A Southeastern Snapshot: 111(d) 1 

A SOUTHEASTERN SNAPSHOT: 

EPA’S CLEAN POWER PLAN AND 

SECTION 111(D) OF THE CLEAN AIR ACT 

Updated for SESARM, October 2014
A Southeastern Snapshot: 111(d) 2

A SOUTHEASTERN SNAPSHOT: 

EPA'S CLEAN POWER PLAN AND SECTION 111(D) OF THE CLEAN AIR ACT

OCTOBER 2014

The following document provides an overview of need-to-know provisions of the U.S. Environmental 

Protection Agency’s Clean Power Plan, as well as compliance options that focus on end-use energy 

efficiency. It also highlights current themes and perspective surrounding potential implementation of 

the Clean Power Plan in the Southeast, and is intended to serve as a starting point of conversation. 

Additional information and resources, updated regularly, are available on SEEA’s website at 

http://goo.gl/4vchHd. 

CONTENTS

I. Overview....................................................................................................................................................3

II. Framework and Required Reductions.....................................................................................................4

Table 1. Clean Power Plan State Targets (Adjusted).................................................................................5

Figure 1. Southeastern State Emissions Reductions by Building Block (lbs/MWh) Under the Clean 

Power Plan ................................................................................................................................................6

III. Energy Efficiency’s Role Within the Rules..............................................................................................6

Table 2. Clean Power Plan Proposed Cumulative Annual Electricity Savings (Percentage of Annual 

Sales).........................................................................................................................................................7

IV. Implementation ......................................................................................................................................8

Table 3. Compliance Approaches..............................................................................................................8

V. Evaluation, Measurement and Verification (EM&V)............................................................................10

VI. Conclusion.............................................................................................................................................10

Appendix A: Southeastern State Emissions Reductions by Building Block (lbs/MWh) Under the Clean 

Power Plan ..................................................................................................................................................11

Appendix B: Estimated State-by-State Emissions Reductions from Energy Efficiency: Clean Power Plan 

Primary and Alternate Scenarios................................................................................................................12
A Southeastern Snapshot: 111(d) 3

I. OVERVIEW

On June 2, 2014, the U.S. Environmental Protection Agency (EPA) issued draft rules regulating carbon 

dioxide emissions from the nation’s power sector under Section 111(d) of the Clean Air Act (the “Clean 

Power Plan”). The proposed plan would cut carbon pollution from the power sector by 30 percent below 

2005 levels, using 2012 as a baseline for emissions rate reductions targets. While much remains to be 

determined in terms of implementation strategies, emission standards were determined through the 

application of a variety of best practice emissions reduction mechanisms, including end-use energy 

efficiency, and EPA has acknowledged the role of energy efficiency in facilitating least-cost compliance.

The rules are slated to be implemented according to the following timeline: 1

 June 18, 2014: Rule published in the Federal Register

 Late July: Public listening sessions in four cities 

 December 1, 2014: End of comment period2

 June 2015: Final rules released

 June 2016: All states submit initial or complete plans

 June 2017: Deadline to submit individual state plans eligible for one-year extension, and 

progress report for multi-state plans

 June 2018: Deadline to submit multi-state plans

 2020-2029: Interim compliance period

 2030: Start of final goal compliance period

 

1

Some stakeholders have stated their intent to litigate the EPA rule in court; these proceedings will ramp up when 

the final rule is released and may impact the proposed implementation timeline. States taking legal action will do 

so through their Attorney General’s Office. Twelve states, including the four southern states of Alabama, Kentucky, 

Louisiana and South Carolina, filed lawsuits (West Virginia v. EPA, 14-1146, U.S. Court of Appeals, District of 

Columbia) on August 1, 2014, although some legal scholars have dismissed this suit as pre-emptive.

