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TABLE OF CONTENTS 

3.3 Cleaner Generation Sources (Building Block 3) .................................................................. 2

3.3.1 Renewable generating capacity .......................................................................................... 2

3.3.2 Current level of performance ......................................................................................... 128

3.3.3 Target level of performance ............................................................................................ 139

3.3.4 Start year for state efforts ............................................................................................... 242

3.3.5 Pace at which states improve from start year to target level ....................................... 247

3.3.6 RE targets for interim and final state goals................................................................... 271

3.3.7 Cost effectiveness of RE................................................................................................... 334

3.3.8 Nuclear energy ................................................................................................................. 372

3.3.9 CHP/cogeneration ............................................................................................................ 631

3.3.10 Hydropower .................................................................................................................... 634

3.3.11 Other ............................................................................................................................... 680
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3.3 CLEANER GENERATION SOURCES (BUILDING BLOCK 3) 

This section addresses comments on Cleaner Generation Sources (Building Block 3). We have 

organized the comments in this section under 11 subsections, 3.3.1 to 3.3.11. Responses to the 

comment topics of these subsections are discussed below along with summaries of the specific 

public comments. 

3.3.1 Renewable generating capacity 

This section discusses specifics regarding renewable generating capacity as it applies to building 

block 3 goals. The EPA considers construction and operation of expanded RE generating 

capacity to be proven, well-established practices within the industry consistent with recent 

industry trends. The comments in this section address the EPA’s methodology for determining 

states’ potential renewable generating capacity. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Commenters asserted that the EPA overestimates the impact of renewables. 

Response 1: Cost-effective RE under building block 3 is assumed to replace both coal- and 

natural gas-fired generation from affected sources. This replacement, as described in preamble 

sections V of the final rule preamble of the CPP, is assumed to occur at the interconnect-level, be 

in proportion to the historical affected source generation mix, and result from both system- (e.g., 

grid operator) and source-level actions. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that renewable generation displaces both coal and natural gas generation; 

thus, the CPP overestimates the impact of renewables. 

Commenters stated that, because the EPA's modeling assumed that renewable energy generation 

would offset CO2 emissions from coal generation, the CPP over predicted the impact of 

renewables to reduce CO2 emissions and artificially lowered the interim and final state CO2 

rates in the proposed rule. Commenters stated renewable generation displaces both coal and 

natural gas generation. Commenters stated this assumption also over predicts the impact new 

renewables will have to meet targets in state plans. 

Commenters stated the EPA has over predicted the CO2 reductions from wind generation and 

should evaluate and model each state's wind generation portfolio to determine the amount of coal 

generation and natural gas generation displaced by renewable sources. Commenters stated that, 

as more renewable energy is added to the system to meet interim and final goals, the percentage 

of natural gas generation displaced by the renewables will be increased. Commenters stated that, 

in 2012 wind generation on the Associated system reduced CO2 emissions by 870,261 tons of 

which 748,308 tons (86%) was displaced from coal generation and 121,954 (14%) from natural 
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gas generation. Commenters stated that, as Associated installed additional wind generation the 

percentage of CO2 displaced from coal decreased each year: in 2013 wind generation displaced 

CO2 from coal generation by 994,340 tons (69%) and from natural gas 461,537 tons (31%) and 

in 2014 that trend continued and as of June 1, 2014 the 838,513 CO2 tons displaced by wind 

generation 67% is from coal generation and 33% from natural gas. Commenters stated that, 

based on this data the CPP has over predicted the CO2 reductions from wind generation by at 

least 15%. 

Comment 2: Some commenters did not support the EPA's RE methodology. 

Response 2: The rationale, assumptions and methodology used to incorporate incremental RE 

into the BSER are well supported by historical data and the most recent information on the cost 

and performance of RE technologies. The adjustments made to the final building block 

methodology are the result of elements of the proposed approach, commenter feedback, and 

additional EPA analysis. Additionally, the methodology, based on historical RE capacity 

deployment and validated by detailed power sector modeling that demonstrates both the 

technical feasibility and cost-effectiveness of the building block 3 generation levels, is consistent 

with the application of the other building blocks, in which historical data serves as the basis for a 

level of performance that is validated by EPA analysis. State RPS requirements are not a factor 

in quantifying the amount of cost-effective RE that is part of the BSER in the final rule. The 

methodology that produces the building block 3 generation levels is described in detail in section 

V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD 

supporting the final CPP. For a detailed explanation for the inclusion of incremental RE in the 

BSER, refer to section V of the preamble. For legal issues related to building block 3, refer to 

Chapter 1 of the Response to Comment document. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's assumptions regarding increased renewable energy generation are 

arbitrary and capricious. Commenters listed the following issues: 

• EPA does not justify its assumptions regarding the feasibility of increased 

renewable energy generation in the administrative record. 

• EPA's assumptions regarding increased renewable energy generation are arbitrary, 

capricious, and unreasonable. 

• The limited implementation under Section 110 SIPs does not mean RE is 

demonstrated under the restrictive federal requirements to be quantifiable, nonduplicative, permanent, verif.iable, and enforceable 

• EPA's regional approach fails to adequately address differences in renewable 

energy potential between similarly located States. 
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• EPA's reliance on existing state RPS goals fails to address the fact that many 

States permit out-of-state generation to meet RPS obligations. In other words, 

state RPS goals are not a good proxy for each state's renewable energy generation 

potential. 

• EPA's reliance on existing state RPS goals fails to account for the fact that many 

States have built in mechanisms to suspend or scale back RPS goals if certain 

price caps are exceeded. In other words, the RPS goals do not necessarily reflect a 

state's belief that the RPS goals can actually be achieved. 

• EPA fails to address the fact that state RPS programs may exclude municipal 

power suppliers from RPS obligations. As a result, state RPS goals may exceed 

the actual percentage of a state's total electricity generation that will be met by 

renewable sources. 

• EPA fails to fully appreciate the costs and implementation challenges faced by 

large-scale renewable energy projects. For example, the CREZ project in Texas, 

which was designed to transmit 18 MW of wind generation to population centers, 

took eight years to construct. Even if started today, such a project could not be 

completed until mid-way through the interim compliance period. 

• EPA fails to distinguish between renewable supply and renewable generation in 

assessing state RPS programs. For example, EPA includes Washington D.C.'s 

RPS program, even though Washington D.C. has no electricity generation at all 

and depends entirely on renewable generation from neighboring States. 

• Rather than treating each state equally, EPA should consider an electricitygeneration weighted approach so that small States with lower generation levels 

can't cause such dramatic shifts in a region's renewable energy goal under block 3. 

Comment 3: Commenters asserted that the EPA should use a levelized generation approach to 

RE. 

Response 3: The EPA believes the flexibility for affected sources to demonstrate compliance on 

a multi-year compliance period provides sufficient predictability to affected sources pursuing a 

compliance strategies that involves the procurement of RE. Refer to section VIII.B of the final 

rule preamble of the CPP for further detail on state plan performance periods. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the CPP should allow states and utilities to claim a levelized generation 

number from RE to make measuring compliance with the rule more predictable and practicable. 

Commenters noted that generation from RE will vary from year to year and make compliance 

with the CPP difficult as a result of different weather. Commenters stated the levelized 

generation approach will also encourage investment in RE. Commenters proposed an alternative 

concept of using a rolling 3 year historical average. Commenters stated this would protect the 
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utility against compliance failures from bad weather in a particular year, while muting criticism 

that a levelized number may be gamed. 

Commenters stated the D.C. Circuit has explained that "it is the system which must be 

adequately demonstrated and the standard which must be achievable." (45 45 National Asphalt 

Pavement Association v. Train, 539 F.2d 775, 785 (D.C. Cir. 1976) (quoting Essex Chem. Corp. 

v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973)).) Commenters said an "adequately 

demonstrated system is one which has been shown to be reasonably reliable, reasonably 

efficient, and which can reasonably be expected to serve the interests of pollution control without 

becoming exorbitantly costly in an economic or environmental way." (46 46 Essex Chem. Corp., 

486 F.2d at 433-34.) Commenters asserted that EPA's proposed treatment of states with nuclear 

units under construction, in short, exceeds the agency's authority under section 111(d). 

Commenters stated Section 111 mandates that cost be considered as part of BSER, yet, EPA 

completely ignores this factor in its incorporation of under-construction nuclear into BSER. 

Commenters said EPA simply asserts in the proposed guidelines that "since the decisions to 

construct these units were made prior to this proposal, it is reasonable to view the incremental 

cost associated with the CO2 emission reductions available from completion of these units as 

zero for purposes of setting states' CO2 reduction goals..." 79 Fed. Reg. 34,870. 

Commenters stated in building block 3, EPA's proposed guidelines include under construction 

nuclear sources in determining what constitutes BSER for Tennessee and two other states. 

Commenters said EPA's rationale for including these under construction nuclear sources is that 

they represent zero incremental costs for purposes of setting the proposed standards because the 

decision to construct the units was made before the proposal. Commenters said EPA fails to look 

at any other under construction low or zero carbon sources in other states and included them in 

setting a state's goal. Commenters said TDEC is aware of low carbon sources that were under 

construction either in 2012 or at time of EPA's proposal that were not built into determining 

BSER and the standard of performance for those other states. Commenters said EPA offers no 

explanation or other rationale on why Tennessee (as well as South Carolina and Georgia) have 

under construction nuclear sources included in building block 3 while no other under 

construction low carbon units are included in calculating the respective state goal. Commenters 

said Tennessee is unfairly treated in that its under construction nuclear is used to define the state 

goal while for others states, other under construction low or zero carbon sources are not factored 

in and simply create compliance margin. Commenters said EPA's legal rationale fails to address 

the inherent inconsistency in its approach to Tennessee's nuclear units versus other types of low 

or zero carbon sources. Commenters said EPA's approach is therefore, arbitrary and capricious. 

Commenters said notwithstanding or waiving the issues of legal uncertainty described in this 

section, the remaining sections of the comments focus on TDEC's concerns around EPA's 

methodologies, approach, application and technical support. Commenters said it is necessary to 

provide EPA with substantive comments on the proposed guidelines, while, at the same time, 

recognizing overarching legal issues that would cause the entire approach under Section Ill (d) to 

fail legal challenge. 
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Commenters stated as noted previously, EPA simply asserted in the proposed rule that "since the 

decisions to construct these units were made prior to this proposal, it is reasonable to view the 

incremental cost associated with the CO2 emission reductions available from completion of these 

units as zero for purposes of setting states' CO2 reduction goals." Commenters stated that this 

assertion by EPA is unprecedented in the 111(d) context. Commenters said it is also unsupported 

in the record. Commenters said, for example, EPA's 376-page Regulatory Impact Analysis (RIA) 

accompanying the proposed rule barely mentions EPA's treatment of "under construction" 

nuclear and lacks any additional supporting analysis or explanation. Commenters noted, where 

the RIA does reference "under construction" nuclear, EPA simply adds a footnote (p. 3-10, at n. 

38) referencing the 224-page Greenhouse Gas Abatement Measures Technical Support 

Document (GGAMTSD), (53 RIA, at 3-10.) which in turn contains just one paragraph 

purportedly discussing EPA's approach to "under construction" nuclear - a paragraph merely 

reciting EPA's assertion in the proposed rule about the "incremental cost" of completing these 

projects. Commenters stated that this is circular reasoning and is not a legitimate explanation for 

why EPA believes, as a legal and technical matter, completion of nuclear units under 

construction constitutes BSER. Commenters noted, in the GGAMTSD, like the RIA, EPA 

provides no additional analysis or supporting information for its treatment of states where 

nuclear units are currently under construction. (54 EPA's explanation and analysis for its 

approach to "under construction" nuclear falls woefully short of the applicable requirements for 

RIAs. See Office of Management & Budget, Regulatory Impact Analysis: A Primer, available at 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/circular-a-4_regulatoryimpact-analysis-a-primer.pdf. ) Commenters said equally unsatisfactory is EPA's legal 

memorandum accompanying the proposed rule, which simply asserts that Watts Bar 2, Vogtle 3-

4, and Summer 2-3 have "long been known to grid operators for planning purposes." (55 EPA 

Legal Memorandum for Proposed Carbon Pollution Emission Guidelines for Existing Electric 

Utility Generating Units, at p. 69, available at http://www2.epa.gov/sites/production/files/2014-

06/documents/20140602-legal-memorandum.pdf.) Commenters noted that this lone reference 

does not justify EPA's legal assertion that completion of nuclear units under construction 

constitutes BSER. Moreover, commenters noted that EPA has not explained its determination 

that, for purposes of the section 111(d) analysis, these units are adequately demonstrated. (56 As 

EPA notes in the proposed rule, section 402(i) of the EPAct of 2005 states: "No technology, or 

level of emission reduction, solely by reason of the use of the technology, or the achievement of 

the emission reduction, by 1 or more facilities receiving assistance under this Act, shall be 

considered to be (1) adequately demonstrated for purposes of Section 111 of the Clean Air Act " 

42 U.S.C. 15962(i). Importantly, Congress crafted this limitation broadly; namely, with respect 

to "facilities receiving assistance under this Act [i.e., the EPAct]." The EPAct provided various 

forms of assistance for new nuclear reactors, including tax credits and loan guarantees. The 

operators of Vogtle 3-4 and Summer 2-3 have received, or will receive, assistance provided 

through that legislation, and as such, these units should not, as a legal matter in this context, be 

deemed "adequately demonstrated." See Congressional Research Service Report, Nuclear Energy 

Policy, at p. i (Sept. 19, 2013) ("Significant incentives for new commercial reactors were 

included in the Energy Policy Act of 2005 (EPACT05, P.L. 109-58), such as tax credits and loan 

guarantees.").) 
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Comment 4: Commenters urged the EPA to consider more energy sources in compliance 

determination. 

Response 4: The EPA addresses the role of BSER RE technologies in section V of the final rule 

preamble of the CPP and non-BSER measures to achieve standards of performance in section 

VIII. 

The following are summaries of the specific public comments under this comment: 

Commenters encouraged the EPA to allow states to consider forms of energy production, other 

than wind and solar, that emit CO2 but are beneficial to the environment at a rate that would be 

beneficial to compliance. Commenters supported a flexible process that will allow existing, new 

and/or as yet unproven energy technologies to be included in Kentucky's qualified technologies 

under the CPP in future. Commenters encouraged the EPA to allow states to employ 

technologies that provide environmental benefits beyond the CPP to be included in CPP 

compliance measures. Commenters stated a broad collection of technologies under Building 

Block 3 should be allowed, such as: landfill gas to energy facilities; alternative energy resources 

for co-firing with coal or stand-alone power production; waste coal (gob); tire-derived-fuel; 

municipal solid waste; shingles; biomass; waste wood; rail road ties; forest slash; energy crops; 

methane recovery from anaerobic digestion of animal wastes; and hydro. 

Comment 5: Commenters asserted the EPA should model the expansion of RE, including upper 

limits on deployment. 

Response 5: The EPA does model the final building block 3 generation levels to assess their 

technical feasibility and cost-effectiveness. That modeling includes upper limits on the 

penetration of variable, non-dispatchable RE for each of the model’s 64 U.S. sub-regions. The 

limits are 20% of net energy for load by technology type and 30% of net energy for load for all 

variable, non-dispatchable RE technologies. These levels are well supported by existing 

deployment levels as well as a host of studies and analysis that are detailed in chapter 4 of the 

GHG Mitigation Measures TSD supporting the final CPP. The methodology that produces target 

generation levels under building block 3 is described in detail in section V.E of the final rule 

preamble of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters said there is enough scientific evidence to quantify an upper limit on renewable 

energy penetration. The issue with increasing penetrations is the intermittency of renewable 

energy and the cost of significant amounts of low carbon capacity (or resource adequacy) is not 

yet known as this has always been a service provided by dispatchable, fossil fuel generators, the 

commenters added. The EPA assumed technical limits based on averaging the existing RPS's of 

EPA determined regions, the commenters said. Commenters stated this method appears arbitrary 

as the existence of policies with alternative compliant mechanisms that have yet to come to 

fruition do not prove feasibility, particularly for neighboring states that have different markets, 

transmission constraints, and natural resources. At the least, the commenters argued that the EPA 

should model the expansion of renewable energy and include cost estimates for variability, 
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transmission, curtailment, and capacity costs that would result, just as the commenters have done 

when estimating the costs of policies. 

Comment 6: Commenters asserted all states should equally bear RE investment costs. 

Response 6: In the final rule, the EPA has reduced state-level disparities in RE by quantifying 

building block 3 target generation as incremental RE and applying that generation at the 

interconnect-level. For more detail on the building block 3 target generation methodology, refer 

to section V.E of the final rule preamble of the CPP and chapter 4 of the GHG Abatement 

Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that creating a plan where all states share equally the cost of investing in 

appropriate RE, from both a technical and economic perspective is crucial. Commenters stated 

the EPA's approach for BSER for Washington's fossil fuel plants requires that Washington 

generate an additional 9.8 million MWh from RE, more than their 2012 fossil fuel generation. 

Commenters stated this BSER approach is clearly not fair considering that the seven states with 

the least 2012 investment in RE generation (MD, TN, CT, KY, DE, RI, AK ) have a 2029 

combined RE target that is less than Washington's target in 2029 of 17 million MWh. 

Comment 7: Commenters expressed concerns regarding the variability of RPS standards. 

Response 7: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E of the final rule preamble and 

in chapter 4 pf the GHG Mitigation Measures TSD supporting the final CPP . 

The following are summaries of the specific public comments under this comment: 

Commenters expressed concern that RPS standards vary greatly and can include: hydroelectric 

generation, municipal solid waste, combined heat and power, clean coal, carbon capture and 

sequestration, and energy efficiency measures. Commenters stated the EPA would not define any 

of these technologies as RE and using its historical contributions to develop RE targets will 

inflate the goals. Furthermore, the commenters observed, the CPP does not respect the rate 

increase caps included in some of the state RPS or the fact some of the RPS are purely voluntary 

goals. In addition, the commenters concluded, RE requires significant transmission investment 

and only a small percentage of the nameplate capacity of wind RE generation can contribute 

toward meeting utility Planning Reserve Margin requirements. 

Commenters stated the EPA's assumptions ignore states' economically reasonable resource 

limitations and the cost effectiveness of each type of renewable source. 
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Commenters stated that EPA's assumptions for achievable levels of renewable energy in each 

state are based on a regional analysis of existing state laws - Renewable Portfolio Standards 

(RPS) - that requires a certain percentage of all generation be "renewable" in nature and is 

inappropriate. The commenters stated EPA's proposal fails to recognize that each state RPS is 

far more complex than merely a single percentage value; whereas, EPA assumes that all RPS are 

created equal, and simplistically require a set percentage of generation to come from renewable 

resources, each RPS is unique. The commenters gave the examples of "safety valves" to ensure 

the requirement for a certain percentage of renewable energy does not result in exorbitant energy 

costs and each RPS contains its own applicability rules, defining what is and what is not 

"renewable," some of which may conflict from state to state. The commenters stated the EPA has 

failed to provide a clear definition of "renewable" energy in its own proposal, given that EPA 

largely ignores hydropower in its analysis and admits that its effort to address biomass remains 

incomplete (even though most state RPS laws would count both resources as "renewable"). The 

commenter stated EPA's building block 3 assumptions actually increase the stringency of the 

state RPS laws upon which it is built by eliminating any "safety valves" and state-specific 

applicability rules that would otherwise apply and used New Mexico's "Renewable Energy Act"-

to illustrate. 

Commenters also stated the EPA proposal overrides the policy choices made by the New Mexico 

legislature in favor of policy choices made by other state legislatures that EPA prefers, and the 

commenters questioned whether the Clean Air Act provides EPA that level of legal authority. 

The commenters stated the imposition of one state's policy choices on another also fails to take 

into account the significant intra-region differences that exist. 

Comment 8: Commenters expressed concern that the EPA's reliance on existing state RPS goals 

fails to account for the fact that many states have built in mechanisms to suspend or scale back 

RPS goals if certain price caps are exceeded. 

Response 8: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's reliance on existing state RPS goals fails to account for the fact 

that many States have built in mechanisms to suspend or scale back RPS goals if certain price 

caps are exceeded; as a result, the RPS goals do not necessarily reflect a state's belief that the 

RPS goals can actually be achieved. 

Commenters stated the EPA misrepresents the standards that states have adopted because most 

state standards contain "off-ramps," where the state could acquire a lower amount of renewable 

resources than the numerical levels set forth in the standards depending on impacts on cost or 

grid reliability. 
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Commenters stated these "off-ramps" also represent legislative choices that the EPA ignores 

given its view that it should be the arbiter of "best practices" for renewable resource 

development. Commenters provided the following examples: 

• 7 states have annual cost caps on utilities' annual revenue requirement for 

renewable 

resource development; 

• 4 states have a retail rate impact limitation; 

• 3 states cap the monthly surcharge on a customer's bill at a set amount; 

• 13 states provide for payment into a fund as an alternative compliance 

mechanism; 

• 3 states subject renewable resources to review under a just-and-reasonable 

standard; 

• Virtually every state with a portfolio standard has some other form of off-ramp, 

such as a waiver or a freeze, depending on compliance impacts.

• EPA fails to account for the fact that municipal and cooperative utilities typically 

are 

exempt from portfolio standards. 

Comment 9: For some states, RE targets under the proposed approach are less than the states 

reported RE generation amounts for 2012. 

Response 9: In the final rule, the EPA applies building block 3 generation at the interconnectlevel. For more detail on the building block 3 target generation methodology, refer to section V.E 

of the final rule preamble of the CPP and chapter 4 of the GHG Mitigation Measures TSD 

supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that for some states the renewable energy generation targets developed using 

this proposed approach are less than those states' reported renewable energy generation amounts 

for 2012. Commenters stated that, to address this issue, NextEra Energy recommends that the 

approach for quantifying the renewable energy generation component of each state's goal be 

modified to include a floor based on reported 2012 renewable energy generation in that state. 

Comment 10: Commenters expressed concern regarding the cost and implementation challenges 

of building block 3, including transmission infrastructure. 
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Response 10: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed concern regarding the cost of implementing building block 3 and 

transmission infrastructure related to additional renewable energy. 

Commenters stated the EPA overestimated the potential availability of renewable capacity and, 

because these resources will not be available to the extent that EPA has projected, States likely 

will have to implement other measures to achieve their emissions reduction targets, at greater 

cost and greater impact on electricity reliability (for a more detailed discussion of these points, 

see Industry Coalition Comments at Sec. VII.E.4). 

Commenters stated the EPA fails to account for the significant cost and numerous 

implementation challenges that would result from nationwide implementation of a large volume 

of renewable capacity. Commenters stated these implications result primarily from the 

intermittent nature of many renewable energy sources, such as wind and solar, and the 

substantial new transmission infrastructure that would be needed to bring renewable generation 

from the resource location to population centers and industrial areas. Commenters stated that, 

particularly for States with large generating capacities, EPA's projection that annual growth 

factors of renewable capacity in the double digits are achievable may prove difficult to sustain in 

practice. 

Commenters requested the EPA to encourage states to work with transmission owners and 

providers and RTOs and ISOs, where they exist. Commenters stated that, because transmission 

siting is largely subject to the jurisdiction and varying requirements of individual states, states 

have the ability to work with each other and with transmission planners and agencies having 

responsibility to protect land and other resources, to make the permitting process, including 

environmental reviews, less duplicative and inefficient. Commenters stated the EPA should 

reject the urge to discount the importance of transmission to fulfilling its goals and the EPA 

should not assume that the industry will always find it easy to avoid or diminish congestion, 

build new infrastructure to compensate for a lack of market access, or address reliability 

challenges. Commenters stated that, if the need for transmission is not articulated in the state 

plans, a coordinated approach to addressing these challenges becomes all the more difficult. 

Commenters stated the EPA must help ensure that transmission is part of its strategic approach 

as it facilitates the very fundamental changes in the way electric generation is planned, fueled, 

and dispatched. 

Commenters stated that, as renewable energy technologies have become more cost competitive 

and efficient, the primary obstacle to its further deployment in areas having the highest quality 

wind and solar resources remains the lack of adequate transmission capable of moving green 

energy to distant markets. Commenters stated this factor is fundamental to the feasibility of 

Building Block 3 of the EPA's proposed rule. Commenters stated that, to ensure the role of 

transmission is considered, transmission owners and providers, as well as RTOs and ISOs, 
12 

should be afforded the opportunity to furnish technical information in support of transmission 

solutions capable of increasing the efficiency of the system as a whole, while also achieving 

emissions reduction goals. Commenters stated that, as FERC recognized in establishing its Order 

No. 1000 planning processes, transmission is a regional and even interregional phenomenon that 

requires a broad planning perspective and a determination to coordinate state law and regulation 

as never before. Commenters stated that transmission planning and development is growing 

more complex and often more difficult (e.g., differing state and federal facilities siting regimes, 

conflicting cost allocation theories and proposals, and multiple layers of environmental reviews 

under both state and federal law), as evidenced by lengthy regulatory approval processes and 

construction periods, even when important reliability needs or the requirements of public policy 

like lower carbon generation are at stake. Commenters stated that, if the need for transmission is 

not articulated in the state plans, a coordinated approach to addressing these challenges becomes 

all the more difficult. 

Commenters said that natural gas use currently is largely tied to providing peaking power and 

providing voltage support and inertia to the system to compensate for the variability of wind and 

solar resources. The commenters said the expansion of RE will be highly dependent not only on 

transmission, but also on the continued robustness of the grid (see generally NERC Report). The 

commenters added robustness of the grid as it relates to integrating renewable energy is currently 

provided by natural gas generation facilities (and, in the future possibly, pumped storage). 

Commenters stated the expansion of RE will therefore require the expansion of natural gas 

power to follow the load and to compensate for the variability of renewables at a higher level. 

Commenters noted this increase in natural gas will require build-out of natural gas infrastructure 

and the build-out of transmission, the construction of natural gas pipelines and transmission 

require lengthy permitting processes, environmental impact assessments, and additional costs to 

consumers. Commenters stated the proposed rule and related TSDs do not assess the related 

impacts to natural gas and transmission the commenters said and therefore should be revised and 

re-analyzed to reflect the actual constraints and delays this will cause in RE development and the 

resulting costs to ratepayers. 

Commenters encouraged the EPA to look into regional transmission planning and specifically at 

FERC's Order 1000 as a way to foster states' adoption of the CPP and of renewable 

energy. Commenters stated that in 2011, FERC established a series of rulings (Order 1000) to 

improve the U.S. power grid and reduce its balkanization. Essentially, Order 1000 requires 

public transmission utilities to: (1) engage in regional and interregional transmission planning, 

while accounting for public policy considerations and (2) develop cost allocation methods to 

allocate the costs of new transmission projects among beneficiaries of the transmission line. 

Commenters stated Order 1000 supports renewable energy by ensuring that state policies, such 

as Renewable Portfolio Standards, are taken into account by utilities, and by allowing states to 

share their renewable energy with other states within the same Integrated System Operator (ISO) 

network. Commenters stated it lays the groundwork for the large-scale development of 

renewable energy by facilitating a build out of electric transmission lines connecting renewable 

energy resources and load centers. 

Commenters said that an example of such sharing, which facilitates the flow of renewable energy 

from where it is produced to the load centers where it is consumed, is the Competitive 

Renewable Energy Zones (CREZ) in western and central Texas. Commenters stated this network 
13 

of more than 3,000 miles of transmission lines delivers thousands of megawatts of clean and 

cheap wind energy produced in the Panhandle to the population centers of Dallas/Fort Worth, 

Austin, and San Antonio. Commenters stated this same template for renewable energy 

transmission can be achieved in other ISOs. Commenters stated that for example, utilities and 

states forming part of the Midcontinent Integrated System Operator (MISO) could collaborate 

with each other to bring wind energy generated in North and South Dakota to states like 

Wisconsin and Missouri, thereby fostering greater adoption of renewable energies and allowing 

these states to meet their RPS and 111(d) targets. 

Commenters said that by encouraging utilities across states to collaborate in transmission 

planning, and by setting up new ISOs where there are none currently (in the Southeast and 

West), cost-effective actions can be achieved. Commenters pointed out that there are other cobenefits of renewable energy projects are job creation, local economic development, supply 

chain development, enhanced domestic manufacturing, reduced U.S. energy dependence on 

foreign oil, and decreased health impacts resulting from fossil fuel emissions and climate change. 

Commenters said that in both of the proposed approaches, the RE goals are based, in part, on 

prior RE development trends, yet the prior growth of RE resources is not necessarily an 

indication of future growth. Commenters added that often the most rapid and cost-effective gains 

are achieved in the early years of development and in those areas with the greatest resource 

potential and the greatest potential to deliver and integrate these RE resources (i.e., available 

transmission). In addition, commenters stated many of the prime areas for RE development are 

located far from load centers and will require transmission to be built to deliver the power to load 

centers. Commenters said that a typical transmission line requires five years or more to site, 

permit and construct. Commenters stated large-scale transmission projects, such as high-voltage 

overlays and those needed for RE integration can involve even longer lead times. The 

commenters anticipated incremental RE additions to the grid (especially if geographically far 

from load) potentially will come at an increasingly higher cost. 

Commenters observed that the EPA's approaches are predicated on the assumption that large 

quantities of new RE generation can be integrated into the grid. Commenters stated the EPA has 

not accounted for the technical challenges related to integrating and managing large quantities of 

RE into the existing transmission and distribution system. These challenges grow as the level of 

RE penetration increases, the commenters said. This effect has already been observed in Hawaii 

and Germany, where these technical challenges have slowed the pace of growth of RE and have 

limited their cost-effectiveness as additional grid upgrades are needed to accommodate 

increasing amounts of RE, the commenters explained. In order to set realistic RE generation 

goals, the commenters asserted the EPA must take into account the challenges associated with 

increased penetration of RE when setting RE generation targets under section 111(d). This may 

entail moderating the growth of state RE goals in the later years of the interim compliance 

period, the commenters concluded. 

Commenters said that as a result of infrastructure barriers, in a state like Wyoming where the 

renewable generation for Basin Electric does not exist and the bulk of existing wind power was 

constructed by other companies to meet their out-of-state renewable portfolio standards, the 

construction of new renewable wind resources would have to be supported with new simple 

cycle generators, and it might be necessary to build and maintain a new combined cycle 
14 

generating facility to manage the variability in these new loads, the commenters said. None of 

this infrastructure exists, according to the commenters. The infrastructure to replace coal-based 

generation within Wyoming does not exist, has not been developed, is not planned, and cannot 

be constructed by 2020, the commenters asserted. 

Commenters stated concern about the impact of additional intermittent resources on service 

reliability requirements. The commenters noted Florida requires a robust, diverse, and 

dispatchable baseload generating fleet; however, many of the low- or zero-carbon technologies 

EPA assumes in its Building Block 3 allocation to Florida are intermittent, non-dispatchable, 

non-baseload technologies. Commenters provided the example that in 2013 the monthly capacity 

factor for solar photovoltaics in the U.S. ranged from 13 to 22 percent, which showed there is no 

demonstrated baseload solar option. The commenters said the low capacity factors of many lowor zero-carbon technologies (excluding nuclear and possibly co-firing with biomass) combined 

with Florida's need for dispatchable baseload generation means that Florida would likely need to 

build additional natural gas-fired facilities and related infrastructure for use as stand-by units for

reliability purposes simply because of EPA's assumed requirement. The commenters referred 

to a recent report from Brattle.com entitled "Solar Energy Support in Germany-A Closer Look" 

that assesses Germany's efforts to increase renewable generation resources noted an expected 

cost increase associated with redispatch, curtailment, and other remediation actions necessary to 

maintain reliability. Commenters said EPA errs in failing to account for these additional 

expenditures or the implementation time needed to ensure electric reliability. 

Commenters stated EPA should encourage more flexible market-based approaches to supplying 

renewable power to reduce the emission reduction burden on fossil fuel power plants. 

Commenters said the increased use of renewable energy also can play a large role in reducing 

electric power sector GHG emissions. Commenters said to the extent legally permissible, 

therefore, using renewable energy as a means of achieving performance standards, to facilitate 

market-based emission reductions, makes good sense. Commenters said at a minimum, power 

plant operators should have the option of being able voluntarily to take advantage of increased 

renewable energy use through a crediting mechanism to meet BSER obligations. Commenters 

said EPA should also consider additional means to promote the use of renewable electricity, 

including the direct purchase of renewable energy through flexible contract options, shared or 

community renewable tariff programs and other programs involving the physical delivery of 

clean electricity. Commenters said these options, which are aimed in large part at making it 

practical for corporations and other large electricity users to buy RE (and not just Renewable 

Energy Certificates (RECs)), could play a significant role in attracting additional RE supply in 

many states. Moreover, commenters added, the EPA's express support for such supply-inducing 

regulatory incentives, would align the agency with the President's recent December 2013 

guidance to federal agencies on best practice procurement policy for renewable generation. 

Commenters said a robust voluntary RE option under the Proposed Rule would leverage the 

augmented role of gas-fired generation under the Rule. Commenters said flexible gas-fired 

facilities play a key role in providing load-support to variable renewable energy when the wind is 

not blowing and the sun is not shining. 
15 

Comment 12: Commenters took issue with the assumption that RPSs are a reasonable proxy for 

quantifying renewable generation potential. 

Response 12: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP.

The following are summaries of the specific public comments under this comment: 

Commenters stated that, although South Carolina does not have a renewable portfolio standard 

(RPS) in place, and is not currently a member of a GHG trading program, the state has taken just 

as many other significant steps resulting in a measurable reduction of CO2 emissions. 

Commenters stated South Carolina is ranked high among states for clean energy use (5th) and 

Leadership in Energy and Environmental Design (LEED) for building space per capita (top 10). 

Commenters stated the state legislature updated, by Act 143, the South Carolina Energy Standard 

to the 2009 International Energy Conservation Code (IECC) for all commercial and residential 

building with an effective date of January 1, 2013. Commenters stated South Carolina also ranks 

highly among states regarding its use of nuclear power generation as a component of a diverse 

fuel portfolio. 

Commenters stated that calculating renewable energy targets by region is not representative of 

actual planned renewable energy generation levels in those regions. Commenters expressed 

concern that states with no published RPS are not included in the averaging calculation, even if 

those states have voluntary renewable energy programs or RE generation facilities that were 

developed outside of a formal RPS requirement. Commenters stated the effect on the final 

regional RE targets is that they are skewed toward certain states that may represent unusual or 

unique technical potential for RE development. 

Commenters stated that, because not all states have or will have an RPS or other state renewable 

energy policies, they urged the EPA to carefully consider the impact of all types of renewable 

energy procurement on state compliance plans, and not just renewable energy generated in 

response to a state RPS or similar state policies. Commenters stated consumers and businesses 

are making significant commitments to renewable energy generation for reasons other than RPS 

compliance and such customer-driven renewable energy demand may be a particularly important 

driver for renewable energy development in the future. Commenters stated that the actions of 

non-utility parties are largely unaccounted for in the Clean Power Plan. Commenters encouraged 

the EPA to consider the impact of allowing states to adopt policies that empower non-utility 

parties to contribute to state compliance under the Clean Power Plan. Commenters stated they 

support the approaches that will drive the most low-carbon energy onto the grid. 

Commenters stated EPA errs by establishing an overly restrictive definition of renewable 

technologies to be used to meet Building Block 3 goals. Commenters stated the EPA allows 

technology that is fueled by sun, wind, water, organic matter, and other resources regularly 

replenished by physical or biological cycles (GHG Abatement Measures TSD at 4-1). 

Commenters stated the excessively narrow scope of EPA's definition is highlighted by reviewing 

the broad definition in North Carolina's REPS, which classifies renewable technologies as: Solar 

electric, solar thermal, wind, hydropower, geothermal, or ocean current or wave energy resource; 
16 

a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping 

liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill 

methane; waste heat derived from a renewable energy resource and used to produce electricity or 

useful, measurable thermal energy at a retail electric customer's facility; or hydrogen derived 

from a renewable energy resource. 

Commenters stated EPA should acknowledge each state's definition for renewable energy is 

unique to them based on the resources available to them within their borders and include these 

generation sources for compliance. 

Commenters stated the EPA assumption that existing RPS targets are feasible across all states 

within a defined region does not adequately consider the varying definitions of renewable across 

the states. Commenters also stated that renewable resources physically located in one state are 

often used to satisfy RPS requirements in other states. Commenters took issue with the 

assumption that RPSs are a reasonable proxy for quantifying renewable generation potential, and 

cited literature showing that motivations for RPS implementation and stringency are multifaceted and include many state-specific factors that cannot be generalized to other contexts or 

assumed to be indicative of best practices over a multi-decadal horizon. 

Commenters suggested tribal lands should not be included in assessing a state's RE potential at 

all, considering that tribes are not subject to the Proposed Rule; these drawbacks must be 

addressed before considering any option related to technical potential. 

Commenters stated the EPA should be aware that states such as New Mexico with a large rural 

population and many rural electric cooperatives often have secondary and even tertiary standards 

which are necessarily lower than those for the investor owned utilities (IOUs), due to the 

demographics of the rural population as well as transmission constraints of rural areas. 

Commenters stated a focus only on primary standards in setting a regional "average" RPS 

ignores the demographics and constraints unique to rural electric cooperatives. 

Comment 13: Commenters suggested that RPS policies need to be increased and broadened. 

Response 13: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested elements from state RPS design and grid control area policy be 

synthesized to present best practices that facilitate renewable energy development, with a 

particular emphasis on leveraging private sector financing. Commenters suggested that, for states 

with existing RPS policies, the states can make their RPS targets more robust by aligning with 

the timeline of the CPP through 2030 and raise overall annual RPS targets. 
17 

Commenters stated that state RPS policies have provided investors and developers with 

important long-term, market demand targets and have been a successful, low-cost tool with more 

than 68% of renewable energy generation in the U.S. (~51 GW) occurring in states with RPS 

policies at a cost of less than 2% of electric rates in states with RPS policies. Commenters stated 

that, to achieve CPP targets through greater use of cost-competitive renewable energy, RPS 

policies need to be increased and broadened, possibly to more states and to more utility 

segments. Commenters noted thirteen states presently do not have RPS policies, and in some 

states not all utilities are covered by existing policies. Commenters said that all future 

requirements under existing RPS policies only amount in the range of 3.5 GW of new renewable 

energy power each year through 2030 (ACORE-US PREF), well below what the US renewable 

energy industry can deploy. Commenters stated renewable energy additions have averaged 

approximately 10 GW per year since 2008, including more than 16 GW in 2012 (FERC) or 49% 

of all new capacity that year. Commenters stated the ability of the industry to ramp up generation 

is virtually unlimited. 

Commenters indicated that a number of states on a bipartisan basis have already taken action to 

increase or strengthen their RPS policies. The commenters said, in 2009, California's Governor 

issued an executive order increasing the state's RPS target from 20% by 2010 to 33% by 2020. 

Commenters added that in Colorado, the state legislature in 2007 modified the state's RPS 

program (from a 2004 ballot initiative) to include a higher target; the 2007 modifications also 

added separate renewable energy requirements for electric cooperatives, which previously had 

been omitted from the state's RPS mandate. The commenters said in 2010, the Colorado 

legislature again increased the state's RPS target, to its present level of 30% by 2020. 

Commenters added, in 2012, the Maryland legislature enacted a bill accelerating compliance 

deadlines for the state's solar carve-out (including changing the ultimate 2% target date from 

2022 to 2020). Lastly, the commenters indicated that in 2013, Minnesota increased its RPS to 

40% and New Jersey in 2010 converted its significant RPS target to a capacity requirement 

(versus a percent of generation). 

Comment 14: Commenters asserted that the EPA should adopt the UCS Demonstrated Growth 

Approach. 

Response 14: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology. The final methodology to establish building block 3 generation 

levels is consistent with several of the recommendations provided in the UCS Demonstrated 

Growth Approach – the final methodology relies on the capacity deployment of select RE 

technologies over the most recent five-year period, takes into account current law and RPS 

policies, and assumes continued growth in RE at levels equal to the EPA IPM Base Case through 

2021. The final methodology for building block 3 is described in section V.E of the final rule 

preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final 

CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended strengthening the renewable energy building block by adopting the 

UCS Demonstrated Growth Approach (UCS Approach). 
18 

Commenters stated the UCS Approach is a logical outgrowth of the EPA's approaches for 

determining the BSER for the renewable energy building block. Commenters recommended the 

EPA revise its methodology by (1) setting renewable energy growth rates that are already being 

achieved by many states; (2) incorporating full compliance with current state RES laws; (3) 

using actual generation data from 2013 (or the most recent year available) and including recent 

and planned renewable energy development between 2013 and 2017; and (4) committing to 

reviewing and strengthening state emissions reduction targets, as well as state renewable energy 

targets, by 2025, to ensure that the CPP is updated to reflect the latest opportunities for cutting 

CO2 emissions. 

Commenters explained the UCS Approach would (1) set a national renewable energy growth rate 

benchmark based on demonstrated growth in the states from 2009 to 2013; (2) assume full 

compliance with current state RES policies, as set by law, that require certain percentages of 

electricity to come from renewable sources; and (3) account for actual and expected renewable 

energy growth between 2013 and 2017. Commenters stated the UCS Approach assumes statelevel renewable energy targets begin in 2017 and ramp up through 2030. To determine each 

state's 2017 baseline generation levels, commenters recommended using EIA's actual renewable 

generation data from 2013 (the EPA's approach uses 2012 data) and add projected generation 

from wind and utility-scale solar projects known to be under construction through 2016. To 

calculate state renewable energy targets for 2030, commenters recommended a four-step 

approach: 

• First, we use EIA data to calculate each state's average renewable energy growth 

rate over the five-year period from 2009 to 2013. We find that, on average, states 

increased their renewable share of electricity sales by 1 percent annually. This 

growth rate serves as our national benchmark. The 2009-2013 benchmark period 

accounts for the recent rapid growth in wind and solar technologies; it eases 

fluctuations in development due to uncertainty around federal tax credit 

expirations and extensions; and it captures much of the historic development 

spurred by state RES policies-a key driver of renewables growth. Eleven of the 15 

leading states that have achieved growth rates at or above the national benchmark 

from 2009 to 2013 have also achieved a 1 percent or higher average annual 

growth rate over a 10-year period from 2004 to 2013. 

• Second, for states below the 1 percent national benchmark, we assume that they 

gradually ramp up to that rate from 2017 to 2020 in a similar way that the EPA 

assumes energy efficiency targets would ramp up in Building Block 4. This 

period serves as an opportunity for states that have not been as active in deploying 

new renewable energy sources to catch up to the national benchmark. Renewable 

energy is assumed to grow after 2020 in these states at an annual rate of 1 percent 

of total sales through 2030. 

• Third, for the 15 leading states among those that have been deploying renewable 

energy at or above the national benchmark, we increase their respective renewable 

energy targets from 2017 to 2030 at each state's average annual growth rate 

during the five-year benchmark period, up to a maximum of 1.5 percent per year. 

We view this as a reasonable limit that can be sustained over time in states with 
19 

strong renewable energy potential. This is supported by the fact that seven states 

have achieved annual average growth rates of 1.5 percent or more over a 10-year 

period from 2004 to 2013 based on EIA data. Moreover, a 1.5 percent growth rate 

is consistent with renewable energy targets set by leading RES states. 

• Fourth, to account for full compliance with mandatory state RES laws, we assume 

that states achieve the greater of two measures: the generation projected by our 

growth rate approach; or the level needed to meet states' respective RES targets 

for each year from 2017 to 2030, as projected by the Department of Energy's 

Lawrence Berkeley National Laboratory. To ensure reasonably achievable 

renewable energy penetration rates during the compliance period, we also cap the 

total share of renewable generation for any state at 40 percent of total state 

electricity sales, a level that several studies by grid operators, utilities, and 

government agencies have shown can be achieved at the state and regional level 

in this timeframe while maintaining reliability. Only seven states hit this cap prior 

to 2030. 

Commenters stated that key constraints included in the UCS Approach, such as the 1.5 percent 

annual growth rate cap and the 40 percent cap on the overall target, are reflective of current 

conditions and thus should be flexible over time. Commenters stated that, as the EPA undertakes 

regular reviews of the CPP, which should occur at least every eight years as allowed by the 

Clean Air Act, these constraints could be adjusted upward or eliminated to reflect improvements 

in renewable energy technologies, grid integration techniques, and falling costs. 

Commenters stated that, if all states met these targets, the nation's electricity coming from 

renewable energy in 2020 would double compared with the EPA's proposal-from 7 percent of 

total U.S. electricity sales to 14 percent and, by 2030, it would result in a 23 percent share of 

renewable energy, as compared with 12 percent under the current the EPA proposal. 

Commenters stated that achieving higher levels of renewable energy generation under the UCS 

Approach is technically feasible. Commenters stated they used the same data from NREL that 

the EPA relied on for its alternative approach, and, in every CPP-region, the UCS Approach 

requires only a small fraction of the vast renewable energy resources that are technically 

available. Commenters stated the technical potential based on the EPA's methodology includes 

utility and distributed solar photovoltaics, onshore wind, geothermal, and bioenergy. 

Commenters noted their estimates do not include the tremendous offshore wind potential in the 

U.S., which the EPA excluded because they claimed that the technology has not been adequately 

demonstrated to qualify for the BSER. Commenters referenced a recent DOE report showing that 

14 offshore wind projects totaling 4.9 GW are in advanced stages of development in nine states 

and the Virgin Islands and stated that, given the status of these projects, and the likelihood that 

states will include them in their state compliance plans, the EPA should consider including a 

contribution from offshore wind as a potential BSER option over time. 

Commenters stated that the UCS Approach is affordable. Commenters stated that, using the 

National Renewable Energy Laboratory's Regional Energy Deployment System (ReEDS) model, 

they analyzed the impacts on CO2 emissions, electricity and natural gas prices, and the 

electricity generation mix of achieving the state renewable energy targets under the UCS 

Approach compared with business as usual. Commenters stated their analysis is a reasonable 
20 

approximation of the incremental costs and impacts of increasing renewables under the Clean 

Power Plan; however, they did not analyze the full impacts of implementing the entire draft rule. 

Commenters stated their analysis included updates to technology cost and performance 

assumptions that reflected data from recent project installations and mid-range projections from 

several recent studies as discussed in more detail below and a separate technical appendix. Under 

the UCS approach, commenters stated total CO2 reductions achieved by the Clean Power Plan 

could increase from 30 percent below 2005 levels to nearly 40 percent. Commenters stated the 

ReEDs modeling showed that the additional renewable energy generation would displace mostly 

natural gas. Commenters stated that diversifying the electricity mix with renewable energy 

would help reduce the economic risks associated with an overreliance on natural gas and 

reducing the demand for natural gas would also lead to lower and more stable natural gas and 

electricity prices. Commenters added they analyzed sensitivities related to key parameters in the 

UCS Approach and found that it is robust to these changes. 

Commenters stated that, under the UCS proposed approach, national average consumer 

electricity prices were a maximum of 0.3 percent higher per year than business as usual through 

2030. Commenters stated that, as a result, a typical household (using 600 kWh per month) would 

see a maximum increase of 18 cents on their monthly electricity bill on average at the national 

level. Commenters stated that, under the UCS Approach, the national average price of natural 

gas delivered to the electricity sector would be 9 percent lower than business as usual by 2030. 

Commenters stated that, at the regional level, average consumer electricity prices would range 

from a 3.7 percent reduction to a 3.4 percent increase, while power sector natural gas price 

reductions would range from 8 percent to 17 percent by 2030. Commenters stated that previous 

studies have shown that reducing natural gas use in the electricity sector with renewables and 

energy efficiency can also help reduce consumer natural gas prices and bills for heating, 

manufacturing, and other uses. Commenters stated, for example, a 2007 EIA analysis found that 

implementing a national RES of 25 percent by 2025 would lower cumulative (from 2009 through 

2030) consumer natural gas bills by $17 billion (or 1 percent), more than offsetting the 

cumulative $15 billion (0.4 percent) increase in consumer electricity bills. Commenters stated 

these benefits are not captured in the UCS Approach, which uses an energy model that focuses 

only on the power sector. Commenters stated they found that the incremental cost of increasing 

renewables under the UCS proposal was at or below $30/MWh, the range that the EPA identifies 

as meeting the BSER cost criteria under the Clean Power Plan. Commenters stated these results 

assume national trading of renewable energy credits (RECs). Commenters stated that, if there are 

any limits placed on trading between regions, experience with renewable energy markets 

suggests that REC prices would likely be higher in some regions and lower in other regions of 

the country. 

Comment 15: Commenters stated the NREL technical potential report was inaccurate in its 

estimates. 

Response 15: The final methodology for building block 3 does not rely on a benchmark 

development rate quantified through NREL technical potential estimates, as proposed under the 

Alternative RE approach. The EPA believes the RE resource estimates and cost steps that 

underlie IPM projections appropriately represent relevant land use restrictions. Further, building 
21 

block 3 target generation levels are quantified at the interconnect-level, providing significant 

development flexibility. Refer to chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP for additional analysis on the assumed renewable resource potential. 

The following are summaries of the specific public comments under this comment: 

Commenters referred to a NREL report estimating renewable energy potential and stated the 

environmental exclusions NREL relied upon underestimate restrictions on renewable energy 

deployment and, as a result, significantly overestimate Oklahoma's renewable energy potential. 

Commenters stated renewable energy potential was analyzed by NREL based both on the 

potential for development of a particular renewable energy type in a particular location and on 

whether a given location could permit development of that renewable energy resource. 

Commenters added the reports excluded areas that NREL determined would not permit the 

development of a certain renewable energy type, because of either topographic or environmental 

land restrictions. Commenters stated that having failed to account for the ESA and recent land 

use restrictions, NREL suggests that 58 percent of Oklahoma's land area is available for wind 

generation and 56 percent is available for rural solar photovoltaic ("PV") generation. 

Commenters stated that, when the habitats of the ESA-listed lesser prairie chicken are removed 

from consideration, the technical potential of available wind and solar development is reduced 

significantly. Commenters stated Oklahoma's hydropower potential must also be significantly 

reduced, as NREL failed to consider exclusions for the habitats of six listed aquatic species 

which reside in Oklahoma, rivers that NREL determined have hydropower potential. 

Commenters said that the NREL report admittedly overestimated renewable energy by 

permitting double counting. Commenters said that, specifically, the report notes that "the same 

land area may be the basis for estimates of multiple technologies." Commenters stated this 

approach double counts renewable energy potential in Oklahoma by assuming that mutually 

exclusive renewable energy development could occur in the same location when in reality it 

could not. Commenters stated that, for example, Oklahoma's wind and rural solar PV potential 

likely overlap given Oklahoma's topography and population density. Commenters stated that, by 

assuming these technologies can be built on top of each other, the alternative approach 

significantly overstates Oklahoma's potential for both technologies. 

Commenters stated that the NREL report does not provide an accurate representation of 

hydropower potential in Oklahoma. Commenters said that NREL estimated hydropower 

potential based on a decade-old study that in turn relies on even older median data. The 

commenters said that according to the EPA and numerous hydrologists, climate change is and 

will continue to significantly affect streamflow dynamics. In light of these dynamics, 

commenters stated that the EPA should utilize a more recent, and thus more accurate, hydrologic 

dataset. Commenters stated that in the alternative, the EPA should justify its reliance on this 

older data. 

Comment 16: Commenters recommended using NREL estimates of technical potential for 

specific RE generation technologies. 
22 

Response 16: NREL technical potential data is used in the EPA’s power sector modeling 

analysis to support the building block 3 generation levels. For additional information, refer to 

the Chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that EPA should utilize a determination of technically potential 

renewables in a similar manner to the National Renewable Energy Laboratory (NREL) estimates 

of the technical potential of specific renewable electricity generation technologies. 

Comment 17: Commenters stated EPA overestimated the amount of additional renewable 

energy potential. 

Response 17: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, while the EPA's compliance building block number three assumes that 

about 10 percent of Florida's generation could come from renewable energy by 2030, additional 

renewable energy is not a viable option for us since GRU already has roughly 34 percent of its 

energy coming from renewable energy. 

Commenters stated that a recent MISO study suggests that the EPA's assumptions regarding 

increase in renewable energy are unrealistic, and threaten both grid reliability and an affordable 

energy supply for this country. Commenters stated the MISO study of the impact of the GHG 

Rule found through modeling that renewable energy could not be expected to replace the fossilfuel retirements already planned due to MATS, nor those expected to retire due to the GHG 

Rule. 

Comment 18: Commenters noted factors limiting the inclusion of new RE in Alaska. 

Response 18: No building block 3 requirement has been expressed for Alaska in the final 

methodology. 

The following are summaries of the specific public comments under this comment: 

Commenters stated there are significant limits to including new renewable energy resources in 

the generation mix in Alaska. Commenters stated geographic and economic constraints limit the 

availability of utility grade renewable energy resources. Commenters stated utility grade wind 

and geothermal generation resources are generally located in southwest and western Alaska, 

hundreds of miles away from transmission facilities connected to affected EGUs. Commenters 

stated that, given the current state of technology and the low angle of sunlight during much of the 
23 

year, our solar resources are not utility grade. Commenters stated Alaska is actively investigating 

biomass, hydrokinetic, and hydroelectric resources, and developing those that appear viable; 

however, many of these resources are also not located within economic reach of load served by 

an affected EGU. 

Commenters stated that transmission and economic constraints dictate that only smaller 

renewable energy projects can be integrated. Commenters stated the relevant transmission lines 

are already operated substantially at capacity to transfer hydroelectric and natural gas generation 

to load. Commenters stated the cost of making substantial upgrades to the existing transmission 

infrastructure would make most renewable energy projects uneconomic; therefore, most new 

renewable energy projects will have to be sized to interconnect with their local distribution 

system. Commenters stated that only projects producing 2 MW or less can be interconnected 

with local distribution systems and this lack of scale substantially affects project economics. 

Commenters stated that, without economies of scale, Alaska does not have the same 

opportunities to develop projects as the interconnected continental states. 

Commenters stated the affected utilities in Alaska have limited capacity to accommodate 

additional non-firm energy, particularly intermittent generation sources such as wind and solar. 

Commenters stated that, to ensure reliability of the system, firm generation resources must be 

available to follow intermittent generation resources. Commenters stated firm generation 

resource capacity that is sufficiently nimble to continuously follow load in addition to 

intermittent generation resources such as wind and solar must be continuously online. 

Commenters stated the availability of this type of firm generation capacity is limited in Alaska. 

Commenters stated that increased cycling of fossil units occasioned by following intermittent 

generation will decreases the unit's efficiency, leading to an increase in CO2 emissions. 

Commenters stated that measures to regulate wind and solar generated energy could include 

installation of large batteries and flywheels at cost of about $2,000 per kW. Commenters stated 

the integration of significant amounts of non-firm power may also significantly de-optimize 

dispatch and result in higher fuel and generation operation and maintenance costs. 

Commenters stated that their ability to incorporate new renewable energy, particularly on the 

timeline required by this rule, is infused with substantial uncertainty. Commenters stated that, in 

many cases, federal environmental studies and permitting requirements and policy create 

significant barriers to developing even reliable firm renewable energy resources that could be 

safely absorbed into Alaska's electric utility systems, such as storage or lake tap hydroelectric 

generation. Commenters stated that declining prices for Alaska oil is reducing the State's ability 

to provide financing for new renewable energy projects. Commenters stated that, while their 

utilities are actively examining options for new renewable energy resources, many renewable 

energy projects are simply uneconomic. Commenters stated at least one utility notes that the 

projects typically cost two to three times the avoided cost of gas-fired generation. 

Comment 19: Commenters stated that additional increases in renewable capacity in Montana are 

limited. 
24 

Response 19: The final methodology for building block 3 has been modified to quantify and 

apply target generation levels at the interconnect-level, with a two-year phase-in period that 

provides additional time to accommodate additional investments or planning that may be 

necessary in deploying and/or procuring incremental RE. For more detail on the building block 

3 target generation methodology, refer to section V.E of the final rule preamble of the CPP and 

chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters indicated that the MDEQ "White Paper" suggested Montana could significantly 

increase its renewable electricity generation capacity as part of its strategy to comply with the 

proposed Federal rule. Commenters said Montana generated 1661 GWh of renewable electricity 

in 2013. Commenters said MDEQ's analysis suggested the state may need to increase renewable 

capacity by 342 MW to 2,859 GWh by 2030 to help reach Montana's CO2 reduction target. 

Commenters added that Montana has significantly increased its renewable capacity in recent 

years as evidenced by construction of a number of wind farms. Commenters stated that 

additional increases in renewable capacity in Montana are limited by several factors: 

• Montana's high voltage transmission lines are already at or near full capacity and 

additional renewable generation would require new transmission lines or upgrades 

at existing facilities. 

• Securing rights-of-way for construction of renewable facilities and their required 

transmission capacity is no easy task in Montana-as evidenced by the difficulties 

faced by NorthWestern Energy's attempts to construct the Mountain States 

Transmission Intertie line from Montana Idaho that was planned to increase 

renewable capacity. The proposed line ran into significant opposition related to 

eminent domain issues, landowner concerns about visual and environmental 

impacts, and market considerations. 

• Without the necessary increases in transmission capacity to handle increases 

renewable generation, increased renewable generation would require a decrease in 

coal-fired generation. Decreased coal-fired utilization would likely lead to 

decreased efficiency at these units and thereby substantially offset any benefit 

realized from additional renewable generation. Coal plants are not designed cycle 

to integrate renewables, but are designed to be baseload generating unitsachieving their efficiency by running at constant levels over long periods of time, 

the commenters noted. 

• The high voltage transmission line that runs from Colstrip west depends on the 

inertia provided by the steady generation of the Colstrip coal-fired power plant. 

Reduced capacity at the plant will compromise reliability of the transmissions 

system, the commenters asserted. 

Comment 20: In comments on the tribal and territories SNPR, commenters stated that the 

Proposed Rule's approach to Block 3 yields no new RE in these jurisdictions. 
25 

Response 20: In the final rule, the EPA applies building block 3 generation at the interconnectlevel. This methodology does not distinguish between affected EGUs within an interconnection. 

However, there are no requirements related to building block 3 for Alaska, Hawaii, and the U.S. 

territories. For more detail on the building block 3 target generation methodology and where it is 

applied, refer to section V of the final rule preamble of the CPP and chapter 4 of the GHG 

Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated this result is based on the EPA's assessment that there is currently no utilityscale, grid-connected, non-hydropower renewable electricity being generated on these tribal 

lands or in Guam or Puerto Rico - an assessment that overlooks a number of recent and ongoing 

RE projects in those areas. Commenters stated that, since each jurisdiction has a 2012 baseline of 

0 MWh from RE, any percentage increase will similarly yield 0 additional MWh. Commenters 

stated that, for the territories, the EPA co-proposes an alternative approach that would establish 

an expected RE percentage of 0.37 percent of total generation starting in 2017 and would apply a 

9 percent annual growth factor over the course of the compliance period. Commenters stated 

that, by 2029, this co-proposal would result in an RE penetration of 1 percent in the territories. 

Commenters stated the Agency did not propose a similar alternative for the tribal nations, 

reasoning that the co-proposal is based not on domestic electricity consumption but on total 

generation within that jurisdiction. Commenters stated that, since domestic consumption of 

electricity on the tribal lands is only a small fraction of the total generation produced, this coproposal would expect the tribes to develop renewable resource capacities that greatly exceed 

their demand for electricity.

Commenters stated that the Proposed Rule dramatically underestimated the renewable potential 

of the three tribal nation lands, Guam, and Puerto Rico. Commenters stated the region in which 

the tribal nation lands are situated has among the best solar and wind resources in the United 

States and, indeed, the world. Commenters stated, for example, in 2012, the National Renewable 

Energy Laboratory ('NREL') estimated that the Navajo Nation has approximately 1,200,000 MW 

of utility-scale solar capability, and nearly 1,800 MW of wind resource potential, 500 MW of 

which is of high quality, meaning that its capacity factor would be 35 percent or greater. 

Commenters stated Puerto Rico has excellent solar potential, similar to the U.S. Southwest's 

resource, and a ridgeline wind resource that is on par with that of Texas, one of the leading states 

for wind development. Commenters stated Guam and the U.S. Virgin islands have similarly 

strong renewable potential. Commenters stated that, to expect 0 or 1 percent renewable 

generation in these regions does not reflect the best system of emission reduction and would 

sacrifice an important opportunity for reducing emissions in these areas. 

Commenters stated a large percentage of residents on tribal nation lands currently lack 

electricity, despite the fact that large, centralized fossil fuel plants have operated in those 

jurisdictions for decades. Commenters stated that distributed renewable generation combined 

with energy storage and/or microgrids is an ideal option to provide electricity in these 

communities to residents that still lack this vital resource and would help develop green jobs in 

the process. Commenters stated many tribes have already started to develop renewable energy 

within their borders, recognizing the economic development and energy independence benefits 

of such projects. 
26 

Commenters described several planned wind and solar tribal projects. Commenters stated tribal 

renewable energy development has been hampered in recent years by federal restrictions on 

tribes' ability to enter into long-term surface leases; thus, the relative paucity of renewable 

energy projects in tribal areas with excellent resources should not be taken as a sign of their 

infeasibility or lack of interest from the tribal nations. Commenters stated that, in 2012, Congress 

enacted a law to promote greater tribal self-determination and economic development by 

allowing tribes to enter into long-term leases without the historical need for prior approval from 

the Secretary of the Interior. Commenters stated the 'Helping Expedite and Advance Responsible 

Tribal Home Ownership Act of 2012 (the 'HEARTH' Act) requires tribal nations to establish 

their own regulations governing surface leasing, and it is those regulations - rather than the caseby-case leasing decisions - that must approved by Interior. Commenters stated the EPA should 

consult with tribal nations and the Department of the Interior to ensure that the nations have the 

guidance they need to develop these regulations, to ensure that review by Interior proceeds in a 

timely manner, and to ensure that tribes have the requisite authority to negotiate wind and solar 

development leases to achieve compliance with EPA's rule. 

Commenters stated Puerto Rico has taken significant steps toward reducing its reliance on 

imported fossil fuel power, including the establishment of an RPS requiring 12 percent RE by 

2015, 15 percent by 2020, and 20 percent by 2035. Commenters stated the EPA's approach in the 

supplemental proposal ignores the island's RPS targets, even while the Clean Power Plan 

establishes Block 3 targets based on states' RPS goals. Commenters stated that PREPA, the 

island's utility, has signed long-term power purchase agreements with renewable energy 

developers for about 1,000 MW of renewable capacity, which would satisfy the 2015 portfolio 

standard. Commenters stated an existing utility-scale RE project - a 24-megawatt solar 

photovoltaic ('PV') plant at Guayama - is managed by the same company that owns Puerto Rico's 

coal plant. Commenters stated the territory has also become a leader in distributed solar, both 

solar PV and solar hot water heaters: over 11,000 solar hot water heaters installed using 

weatherization assistance program funds, net metering revenue, and tax benefits for small-scale 

PV electricity projects have together reduced electric load on the island by more than 40 MW. 

Commenters stated that, given the high electricity prices in the Caribbean (and, for that matter, 

among the Pacific islands) due to the need for imported oil, renewable energy is a particular 

attractive option for Puerto Rico, and it is reasonable to expect more renewable development 

there. 

Commenters stated the island of Guam has ambitious (though non-binding) renewable energy 

goals. Commenters stated utilities must supply 8 percent of net electricity sales using renewable 

energy by 2020 and 25 percent by 2035, with other interim goals established. Commenters stated 

that, in 2011, the Guam Power Authority ('GPA') issued its first renewables solicitation, leading 

to the approval of the 20 MW Quantum Guam Power solar facility, which was still under 

construction as of 2013 and that GPA has also been negotiating a second project: a 15-MW 

combined solar PV and wind installation. Commenters stated the Department of the Interior 

Office of Insular Affairs and NREL published in 2011 an Initial Technical Energy Assessment 

Report for Guam as part of an ongoing collaborative project to develop a comprehensive energy 

strategy for the territory, to decrease the island's reliance on imported fossil fuels, and to increase 

the resiliency of its grid in the face of future population growth. Commenters stated NREL's 

technical assistance with respect to Guam's renewable energy potential will be extremely helpful 

in developing those resources. 
27 

Comment 21: Commenters suggested there will be increased interest in tribal opportunities in 

meeting targets. 

Response 21: In the final rule, the EPA applies building block 3 generation at the interconnectlevel. This methodology does not distinguish between affected EGUs or opportunities for RE 

development within an interconnection. For more detail on the building block 3 target generation 

methodology, refer to section V.E of the final rule preamble of the CPP and chapter 4 of the 

GHG Mitigation Measures TSD supporting the final CPP. 

Refer to section V.E.6 of the preamble and the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that by instituting a larger role for renewable energy in the CPP tribes may 

benefit from the additional wrap up and renewable energy and investor owned utilities 

cooperative utilities, public power agencies and independent power producers would now look at 

native lands serious for additional opportunities to meet these updated targets. Commenters 

stated that since the federal government is a part owner of Navajo Generating Station, it would 

be a good place to start and the federal government can send a message that is serious about 

emissions by transitioning their ownership share of NGS before 2025 to a mix of either building 

block 2 and 3. 

Commenters stated that the Navajo Reservation will look deeper into renewable energy and start 

investing in it, as now the Navajo Nation is investing more into fossil fuel energy while everyone 

else is looking to solar and wind and other avenues. 

Comment 22: Commenters suggested the EPA could achieve more reductions from renewable 

energy. 

Response 22: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's proposed targets can and should be strengthened. Commenters 

suggested the goal of the plan should be to reduce emissions 35 to 40 percent below 2005 

emissions by 2020. Commenters stated the formula used by EPA to establish the emissions target 

in each state needs to be adjusted to reflect that additional available clean, renewable generation 

and energy-efficiency resources would replace generation from the dirtiest fossil fuel sources and 

at a faster pace, yielding greater emissions reductions than EPA assumed. Commenters stated the 

EPA has rightly recognized that energy efficiency is the most cost-effective resource to reduce 

emissions and that many successful state programs demonstrate potential for efficiency across 

the country. Commenters stated that more cost-effective efficiency is available more quickly and 
28 

at lower cost than was assumed in the proposal as state programs have demonstrated the ability 

to ramp up more quickly than the proposal would require and to use a wider variety of efficiency 

tools than was considered. Commenters stated that, by setting assumptions about the availability 

and quantity of renewable energy opportunities far too low, they left substantial, achievable 

reductions off the table. Commenters stated the EPA should analyze resource availability and 

costs on the state and regional basis rather than limiting the assessment of potential development 

to mandated renewables and state renewable portfolio standard. 

Commenters suggested using renewable wind and solar energy to cut GHG emissions by 70%, 

not 30% since renewable energy is now very cost effective and reliable. 

Commenters stated the rule should be strengthened to require the percentage of renewable 

energy to be increased to 20 percent by 2020 and 30 percent by 2030. 

Commenters stated that, with improvements Sierra Club recommends, the Clean Power Plan 

could reduce power plant emissions by 35 to 40 percent from 2005 levels by 2020. Commenters 

stated this is necessary to meet the President's goal of a 17 percent reduction in U.S. carbon 

emissions from 2005 levels by 2020 and promote energy efficiency and renewable energy 

without incentivizing natural gas, nuclear energy, and other climate disrupting energy sources. 

Commenters stated the EPA rightly includes these resources in setting the state targets, but the 

availability and quantity of renewable energy opportunities assumed in the plan is too low. 

Commenters stated that, with a current account of retirements of dirty power plants and a more 

accurate estimate of growth in the renewable energy and energy efficiency sectors the Clean 

Power Plan could produce deeper reductions in carbon pollution. 

Commenters referred to a report from the Union of Concerned Scientists and stated the EPA 

could nearly double the amount of cost-effective renewable energy from 12 percent of total 2030 

U.S. electric sales to 23 percent. Commenters stated that most significant is the fact that shifting 

the emphasis to existing renewable technologies would result in greenhouse reductions from the 

current proposed rule benchmark of 30 percent below the 2005 levels by 2030 to a 40 percent 

below the 2005 level. 

Commenters stated renewable energy generation can play a much more significant role in the 

U.S. electrical system than previous projections would indicate. Commenters stated the U.S. 

Department of Energy's Office of Energy Efficiency and Renewable Energy has formed a 

collaborative with more than 110 researchers from 35 organizations including national 

laboratories such as NREL, industry, universities and non-governmental organizations under the 

umbrella called, RE Futures. Commenters stated this group issues a study, titled RE Futures, 

which analyzed the possibility and feasibility of using several variable energy technologies at 

various degrees of market penetration (30%, 50%, and 80%) finding that renewable electricity 

generation from technologies that are commercially available today are more than adequate to 

supply 80% of total U.S. electricity generation in 2050 in every region of the country. 

Commenters stated that evidence is mounting that a much stronger focus on renewable energy 

generation is needed to make the EPA's Clean Power Plan effective. Commenters stated that a 

report from the Union of Concerned Scientists says the EPA could nearly double the amount of 

cost-effective renewable energy from 12 percent of total 2030 U.S. electric sales to 23 percent. 
29 

Commenters stated that shifting the emphasis to existing renewable technologies would result in 

greenhouse reductions from the current proposed rule benchmark of 30 percent below the 2005 

levels by 2030 to a 40 percent below the 2005 level. Commenters stated the costs of renewable 

energy generation continues to go down and this increase state emphasis under the rule should 

not in any way dramatically increase costs to energy ratepayers, under the models used for the 

study the maximum increase is 18 cents on the monthly electrical bill and lower in some states. 

Commenters stated the report supports research by others that increasing the renewable energy 

mix reduces the economic risk from volatile natural gas prices and overreliance on deploying 

large-scale natural gas plants under the existing rule language. Commenters stated the paper 

suggested (1) setting a national renewable energy growth rate benchmark based on demonstrated 

growth in the states from 2009 to 2013; assuming full compliance with current state RES policies 

that require certain percentages of electricity to come from renewable sources and (2) accounting 

for actual and expected renewable energy growth between 2013 and 2017. Commenters stated 

the study looked at existing Energy Information Agency (EIA) data on state's deployment of 

renewable energy and found that on average states increased their renewable share of electricity 

sales by 1 percent annually during the period of 2009 to 2013. Commenters stated that, using this 

growth rate as a national benchmark provides a helpful measure for public policy to help states 

comply with the EPA Clean Power Plan. Commenters stated the suggestion for increased 

renewable energy is part of several building block measures to comply with the Clean Air Act 

and states could, as recommended in this paper, use a policy such as performance-based rates to 

comply with the achievable increases of 1% annually in renewable energy generation. 

Commenters stated that, by choosing the regional average renewable energy standard approach, 

the EPA severely underestimates the potential deployment of clean energy into the 

grid. Commenters stated the "best practices" approach simply averages the political environment 

for renewable energy several years ago. Commenters stated high achieving states like Maine, 

Minnesota, South Dakota and Iowa were already exceeding what EPA expects the state to 

achieve by 2030. Commenters stated clean energy is competing economically with fossil 

generation, and it is holding down overall electricity prices. Commenters stated other states will 

likely increase their renewable energy standards in the next several years. Commenters stated 

that, if EPA wants to use renewable energy standards as a proxy for renewable energy potential, 

it would be better to use the highest renewable energy standard for the region. Commenters 

stated that method would give a closer approximation of the medium term potential carbon 

pollution reductions through renewable energy for that region. Commenters stated this is not a 

perfect method of estimating the potential, but is closer to what actually would be best practices 

for that region. 

Commenters stated renewable energy is a well-established carbon pollution reduction strategy 

with 29 states having renewable energy standards. Commenters stated that both the low cost and 

the widespread adoption of renewable energy mean the EPA was right to include renewable 

energy as part of the Best System of Emissions Reductions (BSER). Commenters stated that, 

even with an unstable policy environment, installed wind energy capacity has grown by 140% in 

the last 5 years, and wind energy production is even higher. Commenters stated that, while 

installations stalled in 2013, the wind industry is on a path that could lead to 20% of United 

States electricity coming from wind by 2030, and that figure includes the uncertainty around the 

future of the PTC. Commenters stated that installed solar capacity grew 473 percent from 2009 

to 2013, and the first half of 2014 saw the installation of 2463 MW of new solar generating 
30 

capacity. Commenters stated that, during roughly the same time period, the price of solar 

dropped 65%, the expansion of solar is expected to continue as the price continues to drop, and 

the final rule should recognize the dramatic expansion of solar. 

Commenters stated the growth of wind and solar should be enough for the EPA to reevaluate 

how it measures clean energy potential. Commenters stated that expanding renewable energy 

past the minimal amount suggested in Building Block 3 would enhance reliability. Commenters 

stated that, on several occasions in recent years, wind energy has kept the lights on and 

electricity prices in check. Commenters stated that, in January 2014, during a cold snap, natural 

gas prices skyrocketed, but wind production was high, which saved PJM upwards of $2 

million/hour. Commenters stated that, as the Department of Energy pointed out, grid operators 

are finding ways to economically and reliably integrate wind power. Commenters stated grid 

operators are able to ramp up and ramp downwind generation quickly because of improved wind 

forecasting and creating a 5-minute dispatch interval allows wind plants to stay within tolerances 

that all power plants are subject. Commenters stated the forecasting of wind continues to 

improve, and this should increase the amount of wind power that grid operators are able to 

integrate. Commenters stated smart deployment of solar and combined heat and power (CHP), 

hopefully biogas powered, can even be targeted down to the block to allow utilities to address 

congestion issues. 

Commenters stated that, based on their experience, states could get far more carbon pollution 

reductions through renewable energy than the EPA suggests in Building Block 3. Commenters 

stated the EPA should increase the carbon pollution reduction goal of the Clean Power Plan, 

which can be achieved by finalizing a rule that 1) recognizes the growth of wind and solar 

energy, 2) takes full advantage of the energy efficiency resource, and 3) a planned review and 

update in 2025 to take advantage of advances in technology and clean energy finance to 

maximize cost effective carbon pollution reductions. Commenters stated the EPA should also 

encourage strong state implementation plans that include significant renewable energy and 

efficiency measures and include the interests of workers and under-represented communities in 

the planning process. 

Commenters asserted the RPS- based approach to calculating BSER (RPS Approach) to be an 

underestimation of the full potential that RE can contribute toward reducing carbon emissions for 

the following reasons: 

• The RPS Approach estimates the contribution of renewables in a given state 

toward that state's BSER based on the existence of and historical performance 

toward compliance with a state RPS, which are by their nature political market 

drivers and therefore may not accurately reflect the potential renewable energy 

resource that is technically and commercially viable in a state or region, 

commenters asserted. 

• The RPS Approach estimates the contribution of renewables in a given state based 

on a regional average of state RPS policies, which in some cases results in 

renewables targets that are below a state's current RPS requirements commenters 

said. At the very least, a state's RPS target for any given year should serve as a 
31 

floor for the estimated contribution of renewables toward that state's BSER, in the 

commenters' opinion. 

• The RPS Approach makes assumptions about renewable energy growth that are 

overly conservative, in commenters view. For example, it assumes that there will 

be no growth in renewable energy deployment between 2012 and 2017, which the 

commenters indicated is contrary to actual circumstances and current market 

projections from a multitude of credible sources. 

• Additionally, the commenters noted that in some cases the RPS Approach 

incorrectly extrapolates pre-2030 state RPS requirements to calculate 2030 CPP 

targets. In other words, if a state's RPS requirements do not continue through 

2030, the RPS Approach should determine a reasonable growth rate beyond the 

last year of the state's RPS requirement, based on historical and projected market 

trends, to calculate renewables' contribution toward the state's 2030 CPP target, 

rather than assuming no further deployment of renewable energy between the last 

year of the RPS requirement and 2030, the commenters concluded. 

Commenters asserted the rule does not do enough to encourage renewables. Commenters said 

that the EPA's plan includes only a 2 percent growth in renewable energy over the scope of the 

plan. Shifting more coal fired power plants to renewable energy sources, not natural gas or 

nuclear, is the only way to effectively curtail climate change, in the commenters' opinion. 

Commenters pointed out that the proposed rule still has coal and natural gas as the leading 

sources of electricity production in the US by 2030. In the commenters' opinion, the CPP does 

not adequately capture current and potential renewable energy generation levels; and its 

expectations for results from 2030 are only slightly higher than the Energy Information 

Administration's. In seven states, actual renewable energy generation levels already exceed the 

EPA's targets for 2030, according to the commenters. Commenters urged the CPP to set a 

national renewable energy growth rate benchmark based on demonstrated growth in the states 

from 2009-2013. 

Commenters asserted that more aggressive reductions are necessary to protect the climate and 

that more significant reductions are economically viable and advantageous. Commenters said 

that NREL has demonstrated that the United States could utilize 80% renewable energy by 2050 

with off-the-shelf technology. The commenters pointed out this is the level of reduction that has 

been deemed necessary by the Intergovernmental Panel on Climate Change to avoid the most 

serious consequences of rapid climate change. Commenters stated the Proposed Rule will in 

essence raise performance of all utilities to that of the primary utilities in each region that are 

already leading the clean energy effort nationally. The commenters additionally expressed, this 

approach is based on what has been accomplished to date, not on what a sufficient level of 

greenhouse reduction would be and can be nationally. Further, the commenters also said making 

the renewable energy and energy efficiency requirements more demanding can be economically 

advantageous. Commenters indicated that the Denver Metro Area has demonstrated that diversity 

in energy sources and a pursuit of energy efficiency is a positive economic engine, with the fossil 

fuel and clean tech sectors composing their 4th and 6th largest employment concentrations, 

respectively (http://www.metrodenver.org/industries/energy/). 
32 

Commenters stated that the BSER methodology for renewable energy underestimated what is 

feasible, cost-effective, and adequately demonstrated, and as a result, the state goals in the 

proposed rule reflect a feasible system of emission reduction, but not necessarily the "best" 

system of emission reduction. Commenters stated that particular features of the BSER 

methodology have resulted in estimated contributions from various technologies, including 

renewable energy, that underestimate what is feasible, cost-effective, and adequately 

demonstrated, and as a result, the state goals in the proposed rule reflect a feasible system of 

emission reduction, but not necessarily the "best" system of emission reduction. Commenters 

said the proposed RPS approach significantly underestimates the amount of electricity that can 

be cost-effectively generated by renewables over the 2020-2030 compliance period. Commenters 

provided details on two power system modeling studies, by UCS and NRDC, which confirm that 

larger quantities of renewable energy than assumed by EPA are technically feasible, 

demonstrated, and cost-effective. Commenters also provided additional information from DOE, 

regarding the potential for growth of wind energy, referencing DOE's upcoming Wind Vision 

report which confirms that greater amounts of wind energy can be deployed at little to no cost to 

consumers. Commenters said the proposal does not adequately account for recent progress in 

decreasing wind energy costs and improved technology for renewable generation. 

Commenters stated that there is a huge potential for renewables in the country, and the EPA used 

an overly conservative approach in determining renewable energy potential across different 

regions. While expressing appreciation for the EPA's framework of utilizing renewable energy as 

part of a state's compliance strategy, Commenters recommended that the EPA refine its analysis 

to better reflect the vast potential of renewable energy across the country. Commenters noted that 

the calculations assume increasing renewables from 2017, but fail to capture any of the recent or 

projected growth in renewables from 2012 to 2017. Commenters also pointed out that in 17 of 

the 29 states with renewable electricity standards (RES), the targets under the EPA's proposed 

CPP are lower than the level of renewables that they actually would have developed under their 

existing laws.

Commenters indicated that while it supported the rule, as stated below the commenters asserted 

the greenhouse gas reduction targets must be more ambitious - and that the means to achieve 

greater GHG reductions currently exist and can be implemented without economic disruption. To 

do so, the commenters recommended the EPA more realistically examine the true reductions that 

can be achieved through more robust energy efficiency and renewable energy goals (Building 

Blocks 3 and 4) - both of which will help achieve greater reductions as well as reduce the overall 

costs of state compliance with the rule. Commenters said that this is particularly important in 

light of the Natural Resources Defense Council's "Updated Costs and Performance" analysis by 

ICF International to run the Integrated Planning Model (IPM) with updated data that in some 

cases dramatically alters the data inputs and resulting conclusions of EPA - which also uses the 

IPM. That analysis, the commenters added, with updated data not reflected in this draft rule, 

indicates that far greater emissions reductions are possible than envisioned in this draft rule. It 

also indicates a huge difference in the costs and savings resulting from implementation of this 

rule. Commenters stated that for meaningful emission reductions to occur, the EPA's proposed 

"outside the fence line" approach to identifying possible reductions must remain intact. Failure to 

do so would render Building Blocks 3 and 4 meaningless, and in the commenters' view those 

Building Blocks are where true reductions will be achieved. Were the CPP to be restricted to 
33 

activities inside the fence line at the plant level, the GHG reductions would likely be limited to 4 

percent or less - far below the goals identified in the CPP, the commenters asserted. 

Commenters said that the EPA appropriately considered the potential to reduce emissions from 

coal and gas fired power plants by deploying renewable energy. But, the commenters asserted 

that the EPA has significantly underestimated the amount of renewable energy that can be 

deployed at reasonable cost. Commenters stated that the EPA should use current cost and 

technical potential data when evaluating the quantity of renewable energy that can be deployed at 

reasonable cost in each state. Commenters stated the rate of renewable energy deployment 

assumed in the EPA's analysis should be at least as fast as the historical rates of deployment. In 

its proposal, the commenters said that the EPA included two frameworks for analyzing the 

potential for emission reductions via renewable energy deployment - the use of regional averages 

of renewable energy policies and a technical-economic potential analysis. Commenters stated 

that both significantly underestimate the actual potential by failing to reflect the dramatic cost 

reductions that have occurred in recent years. The commenters argued that in order to properly 

assess the potential from renewable energy, the EPA must use up-to-date data. Commenters 

stated these data should include: the renewables deployment rates already underway in many 

states the actual generation data from 2013 recent and planned renewable energy development 

between 2013 and 2017. Commenters said current data show that wind and solar costs are each 

approximately 45 percent less costly than the EPA assumed in its analysis. 

Commenters stated that the EPA draft rule significantly underestimates the potential role of 

renewable energy in setting state targets as part of the BSER. Commenters stated the CPP (1) 

does not adequately capture renewable energy deployment rates that states are already achieving; 

(2) fails to reflect the continued growth and falling costs of renewable energy projected by 

market experts; and (3) falls short of the national renewable energy generation levels that the 

U.S. Energy Information Administration (EIA) projects would occur in 2020 under a businessas-usual approach without the CPP, and is only marginally higher than the EIA's projections by 

2030. Commenters stated the renewable energy targets under the EPA's Proposed and 

Alternative Approaches significantly underestimate the potential of these resources, and result in 

barely any additional renewable energy beyond what would have occurred under business as 

usual (i.e., without the proposed rule). 

Commenters stated the EPA's proposed approach for setting state renewable energy targets based 

on the regional average of state renewable electricity standards in 2020 does not represent the 

CAA-required "best" system of emission reduction, but more of a "average" or even "belowaverage" system for many states. Commenters stated he EPA's proposed approach results in the 

following anomalies: 

• In seven states, actual renewable energy generation levels in 2013 exceed the 

EPA's renewable energy targets in 2030. 

• Seventeen of the 29 states with RES policies have lower targets under the EPA 

approach than what is required under their respective state laws, which is due both 

to the EPA's averaging of state RES targets in given region and not including RES 

targets that continue to ramp-up after 2020 in many states. 
34 

• The national level of renewable energy generation included in the EPA's state 

targets is lower than the EIA's business-as-usual projections in 2020, and only 

marginally greater in 2030 (Figure 6-1). 

• The average annual national renewable energy growth rate under the EPA 

proposal is 0.65 percent of total sales between 2017 and 2030. By contrast, 15 

states have already been achieving average annual growth rates of more than 1 

percent over the last five years. 

• Although the EPA's methodology aims to have states ramp up their renewable 

energy level toward reaching their respective regional targets, as many as 25 

states do not actually reach the EPA's targets by 2030 because of the low annual 

growth rates assumed under the agency's proposed approach. 

• The EPA does not assume any growth in renewable generation between 2012 and 

2017. 

Commenters stated the EPA's alternative approach for the renewable energy building block, 

which is based on technical and economic potential, also underestimates the potential for 

renewable energy to cut carbon emissions. Commenters stated that, nationally, it results in 

virtually the same renewable energy target as the EPA's proposed approach, though the 

distribution of renewable energy differs at the state and regional level. Commenters stated most 

states have the technological and economic potential to raise their renewable energy use to much 

higher levels than what the EPA is proposing in the Clean Power Plan. Commenters stated that, 

by specifying a larger role for renewable energy in setting state targets, the EPA could ensure 

that the Clean Power Plan achieves greater overall carbon emissions reductions. By contrast, 

commenters stated, if the EPA adopted a modified Union of Concerned Scientists proposal for 

setting state targets - the UCS Demonstrated Growth Approach - grounded in states' actual 

experience in deploying renewable energy, the renewable energy targets within the plan would 

nearly double at the national level. Commenters provided Figure 6-1 (titled: "The EPA's 

renewable energy targets under its proposed clean power plan are modest"), which shows 2020 

and 2030 projections of the Percent of Electricity Sales under EIA business as usual, EPA 

proposed approach, EPA alternative approach, and UCS "Demonstrated Growth Approach." 

Commenters stated, a third component of the BSER includes a determination by the EPA that a 

certain amount of generation at the affected EGUs can be replaced by using an expanded amount 

of lower-carbon generating capacity. Commenters said, the RGGI states affirm through their 

demonstrated experience that the cultivation of less carbon-intensive, renewable generation can 

be a cost-effective prong of a wide-ranging emission reduction strategy. Commenters said, 

between 2005 and 2012, the RGGI states increased in-region, non-hydroelectric renewable 

generation by 47 percent. Commenters said, solar and wind generation increased by 4043 

percent. Commenters said, this impressive growth in renewable generation promises to continue 

in the RGGI region, due to a combination of aggressive state policies such as renewable energy 

portfolio standards ("RPS"), net metering tariffs, long-term contracting, the establishment of 

"Green Banks," innovative green financing mechanisms, and renewable energy technology grant 

programs. 
35 

Commenters stated, EPA proposes that the best system for reducing carbon emissions from 

existing power plants is a system-wide approach based on the application of four building blocks 

that include on-site measures and measures taken to shift generation away from carbon intensive 

units. Commenters agreed with EPA's approach for determining the BSER. [The EPA proposes 

two alternatives to the four building blocks of the BSER. SEIA does not take a position on those 

two different approaches, but rather supports the use of measures taken at the plant as well as 

measures taken on the system to reduce carbon emissions from existing sources.] Commenters 

specifically agreed with the EPA that renewable energy measures, and solar measures especially, 

are necessarily part of the BSER. Commenters were concerned, however, that building block 3 

(renewable energy measures) as it is currently calculated is incomplete because it does not 

contain current solar market data and it does not include distributed solar. Commenters said, 

therefore, as it is currently written, EPA's proposal does not accurately reflect the emissions 

reductions achievable through application of the BSER. 

Comment 23: Commenters stated that the EPA's CPP also underestimates the emissions 

reductions that can be achieved in Kentucky through distributed renewable energy. 

Response 23: As non-BSER measures, the technologies described in this comment are an 

important flexibility for affected sources to achieve the standards of performance; however, the 

EPA has maintained utility-scale RE as the basis for building block 3. For a full discussion of 

non-BSER RE technologies, refer to section VIII of the preamble supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters pointed to a 2012 study by Downstream Strategies, a West Virginia based research 

organization, which found that Kentucky could generate 34% of their electrical demand from 

distributed renewable energy by 2025. Commenters said that for the purpose of that report, 

distributed energy was defined as "the generation of electricity and heat, or the capture and reuse 

of waste heat, at or near the point of consumption." Commenters stated the EPA should not limit 

its view of what is possible in terms of Kentucky's renewable energy resources to merely what is 

possible in terms of utility-scale developments. 

Comment 24: Commenters generally supported the Proposal, but said more reductions are 

possible in North Carolina. 

Response 24: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters generally supported the Proposal, but stated the EPA's assessment of the potential 

for cost-effective renewable energy opportunities is, if anything, conservative. Commenters 
36 

stated the RPS-based approach assumes that a state with a relatively aggressive existing RPS 

commitment or significant existing renewable generation will only meet the regional average 

commitment, and not its own higher commitment or even 2012 generation levels, in some 

instances. Commenters stated that, for example, Iowa generated 25 percent of its electricity from 

renewable sources in 2012, but under the renewable goal in the proposed rule, would only be 

required to generate 15 percent by 2030. Commenters stated that a 2020 regional average RPS 

benchmark is applied to states in 2030, rather than using a 2030 regional RPS average for that 

purpose. Commenters stated that, for example, North Carolina has committed to procuring 13 

percent of its electricity from renewable sources by 2021, but is only required by the Clean 

Power Plan to procure 10 percent by 2030. Commenters stated that the renewable targets assume 

that no increase in renewable generation will occur between 2012 to 2017; in fact renewable 

generation continues to grow by rule in most states with an RPS. 

Commenters stated North Carolina is already on track to meet and exceed the level of renewable 

energy generation assumed in the Plan. Commenters stated that, in 2007, the North Carolina 

General Assembly enacted the State's Renewable Energy and Efficiency Portfolio Standard 

("REPS") and, by 2021, North Carolina's REPS requires electric utilities to achieve combined 

renewable and energy efficiency levels of 12.5% of 2020 retail sales (municipal utilities and 

electric membership corporations must meet a lower target of 10%). Commenters stated that, for 

the state's largest utilities, Duke Energy Carolinas ("DEC") and Duke Energy Progress ("DEP"), 

this amounts to 21,969,750 MWh, almost double the 11,668,176 MWh targeted under the Clean 

Power Plan. Commenters stated that, to the extent that the utilities elect to meet part of their 

REPS requirement with energy efficiency, these reductions will also count toward compliance 

with the Clean Power Plan target. Commenters stated that the utilities would still need to meet at 

least 13,181,850 MWh of the REPS requirements with renewable energy. Commenters stated the 

Clean Power Plan renewable target for North Carolina is not only achievable, it must be achieved 

(and greatly surpassed) under existing North Carolina law. 

Commenters stated the EPA should strengthen North Carolina's renewables building block to 

reflect expected and required increases in renewable energy. Commenters stated the EPA's target 

significantly underestimates the potential for renewable energy in North Carolina in four ways: 

(1) the EPA assumed that states will not even start increasing their use of renewable energy until 

2017, an assumption at odds with the reality of rapid renewable energy ("RE") deployment in 

North Carolina; (2) the EPA's goal of 10% of 2012 generation does not even reflect North 

Carolina's REPS, which require almost twice what EPA assumes; (3) the EPA's target is highly 

conservative because it is based on existing state policy, not on the cost-effective renewable 

potential in the state (or region); and (4) the EPA assumes that new renewable energy will not 

displace any existing generation. 

Commenters stated that, to correct its assumptions, the EPA should (1) account for actual and 

expected renewables growth between 2013 and 2017, rather than assuming that North Carolina 

will not experience any renewable growth until 2017; (2) assume full compliance with current 

REPS requirements that are set by state law; (3) ensure that the growth rate of renewables 

deployment is at least as aggressive as historical rates; (4) update its formula to account correctly 

for emission reductions from renewable energy; and (5) clarify that out of state renewable energy 

certificates ("RECs") can be used towards compliance to ensure the most cost effective use of 

renewable energy. 
37 

Commenters said that the EPA's development of the renewable component of Block 3 

significantly underestimates the potential for renewable energy in North Carolina. 

Comment 25: Commenters supported renewable generation. 

Response 25: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated there are several studies that have shown that states can handle up to 35 

percent of annual power from renewable sources with minimal cost. Commenters stated, for 

example, PJM (a regional transmission organization covering the Mid-Atlantic, Virginia, and 

parts of the Midwest), the National Renewable Energy Laboratory for the Western United States, 

and the state of Michigan have all found that 30-35 percent of electricity could be generated 

using variable renewable resources with minimal integration cost. Commenters stated a recent 

study found that Minnesota's grid could handle up to 40 percent generation from wind and solar 

sources. Commenters stated electricity generation from renewable resources grew by almost 6 

percent per year on average over the past five years (2009-13) and new wind energy is cheaper 

than new coal generation in most markets. 

Commenters provided the following renewable energy cost information: 

• A recent state survey of renewable and fossil contracts submitted to the Michigan 

Public Service Commission found that the most recent new utility-scale wind 

power contracts cost about half the price of new coal generation. The same study 

found that a combination of renewable energy and energy efficiency is cheaper 

than any other new fossil fuel generator, including combined-cycle natural gas 

units. DTE Energy in Michigan recently announced that it is lowering customers' 

electricity rates by 6.5 percent in 2014, citing low-cost wind energy (aided by 

technology improvements and tax credits) as a major factor. 

• Austin Energy in Texas finalized a power purchase agreement that will bring it 

150 megawatts of solar energy at less than 5 cents per kilowatt hour. By 

comparison, the company estimates that new natural-gas-fired generation would 

cost 7 cents per kilowatt hour, coal 10 cents and nuclear 13 cents. After 

subtracting federal tax incentives (according to company officials, the project is 

not receiving any local incentives), the rate for solar energy compares favorably 

to natural gas, at just over 7 cents per kilowatt hour. 

• In early 2014, the Minnesota Public Utility Commission chose a 100-megawatt 

distributed solar project over natural gas projects because the solar project will 

deliver a number of economic and environmental benefits, including the 

elimination of transmission costs and a reduction in transmission line loss. 

Specifically, it was found that, when one accounts for avoided energy costs, 
38 

avoided capacity costs, avoided transmission costs, the impact of emissions, and 

the cost to Xcel Energy [the utility] from transmission line losses, the benefits of 

[the solar] proposal amounts to a savings of $46 million of net present value of 

societal costs. 

• In late 2013, Xcel Energy submitted a proposal to Colorado regulators that 

identifies solar and wind power as the most cost-effective options for new 

generation in the state. This was the first time the utility, which serves customers 

in eight western and Midwestern states, opted to develop new renewable 

resources on a purely economic basis. 

Commenters provided the following renewable electricity cost and jobs information: 

• In Iowa, MidAmerican Energy just announced it will invest $1.9 billion in new 

wind power, bringing wind capacity up to 39 percent of its generation portfolio. 

The company estimates that when all the turbines are completed, rates will go 

down by $10 million annually, while creating 460 construction jobs, 48 

permanent jobs, and generating more than $360 million in new property tax 

revenue. 

• The Illinois Power Agency found that the state's renewable energy standard 

enabled significant job creation and economic development opportunities; 

moreover, in 2011, the growth of wind energy reduced electricity rates by about 4 

percent per megawatt hour of electricity generation, for total statewide savings of 

over $175 million. 

• Oregon's second largest utility, PacifiCorp, reported that the required investments 

in renewable energy actually helped lower their total costs by $6.6 million in 

2011. 

• Studies by the New York Independent System Operator (NY ISO), Synapse 

Energy Economics, and the National Renewable Energy Laboratory (NREL) 

suggest that increased renewable energy generation has the potential to save 

American ratepayers tens of billions of dollars a year over the current mix of 

electric power options. 

Commenters provided the following information regarding wind energy in Texas: 

Texas just completed a $6.8 billion transmission project that is expected to lead to 7.5 gigawatts 

of new wind generation over the next three years, and eventually up to 16 gigawatts of new wind 

generation (in addition to the 12 gigawatts of wind capacity installed by the end of 2012). In 

total, the state's grid balancing authority (ERCOT) is studying 25 gigawatts of new wind 

projects. While many of these projects are in the planning process and may ultimately not be 

built, these figures are significant when one considers that Texas' record peak summer generating 

capacity was about 68 gigawatts in August 2011. Notably, Texas already generates more than 

twice as much electricity from wind as the next largest wind producing state (California), and has 

more installed wind capacity than all but five countries. 
39 

Commenters provided the following information regarding renewable technology developments: 

• Wind development costs have fallen in recent years because of improved turbine 

technology and more favorable terms for turbine technology purchasers. Many 

states are generating more of their electricity using wind resources, and are 

finding numerous economic benefits by doing so. This is partly because of the 64 

percent decline in levelized power purchase agreements for wind generation 

between 2009 and the end of 2013, to about $24 per megawatt hour on average 

across the country (with incentives). New wind energy is now routinely cheaper 

than new coal generation, and is cheaper than new gas in many parts of the 

country. If gas prices continue to rise or wind prices continue to fall, wind will 

become increasingly competitive with natural-gas-fired generation in more 

regions of the country. 

• Location is much less of a barrier for wind due to the continued increase in 

turbine height -- from a hub height of 30 meters in 1990-95 to about 140 meters in 

2011. Turbine technology improvements, including the ability to install larger 

turbines on taller towers (which can have a hub height of 140 meters and a rotor 

diameter of 160 meters), have expanded the areas suitable for onshore wind 

energy development. Nearly 1,000 gigawatts of additional wind capacity could be 

possible throughout the country if these new, taller turbines are installed (which is 

about as much as the total amount of wind capacity current installed). The 

majority of this new potential is in the eastern United States, which was 

previously thought to have lower onshore wind potential than other parts of the 

country. Capitalizing on low-speed wind resources (6 meters per second) these 

state-of-the-art turbines could result in levelized costs of $35-$55 per megawatt 

hour (this includes the federal production tax credit), according to a National 

Renewable Energy Laboratory analysis. Without additional financial support, the 

price range would be $58-$78 per megawatt hour (assuming the full level of the 

production tax credit can be realized by the developer, which is usually not the 

case). This price is well below the levelized cost of electricity from coal 

technologies ($79-$118 per megawatt hour) and is similar to the levelized cost of 

new natural gas generation ($63-$78 per megawatt hour). 

• Prices for solar photovoltaic modules have declined 80 percent since 2008. When 

combined with the federal investment tax credit, this rapid decline has helped 

make power purchase agreements for electricity generated from utility-scale 

projects competitive with conventional sources in some regions. Power purchase 

agreements for utility-scale photovoltaic projects have reported prices below $50 

per megawatt hour. However, prices for residential systems are typically higher 

because of their smaller size and larger non-module (soft) costs, such as mounting 

hardware, labor, permitting and fees. 

• Concentrating solar power (CSP) is also on the rise in the United States. One 

major benefit of CSP is its ability to be deployed with thermal energy storage so it 

can produce electricity on demand. CSP is a relatively new technology, with only 

1.4 gigawatts deployed as of early 2014. While its costs are currently high, the 
40 

DOE SunShot Initiative aims to reduce the cost of generation to $60 per megawatt 

hour by 2020. 

Commenters provided the following information regarding increasing demand for renewable 

energy: 

• Sixty percent of the Fortune 100 companies and 43 percent of the Fortune 500 

companies have public climate and/or renewable energy goals. Fifty three Fortune 

100 companies report total savings of $1.1 billion annually through energy 

efficiency and renewable energy, indicating a long-term commitment to these 

goals, which serve in the business interest. 

• To date, 19 large companies - 3M, Adobe, Bloomberg, Cisco, eBay, EMC, 

Facebook, General Motors, Hewlett-Packard, Intel, Johnson & Johnson, Mars, 

Novelis, Novo Nordisk, Procter and Gamble, Recreational Equipment Inc. (REI), 

Sprint, Walmart, and Volvo - have come together to publicly ask for access to 

more renewable energy through the Corporate Renewable Energy Buyers' 

Principles (http://www.wri.org/publication/corporate-renewable-energy-buyersprinciples). These companies currently have a combined renewable energy 

demand of nearly 10.5 million megawatt-hours (MWh) per year in the U.S. alone 

- a figure that is expected to more than triple beyond 2020 - and the list of 

signatories to the Corporate Renewable Energy Buyers' Principles continues to 

expand. 

• Many companies are shifting from purchasing short-term, temporary Renewable 

Energy Credits (RECs) to longer-term investment strategies, such as Power 

Purchase Agreements (PPAs) and on-site generation. However, companies such 

Walmart, with 100 percent renewable energy goals, need access to more gridconnected, renewable energy options to meet those goals 

(http://www.wri.org/sites/default/files/on_the_grid_infographic.png). 

Comment 26: Commenters expressed general support for renewable energy. 

Response 26: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed support for renewable energy. Commenters stated the District's 

Renewable Portfolio Standard requires electric suppliers to obtain 20% of their power from 

renewable sources by 2020, and the District Government is aggressively pursuing renewable 

energy to power its own operations. Commenters stated they will soon sign power purchase 

agreements for dedicated supplies of more than 40 megawatts (MW) of new wind power 

generation and more than 10 MW of solar on public building rooftops. Commenters stated these 

projects will cut more than 135,000 tons of CO2 each year 2 or more than half of the emissions 
41 

from District Government buildings, while reducing energy costs in the long-run. Commenters 

stated the District Government is not alone in pursuing renewable energy. Commenters stated 

DC Water, the metropolitan region's water and wastewater utility, is seeking to install more than 

10 MW of solar at its wastewater treatment facility. Commenters stated American 

University, George Washington University, and George Washington University Hospital 

recently partnered to sign the nation's largest non-utility solar purchase agreement for 52 MW. 

Commenters stated that wind can grow to provide perhaps 20 percent of electric power before 

issues arising from land use are likely to restrict further wind plants. Commenters stated solar 

may grow greatly from its present 0.2 percent, one-five hundredth of all electric power, to 

perhaps five percent. Commenters stated that, while it is simply not in the cards to generate 

enough power without using America's abundant coal and gas resources, the issue with coal and 

natural gas is this: long before we run out of fossil fuels, we'll run out of atmosphere in which to 

dump their combustion products like carbon dioxide. 

Commenters stated that renewable energy actions in Texas and California provide proof that 

clean energy can make the emission cuts we need. Commenters stated California already gets 20 

percent of their electricity from wind, solar, and geothermal power sources. Commenters 

supported the EPA Clean Power Plan because all 50 states need to take a minimum action to cut 

carbon pollution and to fight climate change. CO2 pollution doesn't stop at the state border, but it 

crosses all borders. 

Commenters stated that northwestern PA has regional assets that could be leveraged as part of 

this effort. Commenters stated there is sufficient hardwood forest acreage within 75 miles of Erie 

to support at least a million tons of pelletized wood annually for biomass energy, sustainably 

managed from waste cuttings and pulpwood. Commenters stated the southern shores of Lake 

Erie have a commercially viable wind resource, estimated offshore at 18 miles per hour at 90 

meters and onshore at 15 miles per hour at 80 meters high, but developers await signals that state 

policy will support wind power demand and a workable regulatory framework. 

Commenters stated the renewable energy labs conducted a technical feasibility study of solar 

potential and found that Pennsylvania has the technical capability to produce more than 600,000 

gigawatt hours of electricity through solar every year, which is almost four-and-a-half times their 

current retail sales of electricity in their state.

Commenters supported expanding cleaner resources by building additional renewable power to 

meet customer demand. 

Commenters supported renewable energy programs and stated that added incentives that can be 

made available for the water and wastewater industries' continued adoption of renewable energy 

will go a long way in meeting the EPA's goals given the size and scale of operations in these 

industries. Commenters stated that, with regard to harnessing renewable energy sources, there 

are many emerging examples of how these efforts might operate in practice. Commenters stated 

they maintain a portfolio of alternative energy supplies that includes solar, wind, and biomass 

facilities and this portfolio saves an estimated 2,500 metric tons of CO2 annually. Commenters 

stated the company has installed over 3.1 MW of solar generating capacity at 11 facilities across 

three states (New Jersey, Illinois, and Missouri), with plans for additional facilities. Commenters 
42 

stated they are particularly interested in alternative, renewable energy generation due to its clean 

energy benefits, as well as its enabling of electric power diversification that affords greater 

resiliency during regional emergencies. Commenters stated that reducing energy usage by 

585,000 kilowatt-hours a year prevents 1,577 pounds of nitrogen oxide, 4,875 pounds of sulfur 

dioxide and 699,856 pounds of carbon dioxide from being emitted into the air. 

Commenters supported the EPA's inclusion of renewable energy, based on an average of 

regional renewable portfolio standards, in its BSER determination. Commenters stated their 

experience as a leader in renewable energy development demonstrates that renewable energy 

may be a cost-effective and meaningful way to help achieve compliance with state 111(d) 

targets. 

Commenters expressed support for renewable energy. Commenters stated the United States has 

some of the richest solar resources in the world; nationally, the U.S. solar industry grew by 76% 

from 2011 to 2012. Commenters stated that, in Colorado, beneficial solar policies have led to 

dramatic growth: in 2008, solar installations in the state jumped from 11.6 MW to 22.3 MW; 

three years later, Coloradoans installed more than four times as much solar, ultimately reaching 

nearly 250 MW of cumulative installed solar photovoltaic (PV) capacity by the first quarter of 

2013; and by late 2014, installed capacity is estimated at 380 MW. 

Commenters stated renewable electricity generating technologies are a well-established part of 

the U.S. power sector. Commenters stated more than half the states have established renewable 

portfolio standards (RPS) that require minimum proportions of electricity sales to be supplied 

with generation from renewable generating resources. Commenters stated production of 

renewable generation replaces predominantly fossil fuel-fired generation and thereby avoids the 

CO2 emissions from that replaced generation. Commenters stated renewable electricity 

generation is a proven way to assure reductions of CO2 emissions from the electric sector with 

the potential to do so at a reasonable cost and/ or electric rate impact. 

Commenters supported the expanded use of renewable electricity (RE) generating capacity as a 

means of reducing the carbon intensity of the nation's electricity system. Commenters stated 

increased reliance on RE generation is a proven way to achieve reductions of CO2 emissions at 

affected EGU at reasonable costs. Commenters stated RE generating technologies are wellestablished elements of the power system. Commenters stated that, according to EIA, 

approximately 75 GW of non-hydropower RE generating capacity were installed in the United 

States as of the end of 2013; according to the US Department of Energy (DOE), wind power 

represents 33% of all new generating capacity installed since 2007; and, according to Solar 

Energy Industry Association (SEIA), solar PV installations were 4.8 GW in 2013 and are 

expected to exceed 6.5 GW in 2014. 

Commenters stated the EPA underestimates the potential deployment of clean energy into the 

grid and the final Clean Power Plan should drive clean energy innovation and adoption of wind 

and solar. Commenters stated wind, solar, and other renewable energy are already helping the 

United States reduce its carbon pollution, and clean energy is helping create American jobs. 

Commenters agreed with the approach of allowing states to meet the proposed required 

reductions through the use of system-wide programs and policies that will allow states to build 
43 

on existing programs, including renewable energy measures, to serve as compliance tools in state 

plans. Commenters stated that adoption of renewable energy is already well advanced in many 

states, which could, if incorporated into state plans, provide an advantage as strategies are 

developed to comply with Section 111(d) targets. Commenters stated that increasing the amount 

of renewable energy resources like wind and solar power is an effective, affordable, scalable, 

reliable, and readily available way to reduce carbon emissions. Commenters stated that, as many 

states try to balance compliance with the Clean Power Plan with other energy objectives, we 

expect renewables to be among the most important tools available. 

Commenters supported the approach put forth by the EPA regarding crediting states under 

building block 3. Commenters stated that in order to aid state compliance with 111(d) 

obligations, it would be most efficient and equitable for the EPA to model its approach after the 

best practices of existing state RPSs. The commenters asserted relying upon existing best 

practices and infrastructure will aid states in efficiently meeting their obligations, while making 

double-counting structurally impossible, thereby maintaining the integrity of the emissions 

reductions which will be achieved. 

Commenters indicated that the National Climatic Data Center reports that in 2013 the United 

States experienced seven climate disasters that each caused more than $1 billion dollars of 

damage, including the devastating Colorado floods that so heavily impacted Boulder County. , 

The commenters said these are precisely the types of impacts projected to affect American 

communities with increasing frequency and severity as climate-destabilizing emissions continue 

to accumulate in the atmosphere. Commenters urged action now to reduce carbon pollution and 

mitigate these impacts. The commenters added fossil fuel-fired power plants are the largest 

source of greenhouse gases in our nation, and the solutions are at hand to reduce carbon pollution 

from the power sector. According to the commenters, states and companies have long been 

relying on the interconnected nature of the electric grid to reduce harmful pollution from power 

plants, and noted that adding renewable energy generation backs down the use of fossil fuel-fired 

plants - and reduces emissions accordingly. 

Commenters indicated that it produces significant quantities of clean, renewable energy, and 

recently completed the process to qualify its company for GHG credits under the Voluntary 

Carbon Standard, similar to other WTE facilities in the U.S. Commenters supported the 

provisions of the proposed regulations that allow states to incorporate into their CAA section 

111(d) compliance plans the GHG reduction benefits of generating renewable energy from 

facilities such as the commenters'. 

Commenters strongly opposed the option of setting the BSER as only the first two building 

blocks (79 FR 34836), because it would exclude the potential for renewables and efficiency to 

deliver significantly greater emissions reductions at reasonable cost. 

Commenters supported the EPA's decision to include renewable energy as an eligible 

compliance option for states to reduce power plant carbon emissions and stated it meets the 

criteria for the BSER. Commenters stated technologies such as wind and solar already deliver 

safe, reliable, and affordable power to millions of U.S. consumers, emit no carbon in their 

operation, and are an economically viable alternative to fossil fuels. Commenters stated all states 

have significant and diverse renewable energy resources that can be developed and, as a result of 
44 

falling costs, advances in technology, and strong state policies, renewable energy technologies 

are in an excellent position to compete with the other emissions-reduction strategies allowed 

under the Clean Power Plan. Commenters stated the U.S. power sector has experienced a 

tremendous growth in renewable energy, driven largely by advances in technology, decreases in 

costs, and state and federal policies and provided the following additional information: 

• Wind capacity increased by 75 percent and solar capacity by 473 percent from 

2009 to 2013. 

• The national average cost of wind power has dropped more than 60 percent since 

2009, making it competitive with new fossil fuel plants in many regions. 

• Solar photovoltaic systems costs fell by about 40 percent from 2008 to 2012, and 

by another 15 percent in 2013. 

• Several studies project these two trends of improved technologies and reduced 

costs to continue.

• Growth in renewable energy has helped most utilities comply with their state RES 

requirements at little or no cost to consumers, and in some cases even providing 

them with net savings. 

• Between 2010 and 2012 the cost of complying with RESs in 25 states ranged 

from a net savings of 0.2 percent of retail rates to a net cost of 3.8 percent, with a 

weighted average cost of 0.9 percent. 

• The EPA also includes several other credible studies in the TSD that demonstrate 

the cost-effectiveness of increasing renewable energy at the state and regional 

level and highlight the recent cost reductions for wind and solar. 

Comment 27: Commenters identified some renewable projects that help make the state target 

achievable. 

Response 27: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP.. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the addition of renewable energy can have a significant impact on Utah's 

emission rate. Commenters stated that Energy Strategies has identified approximately 811 MW 

(21 projects) of renewable energy projects with signed PPAs in Utah. Commenters stated that, 

based on their assessment, for every 100 MW of new renewable energy generating capacity 

Utah's emission rate decreases by approximately 10 lbs/MWH. 
45 

Commenters stated Alabama's target is both modest and achievable. Commenters identified 

some recent and planned renewable projects associated with Alabama Power and with Redstone 

Arsenal in Alabama: “Alabama Power has entered two agreements to import cost-effective wind 

generation, along with associated renewable energy credits (RECs), from Oklahoma and Kansas. 

The projects total 404 MW. The utility received approval for the first project, known as 

Chisholm View, from the Alabama Public Service Commission ("PSC") in September 2011. 

Under terms of the agreement, Alabama Power receives 202 MW of generation from a wind 

farm in north-central Oklahoma, as well as the associated RECs, over a twenty-year term. The 

project came online in December 2012. Alabama Power received approval for the second 

project, known as Buffalo Dunes, from the PSC in September 2012. The project is functionally 

similar to Chisholm View: Alabama Power will receive 202 MW of generation from a wind farm 

in southwestern Kansas, as well as the associated RECs, over a twenty-year term. The project 

came online in December 2013. Although the precise capacity factors associated with these 

projects are not publicly available, reasonable approximations can be inferred from the utility's 

statements. Alabama Power has stated that the projects amount to 3 percent of the electricity 

consumed by its customers. In 2012, Alabama Power had retail sales totaling 53,946,766 MWh. 

Three percent of that figure is 1,618,403 MWh. Dividing that figure by 8,784 hours and by 404 

MW produces a capacity factor of 45.6 percent. Similarly, Alabama Power has stated that the 

two projects are sufficient to power the equivalent of 115,000 homes. The average Alabama 

home consumes 14,241 kWh per year. The amount of electricity consumed by 115,000 such 

homes equates to 1,637,715 MWh. Dividing that figure by 8,874 hours and by 404 MW yields a 

capacity factor of 46.1 percent. Assuming a 46 percent capacity factor, these deals will result in 

1,632,419 MWh of carbon-free generation that goes into the denominator of EPA's emission rate 

equation. This in turn lowers Alabama's 2012 emission rate by 22 lbs/MWh or more than 4 

percent of the target reduction. Another recently announced renewable project is the planned 

Redstone Arsenal solar array. Redstone Arsenal is a U.S. Army post and garrison located near 

Huntsville, Alabama within TVA territory. It will soon be home to the largest solar power array 

in Alabama. As part of its goal to have 25 percent of its energy produced from renewable sources 

by 2025, the Army has solicited proposals for an array that will provide up to 18,000 MWh of 

solar-generated electricity for the arsenal. The project is estimated to be 10 to 14 megawatts in 

size, with as many as 50,000 solar panels. The Army has cited the energy security benefit the 

array will provide and noted that sharp declines in the installed price of solar power have made 

the project financially attractive.”

Commenters stated that, through its Advanced Solar Initiative and related programs, Georgia 

Power is on pace to add more than 900 MW of utility scale and distributed generation solar to its 

supply portfolio by 2016. Commenters stated that, earlier this year, Georgia Power entered its 

first-ever wind deals, under which it will import 250 MW of cost-effective wind generation, 

along with associated renewable energy credits (RECs), from facilities in Oklahoma for a 20-

year term, commencing in 2016. Commenters stated the PSC has or is in the process of 

approving these programs as in the best interests of Georgia Power customers because they will 

provide benefits in the form of cost savings and fuel diversity. Commenters stated that, although 

the precise capacity factors associated with these projects are not publicly available, it is 

reasonable to assume a 20 percent capacity factor for the solar installations and a capacity factor 

of 30 percent for wind. Commenters stated that, if applied to the existing level of renewable 

generation in Georgia's 2012 baseline, the result is a reduction of 68 lbs/MWh, or almost 9 

percent of the target reduction. 
46 

Commenters stated that advanced energy technologies make achieving compliance with EPA's 

guidelines easy, and the EPA is giving Ohio sufficient flexibility to utilize this aspect of the 

BSER to achieve compliance by offsetting the emission reductions in other buckets which may 

be more difficult to achieve. The commenters believed Ohio could actually go beyond the 

renewable generation and energy efficiency gains required to meet its emission reduction targets 

the way they are laid out in the BSER. 

Commenters stated RPS and EERS have been implemented in most U.S. states and have been 

successful in encouraging the deployment of renewable and energy efficiency resources, and 

they offer a framework for enforcing, monitoring and verifying renewable and energy efficiency 

gains. The commenters said they are the most cost-effective ways to achieve and demonstrate 

compliance with this part of the BSER, and other policy tools may be more expensive, less 

effective, and more difficult to verify than an RPS or EERS. 

Commenters listed 17 policies and with descriptions that have been demonstrated to promote 

renewable and energy efficiency resources, most of which are also used in conjunction with an 

RPS and/or an EERS. A few examples from the commenters’ list include but are not limited to: 

IRPs, Net Entergy Metering, Value of Solar Tariff, On-bill Financing, and Decoupling. 

Comment 28: Commenters stated that renewable energy and energy efficiency provide states 

with reasonable options for reaching its target. 

Response 28: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, while West Virginia generated approximately 4% of total electricity 

produced in the state from wind and hydropower in 2012, the state has significant potential for 

new wind, solar, biomass and hydropower development. Commenters stated that developing 

West Virginia's RE resources will contribute to the state's ability to comply with the CPP, 

diversify the state's energy portfolio, grow the state economy, and create new jobs. 

Commenters stated Georgia can achieve the remaining 40 percent of its target mainly, if not 

exclusively, through sensible, cost-effective investments in renewable generation and energy 

efficiency. Commenters stated that, whether Georgia need increase its reliance on natural gas 

generation is purely a function of the levels of renewable generation and energy efficiency it 

elects to pursue. Commenters stated Georgia's potential in both areas is far greater than EPA 

assumes. Commenters stated Georgia's pursuit of renewable and energy efficiency resource 

additions will result in substantial carbon reductions, especially if those measures are allowed to 

displace fossil generation on a pro-rata basis. 

Commenters provided an analysis in the two spreadsheets included as Attachments 1 and 2 to 

their comments. Commenters stated that, in both spreadsheets, they make an assumption that 

EPD did not make--that incremental (i.e., new) renewable and energy efficiency resources have 
47 

the effect of displacing fossil generation. Commenters stated that, as EPA appears to recognize in 

its recent Notice of Data Availability, to assume otherwise is inconsistent with EPA's application 

of BSER for Building Block 2 and nonsensical as a practical matter: utilities will dispatch 

resources having no fuel costs in lieu of those that do. Commenters stated that, for the purposes 

of this analysis, they ignored the potential reductions from the heat rate improvements of 

Building Block 1, which some utilities have cited as unfeasible or impractical. Commenters 

stated that, because of the displacing effects of renewables and energy efficiency on fossil units, 

exact reliance on the four building blocks as used by EPA in the target setting would result in 

over-compliance; i.e., Georgia would achieve a target rate lower than its 2030 goal. Commenters 

stated this is an important reason to view application of the building blocks for target setting as 

distinct from their use for compliance. 

Commenters stated they analyzed two scenarios: the EPA case and what they termed the 

"Enhanced Renewable Generation" case. Commenters stated the EPA's assumptions regarding 

those resources are reasonable; if anything, they are overly conservative. Commenters stated 

that, unlike the EPA, they allow those resource additions to displace fossil generation on a pro 

rata basis. Commenters stated that by allowing for such displacement, Georgia can meet its target 

with natural gas re-dispatch of up to just 57 percent, an increase of just 6 percentage points from 

the current level of 51 percent, rather than all the way to 70 percent. Commenters stated that, in 

their second spreadsheet, included as Attachment 2, is the Enhanced Renewable Generation case, 

which includes a more robust assessment of Georgia's renewables potential, as developed by the 

Union of Concerned Scientists (UCS) in a recent report. Commenters stated this assessment is 

more in line with Georgia's recent experience with renewable generation and better reflects its 

potential going forward. Commenters stated that, as Attachment 2 shows, if Georgia were to 

achieve by 2030 the levels of renewables penetration that UCS shows is achievable 

(approximately 22.7 million MWh), and those incremental resource additions serve to displace 

fossil generation on a pro rata basis, Georgia can meet its target without any natural gas redispatch. 

Comment 29: Commenters expressed support for including Building Block 3, including that 

renewable energy is feasible, cost-effective, and has been demonstrated to achieve significant 

carbon pollution reductions. 

Response 29: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters agreed renewable energy should be considered a part of BSER. Commenters noted 

North Carolina's RPS, which has been in effect since 2007, requires all investor-owned utilities 

in the state to supply 12.5% of 2020 retail electricity sales from eligible energy resources by 

2021. Commenters stated North Carolina's RPS has led to no appreciable rate impact on North 

Carolina ratepayers, rather, the North Carolina RPS contributed $1.4 billion in investment in 

clean energy projects between 2007 and 2012 (a 13-fold increase) while creating or saving more 

than 20,000 jobs and holding electricity rates steady for North Carolina's electric customers. 
48 

Commenters stated that our state programs and experiences support and affirm the 

Administrator's determination that such system and its constituent elements have been 

adequately demonstrated, are technologically feasible, and work in practice to cost-effectively 

reduce carbon pollution from power plants while maintaining the reliability of the electric 

system. Commenters stated that in most of our states, emissions from fossil fuel-fired EGUs have 

decreased while renewable energy generation has increased, in large part due to our states' 

renewable energy policies. Commenters stated the experience of our states, confirmed by 

independent analyses, indicates that sufficiently ambitious renewable energy policies can achieve 

significant carbon pollution reductions or avoid pollution increases by replacing generation from 

fossil fuel-fired sources or avoiding increased generation. In addition, commenters stated, these 

policies can spur renewable energy innovation and deployment and promote long-term change 

toward a cleaner electricity system. Commenters provided detailed information on the California 

RPS, including targets, progress, and economic benefits. Commenters also provided information 

on the success of the New York, Minnesota and California RPS programs. 

Commenters stated zero-emission, renewable energy technologies are currently reducing overall 

emissions from a state's generation fleet, and expanding renewable energy should be included in 

the Best System of Emissions Reduction. Commenters stated electricity generation from 

renewable resources - such as wind, solar, or geothermal - has been demonstrated to be a costeffective means of displacing emissions from fossil fuel generation. Commenters stated, given 

the nature of the electricity grid, the addition of renewable energy will directly result in reduction

in other generation, and there is ample evidence that it is fossil-fuel fired generation that is 

reduced as additional renewables are brought on-line. Commenters stated that for instance, the 

New York State Department of Public Service conducted extensive modeling of the economic 

and environmental effects of that state's renewable portfolio standard and concluded that 

increased renewable energy generation would displace generation from higher-emitting sources, 

primarily natural gas-, coal-, and oil-fired units. Commenters stated, likewise, a recent white 

paper concluded that in the RGGI region the addition of renewable energy sources have almost 

entirely displaced coal-fired generation. 

Commenters stated renewable energy also meets EPA's cost criteria. Commenters referenced a 

recent analysis by Lazard that suggests that the costs of carbon abatement from building a new 

wind or solar project, relative to building a new coal or gas plant, are within EPA's range of $10-

$40/ton and, particularly in areas with strong wind resources, can result in net savings to 

electricity customers. Commenters also stated a recent LBNL survey of state renewable 

generation cost assessments found that most states that assessed benefits of RPS policies 

determined that the policy resulted in net benefits due to, among other things, pollution 

reductions, economic development, and natural gas price suppression 

Commenters stated EPA should include renewable energy (building block three). Commenters 

stated twenty-nine states have renewable portfolio standards (RPS), and nine others have RE 

goals. Commenters stated many states have already made great strides towards their RE 

standards and goals; for example, Texas exceeded its RPS requirements well ahead of schedule. 

Commenters stated that in 2005, the State established a RPS requirement of 10,000 MW of RE 

capacity by 2025. Commenters stated in part due to the increasingly favorable economics of 

renewable energy technologies, Texas reached this requirement 15 years ahead of schedule, 

developing 10,000 MW of renewable generation capacity by 2010. Commenters stated since 
49 

then, Texas has continued deploying renewables, with over 12,750 MW of wind capacity to date, 

and last year, wind power provided nearly 10 percent of generation in ERCOT, the electricity 

system that serves most of Texas. Commenters also stated Massachusetts has used financial 

incentives, such as renewable energy credits, net metering, and long-term contracts, to quickly 

ramp up RE production. Commenters stated Massachusetts solar capacity has grown from 1.64 

MW in 2007 to 687 MW in 2014, and installed wind capacity has grown from 1.64 MW to 107 

MW in these same years. 

Commenters stated that as demonstrated by the many successful RPS and other renewable 

energy programs established by numerous states across the country, increased zero-emission 

energy development is feasible. Commenters stated that more than half of the states have RPSs 

in place and have collectively deployed approximately 46,000 MW of new renewable energy 

capacity through year-end 2012. 

Comment 30: Commenters expressed support for RPS programs. 

Response 30: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology. State RPS requirements are not a factor in quantifying the amount 

of cost-effective RE that is part of the BSER in the final rule. The methodology that produces 

target generation levels under building block 3 is described in detail in section V.E. of the final 

rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters supported the EPA's proposed approach for quantifying renewable energy potential 

and agrees with EPA that existing state RPS requirements may serve as a reasonable foundation 

upon which to develop such a scenario for two principal reasons. Commenters stated that, in 

establishing the requirements, states have already had the opportunity to assess those 

requirements against a range of policy objectives including both feasibility and cost/electric rate 

impacts; these prior state assessments therefore support the feasibility and economic aspects of 

the best practices scenario as well. Commenters stated that renewable resource development 

potential varies by region, and the RPS requirements developed by the states necessarily reflect 

consideration of the states' own respective regional contexts. 

Commenters stated that using these RPS policies as the foundation for EPA's primary approach 

is logical and consistent with the deference given throughout the proposal to state-based policy 

solutions. 

Commenters stated that, to fully recognize the end results of these complicated technical, 

administrative, and political processes, the fully realized RPS policies put in place and 

implemented by the states should be the foundation for this RPS-based approach. By contrast, 

the commenters stated, the "simple target" versions of these policies used by EPA ignore the 

complexity of the policies in terms of the real world targets put in place after the full effect of the 

RPS policies are included. Commenters noted that the "simple target" approach used by EPA 

uses only the starting "base" target as identified in law or regulation and ignores any secondary 
50 

targets or other factors in the law or rule that adjust the target for specific conditions. 

Commenters stated that, in short, for the primary proposed approach, EPA should amplify the 

commitment to the RPS policy approach, rather than diminish it. 

Commenters urged the Agency to encourage the adoption of pro-growth clean energy policies at 

the state level. Commenters suggested that States that have not done so should join the increasing 

number embracing RPS which mandate an amount of electricity that must be generated from 

renewable sources. Furthermore, according to the commenters, commercial and residential 

adoption of distributed solar can be facilitated by implementing and strengthening net metering 

policies, including compensating customers at retail rates and increasing the size of eligible 

systems. 

Commenters stated that for states that do not yet have an RPS program, EPA's proposed 

approach of building on existing RPS targets and looking at the feasibility of a given level of 

renewable energy on a regional basis is well supported. Commenters stated EPA's alternative 

approach to quantifying renewable generation through a state-by-state assessment of technical 

and market potential is also well supported. Commenters also stated that other methodologies for 

determining potential renewable generation on a state-by-state basis, such as that proposed by the 

Union of Concerned Scientists, have confirmed that increased renewable generation is feasible 

and cost effective at even higher rates of adoption than projected by EPA. Commenters stated 

heavily coal-reliant utilities, such as Southern Company and its subsidiaries, have also begun 

incorporating increased renewable energy into their generation mix, further demonstrating the 

feasibility of renewable energy and the role that power plant owners can play in reducing the 

carbon content of their generation. 

Commenters supported the approach put forth by the EPA regarding crediting states under 

building block 3. Commenters stated that, in order to aid state compliance with 111(d) 

obligations, it would be most efficient and equitable for the EPA to model its approach after the 

best practices of existing state RPSs. Commenters stated that relying upon existing best practices 

and infrastructure will aid states in efficiently meeting their obligations, while making doublecounting structurally impossible, thereby maintaining the integrity of the emissions reductions 

which will be achieved. 

Commenters expressed support for RPS programs. Commenters stated that RPS programs in the 

U.S. have contributed to build robust markets for the supply of renewable generation 

technologies. Commenters stated that States with mandatory RPS programs "have collectively 

deployed approximately 46,000 MW of new renewable energy capacity through year-end 2012." 

Commenters stated thirteen states installed a total of 1,087 MW of new wind energy capacity in 

2013, and a total of 61,110 MW was operational at the end of that year in thirty-nine states and 

Puerto Rico. Commenters stated that, in that same year, solar PV reached 4,751 MW, nearly 

fifteen times the capacity installed in 2008. 410 MW of CSP capacity were also installed in 2013. 

According to SEIA, more solar capacity was installed in 2012 and 2013 than in the thirty years 

prior, and these trends are expected to continue. Commenters stated Bloomberg New Energy 

Finance estimates that by 2030, the global power mix will evolve from today's system, in which 

two-thirds of our electricity comes from fossil fuel combustion, to one in which over half of all 

generation is produced by renewable resources. Commenters stated NREL has estimated that 

given today's commercially available technologies, "[r]enewable energy resources . . . could 
51 

adequately supply 80% of total U.S. electricity generation in 2050 while balancing supply and 

demand at the hourly level."

Commenters stated that, of the three methodologies under consideration by EPA, the regional 

RPS approach provides the most realistic basis for advancing further deployment of renewable 

resources. Commenters stated the State RPS' were developed in large part by state legislatures 

and/or regulators in a manner that considered the potential costs to customers based on the state's 

policy objectives. Commenters stated that two of EPA's proposed renewable potential 

alternatives result in circumstances where more than 100% of some states' load is met by 

renewable generation. Commenters stated this suggests that either cost considerations have not 

been adequately weighed or that practical implementation issues including challenges associated 

with development on federal or tribal lands, or areas with habitat conservation corridors and 

threatened or endangered species, as well as the need for additional transmission infrastructure. 

Comment 31: Commenters stated there must be a method in place to re-evaluate the goals when 

a state's RPS policy is reduced or eliminated. 

Response 31: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed concern regarding the EPA's reliance on Ohio's RPS policy as a 

demonstrated technology for determining best practices and stated Ohio's RPS policy was not 

accurately represented in this proposal. Commenters stated the RPS policy used in this analysis 

has been replaced and Ohio's current RPS policy includes reductions in long term targets and 

freezes the annual benchmarks for RE and solar energy resource development for two years. 

Commenters stated the "Renewables Portfolio Standards in the United States: A Status Update, 

November 2013" [GHG Abatement Measures TSD, Page 4-3] document also acknowledges that 

legislation in roughly ten (of 29) states was introduced in 2011-2012 to repeal or roll-back RPS 

policies. Commenters questioned how the EPA can rely on such volatile programs to determine a 

demonstrated technology. 

Commenters stated most existing RPS have been revised several times in order revise expected 

targets, alter the design of the program or extend the compliance schedule based a number of 

factors, including more realistic expectations on the cost-effective development of new 

resources. Commenters stated that, in some instances such as Ohio, the state has reduced the 

stringency of the RPS and increased compliance flexibility. Commenters stated that, in 2014, 

Ohio did both by freezing the ramp-up schedule of its RPS program and by expanding the 

program to allow of out-of-state resources to be used to fully meet the Ohio RPS, if necessary. 

Commenters stated that, if renewable energy programs remain a part of the final guidelines, the 

EPA must recognize the need for flexibility as an approved part of state plans, and allow for midcourse revisions, banking of excess credits, and other mechanisms that already exist as part of 

many of the standards EPA used as the basis for its proposal. Commenters stated that, in the 
52 

absence of such mechanisms, there is no basis for EPA's assertion that these programs represent 

a level of performance that has been "adequately demonstrated" as required by the CAA. 

Commenters stated that 23 of the 27 programs examined by EPA have been revised, 19 of them 

multiple times, over the course of their implementation. 

Comment 32: Commenters did not support an RPS approach. 

Response 32: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's formula for calculating a state's RE percentage of generation: (1) 

relies on the mistaken proposition that states near the same power grid have a similar capacity for 

RE; and (2) incorrectly assumes that state RPS regulations are an accurate representation of any 

given state's ability to expand use of RE. Commenters stated the EPA provides no evidence that 

the regional groupings have anything to do with any given state's RE capacity. Commenters 

suggested the EPA should look into relationships between current RE capacity and other as of 

yet undetermined factors in grouping states. Commenters stated that, while the proposed rule 

uses current state RPS requirements as a proxy for a given state's capacity for RE generation, the 

EPA does not support this proposition with causal evidence. Commenters stated there may be 

other factors such as cultural, cost, and industrial policy reasons for a state not to adapt strong 

RE requirements even if the state theoretically could support such requirements. Commenters 

stated the effect of this measure is to penalize states that have adopted strong RPS goals while 

minimizing obligations for states without such goals. Commenters stated this could have the 

perverse effect of incentivizing states to go further than EPA's requirements in the future for fear 

that the agency will use such goals against them. 

Commenters stated the EPA's key assumption is that State RPS targets are an accurate reflection 

of the renewable energy potential for the State and, by extension, for each State in the region. 

Commenters stated the EPA's assumption that a State's RPS target accurately reflect renewable 

energy potential within that State is misguided. Commenters asserted State RPS targets may be 

aspirational and not necessarily supported by an analysis of renewable energy potential within 

the State. Commenters stated that States sometimes incorporate safeguards that suspend or scale 

back the RPS programs if cost thresholds are exceeded the levels cannot be achieved and, in 

other cases, States create incentives for certain types of renewable energy by offering additional 

credits for preferred energy sources, meaning that the credits produced for compliance with the 

RPS will exceed the actual level of generation. Commenters stated some States also exclude 

certain classes of power generators, such as municipally-owned power plants or cooperatives, 

from the RPS obligations, meaning that the States' actual percentage of renewable energy 

generation on a State-wide level will be less than the amount required by the RPS target. 
53 

Commenters stated the EPA's reliance on State RPS targets fails to address the fact that many 

State RPS programs allow out-of-State renewable energy generation to satisfy the State's RPS 

goal. Commenters stated that, to the extent that a State permits such out-of-State compliance, its 

RPS standard may not be a good indicator of the State's assessment of renewable energy 

potential within the State. Commenters stated that further complicating matters is the fact that 

neighboring States with the potential to export renewable energy under RPS programs may elect 

to enact more modest RPS programs, or forego them entirely, because it is more profitable for its 

utilities to sell renewable energy credits to other States. 

Commenters stated that Louisiana Public Service Commission (LPSC) examined, in significant 

detail, the opportunities for Louisiana RE generation in 2004 and 2009 and concluded both times 

that a mandatory RPS is not warranted. Commenters stated the data provided by the utilities 

indicated that the levelized cost of renewable technologies exceeds the costs of conventional 

resources. Commenters stated, for example, the levelized cost of a combined cycle gas turbine is 

below the cost of any of the major renewable technologies. Commenters stated current prices for 

natural gas have put renewable technologies at a cost disadvantage and interest at the federal 

level for a mandatory renewable energy policy currently appears to be limited (LPSC General 

Order dated September 20, 2013, Docket R-28271 Subdocket B). 

Commenters objected to the EPA's RPS methodology. Commenters stated that, while the EPA 

contends that the RPS in the states that have them are the results of expert assessments by those 

states, the EPA then ignores those expert assessments by simply averaging the RPS requirements 

to set a regional goal. Commenters stated that, for ten states with RPS derived from expert 

assessments, the EPA assumes a renewable energy goal that is greater than the state RPS. 

Commenters stated that, for five other states with RPS, the EPA renewable goal is less than the 

state RPS. Commenters stated that, if a state has done an expert assessment, it should stand as the 

RE goal for the state unless the EPA can challenge it on a sound technical basis. Commenters 

stated the expert assessment done by one state (Delaware in the East Central region, for example) 

cannot be assumed to have any validity for another state (Ohio, also in the East Central Region) 

simply because they were grouped together by the EPA. Commenters stated that, if a state has 

concluded that no RPS is appropriate for the circumstances existing in that state, the EPA should 

respect that finding and not impose RE requirements on that state. 

Commenters stated the EPA has not sufficiently assessed the technical challenges associated 

with increased penetration of renewables. Commenters stated that adequately accounting for the 

spatial and temporal distributions of renewable resources and their associated costs is an 

essential consideration in regulatory design. Commenters stated the primary approach in the 

Proposal for calculating state-specific renewable energy targets assumes state equivalency for 

regional calculations of resource potential. Commenters stated this assumption is problematic 

when regions are large and encompass states with drastically different renewable resources. 

Commenters stated that, given the sizeable areas spanned by the six EPA regions, there is 

evidence of differing levels of renewable energy resource adequacy and availability across these 

proposed regions. Commenters stated the EPA assumption that existing RPS targets are feasible 

across all states within a defined region does not adequately consider the varying definitions of 

'renewable' across the states. 
54 

Commenters stated the renewable resources physically located in one state are often used to 

satisfy RPS requirements in other states. Commenters stated that, since these benefits are not 

allocated to the buyer's state, this raises questions regarding treatment of the environmental 

attributes of the renewable resource. 

Commenters stated the primary approach in the Proposal assumes that RPSs are a reasonable 

proxy for quantifying renewable generation potential because: (i) states with RPSs ' ... have 

already had the opportunity to assess those requirements against a range of policy objectives 

including both feasibility and costs;" and (ii) "RPS requirements developed by the states 

necessarily reflect consideration of the states' own respective regional contexts.' Commenters 

stated that, as shown in recent literature, however, motivations for RPS implementation and 

stringency are multi-faceted and include many state-specific factors that cannot be generalized to 

other contexts or assumed to be indicative of best practices over a multidecadal horizon." 

Commenters stated the use of state renewable portfolio standard (RPS) targets to determine goals 

is inappropriate. Commenters stated RPS are set largely based on policy goals rather than 

technical potential, and most states meet these goals partly through purchase of RE from other 

states, rather than just from in-state generation. Commenters asserted that states with high RPS 

goals are states that have chosen to invest in renewable energy (and reduce CO2 emissions) and 

not necessarily those states that have naturally high capacity for renewables development. 

Commenters stated the EPA should not set higher goals for states that have already made a 

policy decision to invest in RE than for states that have not done so. Commenters stated that 

most states' RPS goals assume the use of considerable existing hydroelectric generation and, 

thus, EPA's exclusion of this generation from compliance is inconsistent with state RPS goals 

and with the way EPA set the renewables part of the goal. 

Commenters stated that, as NERC points out in its initial review of the potential reliability 

impacts of the Proposed Rule, the methods that the EPA uses for quantifying the level of RE 

development that states can achieve is flawed for a number of additional reasons including: many 

RPS programs provide extra credit for certain types of resources (which implies a lower expected 

level of RE deployment than EPA's methods assume); that several RPS programs include small 

hydropower, combined heat and power, clean coal, and municipal solid waste resources as 

eligible resources (in contrast to the EPA's proposal that most of these resources would be 

ineligible for use as compliance options); and that the EPA's method of assigning states to RE 

deployment regions is "questionable."

Commenters stated that, as a result, the proposed RPS-based approach is incurably arbitrary and 

capricious (especially as applied to South Carolina). Commenters stated that, however, if EPA 

persists in using the RPS-based approach in the final rule, it should, at the very least, include in 

its regional average the RPS levels of all states in the Southeast Region, including those that 

have set their state RE goals at 0%. 

Comment 33: Commenters indicated the EPA ignored the variability in states' RPS programs 

and therefore overestimated the national potential for RE growth in Building Block 3. 
55 

Response 33: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines. 

A discussion regarding the use of some biomass feedstocks for compliance purposes, and 

associated biogenic CO2 assessment, can be found in sections VIII.I and VIII.K of the final rule 

preamble of the CPP. 

For more information regarding Building Block 3, refer to section V.E of the final rule preamble 

of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's calculation of regional renewable energy goals is flawed because 

State RPS statutes contain a number of off-ramps related to cost, reliability, and crediting 

provisions that can result in a lower standard. Commenters stated the EPA gives no consideration 

to these off-ramp provisions in estimating the effective 2020 rate. 

Commenters asserted that each state's RPS includes consideration of the individual and 

cumulative impact of unique, state-specific provisions which, in effect, reduces the "effective" 

amount of renewable resources that the EPA can reasonably rely on as equivalent to its 

renewable energy goals. 

Commenters identified issues related to hydro units, biomass emissions, unique resources, credit 

multipliers, out-of-state renewable energy credits, alternative compliance payment programs, 

cost mitigation measures, retail sales vs. capacity based standards, reliability mitigation 

measures, RPS based on state sales, state RPS implementation schedules, and revisions to State 

RPS programs. Commenters stated the EPA ignored these factors in the proposed rule, but must 

fully consider and correct for the impact of these nuances if building block 3 remains a 

component of the final guidelines. Commenters provided a summary of each of these factors as 

described below. 

Commenters asserted that state RPS targets designed to include existing hydro units are unfairly 

used to establish regional renewable energy goals in building block 3 that exclude existing hydro 

generation units. Commenters stated most states' RPS include existing and/or new hydroelectric 

generating units as eligible resources for demonstrating compliance and the contribution of 

existing hydroelectric units is included in the "effective" 2020 RPS rates that EPA used to 

calculate the renewable energy goals for each region. Commenters stated that, in using these 

regional targets to develop regional growth rates and individual state renewable goals in building 

block three, EPA relies on baseline renewable generation from 2012 that excludes hydroelectric 

generation. Commenters stated that, for the purpose of calculating a baseline level of RE 

generation in each state, the EPA adopted a broad interpretation of RE generation to include any 
56 

non-fossil renewable type, with the exception of generation from existing hydroelectric power 

facilities.Commenters stated some RPS apply to renewable resources that are unique in that state, 

and which may have limited or no applicability to other states in the regions defined by EPA in 

building block 3. Commenters stated that including the potential contribution from these 

uniquely defined and limited resources in the calculation of the renewable energy average for the 

regions creates an unrealistic expectation that other states without such resources can achieve a 

comparable level of renewable development. Commenters stated some of these uniquely eligible 

resources contained in existing RPS include: 

• ocean tidal and ocean thermal resources (i.e. Delaware) 

• offshore wind energy (i.e. Maryland) 

• energy efficiency (i.e. North Caronia, where up to 40% of RPS can met with EE) 

• energy recovery from swine and poultry waste (i.e. North Carolina, ~10% of RPS 

must be met from these resources) 

• coal mine methane (i.e. Pennsylvania) "clean coal" (i.e. Ohio) 

• municipal solid waste (i.e. Michigan) " 

• advanced nuclear" (i.e. Ohio) 

• "densified fuel pellets" (i.e. Wisconsin) 

• pyrolysis of municipal solid waste (i.e. Colorado) 

• solar light pipes (i.e. Wisconsin) 

• compressed air, fly wheel, and battery storage (i.e. Montana) 

• solar pool heating (i.e. Nevada) 

Commenters stated credit multipliers are designed to incentivize specific technologies or 

programs to be developed. Commenters stated that, if a specific renewable resource is 

constructed within a state, then each MWh produced by that resource would be counted as 2 

MWh. As a result of the multiplier, the actual state RPS targets are less stringent that the 

absolute percentage target would indicate. A variety of such provisions were identified in the 

review of existing RPS programs, including renewable resources that are: 

• located within state boundaries; 

• using equipment manufactured within the state; 

• constructed by state residents or by an "approved apprenticeship program;" 

• constructed by a specific date; 
57 

• using specific technologies; 

• operated during peak demand periods; or 

• qualified as "community-based" projects. 

Commenters stated most state RPS programs accept out-of-state renewable energy credits 

(RECs) as part of the compliance demonstration program. Commenters stated, for instance, the 

state of North Carolina allows for up to 25% of its RPS requirements to be met by out-of-state 

resources, while Ohio now allows up to 100% of the renewable energy used to satisfy its 

requirements to come from outside the state. Commenters stated the EPA acknowledges the 

dependence state RPS compliance on out-of-state resources by noting that: [EPA's] approach 

applies the...growth factors and regional RE targets to state-level generation, whereas the statelevel RPS requirement upon which they are based are not necessarily applied in practice to 

generation that is produced within the relevant state (GHG Abatement Measures TSD at 4-19). 

Commenters stated many existing state RPS contain provisions that establish alternative 

compliance payment (ACP) programs if the regulated entity is unable to secure or develop the 

renewable resources required by the program. Commenters stated these programs were created 

largely to protect consumers if renewable energy supplies become uneconomic or unavailable. 

Commenters stated such ACP programs are designed so that entities pay a $/MWh amount for 

any shortfall of renewable energy obligations. Commenters stated the use of ACP programs to 

demonstrate compliance is indicative of the difficulty that some states envisioned for meeting 

RPS even with the subsidies provided in the form of federal production tax credits (PTC) and 

investment tax credits (ITC). Commenters stated the EPA should adjust state targets where ACP 

has historically or can reasonably be predicted to reduce the amount of renewable energy that is 

actually deployed under the RPS in the future. 

Commenters noted several state RPS programs contain cost mitigation measures whereby the 

state has established caps on the impact to retail rates associated with the cost of renewable 

resources. Commenters stated that, if retail rates increase by a certain amount (i.e. 1 or 2%), then 

the RPS is effectively lowered for that compliance year to avoid excessive consumer cost 

impacts. Commenters stated that, absent additional governmental subsidies which expired at the 

end of 2013 (PTC) and will expire at the end of 2016 (ITC), it is more likely that these existing 

RPS caps will be triggered as additional resources are added to achieve future RPS requirements. 

Commenters stated the EPA should not include renewable goals for any state that can reasonably 

be predicted to exceed the retain rate caps already in effect in those states. 

Commenters stated some states have included exit ramps from RPS to address potential 

reliability concerns regarding the impacts of increased capacity from intermittent resources. 

Commenters stated the EPA should consider including such a provision to allow state to issue 

variances if reliability impacts would otherwise occur. 

Commenters stated the targets for most state RPS are based on the percentage of retail sales in 

the state; however, some RPS programs, such as in Kansas, are designed as a generating 

capacity-based standard. Commenters stated the EPA failed to account for these differences in 

the design of state standards in terms of the percentage reduction targets for individual states. 
58 

Commenters stated that, although EPA recognized these differences, it incorrectly noted that it 

"did not include targets that were capacity-based" in the building block 3 calculation of regional 

goals. Commenters stated the Kansas RPS was the sole basis for developing the goal for the 

South Central region. 

Commenters stated that nearly all the state RPS programs are designed around targets related to a 

percentage of state retail sales. Commenters stated the EPA calculated regional renewable energy 

goals based on these retail sales-based RPS, but then applied that calculated rate to 2012 total 

generation, not retail sales, for that state. Commenters stated this creates an "apples and oranges" 

comparison that may translate into unrealistic expectations for what a specific region or state 

may or may not be able to achieve. Commenters stated that, in particular for energy-exporting 

states, retail sales may be a better estimation of in-state usage, while wholesale sales often 

represent energy exports. Commenters asserted the state is unable to influence customer 

behavior, or require addition of renewable resources to meet customer demand for the portion of 

generation that is exported to other states. Commenters stated the EPA should examine this 

"disconnect" between the state-established RPS standards and its proposed imposition of a goal 

based on a wholly different base. Commenters stated this kind of adjustment would also allow 

EPA to take into account in setting goals the ownership of generating facilities by multi-state 

utilities, or by multiple partners, some of whom may be located in adjacent states. 

Commenters stated the implementation schedule for state RPS programs is generally less 

aggressive than the proposed schedule for implementing the Clean Power Plan. Commenters 

asserted States structured their programs in this fashion in part to allow for a more gradual, costeffective, and practically achievable ramp rate for increasing renewable resources. Commenters 

stated that, based on the review of the RPS considered by EPA, the implementation period was 

commonly 15 to 18 years for most states, but up to 20 years in Montana, versus the 10-12 year 

period envisioned by EPA, depending on the approval date for state plans. Commenters stated 

the EPA has assumed that states would ramp up renewable generation in advance of final state 

plans being approved, but has not clarified if and how such activities would receive credit under 

the final guidelines. Commenters stated that, while the EPA has requested comment on how 

early actions could be taken into account in determining compliance, its proposal appears to give 

credit only for renewable generation that is provided to the grid in a specific year, and does not 

allow for flexible systems like banking renewable credits for use in future years. 

Commenters stated most existing RPS have been revised several times in order revise expected 

targets, alter the design of the program or extend the compliance schedule based a number of 

factors, including more realistic expectations on the cost-effective development of new 

resources. Commenters stated that, in some instances such as Ohio, the state has reduced the 

stringency of the RPS and increased compliance flexibility. Commenters stated that, in 2014, 

Ohio did both by freezing the ramp-up schedule of its RPS program and by expanding the 

program to allow of out-of-state resources to be used to fully meet the Ohio RPS, if necessary. 

Commenters stated that, if renewable energy programs remain a part of the final guidelines, the 

EPA must recognize the need for flexibility as an approved part of state plans, and allow for midcourse revisions, banking of excess credits, and other mechanisms that already exist as part of 

many of the standards EPA used as the basis for its proposal. Commenters stated that, in the 

absence of such mechanisms, there is no basis for EPA's assertion that these programs represent 

a level of performance that has been "adequately demonstrated" as required by the CAA. 
59 

Commenters stated that 23 of the 27 programs examined by EPA have been revised, 19 of them 

multiple times, over the course of their implementation. 

Commenters stated the EPA ignored the variability in state RPS and therefore overestimated the 

national potential for RE growth in Building Block 3. Commenters asserted State legislatures 

have allowed different types of generation to contribute to meeting state RPS. Commenters 

stated, for example, hydroelectricity contributes more than 18 percent of New York's 29 percent 

RPS. Commenters stated that many states preferentially allow for certain types of in-state RE to 

receive credit for more than the amount of electricity actually generated, up to 3.5 times.175

Commenters stated that, in some states, like North Carolina, EE programs are allowed to count 

toward the state RPS. Commenters stated many states also allow out-of-state RE to be counted 

toward RPS compliance. Commenters stated that all of these factors would limit the actual 

amount of RE in an individual state, which is what EPA attempts to measure in Building Block 

3. Commenters stated that by failing to appropriately adjust its regional targets downward for 

these different elements of state RPS, the EPA overestimates the potential for increases in RE to 

contribute to CO2 emissions rate targets. 

 

Comment 34: Commenters addressed concerns regarding the process to estimate renewable 

energy baseline and goals and if and how renewable energy sources not recognized by the 

proposed rule are accounted for. 

Response 34: The final methodology for quantifying target generation levels under building 

block 3 does not rely on the establishment of baseline generation. Instead, the final methodology 

establishes a level of RE incremental from 2012 that is both feasible and cost-effective. There are 

no RE resources used in setting the target generation that are not fully creditable under 

compliance. 

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines. 

For more information regarding Building Block 3, refer to section V.E of the of the final rule 

preamble of the CPP. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in sections VIII.I and VIII.K.1 of the final rule preamble of the CPP. 

State RPS requirements are not a factor in quantifying the amount of cost-effective RE that is 

part of the BSER in the final rule. The methodology that produces target generation levels under 

building block 3 is described in detail in section V.E. of the final rule preamble of the CPP and in 

chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 
60 

Commenters said that the EPA misinterprets 2012 RE data for Mississippi as well as for the 

entire Southeast region. Commenters said that all of Mississippi's RE came from biomass in 

2012, but the EPA does not presently allow biomass to be a part of the state compliance plan for 

RE. Commenters said that the majority of the RE for the southeastern states came from hydro 

and biomass; yet the EPA does not factor existing hydro power when calculating state CO2 goals 

and has still yet to render a decision on biomass. According to commenters, both factors have 

resulted in the EPA using inflated RE percentages for 2012 which in turn serve as the basis of 

setting the EPA's future target for Mississippi. 

Commenters said that the EPA's process for setting the future RE target for Mississippi is flawed 

because it does not reflect the realities of state meteorology. Commenters stated that solar and 

wind have not been proven as viable options in the southeast for significant RE sources because 

of weather patterns for the southeast. Commenters pointed to two maps from the National 

Renewable Energy Laboratory that provide information on solar and wind speeds for the United 

States. Commenters said that the Concentrating Solar Resource map shows that almost all of 

Mississippi has insolation values less than 4 kWh/m2/day, but Concentrating Solar Power 

technologies require a minimum insolation value of 7 kWh/m2/day. Commenters said 

photovoltaic technologies continue to advance and the associated capital cost continue to 

improve and small scale solar projects may have a place in the state's future generation resource 

mix, but certainly not to the scale contemplated by the EPA's RE target. Finally, commenters 

said, the United States Average Wind Speed Map demonstrates that all of Mississippi is located 

in a Class 1 wind region, which is not currently viewed as a feasible area to develop wind farms 

as an RE generation resource. Commenters concluded that wind is not option in Mississippi for 

meeting the EPA RE target. 

Because Mississippi is nearly solely dependent on biomass or obtaining RE from across 

numerous state lines, commenters asked the EPA to identify whether biomass will be allowed to 

be a part of state compliance plans for RE and evaluate whether states which are dependent on 

biomass for meeting compliance have the wood/woodwaste resources to support the extremely 

high RE generation targets set by the EPA. Commenters also asked that the EPA evaluate the 

economic impact that competition for wood/woodwaste resources would have on other industries 

in states that are dependent on these wood/woodwaste resources. In summary, commenters said, 

the EPA should consider removing RE from the CO2 goal calculation but allow RE to count 

towards compliance with the overall goal. Commenters noted that in the GHG Abatement 

Measures TSD, the EPA states that Florida's renewable energy generation for 2012 was 

4,523,798 MWh [GHG Abatement Measures TSD, pp. 4-6]. Commenters stated that after 

reviewing the U.S. EIA Detailed 1990-2012 Annual Generation State Historical Tables, which 

are included as appendices to the proposal, it appears that the EPA arrived at Florida's 2012 

renewable energy generation total by adding the megawatt hours produced by "Other Biomass," 

"Solar Thermal and Photovoltaic," and "Wood and Wood Derived Fuels" [U.S. EIA Detailed 

1990-2012 Annual Generation State Historical Tables (specifying that in 2012, Florida generated 

2,272,621 MWh from "Other Biomass," 193,616 MWh from "Solar Thermal and Photovoltaic," 

and 2,057,561 MWh from "Wood and Wood Derived Fuels")]. Commenters noted that the EPA 

has stated that it will formalize the CO2 accounting framework for biogenic CO2 emissions at a 

later date. Commenters asked if the EPA has considered the effects of the accounting framework 

on the calculation of state goals and compliance demonstrations. Commenters asked if the EPA 
61 

will revisit the calculation of state goals if it determines that biomass cannot be treated as a zero 

carbon source. 

Commenters said that the EPA's assumed growth projections under Building Block #3 for the 

increase in renewable energy generation within Florida may not be technically feasible and noted 

that renewable energy accounts for only 2% of the state's total generation mix. While the EPA 

appropriately excluded hydroelectric generation from the BSER, commenters stated that the EPA 

has relied heavily in building block 3 on large expansion of biomass power. Commenters stated 

that in 2012, 96% of Florida's renewable generation was from biomass (the other 4% was from 

solar). Although biomass continues to be an important component of a diversified energy 

portfolio, commenters requested that the EPA remove biomass from the BSER calculation, 

similar to hydroelectric, because biomass has already peaked. Commenters noted that a review of 

the EIA data the EPA relied upon in building block 3 demonstrates that biomass consumption for 

electricity generation has been relatively flat for the last 22 years and that it peaked in the late 

1990's and has since declined. While this leveling off may be due to biomass cost rather than 

feedstock availability, commenters said that this does not support a year-over-year growth of 

13%, as the proposed rule requires. 

Commenters added that biomass is not limited to its usefulness as a fuel and that many of the 

opportunities to use biomass as a fuel depend on the region. For example, commenters stated, in 

North Florida, softwoods and hardwoods are prevalent, as well as other energy crops. In 

assessing the contribution of biomass to the BSER in building block 3, commenters said that the 

EPA should provide a more detailed analysis of the types of sustainable biomass available by 

region and the competition for use of this natural resource by other industries. For example, 

commenters noted, the entire wood products industry relies upon biomass as a raw material. 

Should EPA write a rule that forces electric generation of the limited biomass resources, 

commenters said that power generators will compete for fuel resources from the manufacturing 

industries this country relies upon for a wide variety of products. Commenters said that this 

industry is already highly competitive in securing raw materials in the limited "wood basket" of 

each location. According to commenters, the firm fuel commitments was one large component of 

several previous biomass-to-energy projects never getting off the ground, e.g., in Florida alone, 

approximately a dozen bioenergy permits were sought, with only a couple moving forward with 

construction. Commenters said that the EPA should fully consider the harm to manufacturing by 

issuing a rule that relies on biomass consumption instead by power generation. 

Commenters noted that biomass energy is the only renewable fuel source in Florida that is not 

intermittent and is dispatchable, but a determination on whether biomass can be considered 

carbon-neutral renewable energy remains pending. At this time, commenters stated that 

renewable energy is therefore prohibitively expensive to be deployed in Florida. Commenters 

added that only biomass that is carefully chosen, grown responsibly, and efficiently converted 

into energy can reduce carbon pollution and minimize harmful impacts to our land, water and 

soil. In other words, commenters said, biomass energy should do the job better than the fossil 

fuels it replaces. 

Without clearly defining what types of biomass are/are not considered carbon neutral, 

commenters said that new biomass generation will likely not be built in time for this rule. As 

well, without this clear roadmap, commenters said that it is not possible to fully review and 
62 

comment on an unfinished building block and assessing whether a building block 3 that relies on 

biomass-to-energy is adequately demonstrated and represents an achievable BSER depends on 

the type and criteria of biomass that is included. Commenters also described Florida's proposed 

goals and stated that it is imperative that the final rule incorporate and account for the biogenic 

nature of biomass fuels. If the commenters' cogeneration boilers are brought under the proposed 

emission guidelines, the CO2 emissions from them will be well above the Florida goals. For 

example, commenters explained, in 2012 and 2013, NHPC's total CO2 emissions were 

approximately 2,570 lb/MWh (net), but the non-biogenic CO2 emissions from NHPC's boilers 

were only about 160 lb/MWh (net). 

Commenters said that the EPA's treatment of biogenic CO2 emissions from biomass-firing units 

will have a large impact on states that are trying to achieve the EPA's CO2 reduction goals. 

Commenters encouraged the EPA to promote the use of renewable energy (such as biomass, 

wind and solar) in lieu of any type of fossil fuel. Although natural gas has lower CO2 emissions 

compared to coal or oil, commenters said that the use of natural gas still results in a net increase 

in CO2 emissions and impacts upon the environment. To this end, commenters added, the EPA 

should provide and promote incentives for the use of renewable energy, including but not limited 

to tax credits, subsidies, and higher electric rates. Commenters noted that future RE projections 

for the states where electric generation from biomass is included show that projected RE targets 

will not be attainable within the specified time frames if electric generation from biomass is not 

included as RE. Commenters stated the EPA includes existing or historical biomass electric 

generation to determine state RE targets, and simultaneously questions the continued 

categorization of biomass or certain type of biomass as RE. Commenters urged the EPA to 

provide states with guidance concerning electricity generated from biomass in an expeditious 

manner and adjust state goal calculations as warranted. 

Commenters raised similar concerns for Louisiana's probable need to increase biomass use to 

meet RE targets, but noted that while burning biomass may be technically renewable, it is not 

necessarily clean. Commenters said that the EPA's data shows that solid biomass fuels such as 

wood waste and agricultural byproducts can emit as much, if not more CO2 than coal, and 

significantly higher quantities of NOx. And, commenters added that in July 2013, the U.S. Court 

of Appeals vacated the EPA's "biogenic carbon deferral" in which the EPA had exempted CO2 

emissions from biomass plants for purposes of CAA permitting for a period of 3 years pending 

further study. Commenters concluded that it is unclear how increased biomass generation will be 

subjected to, or impacted by other EPA rules such as the Cross State Air Pollution Rule 

(CSAPR). 

Commenters described Georgia's limited RE capacity (CHP) and stated that for Georgia to 

achieve its state RE target, other RE sources must increase by more than 44% per year, which is 

unreasonable and impossible. Commenters asserted that the EPA's logic for not including 

existing hydro in calculating state goals, but allowing states to include new hydro in their 

compliance calculations also applies to industrial CHP. Commenters stated the EPA does not 

include existing hydro because it believes that would distort the goal calculation due to the low 

expected growth rate for large hydro projects in the future. Commenters stated that the same 

situation exists for industrial CHP sources burning wood or wood derived projects, i.e., very low 

future growth potential, so that these sources should not be included in a state's goal calculation. 
63 

Commenters added that, as is the EPA's approach for new hydro, states should be allowed to 

include new CHP facilities in their compliance calculation. 

Commenters said that the EPA developed regional renewable energy generation targets based on 

state-level RPS and that the EPA's methodology assumes all states in each region can achieve by 

2029 the average of the 2020 requirements of state-level RPS in that region. Commenters said 

that the EPA's methodology is fatally flawed, producing state-level renewable energy generation 

targets that are neither feasible nor adequately demonstrated. Commenters explained that 

historical renewable energy generation in Southern Company's retail footprint, excluding 

existing hydroelectric power, is almost exclusively 95.7%) from biomass (see Table 9 depicting 

historical biomass generation from Alabama, Florida, Georgia, and Mississippi and its share of 

the state's total renewable energy generation.) Commenters added that only a small portion of 

each state's 2012 biomass generation comes from facilities whose primary purpose is electricity 

generation (see Table 10); the majority of biomass generation is produced from wood productrelated facilities (e.g., wood product manufacturing, pulp and paper mills, paper manufacturing, 

and paperboard mills). Commenters stated the generation from these facilities has fluctuated on 

an annual basis likely due to constantly changing demand for wood products (e.g., dimensional 

lumber and paper products). For example, in 2010, commenters said that Alabama's biomass 

generation decreased 22 percent but it experienced a year-to-year increase of 18.5 percent in its 

2011 biomass generation. Commenters concluded that the EPA has thus erred in including this 

highly variable, primarily non-electricity sector generation in a state's baseline and annually 

escalating renewable energy targets from it. 

Commenters noted that the EPA's proposed approaches for determining the appropriate RE goal 

for each state consider biomass-based generation to be carbon neutral, but recent EPA guidance 

indicates that only a limited subset of the biomass currently used to satisfy state RES 

requirements will be considered carbon neutral for purposes of state 111(d) compliance plans 

(citing Biomass Memorandum from Janet G. McCabe, Acting Assistant Administrator, OAR, to 

Air Division Directors, Regions 1-10, Nov. 19, 2014). As with hydropower, commenters said, 

the EPA should treat biomass in a manner consistent with state RES rules and enable all RESeligible generation to count towards a state's compliance determination. Commenters added that 

the EPA should to evaluate the potential for carbon sequestration in forests to play a role in 

meeting state targets and to provide guidance on how this tool could be deployed. Commenters 

added that the EPA averaged state RES requirements to create regional RE goals without regard 

to the proportion of compliance that states expect to come from biomass generation. Commenters 

noted that both the proposed and alternate approaches include biomass when determining the 

stringency of state RE goals and biomass is treated as a zero-carbon emitting resource. 

Commenters said the EPA should modify any final rule to ensure that any biomass included as 

part of Building Block 3 impacts the calculation of state goals in a manner that is consistent with 

how the Agency ultimately requires states to account for that generation as part of compliance. 

Commenters concluded that, to the extent that biomass is treated as zero-emitting generation for 

purposes of calculating state RE goals in the final guidelines, the EPA must provide consistent 

treatment of biomass for compliance purposes. 

Commenters said that requiring Idaho to acquire incremental RE based on other states' RPS rules 

ignores Idaho's existing zero-emission renewable hydroelectric generation. For example, 

commenters stated, during the 2012 baseline year, Idaho had 15,499 GWh of total generation; of 
64 

that, only 2,044 GWh was from carbon emitting sources (1,640 GWh from affected units) while 

Idaho generated 13,454 GWh from non-carbon emitting sources. According to commenters, this 

means that Idaho has already offset more than 6.5 times the amount of its in-state carbonemitting generation with existing non-carbon emitting generation within its borders. On this 

basis, commenters stated that Idaho meets an RPS of 87% zero-carbon emitting energy. 

Commenters said that the EPA appears to recognize that some approaches to biomass-based 

power production can yield minimal reductions in GHG generation due to release of CO2 from 

soils during land clearing associated with the production of biomass. Commenters said that this 

raises two issues: 

• The EPA should limit eligibility of certain types of biomass-based generation, 

based on recognition that life-cycle GHG benefits are minimal or negative. 

• The EPA should evaluate the impact of such biomass-based generation systems 

on the state RPSs used as a basis for building block 3 assessments, and adjust its 

analysis to reflect the reduced GHG benefit of some biomass-based generation 

systems. 

Comment 35: Commenters stated actual RPS in NV does not match the rate the EPA used. 

Response 35: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the actual effective rate of Nevada's RPS is not reflective of the RPS rate the 

EPA used in its regional RE averaging due to differences between the Nevada program and the 

EPA's proposal in the types of allowable renewable energy sources and compliance mechanisms. 

Commenters stated that, if other states with RPS programs are similarly situated, then the 

regional RE averages may be too high in the western and other regions. Commenters stated the 

planned RE generation in states with high RPS percentages may represent not so much a "best 

system of emission reduction," but instead the degree of favorability in that state's political 

environment for adoption of ambitious renewable energy mandates along with adequate 

resources for doing so. 

Commenters referred to comments made by Nevada DEP "Agencies." Commenters stated the 

Agencies pointed out that Nevada's RPS currently does not apply to all utilities, so that 12% of 

the load is not covered at all. Commenters agreed that Nevada's existing RPS does not actually 

deliver renewable energy at the level it would appear because of multipliers and other factors 

that dilute its effectiveness. Commenters stated that Nevada could easily include the other 

utilities in the RPS and close some of the program's loopholes to better comply with the CPP. 

Commenters stated many states have a stronger RPS than Nevada's and neighboring California is 

already on a trajectory to achieve 33% renewables by 2020. Commenters stated Nevada's 
65 

renewable resources are among the best in the country. Commenters stated Nevada is better 

positioned than almost any other state to enjoy high levels of renewable energy penetration; and 

complying with the CPP would not require a huge change. Commenters supported higher targets 

for Nevada and stated a more robust RPS would provide thousands of jobs and a more 

diversified, stronger economy. Commenters stated the calculation of renewable energy potential 

must take into account the rapid changes in the levelized cost of energy for renewable resources. 

Commenters stated we are not only approaching but in many locations have already reached grid 

parity, meaning that renewable resources such as wind and solar are competitive with or beating 

fossil fuels in the marketplace. 

Comment 36: A number of commenters asserted that state-specific analyses are needed. 

Response 36: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. 

The methodology that produces target generation levels under building block 3 is described in 

detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG 

Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that a more systematic analysis, which takes into account each state's unique 

opportunities and challenges in developing renewables, is needed before setting regional goals. 

Commenters stated that, of the six states grouped with Arkansas in the South Central region, 

only Kansas has a state-established renewable portfolio standard (RPS) in place, yet the proposed 

Rule assumes that every state in the South Central Region can meet RE targets based on that 

single state's RPS. Commenters stated the use of a single state's policy to set regional goals is 

legally unsupportable and arbitrary, especially in regions with only one existing RPS policy out 

of six total states. Commenters stated that, while the proposed Rule's stated intent was to create 

regions that group states with similar renewable profiles, in the South Central Region, of which 

Arkansas is a part, four of the other five states have significantly greater renewable energy (RE) 

potential than Arkansas, primarily wind. 

Commenters stated the EPA failed to take into account Indiana's unique potential for renewable 

energy use when they employed a regional average to calculate Indiana's growth rate. 

Commenters stated that, just because Indiana's region might be able to achieve a 6 percent yearover-year growth rate in renewable generation does not mean that is an appropriate figure for 

Indiana. Commenters stated the proposed rule fails to make allowances for the substantial degree 

of political uncertainty that belies present-day growth in renewable energy generation. 

Commenters stated this oversight by EPA is a significant one: Independent experts have argued 

that uncertainty in the future of tax law and subsidies has a substantial impact on investment 

decisions in the solar industry, for instance. Commenters cited a study and stated Indiana has 

limited solar resources because it is in a region of the country that has the lowest annual average 

solar radiation.

 Commenters stated that, while Indiana has added significant wind power assets to 

its generation portfolio since 2008 and EPA assumes new capacity can continue to be added 
66 

without difficulty, there is a risk that the best siting locations are being used up and the price of 

producing an additional megawatt of wind power will ramp upward as more capacity is added. 

Commenters urged the EPA to adhere to a consistent policy of using actual state data and future 

growth for renewable also based on specific state information. Commenters stated the preferred 

approach in this Building Block calculated using renewable potential from political policies in 

neighboring states is not based on any practical information that a renewable policy in one state 

can be repeated in another. Commenters stated the EPA does not provide any reasonable 

justification for the groupings of states in Building Block 3. Commenters requested that the 

renewable provisions in Building Block 3 be revised to devise state-specific renewable potential 

based on the NREL alternative that is further modified to include data from all states instead of 

just 16 states. 

Commenters recommended the EPA reconsider BSER within building block 3 and perform 

further analysis regarding to what extent generation at affected EGUs can be replaced by 

expanded amounts of lower-carbon generating capacity given the realities of these technologies 

and historic and current investment choices. 

Commenters expressed concern that the renewable resource targets proposed by the CPP do not 

align with New Hampshire's existing Renewable Portfolio Standards (RPS). Commenters stated 

the development of new renewable energy sources relies heavily on geographical factors and 

permitting requirements within each state and it is not realistic to require states to achieve 

renewable goals that are impacted by the RPS requirements of neighboring states as proposed in 

the CPP, especially if state RPS requirements are not currently being met, as evidenced by the 

use of alternative compliance payments (ACPs). 

Commenters stated the consideration of both renewable energy and energy waste reduction 

should be considered on a state-specific basis considering technical and economic opportunities 

and limitations. Commenters stated some RPS apply to renewable resources that are unique in 

that state, and which may have limited or no applicability to other states in the regions defined by 

EPA in building block 3. Commenters stated that including the potential contribution from these 

uniquely defined and limited resources in the calculation of the renewable energy average for the 

regions creates an unrealistic expectation that other states without such resources can achieve a 

comparable level of renewable development. Commenters stated some of these uniquely eligible 

resources contained in existing RPS include: ocean tidal and ocean thermal resources (i.e. 

Delaware); offshore wind energy (i.e. Maryland) ; energy efficiency (i.e. North Caronia, where 

up to 40% of RPS can met with EE); energy recovery from swine and poultry waste (i.e. North 

Carolina, ~10% of RPS must be met from these resources); coal mine methane (i.e. 

Pennsylvania); "clean coal" (i.e. Ohio); municipal solid waste (i.e. Michigan); "advanced 

nuclear" (i.e. Ohio) "densified fuel pellets" (i.e. Wisconsin); pyrolysis of municipal solid waste 

(i.e. Colorado); solar light pipes (i.e. Wisconsin); compressed air, fly wheel, and battery storage 

(i.e. Montana); and solar pool heating (i.e. Nevada). 

Commenters stated the EPA must develop a renewable energy goal that is founded on statespecific analysis, availability, costs, and energy use. Commenters started it is unlikely that North 

Carolina is representative of the other seven in terms of renewable energy potential since such 

potential is highly dependent on geographical and climate particulars. Commenters stated Florida 
67 

has much more shoreline than North Carolina, is flatter and contains none of the Appalachian 

Mountains, and is southernmost of all the states in the region. Commenters stated all of these 

features will have a great impact on Florida's renewable energy potential and the rule must 

account for that. Commenters stated the EPA must demonstrate that renewable energy projects 

are both adequately demonstrated and technically feasible in Florida, are of a reasonable cost and 

have the implementation potential upon which the final budgets are based; otherwise, the rule 

does not support that renewable energy projects are BSER and therefore can be relied upon for 

budget goals. 

Commenters said that renewable energy is not evenly disbursed and available within the United 

States as a fuel source. States and utility companies utilize clean energy resources that are 

technically and economically viable in their geographic area in order to cost-effectively provide 

electricity to their customers, the commenters added. Commenters stated regional averaging in 

the proposed rule ignores the fact that renewable energy potential is state-specific and depends 

on the state's natural resources, existing transmission system, and current renewable energy 

development. The southeast United States is particularly short of these resources, the 

commenters said, and added that according to the DOE's NREL, the southeast United States is 

devoid of any wind resources. 

Likewise, commenters said that the NREL's Photovoltaic Solar Resource map, which reflects 

nominal solar resources in Kentucky. Commenters expressed that energy from regions that have 

rich resources of renewables will have to be developed to meet their own region's goals set out in 

the plan, but also for other region's goals as well. Yet, the commenters speculated, renewable 

resource-rich states which plan on developing significant amounts of renewable energy within 

their SIP may be reluctant to share those resources with states that are not rich in those resources. 

In addition, the commenters said, without construction of significant amounts of long-distance 

high-voltage transmission lines, states in the southeast will be unable to meet goals assumed and 

set out in the proposed rule. 

Commenters indicated that the proposed CPP establishes regional groupings to set common RE 

goals for individual states. Commenters added Michigan is included in the North Central region. 

Commenters stated it is inappropriate to base any evaluation of Michigan's renewable potential 

on the successful installation of RE resources, or the RE resource potential, of other states. 

Commenters stated Michigan is uniquely impacted by the presence of the Great Lakes and such 

proof is readily available in the form of the NREL's individual maps on a state's potential for 

renewable energy resources. Commenters attached the NREL wind speed profile for the United 

States to demonstrate this point. Commenters provided Figure 2 (titled: "US Annual Average 

Wind Speed at 80 m"), which shows the U.S.'s wind profile, in meters/sec, at a height of 80 

meters.

As clearly depicted in Figure 2, the commenters said that Michigan lacks the renewable wind 

generation potential as other states in the North Central Region. As further proof of the stark 

differences in the region, the commenters noted that with the October 10th, 2014 announcement 

by MidAmerican Energy, the state of Iowa is on track to provide approximately 50% of their 

residential demand by wind generation resources. Commenters stated that clearly, Iowa, along 

with the other Great Plains states, is a grossly improper comparison to Michigan's renewable 

energy potential. Thus, commenters requested that the individual states be allowed to set their 
68 

own renewable energy goals, as they know their renewable energy resources potential best. 

Commenters argued states should also be allowed to form their own regions as geographically 

appropriate (e.g. a Great Lakes states region). 

Commenters disagreed with EPA's method of basing individual state RE generation levels 

on conditions and standards adopted in other states. As an initial matter, commenters asserted the 

EPA fails to properly account for the differences that exist between states within the same 

region, especially in a region like the Southeast that consists of eight states that span from 

Kentucky to Florida (north-south) and North Carolina to Mississippi (east-west). 

Commenters disagreed with the EPA's plan to base the RE generation levels of Georgia and six 

other states on a single RPS that was deemed financially and environmentally appropriate for one 

state. Commenters expressed that this is especially true where (as here) the EPA simply assumes 

- without attempting to demonstrate as true - that all states within the Southeast region can meet 

the targets in North Carolina's RPS. Commenters stated the EPA's own IPM modeling results 

indicate that for Georgia, RE growth will be virtually nonexistent. As a more appropriate 

alternative measure, the commenters encouraged the EPA to perform a systematic analysis of 

each state within a region and develop a scenario that accounts for the distinct challenges and 

resources of each state. 

Comment 37: Commenters stated the EPA must account for state-specific factors in Georgia. 

Response 37: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. Further, building block 3 is both quantified and 

applied at the level of the interconnection, rather than at the state-level. The methodology that 

produces target generation levels under building block 3 is described in detail in section V.E. of 

the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD 

supporting the final CPP. 

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines. 

For more information regarding Building Block 3, refer to section V.E of the final rule preamble 

of the CPP. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in sections VIII.I and VIII.K of the final rule preamble of the CPP. 

A discussion regarding the current status of the development of the revised Framework and how 

information from the revised Framework and the related peer review processes could be used to 

inform how states and EPA assess biogenic CO2 can be found in sections VIII.I and VIII.K of 

the final rule preamble of the CPP. For more information regarding the Framework, see: 

http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html. 
69 

The following are summaries of the specific public comments under this comment: 

Commenters suggested that, instead of proposing a CO2 emissions compliance rate for Georgia 

that is based, in part, on one state's RPS, the EPA should include that amount of RE that is based 

on the development of reasonably achievable RE generation that balances ratepayer costs and 

reliability with readily available RE technologies. Commenters stated that certain forms of RE 

are appropriate to consider when determining state RE levels for compliance. As a general 

matter, the commenters agreed with the EPA's approach regarding hydroelectric power. 

Specifically, EPA was correct not to include 2012 hydropower generation - including pumped 

storage hydropower generation - in determining a state's RE for goal calculation purposes. 

Commenters stated the large degree of variation that occurs in hydropower generation may cause 

distorted state targets, and thus hydropower generation should only be considered in calculating 

compliance with a state goal and not when deriving the state goal itself. Commenters said that 

given the limited availability of geothermal and wind power in Georgia, remaining possible RE 

sources that may be used to meet the proposed performance standards rate in the Proposal are 

biomass and solar. 

Commenters agreed that biomass co-firing at coal facilities and biomass electric generating 

facilities should be counted as RE, but stated the EPA must determine how biomass will be 

treated in state 111(d) plans now, if states and utility stakeholders are to have that option for 

meeting CO2 goals. Commenters urged the EPA to expeditiously finalize the Biogenic 

Framework, so that states can use those findings in the development and submittal of section 

111(d) plans. Commenters stated that, up to this point, the EPA has provided confusing and 

inconsistent treatment of biomass in the Proposal. Commenters stated biomass is given 

consideration as a source of RE in the preamble (79 FR 34,923/2, 34,924/3 & 34,925/1) and the 

continued hope is that the EPA will provide a clear path forward for the use of biomass as a RE 

fuel in state 111(d) plans. Commenters stated planning for the use of biomass in the future has 

long lead times associated with the planning, design, acquisition, permitting and construction of 

a power plant facility. Additionally, the commenters said that such hurdles are substantially 

raised by the uncertainties regarding the permitting requirements for such facilities and the role 

they might play in complying with state performance goals. Commenters stated that biomass is a 

viable option in Georgia for generating power, both as a sole source and co-firing with other 

fuels, but not if delays in making critical determinations regarding its role in the reduction of 

carbon emissions continue. Commenters strongly encouraged the EPA to diligently move 

forward with finalizing its Biogenic Framework, and to take any other steps needed to fix the 

status and role of biomass combustion for power plants within the context of the emission 

guidelines. 

Commenters stated that unlike in some of the southwestern States, Concentrated Solar is not an 

attractive option in Georgia for the generation of electricity, given the current state of the 

technology. Commenters said solar PV is currently the only technology theoretically useful in 

Georgia to generate electricity from sunlight. Commenters noted about 7,000 MWac solar 

capacity would be required to fulfill the State's RE goals (ignoring 2012 RE levels). Commenters 

stated the availability of the technology; however, must be balanced with considerations of cost 

and reliability. The commenters explained the system was not designed to respond to large 

variations in both load and generation. The commenters added intermittent resources like solar 

PV can change significantly from minute-to-minute. Also, the commenters explained that system 
70 

operators must keep the system in balance with changing customer demand by controlling 

available generation resources. Commenters stated that adding a significant amount of 

intermittent generation resources further complicates the system operator's balancing 

responsibilities. The commenters said system operators utilize conventional, controlled 

generation technology to balance the required load, and to maintain a constant system frequency 

and voltage. Commenters continued stating that adding significant amounts of intermittent 

generation to replace conventional, controllable generation could result in fewer resources for 

use in maintaining system frequency and voltage (and therefore reliability). Commenters said to 

compensate for the added variability caused by intermittent generation resources, utilities will 

need to spend additional capital on equipment and will experience higher operating expenses on 

existing conventional generating facilities. Commenters stated existing conventional generating 

facilities will be required to provide more balancing services, resulting in more frequent cycling 

operations and higher operating and maintenance costs. Commenters stated their summer peak 

period typically runs from 3 to 8 p.m., while solar PV typically peaks from noon to 1 p.m., with 

steep declines in production past that point. Commenters said from 3 to 4 p.m., for example, 

solar PV typically produces 30% (at best) of peak production. Commenters stated that adding 

7000 MWac would require the addition of almost that much other generation to meet peak 

demand and to satisfy spinning reserve requirements, so as to maintain suitable margins for 

frequency and voltage control. Thus, the commenters expected, while costs of solar PV have 

declined considerably in the past few years, applying the technology at the levels proposed will 

cause significant cost increases for end-use customers in Georgia. 

Commenters stated that, as an electric cooperative, they have the responsibility to provide safe, 

reliable and cost effective electric power and, as such, they have a duty to ensure that new 

generation added provides the least-cost solution for meeting energy needs. At this time, the 

commenters asserted that considerations of cost and reliability - if properly accounted for by the 

EPA - would reduce the increase in RE that the Agency concludes can reasonably be achieved 

between now and 2030. In determining state RE goals, the commenters asserted that the EPA 

must account for state-specific factors; had it done so the commenters asserted that the EPA 

would have concluded that solar is not a viable option in Georgia for generating substantial 

amounts of electricity. The commenters asserted failure to consider these costs and impairments 

to system reliability is arbitrary and capricious. 

Comment 38: Commenters stated the EPA's reliance on IPM leads to an overestimate of the 

amount of RE that can be achieved. 

Response 38: The final methodology is based on observed historical patterns of deployment and 

expected levels of future performance. IPM projections are used to validate the technical 

feasibility and cost-effectiveness of the final methodology. The EPA updated IPM from proposal 

to reflect the latest data on the cost and performance of RE technologies, as well as limits to 

reflect the increasing grid integration costs that may accompany high levels of RE penetration. 

The methodology that produces target generation levels under building block 3 is described in 

detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG 

Mitigation Measures TSD supporting the final CPP. 
71 

The following are summaries of the specific public comments under this comment: 

Commenters stated the CPP overestimated the capacity factor of renewable generation in their 

model and in the establishment of state emission rates. 

Commenters stated the EPA's reliance on an inaccurate model leads to a large overestimate of 

the amount of RE that can be achieved in Ohio and only reinforces the level of inaccuracies in 

this proposal. Commenters stated the IPM projects, under the state-only policy case, 3,001 MW 

of new wind capacity in Ohio by 2025 and, under the regional compliance plan, this is increased 

to 4,955 MW of new wind power in 2025. Commenters stated that, while Ohio EPA recognizes 

the potential for wind power in the state given recent rapid growth in the wind sector, wind 

power does not, and cannot, supplement or replace the base-load power supplied by coal and 

natural gas fired power plants. Commenters urged the EPA to consider the highly-localized 

nature of wind-power and its ability to serve a small portion of the overall grid. These results 

clearly indicate that location and base-load reliability concerns were not considered fully in the 

IPM projections. Commenters stated the Ohio EPA examined wind capacity projections from 

EIA's 2014 Annual Energy Outlook and, between years 2012 and 2030, the largest annual 

change in wind capacity for the RFCW region, of which Ohio is a part, was 37 MW. 

Commenters stated the EPA's projection of 3001 MW of new wind capacity in Ohio by 2025 

under the state-only scenario represents the addition of 195 MW each year starting in 2012 and 

concluding in 2025. Commenters stated the EPA is projecting a growth rate in wind capacity 5.3 

times greater than that projected by EIA which the Ohio EPA finds difficult to comprehend. 

Commenters also stated that EPA's proposed renewable energy generation goals are drastically 

higher than the states can achieve within EPA's proposed timeline. Commenters stated that 

comparing present-day estimates of the expected baseline renewable energy growth to the 

renewable energy totals EPA applies in Building Block 3 reveals just how unreasonable, 

arbitrary, and capricious the Agency's estimates of potential renewable energy generation are. 

Commenters referenced and cited The Marchetti Report, which compares estimated renewable 

energy generation under Building Block 3 assumptions in the EIA's Annual Energy Outlook 

(AEO) 2013 baseline analysis, and in EPA's IPM runs projecting the results of state-focused 

implementation of the Proposed Guidelines (State Option 1). Based on additional information 

provided by the commenters, they stated that although states may have some available measures 

at their disposal that could lead to some incremental increase in renewable energy generation 

from the status quo over this timeframe, expecting the nation as a whole to nearly quintuple its 

annual growth rate for renewables and increase its expected renewable energy generation by 

more than one third over projected levels is simply unreasonable. Commenters also provided 

information from the Marchetti Report specific to Georgia and Alabama. 

Commenters indicated that the EPA assumes renewable energy growth of 86 percent from 2020 

to 2030, an assumption that far exceeds the agency's own modeling results. The EPA's modeling 

of the least cost strategy shows 325 TWh of non-hydro renewable generation by 2030, yet EPA's 

set state CO2 rates assume 525 TWh, almost 33 percent more, the commenters said. Under the 

plan, renewable generation would grow at unprecedented rates in many states, with southeastern 

states presumed to increase renewable generation by 13% each year, the commenters added. 

Commenters stated ERCOT and other grid operators have expressed concern that the CPP's 

proposed requirements would require grid operators to significantly modify their grid operations 
72 

to integrate increased proportion of renewable resources. Commenters further believed that the 

EPA has not shown that it has taken into account the intermittent and unreliable nature of these 

sources. Additionally, commenters added, the transmission infrastructure needed to capture 

additional renewable energy sources will take 5 to 15 years to install, and will not be available by 

the 2020 deadline in the CPP. Commenters said that the WPSC points out that "EPA started its 

Wyoming calculation with the wrong number, applied an unrealistic growth factor and reached a 

wrong conclusion". The WPSC goes on to correctly calculate the formula for Wyoming, 

demonstrating that the mistake made by EPA was large enough to frustrate any conceivable state 

effort to comply with the goal for Wyoming, the commenters noted. Commenters indicated that 

the WPSC demonstrates that the EPA could reach the correct Block 3 goal for Wyoming by 

substituting 666,212 MWh for the 4,369,107 MWh in the EPA calculations, and 1% growth 

factor for the 6.095% proposed by EPA. Commenters asserted such example demonstrates EPA's 

unrealistic expectation for this building block. 

Commenters expressed concern that, while the EPA's modeling of the least cost strategy shows 

325 TWh of non-hydro renewable generation by 2030, the EPA set state CO2 rates assuming 525 

TWh--almost 33 percent more. 

Commenters stated the four parsed IPM runs that are available demonstrate that the Agency's 

Building Block 3 targets are far too costly and do not represent realistic estimates of the potential 

Renewable Energy generation available to achieve the Proposed Guidelines. Commenters stated 

the EPA is proposing to find that it is achievable for states to increase their overall Renewable 

Energy generation to 522,723 GWh by 2029, with an annual growth rate from 2020 to 2029 of 

roughly 7.1 percent. Commenters stated that, although the target Renewable Energy generation 

levels that make up this total were used to calculate each state's interim and final CO2 emission 

goals, the EPA's IPM model runs predict that actual Renewable Energy generation growth will 

be only a small fraction of this target under the least-cost approach to compliance with the 

Proposed Guidelines. Commenters stated IPM predicts that under both the state-focused and 

region-focused compliance approaches, Renewable Energy generation will reach only 356,063 

GWh by 2029, and will grow at an annual rate of 1.1 percent from 2020 to 2029. (Marchetti 

Report). Commenters stated this level of generation is only 1.7 percent greater than the 

Renewable Energy generation that EPA predicts in 2029 under its own Base Case analysis, and 

is actually 7.6 percent lower than the EIA predicts will occur in 2029 in the absence of any 

emission guidelines. Commenters stated the EPA's own analysis severely undermines the 

Agency's prediction of the level of increased Renewable Energy generation that is achievable, 

and demonstrates that the Agency has failed to accurately consider factors such as cost and 

feasibility. Commenters stated the IPM results suggest that rapid growth in Renewable Energy 

generation is so costly that states are able to achieve only negligible incremental increases in 

Renewable Energy generation above the status quo (at best), and they must instead rely more 

heavily on other components of EPA's selected BSER in order to comply with the Proposed 

Guidelines. Commenters stated this, in turn, will increase the cost of those other building blocks 

in ways that EPA has failed to analyze in the Proposed Guidelines. 

Comment 39: Commenters expressed concern regarding the interstate nature of much renewable 

energy. 
73 

Response 39: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in adopting a regional approach to RE and 

quantifying target generation in terms of incremental, rather than total, RE generation. The final 

methodology is described in detail in section V.E. of the final rule preamble of the CPP and in 

chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested the EPA recalculate building block 3 goals with proper data and attribute 

renewable resources consistently. Commenters stated Building block 3 could be improved by 

changing two data sets: 

1. Commenters stated the hydropower on the Oregon/Washington and Oregon/Idaho border 

should be evenly split between the border states. Commenters stated this approach would 

be most consistent with EPA's proposed approach of applying regional targets based on 

the physical location of generation. 

2. Commenters stated the 2012 stack of non-hydro renewables in each state should be 

adjusted to be consistent with existing RPS policies. Commenters stated that renewable 

projects located in Oregon that serve California load should be used to set California's 

target; renewable projects located in Washington to serve Oregon load should be used to 

set Oregon's target. Commenters stated data from the Northwest Power and Conservation 

Council on the recipient of non-hydro renewable energy generated in the Northwest is 

available. Commenters stated FERC Form 1 and FERC's Electric Quarterly Report 

contain the information needed to make most or all of the data corrections needed. 

Commenters stated that, if the final rule retains the current approach of including all renewables 

physically within a state in the calculation of each state's goal, then the EPA should issue clear 

guidance that any such renewables included in a state's baseline and goal calculation shall be 

available to that state for compliance purposes. 

Commenters stated a key to facilitating the development of RE resources to meet state CO2 

targets is that RE MWh need to be recognized in the state in which the RECs are retired, not the 

states in which they are generated. Commenters stated corralling the MWh in the states where 

the RE is generated will encourage inefficient use of capital. Commenters asserted that, while 

States will likely work with stakeholders within their footprint initially to style SIPs that allow 

their stakeholders to comply with the CPP, this will be a difficult task because different 

stakeholder will need different measures to achieve compliance, and strategies that help one 

entity comply will put another entity in jeopardy of non-compliance. Commenters suggested that 

States are not likely to turn their attention to regional compliance until they have crafted their 

SIPs and forcing RE to reside within the state as the CPP currently proposes, ignores the fact that 

areas of the country vary in their ability to generate RE. Commenters asserted that States that do 

not have weather that is favorable to production of energy from RE need to be able to purchase 

RE from outside their borders and be able to use the MWh in the denominator in order to meet 

state CO2 targets. Commenters stated the final rule must contemplate the transfer of the RE 

across state borders for new renewable projects. Commenters stated that recalculation of the 

current rates would be overly complex for the exiting RE but new RE should be handled 

differently than existing. Commenters stated that long term contracts are typically necessary to 
74 

obtain financing for RE projects and the financial burden for new RE projects will ultimately rest 

with the load that secures these projects' financing and the benefit of the MWh produced by these 

assets should accrue to the customers that shoulder the cost burden. Commenters stated that, to 

style the rule any other way will stifle new RE projects and cause capital to be invested 

inefficiently when capital will already be scarce because of the required duplication of assets 

necessary to meet reliability and environmental requirements. Commenters stated renewables are 

heavily dependent on resource location and restricting the ability to develop renewable projects 

through zoning and environmental studies in the areas with high wind force or sun hours 

significantly limits the overall amount of available RE and forces projects to areas which may 

not have the same resources. Commenters stated that placing the same capital into areas with 

fewer resources raises the average cost per MWh and the overall cost of compliance with the 

CPP. 

Commenters supported allowing renewable energy purchases from out-of-state, with bundled 

RECs, in order to assist in compliance with the CPP. As such, commenters stated, the proposed 

renewable energy generation levels are achievable for all states within the SWEA region. 

Commenters stated the EPA failed to account that most portfolio standards may be satisfied with 

out-of-state power. Commenters stated this evinces a legislative recognition that it may be 

economically preferable for a state to import some or all of the resources needed to meet the instate mandate. Commenters stated this principle, however, is lost in EPA's vision of renewable 

energy "best practices." Commenters stated that, by assigning state X an initial renewables goal 

of, for instance, 10 percent based on that state's portfolio standard of that amount, the EPA is 

concluding that the "best" system for that state entails in-state generation of 10 percent 

renewables; accordingly, the EPA's goal assumes the state will develop the necessary amount of 

renewable resources in-state. Commenters stated however, state X's legislature, in allowing the 

portfolio standard to be met with out-of-state generation, did not conclude that generating instate renewable energy at 10 percent represents wise public policy; to the contrary, the legislature 

may have assumed that most of the mandated renewable generation would be imported. 

Commenters stated the EPA is arbitrarily using state legislation to set an in-state renewable 

target that the legislation itself did not establish. 

Commenters stated the EPA's reliance on existing state RPS goals fails to address the fact that 

many States permit out-of-state generation to meet RPS obligations; as a result, state RPS goals 

are not a good proxy for each state's renewable energy generation potential. 

Commenters stated the EPA's assumptions regarding renewable energy are unrealistic and do not 

recognize the fact that many utilities build renewable energy generation into their portfolio by 

purchasing energy from outside the state. Commenters stated it is unclear in the Proposal how 

that impacts the targets that EPA has set for each state. 

Commenters stated that it is therefore neither fair nor appropriate for the EPA to allow a state to 

claim full credit for RE generated in another state. Credit for renewable energy must be 

equitable. Commenters said that in North Dakota, approximately 60% of the electricity produced 

is exported to other states. However, the commenters noted, the Proposed Rule requires North 

Dakota to reduce emissions from 100% of the coal-fired units that produce this electricity. 

Commenters stated since North Dakota must address all coal-fired electrical generation, the EPA 
75 

must formulate an equitable method for crediting renewable energy. Commenters indicated that 

the Proposed Rule would allow other state(s) to take credit for RE generated in North Dakota 

even though they have no responsibility for GHG emissions from electricity generated in North 

Dakota from coal that is exported to the other state(s). Much of the exported wind energy 

generated in North Dakota actually displaces coal generation in North Dakota; yet, North Dakota 

may not get credit for that renewable energy, the commenters pointed out. Commenters stated 

that there are reasons RE sources are placed in a state other than the state that has the RPS. These 

include the availability of the resource for generating the power (wind, water, sunshine, etc.), 

available land and transmission lines, and tax incentives, the commenters explained. States that 

host renewable energy that is exported do not just reap benefits, there are consequences, the 

commenters said. Commenters indicated that land lost to production, visual impairment of the 

landscape and wildlife impacts are just a few of the impacts on a state. Commenters asserted that 

it is therefore neither fair nor appropriate for the EPA to allow a state to claim full credit for RE 

generated in another state. 

Commenters suggested the EPA allow for the unencumbered import and export of RE and their 

corresponding greenhouse gas compliance value across state lines. Commenters stated 

maintaining this approach is important in order to allow states the greatest flexibility to achieve 

the aggressive 111(d) goals set by the EPA. Commenters stated that preserving this flexibility 

would be consistent with current state renewable programs which cross state borders and allow 

the flow of renewable, and soon climate attributes, to meet the supply and demand of the states 

which have different goals and different resources. Commenters stated the reduction of carbon 

intensity should follow the contract path and apply to the state which is importing the 111(d) 

compliance attribute /REC. Commenters stated that, while the import/export should not be 

limited to contiguous states or ISO regions, it is not appropriate to allow international imports. In 

addition, for grid reliability reasons, commenters said states should be required to have a 

balanced mix of both base-load and intermittent renewables. Commenters said that restrictions or 

prohibitions on imports and exports will have several unintended consequences: (1) rather than 

creating a robust, national and cost-effective renewable market, artificial barriers and price 

signals will result and (2) rather than minimizing the patchwork of renewable programs with 

varying degrees of success, this inefficient program will be reinforced. Commenters concluded 

that states have an enormous challenge creating programs to maximize their resources to meet 

aggressive program requirements, and any limits on the interstate flow of renewable attributes--

including any requirement that those attributes be bundled with electrical generation--will skew 

this program in favor of a small subset of available renewables, decrease cost effectiveness, and 

decrease flexibility to the states. 

Comment 40: Commenters expressed concerns regarding offset crediting. 

Response 40: The BSER is premised, in part, on affected sources procuring incremental RE to 

replace their own generation. A successful demonstration of rate-based compliance, whether on 

an affected source basis or through the application of a state goal as described in section VII of 

the final rule preamble of the CPP, precludes the double-counting of a single megawatt-hour of 

output. Refer to section VIII.G of the final rule preamble of the CPP for further detail on actions 

taken to adjust the CO2 emission rate of an affected EGU. 
76 

The following are summaries of the specific public comments under this comment: 

Commenters said that allowing a transfer of green offset credits between States under Building 

Block 3 creates a double offset problem if coal generation has to be offset once in the State 

where it is generated, and again in the State where it is distributed and sold. Commenters added 

that the EPA has indicated that the final rule may allow wind generation MW hours to be 

transferred by their owner to any State rather than count them in the State where they are 

generated as they are under Building Block 3. This creates a double offset problem, the 

commenters asserted. 

 Commenters indicated that Minnesota's RPS applies at the retail/distribution rather than at the 

wholesale generation side of the interstate sale of electricity. Under the Minnesota RPS, 

wholesale coal-fueled electricity generated in North Dakota and sold in Minnesota is partially 

offset by wholesale wind power generated in North Dakota and sold in Minnesota, the 

commenters said. This crediting occurs at the retail customer level in Minnesota, the commenters 

added. Commenters also stated that the same coal-based generation will now have to be offset 

again in North Dakota at the generation/wholesale side of the transaction, because the offset 

credited at the retail level in Minnesota will not be counted in North Dakota at the wholesale side 

of the transaction. Commenters said that it appears that the same MW of coal generation will 

have to be offset twice: once at the wholesale-generation side of the transaction in North Dakota, 

and again at the retail-distribution side of the transaction in Minnesota. Commenters stated that if 

the EPA allows (either expressly or by default) the transfer of such credits under any final rule, 

the EPA must also address double offset problem. 

Comment 41: Commenters stated that the proposal would not allow sufficient time for the 

design, approval, and implementation of state and/or regional compliance strategies needed to 

achieve the proposed renewable energy goals. 

Response 41: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and in chapter 4 of GHG Mitigation Measures TSD supporting the 

final CPP. The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly the adoption of a phase-in period from 2022 through 

2023 that would enable appropriate time for investments and planning to accommodate an 

increase in RE. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA fails to fully appreciate the costs and implementation challenges 

faced by large-scale renewable energy projects. Commenters stated that, for example, the CREZ 

project in Texas, which was designed to transmit 18 MW of wind generation to population 

centers, took eight years to construct; even if started today, such a project could not be completed 

until mid-way through the interim compliance period. 

Commenters stated there are a number of state-specific factors impact not only the amount of 

potential renewable resources available, but also impact the feasibility and rate at which such 
77 

resources may be developed. Commenters stated that these factors include geography, topology, 

energy markets, seasonal differences, transmission considerations, state regulatory processes, 

and project siting rules associated with certain endangered species and other environmental 

programs. Commenters stated that implementation, generation (and related transmission) 

planning involves input and decisions from a number of entities, such as various state regulators, 

regional transmission organizations, and independent system operators. Commenters stated that 

the proposal would not allow sufficient time for the design, approval, and implementation of 

state and/or regional compliance strategies needed to achieve the proposed renewable energy 

goals. Commenters stated that EPA did not evaluate the impact of regulatory processes on the 

timing and feasibility of developing renewable energy resources. Commenters stated that timing 

related challenges are introduced by the number of regulatory agencies that must evaluate and 

approve the addition of renewable resources, including the necessary arrangements to connect 

those new generating resources to the grid, as well as by the number of agencies that evaluate 

and balance the impacts of multiple projects across multiple jurisdictions. Commenters stated 

this includes agencies whose obligations are very diverse, including cultural and historic 

resource agencies, marine, fish and wildlife services, aviation authorities, state and federal land 

management agencies, and others. 

Commenters stated that there are significant concerns and uncertainties pertaining to the 

mechanics of implementing and managing interstate issues associated with how states that 

support the development of out-of-state renewable resources obtain credit for such resources in 

their compliance plans. 

Comment 42: Commenters stated the EPA failed to account for the transmission that must be 

built to accommodate the amount of renewable resources it projects. 

Response 42: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP. The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly the adoption of a phase-in period from 2022 through 

2023 that would enable appropriate time for investments and planning to accommodate an 

increase in RE. 

The following are summaries of the specific public comments under this comment: 

Commenters stated it is naive to think that states can reach agreement amongst their internal 

stakeholders and achieve regional agreements in one year's time. Commenters stated that, due to 

some of the remote locations of the prime renewable resources, transmission infrastructure 

upgrades or additions are often necessary. Commenters stated a significant variable is the right of 

way/easement process, which is highly dependent on landowners and can also be influenced by 

public opinion. Commenters stated that, just as the permitting of renewable facilities encounters 

an increasing number of permits and approvals with long study periods, so too does the 

construction of power lines to move energy from the renewable facilities to load centers. 

Commenters stated the NERC estimates a 10 to 15 year timeline for transmission construction. 

Commenters stated this country has never built this level of transmission and pipeline expansion 
78 

and generation. Commenters stated the EPA's assumption that East Kentucky Power Cooperative 

can essentially create an RE portfolio by 2020 or 2030 is arbitrary, unreasonable and unjustified. 

Commenters stated that, because the ability to send renewable power from the east side of the 

grid to the west side is very limited, Basin Electric cannot use its east side wind resources to 

make up for a reduction in coal-based generation in Wyoming. Commenters stated that building 

adequate renewable resources in Wyoming to make up for reduced coal-based generation may be 

impossible, and certainly could not be accomplished in time to meet the interim goals. 

Commenters noted that renewable resources are built where the conditions are best for them, not 

to serve as replacements for coal-based stations as determined by state boundaries. 

Commenters stated that, even if North Dakota could site, permit and build all of this additional 

renewable power, the EPA fails to address the obvious need for new transmission to support this 

renewable development. Commenters stated a host of experts has already warned EPA of the 

long lead times needed to construct transmission in order to support the very aggressive 

renewable resource provisions in the Proposed Rule. Commenters stated the major reason that 

the SPP cites as to why the EPA's proposal will lead to "cascading outages and voltage collapse" 

is because it will take at least eight years to build transmission necessary to support the 

alternative resources the rule will require. Commenters stated the Director of FERC's Office of 

Electric Reliability also warned the EPA that "it is difficult to get transmission built for 

[renewable] generation when it is remote from loads, e.g., wind farms."Commenters stated 

FERC Commissioner Tony Clark testified to Congress that "[i]n the case of large renewables 

like utility-scale wind and solar, transmission investments are likely to be needed to hook up 

remote generation to the existing transmission grid." Commenters stated the EPA's failure to 

even consider the need for additional transmission, let alone the time and multi-billion dollar cost 

involved, undermines Building Block 3. Commenters stated Building Block 3 is also based on a 

misunderstanding of state renewable portfolio standards and EPA's role as an environmental 

rather than an energy regulator. 

Commenters stated the EPA's assumption that large amounts of renewable power can be 

developed and brought to market within the proposal's compliance time lines fails to account for 

the significant cost and time needed to build the necessary transmission. Commenters referred to 

a FERC Order which stated " ... increased adoption of [renewable portfolio standard measures] 

has contributed to rapid growth of renewable energy resources that are frequently remote from 

load centers, and thus [increase the] need for transmission to access remote resources .... " As a 

result, "additional, and potentially significant, investment in new transmission facilities will be 

required in the future to meet reliability needs and integrate new sources of generation." 

Commenters stated that, as the Edison Electric Institute has reported, "[l]engthy, complicated, 

and costly siting and permitting processes continue to be major barriers to installing new 

transmission lines and upgrading existing lines." Commenters stated the EPA does not include 

any information in its proposal as to the cost or time needed to build transmission; the EPA 

simply (and arbitrarily) assumes that the needed renewable resources will become available 

when needed. 

Commenters stated the EPA's failure to consider the need for additional transmission, let alone 

the time and multibillion dollar cost involved, fatally undermines building block three. 

Commenters stated a host of experts has warned EPA of the long lead times needed to construct 
79 

transmission in order to support EPA's renewable resource targets. Commenters stated the major 

reason that the Southwest Power Pool (SPP) cites as to why EPA's proposal will lead to 

"cascading outages and voltage collapse" is because it will take at least eight years to build 

transmission necessary to support the alternative resources the rule will require. Commenters 

stated the Director of FERC's Office of Electric Reliability warned EPA that "it is difficult to get 

transmission built for [renewable] generation when it is remote from loads, e.g., wind farms." 

Commenters stated FERC Commissioner Tony Clark testified to Congress that "[i]n the case of 

large renewables like utility-scale wind and solar, transmission investments are likely to be 

needed to hook up remote generation to the existing transmission grid." 

Comment 43: Commenters stated the EPA should analyze potential constraints from a 

generation and transmission line perspective prior to determining RE capacity and the 

appropriate RE re-dispatch capability. 

Response 43: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and in chapter 4 of GHG Mitigation Measures TSD supporting the 

final CPP. The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly the adoption of a phase-in period from 2022 through 

2023 that would enable appropriate time for investments and planning to accommodate an 

increase in RE. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed concern that, while the growth of renewable generation is highly 

dependent upon permitting, financing, transmission access and technical challenges posed by 

integration of intermittent electricity sources into the grid, there is no indication that EPA has 

taken those factors into account. Commenters stated the EPA's failure to consider the need for 

additional transmission, let alone the time and multibillion dollar cost involved, fatally 

undermines building block three. Commenters stated that, while the EPA assumes that the 

needed renewable resources will become available when needed, that assumption is arbitrary. 

Commenters stated a host of experts has warned EPA of the long lead times needed to construct 

transmission in order to support the EPA's renewable resource targets. Commenters stated the 

major reason that the SPP cites as to why EPA's proposal will lead to "cascading outages and 

voltage collapse" is because it will take at least eight years to build transmission necessary to 

support the alternative resources the rule will require. Commenters stated the Director of FERC's 

Office of Electric Reliability warned EPA that "it is difficult to get transmission built for 

[renewable] generation when it is remote from loads, e.g., wind farms. Commenters stated FERC 

Commissioner Tony Clark testified to Congress that "[i]n the case of large renewables like 

utility-scale wind and solar, transmission investments are likely to be needed to hook up remote 

generation to the existing transmission grid." Commenters stated the EPA's assumption that large 

amounts of renewable power can be developed and brought to market within the proposal's 

compliance time lines fails to account for the significant cost and time needed to build the 

necessary transmission. Commenters noted that, as FERC has stated,"...increased adoption of 

[renewable portfolio standard measures] has contributed to rapid growth of renewable energy 
80 

resources that are frequently remote from load centers, and thus [increase the] need for 

transmission to access remote resources... " As a result, "additional, and potentially significant, 

investment in new transmission facilities will be required in the future to meet reliability needs 

and integrate new sources of generation." 

Commenters stated the EPA assumed that Kentucky will achieve its generation needs by 

deploying up to 2% renewable generation (approximately 1,734 GWh by 2030). Commenters 

stated the IPM models only deployed 9 MW of new wind capacity by 2020 in the policy case, 

according to the Resource Adequacy and Reliability Analysis TSD Appendix A2 on page 14 for 

SERC-N region. Commenters stated data from a recent LKE capacity solicitation indicate that, to 

meet 1,734 GWh of renewable energy from the state of Kentucky and nearby states, would 

require the equivalent of over 670 MW of wind or 1,200 MW of solar capability. Commenters 

stated this amount of renewable energy resource would most likely result in significant 

transmission infrastructure needs for either in-state or out-of-state sources. Commenters stated 

reliance on out-of-state generation is concerning given the competition for energy between 

generating states and other importing states (as contemplated under Building Block 3). 

Commenters stated that transmission planning must be completed across import and export 

seams between Transmission Planning and Balancing Authorities to verify enough Available 

Transfer Capability (ATC) exists to facilitate firm transmission transaction. Commenters stated 

that, without sufficient firm transmission arrangements, congestion and reliability concerns are 

exacerbated and could require further transmission line construction. Commenters stated that, by 

the dynamics of the proposed compliance calculation, any over-estimation by the EPA in setting 

the reduction goals based on renewable energy development and utilization in Kentucky will 

need to be offset by over twice the amount of reduction from fossil sources. Commenters stated 

LKE is seeking approval to construct a proposed 10 MW solar project that will require 

approximately 100 acres of available land at an existing site. Commenters stated that, with that 

as the expected land requirement, to install 1,200 MWs of solar energy to meet the Building 

Block 3 energy calculation above, it could require up to 12,000 acres for solar panel installations, 

which is not a practical assumption. Commenters stated that, to provide 670 MW of wind 

generation in Kentucky, over 250 wind generators would be required. Commenters stated that, as 

the EPA's IPM model only deployed 9 MW of wind generation in Kentucky, the balance of wind 

energy would have to be imported, triggering the need for fully evaluating the transmission 

system capability. 

Comment 44: Commenters expressed concerned regarding grid reliability due to RE increases. 

Response 44: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and in chapter 4 of GHG Mitigation Measures TSD supporting the 

final CPP. The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly the adoption of a phase-in period from 2022 through 

2023 that would enable appropriate time for investments and planning to accommodate an 

increase in RE. 

The following are summaries of the specific public comments under this comment: 
81 

Commenters stated that wind, solar, and other renewables can make up no more than roughly 20 

percent of a given grid, with the exception of large scale hydro power. Commenters stated wind 

and solar are limited because (1) they're intermittent, requiring expensive back-up generation in 

order to adequately respond to fluctuations in demand; (2) there does not exist at this time any 

way to store solar or wind energy, and there are no practical technologies on the horizon; and (3), 

their generators must be located where the resources are located, as opposed to the best location 

to put a generator, which translates to higher transmission costs. 

Commenters stated the 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 the 

EPA offers that electricity storage technologies have the potential to enhance emission 

performance and provide generation during periods when intermittent wind and solar generation 

are unavailable due to natural conditions (79 FR 34924). Commenters stated electricity storage 

technology has not advanced to a degree that it can be reliably considered. Commenters stated 

the DOE reports that "at present, the U.S. has about 24.6GW of grid storage, 95% of which is 

pumped storage hydro." [U.S. Department of Energy, Grid Energy Storage Report, December 

2013.] Commenters stated DOE acknowledges "not every type of storage is suitable for every 

type of application, motivating the need for a portfolio strategy for energy storage technology" 

and that there are "four challenges related to the widespread deployment of energy storage: cost 

of competitive energy storage technologies (including manufacturing and grid integration), 

validated reliability & safety equitable regulatory environment, and industry acceptance." 

Commenters cited the following from DOE: "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." 

Commenters stated that requiring the degree of RE proposed for implementation in such a short 

time will undoubtedly create reliability issues. Commenters stated the EPA cannot promote 

energy storage as a viable option or demonstrated technology that is technically or economically 

feasible to address the intermittent nature of RE. Commenters stated that, at this time, it is only 

technology such as simple cycle combustion turbines that can be counted on to reliably address 

the intermittent nature of RE and these sources will increase CO2 emissions compared to 

renewable sources. Commenters stated this is a consideration that U.S. EPA has evidently not 

accounted for under this proposal. 

Commenters stated that, while a municipal utility must be able to provide electricity 24/7, no 

renewables compete with the output of a coal plant operating 24/7 and no renewable options are 

currently demonstrated to be available and cost-effective, the commenters stated. Commenters 

stated that Florida has no major wind energy and practically no new hydroelectric power 

available. While the use of solar energy has potential and usage is increasing, large-scale solar 

has low potential, primarily due to limited capacity (not available when the sun is not shining) 

and the large amount of land that is needed for the installation of solar panels, the commenters 

noted. Solar energy will continue to be of limited value until it is consistently available when the 

energy is needed and therefore dispatchable like other baseload generation, the commenters said. 

Commenters do not believe that solar energy will replace baseload generation until sometime 

well into the future when battery storage improves and is available for a reasonable cost. 
82 

Commenters said that renewable resources should continue to be developed even though these 

resources will be limited by their inherent intermittent availability. Commenters asserted that 

these natural and renewable resources should be developed where feasible without creating a 

financial burden to consumers. Commenters stated while these renewable sources supplement 

conventional resources and reduce the consumption of certain fuel driven generation, they cannot 

meet the on-demand response for electricity required by the consumer. Therefore, the 

commenters said, more conventional baseline generation resources are going to be needed in the 

future to meet reliability standards. 

Commenters said that, while renewable sources are already a significant component of the 

commenters' energy portfolio and will become even more so in near the future, replacing the 

generation currently provided by Eckert and Erickson exclusively with renewables is not a viable 

option from either an economic or reliability standpoint. Commenters said that, while renewable 

energy has been a prominent component of their company's energy portfolio for many years, its 

intermittent generation capacity, however, means that renewable sources of energy cannot meet 

Lansing's energy demands. 

Commenters indicated that the EPA fails to recognize that renewable generation is variable and, 

thus, not equivalent to fossil-fuel fired generation. According to the commenters, variable 

generation cannot be dispatched at controlled loads and, therefore, is not available for both 

stabilizing the grid for reliability purposes and as capacity resources. Additionally, commenters 

added, re-dispatch to renewable generation would further jeopardize reliability and grid stability. 

Comment 45: Some commenters did not support a regional approach for renewable energy 

based on state RPS requirements. 

Response 45: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's approach to calculating region-wide renewable energy targets is 

flawed because Indiana, North Dakota, and South Dakota have renewable portfolio goals rather 

than renewable portfolio standards. 

Commenters disagreed with the EPA approach of using an average of the region's existing 

renewable portfolio standards to calculate the feasible level of renewable energy that could be 

expected from each state in the region. Commenters stated that, because the EPA used nonIndiana benchmarks to set Indiana's goal under Building Block 3, the EPA incorrectly decided 

that state legislatures outside Indiana were qualified and able to correctly assess the future 

potential of Indiana's renewable energy sector when they were crafting policies for their own 

states. Commenters stated they were unaware of any feasibility assessment the EPA employed 

when the agency elected to treat the benchmarks contained in existing renewable portfolio 

standards as achievable at a reasonable cost. Commenters stated it is important to note that 
83 

simply because state legislatures in other Midwestern states are attempting to facilitate the 

installation of a certain amount of renewable energy in their states in the coming decades, 

success is not guaranteed. Commenters stated it is inappropriate to hold Indiana to an unproven 

standard decided by those other legislatures. 

Commenters stated the EPA's regional approach fails to adequately address differences in 

renewable energy potential between similarly located States. 

Commenters stated that EPA's proposal to base BSER in part on regional "best practice" targets 

that are based on some states' political decisions to adopt renewable portfolio standards (RPS) is 

arbitrary because it ignores the decisions of dozens of states that have chosen not to adopt such 

standards. Commenters provided the example that in two of the regional "best practice" areas, 

the target 2030 level of renewable energy deployment was set by reference to a single state's 

RPS target. Commenters stated EPA provides no explanation for why it has effectively 

disregarded the political judgments of the nearly 50% of states without RPS programs, while 

relying on the political judgments of states that have elected to adopt such programs. 

Commenters stated EPA's proposal does not evaluate the technical or economic feasibility of 

achieving the targeted levels of renewable energy deployment in each state, and evaluation of the 

energy and economic feasibility of implementing each proposed "best system of emission 

reduction" is a statutory requirement of Section 111 (42 U.S.C. 7411(a)(1)). Commenters stated 

that EPA's failure to evaluate the technical and economic viability of EPA's renewable energy 

BSER building block is therefore inconsistent with the statute. Commenters stated EPA's use of 

regional average renewable energy targets applied to individual states would displace the roles 

traditionally performed by state legislatures and regulatory agencies, and it also conflicts with the 

Integrated Resource Plan processes that many state public utility commissions utilize for longterm planning of electric supply and demand resources. Commenters questioned whether 

Congress ever intended Section 111(d) to enable such a far-reaching expansion of EPA's 

regulatory authority under the Clean Air Act. 

Commenters stated the EPA applies a regional approach which averages existing State RPS 

targets in a given region and then applies that average target to each State in that region, based 

on the assumption that renewable energy opportunities are uniform within a region. Commenters 

stated the EPA's broad-based regional approach fails to account for differences in renewable 

energy potential among States. Commenters stated the mere fact that two States are in relative 

geographic proximity does not mean that they have the same potential to produce renewable 

energy. 

Commenters stated that, if U.S. EPA is to rely on current RPS programs in the states as "best 

practices" then U.S. EPA must take them at face value and allow those programs, as 

implemented in each state, to fully qualify for implementation under this proposal. 

Commenters stated the EPA did not adequately consider generation in its regional RPS 

calculations. Commenters provided a table with data compiled from the EIA Net Generation by 

State by Type of Producer by Energy Source (EIA-906, EIA-920, and EIA-923) which shows RE 

generation data for each state in Ohio's region. Commenters noted the data show there is 

significant variation in the generation amongst the states, with three of the states, Ohio, 

Pennsylvania, and West Virginia producing 70% of the regional total. Commenters stated that, 
84 

from an RE perspective, two of the states in this region, West Virginia and Virginia, have 

determined that establishment of RE portfolios are not an economically feasible action for their 

state, yet both have renewable generation above New Jersey, Maryland, Delaware, and 

Washington D.C., which have highly ambitious 2020 RE RPS goals. Commenters expressed 

concern that these non-RPS states were not somehow factored into U.S. EPA's averaging in 

setting RPS goals, thus giving great weight to states in the East-Central region with highly 

ambitious 2020 targets, but little or no real renewable generation. 

Commenters stated it is arbitrary for the EPA to assume that each state is capable of achieving 

similar levels of renewable energy generation as its neighboring states. Commenters stated the 

EPA acknowledges that state RPS goals reflect policy objectives including both feasibility and 

costs and not merely renewable energy potential. Commenters stated these policy objectives vary 

significantly from state to state within individual regions. Commenters stated the proposed 

regional approach is simply based on NERC regions and does not reflect similarities--or the lack 

thereof--between states based on renewable energy potential. Commenters stated the EPA's 

failure to account for factors specific to each state's potential renewable energy generation leads 

to several inequitable and unreasonable results. Commenters stated that, for example, the 

renewable energy target for the entire ten-state Southeast region is based solely on North 

Carolina's 2020 RPS goal of 10 percent and assumes a renewable energy growth rate of 13 

percent per year for each state. 

Commenters stated the EPA arbitrarily grouped States into regions based on NERC and RTOs, 

despite the fact that each States' renewable energy potential had no bearing on the establishment 

of these regions. Commenters stated the flaws in this approach are apparent upon a review of the 

technical potential analysis the EPA references. Commenters stated that analysis shows that 

when comparing each States' combined solar, wind, and biomass potential, a 198 percent 

difference exists among the States in the Southeast region. Commenters stated the flaws in 

Building Block 3 are further evidenced by EPA's inconsistent choice to set differing Building 

Block 3 goals for States within the same region while claiming that those States contain similar 

renewable energy potential. 

Commenters stated that setting state goals based on regional targets presents a number of 

problems as well. Commenters stated renewable energy potential varies significantly within the 

regions EPA used; for example, Wisconsin has significantly less wind potential than does South 

Dakota, but both states are in the same region used by EPA to set the building block 3b goals. 

Commenters stated there is little logic in grouping such different states together in such an 

arbitrary manner. Commenters stated that grouping states together regionally in setting an RPSbased goal may further enhance differences among states and additionally "penalize" early 

adopting states that have high RPS goals. Commenters asserted that States in regions that have 

taken early action via aggressive RPS standards will be required to achieve more in the future 

than they would have if they were in a region with less ambitious goals. Commenters stated such 

groupings create artificial differences among the goals for the different states depending on the 

renewable policy decisions made by other states in their region. 

Commenters stated by not accounting for the regional differences in power supplies, states are 

treated unfairly. Commenters stated the application of regional renewable energy in the 

development of the building blocks is an oversimplification of what is possible in different 
85 

states. Commenters stated the consideration of both renewable energy and energy waste 

reduction should be considered on a state-specific basis considering technical and economic 

opportunities and limitations. Commenters stated Michigan has already done extensive work 

regarding the availability and practicality of expanding in both sectors, and the commenters 

provided copies of those reports as appendices to their comments. Commenters stated 

substituting more generalized assumptions regarding Michigan's capability in place of carefullyexamined state data is not appropriate or wise. 

