; and 

make other market changes to resolve the issues that led to the capacity crisis during the polar 

vortex. 

Commenters stated that the obvious solution to NERC's concerns is increased fuel diversification 

which the commenters cite NERC as acknowledging, though their solution is to continue 

excessive reliance on coal. The commenters stated that unlike both coal and gas plants, wind and 

solar plants rely on "fuel sources" that do not need to be imported from anywhere, and the supply 

of which is far less likely to be interrupted uniformly across broad swaths of the country. 

Commenters stated grid operators already have the tools necessary to adjust to the retirement of 

coal-burning power plants over the next fifteen years without seriously impacting the reliability 

of the power grid. The commenters said with penetration rates of renewable resources of up to 

30-40 percent or more by 2030 in some areas, several recent studies have addressed this 

contingency, considering whether and how it is possible to incorporate those levels of renewable 

energy using today's resources and technologies, and their common conclusion is that high levels 

of integration are feasible. The commenters said the studies call for restructuring the energy 

market, advanced transmission planning and installation, increased utilization of demand 

response programs, additional electricity storage installations, incorporation of contingency 

reserve and curtailment capabilities into wind and solar facilities, independent improvements in 

ancillary service providers, and continued limited use of some fossil fuel plants as "peaker" 

facilities. The commenters said these studies were performed by grid operators and experts 

seeking to understand the implications of underlying market and policy trends favoring 

renewable energy development. 

Commenters stated to the extent feasible, EPA should help ensure that states and grid operators 

plan for the retirements of coal units as soon as possible, make sure they fully understand the 

reliability implications of those retirements, and prepare their electricity grids to incorporate 

significantly higher levels of renewable energy. The commenters said it is critical that state 

environmental regulatory agencies work closely with utilities and grid operators to ensure that 

states' individual plans are designed to minimize any disruptions to grid reliability which may 

involve regional compliance options for states within a single RTO, or it may simply involve 

extensive consultations. The commenters also stated NERC should work more with regional 

RTOs, ISOs, and utilities to help them identify and respond to predictable changes in their 

resource mixes. The commenters concluded that managing renewable electricity in a way that 
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minimizes disruptions to grid reliability will require advanced planning and understanding, and 

EPA should help facilitate these conversations. 

Commenters stated that states often do not exercise the same level of jurisdiction over 

municipalities and cooperatives that they do over investor-owned utilities, making the state plandriven process less optimal for sources operated by cooperatives and publicly-owned utilities. 

The commenters said support their recommendation that enforcement of the CPP falls entirely on 

sources (and by extension on all utilities, including municipalities and cooperatives), rather than 

on states, who have limited control over their own power infrastructure. The commenters said 

Cooperatives serve some of the poorest and least connected parts of the United States, and so 

EPA should explore opportunities to enforce the CPP without unduly impacting poor 

communities. The commenters stated the CPP offers a significant opportunity for community 

investment in energy efficiency and distributed renewable generation, programs which have the 

potential to create high-quality jobs, and EPA should work with RUS to ensure that guidance 

offered on these types of programs is appropriate for, and well-communicated to, cooperatives, 

and EPA should consult with RUS to understand whether the framework for RUS's existing 

financing tools could be improved in order to facilitate CPP compliance. The commenters said 

EPA should also consider other existing mechanisms that already encourage renewables and 

efficiency build-out, and explore how harnessing these various support networks can help 

municipalities and coops to reduce their greenhouse gas emissions with minimal disruption. 

Response 42: The EPA agrees with the commenters that proper planning and implementation of 

the CPP will not lead to reliability issues with the electricity grid. States in their planning can 

anticipate infrastructure needs and other requirements relating to changes in the network. See the 

GHG Resource Adequacy and Reliability Technical Support Document for more information on 

the treatment of resource adequacy treatment in analyzing the impact of this rule. 

Comment 43: Commenters discussed beneficial aspects of upgrades to the electricity grid. 

Commenters stated the rule must respond to grid reliability which will set the stage for a more 

efficient transportation system with modern engineering considerations. The commenters also 

stated infrastructure project of this size and importance could generate jobs and promote 

apprenticeship opportunities all while reducing energy loss and consumption, setting the stage 

for a new era in energy generation, and meeting the standards for clean power. 

Commenters described independent modeling conducted by the commenters’ organization that 

showed likely reductions in energy consumption and GHG emissions resulting from linked 

recycling and replacement rebates. The commenters noted that while the main driver for ER 

programs would be the achievement of energy savings and GHG reductions, other benefits 

would be realized as well, such as declines in electricity bills, declining emissions of 

conventional pollutants, and boosting manufacturing output and retail activity. 

Response 43: Regarding reliability, See section VIII.G.2 of the preamble for the final rule for a 

discussion of electric reliability and for the important provisions on reliability in this rule. Also
292 

see the Resource Adequacy and Reliability Analysis TSD for a discussion of the treatment of 

resource adequacy in the analysis of the impact of this final rule. Thank you for your comments. 

Comment 44: Comment stating that reliability planning within the Western Electricity 

Coordinating Council (WECC) electrical grid is critical to support significant changes in 

generation resource mix required by the CPP. 

Commenters stated that reliability planning within the Western Electricity Coordinating Council 

(WECC) electrical grid is critical to support significant changes in generation resource mix 

required by the CPP. The commenters stated that the electric generation and transmission grids 

across the nation, including the WECC grid, are already losing a significant proportion of their 

base-load coal generation. As such, the commenters noted that the grids were already planning to 

change their generation mix before EPA proposed the CPP. The commenters stated that the EPA 

should take into account these existing efforts and promote streamlining of the planning and 

approvals needed to facilitate the extra work that will be needed to accommodate CPP mandates. 

Response 44: The EPA agrees with the commenters and to support a more effective reliability 

planning process, the EPA is moving the start of the interim period from 2020 to 2022 and 

adjusting the interim goals to provide a less dramatic initial reduction requirement and a more 

gradual glide path to the final 2030 goals. Additional discussion on this topic is found in the 

final rule preamble, section VIII.H. 

Comment 45: Commenters asserted the building blocks impact reliability. 

Commenters stated BBs 3 and 4 cannot be readily quantified, and less than expected energy 

savings will require additional decreases in fossil-fuel generation to meet the proposed state 

emissions reduction goal which is the opposite of what is required to assure the reliability of the 

bulk electric system as well as provide reasonably priced electric service to consumers. The 

commenters estimate that the adoption of building blocks 3 and 4 will result in significantly 

higher electrical exports from Nebraska than is currently the case which will undercut the 

longstanding purpose of public power utilities and make them, in effect, more like independent 

power producers. The commenters stated that if it is physically possible to implement the 

proposed building blocks, the resulting shift caused by the additional amount of energy from 

renewables and decreased consumption due to energy efficiency reductions will cause a shift 

from economic to environmental dispatch and will likely mean that many existing base load units 

will be dispatched less frequently, if at all, thus reducing their efficiency and their economic 

usefulness and system reliability will suffer. The commenters cited SPPs in their October 9 letter 

to EPA that raised concerns of potential cascading blackouts. 

Commenters stated that EPA has severely underestimated the net economic impact of Building 

Block 1. The commenters strongly recommended that U.S. EPA work with FERC prior to 

proceeding with the proposed rule to address the effects of this proposed rule on electricity grid 

reliability. 
293 

Commenters stated NERC's reliability analysis of the potential reliability impacts of the EPA's 

proposed rule and "found a number of reliability concerns regarding increased reliance on 

natural-gas-fired generation." The commenters stated that an independent power market analysis 

of an alternative coal unit retirement scenario, representing a gradual reduction in Arizona coalfired generation capacity between 2017 and 2030, addresses the most problematic impacts of the 

EPA's proposed building block approach (reserve margin, electricity and natural gas reliability) 

by providing ample time to plan for and make the necessary adjustment to infrastructure, while 

still achieving meaningful reductions in CO2 emissions. 

Commenters stated concern that Building Block 4 would be implemented de facto by setting 

annual mass-based CO2 emission limits for Virginia's EGUs. The commenters stated they do not 

believe its EGU members or its demand side members should have to face the possibility of 

electricity rationing and that manufacturing members cannot be subjected to any such uncertainty 

about the reliability of the electricity supply they must have to sustain their economic viability. 

Commenters stated EPA has not provided a complete analysis of how grid reliability can be 

maintained if the plan's building blocks are applied as proposed. The commenters stated that the 

IPM used by EPA to evaluate the building blocks and whether goals are achievable uses less 

robust data than that possessed and used by MISO. The commenters also stated EPA should 

engage RTOs, ISOs, and NERC to assist in modeling the impacts of the rule on electric 

reliability and evaluating the natural gas transfer and storage capacity requirements needed under 

this proposal, as well as fully utilize the resources and expertise of the FERC. The commenters 

stated that EPA's system modeling should also evaluate the rule's impact on the generation 

reserve margins and understand what resources will be called on to meet those reserves. The 

commenters also stated that EPA should provide states a safety valve to ensure the reliability, 

safety, and security of the electrical system. 

Commenters stated that increased penetration of intermittent resources under Building Block 3 

will only serve to exacerbate the negative efficiency performance of the national coal fleet as 

these resources come on line. The commenters said experiences in California have taught utilities 

that increased renewable penetration requires significant fast-start capabilities as well as 

substantial standby power supplies to meet demand when renewable resources are not available. 

The commenters stated generator efficiency has been maximized by utilizing NGCC units to fill 

this role, and EPA's view of the energy market will require coal to fill this role as well. 

Commenters stated there has been a recent revelation by the Government Accountability Office 

that EPA has been inaccurately calculating the costs and benefits of other regulatory policies. 

The commenters further added if the methodology for calculating costs and benefits were 

inaccurate for some of the agency's regulations, it stands to reason that the calculations for other 

regulations will also be inaccurate. 

Commenters stated that EPA should defer to the NERC's expertise in the field of bulk-power 

system reliability and that NERC, authorized by FERC to establish and enforce mandatory 

reliability standards for users, owners, and operators of the bulk-power system, is in the best 

position to analyze reliability impacts of the Proposed Rule. The commenters stated that NERC 

identified potential electric reliability concerns of the Proposed Rule, citing potential issues with 

the underlying assumptions of the four building blocks that are used to determine each state's 
294 

proposed mandatory emission reductions. The commenters stated further that NERC has 

announced plans to conduct more detailed assessments and EPA should consider NERC's initial 

findings and recommendations, including a reevaluation of the underlying assumptions used to 

determine the four building blocks for mandatory emission reductions. The commenters also 

stated EPA should also closely monitor NERC's future assessments to learn of the reliability 

impacts of the Clean Power Plan at every step, and adjust the rule and implementation timelines 

as necessary to avoid creating a situation in which the rule will jeopardize the reliability of the 

bulk-power system and could result in negative impacts on the health and welfare of the general 

public. 

Commenters stated that the underlying assumptions used to determine the four building blocks 

for mandatory emission reductions may be flawed and require further study. The commenters 

stated that the impacts include an underestimated amount of fossil-fired generation retirements, a 

lack of infrastructure to support increased reliance on natural gas, an inconsistent assumption that 

energy efficiency aligns with load forecasts, and the reduction of Essential Reliability Services to 

support the bulk-power system. 

Response 45: EPA disagrees with these comments. EPA believes that reliability has been 

adequately addressed in this rule. EPA believes reliability can be addressed in the state planning 

process in ways that will ensure that conflicts with reliability requirements and compliance with 

this final rule will be very unlikely, and also provides a Reliability Safety Valve mechanism in 

the event of such unlikely and unanticipated occurrences. See section VIII.G.2 of the preamble 

for the final rule for a discussion of electric reliability and for the important provisions on 

reliability in this rule. Also see the Resource Adequacy and Reliability Analysis TSD for a 

discussion of the treatment of resource adequacy in the analysis of the impact of this final rule. 

Comment 46: Commenters encouraged the states to begin operational and planning scenario 

studies. 

Commenters encouraged the states to begin operational and planning scenario studies, including 

resource adequacy, transmission adequacy, and dynamic stability, to assess economic and 

reliability impacts and requested regional and multi-regional industry planning and analysis 

groups include Building Trades representation. The commenters suggested that state policy 

makers work with existing utility, labor, and finance industry relationships to ensure there is 

clear understanding of the complex interdependencies potentially adversely affecting labor, as 

well as the potential strain on states' power system reliability. 

Response 46: The EPA agrees with commenters’ assertions that states must in their 

implementation plans consider resource and transmission adequacy and stability. The rule 

requires states to consult with relevant reliability entities in developing their plans. See 

Preamble Section VII.G.2 for discussion of reliability issues. 
295 

Comment 47: The Proposed Rule interferes with regional and state resource planning efforts 

and exacerbates existing reliability issues. 

Commenters stated that the proposed rule will interfere with regional and state planning efforts 

and exacerbate issues associated with generation resource mix in the regional energy markets' 

system planning process. The commenters further stated that the proposed rule will create 

difficulties with respect to state efforts to develop an effective portfolio of generation 

resources. The commenters stated that all of these processes reflect the fact that different types of 

generation have varying degrees of reliability and provide different benefits with respect to 

resource adequacy. 

Commenters stated that regional energy markets undertake extensive system planning. The 

commenters discussed ISO New England's annual regional system plan to identify capacity 

needs and the ideal mix of resources to reliably provide service to customers in ISO New 

England's service territory. The commenters noted that gas-fired generation depends on "just-intime" delivery whereas coal and oil-fired generation are able to store fuel on site. The 

commenters quoted a January 17, 2014 filing by ISO New England that defined some of the 

problems of its existing generation fleet encountered during the 2013-2014 winter season. The 

commenters also discussed PJM's August 2014 proposal to address reliability concerns and that 

the major fuel switch from coal to natural gas throughout the country is placing the reliability of 

PJM's generation fleet at risk. The commenters also noted that MISO faced resource 

performance issues during the 2013-2014 "polar vortex" winter season and that FERC held a 

technical conference on operations in the winter of 2013-2014 in which MISO noted outages not 

normally seen during winter months. 

Commenters stated that PJM and ISO New England's proposals, as well as MISO's comments at 

the technical conference, illustrate that every market has its own unique resource performance 

issues, and EPA's capacity mandates in the BSER could exacerbate such issues by restricting the 

ability of these markets to utilize all types of generation to ensure reliability. 

Commenters also stated that the proposed rule's primary goal of replacing carbon-intensive 

generation with less carbon-intensive generation will further complicate the extensive system 

planning processes, exacerbate the resource performance issues faced in New England and 

elsewhere, and place system reliability at risk. 

Commenters noted that one compliance option that has been suggested is "environmental 

dispatch" (i.e., dispatching resources based on their environmental attributes, such as carbon 

intensity), which the commenters oppose as unnecessary, disruptive of the electricity market, and 

economically inefficient. The commenters stated that while environmental dispatch would pick 

the least-carbon intensive units first, it is not the least-cost approach to achieving carbon targets 

and will inevitably lead to inefficiencies. The commenters noted that EPA representatives have 

also stated that they do not intend regions to employ an environmental dispatch as part of the 

CPP, due to the relatively inefficient manner in which it would help achieve carbon targets. 

Response 47: EPA agrees with those commenters that recognize that the CPP is consistent with 

current economic dispatch practice, and disagrees with those commenters who maintain that the 

CPP is inconsistent or otherwise problematic for current planning and dispatch of power. 
296 

"Redispatch" as used in the proposal was, in practice, just the overall annual shifting of 

generation among resource types. The final rule uses the terminology of generation shifting, not 

redispatch. However, the proposed rule was intended and designed to work with current 

environmental regulations that are consistent with the current security constrained economic 

dispatch (SCED) protocols and to continue that history of compatibility between environmental 

regulation and economic dispatch. This final rule reinforces that approach by making clear that 

the concept of emissions rate trading is part of the BSER process and can be implemented 

consistently with the building blocks on which it is based. See Preamble Section V. The 

commenters fail to adequately grasp that changes that the final rule encourages are already 

occurring in the industry, and the final rule builds on these changes and the planning that is 

already taking place. The final rule also adopts measures to ensure reliability in state plans and 

includes a reliability safety valve for unanticipated reliability conflicts that give rise to 

emergency conditions (See Preamble Section VIII.G.2). 