2 The original 120-day comment deadline was extended from October 16 to December 1. 
A Southeastern Snapshot: 111(d) 4

II. FRAMEWORK AND REQUIRED REDUCTIONS

Regulation under Section 111(d) occurs through a two-step process: First, EPA sets a level of stringency 

that constitutes the “best system of emission reduction (BSER)” for a given pollutant, and then states 

develop compliance plans to meet EPA’s prescribed goals. At its core, BSER is a best practice solution set

used to set the stringency of the required reductions, taking into account key considerations like costeffectiveness. In the case of CO2, EPA has broken the BSER down into four “building blocks”:

 Building Block 1: Heat Rate Improvements—reducing the carbon intensity of generation at 

individual affected units through heat rate improvements.

 Building Block 2: Re-dispatching to Natural Gas Combined-Cycle (NGCC)—re-dispatching 

generation from higher to lower emitting units.

 Building Block 3: Renewables and Nuclear—substituting fossil fuel generation with expanded 

low- or zero-carbon generation.

 Building Block 4: Energy Efficiency—further deploying end-use energy efficiency that reduces 

the amount of generation.

EPA considered a full range of options for inclusion in the BSER. Notable exclusions from the BSER 

include: fuel-switching at individual units, carbon capture and storage (CCS), using new natural gas 

combined cycle capacity to replace existing carbon-intensive generators, and heat rate improvements at 

affected generators other than coal-fired steam units. The proposed rule provides a thorough 

explanation of EPA’s rationale for excluding these strategies from the BSER. 

EPA’s prescribed BSER building blocks directly inform the stringency of the required emissions reduction; 

however, states have broad flexibility in determining the mix of strategies they use to reach the savings 

targets, and compliance strategies are not confined to those used in setting the targets. 

Using the four building blocks, EPA has proposed a primary scenario that targets a 30 percent reduction 

in emission rate over 2005 levels by 2030. EPA is also taking comment on a secondary, less stringent 

scenario that phases in compliance by 2025. All content in this document reflect the primary scenario, 

and secondary targets are provided in Appendix B. 

Targets for southeastern states are provided on the following page.
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TABLE 1. CLEAN POWER PLAN STATE TARGETS (ADJUSTED)

3

State 2012 Emission 

Rate (lbs/MWh)

Interim Rate

2020-2029 Average

(lbs/MWh)

Final Rate

2030 and Beyond

(lbs/MWh)

Percent Change

Alabama 1,444 1,147 1,059 -27%

Florida 1,199 794 740 -38%

Georgia 1,500 891 834 -48%

Kentucky 2,158 1,844 1,763 -18%

Mississippi 1,093 732 692 -39%

North Carolina 1,647 1,077 992 -40%

South Carolina 1,587 840 772 -51%

Tennessee 1,903 1,254 1,163 -42%

Virginia 1,302 884 810 -38%

West Virginia 2,019 1,748 1,620 -20%

As demonstrated above, the magnitude of the required reductions varies between states, based on the 

composition and nature of their power generation sector. For the same reason, each building block 

impacts states in different ways. For example, some states have significant NGCC capacity available for 

re-dispatch, while others have very little, so Building Block 2 has a sizeable impact in the former states 

with NGCC capacity available and a negligible one in the latter states without NGCC capacity available.

A block-by-block breakdown of reductions from southeastern states is provided below, and a table with 

associated numbers for each building block is available in Appendix A.4

 

3 EPA provides the starting 2012 emission rate as both an unadjusted rate from only fossil fuel sources, and as an 

adjusted rate, which includes fossil fuel, renewables and six percent (“at-risk”) nuclear generation and provides a 

more comprehensive picture of the state’s generation sector.