Commenters did not agree with the EPA's proposed methodology for renewable energy 

generation goals. Commenters stated that it is arbitrary for EPA to assume States can achieve 

similar RE within a region. Commenters stated renewable energy potential is state-specific and 

depends on the state's natural resources (e.g., solar insolation, wind speed, terrain, biomass 

resources, hydro availability, etc.), existing transmission infrastructure, and current renewable 

energy development. Commenters stated that by ignoring variances in state-by-state resource 

potential, EPA has taken a generalized approach to establish regional targets across the nation. 

Commenters stated that averaging regional RPS targets is not representative for the Southeast. 

Commenters provided a discussion on why some states have not opted for an RPS and some 

states with an RPS have backed off ambitious targets due to cost and technical issues. 

Commenters suggested EPA should not set regional renewable targets based on renewable 

energy generation levels that have not yet been achieved but are only projected to be achieved in 

the future. Commenters said that state renewable standards are not proxies for a state's renewable 

generation potential, but are rather a policy choice, just as new nuclear is a policy choice, made 

by each individual state with regard to the type and amount of renewable energy they want to 

encourage within a specific cost range and timeframe. Commenters stated that EPA's 

methodology arbitrarily ties each state's goal to the RPS goals of other nearby states, which often 

do not actually reflect each state's highly unique mix of renewable energy potential, and, as a 

result, the state renewable generation targets are overly aggressive and do not accurately 

represent actual growth potential in each state. Commenters provided a detailed discussion of the 

Southeast states, noting that seven of the eight states in the group do not have an RPS and as a 

result North Carolina becomes the standard for the entire region. Commenters discussed that in 

Alabama, Georgia and Tennessee, industrial CHP sources burning wood or wood-derived 

products constitute over 90 percent of each state's 2012 RE generation that is used as its baseline, 

and these sources have little potential for growth. Commenters stated that this approach ignores 

whether or not states have the same ability to deploy increased amounts of renewable generation. 

Commenters stated EPA's use of RPS requirements also fails to consider key policy design 

elements of state RPS programs that serve to reduce the stringency of the standard. Commenters 

provided a discussion on the North Carolina RPS in relation to the rest of the Southeast region. 

Commenters stated that if EPA moves forward with this approach in the final rule, EPA must 

adjust RPS goals to reflect these policy design elements to acknowledge that RPS mandates 

usually require a lesser amount of in-state renewable generation. Commenters noted that since it 

is responsible for serving all or portions of seven of the states in the Southeast, EPA's 

generalized approach for regional targets has a direct impact to its Block 3 target levels. 

Commenters provided additional information on the structure of TVA and its renewable energy 

goals for 2020. 
86 

Commenters stated that the renewable energy generation goals that EPA has calculated for each 

state are unachievable. Commenters stated EPA's methodology for determining these goals is 

fatally flawed because it arbitrarily ties each state's goal to the RPS goals of other states, which 

often do not require as much renewable energy generation as they appear to and reflect each 

state's unique mix of renewable energy potential. Commenters stated that EPA relied on state 

RPS goals that are based on capacity rather than generation, such as Kansas. Commenters stated 

EPA's renewable energy generation targets for some states are unreasonably aggressive and do 

not take into account factors affecting the actual renewable energy growth potential in each state. 

Commenters stated that even EPA's IPM modeling results indicate that predicted renewable 

energy generation by the end of the compliance period will not come close to the renewable 

energy targets EPA used in its goal calculation. Accordingly, the commenters suggested EPA 

must withdraw the Proposed Guidelines and reduce its renewable energy generation targets to 

more realistic levels. 

Commenters said that the EPA's approach to calculating states' renewable development potential 

also presents challenges. First, the commenters asserted that the EPA's proposal to take a 

regional average of State Renewable Portfolio Standard ("RPS") targets and apply the average to 

all states in the region imposes the policies in one State on its neighbors. It also in effect rewards

states who have not adopted RPS targets, as their regional average is lower, the commenters 

added. Indeed, regions of the country with the highest technical potential for developing 

renewable resources have some of the lowest targets for bringing those resources online, while 

states with relatively lower technical potential are faced with the highest targets in the country, 

the commenters noted. In New York, for example, the commenters said that the NREL study 

cited by EPA in its Alternate Approach finds New York has a technical potential to meet up to 5 

percent of its electricity demand with renewable energy, while its target under EPA's proposed 

rule is five times that (at 25 percent), the commenters stated. 

Commenters stated the EPA's use of the state RPS requirements in a region to calculate regional 

goals is illogical and flawed. Commenters said that the EPA does not adjust the RPS 

requirements which it applies to all generation in a state for the amount of load (consumption) in 

the state that is covered by that state's RPS. For a state that is net exporter of electricity, its RPS 

reflects at most the amount of in-state consumption that must be supplied by RE, and not the 

total generation in the state. This can have a profound effect in states like West Virginia or 

Wyoming which export more than half of their generation, the commenters said. Commenters 

stated it also means that net importing states bear less of the RE burden, which is effectively 

transferred to the states from which they import electricity. Commenters said that the EPA also 

does not adjust the state RPS targets to reflect that fact that most states RPS requirements are not 

imposed on 100 percent of the load in the state. Commenters also said these values, which are 

available in the "Database of State Incentives for Renewables& Efficiency," range from 10 

percent to 100 percent and average approximately 80 percent. Commenters added that the EPA 

use of the state RPS requirements does not reflect the fact that many states have Alternative 

Compliance Payments or other penalty mechanisms that are available to the entities regulated 

under their RPS requirements. Commenters noted that the RPS programs in many states also 

allow importation of RE generated out of state, or the purchase of credits for actions in other 

states. Therefore, commenters stated the RE generation or consumption in a state may be 

significantly less than that implied by the RPS. 
87 

Comment 46: Tribal and Territorial – Commenters opposed mandatory regional application of 

RE goals. 

Response 46: In the final rule, the EPA applies building block 3 generation at the interconnectlevel. This methodology does not distinguish between affected sources or RE development 

opportunities within an interconnection, including those on tribal lands. For more detail on the 

building block 3 target generation methodology, refer to section V.E of the final rule preamble of 

the CPP and chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

In comments on the tribal and territories SNPR, commenters stated that the Proposed Rule raises 

uncertainty about the ability to develop renewable projects on tribal lands that could be part of a 

state's renewable goal under Building Block 3 (79 FR 64551-2). Commenters stated that, 

although the use of regional renewable energy goals might address this (depending upon how 

they are applied), the Navajo Nation is opposed to mandatory regional application of RE goals. 

Commenters stated there is a simpler solution to the problem: RE developed in one jurisdiction 

should be permitted to count toward another jurisdiction's goals provided that they are not 

double-counted. Commenters stated that, in practice, jurisdictions could enter into agreements in 

what would effectively be optional regional RE programs. Commenters stated it would not be 

necessary for EPA to establish regional RE goals. 

Comment 47: Commenters suggested use of a weighted average in the regional calculation 

based on state RPS requirements. 

Response 47: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, rather than treating each state equally, EPA should consider an 

electricity-generation weighted approach so that small States with lower generation levels can't 

cause such dramatic shifts in a region's renewable energy goal under block 3. 

Commenters stated it is inappropriate that the ambitious 2020 RPS targets of Maryland, 

Delaware, and Washington D.C were given equal weight in the averaging calculation, despite the 

fact that these states contributed far less than 1% of the region's RE and only 7.6% of the region's 

total generation. Commenters stated that Washington D.C. has a highly ambitious renewable 

target, yet contributed no renewable generation to the grid in 2012. Commenters stated that, 

despite what U.S. EPA described as similar RE potentials amongst the state in this region, it is 

clear that these states share little in common with the other states in the region in terms of 

electric generation capabilities. Commenters stated that, if the EPA is to pursue regional 
88 

averaging in setting renewable goals (which Ohio EPA does not agree with), a weighted average 

that takes into account the total generation contribution of each state, the renewable contribution 

of each state, and accounts for the fact that several states found the creation of a renewable 

portfolio to be uneconomical must be developed. Commenters stated that, absent this, the current 

proposed methodology places great burden on those states which generate far more electricity, 

discounts those states with no renewable portfolios, and requires very little of those states with 

little generation capacity. 

Comment 48: Commenters objected to the EPA's method for determining the average RPS 

requirements. 

Response 48: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA incorrectly assumes that averaging the RPS requirements of the 

states in a given region actually reflects the full level of RE investment that is reasonably 

achievable for that region. Commenters stated, for example, the North Central region covers nine 

states and has an average RE percentage requirement for 2020 of 15 percent, which is driven by 

the RPS requirements in five of these states: Illinois, Michigan, Minnesota, Missouri, and 

Wisconsin. Commenters stated that three of the four states that do not have RPS requirements 

(Iowa, North Dakota, and South Dakota) are among the nation's leading states in onshore wind 

development, generating approximately 25, 15, and 24 percent (respectively) of their total instate electricity from wind in 2012. Commenters stated that, because there are no RPS 

requirements in Iowa and the Dakotas, the RE target for the North Central region does not reflect 

the robust performance of wind-generated electricity in those states. Commenters stated that, 

while there is some merit to EPA's view that RPS policies represent the judgment of state 

legislatures about what level of renewable energy development is feasible, this does not hold true 

for states without RPS policies, since zero RE is not a reasonable judgment as to the state's 

potential for economic RE. 

Commenters objected to the EPA's method for determining the average RPS requirements. 

Commenters stated that, by relying on just a single state's RPS requirements to direct the 

renewable investment of nine states, EPA's approach largely entrenches the status quo rather 

than considering whether greater renewable penetration is achievable. Commenters stated that, as 

another example, the Southeast has the lowest average RE percentage requirement of only 10 

percent, which is based on the RPS requirements of just one state: North Carolina. Commenters 

stated that, according to NRELs technical potential analysis, states in the Southeast region could 

generate over 30 million GWh annually from utility-scale solar stations. Commenters stated that, 

in 2012, these states generated just 348 GWh from solar plants, a tiny fraction of their technical 

potential and less than .04 percent of the total electricity generated in these states. Commenters 

stated there are neither technological nor economic barriers to increased penetration of renewable 
89 

resources in the Southeast market; rather, the problem is one of political will and inertia based on 

decades of reliance on fossil fuels. 

Commenters stated that, in calculating the regional target based on state RPS programs, EPA had 

to decide how to handle the facts that different states have targets set for different years and that 

not all states have 2030 targets; however, the way that EPA chose to deal with this was 

arbitrarily conservative. Commenters stated the agency derived a "2020 effective RE Level" for 

each state RPS, interpolating for those states without a specific target for 2020 and then 

established the average 2020 effective RE level for each region as the 2030 target for that region. 

Commenters stated the EPA effectively ignored the many state RPS goals for the years beyond 

2020 that are more ambitious than the "effective 2020" targets. Commenters stated that, even if 

one were to accept EPA's rationale that the judgment of state's legislature is a proper estimate of 

the full level of RE achievable in that state, there is no reason to take the states average judgment 

about what level is achievable in 2020 and make that a 2030 target. 

 

Comment 49: Commenters suggested the EPA apply regional renewable targets to retail electric 

sales. 

Response 49: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, if building block 3 targets were based on state retail electric sales rather 

than the physical location of generating resources, the problems identified with the renewable 

energy assumptions would vanish. Commenters stated the EPA already used retail sales data in 

the application of building block 4. Commenters stated changing building block 3 to a loadbased calculation would not dilute national emission reductions and would more closely align 

with existing RPS policies upon which the renewable assumptions are based. Commenters 

recommended keeping the regional renewable energy targets the same - 21 percent in the west, 

25 percent in the northeast, etc. - but the proposal would apply those targets to 2012 retail 

electric sales data for each state. Commenters stated the goal-setting calculation would assume 

that each state would meet half of its regional target by January 1, 2020, 75 percent of its target 

by January 1, 2025 and its entire regional target by January 1, 2030. Commenters stated such a 

stair-step approach aligns with many RPS policies in the country and reflects the fact that new 

renewable energy typically enters the grid in sizeable chunks as a result of utility-scale projects. 

Commenters stated this approach would not assign existing renewable resources to any particular 

state for purposes of goal-setting and, as a result there would be no disruption of the existing 

REC trading system if states wanted to use it for compliance and no concerns about data errors in 

determining the physical location of the generating units. 
90 

Comment 50: Commenters stated the EPA’s approach is flawed because it does not include 

states with no RPS in its calculations. 

Response 50: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's calculation of regional renewable energy goals is flawed because 

the average includes only values from states with RPS programs; states with no RPS (zero 

values) are excluded from the calculation. Commenters stated this approach is defective and 

leads to illogical and discriminatory results imposing greatly different and unjust requirements 

on the individual states 

Comment 51: Commenters objected to the use of a single state's RPS for all states in a region. 

Response 51: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. 

The methodology that produces target generation levels under building block 3 is described in 

detail in section V.E. of the final rule preamble of the CPP and in chapter 4 of the GHG 

Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Kansas--South Central 

Commenters stated the only state in the South Central region with an RPS is Kansas, which is set 

to achieve a mix of 20% generation from renewables by the year 2020. Commenters stated that, 

in the absence of an RPS in the other five states, the proposed Rule extrapolated Kansas' RPS to 

all six states in the region, a move that gets ahead of state regulators, state policy and law makers 

without regard to the achievability of such a standard. Commenters stated that compounding the 

RPS extrapolation error is the fact that Kansas' RPS of 20% is capacity based, not energy-based. 

Commenters stated the proposed Rule made an error using the capacity-based RPS value. 

Commenters stated the Arkansas Electric Cooperative Corporation (AECC) estimated the 

energy-based standard is closer to 12%. Commenters stated that, even if the intention is to rely 

on a single state's RPS to set a regional target (an error in and of itself, in AECC's estimation), 

the South Central region's RPS should be no greater than 12%. Commenters stated the 20% 

capacity-based number for Arkansas equates to a renewable energy target in 2029 of 4,709 GWh, 

but given Kansas' RPS is actually 12%, Arkansas' renewable energy target in 2029 would be, at 

most, 2,872 GWh, a figure that is 60% lower than the proposed Rule mandates. 

Commenters stated that an additional error in the proposed Rule is that it states that the average 

RPS within the region is applied across all states in the region. Commenters stated the proposed 

Rule simply applied Kansas' 20% RPS to all six states, without taking an average. Commenters 
91 

stated the average of 20% applied to 6 states in the region is 3.33% capacity-based or 2.0% 

energy-based; as opposed to 20% capacity-based or 12% energy-based. Commenters stated the 

correct mathematical calculation, for the purpose of extrapolating and enforcing an RPS average 

across a region, is the aggregate renewable energy percentage (20% capacity-based, or 12% 

energy-based) divided by the number of states (6) in the region. Commenters concluded the RPS 

standard set for the South Central region is wrong on its face, and even with corrections, is 

unachievable. 

Commenters stated the Kansas RPS is an improper basis to establish region-wide standards. 

Commenters stated the EPA failed to show that Kansas 2020 RPS has been "adequately 

demonstrated" for Texas or other states in the South Central region. Commenters stated that, 

given the unique design, and its reliance on gross generation capacity rather than sales, Kansas' 

RPS should not have been considered as a basis for other states. Commenters stated Kansas' RPS 

enacting legislation provides for clear reasons that its RPS should not be used as a model for 

other RPS. Commenters stated that the Kansas Corporation Commission has identified its RPS 

standards as a unique example; one that should not serve as a model for other states: "Kansas' 

standard differs from other state's renewable portfolio standards in that it is based on gross 

generation capacity rather than total retail sales. In general, the gross generation capacity is the 

amount owned or leased by a utility minus the auxiliary power used to operate the facility. The 

auxiliary power is determined by performing a test of each facility. If it is not practical to 

perform the test on any particular facility, the nameplate net capacity of the facility will be used."

Commenters stated Kansas' RPS provides numerous exceptions and provisions not contemplated 

in the Rule Proposal that mitigate the ultimate impact and burden of the RPS, including that an 

operator may purchase renewable energy credits ("REC") and still comply with the RPS. 

Commenters stated Kansas' RPS also excuses generators from paying a penalty under the law if 

the RPS would cause the "affected utility's total revenue requirement to increase one percent or 

greater." Commenters stated this is a critical limitation on the ultimate burden of the RPS; 

though Kansas sets the RPS at a very aggressive goal, this provision serves as a backstop that the 

harm cannot be too great on Kansas' electricity consumers. Commenters stated this type of 

backstop is not contemplated in the Rule Proposal, and makes the aggressive Kansas RPS an 

inappropriate measure for other states. 

Commenters stated Kansas' capacity requirements cannot be used to accurately establish a 

region's generation requirements, but this is what EPA has done. Commenters stated that, by 

using Kansas' 20% capacity target, and then applying it as a generation target (for example, 

imposing a 20% generation target in Texas), it is significantly, and without basis, inflating the 

renewable generation target for Texas. 

North Carolina--Southeast 

Commenters stated the EPA wrongly assumes that the state of Alabama can increase its in-state 

renewable energy generation to a level that would satisfy North Carolina's renewable energy and 

energy efficiency portfolio standard. Commenters stated the EPA plainly ignores the compliance 

options of North Carolina's program, which are not limited to in-state renewable energy 

generation but include energy efficiency, demand reduction, and the utilization of out-of-state 

renewable energy credits. Commenters stated it is wrong for EPA to base its assumptions for 
92 

Alabama's expected in-state renewable energy generation levels on a standard that was not 

limited to renewable generation alone. Commenters stated the EPA's proposal assumes Alabama 

can add in-state generation from costly intermittent renewable energy sources by over 415 

percent. Commenters stated meeting such a level would equate to the installation of over 5,000 

megawatts of wind capacity, or 9,000 megawatts of solar capacity. Commenters stated that 

renewable generation on these scales, in the state of Alabama, is not practically, technically, or 

economically feasible. 

Commenters stated the EPA misapplied the State Renewable Portfolio Standards (RPS) in 

developing regional goals. Commenters stated that, because North Carolina is the only State 

within the Southeast region with an RPS, EPA based its Southeast regional goal entirely on 

North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard (REPS). 

Commenters stated that, in applying the North Carolina REPS to the region as a whole, the EPA 

failed to consider that the REPS allows the use of many additional resources and provides a 

number of off-ramps, which are not considered in defining EPA's mandatory State emission 

goals. Commenters stated some of the resources allowable under the REPS include demand-side 

management, energy efficiency measures, electricity demand reduction, existing hydro 

resources, credit multipliers for biomass, and out-of-State unbundled renewable energy credits. 

Commenters stated the EPA excluded some of these resources as methods for complying with 

Building Block 3, despite using the value of these methods to calculate the Building Block 3 

goals. Commenters stated the EPA double counted the improvements that could be gained from 

other resources by including them in the goal computation for both Building Blocks 3 and 4. 

Commenters stated these errors resulted in a significantly more stringent goal for the Southeast 

region than can be achieved. 

Commenters objected to the EPA's explicit exclusion of credit multipliers within a States' plan 

because it results in greater stringency of the Building Block 3 goal. Commenters stated, for 

example, North Carolina's REPS allows triple credit for the first 20 MW of biomass renewable 

energy generation capacity located within a certain area. Commenters stated the EPA failed to 

take into account how the exclusion of credit multipliers would affect the achievability of the 

State goals. Commenters stated North Carolina's REPS also permits the use of renewable energy 

certificates derived from out-of-State renewable energy facilities to comply with REPS 

requirements. Commenters stated the EPA erred in not reflecting the allowance for out-of-State 

energy credits in its Building Block 3 goals. Commenters stated that, even if North Carolina's 

renewable potential were equivalent to Alabama's (it is not), EPA cannot take only the numbers 

from the North Carolina REPS and ignore the critical fine print. 

Commenters stated that, because capacity factors for wind and solar vary widely across the 

Southeast region, the application of one state's goal to an entire region is arbitrary. Commenters 

objected to the application of a regional index affecting 8 states based on the goal established by 

one state's legislature, without analysis that such a number applies fairly to the other states. 

Commenters stated that South Carolina has, as have many southern states, some access to solar 

and wind, but far less than is available in other states, and noted that capacity factors for wind 

and solar vary widely across the region, thus the application of one state's goal to an entire region 

is arbitrary. 
93 

Commenters said that the EPA justifies the development of state RE generation levels based on 

other states' RPS and judgments of feasibility and cost-effectiveness. Commenters stated that in 

their opinion this is clearly arbitrary. Regardless of the efficacy or validity of the NC RPS, it 

cannot substitute for the reasoned deliberation of the proper RPS goals for a state by that state's 

officials, using that state's legislative, administrative and judicial processes to derive the 

appropriate standards, the commenters asserted. Commenters stated that what works and may be 

appropriate for NC may be entirely unsuitable or acceptable for any other state, including any 

state in the southeast like Georgia. 

Commenters said that North Carolina's plan does not represent the reasonable RE goal for the 

region (or perhaps even NC). Commenters explained that the standard is actually a Renewable 

Energy and Energy Efficiency Portfolio ("REEEP") Standard that, instead of being a mandate for 

NC utilities to generate a certain percentage of their electricity from renewable resources by a 

date certain, is a combined program for RE and EE where regulated parties can use a 

combination of renewable generation, energy efficiency projects or reductions in electrical 

demand (Demand Side Management or "DSM") to meet the standard. Commenters said that 

Public utilities are subject to a REEEP Standard that increases from 3% of "retail sales" in 2012 

to 12.5% of "retail sales" in 2021. Public utilities may use reduced energy consumption from the 

implementation of "Energy Efficiency Measures" (a defined term that does not include DSM) to 

satisfy 25% - 40% of this requirement, and can use "Electricity Demand Reduction" to meet 

100% of the requirement, the commenters added. All participants can meet 25% of their 

requirement with DSM, the commenters noted, and that amount grows to 40% for compliance 

after 2021. Commenters stated a utility could meet all of its requirements under this standard 

through electricity demand reduction or a combination of electricity demand reduction and 

energy efficiency measures, according to the commenters. In addition, the statute authorizes the 

North Carolina Utilities Commission to delay or modify - in whole or in part - all of the 

substantive requirements of the NC REEEP Standards upon a showing that such action is in the 

"public interest," the commenters said. Commenters stated utilities need only to demonstrate they 

have made a reasonable effort to comply. Thus, the only mandatory RE requirements in the 

standards relate to minimum generation from solar power, swine and poultry waste, the 

commenters noted. The statute only requires that 0.2% of total electrical generation come from 

solar power, with an additional 0.2% from swine waste, both by 2018 and that 900,000 MWh 

come from poultry waste by 2014, the commenters additionally said. Commenters stated that this 

is hardly a hard-and-fast RPS established for NC utilities that the EPA can rely on to establish 

what it considers to be a "reasonable" RE goal for all states in the southeast - 10% of generation 

from RE and an additional EE-based GHG emission reduction requirement of 10%. No 

southeastern state, including NC, has made a determination that these levels of reduction are 

appropriate, and NC's REEEP Standard does not support the EPA's arbitrary determinations, the 

commenters asserted. 

Commenters objected to the EPA's method for determining the average RPS requirements. 

Commenters stated that, by relying on just a single state's RPS requirements to direct the 

renewable investment of nine states, EPA's approach largely entrenches the status quo rather 

than considering whether greater renewable penetration is achievable. Commenters stated that, as 

another example, the Southeast has the lowest average RE percentage requirement of only 10 

percent, which is based on the RPS requirements of just one state: North Carolina. Commenters 

stated that, according to NREL’s technical potential analysis, states in the Southeast region could 
94 

generate over 30 million GWh annually from utility-scale solar stations. Commenters stated that, 

in 2012, these states generated just 348 GWh from solar plants, a tiny fraction of their technical 

potential and less than .04 percent of the total electricity generated in these states. Commenters 

stated there are neither technological nor economic barriers to increased penetration of renewable 

resources in the Southeast market; rather, the problem is one of political will and inertia based on 

decades of reliance on fossil fuels. 

Commenters stated that the proposed methodology for renewables in Building Block 3 relies on 

the current population of renewable portfolio standards (RPS) by region, and that the Southeast 

is obviously the outlier among other regions, as only one of the eight states has an RPS. 

Commenters stated that states and utility companies utilize the clean energy resources that are 

technically and economically feasible in their geographic location in order to cost-effectively 

provide electricity to their customers, while meeting federal and state environmental 

requirements. Commenters stated that an understanding of the regional resource potential of 

energy sources is critical to crafting sound energy policy. Commenters stated that States and 

utilities have made decisions to invest in generation assets commensurate with the technical and 

economic feasibility in their region, and the 2012 generation baseline included in the proposed 

rule is a result of those decisions. Commenters stated that according to the EIA, the source of 

state generation by fuel source data used in the proposed rule, the 2012 non-hydro renewable 

generation in the Southeast is 98% biomass and mostly from industrial Combined Heat and 

Power (CHP), noting that it is uncertain what contribution biomass-fueled generation may be 

able to have in the future. Commenters also stated that the wind and solar capacity that has been 

added in the Southeast comes at a higher cost than other non-emitting options because of high 

capital costs and reduced capacity factors and therefore these resources are not ripe for 

widespread deployment in the Southeast. 

Commenters stated that, while the EPA has effectively assumed that, in the Southeast region one 

state's particular political decision to adopt an RPS represents a meaningful estimate of the 

"feasibility and cost of the best practices scenario" (79 FR 34867), the EPA's approach is 

arbitrary and unreasonable for at least two reasons. Commenters stated that, first, the EPA has 

provided no evidence that North Carolina's decision to pass an RPS for the state was in any way 

informed by or predicated on an assessment of the actual feasibility of generating that level of 

RE in the state. Commenters stated that North Carolina's decision could have been due to a 

combination of factors, including the state's political ideology and history, the income level of 

electricity consumers, the presence of RE manufacturers in the state, and a host of other factors 

other than the availability of resources. Commenters stated the EPA points to no evidence that 

supports its assertion that the North Carolina state legislature adequately considered whether the 

levels of RE prescribed by the state's RPS would be achievable given cost and resource 

constraints. 

Commenters objected to the use of a single state's RPS to set a region's RPS target. Commenters 

stated that North Carolina's RPS is in fact an RE and EE portfolio standard that allows affected 

utilities to comply with the standard with many measures that do not qualify as RE in EPA's 

Proposed Rule. Commenters stated these include solar water heating, electricity demand 

reduction, and energy efficiency, as well as combined heat and power systems powered by nonrenewable fuels and existing hydropower. Commenters stated that, as NERC points out in a 

recent assessment of the reliability impacts of the Proposed Rule, if the EE component of North 
95 

Carolina's RPS program is excluded (as it should be), the state's effective renewables target 

would be only 7.5%. Commenters stated that additional evidence that North Carolina's RPS is 

not based on an assessment of the feasibility for in-state generation at the level of the RPS 

includes the ability for electricity suppliers to meet 25% of the standard with the use of RECs 

imported from outside the state. 

Commenters said that the South Central Region (of which Texas is part) is one of two regions 

the EPA has identified that has set RE targets based solely on a single state's RPS. For the South 

Central Region, the EPA projects onto the other states in that region, including Texas, a target 

based only on the 2020 RPS goal of Kansas. The EPA assumes that Texas can meet targets based 

on this single RPS and ignores the fact that other states in that Region, including Texas, have 

different renewable generation potentials, the commenters noted. Commenters stated that in their 

opinion, the EPA provides no explanation of why it assumes that the Kansas RPS is achievable 

in Texas (or other states in this region). In addition, the commenters asserted this model would 

require the application of the Kansas RPS and investment in RE resources within Texas no 

matter how inefficient and costly they could be. Commenters stated this application of the 

Kansas RPS onto Texas is irrational and arbitrary, and is not "adequately demonstrated" in 

Texas. 

Commenters said that the EPA grouped states together into six regions for determining state 

renewable energy goals. However, the commenters said states within the same region can and do 

have very different solar or wind potential. For example, the commenters indicated that 

Louisiana and Kansas have dramatically different wind resource potential, but are included in the 

same region. Specifically, data from NREL indicates that, based on 2012 values, Kansas has 7.8 

times and 10.5 times more potential capacity and generation, respectively, than Louisiana, the 

commenters noted. Commenters stated the EPA's proposal to assign Louisiana the same 

renewable energy goal as Kansas, given the known differences in their wind resource potential, 

is unreasonable. 

Comment 52: Commenters stated that the most troubling aspect of applying the Kansas RPS to 

Texas is that Texas has an RPS that has already been fully implemented. 

Response 52: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters said that the State of Texas has already determined what the best approach is for 

their state to increase renewable energy generation and has fully implemented both the mandated 

as well as voluntary increases in RE generation under that program. Commenters stated that 

imposing an additional target based on another state's RPS the EPA unfairly penalizes - or said 

another way, overburdens - Texas for acting early to develop and implement an RPS. If the rule 

is promulgated as proposed, the EPA will require substantially more RE development from 

Texas, over and above what has been accomplished, while significantly less will be required for 
96 

other states that have not yet put the effort that Texas has into developing RE resources, the 

commenters said. The flaw of simply applying another state's RPS across an entire region is 

further compounded for Texas, because EPA did not even consider or account for the efforts 

Texas has made to increase RE, the commenters concluded. 

In 1999, the Public Utility Commission of Texas (PUCT) adopted a rule, Goal for Renewable 

Energy, that sets the state's RPS based on a bill enacted by the Legislature as part of restructuring 

in Texas, the commenters said. The Texas RPS mandates the installation of 5,000 MW of new 

renewables by 2015 and set a target of 10,000 MW of renewable energy capacity by 2025, 

according to the commenters. According to the annual compliance report prepared by the 

ERCOT, the program administrator for the Texas Renewable Energy Credit Trading Program, 

Texas surpassed its 2025 target in 2009 and had 13,359 MW of renewable energy capacity (of 

which more than 12,000 MW was wind) in 2013 relative to 1999, commenters indicated. The 

RPS applies to "retail entities" in Texas: investor-owned utilities that have not unbundled, retail 

electric providers in deregulated areas, and municipal utilities and electric cooperatives that offer 

customer choice, the commenters noted. Each retail entity in Texas is allocated a share of the 

mandate based on that retailers pro rata share of statewide retail energy sales, the commenters 

said. Commenters explained that the program administrator allocates RPS requirements among 

retail entities by dividing each entity's total retail energy sales in Texas by the total retail sales in 

Texas of all retail entities, and multiplying that percentage by the total statewide RPS 

requirement for that compliance period. Commenters said that the RPS includes a voluntary 

target of 500 MW of renewable energy capacity from resources other than wind by 2015. The 

commenters explained even though the PUCT has the authority to establish alternative 

compliance payments, the PUCT has declined to do so, meaning that the 500 MW target remains 

voluntary. The PUCT does award a "compliance premium" for each non-wind Renewable 

Energy Credit (REC) generated after December 31, 2007 (see below regarding the Texas REC 

program), the commenters noted. Compliance premiums are the functional equivalent of a REC 

for RPS compliance purposes and may only be awarded to non-wind facilities that were installed 

and certified by the PUCT after September 1, 2005, commenters added. This method effectively 

doubles the compliance value of electricity generated by renewable resources other than wind, 

the commenters said. Commenters said that the PUCT also established a REC trading program 

that began in July 2001 and will continue through 2019. For each megawatt-hour (MWh) of 

qualified renewable energy that is metered and verified in Texas, one (1) REC is earned, the 

commenters explained. A retail entity must annually retire one (1) REC for each one (1) MWh 

requirement it has, the commenters added. Also, the commenters indicated that an administrative 

penalty of $50 per MWh has been established for providers that do not meet the RPS 

requirements. 

Comment 53: Commenters did not support the alternative approaches. 

Response 53: IPM projections are not the basis for building block 3 target generation levels 

expressed in the final methodology. Specific to several comments, the IPM projections 

supporting the technical feasibility and cost-effectiveness of building block 3 are no longer 

constrained by the application of the benchmark development limiter described under the 

Alternative RE approach at proposal. The final methodology is described in detail in section 
97 

V.Eof the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD 

supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, recognizing that RPSs have historically been significant drivers for RE 

development, the proposed RE approach (based on a region's average RPS) is more appropriate 

than any of the alternative approaches as described in the "Alternate RE Approach" technical 

support document and the NODA. 

Commenters stated that an adjustment to the proposed approach should also take into account the 

secondary (and even tertiary) standards which many states have. Commenters stated that using 

technical RE potential does not take into account economic constraints or projected needs for 

new capacity. Commenters stated the fact that a few states have a high development rate 

compared to technical potential does not mean that the same level of development is feasible in 

all states. Commenters stated the conditions surrounding the development in those leading states 

may be very different from the conditions in other states. Commenters stated the technical 

potential basis described in Option 1 of this technical support document creates tremendous 

burdens for some states, including New Mexico, while barely affecting other states. Commenters 

stated that using Option 1 would require that by 2030 New Mexico's RE goal would represent 

73% of total electricity sales. Commenters stated this is not remotely possible for New Mexico. 

Comment 54: Commenters objected to the EPA's use of capacity-based RPS. 

Response 54: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in section V.E. of the final rule preamble of 

the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's calculation of regional renewable energy goals is flawed because 

some state RPS are designed as capacity (MW) only standards, yet EPA assumes that these are 

energy (MWh) produced standards in their goal calculations. 

Commenters stated that the EPA states that it uses only energy-based RPS standards in assigning 

targets. Commenters stated that, because Kansas has a capacity-based RPS, Kansas was assigned 

the South Central Region's average target of 20% of generation as a default. Commenters stated 

that, besides Kansas, Texas has the only other RPS target in the South Central Region and, like 

Kansas, Texas' RPS target is capacity-based. Commenters stated that, because no other states in 

the region have RPS standards, the EPA had no energy-based RPS targets in the region that 

could establish an energy-based target for the region. Thus, the EPA used an arbitrary energybased RPS target of 20% for Kansas and the rest of the South Central Region. Commenters 

stated the Kansas Corporation Commission (KCC) estimated the amount of renewable energy 

that would count toward Kansas abatement using the Kansas RES standard of 20% of capacity. 

Commenters stated capacity is determined by taking the average peak demand from the previous 
98 

three years and, currently, the average peak demand is about 1,750 MW and is growing slowly. 

Commenters stated an extremely optimistic estimate of 20% of peak demand in 2030 would be 

1,900 MW. Commenters stated that, while Kansas's wind resources are excellent, the best 

generation sites have been taken for the most part, therefore, a realistic assumption is that 

renewable resources that count toward the RES would have a capacity factor of 35%. Given both 

of these assumptions, Commenters stated the KCC's estimate of the renewable generation that 

would count toward Kansas abatement would be 5,825,400 MWhs and, with these estimates, the 

Kansas GHG goal is 1,950 lbs./MWh. 

Similarly, commenters stated that the EPA also improperly extracts the Kansas numeric standard 

without applying the other determinates in the Kansas RPS statute. Commenters stated that in 

their opinion, the most obvious problem is that while the EPA RE target is based on additional 

energy generation to replace fossil-fuel generation, the Kansas RPS is based on increasing 

RE capacity. Capacity provides power at all times, while generation is only available when fuel 

(i.e. wind) is available to produce power, the commenters said, and added that the two are not 

comparable. In addition, the commenters said that the Kansas RPS counts renewables that the 

EPA does not, specifically hydropower. The Kansas RPS also allows subject utilities to satisfy 

the RPS by entering into contracts to purchase power generated from renewable sources in other 

states, the commenters added. Finally, those entities that are subject to the Kansas RPS and the 

Existing Unit NSPS are not the same, the commenters noted. As a separate issue, the 

commenters also said that there is a significant flaw in mandating generation as opposed to 

capacity to attain the state targets in Building Block 3. Mandating generation does not recognize 

the reality that wind is inherently unpredictable and intermittent, and ultimately entities cannot 

control how often the wind blows (i.e., wind generation), the commenters said. 

Commenters said that in developing Building Block 3, the EPA arbitrarily grouped states into six 

designated regions and set targets for the use of RE sources based on the assumption that each 

state can evolve to meet the average level of RE use in its region. Oklahoma, Texas, Louisiana, 

Arkansas, Kansas, and Nebraska are grouped together in the "South Central Region," yet 

significant differences in energy generation strategies exist across those states that render 

Building Block 3 an arbitrary, meaningless and impractical method for reducing CO2 emissions, 

the commenters said. 

Commenters added that the EPA's 20 percent renewable-use goal that the Proposed Rule applies 

to all states in the region mirrors Kansas's renewable energy standard ("RES"). However, the 

EPA does not appear to recognize that Kansas' RES goal is based on peak demand capacity 

(measured in MW) since Block 3 imposes state targets based on net electricity generation 

(measured in MWh), the commenters asserted. Capacity (MW) and generation (MWh) are two 

very different values: generation-based targets will require higher amounts of capacity to meet a 

targeted generation given that wind turbines have an operational capacity factor (annually) that is 

less than 100 percent, the commenters added. Wind in Oklahoma generally operates at about a 

40 percent capacity factor, which means that achieving a generation-based target as set in Block 

3 requires two and half times the actual turbine infrastructure, the commenters further said. 

Consistent and predictable correlations between renewable capacity (MW) and renewable 

utilization (MWh) are challenging in developing an enforceable compliance plan among utilities, 

the commenters concluded. 
99 

Comment 55: Commenters generally supported the alternative approach. 

Response 55: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the removal of the technical potential limiter. The 

final methodology is described in section V.E of the final rule preamble of the CPP and in 

chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters further added that the EPA also invites comment on an alternative approach to 

quantification of the renewable generation to support the BSER. Unlike the proposed RE 

scenario that relies on a regional application of state RPS commitments, the alternative approach 

relies on a state-by-state assessment of RE technical and market potential, the commenters noted. 

In general, the commenters supported the EPA's proposed alternative approach. Recognizing that 

states, even within a single region, have different technical and market potential considerations 

when implementing new renewable generation resources is an important concept for use in 

section 111(d) state plans, the commenters added. Commenters asserted that this approach would 

be more representative of actual state conditions than the approach formally proposed in the rule. 

The EPA should not mandate (or adopt any approach that effectively forces) states to include 

renewable energy development in state 111(d) plans, the commenters stated. 

The commenters added that, however, using an average development rate based on the top third 

(16) states as a benchmark utilizes an unsupported analytical methodology. Commenters asserted 

the EPA should use appropriate state feasibility/potential studies and apply market potential 

using robust modeling (such as IPM) to determine reasonably achievable RE generation targets 

for computing an alternative and more representative set of goals for each state. Commenters 

recommended, however, that the EPA consider using actual feasible potential hydropower for 

each state as the basis for calculating the targeted total renewable generation, as opposed to the 

greater of the calculated average development rate and each state's 2012 conventional 

hydroelectric generation. In the Alternative RE Approach TSD, the EPA states that the IPM 

model was not configured to recognize the estimated costs and market impact of new 

hydropower resources, the commenters noted. The current method, using 2012 hydropower 

generation levels, as a basis for potential new hydropower development is a significant modeling 

deficiency, the commenters added. Commenters stated that in their opinion, this method 

assumes that the cost, performance and resource availability of existing resources is comparable 

to new small hydro and low power hydro as outlined in the U.S. Department of Energy's 

hydropower feasibility assessments. Commenters stated the EPA should consider configuring the 

IPM model to utilize the estimate costs and market impact as well as feasibility for these new 

potential hydro resources for each state. Commenters concluded that if such modeling 

enhancements are not undertaken, the EPA should include the alternate approach to setting a 

renewable target in the final rule and compute an alternative set of goals for each state. 

Comment 56: Commenters supported a cap on in-state RE generation. 
100 

Response 56: The EPA has adopted a regional approach to building block 3 that obviates the 

need for a state-level cap on RE. 

The following are summaries of the specific public comments under this comment: 

Commenters supported the EPA's proposal (79 FR 34868) to cap the amount of new renewable 

electricity generation assumed in in each state's building block #3 target so that the new 

renewable electricity generation target in building block #3 does not exceed the electricity 

generation from the existing affected EGUs in the state. Commenters stated that placing a cap on 

new renewable energy generation in a state will help ensure that EPA does not set renewable 

energy targets for states that cannot be supported by the state's electricity grid. 

Comment 57: Commenters stated it is imperative for building block #3 that the EPA rely upon 

renewable electricity generation for reporting compliance with the interim and final emission 

targets rather than renewable electricity consumption. 

Response 57: Building block 3 is quantified and expressed in terms of renewable generation, not 

consumption. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA's 111(d) draft rule uses renewable electricity generation, not 

consumption (or any metric of renewable energy credits (RECs)), for creating the 2012 baseline 

renewable electricity figures. Commenters stated these generation-based figures are then 

extrapolated to create each state's interim and final building block #3 targets. Commenters stated 

it is important that EPA recognize that renewable electricity generation and consumption are not 

the same for states because of the interstate trade in renewable electricity. Commenters stated 

some states are net importers of renewable electricity while others, such as Montana, are net 

exporters. Commenters stated the method for states to comply with the targets should reflect the 

method for setting the targets; i.e., states should be able to use renewable electricity generation to

meet the generation-based target. Commenters stated that, if EPA intends to rely on renewable 

electricity consumption for compliance, consumption-based targets should be set. 

Commenters stated a further reason for using renewable electricity generation rather than 

consumption in calculating building block #3 and in demonstrating compliance with the interim 

and final emission targets is that the location where renewable electricity is generated is easier to 

track than where it is consumed and will provide EPA with larger CO2 emission reduction 

figures than using state-specific renewable electricity consumption figures. Commenters stated 

the U.S. Energy Information Administration (EIA) has very complete and exact data on where 

renewable generation is located, so tracking the location of renewable generation is very easy. In 

contrast, Commenters stated total U.S. renewable electricity consumption that is attributable to 

any one state is, in reality, significantly less than total renewable electricity generation for 

several reasons. Commenters stated that, according to the National Renewable Energy 

Laboratory (NREL), 48.6 million MWh of renewable electricity were voluntarily consumed by 

residential, commercial, and industrial customers in 2012, but only a portion of this voluntary 

renewable electricity consumption, roughly a third, was attributable to any one state. 
101 

Commenters stated that approximately 30 million MWh of renewable electricity consumption, 

15% of the total renewable electricity generation in the country in 2012, likely was not 

attributable to a particular state even though it was officially "consumed." Commenters stated 

much of this discrepancy is because of the unbundled REC purchases of large corporations 

intended to meet a portion of their total corporate electricity consumption that span many states. 

Commenters stated millions of MWh of RECs generated in 2012 are likely to have gone unsold 

during the year as total renewable electricity generation exceeded 218 million MWh in 2012 

but compliance and voluntary renewable electricity markets combined totaled less than 135 

million MWh, leaving 83 million MWh of renewable electricity generation unaccounted. 

Commenters stated some of this 83 million MWh likely was purchased and "consumed" by 

electricity providers that are not subject to state RPS regulations but millions of MWh of RECs 

were also likely banked by electricity providers and REC brokers for RPS compliance or sale in 

future years. Commenters stated that, as a result, neither the states, EPA, nor the US Department 

of Energy have an accurate accounting for how many MWh of renewable electricity were 

officially "consumed" in 2012, both nationally and for individual states. Commenters stated that, 

without knowing exactly what renewable electricity consumption in each state was in 2012, EPA 

lacks a firm basis for projecting what achievable levels of renewable electricity consumption will 

be for each state between 2020 and 2030. Commenters stated REC markets can be complicated 

as some electricity consumers buy and consume energy bundled with RECs, others just buy the 

RECs while consuming other electricity, while others buy the RECs in order to retire them 

without any electricity consumption (such as environmental groups). Commenters stated this 

could lead to many difficult challenges in tracking RECs and determining which states have 

claim to the avoided carbon emissions associated with them. 

Commenters stated that, even if it is assumed that EPA could effectively quantify a baseline for 

renewable electricity consumption in each state, every state's building block #3 target will need 

to be recalculated if EPA continues to rely upon renewable electricity consumption for 

compliance in the final rule instead of generation. Commenters stated the reason for this is to 

account for the discrepancy between each state's renewable electricity generation and 

consumption. Commenters stated the national total amount of reported renewable electricity in 

2012 will have to be revised downward to account for the disparity between reported 2012 

renewable electricity generation and 2012 renewable electricity consumption. Commenters stated 

the smaller baseline 2012 renewable electricity consumption figures for the states will result in 

smaller 2020-2030 renewable electricity consumption figures and a smaller reported reduction in 

total CO2 emissions for building block #3 (unless EPA also increases its renewable electricity 

growth assumptions). 

Comment 58: Commenters expressed concern regarding what RE generation qualifies for 

compliance purposes. 

Response 58: Incremental generation from each of the RE technologies under building block 3 

• utility-scale solar PV, concentrating solar power, onshore wind, geothermal, and 

hydropower 
102 

• are fully creditable under compliance. Refer to section V.A. of the final rule 

preamble of the CPP for additional detail on the use of non-BSER measures to 

achieve standards of performance. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that the EPA provide additional guidance to states on RE eligibility 

such that states may determine the extent to which existing RPS eligibility standards align with 

111(d) eligibility standards and therefore prospective and historical eligible reductions from RPS 

programs. Commenters stated that, currently, states can review EPA's state goal calculations and 

cost expectations to get a sense of what features and stipulations for RPS and other REC-based 

compliance measures will be needed to meet EPA's cost expectations, but the EPA should 

consider providing baseline qualifications for RE used in a state plan, including banking, age of 

facility, resource types, sourcing, use of unbundled RECs, etc. 

Commenters stated the EPA must assure states that existing RPS programs and any such new 

programs can be fully utilized in state 111(d) plans to meet CO2 reduction goals including 

waste-to-energy. Commenters stated the EPA must assure states that existing RPS programs and 

any such new programs can be fully utilized in state 111(d) plans to meet CO2 reduction goals 

including renewable energy credit qualification and accounting these programs afford. 

Commenters stated this will ensure the full benefit or credit of renewable energy including 

waste-to-energy (WTE) can be used in state plans. Commenters stated this will not only maintain 

alignment with existing state RPS programs, but also with Federal statutes and policies that 

already provide WTE the full renewable energy benefit or credit including Section 45 of the 

federal renewable energy production tax credit legislation. Commenters stated EPA confirmation 

that State RPS programs can be included in 111(d) state plans would ensure WTE continued 

ability to compete in wholesale markets against other renewable sources of electricity and 

provide needed flexibility required for states to achieve their CO2 emission performance goals 

while minimizing electricity cost impacts when 111(d) plans are implemented. Commenters 

stated WTE facilities play a vital role in solid waste management but in many areas operate in 

extremely challenging markets for waste disposal and electricity (dominated by inexpensive 

natural gas). Commenters stated inclusion of WTE in 111(d) plans and full credit for its power 

generation ensure WTE facilities will continue in their vital waste management role while 

playing a major role in reducing CO2 emissions in the Power Plant sector to help states and EPA 

reach the performance goals. Commenters stated that, with more than 63% of the nation's waste 

being landfilled, there are many opportunities to deploy new WTE facilities as landfill diversion 

targets increase in, industry and cities and municipalities. Inclusion of WTE in 111(d) will ensure 

the viability of WTE in renewable power generation and solid waste management. 

Commenters stated the EPA should calculate the goal in a manner that is consistent with 

recognized compliance measures. Commenters stated that, as currently drafted, the EPA appears 

to have calculated the goal on the basis of statewide renewables (in 2002 and 2012); however, 

these projects are not all interconnected with affected EGUs and therefore would not qualify as 

standards of performance "for" affected stationary sources. Commenters stated that, if the rule is 

applied to Alaska, while EPA cannot require off-grid projects, the EPA should allow states to 

count the carbon dioxide emission reductions achieved in rural locations (not interconnected with 
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an affected EGU) towards compliance. Commenters stated this principle applies to both the RE 

and EE building blocks and is discussed below as an in-state renewable energy credit (REC). 

Commenters stated Alaska should receive credit for renewable projects that came online between 

2012 and June 18, 2014. Commenters noted the EPA states that State Plans cannot claim credit 

for reductions in CO2 emissions resulting from pre-existing programs, measures etc. unless the 

"action" leading to the reduction took place after the date of the proposal - June 18, 2014. 

Commenters stated the EPA takes the position that this provision "would not apply to existing 

renewable energy requirements, programs and measures because existing renewable energy 

generation prior to the date of the proposal of the emission guidelines was factored into the statespecific CO2 goals as a part of building block 3." Commenters stated the proposed regulatory 

language creates an ambiguity that would be significant to the State of Alaska: Eva Creek Wind 

commenced generation in 2013; if the final rule is applied to Alaska, EPA should clarify that all 

RE projects that commenced generation between December 31, 2012 and June 18, 2014 may 

also count toward state compliance. 

Commenters supported the position that new and incremental hydroelectric generation may be 

credited to compliance. Commenters stated there is some ambiguity in the materials overall and 

requested an unambiguous statement regarding how hydroelectric will be treated if the proposal 

advances. Commenters asked the EPA to clarify that new renewable hydroelectric generation, 

and upgrades to existing hydroelectric generation, would be a qualifying adjustment to the state's 

emission rate. 

Commenters stated the EPA should also credit states with actions taken to replace hydroelectric 

generation capacity lost because of federal permitting requirements. Commenters stated that, for 

example, the generation capacity of Chugach's Cooper Lake Hydroelectric project will be 

reduced substantially, by about 50%, due to a FERC relicensing requirement to divert water for 

fisheries restoration; to offset this loss, Chugach and the state have invested substantial funds to 

divert another stream, Stetson Creek, into Cooper Lake. Commenters stated the full measure of 

generation capacity made possible by the Stetson Creek diversion should be treated as an 

incremental gain (even to the extent it replaces the incremental loss). 

Commenters stated the EPA should also allow compliance credits for actions that make more 

renewable generation available to offset generation from "affected EGUs." Commenters stated 

that, for example, the amount of Bradley Lake hydroelectric power that can move north to the 

Anchorage and Fairbanks load centers is limited by the capacity of the transmission lines; any 

future upgrades to the transmission system that allow generation at "affected EGUs" to be 

replaced by renewable (or less carbon intensive) generation should be credited against emission 

target. 

Commenters stated the EPA should also allow compliance credit for electric generation from 

landfill gas. Commenters stated that using landfill methane for electric generation captures 

significant efficiencies and reduces overall GHG emissions. 

Commenters stated that upgraded hydroelectric generation which occurs after the baseline period 

should be included in state compliance demonstrations. Commenters stated the EPA failed to 

consider all zero carbon emitting resources available in Kentucky with the exclusion of new or 
104 

upgrades hydroelectric energy. Commenters stated that, in this case, hydroelectric energy 

resources operated by LKE are first to dispatch when available and thus would off-set fossil 

emissions. 

Comment 59: Commenters agreed that existing measures should be allowed to count during the 

compliance period. 

Response 59: In the final methodology, building block 3 is quantified as RE incremental to the 

BSER data year of 2012. The standards of performance reflect this adjustment to incremental RE 

from total RE, which is more consistent with the concept of replacing affected source generation. 

The following are summaries of the specific public comments under this comment: 

Commenters supported the EPA proposal to allow existing solar measures to count towards 

compliance, but requested that EPA provide clear guidance on this in the final rule. Commenters 

interpreted the EPA's proposal regarding existing measures to mean that state measures which 

exist after the June 18, 2014 proposal date can be used to drive emissions reductions during the 

compliance period (2020-2030). However, commenters stated that because building block 3 was 

factored into determination of the state goals, existing renewable energy measures and actions 

can count if implemented prior to June 18 2014. Therefore, commenters stated that the MWh 

from renewable energy capacity installed pursuant to an existing measure or program any time 

prior to 2020 can be counted towards compliance during the compliance period (2020-2030) if 

the existing measure is included in a state's implementation plan. Commenters provided, for 

example, if 1000 MW of solar capacity was installed in 2013 pursuant to an RPS and the state 

includes the RPS in its compliance plan, then emissions displaced by MWh from the 1000 MW 

of solar capacity during the compliance period (2020-2030) can count towards the state's 111(d) 

compliance requirements in that period. 

Commenters agreed that existing measures should be allowed to count during the compliance 

period, and can help states meet interim compliance goals set forth in the original proposal. 

Commenters stated that this is consistent with EPA's interpretation of the BSER as including 

measures taken by states to reduce emissions across the electric system. Further, commenters 

stated that this is consistent with the cooperative model promoted by Section 111(d) and the 

Clean Air Act, which provides states with significant flexibility in determining the best method 

for reducing emissions. Commenters noted that allowing states to count existing measures 

towards compliance recognizes the investment already made by states towards emission 

reduction, and will allow states to carry forward programs that are in motion without distorting 

current markets. 

Commenters noted that during the comment period there has been significant confusion 

regarding exactly which existing renewable energy measures can be counted towards compliance 

and when credit will be given. Commenters stated that this confusion is already threatening 

potential emission reductions by slowing project development because states and EGUs are 

uncertain which actions will count towards compliance, and when these actions can count. 

Therefore, while commenters supported the proposal put forth by the EPA as interpreted above, 
105 

commenters requested that in the final rule the EPA more clearly state which actions can count 

towards compliance and when such actions count. 

Commenters stated the renewables target should continue to include existing renewable 

resources and existing renewables must continue to count for compliance with state emission 

goals. Commenters supported the EPA's proposed approach of including existing non-hydro 

renewable generation in its calculation of each state's base-year emissions and allowing states to 

include existing renewables for compliance purposes beginning in 2020. Commenters stated this 

approach appropriately recognizes states like Nevada with a long history supporting the 

installation of renewable energy. Commenters stated that, regardless of the reason for 

development, renewable energy generation achieves meaningful greenhouse gas emissions 

reductions by augmenting or displacing more carbon-intensive resources. Commenters stated 

excluding existing renewables would result in significantly increased costs and would exacerbate 

many issues raised herein related to increased penetration of renewables and the need to develop 

new resources in accordance with demand. Commenters stated it is therefore critically important 

that EPA retain in its final rule the flexibility for states to utilize existing renewable resources for 

compliance purposes. 

Comment 60: Commenters asked for guidance regarding non-ratepayer compliance options. 

Response 60: The use of non-BSER measures, such as energy efficiency and distributed 

generation, to achieve standards of performance is described in detail in section V.A of the final 

rule preamble of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that while EPA's draft rule encourages the use of energy efficiency and 

renewable energy as compliance options, it provides little guidance and limited support for the 

inclusion of non-ratepayer compliance options operated outside of conventional investor-owned 

utility programs overseen by state public utility commissions. 

Commenters expressed concern that in not adequately addressing these options, the EPA is 

making it difficult for states to recognize emissions reductions resulting from the billions of 

dollars in annual energy investments in energy efficiency and renewable energy investments 

made by municipally-owned electric utilities and cooperatively owned utilities. Commenters 

stated that in just one such example, the Austin, Texas City Council approved Austin Energy's 

investment to achieve 800 MW of energy efficiency and 200 MW of solar over the next several 

years. 

Comment 61: Commenters expressed concern that a state's renewable potential is calculated 

using widely-recognized renewable generation sources such as biomass and hydropower, but 

EPA does not allow these and other sources to be used for compliance. 
106 

Response 61: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, in which the only RE technologies used to set the standards of 

performance are eligible for compliance. The final methodology is described in section V.E of 

the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD 

supporting the final CPP and the use of non-BSER measures to achieve standards of 

performance, such as biomass, is described in section V.A of the final rule preamble of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the shortcomings in the renewable assumptions are multiplied by 

determining a state's renewable potential using widely-recognized renewable generation sources 

such as biomass and hydropower, but EPA does not allow these and other sources to be used for 

compliance. Commenters requested that the renewable provisions in Building Block 3 be revised 

to: (1) confirm that biomass is a renewable resource eligible for compliance and (2) revise state 

goals to exclude from the standard-setting those renewable resources that are not eligible for 

compliance. 

Commenters stated that, while there are a wide variety of generation technologies that should be 

eligible measures for compliance in state plans, the EPA should not include all of these 

technologies in BSER for the purposes of setting state goals. Commenters stated that each of the 

technologies contemplated in building block 3 has its own unique characteristics and potential 

within each state. Commenters asserted that States and utilities within the states are not starting 

from scratch, they are continuing on a spectrum of investment and portfolio diversification 

choices that ratepayers will shoulder-this must be taken into consideration in EPA's final 

guidelines. Commenters stated the EPA should refrain from advocating, even inadvertently, for 

one low-carbon generation choice over another. 

Commenters stated the EPA's failure to reduce the goal based on its limitation of compliance 

options results in an even more stringent and unachievable goal for the Southeast region. 

Commenters asserted that state RPS targets designed to include existing hydro units are unfairly 

used to establish regional renewable energy goals in building block 3 that exclude existing hydro 

generation units. Commenters stated most states' RPS include existing and/or new hydroelectric 

generating units as eligible resources for demonstrating compliance and the contribution of 

existing hydroelectric units is included in the "effective" 2020 RPS rates that EPA used to 

calculate the renewable energy goals for each region. Commenters stated that, in using these 

regional targets to develop regional growth rates and individual state renewable goals in building 

block three, EPA relies on baseline renewable generation from 2012 that excludes hydroelectric 

generation. Commenters stated that, for the purpose of calculating a baseline level of RE 

generation in each state, the EPA adopted a broad interpretation of RE generation to include any 

non-fossil renewable type, with the exception of generation from existing hydroelectric power 

facilities. 

Commenters stated the misalignment in EPA's proposal between the renewable generation 

reflected in a state's goal-setting calculation and the renewable generation available for 

compliance with the emission goals must be corrected. 
107 

Comment 62: Commenters indicated that CPP should be revised to take into account that 

municipal utilities have limited RE options. 

Response 62: The EPA believes all affected sources have the opportunity to participate in 

building block 3, as described in section V.E of the final rule preamble of the CPP. 

The following are summaries of the specific public comments under this comment: 

 Commenters said that while many municipal utilities are committed to investing in renewable 

electricity generation resources, they have experienced challenges because of their small size and 

tax exempt status. Commenters stated municipal utilities do not receive the production tax credit 

for wind energy or the investment tax credit for solar energy. Commenters added that another 

barrier to investing in renewable energy for municipal utilities is their relatively small size. 

Commenters stated most developers are building wind farms on a scale much larger than what is 

needed by a single municipal utility. 

Commenters said there are many barriers to renewable investments for municipal utilities and the 

rule should be revised to reflect these challenges. Commenters stated that, as a small, municipal 

utility, it does not have the same universe of renewable options as other utilities in the state. 

Commenters indicated that it does not have a large customer base with which to spread the 

higher cost of renewable investments. Commenters stated that municipal utilities cannot take 

advantage of Federal incentives for wind development, like the production tax credit, which 

makes wind projects more costly for utilities like theirs. 

Comment 63: Commenters supported the potential for additional wind energy. 

Response 63: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of wind cost and performance 

assumptions. The final methodology is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the draft plan should be more ambitious in terms of setting targets and dates 

for reductions in carbon emissions. Commenters stated they see a significant missed opportunity 

to fully harvest the tremendous benefits available to increased deployment of wind energy. 

Commenters stated 35 percent wind energy by 2050 is ambitious, but achievable. Commenters 

stated that later this year the Department of Energy will release an updated version of its wind 

vision report which provides a roadmap for getting to 35 percent wind energy by 2050 which 

would avoid $520 billion in damages from climate change, save $16 to 103 billion in public 

health and environmental costs and save consumers about 3 percent on their electricity costs. 

Commenters stated the EPA's final plan should take this increase in its carbon emission 

reduction targets for 2030 to reflect wind energy potential contributions documented by DOE. 

Commenters stated wind energy is widely available, affordable, reliable, and it's already 

providing meaningful carbon reductions. Commenters stated the industry has shown the ability 
108 

to install a lot of wind capacity in a short amount of time: since the end of 2005, on average, the 

U.S. has doubled its wind energy capacity every 36 months, including a record 13 gigawatts in 

2012. Commenters stated they currently get about 4 percent of their electricity from wind energy 

nationwide. 

Commenters stated that, while they support the rule, the EPA's assumptions related to renewable 

energy are very conservative relative to the amount of timely and cost-effective reductions truly 

available from renewable sources and that the final rule can and should require emissions 

reductions that could go further and faster than proposed in the draft rule. Commenters stated the 

wind energy industry is already producing significant carbon emissions reductions while 

lowering costs to consumers and benefitting the economy. Commenters stated the current fleet of 

wind turbines, for example, reduced carbon emissions in 2013 by nearly 127 million tons, the 

equivalent of reducing power sector emissions by more than 5 percent when compared to 2011. 

Commenters stated wind technologies evolved significantly in the last 15 years. Commenters 

cited DOE and stated the average nameplate capacity of newly installed wind turbines in 2013 

was 1.87 MW, 162 percent higher than in 1998-1999; average hub heights installed in 2013 was 

80 meters, 45 percent greater than in 1998-1999; average rotor diameter in 2013 was 97 meters, 

103 percent greater than in 1998-1999; and larger turbines are driving higher capacity factors for 

wind projects and allowing for increased generation from these resources. 

Commenters estimated that distributed wind (DW) can produce multi GW of electricity in 

roughly the same timeframe the EPA is discussing for emissions reductions in the proposed rule, 

which is on par with offshore wind power's potential, for example, and other technologies. 

Commenters stated the EPA underestimates the potential of wind energy in the Southeast. 

Commenters suggested that the IPM model results under EPA's Alternative Approach may 

underestimate the electricity from wind power in the year 2030. Commenters stated that, while 

IPM shows approximately 5,671 gigawatt hours of electricity from wind power in the year 2030 

are attributed to Arkansas, Georgia, Kentucky, North Carolina, South Carolina, Tennessee and 

Virginia, the wind energy already being or planned to be purchased by southern utilities from 

out-of-state projects results in about 8,000 GWh of wind energy (based on a 35% capacity 

factor). 

Commenters suggested that the Southeastern states have out-of-state wind energy resources 

available. Commenters stated that newly proposed high voltage direct current transmission 

projects could substantially increase the amount of low-cost wind energy resources available to 

southern states. Commenters stated two large-scale HVDC projects have been proposed to 

connect the Plains' strong wind resource to the South's strong energy demand: the Plains & 

Eastern Clean Line is an HVDC project designed to connect up to 3.5 gigawatts (GW) of wind 

energy from the plains to Tennessee and the South beyond and the Southern Cross is an HVDC 

project designed to connect up to 3 GW of wind energy from Texas to northern Mississippi, and 

into other parts of the Southeast. Commenters stated that, due to the higher wind speeds, the cost 

of wind energy resources from these HVDC projects will be extremely cost competitive. 

Commenters stated that several utilities throughout the Southeast have already purchased wind 

energy via existing transmission lines and these purchases are significant because most states in 

the south do not require utilities to purchase renewable energy via renewable portfolio standards. 
109 

Commenters stated some utilities have made the wind energy purchases because costs are less 

than utility avoided costs. Commenters stated wind power purchase agreements are typically 

secured for twenty years and provided a list of utility companies in the south purchasing wind 

energy. 

Commenters stated the costs associated with onshore wind deployment are overestimated by 

EPA. Commenters stated that, while the EPA cost assumptions for onshore wind generation 

begin at $2,258 per kW in the year 2016 and decline to $1,864 per kW by the year 2050, a new 

Lawrence Berkeley National Laboratory report documents recent low wind-power prices and 

overall cost reduction trends for the wind industry. Commenters stated that, in 2013, average 

power purchase agreement (PPA) prices reached $25 per MWh. Commenters stated that, since 

many of the installed projects last year were able to qualify for the federal Production Tax Credit 

(PTC), or a similar incentive, the reported PPAs may reflect a reduction of approximately $15 

per MWh when taking into consideration the PTC. Commenters stated that average PPA prices 

fell approximately 64% between 2009 ($70 per MWh) and 2013 ($25 per MWh). Commenters 

stated that, overall, wind energy prices are declining due to lower wind turbine prices and higher 

wind turbine performance (in terms of capacity factor output). Commenters stated recent turbine 

prices have been in the $900-$1,300 range per kW of generation capacity, with total installed 

average costs of approximately $1,630 per kW in 2013. Commenters stated that operations and 

maintenance costs associated with newly constructed wind farms dropped from $23 per MWh 

(or $55 per kW of installed capacity) in the 1990s to about $9 per MWh (or $23 per kW of 

installed capacity) for projects developed since 2010. 

Commenters stated wind turbine technology has advanced significantly since modern turbines 

were first designed in the 1980s. Commenters stated multi-megawatt machines, taller turbine hub 

heights and longer blades have greatly contributed to increased power generation and lower 

costs. Commenters stated wind farm projects have now been proposed in every state in the 

South. Commenters stated the particular type of turbines likely to be deployed in the South are 

Class III turbines, based on International Electrotechnical Commission (IEC) Standard 61400. 

Commenters stated Class III turbines are designed to operate in lower wind speed areas and 

could achieve capacity factors of 40-50% in areas across the South. 

Comment 64: Commenters indicated that, while wind resources are better in the SPP Plains 

states and along the Gulf coast than in Arkansas, a significant portion of Arkansas' renewable 

requirement will probably be met with imports of wind from the west and south. 

Response 64: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of wind cost and performance 

assumptions. The final methodology is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated those imports can be concentrated in off-peak hours and seasons, as needed 

to accommodate transmission constraints, with local Arkansas fossil generation carrying more of 

the load on peak. Commenters explained that Arkansas has major transmission interconnections 
110 

with the Gulf coast, through Entergy's transmission system, and with the wind-rich SPP. 

Commenters stated about 30% of Arkansas load (SWEPCo, OG&E, Empire District, and the 

Carroll, Ozarks, Arkansas Valley, and Southwest Arkansas coops) is in SPP, and the state should 

have little difficulty sourcing Plains wind energy. Commenters said the Arkansas utilities have 

significant amounts of out-of-state wind capacity in service or under contract, including about 

200 MW for the Arkansas electric coops, 500 MW for SWEPCo (of which about 100 MW would 

be attributed to Arkansas), and 800 MW for OG&E (of which about 80 MW would be attributed 

to Arkansas). The Plains and Eastern Clean Line would deliver 3,500 MW of power to converter 

stations in central Arkansas and the Memphis area over a high-voltage DC line from the windrich Oklahoma Panhandle and surrounding areas of the Texas Panhandle and Kansas, 

commenters claimed. Completion of the project is expected in 2018, well before the compliance 

period under the Plan, the commenters noted. The central-Arkansas converter station would 

deliver 500 MW, the commenters noted. In addition, commenters stated Arkansas can access 

some of the 3,000 MW to be delivered in the Memphis area over a number of transmission ties 

listed by the commenters. Commenters stated the reduced utilization or retirement of the various 

fossil plants would free up capacity on the lines to bring capacity and energy from Memphis to 

Arkansas's load centers. Commenters stated the 500-MW converter station, delivering wind 

energy at a 40% capacity factor, would meet EPA's renewable target through 2025, even without 

any in-state wind, solar, or hydro, or imports over the existing alternating-current transmission 

system or from the Memphis-area converter. 

Commenters said that some commenters vastly overstate the costs of renewable energy in 

Arkansas. Commenters cited to MISO which shows the renewables costing $237/ton of carbon 

reduction, implying a renewable cost of $250/MWh at EPA's estimate of the Arkansas coal 

emission rate after the Block 1 heat-rate improvement, or about $100/MWh if the wind is 

backing down NGCCs. Commenters stated that, since utilities have been purchasing wind energy 

at $50/MWh or less, and since wind energy saves on fuel, variable O&M, and capacity costs, 

MISO's claimed costs of renewables are vastly overstated. Commenters said that wind imports 

appear to be a low-cost resource, and provided the following examples: 

• Austin purchased 300 MW of wind in February 2014 at about 2.6 - 3.6 

cents/kWh; 

• SWEPCo purchased 359 MW in January 2012 that were "expected to slightly 

lower SWEPCo's projected overall cost to customers;" 

• Public Service of Oklahoma contracted for 600 MW of wind in October 2013 and 

said, "Estimates show the agreements will reduce customer costs by $53 million 

in the first year, with annual savings growing over the 20-year length of the 

contracts;" 

• in September 2012, Alabama Power purchased 400 MW from wind farms in 

Oklahoma and Kansas under a "20-year contract for wind [that] locks in a price 

for power that's lower than it could cost the company to generate it;" 
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• the Annual Economic Impacts of Kansas Wind Energy 2014 Report reported that 

power from the 2012 wind farms at Ironwood and Post Rock cost $3.5 cents/kWh; 

and 

• the DOE's 2013 Wind Technologies Market Report (August 2014, Figure 46) 

reports wind contract prices for the Interior region (including Oklahoma, Kansas, 

and the Texas Panhandle) falling from about 3.5 cents/kWh for 2011 contracts to 

about 3 cents/kWh in 2012 and 2 cents/kWh in 2013. 

Commenters said that Arkansas is part of a vigorous multistate power market, as demonstrated 

by the overlap of service territories with state lines, by the out-of-state ownership of many 

Arkansas power plants, and by the participation of the Arkansas utilities in the SPP and MISO 

energy markets. Commenters explained especially under the mass-based compliance approach, 

renewables procured anywhere in the interconnected regions will contribute to Arkansas's 

compliance, so long as they reduce the operation of the fossil-fired power plants. 

Comment 65: Commenters expressed concerns regarding technical performance of wind 

turbines. 

Response 65: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of wind cost and performance 

assumptions. The final methodology is described in section V.E of the final rule preamble of the 

CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters indicated that there are technical performance issues associated with wind turbines 

that need to be investigated before the EPA can assume that environmental dispatch in favor or 

rapid installation of wind power is possible. 

Commenters said that, there are challenges to the deployment of distributed wind power at the 

State level. Commenters said, there are often permitting barriers to distributed wind power 

deployment. Commenters said, permitting turbine structures can be onerous and take longer than 

they should because local jurisdictions are focused on the permitting and environmental impacts 

of much larger, utility-scale wind farm installations. Commenters said, EPA should ask states to 

specify what they are doing to streamline permitting for appropriately placed distributed wind 

turbines (and other relevant structures). Commenters said, EPA should consult with DOE and the 

Federal Energy Regulatory Commission about this ongoing permitting issues as well, seek their 

input and assess whether there are actions they can take to support "model permitting" at the 

State and local levels. 

Commenters said that, another challenge is the avoided costs under the Public Utility Regulatory 

Policies Act (PURPA), because many distributed wind power projects around the country are 

developed as "Qualifying Facilities" under PURPA. Commenters said, utilities sometimes 

artificially reduce the avoided cost calculations by using historical costs rather than "next added 

increment" costs as referenced in Section 210. Commenters said, the effect is that distributed 
112 

wind power installations sized above net metering limits get paid unfairly low returns for their 

excess generation. Commenters said, the impacts can be significant in many distributed wind 

power markets because there is considerable excess generation during peak months of the year. 

Commenters said, low avoided costs tend to drive down the sizing of a distributed wind power 

system so as to minimize excess production, reducing financial returns and environmental 

benefits. Commenters said, states, as part of their implementation plans and corresponding 

compliance reporting, ought to review avoided cost filings of local utilities to confirm they are 

truly reflective of the costs of building new power plants. 

Comment 66: Commenters expressed concern that the Proposal overestimates the potential for 

RE in WV. 

Response 66: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both section V.E of the final rule preamble of the CPP and 

in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters estimated that the renewable energy building block, representing 52% of West 

Virginia's reduction requirement, would translate to the construction of approximately 2,200 new 

two Megawatt wind turbines across the Mountain State. Commenters stated this is simply 

implausible given the constraints on siting wind energy capacity in West Virginia, as well as the 

need to provide transmission linkages and back-up natural gas generation capacity. 

Commenters expressed concern that, in West Virginia, the EPA's proposal overestimated the 

potential for additional wind farm development. Commenters stated that additional wind farm 

development is impractical due to mountainous terrain, contentious permitting history, private 

ownership of lands, and cost. Commenters also stated a considerable share of West Virginia's 

potential wind is already developed. Commenters stated there are only two wind farms in West 

Virginia with any near-term development potential and these could contribute only 6.7 percent to 

the state's RE goal as advanced by the proposed regulation. Commenters stated that, based upon 

the existing capacity factor (25.2 percent), West Virginia would need a wind capacity of 4,654 

MW to generate the target goal of 10,273,036 MWh. Commenters stated this would require an 

additional 4,070 MW of wind capacity to be installed from 2020 to 2030 in West Virginia, which 

is nearly seven times the state's current capacity. Commenters stated Industry estimates that in 

2012, a utility-scale wind turbine costs $1.3 million to $2.2 million per MW of nameplate 

capacity installed and, given the state's mountainous terrain, the cost in West Virginia would be 

at the high end of that range, or an overall $9 billion investment to support the EPA goal. 

Commenters stated that, while recent studies by National Renewable Energy Laboratory (NREL) 

and others highlight the wind potential, there is much more to a wind project than access to 

favorable wind speeds. Commenters stated that, to draw an erroneous conclusion from wind 

maps that West Virginia is deficient in wind development does not consider development issues 

confronted by the wind industry. Commenters stated the state's mountainous terrain with steep 
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hillsides presents significant competitive challenges. Commenters stated the fact that existing 

wind projects take advantage of formerly surface-mined lands speaks to the development costs of 

leveling land and putting in new roads to allow for ongoing maintenance. Commenters stated 

wind development remains a contentious energy source in West Virginia. Commenters stated 

that, while national environmental groups such as the Sierra Club and the Union of Concerned 

Scientists support wind development, local environmental groups such as the West Virginia 

Highlands Conservancy and Friends of Blackwater are opposed. Commenters stated West 

Virginia encourages environmentally responsible wind projects, but history teaches us that there 

will be significant opposition to the expansive level of development that would be needed to 

meet the EPA Building Block 3 goal using wind generation. 

Commenters referred to a report from the NREL that assesses the land-use requirements for 

modern wind power plants. Commenters stated three wind farms in West Virginia were 

identified with an average total area per unit capacity of 14.05 hectares per MW. Commenters 

stated the 4,070 MW wind capacity West Virginia would need to satisfy its target goal would 

have a total area impact of 57,184 hectares, or 571.8 km2, which represents one percent of the 

land within West Virginia's state boundaries. Commenters stated the fact that over 80 percent of 

the surface area in the state is privately owned represents a significant barrier to additional wind 

power development because the State cannot force land owners to develop this potential 

resource. Commenters stated that, considering that the practical locations for wind farms are 

along the front range of the Allegheny Mountains in the northern and central eastern counties of 

the state, the total area impact would be close to four percent of the total land within those areas 

of West Virginia. Commenters stated that, in 2010, NREL performed a study to determine the 

wind energy potential of each state and that NREL determined that the wind energy potential for 

West Virginia is only 1,883.3 MW of installed capacity. Commenters stated this is 1,300 MW of 

additional capacity that could potentially be developed. Commenters stated that, if wind 

resources in West Virginia were to be developed to NREL's estimated potential (an additional 

2,869,776 MWh over currently operating wind projects at a 25.2 percent capacity factor), the 

State would still require an additional 7,403,260 MWh of electric generation from another 

renewable resource to meet EPA's proposed goal. Commenters stated that, compared to other 

states, a considerable share of West Virginia's potential wind is already developed and the state 

has the second highest amount of potential wind capacity in place in the region. 

Commenters did not agree with the EPA that West Virginia can grow its renewable energy 

output from the current 4% of total electric generation to 14%. Commenters stated that, when the 

EPA's numbers were examined in the WVU Discussion Paper, however, it became clear that 

growth to 14% was unreasonable. Commenters stated the WVU Discussion Paper found that 

even a more modest 7% increase would be difficult to attain. Commenters stated West Virginia 

currently has a wind generation capacity of 583 MW from the state's 327 wind turbines currently 

in operation. Commenters stated wind turbines need to be strategically placed in order to actually 

capture wind and in West Virginia--one of the 10 smallest states in the U.S. by size--the amount 

of land suitable for wind turbine placement is a mere 0.60% of the state. Commenters stated that, 

in order to produce the excess wind energy required by Block Three, West Virginia would need 

to add 1,046 additional wind turbines to 0.60% of the land in the state, which equates to 

approximately 145 square miles of suitable land for wind turbine placement. Commenters stated 

West Virginia, the Mountain State, would no doubt lose a great deal of its natural beauty if every 

mountain were topped with multiple wind turbines. Commenters stated these concerns are 
114 

backed by a recent policy brief from the Union of Concerned Scientists. Commenters stated that 

despite this policy brief's support of the Clean Power Plan, it found that West Virginia was one 

of four states where EPA's renewable projections were far greater than what they projected was 

possible. 

Comment 67: Commenters stated the EPA has not demonstrated the feasibility of adding, in the 

amounts EPA proposes, to the substantial amount of wind generation already occurring in Texas. 

Response 67: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both section V.E of the final 

rule preamble of the CPP and chapter 4 of the GHG Mitigation Measures TSD supporting the 

final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated Texas generates more electricity from wind than any other state and is 

already utilizing the most productive wind sites for generation. Commenters stated that, by 2030, 

EPA's building block 3 renewable goal for the state of Texas is approximately 86 million 

megawatt-hours, a 153% increase above 2012 levels, which would require over 31,000 MW of 

total renewable capacity (an additional 19,000 MW over existing renewable capacity). 

Commenters stated the EPA fails to recognize that sites for future wind generation would be 

lower producing sites as compared to existing wind generation. Commenters stated the EPA's 

building block 3 proposal does not accurately account for the future cost of utilizing these new 

sites, including transmission build-out that would be needed to support the amount of additional 

wind and renewable generation required under building block 3. 

Comment 68: Commenters expressed support for solar energy. 

Response 68: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. The EPA has maintained distributed generation technologies as non-BSER 

measures that affected sources may rely upon to achieve standards of performance for a number 

of reasons, including data limitations, the heterogeneity of distributed generation opportunities, 

and the desire to maintain balance between program flexibility and stringency. The final 

building block 3 methodology is described in section V.E of the final rule preamble of the CPP 

and in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters supported the proposed 111(d) approach and stated there is more that the EPA can 

do. Commenters stated this approach allows states to take advantage of solar as part of a diverse 

compliance portfolio. Commenters supported the inclusion of solar and other outside of the fence 

measures in the definition of the best system of emissions reduction, BSER. Commenters stated 

there are certain areas that can be strengthened in respect to solar in building block three. 
115 

Commenters stated building block three is based on incomplete data and does not reflect current 

solar capacity on market projections. Commenters stated solar capacity in market projections are 

much higher than stated in the proposed rule. Commenters stated Pennsylvania can meet the 49 

percent emissions reduction with renewable energy resources, including solar, wind, biomass and 

hydroelectric, while incorporating energy storage, energy pricing for solar in the way of tariffs 

and enhancing the state's current alternative energy portfolio standard, particularly the solar share 

requirement. Commenters stated that all of these resources can meet the challenge through the 

competitive market, forces that will produce results at no or little cost to consumers while 

cleaning up our air and providing good jobs with the real growth of solar. MSEA, PASEIA and 

SEIA would be very happy to help with that process to go through. 

Commenters stated that, based on the growth of solar in markets with favorable solar policy, 

including New Orleans, analysis shows that Louisiana has a tested opportunity to increase 

distributed solar generation, both at the utility scale and residentially. Commenters stated that 

allowing energy users the freedom to generate their own energy reduces the cost of generation 

from the utility perspective, and increases the efficiency with which the energy is distributed as a 

result of reduced line-loss. Commenters stated that generation from rooftop solar can displace 

generation from peaking resources, like natural gas. Commenters stated that a recent study, 

showed a net benefit in nearly all scenarios analyzed. Commenters stated they have seen an 

impressive increase of residential PV systems as a result of falling system and installation costs, 

and as a result more people are interested in their energy choices than ever before. 

Commenters stated solar energy reduces carbon pollutants and offers a positive economic return 

while generating affordable and reliable energy, and as a cost-effective clean energy source, 

solar avoids a number of costs associated with fossil fuel resources. Further, commenters stated, 

solar enjoys widespread bi-partisan support from policymakers and the general public throughout 

the United States. Commenters stated the U.S. solar industry grew by 53% from 2012 to 2013, 

accounting for nearly 30% of all new electric generating capacity added to the U.S. grid in 2013. 

Commenters also stated an additional 7.3 GW of solar capacity are expected to be added in 2014, 

bringing the cumulative U.S. total to over 20 GW- enough to power more than 4 million homes. 

Commenters also stated the U.S. solar industry now supports 143,000 employees at more than 

6,100 companies spread across all 50 states. Commenters stated the EPA has already recognized 

the importance of renewable energy and the role for renewable energy to play in this transition, 

and has included renewable energy as a part of the best system of emission reduction (BSER) 

that has been adequately demonstrated to reduce emissions from affected EGUs. 

Commenters stated the EPA's rule should use solar potential in the renewable energy building 

block. Commenters stated that would result in a significant increase in Montana's reduction 

target. Commenters stated that Montana has an excellent solar resource, but it remains virtually 

untapped. Commenters stated that there are currently about 1,000 customers with solar arrays 

across NWE's service territory. Although rooftop solar installations have steadily increased in the 

last several years, the 1,000 solar installations represent less than one tenth of one percent of 

NWE's total electricity supply, the commenters added. Currently, there are no utility scale solar 

projects in Montana, the commenters said. Commenters stated that, while studies on Montana's 

solar potential are limited, the Interstate Renewable Energy Council estimates that 19% of 

Montana's energy needs could be met with distributed solar resources and the NREL calculates 

Montana's utility scale solar technical potential to be over 6 GW.
116 

Commenters stated that, since the solar resource is very similar in North Carolina and Arkansas, 

Arkansas should be able to install at least as much solar in the next five and a half years as North 

Carolina has in the last three and a half years. North Carolina added about 430 MW of solar in 

2011-2013, and another 70 MW in the first half of 2014, the commenters noted. Commenters 

stated that photovoltaics are an important resource category in jurisdictions with much less 

sunshine than Arkansas, including Ontario, Massachusetts, Vermont, Germany and more 

recently Minnesota and Wisconsin. Commenters provided the following are some examples of 

the falling costs of utility-scale solar: Georgia Power recently contracted for 515 megawatts of 

PV capacity, planned for build-out in 2015 and 2016, at an average price of 6.5 and Georgia 

Power received bids for 5,100 MW; in Texas, Austin Energy recently signed a PPA for 150 

megawatts of solar for less than 5 cents per kilowatt-hour; in Colorado, Xcel Energy agreed to 

purchase 170 megawatts of solar power, after finding that they were less expensive than natural 

gas plants; Xcel Energy Minnesota contracted for 187 MW of PV capacity for an expected 

levelized price of 7.3/kWh over 25 years; and in Utah, Rocky Mountain Power has contracted for 

400 MW of solar at prices below its estimates of avoided cost. Commenters suggested that solar 

is especially valuable in areas with existing or future T&D constraints, to avoid need for 

additional facility investments. Commenters said some smaller utility-scale PV facilities can 

provide these benefits, as can most customer-sited solar installations. 

 

Comment 69: Commenters expressed concerns regarding solar capacity and growth potential. 

Response 69: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both section V.E of the final rule preamble of the CPP and 

in chapter 4 of the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that solar implementation is still relatively young in its lifecycle, and 

continues to show promise as a growing constituent of the total electric power generation. 

However, commenters said, even in the 5 years of records, the growth rate has already slowed 

substantially, and won't be able to sustain the average year-over-year growth to reach the EPA's 

required target of 22,109,614 MWh by 2029. Commenters said that this is 100 times greater than 

the current generation level and reflects an unachievable average growth rate of 44% per year 

sustained for 13 consecutive years. Commenters suggested that the EPA take a more practical 

approach to promoting the development of renewable energy under the proposed rule by 

quantifying the potential in each state before determining a "conservative estimate" of available 

renewable energy. In order to support the EPA in a determination of promoting solar, 

commenters presented three possible scenarios, some of which are very aggressive, but that 

represent a much more sound approximation of what Florida can be expected to achieve by 2030. 

In the first approach, commenters assumed 13% average year-over-year growth beginning with 

2012's demonstrated renewable energy generation beginning in 2017, but looking only at solar 

(no biomass growth). The second scenario developed by commenters evaluated considers an 

estimation of potential solar generation in year 2029 using a quadratic curve. The third scenario 
117 

developed by commenters was based on an approach that uses an average year-over-year growth 

rate that is founded in a statistical analysis of actual data. 

Commenters did not agree with the EPA that West Virginia can integrate 410 MW of solar 

energy capacity by 2030. Commenters stated that, given West Virginia's total installed solar 

capacity is currently only 1.9 MW, this would call for an increase in solar capacity of 21,479%, 

which is an unreasonable amount of growth for one state in less than 15 years. Commenters 

objected that the EPA method is not based on a state-specific analysis. 

Comment 70: Commenters recommended the EPA include distributed generation in building 

block 3. 

Response 70: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. The EPA has maintained distributed generation technologies as non-BSER 

measures that affected sources may rely upon to achieve standards of performance for a number 

of reasons, including data limitations and EM&V concerns. The final building block 3 

methodology is described in section V.E of the final rule preamble of the CPP and in chapter 4 of 

the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated distributed PV capacity (as of June 2014) will generate 10,450,000 

MWh/year and displace 7,206,000 MT of CO2 per year. Commenters stated the mode of carbon 

displacement for distributed PV is identical or slightly better than utility PV, as distributed PV 

does not need to factor in line loss. Commenters stated distributed PV is clearly an effective 

means of reducing emissions and must be included in building block 3. 

Commenters suggested that, in order to capture all cost-effective methods of reducing carbon 

dioxide emissions from EGUs, the EPA could consider revising its Block 3 assumptions to 

expressly consider and include distributed generation. Commenters stated the City of Chicago 

has demonstrated, through local programs, the important role that individual residences, 

businesses, and public buildings have in reducing reliance on fossil-fuel fired generation. 

Commenters said that the Block 3 model does not include distributed generation as a major 

source of renewable energy capacity, despite the fact that net metered capacity now makes up 

about half of total U.S. solar PV capacity according to the EIA. 

Commenters stated the EPA must include all forms of solar, including distributed solar, in its 

final determination of the BSER. Commenters stated that, while they generally agreed that 

renewable energy measures, and solar measures especially, are necessarily part of the BSER, the 

commenters were concerned that building block 3, as it is currently calculated is incomplete 

because it does not contain current solar market data and it does not include distributed solar. 

Commenters stated that, as a result, the EPA's proposal does not accurately reflect the emissions 

reductions achievable through application of the BSER. Commenters stated distributed solar, 

utility solar and CSP are all a system of emissions reduction that is technically feasible, is 
118 

implemented at reasonable cost, is driving solar innovation, and does not negatively impact the 

electric system. Commenters stated these forms of solar energy are adequately demonstrated to 

reduce emissions from covered sources and for these reasons, the EPA must include solar as part 

of building block 3 in its determination of the best system of emissions reduction. Solar energy 

measures are technically feasible and are being installed across the nation today, the commenters 

added. Commenters stated Missouri's net metering law allows up to 940 MW of solar, an 

amount which would generate a further 18,000 jobs and over $2 billion in economic activity in 

the Missouri economy (SEIA/GTM Research U.S. Solar Market Insight). 

Commenters said that States and utilities can leverage homeowners own capital and promote 

distributed generation by continuing or implementing effective net metering policies and by 

providing performance-based incentives. Commenters said that net metering allows owners of 

distributed generation systems (such as rooftop PV) to sell excess power back to the grid, 

generally for the full retail price. Commenters said in place in 43 states, these policies have 

contributed substantially to the growth of residential solar in the U.S. and have provided value 

and benefits to the home or facility net metered and the grid system. Commenters stated that 

performance-based incentives (PBI) programs that offer homeowners an upfront rebate on the 

cost of distributed generation technologies (with the dollar size of the rebate linked to the kW 

size of the system) have been highly successful at promoting growth of rooftop solar PV in the 

U.S. As the cost of rooftop PV systems continues to decline, however, some states have 

transitioned away from upfront, capacity-based rebates toward performance-based incentives 

(PBI), the commenters added. As opposed to providing a $/kW rebate when the system is 

purchased, PBIs offer a $/kWh incentive as an installed system actually generates electricity. 

PBIs can reduce expenses for states and utilities while continuing to support deployment of 

residential solar systems, the commenters said. 

Comment 71: Commenters stated distributed generation (DG) installations are inherently 

situational and need to be modeled at the local distribution system level. 

Response 71: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. The EPA has maintained distributed generation technologies as non-BSER 

measures that affected sources may rely upon to achieve standards of performance for a number 

of reasons, including data limitations and EM&V concerns. The final building block 3 

methodology is described in section V.E of the final rule preamble of the CPP and in chapter 4 of 

the GHG Mitigation Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated each utility has a unique situation that must be assessed before determining 

to what degree renewable energy can be deployed, and stated that, while the EPA makes a 

projection regarding additional renewables that can be added to the electric system in order to 

decrease utilization of fossil-fuel fired generation, this projection includes a number of 

assumptions that ignore the on-the-ground realities faced by many operators based on the 

principle argument of "because someone else did it, you can." Commenters added the Proposed 

Rule estimates for renewable resources need to reflect the increasing costs of integration with the 
119 

increased penetration of these resources. Commenters said that, while its members support 

developing and deploying DG, DG must be implemented in a safe, reliable, and cost effective 

manner. Although Minnesota has been a proponent of many DG initiatives, the commenters 

stated DG installations are inherently situational and need to be modeled at the local distribution 

system level. Because benefits and costs to the distribution system vary greatly with penetration 

of DG, cost-based principles are critical, the commenters said. Commenters stated that efforts to 

cost-effectively integrate PV and other resources to benefit the grid can also help ensure the 

long-term viability of the electric grid that our economy and society depend upon. 

Commenters said that rates paid to DG customers should be consistent with conventional 

methods used by utilities to value energy resources and to compensate comparable utility-scale 

resources. Under that framework, the commenters added that utility-sponsored community solar 

is likely to yield greater net benefits than rooftop solar. For example, in some PV deployment 

models, especially those that seek to monetize wealth transfers from taxpayers and other utility 

customers, the value to some individual consumers may be greater, but inequities will be 

introduced and overall costs to the community will be higher, the commenters explained. 

Commenters added that in developing DG resources, the role of government is not to pick 

winners and losers, but to develop decisional tools and trusted data. Commenters stated that in 

their opinion to avoid this consequence arising from its rule, the EPA needs to provide improved 

policy resources, and develop objective case study data on cross-resource optimization. This type 

of optimization promises to allow the commenters member communities to make objective and 

informed tradeoffs resulting in DG projects that are most beneficial to the community, the 

commenters said. Commenters stated locally owned and controlled utilities know how to 

facilitate new, more efficient, and cleaner ways of meeting customer demand. Commenters said 

that supporting innovation is necessary for electric supply diversification, which helps the utility 

minimize sharp cost increases or supply disruptions that can come from over reliance on one 

generating technology. Commenters stated the Proposed Rule oversteps all of these communitybased initiatives in favor of a brute force modeling approach. 

Comment 72: Commenters stated renewable baseload or dispatchable generation, such as 

biopower, is needed to reinforce the variable generation resources, wind power and solar 

photovoltaics. 

Response 72: Maintaining sufficient baseload and ramping capacity to reinforce variable 

generation resources is a critical aspect to the IPM modeling used to demonstrate the technical 

feasibility and cost-effectiveness of the building block 3 target generation levels. Refer to chapter 

4 of the GHG Mitigation Measures TSD supporting the final CPP for further detail. 

Specifically in regards to biopower resources, biomass is not considered part of the best system 

of emission reduction in this rule and therefore it is not included in goal-setting or compliance 

evaluations. However, similar to other technologies outside of BSER, biomass may be 

considered as a part of a state’s plan to meet the emission guidelines. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in sections VIII.I and VIII.K of the final rule preamble of the CPP. 
120 

The following are summaries of the specific public comments under this comment: 

Commenters stated encouraging the deployment of diverse bioenergy resources will serve to 

insulate ratepayers from fuel price volatility caused by widespread reliance on natural gas. 

Commenters stated diverse biopower will also tend to insulate electric utilities from severe 

impacts due to supply curtailments when natural gas demand spikes, such as during the extreme 

low temperatures of the January 2014 "polar vortex" event. 

Comment 73: Biomass and BSER. Many commenters commented on the perceived role of 

biomass in the baseline, goal setting and compliance, as well as how to account for biomass in 

those efforts. Some thought that biomass should not be included in establishing the baseline, 

targets, and compliance, other thought that it should be included, and others still just commented 

that it should be treated consistently (included or excluded in all three components). Some 

commenters asserted that biomass should be counted as carbon neutral within building block 

assessments, whereas others asserted that it should be counted as full emissions. Some 

commenters thought that states should be able to choose whether or not to include biomass as 

part of state compliance measures. Commenters wanted inclusion of dedicated biomass plants in 

compliance assessments. 

Response 73: Biomass is not considered part of the best system of emission reduction in this 

rule and therefore it is not included in goal-setting or compliance evaluations. However, similar 

to other technologies outside of BSER, biomass may be considered as a part of a state’s plan to 

meet the emission guidelines. 

For more information regarding Building Block 3, refer to section V.E of the final rule preamble 

of the CPP. 

For more information regarding biomass in the IPM baseline projection, refer to EPA v5.13 Base 

Case Documentation Supplement to Support EPA’s Proposed Carbon Pollution Guidelines for 

Existing Electric Generating Units in the docket. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in sections VIII.I and VIII.K of the final rule preamble of the CPP. 

 In November 2014, the agency released a second draft of the technical report, Framework for 

Assessing Biogenic Carbon Dioxide for Stationary Sources. The revised Framework, and the 

EPA’s Science Advisory Board (SAB) peer review of the 2011 Draft Framework, finds that it is 

not scientifically valid to assume that all biogenic feedstocks are “carbon neutral” and that the 

net biogenic CO2 atmospheric contribution of different biogenic feedstocks generally depends on 

various factors related to feedstock characteristics, production, processing and combustion 

practices, and, in some cases, what would happen to that feedstock and the related biogenic 

emissions if not used for energy production. 

A discussion of the use of biomass feedstocks and associated biogenic CO2 assessment can be 

found in in sections VIII.I and VIII.K of the final rule preamble of the CPP. 
121 

A discussion regarding the current status of the development of the revised Framework and how 

information from the revised Framework and the related peer review processes could be used to 

inform how states and EPA assess biogenic CO2 can be found in sections VIII.I and VIII.K of 

the final rule preamble of the CPP. For more information regarding the Framework, see: 

http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html 

The following are summaries of the specific public comments under this comment: 

Commenters stated they believe that one of the biggest flaws of the approach to RE as BSER in 

the proposed rule is inclusion of wood biomass in the 2012 Baseline and the calculated average 

regional growth target. Commenters said that the EPA has not established at this time if biomass 

electric generation is "carbon neutral" or not, even in light of EPA's release of a second draft of 

the Framework/or Assessing Biogenic CO2 Emissions from Stationary Sources and 

corresponding memos. 

Using EIA data, commenters determined seventeen states have over one third of their RE 

generated by wood. Commenters stated if future EPA rulemaking determines that a portion of 

this wood is not carbon neutral or allows some fraction of the CO2 emitted as a pollutant, it 

would drastically impact the achievable RE in many states. Commenters said until this decision 

is made, the EPA cannot include baseline generation from wood to establish RE growth rates and 

future generation targets. Commenters asserted the EPA must remove wood generation from 

2012 RE generation for each state, and recalculate everything for the affected states. 

Commenters stated the EPA must be consistent in accounting for biomass emissions, both in its 

state goal calculations and in its regulations for compliance demonstrations, by either adjusting 

the "effective" 2020 RPS rate to exclude biomass, or to definitively affirm that states can rely on 

biomass as a carbon neutral resource in developing implementation plans. Commenters stated 

that, as with hydroelectric generation, many state RPS are designed to include the contributions 

from biomass resources. Commenters stated the EPA uses the contribution of biomass resources 

to determine the baseline renewable generation for each state that is then used to develop the 

building block 3 goals; however, the EPA had not made a determination of whether states would 

be able consider biomass for compliance purposes at the time of its proposal. Commenters stated 

that, on November 19, 2014, EPA released its second draft of the Framework for Assessing 

Biogenic Carbon Dioxide Emissions from Stationary Sources, and anticipates seeking further 

review of the Framework through the Science Advisory Board and public comment. 

Commenters stated the revised Framework does not provide definitive answers on these issues, 

only proposed calculations that require detailed inputs in order to determine whether, and to what 

extent, biogenic energy sources may be relied on to reduce CO2 emission rates or mass 

emissions in the context of the proposed CPP. Commenters stated that, at present, all EPA has 

committed to do is to second-guess state plan submittals based on criteria that it has not clearly 

defined. 

Commenters opined that EPA incorrectly assumes zero CO2 emissions from all renewable 

sources in Building Block 3. Commenters stated the 2012 renewable generation levels used by 

EPA as the basis for its future renewable generation levels for Building Block 3 include various 

forms of biomass, and commenters noted that they do emit CO2. Commenters stated these 

biomass CO2-emitting fuels include: black liquor, landfill gas, municipal solid waste, sludge, 
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and wood wastes. Commenters further opined that, therefore, EPA has not properly accounted 

for additional CO2 emissions from biomass sources in Building Block 3, due to the Agency's 

failure to examine each state's renewable generation mix. Commenters pointed out that the EPA 

issued second draft of its Framework for Assessing Biogenic Carbon Dioxide from Stationary 

Sources does not clearly define biomass as a zero-emission renewable resource; and that the EPA 

should therefore definitely determine that biomass fuels are carbon neutral and that their use for 

electricity generation constitutes as a zero-emission renewable resource. 

Commenters said by lumping bioenergy with all other renewables, and biomass and wasteburning as if they reduce emissions as effectively as wind and solar, EPA may be inadvertently 

promoting these technologies as mitigation measures in the GHG rule. Further, commenters 

asserted counting these emissions as zero can also introduce significant errors into the estimate 

of present day power sector CO2 emissions and target emissions rates, which are likely to be 

carried forward as states attempt to meet target emissions goals. Commenters stated this problem 

is most apparent for those states where bioenergy and waste-burning contribute a significant 

share of total CO2 emissions. 

Commenters stated that biomass co-firing could have a significant impact on their state's future, 

as right now it is very coal dependent. However, in some areas the transportation of fuels to the 

plant would be cost prohibitive, and therefore commenters requested the option to utilize 

biomass co-firing only where it is cost effective, and not have it forced upon their state. 

Commenters stated that EPAs proposed approach sets state RE goals based on 2012 total 

generation, 2012 RE generation, and regional RPS averages. Commenters stated 2012 generation 

data and many of these RPSs do not differentiate on the basis of biomass feedstocks' lifecycle 

CO2 implications. Commenters stated that a lifecycle analysis was considered in setting state RE 

goals under the alternative RE approach, even though existing biomass generation helps 

determine state RE targets. Commenters stated that in a memorandum issued (Memorandum 

from Janet G. McCabe) before the CPP comment deadline, EPA indicated that biomass 

generation would be analyzed for compliance purposes based on a feedstock lifecycle 

analysis. Commenters stated that EPA should clarify its treatment of biomass in goal-setting and 

compliance. 

Commenters also stated that EPA should clarify the treatment of biomass co-fired with coal, as 

some TSDs indicate that co-fired biomass is included in states' baselines, while the RIA indicates 

that biomass co-fired with coal was treated as RE. Commenters also asserted that EPA should 

clarify whether the useful thermal output from biomass CHP units was included in states' 

baselines. 

Commenters stated the whether the EPA intends for biomass to be considered a carbon-neutral 

energy source or not, it should provide regulatory consistency in its treatment of biomass 

generation and not inadvertently penalize states with biomass generation. Commenters 

encouraged the EPA to treat biomass units consistently in both target setting and target 

compliance calculations, and to ensure that final rule language includes applicability criteria 

referenced in the proposed rule preamble. 
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Commenters stated that biomass co-firing is a promising technology, but U.S. EPA errors in 

allowing for unrealistic biomass usage in the IPM model and until the technology has matured 

and sufficient engineering data and experience are gathered, U.S. EPA should refrain from this 

unrealistic assumption. Commenters were concerned that biomass co-firing could have negative 

impacts on existing controls, impacting both their efficiency and potentially increasing the 

amount of maintenance necessary to maintain adequate levels of controls. 

Commenters asserted that NREL and the EPA overestimate the amount of biomass that is both 

available and suitable for fuel use. Examples they gave include methane from human/animal 

waste and crop residues, both of which make unlikely fuel sources. Commenters noted that most 

biomass co-firing plants are unable to burn many of the potential fuel sources EPA considers 

viable in their proposal and states that all new co-firing plants are being built to accommodate 

wood burning, not crop residue or other waste biomass. Lastly, commenters stated how biomass 

isn't always available year round, and will therefore need to be stored, which will be expensive. 

Commenters agreed that the EPA should include sustainable biomass and waste wood utilization 

in Building Block Three, Renewables, as a source of reliable and dispatchable low carbon 

electricity. Commenters supported the inclusion of any measure that mitigates CO2 as credit 

towards goal achievement, but did not believe that other measures should be required as a facet 

of BSER. 

Commenters added that the EPA treats biomass units as carbon-neutral resources for goal-setting 

purposes, by including their MWh of generation in the denominator of the formula in Building 

Block 3, but including no CO2 emissions in the numerator for these units. Commenters were 

concerned, that in compliance, the EPA implies that biomass would not be treated as a carbonneutral resource, since it refers to the EPA's Biomass Accounting Framework for 111(d) plan 

development where the methodology describes adjusting top-of-stack biogenic CO2 emissions 

based on the particular feedstock and location. Commenters noted that the EPA acknowledges 

that in the review of the Framework, the Science Advisory Board indicated that biomass cannot 

be considered " ... carbon neutral a priori, without an evaluation of the carbon cycle effects 

related to the use of the type of biomass being considered." 79 FR 1446. Commenters said that 

states are penalized in the goal setting formula for having biomass plant because treating such 

plants as carbon neutral (i.e., not including those plants' CO2 emissions) in the goal setting 

formula makes the goal more stringent, while treating as non-carbon neutral for goal compliance 

then discounts the use of biomass for goal achievement. Whether the EPA intends for biomass to 

be considered a carbon-neutral energy source or not, commenters said that it should provide 

regulatory consistency in its treatment of biomass generation and not inadvertently penalize 

states with biomass generation. Commenters noted similar concerns and stated that to the extent 

that such a mismatch makes its way into the final rule, the EPA's assumptions regarding the 

trajectory of future renewable energy use will be unrealistic and arbitrary. 

Commenters also noted inconsistency in the EPA's treatment of biomass when the Agency 

included existing biomass in the 2012 baseline as renewable energy in justifying a more stringent 

emission guideline, but does not allow biomass to count toward compliance. Commenters 

concluded that the EPA must provide consistent treatment of biomass and should modify any 

final rule to ensure that any biomass included in the emission guideline calculation be consistent 

with how the EPA will allow states to account for biomass generation in compliance. 
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Commenters stated that BSER must deal with total emissions not a subset of electric generators. 

Commenters asserted that biomass electric generators must be included in the performance 

standard for 100% of their emissions. Commenters concluded that the urgency of climate change 

demands that we arrive at the best system of emissions reduction and that is not what has been 

proposed. 

Commenters questioned if, given that the source of the energy is a natural, renewable source 

(biogas), this energy should be considered under Block 3 or if it fit better under Block 4. 

Commenters disagreed with the EPA's assumption in building block 3 that there are zero CO2 

emissions from all renewable sources. Commenters stated that the EPA has not determined yet 

whether, or to what extent, such biomass fuel sources such as black liquor, landfill gas, MSW, 

sludge, and wood wastes, will be considered CO2-neutral for compliance purposes, citing its notyet-finalized Biogenic CO2 Accounting Framework. Commenters added that the EPA should 

address this compliance risk and regulatory uncertainty by examining each state's renewable 

generation mix and recalculating its targets based on corrected renewable sources figures, 

including any determination it makes on biomass. 

Commenters added that the state emission limiting goals proposed by the EPA for renewable 

energy in building block 3 are extremely optimistic, and it should amend its definition of affected 

facilities to fully account for CO2-neutral biomass fuel streams in all of its CO2- related NSPS 

rulemakings. 

Commenters stated that EPA needs to provide additional guidance and clarity with how biomass 

can be incorporated in compliance demonstrations under Building Block 3. 

Commenters said that the EPA's proposed BB 3 goals for Florida for renewable energy are 

extremely optimistic, and if Florida utilities have any hope of achieving CO2 emission 

reductions envisioned in BB 3, the EPA must amend its definition of affected facilities to fully 

account for carbon neutral biomass fuel streams in each of the three CPP rules. 

Commenters described Michigan's significant biomass resources and recommended that biomass 

be considered carbon neutral. Commenters suggested that Michigan's definition of biomass 

meets the requirements of Building Block 3. Commenters suggested that the final rule should 

clarify what types of biomass can count toward Building Block 3. In cases where a generator 

uses multiple fuels, such as a woody biomass plant that burns both woody biomass and tirederived fuel (which is not considered renewable in Michigan), commenters said that the 

generation reported would include all of the MWh generated, but RECs would only be awarded 

for the renewable portion of the generation. Commenters also said that however biomass is 

treated in the rule, the EPA should treat it the same in both the goal setting and the compliance 

demonstration. Commenters added that Michigan does not agree that biomass be included in the 

numerator as "other generation" since this is a carbon neutral source of energy. Commenters said 

that the treatment of biomass in the final rule should only appear in the denominator as new 

biomass energy production comes on line and counted as a renewable resource. Commenters 

agreed that biomass should be explicitly included as a compliance option for Building Block 3. 

Commenters said that the EPA's inconsistent biomass policy undermines the RIA. 
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Commenters said that the "illustrative" compliance scenarios used in the RIA to calculate the 

costs and benefits of the Proposed Rule include only those sources "included in the calculation of 

the state goals." Commenters said that this means that the RIA's scenarios include biomass cofiring, but exclude "dedicated" biomass facilities. At the same time, commenters stated, the RIA 

recognizes that individual states might include "sources of generation" other than those 

considered in state goal setting in calculating their own emissions rates for compliance purposes. 

Commenters were concerned that this leaves open the possibility that individual states may rely 

on expanded biomass energy generation as a compliance measure. Although the RIA 

acknowledges this possibility, commenters stated that it does not fully or fairly account for its 

costs and benefits, e.g., the RIA does not consider the costs of CO2 from biomass combustion at 

all. Commenters said that the RIA's failure to include dedicated biomass generation in 

compliance scenarios also omits consideration of the relatively high cost of this generation. 

Although the RIA does not consider these costs, commenters added that it does appear to count 

employment from biomass plant construction and operation as a benefit, which obviously skews 

the resulting analysis. Commenters added that the RIA's exclusion of dedicated biomass from its 

compliance scenarios also results in a potential undercounting of costs related to conventional 

and toxic pollutant emissions. Commenters noted that a recent study of 88 air permits for 

bioenergy facilities shows that permitted criteria air pollutant emission rates for biomass 

facilities typically exceed those for coal facilities on a lbs/MWh basis, and vastly exceed those 

for natural gas facilities by more than 800% for every major pollutant. 

Commenters stated that the EPA considered biomass energy as a renewable energy source in 

calculating the state emission reduction goals under Building Block 3. Commenters stated that by 

relying on state renewable portfolio standard (RPS) programs to calculate each region's potential 

for renewable energy in its BSER analysis and excluding the biogenic CO2 emissions from the 

total renewable energy CO2 emissions, EPA has implicitly incorporated biomass energy as 

carbon neutral. Commenters contended that biomass energy is included as a renewable energy 

source in all state RPS programs and an important option for addressing GHG emissions. 

Commenters stated that the EPA must fully account for all biomass CO2 emissions. Commenters 

stated that the Proposed Rule effectively ignores CO2 emissions from biomass energy generation 

in both target-setting (by treating biomass energy as zero-carbon "renewable" energy) and 

compliance (by allowing states to determine whether or not to count biomass CO2). Commenters 

stated that EPA has provided neither a clear explanation nor an adequate evidentiary justification 

for this approach. Commenters asserted that these errors must be corrected before the Proposed 

Rule can be finalized. 

Commenters stated that bioenergy is a costly way to "reduce" CO2 emissions as biomass power 

plants are expensive to build and require substantial and ongoing infrastructure investments. 

Commenters stated that bioenergy is substantially more expensive than onshore wind, per 

kilowatt-year, including both the initial infrastructure investment and ongoing fixed and variable 

costs. Commenters stated that replacing some coal with low levels of biomass co-firing may 

result in stack CO2 increases. 
126 

Comment 74: Commenters stated it is critical that the EPA utilize up-to-date data in the 

development of the Clean Power Plan in order to enable more accurate compliance planning. 

Response 74: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar and wind cost and 

performance assumptions. The final building block 3 methodology is described in detail in 

section V.E of the final rule preamble of the CPP and in chapter 4 of the GHG Mitigation 

Measures TSD supporting the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, as the rule is currently written, out-of-date data is sometimes used when 

more current information is available. Commenters stated, for example, in terms of solar, the 

data used does not reflect current solar capacity or market projections; today's solar capacity is 

already exceeding the estimates the EPA has used. Commenters stated this is also the case for 

other resources such as hydropower. 

Commenters recommended that the EPA use the most up-to-date technology data to determine 

renewable energy potential per state. Commenters stated that, based on the new wind turbine 

technology, it is clear that Louisiana's coastal area has some of the country's best wind resources. 

Commenters stated that, while the National Renewable Energy Lab maps used data from the year 

2000 to determine wind energy potential, other NREL studies show that Louisiana has a wide 

range of renewable generation opportunities to apply to the state's energy mix. Commenters 

stated that solar, hydro, and biomass are all local resources that have been largely untapped. 

Commenters stated that hydropower is a reasonable baseload energy opportunity. 

Commenters stated the agency should use the most recent cost and performance data for 

renewable energy technologies, such as wind and solar. Commenters stated that, by the time the 

rule is finalized, the EPA should have access to final 2014 data and the agency should use that 

information in establishing state targets and building from the most recent data on renewable 

generation is critical, given the rapid growth in deployment of these resources in recent years. 

Commenters stated the EPA's assumptions should be updated to reflect new NREL resource 

assessments, more recent data from actual projects, and credible studies projecting continued 

cost reductions and technology improvements through 2030. 

Comment 75: Commenters stated there are errors that need to be corrected under the proposed 

approach. 

Response 75: The errors cited by the commenter relate to RPS requirements, which are not a 

factor in quantifying the amount of cost-effective RE that is part of the BSER in the final rule. 

The final building block 3 methodology is described in detail in section V.E of the final rule 

preamble of the CPP and in chapter 4 of the GHG Mitigation Measures TSD supporting the final 

CPP. 

The following are summaries of the specific public comments under this comment: 
127 

Commenters stated that, in reviewing the spreadsheet and the inherent calculations EPA relied on 

to establish the state goals for North Carolina, NCDENR discovered a number of errors or 

incorrect assumptions in the calculations. Commenters provided an Appendix C which details 

these concerns. Commenters trusted that the EPA will make the recommended corrections as 

outlined in Appendix C so that the final goals for North Carolina will be based on correct 

assumptions. Commenters stated one area of concern include the misrepresentation of the state's 

Renewable Energy and Energy Efficiency Portfolio Standard. 

Comment 76: Commenters asserted that EPA has no Section 111 authority over RE 

technologies. 

Response 76: The incremental RE that affected EGUs may procure to demonstrate compliance 

with their relevant rate- or mass-based goals under the final CPP is not regulated under Section 

111. Qualifying compliance resources are not affected EGUs. Refer to the applicability 

definition provided in the preamble for additional information. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that regarding Block 3, except possibly for renewable generation 

technologies such as biomass, EPA has no Section 111 authority over these generation 

technologies (nuclear, renewable) at all. Commenters said that first, they do not release any air 

pollution, preventing the EPA from making an endangerment finding involving these units under 

Section 111. Commenters said that further, the definition of stationary source requires that the 

source "emits or may emit any air pollutant." Commenters said since nuclear and non-biomass 

renewable generation emit no air pollutants of any type, it forecloses the ability of EPA to 

propose any rules regarding these generation technologies. 

Comment 77: Commenters stated the utilization of imported low- and non-emitting generation 

from Canada as a CO2 emission reduction measure should be provided in the final rule as a 

compliance option for affected EGUs to adjust their CO2 emission rates. 

Response 77: The EPA will work with states using the rate-based approach that are interested in 

allowing the use of RE from Canada to adjust CO2 emission rates. In these cases, all conditions 

for creditable domestic RE must be met, including that RE resources must be incremental and 

installed after 2012, and all EM&V standards must be met. For additional information, refer to 

section VIII of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters said that, the emphasis on maximizing flexibility for states is a hallmark of EPA's 

proposal. Commenters said, that the final rule should specifically recognize and leverage the 

integrated nature of the North American electricity grid, and promote the continued two-way 

flow in cross-border electricity trade. Commenters said, the rule should clearly affirm that states 

will have the flexibility to allow affected entities to utilize the importation of low- and non-
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emitting electric generation from Canada as a CO2 emission reduction measure (including in 

their respective state plans, where appropriate). 

Commenters stated the utilization of imported low- and non-emitting generation from Canada as 

a CO2 emission reduction measure comports with EPA's assurance that "[s]tates may also 

identify technologies or strategies that are not explicitly mentioned in any of the four building 

blocks and may use those technologies or strategies as part of their overall plans." [79 Fed. Reg. 

at 34,837] 

Commenters stated in step with the above discussion, CEA notes with encouragement that EPA's 

commitment to flexibility also encompasses a pledge not to confine states to the four building 

blocks determined to constitute BSER. Commenters added EPA makes a definitive declaration 

along these lines during its discussion of how BSER was determined: "[E]ach state has the 

discretion to adopt emission reduction measures other than the measures found by the EPA to 

comprise the BSER." [79 Fed. Reg. at 34,879] 

Commenters added here again CEA sees strong grounds upon which a state can argue for the 

ability to leverage integration with Canada as part of its strategy for maximizing CO2 emission 

reductions under the 111(d) framework. Commenters stated if states are able to clearly 

demonstrate how the importation of low- and non-emitting generation from Canada can translate 

into measureable, meaningful decarbonisation of their electric generation fleets, then CEA 

believes that: (i) it is incumbent upon the EPA to offer certainty to interested states that they will

have this option at their disposal; and (ii) any signal to the contrary represents an undue 

limitation on states' ability to look beyond the four BSER building blocks for permissible actions 

to achieve their rate-based goals. 

3.3.2 Current level of performance

This section discusses methodologies and data used to assess the current performance of Cleaner 

Generation technologies under building block 3. 

Commenters have raised a number of issues related to this subsection, which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: The baselines used in the setting of building block 3 targets in the EPA’s proposal 

were developed using erroneous data or assumptions for some states not representative of actual 

performance. 

Response 1: The final methodology for building block 3 relies on incremental generation from 

the BSER data year of 2012, which eliminates the need to set a baseline level of generation. 

Further, State RPS requirements are not a factor in quantifying the amount of cost-effective RE 

that is part of the BSER in the final rule. The final building block 3 methodology is described in 

detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 
129 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA should carefully consider large year-to-year fluctuations that 

occur and whether such anomalies, such as variations in hydropower and plant outages, had an 

undue influence on the proposed baseline in certain states. Commenters noted that if this is the 

case, then the EPA should work with those states to make appropriate adjustments to the final 

rule. 

Commenters stated that the EPA should not adopt the use of a renewable generation floor equal 

to the amount of the state's actual 2012 renewable generation for states that exceed the regional 

average. Commenters stated that this would penalize states for taking early action in adopting 

renewable energy policies. Commenters stated that Iowa and other early actors should be 

rewarded for taking a leadership role in installing renewable generation. In a footnote, 

Commenters stated that Iowa utilities' customers have paid for the renewable generation, and 

setting a floor based on Iowa's 2012 renewable generation would not appropriately reward them 

for their early investments. 

Commenters used the analogy of a car to highlight flaws with the EPA's approach. Commenters 

stated that the EPA assumes that because for one car at one point in time a speedometer indicated 

a speed of 60 mph that is the car's velocity of travel for the entire trip. Commenters noted that 

just because the car has that speed at one point does not mean that it can or should be maintained 

for the entire trip. Commenters stated that the EPA further assumes that this speed, or rate as 

applied to the proposed rule, can be applied to all states with no determination as to whether it is 

achievable or cost effective. Commenters stated that states are not fungible as related to RE 

potential; the EPA cannot assume that a rate achieved by one state in one year can be achieved 

by another state. Commenters further stated that the alternative also overburdens states which 

have developed RE early. Also, commenters stated, since the alternative is still based on 

generation and not capacity, it does not account for the fact that wind and solar are unpredictable 

and intermittent renewable resources. Commenters stated that for the above reasons, the EPA 

should re-propose the rule and set RE targets based on what is achievable for each state, taking 

into account cost and energy requirements as required by the CAA. 

Commenters stated the baseline numbers appear to be erroneous in multiple states, both on a 

cumulative and individual renewable technology basis. Commenters stated that the EIA data also 

appears to include data derived from all generation sectors. Commenters stated that extending the 

baseline beyond the electric sector, not only modifies the cumulative values (sometimes 

significantly), but also is not a representative reference point in determining final compliance 

targets. Commenters suggested that actual renewable generation values, as reported by the states, 

should be utilized to begin with the most accurate data set, as not doing so will ultimately lead to 

erroneous targets and conclusions. Additionally, the commenters stated, the characterization of 

biomass as a renewable resource that counts historically and not as future resource option is 

inconsistent. Commenters stated the methodology to reach the final targets is a far more 

important consideration than the baseline values selected, but more accurate baseline values 

simply helps to provide the clearest reference point to then determine realistic State targets. 

Commenters stated EPA used 2012 data as a baseline to establish individual state goals in 

building block 3, but a single year can be an anomaly, and EPA should have used a more robust 
130 

set of data in calculating its goals. Commenters stated increased generation from renewable 

resources coupled with changes in the total generation produced in 2013 and 2014 impact both 

the regional growth factor calculated by EPA and the resulting individual state renewable goals. 

Commenters stated using 2013 generation data would decrease the regional renewable energy 

growth rate calculated by EPA. Commenters provided a table summarizing this decrease for 

three regions as an example. Commenters stated the change in the growth rate using 2013 data 

can have a significant impact on the renewable energy goal that EPA calculates for state goals. 

For instance, the commenters stated that utilizing 2013 data reduces the interim and final 

renewable energy goals for Arkansas by 15% and 22% respectively. Commenters also stated that 

likewise, for Louisiana the interim and final renewable energy goals are reduced by 10% and 

17% if using 2013 as a baseline. Commenters stated EPA's selection of 2012 as the single 

baseline year in its goal calculation efforts is unreasonable and arbitrary. 

Commenters stated that if EPA establishes state baselines, they must be representative of actual 

performance related to the goals of the rule and must not, for example, work against states or 

entities that took early action contributing to that goal. Commenters stated that EPA also must 

consider significant year-to-year variations that have occurred, and will continue to occur. 

Commenters stated that many states have observed, for instance, anomalies in hydropower and 

plant outages had an undue influence on their baseline in the proposal. Commenters suggested 

EPA should work with those specific states and others with concerns, to make needed 

adjustments in any final rule to show how such an approach works over time. 

Commenters stated that the EPA assumes that current RES requirements are a reasonable 

foundation on which to develop state RE requirements, but this does not account for the fact that 

the RES (the commenters are referring to the RES for the state of Missouri) only applies to 

Investor Owned Utilities and not to all utilities. Commenters stated that this assumption inserts 

error in the baseline determination for RE. 

Comment 2: EPA should apply UCS Recommended Percentage Targets Using the Amount of 

Creditable RE in a State. 

Response 2: The final methodology for building block 3 relies on incremental generation from 

the BSER data year of 2012, which eliminates the need to set a baseline level of generation. 

Further, State RPS requirements are not a factor in quantifying the amount of cost-effective RE 

that is part of the BSER in the final rule. The final building block 3 methodology is described in 

detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters proposed that the EPA apply UCS recommended percentage targets using the 

amount of creditable RE in a state. Commenters suggested that EPA may also want to consider 

modifying how the baseline RE generation and starting RE performance level is determined for 

each state. Commenters mentioned an alternative to setting the baseline on current RE 

generation: the EPA could require states, working with their utilities and affected EGUs, to 

account for renewable energy generation, which they would be able to take credit for under the 

CPP as of the date they submit their state plan. Commenters stated that this would most often 
131 

involve in-state RE generation less RECs owned by out-of-state persons and any RECs generated 

out-of-state but owned in-state plus any RECs generate out-of-state but owned in state (referred 

to as sponsored renewable energy. Commenters stated that the denominator for determining the 

starting RE performance level and target level of performance would be overall consumption of 

electricity in the state in the starting and compliance year. Commenters further stated that state 

target would increase from the sponsored RE baseline to the target RE performance level via an 

EPA determined methodology. Commenters stated that states will need to audit their current 

level of sponsored RE in order to design a state plan that achieves their RE targets. 

Commenters expressed that their suggested approach would allow states which currently export a 

large amount of renewable energy to establish a more accurate baseline; it would also ensure that 

states which import a large amount of renewable energy would start at a higher RE baseline and 

are not allowed to backslide or remain stagnant early on in the compliance period. 

Commenters noted that using this process from the outset will allow the EPA the opportunity to 

resolve at the outset questions about how states will allocate credit for projects with multiple 

sources of policy support. Commenters then noted that states would have greater certainty about 

how different RE policies will work within their plans, and it will allow the EPA to test the 

sufficiency of existing REC trading systems for compiling this type of information so that 

refinements to the system can be made in time for the plan performance period. 

Comment 3: Baselines Do Not Account for Displaced Coal. 

Response 3: The final methodology for building block 3 relies on incremental generation from 

the BSER data year of 2012, which eliminates the need to set a baseline level of generation. The 

BSER is forward-looking in identifying cost-effective opportunities for emission reductions from 

2012; however, the cost and availability of these emission reduction opportunities is the result of 

many factors, including previous actions. The final building block 3 methodology is described in 

detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that based on EPA's goal calculations, both a lower baseline emission rate 

and high levels of RE and ZE in the baseline year cause a state's ultimate performance goal to be 

more stringent. Commenters stated this is because EPA does not account for the coal-fired 

megawatts that already have been displaced by RE and NGCCs. Commenters stated existing 

(i.e., pre-2012) RE and ZE therefore negatively impacts early-acting states by making the 

baseline emissions rate artificially low. Commenters stated for example, RE displaced a 

significant amount of coal generation in Minnesota prior to 2012. Commenters referenced 

retirement of coal-fired units that were replaced with NGCC facilities, noting these coal 

retirements resulted in significant reductions in CO2 emissions and the state's average emissions 

rate. Commenters also noted the addition of new wind farms and additional large amounts of 

purchased wind power. Commenters stated this wind power, which needed the more flexible, 

gas-fired generation that Xcel Energy built to replace the retired coal plants, also resulted in 

reduced utilization of the new NGCC units. Commenters stated that absent the retirement of 

these coal-fired units and the new wind investments, Minnesota's baseline emission rate would 
132 

have been significantly higher. Commenters stated that applying EPA's goal calculation 

methodology to this higher baseline emission rate would have resulted in less stringent 

performance goals for Minnesota. 

Commenters also stated that existing hydropower and nuclear energy is not explicitly included in 

states' baselines even though they displace other fossil-fuel fired generation. Commenters stated 

that where such sources would have had an aggregate CO2 emission rate greater than states' 

baselines under the Proposed Rule, existing hydropower and earlier investments in carbon-free 

nuclear contributes to artificially low baseline calculations. 

Comment 4: The EPA’s approach to renewable portfolio standards for states meeting building 

block 3 requirements is inappropriate for some states and does not account for regional 

disparities. 

Response 4: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The final building block 3 methodology is 

described in detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that it was inappropriate for the EPA to rely on the NC REPS when setting 

renewable energy goals for Florida under Building Block 3. Commenters stated that NC's REPS 

requirements may be met using hydroelectric, biomass, and renewable power imported from 

other states, and up to 40 percent of the NC renewable requirement may be met with energy 

efficiency. Commenters stated that it was inappropriate to base Florida's renewable goal on a 

goal that combines renewables and energy efficiency and to have another goal for energy 

efficiency in Florida. Commenters stated that the EPA must account for these discrepancies and 

adjust Florida's goal accordingly. Commenters also expressed concern over EPA's assumptions 

regarding renewable energy in the Southeast. 

Commenters noted that the state of Iowa is a leader in wind energy generation. Commenters 

stated that Iowa recognizes and appreciates that the EPA has awarded Iowa's early investment in 

renewables by using a regional average to calculate state goals. Commenters stated that the same 

unit of renewable energy may be used to show compliance with both a state RPS and a 111(d) 

state plan. Commenters expressed support for the proposed rule's position on this issue and stated 

that there was no reason this should not be allowed. Commenters also noted that allowing this 

would permit states to use the same unit of renewable energy to show compliance with the state's 

RPS and 111(d) which would reward the state for adopting proactive policies. 

Commenters described the EPA's plan for regional groupings (and RPSs) as a hodgepodge which 

is not demonstrated, which does not exist anywhere in the real world, and the methods for 

constructing it were intellectually arbitrary. Commenters stated that the EPA failed to account for 

exemptions for municipal and coop utilities including those based on purchase of out-of-state 

power. Commenters also criticized the EPA's assumption that the levels of nuclear generation 

will continue are based on nothing better than speculation. 
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Commenters pointed out that the EPA failed to account for the wide regional disparities in the 

availability and cost of renewable resources in the U.S. when it assigned a de facto RPS for each 

state within a given region. Commenters noted that the EPA failed to consider some states' 

existing renewable mandate credits certain types of renewable resources in ways that reduce the 

absolute amount of renewable generation is required to satisfy the mandate. Commenters 

provided Delaware and Colorado as examples since both offer a credit multiplier for specific 

types of renewable generation. Lastly, commenters noted that increasing reliance on renewable 

energy would require the construction of additional transmission lines which would take years to 

build. 

Commenters noted that the EPA should not finalize its proposed RE target for Texas by applying 

the RPS of Kansas to Texas while ignoring the existing Texas RPS. 

Commenters expressed concern over the EPA assumption that adopting RPSs would be "best 

practices" for all states which do not currently have one. Commenters stated that the EPA fails to 

note that RPSs are an independent legislative choice meant to trade off higher electric costs for 

the presumed environmental and economic development of renewable power. Commenters 

pointed out that many states which possess significant wind and/or solar resources have chosen 

to adopt portfolio standards, and many states which do not possess significant quantities of 

renewable resources have chosen to avoid adopting portfolio standards. Commenters made the 

point that whether or not one state has adopted portfolio standards has no bearing on the 

standards another state chooses to adopt or not adopt; therefore there are not "best practices" 

which can be imported from state to state. Commenters also stated that the EPA is not in the 

position to dictate to states what "best practices" should be in terms of renewable energy. 

Commenters stated that the EPA contradicts itself by claiming that states that have adopted 

renewable portfolio standards demonstrate "best practices". Commenters noted that the EPA's 

goals would require states to achieve more renewable resources than most states would mandate 

in that state's applicable portfolio standard. Commenters stated that what the EPA refers to as 

best practices are in reality EPA outcome-driven assumptions as to the type of portfolio standard 

that it thinks state legislatures should adopt. 

Comment 5: Georgia's RE Target Should Be Less Than or Equal to 7.5%. 

Response 5: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The final building block 3 methodology sets target 

generation levels at the interconnect-level and is described in detail in V.E of the preamble and 

in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA misinterpreted North Carolina's Renewable Energy and Energy 

Efficiency Portfolio Standard (REPS) when setting the renewable energy target for Georgia and 

other Southeastern states. Commenters stated that based on North Carolina's REPS, Georgia's RE 

target should be no more than 7.5%. Commenters stated that North Carolina's REPS Secondary 

Target for electric membership corporations and municipalities is 10% by 2018 and thereafter. 

Commenters stated that North Carolina's REPS statute section 62- 133.8(c)(2) states that "An 
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electric membership corporation or municipality may meet the requirements of this section by 

any one or more of the following" including: (c) Purchase electric power from a renewable 

energy facility or a hydroelectric power facility, provided that no more than thirty percent (30%) 

of the requirements of this section may be met with hydroelectric power, including allocations 

made by the Southeastern Power Administration." Commenters further stated in this case North 

Carolina's REPS allows the use of up to 30% of existing electric hydro generation to be counted 

towards the 10% REPS target. Commenters stated that in EPA's proposal the use of existing 

electric hydro generation is not allowed; so the exclusion of hydro generation would effectively 

reduce the comparable RE secondary target to 7% for EMCs. 

Comment 6: Allow states to adjust the emission rate from "Affected EGUs" to reflect reductions 

in carbon emissions from other fossil fuel carbon emission sources. 

Response 6: There is no building block 3 target generation level expressed for Alaska. Refer to 

section VIII.I for detailed guidance on incorporating CO2 emission reduction measures in state 

plans. 

The following are summaries of the specific public comments under this comment: 

Commenters asserted that the proposed rule does not clearly explain what RE and EE measures 

may be used to adjust the statewide emission rate for compliance purposes. In particular the rule, 

Commenters opined that it is unclear with respect to the extent to which a state must demonstrate 

that RE and EE measures factually result in reduced generation at "affected EGUs." Commenters 

reported that most electric power in Alaska is generated from fossil fuels such as natural gas or 

diesel fuel and carbon reductions are being achieved in many communities not connected to 

"affected EGUs." Commenters stated crediting Alaska for new RE generation not connected to 

"affected EGUs" also makes sense because EPA used statewide RE generation figures for 

Alaska's baseline and target rate. Therefore, commenters requested that EPA clarify that the rule 

would allow states to adjust the emission rate from "affected EGUs" to reflect reductions in 

carbon emissions from other fossil fuel carbon emission sources. 

Comment 7: A consistent definition of renewable energy technologies for the goal computation 

process is requested. 

Response 7: All RE technologies that are used to quantify building block 3 target generation 

levels may be used to demonstrate compliance with the standards of performance. Further, the 

EPA has provided additional guidance on non-BSER measures that may be used to achieve 

standards of performance in section V.A.6 of the preamble. Refer to section VIII.G.1.b for 

further guidance on actions taken to adjust the CO2 emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 
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Commenters noted that certain types of renewable generation which were included in the goal 

setting as zero carbon would not be contributed to compliance demonstration under the proposed 

rule. Commenters requested a consistent definition of renewable energy technologies for the goal 

computation process and for state compliance purposes. 

Comment 8: The EPA's method of incorporating renewable energy into Building Block 3 only 

accounts for renewable generation in a specific state and fails to address the export and import of 

renewable energy between states, e.g., for Wisconsin. 

Response 8: The EPA has finalized a building block 3 methodology that is premised on the 

regional availability of incremental RE, which is described in detail in V.E of the preamble and 

in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's method of incorporating renewable energy into Building Block 3 only 

accounts for renewable generation in a specific state and fails to address the export and import of 

renewable energy between states. Commenters stated that for example, in 2013 Wisconsin 

generated only 48 percent of the renewable energy it used, with the remaining 52 percent being 

imported from other states. 

Comment 9: The EPA is requested to exempt certain states and/or utilities from the proposed 

rule. 

Response 9: The final rule applies to all affected sources. 

The following are summaries of the specific public comments under this comment: 

Commenters described how the EPA assumes that 12% of electric generation in 2030 will be 

from renewable energy sources, but Delaware state law already requires 25% by 2025. 

Commenters noted that Delaware will better the EPA emission rate by 10% and that the state 

already has a carbon tax, a Renewable Portfolio Standard, and an energy efficiency goal. 

Commenters stated that for these reasons, Delaware should be exempt from the EPA plan. 

Commenters described how the Heartland utility procures over 50% of its power supply from 

renewable energy resources, including hydropower and wind power. Commenters stated that the 

EPA treats all utilities equally under the state-centric approach, without regard to the efforts of 

individual utilities to reduce their carbon footprint. Commenters noted that Heartland and other 

utilities that have reduced their reliance on coal-fired generation would be penalized along with 

utilities that have taken no (or minimal) action. Commenters called for the EPA to revisit the rule 

in order to exempt utilities, such as Heartland, that already obtain near or more than 50% of their 

energy supply from renewable energy resources. 
136 

Comment 10: The EPA is requested to account for Florida's limited access to renewable 

resources. 

Response 10: The EPA has finalized a building block 3 methodology that is premised on the 

regional availability of incremental RE, which is described in detail in V.E of the preamble and 

in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted the EPA has not appropriately accounted for the fact that Florida has limited 

access to renewable resources. Commenters referenced the EIA, which stated that Florida had 

zero MWH from wind, geothermal, and hydroelectric generation over the past 12 months and 

only 153,000 MWh from solar power. Commenters requested that the EPA account for Florida's 

limited access to renewable resources and to provide a public comment period on its analysis. 

Comment 11: Examples of current renewable energy projects are described. 

Response 11: The resources and data provided in this comment were valuable in reinforcing the 

role of RE as part of the BSER and in finalizing the building block 3 methodology. 

The following are summaries of the specific public comments under this comment: 

Commenters reported the Wheat Belt Public Power experienced a balanced energy portfolio 

from TriStar G&T. Commenters noted that they used natural gas and coal, and their system 

provided them with a reliable and efficient portfolio. 

Commenters described how EverPower is a developer, owner, and operator of utility-scale wind 

energy projects. Commenters stated that the current fleet of turbines in US currently reduces 

emissions by 127 million tons, which is the equivalent of 20 million cars off the road each year. 

Commenters also stated that wind energy accounts for more than 50,000 jobs across the country, 

and there are 550 manufacturing facilities across 44 states which supply the industry in various 

ways, commenters also noted that the average cost of wind has declined by 43 percent in the past 

four years. 

Commenters noted that RE only represented 2 percent of generation (including hydropower) in 

Ohio in 2012. Commenters noted that Ohio expects to have 9 percent of 2020 generation from 

renewables. Commenters also noted that the EPA stated that RE generation in 2012 was 12% 

nationally with over half of the states having established almost 20 percent of 2020 generation by 

renewables. 

Commenters described actions made by Northeastern Utilities in supporting New England's 

goals. Commenters stated that NU is expanding renewable and low-carbon generation through 

direct investment as well as by developing infrastructure to bring renewable and low-carbon 

resources to market, which includes hydro, to their electricity customers CL&P, NSTAR, PSNH, 

and WMECo. Commenters stated that NU has committed billions of dollars to long-term 
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contracts for the purchase of energy and/or RECs from renewable projects within the New 

England region. 

Commenters described a Seminole Electric Cooperative policy which has been in place for years 

to acquire additional renewable resources. Commenters stated that Seminole's Board Policy No. 

308 expressly commits it to develop and utilize numerous requests for proposals for renewable 

PPAs and entering into those that are cost effective. Therefore, commenters stated, renewable 

options which are reasonably available and cost effective are already being utilized in Florida, 

and the EPA is wrong in assuming that Florida can do substantially more. 

Commenters discussed the current renewable capacity and legislation related to renewable in the 

state of South Carolina. Commenters noted that SC has added new solar power capacity every 

year since 2012. Commenters stated that the South Carolina legislature passed Act 236 in 2014; 

the law increases net metering, increases the size of systems permitted to net meter tenfold 

following a utility commission proceeding, and seeks to make investments in distributed 

generation near 3% of peak generation. As noted by the commenters, the Act is expected to lead 

to 300 MW of new solar generation in SC. Commenters stated the SC is projected to generation 

an additional 500,000 MWh of renewable energy by 2021. 

Commenters described projects in the states California, Iowa, and Colorado in order to illustrate 

how renewable are adequately demonstrated technology. Commenters noted that some states 

already rely on renewable to meet a significant and growing portion of their electric generation 

needs, and they are doing so at reasonable costs to consumers while realizing economic benefits. 

Commenters described how California has a state goal of 33 percent RPS by 2020; the state leads 

the nation in generating capacity from geothermal, biomass, solar PV, and solar thermal projects, 

and it is second in the nation in wind and hydropower generation capacity. 

Commenters used Iowa as an example of how renewable will allow for greater reductions than 

the EPA has projected for most states. Commenters referenced the Natural Resources Defense 

Council in stating that Iowa is now the nation's leader in wind energy generation with 27 percent 

of its power coming from wind; Iowa is planning on retiring 4 coal plants by 2016. Commenters 

noted that Iowa is already on track to meet the 16 percent carbon reduction target set by the EPA 

before the standard is even in effect. Commenters used Iowa as an example of how deploying 

renewable is possible, affordable, economically beneficial, and can result in reductions beyond 

the modest targets proposed by the CPP. Also noted by Commenters is the use of a state solar tax 

credit which lead to an increase in distributed solar by turning rooftops, parking lots, and other 

areas into sources of electricity generation. Commenters stated that Iowa also focuses on energy 

efficiency. Commenters referenced the NRDC and described how Iowa can create over 2,500 

jobs and save an average of $6/month on home electricity bills by including energy efficiency in 

their state plan. Commenters described how electric companies are set to invest over $900 

million dollars on energy efficiency in Iowa over the next five years. 

Lastly, commenters described the efforts made by Colorado to develops its vast renewable 

energy resources, which include wind, solar, biomass, and geothermal; Colorado has an 

ambitious renewable portfolio standard, a substantial rebate program, a strong net metering 

policy, and other market incentives. Commenters stated that Colorado has the fifth largest solar 

PV market and the tenth largest wind market in the U.S. Commenters also stated wind accounted 
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for 11.3 percent of Colorado's electricity generation in 2012; solar PV was growing at a rate of 

over 50 percent. Commenters noted that Colorado was ranked the single fastest growing state 

economy in the nation by Business Insider. 

Commenters described current emissions reductions and efficiency mandates occurring in the 

state of Oklahoma. Commenters stated that Oklahoma utilities have already achieved meaningful 

CO2 reductions and have improved the efficiency of their power-generation fleet. Commenters 

noted that approximately 15 percent of Oklahoma's electricity generation is from wind power. 

Commenters used OG&E as an example; OG&E accounts for almost 15 percent of the state's 

wind generation. Commenters stated that OG&E and other state utilities have incorporated wind 

generation into their portfolios, and they have invested in a major transmission line between 

Oklahoma City and Woodward, Oklahoma. Commenters noted that the carbon intensity of 

Oklahoma's utility sector had been reduced by 18 percent since 2005, and emissions are expected 

to drop even further. 

Commenters described efforts by NorthWestern Energy and their customers to invest in 

acquiring and expanding renewable energy. Commenters noted that in 2006 NorthWestern 

Energy had 5000 MW of new generation projects in Montana, most of which were wind 

generation projects seeking access to markets outside of Montana. Commenters noted that 

NorthWestern Energy's supply portfolio is already comprised of over 50% renewable. 

Commenters described the Mountain States Transmission Intertie (MSTIE) project which 

NorthWestern Energy attempted to develop to provide transmission service for new generation 

projects; MSTIE was a 500 kV transmission path from Montana to southeast Idaho, but the 

project was halted in 2012 as a result of a lack of firm commitments that transmission capacity 

would reach markets and because of the daunting federal permitting processes. Commenters 

raised the question of who would finance and construct the many new transmission lines which 

would be required to allow the expansion of renewable, particularly on the timeline and scale 

proposed by the CPP. Commenters also questioned who would purchase large amounts of 

renewable energy originating in Montana. 

Commenters described current utilization of renewable energy within the state of Texas. 

Commenters described the current amount of wind generation within the state; as of April 2014, 

Texas has 12,755 MW of wind generation capacity which accounts for more than 20% of the 

total U.S. wind capacity and the greatest amount of wind generation of any state in the country. 

Comment 12: Arkansas' starting level of performance value in EPA's proposed goal-setting 

formula is based solely on biomass and wood-derived fuels generation reported to the Energy 

Information Administration and that combusting biomass for energy does not produce a one-forone increase in net CO2 emissions. 

Response 12: The EPA has finalized a building block 3 methodology that is premised on the 

regional availability of incremental RE, which is described in detail in V.E of the preamble and 

in the GHG Mitigation Measures TSD. Biomass is not considered part of the best system of 

emission reduction in this rule and therefore it is not included in goal-setting or compliance 

evaluations. However, similar to other technologies outside of BSER, biomass may be 
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considered as a part of a state’s plan to meet the emission guidelines. A discussion regarding the 

use of some biomass feedstocks for compliance purposes can be found in Section VIII.I and 

Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that Arkansas' starting level of performance value in EPA's proposed goalsetting formula is based solely on biomass and wood-derived fuels generation reported to the 

Energy Information Administration and that combusting biomass for energy does not produce a 

one-for-one increase in net CO2 emissions because biomass is part of the natural carbon cycle. 

Commenters stated that biomass fuels should be treated in the same way as other renewable 

products, such as wind and solar, for compliance purposes since EPA applies the renewable 

energy annual growth in the goal-setting formula to existing biomass generation. 

 

3.3.3 Target level of performance

This section discusses specifics regarding the target level of performance as it applies to building 

block 3. The methodology for quantifying RE target generation levels under building block 3 is a 

modified version of the alternative RE approach from proposal, with adjustments that reflect the 

data and information the EPA collected through stakeholder comments. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Comments expressed support and opposition to regional target setting approach 

based on state RPS requirements. 

Response 1: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E.6 of 

the preamble and in the GHG Mitigation Measures TSD. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII and Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment:

Commenters stated concerns and opposition to the regional approach for setting RE targets based 

on state RPS requirements. 

Commenters stated EPA's calculation of regional RE energy goals is incorrectly premised on an 

average of the "effective" renewable generation in 2020 for each state in the region. Regardless 

of whether a state RPS has been established, commenters stated the EPA should work closely 

with each state to determine the potential for future RE development to serve as a basis for 

assumptions used in BB3. 
140 

Commenters questioned the EPA's justification for using average regional targets instead of a 

state by state approach in determining the contribution of RE growth in calculating the state 

goals. Commenters stated that due to the EPA's methodology, the final RE goals for each region 

are less than the original RE goals the EPA calculated by averaging state RPS goals. 

Commenters asserted that the differences are large and highly variable among the regions, 

ranging from 9% below the original regional goal for the East Central Region, to 40% below the 

regional goal for the North Central region, which the commenters contended was due to a failure 

to determine RE potentials on a state by state basis. 

Commenters stated the CPP should conduct a state by state analysis of RE options instead of 

grouping states by region. Commenters said there is a great deal of variability from state to state 

on the type of RE generation available and the capacity factors and transmission available to 

move the renewable generation to the load centers and each state should be allowed to set targets 

based on its resources. For example, commenters noted they provide renewable generation to 

member owners through PPAs from wind projects in Missouri and Kansas. Commenters added 

the projects, although in adjoining states, have very different capacity factors; for example, in 

2013 for the 4 Missouri wind projects it was 31.4% while in Kansas it was 42.5%. 

Commenters stated grouping disparate states into regions lacks a rational basis. Commenters 

asserted EPA's own data shows that in many of the regions, a single state dominates the 

statistics, such as Texas and New York, which have far greater total renewable resources 

available for achieving the growth rates that EPA's primary proposal would expect. Commenters 

stated that the narrowest margin in total RE resources is nearly 300%, for the North Central 

region, where South Dakota has nearly three times the renewable resources as the state with the 

lowest RE potential, Wisconsin. Commenters also stated that the largest margin is found in the 

Northeast region, where New York has over 100 times the potential RE resources as the state 

with the fewest resources, Rhode Island. Commenters quoted EPRI, who stated, "EPA's 'best 

practices' scenario for developing state-specific renewable energy targets assumes state 

equivalency for regional calculations of resource potential. This assumption is problematic when 

regions are large and encompass states with appreciably different renewable energy resources." 

Commenters said EPA's presumption that RE-based power generation can be equally deployed 

in all states within a given region, despite significant geographic and infrastructural differences 

among such states. As a result, commenters said such an approach dramatically overstates RE 

generation potential in several states, including Pennsylvania. For instance, commenters said 

within the East Central region there are considerable meteorological and topographical 

differences among these states: coastal states such as Virginia and Maryland have much greater 

opportunities for wind and solar development as compared to Pennsylvania and West Virginia, 

commenters said NREL's GIS-based analysis of state RE potentials shows significant differences 

in photovoltaic and both onshore and offshore wind-based generation potentials in Pennsylvania 

and West Virginia as compared to Virginia, Maryland and Ohio, making EPA's methodology in 

calculating RE targets on a regional basis unreasonable. 

Commenters stated EPA inappropriately applies regional average RE targets without regard for 

state-specific factors. For their southeastern states, the commenters said the assumptions would 

increase RE generation ranging from 262% to over 400%. Commenters added that EPA should 
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setting a mass-based target that would be equivalent to a rate-based target, believing a pay-asyou-go approach would make for exact equivalence. 

Commenters said EPA's assertion that states considered feasibility and cost in the political 

process is most likely accurate and that state objectives vary from state to state. Thus, 

commenters asserted state RPS are not a true reflection of technical and economic feasibility. 

Additionally, commenters said the potential cost of RE deployment is sometimes dealt with 

outside of the target itself. Commenters said a number of state RPS laws include cost caps or 

other language that would adjust targets and timing of compliance based upon cost, so the targets 

are responsive to higher than contemplated costs. Finally, the commenters said all state RPS laws 

were initially enacted prior to 2010, with the majority of them enacted prior to 2005. Thus, the 

commenters asserted any analysis performed in relation to cost and feasibility given the local 

resources is likely out of date given the rapid advancement in the cost and performance of RE 

technologies. 

Commenters said BB3 targets should be re-evaluated and noted that a number of states have 

already met the regional target. Commenters noted that other state RPS laws have future year 

adjustments that should be taken into account beyond what was on the books in 2012. 

Commenters supported inclusion of current state RE/EE standards, which are set by law, and 

determination of future goals based on more recent growth rates of RE (2009 to 2013). 

Commenters stated EPA based state RE targets on regional RE rates, even though the regions 

poorly reflect the varied RE potential for many states. Commenters stated, as a result, some 

states, notably states in parts of the Southeast U.S., are assigned RE targets that are manifestly 

impossible to achieve, thus putting additional and unfair burdens on those states. 

Commenters stated that the regional approach essentially assumes that the same categories and 

levels of renewable generation achieved in certain states are achievable in all states in the region. 

Commenters also stated that it applies policy choices made in certain states directly to other 

states in the region with no justification as to whether such a policy is feasible in that state. 

Commenters preferred the alternative approach based on in-state feasibility. However, the 

commenters said that if EPA decides to finalize the RPS methodology for the RE component of 

BB3, EPA must implement the following actions/corrections: 

Finalize the use of out-of-state RECs for compliance because many RPS programs allow the use 

of out-of-state RECs to meet the state commitment, and therefore provide the financial incentives 

for those resources. Ensure that the measures used to develop the regional RPS goals and the 

subsequent state targets are consistent with the measures allowed for compliance. Adjust the 

target setting calculations to include all RE in 2012 used to satisfy the state-specific RPS (not 

just the RE generation located within the state). Adjust the regional RPS goals and the 

subsequent state targets as deemed necessary for the allowance of alternative compliance 

payment provisions in many states' RPS programs, and allow for distributed RE generation in 

state compliance plans. 

Commenters said states portfolio requirements typically can be satisfied with RE generated in 

other states. Commenters said it may be economically preferable for a state not to import some 
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or all of the resources needed to meet the in-state mandate. Commenters stated that by assigning 

state X an initial renewables goal of, for instance, 10% based on that state's portfolio standard of 

that amount, EPA is concluding that the "best" system for that state entails in-state generation of 

10% renewables. But commenters noted that state X's legislature, in allowing the portfolio 

standard to be met with out-of-state generation, did not conclude that generating in-state RE at 

10% represents wise public policy. Thus, the commenters concluded that EPA is arbitrarily using 

state legislation to set an in-state RE target that the legislation itself did not set. 

Commenters stated the proposed and alternative approaches were supportable but warranted 

modification. Commenters supported the UCS alternative approach. 

Commenters did not support the UCS proposal for the following reasons: 

• Use of the 2009-2013 growth rate may overestimate the ability of states to 

develop renewable resources in the long term. The renewable development 

growth rate over this period reflects an unprecedented build out of renewable 

energy, helped in large part by a drastic reduction in prices due to a large 

economic contraction and a global supply glut. 

• The proposal requires states that have made early efforts in expanding renewable 

energy development to do even more. The proposal would lower the interim and 

final goals in these states and constrain the limited flexibility to use other building 

blocks to achieve compliance. Under the UCS proposal, the western region would 

be required increase renewable energy generation from approximately 14% of 

retail sales to approximately 31% of retail sales. 

• The proposal assumes compliance would be facilitated by an unlimited REC 

market, which is inconsistent with the current EPA proposal. 

Commenters said they cannot comment on the technical feasibility and reasonableness of BSER 

under the proposed approach for RE as it would apply to Tennessee as RE is currently not 

managed within a state infrastructure by a single entity that lends itself to understanding potential 

contribution and growth of RE to Tennessee s electricity demands. Commenters said dispatch of 

its generation portfolio, including RE resources, is not based on state boundaries. Commenters 

said that during their current IRP process, they are treating RE as a resource that competes on par 

with more traditional generation options, including fossil fuels and EE. Because the IRP process 

is ongoing, the commenters stated it is undetermined what the future growth of RE will be within 

the TVA service area, making it particularly challenging to posit how a state plan may credit RE. 

Commenters asserted that it is critical that EPA allow states to perform state-specific analysis 

with the assistance of utilities, PUCs and others around RE to determine what is feasible given 

each state's particular circumstances. Commenters said states may then be able to give EPA 

meaningful comments regarding RE's potential contribution to BSER. If EPA is determined to 

use the proposed RE approach, commenters recommended EPA consider incorporating state 

progress to-date in achieving RPS requirements. 

Commenters recommended that the EPA completely replace the current methodology for 

calculating RE targets with a methodology based on progression of technology costs for the two 
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dominant IRGs, wind and solar PV, and based on models of state wind patterns and solar 

irradiance. Commenters stated the progression of technology cost should justify the total amount 

of IRGs deployed nationwide, and the relative usage of each IRG. Commenters asserted that 

EPA would be justified in arguing that no feasible scenario will result in increases in the cost of 

wind and solar PV generators and that all probable technology developments in RE between now 

and 2030 will serve only to increase the general availability of renewable generators. 

Commenters suggested the following: 

Use models of wind patterns and solar irradiance to classify the quality of various regions of the 

country for IRG deployment. EPA could then fill in the highest-quality regions with IRGs until 

13% of total generation (or some other quantity justified by the cost analysis suggested in the 

first point) is provided by those IRGs, i.e. identify the sunniest places, and put solar PV there. 

Identify the places with the highest quality sustained winds, and put wind turbines there. Apply 

that generation to the state goals of the states where the modeled IRGs are located. 

Commenters said that EPA should adjust the RE growth assumptions to more accurately reflect 

the potential in states and regions. As technology and deployment prices continue to plummet, 

Commenters said many states have already, or will soon, meet the level of RE generation that 

EPA assumed that wouldn't be met until 2020. Commenters agreed that the bar should be set 

higher. 

Commenters said because the current proposal will increase generation from renewable sources 

by only 2% above BAU in 2030, it does not meet the BSER standard, but rather represents the 

status quo without taking into account any of the technological and market dynamics that will 

likely drive further RE development over and above current BAU forecasts. 

Commenters said that EPA's growth rate formula serves as a growth cap, constraining states 

from doing more. Commenters stated EPA should eliminate this constraint as many states are 

seeing wind and solar growth rates of well above the highest regional rate of 15%. Additionally, 

the commenters said the EPA model has not accounted for the growth of renewables beyond the 

2020 end date of many state RPS plans. Commenters said assuming renewable levels will be the 

same in 2030 as they are in 2020 is unreasonable and EPA should update its model to better 

account for potential growth in state RPS requirements. 

Commenters said should the EPA default to the current RPS approach in setting state targets, 

several key changes must be made. First, the commenters stated EPA should use the highest RPS 

in a region to set the state targets, not the average RPS. Secondly, the commenters said EPA 

should use 2030 RPS targets, not 2020 targets in setting the state goals. As the compliance period 

for the CPP extends out to 2030, not 2020, selecting the RPS goals for 2020 severely limits the 

RE potential for an entire decade. Commenters added that selecting a 2030 RPS goal sends a 

clear message on the potential for a state to include renewables as part of a balanced state energy 

portfolio by 2030. 

Commenters were opposed to the use of RPS requirements to establish RE targets and stated that 

many RPS targets - including Connecticut's - include the possibility of alternative compliance 

payments, which can be paid in lieu of acquiring RE generation and protect against significant 

ratepayer impacts if the market cost of RE generation exceeds certain levels. Commenters said 
144 

that Connecticut's RPS was enacted in 1998 and was not intended to address climate change. 

Rather, the commenters said it was designed to achieve several objectives: diversify the state's 

energy resource mix to promote reliability, provide a hedge against volatile fossil fuel prices, 

improve environmental conditions by reducing air emissions, create clean energy jobs, and 

enhance the quality of life in the state. Accordingly, commenters said that while many RPSeligible RE technologies can improve environmental conditions by reducing air emissions and 

creating clean energy jobs, ultimately technical and economic feasibility dictate which RE 

technologies are brought to market to satisfy RPS targets. Commenters stated these technical and 

economic circumstances are not necessarily aligned with the CPP goal of reducing CO2 

emissions. 

Commenters were generally supportive of RE as a means to reduce carbon emissions but 

opposed EPA's proposed methodology for estimating RE's contribution to reduced carbon 

emissions, and preferred the Alternative RE approach. Commenters stated they have significant 

concerns with the proposed approach, including the issue that Tennessee currently has no RPS 

requirement, nor does it have a traditional PUC or single entity charged with keeping track of RE 

generation. Also, the commenters said the use of RPS requirements established within other 

states, even if only applied to states within a similar region, is unreasonable for setting BSER. 

Commenters stated using RPS requirements to estimate potential RE growth targets is unsound 

given that often such requirements are established without any consideration to resource 

potential, costs, and feasibility with respect to achievability. 

Commenters supported EPA including in its guideline a system that will allow the power plants 

that serve such areas to take advantage of the energy efficiency and renewable energy 

opportunities available in states without affected power plants and recommends that EPA use the 

regional alternative approach as described in the October 30, 2014 NODA. Commenters also 

recommended that EPA include the potential renewable energy from such areas in its 

determination of the regional potential for renewable energy, which would provide for that 

potential to be included in the targets of states in the region. 

Commenters said EPA's alternate proposed approach addresses some of the key flaws in the 

proposed approach by focusing on state RE potential instead of individual state RES 

requirements. However, the commenters said this approach relies on unsubstantiated 

assumptions about the rate at which states can develop renewables and the future costs of RE 

generation technologies. Commenters stated EPA's proposed primary and alternate methods for 

setting RE generation goals raise significant concerns about whether the proposed goals can be 

achieved by the states. Commenters asserted the regional approach inappropriately assumes that 

RES mandates are proxies for RE potential and that neighboring states have similar RE potential. 

Further, the commenters said EPA's use of RES requirements fails to consider key design 

features of state RES programs that serve to reduce the stringency of these programs. Finally, the 

commenters said EPA fails to consider the technological challenges of integrating additional 

renewable generation into the interconnected power system and how the other proposed building 

blocks and the interconnected nature of the power system could affect a state's ability to achieve 

the proposed levels of RE generation. 

Commenters asserted that renewable should be used in the compliance determination for CPP 

but not factored in the state goal calculation as a requirement. Commenters said RE is neither as 
145 

reliable nor does it generate the same quantities of electricity as traditional generation. Therefore,

commenters stated it is not realistic to make the use of RE a required step in achieving 

compliance but should be left up to the states for determining credit towards compliance. 

Commenters said EPA's approach ignores the differences and unique challenges that exist from 

state to state when it comes to increasing RE deployment and provides no weight to states that 

have chosen not to implement an RPS. Commenters stated RE resources can vary greatly 

between neighboring states and even within a state. Further, the commenters said state RPS are 

often aspirational and contain "safety valve" mechanisms that slow or pause requirements if, for 

example, electricity rates increase above a threshold level. Thus, commenters said just because a 

state has adopted a state RPS requirement does not mean that the technical or economic 

achievability of the standard has been demonstrated for that state or its neighboring states. 

Commenters said most state programs have these fail-safe or safety-valve provisions to ensure 

that the aspirational goals of the programs will not endanger reasonable cost and reliability 

requirements. 

Commenters stated that EPA should update its formula to account for the displacing effects of 

RE. Commenters said EPA's approach in the NODA is inconsistent with EPA's treatment of 

BB2, in which increased utilization of natural gas plants is presumed to displace equivalent 

amounts of coal generation. Moreover, commenters stated the approach is contrary to EPA's 

description of its RE assumptions in the original proposal. Commenters said EPA's calculations 

did not substitute or reduce generation from fossil-fired resources in the amount associated with 

new RE resources, with the result that EPA's target-setting fails to capture the full extent of 

available carbon emission reductions. When EPA sets final state targets, commenters asserted it 

should use the corrected formula proposed in the NODA to ensure that RE is given full credit for 

its carbon reduction benefits. Commenters added that because of the displacing effects of RE and 

EE on fossil units, reliance on the four building blocks in target setting would result in overcompliance, i.e., Virginia would achieve a target rate lower than its 2030 goal. Commenters 

stated this is an important reason to view application of the building blocks for target-setting as 

distinct from their use for compliance. Commenters said it also shows that Virginia's route to 

compliance is less burdensome than a narrow focus on the target-setting would indicate. 

Commenters asserted Virginia's pursuit of measures under BB 3-4 will result in substantial 

carbon reductions, especially if those measures are allowed to displace fossil generation on a 

pro-rata basis. Commenters suggested crediting fossil MW displaced between 2012 - 2020 

toward compliance. Commenters said this would cushion the harsh effects of the interim goals if 

any interim goal would remain in a final rule and would create an economic incentive for 

companies to bring on renewable resources as quickly as possible. Commenters added that this 

would benefit both the environment and the economy.

Commenters stated that adequately accounting for the spatial and temporal distributions of 

renewable resources and their associated costs is an essential consideration in regulatory design; 

however, the primary approach for calculating state-specific RE targets assumes state 

equivalency for regional calculations of resource potential. Commenters stated that this 

assumption is problematic when regions are large and encompass states with drastically different 

renewable resources. Commenters stated given the sizeable areas spanned by the 6 EPA regions, 

there is evidence of differing levels of RE resource adequacy and availability across these 

proposed regions. 
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Commenters stated EPA's reliance on regions is misplaced and EPA makes inaccurate estimates 

of RE technical potential. Commenters stated that in developing its regions for regulating 

purposes, EPA assumed that neighboring states can achieve similar levels of RE generation and, 

therefore, grouped states into regions based upon NERC regions and RTOs. Commenters stated 

neither NERC nor the RTOs considered RE technical potential in the formation of their regions. 

Commenters stated the Agency justifies the assumptions by claiming "[s]tates within each region 

exhibit similar profiles of [renewable energy] potential or have similar levels of renewable 

sources." Commenters stated this claim, however, is inaccurate, as highlighted through proper 

analysis of the Southeast region. Commenters stated EPA's referenced NREL analysis compares 

each Southeast state's combined solar, wind, and biomass technical potential and shows a 198% 

difference between the highest and lowest technical potentials. Commenters stated that these 

states clearly do not have "similar" levels of renewable resources. Commenters stated other 

regions also produce incongruous results. Commenters provided the example that Texas and 

Louisiana are grouped together in the South Central region; however, per NREL's technical 

potential analysis, the Texas solar, wind, and biomass technical potential is 1,512% greater than 

Louisiana's technical potential. Commenters stated that if EPA's assertion that the states within a 

region maintain similar levels of renewable resources were true, which it is not, it contradicts the 

state-level targets produced by the Agency. Commenters stated EPA's BB3 contains different RE 

targets for each state within a region. Commenters stated, for example, there are 8 states in the 

Southeast region and yet 3 of the states (Alabama, Florida, and Georgia) have more stringent RE 

targets than North Carolina, whose state RPS legislation is used to establish the Southeast's 

target. Commenters also stated Florida's RE target for BB3 is 89% higher than North Carolina's 

target. Commenters stated that EPA's own outcomes contradict its assertion that states within a 

region exhibit similar renewable resource potential; these disparate starting places and outcomes 

strongly indicate that EPA should not rely upon a regional approach as the foundation for setting 

RE targets. 

Commenters said the proposed regional approach using NERC regions does not reflect 

similarities between states based on RE potential. Commenters stated a more precise and 

comprehensive basis for state clustering would be informed by the consideration of costs, 

competition and regulatory schemes. Even if renewable resources across states in a region have 

similar technical potentials, the commenters said the approach does not consider how these 

profiles may have dissimilar market potentials. Commenters said identical standards for groups 

of states clustered by their technical potentials are not necessarily reflective of relative 

compliance burdens, systems of cost recovery, and siting concerns. Commenters said that not 

accounting for this cost information yields a method that may overlook opportunities for lowercost reductions that would be exploited using a more flexible approach with more precisely 

drawn regions. 

Commenters said EPA's approach to setting the RE goals for each state by dividing the states 

into contiguous regions is illogical and inequitable. For example, commenters stated in a DOE 

study relied on by EPA, Arizona has 5.8% of the total national RE potential, but Arizona has a 

RE goal based on only 3.9% of its 2012 generation; by contrast, West Virginia, which has 0.07% 

of the national RE potential (1.2% of Arizona's) has an RE goal based on 14% of its 2012 

generation, almost 4 times as great as Arizona's. Commenters added that if a state has done an 

expert assessment, it should stand as the RE goal for the state unless EPA can challenge it on a 

sound technical basis. Furthermore, commenters said that an expert assessment done by one state 
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cannot be assumed to have any validity for another state simply because they were arbitrarily 

grouped together by EPA. 

Commenters said EPA's methodology ignores the unique qualitative characteristics of each of 

the states in the region that should influence the setting of targets. For example, commenters 

noted that PA is a major generation state and net exporter of electricity with a large population 

and industrial load, while MD and DE are far smaller with reference to land areas, population, 

generation and load but are given equal weight in calculating RE potential. 

Commenters stated EPA's approach to determining regional RE generation targets is flawed in 

several respects. First, the commenters stated, it is arbitrary for EPA to assume that each state is 

capable of achieving similar levels of RE generation as its neighboring states. Commenters noted 

the Agency acknowledges that state RPS goals reflect "policy objectives including both 

feasibility and costs" and not merely RE potential. Commenters stated these policy objectives 

may vary widely from state to state within individual regions, and RE potential is highly statespecific and depends on each state's natural resources (e.g. insolation, availability of wind 

energy, biomass resources, etc.), existing transmission infrastructure, and current RE 

development. Commenters stated that the proposed "regional" approach is simply based on 

NERC regions and does not reflect similarities between states based on RE potential. 

Commenters said EPA's BSER goal calculation approach does not appear to recognize that the 

Kansas RES goal is based on peak demand capacity (in MW), whereas state BSER targets are 

based on net electricity generation (in MWh). Because there is no direct or predictable 

correlation between the extent of RE deployment (measured in MW) and RE utilization 

(measured in MWh), the commenters said it is impossible to accurately translate capacity 

directly into generation (yet, this is the approach that EPA took when calculating the BB3 RE 

goals for each state in the South Central region). 

Commenters stated EPA's failure to account for the precise nature of existing state RPS goals 

leads to unreasonable results. For example, the commenters stated, the RE target for the South 

Central region is based entirely on Kansas's 2020 RPS target of 20% RE capacity. Commenters 

stated that because actual generation is significantly less than capacity, a 20% target based on 

capacity would not come close to approximating a 20% generation-based RE target. Moreover, 

the commenters stated, in adopting its RPS, Kansas was building upon its experience with 24.2% 

average annual growth in wind from 2008 to 2012. Commenters stated no other states in the 

South Central region have a generation-based RPS; the Texas RPS is also capacity-based. Thus, 

the commenters stated, EPA erroneously imputed a RE generation-based target to the entire 

region that does not exist in any state in the South Central region. 

Commenters said that instead of this "average" calculation, EPA should develop in the final CPP 

a calculation of renewable generation targets consistent with principles of rationality and 

efficiency. 

Commenters stated that in the Southeast and South Central regions, only one State in each region 

has a RPS in place to set the regional target, and yet EPA assumes that every state in these 

regions can meet targets based on that single state's RPS. Commenters stated EPA fails to 

provide a systematic look at the actual renewable potential across the states in these two regions 
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and fails to explain why it assumes that one state in each of these two regions is representative of 

what all states in these regions can reasonably accomplish. Commenters stated EPA's failure to 

factor states without any RPS requirement into the regional averaging is irrational and arbitrary. 

Commenters stated that EPA's proposal fails to recognize or consider that many state RPS 

policies have cost caps to ensure that the renewable mandates are not overly costly and that these 

costs caps can operate to limit future renewable expansion that EPA projects is needed to achieve 

statewide goals. 

Commenters stated that in the South Central region, EPA used the Kansas standard, but 

improperly extracted the numeric standard without applying the other determinates in the Kansas 

RPS statute. Commenters stated that the imaginary Kansas RPS that EPA applies to establish the 

regional goal is based on energy, yet the actual Kansas RPS is a capacity-based requirement 

established for seven utilities operating in-state, it does not apply to any other cooperative or 

municipal utility in the state, nor does it apply to the load served by these utilities in other states. 

Commenters stated that the Kansas RPS also treats as renewables certain resources that EPA 

does not treat as renewables in the guidance - specifically hydropower. Commenters stated 

Commenters stated these failures to accurately evaluate the Kansas RPS and adjust the region's 

renewable goals make the region's goal irrational, unsupportable, and capricious. Further, the 

commenters stated, since the Kansas RPS does not apply to utilities in the state other than the 

seven named, or to the loads served by these utilities in other states, even if EPA were to adopt 

the real Kansas requirements as indicative of a region-wide target, the target would have to be 

reset to represent a value consistent with the proposal's definition of renewable generation under 

BB3. 

Commenters also stated that Arkansas has no state RPS and limited capacity for developing 

renewable resources as it does not have the wind resource potential of Kansas, Nebraska, 

Oklahoma, or Texas. Commenters stated it has small amounts of solar resources using current 

technologies. Arkansas has the potential for developing biomass resources, but it is currently 

unclear whether biomass generation will be considered CO2 neutral in the final rule. Commenters 

also stated it has existing hydropower with some potential for development. Commenters 

continued that under the proposal, Arkansas has a 20% RE-based target in 2029 of 4790 GWh, 

but given that the Kansas RPS is capacity-based, not energy-based, the Kansas RPS is actually 

12% energy-based. Commenters stated therefore Arkansas' RE target in 2029 should be 12% 

energy-based, or at most 2872 GWh, 60% lower than the proposed target. Commenters stated 

thus, if EPA were to adopt the real Kansas requirements as indicative of a region-wide target, the 

target should be no greater than 12%. 

Commenters stated EPA's renewable energy goal for Arkansas is based on the Kansas 

Renewable Portfolio standard (RPS). Commenters stated that standard is based on nameplate 

capacity of the renewable resource, and not on the energy generated. Commenters stated also, 

Kansas counts existing hydropower and includes a bonus multiplier for in-state renewable 

generation. Commenters stated because of this, the Kansas RPS appears to be more stringent 

than it actually is, and Arkansas, as a member of Kansas's region, has been given significantly 

overstated renewable resource goals. Commenters stated in fact, in the preamble to the proposed 

rule, EPA states that the renewable standard will be set based upon renewable generation and not 

capacity. Commenters stated however, this does not seem to have been the case with Arkansas's 

region. 
149 

Commenters stated EPA's broad application of regional RPS targets is flawed because it assumes 

that only those states that have enacted RPS requirements have assessed the feasibility and cost 

of RE standards. Commenters referenced the Virginia State Corporation Commission comments 

on the Proposed Guidelines, which stated that there are many reasons, including geographic and 

economic, why states have approached renewable generation differently. Commenters stated the 

decisions of other states to impose RPS requirements were not intended to (and cannot) 

demonstrate what is achievable in Virginia. 

Commenters said the state RE targets are unreasonably aggressive and do not take into account 

factors affecting the actual RE growth potential in each state and that the RE generation goals 

that EPA has calculated for many states are unachievable. Commenters stated EPA's 

methodology for determining these goals is fatally flawed because it arbitrarily ties each state's 

goal to the RPS goals of other nearby states, which often do not actually require as much 

RE generation as they appear to and reflect each state's highly unique mix of RE potential. 

Commenters stated EPA's failure to account for factors specific to each state's potential RE 

generation leads to several inequitable and unreasonable results. 

Commenters also said the targets are based on overly aggressive assumptions and, for Texas, 

Arkansas and Louisiana, are not achievable, particularly in the case of Texas since there are 

already significant amounts of existing RE capacity in the state. Commenters stated that even 

with all the transmission built in Texas for RE in recent years, the transmission system is not 

capable of handling this additional generation. Commenters stated it would also require much 

more backup generation to be built to firm up the variable renewable resources (EPA ignores the 

additional carbon emissions from this back-up generation). Commenters stated and it could have 

serious distorting effects on the energy markets. Commenters also said that of the states in the 

South Central Region, only Kansas and Texas have an RPS, although Texas uses a fixed MW 

standard that equates to a much lower percentage. EPA has set the final RE target for Texas at 

20% - which commenters said seems rather arbitrarily tied to Kansas whose electricity sector is 

1/10th the size of Texas'. 

Commenters also stated that EPA's analysis reflects an oversimplified understanding of the 

nature of state RPS goals. Commenters stated that some state RPS goals are voluntary, while 

others only establish requirements for large electric utilities or apply less stringent secondary or 

tertiary RPS goals to smaller utilities, public power utilities, or cooperative utilities. But, 

commenters stated, the Proposed Rule applies the more stringent primary RPS goals to all instate generation and treats all goals as mandatory, artificially leading to more aggressive 

renewable energy generation targets. Commenters stated that in addition, some state RPS goals 

allow utilities to comply through mechanisms other than actually developing in-state renewable 

energy generation. 

Commenters stated EPA developed BB3 goals based on an arbitrary assignment of states into 

regions that presume that neighboring states will have similar opportunities for the development 

of renewable resources. Commenters also stated that the Agency then used an average of 

mandatory state renewable portfolio goals in these regions to assume that what may be 

technically and economically achievable in terms of renewable development and generation in 

some states will be achievable by all states within each respective region. Commenters stated 

that this approach is flawed in that EPA: 
150 

• mischaracterized the design and overstated the stringency of existing state RPS; 

• incorrectly assumed that existing RPS represent achievable targets for renewable 

resource development in other states; 

• ignored the renewable energy experience and perspectives of states with no RPS; 

• did not fully consider significant geographic and economic differences between 

states in a region; and 

• relied upon "effective" 2020 renewable energy targets that have not been 

adequately demonstrated and may not be representative of specific RPS 

requirements. 

Commenters stated there are serious problems with the RPS-based methodology. Commenters 

stated each region spans a large swath of the country, encompassing states with vastly different 

renewable generation potential. Commenters provided the example of South Central region, 

which includes both Kansas, which has the third best wind resources in the country, and 

Louisiana, which is ranked 48th in the country in wind resources. Furthermore, the commenters 

stated not all states have RPS requirements; EPA nevertheless assumed that those states could 

achieve renewable increases based on the RPS requirements of other states in their region. In 

fact, commenters stated, targets for states in two regions - the South Central and Southeast 

regions - were based on a single state's RPS. Commenters also stated EPA failed to consider that 

increased dependence on renewable energy generation will require construction of additional 

transmission lines to access areas that have higher-grade wind and solar resources, which are 

generally remote areas. Commenters stated that states must begin to achieve emission decreases 

by 2020 to meet their respective interim goals; this does not allow for enough time to build the 

transmission lines needed to implement the RE requirements under BB3. Commenters also stated 

that the Existing Source Proposal leaves many key questions concerning the implementation of 

the RE requirements unanswered, such as: "Upon whom are the requirements placed? Under 

what authority? Which state gets credit- the energy importer or exporter - for RE generation that 

crosses state lines? How will the costs of the renewable resources needed to attain state goals be 

allocated and who has the responsibility to mandate such allocations?" 

Commenters stated EPA's proposed approach may overestimate what is achievable in some 

states, particularly those that do not have existing RES mandates, and ignores policy decisions 

that have already been made in those states. In addition, commenters said EPA failed to 

recognize that certain RES design elements can have the effect of reducing the amount of in-state 

generation necessary for compliance. Further, commenters said EPA did not adjust state RES 

goals to reflect the fact that generation from existing hydropower generation and other resources 

cannot be used for compliance under the proposed 111(d) guidelines, despite the fact that many 

state RES goals rely on these resources. Commenters said EPA also has indicated that some, but 

not all, biomass that is eligible under state RES programs could be used for compliance, adding 

further uncertainty to the RE assumptions in the proposed guidelines. 

Commenters said EPA did not recognize that significant differences often remain among states 

within a given region, and what may have been demonstrated to be achievable in one state may 
151 

not be achievable in another. Commenters stated energy market prices, geography, topology, 

transmission, load, seasonality, endangered species-related siting rules, state or local permitting 

and siting rules, congestion and existing energy mix are just a sample of the many factors that 

play a role in where renewable resources are developed. 

Commenters said states within a region can have very different solar or wind potential - for 

example, Louisiana and Kansas have dramatically different wind resource potential, but are 

unreasonably included in the same region. Commenters asserted that NERC further highlighted 

this problem with the BB3 methodology in a recent report, which found that "[g]iven the 

combination of a low population, large land area, and very high wind resource availability, 

Kansas has relatively low costs to meet its RPS. However, Louisiana (ranked #48 in wind 

resources and double the retail sales) is assigned the same non-hydro renewable target. To put 

these two States in the same region sets unattainable targets for Louisiana." Initial Reliability 

Review at 12. Commenters said that if EPA chooses to retain a regional approach to developing 

state RE goals, the Agency should allow a state to change regions if it can demonstrate that 

another region is more representative of its RE potential, or alternately allow a state-specific 

analysis of what is achievable within a state. 

Commenters said the regional approach will place increased pressure on states with high 

capacity factor wind generation to build more wind than they currently need for their own usage. 

Commenters stated this approach would require planning and construction of additional 

transmission infrastructure in their service area for wind that will not be delivered within that 

area. A key issue, Commenters stated was how entities or regions outside that region would pay 

for such additional transmission service and infrastructure. Commenters stated issues like these 

need to be addressed by EPA and FERC and time given to plan and construct additional 

transmission infrastructure in order to accommodate this suggested modification. Further, 

Commenters asserted that any definition of "region" used by the EPA in the establishment of 

BB3 targets should be based on the boundaries of organized market. 

Commenters said EPA cannot set targets assuming that multistate plans will be developed and 

implemented as it could result in inflated RE goals for states that are not able to engage in multistate compliance plans. Moreover, the commenters stated that generation planning is typically 

done at the state level (or service territory level or organized market level in areas where RTOs 

or ISOs exist). Commenters also stated it can take many years, along with many changes to 

existing rules and regulations, to adapt and evolve toward a regional approach in electric 

generation planning. Commenters indicated that the guidelines do not provide sufficient time for 

states to design and implement the regional compliance approaches needed to achieve the 

proposed RE goals. 

Commenters said EPA's calculation of regional RE goals does not recognize some states existing 

RES requirements, making the renewable goal in some regions more stringent than if it were an 

average of all states in the region. Commenters said EPA ignored the fact that some states have 

made a determination that their RE resources are not sufficient for mandating a required level of 

RE generation in a particular state. Commenters said EPA's approach to averaging state RES 

mandates to develop a regional RE goal is particularly problematic in the Southeast and South 

Central regions, where many states do not currently have RES requirements because it ignores 
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the question of whether the other states in these regions have the same potential to deploy an 

increased amount of renewable generation. 

Commenters said a state's RES requirements reflect that state's assessment of the potential to 

deploy RE generation and RE-related policy decisions and a range of policy choices that have 

nothing to do with technical RE potential. Accordingly, commenters said that if EPA continues 

to average state RES mandates to derive regional RE generation goals, they should include all 

states in calculating the average, even those with no RES requirements to provide an actual 

average of the state requirements in the region and ensure that one state's RES is not arbitrarily 

and inappropriately imposed on all other states in the region. Similarly, commenters asserted 

EPA should control for states with significantly more aggressive RES requirements when 

determining regional RE goals. 

Commenters stated EPA's proposed policy-based approach, which groups states into regions and 

averages the effective 2020 generation-based RPS for states in each region to arrive at individual 

state goals, results in arbitrary state renewable targets based on political considerations rather 

than technical availability. Commenters stated for example, only one state in the Southeast has a 

qualifying RPS (North Carolina) and that single state policy results in EPA assuming all eight 

states in the EPA-defined Southeast region can meet the same target. Commenters stated it is 

unclear why one state's policy implies that other states can meet the same level of renewable 

deployment, and conversely, a lack of an RPS does not indicate a state could not deploy 

renewable generation. Commenters also disagreed with EPA's conclusion that existing state 

policies "support the feasibility and costs" associated with the scenarios developed by EPA. 

Commenters stated the existing state policies reflect policy decisions made in the states with the 

RPSs based on the myriad objectives of the state (which may not be the same as EPA's objective 

here; e.g. carbon reduction) and the projected cost and availability of renewable energy at the 

time the state targets were passed. Commenters stated that in some states, costs are moderated 

with alternative compliance payment provisions that limit the need for renewable generation if 

costs exceed expectations. Commenters also stated many state RPS targets were also predicated 

on the existence of a national market for renewable energy credits to limit costs and increase 

availability of qualifying resources, which include many resources not considered for compliance 

under the proposed rule, such as large hydropower. Commenters stated that while EPA refers to 

that market, it does not use the market to justify the target renewable energy levels. 

Several commenters said the goals do not account for load growth and that actual load growth 

should be correctly identified and reflected in CPP projections. Commenters noted, however, NV 

Energy's load projections have tended to overstate load growth and, thus, historical trends should 

be carefully analyzed. Commenters said the load or demand for electricity is expected to increase 

during the period of performance from 2020 through 2029 and some of this increase in demand 

may be supplied by new power generation facilities not subject to the CPP, but a portion may be 

generated by tapping unutilized capacity in existing EGUs. Commenters said this will require a 

commensurate increase in RE/EE to maintain compliance with the rate-based goal and that 

estimates of the rate of load growth vary by state and region. To assist states in their analysis of 

the proposal and state plan preparation, commenters recommended that the EPA use available 

load growth projections to adjust target RE values to better approximate the actual levels of RE 

that may be required to meet state rate based goals. 
153 

Commenters said if EPA elects to redistribute RE development potential on a regional basis, 

Maine supports reallocation on a mass-based allocation similar to the manner in which RGGI 

allocates emission credits, or by peak-load allocation as done in ISO-NE for pooled transmission 

facility costs. Commenters said that because most fossil-fuel EGUs are in operation more so 

under regular peak conditions than low-load conditions, the peak-load allocation is most 

representative of times when the most units to be regulated by EPA's 111(d) proposal would be 

in operation. For this reason, the commenters added that the peak-load allocation already in use 

in New England is a technically appropriate allocation method. 

Comment 2: Commenters had concerns on use of “main tiers” to determine effective RE levels. 

Response 2: The EPA is not finalizing an approach to building block 3 that relies on state RPS 

requirements to set a regional target for RE. The final building block 3 methodology is described 

in detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that in the GHG Abatement Measures TSD, EPA states that they "added 

together each state's tiers, as standardized by DSIRE, to determine states' effective RE levels for 

2020, but excluded tiers, other than main tiers, that include energy efficiency or any fossil fuel" 

(p. 84). Commenters questioned if it is EPA's intention to include RPS "main tiers" even if they 

count EE or fossil fuel (i.e. CHP) for the target-setting. 

Comment 3: Commenters expressed concerns regarding approach to state calculations and 

varying energy mix. 

Response 3: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated the characteristics of each state's renewable generation mix vary significantly 

in the South Central Region, which encompasses four NERC regions and three RTOs: (i) the 

SPP (Kansas, Nebraska, Oklahoma and the Texas Panhandle); (ii) ERCOT (remainder of Texas); 

and, (iii) MISO (Arkansas and Louisiana). Commenters also stated that like the Southeast 

Region, EPA's regional renewable generation target for the South Central Region is based on the 

2020 RPS goal of one state: Kansas. Commenters stated Kansas's 20% target in 2020, which is 

based upon capacity and not generation, is dominated by a single fast-growing renewable source 

(wind) and is applied to states within the region with an entirely different renewable generation 

mix and in different RTOs. Commenters stated that EPA fails to distinguish the big difference 

between renewable capacity and generation and the intermittency of renewable resource (e.g., 
154 

wind stops blowing). Commenters provided a table to illustrate how EPA misused the Kansas 

RPS standard in Arkansas. 

Comment 4: Commenters had concerns regarding overestimation of targets 

Response 4: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that industrial CHP facilities in Arkansas burning wood or wood derived 

fuels comprised 95% or more of the state's total renewable generation between 2008 and 2012. 

Commenters stated these industrial CHP sources experienced 1.6% average annual growth 

between 2008 and 2012; however, EPA applied the Kansas RPS, in which wind comprised 

almost 100% of state's total renewable generation, at a 24.2% average annual growth between 

2008 and 2012. Commenters stated EPA's application of a RPS from a state with rapidly 

increasing renewable wind energy to a state whose primary RE source has remained almost flat 

results in a significant and unreasonable overestimation of renewable generation in that state. 

Commenters stated EPA also failed to account for factors limiting certain renewable generation 

in particular states - factors that would prevent certain states from meeting their goals. 

Commenters noted that Arkansas cannot reasonably quadruple its growth rate of 1.6%, as it 

would be required to do to meet its RE target. Similarly, commenters stated Kentucky has very 

low wind and solar generation potential. 

Comment 5: Commenters were concerned regarding use of solar and EIA’s forecasts and EPA 

IPM results. 

Response 5: The EPA has updated its cost and performance assumptions for utility-scale solar 

technologies. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that if EPA has authority to include RE in its goal setting methodology, EPA 

would need to thoroughly examine each state's renewable generation mix and as well as EIA's 

RE forecasts and EPA's own IPM results.

Commenters stated EPA should more accurately account for the growth trajectory for solar 

power, including reductions in cost that will in turn have a greater impact on solar energy's 

ability to decrease emissions. 
155 

Comment 6: Commenters stated goals need to recognize states individual circumstances. 

Response 6: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said BB3 has flaws that work against certain regions and states. Commenters 

asserted the RE regional goals should be computed based upon all states in the region and 

reflecting the appropriate Arizona RE goal. Commenters asserted that each state's RE MWh was 

limited to its 2020 RPS goal - in Arizona, the total RE energy could not exceed 10%. 

Commenters stated this has the effect of lowering a state's lbs CO2/net MWH goal and accounts 

for 5% of the reduction in Arizona's proposed goal. Commenters said that in calculating the 2020 

effective RE levels for the Western region of 20.625%, EPA left out the states with a zero target. 

Commenters asserted these states with zero targets should be included in the calculation of the 

average, which would reduce the average to 16%. Commenters agreed that states with no RPS 

(zero values) should not be excluded from the calculation. 

Commenters stated EPA arbitrarily concluded that the RE capacity of some states can be used to 

set RE goals for other states, which have different resources and economic circumstances. 

Commenters said the states cannot be compared in the way EPA has done. Commenters asserted 

EPA should revise its methodology for renewable energy based on resource availability and 

market realities. 

Commenters said EPA should consider the disparities in renewable potential between states, 

noting, for example, Arkansas is in an unusual position in that it sits next to windy states, but has 

little wind potential of its own. Commenters stated the same wind turbine will produce 

considerably more electricity for the same investment in Kansas, Oklahoma, or Texas than it will 

in Arkansas. For that reason, Commenters said EPA should consider both the regional potential 

and the in-state potential in setting its target. Most importantly, Commenters urged EPA to 

structure its rule in a way that encourages placement of RE facilities in consideration of the 

location of the resources, and not state lines on a map. 

Commenters stated EPA's calculation of RE goals in BB3 is flawed because it ignores individual 

state determinations in favor of regional RE benchmarks that are arbitrarily assigned. 

Commenters stated that concerns regarding the applicability of RPS programs from one state to 

another, as well as the methodology used to calculate state RE goals are further exacerbated by 

EPA's arbitrary design of six regions in BB3. Commenters stated that in defining these regions, 

EPA incorrectly assumed that what may be achievable, but not yet demonstrated, in terms of RE 

development and generation in some states (with the aid of subsidies from the Federal 

Production Tax Credit and from the investment of out-of-state utilities and customers) is 

achievable by all states within each respective region. Commenters said EPA assumes that states 

within each region exhibit similar profiles of RE potential or have similar levels of renewable 

resources. However, commenters stated EPA's rationale is not supported by the technical 

information referenced by the agency in the proposed rule or by the consideration of RPS in the 
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regional calculations. Commenters said examples of conflict between EPA's characterization of 

individual state RPS and the technical data used to support EPA's proposal are provided below 

for the South Central, Southeast, and East Central RE regions. Commenters stated that in each 

region, an objective assessment of the existing state standards and technical data evaluating 

resource availability and cost would result in much lower targets than those established in EPA's 

guideline. 

Commenters stated that the South Central region is not homogenous in terms of potential 

renewable resources as four states have far superior resource potential, greater access, and lower 

cost renewable development options. Commenters stated that as a result, Arkansas and Louisiana 

are unfairly and inappropriately penalized and burdened with unrealistic goals that cannot be 

cost-effectively achieved through the development of in-state resources. Commenters stated that 

to achieve their goals most cost-effectively, these states would have to rely on the development 

of out-of-state resources without certainty regarding if or how such projects would be treated by 

the host states. Commenters also stated that in terms of differences in renewable resource 

potential, consider the average wind speed or solar resource across the region, a key variable in 

evaluating the feasibility of wind energy developments, and the availability of potential solar 

resources. Commenters provided figures from the U.S. DOE NREL that indicate that there is 

significant variability across the U.S. and within the South Central region, which indicates 

significant differences in the opportunities for developing wind energy and solar resources. 

Commenters stated Arkansas and Louisiana bear a far closer visual resemblance to the states in 

the Southeast region (Alabama, Florida, Georgia, Kentucky, Mississippi, Tennessee and the 

Carolinas) than they do to the states in the South Central region. 

Commenters also stated that while EPA claims to have based its determination of "achievable" 

state goals based on average values for existing state programs, only one state in the EPAdefined South Central region, Kansas, has a mandatory RPS that was considered by EPA. 

Therefore, commenters stated, the Kansas RPS, and only the Kansas RPS, is the sole basis for 

determining the RE goal for all states in the South Central region, regardless of differences in the 

geographic potential or cost-effectiveness for achieving such a goal among states in the region. 

Commenters also stated EPA also gave no consideration to provisions within the Kansas RPS, 

such as implementation of cost mitigation measures and in-state renewable credit multipliers, 

that reduce the overall stringency of the program. Commenters quoted the Kansas Corporation 

Commission that "Kansas' standard differs from other state's RPS in that it is based on gross 

generation capacity rather than total retail sales. In general, the gross generation capacity is the 

amount owned or leased by a utility minus the auxiliary power used to operate the facility." 

Commenters stated that based on EPA's own statement that it "did not [intend] to include [RPS] 

targets that were capacity-based," the Kansas RPS should not have been considered in 

determining the renewable energy goal for the region, and the South Central region would have 

no qualifying RPS upon which to base a regional goal. 

Comment 7: Commenters noted varying state-level technical resource potential. 

Response 7: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 
157 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that Section 4 of the GHG Abatement Measures TSD assumes that all states 

in each region can achieve by 2030 the average of the 2020 requirements of RPS states in that 

region. Commenters stated that to accomplish this, the TSD assumes that states within each 

region exhibit similar levels of renewable resources, an inference made from state-level technical 

resource potential projections reported in a NREL GIS-based analysis. Commenters stated that a 

review of this NREL report reveals a rather wide variation in renewable technical potential for 

specific regions and by renewable resource; for example, the technical potential for biomass 

varies significantly across virtually all regions. Commenters also stated additionally, in the 

NREL study, all biomass feedstock land resources were considered available for biopower use. 

Commenters stated competing uses of available land and biomass resource, such as for biofuel 

production, were not considered. Commenters stated this could further affect the technical 

resource potential for biopower within a region. Commenters stated the variation of renewable 

resource technical potential is perhaps the most pronounced for the West region. Commenters 

said significant variability in renewable technical resource is indicated for hydrothermal, urban 

photovoltaic (PV), rooftop PV, concentrated solar power (CSP), and hydropower. 

Commenters stated that even if renewable resources across states in a region had similar 

technical potentials, the primary RE approach does not consider how these profiles may have 

dissimilar market potentials. Commenters stated that accounting for heterogeneous abatement 

cost functions for renewable resources across states is an important element in reaching specified 

emissions targets while minimizing abatement costs (or conversely in reducing more emissions 

for a given expenditure level). Commenters stated identical standards for groups of states 

clustered by their technical potentials are not necessarily indicative of relative compliance 

burdens, especially in the presence of grid integration costs, siting concerns, and the provision of 

balancing flexibility from existing assets. Commenters stated that inadequately accounting for 

this cost information may overlook opportunities for lower-cost reductions in other states or 

building blocks, which would be exploited in an approach with broader coverage and greater 

flexibility. 

Commenters stated that a more appropriate and comprehensive basis for state clustering would 

be informed by the market potential for RE development, which would include technology costs, 

fuel costs (e.g., for biomass), investor response, regional competition for other resources, 

learning-by-doing and network effects, regulatory limitations, and public acceptance. 

Commenters stated these externalities will influence regional RE costs. Commenters noted EPRI 

assessed and reported the regional costs for deployment of renewable generation in two key 

reports. 

Commenters stated that many state RPS goals include hydroelectric power generation, but EPA 

does not include existing hydroelectric power towards compliance with its Proposed Guidelines. 

Commenters stated that including this component of the RPS in the Building Block 3 goals 

without allowing states to rely on existing hydropower for compliance will substantially increase 
158 

the amount of new renewables required in each state, even in states that have already reached 

their own RPS goals. 

Commenters stated that many state RPS goals include hydroelectric power generation, but EPA 

does not include existing hydroelectric power towards compliance with its Proposed Guidelines. 

Commenters stated for example, New York counts hydroelectric power towards its 29 percent 

RPS target, and this source accounted for 83 percent of the state's renewable generation in 2012. 

Commenters stated including this component of the RPS in the Building Block 3 goals without 

allowing states to rely on existing hydropower for compliance will substantially increase the 

amount of new renewables required in each state, even in states that have already reached their 

own RPS goals. 

Commenters stated the regions were formed arbitrarily, and EPA did not group states with 

comparable RE resources. Commenters asserted EPA did not consider whether or not a particular 

state within the region possessed the same renewable resources as the benchmark state, which is 

a crucial oversimplification. For example, commenters noted that NREL estimates that Kansas 

ranks number two in the country for wind energy potential based upon potentially developable 

wind capacity, Texas ranks number one, and Nebraska ranks number four - by comparison, 

Arkansas ranks 28 and Louisiana ranks 39. Commenters added that the NREL Wind Resource 

Map below shows dramatically that Louisiana, Arkansas, and even most of Texas have very 

different wind resources than Kansas, Nebraska, Oklahoma, and northwest Texas. Commenters 

said NREL estimates that Kansas has more than 950,000 MW of potential wind resources with 

>30% capacity factor - by comparison, Arkansas and Louisiana have 9,000 MW and 410 MW of 

potential wind resources with >30% capacity factor, respectively. 

Commenters also noted a study DOE conducted in 2008 showing projected wind capacity 

development from a 20% national RPS scenario that noted that some states, such as Louisiana 

and Mississippi, have lower quality wind resources, and that, even under the modeled "20% RPS 

policy scenario," there would be virtually no wind capacity development in Louisiana by 2030. 

Yet, commenters stated, EPA projects that Louisiana will be able to nearly triple its current nonhydro RE production of roughly 2,430,000 MWh per year to 7,572,000 MWhs by 2030. 

Realistically, commenters said lack of a wind resource leaves only woody biomass, waste heat 

recovery, geothermal, off-shore wind, and solar PV as RE alternatives. Commenters noted that 

virtually all of Louisiana's current RE production is from pulp and paper plant "black liquor" 

waste that is not scalable like wind. 

Comment 8: Commenters expressed concern regarding the NREL report. 

Response 8: The technical potential limiter is not included in the final methodology for 

quantifying building block 3 generation. The final methodology is described in section V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 
159 

Commenters stated EPA attempts to determine the technical potential of state renewable 

resources by relying on a 2012 NREL report. Commenters stated that this report by design only 

represents resource potential, with some caveats, however, as the report notes: "The estimates do 

not consider...economic or market constraints, and therefore do not represent a level of 

renewable generation that might actually be deployed." Commenters stated the report indicates 

that these "economic or market constraints" include technology and fuel costs, policy 

considerations, regulatory limits, and regional competition with other energy sources. 

Commenters stated that EPA also acknowledges the significant limitations of this study. 

Commenters stated that other factors that impact the amount of the technical potential resources 

that can actually be developed include seasonal impacts, transmission considerations, state 

regulatory processes, and project siting rules and limitations associated with certain endangered 

species and other environmental programs. Commenters stated these issues present technical, 

cost, regulatory, and practical challenges that can and do limit actual opportunities for 

developing these potential resources, yet, EPA did not consider these factors in deriving the 

technical potential or assumed development rate for each resource. 

Commenters discussed the EPA approach in which a benchmark development rate for each 

renewable technology based on the arbitrary average of the top 16 states for each resource was 

developed. Commenters stated the benchmark rates from this limited number of states are then 

incorrectly applied to all states. Commenters stated EPA's approach is fatally flawed as the 

agency incorrectly assumes that the technical potential and experience of 16 states is sufficient 

for establishing renewable energy goals for all other states. Commenters stated EPA's reliance on 

historic renewable energy development in only the top 16 states disregards the fact that 

experience of these limited states may not be applicable or achievable by other states, as the top 

performing states are typically those with the greatest renewable generation potential, greatest 

access to transmission, and have lower development costs. In addition, commenters stated, EPA 

made no attempt to evaluate the quality of the resources developed, the manner in which they 

were funded (out-of-state entities, federal tax credits, grants, etc.), or other drivers for 

development that may not be applicable to other states. Commenters stated that given that 

subsidies such as the federal production tax credit and investment tax credit have already expired 

or are scheduled to expire before the states even file their compliance plans, it is not reasonable 

to expect that past development of renewable resources is necessarily indicative of future 

development potential as experienced in recent years when these tax benefits were available. 

Further, commenters stated, EPA did not consider whether existing renewable resources 

represent opportunistic or nuanced circumstances for development that cannot be readily 

replicated or expanded. 

Commenters stated that the NREL report acknowledges these state differences by estimating 

potential renewable resources based on varying assumptions on the capacity factors that would 

be expected from each technology. For example, commenters said NREL provides state-specific 

estimates of capacity factors for photovoltaic resources. Commenters noted that for the states in 

the EPA-defined South Central region, the capacity factors for photovoltaic resources ranged 

from 19.6% (Louisiana) to 23.8% (Kansas), and stated EPA does not consider that the 

development rates derived from the top performing states may not be achievable by other states 

that are not able to utilize their resources at the same rate due to differences in the availability of 

the resource. Commenters stated the agency has provided no rationale for why it is appropriate to 

assume that the development achieved to date by select states, with different technical, cost, and 
160 

policy considerations, is replicable and represents what is achievable by all states going forward; 

nor has EPA provided any rationale for using prior growth rates as an indication of achievable 

future growth, particularly given the technical challenges associated with incorporating increased 

renewable energy into the power supply system, such as the need for additional transmission 

investment. 

Comment 9: Commenters stated concerns with the approach to quantifying RE potential. 

Response 9: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said some state RPS are designed as capacity (MW) only standards, yet EPA 

assumes that these are energy (MWh) produced standards in their goal calculations. Commenters 

added that most state RPS programs apply to only a fraction of the electricity consumed in the 

state, excluding for example municipal and cooperative generators, yet EPA applies its RPS 

requirements on 100% of the generation in the state. 

Commenters said that in both of the proposed RE approaches, the goals are based, in part, on 

prior renewable development trends, yet prior growth is not necessarily an indication of future 

growth. Often, commenters stated, the most rapid and cost-effective gains are achieved in the 

early years of development and in those areas with the greatest resource potential and the 

greatest potential to deliver and integrate these resources (i.e., available transmission). In 

addition, commenters stated many of the prime areas for RE development are located far from 

load centers, requiring new transmission to be built to deliver the power to load centers, with a 

typical transmission line requiring 5 years or more to site, permit and construct, particularly if it 

crosses federal or tribal lands. Commenters stated large-scale transmission projects, such as high 

voltage overlays and those needed for RE integration can involve even longer lead times. For 

territory on federal land, Commenters added it would take multiple years to design and permit 

new transmission lines. Commenters said that addition of incremental renewables to the grid 

(especially if geographically far from load) potentially will come at an increasingly higher cost. 

Also, commenters said EPA's approaches are predicated on the assumption that large quantities 

of new RE can be integrated into the grid but has not accounted for the technical challenges 

related to integrating and managing large quantities of renewables into the existing transmission 

and distribution systems. Commenters agreed that any approach to quantify RE potential should 

take into account transmission constraints and the issues surrounding new transmission 

construction that come from siting, permitting, environmental impacts, and landowner 

opposition. 

Comment 10: Commenters expressed support and opposition to the target rates. 
161 

Response 10: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Several commenters asserted the targets should be strengthened. Commenters asserted the CPP 

goals for RE should be strengthened, noting that the RE target for 2020 proposed in the CPP is 

actually lower than the EIA projection (9%) under a business-as-usual scenario, and the CPP's 

2030 target of 12% is barely higher than the EIA's business-as-usual projection of 10%. 

Commenters stated given the significant levels of RE generation already achieved by many 

states, a more ambitious national goal is clearly within reach. Commenters stated that Florida, in 

particular, could deliver significantly higher levels of RE generation; the state has the thirdhighest potential for rooftop solar potential in the U.S., but currently ranks only 12th in installed 

capacity. Commenters asserted we should work toward a much larger emission reduction goal of 

35 to 40% reductions below 2005 levels in 2020. 

Commenters stated EPA's target is only marginally more ambitious than what the U.S. EIA 

projects for RE generation under its business-as-usual case. Worse, commenters stated that in 

2020, EPA's RE targets are less than what EIA says will be achieved under business as usual. 

Commenters said EPA's methodology in determining the potential for BB3 was more of an 

"average system of emissions reductions" rather than the best system. Commenters added that 

EPA's methodology results in 17 states with lower RE targets than the level that the Lawrence 

Berkeley National Lab projects they will reach by meeting existing RPS mandates. 

Commenters supported development of RE targets, but thought they could be strengthened. 

Commenters said that setting a low floor for RPS states will not create enough of an incentive to 

move these states forward where they need to go. Commenters stated that Colorado, for example, 

while a national leader in growing a clean energy economy, should have a SIP that pushes it 

forward and brings other states along. Commenters added that the final rule should allow 

periodic review of progress toward targets and encourage early efforts to reduce emissions by 

giving full credit to emissions reductions achieved by projects that are completed prior to 2020. 

Commenters stated that for the 29 states that have RE standards in place; 21 of them, including 

Colorado, would have to do little or nothing more than to achieve the current RES targets in 

order to meet or exceed the proposed targeted EPA use to calculate their emission reductions 

requirements for 2030. Commenters stated EPA is underestimating 2030 levels of RE - these are 

lower than even the current RE generation from nearly all states with RPS/RES. 

Commenters fully supported EPA's determination to include RE generation as a separate BB, but 

felt the target must be significantly increased and the time line for requiring contributions from 

this source accelerated. Because of the critical need for RE, EPA should estimate the full 

potential of RE available to the power system. Commenters added that EPA has adopted a targetlimiting selection methodology, artificially constrained its estimates of the achievable energy 

generation target rates and of the cost-effectiveness of RE, that it must correct in the final 

rulemaking. 
162 

Commenters stated that the NREL estimated that untapped offshore wind resources in the U.S. 

are so abundant they could power the entire country. Commenters added that current trends show 

how much potential for dramatically increasing renewable generation exists: 

• Wind capacity increased by 75% and solar capacity by 473% from 2009 to 2013. 

• The national average cost of wind power has dropped more than 60% since 2009, 

making it competitive with new fossil fuel plants in many regions. 

• Solar photovoltaic system costs fell by about 40% from 2008 to 2012, and by 

another 15% in 2013. 

• The trends of improved technologies and reduced costs are expected to continue. 

Commenters asserted the targets are overly conservative, and this is principally the result of the 

methodology used, which creates state-level targets using regional averages of existing state RPS 

statutes. Commenters said achievable, cost-effective targets are not well reflected in existing 

state mandates which tend to understate the potential for RE deployment. Commenters stated that 

developing targets based upon these existing statutes, and pulling down these targets by 

including states with no RPS goals, creates an artificially low target for BB3. Commenters 

asserted that a methodology which averages in and is partially defined by do nothing approaches 

cannot be BSER. Commenters urged EPA to determine that the target-setting methodology used 

in the draft guidelines falls short of the BSER standard, and replace it with a methodology more 

reflective of a true BSER, such as a modified version of the Alternative Renewable Energy 

Approach described by EPA, updated with more realistic assumptions of technology costs and 

growth rates. Commenters recommended the following with respect to Building Block 3: 

• Higher RE targets should be established. 

• No state target under the CPP should be based on assumptions projecting lower 

renewables use in future years than actually exists in 2014. 

• The methodology for calculating targets should use a modified version of the 

Alternative Renewable Energy approach, not a framework based upon averaging 

existing statutes. 

• The potential contributions of distributed renewable generation, which appear to 

have been omitted to date, must be fully accounted for. 

• The assumptions used for target setting under the proposed Alternative RE 

Approach should be updated to better reflect actual renewable technology 

deployment and pricing, yielding more accurate estimates of renewables potential 

over the time horizon of the CPP. 

• If EPA continues to use a target-setting approach based upon existing state policy, 

it should modify the approach proposed in the draft rule, replacing this with a 
163 

framework that is defined on the basis of best practices rather than one based on 

average practices. 

Commenters stated EPA underestimated RE's likely growth and its potential role within the 

BSER and should make significant improvements in how it calculates the BB. Commenters said 

by choosing the regional average RE standard approach, the EPA severely underestimates the 

potential deployment of clean energy into the grid. Commenters stated the "best practices" 

approach simply averages the political environment for RE several years ago and that high 

achieving states like Maine, Minnesota, South Dakota and Iowa were already exceeding what 

EPA expects the state to achieve by 2030 under this scenario for 2012. Commenters also noted 

that North Dakota, the windiest state the country, is only expected by EPA to generate 15% of its 

electricity from renewables, an amount that it was already achieving in 2012. Given the low 

price of wind energy, commenters said there is no reason to think that high achieving states will 

stop the growth of their clean energy generation - after all, clean energy is competing 

economically with fossil generation, and holding down overall electricity prices. If EPA wants to 

use RE standards as a proxy for RE potential, commenters said it would be better to use the 

highest RE standard for that region, giving a closer approximation of the medium term potential 

carbon pollution reductions through RE for that region. Commenters stated EPA described an 

alternative method based on the technical and economic potential to calculate RE generation 

building block, which would likely be a better estimate of clean energy's potential, but a better 

way would be to use the Union of Concerned Scientists (UCS) model in the BSER. Commenters 

said UCS estimates that the EPA could almost double RE targets within the BSER, from 12% of 

total 2030 U.S. electric sales to 23%; and found that deploying higher levels of RE would be a 

cost effective way of reducing carbon pollution. Commenters added that adoption of a more 

aggressive approach will reinforce the need for New York's continued long term support for RE 

while further aligning the CPP with the objectives espoused in the 2014 draft New York State 

Energy Plan to reduce carbon intensity from the energy sector by 50% by 2030 and a key 

component of the state's overall climate pollution reduction goal of 80 % by 2050. Commenters 

added that they had concerns about impacts to wildlife from all developments, and seeks to 

safeguard wildlife from undue harm. Thus, the commenters asserted strong state and federal 

involvement is needed to guide RE development to ensure that it is done responsibly and in a 

wildlife-friendly manner. Commenters asserted that with careful planning, renewables can be 

developed in a way that provides significant electricity generation for consumers while 

protecting wildlife and habitat. 

Commenters said this "average system" approach fails to represent the BSER and fails to account 

for demonstrated growth in states over the last several years, producing overly conservative 

targets that are already being exceeded by several states. Commenters urged EPA to assume a 

rate of RE deployment more consistent with recent historical rates of deployment. Commenters 

encouraged EPA to adopt UCS' Demonstrated Growth approach, as it would produce targets 

more in step with recent trends, more accurately reflecting the role that RE can play in reducing 

carbon emissions. Commenters added that EPA should update its formula to correctly account 

for emissions reductions from RE because it is inconsistent with the way in which EPA 

discussed the RE/EE BSER assumptions in the proposal. Commenters said EPA's calculations 

did not substitute generation or reduce generation from fossil-fired resources in the amount 

associated with new RE/EE resources. As such, Commenters stated EPA should revise its 

formula for setting the state targets and adopt the corrected approach proposed in the NODA to 
164 

ensure that incremental renewable resources do in fact reduce the equivalent level of fossil-fired 

generation. Commenters also supported the approach, offered by the UCS, which found that 

EPA's approach significantly underestimates the potential role of RE in allowing states to reduce 

carbon emission. 

Comment 11: Commenters stated issues with estimating the effective 2020 rate. 

Response 11: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's calculation of RE goals in BB3 is flawed because it is premised on 

"effective" 2020 rates calculated by EPA that do not reflect the specific requirements within 

those existing RPS programs. Commenters stated the EPA's use of "effective" 2020 RPS 

requirements reflects rates that are overstated due to the failure to consider RPS provisions that 

reduce the overall stringency of individual state requirements. In addition, the commenters 

stated, the future effective 2020 RPS rates have not been "adequately demonstrated," which the 

CAA defines is a necessary prerequisite for determining BSER. Commenters said that in the 

design of most RPS, states acknowledged the challenges associated with increased development 

and utilization or renewable resources by including provisions that gradually increase 

implementation over two decades, that allow for alternative compliance plans in lieu of 

renewable resource development, and that reduce the stringency of standards in order to mitigate 

retail cost (cost caps) or transmission reliability impacts. Commenters stated that EPA 

acknowledges that full compliance to date has been challenging with RPS that are much lower 

that the effective 2020 rates considered in BB3 by stating that " ...recent improvements in RPS 

compliance rates indicate to the EPA the reasonableness of current RPS growth trajectories. 

Commenters stated weighted average compliance rates among all states have improved in each 

of the past three reported years (2008 - 2011) from 92.1% to 95.2% despite a 40% increase in 

RPS obligations during this period. " Commenters stated EPA further acknowledges that these 

less than 100% compliance rates include considerations that are not accommodated by EPA's 

proposal "The RPS compliance measure cited is inclusive of credit multipliers and banked RECs 

utilized for compliance, but excludes alternative compliance payments, borrowed RECs, deferred 

obligations, and excess compliance. This estimate does not represent official compliance 

statistics, which vary in methodology by state." 

Commenters stated that regardless of how the percentage of historic RE is calculated, the 

regional renewable goals developed by EPA have not been adequately demonstrated. For 

example, Commenters stated, the agency calculated regional goals for the East Central and 

Southeast regions of 16% and 10%, respectively; however, the maximum RE demonstrated in 

2012 by individual states in those regions was 4.2% in the East Central Region and 3.2% in the 

Southeast Region - states that do not have mandatory RPS programs. 
165 

Commenters said that state RPS statutes contain a number of "off-ramps" related to cost, 

reliability, and crediting provisions that can result in a lower standard and that EPA gives no 

consideration to these off-ramp provisions in estimating the "effective" 2020 rate. 

Commenters said EPA arbitrarily creates a national RE target by lumping states into zones and 

then asserting a standard renewable percentage based on its analysis of "best practices." 

Commenters said many states meet their RPS through a tradable REC system, a system that does 

not appear to be easily transposable into state plans. Commenters also said many state RPS have 

off-ramps, cost caps, and alternative compliance options, one of which can be EE improvement. 

Commenters asserted that f a state's RPS allows EE to be counted as RE, EPA should reduce that 

state's RPS assumption in the state goal calculation. 

Comment 12: Commenters expressed concern regarding RE offset potential. 

Response 12: The BSER no longer includes energy efficiency under building block 4. The EPA 

believes that the replacement of affected source generation with RE is technically feasible, 

adequately demonstrated, and cost-effective. Refer to preamble section V.A and V.E for 

additional information. 

The following is a summary of the specific public comment under this comment: 

Commenters disagreed that RE offsets existing fossil fuel generation to any appreciable extent as 

empirical data suggests intermittency and demand fluctuations nullify any supposed zero-sum 

relationship. Additionally, commenters said offsetting RE against the baseline would exacerbate 

all of the other problems with the calculations for BB4, by requiring an absolute reduction in 

demand every year between now and 2030. 

Comment 13: Commenters showed concerns on the use of the NC REPS for the Southeast and 

South Central Regions. 

Response 13: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I and Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment: 
166 

Commenters stated that has misread North Carolina's REPS. Commenters said EPA neglected to 

account for the fact that the 10% 2018 goal includes EE measures (which EPA separately 

addresses in BB4), out of state energy production, thermal energy, and existing hydroelectric 

energy. Additionally, commenters stated the methodology, proposed by EPA, to apply an overall 

growth rate to individual states' current renewable penetration levels, results in a requirement that 

states with currently heavy investment in RE increase their renewable production substantially, 

while a state that has relatively no renewable penetration will be required or expected to barely 

increase its renewable investment. Commenters EE measures can be used by an electric power 

supplier to comply with the requirements of the REPS. Furthermore, commenters said EPA has 

double counted EE in its calculations by utilizing the NC REPS that includes EE as its proxy for 

RE generation in BB3 and then separately calculating reductions based on achievable EE in 

BB4. Commenters said IOUs can fulfill up to 25% of the REPS requirements up until 2020 

through EE measures. Commenters stated in 2021, this limitation is increased to allow IOUs to 

comply with up to 40% of their REPS requirements through EE measures. With the exception of 

small set-asides for energy from solar, swine waste and poultry waste resources, commenters 

stated NC REPS legislation contains no limit to the amount of EE and DSM measures that can be 

used to satisfy the REPS by EMCs and municipalities. Commenters asserted that actual 

approximation of RE generation anticipated as a result of the REPS, 3.75%, is far lower than 

EPA's 10%. Commenters said that when 3.75% is inserted into EPA's application of BB3, in 

place of 10%, the resulting BB3 reduction adjusts from a 165 lbs/MWh reduction to a reduction 

of 67 lbs/MWhr. 

Commenters said states in the Southeastern region were given a RE target of 10% of statewide 

electrical generation and this regional approach was based on the assumption that the potential to 

expand RE resources varied by region. Commenters stated the figure for the Southeastern region 

is based upon the average of all RPS of all states in that region, however, North Carolina is the 

only state to have such a standard. As such, commenters stated North Carolina became the 

standard for the region. Commenters stated it is, however, a combined renewable 

energy/efficiency standard that allows utilities to meet a portion of their targets through 

efficiency measures, rather than the deployment of new renewable energy generation. 

Commenters questioned if EPA has considered the effect of this on its BB3 calculations. 

Commenters stated EPA misinterpreted NC REPS when setting the RE target for Georgia and 

other Southeastern states. Commenters stated that based on North Carolina's REPS, Georgia's RE 

target should be no more than 7.5%. Commenters stated EPA based the Southeast regional RE 

target of 10% on North Carolina's REPS; however, the North Carolina standard contains 

provisions which allow both RE and EE measures to satisfy the requirements. Commenters 

stated EPA's Southeast Regional RE Target is based on North Carolina's (NC) REPS Primary 

Target of 12.5% for Investor Own Utilities (IOUs) by 2021 and thereafter. Commenters cited 

North Carolina statutes that discussed how electric public utilities in the state may meet the 

requirements through RE resources or through reduced energy consumption through EE 

measures. Commenters stated North Carolina's statute has defined 'renewable energy resources' 

to include over 16 different potential fuels that are not known to be significant or sustainable 

renewable resources in Georgia. Commenters also stated that by comparison, EPA states that 

"The East Central and Southeast regions show moderate to strong resources in both biopower 

and rooftop PV potential." Commenters also stated that the statute states that up to 40% of the 

North Carolina 12.5% RPS target can be met by the implementation of energy efficiency 
167 

measures, which translates to an effective RE target of 7.5%. Commenters stated that because of 

the inconsistencies between the handling of RE in the proposed section 111(d) rule and the 

flexibilities incorporated in North Carolina's REPS, they asserted that EPA misinterpreted the 

North Carolina requirements when setting the RE target for Georgia and other Southeastern 

states. Commenters stated that based on North Carolina's REPS, Georgia's RE target should be 

no more than 7.5%. 

Commenters stated that thermal energy is not included in EPA's definition of RE generation on 

which it bases its calculation in BB3, though it can be used by an electric power supplier to 

comply with North Carolina's REPS requirements. Commenters added that the statutes impose 

no limit on the amount that can be used for compliance. Theoretically, the commenters said an 

electric power supplier could satisfy its entire requirement by purchasing or generating thermal 

energy (with the exception of a small set-aside for electricity from swine waste). 

Commenters stated the proposed rule relies heavily on the North Carolina RPS for guidance on 

what is achievable in this part of the country, as it is the only state with an RPS in the 

Southeastern region. Commenters stated the North Carolina standard includes several items that 

may not be achievable or applicable to Georgia and does not properly fit within the confines of 

the proposed rule. Commenters stated the renewable standard allows for energy efficiency to be 

25-40% of the renewable goal for all IOUs and 100% for Municipal and Cooperative Utilities. 

Commenters stated the goals outlined are not directly applicable to the methods used to craft 

reduction potential in the proposed rule. Commenters also stated the RPS is based on a mandate 

from North Carolina legislature to achieve goals, not on technical feasibility resulting from a 

detailed study of resource availability. Commenters stated that identifying the BSER for 

renewables to comply with this rule should rely upon robust scientific study to determine 

Georgia's potential and should be parsed with realistic accounts for current technological and 

economic constraints. Commenters said the final rule must be modified to reflect a realistic and 

feasible target for Georgia that is a compliance option and not a mandated level of RE. 

Regarding the NC RPS, commenters said that just because a state is leading in renewables does 

not necessarily mean that the other states in that region are capable of meeting the same level of 

renewable generation. 

Commenters stated the Agency significantly misconstrued state-level RPS in developing regional 

targets. Commenters stated primary and secondary percentage requirements ("tiers") for specific 

renewable resources (e.g., solar) were considered by EPA when initially determining a state's 

total renewable energy compliance potential. EPA excluded tiers that included energy efficiency 

or any fossil fuel unless it was part of a primary tier. Commenters stated a region's target was 

then determined by averaging the individual state's 2020 renewable energy compliance 

requirements within a region. Commenters stated North Carolina's REPS was the only state 

program in the Southeast region and thus established the region's target. Commenters stated 

Commenters stated the use of a single state program to establish goals for an entire region is 

completely misplaced. Commenters stated North Carolina's program contains numerous eligible 

compliance options that were not taken into account in BB3. For example, the commenters 

stated, compliance options for covered entities in North Carolina include: demand-side 

management, EE measures, electricity demand reduction, existing hydroelectric resources, credit 

multipliers for biomass, and out-of-state unbundled REC. Commenters also stated demand-side 
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management, EE measures, and electricity demand reduction are eligible resources within North 

Carolina's REPS primary tier; thus, EPA did not exclude these resources. Commenters stated 

electric public utilities in North Carolina may use EE measures to meet up to 25% of the REPS 

requirements through 2020 and up to 40% beginning in 2021 and electricity demand reduction is 

allowed to meet up to 100% of a utility's requirement. Commenters stated EPA's proposed 

guidelines do not recognize these resources as eligible for meeting its BB3 RE targets - in fact, 

these resources are captured, in part, by requirements in BBs 1 and 4. Commenters stated 

Commenters stated EPA has made two errors: (1) EPA excluded numerous compliance options 

available under North Carolina's REPS that significantly increased its stringency; and (2) the 

Agency double counted potential compliance measures across building blocks. Commenters 

stated, the stringency of BBs 1, 3, and 4, for at least the Southeast region, are based on identical 

measures - EE measures and electricity demand reductions. 

Commenters stated EPA's limited definition of renewable technologies further increases the 

stringency of North Carolina's program. EPA's proposed guidelines, compared to North 

Carolina's program, narrow the types of renewable technologies that count toward compliance 

with a state's goal by defining renewable energy as technologies that are "fueled by the sun, 

wind, water, organic matter, and other resources regularly replenished by physical or biological 

cycles." Commenters stated the North Carolina REPS defines RE resources much more broadly: 

"Solar electric, solar thermal, wind, hydropower, geothermal, or ocean current or wave energy 

resource; a biomass resource, including agricultural waste, animal waste, wood waste, spent 

pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or 

landfill methane; waste heat derived from a renewable energy resource and used to produce 

electricity or useful, measurable thermal energy at a retail electric customer's facility; or 

hydrogen derived from a renewable energy resource." Commenters stated that North Carolina's 

REPS, furthermore, specifically allows a hydroelectric power facility with a generation capacity 

of 10 MW or less to count towards compliance, whereas EPA explicitly excluded pre-existing 

hydroelectric power generation as an option for compliance with state goals. Commenters stated 

EPA, however, did not reduce the stringency of North Carolina's program to account for these 

limited compliance options when setting a renewable energy target for the Southeast region 

within BB3. Commenters agreed that fuels such as landfill methane gas and hydropower should 

count toward compliance. 

Commenters said it should be noted that the definition of a RE resource in North Carolina is not 

limited to emission reducing technologies. Commenters stated biomass, pulping liquids, methane 

captured from poultry and swine farms are all examples of resources eligible to comply with the 

North Carolina REPS where their use as a fuel may actually increase carbon emissions when 

compared to certain traditional forms of generation. Commenters stated biomass utilized for 

compliance was not backed out with the other elements in this analysis as biomass is also 

included in the 2% figure for current RE generated in state that EPA relied upon for its starting 

point to apply the growth rate. However, commenters noted that the inclusion of biomass in both 

instances attributes carbon reduction to resources that have not been proven to do so. 