Comment 48: Commenters gave the following reliability benefits associated with cross-border 

electricity trade between Canada and the US: 

• "complementarity in the operational characteristics of segments of the grid on either side 

of the border" 

• "Many regions in Canada have winter-peaking systems, thus enabling them to contribute 

available surplus to adjoining U.S. regions which experience peak demand season during 

the summer" 

• "As noted by the U.S. National Renewable Energy Laboratory, '[t]he different peaking 

periods in Canada and the United States allow sharing of reserve services across the 

border and therefore reduce the need for new capacity in both countries'" 

• "Diversity of load ... means that capacity resources can be shared in order to optimize the 

fulfillment of overall peak loads, with cost savings achieved by reducing the total 

resources required to meet system demand" 

• "Canada-U.S. trade can serve to increase the diversity of supply options available in 

certain regions confronting unique challenges" 

• "the ability to manage conditions of oversupply and loss of supply." 

• "U.S.-Canada electric integration enhances affordability of supply for U.S. consumers" 

• "U.S.-Canada electric integration helps enable development of clean energy in the U.S." 

Response 48: The EPA acknowledges this comment. 
297 

8.9.1 Changes in operational capacity 

Comment 1: Commenters noted operational capacity as a concern that must be addressed by the 

rule. 

Commenters noted that the "critical question [is] whether there will be sufficient capability to 

handle flexible operations duties that are now principally handled by NGCCs." Commenters 

noted that "flexibility and reliability could become primary concerns as many NGCCs may move 

to baseload while coal generation capacity is reduced and variable generation from renewable 

energy substantially increases." 

Commenters noted that "assumed improvements may not be realized across the entire generation 

fleet because many plant efficiencies have already been realized and economic heat rate 

improvements have been achieved." 

Commenters stated, "The Midcontinent Independent System Operator, the regional transmission 

operator managing the grid for much of the Midwest and South, is predicting a 2.3 gigawatt 

capacity shortfall in 2016 due to planned coal plant retirements in its territory [reference: Press 

Release, Former and Current State Utility Regulators Express Concerns of the EPA's Proposed 

Carbon Rules for Power Plants (Sept. 17, 2014), available at 

http://www.eenews.net/assets/2014/09/18/document_pm_04.pdf.]."). 

Response 1: EPA believes that annual capacity factors NGCCs used in the development of this 

rule are conservative and will permit continued use of NGCCs to support flexible operations. 

See the GHG Mitigation Measures TSD for discussion of these capacity factors. 

8.9.2 Reduction in excess reserves 

Comment 1: Commenters noted concerns with lower reserve margins. 

Commenters noted that the retirement of 6,000 MW of generation capacity would be expected to 

reduce the system reserve margin by about 8%. 

Commenters noted that the proposed rule would "constrain the availability of essential reliability 

services (ERSs), such as load following, regulation and ramping services." According to the 

commenters, the proposed rule would result in reduced reserve capacity due to the retirement of 

coal-fired EGUs. The commenters further noted that the "the reliability of bulk power supply can 

be diminished when renewable resources reach 20% or more of total supply". 

Commenters conducted a preliminary analysis and noted that "Under Southern Company and 

NERC Transmission Planning criteria, the transmission system must have available generation to 

allow for the largest unit on the system to trip." Commenters stated that "Using EPA's retirement 

assumptions, with all available generation online including generation not designated as a 

network resource in 2020, the Southern Balancing Authority Area did not have adequate 
298 

generation to allow for the loss of a single generator," noting that "This would fail to meet 

reliability criteria." 

Commenters referenced an SPP reliability analysis that concluded "by 2020 SPP's reserve 

margin would fall below 4.7%, which is 8.9% below SPP's minimum reserve margin 

requirement and would result in a violation of SPP's reliability criteria and NERC reliability 

standards." 

Commenters stated that the reserve margin in the SPP is projected to fall to 4.7 percent in 2020 

and -4.0 percent by 2024 under the CPP, below the current requirement of a minimum reserve 

margin of 13.6 percent. The commenters provided several recommendations to minimize 

impacts: 

• A series of technical conferences jointly sponsored by FERC and the EPA 

• Completion of a detailed, comprehensive and independent analysis of the impacts 

the proposed CPP will have on the reliability of the nation's bulk electric system 

• Extension of the proposed schedule for compliance in order for the necessary 

electric transmission, electric generation, and gas pipeline infrastructure to be 

identified and constructed within and across the appropriate planning are 

• Adoption of the "reliability safety valve" as proposed by the ISO/RTO Council 

Commenters stated that they are very concerned with long term reliability issues associated with 

the electricity grid. The commenters stated that on-peak resource mix has shifted recently to be 

predominately gas fired and the transformation of the resource mix presents new challenges for 

the electricity industry. The commenters stated further that the tightening of reserve margins 

increases the need to ensure all risks are accurately captured as policy and changing generation 

trends drive new potential risks to resource adequacy. The commenters provided estimates by 

MISO of reserve margin shortfalls: falling from the NERC- required 14.8% to 10.6% due to 

MATS; by 2020-2021, dropping to a -3.3% to comply with the additional requirements of CO2 

regulation; and by 2023-2024, shrinking to -11.8%. 

Commenters stated that EPA's analysis of the existing NGCC capacity "available" for redispatch 

fails to consider reserve margin requirements. The commenters stated that out of the fourteen 

load-serving SPP members impacted by the EPA's projected EGU retirements, nine would be 

deficient in 2020, and furthermore, SPP found that its anticipated reserve margin would fall to -

4.0 percent by 2024, causing ten of SPP's load-serving members to be deficient. 

Commenters stated their assessment showed that by 2020, SPP's reserve margin would fall to 

4.7%, which is 8.9% below the minimum reserve margin requirement and out of SPP's fourteen 

load-serving members impacted by the EPA's projected retirements, nine would be deficient in 

2020. The commenters stated further that SPP found that its anticipated reserve margin would 

fall to -4.0% in 2024, increasing the number of deficient load serving entities to ten. The 

commenters stated these anticipated reserve margins represent a generation capacity deficiency 

of approximately 4.6 GW in 2020 and 10.1 GW in 2024. 
299 

Commenters stated that the planning reserve margins are trending downward and are below their 

reference levels for MISO by 2016 and ERCOT by 2018 and are occurring despite the lowest 

electric load growth on record, with the primary driver being fossil-fired generation retirements 

occurring at a faster rate than new generation can be built. The commenters stated that many 

coal units are being forced or anticipated to retire due to compliance with existing environmental 

regulations, low natural gas markets prices, and now the Proposed Rule and that the combination 

of economic pressure, existing environmental regulations, and additional environmental 

regulation in the CPP will likely result in additional fossil-fired generation retirements that 

decrease bulk-power system reliability to unacceptable levels. The commenters stated that they 

concur with NERC that the assumption for the amount of fossil-fired generation retirements 

resulting from the Proposed Rule may be underestimated and require further study to ensure the 

reliability of the bulk-power system. 

Commenters stated that by considering reliability only after determining emission reductions, the 

Proposed Rule leads to substantial decreases or deficiencies in reserve margins in many regions, 

compromises reliability and increases the risk of black outs, brown outs, and other load shedding 

events. The commenters explained reserve margins and how they are typically calculated so that 

they are high enough that involuntary load shedding due to inadequate supply would occur only 

once in ten years, as established by NERC standards. The commenters stated that even a small 

drop below the required reserve margin may result in a violation of NERC's reliability standards 

and compromises the reliability of the electric grid. 

The commenters stated that EPA's assumption that most of the retirements caused by the 

Proposed Rule will be absorbed by a reduction in excess reserves over time is incorrect and that 

the retirements more than deplete the excess capacity in several regions. The commenters 

provided the following examples: 

• "SPP reserve margins would be 4.6 GW deficient by 2020 and 10.1 GW deficient 

by 2024; 

• In the Northwest, the retirements the Proposed Rule imposes would further 

exacerbate the 2 GW deficiency that was already anticipated to exist by 2021. 

• In Arizona, under IPM Option 1, reserve margins would be 6 GW deficient during 

peak summer demand by 2030. 

The commenters further stated that the proposed rule would force these areas to construct new 

generation and associated infrastructure to make up for these deficiencies, but until the necessary 

generation and infrastructure could be constructed, NERC standards would be violated. The 

commenters stated that in SPP, "extreme reactive power deficiencies of approximately 5,200 

mega volt-amperes reactive would occur. Reactive power is integral to avoiding power plant and 

transmission line failures. Even assuming new generation could be constructed to offset the 

retirements the Proposed Rule imposes, inadequate infrastructure would cause loading on 38 SPP 

facilities that would exceed equipment ratings and cause cascading outages in some regions." 

The commenters added that EPA cannot rely on IPM projected power imports for the reliability 

deficiencies because the Proposed Rule requires retirements that would induce reserve margin 
300 

deficiencies for many states and deficient states cannot depend on out-of-state imports because 

they have no means to require that units outside their borders dispatch power to them. The 

commenters further stated that the "Proposed Rule cannot require state actions for compliance 

while simultaneously depending on out-of-state actions for reliability. If compliance is to be 

state-based, then EPA must analyze reliability concerns and solutions at the state level." 

Commenters stated that the ability to transmit resources cost-effectively also may be a factor. 

Commenters stated that the potential for enhanced transmission and impacts on reserve margins 

needed for electric system reliability may need to be considered. Commenters stated that an 

analysis would need to be done to assess the constraints of power supply resources both in the 

summer and in the winter. 

Commenters stated that reserve margins are dropping dangerously low as a result of generation 

retirements. Commenters stated that in recent years reserve capacity has dropped from near 20% 

to just over 10%. Commenters stated that EPA assumed excess reserve capacity could account 

for retirements, but with reserve capacity already down, due in part to MAT reductions, there 

could be insufficient reserve capacity. Commenters stated that the Proposed Rule commands 

more use of NGCC units and renewable energy sources, which are not especially reliable during 

periods of extreme weather, such as the 2013- 2014 polar vortex. Commenters stated that the 

Proposed Rule's environmental dispatch measures require those low and no-carbon resources to 

be used first. Commenters stated that beyond reliability, environmental dispatch will also 

increase electric rates without exacting much of an emission reduction. Commenters stated that 

RTOs dispatch the most economic resources first. Commenters stated that environmental 

dispatch will require the more expensive resources to be used first. Commenters stated that if 

coal units run at a lower efficiency level to allow NGCC units to meet the 70 percent capacity 

factor, the coal units will emit more carbon dioxide per megawatt hour, displacing what 

reductions may have occurred from heat rate improvements. Commenters stated that EPA 

should also consider that environmental dispatch will result in less reliable and more costly 

electricity because significant investments in EGUs to comply with MATs will be absorbed by 

ratepayers without corresponding value since the units will be operate at lower capacity factors 

or even retire. 

Commenters stated that SPP notes that the EPA model projects about 9 gigawatts (GW) of 

existing coal and gas-fired generating capacity in the SPP region will retire by 2020 due to the 

proposed rule, 6 GW more than originally planned by SPP members. Commenters stated that the 

SPP analysis "revealed the generating-unit retirements expected as a result of the CPP will cause 

significant reactive power deficiencies and numerous overloaded facilities." Commenters stated 

that SPP also studied the region's reserve margin. Commenters stated that currently, SPP requires 

a minimum reserve margin of 13.6 percent. Commenters stated that with the EPA's projected 

retirements and without new generation and transmission expansion, the region's reserve margin 

falls to 4.7 percent in 2020 and 4.0 percent by 2024. 

Commenters stated that SPP's filed comments included the following assessment: "EPA's 

projected EGU retirements represent approximately 6,000 MW of additional capacity being 

retired in the SPP region beyond that currently expected by 2020. Commenters stated that this 

represents approximately a 200% increase in retired generating capacity compared to SPP's 

current expectations. Commenters stated that unless the proposed CPP is modified significantly, 
301 

SPP's transmission system impact evaluation indicates serious, detrimental impacts on the 

reliable operation of the bulk electric system in the SPP region, introducing the very real 

possibility of rolling blackouts or cascading outages that will have significant impacts on human 

health, public safety and economic activity within the region." 

Commenters stated that Louisiana's electric utilities, as well as several RTOs, have clearly 

indicated that future compliance could hinge on the use of systematic curtailment of service 

through "brown-outs" and rolling black-outs. Commenters stated that the EPA has not provided 

any information, nor conducted any independent reliability analyses to contradict this assertion. 

Commenters stated that he SPP conducted two different analyses: one on the impacts the 

Proposed CPP would have on transmission system reliability and a second analysis on the impact 

of the Proposed CPP on regional reserve margins and generation adequacy. 

Commenters stated that the SPP's transmission system reliability analysis considered two 

potential bulk power system scenarios that included: one where unused/underutilized (existing) 

generation is dispatched to offset generation anticipated to be retired by the CPP; and a second 

that assumes new generation will be developed, to supplement existing generation, to meet 

regional power generation requirements (and offset generation retired due to CPP 

implementation). Commenters stated that the SPP transmission system reliability analysis found, 

under both scenarios, that the Proposed Rule would result in "extreme reactive power 

deficiencies" that would expose the system, including areas in northwestern Louisiana, to 

widespread reliability risks and violations of NERC standards. 

Commenters stated that the SPP also conducted a generation adequacy analysis finding that the 

proposed CPP would result in as much as 6,000 MWs of retirements: an amount that is some 200 

percent above current SPP unit retirement projections. Commenters stated that the SPP notes that 

it currently utilizes a 13.6 percent minimum planning reserve margin and, based upon its 

estimates, the CPP could drive actual reserve margins to 4.7 percent for the overall region, by 

2020 and into a negative level by 2024. 

Commenters stated that despite EPA projections that the SPP region can expect capacity reserves 

of 21.21 percent (well above the 13.6 percent required by NERC standards), the SPP projects 

that reserves will fall short by approximately 4,600 MW in 2020 and 10,100 MW in 2024. 

Commenters stated that SPP's analyses revealed significant impacts on reserve margin, falling 

well below NERC reliability standards. Commenters stated that in combination, these results 

indicate that the proposed rule will have significant and potentially dangerous impacts on grid 

reliability and led SPP to conclude "unless the proposed CPP is modified significantly, SPP's 

transmission system impact evaluation indicates serious, detrimental impacts on the reliable 

operation of the bulk electric system in the SPP region, introducing the very real possibility of 

rolling blackouts or cascading outages that will have significant impacts on human health, public 

safety and economic activity within the region". 

Commenters stated that The Southwest Power Pool concluded that imposition of the CPP as 

proposed would result in the RTO reserve margin falling to 5% by 2020 and -3.8% by 2024. 
302 

Response 1: Commenters seem to not have taken into account the many tools that are currently 

used in the electric power system to meet demand and to maintain reliability. As was said in the 

preamble to the final rule and they include planning, transmission upgrades, calling on demand 

response, installation of new capacity, and demand side actions. The CPP with its long 

implementation timeline provides ample opportunity for these activities. EPA does not 

anticipate that reserve margins will be violated. 

Comment 2: Commenters noted that the rule will result in the loss of operating reserves. 

Commenters noted that "between 1/3 of the coal plants in Texas (EPA's projection) and all of 

them (BAML's projection) would be rendered uneconomic by the rule in its first year" putting 

resource adequacy at risk. Commenters noted that "The fundamental requirement for electric 

reliability is to have enough generating capacity to match the energy usage of customers" and "If 

energy usage exceeds capacity, the entire grid is at risk of collapsing." Commenters noted that 

"reliability rules require the power system to always maintain enough reserves of generation 

(referred to as operating reserves) to stand-in for outages or failures and still be able to meet the 

highest expected levels of consumption." Commenters noted that "If high levels of power 

consumption and outages cause operating reserve levels to fall below the required level, 

reliability rules require utilities to intentionally disconnect customers (called 'load shedding') to 

reduce energy consumption to a level that allows adequate reserve levels." Commenters noted 

that assuring resource adequacy includes "ensuring enough generation capacity exists to meet the 

highest reasonably expected levels of energy consumption, plus enough extra generation on 

reserve to be able to substitute for other power plants that might experience outages or failures 

during these high levels of energy consumption." Commenters noted that "the amount of needed 

extra generation to ensure resource adequacy is called the planning reserve margin." 