4 EPA’s targets reflect estimates of the emissions reductions available from each building block. The agency’s 

AVoided Emissions and genERation Tool (AVERT) is available at 

http://epa.gov/statelocalclimate/resources/avert/index.html, and can help non-experts “ballpark” emissions 

displaced at electric power plants by energy efficiency and renewable policies and programs.
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FIGURE 1. SOUTHEASTERN STATE EMISSIONS REDUCTIONS BY BUILDING BLOCK (LBS/MWH),

AS PROPOSED BY THE CLEAN POWER PLAN

III. ENERGY EFFICIENCY’S ROLE WITHIN THE RULES

End-use energy efficiency is a primary building block used in setting the stringency of the required 

savings. Reductions were determined based on a “best practice” scenario for demand-side energy 

efficiency, drawn from performance that has already been achieved or required by policies of leading 

states. EPA assumes that states will be able to achieve an annual incremental savings rate of 1.5 percent 

of electricity demand by or before 2030, ramping up at 0.2 percent each year beginning in 2017. EPA’s 

best practice electricity savings targets for southeastern states are provided below: 

1,059 

740 

834 

1,763 

692 

992 

772 

1,163 

810 

1,620 

1,444 

1,199 

1,500 

2,158 

1,093 

1,647 

1,587 

1,903 

1,302 

2,019 

 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600

Alabama

Florida

Georgia

Kentucky

Mississippi

North Carolina

South Carolina

Tennessee

Virginia

West Virginia

Projected Reductions Over Time

 Block 1:

Heat Rate Improvements

 Block 2:

Re-Dispatch to NGCC

 Block 3:

Renewables and Nuclear

 Block 4:

Energy Efficiency
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TABLE 2. SOUTHEASTERN STATE CUMULATIVE ANNUAL ELECTRICITY SAVINGS, AS PROPOSED 

BY THE CLEAN POWER PLAN (PERCENTAGE OF ANNUAL SALES)

State Interim Goal

(2020-2029 average)

Final Target

(2030 and Beyond)

Alabama 1.4% 9.5%

Florida 2.0% 10.0%

Georgia 1.8% 9.8%

Kentucky 1.9% 10.0%

Mississippi 1.4% 9.6%

North Carolina 2.4% 10.3%

South Carolina 2.3% 10.2%

Tennessee 2.2% 10.3%

Virginia 1.2% 9.3%

West Virginia 1.8% 10.1%

As stated above, EPA has not limited the types of energy efficiency programs and measures that can be 

included in a state plan. In other words, a state can achieve higher or lower savings from each of the 

four building blocks, as well as other emission reduction measures, as long as the state ultimately 

reaches its final emission rate reduction goal. All energy efficiency measures in a state plan must be 

evaluated per EPA’s Evaluation, Measurement and Verification (EM&V) guidance (additional information 

provided in Section V). 

The following items are examples of energy efficiency policies that could be incorporated into state 

plans for achieving the EPA’s emission reductions requirement:

 Energy efficiency resource standards (EERS),

 Demand-side energy efficiency programs,

 Building energy codes,

 Combined heat and power (CHP),

 Appliance and equipment efficiency standards, and

 Incentives and finance mechanisms for energy efficiency.

The broad flexibility that EPA has provided regarding the inclusion of energy efficiency in state 

compliance plan accommodates for the varying degrees of implementation history and experience,
A Southeastern Snapshot: 111(d) 8

existence of applicable EM&V protocols and methods, and nature and type of regulatory oversight in 

place across the region.

IV. IMPLEMENTATION 

The draft rules allow for the use of two basic approaches: direct emission limits applied to generation 

units and a portfolio approach. These two basic approaches provide four distinct state plan “pathways” 

under Section 111(d). Each can accommodate energy efficiency as a compliance pathway, although 

some are better suited to this than others. These pathways include:

1. Rate-based CO2 emission limits applied to affected Electric Generating Units (EGUs);

2. Mass-based CO2 emission limits applied to affected EGUs; 

3. State-driven portfolio approach; and

4. Utility-driven portfolio approach.

TABLE 3. COMPLIANCE APPROACHES

Approach Treatment of Energy Efficiency Energy Efficiency

Enforceability

EM&V

Rate-based CO2

Emissions Limits 

Applied to Affected 

EGUs

May include administrative rate 

adjustment or tradable credits 

Enforceable component of 

state plan

Rate reductions due to 

energy efficiency must be 

tracked and verified via 

EM&V

Mass-based CO2

Emissions Limits 

Applied to Affected 

EGUs

Energy efficiency as a strategy for 

meeting limit at lesser cost, but 

complementary to the plan

Not enforceable via state 

plan

No need for special 

EM&V and tracking of 

these program effects on 

avoided CO2 emissions

State-Driven

Portfolio Approach5

Energy efficiency requirements 

applicable to non-EGU entities are

part of the mix to achieve 

performance level

Enforceable via state plan; 

mix of entities have 

enforceable obligations

Mass or rate reductions 

must be tracked and 

verified via EM&V

Utility-Driven 

Portfolio Approach6

Utilities implement a portfolio of 

measures to meet rate- or massbased emission performance 

level for affected EGUs

Entire suite of obligations 

is enforceable against the 

utility 

Mass or rate reductions 

must be tracked and 

verified via EM&V

To date, much of the dialogue in the Southeast has focused on rate-based approaches. This is primarily 

because of two key factors: certainty and concerns regarding growth potential. EPA has provided 

 

5 More likely to be implemented in states with restructured electricity sectors. 

6 More likely to be implemented in states with vertically integrated, state-regulated utilities.
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tailored rate-based goals for each state; however, it is currently unclear what methodology EPA expects 

states to employ in calculating mass-based caps, and states are concerned about the stringency of the 

numbers that will result. In addition, several southeastern states are anticipating significant industrial 

growth in the years ahead and, accordingly, favor the rate-based approach because it allows for load 

growth, as long as overall average rate targets are achieved.

States may achieve compliance individually or on a regional basis. In the Southeast, many states have 

voiced their intent to assess compliance opportunities within their borders before considering regional 

compliance approaches. Priorities may shift, but given the short timeline that states have to submit 

compliance plans, it currently appears unlikely that southeastern states will decide to pursue regional 

compliance plans. However, it is possible that states with closely interconnected electric systems may 

sign MOUs with others to establish implementation logistics, or to incorporate pieces of regional 

planning for multi-state utilities, such as Duke Energy or the Tennessee Valley Authority.

Initial responses to the release of the Clean Power Plan tend to align state compliance plans under 

Section 111(d) with State Implementation Plans, or “SIPs,” which are required in demonstrating 

compliance with National Ambient Air Quality Standards under Section 110 of the Clean Air Act. 

However, as outlined, compliance plans under Section 111(d) differ from Section 110 in terms of 

enforceability criteria, deficiency actions and other key components, which means that these plans will 

likely not directly follow traditional “SIP” approaches, although considerable uncertainty regarding the 

nature of approvable compliance plans remain. To outline what is known, according to the requirements 

set forth in the Clean Power Plan, state compliance plans must include the following elements: 

 Identification of affected entities;

 Description of plan approach and geographic scope;

 Identification of state emission performance level;

 Demonstration that plan is projected to achieve emission performance level;

 Identification of emission standards;

 Demonstration that each emission standard is quantifiable, non-duplicative, permanent, 

verifiable, and enforceable;

 Identification of monitoring, reporting, and recordkeeping requirements;

 Description of state reporting;

 Identification of milestones;

 Identification of backstop measures;

 Certification of hearing on state plan; and

 Supporting material.

Per EPA’s guidance, plans will also be reviewed and approved according to the following criteria: 

 Enforceable measures that reduce EGU CO2 emissions;

 Projected achievement of emission performance equivalent to the goals established by the EPA, 

on a timeline equivalent to that in the emission guidelines;

 Quantifiable and verifiable emission reductions; and
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 A process for reporting on plan implementation, progress toward achieving CO2 goals, and 

implementation of corrective actions, if necessary.