Commenters said EPA's initial decision to use the North Carolina REPS as a proxy for the entire 

Southeast region is flawed because it uses the only REPS in the region, while for other regions, 

EPA used an average of portfolio standards across the region to approximate each region's 

potential. Commenters said that by simply using the only REPS in the region, EPA has assumed 
169 

that all states in the Southeast have a similar potential to North Carolina. Commenters said if 

North Carolina had not passed its REPS, if EPA would expect the Southeast region to have 0% 

renewables in its application of BB3. Likewise, Commenters asked if one other state had made a 

goal of 1%, would the goal for the entire region then drop to 5.5%? 

Commenters stated the RE target for the entire Southeast region is based solely on North 

Carolina's 2020 RPS goal of 10% and assumes a RE growth rate of 13% per year for each state. 

Commenters stated that in Georgia and Alabama, industrial CHP sources burning wood or woodderived products (such as pulp and paper mills) constitute over 90% of each state's RE 

generation. Commenters stated between 2008 and 2012, these industrial CHP sources grew at an 

annual rate of only 2.1% in Georgia and actually declined by 5.1% annually in Alabama. 

Commenters stated these sources have little potential for growth, so in order for Georgia to 

achieve its state renewable energy target, other renewable energy sources would need to increase 

by over 44% per year. Accordingly, commenters stated, EPA's approach is inherently defective 

because it does not account for these state-specific limits on achievable renewable energy 

potential. 

Commenters stated that in the Southeast Region, EPA set targets based on North Carolina's RPS 

but many of the other states do not have the same wind capacity. Commenters stated EPA's GHG 

abatement measures TSD, citing an NREL study, claims that states in each region exhibit similar 

RE potential, but other SE states lack onshore wind potential, and it is the only renewable option 

close in terms of cost to sources it would be replacing. Commenters questioned what renewable 

resource(s) does EPA expect these states to deploy. Commenters also questioned how does the 

Agency account for potentially mandating renewables for states in which RE generation (i.e. 

offshore instead of onshore) could be significantly more expensive. 

Commenters stated that in the Southeast and for Florida, Georgia and South Carolina where their 

member utilities operate, the most cost effective source of RE, wind power, is not a feasible or 

cost effective resource and neither wind nor solar generation produces reliable base load power. 

Commenters said EPA eliminated a number of important modifying features included in the N.C. 

REPS when establishing the renewable requirement for the Southeastern states in the proposed 

rule. Commenters stated N.C. REPS caps the cost of the program for retail, commercial and 

industrial customers - EPA ignores this legislatively imposed limiter on the program. Further, 

Commenters asserted N.C. REPS includes EE, demand reduction and the ability to buy RECs as 

components of its 10% requirement - all features that would reduce the absolute costs and 

stringency of the portfolio standard. Commenters added that N.C. REPS directs the state PUC to 

develop a procedure for modifying or delaying provisions if the Commission determines that it is 

in the public interest to do so - there is no such feature in the proposed rule which specifically 

rules out "backsliding" from mandatory standards, no matter what real world conditions states 

confront in the future. 

Commenters said it is unreasonable for EPA to predicate RE requirements for multiple states, 

each with completely different RE resources and completely different energy resource and 

infrastructure bases, on the renewable plan for N.C. and to impose on those other states an RPS 

from a single state in the region that contains none of the cost and feasibility safety valves 

provided by that state. Commenters urged EPA to reconsider the decision to ignore state-
170 

mandated price caps, alternative compliance options and programmatic off-ramps when 

imbedding the REPS into the NSPS as the model program. 

Commenters stated EPA's NODA proposal is not acceptable because section 111(d) grants states 

the authority to set standards of performance - not EPA or, by proxy, NREL. Commenters stated 

EPA's nomination of NREL to set RE targets in EPA-proposed state goals will further overstep 

the authorities EPA has under the law. Commenters added that RE penetration has an impact on 

the grid that extends beyond just feasibility. Commenters stated NERC has repeatedly made clear 

that the increased penetration of variable resources can and will strain the grid making the 

assessment of RE targets a decision that requires assessments beyond NREL's area of expertise. 

Commenters asserted states are best suited to ascertain the level of RE penetration that they may 

choose in developing state plans. Commenters urged EPA to assess the wisdom of setting in 

place a process (allowing NREL to set RE targets) that will establish a national reduction goal 

that will become inviolate without allowing an opportunity for comment to affected entities. 

Commenters stated the calculation of the regional renewable energy goal for the Southeast 

region relies on the RPS of only one state, and thus the North Carolina RPS, and only the North 

Carolina RPS, is the sole basis for determining the renewable energy goal for all states in the 

Southeast region, regardless of the unique design aspects of the North Carolina program or 

different geographic potential or cost-effectiveness for achieving such a goal among states in the 

region. Commenters stated the North Carolina RPS contains a number of unique elements that 

significantly affect the extent and types of specific renewable resources that may be applicable to 

other states in the region. Commenters provided the following examples of these unique 

provisions: 

• Up to 40% of the standard can be met through energy efficiency measures; 

• Up to 25% of the standard can be met by using out-of-state renewable credits; and 

• ~10% of the standard must be met by energy recovery from swine and poultry 

waste. 

Commenters stated the U.S. Department of Energy's Database of State Incentives for 

Renewables & Efficiency (DSIRE) describes the North Carolina standard as follows: "Due to the 

combined circumstances that it 1) has fairly stringent per-account cost caps, 2) allows for energy 

efficiency and conservation measures to comprise 25% of General Requirement compliance 

through 2021 and 40% thereafter, North Carolina's REPS [Renewable Energy Portfolio 

Standard] can function in ways similar to an Energy Efficiency Resource Standard (EERS). 

However, commenters stated since it does not require specific annual targets for efficiency and 

demand-side management, it is not formally considered by DSIRE to be an EERS." Commenters 

stated by including both EE measures and renewable resources in a single goal, North Carolina's 

standard is far different from the goals EPA claims to be establishing for groups of states on a 

regional basis. Commenters also stated EPA's methodology, which sets both EE and renewable 

goals as part of the state goals, effectively ignores the dual role those measures play in North 

Carolina, and has increased the state's standards. Commenters stated EPA should have adjusted 

the actual percentage to reflect this duality, and reduced the renewable portion of the North 

Carolina and Southeast regional goals. 
171 

Commenters stated one major reason for EPA's overestimation of renewable generation relates to 

its broad selection of RE targets for specific regions, without any detailed examination of or 

justification for these targets. Commenters stated EPA's Southeast Region has an effective RE 

target of 10% by 2029, which is based on North Carolina's REPS of 10% by 2020. Commenters 

stated this region generally encompasses most of the SERC, as well as the Florida Reliability 

Coordinating Council (FRCC). Commenters stated the North Carolina REPS allows utilities to 

meet the REPS requirements through various mechanisms. Commenters stated two mechanisms 

that EPA failed to consider in its adoption of the 10% renewable target for the entire region are 

utilities' ability to (i) reduce energy consumption through energy efficiency measures and (ii) 

purchase renewable energy certificates (REC) from out-of-state facilities. Specifically, 

Commenters stated, the North Carolina REPS allows a utility in 2020 to meet 25% of its REPS 

requirement through energy efficiency and another 25% of its REPS requirement through RECs, 

which could reduce the effective 2020 in-state renewable generation target to 5.0%. Therefore, 

commenters stated, EPA has not only overestimated North Carolina's target, it has overestimated 

the 2020 target for the Southeast Region and the 2020 to 2029 renewable generation levels in 

those states. 

Commenters stated that the statute for North Carolina's REPS state that "an electric public utility 

may meet up to forty percent (40%) of the requirements of this section through savings due to 

implementation of energy efficiency (EE) measures." Commenters noted that EPA accounts for 

EE in proposed BB4, thus the "RE Factor" for the Southeastern U.S. should be adjusted 

downward to account for this issue. 

Commenters stated that in North Carolina (the basis for the Southeast region target), utilities can 

demonstrate compliance using EE measures. Commenters stated that consistent identification of 

what is and is not a qualifying resource will be important and may be a difficult task if EPA 

retains an RPS-based approach for setting BB3 targets. 

Commenters stated that the EPA does not account for the fact that states define renewable 

resources that are subject to their portfolios differently than EPA. Commenters noted EPA used 

the North Carolina standard for the Southeast region and stated that the EPA extracted the 

numeric standard without applying the other determinants in the North Carolina RPS statute. 

Commenters stated that the North Carolina REPS counts existing hydropower, REC, and EE to 

fulfill the requirements. Commenters also stated there are provisions in the North Carolina REPS 

that allow utilities to petition for a waiver if mandates are not attainable. Commenters stated the 

use of the appropriate determinants would reduce the effective 2020 in-state renewable 

generation target for the Southeast region to 5%, half of what EPA proposed. 

Commenters stated that the EPA does not consider the details of North Carolina's RPS in 

applying it across the Southeast, and the requirements of the RPS do not line up with the 

requirements of the Clean Power Plan. Commenters said that North Carolina's standard includes 

eligible resources that EPA does not include in Building Block 3, such as hydroelectric 

generation, landfill gas, biomass, and CHP/cogeneration. Commenters also said that North 

Carolina allows energy efficiency measures to account for 25 percent of a utility's requirement 

(40 percent after 2021), and electricity demand reduction can meet up to 100 percent of a utility's 

renewable energy requirement. Commenters asserted that even if it were appropriate to assume 

that North Carolina's RPS represents a good proxy for other state's renewable energy 
172 

development potential, the eligible technologies counted in North Carolina's RPS do not align 

with EPA's specification of Building Block 3, and are not reasonably supported for application 

with respect to other states, such as Mississippi. 

Commenters stated EPA underestimated NC's RE potential. 

Commenters stated North Carolina's RE and EEPS goal allows utilities to meet 25% of their 

requirements by reducing energy consumption through EE measures, and another 25% of their 

requirements by purchasing RECs from out-of-state facilities. Commenters stated that thus, the 

10% RPS target EPA assumed for North Carolina effectively requires in-state RE generation to 

reach only 5% by 2020 with remaining 5% achievable through EE and RECs. Commenters 

stated because North Carolina's RPS alone sets the regional target for the entire Southeast region, 

EPA's target is roughly 100% too high for 8 states. Commenters said other states, along with 

North Carolina, have built cost-control mechanisms into their RPS goals to reduce the 

requirements for utilities if compliance becomes too burdensome. Commenters stated that EPA 

did not account for any of these flexible compliance mechanisms when dictating regional RE 

generation targets; it should do so. 

Comment 14: Commenters requested consideration for credit multipliers. 

Response 14: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that another inconsistency between North Carolina's REPS and EPA's 

application of the program is the presence of a credit multiplier. Commenters stated the first 20 

MW of biomass RE generation capacity located in North Carolina clean fields RE demonstration 

parks receive triple credit. Commenters stated that EPA states that multiple credits cannot be 

included as a measure in a state plan. Commenters stated this discrepancy is not limited to EPA's 

application of North Carolina's program. Commenters stated that 12 of the 29 state renewable 

programs contain credit multipliers, though EPA ignored the impact that credit multipliers have 

on the stringency of the state standards. Commenters stated RECs derived from out-of-state RE 

facilities are also a compliance option under the North Carolina REPS and may be used to meet 

up to 25% of the program's requirements. Commenters stated the 25% threshold does not even 

apply to an electric public utility with less than 150,000 North Carolina retail jurisdictional 

customers as of December 31, 2006. Commenters stated EPA assumed that the stringency of 

North Carolina's program was reflective of the renewable resources available within the state's 

boundaries; this is not the case. 

Commenters stated EPA erred by omitting from consideration the effect of multipliers for 

differing technologies. For example, commenters said that in New Mexico, solar PV generation 

satisfying certain conditions qualified for a 3-fold multiplier, resulting in a lower level of 

required renewable generation than was assumed by EPA in calculating New Mexico's BB3 goal 
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Comment 15: Commenters had concerns regarding the application of NC’s secondary 

requirements for smaller utilities. 

Response 15: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that further undermining the REPS as a standard setting tool, North Carolina 

is one of six U.S. states to establish secondary requirements for smaller utilities - EMC and 

municipalities. Commenters stated that in developing the Southeast region's BSER renewable 

energy target, EPA only considered the primary targets that solely affect electric public utilities. 

Commenters stated the Agency falsely states that "by only considering primary requirements, 

there is additional inherent conservatism in the RPS estimates, as additional state-level RPS 

obligations are not included in the calculated targets." Commenters stated this conservatism, 

however, is eroded by applying the calculated primary target to the entire region's total net 

generation, which includes generation from EMC and municipalities. Commenters stated this 

application of North Carolina's program also ignores the fact that, in North Carolina, EMC and 

municipalities are able to use existing hydroelectric generation for compliance. Commenters 

stated that only five of the 29 state programs analyzed by EPA cover a state's entire load; for 

example, Arizona's RPS only covers 58.6 percent of the state's load. 

Comment 16: Commenters stated NC allows use of out-of-state REC for compliance. 

Response 16: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that out-of-state RECs can be used by an electric power supplier to comply 

with the requirements of the REPS. Commenters said out-of-state purchases will not increase the 

level of renewable generation in the state but are acceptable for meeting the 10% requirement of 

electric power suppliers - IOUs, EMCs and municipalities can fulfill up to 25% of the REPS 

requirements by purchasing out-of-state RECs. 

Commenters stated that yet another difference between North Carolina's program and EPA's 

BB3 is the treatment of banked RECs. Commenters stated the North Carolina REPS allows 

banking of RECs which encompasses "electricity or equivalent energy supplied by renewable 

energy or reduced by the implementation of an energy efficiency measure." Commenters stated a 

REC can be used in the year in which it was acquired or any subsequent year, thus entities with a 
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compliance obligation can bank RECs for an indefinite period of time. Commenters stated that 

EPA states that the use of banked RECs is not an approvable compliance option within a state's 

plan. 

Comment 17: Commenters noted NC’s penalties for noncompliance with state-level RPS. 

Response 17: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated EPA established the stringency of Building Block 3 based on the 

presumption that states are required to meet state-level RPS. Commenters stated that this is a 

large oversight. Commenters cited the NCUC's final rules, stating that there are no specified 

penalties or alternative payments for noncompliance with state's RPS. Commenters stated that 

EPA has indicated that cost containment mechanisms or off ramps are not an option within an 

approvable state plan. EPA states, "[a]lthough these ACP [alternative compliance] payments may 

be directed to programs to promote the deployment of renewable energy technologies, these 

payments are not equivalent to renewable energy generation and should not be accounted as 

such." Commenters stated that this discrepancy is not limited to North Carolina, as twenty-one of 

the 29 state programs have explicit cost containment mechanisms. 

Comment 18: Commenters asserted the EPA approach ignores NC REPS cost cap. 

Response 18: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated EPA's plan to apply the terms of the North Carolina REPS in an overly 

prescriptive and rigid manner to the Southeast region ignores one of the most fundamental 

aspects of the North Carolina policy - the renewable energy goals in the North Carolina REPS 

are conditioned on an explicit cost cap set forth in the REPS statute. Commenters stated that 

under the North Carolina REPS, the state's utilities may pass to customers the "incremental 

costs" they incur to comply with the REPS. Commenters stated that the REPS statute, however, 

imposes a limit on the amount of such incremental costs that can be imposed on customers. 

Commenters stated, for example, the statute expressly provides that residential customers can be 

charged no more than $34 per year for the incremental cost of REPS compliance. Commenters 

stated that obviously, the cost cap provisions of the North Carolina REPS protect consumers, but 
175 

just as importantly, the REPS framework limits the obligations of the North Carolina utilities. 

Commenters cited the North Carolina REPS statute that specifically states that "[a]n electric 

supplier shall be conclusively deemed to be in compliance with the requirements of [the North 

Carolina REPS] if the electric suppliers total annual incremental costs incurred equals an amount 

equal to the per-account annual [cost caps set forth herein]." In other words, commenters stated 

commenters stated once a North Carolina utility incurs costs for REPS compliance equal to the 

statutory cost cap, that utility's compliance obligations cease, regardless of whether the utility has

met the renewable energy goals set forth in the North Carolina REPS. Commenters stated that 

thus, EPA has, in effect, used North Carolina's flexible and cost-constrained renewable energy 

goals to now seek to misapply them in a wholly inflexible manner without regard to the cost to 

consumers. Commenters also stated that EPA compounds this error by misapplying those goals 

beyond North Carolina to an artificially created Southeast region. 

Comment 19: Commenters had North Carolina state target concerns. 

Response 19: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Even if EPA is unwilling to depart from using existing REPS goals as the best method for 

establishing BB3 reductions, commenters said EPA should allow states with established REPS to 

use these in their calculation. Commenters said NC established its REPS based on what was 

technically achievable for the state, so NC's BB3 reductions should adopt the complete NC 

REPS as the standard for NC. Commenters said this would entail recalculating NC's emission 

standard based on the REPS as established in the NC general statutes, said the commenters, 

including all means by which NC electric generators may comply with the statute. Commenters 

said it would reestablish NC's standard based on retail electric sales rather than generation and 

require adjusting NC's reductions under BB4 to eliminate double counting since up to 25% of 

REPS compliance can be satisfied through EE. 

Comment 20: Commenters supported linking performance-based regulations with state targets. 

Response 20: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters supported linking performance based regulations with state targets. Commenters 

listed 10 principles for designing performance-based regulations that would result in a utility 
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earning higher rate of returns if they perform well under the targets set by the state. Commenters 

supported providing flexibility by allowing flexibility for annual goals by setting an 8-10 year 

target and allowing for benchmarks to be achieved in a cluster of 2-3 year increments. 

Commenters concluded that it would benefit states policymakers, regulators, and the utility 

customers by creating a market-based solution to policy goals and shifting risk to the utility in 

exchange for greater revenue opportunities. Commenters suggested that EPA encourage states to 

adopt performance-based rates that allow electric utilities to make money during the energy 

transition for high carbon sources to clean energy sources. Commenters added that the federal 

agencies can assist states in setting good solid measures and metric for set performance goals of 

reducing greenhouse gases and using energy efficiency. 

Comment 21: Commenters suggested the EPA underestimated RE growth potential. 

Response 21: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in reevaluating the assumed cost and performance of 

wind and solar RE technologies. The final methodology does not use state RPS requirements to 

quantify cost-effective RE and is described in section V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters contended that EPA underestimated the potential for growth of RE. Commenters 

added that the rule should rely on resource availability, which is already measured in each state, 

instead of basing assumptions on RPS and said RPS are a floor and not a ceiling. Commenters 

added that EPA rightly includes wind/solar resources in setting state targets, but the availability 

and quality of opportunities assumed is too low, leaving substantial achievable reductions off the 

table. Commenters stated EPA should analyze resource availability and costs on a state and 

regional basis rather than limiting the assessment of potential development to mandated RE and 

state RPS. Further, commenters asserted that EPA should remove any artificial limits on RE 

growth and use the annual RE growth factor for each state that reflects the renewable potential 

for states and regions. 

Commenters contended that EPAs proposed rule "significantly underestimates" the role of 

renewables in establishing state-level emissions targets, and fails to reflect the falling cost of 

renewables. Commenters compared a business-as-usual (BAU) scenario against a natural gas 

fuel switching, scenario, and a 30% RPS to determine which strategy achieves the greatest 

emission reductions at the lowest cost. Commenters stated that the comparison showed that the 

30% RPS can reduce Wisconsin's CO2 emissions below EPA targets, at a lower cost than the 

fuel switching scenario. Commenters added that these results were shown under conditions 

where fossil fuel prices rise steadily at 2% annually, and a scenario where natural gas prices 

reflect historical volatility observed from 1998-2013. Commenters stated that the 30% RPS 

produced lower costs than the fuel switching scenario under each simulation, illustrating the 

value of renewables as a hedge against price volatility. Commenters referenced the UCS analysis 

which found that ramping up RE deployment to 23% by 2030, compared to 12% of total retail 

sales under the proposed rule, would increase average electricity prices by just 0.3% per year 
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above a BAU scenario. Commenters stated that the UCS results are even more favorable than the 

results of modeling for the state of Wisconsin. Commenters added that the analysis supports an 

aggressive shift to RE in Wisconsin, and across the nation, is clear. 

Commenters said the regional growth factor should not be used as it limits the ability of many 

states to reach the regional target with no rationale for why such limitations would occur. 

Commenters stated there is ample evidence that the targets are achievable within the timeframe 

of the CPP at reasonable cost. Commenters asserted EPA should assume each state can meet the 

regional target rather than limit RE adoption through the regional growth factor. Commenters 

asserted EPA's calculation underestimates the ability to grow renewables; states that have not 

implemented RPS, and essentially have not made it a point to deploy RE, bring down the 

regional growth factor. Commenters said eliminating the regional growth factor's unnecessary 

constraint on states achieving the calculated RE targets results in incremental RE target of 

139,791 GWh in 2030 - if both 2030 RPS targets are used and the growth factors are eliminated, 

the net increase to RE targets is 195,735 GWh in 2030, a 37% increase. 

Comment 22: Commenters expressed Wyoming specific target concerns. 

Response 22: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated roughly two-thirds of the electricity generated in Wyoming is consumed by 

users outside the state, but EPA did not account for this in the baseline data used to establish the 

state's goal, as all of the electricity generated in the state from both fossil fuel and RE was used 

to establish the CO2 lb/MWh rate for 2012. Commenters said assumptions made in the goal 

calculation should be based on reasonable options for demonstrating compliance in the future. 

Commenters said many questions have been raised about how the "credit" from RE would be 

distributed among the states for purposes of demonstrating compliance in the future. Based on 

calls with EPA staff, the commenters said they understand that Wyoming would bear the burden 

of carrying all the fossil fuel energy produced in the state regardless of where it is consumed and 

receive no credit for any RE produced in Wyoming that is consumed out of state. Commenters 

stated this would put the state at an extreme disadvantage in any negotiation with other states 

regarding multistate plans. Commenters asserted EPA's accounting method disadvantages energy 

exporting states like Wyoming, making compliance with the Proposed Rule impossible and said 

EPA must use a consistent accounting method in establishing state goals and compliance 

options. 

Commenters stated EPA's proposed RE growth is unreasonable because it did not consider how 

states with RPS set their goals, including the start date of the RPS and how much RPS were 

already in place at the times the goals were set. Specifically, commenters noted the average 

annual growth rate in the West Region for states that have a RPS is 0.95%. Commenters stated 

the most aggressive growth directive came from Washington at 1.5% annually, which considered 

its baseline year to be 2012. Commenters said no state with an RPS initiative considered a 6% 
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growth rate, even though they envisioned increasing demand for electricity and had the 

legislation in place to encourage RE development. Further, commenters said state RPS are 

established state goals and EPA's data does not indicate if those goals are being achieved. Thus, 

commenters considered a reasonable RE growth to be the average annual RPS growth rate of the 

West Region, which is 0.95%; Wyoming cannot support a 6% annual RE growth rate. 

When establishing the goal for Wyoming's reduction in CO2 emissions from power plants, 

commenters said EPA failed to consider the inter-dependency that some states located in the 

western region have on the same utility system; demands on the energy system are not exclusive 

to the supply residing within the state borders. What was uniform, said the commenters, was the 

need for reliable (time-of-dispatch) energy to sustain the system that may be supporting multiple 

states. On the west side, Wyoming shares a utility system (PacifiCorp) with Idaho, Utah, 

Washington, Oregon, and Northern California. Commenters stated Wyoming customers 

constitute less than 10% of the total, and Wyoming energy is less than 20% of the system's total. 

On the northeast side, Commenters stated Wyoming shares a utility system (Black Hills 

Corporation) with South Dakota and Montana, and that on that system, Wyoming customers 

represent less than 4% of the total customers served. Commenters added these facts demonstrate 

that Wyoming is not creating the demand for more resources, and, therefore, those new resources 

would not be invested into on behalf of Wyoming. Commenters concluded that not including 

base load and reliability as part of its analysis makes EPA's analysis incomplete. 

Commenters said Wyoming, has a maximum RE amount of approximately 10.2 million MWh, 

but applying the 6% regional growth factor between 2017 and 2030 yields only 9.4 million MWh 

of RE generation in Wyoming. Commenters said that because the state is only expected to satisfy 

the regional growth requirements, rather than its maximum RE amount, it falls short of that 

maximum amount by some 800,000 MWh. 

Comment 23: Commenters expressed Maine specific target concerns. 

Response 23: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said that by not including hydropower production as part of Maine's existing RE 

when applying BB3, the proposed rule ignores the profound effect that Maine's existing 

hydropower facilities have had in preventing CO2 emissions over many years. Commenters said 

that, according to EIA, Maine generated 84,713,011 MWh of electricity from hydropower 

between 1990 and 2012. Commenters stated if this electricity had been generated at a NGCC 

plant meeting the new construction standards of 1,000 lbs of CO2/MWh proposed in the NSPS, it 

would have resulted in well over 84 billion lbs of CO2 emissions. Commenters stated that in 

reality, the avoided emissions would have come from a less efficient EGU, and would 

consequently have been much greater. Commenters stated Maine continues to reduce their 
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carbon footprint by adding new wind generation capacity, working with developers to encourage 

investment in offshore wind energy generation capacity, exploring opportunities to increase their 

hydropower generation capacity, and through participation in RGGI, which generates revenues 

used in implementing demand-side management programs. Commenters stated EPA's methods 

do not recognize Maine's leadership in avoiding and reducing dependence on fossil fuels and 

avoiding and reducing GHG emissions. Commenters stated the efforts and investments that have 

been made over the years by states like Maine should be recognized regardless of whether they 

were started or accomplished prior to the date of EPA's proposed rule. To recognize these 

established and ongoing benefits, the commenters stated EPA should establish a standard 

maximum CO2 emission rate for all states, and apply it inclusive of all EGUs. Commenters said 

states that have contributed and continue to contribute more to the problem of atmospheric 

carbon can justifiably be required to bear the greatest burden in reducing emissions. Commenters 

also said states that have generated the least atmospheric carbon should not be required to make 

up the difference for states that have generated hundreds of times more. Commenters added that 

EPA should use Maine as an example to other states, to show that it is possible to economically 

provide needed energy to residents and to industry without damaging the environment. 

Comment 24: Commenters asserted there is a need to revise Ohio’s RPS requirement. 

Response 24: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated Ohio's RPS requirement was recently revised downward from the figure EPA 

used in its renewable energy calculations, and prior to the issuance of a final rule, EPA should 

revise Ohio's renewable energy target to reflect that change. 

Comment 25: Commenters expressed Kansas specific target concerns. 

Response 25: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. Target generation levels under building block 3 are 

quantified and assigned at the interconnect level, rather than the state-level. The final 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said EPA should adjust the interim and final Kansas emission goals to better reflect 

that portion of RE generation that is credited to another state for use toward their compliance 

obligations. Commenters said the interim and final emission goals would have the reapportioned 
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quantity of electrical generation from renewable sources removed from the denominator of the 

goal setting equation and new interim and final goals would be calculated for Kansas. 

Commenters also said that if EPA is planning to reapportion RE generation to other states for 

future compliance obligations, EPA should also reapportion other types of electrical generation. 

Commenters stated EPA should subtract from the numerator and denominator of the goal setting 

equation for Kansas that portion of electrical generation and associated emissions and credit both 

of these values to the numerator and denominator of other states that receive electrical generation 

from Kansas' coal- and other fossil-fired generation. Commenters added that Kansas should be 

able to consider credit for future compliance from out of state sources such as NGCC generation. 

Commenters were not opposed to alternative methods of crediting and deducting electrical 

generation sources from the Kansas goal setting equation for future compliance demonstration in 

other states. However, commenters did oppose any alternative reapportioning methodology that 

will adversely affect the proposed Kansas interim and final emission goals and ability to comply 

with those goals. 

Commenters said EPA did not correctly interpret the applicability of the Kansas RE standard and 

the administrative regulations adopted by the Kansas Corporation Commission to implement 

them. Commenters said only IOUs and electric cooperatives are subject to the Kansas RES. 

Commenters also said EPA should have included Texas' RE standard in developing the regional 

rate, not only Kansas. In using Kansas's nominal 20% RES for fixing the regional RE level at 

20%, Commenters said EPA failed to take into account two factors about the Kansas standard: 

(a) the standard does not apply to all electric utilities in-state, but to IOUs and electric 

cooperatives only- i.e., not municipal utilities; and (b) according to the standard, "[e]ach 

megawatt of eligible capacity in Kansas installed after January 1, 2000, shall count as 1.10 

megawatts for purposes of compliance." Thus, commenters stated for calculation purposes when 

used to compare standards among different states, the actual (or effective) 2020 RES/RPS used 

for Kansas should be (20% / 110%) x (7,974/8,473) = 17.1 %, or 17%. 

Comment 26: Commenters stated reasons why the Texas target is unrealistic. 

Response 26: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated BB2 includes flawed assumptions on nuclear energy and arbitrarily and 

unrealistically assumes as a vast expansion of renewable energy in Texas. Commenters stated 

EPA derived this capricious and unrealistic goal by arbitrarily lumping Texas with five other 

states, of which only Kansas has a planned RPS. Commenters stated the EPA methodology 

ignores all differences between states. Commenters stated that in this calculation, EPA ignores 

Texas's own statutorily mandated RPS standard of 5,880 MW of renewables capacity. Instead, 

Commenters stated, the proposed rule averages all existing RPS targets in a "region" and assigns 

the "average" to each state. Commenters stated there is no basis to use Kansas's RPS as the basis 

for a 20% energy RPS for Texas. Commenters stated Kansas's RPS is tailored to Kansas - a 

capacity-based RPS which includes biofuels and hydropower - and is inappropriate for the 
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intermittent zero carbon dioxide emitting renewable resources of Texas. Commenters stated that 

conversion of Kansas' 20% capacity RPS to a 20% energy RPS for all states in EPA's South 

Central grouping is the very definition of arbitrary. Commenters cited The Kansas Corporation 

Commission comments to EPA: 

"EPA states that it uses only energy-based RPS standards in assigning targets. Because Kansas 

has a capacity-based RPS, Kansas was assigned the South Central Region's average target of 

20% of generation as a default. Besides Kansas, Texas has the only other RPS target in the South 

Central Region. Like Kansas, Texas's RPS target is capacity-based. Because no other states in 

the region have RPS standards, EPA had no energy-based RPS targets in the region that could 

establish an energy-based target for the region. Thus, EPA used an arbitrary energy-based RPS 

target of 20% for Kansas and the rest of the South Central Region." 

Commenters stated additionally, Kansas's RPS has numerous safety valves should retail rates rise 

above 1%. Commenters stated EPA failed to analyze the likelihood that these cost containment 

provisions effectively bind the Kansas RPS (or its application in other states) to a lower standard. 

Commenters also stated that application of one state's renewable standard to other states is 

arbitrary because it does not account for the relative size of the states; Kansas's electricity sector

is 1/10th the size of Texas's electricity market, accounting for only 6% of the South Central state 

region's retail power sales, and has the third-best wind resources in the country. Commenters 

stated that a 20% renewable standard for Kansas implies approximately 2,800 MW of wind 

generation capacity (at a 35% annual capacity factor) whereas the same standard for Texas 

implies over 25,000 megawatts of wind generation capacity. Commenters stated such results 

clearly demonstrate that the BB3 component of the emissions calculation is both disparate and 

arbitrary. 

Commenters stated the EPA's approach for estimating potential future renewable energy in 

Block 3 is arbitrary and flawed. Commenters stated the EPA has not justified the rationale for 

dividing the country into the specified regions for renewable energy. Commenters stated that 

some of the regions have multiple state RPS included in the average while the South Central 

Region and the South Eastern Region only have one state RPS used for each region. Commenters 

stated the EPA's assumption that Kansas' renewable energy goal is applicable to the entire South 

Central Region is flawed and without any technical merit, especially considering that Texas' total 

generation is ten times that of Kansas and represents the majority of generation in the South 

Central Region. Furthermore, commenters stated, the EPA's growth rate approach penalizes 

states with more renewable energy in 2012 and rewards states that have little renewable energy 

in that year. Commenters stated EPA's approach actually rewards some states by giving credit 

under BB3 while Texas is assumed to be able to more than double the state renewable 

generation, even though Texas produces approximately 11% more non-hydro renewable energy 

than the combined total of the states that received credit for their renewable energy. 

Commenters also stated the EPA did not provide a rational explanation for why the Texas RPS 

was excluded from EPA's consideration in this Block 3 analysis for the South Central Region 

other than a footnote in the GHG Abatement Measures TSD stating that the EPA did not include 

targets that were capacity-based. Commenters stated this unsupported conclusory statement 

cannot support the EPA's exclusion of Texas' RPS. Commenters also stated the Kansas 
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Renewable Energy Standards Act is in reality a form of a capacity-based RPS. Commenters 

stated that according to Kansas Statutes Annotated (K.S.A.) 66.1258, Kansas' renewable energy 

portfolio requirement is for net renewable generation capacity as a percent of peak demand. 

Furthermore, commenters stated, Kansas' Renewable Energy Standards Act established an 

exception in K.S.A 66-1261(b) to exempt a utility from administrative penalties if the utility can 

demonstrate that the retail rate impact for the utility has reached or exceeded the 1% level set in 

K.S.A 66-1260 and the utility has not achieved full compliance with the renewable portfolio 

requirement in K.S.A 66-1258. Commenters stated this stop-gap measure to avoid excessive 

costs that might result from the Renewable Energy Standards Act was not considered by EPA. 

Commenters stated the 8% growth rate EPA has applied has a disproportionately large impact on 

Texas because Texas produced more non-hydro renewable energy in 2012 than the other five 

states in the South Central Region combined. Commenters stated the Texas renewable energy 

target under Block 3 reaches the 20% cap and results in an assumption that Texas can increase its 

renewable generation by 52 million MWh by 2029; however, Arkansas, Louisiana, and Nebraska 

are expected to increase their renewable energy far less than Texas because their renewable 

generation in 2012 was a very small percent of their total generation. Commenters stated 

Commenters stated the total increase in renewable generation assumed for all five other states in 

the South Central Region is less than half what EPA assumed for Texas only. Commenters stated 

EPA's approach actually rewards other states for implementing less renewable energy and 

penalizing Texas for implementing more renewable energy in 2012. 

Commenters also stated that four states are receiving credit for their 2012 renewable energy 

generation: Iowa, Maine, Minnesota, and South Dakota. Commenters stated the EPA's block-byblock calculations for these four states show that their state goals become less stringent at Block 

3. Commenters stated that Texas produces approximately 11% more non-hydro renewable 

energy than these four states combined, yet despite the tremendous efforts Texas has made to 

become the nation's leader in wind energy, the EPA is not only not giving Texas credit for its 

2012 renewable energy generation, EPA assumes that Texas can more than double its renewable 

energy generation by 2029. Commenters stated the EPA's arbitrary approach in evaluating 

renewable energy potential is rewarding these four states and penalizing Texas. 

Commenters stated that the EPA's assumption that Texas can more than double the state's 

renewable energy generation fails to consider a multitude of local, state, and federal factors, for 

example: geographic siting issues such as land use restrictions; transmission infrastructure 

requirements and restrictions; and local, state, and federal laws. Commenters stated that while 

not subject to TCEQ permitting requirements, construction of new wind capacity is not exempt 

from environmental and other legal considerations; the federal Endangered Species Act and the 

Migratory Bird Treaty Act are just two examples of legal factors that can impact a wind 

generation facility's viability. Commenters stated that local legal issues can also be a factor, such 

as common law nuisance claims. Commenters stated that EPA's proposed approach does not 

consider any of these factors because the EPA arbitrarily, and incorrectly, applied Kansas' RPS 

to the entire South Central Region. Commenters stated that the EPA did not consider these 

factors in the alternate renewable energy approach and the NREL report did not consider any of 

these factors. Commenters stated that EPA's flawed approach of setting the benchmark based on 

states with technical potentials exponentially lower than Texas' technical potential did not take 
183 

such factors into consideration and, while IPM is essentially a "black box" model, the TCEQ 

does not see any means for IPM to take these factors into consideration either. 

Commenters said that is comparing apples to oranges when basing Texas' target on the Kansas 

standard. Commenters stated EPA's goal-setting methodology uses a mw-hr basis for BB3, but 

the Kansas standard is based on renewable capacity, not the actual mw-hr of electricity produced 

by that capacity. By using a capacity standard to set a mwt-hr target, the commenters said, EPA 

overstates the Texas target substantially and that if the Kansas goal was converted to a mwt-hr 

basis, the Texas 20% target would drop to approximately 12%. Commenters added that the 

Kansas RPS is capacity-based, not generation-based, and applying it to other states greatly 

overstates the renewable generation required. 

Comment 27: Comments concerning Pennsylvania’s proposed targets. 

Response 27: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's proposed renewable targets-which are based on a complex formula 

that expects states to adopt RPS at or similar to levels mandated in neighboring states-appear to 

disproportionately burden Pennsylvania. Commenters stated that under EPA's proposal, PA 

would have to add more than 30,000 Gigawatt-hours of renewable generation by 2030 - the 

second-most of any state in the country and an increase of almost 800% over current levels. 

Commenters stated this appears to have been the result of EPA effectively punishing 

Pennsylvania for having implemented a RPS before the baseline 2012 year, as a cursory review 

of carbon emission states in regions of the country where states by and large have not adopted 

such standards indicates such states are not expected to significantly increase renewable 

generation targets or reduce their carbon emissions to the degree that Pennsylvania is. 

Commenters stated that EPA also appears to have included Washington, D.C.'s renewable 

electric supply mandates into the northeastern region's renewable building block- even though 

Washington, D.C. is not a state and does not have any power generation. 

Commenters said Pennsylvania is expected to increase its renewables by eightfold over the next 

15 years, and they believe that happened because EPA incorporated Washington D.C.'s 

renewable supply mandates, even though they only actually have one power plant in the city, and 

it actually powers the Capital. Thus, commenters asserted the renewable supply requirements are 

informing a renewable generation requirement, which they feel is a bit perverse. 

Commenters said EPA incorrectly projects that BB3 can reduce emissions in Pennsylvania by 

323 lbs CO2/MWh. Commenters said EPA's calculation is based on an average of predicted RE 

for 8 states, 2 which do not currently have RPS; and does not account for the fact that 

Pennsylvania exports approximately 42% of its generation. Thus, commenters said Pennsylvania 

would need to enact and implement an RPS based on load within the state of 25% by 2030, over 

3x the level of its current RPS. Had EPA used the level of RPS currently in effect in 
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Pennsylvania, commenters asserted it would have calculated potential reductions at 180 lbs 

CO2/MWh instead. 

Commenters said EPA's projected growth rates discriminates against states like PA that have 

successfully developed state RPS programs. Commenters stated many states, such as IA, ND, 

SD, (in the EPA North Central Region) have far greater RE resource potential than PA yet none 

have enacted RPS programs. Commenters stated the same inconsistency exists in the RE 

potential in the South Central Region with an RE potential much higher than PA but that are 

assigned a target for the region of only 8%. Commenters stated this target compares starkly 

Commenters stated to the average for the East Central Region of 17%. Commenters said EPA's 

proposed method fails to recognize the potential for RE resource development in these states 

while imposing unrealistic annual growth rates on PA. 

Commenters added that EPA targets will require PA ratepayers to pay additional amounts for 

out-of-state REC with no benefit to the PA economy and primarily benefit other states in 

meeting their targets. During the most recent reporting period, the commenters said that more 

than $50 million was expended by PA electric utilities to purchase Tier I credits to meet their 

RPS requirements. Commenters stated the majority of these credits were purchased from RE 

generators from IN and IL. As a result, the commenters said a significant portion of RE resources 

that form the basis for EPA's computation of potential RE resources to meet future targets 

derives from out-of-state sources that not only receive the revenues but are benefitted by 

enhancement of their RE resource industries including job growth. Commenters said EPA must 

consider the inherent inequity in the derivation of the PA RE targets vis a vis the burdens placed 

on other states. 

Comment 28: Commenters stated the EPA overestimated Texas wind capacity. 

Response 28: The capacity factors assigned to Texas wind resources in the EPA’s analysis 

represent expected annual production. The 8.7% value referenced by the commenters was 

applicable to the capacity of ERCOT resources, not the expected output. The EPA’s modeling of 

cost-effective RE assumes continues to assume 8.7% of total capacity is credited against total 

reserve margin capacity. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA overestimates the generating capacity of Texas wind from a reliability 

standpoint. Commenters stated that in determining the BSER for Block 3, EPA uses a capacity 

factor for Texas wind of between 39% and 41%. Commenters stated that for reliability purposes, 

ERCOT previously assigned wind an 8.7% wind capacity factor which was the estimated 

availability of wind during summer peak. Commenters stated that ERCOT recently approved a 

new methodology for calculating wind capacity factor, and under its new methodology, ERCOT 

will use historical performance of wind generation facilities in different parts of the state to 

predict the percentage of installed capacity ERCOT can expect during summer and winter peak 

conditions. Commenters stated the installed capacity factors for non-coastal wind generation 

facilities (which constitute the majority of installed wind capacity in Texas) resulting from this 
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new methodology are expected to be substantially below the capacity factor EPA assigns to 

Texas wind energy. 

Comment 29: Commenters had concerns regarding Virginia mandatory goals. 

Response 29: The EPA has updated it cost and performance assumptions for onshore wind and 

solar. Additionally, the EPA is not finalizing an approach that relies on state RPS requirements 

to set a regional target for RE. The final building block 3 methodology is described in detail in 

V.E of the preamble and in the GHG Mitigation Measures TSD. 

Several commenters viewed the general methodology of RE goal setting for states as flawed, for 

reasons related to the use of regional averages that do not apply to specific state situations and 

the calculation of renewable generation excluding what has been adequately demonstrated in a 

state. Many commenters voiced support for the carbon neutral treatment of biomass and one 

voiced the same treatment for black liquor. Other commenters raised concern over inconsistent 

treatment of biomass in the baseline, goal setting and compliance scenarios., with one noting that 

whether biomass is treated as carbon neutral or not, the treatment of biomass across these three 

components should be consistent and in some cases will need to be adjusted to reflect consistent 

treatment. 

Biomass is included in the IPM baseline projection. Biomass is not considered part of the best 

system of emission reduction in this rule and therefore it is not included in goal-setting or 

compliance evaluations. However, similar to other technologies outside of BSER, biomass may 

be considered as a part of a state’s plan to meet the emission guidelines. 

For more information regarding Building Block 3, refer to Section V.E of the preamble. 

For more information regarding biomass in the IPM baseline projection, refer to EPA v5.13 Base 

Case Documentation Supplement to Support EPA’s Proposed Carbon Pollution Guidelines for 

Existing Electric Generating Units in the docket. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I. and Section VIII.K of the preamble. 

In November 2014, the agency released a second draft of the technical report, Framework for 

Assessing Biogenic Carbon Dioxide for Stationary Sources. The revised Framework, and the 

EPA’s Science Advisory Board (SAB) peer review of the 2011 Draft Framework, finds that it is 

not scientifically valid to assume that all biogenic feedstocks are “carbon neutral” and that the 

net biogenic CO2 atmospheric contribution of different biogenic feedstocks generally depends on 

various factors related to feedstock characteristics, production, processing and combustion 

practices, and, in some cases, what would happen to that feedstock and the related biogenic 

emissions if not used for energy production. 

For more information regarding the revised Framework, see: 

http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html 
186 

The following are summaries of the specific public comments under this comment: 

Commenters stated that Virginia's Mandatory Goals are calculated based on, among other things, 

a 16% regional renewable generation "target level" that the Proposed Regulation asserts is 

achievable. Commenters stated that to create the 16% regional target applied to Virginia, EPA 

lumps eight states into an "East Central" region and then uses state RPS requirements established 

by six states other than Virginia. Commenters stated both this calculation and the asserted 

rationale for its extrapolation to Virginia are flawed. Commenters stated that a fundamental 

problem with EPA's addition of future renewable generation into the calculation for Virginia's 

Mandatory Goals is that it does not establish what has been adequately demonstrated in Virginia, 

as required by the CAA. Commenters stated that for the eight states in the "East Central" region 

in which EPA places Virginia, EPA's data shows that the renewable generation in 2012 ranged 

between 1 to 3%, with Virginia at 3% for that year. Commenters stated this is the level of 

renewable generation that has been adequately demonstrated in Virginia. Commenters stated that 

other states have future legislative requirements, and no assurance that they will be met, does not 

change the reality in Virginia. 

Commenters stated that even if the legislative process of one state could establish a level of 

renewable generation that has been demonstrated in Virginia, which would not justify giving less 

weight, or no weight at all, to Virginia's legislative determination to not impose RPS 

requirements. Commenters stated that EPA's math is wrong; by using a simple average of the six 

states with mandatory RPS goals to calculate the East Central regional target, EPA treats six 

states proportional to each other and ignores the other two states (Virginia and West Virginia). 

Commenters stated that for purposes of determining what is achievable in Virginia, Delaware's 

legislative determinations regarding achievable RPS levels and load counts as much as those of 

Pennsylvania or Ohio, which have much larger in-state generation fleets and loads, and more 

than those of West Virginia and Virginia (which is disregarded). 

Commenters stated EPA's data demonstrates why a simple average for calculating a regional 

target is wrong. Commenters said the states in EPA's "East Central" region that have higher 

future RPS requirements are those with relatively little generation compared to the others in this 

region. Commenters stated that Delaware, D.C., Maryland, and New Jersey generated 

approximately 111 million MWh in 2012 and are assigned "2020 Effective RE Levels" between 

19 to 22%. Commenters stated that in contrast, Pennsylvania, Ohio, Virginia, and West Virginia 

generated approximately 500 million MWh in 2012 and are either ignored in the calculation or 

assigned a "2020 Effective RE Level" no greater than 9%. Commenters said there is no rational 

basis, legally or mathematically, for giving such undue and unintended influence to certain 

legislatures at the expense of others, including Virginia. 

With respect to the growth rate determined by EPA, commenters stated that Virginia is assigned 

12% and 16% interim and final renewable levels that, when plugged into EPA's formula, 

significantly lower the carbon emission rates in the Mandatory Interim Goal and Mandatory 

Final Goal, respectively. Commenters stated the renewable levels assigned to Virginia are the 

highest in the East Central region. Commenters stated that even though EPA relies on the 

legislative determinations of states with renewable requirements to determine what is achievable 

across a region, the final result of EPA's calculation is that states with such requirements are 

actually expected to achieve less than Virginia, which has no renewable requirement. In fact, 
187 

commenters stated, for the states with renewable requirements, EPA's formula sets renewable 

levels for those states that are lower than the figures built into the regional target that was then 

applied to Virginia. Commenters stated the results of EPA's formula are illogical: Virginia is 

expected to achieve renewable levels that are calculated based on other States' renewable 

requirements that the EPA's formula does not ultimately expect those States to achieve. 

Commenters stated EPA's calculation of RE goals in BB3 is fundamentally flawed because it 

relies upon RE targets that have not been adequately demonstrated. Commenters stated that the 

Virginia State Corporation Commission also expressed concern that the regional renewable goals 

proposed by EPA had not been adequately demonstrated by noting that: "Another fundamental 

problem with EPA's addition of future renewable generation into the calculation for Virginia's 

Mandatory Goals is that it does not establish what has been adequately demonstrated in Virginia, 

as required by the plain text of the Clean Air Act. For the eight States in the East Central region 

in which EPA places Virginia, EPA's data shows that the renewable generation in 2012 ranged 

between 1 to 3%, with Virginia at 3% for that year. This is the level of renewable generation that 

has been adequately demonstrated in Virginia. That other States have future legislative 

requirements, and no assurance that they will be met, does not change the reality in Virginia." 

Commenters stated the assumptions about the level of EE achievable in Virginia are unattainable 

and arbitrary and cannot reasonably be used to lower a carbon emission rate assigned to the 

Commonwealth. Commenters said Virginia has an EE goal, rather than a requirement, which 

EPA disregarded and, in effect, "vetoed" by the different policies of other states - states with 

demographics, climates, load and generation profiles different from those of Virginia. 

Commenters stated the result of' incorporating the proposed unsupported extrapolation of a 1.5% 

annual "energy efficiency policy performance" onto Virginia is that the proposal forces 1.2% and 

9.3% "savings targets" into the denominator of the formula that calculates Virginia's mandatory 

goals, inappropriately driving down the carbon emission rates assigned to Virginia. 

Commenters said that to reflect Virginia's true RE potential, EPA should: (i) update RE costs to 

ensure costs reflect up to date information; (ii) ensure that the growth rate of RE deployment is at 

least as aggressive as historical rates; (iii) assume full compliance with current RPS requirements 

that are set by state law; (iv) account for actual and expected RE growth between 2013 and 2017; 

(v) update its formula to correctly account for emissions reductions from RE; and (vi) clarify that 

out of state RECs can be used towards compliance to ensure the most cost effective use of RE. 

Commenters noted that the Virginia RE target is driven by the dominance of biomass in the state 

relative to the other states in the region from which the regional RE targets were calculated. 

Commenters stated that if biomass and black liquor were no longer considered carbon neutral 

and removed from the 2012 baseline, Virginia would have the lowest starting point (at 1.3 

percent - tied with Ohio) in the region and a much lower 2030 renewable target. Commenters 

stated that if either of these types of renewable generation are not considered carbon neutral, then 

the starting point for Virginia should be adjusted accordingly. 

Commenters said described Dominion's significant investment in renewable wood biomass and 

said that it is important for their customers that biomass emissions be carbon neutral for purposes 

of this rule. Commenters added that the EPA relied upon state renewable portfolio standard 

(RPS) programs, some of which recognize biomass as non-emitting, in its calculation of the 
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renewable component of the building blocks used to determine the state targets for purposes of 

this rule. Commenters said that the EPA included biomass in the 2012 state renewable generation 

baseline from which the renewable component of the state targets was calculated. Commenters 

shared the concerns of the Virginia SCC about the draft rule in effect exporting public policies 

from states with higher electric rates and bills to Virginia. Commenters said that it would be a 

paradoxical outcome to calculate a goal based on components of state RPS standards that could 

not be met by the resources counting under these very standards. Commenters provided an 

example of such impacts and concluded that it is imperative that the EPA move forward with 

guidance on the treatment of biomass in the context of GHG emissions for this rule. Commenters 

said that states should be able to use the megawatt hours from both existing and new biomassbased units, including the biomass portion of fossil fuel-fired units that co-fire with biomass, for 

compliance with this rule (and for RPS purposes). At a minimum, commenters said, waste wood 

and forest residuals should be considered carbon neutral for purposes of setting the state goals 

and compliance with the state goals of this rule, as well as any future accounting framework. If 

the EPA does discount biomass in a regulatory accounting framework, commenters said, it must 

recalculate the state renewable components and state reduction targets. 

Commenters raised similar issues and noted that the EPA's proposal treats CO2 emissions from 

biomass generation inconsistently. Commenters said that in establishing each state's emission 

rate goal, the EPA included a state's existing 2012 biomass generation in the denominator of the 

goal calculation and appropriately acknowledged its carbon neutrality by not including its CO2 

emissions in the numerator. Commenters cited several EPA statements in the preamble that 

affirm this action by referencing the benefits of biomass generation. Commenters noted that the 

EPA's compliance modeling treated biomass differently than the goal calculations and historic 

regulatory modeling. In all of the EPA's IPM scenarios, including both the base case and the 

compliance scenarios, commenters said, an emission factor of 195 lbs/MMBtu was assigned to 

biomass combustion. Commenters stated that the EPA must maintain consistency with the goal 

calculations and treat CO2 emissions from biomass generation as carbon neutral. 

Comment 30: Commenters expressed concerns with the Tennessee target. 

Response 30: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said it is illogical for EPA to assume Tennessee has a similar capacity or technical 

potential for and ability to deploy RE as North Carolina, and this approach clearly disregards any 

state specific resource characteristics or context that contributes to a state's RPS or its potential to 

achieve its RPS. Commenters stated RPS are enacted for a variety of reasons and are frequently 

specific to each state and its accompanying characteristics, including geography, attracting 

industry, political context, and other economic development priorities. Commenters asserted 

EPA's methodology for the treatment of RE essentially forces, state-specific decisions upon other 

states while ignoring the contrary decisions of the other states. 
189 

Commenters stated that by failing to capture any of the recent or expected growth in RE in 

Tennessee between 2012 and 2017, EPA's approach ignores the significant investments that are 

already underway. Since 2012, the commenters said TVA's RE generation has increased by at 

least 376 MW and these increases are expected to continue due to ongoing declines in the price 

of RE technologies and future commitments that are expected under TVA's 2015 integrated 

resource planning process. Commenters urged EPA to update its projected RE generation targets 

for Tennessee both in the final rule and again in 2017, basing them on its actual renewable 

generation levels in 2017 as well as its abundant potential for future growth. 

Commenters further stated that UCS identified several problems in EPA's treatment of 

Tennessee's RE potential: EPA fails to account for both (1) the continued growth and falling 

costs of RE projected by market experts and (2) the RE deployment rates that states are already 

achieving. Commenters asserted EPA should revise and update several of its underlying 

assumptions and that to reflect Tennessee's true RE potential, EPA should: (i) update RE costs to 

ensure costs reflect up-to-date information; (ii) ensure that the growth rate of RE deployment is 

at least as aggressive as historical rates; (iii) account for actual and expected RE growth between 

2013 and 2017; (iv) update its formula to correctly account for emissions reductions from RE; 

and (v) clarify that out of state RECs can be used towards compliance to ensure the most cost 

effective use of RE. Doing so, commenters stated, will show that Tennessee can reach a much 

higher RE target, around 13% of 2030 electricity sales, at a reasonable cost. 

Comment 31: Commenters stated decisions of states to have RPS should not be basis for states 

that do not. 

Response 31: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, as a major renewable energy developer, it does not support the EPA's 

approach to assessing state renewable energy potential by comparison with RPS levels in other 

states that are at best arbitrarily related. Commenters said a number of empirical, well-grounded 

studies of state renewable potential are readily available, and would form a better basis for this 

important component of a low carbon future. Commenters also said that state policies, such as 

RPS requirements, are important in terms of renewable development, but cannot reasonably be 

considered the only determinant of a state's potential. 

Commenters stated the basis relied upon by EPA for assuming future RPS requirements are 

achievable targets that States have already assessed feasibility and costs cannot lawfully be 

applied, much less in the haphazard manner proposed by the Proposed Regulation. Commenters 

stated the Proposed Regulation incorrectly assumes that the States that have enacted mandatory 

RPS requirements and only those States have assessed the feasibility and costs of RPS 

requirements. Commenters stated that if, as EPA assumes, the legislature of one state can speak 

to what is achievable in another, which it cannot in this context, which assumption would have to 

work both ways. Commenters stated there are many reasons, including geographic and 
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economic, why States have approached renewable generation differently, and, just as Virginia's 

legislative decision not to impose RPS requirements in Virginia was not intended to, and cannot, 

speak to what is achievable or unachievable in other States, the decisions of other States to 

impose RPS requirements were not intended to, and cannot, demonstrate what is achievable in 

Virginia. Commenters stated to foist in-state decisions upon other States, and to do so while 

ignoring the contrary decisions of other States, is arbitrary, capricious, and unlawful. 

Commenters stated EPA has ignored details that reduce the stringency of existing RPS, has not 

considered the renewable energy experience of states without mandatory RPS programs, and has 

failed to fully consider differences in the availability of potential renewable resources between 

states. As a result, commenters stated, the agency has derived state renewable energy goals in 

building block 3 that are technically and cost-effectively flawed, and that are inconsistent with 

the prior assessment of these resources by individual states. Commenters stated that prior state 

experiences are claimed to be strongly valued by EPA in their development and application of 

renewable energy targets in the calculation of state goals. Commenters stated that ironically, 

EPA ignores these "expert assessments" of state regulators in establishing the renewable energy 

goals for states that have mandatory RPS or that have previously evaluated potential 

opportunities for developing renewable resources. Commenters stated that a review of the 

renewable energy goals that EPA used to develop building block 3 reveals that EPA's goals are 

more stringent than the effective 2020 RPS goals for 14 states, while for 12 of these states the 

building block 3 goal is less than the RPS target derived from its own expert assessment. 

Commenters stated EPA's calculation of RE goals in BB3 is fundamentally flawed because it 

excludes consideration of states without mandatory RPS programs. Commenters stated that for 

states without mandatory RPS, the agency made no effort to investigate or defer to prior state 

determinations of the adequacy or cost-effectiveness of integrating renewable resources into their 

generation portfolios. Commenters stated had EPA done so, there would have been no reason to 

deviate from the conclusions reached by these state legislatures and regulators, nor is there any 

reason to attempt to impose more stringent requirements in the establishing the BSER. Instead, 

commenters stated EPA ignored the decision of those states without an RPS in the calculation of 

the regional average RE goals because the agency did not deem them to be "leading states." 

Commenters stated the agency failed to consider that perhaps these states have previously 

evaluated RE opportunities and determined that they were not currently technically feasible or 

cost-effective. Instead, commenters stated, EPA's process forces states to conform to the policies 

developed by other states that are based on different considerations of feasibility, cost, and public 

interest. 

Commenters stated Louisiana is an example of one state that has evaluated opportunities for RE 

and determined not to implement an RPS program. Commenters stated, in 2010, the Louisiana 

Public Service Commission approved a Renewable Energy Pilot Program for the state with the 

goal of determining whether an RPS is suitable for Louisiana. Commenters stated that as part of 

the program, an AEP subsidiary, Southwest Electric Power Company (SWEPCO), conducted an 

all-source Renewable Request for Proposal, bids were received for 46 proposed RE projects, and 

only 14 were for projects to be located in Louisiana (one wind, five solar, three waste heat 

recovery, four biomass, and one landfill gas project). Commenters stated the balance of bids 

came from other states within the same RTO, the Southwest Power Pool (SPP) states. 

Commenters stated the most practical source of renewables that could be secured to serve 
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SWEPCO customers was from a portion of a wind project being developed in Kansas. 

Interestingly, commenters stated, the single wind project that was proposed to be located in 

Louisiana was more than three times the cost of the selected wind energy bid from Kansas. 

Commenters stated none of this experience was considered by EPA in the proposed rule, and 

Louisiana's decision to not to establish an RPS based on the current lack of cost-effective and 

technically feasible renewable resources is ignored in the calculation of the South Central region 

goal. 

Commenters stated that with respect to states that have previously evaluated opportunities to 

develop renewable resources and decided that a state RPS was currently not feasible and/or 

economic, EPA has ignored that state experience and applied RE goals that may not be 

technically or cost-effectively achievable with in-state resources. Commenters referenced the 

Louisiana Renewable Energy Pilot Program, noting the program ended in 2013 with the LPSC 

concluding that while the program "was a useful means of gaining valuable information and 

experience with renewable resources," "a mandatory RPS is not warranted at this 

time...[because] the levelized cost of renewable technologies exceeds the cost of conventional 

resources." Commenters stated that despite this experience and these conclusions from the 

LPSC, EPA utilizes as 20% RE target in calculating the proposed state goal for Louisiana. 

Commenters also stated that ironically, but consistent with the findings of the LPSC, EPA's 

Alternative Approach found that the technical potential for additional renewable energy in 

Louisiana is very small, and that even when modeled with a $30/MWh advantage over other 

available resources, no new renewable capacity would be added in Louisiana by 2030. 

Commenters referenced comments submitted by the Virginia State Corporation Commission 

(SCC) which further highlight the concern that state decisions to not establish RPS programs has 

been ignored by EPA in the building block three calculations. Commenters stated the SCC noted 

that "The fact that Virginia does not have a mandatory RPS requirement is not considered at all 

in EPA's calculations or the extrapolation of other States' RPS requirements on 

Virginia." Commenters stated that even if the legislative process of one state could establish a 

level of renewable generation that has been demonstrated in Virginia, which would not justify 

giving less weight - indeed, not weight at all - to Virginia's legislative determination to not 

impose RPS requirements. Commenters stated EPA's math is wrong. 

Commenters stated the state of Arkansas is another example of one that does not have a 

mandatory RPS, and for which EPA has applied a RE target in the state goal calculation that is 

premised on the standards established for the state of Kansas that has superior potential 

renewable resources that could be developed more cost-effectively. Commenters stated the RE 

target applied to Arkansas in building block 3 is one example of the absurd results produced by 

EPA's flawed methodology. Commenters stated that EPA includes Arkansas in the South Central 

region, which EPA determined has a 20% RE target and annual growth rate of renewable 

resources of 8.3%. Commenters stated if Arkansas would have instead been included in the 

Southeast region (that has a lower regional target of 10%), one would expect that Arkansas 

would have a lower RE goal; however, the Southeast region has a lower baseline level of 

renewable generation relative to its regional target, which translates into an annual RE growth 

rate for states in the region of 13.4%. Commenters stated, thus, in this example, Arkansas would 

move to a region with a lower RE target (from 20% to 10%), but would have a more stringent 

RE growth rate (from 8.3% to 13.4%) leading to a higher 2030 RE goal. 
192 

Commenters said EPA does not accurately represent the standards that states have actually 

adopted and that most state standards contain "off-ramps," where the state could acquire a lower 

amount of renewable resources than the numerical levels set forth in the standards depending on 

impacts on cost or grid reliability. Commenters stated these "off-ramps" also represent legislative 

choices that EPA ignores given its view that it should be the arbiter of "best practices" for 

renewable resource development. Commenters added that that states define renewable resources 

that are subject to their portfolios differently than EPA. 

Commenters said EPA fails to account for the fact that municipal and cooperative utilities 

typically are exempt from portfolio standards. For instance, commenters stated that although 

Montana has a 15% RPS, that standard does not apply to consumer-owned utilities, public power 

projects, or generators owned by out-of-state utilities. As a result, commenters said Montana's 

RPS is far lower than EPA assumes, thus, EPA has no basis to cite state portfolio standards in 

proposing regulations that would encompass municipal and cooperative load. 

Comment 32: Commenters stated West Virginia target was unachievable. 

Response 32: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said West Virginia's target is unachievable. Commenters stated EPA has tasked 

West Virginia with an unrealistic RE goal of 14% increase based on the 2012 total state RE 

generation - a total of 10,273,036 MWh from new low- and zero-carbon generating capacity by 

2030. Commenters stated that excluding 2012 RE generation from hydropower, as the proposed 

rule directs, this amounts to nearly an 800% increase (792.3%) over the 1,296,563 MWh 

produced through these sources in the base year for West Virginia. Commenters stated this RE 

goal was developed using an arbitrary methodology that did not take into account the realistic 

potential of renewable resources available. Commenters stated that creating state-specific goals 

from neighboring states, RPS is completely misguided. Commenters also stated a RE portfolio 

standard is a matter of state-level energy policy that EPA and the federal government have no 

authority to dictate to states. 

Commenters stated it may be difficult for West Virginia to achieve the proposed targets. 

Commenters added that alternative and RE standard does not provide incentives for development 

of renewables. Commenters added that West Virginia has significant wind solar, biomass, and 

hydro resource potential. 

Comment 33: Commenters expressed concerns regarding the ability to Michigan to achieve 

goals. 
193 

Response 33: The data provided in this comment were valuable in finalizing the building block 

3 methodology, which is described in section V.E of the preamble and in the GHG Mitigation 

Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated Michigan should achieve, or come close to achieving the emission reductions 

set forth in Building Blocks 3 and 4 if it can also achieve reductions in CO2 emissions equivalent 

to those in Building Blocks 1 and 2. Commenters stated Michigan is required to have 10 percent 

of its electricity sales come from RE by 2015, and Michigan is on track to meet this standard; 

however, the USEPA has not adequately described which RE resources will "count", both in 

terms of the energy source (biomass, incremental hydropower, etc.) and the facility's initial 

operational date. Commenters stated that if the agency accepts the emission reductions from: 1) a 

wide variety of RE sources, and 2) all RE facilities that use the eligible energy sources, without 

regard to the facilities' construction dates as long as they are operating within the 2020 to 2029 

timeframe, then Michigan should be capable of matching the USEPA's RE targets for the state 

and probably would not need to pass a more stringent RPS in the immediate future. However, 

commenters stated, a renewal of the RPS, possibly with greater stringency, may be warranted 

because there is the risk that if legislation does not replace their current standard, then 

Michigan's 2015 level of RE will slip below 10 percent from 2015 to 2030, making it more 

difficult for Michigan to meet its final and interim goals. 

Comment 34: Commenters stated Alabama's target is unreasonable. 

Response 34: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD.

Biomass is not considered part of the best system of emission reduction in this rule and therefore 

it is not included in goal-setting or compliance evaluations. However, similar to other 

technologies outside of BSER, biomass may be considered as a part of a state’s plan to meet the 

emission guidelines. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I and Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters asserted Alabama's targets are unreasonable. Commenters stated EPA's proposal 

consists of unreasonable assumptions about Alabama's access to renewable energy because it 

identifies potential RE targets for individual states by looking at the regional capacity of RE, 

without considering the actual availability of renewable resources within each state. 
194 

Commenters conducted an internal study to determine what, if any, measures could be taken to 

comply with the BB3 goals, which indicated that to replace the Lowman coal-fired projected 

energy production in the compliance period with solar would require, depending on natural gas 

prices, installation of solar capacity occupying an area ranging from 2,200 to 12,000 acres at a 

cost of from $1.4 to $7.7 billion dollars. Commenters said this is unworkable and that Alabama 

also has a limited capacity for many types of renewable generation, such as wind energy. 

Additionally, commenters stated the areas in which Alabama could conceivably establish some 

additional renewable generation, such as biomass or hydropower, are ignored by EPA in the 

proposed rule. Commenters asserted the best option for RE (although still not at the levels 

identified by EPA) in their region is biomass, which EPA fails to even include as an option. As 

such, commenters said the proposal unduly discriminates against the region; even if biomass 

were included in the proposal, it would not provide enough generation to replace the generation 

from Lowman. 

Comment 35: Commenters asserted Minnesota targets should recognize state's early action and 

credit nuclear generation. 

Response 35: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology, which does not rely on RPS requirements, is described in detail in V.E of the 

preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said Minnesota's Next Generation Energy Act of 2007 provided for several climate 

action friendly measures, including the setting of Minnesota GHG emission reduction targets 

relative to 2005, an aggressive RPS and expanded Minnesota customer conservation. 

Commenters stated this energy-based RPS initiated a glide path for expanded Minnesota RE 

starting in 2005 and continuing to 2025, and was updated with renewables targets through 2030. 

Commenters noted that in EPA's June 18, 2014 proposal, EPA's base option assigns a 15% RE 

target for CPP target determination in the Minnesota region. Commenters stated EPA asked for 

comments on the imposition of an alternative RE value for state target setting that gives 

consideration to RE potential for in-state development. 

Commenters recommended that EPA give deference to Minnesota's RPS as satisfying BB3 

requirements by recognizing Minnesota's early action for renewable deployment as sufficient for 

satisfying EPA's targets. Commenters also suggested that EPA provide full credit for nuclear 

generation that has its licensing renewed to an overall 80-year facility life. Minnesota RE 

measures were established by the Minnesota legislature, giving consideration to feasible rates for 

RE deployment and the ability of electric generating systems to assimilate the dispatch of 

intermittent RE resources without creating system reliability problems. Commenters stated EPA 

should not implement its suggested expansion of renewable targets to "resource potential" in 

Minnesota, instead recognizing that the magnitude and pace of RE deployment in Minnesota has 

already been exhaustively assessed and provided for in the RPS established by the Minnesota 
195 

legislature and Minnesota regulators. Commenters also added that Minnesota customers have 

paid for these renewable assets and other resource actions and should receive full credit. 

Commenters stated that in the case of Minnesota, the state RPS cited by the EPA fails to consider 

the state actually includes three different RPS requirements. Commenters noted there is one for 

Excel Energy, one for other investor-owned utilities, and one for municipals and cooperatives. 

Commenters also noted the State of Minnesota excludes from the RPS requirement electricity 

load for the mining and ore processing industry, which makes up a substantial load in parts of the 

state. Commenters said the recalculated RPS for the state, adjusted for these factors, is 25%, 

which lowers the requirement for the region that includes Minnesota from 15% to 14.1%. 

Comment 36: Commenters expressed concern regarding Missouri's ability to meet the target. 

Response 36: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters did not believe Missouri could expand to the goal set by EPA and stay within the 

1% rate cap established by the Missouri Renewable Energy Standard ("RES"), adopted by the 

Missouri legislature. Commenters stated compliance with the RES is not limited to renewable 

generation sited in Missouri, nor is it based on the presumption that exclusively siting all 

renewable generation for RES compliance in Missouri is possible or likely. Commenters said 

RES allows for purchases of RECs, purchases of RE (with RECs), and use of RECs from utilityowned renewable generation from both in and out of Missouri. At present, commenters added, 

RES applies only to investor-owned utilities in Missouri and not municipal utilities or rural 

electric cooperatives; compliance with RES is subject to a 1% rate impact limitation functioning 

as a constraint on current RES portfolio targets. Accordingly, the commenters said that to the 

extent EPA used RES targets in its emission formula, such targets may overstate achievability. 

Commenters stated that by making a requirement that undermines the RES, EPA improperly 

substitutes its policy judgment for that of the Missouri legislature. 

With regard to wind generation, commenters said many factors constrain development, including 

capital and financing constraints, technical and logistical constraints, site permitting and land 

lease agreements. In addition, commenters stated the current RES compliance requirement of a 

1% rate cap limit, makes EPA's RE goal is unachievable. 

Commenters encouraged EPA to treat existing goals under state law as reductions that will 

already occur. Commenters stated that when determining the BSER for Missouri and other 

states, EPA should consider the pre-existing legal obligations under which EGUs are operating in 

their respective states. In the case of RPS, EE resource standards, and similar state law 

obligations, the commenters said EPA should view the reductions that will occur as a result of 
196 

these policies as the context in which its CPP will function; at minimum, BSER for BB3 and 4 

should presume full compliance with these state laws. 

Commenters said this approach has special significance in Missouri, which requires IOUs to 

achieve 15% RE by 2012 - and said implementation of this law has been far from smooth. 

Commenters stated several utilities have attempted to comply by using RECs unconnected with 

any power delivered to Missouri, despite the law's prohibition of such methods of compliance. 

Commenters stated a number of other schemes and questionable interpretations of the law have 

been proposed to avoid compliance with the RES law. Although Missouri has made substantial 

progress in RE, the commenters were concerned that individual utilities may fail to comply. 

Commenters stated EPA should view the 15% RE target as achievable and already-in-progress 

when EPA determines BSER for BB3. Commenters added that while Missouri's RES requires all 

IOUs to increase their usage of RE to at least 2% by 2011, 5% by 2014, 10% by 2018 and 15% 

by 2021. While some investor-owned power was generated from renewables prior to 2011, the 

commenters said no utilities in Missouri retired RECs associated with RE power delivered to 

Missouri before 2011 - any RECs representing "clean energy attributes" of RE were either not 

retired, or sold to other states to count towards their active RES compliance requirements before 

2011. 

Comment 37: Commenters had concerns regarding Illinois' ability to meet state target. 

Response 37: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters said the Illinois RPS increases procurement quantities over time, and each new 

procurement is subject to a cap on increases in customer rates of approximately 2%. Through 

procurements made by the Illinois Power Agency (IPA), the commenters stated suppliers meets 

RPS quantity requirements while staying below the statutory cap. To comply with EPA's 

proposed rule, the commenters said the Illinois state legislature may need to increase the rate cap 

that was originally adopted to protect customers from significant cost increases. Further, the 

commenters stated the Illinois RPS allows procurement quantities to be met through the 

procurement of RECs from in- and out-of-state suppliers. To the extent that out-of state 

procurements are not allowed under the CPP, the commenters said customers would bear 

additional costs. Commenters added that Illinois has a new Governor and it is uncertain what 

future policy positions the new administration will take to meet the requirements of the RPS 

while addressing the potential for compliance under CPP, assuming such "beyond the fence line" 

measures required to be implemented by distribution companies are determined to be lawful. 

Comment 38: Commenters expressed concerns regarding Washington State targets. 
197 

Response 38: The information provided in this comment was valuable in finalizing the building 

block 3 methodology, which is described in section V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA asks for comment on a situation unique to Washington, where the 

state's RE target generation (under the primary proposed approach) exceeds the state's 2012 

fossil-fueled generation level. EPA asks whether the target should be capped at the baseline 2012 

fossil-fuel level. Commenters stated that regardless of the target setting approach taken by EPA, 

they support setting the target such that the difference between a state's RE target and its 

corresponding level of RE does not exceed the state's reported baseline fossil-fuel fired 

generation. Commenters noted that in doing so EPA is asking, from a target setting perspective, 

that no more than 100% of a state's generation be derived from carbon pollution free generating 

resources relative to the baseline. Commenters stated it is clear that asking that the entirety of a 

state's generation be carbon pollution free is a sufficiently stringent upper bound for setting the 

RE target for any given state. 

Commenters stated there is no reason to limit the methodology by modifying the approach for 

quantifying the RE generation component of each state's goal so that the difference between a 

state's RE generation target and its 2012 level of corresponding RE generation does not exceed 

the state's reported 2012 fossil fuel-fired generation. 

Comment 39: Commenters were concerned regarding the Kentucky target. 

Response 39: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said EPA gave Kentucky the third-lowest carbon-reduction target of all 50 

states. Commenters asked why Kentucky is at the bottom when they are the ones with the most 

health benefits to gain from shifting to cleaner energy sources. Commenters asserted that, 

according to recent reports, the utilities in Kentucky will get more than halfway to the EPA 

target without taking a single step and that the bar is not high enough. 

Commenters said biomass is the only opportunity for in-state renewables in Kentucky. 

Commenters stated that OMU has a 28 MW allocation of capacity from the SEPA Cumberland 

River dams and manage 62 MWs of that capacity for all the Kentucky municipal electric utilities. 

Commenters said bringing in wind from the upper Midwest is a possibility, but would be more 

expensive than generation at ESGS. Commenters stated that currently wind receives a $19/MWh 

tax credit which makes the cost of wind at the bus as low as $29/MWh but delivered to OMU the 

cost would be approximately $52.45/MWh. However, commenters said if the tax credit were to 

go away the cost would rise by that $19/MWh making the all in cost as high as $71.45/MWh. 
198 

Commenters added that bringing in wind energy to serve the load and assuming that 20% of 

capacity is replaced by wind, the incremental cost to OMU would be $2.5 million/year for 

transmission. Commenters said that while wind can be purchased for $29/MWh, that is the price 

at the point of generation. To move it to OMU, the commenters said, will expose OMU to 

"transmission congestion," a real cost that will drive the cost up. For 2013 the congestion from 

the wind rich areas to the LGE/KU interface was $11.69/MWh, said the commenters, making the 

delivered cost of wind energy approximately $52.45/MWh. Commenters said wind energy 

capacity factors typically are in the high 20% to the low 30% and are not well correlated with 

peak demand. Assuming all wind energy is consumed by OMU retail customers, the commenters 

said the net annual impact to customer is $11 million more in required revenue, representing a 

rate increase of approximately 12% to OMU residential customers and ESGS capacity factors 

would not be impacted because it would only create more surplus energy that would be sold into 

the wholesale electric market. Commenters stated wind is not a dependable source of energy, 

noting that on the hottest day of the year when market prices for wholesale power are the highest, 

wind is not likely to be there and thus the wind capacity must be backed up by some other form 

of dependable capacity. As such, commenters said OMU would still rely on coal units to meet 

load obligations and because the volume of wind energy is unknown it is uncertain how they 

would be able to rely upon the CO2 offsets as part of the compliance plan. Finally, commenters 

stated the Kentucky Legislature has for at least the past 7 years not allowed RPS to come before 

the full house or senate for a vote. Commenters said BB3 is usurping the Kentucky Legislature's 

intent that RPS not be mandated in Kentucky. 

Comment 40: Commenters expressed concern regarding the Mississippi target. 

Response 40: The final building block 3 methodology does not rely on state-specific deployment 

estimates, but rather cost-effective RE at an interconnection level. The EPA addresses 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters said Mississippi averages 52 in/yr rain and wind is intermittent at best during peak 

load seasons. Commenters added that no significant renewable generation has been built in 

Mississippi other than biomass, due to the prevailing weather conditions, so the assumption by 

the EPA that Mississippi can achieve a 10% RE standard seems arbitrary and is unsupported by 

the facts. 

Comment 41: Commenters expressed concerns regarding the South Carolina target. 

Response 41: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 
199 

The following are summaries of the specific public comments under this comment: 

Commenters said there are differences between South Carolina and other states in the amount 

and type of renewables available for electric production and that the state does not have the 

resources to meet a renewable requirement of 10% by 2030. 

Commenters stated UCS identified several problems in EPA's treatment of South Carolina's RE 

potential: EPA fails to account for both (1) the continued growth and falling costs of RE 

projected by market experts and (2) the RE deployment rates that states are already achieving. 

Thus, the commenters said the RE potential represented in BB3 is likely to be quite conservative 

relative to the actual potential for deployment of resources such as solar and wind in South 

Carolina by 2030. Commenters stated that technical potential estimates, recent cost declines, and 

reliability studies as referenced herein indicate that South Carolina can achieve and significantly 

exceed the levels of RE envisioned in BB3, such that RE/EE could serve as the primary means of 

compliance with their state emissions target. Commenters stated EPA should revise and update 

several of its underlying assumptions, which will show that South Carolina can reach a higher 

RE target than EPA assumes at a reasonable cost. 

Comment 42: Commenters had Georgia specific concerns. 

Response 42: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology does not rely on state-specific 

deployment estimates, but rather cost-effective RE at an interconnection level. The EPA 

addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said that 8 years ago a Southern Company subsidiary, Georgia Power, and 

other Georgia utilities committed to be the nation's first to construct new nuclear power units 

in almost 30 years. While utilities across the country will benefit from the path paved with 

Votgle 3 and 4, this step was taken to further diversify the fleet and help prepare for 

upcoming GHG requirements. Rather than reward the State of Georgia, the commenters said 

EPA used the zero-carbon energy source to further penalize the state for its early actions. 

Commenters urged EPA to update its projected RE targets for Georgia both in the final rule and 

again in 2017, stating Georgia's RE target should be based on its actual RE generation levels in 

2017 and its abundant potential for future growth. Under its Demonstrated Growth approach, the 

commenters said UCS has determined that Georgia can achieve more than 22 million MWh of 

RE generation by 2030, almost double EPA's projections. Commenters stated if Georgia were to 

achieve even 3/4 of the UCS projected levels of RE penetration, and displace fossil generation 

(along with EE increases under BB4), Georgia could reach its target reduction without any 

natural gas re-dispatch; in fact, Georgia would exceed the target, reaching an emission rate of 

782 lbs/MWh. 
200 

Commenters stated the low level of existing RE generation in the Southeast region results in the 

second highest annual growth factor of any region. Commenters said Georgia's 2012 RE 

generation was about 3% of total generation, well below the national average of 6.5%. Given the 

combination of Georgia's current level of RE generation and the regional growth factor of 13%, 

Georgia's RE target grows rapidly from 4.4% in 2020 to 8.3% in 2025, reaching the regional RE 

target in 2027. Commenters stated Georgia does not have a mandatory RPS and the amount of 

generation produced by the hypothetical RPS predicated on use of the NC RPS greatly exceeds 

EPA's 2020 target for Georgia and is equivalent to the 2030 target set by the EPA for Georgia. 

Commenters said the Southeast region's RE potential is not nearly as high as it is in other parts of 

the country. Nevertheless, Commenters said Georgia's technical potential for RE generation 

greatly exceeds the state's 2012 total generation: indeed, Georgia's utility-scale solar potential 

alone is over 45 times greater than current state generation. Commenters added that a states' 

ability to use renewables for 111(d) compliance will depend, in part, on EPA's decision in the 

final rule on whether qualifying RE must be sited within the geographic boundary of the state, or 

whether a state's purchase of RECs from other states may count towards compliance. Because 

Georgia does not currently have an RPS, the commenters asserted that utilities have no 

obligation at present to buy RECs from anywhere. Commenters asserted that because Georgia 

has few incentives in place to encourage renewable construction in-state, it is likely that the most 

cost-effective strategy to pursue BB3 will come through bundled out-of-state REC purchases. 

Commenters stated bundled purchases would include both delivered energy and RECs, meaning 

that Georgia will be able to claim both generation and emission benefits associated with these 

RECs. 

Comment 43: Commenters had concerns regarding the Florida target and stated use of NC RPS 

unreasonable and unlawful. 

Response 43: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters said the RE target that EPA calculated for Florida under BB3 arbitrarily ties 

Florida's goal to an oversimplification of North Carolina's 2020 RPS goal and is unreasonable 

and unlawful. Commenters said EPA's analysis does not consider that North Carolina's RPS 

goals allow utilities to comply through mechanisms other than actually developing in-state RE. 

More specifically, the commenters said North Carolina's RPS goal allows utilities to meet 25% 

of their requirements by reducing energy consumption through EE measures, and another 25% 

by purchasing RECs from out-of-state. Thus, commenters stated the 10% RPS target EPA 

assumed for North Carolina effectively only requires in-state RE to reach 5% by 2020. 

Commenters said use of North Carolina's RPS results in levels roughly 100% too high for 8 

states, including Florida. 
201 

Comment 44: Commenters expressed Nevada target concerns. 

Response 44: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters questioned how the state agencies came to their assumptions about existing and 

future RE opportunities in Nevada. Commenters stated starting with a calculation showing that 

only 2,510,974 MWh of Nevada's 2012 RE production could be used for section 111(d) 

compliance, the State Agencies assume 4,943,138 MWh of RE by 2029 (rather than the 

6,364,153 MWh assumed by EPA) is a more feasible goal to use in establishing Nevada's 

adjusted emission rate goals. Commenters said the state agencies' 2029 RE target is difficult to 

understand, given the significant RE generation that has been added since 2012 and is projected 

to occur over the next 15 years. Commenters included a Table 1 comparing the state agencies' 

calculations to EPA's assumptions and NV Energy's projections from its proposed SB 123 

implementation plan. Commenters stated NV Energy's projections, like those of the state 

agencies, only consider RE used to serve Nevada load, and exclude RE exported to serve load in 

other states. 

Commenters said the state agencies' proposed target is too low compared to both EPA's 

assumptions and NV Energy's forecast. For example, commenters noted that NV Energy's 

forecast of RE production shows that it alone could reach the state Agencies' 2029 target for 

Nevada around 2017. Commenters said the state agencies' target of 4,943,138 MWh equates to 

only 13.72% of NV Energy's forecast system energy by 2029, which is 4 years after Nevada's 

RPS hits 25% of retail sales. By comparison, the commenters stated NV Energy's forecast shows 

RE for 2015 is expected to already be 11.47% of system energy. Commenters asserted the 

Nevada agencies are essentially asking the EPA to assume that Nevada's transition to RE, which 

has been accelerating over the last few years, will decelerate and then almost stall out over the 

next 15 years. Commenters said Nevada will have no problem generating enough RE to meet 

BB3's assumptions just under a business-as-usual approach, and EPA's goal of 18% by 2029 is 

easily attainable. 

Comment 45: Commenters asserted the Colorado target is unachievable. 

Response 45: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters asserted the plan overestimates the reduction that will be achieved by Colorado's 

RES and does not account for the use of multipliers. Commenters said that while the stated 

mandate is 20-30% for the major electric suppliers, there is additional credit given in the RES for 

the use of specific resources: for example, solar resources brought on line prior to June 30, 2015 
202 

have a "three times" multiplier for compliance with the RES. Commenters stated this will reduce 

the overall energy generation from renewable resources. Also, the commenters said not all 

renewable generation credited in Colorado is required to be generated in Colorado: for example, 

Tri-State Generation and Transmission Association is WREA's wholesale supplier and also 

serves 18 of Colorado's 22 electric cooperatives. Commenters said Tri-State has generation 

assets in 5 states to serve its membership requirements, including a 30MW solar facility in New 

Mexico, thus, while the overall generation for Colorado's cooperatives may approach 20%, it 

will not all be generated inside the state. 

Commenters stated that another factor to consider is that Colorado's RES actually allows credit 

for eligible generation resources not considered in the EPA Plan, including industrial waste heat, 

biomass from beetle kill and methane from landfills and coal mining. Commenters 

acknowledged that combustion from burning biomass and methane emits greenhouse gases, but 

they asserted the overall benefit from combusting these fuels should be accounted for in the Plan. 

Comment 46: Commenters raised Utah-specific concerns on the target that the EPA calculated 

for that state. 

Response 46: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. Target generation levels under building block 3 are 

quantified and assigned at the interconnect level, rather than the state-level. The final 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said that the assumed contribution of renewables to Utah's final CO2 emission 

target is based on policy decisions, including RPS, made in other states that are outside Utah's 

control. Commenters asserted these assumptions do not reflect the technical potential of 

renewable generation in Utah, and are inappropriate for Utah. 

Commenters also stated that the EPA's treatment of renewable electricity further complicates the 

target calculation. Commenters stated Commenters stated the EPA used a state jurisdiction 

method to include renewable resources located in Utah in the state's rate-based target, but has 

since suggested allocating credit for Utah's renewables to out-of-state renewable power 

purchasers. Commenters indicated that 60 percent of Utah's renewable electricity generation in 

2012 was exported, inflating Utah's building block 3 target proportionally. Commenters stated 

that excluding exported renewable electricity from Utah's goal computation would reduce Utah's 

2030 compliance gap by 56 lbs CO2/MWh. Commenters expressed concern about this 

potentially inconsistent approach in allocating credits for renewables, asserting that consistency 

is required between how the EPA sets state CO2 emission targets, and how states are allowed to 

meet those targets. Commenters concluded that the EPA's inconsistent and unclear method for 

calculating the state's CO2 emissions target impedes the State of Utah's ability to provide 

substantive feedback on the EPA's proposed rate-based target. 

 
203 

Comment 47: Commenters expressed Louisiana specific concerns on target. 

Response 47: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Concerning Louisiana, commenters said EPA's estimates do not consider (in most cases) 

economic or market constraints, and therefore do not represent a level of renewable generation 

that might actually be deployed. Thus, commenters stated that even where states have similar 

potentials, the NREL recognizes that there may be other factors which inhibit the development of 

the same RE sources in one area and not another yet EPA conducted no such state-specific 

analysis. 

Commenters stated Louisiana's RE technical potential differs substantially from that of Kansas, 

Nebraska, Oklahoma, and Texas, not surprising given the geographical differences in this region 

of the country. According to the NREL's estimates, the commenters said Nebraska and 

Oklahoma have approximately 3x the RE potential of Louisiana, Kansas 4.5x more, and Texas 

12.2x more. Discounting offshore wind power, which cannot be deployed in a timeframe needed 

for it to facilitate compliance with the proposed rule, the commenters stated Oklahoma has 3.6x 

the RE potential of Louisiana, Nebraska 3.9x more, Kansas 5.7x more, and Texas 15.1x more. 

Consequently, the commenters said that EPA's assumption that Louisiana can meet the RPS of 

Kansas, which, per EPA's own data, has almost 6x the RE technical potential, is incorrect. 

Commenters said, in 2005, J. Kennedy and Associates, Inc. was engaged to assist the LPSC in 

conducting a feasibility study of implementing an RPS requirement in Louisiana. Commenters 

stated that report concluded that "due to the lack of availability of renewable resources in 

Louisiana and the current energy production capabilities, an RPS was not feasible." Accordingly, 

the commenters stated the LPSC decided not to establish an RPS, but did create a voluntary 

"green pricing tariff' on a trial basis. Commenters stated that for the trial, Entergy Gulf States 

Louisiana, LLC (EGSL) agreed to implement a pilot program known as "Geaux Green". 

Commenters explained that program began in 2008 and offered customers the opportunity to 

voluntarily purchase 100 kWh blocks of RE at an additional cost of $2.25 per block; EGSL used 

the premiums to acquire RE to meet the customer demand. Commenters said the program had 

limited success in attracting customers and was eventually terminated. In 2009, the commenters 

said LPSC recognized that the recent volatility in natural gas prices (natural gas spiked to 

$14/1000 Btu in mid-2008) warranted the re-evaluation of an RPS for Louisiana. At the direction 

of the Commission, commenters said the LPSC staff held task force meetings, received 

comments from interested parties, and performed a detailed review of the best practices of other 

states that had established RPS requirements, then in 2009, issued a broad report on RPS 

policies. Commenters stated the report detailed various RE technologies that would be suitable 

for Louisiana - generation from rice hulls; wood, mill, and forest residue biomass; municipal 

solid waste; bagasse; cogeneration; energy efficiency; and wood co-firing in coal-fired boilers - 

and contained a cost impact evaluation. Following this, the commenters said LPSC decided to 

implement a 3-year RE pilot program (REPP) to investigate the viability of an RPS. Commenters 
204 

stated the REPP required Louisiana's utilities (Entergy, Cleco, and SWEPCO) to evaluate and 

implement RE resources, and included a research component and an RFP component for larger 

new RE resources. At the end of the 3-year REPP period, the commenters said LPSC staff 

concluded: 

"[B]ased on the information filed by the utilities, as well as Staff's participation 

throughout the process, a mandatory RPS is not warranted at this time. The data 

provided by Cleco, Entergy, and SWEPCO indicate that the levelized cost of 

renewable technologies exceeds the costs of conventional resources. For example, 

the levelized cost of a combined cycle gas turbine is below the cost of any of the 

major renewable technologies (wind, solar, biomass). Current prices for natural 

gas have put renewable technologies at a cost disadvantage."

Commenters added that although Louisiana does not have an RPS, it has incentivized programs 

that promote the wise use of the state's natural energy resources to enhance both conservation 

efforts and economic development. In fact, the commenters stated the Louisiana legislature has 

declared that: 

increasing the consumption of RE resources promotes the wise use of Louisiana's natural energy 

resources to meet a growing energy demand, increases Louisiana's use of indigenous energy 

fuels, and fosters investment in emerging renewable technologies to stimulate economic 

development and job creation in the state; and Louisiana should actively encourage the 

manufacture of new technologies through promotion of emerging energy technologies. 

Commenters stated Louisiana provides several incentives, such as a tax credit for the purchase 

and installation of new solar and wind energy systems installed at either a residence or a 

residential rental apartment complex and property tax exemptions. Commenters said the LPSC 

also requires publicly owned utilities and rural electric cooperatives to offer net metering to 

customers with systems that generate electricity using solar, wind, hydropower, geothermal, or 

biomass resources. Commenters said utilities must provide customer-generators with a meter 

capable of measuring the flow of electricity in both directions and pay for meter itself, with net 

excess generation credited to the customer's next bill indefinitely. Additional incentives include a 

home energy loan program administered by the DNR, and a green jobs corporate or income tax 

credit for qualified capital infrastructure projects that are directly related to "green" industries, 

including the RE power industry. Thus, Commenters asserted Louisiana has instituted a number 

of programs and tax credit offerings that encourage the development and use of RE and 

implementation of demand-side EE measures. Commenters asserted EPA should not assume its 

simplified analysis supplants the expertise and experience of Louisiana's PSC and electric 

utilities. Commenters concluded that imposing a de facto RPS on Louisiana's citizens is neither 

economical nor necessary. 

Commenters said that even if an RPS was established in Louisiana, the state has low wind and 

solar resources. As a result, the commenters said most RE will have to be transported from other 

states. Commenters said it appears that EPA has given permission to Louisiana to use the wind 

and solar energy developed in other states as part of its RPS standard, but high RE states, such as 

Kansas, may not be willing to give those renewable wind resources away without a legal fight 

Without sufficient RE from other states, the commenters said Louisiana will be handicapped in 
205 

meeting this emissions target. Even if Louisiana is able to use renewables from Kansas or other 

states as part of the rate based standard, the transmission and backup generation resources 

needed when the wind does not blow may not exist today, according to the commenters. 

Commenters added that any additional time and cost required cannot be calculated without a 

detailed study that would have to extend beyond the comment period timeframe. Additionally, 

commenters stated the IPM model is not set up to determine hourly dispatch. Commenters stated 

thus, cannot accurately predict the additional costs and resources needed to integrate renewables 

into Louisiana's energy system. 

Commenters said EPA's calculated average annual growth factor of 8.35% for Louisiana is 

unrealistic and that non-hydro RE generation in Louisiana has actually been falling over the past 

decade. Commenters were concerned because RE resources are some of the most expensive to 

deploy, and will have a considerable impact on the cost of complying with the proposed rule. 

Commenters said use of a regional average is highly subjective and assumes that the states in a 

region are similar in terms of their specific policies and incentives regarding RE development 

and assumes that all states included in a region are comparable in terms of their technical 

potential for RE generation - this is clearly not the case for Louisiana and the region in which it 

was assigned. 

Commenters said EPA's approach effectively sweeps under the rug over 10 years of Louisianaspecific analysis in favor of its own generalized approach, which is inconsistent with the basic 

tenets of the CAA and with traditional utility resource planning practices in Louisiana that seek 

to acquire supply and demand side resource on a least-cost basis. Commenters concluded there is 

no way an approach that averages projected RE generation additions over a geographic region 

that spans from the plains of Nebraska to the Gulf of Mexico can be consistent with these least 

cost resource procurement practices. 

Commenters asserted the amount of RE is not practically achievable for Mississippi. Looking at 

the particulars of the proposed goal, the 2012 baseline RE for Mississippi is 1,509,000 MWh, 

which is almost all from biomass energy generation from pulp and paper mills, according to the 

commenters. Assuming that this can be counted towards compliance (the rule is not clear that 

biomass can be counted as zero carbon), the commenters said it would result in the state having 

to develop over 4,000,000 MWh of additional RE generation. Commenters said Mississippi has 

no wind potential nor the solar capacity that western states have. In fact, the commenters asserted 

the future year IPM runs that EPA performed did not indicate any additional RE for Mississippi 

because the results showed RE generation was too costly. Therefore, the commenters concluded 

there is no basis to require an increase of new RE to this magnitude due and that mandating it is 

an excessive and unnecessary cost for rate payers. 

Commenters added that the alternative goal approach did not project any solar or wind 

generation because they were not considered cost effective and included only a small amount of 

biomass; most projected RE is from hydroelectric generation based on a feasibility study, not 

proven technology. Commenters said hydroelectric generation is not an available resource for 

Mississippi. Based on the alternative approach and ruling out hydroelectricity and biomass (due 

to its uncertainty in accounting), the commenters said the future RE goal for Mississippi should 

be zero. 
206 

Comment 48: Commenters had concerns regarding proposed East Central Region goals. 

Response 48: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the six of the eight states in the East Central region have a mandatory RPS 

that was used by EPA to calculate the regional and state goals. Commenters stated even though 

both Virginia and West Virginia have evaluated renewable energy opportunities and adopted 

RPS policies, EPA gives no consideration to this experience in calculating the regional goal. 

Commenters stated that interestingly, the RPS for the District of Columbia is included in the 

calculation of the regional average, but the District of Columbia had zero renewable generation 

in 2012, and its standard focuses on the utilization of out-of-state renewable resources as a 

percentage of sales. Commenters stated EPA has not proposed a state goal for the District, and 

should have excluded its RPS from the calculation of the East Central regional goal. 

Commenters stated EPA must also consider the renewable energy experience of Virginia and 

West Virginia, along with other geographic and cost-effectiveness differences for renewable 

energy development that exist across the entire region. 

 Commenters stated EPA's own data demonstrates why a simple average for calculating a 

regional target is wrong. Commenters stated that the States in EPA's East Central region that 

have higher future RPS requirements are those with relatively little generation compared to the 

others in this region. Commenters stated Delaware, D.C., Maryland and New Jersey generated 

approximately 111 million MWh in 2012 and are assigned 2020 Effective RE Levels between 19 

to 22%. In contrast, commenters stated, Pennsylvania, Ohio, Virginia, and West Virginia 

generated approximately 500 million MWH in 2012 and are either ignored in the calculation or 

assigned a 2020 Effective RE Level no greater than 9%. Commenters stated there is no rational 

basis - legally or mathematically - for giving such undue and unintended influence to certain 

legislatures at the expense of others, including Virginia. 

Commenters identified several defects with EPA's grouping methodology. First, commenters 

said DC has a state-designated RPS goal of 20% (among the highest) but possesses no fossil 

generation, limited renewable generation and imports almost all of its power. Commenters stated 

inclusion of DC as part of the East Central Group biases the results insofar as it has no traditional 

generation resources and no emissions. Consequently, the commenters said there is no in-state 

generation that would be offset by DC's renewable credits. 

Commenters said EPA's proposed state emission rate goals in the East Central Region must be 

recalculated due to the passage of S.B. 310 in Ohio just prior to the publication of EPA's 

proposed rule. Commenters stated Ohio S.B. 310 amended EE and alternative energy resource 

mandates (including renewable mandates) by imposing a 2-year pause on EE, peak demand 

reduction and RE resource requirements. Commenters stated it eliminated both the RE resource 

in-state requirements and advanced energy resource requirements, thereby reducing the former 

alternative energy resource mandate by half. Due to the timing of Ohio SB 310, the commenters 
207 

said EPA did not reflect the impact of this new state law in the BB3 calculations for the East 

Central Region, and must recalculate these goals based on its passage. 

Commenters said EPA erred in its computation of RE targets by taking the arithmetic average of 

the six states with RPS programs, which amounts a regional average of 16%. Commenters stated 

that VA and WV were assigned an effective RE level of 0% but not included in the averaging 

calculation and that including the values from these two states, as would be appropriate, would 

have produced a lower regional compliance target of 12%. By excluding these two states, that 

have chosen not to enact RPS targets, the commenters said EPA penalizes the rest of the region 

with a higher regional compliance target that translates into higher required targets in the 2020-

2029 timeframe. Commenters asked EPA to recalculate its East Central regional compliance 

targets to correctly reflect only those states that have promoted RE. 

Comment 49: Commenters expressed concern on use of the Kansas RPS for South Central 

Region. 

Response 49: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters noted that Kansas is the only state in EPA's South Central Region that has an 

RES/RPS in percent form. Commenters stated that Texas' standard of 10,000 MW by 2025 was 

not used by EPA, apparently because it is explicitly capacity-based (i.e., not in percent form). 

However, commenters stated the Kansas RES - and other states' standards expressed in percent 

terms - are capacity-based, a fact which EPA overlooked when utilizing the DSIRE data. 

Commenters asserted that there is therefore no objective reason to exclude Texas' RPS for use in 

finding RE levels. For the South Central Region, commenters proposed that the Texas standard 

of 10,000 MW be converted to a percent value, then averaged with Kansas' 17.1 percent (the 

value that commenters derived for the Kansas standard after making other suggested revisions). 

Commenters suggested that the easiest way to do this (and a conservative way considering 

growth) is to divide the 10,000 MW Texas standard by the state's latest available total generating 

capacity - using the 2012 unit capacity supplied by EPA the 2012 total generation capacity for 

Texas is 148,944 MW. On this basis, commenters calculated that in percent terms, the Texas 

renewable standard is therefore 10,000 MWh/148,944 MWh = 6.7%. Commenters concluded 

that averaged with the effective Kansas RES of 17.1 %, the Kansas-proposed RE level for the 

South Central Region should be 11.9%. Rounded to the nearest percent, this is 12%. 

Comment 50: Commenters expressed the need for consideration of capacity-based RPS. 

Response 50: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 
208 

The following are summaries of the specific public comments under this comment: 

Commenters noted that in the South Central region, the Kansas RPS is capacity-based despite 

EPA stating in the proposal that it did not include capacity-RPS targets. 

Commenters stated EPA should also review its conclusions for the South Central region under an 

RPS-based approach. Commenters stated that it was their understanding that, when calculating 

the regional averages, EPA did not include capacity-based RPS targets; however, in the South 

Central region, EPA based the regional renewable energy goal on the Kansas RPS, which is 

capacity-based. Commenters stated that without the Kansas renewable goal, there are no states 

with qualifying RPS programs in the South Central region. Commenters stated that instead of a 

20 percent regional goal, the target for the South Central region should be either zero percent (if 

EPA were to follow its existing methodology) or 10 percent (if EPA were to follow its 

methodology for Hawaii and Alaska). 

Commenters stated that while the proposal indicates that "EPA does not include targets that were 

capacity-based," it appears that it did exactly that in the South Central region. Commenters 

questioned as to why this took place and if EPA plans to examine this issue further. Commenters 

also questioned if EPA analyzed the different targets that would have resulted from a regional 

generation-based target. 

Comment 51: Commenters had concerns regarding crediting of in-state and out-of-state 

generation. 

Response 51: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the crediting of RE resources in section VIII of the 

preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters said the final rule should recognize that RE generation should be credited where the 

RECs apply, not to the state where the RE is generated. Commenters noted that the RE generated 

by existing renewable are often used in other states for RPS compliance, and that portion of the 

RE is not available for use in the state where it is generated. Commenters added that a state 

specifying a floor on the amount of RE that must be produced within the state has determined 

that locally-produced RE will likely be much more expensive than RE produced in another state. 

Commenters said the state whose customers are paying for RE should receive compliance credit 

for that RE in its 111(d) plan. Commenters said that existing RE resources have been 

significantly financed and used by out-of-state customers; and commenters said EPA erred in 

ignoring interstate electricity trade in the proposed rule, giving no consideration to this fact and 

giving states where the physical asset is located 100% of the credit in their goal calculation. 

Commenters said many existing RPS include out-of-state RE generation, meaning that the 

Proposed Rule's RE targets reflect the assumption that out-of-state RE generation can be counted 

towards compliance. Commenters asserted that since these RE targets are incorporated into each 

state's CO2 goal, the goals inherently assume that some states will rely on out-of-state RE 
209 

generation to meet their targets. If EPA bars states from doing so, the commenters said states will 

face greater difficulties in meeting EPA's CO2 emissions targets because the targets are based on 

the assumption that states can rely on RE projects both within and outside of their borders. To 

remain consistent with its foundational calculations and minimize the burden on states, 

commenters said EPA must finalize this proposed approach and allow states to include out-ofstate renewable generation in their plans. Commenters stated that EPA's approach is not 

consistent with the general nature of the interconnected electric system, which is not bounded by 

state borders and supported an approach that more closely aligns each state's target with the 

resources that will be available to that state for compliance purposes. 

In contrast, commenters suggested that to be consistent in the interstate treatment of renewable 

energy and fossil energy, EPA assign both the coal-fired emissions and the credits for the 

reductions from RE generation to the state in which they are located. Commenters stated that use 

of (in some cases only a portion of) existing RE resources in a state to calculate the baseline, 

then allowing other states where the renewable generation is used to count the generation toward 

reductions in CO2 is patently unfair to ratepayers and unconstitutional. Commenters said that for 

a regional facility, it is not only customers living in a state with a renewable mandate who pay 

for the construction and operation of those resources. For a regional utility, the commenters said 

all members pay the same rates for their power supply, which includes an amount necessary to 

recover the costs of renewable wind energy. 

Several commenters stated that EPA should recalculate the baseline and compliance targets to 

reflect emissions reductions achievable for each states considering RECs and where the RE is 

credited. Commenters stated that for states that define a limit on the use of imported RECs as a 

means of compliance, the EPA should recalculate the state RPS portion that includes only the 

amount of RE that must be produced in the state, not that which can be supplied from outside the 

state in the form of RECs. Commenters said this recalculation should be done so the rule would 

not inadvertently discourage states from serving as host for RE facilities in excess of their own 

compliance requirements, if that is the most economic location for RE to be constructed or 

operated. Commenters asserted EPA's approach to determining a regional average RE 

component of existing generation needs to be corrected to also include consideration of RE that 

may be distributed across an international border. Commenters also stated that in the recalculated 

targets, EPA should account for the credit multipliers that some states apply to certain resources 

and that any state RES mandates used by EPA in setting regional or state RE goals should be 

discounted to reflect these credit multipliers. 

Commenters stated EPA did not consider RES design elements that reduce the required levels of 

in-state RE generation when setting regional RE goals. Commenters said the regional RE goal 

calculations do not recognize important elements of individual state RES programs, such as the 

use of out-of-state RECs for compliance, alternative compliance payments and credit multipliers 

for certain resources; mechanisms that serve to reduce the actual levels of in-state RE generation 

needed to satisfy RES mandates. Commenters stated EPA's failure to consider these factors 

results in inflated state RE goals that may not be achievable by certain states. Commenters also 

stated state RES mandates are not proxies for a state's potential to deploy more RE generation, 

but rather, Commenters stated reflect policy choices made in each state with regard to how 

much and what type of renewable resources it wants to encourage, at what cost and in what 

timeframe. Commenters said this is underscored by the fact that at least 23 of the 29 states with 
210 

an RES allow compliance deviations due to cost impacts, supply constraints or reliability 

concerns. Commenters added that 11 states allow compliance deviations based on a force 

majeure finding or if utilities have made good faith efforts to comply but cannot because of 

factors beyond their control. 

Commenters said that, although the CPP proposal contemplates the possibility of allowing states 

to credit out-of-state RE that they fund and support, EPA must recognize that a state does not 

have control over the permitting, siting, and regulation of facilities located outside its borders. 

Commenters said that state RPS contain necessary options and flexibility with regard to this and 

that such flexibility, however, may be lost if a state's RPS becomes a part of the federally 

enforceable CPP. 

Comment 52: Commenters expressed support for the regional treatment of RE. 

Response 52: The resources and data provided in these comments were valuable in finalizing the 

building block 3 methodology, particularly in recognizing the interstate nature of RE. The full 

methodology is described in section V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated both existing and new renewables should receive regional treatment in any 

goal setting methodology. Commenters stated that Maine electricity generation exists in a 

regional marketplace, and this existing regionalized market extends beyond electrical energy to 

include the renewable attributes of that energy. Commenters stated that over two-thirds of the 

wind power projects in Maine under construction or in permitting are under direct contract with 

out-of-state entities and more will serve regional load. Further, commenters stated, all of the 

existing wind generation in Maine is qualified and receives revenues from the sale of RECs into 

other New England state RPS programs. Commenters also stated hydroelectric and biomass 

facilities located in Maine also sell energy and RECs out of state. Commenters stated that 

whatever final specific methodology is adopted by EPA, the goal setting methodology should 

reflect the reality of the existing regionalized renewable energy contracts, transfers and markets 

that exist in New England and New York that result in new and existing renewable projects 

including wind, hydroelectric and biomass serving regional load and regional customers outside 

of Maine. Commenters stated it is unfair to allocate responsibility for new or existing renewables 

in BB3 entirely to Maine because the wind resource exists within Maine but serves out of state 

load. 

Commenters stated EPA's approach for determining state-by-state CPP targets ignores ownership 

rights in generating resources. Commenters said that while state targets were established by 

considering generating resources within a state and electricity customer retail sales in the state, 

actual sourcing of electricity to service those sales may come from both within and outside state 

borders. Commenters said electric utilities may own or operate electric generating resources in 

one state that may or may not serve electricity customers in that state. Commenters said joint 

ownership, assignment and long-term sales are commonplace in the electric industry, due to the 
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high capital cost, long-lived assets and economy of scale benefits larger assets offer. By 

allocating the renewable attributes of a generating resource to a state, regardless of whether the 

owner of the generating resource resides in that state or uses the generation to serve customers in 

that state, the commenters asserted EPA has effected an unlawful taking of property rights. 

 Commenters stated EPA's approach for determining state-by-state CPP targets ignores 

ownership rights in generating resources. Commenters said that while state targets were 

established by considering generating resources within a state and electricity customer retail 

sales in the state, actual sourcing of electricity to service those sales may come from both within 

and outside state borders. Commenters said electric utilities may own or operate electric 

generating resources in one state that may not serve electricity customers in that state. 

Commenters said joint ownership, assignment and long-term sales are common in the industry, 

due to the high capital cost, long-lived assets and economy of scale benefits larger assets offer. 

By allocating the renewable attributes of a generating resource to a state, regardless of whether 

the owner of the generating resource resides in that state or uses the generation to serve 

customers in that state, the commenters asserted EPA has effected an unlawful taking of property 

rights. 

For example, commenters noted renewable generation constructed in North Dakota to help meet 

the Minnesota state-mandated RPS is counted toward North Dakota RE goals in the TSD. 

Commenters said that when EPA established their CPP target portion for BB3 renewables, EPA 

referenced each state's retail electricity sales and assigned a percentage for qualifying RE. In 

turn, the commenters said, the EPA 15% renewables target was established by EPA analysis 

based on the average RPS for states in the region with an RPS. However, commenters said CPP 

state renewables BSER targets may also include state approved RPS qualifying RE options (such 

as existing hydro) that EPA is proposing will not be recognized for CPP proposed compliance. 

Consequently, the commenters said, the relative stringency of a CPP renewables target set in a 

state is affected by considering both renewables deployed in other regions that qualify for 

satisfying a state RPS and renewables that EPA has not determined will count for CPP 

compliance. Thus, the commenters stated, EPA creates situations where resources deployed and 

paid for on behalf of electric utility customers in one state may have their underlying RE value 

attributed to another state. 

Commenters also recommended that any asset or PPA recognized, approved and paid for by 

utility customers be credited when accounting for CPP compliance. In the case of Minnesota 

Power, its significant North Dakota wind investments, PPAs and Canadian Hydro PPAs should 

be included and credited towards Minnesota compliance with the CPP. Commenters said 

customers risk disaggregation from the benefits of RE resources for which electricity customers 

have been paying when renewal is due. Commenters said a PPA may expire and may be up for 

renewal at the time when capital investment serviced by satisfaction of a state RE standard is still 

under cost recovery. 

Comment 53: Commenters asserted there were insufficient RE resources to meet state goals. 

Response 53: The resources and data provided in these comments were valuable in finalizing the 

building block 3 methodology, particularly in recognizing the interstate nature of RE. The full 
212 

methodology is described in section V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated an example of the incorrect outcomes from EPA's flawed methodology is 

that the required expansion of RE resources does not necessarily occur in the states with the most 

abundant renewable resources and the most cost-effective opportunities. Commenters stated for 

example, in the South Central region, Kansas has the second largest amount of RE potential in 

the region, but increases their RE generation by the lowest amount of any state in the region. 

Meanwhile, the commenters said, states such as Arkansas and Louisiana, with the least abundant 

and more expensive RE resources, are required to increase their RE development and generation 

the most. In fact, the commenters stated, EPA's goal calculations assume that only 0.03% of the 

potential generation from renewable resources in Kansas would be developed, with no additional 

increases occurring after 2023. Further, commenters stated, despite the fact that Louisiana has 

only 16% of the potential renewable resources of Kansas, EPA's goal presumes that Louisiana 

would increase its annual renewable generation by 830 GWh more than the increase assumed for 

Kansas. Commenters provided a summary figure discussing these issues for the South Central 

region. 

Comment 54: Commenters recommended focusing in-state RE target based on that state’s 

technical and economic potential. 

Response 54: The resources and data provided in these comments were valuable in finalizing the 

building block 3 methodology, particularly in recognizing the interstate nature of RE. State RPS 

requirements are not a factor in quantifying the amount of cost-effective RE that is part of the 

BSER in the final rule. The full methodology is described in section V.E of the preamble and in 

the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated because the EPA has structured its building block methodologies to express 

the best system of emission reductions on an individual state basis, it recommended that the 

focus of establishing an in-state renewable generation target should be on the technical and 

economic potential for the expansion of renewable generation within the boundaries of the 

individual state. Commenters stated that such an approach is different than the EPA's proposed 

derivation of an in-state renewable generation target from an averaging of the renewable 

portfolio standards in the corresponding region. Commenters stated renewable portfolio 

standards are a mechanism by which to drive investment in renewable energy through the 

participation of a state in a larger regional market. Commenters stated that through an RPS 

approach, renewable resources are incentivized to build at the most economically and technically 

feasible location within the borders of the defined RPS market - borders that generally 

correspond to the regional grid in which the state operates, rather than aligning with individual 

state boundaries. Commenters stated that in establishing aggressive RPS policies, states consider 

the potential for the regional market to fulfill the demand created by the state policy, and do not 

necessarily require the siting of all incentivized renewable energy to occur within their individual 
213 

state borders; to do so would be to ignore the benefits and realities of participating in a regional 

transmission organization. Commenters stated that contrary to these fundamentals, the EPA's 

proposed methodology relies on state RPS goals to yield in-state renewable generation targets 

and does not fully capture the benefits of the RPS mechanism as a regional tool. Furthermore, the 

commenters stated, the EPA's proposed approach neglects to appropriately incentivize renewable 

energy in states and regions that previously disregarded the benefits of investing in a cleaner 

energy infrastructure. Commenters stated for example, the Southeast regional renewable energy 

generation target corresponds to only 10 percent as proposed by the EPA since only 1 of the 8 

states in the identified region previously adopted a renewable portfolio standard. Commenters 

stated this is in stark contrast to the 25 percent regional renewable energy generation target 

proposed for states in the Northeast. 

Comment 55: Commenters expressed concern regarding the RE growth assumption 

methodology. 

Response 55: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. Target generation levels under building block 3 are 

quantified and assigned at the interconnect level, rather than the state-level. The resources and 

data provided in this comment were valuable in finalizing the building block 3 methodology, 

particularly in the reevaluation of solar cost and performance assumptions. The final 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated BB3 reductions should be based on economic RE potential. Commenters 

stated RE reductions are an important component of the guidelines, and in crafting this building 

block, EPA should leverage what is known about the economic potential of different RE 

resources and the potential for RE markets to meet this economic potential. Commenters stated 

that for states without an RPS, basing RE targets off the RPS of neighboring states may 

significantly under-represent the state and regional potential. Commenters also stated that for 

states with an RPS, basing RE targets off the RPS of neighboring states may significantly overrepresent the state and regional potential. Commenters stated that the alternative approach put 

forth by EPA is not subject to this concern, as EPA combines state-specific RE technical 

potential assessments with a methodology to determine state-specific economic potential by RE 

category. 

Commenters stated that, though not preferred, if EPA continues with its proposed methodology 

for establishing BB3 targets, it should consider that the methodology is based on the nominal RE 

generation requirements in state RPS, but most state RPS pertain only to a portion of electric 

load. Commenters stated that EPA is likely to receive comments requesting that BB3 targets be 

based on the effective level of RE in state RPS, rather than the nominal level. Commenters stated 

that if EPA were to make such a change, BB3 RE targets would be reduced. Commenters stated 

it would not support such a change where the result is less than the achievable economic RE 

potential in the state. 
214 

Commenters stated electricity demand growth will vary by state (e.g., EPA assumes 45% growth 

in California between 2012 and 2030, but -23% "growth" in Wisconsin). Commenters said 

EE/RE are easier to implement in a growth environment, but there is no adjustment for that in the 

EE/RE target. 

Commenters said that EPA should adjust the RE growth assumptions to more accurately reflect 

the potential in states and regions. As technology and deployment prices continue to plummet, 

commenters said many states have already, or will soon, meet the level of RE generation that 

EPA assumed that wouldn't be met until 2020. 

Commenters said EPA should consider the rapidly declining costs of RE sources and recent 

improvements in technologies when determining the level of RE each state could potentially 

produce in complying with the CPP. In 2013, the commenters said CO2 emissions were 15% 

below 2005 levels as a result of a reduction in the carbon intensity of power generation and 

slowed demand growth. Commenters asserted emerging trends in the marketplace are driving 

these changes and could allow for a transition to a low-carbon future at a much lower cost than 

commonly assumed, with net financial benefits for power companies and customers potentially 

accruing in some parts of the country. Commenters said these benefits include public health 

benefits from replacing old, inefficient, and heavily polluting power generation with new, 

cleaner forms of generation. Commenters said their analysis (www.wri.org/publication/seeingbelieving-creating-new-climate-economy-united-states) shows that most states could generate a 

lot more of their electricity from economically competitive renewable sources than is commonly 

assumed. 

Comment 56: Commenters stated the EPA should use a weighted average. 

Response 56: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated it is more appropriate to use a weighted average, so as not to create 

unattainable goals based on the RPS averages, where many of the states with high RPS 

contribute much lower amounts of energy to the grid, such as Maryland or Washington D.C. 

Commenters also stated it asserted that the quantification of RE generation needs to include cost 

factors, availability during critical periods of energy demand, land use and environmental 

impacts, and effects on reliability of the electric grid due to meteorological variability. 

Commenters stated that in the East Central region, the renewable target was inflated by including 

the relatively high RPS's of Delaware and DC, which only produce 3 percent of the region's 

renewable energy, and questioned if EPA has considered basing its target on a generationweighted basis. 

Commenters stated an approach that would address some of the concerns would focus on actual 

renewable generation or future generation in each state that is weighted for load factor. 
215 

Commenters stated if the regional averaging approach is carried forward, they proposed that the 

RE target level of performance should include all states in each region in the calculation, 

irrespective of whether that state has a formal RPS or not. Then, the commenters continued 

stating that using some measure of actual current or projected-for-2020 renewable generation, a 

weighted average where the load (electricity usage) in each respective state is factored into the 

average could be calculated. Commenters stated this results in calculated regional RPS values 

that more accurately reflect the total amount of RE generation in each state comprising those 

regions. In addition, the commenters stated, it provides a more reasonable assessment of RE 

potential in accordance with the concept that Building Block 3 serves as a component of the 

proposed best system of emissions reduction. 

Comment 57: Commenters recommended use of region-specific potentials for RE development. 

Response 57: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that based on EPRI research, a more effective and comprehensive basis for 

state aggregation would be informed by the region-specific potentials for renewable energy 

development, which would include technology costs, fuel costs, network effects, and regulatory 

requirements. Commenters stated investor response, regional competition for other resources, 

learning-by-doing and network effects, regulatory limitations, and public acceptance also should 

be considered. 

Comment 58: Commenters stated the EPA should delineate RE technologies available for 

compliance. 

Response 58: All RE technologies used to establish building block 3 generation are eligible for 

compliance. Additionally, the EPA has described the use of non-BSER measures to achieve 

standards of performance in section V.A of the preamble. 

The following is a summary of the specific public comment under this comment: 

Commenters stated it strongly urges the EPA to delineate in the final rule the renewable energy 

technologies used in the goal computation process and those that are available to the states for 

compliance purposes. Commenters stated that whatever the ultimate decision by the EPA with 

respect to the qualifying renewable technologies, commenters urged consistency between targetsetting and compliance options so that the stringency of the nationwide goal is maintained. 

Commenters noted that this specificity and consistency is needed across all building blocks and 

for all proposed methodologies; if a reduction potential or technology is considered when 

computing a state's target, then that same mechanism should be available to the states for 

compliance purposes. Commenters strongly recommended that this consistency is a fundamental 

of all elements contained in the final rule, whether addressing renewable technologies such as 
216 

hydroelectric or biomass resources, new natural gas combined cycle units, or any other 

component of the BSER determination. 

Comment 59: Commenters expressed support and opposition on setting a floor. 

Response 59: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

regional quantification and application of building block 3 has eliminated the need to evaluate 

state-specific RE minimums or maximums. The final methodology for building block is 

described in section V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Numerous commenters generally supported setting a floor for RE targets, and several suggested 

methods for setting a floor or situations in which a floor should be set. Commenters suggested 

using each state's RPS goals as a floor for achievable renewable generation in that state. 

Commenters supported a floor for cases where the target-setting methodology produces a result 

below 2012 RE levels. Commenters supported use of a floor and said that setting actual 2012 RE 

generation as the floor is one methodology that could be utilized, but this underestimates the 

ability to deploy RE. Commenters said that another methodology for establishing a floor would 

be to use the greater of 2012 generation or a particular state's own RPS target for 2030. 

Commenters recommended looking at the current existing renewable infrastructure in each state 

and using that generation to set a generation "floor" that all states must maintain moving 

forward. Commenters stated a state's existing generation and, if applicable, its existing state RPS 

requirement, should both serve as a floor to set the minimum level of emissions reductions 

available for that state. Commenters stated using a level lower than the state has already 

demonstrated (either through generation or a state RPS target) would indicate a lower level of 

emissions reductions than the state has found to be available. Commenters said if a floor is 

established, low RE generation states would be required to generate a minimum level if they will 

not meet the target generation by 2030. Alternatively, states like North Carolina that established 

its REPS based on what is technically achievable, should be allowed to adopt the REPS as the 

standard under BB3. Commenters supported requiring the same region-wide RE generation level 

across states as a floor. 

Several commenters opposed setting a floor for RE targets. Commenters opposed use of a floor 

in calculating RE targets, stating the goal of any rule should be to achieve desired reductions in 

the most economically efficient manner. Commenters said that if states choose to achieve 

compliance with their targets on a regional basis, then no rule should (1) discourage or 

"discount" any otherwise eligible RE measure in any state from counting towards regional 

compliance, nor (2) burden any state with an obligation to exceed its pro rata regional share (per 

MWh of generation) of RE. If a state either has or acquires more than its pro rata regional share 

of RE, the commenters stated that surplus should (1) be available and credited toward reducing 

the state's own remaining compliance requirements, or (2) be applied toward meeting the 

compliance requirements of the region. Commenters said establishing a floor for states with large 

amounts of existing RE which they cannot go below seems arbitrary when there is no floor that 

states with little or no RE must achieve. Commenters said this would penalize forward thinking 
217 

states for their existing accomplishments in lowering EGU CO2 rates. Instead, the commenters 

said a state's final CO2 rate should be based on achievable and realistic CO2 reductions at the 

effected EGUs. Commenters stated RE should only be used as a means to achieve that goal, 

giving states the flexibility to move between building blocks as they see fit to meet their goals to 

minimize cost and maintain reliability of electric generation. Commenters stated that including a 

RE floor in the BB changes it into a separate RE mandate. Commenters said EPA should be 

completely indifferent regarding how a state meets the final CO2 emission reduction target and 

therefore should not include a RE floor. Commenters asserted instituting a floor based upon 2012 

RE generation would require some states to supply more RE than those states' regional share 

would otherwise require, which could cost consumers more. Commenters said application of a 

floor would overturn a basic premise of this proposal - that a state's achievable RE is based on 

regional targets. Thus, commenters concluded, once a state's share of those regional targets is 

met, the state should not be further obligated. 

Several commenters did not agree with using 2012 as a baseline year for the floor. Commenters 

suggested EPA use an earlier baseline year or allow states to accumulate a bank between 2012 

and 2020 to use for compliance in subsequent years. Commenters said BB3 targets should be reevaluated and noting that some state RPS laws have future year adjustments that should be taken 

into account beyond what was on the books in 2012. Commenters did not support the use of a 

single baseline year, particularly due to the year-to-year variability of hydropower. Commenters 

said that because each state's target emission rate builds from its power generation system as it 

functioned in 2012, annual variations in hydro generation mean a snapshot taken of single year 

may not be an accurate representation. Commenters asserted using an average of 2011-2013 data 

may soften the impact of this variability, though did not have a preference for a specific 

approach. Commenters suggested a 3-to 5-year generation average. Commenters encouraged 

EPA to use a baseline methodology that accurately accounts for the power generation system in 

each state regardless of the magnitude of the practical change compared to the Proposal. In 

addition to changing the "starting point" for each state, the commenters said this adjustment 

could have an impact on states" target emission rates by changing the available NGCC capacity 

in EPA's goal computation calculations. 

Several commenters did not agree with EPA's "best practices" approach. Commenters stated 

there are no "best practices" for state RPS. Commenters said EPA fails to note that RPS 

represent a legislative choice to trade off higher electric costs for the presumed environmental 

and economic development benefits of renewable power. As such, the commenters stated there 

are no "best practices" that can be imported from one state to another, nor can EPA dictate to 

states what RE "best practices" should be. Commenters asserted that what EPA calls "best 

practices" are really only EPA's desired assumptions as to the type of portfolio standards that 

EPA thinks state legislatures should adopt. Commenters stated that the "best practices" method 

relies on the belief that an individual state's RPS was based on an assessment of the actual 

feasibility of generating that level of RE within the state rather than other factors, such as state 

politics or income level of consumers. Commenters also said the EPA provides no evidence to 

support its assertion the levels of RE prescribed by one state's RPS could be achieved in every 

other state in the region, given cost and resource constraints. Commenters stated the EPA's rule 

oversimplifies often-complex state RPS programs by attempting to translate the top-line 

renewable energy goals into an MWh goal without including the varying program components 

often included in those programs, such as credit multipliers, REC importation, use of EE or other 
218 

measures, and cost caps. Commenters stated that by failing to incorporate a state's own RPS 

commitments in its BSER determination, in which a regional average RPS target is applied to 

states that have already exceeded that target, EPA undermines its own justification for the Best 

Practices Approach. Commenters noted that not all states are participating in RE, which can 

impact target compliance with goals outside of those states' RE capability. 

Several commenters stated that the EPA should consider early action taken by states to increase 

RE use and decrease emissions. Commenters said EPA must consider investments made prior to 

2012 and state-by-state assessments when determining RE targets and allow states, companies 

and customers who have taken early action to use both new and existing RE to comply with the 

proposed goals. Commenters also stated that it is important that EPA retain in its final rule the 

flexibility for states to utilize existing renewable resources for compliance purposes. 

Commenters supported EPA's approach, which included existing non-hydro renewable 

generation in its calculation of each state's base-year megawatt hours and proposes to allow 

states to include existing renewables for compliance purposes beginning in 2020. Commenters 

stated this approach appropriately recognizes companies and customers with a long history of 

supporting the installation of renewable energy. Commenters added that states that have already 

taken significant steps to reduce their carbon footprints reasonably expect their efforts to be 

reflected in and supported by the Clean Power Plan. Commenters stated that EPA's proposal has 

the opposite effect: states that have taken early action to reduce emissions are penalized and 

asked to go further at greater expense than those states that have done less. Commenters stated 

that the penalties for taking positive action can and should be remedied in order to better 

accommodate state actions consistent with EPA's overall objectives. Commenters opposed 

establishing a "floor" based on 2012 generation, as this would penalize states for early actions. 

Comment 60: Commenters expressed concerns regarding the criteria for reapportioning state RE 

targets - total electricity sales vs total generation. 

Response 60: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated total generation is the most appropriate criteria for reallocation of RE 

generation within regions. Commenters stated the only exception is with EE, which, by its 

nature, tracks sales rather than generation (by lowering demand at all facilities that serve that 

state). However, commenters said RE is more closely tied to total generation than to total sales, 

so reapportionment should track generation. 

Commenters suggested EPA use annual state retail sales of electricity as the basis for the target 

(the same as BB4), instead of total in-state electricity generation. Commenters stated that in most 

cases the targets set by RPS policies in states are applied to the total retail sales within a state, as 

opposed to the in-state generation total or as a capacity target within a state. Commenters stated 

that EPA's proposed approach is contrary to this fundamental design approach of most RPS 

policies. Commenters suggested that using retail sales as the basis for the target also creates an 
219 

important link to BB4 where an analogous EE resource standard approach is used (essentially a 

RPS for EE). Commenters stated EPA justifies the in-state generation target approach by 

implying that the primary motivation for state RPS policy is to increase in-state renewable 

generation. Commenters stated that reducing GHG emissions and catalyzing RE development, 

regardless of location, are clearly major factors as well. Commenters stated that given that most 

RPS policies allow RE to come from a broad geographic area demonstrates that state RPS 

policies are more broadly focused than on just encouraging in-state renewable generation. 

Commenters stated Commenters stated this approach is also consistent with using RECs to track 

compliance, since they may come from out of state. 

Commenters suggested EPA adjust the regional average RPS target to reflect the RPS targets in 

state laws or regulations multiplied by the amount of statewide retail sales to which those RPS 

targets apply. Commenters stated that in practice, RPS policies do not require that the full effect 

of their "simple" targets be achieved. Commenters stated that all RPS policies have some 

conditions or limitations on scope that result in the effective target of the RPS being less than the 

"simple" target outlined in the law, and typically the difference is not insignificant. Commenters 

stated that for Washington, given the limited coverage of the law, and given cost cap provisions 

and other aspects of the law, the effective RPS target for Washington is about 10%, in contrast to 

the "simple" target of 15%. (For example, the Washington RPS has a "simple" target of 15% by 

2020 embedded in the state's Energy Independence Act (Chapter 19.285 RCW) that applies to 17 

of the 63 utilities in the state, covering about 80% of the load in the state. Therefore, the loadweighted RPS target for Washington is around 12% 2020.) Commenters stated that ideally, the 

RPS targets used to develop the regional "proxy RPS" target would take into account the full 

spectrum of qualifiers that might apply, but projecting all of these effects out to 2030 may be 

prohibitively difficult. Therefore, commenters recommended at least accounting for the retail 

sales (i.e., load) to which the RPS targets apply, instead of assuming all load is affected. 

Comment 61: Commenters noted concerns on the EPA’s target-setting methodology. 

Response 61: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended the following improvements to EPA's methodology to more 

accurately reflect best practices and existing trends of RE growth. Commenters stated that many 

of the state RPS goals extend beyond 2020, yet EPA used 2020 targets only in determining 

average regional RPS levels for the states for a 2030 emissions reduction target. Commenters 

suggested EPA reassess regional targets based on the last target year in state law: whether it be 

2015, 2020, 2025 or another year, in setting the 2030 renewable target. 

Commenters stated some states have multiple RPS targets for different load serving entities (for 

example, one target for IOUs and another for coops or municipal utilities; or one target for larger 

utilities and another for smaller utilities). Commenters stated that in any state with multiple 
220 

targets, EPA should use the larger of the targets in formulating the regional average. 

Commenters stated that since EPA seeks BSER, it should use the highest renewables targets 

being adequately demonstrated by states. Commenters stated while some states may have 

determined that lower targets are acceptable for some classes of utilities, they did not do so in the 

context of seeking the BSER. Commenters stated the higher targets, which have been 

demonstrated to be economically and technically achievable, clearly demonstrate 

BSER. Commenters agreed it would be better to use the highest RE standard for a region to give 

a closer approximation of the medium term potential carbon pollution reductions through RE that 

region. 

Commenters suggested EPA eliminate growth rate constraint, and choose best of: existing 

generation, existing state RPS requirement, and state goal based on the regional RPS average. 

Commenters agreed that RPS are instructive in evaluating BSER opportunities. Commenters 

stated some states have achieved higher RE generation and integration than is required by their 

RPS, indicating that an RPS should not be a cap on renewable generation; however, in EPA's 

target-setting methodology, some state targets fall below existing generation and existing state 

RPS requirements. 

Comment 62: Commenters asserted the EPA should incentivize states already meeting their 

targets. 

Response 62: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that for a state where renewable generation (based on 2012 levels) already 

meets or exceeds the regional renewable energy target proposed under this quantification in 

Building Block 3, its obligation under the target is capped at its share of the regional renewable 

energy target. Commenters also stated that similarly, once a state meets its share of the regional 

renewable energy target from 2017-2030, its obligation is capped. Commenters stated one 

alternative approach would be to incentivize states that have already met the renewable energy 

target to continue promoting renewable development and consider this 'added' renewable 

generation as an overall contribution to the regional renewable energy target. Commenters stated 

Commenters stated such an approach could better account for the economic and market 

externalities that will impact individual state renewable energy deployment within a region. 

Comment 63: Commenters questioned the validity of RPS to establish RE targets. 

Response 63: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 
221 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's proposed approach of averaging a region's RPS goals to establish a 

target renewable energy level also is valid. Commenters stated individual states within a 

geographic region generally share similar levels of renewable energy technical potential, among 

other characteristics that may make grouping appropriate. Commenters also stated that the lack 

of a RPS program does not mean that a state has no or less renewable energy potential than its 

neighbors. 

Commenters stated that RPS is not a reasonable foundation for quantifying renewable generation 

potential because they are based at least partly on state policy choices, which naturally disqualify 

RPS from being a reasonably scientific basis upon which to quantify renewable energy potential. 

Commenters said state-specific politics plays a key role in whether states adopt renewable 

portfolio standards and the stringency of those standards and provided an example of Illinois. 

Commenters said in that state, political negotiations to fix the State's 2007 RPS have been 

dragging on for years without yielding a resolution, illustrating the peril in using standards that 

may be outdated and are subject to the prevailing political winds. 

Comment 64: Commenters expressed WECC region specific concerns. 

Response 64: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said that western states exhibit differing generation profiles with hydropower and 

natural gas generation comprising a significant amount of generation within the Pacific coast 

states, while the intermountain states have been more heavily dependent on coal-fired generation 

(although this generation serves other parts of the west as well). Commenters stated this 

translates to significant differentiation among states in terms of which compliance pathways are 

available to them and to what degree. Further, commenters said hydropower is subject to 

significant variation on an annual and seasonal basis due to changes in rainfall, snowpack, and 

other reasons, which can have a significant effect on baseline assumptions and, ultimately, 

compliance responsibility under the state goals. 

Commenters said that in the West region, multiple states (Idaho, Wyoming, Utah) have no RES 

requirements and one state, California, has the most aggressive RES requirements in the country. 

Commenters stated California's RES dramatically increases the regional RE goal and EPA made 

no effort to control for its aggressive RES requirement as an obvious outlier among state RES 

mandates in the West region. Commenters said California was able to set such an aggressive 

RES, in part, because other states in the region have not. Commenters asserted that much of the 

renewable generation built in the West is relied upon for compliance with California's RES, and 

may be unavailable to count toward compliance with the RE goals in the state in which the 

facility resides - further increasing the stringency of many of these western states' goals as 

proposed. Alternatively, commenters stated California may have trouble finding RE to import if 
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the other western states now need the generation to meet their own stringent in-state RE goals, 

making it more difficult for California to achieve its goal. 

Comment 65: Tribal and Territorial – Commenters expressed Navajo National RE investment 

cost concerns. 

Response 65: The application of building block 3 is premised on the availability of incremental 

RE at the interconnection level. Procurement of incremental RE need not result from direct 

ownership or project development, as described in section V of the preamble. 

The following is a summary of the specific public comment under this comment: 

Concerning tribal nations, commenters stated the Navajo Nation is working to develop RE 

projects on Navajo land, with the energy to be used by others. Commenters said Navajo Nation is 

highly dependent upon capital from others to finance these RE projects. However, as the Navajo 

Nation noted during its consultations with EPA, commenters said the Proposed Rule and 

Supplemental Proposed Rule have created some obstacles toward development of these projects, 

which EPA should rectify. Commenters said that, unlike wealthier states or territories, the 

Navajo Nation does not have the resources to pursue these projects without partnering with 

project developers. Commenters added that these RE projects are crucial for providing valuable 

employment opportunities for impoverished families on the Navajo Nation. 

Comment 66: Tribal and Territorial – Commenters asserted RE will become economic burden 

to Navajo Nation. 

Response 66: The application of building block 3 is premised on the availability of incremental 

RE at the interconnection level. Procurement of incremental RE need not result from direct 

ownership or project development, as described in section V of the preamble. 

The following is a summary of the specific public comment under this comment: 

Regarding tribal concerns, commenters said there would be no CO2 benefit in replacing one 

carbon-free source with another, so setting a renewables goal offers no real benefit in terms of 

CO2 reduction, but does place an unnecessary economic burden on the Navajo people. 

Commenters asserted that while it could be argued that future growth in Navajo Nation 

electricity demand could be met from RE sources, the historical trends for electricity demand on 

the Navajo Nation have been flat to shrinking, roughly a 0.5% per year annual reduction in 

demand. Therefore, commenters stated until the Navajo Nation can develop a more vibrant 

economy that actually increases electricity usage, applying goals for RE based upon future 

demand growth will be harmful to the already weak Navajo Nation economy. 

Commenters specifically opposed EPA's setting a goal of 0.37% of total generation that may 

grow to 1% of total generation. Commenters said that most of the electricity generated on the 

Navajo Nation is used off of the Navajo Nation and setting such a percentage, which would be 
223 

exclusively applied to the Navajo Nation, would be a very large portion of its electricity demand. 

Commenters stated that, unlike other states or territories that are primarily reliant on fossil 

energy for electricity, electricity used by the Navajo Nation comes mainly from carbon-free 

sources. Commenters said there would be no CO2 benefit in replacing one carbon-free source 

with another. Therefore, commenters stated that setting a renewables goal offers no real benefit 

in terms of CO2 reduction, but again places an unnecessary economic burden on the Navajo 

people. 

Comment 67: Tribal and territorial – Commenters expressed concern that BB3 does not apply to 

Navajo Nation. 

Response 67: The application of building block 3 is premised on the availability of incremental 

RE at the interconnection level. Procurement of incremental RE need not result from direct 

ownership or project development, as described in section V of the preamble. Building block 3 is 

applied to affected EGUs within an interconnection rather than jurisdictions. 

The following is a summary of the specific public comment under this comment: 

Regarding the Navajo nation, commenters said that because the electricity in the Navajo Nation 

is mainly hydro-electric, BB3 does not apply. Commenters said that applying the proposed 

methodology to the tribes would result in no additional emission reductions required for the 

Navajo Nation, and thus no change in its goal. 

Comment 68: Commenters had concerns regarding BB3 target assumptions and need for 

modification - support and opposition. 

Response 68: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters said the rule's targets are much lower than what is possible and the majority of 

states have mandatory/voluntary RE portfolio standards, many of which require more RE than 

EPA predicts. Commenters said many states have huge RE potential to meet their entire 

electricity needs and all should be required to greatly increase their reliance on clean RE such as 

wind and solar. Further, Commenters said those states that have been more ambitious should be 

forced to go further, and coal dependent states should be forced to make substantial shifts from 

coal to clean RE.Commenters supported use of RE as a compliance option but stated EPA's 

proposed and alternative approaches should be based on an updated and fair assessment of each 

state's RE potential. Commenters supported the approached offered by the Union of Concerned 

Scientists (UCS) in a recent report. In both approaches, the commenters stated EPA's 

assumptions regarding the amount of renewable generation that can be feasibly and at reasonable 
224 

cost added to the grid are overly conservative. Commenters stated the UCS report showed that 

EPA significantly underestimated the potential role of RE in setting state targets. Commenters 

stated several of the issues UCS identified are evident in EPA's treatment of renewables 

potential: EPA fails to account for both (1) the continued growth and falling costs of renewables 

projected by market experts and (2) the RE deployment rates that states are already achieving. 

Commenters stated that updating and revising several of the underlying assumptions will show 

that states such as Alabama and South Carolina can reach a higher RE target than EPA assumes 

at a reasonable cost. Commenters stated Georgia will have almost double the amount of RE that 

EPA assumes as a result of recent significant investments in solar and wind. Commenters stated 

that in a period of just four years, Georgia Power Company is poised to grow its solar portfolio 

from approximately 50 MW to over 900 MW, and its wind portfolio from zero to 250 MW. 

Commenters stated showing that EPA's assumed annual growth rate for Georgia of 13% is 

overly conservative. 

Comment 69: Commenters expressed concerns with the EPA’s RE projections. 

Response 69: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. Biomass is treated as a non-BSER measure in the final rule, please refer to 

section V.A.6 of the preamble for additional detail. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I and Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the state targets set by EPA are not feasible or adequately demonstrated. 

Commenters stated EPA made several errors in developing BB3: (1) EPA misconstrued state 

RPS; (2) EPA did not adequately consider the costs associated with renewable generation; (3) 

EPA treated biomass inconsistently; and (4) EPA ignored factors that hinder the development of 

RE. 

Commenters said EPA's projections for renewable expansion are beyond other projections, 

including some of EPA's own. Commenters stated EPA's assumed growth in non-hydro 

renewable capacity is out of line with other predictions and likely to be unattainable. 

Comment 70: Commenters stated there is a need to consider Rural and Small Electric Coops in 

goal setting. 

Response 70: The EPA addresses the availability of cost-effective RE to all affected sources in 

section V.E.6. 
225 

The following are summaries of the specific public comments under this comment: 

Commenters stated most small and/or rural coops, municipal utilities, and competitive electricity 

suppliers in Montana do not currently consume significant percentages of RE and do not operate 

or participate in programs to promote EE, with the exception of a few western Montana coops 

that purchase most or all their power from the Bonneville Power Administration. Commenters 

said these small electricity providers represent half of the retail sales of electricity annually in 

Montana and are not regulated by the state's PSC. Commenters said it will be more challenging 

to grow the procurement of RE/EE by small electricity providers along the same trajectory as 

larger utilities in urban states, or even the expected average size electric utility. Commenters said 

small electricity providers lack the existing institutional structures for the procurement of RE/EE. 

Commenters said EPA should revise its BB3 & 4 methodologies to account for the more limited 

resources of smaller electricity providers. 

Additionally, commenters noted that Montana's RPS, as is the case with many state RPS 

programs, does not apply to electric coops, municipal utilities, or small competitive electricity 

providers. As a result, commenters stated EPA's methodology for determining the growth in RE 

in the various regions of the country overestimates the potential growth in RE by ignoring the 

often significant percentages of total state retail sales that are not subject to state RPS programs 

or other requirements to procure specific percentages of retail sales from renewable resources. 

Commenters suggested EPA rerun its BB3 calculations to take into account the portion of state 

retail electricity sales that do not have to comply with a state's RPS requirements. 

Commenters said EPA should be aware that states such as New Mexico with a large rural 

population and many rural electric cooperatives often have secondary and even tertiary 

standards. Commenters stated these standards are necessarily lower than those for IOUs due to 

the demographics of the rural population as well as transmission constraints of rural areas. 

Commenters said focusing only on primary standards in setting a regional "average" RPS ignores 

the demographics and constraints unique to rural electric cooperatives. 

Commenters said public power utilities and cooperatives are not strangers to RE resources and as 

a percentage of total owned generation, public power utilities actually have a much higher 

percentage of RE capacity than do investor-owned utilities: 18.5% vs 7.82%. Thus, commenters 

said there is nothing inherent to the public power model that makes it more difficult to acquire or 

utilize RE resources. Commenters said smaller public power utilities are uniquely well placed to 

incorporate large levels of RE because it can be built in smaller increments and scaled up as 

demand from the utility grows, making it a preferable investment especially for small utilities, 

because it prevents them from having to commit too many resources to any individual power 

source. Commenters added that municipal utilities are also well-suited to RE projects, which are 

characterized by high up-front capital costs and low operation and maintenance costs. As public 

entities, commenters said, municipalities can access low-interest bond funding models to finance 

these projects at much lower rates than investor-owned, or other publicly held, utilities. 

Commenters said rural electric cooperatives, both distribution coops and generation & 

transmission, are also increasingly making RE part of their portfolios. Commenters stated that 

NRECA noted co-ops are making significant investments in RE generation, using loans from the 

Rural Utilities Service and other sources; with solar becoming more cost-competitive, solar 
226 

development is growing quickly also. In addition, commenters said co-ops purchase RE from 

large projects such as the 31 MW Cimarron Solar Facility in New Mexico and the 7.7 MW 

Azalea Solar Power Facility in Georgia, and nearly 40 cooperatives have or are planning 

community solar programs, recognizing that solar diversifies the fuel portfolio, and helps to 

build new community partnerships, a key cooperative value. Commenters added that NRECA 

has produced an interactive map detailing how hundreds of cooperatives are diversifying their 

portfolios using RE. 

Comment 71: Commenters noted inaccuracies in the EPA’s RPS RE calculations. 

Response 71: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters questioned how closely EPA looked at each state's RPS. For example, commenters 

stated that Nevada's RPS only applies to certain energy providers above a certain threshold, 

which is about 60% of generation in the state. Therefore, commenters stated, the actual statewide 

RE is only 13% compared to the 22% that EPA used for its calculations. Commenters asked 

if EPA has considered situations like this occurring with other states and the effect on 

development of the RE goals. 

Comment 72: Commenters expressed RPS methodology concerns. 

Response 72: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated in creating its methodology, EPA assumed it knew better than states without 

RPS or with below "average" RPS what the "best" resource portfolio in those states should be, 

based solely on what would reduce CO2 and without addressing any of the many factors states 

consider in setting renewable goals, including the cost of renewable resources and other options 

available in those states, the need for economic development for different business sectors, 

availability of other fuels in the state, availability of transmission in the state, the costs and 

benefits of achieving environmental, economic, and power supply goals through alternative 

means such as tax credits and investment incentives, economic conditions for electric consumers 

in the state, and more. Commenters stated that EPA ignores the details of all of the RPS it 

reviewed that reflect many of these considerations, such as reliability exemptions, cost caps, and 

inclusion of renewable resources not counted as "renewable" by EPA, such as hydro, stranded 

gas, and coal-bed methane. 
227 

Commenters also said that states lacking RPS were excluded improperly in setting the average, 

and that EPA did not credit any fossil fuel sources (e.g., coal bed methane in PA) in setting the 

targets. 

Commenters said a state's RE target should account for the amount of fossil fuel-fired generation 

in the state, and that failing to do so can create a RE target that is larger than the amount of the 

state's 2012 fossil fueled generation. Commenters said assuming additional RE "dilutes" the 

emissions rate from fossil fueled generators by adding emission free electricity to the grid, 

displacing power from fossil fueled sources, it makes sense not to set a target that exceeds a 

state's 2012 fossil generation. Doing so, commenters said, would mean that the excess RE is 

displacing other non-emitting generation sources, needlessly increasing the costs of lowering 

fossil emissions with no noticeable emission benefits and increasing compliance costs. 

Commenters said states with renewable portfolios tie them to power consumption rather than 

power generation, which appears to be a disconnect.

Commenters asserted EPA improperly based each state's effective 2020 RPS goal solely on that 

state's primary RPS. Commenters said EPA lacks a fundamental understanding of how state RPS 

programs work: these secondary and tertiary RPS programs do not impose additional 

requirements on top of primary RPS goals, but rather establish alternative, less stringent 

requirements for small cooperative and municipal utilities. By disregarding secondary RPS goals 

and applying primary RPS goals to the entire state's generation profile, commenters said EPA 

overestimates the applicable RPS requirements in those states. 

Commenters said this error has significant effects for states in Tri-State's service territory. 

Commenters stated EPA assumed that the 2020 effective RE levels for Colorado would reach 

30%, but the state's primary RPS goal applies only to IOUs. For cooperatives, commenters said 

the state's RPS requires that 20% of the energy provided to members at wholesale must be 

generated from RE in 2020. Likewise, commenters stated EPA assumed that New Mexico's 

statewide RPS goal is 20%, but again, that target applies to IOUs; rural cooperatives are required 

to have RE account for 10% of retail sales in 2020. Commenters stated ignoring these secondary 

RPS goals does not make EPA's BB3 targets more conservative. Commenters stated that it 

artificially inflates them, making the proposed state goals excessively stringent. 

Comment 73: Commenters stated targets should remain stable. 

Response 73: The concepts provided in this comment were valuable in finalizing the building 

block 3 methodology, particularly in the gradual introduction of building block 3 target 

generation over time. The final methodology is described in section V.E of the preamble and in 

the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment:

Commenters said targets should be stable, ramp up steadily over time, and not be subject to 

sudden or uncertain shifts. Commenters stated a predictable, stable market that decreases risk for 
228 

investors necessarily requires long-term credibility in RE policy, lowers the cost of capital for 

developers, produces cheaper power and reduces the need for public incentives over time. 

Comment 74: Commenters asserted further guidance is needed for RE. 

Response 74: As part of the final rule, the EPA has provided significant guidance for states and 

other jurisdictions seeking to pursue emission reduction opportunities through incremental RE in 

section VIII of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters said the proposed rule does not provide adequate guidance to states seeking to 

expand the role of RE or signal what RE policies could or should be included as part of a SIP. 

Commenters stated the rule should provide states a menu of policy options demonstrated to 

increase RE deployment. 

Commenters said significant uncertainties exist regarding the design, implementation, and 

demonstration of compliance strategies to achieve the BB3 goals. Commenters stated this 

includes uncertainty regarding who has the regulatory authority to require the development and 

operation of specified amounts of renewable resources and nuclear power, how such 

requirements are designed in context with RTO and state-dispatch regulations, how compliance 

is to be demonstrated, and where the compliance obligation resides. 

Comment 75: Commenters opposed use of minimum level of RE in Navajo Nation. 

Response 75: In the final rule there is no minimum level of RE assigned to jurisdictions or 

affected EGUs. The application of building block 3 is premised on the availability of 

incremental RE at the interconnection level. Procurement of incremental RE need not result 

from direct ownership or project development, as described in section V of the preamble. 

The following is a summary of the specific public comment under this comment. 

Commenters agreed with EPA's methodology for applying BB3 to Indian country because it is 

consistent with the proposed methodology from the June 18, 2014 CAA section 111(d) proposal. 

However, commenters did not support the use of a minimum level of RE, such as EPA's 

assignment of 0.37% of the total 2012 generation for each area of Indian country - an amount 

equal to the lowest RE generation among the 50 states in 2012 - to establish a baseline RE 

generation rate in 2012 for the Navajo Nation. Commenters said the Navajo Nation noted during 

consultation with EPA that application of BB3 is not appropriate, because the tribe's use of 

electricity is negligible compared to the generation output of the power plants and commenters 

supported the Navajo Nation on this issue. Thus, the commenters said that, as EPA notes in the 

Supplemental Proposal, applying an amount equal to 0.37% of total generation to each area of 

Indian country as an RE goal results in RE generation being the primary source of electricity 

used on tribal lands. Commenters said this translates to 15% of load, surely an over-aggressive 
229 

goal for the Navajo Nation. In fact, commenters asserted, this goal is higher than more than half 

of the states' goals under EPA's CPP. Commenters supported the sensible use of RE generation 

to offset higher carbon-emitting sources of generation; however, believed, as EPA proposed, 

application of BB3 on the Navajo Nation should result in an RE amount of zero. 

Comment 76: Commenters noted inaccuracy in Delaware RPS. 

Response 76: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters said there is a minor error in how Delaware's RPS reflected in BB3 for 2020 - the 

correct value should be 20% versus the incorrectly stated value of 19% in the EPA proposal. 

Comment 77: Commenters had concerns regarding treatment of low or zero emission facilities. 

Response 77: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; consequently, building block 3 is premised only on generation 

that is incremental from the BSER data year of 2012. The final building block 3 methodology is 

described in detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters said should the goals be revised to assume that all low- or zero-emitting facilities 

are considered as similar to NGCC units, EPA needs to complete further evaluation on the 

realistic availability of these units. Commenters stated the sun doesn't always shine for solar 

panels and the wind doesn't always blow during the periods required to generate electricity when 

it is most needed, and that if these resources are unavailable and NGCCs are operating almost to 

capacity, it is unclear if other forms of electricity-producing units would be available to fill in as

a backstop without violating a state plan and exceeding the state goals. 

Commenters said EPA arbitrarily excludes certain forms of zero-carbon or low-carbon energy 

from emission rate goal achievement. Given that EPA recognizes other existing forms of clean 

power such as wind and solar, the selective application of excluding hydropower and nuclear 

produces arbitrary and unfair results. For example, commenters said four states in the North 

Central region - Iowa, Minnesota, North Dakota, and South Dakota - would not need to grow 

their renewables at all because they could include their existing wind power resources in the 

computation of their final emission rate. Because the majority of existing nuclear and 

hydropower would not be counted in a state's final calculation, the commenters asserted this 

effectively encourages generation from new natural gas plants to be substituted for generation 

from existing nuclear power or hydropower plants. Commenters stated that, in the real world, 
230 

such substitutions would increase, rather than decrease, carbon emissions. However, commenters 

asserted that EPA's decision to leave out existing nuclear and hydropower, such substitutions-or 

even the closure of all existing nuclear and hydropower plants-would have either no effect on the 

EPA-calculated carbon emission rate or could conceivably reduce it. If EPA's intent is to lower 

carbon intensity by reducing GHG emissions from existing fossil fuel-fired EGUs, then the 

commenters stated EPA must create a greater incentive for all zero-carbon and lower-carbon 

energy sources without arbitrarily excluding any of these sources. Commenters added EPA must 

not provide a contradictory incentive to increase carbon emissions in order to achieve a final 

calculated goal. 

Comment 78: Commenters asserted the EPA should remove "at risk" nuclear from BSER and 

goal calculations. 

Response 78: Existing nuclear has been removed from the BSER. The resources and data 

provided in this comment were valuable in finalizing the building block 3 methodology, which is 

described in section V.E.6 of the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters asserted the "at risk" nuclear component of BB3 should be removed as BSER and 

from EPA's calculations. Commenters asserted the proposed "at-risk" nuclear provision penalizes 

states with existing nuclear capacity by assigning them more stringent goals, creating a 

disadvantage for states with nuclear generation. For example, commenters said that if Point 

Beach Nuclear Plant retires when its licenses expire in 2030 and 2033, this zero carbon 

generation will likely be replaced with non-zero carbon generation, thus creating an additional 

compliance obligation for Wisconsin. If the at-risk nuclear provision is retained, commenters 

asserted EPA should allow states' goals to be adjusted upon expiration of nuclear plant operating 

licenses. Commenters added that rather than penalizing states in which nuclear plants shut down, 

the rule should provide an incentive for nuclear units to continue to operate, and, if possible, to 

increase their output or capacity factor. Commenters stated excluding existing nuclear from the 

goal-setting calculation, but allowing states to take credit for a portion of their nuclear generation

for compliance purposes, would provide such an incentive. In addition, commenters said EPA 

should recognize early action taken to increase nuclear plant output, such as extended power 

uprates. 

Comment 79: Commenters stated the EPA should recognize wind energy resources and impact 

on energy market. 

Response 79: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 
231 

Commenters said wind is recognized by MISO as an intermittent resource, with unique rules in 

place to accommodate its intermittency and the new transmission required to bring more wind 

energy from its source in the west to the concentrated population centers that use the energy in 

the east. Yet wind energy, as an intermittent resource, the commenters added, is most available 

when energy is least needed. In MISO's recent study of the impact of the GHG Rule, 

commenters said it found through modeling that RE could not be expected to replace the fossilfuel retirements already planned due to MATS, nor those expected to retire due to the GHG 

Rule. Commenters said the MISO study supports that EPA's assumptions regarding increase in 

RE are unrealistic, and threaten both grid reliability and an affordable energy supply for this 

country. 

Commenters stated that in the GHG Abatement Measures TSD, EPA makes the point regarding 

the ample availability and affordability of new RE generation and the fact that this would not 

increase power prices. Commenters stated that this highlights a problem with RE studies that fail 

to take into account the negative impacts on the wider power market. Commenters said that 

during nighttime hours, when wind turbines typically produce power, RE has been cited as a 

source of negative wholesale power prices in parts of the United States with large amounts of 

wind energy. Commenters continued by saying wind operators, harvesting the value of the 

Production Tax Credit, bid into the market at a negative price in an effort to secure dispatch. 

Commenters said this bidding behavior drives prices down, which severely impacts deregulated 

nuclear units, which cannot back down generation and so must effectively pay wind operators to 

not run. Commenters said this destruction of value in deregulated nuclear units is causing them 

to retire before the end of their license, causing a significant increase in system-wide CO2 

emissions. Commenters stated the cost and effectiveness of RE at large deployment levels in 

terms of reducing CO2 is not well understood and should not be seen as an easy means to lower 

CO2. 

Comment 80: Commenters stated that thermal energy is eligible for compliance with NC REPS. 

Response 80: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that thermal energy is not included in EPA's definition of RE generation on 

which it bases its calculation in BB3, though it can be used by an electric power supplier to 

comply with North Carolina's REPS requirements. Commenters added that the statutes impose 

no limit on the amount that can be used for compliance. Theoretically, commenters said an 

electric power supplier could satisfy its entire requirement by purchasing or generating thermal 

energy (with the exception of a small set-aside for electricity from swine waste). 
232 

Comment 81: Commenters said customer-side RE and demand side management should be 

excluded. 

Response 81: In the final rule, distributed generation technologies and energy efficiency 

measures are non-BSER compliance measures available to affected sources. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that customer-side RE and demand side management should be excluded 

from CAA enforceable programs and state goals should be modified to reflect this exclusion. 

Commenters said that Colorado Springs Utilities pioneered Community Solar Gardens and offers 

rebates for investment in customer-side RE and conservation. Commenters asserted this shared 

accountability builds our community and fulfills the purposes of the proposed rule, but is totally 

inappropriate for CAA enforceability purposes. Commenters stated the owners of existing 

sources should not be responsible for compliance that relies on customers and independent 

contractors. Commenters said the state commitment approach can be a useful tool to address this 

problem. Commenters said states should have the flexibility to set aside a portion of the goal for 

state-only enforcement, whose programs may be administered by agencies other than the 

environmental agency including, for example, the utilities commission, the energy agencies or 

building commissions. 

Comment 82: Commenters were concerned about the EPA's feasibility analysis for annual RE 

growth rates for each region. 

Response 82: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters were concerned that EPA did not include targets that were capacitybased. Commenters questioned why only NC was used for the Southeastern states based on their 

legislatively adopted requirements and why the other states in the region averaged in as "zeros". 

Commenters stated the North Carolina RPS includes a number of modifying features that would 

not be part of the renewable requirement for the southeastern states in the proposed rule; for 

example: cost caps for retail, commercial and industrial customers. Commenters also said NC 

REPS directs the state PUC to develop a procedure for modifying or delaying provisions if the 

Commission determines that it is in the public interest to do so but the proposed rule does not. 

Comment 83: Commenters asked that the EPA clarify the target percentages to be percent of a 

state's generating capacity. 
233 

Response 83: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following is a summary of the specific public comment under this comment: 

Commenters stated the proposed rule is unclear as to the measurement of RE used to calculate 

the BB3 portion of the final goal, and should clarify that the targets are expressed as a percent of 

a state's generating capacity. Commenters stated that first, the EPA references the RE capacity in 

a state; however, the EPA then states that the 10% figure applies to total annual generation. 

Commenters stated that given the difference in capacity factor for renewables, which are 

accepted to have a capacity factor significantly lower than the fossil-fuel fired generation they 

will replace, versus the total annual generation in MWh, the EPA should clarify that the 10% 

level equals 10% of a state's generating capacity. Commenters stated therefore, using 2012 

benchmark figures for determining the BB3 portion of the Final Goal, RE would account for 

5,745 MW of generating capacity. Commenters stated that in 2012, Florida had 1,400 MW of RE 

generating capacity, so Florida would need a 4,345 MW increase of renewable generating 

capacity to reach the figures the EPA used to calculate the CO2 emission reductions in Block 3. 

Comment 84: Commenters encouraged the EPA to account for offshore wind potential and 

distributed technologies in calculating state targets. 

Response 84: Distributed technologies, as a demand-side resource, present unique data and 

technical challenges (such as the role of evaluation, measurement and verification (EM&V) 

procedures in verifying their production, the diverse economic incentives of different parties 

involved in their deployment, and the variety of grid integration policies and conditions across 

potential deployment sites) that complicate identifying a technically feasible and cost-effective 

level of generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). 

Additionally, any RE technology that has not been deployed in the United States, including 

demonstrated RE technologies for which there is clear evidence of technical feasibility and costeffectiveness (e.g., offshore wind), contributes no generation to building block 3 under the final 

methodology that is based on historical capacity deployment. These RE technologies are 

consequently reserved for compliance, which offers affected EGUs additional flexibility and will 

reduce their need to rely on other emission reduction measures or building blocks. 

Refer to section V.E of the preamble for additional information. 

The following is a summary of the specific public comment under this comment: 

Commenters encouraged the EPA to include and account for both offshore wind potential and 

distributed technologies in calculating state targets for building block 3. Commenters said there 

is immense generation potential from these sources, as distributed solar is rapidly growing, and 
234 

offshore wind developments are in the works and set to come on line within the next year. 

Commenters stated these are both "adequately demonstrated," particularly distributed solar, 

which is at use in the market and growing astronomically in certain areas. Commenters further 

stated that the costs and non-air quality health and environment impact and energy requirements 

make these technologies reasonable and clearly affordable, and, thus, they should be included in 

the BSER and used to calculate carbon reduction rates under the CPP. 

Commenters stated agreement with EPA's approach for determining the BSER. Commenters said 

renewable energy measures, and solar measures especially, are necessarily part of the BSER; 

however, building block 3 (renewable energy measures) as it is currently calculated is 

incomplete because it does not contain current solar market data and it does not include 

distributed solar. Commenters said EPA's proposal does not accurately reflect the emissions 

reductions achievable through application of the BSER. Commenters said EPA must include all 

forms of solar, including distributed solar, in its final determination of the BSER. Commenters 

said distralibuted solar, utility solar and CSP are all a system of emissions reduction that is 

technicly feasible, is implemented at reasonable cost, is driving solar innovation, and does not 

negatively impact the electric system. Commenters said these forms of solar energy are 

adequately demonstrated to reduce emissions from covered sources. Commenters said EPA must 

include solar as part of building block 3 in its determination of the best system of emissions 

reduction. 

Commenters stated EPA can improve the proposed third building block to more accurately 

reflect what American clean energy is in reality already achieving and how much it can cost 

effectively grow. Commenters said the levels of renewable energy's availability and quantity 

assumed by the EPA are far too low, based as they are on a metric that doesn't accurately reflect 

reality. Commenters said rather than basing block three on arbitrary and unambitious state RPS 

mandates as proposed, block three should instead be based on proven resource availability. 

Commenters said on a state and a regional basis, according to the proposal of alternative 

approach. Commenters said EPA should also include the full potential of distributed solar and 

off-shore wind in its analysis of what is possible and cost effective. 

Commenters stated in addition to fuel switching to natural gas, significant additional zeroemitting sources of energy will be required. Commenters said the equivalent of 5,000 to 20,000 

MW of new zero emitting capacity will need to be added, depending on the resource chosen. 

Commenters said this is a substantial increase, especially when compared to Florida's current 

total capacity of 55,000 MW. Commenters said if solar energy is used, for example, it will 

require adding new solar capacity resources equal to about 20,000 MW, which is 37 percent of 

current statewide capacity from all sources. Commenters said adding new nuclear capacity 

would require about 5,000 MW, and biomass approximately 5,600 MW. 

Commenters stated EPA should make significant improvements in how it calculates the 

renewable energy building block. Commenters said significantly increasing the role that 

renewable energy plays in the rule is also supported by CAA Section 111, which the draft rule 

notes is designed to "promote the development and implementation of technology, including the 

diffusion of existing technology as the BSER." 
235 

Comment 85: Commenters asserted the EPA has underestimated the amount of RE states can 

cost-effectively employ in meeting requirements. 

Response 85: The information provided in this comment were valuable in finalizing the building 

block 3 methodology, particularly in the reevaluation of onshore wind and utility-scale solar cost 

and performance assumptions. 

The following is a summary of the specific public comment under this comment: 

Commenters stated that the EPA also appropriately considered potential emissions reductions 

that could be achieved by utilizing renewable energy. Commenters stated that EPA has 

significantly underestimated the amount of renewable energy states can cost-effectively employ 

in meeting emissions reduction requirements. Commenters noted that EPA described two 

potential frameworks for analyzing the potential for reduction of carbon emissions through the 

use of renewable energy. Commenters stated that one involves the use of regional averages of 

renewable energy policies, and the other involves a technical-economic potential analysis. 

Commenters stated that both frameworks significantly underestimate the emission reductions 

achievable through renewable sources because they fail to reflect the significant reductions in the 

cost of renewables that have occurred in recent years. Commenters stated that urged EPA to use 

the most current data in evaluating the quantity of renewable energy that can be cost-effectively 

employed in each state. Commenters stated that this is particularly important given that 

renewable energy is emissions free. 

Comment 23: Commenters expressed concern that meeting renewable energy goals by an 

individual state, only perhaps or to a large extent through outside activities, for example through 

interstate trading of renewable energy certificates (herein "RECs"), could hurt DW inadvertently, 

and impede EPA's broad mandate to protect the environment. 

Response 23: Distributed technologies, as a demand-side resource, present unique data and 

technical challenges (such as the role of evaluation, measurement and verification (EM&V) 

procedures in verifying their production, the diverse economic incentives of different parties 

involved in their deployment, and the variety of grid integration policies and conditions across 

potential deployment sites) that complicate identifying a technically feasible and cost-effective 

level of generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). Further, 

the EPA believes the final rule would not be strengthened by restricting the significant 

compliance flexibility afforded to affected EGUs to achieve the BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters believed that some states may choose larger projects only, or fossil fuels, etc., with 

little if any regard to the environmental and social impacts of "mega-projects" or to the important 

role of DG and DW at the local level. Commenters recommended EPA consider a minimum 

threshold of renewable energy generation, and a DG sub-requirement per State. In other words, 

commenters explained, a reasonable floor ought to be set for each State to use its own resources 
236 

(wind, solar and biomass included) to generate its own renewable energy to help build the 

nascent renewable energy industry, especially to give DG technology a footing when the "cards 

are stacked" against it absent forward-thinking, and careful policies at the Federal, State and 

local levels. Commenters believed a State would then have to find that energy using resources 

available and have to apply to EPA for a waiver from its minimum (or de minimis) threshold instate generation requirement to go out of State. Commenters believed burgeoning technologies 

such as DW are at a competitive disadvantage to a variety of other resources, and in particular 

fossil fuels, given historical and present day inequities in the marketplace, as well as the public 

policy realm. Commenters believed EPA must be careful that this entire rule, when final, doesn't 

inadvertently dis-incent DG and DW in particular, even as it is working to earnestly promote 

renewable energy generation writ large concurs with EPA's suggested floor for a renewable 

energy generation baseline, using 2012 figures. Commenters stated there is a clear public policy 

imperative to generate increased levels of renewable energy, consistent with the Administration's 

Climate Action Plan, and broader policies in place both at the Federal and State levels, and a 

state's reported 2012 fossil fuel generation should not be treated as a ceiling for its renewable 

energy generation target as the relative economics of many technologies are changing rapidly.

Comment X: Commenters cited a case in point is the CPP's renewable energy goal computation 

for Virginia where the CPP assumes Virginia can obtain 16% of its generation from renewable 

sources by 2030. 

Response X: The EPA has revised its block three quantification based on comment. See Section 

V.A. and V.C. of the final rule preamble for more information. 

The following are summaries of the specific public comments under this comment: 

Commenters believed EPA gets that figure by averaging the future RPS requirements of six other 

jurisdictions in the "East Central" region: District of Columbia, Delaware, Maryland, New 

Jersey, Ohio, and Pennsylvania but Virginia, by deliberate policy choice, does not have an RPS 

program, and what those other jurisdictions aspire to do provides no knowledge of what is 

achievable in Virginia. In effect, commenters believed, EPA gives those jurisdictions authority to 

determine Virginia's electricity policies but commenters stated that no state may lawfully dictate 

policy to another, and "To foist in-state decisions upon other States, and to do so while ignoring 

the contrary decisions of other States, is arbitrary, capricious, and unlawful," the VSCC staff 

observes. Commenters continued, stating that f Virginia's renewable energy goal were based on 

local knowledge, it would be nowhere close to 16%, and regardless of aspirations expressed in 

other states' RPS programs, as of 2012, renewable generation in the East Central region ranged 

from only 1% to 3%, with Virginia at 3% for that year. Commenters quoted "This is the level of 

renewable generation that has been adequately demonstrated in Virginia." Commenters added 

that even assuming those six states can achieve their RPS targets, taking a simple average of 

those targets is an inappropriate way to determine what is achievable in Virginia. Commenters 

argued that the CPP's methodology ignores the fact that it is cheaper to obtain a given percentage 

of renewable electricity in jurisdictions with relatively little generation (D.C., Delaware, 

Maryland, New Jersey) than in states with much larger base loads (Pennsylvania, Ohio, Virginia, 

West Virginia), and "There is no rational basis - legally or mathematically - for giving such 

undue and unintended influence to certain legislatures at the expense of others, including 
237 

Virginia." Commenters observed that although Virginia has no RPS program, the State's 

Building Block 3 goal is at the top end for states in the region, quoting "Thus, even though EPA 

relies on the legislative determinations of States with renewable requirements to determine what 

is achievable across a region, the final result of EPA's calculation is that States with such 

requirements are actually expected to achieve less than Virginia, which has no renewable 

requirement." 

Comment 11: Commenters argued that the EPA's process for determining renewable energy 

(RE) "best practice" targets is arbitrary because it did not conform with section 111 requirements 

to consider feasibility and cost factors in setting the target. 

Response 11: The EPA has revised its block three quantification based on comment. See 

Section V.A. and V.C. of the final rule preamble for more information. 

The following are summaries of the specific public comments under this comment: 

The commenters noted that the EPA set each region's proposed target by averaging the 2020 

renewable portfolio standard (RPS) requirements from states within each region that have 

adopted RPS requirements. The commenters noted that in the Southeast, the only state with an 

RPS is North Carolina. Therefore, commenters stated, for the Southeast Region, the EPA has 

effectively assumed that one state's particular political decision to adopt an RPS represents a 

meaningful estimate of the "feasibility and cost of the best practices scenario" for all other states 

in the region. 

Commenters argued that the EPA has not demonstrated that any such consideration by North 

Carolina's state government was representative of the consideration of what level of RE 

generation might be achievable or cost effective for the seven other states in the Southeast 

region. The commenters argued that the EPA did not inquire whether those other state 

legislatures considered the statutory factors from section 111 on which EPA and states must base 

their designation of BSER, and reached a different conclusion from North Carolina about the 

feasibility and cost of an RPS or RE. The commenters argued that this conclusion is bolstered by 

the fact that EPA's alternative approach projects that North Carolina can only realistically 

produce 2 percent of its in-state generation from RE by 2030. 

The commenters argued that EPA's RPS approach essentially cherry-picked among states in 

setting the regional RPS targets and ignored information from other states in the region. 

Specifically, commenters stated, the EPA's approach ignored the fact that state legislatures in 

other Southeast states have considered and rejected any level of RPS commitment for their 

states. In so doing, the commenters argued that the EPA's approach had selected a single political 

decision in North Carolina with which the agency agrees while ignoring the political judgment of 

the other seven states in the Southeast Region. The commenters argued that the EPA has not 

explained why it did not consider the decisions of all the states in the region. The commenters 

estimated that if the EPA were to factor in the politically-determined RPS levels from all states 

in the Southeast Region (not just North Carolina) the new regional average target for 2030 would 

be 1.25 percent of each state's in-state generation (i.e., 10 percent averaged over eight states in 
238 

the region). The commenters argued that EPA's failure to explain its cherry-picking of state 

policies made the proposal unreasonable, arbitrary, and capricious. 

Comment 20: The following commenters suggest an alternative approach for the Building Block 

3 proposal. 

Response 20: The EPA appreciates the UCS approach and is using a final methodology that 

relies on the most recent five years of RE capacity deployment data (2010-2014) to set building 

block 3 generation levels. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the UCS developed an alternative method to determine the best system of 

emissions reduction for building block 3. Commenters said its approach sets a national 

benchmark for the renewable energy growth rate based on demonstrated state growth between 

2009 and 2013, assuming states will meet the requirements of any state-level renewable energy 

standards in place. Commenters said under the UCS approach, the amount of U.S. electricity 

generated from renewable energy sources in 2020 would reach 14 percent of electricity sales in 

2020, twice the level achieved by the Clean Power Plan. Commenters said by 2030, renewable 

energy would comprise a 23 percent share of electricity sales under the UCS approach, compared 

with only 12 percent under the Clean Power Plan. Commenters said the UCS analysis found that 

this more ambitious commitment to renewable energy could reduce carbon pollution by 40 

percent below 2005 levels, compared with the 30 percent reduction envisioned by the Clean 

Power Plan. Commenters said this assumes that the new renewable energy generation displaces 

mostly natural gas-fired generation. 

Comment 17: Commenters stated that in Building Block 3, EPA includes expanded "zeroemission" renewable energy generation, and to do so, EPA applies a regional approach which 

averages existing State RPS targets in a given region and then applies that average target to each 

State in that region, based on the assumption that renewable energy opportunities are uniform 

within a region. 

The following are summaries of the specific public comments under this comment: 

Response 17: The final methodology for quantifying building block 3 generation levels does not 

rely on state RPS requirements. The final methodology is described in section V.E. of the 

preamble. 

Commenters said EPA also applies a growth factor that is based on the State's current renewable 

energy generation to ramp up renewable energy generation until the target generation level is 

achieved, and central to EPA's analysis is the assumption that State RPS targets are an accurate 

reflection of the renewable energy potential for the State and, by extension, for each State in the 

region. Commenters posited that EPA does not adequately consider the seven following factors 
239 

that call this assumption into question: Factor 1) EPA's broad-based regional approach fails to 

account for differences in renewable energy potential among States. Commenters said the fact 

that two States are in relative geographic proximity does not mean that they have the same 

potential to produce renewable energy. Commenters said some forms of renewable energy, such 

as wind, vary dramatically by location even within a State. Thus, commenters said the potential 

for wind energy in a given State says very little about the potential for wind energy in other 

States in the same general part of the country. Commenters said, for example, West Virginia has 

been grouped with coastal States such as Maryland and Virginia with the potential to generate 

substantial amounts of electricity through off-shore wind power. Commenters said the fact that 

Maryland and Virginia can generate substantial off-shore wind power provides no basis for 

concluding that a land-locked State like West Virginia can achieve comparable levels of windgenerated power. Commenters said, for other renewable energy sources, such as biomass, 

opportunities vary significantly between States that EPA has placed in the same region. 

Commenters said, for example, Minnesota, a heavily forested State with significant potential to 

produce energy from woody biomass, is placed in the same region with North Dakota, a State 

with few forest resources. Commenters said it is arbitrary and capricious to establish aggregate 

regional renewable energy targets without addressing key differences in renewable energy 

potential among the States in each region. Commenters stated that the problems with EPA's 

regional approach are exacerbated by the small number of State RPS goals that EPA uses to 

establish some regional targets. Commenters stated, in some cases, EPA relies on a single State's 

RPS goal to set a regional renewable energy target. Commenters said, for example, Kansas is the 

only State on which EPA relies in setting a renewables target of 20% in the 6-State South Central 

region. Commenters said, likewise, North Carolina is the only State on which EPA relies in 

setting a renewables target of 10% for the 8-State Southeast region. Commenters stated, while 

the reasoned judgment of a majority of States in a given region may have some relevance in 

projecting a region's renewable energy potential, it is arbitrary and capricious to ignore the views 

of the majority of the States in favor of a single State. Commenters said, under any statistical 

assessment, a single data point is too small a sample size on which to make such a significant 

decision. Further, commenters stated that in order to justify the imposition of regional renewable 

energy targets, EPA must rely on something more than mere physical proximity. While, in some 

circumstances, commenters said two neighboring States may share some common potential for 

renewable energy generation, those similarities largely disappear at the level of aggregation 

proposed by EPA. Commenters stated that EPA's brief two page summary of its regional 

approach in a technical support document is far from sufficient to demonstrate the 

reasonableness of this regional approach. Moreover, commenters noted that EPA offers no 

reason to suggest that the NERC and RTO regions that EPA relies on to group States into regions 

for assigning Building Block 3 goals have any relevance for assessing renewable energy 

potential. Commenters suggested that EPA must demonstrate that any regional division it selects 

for Building Block 3 has a nexus to renewable energy potential. Commenters asserted that it is 

arbitrary and capricious for EPA to propose a regional grouping for State renewable energy 

potential based on the current rulemaking record. Factor 2) Commenters said EPA's assumption 

that a State's RPS target accurately reflects renewable energy potential within that State is 

misguided. Commenters said state RPS targets may be aspirational and not necessarily supported 

by an analysis of renewable energy potential within the State. Commenters said, for instance, 

States sometimes incorporate safeguards into RPS targets in the event that they cannot be 

achieved. Commenters said, in some cases, States may include safety valves that suspend or 
240 

scale back the RPS programs if cost thresholds are exceeded. Commenters said, in other cases, 

States create incentives for certain types of renewable energy by offering additional credits for 

preferred energy sources, meaning that the credits produced for compliance with the RPS will 

exceed the actual level of generation. Finally, commenters stated that States may exclude certain 

classes of power generators, such as municipally-owned power plants or cooperatives, from the 

RPS obligations, meaning that the States' actual percentage of renewable energy generation on a 

State-wide level will be less than the amount required by the RPS target. (Kavulla Testimony at 

11 (noting that Montana RPS does not apply to consumer-owned utilities, public power projects, 

or generators owned by out-of-State utilities).) Commenters stated that it is arbitrary and 

capricious for EPA to ignore these issues when relying on State RPS targets under Building 

Block 3. Factor 3) Commenters stated that EPA's renewable targets does not fully consider the 

intermittent nature of many renewable energy sources, such as wind and solar. Commenters said, 

in some cases, challenges associated with such intermittent generation could make EPA's 

renewable energy targets infeasible. In Texas, for example, wind energy is both intermittent and 

inversely related to demand. Commenters said, for example, wind speeds are typically highest in 

the early morning, when demand for electricity is at its lowest. Commenters said, likewise, wind 

generating capacity in some States, such as Texas, is greatest during the fall and spring months. 

(Written Testimony of Kenneth W. Anderson Jr., Texas Public Utility Commissioner, House 

Energy and Commerce Committee, "State Perspectives: Questions Concerning EPA's Clean 

Power Plan" 7 (Sept. 9, 2014)) Commenters said, in fact, if Texas were to meet EPA's proposed 

20% renewable energy goal, renewable energy could, in some circumstances, exceed demand. 

(Id.) Commenters noted that such an occurrence could have significant repercussions that have 

not been evaluated by EPA. Commenters said, for example, a Texas Public Utility Commissioner 

has testified that during periods of high renewable generation, Texas could not simultaneously 

dispatch both nuclear and renewable facilities as EPA assumes in its BSER analysis. (Id.) 

Further, commenters stated that given the long cycling time for nuclear EGUs, they cannot be 

utilized as reserve capacity to respond to short-term variations in renewable generation. (Id at 7-

9) Commenters said the potential of having to choose between nuclear and renewable generation 

will jeopardize the ability of Texas and other States to achieve the emission reduction targets set 

by EPA. Rather than simply assuming that its BSER analysis can be achieved based on annual 

generation data, commenters suggested that EPA must carefully consider the shorter term, 

seasonal changes in energy demand and usage that could prevent a State from consistently 

meeting the electricity generation assumptions used by EPA. Commenters said not conducting 

sufficient seasonal modeling also renders EPA's BSER analysis arbitrary and capricious. Factor 

4) Commenters noted that EPA's reliance on State RPS targets does not address the fact that 

many State RPS programs allow out-of-State renewable energy generation to satisfy the State's 

RPS goal. Commenters said, for example, a Minnesota utility may be able to satisfy its RPS 

obligation through construction of a wind farm in North Dakota. Commenters said, to the extent 

that a State permits such out-of-State compliance, its RPS standard may not be a good indicator 

of the State's assessment of renewable energy potential within the State. Commenters stated 

further complicating matters is the fact that neighboring States with the potential to export 

renewable energy under RPS programs may elect to enact more modest RPS programs, or forego 

them entirely, because it is more profitable for their utilities to sell renewable energy credits to 

other States. Thus, in regions where such interstate transfers are common, commenters stated that 

it would be arbitrary and capricious to assume that all States can achieve the RPS targets of the 

most aggressive States. Factor 5) Commenters asserted that it is arbitrary and capricious for EPA 
241 

to focus on renewable energy consumption represented by State RPS goals to define State 

obligations for renewable energy generation. Commenters stated, under EPA's approach, for 

example, smaller States with little electricity generation can dramatically skew regional 

renewable energy targets by mandating the consumption of a large percentage of renewable 

energy imported from neighboring States. Commenters said, for example, Washington D.C. has 

no commercial energy generating capacity, but nevertheless has set an effective RPS target of 

20%. Commenters said including this RPS target on an equal footing with others in the East 

Central region produces a significant increase in the region's renewable energy generation target, 

despite the fact that it is not backed up by any renewable energy potential at all. Commenters 

stated that it is arbitrary and capricious for EPA to treat each State equally when setting 

renewable energy generation targets, without taking into account the specific circumstances 

impacting each State. Commenters said EPA does not consider a generation-weighted approach 

that gives greater weight to State RPS targets selected by the States that will bear the brunt of 

any renewable energy mandate adopted by EPA. Factor 6) Commenters stated that EPA's growth 

projections for renewable energy does not fully account for the cost and implementation 

challenges faced by large-scale renewable energy projects. Commenters said, particularly for 

States with large generating capacities, annual growth factors in the double digits may prove 

difficult to sustain. Commenters said, for example, in Texas "a State with a 20% growth factor" 

EPA projects that renewable energy capacity can increase by 5 million MWh per year during the 

interim compliance period. Commenters said past examples of large-scale renewable energy 

programs suggest that this assumption is inadequately justified. Commenters said, for example, 

in 2008, the Texas PUC assigned nearly $5 billion to construct the lines needed to transmit 

approximately 18,000 MW of wind power from west Texas and the Texas Panhandle to 

population centers. Commenters stated that this massive infrastructure project, which took more 

than six years to complete after authorization from the PUC, demonstrates both the time and 

resources needed to construct renewable energy capacity and ensure it can be delivered to 

customers. Commenters suggested that EPA must more fully consider these implementation 

challenges and how they may affect its projected growth assumptions. Factor 7) Commenters 

stated that EPA's calculations are arbitrary because they effectively disregard State findings that 

no significant RPS target could be set. Commenters stated, specifically, while EPA purported to 

take as determinative States' assessments of their own potential for renewable energy, 79 Fed. 

Reg. at 34,866, it in fact only took as determinative the findings by States that have adopted a 

specific RPS target. In contrast, commenters said EPA disregarded the conclusions of any State 

that considered adoption of an RPS standard, but ultimately decided that binding renewable 

energy targets were not feasible. Commenters said including States that adopted a voluntary RPS 

that is effectively a 0% RPS would dramatically alter the regional renewable energy targets 

calculated by EPA in its BSER analysis. Thus, commenters said, for example, even though West 

Virginia determined that a mandatory RPS standard was not feasible for the State, EPA 

nonetheless disregarded that finding without any explanation, and instead assumed that West 

Virginia could achieve a 16% RPS. Commenters said incorporating West Virginia's decision not 

to adopt a mandatory RPS would have reduced the entire region's target from 16% to 14%. 
242 

3.3.4 Start year for state efforts 

This section discusses when and how implementation of RE measures should begin to be 

credited toward a state’s compliance with its CPP goal. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: The EPA should incentivize early utility investments in RE and EE programs, 

emission reduction programs and carbon reducing projects as measures towards state compliance 

Response 1: Qualifying RE generation, inclusive of BSER and non-BSER technologies, 

deployed after 2012 may be fully recognized in state plans for all performance occurring during 

a compliance period. The performance of incremental RE starting in 2020 may be creditable to 

encourage early action. Refer to section VIII of the preamble for additional information on 

general eligibility requirements for resources used to adjust a CO2 emission rate. The final 

building block 3 methodology is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Several commenters stated that the EPA should incentivize early utility investments in renewable 

and energy efficiency programs, emission reduction programs, and carbon reducing projects for 

the period between the baseline (2012) and the start of the interim period (2020) by recognizing 

these projects as measures towards state compliance. Commenters supported the inclusion of 

measures taken during this period by noting that the EPA's stated goal in CPP is to achieve a 

30% reduction from 2005 emission levels by 2030, making this a reasonable and logical 

approach. Commenters also included wind generation and demand-side energy efficiency as 

projects occurring from 2012-2020 that should be recognized towards CPP compliance. 

Commenters noted that excluding emission reductions from renewable energy programs online 

in 2012 from compliance determination would be unfair and bad environmental policy. Several 

commenters further noted that excluding emission reductions achieved from the compliance 

period by renewable energy brought online between 2012 and 2020 would be inconsistent with 

the EPA's goal in introducing this rule. 

Commenters stated that establishing 2017 as the ramp start for renewable energy has the 

unintended consequence of devaluing investments in renewable or efficiency within the 2012-

2017 timeframe. Commenters noted that failure to credit these technologies installed between 

2014-2020 as 111(d) compliance would cause businesses and utilities to delay investment in new 

advanced energy and carbon reducing projects until 2020. In order to prevent this, commenters 

stated that the EPA should incent and credit the development of renewable energy. Commenters 

supported the EPA's proposal to permit states to count avoided CO2 from existing RE and EE 

measures towards compliance with state performance goals. Several commenters stated that this 

approach would create a strong incentive for companies to bring on new RE as early as possible 

and a more graduated compliance trajectory. Commenters noted that it would also avoid 
243 

distortive market signals and ensure consistent investment in renewable energy; this would 

prevent states from scrambling to meet their interim targets. 

Commenters raised the concern that states would not be able to reasonably and cost-effectively 

implement compliance measures and to meet interim emissions reduction targets in the 

timeframe proposed by the EPA if credit is not given for action taken during the period between 

the finalizing of the proposed rule and the start of the interim period. Commenters noted that 

many states had already implemented, or were in the process of developing, measures to reduce 

carbon emissions, which included deploying renewable energy and displacing fossil fuel, prior to 

the issuance of the draft CPP. Commenters described how the state of Iowa has made significant 

investment in wind projects ($6 billion since 2003) and energy efficiency programs ($100 

million annually) at great costs to Iowa's utilities and their customers. Commenters described 

how the CPP fails to give sufficient credit for these programs, policies, and early actions that 

take place between 2012 and 2020. Commenters stated that it is important that the CPP recognize 

the contribution of Iowa's investments in wind energy and energy efficiency towards meeting 

Iowa's CO2 emission reduction targets. 

Comment 2: Support allowance of early action credit and bank credits of renewable energy and 

energy efficiency added prior to 2020 

Response 2: Qualifying RE generation, inclusive of BSER and non-BSER technologies, 

deployed after 2012 may be fully recognized in state plans for all performance occurring during 

a compliance period. The performance of incremental RE prior to 2022, whether in generation or 

avoided emissions, is not creditable. Refer to section VIII of the preamble for additional 

information on general eligibility requirements for resources used to adjust a CO2 emission rate. 

Under the final methodology for building block 3, there is no pre-compliance year at which RE 

deployment is assumed to increase beyond baseline projections. The final methodology is 

described in detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Several commenters urged the EPA to allow early actions taken by states and individual utility 

companies to comply with the proposed goals, and several commenters suggested that states be 

allowed to bank credits for renewable energy and energy efficiency (EE) added prior to 2020. 

Commenters pointed out that several states and utilities had already begun to incorporate 

renewables and would do so irrespective of the proposed rule. Commenters cited the example of 

NPPD and other Nebraska utilities which are currently adding wind resources to their generation 

mix. Commenters noted that any actions implemented by states prior to 2020 will begin to reflect 

their contribution to emissions reduction at that time and will begin to realize emission benefits 

as soon as implemented. Several commenters noted that the proposed rule provides no incentive 

for states to take early action by adding renewable energy prior to 2020 as there is no way for a 

state to benefit from early reductions for compliance purposes. Commenters noted that this lack 

of incentive may create the unintended consequence of delaying actions that reduce emissions. 

Commenters also noted that the proposed rule provides no incentive for adding renewables or 
244 

taking measures that go beyond what is required to meet a state's goal during the compliance 

period. Commenters stated that states should be allowed to use RE generation and EE resulting 

from measures implemented prior to 2020 by adding such generation to the denominator in 

subsequent compliance periods or to allow a state to extend beyond 2030 the impact of the final 

emission rate goal. Commenters stated that the EPA should clarify that utility programs and 

commitments to invest in RE and EE measures constitute 'existing measures' that states may 

count towards compliance. 

Commenters said that states could accumulate an RE and EE 'bank' between 2012 and 2020 that 

could be used to demonstrate compliance in 2030 and subsequent years; commenters called for a 

bank for renewable generation added prior to 2020. Commenters called for a bank to credit new 

actions taken on or after January 1, 2017. Commenters stated that the bank credits could be used 

for compliance purposes beginning in 2020, and the EPA should allow any credits that exceed 

the state's goal during a compliance period to be banked for use in a subsequent compliance 

period. Commenters noted that implementing an RE and EE bank would recognize that states 

who are leaders in RE and EE, and who thus have already harvested some of the 'lower hanging 

fruit' of cost-effective opportunities, may require more time to reach their final goal. 

Commenters stated that a bank would facilitate utility planning and the likelihood of renewable 

energy purchases for 111(d) compliance prior to the compliance period beginning on January 1, 

2020. 

Commenters suggested that the EPA incorporated renewable energy credits (RECs) in order to 

be more consistent with individual state RES programs; these programs include the ability to 

apply out-of-state resources to in-state compliance goals. The proposal determines goals based 

on the geographic location of the generation resource irrespective of ownership or use, and 

commenters stated that the EPA approach must recognize that state RES programs allow for the 

use of out-of-state RECs as a compliance measure. 

Comment 3: Concerned that the EPA requires the actual use of RE generation 3 years before the 

compliance period in 2020 

Response 3: Under the final methodology for building block 3, there is no pre-compliance year 

at which RE deployment is assumed to increase beyond baseline projections. The final building 

block 3 methodology is described in detail in V.E of the preamble and in the GHG Mitigation 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Several commenters noted that the EPA assumed that states will begin the ramping of the actual 

use of RE generation in 2017, 3 years before the start of the compliance period in 2020. 

Commenters called this assumption irrational. To put this timeline in perspective, several 

commenters stated that initial state plan submissions are not due to the EPA until June 30, 2016, 

and the EPA is allowing itself until June 30, 2017, to take final action approving or disapproving 

these plans. Thus, commenters stated the EPA's Proposed Rule would require states to begin 

implementing their plans before they have even received plan approval. Commenters questioned 

how the EPA accounts for this in the setting of state goals. Several commenters also stated that 
245 

this disconnect is even greater in light of the fact that states may delay plan submission until June 

30, 2017 (for various reasons), or June 30, 2018 (for multi-state plans), pushing final EPA 

approval of these plans to mid-2018 or -2019. In addition, several commenters stated 

that building new renewable energy generation capacity can often take several years to allow for 

planning, obtaining funding, seeking regulatory approval, and construction. Several commenters 

noted that increasing renewable energy capacity will, in many cases, also require new 

transmission infrastructure, which can take 8 to10 years to complete. Commenters also raised the 

question of why the EPA did not account for the time it takes to build new RE. Commenters 

noted that the EPA provides no explanation as to how states could begin to increase their 

renewable resources in 2017 in response to the proposed rule. In effect, states need to have begun 

efforts to implement building block 3 several years ago. According to several commenters, this is 

plainly unreasonable. 

Comment 4: States do not receive compliance credit for early action taken prior to 2012. 

Response 4: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated that under the proposed rule states do not receive compliance credit for early 

action taken prior to 2012. Commenters stated companies and states that have been addressing 

climate change through investments in RE, new NGCC units, and coal-unit retirement are 

effectively given zero credit and are penalized for measures taken prior to 2012 since the EPA 

uses 2012, a single, late year, as the basis from which future RE goals are set. Commenters stated 

that Texas electric-cooperatives have added biomass, hydro-electric facilities, and wind power to 

their generation portfolio for which they may not receive credit under the proposed rule; and 

noted that Texas wind power capacity increased by 57 percent in 2007. Commenters stated that 

the rule effectively penalizes environmental leadership, and, in regards to RE, states that have 

taken early action are affirmatively penalized because their maximum RE requirements are 

imposed much sooner than other states. Commenters stated that states that have taken early 

actions may be put in the position of having to implement extremely expensive options since 

they have already made the most economic reductions. Commenters pointed out that softer Block 

3 targets are given to states that have developed renewable energy more slowly. Commenters 

suggested that the start date of creditable GHG reductions should begin in 2005, which would 

account for GHG reductions achieved by the electricity sector to date. Commenters noted that 

the AECC and its Board have invested in renewable hydroelectric energy, and its members have 

entered into long-term agreements to buy wind capacity from Kansas and Oklahoma. However, 

commenters noted that the proposed rule fails to give credit for these actions. 
246 

Comment 5: Issues with EPA's assumption that there will be "Neither Improvement Nor Decline 

in Performance" of RE generation between 2012 and 2017 

Response 5: The final methodology assumes incremental RE will continue to be deployed 

consistently with the EPA IPM Base Case through 2021. The final building block 3 methodology 

is described in detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated issues with the EPA's assumption that there will be "neither improvement nor 

decline in performance" of RE generation between 2012 and 2017. Several commenters called 

the EPA's assumption that states would begin increasing renewable energy in 2017, but 

beginning at 2012 levels, an overly conservative method, and this approach was called 

insupportable by commenters. Several commenters described the increase in renewable energy 

from 2012 to 2013, and they also described future projects through 2017. As noted by 

commenters, non-hydroelectric renewable generation increased 16 percent from 2012 to 2013, 

and it is expected to grow 35 percent by 2015. Commenters pointed out that wind capacity 

increase 75 percent from 2009 to 2013, and commenters described how installed wind capacity 

increased by 28 percent in 2012 alone. Commenters described the increase in solar capacity as 

well. Commenters noted that solar capacity increased by 473 percent from 2009 to 2013, and 

commenters noted that installed solar PV grew by over 83 percent in 2012. Commenters also 

pointed out that the average costs of wind power and solar PV systems dropped from 2008-2012 

by 60 percent and 40 percent, respectively. 

Some commenters noted that assuming zero growth in renewable energy for a five year period is 

not consistent with the EPA's obligation of relying on the best system of emission reduction that 

has been adequately demonstrated. Commenters noted that only six states had failed to grow 

their percentage of renewable energy generation over the past five years. Commenters suggested 

that, should the EPA keep the basic framework of this approach, the EPA must assume growth of 

RE generation at a rate of no less than 1 percent per year between 2012 and 2017. This 

recommendation is based on the demonstrated growth data compiled by UCS. Commenters 

suggested that the CPP should assume each state's renewable energy generation is able to grow 

beginning in 2012 until it meets the regional target, rather than expecting zero growth from 2012 

to 2017; Commenters also suggested that the state's renewable energy generation at the time that 

the CPP is finalized, rather than 2012, be used as the starting pointing from which its renewable 

generation is expected to grow. Commenters stated that it is clearly technically feasible and costeffective for a state to increase renewable energy generation from the amount of annual 

generation it has already achieved when the Clean Power Plan is finalized. 

Comment 6: Commenters expressed concern the design of the BSER would lock in long-term 

utility power sector investment that was incompatible with the intent of the final rule. 

Response 6: The program start date of 2022 and the phasing in of building blocks 2 and 3 are 

designed to enable long-term investments that are consistent with the emissions trajectory 

embodied by the final goals. Refer to section V of the preamble for additional information on 

the establishment of the BSER. 
247 

The following are summaries of the specific comments under this comment:

Commenters stated that states and utilities should be strongly encouraged and incentivized to 

meet requirements in Building Block 2 and 3 through renewable energy sources such as wind, 

solar, geothermal, or hydroelectric. Commenters said clean, renewable energy makes a better 

neighbor. Commenters said recent studies show that health savings from clean air would more 

than cover the cost of conversion from fossil fuel to clean energy. Commenters said that on the 

other hand, construction of new gas fired plants and supporting infrastructure will lock us into 

continued fossil fuel combustion for the next 40 years and divert capital investment away from 

long term solutions. Commenters said they strongly advocate that a higher value be placed on 

building blocks that improve public health by promoting energy efficiency and clean energy than 

the valuation of building blocks that have lesser or opposite effects. 

3.3.5 Pace at which states improve from start year to target level

The comments in this section address the EPA's estimates of RE growth and the ability of states 

to meet target growth rates. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Commenters stated that the EPA has overestimated RE growth and its impact on 

annual growth. 

Response 1: The EPA does not believe that a lower level of RE deployment in the EPA’s 

illustrative compliance modeling or AEO projections represents an ‘overestimation’ of building 

block 3 target generation, but rather is indicative of lower-cost emission reduction opportunities 

available for compliance. This point is reinforced by observing that the cost of compliance, 

expressed on a $ per ton basis in the Regulatory Impact Analysis (RIA), is significantly lower 

than the cost-effectiveness of building block 3, as described in the preamble. The higher cost RE 

opportunities identified under building block 3 were simply not required to demonstrate 

compliance. This does not mean those opportunities did not exist or were not cost-effective, as 

defined by the EPA in the preamble. Additionally, the EPA is not finalizing an approach that 

relies on state RPS requirements to set a regional target for RE. The final building block 3 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment:

Commenters opined that the EPA has overestimated renewable energy growth by 2029 and its 

impact on annual growth. 
248 

Several commenters stated the assumptions and methodology employed by EPA to predict 

renewable generation levels in Building Block 3 result in 522,723 GWh of national renewable 

generation in 2029 that is included in the state goals. Commenters stated that when one compares 

this target to the EIA's Annual Energy Outlook (AEO) 2013, as well as EPA's IPM results 

projecting the consequences of compliance with Option 1 under a state-focused compliance 

approach, EPA's 2029 estimate ranges between 36 and 47 percent higher than these two modeled 

estimates. Commenters stated this overestimation has been pointed out by NERC, which has 

raised reliability concerns. Commenters also stated EPA's overestimation is reflected in its 

assumed average annual growth in renewable generation. Commenters stated for the purposes of 

Building Block 3, average annual growth in renewable energy generation is projected at 7.1 

percent between 2020 and 2029, compared with both AEO and IPM's projections of a more 

modest 1.5 percent and 1.1 percent for the same time period, respectively. Commenters asserted 

that, to put EPA's error into perspective, AEO's projected average annual growth in the nation's 

total electrical generation for the 2020 to 2029 time period is expected to be 0.7 percent. 

Commenters stated it should be noted that IPM incorporates AEO 2013 RPS in its Base Case 

v.5.13. Commenters stated the AEO 2013 and IPM modeling results are similar, not only 

because IPM incorporates AEO RPS, but also because IPM utilizes AEO 2013 projections of 

future electrical demand (adjusted downward by EPA to represent its goals for reduced demand 

through energy efficiency measures). Commenters stated the reason EPA's renewable energy 

generation levels are below both AEO and IPM prior to 2025 is that EPA does not apply its 

regional growth factors until 2017. 

Commenters expressed that comparing some EPA state-specific estimates with a comparable 

regional estimate from AEO 2013 shows the same overestimation in state renewable generation. 

For example, commenters compared EPA's predicted Alabama and Georgia renewable 

generation levels to those from AEO 2013 for the SERC Reliability Corporation - Southeastern 

(SERC-SE), which includes most of Alabama and Georgia, plus a small section of eastern 

Mississippi and the Florida Panhandle. Commenters stated the projected 2029 renewable 

generation levels in EPA's state goal calculations for Alabama and Georgia are almost 42 percent 

higher than AEO 2013 levels, even though SERC-SE includes a larger geographical area. 

Commenters opined that, but more importantly, AEO SERC-SE renewable generation levels are 

projected to increase only 2.0 percent annually between 2020 and 2029, whereas the target 

generation levels used in Building Block 3 for EPA's state goal computation are designed to 

increase between 2020 and 2029 by an astronomical 11.4 percent per year. 

Commenters stated EPA has significantly overestimated state renewable generation used in 

Building Block 3 and if one corrects for this overestimation, individual states' 2030 Final Goals 

and 2020-2029 Interim Goals would increase. Commenters stated as an example of such a 

correction, the commenters utilized EPA's approach to estimate future renewable generation for 

Alabama and Arkansas using revised annual growth rates. Commenters stated their revised 2012 

to 2029 regional annual growth rates were based upon AEO 2013 regional renewable generation 

levels for SERC-SE (Alabama) and SERC-Delta (Arkansas). Commenters provided a table 

which illustrated a difference between EPA's regional growth rates and those calculated from 

AEO 2013, as well as the resultant 2029 renewable generation. Commenters stated that using 

growth rates derived from AEO 2013 would significantly reduce the level of renewable 

generation that would be incorporated into Building Block 3 for the year 2029. Consequently, the 
249 

commenters stated, less renewable generation will be incorporated into the denominator for both 

Alabama and Arkansas, thereby increasing each state's 2030 Final Goal. 

Commenters stated EPA's BSER determination is not feasible or adequately demonstrated in the 

Southeast. Commenters stated EPA developed regional renewable energy generation targets 

based on state-level RPS, and EPA's methodology assumes all states in each region can achieve 

by 2029 the average of the 2020 requirements of state-level RPS in that region. Commenters 

stated that EPA's methodology, however, is fatally flawed, producing state-level renewable 

energy generation targets that are neither feasible nor adequately demonstrated. Commenters 

stated there are numerous flaws exist in EPA's methodology to establish regional- and state-level 

renewable generation targets. Commenters stated EPA arbitrarily applied regional annual growth 

factors to each state's historical (2012) renewable energy generation level. Commenters stated 

the annual renewable energy growth factor prescribed to the Southeast region is an overly 

aggressive 13 percent. Commenters stated EPA provides no documentation to support this 

annual growth level. EIA-based modeling projections depict the infeasibility of EPA's growth 

assumption for the Southeast. Commenters stated EIA's most recent Annual Energy Outlook 

2014 (AEO2014) contained results from 30 distinct scenarios to illustrate a range of potential 

outcomes under different circumstances, and not one of the 30 scenarios analyzed by EIA 

exceeds a 4.5 percent average annual growth rate of renewable energy generation over the 

modeling horizon (2012-2040) in the SERC Southeast region. Moreover, the commenters stated, 

the EIA scenarios most likely to incentivize the deployment of renewable energy generation - the 

low renewable technology cost and $25/metric ton price on CO2 scenarios - only project 4.5 

percent and 3.3 percent average annual growth rates for the SERC Southeast region. 

Commenters stated that comparing EPA's state-specific renewable energy estimates with SERC 

Southeast AEO2014 regional estimates shows EPA significantly overestimated renewable 

energy generation. Commenters compared EPA's projected Alabama and Georgia renewable 

energy generation levels to those from AEO2014 scenarios for the SERC Southeast region. 

Commenters stated the SERC Southeast region includes most of Alabama and Georgia, in 

addition to a small portion of southeastern Mississippi and the Florida panhandle. Commenters 

stated EPA's projected 2029 renewable energy generation for Alabama and Georgia are higher 

than all of EIA's AEO2014 scenarios for the entire region, even though the SERC Southeast 

region includes a larger geographic area. 

Commenters pointed out that the EPA assumes renewable energy growth of 86 percent from 

2020 to 2030; this assumption exceeds the Agency's own modeling results. Commenters stated 

that the EPA's modeling of the least cost strategy depicts 325 TWh of non-hydro renewable 

generation by 2030, but the EPA set state CO2 rates assuming 525 TWh -- almost 33 percent 

more. Commenters further stated that the EPA's assumptions ignore each state's economically 

reasonable resource limitations and the cost effectiveness of each type of renewable source. 

Commenters pointed out that RE growth is dependent on permitting, financing, transmission 

access, and technical challenges posed by integration of intermittent electricity sources into the 

grid. Commenters asserted that the EPA has not taken these factors into account. Commenters 

also noted that many RE sources are intermittent, so their performance varies seasonally and 

daily. Commenters also stated that the EPA's proposal involves many implausible assumptions 

about future energy demand, dramatic shifts in generation sources, the addition of intermittent 

RE generation sources, and reductions in energy use in 48 states. 
250 

Comment 2: Commenters stated that the EPA's approach for determining emission reduction 

potential of RE does not account for demonstrated growth in states over the last several years 

which results in overly conservative targets (the UCS demonstrated growth approach is 

discussed). 

Response 2: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The resources and data provided in this comment were valuable in 

finalizing the building block 3 methodology, particularly in reevaluating the cost and 

performance assumptions of onshore wind and solar technologies. The final methodology for 

building block 3 is described in section V.E of the preamble and in the GHG Mitigation 

Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the proposed rule is overly conservative with respect to the expected 

level of renewable energy growth given historical trends. 

Commenters stated that under the proposed rule 522 TWh of renewable energy generation is 

expected nationally by 2029; this constitutes 13 percent of 2012 net electric generation or 11.5 

percent of EIA's projected 2029 net electric generation in the Reference Case of the 2014 Annual 

Energy Outlook. Commenters stated historical growth rates in renewable energy generation and 

the pace of improvements in technology performance and cost over the last decade indicate a 

high likelihood that renewable energy generation will continue to grow quickly. Specifically, the 

commenters noted that net renewable generation in the U.S. grew 176 percent from 2002 to 

2012. Commenters further stated that as such, the targets in the Proposed Rule are overly 

conservative with respect to the potential for renewable generation growth over time. 

Commenters stated that in establishing a regional growth rate, EPA used unnecessary constraints 

that limited the pace of renewable energy growth. Commenters stated EPA's approach generated 

growth rates well below what has been demonstrated in the last several years and below what is 

achieved in most projections for the next decade. Commenters stated that, for example, the top 

16 states in solar deployment all grew at growth rates higher than 40%, with 11 states growing at 

rates above 100%, between 2009 and 2013. Commenters also stated that according to EIA data, 

the top 16 states in wind development have all experienced growth at rates higher than 15%, with 

a national growth rate of 30%, sustained over a longer period between 2006 and 

2013. Commenters stated that in contrast, only one region in EPA's Proposed Approach is 

expected to meet a growth rate above 15% (East Central, 17%) in EPA's target- setting. 

Furthermore, Commenters stated, when setting a growth rate EPA should rely on the most recent 

available capacity data, and should not ignore new and under-construction capacity. Commenters 

asserted that renewable generation is quickly growing to meet and exceed state RPS 

requirements, and states with those standards have demonstrated that the levels required by these 

standards are both feasible and economic, and as such, assumed growth rates should more 

closely resemble the impressive growth from leading states during the last decade. 

Commenters stated that EPA's approach for determining emissions reduction potential of 

renewable energy fails to account for demonstrated growth in states over the last several years, 
251 

which produces overly conservative targets which are already being exceeded by several states. 

Commenters urged the EPA to assume a rate of renewable energy deployment that is more 

consistent with recent historical rates of deployment and to adopt the UCS' Demonstrated 

Growth approach; this approach calculates national average renewable energy benchmark growth 

rate of 1 percent of annual electricity sales based on actual state data from 2009 to 2013 from 

EIA. Commenters stated that for states below the benchmark, the EPA should assume they can 

gradually ramp up to 1 percent by 2020, and for the leading 15 states, the EPA should assume 

they can continue at their 5-year average rate up to 1.5 percent per year. Commenters noted that 

this approach would expand the role that renewable generation can play in reducing carbon 

emissions. Commenters discussed renewable growth in the state of Alabama under the proposed 

rule. Commenters noted that the EPA assumes that Alabama will have no growth in renewable 

generation between 2012 and 2017; however, Alabama's renewable investments have increase 

since 2012, and it is expected to further investments before 2017. Commenters noted that 

currently, Alabama Power's recent wind procurements provide more than 1.6 million MWh of 

renewable generation, an increase of 60 percent over 2012 levels. Therefore, commenters 

asserted that Alabama's starting point will be much higher than the EPA assumes, and showing 

that the state is capable of achieving annual growth rates much higher than 13 percent. 

Commenters stated the EPA's assumptions are overly conservative and fail to recognize 

Alabama's technical potential for renewable generation. Commenters urged the EPA to update its 

projected renewable generation targets for Alabama both in the final rule and again in 2017. 

Commenters stated that Alabama's renewable target should be based upon actual renewable 

generation levels in 2017 as well as its abundant potential for future growth; the UCS 

Demonstrated Growth determined that Alabama could achieve 10.6 percent versus the EPA's 9.3 

percent. 

Comment 3: Commenters requested that the EPA set regional targets based on 2030 RPS targets 

and reasonable growth rates. 

Response 3: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested EPA set 2030 regional target based on 2030 RPS targets and reasonable 

growth rates. Commenters stated EPA uses 2020 goals in states' RPS within a region to set 2030 

targets, and includes no justification as to why states should only be expected to meet 2020 

targets by 2030, rather than 2020. Commenters stated this approach is not consistent with EPA's 

justification for using state RPS policies in the first place; if states in a region have determined 

that a certain level of renewable generation is achievable by 2020, shifting that target back 10 

years does not constitute the best system of emission reduction that is demonstrated. 

Commenters stated EPA should instead use each state's 2030 RPS requirements to set 2030 

targets, rather than using 2020 RPS requirements to set 2030 targets. Commenters stated in that 
252 

way, the calculation of achievable renewable generation as part of Block 3 would not ignore the 

commitment by policymakers in some states to add renewable generation after 2020. 

Commenters further stated that for states with requirements that do not continue to increase 

through 2030, the Best Practices Approach should determine a reasonable growth rate based on 

historical market trends to estimate an achievable level of renewable energy growth between the 

last year in which a state has an increasing requirement and 2030. Commenters stated one viable 

approach to calculating growth rates utilizing market data over the last five years was recently 

outlined in the brief titled, Strengthening the EPA's Clean Power Plan, authored by the Union of 

Concerned Scientists. 

Comment 4: Commenters opposed the EPA's use of regions to set RE targets. 

Response 4: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA’s use of regions to set RE targets is arbitrary and capricious. 

Commenters provided the following discussion: 

"Under the Proposed RE Approach, a state's 2029 RE target is based on the 2020 RPSs of states 

in the same EPA-determined "region." EPA's use of these regions to determine RE targets is 

unreasonable because the methodology does not result in goals that logically reflect the amount 

of renewable resources in each state. 

EPA proposes that a state's 2029 RE target is determined by averaging the 2020 RPSs of states in 

the same region. For example, EPA set the North Central Region 2029 RE target at 15 percent: 

the average of the 2020 Illinois (16 percent), Michigan (10 percent), Minnesota (30 percent105), 

Missouri (10 percent), and Wisconsin (10 percent). EPA determined the constant rate at which 

each state would need to increase its RE generation each year to reach the regional RE target if 

these rates are applied in the period of 2017-2029. The constant rate of annual RE generation 

increase is called the "growth factor." The growth factor for the North Central Region is 6 

percent. Id. EPA applied the region's annual growth factor to each state's 2012 RE generation 

level to calculate a new level of RE generation for that state in the initial year of 2017. This 

calculation was repeated for each year in the 2018-2029 period, such that the 2018 RE goal 

would be the 2017 RE multiplied by 6 percent, the 2019 RE goal would be the 2018 goal 

multiplied by 6 percent, and so on. 

This methodology is unreasonable because EPA did not group states with comparable RE 

resources. The failure to consider the circumstances of each state results in arbitrary and 

capricious RE targets. For example, the South Central Region includes Louisiana, Arkansas, 

Nebraska, Kansas, Oklahoma, and Texas. The only state in the region that has an RPS is Kansas. 

If Kansas were not included in the region, the other states in the region would have an RE goal of 

zero percent, or ten percent (using the methodology applied for Hawaii and Alaska). However, 
253 

because Kansas is included in the South Central Region, EPA applied a growth factor of eight 

percent to the entire region. 

This growth factor is imposed without consideration of the existing mix of RE resources in each 

state, which are situated very differently. For example, the NREL estimates that Texas ranks 

number one in the country for wind energy potential, based on potentially developable wind 

capacity. Kansas ranks number two and Nebraska ranks number four. By comparison, Arkansas 

ranks 28 and Louisiana ranks 29. The disparities are due to the weather and geography 

characteristics intrinsic to each state. The economic potential for developing wind capacity and 

generation is based on the amount of windy land area available for development within a state. 

Areas with annual average wind speeds around 6.5 meters per second and greater at 80-m height 

and showing capacity factors of 30 percent or greater are generally considered to be a resource 

suitable for wind development. Arkansas and Louisiana have significantly less suitable land for 

wind development; combined, they have only one percent of the available windy land of Kansas, 

when only geography and weather are considered. These disparities are not unique to the South 

Central Region. The disparate wind resources across the county are illustrated in Figure 3. EPA's 

failure to consider the actual renewable resources in each state renders its RE targets arbitrary 

and capricious." 

Commenters provided a Figure 3 of wind resources of the United States. 

Comment 5: Commenters commented that the EPA's handling of renewable energy (RE) in 

Building Block 3 is arbitrary. 

Response 5: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's inconsistent treatment of RE in the calculation of state goals and the 

proposed methodology for demonstrating compliance is unreasonable. Commenters stated EPA 

calculated state emission rate goals based on the region-wide RPSs and by applying a "growth 

factor" to each state to force the state to increase its RE; however, EPA ignored the reality that 

the RE that forms the basis for the ultimate RE goal for some states includes RE that is exported 

to other states. Commenters stated at the same time, EPA proposes to allow out-of-state endusers to count that RE towards compliance, even if that user serves load in a different state from 

where the RE is generated. Commenters stated the effect of this approach is that the RE goals for 

RE-exporting states are disproportionately high because EPA has ignored the exported RE in 

applying the growth factor. Further, the commenters stated, since the RE-exporting state would 

not be allowed to rely on the exported RE for demonstrating compliance, EPA would impose on 

such states higher prospective RE obligations to achieve the emission rate goals. Commenters 

stated, for example, the majority of non-hydroelectric RE generated in Oregon is used to comply 

with California's RPS. Commenters stated if California is allowed to count this RE toward 
254 

compliance, Oregon will be faced with a more stringent compliance burden, especially with 

regard to the interim goal due to the accelerated growth factor. 

Commenters stated that EPA believes that every state should adopt RPSs to increase their use of 

renewable resources and states that already have RPSs should adopt more aggressive standards. 

Commenters stated that the amount of renewable power that the EPA believes can be brought 

online within the compliance timeframe is unreasonable. Commenters stated that the EPA's 

projections assume that the country can increase the annual rate of growth of new renewable 

resources over projected growth rates by a factor of five. Commenters finished by stating that the 

notion that the country can quintuple an already unprecedented rate of renewable growth lacks a 

rational basis. 

Comment 6: Commenters provided general comments on the timing to implement building 

block 3. 

Response 6: Building block 3 target generation is not assumed to increase beyond expected 

baseline performance until the first year of compliance in 2022. Further, the phasing in of the 

building block 3 target generation level over time ensures adequate lead time for investments and 

planning necessary to begin to integrate higher levels of RE. The EPA addresses this and other 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters provided opinions on the timing to implement Building Block 3. Commenters 

stated that the proposed rule underestimates the nation's capacity to move quickly to a fully 

renewable energy economy; the commenters further noted that the proposed rule should shape 

the direction of the rapid conversion to renewable. Conversely, commenters stated that the EPA 

wishes into existence the necessary infrastructure required for Building Block 3 on an arbitrary 

schedule. 

Comment 7: Commenters stated that municipal utilities will require additional time to procure 

RE resources to meet building block 3 levels. 

Response 7: Building block 3 target generation is not assumed to increase beyond expected 

baseline performance until the first year of compliance in 2022. Further, the phasing in of the 

building block 3 target generation level over time ensures adequate lead time for investments and 

planning necessary to begin to integrate higher levels of RE. The EPA addresses this and other 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 
255 

Commenters asserted that municipal utilities will need additional time to procure renewable 

energy resources to meet the levels in Building Block 3. Commenters stated that state plans 

should have enough flexibility to allow municipal utilities time to procure renewable generation 

in an economical manner. Commenters further stated that if this does not occur, then Iowa's 

families and businesses may be adversely impacted by the costs. In order to avoid adverse 

impacts, the commenters stated that the cost of procuring renewable resources must be spread 

over a longer period of time. 

Comment 8: Commenters commented on the EPA's regional RE growth rates. 

Response 8: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that starting in 2017, EPA applies regional annual growth factors to 2012 

generation levels for all states in a region to prescribe regional goals. Thus, commenters stated 

EPA assumes that renewables in all states within a region will grow at the same rate to reach 

their targets, and will maintain their relative ranks in renewable penetration. Commenters also 

stated the proposal also stipulates an interim goal that averages the state's RE performance level 

from 2020-2029. Commenters stated that unlike treatment of renewable generation in state RPSs, 

the proposal's goals only recognize renewable resources developed within state borders. 

Commenters stated a state's target goal is determined by using its initial 2012 RE level multiplied 

annually by a calculated growth factor to reach the 2029 state target. Commenters stated that 

because electric systems are integrated, many renewables are developed to meet demand and/or 

RPS requirements in neighboring states and benefit from the grid balancing and other integration 

services inherent in our interstate system. Commenters stated the proposal's treatment of 

renewable electric generation that is transmitted and distributed interstate is arbitrary and 

capricious. Commenters further asserted that the proposed rule is, in general, inconsistent and 

arbitrary and capricious in its treatment of all types of generation that serve multiple states. 

Commenters stated that existing RPS programs are typically percentages of retail sales within a 

state, but resources used for RPS compliance may not be limited to resources physically located 

within that state. Commenters further stated that this illustrates the disconnect between RPS 

requirements and Building Block 3, which applies an RPS requirement as a percentage of 

generation physically located within a state. Commenters provided that they do not support the 

establishment of regional potential RE targets since states in a designated region would have no 

control over the policies and actions of others that could ultimately impact their own compliance. 

Commenters recommended that the EPA keep the Building Block 3 assumptions that RE targets 

and credits are derived from in-state generation sources, and states should be allowed to use outof-state renewable energy certificates for compliance under 111(d) and to recalculate their 

renewable energy targets to account for the import and export of energy between states. 

Commenters stated that this would avoid double counting RE sources for compliance, and the 

continued exchange of renewable energy between states would not be further restricted. 
256 

Commenters noted that the EPA's RE growth rate is unsupported by market analyses or realities 

of the generation market. Commenters stated that the EPA determined that Indiana had 3 percent 

of 2012 generation from RE, and set a future target of 15 percent by grouping Indiana in the 

North Central region with states that have 2020 RPS requirements and applying an average of 

these RPS requirements to all states in the region. Commenters stated that the EPA arrived at the 

110,786,236 MWh for 2029 by multiplying the 2012 generation by 15 percent. Commenters 

stated that each state in the North Central region should have a 6 percent growth rate applied to 

its 2012 RE generation beginning in 2017. Commenters stated that the 2029 RE generation goal 

is 7 percent of 2012 generation. Commenters noted that Hoosier Energy has voluntarily invested 

significantly in RE facilities even though Indiana has no RPS, and commenters listed examples 

of these investments. Commenters noted that it is not clear if landfill gas and coal bed methane 

will be considered for RE compliance with the rule. Commenters also noted that the EPA should 

clarify if RE generation from Illinois can be credited for compliance by Hoosier in Indiana, 

otherwise utilities and cooperatives with out of state RE will lose the value of these investments 

made in good faith and that were made voluntarily. 

Comment 9: Commenters stated that the proposed rule requires states that are early-acting in 

terms of RE to meet more stringent goals. 

Response 9: The EPA is not finalizing an approach that relies on the amount of existing RE to 

set state-specific target generation levels under building block 3. The final building block 3 

methodology is described in detail in V.E of the preamble and in the GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's proposed goal calculation methodology also requires early-acting 

states to meet more stringent interim goals, and on a faster timeline than they otherwise would 

have been required to meet. Commenters stated the result of EPA's methodology for using 

regional annual growth factors to set interim and final goals is that states that had high levels of 

RE during the baseline period (i.e., those that had taken early action to institute an RE program) 

are required to meet more stringent interim goals on a faster timeline. Commenters provided the 

following examples and discussion: 

"Minnesota's RPS requirement for Xcel Energy of 30 percent makes the North Central Region 

2029 RE target higher than it would have been had Minnesota not legislated an RPS. Moreover, 

Minnesota's RE generation level (which, in this case, is the same as the 2029 RE target) is 

determined by multiplying the region's RE target (15 percent) by Minnesota's 2012 total 

generation (52,194 GWh), which equals approximately 7,889 GWh. Even though Minnesota's 

2012 RE generation (9,453 GWh) exceeds this goal, EPA added 7,889 GWh to the denominator 

of Minnesota's BSER calculation beginning in 2020 and running through 2029. If Minnesota's 

2012 RE were less than the state's 2029 goal, Minnesota's annual RE goals would have been 

determined by multiplying Minnesota's 2012 RE by the region's annual growth factor (6 percent) 

beginning in 2018 to determine Minnesota's RE targets from 2020 through 2029. The growth 
257 

factor would be utilized through 2029 unless Minnesota hit its maximum target in advance (at 

which point the growth factor would no longer be used). 