Commenters stated "The retirement of large amounts of existing power plants at once, without 

enough time and forward certainty to plan and build their replacements, is the perfect recipe for 

resource adequacy problems, especially where operating reserves levels are already close to the 

planning reserve margin." 

Commenters stated that "The EPA's plan for increasing the utilization of natural gas may place a 

significant strain on system reliability, including reserve requirements." Commenters stated 

"Coal serves a crucial role in meeting system reserve requirements" due to the large amounts of 

coal reserves that can be stored on-site. 

Commenters stated that "many renewable technologies, such as wind and solar plants, produce 

intermittent generation that is difficult to predict." Commenters stated in order to manage the 

"variability and uncertainty inherent with intermittent renewable resources, system operators 

must have sufficient resources with the operational flexibility held in reserve, known as 

operating reserves, to quickly respond to fluctuations in intermittent renewable generation." 

Commenters stated "High penetrations of variable energy resources will result in an incremental 

need for operating reserves to maintain system reliability." 

Commenters noted that "the amount of operating reserves is a critical issue in any power system 

and particularly when trying to integrate a substantial amount of renewable resources, such as 
303 

wind and solar power." Commenters stated "From a reserve and reliability perspective, a 

megawatt of capacity from coal is different than a megawatt from wind" and the proposal, which 

relies heavily on renewable generation, "does not consider the need for operating reserves. 

Commenters stated "the variability of renewable resources over different operational time frames 

(hours, minutes, and seconds) and the uncertainty associated with renewable production 

forecasting (i.e., forecast errors) are key operational characteristics of renewable resources." 

Commenters noted that "the integration of renewable resources requires increased operational 

flexibility to provide load following and regulation operating reserves at ramp rates fast enough 

to sustain in a wider operating range." According to commenters, "Operating reserves can be 

categorized as non-event reserves (including regulation reserve and load following reserve) and 

event reserves (including contingency reserve and ramping reserve)" and variability of wind 

generation increases the need for load following reserve and regulation reserve on different time 

frames. According to commenters, "the uncertainty of the large-scale wind generation 

contributes to ramp events which may yield increased ramping reserve requirements." 

Commenters offered an example case study to demonstrate how a mandated shift to renewables 

looks in the real world." According to commenters, wind generation may not correspond 

with customers' electricity needs. According to commenters, "Wind generation is typically at its 

highest during the spring and winter months, with the summer periods being the lowest wind 

production months." According to commenters "More capacity from traditional resources will be 

needed to maintain an adequate level of operating reserves during the summer peak, when wind 

is less available." 

Commenters noted that there may be large swings in generation from hour-to-hour, based on 

historical information. According to commenters, these fluctuations will result in the need for 

additional operating reserves and frequency control. 

Commenters stated that SPP's analyses revealed significant impacts on reserve margin, falling 

well below NERC reliability standards. Commenters stated that in combination, these results 

indicate that the proposed rule will have significant and potentially dangerous impacts on grid 

reliability and led SPP to conclude "unless the proposed CPP is modified significantly, SPP's 

transmission system impact evaluation indicates serious, detrimental impacts on the reliable 

operation of the bulk electric system in the SPP region, introducing the very real possibility of 

rolling blackouts or cascading outages that will have significant impacts on human health, public 

safety and economic activity within the region". 

Response 2: EPA does not agree with these comments. Operating reserves are a component of 

maintaining a reliable electricity system, and EPA has considered reliability in developing this 

final rule. Regarding reliability, See section VIII.G.2 of the preamble for the final rule for a 

discussion of electric reliability and for the important provisions on reliability in this rule. Also

see the Resource Adequacy and Reliability Analysis TSD for a discussion of the treatment of 

resource adequacy in the analysis of the impact of this final rule. 

Comment 3: Commenters discussed other types of reserves, which are essential to the reliability 

of the electric system. 
304 

Commenters stated that "Regulation reserves are used to manage continuous load and generation 

variation which results in energy imbalance" and are required to "balance the minute-by-minute 

changes in the system and keep Area Control Error within limits." According to commenters, 

"The possibility of short-term wind generation forecast errors increase regulation reserve 

requirements. 

Commenters noted that "load following reserves use online generation on economic dispatch or 

quick start generation to meet the intra- and inter-hour changes in loads" and are required to 

"ensure the system has enough capacity on economic dispatch to move from one five-minute 

dispatch interval to the next." 

Commenters noted that "Contingency reserves deal with sudden events, such as loss of a large 

generation unit or a long transmission line." Commenters noted that "After the event, the inertia 

of synchronous rotating machines will either supply or absorb the energy difference due to loss 

of supply and load" and "generator governors sense the frequency change and begin to adjust the 

output to increase or decrease the required energy." 

Commenters noted that "Ramping reserves cover extreme ramp events caused by large 

unpredictability of wind generation, which may not be covered by load following reserves." 

Response 3: Regarding reliability in general, See section VIII.G.2 of the preamble for the final 

rule for a discussion of electric reliability and for the important provisions on reliability in this 

rule. Also see the Resource Adequacy and Reliability Analysis TSD for a discussion of the 

treatment of resource adequacy in the analysis of the impact of this final rule. 

EPA recognizes the need to have flexible resources on the electricity grid, and has developed the 

rule to be consistent with existing economic dispatch protocols, and designed building blocks 

from a conservative standpoint. EPA believes that annual capacity factors NGCCs used in the 

development of this rule are conservative and will permit continued use of NGCCs to support 

flexible operations. EPA also believes that the assumptions on renewables are in the mid-range 

of current projections and provide for continued reliable and flexible system operation. See the 

GHG Mitigation Measures TSD for discussion of these capacity factors. 

Comment 4: Commenters commented on the importance of reserve margins in reliable 

electricity. 

Commenters cited information from the Southwest Power Pool (SPP) and stated, "SPP's 

minimum required reserve margin is 13.6 percent per load-serving entity. However, SPP's 

evaluation of the projected EGU retirements indicates that by 2020 SPP's reserve margin will fall 

to 4.7 percent. SPP projected that by 2024, SPP's anticipated reserve margin would be -4.0 

percent, representing a capacity margin deficiency of approximately 10,100 MW. Out of 14 load 

serving members assessed, 9 would be deficient by 2020 and 10 by 2024." 

Commenters noted that the rule will result in severe erosion of the reserve margin in the Midwest 

Independent System Operator (MISO) or Southwest Power Pool (SPP). 
305 

Commenters noted that a preliminary reliability analysis by the Western Electricity Coordinating 

Council indicated that the rule will leave the region only 0.53 percent above the 15 percent target 

for reserve margin. 

Commenters noted that the rule could lead to "far below needed reserve margins for 2020" and 

"by 2024, the rule could reduce generating capacity so much that the region may not have the 

power needed to meet demand, reserve margins aside." 

Commenters stated that "Developing suitable replacement generation resources to maintain 

adequate reserve margin levels may represent a significant reliability challenge, given the 

constrained time period for implementation." 

Commenters noted that "utilities must maintain a generation capacity reserve margin in order to 

supply energy in the event existing operating capacity is lost." According to commenters, "The 

policy target envisioned will negatively impact existing capacity and potentially require new 

dispatchable units to maintain reliability and reserve margin targets." 

Commenters noted "Most of these coal plant retirements will occur in regions where the reserve 

margins are already tight." 

Commenters noted "Results of the PACE modeling show that utilities in Arizona would need to 

build an additional 3.5 GW of new natural gas capacity by 2020 and 10GW by 2030 to meet 

peak load and reserve requirements." According to commenters, "approximately 2.3 GW is 

directly attributable to impacts from the proposed rule" and "due to the time it would take to 

develop this generation and the transmission to deliver it, reserve margins in Arizona would drop 

below required levels in the early part of the compliance period." 

Response 4: EPA agrees with the importance of maintaining reserve margins, but disagrees 

with comments that assert the rule will harm reserve margins. The final rule provides provisions 

to ensure adequate resources and reliability. See section VIII.G.2 of the preamble for the final 

rule for a discussion of electric reliability and for the important provisions on reliability in this 

rule. Also see the Resource Adequacy and Reliability Analysis TSD for a discussion of the 

treatment of resource adequacy in the analysis of the impact of this final rule. 

8.9.3 Changes in retirements 

[No comments were received on this topic.] 

8.9.4 Changes in new capacity additions 
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Comment 1: Commenters noted that EPA's capacity expansion assumptions are flawed and 

asked that EPA "revise the capacity expansion assumptions in its analysis to reflect what 

reasonably can be achieved considering construction and operating resource requirements, 

economics, and the time required to permit, design, and construct the various generating sources 

and transmission infrastructure. Consistent data should be used for all of EPA's analyses." 

Commenters gave many examples of incorrect information: 

• "In the same April 2014 Draft DAT Replacement Files, there is a tab labeled 

"Unit Info." Focusing on nuclear units there are 5 new nuclear units identified in 

both the Base Case and Option 1 Case coming on-line between 2015 and 2018. 

These can be identified as units at Watts Bar (2015) and Vogtle and Summer (1 

each in 2017 and 2018). These 5 units are associated with the correct regions: 

SERC Central TVA, SERC Southeastern and SERCVACAR." 

• "In the Base Case there are two more nuclear units identified as coming online in 

2020 for the SERC Central TVA region. The Base Case assumes exactly 2 new 

nuclear units in EACH of the U.S. regions in the U.S. and 4 more in Canada for a 

total of 126 new nuclear units coming online in 2020. The Option 1 Case 

identifies 404 nuclear units coming online in 2020 with 14 in the SERC Central 

TVA region, 30 in NY and 20 in California. This is not realistic and lacks any 

kind of support." 

• "Further analysis indicates that in Option 1 and Option 2, there are 4,399 new 

wind installations in the U.S. coming online in 2016 and 2018 with 120 of those 

in the SERC Central TVA region. Also, there are 638 Solar and 748 Landfill Gas 

units starting up in 2016 in the U.S. The Base Case has exactly half of these 

numbers as coming online. These are not realistic estimates as they are 100 to 500 

times the average number of annual new builds over the past 10 years. If it were 

possible to design, permit, and construct such facilities within this timeframe, and 

it is not, each of the facilities would have to be connected to the transmission 

system. Determining how to do this and doing it without undermining system 

reliability will require significant additional time. None of this is realistic." 

• "In the Option 1 case there are 257 biomass fired units listed as coming online in 

2016 in the U.S. There are 14 listed for the TVA region. Again, it is not 

reasonable to expect that the number of units coming online in one year exceeds 

the currently installed units by a factor of 5 or 10. It is also not reasonable to 

expect that there is enough biomass fuel available for this many units. Although 

biomass is considered a renewable fuel, it is uncertain as to how to measure it as a 

carbon neutral generation source and therefore whether it is beneficial in reducing 

atmospheric CO2. Depending on the actual biomass fuel used, the CO2 recovery 

period will be measured in decades." 

• "In power modeling, it is normal to determine what new generating units are 

necessary to maintain the required reserve margin in each region and to plan for 

the most economical type of unit. It appears that EPA merely took the number of 
307 

new builds for Solar, Wind and Landfill Gas for the Base Case and multiplied by 

2 in each U.S. region for the Option 1 Case new builds. The number of Natural 

Gas and Biomass units in the Base Case were increased by integer factors from 2 

to 8 for regions in the U.S. for Option 1. It appears that the economics and 

geographical variability of new generating capacity were not considered in either 

the Base Case or Option 1 Case." 

• "In reviewing the supporting documents named "Proposed Clean Power Plan 

Option 1 Regional overview file.xlsx" and "Proposed Clean Power Plan Base 

Case overview file.xlsx," there are discrepancies in the capacity new build annual 

patterns as compared with the previously discussed data files. For the SERC 

Central TVA region, the overview files indicate most of the new builds occur in 

2018 whereas in the April 14 draft DAT replacement files most of the new builds 

occur in 2016. The Base Case Overview file indicates only 2 MW of capacity 

being built from 2016 thru 2020 whereas the "DAT replacement files" indicate 45 

units, mostly wind and landfill gas and 2 new nuclear units being built in that time 

frame. The "overview" files indicate more new capacity in years 2025 and 2030 

whereas the "DAT replacement files" show only 1 unit in the Base Case and 7 

units in the Option 1 case being build in 2025 and none in 2030." 

Response 1: EPA believes these comments are a misreading of the input files to the IPM 

modeling. It reads the "units" listed in the IPM DAT input file as if they represented actual units 

that were assumed, or expected, to come online is a particular year. These entries in this file are 

"model plants" that the units of capacity can choose to build in future years, based on economics 

and the conditions existing in the power grid at that time. This is a standard technique in system 

modeling, as noted in the fifth bullet in the comments. 

Comment 2: Commenters noted the importance of excess capacity. 

Commenters noted that "utilities are required by the WVPSC to have a certain amount of excess 

capacity for accommodating expected demand growth over specific periods to facilitate grid 

reliability in the event of unplanned outages." Commenters noted that "utilities must be allowed 

to recover the costs of this generation, so there should be a component of BSER that accounts for 

demand growth, even with the use of coal-fired units." 

Response 2: This rule does not conflict with state requirements for maintaining capacity. BSER 

is designed as a system for emission reductions. If a state chooses a rate limit, growth in 

existing resource can occur, as long as the state goal rate is maintained. The design of the mass 

limit provides for equivalence with this rate based approach. See further information in the GHG 

Mitigation Measures TSD and the Goal Computation TSD. 
308 

8.9.5 Reserve transfers 

[No comments were received on this topic.] 

8.9.6 Alternative case 

[No comments were received on this topic.] 

8.9.7 Other 

Comment 1: Commenters asserted that EPA's Clean Power Plan does not recognize the unique 

challenges electric cooperatives and municipalities will face in achieving the carbon emission 

reductions outlined in the Plan. 

Commenters noted that the rule is driving coal-fired generation out of the energy market, 

especially for cooperatives. Commenters stated that "EPA's proposal doesn't provide a workable 

solution to address cooperatives' unique circumstances." 

Commenters noted that "Due to their relatively small customer base, rural electric cooperatives 

are particularly vulnerable to the impacts of reduced coal generation ahead of the end of those 

EGUs useful life." 

Commenters noted that not all electric co-ops are vertically integrated; which means that 

separate power companies generate and transmit the electric power that co-ops distribute to our 

end-use member-owners. The commenters noted that this vertical "disaggregation" distinguishes 

electric co-ops from investor-owned and municipally owned utilities; the commenters have the 

limited option of supplying less than five percent of its generation requirements to meet member 

electric demands. The commenters noted that they and other cooperatives rely on long term all 

requirements contracts with wholesale suppliers for almost all of its electric capacity; therefore, 

increased regulatory costs to the wholesale suppliers will necessarily be passed on to the WREA 

and other distribution co-ops. 

Commenters noted that "The proposal fails to recognize the significant differences in utility 

systems...especially electric cooperatives." Commenters also quoted Oglethorpe Power 

Corporation, "'(s)maller utility systems would be placed at a significant disadvantage compared 

to larger systems" and "these smaller systems, which includes many electric cooperatives, 

typically have far fewer generation assets and thus considerably less flexibility and fewer options 

for compliance." Commenters noted that "Utilities also vary greatly in the mix of industrial, 

commercial and residential customers they serve.'" Commenters also noted, "When considering 

aspects of the Proposed Rule related to increased energy efficiency (Building Block 4), the 
309 

projected cost versus- benefit to implement efficiency measures and reduce usage is extremely 

unfavorable for Flint members ... and in fact is flat out not feasible." 

Commenters stated that as a vertically integrated municipal utility, providing not only 

generation, but also transmission and distribution to their customers, they own and operate 64 

miles of 138kV and 66 miles of 69 kV transmission lines for the 80 square miles of their service 

territory. Commenters stated that their original system and substations were all built on the 69kV 

transmission line, from which the majority of their load is served. Commenters stated that as part 

of the engineering and economic assessment of options to make APC and EE upgrades, they 

concluded the cost to retire these units was disproportionate to any gain. Commenters stated that 

one notable concern is the impact early retirement will have on their transmission system. 

