Statement of the Edison Electric Institute

Environmental Protection Agency

Public Hearing

Proposed Rule: Implementation Plans to Reduce Interstate Transport 

of Fine Particulate Matter and Ozone

Philadelphia, Pennsylvania

August 26, 2010

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Good morning, my name is John Kinsman. I am Senior Director, Environment at the Edison 

Electric Institute (EEI) in Washington, D.C. 

EEI is the association of U.S. shareholder-owned electric companies. Our members serve 95 

percent of the ultimate customers in the shareholder-owned segment of the industry, and 

represent approximately 70 percent of the U.S. electric power industry. 

EEI shares a commitment with the Environmental Protection Agency (EPA) to further reduce 

emissions from power generating facilities and supports the general policy objectives underlying 

EPA’s proposed Transport Rule.

The electric power industry has already made significant progress in reducing emissions in 

sulfur dioxide (SO2) and nitrogen oxides (NOx), even while the nation has consumed more 

energy and the economy has grown. Power generation NOx emissions during the ozone 

season in the Eastern U.S. have declined 81 percent since 1990. National power plant NOx

emissions declined 70 percent over the same time period. The industry emitted only 12 percent 

of national NOx in 2009.

National SO2 emissions from power plants in 2009 were 64 percent lower than in 1990. 

This proposed rule will require substantial additional emission reductions. For example, power 

plant SO2 emissions in the three states in which EPA is holding these public hearings (Georgia, 

Illinois and Pennsylvania) under the proposed rule will be reduced 83.0 to 90.2 percent (88.3

percent for Pennsylvania) from 1990 to 2014. 
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While some of our member companies have stated that they are able to meet the requirements 

of the proposed rule – due to some combination of individual company approaches to 

addressing environmental issues, state requirements, settlement agreements, fuel mix or other 

factors – other EEI members have concerns regarding the proposed Transport Rule. 

One concern is that the proposed Transport Rule establishes new reduction requirements that 

must be met only 6 and 30 months after the final Transport Rule is issued. 

Some of our member companies have expressed concern that EPA’s assumptions regarding 

their current control technology projects may be inaccurate and that they will have difficulty in 

achieving the initial 2012 compliance deadlines.

There also is concern by some companies that simultaneously adding controls at many units 

can stress labor, materials, and state and local regulatory agencies, and that completing 

simultaneous control installations by the end of 2013 to meet the 2014 compliance deadline is

unrealistic. This may be especially true in nine states where EGUs would need to reduce their 

SO2 emissions by at least 50 percent from 2009 to 2014. 

Some EEI member companies believe that the full schedule, from conceptualization to 

regulatory approvals by financial regulators and air quality permitting agencies, through 

construction and operation of a SO2 scrubber, can take up to 60 months. This assumption 

stands in stark contrast to EPA’s estimate that a new scrubber can be installed in 27 months.

EEI believes that it is imperative that EPA, the Federal Energy Regulatory Commission (FERC), 

the Department of Energy (DOE) and states work together to utilize all tools available to meet 

compliance targets while maintaining electric system reliability.

EEI has misgivings regarding the proposed Transport Rule providing little long-term certainty

because its requirements will be superseded in the near-future. EPA mentions in the proposal

that it is likely to alter this proposal to address wintertime emissions related to attaining the 24-

hour PM2.5 standard. EPA also will issue a separate proposal regarding NOx emissions related 

to the 1997 ozone standard. EPA also has indicated it will issue a “Transport Rule II” related to 

a tightened (October 2010) ozone standard, and it is almost certain that EPA will propose an 

additional major transport rule by 2013 to address a more stringent late-2011 NAAQS for 
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particulate matter. These rules are all in addition to the power generator MACT rule, which will 

not be finalized until late-2011 (about 6 months after the final Transport Rule) and which will 

greatly influence company decisions regarding SO2 control equipment. 

In order to continue to effectively produce electricity and reduce emissions, the electric sector 

needs clear, coordinated and flexible regulations that provide certainty for power companies to 

plan multi-billion dollar investments, many of which must serve decades into the future. Only 

through carefully crafted regulations can EEI members continue to minimize costs to customers 

and impacts on shareholders, avoid straining natural gas supply and prices, and continue 

efficient and reliable electric generation using diverse, domestic energy resources. 

Apart from our concerns, EEI supports several aspects of the flexibility provisions that EPA has 

proposed.

EEI supports, among EPA’s stated options, the Agency’s preferred approach that would allow 

limited interstate trading. The alternative approaches discussed by EPA in the rulemaking 

would provide much less flexibility and unnecessarily increase costs of emission reductions.

EEI supports EPA’s proposal to not use the variability limit approach during 2012-2013, and to 

allow banking of surplus emission reductions.

However, even with EPA’s preferred approach for limited emissions trading, EEI is concerned 

that some companies may choose to avoid emissions trading because they would seek to avoid 

the risk that EPA’s after-the-fact variability analysis brings to the compliance demonstration 

process. EEI is also concerned that trading restriction between Group 1 and Group 2 facilities 

can pose a problem for some of our members with service territories that cross these state 

lines, but where facilities lie in the same airshed. 

That concludes my remarks. EEI will be supplementing these oral remarks with additional 

written comments. Thank you for the opportunity to provide these comments today.