Because Minnesota's 2012 RE exceeds its 2029 goal, the annual growth factor does not apply 

and the state is offered no ramp-up period. Instead, Minnesota's 2020 generation level is the 

same as its 2029 RE target. Minnesota has no cushion to minimize the impact of the other 

emission reduction requirements the BSER calculation contemplates, including the unrealistic 

coal plant heat rate improvements and increased natural gas dispatch. Minnesota's reward for 

early action on RE is a more stringent final performance goal that must be reached in 2020. 

Idaho also has high baseline levels of RE generation. As EPA has recognized, Idaho's 2012 

renewable generation (including hydropower) exceeded 87 percent of total generation. The 

Proposed Rule would require that Idaho even further expand RE within its generation mix. The 

presumption that Idaho should be expected to increase its RE generation to levels above 91 

percent imposes unreasonable obligations on the state. Indeed, EPA's decision to ignore 

hydropower in its guidance, except for the purpose of driving more, non-hydro RE through 

Building Block 3, is on its face arbitrary and capricious." 

Commenters noted that the use of a growth rate that is a certain percentage of existing RE 

generation leads to inequities among states by requiring more growth from states with existing 

RE. Commenters stated that the EPA should apply a growth rate that does not depend on a state's 

starting point if the EPA continues to rely on a growth rate. Commenters listed a linear growth 

rate applied equitably to all states as an example of a growth rate measure that the EPA could 

use. Commenters requested that the EPA consider the practical limitations on growth of RE 

including the requirements to integrate new RE into transmission/distribution systems, the 

difficulty of obtaining regulatory approval for new RE, and the time to build new RE generation 

sources. 

Comment 10: Commenters argued against the EPA's use of prior renewable development trends 

to set the RE goals for Building Block 3 as an indication of future growth. 

Response 10: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

Response 10: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The BSER is forward-looking in identifying cost-effective opportunities 

for emission reductions from 2012; however, the cost and availability of these emission 

reduction opportunities is the result of many factors, including previous actions. The EPA 

addresses considerations related to the technical feasibility and associated grid integration costs 

of significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following are summaries of the specific public comments under this comment: 
258 

Commenters opined that the EPA has not sufficiently assessed the technical challenges 

associated with the increased penetration of renewable resources. Commenters stated that in both 

of the Agency's proposed approaches, the RE goals are based, in part, on prior renewable 

development trends, yet the prior growth of renewable resources is not necessarily an indication 

of future growth. Commenters stated in some cases, the most rapid and cost-effective gains are 

achieved in the early years of development and in those areas with the greatest resource potential 

and the greatest potential to deliver and integrate these RE resources (i.e., available 

transmission). In addition, the commenters stated many of the prime areas for renewable 

development are located far from load centers and will require new transmission to be built to 

deliver the power to load centers. Commenters stated that NERC noted that EPA's "analysis 

assumes that adequate transmission capacity is available to deliver any resources located in, or 

transferred to, the region," but that "[g]iven the significant changes and locations anticipated to 

occur in the resource mix, it is likely that additional new transmission, or transmission 

enhancements, will be necessary, and required to transport the amount of renewable generation 

coming online, particularly in remote areas." Commenters stated a typical transmission line 

requires at least five years or more to site, permit and construct, particularly if it crosses federal

or tribal lands. Commenters stated large-scale transmission projects, such as high-voltage 

overlays and those needed for renewable integration can involve even longer lead times. 

Commenters stated this does not include time required for ESA permitting and mitigation. In 

addition, the commenters stated, given the likely changes in the operational status of many 

existing fossil-based units, many studies may need to be conducted to identify where new and 

upgraded transmission will be needed. Commenters cited NERC that "[l]ong lead times for 

transmission development and construction require long-term system planning, typically a 10-15 

year outlook." Commenters stated the addition of incremental renewables to the grid (especially 

if geographically far from load) potentially will come at an increasingly higher cost. 

In addition, the commenters stated both of EPA's approaches are predicated on the assumption 

that large quantities of new renewable generation can be integrated into the grid. Commenters 

stated EPA has not accounted for the technical challenges related to integrating and managing 

large quantities of renewables into the existing transmission and distribution systems. 

Commenters stated these challenges grow as the level of RE penetration increases. Commenters 

further stated that this effect has already been observed in Hawaii and Germany, where these 

technical challenges recently have slowed the pace of growth of renewables and have limited 

their cost-effectiveness as additional grid upgrades are needed to accommodate increasing 

amounts of RE, and quoted the Hawaii PUC: 

"The Commission believes it is unreasonable to expect that the high growth in distributed solar 

PV capacity additions experienced in the 2010-2013 time period can be sustained, in the same 

technical, economic, and policy manner in which it occurred, particularly when electricity usage 

is declining, distribution circuit penetration levels are increasing, system level challenges are 

emerging and grid fixed costs are increasingly being shifted to non-solar PV customers." 

Commenters asserted that, in order to set realistic RE generation goals, EPA must take into 

account the challenges associated with increased penetration of renewables when setting RE 

generation targets under section 111(d). Commenters stated this may entail moderating the 

growth of state RE goals in the later years of the proposed interim compliance period. 
259 

Commenters claimed that the EPA's proposal is flawed since is does not consider that the most 

achievable growth in renewable generation has already been achieved in Texas. Commenters 

opined that assuming a large growth of renewable generation from the 2012 baseline is flawed 

since it does not consider the incremental costs and constraints of continued growth. 

Commenters stated that Texas is already utilizing the sites that offer the best balance of 

investment in transmission infrastructure and wind resource area for renewable generation, and 

Commenters described the EPA's projections as aggressive, unreasonable, and unsupported. 

Comment 11: Commenters stated that RPSs are not an appropriate mechanism for measuring 

future potential RE growth. 

Response 11: The EPA does not believe that a lower level of RE deployment in the EPA’s 

illustrative compliance modeling indicates that building block 3 target generation is too costly, 

but rather is indicative of lower-cost emission reduction opportunities available for compliance. 

This point is reinforced by observing that the cost of compliance, expressed on a $ per ton basis 

in the Regulatory Impact Analysis (RIA), is significantly lower than the cost-effectiveness of 

building block 3, as described in the preamble. The higher cost RE opportunities identified under 

building block 3 were simply not required to demonstrate compliance. This does not mean those 

opportunities did not exist or were not cost-effective, as defined by the EPA in the preamble. The 

EPA is not finalizing an approach that relies on state RPS requirements to set a regional target 

for RE. The final building block 3 methodology is described in detail in V.E of the preamble and 

in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that RPS requirements have already been established as poor indicators of 

potential and likely future RE growth targets. Commenters noted that the EPA's approach 

assumes that RPS requirements are achievable and that states have already assessed feasibility 

and costs of adopting and achieving RPS requirements. Commenters noted that the state of 

Tennessee would need to increase its RE generation by a factor of five from 2012 levels to meet 

the EPA's proposed goal. Commenters stated it appears that the EPA's proposed methodology 

does not account for progress towards achievability of RPSs that are utilized in regional RE 

growth calculations. Commenters stated that they disagree with the EPA's proposed 

methodology for RE target levels for the above reasons. 

Commenters opined that the methodology of using North Carolina's RPS as a proxy for the entire 

Southeast and using it to develop and apply a growth rate to the region is flawed. Commenters 

noted that this methodology rewards states that have been slow to explore renewable energy, and 

states that have made considerable investments in renewables are expected to grow significantly 

more. Commenters provided an example to display this flaw: “States A and B are in the same 

region and have a growth rate of 1 percent. State A had 10 percent of its generation from 

renewables in 2012, but State B only had 0.1 percent. Building block 3 methodologies applies 

the same growth rate to both states' 2012 renewable levels, so after 10 years, State A will be 

expected to increase to 25.9 percent of total generation coming from renewable, but State B will 

only need to have 0.259 percent of total generation from renewables.” Commenters stated that 
260 

since State A had already invested in renewables, it was asked to increase its renewable 

generation 100 times more than State B. Commenters noted that applying a growth rate to a very 

small level of renewable generation results in little growth, but applying the same growth rate to 

a large amount results in large growth. Commenters stated that the EPA's methodology is not 

rational; one expects states to pick the low hanging fruit first, so states that have already invest in 

renewable energy have already utilized the cheapest, most reliable, and most abundant renewable 

resources first. Commenters noted that it is therefore more difficult for this state to grow. 

However, Commenters noted that states with little to no investment in renewable have not yet 

harvested the low hanging fruit, so they can more easily grow. Commenters further noted that 

Building Block 3 methodology demands states with significant investments to grow even more 

rapidly, and states with little to no investment remain close to previous levels. Commenters 

asserted that this is 'unrealistic, economically inefficient, and truly discriminatory to selected 

ratepayers.' Commenters stated that proper methodology encourages growth in areas that have 

not yet picked the low hanging fruit. 

Commenters stated that EPA is proposing that states can increase nationwide renewable energy 

generation from 217,868 GWh in 2012 to 522,723 GWh in 2029, with an annual growth rate 

from 2020 to 2029 of roughly 7.1 percent. (EPA RIA) Commenters stated that the EPA's own 

Base Case modeling predicts much less renewable energy growth under status quo conditions, 

with only about 350,000 GWh in 2029 and an annual growth rate of 1.7 percent. Commenters 

stated that may be able to incrementally increase renewable energy generation through time, but 

it is unreasonable for EPA to assume that states can increase renewable energy generation 

nationwide by nearly 250% by 2029. 

Commenters asserted that the EPA's own IPM runs demonstrate that EPA's Building Block 3 

targets are too costly and do not represent realistic estimates of the renewable energy potential. 

Commenters stated IPM is able to project least-cost capacity expansion and electricity dispatch 

while also accounting for constraints due to fuel supply, transmission, dispatch, and reliability. 

Commenters stated EPA performed IPM modeling runs to assess how states would comply with 

the proposed emission guidelines under both state-focused and region-focused compliance 

approaches. Commenters stated IPM predicts that under both the state-focused and regionfocused compliance approaches, renewable energy generation will only reach 356,063 GWh by 

2029, and will grow at an annual rate of 1.1 percent from 2020 to 2029. Therefore, commenters 

said, the results of these IPM runs constitute EPA's estimate of the power sector compliance with 

the proposed guidelines at the least cost possible, within the constraints EPA imposes on the 

model. Commenters argued that the IPM results suggest that aggressive growth in renewable 

energy generation is so costly that states are only able to achieve modest incremental increases 

above business as usual. Commenters stated this means states will need to rely on the other three 

building blocks in order to comply with the emission guidelines, increasing the overall cost of 

compliance and elevating EPA's cost estimates of all building blocks in the proposal. 

Commenters stated EPA should not use regional RPS targets as the basis for determining 

reasonably achievable future renewable energy growth; EPA should instead use the alternative 

RE approach that the EPA included in the proposal. 
261 

Comment 12: Commenters commented on the ability of states to meet the growth rate of 

renewable energy assumed by the EPA in the proposed rule. 

Response 12: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The BSER is forward-looking in identifying cost-effective opportunities 

for emission reductions from 2012. The EPA addresses considerations related to the technical 

feasibility and associated grid integration costs of significant RE penetration in both the 

preamble (section V.E) and GHG Mitigation Measures TSD.

The following are summaries of the specific public comments under this comment: 

Commenters remarked on the projected growth rate for the state of Alabama. Commenters stated 

that the EPA assumes Alabama's renewable generation in 2017 will be the same as in 2012. In 

2012, Alabama's non-hydro renewable generation was 2 percent of total generation, but, by 

2017, the state will have 1.5 times more than that because of out-of-state wind generation and 

planned forays into solar power. Commenters further stated that this indicates that the EPA 

assumed annual growth rate of 13 percent is not unreasonable and that Alabama is likely to 

exceed that rate. Commenters noted that continuing cost declines have made renewable 

investments a great deal for utilities' customers. Commenters stated that the EPA fails to capture 

cost declines in its assumptions. Commenters further noted that recent wind purchases by 

Alabama Power help to displace higher-cost energy which the company would otherwise 

produce using other resources. 

Commenters stated that the EPA should remove or relax artificial limits on growth rates and that 

the EPA assumes that state renewable generation levels off after reaching the regional targets. 

Commenters also stated that the EPA should set growth rates to what the leading states are 

achieving. Commenters noted that this way, growth rate is based on what states are already 

achieving and not on policy mandates. 

Commenters stated the growth of renewable energy at the rate determined by EPA under its 

proposed approach is adequately demonstrated. Commenters stated EPA reasonably relies most 

heavily on those states that have performed careful studies of their renewable energy potential 

and, because renewable energy generation capacity generally is similar in a given region, EPA 

reasonably extrapolates from existing state programs. Commenters stated that further, the fact 

that a state does not have an RPS policy does not mean it has not or cannot achieve significant 

growth in the generation of zero-emission renewable energy. Commenters stated one study found 

that some states without an RPS have been able to increase their percentage of in-state renewable 

energy production by 6.1 percent, even more than some states with ambitious RPS standards. 

Commenters stated that States with RPSs have, on average, set a goal to obtain 20 percent of 

their 2020 generation from renewable resources. Commenters also stated that studies reveal 

many readily-accessible renewable energy resources that can be developed at reasonable cost. 

Commenters stated this is further supported by the ability of some states to achieve their 

renewable energy targets ahead of the RPS compliance period. Commenters stated that in fact, 

Texas met its 2025 goal of 10,000 MWs in 2009. Commenters stated that the general compliance 

with RPS targets has also been consistently high at well above 90 percent. 
262 

Comment 13: Commenters stated that the EPA should reformulate Building Block 3 in 

accordance with the Union of Concerned Scientists (UCS) approach. 

Response 13: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters commented on the RE growth in the state of Wisconsin. Commenters cited a July 

2012 NREL report found that there is enormous technical potential for renewable energy in the 

state of Wisconsin. Commenters noted that the report found that Wisconsin has the potential for 

approximately 3,523 GW of installed capacity and 6,347 TWh of generation capacity. 

Commenters stated that it is possible for Wisconsin to expand renewable generation to 11 

percent of total generation by only relying on in-state resources. Commenters stated that Clean 

Wisconsin argues that Wisconsin can achieve energy growth greater than what the UCS 

"Demonstrated Growth Approach" projected. Commenters stated that by calculating the average 

incremental growth in renewable energy generation between 2009 and 2013 for each state, a true 

account of the renewable energy growth for that state could be used in goal setting for that state. 

Commenters noted that Wisconsin experienced RE growth rate of 10.85 percent between 2009 

and 2013; if Wisconsin maintained this growth rate starting in 2020, then Wisconsin could 

achieve RE generation levels of 9.873,881 MWh by 2029, which is higher than the EPA 

calculated growth rate. Commenters further stated that the average growth rate is based on 

historical, demonstrated practice, and in the absence of RE generation growth for a state, a 

regional average could be used. Commenters asserted that a minimum renewable energy growth 

rate similar to the UCS rate would be appropriate for states that have not invested in renewable 

energy. 

Commenters stated that the EPA should consider a proposal by the UCS that reformulates RE 

components of building block 3. Commenters stated that the UCS approach approximately 

doubles the amount of generation nationwide by 2030 without incurring significantly greater 

costs. Commenters stated that they believe that the reformulation of building block 3 is superior 

to either of EPA's approaches, that it corrects flaws in the EPA's proposal for building block 3, 

and that they support UCS's demonstrated growth approach. Commenters stated that the UCS 

approach reflects BSER. 

Commenters noted that the UCS's Demonstrated Growth Approach has three key features. First, 

Commenters stated, it is consistent with the EPA's methodology for energy efficiency targets 

under building block 4 by setting benchmarks for incremental RE growth in each state (1.0 to 1.5 

percent annually of total electricity sales); the benchmarks are based on demonstrated RE growth 

from 2009 to 2013, and states are expected to begin meeting their annual growth targets in 2017. 

The second point noted by the commenters was that the demonstrated growth approach assumes 

full compliance with enforceable RPS requirements in states that have them; states will be 

required to meet either its benchmark or the requirement in its RPS program, whichever is 

greater. The third point noted by the commenters was that the UCS proposal accounts for actual 

and expected RE development in states between 2013 and 2017, so the annual benchmark for a 

state in 2017 applies the 1.0 to 1.5 percent incremental growth to the projected 2017 RE 
263 

generation in that state. Commenters stated RE generation is expected to reach 23 percent of total 

electricity sales nationwide by 2030 (excepting hydropower), compared to 10 under business as 

usual and 12 percent under the EPA's building block 3 formulations. Commenters stated that the 

UCS approach predicts that nine states will reach 40 percent and 11 states will meet or exceed 35 

percent of RE generation, and they noted that RE generation under the EPA's plan will not 

approach 40 percent. Commenters stated that states with strong renewable resource profiles can 

meet and exceed 40 percent by 2030, which is back by evaluations by grid operators which show 

that they can already manage this level of RE generation. 

Commenters referenced a PJM study that indicates that "with adequate transmission expansion 

and addition regulating reserves," there will not be "any significant issues operating with up to 

30% of its energy provided by wind and solar generation." Commenters also referenced a NREL 

study that found that up to 35 percent of renewable energy can be integrated into the Western 

Interconnection without requiring extensive infrastructure changes. Commenters stated that the 

40 percent proposed by UCS is not unreasonable, but it may be unnecessary. Commenters stated 

that the 40 percent issue becomes moot if the EPA chooses to use a shorter compliance period. 

Commenters described how UCS derived the annual growth targets for each state. Commenters 

stated that the UCS examined EIA data for 2009 to 2013 to determine the average growth rate of 

RE among the states; they found that most states increased their renewable share of electricity 

sales by 1.0 percent annually. Commenters stated that the years between 2009 and 2013 are 

appropriate for use as a benchmark since they represent the most recent demonstrated 

performance of renewable penetrations in the electricity market thus providing a reasonable set 

of expectation for continued development, and the interval captures much of the historic 

development spurred by states RPS policies, which is a key driver of RE growth as identified by 

the EPA. Commenters stated that the UCS proposal would expect states with annual RE growth 

less than 1.0 percent during the benchmark period to begin scaling up their renewable 

development in 2017 until they meet the 1.0 percent annual growth rate by 2020 and continuing 

to meet that target each year until 2030. Commenters stated that the 15 states that met or 

exceeded that 1.0 percent RE growth between 2009 and 2013 are expected to maintain their 

2009-2013 average growth rate each year between 2017 and 2030 (or 2025 should a shorter 

compliance period be adopted). Commenters also stated that no state would be expected to 

sustain a growth rate above 1.5 percent. Commenters repeated that any state with RPS policies 

which require greater RE development than the UCS target growth rates would be expected to 

meet the requirements of the state RPS. 

Commenters also stated that the baseline generation from which each state's RE growth begins in 

its projected 2017 RE generation. Commenters stated that this is determined by adding projected 

generation from wind and utility-scale solar projects that will be under construction by 2016 to 

that actual RE generation data from 2013. Commenters noted that this is more realistic than the 

EPA's method of assuming zero RE generation growth from 2012 to 2017. 

Commenters listed examples of advantages that the UCS approach has over the EPA approach. 

Commenters noted that the UCS approach accounts for distributed generation ("DG"), which has 

grown since 2008. Commenters also noted that the UCS approach expects states with RPS 

targets less stringent than the EPA targets to meet the RPS targets even if they fail to meet the 

EPA targets. Commenters stated the last example stated that the UCS approach is based on what 
264 

states have actually been achieving in recent years. Commenters stated that the EPA's 

formulation in is BSER Commenters stated that the UCS approach reflects BSER. 

Comment 14: Commenters recommended that the EPA adopt the Union of Concerned Scientists 

(UCS) Demonstrated Growth Approach for applicable U.S. territories and Indian country. 

Response 14: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters requested that the EPA strengthen the CPP by adopting the UCS Demonstrated 

Growth Approach while accounting for the unique challenges posed by the U.S. territories and 

Indian Country. Commenters noted that emission reductions achieved by the CPP could be 

increased from 30 percent to 40 percent below 2005 levels by 2030 by increasing the share of RE 

generation. 

Commenters suggested that the EPA incorporate final emissions reductions for U.S. territories 

and Indian country consistent with UCS's comments specific to the treatment of states. 

Commenters stated that the UCS method would result in significantly more RE generation, and 

that the addition of this RE generation is achievable. Commenters opined that the UCS method is 

a logical outgrowth of the EPA's proposed approach, but the UCS approach yields far greater RE 

generation levels for BSER through the application of several core components. Commenters 

listed the first core component to be the setting of a nation RE growth rate benchmark based on 

demonstrated growth by states from 2009 to 2013. The second core component listed by the 

commenters is the assumption that there will be full compliance with current state RES policies 

that require certain percentages of electricity to come from renewable sources. The final core 

component listed by the commenters is that the UCS method accounts for actual and expected 

RE growth between 2013 and 2017. 

Commenters recommended that the EPA expand its supplemental proposal to the CPP to cover 

applicable U.S. territories and Indian Country. Commenters provided suggestions 

for implementing the added areas that account for their unique electric generation profiles. 

Commenters noted that none of the areas covered by the supplemental proposal had documented 

utility-scale non-hydro renewable generation in 2012, which is why the EPA modified its 

proposed approach to bring RE generation above zero percent of retail sales by 2030. 

Commenters stated that this produces BSER values that are too conservative; the UCS instead 

proposed the following calculations for U.S. territories and Indian country: the ramp up of annual 

growth of the RE share of electricity sales begin in 2017 to equal one percent by 2020; a one 

percent growth rate be maintained from 2020 to 2030; assume that there will be no backsliding 

so covered areas will achieve the greater of the above growth rate or growth rates implied by 

their existing policies (for example, Puerto Rico would be held to the targets detailed in its 

existing RPS). 
265 

Commenters stated that the UCS method imposes a cap on renewable generation at forty percent 

of total electricity sales that would be expanded to all areas would, for example, limit the amount 

of renewable energy generation under the UCS Demonstrated Growth Approach relative to what 

the EPA calculated for the Navajo Nation. 

In the event that the EPA defers to its alternative approach and does not adopt the UCS approach, 

the commenters recommended that the EPA refer to the UCS comments for a discussion of 

recommended modifications to the EPA methodologies that would carry over to the U.S. 

territories and Indian country covered by the supplemental proposal. Commenters noted that one 

modification would be to adjust the cap over time as the CPP is revised and updated to account 

for RE technology advances, grid integration technique advances, and falling costs. 

Comment 15: Commenters stated that the growth rate for each state should be based on the 

necessary rate of progress to achieve state-level renewable energy (RE) target. 

Response 15: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters questioned why states' RE growth rates are determined by historical 2012 RE 

generation from other states. Commenters stated the growth rate for each state should be based 

on the needed rate of progress for that state to achieve its state-level RE target rather than the rate 

of progress needed for the region to achieve its regional RE target. 

Comment 16: Commenters stated that affected utilities have a range of RE options and the 

establishment of an RE floor alters the selection of the most cost-effective generation option 

Response 16: The information provided in this comment were valuable in finalizing the building 

block 3 methodology. There is no RE floor in the final building block 3 methodology, which is 

described in section V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated if Building Block 3 remains a compliance option, affected utilities have 

within their purview a range of renewable energy (RE) options - utility scale, distributed, or 

imported resources. Commenters stated all three of these renewable options present a unique set 

of issues in order to maximize the benefits of renewable electricity generation while ensuring 

state flexibility. Commenters recognized that establishing an RE "floor" is one tool to preserve 

existing RE capacity and advancing technology development, while not inadvertently creating 

backsliding on RE deployment. Commenters stated however, this should not be done at the 

expense of eliminating the use of cost-effective fossil fuel sources. Commenters stated, for 

example, it is plausible that the renewable capacity in the state could decrease as aging 

renewable capacity is replaced with future low-emitting and cost-effective fossil generation. 
266 

Commenters stated establishment of an RE floor alters the selection of the most cost-effective 

generation option. 

Comment 17: Commenters stated that the EPA should take into account different renewable 

generation mixes within states by looking at state historic RE growth and acknowledging growth 

limitations. 

Response 17: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's application of an RPS from a state with a rapidly increasing renewable 

energy source to a state in which its primary renewable energy source has remained almost flat 

can result in a significant overestimation of renewable generation capability in the latter state. 

Commenters suggested EPA take into account different renewable generation mixes within states 

by looking at state historic renewable energy (RE) growth and acknowledging the growth 

limitations for various types of RE, such as biomass and wood and wood-derived fuels. 

Commenters referenced a letter to EPA from the Arkansas Attorney General discussing how the 

state has limited wind potential. Commenters stated that nearly all of the non-hydro renewable 

energy that Arkansas consumes originates in nearby states. Therefore, commenters stated, EPA's 

goal setting methodology related to Building Block 3 would require states like Arkansas to invest 

in renewable energy resources within the state no matter how inefficient and costly they might 

be. Commenters stated this is a very expensive proposed method for compliance, and unless 

adjusted to reflect state circumstances, does not constitute BSER. 

Commenters stated that in the Southeast Region, the Agency computed a regional annual growth 

rate of approximately 13 percent, with a 10 percent renewable target. Commenters stated based 

upon these assumptions, Georgia would be able to achieve its target of 12,230 GWh of 

renewable generation by 2027 and Alabama would not achieve its renewable target before 2030; 

however, both Alabama and Georgia's renewable generation is dominated by industrial CHP 

sources burning wood or wood-derived products, such as pulp and paper mills (in excess of 90 

percent of each states' total renewable generation). Commenters stated that between 2008 and 

2012, these Industrial CHP sources grew at an annual rate of 2.1 percent annually in Georgia, 

while in Alabama these same types of facilities declined by 5.1 percent annually. Commenters 

stated it is highly unlikely these types of industrial CHP facilities will add the levels of 

renewable generation predicted by EPA in Building Block 3. Commenters stated that for Georgia 

to achieve its state target, other non-hydro sources (e.g., wind, solar) would have to increase their 

output at an astounding 44.5 percent per year. Commenters opined that the lack of any detailed 

evaluation of a state's renewable energy mix has resulted in a significant overestimation of the 

renewable generation that is included in each state's Building Block 3 projections, and EPA must 

correct these overestimations for its method to remain valid. 
267 

Comment 18: Commenters stated that the glide path is too short and supported the glide path 

being determined by the state. 

Response 18: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. Under the final methodology, building block 3 target generation is not 

assumed to increase beyond expected baseline performance until the first year of compliance in 

2022. Further, the phasing in of the building block 3 target generation level over time ensures 

adequate lead time for investments and planning necessary to begin to integrate higher levels of 

RE. The EPA addresses this and other considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed that the glide path requires a large amount of the mandated reductions in 

too short of time and that a better approach would be to allow a "glide path" determined by the 

state based on individual state circumstances. 

Commenters stated that the glide path would require Minnesota to achieve 84 percent of its total 

mandated reductions by January 1, 2020, which is a large reduction in a short amount of time. 

Commenters noted that Iowa (61%), North Dakota (67%), South Dakota (67%), and Wyoming 

(53%) would need to make similar reductions by 2020. Commenters stated it is not possible for 

states to meet these goals in less than four years given the limitations of natural gas capacity, 

renewable energy intermittency, the need for more transmission, and the lack of planning and 

permitting time for new renewables, new pipelines or transmission, for natural gas ramp-ups at 

existing plants (if feasible), or for new natural gas plants. 

Commenters also noted that the glide path fails to anticipate the time it would take to implement 

any state policies to create incentives or mandates for construction pertaining to Block 3. 

Commenters noted that Iowa, Minnesota, North Dakota, and South Dakota have abundant wind 

resources as well as well-priced generation equipment and transmission capacity, but, as more 

renewable are added, the transmission and the distribution grid will need to be expanded and 

updated to reliably meet demand. Commenters stated that the glide path fails to provide 

sufficient time to plan, finance, permit, and construct sufficient renewable generation, as well as 

NGCC to support intermittent resources, electric transmission, and natural gas infrastructure. 

Commenters stated that the states are in the best position to know what non-emitting resources 

can be constructed to ramp-up to the 2030 goal and can be entrusted to develop viable glide 

paths that demonstrate progress toward the achievement of that goal. 

Commenters stated the USEPA developed the RE goals by regions without regard to potential 

RE opportunities or electric grid interconnections between states with higher RE potential and 

states with lesser RE potential. Commenters stated the front-loading of RE prior to 2020 presents 

timing challenges that may be insurmountable. Commenters suggested a better approach would 

be to allow a "glide path" determined by the state with reports to the USEPA on progress 

beginning in 2020. Commenters stated this approach would allow states more flexibility and 

control of development costs to minimize ratepayer impact, while still attaining the final goal. 
268 

Comment 19: Commenters stated that it is improbable that Wyoming or other states can achieve 

the EPA's proposed growth rate. 

Response 19: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated it is improbable for Wyoming or anyone else to achieve this growth rate. 

Commenters stated EPA's focus on a cocktail of state RPS goals ignores the forces that have 

both driven Wyoming wind development and stopped its growth. Commenters suggested EPA 

consider the EIA data for wind production from 2008 through 2013 and provided a table of 

MWh produced each year. Referring to a table in their comment letter, commenters stated that 

there is not a pattern of steady growth, but instead a pattern of dramatic growth, followed by 

ongoing stasis. Commenters stated the reasons are not obscure and the growth was principally 

the result of resource acquisitions for the PacifiCorp system and the plateau from 2011 on was 

principally due to reaching the limits of transmission capacity in Wyoming. 

Commenters stated that going forward, a reduced rate of PacifiCorp system growth and ratepayer 

resistance may limit investor interest in new renewables and necessary transmission. 

Commenters stated that they described this history of rate increases in the letter of December 16, 

2013 and stated that the increases are not over. Commenters further stated that decisions are 

currently pending in a 2014 general rate case seeking an increase of more than 5% and a 2014 

case to pass on increased energy costs. Commenters reported that, as of the fall of 2014, 

PacifiCorp anticipates completion of significant new transmission, known as Gateway West, in 

2024. Commenters stated that the company has pursued Gateway West through many years of 

delays, most of which were due to federal constraints on routing and permitting of the 

transmission line. Commenters stated the Department of Environmental Quality describes these 

planning concerns and development constraints in separate comments, as well as EPA's flawed 

assumption of the land available in Wyoming for wind development. 

Commenters asserted that they agree with the DEQ that the correct growth rate for Wyoming is 

no more than 1%. Commenters stated the Department of Environmental Quality has shown that 

this is a fair composite of the growth rates embedded in the RPSs of the western states. 

Commenters stated EPA has simply considered state targets without paying attention to the rates 

at which the RPS states proposed to progress to those targets. Commenters stated the DEQ 

approach is more consistent with the EPA's stated objective of determining an appropriate rate, 

and more consistent with the practical impediments to renewables development. Commenters 

stated that assuming EPA's construct, EPA could reach the correct goal by substituting 666,212 

MWh for 4,369,107 MWh, and 1% for 6.095%, and re-calculating Block 3. 

Comment 20: Commenters stated that Texas's 20 percent renewable target (a 153 Percent 

increase above 2012 levels) exceeds the 2012 generation of all types from generation in 32 

states. 
269 

Response 20: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology does not rely on RPS requirements or state-specific deployment estimates, but 

rather cost-effective RE at an interconnection level. The EPA addresses considerations related to 

the technical feasibility and associated grid integration costs of significant RE penetration in both 

the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the EPA assumes that Texas can increase renewable power to 20 percent 

of total generation by 2030; this is a 153 percent increase above 2012 levels. Commenters further 

noted that Texas' 2030 renewable target (86 million MWh) is more than double the amount of 

renewable generation which the EPA requires for the state with the next highest renewable target 

(California). Commenters complained that there are ten states whose total power generation 

across all fuel sources is less than Texas' current renewable performance and that Texas' 20 

percent renewable target exceeds the 2012 total generation of all types from generation in 32 

states. 

Comment 21: Commenters stated that the EPA's assumption that Alaska's 2002 to 2012 RE 

generation growth rate could be sustained from 2017 through 2029 is incorrect, and requests that 

calculation and compliance methodology be consistent considering Alaska's circumstances. 

Response 21: No building block 3 generation level is applied to Alaska, Hawaii, or the U.S. 

territories in the final rule. 

The following are summaries of the specific public comments under this comment: 

Commenters remarked on the annual renewable electricity growth rate calculated for Alaska. 

Commenters stated that the annual growth rate for Alaska was calculated differently than for the 

lower 48 states. Commenters stated that the EPA determined the difference between 2002 and 

2012 RE generation and then assumed that this RE generation growth rate could be sustained 

from 2017 through 2029. Commenters asserted that this assumption was incorrect since the EPA 

has no technical basis for assuming that RE generation growth will continue; therefore, the EPA 

should not assume no growth in RE generation unless the EPA can identify RE generation 

projects that will be constructed or specific requirements that will lead to the construction of RE 

generation. Commenters noted that the EPA included RE generation in calculating Alaska's CO2 

performance goals regardless of offsets generation from existing affected EGUs. Commenters 

noted that Alaska has RE generation in remote communities which is not connected to the 

affected EGU electrical grid, but the EPA only allows RE generation that offsets generation from 

existing affected EGUs to be used in determining goal compliance. Commenters asserted that 

this inconsistency creates artificially low performance goals for Alaska. Commenters requested 

that the calculation and compliance methodology be consistent to increase the likelihood that the 

calculated goals can be attained. 
270 

Commenters noted that supporting data could not be found in order to replicate the EPA 

calculations used to determine the Alaska RE generation of 39,958 MWh. Commenters noted 

that the EPA's annual RE generation growth factor of 11.426 percent is based on the growth rate 

of RE generation between 2002 and 2012 without additional details being provided. Commenters 

requested that the supporting data used in this calculation to be clearly identified so that EPA 

calculations can be verified. Commenters noted that it is not likely that Alaska will be able to 

sustain the high level of RE generation growth through 2030 as the EPA assumes. Commenters 

stated that the 11.426 percent growth factor was conservatively included in the corrected Alaska 

CO2 performance goals calculations, and retaining this conservative growth rate results in lower 

goals than a more realistic RE generation growth rate. Commenters stated that the EPA should 

identify a more representative RE generation growth rate in correcting the Alaska CO2 

performance goal calculations. 

Commenters noted that Alaska is fundamentally different than the lower 48 states since RE 

opportunities and grid infrastructures are limited. Commenters further noted that the Alaska 

annual RE growth factor should be assumed to be zero; the Alaska utilities cannot sacrifice 

electric reliability in an attempt to meet an arbitrarily defined goal. Commenters concluded that 

reliability is paramount since it can mean the difference between life and death due to the 

extreme climatic conditions in Alaska. 

Comment 22: Commenters discussed the anticipated growth of solar energy in South Carolina. 

Response 22: The information provided in this comment was valuable in evaluating the impact 

of non-BSER resources on achieving building block 3 target generation levels. The final building 

block 3 methodology is described in section V.E of the preamble and in the GHG Mitigation 

Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters described the Distributed Energy Resource Program Act, which is a bill that was 

passed in the State of South Carolina on June 2, 2014. Commenters noted that the bill is designed 

to lessen restrictions on solar energy, and the bill would allow solar leasing statewide through 

investor-owned utilities. Commenters anticipated that solar energy would grow in South 

Carolina, and it will result in further reduction of South Carolina's CO2 emissions. 

Comment 23: Commenters stated that in the West, the federal government owns vast portions of 

many states. Commenters said the use of these lands will be paramount to increasing renewable 

generation and siting gas and electric transmission structures and EPA must allow ample time for 

states to work with other federal agencies. 

Response 23: The phasing in of the building block 3 target generation level over time ensures 

adequate lead time for investments and planning necessary to begin to integrate higher levels of 

RE. The EPA addresses this and other considerations in both the preamble (section V.E) and 

GHG Mitigation Measures TSD. 
271 

 

3.3.6 RE targets for interim and final state goals

This section discusses issues raised by commenters related to RE targets for interim and final 

state goals. Many of the issues are related to the specific calculation of the goals and the 

exclusion of current renewable energy sources. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: The EPA's analysis of state RPS goals is oversimplified and reflects EPA's limited 

understanding of these goals. 

Response 1: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that some state RPS goals are voluntary, while others establish requirements 

only for large, investor-owned electric utilities or apply less stringent "secondary" or "tertiary" 

RPS goals to smaller utilities, municipal utilities, or cooperative utilities. But the EPA applies the

more stringent primary RPS goals to all in-state generation and treats all goals as mandatory, 

artificially leading to more aggressive RE generation targets, the commenters said. Many state 

RPS goals include hydroelectric power generation, but the EPA does not include existing 

hydroelectric power towards compliance with its Proposed Guidelines, the commenters added. 

For example, New York counts hydroelectric power towards its 29 percent RPS target, and this 

source accounted for 83 percent of the state's renewable generation in 2012, the commenters 

noted. Commenters stated including this component of the RPS in the Building Block 3 goals 

without allowing states to rely on existing hydropower for compliance will substantially increase 

the amount of new renewables required in each state, even in states that have already reached 

their own RPS goals. 

Commenters stated that the EPA's analysis reflects an oversimplified understanding of the nature 

of state RPS goals. Moreover, commenters added that some state RPS goals allow utilities to 

comply through mechanisms other than actually developing in-state RE generation. For example, 

North Carolina's RPS goal allows utilities to meet 25 percent of their requirements by reducing 

energy consumption through energy efficiency measures, and another 25 percent of their 

requirements by purchasing RE certificates from out-of-state facilities, the commenters 

continued. Thus, the 10 percent RPS target the EPA assumed for North Carolina effectively 

requires in-state RE generation to reach only 5 percent by 2020, the commenters noted. Because 

North Carolina's RPS alone sets the regional target for the entire Southeast region, the EPA's 

target is roughly 100 percent too high for eight states, including Florida, the commenters said. 
272 

Commenters stated NERC has also expressed concern with EPA's flawed assumptions regarding 

RE potential in the Southeast region. Commenters stated this is not a minor error. Commenters 

stated North Carolina and other states have built cost-control mechanisms into their RPS goals in 

order to reduce the requirements for utilities if compliance becomes too burdensome. The EPA 

did not account for any of these flexible compliance mechanisms when dictating regional RE 

generation targets, the commenters said. 

Similarly, commenters also said that the EPA has not been consistent in how it has developed the 

RE goal and how it has proposed to allow a state to demonstrate compliance. For example, 

commenters made the following points specific to North Dakota: 

• First, the goal is based on total generation of electricity (including existing hydro, 

wind, and coal) in North Dakota yet allows other states to claim part or all of the 

RE that is generated in North Dakota, including existing wind power that is 

included in North Dakota's goal calculation. In addition, allowing other states to 

take credit for RE generated in North Dakota could be construed as taking a 

property right from the utility that generated the renewable electricity. 

• Second (and as commenters also pointed out), the calculation of the goal included 

existing hydroelectric power, but does not let North Dakota take credit for that 

RE, commenters noted. 

• Third, the calculation of the goal is based on total generation in North Dakota and 

a regional RE standard; however, many of the RPS used to determine the regional 

standard are based on sales of electricity. Since North Dakota exports 60% of the 

electricity generated, there is huge difference between total generation and instate sales of electricity. The North Dakota electricity market can only support so 

much RE because it is intermittent. Base load power is required for most of the 

annual load. 

Commenters asserted there are alternatives that will correct the inequities in the Proposed Rule 

regarding RE which include the following: 

• The state where the RE is generated gets full credit for that energy (this would be 

consistent with the goal setting and provides for easy accounting of the RE); or 

• The utility that supplies the RE to their retail customers can dictate which state 

gets credit for the RE (this option would resolve any issues of EPA taking 

property rights from the utility); or 

• The renewable goal is recalculated for each state based on the sales of electricity 

in that state. This is consistent with most state renewable portfolio standards and 

the method used in Building Block 4. It would also allow the EPA to use the 

proposed method for crediting RE; or 

• The EPA does not provide any guidance on the crediting of RE and allows states 

to come up with an agreement amongst themselves on who gets credit. 
273 

In any event, this is a complex issue that requires further dialogue and discussion between the 

EPA and the states, commenters asserted. 

Commenters asserted that the EPA's use of the state RPS requirements in a region to calculate 

regional goals is illogical and flawed. Commenters added that the EPA's use of a simple 

numerical average is faulty and that it should at least weight the average by the amount of 

generation in each state. For example, commenters said that the EPA averages Delaware (20 

percent RPS requirement, 9 TWh net generation, 2012) with the same weight as Pennsylvania (8 

percent RPS, 223 TWh generation). Moreover, the EPA should recognize and include zero 

values for states that have determined that no mandatory RPS is appropriate for circumstances 

existing in that state, the commenters expressed. 

Commenters said that the EPA places each state into one of six regions and establishes a RE 

target for each region based on an average of existing RPS in the relevant region. The underlying 

rule calculates an annual growth rate that would allow each region to reach its specific target by 

2030 and the commenters indicated that it has several observations about this approach. 

First, the commenters explained that state RPSs differ on compliance levels (percentages), types 

of eligible resources, and nuances in the laws that could result in less renewable penetration than 

the stated compliance percentage - for example, Washington State's Energy Independence Act 

does not apply to all utilities, cost caps, etc. Also, the commenters added that Washington State's 

RPS is different than those of neighboring states - the State of Oregon's RPS allowed certain 

existing hydroelectric projects, such as low-impact hydropower capped at 50 aMW per year 

generated by an Oregon utility and energy efficiency upgrades made to Bonneville Power 

Administration hydroelectric projects located in Oregon, to be used at enactment. Commenters 

stated Washington State's RPS only allows incremental hydro to be used for compliance. Oregon 

also allows utilities with surplus resources to delay compliance until the time when utilities need 

to add resources to serve retail customers - Washington State does not, the commenters said. 

Commenters also added (similar to other commenters) that the underlying rule states that, 

"existing hydroelectric facilities are often excluded from RPS accounting." Disadvantaging 

renewable, carbon-emission free hydropower seems to run contrary to the stated objectives of 

Federal policymakers, the commenters said, including Energy Secretary Ernest Moniz, who said 

earlier this year, "... We have to pick up the covers off of this hidden renewable that's right in 

front of our eyes and continues to have significant potential. " 

Commenters asserted that it is important to note that in its calculation of Building Block 3B for 

target setting, the EPA bases its target percentages on regional average RPS objectives, which 

may include both in state renewable generation and out-of-state REC purchases. Commenters 

said that the EPA has requested comments on how to measure a state's renewables for 

compliance purposes: include in-state generation only, or any generation for which entities 

within the state have purchased RECs. Of course, the commenters said, under this latter 

definition, if RECs associated with part of a state's renewable generation are purchased out-ofstate, then the emission reduction resulting from those renewables displacing fossil generation 

will not be counted in the generating states 111(d) emission formula, but rather would displace 

generation in the purchasing state's formula. 
274 

Commenters stated they are small not-for-profit municipal utilities whose "affected units" emit 

less than 2.6% of Illinois' total carbon emissions from fossil-fuel fired EGUs, and are outside the 

jurisdiction of the state's public utility commission. Commenters provided electric power to 

approximately 68,000 customers, the residents and commercial businesses. Commenters said the 

costs for this electric power, and our environmental controls, are borne by our citizens, the 

ratepayers. Commenters said the city council invested early in transmission upgrades, including 

"smart" technologies. Commenters were vertically integrated utilities, exempt from the 

jurisdiction of the state's public utilities commission, the Illinois Commerce Commission (ICC). 

As a municipal utility, commenters generated or purchased its energy outside of the Illinois 

Power Agency (IPA). Commenters were also exempt from the state Renewable Portfolio 

Standard (RPS) goals, as established by state statute, and even though outside Illinois' RPS, 

Commenters had acquired renewable energy that far outpaces the percentage of renewables 

within Illinois' RPS. Accordingly, commenters were not subject to state RPS laws that are likely 

to serve as the basis of Illinois' plan to meet the GHG Rule being prepared by the ICC and the IL 

EPA. Commenters’ municipal ownership, their vertically integrated structure, and their 

ownership of generation assets make them unique in Illinois. Commenters stated, an early mover 

in the deregulation era, Illinois required electric generators to divest generation assets leaving the

bulk of the citizens of the state subject to competitive electric market providers that are separate 

from the transmission and distribution service providers. Commenters said Illinois' pathway to 

compliance with the Clean Power Plan (CPP) is further complicated by the existence of two 

Regional Transmission Organization (RTO) markets, Midcontinent Independent System 

Operator (MISO) and PJM Interconnection(PJM), that affect generation dispatch and pricing in 

different ways. 

Comment 2: Commenters asserted the EPA should strengthen RE targets. 

Response 2: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. The final building block 3 methodology is described in detail in 

V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated that the proposed regulations fail to advance the most promising solution to 

the climate crisis: renewable energy. Significant technological and economic improvements have 

been made in both wind and solar technology, the commenters expressed. Instead of challenging 

states to maximize the development of renewables, the rule establishes extremely weak goals for 

each state, the commenters said, woefully for the amount of power each state should derive from 

RE based on an averaging of existing programs. Commenters said that many of those suggested 

goals are even weaker than what several states have planned, and in some cases already have 

achieved. For example, Missouri's own RE goal is five times greater than the rule's suggested 

goal for the state, and Minnesota is producing 18% of its energy from renewables today, already 

exceeding the meager 15% goal suggested by the rule, the commenters pointed out. Similarly, 

the commenters said that Kansas, which has far more wind potential than necessary to 

accommodate its own needs is given a suggested goal of only 20%; and many states, including 
275 

those which are the worst power plant polluters, like Kentucky, are presented with negligible 

renewable goals of 1% or 2%. 

In fact, the commenters noted that the EPA predicts that the rule as proposed would have 

virtually no effect on the amount of renewables in 2030 compared to forecasts without the rule. 

Commenters indicated that if fully implemented, the rule would result in less than 16% of the 

country's electricity needs being met with renewables (including hydropower) by 2030. 

An effective response to the climate crisis demands a rapid transition away from fossil fuels, 

clear regulatory signals, and robust governmental support, the commenters added. The rule 

should do everything possible to speed the needed shift to RE by setting technology-forcing 

targets for 2030 that reflect the maximum level of renewable generation achievable in each state, 

the commenters recommended. From a policy perspective, the CPP must recognize and 

encourage RE as the most effective means of tackling climate change and achieving true longterm energy independence, the commenters also said. Commenters said that in their opinion to 

do anything less would fly in the face of the oft-repeated pledge to "base decisions on science." 

Commenters said the EPA asks whether an alternative approach should be considered involving 

the evaluation of RE potential; however, this too applies overly conservative technical and 

market constraints which limit the true capacity of renewables. The commenters said that for 

example, the rule completely ignores the significant potential of offshore wind simply because 

no offshore facilities have been built yet in the U.S. A rule that fails to "move the needle" on 

renewables, lacks any proactive policies or incentives to augment market forces, and remains 

stagnant with respect to technology that has been successfully implemented in other countries is 

of little value. 

Commenters asserted that responding to the threat of climate change requires that the EPA 

challenge states to maximize sources of energy that do not burn fossil fuel. Commenters said the 

rule's extremely weak set of suggested renewable goals should be replaced with ambitious 

requirements based on the technical potential for renewable power in each state, also recognizing 

the capacity of some states to become net exporters of electricity from renewable sources. 

Commenters said that NREL offers significant data, mapping, and analysis to support this, and 

significantly, in its comprehensive 2012 Renewable Electricity Future Study, the NREL 

determined: 

"Renewable electricity generation from technologies that are commercially available today, in 

combination with a more flexible electric system, is more than adequate to supply 80% of total 

U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every 

region of the country." 

Commenters added that important research is also presented in the 2013 report titled Examining 

the Feasibility of Converting New York State's All-Purpose Energy Infrastructure to One Using 

Wind, Water, and Sunlight (Jacobson, et al.) which describes a strategy to replace New York's 

current energy portfolio-presently dominated by fossil fuels-with one relying entirely on 

renewables generated in state. Expanding on this, the "Solutions Project" advocates a plan for 

each state in the country to achieve independence from fossil fuels by the year 2050, the 

commenters expressed. 
276 

In conclusion, the commenters asserted that the bottom line is that climate catastrophe cannot be 

avoided if the U.S. continues to rely on fossil fuels to supply most of its energy. Commenters 

stated the rule should work toward a goal of transitioning to 100% RE and set aggressive targetslike those demonstrated in the aforementioned reports-to require that each state meet the greatest 

achievable portion of its electricity with zero-emission renewables. To this end, the commenters 

urged the EPA to set targets that will result in the United States meeting at least half of its 

electricity needs with zero-emission sources of energy by 2030. 

Commenters indicated that a great weakness of this rule proposal is an over-estimate of the 

market viability for climate polluting power generation, versus wind and solar. Commenters 

stated the EPA projects coal and natural gas each will still provide about 30% (60% total) of 

power supply by 2030. The EPA analysis neglects rooftop solar and offshore wind, which in a 

decade or two could provide the majority of renewable power in the U.S., the commenters said. 

Many analyses have demonstrated this, the commenters noted. Commenters indicated that the 

Greenpeace report, "Energy [R]evolution: A Sustainable USA Energy Outlook" includes 

reference to these analyses to compare with our own (http://www.greenpeace.org/usa/en/mediacenter/reports/energy-revolution-2014/). Previous versions of the report under-estimated 

renewables growth, the commenters noted. 

In the Energy [R]evolution (E[R]), the commenters showed that by 2030 power generation is 

comprised of only 20% NG and 7% coal. Commenters said that the Energy [R]evolution report 

estimates what can achieved in terms of CO2 reduction from the power sector: 

• By 2020, the commenters said they can do about twice what the proposed rule 

achieves. The E[R] shows that, based on 2012 levels, they could achieve a 

23.34% CO2 cut from power by 2020 versus only 12.12% for the EPA proposal, 

the commenters noted. 

• By 2030, the commenters said they can achieve more than four times the CO2 

cuts in the EPA proposal. The E[R] shows 64.54% cut from 2012, versus only 

15.88% for EPA, the commenters noted. 

Commenters continued and said that the EPA estimates the proposed rule will have little effect 

between 2025 and 2030. Commenters stated the EPA's proposal has four options for states to 

consider for implementation: a weak and a weaker option with regional cooperation, as well as a 

weak and weaker option without regional cooperation. Thus, there are four different estimates 

for what the rule would achieve by 2020 and 2025, and there is no worst case estimate for 2030, 

the commenters said. For the worst case scenario for 2025, the EPA estimates a less than 8% cut 

from power sector CO2 by 2025, whereas the Greenpeace E[R] estimates the U.S. could cut 

emissions by almost 23% under 2012 levels by 2020, the commenters said. 

Commenters pointed to the attached graph and chart which showed how these estimates translate 

into emissions reductions, with the various base years, end years, and four options in the rule 

proposal. This is based on data in documents the EPA provided with the rule, as well as the most 

recent EPA GHG inventory, the commenters concluded. 
277 

Comment 3: Commenters said the methodologies used by EPA for the Proposed Approaches are 

overly conservative 

Response 3: The EPA is not finalizing an approach that relies on state RPS requirements to set a 

regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that under the EPA's Proposed Approach, the Southeast region's RE target 

(10% of 2012 generation levels by 2030) is based on North Carolina's RPS target, which is one 

of the weakest (lowest) in the United States. Commenters stated its relatively weak goals should 

not be viewed as a useful perspective on the potential for regional development of RE. For 

example, commenters said that North Carolina utilities have already gone beyond the state goals 

for on-system solar energy development. Relying on the North Carolina standard limits the 

Southeast to arbitrarily conservative RE generation targets and fails to recognize utility and 

regulator engagement in other strategies (i.e. not mandates) to accelerate market trends in 

Southeastern states, the commenters expressed. 

Further, commenters said that the Proposed Approach relies on "regional growth factors" for 

determining target RE generation levels for each state. There is no floor to each state's RE 

generation level, which in part causes several states to have 2030 RE targets below the regional 

target level, the commenters added. For example, despite the southeast having a 10% regional 

target for RE, Alabama (9.3%), Kentucky (1.9%), and Tennessee (5%) all have state-level targets 

below the regional level, the commenters pointed out. Commenters stated the RE target 

generation level is a misnomer, because it is a cap, and therefore once achieved the RE 

generation level is assumed to remain flat through 2030. Applying such a cap is an arbitrary step 

that fails to capitalize on the momentum of a particular industry, and particularly ironic given 

that North Carolina has already exceeded the solar portion of its standard that serves as the basis 

for this cap, the commenters argued. Commenters said if this cap is used, based on the EPA 

calculations, Georgia and Mississippi reach the 10% RE generation level by 2027, North 

Carolina and South Carolina do so by 2028, and Virginia does so by 2026. After meeting the 

10% RE generation target, the EPA's target calculation assumes that none of these states increase 

RE generation any further, the commenters concluded. 

Comment 4: Commenters stated that a 30 percent reduction in CO2 is aggressive, but 

reasonable 

Response 4: The information provided in this comment was valuable in finalizing the building 

block 3 methodology, which is described in section V.E.6 of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that it has identified several concerns with the NODA proposal, and 

support the approach taken in the Proposed Rule, which the EPA expects to result in about a 30 
278 

percent reduction in CO2 emissions from existing affected EGUs. Commenters asserted that this 

level of emission reduction is an aggressive, but reasonable target for 2030, and did not support 

significantly stricter emission performance levels. 

Comment 5: Commenters stated that the CPP will have the effect of locking in natural gas 

infrastructure at the expense of RE generation. 

Response 5: The EPA disagrees with this comment. The final rule phases in the BSER goal 

rates over the interim compliance period that does not require significant near-term infrastructure 

development. 

The following are summaries of the specific comments under this comment: 

Commenters stated several recent studies have raised new questions about whether natural gas 

can form the cornerstone of a carbon-emissions reduction strategy. In October, the Joint Global 

Change Research Institute's collaboration between the Department of Energy's Pacific Northwest 

National Laboratory and the University of Maryland published the results of work completed by 

five separate research teams from the United States, Australia, Austria, Germany, and Italy, the 

commenters said. These teams independently concluded that abundant natural gas use displaces 

not only higher carbon coal-fired generation but also generation from renewable sources and 

nuclear power, the commenters added. Commenters stated that as a result, the abundance of 

natural gas from unconventional sources could substantially change the global energy system 

over the decades ahead without producing commensurate changes in emissions or climate 

forcing. 

Similarly, commenters added, this September, researchers at the University of California, Irvine, 

published a study that concluded that abundant natural gas supplies could slow the process of decarbonization by delaying the deployment of renewable energy technologies unless the U.S. 

government enacts strong limits on greenhouse gas emissions or policies to drive electricity 

generation that comes from renewable sources. Commenters stated that in April, researchers at 

Duke University concluded that natural gas can help reduce greenhouse gas emissions but will 

not offer the significant pollution reductions needed to change the global emissions trajectory. In 

this context, the commenters asserted it is important to examine whether the CPP encourages 

states to move quickly enough to adopt renewable energy and energy-efficiency technologies. It 

is also necessary to look at the extent to which other state and Federal policies may be needed to 

incentivize the deployment of these technologies, the commenters expressed. 

Commenters also suggested that the CPP could accelerate the "lock-in" of large amounts of new 

natural gas generation, particularly in some regions, while generally delaying the deployment of 

tomorrow's cleaner and cheaper renewable energy and emerging competitive distributed energy 

resources. Commenters warned that this could result in the overbuilding of new natural gas 

plants, which would reduce the incentive to add new renewable generation capacity to the grid, 

locking out energy resources that are truly clean. 

This is just one company's perspective on the EPA's CPP, commenters said, but it is an 

interesting and important one to consider, given the need to rapidly deploy zero-carbon 
279 

technologies to mitigate climate change and avoid all unnecessary commitment to new fossilfuel-fired infrastructure. 

Comment 6: Commenters stated that the EPA used unrealistically low RE annual growth 

estimates to develop the RE goals. 

Response 6: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. The final building block 3 methodology is described in detail in 

V.E.6 of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters asserted that the rule incorporates unrealistically low estimates both for the annual 

rate of growth in renewable generation, and in the renewable generation target maxima. In recent 

years renewable generation technologies - particularly wind turbines and solar photovoltaic 

panels - have been deployed at accelerating rates as prices for these technologies have declined, 

the commenters said. As is noted in the preamble to the Proposed Rule, for several states the 

proposed renewable generation target percentage for 2030 is set below the percentage of 

generation attributable to renewable generation in those states in 2012. In addition, the 

commenters noted that for 17 states the Proposed Rule sets renewable generation targets for 2030 

at a level that is lower than that required under state law. Irrespective of whether the EPA adopts 

the regional approach or the alternative, state-by-state approach, the commenters stated they do 

not believe there is a rational basis for assuming that renewable generation in any state will 

comprise a smaller percentage of the total generation mix in any future year than it did in 2012. 

Accordingly, the commenters asserted that the EPA should establish a "floor" for the renewable 

generation targets at the higher of the percentage of generation attributable to renewable sources 

in the relevant state in 2012, or the percentage required in 2030 under the relevant state's laws. 

Comment 7: Commenters stated that the EPA’s proposed RE goals are not pushing states 

toward an unprecedented level of RE development, but rather toward the level of RE generation 

that grid operators should already be forecasting and planning for. 

Response 7: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. The final building block 3 methodology is described in detail in 

V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that the EPA notes in the preamble to the proposed rule that as coal-fired 

plants retire, current power sector economics suggest that they will likely be replaced with new 

renewable projects, energy efficiency savings, and combined cycle gas generation. Commenters 

stated most of these new lower emitting electricity sources currently have much lower 
280 

construction and operating costs than coal-fired EGUs, and this trend is also likely to continue in 

the coming years. As a result of these cost disparities, EIA's latest Annual Energy Outlook 

forecasts only 2.5 GW of additional planned coal-fired generating capacity through 2040, with 

nearly 90 percent of this capacity consisting of projects that are already under way, the 

commenters said. Similarly, the International Energy Agency ("IEA") World Energy Outlook 

2013 predicts that over three-quarters of the capacity replacements for retired units in the U.S. 

will come from wind, solar, or NGCC units, according to the commenters. In addition, the 

commenters said that EIA also expects generation from renewables to be higher than was 

estimated in 2013 across most of the projection period, with renewable sources accounting for 

almost a third of the growth in generation resources from 2012 to 2040 as they become more 

cost-competitive with other fuels. Indeed, the commenters indicated that EIA projects that 

renewables will remain the fastest-growing source of electric generation through 2040. 

Commenters said that in sum, the shift in the electricity generating sector from coal to loweremitting resources has continued at a rapid pace in recent years, and forecasts of fuel costs, 

capital costs, and other power sector trends continue to indicate that conventional coal-fired 

power plants will represent a shrinking percentage of generation over the foreseeable future. In 

this sense, the commenters asserted the CPP largely reflects changes that are already happening 

in the electric sector, as do the individual state targets included in the proposal. For instance, the

commenters noted that Washington's emission target for 2030 is 215 lbs CO2/MWh - ostensibly, 

a very low number-but this simply represents the fact that all but one of Washington's coal plants 

have already retired, with the remaining facility announced for retirement. Commenters stated 

the EPA's proposal will therefore advance the pace at which the electric sector is changing, but 

will not fundamentally alter the direct of that change. 

Commenters indicated that one of NERC's two main arguments challenging the EPA's 

expectations for build-out of renewable power facilities is that the EPA's RPS-based formula 

overestimates states' ability to build renewable generation. While the commenters said NERC is 

correct that the use of existing RPSs to establish renewables obligations does not perfectly 

correspond to states' actual capacity to install wind and solar plants, the commenters asserted 

NERC understates the potential for renewable generation build-out, thus artificially lowering 

states' renewables obligations. In fact, EPA's RPS-based Building Block 3 target barely exceeds 

the "business as usual" forecasts for renewable energy development by 2030, the commenters 

said. Thus, the commenters concluded the EPA's target is not pushing states toward an 

unprecedented level of renewable energy development, but rather toward the level of renewable 

energy generation that grid operators should already be forecasting and planning for. 

Commenters stated 29 states (including the District of Columbia) have passed mandatory RPS 

goals, and another 7 states have voluntary goals. One study looking at states' compliance with 

their own goals found that 21 of 24 states for which data was available had virtually achieved or 

exceeded their intermediate RPS goals, the commenters noted. (A few states have even exceeded 

their ultimate RPS goals, the commenters said.) 

Commenters continued and stated that critically, states have historically found it easier to comply 

with RPS goals over time as they develop in-state markets and build local expertise in siting and 

connecting renewable electricity. Commenters stated this trend should only continue as 

renewable energy becomes more and more affordable: in 2013, average prices for utility-scale 

wind and solar power purchase agreements dropped to all-time lows of $21 and $50 per MWh 
281 

respectively, compared to average whole sale power prices of between $22 and $55 overall. 

Similarly, the commenters said that the EIA's estimate of the total levelized cost of energy by 

resource, including installation and other costs, predicts that wind will be over $15 cheaper than 

coal per MWh by 2019, and $8 cheaper than conventional natural gas by 2040. Commenters 

cited to a projection done by Lazard Ltd., a financial advisory and asset management firm, who 

has concluded that already today wind energy is at least cost-competitive with, if not cheaper 

than, both natural gas and coal facilities, with solar not far behind (within $10/MWh of both gas 

and coal). Commenters said the consensus expectation in all of these reports is that renewable 

energy prices will continue to drop as renewable technologies continue to be mainstreamed. 

Commenters stated that in short, the market for renewable energy has surged in a way that was 

not fully anticipated when states set their RPS goals, so they are no longer an accurate reflection 

of what can be accomplished in individual states. 

Commenters stated that even ignoring the growing strength and competitiveness of the 

renewable generation market, the EPA should not be overly concerned about replacing retiring 

coal plants because regions with excess (largely cleaner) electricity production will likely end up 

transmitting that electricity to regions that find themselves less able to replace retiring dirty 

power plants (see transmission discussion below). Moreover, no state is required to achieve the 

level of renewable energy development that the EPA used in setting its target states have 

flexibility to use a combination of any of the building blocks as compliance measures, the 

commenters noted. The EPA is also not requiring RE to be built within a state for that state to 

take credit under the CPP, the commenters pointed out, and highlighted that this means that 

RE can be built wherever it is most economic and there is available transmission capacity. 

Comment 8: The Final Rule must adequately value and incentivize renewable generation and 

energy efficiency. 

Response 8: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. The final building block 3 methodology is described in detail in 

V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated, the least cost pathway to compliance with the rule will be increased 

deployment of renewable generation and energy efficiency, including demand response. 

Commenters stated Building Blocks 3 and 4 are critical to the EPA's approach under either 

alternate structure, in order to properly incentivize development and use of renewable energy 

sources and energy efficiency resources. 

However, commenters said that the EPA's analysis of wind and solar generation for BB3 (using 

either alternate proposed framework) dramatically overstates the current costs associated with 

these resources and is overly conservative in estimating states ability to increase their renewable 

portfolios. Commenters expressed that the final rule must reflect current cost data (and 

deployment rate data) for renewable generation and more aggressive targets on a state-by-state 

basis. 
282 

Commenters supported the approach put forth by the EPA regarding crediting states under 

building block 3. Commenters stated in order to aid state compliance with section 111(d) 

obligations, it would be most efficient and equitable for the EPA to model its approach after the 

best practices of existing state RPSs. Relying upon existing best practices and infrastructure will 

aid states in efficiently meeting their obligations, while making double counting structurally 

impossible, thereby maintaining the integrity of the emissions reductions which will be achieved, 

the commenters said. 

Comment 9: The EPA has underestimated RE opportunities 

Response 9: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. The final building block 3 methodology is described in detail in 

V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Some commenters asserted the renewable energy goals in the final rule should better account for 

the full range of renewable energy opportunities in states and be more stringent 

Commenters expressed that nationwide, the RPS-based approach and the Alternative RE 

Approach result in a very similar level of renewable generation. However, commenters stated 

that neither approach fully capture the past and likely future dynamic growth in RE, including 

the dramatic decrease in costs. 

For all of these reasons, commenters asserted the EPA underestimated the demand and the 

opportunity presented by renewable energy over the next 10-20 years. Accordingly, the 

commenters argued, the renewable energy goals in the final rule should better account for the full 

range of renewable energy opportunities in states and, at the least, should certainly be no less 

stringent than the additions of generation already required. 

Commenters expressed that it is pleased the EPA has included "outside the fence" compliance 

options such as energy efficiency and RE in its CPP. However, the commenters asserted the CPP 

has underestimated the potential of RE as a compliance strategy for states. To seize the 

opportunity renewable energy presents, the commenters said that the EPA should strengthen 

state RE targets appropriately. Commenters stated renewable energy technology is no longer 

"five years away" it is here, cheap, abundant, and available for use immediately. A recent UCS 

report found that seven states are already producing more renewable energy than the 2030 targets 

the EPA set for them, and an additional 17 states have laws in place that will require them to 

develop more renewable energy than the EPA mandates, the commenters added. Fixing state 

renewable energy targets to account for progress already made, and future progress already 

baked into state law, is just the first step, the commenters noted. 

Commenters continued by stating that renewable energy creates jobs that cannot be shipped 

overseas, ensures price stability as it generates power without having to pay for fuel year after 

year. Best of all, the commenters said, it generates power without releasing greenhouse gases or 
283 

other pollution. Commenters expressed that it is the right choice for our wallets, for our climate, 

for our health and for the long-term prosperity and competitiveness of our country-and for 

leading the clean carbon economy globally. 

Commenters asserted that the EPA proposal can and should be strengthened to better and more 

realistically recognize the tremendous potential for renewable energy and energy conservation in 

cutting carbon emissions. 

Commenters asserted that Building Block 3 can and should provide more ambitious emission 

reduction estimates from renewables. For example, commenters stated the rule should be revised 

to reflect recalculating GHG reductions from renewables to include their role in reducing coalfired generation. 

Comment 10: Some commenters questioned the methodology of using a regional approach and 

believe the EPA should revise the RE targets under Building Block 3. 

Response 10: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated that for RE, the Proposal sets targets based on regional averages of existing 

state policies, then applies the 2020 averages as state targets for 2030. In its comments on the 

CPP, the commenters indicated that AEE lists several limitations of this methodology, including 

(1) that it uses state RPS levels which may not fully capture the levels of cost-effective RE 

potential, (and in the unique case of New York, the current RPS will be expired by then, 

although it is likely to be increased and extended); (2) it only expects a state to meet a regional 

average rate of RE generation, even if the state's renewable generation is already above that 

average, (3) it assumes no RE growth between 2012 and 2017, even though deployment 

continues to rise, (4) it expects each state to achieve by 2030 only the average RE targets set for 

2020. For all these reasons, the commenters said that the primary methodology represents a 

significant understatement of the RE potential available to states for carbon emissions 

reductions, and the resulting targets are overly conservative. 

Commenters said that the EPA's proposed renewables approach presents many challenges that 

will be difficult to resolve in the final rule. Commenters stated the EPA's methodology fails to 

sufficiently recognize early action for states that have already supported renewables 

independently or through RES programs. Commenters stated complicated issues, such as 

accounting for out-of-state renewables, would be better addressed as part of the state plan 

processes. A case-by-case evaluation of the potential for renewables for each state should be 

included in the final guidelines, the commenters also said. Commenters added that the EPA 

should allow states to provide input to this assessment for the final goal computation, based on 

data and specific circumstances applicable to individual affected utility companies. 
284 

Commenters said that under the first approach, EPA's assessment of the potential for RE to 

contribute to CO2 emissions targets is based on several incorrect assumptions. Commenters 

stated EPA's approach is arbitrary and unreasonable for at least three reasons. First, the 

commenters stated, EPA ignored the details of state RPS that would limit the overall RE 

potential calculated by EPA. Second, the commenters added, EPA arbitrarily applied regional 

averages based on state RPS to states without renewable targets, ignoring the different resource 

potentials in each state. Third, commenters concluded, EPA ignores costs and other technical 

limitations that reduce the potential for RE growth. 

Commenters asserted that the EPA's approach to setting the RE goals for each state by dividing 

the states into contiguous regions is illogical and inequitable. For example, the commenters said 

that according to a DOE study (cited below) relied on by the EPA, Arizona has 5.8 percent of the 

total national RE potential, but Arizona has a RE goal based on only 3.9 percent of its 2012 

generation. By contrast, the commenters indicated that West Virginia, which has 0.07 percent of 

the national RE potential (1.2 percent of Arizona's) has an RE goal based on 14 percent of its 

2012 generation, almost 4 times as great as Arizona's. 

Commenters stated the EPA contends that the state RPS requirements reflect expert assessments 

of RE technical and economic potential that can be cost-effectively developed for that state's 

electricity consumers. Therefore, the EPA must rely solely on those estimates for each state that 

has an RPS as being the best estimate of its RE potential, the commenters said. For example, the 

commenters stated, if Pennsylvania's expert assessment is that it can achieve an 8 percent RE 

level by 2020, and Delaware determines that it can achieve a 22 percent RE level, it is illogical 

for the EPA to impose an average regional value of 16 percent on both states without showing 

that their expert assessments are in error. 

Commenters said that the EPA's RE calculations are unrealistic. Commenters said that in the 

CPP, the EPA assumes that qualifying RE generation will increase from 213 TWh/year in 2012 

to 281 TWh/year by 2020 and 523 TWh/year by 2030.96 This substantial increase far exceeds 

the EIA's RE forecast for growth from 202 TWh/year in 2012 to 275 TWh/year in 2020 to 317 

TWh/year in 2030,97 and is also much greater than the projection of 356 TWh/year by 2030 

included in EPA's own RIA, the commenters said. Commenters similarly explained that in the 

CPP, the EPA assumes qualifying RE generation will increase from 213 TWh/year in 2012 to 

281 TWh/year by 2020, and 523 TWh/year by 2030. This substantial increase far exceeds EIA's 

RE forecast for growth from 202 TWh/year in 2012, to 275 TWh/year in 2020, to 317 TWh/year 

in 2030, and is much greater than the projection of 356 TWh/year by 2030 included in EPA's 

own Regulatory Impacts Assessment, the commenters said. 

Commenters said that as proposed, the EPA's RE goals do not allow the inclusion of new 

biomass, new landfill gas, new coal-bed methane and new hydro as options in the portfolio 

approach. Commenters said that the EPA's RE calculations are not an accurate representation of 

the existing RE options because these sources are not included. Existing RPS at the state level, 

on which the EPA based its RE goals, include these options, commenters said. Commenters said 

that the EPA must include all these RE options in the portfolio approach as states employ more 

than just wind and solar in their RPSs. Commenters said that it should also be allowed to count 

new and existing combustion turbines in the portfolio compliance plans as well as its landfill gas 

to energy projects. 
285 

Commenters said that when calculating RE potential, the EPA relied in part on a regional RE 

growth factor calculated using the RPS of states within that region, which was then applied to 

each state in that region, whether that state had an RPS in place or not. Commenters stated this 

has the potential to make RE targets very aggressive in some states that have less RE potential, 

as well as no enforceability, and could result in unattainable RE targets in those states. For 

instance, the commenters indicated that in the proposed rule, Indiana is a member of the North 

Central region, along with eight other states in the upper Midwest. Of these nine states, three 

(Indiana, North Dakota, and South Dakota) have non-binding renewable portfolio goals, while 

the rest have binding RPS, the commenters added. Therefore, the commenters noted, the regional 

growth rate applied to Indiana was largely based on the renewable potential of other states. 

Further, the commenters added that within the North Central region, states like North Dakota, 

South Dakota, and Minnesota have substantially larger wind speed potential than Indiana, as 

shown in the NREL's Annual Average Wind Speed map, yet these states are still grouped 

together in the same region for RE potential. However, the commenters said that the RE potential 

from wind speed is very different. At 80 meters high, around half of Indiana has an annual 

average wind speed of 6.5 meters per second (m/s), whereas the majority of areas within both 

North and South Dakota show an annual average wind speed of 8.5 m/s, according to the 

commenters. Because these states are grouped together for part of the RE calculation, it results in 

a higher calculated RE target for Indiana than is actually achievable, which in turn makes the 

state CO2/MWh goal rate lower than what is actually achievable, the commenters asserted. 

Further, each state with an RPS in place defines elements within their programs very differently, 

the commenters also said. Commenters noted that according to the EIA's Annual Energy Outlook 

2013, "Under [RPS], each state determines its own levels of renewable generation, eligible 

technologies, and noncompliance penalties." Therefore, commenters stated that using a regional 

approach, without taking into account the considerations detailed above that relies in part on an 

average of RPS goals within those regions in order to calculate RE targets for states, is 

unreasonable and untenable. 

Commenters stated the EPA's North Central grouping regard to geography and renewable energy 

potential can be classified as unusual at best. States such as Minnesota, North Dakota, and South 

Dakota have vast potential for wind energy development while mid-western states such as 

Indiana, Illinois and Michigan have limited potential for the same resource, the commenters said. 

Commenters stated to compare Indiana to the Dakotas would require the Dakotas to limit the 

value of their potential or make potentially unrealistic demands on Indiana. Unlike most of the 

other states in the EPA's North Central grouping, Indiana's economy relies heavily on energyintensive heavy industry which requires low energy costs and reliable power sources to survive, 

the commenters said. Commenters stated that examining the RPS standards for the states 

contained in EPA's North Central grouping does not provide a reasonable basis for logical 

comparison. Commenters stated over 44% of the states contained in EPA's North Central 

grouping will have an RPS which expires in 2015 and one state has a megawatt goal rather than 

an RPS. The remaining 44% of the states have RPS targets which extend into 2025 (except 

Missouri, which expires in 2021), the commenters said. Also, commenters stated, those states 

which have RPS targets expiring in 2015 have target goals of 10%, while the states with RPS 

goals extending beyond 2020 have RPS goals between 15% and 25% (except Indiana which has 

set a voluntary goal of 10%). 
286 

Commenters said that should the EPA move forward with this rulemaking, to create a more 

equitable and appropriate evaluation of regional renewable potential and allow for the 

establishment of realistic regional goals, the EPA must re-evaluate the existing groups as they 

now stand and re-align them. 

Commenters indicated that basing renewable generation targets on regional benchmarks leads to 

states being expected to make significantly varying investments in new projects. Three states, 

Iowa, Minnesota, and South Dakota, have already met their renewables targets in terms of 

percentage of total generation, the commenters pointed out. Some states that have already made 

major investments in renewable generation, such as California and Colorado, still have a 

relatively long way to go to hit their projections, the commenters noted. In several cases, the 

commenters explained that neighboring states are projected to have significantly different levels 

of renewable generation in 2030 despite similar starting points. For example, West Virginia has a 

2030 projection of 12.5 percent, from a starting point of 1.8 percent renewable generation, the 

commenters noted and neighboring Kentucky is starting from 0.4 percent, but its 2030 target is 

only 1.9 percent. It is difficult to understand why neighboring states would be expected to 

achieve renewable percentages that differ by a factor of over six, the commenters questioned. 

Comment 11: Commenters stated only incremental growth in renewable energy should be 

considered eligible in meeting goals. 

Response 11: The information provided in this comment were valuable in finalizing the building 

block 3 methodology, particularly in expressing building block 3 target generation in terms of 

incremental RE. The final methodology is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA proposes excluding existing hydropower resources from 

consideration under its BB3 proposal while only including incremental hydropower resources 

prospectively. Commenters agreed with this approach insofar as only generation from 

incrementally new renewable resources can result in a net decrease of CO2 emissions from the 

baseline. Commenters noted that crediting existing renewable resources that are part of the 

baseline with lowering CO2 emissions above the baseline is a fallacy; this can only result from 

incremental generation. Commenters stated this inconsistency suggests that the goals for BB3 

should be examined and adjusted accordingly. Commenters stated only incremental growth in 

renewable energy, from the baseline year forward, should be considered eligible in meeting the 

CAA 111(d) goals. Commenters asserted that including existing renewable energy that is already 

"baked in" to the baseline does absolutely nothing towards reducing CO2 emissions below the 

baseline. 

Comment 12: Commenters recommended that the EPA consider specific resource profile and 

capabilities of each state in determining RE potentials 
287 

Response 12: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. The BSER is 

forward-looking in identifying cost-effective opportunities for emission reductions from 2012; 

however, the cost and availability of these emission reduction opportunities is the result of many 

factors, including previous actions. The final building block 3 methodology is described in detail 

in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA does not adequately justify the grouping of the states into given 

regions, other than to aver that states within each region exhibit similar profiles of RE potential 

or have similar levels of renewable resources, as inferred from a DOE study. However, 

Commenters stated, the DOE study is of technical RE potential, and the executive summary of 

the study states that "(t)he estimates do not consider (in most cases) economic or market 

constraints, and therefore do not represent a level of renewable generation that might actually be 

deployed." Even were the technical potentials to be reliable indicators of relative commercial RE 

potential, they do not support the regional RE goals that the EPA calculates. For example, 

commenters stated, the East Central region has only 2.4 percent of the national RE potential in 

the DOE study, but has an RE goal of 16 percent of generation, while the Southeast region, 

which has 23 percent of the national technical RE potential, ten times that of the East Central 

Region, has an RE goal of 10 percent, or one-third less. 

Commenters further indicated that the EPA determined state RE goals by setting regional goals 

and then calculating a RE growth rate for the region. It then applied that regional RE growth rate 

to each state's 2012 actual RE (MWh) from 2017 through 2029, the commenters added who 

further said that if a state reached the regional target before 2029, it made no further increases; 

this happened for 20 states. Commenters stated that if a state fell short of the regional target by 

2029, the lower value became its target; this happened for 24 states. As a result of these two 

factors, the final RE goals for each of the regions are less than the regional target originally 

derived to calculate the growth rate, the commenters said. Commenters stated the differences are 

large and highly variable among the regions, ranging from 9 percent below the putative regional 

goal for the East Central Region to 40 percent below the regional goal for the North Central 

region. Commenters stated this is favorable to a state like Arizona which had little RE in 2012 

and is in the West region, which has only a 6 percent regional RE growth rate. Commenters said 

that as a result, the RE level used to calculate Arizona's final overall emission rate goal is only 

3.9 percent of its 2012 generation, compared to a nominal regional goal of 21 percent. 

Commenters stated this is highly inequitable because, according to the DOE study relied on by 

the EPA, Arizona has 5.8 percent of the total national RE potential. By contrast, West Virginia, 

which has 0.07 percent of the national RE potential (1.2 percent of Arizona's potential) has an 

RE goal based on 14 percent of its 2012 generation, almost four times as great as Arizona's, the 

commenters added. 

Commenters argued that the overarching logic the EPA employed to derive RE goals is 

inconsistent with that used to derive the EE goals. For EE, the commenters indicated that the 

EPA based the goals on the 11 most aggressive state EE targets in the U.S and for RE, the EPA 
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based the goals on average RE targets by region. Commenters stated if existing state practices 

are considered indicators of "reasonableness" then the same approach should be used for both EE 

and RE. However, neither the regional approach used to set the RE goals nor the "11 best" 

approach used to set the EE goals adequately accounts for the unique situation in each state that 

determines its EE and RE potential, the commenters said. Commenters asserted the EPA should 

have done state-specific assessments of EE and RE to reflect these differences. 

Commenters expressed that because of EPA's methodology, the final RE goals for each region 

are less than the original RE goals the EPA calculated by averaging state RPS goals. 

Commenters stated the differences are large and highly variable among the regions, ranging from 

9 percent below the original regional goal for the East Central Region to 40 percent below the 

regional goal for the North Central region. Commenters stated this results again from a failure to 

determine RE potentials on a state by state basis. 

Commenters questioned the EPA's goals which are based on compound annual increases in RE 

of more than 10 percent in 18 states, and 16 percent or more in seven contiguous states in the 

East Central region (DE, NJ, PA, MD, WV, VA, and OH) and asked if these increases are 

reasonable. Commenters also asked if the existing grid could reliably handle that much 

intermittent electricity flow, particularly if the new RE generation sources are not near existing 

fossil generation units and distribution lines. Commenters stated in a number of states, biomass, 

which can be used as an on-demand resource, comprises a large percentage of the current 

RE portfolio (e.g., in Virginia is 100 percent). If growth in a particular RE source, such as 

biomass, is limited that makes the relative amount of intermittent renewable growth even larger 

than the rates cited above, the commenters noted. 

Commenters indicated that the EPA has asked for comment on how far back in time it should 

consider CO2 reductions that would be considered as fulfilling the targets mandated in the 

proposed Existing Source NSPS. The EPA is asking for input for crediting such programs before 

the 2020 glide path and even before the baseline of 2012, the commenters said, but added that 

clearly the EPA has not, but needs to account for the RE progress that has been made in Texas. 

Commenters suggested that the question of timing and credit should be asked another way and 

for Texas the question should be: given the RE capacity increases that have occurred in Texas 

what is the justification for requiring more; this is the question EPA must answer, the 

commenters said. Further, commenters said that the CAA requires the EPA to set BSER based 

on a "degree of emission limitation that is achievable" "taking into account the cost of achieving 

such reduction and any non-air quality health and environmental impact and energy 

requirements." Commenters stated the foregoing establishes that the EPA has not determined 

what is achievable in Texas or for other states in the region. Commenters stated that due to the 

differences in RE potential from state to state the determination of a target should be based on 

the what is achievable for each state taking into account cost and energy requirements as set forth 

in the CAA. Commenters asked that the Agency obtain information from the states, through a 

NODA or otherwise, and re-publish targets on a state-specific basis. 

Commenters asserted that there are fundamental errors in how the EPA developed Building 

Block 3 and applied it to Pennsylvania. Commenters stated the EPA's projections of RE savings 
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under Building Block 3 for Pennsylvania are based on an inaccurate calculation of regional RE 

generation and bear little resemblance to the state's true renewable resource potential. 

Commenters stated the formula used to calculate each state's RE goals is unsupported and 

misinterprets the nature of state RPS mandates. First, the EPA assumes without basis that current 

state RPS mandates will be maintained at existing ramp rates rather than be revised (upward or 

downward) by state legislatures or public commissions, the commenters said. More importantly, 

the commenters asserted the EPA confused the focal point of regulation for state RPSs. 

Commenters stated that in most states, including Pennsylvania, the state RPS sets mandatory 

minimum RE targets for load-serving entities as a percentage of their total retail sales. Most state 

RPSs do not provide mandatory minimum targets for RE generation, as the EPA incorrectly 

assumes, the commenters said. 

Commenters stated that this distinction is important. A generation-based RPS target, such as that 

contemplated in Building Block 3, would effectively require a state to ensure the generation or 

purchase of a target percentage of RE at the wholesale level (as measured against its total 

generation and purchased power portfolio), the commenters said. But in reality, the commenters 

stated, a state RPS requires only that load-serving entities (i.e. public utilities selling and 

distributing power to retail customers) ensure that the target percentage mandate of RE capacity 

is delivered at the retail level (as measured against its total amount of MWhs of energy sold). 

Thus, the commenters asserted there is a mismatch between how the EPA structured Building 

Block 3 and how most state RPSs actually work. 

While EPA acknowledges that many state RPSs allow RE and RECs generated in other states to 

be purchased and used by in-state load-serving entities for compliance, commenters asserted the 

Agency fails to adequately account for such implications in quantifying its state RE goals. 

Indeed, the EPA provides no meaningful guidance on whether RE exporting or importing states 

should count out-of-state bundled and unbundled RE toward achieving their emission targets, the 

commenters added. There are many reasons, including natural resource availability and 

geography, why states have taken different approaches to RE generation, but the primary reasons 

are cost and reliability concerns, the commenters explained. 

The EPA's failure to account for the variety of state RPS approaches and the interplay of out-ofstate renewables ultimately causes EPA to overstate the RE potential of states like Pennsylvania, 

the commenters said. In particular, the commenters stated that states with high RE generation 

will be able to claim such generation for purposes of their state plans, even though a neighboring 

state like Pennsylvania, whose load-serving entities actually buy the RE and RECs from these 

states, cannot claim such generation for purposes of meeting its state emission goal. Commenters 

stated such circumstances fail to support a showing that Pennsylvania can actually meet its RE 

targets under Building Block 3. 

Specifically, under the Proposed Rule, Pennsylvania is included in a region for calculation of 

available RE that includes three coastal states: Maryland, New Jersey and Delaware, the 

commenters said. These coastal states have the ability to exploit offshore wind resources, while 

Pennsylvania as a "land locked" state cannot, the commenters said. Moreover, the region 

includes the District of Columbia, which, however, does not have any electric generation within 

its boundaries, the commenters added. Nonetheless, the EPA's methodology considers a purchase 
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requirement of 20% for imported RE in the District as part of the basis of calculating what RE is 

available in Pennsylvania, the commenters noted. 

In addition, the commenters said that the EPA has included two states in the region that do not 

have any current RE policies: Virginia and West Virginia. But instead of using the actual RPS 

level in each state (0%) for calculating the average RE available for all states, the EPA simply 

excludes these states for purposes of calculating the average RE available for all the states in the 

region, the commenters added. Commenters said if the EPA instead excluded these "zero RPS" 

states, the RE target for the region would decrease from 15.8% to 11.9%. 

Commenters stated the proposed rule's various flaws in its calculation of RE emission reductions 

have significant impact on Pennsylvania. Commenters said the EPA calculated Pennsylvania's 

RE based on total electric generation in the State and did not account for the fact that 

Pennsylvania supplies a number of other states with electricity. Commenters presented a chart, 

which depicts that Pennsylvania is a net exporter of electricity. Commenters stated the EPA 

projects that Pennsylvania will export approximately 42% of its generation, a rate exceeded by 

only 4 other states. This results in an inflated calculation of Pennsylvania's available RE, the 

commenters said. Commenters stated the EPA's projected 15.8% generation-based RE target is 

the equivalent of a 25.1% sales-based standard-an especially aggressive standard considering the 

state's limited renewable options. Other factors further inflate the EPA's projection of RE savings 

achievable in Pennsylvania, the commenters said, e.g., the EPA's RE calculations fail to account 

for load reductions contemplated under Building Block 4 (demand-side energy efficiency 

savings). Commenters stated this omission effectively raises the EPA's proposed RE savings 

target another 3%. 

Commenters concluded by stating that in short, the EPA's formula and state plan methodology 

eliminate a low capacity RE state's ability to claim CO2 emissions displacement from out-ofstate RE, yet impose an inflated RPS target on such states based on such generation. This leaves 

few alternatives for meeting the CO2 emission reductions achievable through increased RE 

generation, the commenters expressed. The EPA is essentially mandating an inflated RE target 

reflective of a high RE capacity state on low RE capacity states, irrespective of how inefficient 

or exorbitantly costly it would be for that state to build additional RE, and without any regard for 

the wide variation in state generation fleets and energy characteristics, the commenters said. 

Commenters stated with regard to Pennsylvania, this effectively serves to double the state's 

current 8% RPS to 16% (if the state decides to file a state plan on its own). Commenters asserted 

that such an unprecedented jump is unsupported in the record and ultimately forces ratepayers to 

bear the increased costs. Thus, commenters stated, should the EPA proceed with its analysis 

under Building Block 3, it must revise its calculations and emission targets to ensure that all 

relevant factors are accounted for such that projected savings from renewable generation can 

actually be achieved. More specifically, commenters asserted the EPA should adopt an alternate 

state-specific approach in which threshold calculations of baseline RE and RE potential are 

measured against the specific resource profile and capabilities of each state. 

Commenters said that the EPA has established target levels of RE goals by examining current 

mandatory state renewable portfolio standards (RPS). In the plan, the country (excluding Alaska 

and Hawaii) was divided into six regions, the commenters explained. Commenters added eight 

states constitute the southeast region, yet there is only one state (North Carolina) in that group 
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with a state mandatory RPS. Commenters stated the wholesale acceptance of this state's RPS and 

applying it to the RE goals of each state in the southeast region, without consideration of specific 

components of North Carolina's RPS or the other seven states renewable resource environment, 

yield untenable RE goals. It is no wonder that the CPP's non-hydro RE goals of 281 Twh/year by 

2020 (from a base of 213 Twh/year in 2012) and 523 Twh/year by 2030 far exceed the EIA's 

forecast of nonrenewable energy of 275 Twh/year (2020) and 317 Twh/year (2030) in the EIA's 

Annual Energy Outlook 2013, the commenters noted. In fact, the commenters stated that the 

CPP's untenable RE goals far outweigh the EPA's own forecast of non-hydro RE of 356 

Twh/year in 2030 as prepared in the June 2014 RIA. 

Commenters proposed the following recommendations to the EPA as EPA considers all of the 

comments received and revises the proposed rule accordingly. Specifically, commenters 

recommended that the EPA fix the regional averaging assumptions in the development of state 

RE goals in the CPP and develop state-specific goals based on state-specific renewable 

resources. 

Commenters recommended that the EPA use the RE goal established in a state's REPS, if one 

has been adopted, rather than make arbitrary adjustments to such REPS in the setting of a state's 

goal. For those states that have not adopted an REPS, the commenters recommended that the 

EPA allow states to choose between the RE goal as proposed or the alternative RE goal as 

outlined in the proposal. The states can determine which calculation approach is most 

appropriate for their given situation, the commenters suggested. 

Commenters indicated that Michigan is poised to meet its 2015 RE target of 10 percent of total 

electricity sales provided from RE sources. Commenters stated Michigan will be evaluating 

opportunities for increased utilization of RE sources as a component of its section 111(d) 

compliance plan. Incentives to pursue a renewable portfolio standard that go beyond 10 percent 

for Michigan would be strengthened if the EPA provides the opportunity for early reduction 

credits (as discussed in Section II.D), the commenters reasoned, especially around RE generation 

installed between the baseline year (e.g. 2012) and 2020. In addition, commenters asserted the 

EPA should allow states to set state-specific renewable targets that are based on qualifying RE as 

it is defined in that state. Commenters said states should be given the flexibility to utilize a 

number of options to demonstrate compliance with the RE standards that are included in a 111(d) 

compliance plan and not just rely on RE certificates (RECs) to demonstrate compliance. 

Commenters said that the EPA is proposing to set a "best practices" scenario based on RPS 

already established by a "majority" of states acknowledging "renewable resource development 

potential varies by regions." [79 FR 34866] Commenters stated the EPA attempts to define 

BSER for this building block without using national averages and accounting for regional 

variation by comparing each state to a set of neighbors rather than to a single national standard. 

[79 FR 34867] Commenters asserted it not only varies by region, but by state, and the only 

appropriate analysis method would be to take into consideration what is technically feasible and 

cost-effective within individual states. 

Commenters asserted that the EPA did not adequately examine or characterize existing state RPS 

programs prior to regionalizing and averaging to determine state goals. Commenters indicated 

that it understands that RE goals are based on a percentage of total in-state generation. Thus, in 
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2012, Ohio's total net generation was 129,745,731 MW-h, and the 2020 RE target for Ohio is 

0.025%, or 3,286,937 MWh, commenters said, which are reflected in the GHG Abatement 

Measures TSD. However, Ohio's existing RPSs call for an incremental percentage of total retail 

sales occurring in the state, inclusive of out of state generation, the commenters added. This 

quantification varies amongst state RPSs, based on what each particular state felt was technically 

and economically feasible at the time with consideration given to the best quantification method, 

the commenters added. In combination with what the commenters asserted is an incorrect 

approach in setting renewable growth rates based on regional averages, differences in RE 

portfolios amongst the states call into question the validity, representativeness, and feasibility of 

the RE goals. 

Commenters continued stating that in a practical sense, it appears that the EPA compiled RPS 

targets with little regard for the variations between individual state RPS language and 

calculations. These variations provide the flexibility necessary for respective states to design 

RPS targets with the highest chance of success, the commenters said. Commenters presented 

examples of unique elements of Ohio's RPS, which include: providing the Ohio PUC with 

authority to classify any new technology as a qualifying RE resource; allowable non-compliance 

with the benchmark if the reasonably expected cost of electricity exceeds 3%; approvable 

adjustments to benchmarks due to availability of qualifying RE resources both instate and within 

the PJM interconnection; the Ohio PUC may amend the benchmarks if they are not reasonably 

achievable due to "regulatory, economic, or technological reasons" beyond reasonable control; 

banking of RE credits are allowed from year-to-year. 

Commenters added that the EPA has taken the targets and benchmarks from individual state RPS 

as a demonstration of RE potential, however, without consideration for state specific variables, 

the RE goal becomes more difficult to reach and more of a burden to Ohioans. To ignore these 

nuances embedded within state plans and force a one-size-fits-all approach is enacting arbitrary, 

capricious and inflexible mandates on states, the commenters asserted. 

Commenters said Block 3, regarding low-carbon generation, should be revised to better reflect 

the economic potential within each state, along the lines proposed by the USC, rather than being 

based on averages of state policies that reflect a variety of other considerations. Commenters said 

that the EPA's primary proposal for determining how much each State might reduce its carbon 

emissions through increased use of low-carbon generation technologies such as renewable 

generation resources is based on regional averages of RE standards adopted by the states. These 

standards are based on a variety of considerations other than the technical and economic 

potential for a state to generate power using these technologies and consequently a number of 

perverse results follow, the commenters indicated, such as states, including Michigan, being 

expected by the EPA to do less by 2030 than they have already done or already require to be 

done by some time earlier than 2030. 

Commenters explained that the EPA's alternate proposal bases its assessment of the potential 

contributions of renewable generation in proportion to the NREL's inventory of RE resources by 

state. However, commenters indicated that the pace at which RE resources can be deployed does 

not depend on the potential; rather the potential in a state speaks to the ultimate limits of 

renewable deployment in that state. Further, the commenters stated that the EPA proposes to 
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accept transfers of RE credits between states, making the availability of resources within a state 

even less relevant to the pace at which a state can increase its use of renewable power generation. 

Commenters therefore recommended that the final rule base Block 3 on the historical experience 

of RE deployment by exemplary states, much as the EPA has done in the draft rule with respect 

to energy efficiency in Block 4. The recent proposal by the UCS, "Strengthening the EPA's 

Clean Power Plan", provides an excellent example of this approach. UCS' proposal should be 

eminently achievable as it only proposes that the renewables block for Michigan be about 20% 

renewables as a proportion of load by 2030 and Governor Snyder's administration reported in 

2013 that 30% renewables by 2035 was technically and economically feasible without creating 

power reliability issues, the commenters concluded.

Commenters said that the EPA state emission rates in the East Central Region must be recalculated due to the passage of SB310 in Ohio just prior to the publication of the EPA's 

proposed 111(d) rule. Commenters indicated Ohio SB310 amended energy efficiency and 

alternative energy resource mandates (including renewable mandates) by imposing a two-year 

pause on energy efficiency, peak demand reduction and RE resource requirements. Commenters 

said it also eliminated both the RE resource in-state requirements and the advanced energy 

resource requirements, thereby reducing the former alternative energy resource mandate by half. 

Due to the timing of Ohio SB 310, the EPA did not reflect the impact of this new state law in the 

BSER Building Block #3 calculations for the East Central Region, the commenters noted and 

therefore said the EPA must recalculate state goals within the region based on Ohio's SB310. 

Commenters continued indicating that Ohio SB310 stated that "because the energy mandates in 

current law may be unrealistic and unattainable, it is the intent of the General Assembly to 

review all energy resources as part of its efforts to address energy pricing issues. Therefore, it is 

the intent of the General Assembly to enact legislation in the future, after taking into account the 

recommendations of the Energy Mandates Study Committee that will reduce the mandates in 

sections 4928.64 and 4928.66 of the Revised Code and provide greater transparency to electric 

customers on the costs of future energy mandates, if there are to be any." Therefore, commenters 

expressed that the EPA's final 111(d) rule should provide a mechanism for re-calculating state 

target rates following future Ohio legislation based on the recommendations of the Energy 

Mandates Study Committee. 

In developing the target RE generation levels, commenters indicated that the EPA calculated a 

hypothetical RES requirement for each region by averaging the RES requirement of each state 

that currently has an RES requirement within the region. Commenters added that the EPA 

recognizes state expertise in developing RE goals, thus justifying the use of these goals in 

calculating BSER goals, and cited the following from the GHG Abatement Measures TSD: 

"These state goals and requirements have been developed and implemented with technical 

assistance from state-level regulatory agencies and utility commissions such that they reflect 

expert assessments of RE technical and economic potential that can be cost-effectively 

developed for that state's electricity consumer" 

However, commenters said that the EPA chose to exclude that same expertise by the state of 

West Virginia simply because after an exhaustive vetting and legislative process, the state 
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determined that it could not support a mandatory RE goal. It was the state's informed decision, 

developed and implemented with technical assistance from state-level regulatory agencies, the 

utility commission, and interested public and private parties, no different from any other state 

that the EPA used in the calculation of a region's renewable potential, the commenters said. By 

excluding states like West Virginia that have determined their renewable mandate to be zero, 

whether through affirmative action or through a decision not to act on a legislative mandate, the 

commenters asserted the EPA disregards its own technical justification document. Commenters 

stated the EPA cannot and should not pick only those states that have concluded a specific 

outcome after study. Commenters thought the EPA should accept all states' expert assessment of 

RE technical and economic potential that can be cost-effectively developed for the state's 

electricity consumer-regardless of what conclusion that expertise leads to. Commenters said that 

to cherry pick a few states in order to produce a certain outcome undermines the credibility of 

EPA's technical support for this proposal, and stated either all states are experts or all states are 

not. Commenters stated that the EPA should recalculate the target RE generation levels under 

Building Block #3 by including every state in the calculation, incorporating states such as West 

Virginia as a zero since it imposes no RE mandate. 

Commenters said that the EPA's approach also assumes that renewable programs are emission 

reduction programs, but the vast majority include alternative compliance methods or "safety 

valves" that do not result in emission reductions. In fact, commenters pointed out that 

environmental groups have consistently opposed the use of safety-valves under the logic that it 

reduces investment in RE and allows for emissions that would otherwise not occur without such 

a mechanism. However, commenters noted, the EPA assumes, for the purpose of setting BSER 

that a state will achieve its entire renewable requirement through the procurement of 

allowed RE and actually achieve the emission reduction used to calculate BSER goals for 

individual states. Commenters stated this approach is simply not accurate and results in artificial 

inflation of RE assumptions and thus emission reduction assumptions. Commenters stated the 

EPA must recalculate BSER in a manner that reflects the true emissions impact of all state RE 

requirements including calculating the impact of each safety-valve mechanism (or alternative 

compliance mechanism). Additionally, within the NODA the EPA requests feedback on ways 

that state-level RE targets could be set based on regional potential for RE, the commenters said. 

Commenters added that the EPA relied on historic RE development from the top 16 states. This 

approach overstates the RE development rate by relying only on data from those states that have 

been most successful in developing their renewable generation, the commenters asserted. 

Commenters stated that historic RE development should be based on the experience of all states. 

Commenters recommended, at a minimum, that the EPA review each state's RPS requirements 

and determine if the state's definition of RE is the same as the EPA's and adjust the state RE 

goals accordingly. 

Commenters said that establishing BSER from implementation of RE based on a state's existing 

fossil fuel generation is arbitrary. Commenters did not recommend this approach and 

recommended that to the extent Building Block 3 is determined to be a legal application of 

BSER, each state assess its own RE potential using appropriate technical and economic analysis 

to develop state-specific goals that are cost effective and practical. Commenters indicated that in 
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North Carolina's case, the state's REPS represents the product of this analysis and the resulting 

RE target of 3.75% be used as the standard for North Carolina. 

Comment 13: The EPA has failed to actually analyze the Ohio program 

Response 13: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the state of Ohio is one of many across the nation to have RPS developed. 

The EPA has used this fact on multiple occasions as justification for including RE targets. 

However, commenters stated that it appears that the EPA has failed to actually analyze the Ohio 

program. Recognizing the challenges of Ohio entities, commenters said that Ohio state 

legislation included provisions in their RPS that tailor the requirements such that it is feasible, 

economical and workable in Ohio. For example, commenters indicated that Ohio's RPS includes 

provisions which "electric utility or electric services company may seek a force majeure 

determination from the commission for all or part of a minimum renewable-or solar energy 

benchmark" (OAC rule 4901:1-40-06). This chapter sets up detailed criteria a source would need 

to submit to demonstrate a dire need to end their legal requirement to meet compliance 

obligations, the commenters noted. The conditions to qualify for force majeure are not 

effortlessly met nor are they readily given; but the state of Ohio determined them necessary for 

cases of extreme need when developing Ohio's RPS, commenters added. Furthermore, 

commenters said that under OAC rule 4901:1-40-07 electric utilities or service companies "may 

file an application requesting a determination from the commission that its reasonably expected 

cost of compliance with an advance energy resource benchmark would exceed its reasonably 

expected cost of generation to customers by three percent or more." 

Commenters indicted that provisions such as force majeure and cost cap have not been accounted 

for in the EPA's rule. Federally enforceable RE would not allow states the flexibility to apply 

such measures in cases when it is needed, the commenters said. States would be locked into 

goals that do not account for real world changes and do not allow state agencies to fully utilize 

their knowledge regarding these measures and what is the most beneficial for the state, the 

commenters noted. Commenters stated this further strengthens Ohio EPA's desire to keep 

measures like RE and EE as state-only programs. Commenters also said states should have 

control over what programs are used to achieve state RE and EE goals and if a program becomes 

no longer economically beneficial or technically feasible, the state can freely chose to take 

appropriate action without a lengthy SIP revision or enforcement by the EPA or a citizen's suit. 

Commenters concluded that in regards to implementing EE programs in the state, Ohio has the 

following language in ORC 4928.66 (2)(b) [Appendix N]: "The commission may amend the 

benchmarks set forth in division (A)(1)(a) or (b) of this section if, after application by the electric 

distribution utility, the commission determines that the amendment is necessary because the 

utility cannot reasonably achieve the benchmarks due to regulatory, economic, or technological 

reasons beyond its reasonable control." Commenters stated the EPA has afforded no similar 
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opportunity for states to make adjustments that are warranted, yet used these very state programs 

to develop the goals. Commenters urged the EPA to re-evaluate the RE and EE goals, base them 

on all provisions provided in the individual state RPS programs and provide needed flexibility 

for goals and state plans to be adjusted when warranted, without the need for anti-backsliding 

provisions. 

Comment 14: Technical and economic limitations to potential growth of RE in states has not 

been considered. 

Response 14: The final building block 3 methodology is based on historical deployment of RE 

resources and validated by modeling the economic potential of incremental RE at a reduced cost. 

The EPA addresses considerations related to the technical feasibility and availability of regional 

RE resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated that the EPA failed to consider any technical or economic consideration 

which would limit the potential growth of RE in states. For example, commenters said, the EPA 

did not conduct a renewable resource assessment for any state. Similarly, commenters stated 

EPA did not consider the infrastructure constraints that would inhibit significant increases in RE, 

and expressed one limitation is the need for additional transmission capacity needed to 

incorporate new intermittent resources and the EPA also failed to assess the practical limitations 

associated with the construction of RE facilities. As a result of these flaws in the EPA's analysis, 

the EPA set RE targets for each state that are arbitrary and unreasonable estimations of 

renewable energy resources available in each state, the commenters concluded. 

Comment 15: The EPA's proposal does not adequately consider infrastructure barriers. 

Response 15: Building block 3 target generation is not assumed to increase beyond expected 

baseline performance until the first year of compliance in 2022. Further, the phasing in of the 

building block 3 target generation level over time ensures adequate lead time for investments and 

planning necessary to begin to integrate higher levels of RE. The EPA addresses this and other 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA's proposed action fails to appreciate the difficulty in time and 

expense associated with developing new RE resources and associated transmission capacity. 

Commenters asserted, based upon its own experience, that many states will be unable to meet the 

EPA's interim 2020 goals because of the time it will take to develop the necessary generation and 

transmission infrastructure. 
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Comment 16: Deployment of solar and wind facilities and mini-grids are expanding rapidly in 

the U.S. 

Response 16: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that the accelerated pace and expansion of investments in the Green 

Alternative Non-Hydro Electric Zero-Emissions Industry Infrastructure (GANHEZII) will 

overlap improvements to existing grid infrastructure under the CPP. The compliance phase-in 

period begins in 2020 and last 9 years, the commenters noted. Deployment of solar and wind 

facilities and mini-grids are expanding rapidly in the U.S., employing a skilled workforce, and in 

the case of wind power, it's Made IN America too, the commenters said. Commenters stated that 

by 2030, the compliance period start date, non-hydro renewable energy generation will likely 

outpace fossil fueled EGU in the collective output-weighted-average of generating capacity vs 

zero-emissions. 

Comment 17: Commenters questioned the EPA's proposed treatment of biomass. 

Response 17: Commenters in this section focused on the role of biomass-burning sources in RE 

target setting. Some commenters stated that EPA's proposed goal-setting calculation assumes 

without justification that biomass burning EGUs do not emit CO2. Other commenters stated that 

the RE goals would be strengthened if EPA explicitly excluded new biomass-burning EGUs 

from the justification for its new targets due to the lack of guidance on accounting for biomass; 

the commenters noted that the EPA can justify its reduction targets without assuming that 

biomass is available and that it will reduce net GHG emissions. In contrast, some commenters 

stated that the RE goals are weakened due to the fact that EPA has omitted biomass power from 

its goal-setting IPM projections. 

Biomass is included in the IPM baseline projection. Biomass is not considered part of the best 

system of emission reduction in this rule and therefore it is not included in goal-setting or 

compliance evaluations. However, similar to other technologies outside of BSER, biomass may 

be considered as a part of a state’s plan to meet the emission guidelines. 

For more information regarding Building Block 3, refer to Section V.E of the preamble. 

For more information regarding biomass in the IPM baseline projection, refer to EPA v5.13 Base 

Case Documentation Supplement to Support EPA’s Proposed Carbon Pollution Guidelines for 

Existing Electric Generating Units in the docket. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I and Section VIII.K of the preamble. 
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EPA developed the revised draft report, Framework for Assessing Biogenic CO2 Emissions from 

Stationary Sources, to continue advancing our understanding of the role the use of biomass can 

play in strategies to address greenhouse gas emissions. Specifically, the Framework was 

developed as a policy-neutral framework for assessing biogenic CO2 emissions from stationary 

sources—it was not developed as technical guidance in conjunction with any specific policy or 

program. The EPA is engaging in a second round of targeted peer review of the revised draft 

Framework with the SAB in 2015. 

A discussion regarding the current status of the development of the revised Framework and how 

information from the revised Framework and the related peer review processes could be used to 

inform how states and EPA assess biogenic CO2 can be found in Section VIII.I and Section 

VIII.K For more information regarding the Framework, see: 

http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA incorporates projections about future biomass-based power 

generation when setting emission reduction targets under the ESPS. Commenters added that state 

emission reduction targets are based on several factors, including an estimate about the extent to 

which states will increase their reliance on renewable energy. In the proposed RE approach 

described in the "GHG Abatement Measures Technical Support Document," the EPA establishes 

each state's RE baseline level using a dataset that includes electricity generated from biomass 

combustion, the commenters noted. Commenters explained that the Agency then extrapolates 

each state's renewable generation target, i.e., the amount of nominally zero-carbon RE that the 

EPA estimates the state can produce on an annual basis by 2030 from those baselines. The 

renewable generation targets are used to determine each state's overall CO2 reduction targets, the 

commenters said. Commenters also said the EPA's proposed approach sets targets based on 

renewable portfolio standards averaged across regions and assumes that the use of all RE 

technologies will grow at the same rate. Importantly, commenters stated that the EPA's proposed 

calculation includes biomass-burning EGUs and assumes without justification that biomassburning EGUs do not emit CO2. 

Commenters expressed that the EPA should explicitly exclude new biomass-burning EGUs from 

the justification for its proposed targets. Commenters stated the EPA currently has no accounting 

system to distinguish biomass that will result in low-carbon pollution from that which will result 

in high pollution. Commenters stated the EPA recently started to outline an approach for 

exempting certain categories, but the approach is still undefined and contains elements that are 

unlawful. Furthermore, the EPA can justify its reduction targets without assuming that biomass 

is both available and will reduce net GHG emissions, the commenters further noted. Commenters 

asserted that as detailed in broader comments on the ESPS being submitted by several of the 

undersigned organizations separately, there is ample evidence to support much stronger RE 

targets and that the EPA's targets will be stronger if they explicitly exclude new biomass. 

Commenters stated that in their understanding of the science relating to biomass for energy, there 

are clearly both good and bad forms of bioenergy. Commenters focused their attention mainly on 

those forms of biomass and beneficial use of methane that are widely agreed to be beneficial to 

climate mitigation in the near term and long term. The CPP, commenters said, as written, 
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profoundly underappreciates the potential of diverse bioenergy resources to mitigate climate 

change. Commenters acknowledged that the proposed rules clearly support smart bioenergy, as 

noted in the Preamble where the EPA states, "broadly speaking, burning biomass-derived fuels 

for energy recovery can yield climate benefits as compared to burning conventional fossil fuels." 

Yet, commenters said the EPA failed to include new bioenergy in its IPM computer model of 

renewable energy growth, saying: 

"The analysis in this TSD does not consider biomass renewables in its evaluation of renewable 

development potential for BSER (Best System of Emission Reduction), but the preamble 

discusses the possibility of a path for states to consider it in their plans." 

Commenters stated that by omitting biomass power from IPM projections of new renewable 

energy generation potential, the EPA weakens the renewable energy goals for states. 

Commenters thought it also could result in some opportunities for bioenergy to be overlooked by 

states. Commenters added that this is especially odd because in the EPA's modeling for the 

proposed rule, existing biomass electricity (mainly standalone biopower and some cofiring) is 

included, and has zero associated carbon emissions. In other words, existing biopower in the 

IPM is assumed to be a priori carbon neutral, the commenters said. Although the EPA does not 

offer any rationale for this omission, nor for the inconsistent treatment of existing biopower 

emissions, this occurs in the context of the ongoing debate over the accounting of biogenic 

carbon emissions from biopower, the commenters added. Commenters stated in the preamble to 

the Clean Power Plan, EPA states that "while biomass and other biogenic feedstocks have the 

potential to reduce the overall level of CO2 emissions resulting from electricity generation, the 

contribution of biomass-derived fuels to atmospheric CO2 is sensitive to the type of biomass 

feedstock used, and the way in which the feedstock is grown, processed, and ultimately 

combusted as a fuel for energy production." Commenters concluded by noting that this debate 

has not been resolved by the EPA having issued Second Draft Biogenic Carbon Assessment 

Framework on November 19. 

In contrast to commenters who largely believe that biomass should be considered carbon neutral, 

commenters noted that the Proposed Rule improperly treats biomass combustion as "zerocarbon" renewable energy in calculating state targets. Commenters said that this is contrary to 

the scientific literature, is not supported by any adequate explanation or justification and is 

inconsistent with the EPA's own modeling assumptions considering that the EPA's IPM model 

runs incorporate a non-zero emissions factor for CO2 from biomass combustion. In this 

modeling, commenters said that generation and emissions from "[n]ew and existing non-hydro 

renewable capacity" are explicitly "included in the average emissions rates that are evaluated 

against the state goals for compliance." Moreover, commenters said, CO2 emissions from 

biomass consumption are included in the average emissions rate subject to the CO2 constraints. 

Commenters stated that it does not appear that the EPA used its own modeling assumptions in 

setting emissions targets for individual states. Commenters said that the Proposed Rule, as set 

forth in the GHG Abatement TSD, includes biomass generation as "renewable energy," while the 

Goal Computation TSD includes all renewable generation in the denominator of the targetsetting equation, but does not include any associated emissions in the numerator. Commenters 

stated this means that all renewable generation, including biomass generation, is effectively 

considered "zero-carbon" in setting state targets. Commenters concluded that the Proposed Rule 

neither explains nor justifies this treatment, which contradicts both the IPM model assumptions 
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and EPA's acknowledgments elsewhere in the Proposed Rule that the net atmospheric effects of 

bioenergy generation may vary considerably depending on feedstocks and generation methods. 

Comment 18: Many states have less stringent RPS goals for co-ops and municipal utilities 

Response 18: State RPS requirements are not a factor in quantifying the amount of cost-effective 

RE that is part of the BSER in the final rule. The methodology that produces target generation 

levels under building block 3 is described in detail in V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that many states have less stringent RPS goals for co-ops and municipal 

utilities, but the EPA only applied the more stringent primary RPS goals for these states. 

Commenters asked why the EPA claims that doing so is "inherently conservative" and further 

asked if this does not make state goals more stringent. 

Comment 19: States with geographical locations where natural resources are available have an 

advantage over other states; this creates inequities 

Response 19: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that there are a few issues of concern in EPA's inclusion of renewable energy 

in the state goal calculation. The EPA includes renewable energy in the state goal calculation by 

calculating a baseline level of RE generation in each state and setting a target level of 

performance, the commenters explained. Renewable energy is largely dependent on the 

availability of natural resources such as sun, wind, and water, the commenters continued, adding 

that states with geographical locations where these natural resources are available have an 

advantage over other states that lack the same resources. Commenters stated this introduces yet 

another inequity amongst the states since renewable are included in the state goal calculation. 

For instance, commenters asserted states with wind power will potentially meet their state RE 

goal much sooner than other states that do not have this same natural resource as readily 

available. 

Comment 20: Integrating new wind and solar resources will increase the challenges of reliably 

operating the ERCOT grid. 
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Response 20: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the imposition of intermittent RE limits at the IPM 

region level, as described in section V.E.6 of the preamble and in the GHG Mitigation Measures 

TSD. The EPA addresses this and other considerations related to the technical feasibility and 

availability of RE resources in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that integrating new wind and solar resources will increase the challenges of 

reliably operating the ERCOT grid. In 2013, almost 10% of the ERCOT region's annual 

generation came from wind resources. To accommodate this level of intermittent generation, 

commenters explained that ERCOT has needed to evaluate impacts on operational reliability and 

improve wind output forecasting capabilities. The increased penetration of intermittent 

renewable generation, as projected by the modeling results, will increase the challenges of 

reliably operating all generation resources, the commenters continued. Commenters stated 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. Commenters anticipated this would reduce production from 

renewable resources, leading to possible non-compliance with the proposed rule deadlines. 

Commenters added that based on the CSAPR and $25/ton CO2 scenario, intermittent renewable 

generation sources will contribute 22% of energy on an annual basis in 2029. Commenters stated 

that however, during 628 hours of the year intermittent generation will serve more than 40% of 

system load. During 128 hours, instantaneous renewable penetration will be higher than 50%, 

and the peak instantaneous renewable penetration from the model results is 61%, the commenters 

added. Commenters added that the significant change from present experience is that the highest 

renewable penetration hours will be driven by maximum solar production during relatively high 

wind periods. These periods occur 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, the commenters said. 

Commenters stated the high instantaneous renewable penetration hours in 2029 occur year round 

except for the July-September period. Commenters said that Figure 11 (titled: "Days with 

Highest Instantaneous Penetration of Renewables") shows generation output by fuel type for the 

days with the highest instantaneous penetration of renewables in 2029 in the $25/ton CO2 

scenario. 

Commenters explained that due to load growth, the lowest net load (defined as total load minus 

generation from intermittent energy resources) in 2029 is higher than the current record (14,809 

MW in 2014 and 17,611 MW in 2029). Therefore, during low net load hours there will be no 

significant change compared to current operating conditions in terms of MW of thermal 

generation online, inertial response and frequency response available during generation trip 

events, the commenters further explained. 

Commenters stated significant increase can be seen in net load ramps compared to current 

experience. Commenters stated while the net load down ramps in 2029 are still largely defined 

by decreases in load at night, as is the case currently, the highest net load up ramps are defined 

by rapid solar production decline at sunset and simultaneous decline in wind production during 
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evening load pick-up. Commenters presented Table 19 (titled: "Maximum Ramp-up and RampDown"), which displays the maximum ramp-up and ramp-down in 202.9 in the $25/ton CO2 

scenario. Commenters also presented Figure 12 (titled: "Highest Three Hour Net Load Ramping 

Day"), which shows wind and solar generation output and customer demand (load) on the day 

with the highest three hour net load ramp in 2029 from the CSAPR and $25/ton CO2 scenario. 

Commenters stated that the simulation model assumes perfect foresight and ensures that there is 

a sufficient amount of thermal generation with sufficient ramping capability committed to follow 

such rapid net load ramps. In real time operation, however, the commenters said that 

accommodating the maximum ramps resulting from simultaneous solar and wind generation 

decline would be more challenging. Commenters stated that at times, the existing and planned 

generation fleet will likely need to operate for more hours at lower minimum operating levels 

and provide more frequent starts, stops, and cycling over the operating day. Commenters stated it 

is important that market mechanisms are adopted so that the need for flexible generation (with 

short start-up times and high ramping capability) is reflected in real-time energy prices. Market 

mechanisms to include dispatchable load resources could also help to address flexibility needs, 

the commenters thought. Enhancing wind and solar forecasting systems to provide more accurate 

wind and solar generation projections will become increasingly important, the commenters also 

said. Commenters stated 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. Also, commenters added that tools available to system operators must be enhanced to 

include short-term (10-min, 30-min, 60-min, 180-min) net-load ramp forecasts and simultaneous 

assessment of real time ramping capability of the committed thermal generation to assist 

operators in maintaining grid reliability. 

Commenters asserted that though all solar capacity additions predicted by the model were utilityscale, it is likely that a significant portion of future solar generation capacity will be embedded in

the distribution grid (e.g., rooftop solar and small scale utility solar connected at lower voltage 

levels). Commenters stated ERCOT does not currently have visibility of these resources. To 

produce accurate solar production forecasts, the commenters said that ERCOT would need to 

have improved information regarding the size and location of distributed solar installations. 

Additionally, to ensure grid reliability, there would need to be increased consideration of 

operational activities on the distribution and transmission systems, the commenters added. 

Commenters stated they are currently pursuing a rulemaking to improve and expand the data 

submitted annually to the PUCT on distributed generation facilities. 

Based on ERCOT's modeling, the majority of new renewable generation resource additions are 

anticipated to be solar, the commenters said. However, if instead ERCOT sees a large amount of 

wind resource capacity additions, then the reliability impacts may be more severe, the 

commenters predicted. Commenters stated wind production in West Texas results in high 

renewable penetration during early morning hours, when load is lowest. Commenters further 

added that a larger expansion in wind production relative to solar may result in lower net loads 

and significant reliability issues. Commenters said that 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. Should this occur, commenters said, it would reduce 

production from renewable resources, leading to possible non-compliance with the proposed rule 

deadlines. 
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Comment 21: Believe that 2030 RPS targets should be used over 2020 RPS targets 

Response 21: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Although commenters support the Alternative Approach, commenters were compelled to point 

out a number of opportunities to improve the calculations under the Proposed RPS Regional 

Approach. Commenters said that should the Proposed Approach be utilized, the EPA should use 

2030 RPS averages for 2030 targets rather than 2020 targets. Commenters thought that utilizing 

the average 2020 RPS as a target for 2030 within a region underestimates the ability of 

renewable energy to deliver achievable and cost effective emissions reductions. This simple 

change impacts the regional RE targets, the annual regional growth factors, and thus the 

proposed goals in 41 states, resulting in a total increased RE target of 64,316 GWh in 2030, the 

commenters said. 

Commenters stated should the EPA default to the current approach (RPS approach) in setting 

state targets, several key changes must be made. Commenters stated that while they are not in 

favor of the current approach (RPS approach), should the EPA default to this, there are two key 

changes that must be made: use the highest RPS in a region, and use 2030 RPS targets. 

First, commenters said that the EPA should use the highest RPS in a region to set the state 

targets, not the average RPS. The current approach groups states into 6 different regions and 

takes the average of the 2020 RPS goals for those states in that region and multiplies this by the 

total 2012 generation for the region, the commenters explained. The EPA chose this RPS 

approach for two principal reasons, the commenters indicated: First, in establishing the 

requirements, states have already had the opportunity to assess those requirements against a 

range of policy objectives including both feasibility and costs. Second, commenters said, that 

renewable resource development potential varies by region, and the RPS requirements developed 

by the states necessarily reflect consideration of the states' own respective regional contexts. The 

highest RPS goal in the region still fits within the principal reasons the EPA used, as the state 

will have weighed the feasibility and cost of the RPS policy against other policy objectives, yet 

still arrived at the aggressive RPS goal, the commenters continued. 

Furthermore, commenters noted that there are many instances where solar deployment has 

exceeded RPS deployment schedules, indicating that the RPS goal could have been more 

aggressive. For example, in New Jersey, Pennsylvania, Arizona, California and Massachusetts, 

solar has already exceeded the RPS goals, the commenters pointed out. These aggressive goals 

are an indication that higher levels of renewable energy deployment are viewed as possible in 

each respective region, the commenters thought. Also, a recent report from former Senator Jeff 

Bingaman notes that only five of twenty-nine states have fallen below 90 percent of expected 

annual progress toward RPS targets, the commenters said. 
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Secondly, commenters recommended that the EPA should use 2030 RPS targets, not 2020 

targets in setting the state goals. As the compliance period for the CPP rule extends out to 2030, 

not 2020, commenters asserted that selecting the RPS goals for 2020 severely limits the 

renewable energy potential for an entire decade. For example, commenters stated that the RPS 

goal for HI is set for 40 percent by 2030, compared to just 25 percent by 2020. Minnesota also 

has a 10 percent solar target by 2030, in addition to other RPS goals. Today, 2020 RPS goals are 

less than 6 years away, and by the time the rule is made final, less than 5 years away, 

commenters noted. Commenters added that utilities are already planning for these RPS 

requirements in 2020 as part of their short term planning processes. Selecting a 2030 RPS goal 

sends a clear message on the potential for a state to include renewables as part of a balanced state 

energy portfolio by 2030. 

Comment 22: The EPA should solely rely on the IPM model for setting the state targets. 

Response 22: The information provided in this comment was valuable in finalizing the building 

block 3 methodology, particularly in relying on IPM projections to validate building block 3 

target generation levels from both a cost and technical feasibility perspective. The final building 

block 3 methodology is described in section V.E of the preamble and in the GHG Mitigation 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA should solely rely on the IPM model for setting the state targets. 

Unlike the technical potential, the IPM model takes into account the cost of building renewable 

generation, as well as grid conditions in a state and a number of other factors, the commenters 

explained. In addition, commenters noted that the IPM model considers the resource potential 

that is considered by NREL's technical potential. Commenters asserted that with the correct solar 

data inputs, the IPM model provides a realistic projection of solar energy potential at the state 

level that can be relied upon for setting state goals. 

Further, commenters indicated there is precedent to rely solely on the IPM model for setting the 

renewable targets in each state under the alternative approach. Commenters said that the EPA 

currently uses the IPM model to analyze the impact of air emissions policies on the U.S. electric 

power sector such as the Clean Air Interstate Rule, Cross State Air Pollution Rule (CSAPR), the 

Mercury and Air Toxics Standards (MATS), and the proposed Carbon Pollution Standards for 

New Power Plants. Further, the commenters said that the EPA also notes that for the 

development of its latest power sector modeling platform, the EPA has increased its external 

engagement with state air quality planning officials, power company representatives, regional 

transmission organizations, and others who have provided input on the data, assumptions, and 

structure of EPA's Power Sector Modeling Platform v.5.1, which shows that the model includes 

feedback from a variety of stakeholders, and can be used reliably to set the state targets for 

compliance. 
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Comment 23: Other approaches to setting the renewables portion to the state targets, such as the 

UCS' demonstrated renewables growth approach, show double the amount of RE potential 

Response 23: The methodological elements provided in this comment were valuable in 

finalizing the building block 3 methodology, which is described in section V.E.6 of the preamble 

and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that other approaches to setting the renewables portion to the state targets show 

double the amount of RE potential using the correct data for renewable energy. Other approaches 

to setting the renewables portion to the state targets, such as the UCS' demonstrated renewables 

growth approach, show double the amount of RE potential using the correct data for renewable 

energy, the commenters stated. Commenters stated the UCS demonstrated growth approach 

would improve on the EPA's proposed approach by incorporating the following core 

components: 

"Setting a national renewable energy growth rate benchmark based on demonstrated growth in 

the states from 2009 to 2013. 

Assuming full compliance with current state RES policies, as set by law that require certain 

percentages of electricity to come from renewable sources. 

Accounting for actual and expected renewable energy growth between 2013 and 2017." 

Commenters added that the UCS state level RE targets begin in 2017, the proposed start date for 

state implementation plans, and ramp up through 2030. To determine each state's 2017 

generation levels, the UCS uses actual generation data from 2013 (the EPA's approach uses 2012 

data) and adds projected generation from wind and utility scale solar projects known to be under 

construction through 2016, the commenters said. 

 

Comment 24: Has not been adequately demonstrated that non-combustion renewable sources 

can serve as providers of base load power. 

Response 24: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters did not believe that it has been adequately demonstrated that non-combustion 

renewable sources can serve as providers of base load power. Commenters did 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. Thus, commenters stated, there are 

significant grid reliability concerns that have not been adequately addressed. Commenters 

strongly encouraged the EPA to take into account how those renewable sources, available to 

each individual state at reasonable cost, fit into the generation mix and how those units would 
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serve on the grid, in both vertically integrated and deregulated power markets. A clear distinction 

between base load and non-base load capable renewable sources must be made in both the goal 

setting and IPM projections, the commenters said. 

Comment 25: Commenters asserted that the EPA can increase the RE targets and should 

reevaluate its methodology and inputs. 

Response 25: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Some commenters asserted that EPA can increase the RE targets and should reevaluate its 

methodology and inputs. 

Commenters stated the EPA should assume greater annual growth rate for renewable energy 

initiatives, which is more accurate and realistic. The EPA's assumed average annual RE growth 

rate of 0.65% results in 12% national renewable energy production by 2030, the commenters said 

and recommended the EPA increase this assumed annual rate and national renewable energy 

production potential. 

Commenters continued by stating that in order to calculate state goals for renewable energy 

production in its proposal, the EPA divides the nation into six regions and establishes 

conservative regional targets for renewable energy by averaging the 2020 targets of existing 

state-level RPS within each region. RPSs set a proportion of renewable electricity that utilities 

are required to supply over time, the commenters said. The EPA then calculates the annual 

growth rate needed to achieve the regional target in 2029, using state renewable energy 

generation levels in 2012 as the baseline, the commenters continued. Under the EPA's 

assumptions, the commenters indicated that the CPP would result in 12% renewable energy 

production on a national level by 2030. However, the commenters asserted the EPA's 

assumptions do not accurately reflect current state policies and RPS targets as noted below. 

While commenters did not recommend specific national or state targets, the EPA's estimates 

clearly do not reflect the reality of state renewable energy policies. As such, commenters stated 

that the EPA should reevaluate its methodology for calculating state's RE potential and adjust its 

targets. For example, the EPA may want to consider the methodology outlined in the paper titled 

Strengthening the EPA's CPP by the UCS, the commenters recommended, which more 

accurately reflects current RPS policies and results in national renewable energy production of 

23% by 2030 (see Attachment A). Commenters described their methodology: 

• First, commenters used EIA data to calculate each state's average renewable 

energy growth rate over the five-year period from 2009 to 2013. Commenters 

found that, on average, states increased their renewable share of electricity sales 

by 1 percent annually (EIA 2014). This growth rate serves as our national 

benchmark, the commenters noted. The 2009-2013 benchmark period accounts 
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for the recent rapid growth in wind and solar technologies; it eases fluctuations in 

development due to uncertainty around federal tax credit expirations and 

extensions and captures much of the historic development spurred by state RES 

[Renewable Electricity Standard] policies-a key driver of renewables growth, 

commenters said. Further, commenters stated that 11 of the 15 leading states that 

have achieved growth rates at or above the national benchmark from 2009 to 2013 

have also achieved a 1 percent or higher average annual growth rate over a 10-

year period from 2004 to 2013. 

• For states below the 1 percent national benchmark, commenters assumed that they 

gradually ramp up to that rate from 2017 to 2020. Commenters explained that this 

period therefore serves as an opportunity for states that have not been as active in 

deploying new renewable energy sources to catch up to the national benchmark. 

Further, commenters said that the renewable energy is assumed to grow after 

2020 in these states at an annual rate of 1 percent of total sales through 2030. 

• For the 15 leading states among those that have been deploying renewable energy 

at or above the national benchmark, commenters increased their respective 

renewable energy targets from 2017 to 2030 at each state's average annual growth 

rate during the five-year benchmark period, up to a maximum of 1.5 percent per 

year. Commenters viewed this as a reasonable upper limit that can be sustained 

over time in states with strong renewable energy potential. Moreover, a 1.5 

percent growth rate is consistent with renewable energy targets set by leading 

RES states, the commenters noted. 

• Commenters finally stated that to account for full compliance with mandatory 

state RES laws, it assumed that states achieve the greater of two measures: the 

generation projected by our growth rate approach; or the level needed to meet 

states' respective RES targets for each year from 2017 to 2030, as projected by the 

Department of Energy's Lawrence Berkeley National Laboratory (LBNL 2013). 

To ensure reasonably achievable renewable energy penetration rates during the 

compliance period, commenters also capped the total share of renewable 

generation for any state at 40 percent of total state electricity sales, a level that 

several studies by grid operators, utilities, and government agencies have shown 

can be achieved at the state and regional level in this timeframe while maintaining 

reliability. Only seven states hit this cap prior to 2030. 

Commenters expressed that the EPA should significantly increase its targets for renewable 

energy. Commenters cited to a 2014 analysis by the Union of Concerned Scientists (UCS) found 

that states can increase their share of electricity generation from renewable energy sources by 

nearly double the EPA targets-23 percent rather than 12 percent. The UCS analysis is based on 

reasonable, even modest assumptions, involving past growth in renewables and state-law 

renewable-energy targets, the commenters said. For states performing below the national average 

of 1 percent annual growth in renewables, UCS assumes the states can merely bring their growth 

up to average, the commenters noted. Commenters added that it then projects that highperforming states can achieve growth of 1.5 percent, a figure consistent with the targets set by 
308 

the laws of leading states. Commenters said that for each state, UCS then assumes that the state 

will meet the greater of UCS's projected growth rate or the state's legally required rate. 

Commenters asserted that the EPA should apply a recent renewable energy annual growth rate 

based on 2013 renewable energy generation values. The EPA should set the renewable energy 

target as the higher of the two methodologies, either a flat regional renewable energy level 

applied to a state, or the annual growth rate based on 2012 renewable energy generation levels, 

the commenters said. Commenters stated the EPA should ensure that renewable energy 

generation targets do not act as ceilings. 

Commenters asserted that if the EPA raised its projections for building blocks three and four, 

which are the renewable energy and energy efficiency blocks, that we would see a higher carbon 

emissions reduction level and create unprecedented economic development for the state and job 

growth through increased energy efficiency to annual savings of 1.5 percent, increasing 

renewable energy up to 15 percent of the state's generation, and full deployment of combined 

heat-power systems. 

Comment 26: There may be boundary issues associated state emission rate goals. 

Response 26: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Some commenters expressed that there may be boundary Issues associated state emission rate 

goals. 

Commenters stated that if the EPA finalizes guidelines that allow a state to include in its 

compliance plan any renewable, regardless of where it is generated (which commenters support), 

then it may be necessary for the EPA to revise state-specific goals to reflect the renewable power 

produced in 2012 that was assigned to another state. Commenters stated this would result in a 

decrease in the stringency of the emission rate goals for states that exported renewables in 2012. 

Commenters indicated that the EPA's assumptions regarding RE are unrealistic and do not 

recognize the fact that many utilities build RE generation into their portfolio by purchasing 

energy from outside the state. Commenters said that it is unclear in the proposal how that 

impacts the targets that the EPA has set for each state. 

Commenters said that in determining the emission reductions possible from renewable resources, 

the EPA establishes annual RE targets based on the physical location of renewable power plants. 

Commenters stated this approach is problematic because it does not correspond with the way 

most existing RPS work. While existing renewable power projects are used to set targets for the 

state where they are located, those same projects may not be available to that state for CPP 

compliance because they are used by other states to meet RPS goals, the commenters explained. 
309 

For instance, commenters said, 55% of the renewable power generated in Oregon in 2012 - and 

used to set Oregon's target - is used to meet other states' RPS goals. Further, the commenters 

stated that the EPA's proposed approach also creates a mismatch between CPP renewable power 

targets and equivalent RPS goals for individual states, because the EPA bases its targets on the 

states' generating capacity while most RPS obligations are based on retail electric power sales. 

Commenters provided a solution which was for the EPA to improve its proposed approach to 

renewable energy by applying regional renewable targets to retail electric sales rather than total 

electric generation, which would solve compliance issues and more closely align with the RPS 

policies that help justify EPA's approach. 

Commenters asserted the Proposed Rule is inconsistent in how it calculates the Building Block 3 

goals and how it would allow states to demonstrate compliance with those goals. The EPA 

calculated state emission rate goals based on the amount of non-hydroelectric RE generated in a 

state, even if some or all of that RE generation is being used to meet out-of-state RPS, voluntary 

corporate goals, or other commitments, the commenters said. At the same time, the EPA 

proposes to allow the end-user to count that RE towards compliance with the end-user's target, 

even if that user serves load in a different state from where the RE was generated, the 

commenters said. See 79 Fed. Reg. at 34,922. Commenters asserted the EPA must be consistent 

in how it accounts for RE that is generated in one state and purchased by an entity in another 

state. Commenters expressed that if the EPA allows the purchasing state to count the RE towards 

compliance with its state goal, then that energy should not be included in the calculation of the 

generating state's goal. To address this problem, commenters suggested that the EPA remove all 

RE from the calculation of BSER, but continue to allow its use for compliance by the end-user. 

Commenters indicated that the EPA bases its RE goals on generation in a state, but state RPS 

programs are based on consumption in the state; a certain percentage of electricity sales, not 

generation, must come from RE sources. For a state that is a net exporter of electricity, its RPS 

reflects at most the amount of in-state consumption that must be supplied by RE, the commenters 

said. Therefore, commenters asserted that basing the RE goal on in state generation has a 

profound adverse effect in states like West Virginia or Wyoming which consume in-state less 

than half of their generation. 

Commenters indicated that existing renewable energy resources have been significantly financed 

and used by out of state customers. Commenters stated the EPA, which generally ignores 

interstate electricity trade in the proposed rule, gives no consideration to this fact and gives states 

where the physical asset is located 100 percent of the credit in their goal calculation. 

Comment 27: The Agency has not provided a workable coordinating mechanism for 

implementing BB3, which requires extensive coordination between states. 

Response 27: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. 

Additionally, building block 3 target generation levels do not exceed baseline projections until 

2022, providing ample time for state coordination and planning. For additional resources and 

guidance related to incorporating CO2 emission reduction measures in both single state and 

multi-state plans, refer to section VIII of the preamble. The EPA addresses considerations related 
310 

to the technical feasibility and availability of regional RE resources in both the preamble (section 

V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA's Building Block 3 would require extensive coordination between 

States, yet the Proposed Rule does not provide for any workable coordinating mechanism. For 

example, commenters indicated that PowerSouth is participating in a variety of renewable energy 

projects, including funding, in part, the construction of the Vogtle nuclear power plant in 

Georgia and a wind energy project development in Iowa. Commenters stated that although these 

projects will generate power in other States, some of it will be consumed in Alabama and 

Florida. Commenters asserted the EPA must provide a workable method for the inclusion of 

energy generated in one State, but consumed in another state into state goal calculations and 

compliance. In doing so, commenters encouraged the EPA to allow States consuming out-ofstate renewable energy to include that generation as a credit towards their compliance with 

Building Block 3 goals. The EPA's current proposal for state-by-state regulation with no 

workable coordination among States is a salient example of how this Proposed Rule is untenable 

on its face, the commenters said. The unworkable nature of EPA's proposal cannot be addressed 

by a simple fix and the EPA must withdraw its Proposed Rule and address these issues, the 

commenters said. Commenters stated as currently written, EPA's proposed Building Block 3 is 

arbitrary and capricious. 

Comment 28: The EPA should address the fundamental inconsistency between goal setting and 

state plan compliance options regarding renewable energy 

Response 28: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. Building block 3 is comprised of incremental RE and all BSER RE technologies are fully 

creditable in compliance. The EPA believes these adjustments from the proposed rule address the 

commenters’ concerns regarding a disparity between goal-setting and compliance. The final 

building block 3 methodology is detailed in section V.E of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that in the proposed rule, goal setting is based on net generation within a 

state's boundaries. All of a state's RE generation (except hydropower) was used to determine the 

starting point, ramp-up rate, and final RE goal for Building Block 3, regardless of whether that 

energy is exported and used for compliance with an RPS in another state, the commenters said. 

For states that are net exporters of RE, this creates a more stringent goal than would exist if the 

methodology relied on consumer sales, the commenters added. In addition, the commenters also 

said, compliance options for state plans seem to favor giving credit for RE to consuming states 

through the use of renewable energy certificates (RECs) or other purchases. Commenters said 

that importing states are allowed to claim the credit for RE without a downward adjustment to 

their goals (related to in-state RE generation) while exporting states would not be allowed to 

claim credit, even though their goals were made more stringent. Commenters stated this favors 
311 

consuming states at the expense of producing states, and that the exporting state is, in effect, 

paying for the RE credit options of importing states. 

Commenters asserted that two options exist for addressing this fundamental inconsistency. Each 

option offers both advantages and disadvantages while addressing the disparity between goal 

setting and plan compliance options, the commenters noted. 

Option 1-Commenters recommended adjusting the goal setting methodology to be based on 

consumption rather than production. This aligns more closely with RPSs, the commenters said, 

which are also based on consumption. This has the disadvantage of ignoring the other drivers of 

RE, such as tax incentives, the commenters also said. Currently, commenters indicated that tax 

incentives are important for attracting development of RE resources, but those incentives will 

become less attractive to states if they are not considered in the CPP. 

Commenters expressed that the Final Rule should recognize that exporting states may have made 

a significant investment in RE development (e.g., Production Tax Credits and other tax 

incentives) and that importing states are only making an investment to the extent that the 

purchase price exceeds the cost of other available electricity generation. If so, the commenters 

stated, an allocation agreement may be necessary to give CPP credit to both the exporting and 

the importing states. This allocation could be based on dollars spent or it could be based on other 

criteria agreed to by participating states, the commenters suggested. This eventuality should be 

stated explicitly in the Final Rule language, the commenters said, and added that as it currently 

reads, the importing state is favored. 

Option 2-Commenters recommended changing the requirements for claiming credit for RE 

generation to align with the goal setting methodology by allowing producing states to claim 

credit for all in-state RE generation. Commenters asserted that this has the advantage of being 

simpler and reducing the possibilities of double counting. However, commenters said, it has the 

disadvantage of overlooking the contribution that RPSs have historically made as significant 

drivers for RE development. (Note, however, that as RE resources reach cost parity with fossil 

fuel resources, the RPSs will have less significance, the commenters said.) It may also have the 

unintended consequence of dis-incentivizing RE development in states where consumption is 

low, the commenters concluded. 

Comment 29: Renewable Energy Resources Need to be Allocated to the Correct Utilities 

(States) 

Response 29: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. The process for incorporating CO2 emission reductions in state plans is provided in section 

VIII.G of the preamble. The final building block 3 methodology is detailed in section V.E of the 

preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 
312 

Commenters stated to have a significant portion of their renewable energy assets located outside 

of Wisconsin where the renewable resources are more efficient and cost effective. Commenters 

stated that for example, their Top of Iowa III facility is located in Iowa, but connected to 

Wisconsin through the regional transmission grid. Since the commenters' customers pay for this 

renewable generation, commenters stated that they should receive credit for those resources in 

both state and Federal compliance programs. Commenters stated that the EPA should correct the 

accounting for renewable resources in the state goal calculation by including resources owned or 

contracted by an entity in a state which are located outside of their physical boundaries. 

Comment 30: There should be symmetry between goal calculation and compliance calculation. 

Response 30: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. Building block 3 is comprised of incremental RE and all BSER RE technologies are fully 

creditable in compliance. The EPA believes these adjustments from the proposed rule address 

commenters concerns regarding a disparity between goal-setting and compliance. The process 

for incorporating CO2 emission reductions in state plans is provided in section VIII.G of the 

preamble. The final building block 3 methodology is detailed in section V.E of the preamble and 

in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters asserted there should be symmetry between goal calculation and compliance 

calculation. In the case of RE, the EPA has included all of the RE generated within each state for 

the 2012 baseline from which it has calculated the RE building block, the commenters said. Yet, 

commenters stated, the EPA is proposing another approach for crediting renewable generation 

for compliance with the goals. In the preamble, the EPA states: 

"The EPA is proposing that, for renewable energy measures, consistent with existing state RPS 

policies, a state could take into account all of the CO2 emission reductions from renewable 

energy measures implemented by the state, whether they occur in the state or in other states. This 

proposed approach for RE acknowledges the existence of renewable energy certificates (REC) 

that allow for interstate trading of RE attributes and the fact that a given state's RPS requirements 

often allow for the use of qualifying RE located in another state to be used to comply with that 

state's RPS." 79 FR at 34922. 

While commenters supported the flexibility afforded to states to follow the REC market for RE 

having interstate characteristics, there should be symmetry between goal computation and 

compliance demonstration. If the EPA's proposed solution is promulgated, Nevada would not 

receive the benefit of the RE that is exported out-of-state for its compliance, even though that RE 

was used to calculate Nevada's Building Block 3, the commenters argued. In addition, 

commenters were concerned that Nevada may not be allowed to receive the benefit of RE 

generated on Tribal Lands for export out of state or for in-state generation without the benefit of 

a multijurisdictional agreement regardless of whether the tribe is subject to its own emissions 

reduction goal. Commenters recommended that if RECs are used for compliance purposes, then 

the RE Building Block should be recalculated to remove the portion of RE that is exported to 
313 

other states. Commenters stated the same logic should apply to fossil fuel generated for out-ofstate usage. 

In order to determine Nevada's new RE goal assuming RECs can be used for compliance, the 

EPA's methodology for calculating Nevada's RE goal was reviewed by the commenters. 

Commenters found that the EPA used the 2012 total RE generation reported under EIA Form923 to calculate Nevada's RE goal. Commenters stated the RE generation reported on this form 

is not accurate, and based on publicly available information on the power purchase agreements 

(PPAs) for a number of facilities in Nevada, 800,523 MWh of RE in 2012 was generated for outof-state use. Commenters pointed to Attachment 2. Commenters concluded this constitutes 27% 

of the 2,968,630 MWh (Nevada's total RE generation) used to calculate Nevada's final (2029) 

RE and emission rate goals. 

Commenters referred to a letter submitted on September 18th in response to the proposed rule 

and prior to the issuance of this proposed supplemental rule. In that letter commenters requested 

that there be a clarification for the part of that rule that has created an obstacle for renewable 

energy development on the Navajo Nation. Commenters stated that Page 34922 of the proposed 

rule, not the proposed supplemental rule, the proposed rule, opens up for comment whether 

renewable energy generated on the Navajo Nation can be used to meet the goals of the state 

111(d) plan. Commenters thought that needs to be clarified because right now the experience 

has been since this proposed rule was issued this past June that it has stifled renewable energy 

development on the Navajo Nation, and they hope that this can be fixed immediately within this 

process. 

Comment 31: The EPA has misinterpreted North Carolina REPS 

Response 31: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E of 

the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters expressed that the methodology relies on the EPA's interpretation that the North 

Carolina REPS will result in RE accounting for 10% of North Carolina's electric generation in 

2020. Commenters stated the 10% figure used by the EPA is not an accurate reflection of the 

actual renewable generation that will result from the REPS in North Carolina for several 

technical reasons. The attached Tables A through C provide the EPA with an appropriate 

estimate of the actual amount of RE the State anticipates to generate (or produce) as a result of 

the REPS, the commenters said. 

Comment 32: Commenters do not support increasing the percentage of renewables (excluding 

large hydro) used in Wyoming to between 2% and 25%.
314 

Response 32: The information provided in this comment were valuable in finalizing the building 

block 3 methodology, in which incremental hydropower is included as a contributing RE 

technology. The final building block 3 methodology is described in section V.E of the preamble 

and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated they do not support increasing the percentage of renewables (excluding large 

hydro) used in Wyoming to between 2% and 25%. 

Commenters asserted that excluding hydroelectricity as a renewable resource is counter-intuitive. 

Commenters stated hydroelectric power does not result in carbon emissions, utilizes a 

replenished natural resource (water), and can provide reliable and planned production of 

electricity. Commenters also stated hydroelectric power is one of the most renewable resources 

and should fundamentally be included in your analysis and part of the goal going forward. Solar 

and wind renewable resources are, and should be, part of the overall generation portfolio and as 

such should be supported, the commenters stated. However, they are more costly and intermittent 

(i.e., electrical production from solar projects does not occur between sundown and sunrise) and 

must be firmed with peaking resources such as natural-gas fired generation, the commenters 

added. Commenters explained this increases the integration costs on the overall system and 

strains not only resources but relationships in the broader multi-state, multi-user consortium. 

 

Comment 33: Specific utility's status in Colorado, South Dakota and Wyoming 

Response 33: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. The process for incorporating CO2 emission reductions in state plans is provided in section 

VIII.G of the preamble. The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters provided a table with the renewable energy (RE) targets in the proposed rule for the 

states of Colorado, South Dakota, and Wyoming, along with the current state RE policy, the 

compliance status for each of our utilities. 

Commenters said that Colorado's statutes include a Renewable Energy Standard (RES). 

Commenters stated the RES, and associated commission rules, require the Black Hills to meet 

specific percentages of its retail sales with renewable energy. The RES in 2014 is 12 percent of 

retail sales; 20 percent for 2015-2019; and 30 percent for 2020 and beyond, the commenters said. 

Commenters stated the statutes also provide that the retail rate impact on customers not exceed 2 

percent annually. Commenters said utilities comply with the RES in Colorado using Renewable 

Energy Certificates (RECs), where one REC is created when one MW of eligible energy 

resource generates energy for one hour. Commenters stated Black Hills Colorado Electric is 

complying with the RES using a combination of RECs generated from an expired purchased 
315 

power agreement, small distributed generation projects, and small wholesale renewable (wind) 

generation. 

Commenters said that currently, the largest wind energy project attached to Black Hills 

Colorado's system is the Busch Ranch Project. Black Hills co-owns with a third party this 29 

MW generation project and the company is currently evaluating proposals in response to a 

competitive solicitation for up to 60 MW of eligible energy resources in accordance with 

Colorado's Electric Resource Planning rules, the commenters noted. Commenters said that as a 

result of this solicitation, the Company may acquire the energy and associated RECs from an 

additional 60 MW of eligible energy resources beginning as early as 2015. 

Commenters indicated that the Colorado Commission's Electric Resource Planning and 

Renewable Energy Standard Rules authorize the Colorado Public Utilities Commission to 

approve the recovery of the cost of all renewable resources while ensuring the annual cost impact 

on customers does not exceed 2 percent annually. Commenters said the most recent modeling of 

Black Hills' renewable portfolio indicates that through 2020 the Company will spend 

approximately $59 million more for renewables than for equivalent energy generated with 

conventional resources. 

Commenters continued and stated that Black Hills Power has purchase power agreements for 

hydropower and wind energy. Commenters explained that the Happy Jack and Silver Sage 

purchase power agreements provide Black Hills Power (South Dakota) with 35 MW of wind 

power. Commenters stated that in 2013, renewable resources served approximately 5.04% of the 

total retail sales for Black Hills Power. Cheyenne Light Fuel and Power (Wyoming) has 

purchase power agreements for 25 MW of wind energy from the Happy Jack and Silver Sage 

wind facilities, the commenters said. Commenters noted that in 2013, these renewable resources 

served approximately 5.8% of the total retail sales for Cheyenne Light. 

Commenters stated Black Hills Power and Cheyenne Light will continue to pursue prudent 

renewable energy generation and purchase opportunities that will achieve environmental 

improvements at the lowest reasonable cost to customers. Commenters described that the major 

barrier of renewable energy generation at a reasonable cost to customers, for both Black Hills 

Power and Cheyenne Light, is the ability to dispatch the energy. Commenters said because 

renewable energy is intermittent, the cost of regulating this energy becomes a significant barrier. 

Commenters stated some of Black Hills Power's additional challenges are due to the physical 

location of their system and quality of renewable opportunities. In addition, commenters added, 

if renewable energy generation is not connected to their transmission system, the price to deliver 

energy becomes difficult to overcome. 

Commenters questioned the approach in establishing Building Block 3 state RE goals that do not 

consider the reality of the current generation portfolio or the economics of selecting additional 

generation. Commenters supported state flexibility in meeting the state goals with the most 

economic generation considering other reliability constraints. 

Comment 34: Feasibility of Renewable Energy Goal in Florida 
316 

Response 34: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. The process for incorporating CO2 emission reductions in state plans is provided in section 

VIII.G of the preamble. The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters expressed that the renewable energy generation goal that the EPA has calculated for 

Florida is unachievable. Commenters stated the EPA's methodology for determining the goal is 

fatally flawed because it arbitrarily ties the state's goal to the RPS goals of other nearby states, 

which often do not actually require as much renewable energy generation as they appear to and 

reflect each state's highly unique mix of renewable energy potential. As a result, commenters 

said, the state renewable energy generation targets, including that for Florida, are unreasonably 

aggressive and do not take into account factors affecting the actual renewable energy growth 

potential in each state. Commenters stated the EPA's own IPM modeling results indicate that 

predicted renewable energy generation by the end of the compliance period cannot even come 

close to the renewable energy targets the EPA used in its goal calculation. Accordingly, 

commenters urged the EPA to withdraw the proposed state goals and reduce its renewable 

energy generation targets. 

On the other hand, commenters said that under the EPA's proposed method of determining the 

potential for renewable energy development in each state, Florida's final renewable energy target 

is 10 percent of total 2012 generation by 2029. The 10 percent goal is aggressive the commenters 

said, but they believe is achievable considering the time frame established for compliance. 

Commenters stated they have successfully built large utility scale solar projects in Florida and 

are prepared to extend this experience and construct additional renewable energy in Florida to 

achieve compliance with the CPP and grow additional jobs in the state. Working in partnership 

with state and Federal agencies, the commenters asserted, they can overcome any reliability or 

other impediments given the long lead time to achieve the 2030 emissions target. 

Commenters appreciated the effort the EPA has taken in an attempt to create what they believe is 

an achievable, yet challenging, requirement to reduce carbon intensity from the nation's power 

sector. However, commenters asserted the EPA's interim and final budget goals need to be 

adjusted to reflect the corrections in the technical data to reflect the achievable CO2 emission 

goals while still having a reliable electric network. These adjustments also need to take into 

account the timing required to implement the significant changes that would be required by the 

electric industry, the commenters said. Commenters expressed the interim and final budget is 

unachievable for the City of Tallahassee utilities as a key component of the State of Florida's 

goal. 

Commenters said that the EPA's building blocks 3 and 4 assume about 10 percent of Florida's 

generation will come from renewable energy by 2030, as well as a 10 percent reduction in 

electric demand. However, commenters indicated that Florida's projected growth rate and lack of 

cost effective RE resources make the 10 percent assumption unrealistic. 
317 

Comment 35: The EPA's RPS-Based Approach to Setting Renewable Energy Best Practice 

Targets Is Arbitrary in Light of EPA's Own Assessment of South Carolina's Available RE 

Resources. 

Response 35: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The regional targets are based on observed patterns of historical 

deployment for each of the BSER RE technologies and the target generation levels are validated 

through modeling projections to be technically feasible at reasonable cost. The EPA addresses 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

In regards to biomass, it is not considered part of the best system of emission reduction in this 

rule and therefore it is not included in goal-setting or compliance evaluations. However, similar 

to other technologies outside of BSER, biomass may be considered as a part of a state’s plan to 

meet the emission guidelines. 

For more information regarding Building Block 3, refer to Section V.E of the preamble. 

A discussion regarding the use of some biomass feedstocks for compliance purposes can be 

found in Section VIII.I.2.c and Section VIII.K.1 of the preamble. 

The following are summaries of the specific comments under this comment: 

Commenters believed the EPA's approach to setting state goals is arbitrary and capricious and 

the EPA should adjust South Carolina's goal to reward rather than punish the state for making 

significant investments in zero-carbon generation. 

Commenters said that under the Proposed Rule, the EPA has calculated the RE component of 

South Carolina's emission goal under building block 3 by grouping it into a region (the Southeast 

Region) with eight other states and assuming that the "average" level of RPS commitment across 

those states constitutes the "best practice" for renewable generation in South Carolina. 

Commenters asserted the EPA's approach is arbitrary and capricious for a number of reasons. 

First, commenters said that the EPA's assertion that South Carolina's RE "best practice" target is 

achievable is contradicted by EPA's own analysis of the available renewable energy resources in 

the state. Second, commenters said that the EPA's method for setting regional standards based on 

individual states' RPS levels, with no consideration given to those states without an RPS, is 

arbitrary and capricious. Commenters recommended that if the EPA persists in setting state goals 

based on projected renewable energy development in South Carolina, it should use the proposed 

"Alternative" resource-adequacy based RE approach, rather than the policy-based RPS approach. 

In the alternative, commenters suggested that the EPA should average the RPS levels from all 

states in each "best practice" region to determine the appropriate regional average including 

those states that have decided not to impose any RPS obligation on their utilities. 

Commenters said that under the Proposed Rule, the EPA has calculated South Carolina's 

emission goal using the assumption that by 2030, 10% of South Carolina's in-state generation 
318 

will be provided by RE. This level equates to the regional "best practice" scenario that the EPA 

developed for the eight states in the Southeast Region, the commenters explained. The EPA 

asserts that this level of renewable energy reflects the "resource development potential" of the 

Southeast Region, the commenters added. The EPA has also made available an "Alternative RE 

Approach" that does attempt to evaluate states' technical and economic potential for increasing 

states' RE generation, the commenters said. 

Commenters stated as a general matter, the EPA's decision to set each state's renewable energy 

target based solely on the political decisions of a handful of neighboring states is arbitrary and 

capricious because the Agency has made assumptions about each state's potential for developing 

its RE resources without any evidence in the record to support those assumptions. Commenters 

stated the EPA's RPS-based approach is particularly arbitrary in South Carolina's case. 

Commenters asserted that the arbitrariness of the EPA approach is evidenced by the fact that the 

RE goal is not based on South Carolina's RE resource development potential and is contrary to 

EPA's own assessment of the state's technical and economic potential for increasing its in-state 

RE generation. Commenters stated that the EPA's failure to base South Carolina's RPS-based RE 

target on any actual data or projections about what might be achievable in the state fails to satisfy 

the statutory criteria that emission limits under section 111 must reflect the degree of emission 

reduction that is achievable" through application of "adequately demonstrated" systems of 

emission reduction. 

Moreover, commenters said that the EPA's proposed RE target is clearly not achievable when 

viewed in light of the RE deployment that the EPA's Alternative RE Approach projects South 

Carolina could achieve in light of technical and market constraints. Commenters stated the EPA's 

Alternative RE Approach is based on two criteria, both of which are logically necessary to 

making a finding that any particular level of RE generation is achievable or adequately 

demonstrated in light of costs, energy requirements, and other statutory factors. The first 

criterion, commenters said, is the "technical potential benchmark," which the EPA determines by 

scaling each state's theoretical technical potential for each type of RE generation to the average 

development rate for that technology among the top 16 states nationwide. As the EPA correctly 

notes, commenters indicated that this "technical potential" criterion is insufficient in and of itself

to demonstrate that any particular level of RE development is adequately demonstrated because 

data about theoretical technical potential ignores restrictions such as "grid limitations, costs 

associated with development, [and] quality of resource." Because of the constraints of the 

National Renewable Energy Laboratory study on which EPA's technical potential estimates are 

based, commenters asserted the EPA's projections also likely "overstate electricity production 

potential because a given site cannot produce RE simultaneously from multiple technology 

types." 

Commenters continued and referred to the second necessary criterion, which the EPA calls the 

"market potential" for deployment of each RE technology, represents the "market potential for 

RE generation that can be developed in each state." Commenters stated although the EPA's 

approach to developing the market potential figures is seriously flawed, the Agency has at least 

attempted to estimate the amount of generation that a state could deploy in light of cost 

constraints. 
319 

Commenters stated the EPA's alternative approach-though flawed-clearly demonstrates that the 

proposed RPS-based approach to setting state "best practice" targets for RE is completely out of 

proportion to South Carolina's true potential for developing additional RE generation. Whereas 

the RPS-based approach would set South Carolina's RE target at 10% of its in-state generation in 

2030, the EPA's own technical and market potential approach projects that the amount of RE that 

is realistically achievable for South Carolina by that date amounts to only 1% of South Carolina's 

in-state generation, the commenters said. Commenters stated that in other words, the EPA's 

arbitrary RPS-based regional approach to determining the RE component of BSER overestimates the amount of RE South Carolina could reasonably deploy by an order of magnitude. 

For this reason alone, commenters stated, EPA's determination of the RE component of state 

goals is extremely arbitrary in South Carolina's case. Clearly, commenters said, according to 

EPA's own analysis of resource potential, South Carolina's proposed level of RE is neither 

achievable nor adequately demonstrated. 

Commenters concluded with although the EPA may not include beyond-the-unit measures in the 

BSER because such measures cannot legally form the basis for guidelines or performance 

standards under section 111, the Proposed Rule's "Alternative RE" approach to quantifying 

instate RE potential appears to be a more sound approach than EPA's RPS-based regional best 

practices approach. If the EPA finalizes its proposal to include RE in the BSER, commenters 

urged the EPA that it should, at the very least, adopt an approach that evaluates RE development 

potential by reference to the resources and costs of implementing designated levels of RE 

generation in each state, rather than to a handful of states' political decisions to impose an RPS. 

Commenters indicated that the EPA proposes a 10 percent renewable energy goal for South 

Carolina based on the renewable portfolio standard in North Carolina without any analysis or 

justification. In doing so, the commenters said, the EPA has excluded biomass production, 

despite the fact that it is included in North Carolina. Since South Carolina has significant 

biomass production, this is especially damaging to South Carolina, the commenters explained. 

Finally, while commenters expressed that they are very committed to energy efficiency, they are 

extremely concerned that the EPA applies its assumed 1.5 percent annual energy savings rate 

evenly to all states. Commenters stated South Carolina's population demographics, as well as its 

high industrial load percentage, suggest that its target should be different from Colorado or 

Washington. 

Comment 36: Nebraska targets may be unachievable 

Response 36: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. 

Building block 3 target generation levels do not increase beyond projected baseline levels until 

2022. The EPA addresses this and other considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 
320 

Commenters said that in Nebraska, Building Block 3 calls for increasing RE generation from 4% 

in 2012 to an annual average of 8% from 2020 to 2029, with a final target of 11% renewable 

energy generation by 2030. Commenters stated that while Nebraska has significant wind 

generation potential, it also faces significant challenges in transmitting this generation from areas 

of high wind potential to areas of high electricity demand. Building or upgrading transmission 

lines is a complicated, time-intensive process that can take up to 8.5 years, and much of 

Nebraska's wind potential resides in ecologically sensitive areas, including the Nebraska 

Sandhills and Central Flyway, requiring additional considerations, the commenters added. 

Commenters indicated that given that the proposed CPP's interim compliance period begins in 

2020, Nebraska may not have sufficient time to study, plan, and install the necessary 

infrastructure to achieve enough emission reductions under Building Block 3 to comply with the 

state emission goal. 

Comment 37: Utility Plans Regarding Renewable Energy Resources. 

Response 37: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which no longer rely on state RPS requirements to set a regional 

target for RE. The final methodology is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that in 2012, Tennessee's existing non-hydro power renewable generation 

constituted 1 percent of all generation, equivalent to 836,458 MWh. Commenters stated this 

existing generation together with the expected growth in renewables under Building Block 3b 

accounts for 4 million MWh of zero-emission generation. Due to Tennessee's low starting point 

in 2017, when the regional annual growth factor of 13 percent is applied, the commenters said 

that Tennessee does not reach the regional 10 percent target, but rather only achieves 6 percent 

renewable generation by 2030. 

However, commenters indicated that Tennessee has made significant new investments in 

renewable energy since 2012, the year the EPA chose as a baseline year for compliance 

purposes. Commenters stated these additions will help propel Tennessee toward meeting EPA's 

proposed target. Commenters stated TVA invested in 120 MW of new solar capacity in 2013. In 

2014, commenters added, that TVA made a similar investment of 126 MW, consisting of 10 MW 

for smaller-scale, rooftop solar under its Green Power Providers program; 16 MW for mid-size 

projects under the Solar Solutions Initiative; and 100 MW under the utility scale-size Renewable 

Standard Offer. Commenters stated TVA has announced its 2015 solar programs, which total 

130 MW - 10 MW Green Power Providers, 20 MW Solar Solutions Initiative, and 100 MW 

Renewable Standard Offer. Commenters added that according to Patty West, Director of TVA's 

Renewable Energy Programs, "These programs balance low-cost and cleaner energy resulting in 

a renewable portfolio that is good for all 9 million consumers in the Valley." 

Commenters noted that TVA has also been very bullish on wind power and TVA is currently 

sixth in the nation among all utilities in terms of wind power capacity. The utility currently 

contracts for over 1,500 MW of wind from wind farms in the Midwest, according to the 
321 

commenter. This wind power avoids 818,000 metric tons of CO2 a year, the equivalent of taking 

144,000 cars off the road, the commenters noted. These 1,542 MW of wind power are comprised 

of nine power purchase agreements from wind farms in Iowa, Kansas, Illinois, the majority of 

which are the result of a TVA request for proposals in December 2008, the commenters said. At 

the time these PPAs were announced in December 2012, commenters said that Ms. West stated, 

"We're confident that wind power will continue to demonstrate its value, effectiveness and 

potential in the years to come." Commenters continued and in terms of in-state wind capacity, 

TVA has 29 MW installed, and said that 27 MW are being procured through a contract with 

Invenergy to purchase power from the Buffalo Mountain wind farm near Oak Ridge, Tennessee. 

Commenters said that taking into account the 376 MW of solar capacity and 27 MW of landbased wind capacity that has or will be added since 2012, Tennessee's emission rate decreases 

from 1,293 lbs/MWh to 1,271 lbs/MWh, a reduction of 22 lbs/MWh. 

Comment 38: Adjust South Dakota Goal 

Response 38: The CO2 Emission Performance Rate and Goal Computation TSD for CPP Final 

Rule provides analysis and explains the adjustment that the EPA made to the state-level 2012 

data for South Dakota to better reflect fossil generation in an average year over a 1990-2012 

baseline. 

The following are summaries of the specific comments under this comment: 

Commenters stated if the EPA does not adjust the emission rate goal for South Dakota to correct 

the capacity factor for Deer Creek, Big Stone likely would be required to reduce generation 

beginning in 2020 in order for South Dakota to meet its proposed interim emission rate goal. 

This would cause a generation gap in the MISO region, which could not be mitigated by 

redispatch to units in SPP like Deer Creek, the commenters asserted. It is unlikely, commenters 

said, that the owners of their facility and the other owners of the Big Stone Plant would have 

sufficient time to construct new generation to replace the shortfall from Big Stone. Thus, 

commenters stated that the generation gap that would be caused by the premature retirement of 

Big Stone would raise reliability concerns for North Dakota, Montana, South Dakota, and 

possibly other states within the MISO region. 

Comment 39: South Dakota and Montana annual RE targets. 

Response 39: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. Consequently, the amount of baseline RE has no impact on regional 

target generation levels or growth rates. The final building block 3 methodology is described in 

detail in V.E of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 
322 

Commenters said that in South Dakota, where 50% of energy production is from hydropower, 

the EPA calculated an annual RE target of 1,818,150 MWh, twice what the target would have 

been by excluding hydropower to quantify BSER related RE generation potential. Due to the 

way the EPA determined the RE targets, South Dakota's 2020 RE goal is the same as its 2029 RE 

goal, and South Dakota must meet its 2029 RE goal beginning in 2020 with no ramp up period, 

the commenters stated. Commenters noted in Montana, where 41% of energy production is from 

hydropower, the EPA calculated an annual RE target of 2,722,706 MWh. Commenters stated if 

hydropower were excluded in order to quantify BSER related RE, the annual RE target would 

have been 1,652,132 MWh. For South Dakota, the EPA's proposed methodology results in a 

35% reduction in CO2 emission levels in a state that contributes just .15% of the total U.S. 

power sector CO2 emissions, the commenters noted, which equates to about a .05% reduction in 

U.S. power sector CO2. 

Comment 40: Concerns with the levels of renewable generation projected by the EPA both in 

Ohio and nationwide-short timeframe 

Response 40: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE at an interconnection level. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA states RE in 2012 represented 12% electricity generation 

nationally (including hydropower) which is up from 9% in 2005. [79 FR 34866] In addition, the 

EPA found more than half of the states have established state-level RE with an average of almost 

20% of 2020 generation supplied by renewables, the commenters said. [79 FR 34858] However, 

commenters stated, in Ohio, 2012 RE represented only 2% of generation (including hydropower) 

and Ohio is expected to have 9% of 2020 generation from renewables. 

Commenters were concerned with the levels of renewable generation projected by the EPA both 

in Ohio and nationwide, in particular the amount of generation from renewable sources projected 

to come online in a relatively short timeframe. Under the proposed rule, 11 states are projected to 

have 20% or more of their net generation coming from RE by 2030, commenters said. [GHG 

Abatement Measures TSD, Page 4-24] Commenters said this number seems overly optimistic, 

when it is considered that the growth of renewable and carbon neutral generation is a relatively 

recent phenomenon, and stated that even Ohio's RPS did not take effect until 2008. 

Commenters recounted the EPA's methodology for calculating the building block 3 targets, and 

noted the values obtained for Ohio at each step. Commenters said that Ohio's interim goal is 6% 

and the final goal is 11% of RE generation in the state. [79 FR 34867, Section 4 GHG Abatement 

Measures TSD] 
323 

Commenters stated that Ohio is to grow RE within the state from 1% to 11% under this proposal, 

and because Ohio is a large generator of electricity this represents 13,776 GW-hs. Commenters 

pointed out that states in the commenters’ region that are small generators, such as Delaware, 

will only be required to achieve 1,038 GW-hs. Commenters found this expectation unreasonable. 

Commenters stated the only way to accurately determine RE potential that is technically and 

economically feasible is to determine it based upon the specific state's ability. 

Comment 41: Provisions used to avoid double counting of the same MWhs of renewable energy 

in more than one state's compliance calculations. 

Response 41: The final building block 3 methodology does not rely on RPS requirements or 

state-specific deployment estimates, but rather cost-effective RE generation at an interconnection 

level. The process for incorporating CO2 emission reductions in state plans is provided in section 

VIII.G of the preamble. The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA is proposing language in the CPP that allows states to count outof-state renewable energy towards their compliance obligations provided provisions are made to 

avoid double counting of the same MWhs of renewable energy in more than one state's 

compliance calculations. 

Commenters indicated that the inconsistency in this position is that the EPA has established a 

2030 emissions target for Utah by including all in-state renewable energy in calculating the goal 

for the state and then proposes to require the state to remove those renewable energy sources that 

are under a PPA and exported out-of-state from the calculation of its post-2012 emissions rate. 

The effect of this language is to increase the 2030 compliance obligation beyond what the EPA 

has proposed in the rule, the commenters asserted. To rectify this inconsistency the EPA should 

either eliminate exported renewable energy from Utah's goal calculation or allow Utah to 

account for these resources in its post-2012 emissions rate calculation, the commenters 

suggested. 

Commenters indicated that this scenario evaluated how the stringency of Utah's 2030 emissions 

rate target would change if exported renewable energy sources were not included in the 

calculation of the state's emissions goal. (Note: The effect of allowing Utah to account for 

imported renewable energy in its 2013-2030 emissions rate calculation and goal calculation is 

addressed under item 5, Treatment of Exported Renewable Energy, in the Compliance Scenario 

section of this memorandum, the commenters noted.) Commenters concluded that when exported 

renewable energy is removed from the calculation of Utah's 2030 emissions rate goal, the goal 

increases 56 lbs/MWH to 1,378 and the state's compliance gap drops from 391 lbs/MWH to 335 

lbs/MWH. 
324 

Comment 42: Concern over the targets proposed for the State of Oklahoma. 

Response 42: The EPA has finalized a rule that provides significant flexibility over the interim 

compliance period, including the phasing in of both building 2 and 3 requirements. 

The following are summaries of the specific comments under this comment: 

 Commenters called attention to the Interim Goal and the "Cliff Effect". Commenters asked the 

EPA to consider removing the interim goal and allow the states to determine appropriate mile 

stones to ensure compliance with final goal. Commenters stated that it has approximately $250M 

in debt that would be at risk. Commenters stated [this] does not include new debt associated with 

adding new generation and transmission resources. [In summary, commenters noted that] the 

interim goal and timelines will put severe consequences on Oklahoma rate payers. 

Commenters indicated that in Oklahoma, the Block 3 target translates into an 83 percent increase 

from the 2012 baseline levels. Commenters stated that the EPA essentially presumes that all 

generation growth during this timeframe will be provided by RE sources. Commenters asserted 

this is both unrealistic and underestimates the need to shore up variable renewable resources with 

new, reactive fossil generation - a dynamic which is exacerbated by the NODA's proposal to 

further force coal-based reductions, already marginalized due to the Block 2 increase in NGCC 

utilization, in order to accommodate yet more renewables (wind) generation-based gains. In 

addition to problems inherent in the terms of Block 3, its application highlights the precarious 

position States may find themselves in with respect to energy reliability, the commenters 

concluded. 

Comment 43: Targets set for Texas are unreasonable. 

Response 43: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The BSER is forward-looking in identifying cost-effective 

opportunities for emission reductions from 2012; however, the cost and availability of these 

emission reduction opportunities is the result of many factors, including previous actions. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated the proposed rule's methods of designating renewable regions and calculating 

renewable energy goals is unrealistic and misguided. Commenters said that specific to Texas, 

ERCOT anticipates that by 2029, variable energy renewables will comprise 22% of the energy 

production in the region. Commenters stated the assumptions about the level of renewable 

energy that can be achieved in Texas under the Proposed Rule are completely unrealistic, as they 

are based on a single state-Kansas. Commenters added that as NERC points out, Kansas accounts 

for only 6% percent of retail power sales and has the third-best wind resource availability in the 

country. Yet, commenters said, the Proposed Rule imposes a renewable standard designed for 

Kansas on states like Louisiana that have double the retail sales and rank 48th in wind resource 
325 

availability. The Proposed Rule also ignores that the Kansas Renewable Portfolio Standard is a 

capacity based standard, not an energy production standard as envisioned under the Proposed 

Rule, the commenters added. The Proposed Rule simply translates the Kansas 20% capacity goal 

into a goal that 20% of the energy produced in Texas (i.e., consumed kWh, not installed kW) 

come from renewable resources, commenters said. Finally, commenters concluded that the 

Proposed Rule fails to consider that Kansas allows the use of crops for biofuels to count as 

renewable electricity and allows alternative compliance payments (payments made in lieu of 

actually installing the required renewable capacity, which effectively act as a cost cap) such that 

Kansas may not actually be achieving even its more limited 20% installed capacity goal. Taken 

together, commenters stated it's their opinion that the Proposed Rule sets an unattainable 

renewable target for Texas (and other states like Louisiana). 

Commenters indicated that Texas's current generation from renewables is already substantially 

higher than the U.S. average, yet EPA's proposal would penalize Texas for this early progress. 

Commenters stated the amount of wind generation that the EPA proposes for Texas is simply 

massive. Texas is already first in the nation at 34 million MWh of renewable generation, or 

nearly 8% of the state's total 2012 generation. The EPA's analysis assumes Texas' reliance on 

renewable power will increase 153% by 2030 to 86 million MWh-more than double the amount 

of 2030 renewable generation as the EPA assumes will exist by 2030 in California, the state with 

the next highest increase, the commenters added. Commenters stated at the 20% renewable target 

in the rule, Texas renewables would exceed the 2012 total power generation across all fuel 

sources of 32 other states. Commenters stated it is unreasonable, arbitrary, and capricious for the 

EPA to require Texas to meet the lion's share of building block 3's renewable goals for the entire 

U.S. 

Commenters presented Table 4 (titled: "Texas Renewable Generation (2008-2012)"), which 

shows that production from renewable generation in Texas essentially doubled in the four years 

from 2008 to 2012. 

Comment 46: RE status in Virginia, including utility plans regarding RE resources and the 

possibility of Virginia's estimated renewable generation rate. 

Response 46: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology. The final building block 3 methodology does not rely on RPS 

requirements or state-specific deployment estimates, but rather cost-effective RE at an 

interconnection level. The EPA addresses considerations related to the technical feasibility and 

availability of regional RE resources in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters asserted the prospects for significant additional renewable electricity generation in 

Virginia are not high. Commenters stated Dominion Virginia Power has installed, and continues 

to look for opportunities to install, solar electric generating equipment in Virginia. However, 

commenters said that the scale of these projects is very small compared to the scale of solar 

generating projects in the "sun belt" states, e.g., California, Nevada and Arizona. Wind turbines 
326 

have been installed and are operating to a limited extent in Virginia, but the prospects for large 

scale wind generation are totally unknown and speculative at this time, commenters explained. 

Commenters stated large scale land-based wind turbine farms face significant ecological and 

aesthetic hurdles in Virginia. Dominion Resources is evaluating the feasibility of relatively large 

scale wind turbine facilities off Virginia's shore line, but again, commenters indicated that the 

prospects for realization of this possibility is unknown and speculative at this time. Finally, 

commenters stated that the prospect for any additional hydroelectric generation is Virginia is 

very low. Commenters added that rather than adding any new dams in Virginia, recent years 

have seen several existing dams removed to return rivers to free-run conditions. In short, 

commenters concluded that the prospects for any significant new solar, wind or hydroelectric 

generation in Virginia are totally uncertain and speculative at this time. Thus, commenters 

questioned the EPA's assessment that Virginia could achieve a 12 percent annual average 

renewable generation rate by the year 2029. 

Commenters said that another reason the emission rates for Virginia are set unreasonably and 

unlawfully low is the EPA's inclusion of significant amounts of new renewable generation and 

energy efficiency in the denominator of its mathematic formula. Commenters stated although the 

proposal sets state-specific Mandatory Goals, the calculation of Virginia's Mandatory Goals 

disregards real world considerations specific to Virginia. In this regard, the Proposed Regulation 

arbitrarily and capriciously extrapolates renewable and energy efficiency policy requirements of 

other States that have not been achieved, commenters asserted. Commenters stated there is no 

analysis as to how these aspirational levels of renewable generation and energy efficiency, 

derived from other states that have their own particular geographies, existing infrastructures, and 

political considerations, could reasonably be achieved in Virginia or whether such levels can be 

achieved in a cost effective manner given Virginia's particular circumstances. Although the 

Proposed Regulation purportedly recognizes that "states differ in important ways," the EPA's 

generic approach to this aspect of its calculation ignores geographic differences that cannot be 

reasonably ignored, commenters noted. Again, the end-result of this unrealistic approach is that it 

deprives Virginia of the flexibility needed to achieve carbon reductions at a reasonable cost 

while still maintaining reliable service, commenters concluded. 

On the other hand, commenters said that the EPA applied RPS that have been established by 

states in the same region to quantify RE potential in states that do not have an RPS. Because 

Virginia does not have a mandatory RPS, the commenters indicated that the target is calculated 

assuming the state will meet the East Central region's RE goal of 16 percent by 2030. However, 

the commenters stated this target is not far from Virginia's voluntary RPS goal of procuring 15 

percent of the power sold in Virginia from eligible RE sources by 2025. 

Commenters indicated that in 2012, Virginia's existing renewable generation made up 3 percent 

of generation, equivalent to 2.4 million MWh. Commenters explained this level does not reflect 

the plans of both Dominion and Appalachian Power to add higher, though still quite modest, 

levels of renewable generation to their energy portfolios. Commenters stated for example, 

Dominion received approval from the State Corporation Commission to construct and operate 30 

MW of distributed solar resources and to purchase 3 MW of distributed solar from its customers. 

Commenters said it referenced filings from Dominion's 2013 IRP that assume that the 30 MW 

solar resources would operate at a 15 percent capacity factor and the 3 MW solar resources 
327 

would operate at a 13.9 percent capacity factor. In addition, commenters said that Dominion 

received a grant from the DOE to develop two offshore wind test turbines that will produce a 

total of 12 MW of generation. Commenters also said it referenced filings in the Dominion 2013 

IRP docket that assume that this resource would operate at a 40 percent capacity factor. 

Commenters concluded by stating that applying the existing level of generation that the EPA 

assumed in the 2012 baseline as well as the solar and offshore wind resources that are under 

development results in a reduction from 998 lbs/MWh to 952 lbs/MWh, a decrease of 46 

lbs/MWh. 

Comment 45: Reconsider Idaho's goal and treat Idaho like Vermont and the District of 

Columbia 

Response 45: Vermont and the District of Columbia do not have affected EGUs, and therefore 

they are not be required to submit a state plan. However, Idaho does have affected EGUs and 

therefore have CO2 emission goals. The CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule provides analysis and explains the adjustment that the 

EPA made to the state-level 2012 data for Idaho to better reflect fossil generation in an average 

year over a 1990-2012 baseline. See also sections I.A.1 and VI.D of preamble to CPP Final Rule. 

The following are summaries of the specific comments under this comment: 

Commenters said that in 2012, 87% of Idaho's in-state generation came from zero-carbon 

emitting sources. Commenters stated Idaho has projected that by 2020, 88% of its instate 

generation will be carbon free due to the continual addition of generation by new zero-carbon 

emitting sources within the State. Also, commenters indicated that Idaho utilities also operate 

successful Energy Efficiency programs that are continually evaluated by the Idaho PUC and 

participate regionally in the Northwest Energy Efficiency Alliance. Commenter provided Table 

1: 2012 Idaho generation in MWh provides additional data to support this point. 

For these reasons, commenters said that Idaho's current generation mix already meets the 

Proposed Rule's intent. Commenters added Idaho's generation mix exceeds the allocation of 

zero-carbon emitting energy and NGCC generation that the EPA seeks to achieve in the 48 states 

that have greater carbon intensity than Idaho. Commenters explained that Idaho's emission 

profile is much more like Vermont's profile than that of the other states covered by the proposal. 

Accordingly, commenters stated Idaho should not be required to further reduce carbon emissions 

through a state performance goal. 

If the EPA requires Idaho to further reduce emissions, the EPA may ultimately force Idaho to 

resort to energy sources that would increase overall carbon intensity, commenters asserted. 

Commenters stated as an example, if Idaho is required to comply with the rule as written, at least 

one Idaho utility would be forced to: (1) operate its peaking plants more often, at a higher cost to 

consumers and with greater emissions than its NGCC units; (2) rely on market purchases which 

can be costly, unreliable, and have unknown carbon profiles; (3) replace existing zero-carbon 

emitting generation with new intermittent zero-carbon emitting generation sources at a higher 

cost; and/or (4) build a new NGCC with a potentially higher emission rate under 111(b). 
328 

On October 30, 2014 the EPA released its NODA, which acknowledges that Idaho already 

produces/saves more MWh through RE and EE than it generates from affected units, 

commenters said. Commenters added this is illustrated in the NODA which would adjust the 

goal-setting equation. Idaho has 2,514,502 MWhs of existing renewable generation, a figure 

which does not include hydropower and EE, and only 1,639,922 MWhs of affected unit 

generation, commenters said. Commenters indicated that by subtracting the emissions that would 

be displaced from existing renewable generation, Idaho's calculated goal emissions rate on a 

lbs/MWh basis would be a negative number. The fact that Idaho has more than mitigated carbon 

emissions of its affected units by the amount of EE and RE it has currently accumulated, the 

EPA should reconsider Idaho's goal and treat Idaho like Vermont and the District of Columbia, 

commenters concluded. 

Comment 46: Commenters indicated that the proposed RE target for Arkansas is unnecessarily 

low. 

Response 46: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific comments under this comment: 

 Commenters stated some parties have complained that the EPA based its renewable target for 

Arkansas on the Kansas RPS, on the grounds that Kansas has a larger potential for wind energy 

than does Arkansas (e.g., AECC September 2014 Comments at 20). Commenters stated that in 

fact, the Kansas RPS is 20% in 2020, while the EPA target for Arkansas is only 2.6% in 2020 

and 7.2% in 2030. Commenters said the Plan's state goals are modest compared to the 

renewables targets that have been shown to be feasible by many other states that are no better 

positioned than Arkansas for renewables development.. Commenters presented Table 4, which 

compared the EPA renewable targets for Arkansas with the RPS in other states without 

particularly large potential for low-cost wind (such as Kansas, Nebraska, Oklahoma, and Texas) 

or solar (such as Nevada, Arizona, and Colorado). 

Commenters pointed out that it is important to recall that replacing coal and other fossil fuels is 

an environmental program, and like other pollution controls required by EPA and ADEQ, that 

program may cost money. Commenters added that the EPA does not require any particular mix 

of resources to achieve compliance. Commenters noted that SWEPCo expresses its concern that 

"Without codification of the renewable and EE targets EPA might disapprove of mass goal. 

[EPA] Likely would require state EE and RE legislation' (October Presentation 1 at slide 15), but 

so long as each generator's emissions are limited to a level that collectively meets the state (or 

regional) requirement, the EPA's goal will be met. Nothing in the Plan regulates how the 

reduction in operation of the covered units is achieved, whether through legislative mandates, 

Arkansas PSC regulations, or economic decisions made by the plant owners to stay within the 

carbon-emission allowances they are given in the State Implementation Plan, commenters 

indicated. 
329 

Commenters pointed to a study by NREL, which estimated that Arkansas had potential of 9,200 

MW and about 26,900 GWh of wind resources, using just 1.34% of the state's land, and with the 

following limits: 

• -assuming only 80 m hub height, even though new turbines are increasingly being 

built with hubs at 100 m or above. 

• -including only sites with capacity factors over 30%. 

• -excluding 60% of the high-wind land area, to reflect "protected lands (national 

parks, wilderness, etc.), incompatible land use (urban, airports, wetland, and water 

features), and other considerations." 

Commenters said that the EPA goals assume that Arkansas would add only about 630 GWh of 

renewables by 2020 and 4,700 GWh by 2029, so Arkansas could meet the entire renewable 

target with 17.5% of the in-state high-wind potential. 

Comment 47: The EPA's unsupported building block 3 and 4 calculations exacerbate the 

burdens on coal-fired EGUs, imposing economic and reliability impacts. 

Response 47: See section V.E of the final preamble of the CPP for the EPA’s response to this 

comment. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA's flawed analyses under Building Blocks 3 and 4 cause the rule's 

proposed emission targets to significantly overstate the level of reductions that can be reasonably 

achieved through increased renewables and demand-side EE measures. Resulting shortfalls in a 

state's emission reductions relative to the EPA's emission target must be made up elsewhere, the 

commenters noted. Specifically, in Pennsylvania, where EPA's Building Block 3 and 4 emission 

targets significantly overstate what reductions can be achieved, additional reductions from the 

State's coal-fired EGUs will be required to make up the deficit, the commenters asserted. 

Commenters indicated that this added stress on coal-fired EGUs is made worse in light of the 

way in which EPA's state emission targets are calculated. Commenters stated because emission 

reductions under Building Blocks 3 and 4 are accounted for only in the denominator of EPA's 

calculations (as compared with Building Blocks 1 and 2), to make up any shortfall, Pennsylvania 

must eliminate more coal MWh of generation beyond the deficit under Building Blocks 3 and 4. 

In other words, commenters stated EPA's inflation of the reductions achievable through RE and 

EE measures has a multiplier effect on what must be achieved by coal-fired EGUs, making 

already precarious requirements even less achievable. The end result for states like Pennsylvania 

is even more coal retirements and added detriment to sources' ability to operate economically, 

the commenters noted. Commenters stated EPA must consider and mitigate such unintended, 

unreasonable economic and reliability impacts in any final rule, as failure to do so would further 

render it arbitrary and capricious. 
330 

Comment 48: Commenters wanted to ensure that credits could be used to demonstrate 

compliance. 

Response 48: See section V.D of the final preamble of the CPP for the EPA’s response to this 

comment. 

The following are summaries of the specific comments under this comment: 

Commenters said that the EPA should ensure that EE measures by water companies and RE 

installations at their facilities are clearly eligible as a source of credits to states developing their 

state plans. 

Commenters asked that since the EPA did not remove out-of-state renewables from the state RPS 

goals used to calculate regional RE goals, if the EPA would allow the use of RE credits for CAA 

section 111(d) compliance. 

Comment 49: Request for clarification if solar/wind/hydro/geothermal/landfill/biomass can all 

be used to demonstrate compliance with goal. 

Response 49: The RE technologies used to set the building block 3 generation level are utilityscale solar PV, CSP, onshore wind, geothermal, and hydropower. Other RE technologies are 

eligible for compliance credit as non-BSER measures. See sections V.A and V.E of the final 

preamble of the CPP for the EPA’s response to this comment. 

The following are summaries of the specific comments under this comment: 

Commenters said that in footnote 30 to Section II.C of the proposed rule, the EPA refers to the 

new generating capacity of the following renewable power generating technologies-"solar, wind, 

hydro, geothermal, landfill gas, and biomass." Commenters requested further clarification from 

the EPA on whether actual generation from all six of these technologies, plus energy generated 

from wastewater treatment, can be included in the total annual generation number the state uses 

to demonstrate compliance with its emission goal. Commenters asserted that generation from 

solar, wind, hydro, geothermal, landfill gas, and biomass should all be counted as renewable 

generation in the denominator of the state's compliance calculations. 

Comment 50: Suggested revision to RE goal setting calculation method 

Response 50: The EPA has adopted a goal-setting methodology that reflects replacement of 

affected EGU generation with incremental RE. This replacement applies equally to all affected 

EGUs. Refer to section V and VI of the preamble for additional information. 

The following are summaries of the specific comments under this comment: 
331 

Commenters indicated that the EPA introduces an issue in the NODA regarding a disparity of 

treatment between building block 2 and building block 3 in the goal setting formula. Specifically, 

commenters stated that the treatment of RE is different in that the RE generation (MWh) is added 

to the denominator, but the displacement of emissions and generation from affected fossil 

generation that would result is excluded from the numerator. 

Commenters asserted it is more accurate and consistent for the EPA to remove displaced 

emissions from EGUs from the numerator, remove associated generation from those EGUs from 

the denominator, and then add the RE generation to the denominator as well. Furthermore, 

commenters expressed that the EPA should assume that RE generation will displace the highest 

emitting resources first in order to achieve the best system of emissions reductions. 

Comment 51: Commenters stated that the NODA's alternative RE and EE goal calculation will 

exacerbate the reliability and excessive cost impacts. 

Response 51: See section V.A. of the final preamble of the CPP for the EPA’s response to this 

comment. 

The following are summaries of the specific comments under this comment: 

Commenters indicated that the NODA proposes that the state CO2 emissions rate goals be 

recalculated with the assumption that for every MWh of RE that is generated and every MWh 

saved by EE that these values would be added to the denominator of the goal calculation and the 

equivalent CO2 emissions subtracted from the numerator. The result of this recalculation will be 

to substantially reduce the state emissions rate below the current values which are already too 

low for the grid to safely and reliability operate, commenters asserted. Commenters added the 

EPA provides no justification for this potential alternative other than some commenters have 

asked for it. Clearly, commenters said, these commenters seek only to eliminate coal generation 

regardless of the cost to utilities, cooperatives and rate-payers. Commenters noted these 

comments establish the danger of reducing coal operation and retiring coal units at the level of 

the current goals. Commenters said that the costs are too high, the potential benefits too small, 

and the impact of dramatically higher electricity rates is too real for the poor in this country. 

Comment 52: Commenters provided suggestions regarding how RE should be treated in 

determining state goals, including in relation to generation shift to NCCU units and demand-side 

EE. 

Response 52: See section V.E of the final rule preamble to the CPP for the EPA’s response to 

this comment. 

The following are summaries of the specific comments under this comment: 

Commenters contended that EPA should not incorporate renewable energy into the BSER 

determination, and instead, renewable energy should be allowed as a compliance option for 

states. Commenters argued that EPA's attempts to set renewable energy targets for states rewards 
332 

some states for lesser efforts, while penalizing early leaders in renewable energy. Commenters 

also questioned if EPA had legal authority to consider renewable energy in the BSER 

determination. 

Commenters supported EPA's approach that excludes existing hydro in the state goal setting, but 

allows new and incremental hydro to count toward compliance. Commenters asserted that, like 

existing nuclear generation, existing hydro is a mature technology that doesn't need economic 

support under the CPP in most cases. Commenters suggested that if the EPA decides to include 

existing hydro in the state renewable targets, base it on a rolling average of three most recent 

years of data to smooth year-to-year variability. 

Commenters provided comments on how to properly account for emission reductions of BSER 

as a system. In their statements, commenters argued that the Proposed Rule treats the increased 

utilization of lower-emitting existing NGCC differently from increased generation from other 

low- and zero-carbon sources and from energy savings. Commenters noted that EPA's 

description of Building Block 3 showed that EPA intended to reflect the reduced utilization of 

affected EGU's and not just the addition of zero carbon generation, and therefore, they suggested 

that the final Clean Power Plan should treat generation from nuclear energy, renewable energy 

and existing NGCC in the same way. Commenters continued by stating the energy savings that 

constitute Building Block 4 replace MWh that would otherwise be needed from generation 

sources, these savings should also be treated the same as redispatch to existing NGCC. 

Commenters stated that in order to calculate the impacts of Blocks 3 and 4 in a way that is 

consistent with the approach for Block 2, EPA should remove emissions associated with 

displaced EGUs from the numerator of each state's carbon intensity numerator. Commenters 

stated affected EGU MWh should also be removed from the denominator, and the equivalent 

number of MWh should be added back based on low- and zero-carbon generation from Block 3 

and energy savings from Block 4. 

Commenters expanded their discussion by stating, that to properly evaluate the system-based 

impacts of Building Blocks 3 and 4, EPA should calculate the incremental MWh of nuclear 

generation, renewable generation, and energy savings. Commenters clarified that, for nuclear 

generation, only under-construction nuclear should displace 2012 fossil fuel-fired generation. For 

renewable generation, the commenters suggested that EPA should add all MWh representing 

renewable generation to the denominator in calculating each state's rate. However, the 

commenters clarified, EPA need only displace fossil generation representing the renewable 

energy that is incremental to that produced in 2012. Finally, the commenters concluded that all 

energy savings would be considered incremental to 2012 generation and so all efficiency MWh 

would displace existing generation. 

Comment 53: The following commenters believe that states which have already implemented 

carbon-free generation should be given credits for their prior actions. 

Response 53: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 
333 

methodology is described in detail in V.E of the preamble and in the GHG Abatement Measures 

TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated EPA's proposal penalizes states that have acted to reduce GHG emission 

intensity through investment in carbon-free generation, including renewable energy and nuclear 

generation. Commenters said besides ignoring the actual proportion of carbon-free resources 

present within state boundaries through its failure to include existing nuclear and hydroelectric 

generation, EPA requires early acting states to meet more stringent interim and final performance 

standards. Commenters said EPA must recognize the significant efforts that states have made to 

reduce GHG emissions in the absence of a proposal such as that being contemplated by EPA. 

Commenters said meeting these goals comes at a cost, since renewable energy generation can be 

more expensive than traditional fossil fuel-fired generation. Commenters said these added 

expenses result in the imposition of greater costs to the customer, which they have already been 

saddled with for several years. Commenters said EPA seeks to increase the renewable goals of 

states that have already achieved real GHG reductions while asking less of states where such 

opportunities still exist, and this is neither equitable nor cost-effective. Commenters said some 

argue that providing credit will enable states to get by without doing anything, but the real story 

is that these states have been generating real reductions for years without a rule in place. 

Comment 54: Long-term implications of EPA’s treatment of RE 

Response 54: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology is described in detail in V.E.6 of the preamble and in the GHG Abatement 

Measures TSD. 

The following are summaries of the specific comments under this comment: 

Commenters stated EPA's treatment of renewable energy also has long-term policy implications. 

Commenters explained that the Proposed Rule affirmatively penalizes states and companies - 

like Western Farmers - that have been at the forefront of renewable energy development and 

creates unworkable conflicts and potential legal disputes between and among states. Commenters 

stated there is no clear way for states to account for renewable generation and the reduction of 

generation through energy efficiency without disrupting existing energy contracts, chilling the 

development of new renewables, and unfairly penalizing states and rate payers that have paid for 

the development of existing renewable resources, and these problems cannot simply be resolved 

by the states in the implementation of the Proposed Rule, and are the result of EPA exceeding its 

authority under the CAA. 

Comment 55: Commenters suggested that EPA should establish stricter standards based on 

renewable energy and energy efficiency under Building Blocks 3 and 4. 
334 

Response 55: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. 

The following are summaries of the specific comments under this comment: 

 Commenters stated that EPA's standards can be tightened to achieve significantly more carbon 

reductions. Commenters said significant additional reductions can be achieved through 

renewable energy and energy efficiency. Commenters said that demonstrated, updated cost and 

performance standards show that dramatic reductions can be affordably achieved with the no 

carbon solutions of building blocks 3 and 4 - renewable energy and energy efficiency. 

Commenters said EPA's current proposal vastly underestimates those reductions and must be 

changed to realize these further achievable reductions. 

3.3.7 Cost effectiveness of RE

This section discusses issues related to cost-effectiveness of CO2 emission reduction through 

Cleaner Generation Sources (Building Block 3). The comments in this section address cost 

effectiveness of RE and provide additional information both supporting and disagreeing with the 

EPA's cost models and associated analyses. State-specific issues are addressed, as well as issues 

related to integration of RE into the electric power grid and potential effects of RE-related 

incentive programs. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Commenters provided general information (not necessarily referring to 

independent studies) in support of the EPA's analysis and that RE is cost effective. 

Response 1: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the growth in renewable generation expected by the Proposed Rule is 

feasible and cost effective with today's technologies. Commenters stated the long-term growth in 

renewable energy deployment has been accompanied by continuous improvements in technology 

performance and cost. Commenters stated in 2013, the national average price for wind power 

purchase agreements (PPAs) hit an all-time low of $25/MWh. Commenters stated the system 

prices for residential and commercial PV, for example, declined 6-8 percent per year, on average, 

from 1998 to 2013. Commenters stated projections by the National Renewable Energy 

Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL) show that this 

sustained price drop over eight years is expected to continue, with solar eventually reaching 
335 

widespread grid parity. Commenters also stated recent market data indicates that average 

levelized cost of electricity (LCOE) of renewable generation has already become cost 

competitive with conventional sources, particularly in resource-rich regions. Commenters stated 

in the latest figures from Navigant Consulting, LCOE for utility-scale photovoltaic (PV) and 

onshore wind generation were $0.08/kWh and $0.06/kWh, respectively, compared to 

$0.075/kWh for coal. 

Commenters stated Building Block 3 is cost effective. Commenters stated previous renewable 

energy generation has been cost effectively deployed. Commenters stated that a NREL and 

Lawrence Berkeley National Laboratory review of the costs and benefits of increased renewable 

energy deployment (as anticipated under RPS compliance) found that the estimated incremental 

cost from 2010-2012 (the cost above and beyond what would have been incurred without an 

RPS) was on average approximately 1 percent of retail electricity rates and well below the cost 

caps that most state legislatures have adopted as part of their RPS. Commenters stated that in the 

study's analysis of states with restructured markets, incremental costs ranged from 0.1 percent to 

3 percent of retail rates. Commenters stated regulated states have fared similarly, experiencing 

incremental costs no higher than 3.5 percent of average retail rates, and in one case, savings of 

0.2 percent. Commenters stated this data derives from 29 states, most with policies in effect for 

more than five years. 

Commenters stated that additional renewable energy generation is also predicted to be costeffective to develop. Commenters stated NREL found that if utility-scale solar and wind are 

deployed in prime areas to meet RPS mandates, the renewables, including transmission costs, 

could be cost competitive with new NGCC power plants in 2025. Commenters stated that 

although NREL's study was limited to the Western Electricity Coordinating Council, it identified 

a range of scenarios where renewables would cost the same or less than NGCC by 2025, and that 

EIA estimates that even before then, by 2019, the cost for wind would be less than all forms of 

coal-fired power. Notably, commenters stated, even large utilities long known for their 

significant coal plant portfolios, such as Duke Energy, have invested heavily in renewable 

energy. 

Commenters stated that EPA correctly incorporates renewable energy and energy efficiency as 

components of its BSER. Commenters stated the emission reduction strategies from energy 

efficiency and renewable energy are already being deployed today in New York to costeffectively secure significant reductions in carbon pollution, beginning to fulfill the goal of this 

Proposal. 

Commenters stated that regardless of the reduction in demand, the most economical generation 

resource will be dispatched to meet energy demands. Commenters stated that contrary to EPA's 

assertions in the State Plan Considerations TSD (at 25), it is not zero-carbon resources that are 

the lowest cost resources. Rather, Commenters stated, for most companies (including Basin 

Electric) coal-based base load facilities are consistently the least expensive units to operate. 

Therefore, commenters stated while these programs are best practices for companies in longterm planning and can result in lower emissions of CO2 over time, they are unlikely to lead to 

EPA's stated goal of reduced generation at coal-based facilities. 
336 

Commenters described the successful development of solar and wind energy in Colorado and 

focuses on the results of a bidding process as part of the Public Service Company of Colorado 

renewables acquisition process in a period following 2016 and 2018. Commenters stated that the 

results of the bidding process were "a marketplace test of the cost of renewable energy 

supervised by a public record at the Public Utilities Commission that show new wind and solar 

come in at lower than system average costs here in Colorado. And we hold for your 

consideration that if we can do it here, it can be done elsewhere as well." 

Commenters stated that numerous studies have shown that this transition needs only the political 

will to make it happen. Commenters stated that new nuclear reactors cost billions of dollars and 

take many years to bring online, and renewable energy, and especially efficiency are much 

cheaper and their development is already underway. 

Commenters provided examples to illustrate that solar and wind energy measures can be 

implemented at a reasonable cost, and that cost should not be an impediment to including these 

renewable resources as part of the BSER. Commenters stated the examples included descriptions 

of First Wind's solar energy projects in Utah and Hawaii and the wind energy projects in 

Hancock County Maine. 

Commenters stated that "today, renewable energy is more cost-effective in more regions of the 

country than ever before, and prices continue to decline" and provided examples of prices for 

wind and solar generation and prices in PPAs in various states including: Georgia and Texas. 

Commenters continued by saying that "these examples are consistent with Google's experience 

in the market. Significant technology development and cost reductions for renewable energy 

resources have persisted over time and are expected to continue apace. To be sure, these 

renewable energy prices have been supported by federal and state policies and tax incentives. 

However, as for any energy technology, including fossil fuel technologies, government support 

and policies have played a critical role in driving down the unsubsidized cost of the technologies 

and taking them to greater scale. The Clean Power Plan can help play that role going forward for 

renewables." 

Commenters stated that "the EPA must not weaken Georgia's proposed target because 

renewables and energy efficiency measures are cost-effective energy solutions for Georgia." 

Commenters noted that it is important to adapt to changing grid operations "as renewable energy 

becomes a larger component of the electricity sector and the generation profile of the electric 

resources available throughout the day is changing." "This can be done economically, if 

supported through appropriate policies, pricing options, and program offerings." " The Western 

Wind and Solar Integration study found that not only is a high renewable energy penetration 

achievable, but also that any increases in costs or emissions associated with increased cycling of 

fossil fuel power plants are nominal compared to the overall cost and emissions savings 

associated with reduced generation from fossil fuel power plants." 

 Commenters stated that "renewable energy is neither reliable nor dispatchable and is therefore 

not a perfect substitute for conventional forms of generation, like fossil fueled sources. 

Moreover, even if one could overcome the reliability and dispatch issues, the costs of producing 

many types of renewable energy are still not economically justified. Basing economic 
337 

development programs on more costly, less reliable energy sources that cannot be dispatched is a 

non-starter." 

Commenters stated that "wind and solar resources have been deployed by states, utilities, and 

merchant generators. Commenters stated these technologies have been growing rapidly and are 

becoming more cost-effective strategies for CO2 emission reductions than approaches that 

continue to rely on conventional generation resources." Commenters provided statistics to 

illustrate the point. 

Commenters noted that "more than a dozen studies conducted by independent grid operators, 

state governments, academic experts, and others have found that wind energy benefits consumers 

by reducing electricity prices, and utilities are taking note". Commenters stated an example 

includes the DOE Wind Technologies Market Report 2012. Commenters stated that this report 

show how "cost savings with wind power are apparent across the country. Commenters stated 

newly released DOE data shows that consumers in the states that use the most wind energy have 

fared far better than consumers in states that use less wind energy. Commenters stated supporting 

arguments are also provided in the American Council on Renewable Energy's report and the 

Outlook for Renewable Energy in America. 

Commenters described how EPA could be more aggressive in the targets for RE based on 

dramatic since the costs of RE have fallen dramatically. Commenters provided examples of this 

for solar energy. 

Commenters highlighted the cost-effectiveness by describing the results of a modeling exercise 

looking at the CPP scenarios for the State of Wisconsin using the MyPower modeling software 

and a spreadsheet model. "Both models show that the 30% RPS can reduce Wisconsin's CO2 

emissions below EPA's targets, at a lower cost than the fuel switching scenario. These results 

were shown under conditions where fossil fuel prices rise steadily at 2% annually, and a scenario 

where natural gas prices reflect historical volatility observed from 19998-2013. The 30% RPS 

produced lower costs than the fuel switching scenario under each simulation, illustrating the 

value of renewables as a hedge against price volatility." "The results of both modeling exercises 

mirror results of recent analysis performed at the national level by the Union of Concerned 

Scientists (UCS). The UCS analysis found that EPA's proposed rule significantly underestimates 

the role of renewables in establishing state-level emissions targets, and fails to reflect the falling

cost of renewables." 

Comment 2: Commenters agreed with the general finding that RE is cost effective, and 

in support cite the results of independent studies.

Response 2: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 
338 

Commenters stated supporting analyses verify that higher renewable deployment in the 

alternative approach is cost-effective and achievable. Commenters stated independent modeling 

studies have also determined that the higher national penetrations of renewable energy projected 

in the commenters’ updated Alternative Approach are both technically and economically 

achievable. Commenters stated these studies should serve as further confirmation that much 

higher levels of renewable energy can and should be included in the Best System of Emissions 

Reduction. Commenters stated that all three of the supporting analyses referenced rely on 

NREL's Renewable Energy Deployment System (ReEDS) model. Commenters stated that like 

IPM, ReEDS is a long-term capacity-expansion model for the deployment of electric power 

generation technologies and transmission infrastructure throughout the contiguous United States. 

Commenters also stated that ReEDS features the following capabilities to model renewable 

energy: 

"[ReEDS] addresses a variety of issues related to renewable energy technologies, including 

accessibility and cost of transmission, regional quality of renewable resources, seasonal and 

diurnal load and generation profiles, variability and uncertainty of wind and solar power, and the 

influence of variability on the reliability of electric power provision. ReEDS addresses these 

issues through a highly discretized regional structure, explicit statistical treatment of the 

variability in wind and solar output over time, and consideration of ancillary service 

requirements and costs." 

Commenters provided information on recent analyses by the National Renewable Energy Lab 

(NREL) and U.S. Department of Energy (DOE) demonstrate the potential for much higher 

renewables penetration than EPA's proposed targets, even under restrictive sensitivity cases. 

Commenters provided further detail on the scenarios modeled. Commenters stated the ReEDS 

modeling suggests that EPA could set significantly higher renewables targets without a 

significant impact on electricity prices, and depending upon the scenario and year, solar and 

wind generation levels are two to three times higher in ReEDS than EPA's targets and, in many 

cases, electricity price projections are lower than EPA's. 

Commenters also provided information on a Union of Concerned Scientists (UCS) assessment of 

the technical and economic feasibility of a proposed "demonstrated growth" approach to targetsetting which results in 995 TWh of renewable energy. Commenters stated UCS also found that 

the incremental cost of high levels of RE deployment under their proposal was at or below 

$30/MWh, assuming national trading of RECs. Commenters also discussed the results of the 

analysis related to the impact on natural gas and electricity prices. Commenters stated that in the 

UCS analysis, the national average price of natural gas delivered to the electricity sector would 

be 9% lower than business-as-usual by 2030. Commenters also stated that at the regional level, 

consumer electricity prices would range from a 3.7% reduction to a 3.4% increase, while power 

sector natural gas price reductions would range from 8% to 17%. 

Commenters also provided information on preliminary results from DOE's Wind Vision report. 

Commenters stated that the early release of this analysis shows "that increasing wind power from 

4.5% of U.S. electricity use in 2013 to 10% in 2020, 20 percent in 2030, and 35% in 2050 is 

technically and economically feasible. Achieving these targets would require less than 5% of the 

country's available wind resource potential and would result in a less than 1% (0.1 cents/kWh) 

increase in electricity costs by 2030, and a 2% reduction in electricity costs by 2050. In addition, 
339 

the study found that achieving the Wind Vision (compared to a baseline scenario) would result in 

cumulative (2013- 2050) savings of: 

• $400 billion in avoided global climate change damages from reducing power 

plant carbon emissions by 12.3 Gt of CO2-equivalent (a 14% reduction); 

• $108 billion in avoided health and economic damages from reducing particulate 

matter, nitrous oxide, and sulfur dioxide emissions; and 

• $280 billion in lower consumer natural gas bills and total electric system costs 

that are 20% less sensitive to natural gas price fluctuations." 

Commenters stated EPA Properly included the addition of renewable energy in the BSER. 

Commenters stated electricity generation from renewable resources - such as wind, solar, or 

geothermal - has been demonstrated to be a cost-effective means of displacing emissions from 

fossil fuel generation. Commenters stated, given the nature of the electricity grid, the addition of 

renewable energy will directly result in reduction in other generation. Commenters also stated 

that there is ample evidence that it is fossil-fuel fired generation that is reduced as additional 

renewables are brought on-line. For instance, commenters stated, the New York State 

Department of Public Service conducted extensive modeling of the economic and environmental 

effects of that state's renewable portfolio standard and concluded that increased renewable 

energy generation would displace generation from higher-emitting sources, primarily natural 

gas-, coal-, and oil-fired units. Commenters stated renewable energy also meets EPA's cost 

criteria. Commenters stated recent analysis by Lazard suggests that the costs of carbon abatement 

from building a new wind or solar project, relative to building a new coal or gas plant, are within 

EPA's range of $10-$40/tonne and, particularly in areas with strong wind resources, can result in 

net savings to electricity customers. Commenters also stated a recent LBNL survey of state 

renewable generation cost assessments found that most states which assessed benefits of RPS 

policies determined that the policy resulted in net benefits due to, among other things, pollution 

reductions, economic development, and natural gas price suppression. 

Commenters stated that earlier this year a study was conducted by PJM, the regional grid 

operator, on the impacts of integrating up to 30 percent renewable energy by 2026. Commenters 

stated that the study found that by using 30 percent solar and wind we would save up to 16 

billion dollars per year on electricity production because it would replace the least efficient and 

most expensive power plants. Commenters stated the study also found that there would be no 

significant reliability issues from phasing in this level of renewable energy, even with current 

technology. 

Commenters praised the levelized cost of low carbon options analysis performed in Lazard and 

referred to the results of that analysis, stating that "one can go technology-by-technology, regionby-region and even plant-by-plant, which, in theory, is what the EPA will let the state do. Using 

the mid-points yields exactly the same rank ordering of the options as standing the ranges sideby-side. The ranges for efficiency, and wind, overlap as the lowest cost resources. The ranges for 

gas and Solar PV with the cost trend overlap as the next least costly options. In the context of the 

nuclear debate, when we look at ranges, nuclear cannot compete with efficiency, wind, gas, 

biomass, solar PV anyplace in the U.S. It is barely competitive with gas with CCS, geothermal, 
340 

microturbines, and solar thermal with storage. Storage is projected to be the least cost peaking 

power, just 10 percent more costly than the higher nuclear projections." 

Commenters provided examples of various analyses including a 2012 analysis from Citi 

Research, a Credit Suisse analysis, a Mckinsey study, a Sanford Bernstein analysis, to support 

the argument that on the residential-scale, solar is already competitive with electricity off the 

grid. Commenters also stated that utility-scale solar will be competitive with gas-fired power in 

the medium term, and utility-scale wind is already competitive with gas-fired power. 

Commenters also stated that "McKinsey reaches the same conclusion as Citi and Credit Suisse in 

projecting cost parity for solar with conventional generation within the next decade, but they go 

on to argue that this can have a dramatic impact on the marginal demand for conventional 

resources. Commenters stated the report argued that the growth of solar has an "outsize" effect 

on the demand for base load generation." "By altering the demand side of the equation, solar 

directly affects the amount of new capital that utilities can deploy at their predetermined return 

on equity. In effect, though solar will continue to generate a small share of the overall US energy 

supply, it could well have an outsize effect on the economics of utilities and therefore on the 

industry's structure and future." In addition, commenters pointed out that claims of natural gas 

price volatility will be discredit since "reducing supply pressures with renewables would dampen 

any volatility." 

Commenters further stated that "the electricity sector has moved well beyond the point where 

environmentalists and renewable advocates argue for the possibility of a transformation. We now 

have Wall Street analysts and important segments of the utility industry not only observing the 

ongoing transformation, but also noting the need for institutional and infrastructural change to 

smooth it. This economic transformation makes it clear that base load should not be 

characterized as a myth; rather it is an antiquated concept that has outlived its economic 

usefulness and is rapidly becoming obsolete." "The electricity system is well into the transition 

from a "fuel based" traditional load-following centralized electrical grid to an active and smart 

"renewables-based" electrical distribution system that integrates distributed supply with managed 

demand." 

Commenters provided examples of utilities that have been taking advantage of what they call 

low and stable long-term pricing available from renewable energy generators. Commenters 

stated those examples include Austin Energy, CPS Energy in the San Antonio area, the LA 

Department of Water and Power, and Massachusetts Municipal Wholesale Electric Company. 

Commenters cited examples of analyses that demonstrate that RE energy is already cost 

effective, including a 2012 analysis by the Michigan Public Service Commission and a report by 

Deutsche Bank. 

Comment 3: Commenters stated that they do not think RE is cost effective and describe the 

costs and emissions that they say the EPA is not considering. 

Response 3: The EPA addresses considerations related to the technical feasibility and costeffectiveness of building block 3 generation levels, particularly as it relates to the grid integration 
341 

costs of significant RE penetration, in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. The EPA’s determination of cost-effectiveness is the result of EPA analysis. 

The following are summaries of the specific public comments under this comment:

Commenters stated that "the EPA misunderstood the Lawrence Berkeley National Laboratory 

Study. A large deployment of RE will cause larger price increases than cited in the LBNL 

Study." "The EPA fails to note these studies covered what were then the early years of the State 

programs in which the RPS requirements were fairly modest (in the low single digits). Most 

State programs do not require significant renewable energy deployment until the post 2020 

timeframe. A small percentage requirement of a new generation resource, even if very costly, 

will not drive very large price increases, as the increased costs are spread over a large amount of 

electricity load." 

Commenters also stated that "the LBNL study does not demonstrate that RE is a cost effective 

means to lower CO2 emissions because an analysis using energy system models show cost of 

CO2 Reductions from RE Exceed $50/ton. Further, commenters stated that "in citing Germany 

as an example of an effective RE program, the EPA provides a helpful opportunity to look at the 

cost effectiveness of RE programs in lowering CO2 emissions, especially in regions with 

relatively modest technical potential" and provided data from the German experience to show 

that the German experience demonstrates conclusively that RE requirements are among the most 

costly ways to lower CO2 emissions. 

Regarding solar and wind, commenters provided data and described the results of published 

literature showing "that when the required amount of back up generating capacity is included in 

cost calculations, wind and solar remain among the most costly energy resources, even after the 

inclusion of externalities. In fact, most existing wind and solar energy resources were 

constructed not because they were the low cost means to lower CO2 emissions or to produce 

energy, but to comply with or take advantage of policies created to satisfy other objectives 

(interest group technology preference, employment, energy security, etc.)." Commenters then 

concluded that there is enough "analytical evidence demonstrating that electricity generated from 

wind and solar do not produce cost effective CO2 reductions and therefore should not be part of 

the EPA's BSER determination." 

Commenters also provided examples of how, as RE requirements increase, ratepayer prices will 

increase noticeably and why current penetration levels and associated rate increases are 

meaningless predictors of expected rate increases with greater renewable energy penetration 

rates." 

Commenters stated that "EPA fails to appropriately account for the full costs and rate impacts of 

its RE proposals." "The costs of increased renewable energy go beyond the cost of RE 

technologies and must include lost revenues incurred by Louisiana's utilities." Commenters 

provided estimates for the increased costs. 

Commenters described the negative impacts that aggressive goals on renewable energy 

penetration can have in electric cooperatives and provides the example of Minnkota Power Coop. "In 2007, Minnesota passed what was at the time the most aggressive Renewable Energy 

Standard (RES) in the country, a mandate requiring a 25 percent renewable energy portfolio by 
342 

2025. As with the conservation mandate, Minnesota policy makers believed they were treating 

utilities fairly by requiring the same renewable energy requirement for most of them." 

"Combined, Minnesota electric cooperatives have lost around $70 million annually in similar 

MISO transactions, largely because of our steep daily demand curves and lack of 24-hour, sevendays-a-week load." 

Commenters stated that renewable energy brings a large cost to Georgia communities. "Because 

solar energy appears to offer the most long-term promise in Georgia, it was chosen as the 

appropriate renewable resource to include in the evaluation. The added cost to our communities 

for this Building Block is estimated at $1.7 billion over the 2020 through 2030 period." 

Commenters stated that "requiring their customers to pay for additional renewables integration at 

this point will increase rates and not result in a significant reduction in carbon dioxide emissions, 

particularly since integrating additional intermittent generation requires significant investment in 

carbon-emitting ancillary equipment (e.g., simple cycle gas plants) for grid frequency and 

imbalance regulation." 

Commenters stated that they do not think that costs factor in impacts in wildlife. Commenters 

stated "Wind power destroys flying birds, and now there are articles coming out about the new 

solar plants catching birds on fire." 

Commenters stated that "EPA's proposed rule states that, by deriving its renewable targets from 

existing state RPS mandates, the result, represents a conservative estimate of cost-effective 

generation that could actually be developed by states." Commenters stated that what is cost 

effective in one state will not automatically be cost-effective in another. 

Comment 4: Commenters argued that RE is not cost effective in Arkansas and provide the 

reasons why, e.g., limited RE availability. 

Response 4: The final building block 3 methodology does not rely on state-specific deployment 

estimates, but rather cost-effective RE at an interconnection level. The EPA addresses 

considerations related to the technical feasibility and availability of regional RE resources in 

both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated Arkansas has limited wind potential and nearly all of the non-hydroelectric 

renewable energy that Arkansas consumes originates in nearby states. Therefore, commenters 

stated, EPA's goal-setting methodology for Building Block 3 would require states like Arkansas 

to invest in renewable energy resources within the state no matter how inefficient and costly they 

might be, or to purchase a substantial portion of the renewable energy in its Building Block 3 

target from other states that will already be forced to develop other renewable generation to 

satisfy their own overly stringent targets. Commenters stated EPA did not analyze such costs in 

its Regulatory Impact Analysis. Even then, commenters stated, given practical constraints on 

renewable capacity, states such as Arkansas would likely be unable to meet EPA's goals even by 

purchasing renewable energy credits from other states. 
343 

Comment 5: Commenters argued that RE is not cost effective in West Virginia and provide the 

reasons why, e.g. limited RE availability. 

Response 5: The final building block 3 methodology does not rely on RPS requirements or statespecific deployment estimates, but rather cost-effective RE at an interconnection level. The EPA 

addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters provided a discussion on the costs associated with solar resources in West Virginia. 

Commenters stated hat as determined in a project conducted by West Virginia University for the 

EPA titled "Sustainable Energy Parks on Mine-Scarred Lands in Appalachia," West Virginia's 

best potential solar power resources are located in the southern part of the state, where former 

surface-mined lands exist that have few options for reuse. Commenters stated these lands would 

be the best potential locations for solar power development and have been explored for such 

development. However, commenters stated, the incentives which states that are heavy utilizers of 

solar power have in place, e.g. net electricity imports and high electricity prices, do not yet exist 

in West Virginia. Commenters provided the following discussion: 

“The report found that the best potential solar resources in West Virginia are near Welch and 

have a potential expected output of 4.72 kWh/m2/day. The report also found that financing 

arrangements were critical to the payback period of a potential solar power project, including the 

ability to receive tax credits and solar renewable energy credits (SRECs). Without SRECs, the 

levelized cost of energy produced ranged from 21 to 27 cents/kWh, depending on ownership 

structure. 

For net electricity importing states such as California and New Jersey, solar power often helps to 

avoid purchasing wholesale electricity at times when it is most expensive, such as during peak 

load hours in the late summer afternoons. For West Virginia, one of the largest power exporting 

states, the ability to avoid this type of cost does not exist. Furthermore, peak demand for 

electricity in West Virginia occurs in the winter, often at times of the day when potential solar 

power output is zero. As of October 2014, California had about 5,500 MW of utility solar power 

resources connected to the grid. Total installed solar electric generating capacity in California is 

closer to 8,000 MW. Any solar power installed in West Virginia would have to be accomplished 

without the benefit of avoided peak energy prices which has enabled solar power development in 

California, and without access to what California has - some of the best solar power resources in 

the nation. 

In terms of peak capacity needed to serve load, solar power is unlikely to be able to contribute at 

all in West Virginia. While there would be energy savings associated with solar photovoltaic 

(PV) investment in West Virginia, the total avoided costs are likely to be much lower than states 

such as California, Massachusetts and New Jersey where solar capacity is already in place. And 

while electricity prices are rising in West Virginia and solar power prices are falling, levelized 

solar energy costs are not forecast to be competitive with current generation before 2030. 
344 

"Solar grid parity" is a term used to illustrate the continuing decline in the cost of solar power 

produced electricity in comparison to generally increasing retail electricity prices. Solar grid 

parity at the state level is typically defined as average electricity rates minus the levelized cost of 

generating solar electricity. Solar grid parity by this definition is expected by some analysts to 

reach 36 states in 2016, if the 30 percent tax credit on system costs remains. West Virginia is not 

one of those states, due to its comparatively low electricity rates, despite recent increases. 

This definition of parity is incomplete because it compares the retail cost of electricity that 

includes the costs of transmission and distribution, costs that can't be avoided when integrating 

solar energy because the grid must still be maintained. States such as Arizona are deciding that 

distributed, net-metered solar PV owners must pay a fee to support the distribution grid. 

The EIA projects that solar PV costs will decline to 13 cents/kWh in 2019 for systems with a 

capacity factor of 25 percent. Because solar insolation in West Virginia is lower, a capacity 

factor of only 13 to 15 percent is possible, which results in higher costs per kWh. 