Commenters stated that analysis of removal of 31 and 32 generation concludes reliability 

consequences of sufficient magnitude to require significant transmission upgrades and to 

mitigate these reliability issues, they would be required to install multiple new connections 

between the 69 kV to 138 kV system. Commenters stated that two engineering alternatives are 

available but costly. Commenters stated that the least expensive option that is deemed necessary 

but adequate is estimated to cost approximately $8,900,000 for upgrades that include new 

transformers and a new 138 kV line. Commenters stated that the other option, which provides 

greater benefits, is estimated to cost more ($12,216,800 in 2012 dollars). Commenters stated that 

additional facility study would be necessary to determine a more accurate cost estimate, which 

would include a short-circuit analysis and stability analysis, and would also require a very 

coordinated outage schedule to complete any upgrades and additionally, these investments would 

have to be proposed analyzed and approved by the MISO, a time consuming and expensive 

process. 

Commenters stated that other logistical and financial issues arise with the concept of closing 

units 31 and 32. Commenters stated that in addition to the transmission voltage step down costs, 

the building that serves units 31 and 32 also houses unit 33. Commenters stated that during a unit 

33 outage, heat that is currently provided by units 31 and 32 boilers to the building and would no 

longer be available. Commenters stated that while this may seem inconsequential, the estimate to 

install building heat is $1.5 million. Commenters stated that closing the plant is estimated to cost 

an additional $1M, to address closure issues such as hydrogen and oil removal and other closure 

expenses. Commenters stated that sales associated with units 31 and 32 provide significant 

income to the City's general fund by contributing 30% of revenue of sales from these units. 

Commenters stated that revenue from sales associated with units 31 and 32 are also directed to 

fund their energy efficiency programs and therefore, early retirement of units 31 and 32 would 

require the City to determine not only how to pay for the transmission voltage step down, heating 

and closure costs, but also how to raise funds for the City services and their energy efficiency 

programs. 

Response 1: EPA recognizes the importance of variations in utility systems, including the 

position of cooperatives and other public power entities. That is one of the main reasons why the 

proposal provided flexibility to state environmental agencies to design programs for reducing 

emissions to meet the needs of their utility systems – including the variety of ownership and 

control structures present in their states. In this final rule EPA has made additional changes to 

make needed adjustments to their systems, such as moving the start of compliance to 2022 and 
310 

providing a smoother interim path to the 2030 goals, and also to provide more flexible 

compliance mechanisms to states, such as trading. 

Comment 2: Commenters raised a range of general issues about the ability to maintain 

reliability under the CPP 

Commenters stated, EPA assumes that the proposed guidelines provide sufficient time and 

flexibility for states to manage the accelerated transition of the existing generating fleet that the 

rules envision. See, e.g., 79 Fed. Reg. at 34,904; see also Resource Adequacy TSD at 1. 

Commenters stated as a practical matter, and as discussed in greater detail infra, section III, state 

plans largely will rely on the four Building Blocks because there are few other options to achieve 

the same magnitude of reductions in states' average emission rates. Commenters said states may 

be able to vary the level of reductions from any particular Building Block to some degree, 

relative to the assumptions EPA made in setting the state goal rates, but few states will be able to 

forego completely any one of the Building Blocks and still demonstrate compliance with the 

2030 emission rate goal.] will not require changes to the existing interconnected power system. 

Commenters said, this is simply not true. Commenters said, a change to any part of the 

interconnected power system - even one that appears relatively minor, such as increasing the 

generation produced by an existing unit - requires an analysis of the potential impacts on the rest 

of the system. Commenters said, the multiple, larger changes proposed by EPA certainly require 

such analysis under NERC's reliability standards. Commenters stated the Southwest Power Pool 

(SPP) released a reliability assessment of the proposed guidelines, which concluded, among 

other things, that new generation and transmission expansion would be necessary to maintain 

reliability while achieving the proposed emission rate goals. See SPP, Reliability Assessment of 

the EPA's Proposed Clean Power Plan at 7 (Oct. 8, 2014), 

http://www.spp.org/publications/CPP%20Reliability%20Analysis%20Results%20Final%20Vers

ion.pdf. MISO also is analyzing the impact of the proposed guidelines will file comments in 

Docket No.EPA-HQ-OAR-2013-0602. Commenters said, in addition to new resources, changes 

in how the generation fleet is dispatched may cause significant changes in how power flows 

across the grid. Commenters said, to meet NERC standards, new transmission infrastructure may 

be required, which is not possible by 2020 because of the numerous transmission studies, 

planning and construction required to reliably integrate the changed system conditions. 

Commenters stated that with the GHG Rule as proposed, designating for Illinois and every other 

state (except one) what it considers the best mix of electricity generation and energy efficiency 

resources consistent with its predetermine goals for reducing CO2, no state could achieve these 

goals through technological or operating improvement at a facility within the source category 

that the USEPA is trying to regulate, especially coal-fired generation. Instead, a state plan would 

require wholesale changes to how the state's utilities provide electricity to the public, dictating 

electric resource choices that threaten grid reliability and affordable energy for our customers, 

the citizens and businesses of the City of Springfield. 

Commenters stated that while building blocks 2-4 cannot be BSER, EPA still needs to 

demonstrate it has authority to implement them to ensure that the reliability prong of BSER is 

met, and as EPA has acknowledged, unless it can show that the coal generation that EPA is 
311 

ordering to be reduced can be replaced, consistent with the economic prong of BSER, it cannot 

ensure that reduced generation is economic, and it cannot ensure that grid reliability will be 

maintained. 

Commenters stated that, as EPA notes, states and electric utilities, like KCP&L, are in the 

process of transitioning the generating fleet and the interstate transmission system so that it is 

cleaner and more resilient. Commenters said that KCP&Ls integrated resource plan already 

includes new wind resources additions, significant demand side management efforts, and 

potential coal plant retirements over the planning horizon. Commenters said the plan already 

models these components and the value to customers. Commenters said that the proposed state 

goals and compliance period do not account for the complexity of the interconnected power 

system adequately, nor sufficiently address how the need to maintain reliability affects the pace 

and timing of implementing changes. Commenters said that an aggressive implementation of the 

proposed guidelines by EPA could reduce the gains made by KCP&L to increase resiliency of 

the generating fleet and transmission system. 

Commenters stated that the need to maintain operational reliability while undertaking significant 

changes to the way in which power is generated, transmitted and consumed has important 

implications for EPA's BSER determination, the computation of the state-specific emission rate 

goals and the achievement of the proposed interim average goals. Commenters said it is essential 

that these changes be implemented in a way that maintains a high degree of reliability for 

electricity customers. Commenters said that while EPA does not have the expertise to assess 

fully the implications of the proposed guidelines on the interconnected power system, that does 

not mean that the Agency simply can ignore the complexity of the electric system when 

developing state-specific emission rate goals and compliance timeframes. Commenters said that 

EPA should take into account information from experts in system operations and reliability 

matters to develop achievable final goals and a workable compliance period. Commenters said 

all of the necessary information about the changes that will be required to achieve the interim 

and 2030 goals will not be available before EPA finalizes the proposed guidelines next year or 

even before states are required to submit compliance plans for EPA approval. Commenters said 

that states, electric utilities, system operators and other regulators will need sufficient time to 

assess the changes that will be required to implement the state plans and will need the time 

required to make the system changes and develop the infrastructure needed to implement the 

state plans and maintain reliability. Commenters said EPA must be willing to allow states to 

address these changes by proposing revised compliance plans as necessary to meet the 2030 

goals. 

Commenters stated that the Proposed Rule correctly describes the power sector as a "complex, 

interconnected grid system." Commenters said they fully agree that "opportunities exist in the 

power sector" that offer: 

"broader, forward-thinking approach to the design of programs to yield critical CO2 reductions 

that improve the overall power system by lowering the carbon intensity of power generation, 

while offering continued reliability and cost-effectiveness." 
312 

Commenters stated, however, the Proposed Rule does not adequately reflect the intricate 

interactions of power sector elements required for a stable, reliable, cost-effective and loweremissions grid. 

Commenters stated that, in suggesting that "the [power sector] operators themselves treat 

increments of generation as interchangeable between and among sources," the Proposed Rule 

overlooks the challenges of the changing, renewables-based energy supply. Commenters said 

this lack of consideration of reliability needs prompted the North American Electric Reliability 

Corporation ("NERC"), which is responsible for establishing reliability standards for the nation's 

energy system pursuant to the 2005 Energy Policy Act, to raise concern regarding the Clean 

Power Plan, as discussed below. Commenters said CSP+TES and other technologies can address 

the reliability challenges ahead while avoiding increases in greenhouse gas emissions. 

Commenters said without an explicit Clean Power Plan requirement for State Plans to adequately 

assess and provide for reliability needs without increasing emissions, emissions from fossilfueled generation responding to reliability needs could diminish the results that could otherwise 

be expected from State Plans. 

Commenters stated that the energy system is perhaps best thought of as an ecosystem, relying on 

a diversity of resources to supply its needs. Commenters said a disruption in the balance of 

resources serving the grid, just as with an ecosystem, can cause unintended and unwanted results. 

Commenters said that growing concern in California and the recent experience of Germany 

highlight the need to take reliable integration of the rapidly changing energy supply very 

seriously. Commenters said solutions to these issues can contribute to the Clean Power Plan's 

goals, rather than detract from them, and these solutions are increasingly available at manageable 

cost. Commenters said that failure to plan for integration needs could jeopardize the emission 

reductions anticipated by the Clean Power Plan, and cause excessive and unnecessary jumps in 

energy costs. 

Commenters stated that in Germany, where the combination of large quantities of renewable 

power and lower-cost coal facilities have driven natural gas units that normally provide 

reliability services out of the market, grid reliability responses have instead come from "cycling" 

coal plants. Commenters said cycling coal plants can decrease their efficiency (i.e. increasing 

their heat rate) and increase their emissions and costs. Commenters said that in fact, despite 

Germany's remarkable success in deploying solar energy, its carbon emissions have actually 

increased in recent years, and its residential electricity rates have risen sharply. Commenters said 

the unintended consequences of its rapid increase in renewables have caused the German 

government to reform its renewable energy program. Commenters said that the Clean Power 

Plan should learn from this experience, and avoid repeating the less salutary aspects of the 

overall German success in renewable energy deployment from the outset - by requiring State 

Plans to provide for reliability solutions that will not increase emissions. 

Commenters stated, within this decade, increased renewables in the United States could require 

conventional fossil-fired generation resources to operate at or near reliability thresholds, and to 

ramp up and down at rates that may be difficult to achieve-increasing their emissions, as well as 

their costs. Commenters said that, for example, the highest average ramp rate in California, 

which presently leads the nation in renewable energy requirements, is presently about 30 MW 

per minute. Commenters said by 2020, the highest system ramp is estimated to be three times 
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higher. Commenters said that California's energy spot market has already experienced days in 

which over-generation (in which more power is supplied to the grid than demand) has caused 

over 40% of prices to be negative, intended to induce generators to stop producing power. 

Commenters said over-generation has the effect of forcing curtailment of renewable energy 

units, thereby wasting their low-carbon energy production potential and increasing the effective 

cost of these resources-in other words, diminishing the effectiveness and increasing the cost of 

Building Block 3 measures. Commenters said that over-generation presents a more serious grid 

reliability concern than insufficient supply, as it can damage grid elements that are costly and 

time-consuming to repair (such as transformers), reduce the effective life of transmission lines 

and other equipment, and even result in blackouts or fires. Commenters said a recent study has 

shown that these over-generation conditions could substantially increase in California, absent an 

approach to procurement that better anticipates reliability and integration needs. 

Commenters stated that as the California Independent System Operator ("CAISO") has observed, 

the threat of over-generation and other concerns should be seen as a sign of success in deploying 

renewable energy, and projected reliability problems should be seen as issues that can be 

accommodated but these conditions must be addressed before the most significant changes in the 

energy supply take place. Commenters said in a proceeding before the California Public Utilities 

Commission on the long-term reliability of the grid, the CAISO recently noted that efforts are 

underway to better identify the reliability characteristics needed by the grid as the energy supply 

changes, due to the increased replacement of conventional fossil-fired resources that inherently 

provided those characteristics with renewables and other new energy sources that may not. 

Commenters said reliance on natural gas to provide these reliability needs presents its own set of 

issues. Commenters said that Western states and other stakeholders are raising reliability 

concerns about a future that substantially relies on natural gas and Building Block 2 measures. 

Commenters said natural gas-fired power plants are subject to emissions control and supply 

constraints in certain areas. Commenters said that, in addition, although natural gas prices have 

been low in recent years, gas supply remains subject to future price fluctuations, which may 

cause unexpected cost impacts and additional reliability pressure. 

Commenters stated that reliability concerns have prompted NERC to issue a report cautioning 

EPA on potential negative consequences of the Clean Power Plan. Commenters said the NERC 

report provides a perceptive analysis of the potential reliability implications of the Proposed 

Rule, including the prospects of insufficient load-following services, ramping, reactive power, 

and regulation support, as well as risks associated with natural gas supply and deliverability. 

Commenters said NERC correctly draws attention to the potential that the Clean Power Plan 

could result in increased cycling and need for increased maintenance of EGUs. Commenters said 

that these factors could well undermine and outweigh emissions reductions that the Proposed 

Rule projects as outcomes of Building Block 1 measures, which are intended to increase the 

efficiency and heat rate of EGUs. Commenters said that EPA should be aware that the reliability 

concerns raised by NERC can be addressed by CSP+TES, enabling attainment of emission 

reductions without adverse reliability consequences. 

Commenters stated that NREL, in its Western Wind and Solar Study, concluded that greenhouse 

gas reductions associated with renewables outweigh increased greenhouse gas emissions 

associated with increased cycling and maintenance of EGUs - although, importantly, it did 
314 

project an overall increase in emission of certain criteria pollutants. Commenters said EPA 

should note that NREL's study is a "best case" scenario, as it presumes that EGUs across the 

Western states would be dispatched to optimally serve energy and reliability needs throughout 

the Western Interconnection, while in reality these EGUs are located within over thirty separate 

grid balancing areas that are, for the most part, independently dispatched and optimized - 

effectively limiting optimal dispatch and meaning that cycling and maintenance issues (and their 

associated greenhouse gas and criteria pollutant emissions) could be significantly higher. 

Commenters said that proper planning and procurement of technologies such as CSP+TES can 

minimize these cycling and maintenance issues. Commenters said the need for resources that 

reduce cycling and maintenance without increasing emissions should be addressed by the Clean 

Power Plan. 

Commenters stated that they fully agree with NERC's conclusion that it is imperative to "review 

system flexibility and reliability needs while achieving the EPA's emission reduction goals." 

Commenters said emissions reductions, reliability and affordable cost outcomes cannot 

reasonably be expected to simply happen; the E3 Study demonstrates that procurement without 

explicit consideration of reliability consequences is likely to produce significant grid and cost 

problems. Commenters said in order to ensure the success of the Clean Power Plan, avoid 

unnecessary emission and energy cost increases, and stave off grid reliability threats, EPA 

should require State Plans to identify and provide for integration needs in a fashion that reduces 

greenhouse gas emissions. 

Commenters stated that CSP+TES offers many of the key values essential for consideration in a 

State's integration planning efforts. Commenters said CSP+TES plants can provide essentially all 

of the electric power products and reliability services provided by fossil-fueled plants, without 

their carbon and other emissions. Commenters said that CSP displaces the need to cycle existing 

EGUs, thereby reducing the emissions issues that result from inefficient EGU operation and 

wear-and-tear on EGU equipment; it also displaces the need to develop additional natural gasfueled capacity. Commenters said that the flexible, grid-supporting characteristics of CSP+TES 

systems can address problems associated with integrating renewable power into the grid, 

enabling renewable resources' share of the energy supply to grow while maintaining grid 

reliability. Commenters said that CSP+TES can provide a keystone to success for the Clean 

Power Plan, simultaneously providing clean energy, reducing emissions from fossil-fueled plants 

and enhancing increased deployment of other clean energy generation sources. 