V. EVALUATION, MEASUREMENT AND VERIFICATION (EM&V)

One of the most important elements in developing and implementing a compliance plan that 

incorporates energy efficiency is EM&V, which guarantees that projected energy savings and their 

resulting emissions reductions have occurred. Further, uniformity in measurement techniques is of 

paramount importance in the context of 111(d), especially for states that are interested in regional 

compliance options. The Clean Power Plan lays out several options for EM&V, including the following:

 Establishing specific EM&V requirements with a level of defined precision and accuracy for all 

energy efficiency programs and measures;

 Establishing specific EM&V requirements for widely used energy efficiency programs and 

measures, such as those addressed by DOE’s Uniform Methods Project (UMP) or technical 

reference manuals (TRMs), while establishing a generalized EM&V approach that states can 

apply to programs that are relatively new, innovative, or untested; and

 Establishing a set of generalized, process-oriented EM&V requirements that apply to all energy 

efficiency programs and measures, while providing flexibility to customize EM&V approaches, as 

appropriate for different types of programs and measures, provided that EM&V meets these 

minimum requirements.

The general consensus from stakeholders impacted by 111(d) is that EPA has not provided sufficient 

guidance to date surrounding EM&V for energy efficiency measures that may be incorporated into state 

plans. Within the proposed rule, EPA states its intent to develop additional guidance regarding EM&V 

for end-use energy efficiency measures, in coordination with other federal agencies, and it is likely that 

the final rule will provide additional guidance and certainty that will help states incorporate energy 

efficiency into their compliance plans, expanding the role of least-cost, market-based solutions for 

meeting EPA’s targets. 

VI. CONCLUSION

SEEA is providing information, resources and facilitation within collaborative forums to promote energy 

efficiency as a pathway to compliance if the Clean Power Plan moves forward, while helping states to 

reap the benefits of energy efficiency such as cutting waste, economic development, energy security 

and energy productivity. In addition, SEEA has produced a number of targeted materials, including 

regional 111(d) news, resources and information portals, and a breakdown of 111(d)-related activity by 

state, available on the website at http://goo.gl/4vchHd

For more information on the draft rules, please contact Abby Schwimmer, Policy Manager, at 

aschwimmer@seealliance.org. 
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APPENDIX A:

SOUTHEASTERN STATE EMISSIONS REDUCTIONS BY BUILDING BLOCK 

(LBS/MWH) UNDER THE CLEAN POWER PLAN

State

Block 1: 

Heat Rate 

Improvements

Block 2: 

Re-Dispatch 

to NGCC

Block 3: 

Renewables 

and Nuclear

Block 4: 

Energy 

Efficiency

Total Reduction

Alabama -59 -121 -125 -80 385

Florida -30 -287 -70 -72 459

Georgia -67 -217 -290 -92 666

Kentucky -130 -50 -31 -184 395

Mississippi -22 -262 -57 -60 401

North Carolina -87 -312 -123 -133 655

South Carolina -81 -164 -476 -94 815

Tennessee -106 -99 -376 -159 740

Virginia -44 -211 -153 -84 492

West Virginia -121 -0 -211 -67 399
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APPENDIX B:

ESTIMATED STATE-BY-STATE EMISSIONS REDUCTIONS FROM ENERGY 

EFFICIENCY: CLEAN POWER PLAN PRIMARY AND ALTERNATE SCENARIOS

Option 1: 1.5% Annual Savings Option 2: 1.0% Annual Savings

State 2020 2029+ 2020 2024+

Alabama 1.4% 9.5% 1.1% 3.9%

Florida 2.0% 10.0% 1.8% 4.7%

Georgia 1.8% 9.8% 1.5% 4.4%

Kentucky 1.9% 10.0% 1.6% 4.6%

Mississippi 1.4% 9.6% 1.1% 3.9%

North 

Carolina

2.4% 10.3% 2.1% 5.0%

South 

Carolina

2.3% 10.2% 2.0% 4.9%

Tennessee 2.2% 10.3% 1.9% 4.9%

Virginia 1.2% 9.3% 1.0% 3.7%

West Virginia 1.8% 10.1% 1.5% 4.4%