In West Virginia, the costs of solar power generation would have to be passed on to ratepayers, 

many of whom are low-income. Nearly one quarter of West Virginia families have incomes of 

less than 150 percent of the poverty line ($35,325 for a family of four)35 placing the State eighth 

in the nation and about five percent above the national average of 19.6 percent. Families in this 

situation spend a disproportionate nine to ten percent of their income on utilities, fuel and public 

services, whereas the average family pays a little over seven percent of their income on the same 

goods and services. Rate increases would pose a particularly acute problem for low income 

households. 

Renewable Energy Summary 

There are currently no utility-scale solar power installations in West Virginia. The state has one 

announced 35 MW solar power grid project in the permit stage. Based on the efforts of private 

developers to build wind, hydro and biomass generating capacity over the last decade, it is 

extremely unlikely that more than 1.8 million MWh of additional generation can be added to the 

West Virginia portfolio by 2030. This would leave the state 8.5 million MWh short of the EPA's 

goal of 10.3 million MWh of new renewable generation, which would only come from solar 

energy or purchased power. If all the energy were to come from in-state solar power, at a 

capacity factor of 15 percent, this equates to about 6,450 MW of installed solar PV. 

The proposed regulation includes the option to purchase RE via a power purchase agreement 

(PPA). If the estimates of feasible RE additions shown in the following table are accurate, about 

8.5 million MWh would need to be obtained either from installed solar power or energy 

purchased from other states via PPAs. At the current installed cost for utility solar power of $3 

per watt, the investment in 6,450 MW of solar PV would amount to $19 billion. As costs are 

projected to decline, costs would be somewhat lower when expenditures actually take place. The 

extension of the production tax credit and investment tax credit would also lower costs. It is still 

likely to be more expensive for West Virginia to develop in-state solar power resources to meet 

the goal, so it is assumed that the choice would have to be the purchase out-of-state wind energy. 
345 

Wind PPAs are at all-time lows, especially for projects in the interior region. For the years 2011 

to 2013, generation-weighted average, levelized wind PPA prices were $53/MWh for contracts 

in the Great Lakes region and about $58/MWh for the Northeast region. Prices in both regions 

are higher than the national average and represent the relevant markets that would be available to 

West Virginia. If the production tax credit were to be removed, these prices would rise. 

As shown above, the states of Illinois and Indiana have considerable amounts of untapped wind 

resources. However, purchasing wind power would result in uncertain avoidance of generating 

costs, because West Virginia is a net generator of electricity. States that are net importers of 

electricity have much more certain benefits, because they are able to avoid both the fuel (variable 

costs) and capacity (fixed costs) associated with the energy purchased.” 

Comment 6: Commenters argued that RE is not cost effective in Minnesota and provided the 

reasons why. 

Response 6: The final building block 3 methodology does not rely on RPS requirements or statespecific deployment estimates, but rather cost-effective RE at an interconnection level. The EPA 

addresses considerations related to the technical feasibility and availability of regional RE 

resources in both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that "although SMMPA's current generation portfolio includes some 

renewable resources and SMMPA plans to expand its renewable fleet to meet state standards, 

those resources are not a perfect substitute for the baseload generation provided by Sherco. In 

particular, it costs more to generate electricity from renewable plants. Further, the intermittent 

nature of wind and solar power makes those resources unreliable sources for baseload 

generation." "Over the past 5 years MISO has given us capacity credit for 8% to 17% of the 

name plate rating for our wind generation. Accordingly, even with an expanded renewable 

portfolio, to fully meet its members' energy demands with reliable and affordable energy, 

SMMPA will need to rely on Sherco's baseload generation to hedge against market prices in 

serving its load, particularly during peak load periods." 

Comment 7: Commenters provided arguments to show that RE is not the least cost option. 

Response 7: The building block 3 generation levels represent a cost-effective means of replacing 

affected EGU generation but are nonetheless associated with a positive $/ton cost. Incremental 

RE does not have to represent a cost-saving measure to qualify for inclusion in building block 3. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that OMU's integrated resource plan found "OMU's coal fired Elmer Smith 

Generating Station was the lowest cost source of supply available to OMU for the next 10 years. 

Sources evaluated were natural gas combined cycle, natural gas combustion turbine, and 
346 

purchase of OMU's supply requirements from the market. In each scenario, the least cost option 

for OMU's ratepayers was to continue to operate ESGS." 

Comment 8: Commenters provided additional information on the costs of RE integration onto 

the grid. 

Response 8: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology. Distributed generation technologies are not included as part of 

building block 3. The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated there are significant additional costs and constraints not factored into the 

EPA's analysis of Building Block 3. Commenters stated the value of the grid has been 

recognized by numerous stakeholders and EPA pays it no mind in its analysis of what is best in 

terms of CO2 emissions. Commenters suggested the Agency review the following documents: 

1. EPRI Cost of Grid Service: Energy and Capacity Costs (see page 21); 

2. EEI, The Value of the Grid; 

3. NARUC resolution - encouraging state commissions and policymakers to continue to 

engage in collaborative dialogue regarding DG policies and regulations; 

4. MIT, The Future of the Electric Grid 

Commenters stated since DG customers use the grid in more complex ways than other 

customers, they are contributing to additional costs that utilities will incur to transform their 

distribution systems from the one-way delivery of power into a far more complex two-way 

system. Commenters stated these costs can include investments in new control systems, 

including IT infrastructure, communications hardware and software, and protective equipment. 

Commenters stated they can also include operating procedures and training to ensure the safety 

of the workforce and the public. Commenters stated EPA should correct its building block 3 

estimates to reflect the increased costs of integration that come with increased penetration of 

renewables and increasing heat rates as more marginal generators are forced to follow 

intermittent renewables. 

Commenters stated the desire "to ensure that EPA has fully captured the capital and operating 

costs of the additional replacement generation and transmission that will be needed to ensure 

reliability under the Clean Power Plan scenarios." Commenters stated that the primary cost 

consideration is “the intermittency of the generation and the financial cost of replacement 

(backup) resources necessary to ensure the reliability of the electric grid. Construction of 

additional generating capacity to back the intermittent generation along with the additional 

transmission and infrastructure significantly increases the capital cost of meeting the Clean 
347 

Power Plan rules. In addition, operation of higher-priced resources for reserve adequacy will 

increase overall system costs.” 

Commenters stated that "there is a limit to the amount of RE capacity that can exist in any region 

that is not subject to dispatch (wind and solar) before it impacts grid stability. Without the ability

to store energy from these intermittent resources, equivalent capacity must exist or be built to 

supply power when the RE is not available. Independently these RE sources are already 

expensive and when the back-up energy sources, typically natural gas combustion turbines, are 

included in the cost of generation, wind and solar energy become even more expensive. 

Additionally, wind and solar generators are known to adversely impact power quality and require 

compensatory measures to address reactive power." Commenters questioned if EPA considered 

these costs in their analysis of Building Block 3 and the impact that expanded use of RE might 

have on grid stability. 

Comment 9: Commenters provided what they think is additional information on the costs of RE 

integration onto the grid. 

Response 9: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated a number of technical studies by independent grid operators, utilities, and 

national laboratories have demonstrated the feasibility of wind penetrations of 40% and higher. 

Commenters referenced studies from NREL's Renewable Energy Futures, the Nebraska Power 

Association, the Minnesota Department of Commerce and PJM which studied wind and solar 

penetration/integration/reliability. Commenters stated if EPA does decide to impose such a cap, 

non-variable renewables, such as biomass and geothermal, should not count towards it. 

Commenters stated the cost associated with integrating variable renewable energy onto the grid 

is typically lower than or comparable to the cost of integrating conventional resources. 

Commenters stated even at 40% wind penetration across SPP, the Nebraska wind integration 

study found wind's total integration cost to be around $2/MWh of wind energy. Commenters 

stated, for comparison, the cost of accommodating conventional generator forced outages on a 

real U.S. power system was calculated to be $2 per MWh of all load served on that power 

system. Commenters also stated data from the ERCOT grid operator confirm that wind's 

integration cost is significantly lower than that of conventional generators' integration cost, on 

both a per-MWh of generation basis and a total basis. 

Commenters suggested that EPA's assumptions ignore state's economically reasonable resource 

limitations and the cost effectiveness of each type of renewable source. Commenters also stated 

that EPA is "not considering all the challenges posed by integration of intermittent electricity 

sources into the grid, for example, permitting, financing, transmission access and technical 

challenges." 
348 

Commenters stated that "The CPP did not consider the costs and project delays due to right-ofway obtainment related to expanding renewable energy transmission project to accommodate the 

requirements of the rule." 

Commenters pointed out that "EPA's assumption that large amounts of renewable power can be 

developed and brought to market within the proposal's compliance time lines fails to account for 

the significant cost and time needed to build the necessary transmission." 

Commenters stated that "experience in operating power systems with wind energy is increasing 

worldwide, leading to an emerging set of best practices." These practices have helped balance 

concerns regarding the variable nature of wind generation." Commenters cited the use of 

centralized wind energy forecasting systems by ISOs and the refinement of scheduling and 

commitment processes as examples. 

Comment 10: Commenters described regulatory considerations and government incentives 

that should be considered in the cost effectiveness analysis. 

Response 10: The cost-effectiveness of building block 3 generation levels was analyzed by the 

EPA without assuming extension of the production tax credit. Please refer to the IPM 

documentation for additional information on the regulations modeled by the EPA that affect the 

competitiveness of RE resources. 

The following are summaries of the specific public comments under this comment: 

Commenters asserted renewables are an important source of electricity; however, systems must 

be in place to ensure that artificial market mechanisms or regulations are not established that 

encourage the deployment of assets favoring of a single technology that could aggravate the 

intention of ensuring a reliability electrical system. Commenters also stated there is also a 

synthetic benefit constructed for Building Block #3 to the extent that investment tax credits 

confound the stand-alone cost-effectiveness of that building block, which falsely enhances its 

attractiveness under BSER. Commenters questioned what is the true cost-effectiveness of 

Building Block #3. 

Commenters said to "support the application of solar and wind in the manner described by the 

proposed rule. However, this needs to be tempered to the market forces as Congressional action 

on ITC and PTC could have significant impact on these renewables and future build out. EPA 

has ignored these issues and instead has looked to environmental dispatch rather than market 

pricing." 

Commenters argued that "the EPA should exclude soon to expire federal tax incentive when 

evaluating the cost of RE". Commenters described that purchased power agreements (PPA) "are 

not an appropriate measure of the competitiveness of different technologies as they do not 

account for costs hidden or obscured by government subsidies such as Production Tax Credit or 

Investment Tax Credits. For example, the Production Tax Credit allows developers of wind RE 

to offer PPAs at a substantial discount to what they would otherwise require if they had to pay 

for their investment without the tax credits. The EPA would have to make the assumption that 
349 

the Production Tax Credit for wind and the Investment Tax Credit for solar RE will continue 

beyond their current congressionally mandated 2016 expiration dates for their claims of 

competitiveness to be valid." 

Commenters stated that the Proposed Rule relies on compliance with the current renewable 

energy standard (RES) for MO to assess the probability of achieving the target in both the 

proposed base case and the proposed alternate case. Although the Proposed Rule relies on the 

RES, it is not parallel to the state-determined system. "State compliance with the MO RES is 

subject to a one percent customer rate impact limitation. The cost of compliance to build new 

wind or solar farms in MO would quickly exceed the rate cap issued under state directives cost 

of compliance to build new wind or solar farms in MO would quickly exceed the rate cap issued 

under state directives and support from the state legislative process and approved by the people 

of MO." 

 Commenters stated that utilities need to make money, "but in order to keep the utilities whole, 

they have to be incentivized to create programs where they make a margin or an extra margin on 

programs that will integrate high levels of renewable energy affordably because just a haphazard 

goal or just only solar net metering is really not going to get us there." 

Commenters argued that "subsidies for renewables have a much higher rate of return". 

"Subsidies play a crucial and unavoidable role in energy policy decisions. Renewables are in the 

early stage of development and receiving subsidies." "With a much smaller level of subsidy to 

drive innovation and economies of scale, the renewables have achieved dramatically declining 

costs in a little over a decade, which is exactly the economic process that has eluded the nuclear 

industry for half a century." "The dramatic increase in innovative activity with relatively low 

levels of R&D subsidy and much lower cumulative levels of total subsidies, reflects the 

decentralized nature of innovation in the renewable space and leads to the dramatic pay-off in 

terms of declining price. As we have seen, while wind had the earlier success, solar is now 

catching up." 

Commenters stated that "EPA completely fails to acknowledge the effect of federal subsidy 

programs on the cost of renewable energy development and the significant uncertainty 

surrounding the future availability of these subsidies. For example, the costs cited in the GHG 

Abatement Measures TSD for wind power purchase agreements reflect the benefit of the federal 

Production Tax Credit (PTC) for wind, along with the additional benefit from modified 

accelerated cost recovery systems." "This tax credit was a major driver of growth in wind 

capacity. The wind PTC expired at the end of 2013, however, and its chances for future renewal 

are uncertain. Likewise, the costs EPA cites for solar power purchase agreements reflect the 

benefit of the federal Investment Tax Credit (ITC). But the solar ITC subsidy is scheduled to be 

substantially diminished after 2016, substantially increasing the cost of new solar development. 

Without addressing the future status of these subsidies and their effect on the cost of future 

renewable energy development, EPA cannot claim that its Building Block 3 targets are 

achievable." 

Commenters stated that policies that encourage development of RE capacity and discourage 

premature retirement of nuclear capacity could be useful elements of CO2 reduction strategies 
350 

and are consistent with current industry behavior. Commenters stated costs of CO2 reductions 

achievable through these policies have been estimated in a range from $10 to $40 per metric ton. 

Comment 11: Commenters in this summary discussed considerations to improve costeffectiveness for small utilities serving low income populations. 

Response 11: The EPA has phased in the requirements of building block 3 generation levels to 

provide additional flexibility and time for all affected EGUs. 

The following are summaries of the specific public comments under this comment: 

Commenters said that "Some of Iowa's smaller utilities do not have the same options to add 

renewables as the larger investor-owned utilities do, because of their smaller size. For example, 

one Iowa municipal utility has coal generation, no NGCC plants, and some wind generation in 

Minnesota. The utility has tried to invest in Iowa wind generation without success, because the 

scale at which it can invest does not match the size of most wind generation projects. These 

smaller utilities also do not have large customer bases over which to spread costs as larger 

utilities. In addition, federal incentives such as production tax credits are not available to 

municipal utilities, and are thus not available to partially offset the cost of renewable generation 

for these utilities. Some of Iowa's municipal utilities and rural electric cooperatives will need 

more time than the year 2020 to change their generation portfolio to include additional lower 

emitting and carbon-free sources. Granting these utilities additional time in which to make the 

required changes will allow them to spread the associated costs for their customers over a longer 

period of time and minimize the cost impact on Iowa families and businesses. Too aggressively 

advancing the rules for these smaller utilities would have a negative impact on family expenses 

in the impacted communities. When thinking about what is a reasonable cost increase to impose 

on customers, EPA should also consider lower income utility customers." 

Comment 12: Commenters described various RE industry specific needs that do not seem to 

have been fully considered in EPA's cost effectiveness analysis. 

Response 12: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment:

Commenters stated the EPA's determination of state goals for renewable generation does not 

fully reflect the economic aspects of renewable resources. Commenters stated resource 

limitations exist due to permitting, market saturation, transmission access, and project financing 

issues. Commenters stated many prime wind locations have difficulty obtaining the necessary 

permits and are often objected to at the local level. Commenters also stated many high-grade 

wind sites are also located in remote areas. Commenters stated energy generated from these 
351 

locations requires large capital investments to build transmission infrastructure to interconnect to 

the BPS. Commenters stated location matters, and sites with high capacity factors are limited. 

Commenters stated the expiration of the production tax credits (PTCs) and potential reduction of 

the investment tax credits (ITCs) for RE resources in the coming years will impact investment 

decisions and the economics of new resources. As a result, commenters stated the marginal cost 

of new RE generation increases, which could impact the long-term development of RE 

resources. Commenters stated there is also the implicit need to increase ancillary services as a 

result of the increased variable resource output. Moreover, commenters stated, there are higher 

production costs associated with more non-hydro renewable generation due to a combination of 

increased capital costs and low-capacity operating factors. Commenters stated overall, significant 

cost uncertainties will directly impact the electric industry's plan to quickly adapt to the CPP 

requirements. 

Commenters provided a list of key considerations that were not included in EPA's costeffectiveness analysis, citing a NERC report as reference, and that include: 

• "resource limitations due to permitting, market saturation, transmission access, 

and project financing issues. " 

• "The expiration of the production tax credits (PTCs) and potential reduction of the 

investment tax credits (ITCs) for RE resources in the coming years will impact 

investment decisions and the economics of new resources. As a result, the 

marginal cost of new RE generation increases, which could impact the long-term 

development of RE resources." 

• "The implicit need to increase ancillary services as a result of the increased 

variable resource output." 

• "Higher production costs associated with more non-hydro renewable generation 

due to a combination of increased capital costs and low-capacity operating 

factors." 

Comment 13: Commenters specifically stated that the EPA needs to change its cost modeling 

assumptions and data and describe the changes needed. 

Response 13: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters stated building block 3's economic modeling should reflect expected cost 

reductions from renewable technologies over time. Commenters stated in addition to 

technological advances, 'technology learning' through deployment has been shown to 

consistently drive down cost as the volume of technology deployed rises. Commenters stated 
352 

Section 111(d) state compliance plans are likely to encourage additional renewable capacity 

installation and therefore cost reductions, on top of the cost reductions driven by ongoing 

renewable energy growth. 

Commenters stated the current IPM modeling conducted by EPA assumes minimal capital cost 

reductions for wind and solar energy through 2030, with wind costs declining from $2,258/kW in 

2016 to $2,250/kW in 2018, $2,220/kW in 2020, $2,123/kW in 2025, and $2,039/kW in 2030. In 

contrast, commenters stated, the Department of Energy report found that the current installed 

cost of wind energy in 2013 was $1,630/kW. Commenters stated it is deeply concerning that 

under the current IPM modeling inputs, even though the model assumes continued cost 

reductions, the wind cost in 2030 is still 15-25% higher than the wind cost seen today. 

Commenters stated in the case of wind energy, EPA should rely on the cost reduction projections 

included in the forthcoming Wind Vision report, which NREL has provided to EPA. In addition 

to capital costs, commenters stated EPA should also incorporate these documents' projections for 

reductions in O&M costs, which are listed as 'OpEx' in the Wind Vision document. Commenters 

stated the Wind Vision document also contain the necessary data for assessing current and future 

wind performance, i.e., capacity factor. Commenters stated the ReEDS model that was used for 

the Wind Vision analysis contains a detailed representation of hourly renewable plant output in 

17 time slices, which can be readily mapped to the hourly wind generation profiles employed in 

the IPM. Commenters stated Wind Vision contains detailed data on expected wind plant capacity 

factor improvements, broken down by wind resource class. Commenters stated these wind 

resource classes can be readily translated to the resource classes in the IPM, and used to modify 

the region and class-specific hourly wind generation profiles employed in the IPM. 

In addition, commenters stated Wind Vision's extensive dataset of regional wind supply curve 

information should be used by EPA to characterize the economically viable renewable energy 

resource in each region. Commenters stated EPA should take care not to double count 

transmission interconnection costs, regional cost multipliers, and other factors that are already 

included in both the IPM and the Wind Vision cost numbers. 

Commenters also stated the Alternative Renewable Energy Approach and the NODA Renewable 

Energy Approach do not include estimates of offshore wind generation that is likely to be 

deployed. Commenters stated while offshore wind is relatively new to the United States, it is 

well established globally with a market that added over 1,700 MW in 2013, bringing total 

installed capacity to 7,031 MW. Commenters stated in the U.S., there are 4,900 MW of proposed 

offshore wind projects in advanced stages of planning, with some projects likely to begin 

construction in the near future. 

Commenters stated EPA must update the cost data it relies on to assess potential growth in 

renewable energy. Commenters provided the following discussion: 

"Renewable energy costs have fallen dramatically and renewable energy performance has 

improved in recent years. These changes are well recognized and consistent with the price 

declines expected as an industry experiences the kind of growth that the renewables industry has 

seen in the U.S. and abroad. But EPA's analysis fails to account for either the cost reductions that 

have already occurred or the cost reductions that can reasonably be expected to continue. EPA 
353 

must properly account for these cost reductions and re-analyze the quantity of renewable energy 

that is available. 

In EPA's analysis of renewable energy (conducted through its Integrated Planning Model (IPM) 

Base Case v5.13,4), EPA adopts load forecasts and new technology costs from the Energy 

Information Administration's (EIA) Annual Energy Outlook 2013 (AEO2013). More recent 

industry data demonstrate that modeling assumptions used for the cost and performance 

characteristics of new generating technologies are significantly out of date. These cost estimates 

are especially important because, as discussed below, the costs for new generation technologies 

constrain the amount of renewable energy available to reduce carbon pollution under the Clean 

Power Plan. 

AEO2013's assumptions are outdated and do not reflect the dramatic cost declines seen in recent 

years. In fact, we find that AEO2013's cost assumptions for renewables are 46% above current 

averages for wind and solar technologies. This is not surprising, given that the AEO2013 cost 

assumptions were based on projects completed in 2012 and reflect pricing contracts that may 

have been signed several years prior to project completion. 

Since 2010, the cost of building utility-scale solar projects has declined by about 50 percent from 

$3400/kW to $1500-1800/kW in 2014. These declines are consistent with NREL's modeled 

prices using its bottom-up modeling methodology - NREL estimates that the price of solar 

declined to $1800/kWdc in Q4 2013. The declines are also reflected in average PPAs for utilityscale solar which, in the past year alone, have dropped from $123/MWh to $86/MWh, with 

several projects reporting prices (including incentives) below $70/MWh - competitive with new 

NGCC plants. 

Wind prices have experienced similar declines since 2010. The capital cost of developing 

onshore wind turbines has also declined, from $2260/kW to $1750/kW on average. LBNL 

reports that PPAs for wind projects (including incentives) fell, after peaking briefly at $70/MWh 

in 2009, to a national average of $25/MWh in 2013. Moreover, technology improvements have 

allowed for taller wind turbines, enhancing performance through faster and steadier wind speeds 

at higher elevation. As a result of these advances, Lawrence Berkeley National Laboratory 

(LBNL) researchers have indicated that average capacity factor has increased by 10 percent 

across all wind classes since 2012. Taller wind turbines significantly expand the geographic area 

suitable for wind turbines. 

Lazard estimates that the current range of LCOEs for onshore wind, without any subsidies, is 

between $37/MWh and $81/MWh. In contrast, EIA's out-of-date estimate projects that the 

LCOE in 2019 will be between $70/MWh and $90/MWh. 

There is no basis for EPA to rely on AEO2013's out of date data when it has before it recent 

government and credible industry analysts' cost data, e.g. NREL, LBNL, BNEF and Lazard. 

AEO2013's use of installed costs means that the data presented will have an 18-month or greater 

time lag. As LBNL has noted installed cost data "may reflect transactions that occurred several 

or more years prior to project completion" and therefore are often unable to accurately reflect 

current prices in such a rapidly changing industry. In this case, the delay causes the analysis to 

miss key data showing major price declines, and therefore significantly overestimate current 
354 

costs and underestimate recent performance. EPA can also check the monthly FERC-issued grid 

interconnection report, which shows the utility-scale projects that have both been approved for 

interconnection or commissioned as a new generating resource for the regional transmission 

authorities that lie under FERC jurisdiction. 

Importantly, there is no reason to believe that the declines in cost will not continue. DOE/NREL 

Sunshot Vision study, which constructs a detailed roadmap for continued cost declines in solar 

PV technologies, projects that solar system prices can drop 75% between 2010 and 2020. In its 

2014 update on Solar PV pricing trends, NREL also predicted that solar prices are still on track 

to meet the Sunshot goal of $1/Wdc by 2020 for utility-scale systems. This would place utilityscale solar projects in direct competition with NGCC plants, without any incentives or carbon 

policy. Likewise, many industry analysts predict that wind and solar will become increasingly 

competitive with new NGCC plants and will make up a major market share of new U.S. demand. 

As noted, average PPAs for utility-scale solar in the past year alone have dropped to levels 

(including incentives) competitive with new NGCC plants. Meanwhile, a new Deutsche Bank 

report predicts that distributed solar power will be cheaper than average retail electricity prices in

36 states by 2016 (47 states if the 30% ITC is extended). 

Recent analysis also shows that higher penetrations of renewable energy are feasible. Detailed 

analyses performed on the PJM grid, the Eastern Interconnect, and Western Interconnect have all 

found that renewables can provide up to 10% of generation on major ISOs with little to no 

additional costs, and can provide up to 30% of total generation with only minor adjustments to 

the existing grid and proper system planning. The findings of these studies demonstrate that it is 

technically achievable to incorporate higher levels of renewable energy into the existing grid 

than what has been proposed in EPA's target- setting. 

There is no basis for EPA to rely on outdated cost information in its analysis when it has more 

recent data available showing that current costs are lower. This is particularly true because the 

cost differential is dramatic. Based on NRDC's analysis of recent data, the costs EPA relied on 

are 46 percent above current average costs for, respectively, wind and solar energy. As explained 

in detail below, the lower costs mean that substantially more renewable energy can and should be 

included in the state targets." 

Commenters stated that EPA relies on outdated assumptions about the costs of renewable energy 

and continues by saying that "as UCS notes, the price of wind and solar have dropped 

precipitously in recent years, fueling tremendous growth in these technologies." Commenters 

provided specific data illustrating the declining trend, in particular for the Southeast. 

Commenters also stated that "the solar and wind cost declines projected by UCS and others are 

the product of rapid technological advances, so it is understandable that the proposal does not 

adequately capture them", but that EPA should fix that in the final rule, in particular for 

Alabama. 

Commenters cited a report conducted by the Natural Resources Defense Council to say that 

"EPA used outdated information to estimate the cost and performance of renewable energy. 

Current estimates show renewable energy is close to half as expensive as suggested by the 

agency's data. EPA should recalculate its price estimates to help states understand the true costs 

and benefits of using renewable energy as a compliance option." 
355 

Commenters encouraged "EPA to reconsider some of its modeling decisions to more accurately 

reflect the capacity for renewable energy deployment. First, the model used by EPA for Block 3 

uses cost data from projects completed in 2012 to estimate the future cost of renewable energy." 

"The EPA model should more accurately represent these price trends by updating the cost and 

performance assumptions for renewable energy technologies to more recently forecasted industry 

data. One way to better account for these market dynamics is to adopt a technical-economic 

potential analysis of renewable energy capacity in each state, similar to the proposed alternative 

approach, instead of using regional renewable portfolio standard (RPS) averages." 

Commenters stated that "the analysis of which renewable resources are economic should start 

with current, accurate data on the cost of renewable technology deployment. For projecting 

future economics and performance, we recommend reliance on what we believe to be credible 

projections available from the U.S. Department of Energy and the National Renewable Energy 

Laboratory." 

Additionally, commenters stated to support the following modification, which is outlined in more 

detail in the AWEA comments: Periodic review of BSER to account for new technology 

developments and cost reductions. 

Commenters suggested that "in the final rule, EPA should update its cost numbers and strengthen 

the state targets to reflect the emission reductions available based on current data on availability 

and cost." "Analysis by the Natural Resources Defense Council using the IPM model of a similar 

but more ambitious set of intensity-based targets illustrated that we could cut CO2 pollution from 

power plants by 21 to 31 percent (relative to 2012 levels) by 2020, and 25 to 38 percent by 2025. 

The reductions are equivalent to 470 to 700 million short tons relative to the Reference case in 

2020, and 560 to 860 million short tons in 2025. The estimated cost ranges from no increase over 

the Reference case to about $14.6 billion in 2020, depending on the level of emission reductions 

and the package of solutions employed. But the benefits in saved lives, reduced illness, and 

climate change avoided would be $28 to $63 billion, far exceeding the estimated costs." 

Commenters cited the NRDC's December 1 comments urging "EPA to make several changes to 

building block three in order to properly reflect the amount of renewable energy that can be 

deployed at reasonable cost. NRDC presented up-to-date data that reflect the dramatic cost 

reductions and performance improvements in renewable energy technologies such as solar and 

wind that have occurred in recent years but are not reflected in EPA's analysis. Current data 

show that wind and solar costs are each approximately 45 percent lower than EPA assumed in its 

analysis." Commenters urged "EPA to ensure that the rate of renewable energy deployment 

assumed in EPA's analysis is at least as fast as the historical rates of deployment." 

Commenters said that EPA is not capturing the full potential of RE and that the CPP needs to 

reflect the dramatic cost reductions that have occurred in recent years. 

Commenters added that "current data show that wind and solar costs are each approximately 45 

percent less costly than EPA assumed in its analysis." 

Commenters also stated that the cost results for BB3 are similar to those for BB2 and "with even 

modest corrections, renewables would clearly be less expensive on average than natural gas." 
356 

Commenters suggested the need to "Improve cost assumptions for renewable energy in 

integrated planning model (IPM) frameworks. In the alternative method for determining 

renewables targets, EPA limited the targets by the economic potential determined by IPM 

modeling. However, the assumed cost assumptions for renewable technologies are higher than 

recent real-world experience." 

Commenters stated that EPA's "assumptions about the cost and deployment rate of energy 

efficiency and renewable energy are markedly outdated." Commenters cited information from 

"Reinventing Fire (RMI, 2011) to support the argument and further say that "naturally you want 

your assumptions to be conservative, but we see no sound reason to make them much worse than 

we now observe in the marketplace let alone those we can reasonably expect from the solid 

record and durable prospect of falling costs and accelerating adoption for both efficiency and 

renewables." 

Commenters stated that cost declines have made renewable investment a great deal for utility 

customers and this is one of the reasons why utilities will meet but more likely exceed EPA's 

growth rate projections. As examples, commenters described what has happened with the 

Advanced Solar Initiative adopted by Georgia's Power Company, Alabama Power agreements to 

import cost-effective wind generation from the Midwest, along with associated renewable energy 

credits (RECs), from Oklahoma and Kansas. 

Commenters also pointed out that EPA's IPM modeling assumptions are out date. "The solar and 

wind cost declines projected by market experts are the product of rapid technological advances, 

so it is understandable that the proposal does not adequately capture them. However, EPA should 

ensure that the final rule does include updated cost projections. In addition, EPA should use 

those updated projections to more accurately quantify the amount of renewable energy that can 

be deployed at reasonable cost in Tennessee" and other states. 

Commenters stated that "EPA must recalculate the costs assigned to renewable energy, which 

would establish that it overestimated those costs and as a result underestimated the amount of 

renewable energy that can be deployed in the states, which in turn underestimated emission 

reductions that should be attributed to renewables, let alone state reduction targets." Commenters 

described the findings of the September Levelized Cost of Energy Analysis - Version 8.0 by 

Lazard Ltd in support of the statements. 

Commenters asserted that "the reformulation of Building Block 3 developed by the Union of 

Concerned Scientists is superior to either of EPA's approaches". "As far as costs go, UCS 

conservatively estimates that the demonstrated growth approach would have only a marginal 

increase in electricity prices above EPA's proposal." "Given that consumers will feel little to no 

noticeable effect in the cost of electricity under the UCS approach, there is every reason to 

believe that utilities in both regulated and restructured states will easily absorb the regulatory 

costs of this proposal. In regulated states, utilities will continue to receive guaranteed returns on 

prudent capital expenditures, while utilities in market-based systems will pass on minor costs to 

consumers without significant reductions in demand. Section 111 merely requires that a BSER 

not impose "exorbitant" costs that would cripple the regulated industry, and the additive costs of 

UCS's demonstrated growth approach are far from exorbitant." "One reason for the modest costs 

of the demonstrated growth approach is scaling effects. That is, the more widespread a particular 
357 

technology or method of generation becomes, the less costly it is to produce, install, and operate. 

This can result from traditional economies of scale, reductions in administrative burdens and 

other "soft costs" due to increased public support for the technology, and "next-of-a-kind vs. 

first-of-a-kind"-type benefits." 

Commenters further stated that "an additional feature of renewable energy is that the system 

integration costs decrease as these resources become more dispersed due to system-wide 

reductions in the variability of generation. While an individual renewable source has variability 

of generation, a larger pool of such resources distributed across a broad geographic area (such as 

a metropolitan region) have less variability and require lower backup or ancillary services costs." 

Commenters provided data to support this argument. Commenters urged "EPA to adopt the UCS' 

approach or one similar in order to maximize the role that clean energy will play in reducing 

CO2 emissions from our electricity sector. However, if EPA nevertheless decides to retain the 

basic approach it laid out in its rule proposal, EPA should make the changes discussed above to 

comply with the BSER mandate in the Clean Air Act." 

Commenters highlighted the following as main considerations that EPA fails to take into 

account: 

• EPA overestimates the cost and underestimates the potential contribution of 

efficiency (particularly compared to nuclear power). 

• EPA falls to analyze how this could affect the cost and quantity of carbon 

reduction in the next two decades. 

Commenters stated EPA ignores the potential to reduce carbon emissions by transforming the 

electricity system from the 20th century approach that increases generation to meet load to one 

that uses information and control technology to integrate distributed supply with active 

management of demand. 

Commenters stated "We do not mean to suggest that the transformation of the electricity sector is 

a simple task. While falling costs and rising renewable load factors are the engines that are 

driving the change, it requires substantial new physical and institutional infrastructure that is 

centered on system integration and management." "Cost recovery to ensure the deployment of 

adequate facilities, a problem that plagues electricity markets in general, can be compounded by 

the expanding role of decentralized resources with low operating costs. Incentives to innovate 

and compensation for intensive system management is a new challenge." 

Commenters also presented data to illustrate how the expansion of solar capacity will cause the 

daytime power demand to collapse. Commenters stated that "For companies selling electricity 

into merchant or competitive markets like California, this is disaster. Demand during what was 

one of the most profitable times of day disappears. With it, the need for part of the merchant 

disappears too, for all but the dinner hour. And that is the issue competitive generators face 

globally in the 2020-scenario: how to live off demand on two hours per day." Therefore, 

commenters added "the net load to be met by non-solar resources declines by about 17%. 

Assuming that most of that load is fossil fuel, this represents a major reduction in CO2 

emissions. This is a benefit, not a problem. However, the challenge resides on meeting the 
358 

demand during the non-daytime hours when there will be a much higher demand peak." 

Commenters stated that ensuring the reliability of this system is a challenge that requires the 

transformation of the system to two-way management of supply and demand" and cited the work 

by "Lovins" and the "Regulatory Analysis Project", which provides a number of measures that 

can be implemented in a dynamic electricity system that actively manages supply and demand. 

Commenters asked "that the EPA consider not just the fuel costs in terms of CO2 production 

involved in power generation but also the life cycle costs" and cites "the intensive amount of 

processing and manufacturing required to produce solar cells, actually puts their carbon life cycle 

cost close to that of a natural gas power plant (120 g-CO2 per kWh produced for Natural gas, 

versus 110 g-CO2/kWh solar)." 

Comment 14: Commenters described cost trends in RE without explicitly suggesting changes to 

the EPA's analysis. 

Response 14: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters presented long term cost trends for nuclear, wind and solar and use those trend to 

illustrate that "the economic competitiveness of these generation resources reflects technological 

and economic progress. Over the course of fifty years of commercial nuclear power in the 

U.S., construction costs have risen substantially and persistently and there are no indications that 

this pattern will change any time soon. The cost of small modular reactors, which have been 

touted as the next big thing to save nuclear power, are likely to be much higher than the 

renewables and investment in SMRs has collapsed, with both Westinghouse and B&W, the two 

largest firms pursuing the technology in the U.S., throttling way back on investment. Wind 

already has much lower overnight costs than nuclear and solar soon will. The projections for the 

cost of new nuclear reactors have been rising steadily for over a decade. While other factors 

affect the cost of power, construction costs are the key factors that affect the EPA analysis and 

the key factors in the current debate, particularly for the major, non-fossil fuel generation 

sources, which are very capital intensive." 

Commenters also presented and described trends in operating costs and merit order dispatch to 

illustrate that "the trends in operating costs are similar to the trends in construction costs. In 

contrast to the increasing operating costs of nuclear reactors, operating costs for wind have been 

declining. In the mid-1990s nuclear reactors would have been dispatched before wind with a 

substantial operating cost advantage. Two decades later, wind has a substantial advantage, which 

is likely to grow in the years ahead. Wind operating costs have fallen twice as fast as overnight 

costs. Thus, it is not coal or gas or subsidies that is giving aging nuclear reactors heartburn, it is

the superior economics of wind and efficiency combined with the increasing operating costs of 

aging nuclear reactors that has made the aging reactors uneconomic." 
359 

Commenters stated that "Not only are RE resources fully capable of replacing fossil fuel-fired 

generation from a technical standpoint, these clean technologies have undergone dramatic price 

reductions in both the long- and near-terms, and are now at or near grid parity with, or are 

cheaper than, fossil-fired options in many parts of the country. This trend will only increase in 

the coming years as wind and solar technology become increasingly economical in both the U.S 

and around the world." Commenters described the work of Lazard as evidence of this argument. 

Comment 15: Commenters noted that the cost of implementing renewable energy has decreased 

in recent years and urged the EPA to update its RE cost assumptions, as they are greatly 

overestimated. 

Response 15: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind and solar cost 

and performance assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that for wind, EPA projects capital costs of $2.26 per watt in 2016 to $2.04 

per watt in 2030; however, the U.S. Department of Energy (DOE) has determined that wind 

projects installed in 2013 were already much cheaper than these projections, with pricing in the 

$0.90 to $1.30 per watt range. Commenters also noted that for solar, EPA's IPM modeling 

assumes solar PV installed costs of $3,098/kW based on the Energy Information 

Administration's (EIA) Annual Energy Outlook 2013 but that more recent information compiled 

by the Natural Resources Defense Council assessed the cost of solar PV as being almost half 

that, $1,770/kW. Commenters stated that updating these assumptions would lower the levelized 

cost of solar energy from $224/MWh to $153/MWh. 

Commenters noted that solar has seen significant price declines; solar PV costs fell by about 40 

percent from 2008 to 2012, and by another 15 percent in 2013 while experience in other 

countries suggests that even greater price reductions are likely. Commenters noted that installed 

prices in the United States remain relatively high compared to other countries, which 

demonstrates the potential for additional cost declines. Commenters noted that solar cost declines 

are already translating into very low power purchase agreement ("PPA") prices in the South as 

utility-scale solar has reached lows of under 5 cents per kWh. 

Commenters also noted that the national average cost of wind power has dropped more than 60 

percent, making it competitive with new fossil fuel plants in many regions; a trend which is 

expected to continue. Commenters noted that wind pricing is at an all-time low and as a result, 

utilities are increasingly selecting wind as the low-cost option. Commenters stated that nine 

states produced more than 10 percent of their electricity output from wind power alone in 2012-

in 2007, only one state did (Environmental Defense Fund. A safe and prosperous America: 

cutting carbon pollution from power plants and deploying American innovation). Commenters 

stated that the decline in turbine prices has produced a significant reduction in the capital costs of

these projects and while EPA projects capital costs of $2.26 per watt in 2016 to $2.04 per watt in 

2030, the U.S. Department of Energy (DOE) has determined that wind projects installed in 2013 
360 

were already much cheaper than these projections, with pricing in the $900 to $1300 per kW 

range. 

Commenters noted that EPA's cost assumptions for onshore wind generation of $2,258/kW in 

2016 to $1,864/kW by 2050 are substantially higher than actually reported wind energy capital 

costs. Commenters noted that a new LBNL report documents recent low wind power prices and 

overall cost reduction trends for the wind industry and that wind energy prices are declining 

overall due to lower turbine prices and higher wind turbine performance in terms of capacity 

factor output. Commenters stated that recent turbine prices have been in the $900-$1,300/kW 

range of generation capacity with total installed average costs of $1,630/kW in 2013. 

Commenters noted that average PPA prices reached $25/MWh in 2013 and since many of the 

installed projects last year were able to qualify for the federal Production Tax Credit (PTC), or a 

similar incentive, reported PPAs may reflect a reduction of approximately $15/MWh when 

taking PTC into consideration. Commenters pointed out that average PPA prices themselves fell 

64% between 2009 ($70/MWh) and 2013 ($25/MWh). Commenters also noted that operations 

and maintenance costs associated with newly constructed wind farms dropped from $23/MWh 

(or $55/kW of installed capacity) in the 1990s to about $9/MWh (or $23/kW of installed 

capacity) for projects developed since 2010. 

Commenters noted that EPA's IPM used an installed cost of $3,364 per kW-alternative current 

(ac) for utility-scale PV starting in 2016, dropping to $2,859 per kW-ac in 2030 and $2,533 per 

kW-ac in 2050 and stated that these "forecasted prices"--even as far out as 2050--are extremely 

high and inconsistent with today's prices and trends. Commenters noted, for example, that utilityscale PV projects installed during the second quarter of 2014 averaged a price of $2,130 per kWac and notably, this price has dropped by 52% since the second quarter of 2011. Commenters 

said that similar price drops have occurred in the commercial (54%) and residential (42%) 

sectors. Commenters stated that analysts anticipate the downward cost trend to continue based on 

further economies of scale and innovation through areas such as better solar performance. 

Commenters also noted that levelized PPA prices have been dropping steadily by about 

$25/MWh per year since 2007. Commenters conducted several analyses to determine solar PV 

net dependable capacity factors for Southeastern utilities and demonstrated that tracking and 

fixed solar systems have dependable capacity factors of at least 60% and 50% in the Southeast. 

Commenters stated that these are significant levels that show that solar is particularly valuable 

because it can be used to meet generation needs when demand is highest. 

Comment 16: Commenters describe and suggest changes to the EPA's IPM modeling 

assumptions for wind energy. 

Response 16: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind cost and 

performance assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the wind capital cost assumption for the year 2016 that is used in EPA's IPM 

run, $2,258/kW in 2011 dollars, is 39% too high relative to current installed wind costs, 
361 

documented to be at $1,630/kW for installed wind project costs in 2013 by the Department of 

Energy and Lawrence Berkeley National Laboratory's dataset. Commenters stated, while wind 

costs have rapidly declined and continue to decline, with wind purchase prices falling by more 

than half over the last five years, the DOE/LBNL report estimates wind projects slated for 

installation in 2014 are likely to see an average installed cost of $1,750/kW. Commenters stated 

this is because the 2013 projects were heavily concentrated in the interior regions of the U.S., 

which has below average costs for wind plant installation relative to other regions. Commenters 

stated, thus, LBNL concludes that $1,750/kW may be a more representative indication of wind's 

current installed costs on a national basis. Regardless, Commenters stated, even in this case, the 

capital cost figure used in EPA's IPM run for 2016 is 29% too high. 

Commenters also stated IPM's wind O&M costs are also significantly too high relative to current 

costs. Commenters stated IPM assumes fixed O&M costs of $38.86/kW/year, while the 

DOE/LBNL report indicates costs of $28/kW/year in 2013, as indicated by a Bloomberg analysis 

of the pricing of 5-year full-service O&M contracts. Commenters stated, before beginning the 

more difficult task of estimating how renewable energy costs will decline in the future, EPA 

should ensure that its current year assumptions for renewable energy costs are brought in line 

with reality. 

Commenters stated the wind cost declines are not reflected in EPA's analysis and proceeds to 

provide examples with data illustrating the decline and its causes. 

Comment 17: Commenters described and suggested changes to the EPA's IPM modeling 

assumptions for solar energy. 

Response 17: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that for solar, new industry data demonstrate that EPA's IPM cost 

assumptions are significantly out of date and provides examples to illustrate the point. 

Commenters described an alternative way to perform the scenarios modeling that "includes an 

application of a dollar 30/MWh cost reduction or similar incentive for zerocarbon technologies 

and would lead to even higher levels of distributed solar deployment to achieve cost effective 

emissions reductions." "As distributed PV is a unique, customer sited generation resource, it may 

be difficult to represent the technology in a wholesale power model such as IPM. Instead, it is 

more accurate to rely on separate modeling that fully accounts for market dynamics at the 

customer level. For example, NREL has developed the Solar Deployment System model 

(solarDS), a modeling complement to ReEDS which projects distributed PV installations by state 

based on system prices, retail rates, and consumer economics." 

Commenters further stated that "Based on data from the latest U.S. Solar Market Insight Report 

(Q2 2014), the costs for utility PV are at dollar 1.81/watt, while the costs for residential and 
362 

commercial PV (which together make up the distributed solar market) are at dollar 3.92/watt and 

dollar 2.39/watt, respectively. This places solar on track or close to meet the 2030 SunShot goals. 

Therefore, the Sunshot assumptions can be used as a trendline for 2030 solar costs. "The 62.5 

percent Sunshot cost assumptions to use are: dollar 1.50/watt for utility PV as in input directly 

into the IPM model dollar 2.25/watt for residential DG PV and dollar 1.88/watt for commercial 

DG PV for use with the 62.5 percent capacity projections as inputs directly for the solarDS 

model, which is then hardwired into the IPM model."

Comment 18: Commenters stated that the IPM modeling results show that the BB3 targets are 

too costly. 

Response 18: The EPA disagrees with this comment. There is a fundamental difference 

between compliance modeling and the quantification of a cost-effective amount of building 

block 3 generation. The amount of incremental RE deployed by IPM in pursuing a least-cost 

solution in response to the application of goal rates has no bearing on the analysis the EPA relies 

on to establish building block 3 generation levels. The EPA addresses considerations related to 

the technical feasibility and associated grid integration costs of significant RE penetration in both 

the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the four parsed IPM runs that are available demonstrate that the Agency's 

Building Block 3 targets are far too costly and do not represent realistic estimates of the potential 

renewable energy generation available to achieve the Proposed Guidelines. Commenters stated 

EPA performed IPM modeling runs to assess how states would comply with the Proposed 

Guidelines under both state- focused and region-focused compliance approaches, and thus, the 

results of these IPM runs constitute EPA's estimate of representative scenarios in which the 

power sector is operating in compliance with the Proposed Guidelines at the least cost possible, 

within the constraints EPA imposes on the model. 

Commenters stated IPM model runs predict that actual renewable energy generation growth will 

meet only a small fraction of EPA's target under the least-cost approach to compliance with the 

Proposed Guidelines. Commenters stated IPM predicts that under both the state-focused and 

region-focused compliance approaches, renewable energy generation will reach only 356,063 

GWh by 2029, and will grow at an annual rate of 1.1 percent from 2020 to 2029, far short of 

EPA's target of 522,723 GWh by 2029. Commenters stated this level of generation is only 1.7 

percent greater than the renewable energy generation that EPA predicts in 2029 under its own 

Base Case analysis, and is actually 7.6 percent lower than the EIA predicts will occur in 2029 in 

the absence of any emission guidelines. Commenters stated EPA's own analysis severely 

undermines the Agency's prediction of the level of increased renewable energy generation that is 

achievable, and demonstrates that the Agency has failed to accurately consider factors such as 

cost and feasibility. Commenters stated the IPM results suggest that rapid growth in renewable 

energy generation is so costly that states are able to achieve only negligible incremental increases 

in renewable energy generation above the status quo (at best), and they must instead rely more 

heavily on other components of EPA's selected BSER in order to comply with the Proposed 
363 

Guidelines. Commenters stated this, in turn, will increase the cost of those other Building Blocks 

in ways that EPA has failed to analyze in the Proposed Guidelines. 

Commenters stated that "EPA"s own IPM runs demonstrate that EPA"s Building Block 3 targets 

are far too costly and do not represent realistic estimates of the potential renewable energy 

generation available to achieve the proposed emission guidelines. 

Commenters further described that that "EPA's IPM model predicts that under both the statefocused and region-focused compliance approaches, renewable energy generation will grow at an 

annual rate of 1.1 percent from 2020 to 2029. This level of generation is only 1.7 percent greater 

than the renewable energy generation that EPA predicts in 2029 under its own Base Case 

analysis, and is actually 7.6 percent lower than what the EIA predicts will occur in 2029 in the 

absence of any emission guidelines. This analysis severely undermines EPA's prediction of the 

level of increased renewable energy generation that is achievable, and it demonstrates that EPA 

has failed to accurately consider factors such as cost and feasibility. The IPM results suggest that 

rapid growth in renewable energy generation is so costly that states are only able to achieve 

negligible incremental increases in renewable energy generation above the status quo, and they 

must instead rely more heavily on other components of EPA's selected BSER in order to comply 

with the emission guidelines. This, in turn, will increase the cost of those other building blocks in 

ways that EPA has failed to analyze in its proposal." 

Comment 19: Commenters agreed that solar energy is cost effective and provide information in 

support even if they do not completely agree with the EPA's assessment. 

Response 19: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. 

The following are summaries of the specific public comments under this comment: 

 Commenters stated it does not advocate for the RPS approach, but agree with EPA that solar 

energy is reasonable cost as part of building block 3 under the RPS approach. Commenters stated 

that under the RPS approach, the EPA has examined the cost of implementing renewable 

measures under an RPS policy. Commenters agreed that the cost of deploying renewable energy 

measures, including solar, through state RPS policies is reasonable cost. Commenters stated that 

a May 2014 joint study from LBNL and NREL analyzing the state level cost and benefits 

estimates from RPS policies found that over the 2010-2012 period, average estimated 

incremental RPS compliance costs in the U.S. were equivalent to 0.9% of retail electricity rates 

when calculated as a weighted-average (based on revenues from retail electricity sales in each 

RPS state) or 1.2% when calculated as a simple average. Commenters stated for states with a 

restructured electricity market, this estimated incremental RPS compliance cost for retail rates 

can also be expressed in terms of the cost per unit of renewable energy required, estimated in the 

range of $2-$48/MWh. Commenters also stated for states with a regulated electricity market, the 

costs are in the range of minus $4-$44/MWh. Commenters stated the study also looked at the 

cost of renewable energy to reduce emissions through state RPS policies. Commenters stated the 

estimates of the benefits ranged from approximately $4-$23/MWh of renewable generation, 
364 

depending on the cost value assumed for CO2, cumulating to roughly tens to hundreds of 

millions of dollars on an annual basis depending on the state. Commenters stated the joint study 

also looks at a number of other benefits, including economic impacts and wholesale market price 

reductions. 

Commenters stated solar energy measures will continue to be reasonable cost because industry 

costs are expected to decline in the future. Commenters stated costs across the solar industry are 

falling rapidly, which will lead to reduced overall costs for implementing solar measures to 

reduce emissions from affected EGUs. Commenters provided additional detailed discussion on 

the following: installed costs, future installed costs, balance of system costs, and raw material 

costs. 

Commenters stated current installed costs for solar show that solar energy is already a costcompetitive emissions reduction technology and prices continue to decline rapidly. Commenters 

also stated that future costs of solar are forecasted to decline as well, citing several third-party 

verified studies. Commenters also stated that CSP, which historically has been limited to larger 

utility-scale plants and relatively fewer installations, has comparatively less price history and can 

be expected to have a more granular price trajectory. Commenters also stated for PV systems, it 

is also important to recognize the balance of system costs in comparison to the panel costs, citing 

reports that found that solar financing and other non-hardware costs now comprise up to 64% of 

the total price of residential solar energy systems. Commenters stated as total installation costs 

have declined and continue to decline at a more rapid pace than previously expected, solar is 

increasingly cost competitive with alternative sources of energy and other carbon emission 

reduction measures. In addition, commenters referenced a study which also examined the cost 

and availability of the future supply of sourced materials for PV panels which ultimately found 

no concern over the availability of PV materials even in the scenario of planned significant 

deployment of solar PV globally. Commenters stated these facts illustrate that solar energy 

measures can be implemented at a reasonable cost, and that cost should not be an impediment to 

solar energy inclusion in the BSER. 

Commenters agreed that solar energy measures can be implemented at a reasonable cost and 

provides data and examples to support this argument. Commenters also stated that "in Colorado, 

the costs of installed solar energy is coming down even more than national averages" and cites 

information about the Comanche Solar Project as example. In particular, "the costs for 

distributed solar systems have come down dramatically as well and are below the national 

average in most of Colorado. These facts prove that solar energy measures can be implemented 

at a reasonable cost, and that cost should not be an impediment to including solar energy as part 

of the BSER." 

Commenters stated that "solar energy is already a cost competitive emissions reduction 

technology" and present data on average percent drop in costs nationwide during the periods 

2010- 2013, 2010- 2014 and 2006- 2013 to support their argument. 

Commenters further stated that "with the maturation of the solar industry in Louisiana, we have 

seen both materials costs, and install costs continue to fall. As competition increases in other 

markets across the country, these factors will continue the downward trend in cost nationwide. 
365 

These facts prove that solar energy measures can be implemented at a reasonable cost, and that 

cost should not be an impediment to including solar energy as part of the BSER." 

 Commenters further elaborated on what has been reported for trends in Maryland and cites "a 

paper written by professors from Yale University, the University of Texas - Austin, the 

University of Wisconsin - Madison, and Lawrence Berkley National Laboratory, which found 

that residential and small commercial solar PV prices vary considerably across geographic space, 

as shown in the differences in the county average price per watt." "Within the Northeastern states 

diagram, Maryland's pricing is quite uniform, and closely follows national averages. The paper 

examined a data subset of roughly 100,000 recent residential and small commercial installations, 

and we are confident that their findings are an accurate representation of the Maryland market." 

Commenters argued that "Solar technologies can be deployed quickly and easily in many 

locations, making it an extremely flexible energy resource. It consumes no fuel, thereby 

shielding customers from the fuel price volatility risks associated with fossil fuel generation." 

Further commenters provided citations to documents that describe additional benefits of solar 

power. For example, commenters stated "solar PV consumes no water, unlike steam cycle 

thermal power plants such as fossil and nuclear plants, which consume enormous quantities of 

water. Solar power also provides substantial air and water quality benefits. Coal plant emissions 

cause asthma, heart disease, water pollution, and many other harmful impacts. Solar power also 

benefits electrical transmission system by providing generation at or near the point of 

consumption to lessen the strain on an aging grid and reducing the need for expensive new 

transmission and distribution infrastructure. Solar can also reduce system energy losses when 

installed at or near load centers - losses that can be as high as 20 percent at peak times." "Solar 

power can also provide significant ratepayer savings" and "the greater reliance on renewable 

energy sources like solar would help reduce the economic risks associated with overreliance on 

natural gas." "Finally, solar power investments create jobs and increased economic investment." 

In particular, "taking better advantage of the solar resource would create needed jobs in South 

Carolina." 

Commenters stated that "Arizona is the ideal state for widespread expansion of solar generation. 

Rapid growth of this technology is pushing down electricity generation costs for renewables and 

further cost reductions are expected through 2020. "The National Renewable Energy Lab 

reported that between 2008 and 2013, installed solar photovoltaic (PV) capacity increased over 

15 times in the US, and prices for PV modules fell 80%." "This strategy can achieve costeffective compliance, drive job creation and keep Arizonans' hard-earned dollars in the local 

economy." 

Comment 20: Commenters described how solar energy represent a reasonable cost to utility 

companies. 

Response 20: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of solar cost and performance 

assumptions. 
366 

The following are summaries of the specific public comments under this comment: 

Commenters stated solar energy measures should be included in the BSER because they are a 

reasonable cost system to reduce emissions from affected EGUs as solar energy measures are 

reasonable cost to utilities. Commenters stated utilities are increasingly procuring solar energy 

because solar energy technologies, including utility PV, distributed PV, and CSP, have become 

reasonable cost resources when compared to other resources. Further, commenters stated, the 

various forms of solar technologies provide significant economic benefits beyond cost, such as 

price certainty, hedge value, and avoided infrastructure investment. Commenters stated one of 

the primary methods of procurement is through a Power Purchase Agreement (PPA) with a solar 

developer. Commenters stated many utilities are now signing PPAs in the $50-$60/MWh range 

over 20 to 25 years, offering price certainty to both utilities and ratepayers without any of the 

fluctuation in costs that accompanies fossil-fuel plants, which are subject to variability in fuel 

costs throughout their operating lives. Commenters stated, in fact, Recurrent Energy, a developer 

of utility-scale solar PV, recently executed a power purchase agreement with Austin Energy in 

Texas for less than $50/MWh. Commenters stated these costs will continue to decline as 

economies of scale are achieved. 

Commenters also stated solar projects being offered and installed today show that solar is already 

cost-competitive with new and existing fossil generation in certain circumstances. Commenters 

stated for example, in 2013 Xcel Energy received approval from the Colorado Public Service 

Commission to procure 170 MW of solar strictly on a cost competitiveness basis. In addition, 

commenters stated, solar recently outbid natural gas in a competitive evaluation for utility 

resource planning in Minnesota. Furthermore, commenters stated, a recent NY Times article 

notes the following: "According to a study by the investment banking firm Lazard, the cost of 

utility-scale solar energy is as low as 5.6 cents a kilowatt-hour, and wind is as low as 1.4 cents. 

In comparison, natural gas comes at 6.1 cents a kilowatt-hour on the low end and coal at 6.6 

cents. Without subsidies, the firm's analysis shows, solar costs about 7.2 cents a kilowatt-hour at 

the low end, with wind at 3.7 cents." Commenters stated these competitive costs are one of the 

reasons utilities are looking to include solar systems as part of a balanced energy portfolio. 

Commenters also stated solar energy offers price certainty to utilities because the fuel is free 

once the system is constructed. Commenters stated this allows costs to be transparent and fixed 

over the length of the contract, which may be anywhere from 10-30 years. Commenters stated 

that even when conventional fossil-based generators offer long-term contracts, the actual energy 

price paid usually varies along with the underlying fluctuating fuel prices. As a result, 

commenters stated solar is seen as a valuable hedge against volatile fossil fuel prices. 

Commenters also stated distributed PV allows utilities to avoid significant infrastructure costs. 

Commenters cited a recent McKinsey analysis which noted the following avoided costs with the 

deployment of distributed PV: 

"The impact on national energy systems can be significant. A recent report by the California 

Solar Initiative estimated that 1 to 1.6 GW per year of solar power generated by consumers 

would supply the equivalent capacity of adding a new 500kV transmission line, estimated to cost 

nearly $1.8 billion in capital costs. Distributed generation could also provide other benefits, such 

as lower line losses due to shorter distances transmitted, productive use of unutilized real estate 
367 

(rooftops), and environmental benefits. It could be particularly relevant for heavily congested 

areas where adding new infrastructure is impractical. Distributed generation can also make the 

grid more resilient, since it would continue to function when central infrastructure is out of 

commission. If renewable generation costs continue to fall and energy storage capabilities grow 

rapidly, we can imagine entire neighborhoods or factory complexes being served through 

distributed solar power. This could make remote housing and manufacturing plants more viable 

by reducing the transmission capacity required from the grid or even eliminating the need to 

access the grid altogether." 

Comment 21: Commenters described how solar energy represent a reasonable cost to 

ratepayers. 

Response 21: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated solar energy measures are being adopted by states and utilities around the 

country because they are reasonable cost to ratepayers as well. Commenters stated ratepayers are 

typically billed for their consumption of electricity in kWhs. Commenters stated the charge per 

kWh may include transmission and distribution services, or they may be billed separately. 

Commenters also stated utility-scale solar operates much in the same manner as a traditional 

fossil fuel plant, and the energy is generally sold to utilities at the wholesale price in the same 

manner as fossil plants. Therefore, commenters stated the ratepayer will often see no difference 

on their electric bill when energy comes from a wholesale solar generator rather than a wholesale 

fossil fuel generator. 

Commenters stated similarly, distributed PV has a negligible impact on the ratepayer and has 

been shown to provide a benefit to ratepayers in many circumstances. Commenters stated the 

benefit to the ratepayer will depend largely on whether the system is owned or leased, as well as 

other factors including where on the grid the system is located. Commenters stated if the system 

is owned or leased by the ratepayer, they will often be able to sell the excess energy they 

generate back to their utility reducing their overall bill. Commenters stated if the system is 

installed pursuant to a power purchase agreement, the ratepayer may be able to procure energy at 

a rate that is lower than the rate provided by the utility through a power purchase agreement. 

Further, commenters stated, ratepayers may be able to avoid some transmission and distribution 

service costs that they would be subject to if they were purchasing energy from a central station 

plant, as the solar system is located on the customer site. 

Commenters stated there are numerous third party verified studies that have looked at the costs 

and benefits of distributed PV to the ratepayer. Commenters stated that while some studies show 

a net benefit and others a net cost to ratepayers, when taken as a whole the studies clearly show 

that distributed PV is reasonable cost to ratepayers. Commenters referenced a recent report by 

the Rocky Mountain Institute which completed a meta-analysis of 16 distributed PV cost-benefit 

studies, reflecting diverse levels of distributed PV penetration levels and included in their 
368 

comments a chart which shows a summary of the costs and benefits of including distributed PV 

to the grid. 

Comment 22: Commenters argued that solar energy is not cost effective and described the 

reasons why. 

Response 22: The EPA disagrees with this comment. The cost-effectiveness of all power sector 

resources is the result of many factors, including the existing regulatory context. The EPA 

appropriately considered current law in evaluating building block 3 generation levels. 

The following are summaries of the specific public comments under this comment: 

Commenters argued that solar energy is not cost effective and provides examples of the extent on 

which "current renewable solar generation is propped up with significant federal grants and tax 

credits", stating that without the current financial support from federal appropriations, even the 

renewable generation currently in existence would not be "adequately demonstrated". Further, 

commenters stated that "because of the need for huge federal appropriations to give this rule 

support for required renewable energy expansion, the City strongly suggests that the EPA 

devotes its attention to working with Congress to pass this rule in a separate bill, with the 

necessary funding to support it. As it stands, the creative adaptation of Section 111(d) of the 

1970 Clean Air Act still must have Congressional approval for the financial support." 

Comment 23: Commenters provided information to show that wind energy is cost effective. 

Response 23: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

In particular, commenters described a study developed by PJM, which concluded that "under its 

20 and 30 percent wind energy penetration level scenarios, there would be massive reductions in 

wholesale prices, as much as 21 billion annually in one scenario. These study results are 

consistent with a number of other studies which demonstrate that the price suppression effects of 

wind energy, when it competes with other generating resources in the wholesale electricity 

market, such as the PJM market, basically wind, when it competes, is usually one of the lower 

cost forms of energy at that time, and it will box out other types of energy that are more 

expensive, thus reducing what we call the clearing price of energy, and lowering the cost, 

ultimately, to consumers." 

Comment 24: Commenters provided considerations for analyzing RE cost-effectiveness in the 

RGGI states. 
369 

Response 24: 

Comment 25: Commenters provided cost-effectiveness considerations specific to the Southeast 

states. 

Response 25: The EPA does not rely on the data sources listed below for the final rule. The 

EPA addresses considerations related to the technical feasibility and associated grid integration 

costs of significant RE penetration in both the preamble (section V.E) and GHG Mitigation 

Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA has not adequately considered the costs associated with renewable 

energy development in the Southeast. Commenters stated EPA primarily relies on two 

inadequate cost analyses regarding its renewable energy determinations. Commenters stated, 

first, using EIA-based levelized cost assumptions, the Agency claims the cost to reduce CO2 

emissions through renewable energy deployment ranges from $10 to $40 per metric ton. 

Commenters stated EPA, however, did not provide any supporting documentation for this 

analysis, and it is unclear how the dollar per metric ton statistics were calculated, including 

whether and to what extent EPA considered the regional availability, performance, and costs of 

renewable energy resources and technologies. Regardless, commenters stated, the Agency has 

ignored integration costs stemming from the large penetration of intermittent generation 

resources (i.e., VERs). Commenters stated EPA's second cost analysis relies in part on publicly 

available reports that detail "modest" rate impacts due to state RPS. Commenters stated these 

statistics are inapplicable in the Southeast. Commenters stated through 2012, 85 percent of the 

nation's renewable electricity, motivated by RPS programs, has been generated by wind. 

Commenters stated Alabama, Florida, Georgia, and Mississippi do not have adequate wind 

resources and would need to rely on more expensive solar to meet EPA's renewable energy 

target. Commenters stated that undeniably, the cost impacts of EPA's Building Block 3 in the 

Southeast region will be substantially more than the cost impacts of current state-level RPS. As 

such, commenters stated EPA has not adequately considered the costs associated with renewable 

energy development. 

Commenters stated that using the U.S. Energy Information Agency's most recent installed costs 

for utility scale photovoltaic (PV) of $3,873 per kW, the installed cost of 4,345 MW of PV is 

$16.8 billion. Commenters stated that when determining the need for new electric generating 

facilities, Florida law requires the consideration of renewable energy resources; however, under 

these same statutes, Florida's citizens are protected from funding excessive capital projects, 

because the FPSC must also consider cost-effectiveness. Commenters stated that as costeffectiveness is a mandate under State law, they are concerned about the reasonableness of the 

cost of renewable energy technologies used to develop the Block 3 component of the Final Goal. 

Commenters stated the cost of achieving the CO2 emissions reductions using a proposed 10 

percent renewable energy component for calculating the Final Goal does not appear reasonable. 
370 

Comment 26: Commenters provided cost effectiveness considerations specific to GA. 

Response 26: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that "in both its preferred and alternative approaches, EPA's assumptions 

regarding the amount of renewable generation that can be feasibly and at reasonable cost added 

to Georgia's grid are overly conservative. As UCS notes in its report, EPA significantly 

underestimates the potential role of renewable energy in setting state targets. Several of the 

issues UCS identifies are evident in EPA's treatment of Georgia's renewables potential: EPA fails 

to account for both (1) the continued growth and falling costs of renewables projected by market 

experts and (2) the renewable energy deployment rates that states are already achieving. SELC 

agrees with UCS that EPA should revise and update several of its underlying assumptions. Doing 

so will show not only that EPA's current assumptions are reasonable, but that Georgia can in fact 

reach a much higher renewable energy target almost double the levels assumed by EPA at a 

reasonable cost." 

Comment 27: Commenters described clean energy financing alternatives, which may have an 

impact in the cost-effectiveness of RE energy. 

Response 27: The EPA addresses considerations related to the technical feasibility and costeffectiveness of significant RE penetration in both the preamble (section V.E) and GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested innovative financing alternatives that the states can consider to spur lowcarbon investment. Specifically, commenters mentioned green banks and financing mechanisms 

such as credit enhancements, on-bill financing, long-term and low-interest-rate loans, loan 

guarantees, and revolving loan funds. Commenters also described the examples of Connecticut 

Clean Energy Finance and Investment Authority and it Commercial and Industrial Property 

Assessed Clean Energy program. Commenters stated green banks can help states remove barriers 

to clean energy deployment. Commenters also said that states struggling to overcome these 

market barriers should consider clean energy financing authorities to drive new in-state 

investment. 

Commenters stated that to keep the utilities whole, they have to be incentivized to create 

programs where they make a margin or an extra margin on programs that will integrate high 

levels of renewable energy affordably because just a haphazard goal or just only solar net 

metering is really not going to get us there. 
371 

Comment 28: Commenters called for a more comprehensive analysis, going beyond cost 

effectiveness, and described considerations for states to evaluate cost benefit from the proposed 

rule. 

Response 28: The EPA has phased in the building block 3 generation levels to provide an 

appropriate planning horizon for RE investments. Cost-effective RE under building block 3 is 

not costless RE. The EPA has determined that a $37/ton cost is reasonable for building block 3. 

The EPA addresses considerations related to the technical feasibility and associated grid 

integration costs of significant RE penetration in both the preamble (section V.E) and GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated EPA's proposed renewable energy generation goals are drastically higher 

than most states can achieve within EPA's proposed timeline. Commenters stated a balanced 

assessment of renewable generation, as a supply resource that is required to determine the lowest 

cost BSER, requires an examination of all the components that are involved in producing, 

distributing, and consuming electricity. Commenters stated these components are intertwined and 

causally linked, and that no one element can be meaningfully addressed without touching on the 

others. Commenters also stated since value-of-service propositions are inherently uncertain, 

subjective, and speculative, objectively analyzing the various cost and benefit components is all 

the more difficult. Commenters stated for example, there are numerous ways to think about PV 

project economics. One common approach is to derive a benefit-cost ratio with the net present 

value (NPV) of project benefits in the numerator and the NPV of project costs in the 

denominator. Commenters stated that using this equation, a benefit cost ratio greater than one 

indicates the project is economically beneficial because the ratio can only be greater than one if 

project benefits exceed the costs. Commenters stated a ratio less than one means that costs 

exceed benefits and the project is not economically beneficial. Commenters stated EPA has 

failed to provide a methodology that would give states the flexibility needed to do this in the 

time frame required. 

Commenters stated although the benefit-cost conceptual framework is simple, there is no single, 

standard modeling approach that would be accepted by all for this purpose; the results and 

conclusions can differ depending on how the analysis is conducted. Commenters stated there are 

at least three key elements of the modeling that will affect the results: (1) the structure of the 

benefit-cost equation in terms of the variables included and how the terms are arranged; (2) the 

values assigned to the variables; and (3) the perspective from which the analysis is conducted. 

Commenters stated that the following illustrates some key costs that are borne by the utility, but 

often debated during cost-benefit analysis. Commenters stated EPA should allow these states to 

consider these as inputs to their cost models. 

1. DG does not avoid most utility fixed costs of service. The greatest cost savings from 

distributed PV resources are avoided variable fuel costs (provided that distributed PV 

generation displaces fossil fuel generation and not other renewables) or electricity 

otherwise purchased in wholesale markets. 

2. DG can result in little or no distribution cost savings because many DG systems are not 

designed to improve the safety or reliability of the grid, and generally do not provide 
372 

backup power in the case of an outage. However, one of the reasons PV is 

more appealing than other variable resources is the fact that it has a more consistent 

output with better coincidence to peak load times. 

3. Investments in the transmission and distribution system might never be completely 

avoided, just deferred. To the extent that DG actually produces fixed cost savings, 

measuring the part that the utility may avoid or defer is challenging. 

4. Even when the DG system fails to produce energy, the utility remains obligated to 

provide uninterrupted service (generation, transmission, and distribution) to the DG 

customer." 

Commenters stated utilities should have an active role in any DG cost-benefit or valuation study 

as they play an indispensable part in the integration and interconnection of PV. Commenters also 

stated utilities also have critical information on the cost to serve all customers and on the 

renewable energy project's contribution toward that cost. Commenters stated EPA appears to 

recognize the need for more time to implement its proposal in its NODA, and that EPA should 

absolutely add more time for states and any sources subject to regulation to provide 

recommendations for cost-optimal renewable generation deployment. 

Comment 29: Commenters said in order to fully assess the feasibility and potential costs of 

implementing the types of renewable goals envisioned in the proposed rule, more information is 

needed regarding the final level of renewable energy to be considered in establishing the state 

goal; the mechanisms available to resolve interstate issues regarding the "credit" for renewables 

procured in one state for the benefit of customers in other states; the mechanisms that will be 

acceptable to the states and EPA for purposes of demonstrating compliance; and, the location, 

size, and design of new renewable capacity must be known to adequately evaluate the cost of 

transmission improvements necessary to support those facilities and to assess whether additional 

generation resources are needed during periods when the renewable resources are not available. 

Response 29: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. Additional guidance on interstate issues and the crediting of 

incremental RE is presented in section VIII of the preamble. 

3.3.8 Nuclear energy 

This section discusses specifics of the EPA’s proposed approach to the inclusion of nuclear 

generation under building block 3 of the CPP. The EPA proposed to include certain aspects of 

nuclear generation in the computation of the building block 3 goals. The comments in this 
373 

section address the EPA’s proposed approach to the inclusion of nuclear generation in building 

block 3. 

Commenters have raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics.

Comment 1: Several commenters recommended that the EPA treat nuclear power equally with 

other non-emitting sources, by accounting for 100% of nuclear power generation in the baseline 

and in the BSER calculations. 

Response 1: EPA acknowledges the comments and has decided to treat zero-emitting sources 

consistently in the final rule in the following important respects. First, while the proposal 

included all existing RE but only a portion of existing nuclear in BSER and as resources eligible 

for compliance, the final rule excludes all existing RE and all existing nuclear from BSER and 

from compliance, which reflects equal treatment of existing non-emitting and nuclear sources. 

Second, from a compliance perspective, generation from any incremental zero-emitting capacity, 

including nuclear, may be recognized under rate-based compliance, which reflects equal 

treatment of nuclear with non-emitting sources for compliance purposes. Nuclear and other zeroemitting sources are equally recognized for compliance notwithstanding that incremental RE is 

in BSER while incremental nuclear is not (please see section V.A of the preamble for further 

discussion of the decision to exclude nuclear power from BSER), because either incremental RE 

or other qualifying zero-emitting measures (including incremental nuclear) may be used 

interchangeably for compliance. 

In addition, while this rule does not include an explicit measurement of nuclear power in the 

baseline or in BSER, the baseline (and hence the BSER computation which relies on that 

baseline) includes an implicit measure of avoided CO2 emissions that is captured in the effect of 

existing nuclear generation on baseline fossil-fuel fired generation and emissions. Because that 

effect is sustained in the quantification of this rule’s performance rates, existing sources will be 

required to maintain that emission performance whether or not an existing nuclear unit is retired. 

Furthermore, in the event that a nuclear unit is retired, any replacement fossil fuel-fired capacity 

built must be compliant with applicable new source performance standards for CO2. Therefore, 

EPA believes that the industry, states, and federal energy regulators will be incentivized through 

this regulatory structure to maintain low- and zero-emitting capacity wherever possible to assist 

the power sector in meeting these CO2 performance requirements. 

The following are summaries of the specific public comments under this comment:

Commenters stated that the carbon abatement value of each MWh generated by such sources is 

generally the same, regardless of whether it is generated by nuclear, hydropower, geothermal, 

solar, wind or other zero-emission sources. Commenters cited California as an example, and 

noted that the EPA would include all of the electricity generated from California's Shiloh Wind 

Power Plant, which came online in 1989; six percent of the electricity generated from its Diablo 

Canyon Nuclear Power Plant, which came online in 1985-1986; and none of the electricity 

generated from its Stenner Canyon Hydropower Plant, which came online in 1985. Commenters 
374 

also stated this different treatment occurs even though all three plants are approximately the 

same age, and when operating, all three plants provide carbon-free generation. 

Commenters stated that the EPA's differing treatment of existing zero-emission sources is not 

justified. Commenters stated that all zero-emissions generation (e.g., nuclear, geothermal, wind, 

solar and hydropower) have climate benefits and the dissimilar treatment of existing zeroemission generation is not warranted. 

Commenters continued, "Non-hydro renewable energy, nuclear energy, and hydropower receive 

vastly different treatment under the proposed rule, which EPA does not explain-let alone justifyeven though the purpose of the proposed rule is 'to address greenhouse gas emissions from 

existing fossil fuel fired electric generating units.' EPA's failure to provide such an explanation 

violates basic administrative law principles. An agency rule is arbitrary and capricious where the 

agency 'failed to consider an important aspect of the problem,' or 'offered an explanation for its 

decision that runs counter to the evidence before the agency.' Motor Vehicle Mfrs.' Ass'n v. State 

Farm Mut. Auto. Ins. Co., 436 U.S. 29, 43 (1983). A court 'may not supply a reasoned basis for 

the agency's action that the agency itself has not given.' Id. (quoting SEC v. Chenery Corp., 332 

U.S. 194, 196 (1947)). Indeed, EPA must 'explain [its] decisions with precision,' and the 

Administrator must 'cogently explain why [she] has exercised [her] discretion in a given manner.' 

Am. Lung Ass'n v. EPA, 134 F.3d 388, 392 (D.C. Cir. 1998) (second and third alteration in 

original)." 

Commenters stated that existing nuclear power plants will eventually need to be replaced as they 

retire, and it is critical to reducing U.S. CO2 emissions that they are replaced with equally nonemitting energy technologies, whether they are nuclear, renewable, hydroelectric, or fossil with 

CCS. Commenters concluded that the EPA has recognized the importance of maintaining the 

existing level of renewable zero-emitting generation by including 100 percent of existing 

renewable energy in the 2012 baseline for goal-setting, but that only protects about 15 percent of 

the country's low or zero-carbon generation. Commenters recommended, to better recognize 

existing conditions in 2012, as well as the likely future, the EPA should also include 100 percent 

of existing nuclear in the 2012 baseline. 

Commenters stated that the Proposed Rule treats existing nuclear capacity different than it does 

other large, existing sources of zero-CO2 emissions electricity, such as hydropower and 

renewable energy facilities. Commenters stated that the EPA makes assumptions about how 

much existing nuclear power is at risk due to 'continued economic challenges,' yet does not do so 

for existing hydro and renewable sources that also face economic and non-economic challenges 

that could reduce capacity through shutdowns or retirements. Commenters concluded that the 

Proposed Rule provides no rationale for treating existing CO2-emission free resources 

differently. 

Commenters stated, any and all proposed EPA rules should support and encourage the continued 

use of existing nuclear generation. Commenters said support of this zero-emissions resource is 

essential to maintaining the nation's clean air generation portfolio; the policy choices EPA made 

in this rulemaking may well dictate the fate of many of the nation's nuclear units and 

consequently the nation's ability to meet its CO2 reduction objectives. Commenters said when 

the operating license of an existing nuclear generating unit expires, the state goal for the resident 
375 

nuclear plant should be subsequently adjusted; EPA should also support the NRC's current 

license renewal process to allow further operating license extension of units with 60-year 

licenses, to no less than 80 years. Commenters said it is important that zero CO2-emitting 

resources be treated equally, regardless of age or technology, to provide cost-effective CO2 

reduction solutions for consumers. 

Commenters advocated that two basic principles govern the structure of any carbon reduction 

program: 1) Avoided emissions have the same compliance value as emission reductions, and 2) 

all zero-emission sources (nuclear, renewables, hydro, energy efficiency) displace emissions 

from affected units and should receive appropriate credit. Commenters then stated that aspects of 

EPA's proposed rule under Section 111(d) fail to meet these fundamental criteria. Commenters 

stated that renewable energy, nuclear energy and hydro receive vastly different treatment under 

the proposed rule, and that nuclear energy does not receive appropriate credit. Commenters said 

existing renewables are included in the rate-setting formula; existing nuclear energy is not (save 

for six percent of existing nuclear generation considered at risk); existing hydro is ignored. 

Commenters said EPA's proposal does not explain why different generation sources are treated 

differently under the rule, and does not provide appropriate credit for existing nuclear power 

plants. 

Commenters stated that existing nuclear should be removed from the goal setting calculation 

because it is a regional resource only affecting at varying levels 30 out of the 49 states under this 

proposal. Commenters quoted the EPA's approach for renewables: "'The EPA first quantified the 

amount of renewable generation in 2012 in each state. EPA then summed these amounts for all 

states in each region to determine a regional starting level of renewable generation prior to 

implementation of the best practices scenario. Hydropower generation is excluded from this 

existing 2012 generation for purposes of quantifying BSER-related RE generation potential 

because building the methodology from a baseline that includes large amounts of existing 

hydropower generation could distort regional targets that are later applied to states lacking that 

existing hydropower capacity. The exclusion of pre-existing hydropower generation from the 

baseline of this target setting framework does not prevent states from considering incremental 

hydropower generation from existing facilities (or later-built facilities) as an option for 

compliance with state goals." Commenters stated that the same argument could be made for 

treatment of nuclear under Building Block 3; borrowing from EPA's rationale, existing nuclear 

generation should be excluded from existing 2012 generation for purposes of quantifying BSER 

because of the regional disparity of the nation's nuclear fleet. 

Commenters stated that the proposed rule perpetuates a policy of supporting renewable 

generation while largely ignoring the contribution of existing nuclear plants in avoiding carbon 

emissions. Commenters said for example, in determining each state's initial emissions rate and its 

emissions goals, EPA has proposed to include all megawatt-hours of electricity presently 

generated by wind and solar generating facilities; doing so provides states with a strong incentive 

to preserve all such renewable resources. Commenters said however, EPA proposes to include 

only six percent of the generation from a state's existing nuclear fleet; that approach leaves a 

state largely indifferent to the early retirement of existing nuclear capacity. 

Commenters stated that, to the extent that the EPA finalizes a rule that sets rate goals instead of 

mass goals, the EPA should set initial rates and calculate interim and final goals using a system-
376 

wide rate that accurately reflects a state's entire existing portfolio of generation resources, instead 

of ignoring nearly all of the existing nuclear fleet and all hydropower generation. Failing that, 

Commenters recommended the EPA should revisit the justification for considering only six 

percent of generation from a state's existing nuclear fleet, as the six-percent approach is also 

flawed on its own terms. Commenters noted that the Proposed Rule reasons that, on average 

nationwide, six percent of the nation's nuclear facilities are at risk of premature retirement. 

Commenters stated that, in reality, the percentage of nuclear capacity at risk of premature 

retirement varies dramatically from region to region; in some areas, such as Illinois, that 

percentage approaches half of existing nuclear capacity. Commenters recommended that the 

EPA's final rule should encourage states to take all necessary steps to protect existing nuclear 

plants from retiring early, or many states simply will not achieve emission reductions, even if 

those states can demonstrate on-paper compliance with EPA's rate goals. 

Commenters stated that, in the Proposed Rule, EPA calculates a state's initial emissions rate and 

target emissions rates based upon a formula that accounts for all of the state's existing renewable 

generation other than hydropower but only six percent of its existing nuclear fleet. Commenters 

also noted that the EPA excludes existing hydropower entirely; it is not counted in a state's initial 

emissions rate or accounted for in its target emissions rates, even if the state has significant 

hydropower resources that may be facing premature retirement. Commenters stated that the 

EPA's methodology provides a state with a strong incentive to preserve all of its existing wind, 

solar, and geothermal generation, because a state's ability to meet its target will be affected by 

whether all of those renewable megawatts remain operational. For instance, closure of any wind 

power facility will require the state to find an equivalent amount of zero-carbon generation just 

to keep its calculated emissions rate the same. But Commenters stated that the EPA's goals 

provide a very weak incentive to preserve the existing nuclear fleet; even if all of a state's 

existing nuclear capacity were to retire, the state would be able to retain the same calculated 

emissions rate by finding new zero-carbon generation totaling just six percent of the retired 

nuclear generation. Commenters noted that the loss of the remaining 94 percent will be 

immaterial to the state; the state could still comply, even if it replaced the remaining 94 percent 

with generation from new NGCCs, thereby significantly increasing its total emissions. 

Commenters provided the example of a nuclear plant that generates 10 million MWh annually. 

Commenters stated the Proposed Rule would require a state to replace that nuclear plant with 

only 0.6 million MWh of wind, and the remaining 9.4 million MWh of lost nuclear capacity 

could be replaced by new NGCCs, thus massively increasing carbon emissions, without 

undermining the state's ability to comply. Commenters noted that the Proposed Rule's approach 

is even worse for hydropower: even if a state loses all of its hydropower capacity, there will be 

no effect on its calculated emissions rate; the state can, without consequence, replace retired 

hydropower with new fossil-fired generation. Commenters concluded, in short, the EPA creates 

insufficient incentives for states to prevent the premature retirement of carbon-free generation 

(and may drive states to keep 111(b) units out of 111(d) calculations). 

Commenters stated that there is no reason why only six percent of a state's nuclear capacity 

should be counted in the state's initial and target emissions rates, as though the remainder of the 

state's nuclear capacity does not exist; likewise, there is no reason to omit hydropower. 

Commenters stated that all of a state's existing nuclear and hydropower capacity is available as 

zero-carbon resources and should be counted accordingly. 
377 

Commenters also stated that new and existing fossil fuel plants should not get more credit for 

CO2 reductions than zero-carbon generation. Commenters stated for example, consider 

following this treatment to its logical conclusion in a true rate-trading system. Suppose an 

illustrative state's emissions rate target were 1,286 lb/MWh. An NGCC with a CO2 emissions 

rate of 900 lb/MWh would be credited with 386 lb/MWh. Nuclear power emits no CO2 per 

MWh, which should mean it would receive a credit equal to the target, or 1,286 lb/MWh. 

Commenters said however, because only six percent of nuclear generation counts in the proposed 

formula, it is credited with only 77 lb/MWh. Nuclear would have to generate five times the 

MWh to receive the same CO2 credit as one MWh of natural gas. Commenters said if the credits 

have financial value, this creates a subsidy to natural gas at the expense of zero-emitting nuclear 

generation. 

 Commenters stated whether it is generated by nuclear sources or other carbon-free sources, the 

carbon abatement value of each kilowatt-hour of electricity generated is generally the same. 

Commenters said, in California, for example, EPA would include all of the electricity generated 

by California's Shiloh Wind Power Plant, which came online in 1989; six percent of the 

electricity generated by the Diablo Canyon Nuclear Power Plant, which came online in 1985-

1986; and none of the electricity generated from the Stenner Canyon hydropower plant, which 

came online in 1985. Commenters said yet all three plants are approximately the same age and, 

when operating, all three plants provide carbon-free electricity, displacing carbon emissions from 

affected sources. If anything, commenters remarked, nuclear generation is more important to 

reducing carbon, not less. Commenters stated that EPA acknowledges as much through the costeffectiveness evaluation in the proposed rule. Commenters noted, there, EPA notes that the cost 

of keeping "at risk" nuclear plants operating is approximately $12-$17 per metric ton of CO2 

avoided (see 79 Fed. Reg. at 34,871), which is more cost-effective than virtually any other 

carbon abatement strategy. Commenters said, for example, preventing the early retirement of 

nuclear plants is more cost-effective than: adding renewable capacity ($10-$40 per metric ton of 

CO2 abated). Id. at 34,858; increasing natural gas combined cycle power plant utilization rates to 

70 percent ($30 per metric ton of CO2 abated). Id. at 34,865; implementing demand-side 

management programs ($16-$24 per metric ton of CO2 abated). Id. at 34,875. Commenters 

stated that these data demonstrate that ignoring the vast majority of nuclear generation in the 

Clean Power Plan is not justified, given the carbon abatement benefit it provides. 

Comment 2: Treat nuclear power plants equally with other non-emitting sources by excluding 

from them from the goal-setting methodology, but allow states to count new, uprated, and 

relicensed facilities to count towards compliance. 

Response 2: EPA agrees with commenters that the final rule should not include nuclear 

generation in the goal-setting methodology. The final rule allows states to count new and uprated 

factilities to count towards compliance. Relicensed facilities can only count towards compliance 

to the extent that there is an uprate in their capacity. Preamble sections V.A, VIII.K and VIII.L 

provide a discussion of how incremental generation from new and uprated nuclear power is 
378 

addressed in relation to other sources and as approvable actions to include in state plans, as well 

as how the final rule addresses interstate effects. Similar to other qualifying compliance 

measures, incremental nuclear may be claimed by sources in a state other than the state in which 

the qualifying incremental nuclear is located (subject to the conditions explained in section VIII 

of the preamble). 

This final rule does not recognize re-licensing of existing nuclear units as a qualifying emission 

reduction measure for compliance. The avoided emissions impact of such units is already 

implicitly captured in the 2012 baseline data that represent existing EGU performance before the 

application of the BSER. As a result, if the EPA were to allow compliance credit for generation 

from these existing nuclear units following a re-licensing procedure, that credit would effectively 

double-count the emissions impact of that generation and thus improperly relieve existing EGUs 

of the intended emission reduction requirement incorporated in BSER. 

The following are summaries of the specific public comments under this comment:

Commenters stated that the EPA should treat under-construction, relicensed, and uprated nuclear 

facilities the same as it treats RE facilities: it should exclude these facilities from the state goalsetting methodology, but allow states that build new facilities or uprate or relicense existing 

facilities to count the generation from those facilities toward compliance. Commenters stated that 

just as the EPA has excluded states' full RPS commitments (as well as states' under-construction 

RE capacity) from state goals, so too the EPA should exclude under-construction nuclear energy 

from state goals; and just as the EPA has ignored at risk hydro and RE in setting state goals, so 

too should the EPA exclude consideration of at risk nuclear generation in calculating state goals. 

Commenters stated that the EPA's proposed treatment of under-construction nuclear generation 

is arbitrarily more punitive than the EPA's treatment of other zero-carbon generation. 

Commenters first stated that, although the EPA's proposed goal-setting methodology assumes 

that every state that has committed to constructing new nuclear capacity will do so, the agency is 

not assuming that states that have committed to ambitious RE policies (e.g., through a state RPS) 

will construct the amount of RE capacity that is called for by their own RPS policies. 

Commenters noted that California's RPS requires the state to meet 33% of its retail load from 

renewable energy by 2020; Colorado and Minnesota's goals are 30% by 2020; yet the EPA's 

goal-setting methodology only expects California and Colorado to meet 21% of their in-state 

generation from renewable resources by 2030, while Minnesota must only reach 15%. 

Commenters further stated that this inconsistency is especially puzzling given RE commitments 

are enforceable through RPS regulatory programs, while commitments to build new nuclear 

generation are not mandated through any state regulatory requirement. Commenters concluded 

that the EPA has no choice but to correct its BSER methodology by excluding underconstruction nuclear capacity from its calculation of state goals, just as it excludes underconstruction RE capacity from that calculation. Commenters also concluded that the EPA must 

allow states to count 100% of the MWh generated from under-construction nuclear facilities 

toward state goals, as the agency has already proposed to do for other under-construction zerocarbon generation (such as wind and solar facilities). 

Commenters stated that nuclear is a proven technology for power generation, but nowhere has it 

been demonstrated that developing nuclear is a method for reducing unrelated fossil fuel EGU 
379 

including where nuclear power plants and affected fossil fuel-fired EUGs are owned and 

operated by separated entities. Commenters said EPA notes in the proposed guidelines, Section 

402(i) of the Energy Policy Act of 2005 (EPAct05) states: "No technology, or level of emission 

reduction, solely by reason of the use of the technology, or the achievement of the emission 

reduction, by 1 or more facilities receiving assistance under this Act, shall be considered to be - 

(1) adequately demonstrated for purposes of section 111 of the Clean Air Act..." 42 U.S.C. 

Section 15962(i). Commenters said that Congress crafted limitation broadly with respect to 

"facilities receiving assistance under this Act [i.e., the EPAct]." Commenters said that tax credits 

and loan guarantees were provided for nuclear reactors under the EPAct. 

Commenters stated that since nuclear energy is the largest source of carbon-free electricity in 

America, by a substantial margin, it is clear that any program to reduce carbon emissions must 

preserve existing nuclear generating capacity, provide an incentive for new nuclear plant 

construction and certainly must not create a disincentive for new nuclear generating capacity. 

Commenters said, absent this, any program to reduce carbon emissions is simply not credible. 

Commenters said EPA is to be commended for having recognized the value of nuclear energy in 

its proposed rule. Commenters said that the key questions are whether the approach proposed by 

EPA is equitable and, based upon the rulemaking record, internally consistent, workable and 

likely to achieve the intended effect. Commenters asserted, unfortunately, by all four criteria, 

EPA's 111(d) proposal is deficient. Commenters remarked that two basic principles must govern 

the structure of any such program: Avoided emissions have the same compliance value as 

emission reductions, as discussed above, and All zero-emission sources (nuclear, renewables, 

hydropower, energy efficiency) displace emissions from affected units and should receive 

appropriate credit. Commenters stated that aspects of EPA's proposed rule under Section 111(d) 

clearly do not meet these fundamental criteria. Commenters said renewable energy, nuclear 

energy and hydro receive vastly different treatment under the proposed rule, but nuclear energy 

does not receive appropriate credit. Commenters said existing renewables are included in the 

rate-setting formula; existing nuclear energy is not (save for six percent of existing nuclear 

generation considered at risk); existing hydro is ignored. Commenters stated that EPA's proposal 

does not explain why different generation sources are treated differently under the rule. 

Commenters noted that EPA is required to explain its rationale for this treatment of nuclear 

energy. (15 See, e.g., Oklahoma Dep't of Envtl. Quality v. EPA, 740 F.3d 185, 192 (D.C. Cir. 

2014) ("EPA has a preexisting duty to examine key assumptions as part of its affirmative burden 

of promulgating and explaining a non-arbitrary, non-capricious rule and therefore must justify 

that assumption." (internal quotation marks and ellipses omitted)); Horsehead Resource Dev. Co. 

v. Browner, 16 F.3d 1246, 1269 (EPA may not rely on "speculation" in setting rules, as 

"speculation is an inadequate replacement for the agency's duty to undertake an examination of 

the relevant data and reasoned analysis").) Commenters stated that EPA's failure to provide such 

an explanation raises problems with respect to basic principles of administrative law. 

Commenters said an agency rule is arbitrary and capricious where the agency "failed to consider 

an important aspect of the problem," or "offered an explanation for its decision that runs counter 

to the evidence before the agency." Motor Vehicle Mfrs.' Ass'n v. State Farm Mut. Auto. Ins. 

Co., 436 U.S. 29, 43 (1983). Commenters said a court "may not supply a reasoned basis for the 

agency's action that the agency itself has not given." Id. (quoting SEC v. Chenery Corp., 332 

U.S. 194, 196 (1947)). Commenters concluded, stating that EPA must "explain [its] decisions 

with precision," and the Administrator must "cogently explain why [she] has exercised [her] 

discretion in a given manner." Am. Lung Ass'n v. EPA 134 F.3d 388, 392 (D.C. Cir. 1998) 
380 

(second and third alteration in original).Commenters stated that the EPA's proposal for reliance 

on renewables and energy efficiency functionally operates as a de facto national renewable and 

energy efficiency portfolio standard, albeit with a small carve-out for "at-risk" nuclear generation 

capacity, and that the EPA should not discriminate along low-carbon generation sources in its 

proposed rule. Commenters stated that, alternatively, the EPA should provide a carve-out for 

nuclear generation of 20 percent in Building Block #3. 

Commenters stated that the EPA's approach of attempting to forecast capacity increases 

separately for low-emission sources such as renewable, energy efficiently, at-risk nuclear and 

new nuclear should be discarded in favor of adopting an aggregated total of low-carbon 

generation, regardless of source. Commenters said this bank of low-carbon emission capacity 

could then be allocated on a state-by-state basis as clean energy goals that the individual states 

can determine how best to achieve the needed capacity. 

Commenters stated that it appears the EPA arbitrarily chose to use 6 percent when in reality over 

half of the U.S. nuclear operating fleet could be forced to retire over the next several decades, if 

the proper and appropriate incentives are not provided for. Commenters stated that, in contrast, 

the EPA has included 100 percent of the existing renewable generation capacity in this building 

block. Commenters recommended that nuclear energy generation should be treated equivalently. 

Commenters stated that existing wind and solar EGUs are provided a full 100% credit in the 

BSER baseline calculation under the proposed regulation, and BSER baseline determination 

formula should be amended to include 100% of each state's nuclear generation. 

Commenters stated that, since the goal of the proposed rule is to reduce carbon emissions, 

carbon-free nuclear generation that comes online after the 2012 baseline of this rule should be 

treated the same as other new carbon-free generation sources. 

Commenters noted that existing wind and solar EGUs retired before 2030 would require a 

"megawatt-for-megawatt" replacement with another non-emitting technology. Commenters 

stated that nuclear power should be treated the same, by amending the BSER baseline rate 

determination formula to include 100 percent of each state's nuclear generation. 

Commenters stated that states only get credit for preserving 6 percent of its existing nuclear fleet 

against future emissions reduction targets, while the EPA allows 100 percent of a state's existing 

renewable fleet to count towards future goals. Commenters stated that all emissions-free power 

should be treated equally under the rule and this arbitrary cap should be removed. 

Commenters stated that the rule doesn't give even or balanced credit for existing clean sources, 

because nuclear power is not given the same weight, in terms of carbon credit, that renewables 

are. Commenters stated that nuclear generation should not be replaced by sources like wind and 

solar for the sake of "progress," when the result actually will be destabilization of the grid, and a 

likely increase in GHG emissions since renewable sources will in all likelihood be backed by 

natural gas combined-cycle plants. 

Commenters stated that the EPA should explicitly support a policy whereby all carbon-free 

electric generating capacity is treated equally. 
381 

Commenters stated that the EPA has promoted the Proposal on the basis that it would help cut 

carbon emissions from the power sector by 30% from 2005 levels, however, none of the five 

under construction nuclear units were operating or under active construction in 2005. 

Commenters also stated that the EPA imposing a benchmark for these nuclear units that it does 

not apply to other actions EPA has designated as BSER. Commenters stated that individual 

energy efficiency projects and programs already planned are not identified by the EPA or 

captured in the rate-setting calculation; neither are any renewable energy projects, even though 

there are specific renewable energy projects that are "under construction." Commenters stated 

that available data suggest there are over 12,000 MW of wind capacity currently under 

construction in the U.S. and over 2,820 MW of solar energy projects, and that the EPA has not 

explained why it chose such starkly different - and completely arbitrary - approaches for under 

construction solar/wind as compared to under construction nuclear. 

Commenters stated that there are two important inconsistencies between how renewables and 

nuclear are treated. First, Commenters stated that the EPA's proposal assumes that nuclear 

generation must only count towards compliance for the state in which the resources is located, 

whereas the proposal suggests that renewable generation may count toward compliance in the 

state responsible for the development of the resource, instead of the state in which the resource is 

located. Commenters stated that in the preamble to its proposal, EPA notes that "a state could 

take into account all of the CO2 emission reductions from renewable energy measures 

implemented by the state, whether they occur in the state or in other states," but that the EPA's 

proposal contains no indication that increased nuclear generation in one state could count as 

credit in another's compliance demonstration. Commenters also asked additional guidance 

regarding how renewable energy generated in one state could be credited to another state without 

"double counting," which the commenters agreed would be a difficult and important concern. 

Commenters stated that the second inconsistency is that the EPA's proposal would allow credit 

for increased generation from existing renewable resources, but the commenters states that the 

EPA's proposal indicates that increases in generation from existing nuclear units will not count 

towards compliance. Commenters requested that the EPA should either ensure all zero-emitting 

generation is credited to the state in which the resource is located, or allow credit for all zeroemitting generation to cross state lines, regardless of whether it is renewable or nuclear. 

Commenters stated that the rule as written reduces the importance of nuclear energy in meeting 

emissions goals, and if nuclear were accounted for as wind and solar are, emissions standards 

would be much more stringent and states would be more incentivized to build and maintain low 

carbon sources of power. Commenters also stated that, if nuclear were accounted for as wind and 

solar are, states which closed nuclear facilities would have to replace that zero carbon power, 

watt per watt, which would be incredibly difficult to do with renewables alone. Commenters 

concluded that this is in stark contrast to wind and solar, in which 100% of existing wind and 

solar is credited in target setting. 

Commenters recommended that nuclear plants should be treated equally with other non-emitting 

sources, by amending the BSER baseline rate formula to include 100 percent of each state's 

existing nuclear generation. Commenters also recommended that the EPA should "acknowledge 

and reward states with new nuclear plants under construction" by removing new nuclear plants 

under construction from the BSER formula and allow states to count the avoided emissions 

toward their compliance plans once they are operational. 
382 

Commenters believed the proposed rule contains two major flaws that, unless corrected, would 

render the rule at best ineffective and at worst counterproductive to the goal of reducing power 

plant carbon emissions. Commenters provided two recommendations that, if adopted, would 

rectify some of the rule's shortcomings and provide an important incentive for preservation of the 

existing fleet and the deployment of new nuclear generating capacity. 

1. Treat existing nuclear plants equally with other non-emitting energy sources 

Under the proposed rule, the EPA seeks to set state-specific carbon emission standards using a 

Best System of Emission Reduction (BSER) calculation. The BSER formula provides all states 

with nuclear energy facilities credit equal to 5.8% of their 2012 capacity toward achieving their 

carbon reduction goal. This percentage was derived from an Energy Information Administration 

(EIA) estimate that six plants, comprising 5.8% of the U.S. generation capacity, are "at-risk" of 

closure before 2030. Unfortunately, the at-risk plants identified by the EIA are unique cases local 

to a few states. Other DOE scenarios envision retirement rates of as high as 33% by 2030. In 

order to understand the insufficiency of the proposed credit for at-risk nuclear, consider the 

following scenario: One of the six "at-risk" plants closes in a particular state. Ten percent of the 

resulting loss in output is replaced by wind and solar generation; the remaining 90% is replaced 

by natural gas plants. Under the proposed rule, the state could claim a "reduction" in carbon 

emissions, even though its actual output of CO2 would increase substantially. Indeed, members 

of the University of Tennessee ANS Student Section analyzed a hypothetical scenario (submitted 

to this docket under separate cover) in which all U.S. nuclear plants were closed and replaced 

with combined cycle natural gas generation. They found that at least 15 states could claim a 

fictitious "reduction" in carbon emissions under the BSER formula. In contrast, existing wind 

and solar EGUs are provided a full 100% credit in the BSER baseline calculation under the 

proposed regulation. As such, any retirement of these units before 2030 would require a 

"megawatt-for-megawatt" replacement with another non-emitting technology. Clearly, the 5.8% 

at-risk nuclear credit, while perhaps well-intentioned, would defeat the underlying purpose of the 

proposed regulation, promote greater use of fossil fuels, and encourage the premature shutdown 

of the current US nuclear fleet. ANS recommendation: amend the BSER baseline rate 

determination formula to include 100 percent of each state's existing nuclear generation. 

2. Acknowledge and reward states with new nuclear plants under construction 

Currently, there are five new nuclear plants under construction in the U.S., Watts Bar 2 in 

Tennessee, Vogtle 3-4 in Georgia, and Summer 2-3 in South Carolina. The states in question 

have each made a deliberate policy decision to support the construction of new nuclear 

generating capacity in order to meet its expected electricity demand and reduce its carbon 

emission in expectation of future binding federal regulations. Under the proposed rule, the EPA 

includes the carbon reduction benefits of these projects in its BSER determination as though they 

were in an operational status today. This is in stark contrast to its treatment of non-emitting 

EGUs currently under construction using other advanced technologies such as carbon capture 

and storage (CCS), which are not included in the baseline determination and can be applied in 

full to the host state's compliance plan. Whether intended or not, the EPA's treatment of under 

construction nuclear plants is punitive in nature, penalizing those "early adopter" states that have 

assumed significant financial risks in order to make substantial reductions in carbon emissions 

through the use of nuclear energy technology. As such, we strongly encourage the EPA to move 
383 

under construction nuclear plants out of the BSER baseline and instead allow the affected states 

to count the emission reductions as part of their compliance strategies. 

Commenters stated that the EPA's approach does not treat nuclear energy "on par with other 

zero-emission options such as wind and solar." Commenters then suggested several alternatives 

that "...might better recognize the low carbon benefits of nuclear energy." 

Commenters stated as proposed, despite attempts by EPA to recognize and reward existing atrisk nuclear units, the way existing nuclear plants are treated under the rule creates risks of shut 

downs and large increases in emissions. Commenters said the approach does not treat nuclear 

energy (both existing and new) on par with other zero-emission generation options such as wind 

and solar. 

Commenters stated currently EPA allows 5.8 percent of at-risk nuclear plants to count towards 

compliance; (This contrasts with EPA's proposal to recognize 100 percent of existing non-hydro 

renewable energy.) however, because the 5.8 percent is applied on an equal basis to all nuclear 

generation, it does not offer sufficient incentive to the specific units in competitive power 

markets that are most at-risk (and provides a subsidy to those not at risk). Commenters added the 

proposal assumes that existing nuclear generation will continue to operate past the 2030 

compliance year; this may not be the case, as units start hitting the 60-year threshold in 2029, 

after which relicensing will be needed. Commenters said to the extent that nuclear plants are not 

relicensed (and many smaller units may not be due to economic reasons), this would have a 

significant impact on emissions and compliance after 2030. Commenters said a concern was 

raised about not rewarding under-construction nuclear plants for early action; instead, states are 

essentially penalized if the plants don't operate at 90 percent capacity. (In contrast, all new wind 

and solar generation under development would be allowed to earn credits towards compliance 

starting in 2020.) Commenters said several alternatives were suggested that might better 

recognize the low carbon benefits of nuclear energy: 

• Leave existing nuclear energy out of rate-setting, but count losses. This way, the 

state goal is not lowered as a result of nuclear energy, but retirements would 

increase the actual lbs/MWh emission rate (by reducing generation or increasing 

emissions), making the state goal harder to meet and creating a strong incentive 

for states to incent at-risk nuclear. 

• Include 100 percent of existing nuclear energy in the rate setting formula (the 

same as how non-hydro renewable energy is treated) and count existing nuclear 

energy towards compliance. This approach would drive down state intensity goals 

and creates a powerful incentive to keep operating the existing nuclear power 

plants. (This is because reductions in nuclear plant operation could create a 

substantial compliance gap for the host states and affected units in those states.) 

• Remove existing nuclear from rate setting and compliance, but count new nuclear, 

including up-rates, new plants and relicensing. This would have the effect of 

encouraging existing plants to remain on-line and (eventually) extend operations 

through relicensing. To the extent that states rely on nuclear energy, this approach 

would also lead to higher (less stringent) state emission rate goals. 
384 

• Allow existing nuclear energy to count in the rate setting formula and for credit to 

the extent that it operates above the national fleet-wide average capacity factor of 

about 80 percent. This would encourage full utilization of existing nuclear energy 

capacity and appears more objective than determining which plants are most atrisk. However, this approach would advantage nuclear plants that are least at-risk. 

This could be a solution for under constructionnuclear plants. 

• If existing nuclear energy is included in the state goal, allow the state to adjust its 

goal in the event that the NRC rejects renewal and/or if a company decides not to 

renew its nuclear license or otherwise retires early. This would reduce the risk to 

states of non-compliance due to non-renewal, but it would not incent relicensing. 

It may be desirable to protect states against nuclear retirements for safety reasons 

but not for retirements for purely economic reasons. Making use of this option 

would allow an increase in emissions." 

Commenters stated it is very important to Nuclear to be included with Clean Energy. 

Commenters provided comments and changes: 

1. Treat existing plants equally by including 100% of their current output in the baseline 

CO2 calculation. 

2. Allow states with new plants under construction to count their clean energy generation 

toward their EPA emissions target. 

Commenters stated that the EPA has proposed that states can use renewable energy generated 

from outside their boundaries in their compliance demonstrations under a rate-based program, 

and advocated the same treatment for nuclear generation. Commenters stated the EPA should 

recognize that generation from new nuclear power plants will cross state boundaries and should 

allow the importing state to factor the generation into its compliance demonstration. Commenters 

said the EPA is not proposing to allow equal treatment for nuclear generation, but it must. 

Commenters stated Duke Energy operates in and serves customers in, among other states, North 

Carolina and South Carolina; Duke Energy has applied for a combined operating license for the 

Lee Nuclear Station, which if built, will be located in South Carolina. Commenters said the fact 

that it would be built in South Carolina, however, does not mean that it will exclusively serve 

their South Carolina customers; the electricity that would be produced from the Lee Nuclear 

Station would serve customers in both states. Commenters said the North Carolina customers 

would pay the largest share of the cost of the facility; and while the generation that comes to 

North Carolina from the Lee Nuclear Station would help lower the CO2 emissions of the North 

Carolina operations, under the Proposed Guidelines, North Carolina would be prohibited from 

considering any of the generation from the Lee Nuclear Station in its compliance determination 

unless North Carolina and South Carolina develop a joint plan. Commenters said this does not 

make sense and believes that the EPA should allow a state such as North Carolina that is 

importing electricity from a new nuclear unit in another state to be able to factor that generation 

into its compliance demonstration, as long as it is not being double counted by the state hosting 
385 

the nuclear facility. Commenters said this would simply treat generation from new nuclear units 

the same way the EPA is proposing to treat generation from renewable resources. 

Commenters stated that the EPA allows all MWhs generated by renewables such as solar and 

wind to be included in compliance plans, regardless of the potential for retirement. Commenters 

said this favors wind and solar over nuclear, without any discernible justification or legal 

authorization. 

Commenters stated EPA has also chosen to treat various zero emission generation resources 

differently; EPA has included the "At Risk" designation for a portion of existing nuclear 

capacity, but allows all MWhs generated by renewables such as solar and wind to be included in 

the compliance plans, regardless of the potential for retirement. Commenters said the EPA favors 

wind and solar over nuclear, without any discernible justification or legal authorization; as a 

practical matter, nuclear generation is base load and doesn't have the intermittency challenges of 

solar and wind and thus does not require back-up generation, which is fossil and carbon emitting. 

Commenters said nuclear should have been given preference over renewables, and should not 

have been penalized by the EPA; to do so is arbitrary and capricious and outside of the authority 

granted to the EPA under the Clean Air Act. 

Commenters stated if the CPP's goal is to regulate carbon emissions, then generation types must 

be valued based on emissions with no one type of generation being favored over another; 

therefore, clean nuclear generation must be credited the same as renewable clean energy sources 

at 100%. 

Commenters were concerned the CPP does not encourage the use of nuclear power; specifically, 

the BSER provides a 5.8% credit to a generator's 2012 nuclear capacity in states with nuclear 

generating facilities. Commenters recommended clean nuclear generation is credited the same as 

renewable clean energy sources at 100%. 

Commenters continued in addition to the environmental impacts of nuclear power facilities 

shutting down, jobs will be lost and local economies will be hurt. Commenters said roughly 550 

employees work at a nuclear facility performing routine maintenance and operations; 

approximately 3,500 construction workers are employed when a new facility is built. 

Commenters recommended nuclear energy be a part of the solution and considered on an equal 

playing field with other non-emitting energy technologies such as solar and wind; generation 

types must be valued on emissions without favoring one over another. 

Commenters stated states also should be able to include in their compliance plans, and thus 

receive emissions credit for, all output of new nuclear capacity (including uprates of existing 

plants and existing license extensions) that begins operating after the issuance date of the EPA's 

Proposed Rule. Commenters said the Proposed Rule allows this with new renewable generation, 

and this principle should be extended to include other forms of zero carbon generation, such as 

nuclear. 

Commenters suggested that the EPA would consider allowing states to include power uprates 

and additional new reactors in their plans, credited at 100% of the additional capacity relative to 
386 

the baseline year, even though power uprates and additional new reactors are not included in the 

goal. 

Commenters - stated that, for many years in advance of this proposed rule, electric providers in 

South Carolina took major steps to decrease their carbon emissions, and that electric providers 

and their customers have already invested billions of dollars in order to be leaders in the clean 

energy movement by building two new nuclear generating facilities. 

Commenters suggested that the proposed rule uses several arbitrary distinctions and baselines 

when seeking to capture under construction nuclear in the state goals. Commenters said that the 

proposed rule makes an arbitrary distinction between (a) states where nuclear units are currently 

under construction and (b) states where no such units are under construction. Commenters said 

that there is no sound, objective, and lawful basis to impose vastly different state goals on this 

distinction. Commenters said that in a recent article for the Brookings Institute explains that 

"EPA's approach of including under-construction nuclear capacity in setting state goals would 

draw an arbitrary distinction between states that have already invested in new reactors and states 

considering but not yet building new reactors" Commenters said that GEPD has commented to 

EPA: "We see no reason that under-construction nuclear should be treated any differently than 

yet-to-be planned nuclear.". 

Commenters suggested that, EPA's apparent distinction between under construction nuclear and 

yet-to-be-planned nuclear is similarly flawed. Commenters said that EPA seems to imply that, 

because it has in other rulemakings distinguished between affected sources that have 

"commenced construction" as of the date of a proposed rule and those that have not commenced 

construction, EPA can, for purposes of determining BSER, distinguish between under 

construction nuclear units and those that are not yet planned. Commenters said that neither new 

nor under construction nuclear units are "affected sources" under section 111. Commenters said 

that there is no precedent or legal rationale for EPA's proposed approach. 

Commenters suggested that the Proposed Rule makes an arbitrary distinction between (a) 

existing nuclear capacity and (b) under construction nuclear capacity. Commenters said that for 

existing nuclear capacity EPA reflects 6% of the total existing generation in the rate-setting 

calculation. Commenters said that for under construction nuclear capacity, EPA reflects 100% of 

the anticipated generation from the new units. Commenters said that, if these units were 

operational before the Proposed Rule, EPA would account for just 6% of their generation in the 

rate-setting calculation, but because these projects remain under construction, EPA has proposed 

to reflect 100% of their generation in the calculation. 

Commenters suggested that the Proposed Rule arbitrarily ignores its own use of 2005 as a 

relevant benchmark. Commenters said that the Administration has repeatedly stated that a 

primary environmental objective is to reduce GHG emissions in the United States "in the range 

of 17 percent below 2005 levels" by 2020.56 Commenters said that EPA has also promoted the 

Proposed Rule on the basis that it would "help cut carbon emissions from the power sector by 30 

percent from 2005 levels." Commenters said that EPA now proposes to treat these five nuclear 

units, which were not operating or under active construction as of 2005, in a manner that 

essentially eliminates any positive credit their host states would receive as a result of these zero-
387 

emission power plants. Commenters said that this calls into question EPA's approach to under 

construction nuclear units. 

Commenters suggested that EPA's treatment of under construction nuclear facilities is arbitrarily 

different from its treatment of renewable energy. Commenters gave an example that EPA does 

not include specific renewable energy projects that are "under construction" in the state goals 

calculation, even though renewable energy projects are also identifiable. Commenters said that 

available data suggest there are over 12,000 MW of wind capacity and over 2,820 MW of solar 

energy projects currently under construction in the United States. Commenters said that EPA has 

not explained why emission reductions from under construction nuclear facilities are included in 

state goals, but emission reductions from other zero-carbon facilities are ignored. 

Commenters stated that EPA arbitrarily distinguishes between existing and new zero-emitting 

resources in the proposal. Commenters said the existing zero-carbon sources are discounted, 

while not-yet-constructed sources are allowed to be counted towards compliance with state 

goals. Commenters said this incorrect interpretation of Section 111, which requires standards of 

performance to be based on technology that has been adequately demonstrated for sources in the 

listed source category. Commenters said if this approach were applied to a traditional pollution 

control device, sources that had already installed scrubbers prior to the proposal would not be 

able to rely on emission reductions resulting from operation of the scrubbers, simply because 

they were built before the proposal, incentivizing them to dismantle their existing scrubbers and 

build new ones after the proposal date. Commenters said EPA's approach creates absurd 

incentives and ignores the significant costs that have already been incurred by sources that 

support zero-carbon generation. 

Commenters stated the costs, non-air impacts and long-term planning considerations render 

nuclear energy unsuitable for designation as BSER. 

Commenters stated EPA's approach to utilizing sources that do not emit carbon in the goal 

setting calculation and the role that these same sources can take in a state's compliance plan is 

inconsistent and arbitrary. Commenters said these inconsistencies mostly show up in how zero 

emissions sources can be included in a state's compliance plan. Commenters said new and 

incremental sources of zero emitting generation can be used in a state's compliance plan, but 

EPA limits the role of generation from existing zero emissions sources, including: nuclear - 

states can only use 5.8 percent of existing nuclear, hydropower - states cannot use generation 

from any existing hydropower resource, including generation imported from other countries, and 

biomass - states can use generation from new and existing biomass-based units, but this 

generation may not be deemed to be zero-emissions. 

Commenters stated in response to the Notice of Data Availability (NODA) where the EPA 

requested comment on alternative approaches that account for the displacement of fossil fuel 

generation by Blocks 3 and 4 resources 12, the commenters stated that the EPA's proposed 

approaches differ from one another in determining which fossil fuel sources are displaced, and 

thereby the amounts to which emissions in the numerator of the formula would be reduced: 1) 
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New low-/zero-carbon resources displace existing fossil fuel generation proportionally, 2) New 

low-/zero-carbon resources displace existing fossil fuel generation in order of emissions 

intensity, and 3) New low-/zero-carbon resources displace a mix of existing and new fossil fuel 

generation. Commenters said any of these proposals would address a significant bias in the draft 

rule, which would both establish unrealistically lax emissions rate goals and incentivize 

preferences for relying on natural gas generation over non-fossil fuel resources in states' 

implementation plans. Commenters said the result of including low-/zero-carbon resources as the 

EPA did in the draft rule, is that states could achieve compliance without actually reducing 

emissions substantially. Commenters said for instance, if the state's total electricity consumption 

were to grow substantially over the next fifteen years, but the state satisfied enough of that 

demand with block 3 and 4 resources, it would effectively "dilute" its existing level of actual 

carbon emissions in a greater quantity of electricity produced. Commenters said for example, 

Southern Company seems prepared to encourage Georgia along such a path, stating it intends to 

propose a yet another pair of new reactors, linking the proposal to implementation of the EPA 

rule. Commenters said while the deployment of so much low-/zero-carbon resources to achieve 

such an outcome would signal a significant change in the trajectory of state energy policies, it 

would not advance the ultimate objective of reducing the amount of CO2 added to the 

atmosphere by existing generation sources. 

Commenters stated Building Block 3 must be adjusted to remove existing nuclear generation 

from the state goal-setting calculation. Commenters said existing nuclear generation should be 

treated like new nuclear generation, with all existing nuclear generation available for inclusion in 

state compliance plans. Commenters said this approach would provide incentive to maintain 

existing nuclear generation and would be consistent with the regulatory objective of reduced 

carbon emissions associated with electricity generation. 

Commenters stated that several factors limit states' ability to govern the operation of these 

facilities - particularly under the auspices of the Clean Air Act. Commenters said, first, as zeroemissions resources, these plants are not directly regulated under the Act. Commenters believed 

the EPA has no authority to compel these resources to operate, and further, particularly in states 

with deregulated electricity markets, states are also restricted from providing out-of-market 

incentives to these resources by FERC rules. Commenters continued, stating that as it pertains to 

nuclear assets, licensing and supervision of these plants is the sole jurisdiction of the federal 

Nuclear Regulatory Commission (NRC), and states who have sought decision-making authority 

with respect to nuclear plants within their borders have found themselves with few options to 

either incentivize the continued operation of, or advocate for the closure of, these units. 

Commenters stated that including under-construction new nuclear and at-risk existing nuclear in 

goal-setting is not authorized under Section 111(d). 

 Commenters stated that EPA's approach unfairly and severely penalizes States that are leading 

in the expansion of nuclear energy in America, and it is inconsistent with U.S. energy policy and 

the President's own statements in support of expanding nuclear energy. Commenters added that 
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EPA's approach in Building Block 3 exceeds EPA's authority under Section 111(d) of the Clean 

Air Act because nuclear units are not part of the regulated source category. 

Comment 3: Several commenters recommended that the five nuclear plants currently under 

construction (Watts Bar 2 in Tennessee, Vogtle 3-4 in Georgia, and Summer 2-3 in South 

Carolina) should be removed from the BSER baseline formula, and that states should be allowed 

to count the avoided emissions toward their compliance plans once the plants are operational. 

Response 3: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the provisions we had proposed for under-construction units in the setting of 

state goals, and will allow incremental generation from new nuclear units to be applied towards 

compliance. Please see section V.A of the preamble for further discussion of the treatment of 

new nuclear plants, and section VIII.K and VIII.L of the preamble for further discussion of 

provisions in state plans of allowable actions that result in an adjusted CO2 emission rate of an 

affected EGU, the accounting approach for incremental generation, and how states can address 

interstate effects in their plans. We appreciate commenters’ concern regarding crediting issues. 

We believe that changes made in the final rule resolve these issues. 

The following are summaries of the specific public comments under this comment:

Commenters recommended that the EPA should remove nuclear generating capacity under 

construction from the rate-setting formula, and allow states to include "new" nuclear generating 

capacity, when it is operating, in their compliance calculations, thereby providing an incentive to 

expand carbon-free nuclear generating capacity. Commenters further recommended that "new" 

nuclear capacity should include: 

1. New nuclear power plants (those currently under construction or others that might be 

built between now and 2030 and beyond); 

2. Power uprates at existing nuclear plants (which increase the plant's capacity) initiated at 

the beginning of the 2012 baseline year or thereafter; 

3. Nuclear plants relicensed to operate beyond 60 years (second license renewal), and any 

nuclear plants that had not received license extensions to operate beyond their original 

40-year license term as of the beginning of the 2012 baseline year. 

Commenters stated that Georgia made the choice to invest significant state resources in nuclear 

power (1) in reliance on state policies in favor of nuclear power as a clean, carbon-free source of 

energy, and (2) in expectation of future federal regulations on carbon emissions. Commenters 

stated that the EPA's proposed treatment of under-construction nuclear places a disproportionate 

burden on Georgia, as well as South Carolina and Tennessee, for taking early action. 

Commenters stated that three states, Georgia, South Carolina and Tennessee - are adversely 

impacted by EPA's inclusion of this under-construction nuclear generation in building block 3; 

specifically, Georgia has an additional 17,345 GWh added into its building block 3 target, while 
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South Carolina has 17,345 GWh added to its target, and Tennessee has 8,846 GWh added to its 

target. Commenters stated that the utilities constructing these five nuclear facilities likely intend 

to operate these units, but various issues beyond their control could affect licensing, start-up, and 

operations. Commenters stated that the inclusion of under-construction nuclear generation has 

such a large impact on a state goal that any shortfall in operations would be very difficult, if not 

impossible to overcome; for example, including Georgia's new nuclear generation in building 

block 3 lowers the state's 2030 final goal under Option 1 by 138 lbs/MWh, from 972 lbs/MWh to 

834 lbs/MWh. Consequently, Commenters recommended that the EPA should not include underconstruction nuclear generation in its goal setting methodology for building block 3. 

Commenters stated that there is no logical basis to include output from nuclear plants under 

construction plants in the rate-setting formula. Commenters cited two reasons. First, these plants 

are not complete and not operating: Their generating experience and their capacity to avoid 

emissions have yet to be established. Second, adding potential output from these plants to the 

denominator in the rate-setting formula reduces the state's intensity target significantly, thereby 

penalizing states that have supported new nuclear plant construction. Commenters stated that 

South Carolina's state target is 22 percent more stringent than it otherwise would be because of 

EPA's treatment of Summer 2 and 3, and Georgia's and Tennessee's targets are 14 percent more 

stringent on this basis. Commenters stated that this is a substantial and unjustified penalty levied 

on just three states for no legitimate purpose related to the permissible goals of the Clean Air 

Act. 

Commenters continued that, although the states would be able to receive credit for these new 

nuclear plants, by counting the output from them in their compliance calculations, that credit is 

effectively nullified by including that output in the rate-setting formula. Commenters did not 

believe output from the nuclear units under construction should be part of the rate-setting 

calculation. 

Commenters opposed any efforts to, in the EPA's words, "include in the state goals an estimated 

amount of additional nuclear capacity whose construction is sufficiently likely to merit 

evaluation for potential inclusion in the goal-setting computation.' Commenters stated that there 

is only one justifiable approach to new nuclear generating capacity that might be 'under 

construction' either currently or at some time in the future: Remove it entirely from the targetsetting calculation but credit the output to compliance. 

Commenters noted that the EPA has solicited comments on "whether it is appropriate to reflect 

completion of these [under-construction nuclear units] in the state goals and on alternative ways 

of considering these units when setting state goals." Commenters strongly opposed 

incorporating nuclear units under construction in the section 111(d) target-setting calculation, 

and stated that the EPA's approach: (1) unfairly and severely penalizes states that are leading the 

expansion of nuclear energy in America; (2) is inconsistent with U.S. energy policy and the 

President's own statements in support of expanding nuclear energy and treatment of other underconstruction BSER resources; and (3) exceeds EPA's authority under section 111(d) of the Clean 

Air Act. 

Commenters stated that the five nuclear units under construction are projected to supply over 

5,600 MW of new, baseload, zero-emission electric generation, and represent a combined 
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investment of over $28 billion, approximately 11,500 total construction jobs and 2,500 

permanent jobs, and that the five nuclear reactors will constitute the single largest new carbonfree source of generation in the United States. Commenters further stated that just one of these 

new reactors will produce approximately as much carbon-free electricity as all of America's solar 

electric generating capacity. However, Commenters noted that in the proposed rule, the EPA 

decided to treat these units as part of BSER because, in the EPA's view, there is no 'incremental 

cost' associated with CO2 emission reductions from completion of these multi-billion dollar 

nuclear units. Commenters stated that the EPA provided no legal or technical analysis in the 

proposed rule to support this conclusion. 

Commenters stated that without expressing an opinion on the legal merits of EPA's proposed rule 

as a whole, Commenters agreed with EPA's determination that 'under construction' nuclear units 

should be "part of the inventory that the state can count towards compliance with its state goal." 

However Commenters stated they believe it is completely unreasonable and unlawful for the 

EPA to penalize states where nuclear units are under construction by imposing, at the front-end 

of the process, a substantially more stringent CO2 emission target in these states, as the EPA has 

proposed. Commenters noted that, by taking into account nuclear units under construction in this 

manner, EPA has set CO2 emission targets for Georgia, South Carolina and Tennessee that are 

approximately 14-22 percent more stringent than these targets would otherwise be if EPA did not 

include these units in the target-setting calculation. Commenters concluded that this is a 

substantial and unjustified penalty levied on just three states for no legitimate or lawful purpose. 

Commenters also stated that they had performed a close review of the EPA's calculations and 

supporting documents that showed how the EPA's approach seriously penalizes these states, and 

provided the following details: 

• If Vogtle 3-4 were not factored into EPA's target-setting calculation, Georgia's 2030 goal 

would be in the range of 970 lbs/MWh, which would be significantly less burdensome 

than EPA's current proposal of 834 lbs/MWh. As it stands in the proposed rule, Georgia's 

target is 14 percent more stringent than it would be if EPA did not include these units in 

the calculation. 

• Similarly, if Summer 2-3 were not factored into EPA's target-setting calculation, South 

Carolina's 2030 goal would be in the range of 990 lbs/MWh, which would be less 

burdensome than EPA's current proposal of 772 lbs/MWh. That is 22 percent more 

stringent than South Carolina's target would otherwise be. 

• Tennessee is similarly harmed by EPA's approach. If Watts Bar 2 was not factored into 

EPA's target-setting calculation, Tennessee's 2030 goal would be in the range of 1,352 

lbs/MWh, which would be less burdensome than EPA's current proposal of 1,163 

lbs/MWh. This is 14 percent more stringent than Tennessee's target would otherwise be. 

Commenters stated that, because each unit at Watts Bar 2, Vogtle 3-4, and Summer 2-3 will, 

when operational, be capable of producing over 8,000,000 MWh per year, inclusion of these 

units in the EPA's target-setting formula results in a tremendous change in the targets for these 

states. Commenters placed these figures in context: 
392 

• For Tennessee, the amount of MWh generation from Watts Bar 2 far exceeds the total 

historic generation from all of Tennessee's existing natural gas combined-cycle units 

(NGCC), which EPA has identified as approximately 6,548,000 MWh. The generation 

from this single new unit at Watts Bar 2 is roughly on par with the total amount of 

redispatched NGCC generation that EPA has identified for Tennessee (9,846,000 MWh), 

and it far exceeds even the aggressive renewable energy (RE) generation levels that EPA 

has assigned Tennessee for 2030 (4,305,000 MWh). 

• For Georgia, the amount of MWh generation from Vogtle 3-4 approaches one-half of the 

total historic generation from all of Georgia's existing NGCC units, which the EPA has 

identified as approximately 37,591,000 MWh. The generation from these two new units 

at Vogtle is also about one-third of the total amount of redispatched NGCC generation 

that the EPA has identified for Georgia (51,372,000 MWh), and it far exceeds the RE 

generation levels that the EPA has assigned Georgia for 2029 (12,230,000 MWh). 

• For South Carolina, the amount of MWh generation from Summer 2-3 is over 150 

percent more than the total historic generation from all of South Carolina's existing 

NGCC units, which the EPA has identified as approximately 11,209,000 MWh. The 

generation from these two new units at Summer is also roughly equal to the total amount 

of redispatched NGCC generation that EPA has identified for South Carolina (17,457,000 

MWh), and it is roughly double the RE generation levels that EPA has assigned South 

Carolina for 2029 (9,675,000 MWh). 

Commenters stated that, as a result, including over 8 million MWh generated at Watts Bar 2 and 

over 16 million MWh generated each at Vogtle 3-4 and Summer 2-3 in the denominator of the 

EPA's target-setting calculation has a dramatic impact on the final emission target for each of 

these states. Commenters stated that it appears that no other single assumption in the EPA's 

target-setting calculation has such a sizeable impact on state targets as the EPA's treatment of 

these nuclear units that are under construction. Commenters stated that this presents a large 

future compliance risk to these states' affected units and a challenge to meet future electricity 

demand cost-effectively. Commenters also stated that this also presents a challenge for the region 

given that these units are all located in three contiguous states in the Southeast. 

Commenters concluded that, as part of an EPA proposal aimed at reducing GHG emissions from 

the power sector, each of these states, and effectively the region, would be seriously penalized 

for taking proactive steps to expand the use of the nation's most significant source of zeroemission electricity. Commenters stated that this penalty is particularly perverse in light of the 

EPA's recognition 'that the planning for those units likely included consideration of the 

possibility of future regulation of CO2 emissions from EGUs.' Commenters asserted that, 

because these units will produce millions of MWh of clean generation, a larger input based on 

individual units in the EPA's equation than any other single factor, the impact on these states is 

disproportionate and simply unfair. Commenters expressed concern that the EPA proposal may 

discourage other states from taking proactive steps to expand nuclear power. 

Commenters stated that the EPA's approach to the five nuclear units under construction is 

inconsistent with national energy policy. Commenters stated, "Promoting the next generation of 

commercial nuclear reactors is a key element of our nation's energy policy. EPA's approach to 
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nuclear units under construction is directly contrary to that policy. In both the Energy Policy Act 

of 2005 (EPAct) and the Energy Independence and Security Act of 2007 (EISA), the last major 

pieces of energy policy legislation to be enacted into law, Congress sought to promote the 

expansion of nuclear energy through, among other things, investments in modern nuclear 

reactors and reforms to streamline the nuclear licensing process for new nuclear units." 

Commenters quoted President Obama as stating that to "meet our growing energy needs and 

prevent the worst consequences of climate change, we need to increase our supply of nuclear 

power," and that we should be "building a new generation of safe, clean nuclear power plants in 

this country." Commenters also noted that when the President unveiled his Climate Action Plan, 

he stated: "[T]hanks to the ingenuity of our businesses, we're starting to produce much more of 

our own energy. We're building the first nuclear power plants in more than three decades, in 

Georgia and South Carolina." 

Commenters then stated that there is a significant disconnect between these expressions of 

national energy policy and EPA's proposed rule, which Commenters said would penalize those 

states that are expanding their nuclear energy infrastructure. Commenters stated that the EPA 

should not penalize states at the front end of the process by imposing a more stringent standard 

relative to other states. 

Commenters stated that the EPA's assumption of a 2020 start date for the nuclear units under 

construction was inconsistent with the EPA's general approach to setting the state-specific 

emission rate. Commenters stated that, for all other actions and measures, the EPA used 2012 as 

the base year. Commenters concluded that, "If the state goals are based on historic 2012 data, it 

is arbitrary to use projected 2020 data for the nuclear portion of the goals for Georgia, South 

Carolina and Tennessee." 

Commenters then stated that Vogtle units 3 and 4 will displace up to 2,250 MW of net electrical 

output from fossil fuel generation (either existing or future growth). Commenters also noted that 

Tennessee and South Carolina also have new nuclear generating capacity under construction. 

Commenters concluded, "EPA's proposed treatment of under-construction nuclear places a 

disproportionate burden on Georgia for moving forward with two of the first nuclear plants 

constructed in three decades by 1) including under-construction nuclear in Georgia's state goal, 

and by 2) requiring renewable energy and energy efficiency targets for Georgia equivalent to 

those in states that are not investing in nuclear generating capacity." 

Commenters referred to the EPA's statement regarding renewable energy requirements and 

nuclear power on page 34858 of the Proposal, which said in part: "More than half the states 

already have established some form of state-level renewable energy requirements, with targets 

calling on average for almost 20 percent of 2020 generation to be supplied from renewable 

sources. The EPA is unaware of analogous state policies to support development of new nuclear 

units ..." Commenters provided excerpts from Georgia's State Energy Strategy that explicitly list 

advanced nuclear reactors as an energy need for the state, including that the Georgia House and 

the Georgia Senate passed single-chamber resolutions in the 2006 legislative session supporting 

the development of new nuclear capacity (HR 1365 and SR 865), and that in 2009, the Georgia 

Public Service Commission approved the construction of two new nuclear generation units at 

Plant Vogtle in Waynesboro, Georgia. Commenters stated that the estimated cost of Vogtle units 
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3 and 4 is $14 billion, and the project would not be moving forward without state policies that 

support the development of new nuclear units. Commenters also stated that the significant 

likelihood of future greenhouse gas regulations was also considered in the Georgia utilities' 

decision to add nuclear generation. 

Commenters stated that Georgia made the choice to invest significant state resources in nuclear 

power (1) in reliance on state policies in favor of nuclear power as a clean, carbon-free source of 

energy, and (2) in expectation of future federal regulations of carbon emissions. Commenters 

then stated that the EPA's proposed treatment of under-construction nuclear places a 

disproportionate burden on Georgia, as well as South Carolina and Tennessee, for taking early 

action. 

Commenters quoted from page 34870 of the proposal, "...The EPA believes that since the 

decisions to construct these units [Watts Bar 2 in Tennessee, Vogtle 3-4 in Georgia, and Summer 

2-3 in South Carolina] were made prior to this proposal, it is reasonable to view the incremental 

cost associated with the CO2 emission reductions available from completion of these units as 

zero for purposes of setting states' CO2 reduction goals (although the EPA acknowledges that the 

planning for those units likely included consideration of the possibility of future regulation of 

CO2 emissions from EGUs)." Commenters strongly disagreed with EPA's assertion that the 

capital costs and incremental costs associated with CO2 emission reductions as a result of Vogtle 

units 3 and 4 are zero, and noted that Georgia Power's ratepayers began paying for this 

investment in nuclear energy in 2011 with an increase in their base bill to pay for the financing 

of this project. Commenters stated that Georgia Power's Nuclear Construction Cost Recovery 

Schedule (NCCR) recovers the cost of financing associated with the construction of Vogtle units 

3 and 4, and the NCCR rider is currently 9.3141%. Commenters stated that, once these plants are 

operational, the rate impact is projected to be 6-8% of the base bill, and that the other utilities 

investing in Plant Vogtle are similarly passing on these costs to their ratepayers. Commenters 

then stated that these actual costs undermine the EPA's basic reason for including underconstruction nuclear in the baseline calculations, because these new units are not an inexpensive 

opportunity to reduce carbon emissions from existing fossil fuel units but are in fact quite costly. 

Commenters stated, by including under-construction nuclear in Georgia's goal, but treating the 

significant investment in under-construction nuclear as "sunk costs," the EPA's proposal forces 

Georgia to expend funds in addition to the billions invested in under-construction nuclear to meet 

the proposed goal. Commenters concluded that, for this reason alone, under-construction nuclear 

should not be included in the calculation of the state goal. 

Commenters stated that the proposed rule's treatment of under-construction nuclear eliminates 

state flexibility in achieving the goal and is not compatible with the other building blocks. 

Commenters noted that current estimated commercial operation dates for Vogtle units 3 and 4 

are the fourth quarters of 2017 and 2018, respectively, and stated that additional construction 

delays and cost overruns are possible. Commenters stated that while it is certainly likely that 

Vogtle units 3 and 4 will ultimately start-up and generate power at or near their rated capacity, 

the units would not be operational for several more years even in a best-case scenario. 

Commenters also stated that the Vogtle units represent advanced nuclear technology, which 

creates a certain degree of uncertainty regarding the time to ramp up to expected performance as 

well as on-going reliable operation. Commenters concluded that reflecting the completion of 

Vogtle units 3 and 4 in a proposed state goal is simply not appropriate. 
395 

Commenters stated that the way nuclear generation ultimately impacts the goal and achievement 

of the goal is fundamentally different than the other building blocks. Commenters stated that, if 

any of the renewable energy, energy efficiency, or heat rate improvements efforts fall short, it is 

possible to compensate by overachieving in one of the other areas. In contrast, commenters 

stated that the under-construction nuclear generation has such a significant impact on the goal 

that any shortfall in ultimate performance would be virtually impossible to overcome. 

Commenters stated that the way under-construction nuclear is treated in the proposed rule 

essentially eliminates any "headroom" Georgia has in meeting either the interim or the 2030 

goals. 

Commenters included a chart breaking down Georgia's 2030 goal computation (as proposed by 

EPA) percentage rate change from each of EPA's building blocks. 

Commenters stated that the building blocks for heat rate improvement, natural gas dispatch, 

renewable energy and energy efficiency were all derived from practices or policies already in 

place in other sectors or states. Commenters then stated that under-construction nuclear only 

exists in three states, so there is no benchmark to reference or use as a basis for how to treat 

under-construction nuclear. Commenters also noted that other building blocks are expressed as a 

percentage along a continuum (e.g. 9.8 % of sales from energy efficiency), whereas nuclear 

plants are not designed to be ramped up and down; nuclear capacity is either there and fully 

utilized or not there at all (i.e. not built or shut down due to planned maintenance outages or 

other unplanned outages). Commenters noted that shortfall in generation during periods of 

outages could severely impact Georgia's ability to meet the emissions goal. Therefore, the 

commenters stated that under-construction nuclear is a unique entity within the building blocks 

and fundamentally different than the other components used to calculate the goal. Commenters 

recommended that it does not logically fit into the methodology for calculating state goals and 

should be deleted from this calculation. 

Commenters stated in 40 CFR 60.5820, EPA proposes a definition for affected entity as ' ... 

Affected Entity shall mean any of the following: An affected EGU, or another entity with 

obligations under this subpart for the purpose of meeting the emissions performance goal 

requirements in these emission guidelines ... ' Commenters said assuming but not conceding that 

this definition is consistent with the Clean Air Act and the regulations promulgated pursuant 

thereto, EPA should allow states to include under-construction nuclear and new nuclear, along 

with solar, wind and other zero-carbon or low-carbon generation, in the definition of affected 

entity for the purposes of demonstrating compliance in a state plan. 

Commenters stated that Georgia has an ambitious reduction goal even without underconstruction nuclear complications. Commenters stated even with removal of the underconstruction nuclear from Georgia's goal computation, the state will be making significantly 

more reduction in carbon emissions than the six states without under-construction nuclear 

investment. 

Commenters stated that including under-construction nuclear units in the BSER determination 

places a disproportionate burden on the citizens of Georgia. Commenters also stated that the 

regulation as proposed could disproportionately raise Georgia's electricity costs versus 

neighboring states, could hurt Georgia's competitive position for future economic development. 
396 

Commenters stated that four states are already exceeding their renewable energy goals, and EPA 

has chosen not to adjust their goals. The comment contrasted this to the three states (Georgia, 

South Carolina and Tennessee) moving forward with under-construction nuclear; their renewable 

energy goals were adjusted. Commenters also stated, regarding the state of Georgia, that forcing 

additional renewable energy generation into the state, in addition to the under construction 

nuclear with this proposed regulation, will likely result in stranded assets of coal units with 

significant remaining useful lives. Commenters noted that coal units has invested in air pollution 

controls to comply with Georgia's Multipollutant Rule (SSS), MATs, and CAIR/CSAPR, and 

that the accompanying reductions in SO2, NOx, and mercury have resulted in significant 

improvements in air quality for ozone, PM2.5, and regional haze. Commenters stated that the 

utilities have also invested in heat rate efficiency projects at the remaining coal units to make 

them as efficient as possible for their remaining useful life. Commenters stated that if the utilities

have to retire more of these coal units early to achieve carbon emission goals, electrical rates will 

be adversely impacted as the capital cost recovery for these pollution control projects is 

incorporated into the rate structure in Georgia. 

Commenters stated that removing under-construction nuclear from EPA's BSER determination is 

consistent with the EPA's exclusion of Partial Carbon Capture in BSER. Commenters 

recommended that the proposed 111(d) rule should be revised to exclude the CO2 emissions 

reduction associated with the five under-construction nuclear units from the state goals for 

Georgia, South Carolina, and Tennessee as it has excluded under-construction coal-fired CCS 

units in setting the state goals for Mississippi, Texas, and California. 

Commenters continued that thirty-one (31%) percent of the 2012 - 2030 emissions rate reduction 

in Georgia's goal is associated with implementation of BSER Building Block 3a, underconstruction nuclear; achievement of Georgia's emissions goal therefore requires completion of 

construction, startup, and successful operation of Vogtle Units 3 and 4 at their forecast 

generation rates. 

Commenters concluded that the inclusion of under-construction nuclear in the State of Georgia's 

emissions performance goal eliminates flexibility in achieving the goal by means of other BSER 

building blocks. Commenters recommended that the EPA should remove under-construction 

nuclear generation from the computation of BSER and state emissions goals, and that the EPA 

should retain under-construction nuclear in the definition of affected entity for the purposes of 

demonstrating compliance in a state plan. 

Commenters 23715 stated that the utilities constructing the five nuclear facilities surely intend to 

operate these units, but various issues beyond their control could affect licensing, start-up and 

operations. Commenters stated that the inclusion of under-construction nuclear generation has 

such a large impact on a state goal that any shortfall in operations would be very difficult, if not 

impossible, to overcome. Commenters recommended that, consequently, the EPA should not 

include them in its goal setting methodology for Building Block 3. 

Commenters stated the EPA's methodology penalizes Georgia, South Carolina, and Tennessee 

for investing heavily in new zero-carbon generating capacity, and that under-construction nuclear 

should not be included in the calculation of the state goal. Commenters stated that including 

Georgia's new nuclear generation in Building Block 3 lowers the state's 2030 Final Goal under 
397 

Option 1 by 138 lbs/MWh, from 972 lbs/MWh to 834 lbs/MWh, with similar effects for South 

Carolina and Tennessee. 

Commenters stated that there is a lack of precision with regard to the 2012 nuclear fleet capacity 

within some states. Specifically Commenters stated that, of the 30 states EPA lists in Table 4.10 

- Nuclear At-Risk Generation in its GHG Abatement Measures TSD - the 2012 nuclear fleet 

capacity reported in 16 states differed from the summer net capacities reported in EIA's 2012 

Form-860. Commenters noted that San Onofre (CA), Crystal River 3 (FL), and Kewaunee (WI) 

have already been retired, and Oyster Creek (NJ) is scheduled to be retired in 2019. 

Commenters 22786 stated that the proposed rule's treatment of under-construction nuclear 

energy is arbitrarily different from its treatment of other sources of emission-free generation. 

Commenters stated in addition to being internally inconsistent in terms of its treatment of other 

forms of nuclear energy, EPA's proposal to include generation from under-construction reactors 

in calculating state goals is also inconsistent with the Proposed Rule's approach to other sources 

of emission-free electricity in several way; these inconsistencies further emphasize the 

arbitrariness of EPA's approach to under-construction nuclear reactors. 

Commenters stated that the first inconsistency relates to the EPA's unequal assumptions about 

the achievability of state commitments to emission-free electricity. Commenters noted stated that 

although the Proposed Rule effectively assumes that every state and utility that has committed to 

constructing one of the five under-construction nuclear facilities will do so, the proposal does not 

apply this assumption to state and utility commitments to building additional renewable energy 

facilities. 

Commenters continued that in many ways, states' commitments to building additional RE -

particularly those that are codified in renewable portfolio standards (RPS) or binding targets for 

particular utilities- are more certain to lead to the required level of deployment than are states' 

and utilities' commitments to completing the construction of the five under-construction nuclear 

facilities. Commenters stated that although Georgia has supported the construction of Plant 

Vogtle's under-construction reactors through state incentives and other measures, none of these 

measures comes close to imposing a binding legal requirement to complete construction of any 

of these facilities on a particular schedule, or, indeed, at all. Commenters contrasted this to most 

RPS programs, which Commenters stated impose binding schedules for implementing RE 

deployment that are typically enforceable through the possibility of injunctions, penalties, or 

other sanctions. Commenters noted that these state programs are specifically designed to ensure 

that electric utilities develop a specific amount of new RE capacity in order to meet the RPS 

mandate. 

Commenters stated that, in spite of their binding nature, the EPA has not calculated state goals 

based on the assumption that the RPS or utility-specific RE targets that states have established 

will be achieved. Commenters stated for example, unlike the three states where new nuclear 

facilities are currently under construction, the emission goals for California, Colorado, and 

Minnesota -three states with aggressive RPS standards- are not based on the full level of RE to 

which these states have committed: 
398 

• Although California's RPS requires the state to meet 33% of its load from RE by 2020, 

while Colorado's RPS imposes a 30% requirement, EPA's goal-setting methodology only 

expects California and Colorado to obtain 21% of each state's in-state generation from 

renewable resources by 2030. 

• Similarly, although Minnesota's RPS program requires its utilities to obtain 30% of their 

retail sales from RE by 2020, EPA's goal-setting approach only assumes that Minnesota 

will reach 15% RE deployment by 2030- a proportion of sales that is even lower than the 

state's actual level for 2012. 

Commenters stated that the EPA has not explained why it assumes that states whose utilities 

have committed to building under-construction nuclear capacity will construct and operate that 

capacity at 100% of the expected level, but does not assume that states that have adopted binding 

RPS programs will construct and operate 100% of their RE commitments. Commenters stated 

that this inconsistency is especially puzzling in light of the fact that many RE commitments are 

legally enforceable obligations, whereas commitments to build new nuclear generation are 

neither required nor enforceable through any state or federal regulatory requirement. 

Commenters stated that the Proposed Rule's approach to under-construction nuclear reactors is 

also inconsistent with its treatment of other under-construction emission-free sources of 

electricity. Commenters stated that although the EPA has identified and included all five of the 

nuclear reactors that are currently under construction in state goals, the EPA has ignored the 

thousands of MW of renewable generation that are currently under construction throughout the 

country. Commenters stated that the EPA has also not included generation from the over 500 

MW of new hydroelectric capacity that was under construction in 2013 and 2014. Further still, 

Commenters noted that the EPA's state goal calculation omits projected emission reductions 

from large carbon-capture and sequestration (CCS) generating facilities such as Mississippi 

Power's Kemper facility, which is now under construction and slated to come on-line in 2016. 

Commenters stated that, even more inexplicably, the EPA does not even incorporate 100% of the 

generation from RE facilities that are already online and operating into some states' goals. 

Commenters stated that the EPA's projected RE performance levels for Iowa, Maine, Minnesota, 

and South Dakota are lower than the levels that these states actually obtained from RE in 201; 

the EPA's proposed approach does not take into to account the full amount of either underconstruction or actually-operating RE generation when calculating these states' goals. 

Commenters concluded that the EPA's proposal would arbitrarily penalize states that have 

chosen to reduce emissions by building one form of emission-free energy (nuclear energy) while 

adopting a less stringent approach to states and utilities that are moving forward with (or have 

already built) other sources of emission-free energy such as RE, hydroelectricity, or CCS. 

Commenters stated that the proposed rule's assumptions in quantifying the emission reductions 

and costs associated with under-construction nuclear generation are arbitrary and capricious. 

Commenters stated that, in addition to being arbitrarily different from the treatment of other 

nuclear and emission-free sources of energy, the EPA's approach to quantifying the level of 

emission reductions that may be achievable from deploying under-construction nuclear facilities 

is based on several erroneous assumptions. Commenters stated that the incorrect assumptions 

include the following: 
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• the five under-construction facilities will be completed and operational by 2020; 

• these facilities will operate at an average 90% capacity factor throughout their lives; and 

• the costs of reducing emissions by completing construction of these facilities is 

effectively zero. 

Commenters concluded that each of these erroneous assumptions further weighs in favor of 

excluding nuclear generation from the goal computation methodology. 

Commenters stated that the EPA's assumption that each of the under-construction reactors will 

be operating by 2020 is unreasonable and contradicted by the projects' own construction history. 

Commenters stated that nuclear power is far and away the most complex, technical, and highly 

regulated generation source on the planet, and every step in the construction, installation, and 

operation of a nuclear reactor is overseen by regulators and inspectors at the NRC. Commenters 

stated that the technical and regulatory complexity involved in constructing a new nuclear 

reactor and the significant regulatory hurdles involved in adjusting design or fabrication 

assumptions can lead to long delays and unexpected increases in costs. Commenters also noted 

that unforeseen events such as Three-Mile Island, Chernobyl, and the more recent tsunamiinduced meltdown at the Fukushima Daiichi reactor in Japan, could trigger new safety 

regulations, regulatory reviews, and major design changes that could significantly delay 

completion of under-construction reactors. Commenters concluded that, although utilities in 

Georgia and elsewhere may now be committed to building the five reactors identified in the 

Proposed Rule, it is possible that changes in NRC regulations, the cost of reactor components, or 

the availability of financing could result in major delays and possibly even the abandonment of 

one or more of these projects. 

Commenters stated that the Tennessee Valley Authority's (TVA) Watts Bar Unit 2 -which is one 

of the five "under-construction" facilities the Proposed Rule assumes will be completed by 2020- 

is perhaps the best example of the uncertainty inherent in predicting when new nuclear facilities 

will be operational. Commenters observed that the NRC issued the TVA a construction permit 

for Watts Bar Unit 2 more than 40 years ago, in 1973. Commenters noted that TVA began 

construction on Unit 2 shortly thereafter, but had only completed approximately 80% of 

construction by 1985, when construction was halted, only to be resumed in 2007. Commenters 

stated that Watts Bar Unit 2 is an important and highly relevant cautionary tale: although the 

reactor was expected to enter commercial operation within three years of receiving its license, it 

was mothballed a decade later, then construction was restarted more than 20 years later. 

Commenters stated that Watts Bar Unit 2 is still under construction today, more than four 

decades after it began construction. 

Commenters stated that, although Watts Bar Unit 2's lengthy construction schedule may not be 

typical of every nuclear reactor, the fact remains that large nuclear projects such as Plant Vogtle 

Units 3 and 4 face numerous risks, long construction timelines, and a greater potential for multiyear delays and potential risks of abandonment than almost any other type of energy project. 

Commenters further noted that both the Vogtle project in Georgia and the V.C. Summer project 

in South Carolina have already experienced lengthy construction delays. Commenters concluded 
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that the EPA's assumption that these units will complete construction according to schedule is 

highly suspect, and is not supported by the actual construction history of these and other nuclear 

reactors. 

Commenters stated that even if the under-construction reactors in Georgia and elsewhere are able 

to complete construction by 2020 -as the EPA's Proposed Rule assumes- there are a number of 

reasons why these units may not operate at a 90% capacity factor throughout their lifetimes. 

Commenters stated that new facilities typically require lengthy testing and fine-tuning periods 

before they are able to run at their designed capacity factor. Commenters concluded that the new 

Vogtle units may well operate at low capacity factors during the first few years they come online, which could create a significant compliance deficit for Georgia that would have to be made 

up by higher-than-90% capacity factors in the future, or by the addition of other emission-free 

energy or EE. 

Commenters also stated that, despite the fact that the national average capacity factor for nuclear 

reactors has been approximately 90% for the last several years, there is no guarantee that the five 

individual facilities will operate at that level for their entire lives. Commenters noted that 

occasional outages for refueling, turbine replacement, or safety issues are all but inevitable. 

Commenters stated that a typical reactor must refuel at least once every 18 months- an event that 

requires a shutdown lasting six weeks or more, and unexpected shutdowns for maintenance or 

safety issues, meanwhile, can last six months or more. Commenters stated that the Nuclear 

Energy Institute, which compiles reports of outages for the nation's existing nuclear fleet 

indicates that, between 2000 and 2014, indicated reactors experienced at least six planned 

outages lasting more than 100 days. Commenters also noted that the average duration of all 

planned outages during the same period was almost three months. Commenters stated that, 

according to the Energy Information Administration (EIA), the average lifetime capacity factor 

of the U.S. nuclear fleet is only 80.3% -ten percent lower than EPA's proposed capacity factor 

assumption for nuclear generation. Finally, the commenters noted that in the last three years, the 

lowest quartile of U.S. nuclear facilities operated at an average capacity factor of only 70.8%. 

Commenters also noted that Southern California Edison's San Onofre Nuclear Generating Station 

(SONGS) Units 2 and 3 (2,150 MW total) near San Diego, California, have both been offline 

since January 2012 as a precaution after a steam generator tube leak led to the discovery of 

excessive wear in the plant's new steam generators. Commenters noted that the problems 

ultimately proved to be so significant that both units were prematurely retired from service. 

Commenters further referred to extended outages at the Fort Calhoun reactor, Crystal River Unit 

3, and other reactors. Commenters stated that, in light of these statistics, it would be arbitrary and

unreasonable for EPA to assume that each of the under-construction reactors will run at an 

average capacity of 90% for their entire lives, or even for the entire span of a single compliance 

period. 

Commenters stated that the EPA's assumptions about the cost of completing the five underconstruction reactors are incorrect. Commenters continued that the Proposed Rule asserts that 

completing construction of the five under-construction reactors would be associated with zero 

'incremental' cost because 'the decisions to construct these units were made prior to this 

proposal.' Commenters stated that this simplistic conclusion overlooks numerous incremental 

costs that are associated with constructing and operating these units. Commenters stated that 
401 

completion of the two Vogtle units is expected to cost approximately $14 billion, and that these 

construction costs are being paid for through a 9.3141% "Nuclear Construction Cost Recovery 

Schedule" rider on Georgia Power's customers' electric bills and similar rate increases for the 

other utilities involved in the development of the new Vogtle units. Commenters also stated that 

once construction is complete, the operation of these units is expected to add 6-8% to ratepayers' 

bills for many years into the future. Further, Commenters noted that other construction delays 

may occur, and that according to press reports, each day that construction is delayed at Vogtle 

could add $2 million to the costs of this complex project. 

Commenters stated that the construction costs are incremental to the Proposed Rule because they 

would not necessarily continue to be incurred in the absence of the Proposed Rule. Commenters 

stated that in the Proposed Rule, EPA recognizes that "a host of factors -increasing fixed 

operation and maintenance costs, relatively low wholesale electricity prices, and additional 

capital investment associated with ensuring plant security and emergency preparedness- have 

altered the outlook for the U.S. nuclear fleet in recent years." Commenters noted that the 

importance of these factors varies dramatically from reactor to reactor, but the same cost 

pressures that apply to some existing facilities apply to these under-construction nuclear 

facilities. Commenters stated that, without the Proposed Rule, stakeholders in these projects 

would have the option of delaying or modifying the projects if costs reach unacceptable levels -

just as TVA decided to do in 1985 with Watts Bar Unit 2. 

Commenters concluded that the inclusion of under-construction generation in state goals is not 

cost-less; rather, the additional policy constraint created by the Proposed Rule will cause the 

developers and operators of these units to incur additional costs above those that they would 

have incurred in the absence of the Proposed Rule. Commenters stated that the EPA should 

reflect these real, incremental costs in its evaluation of this aspect of BSER, and the agency's 

failure to do so violates the requirements of EPA's own regulations as well as the plain language 

of section 111. 

Commenters stated that the proposed rule's approach to under-construction nuclear facilities is 

arbitrarily inconsistent with its approach to other sources of nuclear energy. Commenters also 

stated that, in addition to being illegal and unprecedented in EPA's over 40-year history of 

implementing section 111, the Proposed Rule's approach to under-construction nuclear facilities 

is arbitrarily inconsistent with the proposal's treatment of existing and planned nuclear reactors, 

as well as nuclear uprates. Commenters stated that, under the Proposed Rule, all future nuclear 

facilities other than the five deemed under-construction -including the 12 new nuclear reactors 

that are currently under Nuclear Regulatory Commission (NRC) review -would be completely 

excluded from the state goal calculation, even though most of these facilities are currently 

projected to come on line during the Proposed Rule's interim compliance period. Commenters 

concluded that the EPA has not explained why it has chosen to include nearly all of the expected 

generation from the five reactors that began construction before the Proposed Rule, while 

completely excluding the projected generation from the 12 facilities whose applications are 

currently under review, and which could also begin generating electricity during the first 

compliance period. 

Commenters stated that increased generation from uprates at existing nuclear facilities -including 

uprates that were planned, approved, or under construction before the issuance of the Proposed 
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Rule- also would not be included in the goal calculation. Commenters stated that a review of the 

NRC's licensing database reveals that the NRC approved 16 separate uprate projects between 

May 2012 and August 2014. Of these, eight were "extended" uprates, meaning that substantial 

construction and equipment upgrades would be involved. Commenters noted that, like the five 

"under-construction" reactors identified by EPA, each of these uprates either came online or will 

complete construction after the proposed 2012 baseline year (meaning that generation from these 

uprates represents additional generation above the baseline). Commenters stated that some of 

these uprates were likely still under construction or about to commence construction when EPA 

issued the Proposed Rule. Commenters stated that the expected MWh from these underconstruction nuclear uprates -some of which will add substantial capacity to existing facilitiesalso were not included in state goals, despite EPA's proposal that the MWh from these uprates 

would be eligible for use as a compliance option. Commenters concluded that the EPA's proposal 

that all of the expected generation from the under-construction nuclear reactors would be 

included in state goals, while generation from planned reactors and under-construction nuclear 

uprates would be entirely excluded, defies explanation, and is clearly both arbitrary and 

capricious. 

Commenters also stated that, in contrast to its treatment of all other sources of nuclear energy, 

the Proposed Rule would include 5.8% of a state's existing nuclear capacity in the state goal 

calculation. Commenters stated that inclusion of this existing nuclear generation is both illegal 

and unreasonable, and is also arbitrarily different from EPA's approach to under-construction 

facilities. Commenters noted that the EPA states that the five under-construction reactors have 

"long been known to grid operators for planning purposes." Similarly, Commenters stated that 

the EPA asserts that inclusion of these facilities as elements of BSER is effectively cost-less, 

which means, effectively, that the EPA considers these under-construction facilities to be 

functionally equivalent to existing facilities (incremental costs for which would also be zero). 

Commenters concluded that logically, the agency should apply the same assumptions to the five 

under-construction facilities that it applies to other already-built facilities. Commenters stated 

that assuming, for the sake of argument, that the EPA's stated rationale for including a share of 

existing nuclear generation in state goals (i.e., that this percentage of the nation's nuclear 

generation is "at risk" of retirement is reasonable, the logical extension of this argument would 

require inclusion of only 5.8% of the expected generation from under-construction facilities as 

well. Commenters stated that presumably, if a generic 5.8% of the nation's nuclear capacity will 

be at risk of retirement during the Proposed Rule's compliance periods, the market forces that the 

EPA asserts may lead to retirement would also affect the under-construction facilities that the 

EPA assumes will be operational during the same period. Commenters concluded that for 

reasons the EPA has not (and likely cannot) explain, the EPA has opted to include all of the 

expected generation from the five under-construction facilities while including only 5.8% of 

existing reactors' generation. 

Commenters recommended that, rather than treating under-construction nuclear facilities as if 

they are already built -an approach that ignores the very real risk that one or more of these 

facilities will not be built or will cost significantly more than is projected- the Proposed Rule 

should treat these un-built facilities as new facilities, applying the same approach the proposal 

uses for under-construction nuclear uprates and new nuclear facilities that are currently in the 

planning and permitting stage. In other words, the commenters recommended that the EPA 

should calculate state goals without including a projection of future generation from under-
403 

construction reactors, while allowing generation from these emission-free sources to be used for 

compliance if and when they are actually built. Commenters stated that any other treatment 

would be arbitrary and capricious. 

Commenters recommended that output from under-construction nuclear units should not be used 

to calculate state emissions rate goals. Commenters stated that the EPA's decision to include 

these units in setting the state-specific goal rates unreasonably increases the stringency of the 

goals for the states and electric utilities that have made substantial investments in new zeroemitting generation resources. 

Commenters recommended that units that are not complete and not operating should not be 

considered when setting state emission rate goals. Commenters noted that the proposed 

guidelines state that "Building Block 3 is based on shifting generation from affected fossil units 

to new renewable energy generating capacity, which is added over time, and new or preserved 

nuclear capacity, all of which is expected to be in place by 2020." Commenters stated that 

development of a new nuclear plant is a long and complicated process that takes a minimum of 

nine years to complete, even if everything goes according to schedule, but new units are often 

subject to construction and permitting delays. 

Commenters further stated that assuming a 2020 start date for these units is inconsistent with 

EPA's general approach to setting the state-specific emission rate goals for the states. 

Commenters noted that, for all other actions and measures, the EPA used 2012 as the base year. 

Commenters noted that the EPA "chose the historic data approach as it represented the most 

recent year for which complete data were available at the time of the analysis." Commenters 

stated that if the state goals are based on historic 2012 data, it is arbitrary to use projected 2020 

data for the nuclear portion of the goals for Georgia, South Carolina and Tennessee. 

Commenters stated the EPA should remove nuclear generating capacity under construction from 

the rate-setting formula, and allow states to include 100 percent of "new" nuclear generating 

capacity, when it is operating, in their compliance calculations, thereby providing an incentive to 

expand carbon-free nuclear generating capacity. 

Commenters stated that the EPA repeatedly recites that the proposed rule with its four Building 

Blocks provides states flexibility to tailor their responses to the rule to their own specific energy 

profiles, needs, and policies, but this is largely a fiction. Based on the commenter's 

understanding of the understanding of the states in which it has generation resources, the amount 

of emission reductions supposedly achievable in each state from each block provides little 

leeway to adjust the actions the EPA used to create the blocks or to rely on measures that differ 

from those in the blocks. Commenters stated that a good example of false flexibility is the 

proposed treatment of nuclear units under construction. Commenters stated than an important 

clean energy activity in which it is engaged is the addition of 1150 MWs of zero-emitting 

baseload nuclear capacity at Watts Bar Nuclear Plant (WBN2), which will be on-line in late 

2015. Commenters noted that, rather than structuring Block 3 to allow Tennessee and TVA to 

use this clean energy for compliance flexibility, the EPA embeds energy from WBN2 in the 

Block 3 denominator making Tennessee's emission guideline much more stringent and 

hamstringing whatever flexibility Tennessee may otherwise have. 
404 

Commenters stated that they and their customers have invested over $4 billion and continue to 

invest in Watts Bar Nuclear Unit 2, which accounts for nearly one-third of Tennessee's emission 

rate reduction required by 2030. Commenters stated that they and other owners of nuclear under 

construction are leading the expansion of new nuclear energy in the 21st century, but are being 

penalized by EPA and given a lower emission guideline compared to other states. 

Commenters stated that, in the proposed rule, the EPA solicited comments on 'whether it is 

appropriate to reflect [the five nuclear units under construction] in the state goals and on 

alternative ways of considering these units when setting state goals.' Commenters strongly 

opposed incorporating nuclear units under construction in the section 111(d) calculation of state 

goals. Commenters stated that the EPA's proposal (1) unfairly and severely penalizes states that 

are in the vanguard of the effort to expand generation of nuclear energy in the United States; and 

(2) is inconsistent with the U.S. energy policy and the commenter's Integrated Resources Plan. 

Commenters recommended that the output from these units under construction should count 

toward compliance in the same manner as any other new nuclear capacity whether achieved 

through additional nuclear plant construction or power up-rates. Commenters also recommended 

that plants that extend their licenses should receive credit in compliance calculations. 

Commenters stated that no other single assumption in EPA's rate-setting calculation has such a 

sizable impact on the state emission goals as EPA's treatment of nuclear units under construction. 

Commenters stated that this creates a huge compliance risk for Tennessee, Georgia, and South 

Carolina and will discourage other states from joining with these states in multi-state plans; 

should a nuclear unit not start up and perform as planned, the compliance risk for all states in a 

multi-state agreement would greatly increase. 

Commenters stated that, contrary expressions of national energy policy by the President and 

Secretary of Energy, EPA's treatment of nuclear units under construction would penalize the 

very states that have been proactive in developing and investing in nuclear power. Commenters 

recommended that, rather than penalize these states, EPA should recognize their contributions by 

allowing the states the benefit of using the generation from these units to meet the state CO2 

emission reduction targets. Commenters stated that, paradoxically, EPA's approach would extend 

this benefit to states that propose development of nuclear power in future, but not to states that 

have been in the vanguard of promoting the national policy of developing nuclear power to 

provide carbon-free electricity. 

Commenters stated that the EPA's approach to nuclear units under construction does not 

constitute BSER and violates CAA section 111(d). Commenters first disagreed with the EPA's 

assertion that under construction nuclear units constitute the "application of the best system of 

emission reduction." Commenters stated that the EPA has never before based emission 

guidelines on application of beyond-the-unit technologies, or asserted that reduced utilization at 

a regulated source qualifies as a legitimate "system of emission reduction." Second, Commenters 

asserted the EPA failed to properly "take into account the cost" when it proposed to treat nuclear 

under construction as BSER. Commenters stated that assuming "zero" cost for under 

construction "controls" is unprecedented in the section 111(d) context, and by ignoring the total 

value of the commenter's investment merely because Commenters acted early in advancing the 

first new nuclear power plants in nearly 30 years, the EPA's determination is fundamentally 

flawed. Commenters stated that the EPA has never mandated such a large capital investment as 
405 

BSER for affected units. Third, the commenters stated that section 111 requires the degree of 

emission limitation to be 'achievable,' and the EPA's approach to under construction nuclear units 

eliminates any meaningful margin for compliance purposes, substantially hindering the 

opportunity for these states to achieve compliance. Commenters stated that the EPA's claim that 

the rule provides 'flexibility' is incorrect; in reality, Georgia, South Carolina, and Tennessee will 

face substantial Clean Air Act compliance risk, with no real flexibility, as a result of their more 

stringent state goals. Fourth, the commenters stated that the proposal violates section 111(d) by 

defining BSER differently for each state. Commenters stated that EPA has effectively proposed 

BSER differently for Georgia, South Carolina, and Tennessee as compared to the other states, 

and EPA has determined that completion of 'under construction' nuclear units constitutes BSER 

for these few states where those projects happen to be under construction. Commenters stated 

that EPA lacks the authority to establish BSER on a state-by-state basis in the manner EPA has 

done with under construction nuclear. Fifth, the commenters stated that while nuclear power has 

been demonstrated to be a proven source of safe, affordable, reliable, and clean energy, the EPA 

has provided no support in the record for its conclusion that these under construction nuclear 

units are already 'adequately demonstrated' as that statutory term is intended in the special 

context of section 111(d). 

Commenters stated that the EPA's treatment of nuclear units under construction is different from 

its treatment of other zero-carbon generation sources. Commenters stated that the EPA's 

calculation for setting state emission goals does not account for solar or wind projects that are 

also currently under construction despite the fact that solar, wind and nuclear are all grouped in 

Building Block 3. In the same vein, Commenters stated that EPA's standard-setting does not 

incorporate the avoided generation from individual energy efficiency projects or energy 

efficiency programs that are already planned. Commenters stated that the EPA provides no 

explanation in the rulemaking record for this disparate treatment, nor does the EPA explain why 

it is treating nuclear under construction differently from hydropower. Commenters noted that the 

EPA excludes all hydropower generation from the rate-setting formula, while recognizing that 

states can consider "incremental hydropower generation from existing facilities (or later built 

facilities) as an option for compliance with state goals." Commenters recommended, similar to 

its treatment of hydropower capacity, the EPA should exclude generation from nuclear units 

under construction from the rate-setting calculation, but allow such generation to be used for 

compliance purposes. 

Commenters recommended that the EPA should provide an off-ramp in the event a nuclear unit 

retires or is offline for an extended period. Commenters recommended that, should EPA choose 

to include nuclear units under construction in the goal setting calculation, States should be 

allowed to retain the right to adjust reduction goals in the event of the unexpected retirement or a 

lengthy outage for one of these units. Commenters stated that otherwise, compliance for these 

states would be impossible due to the large amount of zero-emitting generation that would be 

lost. 

Commenters stated that preserving 'at-risk' nuclear and under-construction nuclear and 

increasing renewables cannot be considered a part of BSER for existing power plants, because 

favoring a certain type(s) of generation is not an emission control. Commenters stated that the 

EPA incorrectly assumes some portion of all existing nuclear units is at risk of retirement and 

unfairly penalizes three states, including Georgia, where utilities have taken steps to build new 
406 

nuclear generation in preparation for a carbon-constrained future. Commenters stated that the 

EPA's inclusion of under construction nuclear in its state goal calculations results in much more 

stringent targets for these states. 

Commenters stated that the proposed rule evaluates the cost and impact of Vogtle Units 3 and 4 

as having no additional cost to Georgia's ratepayers. Commenters stated that the EPA fails to 

understand that construction is on-going, continuation of the project is evaluated semi-annually, 

and ratepayers have been paying for this resource since 2011. Commenters stated that this 

evaluation, as with the original certification, incorporates carbon price scenarios and recognizes 

the new units as being carbon-free. Commenters stated the EPA incorrectly assumes the Georgia 

PSC did not consider the cost of carbon when certifying the new nuclear units as a carbon-free 

resource. However, the commenters stated that from the initial financial analysis for the Plant 

Vogtle project, cost scenarios include the possibility of a price for carbon at multiple levels. 

Commenters recommended that the potential to save ratepayers from the costs of CO2 emissions 

increases the value of Vogtle Units 3 and 4.26 Georgia's investment in carbon-free energy should 

be given full credit toward compliance with the proposed rules. 

Commenters stated that, because the Agency has failed sufficiently to account for the costs 

associated with constructing, operating, and maintaining nuclear units, the EPA has failed to 

follow its statutory mandate under 111(d) to take into consideration costs in setting BSER. 

Commenters stated as part of Building Block 3, EPA also assumes that the five nuclear units 

under construction in Georgia, South Carolina, and Tennessee will come online as scheduled and 

immediately and continuously operate at a 90 percent capacity factor. Commenters said in 

Georgia, EPA focuses on the construction of Units 3 and 4 at Plant Vogtle; incorporation of 

Plant Vogtle Units 3 and 4 into Georgia's goals makes them significantly more stringent, taking 

the final goal from 970 lb/MWh to 834 lb/MWh, an additional 14 percent reduction. 

Commenters said EPA's reliance on under construction nuclear contravenes the statutorily 

mandated factors under 111(d), fails to account for operating characteristics of nuclear units, and 

is inconsistent with Congress' intent as evidenced in the Energy Policy Act of 2005. 

Commenterss stated that in the proposal, EPA treats Plant Vogtle Units 3 and 4 as part of BSER 

because, in EPA's view, there is no "incremental cost" associated with CO2 emission reductions 

from completion of these multi-billion dollar nuclear units. Commenters stated that the EPA 

must take into account costs when setting BSER under Section 111. Commenters concluded that 

the EPA's failure to consider the costs to construct Plant Vogtle Units 3 and 4 in its 

determination as to whether these and other under construction nuclear units are BSER for fossil 

fuel-fired EGUs is a clear error. 

Commenters stated that neither EPA's proposal nor the multitude of TSDs include any legal or 

technical analysis, beyond mere assertions, that supports or justifies EPA's decision to ignore the 

costs that have been incurred to construct these nuclear units and instead focus solely on 

"incremental costs," which EPA deems to be zero. Commenters stated that the EPA has not 

explained how it defines "incremental cost" in this context or how incremental costs would be 

calculated and provides no precedent for this approach. Commenters stated that the Regulatory 

Impact Analysis ('RIA') makes a passing reference to EPA's treatment of under construction 

nuclear units. Additionally, Commenters noted that GHG Abatement Measures TSD contains a 
407 

lone paragraph that recites EPA's assertion about the 'incremental cost' of completing these 

projects, but does not otherwise explain the legal or technical basis for that assertion. 

Furthermore, the commenters stated that the EPA's legal memorandum accompanying the 

proposed rule merely asserts that these five units have "long been known to grid operators for 

planning purposes," but the legal memo does not otherwise explain or justify EPA's approach. 

Commenters observed that the EPA itself acknowledges that 'nuclear generating capacity is 

relatively expensive to build compared to other types of generating capacity.' Commenters 

concluded that when OMB raised concerns about EPA's treatment of under construction nuclear 

units, EPA did not explain its rationale, choosing instead to simply tell OMB that "EPA is taking 

comment on whether we should include the new on the way nuclear in the state targets as BSER 

. . . ." 

Commenters stated EPA has completely ignored the significant capital investment necessary to 

support under construction nuclear; as further support for its treatment of under construction 

nuclear, EPA suggests that because these units were not constructed to comply with future 

carbon regulation, the costs should not be included in this analysis. Commenters said 

specifically, EPA says that it is 'unaware of analogous state policies to support development of 

new nuclear units . . . .' Commenters said EPA, however, completely ignores laws and policies in 

Georgia that, consistent with the national goals and priorities described above, have sought to 

support the development of new nuclear units in part because of the likelihood of future carbon 

regulation. Commenters said as explained in comments submitted to EPA by the GEPD, the 

State of Georgia has a State Energy Strategy, first developed in 2006, that specifically supports 

'advanced nuclear reactors.' Commenters said in addition, in 2009, Georgia enacted the 'Georgia 

Nuclear Energy Financing Act' to facilitate advanced cost recovery associated with new nuclear 

power projects; these policies confirm that Georgia planned ahead to ensure a diverse energy mix 

for its customers in anticipation of CO2 regulation. GEPD put it best: 

• Georgia made the choice to invest significant state resources in nuclear power (1) 

in reliance on state policies in favor of nuclear power as a clean, carbon-free 

source of energy, and (2) in expectation of future federal regulations of carbon 

emissions. 

• As a result, there is no basis for EPA's conclusion that these units would have 

been built anyway absent carbon regulation. As such, EPA's approach to under 

construction nuclear units has not been adequately justified and lacks support in 

the record. EPA should remove under construction nuclear from Georgia's state 

goals. 

Commenters stated the EPAct05 and the Energy Independence and Security Act of 2007 ('EISA') 

sought to expand the commercial utilization of nuclear energy in the United States, while also 

reducing CO2 emissions and ensuring affordable, reliable, and clean domestic energy for 

Americans. Commenters stated that the EPA should align the mechanics of its regulations with 

our nation's energy and environmental policies by removing under construction nuclear from 

Georgia, Tennessee, and South Carolina's state goals and then allowing future generation from 

those units to be available for compliance. 

Commenters recommended that the EPA should adopt final GHG guidelines that: 
408 

• Will encourage States to preserve, life-extend, and expand existing nuclear generation; 

• [Allows States to] include in compliance plans and thus receive emissions credit related 

to all output of new nuclear capacity (including uprates of existing plants) that begins 

operating after the issuance date of the proposed rule. 

Commenters stated the proposed treatment of under-construction nuclear power generation is 

arbitrary and capricious; unlike other generation sources in Building Block 3, the proposal treats 

even under-construction nuclear generation as existing generation for the purpose of goal ratesetting. Commenters said the result of this treatment is to effectively penalize those electric 

utilities that have invested in under-construction nuclear units (and their consumers), who will 

incur very significant costs to bring online this CO2-free generation but will get no credit for that 

generation as a compliance option. Commenters said other under-construction zero-emission 

generation sources in Building Block 3 are not treated in this manner; these other generation 

sources are excluded from the goal rate-setting; thus, they receive credit for zero-emission 

generation when they come online and ultimately contribute power to the grid. Commenters said 

this discriminatory treatment of under-construction nuclear, when there is no identifiable 

difference between it and Building Block 3 renewables, is irrational; as a consequence, EPA's 

proposed Building Block 3 is arbitrary and capricious. EPA can remedy this by treating underconstruction nuclear units like it treats all others: as irrelevant for goal rate-setting, but available 

for goal compliance once constructed." 

Commenters stated that including under-construction plants in the rate-setting algorithm drives 

Georgia's 2030 intensity target for existing sources down to 834 lbs./ MWH, and South 

Carolina's to 772 lbs./ MWH. Commenters stated that this is well below the 1,100-lb/ MWH 

New Source Performance Standard established in EPA's 111(b) rulemaking governing new 

fossil-fired power plants. Commenters concluded that it is irrational and arbitrary to have an 

emission rate standard for existing power plants that is below the emission rate specified for new 

power plants. Commenters recommended that the five reactors under construction - Vogtle 3 and 

4, Summer 2 and 3, and Watts Bar 2 - should be excluded from the rate-setting formula. 

Commenters further recommended that their outputs should count toward compliance, as should 

any other new nuclear capacity once it is online. Commenters also recommended that plants that 

extend their licenses beyond 40 years or beyond 60 years should continue to receive credit in 

compliance calculations. 

Commenters stated that the output from under-construction nuclear units should not be used to 

calculate state emissions rate goals. Inclusion of nuclear units under construction in the rate 

setting penalizes states that support new nuclear plant construction. Commenters also stated that 

the EPA proposes to include the "projected amounts of generation available by completing all 

nuclear units currently under construction..." (Watts Bar 2 in Tennessee, Vogtle 3-4 in Georgia, 

Summer 2-3 in South Carolina) by 2020 in the rate setting for three states, even though those 

units are still under construction and not yet operating. Commenters stated that the EPA has 

chosen an arbitrary projected start date of 2020, and an unrealistic capacity factor of 90 percent. 

Commenters stated that by taking this approach, the Agency has created unreasonable 

compliance risks, and significantly increased the stringency of the emission rate goals for 

Georgia, South Carolina and Tennessee by creating "phantom" zero-emissions generation used to 

determine the state goals. Commenters continued that, as EPA itself notes, "reflecting 
409 

completion of these units in the goals has a significant impact on the calculated goals for the 

states in which these units are located. If one or more of the units were not completed as 

projected, that could have a significant impact on the state's ability to meet the goal." As a result,

Commenters stated that the EPA's approach penalizes states that are building new nuclear 

capacity, and potentially consigns three states to a deficit in zero-emissions generation needed to 

demonstrate compliance before the interim compliance period even begins. 

Commenters stated that, as EPA notes, including these under construction units in the rate setting 

for Georgia, South Carolina and Tennessee could have a significant impact on the ability of those 

states to meet their goals, since they would have to replace any lost zero-emissions MWh with 

other zero-emissions MWh (by increasing reductions from both BSER and approvable nonBSER measures). Given the magnitude of the generation expected from these units, the 

commenters stated that it will be impossible to make up deficits in zero-emissions MWh with 

other BSER or non-BSER reductions. Therefore, Commenters stated that the output from underconstruction nuclear units should not be used to calculate a state's emission rate goal. 

Commenters recommended that the EPA should revise its assumptions regarding the incremental 

cost of the under construction units. Commenters stated that the EPA includes the five units 

under construction as part of BSER because it contends that there is no "incremental cost" 

associated with CO2 emission reductions from completion of these multibillion dollar nuclear 

units based on the belief that "since the decisions to construct these units were made prior to this 

proposal, it is reasonable to view the incremental cost associated with the CO2 emissions 

reductions available from completion of these units as zero for purposes of setting states' CO2 

reduction goals." Commenters stated that, in reality, approximately $10 billion remains to be 

spent on these five reactors; therefore, the EPA's assertion that there is "no incremental cost" 

associated with completing these plants is incorrect. Commenters stated that these are real costs 

that are being incurred, and the EPA needs to revise this assumption regarding the incremental 

cost of the under construction units. 

Commenters stated while under construction units should not be used in the rate-setting process, 

states should be able to include these units in their compliance plans once they are operational, as 

they would be the functional equivalent of any other new nuclear capacity achieved (e.g., new 

plants or power uprates). Commenters said these units should be classified as new nuclear units, 

the generation from which could be used by a state to help meet its goal; allowing these and 

other as yet unplanned units to be utilized for compliance will not only aid states in meeting their 

goals, but also serve as an incentive for states to build new nuclear units. 

Commenters stated EPA's treatment of Georgia's 'under construction' nuclear, Plant Vogtle Units 

3&4, is inequitable and misguided and would almost certainly result in higher electricity rates for 

their members. Commenters also stated under-construction nuclear generation should not be 

included in calculating state goals. 

Commenters stated with regard to Vogtle Units 3&4, Georgia ratepayers who are paving the way 

in reducing carbon emissions should be allowed to take full credit for zero-emitting carbon 

emissions from nuclear generation in complying with any state or utility-specific performance 

standards promulgated pursuant to this rule. 
410 

Commenters stated in calculating the state goals, EPA also included generation from new nuclear 

units that were under construction in 2012; as with the under construction NGCC units identified 

above, the decision to include under construction nuclear units in setting state goals unreasonably 

increases the stringency of the reduction targets for states that have made substantial investments 

in non-emitting nuclear generation. Commenters said the states within which these units are 

being constructed (Georgia, South Carolina and Tennessee) will need all of the generation from 

these new units in order to meet the calculated emission rate targets. Commenters said if these 

units are not available for any reason in the future, these states would face significant compliance 

challenges. Commenters requested EPA remove under construction nuclear units from the 

calculation of the state goals. 

Commenters stated that the EPA should not include under-construction nuclear units in the state 

goal computations. 

Commenters stated the EPA has proposed that the projected generation provided by five nuclear 

units currently under construction be factored into the state goals for the respective states where 

the under construction units are located. Commenters said the EPA is making this proposal 

because of its belief "that since the decisions to construct these units were made prior to this 

proposal, it is reasonable to view the incremental cost associated with the CO2 emission 

reductions available from completion of these units as zero for purposes of setting states' CO2 

reduction goals." Commenters opposed the EPA's proposal to incorporate the projected 

generation from under construction nuclear units in state goal computations; in addition to 

exceeding the EPA's authority under section 111(d) of the CAA to include under construction 

nuclear in its BSER determination for fossil fuel-fired EGUs, the only thing the proposal 

achieves is to make the goals for South Carolina, Georgia, and Tennessee significantly more 

stringent. Commenters said penalizing these states for supporting the continued development and 

deployment of nuclear power, the single largest CO2 reduction option available within the power 

sector, in a rule intended to reduce CO2 emissions within the power sector, is misguided from a 

policy perspective. Commenters said including generation from the under construction nuclear 

units in the state goal computations also introduces a significant risk of noncompliance if the 

units are either not completed, or are completed but do not perform as the 90 percent capacity 

factor the EPA has assumed. Commenters said if the EPA proceeds with finalizing its Proposed 

Guidelines, it should do so without including in the goal computations for South Carolina, 

Georgia, and Tennessee any contribution from the under construction nuclear 

units. Commenters said the EPA should also make it clear that if the units are completed, their 

output should be available to the states for compliance. 

Commenters stated under-construction nuclear should not be included in the calculation of state 

goals; EPA's inclusion of Vogtle 3 and 4 in setting Georgia's performance standard is inequitable 

and misguided. Commenters said rather than rewarding states and utilities that are the early 

movers in permitting and constructing this important type of non-emitting generation, EPA's 

inclusion of under-construction nuclear in calculating state goals serves instead as a penalty. 

Commenters said specifically, the electricity consumers of Georgia should not be penalized for 

stepping up and spending over $14 billion on Vogtle 3 and 4, which will provide the state with 

2,200 megawatts of power, with zero CO2 emissions. Commenters said it is blatantly unfair and 

sends precisely the wrong message to the business community. 
411 

Commenters stated EPA has offered no alternatives to this expensive climate change agenda 

action; it would require Georgia utilities to cut emissions by an additional 44 percent by 2030 at 

existing plants, and it expects this to be done by converting to alternative sources of energy and 

by energy conservation and efficiency. Commenters said the EPA won't credit Georgia's utilities 

for their work done in embracing carbon-free energy by building the first nuclear unit since 

Three Mile Island. 

Commenters stated in Georgia, the two new state-of-the-art reactors will produce approximately 

2,200 megawatts of reliable emissions-free electricity around the clock, EPA's approach to new 

nuclear units like these in Georgia is unacceptable. Commenters said if EPA's objective is to 

reduce CO2 emissions, then EPA should not penalize the citizens of Georgia for investing 

billions in more nuclear power by not giving us full credit for this carbon-free energy source. 

Commenters stated initially, Georgia Power and others committed to be the first in the nation to 

construct new nuclear in almost 30 years. Commenters said while other utilities will benefit 

from the path paved by Vogtle's units 3 and 4, GA took this step with hopes of enhancing fuel 

diversity and addressing future CO2 requirements. 

Commenters said yet, rather than reward the expansion of zero-carbon generation, EPA 

guidelines penalize Georgia for its early action; because of Vogtle's units 3 and 4, EPA requires 

more aggressive reductions from Georgia than any other similarly situated state. 

Commenters said in fact, EPA admits that it ignores the investment they are making in Vogtle 3 

and 4, yet it relies on the CO2 reduction in setting Georgia's limits. Commenters said as a result, 

EPA's proposal forces Georgians to take on a significant additional cost of further reduced CO2. 

Commenters stated EPA has proposed building blocks to help states achieve lower emissions; 

however, many of these assumptions for these building blocks are not a good fit for South 

Carolina. Commenters said the most critical in terms of cost is the way the proposal treats new 

nuclear already under construction. 

Commenters said the new nuclear project with South Carolina Electric and Gas will cost about 

$10 billion, and South Carolina electric consumers are already paying into the project. 

Commenters said by considering these under-construction units as if they are already built, and 

in doing so setting the goal more restrictively, EPA is punishing South Carolina for being 

proactive in its CO2 reductions and investing early in this project. Commenters said EPA should 

not count under-construction nuclear as a part of the state target, but should allow it to be used 

for compliance with the revised target. Commenters said this approach would give South 

Carolina full credit for its efforts, and the customers would not bear the burden of paying for 

additional reductions. 

Commenters stated two specific concerns: first, under construction, nuclear should not be 

included in the calculation of state goals. Commenters said EPA's inclusion of Vogtle 3 and 4, in 

setting Georgia's performance standard, is unfair and misguided; rather than rewarding states and 

utilities, like Georgia, that are the early movers in permitting and construction for this important 

type of zero-carbon emission generation, EPA's inclusion of under-construction nuclear in 

calculating state goals serves, instead, as a penalty. Commenters said Georgia utilities and the 
412 

consumers should not be penalized for stepping up and spending over $14 billion on Vogtle 3 

and 4, which will provide the state 2,200 megawatts of power with zero CO2 emissions; this is 

blatantly unfair. 

Commenters stated the current proposal does not allow us to consider the new V.C. Summer 

nuclear units coming online in 2018 and 2019 as part of the efforts to reduce the carbon 

emissions, and that plan is being built by South Carolina Electric and Gas -- SCANA is the 

parent company -- and by Santee Cooper, who is the power supplier. 

Commenters stated the early action to build the V.C. Summer nuclear plants, and actually 

displace or eliminate some of the capacity with the nuclear stations, is not being included in 

these numbers at all, and it places a big burden on South Carolina, as far as money and reaching 

the target reductions is concerned. 

Commenters stated another factor in the unfairness of Georgia is how the rule ignores the efforts 

in building two new emission-free nuclear plants. 

Commenters stated Plant Vogtle is undergoing the construction of two new nuclear reactors, 

units 3 and 4. Commenters said Georgia rate-payers, including manufacturers, have been paying 

the financing costs already for this construction, which is due now to come online in 2017 and 

2018; and they will be responsible for the substantial end-service cost once those units become 

operational. 

Commenters said Vogtle 3 and 4 is a major investment in Georgia's future; and it will contribute 

to lower CO2 emissions; however, the rule penalizes Georgia for that decision by using the fact 

that Vogtle 3 and 4 will lower CO2 emissions to justify a higher emissions reduction target. 

Commenters said this essentially gives Georgia no credit for the construction of Vogtle 3 and 4 

when it comes to CO2 emissions. 

Commenters also supported the preservation and upgrade of the existing nuclear fleet; this could 

offer significant zero carbon power if the investments can be justified. Commenters said EPA 

notes the potential of new nuclear but also notes the impact of schedule on state plans. 

Commenters noted that SCANA and Southern Company have announced multi-year delays since 

the draft rule was published which will clearly change the South Carolina and Georgia proposal 

by EPA and further shows the risks inherent in such planning. 

Commenters stated also in Building Block 3 (Using an Expanded Amount of Less CarbonIntensive Generating Capacity) the EPA has proposed that Nuclear Under Construction is 

assumed to be already built and operating and is included in the state goals. Commenters said 

there are five nuclear units under construction in the country; two of these units (V.C. Summer 2 

and 3) are located in South Carolina and are 40 percent owned by Santee Cooper, the primary 

power supplier. Commenters said the proposed rule gives absolutely no credit for Santee 

Cooper's investment in the two 1100 MW Westinghouse nuclear units, with a combined 

expected price tag of over $10 Billion; instead of being credited for being at the vanguard of 

clean emissions investment, the State of South Carolina receives a penalty. Commenters said this 

single provision of the EPA rules results in South Carolina's target CO2 level decreasing from 

990 lbs/MWh to 772 lbs/MWh, and will cost an estimated $8.7 Billion to the membership. 
413 

Commenters said this cost is in addition to the billions of dollars which the membership will pay 

for the new non-emitting nuclear units. Commenters said they are paying twice for the same 

carbon reduction. Commenters said the EPA made the decision to include these units within the 

BSER based on its unsubstantiated and undocumented conclusion that there is "no incremental 

cost" associated with CO2 emissions reductions available from the completion of units under 

construction. Commenters said the conclusion seems to rest solely upon the observation that the 

"decisions to construct these units were made prior to this proposal." Commenters said the true 

"incremental cost" to the customers paying for these Nuclear Under Construction investments is 

the additional cost of carbon reduction over and above the costs that will be incurred due to those 

commitments. 

Commenters stated as a practical matter for those states which have nuclear under construction, 

the EPA assumption that the plants will be completed places an additional burden on those states 

over and above the huge price tag that must be paid for paying twice for carbon reduction. 

Commenters said the new nuclear units at V.C. Summer when fully operational will produce 

approximately 16 million MWh of power annually; this amount is more than all of the proposed 

redispatched NGCC in 2029 and far greater than the amount of renewable generation that the 

EPA has targeted for South Carolina in 2029 (9,675,000 MWh). Commenters said this is a 

massive amount of clean, carbon free capacity and energy which the state is assumed to have 

available; any inability to build the units or keep them on line represents a huge, and almost 

insurmountable, regulatory compliance risk to their members. 

Commenters stated EPA's treatment of Nuclear Under Construction as completed is especially 

arbitrary when the treatment of other non-hydro renewables is examined; all non-hydro 

renewable MWhs generated during the plan period are allowed as compliance resources, 

regardless of in-service dates. Commenters said the EPA offers no explanation for the disparate 

treatment of non-carbon emitting resources. Commenters asserted the failure to treat Nuclear 

Under Construction in a similar manner to non-hydro renewables is arbitrary and capricious and 

is beyond statutory authorization, and strongly encourages the EPA to alter its proposed rule to 

allow credit for Nuclear Under Construction. 

Commenters stated EPA's treatment of Nuclear Under Construction is also arbitrarily 

inconsistent with U.S. energy policy. Commenters said expansion of nuclear energy was part of 

both of the last two major pieces of energy legislation (the Energy Policy Act of 2005 (EPAct) 

and the Energy Independence and Security Act of 2007 (EISA)). Commenters said President 

Obama has repeatedly and very publicly expressed his support for new nuclear energy. 

Commenters said despite this clear expression by both Congress and the President, the proposed 

rule punishes South Carolina for its actual expansion of nuclear capacity. 

Commenters stated the proposed rule includes the output from yet-to-be-completed nuclear units 

in the calculation of the state goal for "existing units, even though the units will not produce any 

power until years after the final rule is released. Commenters said this treatment of nuclearunder-construction is particularly troublesome because of the extreme lead-time needed to permit 

and construct these units; if the process of building these units had begun after the release of the 

proposed rule (when they would be treated totally differently), the very earliest to expect to 

receive power from those plants would be around 2025 ... 5 years after the beginning of the 

intermediate goal required by the proposed rule. Commenters said this inconsistent treatment has 
414 

disproportionately increased the amount of CO2 emission reductions that South Carolina must 

achieve. 

Commenters stated in contrast, states that have utilities which have begun but not finished wind 

and solar projects are rewarded by EPA because those sources and the future carbon emissions 

reductions they are expected to achieve are not "assumed" and therefore can be used to 

effectively meet a state's goal. Commenters said if investment in nuclear is not afforded the same 

net benefit as all other zero emitting generation towards meeting the State goal, then utilities in 

South Carolina will be forced to build additional alternative carbon-free generation to offset 

carbon emissions from fossil fuel generation and consumers will be forced to pay twice for 

carbon reductions just because they invested early in one carbon-free technology instead of 

another. 

Commenters stated that the EPA Should Not Include Under Construction Nuclear Units in State 

Goal Computations. 

Commenters continued the EPA has proposed that the projected generation provided by five 

nuclear units currently under construction be factored into the state goals for the respective states 

where the under construction units are located. Commenters said the EPA is making this 

proposal because of its belief "that since the decisions to construct these units were made prior to 

this proposal, it is reasonable to view the incremental cost associated with the CO2 emission 

reductions available from completion of these units as zero for purposes of setting states' CO2 

reduction goals." Commenters opposed the EPA's proposal to incorporate the projected 

generation from under construction nuclear units in state goal computations. Commenters said in 

addition to exceeding the EPA's authority under section 111(d) of the CAA to include under 

construction nuclear in its BSER determination for fossil fuel-fired EGUs, the only thing the 

proposal achieves is to make the goals for South Carolina, Georgia, and Tennessee significantly 

more stringent. Commenters said penalizing these states for supporting the continued 

development and deployment of nuclear power, the single largest CO2 reduction option available 

within the power sector, in a rule intended to reduce CO2 emissions within the power sector, is 

misguided from a policy perspective. Commenters said including generation from the under 

construction nuclear units in the state goal computations also introduces a significant risk of 

noncompliance if the units are either not completed, or are completed but do not perform as the 

90 percent capacity factor the EPA has assumed. Commenters said if the EPA proceeds with 

finalizing its Proposed Guidelines, it should do so without including in the goal computations for 

South Carolina, Georgia, and Tennessee any contribution from the under construction nuclear 

units. Commenters said the EPA should also make it clear that if the units are completed, their 

output should be available to the states for compliance. 

Commenters stated nuclear generation is undervalued in the marketplace; states need to join 

Georgia and South Carolina and recognize the importance of the nuclear fleet and adopt policies 

that will allow us to develop reactors like we're doing. Commenters said unfortunately, the rule 

doesn't go far enough; in fact, the new rule, most likely, will make us even more dependent on 

natural gas. 

Commenters stated a simple calculation illustrated recently by FERC Commissioner Norris 

demonstrates that the country's gas fired fleet already emits more CO2 than our 2050 national 
415 

target. Commenters said it seems paramount that any rule must substantially incent new and 

existing nuclear power far more than this rule does. Commenters said the rule's evaluation of the 

cost and impact of new requirements assume that Plant Vogtle's Units 3 and 4 add zero dollars to 

Georgia's CO2 reduction efforts. Commenters said this rule assumes that the Georgia PSC and 

Vogtle owners did not consider the cost of carbon at all when they certified Plant Vogtle as a 

carbon free emitting resource; nothing could be further from the truth. 

Commenters stated in fact, their ongoing monitoring of this plant continues to consider the cost 

of carbon every 6 months, but you can bet the cost is not zero dollars, as this rule assumes. 

Commenters stated the Southeast is uniquely impacted by building block 3 in the treatment of 

nuclear units under construction. Commenters said generation fleets across the Southeast have 

been transitioning to supply electricity with lower carbon emissions. Commenters said for TVA, 

this has meant relying more on renewable energy resources, natural gas-fired generation, and, 

importantly, nuclear energy. 

Commenters said TVA is completing construction of a second unit at its Watts Bar Nuclear Plant 

in Tennessee; billions of dollars have been invested in this carbon-free resource and when Watts 

Bar unit 2 comes online in late 2015, it will be the first new nuclear unit in the twenty-first 

century and provide nearly 10,000 gigawatt hours of emission-free generation per year. 

Commenters said Watts Bar 2 is an integral component of TVA's goal to achieve a more 

balanced, cleaner portfolio of energy resources. 

Commenters expected this investment to give TVA a good start toward complying with the 

carbon emission regulations. Commenters said under EPA's rule, as proposed, that does not 

happen; rather, TVA and the utilities with nuclear units under construction are handicapped 

because the generation for these units is used to set more stringent limits on the affected fossil 

fleets in our states. Commenters said rather than gaining compliance margin under the proposed 

rule, Tennessee, TVA, and Tennessee's compliance risks are increased; that's not right, and that's 

poor environmental policy. 

Commenters stated EPA asserts that there's flexibilities for states to use some, none, or all of the 

building blocks in crafting the state plans; but in states where nuclear is under construction, they 

have no valid options to assuage the impact of this block due to its size. Commenters said any 

single source making this much contribution to a state's reduction provides a compliance risk to 

the region. Commenters said the proposed rule effectively punishes this early action in 

investments by ratepayers by creating a big compliance risk. 

Commenters stated utilities should not be penalized for investment already made in zero carbon 

emissions sources, such as nuclear. Commenters said PowerSouth has committed to participating 

in the expansion of the Southern Nuclear Vogtle Nuclear Plant near Augusta, Georgia through a 

Purchase Power Agreement with Municipal Electric Authority of Georgia and PowerSouth will 

receive approximately 125 MW of energy from the units for 20 years. Commenters said the CPP 

includes under construction nuclear units when calculating state's goals; rather than penalizing 

these voluntary investments in nuclear generation, EPA should reward these efforts and treat 

under construction nuclear like future nuclear units. 
416 

Commenters stated the draft rule cancels out the benefits of nuclear development. Commenters 

said the draft rule penalizes for advancements and ignores the significant investment by making 

Georgia's goal more stringent than otherwise comparable states to account for operation of these 

new units. Commenters said penalizing states for being proactive sends the wrong message to 

future commissions. Commenters said instead, Georgia should be credited for its foresight by 

treating Vogtle Units 3 and 4 the same as other future nuclear units that are not yet under 

construction- available for compliance with, but not incorporated into, the state goal. 

 Commenters stated EPA's approach to 'under-construction' nuclear generation is flawed and 

should be revised. 

Commenters said EPA has proposed to include the expected zero-carbon generation from five 

new nuclear reactors in the state goals for Georgia, South Carolina, and Tennessee. Commenters 

said EPA assumes that each of these reactors will be built before 2020, and will operate at an 

average 90 percent capacity factor during both the interim and final compliance periods; this 

approach is problematic for several reasons. 

Commenters said first, the sheer size of these units means that their contribution to the emission 

targets of their host states is extremely significant; the inclusion of the full expected megawatthours (MWh) of generation from these facilities in state goals thus creates a large compliance 

risk for these states. Commenters said construction delays, temporary shutdowns, unexpected 

maintenance outages-all of which are typical for nuclear reactors-could mean that generation 

from these units could fall short of EPA's assumptions by many millions of MWh during some 

compliance periods (particularly the short three-year compliance period EPA proposes for final 

state targets). 

Commenters added due to the complexity of the technology and the potentially significant 

consequences of making an error, operators of nuclear reactors typically require months or years 

to bring a new facility fully online; therefore, it is far from certain that these facilities, if built, 

will operate at an average capacity factor of 90 percent during the interim compliance period. 

Commenters said although EPA is correct that the industry-wide average capacity factor across 

the entire nation was approximately 90 percent in 2013, this snapshot hides significant 

differences in average capacity factors among reactors and over an individual reactor's lifetime. 

Commenters said for example, the average capacity factor of existing nuclear reactors over the 

last 30 years in the United States is only 78 percent; similarly, one quarter of U.S. nuclear 

facilities operated at an average capacity factor of only 70.8 percent over the last three years. 

Commenters said because of the large size of the five under-construction reactors, overly 

ambitious or mistaken assumptions about their future capacity factors could substantially and 

unreasonably increase the stringency of state goals. Commenters said EPA should reduce the 

assumed capacity factor for under-construction facilities to account for the distinct possibility 

that they will operate at capacity factors of 70 percent or lower during some compliance periods. 

Commenters said in addition, EPA should allow states with under-construction nuclear facilities 

to recalculate their targets after promulgation of the final rule if these large projects are 

significantly delayed or shut down due to unforeseen circumstances that are beyond the state's 

control. Commenters said such a "safety valve" would ensure that these states' proactive efforts 
417 

to construct zero-carbon generators do not unintentionally become significant liabilities as a 

result of the Proposed Rule. 

Commenters said finally, regardless of what approach EPA takes, it should recalibrate the 

interim targets for states hosting under-construction nuclear facilities to account for the 

possibility that these units may not be operating at full capacity in the early years of the interim 

compliance period. Commenters said by gradually phasing in expected generation from these 

units (as it proposes to do for RE and EE), EPA can help mitigate the risk that these massive 

clean energy projects will be delayed or unable to reach full capacity by the start of the first 

compliance period." 

Commenters disagreed with EPA's proposal to include under-construction nuclear units in the 

calculation of a state's goal. Commenters said EPA states that "since the decisions to construct 

these units were made prior to this proposal, it is reasonable to view the incremental cost 

associated with the CO2 emissions reductions available from completion of these units as zero 

for the purposes of setting states' CO2 reduction goals." Commenters said while the decisions to 

initiate construction of these units did precede the Proposed Rule, the units are not anywhere 

near completion and their ultimate commercial operation dates are unknown. Commenters said 

furthermore, federal actions to limit the emissions of CO2 from the power sector were already 

under consideration when the decisions to initiate construction were made. Commenters said the 

owners and their regulators undertook the additional costs of nuclear generation in large part to 

be better positioned to comply with those anticipated federal actions; customers of the owners of 

the five under-construction nuclear units are already paying, and will be paying for the life of the 

units, for the CO2 reductions due to their operation. 

Commenters said the inclusion of the under-construction nuclear units in the emission rate goal 

calculation for the affected states results in substantially more stringent goals; Georgia's target is

14% more stringent, South Carolina's is 22% more stringent, and Tennessee's is 14% more 

stringent than would otherwise be the case, absent their under-construction nuclear units. 

Commenters said furthermore, it is certain that at least some of the new nuclear units that EPA 

proposes to include in state CO2 goal computations will face additional hurdles during operation 

that will reduce their ability to generate MWh on the schedule and at the level that EPA assumes 

in setting state targets; for example, new facilities typically require lengthy testing and finetuning periods before they are able to run at their designed capacity factor. Commenters said in 

addition, individual facilities may not operate at the 90% capacity factor EPA uses in the 

calculation during extended periods because of the need to refuel or due to other planned and 

unplanned outages. Commenters said a typical reactor must refuel at least every 18 months: a 

shutdown usually lasting six weeks or more. Commenters said shutdowns for maintenance, 

uprates, or safety issues can last much longer: on the order of six months or more. Commenters 

said as construction continues, the risk remains that additional challenges in fabrication, 

assembly, delivery, and installation of structural modules, delays in the receipt of the remaining 

permits necessary for the operation of these units, or other issues could arise and might further 

impact project schedules and costs. Commenters said finally, events occurring far from the 

under-construction units that affect nuclear generation (e.g., the tsunami-induced meltdown at 

the Fukushima Daiichi reactor in Japan) could lead to mandatory design changes, additional 

regulations, and shutdowns that could significantly impact the timing and quantity of electricity 

produced by the under-construction nuclear units. 
418 

Commenters said EPA's proposal to include generation from under-construction nuclear units in 

the calculation of state goals is also unfair and arbitrary because it is markedly different from 

EPA's treatment of renewable energy, even though both generation technologies' ability to 

reduce emissions from the power sector is the same.

Commenters said while EPA's proposed calculations for building block 3 assume that every state 

that has committed to constructing new nuclear capacity will do so, EPA does not similarly 

assume that states with commitments to ambitious renewable energy policies (e.g., through a 

state Renewable Portfolio Standard (RPS)) will follow through with their own RPS policies. 

Commenters said unlike Georgia, South Carolina, and Tennessee (the states with underconstruction nuclear units), EPA's building block 3 goals for states with RPSs are not based on 

the level of renewable energy to which these states have committed (in their own RPS 

schedules); for example, Minnesota's goal is 30% by 2020, yet EPA's goal-setting methodology 

requires Minnesota to only reach 15% of its in-state generation from renewable resources by 

2030. 

Commenters said EPA has not explained why it has arbitrarily increased the stringency of the 

emission goals for states with under-construction nuclear units by assuming they will fully 

complete the construction and have the units at full operation by 2020, while not also building 

into state goals states' commitments to build significant amounts of new renewable energy. 

Commenters said this inconsistency is further underscored by the fact that renewable energy 

commitments are enforceable through regulations associated with the RPS, while the 

commitments to build new nuclear is not mandated through any state regulatory requirement. 

Commenters believed all under-construction, non-CO2-emitting generation sources be excluded 

from a state's goal calculation in building block 3, while their output should be allowed to 

receive credit in compliance calculations, again in accordance with NARUC's resolution on this 

topic. 

Commenters quoted the EPA: "We request comment on whether it is appropriate to reflect 

completion of the five identified nuclear EGUs currently under construction in the state goals 

and on alternative ways of considering these units when setting state goals." 

Commenters responded: 

• No, this is not appropriate. 

• If EPA considers development of nuclear energy part of a BSER, you should 

simply calculate an expected growth rate in nuclear generation between now and 

2030. 

• That growth rate would likely be quite small, but it would be a much more fair 

method than a plant-by-plant approach. 

• EPA should note that there are many ways to increase nuclear generation beyond 

construction of new plants. Many projects to increase the generation of existing 

plants ("uprates") have been pursued over the last 4 decades, and these uprates 
419 

have resulted in increased nuclear generation equivalent to many new plants. 

Increases in capacity factor since 1980 have also caused increased yearly nuclear 

generation equivalent to many new plants. 

• The current approach, identifying particular plants, perpetuates the incorrect 

sentiment that the costs of nuclear power are uniquely high and problematic. 

• The current approach also unfairly modifies the State Goals of 3 particular states." 

Commenters quoted the EPA: "We invite comment on all aspects of the approach discussed for 

treatment of nuclear generation. In addition, we specifically request comment on whether we 

should include in the state goals an estimated amount of additional nuclear capacity whose 

construction is sufficiently likely to merit evaluation for potential inclusion in the goal-setting 

computation. 

Commenters responded that: 

• No, this is not appropriate. 

• Judgments of the likelihood of construction of particular plants cannot be fairly 

quantified. 

• This approach, involving the identification and assessment of particular 

construction projects, would again represent the use of an unfair plant-by-plant 

approach that is not consistent with other building blocks of the BSER. 

• This approach would again result in unfair modifications to the State Goals of 

particular states. This approach would be even more unfair than the approach 

reflecting completion of the five nuclear EGUs above, since it would be 

inherently speculative. 

• The intent of this approach could be satisfied by calculating an expected growth 

rate in nuclear generation between now and 2030, as suggested above. 

Commenters stated three states have new nuclear plants under construction; these plants will not 

begin operation until after EPA is scheduled to issue the final rule; however, EPA has 

prematurely included this carbon-free generation in establishing these state goals. Commenters 

said EPA's treatment of these new nuclear units has lowered the emission rate goals for each of 

these states, ignoring the practical difficulties associated with such projects; also, developing a 

new nuclear power plant could take about 15 years from inception to operation; hence, the 2030 

deadline for compliance with the CO2 goal will not likely incentivize any additional nuclear 

units. 

Commenters provided the following recommendations: 

a. New nuclear generation should be excluded from building block 3 when determining 

state emission rate goals and instead should only be considered as an eligible action for 

compliance purposes. 
420 

b. New nuclear generation should remain an eligible action. 

c. Given the long lead time for development and construction of a nuclear generation unit, 

EPA should consider new nuclear generation as an eligible action if construction has 

commenced prior to the end of the compliance period. If a nuclear unit or uprate is under 

construction prior to 2030, the predicted CO2 reduction or MWh benefits should be 

credited in 2030, as a way to further promote new nuclear generation. 

Commenters stated in addition to the expanded use of renewables, EPA recognizes that 

increasing the amount of nuclear capacity that is available to operate is a technically viable 

approach to reducing CO2 emissions from affected fossil fuel-fitted units; thus, new nuclear and 

nuclear up rates performed in the future will be creditable towards compliance. Commenters 

supported this approach to addressing new nuclear and nuclear unit up rates; however, EPA is 

proposing to include new nuclear generation under construction (assuming a 90% capacity 

factor) in the denominator of a state goal, including Watts Bar in TN, Vogtle in GA, and Summer 

in SC. Commenters agreed with stakeholders who believe that owners of first-mover new nuclear 

units currently under construction should not be effectively penalized by having the projected 

generation from these units included in the determination of the state emission goals. 

Commenters cited the following from the preamble to the proposed rule: 

"One way to increase the amount of available nuclear capacity is to build new 

nuclear EGUs. However, in addition to having low variable operating costs, 

nuclear generating capacity is also relatively expensive to build compared to 

other types of generating capacity, and little new nuclear capacity has been 

constructed in the U.S. in recent years."

Commenters stated however, the EPA does not appear to have performed a meaningful analysis 

of the costs of new nuclear; instead, the Agency accepted the premise that new nuclear is too 

expensive to be competitive and focused on the five new reactors already in construction, but 

nevertheless determined the incremental cost of their inclusion in the rule to be zero because the 

states/utilities involved have already decided to build them, regardless of the rule. Commenters 

said the draft rule includes those five reactors in the calculation of the goals for the affected 

states (Georgia, South Carolina, and Tennessee). 

Commenters said the EPA used the same methodology with NGCC units currently in 

construction, but its application to nuclear warrants a more substantive economic analysis 

because of its much greater costs; the Agency implicitly understood this, based on its assessment 

that the low levels of capacity additions are due to the excessive cost of new reactors. 

Commenters said what is more, although the EPA did not conduct the requisite economic 

analysis to reach a properly informed conclusion as to the appropriateness of its approach, it does 

recognize that uncertainties remain regarding the ultimate completion of the reactors: 

"[W]e are proposing that the emission reductions achievable at affected sources based on the 

generation provided at the identified nuclear units currently under construction should be 

factored into the state goals for the respective states where these new units are located. However, 

the EPA also realizes that reflecting completion of these units in the goals has a significant 
421 

impact on the calculated goals for the states in which these units are located. If one or more of 

the units were not completed as projected, that could have a significant impact on the state's 

ability to meet the goal." 

Commenters said without having calculated the incremental cost of bringing the reactors online, 

and by assuming it to be zero, the EPA lacks a credible rationale for this aspect of the rule; the 

significance of this defect is considerable. Commenters said the draft rule would incentivize the 

states to ensure these reactors are completed by requiring them to achieve the same emissions 

rate reductions, regardless of the projects' total costs nor those of the alternatives; the states 

would be under pressure to count the cost of including the reactors in their 111(d) compliance 

plans as $0. Commenters said if the costs of alternative to nuclear were greater than $0, they 

would appear to be less cost-effective compliance options even if, in reality, they were less 

expensive than completing the reactors. 

Commenters said furthermore, because construction on most of the reactors is still at less than 

50% complete, it would be possible to avoid a significant amount of the total cost should the 

states or utilities decide to cancel them. Commenters said it is essential that the EPA calculate 

the cost of completing the reactors so the states may accurately compare it to other available 

alternatives; such an analysis would be complicated due to its dependency on a number of 

variables, from the timing of the decision, the stage of completion of the reactor at that time, the 

escalation of costs that might influence such a decision, the "exit costs" of canceling contracts 

with vendors and contractors, stranded costs, etc. Commenters said EPA's failure to recognize 

the need for such rigor makes it appear that the decision to incorporate the five new reactors into 

Building Block 3 was arbitrary and capricious, and conclusion-driven rather than a sound policy 

decision. 

Commenters said based on the history of cancelled nuclear reactor projects, it is quite possible 

that one or more of the five reactors in construction could be cancelled; of fifty-one reactors that 

were cancelled after commencing construction, nine were at an advanced stage of completion 

(50% or greater), including four which were more than 80% complete and one which was 

completed but never began commercial power operations. Commenters said utilities had spent a 

total of over $25 billion on the projects, amounting to an inflation-adjusted (2014) $58 billion. 

Commenters said the owners of both the Vogtle and Summer projects have announced 

construction delays and cost overruns, and analysts predict that more can be expected; while the 

utilities and regulators have exhibited willingness to continue with the projects, it is quite 

possible they will reevaluate the projects before the reactors begin commercial operation, even if 

they have reached an advance stage of completion. Commenters said the Tennessee Valley 

Authority (TVA) all but cancelled the Watts Bar Unit 2 project, suspending construction for 

nearly 20 years after having reached an advanced stage of construction (~80%); in addition, TVA 

must still receive an operating license from the Nuclear Regulatory Commission, since the 

reactor is being licensed under the regulations that were in place when TVA commenced the 

project in 1973. Commenters said the exceptional level of uncertainty that plagues nuclear 

reactor construction warrants a thorough evaluation of these projects. 

Commenters stated based on their exceptional cost and the possibility that they may never be 

completed, the EPA should remove reactors in construction from the BSER; doing so would 
422 

result in higher goals for the three affected states (and therefore lower levels of emissions 

reductions), but the EPA has no rational basis for its decision to include them in the BSER. 

Commenters said however, using more realistic estimates of renewable energy and efficiency 

additions, as recommended by IEER, would establish goals for these three states that are more 

economically and technically sound, and which would be comparable to or superior to those in 

the draft rule. 

Commenters stated five nuclear EGUs at three plants are currently under construction. U.S.; EPA 

believes that since the decisions to construct these units were made prior to this proposal, it is 

reasonable to view the incremental cost associated with the CO2 emission reductions available 

from completion of these units as zero for purposes of setting states' CO2 reduction goals 

(although they acknowledges that nuclear is very expensive and the planning for those units 

likely included consideration of the possibility of future regulation of CO2 emissions from 

EGUs). Commenters said because U.S. EPA considers completion of these units at zero cost, 

they have determined addition of these units into the state goals can be done at a very reasonable 

cost; obviously a new nuclear plant would be quite expensive and it surely benefits U.S. EPA in 

the cost analysis of this rule to consider these units at zero cost. Commenters believed, at a 

minimum, U.S. EPA should consider the real costs of these units because absent this rule, these 

units would not be required to be preserved and operate at U.S. EPA specified levels indefinitely. 

Commenters stated U.S. EPA also realizes that reflecting completion of these units in the goals 

has a significant impact on the calculated goals for the affected states and if one or more of the 

units were not completed as projected, the affected state could struggle to meet the goal. 

Commenters said therefore, U.S. EPA is requesting comment on whether it is appropriate to 

reflect completion of these units in the state goals. Commenters asserted this is another example 

as to why there MUST be flexibility to adjust goals in the future when there are legitimate 

circumstances that warrant an adjustment. 

Commenters stated under construction nuclear capacity should be treated like "new" units for all 

purposes under the final rule. Commenters said the proposed rule includes under construction 

units in the state goal-setting calculation. Commenters stated it is inappropriate to include 

nuclear generation in determining a state's carbon emission target level; rather than count under 

construction units in the state goal-setting calculation, EPA should permit states to use the 

entirety of the generation from such units in state compliance plans. 

Commenters stated EPA's approach to setting state goals is arbitrary and capricious; EPA should 

adjust South Carolina's goal to reward rather than punish the state for making significant 

investments in zero-carbon generation. 

Block Three: EPA's Assumptions About Nuclear Generation Unfairly Penalize South 

Carolina for Taking the Lead on New Zero-Carbon Generation. 

Commenters stated EPA's inclusion of under-construction and "at risk" nuclear generation in 

calculating state emission goals is both arbitrary and unnecessary for achieving EPA's desired 

reduction in EGU emissions. Commenters said it is also opposed by the National Association of 

Regulatory Utility Commissioners (NARUC), which passed a resolution urging EPA not to base 

state goals on emission reductions from "at risk" or under-construction nuclear generation. 
423 

Commenters agreed with NARUC that EPA should not calculate state goals based on assumed 

emission reductions from "underconstruction" and "at risk" nuclear generation. Commenters said 

as with other forms of zero-carbon compliance options, new under-construction nuclear 

generation, as well as uprated and relicensed nuclear generation should, however, be an eligible 

compliance pathway for state plans. 

Commenters stated EPA's proposal to include expected generation from "under-construction" 

nuclear facilities in calculating state goals has generated tremendous concerns among customers. 

Commenters said as of November 25, 2014, Santee Cooper has received for submission into the 

record over 36,000 comments from individual customers opposing EPA's proposed treatment of 

under-construction nuclear and urging EPA to provide South Carolina full credit for building 

new clean nuclear power. Commenters said this high (24%) response rate is just one measure of 

the importance that customers place on this issue. Commenters added numerous local 

governments have passed resolutions expressing concern about the inconsistent treatment of 

under-construction nuclear. 

Commenters stated EPA's approach to setting state goals is arbitrary and capricious; EPA should 

adjust South Carolina's goal to reward rather than punish the state for making significant 

investments in zero-carbon generation; EPA's assumptions about nuclear generation unfairly 

penalize South Carolina for taking the lead on new zero-carbon generation. 

Commenters continued stating Santee Cooper, along with eight other utilities in three states, 

submitted joint comments regarding EPA's treatment of under-construction nuclear generation. 

Commenters said these comments provide information about the five units under construction in 

South Carolina, Georgia and Tennessee, discuss EPA's proposed methodology for incorporating 

electric generation from these units in the rate-setting calculation and how that approach severely 

penalizes South Carolina, Georgia and Tennessee, show how EPA's approach is inconsistent 

with key aspects of our nation's energy and environmental policies, and explain why EPA's 

approach is unsupported in the record, arbitrary, and unauthorized by section 111(d). 

Commenters said the joint comments request that EPA remove the under-construction nuclear 

units from the rate-setting calculation, and allow South Carolina, Georgia and Tennessee to 

receive compliance credit for emissions reductions enabled by these units when they become 

operational. 

Commenters stated EPA's approach to setting state goals is arbitrary and capricious; EPA should 

adjust South Carolina's goal to reward rather than punish the state for making significant 

investments in zero-carbon generation. Commenters said EPA's assumptions about nuclear 

generation unfairly penalize South Carolina for taking the lead on new zero-carbon generation; 

inclusion of 'under-construction' nuclear generation in states' emission goals is arbitrary and 

unnecessary. 

Commenters stated the current proposal is both arbitrary and unnecessary; it is arbitrary because 

EPA is effectively penalizing states and utilities that have made substantial investments in 

nuclear power-which is one form of zero-carbon electricity-while rewarding states that have 

invested in other forms of zero-carbon electricity (such as renewable energy). Commenters said 

it is unnecessary because states and utilities will already have strong incentives under the 

Proposed Rule to complete under-construction nuclear facilities and preserve existing nuclear 
424 

capacity. Commenters said in South Carolina's case, EPA's inclusion of under-construction 

nuclear energy is responsible for a third of the state's ambitious emission reduction goal. 

Commenters stated Santee Cooper's decision to invest in zero-carbon nuclear generation rather 

than traditional, fossil-fueled forms of power was motivated in large part by the recognition of 

the need to reduce the greenhouse gas intensity of Santee Cooper's generation fleet in light of 

expectations that EPA or Congress would soon impose limits on the amount of greenhouse gases 

that could be emitted by the power sector. Commenters said for example, Santee Cooper's 

resource planning decisions have for years been based on assessments that a federal carbon tax 

or similar policy could be implemented as early as 2010. Commenters said in addition, Santee 

Cooper's Board of Directors adopted a policy of 40% of electricity to be sourced from nongreenhouse gas emitting generation in 2007. Commenters said although Santee Cooper also 

invests in other forms of low-carbon energy and energy efficiency, the decision was made to 

invest in nuclear energy because this investment meets customers' needs for reliable, affordable 

energy while significantly reducing the generating fleet's GHG emissions. 