Regarding Texas, other commenters noted that the Electric Reliability Council of Texas 

(ERCOT) states its "primary concern with the Clean Power Plan is that, given the ERCOT 

region's market design and existing transmission infrastructure, the timing and scale of the 

expected changes needed to reach the CO2 emission goals could have a harmful impact on 

reliability. Specifically, implementation of the Clean Power Plan in the ERCOT region, 

particularly to meet the Plan's interim goal, is likely to lead to reduced grid reliability for certain 

periods and an increase in localized grid challenges." The commenters stated that resource mix 

changes, according to ERCOT's assessment, will require major improvements to the ERCOT 

transmission system and a final rule should allow for effective management of electric system 

reliability issues that may arise due to implementation of the Clean Power Plan. The commenters 

stated that significantly more time is needed to address the state's and region's unique market 
315 

characteristics. The commenters stated that there is simply not enough time needed to orchestrate 

a plan that ensures electric reliability is not compromised. 

The EPA has not demonstrated a compelling case that proceeding with unnecessary haste 

provides any tangible environmental benefit. 

Commenters stated that given the system requirements that must be met in order to maintain 

reliability, even the seemingly simple decision to close a single fossil base load unit and replace 

it with a renewable generator requires consideration of the availability of sufficient generation to 

meet demand, the need for ramping and back-up power, the availability of natural gas supplies 

and the infrastructure to deliver it, and the implications for transmission use and for providing 

inertia, frequency and voltage control. Commenters said that choosing to increase the generation 

at an existing unit that already is interconnected to the transmission system requires 

consideration of similar issues. Commenters said managing these considerations requires a 

significant amount of rigorous and time-intensive study and coordination. 

Commenters stated the principal functions of the system operator include provision of 

transmission service and transmission planning to ensure the future reliability of the grid. [See 

FERC Order No. 2000] Commenters said they also make dispatch decisions, taking into 

consideration least cost generation, numerous reliability requirements and any existing 

transmission constraints -- which determine which EGUs run to meet demand or provide other 

grid reliability services (this is known as security-constrained economic dispatch). Commenters 

said that another key function is to manage congestion. Commenters said that in regional 

transmission operators (RTOs) and independent system operators (ISOs) this is addressed 

through competitive markets, including day ahead and real-time energy markets, capacity 

markets and other markets to address energy imbalances and provide other ancillary services. 

Commenters said the market rules and structures are subject to Federal Energy Regulatory 

Commission (FERC) jurisdiction to ensure that they produce "just and reasonable rates," as 

required by the Federal Power Act (FPA). 

Response 2: EPA believes the final rule will not disrupt any current reliability processes and is 

fully consistent with continued maintenance of grid reliability. The final rule features overall 

flexibility, a long planning and implementation horizon, and the widest possible range of options 

for states and affected EGUs to achieve the CO2 emissions goal, and an opportunity to trade 

credits or allowances. This design reflects, among other things, the EPA’s commitment to 

ensuring that the final rule does not interfere with the industry’s ability to maintain the reliability 

of the nation’s electricity supply. Given this, it is highly unlikely that there will be a situation 

where an effected EGU cannot meet its requirements under a state plan. EPA nevertheless 

requires that states address reliability in their plans and consult with relevant reliability entities in 

the planning process. 

While some have pointed out severe weather or other short-term events as potentially conflicting 

with state plans, we note that most of those events are of short duration and would not require 

major adjustments to emission standards on affected EGUs or state plans. However, should such 

a situation develop the ability to use ERCs and allowances in effect provides a safety valve. 
316 

EPA recognizes however that some states may choose to place inflexible requirements on 

individual plants as part of their state plans and not authorize the use of credits and allowances. 

Those states will be more vulnerable to an unanticipated catastrophic event that could create a 

conflict that would interfere with reliability. To address this possibility, EPA is providing a 

safety valve in the nature of a short term modification to the state plan. See Chapter VIII.G.2 of 

the preamble for EPA treatment of reliability issues in this rule. 

8.10 Other 

Comment 1: Commenters noted that EPA did not consider the following impacts related to the 

addition of new, non-coal generation and transmission facilities. 

Commenters noted "there has been no evaluation of additional operating and planning measures 

needed to support integration of significant additional renewables and of natural gas availability 

required to fuel the increased number of gas burning units." 

Commenters also noted that increased reliance on wind generation will result in a "proportional 

increase in gas burning generators" to maintain "reliable energy supplies and minimum required 

planning reserves." 

Commenters noted that EPA has underestimated energy and electricity infrastructure constraints. 

Commenters noted that financing new infrastructure may be more challenging than EPA 

assumed. Commenters noted that it is "difficult to finance construction of new pipelines before 

new markets are established." 

Commenters stated, "It is unclear whether APA fully assessed the impacts associated with the 

changes in energy resources that would occur under the agency's section 111(d) proposal." 

Commenters further stated that "EPA should not proceed to finalize existing source performance 

standards until the agency conducts a thorough impact assessment and allows for public 

comment on its proposed conclusion." 

Commenters noted that EPA has failed to consider transmission grid integration issues, such as 

voltage control and natural gas backup power. 

Commenters noted that wind and solar projects are land-intensive and EPA fails to examine the 

environmental impacts of this land development. 

Commenters noted that new transmission lines will need to be developed, which could increase 

the costs of this rule and could have environmental impacts. 

Commenters asked that EPA quantify the impacts of new generation and transmission facilities 

that are needed to replace the coal plants being closed as a result of this and other EPA 

regulations. 
317 

Response 1: The EPA disagrees with the commenters that consideration of infrastructure and 

environmental impacts were not considered by the EPA in developing the final Clean Power 

Plan. The EPA held extensive outreach with federal, state, tribal and territory organizations 

regarding these issues in developing the final rule. The EPA has conducted an extensive analysis 

of the energy and environmental impacts of the Clean Power Plan as reported in technical 

support documents such as the GHG Mitigation Measures, CO2 Emission Performance Rate and 

Goal Computation, Resource Adequacy and Reliability Analysis, Rate-based Program 

Accounting and the Regulatory Impact Analysis (RIA) developed for the final emission 

guidelines. EPA specifically discusses reliability considerations in section II.D. 3 of the 

preamble for the final rule and section 8.9 of this response to comments document. Impacts of 

the CPP are discussed in Section XI of the preamble for the final rule. 

As discussed in Section XI of the preamble for the final rule, states, tribal governments and 

territories will make the ultimate decisions as to how the emission guidelines will be 

implemented. States will be afforded flexibilities in compliance with the CPP. States may choose 

to tailor their compliance programs to consider potential local environmental impacts, as well as 

infrastructure requirements. The CPP allows for flexibilities that guarantee a continued reliance 

on a diverse energy mix in the generation of electricity, and also allows for a long 

implementation period in order to ease the impacts associated with transitioning to a lower 

carbon energy mix. 

Comment 2: Commenters suggested multiple topics related to nuclear energy that should have 

been included in the secondary impacts of this rulemaking. 

Commenters stated that "the draft rule does not appear to fulfill CAA section 111(a) requirement 

that non-air quality health and environmental impacts be evaluated." According to commenters, 

the analysis excluded radioactive waste, uranium fuel production, and nuclear accidents. 

Commenters stated that "The draft rule dismisses radioactive waste impacts resulting from 

preservation and/or increased deployment of nuclear capacity." According to commenters, "The 

EPA disregards this impact as equivalent to the solid waste impacts of coal generation, but the 

judgment appears to be qualitative as the draft rule does not include a technical analysis to 

support such a claim." Commenters stated "there are multiple forms of radioactive waste that are 

directly generated by the operation of commercial nuclear reactors, including: (1) Irradiated 

nuclear fuel and other high-level radioactive waste (HLRW); (2)Contaminated reactor equipment 

and other low-level radioactive waste (LLRW) produced during the decommissioning and site 

remediation process; (3) Solid and liquid radioactive effluents released to the environment during 

normal reactor operation; (4) LLRW generated during routine operation, from contaminated 

parts and equipment to uniforms and protective gear; and (5) Highly radioactive solid waste 

particles ("crud") from the primary coolant system." Commenters stated "The EPA must consider 

the incremental costs of additional waste generated by the construction of new reactors and the 

continued operation of existing reactors, which are not only considerable but would potentially 

surpass the cost of any other energy alternative over the long and indefinite periods under which 

they may be incurred." 
318 

Commenters also stated that EPA must also consider "the full cost of decommissioning reactors 

in construction." 

Commenters stated that "The production of nuclear fuel entails significant environmental 

impacts, including public health, environmental justice, and economic costs" and noted that "The 

impacts of uranium mining and fuel production should also disqualify nuclear from inclusion in 

the Clean Power Plan's best system of emissions reduction." 

Commenters noted that the rule does not account for "the potential for radiological accidents 

resulting from continued operation of existing reactors and the deployment of additional, new 

reactors." 

Commenters stated that "Ignoring the vast financial costs and human health and environmental 

impacts stemming from reactor accidents distorts the evaluation of nuclear in the rule." 

Commenters noted that there are a number of radionuclides released from nuclear energy 

facilities and chose to focus on the impacts of carbon-14 for the following reasons: 

• "Carbon-14 is released into air as methane and carbon dioxide, and into water" 

and "is also radioactive, thereby bridging air and non-air issues as applies to the 

current proposed rule." 

• "Carbon-14 has a half-life of over 5700 years and the element carbon is a basic 

building block for life on earth. Therefore, "it constitutes a potential health 

hazard, whose additional production by anthropogenic sources of today will result 

in an increased radiation exposure to many future generations." 

• "Like tritium, it can collect in the tissues of the fetus at twice the concentration of 

the tissues in the mother, pointing to its disproportionate impact on the most 

vulnerable stage of the human lifecycle." 

• "In a nasty irony, release of non-radioactive carbon by fossil fuel combustion had 

diluted the uptake of naturally occurring radioactive carbon, actually lowering the 

dose humans received, thereby mitigating natural carbon-14's radioactive impact 

on human health. Called the Seuss effect, it was overtaken after about 1950 with 

the carbon-14 release from nuclear power and nuclear weapons. What happens 

when the non-radioactive carbon from fossil fuel production is replaced by 

carbon-14 producing nuclear power? Will biological systems take up not only 

more naturally occurring carbon-14, as before, but also more carbon-14 from 

nuclear emissions?" 

Commenters stated, "Any non-air quality health and environmental impact and energy 

requirements needed study if nuclear was to be part of the performance standards." Commenters 

noted the following: "aging fleet of nuclear reactors, all with significant safety problems and 

long term storage of highly radioactive nuclear spent fuel on site." 

Commenters commented that nuclear energy is not emissions free and noted the following: 
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• "Nuclear Fission from energy production is one of the hottest activities man 

conducts and nuclear fission's thermal pollution impacts on the earth's eco and 

biospheres have not been included in the climate change conversation." 

• "To date nuclear energy only produces approximately 11% of the earth's 

electricity, yet it produces enough Btus of Nuclear Heat Waste to melt 25% of the 

earth's ice." 

• "Once started the nuclear fission chain reaction continues producing nuclear heat 

waste until all the half-lives of the newly created radioisotopes are exhausted" and 

"it remains thermally HOT for thousands of years." 

• "nuclear energy production the most water intensive form of energy production 

due to the large need of water to constantly cool the hot radioactive elements." 

• after use, the water can be dumped back into water bodies and "The heat 

shock/thermal impact negatively impacts tens of millions of fish" 

• uncontained radioactive leaks, including strontium-90 and tritium 

• "Non-carbon emission hazards of low level nuclear emissions from nuclear 

energy production, despite The National Academy of Sciences study from the late 

1990s, commonly referred to as the Bier Vll report, stated that no amount of 

continuous exposure to low-level radiation is safe"

• "EPA does not consider the health costs, to individual and national health care." 

• "Nor, has the EPA considered the impacts on low level radioactive emission on 

reproductive health, women, infants, young children, especially young girls." 

• "Uranium and other toxic minerals are the fuel for nuclear energy. These fuels are 

finite, not renewable. Mining of nuclear fuels negatively impacts human health, 

water resources and land of many environmental justice communities." 

• sequestration of nuclear waste includes the following risks: "groundwater seeping 

into the repository, corrosion of waste containers, leaching of radionuclides, and 

migration of contaminated groundwater towards areas where it might be used as 

drinking water or for agriculture" 

Commenters noted "The EPA rule contains a number of provisions that could expand or prolong 

the use of dangerous and polluting fuels, including the burning of coal, garbage, natural gas, 

forests and uranium, rather than encourage a transition to healthier solutions like energy 

efficiency and clean renewables." 

Commenters asked that EPA "fully assess and appreciate the environmental impacts of the 

nuclear life-cycle." 
320 

Response 2: In response to comments received relating to nuclear generation, EPA has modified 

the final rule in this regard. The final rule Best System of Emission Reductions (BSER) reflects 

certain changes from the proposed rule, based on EPA’s consideration of comments received and 

further analysis. The principal changes are the exclusion from the BSER of emission reductions 

achievable through demand-side energy efficiency and through nuclear generation; a revised 

approach to determination of emission reductions achievable through increased renewable 

energy generation, based on an alternate approach on which EPA solicited comment in the 

proposed rule; a consistent approach to determination of emission reductions achievable through 

all the building blocks that better reflects the regional nature of the electricity system; and a 

revised interim goal period of 2022 to 2029 (instead of the proposed interim period of 2020 to 

2029). These changes to the BSER and the building blocks are discussed in more detail in 

section V of the preamble for the final rule. 

In the June 2014 proposal, the EPA also identified the replacement of generation from fossil 

fuel-fired EGUs with generation from nuclear units as a potential approach for reducing CO2

emissions from the affected source category. EPA proposed to include two elements of nuclear 

generation in the BSER: an element representing projected generation from nuclear units under 

construction, and an element representing preserved generation from existing nuclear generating 

capacity at risk of retirement. 

Generation from new renewable energy (RE) generating capacity, generation from new nuclear 

generating capacity can clearly replace fossil fuel-fired generation and thereby reduce CO2

emissions. However, there are also important differences between these types of low- or zeroCO2 generation. Investments in new nuclear capacity are very large, "lumpy," capital-intensive 

investments and the building of nuclear facilities historically has been subject to delays and 

substantial risks of non-completion, both of which tend to raise costs. By comparison, 

investments in new RE generating capacity are relatively small and low-risk. Based on the small 

number of new nuclear generating projects, it is difficult to ascertain a trend of increasing 

nuclear generation in the industry. These differences create greater uncertainty regarding the 

achievability and cost of generation from new nuclear capacity as a replacement for fossil fuelfired generation, two important factors in determination of the BSER. Accordingly, as described 

in section V of the preamble for the final rule, the EPA is not finalizing increased generation 

from new nuclear capacity as a component of the BSER. 

The EPA is likewise not finalizing the proposal to include a component representing preserved 

existing nuclear generation in the BSER. On further consideration, EPA believes it is 

inappropriate to base the BSER on elements that will not reduce CO2 emissions from affected 

EGUs below current levels. Existing nuclear generation helps make existing CO2 emissions 

lower than they would otherwise be, but will not further lower CO2 emissions below current 

levels. Accordingly as described in section V of the preamble, the EPA is not finalizing 

preservation of generation from existing nuclear capacity as a component of the BSER. 

Comment 3: Commenters noted that the rule has impacts on water usage and water resources. 
321 

Commenters "developed a new power sector model that accounts for water use." According to 

commenters, "neither EPA nor the Energy Information Administration (EIA) have policy models 

that can estimate changes to water use in the power sector under different regulations." 

Commenters stated that, when compared to coal use, "energy efficiency, renewable energy, and 

natural gas also cut carbon dioxide emissions in roughly the same proportions that they save 

water." According to commenters, "Since these strategies are the basis for the building blocks 

proposed in the Clean Power Plan, this means that the plan will not only reduce CO2 emissions, 

but also cut water use in the power sector." Commenters stated that "the implementation of the 

Clean Power Plan in Texas would further increase water savings in the State by about two-thirds 

more compared to the baseline, from a 15 percent drop to a 25 percent drop." 

Commenters noted that water usage "could also be an Achilles heel in the long-term 

sustainability of hydraulic fracturing and natural gas production." 

Commenters noted that "The U.S. energy policy must soon take a more accurate accounting of 

reducing water usage in a sustainable strategy." Commenters stated, "The issues with too much 

water usage going to energy generation can no longer be separated from energy policy, air 

quality policy and greenhouse gas reduction policy. We need sustainable policy solutions." 

Commenters stated, "The entire energy market is increasingly vulnerable to the current and 

future drought conditions found in the U.S. and the larger issue of high water usage from the 

energy sector is not being factored into strategic planning." Commenters asked "What are the 

best adaptive management strategies in the energy sector for controlling water use and 

generating more power from low water use generation sources?" and "Should these water 

resource management strategies be included in the EPA rules or development further in other 

regulatory schemes?" 

Commenters stated that "The EPA should have conducted a more meaningful evaluation of the 

water resource impacts of including nuclear in the BSER, particularly considering the impact of 

nuclear in areas of the country that have experienced droughts, such as Georgia." 

Commenters asked that the costs to the water sector be considered in any reliability analyses. 

Commenters stated, "The electricity sector's current and future resiliency should be considered 

while EPA finalizes its CPP, especially in terms of the sector's water intensity." Commenters 

also stated, "The smart, resilient and less water-intensive energy choices we make today will 

have long-lasting benefits for the country's economic and environmental health." 

Response 3: Comments received on this topic were mixed with some commenters asserting that 

the CPP will create more demand for water resources and other commenters stating that "energy 

efficiency, renewable energy, and natural gas also cut carbon dioxide emissions in roughly the 

same proportions that they save water." The EPA agrees with the commenter’s statement that 

"The smart, resilient and less water-intensive energy choices we make today will have longlasting benefits for the country's economic and environmental health." The EPA recognizes that 

qualitatively assessing water impacts of the CPP is complex and is dependent in part on actions 

ultimately taken to comply with the emission guidelines. The CPP is designed to reduce CO2
322 

emissions from electric generating units, the largest domestic stationary source of emissions of 

CO2, and CO2 is the most prevalent of the group of air pollutant GHG that the EPA has 

determined endangers public health and welfare through its contribution to climate change. 

Climate change impacts touch nearly every aspect of public welfare. Among the multiple threats 

caused by human emissions of GHGs, climate changes are expected to place large areas of the 

country at serious risk of reduced water supplies, increased water pollution, and increased 

occurrence of extreme events such as floods and drought. As previously stated, this rulemaking 

is designed to reduce CO2 emissions that contribute to climate change and these negative impacts 

on water resources. 

While certain types of electricity generation and fuel sources do use water resources, the EPA 

also recognizes that increased use of renewable energy (RE) provides numerous benefits in 

addition to lower CO2 emissions. Specifically, RE typically consumes less water than fossil fuelfired EGUs. Wind power and solar PV systems do not require the use of any water to generate 

electricity; water is only needed for cleaning to ensure efficient operation. States will make the 

ultimate decisions regarding implementation planning and will be able to address water related 

issues specific to their state. 

Comment 4: Commenters noted that the rule will have an adverse effect on stormwater 

compliance at an energy generation site in Orlando Florida. Although not subject to the rule, the 

loss of coal units will have an adverse effect on this energy generation site owned by 

commenters. 

Commenters stated the following: 

"The site was designed in the early 1980s with a visionary approach. It utilized recycled water 

from a nearby wastewater treatment plant to be used in the cooling towers and prohibited the 

runoff of any stormwater from the site. Florida has an average of 54 inches of rainfall each year, 

which makes managing and storing stormwater a significant undertaking. The water is directed 

and stored in ponds 2-6 as depicted on figure 1, which are all lined to meet the requirements for 

contact water on an industrial site. There is no offsite discharge of stormwater at SEC, so the 

contact water never conveys to waters of the United States. This stored stormwater is then 

processed through the SEC Stormwater Treatment Facility, consisting of a brine concentrating 

crystallization falling film evaporation process. A common description of this process in the 

industry is a cooling tower blow down treatment facility that converts it to steam through hydric 

scrubbers to achieve compliance with the Section 112 requirements. The SEC site also utilizes 

wastewater from Orange County, Florida to meet other generation needs and that water is 

evaporated as a part of the generation process. This partnership has provided a large scale use for 

treated wastewater while limiting the demand at SEC from potable resources to be zero. OUC 

relies on the resource to produce steam and Orange County Utility Department relies on OUC as 

a source for beneficial use of the county wastewater. If the OUC demand is removed the County 

does not have the infrastructure to re-route the entire volume of wastewater, especially during the 

wet season and will have to discharge this beneficial resource in a wasteful manner." 
323 

"An additional side effect of CPP on OUC is that, with the loss of full operation of both of 

OUC's coal units, the efficient design of our site does not provide for the management of the 

Florida summer rains (which average 54 inches) and the associated industrial contact and the 

additional stormwater. Therefore, OUC would be required to design, permit, and construct other 

means to manage and store this stormwater at an additional projected cost of at least $50 million. 

Because OUC does not discharge into Waters of the United States we now are not included in 

the new Proposed Rule and definitional modification. The alternatives we will have to 

investigate will include deep well injection in an area without a confining layer or treatment of 

the stormwater to at least Class 1 standards to meet the water quality criteria in downstream 

protected water bodies." 

Response 4: The EPA recognizes there are a variety of potential impacts associated with 

implementing the Clean Power Plan that states, tribes, and territories should consider in 

developing implementation plans including effects on local infrastructure. This final rule allows 

states considerable flexibility with respect to the timeframes for plan development and 

implementation, as well as the choice of emission reduction measures. The final rule provides up 

to 2030 for full implementation of all emission reduction measures, with incremental steps for 

planning and then for demonstration of CO2 reductions that will ensure that progress is being 

made in achieving CO2 emission reductions. States will be able to choose from a wide range of 

emission reduction measures, including measures that are not part of the Best System of 

Emission (BSER) reductions, as discussed in detail in Section VIII of the preamble. 

Comment 5: Commenters noted that the impacts analysis did not include the consequences of 

increasing the amount of fracking (unconventional hydraulic fracturing) in the United States in 

order to respond to the increased natural gas usage that will result from this rule. 

Commenters noted the following: "There is ample reason to believe that [hydraulic fracturing] 

has significant and widespread impacts on groundwater contamination and methane leakage, 

both of which have significant impacts on the public health and welfare of the United States." 

Commenters also noted that "increasing reliance on natural gas may lead to even larger climate 

change impacts, since methane is also a greenhouse gas that the EPA has recognized as having a 

far greater global warming potential than carbon dioxide, up to 20 times greater over a 100-year 

period." 

Commenters noted the following: 

• "the process of hydraulic fracturing will lead to further contamination of 

groundwater supplies" 

• "recent reports of earthquakes that appear to be triggered by the injection of 

hydraulic fracturing wastes into deep wells are troublesome." 

Commenters noted that there are "considerable impacts to air, land and water resources due to 

natural gas exploration and development activity." Commenters asked for "Better management, 

mitigation and awareness of the impacts to public resources are needed, especially in relation to 
324 

public lands, waters, air quality, and GHG emissions." Commenters also raised the issue of 

"methane leakage from our ever-expanding network of natural gas fields and distribution 

pipelines" that could "offset much of the climate benefit expected by converting from coal to 

natural gas." 

Commenters noted that the rulemaking did not evaluate the consequences of the following: 

• "air and water contamination from drilling and fracking operations" 

• "unsafe waste disposal" 

• "earthquakes" 

• "ecological impacts, and damage to roads, property, and communities caused by 

the boom-bust cycle inherent to this extractive industry". 

Commenters cited a "compendium of fully-cited reports, studies, and articles compiled by 

Concerned Health Professionals of New York, which describe the many risks and harms of 

fracking, including its impact on climate change."[Compendium of Scientific, Medical, and 

Media Findings Demonstrating Risks and Harms of Fracking (Unconventional Gas and Oil 

Extraction), Concerned Health Professionals of New York, July 10, 2014. 

http://concernedhealthny.org/compendium/]" 

Commenters noted that fracking can: 

• "Fragment forests and mar landscapes with new roads, well sites, waste pits and 

pipelines;" 

• "Compete with farmers for local water supplies while consuming millions of 

gallons of water for each fracked well;" 

• "Produce massive volumes of toxic and even radioactive waste, the disposal of 

which is causing earthquakes and putting at risk drinking water resources;" 

• "Cause thousands of accidents, leaks and spills each year that threaten public 

health and safety and put at risk rivers, streams, shallow aquifers and farms;" 

• "Pump hazardous pollutants into the air, at the expense of local communities, 

families and farms;" 

• "Turn homes into explosive hazards by contaminating water wells with methane 

and other flammable gases;" 

• "Put vital aquifers at risk for generations by creating new pathways for the 

potential flow of contaminants over the coming years and decades" 
325 

• "Disrupt local communities, with broad physical and mental health consequences; 

increased demand on emergency and other social services, damage to public 

roads, declines in property value, increased crime, and losses felt in established 

sectors of local economies. When combined with the potential for increased risk 

of climate change due to methane leakage, these health risks demonstrate how 

misguided this plan truly is." 

Commenters listed the following impacts of increasing the supply of shale gas: 

• Groundwater quantity and quality from increased shale gas development 

• Air Quality impacts from shale development 

• Earthquakes 

• Impacts from building out natural gas infrastructure to meet power sector demand 

for natural gas. 

Commenters stated that they are concerned about how the rules define "clean power" and the 

plan's heavy reliance on conversion from coal to natural gas. Commenters said natural gas 

obtained by hydraulic fracturing is not clean from a public health or climate perspective. 

Commenters said fracking is associated with local and regional air pollution, adverse birth 

outcomes and contamination of drinking water. Commenters said the metrics used by the EPA to 

predict the effectiveness of this strategy have been questioned. Commenters said emission 

estimates should encompass the entire life cycle of fuel instead of just carbon emissions from the 

smokestack. 

Commenters, regional networks of grassroots community organizations, stated that the proposed 

rule encourages fuel-shifting from coal to natural gas without considering the significant 

environmental, public health, economic, and societal harms related to the extraction of natural 

gas. Commenters stated that gas development today, which often involves the dangerous process 

of horizontal high-volume hydraulic fracturing ("fracking"), is largely unregulated and enjoys 

broad exemptions from landmark environmental laws, including the Clean Air Act, the Safe 

Drinking Water Act, and laws regulating hazardous wastes. Commenters stated that the proposed 

federal guidelines under CAA section 111(d) go to great lengths to describe the benefits of 

reducing coal consumption, but the proposed guidelines fail to evaluate the negative 

consequences of increased natural gas production and related infrastructure, including air and 

water contamination, unsafe waste disposal, earthquakes, ecological impacts, and damage to 

roads, property, and communities caused by the boom-bust cycle inherent to extractive industry. 

Commenters also submitted a recently assembled compendium of fully-cited reports, studies, and 

articles compiled by Concerned Health Professionals of New York, which describe the many 

risks and harms of fracking, including its impact on climate change. 

Commenters opposed the proposal because of building block 2 and the heavy reliance on 

expanding the use of natural gas for electricity generation. These commenters believed that 

increasing the demand for natural gas will increase natural gas venting and fugitive emissions of 

methane from natural gas production, transmission, and distribution. These commenters believed 
326 

that the agency must simultaneously promulgate GHG standards for reducing natural gas venting 

and fugitive emissions from natural gas systems. Commenters stated that the proposal to 

designate natural gas and nuclear power as BSER is not based on a documented, internally 

consistent, or fair analysis because the proposal relies heavily on natural gas for carbon emission 

reductions. Commenters stated that the proposal was based only on industry data for venting and 

fugitive methane emissions, and the proposal ignores peer reviewed literature that indicates 

much higher methane emissions from venting and fugitive sources. 

Commenters opposed finalizing the proposed rule before the EPA also promulgates a standard 

for natural gas venting and fugitives because if the proposed rule was finalized large-scale 

investments in new gas-fired power plants would soon follow. Commenters were concerned that 

further study by the EPA on fugitive emissions from fracking may indicate emissions are much 

higher than the estimates used for the proposal, and commenters were concerned that curtailing 

fugitive emissions from fracking may be an intractable problem. Given these concerns, 

commenters stated that the Agency will not be in a position to reverse course and require the 

newly constructed gas plants to retire. For these reasons, commenters believed that fugitive 

emissions associated with shale gas must be addressed in the proposed rule. 

Commenters believed that the proposed rule's endorsement of natural gas as a strategy for 

combating climate change is fundamentally flawed and not supported by science. Commenters 

disagreed with the proposal's characterization of natural gas as "clean" because commenters 

believed that the best science shows that systemic venting and leakage of methane that occurs 

during extraction, processing, and transport, along with carbon dioxide released during its 

combustion, substantially or completely offsets the benefits that natural gas-fired generation has 

over coal-fired generation with respect to climate change. Commenters recommended that the 

entire supply chain for gas development should be considered as a single process in analyses 

published to support the final federal guidelines for state plans. 

Commenters stated that the environmental concerns regarding the use of fracked natural gas are 

numerous and deserve the agency's attention in conjunction with adoption of these 

guidelines. Commenters stated that if the goal is to reduce greenhouse gas emissions, then the 

expected increase in emissions of methane associated with production, transmission, and burning 

of fracked gas must be fully accounted for, and if the goal is to achieve a healthier environment, 

then the increase in air and water pollution associated with the production, transmission, and 

burning of fracked gas must be accounted for and remedied. Commenters provided a link to a 

compendium of the scientific, medical, and media findings that demonstrate the risk and harms 

of fracking. 

Commenters stated that it is crucial that methane pollution from natural gas production and 

transport be accounted for and reduced as part of an overall strategy to reduce carbon emissions 

and combat climate change, and President Obama has committed to taking action on methane as 

part of his Climate Action Plan. Commenters stated that it is vital that EPA, along with its sister 

agency the Department of Interior's Bureau of Land Management, move forward with strong 

rulemaking to limit methane pollution from new and existing sources of natural gas and oil 

production on both public and private lands; otherwise, emissions reductions from use of natural 

gas at power plants may not be realized. 
327 

Commenters stated the proposed rule for existing power plants is only a first step in fulfilling our 

obligation to protect the health of our residents while meeting the challenge of climate 

change. Commenters urged the EPA to continue to take action in regulation of methane 

emissions as prescribed in the Climate Action Plan from March 2014 Strategy to Reduce 

Methane Emissions. Commenters stated that according to the IPCC, methane as a greenhouse 

gas is more than 80 times potent as carbon dioxide over a 20-year period. Commenters stated 

that wellheads, pipes, valves, pressures, and even abandoned wells are releasing increasing 

volumes of methane into our atmosphere. Commenters stated that about 30 percent of all 

methane emissions are derived from natural gas and petroleum systems. Commenters stated that 

best practices and appropriate regulation must be enacted and enforced to reduce this greenhouse 

gas. Commenters stated the EPA must assume responsibility for setting the standards to 

minimize the risk. 

Commenters provided comments pertaining to promoting natural gas as a clean alternative to 

coal in the Clean Power Plan. Commenters stated that by not including limits on methane 

emissions as well, the EPA is diluting its efforts to reduce global warming. Commenters noted 

methane is more potent greenhouse gas than carbon. Commenters stated that when total lifecycle 

methane emissions from fracked natural gas are included, burning natural gas is equivalent to 

burning coal in terms of global warming. Commenters stated the EPA has underestimated 

methane emissions significantly. Commenters stated methane, like carbon, is a greenhouse 

gas. Commenters indicated it is a more potent greenhouse gas than carbon, 100 percent more 

potent because of the way it works in the atmosphere over a 20-year period. Commenters stated 

fracking for natural gas results in releasing unburned methane at all stages of the fracking 

process. Commenters stated that experts tell them that if total methane emissions throughout the 

lifecycle of fracked natural gas reached three percent and has a fuel that is equal to burning coal 

in terms of global warming. Commenters indicated the most conservative average for methane 

released during the lifecycle of fracking is 5 percent to 7 percent, well above the 3 percent. 