Commenters stated EPA's proposal to include expected generation from these under-construction 

nuclear reactors is arbitrary and unfair for several reasons. Commenters said first, EPA 

arbitrarily assumes that the cost of CO2 reductions from these units is zero and that they will run 

at a 90% average capacity factor during each compliance period; second, EPA's treatment of 

states' commitments to and investments in nuclear energy is arbitrarily different from (and more 

punitive than) its treatment of states' commitments and investments in renewable energy (RE). 

Commenters stated EPA's approach to setting state goals is arbitrary and capricious; EPA should 

adjust South Carolina's goal to reward rather than punish the state for making significant 

investments in zero-carbon generation. Commenters said EPA's assumptions about nuclear 

generation unfairly penalize South Carolina for taking the lead on new zero-carbon generation. 

Commenters said EPA incorrectly assumes that under-construction nuclear facilities will be 

constructed on time, provide CO2 reductions at zero cost, and that they will operate at a 

minimum 90% capacity factor. 

Commenters continued EPA's unsupported assumption that each of the under-construction 

nuclear facilities identified in the Proposed Rule will be constructed on time and as projected is 

clearly arbitrary and based on faulty assumptions. Commenters said construction of a new 

nuclear reactor is perhaps the most complex and highly regulated industrial activity any utility 

can undertake in the United States. Commenters said most of the essential components of each 

new reactor must be specially manufactured by precision manufacturers who must meet the 

highest standards of quality and accuracy. Commenters said each step in construction and 

operation is overseen by regulators at the Nuclear Regulatory Commission (NRC), and any 

changes to design or fabrication that may become necessary must also be submitted to and 

approved by the NRC; consequently, the complexity of building a nuclear reactor and the 

significant regulatory hurdles involved in adjusting design or fabrication assumptions can lead to 

significant delays and unexpected costs. Commenters said although Santee Cooper and its 

partners strive to construct and operate their nuclear assets on budget and on time, such complex 

projects inevitably encounter unexpected setbacks and potential cost overruns that are outside of 

Santee Cooper's control; for example, the schedule for the two Summer units has been extended 
425 

by approximately 27 months due to problems with fabrication and supply of high-tech equipment 

for the facilities. 

Commenters stated other reactors have experienced even more significant delays: the Tennessee 

Valley Authority's Watts Bar Unit 2-which EPA has designated as one of the five 'underconstruction' facilities the agency assumes will be completed by 2020-has been under 

construction since the 1970s, and was nearly 80% complete when construction was halted 

indefinitely in 1985, only to be resumed more than twenty years later in 2007. Commenters said 

although Watts Bar Unit 2's lengthy construction schedule may not be typical of every nuclear 

reactor, the fact remains that large nuclear projects-including those identified by EPA in the 

Proposed Rule-face numerous risks, long timelines, and significant potential for multi-year 

delays. 

Commenters stated in addition, unforeseen events, such as the tsunami-induced meltdown at the 

Fukushima Daiichi reactor in Japan, could lead to additional shutdowns or unanticipated 

regulatory and design changes that could significantly extend the schedule and reduce the 

amount of nuclear energy that South Carolina will be able to produce from its under-construction 

nuclear facilities. Commenters said thus, although Santee Cooper and others may now be 

committed to building the five reactors identified in the Proposed Rule, it is possible that changes 

in the cost of components, in the availability of financing, or in state or NRC regulations could 

result in one or more of these projects never being completed. 

Commenters stated furthermore, even assuming that they are ultimately built, it is reasonably 

certain that at least some of the new nuclear facilities that EPA has proposed to include in state 

CO2 goal computations will face additional hurdles during operation that will reduce their ability 

to contribute to emission reductions on the schedule and at the level that EPA assumes in setting 

state targets. Commenters said for example, new facilities typically require lengthy testing and 

fine-tuning periods before they are able to run at their designed capacity factor. In addition, 

individual facilities may not operate at the national average during extended periods because of 

the need to refuel or due to both planned and unforeseen outages; for example, a typical reactor 

must refuel at least every 18 months-an event that requires a shutdown lasting six weeks or more. 

Commenters said according to the Nuclear Energy Institute, between 2000 and 2014, there were 

at least six planned outages of nuclear facilities that lasted longer than 100 days, while the 

average duration of planned reactor outages during this period was almost three months. 

Commenters said unexpected shutdowns for maintenance or safety issues can last much longeron the order of six months or more. 

Commenters stated consequently, EPA's proposal to include generation equal to a 90% capacity 

factor for under-construction nuclear units in states' goal computations is speculative, arbitrary, 

and capricious; it is also contradicted by actual data from the industry. Commenters said 

although the Energy Information Administration's (EIA) reported average capacity factor for the 

nuclear fleet as a whole during 2013 was in the range of 90%, the average lifetime capacity 

factor of the nuclear plants that are currently operating is only 80.3%. Commenters said 

furthermore, the 2013 fleet average capacity factor figure provided by EIA includes 21 plants 

with capacity factors above 100% due to the technique EIA used to calculate the average; the 

inclusion of these outliers clearly skews EIA's results upward. Commenters added, over the past 

three years, fully one quarter of U.S. nuclear facilities operated at an average capacity factor of 
426 

just 70.8%. Commenters said consequently, it would be arbitrary and unreasonable for EPA to 

assume that each of the under-construction reactors will run at an average capacity of 90%-

particularly over the shorter, three-year window that EPA proposes for the "final" compliance 

period. 

Commenters stated EPA itself has acknowledged that including under-construction nuclear units 

in a state's target puts the state on a tight-rope for compliance with its target; nuclear capacity is

added in much larger increments than other zero-emitting resources and therefore each unit has a 

substantial impact on the calculation of a state's target. Commenters said a single underconstruction nuclear unit operating significantly below a 90% capacity factor could make it 

impossible for a state to meet its emission rate target." 

Commenters stated EPA's Proposed Rule substantially understates the significant investments 

that Santee Cooper has made in low-carbon generation; in particular, EPA's assertion that the 

'incremental' cost of building these reactors is zero180 is erroneous for several reasons. 

Commenters said first, EPA fails to recognize the fact that Santee Cooper's decision to invest in 

nuclear power rather than other available technologies was driven in no small measure by the 

fact that nuclear power provides significant baseload generation without the CO2 emissions that 

come with traditional baseload technologies such as coal and natural gas; in fact, constructing 

and operating the Summer units instead of equivalent amounts of natural gas generation could 

result in an incremental cost of $54/metric ton of CO2 avoided-well above EPA's estimates for 

the other building blocks. 

Commenters stated current estimates are that completing construction of the Summer units will 

cost $10 billion; in addition, it is possible that that complications during construction could 

increase these costs beyond current projections or require renegotiation of commercial contracts. 

Commenters said without the Proposed Rule, stakeholders in these projects would have the 

option of delaying, modifying, or abandoning the projects if costs reach unacceptable levels; 

however, the inclusion of expected generation from under-construction reactors in state goals 

could force these stakeholders to continue expending their resources even if delays or cost 

overruns would otherwise make construction of the units uneconomical. Commenters said 

therefore, if the Proposed Rule is finalized as is, it could be directly responsible for many of the 

costs that will be incurred in completing these units; EPA should at the very least reflect these 

real, incremental costs in its evaluation of this aspect of BSER. 

Commenters stated moreover, preliminary modeling for South Carolina, using a 2% growth 

scenario, indicates that EPA's proposal to include under-construction nuclear facilities in the 

calculation of South Carolina's goals could result in approximately an $8.7 billion increase in 

South Carolina's expected compliance cost, compared to the cost of compliance if EPA were to 

exclude under-construction nuclear from the goal. Commenters said complying with the rule as 

proposed could cost South Carolina approximately $17.5 billion-a figure that is almost double 

the cost of compliance without under-construction nuclear. Commenters said the impacts of 

these additional costs on South Carolina consumers will be significant; even assuming modest 

(1%) load growth, the model estimates that inclusion of under-construction nuclear in the 

baseline could raise costs for residential customers by $99 per customer per year. Commenters 

said costs for commercial and industrial customers could be even higher: the average commercial 

customer in South Carolina could face a $461 increase in its annual electricity bill as a result of 
427 

including under-construction nuclear in the goal, while the average industrial customer could 

face an incremental increase of $47,815 per year as a result of EPA's approach to underconstruction nuclear. 

Commenters stated EPA's assumption that states can obtain CO2 emission reductions from the 

five under-construction reactors identified in the rule at no cost is unreasonable and contrary to 

the factual record. Commenters said EPA's failure to consider the cost of this supposed "system 

of emission reduction" despite the agency's statutory and regulatory obligation to consider costs 

is yet another reason why inclusion of under-construction nuclear generation in state goal-setting 

exceeds EPA's authority. 

Commenters stated for all of these reasons, it would be arbitrary, capricious, speculative, and 

unreasonable to include generation from unbuilt, under-construction nuclear facilities in states' 

emission goal calculation-particularly given EPA's assumption that these units will be in 

operation by 2020 and that they will operate at a 90% capacity factor in each of the compliance 

periods. 

Commenters stated EPA's treatment of under-construction nuclear generation is also arbitrarily 

different from its treatment of other sources of nuclear energy. 

Commenters continued under EPA's proposal, 5.8% of a state's existing nuclear capacity would 

be included in the state goal calculation. Commenters said uprates at existing facilities-even 

those that were planned, approved or under construction before issuance of the Proposed Rulewould not be included in the goal calculation at all, although the MWh from these uprates would 

be eligible for use as a compliance option. Commenters said new nuclear generation (i.e., 

generation that had not commenced construction as of June 18, 2014) is not included in the state 

goal calculation either, but can be used for compliance. 

Commenters stated it is unreasonable and arbitrary to treat emission reductions from the five 

"under-construction" nuclear facilities differently from these other sources of nuclear energy; 

according to the NRC, sixteen separate uprate projects have been approved between May 2012 

and August 2014. Commenters said of these, eight were designated as "extended" uprates, which 

signifies that substantial construction and equipment upgrades would be involved. Commenters 

said like the "under-construction" reactors identified by EPA, none of these uprates was fully 

operational during EPA's proposed 2012 baseline year, and some are likely still under 

construction; yet unlike for under-construction nuclear, the expected MWh from these underconstruction uprates-some of which will add substantial capacity to existing facilities-was not 

included in states' baselines. 

Commenters stated furthermore, the NRC is currently reviewing applications to construct twelve 

new nuclear reactors-most of which are currently projected to come on line during the Proposed 

Rule's interim compliance period. Commenters said generation and potential emission reductions 

from these units also was not included in states' baselines, despite the fact that a number of these 

projects are in advanced stages and could begin construction in the next few years. 

Commenters stated neither the under-construction nuclear reactors identified in the Proposed 

Rule nor the under construction uprates and proposed new nuclear reactors was generating power 
428 

during EPA's chosen baseline year, yet each of these sources of nuclear generation categories 

have, in EPA's words "long been known to grid operators for planning purposes." Commenters 

said consequently, EPA should not treat the five designated under-construction reactors 

differently from these other planned sources of zero-carbon electricity. Commenters said as it has 

done for nuclear uprates and proposed new nuclear facilities, EPA should exclude any projection 

of future capacity from the five under-construction reactors from BSER and from the state goal 

computation; furthermore, if these five "under-construction" units are ultimately constructed, 

they should be treated just like any other new, nuclear resource for purposes of compliance. 

Commenters said that is, generation from these facilities should count toward compliance in the 

same way that generation from new uprates or reactors would be counted; to do otherwise would 

be both arbitrary and capricious. 

Commenters stated the inclusion of under-construction at at-risk nuclear generation in state goals 

is not necessary to encourage states to complete construction or preserve at-risk reactors. 

Commenters stated because EPA's emission goals will increase the cost of fossil-fueled 

electricity relative to zero-carbon electricity, South Carolina and other states will have strong 

incentives to complete construction of the five under-construction nuclear units identified in the 

Proposed Rule and to build more if the costs are justified; thus, states and utilities will already 

have a strong incentive to complete construction of the five under-construction nuclear reactors. 

Commenters said moreover, excluding the five under construction units from state goals would 

have a negligible impact on the Proposed Rule's contribution to emission reductions. 

Commenters said these units account for only 1.4% of the total 2030 generation that is accounted 

for in the Proposed Rule; were EPA to treat the five under-construction reactors as new units 

(excluding them from the goal calculation, but allowing states to count MWh produced by these 

units toward compliance if they are built), the national emission rate target would be only 1.2% 

higher in 2030 than under the rule as proposed. 

Commenters stated the inclusion of at risk nuclear generation in states' emission goals is also 

unnecessary to encourage states to preserve their existing capacity; as with under-construction 

nuclear, the imposition of CO2 emission limits on the power sector will naturally incentivize 

states and affected entities to favor lower-carbon power sources, including existing nuclear 

facilities. Commenters added, states that fail to preserve their nuclear capacity will be 

incentivized to replace that lost capacity with other low-carbon generation or energy efficiency 

because replacement of lost zero-carbon generation with fossil-fueled generation would make it 

more difficult for the state to meet its emission target. 

Commenters stated moreover, if EPA persists in including either under construction or at risk 

nuclear generation in states' goals, it is possible that states and ratepayers would effectively pay 

twice for the loss of one of these nuclear facilities. Commenters said this is because the state 

would be unable to count the expected MWh from the under construction or at risk nuclear 

facility toward compliance, and would also be required to replace the lost nuclear generation 

with fossil generation or costlier low-carbon alternatives. 

Commenters stated a major, proactive step taken by South Carolina has been the investment in 

new zero carbon emitting nuclear power; significant incentives for nuclear power were included 

in the Energy Policy Act of 2005. Commenters said together with volatile fossil fuel prices and 
429 

the possibility of greenhouse gas regulation, these federal incentives helped drive a renewed 

interest in nuclear energy, as was the case in South Carolina. Commenters said South Carolina 

Electric and Gas Company (SCE&G) and Santee Cooper signed a contract to build two new 

nuclear units at the V.C. Summer Nuclear Station on May 23, 2008. Commenters said in 

testimony provided before the South Carolina Public Service Commission (PSC) on March 2009, 

SCE&G's President stated that adding these two units might allow his company to reduce its 

reliance on an aging fleet of coal-fired plants; included in the testimony were statements 

suggesting these new units could not only allow for the retirement of some of the less efficient 

plants but also insulate customers from future CO2 regulation and other environmental 

compliance costs associated with fossil fuels. 

Commenters stated the EPA's Clean Power Plan proposal invited comment on whether new 

nuclear capacity should be reflected in setting the state goals; the EPA further noted that 

reflecting the completion of the new under construction units would have a significant impact on 

the calculated goals for the three states in which these units were located: Tennessee, Georgia 

and South Carolina. Commenters said the EPA states in the preamble, "The EPA believes that 

since the decisions to construct these units were made prior to this proposal, it is reasonable to 

view the incremental cost associated with the CO2 emission reductions available from 

completion of these units as zero." Commenters said it is important for the EPA to understand 

that, to date, less than one half of the costs of the new nuclear units in South Carolina has been 

incurred, so a significant cost remains to support the completion of these units; further, only the 

financing costs are currently being paid and the principal will be paid off over the estimated 60 

year lifetime of the new nuclear units. Commenters said there is clearly an incremental cost for 

these new units that will be added to customer bills to pay for the zero carbon emitting units once 

they come online. 

Commenters stated the EPA's proposal specifically adds the under construction nuclear 

generation into the denominator of the goal equation which has the effect of increasing the 

stringency of the emission rate goals for states with under construction nuclear units; although 

states can use the under construction nuclear units in their compliance demonstration, inclusion 

of it in setting the state goal removes appropriate credit, or in reality, becomes a wash. 

Commenters said in addition, these states with under construction nuclear units continue to have 

an equivalent amount of renewable energy and energy efficiency capacity included in their goal 

calculation; as a result of this, and as the EPA correctly noted in the proposal, the goals for 

Tennessee, Georgia and South Carolina are significantly more stringent. Commenters 

recommended a more appropriate application of under construction nuclear generation in the 

final rule that will treat this generation in a manner consistent with other states planned or under 

construction renewable fuel generation; specifically, the EPA does not add existing or underconstruction renewable energy into a state's final goal calculation and allows it to fully count 

towards compliance. 

Commenters stated if the EPA revises its approach for under-construction nuclear generation in 

the final rule as requested above, it is important for the EPA to recognize that South Carolina 

will still have to find additional CO2 emission reductions to achieve its revised goal. 

Commenters said additionally, South Carolina's revised goal would be 991 lbs CO2/MWh which 

would bring South Carolina's goal closer to the proposed emission rate required for new sources 
430 

under Section 111(b); this would be more consistent with previous application of Section 111 

which allowed less stringent standards for existing sources. 

Commenters stated the President's remarks announcing the Climate Action Plan identified the 

importance of nuclear power in securing the country's energy future; recognition was given to 

Georgia and South Carolina for leading the way in a renaissance of nuclear power. Commenters 

said the Climate Action Plan also identified the commitment to develop safe and secure use of 

nuclear power, including the management of nuclear wastes that are a byproduct of nuclear 

energy. Commenters said it is critical that these waste issues be adequately addressed including 

consideration of impacts to environmental justice communities. Commenters said as noted in a 

September 9, 2014 letter, to President Obama from 15 State Governors, including Governor 

Haley, support for both current, under-construction and future planned nuclear plants must have 

a viable, long-term solution for nuclear waste disposal; otherwise, this zero carbon emitting 

resource cannot be considered a viable tool for reducing GHGs. 

Commenters stated, "The EPA has appropriately recognized that available nuclear units will be 

dispatched before fossil fueled generation. This is due to their low variable operating costs. In 

South Carolina, the two UCN units represent 2200 MW of zero carbon electric generation that 

will displace or eliminate the need to construct a similar amount of electrical output from fossil 

fuel generation. Because the capacity factor of nuclear is among the highest of all sources of 

generation, this new capacity will have the effect of offsetting a significant amount of base load 

generation that would otherwise be provided by fossil fuels." 

Commenters stated the EPA's treatment of UCN generation in the proposed rule is a disincentive 

for the development of additional new nuclear generating capacity; in addition, it is inconsistent 

with the Administration's recognition of nuclear generation as a source of carbon free electric 

generation and the President's recognition of the leadership that South Carolina and Georgia have 

taken. Commenters said if the EPA's final rule does not provide meaningful credit for the actions 

taken by South Carolina and Georgia to develop additional nuclear generating capacity for the 

purpose of reducing GHG emissions, it potentially puts in jeopardy the future of all additional 

new nuclear units. Commenters said there are currently 23 new nuclear units that are under 

review by the US Nuclear Regulatory Commission that could add more than 23,000 MW of 

carbon free generation. 

Commenters stated another major disincentive for the growth of nuclear energy applies to both 

existing and UCN energy; the EPA must consider in its Environmental Justice analysis the 

appropriate disposal of nuclear waste and potential impacts on communities. Commenters 

suggested that the EPA work with the Nuclear Regulatory Commission to seek a congressional 

solution to resolve the nuclear waste disposal issues confronting the country. Commenters said as 

noted in a September 9, 2014 letter to President Obama from 15 State Governors, including 

Governor Haley, support for both current, under-construction and future planned nuclear plants 

must have a viable, long-term solution for nuclear waste disposal; otherwise, this zero carbon 

emitting resource cannot be considered a serious tool in EPA's national toolbox for reducing 

GHGs. 

Commenters stated the bulk of their concern with the proposed Clean Power Plan for existing 

units is the treatment of new nuclear units which are currently under construction; as currently 
431 

proposed, the Clean Power Plan treats these units as though they are already generating 

electricity during the 2012 baseline year even though they are only halfway complete and won't 

start generating electricity until the 2018-2020 timeframe. Commenters said this has the net 

effect of creating a more stringent goal for South Carolina that gives no compliance credit for the 

benefit these units will have on reducing the State's carbon intensity. Commenters said what's 

more, the proposed state goal creates an unmanageable situation should the startup of the new 

units be delayed or their subsequent maintenance require extended outages in the ensuing years. 

Commenters agreed with the ideology behind the clean air proposal and understand the 

importance of decreasing CO2 emissions, but the way the rule is currently written requires that 

South Carolinians be responsible for a disproportionate share of the efforts to reduce carbon 

emissions nationwide. Commenters said the proposed state goal calls for a 51% reduction in 

carbon intensity or stated differently, a drop of 815 pounds of CO2 per megawatt hour; this is the 

largest reduction in the nation because of the disparate treatment of new nuclear and the resultant 

effect on the state goal. 

Commenters stated statistically, South Carolina has already reduced CO2 emissions 31% from 

2005 to 2012; now the proposed state goal is demanding another 51%. Commenters said in order 

to achieve that, customers will have to pay significantly more beyond the forecasted rate 

increases that will finance the two new nuclear units. Commenters asserted that the 31% 

reduction that South Carolina has already achieved demonstrates support of the President's goal 

of reducing CO2 emissions and are willing to do more. Commenters said the requirement for 

South Carolina to contribute an additional 51% reduction is unduly burdensome, inconsistent 

with other states' goals and can only be detrimental to the well-being of South Carolinians; it is 

also a disincentive to states that have been proactively going about reducing their carbon 

emissions. 

Commenters stated the Clean Power Plan for Existing Units is massive and it is complex; in 

order to correct the situation, the two new nuclear units should be removed from the calculation 

of the state goal but be given full credit towards compliance once they are operational. 

Commenters said with this change alone, the state goal for South Carolina still requires a 38% 

reduction in addition to the 31% already achieved since 2005; clearly, this is well beyond the 

30% national goal. 

Commenters anticipated the likelihood of new CO2 regulations when choosing between new 

base load generation options in 2008 and presented testimony on the benefits of building new 

nuclear generation before the South Carolina Public Service Commission: 

May 2008. " ... With the new nuclear load online, we would be able to reduce the amount of time 

we would be having to run our older coal-fired units, which would also reduce the emissions 

from those units by about 21 percent and take us back to around 1996 or 1997 levels of 

emissions, which we think is an important opportunity for us to have as we look at carbon 

legislation that may come in the future - giving us flexibility to respond to potential future 

environmental restrictions of requirements." 
432 

Commenters stated full credit for all new non-carbon emitting generation including new nuclear 

is extremely important as they fully implement the carbon reduction strategy that was explained 

in their April 1, 2013 letter. 

Commenters stated as a result, in 2018 when both new nuclear units are expected to be 

commercially available, all six of the older coal-fired units would be fully retired, the percentage 

of non-emitting electricity produced by SCE&G would be approximately 60 percent, and their 

carbon emissions should be below their previous 1995 carbon emissions. Commenters said 

therefore, full implementation of the plan in 2018 would not only be a significant achievement 

for SCE&G and customers but it also would support the current administration's objective of 

promoting energy growth and addressing climate change. 

Commenters recommended that the EPA remove under-construction nuclear generation from the 

calculation of a state's emissions rate goal but provide emissions credit of all nuclear capacity 

that becomes operational after the issuance of the Proposed Rule. 

Commenters stated the EPA's methodology set forth in the Proposed Rule requires South 

Carolina to reduce its emission rate from the EPA's 2012 estimated rate of 1,587 pounds ("lbs") 

of carbon dioxide ("CO2") per megawatt-hour ("MWh") ("lbs CO2/MWh") to an interim goal of 

840 lbs CO2/MWh and then to a final goal of 772 lbs CO2/MWh by 2030. Commenters said this 

methodology equates to a 51% reduction, which is the third largest percentage reduction from 

2012 among all states; yet, the methodology embedded in the Proposed Rule fails to credit South 

Carolina for the under-construction zero-carbon emitting nuclear generation being made in this 

state. 

Commenters stated South Carolina is one of only three states where new nuclear power is 

presently being constructed; two new nuclear energy generating units totaling approximately 

2,200 megawatts ("MW") are under construction in this state, and South Carolina power 

producers and their consumers are investing billions of dollars in these carbon-free electric 

generating units. Commenters said the Units are among the first new nuclear generating units to 

be built in the United States in more than thirty years. Commenters said construction is moving 

forward, but the Units are not complete and certainly are not yet operational. Commenters said 

current information projects substantial completion of the first unit in late 2018 or the first half of 

2019 followed by the projected substantial completion of the second unit approximately twelve 

months after the first unit. 

Commenters stated the EPA invited comment on whether under-construction nuclear capacity 

should be reflected in the state goals. Commenters said the EPA noted that reflecting the 

completion of the new nuclear units under construction in the goals has a significant impact on 

the calculated goals for the states in which these units are located. Commenters said clearly, this 

is true for South Carolina; including approximately 2,200 MW of generation from underconstruction nuclear units as though operational results in a much lower mandatory goal for 

South Carolina. Commenters said the two Units will not begin operation until long after the EPA 

is scheduled to issue its Final Rule, yet including this carbon-free generation in Building Block 3 

lowers South Carolina's goal to 772 lbs CO2/MWh. 
433 

Commenters stated the PSC approved the application to build the Units after a full evidentiary 

hearing that included a review of the costs of alternatives such as natural gas combined cycle 

units and new coal-fired units with the potential for GHG regulations affecting their economic 

viability. Commenters said in part, the PSC was persuaded that nuclear generation, from an 

environmental standpoint, was the best alternative for meeting the energy needs of the regulated 

utility and its customers with the least impacts on the environment when comparing air and 

particulate emissions with coal or natural gas generation. Commenters said while the PSC's 

decision to authorize the construction of the Units was made prior to the June 18, 2014, release 

date of the Proposed Rule, it is not reasonable to view the incremental cost associated with the 

CO2 emission reductions available from completion of the Units as zero cost. 

Commenters stated in a state of almost four million citizens with a per capita income 15% below 

the national average, South Carolinians are and will pay heavily for the Units, and construction 

has already experienced delays. Commenters said the investment of $10 to $11 billion in the 

Units is significant; South Carolina should not be penalized for being pro-active in choosing a 

form of base load generation that is non-carbon emitting. Commenters said in approving the 

Units, the PSC found that "[n]uclear generation also insulates customers from future CO2 and 

other environmental compliance costs associated with fossil-fuels, which are likely to be 

significant." Commenters said upon the Units being completed and beginning operations, South 

Carolina should receive credit for the new generation as an eligible action toward meeting the 

mandatory goal. 

Commenters stated even though the Units are presently being constructed and several years away 

from completion, the Proposed Rule treats the Units as if they were already built and operating in 

2012. Commenters said South Carolina is allowed no credit for these substantial investments and 

this state's pursuit of clean carbon-free energy; rather than recognizing South Carolina's 

commitment to cleaner electric generation, the treatment under the Proposed Rule effectively 

penalizes South Carolina for its self-imposed clean energy initiatives and discourages future 

commitments. Commenters said the disparity of the Proposed Rule's treatment of the underconstruction nuclear units is readily apparent when compared to treatment provided underconstruction solar or under-construction wind projects. Commenters said under-construction 

solar or wind projects are not included in determining the state's emission goal, yet underconstruction nuclear projects are included in the state's goal. Commenters said the Proposed Rule 

should treat these carbon-free under-construction generation sources similarly. Commenters said 

as it currently stands, the Proposed Rule treats zero-emitting under-construction nuclear 

generation resources differently than other under-construction zero emitting generating resources 

thereby favoring one form of non-CO2 generation over another. Commenters said such disparate 

treatment is discriminatory, is arbitrary and capricious, and should be changed in the Final Rule. 

Commenters stated the current treatment of under-construction nuclear places undue risk on 

South Carolina and the two other states with current new nuclear construction; if the Units are 

not completed but abandoned, South Carolina ratepayers face the costs of achieving a lower, 

more stringent compliance goal in addition to the actual costs of abandonment. 

Commenters requested that the EPA reconsider its position on the inclusion of underconstruction nuclear generation and exclude such future generation from Building Block 3 when 

determining state emission rate goals. Commenters said under-construction nuclear generation 
434 

should not adversely affect a state's emission rate goal but rather should be fully credited as an 

eligible action toward meeting the state's goal once the new nuclear generation becomes 

operational. 

Commenters stated the CPP recognizes nuclear generation as a method for reducing greenhouse 

gas emissions, characterizing it as carbon-free generation with high construction costs and 

relatively low variable operating cost. Commenters said thus, EPA reasons that states can reduce 

their greenhouse gas emissions by increasing nuclear generation to displace fossil fuel-fired 

generation. 

Commenters stated a brief summary of how EPA treats nuclear is below; commenters notes that 

its treatment differs in some respects from that of other resources, both traditional fossil-fuel 

sources and from renewable generation. Commenters said as a general matter, the commenters 

asserted that such disparate treatment is allowable, and even may be compelled by the material 

differences in the nature of the resources; for instance, unlike nuclear, under-construction fossilfuel fired sources fall under 111(d) in their own right, since they directly contribute to GHG 

emissions, and can follow load. 

Commenters stated even between zero-emitting resources like nuclear and renewables, differing 

treatment can be traced to inherent differences that bear consideration under a scheme like the 

CPP with its system-wide approach; for instance, nuclear units differ from renewables due to the 

tremendous scale on which nuclear resources are deployed, their massive up-front costs (often in 

the billions of dollars), federal permitting oversight, and their extensive lead times (usually 

taking years, or even decades, to complete). Commenters said assessing RE's potentia1 to reduce 

CO2 emissions in a given state depends much more on that state's particular technologic, 

geologic, geographic, and economic condition than it depends on the resource's construction 

status. Commenters said in contrast, the degree to which a state can fairly be expected to utilize 

nuclear generation to reduce its emissions depends far more on a project's construction status. 

Commenters said the Clean Air Act itself envisions taking into account factors other than strictly 

CO2 impacts when establishing BSER. Commenters said for nuclear, these factors would include 

environmental and human health risks associated with potential accidents and radioactive waste 

storage. 

New Generation 

Commenters stated as EPA correctly notes, while nuclear generation has GHG-reduction 

benefits, building new nuclear generation costs far more than other types of generation both in 

terms of dollars and time. Commenters said EPA therefore concludes that requiring states to 

construct new nuclear generating units would not constitute BSER; however, EPA does propose 

to give existing nuclear and nuclear projects already under construction a role in setting BSER. 

Existing Generation 

Commenters stated for existing nuclear generation, EPA finds that states could reasonably and 

cost-effectively take steps to prevent cuts in their existing nuclear fleets; such steps would 

contribute to the CPP's goals because lost nuclear generation requires replacement generation 

from some source, likely a fossil-fired plant. Commenters said as EPA notes, between 2012 and 
435 

June 2014, utilities either closed or announced closure plans for six nuclear EGUs at five plants 

across the country. Commenters said EPA notes that the EIA forecasts an additional 5.6 GW of 

capacity cuts in the U.S. nuclear fleet; that forecast is used as a proxy to determine that six 

percent of the U.S. nuclear fleet is at risk of retirement due to (1) increased fixed operation and 

maintenance costs, (2) relatively low wholesale electricity prices, and (3) additional capital 

investment associated with ensuring plant security and emergency preparedness. 

Commenters stated EPA posits that, under a CPP-compliance approach, utilities and states can 

prevent that six percent loss without incurring unreasonable costs, and that preserving the six 

percent "at risk" nuclear generation could avoid 200 to 300 million metric tons of CO2 emissions 

over a ten-year phase in period, at a cost of $12 to $17 per metric ton. Commenters said EPA 

accordingly concludes that each state could take steps to "retain" the existing "at risk" nuclear 

generation and incorporates this retention into its BSER target-setting calculus; notably, this six 

percent retention calculus reduces a state's target emissions rate even if a particular state has no 

existing nuclear generation at risk. 

Commenters stated on the whole, while factoring "at risk" nuclear generation into a state's target 

serves to reduce that state's target, most states need not take any actual steps (or expend any 

additional dollars) to incorporate this "at risk" generation when calculating their emissions rates 

in a proposed compliance plan; essentially, the "at risk" nuclear provision becomes a "one in, one 

out" book exercise with no real-world burdens placed on the states. 

Under-Construction Generation 

Commenters stated while EPA concludes that the CPP should not include entirely new nuclear 

construction as BSER, EPA does note that three states (South Carolina, Georgia, and Tennessee) 

currently have nuclear projects under construction; while docket proceedings continue, the 

proposed projects in both South Carolina and Georgia have received their Certificates of Public 

Convenience and Necessity. Commenters said the new unit in Tennessee is nearly complete; as a 

result, EPA concludes that those states could expect these new under-construction nuclear units 

to reduce GHG emissions at no additional compliance cost. Commenters said in other words, 

these units' multi-billion dollar price tag would be ignored when considering relative CPP 

compliance costs, on the theory that the states were going to build the units regardless of whether 

the CPP goes into effect. 

Commenters stated adding these under-construction units' generation into the target-setting 

formula substantially changes the result; for example, the CPP currently sets South Carolina's 

target emissions rate at 772 lbs/MWh, down from a starting point of 1,791 lbs/MWh. 

Commenters said if EPA did not include under-construction nuclear generation in South 

Carolina's target but left all other Building Blocks the same, the CPP would set South Carolina's 

target at 990 lbs/MWh. Commenters said the Clean Power Plan currently sets Georgia's target 

emissions rate at 834 lbs/MWh, down from a starting point of 1,598 lbs/MWh. If EPA did not 

include under-construction nuclear generation in Georgia's target but left all other Building 

Blocks the same, the Clean Power Plan would set Georgia's target at 972 lbs/MWh. Commenters 

said the CPP currently sets Tennessee's target emissions rate at 1,163 lbs/MWh, down from a 

starting point of 2,015 lbs/MWh. If EPA did not include under-construction nuclear generation in 
436 

Tennessee's target but left all other Building Blocks the same, the CPP would set Tennessee's 

target at 1,352 lbs/MWh. 

Commenters stated as with "at risk" nuclear, EPA's proposal factors the under-construction 

generation into the denominator when setting South Carolina, Georgia, and Tennessee's target 

emissions rate. Commenters said the CPP then proposes to allow those states to count 100 

percent of the generation from these units when calculating the state emissions rates in a 

compliance plan; again, on paper, under construction nuclear amounts to little more than a "one 

in, one out" book exercise since that generation reduces the states' emissions rates in target 

setting but then also reduces the rate in calculating a compliance plan. 

Alternatives to the CPP's Treatment of Under-Construction Nuclear- Possible Alternative 

Treatments If EPA Determines That Under-Construction Nuclear is BSER 

Commenters stated EPA's proposed target-setting calculus assumes South Carolina will complete 

Summer Units 2 and 3, while the CPP further assumes that South Carolina can, and will, include 

the same amount of megawatt hours of generation from these units in demonstrating compliance 

with the proposed 772 lbs/MWh target. Commenters said it is possible, however, that cost 

overruns and delays could so adversely impact the economics that South Carolina would prefer 

to abandon the project. Commenters said if South Carolina abandoned the project, the proposed 

target would require the state to make up the additional rate reduction in some other fashion, a 

challenging proposition given the size of the two units. Commenters said the proposed nuclear 

units will each generate 1,117 megawatts of electricity, which will in tum amount to an estimated 

17.4 million megawatt hours per year. Commenters said if South Carolina cannot complete an 

entire nuclear unit, it cannot produce any electricity from that unit. 

Commenters stated EPA's proposed target-setting calculus assumes Georgia will complete 

Vogtle Units 3 and 4, while further assuming that Georgia can, and will, include the same 

amount of megawatt hours of generation from these units in demonstrating compliance with the 

proposed 834 lbs/MWh target; it is possible, however, that cost overruns and delays could so 

adversely impact the economics that Georgia would prefer to abandon the project. Commenters 

said if Georgia abandoned the project, the proposed target would require the state to make up the 

additional rate reduction in some other fashion, a challenging proposition given the size of the 

two units. Commenters said the proposed nuclear units will generate 2,200 megawatts of 

electricity, which will in turn amount to an estimated 17.4 million megawatt hours per year; if 

Georgia cannot complete these units, it cannot produce any electricity from them. 

Commenters stated EPA's proposed target-setting calculus assumes Tennessee will complete 

Watts Bar Unit 2, while the CPP further assumes that Tennessee can, and will, include the same 

amount of megawatt hours of generation from these units in demonstrating compliance with the 

proposed 1,163 lbs/MWh target; conceivably, that cost overruns and delays could so adversely 

impact the economics that TVA would decide to abandon or further prolong completion of the 

unit. Commenters said if Tennessee abandoned the project, the proposed target would require the 

state to make up the additional rate reduction in some other fashion, a challenging proposition 

given that the unit would supply approximately 1,100 MW of capacity. Commenters said if 

Tennessee cannot complete the entire nuclear unit, it cannot produce any electricity from that 

unit. 
437 

Commenters stated unlike other zero-emitting resources, like renewable energy and energy 

efficiency, which are typically deployed in much smaller portions, where the utility can simply 

build fewer installations, new nuclear is a bulky, "all or nothing" resource. Commenters said if 

the state abandons the project, it will enjoy none of those zero-carbon megawatt hours; in 

essence, EPA's approach presents a considerable deterrent to states not completing these units 

and effectively encourages their completion by assuming they provide compliance "for free" 

compared to other compliance measures. 

Commenters stated no new nuclear units have come online in the United States in nearly twenty 

years, largely due to cost overruns, controversy, and delays; these issues continue to threaten the 

current under-construction nuclear projects, and, to varying extents, a certain possibility exists 

that South Carolina, Georgia, or Tennessee may still cancel its project. Commenters said such a 

decision would drastically change that state's expected energy mix and its ability to meet EPA's 

target emissions rate; as such, they ask EPA to clarify whether and how it could revise a state's 

target to reflect that new reality, should it occur. Commenters additionally requests EPA to 

consider whether, due to the fact that new nuclear units are massive, incredibly expensive, "all or 

nothing" undertakings with significant and continued risks, EPA could make the state target 

effectively contingent on the state maintaining its current course of action of allowing 

completion of the units despite the delays and escalating costs. Commenters said in South 

Carolina's case, that would mean that if the state abandons VC Summer Units 2 and 3, the 

emissions target would revert to 990 lbs/MWh instead of 772 lbs/MWh. Commenters said in 

Georgia's case, that would mean that if the state abandons Vogtle Units 3 and 4, the emissions 

target would revert to 972 lbs/MWh instead of 834 lbs/MWh. Commenters said in Tennessee's 

case, that would mean that if the state abandons Watts Bar Unit 2, the emissions target would 

revert to 1,352 lbs/MWh instead of 1,163 lbs/MWh. 

Commenters stated additionally, if EPA continues to treat under-construction nuclear generation 

as part of BSER, it might adjust the way it does so. Commenters asked EPA to consider whether 

to treat the resource like under-construction natural gas, focusing on the extent to which the 

under-construction nuclear units will displace existing fossil-fuel fired sources. Commenters said 

for under-construction natural gas, EPA assumes that those units will operate at 55 percent 

capacity factor under a "business as usual" approach to meet demand growth. Commenters said 

EPA then assumes that utility operators could actually increase dispatch of those new natural gas 

units from 55 percent capacity factor to 70 percent capacity factor by applying Block 2. 

Commenters said according to EPA, then, states could use the increased 15 percent capacity 

factor to displace existing fossil-fueled generation. Commenters said this assumption lowers the 

state's emissions rate target; constructing the new natural gas units and operating them above 

55% capacity factor would be a means of compliance.

Commenters stated EPA should consider whether it could make a similar calculation for underconstruction nuclear units. However, the commenters do not believe that the exact approach EPA 

took for under-construction natural gas applies to under-construction nuclear. Commenters said 

both types of generation likely will meet some demand growth and offset some portion of 

existing fossil-fueled generation; but the CPP appropriately views under-construction nuclear 

differently than it views under-construction natural gas because operators can scale natural gas 

dispatch depending upon load, whereas nuclear operators lack that flexibility. Commenters said 

therefore, while EPA would review data from South Carolina, Georgia, and Tennessee to 
438 

estimate what percentage of the under-construction nuclear generation could reasonably be said 

to be available to displace existing fossil-fuel generation and what percentage to meet demand 

growth, it would have to find a different, reasonable basis for the displacement-to-demandgrowth ratio. 

Commenters stated in this process, when calculating those states' emissions targets, EPA would 

factor in that percentage of under-construction nuclear expected to actually displace existing 

fossil-fueled generation; total generation in megawatt hours would remain constant, but the 

replacement of fossil-fueled generation with zero-carbon generation would reduce the total 

pounds of CO2 emitted; in other words, assuming the same amount of energy is produced, more 

of it would come from zero-carbon sources, such that the state's total target emissions rate would 

go down. Commenters said this process would lower the state's target emissions rate by the 

amount that EPA estimated under-construction nuclear would actually displace existing fossil. 

Commenters said EPA would then allow states that complete their under-construction nuclear 

units to add the same amount of that nuclear generation to the denominator when demonstrating 

compliance; that is, since EPA will use that displacement estimate in setting the target, those 

states could use the same displacement percentage when demonstrating compliance. 

Possible Alternative Treatment If EPA Determines Under-Construction Nuclear Is Not BSER 

Commenters stated some parties in South Carolina, Georgia, and Tennessee have objected to 

EPA's inclusion of under-construction nuclear generation in setting their target emissions levels, 

but seek to count 100 percent of their under-construction nuclear generation in demonstrating 

compliance. Commenters said EPA should understand that this approach could provide excessive 

credit for under-construction nuclear projects beyond their ability to displace existing fossil 

generation. 

Commenters stated calculating a CO2 emissions rate (lbs/MWh) requires estimating both the 

total pounds of CO2 emitted and the total megawatt hours of generation; although presented as a 

rate of CO2 emissions, EPA's proposal includes generation from certain sources that have no 

CO2 emissions. Commenters said as a result, the CPP's "target" CO2 emissions rates are not just 

the in-state average of CO2-emitting sources; the targets are actually the average of CO2-

emitting sources and a select few zero-carbon sources that qualify as BSER. Commenters said 

mathematically, anything that increases the total generation (i.e., the denominator) lowers the 

emissions rate; this is especially true when zero-carbon generation is added to the denominator, 

because such an addition adds no new pounds of CO2 to the numerator. Commenters said how 

EPA, or a state, includes zero-carbon emitting sources radically changes the calculated result. 

Commenters stated including 100 percent of under-construction nuclear generation in 

compliance denominators would give the appearance of dramatically lower emissions rates, even 

if the under-construction nuclear does not displace or reduce actual CO2 emissions from existing 

fossil-fueled units. Commenters said one possible solution to this dilemma is to recognize that 

under-construction nuclear units will reduce a state's emissions rate to the extent the under 

construction nuclear units actually displace existing fossil sources, as discussed above. 

Commenters said under this approach, EPA would remove under-construction nuclear generation 

from the target setting and also prohibit states from factoring that generation into their 

compliance formulas. Commenters said if and when those units come online, and to the extent 
439 

they actually displace existing fossil units, those states' actual CO2 emissions rates will reflect 

that displacement because their total fossil-fueled generation in MWh will decrease (by way of 

reduced or shut down fossil-fired plants), which will in tum lower the total pounds of CO2 

emitted.; thus, EPA need not factor in the under-construction nuclear units' megawatt hours of 

generation in either the target-setting or the compliance phases because the CPP already allows 

credit for under-construction nuclear to the extent that it has a real-world impact on the state's 

emission rate. 

Under-Construction Nuclear

Commenters stated EPA's proposed treatment of under-construction nuclear in Georgia and two 

other states has been a source of controversy. Commenters said in comments to EPA dated 

September 16, 2014, the Georgia EPD urged EPA to remove under-construction nuclear 

generation from the state emission goals but to allow it to be used for compliance. Commenters 

said currently, the anticipated generation from the two units under construction at Plant Vogtle 

accounts for 30 percent of Georgia's target reduction; removing those units from the targetsetting would substantially relax Georgia's carbon reduction requirements. Commenters said at 

the same time, allowing the nuclear generation to be used for compliance (i.e., added to the 

denominator of EPA's rate-setting equation, as EPD recommends) would mean that Georgia 

could achieve much of its target without lowering actual carbon problematic and offer the 

following comments to guide EPA's resolution of this issue. 

Commenters stated that generation from nuclear facilities under construction in Georgia in 2012 

is expected to be 17.4 million MWh; new nuclear capacity would decrease Georgia's emission 

rate by an increment of 225 lbs per MWh. 

Commenters stated that nuclear power plants under construction might not be completed, and 

requested that the EPA provide clarification on how states with nuclear plants under construction 

would adjust their goals if that happened. Commenters provided alternatives to treatment of 

Watts Barr unit 2 if it is considered as BSER, and gave alternatives for treatment of underconstruction reactors if they are not considered as BSER. 

Commenters stated that it is inappropriate to reflect completion of under-construction nuclear 

energy facilities as if they were currently operational. Commenters also stated EPA fails to treat 

nuclear consistently with RE technologies in the same building block- although under 

construction nuclear units were included in the goals of three states, under construction RE 

projects were not included within state goals as the 2012 starting point from which states are 

required to grow RE technology. 

Commenters provided the following resolutions regarding the Clean Power Plan: 

Resolution Concerning U.S. EPA's Proposed Greenhouse Gas Emission Guidelines for 

Existing Fossil-Fueled Power Plants 

Commenters stated another component of the proposed regulations that has serious implications 

for the Southern region is the EPA's treatment of under-construction nuclear energy facilities. 

Commenters said in calculating state benchmarks, the EPA credited under-construction nuclear 

energy facilities as if they were currently operational; this disproportionally affects states in the 
440 

southern region, as the only nuclear energy facilities currently being constructed are in the states 

of Georgia, South Carolina, and Tennessee. Commenters said it is inappropriate to reflect the 

completion of these units in state goals, as the units are not currently completed; as a result, the 

affected states will have to make more drastic emissions reductions in order to meet the proposed 

goals 

Resolution Questioning Nuclear-Specific Provisions of U.S. EPA's Proposed 111(d) Carbon 

Rule 

Commenters stated whereas there is broad consensus throughout industry, academia, the United 

States government, and international organizations that zero-carbon nuclear energy is a necessary 

component of any meaningful strategy to reduce carbon in the electric generation sector, and 

nuclear energy presently generates nearly two-thirds of all carbon-free electricity in the U.S.; and 

Commenters stated whereas, the existing 44 reactor nuclear fleet throughout the Southern States 

Energy Board region, and five new reactors now under construction to come on-line in 

Tennessee, Georgia, and South Carolina by 2019, are key assets in the South's ongoing 

comprehensive, multi technology carbon reduction strategy; and commenters stated whereas, the 

U.S. Environmental Protection Agency (U.S. EPA) has recognized that maintaining the existing 

nuclear fleet is a cost-effective carbon abatement strategy, but the agency's proposed carbon rule 

considers only six percent of the carbon-free electricity produced by a state's existing nuclear 

power plants and would not count the output of nuclear reactors now under construction in the 

U.S., all of which are being built in the South; and 

Commenters stated whereas, EPA's proposal counts all renewable electricity production 

regardless of when it was placed into service, but ignores 94 percent of existing nuclear plant 

electricity production and all hydroelectric plant production. 

Commenters called on U.S. EPA to treat all sources of non-carbon generation equally and 

recognize that nuclear energy is critical to any national carbon reduction strategy so that states 

have sufficient incentive to preserve existing nuclear capacity and build new reactors. 

Commenters stated EPA's methodology lumps together low- and zero-emitting generation as a 

strategy to reduce carbon emissions at affected EGUs, but then applies the individual 

technologies within the block (nuclear and RE) arbitrarily and inconsistently as compared to one 

another. Commenters said the inclusion of under construction nuclear units for only three states 

produces inequitable results between states and across regions of the country. Commenters said 

the proposed guideline's distinction between states with nuclear and those without nuclear is 

arbitrary and punishes three states in the Southeast for forward-thinking investments in largescale, zero-emitting technology. Commenters said states that chose to invest heavily in RE 

generation do not have the additional requirement to invest in and build a new nuclear unit, but 

the three states that chose to invest heavily in building new nuclear must not only complete those 

units with the guaranteed delivery of power at a high rate on a date certain, but also invest in and 

grow RE energy. Commenters said further EPA fails to treat nuclear consistently with RE 

technologies in the same building block- although under construction nuclear units were included 

in the goals of three states, under construction RE projects were not included within state goals 

as the 2012 starting point from which states are required to grow RE technology. Commenters 
441 

said EPA's treatment of under construction nuclear in this building block is both arbitrary and 

capricious. 

Commenters stated, regarding the under-construction nuclear unit in Tennessee, the significant 

amount of emission reduction represented by this one yet-to-be completed nuclear unit is an 

immoveable, inflexible mandatory requirement that Tennessee cannot replicate or meet through 

another other technology or strategy; therefore, the treatment of under-construction nuclear 

generation within this block essentially eliminates all flexibility for Tennessee in designing a 

state plan to meet its goal. Commenters said technology or strategy options within other building 

blocks in EPA's proposed BSER will not be able to compensate for reductions required by the 

nuclear portion of this building block in the circumstance that this unit is unable to perform as 

EPA is proposing. 

Commenters stated EPA includes nuclear generating capacity in this building block under the 

assumption that it can replace generation at fossil fuel-fired EGUs, thereby reducing CO2 

emissions. Commenters said EPA concludes that increasing nuclear capacity above the amount 

of nuclear capacity that 'would otherwise be available to operate' is a technically viable approach, 

citing low variable operating costs of nuclear and its priority in resource dispatching order before 

fossil fuel-fired EGUs. Commenters said EPA proposes two strategies for increasing the amount 

of nuclear capacity available to displace fossil fuel-fired EGUs: (1) building new nuclear 

facilities and (2) preserving nuclear at existing nuclear facilities that might otherwise be retired. 

Commenters said EPA and these comments generally refer to the first as 'under-construction' 

nuclear and the second as 'at risk' nuclear. 

Commenters stated the nuclear portion of building block 3, as encompassed within proposed 

BSER and applied to Tennessee, places a disproportionate burden on Tennessee and represents 

significant compliance risk for the state. Commenters said EPA's proposed approach forces the 

state to create a state plan requiring the finished construction and operation of a new nuclear unit 

that must come online and deliver power at a time certain and at a high utilization rate. 

Commenters said the significant amount of emission reduction represented by this one yet-to-be 

completed nuclear unit is an immoveable, inflexible mandatory requirement that Tennessee 

cannot replicate or meet through another other technology or strategy; therefore, the treatment of 

under-construction nuclear generation within this block essentially eliminates all flexibility for 

Tennessee in designing a state plan to meet its goal. Commenters said technology or strategy 

options within other building blocks in EPA's proposed BSER will not be able to compensate for 

reductions required by the nuclear portion of this building block in the circumstance that this unit 

is unable to perform as EPA is proposing; this is particularly true given the fact that Tennessee's 

existing nuclear units are and will continue to operate, but they are unlikely to displace 

generation from affected units as EPA assumes they will. Commenters said EPA has suggested 

that states have the flexibility to use options outside the proposed BSER for compliance, but has 

indicated that states can and will be able to meet their mandatory goals utilizing the technologies 

and strategies within the proposed BSER; for Tennessee, this assurance may very well not be 

true. 

Commenters stated, with regard to the under-construction unit at Watts Bar, the EPA multiplied 

a 90 percent capacity factor with the MW capacity and operating hours assumed and then applied 

the resulting MWh figure into the denominator of the state goal calculation. Commenters said 
442 

importantly for this massive amount of emission reduction, it appears EPA assumes the level of 

generation, and the associated emissions reductions, for Watts Bar 2 will come online in 2020 

and remain constant thereafter. Commenters said the value of emissions reductions from Watts 

Bar 2 dwarfs the reductions EPA assumes from 'at-risk' nuclear, representing 36 percent of 

Tennessee's total target reduction rate. Commenters said EPA's inclusion of the underconstruction nuclear units in the proposed BSER is arbitrary and capricious; these units are not 

complete and have not received all necessary approvals to operate and deliver power. 

Commenters stated TVA owns and operates two nuclear facilities in the state, Sequoyah and 

Watts Bar; the three units at those facilities produce a significant amount of zero-carbon 

electricity in the state and have a combined 3400 MW summer net dependable capacity. 

Commenters said in addition to its existing Tennessee nuclear fleet, TVA is in the process of 

constructing an additional unit at Watts Bar; completion of that unit is planned for December 

2015. 

Commenters stated in the proposed guidelines, EPA recognizes that new nuclear generating 

capacity is expensive to build as compared to other types of generation and that "little new 

nuclear capacity has been constructed in the U.S. in recent years." Commenters said regardless, 

EPA indicates that five nuclear EGUs at three plants are currently under construction. 

Commenters said according to EPA, because the decisions to construct these plants were made 

prior to the proposed guidelines, the incremental cost associated with the CO2 emissions 

reductions available from their completion is zero and the reductions achievable from affected 

EGUs based on these units are factored into the state goals for Tennessee, Georgia and South 

Carolina. Commenters said EPA admits "that reflecting the completion of these units in the goal 

has a significant impact on the calculated goals for the states in which these units are located; if 

one or more of these units were not completed as projected, that could have a significant impact 

on the state's ability to meet the goal." Commenters said despite this admission, EPA proposes to 

include TVA's under-construction nuclear unit, Watts Bar 2, in Tennessee's goal. 

Commenters stated EPA determined the total under construction nuclear capacity at Watts Bar 2 

and then incorporated it, along with the 'at-risk' capacity, state goal as zero-emitting generation. 

Commenters said with regard to the under-construction unit at Watts Bar, EPA did this by 

multiplying a 90 percent capacity factor with the MW capacity and operating hours assumed and 

then applied the resulting MWh figure into the denominator of the state goal calculation. 

Commenters said EPA did not consider nuclear as a 'dispatchable' resource as it did with NGCC 

capacity. Commenters said importantly for this massive amount of emission reduction, it appears 

EPA assumes the level of generation, and the associated emissions reductions, for Watts Bar 2 

will come online in 2020 and remain constant thereafter. Commenters said the value of 

emissions reductions from Watts Bar 2 dwarfs the reductions EPA assumes from 'at-risk' nuclear, 

representing 36 percent of Tennessee's total target reduction rate. 

Commenters stated EPA's inclusion of the under-construction nuclear units in the proposed 

BSER is arbitrary and capricious. These units are not complete and have not received all 

necessary approvals to operate and deliver power; these units are not NGCC units in any way, 

shape or form and they should not be treated as such. Commenters said first, they are not 

affected units under Section 111 of the CAA; second, the amount of investment, time, and 

owner/operator sophistication required to finance, construct, complete, receive approval and 
443 

operate a nuclear unit is vastly different than an NGCC unit. Commenters said utilities investing 

in new nuclear units are unlikely to be spending large amounts to grow Regeneration resources 

or perhaps even energy efficiency; yet, the states that these units are within are now held to 

growing these other low-carbon emitting resources based on quantified amounts derived from 

what EPA determined to be the best performing states; however, states without under 

construction nuclear units are not required to invest in this zero-emitting technology, even if 

those states may have applications before the Nuclear Regulatory Commission or other planning 

efforts already underway. Commenters dstated they do not include this information to suggest 

that EPA require every state in the U.S. to invest in new nuclear units, but this information was 

included to point out that EPA's choice to apply the under-construction nuclear unit in setting 

goals for Tennessee, Georgia and South Carolina is arbitrary and cannot stand. 

Commenters stated that EPA's inclusion of the under-construction nuclear units in the proposed 

BSER is inconsistent when compared to how EPA deals with RE generation in the same building 

block. Commenters said EPA's proposed BSER included under-construction nuclear units in 

three state goals, but it does not include under-construction renewable projects in 2012, 2013 or 

2014 for any state. Commenters recommended that EPA remove under construction nuclear from 

the proposed BSER and allow for the three states it impacts to use some or all of the value of this 

zero-emitting generation for compliance. 

Commenters continued EPA's starting point for applying the quantified amount of RE generation 

growth included within the proposed BSER to states for computation of their goals is the current 

level of performance (i.e., the 2012 net renewable generation amount). Commenters said EPA 

utilizes EIA state level data for 2012 that is derived from EIA Form 923; the commenters 

reviewed EIA form 923 data used by EPA in setting the baseline renewable generation for states 

and it appears that RE energy projects that were under construction in 2012 and completed 

thereafter are not reported on the EIA form; therefore, not included within the 2012 current level 

of performance. Commenters said for example, one project that does not appear to be included is 

the First Solar Imperial Solar Energy Center South in Imperial County, A. Commenters said EIA 

monthly generation data indicate that this solar photovoltaic project with a capacity of 130 MW 

has been producing since November 2013. Commenters said according to the project's website 

the project supplies San Diego Gas & Electric began construction in 2012 and was completed in 

2013 . Commenters said additional projects that were under construction in 2012 include the 

Arlington Valley Solar Project II in Arlington, AZ (125 MW solar photovoltaic capacity. 

Commenters said website document indicate that it was in the middle of construction in 2012, 

finishing up in March 2013, as well as the Centinela Solar Energy project (also in Imperial 

County, CA) with a capacity of 170 MW. Commenters said this project began development in 

2012. Commenters said according to EIA, it began producing in July 2013. 

Commenters concluded therefore, RE projects that were under construction during the 2012-

2014 time frame that will deliver significant amounts of low-carbon electricity over the 

compliance period will be used as compliance margin for their home states. Commenters said 

Tennessee, Georgia and South Carolina, on the other hand, have little to no compliance margin 

given the massive value associated with the under construction nuclear units included within 

their state goals. Commenters said EPA's arbitrary and inconsistent inclusion and application of 

technologies within building block 3 creates an overly burdensome result for three states and 

significantly increases the likelihood that these states will not be able to comply with their state 
444 

goals. Commenters recommended that "EPA remove under construction nuclear from the 

proposed BSER and allow for the three states it impacts to use some or all of the value of this 

zero-emitting generation for compliance."

 

Commenters stated that the EPA should give states credit for the emissions avoided by utilizing 

nuclear power plants, by excluding plants under construction from goal-setting, but counting 

their generation capacity towards compliance. 

Commenters stated it is important that the contribution of new nuclear plants, those being 

deployed now as well as those under development in the next decade, be recognized for their 

positive impact on reducing greenhouse gas emissions. Commenters said in the EPA proposed 

rule, nuclear plants under construction in Georgia, South Carolina, and Tennessee are treated as 

though they are already operating at 90 percent capacity factor. Commenters said when 

calculating the intensity target, those states are effectively penalized for supporting this new 

nuclear plant construction; EPA needs to work closely with the nuclear industry through the 

Nuclear Energy Institute (NEI) to modify the rule to assure proper credit is achieved for these 

zero-emissions future electricity producing nuclear plants. Commenters said new nuclear 

production must be strongly encouraged and fairly rewarded. Commenters said as recommended 

by NEI, this added nuclear generating capacity should be excluded from goal-setting in the EPA 

rule, but counted toward compliance. 

Commenters stated with regard to new nuclear capacity under construction, but not yet in 

operation, the EPA should not unfairly penalize Tennessee, Georgia and South Carolina by 

artificially lowering and making more severe their respective emission rate reduction targets. 

Commenters stated that the inclusion of new nuclear generation capacity prior to its operation in 

just three states is arbitrary and represents a de facto penalty imposed on these states by lowering 

the emission reduction targets for those states. 

Commenters stated that the EP treatment of Georgia's "under construction" nuclear, Vogtle units 

3&4, is inequitable and misguided. 

Commenters stated that final rule should provide South Carolina and Georgia the full benefit for 

proactive decisions to reduce GHG emissions, by removing under-construction nuclear (UCN) 

generation from the goal calculation and allowing the carbon free generation of the UCN to be 

used in state compliance calculations. 

Commenters stated that the EPA's treatment of UCN is a disincentive for the development of 

additional nuclear capacity, and is inconsistent with the Administration's recognition of nuclear 

generation as a source of carbon free electric generation and the President's recognition of the 

leadership that South Carolina and Georgia have taken. Commenters also stated that, if the EPA's 

final rule does not properly credit additional nuclear capacity, it puts in jeopardy the future of the

23 new nuclear units that are under review by the US Nuclear Regulatory Commission that could 

add more than 23,000 MW of carbon free generation. 
445 

Commenters stated that the two UCN units in South Carolina represent 2200 MW of zero carbon 

electric generation that will displace or eliminate the need to construct a similar amount of 

electrical output from fossil fuel generation. 

Commenters stated that the EPA should, at a minimum, remove under construction nuclear units 

from the rate-setting calculation, and Georgia, South Carolina, and Tennessee (and any other 

state where new nuclear units are built) should be able to receive compliance credit for all the 

megawatt-hours (MWh) produced by these units when they become operational. 

Commenters stated that Georgia is being penalized by the plan for its significant early actions. 

Commenters stated that nuclear plants under construction must be removed from the BSER and 

states must be allowed to count on avoided emissions toward their compliance plans once the 

nuclear plants are in operation. 

Commenters recommended that the EPA allow under-construction nuclear in South Carolina to 

be used for compliance with a revised target to be calculated by the State of South Carolina. 

Commenters recommended that the EPA remove nuclear generation not yet on-line from the 

state goal formula. Commenters stated that the incorporates the generation capacity from TVA's 

Watts Bar 2 Nuclear Plant, which is under construction and slated for operations in December 

2015, into the denominator for Tennessee's state goals. Commenters stated that this is arbitrary 

and capricious; there is no other similar action in the proposed rule for other sources of power 

generation currently under development. 

Commenters stated that the Clean Power Plan should recognize the amount of time and money 

necessary to develop and construct a new nuclear unit. Commenters further stated that, in 

essence, Georgia, South Carolina, and Tennessee would have been better off delaying 

construction until the target emission rates were set. Commenters did not purport to have a 

solution to this problem, but encouraged the EPA to explore options to adjust the Proposal to 

encourage new generation without effectively penalizing states that have taken early action. 

Commenters stated that the EPA's treatment of Nuclear Under Construction as completed is 

especially arbitrary when the treatment of other non-hydro renewables is examined. Commenters 

stated that all non-hydro renewable MWhs generated during the plan period are allowed as 

compliance resources, regardless of in-service dates, and that the EPA offers no explanation for 

the disparate treatment of non-carbon emitting resources. 

Commenters stated that states that have utilities which have begun but not finished wind and 

solar projects are rewarded by the EPA because those sources and the future carbon emissions 

reductions they are expected to achieve are not "assumed" and therefore can be used to 

effectively meet a state's goal. Commenters stated that if investment in nuclear is not afforded 

the same benefit as other zero-emitting generation towards meeting the State goal, then utilities 

and customers in states with nuclear plants under construction will be forced to pay twice for 

carbon reductions because they invested early in one carbon-free technology instead of another. 

Commenters stated that, under the proposed rule, the EPA includes the carbon reduction benefits 

of the five nuclear units under construction in its BSER determination as though they were in an 

operational status today. Commenters stated that this is in stark contrast to treatment of non-
446 

emitting EGUs currently under construction using other advanced technologies such as carbon 

capture and storage (CCS), which are not included in the baseline determination and can be 

applied in full to the host state's compliance plan. 

Commenters noted that the EPA requested comment on whether or not it is appropriate to reflect 

completion of [currently under construction nuclear units] in the state goals. Commenters stated 

that is not appropriate, and that any state should be allowed to elect to count new nuclear 

(including under construction units that come on-line) towards compliance in its state plan, and 

that the EPA should state affirmatively that such elections are approvable. 

Commenters recommended that nuclear generation under construction in South Carolina should 

count toward the State's compliance with EPA's Clean Power Plan. 

Commenters stated that, although the EPA treats "nuclear under construction" as already built 

and operating, substantial further spending is required, so the Proposal punishes consumers in 

South Carolina by approximately $8.7 billion. 

Commenters stated that, if treatment of nuclear under construction remains unchanged from the 

EPA proposal, South Carolina will be forced to compensate by building natural gas power plants, 

which will require new interstate natural gas infrastructure. 

Commenters stated that the EPA's inclusion of nuclear generation being constructed in Georgia 

(Plant Vogtle 3 & 4) in setting Georgia's performance standard is inequitable and misguided, and 

penalizes electric consumers of Georgia for spending over fourteen billion dollars to provide the 

state with 2,200 megawatts of power with zero CO2 emissions. 

Commenters urged the EPA to allow under-construction nuclear to be used for compliance with 

a revised emission target. 

Commenters stated that the EPA's assumption that the costs of the reactors under construction 

are "sunk costs" is factually wrong, since none of the reactors is complete and large expenditures 

remain to be incurred. Commenters also stated that it is not at all clear the reactors will be 

completed, and cited delays in the construction of the Watts Bar 2 reactor, which was started in 

1973, with a projected start date of 1978. Commenters further stated that the EPA itself 

recognizes that under-construction nuclear reactors may not be completed. 

Commenters stated that the EPA's approach to "under-construction" nuclear generation is flawed 

and should be revised. Commenters stated that the inclusion of the full expected megawatt-hours 

(MWh) of generation from these facilities in state goals creates a large compliance risk for these 

states. Commenters also recommended that the EPA reduce the assumed capacity factor for 

under-construction facilities to account for the distinct possibility that they will operate at 

capacity factors of 70 percent or lower during some compliance periods. In addition, 

Commenters stated that the EPA should allow states with under-construction nuclear facilities to 

recalculate their targets after promulgation of the final rule if these large projects are 

significantly delayed or shut down due to unforeseen circumstances that are beyond the state's 

control. Commenters concluded that, regardless of what approach EPA takes, it should 

recalibrate the interim targets for states hosting under-construction nuclear facilities to account 
447 

for the possibility that these units may not be operating at full capacity in the early years of the 

interim compliance period. 

Commenters stated that the power capacity under construction nuclear units should be available 

to states for calculation toward compliance with its carbon emissions goal (under Block 3) rather 

than arbitrarily categorized as existing capacity for purposes of goal calculation. Commenters 

stated that any nuclear unit whose construction or uprating will start prior to the 2030 

compliance deadline should be allow to apply that zero-emissions energy toward Block 3 goals. 

Commenters stated that, if the EPA finalizes the Proposal "as-is," without necessary revision, its 

action would be arbitrary and capricious rulemaking, in derogation of Federal law. Commenters 

stated that the Proposal unfairly (and inexplicably) penalizes the three states that have 

proactively acted - at great expense - to reduce future CO2 emissions by undertaking to construct 

and operate the first new nuclear generation in thirty years. 

Commenters stated that it is not appropriate to reflect completion of the five identified nuclear 

EGUs currently under construction in the state goals, and that the current approach unfairly 

modifies the State Goals of three particular states. Commenters also stated that the EPA should 

note that there are many ways there are many ways to increase nuclear generation beyond 

construction of new plants, such as "uprates" and increases in capacity factor. 

Commenters stated that the rule should be altered to give plants under construction credit for 

carbon offset in the books of the states in which they're being built. 

Commenters stated that, even without including under construction nuclear, Georgia's goal is 

still more stringent - which means that more investment will be required - than all of the other 

southeastern states that have not recently acted to add new nuclear capacity. Commenters stated 

this means that the EPA is requiring renewable energy and energy efficiency targets for Georgia 

equivalent to those for states that did not invest in new nuclear capacity. Commenters stated that 

the EPA's inclusion of under construction nuclear runs in state goals is directly contrary to the 

Obama Administration's policy on the importance of nuclear energy in addressing climate 

change. Commenters concluded by stating that under construction nuclear generation should not 

be included in calculating state goals, and that States, their citizens and their utilities should be 

allowed to take full credit for non-emitting nuclear generation in complying with any state or 

utility-specific performance standards promulgated pursuant to this rule. 

Commenters stated that the future base load operations of "under construction nuclear units" are 

inappropriately included in the calculation of state goals. Commenters also stated that the EPA's 

Proposed Rule would preclude using this Vogtle Project generation resource to help show 

compliance in Alabama, where most of the commenter's generation fleet is located, just because 

the Vogtle project happens to be located in Georgia. Commenters continued that the EPA's 

conjecture that States may somehow work out regional plans to solve these issues is speculative 

at best, and that the unjustifiable, unfair, and untenable approach utilized by the EPA in the 

Proposed Rule underscores how trying to contort existing authorities under the CAA to further 

global climate goals is indefensible and should be abandoned. Commenters concluded that if, 

however, the EPA continues with implementation of these provisions, these issues must be 
448 

resolved such that utilities with interests in generation in multiple states are afforded compliance 

advantages commensurate with their investment. 

Commenters stated that nuclear generation currently under construction should not be included 

in calculating South Carolina's goal and should be allowed to contribute towards a South 

Carolina's compliance with its assigned goal. Commenters stated that the EPA's CPP proposal 

treats nuclear generation under construction differently from other zero-emitting carbon 

resources included in Building Block 3, because these other generation sources units are 

excluded for the goal rate-setting and thus receive credit for carbon-free generation when they 

contribute power to the grid. Commenters stated that the state goal the EPA has assigned to 

South Carolina is 28 percent more stringent than it should be because of the EPA's treatment of 

V.C. Summer Units 2 and 3, and, at 772lbs CO2/MWh, this goal is well below the 1,100 lbs 

CO2/MWh New Source Performance Standard established in the EPA's 111(b) rulemaking 

governing new fossil-fired power plants. Commenters stated that it is irrational and arbitrary to 

have an emission rate standard for existing power plants that is below the emission rate specified 

for new power plants. 

Commenters opposed the inclusion of nuclear units under construction in the calculation of state 

goals. Commenters stated that by including the output of nuclear units that are assumed to be 

completed at some date in the future in the calculation of a State(s) existing carbon/MWh rate 

(the output of the units under construction is imbedded in the denominator of the fraction), the 

EPA has artificially changed the rate and made compliance with the goal exponentially more 

difficult. Commenters also noted that this has been done despite these units having never 

produced any electricity, or even having received an operating license to begin production. 

Commenters stated that no other energy source that does not currently exist is included in the 

Proposed Rule's calculation of the emission rate. 

Commenters stated that the EPA's proposal as published punishes the ratepayers who through 

long-term power contracts have been, and are, paying for the investment in Watts Bar Nuclear 

Unit 2 in their rates, and will continue to do so. Commenters stated that such environmental rules 

result in unfairness and are bad public policy. 

Commenters stated that the EPA includes plants under construction in their respective states 

baseline calculation, the requiring them to take additional measures to comply with the 

regulation beyond these carbon free investments that they are already made, and that the rule 

must count new nuclear construction projects towards the EPA emissions target. Commenters 

also stated that studies have shown that investments outside of nuclear do not significantly 

contribute to carbon decline since most wind and solar plants must be co-located with natural gas 

plants due to intermittency. 

Commenters stated that by accounting for under construction and at risk nuclear in the state's 

emission rate equation, the EPA is essentially punishing states that have already made an effort 

to reduce CO2 emissions by holding those states accountable by basing their CO2 emission rate 

goals on the future operation of these nuclear generation facilities. Regarding nuclear power and 

the CPP, commenters stated that EPA should not count electricity production from nuclear 

reactors under construction because nearly one-half of all proposed nuclear reactors in the US 

have never started operation. Commenters cited several examples of nuclear reactors that were 
449 

under construction or where construction was planned but were cancelled. Commenters stated 

that with the significant hurdles to building new nuclear reactors, the EPA should not allow 

reactor projects under construction to be credited for CO2 reductions until a project is completed 

and operational. Commenters stated that the historic and recent challenges of bringing a nuclear 

reactor online, from concept to creating energy, is reason enough as to why this technology 

should not be included as a BSER. 

Commenters stated that the EPA's approach contravenes important national energy and 

environmental policy objectives as well as state policies. Commenters cited the Energy Policy 

Act of 2005 and the Energy Independence and Security Act of 2007 as providing substantial 

support to expand the commercial utilization of nuclear energy in the United States and 

improving the nuclear regulatory process. Commenters also cited multiple state legislative 

actions in Georgia, South Carolina, and Tennessee that supported nuclear power, including the 

"Georgia Nuclear Financing Act," and South Carolina energy policy with specific support for 

nuclear power. Commenters stated that in the NPRM, the EPA is imposing a penalty on these 

states, which is unfair and directly contradicts the nation's established energy and environmental 

policies. 

Commenters stated that at Plant Vogtle, located near Augusta, Georgia, Units 3 and 4 are 

currently under construction; commercial operation is slated in 2017 for Unit 3 and in 2018 for 

Unit 4. Commenters noted that the units will be state-of-the-art Westinghouse AP1000 reactors, 

each producing approximately 1,117 MW, at a projected capital investment of $14 billion, 

creating some 5,000 on-site construction jobs and 800 new permanent jobs. 

Commenters stated that the owners of Vogtle 3-4 are GPC, the Corporation, MEAG and Dalton 

Utilities; SoNOPCo, a subsidiary of the Southern Company, is the licensee and operator of the 

Plant. Commenters remarked that early planning work began in 2005 and on March 28, 2008, 

SoNOPCo filed an application with the Nuclear Regulatory Commission ("NRC") for licenses 

for the two units. Commenters stated that the NRC issued the necessary licenses for Vogtle Units 

3 & 4 on February 9, 2012, and in March 2013, the initial pouring of concrete for the reactor 

buildings began; construction has continued from that point forward. 

Commenters stated that more specifically, in the Proposal, EPA determines that as part of BSER, 

building block 3 includes the projected amounts of generation available by completing all 

nuclear units currently under construction. Commenters stated that EPA proposes to include 

"under construction" nuclear generation in the denominator of its formula for calculating state 

CO2 emission rate goals: 

CO2 rate28 = [(Coal gen. (coal ER)) + (OG gen. (OG ER)) + (NGCC gen. (NGCC ER)) + 

("Other" emissions)] 

[Coal gen. + OG gen. + NGCC gen. + "Other" gen. + Nuclear gen. + RE gen. + EE gen.] 

Commenters contended that the Proposal violates the CAA and betrays national energy and 

environmental objectives and EPA's own policy goals, and if EPA finalizes the Proposal "as-is," 

without necessary revision, its action would be arbitrary and capricious rulemaking, in 

derogation of Federal law. Commenters remarked that it unfairly (and inexplicably) penalizes the 
450 

three states that have proactively acted - at great expense - to reduce future CO2 emissions by 

undertaking to construct and operate the first new nuclear generation in thirty years. 

Commenters stated that the UCS supports the EPA's inclusion of new nuclear reactors that are 

under construction in setting state emission reduction targets and for compliance. Commenters 

recognized the potential for nuclear to reduce carbon emissions from existing fossil fuel power 

plants, and supports the EPA's proposal to include new nuclear reactors that are currently under 

construction in setting state emission reduction targets and for compliance. Commenters stated 

that this approach is consistent with the EPA's treatment of new natural gas combined cycle 

plants and UCS' recommendation for new renewables that are under construction; however, 

while these technologies are currently cost-effective to deploy on a larger scale for the purposes 

of the BSER, new nuclear plants are not. Commenters stated agreement with the EPA's approach 

for not including any additional new nuclear reactors beyond the ones that are under construction 

for setting state targets because of their current high costs and long lead times; however, states 

would have the flexibility to include additional nuclear plants for compliance under the proposed 

rule. Commenters also suggested that the incremental generation from uprates, at existing plants 

that meet important safety standards, such as those described above, should be eligible for 

compliance. 

Commenters stated that for many years in advance of this proposed rule, electric providers in 

South Carolina took major steps to decrease their carbon emissions, noting that electric providers 

and their customers have already invested billions of dollars building two new nuclear generating 

facilities, and a significant share of the cost of these units are to be borne by our electric 

cooperatives through their wholesale agreements with Santee Cooper. Commenters continued, 

stating since the goal of the proposed rule is to reduce carbon emissions, carbon-free nuclear 

generation that comes online after the 2012 baseline of this rule should be treated the same as 

other new carbon-free generating sources; however, this proposed rule does not give South 

Carolina credit for making early investments in clean nuclear energy. Commenters believed that 

by including the output from yet-to-be-completed nuclear units in the calculation of the state goal 

for "existing units", EPA has effectively handicapped their State and disproportionately 

increased the amount of CO2 emission reductions that South Carolina must achieve. In contrast, 

commenters remarked, states that have utilities which invested in wind and solar are rewarded by 

EPA because those sources and the future carbon emissions reductions they are expected to beget 

cannot be not "assumed" and therefore can be used to more effectively meet a state's goal. 

Commenters believed that if this investment in future carbon-free electric generation is not 

afforded the same net benefit as all other zero-emitting generation towards meeting the State 

goal, then utilities in South Carolina will be forced to build additional alternative carbon-free 

generation to offset carbon emissions from fossil fuel generation. 

Commenters stated including under-construction "at-risk" existing nuclear in goal-setting is 

outside section 111(d) authority. 

Commenters stated EPA's attempt to justify its approach by creating a distinction between 

under-construction nuclear and yet-to-be-planned nuclear is similarly flawed. Commenters said 

EPA implies that because it historically has distinguished between affected sources that are 

under construction at the time of proposal and those that are not, that the Agency similarly can 

distinguish between under-construction nuclear units and those that are not yet planned as part of 
451 

its BSER determination; however, neither new nor under-construction nuclear units, nor existing 

nuclear units, are affected sources under Section 111. Commenters said there is no precedent or 

rationale for EPA's proposed approach, and it is instead simply based on EPA's policy goal to 

decrease the utilization of existing fossil generating units. 

Commenters stated EPA must select reasonable benchmarks when setting standards under the 

Clean Air Act. Commenters stated, in this context, EPA has proposed to calculate emission 

targets for Georgia, South Carolina and Tennessee that reflect nuclear projects in those states that 

are not anticipated to be complete until the 2015-2020 timeframe. Commenters believed this 

approach: (a) is inconsistent with the Administration's own benchmarks for cutting CO2 

emissions; (b) arbitrarily relies on a concept of "under construction" that does not appropriately 

fit this regulatory context; (c) is inconsistent with other relevant legal standards for when nuclear 

units should be considered "under construction," and (d) is inconsistent with benchmarks EPA 

has selected for other "BSER" identified in the proposed rule. Commenters remarked that the 

Administration has repeatedly stated that a primary environmental objective is to reduce GHG 

emissions in the United States "in the range of 17 percent below 2005 levels" by 2020. (47 The 

President's Climate Action Plan, at p. 4 (June 2013), available at 

http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf 

(emphasis added).) Commenters said EPA has also repeatedly promoted the proposed rule on the 

basis that it would "help cut carbon emissions from the power sector by 30 percent from 2005 

levels." (48 EPA Fact Sheet: Clean Power Plan, available at http://www2.epa.gov/carbonpollution-standards/clean-power-plan-proposed-rule (emphasis added). With respect to EPA's 

overall estimate of 30% reduction by 2030, it appears that EPA has turned the Section 111(d) 

process on its head by, first, determining on its own the level of emission reductions EPA would 

prefer to achieve on a nationwide basis and, then, fashioning a program that fits that objective. 

This is contrary to the clear statutory directive in Section 111(d).) Commenters said such a 

statement is even in the preamble to the proposed rule itself. (49 79 Fed. Reg. at 34,832 

("Nationwide, by 2030, this rule would achieve CO2 emission reductions from the power sector 

of approximately 30 percent from CO2 emission levels in 2005.").) Commenters 

noted, inconsistent with these statements, EPA now proposes to treat these five nuclear units, 

which were not operating, or even under construction, as of 2005, and were not operational at the 

time of this proposal, in a manner that essentially eliminates any positive credit their respective 

states should receive as a result of these zero-emission power plants. Commenters stated that 

Watts Bar 2, Vogtle 3-4, and Summer 2-3 were not "under construction" in 2005 or operational 

at the time of the proposal and, consistent with longstanding Administration positions on 

emissions reductions, efforts to complete these zero-emissions units - whether after 2005, after 

2012, or after the proposed or final rule - should result in a positive result for these states, not a

negative impact. 

Commenters questioned EPA's decision to base this analysis on whether a particular nuclear unit 

was "under construction" at the time of the proposal. Commenters stated that EPA provided no 

justification or explanation as to why it chose to employ the term "under construction" as 

opposed to "operational." Commenters said EPA simply stated, without supporting legal or 

technical analysis explaining why such a framework is relevant, that the "decisions to construct 

these units were made prior to this proposal." Commenters believed this framework, which 
452 

defines BSER based on whether these units were "under construction" at the time of the 

proposal, is arbitrary and unreasonable. Commenters said these are complex and expensive 

projects subject to a host of regulatory requirements and procedures. Commenters asserted that 

EPA is not qualified to make assumptions or assertions, for purposes of a BSER analysis, about 

the construction or completion of these nuclear projects. Commenters said, indeed, even if asked, 

the Nuclear Regulatory Commission could not presently assert that these units "will be" 

operational at a certain date. Commenters stated they anticipate completion and operation of 

these units in the timeframes identified by the owners/operators, but it is not within EPA's 

authority to establish regulatory standards on that basis. Commenters remarked that under 

relevant definitions of "under construction," Vogtle 3-4 and Summer 2-3 were not under 

construction in 2012, let alone 2005. Commenters said, for example, in order to qualify for the 

production tax credit for advanced nuclear energy, the Internal Revenue Service (IRS) has stated 

that "construction begins when a person who has applied for or been granted a combined license 

for an advanced nuclear facility initiates the pouring of safety-related concrete for the reactor 

building." (50 Internal Revenue Bulletin No. 2006-18 (May 1, 2006), available at 

http://www.irs.gov/irb/2006-18_IRB/ar07.html.) Commenters stated, similarly, the Department 

of Energy has, in the context of standby support programs for advanced nuclear power plants, 

stated: "Commencement of construction means the point in time when a sponsor initiates the 

pouring of safety-related concrete for the reactor building." (51 71 Fed. Reg. 46306, 46326 (Aug. 

11, 2006) (emphasis added).) Commenters noted, as the Congressional Research Service has 

recently recognized: "Pouring of the first 'safety related' concrete, which marks the start of 

reactor construction, was completed on March 11, 2013, for V.C. Summer Unit 2 and three days 

later for Vogtle Unit 3." (52 Congressional Research Service, Nuclear Energy Policy, at p. 3 

(Sept. 2013).) Commenters said, in other words, from a legal perspective, construction had not 

begun for these units until 2013, well after the 2005 or 2012 baselines and benchmarks applied 

by EPA. Commenters asserted that it is, therefore, neither appropriate nor reasonable for EPA, 

when setting emissions targets, to consider these units as "under construction." Commenters 

closed, stating as part of its selection of BSER for purposes of this rule, EPA is imposing a 

benchmark for these nuclear units that it does not apply to other BSER (with the possible 

exception of NGCC plants, which also have similar concerns with EPA's approach to "under 

construction" units), and EPA does not specifically identify "energy efficiency" 

projects/programs that are in the process of being developed and deployed, nor does EPA 

identify specific renewable energy projects that are "under construction." 

Commenters stated that as part of Building Block 3, EPA accounts for zero-emission nuclear 

energy by assuming that no existing "at risk" nuclear capacity will be retired and that all new 

nuclear energy units under construction will be built. Commenters added specifically, with 

respect to existing nuclear facilities, EPA assumed that six percent of current nuclear capacity is 

at risk of retirement and applies a uniform credit of six percent of each State's current nuclear 

capacity to electricity generation when computing each State's emission reduction target. 

Commenters believed this approach to avoided retirements is arbitrary and capricious because it 

does not account for key differences between States and between individual facilities. 

Commenters explained first, that EPA's approach assumes that all existing nuclear facilities can 

continue to operate in perpetuity and fails to include any safety valve to account for facilities that

reach the end of their licensed lives and notes that nuclear facilities must be permitted by the 

Nuclear Regulatory Commission (NRC), and a significant portion of the existing nuclear fleet 

has already obtained 20-year extensions that are set to expire before, or shortly after, the final 
453 

2030 compliance deadline. Commenters added that 36,000 MW of nuclear generating capacity 

will reach the end of the 20-year extension period between 2029 and 2035. (79 NEI, Subsequent 

License Renewal: Creating the Foundation for Nuclear Plant Operation Beyond 60 years (Feb. 

2013), http://www.nei.org/CorporateSite/media/filefolder/NEI-White-Paper-SubsequentLicense-Renewal.pdf.ext=.pdf) Commenters remarked that EPA does not to consider the 

possibility that for economic, reliability, or other operational reasons, the facility owners or the 

NRC determines that the facility has reached the end of its useful life and on that basis declines 

to seek or grant another extension and that such a decision would be beyond the authority of 

EPA or the States to control, and EPA must consider whether changes to its emission reduction 

targets would be required under such circumstances. Further, commenters remarked that EPA 

does not account for the potential that other, unforeseen events could require a facility to retire, 

citing the example, in 2013 the Crystal River 3 facility was retired as a result of unrepairable 

cracks in the containment building's outer concrete wall. (80 Press Release, Duke Energy, 

Crystal River Nuclear Plant to be retired; company evaluating sites for potential new gas-fueled 

generation (Feb. 5, 2013), available at 

http://www.dukeenergy.com/news/releases/2013020501.asp) Commenters added that likewise, 

the San Onofre Nuclear Generating Station retired two units as a result of leaks in steam 

generators. (81 Press Release, Southern California Edison, Southern California Edison 

Announces Plans to Retire San Onofre Nuclear Generating Station (June 7, 2013), available at 

http://www.songscommunity.com/news2013/news060713.asp) Commenters concluded that if 

EPA is to include avoided nuclear retirement in its BSER analysis, it must account for the 

possibility that similar equipment failures may occur in the future, and, moreover, EPA does not 

address what would happen if retirements in a State exceed six percent of the State's nuclear 

capacity. Commenters’ second point supporting his position is that EPA's proposed 90% capacity 

factor for nuclear facilities, while perhaps reasonable for the entire U.S. nuclear fleet, is 

unrealistic on a smaller, State-level scale. Commenters explained that while nuclear facilities can 

provide reliable baseload energy, both planned and unplanned outages do occur and 

maintenance, repair, and upgrades can take a significant amount of time to complete, and as a 

result, a single long-term outage could threaten a State's ability to achieve 90% capacity in a 

given compliance year. Further, commenters added, EPA's uniform application of a six percent 

"at risk" capacity factor to all States across the board ignores the binary nature of plant 

retirements, and while a uniform figure may be justifiable at a national level, many States have a 

small number of nuclear facilities and the retirement of even one unit would exceed six percent 

of the State's existing nuclear capacity. Commenters cited the example that Michigan has four 

operating nuclear power reactors, the smallest of which represents 20% of the State's nuclear 

generating capacity. Commenters said, under the circumstances, an "at risk" capacity factor of 

less than 20% would be arbitrary and capricious because it assumes that only part of a facility is 

at risk of retirement, and thus, at a minimum, EPA must conduct a State-by-State analysis and 

adjust the "at risk" capacity in the event that the State's smallest nuclear energy unit represents 

more than six percent of the State's total nuclear capacity. Commenters’ third point supporting 

their position is that by applying a uniform six percent "at risk" factor to all States, EPA 

implicitly assumes that all nuclear facilities are equally at risk of retirement. Commenters 

believed this assumption is unreasonable and cites factors such as facility age, permitting cycle, 

and location in a competitive market or vertically integrated State can all play a role in 

determining the likelihood of a specific plant's retirement. Commenters stated that given the 

relatively small universe of existing nuclear energy facilities and the significant impact of this 
454 

rulemaking, it is arbitrary and capricious for EPA to rely on aggregate national data to set Statespecific emission reduction targets, and at a minimum, EPA must apply a more granular 

methodology that evaluates each State independently to determine the amount of existing nuclear 

capacity that is truly at risk of retirement and then set State specific "at risk" capacity 

factors. Commenters’ fourth point supporting their position is that even apart from EPA's six 

percent "at risk" factor, EPA independently assumes that, for purposes of determining a State's 

emission reduction target, that all under construction nuclear plants will be completed. 79 Fed. 

Reg. at 34,870. (82 EPA is also effectively assuming that the NRC will license these plants. The 

NRC has refused to issue an operating license in the past, which led to the project being 

abandoned. http://www.nrc.gov/reading-rm/doccollections/nuregs/brochures/br0468/br0468.pdf.) Commenters noted that given the 

cancellations, delays, and budget overruns experienced by numerous nuclear plants, this 

assumption is unwarranted. (83 http://www.timesfreepress.com/news/2012/jun/04/delays-mirenuclear-plant-construction/; see also 

http://en.wikipedia.org/wiki/List_of_canceled_nuclear_plants_in_the_United_States (these 

projects have all "announced delays and budget overruns")), and adds that as EPA concedes, if a 

project is abandoned, that would have a "significant impact on the state's ability to meet" the 

emission reduction target mandated for it by EPA. 79 Fed. Reg. at 34,870. Commenters stated 

that by making this assumption, EPA is arbitrarily penalizing "first-mover" States. (84 notably, 

in EPA v. EME Homer City Generation, L.P., the EPA took the position that its construction of 

the Clean Air Act should be given deference, inter alia, because it accounted for the extent to 

which States had previously invested in emission reductions. See Br. of Resp. EPA, at 49 (S. Ct. 

Nos. 12-1182, 12-1183)) Commenters remarked that a State that constructs a nuclear power plant 

the day after the proposed rule is finalized would be able to use that increased generating 

capacity to meet its emission reduction target. But commenters said Georgia, South Carolina, and 

Tennessee get no such benefit even though they sought to construct nuclear facilities before EPA 

published the proposed rule to curb carbon emissions. Commenters concluded that, to the 

contrary, EPA has set emission reduction targets that will be required in addition to the 

reductions that would be achieved if the plants under construction were finished and became 

operational. 

Commenters stated that, in summary, by treating nuclear units under construction as constituting 

BSER for purposes of Section 111(d), EPA's proposed rule severely penalizes the states of 

Georgia, South Carolina and Tennessee even though these states are leading the expansion of 

nuclear power - the nation's most significant source of zero-emission electric generation. 

Commenters said this is unjustified and counter-productive to the agency's objective of reducing 

CO2 emissions, and EPA's approach clearly violates section 111(d). Moreover, commenters 

asserted that EPA has failed to provide a sound legal and technical basis for its decision to treat 

these states in this manner. On these grounds, commenters would also strongly oppose any 

efforts to, in EPA's words, "include in the state goals an estimated amount of additional nuclear 

capacity whose construction is sufficiently likely to merit evaluation for potential inclusion in the 

goal-setting computation." (61 79 Fed. Reg. at 34,871) Commenters believed the states where 

these nuclear units are under construction should be able to use the generation from these units, 

when operational, for purposes of demonstrating compliance with applicable goals. In other 

words, commenters stated that any state should be allowed to elect to count new nuclear 

(including under-construction units and units that may be in a company's long-term resource plan 
455 

but not yet under construction) towards compliance in its state plan when those units come online, and EPA should state affirmatively that such elections are approvable. 

Commenters stated that N. Georgia EPD and EPA do not have the authority to require 

construction or operation of new nuclear generating units. Commenters explained that the Vogtle 

3 and 4 nuclear generating units are not affected sources under the Clean Air Act, or Section 111 

in particular, and as a result, neither EPD nor EPA has the authority to require the construction or 

operation of these units or to enforce the decision to build Vogtle Units 3 and 4 (made by the coowners of the units, with oversight/approval by the Georgia Public Service Commission in the 

case of Georgia Power, and by Boards of Directors and/or municipal government authorities in 

the case of co-operative and public power/municipal co-owners, and the Nuclear Regulatory 

Commission). Commenters explained that the state of Georgia cannot reasonably meet the 

stringent goal that EPA has proposed without the construction and operation of these units and 

the EPD and EPA's lack of authority is highlighted by EPA's assumption that Vogtle Units 3 and 

4 will operate at a 90% capacity factor once on-line (which EPA then incorporates into its 

calculation of Georgia's state goal). Commenters argued that while Vogtle Units 3 and 4 are 

being built to operate at greater than 90% capacity factors, EPA has not accounted for planned 

maintenance outages that must occur, and for unplanned outages that may occur, that affect the 

units' ability to operate at these capacity factors at times. Yet, commenters remarked, neither 

EPD nor EPA has any authority to regulate the operation of these units by assuming or requiring 

that these units can always operate at such high capacity factors. Commenters believed this 

flawed assumption places Georgia at significant risk regarding the ability to comply with the 

goal during periods that even one of these units is offline, especially given EPA's proposal to 

require short-term compliance with interim period check-ins every two rolling calendar years and 

a three-calendar-year rolling average for final compliance. 

Commenters stated that in the NPRM, EPA decided to treat Vogtle 3-4, Summer 2-3, and Watts 

Bar 2 as part of BSER because, in EPA's view, there is no "incremental cost" associated with 

CO2 emission reductions from completion of these multi-billion dollar nuclear units. [79 FR 

34,870] Commenters stated they searched the NPRM and related documents in the record and 

found no legal or technical analysis, beyond assertions, that supports or justifies EPA's approach 

in this instance. Commenters added, (verbatim) EPA has not explained how it defines 

"incremental cost" in this context or how incremental costs would be calculated. [45 EPA's 

failure to explain its interpretation of "incremental cost" in this context and to explain how those 

costs are calculated contrasts with other examples of where EPA uses a similar analysis. See, 

e.g., 40 C.F.R. pt. 51, app. Y (explaining how to "calculate incremental costs" as part of EPA's 

Guidelines for BART Determinations Under the Regional Haze Rule).] Commenters said the 

Regulatory Impact Analysis (RIA) makes just a passing reference to EPA's treatment of under 

construction nuclear units. [46 RIA, at 3-10] Commenters noted that the Greenhouse Gas 

Abatement Measures Technical Support Document (GGAMTSD) contains a lone paragraph that 

recites EPA's assertion about the "incremental cost" of completing these projects, but does not 

otherwise explain the legal or technical basis for that assertion. [47 GGAMTSD, at 4-33] 

Furthermore, commenters noted that EPA's legal memorandum accompanying the NPRM merely 

asserts that these five units have "long been known to grid operators for planning purposes," [48 

EPA Legal Memorandum for Proposed Carbon Pollution Emission Guidelines for Existing 

Electric Utility Generating Units, 69, available at

http://www2.epa.gov/sites/production/files/2014-06/documents/20140602-
456 

legalmemorandum.pdf] but the legal memo does not otherwise explain or justify EPA's 

approach. Commenters said nor has EPA explained its determination that, for purposes of the 

Section 111(d) analysis, these units are adequately demonstrated. [49 In addition, EPA has not 

evaluated whether section 402(i) of the EPAct of 2005 would dictate that Vogtle 3-4 and 

Summer 2-3, which have received, or will receive, assistance provided through the EPAct of 

2005, should be treated as "adequately demonstrated" for these purposes.] Commenters 

stated, when OMB raised concerns about EPA's treatment of under construction nuclear units, 

EPA did not explain its rationale, choosing instead to simply tell OMB that "EPA is taking 

comment on whether we should include the new on the way nuclear in the state targets as 

BSER." [50 See OMB Interagency Review Comments, supra note 26 at 9 (showing EPA's 

response to OMB comments).] As such, commenters believed EPA's approach to under 

construction nuclear units has not been adequately justified and lacks support in the record. 

Commenters stated that the degree of emission limitation that EPA requires under Section 111(d) 

must be "achievable." Commenters noted, however, EPA's approach eliminates any meaningful 

margin for compliance purposes, substantially hindering the opportunity for these states to 

achieve compliance with EPA's standards. As a result, commenters believed the standard 

proposed for these states is, within the meaning of 111(d), unachievable. Commenters stated, 

although EPA references "flexibility" over 100 times in the proposed rule, in reality Georgia, 

South Carolina and Tennessee will likely face a substantial Clean Air Act compliance risk, with 

no real flexibility, as a result of the substantially more stringent emission reduction requirements 

in the proposal. Commenters stated that there simply is no flexibility for achieving compliance 

with targets that are between 14-22 percent more stringent than they otherwise would be. 

Commenters stated, by incorporating such a sizeable and significant factor as the construction of 

nuclear units projects that are still ongoing, require substantial additional expenditures, and 

remain subject to additional regulatory actions - EPA has essentially created for these states a 

compliance target that is likely unachievable. Commenters noted that this concern was 

emphasized by the Office of Management and Budget (OMB) during the Interagency Review 

Process when OMB provided EPA with comments on this aspect of the proposal, stating: "EPA 

is proposing that the emission reductions achievable at fossil fuel-fired sources due to the 

generation that would be provided by these nuclear units under construction be factored into the 

state emission performance goal through Building Block 3, effectively making them more 

stringent. Commenters said the inclusion of the five new nuclear units that EPA has identified 

account for an inordinate amount of the goals that EPA is proposing for those states." (57 57 

Summary of Interagency Working Comments on Draft Language under EO12866: Interagency 

Review, at p. 9 of 28 (attachment to e-mail dated May 15, 2014, from Robert Wayland, Leader, 

EPA Energy Strategies Group, to Cortney Higgins, Policy Analyst, OMB/OIRA) (available in 

EPA's docket for this rulemaking) (hereinafter, "OMB Interagency Review Comments"). ) 

Commenters said, moreover, OMB stated that the "inclusion of all generation from these units in 

the state goal is problematic as any prolonged outage would almost guarantee that any state 

relying on carbon-free nuclear generation to meet its annual carbon goal would fail to meet that 

goal." (58 58 Id. at 9.) Commenters believed OMB's concerns support the view that EPA's 

proposal for "under construction" nuclear generation imposes unachievable standards on the 

affected states. 
457 

Comment 4: Commenters expressed concerns regarding the proposed 90 percent capacity factor 

and why this is not realistic in goal setting. 

Response 4: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the provisions we had proposed for under-construction units in the setting of 

state goals, and will allow incremental generation from new nuclear units to be applied towards 

compliance. Please see section V.A of the preamble for further discussion of the treatment of 

new nuclear plants, and section VIII.K of the preamble for further discussion of provisions in 

state plans of allowable actions that result in an adjusted CO2 emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA also factored in the expected generation from the under 

construction nuclear units at an assumed 90 percent capacity factor in developing the interim and 

final state goals for these three states; however, it is not realistic to assume that these units will

operate at such a high capacity factor from the date of first commercial operation. Commenters 

said although a capacity factor of 90 percent is a realistic long-term equilibrium value, these 

under construction units can be expected to experience a 'shake down' period once they 

commence operation when capacity factors could be significantly lower. Commenters said 

moreover, as of late October, 2014, on average the total U.S. nuclear plant capacity factor was 

slightly less that 85 percent. 

Commenters stated for purposes of each state's goal computation, generation from 'at risk' 

nuclear capacity is based on an estimated 90 percent annual average capacity factor; EPA uses 

90 percent because it indicates this utilization rate is consistent with long-term average annual 

utilization rates observed across the national nuclear fleet. Commenters said EPA, however, does 

not provide a reference to justify the assumed utilization rate; furthermore, a long-term average 

is not consistent with EPA's guidelines that require a process for reporting on plan 

implementation, progress toward achieving goals, and implementation of corrective measures no 

less than every two calendar years during the interim compliance period and a three year average 

during the final compliance period. Commenters said in fact, the U.S. nuclear fleet recently 

operated below EPA's assumed 90 percent utilization rate. Commenters said in 2011 and 2012, 

the U.S. nuclear fleet operated at an 88.9 percent and 86.4 percent capacity factor respectively. 

Commenters said additionally, individual states may be considerably different than EPA's 

assumed utilization rate; for example, Florida's most recent three-year capacity factor for nuclear 

generation was 76.6 percent, and Mississippi's most recent three-year capacity factor was 83.5 

percent. Commenters said as a result, EPA's across-the-board assumption that each state's 

nuclear capacity has and will continue to operate at 90 percent capacity factor is not supported. 

Commenters stated EPA's unjustified assumption that Plant Vogtle Units 3 and 4 will be online 

and operating at 90 percent capacity factor by 2020, and each year thereafter, creates a 

substantial risk that both routine and unexpected outages at these units will require Georgia to 

obtain additional, expensive emission reductions elsewhere. Commenters said shutdowns for 

refueling, maintenance, and safety issues could lead these units to operate at capacity factors 

below 90 percent for sustained periods. Commenters said likewise, it is possible that these new 

units will not operate at their full capacity during the first months or years of operation as plant 

operators test and fine-tune the new units. Commenters said EPA's 90 percent capacity factor 
458 

assumption, which is based on historical national average capacity factors for existing nuclear, is 

even more inappropriate for the nuclear units under construction because these units are first of 

their kind, new technology, which creates additional uncertainty regarding the time to ramp up to 

expected performance as well as on-going operations. 

Commenters stated neither GEPD nor EPA has the authority to force the operation of Plant 

Vogtle Units 3 and 4; as a result, if the capacity factors for these units fall below 90 percent, 

Georgia will be required by EPA's Section 111(d) program to make up for the potentially 

significant shortfall with more expensive renewable generation or energy efficiency, leading to 

large financial penalties for Georgia's early investments in zero-carbon nuclear power. 

Commenters said as OMB explained to EPA during the Interagency Review process, the 

"inclusion of all generation from these units in the state goal is problematic as any prolonged 

outage would almost guarantee that any state relying on carbon-free nuclear generation to meet 

its annual carbon goal would fail to meet that goal." Commenters said Congressional Research 

Service ("CRS") explained: "[i]f these anticipated units do not complete construction and enter 

service, these states would likely have more difficulty achieving their emission rate goals." 

Commenters said the GEPD was more direct in its comments, explaining that "underconstruction nuclear generation has such a significant impact on the goal that any shortfall in 

ultimate performance would be virtually impossible to overcome." Commenters said as a result, 

EPA should remove under construction nuclear from its goal calculation for Georgia, and instead 

should treat Plant Vogtle Units 3 and 4 like any other future nuclear generation, not incorporated 

into the state goal, but available for compliance. 

Commenters quoted NEI and EEI's evaluation of the true average lifetime capacity factor for the 

U.S. nuclear fleet, which determined that the average lifetime capacity factor of the 100 nuclear 

plants currently in operation is 81.6% (through 2013). Commenters suggested that, even to the 

extent that the final rule does not fully account for all nuclear generation in state compliance 

plans, any generation from existing nuclear EGUs in excess of the average lifetime 81.6% 

capacity factor should be authorized for inclusion by states in their compliance demonstrations. 

Commenters also suggested that the final rule should allow nuclear generation above the 81.6% 

lifetime capacity factor between the years 2012 and 2020 to be "banked" and applied toward 

post-2020 compliance. 

Commenters stated that there are several deficiencies, inconsistencies and errors in EPA's 

methodology to include the 6% at-risk nuclear capacity and 90% capacity factor of dispatch in 

the goal calculation. Commenters also pointed out several differences between the stated nuclear 

capacities for Ohio in the GHG Abatement Measures TSD with EIA reports. Commenters 

mentioned that EPA states in that document that 2,150 MW of nuclear capacity were operational 

in Ohio in 2012, however the 2012 EIA-860 report for the same year lists 2,236.8 MW of 

nameplate nuclear capacity. Commenters stated that the 2012 EIA-860 report gives a summer 

capacity of 2,134 MW. 

Commenters stated that the EPA's unjustified assumption that each of the five nuclear units 

under construction will be online and operating at 90% capacity factor by 2020 and each year 

thereafter creates a substantial risk that both routine and unexpected outages at these facilities 

will require host states to obtain additional, expensive emission reductions elsewhere. 

Commenters further stated that shutdowns for refueling, maintenance, and safety issues could 
459 

lead these units to operate at capacity factors below 90% for sustained periods, and that it is 

possible that these new units will not operate at their full capacity during the first months or 

years of operation as plant operators test and fine-tune these new power plants. Commenters 

quoted Office of Management and Budget (OMB) during interagency review comments: 

"inclusion of all generation from these units in the state goal is problematic as any prolonged 

outage would almost guarantee that any state relying on carbon-free nuclear generation to meet 

its annual carbon goal would fail to meet that goal." Commenters concluded that unlike Georgia, 

South Carolina, and Tennessee, states that did not invest in large, zero-carbon projects do not 

face such severe compliance risks under EPA's proposal, and that this disparity is manifestly 

unfair to the states that chose to invest in zero emission generation. 

Commenters stated that, in the Proposal, the EPA seeks to impose operational requirements on 

nuclear units, such as Vogtle 3 and 4. Commenters stated that there is a fundamental problem 

with this portion of the Proposal - the Vogtle 3 and 4 nuclear generating units (in fact, all U.S. 

nuclear generating units) are not affected sources under the CAA, including - in particular - 

section 111, the governing provisions for this rule. Commenters stated that therefore the EPA 

(and, either through Federal approval of its State programs or state authorizing legislation, the 

Georgia Environmental Protection Division ("EPD")) does not have the authority to require the 

construction or operation of Vogtle units 3 and 4 or to even enforce the decision to build them. 

Commenters continued that this lack of authority is highlighted by the Proposal's assumption that 

Vogtle Units 3 and 4 will always operate at a 90% capacity factor once on-line (a requirement 

then incorporated into the calculation of Georgia's state goals). Commenters stated that the 90% 

capacity factor assumption is without foundation, and that, according to the International Atomic 

Energy Agency, the average lifetime capacity factor of the 100 nuclear plants through 2013 is 

80.3%, while the average nuclear plant capacity factor in 2012 was 86%. Commenters stated 

that, during the initial phase of nuclear operations, capacity factors could be significantly lower 

than 90 percent, and that the EPA should lower its capacity factor assumption to a level 

consistent with what units have historically been able to maintain. 

Comment 5: EPA's assumption of 5.8 percent "at risk" in the standard-setting calculation does 

not accurately represent nuclear units that are "at risk" of premature retirements. 

Response 5: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the proposed provisions for existing nuclear units in the setting of state 

goals. Please see section V.A of the preamble for further discussion of the decision to exclude 

existing nuclear power from BSER, and section VIII.K of the preamble for further discussion of 

provisions in state plans of allowable actions that result in an adjusted CO2 emission rate of an 

affected EGU. 

The following are summaries of the specific public comments under this comment:

Several commenters stated that the EPA's assumption that 5.8% of the nuclear power in each of 

the 30 states with nuclear power was "at risk" was flawed. 
460 

Commenters stated that there is no logical or factual basis to assume that six percent of the 

nuclear generation in every state with nuclear generation is "at risk." Commenters stated that, 

although there are nuclear plants at risk, they are generally located in states with competitive 

markets, not evenly distributed among all states with nuclear capacity. Therefore, commenters 

stated that the EPA's approach is thus arbitrary and indefensible analytically. Commenters noted 

that in some states (depending on the make-up of the state's generation portfolio), the six percent 

'at risk' factor may have perverse and unintended consequences, i.e., a state could lose its nuclear 

generation, replace only six percent of it with other zero-carbon resources, still meet the intensity 

target, but total carbon emissions would increase. Commenters concluded that, as a result, the six 

percent nuclear factor does not achieve the intended result: It provides no incentive for states to 

preserve nuclear capacity at risk. 

Commenters stated that the EPA's treatment of existing nuclear energy in the proposed rule is 

fundamentally flawed due to the 'at risk' framework applied only to nuclear generation. 

Commenters stated that the EPA underestimates the nuclear generation at risk of premature 

retirement in some states, and overstates the nuclear capacity at risk in others. Commenters 

stated that public data shows that the "at risk" plants are not evenly distributed among all states 

with nuclear capacity, and that much more than six percent of nuclear capacity is at risk in 

competitive markets. Commenters noted that Illinois, for example, Exelon Corp. has indicated 

publicly that five of its 11 nuclear reactors are at risk of premature shutdown, and that the 11 

nuclear reactors in Illinois produce approximately 48 percent of the state's electricity. 

Commenters concluded that in some states (depending on the make-up of the state's generation 

portfolio), the six percent "at risk" factor may have perverse and unintended consequences, i.e., a 

state could lose its nuclear generation, replace only six percent of it with other zero-carbon 

sources, still meet the intensity target, but total carbon emissions would increase. Commenters 

stated that such an outcome does not support the goal of the regulation, reducing the effects of 

carbon emissions on global climate. Commenters concluded that the six percent nuclear factor 

does not achieve the intended result, and EPA's decision to ignore 94 percent of nuclear 

generation is not justified: It provides no incentive for states to preserve nuclear capacity at risk. 

Commenters also stated that if states are to achieve meaningful emission reductions, carbon-free 

generation (including existing nuclear generation) must remain in operation or be replaced by 

carbon-free generation. Commenters noted that if a state has a single 1,000-megawatt nuclear 

plant that shuts down prematurely, six percent of that capacity would be only 60 megawatts, and 

a state could replace that easily with, for example, a new wind farm. Commenters recommended 

that a state should not be indifferent to the loss of the remaining 940 megawatts of nuclear 

capacity, which would almost certainly be replaced by new gas-fired combined cycle units that 

would increase the state's total carbon emissions. Commenters stated that, given the purposes of 

this rule, it would be arbitrary and capricious for EPA not to consider the possibility of this 

outcome, yet the proposed rule allows a state to be indifferent to the loss of 94 percent of its 

nuclear generating capacity, because it charges the state with the loss of only six percent of 

prematurely retired nuclear capacity. 

Commenters also stated that retiring only six percent of a state's nuclear capacity is implausible, 

if not impossible. Commenters noted that the owner of a nuclear plant cannot retire six percent of 

the facility; the only choice is to retire it completely or keep it operating. Commenters further 
461 

noted that number of states have only one nuclear facility, which means that any retirement will 

necessarily be a retirement of 100 percent of the state's nuclear generating capacity. Commenters 

also noted that even in states with multiple nuclear units, virtually any single nuclear unit will 

generate more than six percent of in-state nuclear generation. Commenters concluded that, if any 

nuclear facility is prematurely retired, it is nearly certain to represent more than six percent of a 

state's nuclear capacity. But Commenters stated that six percent is the most that is relevant under 

the proposed rule. 

Commenters stated the EPA's rule could, paradoxically, increase the financial pressure on 

existing nuclear plants, because the rule expresses its targets in terms of a state-by-state emission 

rate rather than actual emissions. Commenters stated that by measuring only the rate, not the 

total emissions, states could be encouraged to (1) ignore zero-emission resources like nuclear 

energy, and (2) focus instead on complying with the emission rate by artificially increasing the 

marginal cost of higher-emitting generators (like coal-fired plants) while reducing the marginal 

cost of lower-emitting generators (like gas-fired combined cycle plants). Commenters provided 

the example that at a state might adopt an emissions credit regime that taxes higher-emitting 

fossil fuel plants and subsidizes lower-emitting fossil fuel plants. Commenters stated that, under 

such a program, a gas-fired combined cycle plant would be able to sell electricity for less than its 

true marginal cost, thereby lowering the market price of electricity for all generators, further 

undercutting the economic viability of existing nuclear plants. 

Commenters also stated that there are practical reasons not to use a snapshot-in-time figure of 

nuclear capacity at risk as the basis for a rule that will govern for decades. Commenters observed 

that market conditions are dynamic, and a plant that is not at risk today may be at risk tomorrow, 

and vice versa. 

Commenters stated that the 5.8 percent figure was computed based upon an AEO 2014 

projection, without evaluating specific nuclear capacity in each state. Commenters stated that this 

approach does not in any way reflect the actual state of existing nuclear capacity in any state, 

resulting in additional generation being included in the goal setting equation for some states, if 

not all. Commenters recommended that factors such as license renewal and expiration dates, 

expected capital improvements, profitability and other factors should be considered and an 

appropriate unit/state specific risk factor be applied. 

Commenters recommended that, consistent with EPA's desire for flexibility in development of 

State Plans, states should be able to justify and utilize in their State Plans more state-specific 

determinations of "at risk" nuclear generation within their state rather than being restricted to the 

numerical methodology set forth in the Proposed Rule. Commenters stated that RTOs with 

capacity markets have tools available to assist states in ranking the competitiveness of individual 

units under an "at risk" showing. Commenters stated that while confidentiality provisions would 

limit the specifics of this information being spread on the public record, states and RTOs could 

develop state and regional formulae that would better allow for the identification of at risk 

nuclear plants in a given footprint with the EPA methodology than available solely as a default. 

Commenters stated that the 6% credit for 'at-risk' nuclear is insufficient incentive to keep these 

units in operation, and does not reflect conditions in Georgia, and recommended that EPA should 

not include the at-risk nuclear in the goal computation. Commenters further stated that nuclear 
462 

power plants/units are either fully operational or fully shutdown and their continued operation 

have been solely based on their ability to be re-licensed by the Nuclear Regulatory Commission 

(NRC). 

Commenters asserted that states with existing nuclear capacity are penalized in the calculation of 

emission rate goals. Commenters stated that under the EPA's approach, states with nuclear power 

are left with a more stringent emission rate goal relative to states that do not employ nuclear 

power because of EPA's inclusion of the 6% "at risk" generation factor in the calculation of state 

goals. Commenters recommended that this factor be dropped in the determination of states' CO2 

compliance goals. 

Commenters stated that the method EPA has employed to include nuclear capacity in its 

development of state goals penalizes those states in which there is both existing capacity and 

capacity under construction. Commenters stated that this penalty is in the form of additional 

nuclear generation being added into the denominator of the goal computation formula under 

Building Block 3, decreasing the overall calculated target rate (CO2 lbs/MWh) used to determine 

the state emission goals. Commenters asserted that a state without existing nuclear capacity will 

benefit from EPA's Building Block 3 relative to other states, in that its denominator will not 

include nuclear generation, resulting in a higher state goal. The commenters concluded that states 

that have nuclear generating units with zero CO2 emissions or that are currently developing 

nuclear units are effectively penalized and lose any flexibility as to whether to complete or 

operate those units. 

Commenters also stated the EPA's assumption that 5.8 percent of each state's 2012 nuclear 

capacity is "at risk" does not in any way reflect the actual state of existing nuclear capacity in 

any state, resulting in excessive generation being included in the goal setting equation for some 

states, if not all. Commenters recommended that if the EPA decides to include 'at-risk' nuclear 

generation in state goals (even though doing so inappropriately penalizes states with existing 

nuclear capacity), the EPA should evaluate factors such as license renewal and expiration dates, 

expected capital improvements, profitability, and other factors in order to determine an accurate 

state-specific assessment of at-risk capacity. Commenters concluded that the EPA's proposed 

approach to existing nuclear generation, which it thinks is an incentive to keep 'at-risk' nuclear 

capacity on-line, is merely a penalty. 

Commenters stated that nuclear energy and hydroelectric generation represent about 85 percent 

of current low- or zero-emitting resources, and all of the megawatts produced by nuclear and 

hydroelectric generation are zero-emitting. Commenters further stated that, of the existing zeroemitting capacity (including nuclear, hydroelectric, solar, wind, and geothermal), 81.3 percent 

can be replaced (under the current formulation) with generation that emits at a rate equal to the 

state's goal rate, which will lead to CO2 emissions increases representing a huge step backwards 

from the starting CO2 emissions rate of zero for these technologies, and resulting from this rule. 

Commenters concluded that while EPA's rates are reasonable in that they reflect an easily 

achievable target in this regard, they do not go far enough, and in fact may create incentives to 

increase CO2 emissions. To fix this problem, the commenters recommended that if the EPA is 

going to continue to rely on building block 3 as any part of the basis for its targets, the Agency 
463 

will need to adjust the nuclear portion of its building block 3 assumptions to more accurately 

reflect current and expected future conditions in the industry. 

Commenters stated that analysis by Justin Knowles and Remy Devoe , reveals that the current 

formulation of the building block 3 portion of the BSER target setting exercise actually rewards 

15 states with lower apparent (calculated) target emissions rates if they shut down their nuclear 

power generation and replace it with natural gas generation, than the rates they would have if 

more realistic nuclear scenarios were used in the target setting exercise. 

Commenters presented the example of Illinois, where the current target CO2 emission rate 

calculated by the EPA, based on including 5.8 percent of nuclear power in the baseline, is 1,271 

lbs/MWh. Commenters stated that if Illinois were to take its nuclear capacity offline and replace 

it with natural gas generation, its resulting emissions rate as calculated by the EPA would be 

1,130 lbs/MWh, despite the fact that the state's absolute CO2 emissions would have risen by 48.4 

percent (considered on a mass basis, they would go from 163.7 million tons CO2 per year to 

242.9 million tons CO2 per year). Commenters concluded that Illinois can drastically increase its 

actual emissions, and yet still meet or exceed its EPA state target emission rate. 

Commenters asserted that a similar situation exists for 14 additional states, as illustrated by the 

Knowles and Devoe analysis. Commenters stated that in all states with nuclear generation, the 

importance of nuclear generation in maintaining and lowering CO2 emissions is undervalued by 

the current baseline calculation. Commenters stated that the existing methodology leaves 

absolute emission reductions highly vulnerable to the loss of nuclear power generation by 

omitting its contribution in the goal-setting step. Therefore, commenters recommended that the 

EPA include 100 percent of existing nuclear generation in the building block 3 BSER baseline 

emission rate calculation -- and in the other elements of the target setting methodology -- 

removing the incentive to retire existing nuclear generation and replace it with higher emitting 

generating resources. 

Commenters recommended that the EPA eliminate the at-risk nuclear provision from the goalsetting calculation. Commenters stated that the proposed rule's "at-risk" nuclear provision results 

in more stringent goals for states with existing nuclear capacity than for states with no nuclear 

generation, and that states in which nuclear plants increased their output prior to 2012 are 

penalized rather than rewarded for this investment.

Commenters stated the EPA should instead provide an incentive for nuclear units to continue to 

operate and increase their capacity factor and output, if possible. Commenters stated that the atrisk nuclear provision in the goal does not incentivize nuclear plants to maintain operations; once 

constructed, nuclear plants are relatively cheap to operate. Commenters recommended excluding 

existing nuclear from the goal-setting calculation, but allowing states with existing nuclear to 

take credit for a portion of their nuclear generation for compliance purposes would, in order to 

provide this incentive. Commenters stated that otherwise, states are penalized for having nuclear 

that shuts down, when oftentimes there may be little states can do to keep nuclear generation 

operating. Commenters noted that states have little to no input on the decisions of nuclear plant 

operators to continue operations or shut down, and no input on the dispatch of nuclear units. 
464 

Commenters also recommended that the EPA should recognize the early action that utilities have 

taken to increase nuclear plant output, such as the 2011 extended power uprate of 160 MW at the 

Point Beach Nuclear Plant. Commenters stated that, rather than getting any credit for this 

additional, zero-CO2 generation, the additional 160 MW only serves to increase the stringency 

of Wisconsin's goal by increasing the at-risk nuclear factor in the goal-setting calculation. 

Commenters recommended that, if the EPA retains the inclusion of at-risk nuclear capacity in 

setting state goals, at least the capacity from recent (post-2005) uprates should be excluded from 

determining the amount of at-risk nuclear generation. 

Commenters concluded that if the EPA does retain a provision in the goal-setting calculation to 

account for at-risk nuclear capacity, the EPA should distinguish units that are truly at-risk and 

recalculate the percentage of "at-risk nuclear" used in setting state goals. Commenters suggested 

that a non-regulated merchant plant could be considered at-risk, whereas a utility-owned plant in 

a rate-regulated state or a plant with a long-term power purchase agreement, such as Point 

Beach, would not be "at-risk." 

Commenters stated the EPA's approach to account for nuclear capacity at risk of retirement is 

arbitrary and flawed. Commenters said the EPA identifies Texas as having 290 MW of nuclear 

capacity at risk of retirement; however, the smallest nuclear power plant unit in Texas is 

approximately 1200 MW. Commenters said the EPA should have considered the actual sizes of 

the nuclear units in the states before arbitrarily applying the 5.8% to the states' nuclear power 

plant fleets. In reviewing the National Electric Energy Data System (NEEDS) data on nuclear 

units, the commenters have not found a single state with a nuclear unit small enough to 

correspond to the capacity which the EPA says is at risk of retirement for that state. Commenters 

said the EPA's arbitrary application of the 5.8% without consideration of other factors has 

resulted in a nonsensical adjustment to the state goal. Commenters said the EPA's adjustment has 

an adverse consequence for states that actually have nuclear units at risk of retirement because 

EPA's approach assumes that only 5.8% of their fleet is at risk when in reality a higher 

percentage may actually be at risk of retirement. 

Commenters stated in addition to violating the plain language of section 111, EPA's proposal to 

incorporate approximately 5.8% of each state's supposedly "at-risk" nuclear capacity in 

calculating state goals is also arbitrary and capricious for the following reasons. Commenters 

said first, the study on which EPA relies does not project that 5.8% of Georgia's units are at risk 

of retirement; indeed, the assumption that Georgia may retire some of its existing nuclear 

capacity is unreasonable in light of the fact that the State's utilities are investing billions of 

dollars to build additional nuclear capacity in the State; moreover, the costs of both new and 

existing nuclear generation are already included in their utilities' rate base. Commenters said 

consequently, temporary electricity market fluctuations -such as those that generators in 

competitive wholesale markets may experience- will not put Georgia's existing units at risk of 

retirement. Commenters said finally, none of Georgia's four existing reactors will be required to 

seek a license extension until at least 2034; therefore, there is no reason to believe that any of 

these units are at risk of retirement in the near future. Commenters said EPA should not 

arbitrarily apply an assumption that was developed on a national scale for nuclear facilities in 

different market situations to Georgia's four existing reactors -all of which are expected to 

continue providing power for the foreseeable future. 
465 

Commenters stated furthermore, the Proposed Rule's treatment of existing nuclear capacity is 

also arbitrarily inconsistent with the proposal's treatment of other large, existing sources of 

emission-free electricity, such as hydroelectric dams or RE facilities. Commenters said EPA 

asserts that the inclusion of 5.8% of existing nuclear capacity in calculating states' emission goals 

is reasonable because the EIA projects that this percentage of existing nuclear capacity will retire 

due to "continued economic challenges; however, both hydroelectric facilities and RE facilities 

also face market and non-market challenges that could lead to reduced capacity or shutdown in 

future years. Commenters said for example, a number of hydroelectric dams have been removed 

due to safety, economic, or environmental concerns, and others are at risk of removal or derating due to Endangered Species Act and other concerns. 

Commenters stated renewable energy facilities in California and other markets could also face 

economic challenges as the supply of non-dispatchable RE exceeds demand for lengthy periods 

or as their generation technology degrades over time. Commenters said the typical operating life 

of a solar facility is 30 years, whereas a typical wind facility is 20 years; therefore, existing RE 

facilities that were installed before 2010 are likely to begin retiring in large numbers during the 

proposed interim and final compliance periods; on the other hand, nuclear facilities typically 

hold operating licenses that last 40 years, with the opportunity to apply for an additional 20-year 

license extension (as Georgia's Hatch Units 1 and 2 have done). Commenters said consequently, 

it is at least as likely that existing RE and hydroelectric resources will shut down or retire during 

the Proposed Rule's compliance period as it is that nuclear facilities will do so. Commenters said 

despite this reality, EPA has not proposed to penalize states that retire existing hydroelectric or 

RE capacity by incorporating an assumption about "at-risk" hydroelectric or RE generation into 

state goals; EPA's decision to include only some "at-risk" emission free resources in state goals 

while excluding others is arbitrary and capricious.

Commenters stated another flaw in EPA's proposal to penalize Georgia if utilities in the State fail 

to preserve their existing nuclear reactors is that Georgia has limited control over whether 

nuclear capacity in the State is preserved or retired. Commenters said the fact that all plants in 

the State are licensed until at least 2034, combined with the fact that nuclear generation costs are 

included in Georgia's customers' rate base, significantly reduces the likelihood that these power 

plants will need to retire, negative long-term regional or national trends that are beyond 

Georgia's control could still require their utilities to shut down or reduce operation at one or 

more of their existing reactors. Commenters said furthermore, changes to federal regulations, 

such as those that followed the Fukushima disaster, could also impose additional requirements on 

existing reactors that would lead to early retirement; therefore, although it is highly unlikely and 

arbitrary for EPA to consider Georgia's four existing reactors at risk of retirement, the fact 

remains that Georgia cannot itself guarantee that these units will continue to generate electricity 

in the future. Commenters said consequently, it would be arbitrary and capricious to consider the 

preservation of existing nuclear capacity to be an "adequately demonstrated" system of emission 

reduction for Georgia's power plants, because the State and its utilities have little control over 

whether these facilities will continue to operate in the future if economic or regulatory changes 

make continued operation impossible or uneconomic. 

Commenters stated in the 2012 baseline year proposed by the EPA, approximately 30 percent of 

generation produced in the RGGI region was derived from nuclear resources; in fact, even as 
466 

demand in the RGGI region decreased over time, nuclear generation increased its percentage 

share of the total in-region generation by 3 percent between 2005 and 2012. 

Commenters stated the overall experience of the RGGI states demonstrates that a mass-based 

approach to emission reductions can incentivize economic and otherwise viable nuclear 

resources to remain on-line by increasing the competitiveness of legacy nuclear resources with 

fossil fuel-fired EGUs (which should increasingly reflect a carbon price in their offerings). 

Commenters said however, experience in the RGGI region suggests that financial and other 

issues need to be taken into consideration when evaluating or forecasting the contribution of 

nuclear resources, particularly in light of the transformation of the natural gas market in recent 

years. Commenters said in the rate-based goal-setting methodology at issue here, the EPA 

proposal attempts to incentivize states to retain existing nuclear generation through the inclusion 

of an at-risk assumption in the goal computation methodology. 

Commenters stated while additional incentives may be necessary - especially at the federal level, 

the EPA should remove the at-risk assumption from the goal computation methodology since its 

design neglects to account for the full range of possible circumstances in which a nuclear 

resource may be pressed into retirement. Commenters said if the EPA opts to retain its proposed 

approach, then the EPA should consider outlining an off-ramp by which the nuclear generation 

component would be removed from a state's goal computation upon expiration of an existing 

license or following an accident that translates into cost-prohibitive repairs. 

Commenters continued EPA calculates the generation (in MWh) of electricity from 'at risk' 

nuclear plants and then adds this generation to the denominator of the goal, resulting in a more 

stringent 2030 emission rate for states with nuclear capacity. Commenters said EPA explains that 

the proposed rule counts only six percent of existing nuclear facilities because (according to 

EPA) six percent of nuclear capacity nationwide is "at risk" for premature retirement. 

Commenters stated however, if states are to achieve meaningful emission reductions, it is 

important that all existing nuclear generation (as well as all existing zero-emission sources) 

remain in operation-yet the proposed treatment of "at risk" nuclear generation inadequately 

promotes this goal. Commenters said for instance, if a state has a single 1000 MW nuclear plant 

that is retired, six percent of that capacity will be only 60 MW-capacity that a state could easily 

replace with, e.g., a new wind farm. Commenters said a state should not be indifferent to the loss 

of the remaining 940 MW of nuclear capacity-supply that will almost certainly be replaced in 

large part by new NGCCs that will increase the state's total carbon footprint. Commenters said 

yet such indifference is precisely what the proposed rule fosters by charging the state with the 

loss of only six percent of prematurely retired nuclear capacity and providing no incentive to 

keep the remaining nuclear capacity in operation. 

Commenters stated moreover, the proposed rule's rationale for counting only six percent of 

nuclear generation-namely, that only six percent of nuclear capacity is "at risk"-is too broadly 

applied. Commenters said first, the reality is that "at risk" nuclear facilities are concentrated in a

small number of states with competitive markets, generally located in three regions of the 

country: the Northeast, the Midwest and the Great Lakes. Commenters said in those areas, the 

fraction of the merchant nuclear fleet that is at risk of early retirement is much greater than six 

percent. Commenters said in other regions, where nuclear plants are owned by regulated utilities, 
467 

the fraction of the at-risk fleet is much less than six percent and, in many of those states, 

effectively zero. Commenters said second, if any nuclear facility is prematurely retired, it is 

nearly certain to represent more than six percent of a state's nuclear capacity-indeed, likely far 

more. Commenters said for example, a number of states have only one nuclear facility-which 

means that any retirement will necessarily be a retirement of 100 percent of the state's nuclear 

fleet; yet six percent is the most that is relevant under the proposed guidelines. Commenters said 

EPA's decision to count the six percent of nuclear generation "at risk" when setting state-specific 

goal rates unreasonably increases the stringency of state goals where nuclear already exists while 

not providing an adequate incentive to maintain the economic viability of any "at risk" nuclear 

plants. 

Commenters stated finally, there are practical reasons not to use a snapshot-in-time figure of 

nuclear capacity at risk as the basis for a rule that will govern for decades; market conditions are 

dynamic, and a plant that is not at risk today may be at risk tomorrow. 

Commenters stated if EPA is going to continue with its proposed interpretation of BSER, the 

Agency should remove the six percent "at risk" nuclear capacity from the goal calculation. 

Commenters said a number of alternative approaches to the treatment of existing nuclear 

generation will be offered by stakeholders in individual comments. Commenters said one 

approach that EPA should consider, however, is for a state to demonstrate in its plan reasonable 

assurance that it will preserve its existing carbon-free generating capacity, particularly nuclear 

generating capacity. Commenters said for operating nuclear generating units in regulated states, 

such assurance already exists because integrated utilities have a reasonable opportunity to 

recover costs, plus a reasonable return. Commenters said in competitive states with nuclear 

generating units potentially at risk, this could involve a commitment to policy changes through 

legislation or regulation, or other market-based mechanisms, or a combination that would create 

incentives for continued operation of these zero-emitting generators. 

Commenters recommended in the event of premature economic shutdown of a nuclear unit (most 

likely to occur in a competitive market if the unit is not recovering its costs), the lost nuclear 

kilowatt-hours should be subtracted from the denominator of the state's compliance calculation. 

Commenters said this would provide states an unequivocal signal that existing nuclear generating 

capacity has irreplaceable carbon abatement value and must be preserved. Commenters said this 

compliance penalty would not apply in any situation or in any state where a nuclear unit shuts 

down for reasons beyond a state's control. Commenters said this compliance penalty would only 

be applied for the period between premature shutdown and the end of the unit's remaining useful 

life. 

Commenters stated relying on a national projection from the EIA, the Agency has estimated that 

six percent of the nation's nuclear capacity is at risk of premature retirement; however, public 

data shows that a much larger percentage of the merchant nuclear generating capacity in 

competitive markets is at risk, and that the "at risk" plants are not evenly distributed among all of 

the states. Commenters said in some states, such as Illinois, significantly more than six percent of 

the merchant nuclear capacity is at risk. Commenters said there, for example, Exelon Corp. has 

indicated publicly that five of its 11 nuclear reactors in the state are at risk of premature 

shutdown. Commenters said the eleven nuclear reactors in Illinois produce approximately 48 

percent of the state's electricity. 
468 

Commenters stated EPA's inclusion of 'at risk' nuclear capacity is arbitrary and serves only to 

penalize states with existing nuclear capacity. Commenters said the Agency has made no attempt 

to evaluate whether any nuclear capacity is actually at risk of retirement in any state, instead 

extrapolating from generalized estimates of nationwide nuclear retirements. Commenters said the 

result is that EPA overestimates the amount of nuclear capacity that is at risk (if any) in most, if 

not all, states. Commenters said even if some nuclear capacity is at risk in a state (whether at the 

level EPA estimates or at some lower level), including this capacity in a state's goal does nothing 

to incentivize its preservation because states have no control over the primary factor threatening 

nuclear EGUs: federal license renewal. Commenters said thus, because states have little ability to 

promote nuclear capacity and can only be harmed by including under construction and 'at risk' 

capacity in the goals, EPA's approach is simply a penalty and not an incentive. Commenters said 

to the extent preserving and increasing nuclear capacity needs to be incentivized, that needs to be 

done by the relevant federal agency (the Nuclear Regulatory Commission) to the extent Congress 

has given that agency that authority. It cannot be done, however, by EPA through the CAA. 

Commenters recommended that existing nuclear should be removed from the state goal setting 

calculation because it does not represent the nuclear units "at-risk, and that the inclusion of 

existing nuclear in the proposed rule only increases the compliance risk for those states that have 

existing nuclear capacity. Commenters stated that "the true 'at-risk' units are plants that are not 

economically viable in capacity markets due to low natural gas prices and units that are not 

planning to seek re-licensure through the Nuclear Regulatory Commission. 

Commenters stated in 2012 nuclear-powered generation comprised 48 percent of generation in 

Illinois, 47 percent in Connecticut, 36 percent in Maryland, and 30 percent in New York. 

Commenters noted that if some amount of at-risk nuclear generation is discontinued, as projected 

by the U.S. Energy Information Administration, then emissions or emission rates would be likely 

to increase unless the lost generation capacity was replaced entirely with non-emitting resources 

or avoided through demand-side energy efficiency. 

Commenters stated EPA's assumption that 5.8% of each state's nuclear fleet is "at risk" for 

retirement is flawed. Commenters said for Texas, EPA assumed that 290 MW of nuclear 

capacity is "at risk" for retirement even though this does not equate to a full nuclear unit. 

Commenters said EPA should have considered the actual size of nuclear units that were actually 

at risk for retirement rather than applying an arbitrary percentage to all states. Commenters said 

EPA does not specify any type of monitoring or verification for at risk nuclear generation; nor is 

it clear how or whether actual net nuclear generation would be taken into account for complying 

with Rule 111(d). Commenters said while this assumption does not appear to have a meaningful 

impact on Texas's emissions rate, it further illustrates the arbitrary and unreasonable manner that 

EPA has used in promulgating Rule 111(d). 

Commenters stated in 2007, the Commission approved the construction of two new advanced 

nuclear generating units at the Vogtle site which will produce approximately 2,200 MW of 

carbon-free base-load power. Commenters said the rule treats these new units, which are 

projected to be in service in 2017 and 2018, for Units 3 & 4, respectively, as existing resources. 

Commenters said as such, the rule appears to be punitive to Georgia and its citizens. 

Commenters said if these exact same nuclear units were announced today, the full value of 

production would be available for environmental compliance; penalizing states for being 
469 

proactive sends the wrong signal to those responsible for making planning decisions to meet 

energy needs. 

Commenters stated by reducing nuclear production to only 5.8% of current units and removing 

units currently under construction from the goal calculation, the proposal sends a negative signal 

to utilities to invest in nuclear generation. Commenters said the reduced figure is based on 

specific "at risk" units in other states which have no bearing on the longevity of the current 

nuclear units in Georgia. Commenters said the Technical Support Document for Greenhouse Gas 

Abatement Measures show that 237 MW of nuclear capacity is at risk implying that a portion of 

a unit (or multiple) would shut down. Commenters said these units will either be in full operation 

or retired, there is no option for partial electricity production. Commenters said applying risks 

and the subsequent emissions reductions to units that are clearly not at risk of retirement is 

illogical and should be changed in the final rule. Commenters said the EPA should tailor the rule 

to each specific unit individually and not rely on blanket assumptions in the rulemaking process. 

Commenters questioned the methodology used by the EPA in calculating the contribution of 

nuclear plants to the state goal in Building Block 3. Commenters said EPA determined that 5.8 

percent of the existing nuclear fleet is at-risk, and in calculating the state goal assumed that the 

existing nuclear generation in each state would be reduced by that amount. Commenters said that 

at-risk generation was used in the calculation of the goal, but is then awarded to the state without 

conditions in calculating compliance with the goal. Commenters said at-risk nuclear plants are in 

danger of a total shut-down, not a curtailment in their generation; therefore, existing nuclear 

plants should not contribute to the state goal calculation, and only existing nuclear plants that are 

truly at-risk should be counted for compliance purposes, provided the approach is lawful under 

Section 111 (d) of the CAA. Commenters said in Pennsylvania, the nuclear portion of Building 

Block 3 accounts for 7.8 percent of the state goal.

Commenters stated EPA's assumption that six percent of existing nuclear capacity in the 

Southeast is 'at-risk' of retirement is improperly based on national data and averages. 

Commenters continued EPA has determined that preserving the operation of at-risk nuclear 

capacity would likely help achieve CO2 reductions from affected EGUs at a reasonable cost. 

Commenters said EPA then concludes that approximately six percent of existing nuclear capacity 

across the nation is 'at risk' of closure due to current market conditions. Commenters said in 

discussing the preservation of the existing nuclear fleet, EPA notes several factors that have led 

to the retirement of six nuclear EGUs since 2012: increasing fixed operation and maintenance 

costs, relatively low wholesale electricity prices, and additional capital investment associated 

with ensuring plant security and emergency preparedness. Commenters said other factors include 

increased costs due to an inefficient regulatory process and defects in merchant market policies 

that do not value fully the various attributes of base load nuclear plants. Commenters said EPA 

relies on the EIA's Annual Energy Outlook 2014 to project that 5.7 GW of nuclear capacity is 

likely to retire. Commenters said EPA views this 5.7 GW, which comprises approximately six 

percent of existing U.S. nuclear capacity, as a reasonable proxy for the amount of nuclear 

capacity at risk of retirement. Commenters said EPA then factored in the zero emissions 

generation from operating these at-risk units at a 90 percent capacity factor in developing the 

interim and final state goals for all states that have existing nuclear capacity. 
470 

Commenters stated EPA factors in the continued operation of six percent of nuclear generation 

into the goal for every state that has existing nuclear capacity, regardless of whether the Agency 

believes a specific unit in a state is an early closure risk; for example, EPA's BSER 

determination concludes that approximately six percent of the nuclear capacity in Alabama, 

Florida, Georgia, and Mississippi will retire by 2019 absent EPA's rulemaking. Commenters said 

all of the nuclear capacity in Alabama, Florida, Georgia, and Mississippi is licensed to operate 

beyond 2019; in fact, only one license is currently scheduled to expire prior to 2030, and that 

unit already is in the relicensing process. 

Commenters stated as a result, even based on EPA's flawed methodology, there is no basis to 

lower the state goals for Alabama, Florida, Georgia, or Mississippi to account for nuclear units 

that may be at risk of retirement; these units will continue to operate through 2030 regardless of 

this rulemaking. 

Commenters stated further, to arrive at its conclusion that 5.7 GW of nuclear capacity is at risk 

of retiring, EPA references EIA's "most recent Annual Energy Outlook" and an April 2014 EIAauthored article, which states: 

"[t]he AEO2014 Reference case assumes an additional 6 GW of generic nuclear retirements from 

2012 to 2019, beyond the six reactor retirements already announced (a total that includes the 

Oyster Creek plant), as higher-cost units face continued economic challenges." 

Commenters stated the results from EIA's AEO2014 Reference case provided online, however, 

only show 4.8 GW of nuclear retirement by 2020. Commenters said at the very least, EPA must 

explain this discrepancy or use the 4.8 GW capacity rather than 5.7 GW. 

Commenters stated penalties associated with existing nuclear power should be eliminated, as 

they are contrary to the goals of the proposed plan. Commenters said the application of 5.8 

percent at-risk nuclear plants to every state with nuclear energy is not appropriately considering 

the actual nuclear power availability in the states with those plants. Commenters said such a 

generalization is not appropriate or accurate, since the risk of closure is almost certainly quite 

high for a minority of plants and quite low for many others. Commenters said states are in the 

best position to evaluate the real risk of closure of any particular plant. 

Commenters stated Michigan currently has four operating nuclear reactors at three plants; three 

nuclear reactors (D.C. Cook 1 and 2, and Palisades) were recently relicensed by the Nuclear 

Regulatory Commission (NRC) to operate another 20 years, and one (Fermi II) is currently under 

review by the NRC for relicensing. Commenters said as such, while Michigan qualifies to claim 

the 5.8 percent 'at risk' provision under Building Block 3, it is unclear as to whether the USEPA's 

proposal provides any incentive worth claiming for the carbon reductions attained through the 

use of nuclear generation, even though nuclear generation does not emit any of the pollutant 

actually being regulated, while natural gas generation does. 

Commenters stated they generally understand the approach proposed by the USEPA to keep 

existing nuclear assets that are at risk of premature shut-downs to continue operating; however 

fail to see how this treatment protects the ability of those existing nuclear assets to continue 

producing base-load, zero-carbon energy. Commenters recommended USEPA to consider 
471 

adopting another methodology as a means to incentivize continued operation of existing nuclear 

assets. Commenters stated possible methodologies include: 

1)Consider all or a substantial percentage of generation from existing nuclear units and assume a 

more reasonable capacity factor reflecting forced/unforced outages in setting the standard; this 

would create a tangible incentive for states with nuclear to use for compliance purposes. 

2)Remove nuclear generation from the existing rate-setting formula, but allow states to reflect 

any retired nuclear units by removing lost generation from prematurely closed nuclear units from 

the denominator of the compliance rate formula. 

Commenters stated they recommend the USEPA consider a 'safety valve' approach in the state 

compliance plan to address compliance risks in certain situations such as: 

1. Retirement of a nuclear unit prior to its licensed life. 

2. Equipment failure or catastrophic event that renders the unit uneconomic to repair or 

replace. 

3. Nuclear uprating projects and relicensing should be able to be credited towards 

compliance as well; the additional generation would be added into the denominator of the 

goals. 

Commenters recommended that the 5.8 percent nuclear generation component should be 

removed from states' interim and final goals. Commenters said the current methodology of 

adding 5.8 percent of the state's 2012 nuclear capacity (operating at a 90 percent CF) into the 

rate-based goal denominator has the effect of needlessly lowering a state's final and interim 

goals. Commenters said the fact that most states with nuclear generation would receive this 

MWh 'credit' with virtually no change to the state's electric industry does not justify the inclusion 

of this element to the BSER; it does not reflect the full extent of a state's nuclear generation. 

Commenters stated 'Forced and unforced' outages were experienced at all four of the nuclear 

plants in Michigan during 2011, 2012, and 2013. Commenters said nuclear units require periodic 

planned outages (unforced) for refueling the reactors, as well as performing routine maintenance 

while the units are down for refueling. Commenters said beyond these planned outages, the 

nuclear units in Michigan also had 'unplanned' or forced outages due, in part, to equipment 

failure, water leaks, and safety-related issues, which resulted in the units being down for 

considerable amounts of time. Commenters said as nuclear units typically operate 24 hours a 

day, seven days a week, 365 days per year due to their inherent design and operation, having 

units down for more than the unforced outages required utilities to obtain replacement energy 

from the MISO market to meet their customer demand during this period. Commenters said this 

replacement energy was comprised of a mix of generation fuel types, most of which was coal 

and gas; hence, the emission profile for 2012 reflects a variance from what the emission profile 

would have been had the nuclear units been operational under their typical CFs. 

Commenters stated the CF of Michigan's nuclear fleet in 2012 was 80.6 percent, which is less 

than the 90 percent CF assumed in the proposed rule. Commenters said outages in April and 

December at Fermi II were largely responsible for lowering this fleet wide CF. Commenters said 
472 

plant outages may be unavoidable and the USEPA's proposed treatment of nuclear generation 

gives little accommodation to this operational reality. Commenters said the current methodology 

assuming a 90 percent CF creates a larger carbon reduction obligation than if the USEPA had 

used 2012 nuclear generation (in MWh and also multiplied by 5.8 percent). Commenters said a 

three-year average (2011 to 2013) of the fleet wide CF would yield 86.4 percent, still less than 

the 90 percent CF assumed in the USEPA's calculation. 

Commenters stated it is important to note, however, that due to increased natural gas generation 

and renewables across the United States, as well as RTO market structure issues, nuclear 

generation is facing economic pressures to compete on a more level playing field and remain 

viable into the future as part of the base-load energy mix. Commenters said indeed, this issue 

bears individual attention by federal regulators (Federal Energy Regulatory Commission [FERC] 

and NRC) beyond the application of an 'at-risk incentive' within the confines of USEPA Section 

111(d) compliance. 

Commenters stated Michigan should achieve, or come close to achieving the emission reductions 

set forth in Building Blocks 3 and 4 if it can also achieve reductions in CO2 emissions equivalent 

to those in Building Blocks 1 and 2. 

Commenters stated Michigan should be able to count the proposed 5.8 percent 'incentive' for atrisk nuclear; however, commenters believe that nuclear generation should be eliminated from 

calculation of the rate-based goals. Commenters recommended that USEPA consider adopting 

another methodology as a means to incentivize continued operation of existing nuclear assets; 

possible methodologies include but are not limited to: 

• Consider all or a substantial percentage of generation from existing nuclear units 

and assume a more reasonable capacity factor reflecting forced/unforced outages 

in setting the standard; this would create a tangible incentive for states with 

nuclear to use for compliance purposes. 

• Remove nuclear generation from the existing rate setting formula, but allow states to 

reflect any retired nuclear units by removing lost generation from prematurely closed 

nuclear units from the denominator of the compliance rate formula. 

Commenters stated with reliability being the watchword in this entire rulemaking, it is essential 

that we facilitate those alternatives that we can truly count on for replacing any and all fossil 

burning plants that are retired. Commenters said renewable sources - with all of the benefits and 

significant potential they offer for the long-term future - will still have relatively limited capacity 

in the big picture over the next several decades. Commenters stated it takes an enormous amount 

of energy to meet our nation's power generation needs; if we are going to retire a large number of 

fossil plants, the replacement plan must be properly crafted to allow nuclear power to play a 

significantly larger role. 

Commenters specifically recommended that the EPA, ensure greater reliance on nuclear energy 

in the plan by fully crediting existing nuclear power plant capacity and promoting additional 

means to assist states in expanding nuclear generation capacity. 
473 

Commenters stated in the Proposed Rule, the nuclear generation component is based on a 

percentage of existing nuclear capacity (6%), which EPA considers at risk of premature 

shutdown. Commenters said EPA based this on the Energy Information Administration's 2014 

Annual Energy Outlook study that concluded about 6% of all U.S. nuclear units would be retired 

for various reasons in the near term. Commenters said EPA assumes 6% of a State's 2012 nuclear 

capacity runs at a 90% capacity factor and then adds those megawatt-hours when calculating a 

State's intensity target. Commenters said states are then allowed to take credit for up to 6% of the 

generation from these units in their compliance calculations, which, in EPA's view, provides 

States an incentive to avoid premature nuclear shutdowns; however, 6% is not an incentive if it 

merely holds a utility or State whole - that is, if 6% of "at risk" nuclear generation is used in 

calculating a State's goal, a 6% credit for compliance simply makes the economics of running the 

"at risk" units neutral at best. Commenters said this is not really much of an incentive to a utility,

if any, to keep an "at risk" unit running. Commenters said if EPA wishes to provide a true 

incentive, it should take the 6% out of a State's goal calculation, but allow States to take 

compliance credit for up to 6% of the generation from 'at risk" facilities." 

Commenters concluded if EPA insists on keeping the 6% in the goal calculation, the Agency 

should allow a higher percentage of existing nuclear generation to be counted in meeting 

individual state goals - for example, 20% instead of 6%. Commenters said while these existing 

nuclear units do not emit any CO2, they do represent significant initial investments by their 

owners. Commenters said these units also require high levels of capital expenditures to maintain 

operations and to comply with ever-evolving safety requirements. Commenters said increasing 

the percentage of nuclear generation counted towards the state goal to 20% would create 

meaningful incentives to keep operating these units as they approach the end of their lives and to 

build new CO2-free nuclear units; however, increasing the nuclear contribution toward meeting 

state goals to 20% should not result in any increase in setting individual state goals. 

Commenters stated that the EPA explains that the goals in the Proposed Rule account for only 

six percent of existing nuclear generation because (according to EPA) six percent of nuclear 

capacity nationwide is "at risk" for premature retirement. Commenters stated that justification 

cannot support the decision to effectively discount nuclear generation by 94 percent. 

Commenters stated that if states are to achieve meaningful emission reductions, it is important 

that all existing nuclear generation remain in operation - yet the proposed treatment of nuclear 

generation inadequately promotes this goal. 

Commenters stated the Proposed Rule's rationale for counting only six percent of nuclear 

generation - namely, that only six percent of nuclear capacity is "at risk" - is neither logical nor 

defensible on its own terms. Commenters said first, whatever amount of capacity is "at risk" 

nationwide, the reality is that "at risk" nuclear facilities are concentrated in a small number of 

states; specifically, at-risk nuclear plants are concentrated in states with competitive markets, 

generally located in the Midwest and Great Lakes regions. Commenters said in those areas, the 

fraction of the fleet that is at risk of early retirement is much greater than six percent. 

Commenters said in other regions, where nuclear plants are owned by regulated utilities, a 

smaller fraction, and possibly none, of the fleet is at risk. 

Commenters stated second, even within the regions where at-risk nuclear plants are concentrated, 

conditions vary significantly from state to state or even within the state. Commenters said 
474 

Illinois, for example, generates more nuclear energy than any other state - 47 percent of the 

state's electricity generation is provided by nuclear facilities; however, many nuclear plants in 

Illinois are facing significant economic pressure, not only because shale gas has driven down the 

prices of both natural gas and electricity, but also because wholesale electricity prices are 

suppressed by an increasing amount of subsidized wind generation in transmission-constrained 

areas. Commenters said these economic pressures are particularly severe for nuclear plants 

located on the western side of Illinois, where wind power imports have overloaded the local 

transmission system and significantly depressed power prices. Commenters said prices in the 

northwest corner of the state are now 25 to 30 percent less than at the Northern Illinois hub; as a 

result of these dynamics, some of Exelon's plants in Illinois are losing money, as discussed 

above. Commenters said if a path to financial sustainability cannot be found, these units may be 

shut down to avoid long-term losses; for example, in the last capacity auction held by PJM, price 

signals pointed toward the premature retirement of the Byron and Quad Cities stations in Illinois. 

Commenters said these units were unable to sell their capacity in the auction, as market prices 

were lower than these plants required to remain financially viable; likewise, market revenues 

have been too low to sustain the Clinton station, which is located in the MISO region. 

Commenters said each of these stations produces far more than six percent of Illinois's nuclear 

generation, and collectively, they generate a combined output of 43,300 GWh each year, which 

is approximately 45 percent of Illinois's nuclear generation and 21 percent of the state's total 

electricity generation. Commenters said these numbers demonstrate that EPA's use of a 

nationwide average fails to account for the many facilities that, in reality, are at imminent risk of 

shutting down. 

Commenters stated third, a scenario in which only six percent of a state's nuclear generation is 

retired is implausible, if not impossible. Commenters said the owner of a nuclear unit cannot 

retire only six percent of the unit, thus, its only choices are to retire the unit completely or keep 

the unit operating. Commenters added that a number of states, meanwhile, have only one nuclear 

unit - which means that any retirement will necessarily be a retirement of 100 percent of the 

state's nuclear fleet; and even in states that contain multiple nuclear units, virtually any single 

nuclear unit will generate more than six percent of nuclear generation. Commenters said the 

Ginna unit in New York is instructive; it is a small unit - only 583 MW - but still amounts to 11 

percent of New York's nuclear generation; thus, if any nuclear unit is prematurely retired, it is 

nearly certain to represent more than six percent of a state's nuclear capacity - indeed, likely far 

more; yet that six percent is the most for which the Proposed Rule's goals account. 

Commenters stated fourth, it is illogical to use a snapshot-in-time figure of nuclear capacity at 

risk as the basis for a rule that will govern the power sector for decades. Commenters said market 

conditions are dynamic: just six years ago, before cheap natural gas and subsidized renewables 

began to drive nuclear wholesale prices down, nuclear plants did not face the economic 

challenges that they face today; thus, a plant that is not at risk today may be at risk tomorrow. 

Commenters said indeed, by potentially spurring further subsidization of renewable and natural 

gas generation, the Clean Power Plan itself may well increase the economic vulnerability of 

nuclear plants. Commenters said EPA's own analysis demonstrates that the proposed guidelines 

have the potential, paradoxically, to increase the financial pressure on existing nuclear plants; 

this will occur if states in competitive markets choose to comply with EPA's emissions rate target 

by subsidizing natural gas or renewable generation in a manner that allows such generation to 

sell electricity for less than its true marginal cost, which would have the effect of artificially 
475 

lowering the market price of electricity for all generators and further undercutting the economic 

viability of existing nuclear plants. 

Commenters stated finally, even if 94 percent of nuclear capacity truly is safe from early 

retirement, and will remain so throughout the foreseeable future, that still is not a reason to give 

states credit for only six percent. Commenters said even if nuclear capacity were not at risk, 

counting it in a state's initial and target emissions rate or in a state's compliance calculation could 

do no harm: although the state would be responsible for preserving the nuclear capacity, it would 

by definition be preserved without further action from the state. Commenters said treating 

nuclear generation as safe when it is actually vulnerable, on the other hand, would insufficiently 

incentivize a state to preserve it - and, as described above, could result in the premature 

retirement of a critical carbon-free resource, resulting in the expansion of a state's carbon 

footprint. 

Commenters stated that no nuclear generation in Arkansas was known to be "at risk," and that 

the 5.8% assessment regarding "at risk" nuclear that the proposed Rule assumes for each state 

should be removed from the Arkansas state goal computation. 

Commenters stated they know of no nuclear generation in Arkansas that is considered or has 

been identified as 'at risk,' as all nuclear generation is currently operational and does not appear 

threatened; therefore, the 5.8% assessment regarding 'at risk' nuclear that the proposed Rule 

assumes for each state should be removed from the Arkansas state goal computation. 

Commenters said this incorrect assumption only serves to artificially lower Arkansas' target 

emission rate, which compounds the effort and money Arkansas will have to expend to achieve 

its already disproportionate 44% emissions reduction. Commenters said setting aside the 

question of whether a premise that 'at risk' nuclear generation could be used to reduce emissions 

from a fossil unit has any legal basis, 'at risk' nuclear should only be a factor for states that whose 

nuclear capacity is truly 'at risk.' Arkansas is not one of those states. 

Commenters stated contrary to the proposed Rule's assumption, the nuclear units in Arkansas are 

currently not 'at risk' of shutting down; this inaccurate assumption artificially lowers Arkansas's 

target emission rate. 

Commenters stated that the factor six percent of states' nuclear generation into states' emission 

rate goals penalizes states and companies that invested in nuclear generation, because existing 

plants will eventually retire and must be replaced by emission-generating plants. Commenters 

recommended that the EPA should allow states to review and amend their emission rate goals 

based on circumstances arising after finalization of the rule, such as when a nuclear license is not 

renewed. 

Commenters stated that the EPA's assumption of 5.8 percent "at risk" in the standard-setting 

calculation does not accurately represent nuclear units that are "at risk" of premature retirements 

due to market conditions, because some states are more impacted than others. 

Commenters recommended that any megawatt hours from an individual nuclear unit that exceeds 

the national average capacity factor or that particular unit's lifetime capacity average should be 

available annually for compliance. 
476 

Commenters stated that keeping the 5.8 percent nuclear generation in the standard-setting 

formula could have unintended effects on emissions if a nuclear unit shuts down for an extended 

period. Commenters stated given the various roles of nuclear generation in each state, including 

which plants are 'at-risk', EPA should provide states several options to consider when including 

nuclear generation in its goal setting formula; for example: 

• EPA could remove existing nuclear from the rate-setting formula, but require 

states to reflect any lost nuclear when calculating compliance (e.g., by subtracting 

the lost output from any prematurely closed existing nuclear units from the 

denominator of the compliance rate formula); in this context, premature 

retirements would include those that occur before the end of the current licensing 

period, with an exception for catastrophic malfunctions where repair costs exceed 

the emissions benefits. 

• States with existing nuclear generation could be authorized to determine how 

much should be included in goals (including determining their own levels of "at 

risk" in-state nuclear generation), recalculate the goals, and then allow this 

existing zero-emissions generation to be used for compliance." 

Commenters continued if nuclear generation is included in a state's goal, Commenters 

recommends that EPA allow states to incorporate 'safety valves' into compliance plans to 

eliminate compliance risk in certain circumstances, such as: 

• Retiring a nuclear unit at the end of its licensed life; and/or 

• Equipment failures and/or damage to a plant so extensive that repair and restart 

are not justified. 

Commenters stated states should determine the level of risk they are willing to accept as it relates 

to the level of inclusion of nuclear units in their targets and compliance plans; nuclear uprates 

and license extensions should also be allowed in a state's compliance plan. 

Commenters stated that the EPA's proposed treatment of existing nuclear capacity is 

inappropriate and must be changed. Commenters stated in the first instance that a standard of 

performance for fossil fuel-fired EGUs cannot be based on actions taken beyond the source 

itself. Commenters said this would include the consideration of any amount of nuclear generation 

as BSER. Commenters said while nuclear power is the single greatest CO2 mitigation option 

available in the power sector, that fact does not authorize the EPA to use it in the setting of CO2 

emission standards for fossil fuel-fired EGUs. Commenters said with respect to setting emission 

standards for fossil fuel-fired EGUs, it is irrelevant whether a state has or does not have nuclear 

capacity; it has nothing to do with controlling emissions from existing EGUs, nor should it. 

Commenters said there is no basis under the CAA for setting different emission standards for 

identical EGUs that just happen to be in two different states, one with nuclear capacity and the 

other without. 

Commenters stated in the second instance, putting aside the fact that the inclusion of generation 

from existing nuclear units as a component of BSER for fossil fuel-fired EGUs is not authorized 
477 

by the CAA, the EPA's proposal to include 5.8 percent of existing nuclear capacity as BSER and 

reflect the associated amount of MWh generation in state goal calculations is without 

merit. Commenters said the EPA must not finalize any guidelines for fossil fuel-fired EGUs that 

includes any amount of existing nuclear generation in its BSER determination and calculation of 

state goals. 

Commenters stated the notion that 5.8 percent of any existing nuclear plant is at risk of 

premature retirement is irrational. Commenters said the EIA's Annual Energy Outlook cited in 

the EPA proposal which projected an additional 5.7 GW of unspecified nuclear capacity 

reductions to the nuclear fleet is not evidence that any amount of any existing nuclear unit is at 

risk of premature shutdown and therefore neither supports nor authorizes the EPA's proposal in 

this regard. Commenters said even if one were to assume for sake of argument that the EIA 

projection is reasonable, it is certainly not reasonable for the EPA to then take that information 

and assume that 5.8 percent of every existing nuclear unit in the country is at risk of premature 

retirement. 

Commenters stated it is generally understood that those existing nuclear generating units 

potentially at risk of premature retirement are concentrated in a relatively small number of states 

where the units operate in competitive electricity markets and are exposed to low wholesale 

electricity prices. 

Commenters stated the majority of existing nuclear capacity is not exposed to those economic 

pressures and are not at risk of premature shutdown. Commenters said to be correct, the 5.8 

percent factor should be higher in states with units "at risk" and zero elsewhere. Commenters 

said it appears the EPA simply took the 5.8 percent value as a convenient way to provide some 

incentive for continued operation of nuclear power plants; ironically, most plants are not in need 

of such an incentive and the ones that are potentially "at risk" are not helped by the arbitrary 5.8 

percent factor. 

Commenters stated the EPA's GHG Abatement Measures Technical Support Document states 

that [I]ncreasing the amount of nuclear capacity relative to the amount that would otherwise be 

available to operate is a technically viable and economically efficient approach for reducing CO2 

emissions from affected fossil fuel-fired EGUs. Commenters said this statement suggests that the 

EPA's proposed treatment of existing nuclear capacity would in fact avoid the premature 

retirement of existing nuclear capacity; there is, however, no basis for such an 

assertion. Commenters said in the first place, the EPA has not identified any existing nuclear 

unit that it believes is at risk of premature shutdown; in the second place, the EPA can provide 

no evidence that its proposal, if implemented, would avoid the premature shutdown of a single 

MW of existing nuclear capacity in the country; but even if the EPA were able to make such a 

demonstration, it would still not be authorized to include existing nuclear in its BSER 

determination for fossil fuel-fired EGUs or factor any amount of existing nuclear capacity into 

the state goal calculation. Commenters said section 111(d) of the CAA applies to existing fossil 

fuel-fired EGUs. 

Commenters stated Duke Energy owns and operates the largest fleet of regulated nuclear units in 

the country. Commenters said the 11 operating units are located in North Carolina and South 

Carolina and are the first units to dispatch because they are their lowest cost base load 
478 

generation; these units are not currently at risk of premature retirement and it is inappropriate for 

the EPA to include any portion of this nuclear capacity in the goal setting for North Carolina or 

South Carolina. 

Commenters stated the only thing the EPA proposal achieves is to make the goals for North 

Carolina and South Carolina, and every other state with existing nuclear, more stringent than 

they otherwise would be, and introduce in those states an additional compliance risk if an 

existing nuclear unit or units are not able to operate at the assumed 90 percent annual capacity 

factor. Commenters said there is also the issue of whether any existing nuclear units will be 

granted a license extension beyond the expiration of their current licenses. Commenters said 

nuclear power reactor license extension beyond sixty years has not been done in the United 

States, so there is uncertainty associated with the technical and economic feasibility of doing 

so. Commenters said with the EPA proposal, if an existing nuclear unit's current license is not 

extended for whatever reason, the practical effect would be to make a state's goals more stringent 

because the state would lose a significant amount of non-CO2 emitting generation that was 

factored into its goal computation. Commenters said if a license were not extended, the lost 

generation would have to be replaced with an equal amount of new non- emitting generation, 

and/or other steps would have to be taken to offset the loss of the nuclear 

generation. Commenters said a similar situation would arise if an event occurred at an existing 

nuclear unit that could not be overcome and the unit was forced to shut down. Commenters said 

the additional cost to consumers in states that would need to comply with essentially a more 

stringent goal could be significant. Commenters said factoring any amount of existing nuclear 

generation in a state's goal computations inappropriately builds compliance risk into the program 

when the units eventually shut down. 

Commenters stated under the EPA's Proposed Guidelines (absent the contribution of "nuclear at 

risk" in Building Block 3), there is already an incentive for states to keep nuclear power plants 

operating; absent the adjustment for nuclear at risk, the actual effect of a nuclear plant closure 

would be an increase in the numerator of the greenhouse gas emissions rate equation, if it 

resulted in more generation from affected coal and/or NGCC units to make up for the missing 

nuclear generation, resulting in a higher emissions rate. Commenters said therefore, there is no 

need to include the arbitrary 5.8 percent factor to the calculation to make shutting down nuclear 

more undesirable from a CO2 emissions perspective because it already is undesirable. 

Commenters stated if the EPA finalizes its proposal and continues to include existing nuclear 

units in state goal computations, it must include safety valves that would allow for a state's goal 

to be recalculated without the existing unit if the unit continued to operate through the end of its 

current license period but its license was not extended for whatever reason, in the event of 

premature shutdown due to equipment failure and/or damage to the plant where repair cost is not 

justified, or where the cost of maintaining the plant in compliance with regulation is not 

economic given the unit's remaining useful life. 

Commenters stated with respect to the assumption of a 90 percent capacity factor for nuclear 

power plants going forward, it is challenging but generally consistent with recent performance of 

nuclear power plants in the United States as a whole; however, there is no guarantee of 

maintaining that performance in the future with an aging fleet of plants. Commenters said 

obviously a major equipment failure or regulatory shutdown at one or more units can adversely 
479 

and significantly impact capacity factor; any final guidelines that include existing nuclear in state 

goal calculations at a 90 percent capacity factor should make allowances in compliance in the 

event of unanticipated losses of nuclear generation. Commenters said for example, states should 

not be penalized for a nuclear unit's failure to operate at 90 percent capacity factor unless the 

plant was intentionally shut down or operated at less than full power when more power could 

actually have been generated from the unit. 

Commenters stated since EPA only give 6 percent to nuclear, that is a perverse incentive to say, 

okay, if we shut down a plant, we're only losing this like marginal percentage of its megawatt 

hours; and if we replace it with natural gas, then you're adding extra CO2, but you're adding 

more megawatt hours; and you could actually achieve your goal more easily by doing so, which 

would, in effect, increase CO2 emissions. 

Commenters stated so this way you're looking at the carbon intensity could actually be used by 

states to meet their goals by shutting down clean power plants like nuclear and replacing it with 

natural gas. 

Commenters stated that the use of 6 percent "at risk" value, given the math, will give utility 

companies an incentive to replace the nuclear plants with natural gas plants or other fossil-fuelburning plants, thus raising the carbon emission, but lowering their pounds of CO2 per 

megawatt, based on this equation. 

Commenters stated for over 30 years, however, Alabama Power's two nuclear units at Plant 

Farley have operated safely, providing affordable carbon-free electricity to 

customers. Commenters said recently, both units, along with other nuclear units in the state of 

Alabama, received 20-year operating license renewals, which clear indicate they are not at-risk 

nuclear units. Commenters said to generically include such an assumption in Alabama's 

emission rate goal calculation results in more stringent targets, thus limiting operational 

flexibility across the entire generation fleet. 

Commenters stated as a practical matter, the EPA's approach is arbitrary and the proposed "atrisk" nuclear provision results in more stringent goals for states with existing nuclear capacity 

than for states without. Commenters said in addition, EPA's approach fails to recognize that even 

if a nuclear unit does not shutdown prematurely, it will still be required to shut down upon 

expiration of its operating license creating a need for replacement generation. 

Commenters said excluding existing nuclear from the goal-setting calculation, but allowing 

states to take credit for a portion of their nuclear generation for compliance purposes, would 

provide such an incentive. Commenters said if the at- risk nuclear provision is retained in the 

final goal-setting calculation, the EPA should allow states' goals to be adjusted upon expiration 

of nuclear plant operating licenses. 

Commenters stated that EPA's treatment of nuclear generation in Arizona is arbitrary. 

Commenters further stated there is no evidence whatsoever that the Palo Verde Generating 

Station is at risk of closing prematurely, certainly not before the expiration of its extended 

operating licenses in 2047. Commenters said the effect of EPA's adjustment in the Proposed 
480 

Carbon Rule is to lower Arizona's lbs. CO2/net MWH goal by 3 percent; EPA's assumption that 

the Palo Verde Nuclear Plant is at risk for purposes of goal calculation is arbitrary. 

Commenters recommended a better way to incent the continued operation of existing nuclear 

plants is to allow states to include the output from existing nuclear plants above an established 

threshold as a compliance option in state compliance plans, thereby giving states with existing 

nuclear generation additional flexibility in developing their compliance plans. Commenters said 

one way to do this would be to establish a threshold capacity factor for existing nuclear plants. 

Commenters said to the extent the nuclear plant is able to operate above that capacity factor, the 

incremental generation would be included as a component of Building Block 3. Commenters said 

operation below the threshold capacity factor would have no impact on the state's compliance. 

Commenters stated they are aware that other parties may be suggesting an approach like this and 

may include specific recommendations with respect to the threshold to be used. 

Commenters stated based on an EIA report, EPA has concluded that approximately six percent 

of nuclear capacity is 'at-risk' of shutdown due to continued economic challenges; therefore, EPA 

proposed to allow approximately six percent of the nuclear capacity within any state in which 

nuclear plants are located to be counted towards achievement of the state emission rate goals. 

Commenters continued however, EPA also used the 'at-risk' nuclear to set the state's emission 

rate goals; therefore, nothing is really gained from use of this carbon-free source of generation. 

Commenters said all existing nuclear power plants will eventually close. Commenters said when 

this occurs, states will have to find ways to replace a large amount of zero-carbon generation 

with other zero-carbon generation or be at risk of being in non-compliance with meeting their 

111(d) goals. Commenters said because there currently are no cost-effective mechanisms to 

achieve this, the 'at-risk' nuclear generation should not be included in states' carbon emission rate 

goals; the six percent of 'at-risk' nuclear generation should be eliminated from the final rule, and 

for states with nuclear generation, the state goals should be adjusted upward by approximately 

six percent. 

Commenters also stated EPA clearly recognizes the importance that nuclear generation has on 

reducing and avoiding carbon emissions; in the Proposal, EPA stated that "[i]ncreasing the 

nuclear capability relative to the amount that would otherwise be available to operate is therefore 

a technically viable approach to support reducing carbon emissions from affected fossil fuel-fired 

EGUs. Commenters stated they are in full agreement and offer the following as a means of 

ensuring nuclear generation is incentivized to reduce carbon emission rates. Commenters said 

while EPA states in the Proposal that it estimated a 90 percent average utilization rate for U.S. 

nuclear units, APS has different information. Commenters said based on industry data, the 

average lifetime capacity factor of the 100 nuclear plants currently operating is 81.6 percent. 

Commenters said of these, based on the three-year average between 2011to 2013, the plants in 

the fourth quartile only operated at an average capacity factor of 70.8 percent. 

Commenters concluded therefore, to encourage nuclear generation to operate at peak 

performance, EPA should allow the energy from any nuclear power plant in excess of the 80.3 

percent average lifetime capacity factor for all current nuclear plants to be used for compliance 

with the states' carbon emission rate goals. Commenters said but because this is meant to be an 

incentive for peak performance of the U.S. nuclear fleet, none of the nuclear generation should 
481 

be used to calculate the states' goals. Commenters said this nuclear generation, like renewables, 

is a zero carbon-emitting generation resource; this approach adds flexibility to the program and 

assists the states that have nuclear capability in achieving their final carbon emission rate goals. 

Commenters stated that this BSER block does not have the effect of reducing emissions, and is 

instead simply a method of avoiding potential increases in emissions. Therefore, it is not an 

emission reduction system, and should not be included. Commenters stated the EPA has 

designated 'At Risk' nuclear as a part of Building Block 3 and concluded that preserving that 

nuclear generation would help reduce CO2. Commenters said EPA has thus factored in the zero 

emissions from these at risk units to reach the final state goals. Commenters said in South 

Carolina, the costs of nuclear are already included in rates by Public Service Commission order 

and are not at risk, which is a primary reason for retirement; additionally, the CO2 emissions 

limit provides ample incentive not to retire nuclear plants as any retirement will require 

replacement with non-carbon generation. Commenters said inclusion of the 5.8 percent 'At Risk' 

component into state plans will simply provide a penalty to states which do opt to retire nuclear 

generation. Commenters said unlike the other BSER blocks, this block does not have the effect 

of reducing emissions; it is simply a method of avoiding potential increases in emissions. 

Commenters said it is not an emission reduction system and should not be included. 

Commenters stated EPA proposes to make states' emission rate goals more stringent by factoring 

six percent of states' nuclear generation into states' emission rate goals. Commenters said this 

would penalize states and companies that invested in nuclear generation because existing nuclear 

plants will eventually retire and be replaced by emission-generating plants. Commenters said 

States would be required to find a way to offset these unavoidable increases in emissions. 

Commenters said to eliminate this penalty, EPA should allow states to review and amend their 

emission rate goals based on circumstances arising after finalization of the rule, such as when a 

nuclear license is not renewed. 

Commenters stated over the past decade, there has been a renewed interest in nuclear power as 

an alternative to fossil fuels; yet despite greater acceptance of this emissions-free energy 

resource, nuclear power faces a host of obstacles and uncertainties that could not only inhibit its 

expansion, but will accelerate retirements from the existing fleet. Commenters said EPA's 

modeling fails to adequately consider the challenges facing our existing nuclear fleet. 

Commenters recommended that the EPA remove the "At-Risk" nuclear generation from the goal 

setting methodology. Commenters stated however, experience in the RGGI region also suggests 

that financial and other issues need to be taken into consideration when evaluating or forecasting 

the contribution of nuclear resources, particularly in light of the transformation of the natural gas 

market in recent years. Commenters said in the rate-based goal-setting methodology at issue 

here, EPA's proposal attempts to incentivize states to retain existing nuclear generation through 

the inclusion of an at-risk assumption in the goal computation methodology. 

Commenters concluded while additional incentives may be necessary (especially at the federal 

level) EPA should remove the at-risk assumption from the goal computation methodology since 

its design neglects to account for the full range of possible circumstances - including safety (e.g. 

safety upgrades such as those required in response to the Fukushima flooding and reactor 

meltdown) and environmental concerns (e.g. effluent limits and cooling water intake structure 
482 

requirements under Clean Water Act Sections 316(a) and 316(b), respectively) - in which a 

nuclear resource may be pressed into retirement. 

Commenters recommended that the EPA remove the "At-Risk" nuclear generation from the goal 

setting methodology. Commenters continued if EPA, however, opts to retain its proposed 

approach, then EPA should consider providing an 'off-ramp' by which the nuclear generation 

component would be removed from a state's goal computation upon expiration of an existing 

license or following an accident that translates into cost-prohibitive repairs. 

Commenters recommended that the EPA remove "At-Risk" nuclear generation from the goal 

setting methodology. Commenters stated although a significant portion of Connecticut's 

generation comes from nuclear generation, Connecticut objects to crediting existing or underconstruction nuclear generation as an off-set to existing fossil generation; such a proposal would 

significantly reduce the stringency of the CPP and is unnecessary. 

Commenters stated that the EPA assumes that 5.8 GW of existing nuclear capacity is 'at-risk' and 

that it is reasonable to think states can cause that at-risk capacity to continue to operate in 2029 

and beyond; however, EPA does not identify the specific reactors, or even the states in which 

this at-risk capacity resides. Commenters said instead they simply factor the 5.8 GW of capacity 

at a national level into each state's goal calculation by multiplying the state's existing nuclear 

generation by 6%. Commenters said this leads to the absurd result that the amount of 'at-risk' 

nuclear capacity in any state is much less than the smallest reactor in the state. Commenters said 

as with the RE and EE goals, EPA failure to do state-specific analyses of its nuclear component 

results in illogical and inequitable results. 

Commenters stated significant uncertainty remains as to whether existing nuclear units would be 

permitted to operate beyond their licensed 60 year lifetimes; permitting of nuclear reactors is 

under the authority of the NRC and is not under the control of the states. 

Commenters stated that the Proposed Rule does not provide adequate incentives for states to 

support the continued operation of zero emission sources, in particular nuclear generation. 

Commenters recommended changes to the rule, including: 

• Remove the 6% "at risk" MWh calculation from each applicable state's emission 

goal calculations, and instead create a meaningful goal-setting incentive for states 

to support the continued operation of existing nuclear units; 2) 

• Count all post-2012 new plants and uprates toward compliance (for new plants or 

uprates with an in-service date during or after the baseline year or period); in 

other words, grant compliance credit (add MWh of generation to the denominator 

of a state's compliance demonstration) for the unit's output once its license 

extension is effective; 

• Treat all units relicensed during or after the baseline year or period as new units 

during their license renewal period; and 
483 

• Allow states to include all nuclear generation from existing units above a 

reasonable historic industry capacity factor, such as 81.6%, in the denominator of 

compliance calculations, so that high-performing units gain compliance credit 

Commenters stated the scientific consensus makes it clear that a ton of CO2 (or GHG emissions) 

avoided today is as important as the ton avoided tomorrow (either in 2020 or in 2030); as a 

consequence, the retention of zero-CO2-emitting power generation resources currently operating 

is as important as the introduction of new zero-CO2-emitting power generation resources in the 

future. Commenters said conversely, the potential loss of nuclear zero-CO2-emitting power 

generation resources (through failure of EPA rulemakings such as this, or markets, to reflect the 

value of the zero emissions attribute) means that the addition of new zero-CO2-emitting supply 

serves only to offset or replace the lost nuclear zero-CO2 generation rather than to help put the 

state on a pathway toward significantly lowering the overall carbon profile of its power supply. 

Commenters stated realistically, replacing one MW of nuclear capacity likely would require 

much more than a single MW of nameplate capacity from another zero-carbon resource to 

provide equivalent energy and capacity to the system. Commenters said in light of the high 

capacity factor and baseload character of existing nuclear plants and the intermittent character of 

wind and solar, to obtain the same amount of energy and capacity from wind and solar as the 

energy and capacity of a 1,000 MW nuclear plant would require approximately 1,700 MW of 

wind plus another 2,600 MW of solar. Commenters said this amount of replacement capacity 

would only offset the zero-carbon power lost by a nuclear unit that were to retire, whether ahead 

of or concurrent with the end of its operating license. Commenters said to make actual progress 

toward reducing the overall GHG emissions from power generation would require more 

renewables beyond the amount identified above; therefore, the cost of reducing GHG emissions 

from the power sector will be mitigated to the extent that safely-operating nuclear plants remain 

in operation as long as possible under NRC regulation. Commenters said because one of the 

important axioms of climate change is that emissions of GHG are long-lived in the atmosphere, 

the goal of protecting the continued existence of zero-carbon supply today and avoiding its 

replacement with fossil-fueled electricity in the near term will reduce the cumulative amount of 

emissions into (and concentrations of GHG in) the atmosphere from United States power plants. 

Commenters said to that end, it is essential that if the Proposed Rule incorporates zero-emission 

source deployment as part of BSER, it also provides support for the retention of existing nuclear 

units throughout the country. 

Commenters urged EPA to make the following changes in its treatment of nuclear power in the 

Proposed Rule, if Building Block 3 remains a part of the proposal: 

• Remove the 6% "at risk" MWh calculation from each applicable state's emission 

goal calculations, and instead create a meaningful goal-setting incentive for states 

to support the continued operation of existing nuclear units; 

• Count all post-2012 new plants and uprates toward compliance (for new plants or 

uprates with an in-service date during or after the baseline year or period); in 

other words, grant compliance credit (add MWh of generation to the denominator 

of a state's compliance demonstration) for the unit's output once its license 

extension is effective; 
484 

• Treat all units relicensed during or after the baseline year or period as new units 

during their license renewal period; and 

• Allow states to include all nuclear generation from existing units above a 

reasonable historic industry capacity factor, such as 81.6%, in the denominator of 

compliance calculations, so that high-performing units gain compliance credit for 

their host states. 

Commenters recommended if the EPA nonetheless does decide to retain credit for uneconomic 

nuclear capacity in Building Block 3, that EPA require states to include in their state plans a very 

high showing that the claimed nuclear capacity: (1) is actually 'at risk' of closing early, and (2) 

will be predominantly replaced by fossil-fuel generation. 

Commenters continued first, many factors go into each nuclear plant's viability, including 

nuclear waste management and disposal costs, and regulatory requirements outside of Section 

111(d). Commenters said electricity market dynamics are constantly changing. Commenters said 

EPA should require clear proof from states that specific nuclear capacity represented by a 

specific nuclear power plant is truly "at risk" of closing early before allowing states to claim 

credit for saving that capacity. Commenters said the assessment of "at risk" should not include 

costs associated with managing, transporting and remediating nuclear waste or consider costs 

associated with nuclear plant decommissioning. 

Commenters stated second, EPA assumes for the purposes of this rule that the 5.7 GW of 

projected capacity reductions at nuclear power plants would be replaced by "new" natural gas 

combined-cycle capacity with an assumed emissions intensity of 800 lbs. of CO2/MWh, or by 

the national 'power system,' using a projected 2020 average U.S. power sector emissions 

intensity of 1127 lbs. of CO2/MWh. Commenters said these assumptions are inappropriate; the 

avoided emission rate should be determined based on the least-cost generation alternative, not on 

general assumptions about natural gas combined-cycle capacity or national average emission 

intensities. Commenters said for example, nuclear generation could likely be replaced more 

cheaply through renewable energy than by building new coal-fired power plants or re-dispatch of 

coal or gas-fired power plants. Commenters said saved nuclear capacity should not be credited as 

though it would be replaced by carbon-intensive generation if that is not actually the case. 

Commenters stated if a state is permitted to earn credit for avoiding retirement of more than 

5.8% of nuclear generating capacity based on EPA's determination that a higher level of 

generation is truly 'at risk,' the target for the state must be strengthened to reflect that higher level 

of nuclear generation being included in the adjusted baseline calculation; in other words, if 

BSER is expanded to include greater opportunities for compliance credit based on saving more 

nuclear capacity, states cannot avoid making the emission reductions that reflect the level 

achievable under the original BSER; states should reduce emissions based on the original BSER, 

as well as what is achievable by saving the extra nuclear capacity. 

Commenters stated EPA should remove the preservation of nuclear capacity from Building 

Block 3. Commenters said EPA should not encourage states to prop up old and uneconomic 

nuclear plants, which produce highly radioactive waste material and catastrophic nuclear risk, as 

a means of meeting their Section 111(d) goals; instead, the EPA standards should encourage 
485 

states to look toward the future and focus on renewable energy and energy efficiency 

development and implementation. Commenters said through increased focus on RE and EE, 

states can meet their goals without relying on saving 'at risk' nuclear capacity. Commenters said 

if EPA nevertheless decides to allow states to save 'at risk' nuclear capacity, then the state should 

have to conclusively prove that the capacity is truly 'at risk' of closing soon and being replaced 

by much higher carbon-polluting fossil-fuel generation. 

Commenters stated it is generally understood that existing nuclear generating units at risk of 

premature retirement are concentrated in a relatively small number of states where the units 

operate in competitive electricity markets and are exposed to low wholesale electricity prices. 

Commenters said the majority of existing nuclear capacity is not exposed to those economic 

pressures and is not at risk of premature shutdown; in addition, EPA's proposal, if implemented, 

likely would not avoid the premature shutdown of an existing nuclear unit. 

Commenters stated EPA's assumptions regarding nuclear energy assets at risk appears to be 

based on the prorated average of electric output of nuclear facilities in danger of ceasing 

operations. Commenters said EPA has incorporated at-risk nuclear in the calculation of the 

mandatory state emission limiting goals; however, in the case of Florida, the proposed closing of 

Crystal River Unit #3 is an established fact and therefore inclusion of a nuclear at-risk variable in 

the Florida emission reduction goals is inappropriate. 

Commenters stated that the EPA's treatment of existing nuclear capacity was inconsistent with 

the agency's treatment of other large existing sources of zero-carbon energy such as hydroelectric 

dams and RE facilities. Commenters recommended that the EPA should simply exclude all 

existing zero-carbon facilities (including nuclear, hydroelectric, and RE facilities) from its 

calculation of states' emission goals. Commenters also stated that preserving existing nuclear 

capacity will not allow existing EGUs to reduce their emissions; therefore, under the language of 

section 111, the preservation of existing nuclear generation cannot be considered a "system of 

emission reduction." Commenters concluded by recommending that, if the EPA does not remove 

the at-risk component from state goals, the EPA should establish a mechanism to reduce the 

stringency of states' emission rate goals at the time of license expirations, or where an existing 

nuclear plant is forced off-line for extended periods of time. 

Commenters stated EPA's proposal to incorporate approximately 5.8% of each state's existing 

nuclear capacity (which EPA calls 'at risk' capacity) in calculating the state's emission goal is 

inappropriate for a number of reasons. Commenters said EPA's treatment of existing nuclear 

capacity is inconsistent with the agency's treatment of other large, existing sources of zerocarbon electricity such as hydroelectric dams and RE facilities. Commenters said both 

hydroelectric facilities and existing RE facilities also face market and non-market challenges that 

could lead to reduced capacity or shutdown in future years. Commenters said despite this 

similarity, EPA has not proposed to penalize states that retire existing hydroelectric or RE 

capacity by incorporating an assumption about 'at risk' hydroelectric or RE generation into state 

goals. Commenters said as with under construction nuclear generation, EPA should not 

arbitrarily treat zero-carbon generation from existing nuclear facilities differently from other 

zero-carbon generation; to fix this discrepancy, EPA should simply exclude all existing zerocarbon facilities (including nuclear, hydroelectric, and RE facilities) from its calculation of states' 

emission goals. 
486 

Commenters stated EPA's proposal to penalize states that fail to preserve their nuclear capacity is 

also flawed because many states have little or no control over the decision as to whether nuclear 

capacity will continue to operate. Commenters said states have no control over whether the 

Nuclear Regulatory Commission (NRC) grants or denies an existing facility's application for a 

license extension. Commenters said the NRC is currently issuing 20-year license extensions to 

facilities that have reached the end of their initial 40-year license, but has yet to determine 

whether it may issue longer extensions under existing federal law. 

Commenters stated furthermore, EPA's designation of 'at risk' nuclear generation as a component 

of BSER exceeds the agency's authority under the Act; even under EPA's reading of the statute, 

the preservation of existing nuclear capacity cannot even meet EPA's strained definition of the 

term. Commenters said simply put, preserving existing nuclear capacity will not allow existing 

EGUs to reduce their emissions; rather, the preservation of existing nuclear capacity will only 

allow existing EGUs to continue operating at the same levels as in the past; therefore, under the 

plain language of section 111, the 'preservation' of existing nuclear generation cannot be 

considered a 'system of emission reduction.' 

Commenters stated finally, the inclusion of at-risk nuclear generation in states' emission goals is 

unnecessary to encourage states to preserve their existing capacity; the imposition of CO2 

emission limits on the power sector will naturally incentivize states and affected entities to favor 

lower-carbon power sources, including existing nuclear facilities. Commenters said in addition, 

states that fail to preserve their nuclear capacity will be incentivized to replace that lost capacity

with other low-carbon generation or EE because replacement of lost zero-carbon generation with 

fossil-fueled generation would make it more difficult for the state to meet its emission target. 

Commenters concluded that, for these reasons it is inappropriate to include 5.8% of existing 

nuclear capacity in the goal computation for each state and Commenters urged this assumption to 

be removed from building block 3. Commenters said if EPA does not remove the at-risk nuclear 

component from building block 3, EPA should establish a mechanism to reduce the stringency of 

states' emission rate goals at the time of license expirations; similarly, the same adjustment 

mechanism should be available to adjust the stringency of the states' emission targets in those 

cases where an existing nuclear plant is forced off-line for extended periods of time. 

Commenters stated keeping existing nuclear electricity generation operating and building new 

facilities is vital. Commenters said the units under construction should count toward future 

compliance. Commenters said the decision to recognize only 6% of the existing fleet as "at risk" 

is too general and too conservative, and puts those utilities that own nuclear units at more risk of 

future compliance problems. 

Commenters stated that the EPA's approach to quantifying emission reductions from "at-risk" 

nuclear generation is problematic for several reasons. First, "although retirement of nuclear units 

in some states could lead to increased generation from existing or new fossil fossil-fueled 

generation sources, the mere preservation of some existing nuclear capacity cannot reduce 

emissions below the historic baseline emission levels." Commenters also stated that the EPA's 

approach of proportioning "at-risk" nuclear generation equal across all states with nuclear 

reactors was problematic, because: 1) it does not match the economic and regulatory reality in 

most, if not all states, and 2) nuclear facilities often serve customers and utilities in neighboring 
487 

states, so that the decision to retire a nuclear facility may not be entirely under the control of the

state in which it is located. Commenters recommended that the EPA "abandon this component of 

the Proposed Rule, even if it retains its questionable 'beyond-the-unit' interpretation of BSER." 

Commenters stated EPA's approach to quantifying emission reductions from preservation of 'atrisk' nuclear generation is problematic for several reasons; first the commenters fail to see how 

'preserving' existing nuclear capacity can meet the statutory definition of a 'system of emission 

reduction.' Commenters said at best, the preservation of nuclear capacity at historic levels would 

allow affected units to maintain their own historic emission levels. Commenters said although 

the retirement of nuclear units in some states could lead to increased generation from existing or 

new fossil-fueled generation sources, the mere preservation of some existing nuclear capacity 

cannot reduce emissions below the historic baseline emission levels. Commenters said EPA's 

inclusion of this component of BSER introduces additional legal risk for the proposal. 

Commenters continued just as problematically, EPA's approach to 'at-risk' nuclear generation 

would apportion the risk of nuclear retirement proportionally across all states with nuclear 

reactors, regardless of the actual risk that generation in that state would retire. Commenters said 

this approach is flawed for at least two reasons; first, due to wide differences in economic and 

regulatory conditions in different parts of the country, units in many states are not at any risk of 

retirement, while units in other states are more clearly at risk. Commenters said thus, EPA's 

proposed approach does not match the economic and regulatory reality in most, if not all, of the 

states with nuclear reactors. Commenters said second, nuclear facilities often serve customers 

and utilities in neighboring states; therefore, the decision to retire a nuclear facility for economic

reasons may be entirely beyond the control of the state in which the facility is located. 

Commenters said thus, the interstate nature of electricity markets and the widespread inability of 

individual states to control whether a nuclear facility in their state will remain in operation make 

EPA's approach unfair and untenable. In light of these flaws, the commenters urged EPA to 

abandon this component of the Proposed Rule, even if it retains its questionable 'beyond-the-unit' 

interpretation of BSER. 

Commenters stated historically low natural gas prices coupled with energy policy that favors 

renewable energy have priced nuclear generation out of some markets. Commenters said the CPP 

is an example of energy policy clearly favoring renewable energy. Commenters said the EPA has 

calculated emission standards under the CPP using a Best System of Emission Reduction 

(BSER). Commenters said the BSER provides 5.8% credit to a generator's 2012 nuclear capacity 

in states with nuclear generating facilities; a thorough analysis of this portion of the CPP 

conducted by the University of Tennessee found that the CPP incentivizes at least 15 states to 

close nuclear capacity and replace it with natural gas generation. 

Commenters stated that the BSER "six percent factor" should be removed from the state goal 

calculation. Commenters stated that the Callaway and Wolf Creek nuclear units in Missouri and 

Kansas, respectively, were both expected to remain in service, and that the 6 percent factor is a 

detriment should either nuclear unit in any given year generate less energy than what EPA 

assumed in setting either state's emission rate target, requiring the state, more specifically the 

units in the state, to offset any shortfall. 
488 

Commenters recommended that nuclear power uprates between 2012 and 2020 should be treated 

similarly to renewable energy added in this period, and credited towards state goals. Commenters 

also recommended that the EPA should encourage continued operation of all existing units by 

defining as 'new' nuclear capacity any nuclear plants that have been relicensed to operate beyond 

60 years, and any plants that have not received license extensions to operate beyond their 

original 40-year license term as of the date on which the proposed guidelines were issued, rather 

than assume that nuclear units will continue to run forever. 

Commenters stated in developing BSER, EPA's view was that including a small percentage of 

nuclear energy in the rate targets would provide states an incentive to avoid premature nuclear 

shutdowns; the approach, however, will not achieve the intended effect and is legally vulnerable. 

Commenters said EPA calculates the generation (in MWh) of electricity from 'at risk' nuclear 

plants and then adds this generation to the denominator of the goal, resulting in a lower 2030 

emission rate. Commenters said EPA explains that the proposed rule counts only six percent of 

existing nuclear facilities because (according to EPA) six percent of nuclear capacity nationwide 

is 'at risk' for premature retirement. 

Commenters further stated if EPA is going to continue with its broad interpretation of BSER, the 

Agency should remove the "6 percent factor" from the goal calculation. Commenters said the 

EPA included 5.8% of Callaway and Wolf Creek nuclear units in Missouri and Kansas, 

respectively; since both units are expected to remain in service, EPA's treatment has little impact 

on either state's ability to meet its emission rate reduction targets; instead, the 6 percent factor is 

a detriment should either nuclear unit in any given year generate less energy than what EPA 

assumed in setting either state's emission rate target, requiring the state, more specifically the 

units in the state, to offset any shortfall. Commenters said EPA should consider a requirement for 

state plans to include a discussion of how states would preserve existing nuclear generating 

capacity, such as any necessary policy changes through legislation or regulation, or other marketbased mechanisms, or a combination thereof; this would be a relatively straightforward showing 

for nuclear units in traditionally regulated states. 

Commenters stated EPA also proposes that the emission reductions achievable by retaining in 

operation approximately six percent of each state's historical nuclear capacity [i.e., "at risk" 

units] should be factored into the state goals for the respective states. Commenters said the 

proposed guidelines further notes that the nuclear generating capacity reflected in building block 

3 is already in operation or under construction. Commenters said based on EPA's assumption that 

the so-called "at risk" units will continue to operate until 2030 and that the state reduction goals 

could be sustained beyond 2030, it is reasonable to conclude that EPA assumes that the 

remainder of the existing nuclear fleet will continue to be available through 2030, as no state 

goal appears to reflect any assumption by EPA of existing units coming off line, other than those 

already committed to retire. 

Commenters stated this assumption ignores the fact that, unlike fossil plants, nuclear plants are 

only licensed for an initial term of 40 years; and while many plants have obtained, or are in the 

process of obtaining, a first license extension for an additional 20 years, the process for obtaining 

a subsequent license extension is still evolving. Commenters said the NRC has "begun a 

regulatory framework and technical justification review of the operating power reactor license 
489 

renewal process to be prepared for anticipated subsequent license renewal applications that will 

request approval to renew a facility's operating license," but it has not yet decided on the terms 

under which it may grant second license renewal applications. Commenters said even if NRC 

does grant additional license renewals, EPA has no valid basis to assume that every plant 

currently operating will continue to receive repeated license renewals into the indefinite future, 

as its current approach implicitly does. 

Commenters stated that no output from the Wolf Creek nuclear plant was "at risk," and the 

amount labeled as "at risk" should be removed from the denominator of the CPP's mathematical 

formula. Commenters also recommended that the EPA should revise its formula so that existing 

nuclear generation would count towards compliance. 

Commenters stated Kansas currently has one nuclear plant, Wolf Creek, with an output of 1,205 

MW that is owned jointly by three Kansas utilities. Commenters said the EPA's proposed plan 

does not recognize the significant zero-carbon emissions from Wolf Creek that serve to lower 

Kansas's overall carbon footprint. Commenters said in fact, the CPP, as structured, penalizes 

states with nuclear generation by including "at risk" nuclear generation in the denominator of the 

CPP's mathematical formula. Commenters said the penalty resulting from inclusion of "at risk" 

nuclear generation in the formula is derived by the denominator's effect of lowering EPA's 

proposed emission rates. Commenters said the impact of the formula is created by the EPA's use 

of a basic ratio of: 

Carbon emissions / megawatt hours of production. 

Commenters stated the EPA's definition of the basic ratio above requires generation resources 

with zero emissions to increase only the denominator of the ratio; because there is no effect on 

the numerator, each megawatt hour of zero-carbon generation added by EPA for "at risk" nuclear 

resources lowers the emission limit goal and thus requires greater carbon emission reductions. 

Commenters said this is counterintuitive and reflects either the EPA's lack of understanding of 

electric generation or is simply an attempt to derive a lower emission limit. Commenters said 

penalizing Kansas for zero-carbon generation is inconsistent with the EPA's espoused goal of 

lowering carbon emissions; a rule designed to reduce carbon emissions should reward, not 

penalize, the use of nuclear generation. 

Commenters stated because Kansas has no nuclear generation under construction and no part of 

their single nuclear plant, Wolf Creek, is 'at risk', this element is eliminated from their 

calculation. 

Commenters stated that the EPA should revise its formula so that existing nuclear generation can 

count towards compliance. 

Commenters stated that assuming 5.8% of nuclear generation in every state was at risk was 

unreasonable, because nuclear units in many states are incorporated into the rate base and are not 

at market risk, while nuclear units at risk of retirement are merchant generators located in 

wholesale electricity markets. Commenters also stated that the EPA's treatment of nuclear 

capacity is arbitrary, because other existing sources of zero-carbon electricity such as 

hydroelectric dams and renewable energy facilities, are not treated as "at risk," even though 
490 

market and non-market forces could lead to shut-down or reduced utilization of those sources in 

future years. Commenters recommended that the EPA remove the "at-risk" existing nuclear 

generator factor from its calculation of states' emission goals. Commenters also stated that the 

assumption of a 90% capacity factor was inappropriate, and recommended that, if the EPA does 

not remove the "at risk" generation from the goal calculation, that the capacity factor used should 

reflect actual capacity factor averages within a state. 

Commenters 2 stated in calculating a state's emission goal, EPA's proposal incorporates 5.8% of 

the state's existing nuclear capacity (EPA refers to this capacity as 'at risk '). Commenters said 

including at-risk nuclear capacity in a state's emission goal is unreasonable for a number of 

reasons; first, the assumption that all existing nuclear capacity is at risk of retirement is 

unreasonable because in many states these units are incorporated into the rate base and are not at 

market risk. Commenters said the U.S. nuclear units at risk of retirement are for the most part 

merchant generators located in competitive wholesale electricity markets. 

Commenters stated EPA's treatment of existing nuclear capacity is also arbitrary because it is 

inconsistent with the agency's treatment of other large, existing sources of zero-carbon electricity 

such as hydroelectric dams and renewable energy facilities. Commenters said all types of nonCO2-emitting generation face market and non-market challenges that could lead to shut-down or 

reduced utilization in future years. Commenters said EPA has not proposed to penalize states that 

retire other existing, non-CO2-emitting generation by incorporating an assumption about ’at risk' 

hydroelectric or renewable energy generation into state goals. Commenters said EPA should not 

arbitrarily treat non-CO2 generation from existing nuclear facilities differently from other nonCO2 generation; to remedy this discrepancy, EPA should remove the 'at-risk' existing nuclear 

generator factor from its calculation of states' emission goals in accordance with the National 

Association of Regulatory Utility Commissioners' (NARUC) resolution on this topic. 

Commenters stated EPA's proposal to penalize states that fail to preserve their nuclear capacity is 

also flawed because many states have little or no control over the decision as to whether nuclear 

capacity will continue to operate. Commenters said states have no control over whether the 

Nuclear Regulatory Commission (NRC) grants or denies an existing facility's application for a 

license extension. Commenters said the NRC is currently issuing 20-year license extensions to 

facilities that have reached the end of their initial 40-year license, but has yet to determine 

whether it may issue longer extensions under existing federal law. Commenters said for these 

reasons, if EPA does not remove the at-risk nuclear component from building block 3, EPA 

should make states' emission rate goals less stringent at the time of license expirations for units 

that have already received a 20-year license extension from the NRC. 

Commenters did not believe that the use of a 90% capacity factor for the at-risk nuclear capacity 

in calculating a state's goal is appropriate. Commenters said EPA cites EIA's Annual Energy 

Outlook report on the 2013 nationwide nuclear fleet average as the basis for that number; 

however, there are issues with EIA's report: that average includes 21 plants with capacity factors 

over 100%, which skews the average high. Commenters suggested that EPA examine EIA's 

methodology to correct for this error. Commenters said in addition, on a rolling average basis for 

2011-2013, one quarter of the units had an average capacity factor of 70.8% and the lifetime 

average capacity factor for the nuclear units currently operating is 80.3%. Commenters said 

nuclear units typically refuel at least every 18 months: an outage that usually lasts at least six 
491 

weeks. Commenters said outages for maintenance, uprates, or safety issues can last significantly 

longer; the use of a national average capacity number is not appropriate in the calculation of an 

individual state's goal. Commenters said the average number represents operations across a fleet 

of about 100 units; a single state will have a much lower number of units and outage schedules 

among that smaller number will result in much lower capacity factors during many compliance 

periods. Commenters said if EPA does not remove the at-risk nuclear component from building 

block 3, EPA must also adjust the assumed capacity factor and, subsequently, the overall 

emissions goal, to reflect actual averages within the state. 

Commenters disagreed with the Proposed Rule's treatment of 'at risk' nuclear generation. 

Commenters agreed that continuing operation of existing nuclear capacity is a key component of 

U.S. climate policy; however, trying to implement this policy through punitive measures directed 

at states in which those plants are operating is inappropriate. Commenters said instead, EPA 

should work with the Federal Energy Regulatory Commission (FERC), Regional Transmission 

Organization (RTOs), and the states to ensure that FERC's regulation of wholesale markets 

provides adequate cash flow to those nuclear units that are truly at risk of shutdown for economic 

reasons, and should provide appropriate recognition to states that successfully keep units running 

rather than penalizing those states in which shut-down may occur (usually because of factors 

beyond a state's control). 

Commenters stated that Louisiana has two nuclear facilities in operation with a combined 

capacity of 2,134 MW (net summer capacity), and that the EPA included 984 GWh of generation 

from these facilities in its target emission rate calculation for Louisiana. 

Commenters stated the EPA uses its Building Block 3(a) to include a factor for "preserved" 

nuclear generation that might otherwise be retired. Commenters said the EPA identifies a number 

of factors that could put nuclear EGU's at risk: facility age; increased fixed O&M costs; low 

wholesale electricity prices; and additional capital investment associated with ensuring plant 

security and emergency preparedness. Commenters said using an estimate published in the EIA's 

Annual Energy Outlook for 2014, the EPA assumes that six percent of each state's nuclear 

generating capacity is "at-risk." Commenters said Louisiana has two nuclear facilities in 

operation with a combined capacity of 2,134 MW (net summer capacity). Commenters said EPA 

included 985 GWh of generation from these facilities in its target emission rate calculation for 

Louisiana. 

Commenters stated that neither of Louisiana's nuclear facilities are "at-risk" and no new nuclear 

is under construction, so this component should not be included in the denominator of the state 

goal equation. 

Commenters stated the EPA's proposal effectively penalizes states with operable nuclear 

facilities by adding nuclear generation to the denominator of its equation thereby lowering a 

state's emission rate. Commenters said the EPA's proposed formula is basically a ratio of carbon 

emissions-to-generation; thus adding to the equation a zero-carbon emissions generation value 

increases the denominator while holding the numerator constant. Commenters said the result is a 

reduced target emission rate, requiring greater carbon emission reductions; penalizing a state for 

zero-carbon generation seems contradictory to the EPA's goals. Commenters said the rule should 

be designed to reward a state for utilizing zero-carbon emitting generation, not penalize it. 
492 

Commenters stated this issue is highlighted by NERC in its reliability assessment: 

'The nuclear retirement assumptions add pressure to states that will need to retire nuclear units. 

For these states, more CO2 reductions from other measures than originally estimated by the EPA 

may be required.' 

Commenters stated because neither of Louisiana's existing nuclear facilities are 'at-risk' and no 

new nuclear is under construction, this component should not be included in the denominator of 

the equation. 

Commenters stated that the basis for EPA's 'at risk' nuclear capacity estimates is weak and not 

well supported. Commenters further stated that no nuclear units in Louisiana are considered to be 

vulnerable to the type of economically-forced closure described by EPA in the proposed rule. 

Commenters stated the EPA based its assumption of 'at-risk' nuclear capacity on an estimate 

published in the EIA's Annual Energy Outlook for 2014. Commenters said the EIA however, 

does not provide any detailed calculations, nor does it identify specific plants, timeline or 

rationale for this estimate other than 'continued economic challenges.' Commenters said the EIA 

simply states: 

"Additionally, the AEO2014 nuclear projection assumes a decrease of 5.7 GW by 2020 in 

several regions where existing nuclear units appear at risk of early closure due to a combination 

of high operating costs and low electricity prices." 

Commenters stated while the Companies do not know which units the EIA had in mind, the 

Companies do not consider any of their nuclear units in Louisiana to be vulnerable to the type of 

economically-forced closure described by the EPA in this proposed rule. 

Commenters stated the EPA also notes the lack of specific retirement assumptions, but yet 

determines that the 5.7 GW retirement projection 'is a reasonable proxy' and applies it to all 

states with nuclear generation regardless of region or fleet characteristics (e.g., age of facility, 

historic capacity factor, economic dispatch, and regulatory environment). 

Commenters stated that the EPA's "at risk" nuclear proposals are ambiguous on how nuclear 

generation will be treated for compliance purposes. Commenters said for example, if the two 

units in Louisiana operated at below a 90 percent capacity factor for one year (as a result of 

refueling or an outage, Commenters stated that it was unclear if Louisiana would be able to claim 

"credit" for the entire 985 GWh used in calculating the state goal, or if some adjustment would 

be applied. 

Commenters stated the EPA's "at-risk" nuclear component is not a compliance requirement and 

no specific monitoring or verification is required. Commenters said this portion of the EPA's 

BSER seems only to serve as a method for reducing a state's target emission rate; it is unclear 

how actual net generation values will be accounted. Commenters said for example, if the two 

units in Louisiana operate below a 90 percent capacity factor in one year (as a result of refueling 

or outage), it is unclear if Louisiana would still be able to claim 'credit' for the entire 985 GWh 

used in calculating the state goal, or if some adjustment would be applied. 
493 

Commenters stated that the EPA's at-risk nuclear assumption is not expected to impose a cost on 

Louisiana customers at this time; however, if the costs of operating nuclear power exceeded the 

wholesale market rates, Louisiana could be compelled to assume "above-market" cost in order 

remain compliant with CPP provisions. 

Commenters stated the nuclear component of EPA's proposed rule is not expected to impose a 

cost to Louisiana ratepayers. Commenters said if the EPA allows a state to use the same 6 

percent of nuclear generation for compliance of the target emissions rate, and nuclear generation 

remains constant, then it should impose no cost; this could change, however, over time, if the 

costs associated with operating nuclear power exceed wholesale market rates. Commenters said 

at that time, Louisiana could be compelled to assume an 'above-market' cost in order to remain 

compliant with CPP provisions. 

Commenters stated that the BSER used in calculations of state goals has a flaw in that the EPA 

has not justified the decision not to tally 100% of nuclear generation. Commenters also stated 

that the BSER calculation was flawed because hydroelectric generation was not included in any 

form in the BSER. 

Commenters stated in addition, the Best System of Emission Reduction used in calculations of 

state goals has at least three major flaws, regardless of what assumptions are made regarding the 

evaluation of State Plans and ultimate compliance: 

1. EPA has not justified the decision not to tally 100% of nuclear generation. 

2. EPA does not include hydroelectric energy in any form in the BSER. 

Commenters stated these technologies are the two largest generators of very-low-carbon 

electricity in the United States (making up over 82% of total very-low-carbon electricity in 

2012). Commenters said omitting most or all of the electricity generated by the technologies that 

have already made the greatest contributions to accomplishing the stated goal of the Clean Power 

Plan requires justification. Commenters said although the EPA has quite reasonably explained 

why they do not expect any new hydroelectric capacity to be built in the foreseeable future, clear 

and compelling overall justification for omitting this generation from the state goal-setting 

formula is not present in the proposed rule. 

Commenters urged the EPA to ensure that electricity generation from nuclear power plants is 

counted fully and fairly in all parts of the final rule. 

Commenters stated that Building Block 3 includes 5.8% of the generation capacity for the Grand 

Gulf Power plant in Mississippi. Commenters stated that this facility is not at risk and the 

inclusion of output in this manner will have no effect on the future operation of the plant. 

Commenters recommended that the inclusion of "at risk" generation should be dropped from the 

goal setting. 

Commenters stated building Block 3 includes 5.8% of the generation capacity for the Grand Gulf 

Power plant in Mississippi, which equals 631,874 MWh, to be included in the denominator of the 

goal calculations. Commenters said this is to account for at risk generation and to encourage 

continued utilization of the nuclear generation facilities. Commenters said this facility is not at 
494 

risk and the inclusion of the output in this manner will have no effect on the future operation of 

the plant. Commenters said the inclusion of the 'at risk' nuclear generation should be dropped 

from the goal setting. 

Commenters stated that states with existing nuclear generation have stricter goals, because a 

percentage of that nuclear generation is included in the denominator of the calculation of the 

state goal. Commenters stated that this adds pressure to states with nuclear generation that is not 

felt by states with nuclear generation, even though nuclear generation is carbon neutral and 

should be considered a beneficial prior investment.

Commenters stated EPA proposes that states encourage more carbon-neutral generation, such as 

renewable and nuclear generation, in Building Block 3; the commenters are concerned about the 

proposed rule's calculation of the renewable target and treatment of nuclear units. 

Commenters stated although EPA recognizes the value of nuclear generation, the proposed rule 

does not reward states that have invested in nuclear generation; rather, these states have stricter 

goals, because a percentage of existing nuclear generation is included in the denominator of the 

calculation of the state goal. Commenters said this adds pressure to states with nuclear 

generation - even though that generation is carbon neutral and should be considered a beneficial 

prior investment - that is not felt by states without nuclear generation. 

Commenters stated that the proposed rule penalizes prior investment in nuclear generation and 

does not incentivize new investment in nuclear power. Commenters also stated that the EPA fails 

to recognize that states often have little control over whether a nuclear plant remains operational. 

Commenters stated that the Nuclear Regulatory Commission is responsible for licensing and, 

barring a safety or operational issue, the owners of nuclear plants largely exercise control over 

the decision to shut down the unit. 

Commenters stated EPA fails to recognize that states often have little to no control over whether 

a nuclear unit remains operational. Commenters said the Nuclear Regulatory Commission is 

responsible for licensing, and barring a safety or operational issue, the owners of nuclear plants 

largely exercise control over the decision to shut down a unit. Commenters said although a state 

may very much want a nuclear plant to remain operational as a source of zero-carbon electricity, 

the state may be limited in its ability to affect the market revenues that a nuclear unit receives in 

organized markets. Commenters said EPA's inclusion of any existing nuclear generation in the 

denominator merely serves to penalize states that already have this zero-carbon, relatively 

climate-resilient resource, and it is out-of-touch with any understanding of how nuclear units are 

planned and operated. 

Commenters stated the proposed rule treats existing nuclear generation and new nuclear 

generation differently. Commenters said per the proposal, generation from new nuclear capacity 

can be credited at 100% of its generation during the compliance period. Commenters supports 

this treatment for new nuclear generation. 

Commenters stated that the proposed rule does not give net credit for nuclear generation because 

it includes 5.8% of the existing capacity both in the baseline when establishing goals and in 

counting nuclear generation toward compliance with the state goal. Commenters suggested two 
495 

alternatives options for treatment of nuclear generation in the final rule: 1) Do not include "at 

risk" nuclear generation in the baseline when developing the state goal, but allow it to be used 

for compliance, and 2) Award compliance credit for "at risk" nuclear generation if investments 

are made to extend the life of existing nuclear generation. 

Commenters stated preserving existing nuclear's carbon-free generation will help to keep total 

average CO2 emission rates down for the country's energy portfolio. Commenters said Missouri 

has one existing nuclear generating facility in the state, a 1,200 megawatt facility. Commenters 

said the proposed rule describes 'at risk' nuclear generating capacity as nuclear capacity that is at 

risk of retiring in the near future. Commenters said the proposed rule does not give net credit 

because it includes 5.8% of existing nuclear capacity both in the baseline when establishing the 

goals and in counting nuclear generation toward compliance with the state goal. Commenters 

said if an existing nuclear facility is retired, under EPA's proposed method, a state would have to 

develop zero-emitting generation to replace 5.8% of existing nuclear generation just to get back 

to the baseline level of the state's adjusted average CO2 rate. Commenters suggested two 

alternative options for the treatment of existing nuclear generation in the final rule: 

Option 1: Do not include 'at risk' nuclear generation in the baseline when developing the state 

goal, but allow it to be used for compliance. Commenters said under this option, 'at risk' nuclear 

generation would not be included in the state goal calculation, but states would be allowed to 

take credit for their "at risk" nuclear generation. Commenters said this method would still 

provide incentive to invest in prolonging the life of existing nuclear capacity by giving a net 

credit to states with existing nuclear capacity. Commenters said it also would not penalize a state 

that retires existing nuclear capacity at the end of its useful life. Commenters said although the 

state would lose the compliance credit from the retired nuclear generation, the state would be 

back at its starting point, as opposed to needing to develop new zero-emitting generation just to 

get back to its baseline level. 

Option 2: Award compliance credit for 'at risk' nuclear generation if investments are made to 

extend the life of existing nuclear generation. Commenters said under this option, 'at risk' nuclear 

generation would be included in the state goal calculation and the state would be allowed to take 

credit for the 'at risk' nuclear generation in the same manner that the proposed rule describes; 

however, if a utility were to make an investment to prolong the life of existing nuclear 

generation, such as replacing a reactor head, a credit would be granted beyond the 5.8% allowed 

for in the proposed rule. Commenters said the state would not only avoid the penalty of needing 

to replace 5.8% of their retired nuclear capacity, but it would also receive a credit for their 

investment to extend the life of their existing nuclear capacity. Commenters said this would 

increase the incentive to preserve existing nuclear capacity and would generally be consistent 

with EPA's proposed treatment of existing nuclear generation. 

Commenters stated that Ameren (owner of the Callaway Energy Center) does not believe 

Callaway is "at risk" for closure. Commenters also stated that Ameren estimates that if, under the 

proposed rule methodology, Callaway does not achieve a 90 percent capacity factor, Missouri 

will necessarily be required to meet its goals from other building blocks. 

Commenters stated the EPA also notes that, '[n]uclear generating capacity facilitates CO2 

emission reductions at fossil fuel-fired EGUs by providing carbon-free generation that can 
496 

replace generation at those EGUs', yet no net credit is given for the remaining useful life of the 

Callaway Energy Center (Callaway), presumably because 'the generation from [this] unit is 

currently helping to avoid CO2 emissions from fossil fuel-fired EGUs. Commenters said in its 

comments, Ameren indicated it does not believe Callaway is 'at risk' for closure. Commenters 

said the EPA should allow a percentage of nuclear generation to be used in meeting a state's goal 

for CO2 emission reduction. Commenters said Ameren estimates that if, under the proposed rule 

methodology, Callaway does not achieve a 90 percent capacity factor, Missouri will necessarily 

be required to meet its goals from other building blocks. 

Commenters stated first, EPA's assumption that 'at risk' nuclear generation will continue to 

operate is unsupported. Commenters said this generation is obviously "at risk" for a reason, yet 

EPA does not examine why this generation is at risk or what impediments would have to be 

removed in order for this generation to keep operating; for example, Exelon, the largest owner of 

nuclear power in the United States, has warned that the United States nuclear fleet is aging and 

faces severe challenges in avoiding large-scale closures in the future. Commenters said Exelon is 

also taking the public position that nuclear power has become unprofitable in light of low natural 

gas prices and subsidized wind power and that three of its six Illinois nuclear plants are 'on the 

bubble' of closing. Commenters said EPA, however, simply assumes that these types of 

impediments can be removed without explaining why. 

Commenters continued EPRI explains the fallacy of EPA's approach. 

Commenters stated indeed, EPA performs almost no analysis at all. Commenters said the extent 

of EPA's analysis is (a) an EIA estimate that 5.7 GW of existing nuclear capacity is likely to be 

lost, (b) an article by two EIA analysts that referred to this reduction in capacity as occurring 

because of 'continued economic challenges,' and (c) a February 2013 Credit Suisse report that 

nuclear units may be experiencing up to a $6 MWh shortfall in covering their operating costs. 

Commenters said EPA translates these speculations into the conclusion that at a $12-$17 carbon 

price, a price EPA finds reasonable, this capacity would continue to be available. Commenters 

said to characterize this analysis as scanty understates the point. Commenters said one quotation 

from one brief article by two EIA analysts plus a cherry-picked quotation from a single 23-page 

investment report hardly qualifies as 'substantial evidence' that all at risk nuclear generation can 

be preserved; indeed, even a cursory glance at the Credit Suisse article indicates that the nuclear 

industry faces issues that are more than merely monetary, including a large number of aging 

units experiencing very high levels of service outages. 

Commenters stated that the assumption that 6 percent of every state's nuclear power is at risk is 

arbitrary, because specific nuclear units in specific states are at the risk of retirement or derating, 

while others are not. Commenters also stated that the six percent assumption has the absurd 

result that the amount of nuclear generation to be 'saved' in meeting the state's rate goal is less 

than the smallest nuclear reactor in any state. Commenters said for example, Texas is assigned 

290 MW of at-risk capacity, while the smallest unit in the state is 1195 MW, four times as large. 

Commenters said to match its goal, Texas would need to determine somehow that 24 percent of 

the capacity of its smallest unit was 'at risk' and that it had taken some measures to retain it in 

operation. 
497 

Commenters stated second, having utilized EIA's figure of 5.7 GW of nationwide nuclear 

capacity that is likely to be lost, and having determined that this number represents about 6 

percent of nationwide nuclear power, EPA then arbitrarily assumes that 6 percent of every state's 

nuclear power is at risk and can be saved. Commenters said EPA has no basis for making this 

assumption; specific nuclear units in specific states are at risk of retirement or derating; others 

are not. Commenters said as an example, Arkansas Electric Cooperative Corporation reports that 

no nuclear generation is at risk in Arkansas, yet EPA's inclusion of that assumption in calculating 

Arkansas' goal artificially makes that goal more stringent. Commenters said there is thus 

absolutely no reason to assume that because one state has nuclear generation at risk, every other 

state that has nuclear generation has the same proportion of nuclear generation at risk; EPA's 

assumption that they do is the definition of arbitrary. 

Commenters stated nor does EPA have a rational basis to conclude that new nuclear generation 

will come on line as scheduled; indeed, witnesses for the staff of the Georgia Public Service 

Commission recently testified that the already-delayed Plant Vogtle faces further delays and 

indeed lacks an integrated project schedule beyond 2015. 

Commenters stated under EPA's approach, states with nuclear power are left with a lower 

emission rate goal relative to states that do not employ nuclear power, thereby limiting states' 

options to demonstrate compliance. Commenters also stated EPA should reconsider this 6 

percent 'penalty' for 'at risk' nuclear generation. Commenters said existing or new nuclear 

generation should not affect a State's emission rate goal, but rather some portion should be 

acceptable as an eligible action toward meeting that goal. Commenters also recommended that a 

100 MW uprate at the Seabrook Station in 2005 and 2006 should be credited, because it helped 

to avoid future fossil fired generation. 

Commenters stated second, the Seabrook Station nuclear plant completed an early 100 MW 

uprate in 2005 and 2006. Commenters said this uprate has helped to avoid future fossil fired 

generation and should be credited. Commenters said the proposed rule fails to properly promote 

or recognize the importance of base-load nuclear generation for large-scale reductions in CO2 

emissions. Commenters said nuclear energy is the largest existing source of carbon free 

electricity generation in the United States, accounting for 19 percent of all electricity generation 

in 2012 and 63 percent of our nation's carbon free power, greater than all renewables combined. 

Commenters said some nuclear power plants are at economic risk of shut-down, given the low 

cost of natural gas and the increase in construction and operation of natural gas-fueled 

generation. Commenters said while Building Block 3 is intended to encourage the continued 

operation of nuclear units, instead states with existing nuclear capacity are penalized in the 

calculation of emission rate goals. Commenters said under EPA's approach, states with nuclear 

power are left with a lower emission rate goal relative to states that do not employ nuclear 

power, thereby limiting states' options to demonstrate compliance. Commenters said EPA should 

reconsider this 6 percent "penalty" for "at risk" nuclear generation. Commenters said existing or 

new nuclear generation should not affect a State's emission rate goal, but rather some portion 

should be acceptable as an eligible action toward meeting that goal. Commenters stressed the 

importance of setting standards that preserve options (e.g., nuclear) for fuel diversity and 

maintain grid reliability. 
498 

Commenters recommended that: a) existing nuclear generation should not be considered in 

setting a State's emission rate goal, but instead should only be considered as an eligible action for 

compliance purposes; and b) maintaining existing nuclear power should be an eligible action, 

which receives full credit for reducing the CO2 emissions intensity (lb/MWh) of a state. 

Commenters stated that the second recommendation is warranted under a plain reading of EPA's 

definition of 'affected entity' in proposed definitions at 40 CFR 60.5820. 

Commenters stated the proposed rule fails to properly promote, or recognize the importance of, 

base load nuclear generation for large-scale reductions in CO2 emissions. Commenters said too 

little CO2 emissions reduction credit is allowed for nuclear energy in the proposed rule. 

Commenters said it is appropriate to provide credit to maintain existing nuclear power, as well as 

for new nuclear power. 

Commenters had the following recommendations: 

a) Existing nuclear generation should not be considered in setting a State's emission rate 

goal, but instead should only be considered as an eligible action for compliance purposes. 

b) Maintaining existing nuclear power should be an eligible action, which receives full 

credit for reducing the CO2 emissions intensity (lb/MWh) of a state; this result is 

warranted under a plain reading of EPA's definition of "affected entity" in proposed 

definitions at 40 CFR 60.5820. 

Commenters stated EPA's treatment of existing nuclear generation does not fully credit states 

that have supported the development of one of the most significant forms of carbon-free 

electricity generation in the United States, nuclear power. Commenters said instead, states with 

existing nuclear capacity are penalized in the calculation of emission rate goals. Commenters 

said under EPA's approach, states with nuclear power are left with a more stringent emission rate 

goal relative to states that do not employ nuclear power, thereby limiting states option(s) to 

demonstrate compliance. 

Commenters stated that reducing CO2 emissions goals in only those states with nuclear 

generation by assuming a uniform amount of 'at risk' nuclear generation that could be preserved, 

without any assessment of whether this is the case, is arbitrary and capricious and has 

unwarranted and inequitable impacts on state targets. Commenters said furthermore, this 

approach fails to recognize that retention and retirement decisions rest largely with generation 

owners and the Nuclear Regulatory Commission, rather than the states. Commenters also stated 

this element of Building Block 3 will have no effect in the majority of states that do not have 

nuclear generation facilities. Commenters said in states that do, the EPA's assumption regarding 

preservation of 'at risk' nuclear will increase the burdens of the Clean Power Plan, effectively 

penalizing those states for their use of these non-emitting resources. Commenters recommended 

that the EPA should not incorporate any 'at risk' nuclear generation into New York's target CO2 

emissions rate. 

Commenters stated Building Block 3 assumes the preservation of 5.8% of nuclear generation 

across the country that the EPA considers to be 'at risk' for retirement. Commenters said the EPA 

applies Building Block 3 by incorporating 5.8% of a state's nuclear capacity into its target CO2
499 

emissions rate. Commenters said the target rates in states that do not have any nuclear generators 

are not similarly adjusted; this adds 2,410,637 MWh of generation into the denominator of the 

formula for New York's target CO2 emissions rate, having the effect of lowering it. 

Commenters stated reducing CO2 emissions goals in only those states with nuclear generation by 

assuming a uniform amount of 'at risk' nuclear generation that could be preserved, without any 

assessment of whether this is the case, is arbitrary and capricious and has unwarranted and 

inequitable impacts on state targets. Commenters said furthermore, this approach fails to 

recognize that retention and retirement decisions rest largely with generation owners and the 

Nuclear Regulatory Commission, rather than the states. 

Commenters stated this element of Building Block 3 will have no effect in the majority of states 

that do not have nuclear generation facilities. Commenters said in states that do, the EPA's 

assumption regarding preservation of "at risk" nuclear will increase the burdens of the Clean 

Power Plan, effectively penalizing those states for their use of these non-emitting resources. 

Commenters stated when a nuclear unit ceases to operate, the affected state must replace the 

nuclear unit's output. Commenters said in the near term, the needed replacement energy likely 

will come from existing units and an RSV may have to be triggered. Commenters said in the 

longer term, some portion of the replacement energy would have to come from non-emitting 

resources in order to meet the state's Clean Power Plan target. Commenters said lowering state 

target rates in this manner penalizes states that currently operate non-emitting nuclear facilities 

by requiring them to deploy additional renewable generation and energy efficiency in the event 

that their nuclear facilities are later decommissioned. Commenters said the EPA should not 

incorporate any 'at risk' nuclear generation into New York's target CO2 emissions rate. 

Commenters stated furthermore, while the State recommends removing the 'at risk' nuclear 

provision, it is also important to note that many of EPA's apparent objectives regarding existing 

nuclear can still be realized within a mass-based system. Commenters said in a mass-based 

system such as RGGI, nuclear plants need not bear the cost of emission allowances; therefore, 

they realize an economic advantage over fossil fuel-fired plants. Commenters said in addition, in 

a mass-based system, any increase in CO2 emissions resulting from the retirement of nuclear 

plants is automatically accounted for under the emissions cap; because all CO2 emissions from 

affected fossil fuel-fired plants must be under the mass- based cap, assuming the cap is federally 

enforceable, any increase in emissions resulting from nuclear retirements could not cause a state 

or region to exceed the cap. Commenters said instead, such increases in emissions would 

correspondingly increase pressure on the cap and thereby the cost of compliance. Commenters 

said in New York, for example, several existing nuclear plants may retire prior to 2030, due to 

NRC relicensing, economic considerations, or market forces. Commenters said if this occurs and 

the State is complying with the proposed rule through RGGI or another mass-based program, 

then compliance costs could increase for regulated entities within the State, but emissions would 

have to remain below the cap. 

Commenters recommended removing any provisions regarding existing nuclear generation from 

the final CPP rule. Commenters stated the final rule should altogether remove consideration of a 

state's existing nuclear capacity - whether 'at risk' or otherwise - from both the calculation of a 

state's target and from compliance. Commenters recommended this modification because the 
500 

dispositive factors in whether a nuclear plant continues to operate are generally the NRC 

licensing process and economic considerations, not state programs or policies. 

Commenters recommended that EPA remove 'at risk' nuclear from the building block 

calculations. Commenters said in the proposal, EPA characterizes approximately six percent of 

existing nuclear capacity nationwide as 'at risk' of retirement; because EPA states that preserving 

such 'at risk' nuclear that might otherwise be retired would result in CO2 emission reductions 

from fossil fuel- fired power plants, the proposal incorporates the six percent of nuclear capacity 

in both the calculation of a state's target emission rate and in a state's compliance with the target.

Commenters said the final rule should altogether remove consideration of a state's existing 

nuclear capacity - whether 'at risk' or otherwise - from both the calculation of a state's target and 

from compliance. 

Commenters recommended this modification to the proposal primarily because the ultimate 

determination regarding whether an existing nuclear power plant continues to operate or retires is 

largely a business and/or Nuclear Regulatory Commission (NRC) licensing decision and beyond 

a state's control. Commenters said while EPA ostensibly included the 'at risk' nuclear provision 

as a means of encouraging states to incentivize the preservation of existing nuclear capacity, the 

reality is that a state has limited ability to provide such incentives. Commenters said instead, 

under the Atomic Energy Act of 1954, the federal government, through the NRC, has primary 

responsibility for ensuring the safety of nuclear power plants and licensing their operation. 

Commenters said while there are a number of possible circumstances in which a nuclear plant 

may be forced to retire, these would generally include safety, radioactive leaks, or other issues 

associated with NRC relicensing, or economic conditions that make a plant too costly to continue 

to operate. Commenters said on the other hand, a state may regulate various aspects of operation 

of a nuclear power plant, including those that relate to compliance with environmental laws, 

mitigating environmental impact, and protecting water quality, but generally cannot dictate 

whether a plant continues to operate altogether. 

Commenters concluded in other words, the dispositive factors in whether a nuclear plant 

continues to operate are generally the NRC licensing process and economic considerations, not 

state programs or policies. Commenters said even beyond the six percent of 'at risk' plants, a 

nuclear plant may end up retiring despite a state's best efforts to preserve the plant's operation. 

Commenters said given the dominant role of the federal government through NRC licensing, and 

of economic factors, EPA's proposal should not account for actions by states that may be 

impossible for states to implement; therefore, especially given the leadership role EPA envisions 

for states under the proposal, New York strongly supports the removal of the 'at risk' nuclear 

provision from the final rule. 

Commenters supported EPA's proposal to credit 6% of existing nuclear generation to help avoid 

early retirements and to recognize the importance of nuclear power in meeting greenhouse gas 

emission reduction goals; however, Commenters did not believe that a higher percentage (up to 

100%) of nuclear generation should be used for determining the state emission targets. 

Commenters also did not recommend EPA requiring state compliance plans to include a 

discussion of how states would preserve existing nuclear generating capacity, such as any 

necessary policy changes through legislation or regulation, or other market-based mechanisms, 

or a combination thereof. 
501 

Commenters stated existing nuclear generation should benefit significantly from the increased 

power prices resulting from the increased costs imposed on fossil fuel-fired electric generation 

under this and other EPA rules such as the mercury and Air Toxics Standards Rule which coaland oil-fired EGUs must begin complying with in 2015. Commenters said increasing the 

percentage of existing nuclear generation in the state targets would drive less gas re-dispatch and 

less demand for new nuclear or renewable capacity. Commenters said if states that have a 

significant amount of nuclear generation want to voluntarily take legislative, regulatory or other 

action to preserve existing nuclear generating capacity, that is their prerogative; however, actions 

of this nature should be pursued outside the Clean Power Plan framework. 

Commenters stated that North Carolina does not have nuclear units that would be considered atrisk, yet 6% nuclear is added into North Carolina's denominator, thus making the state's emission 

rate target arbitrarily more stringent. Commenters said inclusion of the 6% penalizes North 

Carolina despite the state's significant investment in a zero carbon generation resource. 

Commenters requested that EPA not include the 6% at-risk nuclear generation in its formula. 

Commenters stated the Proposed Rule counts 6% of a state's nuclear capacity as being 'at-risk' 

and includes the related zero-carbon energy in the goal-setting formula; this results in a lower 

(more stringent) emission rate target for states that host nuclear power plants. Commenters said 

including the 6% at-risk nuclear generation is arbitrary and bears no relation to the nuclear 

generation located in any state. Commenters said EPA justifies its inclusion of 6% nuclear 

generation to give states 'credit' for at-risk nuclear units, however this one-size fits all approach 

is inappropriate. Commenters said EPA's generic 6% calculation assumes that all nuclear plants 

located within the United States are deemed at-risk of closure, which is erroneous. Commenters 

said consistent with this concern, the National Association of Regulatory Utility Commissioners 

("NARUC") passed a resolution at its annual meeting on November 19, 2014 urging EPA: 

"to the extent it regulates carbon from existing power plants under Section 111(d) of the Clean 

Air Act, to adopt final GHG rules and regulations that: 1) will encourage States to preserve, lifeextend, and expand existing nuclear generation; and 2) remove the generic approximately 6 

percent at-risk nuclear and nuclear under construction from the calculation of State-specific 

emissions targets ... [and] ... to the extent the EPA regulates carbon from existing power plants 

under Section 111(d) of the Clean Air Act, that States may include in compliance plans and thus 

receive emissions credit related to all output of new nuclear capacity (including uprates of 

existing plants) that begins operating after the issuance date of the proposed rule." 

Commenters stated North Carolina does not have nuclear units that would be considered at-risk, 

yet 6% nuclear is added into North Carolina's denominator, thus making the state's emission rate 

target arbitrarily more stringent. Commenters said inclusion of the 6% penalizes North Carolina 

despite the state's significant investment in a zero carbon generation resource. Commenters 

supported the resolution approved by NARUC and requested that EPA not include the 6% at-risk 

nuclear generation in its formula. 

Commenters stated North Carolina continues to greatly rely on nuclear generation; as nuclear 

generation has significantly higher up-front capital costs than fossil generation, North Carolina's 

electric rate payers have already invested heavily in this carbon free generation source; as of 

calendar year 2012, North Carolina's nuclear profile. 
502 

Commenters stated that based on a compilation of data from EIA-906, EIA-920, and EIA-923, 

for calendar year 2012, the total net generation from IOU sources of capacity in North Carolina 

was 107,715,547 MWh. Commenters said of this total, 39,385,592 MWh was from in-state 

nuclear capacity, representing 36.6% of all net generation. Commenters said North Carolina 

utilities made this significant investment in carbon-free generation resources between 1975 and 

1987. Commenters said EPA's regulations should recognize the substantial installed investment 

in existing zero carbon nuclear energy by ensuring that, in setting state emissions targets, a state's

existing or planned nuclear generation is not incorporated in such a way as to result in a more 

stringent emissions requirement. 

Commenters stated nuclear retirement is a binary outcome - either a plant retires, or it does not; 

further, nuclear power plants are so large and distributed in such a manner than many states with 

aging nuclear power plants face the risk of a substantial fraction of their entire existing power 

supply disappearing, far beyond the 5.8% of nuclear capacity unrealistically assumed by EPA. 

Commenters said EPA also assumes unrealistic and unfounded state capabilities - a state may be 

unable to do anything under clean air policy or any other policy to prevent the retirement of a 

particular nuclear plant, simply because the costs and risks facing aging nuclear plants can far 

exceed the ability or authority of a state to manage. Commenters said finally, while states cannot 

really prevent the loss of a nuclear plant, such a loss will unavoidably increase CO2 emissions 

from existing fossil plants in the host state and, potentially, many surrounding states. 

Commenters said thus EPA attributes emission reduction potential to something states can't do 

(preventing nuclear retirement), instead of giving them something they need (compliance 

flexibility to deal with emissions increases states cannot prevent in the event a nuclear plant does 

retire or fail). Commenters said further, states may be unable to assure that new nuclear plants 

are completed. Commenters recommended the EPA to remove nuclear capacity from the BSER 

entirely. 

Commenters stated that in addition to disregarding the EIA's clear characterization of the 

economic challenges facing merchant reactors, a further inaccuracy in the draft rule's evaluation 

of existing reactors is that nuclear generating capacity does not come in gradated percentile 

increments. Commenters said the average generating capacity of nuclear reactors is relatively 

large compared to other sources; also, reactors are designed to operate as baseload generators, 

and even among those types of plants, they are the most inflexible. Commenters said reactors 

take hours to power up or down, and can take days to restart from cold shutdown; as a result, 

they must run at 100% of their rated capacity to operate economically; for all practical purposes, 

they are either on or off, in discrete quantities of generation capacity. Commenters said the US's 

one-hundred (soon to be 99) operating reactors range in size from 476 MW to 1,478 MW; the 

average size is 1,003 MW, and the median is 1,048 MW. Commenters said by contrast, the rule 

shows the average size of the 1,266 coal-fired units as 250 MW, and the median size between 

150-250 MW. 

Commenters stated the EPA recognizes that the economic conditions for existing nuclear have 

changed, and that some reactors are at risk of retirement due to financial pressures. Commenters 

said the Agency did not conduct a thorough analysis of the issue to understand the implications 

for the rule; instead, the Agency relied upon an estimate by EIA that 6% of existing nuclear 

capacity is at risk of retirement for economic reasons (without identifying specific plants), and a 

Credit Suisse report estimating the average economic margin influencing closure decisions at 
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$6/MWh. Commenters said the EPA then used the generic EIA and Credit Suisse figures as 

proxies for evaluating the feasibility of preserving existing nuclear capacity, concluding that the 

6% of existing capacity could be preserved at a cost of $6/MWh, or a cost of $12-17 per metric 

ton of CO2. Commenters said on that basis, the draft rule the EPA recommends that 6% of each 

state's nuclear capacity be included in the goals. 

Commenters referred to an EIA estimate that 6% of the nation's existing nuclear capacity is at 

risk of retirement for economic reasons, and a Credit Suisse report estimating the average 

economic margin influencing closure decisions. Commenters stated it is not at all clear that EPA 

interpreted these two documents correctly. Commenters said the EIA report is very clear that the 

reactors at risk of retirement for economic reasons are in states in which utility restructuring 

resulted in their operating as merchant power plants. Commenters said the EPA had no reason to 

assume that the risk retirement of nuclear units for economic reasons would be distributed evenly 

throughout the country. Commenters said the Credit Suisse document is a slide presentation and 

includes no statement that the cost margin for reactors at risk of retirement is $6/MWh. 

Commenters said there is a chart on page 11 of the presentation which shows free cash flow 

margins for a number of reactors at different market price levels, and the range of shortfalls 

generally ranges between $4 and $10/MWh in the PJMW market; there is also a statement that 

"Layering in typical parent overhead of $5-7/MWH, unit economics look even worse." 

Commenters said the EPA is at pains to explain where it derived the $6/MWh figure. 

Commenters stated because the rule offers states a high degree of latitude in developing their 

implementation programs, this shortcoming (referring to EPA's proxy of at-risk nuclear is 

unrepresentative) of the rule actually provides a strong rationale for states to include measures in 

their implementation plans that go far beyond what the rule contemplates. Commenters said for 

example, Illinois could aver that it agrees wholeheartedly with the intent of rule, but 25% of its 

nuclear capacity is at direct risk of closure and all of the reactors have suffered economic losses 

for five years. Commenters said the EPA may not give Illinois full credit toward meeting the 

mandated emissions goal, but the state could still divert substantial resources from renewables 

and efficiency under the rationale provided by the draft rule. 

 Commenters continued what is more, the economic margin affecting the most at-risk units is far 

greater than $6/MWh, so Illinois may propose incentives greater than that. Commenters said 

even if the EPA's insufficient $6 rate were applied to 100% of Illinois' nuclear capacity - as the 

state is now considering doing, and with the draft rule's provisions as one of the primary policy 

rationales 24 - it would cost ratepayers at least $548 million/year, while not preventing a single 

reactor from closing. Commenters said nationally, such a subsidy could total $4.6 billion/year, 

without producing any net benefit. 

Commenters stated despite the availability of detailed information, the EPA opted not to consider 

which reactors were actually at risk of closure. Commenters said the factors placing reactors at 

risk are both plant-specific and locationally specific; as a result, the draft rule's proxy for at-risk 

nuclear is entirely unrepresentative of the nature and scope of the issue it purports to address. 

Commenters said even in Illinois, with more nuclear reactors than any other state, the smallest 

single reactor (Dresden 2, at 869 MW) is 7.5% of the total nuclear capacity in the state; but 

Dresden 2 is actually one of the reactors least at economic risk in Illinois. Commenters said those 

at greatest risk are Clinton (1,065 MW) and Quad Cities 1 and 2 (912 MW each), which add up 
504 

to over 25% of the state's nuclear capacity. Commenters said the reactors' owner, Exelon, has 

also stated that its Byron 1 and 2 reactors could close, which, if true, would raise the total to over

45% of Illinois' nuclear capacity. Commenters said in New York, as in Illinois, over 25% of 

nuclear generation is at risk of closure; in MA, it is 100%; in Ohio 42%, etc. Commenters said as 

a result, the rule as construed literally would not save a single at-risk reactor, and therefore 

would not serve the intended purpose. 

Commenters stated U.S. EPA cannot assume Ohio's, or any other states nuclear capacity can be 

maintained at any percentage level, indefinitely. Commenters noted that Ohio has two nuclear 

facilities that would be affected by this provision, Davis-Besse and Perry. Commenters stated if 

these facilities are unable to maintain operational status, Ohio EPA will not be able to preserve 

6% of their generation and would have to make up for that shortfall with other zero emitting 

generation. Commenters said Ohio would need to replace 993,077 MW-hrs of generation; this is 

equivalent to doubling their wind generation (985,485 MW-h), notwithstanding the fact other 

renewable sources could never fully replace nuclear capacity due to their intermittent nature. 

Commenters said U.S. EPA is over stepping the bounds of Section 111(d) and this element of the 

proposal should be removed. 

Commenters stated U.S. EPA states RE in 2012 represented 12% electricity generation 

nationally (including hydropower) which is up from 9% in 2005. Commenters said in addition, 

U.S. EPA found more than half of the states have established state-level RE with an average of 

almost 20% of 2020 generation supplied by renewables; however, in Ohio, 2012 RE represented 

only 2% of generation (including hydropower) and Ohio is expected to have 9% of 2020 

generation from renewables. 

Commenters continued as part of this proposal, U.S. EPA intends to force states to preserve 

nuclear capacity that is 'at risk' even though U.S. EPA recognizes factors such as 'increasing 

fixed operation and maintenance costs, relatively low wholesale electricity prices, and additional 

capital investments associated with ensuring plant security and emergency preparedness' have 

altered nuclear outlook. Commenters said U.S. EPA acknowledges increasing costs are 

associated with nuclear capacity and undoubtedly this is one of the reasons six nuclear EGUs at 

five plants have retired or been announced for retirement since 2012. Commenters said a nuclear 

lifespan is considered to be 40 years and they are licensed as such; recognizing a nuclear plant's 

design can allow for operation beyond the 40 years, the Nuclear Regulatory Commission will 

grant renewal licenses for 20-year periods. U.S. EPA acknowledges 'according to a recent report, 

nuclear units may be experiencing up to a $6/MW-h shortfall in covering their operating costs 

with electricity sales.' Commenters said erroneously, U.S. EPA has determined it is costeffective and appropriate to require their estimated 6% 'at risk' nuclear capacity to be maintained, 

indefinitely. Commenters disagreed, and had several concerns with the inclusion of nuclear 

capacity, 'at risk' or otherwise, as part of a BSER. 

Commenters concluded U.S. EPA cannot assume Ohio's, or any other states nuclear capacity can 

be maintained at any percentage level, indefinitely. Commenters said Ohio has two nuclear 

facilities that would be affected by this provision, Davis-Besse and Perry; Davis-Besse is 

currently attempting to obtain a license renewal while Perry's operating license expires in March 
505 

of 2026, prior to when the final goals would have to be achieved. Commenters said the process 

of re-licensing by the Nuclear Regulatory Commission is a multi-year highly detailed process; if 

these facilities are unable to maintain operational status, Ohio EPA will not be able to preserve 

6% of their generation and would have to make up for that shortfall with other zero emitting 

generation. Commenters said Ohio would need to replace 993,077 MW-hrs of generation; this is 

equivalent to doubling the wind generation (985,485 MW-h), notwithstanding the fact other 

renewable sources could never fully replace nuclear capacity due to their intermittent nature. 

Commenters stated U.S. EPA is over stepping the bounds of Section 111(d) and this element of 

the proposal should be removed. 

Commenters stated it is arbitrary and capricious to simply assume that each unit of nuclear 

capacity is equally likely to be able to avoid retirement. Commenters also stated in particular, 

EPA fails to evaluate differences in the risk of retirement between competitive and noncompetitive States. Commenters stated that EPA fails to include any safety valves to permit the 

retirement of nuclear capacity at the end of its licensed life. Commenters stated a significant 

portion of the nuclear fleet has already obtained 20-year extensions from the NRC that will 

expire before or shortly after the 2030 compliance date. Commenters said EPA must at least 

consider how to change its analysis if FERC and/or the facility operators determine that those 

facilities have reached the end of their operating life and should be retired. Commenters also 

stated at a minimum, the 'at risk' capacity should be tied to the size of particular nuclear facilities 

as a percentage of a given state's total nuclear fleet. 

Commenters stated: 

a. EPA does not justify the feasibility of its assumptions regarding new nuclear capacity 

and avoided retirements in the administrative record. 

b. EPA's assumptions regarding new nuclear generating capacity and avoided retirements 

are arbitrary, capricious, and unreasonable. 

c. At risk nuclear facilities are not spread evenly throughout the nuclear fleet. It is 

arbitrary and capricious to simply assume that each unit of nuclear capacity is equally 

likely to be able to avoid retirement. 

(i) In particular, EPA fails to evaluate differences in the risk of retirement 

between competitive and non-competitive States. 

d. EPA fails to include any safety valves to permit the retirement of nuclear capacity at 

the end of its licensed life; a significant portion of the nuclear fleet has already obtained 

20-year extensions from the NRC that will expire before or shortly after the 2030 

compliance date; EPA must at least consider how to change its analysis if FERC and/or 

the facility operators determine that those facilities have reached the end of their 

operating life and should be retired. 

e. A 6% 'at risk' capacity is arbitrary and capricious because it fails to address the binary 

nature of nuclear retirements; at a minimum, the 'at risk' capacity should be tied to the 

size of particular nuclear facilities as a percentage of a given state's total nuclear fleet. 
506 

Commenters stated in order to comply with Section 111(d)'s mandate to set achievable standards 

based on BSER and to adequately incentivize the preservation of existing nuclear generation, 

EPA must remove existing nuclear generation from the state goal setting calculation and must 

allow states to include all nuclear generation in the compliance demonstration component of 

their state compliance plans. 

Commenters stated in the third building block of the Agency's BSER determination, EPA is 

proposing to include six percent of each state's historical nuclear capacity in setting the state 

goals. Commenters said six percent represents the percentage of nuclear generation that EPA has 

determined is currently 'at risk' for early retirement based on DOE's Energy Information 

Administration's ("EIA") projections. Commenters said at the same time, the CPP would not 

allow states to account for existing nuclear generation in demonstrating compliance with state 

targets. Commenters said in order to comply with Section 111(d)'s mandate to set achievable 

standards based on BSER and to adequately incentivize the preservation of existing nuclear 

generation, EPA must remove existing nuclear generation from the state goal setting calculation 

and must allow states to include all nuclear generation in the compliance demonstration 

component of their state compliance plans. 

Commenters stated EPA's own statements in this context clearly establish that, even if the six 

percent figure had some legitimacy on a national scale, its relevance to any individual source, or 

for that matter any individual state, is entirely unsupported. 

Commenters stated EPA has not demonstrated that accounting for preservation of six percent of 

a state's existing nuclear generation capacity in setting the state goals is consistent with an 

appropriate determination of BSER under Section 111(d); instead, Section 111(d) requires EPA 

to set standards of performance that reflect the 'degree of emission limitation achievable through 

the application of the best system of emission reduction.' 42 U.S.C. sections 7411(a) & (d). 

Commenters said in the CPP and supporting documents, EPA has failed to provide an adequate 

analysis that suggests that preservation of six percent of the existing nuclear generation capacity 

- defined by EPA as 'at risk' - is achievable in each state. 

Commenters continued in explaining the basis for its determination that preservation of six 

percent of existing nuclear capacity constitutes BSER, EPA itself notes the challenges inherent in 

quantifying the amount of "at risk" nuclear capacity. Commenters said EPA recognizes that 

"each [nuclear plant] retirement decision is based on the unique circumstances of that individual 

unit and that a host of factors - increasing fixed operation and maintenance costs, relatively low 

wholesale electricity prices, and additional capital investment associated with ensuring plant 

security and emergency preparedness - have altered the outlook for the U.S. nuclear fleet in 

recent years." Commenters said despite acknowledging the varied circumstances facing the 

nation's existing nuclear fleet, EPA relies on a single assessment from EIA as the basis for 

concluding that six percent represents the amount of nuclear generating capacity at risk for 

retirement that states will be able to preserve. Commenters said EPA's entire analysis is based on 

EIA's 2014 Annual Energy Outlook, in which EIA "projected an additional 5.7 GW of capacity 

reductions to the nuclear fleet" - reductions which EIA described as "necessary to recognize the 

continued economic challenges faced by the higher-cost nuclear units." Commenters said 

incredibly, EPA concludes its analysis by stating that without making any judgment about the 

likelihood that any individual EGU will retire, they view this 5.7 GW, which compromises an 
507 

approximately six percent share of nuclear capacity, as a reasonable proxy for the amount of 

nuclear capacity at risk of retirement. Id. (emphasis added) Commenters said EPA's own 

statements in this context clearly establish that, even if the six percent figure had some 

legitimacy on a national scale, its relevance to any individual source, or for that matter any 

individual state, is entirely unsupported. 

Commenters also stated in addition to providing no justification for its determination that six 

percent of the existing nuclear fleet is at risk for retirement, EPA has not shown that preservation 

of the identified six percent even would be 'achievable,' a finding which is expressly required by 

Section 111(d). Commenters said in fact, EPA's entire analysis is as follows: because Nuclear 

EGUs have low variable operating costs, Nuclear EGUs 'typically are dispatched before fossilfuel fired EGUs,' Id. at 34780. Commenters said therefore, '[i]ncreasing the amount of nuclear 

capacity relative to the amount that would otherwise be available to operate is a technically 

viable approach to support reducing CO2 emissions from affected fossil fuel-fired EGU.' Id. 

Commenters said one 'way to increase the amount of available nuclear capacity is to preserve 

existing nuclear EGUs that might otherwise be retired.' Id. Commenters said this analysis 

completely fails to consider the achievability of preserving six percent of the existing nuclear 

fleet, as EPA simply assumes such preservation can be achieved. 

Commenters concluded the inclusion of existing nuclear generation in the state goal-setting 

calculation is inconsistent with the concept of BSER because it would penalize states that have 

already made significant investments in reducing GHG emissions by prioritizing zero-emitting 

nuclear generation. Commenters said Section 111(d) prohibits an approach to BSER that fails to 

differentiate the relative performance levels of the states in regards to limiting CO2 emissions; 

therefore, to the extent that inclusion of existing nuclear generation in the state goal setting 

calculation would penalize states that emit less CO2 because of the existing nuclear assets 

already contained within the states, such approach would violate Section 111(d). Commenters 

said in light of EPA's failure to demonstrate that preservation of six percent of existing nuclear 

capacity constitutes BSER, and the fact that inclusion of existing nuclear generation in state 

goal-setting is inconsistent with Section 111(d)'s mandate to set performance standards based on 

BSER, EPA must set final state goals without consideration of this factor. 

Commenters stated that Section 111(d) allows for, and the objectives of the rulemaking effort 

demand that, existing nuclear generation be applied towards state compliance demonstrations. 

Commenters noted that the CPP authorizes states to include new nuclear generation as a 

component in state compliance plans, and states that it is inconsistent with Section 111(d) and 

the purpose of the CPP to distinguish new from existing nuclear generation in this context. 

Commenters stated that both the language in Section 111(d) and EPA's repeated statements in 

the context of rulemaking development confirm that the final rule may not have the effect of 

requiring the states to implement all emission reduction techniques considered by EPA in 

determining BSER for the regulated source category; rather, Section 111(d) mandates that the 

Emission Guidelines developed by EPA preserve to states a range of alternative compliance 

methodologies for ensuring the application of BSER-equivalent performance by the regulated 

sources. Commenters said therefore, regardless of the propriety of EPA's consideration of 

existing nuclear generation for purposes of setting the state goals, Section 111(d) allows for, and 
508 

the objectives of the rulemaking effort demand that, existing nuclear generation be applied 

towards state compliance demonstrations. 

Commenters stated the CPP proposes to authorize states to include new nuclear generation as a 

component of state plans. Commenters supported this approach; however believed that it is 

inconsistent with Section 111(d) and the purpose of the CPP to distinguish new from existing 

nuclear generation in this context. Commenters said any future nuclear EGUs would be 

providing the same zero-emissions generation capacity as existing EGUs; thus, there is no reason 

to allow future nuclear generation to count towards state compliance demonstrations, but then in 

the same vein disallow inclusion of existing nuclear technology that has been consistently 

employed to reduce GHG emissions. Commenters said indeed, EPA does not even offer an 

explanation for the proposed rule's disparate treatment of existing nuclear generation. 

Commenters stated failure to allow for existing nuclear generation in state compliance plans also 

would have the effect of penalizing states which have already achieved reduced carbon footprints 

through existing nuclear fleets; under the CPP, states with existing nuclear units would not be 

allowed to benefit from the zero-emitting generation of these units, whereas states that construct 

new units would secure compliance benefits from the same technology. Commenters said this 

outcome is inconsistent with Section 111(d) and actually serves to disincentivize the continued 

operation of existing nuclear EGUs. 

Commenters stated most importantly, the final rule must allow for existing nuclear generation as 

a component of state plans in order to continue promoting reliable and affordable electric 

generation with decreased GHG emissions; existing nuclear generation accounts for roughly 

20% of the United States' electric output. Commenters said in addition, existing nuclear 

generation is essential to the reliability of the electric grid and affordability of electricity to 

consumers. Commenters said nuclear generation accomplishes all of this while contributing zero 

GHG emissions; the CPP, however, is contrary to Section 111(d) in failing to recognize that 

current implementation of this "emission reduction" technology must be deemed fully equivalent 

to new nuclear generation relative to any BSER determinations for carbon emissions from 

electricity generation. Commenters said allowing states to account for all of their existing nuclear 

generation in their compliance demonstrations is consistent with the CPP as it will promote 

electric generation while decreasing GHG emissions.

Commenters stated that they do not support an option where the EPA could establish a process 

that, in the event of a nuclear unit's premature shutdown, the lost nuclear kilowatt-hours would 

be removed from the state's compliance calculation. 

Commenters stated full compliance credit should be given to existing nuclear generation because 

such generation avoids GHGs that may otherwise be emitted from fossil fuel-fired units; at a 

minimum, the final rule must treat the following types of nuclear generation in a manner 

consistent with new nuclear generation for purposes of state compliance demonstrations. 

Commenters stated they do not support the option proposed by some in the industry - where EPA 

could establish a process that, in the event of a nuclear unit's premature shutdown, the lost 

nuclear kilowatt-hours would be removed from the state's compliance calculation. 
509 

Commenters stated that the CPP's nuclear capacity considerations reflect an inherent bias toward 

new nuclear generation, and that the national six percent proxy for the amount of nuclear 

capacity at risk of retirement is inappropriate. 

Commenters opposed the CPP's approach toward nuclear energy; as proposed, the CPP's nuclear 

capacity considerations reflect an inherent bias towards building new nuclear capacity. 

Commenters said the CPP acknowledges that new nuclear capacity is extremely costly, which 

translates into a bias towards traditional, vertically-integrated states that utilize rate of return 

regulation. Commenters said all five nuclear EGU's that are currently under construction are in 

traditionally regulated states; consequently, the superficial nuclear considerations penalize 

deregulated states such as Ohio which depend on market conditions to develop new generating 

units. 

Commenters stated not only do the CPP's nuclear capacity considerations disadvantage 

deregulated states, the CPP again overgeneralizes by using a national six percent proxy for the 

amount of nuclear capacity at risk of retirement. Commenters said while the six percent figure is 

derived from the US EIA Annual Energy Outlook, it fails to reflect the fact that Ohio's nuclear 

generation fleet accounts for almost 12 percent of the state's electricity generation portfolio> 

Commenters stated that states should not be penalized for existing nuclear generation that is not 

at risk. 

Commenters stated Arizona Public Service (APS), the operator of PVNGS, developed a concept 

for how EPA could provide even more meaningful credit to nuclear generation in its Proposed 

Rule that would not dramatically change Arizona's emissions rate goals, but would provide better 

recognition to Arizona for its nuclear resource. Commenters supported APS's proposed approach 

as a more appropriate methodology for incorporating nuclear generation into the CO2 goals; the 

proposal has two components: 

1. Remove the 5.8% nuclear component from the denominator of the EPA's CO2 

goal calculation. 

2. When demonstrating compliance with the CO2 goals, allow states to take credit 

for a portion of annual nuclear generation in excess of the average historical 

performance of the fleet; the average capacity factor of a nuclear unit over its 

lifetime is approximately 80%; therefore, beginning in the first compliance year 

associated with the rule (2020), and in each year thereafter, if a nuclear unit 

exceeds 80% capacity factor, allow any generation in excess of that 80% capacity 

factor threshold to be included in the denominator of the CO2 emission rate 

calculation, which would provide credit towards compliance with the state's CO2 

goals. 

Commenters urged EPA to consider adopting the methodology proposed by APS to credit 

Arizona's investment in PVNGS, and similar investments in other states. Commenters said this 

approach would ensure states with nuclear generation like Arizona are not unduly penalized, as 

well as provide those states with a meaningful incentive to keep nuclear EGUs online and 

operating. 
510 

Commenters stated instead of applying a generic 'at-risk' factor to all existing nuclear generation, 

EPA should apply a site-specific 'at-risk' factor where nuclear generation is really at risk. 

Commenters said with the current approach, EPA is diluting impacts where nuclear generation is 

actually 'at risk' and creating issues where it is not at risk, such as in Arizona; EPA should 

remove the 'at-risk' nuclear component from the goal calculation for Arizona." 

Commenters stated EPA's proposal fails to fully recognize the large percentage of carbon-free 

generation resources already present in Arizona; Arizona is home to the Palo Verde Nuclear 

Generation Station (PVNGS), the largest nuclear power generating station in the United States. 

Commenters added that SRP owns 17.49% of this facility and it is an important provider of 

baseload generation in the company's resource portfolio. 

Commenters stated for the purposes of goal-setting, EPA claims that a certain percentage of the 

U.S. nuclear fleet is at risk of retiring for various reasons and that 'preserving the operation of atrisk nuclear capacity would likely be capable of achieving CO2 reductions from affected EGUs 

at a reasonable cost.' Commenters said EPA has therefore proposed to include an 'at-risk' nuclear 

component in the CO2 goals for all states with nuclear generation; this 'at-risk' nuclear 

component is calculated as 5.8% of the nuclear capacity in each state, assuming a 90% capacity 

factor. 

Commenters stated EPA's incorporation of a percentage of PVNGS's 2012 generation into 

Arizona's goals based on a presumption that 5.8% of U.S. nuclear capacity is at risk of retirement 

provides no substantive recognition of the fact that this facility comprises approximately onethird of the generation produced in Arizona and is not at risk of near-term retirement. 

Commenters said the U.S. Nuclear Regulatory Commission approved the extension of all three 

PVNGS units by an additional 20 years; Unit 1 is permitted to operate through 2045, Unit 2 

through 2046, and Unit 3 through 2047. 

Commenters stated instead of applying a generic "at-risk" factor to all existing nuclear 

generation, EPA should apply a site-specific "at-risk" factor where nuclear generation is really at 

risk. Commenters said with the current approach, EPA is diluting impacts where nuclear 

generation is actually "at risk" and creating issues where it is not at risk, such as in Arizona; EPA 

should remove the "at-risk" nuclear component from the goal calculation for Arizona. 

Commenters stated for the purposes of compliance planning, EPA proposes that nuclear 

generation would count towards compliance with a state goal only if this generation meets or 

exceeds a 90% capacity factor. Commenters said if the nuclear generation does not meet the 90% 

capacity factor threshold in a given compliance year, the state would have to implement more 

renewable generation or energy efficiency measures to offset the shortfall in nuclear generation. 

Commenters said this approach is problematic as it could be routine that the capacity factor of a 

nuclear plant falls below 90% in any given year due to outages required for refueling, regular 

maintenance, or to address certain regulatory required modifications. Commenters said by 

relying on a 90% capacity factor, EPA is penalizing rather than rewarding states that have 

nuclear generation. 

Commenters stated that EPA's treatment of existing nuclear capacity is also arbitrary because it 

is inconsistent with the agency's treatment of other large, existing sources of zero-carbon 
511 

electricity such as hydroelectric dams and renewable energy facilities. Commenters said yet both 

hydroelectric facilities and renewable energy facilities also face market and non-market 

challenges that could lead to reduced capacity or shutdown in future years. Commenters said 

despite this similarity, EPA has not proposed to penalize states that retire existing hydroelectric 

or RE capacity by incorporating an assumption about "at risk" hydroelectric or RE generation 

into state goals. Commenters said as with under-construction nuclear generation, EPA should not 

arbitrarily treat zero-carbon generation from existing nuclear facilities differently from other 

zero-carbon generation. Commenters said to fix this discrepancy, EPA should treat all existing 

zero-carbon facilities (including nuclear, hydroelectric, and RE facilities) identically in its 

calculation of states' emission goals. 

Commenters stated that EPA's proposal to incorporate approximately 5.8% of each state's 

existing nuclear capacity (which EPA calls "at risk" capacity) in calculating the state's emission 

goal is also arbitrary and capricious for a number of reasons; to begin with, the assumption that 

South Carolina may retire some of its existing nuclear capacity is unreasonable in light of the 

fact that the state's utilities, including Santee Cooper, have recently invested billions of dollars in 

building additional nuclear capacity in the state. Commenters said it is also unreasonable because 

the U.S. nuclear units that are at risk of retirement are largely located in competitive wholesale 

electricity markets. Commenters said in South Carolina's case, the costs of past utility 

investments in nuclear are already included in customers' rates under terms approved by the 

Santee Cooper Board or, in the case of SCANA Corporation, the South Carolina Public Service 

Commission; therefore, future electricity market fluctuations-such as those that generators in 

competitive wholesale markets may experience-will not put South Carolina's units at risk of 

retirement. 

Commenters recommended removing the 5.8% "at risk" adjustment in calculating a state's 

emission goals. Commenters also recommended allowing South Carolina to include 100% of its 

actual on-line generation towards compliance. Commenters stated that none of South Carolina's 

existing operational nuclear units were scheduled for retirement prior to 2030, and that none of 

the existing operational nuclear generation was "at risk." 

Commenters stated over 6,500 MW of nuclear capacity is presently operational in South 

Carolina; this capacity is supported by South Carolina ratepayers and represents sizeable 

investments by South Carolina electric utilities. Commenters said these electric utilities, with the 

approval of the state's regulators, made decisions years ago to make significant investments in 

reliable, non-carbon emitting nuclear generation, and South Carolina should receive the benefit 

of those decisions. 

Commenters stated the Proposed Rule does not recognize South Carolina's commitment to noncarbon emitting generation that has resulted in a lower carbon footprint in South Carolina for 

over thirty years; instead, the Proposed Rule includes an adjustment based on 5.8% of a state's 

existing nuclear capacity. Commenters said the EPA states that this adjustment represents an 

amount of nuclear capacity at risk of retirement across the country. Commenters said the 

practical effect of this "at risk" factor drives down the emission rate goal of South Carolina and 

other states with existing nuclear generation thereby making compliance more expensive for 

consumers. 
512 

Commenters stated South Carolina has a proven historical (and future) commitment to non-GHG 

emitting nuclear generation; none of South Carolina's existing operational nuclear units are 

scheduled for retirement before 2030; therefore, the 5.8% 'at risk' factor intended to preserve 

existing nuclear generation clearly does not apply to South Carolina and should be removed from 

the goal calculation. Commenters said rather than penalize South Carolina by including this 

5.8% 'at risk' factor, South Carolina should be allowed to include 100% of its actual on-line 

generation toward compliance with the state goal. Therefore, the commenters recommended the 

removal of the 5.8% penalty for 'at risk' nuclear generation in determining the state goal. 

Commenters stated that the Grand Gulf Nuclear Station represents almost 75% of the zero 

carbon generation used in the goal calculation for Mississippi in 2020 and almost 50% of the 

zero carbon generation in 2030. Commenters asked when a single source represents such a large 

percentage of the zero carbon generation used to calculate a state's goal, what is a state supposed 

to do in the event that source is unavailable for an extended period of time or has a catastrophic 

failure that results in the plant never being placed back into service? 

Commenters stated also with building block 3, the EPA adds 631,874 MWh to the denominator 

of the Mississippi CO2 goal calculation for "at risk" nuclear generation. Commenters said the 

EPA derives this number by multiplying the nuclear capacity in the relevant state by 6%; adding 

these MWh to the CO2 emissions rate denominator further exacerbates the already extremely 

low emissions rate goal for the state. Commenters said there is no justification for this arbitrarily 

being added to the denominator of the CO2 goal calculation, as there is no nuclear generation in 

Mississippi that is "at risk", and the EPA should eliminate it. 

Commenters stated additionally, the EPA did not give adequate credit to states with nuclear 

generation nor take into account recent investments in these facilities; as an example, SMEPA 

invested $77.5 Million in the Extended Power Uprate project at the Grand Gulf Nuclear Station 

thereby achieving additional zero carbon generation. Commenters said the EPA's handling of 

nuclear generation has in effect penalized SMEPA for early action; further, this investment in 

zero carbon generation means that SMEPA has less capital to invest in other generation options. 

Commenters stated they understand that the EPA assumed that the average annual nuclear plant 

generation availability of capacity factor is approximately 90% on a national basis; this does not 

reflect reality. Commenters said the national average lifetime capacity factor through 2013 for 

nuclear plants is 80.3%. Commenters said the Grand Gulf Nuclear Station located in Mississippi 

has outperformed the National Average with a lifetime Capacity factor of 86.6%; however, the 

difference between 86.6% and 90% represents an annual average of 377,066 MWh of zero 

carbon generation that the EPA assumes to be available and in operation in Mississippi and it 

simply is not. 

Commenters stated additionally, Grand Gulf represents almost 75% of the zero carbon 

generation used in the goal calculation for 2020 and almost 50% of the zero carbon generation in 

2030. (This is viewing the MWh used for EE in the goal calculation as zero carbon generation.) 

Commenters said when a single source represents such a large percentage of the zero carbon 

generation used to calculate a state's goal, what is a state supposed to do in the event that source 

is unavailable for an extended period of time or has a catastrophic failure that results in the plant 

never being placed back into service? 
513 

Commenters stated that at-risk" nuclear generation should not be included as a component of 

BSER. Commenters stated unlike incremental generation from new nuclear facilities or uprated 

reactors, the preservation of existing nuclear generation does not appear to be a 'system of 

emission reduction,' because preservation of this capacity does not reduce CO2 emissions below 

historic levels; rather, preservation of existing nuclear generation will, at best, allow fossil fueled 

EGUs to continue emitting at the same level that they emitted in the past; therefore, from a legal 

perspective, it appears that inclusion of at-risk nuclear generation fails to satisfy the statutory and 

regulatory requirements that state performance standards and the EPA guidelines must be based 

on application of the 'best system of emission reduction.' 

Commenters had concerns over the EPA's proposed incorporation of a uniform 5.8% of 

expected generation from existing 'at-risk' nuclear reactors in calculating state goals; unlike 

incremental generation from new nuclear facilities or uprated reactors, the preservation of 

existing nuclear generation does not appear to be a 'system of emission reduction,' because 

preservation of this capacity does not reduce CO2 emissions below historic levels; rather, 

preservation of existing nuclear generation will, at best, allow fossil fueled EGUs to continue 

emitting at the same level that they emitted in the past. 

Commenters stated in addition, the EPA's assumption that 5.8% of each state's existing nuclear 

capacity is at risk of retirement is supported neither by the Energy Information Administration 

(EIA) study cited in the Proposed Rule nor by the actual reality of the electric system in many 

parts of the country, including the West. Commenters said although certain nuclear facilitiesparticularly those in competitive wholesale electricity markets-are at risk of retirement for 

economic or other reasons, units in others states are likely to continue operating for many years. 

Commenters said for example, the Palo Verde Nuclear Generating Station in Arizona, in which 

SCPPA members own partial interests, recently had its license extended until 2042, and is highly 

unlikely to retire due to its importance in maintaining grid reliability in the West. Commenters 

said if the EPA decides to include at-risk nuclear generation in the final rule, the agency should 

review the status of nuclear facilities in each state or region, and only apply this assumption to 

states or regions where there is a real risk of retirement. 

Commenters stated that, if the EPA decides to include at-risk nuclear capacity in the goal 

calculation, up to 5.8% of a state's annual nuclear generation should count toward compliance, 

regardless of whether nuclear facilities in the state operated at the assumed 90% capacity factor 

or some other level. Commenters said if a state can increase utilization of existing nuclear 

generation such that 5.8% of its generation exceeds the amount of MWh included in the goal 

calculation, it should be able to count the full 5.8% toward compliance. Commenters said 

similarly, if nuclear generation falls below the levels assumed in the goal calculation, 5.8% of the 

actual MWh generated by the state's nuclear fleet should still count toward compliance. 

Commenters stated that the four nuclear units in Virginia are expected to continue operated at 

above 90 percent capacity through 2030. 

Commenters stated under building block 3, EPA applied the assumption that 6 percent of 'at-risk' 

nuclear capacity would be retained and the units would operate at a 90 percent capacity factor; 

this resulted in the retention of 187 MW of nuclear generation in Virginia. Commenters said the 

four nuclear units in Virginia, which are all owned by Dominion, are expected to continue 
514 

operating at above a 90 percent capacity factor through 2030. Commenters said the licenses on 

these four nuclear units are not set to expire before 2030 (Surry 1 in 2032, Surry 2 in 2033, North 

Anna 1 in 2038, and North Anna 2 in 2040). Commenters said as such, Dominion already has 

plans to retain this 6 percent of nuclear generation. 

Commenters stated applying the 6 percent assumption to Virginia's existing nuclear fleet in the 

same manner that EPA applied the assumption in its formula results in a reduction from 1,031 

lbs/MWh to 998 lbs/MWh, a decrease of 33 lbs/MWh. 

Commenters stated that Georgia's nuclear fleet is expected to be retained through 2030. 

Commenters stated Georgia's existing nuclear fleet provided 28.7 million MWh of generation in 

2012; EPA assumes that 5.8 percent of this generation will remain on-line through 2030, and 

provides a credit for the amount of generation this would represent: 1.8 million MWh. 

Commenters said this lowers Georgia's emission rate by 29 lbs/MWh or approximately 4 percent 

of the target reduction. Commenters said EPA's assumption is conservative in light of the utility's 

most recent resource plan, which shows it retaining all of its current nuclear fleet through 2030. 

Utility plans regarding under-construction nuclear 

Commenters stated Georgia Power is in the process of constructing two new nuclear units, 

totaling 2,200 MW, at its Plant Vogtle facility near Waynesboro, Georgia. Commenters said the 

two units have expected operation dates of December 2017 and December 2018, respectively. 

Commenters said assuming, as EPA does, a 90 percent capacity factor, these units would 

produce more than 17 million MWh of zero-carbon generation annually. 

Commenters stated that the assumption 5.8% at risk lowers North Carolina's target emission rate 

by 38 lbs/MWh. 

Commenters stated with respect to at-risk nuclear generation, Illinois urges USEPA to reconsider 

making Illinois' goals more stringent in comparison to states that have a lesser amount or no 

nuclear generation. Commenters said this presents an equitability issue wherein states with less 

nuclear generation than Illinois find themselves with a less stringent goal adjustment. 

Commenters said if USEPA desires to incentivize the preservation of nuclear generation it must 

consider doing so in a manner that does not make a state's goals more stringent on the front-end, 

but instead rewards states for preserving nuclear generation in the back-end compliance 

demonstrations; for example, USEPA could allow states to credit an additional amount of 

generation and/or CO2 reductions in a back-end compliance demonstration as a bonus for 

preserving nuclear generation. Commenters said USEPA should consider giving states the 

flexibility and option for determining the appropriate amount of nuclear credit available in 

compliance calculations. 

Commenters stated that existing nuclear capacity is not "at-risk" in Tennessee, recommended 

that the EPA remove 'at-risk' nuclear from BSER as this strategy has not been adequately 

demonstrated, the cost may very well not be reasonable, and EPA's regulation of carbon at 

affected EGUs will, in-and-of-itself, provide incentive for states and utilities to preserve nuclear 

capacity if the cost is reasonable. 
515 

Commenters stated EPA believes that another way to increase the amount of available nuclear 

capacity is to preserve existing nuclear EGUs that might otherwise be retired. Commenters said 

EPA recognizes that nuclear unit retirement is determined by a number of factors. Commenters 

said despite that fact, EPA cites to recent announcements for retirements of some nuclear units as 

reasonable data from which to premise the need to include some amount of existing nuclear 

within BSER. Commenters said further, EPA indicates that EIA's Annual Energy Outlook 

projecting an additional 5.7 GW of capacity reductions in the nuclear fleet, not tied to projections 

of actual retirements, is a reasonable proxy for the amount of nuclear capacity at risk of 

retirement. Commenters said EPA also indicates the cost to retain this approximate 6 percent of 

capacity is reasonable, based on one report's indication that aging nuclear units may be 

experiencing up to a 6 dollar/MWh shortfall in covering their operating costs with electricity 

sales, which EPA translates into approximately 12 dollar to 17 dollar per metric ton of CO2. 

Commenters asserted EPA's assumption that "at-risk" nuclear is adequately demonstrated as an 

appropriate strategy for BSER and that its cost is reasonable are unfounded; also, existing 

nuclear capacity is not "at-risk" in Tennessee. 

Commenters stated as with under-construction nuclear, EPA's inclusion of "at-risk" nuclear 

disproportionally impacts only certain states with existing nuclear units, although the relative 

size of the impact is much less than with under-construction nuclear; more importantly, inherent 

in EPA's inclusion of "at-risk" nuclear in BSER is the belief that by the addition of about 6 

percent existing nuclear capacity in mandatory state goals, states and utilities will be incentivized 

to retain nuclear units that are otherwise not economically viable. Commenters said this assumes 

that the value of that capacity would spur further investment in or additional operational capital 

to operate a nuclear unit that is not currently viable; however, to date, Commenters is unaware, 

and EPA has not provided evidence, of any state or utility that has actually retained nuclear 

capacity due to either (1) the projection of carbon regulation or (2) the additional stringency of 

other, relevant, EPA air regulations. Commenters asserted the regulatory environment already 

exists to incentivize investment in and preservation of nuclear capacity and believes it would 

have already occurred if the cost was reasonable. Commenters said EPA relies on a shortfall in 

covering operating costs as a proxy to determine the cost of including "'at-risk" nuclear in BSER, 

but it may very likely be that other costs, including daunting capital investment costs are also 

impacting the decisions around certain nuclear units, among other factors. Commenters said 

given the little supporting documentation and thoughtful consideration EPA has provided for the 

inclusion of "at-risk" nuclear within BSER and its relative cost, the commenters asserted this 

particular strategy has not been adequately demonstrated, nor has EPA proven its cost is 

reasonable. 

Commenters stated nuclear capacity is not "at-risk" in Tennessee; none of the nuclear facilities in 

Tennessee are scheduled for retirement within the compliance period. Commenters said in fact, 

the retirement year for Tennessee's oldest unit (Sequoyah 1) is slated for 2041, nearly a decade 

after the proposed compliance period; to suggest that Tennessee's nuclear units are "at risk" of 

retirement simply does not align with reality. Commenters said furthermore, it is inconsistent to 

assume that units are "at risk" of retirement in a state that is currently pursuing, and is heavily 

invested in, construction of a new nuclear unit. Commenters said to assume that nuclear units are 

at risk in a state that will be the first to bring on a new nuclear unit in a very long while is 

contradictory. Commenters recommended EPA remove "at-risk" nuclear from BSER as this 

strategy has not been adequately demonstrated, the cost may very well not be reasonable, and 
516 

EPA's regulation of carbon at affected EGUs will, in-and-of-itself, provide incentive for states 

and utilities to preserve nuclear capacity if the cost is reasonable. 

 

Commenters stated that although there are nuclear plants at risk, they are generally located in 

states with competitive markets, not evenly distributed among all states with nuclear capacity. 

Commenters said EPA's approach is thus arbitrary, indefensible analytically, and provides no 

incentive for states to preserve nuclear capacity at risk. Commenters said EPA should work with 

NEI to properly account for existing nuclear capacity at risk of premature shutdown. 

Commenters stated with 25 to 40 percent of the existing operating nuclear plants that are at risk 

of shutting down by 2040, there is no basis for EPA's assumed 6 percent 'at-risk' assumption for 

existing nuclear plant capacity; moreover, since 100 percent of existing renewable generation 

capacity is recognized in Building Block #3, the EPA should recognize 100 percent of the U.S. 

nuclear operating capacity. 

Commenters recommended that nuclear power should be excluded from the rule entirely. 

Commenters stated that the 6 percent reduction in the state goal is far too small to provide any 

meaningful incentive to keep them existing nuclear units operating. Commenters supported a 

proposal that nuclear generation should not be part of the goal calculation but could serve as a 

component of the state's compliance with the goal if the plant's capacity factor exceeds an 

industry-wide historical threshold. 

Commenters believed nuclear power should be excluded from the rule entirely. Commenters said 

the EPA's purported objective for including nuclear energy in the state goal calculation is to 

provide an incentive for nuclear plants that are 'at risk' of being prematurely retired due to 

financial considerations. 

Commenters stated unfortunately, the EPA's solution to this objective is fundamentally flawed; 

first, for states that actually have 'at risk' nuclear power plants, a modest 6 percent reduction in 

the state goal is far too small to provide any meaningful incentive to keep them operating. 

Commenters said in fact, what the EPA has done by distributing the "at risk" component of the 

goal calculation across all states with nuclear generation is to dilute the incentive to the point of 

being meaningless for those "at risk" plants. 

Commenters suggested the EPA to consider a pragmatic solution put forward by Arizona Public 

Service that states should be allowed to take credit for the portion of annual nuclear generation in 

excess of the average historical performance of the nuclear fleet. 

Commenters supported a proposal being offered by Arizona Public Service Co., operator of Palo 

Verde. Commenters said APS has proposed that nuclear generation should not be part of the goal 

calculation but could serve as a component of the state's compliance with the goal if the plant's 

capacity factor exceeds an industry-wide historical threshold. Commenters referred the EPA to 

the comments of APS for details relating to this proposal. 

Commenters stated that the Palo Verde Nuclear Generating Station (Palo Verde) in Arizona is 

not by any means 'at risk' of early retirement. Commenters supported a proposal that nuclear 

generation should not be part of the goal calculation but could serve as a component of the state's 
517 

compliance with the goal if the plant's capacity factor exceeds an industry-wide historical 

threshold. 

Commenters stated the methodology punishes states like Arizona that have made prudent 

investments in nuclear energy. Commenters said the Palo Verde Nuclear Generating Station 

(Palo Verde) in Arizona is not by any means "at risk" of early retirement. Commenters said it is 

fully licensed past 2040, and its output is essentially fully subscribed for decades. Commenters 

said the EPA's inclusion of a portion of the generation from Palo Verde in calculating the 

Arizona goal does nothing more than create unnecessary compliance risk for the state; the 

owners of Palo Verde will not modify their operation of the unit based on the inclusion of a 

portion of its generation in the Arizona goal calculation, as any incentive to do so is dwarfed by 

existing economic considerations to operate at the highest reasonably possible capacity factor. 

Commenters supported a proposal that nuclear generation should not be part of the goal 

calculation but could serve as a component of the state's compliance with the goal if the plant's 

capacity factor exceeds an industry-wide historical threshold. 

Commenters stated that the EPA fails to consider the possibility that an economic or 

other operational circumstance might exist by which the unit owner or the NRC - the federal 

body with regulatory authority over nuclear units - might determine that a facility has reached 

the end of its useful life. 

Commenters stated in building block three, EPA assumes that no "at-risk" nuclear energy power 

plants will be retired and that all units currently under construction will come online. 

Commenters said EPA assumes that six percent of the entire nuclear fleet is at-risk and by 

keeping those units in operation, states can achieve additional emission reductions. Commenters 

said EPA fails to consider the possibility that an economic or other operational circumstance 

might exist by which the unit owner or the NRC - the federal body with regulatory authority over 

nuclear units - might determine that a facility has reached the end of its useful life. Commenters 

said the record is insufficient to support EPA's assumptions in building block three as it relates to 

nuclear units. 

Commenters stated the Proposed Regulation fails to recognize Virginia's significant investment 

in and utilization of zero-carbon nuclear generation and instead arbitrarily and capriciously 

penalizes Virginia by including "at risk" nuclear generation in the calculation of Virginia's 

Mandatory Goals. 

Commenters stated more than 3,500 MW of nuclear capacity is located in Virginia and supported 

by Virginia ratepayers; through capacity uprates, approximately 150 MW of nuclear capacity has 

been added since 2010, at a cumulative initial capital cost of approximately $500 million dollars. 

Commenters stated as a result of Virginia's historic and continuing investment in this nuclear 

fleet, a significant amount of the electric generation that provides reliable electric service in 

Virginia is zero-carbon nuclear generation; for example, 40% of the electricity generated in 

Virginia was provided from nuclear facilities in the 2012 base year used by the Proposed 

Regulation to calculate Virginia's Mandatory Goals. 
518 

Commenters stated yet, the Proposed Regulation does not recognize this significant investment 

in the nuclear fleet or the substantial resulting zero-carbon energy production in Virginia that has 

historically lowered Virginia's carbon footprint. Commenters said to the contrary, the Proposed 

Regulation illogically penalizes Virginia for its nuclear fleet by including "at risk" nuclear 

production in the denominator of its mathematical formula and basing the Mandatory Goals on 

2012 generation levels. Commenters said including an "at risk" nuclear component in the 

formula for Virginia - along with other unlawful components of the formula has the effect of 

driving the Proposed Regulation's emission rates for Virginia unreasonably and unlawfully low. 

Commenters stated including higher than normal zero-carbon energy production in EPA's 

formula drives down the emission rates that Virginia and other States must achieve, making 

compliance more difficult to achieve; this is because the Mandatory Goals are calculated by 

adjusting a basic ratio of: 

Carbon emissions / megawatt hours of production 

Commenters stated adding into this formula production from resources that have no carbon 

emissions only increases the denominator of the ratio, and has no effect on the numerator. 

Commenters stated so each megawatt hour of zero-carbon production added by EPA for "at risk" 

nuclear and renewable resources, as well as the energy efficiency added in by EPA, lowers the 

Mandatory Goals and requires deeper carbon emission reductions. 

Commenters stated penalizing Virginia for its zero-carbon generation in this way is flatly 

inconsistent with the Proposed Regulation's purported goal of reducing carbon emissions (much 

less doing so without compromising reliability or reasonable costs). Commenters said continued 

use of existing (in addition to new) nuclear generation capacity, which provide reliable base load 

generation that is carbon-free, should be allowed to count for compliance with the Proposed 

Regulation. Commenters said the 3,500 MW of zero-carbon nuclear capacity in Virginia 

dispatches ahead of fossil-fuel facilities, thereby massively reducing the carbon emissions 

associated with providing reliable electric service. Commenters said a rule intended to reduce 

carbon emissions should reward - not penalize - Virginia customers for their significant 

investment in this carbon-free nuclear generation. 

Commenters stated EPA's calculation of each state's baseline emissions rate is skewed by the 

adjustments made for hydropower and at-risk nuclear. Commenters asserted these adjustments 

provide more confusion than clarity for states and utilities. 

Commenters stated EPA should give more support to hydropower and nuclear as valuable, 

carbon-free resources in its Building Block 3. Commenters encouraged EPA to recognize that 

hydro and nuclear power provide added benefits to grid operations by providing load following 

and base load power, respectively. 

Commenters stated that it is unreasonable to assume that all at-risk nuclear generation will not 

retire. 

Commenters stated with respect to the nuclear assumptions, EPA assumes that five nuclear 

plants currently under construction will be completed and become fully operational. Commenters 
519 

said EPA also assumes that the 5.8% of existing nuclear capacity considered "at-risk" for closure 

will remain open. Commenters said EPA then takes this one step further and assumes that the 

new nuclear units and retention of 5.8% of its at-risk nuclear capacity will reduce CO2 emissions 

by operating at 90% capacity. Commenters said with respect to these assumptions, however, 

EPA performs almost no analysis; it is simply unreasonable to assume that all under-construction 

nuclear facilities will come on-line, let alone open on schedule. Commenters said it is also 

unreasonable to assume that all at-risk nuclear generation will not retire. Commenters said West 

Virginia does not have any nuclear facilities, but it and the members of the WVCA will see a 

drop in demand for coal exports as states with nuclear facilities move to replace coal energy with 

nuclear. 

Commenters stated that EPA's decision to count 5.8% of nuclear generation in each state as "at 

risk" and including it in that state's goal is arbitrary and inappropriate. 

Commenters stated that the EPA's decision to count 5.8% of nuclear generation in each state as 

"at risk" and including it in the state's goal is arbitrary and inappropriate. Commenters stated 

Wisconsin currently only has one nuclear power plant that has two reactors, and if this plant 

were to shut down, it would do so unit-by-unit, meaning that 100%, 50% or 0% of its generation 

is at risk. Commenters said it would actually be impossible for the plant to lose 5.8% of its 

capacity; accordingly, requiring the state to preserve that 5.8% of 'at risk' generation is arbitrary.

Commenters stated that using 5.8% as the level of 'at risk' nuclear was derived based on national 

data; while this percentage may be meaningful at the national level, it has no relevance at an 

individual state level. Commenters said Wisconsin currently only has one nuclear power plant 

that has two reactors, and if this plant were to shut down, it would do so unit-by-unit, meaning 

that 100%, 50% or 0% of its generation is at risk. Commenters said it would actually be 

impossible for the plant to lose 5.8% of its capacity; accordingly, requiring the state to preserve 

that 5.8% of 'at risk' generation is arbitrary. 

Commenters stated generation from Wisconsin's Point Beach Nuclear Plant should not be 

considered 'at risk' at all until its licenses expire, at which point EPA should recalculate the 

state's goal as discussed below. Commenters said this facility has long-term power purchase 

agreements for its power and it is in a rate-regulated state, meaning that its generation should be 

considered secure until its scheduled retirement; in addition, its owner (NextEra Energy) recently 

invested in an extended power uprate to increase the capacity of the plant supported by a longterm power purchase agreement with WPPI Energy, making it even less likely that this plant will 

close prematurely. Commenters said accordingly, Wisconsin does not have any "at risk" nuclear 

generation and should not have a goal for this part of building block 3. 

Commenters stated that by assigning states with existing nuclear capacity more stringent goals, 

EPA's proposed 'at-risk' nuclear provision penalizes Wisconsin. 

Commenters stated by assigning states with existing nuclear capacity more stringent goals, 

EPA's proposed "at-risk" nuclear provision penalizes Wisconsin. 

Commenters stated that EPA's decision to allow a maximum of 5.8% of the at-risk nuclear 

generation to be used in compliance calculation provides an insufficient incentive for units to 
520 

continue operation. Commenters urged EPA to remove all existing nuclear from the goal 

calculation, while allowing states the flexibility to use 5.8% or more of this nuclear generation 

when meeting state CO2 targets. Commenters mentioned that this alternative approach is entirely 

consistent with the NARUC Resolution passed on Nov. 19, 2014 compared to the original 

approach which incentivizes the continued use of existing nuclear that might bring unforeseen 

future circumstances that could force retirement of existing nuclear unit. Commenters suggested 

that if EPA insists on keeping the 5.8% in the goal calculation, then it should significantly 

increase the amount of existing nuclear generation available for use in complying with the state 

target rates. 

Commenters recommended removing the 5.8% "at risk" nuclear component from goal setting, 

but allowing compliance credit for new nuclear and nuclear uprates. Commenters stated that the 

"at risk" percentage was arbitrary and not well supported. Commenters also stated that 

presumably a state would be able to include generation from the "at risk" portion in its 

compliance demonstration after 2020, although the proposed rule did not make this explicit. 

Commenters stated that the current language means individual states that close existing nuclear 

plants must replace only 5.8% of the energy generated with clean sources to maintain the same 

level of compliance, and that this was not good enough for our environment, our children, or our 

air. 

Commenters stated that the most cost-effective non-emitting generation options for the Southeast 

are hydro and nuclear, and that in the Southeast region, as defined by the EPA, 7 of 8 states have 

nuclear capacity, corresponding to 29% of the nation's nuclear capacity in 2012. Commenters 

stated that there are only certain regions of the country where new nuclear units are technically 

achievable (e.g., the Southeast) and only certain regions where existing nuclear units are at risk 

of premature retirement (e.g., generators bidding into the capacity market). 

Commenters suggested the EPA to consider the total generation from all nuclear energy sources 

in calculating carbon emission intensity, not only 5.8% of the existing installed base. 

Commenters stated that if the EPA consider nuclear energy in its entirety, then every reactor in 

the nation must keep running or be replaced with other clean energy sources for a state to meet 

its goals, making currently operating nuclear units valuable to states since they do not produce 

carbon emissions. 

Commenters pointed out that the EPA's plan elects to disregard the production from the other 

94.2% of facilities and instead focuses solely on the preservation of the 5.8% of the current 

nuclear facilities that are currently at-risk for closure. Commenters criticized the application of 

5.8% at-risk nuclear generation as that will leave most generation unprotected from closure. 

Commenters stated that at-risk power plants identified by the EIA are unique cases local to only 

a few states, and the application of a uniformly distributed risk factor will not successfully 

preserve these individual plants. Commenters noted that for all states with nuclear power, 5.8% 

of total nuclear generation is less than the generation of one nuclear unit. 

Commenters supported the EPA's proposal to include only a small amount of states' at-risk 

nuclear generation to establish state goals in order to limit downside risk if existing nuclear 

generation declines during the compliance period. 
521 

Commenters stated that existing nuclear generating units at risk of premature retirement are 

concentrated in a relatively small number of states where the units operate in competitive 

electricity markets and are exposed to low wholesale electricity prices. Commenters stated that 

the majority of existing nuclear capacity is not exposed to those economic pressures and is not at 

risk of premature shutdown. Commenters mentioned that EPA's proposal, if implemented, likely 

would not avoid the premature shutdown of an existing nuclear unit. 

Commenters stated, regarding at risk nuclear, it is clear that the EIA had in mind only nuclear 

capacity that operates in merchant markets; hence the EIA's retirement analysis applies only to 

those markets and not to regulated markets (for instance in California, Arizona, and the 

Southeastern United States), where regulated utilities retain generation assets and therefore have 

a guaranteed income stream and rate of return on those assets (presuming prudent management). 

Commenters stated that the EPA took the phrase "continued economic challenges" out of context 

and applied a six percent factor to every reactor with nuclear generation in 2012, which is 

incorrect. Commenters stated that, if the EPA wants to include existing nuclear generation in its 

Clean Power Plan, it must first identify the reactors at risk of retirement and estimate the cost of 

keeping them online in the face of deteriorating economics. Commenters stated the EPA should 

then make a judgment about the relative economic merits of including at-risk nuclear generation 

in the rule. 

Commenters recommended that the EPA either (a) eliminate altogether the inclusion of any 

nuclear capacity in the computation of the state standards and their achievement, or (b) allow an 

adjustment for nuclear capacity (which would be greater than 6 percent) only in those states 

which have at-risk nuclear power plants (i.e. Illinois, Ohio, Michigan, Pennsylvania, New Jersey, 

New York, Connecticut, Massachusetts, New Hampshire, Vermont, Maryland and Texas). 

Commenters noted that, in Illinois, upstate nuclear generators participate in the PJM market 

while the downstate generators participate in the MISO market. Commenters stated that, because 

the state must meet the goal, Illinois would need to enact pricing mechanisms across the entire 

state. Commenters recommended that nuclear should be taken out to the state goal entirely, and 

the PJM and MISO markets should be allowed to function as they should. Commenters stated 

that having "at risk" nuclear in the state goal creates an unneeded compliance risk for all states 

that, if realized, can result in customers being required to subsidize the nuclear plants in the state. 

Commenters also recommended that nuclear power should be included as a compliance option 

for states. Commenters stated that the BSER formula was based on an EIA estimate that six 

plants, comprising 5.8% of the U.S. generation capacity, are "at-risk" of closure before 2030, but 

that these are unique cases local to a few states. Commenters stated that other DOE scenarios 

envision retirement rates of as high as 33% by 2030 and Commenters was aware of an 

impending decision to close an 816 MWe plant in NY which was not considered at-risk. 

Commenters stated that, as such, the data the EPA are using are flawed. 

Commenters stated that, in situations in cases where a state's target emission rate is greater than 

the emission rate of the generation source that would replace retired nuclear, the Proposal 

actually serves to encourage retirement. Commenters specifically related the case of Illinois, 

where Commenters stated that, because of the many coal-fired units in the state, retiring a 1 GW 

nuclear unit and replacing that unit with natural gas would actually lower the state's emissions 

from 1,838 lbs CO2/MWh to 1,774lbs CO2/MWh. Commenters suggested that EPA explore the 
522 

option of including 100 percent of existing nuclear generation, rather than 6 percent of nuclear 

generation, in the state's target rate calculation. Commenters stated that this would also make 

treatment of nuclear and non-hydro renewable generation logically consistent. 

Commenters requested that the rule incentivize more than 5.8% of nuclear generation to stay 

online. Commenters stated that using 100% of nuclear capacity in compliance is appropriate, but 

that if 100% is not a palatable proposal, Commenters suggested an allowance for up to 70% of 

existing nuclear for compliance. 

Commenters stated that multiplying each state's existing nuclear capacity by 6 percent leads to 

the absurd result that the amount of "at risk" nuclear capacity in any state is much less than the 

smallest reactor in the state. Commenters stated that, as with the RE and EE goals, the EPA's 

failure to do state-specific analyses of its nuclear component results in illogical and inequitable 

results. 

Commenters stated that Texas is assigned 290 MW of at-risk capacity, while the smallest unit in 

the state is 1195 MW, four times as large. Commenters stated that, to match its goal, Texas 

would need to determine that 24 percent of the capacity of its smallest unit was "at risk" and that 

it had taken some measures to retain it in operation. Commenters continued that, on the other 

hand, if a state truly has an at-risk unit, and does take steps to retain it, it would gain a 

compliance benefit that is much greater than the amount used in the goal calculation. 

Commenters stated that the EPA creates a compliance obligation to protect at-risk nuclear 

capacity in all 30 states that have nuclear capacity without any attempt to determine if those 

states' nuclear units are at risk of retirement. Commenters then stated that, alternatively, if 

retention of at-risk nuclear capacity is an action that could be taken in all 30 states, the level of 

the effect that EPA assigns to it (5.8 percent) is much too small; if only the smallest unit in each 

of the 30 states is considered, the hypothetical amount of at-risk capacity is 26 percent of the 

current nuclear fleet. 

Commenters stated that the EPA does not attempt to seek a retention figure reflective of actual 

projected retirements in each state, and that the default 5.7% retention figure deliberately and 

arbitrarily increases the state's overall performance goal. Commenters stated that one possible 

means to preserve operation of a higher-cost nuclear plant that otherwise would retire due to 

market forces would be for the state to provide it with an out-of-market contract or other subsidy. 

Commenters stated that such a bailout would undermine the electricity market in competitive 

states, such as Illinois, where market participants depend on a level playing field and equal 

treatment in order to compete. Commenters stated that, as the owners of nuclear plants have 

demonstrated, direct government subsidies provided to renewable generation (e.g., the federal 

wind production tax credit) are putting financial pressure on nuclear generation by paying 

renewable power to generate when uneconomic, and that providing nuclear plants a subsidy or 

other financial incentive in response would have the perverse effect of providing a second 

government subsidy to moot the effects of the first, and that the most straightforward solution is 

simply to eliminate all subsidies for generation. 

Commenters stated that the EPA assumes that EPA assumes that six percent of the entire nuclear 

fleet is at-risk and by keeping those units in operation, states can achieve additional emission 
523 

reductions. Commenters stated that the EPA fails to consider the possibility that an economic or 

other operational circumstance might exist by which the unit owner or the Nuclear Regulatory 

Commission might determine that a facility has reached the end of its useful life. Commenters 

stated that the record is insufficient to support EPA's assumptions that no "at-risk" nuclear 

energy power plants will be retired and that all units currently under construction will come 

online. 

Commenters stated that the limitation of the approach of assigning 5.7 GW (or roughly 6% of the 

nuclear fleet) as a proxy for risk of nuclear retirement is that it avoids the highly regionalized 

reliance on nuclear energy. Commenters stated that avoiding the retirement of one of Illinois' six 

nuclear plants requires a different market and policy intervention than retaining 6% of, for 

instance, Kansas' one nuclear facility. Commenters stated that, given the concentration of nuclear 

fleet, the flat inclusion of a 6% nuclear retention target within each state goal applies unequal 

burdens to states and does little to advance the stated goal of nuclear fleet preservation. 

Commenters recommended that the EPA might better be served creating a national mechanism 

for retaining nuclear capacity that could smooth over the most significant local market obstacles 

to preserving certain units. 

Commenters stated the EPA's 6% at risk estimate is unrealistically conservative, and that the 

EPA should consider increasing its "at risk" percentage. Commenters stated that nuclear facilities 

are under increasing competitive pressure from gas-fired and wind generation. Commenters 

stated that nuclear facilities have had difficulty in clearing the most recent PJM BRA that 

procures capacity on a three year forward basis. Commenters noted that, in the most recent PJM 

BRA, several Exelon units including Oyster Creek in New Jersey and the Byron and the Quad 

City units in Illinois failed to clear the auction, and that subsequently, industry spokesmen 

indicated that these factors may force premature retirement of nuclear facilities in the PJM region 

in advance of normal retirement dates. Commenters also recommended that the EPA should 

consider the implications of license expirations on its BB3 proposal, including increasing the 

percentage of nuclear plants "at risk" for retirement. 

Commenters stated that the EPA makes no effort to independently verify the EIA's data 

regarding projected reductions in the nuclear fleet, and does not attempt to seek a retention figure 

reflective of actual projected retirements in each state as opposed to one serving as a mere 

representation of an economic downturn. Commenters stated that Illinois has the largest nuclear 

fleet in the nation, but the smallest nuclear plant makes up 7% of the nuclear capacity, so the 

"national average" is nonsensical, because no one shuts down a portion of a nuclear plant. 

Commenters stated that, when making important projections such as this, the EPA should at least 

use a factually based value for each state. 

Commenters stated they do not support including the approximately six percent of "at-risk" 

nuclear to determine the state emission rate goals or compliance with such goals, and for states 

with nuclear generation, the state goals should adjusted upward by the approximately six percent. 

Commenters stated that all existing nuclear power plants will eventually close, and when this 

occurs, states will have to find ways to replace a large amount of zero-carbon generation with 

other zero-carbon generation or be at risk of being in non-compliance with meeting their goals in 

the 111(d) Plan. Commenters stated that, since there currently are no cost effective mechanisms 
524 

to achieve this, the "at risk" nuclear generation should not be included the states' carbon emission 

rate goals. 

Commenters stated that the EPA should amend the building block 3 to account for at risk units 

specifically and not apply a blanket average to all states that have nuclear generation. 

Commenters stated that the Palo Verde nuclear generation station in Arizona is not viewed as at 

risk. 

Commenters recommended that, rather than penalizing states in which nuclear plants shut down, 

the rule should provide an incentive for nuclear units to continue to operate, and, if possible, to 

increase their output and capacity factor, and that excluding existing nuclear from the goalsetting calculation, but allowing states to take credit for a portion of their nuclear generation for 

compliance purposes, would provide such an incentive. Commenters also recommended that the 

EPA recognize early action taken to increase nuclear plant output, such as the 2011 extended 

power uprate at the Point Beach Nuclear Plant. Commenters concluded that, at a minimum, if the 

at-risk nuclear provision is retained, it should be applied only to nuclear units that are truly at 

risk. 

Commenters stated that nuclear plants which are at risk are not equally dispersed throughout the 

country, so if the goal was to avoid closing these facilities, as building block 3 clearly states, then 

accounting for all nuclear generation would be the effective way to achieve this. 

Commenters stated that only accounting for 5.8% of nuclear means that states with large 

amounts of nuclear do not have to do much to hit emissions targets. Commenters noted that 

certain states, Illinois being one of them, could close all of their nuclear facilities and replace 

them with natural gas plants, and their emissions rate would be less than the 2030 goal. 

Commenters stated that this would lead to higher emissions, but would be perfectly fine 

according to the rule. 

Commenters stated that, as the Clean Power Plan is written, targets are made extremely easy for 

states with nuclear plants, such that in some states, nuclear plants can be shut down with little or 

no consequence, even though actual emissions will be much higher. 

Commenters stated that nuclear power provided 35 percent of Pennsylvania's electricity in 2013, 

the second highest in the Nation, and that nuclear power may be at greater risk of closure in 

Pennsylvania, because of the Commonwealth's competitive (deregulated) market. Commenters 

stated that by giving Pennsylvania credit for only 6 percent of nuclear power (at-risk nuclear), 

the EPA is not providing an incentive for the other 94 percent to remain in operation. 

Commenters stated that the proposed guidelines fail to recognize the critical role of nuclear in 

reducing CO2 emissions. Commenters stated that all zero-emissions generation sources (e.g., 

nuclear, wind, solar, and hydropower) are equivalent for present purposes and EPA cannot 

achieve its carbon-reduction goals without the existing nuclear fleet - without the nuclear fleet, 

carbon emissions will be higher, as will the cost of electricity, of natural gas, and of carbon 

allowances under a carbon-control regime. Commenters stated that nuclear plants also are critical 

to the reliability of the electric grid; yet, the proposed guidelines create no real incentive to 

maintain existing nuclear power plants. Commenters stated that although EPA notes that some 
525 

existing nuclear facilities are at risk of premature retirement, the proposed guidelines greatly 

underestimate the quantity of nuclear generation that is actually at risk in some states, while 

overstating the amount at risk in other states. Commenters recommended that if EPA is going to 

continue with its broad interpretation of BSER, they should remove the six percent at risk factor 

from the goal calculation and, instead, consider alternative approaches for incenting the 

continued operation of existing nuclear generation capacity as noted in EEI's comments. 

Commenters stated that the EPA should consider its approach to at-risk nuclear facilities, 

because assuming that 5.8% of nuclear generation is "at risk" of shutdown and crediting states 

with 5.8% for their compliance plans has as neutralizing effect at best. Commenters urged the 

EPA to remove all existing nuclear from the goal calculation, while give states the flexibility to 

use some percentage-at least 5.8% and possibly more-of this nuclear generation when meeting 

state CO2 targets. Commenters also stated that if the EPA insists on keeping 5.8% of the existing 

generation in the goal calculation, then it should significantly increase the amount of existing 

nuclear generation available for use in complying with the state target rates; the larger percentage 

the EPA makes available for use in compliance the larger the incentive for the preservation of 

such generation. 

Commenters stated that EPA provides no substantive discussion of how adding six percent of 

nuclear generation to tighten the target emissions rate for the year 2030 would work to keep 

nuclear capacity operating. Commenters stated that nuclear power plants are all-or-nothing 

devices; one cannot keep six percent of a reactor open and if a nuclear reactor is uneconomical, it 

would be completely shut down and there would be zero electricity generation. Commenters 

stated that by including this six percent in its calculation of the target rate, the EPA has provided 

the nuclear industry in deregulated markets with a tool to extract financial concessions for 100 

percent of the reactor. Commenters provided an example involving Exelon and the state of 

Illinois to illustrate their point. 

Commenters stated that in order to understand that the proposed credit is insufficient, consider 

the case whereby one of the six at-risk plants closes in a particular state. Commenters contended 

that ten percent of the resulting loss in output is replaced by wind and solar generation and the 

remaining 90% is replaced by natural gas plants. Commenters stated that under the proposed 

rule, the state could claim a "reduction" in carbon emissions, even though the actual output of 

carbon dioxide would increase substantially. Commenters cited a recent study showing that at 

least 15 states could claim a fictitious reduction in carbon emissions under the BSER formula 

should all nuclear reactors close. 

Commenters stated that the 800 MW Palisades Power Plant in Colvert, Michigan, due to a 

stretch of safety concerns, could be considered "at risk" for shutdown. However, the commenters 

stated the entire 800 MW reactor would shut down, not just 6% of the reactor, so that clearly the 

6% blanket factor does not fit well within a state where specific nuclear units are at risk in their 

entirety. 

Commenters noted the EPA's approach of using including 5.8 percent of a state's existing 2012 

nuclear generation in the calculation of the state targets, and that the EPA also allows states to 

include 5. 8 percent of the total generation from its existing nuclear generation fleet in a given 
526 

year for compliance purposes as an incentive for the continued operation of existing nuclear 

units. Commenters instead recommended each of the following: 

1. Remove the "at risk" existing nuclear megawatt hours from the state emission target 

calculation; to the extent EPA retains an "at risk" adjustment it should only be applied in 

states where "at risk" nuclear generation has been identified rather than applying this 

adjustment universally across all states; 

2. Provide appropriate flexibility and incentives to use incremental existing nuclear 

generation for state compliance; EPA should consider a baseline capacity factor for 

nuclear units using either a national average lifetime capacity factor for all operating 

units, or each unit's historical average capacity factor; the incremental annual capacity 

factor for each unit above the baseline period would be eligible for compliance in a state 

plan; 

3. Allow existing nuclear units that are relicensed by the NRC to operate beyond 60 years to 

be treated as new units and their full generation included in the state's compliance 

calculation; and 

4. Allow the recalculation of a state's emissions goal to account for nuclear safety outages, 

outages for failures of long lead time equipment, permanent retirements and economic 

constraints as mentioned previously in this section. 

Commenters stated that the CPP, as currently proposed, would incent each state to preserve 

approximately 6% of its nuclear capacity at risk for retirement to help meet the state's CO2 

emissions reduction target. Commenters stated that the incentive to preserve a state's nuclear 

generation capacity that might otherwise be retired is a simple, broad-brush approach and raises 

numerous market issues that must be carefully considered. 

Commenters remarked that it is unclear exactly what constitutes an "at-risk" nuclear plant; rather 

than arbitrarily assuming that 6% of a state's nuclear capacity is at risk for retirement, each 

nuclear plant's operational and financial performance should be examined relative to a pro-forma 

nuclear plant to ensure that the plant is not rewarded for poor performance. 

Commenters noted that some owners of nuclear generation have stated that they do not need or 

want a subsidy; rather, they simply want credits or some other ability to monetize the unique 

characteristics of their nuclear plants. Commenters stated that in the case of Illinois, because 

there is only one nuclear generation owner, any regulatory approach that would grant credits to 

nuclear generation needs to be carefully evaluated so as not to provide the state's sole nuclear 

generation owner with unintended market power or other unilateral advantage. 

Commenters suggested one possible means to preserve operation of a higher-cost nuclear plant 

that otherwise would retire due to market forces would be for the state to provide it with an outof-market contract or other subsidy. Commenters contended that such a bailout would undermine 

the electricity market in competitive states, such as Illinois, where market participants depend on 

a level playing field and equal treatment in order to compete. 
527 

Commenters stated that as the owners of nuclear plants have demonstrated, direct government 

subsidies provided to renewable generation (e.g., the federal wind production tax credit) are 

putting financial pressure on nuclear generation by paying renewable power to generate when 

uneconomic. Commenters contended that providing nuclear plants a subsidy or other financial 

incentive in response would have the perverse effect of providing a second government subsidy 

to moot the effects of the first, and the most straightforward solution is simply to eliminate all 

subsidies for generation. 

Lastly, commenters stated that EPA relies upon the EIA Annual Energy Outlook, which 

projected a 5.7% capacity reduction to the nuclear fleet. Commenters remarked that this 

projected reduction is not tied to the projected retirement of any specific unit, but rather "to 

recognize the 'continued economic challenges' faced by the higher-cost nuclear units." 

Commenters stated that EPA determines that retention of this 5.7% would achieve CO2 

reductions at a reasonable cost. EPA offers no explanation as to the regulatory path for extending 

the useful life of such "at-risk" nuclear units. Commenters contended that EPA makes no effort 

to independently verify EIA's data, nor does it attempt to seek a retention figure reflective of 

actual projected retirements in each state as opposed to one serving as a mere representation of 

an economic downturn. In fact, Commenters contended, EPA failed to consult with the Nuclear 

Regulatory Commission regarding the validity of its assumptions or as a policy or safety matter, 

whether such "at risk" nuclear unit should continue to operate; moreover, the extension of the 

licensing life of a nuclear facility is highly contentious and uncertain, and EPA provides short 

shrift as how such "nuclear retention goals" can be achieved. Commenters stated that by 

including as a default this 5.7% retention rate, EPA has deliberately and arbitrarily increased the 

state's overall performance goal. 

Commenters remarked that EPA also does not prove that there is substantial evidence that its 

projected increases in zero emission sources are "feasible" and will "produce the improved 

performance necessary to achieve" the goal. Commenters stated that with respect to renewable 

sources, EPA relies on state RPSs as achieved, without regard to economic or market barriers to 

achieving portfolio targets and without regard to whether an RPS target is legally required to be 

achieved. 

Commenters stated that Kansas currently has one nuclear plant (i.e., Wolf Creek) with an output 

of 1,205 MW that is owned jointly by three Kansas utilities. Commenters remarked that the 

EPA's proposed plan does not recognize the significant zero-carbon emissions from Wolf Creek 

that serve to lower Kansas's overall carbon footprint. 

Commenters stated that, in fact, as structured the CPP penalizes states with nuclear generation by 

including "at risk" nuclear generation in the denominator of the CPP's mathematical formula. 

Commenters contended that the penalty resulting from inclusion of "at risk" nuclear generation 

in the formula is derived by the denominator's effect of lowering EPA's proposed emission rates, 

and the impact of the formula is created by the EPA's use of a basic ratio of: 

(Carbon emissions / megawatt hours of production) 

Commenters stated that the EPA's definition of the basic ratio above requires generation 

resources with zero emissions to increase only the denominator of the ratio. Commenters stated 
528 

that because there is no effect on the numerator, each megawatt hour of zero-carbon generation 

added by EPA for "at risk" nuclear resources lowers the emission limit goal and thus requires 

greater carbon emission reductions. Commenters contended that this is counterintuitive and 

reflects either the EPA's lack of understanding of electric generation or is simply an attempt to 

derive a lower emission limit. Commenters stated that penalizing Kansas for zero-carbon 

generation is inconsistent with the EPA's espoused goal of lowering carbon emissions. 

Commenters remarked that a rule designed to reduce carbon emissions should reward and not 

penalize the use of nuclear generation. 

Commenters stated that because Kansas has no nuclear generation under construction and no part 

of their single nuclear plant (i.e., Wolf Creek) is "at risk", this element is eliminated from their 

calculation. Commenters suggested that the EPA should revise its formula so that existing 

nuclear generation would count towards compliance. 

Commenters attached a 103 page Hatch, Ltd report dated October 9, 2014 that strongly makes 

the case that electric power generated by nuclear energy causes vastly lower amounts of 

greenhouse gases (GHGs) to be emitted into the atmosphere than scenarios that couple inherently 

intermittent sources of electrical power such as wind turbines with natural gas powered 

generation. Commenters stated that such a coupling is necessary for electrical grid stability. 

Commenters remarked that the Hatch, Ltd. report, which is based on 246 studies covering 

various power generation scenarios and constraints, concluded that nuclear power is superior to 

wind and natural gas for battling climate change. Commenters contended that the clean air 

contributions of nuclear power should be counted at 100% in the proposed regulation, not the 

pitiful 5.8% proposed. 

Commenters recommended that the EPA exclude existing "at-risk" nuclear generation from the 

formula for setting state emission reduction targets. Commenters stated that existing nuclear 

reactors have been facing economic pressures due primarily to low natural gas and wholesale 

electricity prices, and expensive age- or safety-related repairs, and gave examples of recent 

reactor closures. Commenters recommended excluding existing "at-risk" nuclear generation from 

the state emission reduction target formula, as the number of at-risk reactors is limited, site 

specific, and will likely decline over time as natural gas and wholesale electricity prices rise. 

Commenters contended that the EPA's methodology of applying EIA's estimate of at-risk nuclear 

plants to the states is flawed. Commenters stated that the EPA's methodology for quantifying atrisk nuclear generation is based on EIA projections from its Annual Energy Outlook 2014 

reference case. Commenters noted that the EIA's analysis assumed an additional 6 GW of 

generic retirements would occur between 2012 and 2019, and represented this by assuming a 

reduced capacity for all existing plants in vulnerable regions (primarily in restructured markets 

with merchant plants). Commenters contended that the EIA did not assume retirements of 

specific plants, and it also did not assume plants are at-risk of early retirement in every state that

has existing nuclear plants, which the EPA does assume in its methodology. Commenters 

remarked that EIA also does not clearly explain how it came up with the additional 6 GW of 

retirements; however, EIA does indicate that they did not include any retirements after 2020 

because natural gas prices in its reference case are projected to be high enough to "support the 

continued operation of the U.S. nuclear fleet and limit retirements from 2020 through 2040." 
529 

Commenters stated that additional fuel switching from coal to natural gas under the Clean Power 

Plan could increase natural gas prices above EIA's reference case projections before 2020, which 

in turn would increase the profitability of existing nuclear plants and potentially offset EIA's 

assumed retirements. Commenters stated that, in fact, under the CPP, the EPA's IPM modeling 

projects a 10.2 percent to 14.3 percent increase in power sector natural gas use in 2020 that 

results in a 7.5 percent to 11.5 percent increase in delivered natural gas prices to the electric 

power sector by 2020. Commenters also remarked that the EPA's modeling also does not show 

any difference in nuclear generation or capacity in 2020, 2025, or 2030 under any of the CPP 

scenarios compared to their Base Case. Commenters concluded that the EPA's own modeling 

does not show that existing nuclear generation is at risk of early retirement, which is consistent 

with EIA's projections after 2020. 

Commenters stated that recent UCS modeling using a modified version of EIA's AEO 2013 

National Energy Modeling System (NEMS) and NREL's 2014 version of the Regional Energy 

Deployment System (ReEDs) model also does not project any near-term or long-term retirements 

of existing nuclear plants beyond the six reactors that recently closed or are projected to close in 

the next few years. Commenters remarked that this is not surprising as both the EPA and UCS 

modeling use EIA's natural gas price projections. 

Commenters stated that the spikes in natural gas and wholesale electricity prices last winter due 

to extremely cold weather and the competition for natural gas for electricity generation and home 

heating are another example of how natural gas prices have already exceeded EIA projections. 

Commenters also noted that existing nuclear plants made considerable profits between 2005 and 

2008 when annual wholesale electricity prices ranged from $43-93/MWh (2013$) due to record 

high natural gas prices, and this is illustrated in data from Exelon, which shows a strong 

correlation between their share price and natural gas prices over the past decade. 

Commenters stated that because early retirements of nuclear plants appear to be a temporary 

issue, and would likely be limited to a few specific plants and locations, they do not believe the 

EPA should include "at-risk" nuclear generation in the formula for setting state emission 

reduction targets. Commenters further stated that the emission reductions from existing plants 

are already reflected in state's base emissions and generation mix, and for similar reasons, they 

are also recommending that existing renewables be excluded from the EPA's formula for setting 

state targets. 

Commenters remarked however, that if a limited number of existing nuclear plants are retired 

early and replaced with natural gas, it could result in net increase in a state's emissions, all other

things being equal; although, it's also possible that existing plants could be replaced with a 

combination of new renewables and energy efficiency without increasing emissions. 

Commenters cited recent analyses by UCS, the National Renewable Energy Laboratory (NREL), 

and Rocky Mountain Institute that all show that the U.S. could gradually phase out existing 

nuclear reactors by the time they reach 60-years of operation and replace them primarily with 

renewables and energy efficiency, while saving consumers money, maintaining reliability, and 

significantly reducing carbon emissions and water use. Commenters concluded that they believe 

the determination of existing at-risk nuclear plants should be addressed on a case by case basis in 

state compliance plans and supported by a comprehensive analysis of the costs and benefits of 
530 

keeping existing plants open vs. retiring and replacing them with other low and zero carbon 

generation. 

Commenters asserted that this approach would also help limit the potential for providing 

additional subsidies and windfall profits to existing nuclear plants that do not need them to 

continue operating. Commenters cited a 2011 UCS report that shows that existing nuclear plants 

have already received generous subsidies that have cost taxpayers more than the market price of 

power they helped generate, and they continue to receive ongoing subsidies ranging from 1 to 6 

cents/kWh. Commenters remarked that when nuclear power was an emerging technology, public 

support made sense, but more than 50 years (and two public bailouts) after the opening of the 

first U.S. commercial nuclear plant, nuclear power is a mature industry that should be expected 

to stand on its own. Commenters concluded that the best policy mechanism to value the low 

carbon benefits of nuclear power is to put a price on carbon. Commenters contended that this 

would remove a market price distortion by internalizing a cost currently not factored into the 

price of coal and natural gas that would benefit nuclear, renewables and other low carbon options 

equally. 

Comment 6: Commenters urged the EPA to preserve existing nuclear capacity, provide credit 

for 'new' nuclear generation and remove the 6 percent 'at risk' nuclear capacity from the goal 

calculation. 

Response 6: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the proposed provisions for existing and under construction nuclear units in 

the setting of state goals, and allows incremental generation from new and uprated units to be 

considered in state plans to comply with the rule. The provisions of the final Clean Power Plan 

provide incentives to maintain current levels of nuclear generation, and if a state or affected EGU 

chooses to do so, allow incremental nuclear capacity to apply towards compliance. Please see 

sections VIII.K and VIII.G of the preamble for further discussion of the flexibility states have in 

developing state plans to ensure compliance, as well as, the requirement that states consider 

system reliability in plan submittal. 

The following are summaries of the specific public comments under this comment: 

Commenters stated, regarding the Clean Power Plan Rule that the proposal is designed to reduce 

carbon emissions by 30 percent from 2005 levels by 2030. Commenters said this goal cannot be 

achieved without preserving the 100 nuclear power reactors that provide approximately 20 

percent of America's electricity, and almost two-thirds of America's carbon-free electricity. 

Commenters said EPA's proposal recognizes this fact, and attempts to provide states with an 

incentive to preserve existing nuclear generating capacity. 

Commenters stated in its proposed rule, EPA estimates that the cost of keeping 'at risk' nuclear 

plants operating is $12-$17 per metric ton of CO2 abated; this is lower than EPA's estimate that: 

• Adding renewable capacity costs $10-$40 per metric ton of CO2 abated; 
531 

• Increasing natural gas combined cycle power plant utilization rates to 70 percent 

costs $30 per metric ton of CO2 abated; and 

• Implementing demand-side management programs costs $16-$24 per metric of 

CO2 abated. 

Commenters continued stating the U.S. nuclear energy industry commends EPA for recognizing 

the importance of nuclear energy to any credible program to reduce carbon emissions, but EPA's 

treatment of nuclear energy in the proposed rule is fundamentally flawed. Commenters said 

despite the agency's intent, the proposed rule will not preserve nuclear power plants at risk of 

premature shutdown, and creates a significant penalty for those states that have taken steps to 

maintain a diversified portfolio of generating assets and reduce carbon emissions by building 

new nuclear power plants. 

Commenters recommended that the EPA's 111(d) Rule should send states an unequivocal signal 

to preserve existing nuclear capacity, and provide credit for 'new' nuclear generation. 

Commenters stated if EPA continues with its proposed interpretation of Best System of Emission 

Reduction (BSER), the agency should remove the six percent 'at risk' nuclear capacity from the 

goal calculation. Commenters said various stakeholders will doubtless offer alternative 

approaches to the treatment of existing nuclear generation in their comments. Commenters said 

one approach that EPA could consider, however, is for a state to demonstrate in its plan 

reasonable assurance that it will preserve its existing carbon-free generating capacity, 

particularly nuclear generating capacity. Commenters said for operating nuclear generating units 

in regulated states, such assurance already exists because integrated utilities have a reasonable 

opportunity to recover costs, plus a reasonable return. Commenters said in competitive states 

with nuclear generating units potentially at risk, this assurance could involve a commitment to 

policy changes through legislation or regulation, or other market-based mechanisms, or a 

combination that would create incentives for continued operation of these zero-emitting 

generators. 

Commenters concluded creating ways for states to capture limited compliance value for existing 

nuclear generating units would directly serve and support EPA's principal objective, ensuring 

continued operation of the nation's largest source of carbon-free generating capacity. 

Commenters stated the nation's nuclear generating capacity is licensed for an original 40-year 

license term, with an option (under the Atomic Energy Act) for license renewal for additional 20-

year periods; approximately three-quarters of the reactors operating today have received Nuclear 

Regulatory Commission (NRC) approval to operate to 60 years. Commenters said starting in 

approximately 2030, existing nuclear power plants reach the end of 60 years of operation; 

although the industry and the NRC are now developing the framework for an additional 20-year 

license renewal (past 60 years), it is not certain that all of today's nuclear power plants will take 

advantage of this option. Commenters said some of this capacity will likely seek a second license 

renewal to operate past 60 years, but some will not. (In fact, some of today's capacity may not 

reach 60 years.) Commenters said additional capital investment will almost certainly be required 

to operate past 60 years and, in some cases, market conditions or other factors may not justify 

that capital investment. 
532 

Commenters concluded this situation places a high premium on (1) preserving existing nuclear 

generating capacity by ensuring workable regulatory requirements for second license renewal 

(i.e., past 60 years), and (2) building new nuclear generating capacity to maintain, at a minimum, 

nuclear energy's current 20-percent share of U.S. electricity supply. 

Commenters concluded these challenges require an integrated, internally consistent energy and 

environmental policy, involving both federal and state governments. Commenters said the 

federal government could provide the leadership necessary to develop such an integrated policy, 

but energy policy and environmental policy remain balkanized, scattered among several 

Executive Branch agencies, each pursuing separate, and not necessarily consistent objectives. 

Commenters said EPA's proposed rule to reduce carbon emissions from existing power plants 

continues that pattern; if it is appropriate to reduce the electric power sector's carbon footprint, 

that objective should be part of a larger set of energy and environmental policy initiatives that 

provide the policy conditions necessary to achieve those carbon reductions. 

Commenters stated that the Obama Administration has embraced an "all of the above" energy 

strategy and a commitment to reduce carbon emissions from the electric power sector, as 

evidenced by the proposed rule under Section 111(d). Commenters stated that 100 nuclear power 

plants provide approximately 20 percent of the nation's electricity, and approximately two-thirds 

of the nation's carbon-free electricity, and provide a uniquely valuable set of attributes. 

Commenters stated that the attributes included generating large quantities of electricity provided 

reliably around the clock, providing of price stability, "reactive power" essential to controlling 

voltage and frequency, portfolio value contributing to fuel and technology diversity, and 

compliance value through avoiding Clean Air Act "criteria" pollutants, hazardous air pollutants, 

and carbon dioxide. Commenters stated that other sources of electricity have some of these 

attributes, but none of the other sources have them all. 

Commenters stated that nuclear plants are also critical to the reliability of the electric grid 

because they operate continuously and generally independently of weather conditions; for 

example, during the 'Polar Vortex' event, which occurred during the week of January 6, 2014, the 

nation's nuclear power plants operated at daily average capacity factors of 95 percent to 

approaching 98 percent. Commenters said no other source of electricity approached that level of 

reliability; in fact, approximately 25 percent of the generating capacity in the PJM 

Interconnection and 20 percent of the capacity dispatched by the Midcontinent System Operator 

(MISO) was forced out of service by the severe weather (generally because power plants could 

not obtain fuel or because fuel-handling equipment froze). Commenters said nuclear energy's 

high reliability will become increasingly important as the nation's electricity system becomes 

less reliant on coal, and more reliant on gas-fired generating capacity and on renewable 

technologies that are intermittent and weather-dependent. 

Commenters stated nuclear energy is America's largest source of low-carbon electricity; in 2013, 

nuclear energy produced 19 percent of U.S. electricity supply (789 billion kilowatt-hours) and 

prevented 589 million metric tons of CO2 emissions.

Commenters stated nuclear energy accounted for 63 percent of America's carbon-free electricity 

in 2013, three times more carbon-free electricity than hydropower and nearly five times more 

than wind energy; for perspective, one gigawatt of nuclear generating capacity (out of the 100 
533 

GW operating) would avoid more carbon than all U.S. solar energy capacity in 2013 (4,500 

megawatts at 17-percent capacity factor). Commenters said the amount of CO2 emissions 

avoided by nuclear energy facilities is equal to the CO2 emissions from 113 million passenger 

cars, more than all the passenger cars in the United States. Commenters said without nuclear 

power plants operating in 31 states, carbon emissions from the U.S. electric sector would be 

approximately 25 percent higher. 

Commenters stated that a major expansion of nuclear generating capacity over the next 15-30 

years is essential, and that absent such expansion, carbon emissions will be higher. Commenters 

stated that closure of Units 2 and 3 at the San Onofre Generating Station in southern California 

had caused an increase in electricity costs of $350 million for the first year, equivalent to a 13-

percent increase in total generation costs for the state. Commenters also stated that closing the 

San Onofre units more than negates the carbon abatement impact of all the state's wind and solar 

resources, noting that in 2011 (the last full year of operation) San Onofre generated 18,709 GWh 

of carbon free electricity; in 2013, the state's wind and solar generating capacity produced 16,985 

GWh. 

Commenters stated that, according to NEI calculations using protocols developed by the Energy 

Information Administration, nuclear energy avoided generation of approximately one million 

tons of sulfur dioxide and half-a-million tons of nitrogen oxide emissions annually. Commenters 

stated that, to address future growth in energy demand, the U.S. must have a portfolio of 

electricity generating technologies, particularly low-carbon technologies. Commenters then 

stated that America's electricity generating technologies are unfortunately narrowing 

dramatically, stating that the consensus is that approximately 60,000 MW of the 300,000 MW of 

coal fired power will shut down by 2020, while natural gas-fired generating capacity is growing 

dramatically. Commenters stated that renewables will play an increasing role, but cannot 

displace the need for baseload generating capacity, absent dramatic advances in energy storage. 

Commenters stated that, between 2029 and 2055, all 100 operating reactors in the U.S. will reach 

60 years of life, and that extending the operating lives of these facilities, or replacing them with 

new ones will be a capital-intensive, multi-decade proposition. 

Commenters stated that four nuclear reactors shut down permanently in 2013, and that Entergy 

announced it would shut down Vermont Yankee in 2014. Commenters stated that large multiunit nuclear power plant producing electricity in the low-$30-per-megawatt-hour range are at 

risk of shutdown in MISO and western PJM either because of actions by the Regional 

Transmission Organizations (RTOs) that suppress prices and inhibit appropriate price formation; 

state and/or federal policies that suppress power prices and enable low or negative pricing; and 

systemic weaknesses in market design, which do not sufficiently value baseload capacity that can 

be dispatched when needed, do not provide value for fuel and technology diversity, and do not 

provide additional value for the carbon-free attributes of these plants. Commenters stated that 

natural gas prices are not likely to remain below $4 per million Btu for the next 20 years, and 

there is no rational economic reason or public policy rationale for shutting down nuclear power 

plants like Kewaunee and Vermont Yankee. Commenters said sooner or later, they must be 

replaced and, when they are, they will be replaced with generating capacity that will likely 

produce higher-cost electricity, and will certainly emit more carbon. 
534 

Commenters reviewed two scenarios: (1) if all today's reactors operate to 60 years, then retire; 

and (2) if all today's reactors operate to 80 years. Commenters stated that reality, of course, will 

lie somewhere between these two extremes. Commenters said these calculations start with the 

projections in EIA's 2014 Annual Energy Outlook, which assumes 0.7-percent annual growth in 

electricity demand. Commenters then made the following observations: 

• Simply because of load growth, maintaining nuclear energy at 20 percent of U.S. 

electricity supply would require 13.2 gigawatts (GW) of new nuclear capacity by 

2025 (in addition to the Watts Bar 2, Vogtle 3 and 4, and Summer 2 and 3 

reactors already under construction). 

• If today's nuclear plants retire at 60 years of operation, 22 GW of new nuclear 

generating capacity would be needed by 2030, and 55 GW by 2035, to maintain a 

20 percent fuel share. 

• If today's reactors operate to 80 years, 18 GW of new nuclear capacity would be 

needed by 2030, and 23 GW by 2035, to maintain a 20 percent share of U.S. 

electricity supply. 

• Much larger amounts of new nuclear generating capacity would be needed to 

drive nuclear energy to 25 percent of U.S. electricity supply. 

Commenters stated "unless the industry and the federal and state governments work 

cooperatively to put in place the policy initiatives necessary to replace the reactors that do not 

reach 60 years or retire at the end of 60 years of operation, and expand the size of the U.S. 

nuclear fleet beyond today's 100 GW of capacity, then nuclear energy's share of U.S. electricity 

supply could gradually decline. If that were to happen, then U.S. energy and environmental goals 

would be seriously compromised. A continuing, growing contribution from nuclear energy is 

essential to produce baseload electricity at stable prices and to sustain reductions in emissions of 

carbon and other criteria pollutants." 

Commenters stated there are practical reasons not to use a snapshot-in-time figure of nuclear 

capacity at risk as the basis for a rule that will govern for decades; market conditions are 

dynamic, and a plant that is not at risk today may be at risk tomorrow, and vice versa. 

Commenters stated that EPA must revise its proposal to ensure that states have a sufficient 

incentive to preserve the existing nuclear fleet and recommended that if the EPA continues with 

its proposed interpretation of BSER, they should remove the 6 percent at risk nuclear capacity 

from the goal calculation. Commenters stated that EPA could consider having states demonstrate 

in their plans reasonable assurances that they will preserve existing carbon-free generating 

capacity, particularly nuclear generating capacity. Commenters stated that for operating nuclear 

units in regulated states, such assurance already exists because integrated utilities have a 

reasonable opportunity to recover costs, plus a reasonable return; in competitive states with 

nuclear units potentially at risk, this assurance could involve a commitment to policy changes 

through legislation or regulation, or other market-based mechanisms, or a combination that 

would create incentives for continued operation of these zero-emitting generators. 
535 

Commenters recommended that EPA consider ways to provide at least some limited compliance 

value for existing nuclear generating capacity, as an additional incentive to the states to preserve 

that capacity. Commenters provided the following example stating that in all its calculations, 

EPA assumes a uniform 90-percent capacity factor for all nuclear power plants and while it is 

true that the U.S. nuclear fleet, on average, has consistently achieved capacity factors in the 90-

percent range for the last 15 years, the average lifetime capacity factor of the 100 nuclear plants 

now operating is 81.6 percent through 2013. Commenters stated that given this: 

1. States could be allowed to count megawatt-hours produced by any nuclear plant above an 

81.6-percent capacity factor to be counted toward compliance; or 

2. Alternatively, the same model could be applied on a state-by-state basis: All nuclear 

megawatt-hours above the lifetime capacity factor of a state's nuclear generating units 

could be counted toward compliance; or 

3. A single-year baseline may not be appropriate for nuclear power plants, which typically 

shut down only every 18-24 months for refueling and maintenance outages. If the 

baseline year happens to be a refueling outage year, it may understate a nuclear 

generating unit's long-term performance. For this reason, the industry typically uses 

three-year rolling averages when evaluating nuclear plant performance. Given this, 

another option might be to allow a state to count toward compliance any nuclear 

megawatt-hours produced above the industry's three-year rolling average. 

Commenters stated that in addition to new nuclear generating capacity, the 111(d) rule should 

also recognize two other means of increasing zero-carbon nuclear generation: power uprates and 

license renewal - both represent incremental generation, involve detailed planning and regulatory 

approvals, require substantial capital investment - and both should count towards compliance. 

Commenters recommended that power uprates and license renewals be considered new nuclear 

capacity and credited towards compliance. Commenters stated that the NRC defines three types 

of power uprates: 

• Measurement Uncertainty Recapture (MUR), which uses advanced techniques to 

more accurately calculate reactor power, and typically achieve up to two percent 

additional output; 

• Stretch Power Uprates (SPR), which usually involve changes to instrumentation 

set-points but do not involve major plant modifications. These uprates typically 

yield up to 7 percent additional output; and 

• Extended Power Uprates (EPU), which require significant investment in major 

plant equipment, like turbines, pumps, motors, main generators and transformers, 

and can yield as much as 20 percent additional output." 

Commenters stated that as of April 2014, the NRC has approved 154 uprates that added 

generating capacity equivalent to about seven new reactors. Commenters stated that planning, 

conducting the engineering work and obtaining NRC approval for a power uprate takes several 

years. Commenters provided examples of time requirements and expenses for license renewals. 
536 

Commenters stated that any nuclear reactors that receive NRC approval to renew their licenses 

during and after the 2012 baseline year in the 111(d) rule should be treated as new generating 

capacity, including any first license extensions issued during and after 2012 as well as all second 

license extensions (since none have yet been issued). Commenters stated that states should be 

able to credit this capacity toward compliance. 

Commenters stated that like the process for power uprates, the NRC's license renewal review 

includes significant capital investment and safety reviews, which typically take about 30 months. 

Commenters stated that by 2029, several nuclear power reactors in the U.S. will have been 

generating electricity for 60 years with approximately 31,000 MW of nuclear generating capacity 

reaching the end of their 60-year licenses between 2029 and 2035, thus requiring plant shutdown 

unless NRC approves a second license extension. Commenters stated that by 2040, half of the 

nation's nuclear fleet will have turned 60; the electric power industry is approaching a period, the 

decade starting in 2020, when it must consider how to replace this nuclear generating capacity. 

Commenters stated that some of this capacity will likely seek a license renewal to operate past 60 

years, but some will not; additional capital investment will likely be required to operate past 60 

years and, in some cases, market conditions or other factors may not justify that capital 

investment. Commenters stated that without further significant financial investments and 

licensing action by the licensee, these carbon-free power generation sources are at risk of 

shutdown. Commenters stated that the impact of the loss of nuclear generation on carbon 

emissions in such a short period of time should be reason enough for the 111(d) rule to provide 

an incentive for continued operation of these units, provided they can meet the necessary safety 

requirements. 

Commenters stated that the NRC and industry are both examining what will be required to 

operate a nuclear plant beyond 60 years. Commenters gave the example of the NRC licenses for 

Dominion Resources' existing nuclear stations that begin to expire in 2032. Commenters stated 

the scoping analysis shows costs in the range of $500 million to $1.5 billion, depending on the 

components that must be replaced to extend the operational performance required for a second 

20-year license extension. Commenters stated that nuclear power plant operation beyond 60 

years cannot be treated as a foregone conclusion and EPA should not assume that nuclear units 

will be relicensed in perpetuity or that existing nuclear plants will continue to run forever. 

Commenters recommended that the final rule should provide an incentive for the continued 

operation of all existing reactors by defining as new nuclear capacity that may be used for 

compliance purposes as: (1) any nuclear plants that have not received license extensions to 

operate beyond their original 40-year license term at the beginning of the 2012 baseline year, and 

(2) any nuclear plants relicensed to operate beyond 60 years." 

Comment 7: Commenters urged the EPA to remove all subsidies and support for nuclear power. 

Response 7: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and new nuclear units in the 

setting of state goals. While the rule allows incremental generation from new and uprated units 

to be considered in state plans to comply with the rule, the decisions to invest in nuclear 
537 

generation over other types of power are made by corporations who weigh numerous factors in 

making a determination, along with extensive oversight of public safety by the Nuclear 

Regulatory Commission and in coordination with state regulators. 

The following are summaries of the specific public comments under this comment:

Commenters requested that the EPA, remove all subsidies and support for nuclear power for 

reasons of health, security, and lack of storage. Commenters stated that encouraging new nuclear 

energy magnifies the health dangers posed by radiation, especially in the case of nuclear reactors 

located close to urban centers; increases the safety and national security issues from transporting 

radioactive materials, both before and after they are used to generate electricity; and leaves as 

unresolved the dangers of storing high-level (and even low-level) radioactive waste. 

Commenters stated that by encouraging states to relicense existing nuclear reactors and complete 

the construction of new ones, the rule reduces those states' incentive to focus on renewable 

energy resources. Commenters stated that there are opportunity costs when governments choose 

to invest their finite resources in new energy resources; safe renewables risk being a lost 

opportunity when governments instead choose to focus their resources on expanding or keeping 

nuclear energy options despite the latter's regularly ballooning costs. Commenters stated 

increasing costs, for example, were a primary reason why a few years ago the city of San 

Antonio decided against adding two nuclear reactors to the energy portfolio owned by its 

municipally-owned utility, CPS Energy. 

Commenters also stated the health impacts of emissions from such coal-fired plants and the 

climate effects of their greenhouse gas emissions are problems that recent EPA regulations have 

meant to address. Commenters applauded those regulatory efforts just as strongly as the 

commenters applaud the slogan that encapsulates the desires of many central Texas residents: 

'Solar Yes, Nuclear No.' Commenters criticized the misguided support for nuclear energy in the 

currently proposed Clean Power Plan Rule. 

Commenters added the proposed rule encourages the creation of state-level cap-and-trade 

programs that could have the effect of allowing nuclear energy plants to sell their emissions 

credits to fossil fuel-generators, thereby sustaining facilities that emit massive amounts of criteria

pollutants of concern for areas in nonattainment with the Clean Air Act and greenhouse gases of 

worldwide concern. Commenters said that scenario is directly contrary to the purpose of a 

regulation named the 'Clean Power Plan Rule.' Fossil fuels are not the only dirty energy source 

that this proposed rule, as written, indirectly sustains. 

Commenters requested for nuclear power to not be included in this proposed rule's clean energy 

standards or in a cap-and-trade program; most importantly, nuclear reactors should not qualify 

for any subsidies under this rule. 

Commenters stated that the EPA estimated costs of CO2 reductions achievable through this 

building block to be from $10 to $40 per metric ton. Commenters observed that Block 3 utilizes 

the same general concept as Block 2, as it shifts generation from an unfavored source (fossil-fuel 

fired) to a favored source (renewables, nuclear, etc.). Commenters stated that the difference here 
538 

is that the favored generators under Block 3 are not existing EGUs under the proposed rule, and 

to make Block 3 work, states would be required to establish renewable energy requirements, 

and/or ensure continued availability of nuclear generation. Commenters concluded stating that 

again, USEPA is relying on parties that are not the targeted existing source. 

Comment 8: Commenters stated concerns regarding the use of nuclear energy and its impact on 

public health and the environment.

Response 8: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and new nuclear units in the 

setting of state goals. While the rule allows incremental generation from new and uprated units 

to be considered in state plans to comply with the rule, the decisions to invest in nuclear 

generation over other types of power are made by corporations who weigh numerous factors in 

making a determination, along with extensive oversight of public safety by the Nuclear 

Regulatory Commission and in coordination with state regulators. Both State Plans and 

decisions by the Nuclear Regulatory Commission undergo a public process to consider potential 

impacts on citizens. 

The following are summaries of the specific public comments under this comment: 

General Opposition 

Commenters stated that EPA should not support nuclear energy in the Clean Power Plan. 

Commenters stated that nuclear energy is not a solution to climate but is part of the climate 

change problem. Commenters added that nuclear power is not a clean energy resource because of 

the unresolved nuclear waste and uranium mine pollution and remediation issues. Commenters 

stated that nuclear costs and environmental issues associated with nuclear power make it an 

unacceptable option for long-term health and environmental sustainability. Commenters stated 

that nuclear is not a sustainable or renewable form of energy as it relies on finite natural 

resources of uranium for fuel. Commenters stated that the EPA should assess the consequences 

of utilizing nuclear power in the context of environmental protection, and concluded that if the 

EPA does this, they will come to the conclusion that nuclear power is too great of a risk to 

consider as an option for power generation. Commenters asked if the EPA is willing to endanger 

the lives of millions of Americans, to be complicit in destroying the economic health and 

infrastructure of the nation, to make thousands of square miles of land and water uninhabitable, 

and to destroy thousands of species. Commenters objected to the use of nuclear reactors to 

generate electricity primarily because of the link between the so-called peaceful use of nuclear 

reactors and nuclear weapons. Commenters stated that there would be no effective medical 

response to a nuclear war, and the threat of a "limited" nuclear war between, for example, 

Pakistan and India, remains. 

Thermal Impacts 

Commenters stated that EPA did not consider the thermal impacts of nuclear energy production, 

including the impacts of nuclear waste heat. Commenters stated that nuclear fission reactions 
539 

continue burning hot for thousands of years, including both radioactively and thermally hot. 

Commenters stated that nuclear fission produces thermal pollution impacts on the earth's 

atmosphere, rivers, oceans and lakes, and exacerbates the greenhouse gas effect. As an example, 

commenters stated that heated cooling water from the Indian Point power plant is dumped in the 

Hudson River, negatively impacting tens of millions of fish, including the short nose sturgeon-- 

an endangered species. Commenters stated that the cooling water and steam released from 

nuclear generation contains radioactive tritium, which continuously warms the atmosphere and 

water sources and compounds over time. Commenters stated that the EPA did not consider the 

potential impacts of tritium emissions, including tritium leaks to water sources and emissions to 

the atmosphere. Commenters added that neither the EPA nor the NRC require routine 

measurements of tritium in offsite private water wells that are used for drinking and irrigation. 

Nuclear Energy is Not Carbon Free 

Commenters stated that nuclear energy is not carbon-free. Commenters stated that nuclear 

energy production results in emissions of CO2, methane, and carbon 14, and observed that 

carbon 14 is produced in the coolant at boiling water reactors (BWRs) and pressurized water 

reactors (PWRs) and is released in the form of CO2 at BWRs and methane at PWRs. 

Commenters referenced a 2010 technical report by the Electric Power Research Institute to 

support their argument that Carbon-14 is produced in the reactor coolant during power operation. 

Commenters stated that nuclear power produces electricity at an average rate of 66 grams of 

equivalent life-cycle carbon dioxide emissions per kWh. 

Impacts of the Full Nuclear Fuel Cycle 

Commenters stated that the EPA did not consider carbon emissions from the full nuclear fuel 

cycle, including mining, milling, processing, conversion, enrichment, transportation, and storage. 

Commenters added that all states of the nuclear fuel cycle must be considered along with their 

hazards and provided a description of each process: uranium recovery to extract uranium ore; 

concentrate (or mill) the ore to produce "yellowcake"; conversion of yellowcake into uranium 

hexafluoride (UF6); enrichment to increase the concentration of uranium-235 (U235) in UF6; 

deconversion to reduce the hazards associated with the depleted uranium hexafluoride (DUF6); 

fuel fabrication to convert enriched UF6 into fuel for nuclear reactors; use of the fuel in reactors; 

interim storage of spent nuclear fuel; reprocessing of high-level waste (currently not done in the 

U.S.); and final disposal of high-level waste. 

Commenters stated that mining of nuclear fuels and other front-end operations negatively 

impacts human health and water resources. Commenters stated that EPA failed to protect 

communities near uranium mines, especially Native American communities, and added that the 

EPA failed to list the thousands of contaminated uranium mining waste sites as superfund sites. 

Commenters listed hazards associated with uranium mining, including: risks to workers, such as 

exposure to dust and radioactive gas; the large volumes of contaminated water that are pumped 

from the mine and released to rivers and lakes; releases of radioactive dust and gas from mine 

vents, which can increase lung cancer risk to nearby residents; the piles of radioactive waste 

rock, which can threaten people and the environment after the mine is closed; and uranium mill 

tailings, which contain radioactive materials and can leach into the groundwater. Commenters 

added that lung cancer is the most serious health hazard associated with uranium mining. 
540 

Commenters stated that two hundred million tons of uranium mill tailings need to be disposed of 

and over ten thousand abandoned uranium mines need to be remediated. Commenters suggested 

that EPA should consider the hazards associated with uranium conversion processes, and 

outlined specific incidents (including references) of leaks of uranium materials associated with 

such processes. 

 Commenters suggested that EPA should consider the hazards associated with uranium 

enrichment, deconversion and fuel fabrication and provided detailed information on these 

processes. Commenters stated that hazards from the uranium conversion and enrichment 

processes come from the handling of uranium hexafluoride, which is toxic and radioactive, and 

reacts with moisture to release toxic hydrofluoric acid. Commenters stated that the health and 

environmental risks of blending and fuel fabrication facilities are similar to those for uranium 

conversion and enrichment. Commenters stated that chemical exposure is the primary hazard at 

deconversion facilities. 

Leaks of Radioactive Material 

Commenters stated that radioactively contaminated gases, liquids, and solids are byproducts of 

nuclear power plant operation. Commenters opined that leaks of toxic radioactive materials 

occur at a large number of power plants across the country. Commenters provided a chart that 

lists ongoing and uncontrolled toxic leaks at 45 of 63 US nuclear power plants. Commenters 

referenced a list that summarizes more than 400 leaks and spills reported for individual plants. 

Commenters stated that the NRC has repeatedly tolerated unmonitored and uncontrolled leaks of 

radioactively contaminated water into the ground and nearby waterways, which negatively 

impacts human health. Commenters stated that radionuclides are leaking into groundwater and 

into the Hudson River from the Indian Point nuclear plant in New York. Commenters added that 

the EPA should protect groundwater to prevent contamination from nuclear facility emissions. 

Commenters stated that trading plutonium and other radioactive waste nuclides for carbon is 

poor energy policy. 

Health Risks and Radiation 

Commenters stated that nuclear poses a health risk and the EPA did not consider the health costs 

of nuclear emissions. Both commenters stated that the proposed rule does not consider the 

hazards of low level nuclear emissions, including cancer and genetic effects. Commenters 

referenced a 1990s National Academy of Sciences study ("BEIR VIII report") that found cancers 

at low radiation doses in cases of in utero exposure, an increase in occurrence of cancers as the 

level of radiation exposure increased, and evidence for the heritable genetic effects of radiation. 

Commenters added that nuclear emissions can also have a negative impact on reproductive 

health. Commenters stated the report confirmed that there is no safe radiation dose. Commenters 

stated that woman and children are most vulnerable to nuclear emissions. Commenters provided 

data to support their claim that there is an increased risk of cancer in children living near nuclear 

power plants, including a 2008 KiKK Study commissioned by the German government, which 

found a 1.6 increase in the relative risk of total cancers and a 2.2 fold increase in leukemias 

among children under 5 years of age living within 5 km of all 16 nuclear plants in Germany. 
541 

Commenters stated that the EPA's current rules do not provide radiation emission standards. 

Commenters further stated that different divisions within the EPA rely on inconsistent lists of 

carcinogenic chemicals and some of the EPA lists do not include radionuclides as carcinogens. 

Commenters stated that unless the current Radiation Protection Standards are strengthened, EPA 

will continue to have lower standards of protection from radioactivity than from other pollutants. 

Water Demand 

Commenters stated that the proposed rule does not take into account the large water demand 

required by nuclear reactors to cool hot radioactive elements. Commenters questioned EPA's 

support of nuclear considering that water resources are becoming increasingly limited due to 

rising temperatures and droughts caused by climate change. Commenters stated that the EPA did 

not consider the vulnerability of nuclear reactors to extreme weather events, including severe 

storms, warm water temperatures, draughts, and coolant water scarcity, and did not consider the 

likelihood that these events could cause nuclear reactors to be derated or even shut down. 

Commenters noted that shut downs during periods of hot weather will result in declines in power 

output during times of high electricity demand. 

Commenters mentioned concerns about handling and use of uranium, as well as nuclear waste 

disposal. 

 Commenters stated that the EPA should prioritize working with other federal agencies to 

develop long-term nuclear waste disposal options promptly. 

 Effect of Shut-Downs/Inflexibility of Nuclear 

Commenters stated that EPA did not consider the potential that reactors may experience 

prolonged or permanent shutdowns due to accidents or other external factors, and how shut 

downs could affect state's ability to meet CO2 reduction goals. Commenters recommended that 

the EPA consider the relative risks of various approaches to reducing power sector emissions. 

Commenters stated that the EPA did not consider the inflexibility of nuclear power. Commenters 

stated that reactors must operate close to 100 percent output and it takes a long time to change 

the power level significantly or bring reactors back on line. For these reasons, both commenters 

stated that nuclear plants are a poor match for variable power sources. Commenters added that 

nuclear power is not resilient and requires an external power source to operate, requires large 

amounts of water, and is vulnerable to severe weather events. 

Cost 

Commenters stated that nuclear power plants should not be supported because they are too 

expensive. Commenters opposed any Federal program to guarantee loans to finance nuclear 

reactors, as such a program would be unaffordable considering the limited available federal 

resources. Commenters added that tax payers should not be asked to subsidize nuclear reactors. 

Commenters stated that EPA should calculate the true cost of nuclear power using recent 

marginal and levelized costs rather than overnight costs, which would show that nuclear is not 

cost-effective. Commenters stated that nuclear plants would not be considered cost effective if 

the real costs of uninsured liabilities were paid, instead of being governmentally capped by the 
542 

Price-Anderson Act, and if the real costs of waste management and long term disposal and 

storage were included. Commenters disagreed with the EPA's assumption of zero cost for 

nuclear plants under construction. Commenters stated that the EPA did not consider the huge 

costs of constructing new plants and decommissioning old ones or the cost of treating and storing 

waste. Commenters stated that the EPA did not consider the added cost of spinning reserves by 

large reactors and associated CO2 emissions where those reserves are in the form of gas 

turbines. 

Commenters stated that as the price of renewable energy decreases and capital and O&M costs 

of nuclear rises, it will be impossible for nuclear energy to survive. Commenters added that the 

Clean Power Plan does not address how states are supposed to maintain the viability of their 

existing nuclear reactors in the face of the economic reality of the phase-out of nuclear power. 

Commenters further stated that the EPA does not indicate how it determined that nuclear power 

could achieve carbon reductions at a reasonable cost. Commenters stated that it appears EPA's 

assumption of reasonable cost is based on their assumption that nuclear has no carbon emissions, 

which is erroneous. 

Commenters referenced a Union of Concerned Scientist study, which reported that the estimated 

value of legacy subsidies to nuclear power were at least 7.5 cents/kWh. Commenters opposed the 

artificial subsidization of nuclear. Commenters added that the existence of public subsidies for 

nuclear, which include capital formation, shifting of accident risks, and the costs of waste 

management, is evidence that nuclear is not based on efficient market-based determinations for 

energy options. Commenters stated that the costs represented by nuclear subsidies for retaining 

nuclear generation have not been analyzed. Commenters added that subsidies result in huge costs 

to tax payers. Commenters stated that the Ginna nuclear reactor in Rochester, NY, which is 

threatening to close, could cost households $1,000 each if it is subsidized to remain operational. 

Nuclear Waste Disposal/Storage 

Commenters stated that the EPA has no clear disposal plan for spent fuel from nuclear reactors. 

Commenters stated that EPA should ensure long term/permanent containment of nuclear waste is 

established. Commenters stated that there is no solution for radioactive waste disposal. 

Commenters opined that there are no guarantees that radioactive chemicals will not be released 

into the environment. Commenters stated that nuclear waste has been accumulating in unsafe and 

unsecured storage for over 70 years. Commenters added that spent fuel is stored on-site or at 

temporary sites near metropolitan areas. Commenters stated that the solution to the nuclear waste 

problem is to stop generating it. 

Commenters stated that EPA should consider the hazards of interim storage, reprocessing, and 

final disposal, and provided a list of references related to these hazards. Commenters expressed 

concern about the high radioactivity of spent fuel. Commenters listed various risks of nuclear 

waste storage, including: 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 stated that the NRC refused to 

require hardened dry cask storage requirements, which would be safer, because of the financial 

burden this would impose on the nuclear power industry. Commenters added that the NRC and 

Blue Ribbon Commission put off any solution to the problem of nuclear waste to the distant 
543 

future and recommended that the NRC and the EPA provide advice to the administration and to 

congress to chart a more aggressive path to proper handling and disposal of spent nuclear fuel 

and other radioactive wastes. 

Disproportionate EJ Impacts on EJ Communities 

Commenters stated that the impacts from nuclear energy production result in disproportionate 

health and environmental costs to environmental justice communities, including Native 

Americans. Commenters stated that mining and milling operations in the U.S. disproportionately 

affect indigenous populations. Commenters added that the majority of workers in mines are 

Native Americans who are employed in low paying positions, and Native American populations 

have suffered disproportionality from uranium related activities. 

Renewable Energy and Energy Efficiency Over Nuclear

Commenters stated that states can increase their use of renewable energy and energy efficiency 

to meet their targets, and reliance on nuclear is unnecessary. Commenters suggested that 

renewables can be used to meet carbon reduction targets faster and at a lower cost than nuclear. 

Commenters referenced an analysis from Sovacool, Ramana, Jacobson et al, which concluded 

that wind energy is 96 times more effective at displacing carbon than nuclear power, and other 

renewable sources range from 20 times to twice as effective. Commenters stated that nuclear 

power produces electricity with a mean of 66 grams of equivalent life-cycle CO2 emissions per 

kWh, compared to renewable generators, which produce 9.5 to 38 grams of CO2 per kWh. 

Commenters added that although nuclear power produces less carbon emissions than fossil fuels, 

renewable energy is 2 to 7 times more effective at fighting climate change. Commenters 

referenced and summarized studies that show that renewable energy, when interconnected with 

adequate transmission infrastructure, can replace conventional base-load power. Commenters 

stated that the term base-load, as viewed by utilities and power companies, is an outdated 

concept, and renewable energy and energy efficiency can meet energy and capacity demand 

needs. Commenters stated that it is technologically and economically feasible to phase out CO2 

and nuclear power at the same time, and it can be done at a reasonable cost by 2050. 

Commenters described investments that were made towards expensive nuclear power plants in 

Texas, and stated that the investment money could have been used for renewable energy and 

energy efficiency programs. 

Commenters stated that the EPA underestimated the potential of renewable energy in the 

proposed rule, and referenced a report from the Union of Concerned Scientists to support their 

conclusion. Commenters provided a chart showing increasing future energy consumption by 

renewable energy sources. Commenters recommended that the EPA include realistic (more 

stringent) renewable standards in the proposed rule to encourage states to prioritize renewables 

over nuclear. 

Commenters stated that by including nuclear in renewable energy standards and cap-and-trade 

programs, the growth of renewables would be discouraged. Commenters recommended that the 

EPA should encourage the shut down and decommissioning of nuclear power plants to 

incentivize the installation of renewable power generating capacity and energy efficiency. 

Commenters stated that EPA should conduct a comprehensive assessment among alternative 
544 

electric generating options, and such assessments conducted by others have shown that 

renewables, including wind and solar, and energy efficiency programs are preferable. 

Commenters stated that while it may appear less expensive to replace nuclear generation with 

natural gas than to use renewables, the EPA's task is to curb greenhouse gas emissions, which 

means reshaping market rules where necessary. Commenters added that, when setting targets for 

the Clean Power Plan, the EPA must look at cost and feasibility, and energy efficiency measures 

and renewables are generally cheaper than natural gas for that purpose. 

Potential of a Nuclear Disaster

Commenters stated that support for nuclear is unacceptable considering the potential of 

catastrophes. Both commenters stated that the EPA should not trade greenhouse gas pollution 

from fossil fuel sources for the high risk of disasters that can occur with nuclear. 

Commenters stated that the EPA's proposal to credit nuclear power plants at risk of closure keeps 

older nuclear reactors online longer and increases the risk of an accident, Commenters stated that 

EPA cannot ignore the risks posed by prolonged operation of nuclear reactors. Commenters 

stated that the EPA provides no substantive analysis of the implications of supporting an aging 

fleet of nuclear reactors with significant safety problems. Commenters stated that the uranium 

fuel in nuclear reactors melts quickly without cooling water, and containment structures 

surrounding the reactors were not designed to hold melted fuel, as safety regulators previously 

considered a meltdown impossible. Commenters stated that the Nuclear Regulatory Commission 

decided not to impose requirements on nuclear plants that would protect the public from 

radioactive releases, such as the placement of filters on reactors. 

Commenters stated that off-site releases of fission products comparable or worse than those 

estimated to have taken place at Chernobyl and Fukushima could occur at U.S. plants. 

Commenters provided Chernobyl and Fukushima as evidence that nuclear power is dangerous 

and dirty, and should be excluded from the clean power plan. Commenters provided detailed 

information on the large scope and magnitude of the Chernobyl and Fukushima nuclear disasters, 

including their health and environmental effects. Commenters asserted that Fukushima 

illustrated the weaknesses of the "defense in depth" design. Commenters provided a list of 

nuclear disasters with references and suggested that EPA should consider the hazards posed by 

nuclear reactors. 

Commenters stated that U.S. nuclear plants are vulnerable to accidents caused by natural 

disasters such as earthquakes, flooding, and extreme storms. Commenters stated that nuclear 

power plants are vulnerable to terrorist attacks, and government plans to defend nuclear plants 

from such attacks would not be effective. Commenters listed the potential impacts of a terrorist 

attack on a nuclear facility if terrorists had decided to attack a nuclear plant on 9/11. 

Commenters stated that spent fuel facilities at nuclear sites are particularly vulnerable to terrorist

attacks. Commenters opined that no remedial actions have been required to fortify spent fuel 

storage facilities, and even those measure may not be adequate. Commenters provided references 

on the potential consequences of various modes of terrorist attacks on spent fuel facilities. 

Commenters stated that the EPA failed to describe the risks and consequences of nuclear 

failures. Commenters stated that the EPA should consider a report by the National Academy of 
545 

Sciences (NAS) on Lessons Learned from Fukushima, and even the NAS understated the risks to 

human health and the environment of a nuclear disaster. Commenters referenced a detailed risk 

and consequence assessment that Commenters submitted to NRS in December, 2013, which uses 

Indian Point Nuclear Power Plant as an example case of the potential impacts of a nuclear 

disaster. Commenters submitted a list of deficiencies of the NRC Draft Generic Environmental 

Impact Statement (DGEIS) which also apply to the EPA. 

Commenters stated that the EPA failed to acknowledge the consequences of a spent fuel fire or 

release, and the NRC failed to properly assess the magnitude of the consequences. Commenters 

stated that even a partial loss of cooling water or pool level could create a disastrous radioactive 

plume, and a zirconium fuel rod cladding oxidation fire could release far more radioactivity than 

exists in the reactor core. Commenters provided references and detailed information concerning 

the potential impacts of spent fuel releases. Commenters stated that the spent fuel pool 

inventories at Fukushima were far less than exist at almost all U.S. spent fuel pools. Commenters 

provided results of a RASCAL 4.3 modeling of a spent fuel pool release from Indian Point Unit 

2. Commenters detailed the results and potential wide-spread impacts of a nuclear spent fuel pool 

release based on the RASCAL model. Based on the analysis, the commenters concluded that the 

Chernobyl disaster was actually much smaller in impact contamination and land area than the 

possible impact from a single spent nuclear fuel pool release from any US nuclear power plant 

site. Commenters stated that due to certain conservative aspects of the RASCAL model, the 

actual contamination levels and doses may be much larger than calculated. 

Commenters recommended that the NRC and EPA correct their methods of risk assessment, 

particularly to account for events with high consequence. Commenters stated that the NRC 

employed flawed methodology in its assessment of risk to on site spent nuclear fuel, which 

incorrectly concluded that risk was low. Commenters opined that the NRC assigns low 

probabilities of occurrence to events with high consequences. Commenters stated that the NRC 

acknowledged that the probability of a nuclear event is unquantifiable or is subject to extreme 

uncertainty, and concluded that the analysis should therefore should be based solely on 

consequences. Commenters added that terrorist actions are virtually impossible to predict. 

Commenters further stated that the NRC did not include the full time span of exposure to risk 

that exists with nuclear, especially considering the issue of delays in managing nuclear wastes, 

and the NRC incorrectly applied an annual risk factor. Further, the commenters stated that 

population growth will continue to bring urban areas closer to nuclear power plants, and many 

nuclear plants are already located near metropolitan areas. 

Comments Related to At-Risk Nuclear Plants

Commenters opposed the EPA's inclusion of six percent of at risk nuclear generation in the goal 

setting equation. Commenters stated that the six percent at risk factor is not a good estimate in 

states where specific nuclear units are at risk in their entirety, and a shut-down would result in a 

much greater percentage of lost nuclear generation than six percent. Commenters stated that 

nuclear units are not a fossil EGU covered under the CAA. In addition, the commenters stated 

that utilities investing in nuclear are at a greater financial and regulatory risk due to the capital 

cost and permitting and construction timeline associated with nuclear. To solve these issues, the 

commenters recommended that the EPA remove nuclear from the Clean Power Plan, which 
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would make the goal setting and compliance processes much simpler, and would make 

compliance less risky for the EPA, states and utilities. 

Commenters stated that at risk nuclear generation sources may fail, and they are not reliable 

enough for including in state target emission rates. 

Advances in Nuclear Technologies 

Commenters opposed EPA's support of new technologies and advances in nuclear power. 

Commenters stated that small modular reactor (SMR) technologies present unique safety 

problems, including inspection of manufacturing and foreign plants, access to below ground 

facilities, integrated systems, waste management, retrieval of materials with potentially higher 

levels of radiation, flooding of belowground facilities, and common designs that create potential 

product-side failure. Commenters suggested that mass recall of these technologies is likely. 

Commenters stated that the EPA would be misguided to believe that SMR technologies will be a 

viable alternative to coal-fired production of electricity. Commenters further stated that a 

Generation III reactor design received approval from the NRC, but not without objection from 

the NRC commissioners and technical staff. 

Studies/Monitoring

Commenters stated that the EPA cannot promote nuclear energy as emissions free when it does 

not engage in any meaningful or comprehensive monitoring of nuclear emissions, including 

greenhouse gases and radionuclides. Commenters stated that the BSER must include an analysis 

of the non-air quality impacts of nuclear. Commenters stated that the EPA must conduct 

meaningful studies on the impacts of nuclear energy before supporting it in the proposed rule. 

Miscellaneous 

Commenters supported EPA's proposal to recycle heat with Combined Heat to Power (CHP), but 

recommends that EPA include CHP electricity production for the waste at every U.S. power 

plant, including nuclear plants, which produce a disproportionate amount of waste heat. 

Commenters stated that about 63 percent of the energy generated in the U.S. is wasted in 

conversion losses. 

Commenters stated that nuclear operators should not be allowed to sell carbon offset credits, as 

these credits could then be sold to utilities operating coal facilities, which would defeat the 

purpose of the proposed rule. 

Commenters stated that the EPA assumed that new reactors will be licensed and old ones 

relicensed; however, some plants may not receive licenses or extensions for technical and 

economic reasons. 

Commenters stated that nuclear generation should not be an acceptable control measure for 

purposes of state compliance with a BSER standard. Commenters stated that nuclear generation 

is a control measure that will generally fail to meet EPA's criteria for a state plan to be 

approvable, and if EPA finds that nuclear generation is not practically enforceable, and thus 

ineligible for inclusion in a state compliance plan, then it should not be included in the building 
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blocks. Additionally, the commenters stated that the costs associated with nuclear energy 

generation as a control technology under the BSER building block framework are unreasonable 

and far exceed costs of other technologies included in the BSER. Commenters recommended that 

EPA remove nuclear generation as a compliance option under BSER. 

Commenters stated that campaign contributions and political favors are the reason that the EPA 

supports nuclear. 

Comment 9: Commenters recommended removing all existing non-fossil fuel generation from 

the BSER in a manner that treats low- and zero-emitting sources similarly. 

Response 9: EPA acknowledges the comments and has decided to treat all low- and zeroemitting sources similarly in the final rule. As such, the BSER for the final rule will not include 

either of the proposed provisions for existing and under construction nuclear units in the setting 

of state goals. Please see section V.A of the preamble for further discussion of the decision to 

exclude nuclear power from BSER. Also see sections VIII.K and VIII.G of the preamble for 

further discussion of the flexibility states have in developing state plans to utilize nuclear 

generation and ensure compliance. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended removing all existing non-fossil generation from the BSER formula 

and starting with a fossil intensity standard that is adjusted by the new resources and changes 

delivered by the 4 building blocks. Commenters said this has the effect of removing both existing 

non-hydro renewables and the partial inclusion of nuclear and allows all non-fossil resources to 

be treated the same. While Commenters stated they understand the concern of increased CO2 

emissions if existing nuclear plants retire, and they asserted each plant should be evaluated by 

state and federal regulators individually. Commenters said public safety is the institution's 

foremost concern regarding nuclear power. Commenters said many NRDC members live within 

the emergency planning zones (i.e., within a ten mile radius) of nuclear power plants. 

Commenters said existing nuclear plants need to implement the full set of post-Fukushima 

accident safety upgrades and complete the intensified flood and seismic risk reviews required on 

a rolling basis since the Fukushima accident- as well as any subsequent plant safety 

modifications. Commenters were concerned about heavy reliance on nuclear energy, given its 

consistently poor economics and the longstanding, unsolved problems for nuclear energy: reactor 

safety, radioactive waste, and nuclear weapons proliferation. 

Commenters recommended that states and regions can choose to adopt policy approaches that 

assist older non-fossil resources to remain economic, taking into account public safety impacts. 

Commenters supported the inclusion of under-construction nuclear plants in target setting. 
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Comment 10: Commenters recommended the EPA remove support for nuclear energy in the 

Clean Power Plan. 

Response 10: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and new nuclear units in the 

setting of state goals. 

The following are summaries of the specific public comments under this comment: 

Commenters opposed the use of nuclear energy due to nuclear costs, extensive legacy subsidies, 

and future environmental issues. 

Commenters provided general opposition to nuclear energy due to its cost, risk of usage, and 

potential waste storage and cleanup concerns. 

Commenters opposed the use of nuclear energy as a part of the answer for carbon pollution due 

to concerns of radiation and waste storage. 

Commenters suggested the EPA to exclude nuclear energy as alternatives to be encouraged, 

because of the concerns of nuclear waste storage, pollution from uranium and immense water 

usage. 

Commenters opposed nuclear energy as an option for CO2 emission reduction due to nuclear 

energy's risks to human health and communities. 

Commenters opposed the use of nuclear reactors as a dangerous source of energy because of the 

concerns for unsafe and improper storage of radioactive material and waste. 

Commenters disagreed that nuclear power is a solution to reduce carbon emissions. Commenters 

believed that nuclear power production could be replaced by renewables and 

conservation/efficiency efforts. Commenters suggested the EPA to consider broader 

environmental harms caused by the nuclear industry, and also periodically reassess generators 

for the Clean Power Plan. 

Commenters stated that nuclear power should not be continuously supported since it is the most 

expensive, the most delayed, and dangerous power. Commenters mentioned the concerns in 

uranium mining and processing, nuclear plant building, transportation of uranium and used 

radioactive wastes. 

 

Comment 11: Commenters stated power purchase agreements should be included as a 

compliance option when power is purchased outside of a given state’s boundaries. 

Response 11: EPA acknowledges the comments and provides a detailed discussion of provisions 

for the treatment of interstate effects in state plans in section VIII.L of the preamble. 

The following are summaries of the specific public comments under this comment: 
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Commenters recommended that power purchase agreements be allowed as a compliance 

option. Commenters said in addition to RE in Building Block 3, zero-emitting nuclear energy is a 

compliance option afforded to states; however, in-state nuclear energy remains unavailable in 

several states due to bans on nuclear electricity generation. Commenters said in Kentucky, KRS 

278.600-610 states that a nuclear power reactor cannot be certified by the state Public Service 

Commission (PSC) unless a disposal site for the high-level nuclear waste is available by the time 

the plant needs disposal capacity. Commenters said the PSC also could not certify the project 

unless it finds that the cost of high-level nuclear waste disposal 'is known with reasonable 

certainty.' 

Commenters concluded Kentucky's only viable option for nuclear energy to reduce CO2 

emissions from the electricity sector is the utilization of imported nuclear capacity. Commenters 

said until such time that nuclear generating capacity is an in-state option, the commenters 

recommend that EPA allow states to utilize power purchase agreements (PPAs) from zero/low 

emitting sources such as nuclear as a compliance option. Commenters said this same 

recommendation applies to PPAs for imported renewables; this approach appropriately provides 

credit for GHG reductions at the point of consumption. Commenters stated EPA should include 

allowing nuclear PPAs to be considered toward the investing utility's compliance determination; 

this approach supports efficient compliance and recognizes that customers' utility rates funded 

these resources. Commenters said specifically, Alliant Energy's subsidiary IPL currently has a 

nuclear PPA through February 2025 for energy from the DAEC. Commenters said allowing IPL 

to include the DAEC PPA as a compliance measure would incent possible continued operation of 

DAEC and future extension of this PPA contract. 

Commenters stated JEA, in anticipation of future environmental regulations, secured a 20-year 

PPA for 200 MW of capacity and energy from the two under construction units at Vogtle 

Nuclear Plant in Augusta, Georgia, expected to be available in 2017-18. Commenters said JEA 

has also purchased an option for up to 440 MW of nuclear capacity and energy from a plant 

under consideration in South Carolina. Commenters said under the proposed Clean Power Plan, 

JEA would not see the CO2 benefits of either of these, as the zero-carbon credits would stay in 

the states where they are generated (Georgia and South Carolina). Commenters said this aspect 

of the regulation greatly reduces the value of any clean energy source not located within Florida. 

Commenters continued JEA remains involved in discussions with other Florida utilities 

regarding siting and constructing new nuclear plants in Florida; with the current lead-time for 

nuclear construction, no new assets can be expected in the state before the mid-to-late 2020s, too 

late to support the CPP required ramp down beginning in 2020. 

Commenters stated while the initial capital cost for a nuclear plant is high, it compares favorably 

to other generation on a Levelized Cost of Energy (LCOE) basis, due to the low and steady price 

of fuel. Commenters said municipal utilities such as JEA cannot however make a commitment 

to an alternative energy supply, such as nuclear, until there is a clear and final regulatory 

mandate, because any additional costs directly impacts their customers. Commenters said with a 

final approved state plan conceivably no earlier than June 2018 (assuming applicable 

extensions), there is not enough time to implement any plan before the mid-2020s for a 

conventional energy source (NGCC), and 2030 if nuclear is a component of the solution. 
550 

Commenters stated EPA should clarify the expected accounting for interstate transfer of energy 

and CO2 emissions and provide multiple options to states for dealing with those interstate energy 

transfers. Commenters said EPA should also work for streamlined approval of new nuclear units 

to demonstrate support for zero carbon baseload generation. 

Commenters stated that the rule offers no "credit" or recognition of nuclear power plants' zeroemissions generation to owning partners outside of the states in which these plants are located. 

Commenters stated that the rule does not appropriately recognize nuclear assets as a whole or to 

its owner and their customers who pay for these zero-emitting generation units. Commenters 

stated that their customers pay for the investment in nuclear, and they deserve the zero-emissions 

credit for this commitment. Commenters stated that the final rules should ensure that the states 

establish credit for compliance purposes by allowing the MWh obtained from nuclear power, as 

delivered based on ownership, to those corresponding states; such an approach would directly 

serve and support EPA's principal objective - ensuring continued operation of the nation's largest 

source of carbon-free generating capacity. 

Commenters stated that states that own and import generation from a nuclear facility that is 

located in another state should get credit as if the nuclear generation is located within the state 

receiving the import. Commenters remarked that utilities and customers in the importing state 

have made significant financial investments in these nuclear units and should receive appropriate 

credit for developing nuclear generation. Commenters contended that this treatment of nuclear 

units, located outside the state such units serve, also ensures that the customers who are actually 

using the generation will receive benefits associated with nuclear generation under the Proposed 

Rule. Commenters contended that this is a fair methodology that would credit those states that 

made an investment in carbon-free nuclear generation without harming exporting states. 

Comment 12: Commenters stated EPA should consider the relicensing process for existing 

nuclear units when setting the final goal in 2030. 

Response 12: EPA acknowledges the comments and has determined that the final rule will not 

include nuclear generation in the goal-setting methodology. Relicensed units are part of the fleet 

of existing power generation and relicensing at the current generation level will not result in any 

decrease in fossil-fuel fired generation. However, the final rule allows relicensed facilities to 

count towards compliance if there is an associated uprate in their capacity. Preamble sections 

V.A and VIII.K provide a discussion of how incremental generation from new and uprated 

nuclear power is addressed as approvable actions to include in state plans. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that license extensions should not be assumed to be automatic, 

particularly for nuclear plants beyond 60-year license limits. 

Commenters recommended that the EPA consider the lifetime of existing nuclear units where 

many units will reach their 60-year license limit by 2029. Commenters said three units with 
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licenses scheduled to expire prior to 2030 are already in their extended period of operation and 

would need to obtain additional license extension to extend their operating lives to 80 years 

(known as subsequent license renewal). Commenters said though it is expected that many 

reactors will apply for and receive license extensions out to 80 years, there is no level of 

certainty at this time. 

Commenters stated there is significant uncertainty as to whether the Nuclear Regulatory 

Commission (NRC) will extend the operating licenses for each nuclear unit as assumed. 

Commenters stated license renewal is a long and multifaceted process which is based on 

submittals of complex studies to the NRC and its detailed review. Commenters encouraged EPA 

to consider evaluating a lower bound case and develop a sensitivity analysis on the potential 

future of nuclear power generation capacity. 

Commenters stated the current U.S. fleet of operating nuclear reactors stands at 100 units; these 

reactors were originally licensed for 40 years. Commenters said license extension (for an 

additional 20 years) has been applied for and granted in many cases, although a number of plants 

have shut down prior to the end of their licensed lifetime. 

Commenters stated there are 28 units that have licenses scheduled to expire before 2030; of 

these, 18 units have pending applications submitted to extend their license from 40 to 60 years. 

Commenters stated due to on-going economic pressures and the need for many plants to obtain 

license extensions, there is significant uncertainty as to the number of reactors that will be 

operating in 2030; several nuclear plants have already shut down prior to their license end date. 

Looking beyond 2030, an additional 50 units have licenses expiring between 2030 and 2040. 

Commenters stated there also is uncertainty that either companies will decide not to seek license 

extensions due to economic considerations, or that the Nuclear Regulatory Commission may not 

approve further extending the lifetimes of these units. Commenters said as a consequence, the 

estimate EPA developed of available non-emitting nuclear power may be an overestimate. 

Commenters recommended that EPA consider a lower bound case and a sensitivity analysis on 

the potential nuclear power capacity. 

Commenters stated given the important role nuclear generation plays in providing zeroemissions power, the final guidelines should help incent the continued operation of all existing 

units by defining as "new" nuclear capacity any nuclear plants that have been relicensed to 

operate beyond 60 years-and any plants that have not received license extensions to operate 

beyond their original 40-year license term before 2012-and allowing their full generation to be 

included in the state's compliance calculation, rather than assume that every nuclear unit will 

operate through at least 2030. 

Commenters stated over two-thirds of the nuclear fleet will reach the end of their first license 

extension period soon after the 2030 compliance deadline for this program; currently, seventyfour of the 100 operating nuclear units have already received NRC approval to operate after 40 

years, with the remaining 26 units either under NRC review or expected to file for review. 

Commenters said approximately 31 GW of nuclear generating capacity will reach the end of 

their 60-year licenses between 2029 and 2035-thus requiring plant shutdown unless NRC 
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approves a second license extension. Commenters said without further significant financial 

investments and licensing action by the licensee, these units represent a power generation source 

with carbon-free emissions that are truly "at risk" of shutdown. Commenters said as states are 

legally obligated to demonstrate continued compliance with the final state goals, sustaining these 

emission reduction targets will rely heavily on the continued operation of the existing nuclear 

facilities. Commenters said recognizing these relicensed units as new units will not delay or 

dilute a state's 2030 emission reduction targets, but it will contribute to ensuring that the state 

goals can be maintained; the impact on U.S. CO2 emissions of losing so much nuclear 

generation in such a short period of time should be reason enough to incent the continued 

operation of these units provided they can meet the necessary requirements. 

Commenters stated much like the process for power uprates, NRC's license renewal review is a 

detailed process that includes significant capital investment and safety reviews, and typically 

takes about 30 months. Commenters said according to the NRC's 1995 license renewal rule, 

extensions of up to 20 years can be granted, provided the company demonstrates to NRC that it 

will manage aging issues effectively during the renewal term. Commenters said the review also 

addresses the potential environmental impacts of continued plant operation. Commenters said in 

order to continue to run beyond their initial 40-year license, nuclear plants must operate as if 

they were new plants, subject to the same safety and operational requirements. Commenters said 

it is also likely that over the course of their 60- or 80-year lives, nuclear plants will have had 

most if not all of their operating components and systems replaced, effectively rendering them 

new. 

Commenters stated the NRC Commissioners recently endorsed the use of existing, well 

understood 10 CFR 54 regulations to establish a basis for nuclear units to apply for a subsequent 

license extension to operate beyond 60 years; these existing regulations will be supported with 

enhancements to existing license renewal tools and guidance documents, adding additional 

aging-related system reviews and associated upgrades. 

Commenters stated as a specific example, the NRC licenses for Dominion's existing nuclear 

stations begin to expire in 2032; Dominion has initiated an evaluation of the life of critical 

components, necessary equipment upgrades to preserve unit efficiencies and other modifications 

needed to ensure the safe and reliable long-term operation of these facilities beyond the current 

license period. Commenters said the preliminary cost estimate for Dominion's Surry nuclear 

power station provides early evidence of the lead time and equipment upgrades needed to secure 

NRC relicensing to operate beyond the current 60-year period. Commenters said while costs will 

vary for each type of reactor design and location, Dominion's projections for the Surry station, a 

typical pressurized water reactor, are comparable to the costs of constructing a new combined 

cycle natural gas unit. 

Commenters stated the scoping analysis shows costs in range of $0.5 billion to $1.5 billion, 

dependent upon the actual components needing to be replaced to extend the operational 

performance required for a subsequent twenty-year license extension; it is reasonable to expect 

that such items may include (1) major components, such as steam generators and heat 

exchangers; (2) aging systems, such as analog control systems and ventilation systems; (3) high 

voltage power cables; and (4) aging structures. 
553 

Commenters stated EPA's plan recognizes the contribution of new nuclear units to help achieve 

the reductions in carbon dioxide in the power sector by allowing states to use generation from 

these facilities in their 111(d) compliance plans; the identical policy justifications are applicable 

to nuclear units relicensed to operate past 60 years. 

Commenters stated the continued operation of these zero-emitting resources require significant 

financial investments that are comparable to building new combined cycle gas units, yet without 

the associated carbon emissions that would be associated with the gas units. Commenters said 

Dominion has under construction two 1,300-megawatt natural gas combined cycle units; those 

facilities cost an estimated $1.2 billion, required less than two years to obtain the necessary 

permits, and will be constructed within three years. 

Commenters stated the NRC relicensing time horizon requires that utilities begin planning today 

to determine if a subsequent license renewal is a viable option; without an appropriate incentive 

to proceed with the NRC process, the lowest cost option for new or replacement base load 

generation, without regard to carbon emissions, is a new natural gas combined cycle unit. 

Commenters said as such, these relicensed nuclear units deserve to be eligible for compliance in 

111(d) plans because of their zero carbon profile and their significant contribution to maintaining 

the stability of the electric grid. 

Commenters stated that the EPA should be cautious about taking the new, under-construction 

nuclear power for granted. Commenters also stated that it may be impossible to solicit 

subsequent license renewal for the old facilities out to 80 years for compliance. 

Commenters suggested that EPA should assume that no existing nuclear unit will operate beyond 

60 years, and consider any generation from an existing nuclear unit that in fact does receive a 

license extension beyond 60 years as new nuclear and allow the states to include 100 percent of 

that generation in compliance demonstrations. Commenters stated that while adopting this 

approach will not guarantee that existing nuclear units can or will be able to continue operation 

beyond 60 years, it would provide a significant economic incentive to do so. 

Commenters supported re-licensing efforts at operating nuclear plants that will allow them to 

operate beyond 60 years, and stated that the productive lifetime of nuclear plants must be 

maximized. 

Commenters stated that significant uncertainty remains to whether existing nuclear units would 

be permitted to operate beyond their licensed 60-year lifetimes, and that permitting of nuclear 

reactors is under the authority of the NRC and is not under the control of the states. 

Commenters stated that the EPA assumes that the states can cause about 6 GW of "at risk" 

nuclear plants to continue to operate in 2029 and beyond. Commenters stated that an analysis of 

existing nuclear power plants shows that 28 units have licenses which will expire before 2030, 

and only the NRC has authority to approve license extensions, so keeping those 28 plants 

running is something that a state cannot control. Commenters stated that these 28 units represent 

considerably more than 5.8 percent of the nuclear fleet, and recommends that the EPA should at 

least consider a case in which a large amount of existing nuclear capacity is forced to retire 

before assuming that base-load coal capacity can be eliminated. 
554 

Commenters stated that in the development of the state goals through application of BSER, the 

EPA assumed the license renewal of all existing nuclear units up to a final life span of 60 years; 

however, EPA cannot and should not presume a licensing outcome that is presently unknown. 

Commenters stated that the EPA's final 111(d) rule should exclude nuclear units whose license 

expires prior to 2030 from its calculation of BSER; further, consistent with the EPA's treatment 

of new nuclear plants, any unit whose license expires prior to 2030, and receives a license 

renewal approval after 2012 should be considered a "new" nuclear unit for the purpose of 

compliance. 

Commenters stated that the EPA has made a huge, though implicit, assumption about future 

licensing actions of the Nuclear Regulatory Commission (NRC) in relation to existing nuclear 

power plants, by assuming that essentially all existing nuclear plants whose licenses expire 

before 2030 will have their licenses extended. Commenters stated that, in reality, reactors 

representing about 30 percent of nuclear generation capacity, are not currently licensed to 

operate in the year 2030 or beyond. Commenters stated that the EPA is basically making 

assumptions about nuclear safety and spent fuel generation in an area that is reserved by law for 

the NRC - without any discussion of its rationale. Commenters also stated that the costs of spent 

fuel storage over 300 years, including repackaging of the nuclear waste are estimated to be about 

$180 billion, and that the EPA is obliged to consider the costs of indefinite storage of nuclear 

wastes in its consideration of whether existing nuclear plants should be included in the best 

system of emission reduction. Commenters concluded that to be technology neutral and to 

respect the separation of functions of the EPA and the NRC, the EPA should assume in its 

electricity generation analysis for the purpose of the Clean Power Plan that licenses of existing 

plants would expire as presently scheduled. Commenters also stated that the EPA should drop 

existing nuclear power plants from its method of computing target rates of CO2 emissions for 

future dates. 

Commenters stated that the EPA should refuse to accept reactors whose licenses have not been 

extended beyond 2029 in state implementation plans, because states can no more presume to 

second guess NRC license extension decisions than can the EPA. Commenters stated that this 

should be explicit in the final rule. Commenters also stated that states that use existing nuclear 

units whose licenses expire after 2030 will be faced with the possibility of sudden increases in 

CO2 emissions at that time, and that the EPA should put states on notice that they will be 

expected to maintain compliance immediately in the postreactor shutdown period. Commenters 

recommended that the EPA include the following guidelines to states that include reactors whose 

licenses are due to expire after 2030: "- States will be expected to plan in advance and implement 

measures to maintain the target emission rates after the shutdown of nuclear power reactors. For 

instance, states could do this by implementing renewable portfolio standards and efficiency 

measures beyond those used to calculate the target rates." 

Commenters stated that the age of the nuclear fleet is a key factor in the operating cost and 

maintenance issues contributing to retirement decisions, but EPA cannot assume that every aging 

nuclear plant will be granted additional licenses by the NRC to operate past sixty years. 

Commenters stated that because the second license renewal is beyond the control of any given 

operator or state, it would be unfair to build such an assumption into state goals. Commenters 

stated that it may also be useful for EPA to include in its nuclear preservation compliance all 

units granted license renewals to operate beyond forty years; as of June 2, 2014, 73 of 100 
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operating units had received such NRC approval and 27 units were under review or expected to 

file. 

Commenters stated that under building block three, the EPA cannot implement the nuclear 

provisions because the NRC has authority over the permitting, re-permitting, commissioning and 

decommissioning of nuclear power plants; nor does EPA have authority to extend the permitting 

life of a nuclear power plant, and further it is equally misguided to assume that all existing 

nuclear power plants will ultimately be relicensed. Commenters stated the opposite is true as 

demonstrated in, the recent decommissioning of the Vermont Yankee nuclear power plant, 

growing public concern of the safety of nuclear power plants after the Fukushima Daiichi nuclear 

disaster in Japan and the relative age of their nuclear power plants. Commenters stated that the 

average age of U.S. commercial reactors is approximately 33 years and commercial nuclear 

reactors are licensed to operate for 40 years by NRC; New York has one of two of the oldest 

operating reactors in the United States, Nine Mile Point 1, which entered commercial service on 

December 1, 1969. 

Commenters stated that according to EIA, the nuclear power industry is considering submitting 

applications to extend the operating licenses of existing plants for an additional 20 years that 

would allow them to continue operating beyond 60 years. Commenters observed that to date, no 

reactor has applied for or received a license extension from the Nuclear Regulatory Commission 

(NRC) beyond 60 years, as most U.S. reactors will not reach this point until after 2030. 

Commenters stated that extending reactor licenses beyond 60 years raises important safety issues 

that will need to be carefully considered by the NRC, and are outside of the EPA's jurisdiction in 

this venue. Commenters concluded that if any existing reactors do receive an additional license 

extension, they do not believe these should be counted as new generation for the purposes of 

compliance. 

Comment 13: Commenters expressed general support for nuclear power. 

Response 13: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the provisions we had proposed for nuclear units in the setting of state goals, 

and will allow incremental generation from new nuclear units and uprated units to be applied 

towards compliance. Please see section V.A of the preamble for further discussion of the 

decision to exclude nuclear generation from BSER. Also see sections VIII.K and VIII.G of the 

preamble for further discussion of the flexibility states have in developing state plans to 

incentivize nuclear generation and ensure compliance, as well as, the requirement that states 

consider system reliability in plan submittal, and a discussion of a Reliability Safety Valve. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed general support for nuclear power as a contributor towards 

decarbonization. Commenters stated that the continued use of existing nuclear power plants, as 

well as the completion of those under construction, will provide significant quantities of zerocarbon generation, displacing fossil fuel generation and reducing emissions. Commenters also 

stated that nuclear power is a critical zero-carbon generation source that provides baseload 
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electricity. Commenters stated that nearly 115 GW of nuclear capacity in the U.S. avoids carbon 

emissions of around 245 million metric tons per year, so closing just one third of these nuclear 

plants would cause CO2 emissions to rise by 8 percent. 

Commenters stated that the impact of nuclear plant closures can have significant emission 

repercussions. For example, commenters noted that the San Onofre nuclear facility in California 

generated an average of 16,000 GWh per year of zero-carbon electricity, representing 8 percent 

of electricity generation in California. Last year, the facility's two generators were shut down, 

and the commenters stated it would require nearly 7,200 MW of zero-carbon generation to 

replace San Onofre. Commenters stated that, in the near term, the mix of resources covering for 

the plant is adding 6 million metric tons of carbon emissions per year. 

Commenters stated that the proposed Clean Power Plan recognizes the critical contribution that 

existing nuclear facilities make to lowering CO2 emissions from what they would otherwise be 

without this source of zero-emission generation. Commenters stated allowing states to take credit 

for keeping in place the 5.8 percent of the country's nuclear fleet that the Energy Information 

Agency (EIA) has deemed to be "at risk" made possible by also including 5.8 percent of a state's 

nuclear generation as part of that state's target, the Proposed Rule creates an important incentive 

for states to find ways to keep existing nuclear facilities operational. 

While commenters took no position on the particularities of the proposed approach, the 

commenters applauded the Clean Power Plan's inclusion of nuclear power as a significant factor 

in the decarbonization equation and to provide states an incentive to develop policies that allow 

facilities that otherwise might close to safely stay open as an emission prevention measure. 

Comment 14: Commenters asked the EPA to consider providing some limited compliance value 

for existing nuclear generating capacity as an incentive. 

Response 14: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for nuclear units in the setting of state 

goals, and allows incremental generation resulting from uprated power and new nuclear 

generation to count towards compliance. Please see section V.A of the preamble for further 

discussion of the decision to exclude nuclear generation from BSER and section VIII.K for 

consideration of nuclear units in state plans. 

The following are summaries of the specific public comments under this comment: 

Commenters proposed ways that the EPA could provide additional compliance value by altering 

the assumption of a 90 percent capacity factor for nuclear power plants. Commenters 

recommended that the EPA should consider ways to provide at least some limited compliance 

value for existing nuclear generating capacity, as an additional incentive to the states to preserve 

that capacity. Commenters noted that its calculations, EPA assumes a uniform 90 percent 

capacity factor for all nuclear power plants, existing and new. Commenters stated that, while the 

U.S. nuclear fleet, on average, has consistently achieved capacity factors in the 90 percent range 

for the last 15 years, the average lifetime capacity factor of the 100 nuclear plants now operating 
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is 81.6 percent through 2013. Given this, Commenters recommended that the EPA consider as an 

option allowing states to determine an appropriate baseline level of existing nuclear generation 

against which they could provide limited compliance value, such as: 

• Counting toward compliance MWh produced by any nuclear plant above an 81.6 

percent capacity factor; or 

• Allowing nuclear MWh above the lifetime capacity factor of a state's nuclear 

generating units to be counted toward compliance; or 

• Allowing a state to count toward compliance any nuclear MWh produced above 

the industry's three-year rolling average. Commenters noted that a single-year 

baseline may not be appropriate for nuclear power plants, which typically shut 

down only every 18-24 months for refueling and maintenance outages; if the 

baseline year happens to be a refueling outage year, it may understate a nuclear 

generating unit's long-term performance. For this reason, the commenters stated 

the industry typically uses three-year rolling averages when evaluating nuclear 

plant performance. 

Commenters concluded that creating ways for states to capture limited compliance value for 

existing nuclear generating units would directly serve and support EPA's principal objective---

ensuring continued operation of the nation's largest source of carbon-free generating capacity. 

Commenters believed that EPA must revise its proposal in order to value nuclear power 

appropriately, and to ensure that states have a sufficient incentive to preserve the existing nuclear 

fleet and to build the new nuclear energy capacity that will be required to achieve meaningful 

reductions in CO2 emissions. Commenters recognized that it is a challenge to recognize and 

incorporate existing nuclear generating capacity into the structure of the 111(d) rule as proposed. 

Commenters said nuclear power plants are unique and uniquely valuable among carbon-free 

sources of electricity because they typically produce very large quantities of carbon-free 

electricity compared to other carbon-free sources. For this reason, commenters said incorporating 

the output from operating nuclear power plants into any carbon control program based on 

emission rates would create potential compliance challenges. Commenters believed these issues 

warrant further consideration and discussion among EPA and stakeholders as EPA develops the 

final rule, and commenters looked forward to working with the Agency. 

Comment 15: Commenters stated that nuclear facilities are critical to the reliability of the 

electric grid. 

Response 15: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and under construction nuclear 

units in the setting of state goals. Please see sections VIII.K and VIII.G of the preamble for 

further discussion of the flexibility states have in developing state plans to incentivize nuclear 
558 

generation and ensure compliance, as well as, the requirement that states consider system 

reliability in plan submittal. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that nuclear power is the largest source of zero-carbon electricity and is vital 

to grid reliability. Commenters also stated that nuclear power produces about 20 percent of U.S. 

electricity, and according to the EIA, it made up more than 60 percent of zero-carbon electricity 

sources in 2013. Commenters stated that without nuclear power plants operating in 31 states, 

carbon emissions from the U.S. electric sector would be approximately 25 percent higher. 

Commenters stated that nuclear facilities are critical to the reliability of the electric grid because

they operate continuously and are available under a wide range of weather conditions. 

Commenters cited one example: the deep freeze brought on by the polar vortex in January 2014 

resulted in more than 35,000 megawatts of outages, and during this time nuclear units accounted 

for only three percent of forced outages despite making up 12 percent of total capacity that 

operated at 90 percent capacity through the polar vortex event. 

Commenters stated that the EPA has correctly acknowledged that nuclear facilities across the 

country are at risk of premature retirement. Commenters concluded that a key reason for this 

risk is the absence of a carbon policy that would value the carbon-free electricity that nuclear 

plants produce, thereby avoiding emissions from fossil-fired plants. 

Comment 16: Nuclear power is the largest zero-carbon electricity source and is vital to grid 

reliability. 

Response 16: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and under construction nuclear 

units in the setting of state goals. Please see sections VIII.K and VIII.G of the preamble for 

further discussion of the flexibility states have in developing state plans to incentivize nuclear 

generation and ensure compliance, as well as, the requirement that states consider system 

reliability in plan submittal. 

The following are summaries of the specific public comments under this comment:

Commenters stated that the proposed guidelines fail to recognize the role of nuclear in reducing 

CO2 emissions and to the reliability of the electric grid. Commenters stated that EPA's goals 

cannot be achieved without existing nuclear fleet, yet the proposed guidelines do not create real 

incentive to maintain existing nuclear plants. Commenters mentioned that the proposed 

guidelines greatly underestimate the quantity of nuclear generation that is actually at risk in some 

states, while overstating the amount at risk in other states. Commenters suggested EPA to 

remove the 6% at-risk factor from goal calculation based on its interpretation of BSER. 

Commenters also suggested EPA to consider EEI's comments regarding alternative approaches 

for incenting the continued operation of existing nuclear generation capacity. 

Commenters supported that nuclear energy, as America's largest source of low-carbon electricity, 

must be part of the solution for reducing carbon emissions. Commenters also suggested that the 
559 

final rule must give states flexibility to utilize existing and new nuclear units in an effective 

manner to comply with carbon emission reduction. 

Commenters mentioned that EPA did not include grid reliability measures that could reduce 

operating reserve requirements in the BSER, which would directly reduce CO2 emissions. 

Commenters also suggested that incorporation of storage technologies, such as super-capacitors, 

compressed air, and battery storage, all of which have rapid ramp time characteristics, could 

reduce the need for spinning reserves, improve fossil fuel efficiency, and reduce CO2 emissions. 

Commenters stated that nuclear energy is America's largest source of low-carbon electricity. 

Commenters stated that today, nuclear energy accounts for approximately 63 percent of 

America's carbon-free electricity - three times more carbon-free electricity than hydropower, 

nearly five times wind energy and about 85 times that contributed by solar generated electricity. 

Commenters stated that by 2040, U.S. nuclear generation could decline by over 40 percent as 

nuclear units reach the end of their operating licenses and are retired. Commenters stated that 

such a major reduction in low-carbon generation would make it exceedingly difficult to meeting 

the nation's climate goals. Commenters also stated that the CPP as proposed only marginally 

recognizes the importance of maintaining the existing nuclear generation capacity and fails to 

strongly encourage the expanded use of the nation's largest source of low-carbon electricity 

generation. 

Commenters stated that nuclear energy has numerous attributes including round-the-clock 

production of large amounts of electricity to help stabilize the electric grid; clean-air compliance; 

forward electricity price stability; fuel and technology diversity; and high-paying jobs at facilities

that can withstand extreme natural and man-made events. 

Commenters stated that the EPA fails to recognize the significance of all zero carbon emitting 

generation sources including existing nuclear and hydroelectric generation in the proposed rule, 

and as a result, many states that have historically invested in zero or low carbon emitting 

generation sources have to meet goals that are lower than those for states that have not made 

these investments. Commenters stated that South Carolina, the only U.S. state that generated the 

majority of the electricity used within its borders from nuclear power, has to meet the third 

largest percent reduction in CO2 emissions (51 percent). 

Commenters stated that the EPA plan should continue to have generation from existing nuclear 

as a component of the low emission building block as nuclear generation has essentially zero 

CO2 emissions. Commenters stated that nuclear generation also provides important fuel diversity 

and electric system reliability benefits and are an important part of the state's portfolio, in terms 

of maintaining lower overall CO2 intensity of the generation fleet. 

Comment 17: Commenters stated preservation of existing "at-risk" nuclear capacity is not a 

valid system of emission reduction. 

Response 17: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the proposed provisions for existing nuclear units in the setting of state 
560 

goals. Please see section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the preservation of existing "at-risk" nuclear capacity is not a valid 

system of emission reduction. Commenters stated EPA may not determine the stringency of state 

guidelines based on the application of beyond-the-unit systems of emission reduction, such as 

increased generation from nuclear generators and other non-stationary sources. Commenters said 

consequently, neither generation from under-construction nor generation from existing nuclear 

reactors may be used to determine the stringency of state goals; however, even assuming that 

EPA is not prohibited from basing the stringency of state guidelines on beyond-the-unit 

measures, EPA's proposal to include 'at-risk' nuclear generation in the state goal calculation 

would violate the plain language of section 111. 

Commenters continued stating as EPA admits in its rate-to-mass goal conversion technical 

support document, 'the continuing operation of existing resources under building block three (RE 

and at risk nuclear) is not assumed to affect historical generation levels.' Commenters said in 

other words, preserving existing nuclear capacity that was operating in 2012 does not enable 

existing EGUs that were operating in 2012 to reduce their emissions below the baseline; rather, 

at best, the preservation of existing nuclear capacity only allows existing EGUs to continue 

operating at the same levels as in the past. Commenters said therefore, 'preservation' or continued 

operation of existing nuclear reactors cannot be considered a 'system of emission reduction' for 

existing EGUs, as defined under the CAA; consequently, EPA's proposal to incorporate 

supposed emission reductions from preserving existing nuclear capacity into state emission 

guidelines violates the plain language of the Act and should be withdrawn. 

Commenters stated that the EPA's designation of "at risk" nuclear generation as a component of 

BSER exceeds the agency's authority under the CAA. Although the commenters disagreed with 

the EPA's approach to determining BSER, they stated that under EPA's reading of the statute, the 

addition of new nuclear generation could be thought of as a "system of emission reduction" 

because it could allow existing fossil-fueled EGUs to reduce their CO2 emissions relative to their 

historic emissions, but the preservation of existing nuclear capacity cannot even meet the EPA's 

strained definition of the term. Commenters stated that, as the EPA admits in its rate-to-mass 

guidance document, "the continuing operation of existing resources under building block three 

(RE and at risk nuclear) is not assumed to affect historical generation levels." In other words, the 

commenters stated, preserving existing nuclear capacity will not allow existing EGUs to reduce 

their emissions; the preservation of existing nuclear capacity will only allow existing EGUs to 

continue operating at the same levels as in the past. Commenters concluded that, under the plain 

language of section 111, the "preservation" of existing nuclear generation cannot be considered a 

"system of emission reduction." 

Commenters stated that the EPA's state goal setting methodology based on retaining at-risk 

nuclear capacity is flawed and inappropriate. Commenters stated that the EPA is double counting 

the benefits from retaining at-risk nuclear capacity, 1) by including 2012 nuclear generation to 

calculate states' 2012 baseline emission rates; and 2) the EPA reduces states' emission rate 

requirements based on the assumption of retaining 6% nuclear power that is currently considered 
561 

as at-risk. Commenters pointed out that retention of 6% of that power will not reduce the state's 

emission rate, but instead will just prevent the emission rate from increasing relative to 2012 

levels. 

Commenters stated that nuclear generation should not be included in the CPP rule. Commenters 

mentioned that EPA's consideration of at-risk and under-construction nuclear generation would 

result in dramatic reduction in the emission rate goals for states which threatens the completion 

of the nuclear reactors. Commenters also mentioned that including at-risk and under-construction 

nuclear generation also introduces unmanageable compliance risk, since for nuclear plants with 

operational issues, the state nor the owner have virtually no opportunity to comply. Commenters 

stated that inclusion of at risk or under-construction nuclear generation does not reduce CO2 

emissions. 

Commenters pointed out that the EPA's inclusion of at-risk nuclear component based on its 

conclusion that preserving nuclear will help reduce CO2 is not an emission reduction standard 

because it only avoids potential increases in emissions while failing to account for the inclusion 

of nuclear costs. Commenters mentioned that the EPA arbitrarily and capriciously favors wind 

and solar over nuclear by including at-risk nuclear component but no other types of zero-emitting 

sources. 

Commenters stated that, due to cost-effectiveness considerations, preservation of at-risk nuclear 

capacity should be disqualified as a component of the BSER. Commenters suggested that the 

EPA should provide a more accurate analysis to assist states in evaluating the economic 

feasibility of subsidizing uncompetitive reactors. Commenters suggested that if states were to 

extend subsidies to reactors other than those truly at risk of closure, they would be providing 

subsidies to reactors that don't need them. 

Commenters stated that the nuclear generation deemed to be at-risk is within the range of the 

wind capacity being developed in U.S. within 1-2 years, and at much lower cost than the 

construction of new nuclear units. Therefore, the commenters suggested to replace the at-risk 

nuclear generation within the compliance period or before it begins through increased 

deployment of sustainable resources. 

Commenters stated that the Clean Power Plan's treatment of nuclear generation is not wellfounded technically or economically, and the EPA's rationales for the treatment are weak and 

inconsistent. Commenters disagreed with the EPA's 6% at-risk assumption because the value is 

zero for the states that have no nuclear generation. Also, the commenters asserted that existing 

units do not increase available nuclear capacity, since keeping them open just maintains existing 

generation, while on the other hand, if units are retired, that decreases the available nuclear 

capacity. 

Commenters stated that the CPP's inclusion and exclusion of 2012 non-fossil fuel generation 

sources has nothing to do with actual emission reductions, and EPA's rationales for its treatment 

of these sources are weak and inconsistent. Commenters stated that the EPA includes about 6 

percent of the existing nuclear generation in 2012 in each state to calculate the 2030 target rate of 

CO2 emissions; for the states that have no nuclear generation, this value is zero. Commenters 

stated that they do not agree with the EPA's logic for the simple reason that existing units do not 
562 

increase the amount of available nuclear capacity; keeping them open just maintains existing 

generation and if units are retired, available nuclear capacity decreases. 

Commenters stated that based on the description in the Goal Computation Technical Support 

Document, EPA is double counting the benefits from retaining at-risk nuclear capacity; 

accordingly, reducing a state's goal based on retaining at risk nuclear capacity is not appropriate. 

Commenters stated that the at-risk nuclear component is not an emission reduction standard 

because it only avoids potential increases in emissions. Commenters stated that it also fails to 

account for the inclusion of nuclear costs in the current rate base in South Carolina. Commenters 

stated that by including at risk nuclear, but not other types of non-emitting sources, the EPA 

arbitrarily and capriciously favors wind and solar over nuclear, despite the fact that nuclear is 

base-load and does not require back-up generation. 

 

Comment 18: Commenters said the EPA should allow states to adjust their state-wide emissions 

goals to reflect the next best resource option that the state is able to develop to replace any 

nuclear plant that may close. 

Response 18: 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. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA must permit states to adjust their state-wide emission goals to 

reflect the next best option that the state is able to develop to replace any nuclear plant that may 

close. Commenters stated in those States that are heavily dependent on nuclear generation to 

comply with the existing power plant rule, there is an inherent risk that these units will fail to 

produce electricity. Commenters said in that event, there will be no way for those States to 

comply with the proposal's emission rate targets without the construction of back-up zeroemission technology. Commenters said many States will and can use gas-generated electricity in 

combined cycle combustion turbines as a failsafe method to guarantee compliance with state 

goals well into the future; however, those States that are heavily dependent on zero-emission 

generation such as nuclear generation and additionally have federally mandated state emission 

goals below the known emission level of combined-cycle combustion turbines must have backup generation of additional zero-emission technology to ensure meeting both FERC n+1 

standards of redundancy and the proposed EPA rule. Commenters said if under-construction and 

at-risk nuclear units are considered in the proposed state emission limits, these States may be 

forced to have available back-up zero-emission technology that may be both high cost and nondispatchable. 

Commenters stated this is clearly not a feasible approach; not only would it cost consumers an 

unconscionable sum to invest in gigawatts of unneeded renewable capacity simply to provide 

back-up in case they should lose a nuclear resource, but no realistic amount of intermittent 

renewable resource could provide the same consistent and reliable energy as a nuclear generator. 

Commenters said moreover, that very investment would ensure that the nuclear generators would 

close, as that investment in renewable resources would flood the energy and capacity markets, 
563 

driving prices down to the level that nuclear plant operators could never recover enough money 

to justify keeping the power plants open. 

Commenters stated states simply cannot control whether nuclear plants shut down and cannot 

contract in advance to fully insulate themselves from the environmental impacts of such shut 

downs; that is why EPA must permit States to adjust their state-wide emissions goals to reflect 

the next best resource option that the State is able to develop to replace any nuclear plant that 

may close. 

Commenters stated that, if the EPA retains the at-risk provision in the goal-setting calculation, 

the EPA should allow state goals to be adjusted upon the expiration of nuclear plant operating 

licenses to remove the at-risk nuclear generation from the denominator of the goal-setting 

calculation. Commenters stated that any other result would penalize a state that currently has 

nuclear generation over a state that has no nuclear generation. 

Commenters stated that there was not sufficient natural gas infrastructure in Wisconsin to replace 

lost nuclear generation due to license expiration after 2030, so the EPA should allow states to 

offset lost nuclear generation with existing capacity, including existing coal-fired plants. 

Commenters stated that the EPA should allow state goals to be recalculated when nuclear power 

plants reach the end of their planned lifetime, excluding this building block from the new 

calculation and allowing some portion of fossil generation to replace the retiring nuclear. 

Commenters stated that even if a nuclear unit is prevented from shutting down prematurely, it 

will still be required to shut down upon expiration of its operating license, and the state in which 

the unit is located will have to add additional carbon-free generation or implement other 

emission reduction measures in order to maintain emissions relative to the state's goal. 

Commenters recommended that: if the at-risk nuclear provision is retained in the final goalsetting calculation, the EPA should allow states' goals to be adjusted upon expiration of nuclear 

plant operating licenses; and, to encourage the continued operation of existing nuclear plants, 

EPA should allow states to claim compliance credit for nuclear plants that have their licenses 

renewed beyond 60 years. 

Comment 19: Commenters asserted the definition of new nuclear should be expanded. 

Response 19: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the provisions we had proposed for nuclear units in the setting of state goals, 

and will allow incremental generation from new and uprated nuclear units to be applied towards 

compliance. Please see section V.A of the preamble for further discussion of the decision to 

exclude nuclear generation from BSER. Please see section V.A of the preamble for further 

discussion of the treatment of new and uprated nuclear plants, and section VIII.K of the 

preamble for further discussion of provisions in state plans of allowable actions that result in an 

adjusted CO2 emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 
564 

Commenters stated that the definition of new nuclear should be expanded to include all plants 

now under construction or constructed in the future, power uprates at existing plants, and plants 

relicensed to operate beyond 40 years. Commenters stated as EPA proposes, the final guidelines 

should allow states to include generation from 'new' nuclear generating capacity in state 

compliance plans. Commenters said however, the final guidelines should include an expanded 

definition of 'new' nuclear that would encompass: 

• New nuclear power plants (those currently under construction or others that might 

be built between now and 2030 and beyond); and 

• Power uprates at existing nuclear plants, including those undertaken during or 

after 2012 or a modified baseline period; and 

• Nuclear plants relicensed to operate past their initial license terms (i.e., beyond 40 

years) that have not received their renewed licenses from NRC before the baseline 

year or period, and nuclear plants relicensed to operate beyond 60 years 

(subsequent license renewal). 

Commenters stated the proposed guidelines should also recognize major capital investments 

undertaken between 2012 and 2020 to uprate nuclear units; these uprates provide additional zero 

emission generation and should be treated similar to renewable generation built during the same 

timeframe by allowing states to include this additional generation in its state plan to meet the 

final goals. 

Commenters stated according to NRC, utilities have used power uprates since the 1970s as a way 

to generate more electricity from their nuclear plants, and as of April 2014, NRC had approved 

154 uprates that added generation capacity equivalent to about seven new reactors. Commenters 

said undertaking a power uprate is a complex and time consuming process. Commenters said 

some uprates may involve major plant modifications, such as the replacement of the main 

turbines, or the modification or replacement of various components in order to accommodate a 

higher power level. Commenters said the licensee must then submit a license amendment request 

for the uprate to NRC. Commenters said NRC's technical and legal staffs review these complex 

technical analyses before approving an uprate request. See id. Commenters said the final 

guidelines should allow states to include any such uprates in their compliance plans. 

Comment 20: Commenters stated the EPA should credit nuclear generation for the lifetime of 

operation. 

Response 20: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. Please see section V.A of the preamble for further discussion of 

the treatment of new and uprated nuclear plants, and section VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2 

emission rate of an affected EGU. 
565 

The following are summaries of the specific public comments under this comment: 

Commenters suggested that the EPA provide full credit for nuclear generation that has its 

licensing renewed to an overall 80-year facility life. 

Commenters stated that extension of a nuclear power plant's lifetime or operation at greater than 

assumed capacity should count as a credit towards at a state's goal. 

Comment 21: Commenters suggested that new nuclear not be included in the BSER. 

Response 21: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comment under this comment: 

Commenters stated that future new nuclear should not be included in the BSER determination 

and goal-setting calculation. Commenters stated EPA was correct in not including future new 

nuclear in the BSER determination and goal setting calculation, but solicits comments on 

whether these hypothetical future nuclear units should be included. Commenters said excluding 

future new nuclear units is appropriate. Commenters said predictions about new nuclear units 

involve substantial uncertainty; historical projections of future nuclear construction in the US 

have proven to be inaccurate, with many fewer units currently under construction than what was 

projected only five years ago. Commenters said building new nuclear plants requires financial 

and organizational capacity that realistically is limited to larger utilities. Commenters said adding 

to this uncertainty is the opposition of advocacy groups to nuclear generation; many of the same 

advocacy groups that are supporting EPA's Clean Power Plan in this rulemaking forum actively 

oppose nuclear generation in the permitting and licensing forum. 

Comment 22: Commenters asserted that future new nuclear, as well as nuclear under 

construction, should not be included in the BSER determination and goal-setting calculation. 

Response 22: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters supported the EPA's proposal to allow both new nuclear units and uprating of 

existing units to be counted towards state compliance. Commenters recommended an end of base 

year be used for the purpose of recognizing additional nuclear capacity and uprating of existing 

nuclear units. Commenters opposed the EPA's inclusion of any amount of additional nuclear 
566 

capacity in the state goals, because it is not possible today to make any determination regarding 

what additional nuclear capacity might be brought on line in the future, putting aside the fact that 

the EPA is not authorized by the CAA to use any nuclear generation in its BSER determination 

for fossil fuel-fired EGUs. Commenters pointed out that doing so inappropriately penalizes states 

where new nuclear is being considered, and would cripple the state's ability to meet its goal. 

Commenters stated that a third nuclear generation unit at North Anna Power Station in Virginia 

was being studied, but that given enormous costs and hurdles to constructing and operating 

nuclear units under today's regulatory and economic conditions, it is far too early to factor such a 

prospect into Virginia's 111 (d) plan. Commenters also stated that the time horizon for 

completion and operation of such a unit may extend past the 2030 date for compliance with 

EPA's final performance goal. 

Comment 23: Commenters stated nuclear energy should be excluded from state goal 

calculations, but remain an option for states to consider in developing their state plans to meet 

the proposed goals. 

Response 23: 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, and 

allows incremental generation resulting from uprated power and new nuclear generation to count 

towards compliance. Please see section V.A of the preamble for further discussion of the 

decision to exclude nuclear generation from BSER. Please see section V.A of the preamble for 

further discussion of the treatment of new and uprated nuclear plants, and section VIII.K of the 

preamble for further discussion of provisions in state plans of allowable actions that result in an 

adjusted CO2 emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 

Commenters stated nuclear energy should be excluded from the state goal calculations, but 

should remain an option for states to consider in developing their state plans to meet the 

proposed goals. Commenters said consideration of at-risk and new nuclear generation 

unnecessarily introduces uncertainty into the goal setting methodology and compliance planning 

due to concerns regarding the short- and long-term viability of EPA's assumptions regarding the 

continued operation of the existing nuclear fleet and with respect to if/when the under 

construction nuclear capacity actually is commissioned. Commenters said the implementation 

section identifies additional concerns for developing compliance requirements for nuclear 

capacity within state plans that further warrant excluding nuclear energy from the goal 

calculation. 

Commenters supported allowing nuclear generation to count towards compliance while not 

including nuclear in the target setting process. Specifically, the commenters stated that the EPA 

should allow MWhrs in excess of an 81% capacity factor (the historical capacity factor of the 

existing nuclear fleet) to count toward compliance in the rate-based approach. Commenters also 

mentioned that output of plants that are relicensed after the 2012 baseline year or to operate in 

excess of 60 years should count towards compliance. 
567 

Commenters stated that, in the first full compliance year of 2030, the youngest nuclear plants in 

the current fleet will be 50 years old, and any effort to extend the lives of these units could not 

persist for more than a few decades. Commenters recommended that the EPA should therefore 

remove existing nuclear units from the equation altogether. Commenters also recommended that 

any new nuclear (units that have not commenced operation prior to the proposal date) should be 

counted as zero-emitting sources in the compliance calculus. 

Commenters stated that the EPA's proposed treatment of existing nuclear capacity, including the 

6% at-risk factor and the estimated the 90% average utilization rate for U.S. nuclear units, is 

inappropriate. Commenters stated that EPA should not include any amount of existing nuclear 

generating capacity in the state goal setting computation. 

Commenters stated that nuclear generation should be eligible as a compliance option since it has 

essentially zero CO2 emissions; and the commenters suggested that the EPA's plan should 

continue to have existing nuclear generation as a component of the low emission building block. 

Commenters supported that nuclear generation should be included in state goal-setting 

computation. Commenters stated that for new construction consideration should be given to the 

newest and safest technologies, such as MIT/Transatomic's molten salt reactor, which produces 

energy at half the cost per megawatt than their standard reactors, at least on paper. 

Commenters stated that the draft rule could interfere with the EPA's ability to structure statelevel implementation toward cost-effective and environmentally sound practices because the 

rule's evaluations of different resources are inconsistent and inaccurate. Commenters supported 

the flexibility of implementation set forth in the draft rule, but stated that the unequal treatment 

granted to nuclear compared to other energy sources, and the EPA's failure to fully consider the 

environmental impacts of the energy source, goes beyond providing the flexibility necessary to 

ensure effective implementation of the rule and achievement of its goals. Commenters pointed 

out that by encouraging states to view nuclear as an acceptable clean energy resource, preserve 

existing capacity and complete capacity in construction, without accurately assessing its costs 

nor properly evaluating its environmental impacts and risks, the draft rule creates opportunities 

for states to implement it in manners that could be counterproductive. 

Commenters supported the EPA's proposal that generation from new and uprated nuclear plants 

count towards compliance with state goals. 

Commenters expressed concerns with the treatment of nuclear energy in Building Block 3, as it 

establishes a disincentive to nuclear development and appears inconsistent with the approach 

used with other energy generating sources. Commenters stated that the under-construction 

nuclear units should be available to states for goal calculation toward compliance rather than 

categorized as existing capacity. Commenters stated that the EPA's rationale for inclusion of 

these under-construction facilities in goal setting, "the decisions to construct these units were 

made prior to this proposal", is arbitrary in a proposed rule whose timelines for establishing and 

reaching goals are tentative and debatable. Commenters mentioned that a stronger incentive for 

nuclear investment would be signaled by allowing the applicable states to apply, upon start up, 

the zero-emissions energy toward Building Block 3 goals. Commenters suggested this principle 

be further applied to any nuclear unit whose construction or uprating will be started prior to the 
568 

2030 compliance deadline, albeit with the obligation on the state to ensure compliance whether 

or not such new units come online as scheduled. Commenters also suggested the EPA to 

additionally consider encouraging states to establish policies analogous to existing renewable 

energy portfolio standards to support the development of new nuclear generating units. 

Commenters recommended that nuclear generation should be granted some measure of policy 

parity, and must be more explicitly encouraged as part of a reliable emission reduction strategy. 

Commenters stated that the EPA should exclude existing nuclear from the goal-setting 

calculation, but allow states to take credit for a portion of their nuclear generation for compliance 

purposes. Commenters also stated that the EPA should recognize early action taken to increase 

nuclear plant output, such as the 2011 extended power uprate at Point Beach. Finally, 

commenters recommended that, regarding the inclusion of estimated new nuclear in the goal 

setting computation, only units that were in service at the end of the goal setting baseline years 

should be included, and that a multi-year period is desirable for setting state goals. Commenters 

stated that if the EPA uses the single (and due to abnormally low natural gas prices, 

unrepresentative) year of 2012 to set state goals, then the state goals should include only units 

that were in service as of the end of the 2012, and should exclude any units that were not in 

service as of the end of 2012. 

Commenters stated that the Proposed Regulation illogically penalizes Virginia for its nuclear 

fleet by including "at risk" nuclear production in the denominator. Commenters recommended 

that continued use of existing (in addition to new) nuclear generation capacity, which provide 

reliable base load generation that is carbon-free, should be allowed to count for compliance with 

the Proposed Regulation. 

Commenters stated that EPA fails to demonstrate that its projected increases in renewable energy 

are truly feasible. Commenters stated that many states have adopted renewable energy standards 

that contain rate caps to control the cost of such programs; the CPP ignores the decisions made 

by the states to balance renewable energy objectives against consumer cost considerations. 

Commenters stated that EPA also incorrectly includes 6 percent of at risk nuclear in the target 

setting process in an effort to incent states to keep at risk nuclear units in operation. Commenters 

recommended that EPA eliminate nuclear MWhrs from the target setting process because this 

approach does not properly incent the desired outcome and creates unnecessary compliance risk. 

Commenters stated that while it is inappropriate to include nuclear in the target setting process, it 

is appropriate to allow nuclear generation to count towards compliance. Commenters stated that 

to incent optimal performance of this zero-emitting resource, EPA should allow MWhrs in 

excess of an 81 percent capacity factor to count toward compliance in the rate-based approach. 

Commenters stated 81 percent represents the historical capacity factor of the existing nuclear 

fleet and operation above that level should be incented to help reduce emissions from fossil-fired 

plants. Commenters stated that output of plants that are relicensed after the baseline year (2012) 

should count towards compliance, as well the output of plants licensed to operate in excess of 60 

years. 

Commenters stated that the proposed regulation does not recognize the significant investment in 

the nuclear fleet or the substantial resulting zero-carbon energy production in Virginia that has 

historically lowered Virginia's carbon footprint. Commenters stated the proposed regulation 

illogically penalizes Virginia for its nuclear fleet by including at risk nuclear production in the 
569 

denominator of its formula and basing the Mandatory Goals on 2012 generation levels. 

Commenters stated that including an at risk nuclear component in the formula for Virginia - 

along with other unlawful components of the formula - has the effect of driving the proposed 

regulation's emission rates for Virginia unreasonably and unlawfully low. Commenters stated 

that including higher than normal zero-carbon energy production in EPA's formula drives down 

the emission rates that Virginia and other states must achieve; this is because the Mandatory 

Goals are calculated by adjusting a basic ratio of carbon emissions/megawatt hours of 

production. Commenters stated that adding into this formula production from resources that have 

no carbon emissions only increases the denominator of the ratio, and has no effect on the 

numerator; so each megawatt hour of zero-carbon production added by EPA for at risk nuclear 

and renewable resources, as well as the energy efficiency added in by EPA, lowers the 

Mandatory Goals and requires deeper carbon emission reductions. Commenters stated that 

penalizing Virginia for its zero-carbon generation in this way is flatly inconsistent with the 

proposed regulation's purported goal of reducing carbon emissions (much less doing so without 

compromising reliability or reasonable costs). Commenters stated that continued use of existing 

(in addition to new) nuclear generation capacity, which provide reliable base load generation that 

is carbon-free, should be allowed to count for compliance with the proposed regulation. 

Comment 24: Commenters stated the proposal does not provide enough information regarding 

regulatory authority, enforcement responsibility and compliance demonstrations requirements for 

state plans with regard to nuclear units. 

Response 24: EPA acknowledges the comments and has provided all the necessary provisions 

for requirements in state plan in section VIII of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the consideration of nuclear units in the implementation plan raises 

issues regarding regulatory authority, enforcement responsibility, and compliance 

demonstrations if the EPA intends the capacity factor assumptions used in calculating state goals 

to become an enforceable requirement in order to claim a 'credit' in the state's compliance 

demonstration. Commenters stated that these issues are inadequately addressed in the proposal. 

Comment 25: Commenters stated that credit should be given toward environmental compliance. 

Response 25: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. Please see section V.A of the preamble for further discussion of 

the treatment of new and uprated nuclear plants, and section VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2 

emission rate of an affected EGU. 
570 

The following are summaries of the specific public comments under this comment: 

Commenters noted that nuclear units built in the 1970s and 1980s will require ongoing 

investment to maintain power production into the middle of the century. Commenters stated that 

if credit is not given toward environmental compliance, one of the benefits of a potential large 

carbon-free investment is removed. Commenters recommended that rules should encourage 

investments into zero-emission, carbon-free resources. 

Comment 26: Commenters asserted that the EPA has underestimated of the quantity of nuclear 

generation at risk of premature retirement. 

Response 26: 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 sections VIII.K and VIII.G of the preamble for further discussion of the 

flexibility states have in developing state plans to incentivize nuclear generation and ensure 

compliance, as well as, the requirement that states consider system reliability in plan submittal. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that nuclear facilities are the largest and most reliable source of carbon free 

electricity, but nuclear facilities are a risk of premature retirement. Commenters also stated that 

the proxy used by EPA to estimate the quantity of nuclear generation that is at risk of premature 

retirement is a significant underestimate. 

Commenters stated that nuclear plants generate large amounts of clean energy and play vital role 

in grid reliability, but nuclear facilities across the country are at risk for premature retirement - 

the commenters stated that Terry Boston, President and Chief Executive Officer of PJM, 

described this prospect as "unthinkable." Commenters noted that approximately half of the 

nation's existing nuclear units are merchant generators in states with competitive electricity 

markets, in which wholesale prices are set by generators' bids. Commenters stated that nuclear 

plants have largely fixed costs and cannot vary their output in response to market signals; nor can 

they even affect the market price for generation - because nuclear facilities must run all of the 

time, they must accept the lowest market-clearing price offered by other generators. Commenters 

stated that unless wholesale electricity prices (and capacity prices in RTOs that have capacity 

markets) are high enough to allow the nuclear plants to cover their costs, they will retire. 

Commenters also stated that nuclear units' market-based revenues have recently been insufficient 

for a number of reasons, threatening the economic viability of a significant fraction of the 

nation's nuclear fleet. Commenters noted that the EPA recognized this threat in the Proposed 

Rule, stating that "a host of factors - increasing fixed operation and maintenance costs, relatively 

low wholesale electricity prices, and additional capital investment associated with ensuring plant 

security and emergency preparedness - have altered the outlook for the U.S. nuclear fleet in 

recent years." Commenters specifically noted, as the EPA also noted, that lower natural gas 

prices have reduced wholesale electricity prices and thereby made it more difficult for nuclear 

plant owners to recover their fixed costs or to make new capital investments, such as those 
571 

needed to meet new safety requirements adopted after the 2011 accident at Fukushima Daiichi 

Nuclear Plant in Japan. 

Commenters stated that the economic pressure on nuclear units has been exacerbated by 

subsidized wind power, which has placed further downward pressure on wholesale electricity 

prices. Commenters stated that subsidies allow wind generators to remain profitable even when 

they pay to put their electricity onto the grid; these units can therefore bid a negative price into 

the electricity markets yet still make money. Commenters noted that, on breezy nights, the 

market-clearing price of electricity has become negative in locations where there is insufficient 

transmission to relieve the local area of excess electricity production. Commenters stated that 

nuclear plants in those areas cannot cycle down their output during such times, and therefore 

have no choice but to run and incur substantial losses during those hours; thus, subsidies to 

encourage wind end up displacing nuclear generation, to no carbon benefit. Commenters 

concluded that, in other words, policies intended to support renewable resources that are carbonfree have had unintended and deleterious consequences for nuclear power, by far the largest 

carbon-free resource. 

Commenters stated that in part because of these factors, the U.S. has recently lost two viable 

nuclear plants: the Kewaunee power station in Wisconsin, and the Vermont Yankee nuclear unit 

in Vermont, which is set to close at the end of 2014. Commenters observed that when Dominion 

announced in October 2012 that it would be closing the Kewaunee plant, it stated that the 

decision was "based purely on economics." Likewise, Commenters noted, Entergy's August 2013 

announcement regarding the closure of Vermont Yankee cited "sustained low power prices, high 

cost structure and wholesale electricity market design flaws" that result in "artificially low 

energy and capacity prices" that "do not provide adequate compensation to merchant nuclear 

plants for the fuel diversity benefits they provide." 

Commenters noted Exelon is currently evaluating the continued economic viability of four 

nuclear stations - Byron, Quad Cities, and Clinton in Illinois; and Ginna in New York. 

Commenters noted Byron and Quad Cities are located in the PJM region, but were not selected 

in the last PJM capacity auction, and Clinton is located in the Midcontinent ISO ("MISO"), 

which has no forward capacity market. With respect to Ginna, the commenters stated that Exelon 

has certified to the New York Public Service Commission that it expects that revenues from the 

sale of energy and capacity in the New York ISO will not be sufficient to cover the costs of 

continued operation. Commenters stated that if any of these stations were to retire, it would be 

for purely economic reasons, because the current operating licenses for these plants do not expire 

until 2024 for Byron at the earliest, and as late as 2032 for Quad Cities. Commenters noted that 

collectively, these plants generate 48,295 gigawatt-hours ("GWh") and avoid 30.7 million metric 

tons of CO2 emissions annually. 

Commenters noted Exelon had previously announced the retirement of Oyster Creek in New 

Jersey, effective in 2019. Commenters stated that Exelon made that decision for economic 

reasons as well - the plant's operating license does not expire until 2029, but wholesale electricity 

prices did not support the construction of new cooling towers that the State of New Jersey 

required for Clean Water Act compliance. Commenters noted that as a result, New Jersey will 

lose 5,102 GWh of carbon-free generation - eight percent of the state's total annual electricity 

generation. 
572 

Commenters noted that the EPA relied on national projections from the Energy Information 

Administration ("EIA"), and estimated that six percent of the nation's nuclear capacity is at risk 

of premature retirement. However, the commenters stated that Exelon has used industry analyst 

data and its own modeling to examine the economics of the nation's 27 nuclear plants operating 

in competitive markets. Commenters provided a chart that indicated Exelon has determined that 

no fewer than 13 of the 27 nuclear plants in competitive markets are expected to have revenue 

shortfalls in 2015. Therefore, the commenters concluded that all of these plants are thus at risk of 

retirement. Commenters further stated that if revenues continue to fall due to low gas prices or an 

expansion of subsidized wind generation, an even greater number of nuclear plants may be 

endangered. 

Commenters stated that the Proposed Rule has a potential, paradoxically, to increase the 

financial pressure on existing nuclear plants. Commenters noted that currently, NGCCs have 

higher variable costs than coal units, nuclear units, or renewables. Therefore, the commenters 

stated, electricity prices tend to reflect the marginal costs faced by NGCCs, whose bids in 

competitive markets set the price paid to all generators. Commenters noted that the Proposed 

Rule envisions that states will achieve EPA's emissions goals partly by shifting dispatch from 

existing coal plants to NGCCs. Commenters noted that a rate-based state that does not adopt 

Smart System Dispatch could seek to encourage this sort of redispatch by artificially increasing 

the marginal cost of higher-emitting generators (like coal plants) while reducing the marginal 

cost of lower-emitting generators (like NGCCs). For instance, the commenters noted that the 

rate-based state might adopt an emissions credit or rate-trading program that taxes higheremitting fossil fuel plants and subsidizes lower-emitting fossil fuel plants. As a result of such a 

subsidy, the commenters stated, an NGCC would be able to sell electricity for less than its true 

marginal cost, similar to subsidized wind today. Commenters stated that such a subsidy could 

have the effect of lowering the market price of electricity for all generators - further undercutting 

the economic viability of existing nuclear plants in the near term and muting the market signals 

to invest in clean generation. However, the commenters stated that in the long run, the premature 

retirement of nuclear plants will result in increased electricity prices, as nuclear plants are 

replaced with higher-cost generation, such as NGCCs. 

Commenters stated that preventing early retirement of existing nuclear generation is essential in 

reducing carbon emissions from the power sector. Commenters strongly supported the EPA's 

inclusion of nuclear power as part of the BSER set forth in the Proposed Rule. Commenters 

stated that the EPA was correct when it recognized, "[n]uclear generating capacity facilitates 

CO2 emission reductions at fossil fuel-fired EGUs by providing carbon-free generation that can 

replace generation at those EGUs." Commenters also strongly supported the EPA's recognition 

that one "way to increase the amount of available nuclear capacity is to preserve existing nuclear 

EGUs that might otherwise be retired." 

Commenters stated that maintaining the existing nuclear fleet is in fact an essential precondition 

to reducing carbon emissions from the power generation sector. Commenters stated that FERC 

Commissioners, state public service and environmental commissioners, scientists, and others 

have all called upon environmental and energy policymakers to develop solutions to preserve 

nuclear energy's unique role among the nation's clean energy resources. Commenters noted that 

former FERC Commissioner John Norris similarly observed that "[w]e need to maintain our 

nuclear fleet, as it is a valuable base load and carbon free resource." 
573 

Commenters noted that in November 2013, four of the world's most respected climate and 

energy scientists - Dr. Ken Caldeira of Carnegie Mellon, Dr. Kerry Emanuel of MIT, Dr. James 

Hansen of Columbia University, and Dr. Tom Wigley of the National Center of Atmospheric 

Research - acknowledged the critical importance of nuclear energy to addressing climate change. 

Commenters noted that the scientists released a letter calling on world leaders to support nuclear 

energy, concluding that "in the real world there is no credible path to climate stabilization that 

does not include a substantial role for nuclear power." Commenters also noted that the Center for 

Climate and Energy Solutions released a study identifying the challenges facing nuclear units 

and noting that retirements of nuclear units will have serious climate change implications. 

Finally, the commenters noted that the National Association of Regulatory Utility 

Commissioners ("NARUC") passed a resolution recognizing that "[n]uclear energy has played a 

substantial role in the achievement of existing [greenhouse gas] State or regional emissions 

reduction goals to date, and continued operation of nuclear power plants is vital to States' ability 

to economically meet new federal regulation, and provides an essential tool to manage risks 

associated with potential [greenhouse gas] emissions reduction requirements." Commenters 

stated that NARUC urged EPA to adopt rules encouraging states to "preserve, life-extend, and 

expand existing nuclear generation." 

Commenters stated that the premature retirement of a nuclear facility leaves an enormous hole to 

be filled: each nuclear facility dependably generates so much electricity that, with current 

technology, it simply cannot feasibly be replaced by alternative zero-emissions generation 

resources with much lower capacity factors, such as wind or solar. For example, the commenters 

noted that to produce the same 1,000 megawatts of electricity generated by a single nuclear unit, 

a solar farm operating at a 26 percent capacity factor would need to be spread across 30 square 

miles, more than the size of Manhattan, and a wind farm operating at 30 percent capacity would 

need to be spread across 300 to 400 square miles. Commenters stated that, although California is 

the nation's leader in renewable generation production, the closure of the San Onofre nuclear 

plant in early 2012 resulted in the loss of more zero-emissions electricity than the combined 

production of all wind, solar, and biomass in the state. Commenters concluded that the loss of a 

just a single nuclear plant can have a devastating impact on a state's ability to reduce CO2 

emissions. 

Commenters stated that, even if it were feasible to replace a nuclear plant with an equal number 

of megawatts of wind or solar power, there would still be an adverse impact on the grid's 

reliability unless carbon-emitting plants (NGCCs or simple-cycle combustion turbines ("CTs")) 

are added to "firm up" the renewable generation sources, that is, to back them up to ensure 

electricity can be generated at night and in all weather conditions. Commenters noted that, 

according to EIA data, so far in 2014, nuclear facilities have had a capacity factor of 

approximately 90 percent; by comparison, wind facilities have a capacity factor of approximately 

30 percent, and utility-scale photovoltaic solar generation had a capacity factor of 33 percent. 

Thus, the commenters stated that wind and solar power cannot come close to replicating nuclear 

power's ability to generate electricity 24 hours per day, independent of weather conditions. 

Commenters stated that, because of a nuclear facility's large size and unparalleled reliability, a 

retiring nuclear plant is most likely to be replaced by natural gas-fired plants; new NGCCs have 

the lowest entry costs to provide baseload power. Commenters noted that NGCCs obviously emit 

carbon, so replacement of nuclear plants with NGCCs increases carbon emissions. Commenters 
574 

stated, for example, California's annual CO2 emissions increased by 35 percent after the San 

Onofre nuclear reactors were shut down in early 2012. Similarly, the commenters noted that 

when the Kewaunee nuclear plant in Wisconsin closed in 2013, the fossil fuel generation that 

took its place emitted an additional 3.6 million metric tons of carbon dioxide annually. 

Commenters stated that the dramatic increase in greenhouse gas emissions that occurred in Japan 

following the closure of reactors in response to the 2011 Fukushima Daiichi accident further 

demonstrates the critical importance of nuclear reactors to reduction of greenhouse gas 

emissions. Commenters noted that the CO2 intensity of the power sector in Japan in 2012 was 39 

percent higher as compared to when the country's reactors were operating. Commenters stated 

that CO2 emissions from electricity generation increased 29 percent to 486 million metric tons of 

CO2 in 2012 from 377 million metric tons in 2010. 

Commenters concluded that these examples demonstrate that every premature nuclear retirement 

moves the nation in the wrong direction when it comes to CO2 emissions. Commenters noted, as 

the Proposed Rule recognizes, retaining even the small portion of existing nuclear capacity that 

EPA deems at risk of premature retirement "could support avoiding 200 to 300 million metric 

tons of CO2 over an initial compliance phase-in period of ten years." Commenters stated that 

preventing premature nuclear retirements is essential to prevent CO2 emissions increases, let 

alone to achieve emissions reductions. 

Commenters also stated that preventing the early retirement of nuclear facilities does not just 

avoid carbon dioxide emissions: as EPA has recognized, it is one of the most cost-effective ways 

to do so. Commenters stated that EPA determined in the Proposed Rule that, "based on available 

information regarding the cost and performance of the nuclear fleet, preserving the operation of 

at-risk nuclear capacity would likely be capable of achieving CO2 reductions from affected 

EGUs at a reasonable cost." Specifically, the commenters stated that the EPA estimated that the 

cost of keeping "at risk" nuclear plants operating is approximately $12 to $17 per metric ton of 

CO2 avoided - which is more cost-effective than virtually any other carbon abatement strategy. 

Commenters stated that the EPA estimated that preventing the early retirement of "at risk" 

nuclear plants is more cost-effective than: 

• Adding renewable capacity ($10 to $40 per metric ton of CO2 abated). 

• Increasing natural gas combined cycle power plant utilization rates to 70 percent 

state by state ($33 per metric ton of CO2 abated). 

• Implementing demand-side management programs ($16 to $24 per metric ton of 

CO2 abated). 

Commenters noted, according to EPA's estimates, only improving the heat rate of coal plants 

would be more cost-effective than preventing the premature retirement of nuclear facilities. 

Commenters stated that while these heat-rate improvements are important, they alone cannot 

achieve the total carbon emission reductions necessary. Indeed, the commenters stated that if 

implemented alone, heat-rate improvements could result in increased carbon dioxide emissions 

due to a "rebound" effect resulting from lower marginal costs for coal-fired plants that would 

result in those plants being dispatched more frequently. Moreover, the commenters stated, the 
575 

premature retirement of the existing nuclear fleet would also dramatically increase the cost of 

EPA's proposal in the long run. 

Comment 27: Commenters stated that nuclear power does not reflect the BSER. 

Response 27: 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 section V.A of the preamble for further discussion of the decision to exclude nuclear 

generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA should not accept nuclear generation as an emission reduction 

measure for purposes of compliance with a BSER standard because: a) Nuclear energy is 

extremely water-intensive; b) Nuclear energy produces highly radioactive, long-lived nuclear 

waste; c) Nuclear energy is heavily subsidized resulting in significant hidden costs; d) Nuclear 

energy poses nuclear proliferation and national security risks; e) Nuclear power plant accidents 

can cause catastrophic consequences; f) Nuclear power plants produce and release harmful 

radiation; and g) The Uranium fuel chain is incredibly damaging to the public health and the 

environment. 

Commenters stated that nuclear energy is not the "best" energy system from any standpoint, 

including costs, reliability, non-air-related impact, or compatibility with other-low carbon energy 

sources. 

Commenters stated that the reactors under construction or any new nuclear reactors do not meet 

the criteria for inclusion in the best system of emission reduction due to their costs and non-air 

impacts. Commenters suggested that if the EPA wants to include nuclear in such a system, it 

must produce a technically and economically valid analysis that takes these facts into account 

and puts them in the perspective of the needs of CO2 reduction until its target year of 2030. 

Commenters stated that the EPA needs to address such issues substantively before including 

under-construction or new nuclear reactors in the BSER. Commenters recommended that the 

EPA should explicitly indicate that reactors that are not currently certified by the Nuclear 

Regulatory Commission would not be considered as viable parts of state compliance plans. 

Commenters stated that, by endorsing nuclear power as a BSER technology, the EPA would 

provide implicit support to efforts by the nuclear industry to persuade states to include nuclear 

energy in their renewable energy portfolios. Commenters stated that nuclear energy undermines 

the growth of the renewable energy sector. 

Commenters stated that retaining nuclear power as a BSER undermines the express purpose of 

the EPA's Carbon Rule, because nuclear utilities are already using the EPA Carbon Rule to 

subsidize unprofitable nuclear reactors, diminish if not thwart the expansion of renewable 

energy, and maintain a "status quo" energy system. Commenters remarked that none of these 

goals will have the effect of lowering carbon intensity of power generation. 
576 

Commenters stated that low- or zero-carbon resources should be included in BSER with 

modifications in the composition of Building Block 3 and in the formula for computing states' 

emission goals, and nuclear should be removed from BSER. Commenters also stated that in the 

BSER formula, the way in which renewables and efficiency are included in the draft rule is 

flawed, since increased deployment of Building Blocks 3 and 4 resources were added to the total 

generation supply (denominator), but were not assumed to reduce emissions from fossil fuel 

sources (numerator) as coal and natural gas generation sources fall back in the dispatch order or 

are phased out. Commenters remarked that this approach did not take into account the true 

emissions-reducing potential of increased deployment of low-/zero-carbon resources, resulting in 

the calculation of artificially high emissions rate goals. 

Commenters stated that the rule's inclusion of nuclear power in Building Block 3 would be 

problematic in that it could enable the diversion of economic resources from measures that 

would be more effective in reducing emissions of CO2 and other air pollutants. Commenters 

suggested that the draft rule's evaluation that nuclear power should be taken into account in the 

state goals, in terms of both new and existing reactors, would set a precedent by codifying it as 

environmentally beneficial in the most significant piece of U.S. climate policy to date, however 

it does so by disregarding the significant environmental impacts of nuclear without conducting 

an analysis to support such a conclusion. Commenters stated that the draft rule also fails to 

conduct any meaningful analysis of the costs of nuclear generation resources of any type 

(existing reactors, new reactors, and reactor power uprates), and thereby fails to recognize that 

nuclear should be disqualified from the BSER as economically infeasible. Commenters also 

mentioned that the EPA's recommendation that states provide incentives to promote the 

preservation of existing nuclear reactors is inconsistent with the treatment afforded other low- or 

zero-carbon energy resources. 

Commenters disagreed with EPA's conclusion that construction of new nuclear reactors would 

have a positive impact in encouraging technological innovation. Commenters pointed out that the 

degree of innovation as a result of increased deployment is extremely limited, and the reactors 

currently under construction utilize effectively the same technology with very little improvement 

in thermal efficiency and no apparent economic improvement, suffering from the same problems 

with cost escalation and construction delays. Commenters stated that a serious analysis of the 

opportunities for technological innovation in nuclear power would reveal the facts, but the lack 

of rigor in the EPA's analysis results in inaccurate conclusions that favor nuclear and its 

unwarranted inclusion in the BSER. 

Commenters stated that nuclear generation should be excluded from the BSER based on its 

economic and technical feasibility and its non-air quality impacts. 

Commenters stated that the draft rule significantly underestimates the cost of including nuclear 

resources in BSER. Commenters remarked that a more accurate estimation of that cost would 

lead to a different conclusion about the appropriateness of subsidizing the preservation of nuclear 

energy. 

Commenters recommended that the EPA remove preserved nuclear capacity from Building 

Block 3, as preserving uneconomic nuclear power plant capacity does not represent BSER 

because it does nothing to drive investment and innovation in new clean, renewable energy 
577 

technologies that will permanently displace emissions from fossil-fuel generation. Commenters 

also mentioned that, in the short term, existing nuclear capacity will likely become more 

competitive as fossil-fired generators absorb the cost of compliance with Section 111(d), 

removing any need for states to further subsidize nuclear power plants. Commenters stated that 

states can accomplish the proposed emission reduction goals at a reasonable cost without getting 

credit from saving nuclear capacity, and this is true even if the targets are not adjusted upwards 

to account for removal of the 5.8% preserved nuclear capacity from the adjusted baseline, 

because states can make up the difference through greater emphasis on renewable energy and 

energy efficiency. Commenters remarked that overreliance on aging nuclear power plants will 

hamper investment in new and evolving cleaner energy technologies that do not have the safety, 

environmental, and security risks of today's nuclear power plant technology, and would also 

undermine the proposed rule's stated goal of driving technological advances and innovation in 

emissions control and clean energy technologies. 