Commenters stated the EPA's own study entitled "Improvements Needed and EPA Efforts to 

Address Methane Emissions from Natural Gas Distribution Pipelines," issued on July 25, 2014, 

cautions that methane emissions from pipelines have been grossly underestimated. Commenters 

noted a study entitled "Methane Leakage from North American Natural Gas Systems," published 

in the February 14, 2014, issue of the Journal of Science synthesizes diverse findings for more 

than 200 studies ranging in scope from local gas processing plants to total emissions from the US 

and Canada. Commenters quoted the article, "People who go out and actually measure methane 

pretty consistently find more emissions than we expect," says the lead author, Adam Brandt. 

Commenters also quoted, "Atmospheric tests covering the entire country indicating emissions 

around 50 percent more than the EPA estimates," said Brandt, and that is a moderate 

estimate. Commenters stated the EPA estimates are based on voluntary reporting of methane 

emissions from the natural gas industry. 

Commenters stated that it is important that the EPA include the release of all greenhouse gas 

emissions, not just carbon dioxide in its regulations. Commenters stated methane gas, released by 

high-volume horizontal hydro-fracking is 80 times more potent a greenhouse gas than carbon 

dioxide in the first 20 years of its release to the atmosphere. Commenters stated NASA scientists 

have found that methane may actually have as much as 105 times more potency than CO2 in the 

same period. Commenters stated the EPA, however, has been using a much shorter 100-year 
328 

time frame and, thereby, calculates the effect of methane as only 20 to 25 times more potent than 

carbon dioxide. Commenters stated due to the potency of methane, any leakage of the gas of 

more than two percent makes it a more dangerous greenhouse gas than carbon dioxide. 

Commenters stated studies by NOAA of methane leakage from high-volume horizontal drilling 

for gas in the western U.S. shows annual leakage of between 2.3 percent and 17 percent from 

drilling and venting along pipelines, compressor stations, and storage facilities. Commenters 

indicated the fracking industry itself admits that some 5 to 7 percent of its high volume wells 

leak in the first year of their drilling, and that after 30 years, up to 35 percent of its wells leak 

methane. Commenters stated that a recent study from the magazine Science, finds that the EPA 

has seriously underestimated the release of methane from fracking. Commenters indicated 

that to define methane gas obtained from high-volume, high-pressure hydro-fracked wells as 

clean energy is erroneous. 

Commenters cited a study by Robert W. Howarth entitled "A Bridge to Nowhere: Methane 

Emissions and the Greenhouse Gas Footprint of Natural Gas" published in Energy Science & 

Engineering in April 2014 (available at 

http://onlinelibrary.wiley.com/doi/10.1002/ese3.35/pdf). Commenters stated that measurements 

by the NOAA and several other independent analyses indicate that at least 3 percent and 

potentially more than 7 percent of methane from natural gas is lost to the atmosphere prior to 

burning - far exceeding EPA estimates. Commenters stated that based on the most recent IPCC 

20-year GWP for methane, a leakage rate of 2.8 percent or higher actually causes natural gas to 

be more damaging than coal as a driver of climate change. 

Commenters cited a study by Robert Howers, et al, from 2011 that concluded fugitive emissions 

and production losses of methane from natural gas fractured rock production practices have a 

higher climate change impact than coal-fired combustion. Commenters stated that the EPA has 

ignored this study and other studies that reached similar conclusions. Commenters stated that the 

problem with looking at the 100-year time period instead of the 20-year time period was summed 

up in an article by Joe Ron aptly titled, By the Time Natural Gas has a Net Climate Benefit, You 

Will Likely Be Dead and the Climate Ruined. 

Commenters stated that a full review of available data indicates that the level of emission 

reductions achievable by the proposed federal guideline may be negated by the greenhouse gas 

impacts of expanding natural gas production and associated venting. Commenters stated that the 

final rule should include accurate calculations of the expected increases in GHG emissions from 

the natural gas sector from implementing building block 2) corrected for the GWP of methane 

over a period of 10 years to ensure the switch from coal to natural gas will have the intended 

effect on climate change. Commenters also stated that the leak rates assumed in the proposal for 

natural gas systems are incorrect based on atmospheric measurements taken by NOAA in 2012. 

Commenters stated that the measurements by NOAA indicated leak rates ranged from 4 to 18 

percent in various regions compared to the 2.5 percent leak rate used for proposal. Commenters 

also referenced a series of articles by two Cornell professors, Dr. Tony Agrafia and Dr. Robert 

Howorth that corroborated the leak rates published by NOAA. 

Commenters stated that only EGUs that can show they burn natural gas that is supplied by 

production, transmission, and distribution systems with a leak rate of less than half a percent 

should be allowed to displace coal units under building block 2. Commenters stated that the 
329 

Environmental Defense Fund and the University of Texas have shown that a leak rate of less 

than half a percent is achievable when natural gas systems are properly operated. 

Commenters supported the use of building block 1 in the proposal and stated that greater 

reductions of carbon emissions at coal plants are available if power plants simply match the 

lowest emission rate actually achieved by the plant over the past decade. 

Commenters stated total lifecycle emissions from methane gas-fired plants must be addressed. 

Commenters said, methane is a greenhouse gas even more potent than carbon. Commenters said, 

the rule does not address total lifecycle emissions from methane gas-fired plants, including 

leakage during production, processing and transmission, emissions flarings at gas wells, and 

energy consumed in production and transport of liquefied natural gas. Commenters said, 

researchers found methane leak rates of 100 to 1,000 times greater than the EPA estimates at 

well pads in Pennsylvania, and the EPA's office of the Inspector General just issued a report 

citing the Agency's failures to manage methane leaks from pipelines. 

Commenters stated that while natural gas is seen as a bridge fuel by the Obama administration, 

in a State horribly wrecked by hydraulic fracturing, Pennsylvanians know it is not the answer. 

Commenters stated methane escapes from natural gas drilling have a significantly greater global 

warming in the short term than carbon dioxide, according to NASA. 

Commenters stated, if the goal is to reduce greenhouse gas emissions, then the expected increase 

in emissions of methane associated with production, transmission, and burning of fracked gas 

must be fully accounted for. 

Commenters called upon the EPA to properly calculate the greenhouse effect of methane gas 

over a reasonable timeline, as well as to measure the release of methane from the high-volume 

horizontal drilling technology. Commenters indicated this will permit the establishment of CO2 

equivalents for released methane and to accurately calculate the greenhouse gas effects of 

fracked methane. Commenters stated proper steps must then be taken to control methane release 

and, if necessary, actually to ban high-volume hydro-fracking. 

Commenters, graduate students, urged the EPA to impose an immediate moratorium on 

additional drilling for oil and natural gas in Colorado because their colleagues at the university 

have empirical evidence that methane emissions are 60 percent higher than assumed for the 

proposal. Commenters believed the moratorium should stay in place until we have the science 

that proves beyond a doubt that it is safe. 

Commenters stated a range of studies have shown high level of methane leaks from gas drilling 

and fracking operations, undermining the notion that natural gas is a climate solution or a 

transition fuel. Commenters noted that major studies have concluded that early work by the EPA 

greatly underestimated the impacts of methane and natural gas drilling on the climate. 

Commenters stated that the EPA's estimate for methane contribution to climate change is too 

low. Commenters indicated the EPA has significantly underestimated emission rates of methane 

from active gas fields, and has underestimated the warming potential of methane. Commenters 

noted the EPA must account for increases in the amount of methane emissions from gas-fired 
330 

power plants which result from coal-fired power plants converting the gas or from new gaspowered plants. Commenters stated the EPA's estimates for methane contribution to climate 

change still lag far behind scientific consensus, which deemphasizes the impact that the natural 

gas sector will have on climate change. Commenters stated a recent study published in 

the National Academy of Sciences found that emissions rates of methane from active gas fields 

were 1,000 times higher than EPA estimates. Commenters stated the IPCC recently reported that 

methane is 86 times more potent at warming our planet than carbon over a 20-year time period, 

while research by a NASA scientist shows that methane is 105 times more potent when including 

aerosol effects. Commenters noted the EPA's global warming potential of 25 is inadequate for 

studying regulations. Commenters indicated the lifecycle emissions from the gas industry may 

already be worse for the climate than coal. Commenters stated methane emissions will increase if 

plants switch to natural gas when methane emissions from active gas fields are considered. 

Commenters stated the EPA should also set methane emission reduction targets for oil and gas 

industry. Commenters stated that in addition, the EPA must move quickly on setting ambitious 

methane reduction targets or regulations for the oil and gas industry. 

Commenters stated that the EPA has to step up and directly regulate methane, both from oil and 

gas and coproducing wells, during gas production, during gas processing, and during transport on 

new and existing wells. 

Commenters stated that the Clean Power Plan will not solve climate change in isolation. 

Commenters indicated that as a nation, we will have to tackle methane leaks from oil and gas. 

Commenters stated, if you know anything about fracking, the government has given their state 

[PA] over as a sacrifice zone to the natural gas industry, and commenters hoped at some point 

[EPA] will also regulate methane, which is a much more powerful gas than CO2. 

Commenters stated, one-hundred miles away they are developing an oil field at an amazing pace 

in the Bakken Region of North Dakota and Montana. Commenters indicated there is natural gas 

that is a by-product and is simply being flared and wasted. Commenters stated we should salvage 

all the natural gas now being wasted. Commenters stated methane emissions are a greenhouse 

gas that must be looked at in addition to carbon dioxide. Commenters indicated it is critical that 

the BLM's proposal to limit flaring and venting of methane and the EPA's methane pollution 

standards move forward. Commenters noted that otherwise, switching from coal to natural gas 

could make climate change worse, not better. Commenters stated even with better controls on 

methane, though, promoting natural gas is not a good solution to climate change; energy 

efficiency and renewable energy are much better. 

Commenters stated that EPA should account for carbon dioxide equivalents, not just CO2 in 

order to encompass other greenhouse gases that are emitted from the extraction, storage, 

transport and generation components of fuel combustion. Commenters cited, as an example, 

methane emissions that can be released during natural gas extraction and transport. 

Commenters urged the EPA to act quickly to release meaningful standards for methane, 

particularly extract[ion] of methane. 
331 

Commenters stated that without including limits on methane emissions, the EPA will be leaving 

out a massively important source of greenhouse gas emissions. Commenters noted that other 

witnesses have testified that methane has a severe impact on greenhouse gas versus carbon 

dioxide on the 20-year term. Commenters thought methane leakage, especially at the point of 

extraction is a major concern. 

Commenters stated the International Energy Agency tells us that two-thirds of proven fossil fuel 

reserves must be kept in the ground to prevent potential catastrophic consequences. Commenters 

noted this includes natural gas and oil. Commenters stated about one-third of the total U.S. 

methane emissions are responsible for greenhouse gas emissions [sic]. Commenters added the 

new unconventional gas wells are also emitting toxins like benzene, and radon, that are then sent 

through compressor stations and pipelines. Commenters stated that several studies have shown 

that overall, methane emissions are considerably higher than official inventories report. 

Commenters stated that without sensible health based regulations for the unconventional, natural 

gas industry, the economic and health benefits of the proposed rule will be undone and create 

potentially equally daunting challenges for future Pennsylvanians. Commenters indicated the 

EPA and Pennsylvania DEP should (1) require best available technology for capturing 

unintended methane emissions, green completions and close wastewater systems; (2) create 

systems and enforcement from monitoring of well bore integrity; (3) weigh out health protective, 

well permitting guidelines; (4) enforcement authority and resources for state and local agencies 

to oversee this emerging industry; (5) transparency around reduced water components and 

disposal systems; and (6) a prospective epidemiological investigation of potential health effects 

which are to date unknown and under investigated. 

Commenters believed that replacing coal with natural gas is not a valid solution to climate 

change and the only long-term solution is for the U.S. to rapidly develop renewable energy 

systems that will quickly free us from dependence on all fossil fuels. Commenters believed this 

approach makes both environmental and economic sense. Commenters believed the final rule 

should reflect the potential for using renewables. Commenters opposed regulating methane 

losses in a later federal regulatory action (separate from the current 111(d) action) because the 

proposed 111(d) rule could lead states to ignore the potential climate benefits of renewables and 

to make decisions about long-term investments in electricity generation based only on 

combustion emissions. Commenters believed states may make poor choices in their 111(d) plans 

if they are not presented with all the facts about methane losses. Commenters noted that the 

proposal's Regulatory Impact Analysis (RIA) indicated the rule would boost the amount of 

additional electricity generation from natural gas by nearly ten times the gain projected for 

renewables before 2020. Commenters believed that by accelerating EGU investments in natural 

gas in the near-term, the plan could tip the scales toward fossil fuels for decades to come, and 

commenters believed that once gas-fired plants are in operation, there will be less incentive for 

utilities to reinvest in renewables because the capital outlay for gas infrastructure will have 

already occurred. 

Commenters requested that the EPA protect us against harmful methane and fracking. 

Commenters stated natural gas is not the answer; clean, renewable energy is the answer. 
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Response 5: Commenters contend that EPA did not fully consider the environmental 

consequences of increased unconventional natural gas development that may result from 

increased demand for natural gas by EGUs in response to the CPP. Commenters cited the 

following as impacts relating to increased natural gas production: increased methane emissions, 

contamination of groundwater, increased water usage, decreased air quality, increased 

frequencies of earthquakes, increased natural gas infrastructure needs, and a variety of impacts 

on local communities. 

EPA assessed the likely impact of changes in generation mix and power plant demand for natural 

gas that may result from the CPP in an illustrative analysis in chapter 3 of the RIA for the final 

rule. Table 3-16 in Chapter 3 shows that there may be increases in demand for natural gas for 

electricity production nationwide in 2020, but by 2025, demand for natural gas by electric 

utilities will decline or not change beyond what would have occurred without CPP. By 2030, the 

demand for natural gas by EGUs is expected to decline. These estimates are based upon 

illustrative control strategies that may be pursued to implement the CPP and actual 

implementation may differ. These illustrative results indicate that the environmental 

consequences commenters suggest stem from increased shale gas production due to the CPP are 

not likely to materialize in the 2025 and 2030 time frames. To the extent that natural gas 

production does increase due to implementation of the CPP, EPA has enacted regulations to 

address air quality impacts. (http://www.epa.gov/airquality/oilandgas/index.html), and has 

existing statutory and regulatory authorities to address potential water quality impacts. 

Regarding impacts of increased methane emissions due to a greater use of natural gas for 

electricity production, the EPA assessed the net change in upstream methane emissions from 

natural gas and coal production and also assessed the potential magnitude of changes relative to 

CO2 emissions reductions anticipated at power plants. This analysis found that the net upstream 

methane emissions from natural gas systems and coal mines and CO2 emissions from flaring of 

methane will likely decrease under the proposed guidelines. Furthermore, the changes in 

upstream methane emissions are small relative to the changes in direct emissions from power 

plants. The technical details supporting this analysis can be found in the Appendix to Chapter 3 

of the final RIA included in the docket for this rulemaking. For further information on potential 

changes in upstream methane emissions and methane emissions from natural gas systems, please 

also see response to comment 18 in section 8.2. 

The CPP is designed to address carbon emissions associated with electricity production. 

Regulatory actions undertaken under the Clean Air Act as well as voluntary programs may 

address emissions from other sectors such as the oil and gas industry. As discussed in the 

President’s Climate Action Plan Strategy to Reduce Methane Emissions33, EPA is assessing 

 

33 https://www.whitehouse.gov/sites/default/files/strategy_to_reduce_methane_emissions_2014-

03-28_final.pdf
333 

methane emissions from the oil and gas industry and considering regulatory action. Potential 

actions taken to address methane emissions for the oil and gas industry will build upon 

successful regulatory actions and voluntary programs already taken by the EPA. 

Comment 6: Commenters noted that there are non-energy benefits of energy efficiency 

technologies. 

Referencing an analysis prepared for the OECD/IEA [Lisa Ryan and Nina Campbell, Spreading 

the Net: The Multiple Benefits of Energy Efficiency Improvements (International Energy 

Agency, Insight Series 2012), p. 25], commenters listed the following benefits: 

• provider benefit and infrastructure 

• energy prices 

• public budgets 

• energy security 

• macro-economic effects 

• health 

• affordability 

• access 

• development 

• job creation 

• asset values 

• disposable income 

• productivity 

Response 6: The EPA agrees with the commenters’ contention that there are non-energy benefits 

of demand-side energy efficiency technologies. A number of these benefits are discussed in the 

Demand Side Energy Efficiency TSD for the CPP Final Rule and in Chapter 3 of the Regulatory 

Impact Analysis for the final rule. Please see these documents for more information. 

Comment 7: Commenters noted that there are other impacts related to this rule that should be 

considered by EPA. 
334 

Commenters noted that the elimination of coal plants will impact the pension and health care 

benefits of retired coal miners and their families.

Commenters asked that EPA consider the social and cultural impacts of this rule. 

Commenters stated that EPA's reliability analysis "fails to account for supply assets and relies on 

overly optimistic assumptions about demand reductions associated with the rules of energy 

efficiency that will comply." 

Commenters noted that "energy intensive industries, at minimum, would need carbon allowances 

and border adjustments to prevent greenhouse gas leakage "as a result of companies moving offshore to avoid this rule's higher energy costs. 

Commenters noted that the impacts analysis does not account for the increased demand for 

electricity and "this proposal does not accommodate load growth in any manner." 

Commenters noted that the human impacts of increased electricity costs must be considered. 

Commenters noted that the rule does not address "the environmental impacts of the whole fuel 

cycle on the externalities such as air and water qualities, the severe environmental impacts of 

mountaintop removal mining and other fossil-fuel extraction methods, and the health and 

economic impacts on communities overall." 

Commenters asked that EPA examine "other consequences besides just what comes out of a 

smokestack." Commenters elaborated by adding, "For coal you have a lot of damage from the 

mining, especially in Appalachia" and "With nuclear power there's a lot of nuclear waste 

disposition problems that have not been resolved." 

Commenters noted that there are "thousands of deaths and health impacts each year associated 

with mountaintop removal" and "communities choking on a toxic grip of filthy extraction 

industries, including coal, fracked gas, nuclear offshore drilling and industrial biomass." 

Commenters asked that EPA "not promote fracking and the other dirty energy sources" and stop 

mountaintop removal through "a bill in the federal legislation, the Appalachian Community 

Health Emergency Act, HR526." 

Commenters stated, "the expense of dismantling a retired plant is substantial, and such costs may 

be passed on to government and, ultimately, tax- and rate-payers." 

Commenters noted that greenhouse gas emissions leakage has not been factored into the RIA. 

Commenters stated, "The CPP will result in leakage, as some productive activity flees to foreign 

shores (where intensities are in many cases higher), diminishing or eliminating global carbon 

abatement." According to commenters, "By failing to take into account this leakage, the RIA 

thus overestimates the greenhouse gas emission reduction benefit from the CPP." 

Commenters stated that "policies that substantially increase the cost of energy-thereby 

decreasing the competitiveness of U.S. industries-investments and emissions will be sent to 

other, less efficient countries with higher CO2 emissions intensities." Therefore, commenters 

noted that "overly restrictive and costly U.S. policies to reduce emissions will not only be offset 
335 

by the rapidly increasing emissions from other countries, but could actually result in a net 

increase in global emissions." 

Commenters noted that "there is a real cost in lives when the cost of energy rises" and that "EPA 

has used the calculation of one pre-mature death for every $10M in lost disposable income." 

Commenters asked that EPA "provide a full analysis of the costs of its proposal, especially as it 

relates to seniors." 

Commenters asked that EPA work with FERC to include the following issues in the impacts 

analysis: (1) the supply and demand of natural gas; (2) natural gas prices; (3) current gas 

transmission pipelines; (4) the need and timing for construction within a state of new gas 

pipelines; and (5) the impacts on energy and capacity prices" 

Commenters asked that "EPA conduct an ongoing analysis of the potential adverse effects of its 

proposed greenhouse gas standards on impacted communities [low-income communities of 

color] and determine the distributive costs and benefits to impacted communities" and that 

"States should be required to do the same analysis." 

Commenters asked that EPA consider the public health and welfare impacts of higher electricity 

rates as a result of this rule. 

Commenters noted that "The Clean Power Plan's inclusion of nuclear power, 'waste-to-energy', 

carbon capture and sequestration, biomass incineration and other dirty fuels fails to acknowledge 

adverse environmental and public health impacts." Commenters noted that "These technologies 

poison our land, water and public health and must not be considered clean energy." 

Commenters stated, "The Clean Power Plan's promotion of natural gas as an alternative to coal 

would continue our reliance on fossil fuels for many decades and incentivize more investment in 

dirty energy infrastructure. Commenters noted that "According to EPA's own database, burning 

municipal waste is the most carbon intensive form of energy generation, producing over twice 

the amount of CO2 per unit of energy than coal plants." Commenters noted that "Incentivizing 

any form of combustion energy, whether it be coal, gas, trash, or biomass, raises serious 

concerns about increased public health impacts, especially for communities that are already 

overburdened by such industrial pollution." 

Commenters stated that there are about 1.3 billion people in the world without electricity. The 

commenters said that a greater contribution to human health will be achieved through 

electrification using coal, which is abundant and low cost, instead of using expensive regulations 

to limit carbon and stifle economies and development. 

Commenters stated that EPA should be able to protect public health and safety and that 

emissions from Navajo Generating Station and five other coal-fired power plants in the region is 

harming tribal health. Commenters stated that a host of respiratory illness plagued those living 

on Black Mesa with bronchitis and black lung disease and asthma. 

Commenters stated that for this rule to be effective EPA should look at all stages and impacts of 

coal and fossil fuel and gas, natural nuclear power plant. Commenters stated that they are 
336 

downwind from Navajo Generating Station and Four Corners Power Plant and the only feedback 

from the Department of Interior as the trust responsible party is that they hold trust responsibility 

for 10 tribes in Southern Arizona, which is supplied with Central Arizona Project water. 

Commenters stated that Center Arizona Project water is from the Navajo Sandstone Aquifer 

only, supplying for mining activities on Black Mesa, which has depleted aquifers and springs. 

Commenters stated that of the energy that is produced at Navajo Generating Station, EPA 

identified, only 320 megawatts is needed to push the water from Lake Havasu to Tucson. 

Commenters stated that however there's 2,250 megawatts being produced, so the rest of it is all 

for profit and that this is just a profit issue, not a health issue. Commenters stated EPA has 

violated the way of worship, freedom of religion. 

Commenters stated that EPA failed to show that its proposed "system" is the "best system," 

because EPA did not properly account for non-air quality health and environmental impacts, and 

other factors in defining its "system." Commenters said that EPA gives nothing more than lip 

service to this statutory mandate and does not even identify non-air quality health and 

environmental impacts as an important criterion in its decision-making. Commenters listed the 

statements presented by the Administrator in regards to those considerations, and stated that EPA 

cannot turn its head to known impacts from its "system" and pretend they do not exist. 

Commenters said the statute requires EPA to consider "any" non-air quality health and 

environmental impact, and EPA has not discussed known impacts. 

Commenters stated that EPA noted that NGCC combustion does not produce solid waste and 

uses less cooling tower water than coal combustion. Commenters argued that natural gas 

extraction creates solid waste, contributes to ozone formation, and carries risks of potential 

groundwater contamination, and that land disturbance and noise pollution are other known 

impacts. Commenters said that EPA have recognized these impacts in its comments on the 

Oregon LNG Export Project and Washington Expansion Project, but that EPA does nothing here 

to consider these impacts. Commenters added that EPA merely makes a conclusory statement 

that hazardous waste generated by nuclear electric production is better than the solid waste 

generated from coal electric production without any evidentiary support. Commenters said that 

these unsupported and conclusory statements are not entitled to any deference, and highlight the 

arbitrary and capricious nature of EPA's proposal. 

Commenters stated that while EPA tries to hide these deficits by touting benefits from reducing 

other criteria pollutant emissions, which do not qualify as a proper assessment of non-air quality 

health and environmental impacts, it is unclear whether EPA's assessment considers upstream 

criteria pollution emissions increases from the natural gas sector and renewable energy sources 

in its system. Commenters said that it appears EPA did not consider that drilling rigs can produce 

substantial NOx emissions (13-15 tons NOx/well) and that its "system" may promote more rapid 

drilling of thousands of exploratory and production wells. Commenters pointed out that drilling 

is also required to install offshore windmills. Commenters also said that EPA did not consider 

the fugitive emissions impacts from increased road traffic associated with natural gas 

development and that in some areas of the country, fugitive emissions from natural gas 

development represents a significant component of the PM10 emissions inventory. 

Commenters also stated that it appears EPA did not consider water impacts and hazardous waste 

production from increased Solar PV cells production, which according to the commenters can 
337 

used between 500-800 gallons per MW/hr, same as coal-fired or nuclear power plant. 

Commenters added that many of the regions that have the highest potential for solar energy also 

tend to be those with the driest climates, so production in these areas will stress water resources, 

or alternatively require production in alternative locations that increase the cost and impact of 

transporting the cells onsite. Commenters also said that reducing availability of coal ash can 

negatively affect the GHG emissions footprint of other industries, such as concrete and gypsum 

wallboard. 

Response 7: Commenters raise a variety of secondary impacts associated with the Clean Power 

Plan that they assert are not fully considered by EPA including: impacts on electricity reliability; 

failure to consider electricity demand growth in modeling; secondary market impacts for energy 

intensive industries and potential leakage; and health and environmental impacts associated with 

mountain-top mining, natural gas fracking, production and installation of solar PV and wind 

energy, and with nuclear energy. EPA disagrees with commenters statements that these 

secondary impacts were not considered in developing the Clean Power Plan. 

EPA disagrees with the comment that EPA’s reliability analysis "fails to account for supply 

assets and relies on overly optimistic assumptions about demand reductions associated with the 

rules of energy efficiency that will comply." Projected changes in the demand for electricity 

expected in future years of analysis (2020, 2025, and 2030) were considered when modeling the 

illustrative compliance scenarios in the Regulatory Impact Analysis (RIA). See the RIA for more 

details concerning the modeling conducted for the CPP. Electricity demand and supply assets 

were directly considered in the reliability and resource analysis completed for the CPP. See the 

Reliability and Resource Technical Support Document for more details concerning this analysis. 

The analyses conducted by EPA show that the emission guidelines will result in cleaner 

generation from the existing power plant fleet and will support continued investments by the 

industry in cleaner power generation to ensure reliable, affordable electricity now and into the 

future. 

The EPA recognizes that electric generating units are predominately domestically located and 

movement of generating units outside the U.S. due to the CPP is unlikely. Thus, direct CO2

emission leakage in the electricity sector is not likely. EPA addresses energy impacts for 

secondary markets including energy intensive manufacturing in chapter 5 of the RIA. The 

implementation approaches designed by the states, and the compliance strategies adopted by 

affected electric generating units (EGUs), will ultimately drive the magnitude and timing of 

secondary impacts from changes in the price of electricity, and the demand for inputs by the 

electricity sector, on other markets that use and produce these inputs. The flexibility afforded to 

states in their state plans allows them to encourage compliance methods which include design 

elements that may mitigate or promote particular impacts based on their priorities. For example, 

states in the Regional Greenhouse Gas Initiative use the revenues from allowance auctions to 

support direct bill assistance for retail consumers, fund investments in clean energy and 

electricity demand reduction for business consumers, and support employment in the 

development of clean and renewable energy technologies. In its recent regulations to limit 

greenhouse gas emissions, California’s Air Resources Board designated a portion of allowances 

to be allocated to electric distribution companies for the purpose of mitigating electricity rate 

increases and their associated impacts. Other states may encourage compliance methods by 
338 

affected EGUs with particularly robust deployment of renewables, energy efficiency, or natural 

gas to promote manufacturing demand or employment in those sectors. For example, energy 

efficiency investments may be targeted towards reducing both electricity consumption and 

natural gas or heating oil consumption, such as weatherization projects. The state plan approach 

and the composition of these programs will influence the effects of compliance with the final 

rulemaking. 

In Chapter 5 of the RIA, the EPA recognizes that changes in the price of electricity, natural gas, 

and coal can impact markets for goods and services produced by sectors that use these energy 

inputs in the production process. The direction and magnitude of these impacts is influenced by a 

number of factors discussed in the RIA. Changes in cost of production may lead to changes in 

price, quantity produced, and profitability of firms within secondary markets. If regulation 

results in changes in domestic markets that lead to an increase in imports, increases in production 

in countries with more energy-intensive production may lead to changes in CO2 emissions 

elsewhere. See chapters 3 and 5 of the RIA for a discussion of potential energy price changes for 

the illustrative CPP control scenarios. As previously stated, the flexibility afforded to states in 

developing their state plans allows them to encourage compliance approaches which include 

design elements that may mitigate or promote particular impacts based on their priorities. 

With regard to the comment suggesting that EPA collaborate with the Federal Energy Regulatory 

Commission concerning natural gas markets, EPA consulted extensively with FERC and the 

United States Department of Energy (DOE). The final rule reflects changes in the CPP that are 

the product of compelling information and analysis provided to the EPA via the comment record 

– and by the work of, and consultation with, other federal agencies, notably the FERC and the 

DOE. Earlier this year, FERC conducted a series of technical conferences comprising one 

national session and three regional sessions. The information provided by workshop participants 

echoed much of the material that had been submitted to the comment record for this rulemaking. 

On May 15, 2015, the FERC Commissioners, drawing upon information highlighted at the 

technical conferences, transmitted to the EPA some suggestions for the final rule. In addition, via 

comments, states, utilities, and reliability entities asked us to ensure adequate time for states, 

utilities, and grid operators to implement strategies to achieve CO2 reductions and the final 

emission guidelines reflect relaxing compliance timelines. 

Finally, several commenters take issue with the consideration of nuclear power, 'waste-toenergy', carbon capture and sequestration, biomass incineration, coal generation relying on 

mountain top mining, and other dirty fuels in the Clean Power Plan, because the commenters 

contend these forms of electric energy generation pose health risks. See the response to comment 

2 in this Response to Comments Section 8.10 for a discussion of changes made in the CPP final 

relating to nuclear energy. Specifically, nuclear energy is excluded from the Best System of 

Emission Reduction determination in the final rule. With respect to coal electricity generation, 

the EPA illustrative analysis indicates that coal generation will decline in the future as a result of

the CPP. See the Regulatory Impact Analysis Chapter 3 for additional information relating to 

expected mix of electricity generation under the CPP. Regarding health and environmental 

impacts associated with natural gas exploration, production of solar energy and installation of 

wind energy, the EPA as well as state and local governments have existing environmental 

programs to address these impacts on federal, state and local levels, respectively. For example 
339 

ozone is addressed in the National Ambient Air Quality Standards. See Appendix A of Chapter 3 

of the RIA for an analysis of the potential changes that may occur in methane emissions due to 

possible changes in electricity generation fuel mix for the illustrative scenario analyzed in the 

RIA and the response to comment 18 in section 8.2 of this response to comment document. In 

addition, states may choose to tailor their compliance programs to consider potential 

environmental impacts such as increased localized demand for water. The CPP allows for 

flexibilities that guarantee a continued reliance on a diverse energy mix in the generation of 

electricity, and also allows for a long implementation period in order to ease the impacts 

associated with transitioning to a lower carbon energy mix. 

Comment 8: Commenters stated Building Block 2 must be adjusted to allow for preservation of 

10% to 12% of coal-fired steam generation in each state because such generation could otherwise 

be completely displaced by re-dispatch to NGCC units and is necessary for ensuring reliable and 

affordable electricity. 

Response 8: The goal setting methodology (preamble sections VI and VII) for the final rule is 

calculated at the regional interconnect-level, consistent with BSER (section V), and incorporates 

various elements that ultimately do not see a full realization of all of the building blocks 

combined, and the effect that would have on higher emitting steam generation using the adjusted 

2012 baseline. For example, the least stringent interconnect sets the performance rates for each 

technology category (and thus state goals) for each year, such that the full level of BSER is not 

incorporated in the performance rates and states goals. This approach in the final rule is 

responsive to many comments, including those that pointed out the ability for some states higher 

emitting steam generation to be entirely phased out in the calculation of state goals for the 

proposed rule. In addition, states have ample flexibility to design and implement appropriate 

plans (preamble section VIII) in accordance with particular state climate and energy policy 

objectives.