Commenters stated that the costs of cancelled nuclear units should be attributed to the cost of 

carbon reductions from completed reactors, which would further increase the disparity between 

the cost of using efficiency, onshore wind and utility solar energy to reduce CO2 emissions on 

the one hand and using nuclear power on the other. Commenters stated that in view of these 

realities, history, and absolute and relative costs, the assumption that nuclear reactors are part of 

a best system of emission reduction is untenable. Commenters stated that to these considerations 

one must add the EPA's own acknowledgement that costs and non-air-impacts need to be taken 

into account in designing a best system of emission reduction. Commenters stated that the CPP 

has no meaningful analysis of the relevant issues in regard to nuclear plants under construction 

and if the EPA wants to include nuclear in such a system, it must produce a technically and 

economically valid analysis that takes these facts into account and puts them in the perspective 

of the needs of CO2 reduction until its target year of 2030. Commenters stated that the many 

non-air-quality considerations such as the plutonium and tons of spent fuel that the five reactors 

would generate each year, the vast amounts of water they would use, and other impacts should be 

added to the list of considerations. Commenters stated that nuclear reactors are very inflexible 

and a poor complement for variable solar and wind generation. Commenters concluded that the 

reactors under construction, or indeed, any new nuclear reactors, do not meet the criteria for 

inclusion in the best system of emission reduction. Commenters stated that the putative 

economics of small modular reactors are entirely dependent on a supply chain in which major 

components would be mass manufactured and that this is highly unlikely in the United States 

without massive government subsidies or government orders or both. Commenters stated that the 

EPA needs to address such issues substantively before including nuclear reactors under 

construction or new nuclear reactors in the BSER; the EPA should explicitly indicate that 

reactors that are not currently certified by the NRC would not be considered as viable parts of 

state compliance plans. Commenters stated that the EPA has not justified the inclusion of 

existing or new nuclear generation as part of the BSER. Commenters continued that, even if the 

EPA removes nuclear power from the BSER, it is possible that the states may include it in their 

implementation plans. Commenters stated that the EPA is required to satisfy the BSER criteria in 

setting its targets - and it is clear that nuclear power does not meet those criteria. Commenters 

stated that for inclusion of existing and under-construction nuclear setting emission rate targets, 

the EPA did not evaluate the economic aspects correctly and also did not address a number of 

non-air quality impacts, which the Clean Air Act requires it to consider. Commenters stated that 

the EPA did not consider a number of other important issues that preclude the consideration of 
578 

nuclear generation as BSER, including the following: 1) The EPA's approach relies on the 

continuation of a heavily centralized electricity grid; and 2) The EPA Clean Power Plan does not 

consider the economic impact on low income households of the increasing use of natural gas for 

power generation. 

Commenters stated EPA failed to properly "tak[e] into account the cost" when it proposed to 

treat under construction nuclear units as BSER. Commenters said the EPA's assertion related to 

"incremental costs" is inconsistent with the plain language of the statute, which requires EPA to 

consider the "cost." Commenters stated assuming "zero" cost for under construction "controls" is 

unprecedented in the section 111(d) context, and by ignoring the total value of their investment 

merely because they acted early in advancing the first new nuclear power plants in nearly 30 

years, the EPA's determination is fundamentally flawed. Commenters said the EPA has never 

mandated such a large capital investment as BSER for affected units. 

Commenters stated that nuclear power should not be considered as a BSER because the nuclear 

power industry has been unable to control construction costs after decades of significant 

subsidies while the federal government has not been able to license a long-term geologic 

repository for high level nuclear wastes; nor does the federal government know when a 

repository will be complete or how much it will cost, which represents more than trivial 

problems for nuclear energy. 

Commenters expressed concerns about the EPA's cost of CO2 emissions from nuclear 

generation; in general, there's not enough clarity on the costs of operating a nuclear reactor in 

deregulated versus regulated markets. Commenters stated that the EPA anticipates approximately 

6 percent of existing nuclear capacity will be decommissioned; they cite a report that estimates 

$6/MWh shortfall in covering a threatened nuclear reactor from covering operating costs with 

electricity sales; and they estimates offsetting the revenue loss of "at-risk" nuclear reactors as 

approximately $12 to $17 per metric ton of CO2. Commenters stated that they are concerned as 

to what EPA considers economically reasonable for keeping at-risk nuclear reactors operating. 

Commenters stated that they wanted to know if there is a cost the EPA thinks is unreasonable. 

Commenters stated that they agree with IEER comments on this issue. Commenters stated that 

CPP should not subsidize aging and unprofitable nuclear reactors. Commenters stated that EPA 

allows for state flexibility to use carbon reduction techniques that are not identified as BSER in 

the CPP; natural gas and nuclear can be used by states if they choose while not being considered 

a BSER by the EPA. 

Commenters stated that the EPA's reliance on under-construction nuclear as part of its BSER 

determination for setting the performance standard is not based on a system of emissions 

reduction, has not accounted for the costs associated with such construction and has not been 

adequately demonstrated to reduce emissions from fossil fuel-fired EGUs. 

Commenters stated that the construction of nuclear generation has never been used by EPA (and, 

in the statute, was never viewed by Congress) as a system or method of emission reduction for 

other, unrelated EGUs. Commenters stated that Congress never envisioned EPA would graft 

such a sweeping interpretation on to the term "system of emission reduction" in section 111, and 

EPA's attempt to do so is arbitrary and capricious. Commenters stated that EPA has never 

required any type of replacement generation as a system or method of emission reduction in a 
579 

section 111 performance standard setting process as there is no authority under the CAA to 

require the development or operation of replacement generation as part of a BSER determination. 

Commenters stated that EPA's attempt to justify its approach by creating some distinction 

between under-construction nuclear and new (yet-to-be-planned) nuclear is equally unjustified, 

arbitrary and without precedent or statutory authority. Commenters stated that EPA implies that 

because it historically has distinguished between affected sources that are under construction at 

the time of proposal and those that are not, that it can similarly distinguish between underconstruction nuclear and new nuclear as part of its BSER determination for fossil fuel-fired 

EGUs. Commenters remarked that a gaping flaw to that approach is that neither new nor underconstruction (nor, for that matter existing) nuclear units are part of the affected facility under 

Section 111. and, thus, there is no legal rationale for EPA's approach. Commenters contended 

that while the desire to include under construction nuclear may be fueled by the overriding 

policy goal of decreasing the utilization of existing fossil generating units by any means 

necessary, that goal cannot outweigh the limiting parameters of EPA's authority - here bound by 

the CAA - to regulate under construction nuclear capacity within the confines of a performance 

standard setting process for several categories of fossil fuel-fired EGUs. 

Commenters stated that it cannot be said that the Vogtle units are an "adequately demonstrated" 

system for purposes of section 111 as an adequately demonstrated system is one shown to be 

reasonably reliable, reasonably efficient and reasonably able (and reasonably expected) to serve 

the interests of pollution control without becoming exorbitantly costly in an economic or 

environmental way. Commenters stated that nuclear units cannot be viewed as a mechanism for 

pollution control at another power plant; nor are they inexpensive, or within the cost level 

normally viewed as appropriate for purposes of establishing a section 111 performance standard. 

Commenters stated that whether the nuclear fission process that will be used at Plant Vogtle is a 

proven technology is irrelevant to EPA's use of it in the proposal and as part of its BSER 

determination. Commenters stated that EPA has not shown that development of a nuclear power 

plant is a method of reducing emissions from one or more unrelated fossil fuel-fired EGUs, 

regardless of whether the new nuclear plant and the affected [under section 111] fossil fuel-fired 

EGUs are owned and operated by the same or separate entities. Commenters contended that 

absent the required technical basis, the BSER determination must fail. Commenters stated that, 

further, as EPA notes in the proposed guidelines, Section 402(i) of the Energy Policy Act of 

2005 [EPAct05] states: "No technology, or level of emission reduction, solely by reason of the 

use of the technology, or the achievement of the emission reduction, by 1 or more facilities 

receiving assistance under this Act, shall be considered to be adequately demonstrated for 

purposes of [section 111 of the Clean Air Act]'". Commenters stated that Congress crafted this 

limitation broadly; namely, with respect to "facilities receiving assistance under this Act [i.e., the

EPAct]." Commenters stated that the EPAct provided various forms of assistance for new 

nuclear reactors, including tax credits and loan guarantees; the co-owners of Vogtle 3 and 4 have 

received, or will receive, assistance provided through that legislation, and as such, these units 

should not, as a legal matter in this context, be deemed "adequately demonstrated." 

Commenters stated that any discussion of the reasons nuclear power should not be part of BSER 

must include the impacts of the front end of the nuclear fuel cycle, i.e., the mining and 

processing uranium for fuel. Commenters excerpted sections from a report by Fettus and 

McKinzie that describe the environmental impacts of uranium mining and processing and from a 

report that describe the health effects of uranium mining and processing. Commenters stated that 
580 

there are other "nonair quality health and environmental impact[s]" as envisioned by section 

111(d). Commenters stated that the radioactive waste from spent nuclear fuel is a dangerous 

problem for which there is no good solution and there is also the danger to human health from 

leaks of radioactive tritium from nuclear power plants. Commenters listed several examples of 

tritium leaks at several reactors. Commenters stated that based on the foregoing problems, it is 

clear that nuclear power is not a valid consideration in a best system of emission reduction for 

greenhouse gases. 

Commenters stated that the EPA has not justified its reliance on nuclear power as an appropriate 

aspect of a best system of emission reduction. Commenters stated that the EPA's assertions to the 

contrary, nuclear power is not carbonfree and does not provide an alternative to coal at a 

reasonable cost. Commenters stated that EPA has minimized the impact of the radioactive waste 

from nuclear power as well as the economic challenges that nuclear power faces. Commenters 

stated that EPA has touted new designs in nuclear reactors without any discussion of those 

designs and their inherent flaws and has totally ignored the impacts of the front end of the 

nuclear fuel cycle, uranium mining and processing. Commenters remarked that EPA has not 

given a fair analysis to renewable energy and energy efficiency. Commenters stated that by 

failing to address all of these considerations, the Clean Power Plan is subject to being set aside 

pursuant to the Administrative Procedure Act. 

Commenters stated that nuclear power in any form, including existing "at risk" reactors, should 

not be considered as a BSER technology: it is neither a renewable generation resource, relying 

on a finite fuel source (uranium), nor does it pass any rational cost-effective test that will be 

employed for purposes of determining BSER alternatives. Commenters stated that nuclear power 

is the most expensive currently available generation resource in the nation and its overall, 

levelized costs, including still-unsolvable waste management and unknown disposal 

technologies, are incalculable. Commenters stated that the draft rule may actually encourage 

states where reactors are at some stage of construction to continue massive investments when far 

less expensive alternatives - notably renewable energy and energy efficiency - are available. 

Commenters stated that if the rule assumes there is no cost of completing any of the reactors 

regardless of massive cost overruns and delays, then nuclear would irrationally be viewed as 

competitive as a resource as solar or wind; nor should the rule suggest or assume that 

decommissioned reactors must be replaced with thermal, GHG-emitting resources. Commenters 

stated that they see no justification to provide states with operating or planned nuclear reactors a 

credit toward target compliance in exchange for further massive investments in reactors, as has 

been suggested; regardless of whether the rule considers nuclear to be a BSER, it should be 

disqualified as a resource to help meet emission reduction targets. 

Commenters presented evidence of extensive radioactive contamination from the Chernobyl 

Nuclear Disaster, including the forced permanent evacuation of over 116,000 people from homes 

and business and widespread contamination from Cesium-137. Commenters stated that even the 

remote possibility of such widespread and enduring damage is reason enough to be a valid 

reason to exclude nuclear from any truthfully Clean Power Plan. 

Commenters stated that over 60 epidemiological studies worldwide have examined the incidence 

of childhood cancer near nuclear power plants, and most of them have indicated leukemia 

increases. Commenters stated that nuclear power is dirty and a danger to our children. 
581 

 

Comment 28: Commenters stated that nuclear power is expensive. 

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 section V.A of the preamble for further discussion of the decision to exclude nuclear 

generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters opposed the EPA's inclusion of nuclear power under Building Block 3 since it is 

unpredictable. Also, commenters remarked that nuclear energy has become very expensive to 

matter according to a recent report produced by the Massachusetts Institute of Technology. 

Commenters reviewed two current efforts of preserving at-risk nuclear reactors [Davis-Besse and 

Ginna] to illustrate that the EPA's estimate of the cost of preserving at-risk nuclear generation is 

too low. 

Commenters stated that the issue of continued operation of existing nuclear facilities needs a 

much deeper evaluation. Commenters stated that in unregulated generation service areas where 

low cost generation is key it seems highly unlikely that owners would continue to maintain high 

cost existing nuclear facilities. 

Commenters stated that the EPA's approach is not technology neutral; rather it sets the stage for 

the nuclear industry to extract concessions and subsidies from states. Commenters stated that 

EPA's use of a formula for calculating allowable emission rates with existing nuclear (at 6 

percent of each nuclear power reactor) and all five reactors under construction puts pressure on 

states to subsidize the plants to keep them open and in the case of the ones under construction to 

complete them at substantial risk and expense. Commenters stated that a technology neutral rule 

is important because it allows the consideration of the merits of each technology that is used to 

reduce emissions based on its attributes in relation to the criteria for a best system of emission 

reduction. Commenters stated that in contrast, the CPP's a priori decision that at-risk nuclear 

plants should be kept on-line led to a mis-estimation of costs and an ignoring of a host of non-air 

quality impacts. 

Commenters stated that the CPP assumes that the CO2 reductions due to the deployment of the 

reactors under construction in Georgia, South Carolina, and Tennessee would have zero cost for 

the CO2 reductions since the decisions to construct these units were made prior to this proposal. 

Commenters stated that this assumption is not correct and noted the following: 

• The reactors themselves are very expensive; the cumulative cost of these five 

reactors, as currently estimated, stands at about $31 billion. 

• Significant expenditures remain to be incurred on these units. 
582 

• Demand for electricity is growing far more slowly today than anticipated at the 

time the decision to build them was made. 

• Costs have risen and schedules for all these reactors have slipped. 

Commenters summarized the objections from the Environmental Protection Division of the State 

of Georgia (Georgia EPD) to the EPA's assumption of zero cost and its inclusion of nuclear 

generation in the EPA's rate calculation to tighten its allowed rate of emissions. Commenters 

referred to the objections expressed by the Georgia EPD, and stated that the actual costs 

undermine EPA's basic reason for including under-construction nuclear in the baseline 

calculations and that these units are not an inexpensive opportunity to reduce carbon emissions 

from existing fossil units but are in fact quite costly. 

Commenters stated that the EPA itself noted that nuclear generating capacity is also relatively 

expensive to build compared to other types of generating capacity, and little new nuclear 

capacity has been constructed in the U.S. in recent years. Commenters stated that underconstruction nuclear reactors do not meet the cost criteria for a BSER as they are an expensive 

way to reduce CO2 emissions, as even the State of Georgia, which is encouraging nuclear 

development, has acknowledged; and as the EPA itself has commented, there is little reactor 

development taking place because of the high cost of building nuclear power plants. 

Commenters stated that in order to include nuclear power in a BSER, the EPA must show that 

the cost per metric ton of CO2 emissions reduced or avoided is comparable to or less than other 

potential components of such a system or that there is a good, statutorily authorized reason to 

accept higher costs; nuclear does not meet either test. Commenters cited a 2014 analysis by 

Lazard that concluded that it was much cheaper to use utility scale solar photovoltaic electricity 

than nuclear electricity to reduce CO2 emissions: $7 vs. $28, respectively, to displace coal 

generation at the lower end of the estimated levelized costs of the two technologies. Commenters 

stated that wind energy, being cheaper than coal generation, has negative costs of reducing CO2 

emissions - that is using wind generated electricity to displace coal results in money savings even 

before the costs of CO2 emission abatement are taken into account; energy efficiency is the 

cheapest way to reduce CO2 emissions. Commenters stated that even natural gas combined cycle 

plants are a cheaper way to reduce CO2 emissions compared to nuclear, if one does not take 

methane leaks into account or conclude, as the EPA has done, that methane leaks would not add 

to the CO2eq emissions by the year 2030. Commenters included table of levelized cost of 

various technologies and corresponding costs to reduce CO2 when used to displace new coal 

generation. Commenters stated that new nuclear is a far more expensive way to reduce CO2 

emissions than four major resources (efficiency, onshore wind, utility solar, and NGCC plants) in 

the EPA's framework and three in ours (onshore wind, utility solar, and efficiency). Commenters 

stated that the rapid decrease in cost of distributed solar systems will also very likely further 

increase their competiveness in comparison to new nuclear plants. Commenters noted that 

Georgia Power recently revealed that they selected utility-scale solar bid at a levelized price 

below $65 per MWh, far lower than the lowest estimated cost of new nuclear in Lazard 2014 at 

$90 per MWh. Commenters stated that Lazard estimates energy efficiency costs to be in the 

range of $0 to $50 per megawatt-hour compared to a range of $90 to $134 per megawatt-hour for 

nuclear; the average nuclear cost estimate is $112 per megawatt-hour compared to the average 

estimate of $25 for efficiency. Commenters stated that investments in efficiency would, on 
583 

average, be preferred to nuclear even if the four reactors were three-fourths complete. 

Commenters stated that the states of Georgia and South Carolina are far behind the rest of the 

country in efficiency investments, being ranked 35th and 42nd among the states in this area by 

the American Council on an Energy-Efficient Economy and that same group estimates the 

average cost of energy efficiency measures to be $54 per megawatt-hour, including utility and 

participant expenditures. Commenters remarked that, the value of $54 per megawatt-hour is an 

unweighted average of the total cost of efficiency programs; the cost, weighted by generation in 

each state, which is more representative of the overall efficiency effort, is $49 per megawatt-hour 

and either number is far lower than the average cost of new nuclear. 

Commenters stated that the CPP has also underestimated the potential cost of keeping at risk 

reactors open. Commenters remarked that the actual cost of keeping a specific unit operational 

that is losing money will be much higher than estimated costs in CPP. Commenters provided 

examples to illustrate their point. Commenters stated that, if Davis-Besse gets a price of $65 per 

MWh in the purchased power agreement (PPA) it seeks, the subsidy would be about $26 per 

MWh or about $180 million per year, and the subsidy for the smaller Ginna reactor, which is 

also at risk, at about $20 per MWh would cost over $90 million per year. Commenters stated 

that, UBS Securities, a Wall Street firm, has estimated that the purchased power agreement for 

the Ginna plant is $26 per megawatt-hour above market prices. 

Commenters stated that EPA completely ignores cost when including under-construction nuclear 

into its BSER determination and disagrees with the assumption of zero cost for underconstruction nuclear. Commenters stated that EPA ignores the plain language of the statute, 

requiring that costs be considered; assuming zero cost for under-construction "controls" at 

nuclear units is unreasonable and arbitrary. Commenters stated that there are no NSPS-based 

controls at Vogtle Units 3 and 4 because there are no regulated emissions at those units. 

Commenters stated that EPA provides no support for this zero-cost determination in the 

administrative record and has not explained how "incremental cost" should be defined in this 

context, or how such costs should be calculated; EPA's entire justification is contained in a one 

paragraph discussion in the preamble regarding the lack of any "incremental cost" of completing 

these projects. Commenters stated that the Agency completely ignores the $14 billion being 

spent to construct and begin the operation of these units, and commenters do not think any 

discretion a Court may extend EPA in the BSER determination extends to the complete disregard 

of such substantial expenses. Commenters stated that EPA's analysis is unjustified under the 

requirements of the statute and is not part of reasoned decision-making or the legitimate result of 

any discretion afforded the Agency in this regard; EPA should correct this serious flaw in its 

BSER determination and as part of its emission control guidelines. Commenters stated that, in 

sum, at $20 to $26 per megawatt-hour, the total subsidies required to keep 5.7 gigawatts of atrisk nuclear power on line would be between about $900 million and $1.2 billion per year 

(rounded); over a typical 15-year period of purchased power agreements, the cumulative 

cost would be between approximately $13.5 billion and $17.5 billion, using an average capacity 

factor of 90 percent. 

Commenters stated that nuclear power generation is zero-carbon but is too expensive for 

development by a municipality like the City of Lakeland and while additional nuclear capacity 

within the state could help with achieving the reduction goal, to the extent that the state 

eventually mandates reductions by individual utilities, this is not a feasible option for the City. 
584 

Commenters stated that there are serious errors in the EPA's analysis of the cost of nuclear 

generation that is important to correct as nuclear power is exorbitantly expensive and requires 

large subsidies, with consumers paying those subsidies through their electricity bills. 

Commenters stated that the proposal encourages the preservation of nuclear generators that are 

likely to be taken offline because they are not cost-effective, but the very reason these units are 

likely to be retired is that they would require large subsidies to maintain in operation. 

Commenters stated that the agency states that a host of factors have altered the outlook for the 

U.S. nuclear fleet in recent years; but the common element among all of the factors is economic 

viability, including increasing fixed operation and maintenance costs, relatively low wholesale 

electricity prices, and additional capital investment associated with ensuring plant security and 

emergency preparedness. 

Commenters stated that the agency is not justified in arbitrarily omitting the costs of building 

these plants merely because their construction is based on existing state policy. Commenters 

stated that the proposal relies on existing policies in myriad ways, and in no other instance does 

the agency omit the costs of a particular policy merely because it is in place already; in all cases, 

including the construction of new nuclear generating units, the policymakers could change 

course, or they might decide to stay the course as part of a compliance plan for this rule. 

Commenters stated that the proposal dismisses the costs from radioactive waste that would result 

from preserving or increasing the deployment of nuclear generation, which creates significant 

additional costs from potential environmental contamination events and the ongoing difficulty of 

developing and managing interim and long-term waste storage. Commenters remarked that the 

failure by the U.S. to site a permanent waste repository has resulted in nearly 80 lawsuits by 

utilities seeking to recover costs of waste storage; these settlements and judgments paid from the 

taxpayer-funded Judgment Fund, have ballooned to $2 billion and could reach more than $20 

billion if DOE begins accepting waste by 2020 and, if it does not, then the cost are projected to 

rise by hundreds of millions of dollars annually. 

Commenters stated that the agency also ignores the potential economic and health costs from 

radiological accidents, which are massive; as of late 2012, Tokyo Electric Power Co. estimated 

that the cleanup from the Fukushima nuclear disaster in Japan might cost $137 billion and 

estimates of the total economic impact range from $250 billion to $500 billion. Commenters 

stated that the proposal also fails to consider the impact of nuclear generation's intensive water 

requirements on water resources. Commenters stated that the agency's partial and inaccurate 

treatment of nuclear generation costs is deeply problematic because a full and accurate 

accounting of the costs would lead to vastly different conclusions about the propriety of 

including nuclear generation in the state targets, almost certainly leading to the omission of 

nuclear generation entirely. Commenters stated that subsidizing uneconomical nuclear generation 

burdens ratepayers with unnecessary costs and unwisely depresses the expansion of safer, 

cheaper, and more sustainable renewable resources. 

Commenters stated that nuclear power does not come within the definition of best system of 

emission reduction; nuclear power is dirty, dangerous and expensive. Commenters stated that 

nuclear power is not viable without significant ratepayer and taxpayer subsidies. Commenters 

stated that Exelon Corporation estimated that it would require $580 million in government 

support to try to keep Exelon's fleet of nuclear reactors operating and that this would raise the 
585 

price of energy by as much as eight percent; but even then, Exelon would not commit to keeping 

all of its Illinois reactors open. Commenters stated that the Nuclear Energy Institute reports that 

costs to maintain nuclear reactors are rising faster than the rate of inflation; in 2012, the average 

cost was $44.17/MWh, more than 11 percent higher than in 2010, an increase that continues a 

previous trend in which, between 2007 and 2011 costs rose by one-third to $43/MWh. 

Commenters stated that further evidence of the economic challenges for nuclear power was 

described in Mark Cooper, The Economics of Nuclear Reactors: Renaissance or Relapse. 

Commenters excerpted sections from this report describing the costs and the environmental 

impact associated with electricity from nuclear reactors. Commenters stated that this report 

identifies three major factors that impact the economic analysis of nuclear power, and thus the 

point that nuclear power is not part of the best system of emission reduction; these factors are 

risk, externalities, and subsidies. Commenters cited excerpts from the report discussing the risk 

and externalities factors associated with nuclear power. Commenters stated that with regard to 

externalities, Mr. Cooper noted that the external costs and impacts of nuclear power are ignored 

or minimized in analyses of energy alternatives; these externalities include the excessive cost of 

nuclear power in attempting to reduce carbon emissions; the actual carbon footprint of nuclear 

energy, primarily from the mining, processing and transportation of nuclear fuel; safety and 

security concerns; and the impacts of radioactive waste. Commenters excerpted sections from the 

Cooper report that evaluated the demand for nuclear power subsidies for building additional 

reactors. Commenters stated that Mr. Cooper also discussed why currently operating reactors are 

at risk. 

Commenters stated that regarding construction of new nuclear reactors, the CPP recognizes that 

nuclear reactors are expensive to build, but omits or glosses over, however, the overall economic 

factors working against nuclear power. Commenters stated that first, it takes many years for the 

regulatory and construction process to be completed before a new nuclear reactor comes on line; 

second, the expense of building nuclear reactors has continued to increase over the past 40 years 

and there is no indication that this trend will not continue. 

Commenters stated that the CPP touts the technological and design advances in nuclear reactors, 

although it is not clear what technological advances are being referenced or how such advances 

factor into building block 3; in any event, the advances are overstated. Commenters stated that if 

the reference is to small modular reactors (SMRs), reliance on that technology is misplaced. 

Commenters remarked that there are currently four SMR designs being considered; these are all 

pressurized light water reactors, relying on the same underlying concept as the large commercial 

reactors currently in use. Commenters stated that SMR technology will suffer disproportionately 

from material cost increases because they use more material per MW of capacity; the untested 

design and the aggressive deployment strategy for SMR technology raise important safety 

questions and concerns; and cost estimates that assume quick design approval and deployment 

are certain to prove to be optimistic. Commenters stated that SMRs are not economical as 

nuclear reactors are strongly sensitive to economics of scale: the cost per unit of capacity goes up 

as the size goes down. Commenters remarked that the nuclear industry already acknowledges 

that non-fuel operating and maintenance costs are expected to be higher than present reactors and 

uranium resource and enrichment requirements are likely to also be higher; in fact, two of the 

leading U.S. developers have announced that they are slowing down the development of SMR 

technology because they cannot find customers (Westinghouse) or major investors (i.e., Babcock 
586 

& Wilcox). Commenters stated that even nuclear industry executives and regulators believe the 

SMR technology will have costs substantially higher than the current reactor technology on a per 

unit of output basis with the higher costs resulting from lost economies of scale on containment 

structures, dedicated systems for control, management and emergency response, and the cost of 

licensing and security; operating costs between one-fifth and one-fourth higher; and 

decommissioning costs between two and three times as high. 

Commenters stated that in evaluating whether nuclear generation is a cost-effective option in the 

BSER framework for reducing carbon emissions, EPA failed to consider the full range of costs 

of nuclear generation as a control technology. Commenters noted that EPA has generally 

underestimated the general construction and operation costs to build nuclear generation, as 

demonstrated by the trend of cost overruns at projects under construction. Commenters remarked 

that the costs to provide backup generation when a nuclear reactor goes offline along with the 

costs of securing standby control measures for reducing carbon emissions in a state plan are far 

higher than the costs to backup other BSER control technologies like solar and wind generation, 

and the costs to mitigate water and other resource use, clean up any environmental harm, and 

address public health harm caused by nuclear generation are significant. Commenters stated that 

even if EPA views nuclear generation as practically enforceable, these incremental costs of 

nuclear generation to utility customers and to society in general are, cumulatively, far greater 

than any incremental costs associated with cleaner and safer alternatives. Commenters stated that 

nuclear energy generation is an expensive, water-intensive and risky energy choice when 

compared to other low carbon-emitting options within Building Block 3 and, by including it in 

Building Block 3, EPA is diverting resources away from the most cost-effective technologies for 

reducing carbon emissions and towards an unsafe energy resource. Commenters stated that 

nuclear reactors produce toxic, extremely long-lived, highly radioactive waste for which no safe 

storage or management yet exists, require massive amounts of water to operate and can have 

catastrophic human, environmental and economic consequences should a severe accident occur. 

Commenters stated that if EPA includes nuclear energy as a compliance option, states that rely 

significantly on nuclear energy for compliance will face serious challenges in meeting carbon 

emission reduction goals as nuclear reactors go offline or scale back power for various reasons, 

many of which are outside of a state's control. Commenters stated that droughts or summer heat 

waves can affect the water supply on which a reactor relies to provide adequate cooling water 

and ensure safe operation of the plant; not enough water may be available, water supplies may be 

already too hot for reactor use, or the water being discharged by the plant may violate thermal 

discharge limits. 

Commenters stated that states have no authority to direct operational decisions made by the NRC 

as the primary regulator of nuclear reactors. Commenters stated that nuclear accidents or safety 

concerns can have fleet-wide implications that are outside of state regulatory control; it is 

reasonably foreseeable that regulatory decisions made by the NRC regarding safety issues could 

prevent compliance with the CPP if nuclear energy is included in a state's compliance plan. 

Commenters stated that present-day examples confirm that nuclear generation is expensive. 

Commenters remarked that currently all five reactors under construction in the U.S. have 

experienced significant cost increases and scheduling delays; these alone provide ample evidence 

of why nuclear energy generation cannot be viewed as a reasonable cost carbon reduction option. 
587 

Commenters stated that proposed reactors, not yet under construction, have also experienced 

serious and costly delays including suspensions and cancelations; for example, Florida utilities 

have proposed up to four new nuclear reactors, all using the Toshiba-Westinghouse AP1000 

design, located at two sites: Duke Energy Florida's (DEF) Levy County project (2 units) and 

FPL's Turkey Point 6 & 7 reactors (2 units). Commenters stated that both of these projects are 

severely over budget and delayed. 

Commenters stated that families, business and those on fixed budgets have been negatively 

impacted due in part to state legislation that allows utilities to charge customers in advance for 

costs associated with development of new reactors. Commenters stated that in the case of the 

capacity expansion at DEF's Crystal River 3 reactor (which presumably could have counted 

towards Florida's state compliance plan), customers will not receive refunds for the canceled 

project. Commenters stated that the costs associated with these projects in Florida have shown 

that new nuclear energy it is not a cost-effective option for utility customers. 

Commenters stated that at the scale of a nuclear generation plant, EPA must require that state 

compliance plans include immediate requirements for corrective measures upon a failure to 

achieve the required level of emission performance. Commenters stated that such a large 

inventory of ready-to-go contingency measures must be continuously maintained (e.g., if some 

measures are no longer feasible, or are not implemented, then new measures must be added). 

Commenters stated that due to the potential that these contingency measures were not selected 

for inclusion in the plan, and should not have lengthy development timelines so as to be available 

for immediate implementation, they would be more expensive than any measure in the plan that 

might be more methodically developed; the probability that such costs will be incurred should be 

considered as a component of the cost of nuclear power. 

Commenters stated that along with the high costs to develop new nuclear energy, the five under 

construction nuclear reactors will continue to require significant expenditures on the road to 

completion. Commenters stated that EPA's assessment of new nuclear energy generation as a 

"reasonable cost" or "zero cost" option to reduce carbon emissions is not supported by the facts 

and could inadvertently push states towards restarting canceled and uneconomic nuclear reactor 

proposals. Commenters stated that all five of the under construction nuclear reactors are located 

in the Southeast and demonstrate that the cost of new nuclear generation is not reasonable or 

zero. 

Commenters stated that the two proposed Toshiba-Westinghouse AP1000 reactors now under 

construction at Plant Vogtle have experienced significant cost increases and schedule delays; 

revised scheduling estimates of when they will come online represent a 21-month delay. 

Commenters stated that Georgia Public Service Commission Public Interest Advocacy Staff filed 

testimony that the 21-month delay scenario is an underestimate and that the Vogtle reactors will 

not come online at the end of 2017 and 2018. 

Commenters stated that while the schedule has slipped significantly, the costs have increased 

substantially as well. The commented stated that the average Total Project and Production Cost 

impact caused by a delay increases to approximately $2.0 million per day. Commenters stated 

that the initial certified cost for Georgia Power's share of the project was approximately $6.1 

billion; with a 21-month delay, the Company's cost estimate has increased to approximately $6.8 
588 

billion. Commenters stated that Georgia Power has spent $2.8 billion in cumulative construction 

and capital costs as of June 30, 2014, which means that Georgia Power has spent a little more 

than a third of the estimated project costs, leaving significant risk that costs will increase further. 

Commenters stated that Georgia Power is 45.7 percent owner in the project, with the majority 

owned by three public utilities, Oglethorpe Power, MEAG and the City of Dalton. Commenters 

stated that apportioning Georgia Power's reported costs to the full ownership indicates that the 

original $14.1 billion Vogtle project now costs at least $15.5 billion. 

Commenters stated that federal taxpayers and utility ratepayers bear most of the risk from 

schedule delays and cost overruns. Commenters stated that in February 2010, $8.3 billion in 

federal conditional nuclear loan guarantees were offered to the Vogtle project; Georgia Power 

and Oglethorpe finalized $6.3 billion in loan guarantees in February 2014; MEAG has yet to 

finalize the remaining $1.8 billion. Commenters stated that the 2009 Georgia Nuclear Financing 

Act requires Georgia Power ratepayers to pay in advance for the financing costs associated with 

the new reactors. Commenters stated that between January 2011 and September 2014, $1.0 

billion has been collected from customers through the Nuclear Construction Cost Recovery rider 

(NCCR); the NCCR rider is currently over 9.3 percent of a typical customer's bill and the longer 

the project takes, the more ratepayers are paying for financing costs - placing the burden on 

Georgia ratepayers rather than the utilities. Commenters stated that the substantial costs 

associated with the Vogtle project are acknowledged in Georgia Environmental Protection 

Division's (EPD) September 16, 2014 comments to the EPA. 

Commenters stated that SCANA's subsidiary SCE&G has also demonstrated cost overruns and 

scheduling delays in the construction of two new AP1000 reactors at the V.C. Summer nuclear 

plant. Commenters provided details of the increasing and substantial cost overruns, the 

substantial unknown expenditures that remain and the continued schedule delays. Commenters 

stated that SCE&G customers are paying for financing charges for the project in advance under 

the 2007 Baseload Review Act (BLRA). Commenters stated that through October 2014, 

customers have faced an average 2.3 percent annual increase for the nuclear project since it was 

approved in February 2009 and approximately 13 percent of their monthly bill is now for the 

nuclear costs. 

Commenters stated that TVA's efforts to complete a second reactor at their Watts Bar nuclear 

plant in Spring City, Tennessee is unique in terms of under construction nuclear generation and 

illustrates the troubled history of the nuclear energy industry. Commenters stated that Watts Bar 

2 has been under construction since 1973; construction stopped in the 1980s due to fleet-wide 

safety and management concerns at TVA and construction did not resume until 2007 with 

operation originally expected in 2012. Commenters stated that operation has been further 

delayed until December 2015 and may be delayed even further, and unlike the Vogtle and V.C. 

Summer reactors under construction, Watts Bar 2 does not have an Operating License (OL) from 

the NRC. Commenters stated that in addition to experiencing an extremely extended construction 

and licensing schedule, Watts Bar 2 has encountered cost overruns. Commenters stated that one 

reason for the schedule delays and cost overruns is the need to address safety concerns exposed 

after the devastating nuclear accident at the Fukushima Dai-ichi nuclear plant in March 2011; a 

full response for Watts Bar 2 has yet to be resolved. Commenters stated that the NRC's 

Fukushima Near-Term Task Force report included a recommendation in the set of "near-term 

actions, that advises the NRC to order the licensees to reevaluate the seismic and flooding 
589 

hazards at their sites against current NRC requirements and guidance, and, if necessary, update 

the design basis and structures, systems and components important to safety to protect against 

the updated hazards. Commenters stated that the Task Force also recommended that these issues 

be resolved for Watts Bar 2 in the course of the operating license (OL) review: For the two plants 

with reactivated construction permits (Watts Bar Unit 2 and Bellefonte Unit 1), the Task Force 

recommends that those operating license reviews and the licensing itself include all of the nearterm actions and any of the recommended rule changes that have been completed at the time of 

licensing. Commenters concluded that any additional rule changes would be imposed on the 

plants in the same manner as for other operating reactors. 

Commenters stated that responsible safety regulation by the NRC could prevent compliance with 

the CPP if nuclear energy remains an eligible compliance measure. Commenters stated that at no 

point should a short-term CAA compliance requirement justify relaxed nuclear safety standards, 

but neither should EPA permit compliance plans that unreasonably presume that nuclear plant 

construction will proceed on schedule, at projected costs, and without delays due to responsible 

safety regulation. 

Commenters provided a list of citations to support their comments. 

Commenters stated that windpower, industrial cogeneration, and other low- or no-emission 

resources are available at costs below nuclear operating costs, and referred to Bloomberg New 

Energy Finance's estimated unsubsidized windpower cost of $37/MWh. Commenters stated that 

the conclusion that the EPA's analytic treatment of preserving at-risk nuclear units is unsound 

does not depend only on the empirical costs of nuclear operation vs. efficiency, but also on the 

market prices of at least two supply-side alternatives. Commenters stated that these three nonnuclear options together received more than $600 billion of global investment in 2013 alone, 

dwarfing all nuclear investment. 

Commenters stated the EPA vastly under understated the achievable and cost-effective energy 

efficiency potential in Building Block 4 and the renewable potential in Building Block 3. 

Commenters contended that this underestimates the additional carbon and money that can be 

saved by improving the EPA's analysis and further encouraging states to buy more efficiency and 

renewables, rather than paying the often higher operating costs of their existing nuclear plants, 

let alone making customers or ratepayers bail out uneconomic nuclear operations. Commenters 

stated that new-build nuclear plants' discouraging and worsening competitive landscape was 

described nine years ago in his Nuclear Engineering International article, and in 2011 in 

Reinventing Fire. 

Commenters stated that the EPA's building-block methodology would allow states to count in 

their compliance plan the carbon savings from continued operation of nuclear units at risk of 

premature closure making some states feel advised or even obliged to bail out money-losing 

nuclear plants as operators have requested, for example, in Illinois. Commenters stated that this 

would burden customers, leaving them less money to invest in more cost- and carbon-effective 

efficiency and renewable alternatives. Commenters recommended a least-cost approach by the 

states, saving the most carbon per dollar, is what the EPA rule should encourage, enabling the 

new energy system, not protecting the old one. 
590 

Commenters described as odd that, as shown in Table 4.10 of the GHG Abatement TSD, the 

EPA pro rates the at-risk facilities across all states' nuclear capacity, rather than just to the states 

with units actually at risk. Commenters stated that the EPA's analysis further assumes that the 

output from at-risk nuclear plants is required and that if closed, they must be replaced with other 

EGUs. Commenters stated that these issues should be clarified, lest states interpret them in ways 

that yield perverse results, including lower carbon savings and higher costs. Commenters stated 

that the EPA's nuclear-power analysis has deeper flaws, which, if corrected, could abate 

substantially more carbon emissions at lower cost than the mix of proposed abatement measures. 

Commenters stated that EPA's assumption that increasing nuclear capacity as a means of 

reducing CO2 emissions is not desirable from an economic or policy view for the following 

reasons: 

• Inflexible operation. Commenters stated that operation of nuclear units is 

inflexible due to load-following constraints in range and ramp-rate, scheduling 

requirements (e.g. for refueling and major maintenance), thermal-fatigue and 

neutronic issues, and must-run regulatory designations; thus, dispatch of nuclear 

units are generally not considered economical. 

• Economic unviablility in today's wholesale power market. Commenters stated that 

nuclear units are often exposed to negative wholesale market prices. Commenters 

contended that relieving local transmission bottlenecks may abate negative market 

clearing prices but the general result of grid and dispatch improvements will be to 

increase nuclear plants' exposure to even stiffer price competition, promptly from 

Midwestern windpower and increasingly from on peak photovoltaics. 

• Long-run avoided costs can exceed short-run avoided costs, and must be counted. 

Commenters stated that where economic dispatch occurs, it is typically based on 

short-run variable costs; however, if the operator decides to close a nuclear unit, 

then a range of longer-run variable costs can be avoided, increasing over time 

depending on schedules; those avoidable operating costs can include periodic 

variable costs, fixed operating and maintenance costs and, ultimately, net capital 

additions. Commenters stated that the nuclear industry treats net capital additions 

as operating costs in this context. Commenters remarked that the Electric Utility 

Cost Group data show that the busbar costs avoidable by retiring a nuclear unit 

averaged $44.2/MWh in 2012 - seven times larger than the proposed less than or 

equal to $6/MWh typical shortfall between nuclear operating costs and competing 

wholesale power prices. Commenters contended that the statement, "Assuming 

that such a revenue shortfall is representative of the incentive to retire at-risk 

nuclear capacity, one can estimate the value of offsetting the revenue loss at these 

at-risk nuclear units to be approximately $12 to $17 per metric ton of CO2,"would 

appear to be wrong by greater than or equal to 7 times against fully counted 

average operating cost, or by greater than or equal to 15 times against the higher 

operating cost to customers of the specific units actually most at risk of being 

closed as too costly to run. Commenters concluded that continuing to run such 

nuclear units misallocates customers' (and ultimately shareholders') capital from 

more- to less-effective carbon-abating investments. Commenters further 
591 

concluded that, all the real operating costs, over all timescales, including their 

expected real escalation, are avoidable if a nuclear unit is shut down. 

Commenters stated that average nuclear operating costs mask wide differences between units. 

Commenters stated that, for example, during 2010-12, NEI's EUCG data show that the costliestto-run quartile of plants averaged $62.4/MWh to run (2012 $) - 41percent above the $44.2/MWh 

average for all nuclear units, and 2.2 times the cheapest-to-run quartile; the EPA's analysis 

doesn't appear to count these large variations. Commenters stated that a paper they prepared 

comparing nuclear operating costs by quartile against the general national range of wholesale 

power prices shows how even the $43/MWh average nuclear operating cost nearly reached the 

upper end of typical U.S. wholesale electricity prices, while most of the 25 units in the high-cost 

quartile were generally uneconomic to operate.. 

Commenters stated that nuclear real operating costs are trending upwards and presented a 

supporting graph using data from the Electric Utility Cost Group. Commenters stated that with 

nuclear operating costs trending upwards while the wholesale power costs reported by FERC are 

generally trending downwards, the number of nuclear units already at risk of economic closure 

would appear many times larger than EPA's assumed 5.7 GW or 5.8 percent of nuclear capacity, 

and likely to rise further in the future. Commenters stated that EIA has found the same thing in a 

very plausible variant case, as have independent analysts such as Prof. Mark Cooper and major 

financial houses. Commenters stated that operators' shutdown cost-benefit calculus should count 

all these avoidable costs specific to their region or grid, taking account of the risk of future 

escalation and of possible breakdowns as units age, vs. returns from often-below-market and 

sometimes negative-price electricity sales plus the opportunity cost of other (and more carboneffective) uses to which the saved costs could be applied. Commenters stated that the EPA's 

methodology should recognize such an approach to operators' run-or-close decisions. 

Commenters stated that nuclear generation is not needed to replace EGUs because other, lowercost, rapidly deployable, zero-emissions options are available. Commenters stated that the EPA's 

central thesis that preserving the operation of at-risk nuclear capacity would likely be capable of 

achieving CO2 reductions from affected EGUs at a reasonable cost, is incorrect. Commenters 

stated that the EPA assumption that continued nuclear operation would displace new combinedcycle gas or existing grid-average generator (hence coal-heavy) operation is unsound, because 

other investments with lower cost and zero carbon emissions are also available, proven, and 

rapidly deployable. Commenters stated that comparing how fast a block of GW-y could be 

brought online isn't the right metric; a slower but cheaper or more reliable or more durable 

option could save more carbon, integrated over time, than one available immediately but at 

higher cost and/or lower assurance of sustained long-term persistence. 

Commenters stated that total avoidable operating cost for the average U.S. nuclear plant 

probably exceeds $45/MWh (2012 $) and possibly now nearly $50; per MWh delivered to the 

customer, grid losses make these costs about7 percent or a few dollars higher. Commenters 

stated that utilities charge the grid's capital and operating costs to any offsite generation they 

deliver to customers. Commenters stated that EIA's AEO analyses state that today's levelized 

cost of delivering a busbar kWh to retail meters averages around $43; thus roughly $90 per 

delivered MWh is a reasonable and perhaps low estimate of today's average nuclear operating 

cost. Commenters stated that the costliest nuclear units to run, of course, have considerably 
592 

higher operating costs, which the industry data suggest probably average >$100 per delivered 

MWh for the top cost quartile - and within that quartile, even more for the units most at risk. 

Commenters stated that nuclear operating costs around $90-100+ per delivered MWh far exceed 

the delivered costs of important alternatives; for example, ACEEE and E Source data show that 

U.S. utilities actually pay average costs about 3-7 times less than this for efficiency; the National 

Academy of Sciences found about 3 times; and Reinventing Fire found that nearly 4 times as 

much electricity as all U.S. nuclear plants produce could be saved at a technical cost an order of 

magnitude lower than the average delivered cost of operating a U.S. reactor - or an even greater 

advantage compared to the least competitive-to-run units. Commenters stated that this several 

fold higher delivered cost of nuclear operation than of equivalent efficiency means that closing a 

nuclear unit and investing its avoided operating costs into electric end-use efficiency - both 

carbon-free resources - will save several times more carbon than continuing to operate the 

nuclear unit. Commenters stated that based on their data, this is also clearly true for the average 

nuclear unit, and with judicious choices of efficiency investments (not the costliest kinds), it 

should also be true for the entire nuclear sector. Commenters stated that an optimal climate 

policy would encourage such smart investment shifts, which could be implemented by state 

utility commissions or by other subnational or national means. Commenters stated that the EPA's 

assumption that closing a nuclear unit means generating more fossil-fueled electricity, so 

preserving at-risk units' operation is a cost-effective and desirable contribution to states' portfolio 

of carbon-saving measures, is thus incorrect. Commenters concluded that it misallocates capital 

and diverts effort from the most carbon-effective investments. 

Commenters stated that the economic pressure due to low natural gas and wholesale electricity 

prices is not unique to nuclear power. Commenters further stated that the economic 

competitiveness of coal and oil-fired power plants, renewable energy facilities, and even energy 

efficiency investments are also affected by low market prices. Commenters remarked that like 

nuclear, many older coal plants have needed to make expensive capital investments to replace 

aging equipment, improve plant efficiency, and install pollution control and other equipment to 

reduce air pollution and water use, and were forced to retire; however, unlike existing nuclear 

plants, which have been experiencing increasing costs over the past 10 years, the costs of 

renewable energy technologies like wind and solar have been falling rapidly. Commenters 

contended that this has allowed renewables to remain competitive with new natural gas plants in 

states with high quality resources. 

Commenters cited, as an example, a recent DOE report shows that the cost of new wind projects 

dropped by over 60 percent between 2009 and 2013, allowing them to remain competitive with 

declining wholesale electricity prices in some parts of the country; however, this varies greatly 

by region, with weighted average wind power purchase agreement (PPA) prices between 2011 

and 2013 within the range of average annual wholesale electricity prices in 2013 in the interior 

region of the country (i.e., Plains states), and slightly higher than average wholesale prices in the 

Northeast, Great Lakes and Western regions. 

Commenters stated that determining whether an existing plant is "at risk" is very plant specific. 

Commenters cited a discussion that was included in a 2013 paper by Amory Lovins, determining 

whether an existing nuclear plant is at-risk economically "depends on complex and shifting set of 

both market and plant-specific considerations, so no comparison of average conditions in a 
593 

specific year can support conclusions about any individual plant." Commenters stated that these 

considerations include the location, size, age, condition, and ownership of the plant. Commenters 

stated that wholesale prices vary widely across the country and over time, and they also reflect 

the existing generation mix, which could shift over time. Commenters remarked that nuclear 

plants located in states with below average market prices, excess capacity, high quality wind and 

solar resources, or strong energy efficiency programs tend to be more vulnerable, and merchant 

plants located in restructured markets tend to be more vulnerable than plants owned by regulated 

utilities. Commenters contended that smaller, single unit plants tend to be more expensive to 

operate than larger multi-unit plants, which are better able to spread out the costs of capital 

investments. Commenters stated that the age and condition of the plant also makes a big 

difference, as older reactors tend to have higher operating costs and face more costly repairs to 

replace aging and damaged equipment. 

Commenters stated that the nuclear industry operating cost data, that divides the 104 operating 

U.S. reactors into quartiles, shows that at least three-quarters of U.S. reactors have 3-year 

average total generating costs that are within the lower to middle end of the range of 2013 

wholesale electricity prices. Commenters also stated that while the average costs of the 

remaining 25 percent have been higher than wholesale prices since 2009, they are in the middle 

of the range of wholesale prices between 2005 and 2008 when natural gas prices were higher. 

Comment 29: Commenters expressed miscellaneous comments. 

Response 29: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. Please see section V.A of the preamble for further discussion of 

the treatment of new and uprated nuclear plants, and VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2 

emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that existing and new nuclear generated electricity would come under the 

EPA's regulatory umbrella although there is no emission. 

Commenters expressed support for solar, wind and geothermal power over nuclear. 

Commenters stated that outside the fence line actions are detailed under building blocks two 

through four and necessary for states to comply with the proposal, and each of those building 

blocks is built on questionable assumptions. Commenters remarked Building Block 3's 

assumptions that no units in the entire fleet of nuclear plants will retire regardless of market 

conditions is questionable as well. 

Commenters stated that the proposal is unfair, unjustified and completely arbitrary, especially 

Building Block 3 relates to under-construction nuclear and significant expansion of intermittent, 

renewable energy generation. 
594 

Commenters mentioned that nuclear power requires more water than coal, and carbon capture 

and sequestration almost doubles coal's water requirement. 

Commenters stated that the EPA should allow North Carolina to receive credit for any out-ofstate nuclear construction that would be used to supply electricity to North Carolina because a 

significant portion of those construction costs would be allocated to North Carolina customers. 

Commenters stated that the effect natural gas and market electricity prices are suppressed, as the 

draft rule suggested, would be marginal. Commenters recommended that the EPA regard plans 

based on claims that new nuclear capacity will lower natural gas and electricity market prices 

skeptically, and conduct a thorough analysis of the deployment cost and market projections. 

Commenters stated that the EPA did not include an analysis of uprates in the draft rule, but did 

exclude additional new reactors from the BSER due to the cost of construction. Commenters 

remarked that it is presumed that EPA refers to extended power uprates among the three 

categories of power uprates authorized by NRC, but in fact, extended uprates may actually be 

counterproductive to the economics of existing nuclear. Commenters remarked that half of the 

at-risk reactors implemented extended uprates several years ago, and in addition to the high 

capital cost of implementing a power uprate, the increased material stress on reactor components 

may either increase maintenance costs on an ongoing basis, or shorten the mechanical life of the 

reactor. Given these, the commenters suggested EPA should only consider uprates on a casespecific basis, and with thorough scrutiny of the calculated economic costs and benefits. 

Commenters stated that Wisconsin Point Beach Nuclear Plant significantly increased its 

generation via an extended power uprate in 2011, and this increase in carbon-free base-load 

power should be acknowledged. 

Commenters stated that nuclear and hydro plants are typically non-dispatchable energy 

generating facilities these plants are not the ones that will be shut down as the system requires 

fewer peaking plants as load factor improves; dispatchable units are always fossil fuel emitting 

units. Commenters stated that as these dispatchable units are no longer needed for peaking 

power, the average emissions rate per MWH of generation is decreased. 

Commenters stated that using EPA's "at risk" value in Tennessee results in a reduction from 

1645 lbs/MWh to 1580 lbs/MWh, a decrease of 65 lbs/MWh, and that using EPA's proposed 

method for under construction nuclear lowers the formula from 1577 lbs/MWh to 1293 

lbs/MWh, a decrease of 287 lbs/MWh. 

Commenters stated that generation from nuclear under construction Georgia in 2012 is expected 

to be 17.4 million MWh, and that new nuclear capacity would decrease Georgia's emission rate 

by an increment of 225 lbs per MWh. 

Commenters examined EPA's Building Block 3 component closely and identified several defects 

with regard to its application to Pennsylvania. 

Commenters recommended that, if the EPA finds that nuclear generation can be a practically 

enforceable measure in state compliance plans, there should be at least three specific 

requirements for states that choose to include nuclear generation in their state compliance plans: 
595 

(1) the EPA should require states to identify the responsible party when action (or inaction) by 

the NRC results in a failure to reduce emissions as planned; (2) the EPA should require the state 

compliance plan to identify how that responsible party will implement timely emission 

reductions to compensate for any failure to reduce emissions as originally described in the plan, 

and the EPA may also wish to set a maximum percentage of the compliance plan (e.g., three 

percent) that may be at risk to a single project failure as part of this requirement; (3) for purposes

of determining the impact of these plants on the state's adjusted emission rate, the EPA should 

treat under-construction nuclear in the same fashion as it treats under-construction natural gas 

combined cycle (NGCC) plants as laid out in the draft rule; that is, the assigning a percentage of 

under construction nuclear generation capacity to the "other" category and recognizing that this 

capacity was built to serve "other system needs." Likewise, commenters stated EPA should 

credit a certain percentage of under construction nuclear generation capacity as displacing coal 

generation and allow the states with these under construction nuclear reactors to include these in 

their compliance plans. 

Commenters stated that EPA should consider encouraging states to establish policies analogous 

to existing renewable energy portfolio standards (such as Clean Energy Standards inclusive of 

nuclear) to support the development of new nuclear generating units. Commenters stated that the 

proposed rule creates/incorporates market interventions - it establishes a clear incentive for the 

addition of natural gas power generation, and it relies on existing renewable energy standards to 

drive zero carbon generating capacity as part of Block 3. Commenters recommended that, given 

the market risk of natural gas prices on one hand and the capacity limitations of alternative 

renewable energy sources on the other, nuclear generation must be more explicitly encouraged as 

part of a reliable emission reduction strategy. 

Commenters stated that the EPA's approach penalizes the significant effort that states and 

companies have made over the past decade or more to reduce GHG emissions. Commenters 

stated that the EPA's approach will impose greater costs on customers who already are paying for 

early reductions -- since their states already have harvested some of the lower-cost reduction 

opportunities -- while asking less of states where such opportunities still exist. 

Commenters stated that Louisiana's two nuclear power plants are Riverbend Station, unit 1 and 

Waterford, unit 3, and that their permits are set to expire in 2024 and 2025, respectively. 

Commenters contended that Entergy will successfully extend the operating permits of these two 

power plants. Commenters contended that emission reduction planning should model Louisiana's 

emission targets assuming both plants extend their permits successfully. 

Commenters stated that the extended timeline of nuclear plant construction, including the 

licensing and permitting process, should be acknowledged in the Clean Power Plan. Commenters 

noted that according to recent history, the full process to construct a new nuclear power plant 

takes about ten years. Commenters cited a recently issued a report by the Center for Strategic & 

International Studies that cites 8-9 years for the combined design and construction of a new 

nuclear power plant. Commenters stated that since state plans will not be approved until 2017 at 

the very earliest and the Clean Power Plan runs until 2030, a new nuclear plant being considered 

as part of a state's compliance strategy would only have a few years of operation, at most, before 

the certainty of the plan expires. Commenters contended that without assurance of post-2030 

targets, a nuclear developer may find the Clean Power Plan too uncertain to make an investment 
596 

decision in the early years of the Plan's operation. Commenters suggested that a nuclear energy 

developer considering a new plant after 2020 would not be assured of any benefits from the 

Clean Power Plan's 2030 targets. 

Commenters suggested that, to account for this, EPA explore a couple of options: (1) EPA could 

set a timeline for releasing post-2030 target emission rates. Ideally, this timeline and the post2030 targets would be released as soon as feasible to enable nuclear developers and other 

relevant stakeholders an ample amount of time to plan for new generation. (2) EPA could allow 

borrowing of credit from nuclear generation that occurs after 2030 in cases where construction is 

well underway prior to 2030. Commenters stated that this would ensure that nuclear generation 

developers can benefit from helping states meet their 2030 target emission rate even if 

construction is not yet complete, and any credit nuclear plant owners claim through this approach 

would be debited from post-2030 generation to ensure each megawatt-hour of nuclear generation 

is only counted once. 

Commenters stated that if the Proposal's treatment of at-risk nuclear is maintained in the final 

rule, it is unclear to us how at-risk nuclear generation will be factored into a state's calculated 

emission rate. Commenters stated that, more specifically, it is not entirely clear whether the 6 

percent at-risk figure is an average, such that a state will always include 6 percent of its existing 

nuclear generation into the denominator of its emission rate, or if it is marginal, such that all loss

of existing nuclear generation, up to 6 percent, is to be removed from a state's emission rate 

denominator. Commenters requested additional clarity on this point. 

Commenters stated that the EPA targets for renewable energy and nuclear generation are modest, 

and appear to significantly underestimate the potential for cost-effective RE. Commenters 

submitted in support of this statement, and with regard to nuclear generation, that all five of 

Pennsylvania's nuclear generating stations are currently licensed until after the 2030 compliance 

period. Commenters also stated that in addition, the Peach Bottom Atomic Power Station's 

license was recently amended to authorize a 12.5 percent increase in the thermal power level 

from units 2 and 3; this is an increase of 437 thermal megawatts each. 

Commenters stated that EPA's proposal supports nuclear power as a key part of the carbon 

dioxide emissions reduction strategy. Commenters remarked that since renewables cannot 

replace the baseload generation attributes of retiring coal plants, maintaining existing reactors 

and building new units is essential for many states to reach their assigned reduction targets; 

however, at least nine states (i.e., California, Connecticut, Illinois, Kentucky, Maine, New 

Jersey, Oregon, West Virginia, and Wisconsin ) have bans on new nuclear builds, which will 

remain in effect until the federal government, at least to some degree, resolves the waste disposal 

issue. Commenters then stated a series of questions: 

(a) Given your Administration's opposition to make use of the Yucca Mountain 

repository, will EPA bring forward a viable, long-term solution for disposal that would 

win public support and the necessary votes in Congress? And if so, when? 

(b) If not, does your Administration expect the states with bans on new nuclear facilities 

to revise their laws, despite the federal government's failure to adequately address the 

waste issue? 
597 

Commenters cited the CPP and stated that the EPA recognizes that nuclear energy and renewable 

energy displace fossil fuel generation and thereby reduce CO2 emissions: "nuclear generating 

capacity facilitates CO2 emission reductions at fossil fuel-fired EGUs [Electric Generating 

Units] by providing carbon-free generation that can replace generation at those EGUs. 

Commenters stated that because of their relatively low variable operating costs, nuclear EGUs 

that are available to operate, typically are dispatched before fossil fuel-fired EGUs." 

Commenters also cited the explanation in the Appendix, and commented that the arithmetic of 

the way the CPP emission targets are developed does not recognize this reality. Commenters 

stated that there were five nuclear power reactors under construction at the time of the 

publication of the draft CPP in June 2014: two in Georgia, two in South Carolina, and one in 

Tennessee. Commenters further noted that the EPA handled the reactors under construction by 

adding the expected electricity generation from these reactors to fossil and renewable generation, 

without assuming that nuclear would displace fossil fuel generation. Commenters concluded that 

the CPP's calculation method undervalues new nuclear in terms of the extent to which emission 

rates would actually go down. 

Commenters stated that they recognize removing nuclear power from the calculation of target 

rates by itself would weaken the emission targets for the states - moderately so for states with 

existing nuclear power plants and much more for the three states with nuclear reactors under 

construction. Commenters state that they did not advocate a weakening of the target emission 

rates; rather, the commenters advocated using higher targets for efficiency and renewable 

energies in the best system of emission reduction in amounts that would make the target 

emission rates more stringent than those on the Clean Power Plan and reduce the mass of 

greenhouse gas emissions significantly more than about 30 percent reduction relative to 2005 

estimated by the EPA for its plan. Commenters also stated that they recognize deriving rates in 

the way that the commenters propose (i.e., omitting reactors whose licenses are due to expire) 

opens up the possibility of the states with such reactors using them in their implementation plans. 

Commenters noted in that case, the requirement for renewable energy and efficiency would be 

reduced for those states; however, the EPA should discourage such compliance plans for a 

number of reasons. 

Commenters stated that the CAA Section 111 language appears to give EPA broad interpretative 

and expansive authority to determine which system of emission reduction best serves the CAA 

statutory goals. Commenters recommended that EPA continue to work with Nuclear Regulatory 

Commission to monitor nuclear plants, particularly after refueling. Commenters asserted this will 

help to minimize the health risks that are associated with radioactive gas plumes and which 

primarily affect children and vulnerable populations. 

Commenters urged EPA to adopt these two changes which will better reflect the advances North 

Carolina has already made in incorporating renewables and energy efficiency programs into the 

state's energy portfolio and will properly account for the significant investment North Carolina's 

citizens have already undertaken to develop nuclear power to meet the state's energy needs. 

Commenters stated and awareness that many utilities have submitted technical comments 

proposing ways of building additional nuclear capacity into the baseline computation, as well as 

ideas for credit provided for regulatory decisions, such as Nuclear Regulatory Commission re-
598 

licensing, that will lead inexorably to more zero-emitting generation. Commenters asked that 

EPA consider these proposals. 

Commenters stated that unlike EE and RE measures, nuclear generation is subject to the 

authority of the Nuclear Regulatory Commission (NRC). Commenters noted that EPA is seeking 

comment whether the state plan must include additional measures that would apply if any of the 

other portfolio of measures in the plan are not fully implemented, or if they are, but the plan fails 

to achieve the required level of emission performance (Rule 40 Fed. Reg 34909; June 2, 2014). 

Commenters contended that in the event of noncompliance, EPA should find that it would be 

impractical to take enforcement action against some responsible parties and, based on the history 

of nuclear power, it is likely that nuclear projects are subject to substantial cost risk, numerous 

and extensive schedule delays, and unavoidable and lengthy outages due to operational 

limitations and safety concerns. Commenters stated that each of these circumstances is likely to 

lead to a failure to achieve the required level of emission performance. 

Commenters further stated that in its evaluation, EPA should evaluate the unique character of the 

responsible parties with the authority to expedite, delay or cancel nuclear projects. Commenters 

noted that the NRC has statutory responsibilities to ensure the safe operation of nuclear power 

plants, and EPA should evaluate whether the NRC could be compelled to grant or extend an 

operating license to a nuclear reactor in order to implement the measures of a state compliance 

plan. Commenters contended that if the NRC refuses over the objection of other responsible 

parties, EPA should determine what obligation those other responsible parties would have to 

implement additional measures to achieve the required level of emission performance. 

Commenters suggested that given the singular magnitude of emissions reduction associated with 

a single nuclear unit (as compared to a single wind turbine, for instance), it is implausible to 

expect that a state plan could practically maintain a sufficient inventory of cost effective 

measures that could be triggered in a timely manner to effectively address the failure of a nuclear 

reactor to achieve the required level of emission performance. Commenters stated that EPA has 

asked several questions regarding the steps that should be taken "if reporting shows that the plan 

is not achieving the projected level of emission performance." 

Commenters noted that EPA has previously recognized that emission control strategies that rely 

on voluntary actions of individuals and other parties (e.g., the NRC) may be considered 

"innovative methods in achieving emission reductions" and, for such methods, EPA approval 

obligates the state to assure that the emission reductions occur. 

Commenters further noted that in the case of the Voluntary Emission Reduction Program 

(VMEP), EPA recognized that the state's obligation to remedy any shortfalls from forecasted 

emission reductions in a timely manner created a necessity to limit the contribution of such 

methods to a maximum of three percent of the total reductions needed to meet any requirements. 

Commenters suggested that almost any individual nuclear generation project is likely to exceed a 

"three percent" benchmark, and EPA should not allow a single project (i.e., if subject to the 

authority of the NRC or any other party not subject to enforcement action pursuant to the Clean 

Air Act) to make up more than three percent of a state compliance plan. 
599 

Commenters maintained that in the event that such a large project failed to achieve the required 

emission reductions, the delay in implementing an alternative could make it difficult for the state 

to ever catch up at a reasonable cost. Commenters provided the example that, if EPA were to 

allow a state to then adopt new plan measures and resubmit the plan to the EPA for review and 

approval, years of excessive emissions would accrue. Commenters stated that it would further 

compound this shortfall if the process were not triggered until "the end of a multi-year plan 

performance period if emission performance is not met." Commenters noted that for smaller 

emissions reduction measures, such as the failure of a single energy efficiency program, or 

renewable energy project, a report-and-correct process could be timely enough due to the smaller 

scale; but if EPA views three percent as a threshold for accepting responsible parties beyond the 

reach of enforcement under the Clean Air Act, then at the scale of a nuclear generation plant, 

EPA should certainly appreciate the need for immediate implementation of corrective measures 

upon a failure to achieve the required level of emission performance. Commenters concluded 

that such contingencies could also have excessive costs. 

Commenters noted that EPA requested comment on whether to include an estimated amount of 

additional nuclear capacity whose construction is sufficiently likely to merit evaluation for 

potential inclusion in the goal-setting computation in the state goals (Proposed Rule 40 Fed. Reg. 

34871; June 18, 2014). Commenters remarked that increasing the generation capacity at existing 

nuclear plants, also known as "uprates," that occur after 2012 should not qualify as "new nuclear 

generation," and that uprates are not a new, innovative technology but are fairly commonplace in 

the industry. 

Commenters stated that by including uprates in the CPP, EPA may cause States to consider 

restarting cancelled and uneconomic nuclear energy projects as a compliance method. 

Commenters offered as example that Duke Energy Florida's now-closed Crystal River Unit 3 

reactor was shut down in September 2009 in order to perform necessary upgrades to allow for an 

uprate of the plant. Commenters stated that Duke ultimately decided that the project was so 

severely botched that it could not be salvaged, and consequently, Duke decided to close the 

reactor in February 2013. Commenters also noted that before closure of Crystal River Unit 3, 

approximately $1.3 billion was spent and Duke customers are on the hook for years to come. 

Commenters contended that if uprates are included as a compliance tool, the State of Florida 

might consider resurrecting this failed project, assuming that some amount of MWs could be 

available for compliance (original reactor was 860 MWe with an additional 130MWe expected 

from the now-failed uprate. Commenters concluded that expanding the jurisdiction of the Clean 

Air Act to incentivize nuclear energy projects could put pressure on the NRC to relax safety 

standards. Commenters recommended that EPA should carefully scrutinize the consequences of 

its decision to ensure that it does not unintentionally contest the NRC's regulatory authority. 

Commenters stated that EPA's BSER analysis does not provide meaningful credit for existing 

nuclear generation and excludes existing hydropower generation entirely. Commenters remarked 

that this lack of appropriate credit will have significant impact on States such as Arizona that 

generate a large percentage of their power from these zero-emission sources. 

Commenters stated that Alabamians are deeply troubled by the prospect that the EPA's proposal 

will further erode the primary role of the states in managing electricity generation and 
600 

determining the mix of energy sources that work best for them in their specific circumstances. 

Commenters submitted that in Alabama, electricity is generated from a range of sources, 

including nuclear, coal, natural gas, hydropower and renewables. Those decisions should not be 

dictated by EPA officials in Washington, D.C. Commenters further remarked that perhaps 

ironically, the EPA's chosen formula for establishing CO2 emission reduction targets 

disadvantages states with nuclear power, which is the nation's most significant source of 

emission-free electric generation. 

Commenters stated that nuclear power is expected to play a significant role in the future because 

it's a carbon-free fuel source. However, the commenters contended that there are many 

challenges in the licensing, siting, constructing and managing the risks of nuclear development. 

Commenters also stated that legislative support and federal oversight will be required to help 

overcome these development risks and increase the generation mix of this carbon-free source of 

electricity. 

Commenters stated that to replace the lost coal generation, EPA makes a series of unrealistic 

assumptions about the availability of replacement resources. Commenters remarked that all "at 

risk" nuclear would keep operating without any defined plan as to how that is to happen, and all 

under-construction new nuclear would be presumed to come on-line on time despite the long 

history of delays in nuclear construction. 

Commenters remarked that EPA modeled compliance with its proposal on the projection that "atrisk" nuclear facilities will not shut down. Yet, commenters stated, EPA does not say whether it 

considered the Department of Energy's permit for the Yucca Mountain nuclear Waste Repository 

facility as approved or denied, and EPA must provide more information on the effect the Yucca 

Mountain permit may have on EPA's model. 

Commenters stated that the plan predicts principal reliance on fossil fuels in 2030 with 30% coal 

& oil generators and 30% natural gas generators, while building a few new nuclear reactors and 

retaining existing nuclear reactors that are at the end of their useful lives, with unaddressed 

safety vulnerabilities identified post Fukushima. 

Commenters stated, in reference to expanding existing and under-construction nuclear, that in 

Step 1 EPA assumed that 6 percent of "at-risk" existing nuclear capacity would be retained and 

that all nuclear units currently under construction would be completed. Commenters remarked 

that EPA first assumed that all "at-risk" units would operate at a 90 percent capacity factor, and 

then it assumed that 6 percent of this "at-risk" generation would be retained. Commenters stated 

that EPA also assumed that the nuclear unit currently under construction at the Watts Bar facility 

would be completed and factored generation from that unit into the emission rate calculation, and 

EPA assumed that the unit would operate at a 90 percent capacity factor and added that 

generation into the denominator of the emission rate calculation. Commenters estimated that 

applying these assumptions results in a decrease from 1,798 lbs/MWh to 1,433 lbs/MWh, a 

reduction of 365 lbs/MWh. 

Commenters asserted that the cuts in heat-trapping emissions that the U.S. and the rest of the 

world need to make to limit the worst consequences of global warming are so large, and the need 

to take action is so urgent, that we need to consider all potential options for reducing emissions, 
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as described in their 2007 Nuclear Power in a Warming World report. Commenters contended 

that nuclear power does not produce carbon emissions during operation, and has relatively low 

lifecycle carbon emissions that are comparable to many renewable technologies; however, these 

benefits need to be weighed against the safety and security risks, the waste disposal challenges, 

and the water requirements of nuclear power. Commenters stated that the high cost and long lead 

time required for large-scale deployment of new nuclear plants must also be considered. 

Commenters suggested that other low- and zero-carbon technologies like energy efficiency and 

renewable energy have fewer risks, are already cost-effective in many places, and can be 

deployed more quickly at a large scale. 

Commenters is particularly concerned about the potential impacts of the rule's treatment of 

nuclear power on the safety and security of both operating nuclear plants and the five reactors 

currently under construction. While the commenters stated they understand that nuclear safety is 

not within the EPA's jurisdiction, the agency cannot ignore the potential indirect effects of the 

rule in providing incentives to keep "at risk" plants operating. Commenters remarked that an 

operating nuclear plant's "at risk" status depends on many factors, but one of them is the extent to 

which a plant's bottom line is affected by evolving safety and security requirements. 

Commenters stated that, for instance, the NRC increased security requirements after the 9/11 

attacks, but it is well known that the industry lobbied heavily to keep them to a minimum 

because of their cost; similarly, in the wake of the 2011 Fukushima accident, the industry has 

pushed back on certain proposed additional safety requirements such as filtered venting systems 

for boiling-water reactors. Commenters contended that the NRC has also waived certain postFukushima safety requirements for the AP1000 reactors now under construction based on a 

faulty assumption that those plants will be safer than current plants. Commenters suggested that 

the EPA needs some mechanism - perhaps through a memorandum of understanding with the 

NRC - to help ensure that in mitigating the risk of climate change it does not increase the risk of 

a catastrophic nuclear accident or terrorist attack. 

Commenters argued that the rule as proposed will be costly and difficult to implement and does 

little to preserve and capitalize on nuclear energy's carbon free qualities, because under Building 

Block #3, nuclear energy contributes about 90 million MWh, and this emission free generation 

contribution remains fixed throughout the compliance period. Commenters noted that, in 

contrast, the EPA assumes contribution from renewables and energy efficiency that increase 

every year throughout the compliance period. Commenters stated that overall, by 2030, 

renewables are credited with 525 million MWh of low carbon generation and energy efficiency 

about 425 million MWh equivalent low-carbon generation, as based on EPA's Technical Support 

Goal Computation Document. Commenters remarked that all-in-all, along with the nuclear 

energy contribution, the EPA calculates that these carbon-free sources taken together provide 

over 1 billion MWh, however, nuclear energy contribution amounts to no more than 8.6 percent. 

Commenters stated that a key portion of their transition plan to low-carbon energy production 

was extending the operating license of the Callaway Nuclear Energy Center. 

Comment 30: Commenters expressed their general support for nuclear power. 
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Response 30: EPA acknowledges the comments and details the provisions for nuclear 

generation in section V.A of the preamble which discusses the decision to exclude nuclear 

generation from BSER, section V.A of the preamble which discusses the treatment of new and 

uprated nuclear plants, and section VIII.K of the preamble which discusses the flexibility states 

have in developing state plans to address nuclear generation. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA has no leverage to reverse the planned closings of the at-risk 

nuclear generations. Commenters suggested that any realistic plan for carbon reduction needs to 

include more new generation from nuclear power. 

Commenters supported the use of nuclear power. 

Commenters supported nuclear energy to play a major role in future carbon emission reduction 

plans. Commenters stated that according to the analyses of the Energy Information 

Administration, Intergovernmental Panel on Climate Change, International Energy Agency and 

even EPA itself, meaningful carbon emission reductions cannot be achieved without preservation 

of existing nuclear assets and large-scale construction of new nuclear plants. 

Commenters provided general support to nuclear energy as an option for carbon emission 

reductions. 

Commenters stated that the Clean Power Plan should include nuclear energy as an integral and 

vigorous part of the overall clean energy portfolio that is to be relied on to achieve emission 

reduction rate goals, and that this proposed rule clearly falls short in this respect. 

Commenters stated that the EPA should revise its Proposed Clean Power Plan to provide 

stronger incentives fostering both existing and new nuclear plants. 

Commenters recommended that the final rule create the appropriate incentives to continue the 

operation of existing nuclear units. 

Commenters stated that the EPA needs to consider that nuclear energy delivers large amounts of 

reliable, economically competitive electricity with no carbon emissions during reactor 

operations, and has among the lowest life-cycle carbon emissions of any energy source. 

Commenters also stated that nuclear energy is the only energy technology with a proven 

capability of delivering large amounts of clean base-load electricity essential for the 

sustainability of modern industrial societies. Commenters asserted that any rule that is developed 

concerning limits of carbon emissions should be performance-based, technology neutral, and 

should not mandate a particular mix of energy sources or arbitrarily favor one source over 

another. Commenters recognized, however, that such legislation is not in the offing and that the 

EPA has set forth the proposed regulations to accomplish the goal of lowering greenhouse gas 

emissions in its absence. Commenters agrees with the position of the ANS that the proposed rule 

contains two major flaws that, unless corrected, would render the rule at best ineffective and at 

worst counterproductive to the goal of reducing power plant carbon emissions. Likewise, 

commenters also agreed with the two ANS recommendations that, if adopted, would rectify 
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some of the rule's shortcomings and provide an important incentive for preservation of the 

existing fleet of nuclear power reactors and the deployment of new nuclear generating capacity. 

Commenters agreed that Building Block 3 pertains to sources that are an important part of an 

overall strategy to reduce CO2, and that nuclear generation is a carbon free source like 

renewables. Commenters further stated that the rule should provide incentives for at least 70% 

existing nuclear generation as well as for nuclear generation that is under construction and 

recognize it as a compliance strategy for reaching state goals. Commenters asserted that early 

action investment in all low to no carbon sources, such as renewables and nuclear, should receive 

credit under this rule. 

Commenters stated that Idaho has long recognized that nuclear energy must be part of the 

solution for reducing carbon emissions, and that nuclear energy is America's largest source of 

low-carbon electricity. Commenters cited a study reporting that, in 2013, nuclear energy 

produced 19 percent of the U.S. electricity supply (789 billion kilowatt-hours) and prevented 589 

million metric tons of CO2 emissions. Commenters cited another reference, which stated that 

nuclear energy accounted for 63 percent of America's carbon-free electricity in 2013; three times 

more carbon-free electricity than hydropower and nearly five times more than wind energy. 

Another study cited by the commenters reported that without nuclear power plants operating in 

31 states, carbon emissions from the U.S. electric sector would be about 25 percent higher. 

Commenters further stated that analyses by mainstream, independent organizations, in the United 

States and around the world, show that reducing carbon emissions will require that nuclear 

energy must be part of the portfolio, and that major expansion of nuclear generating capacity 

over the next 15-30 years is advantageous. Commenters stated that, importantly, nuclear energy 

is a carbon-free electricity generating source that supplies stable, reliable and affordable 

electricity around the clock as needed, and that carbon emissions and electricity costs will 

increase unless nuclear generating capacity expands. Therefore, commenters asserted the Final 

Rule must give states flexibility to utilize existing and new nuclear units in an effective manner 

which includes granting all nuclear generation full credit towards compliance in carbon 

emissions reduction. 

Comment 31: Tribal and Territorial - Commenters expressed concerns regarding nuclear waste. 

Response 31: The EPA outlines in the Community and Environmental Justice Considerations 

section of the preamble, the actions that the agency is taking in this final rulemaking to help 

ensure that vulnerable communities are not disproportionately impacted by this rulemaking. 

Please see section IX and section XII.J for the agency’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters pointed out that EPA does not list nuclear energy as a renewable energy source at 

its State and Local Climate and Energy Program webpage, although it proposes the use of 

nuclear energy as a source having zero-carbon generation that can substitute energy from EGUs. 

Commenters expressed concerns with nuclear energy's continued use, specifically in light of the 

close proximity of FCPC tribal lands in northeastern Wisconsin to the Wolf River Batholith, one 
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of the two sites considered for storage of spent nuclear waste. Commenters mentioned that the 

Indian Tribes were concerned about transporting nuclear waste across and near their lands, and 

storing the nuclear waste at Yucca Mountain. Commenters recommended that EPA engage in a 

government-to-government consultation with Tribes and to include other federal agencies such 

as DOE, to discuss and address the prospective issues of transporting and/or storing nuclear 

waste across or near Tribal lands, and legacy waste. 

Commenters stated concerns related to transportation of nuclear waste across and near Indian 

Tribe lands, and storage of waste near or in those lands. 

Commenters stated that the NTAA strongly supports the use of renewable energy as a way to 

reduce carbon emissions. Commenters stated that EPA proposes the use of nuclear energy as a 

source having zero-carbon generation that can substitute energy from EGUs (Proposed Rule at 

34870). Commenters observed that the Proposed Rule indicates that five nuclear power plants 

are under construction and six others are near retirement which could realistically continue to 

operate (Proposed Rule at 34870). Commenters remarked that the NTAA does not have specific 

position on the use of nuclear energy as a renewable energy source; however, the commenters 

pointed out that EPA does not list nuclear energy as a renewable energy source at 

http://www.epa.gov/statelocalclimate/ local/topics/renewable.html. Commenters stated that their 

organization takes this opportunity to identify concerns with nuclear energy's continued use. 

Commenters noted that a few years back, the U.S. Department of Energy (DOE) convened a 

Transportation External Coordination (TEC) Working Group whose purpose was to "improve 

coordination with external groups interested in DOE transportation activities," largely related to 

the transportation of nuclear waste to a long-term nuclear waste storage site. Commenters stated 

that Indian Tribes were concerned about transporting nuclear waste across and near their lands, 

and storing the nuclear waste at Yucca Mountain, land culturally important to the Western 

Shoshone and Southern Paiute peoples. Commenters remarked that on more than one occasion, 

DOE representatives mentioned during TEC Working Group meetings that there were at least 56 

lawsuits pending against the federal government, filed by the owners and/or operators of nuclear 

energy facilities who had been promised their nuclear waste would be stored in a long-term 

storage site. Commenters contended that Congress cancelled federal government plans to use 

Yucca Mountain as a long-term nuclear waste storage site; however, a location for such storage 

remains necessary and will eventually occur. 

Comment 32: Commenters offered suggestions related to nuclear power plant shutdowns. 

Response 32: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. Please see section V.A of the preamble for further discussion of 

the treatment of new and uprated nuclear plants, and section VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2 

emission rate of an affected EGU. 
605 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the way existing at-risk nuclear plants are treated under the current rule 

does not encourage such plants to continue operating. Commenters pointed out that if these units 

shut down, this would result in significant increases in emissions as fossil units ramp up to make 

up for the lost generation. Commenters also mentioned that, to the extent that nuclear plants are 

not relicensed in the future, this would also have a significant impact on emissions and 

compliance. Commenters suggested to evaluate alternative approaches to treat nuclear 

generation. Commenters specifically suggested the EPA to consider allowing some portion of 

relicensed nuclear generation to meet compliance in addition to new nuclear power and nuclear 

uprates. Commenters also suggested that states should not be penalized for nuclear capacity that 

shuts down due to safety reasons. 

Commenters recommended that if a state chooses to include nuclear generation as an eligible 

action in compliance determination, the state's plan should address any anticipated shutdown of 

nuclear generation. Commenters stated that in case a state has a nuclear plant which closes 

unexpectedly, the state should be allowed to adjust its plan to account for the closure. 

Commenters stated that another flawed assumption undergirding EPA's analysis is that, if a 

reactor closes, it will necessarily be replaced by fossil-fuel generation. Commenters stated that 

EPA does not assume the same about the retirement of renewable energy resources during the 

compliance period, which could also be substantial, and this leads the Agency to ignore the total 

cost of offering incentives to preserve nuclear. Commenters suggested that a more sensible 

solution would be to recommend that states plan to replace retired Building Block 3 and 4 

resources with similar resources. Commenters stated that there will continue to be instances - 

like the San Onofre and Crystal River nuclear plants - where the cost of repairing reactors is far 

above what is reasonable for ratepayers to absorb or for merchant operators to invest, and states 

might have a hard time meeting the goals if they have planned on keeping old nuclear plants 

around forever and not begun preparing to accommodate renewables and demand-side 

management. Commenters suggested that a better investment of ratepayer dollars to prepare for 

such contingencies would be to begin investing in infrastructure to support renewables and 

distributed generation, such as transmission lines, smart-grid, electric vehicle charging stations 

and vehicle-to-grid connections. Commenters mentioned that the amount of nuclear capacity 

estimated to be at risk could easily be replaced by other low-carbon resources, such as wind, so 

there is no need to make a special case of preserving existing nuclear. Commenters stated that 

recommending that states collect a fee to plan for reactor closures and invest in renewable energy 

deployment, efficiency, and transmission system upgrades would be a more prudent hedge 

against the possibility of unannounced reactor closures. Commenters pointed out that such a 

provision need not apply only to nuclear; the rule should simply recognize the reality that low-

/zero-carbon resources will face retirements, along with nuclear and fossil fuel generation 

sources. 

Commenters quoted data from the Nuclear Energy Institute's report, and stated that the phase-out 

of some base-load capacity, without loss of reliability, is entirely feasible in many areas with low 

market prices, and would result in prices moderating upward to a level that would reduce 

economic pressure on the remaining plants. Commenters stated that such a dynamic could even 
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incentivize further growth in wind, efficiency, and other low-carbon resources that can compete 

effectively in a low-price environment. 

Commenters recommended that the EPA eliminate the 5.8% at-risk provision from state goals, 

but in the event that the EPA retains the 5.8% at-risk provision, the EPA should recognize the 

effects of the retirement of a nuclear unit at the end of its operational license on a state's goals. 

Commenters recommended that, if the at the at-risk nuclear provision is retained in the final 

goal-setting calculation, the EPA should allow states' goals to be adjusted upon expiration of 

nuclear plant operating licenses. To encourage the continued operation of existing nuclear plants, 

that commenters recommended that the EPA should allow states to claim compliance credit for 

nuclear plants that have their licenses renewed beyond 60 years. 

Commenters stated that in the first full compliance year of 2030, the youngest nuclear plants in 

the current fleet will be 50 years old. Commenters remarked that EPA requires state plans to 

include measures that are permanent and enforceable but keeping existing nuclear units fails both 

of those tests. Commenters contended that any effort to extend the lives of these units could not 

persist for more than a few decades. Commenters further stated that to the extent that states are 

penalized in any compliance period that sees less than 90% capacity factor from these nuclear 

units, they would have to be replaced by some other zero-emitting source. Commenters asserted 

this would provide a back-door for EPA to require additional renewable energy in the future and 

increase the stringency of the standard far beyond the extent claim to be adequately 

demonstrated. 

Commenters stated, in reference to the treatment of nuclear shutdowns, that continued operation 

of a nuclear plant is contingent on many factors that go well beyond economic consideration. 

Commenters noted that these include safety and local environmental considerations. 

Commenters recommended that if a state chooses to include nuclear generation as an eligible 

action in compliance determination, the state's plan should address any anticipated shutdown of 

nuclear generation. Commenters further recommends that in the event that a state has a nuclear 

plant that closes unexpectedly, the state should be allowed to adjust its plan to account for the 

closure. Commenters asserted that these recommendations would provide incentive for 

maintaining and developing nuclear power. 

Comment 33: Commenters stated the rule should consider shut-downs or failure to come on-line 

circumstances that could affect the assumption of the number of nuclear units covered by the 

rule. 

Response 33: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include either of the proposed provisions for existing and new nuclear units in the 

setting of state goals. Please see section V.A of the Preamble for further discussion of the 

decision to exclude existing and new nuclear power from BSER. Please see sections VIII.K.1 

and VIII.G.2 of the preamble for further discussion of the flexibility states have in developing 

state plans to ensure compliance, as well as, the requirement that states consider system 
607 

reliability in plan submittal. The final rule is not premised on any assumption regarding nuclear 

unit operation. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, in building block three, the EPA assumes that no "at-risk" nuclear 

energy power plants will be retired and that all units currently under construction will come 

online. Commenters stated that the EPA fails to consider the possibility that an economic or 

other operational circumstance might exist by which the unit owner or the NRC - the federal 

body with regulatory authority over nuclear units - might determine that a facility has reached 

the end of its useful life. Commenters concluded that the record is insufficient to support EPA's 

assumptions in building block three as it relates to nuclear units. 

Comment 34: Commenters enumerated reasons to exclude nuclear power from the Clean Power 

Plan. 

Response 34: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters stated Building blocks two to four, as proposed by the Agency are outside the fence 

line and the Agency does not have the expansive statutory authority to recognize them as BSER. 

Commenters also stated that Building Block 3 assumes that there will be no additional 

retirements of existing nuclear reactors, regardless of market conditions that may make it 

uneconomic for some nuclear units to run. 

Commenters stated in the rules, EPA states that nuclear power provides carbon-free generation. 

Commenters added that certainly, compared to coal, there are less CO2 emissions at the plant 

itself; but the mining, extensive processing, transportation of the fuel before it ever gets to the 

reactor is not emission-free by a long shot. Commenters said nuclear power emits 10 to 20 times 

more CO2 than, say, wind; further, climate disruption will keep nuclear plants from operating, as 

already witnessed in the TVA system. Commenters said when the water gets too warm in the 

summer, nuclear plants must shut down, and that has happened at Brown's Ferry. 

Commenters stated the plan states also that EPA doesn't want to count construction emissions for 

Watts Bar 2 in Tennessee, Vogtle 2 through 4 in Georgia, and Summer 2 and 3 in South 

Carolina, since they got permission to construct prior to this proposal; but they are not completed 

yet, and thus they will be contributing to carbon emissions when these rules go into effect. 

Commenters generally supported the proposed rule, however recommended changes to specific 

aspects of the rule: the proposed inclusion of new and preserved nuclear capacity is a substitute 
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for carbon intensive generating capacity does not adequately reflect the future life cycle 

greenhouse gas emissions of nuclear facilities. 

Commenters stated while wind generation has a consistently small greenhouse gas profile, the 

impact of nuclear facilities is dependent upon the uranium mining technologies used, the quality 

of the uranium ore, the enrichment method and the carbon intensity of the electricity used for 

enrichment. Commenters said the future quality of uranium ore in particular may degrade as 

higher quality mines are depleted, resulting in a greater processing and a higher emissions in the 

future from nuclear generation. Commenters said additionally, the cost of disposing of nuclear 

waste, as well as the cost associated with the potential of a nuclear accident needs to be taken 

into account when estimating the cost of reducing carbon emissions through increasing nuclear 

capacity. 

Commenters had great concern about nuclear plants; in Fukushima, there is a disaster ongoing; 

over 300 tons of nuclear radioactive water is being spilled in Pacific Ocean, and the nuclearcontaminated radiated water has now reached and has long now reached the California shore. 

Commenters stated the folks near the Fukushima Daiichi plant would certainly have a cautionary 

tale about increasing our reliance on nuclear energy; particularly given that a number of 

America's nuclear reactors are built on earthquake fault lines. 

Commenters stated the plan indicates the desire to increase the amount of available nuclear 

capacity by preserving existing nuclear EGU's that might otherwise be retired; the risk for 

accidents in nuclear plants increases as age increases. Commenters said these nuclear plants are 

all ready for retirement; no matter how much money it saves or how much finagling of how we 

count the CO2 emissions, saving old nuclear plants is not worth the risk. 

Commenters stated nuclear is not clean energy, but in the proposed rule, EPA acknowledges the 

worst issue with nuclear, and according to the history of nuclear, there are potential health 

hazards that, as an environmental health scientist, should be considered, so that we take 

precaution. Commenters said there is evidence that this may cause harm, and the precautionary 

principle says when you have evidence; you take precautionary measures, even if you can't prove 

it. 

Commenters stated EPA's proposed rule for reducing carbon dioxide emissions from existing 

electrical generating units is an important and historic step toward addressing climate change; 

however, EPA's support of nuclear power and under playing of the importance of renewables and 

efficiency is of serious concern. 

Commenters stated the EPA Clean Power Plan Proposed Rule supports building new nuclear 

reactors and maintaining existing reactors as an alternative to burning fossil fuels. 

Commenters stated the proposed rule encourages states to prevent even the most uncompetitive 

nuclear reactors from closing. 

Commenters stated the rule underestimates the advantage of renewable energy and energy 

efficiency as the best alternatives for reducing carbon emissions. Commenters said the rule 

should acknowledge that renewables and efficiency can produce the power we need without the 
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use of fossil fuels or nuclear power, and they can remove more carbon per dollar spent in a 

shorter time. 

Commenters stated numerous studies have shown that this transition needs only the political will 

to make it happen; new nuclear reactors cost billions of dollars and take many years to bring 

online. Commenters said renewable energy, and especially efficiency are much cheaper and 

their development is already underway. 

Commenters stated EPA incorrectly claims that nuclear power is reliable; this ignores the many 

times nuclear reactors have had to shut down for years due to warm water temperatures, flooding 

and extreme weather events, all of which will worsen as the climate warms. 

Commenters stated nuclear power is far from carbon free; fossil fuels are used for uranium 

mining, milling, processing, conversion enrichment, transportation and construction of reactors. 

Commenters said huge amounts of energy will be needed to isolate nuclear waste for millennia, a 

task which science so far has not been able to address. 

Commenters stated large amounts of water are also used to operate and cool the reactors; this 

water use can compete with other water needs in an era of increasing freshwater scarcity. 

Commenters stated EPA seriously minimizes the problem of radioactive waste; in fact, EPA 

erroneously contends that radioactive waste avoids the problem of waste from coal fired 

generation. Commenters said waste from coal is a serious problem, but radioactive waste is 

extremely dangerous and remains so for millions of years. 

Commenters stated EPA also ignores the routine radioactive releases at all reactors, and the 

several U.S. close calls to nuclear meltdown. 

Commenters stated that the first step toward dealing with nuclear waste and radioactive pollution 

is to stop generating it. 

Commenters stated they hope that EPA will not, by default, look at nuclear power or fracking as 

the mainstay of America's energy future. 

Commenters stated currently, EPA has out an advance notice for comments on environmental 

radiation protection standards for nuclear power operations. Commenters said unless the current 

radiation protection standards are strengthened, EPA will continue to have lower standards for 

protection from radioactivity than it has standards for protection from other pollutants. 

Commenters stated EPA's acceptable cancer risk is one in a million to one in ten thousand for 

other pollutants. The allowable limit for radioactive exposure is 25 milligrams per year. 

Commenters said if a person's life span is 70 years, that risk translates to one cancer per 500 

persons, which is as many 2000 more allowable cancers. 

Commenters stated don't want the EPA to lower those, certainly, they should raise those 

standards, and strongly approve of reducing carbon dioxide, but thinks inclusion of reactors as a 

solution is a mistake. 
610 

Commenters stated electricity is not some sort of elective utility service, but a human - an 

essential human rights service; have got to ensure that standards with universal service are 

prioritized, particularly for very low-income consumers. 

Commenters stated energy efficiency standards should be cost effective and demonstrate specific 

and verifiable energy savings. Commenters said rooftop solar requirements should be equitable; 

and the 6 percent credit for existing nuclear power plants should not be allowed to qualify for the 

state implementation plans because of the severe environmental and risks associated with nuclear 

power. 

Commenters stated nuclear energy also brings with it significant problems, not least is that there 

is no known way to safely dispose of spent fuel rods - not in Germany, not in Japan, not 

anywhere. Commenters said these highly radioactive rods will present major problems for future 

generations and would also prefer that we move away from the mining of uranium. 

Commenters stated, the proposed regulations have indicated that in certain instances or states 

nuclear power can be relied upon as a substitute for fossil fuel in order to restrict the release of 

greenhouse gases. Commenters opposed the use of nuclear reactors as a dangerous source of 

energy. Commenters said in western New York, as in many other parts of the United States, 

citizens are subject to unsafe and improper storage of radioactive material and waste; the mining 

or uranium itself subjects residents of all communities to the effects of radiation. 

Commenters stated remove nuclear power from the list of options; nuclear power is not 

renewable. Commenters said it produces carcinogenic wastes that can be spilled or released into 

the environment as we witnessed at Fukushima and at Chernobyl and at Three Mile Island; and 

those wastes remain lethal to human beings essentially forever. 

Commenters did not support nuclear energy as an option to reduce carbon dioxide emissions. 

Commenters stated the risks to human health, to communities, including the harmful extraction 

and abandoned uranium mines create negative impacts. Commenters said the inability to 

permanently disclose of high level radioactive waste creates harmful sacrifice areas. 

Commenters stated, the nation could most effectively cut our carbon dioxide emissions, and that 

is nuclear power. 

Commenters supported for research of thorium power. Commenters said right we use uranium as 

the main fuel and we have to dig far for it; it's about as rare as platinum and thorium is like 

something like 100 or a thousand times more abundant in the earth's crust; but there's nothing 

done in the United States about this technology. 

Commenters supported rules that make it more favorable for nuclear because they asserted it is 

truly the most green, sustainable, reliable, and carbon free resource we currently have. 

Commenters stated, third building block speaks to zero carbon fuel sources, which includes 

renewable energies and nuclear generation, yet it completely ignores the original emission free 

production of low cost hydroelectricity and hydroelectric generation. Commenters said with 

many nuclear reactors facing relicense, combined with the low price of natural gas, choosing to 
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close these emission free fuel sources would only increase our reliance on fuel force and also 

fossil fuel based generation. 

Commenters stated, with respect to nuclear energy, DES stresses the importance of setting 

standards that preserve nuclear and other options for fuel diversity and maintain grid reliability; 

however, they are unclear as to what actions their state might be expected to undertake in 

response to the proposed six percent allowance for nuclear plants considered to be at risk 

nationally. Commenters added, even the nuclear plants that remain operating, preserve fuel 

diversity and maintain grid reliability and are not emitting. 

Commenters stated the economic, ecological, and health costs of nuclear energy from cradle to 

grave are too costly; one aspect not addressed in the plan relates to the extraction of nuclear 

fuels. Commenters said some tribal nations have paid a great price. 

Commenters stated unfortunately, the draft rule also declares for the first time that nuclear power 

is a core element of the nation's climate policy; it pushes states to preserve old nuclear power 

plants, expand existing plants and subsidize nuclear power. Commenters said these pro-nuclear 

provisions could undermine the growth of renewable energy in these states and help keep open 

old polluting coal-fired power plants. 

Commenters stated the nuclear industry is looking to gain carbon credits; these carbon credits are 

undeserved. Commenters said but in any case, the industry is asking for carbon credits for 

nuclear power; these very credits will allow the industry to burn more coal. 

Commenters stated that nuclear power in general should be excluded as a means of complying 

with the Clean Power Plan. 

Commenters expressed support for increasing the efficiency of all forms of energy use, and 

reducing fossil fuel consumption by replacing it with "clean sustainable energy sources." 

Commenters then advocating excluding nuclear energy as an alternative to be encouraged, due to 

the problems of "nuclear waste storage, the pollution from uranium mining, and the immense 

water usage of nuclear plants." 

Commenters added the nuclear industry's inability to operate without government subsidies has 

been a continuing issue. Commenters said fossil fuels are finite and renewable energy is infinite; 

in fact, 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 stated that Building Block 3 has questionable assumptions: Building block three 

assumes that no units in the entire fleet of nuclear plants will retire regardless of market 

conditions; as for renewables, EPA assumes their rapid growth despite their intermittency 

making it progressively hard to balance load and run base load plants effectively. 

Commenters stated that the EPA's Clean Power Plan pressures states to ensure that reactors now 

being built are completed, no matter what the cost, and by encouraging the states to subsidize 

existing reactors to prevent uncompetitive ones from closing. Commenters stated that EPA must 

abandon subsidies and incentives for nuclear power, and should instead require reactors that 
612 

close are replaced with sustainable energy resources including renewables, efficiency, and 

energy storage. 

Commenters stated, as proposed, the rule includes unnecessary and counterproductive support 

for nuclear power for existing, aging, uneconomical reactors, as well as for construction of new 

reactors, which they oppose. 

Commenters could not support development of more nuclear power plants due to the problem of 

nuclear wastes. 

Commenters stated that nuclear power may be low in carbon emissions, but it is not clean due to 

radiation and water consumption. Commenters recommended that the EPA abandon incentives 

and subsidies for nuclear power and focus on renewable energy. 

Commenters stated that reduction targets should net be met through increased dependency on 

natural gas or "other dangerous and costly sources like nuclear power." Commenters 

recommended that the EPA should increase "its efficiency targets and renewable projections and 

urge states to prioritize these compliance methods." 

Commenters requested that support for nuclear energy be deleted from the Clean Power Plan 

because the comment stated that nuclear power is uneconomic and that sufficient power is 

available through sunshine and wind. Commenters also stated that the life cycle for both carbon 

emissions and other toxic and radioactive substances were significant. Commenters concluded by 

recommending that uranium should stay underground. 

Commenters recommended that the EPA should not use nuclear energy as a strategy for reducing 

use of fossil fuels. 

Commenters recommended that nuclear power incentives should be cut. Commenters stated that 

the rule pushes to preserve, expand and subsidize nuclear reactors, but there are safety risks with 

aging reactors. Commenters recommended that nuclear reactors should be phased out and 

replaced with renewable energy. 

Commenters stated that Fukushima showed the risks of nuclear generation facilities. 

Commenters also cited aging of nuclear facilities and long-term nuclear waste storage problems 

as arguments against encouraging nuclear facilities as backups for coal-powered electrical 

generation. 

Commenters stated that the EPA considered nuclear power to be an acceptable alternative to 

fossil-fueled electrical generation, but the commenters disagreed. Commenters stated that the 

EPA has not done a proper risk assessment in making the decision to promote nuclear power in 

implementation plans. 

Commenters recommended removing all support for nuclear power from the final version of the 

Clean Power Plan. Commenters stated that nuclear power is not clean, safe, or inexpensive. 

Commenters stated that significant amounts of radioactive waste were generated from uranium 

mining, routine operations, and 80,000 tons of radioactive waste that that no one knows how to 
613 

safely store for the thousands of years it will remain dangerous to human health and the 

environment. 

Commenters stated that reactors were most dangerous at the beginning and end of their life 

cycles, which concerned people within the 10- and 15-mile radius of these sites. Commenters 

also expressed concern about cooling water for reactors. 

Commenters stated that support for nuclear power undermines the growth of the renewable 

energy sector, including solar and wind energy. Commenters also stated that, if nuclear is a part 

of state cap-and-trade programs, then being able to sort of trade credits from nuclear power with 

coal-fired plants would also undermine the imminent closure of coal-fired plants. 

Commenters expressed concern about the effects of heat discharged from reactors warming 

nearby waters, particularly the effect of Plant Vogtle on the Savannah River. 

Comment 35: Public commenters opposed inclusion of nuclear power in the Clean Power Plan. 

Response 35: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested to remove nuclear power from consideration due to its environmental 

impacts and risks. Commenters recommended the EPA to consider the impacts of preservation of 

old reactors, which were not addressed in the draft rule. Commenters also stated that 

incentivizing the preservation of a generic 5.8% of current U.S. nuclear capacity will result in a 

windfall profit for reactors not currently at risk for retirement. 

Commenters opposed include nuclear energy in the energy plan, since it is expensive, dangerous 

and not clean. Commenters also mentioned that we do not have appropriate plans for evacuation 

of cities in the event of a serious accident. 

Commenters opposed the use of nuclear energy, and also mentioned concerns about treatment of 

nuclear wastes. 

Commenters opposed the use of nuclear energy due to its risks. 

Commenters opposed the use of nuclear energy due to the problems of disposing nuclear 

materials. 

Commenters opposed nuclear power due to safety and cost considerations. 
614 

Commenters opposed the use of nuclear power based on the past experiences and incidents in 

foreign countries like Germany and Japan. Commenters suggested to invest in solar, wind and 

other genuinely clean energy sources. 

Commenters opposed the use of nuclear energy as it is one of the most uneconomical energy 

sources. 

Commenters stated that, according to the draft rule, if the states follow the EPA's lead in dealing 

with nuclear compared to other non-carbon resources, they would unnecessarily raise the cost of 

carbon abatement. Commenters suggested that the EPA should correct these mistakes in 

promulgating the final rule, which would help the states avoid those same mistakes. Commenters 

stated that states can and should implement least cost carbon reduction programs based on a 

more rigorous analysis of the evolving economics of low carbon resources and the emerging 21st 

century electricity system. Commenters also stated that the EPA can and should advance the 

Clean Power Rule toward this goal by making several changes in its analysis of the proposed 

standard, including correcting its analysis to render it internally consistent and reflective of 

current costs and cost trends, taking a technology neutral approach and expunging all reference 

to subsidization of nuclear power. 

Commenters stated to avoid premature retirement of nuclear EGUs. 

Commenters stated, in a discussion of environmental impact and sustainability that once one 

moves into the broader realm of non-economic goals of the electricity system nuclear power 

fares very poorly. Commenters remarked that nuclear power has significant disadvantages in 

terms of security, proliferation risks] and continues to suffer from unique environmental 

problems. 

Commenters contended that based on a non-commodity, local source of power, renewables have 

a large advantage in macroeconomic impacts. Commenters stated that as a result, in multiattribute rankings and evaluations, the main renewables (wind, solar, hydro) and efficiency are 

much more highly rated and have consistently been so for decades. Commenters provided the 

results of evaluations of energy resources that were plotted graphically as compared to coal. 

One graph showed the average ranking of resources based on studies that generally took place 

before the focus on climate change became prominent, a second graph plotted those earlier 

results against a recent ranking, plus a plot of energy efficiency also using rankings from those 

earlier studies. 

Commenters stated that the summary of several evaluations of energy resources showed a sharp 

and readily apparent break, with strong statistic correlation (r = 0.86), between ranking for 

efficiency and renewables (as attractive resources) and conventional (i.e., fossil fuels and 

nuclear) energy sources in both sets of rankings. 

Commenters observed that evaluation of each technology was based on the application of four 

primary criteria: 

• Financial (FC): financial value of the technology and return on investment. 
615 

• Technical (TC): characteristics of the technology as a power source and its 

production capabilities. 

• Environmental (EN): impact of power plant on local and regional environment, as 

well as human health. 

• Social/Economic/Political (SEP): impact on local economy and communities, as 

well as congruence with over all national policies. 

Commenters stated that the results indicate that wind, solar, hydropower and geothermal provide 

significantly more overall benefits than the rest even when the weights of the primary criteria 

clusters are adjusted during sensitivity analysis. Commenters observed that the only nonrenewable sources that appear in three of the 20 top rank positions are gas and oil, while the rest 

are populated with renewable energy technologies. Commenters remarked that these results have 

implications for policy development and for decision makers in the public and private sectors. 

Commenters stated that one conclusion is that financial incentives for solar, wind, hydropower 

and geothermal are sound and should be expanded. Conversely, commenters stated subsidies for 

non-renewable sources could be diminished. 

Commenters observed that an analysis of New England, in the examination of risk discussed 

above, showed that the resources mix was similar in the analysis of the base case and the zero 

carbon case. Commenters stated this discussion of factors other than the levelized cost suggests 

that on every dimension - risk related characteristics, non-energy, economic impacts, and noncarbon environmental impacts - efficiency and renewable energy technologies are the preferred 

option.. Commenters added efficiency, wind and solar are the most attractive options by far 

relative to environmental and health impacts, and that fossil fuels become less attractive. 

Commenters also added nuclear power is barely competitive with fossil fuels with carbon 

capture and storage. Commenters stated that, in addition, the same point is made by showing the 

correlation between resources costs and external costs, and including all of the non-carbon 

externalities associated with these resources strongly reinforces the case for building a low 

carbon sector on the basis of efficiency and renewable energy technologies. 

Commenters stated that the analysis externalities has not only expanded in recent years to the 

broader issue of sustainability, but it has also begun to look at important interactions between 

climate change and non-carbon externalities, like heat waves and water use. 

Commenters stated that the analysis of integrating much higher levels of wind and solar has 

progressed to utility sponsored detailed studies of the impact and necessary changes in the grid. 

Commenters referenced a study conducted for PJM members, which included only one of the 

many measures identified above to improve grid management - i.e. geographic diversity of 

renewables, which is a natural occurrence if high levels of renewables are pursued, since the 

resource is generally dispersed - found that 30% penetration of renewables is easily manageable. 

Commenters stated that the analysis of the potential transformation has progressed to modeling 

how to build a sector that captures the synergies of utilization of geographically diverse and 

widespread renewables, combined with key infrastructure components of transmission and the 

tradeoff with storage and demand response to lower cost and meet demand. Commenters stated 
616 

further that, in fact, some have argued that the benefits of stimulating innovation are so large that 

they can even offset the apparent "cost" of phasing out nuclear power altogether. 

Commenters stated that their analysis results show that phasing out nuclear power would 

stimulate investment in R&D and deployment of infant technologies with large learning 

potentials. Commenters contended that this could bring about economic benefits, given the under 

provision of innovation due to market failures related to both inter-temporal and international 

externalities. 

Commenters remarked that the evolution of the renewables costs in the coming years will not be 

independent of the future of nuclear power, as well as of energy and climate policies. 

Commenters stated that in this context of uncertainty, policymakers need to understand the 

economic consequences of nuclear power scenarios when accounting for its interplay with 

innovation and cost reduction in renewables. 

Commenters stated that it is of utmost importance at this moment that the legitimate challenges 

of building these institutions are not exacerbated by the opposition of powerful incumbents. 

Commenters remarked that the institutional changes are direct challenges to the structure on 

which nuclear power and other incumbents depend, and open resources acquisition, economic 

dispatch and net metering dramatically reduce the rents available to fund nuclear construction 

and sustain its high capital costs. Commenters stated that the two-way, information intensive 

system that allows integration and management of supply-side and demand side resources 

involves an entirely different set of skills and assets that are irrelevant, even, antithetical, to 

nuclear resources. Commenters concluded that, indeed, they replace central station generation. 

Commenters stated further that the baseload dominated electricity system was created by policy 

support and subsidies for physical and institutional infrastructure that favored a specific type of 

technology. Commenters contended that the dominant incumbents will seek to slow or stop the 

spread of alternatives to defend what amounts to trillions of dollars of investment and assets sunk 

into fossil fuels. 

Commenters stated that their diffusion can be slowed by effects of path dependence and lock-in 

of earlier technology systems' high carbon technologies and supporting institutional rule systems 

have co-evolved, leading to the current state of "carbon lock-in". Commenters also stated that, 

for example, reductions in cost and the spread of infra- structure supporting coal- and gas-fired 

electricity generation enabled the diffusion of electricity-using devices and the creation of 

institutions, such as cost-plus regulation, which encouraged further investment in high carbon 

generation and networks. Commenters contended that this created systemic barriers to 

investment in low carbon energy technologies ... the proposition that industries or technologies 

whose ascendancy is threatened by new competition tend to respond, carries some weight; and 

further it also suggests that actors, such as large energy companies, with substantial investments 

in the current system and its technologies, and relatively strong political influence, are likely to 

act to frustrate the implementation of institutional changes that would support the 

implementation of low carbon technologies. 

Commenters contended that the conflict between nuclear technologies and the alternatives is 

inevitable and crucially important to determining the future path of the electricity sector. 
617 

Commenters stated that there are fundamental economic, technological, and institutional 

incompatibilities between the two approaches, which have given rise to a frontal assault by 

nuclear advocates on the alternative resources and institutions that will support them. 

Commenters stated that nuclear power is the least attractive asset, followed by the fossil fuels. 

Commenters also stated that to defend itself from the growth of superior alternatives, nuclear 

utilities and advocates have launched an all-out attack on policies that create opportunities for the 

alternatives. 

Commenters stated that UBS put it succinctly, "Large-scale power generation, however, will be 

the dinosaur of the future energy system: Too big, too inflexible, not even relevant for backup 

power in the long run." Lovins elaborates: "All of the above" scenarios are "undesirable for 

several reasons" 

1. Central thermal plants are too inflexible to play well with variable renewables, and their 

market prices and profits drop as renewables gain market share. 

2. If resources can compete fairly at all scales, some and perhaps much, of the transmission 

built for a centralized vision of the future grid could quickly become superfluous. 

3. Big, slow, lumpy costly investments can erode utilities' and other provider's financial 

stability, while small, fast granular investments can enhance it. Competition between 

those two kinds of investments can turn people trying to recover the former investments 

into foes of the latter - and threaten big-plant owners' financial stability. 

4. Renewable, and especially distributed renewable, futures require very different regulatory 

structures and business models. 

5. Supply costs aren't independent of the scale of deployment, so PV systems installed in 

Germany in 2010 cost about 56-67% less than comparable U.S. systems, despite access to 

the same modules and other technologies at the same global prices. 

Commenters remarked that there is thus a fundamental choice to be made about the structure of 

the electricity sector in the 21st century. Commenters stated that given the economic plight of 

nuclear power, the push to adopt policies that will force it into the low carbon resource portfolio 

is essentially an effort to resist the underlying economics and jerry-rig the outcome in favor of 

nuclear by negating or slowing the evolution toward more decentralized resources. Commenters 

contended that it is no longer a question of just subsidizing nuclear, although huge subsidies 

would be necessary to preserve it. Commenters stated that nuclear advocates have launched a 

frontal attack on the alternatives to slow or prevent the installation of a new utility model. 

Commenters stated that the potential contribution of the non-nuclear low carbon alternatives, 

which are less costly and more environmentally benign, has only begun to be exploited and the 

prospects are quite good. Commenters contended that the prudent approach to resource 

acquisition is to build the institutional and physical infrastructure that achieves the maximum 

contribution from the more attractive resources available in the near and mid-term. 
618 

Commenters stated that dealing with a potentially fundamental change requires a broader 

perspective on potential benefits, as well as challenges. Commenters suggested that the 

replacement of the incumbent fossil-fuel based regime with the distributed approach constitutes a 

major change that challenges the incrementalist, marginal analysis of traditional cost-benefit 

analysis. Commenters concluded that a wide range of opportunities is opened that can change the 

game primarily by eliminating the wall between supply and demand behind which the 20th 

century baseload model was built including - the interrelationship of battery powered vehicles 

and the electricity grid, the smart grid, the Internet of things, and multiple roles for solar power. 

Commenters stated that over the past 5 years their analysis has shown that even with massive 

new subsidies in the first decade of the 21st century, "nuclear renaissance" technology was an 

abysmal failure, unable to compete with the available alternatives. Commenters remarked that it 

is too big to properly meet demand, too expensive to compete on cost, takes so long to build, it 

creates significant marketplace risk, and requires so much sunk capital that it causes severe 

financial risk. Commenters stated that, recognizing that the "renaissance" technology is 

uneconomic, over 90% of the projects that were contemplated using the "nuclear renaissance" 

technology in the U.S. were cancelled or mothballed. Commenters observed that the projects that 

have moved forward are behind schedule and over budget. 

Commenters stated that over the past 5 years their analysis has shown that even with massive 

new subsidies in the first decade of the 21st century "nuclear renaissance" technology was an 

abysmal failure, unable to compete with the available alternatives. Commenters remarked that it 

is too big to properly meet demand, too expensive to compete on cost, takes so long to build it 

creates significant marketplace risk, and requires so much sunk capital that it causes severe 

financial risk. Commenters observed that recognizing that the "renaissance" technology is 

uneconomic, over 90% of the projects that were contemplated using the "nuclear renaissance" 

technology in the U.S. were cancelled or mothballed. Commenters stated that the projects that 

have moved forward are behind schedule and over budget. 

Commenters remarked that faced with utter failure, the nuclear industry shifted its hope and hype 

to small modular reactor (SMR) technologies, but we have shown that this technology does not 

solve the fundamental economic problems of nuclear power. Commenters stated that SNR 

technologies remain much more costly than the alternatives and, while they are more attractive 

than large nuclear reactors on some of the other important economic characteristics, SNRs do not 

come close to being more attractive than the other alternatives available. 

Commenters suggested that the rapid and stunning reversal of fortune suffered by SMR 

technology before it even got off of the drawing board is emblematic of the 50 year history of 

commercial nuclear power in the U.S. and underscores the folly of relying on nuclear power as 

one of the pillar on which the decarbonization of the electricity sector stands. Commenters stated 

that historical experience and contemporary economics strongly support the conclusion that 

nuclear power will fail to deliver on its promises leaving a costly hole in the decarbonization 

undertaking. 

Commenters stated that Babcock & Wilcox (B&W), one of the firms that had received a federal 

subsidy for SMR development, stepped back from the development of SMR technology because 

of the failure "to secure significant additional investors or customer engineering, procurement, 
619 

and construction contracts to provide the financial support necessary to develop and deploy 

mPower reactors," and the company declared that it "still expects to license mPower reactor by 

the mid-2020s." 

Commenters stated that the issue, B&W insists, is that the market for small reactors is likely to 

be about three to five years further out than B&W anticipated when it started the program in 

2009. 

Commenters stated that is because... the growth in demand for electricity remains weak, and may 

even flatten out over the next few years ...combine that fact with the low cost of natural gas 

plants in the current market, and he estimates the market for mPower has been pushed back three 

to five years. Commenters concluded that makes it hard to justify significant investment now. 

Commenters observed that now the company is looking at slowing investment and waiting until 

the market catches up with the technology. 

Commenters stated that Westinghouse, another of the leading U.S. developers of small modular 

technology and the vendor supplying the design for the large nuclear projects under construction 

in the U.S., also announced it was stepping back from development of small modular nuclear 

technology. Commenters stated the reason for the decision: Westinghouse could find no 

customers. Commenters observed that instead of pushing ahead to build SMRs, Westinghouse 

said it would focus on decommissioning of existing reactors. Commenters stated that the retreat 

came even though its utility partner, Ameren had convinced the state of Missouri to spend $40 

million supporting the technology. 

Commenters noted that Westinghouse used language that is similar to the Babcock and Wilcox 

explanation, not only in blaming cheap gas, but also in declaring that it did not want "to get 

ahead of the market." Commenters remarked that in the case of Westinghouse, their caution was 

tied to the failure to find orders for its AP600, a medium sized reactor that had been licensed 

fifteen years earlier and its claim that it needed a large book of orders, 30-50 reactors (7 to 10 

GW given its design). Commenters observed that Westinghouse had spent close to a decade 

propounding a theory of economic competitiveness that had become gospel among nuclear 

advocates, yet, in stepping back it was clear that they "had no way to calculate the cost" and 

much larger subsidies would be necessary to move the technology forward. 

Commenters stated that the declarations of confidence in the technology could not hide the fact 

that in less than a decade its development was - grinding to a halt. Commenters noted that the 

collapse of the SMR hype is extremely important in the policy context. Commenters contended 

that the failure of SMR technology makes it impossible to ignore the huge scale that nuclear 

power demands to succeed, and shifting that need up in the supply chain to a manufacturing 

facility does not eliminate its importance. Commenters observed that the problem that utilities 

have in swinging the financing and development of large reactors is replaced by the even bigger 

problem that vendors have, but it is essentially the same problem. Commenters stated that 

Westinghouse and B&W are big names in the nuclear space, had thrown a great deal of weight 

and money into advancing SMRs as the next big thing and the savior of the nuclear industry, but 

they failed. 
620 

Commenters stated that the market recognizes what the nuclear advocates and the EPA continue 

to ignore, and that is blaming cheap gas and a temporary slump in demand ignores the 

fundamental changes in the electricity sector. Commenters contended that a comprehensive view 

that includes all of the emerging alternatives and the history of nuclear technology and cost 

escalation explains why nuclear technology, large or small, cannot find either customers or 

investors today and suggests that the market will not "catch up" any time soon. Commenters 

concluded that the failure to find customers and investors is the ultimate rejection in a capitalist 

economy, and the only way to save the failed technology is to blame the market. 

Commenters stated that ignoring the cost of constructing new reactors (because the decision to 

build has been made), as suggested by the EPA is incorrect because the costs have not yet been 

sunk, and the incremental or "to go" cost are substantial. Commenters suggested that the "to go" 

costs of those nuclear reactors can be avoided; and moreover, all of the reactors under 

construction are well behind schedule and over budget. Commenters also stated that further 

slippage and cost over runs are a distinct possibility. 

Commenters stated that sound economic analysis and prudent resource acquisition require the 

responsible authorities to continuously evaluate ongoing projects. Commenters noted that in a 

competitive market economy, decisions to invest must be constantly revisited. Commenters also 

remarked that if the cost of the project rises or costs for alternative projects fall sufficiently to 

make continuing on the chosen path uneconomic, the project should be abandoned. 

Commenters stated that in South Carolina, their analysis showed that continuing to build the 

summer reactors would cost ratepayers $10 billion more than terminating the project, and in that 

analysis, the comparison was with natural gas because that was the referent that the utility had, 

incorrectly, selected. Commenters remarked that if the full range alternatives were considered in 

making the decision to continue construction, the waste of resources would be even greater. 

Commenters stated that, In fact, the initial decision to commence construction of the reactors was 

fundamentally flawed because it did not consider the full range of alternatives. Commenters 

suggested that the EPA should not be rewarding such economically flawed analysis and decision 

making. Commenters stated that under the principle of allowing the states flexibility, it is their 

prerogative to impose uneconomic costs on their ratepayers, but the EPA should not be 

encouraging such behavior. Commenters suggested that, if anything, the EPA should state a 

strong preference for least cost solutions under the proposition that the lower the cost of carbon 

abatement, the greater the reduction is likely to be. 

Commenters stated that given the high and uncertain cost of nuclear reactor construction, nuclear 

advocates who could not project what it would actually cost to build "renaissance" reactors, put 

forward "break even analyses; that is, they calculated how much nuclear reactors would have to 

cost to beat natural gas. Commenters stated, they have shown that those initial analyses were 

riddled with analytic flaws and erroneous assumptions, and the utility calculations continue to be 

plagues by flaws, as they showed in demonstrating that the "to go" costs in South Carolina are 

far higher than cancelling the reactor would be. Commenters stated that two recent studies of 

nuclear construction reaffirm that finding. 
621 

Commenters cited the results of a generic study of U.S. nuclear costs compared to natural gas, 

prepared in 2013 by Hogue, that presents seven cases where he selects high and low values for 

the key variables from an underlying analysis of a wide range of possibilities. Commenters stated 

these involve the author's judgment about which scenarios are plausible from within a much 

wider array of possible outcomes, and involved a range of assumptions on construction costs, 

fuel costs and CO2 costs. Commenters also cited other outcomes for three other variables that 

Hogue analyzed - load factor, plant life and the cost of capital, but did not specify high and low 

cases. Commenters stated that gas is lower in cost in just under 90% of the scenarios, and its 

costs advantage in those scenarios is just over $38/MWH. Commenters noted that in contrast, 

nuclear is less costly in just over 10% of the scenarios and its cost advantage is less than half that

- just over $16/MWH. Commenters observed that natural gas is a much more attractive option. 

Commenters concluded that since efficiency, wind and solar with the cost trend have an 

advantage over gas that is larger than $16/MWH, it is safe to conclude that nuclear is never less 

costly. 

Commenters stated that the results of an even more recent "break even" analysis support this 

conclusion, and the study used eight cost factors and two scenarios, one that was more favorable 

to nuclear (optimistic) and one that was less favorable (pessimistic) to create cost comparisons. 

Commenters stated that compared to Lazard's estimate, nuclear is never preferred. Commenters 

explained that the study also uses Lazard costs to identify the break even against a portfolio 

made up of efficiency, wind and solar; and against that low carbon, non-fossil fuel portfolio, 

nuclear is two to three times as costly. Commenters concluded that with such a severe cost 

disadvantage, one can argue that new nuclear reactors do not belong in a Best System of 

Emission Reductions. 

Commenters stated that over the course of the past decade, as the "nuclear renaissance" was 

collapsing, aging nuclear reactors also began to encounter serious economic problems. 

Commenters remarked that operating costs were increasing with age, while the construction and 

operating costs of the alternatives were declining rapidly. Commenters suggested that the 

abandonment of five aging nuclear reactors signaled another turning point in the industry. 

Commenters concluded that wherever market forces are allowed to set the price of electricity, 

small, aging reactors cannot compete. Commenters further stated that these reactors are losing 

money and their owners are contemplating shutting them down before their licenses expire. 

Commenters, in text referred to as a discussion of unjustified and misguided subsidies, stated that 

nuclear power is the only technology that the EPA explicitly identifies as being in need of a 

subsidy and puts forward a concrete proposal. Commenters stated that the EPA argues that a 

$6/MWH subsidy would keep aging nuclear reactors, which are not covering their costs, online 

as low carbon resources; however, the analysis is incorrect at a number of levels: 

1. The operating costs of aging reactors are substantial and growing rapidly. The shortfall is 

dependent on market conditions, which are moving in a direction that suggests the 

shortfall will continue to increase. If one compares the full cost of keeping aging reactors 

online to the full cost of the alternatives, it is not at all clear that subsidizing nuclear is 

cost effective. 
622 

2. Even if subsidizing ageing reactors was a sound economic recommendation, which it is 

not, the EPA's analysis makes no sense. Its proposal is based on the assumption that the 

risk of closure is randomly distributed throughout the nuclear fleet. It is not; the risk is 

concentrated in specific types of reactors (small, single units) in specific markets (pure 

wholesale markets). As a result the vast majority of the subsidy (94%) suggested by EPA 

is targeted at reactors that are not at risk. 

3. The fact that EPA has singled out aging nuclear reactors as a potential target of additional 

subsidies not only violates the principle of technological neutrality, it also violates the 

principle of least cost in in several respects. 

Commenters stated that the resource cost estimates for efficiency, wind and in the mid-term 

solar, suggest that these alternatives are lower in cost than operating reactors. Commenters 

further stated that, moreover, there is no doubt that the potential contribution of these resources 

could easily offset the loss of low carbon output that might be lost as a result of the retirement of 

vulnerable aging reactors. Commenters contended that taking all costs into account, on a 

megawatt hour basis, the cost of keeping the at-risk reactors online is much higher than 

$6/MWH. Commenters also suggested that the burden of the subsidy would fall on the individual 

states where the reactors are located and would be much heavier than suggested by EPA. 

Commenters remarked that the social rate of return to subsidies has been much higher for 

renewables than for nuclear power both in terms of price, as shown above, and in terms of 

innovation. Commenters concluded that if subsidies are necessary to improve prospects for 

carbon reduction, the last place they should go is to nuclear power. 

Commenters stated that the EPA relied on the statement in the EIA annual outlook that reactors 

with 5.7 GW of capacity are at risk of closing, which happens to equal 6% of current capacity. 

Commenters contended that the EIA was clearly referring to specific reactors, but the EIA 

assumed 6% of capacity is at risk in every state, which makes no sense. Commenters remarked 

that a part of a reactor cannot be at risk, and the risk factors attach to specific reactors in specific 

market conditions; the commenters provided a table showing retirement risk factors of the 

nuclear fleet. Commenters further stated that the reactors identified by utilities as at risk are 

listed in the table but there are about two dozen more. 

Commenters noted that, in fact, EIA has an accelerated retirement scenario in which it not only 

assumes the 5.7 GW of at risk capacity is retired, but another 38GW of nuclear capacity is retired 

by 2040. Commenters stated that the list of reactors compiled by the commenters covered just 

over 50GW of nuclear capacity that is vulnerable to early retirement based primarily on 

economic grounds, compared to the EIA total of 44GW by 2040. Commenters stated three 

factors that clearly establish the vulnerability to closure - merchant state (38GW), old (25GW) 

and standalone (24GW), and the reactors on the list with two or more of these characteristics 

have 34GW of capacity. 

Commenters stated that if the electricity sector "lost" 34 GW of existing nuclear capacity and the 

reactors under construction were abandoned, as they should be on economic grounds, the 

reduction in low carbon resources would be easily replaced by efficiency and renewable energy 

sources at a much lower cost. 
623 

Commenters remarked that in the analysis of the potential impact of reduced nuclear output on 

carbon emissions modeled, it was assumed that all of the at-risk reactor were retired and half of 

the additional capacity that was retired in the accelerated nuclear strategy, which ran until 2040, 

was retired by 2030. Commenters concluded that there is four times as much potential carbon 

reduction from efficiency and renewable energy sources that is left on the table by the EPA 

standard than would be lost if this generation capacity were lost. 

Commenters stated that the decision to begin the process of decarbonizing the electricity sector 

does not change the abysmal economics of aging nuclear power one iota. Commenters stated that 

nuclear power cannot compete with a bevy of low carbon alternatives, especially in the time 

frame in which the Clean Power Rule will be in effect. Commenters remarked that the 

internalization of the social cost of carbon improves the prospect of all low cost alternatives as 

much as it helps nuclear power. Commenters contended that EPA's mishandling of the nuclear 

analysis goes even farther. Commenters stated that even if EPA could show that a subsidy for 

aging nuclear power is necessary to achieve the carbon reduction goal, it has bungled the 

analysis of how big the subsidy should be and how it should be distributed. 

Therefore, the commenters concluded, EPA's suggestion that nuclear power be singled out for a 

subsidy is fundamentally incorrect. Commenters stated that policies to accelerate the deployment 

of lower cost alternatives would be economically superior, and only if EPA concluded that the 

abandonment of nuclear power would be so pervasive that the alternatives could not meet the 

goals set by EPA might there be a justification for a nuclear subsidy. Commenters contended that 

in fact, EPA has made no such showing and as they have shown in an analysis of efficiency and 

renewable energies, there is not one shred of evidence presented to suggest that it could. 

Commenters stated that rather than try to repair the subsidy approach, the EPA should get out of 

the business of favoring specific technologies and be technology neutral, and if the EPA wants to 

get into the business of recommending subsidies for specific technologies, it should look at real 

world experience. 

Commenters stated that with a clear path of more attractive resources, we do not have to engage 

in the hundred year debate today, although there is growing evidence that prospects for high 

penetration renewable scenarios for the long terms are quite good. Commenters remarked that 

the available and emerging alternatives can certainly carry the effort to meet the demand for 

electricity with low carbon resources a long way down the road, well beyond the time frame of 

the EPA Clean Power Rule and certainly long enough that the terrain of technologies available 

may be much broader before we have to settle for inferior options like nuclear power. 

Commenters stated that based on the history of performance of the nuclear and the alternative 

industries, there are good reasons to expect the alternatives will overcome their challenges more 

quickly and efficiently than nuclear technology. Commenters noted that in addition to the 

ongoing conceptual and design work, the nature of the renewable technologies involved affords 

the opportunity for a great deal of real world development and demonstration work before it is 

deployed on a wide scale. Commenters described this as the antithesis of past nuclear 

development and the program that SMR advocates have proposed. Commenters stated that the 

alternatives are moving rapidly along their learning curves. Commenters remarked that the 

ability to move down the learning curves exhibited by renewables and alternative technologies 
624 

can be explained by the fact that these technologies actually possess the characteristics that allow 

for the capture of economies of mass production and stimulate innovation. Commenters stated 

that they involve the production of large numbers of units under conditions of competition. 

Commenters suggested that nuclear power, even SMR technology, involves an extremely small 

number of units from a very small number of firms, with the monopoly model offered as the best 

approach. Commenters stated that, in short, the underlying conditions and recent decades of 

experience suggest that the dramatic reversal of fortune nuclear advocates technology are hoping 

for is not likely, to say the least, while the continued, dramatic decline in the cost of renewables, 

is quite likely and the prospects for the development of the building blocks of the 21st century 

electricity system are much better. 

Commenters stated that the rule places too much emphasis on burning natural gas, and 

"renewable" sources of electricity and too little emphasis on nuclear power, which is a far better 

mitigation to world-wide CO2 pollution. Commenters pointed out that the proposed rule says 

that state plans can include measures and policies (e.g., demand-side energy efficiency programs 

and renewable portfolio standards) for which the state itself is responsible. Commenters asked 

why is there is no mention of nuclear power when it has one of the lowest life-cycle CO2 

emissions of any power source? Commenters also asked why account for CO2 reduction from 

"renewable electricity" (RE) as being 100% when substantial amounts of CO2 (and other 

pollutants) are released into the atmosphere in their manufacture? Commenters stated that in 

these cases, the energy out is nearly carbon-free, but the life-cycle emissions of carbon, which is 

significant in terms of global climate, favors nuclear by a large factor (>10). Commenters further 

stated that only about half of the CO2 savings ascribed to RE is applicable with respect to 

climate. Commenters remarked that nuclear reactors have an Energy Return on Energy Invested 

(EROI) ratio on the order of 50, and thus much less CO2 is released per unit energy than for RE, 

and most of the carbon is generated during construction. Commenters stated that increasing the 

amount of nuclear capacity relative to the amount that would otherwise be available to operate is 

therefore a technically viable approach to support reducing CO2 emissions from affected fossil 

fuel-fired EGUs. Commenters concluded that the rule should then strongly favor nuclear power 

plants over renewable, carbon-capture and storage (CSS), or other technologies that begin with 

low EROI (e.g. PV) or that lower EROI (CSS). Commenters stated that this is particularly true of 

a national policy and should give preference to the construction of new nuclear facilities. 

Commenters stated that another way to increase the amount of available nuclear capacity is to 

preserve existing nuclear EGUs that might otherwise be retired. Commenters remarked that more 

significantly, existing nuclear power plants should receive policy preference to keep in operation 

for as long as the NRC deems safe, and since most of the carbon intensity of nuclear power 

comes at its construction the existing nuclear plants are the lowest carbon footprint of any 

electrical generating source. Commenters proposed the following recommended changes to the 

proposed rule: 

1. CO2 saved should be calculated on life cycle emissions, taking into account the carbon 

intensity of the country of manufacture. 

2. Nuclear power should be credited with greater life-cycle savings of CO2 than RE and 

savings should be accounted for when the plant produces electricity (and losses 

accounted for when the plant closes). 
625 

3. Existing nuclear power plants which have already spent the vast majority of their CO2 

emissions should be strongly favored by policy to remain producing as long as the NRC 

deems safe. 

4. Low-carbon energy sources must be sustainable (hundreds of years) providing large 

energy return on energy invested and large carbon savings compared to carbon emitted 

during manufacture. This favors nuclear over natural gas. 

Commenters also stated that the EPA needs to seriously consider the total lifecycle energy and 

pollution costs of the various technologies, particularly with respect to CO2 which is a global 

problem as it spreads through the atmosphere irrespective of national or regional boundaries. 

Commenters concluded that the EPA needs to recognize nuclear power as the best path to a lowcarbon energy economy, providing the benefits of reduced PM2.5, NOX, SO2, and other 

pollutants. 

Commenters advocated for avoiding premature retirement of nuclear EGUs and not building 

more. Commenters stated that a long data source-linked article, a tirade against the wasteful use 

of money and environment for nuclear energy, focused around Tritium, and radioactive water 

contamination. Commenters remarked that the current EPA Proposed Rule for existing power 

plants covers 30 nuclear facilities in the US, and 5 under construction. Commenters suggested 

that the economics don't pan out, the cost benefits to society are a burden of deceit and sickness. 

Commenters remarked don't let nuclear generation of electricity win over solar and wind! 

Commenters also stated that this is the final opportunity to affect change under the EPA Clean 

Power Plan, and that the final decision awaits; all three rulemaking documents are cross-linked 

and related. Commenters contended that solar and wind have not been considered on their own 

merits. 

Commenters stated that reducing emissions from affected EGUs, in the amount that results from 

substituting generation at those EGUs with expanded low- or zero-carbon generation, right now 

spells n-u-c-l-e-a-r and natural gas. Commenters further stated that expanding Nuclear Power 

Plant EGU's capacity for contamination IS NOT cost-effective, and using nuclear EGUs breeds 

contamination. 

Commenters requested that the EPA reconsider its decision to include nuclear energy and natural 

gas as alternatives to be encouraged. Commenters remarked that the problems of nuclear waste 

storage, the pollution from uranium mining and the immense water usage of nuclear plants are all 

reasons to exclude it and focus on developing energy efficiency measures on expanding wind, 

solar and geothermal electricity generation and storage. 

Commenters stated that while natural gas may burn cleaner than other fossil fuels, the problem 

with methane leakage during fracking as well as pollution of air and water make it highly 

problematic. Commenters stated that we should be focusing investment dollars on long term 

sustainability, that is, efficiency first, then solar, wind and geothermal power. 

Comment 36: Commenters stated that uprates (and relicensing) should be counted as new 

generation.
626 

Response 36: 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 section V.A of the preamble for further discussion of the decision to exclude nuclear 

generation from BSER. Please see section V.A of the preamble for further discussion of the 

treatment of new and uprated nuclear plants. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that nuclear generation that has had its licensing renewed for 

extension to an 80 year life should receive full CPP credit as new nuclear generation under the 

CPP compliance provisions. 

Commenters stated that the Proposed Rule does not provide adequate incentives for states to 

support the continued operation of existing zero emission resources, in particular nuclear 

generation. Commenters stated that the proposal should be modified to provide these incentives 

through provisions that tighten standards if existing nuclear units close for certain (primarily 

economic) reasons, provide additional credit to states in compliance demonstrations for nuclear 

unit performance, treat nuclear power uprates and license renewals as new generation, or all of 

the above. 

Commenters stated that the Grand Gulf Nuclear Station in Mississippi was uprated to get an 

additional 178 megawatts of electricity out of the plant, at a cost $250 million. Commenters 

stated that, under the present rules, this additional electricity and investment are not credited. 

Commenters stated that the EPA should allow 100% credit for uprates that have occurred at 

nuclear plants in a state, including those uprates that commenced prior to 2012. Commenters 

stated that the date of an uprate should be irrelevant, and all uprates should be considered eligible 

action, with compliance credit allowed for these significant CO2 emission reductions. 

Commenters also stated that utilities have used power uprates as a way to generate more 

electricity from their nuclear plants; prior to April 2014, the US Nuclear Regulatory Commission 

approved 154 power uprates. Commenters said owners of these units completed all but 8 of these 

uprates prior to the end of 2012; these approved uprates resulted in a gain of approximately 

7,035 MWe or about the equivalent of seven new reactors. 

Commenters recommended that an allowance for nuclear uprates should be available for use in a 

state's compliance plan. Commenters supported full crediting of post-proposal uprates in a state's 

compliance plan, but urged that the final rule must allow for full crediting of nuclear uprates 

regardless of the timing of such uprates. Commenters also urged that, in lieu of full crediting of 

uprates towards compliance demonstrations, EPA should allow for the distribution of 'credits' to 

states/companies that undertook uprates as an early action program for addressing GHG 

emissions prior to 2014. 

Commenters recommended that life extensions on existing units beyond the original Nuclear 

Regulatory Commission ('NRC') license of 40 years be treated like 'new' units (i.e., given full 

credit in a state's compliance plan). Commenters recommended that the credit for these units 

should be applied each year after the initial 40-year period (i.e., 41st year and beyond). 
627 

Commenters noted that relicensing typically requires significant capital investment, and stated 

that application of compliance credit for those units in operation beyond the 40-year period 

provides the proper incentives for companies and states to continue to invest in their nuclear 

fleets. 

Commenters stated that the EPA could provide incentive to states to continue running their 

existing nuclear reactors by allowing states to count generation from relicensed nuclear reactors 

toward compliance. Commenters stated that, without such an incentive, the high cost of the 

relicensing process could lead some marginal plants to shut down; however, if operators could 

receive compliance credit for the MWh produced by relicensed reactors under a state plan, the 

owners and operators of those reactors would have a stronger incentive to pursue relicensing. 

Commenters noted that the decision to relicense an existing facility is uncertain and can be 

expensive, but can also reduce the need for additional fossil generation, thus lowering emissions. 

Therefore, Commenters stated that it would be inappropriate to include assumptions about 

relicensed nuclear facilities in calculating state goals, but that the EPA should treat facilities that 

are able to successfully extend their licenses as if they were 'new' facilities, by making new 

generation from those facilities eligible for use in complying with a state emission goal. 

Commenters stated that, for the purposes of state implementation and compliance plans, nuclear 

power plant uprate projects and nuclear plant license renewals should be treated as new nuclear 

capacity under Building Block #3. 

Comment 37: Commenters stated that uprates should be credited at 100%, regardless of the date 

of the uprate. 

Response 37: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. Please see section V.A of the preamble for further discussion of 

the treatment of new and uprated nuclear plants, and section VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2

emission rate of an affected EGU. 

The avoided emissions impact of existing nuclear capacity (inclusive of uprates prior to 2012) is 

already implicitly captured in the 2012 baseline data that represent existing EGU performance 

before the application of the BSER. As a result, if the EPA were to allow compliance credit for 

generation from uprates performed prior to 2012, that credit would effectively double-count the 

emissions impact of that generation and thus improperly relieve existing EGUs of the intended 

emission reduction requirement incorporated in BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that EPA should allow 100% credit for uprates that have occurred at 

nuclear plants in a state, including those uprates that commenced prior to 2012. Commenters 
628 

suggested that the date of an uprate should be irrelevant, and all uprates should be considered 

eligible action, with compliance credit allowed for these significant CO2 emission reductions. 

Comment 38: Commenters asserted states do not have the power to preserve nuclear plant 

operation. 

Response 38: 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 section V.A of the preamble for further discussion of the decision to exclude 

nuclear generation from BSER. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, by assuming no at-risk nuclear power plants will be retired and all units 

currently under construction will come online, and by assuming 6% of the entire nuclear fleet is 

at-risk and states can achieve additional emission reductions by keeping those units in operation, 

EPA fails to consider the possibility that an economic or other operational circumstance might 

exist by which the unit owner or the NRC might determine that a facility has reached the end of 

its useful life. Commenters pointed out that the record related to nuclear units is insufficient to 

support EPA's assumptions in Building Block 3. 

Commenters stated that the dispatch of nuclear generation in one state is the dispatch of nuclear 

generation in one state is often partly or totally dependent on the decisions of neighboring states. 

Commenters stated that in South Carolina, for example, the Robinson and Oconee nuclear 

facilities serve Duke Energy's customers in North Carolina almost exclusively. Commenters 

stated that South Carolina cannot control whether Duke decides to retire those units in favor of 

other generating units that may be more economical, nor can South Carolina guarantee that the 

load that is currently being served by these units will continue to demand power at levels that 

would justify keeping these units online. Commenters stated that, although South Carolina will 

be penalized under the Proposed Rule if Duke decides (or is required) to retire one or more of 

these large nuclear units, South Carolina has no legal authority or mechanism for ensuring that 

the units are preserved. Commenters concluded that even assuming that the EPA's novel 

interpretation of the term "system of emission reduction" is correct, the ability to preserve 

existing nuclear capacity cannot be considered an "adequately demonstrated" method of reducing 

emissions in situations where the states in which nuclear facilities are operating have no control 

over whether the facilities continue to operate. 

Commenters stated that another flaw in EPA's proposal to penalize states that fail to "preserve" 

their nuclear capacity is that many states, including South Carolina, have little control over 

whether nuclear capacity must be used or preserved. Commenters provided as an example, that 

states have no control over whether the NRC grants or denies an aging facility's application for a 

license extension. Commenters stated that the NRC is currently issuing 20-year license 

extensions to facilities that have reached the end of their initial 40-year license, but has yet to 

determine whether it may issue longer extensions under existing federal law. Commenters 

remarked that, moreover, the current impasse over how and where to permanently dispose of 
629 

spent reactor fuel has led to significant uncertainty over whether the NRC will be able to 

continue issuing and extending licenses under the Atomic Energy Act. 

Comment 39: Commenters stated that credit should be allowed for carbon-free nuclear 

investments. 

Response 39: 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 section V.A of the preamble for further discussion of the treatment of new and 

uprated nuclear plants provisions for nuclear power. 

The following are summaries of the specific public comments under this comment: 

Commenters contended that the proposal does not give enough credit for carbon-free nuclear 

investments that have already been made. 

Comment 40: Commenters asserted that nuclear power should not be included in state goal 

calculations. 

Response 40: 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. 

The following are summaries of the specific public comments under this comment: 

Commenters contended that final approval for commercial operation of several nuclear power 

plants are out of the states' control and therefore should not be included in the state goal 

calculation. Commenters contended that expansion of nuclear energy is being penalized by EPA 

and given a lower emission guideline, resulting in additional compliance risk. 

Comment 41: The proposed CO2 emisson target methodology for incorporating under 

construction nuclear plants is unfair to states where plants are under construction. 

Response 41: 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 section V.A of the preamble for further discussion of the decision to exclude nuclear 

generation from BSER. Please see section V.A of the preamble for further discussion of the 

treatment of new and uprated nuclear plants, and section VIII.K of the preamble for further 

discussion of provisions in state plans of allowable actions that result in an adjusted CO2 

emission rate of an affected EGU. 

The following are summaries of the specific public comments under this comment: 
630 

Commenters contended that EPAs methodology for incorporating under construction nuclear 

plants into the rate-setting calculation significantly increases the stringency of the CO2 emission 

targets for Georgia, South Carolina, and Tennessee-the only states where nuclear units are 

currently under construction. Commenters contended that this would constitute a substantial and 

unjustified inequity on these 3 states, and would contravene other overriding national energy 

policy objectives. Commenters added that including under construction nuclear assumes that 

future units will be constructed and always operate at 90 percent capacity factor no matter what 

actually occurs. Commenters stated that unforeseen circumstances could delay the completion of 

units under construction, and could cause extended outages that preclude achieving 90 percent 

capacity factor each and every year. Commenters concluded that CPP should remove the nuclear 

generation from setting the state goals but allow both new nuclear generating units and uprating 

of existing nuclear generating units to be included as components of state plans and be factored 

into state compliance. 

Commenters specifically noted the proposal was inequitable to customers in those states who are 

already paying for nuclear units under construction. Commenters contended that the customers 

would also need to pay to comply with the CPP. Commenters estimated that the CPP could add 

as much as 20 percent to customer bills in 2030. 

Comment 42: Commenters raised miscellaneous issues related to state plans that involve nuclear 

generation and the methodology for determining that a state is achieving its goal. 

Response 42: EPA acknowledges the comments and has determined that the BSER for the final 

rule will not include the provisions we had proposed for under-construction units in the setting of 

state goals, and will allow incremental generation from new nuclear units to be applied towards 

compliance. Please see section V.A of the preamble for further discussion of the treatment of 

new nuclear plants, and section VIII.K of the preamble for further discussion of provisions in 

state plans of allowable actions that result in an adjusted CO2 emission rate of an affected EGU. 

Also, section VIII of the preamble for the final rule identifies state plan designs that require 

projections for evaluating plan performance prior to plan approval. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA did not consider how nuclear preservation incentives would be 

allocated. Commenters mentioned that if states would have to decide which reactors should 

receive subsidies and at what levels if they are to actually prevent closures, the industry could 

use such dynamics as additional leverage for programs covering the operating cost margin for all 

of a state's nuclear capacity, which the EPA would have to accept if the states show it is prudent 

for meeting the goals. 

Commenters suggested that, in order to ensure that states have the information necessary to 

accurately evaluate proposals to include nuclear generation in their implementation plans, the 

EPA must include a thorough analysis of the economic and technical feasibility of various 

nuclear generation resources. Specifically, the commenters suggested the EPA to provide 
631 

credible and technically sound analyses of the following: a. Completion of reactors in 

construction, with reference both to (1) current cost projections and project delays and (2) the 

historical record of reactor project delays and cancellations. b. The economic and technical 

feasibility of new reactor projects, including cost overrun trends, projected vs. actual completion 

times, and project cancellations (will overlap substantially with the above). c. The economics of 

existing reactors, including operating and maintenance cost trends, plant characteristics, and 

merchant power market dynamics. d. The economic and technical feasibility of reactor power 

uprates, and the effect of extended power uprates on overall plant economics and maintenance 

costs. 

Commenters stated that the EPA should clarify that that any state choosing to include 

construction of new nuclear projects in its state compliance plan should reasonably demonstrate 

the extent to which such nuclear generation would displace existing fossil-fired generation. 

Commenters stated that the formula for setting goals only includes 5.8% of nuclear and no 

hydroelectricity, and the formula for setting compliance is not clearly stated. Commenters 

speculated that compliance might go in one of a few ways: 

1. The EPA uses the same formula as they did for setting state targets (this would exclude 

all new hydroelectric, which goes against the implication that additional hydroelectric can 

be used to meet state goals), 

2. The EPA calculates compliance emissions rates in a way that includes all generation (in 

which their original goals don't make much sense, since some states would already be in 

compliance), or 

3. The EPA calculates compliance emissions rates with a new, yet-to-be-determined 

formula that may or may not include the low carbon generation from nuclear facilities. 

3.3.9 CHP/cogeneration

This section discusses issues related to combined heat and power (CHP) production, sometimes 

referred to as cogeneration, as related to Cleaner Generation Sources (Building Block 3). 

Commenters had raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Comments regarding CHP units 
632 

Response 1: See section V.A of the final rule preamble of the CPP for EPA’s response to this 

comment 

The following are summaries of the specific public comments under this comment: 

Commenters discussed the benefits of CHP. Commenters stated CHP is the simultaneous 

generation of electricity and useful thermal energy. Commenters stated these efficient systems 

make use of heat that normally would be wasted and save the fuel that would otherwise be used 

to produce heat or steam in a separate unit. Commenters stated that as a result, CHP units are 

capable of reaching overall efficiencies of 60-80 percent and therefore of generating electricity at 

significantly lower emission rates than conventional electricity generating units. Commenters 

stated CHP technologies offer improved environmental quality, reduced energy consumption, 

and improved grid reliability. Commenters stated CHP reduces pollution by using the energy 

potential of fuel inputs twice or three times, yielding half to a third of the emissions that would 

result from separate applications. 

Commenters stated that already harnessed by many utility, industrial, commercial, and 

institutional facilities, CHP is a proven and effective energy resource that can be immediately 

deployed to help address current and future global energy needs while reducing environmental 

impacts. Commenters stated there is approximately 82 GW of CHP installed in the United States, 

accounting for 12 percent of U.S. electricity generation. Commenters stated each year, this 

installed capacity decreases energy use by almost 1.9 quadrillion Btu, and avoids the release of 

over 248 million metric tons of CO2 into the atmosphere. Commenters stated industry estimates 

indicate that existing sites could add another 132 GW of CHP. Commenters stated that installing 

just 40 GW of additional CHP would save energy users $10 billion a year, 1 quadrillion Btu, and 

150 million metric tons of CO2e annually. Commenters stated this is why President Obama has 

called for 40 GW of new, cost effective CHP by 2020. 

Commenters stated that CHP is adequately demonstrated and that today there are more than 

4,000 CHP installations throughout the United States. (Figure 5 U.S. CHP Installations) 

Commenters stated CHP capacity outside the United States is even greater, as the U.S. is ranked 

only thirteenth in the world for the share CHP has of total power production. Likewise, 

commenters stated that WHP capacity in Asia far exceeds U.S. capacity, and that CHP supplies 

less than 9 percent of U.S. electric capacity, well below the levels in other industrialized 

economies like Germany (13%), Russia (31%) or Denmark (53%). Commenters stated that CHP 

is "adequately demonstrated," but deployment needs to be expanded with favorable policies. 

Commenters said that State compliance plans under 111 (d) can stimulate further investment in 

the United States. Commenters continued stating that EPA has repeatedly recognized the value 

of CHP as a proven cost-effective technology to reduce greenhouse gas emissions. Commenters 

also stated EPA has incorporated CHP in its greenhouse gas best available control technology 

(BACT) guidance and issued awards to various CHP Energy Star projects in recognition of their 

emissions reductions. Commenters stated that many states have likewise recognized the emission 

benefits of CHP and WHP and presented that 18 states recognize WHP as a renewable or 

efficiency resource in their state portfolio standards because WHP produces electricity with no 

incremental combustion or emissions. (see Appendix - "State WHP Catalogue") 
633 

Comment 2: Commenters stated the EPA should clarify that CHP that combusts renewable fuels 

is considered renewable energy. 

Response 2: See section VIII.K of the final rule preamble of the CPP for EPA’s response to this 

comment. The following are summaries of the specific public comments under this comment: 

Commenters stated that not all CHP facilities use fossil fuels to generate heat and electricity. 

Commenters stated many use renewable fuel sources such as solar, geothermal, or biopower 

(including wood waste, crop residue, energy crops, landfill gas, and manure and wastewater 

biogas). Commenters stated the Clean Power Plan establishes applicability criteria such that a 

facility would generally not be considered an affected EGU if it burns primarily (over 90 

percent) non-fossil fuels. Commenters stated these renewable CHP facilities should, therefore, 

not be considered affected EGUs, regardless of size or electricity sales to the grid. Commenters 

stated that like the non-affected CHP units, generation from new or expanded renewable CHP 

units displaces demand for generation from affected EGUs and, therefore, emissions from 

affected EGUs. Commenters stated EPA should make clear that it will approve state plans that 

account for new and expanded renewable CHP as a compliance tool in the same way that 

generation from other new and expanded non-affected CHP units can serve as a compliance tool. 

Commenters stated, however, renewable CHP units necessarily utilize renewable fuel resources 

and generation from these units should be considered renewable energy generation. Commenters 

stated unlike for other compliance tools, the Clean Power Plan allows a state to incorporate 

generation during the compliance period from existing renewable facilities-that is, generation 

from facilities constructed before publication of the Proposed Rule-when demonstrating 

compliance with that state's goal. Commenters stated that consistent with this approach, it urged 

EPA to clarify that generation from non-affected CHP units constructed before June 2014 that 

primarily utilize renewable fuels qualify as renewable energy generation and may, therefore, be 

considered an approvable compliance tool in state plans. 

Commenters asserted that EPA has already established a broad set of criteria for including 

Combined Heat Power (CHP) biomass units as renewable by using U.S. EIA state level data and 

therefore should complete the Accounting Framework for Biogenic CO2 Emissions from 

Stationary Sources. Commenters stated, for example, Kentucky has three facilities that are 

considered to be CHP facilities which were included in the 2012 baseline renewable data; two of 

those are biomass waste CHP facilities with the third being a CHP involving off-site steam 

utilization. 

Commenters noted that EPA has permitted limited biomass resources for use in a large 31 MW 

California biomass CHP plant in recent regulatory rulings which reinforces the fact that there are 

some biomass resources that can contribute to GHG reduction goals when wisely used for 

biopower. Commenters urged EPA to incorporate biomass-fueled CHP in its IPM modeling. 

Comment 3: Commenters addressed encouraging CHP as a component of State Clean Power 

Plans. 
634 

Response 3: See sections VIII.I and VIII.K of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that depending on the current status and specific structure of the State's 

portfolio standards, modification of an existing RPS or implementation of a new RPS can be a 

useful vehicle for encouraging CHP as a component of a State Clean Power Plan. Commenters 

stated that EPA should make clear to the States that it would approve State compliance plans that 

encourage implementation of CHP through portfolio standards or other policies. 

3.3.10 Hydropower

This section addresses comments on CPP provisions related to hydropower. 

Commenters had raised a number of issues related to this subsection which are organized by 

topics (comments) below. Responses are provided for these topics. 

Comment 1: Commenters stated that hydropower should be treated equally with other RE 

sources in the proposed rule. 

Response 1: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal – generation from incremental hydropower added 

after 2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data year issues for 

hydrologic variability, see section VI.D of the preamble to the final CPP for EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the proposed rule should treat all RE sources, including hydropower, 

equally. Commenters stated that the EPA must ensure that all non-emitting energy resources, 

including new hydroelectric generation, are treated equally as compliance options under the 

Clean Power Plan. Commenters explained that, although states have discretion to count both new 

hydropower installations and incremental capacity increases at existing dams, the rule does not 

ensure that states must treat this new hydropower the same as other RE resources, such as wind 

and solar, regardless of the size of the facility or incremental increase. Commenters added that 

treating hydropower differently places it at a considerable competitive disadvantage with other 

RE resources and ignores the significant carbon emissions savings that this resource has 

generated, and will continue to generate, over time, and that hydropower, as an RE resource is 

especially important because, unlike intermittent resources such as wind and solar, hydro is 
635 

capable of providing base load power and ancillary services which are essential to the stable 

operation of the grid. 

Commenters stated that, in order to maximize the amount of greenhouse gas emission reductions, 

the EPA will need to treat hydropower equitably under the proposed rule, particularly in 

comparison to the treatment of other renewable and clean energy resources. Commenters also 

remarked that the Agency should amend the proposal to adopt hydropower-specific 

considerations and provisions to better account for and accommodate hydropower resources, 

such as: allowing states to utilize generation from hydropower assets as a compliance option, 

even if that generation is not used in establishing state goals; utilizing an averaging of years to 

set the baseline (as opposed to the single year of 2012); as well as a rolling compliance average 

or water availability compliance "safety valve." 

Commenters stated that, in the proposed rule, there is disparate treatment of hydropower and 

biomass between the standard-setting methodology for a state and what counts toward 

compliance with that standard, and that the final rule should resolve this mismatch. 

Comment 2: Commenters stated that existing hydropower should count towards compliance. 

Response 2: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. Existing hydropower is not 

considered in the setting of a CO2 emission performance standard. See sections V.A, V.E, and 

VIII.K of the preamble of the final CPP. Regarding data year issues for hydrologic variability, 

see section VI.D of the preamble to the final CPP for EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Several commenters stated that existing hydropower generation should be considered as a 

compliance option. Commenters stated that all types of hydropower should be recognized as 

compliance options, including conventional, incremental hydropower, retrofits, capacity 

additions, efficiency upgrades, pumped storage, marine and hydrokinetics, conduits, and new 

development. Commenters stated that a huge source of our emission-free electricity available to 

cooperatives, the Federal Hydro Power, is ignored by the CPP. Commenters also noted that 

hydropower currently accounts for 20 percent of the power supply for the commenters’ 

cooperative. Commenters stated that, if hydropower is not considered as a compliance option, it 

is not clear how states with significant hydropower will benefit from it. Commenters stated that, 

in its most basic definition, renewable energy is energy that comes from resources that are 

naturally replenished, and hydropower is just that; therefore, states should be afforded 

compliance credit for existing hydropower facilities, independent of incremental additions, to 

meet the renewable standards or achieve compliance with the emission rate goals set by the CPP. 
636 

Commenters stated that it is critical that credit is awarded for all renewable and energy efficiency 

investments under state plans in Building Blocks #3 and #4. Commenters explained that the 

commenters’ organization has undertaken responsible portfolio options in the past and should 

receive credit for those past good deeds, such as credit for early action before 2012 and clear 

benefit for resources that come on-line between 2012 and 2017. Commenters also noted that 

hydropower investments, as well as those in wind, solar, and landfill gas, were made knowing 

the likelihood of future carbon regulations and, as such, they should not be denied credit under 

any state plans simply because they are pre-existing projects. 

Commenters stated that the EPA's treatment of hydropower in the proposed rule fails to properly 

acknowledge the benefits of this resource, and places hydropower at a disadvantage with respect 

to other RE resources for purposes of counting towards states' compliance obligations. 

Commenters added that the EPA erred in not recognizing the full environmental benefits of 

hydroelectric generation in the Proposed Rule, and should explicitly allow for the use of 

hydropower resources for compliance purposes. 

Commenters stated that, in order to account for the full potential of emissions reductions from 

clean energy sources, hydropower must be treated equitably compared to other forms of 

renewable energy and denoted as a compliance option for states. Commenters stated that, 

currently, hydropower is not included in Building Block 3, and it is not clear whether states can 

use hydropower as a compliance option. Commenters noted that hydropower is the largest source 

of renewable electricity in the U.S., and hydropower (and pumped storage) plays an important 

role in ensuring grid reliability. Commenters stated that, as a flexible base load source of power, 

hydropower generation is a critical integrator of intermittent renewable energy generation and 

also allows asset owners to utilize fossil fuel generation resources more efficiently, reducing 

emissions even further. Commenters stated that meeting EPA's targets will be significantly 

challenged without hydropower's current and future contributions to a clean energy future. 

Commenters stated that, for the CPP to be successful, ensuring the protection and preservation of 

generation from the nation's existing hydropower facilities, as well as promoting new 

development, is critical. Commenters stated that the proposed rule appears to undervalue 

hydropower's clean air benefits and future growth potential. Commenters noted that the DOE has 

identified significant opportunities for development in the hydropower sector, referencing an 

April 2012 study, which estimated 12 GW of hydropower potential at non-powered dams across 

the U.S., and an April 2014 study, which estimated over 65 GW of potential new stream-reach 

hydropower development. Commenters stated that, in response to these results, the DOE has 

launched a Hydropower Vision initiative to create a roadmap for realizing this growth. 

Commenters stated that, as the EPA moves forward on the rule, it should provide clear guidance 

and direction to the states on the value of hydropower to meeting the goals of the CPP. 

Commenters stated the EPA must also ensure that hydropower is treated equitably under the final 

rule and included as an eligible compliance option in state plans. 

Commenters remarked that the use of hydro as a low carbon generation source has for decades 

helped cooperatives meet member loads in a cost effective and environmentally responsible 

manner, and utilities purchasing hydropower from the federal government should be allowed to 

use the low carbon generation for calculating compliance in a state or federal plan. Commenters 

added that the CPP should not justify limiting the use of existing hydro to show compliance 
637 

simply because it was not included in the modeled rate and doing so is inconsistent and arbitrary 

with other compliance options used by the CPP to establish state rates and compliance options. 

Commenters stated that existing hydroelectric generation should receive full CPP credit as a 

renewable energy resource so that hydro generation has equivalent standing to other renewable 

energy resources for CPP compliance. 

Commenters stated that the only rational method for setting a state RE target is to take into 

consideration existing capacity of all RE sources within the state and RE potential specifically in 

each state for each resource, and that includes hydropower. Commenters also pointed out the 

EPA's rationale for excluding hydropower, that it could distort regional targets that are later 

applied to states lacking that existing hydropower capacity, is not valid because the EPA did not 

apply the same rationale to other types of RE, such as wind, where there may be a lack of 

capacity and/or potential. 

Commenters disagreed with the EPA's reasoning for not including existing hydroelectric 

generation in the demonstration of compliance with the proposed targets. Commenters stated that 

all but two states have hydroelectric generation and should be able to include this non-emitting 

generation in compliance demonstrations; however, under the proposed CPP, only new 

hydroelectric generation can be included in compliance demonstrations. Commenters 

recommended that hydroelectric generation and all other non-emitting sources should be treated 

in the same manner; that is, exclude them from the goal calculation, but allow them in the 

demonstration of compliance at the discretion of the affected source. 

Commenters stated that the EPA should credit hydropower as a compliance option and thereby 

provide meaningful recognition of hydroelectric generation to encourage those states to continue 

to use this low-cost renewable resource. 

Commenters supported inclusion of existing hydropower as a compliance option and stated that 

it is reasonably clear that, for the most part, optimizing hydropower output and energy efficiency 

investments are the least-cost alternatives in the electric sector and should receive priority in 

developing the methodology for implementing the 111(d) rule. 

Commenters stated that, despite the vast potential of water power at existing impoundments, and 

clear congressional policies favoring development of that potential, the EPA's proposed rule 

largely ignores hydro and places hydro at a disadvantage compared to other carbon abatement 

options under the proposed rule. Commenters described the RC Thomas Project in southeastern 

Texas, which project takes advantage of one of the most promising untapped sources of 

renewable power potential in the nation by utilizing the head and flow of an existing nonpowered dam at the largest water impoundment in Texas that is currently devoted exclusively to 

water supply. Commenters stated that the RC Thomas hydroelectric project is precisely the type 

of renewable energy development that Congress and the Executive Branch repeatedly have 

sought to promote over the past decade, beginning with the Energy Policy Act of 2005. 

Commenters concluded by stating that, besides excluding existing hydropower generation from 

the calculations, the proposed rule, and the EPA's underlying modeling, presumes zero future 

growth in hydropower generation and that, by excluding hydropower entirely from its modeling, 
638 

the EPA unfairly and unwisely ignores hydroelectricity's current and future contributions to 

reducing the energy sector's carbon footprint. 

Commenters stated that hydropower should not be "invisible" as states make compliance 

choices. Commenters stated that if a state deems hydropower generation either "essential" or "at 

risk" because it is nearing the end of its design life, facing potential limits on operational 

flexibility, or scheduled for relicensing before 2030, the EPA should allow that state to add that 

hydro generation in units of estimated MWh into the denominator of its goal/target compliance 

calculation in the place of other RE/EE measures. Commenters stated, where this is done, states 

should be able to adjust their hydro contribution yearly based on updated weather information. 

At a minimum, commenters suggested, the rule should do more to ensure that these hydropower 

resources are maintained and enhanced in order to continue their contribution to a lower CO2 

emission future. Commenters stated a bad result would be for the proposed rule to lead to a lowcost, CO2 emission-free resource going offline due to being replaced by, or being bumped by, 

higher-cost CO2 emission-free resources or natural gas due to the incentive structures associated 

with the BSER. Commenters also stated that, in cases where a state RPS includes hydropower, it 

should be allowed to displace additional renewable requirements, as calculated under Building 

Block 3. Commenters stated that, for example, the 15 percent goal for renewable energy in South 

Dakota was based on its total 2012 generation of 12,034,206 MWh, which includes 5,980,965 

MWh of hydropower, nearly half of the total state generation. Commenters stated because 

existing hydropower is used in making the calculation of renewable energy targets, it should also 

be allowed in state plans as an eligible form of renewable energy under Building Block 3. 

Commenters stated that the EPA should expressly allow state plans to designate all forms of new 

and incremental hydro for compliance, whether owned or contracted for. Commenters stated this 

should include clearly establishing both domestic and out-of-nation hydro (such as Canadian 

hydro) as eligible renewable resources. 

Commenters stated that the provision to allow existing renewable energy should be extended to 

include existing hydroelectric power. 

Commenters stated that the EPA's decision to exclude existing hydropower facilities is directly 

contrary to policies in the Northeast, where existing hydropower is a major component of RPS 

compliance. Commenters added that failing to account for the role of hydropower in the RPS 

requirements that form the EPA's regional renewable generation targets results in a substantial 

overestimation of the amount of renewable resources that can be added in the Northeast, and 

particularly in New York. 

Commenters remarked that excluding existing hydropower is inconsistent because hydroelectric 

generating resources produce zero-carbon electricity, and that the EPA should count hydro 

generation as part of the RE resources. 

Commenters stated that including existing hydropower would result in a balanced treatment of 

all RE generation that would reflect how these resources contribute to the CO2 emissions from 

covered plants. 

Commenters stated that excluding nuclear and existing hydropower is a major flaw because these 

technologies are the two largest generators of very-low-carbon electricity in the U.S., and 
639 

omitting most or all of the electricity generated by the technologies that have already made the 

greatest contributions to accomplishing the stated goal of the CPP requires justification. 

Commenters added that, although the EPA has quite reasonably explained why they do not 

expect any new hydroelectric capacity to be built in the foreseeable future, clear and compelling 

overall justification for omitting this generation from the state goal-setting formula is not present 

in the proposed rule. 

Commenters stated that excluding hydroelectricity as a renewable resource is counter-intuitive; 

Commenters noted that hydroelectric power does not result in carbon emissions, utilizes a 

replenished natural resource (water), and can provide reliable and planned production of 

electricity. 

Commenters stated that Arizona was built on hydropower and should get some credit for its 

hydroelectric investments, which have provided carbon-free energy reliably for many years. 

Commenters stated that the EPA's decision to discount the value of domestic hydropower is 

completely puzzling because hydropower is a renewable, efficient, and reliable source of energy 

that does not directly emit greenhouse gases or other air pollutants, and that can be scheduled to 

produce power as needed, depending on water availability. Commenters added that, if the EPA 

does not want energy costs to rise substantially, the EPA needs to rethink the discount of 

domestic hydropower. Commenters also pointed out that hydropower is essential to new 

"intermittent" renewables such as wind and solar in that hydro output can be quickly and easily 

turned up or down to keep the electrical grid in balance. 

Commenters stated that it is unreasonable and discriminatory to exclude existing hydro because 

it is a non-carbon emitting resource and has been part of power supply for the North Iowa 

Municipal Electric Cooperative Association members, as well as others, for decades, and 

excluding existing hydro penalizes members for choosing this non-carbon emitting power supply 

resource over others. Commenters added that the exclusion of the hydroelectric resources further 

exacerbates the stranded cost problem, as additional non-carbon emitting resources will need to 

be added to lower carbon emissions from other sources. 

Commenters stated that the proposed rule fails to adequately recognize the actual carbon 

intensity of states, utilities and, most importantly, customers, using this carbon-free source of 

electricity, and in fact, the EPA's methodology appears to penalize states with existing 

hydropower by increasing renewable energy targets and has the potential to perversely create 

excess generation for a utility and therefore unnecessary higher costs for customers. Commenters 

provided a graph that compared the EPA's calculated baseline carbon intensity for Montana, the 

EPA's interim and final goal and the carbon intensity of the electricity supply before and after 

hydro was purchased by the commenter's organization; commenters noted that the graph 

illustrates actual customer impacts resulting from ignoring existing hydropower in the proposed 

Clean Power Pan methodology of calculating and reducing carbon intensity. Commenters 

explained that asking customers to acquire other forms of renewables or additional energy 

efficiency that is not cost effective to further decrease the already low carbon intensity of their 

energy supply will result in additional rate increases and will likely increase the overall mass of 

carbon dioxide associated with our portfolio. Commenters concluded by requesting that the EPA 

recognize the importance of existing hydropower by supporting policies that recognize the many 
640 

benefits of hydropower and promote its continued use, enhancement and expansion; encouraging 

the relicensing of existing hydro facilities by allowing the carbon-free emissions from relicensed 

hydro plants to be used for compliance; allowing states to use existing hydropower for 

compliance; and, not penalizing states by using existing hydropower to increase renewable 

energy targets. 

Commenters stated that the CO2 reductions from hydropower production benefit Minnesotans 

regardless of whether the generation is sourced from existing or new generation resources or 

whether these resources are located within Minnesota or elsewhere. Commenters requested that 

the EPA count all hydropower serving Minnesota retail customers towards state CPP compliance 

goals. 

Commenters stated that utilities and their ratepayers that have existing hydropower in their 

renewable energy portfolio should be given credit for having a renewable, non-emitting resource 

that displaces fossil-fuel generation. Commenters explained that, for at least 10 states, 

hydropower makes up nearly half or more of the generation capacity and that these states have a 

legacy of clean, renewable and non-emitting energy, which has displaced CO2 emitting 

resources, and put them among some of the lowest CO2 emitting states in the nation, and that 

without this hydropower, energy would have to be replaced likely by natural gas, which would 

increase CO2 output of these traditionally clean states. Commenters added that it would be 

consistent with the methodology that the EPA employs in its calculation of renewable energy 

under Building Block 3 to include existing hydropower. 

Commenters stated that, as a critical non-emitting resource that has other positive attributes for 

grid reliability, hydropower should not be disadvantaged in any rules setting or implementing 

carbon reduction goals. 

Commenters requested the EPA credit existing hydropower, including any upgrades taken at 

those existing resources and new technology deployment (e.g. run of the river technology, wave 

or tidal technology), in the same manner as wind and solar technologies. Commenters stated that 

the proposed rule should be improved by correctly accounting for present hydropower generation 

and hydropower generation's projected growth. Commenters added that hydropower supplies 

reliable, carbon-free electricity and states and markets must be encouraged to keep optimized 

hydropower capacity on-line into the future. 

Commenters stated that the city of Fremont, Nebraska purchases hydropower from the 

Department of Energy Western Area Power Administration, but would not be able to offset any 

carbon emissions from coal with this power source. 

Commenters stated that hydropower generation from both federal and non-federal hydropower 

resources should receive emission credits towards the state's compliance obligations under the 

proposed rule. 

Commenters stated that, because the EPA unreasonably refuses to acknowledge existing 

hydropower as RE in the goal calculations, the proposed rule would effectively displace Idaho 

hydroelectric generation instead of mitigating or reducing emission levels from affected unit 

fossil generation plants. 
641 

Commenters stated that the EPA's treatment of hydropower is a disadvantage for regions of the 

country that rely on zero-emission hydropower resources as a significant proportion of their 

renewable generation. Commenters stated that the EPA should recognize the importance of the 

continued contribution of hydropower to the nation's renewable energy resources, and the EPA 

should revise its approach to allow states to count existing hydropower generation toward their 

renewable energy goals. Commenters stated that, for the purposes of calculating a baseline level 

of renewable generation in each state, the EPA included only non-hydropower renewable energy 

in the target-setting calculations and in the renewable generation levels used to inform the state 

goals. Commenters stated that the EPA also assumed that state RPS policies often exclude 

existing hydroelectric facilities from RPS accounting, but, recognizing that there is potential for 

the development of new hydropower resources, the EPA proposed that a state may choose to 

include generation from new hydro facilities as a method of compliance with a state's goal. 

Commenters stated that, in this approach to goal rate-setting and compliance, the EPA has failed 

to recognize the details, limitations, and variations in state RPS statutes. For example, 

Commenters stated, North Dakota only counts new hydropower generation for compliance with 

its RPS, but North Dakota recognizes the importance of existing hydropower in how it calculates 

the amount of electricity necessary to meet the RPS. Commenters stated that a utility may deduct 

the proportion of electricity obtained from hydroelectric facilities from its baseline of total retail

sales, lessening the burden. Commenters stated the National Hydropower Association supported 

a similar approach when Congress was discussing a national renewable standard, and other 

states, such as Kansas, include existing hydropower in their definition of renewable energy 

resources for compliance purposes under their RPS. 

Comment 3: Commenters stated that hydropower capacity built after 1995 should count towards 

compliance. 

Response 3: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, added before 2012, consistent with the treatment of generation from 

other low- and zero-emitting sources, does not displace existing fossil emissions. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data year issues for 

hydrologic variability, see section VI.D of the preamble to the final CPP for EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that hydroelectric power plants brought online since 1995 should be included 

as compliance options. Commenters stated that existing hydropower plants qualify as compliance 

opportunities because hydropower resources represent an important source of emissions-free 

power and can play a pivotal role in reducing the carbon-intensity of the power sector. 

Commenters explained that the current proposal properly excludes the vast majority of preexisting hydropower generation from the baseline of the target-setting framework; however, 
642 

additional hydropower projects built after 1995 were determined to be cost-effective due in part 

to the climate change benefits of hydropower in many states, including Oregon, and hydropower 

resources brought on-line beginning in 1995 should be eligible for compliance. 

Comment 4: Commenters stated that large-scale hydropower plants should be considered as a 

compliance option. 

Response 4: The EPA generally disagrees. In response to additional analysis and many 

comments, the 111(d) final rule differs from the proposal – generation from incremental 

hydropower added after 2012 is considered, with other low- and zero-emitting sources, to 

displace existing fossil emissions and may be used by states to reduce a rate. For the purpose of 

adjusting a rate generation during the compliance period from sources added since 2012 is 

eligible. Generation from existing hydropower, consistent with the treatment of generation from 

other low- and zero-emitting sources, does not displace existing fossil emissions. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that large hydropower should be considered by the Federal government as an 

emission-free generating resource that is already in place, but is not incorporated into the 

proposed plan. Commenters explained that the limit on large hydropower is artificial and only in 

place to increase market share for other renewables, and, at the very least, the Federal hydro 

system should get credit for the generation under this plan. 

Commenters remarked that Germany moved to renewable energy large-scale hydro as a part of 

their energy transition, but, in the U.S., the only hydro that counts is small-scale hydro. 

Commenters explained that Germany and many in the environmental community understand that 

no matter the size of the dam, any electricity production is hydropower. 

Commenters stated that excluding existing large hydropower is significant for several reasons, 

including: it is capable of producing large amounts of electricity, it is capable of operating in a 

baseload capacity, some existing capacity is at risk of retirement (mostly because of ecosystem 

restoration efforts), there is very low feasibility for capacity increases in the compliance period, 

and it has significant non-air quality impacts. Commenters added that hydro can also operate as a 

dispatchable resource, filling the same role as NGCC plants in following load and providing 

reserve and peaking capacity; and thus, the preservation of hydro capacity would directly 

displace reliance on fossil fuel resources that may otherwise be called upon. Commenters 

remarked that the EPA's reasons for not including large hydro resources in the BSER are sound, 

but inclusion of nuclear is no more sensible than inclusion of hydro would be, especially 

considering the unwarranted value placed on the at-risk nuclear capacity. 

Comment 5: Commenters stated that small hydropower plants with capacity less than 10 MW 

should be included in the state goal calculation. 
643 

Response 5: .The EPA agrees that incremental hydropower that may come on-line after 2012 

may be used to establish a CO2 emission performance rate. In response to additional analysis and 

many comments, the 111(d) final rule differs from the proposal – generation from incremental 

hydropower added after 2012 is considered, with other low- and zero-emitting sources, to 

displace existing fossil emissions and may be used by states to reduce a rate. For the purpose of 

adjusting a rate generation during the compliance period from sources added since 2012 is 

eligible. Generation from existing hydropower, consistent with the treatment of generation from 

other low- and zero-emitting sources, does not displace existing fossil emissions. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that small existing with capacity less than 10 MW should be included in the 

state goal calculation. Commenters did not provide an explanation for their request. 

Comment 6: Commenters expressed support for low-impact hydropower and commented on the 

potential negative impacts of hydroelectric dams. 

Response 6: The EPA agrees that incremental hydropower can be considered. In response to 

additional analysis and many comments, the 111(d) final rule differs from the proposal – 

generation from incremental hydropower added after 2012 is considered, with other low- and 

zero-emitting sources, to displace existing fossil emissions and may be used by states to reduce a 

rate. For the purpose of adjusting a rate generation during the compliance period from sources 

added since 2012 is eligible. Generation from existing hydropower, consistent with the treatment 

of generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions, even if certified by a third party for other impact See sections V.A, V.E, and VIII.K 

of the preamble of the final CPP. Impact of hydropower not related to the Clean Air Act are 

beyond the scope of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters expressed support for low-impact hydropower, and that independent 3rd party 

certification of hydroelectric projects by the Low Impact Hydroelectric Institute (LIHI) should be 

required for any hydroelectric project to qualify for state or national renewable energy 

certificates or to qualify in renewable portfolio standards. Commenters added that, where 

minimal environmental or recreational impact is to occur, the EPA should also consider giving 

credit for upgrading existing turbine generating capacity and the powering of existing nonhydroelectric dams and water conduits. Commenters explained that hydroelectric dams can 

create relatively pollution-free energy, but can also cause significant adverse impacts on fish and 

wildlife, water quality and quantity, recreation, and other resources and noted that multiple dams 

within the same watershed can have both individual and cumulative impacts. Commenters stated 

that, therefore, it is important to have a more comprehensive basin-wide review and permitting 

approach, regardless of the fact that multiple land owners may be involved. Commenters added 

that, if existing LIHI hydro facilities are included, the EPA should re-evaluate the renewable 

goals for each state and adjust them to ensure that growth of new renewable energy sources are 

prioritized and facilitated under Building Block 3.
644 

Comment 7: Commenters stated that uprates at existing hydro plants should count as RE. 

Response 7: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal – generation from incremental hydropower added 

after 2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data year issues for 

hydrologic variability, see section VI.D of the preamble to the final CPP for EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that power uprates at existing hydropower plants, including those undertaken 

since 2012, should be allowed as part of a state's compliance plan. Commenters stated that some 

of the 60 GW of potential new hydro would come from modernizing and uprating existing hydro 

facilities. Commenters stated that undertaking these or other changes could allow existing hydro 

facilities to be uprated to a higher capacity and to produce more energy. Commenters provided 

additional information on the benefits of hydropower uprates and suggested that the final 

guidelines recognize the value of hydropower uprates by allowing their use by states as a 

compliance tool. 

Commenters encouraged the EPA to allow Michigan to include new hydropower plants or 

efficiency uprates at existing hydropower plants, including efficiency upgrades to the turbines at 

the Ludington pumped storage facility to be counted towards compliance in Michigan's 111(d) 

compliance plan. 

Comment 8: Commenters stated that hydroelectric facilities under construction and 

hydroelectric uprates that occurred after the baseline year(s), but prior to the proposal, should 

count toward compliance. 

Response 8: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal – generation from incremental hydropower added 

after 2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data year issues for 

hydrologic variability, see section VI.D of the preamble to the final CPP for EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA should clarify that hydroelectric facilities under construction 

and hydroelectric uprates that occurred after the baseline year(s), but prior to the proposal, count 
645 

toward compliance. Commenters stated that the proposed rule could be interpreted to prohibit 

states from counting this hydroelectric generation toward compliance. Commenters stated that 

the section of the preamble to the proposed rule that explains that RE, regardless of its 

construction date, can count toward compliance expressly excludes hydropower, and the 

preamble later states that emissions reductions achieved after the date of the proposal pursuant to 

existing state programs can count towards future compliance. Commenters stated that that 

section excludes RE from this limitation (the "RE exception") such that all RE pursuant to an 

existing state program can count towards future compliance. Commenters stated the justification 

for the exception is that existing RE was included in the BSER calculation as part of Building 

Block 3, but the EPA did not consider hydropower in the BSER calculation. Commenters stated 

this could be interpreted to mean that, since nothing expressly says that hydropower between 

2012 and the date of the proposal can count towards compliance and the proposed rule is 

"forward looking" generally, hydropower generation that occurred between 2012 and the date of 

the proposal cannot count toward compliance. Commenters stated, however, this hydropower 

should be counted toward compliance to eliminate the disparate treatment of states that invested 

in hydroelectric power. Commenters stated that the EPA must clarify its treatment of 

hydropower generation and allow it to count towards compliance. 

Comment 9: Commenters stated that new contracts for existing hydropower plants should count 

towards compliance. 

Response 9: The EPA disagrees. Generation from existing hydropower, consistent with the 

treatment of generation from other low- and zero-emitting sources, does not displace existing 

fossil emissions. New contracts with existing generation do not displace overall existing 

generation, and relicensed facilities are considered to be existing facilities. See sections V.A, 

V.E, and VIII.K of the preamble of the final CPP. Regarding data year issues for hydrologic 

variability, see section VI.D of the preamble to the final CPP for EPA’s response to this 

comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA should make it unequivocally clear that states can include new 

contracts for existing hydroelectricity as eligible renewable resources available for compliance. 

Commenters explained that hydropower is non-emitting and provides consistent, base load 

power and including existing hydro is also consistent with the formula by which renewable 

energy goals are established by the EPA, which includes all energy generated in a state, 

including hydropower. Commenters explained that, while existing hydro admittedly does not add 

new resources to the nation's fleet, its wide use eliminates the need to rely on fossil fuels for base

load needs. Commenters added that, if existing hydroelectric dams are not relicensed or are 

otherwise required to be decommissioned, it will create new demand for base load resources 

which most likely will be provided by natural gas and will increase CO2 emissions. Commenters 

also stated that, hydro facilities not only provide renewable energy, but also provide muchneeded system reliability, voltage regulation, frequency response, spinning reserves, and other 

essential ancillary services (services that wind and solar cannot provide) that make it among the 

most important of renewables to meet the nation's greenhouse gas policies. 
646 

Comment 10: Commenters stated that the EPA should allow credit for existing hydropower with 

a baseline production rate to limit the amount of existing capacity that will count towards 

compliance. 

Response 10: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal. Generation from existing hydropower, consistent with 

the treatment of generation from other low- and zero-emitting sources, does not displace existing 

fossil emissions. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding 

data year issues for hydrologic variability, see section VI.D of the preamble to the final CPP for 

EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters suggested that the EPA allow credit for existing hydropower, but develop a 

baseline, similar to the baseline developed for the PSD Program, to account for the variability in 

hydropower generation. Commenters explained that the baseline could be based on production 

over the previous 10 years. Commenters stated that the EPA should not penalize states with 

hydropower by not allowing it to be used for compliance. Commenters noted that the 24-month 

average hydropower production selected by South Dakota for the last 10 years occurred in 2007 

and 2008 and results in a baseline of 2,995,195 megawatt-hours. Commenters added that any 

hydropower electric production above the baseline should be eligible for demonstrating 

compliance with the state's goal, and if hydropower production is below the baseline, it should 

not count against a state; there would just be no credit for hydropower production during a 

drought year. 

Comment 11: Several commenters stated that existing hydropower should not be used in the 

calculation of any state's renewable generation requirement. 

Response 11: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal. Generation from existing hydropower, consistent 

with the treatment of generation from other low- and zero-emitting sources, does not displace 

existing fossil emissions, but incremental uprates to existing facilities may be used to establish a 

CO2 emission performance rate. See sections V.A, V.E, and VIII.K of the preamble of the final 

CPP. Regarding data year issues for hydrologic variability, see section VI.D of the preamble to 

the final CPP for EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters recommended that the EPA exclude hydropower in state RE goal-setting 

methodology due to its high variability and dependency on precipitation and runoff, factors 

outside of the control of the state. Commenters pointed out that, if existing hydropower were 

excluded from Tennessee's RE target generation under the Alternative RE approach, RE target 

generation required would decline significantly. 
647 

Commenters stated that hydropower is highly variable, as it depends significantly on seasonal 

and annual precipitation, as well as usage allocations, and that the ongoing drought due to 

climate change puts reliance on hydropower at risk in many states, including New Mexico. 

Commenters stated that inclusion of hydropower in the goal calculation assumes that 

hydropower is kept constant and therefore, does not impact calculation of the state goal. 

Commenters added that existing hydro will impact achieving the goal if hydroelectric generation 

drops below the 2012 baseline value due to weather conditions. Commenters stated that keeping 

existing hydropower out of the state goal calculation does not penalize states in the event of an 

extreme weather event. 

Commenters commented that existing hydropower should not be included in Building Block 3 

and factored into state goal calculations because there is little that can be done to expand 

electricity production from hydroelectric sources, and, as the EPA observes, existing hydropower 

facilities are geographically limited. Commenters added that the inclusion of existing 

hydropower in state goal calculations would introduce additional compliance risk for states with 

hydropower because the amount of generation from hydropower facilities is subject to year-toyear variability based on, among other things, the amount of precipitation a watershed receives. 

Commenters explained that drought can limit the amount of generation a hydropower facility can 

produce, which would make compliance more difficult if existing hydropower were included in 

state goal calculations, and, as a practical matter, the ability to comply with a section 111(d) 

standard of performance should not be influenced by the amount of rain that falls. Commenters 

added that there are also regulatory requirements placed on hydropower facilities as part of a 

FERC license that can reduce the amount of electricity hydropower facilities can generate. 

Commenters supported the omission of existing hydropower resources from the 2012 renewable 

energy baseline due to the distortions that it would cause in the Northwest region's renewable 

energy baseline. Commenters added that, as neither Washington nor Oregon allow most existing 

hydropower to be counted towards compliance with the state's RPS, it would be somewhat 

contradictory for the EPA to include hydropower in those states' renewable energy baselines; 

also, omitting hydropower from the baseline avoids creating further incentive for these states to 

retain unnecessary and ecologically disruptive dams. 

Comment 12: Commenters stated that the EPA incorrectly assumes that existing capacities of 

hydropower will always be available in the future. 

Response 12: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – the approach to setting a CO2 emission performance 

rate is different. Generation from existing hydropower, consistent with the treatment of 

generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions, but uprates to existing capacity may be used in establishing a CO2 emission 

performance rate. Generation from incremental hydropower added after 2012 is considered, with 

other low- and zero-emitting sources, to displace existing fossil emissions and may be used by 

states to reduce a rate. For the purpose of adjusting a rate generation during the compliance 

period from sources added since 2012 is eligible. The 111(d) final rule requires that states 
648 

develop plans that establish emission standards for affected EGUs. We are providing states with 

substantial flexibility as to how they structure those plans to achieve the 111(d) requirements. 

The flexibility includes, for example, the choice of approaches, trading, time to develop plans, 

additional time before the start of the interim compliance period, and the ability to shift emission 

rate achievement between compliance periods. See sections V.A, V.E, and VIII.K of the 

preamble of the final CPP. Regarding data year issues for hydrologic variability, see section 

VI.D of the preamble to the final CPP for EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the EPA does not include hydropower in calculating state goals, but it 

arbitrarily assumes that existing capacities of hydropower will always be available in future 

years. Commenters stated that many regions of the country rely heavily on this generation, but 

the proposal fails to account for natural circumstances that lead to reduced capacity on a yearly 

and sometimes multi-year basis. For example, commenters stated that the proposal fails to 

address how to supplement, or who will be responsible for supplementing, existing hydro when 

the presumed generation levels are diminished based on drought, reduced capacity due to new 

environmental mandates, or reductions based on other competing interests, such as drinking 

water reserves or even beach creation. Commenters stated that, under the proposal, the state's 

overarching goal would remain unchanged, posing additional burdens on other resources to make 

up the difference due the reduced hydropower availability. Commenters stated, for example, that 

in North Dakota, thermal generation supplements power from dams in low water years, but in 

high water years such as 2012, state emissions are lower. Commenters explained that the Pacific 

Northwest is heavily dependent on hydropower and would encounter the same problem as North 

Dakota when hydropower generation power is curtailed. Commenters stated many states will and 

can use natural gas EGUs to make up for the lost hydropower generation. However, commenters 

stated, due to the stringency of state goals and the proposal's heavy reliance on this gas 

generation for meeting the state goals, there may not be available natural gas generation to 

replace the lost hydropower; moreover, the required natural gas use may cause the state to 

exceed its SIP due to unanticipated usage. Commenters stated by 2030, the application of these 

risk factors will likely lead to permanent reductions in the nation's hydropower generation. 

Commenters stated the EPA capriciously ignores the impacts of this likely reality, and as a 

result, many states will be forced to rely on additional natural gas generation not accounted for 

by the EPA in the state goal calculation. Commenters stated that this additional CO2-based 

natural gas generation could well make it impossible for many states to achieve the proposal's 

goals. Commenters included a table that summarized the at-risk hydropower capacity 

nationwide. 

 

Comment 13: Several commenters stated that the EPA should recognize new and incremental 

hydro as compliance options. 

Response 13: The EPA generally agrees. In response to additional analysis and many 

comments, the 111(d) final rule differs from the proposal – generation from incremental 

hydropower added after 2012 is considered, with other low- and zero-emitting sources, to 

displace existing fossil emissions and may be used by states to reduce a rate. For the purpose of 
649 

adjusting a rate generation during the compliance period from sources added since 2012 is 

eligible. Generation from existing hydropower, consistent with the treatment of generation from 

other low- and zero-emitting sources, does not displace existing fossil emissions. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated support for the EPA allowing incremental hydroelectric power projects to 

provide compliance credit, as these types of upgrades extend the hydroelectric power system and 

provide for real emission reductions. Commenters stated that the estimates and accounting for 

this technology can vary widely among operators; the EPA should, therefore, consider best 

practices in the states when it develops the methodology for these calculations. Additionally, 

commenters stated that incremental hydropower is an efficiency improvement, and the EPA 

should consider providing states guidance on the appropriate measure life for such an upgrade. 

Commenters stated agreement with excluding existing hydropower from establishing a state's 

existing RE capacity and fully supported the use of incremental hydropower from existing 

facilities or new facilities as a compliance option. 

Commenters stated that the EPA should clarify in the final rule that new or incremental hydro is 

eligible for inclusion in a state's 111(d) plan, even if large hydro is not defined as an eligible 

energy resource in the state's RPS. Commenters added that a state need not be asked to alter what 

is eligible for RPS compliance; any measure that reduces emissions from the affected EGUs 

should be eligible in 111(d) plans, regardless of whether or not it is eligible for RPS compliance. 

Commenters clarified that the EPA should credit such measures after 2005, or at minimum after 

the 2012 base year, rather than after the date of the proposal. Commenters also requested that the 

EPA clarify in the final rule that any qualifying hydro measure (incremental or new capacity) is 

eligible for compliance credit, whether the dam in question is in or outside the United States. 

Commenters stated that, regardless of whether the baseline methodology is revised to include 

hydro, the final rule should provide more definitive and clear direction and guidance to the states 

that the EPA supports new hydropower generation as a compliance option. Commenters stated 

that the states should be given not only an "option," but at least a rebuttable directive that any 

new or incremental hydropower deployed at existing dams shall be credited toward the state (or 

region) interim and long-term compliance targets in the event a rate-based methodology is 

imposed. Commenters added that, in this regard, clarification is also needed as to the deployment 

time frame in which new capacity will be given compliance credit, particularly for new and 

incremental hydropower generation brought online prior to 2020. Commenters stated that the 

final rule should make clear that projects deployed after the baseline year of 2012 will count 

fully towards the interim and long-term emissions goals. 

Commenters stated that hydropower is one of the best tools available in achieving greenhouse 

gas reductions and urged the EPA to value it as such in the rule wherever possible. Commenters 

added that, while it is understandable that the EPA excluded hydropower from the existing 2012 

generation for the purposes of setting state goals, they appreciated that the EPA has identified 

incremental hydropower and hydropower efficiencies as compliance options with state goals and 

strongly urged the EPA to clearly maintain that distinction. 
650 

Commenters stated that the proposed rule, at a minimum, should continue to recognize new and 

incremental hydroelectric power as a compliance tool in meeting greenhouse gas emission 

reduction goals. Commenters noted that hydroelectric power is a significant part of a low-cost, 

reliable and non-emitting resource mix and urged the EPA to consider additional ways to 

recognize the value of hydropower as an invaluable tool to reducing greenhouse gas emissions. 

Commenters expressed strong support for the EPA's position that incremental hydropower and 

hydropower from facilities built or uprated after December 31, 2012 (including small 

hydroelectric facilities) be allowed to be counted toward compliance in state plans, and noted 

that incremental hydropower from turbine additions or replacements at existing dams, as well as 

new hydropower from small dams and in-river hydroelectric facilities would displace fossil-fuel 

generation in the same way as other forms of zero-carbon generation, and that the proposed rule 

should treat all such incremental, zero-carbon resources equally. 

Commenters said that states should be allowed to consider incremental improvements in nuclear 

and hydropower generation from existing facilities as an option for compliance with state goals. 

Commenters stated that new hydroelectric power should be allowed to be included for 

compliance crediting in a state's plan. Commenters stated that Minnesota utilities have entered 

into agreements to deliver Canadian hydroelectric power as a significant part of their resource 

mix, and they expected that the EPA's final rule will allow states to include expanded 

hydroelectric power in the compliance calculations. Commenters stated that expanded power 

could be achieved with additional capacity obtained through the development of new power at 

existing power facilities, or the purchase of previously unused Canadian power. Commenters 

agreed with the EPA that hydroelectric power generation should be available for use in 

compliance determinations as a zero emissions energy source. Commenters stated that hydro is 

also able to quickly respond to changing wind and solar generation, and is a reliable source of 

power. Commenters stated that the DOE is suggesting that the U.S. could increase hydroelectric 

power capacity by 15 percent by retrofitting existing dams with power generation; by allowing 

"new" hydroelectric power - that is, the expanded use of hydroelectric power in a state's 

compliance plan, the EPA will also provide incentives for developing these small hydro 

generation projects. Commenters stated that, according to the 2012 Oak Ridge National 

Laboratory study conducted for the DOE, Minnesota has the potential of 186 MW of generation 

at existing dams that are currently without power. 

Commenters stated that it is important that the EPA clarifies that Building Block 3 requires that 

new hydroelectricity resources qualify as RE under any state plan. Commenters stated that the 

EPA should make it unequivocally clear that states are required to include as eligible resources 

new hydroelectricity that has been constructed after the publication of the proposal or becomes 

commercially available after the publication date without regard to the size of the facility, date of 

installation, or increase in capacity. Commenters added that, because the construction and 

commercial operation of these new resources cannot be precisely timed to coincide with the 

beginning of the compliance obligations, new hydro should be allowed to bank credits for 

generation produced from its commercial operation up to the date the compliance obligation goes 

into effect. 

Commenters agreed with the decision and rationale for excluding existing hydro and agreed with 

allowing incremental hydro to count towards compliance with state goals. 
651 

Commenters stated that, while agreeing with the EPA's decision not to include existing 

hydropower in Building Block 3, since opportunities for increased generation from this resource 

are very limited in comparison to other renewable technologies, they supported including new or 

incremental hydropower. Commenters stated that there are promising opportunities to increase 

electricity generation at existing facilities, unpowered dams, and run-of-river projects. 

Commenters stated that existing hydroelectric capacity should remain excluded from the goalsetting calculation, but any incremental hydropower capacity at an existing facility or a new 

facility should be included in the compliance calculation. Commenters stated that clarification is 

needed in regards to the EPA's treatment of hydropower. 

Commenters stated that new and incremental hydropower should be considered as building 

blocks in meeting state GHG reduction targets. Commenters explained that hydropower makes 

up over half of the portfolio of Northwest generation resources, and is a major piece of the 

Northwest's low-cost, reliable and non-emitting resource mix. Commenters added that many 

public and investor-owned utilities in the Northwest have invested in additional renewable 

resources and will continue to achieve even higher renewable electricity production from wind 

and solar because of the firming support provided by the Northwest hydropower system. 

Comment 14: Several commenters commented about the allocation of hydropower among 

states. 

Response 14: The EPA generally agrees that RE potential is regional. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – a regional 

approach is used to establish CO2 emission performance rates. Generation from incremental 

hydropower added after 2012 is considered, with other low- and zero-emitting sources, to 

displace existing fossil emissions and may be used by states to reduce a rate. For the purpose of 

adjusting a rate generation during the compliance period from sources added since 2012 is 

eligible. Generation from existing hydropower, consistent with the treatment of generation from 

other low- and zero-emitting sources, does not displace existing fossil emissions. Incremental 

generation from another state may, if eligible, be used to adjust a CO2 emissions rate. See 

sections V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters asked the EPA for clarification on which state can claim credit for the renewable 

energy if a hydro generator contracts to sell power generated, as a result of increased production 

at an existing facility, to a distribution entity in a state other than the one where the power is 

generated. Commenters also asked how a state could prevent the loss of this type of compliance 

mechanism. Commenters also asked if it is correct in interpreting that, under the proposed rule, 

"existing" hydropower generation (i.e., the generation that occurred at the 2012 baseline level) 

does not benefit the state in its future obligations to meet the requirements of 111(d). 

Commenters questioned if a distribution entity in another state could purchase that "existing" 

electricity and help the other state meet its compliance obligation. 
652 

Commenters stated that the proposed rule states that renewable energy credits (RECs) and 

renewables purchased from out-of-state can be used in a state's compliance plan, but provides 

little guidance as to how states can account for and use out-of-state RECs and renewable energy. 

Commenters added that the rule needs clarification on how out-of-state resources will be used in 

the implementation of the rule. 

Commenters expressed concern that the proposed rule does not include provisions to allow for 

the interstate use of renewable energy for compliance with the CO2 reduction requirements, and 

that the non-emitting benefits of the Red Rock Hydroelectric Project which is under construction 

in Iowa may be limited to the state of Iowa only. 

Commenters stated that the hydropower output generated from facilities which straddle more 

than one state should be allocated based upon the state in which a contract right holder to the 

hydropower generation is located. Commenters noted that this approach would properly allocate 

the resource for the EPA's purposes regardless of whether a state-by-state or regional approach is 

used to consider allocating renewable energy target levels. 

Comment 15: Commenters stated that the EPA should expand the definition of new hydropower 

units and allow new hydropower to count towards compliance. 

Response 15: The EPA agrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. See sections V.A, V.E, and VIII.K 

of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the final guidelines should expand the definition of new hydropower 

units and allow states to include generation from "new" hydropower generating capacity in a 

state's compliance plan. Commenters referenced two studies, noting that the U.S. has the 

potential to add 60 GW of new hydro capacity by 2025, with estimates that there are more than 

84 GW of total technical potential hydropower in the U.S. Commenters stated that tapping this 

potential will require the use of a number of different technologies, including pumped storage, 

small hydro, converting non-powered dams, and modernizing existing sites. Commenters stated 

the final guidelines should incent the development of these new hydropower resources by 

allowing states to include them in their compliance plans. Commenters stated that the final 

guidelines also should define "new" hydropower broadly to include: new hydropower plants that 

become operational after 2012; power uprates at existing hydropower plants, including those 

undertaken during or after 2012 or a modified baseline period; and any hydropower facilities that 

are relicensed during or after 2012 or a modified baseline period. 
653 

Comment 16: Commenters stated that relicensed hydro facilities should count towards 

compliance goals. 

Response 16: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. Consistent with the treatment of 

relicensing nuclear units, a relicensed hydro facility is not considered a new facility. However, 

any generation from capacity uprates conducted at the time of relicensing may be eligible to 

offset an emission rate. See sections V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that relicensed hydropower facilities should be treated as new units, and 

should be allowed as part of a state's compliance plan. Commenters stated that, in accordance 

with the FPA, FERC issues hydropower licenses for a period between 30 and 50 years, and when 

a license expires, the applicant may apply to FERC for a new long-term operating license. 

Commenters stated that, although the hydropower relicensing process is a lengthy and resourceintensive commitment for electric utilities, hydro relicensing does present opportunities to retain 

or expand zero-emissions generation. Commenters provided additional information on the relicensing of hydropower, noting that approximately 7,420 MW of hydropower came up for 

licensing in 2007, and the top five states for expiring licenses are California, New York, Oregon, 

Washington, and North Carolina, though re-license opportunities exist in many other states as 

well. Commenters also stated that projects undergoing relicensing (and not new projects) make 

up the majority of the proposals being evaluated by the hydropower licensing staff of FERC's 

Office of Energy Projects. 

Commenters stated that the final guidelines should recognize the considerable commitment 

associated with the FERC relicensing process and the significant contribution existing 

hydropower facilities make toward reducing total U.S. carbon emissions. Commenters stated 

that, as currently proposed, the guidelines may negatively affect an electric utility's decision on 

whether or not to embark on the complicated, lengthy and resource-intensive commitment 

required to relicense an existing hydro plant. Commenters added that the final guidelines should 

recognize the value of hydropower relicensing by allowing generation from relicensed facilities 

to be used by states as a compliance tool. 

Commenters stated that the final rule should incentivize keeping, as well as growing, hydro 

generation by crediting, as new hydro, all hydro generation that was relicensed subsequent to 

2005, the starting point for carbon emissions reductions for the proposed rule. Commenters 

stated that hydro relicensing is an expensive and time-consuming process, but one that reconciles 

future operations with the wide range of laws and regulations currently in place. Commenters 

suggested that the final guidelines recognize the value of hydropower relicensing by allowing 
654 

generation from relicensed facilities to be used by states as a compliance tool. Commenters 

added that this is particularly important if the EPA decides to retain the inclusion of 

hydroelectric generation in its calculation of RE potential. 

Comment 17: Several commenters commented on the timeframe for new hydropower that can 

be credited towards compliance with state goals. 

Response 17: The EPA generally agrees. In response to additional analysis and many 

comments, the 111(d) final rule differs from the proposal – generation from incremental 

hydropower added after 2012 is considered, with other low- and zero-emitting sources, to 

displace existing fossil emissions and may be used by states to reduce a rate. Specifically, 

generation during the compliance period from a source added after 2012 is eligible to adjust a 

CO2 emission rate. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated new hydropower coming on-line between 2012 and 2017 needs to be 

recognized for compliance. Commenters stated that AMP has new run-of-the-river hydropower 

assets under construction on the Ohio River in Kentucky and West Virginia, which will come 

online over the next few years and will provide approximately 300 MW of new clean energy and 

capacity to participating AMP members in multiple states. Commenters stated that it is 

absolutely essential that the financial investment that AMP and its participating members have 

made to develop these carbon-free generating assets is recognized by both the U.S. and the EPA 

and that states have the opportunity provide with appropriate credit under state plans in Building 

Block 3. Commenters added that these assets were developed with recognition of the 

contribution that they could make to a carbon-free energy portfolio, and this foresight should not 

be discounted in this regard. 

Commenters stated that the EPA's approach to allowing new hydroelectric energy generation 

after 2017 to be included in a state's compliance demonstration creates a disincentive for utilities 

to proactively invest in and develop non-carbon emitting energy sources. Commenters stated that 

the EPA should allow any hydroelectric energy generation after 2012 to be included in the 

compliance calculation to avoid any disincentives. 

Commenters stated that, if the EPA decided to limit hydropower used for compliance to 

generation from incremental or later-built facilities, an early eligibility date should be chosen so 

as to not adversely impact existing transmission investments and power planning efforts at the 

state and regional level. 

Commenters stated that the proposed approach suggests that if a utility adds incremental capacity 

to an existing dam, builds a new dam, or signs a new Power Purchase Agreement (PPA) for 

generation from a dam built after June 2014, those MWh could be included in the denominator 

of the state's compliance demonstration. Commenters suggested that the EPA credit such 

measures after 2005, or at minimum after the 2012 base year, rather than after the date of the 

proposal. Commenters expressed support for the alternative in which any such measure 
655 

undertaken after the base year of 2012, or after 2005, should be eligible, and the emissions 

impacts of any such measure could be counted and banked prior to 2020, e.g., beginning in 2017. 

Commenters stated that, while the proposal allows states to count incremental hydropower 

generation towards meeting a state's emission rate goal, the proposal does not specify the date on 

which new or incremental hydroelectric generation must have been built or upgraded to count 

toward compliance. Commenters explained that, as a result, it is unclear whether generation from 

new or additional hydropower capacity built or uprated after 2012, 2014, 2017, or some other 

date would count. Commenters stated that to avoid penalizing early actions, the most reasonable 

approach would be to allow states to receive and claim emission credit for generation from any 

uprate initiated after the rule's baseline year (i.e., after 2012, if EPA retains the 2012 as the 

baseline year, or perhaps some earlier year, if EPA elects to use an earlier baseline year). 

Commenters added that such an approach would ensure that any uprate was in fact a reflection of 

new, additional generation that was not included in the baseline used for setting state targets. 

Commenters stated that the EPA should clarify that hydroelectric facilities under construction 

and hydroelectric uprates that occurred after the baseline period can count toward compliance. 

Commenters explained that the proposed rule could be interpreted to prohibit states from 

counting this hydroelectric generation toward compliance since nothing expressly says that 

hydropower generation investments that were made between the baseline and the date of the 

proposal can count towards compliance. Commenters added that this hydropower generation 

should be counted toward compliance to eliminate the disparate treatment of states and 

companies that invested in hydroelectric power. 

Comment 18: Commenters stated that the potential for new hydropower is site specific. 

Response 18: The EPA agrees that the potential for new hydropower is site specific. In response 

to additional analysis and many comments, the 111(d) final rule differs from the proposal, and 

different data sets were used to set CO2 emission performance rates. See section V.E of the 

preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the potential for new hydropower development is very site specific. 

Commenters suggested that the EPA use updated supply curves for new hydropower from 

NREL's ReEDs model that reflect site specific costs and resource potential. 

Comment 19: Several commenters stated that hydropower imported from Canada should 

receive full credit as a source of RE. 

Response 19: The EPA agrees that generation from incremental capacity from Canada may be 

used to adjust a rate, In response to additional analysis and many comments, the 111(d) final rule 

differs from the proposal – generation from incremental hydropower added after 2012 is 

considered, with other low- and zero-emitting sources, to displace existing fossil emissions and 
656 

may be used by states to reduce a rate. For the purpose of adjusting a rate generation during the 

compliance period from sources added since 2012 is eligible. Generation from existing 

hydropower, consistent with the treatment of generation from other low- and zero-emitting 

sources, does not displace existing fossil emissions. Generation from outside of the U.S. may be 

eligible to adjust a CO2 emission rate if the capacity was added after 2012. Generation from 

existing capacity is not eligible. See sections V.A, V.E, and VIII.K of the preamble of the final 

CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that imported Canadian hydroelectricity should be fully credited towards 

achieving CPP compliance when it can be demonstrated that the environmental attributes of the 

hydroelectricity is not being double-counted. Commenters referenced a letter from the Canadian 

Ambassador to the EPA Administrator indicating that seven ongoing transmission development 

projects were being planned to establish infrastructure for transferring electricity generated from 

Canada to the U.S., with timing that would help support state compliance with the EPA's CPP 

proposed 2030 targets. 

Commenters requested that the EPA clarify in the final rule that any qualifying hydro measure 

(incremental or new capacity) is eligible for compliance credit, whether the dam in question is in 

or outside the U.S. Commenters referenced a plan to contract with Manitoba Hydro to reduce 

emissions from affected EGUs in the U.S., and that, provided there is no double-counting, hydro 

from Canada should be eligible for compliance. 

Commenters stated that both new and existing hydropower, including Canadian hydropower, can 

assist U.S. states and regions in cost-effectively meeting their carbon reduction targets, but states 

and utilities need certainty that this resource can be used for compliance in state and regional 

implementation plans. Commenters explained that existing and new hydropower from Canada 

continues to contribute real emission reductions to the U.S. grid, and that many current state 

policies seeking to reduce emissions in the power sector recognize the benefits of both existing 

and new hydropower. Commenters commented that, although there is no language that explicitly 

excludes Canadian hydropower as a compliance option under the CPP, some confusion remains 

as to whether states can use this resource. Commenters added that, given the short timelines for 

states to develop SIPs, a clear statement that Canadian renewables can be used for compliance is 

necessary. Commenters concluded by stating that the CPP should recognize the important role 

that Canada's current and future hydropower resources can play in providing cost-competitive, 

clean and renewable electricity and energy storage, enabling the increased development of wind 

and solar generation in the U.S., and contributing to the stability, reliability and flexibility of 

North America's electricity system. Commenters added that failure to allow states the flexibility 

to use Canadian hydropower imports could undermine the EPA's objective of cost-effectively 

achieving CO2 emissions reductions in the power sector. Commenters also stated that excluding 

Canadian hydropower would penalize U.S. regions and utilities that have arranged for purchases 

of Canadian hydropower and made significant transmission investments as part of their strategies 

to pursue cost-effective emission reductions. 

Commenters stated that there are significant transmission interfaces between the RGGI region 

and Canada, and the number of such connections is likely to increase in the future. Commenters 
657 

explained that electrical imports are typically power purchase agreements that are based on 

surplus hydropower in Canada, and, inasmuch as such power transfers can be key components of 

reliability in New York State, the proposed rule should not restrict the continued use of these 

important emission-free generation resources. 

Commenters stated that the proposed guidelines fail to recognize the value of new and imported 

hydropower in providing affordable, zero-emissions power and do not incent their continued 

operation and development. Commenters stated that the EPA has failed to recognize the value of 

new and imported hydropower, both interstate imports and international imports and particularly 

hydropower imported from Canada, in providing affordable, zero-emissions power in certain 

regions of the country. Commenters stated that the EPA does not propose to allow states to 

include existing hydropower in state compliance plans. Commenters stated that if the EPA does 

determine to allow states to include existing hydropower for compliance, states should also be 

able to use imported hydropower. Commenters stated that the EPA registers legitimate concerns 

about the annual variability of hydropower generation, and that using existing hydropower to set 

state emission rate goals would create significant compliance risks for many states by making 

goals very stringent. However, commenters stated, that if the final guidelines allow states to use 

existing hydropower, states should be allowed to use both interstate and internationally imported 

hydropower. Commenters noted that many states already recognize the value of imported 

hydropower in helping meet their energy demand and clean energy goals. Commenters stated, 

for example, that Connecticut passed a law in June of 2013 that would allow for large-scale 

hydropower from outside the region to count toward the state's RPS requirement in certain 

circumstances. Commenters also stated that a 2008 agreement between Manitoba Hydro and the 

Wisconsin Public Service Corporation allows the latter to import 500 MW of power from two 

Nelson River projects. Commenters also stated that NU Transmission Ventures Inc. is 

developing a $1.4 billion Northern Pass transmission line project that would allow for the 

transmission of 1,200 MW of hydroelectricity from Hydro-Quebec into New England's energy 

system. Commenters stated that these example clearly, demonstrate that states see a value in 

imported hydropower. Commenters also stated that allowing the use of imported hydropower 

could help states expand their use of other forms of renewable generation, helping to meet the 

EPA's goals of both reducing CO2 emissions and increasing the use of renewable energy and 

other zero-emitting sources. Commenters stated that, in some circumstances, hydropower can 

play the same role as natural gas-based units by providing backup for variable RE generation. 

Commenters stated that the benefits of such an approach are exemplified in the partnership 

between Minnesota Power and Manitoba Hydro under which, beginning in 2020, Minnesota 

Power will use 250 MW of electricity supplied by Manitoba Hydro's Keeyask hydro plant to help 

balance a wind farm in North Dakota. Commenters also stated that, if states are permitted to 

include international hydropower in compliance plans, the EPA should address concerns about 

potential double-counting of generation or emissions reductions from this resource. Commenters 

stated, for example, that states could be required to demonstrate that the emission benefits of the 

hydropower are not being used by other entities, either in the U.S. or in Canada. 

Commenters stated that the trade in electricity across the U.S. and Canada border is longstanding 

and significant, and the U.S. and Canada effectively share a single North American grid totaling 

200,000 miles of high-voltage transmission lines; in 2012, the total amount of electricity that 

flowed across the border from Canada to the U.S. and vice versa exceeded 70,000,000 MWh. 

Commenters stated that, as a result, millions of Americans and Canadians depend on the reliable 
658 

operation of this integrated grid every second of every day. Commenters also noted that several 

states have acted to diversify their energy portfolios through the recognition of Canadian 

hydropower, and, in the process, have been able to reduce their carbon emissions and also have 

planned to further increase the role of Canadian hydropower in their future energy mix to 

achieve additional emissions reductions, enhanced grid reliability, and support intermittent 

renewable generation, such as wind and solar. Commenters explained that that imports of 

Canadian hydropower often displace forms of electricity generation with higher greenhouse gas 

emissions and can, therefore, play a significant role in lowering carbon emissions from other 

sources of energy in the U.S. Commenters also stated that Canadian hydropower is highly 

responsive, meaning that power from Canadian hydroelectric reservoirs can be "saved" for when 

other, intermittent sources of energy, such as wind and solar are online, and used later when 

these sources are unavailable, thus ensuring that power is available when it is needed. 

Commenters explained that Canada has significant potential hydropower resources that could be 

developed in the future, and by allowing Canadian hydropower to be credited in state plans, 

more of this available capacity may be tapped in the future, replacing carbon-intensive 

generation as increasing amounts of hydropower come online. 

Commenters stated that, while the provisions of the final rule remain uncertain, they asserted that 

the EPA's original proposal is reasonable and achievable for Minnesota, provided the EPA 

ensures that new, imported hydroelectric power can be fully counted for compliance purposes. 

Commenters stated that, within the compliance period of this rule, Minnesota will also begin the 

planning process for replacing up to 900 MW of nuclear generation, and therefore, it is important 

to allow states to consider expanded contracts of hydroelectric power from Canada as a means of 

replacing one zero-emitting generation technology with another. Commenters stated that, if the 

EPA adopts its proposed alternative approach for renewable energy targets as described in the 

proposed rule, Minnesota will have even more zero-emitting generation to secure. Commenters 

recommended that the EPA affirmatively state that hydroelectric power installed nationally and 

internationally post-2012 may be included in a state's plan. 

Commenters stated that the proposed rule is unclear whether the credit for new/incremental 

hydro applies regardless of whether the dam is in or outside of the U.S. Commenters remarked 

that any incremental or new capacity should be eligible for compliance credit, even if the dam in 

question is in or outside the United States, as long as the hydro MWh are not counted in another 

state's 111(d) plan. 

Comment 20: Commenters stated that hydropower imported from outside the US should count 

towards compliance. 

Response 20: See the response to Comment 19. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the CCP should give credit for hydropower that is imported from 

Canada. Commenters explained that North America's hydropower resources provide multiple 

benefits at a time when the need for reliable, clean and economically competitive resources is 

critical, and, for these benefits to continue, it is important that policies not create any artificial
659 

barriers to electricity trade and that they facilitate access to all clean energy resources. 

Commenters remarked that not allowing states the flexibility to use Manitoba Hydro's 

hydropower exports could undermine the EPA's objective of cost-effectively reducing CO2 

emissions from the power sector and penalize U.S. regions and utilities that have arranged for 

purchases of Canadian hydropower and made significant transmission investments as part of 

their strategies to pursue cost-effective emission management. Commenters noted that the 2013 

MISO 'Manitoba Hydro Wind Synergy Study' concluded that wind synergy benefits from the 

expanded use of hydro generators in Manitoba produced a weighted average load cost savings in 

the U.S. Midwest of $430 million annually. Commenters added that failure to recognize 

Canadian hydropower under the CPP could also result in perverse incentives for U.S. utilities 

that would undermine the Agency's goals. In conclusion, commenters stated that, in order to 

build upon this ongoing relationship between Manitoba Hydro and its U.S. customers, the final 

rule should clearly specify that Canadian hydropower can serve as a compliance option under 

state implementation plans and that the definition of "later-built" facilities not adversely impact 

existing transmission investments and power planning efforts at the state level. Commenters also 

specifically requested that the EPA clarify if states can use incremental hydropower from Canada 

as a compliance option under the CPP. Commenters noted that, given the short timelines for 

states to develop SIPs, it is important for the EPA to provide a clear statement indicating that 

Canadian renewables will be eligible compliance options for states, enabling their role as costeffective, low-carbon resources. 

Comment 21: Commenters asked for clarification regarding the eligibility of new and 

incremental hydropower. 

Response 21: The EPA agrees with need to clarify the date after which incremental capacity 

may be added and its generation during the compliance period be eligible to adjust a rate. In 

response to additional analysis and many comments, the 111(d) final rule differs from the 

proposal – generation from incremental hydropower added after 2012 is considered, with other 

low- and zero-emitting sources, to displace existing fossil emissions and may be used by states to 

reduce a rate. Incremental hydro includes generation from outside of the U.S. Generation from 

existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the proposed rule is unclear whether the provision to give credit for new 

or incremental hydro applies regardless whether the new/incremental hydro is in or outside of the 

U.S. 

Commenters stated that the proposed rule is vague regarding the earliest date an incremental dam 

upgrade project that increases the electricity generating capacity of a dam could be completed 

and still have the incremental capacity portion of the dam considered a renewable electricity 

facility eligible to be used for compliance with the 111(d) targets. Commenters added that the 

EPA should be clear that incremental nameplate capacity increases at existing hydroelectric 
660 

dams completed after December 31, 2012 are eligible to be used for compliance with 111(d) 

targets. 

Commenters requested that the EPA clarify the line between new and existing resources and 

suggested that any hydropower assets coming on line after the 2012 baseline year in the proposal 

should be defined as new and be available to receive credit for use by states in their compliance 

plans. Commenters referred to new hydropower assets that will be coming online in 2015 to 

2016 that should be available for state compliance planning and explained that these zeroemission projects involve a long development time for initial design, permitting and construction 

and substantial upfront costs. Commenters added that, in addition to the long development time, 

these projects have a long lifespan and are financed for 35 years with an expected operational 

period of greater than 60 years and should receive appropriate accounting within the Section 

111(d) structure. 

Commenters stated that clear guidance on the definition of eligible hydropower is needed, 

explaining that both existing and new hydropower from Canada continue to contribute real 

emission reductions to the U.S. grid. Commenters added that, if only new and incremental 

hydropower is allowed as a compliance option, then the earliest possible eligibility date should 

be considered. 

Comment 22: Commenters stated that the proposed rule should support hydropower and could 

have adverse impacts on its use and development. 

Response 22: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. The 

approach to establishing CO2 emission performance rates has changed, and hydropower is 

treated consistently with other low- and zero-emitting sources. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data year and use of 2012, 

see section VI.D of the preamble to the final CPP for EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Several commenters commented on the general treatment of hydropower in the proposed rule 

and potential adverse effects on the future of hydropower. Commenters expressed concern that 

the proposed rule could have adverse impacts on the use and development of hydropower 

resources. Commenters stated that hydropower, as a resource, could be put at a disadvantage if it 

is treated differently from other non-emitting renewable resources due to its exclusion from the 

denominator of the BSER calculation. Commenters explained that the discriminatory treatment 

of hydropower could lead to less hydropower production and the lack of incentives to maximize 

utility investment in least-cost energy efficiency measures. Commenters also stated that 

hydropower's absence may lead to hydropower being largely "invisible" as states make 

compliance choices, which, commenters stated would be particularly disturbing in the event 

proposals are made to degrade hydropower capability or even retire hydropower units. 
661 

Commenters stated that there is no good public policy interest served by creating a policy 

environment that may create a preference for other generating resources over hydropower. 

Commenters stated that the EPA should clarify that states can and should use hydropower as a 

compliance option, and it would be unfortunate if a carbon reduction rule inadvertently resulted 

in the premier renewable non-GHG emission resource being sub-optimized or replaced with 

higher- cost resources (that may even emit GHGs) due to the potential incentive structures 

derived from the BSER calculation. Commenters concluded by stating that hydropower should 

not be forgotten as an important part of the solution, particularly in the Northwest, where states 

are starting their emission-reduction journey from a position of GHG-emissions strength that 

should not be discounted. 

Commenters stated that the EPA must provide more definitive and clear direction and guidance 

to the states that the Agency supports existing, incremental and new hydropower generation as a 

compliance option under the rule and that states should be encouraged to examine ways to 

incorporate new hydropower generation into their planning. 

Commenters stated that hydropower is the nation's largest source of renewable electricity, and 

the EPA should support policies that recognize the many benefits of hydropower and promote 

hydropower's continued use, enhancement and expansion. Commenters provided an extensive 

list of the benefits of hydropower. Commenters stated that, by ignoring the contribution from 

hydropower in reducing the nation's carbon intensity, the EPA falsely inflates the U.S. 

contribution to global carbon emissions. 

Commenters stated that the EPA must alter its negative stance toward hydropower, as evidenced 

by comments in its TSD, which presumes there will be no development of new hydro. 

Commenters remarked that, in President Obama' climate speeches in both 2013 and 2014, he 

spoke about the vast untapped potential that exists at non-powered federal dams, and encouraged 

the electric industry to take advantage of this clean, non-emitting and renewable resource. 

Comment 23: Commenters stated that the final rule should stimulate re-investment in the federal 

hydropower system. 

Response 23: The EPA agrees that incremental hydropower can be used to adjust a rate. In 

response to additional analysis and many comments, the 111(d) final rule differs from the 

proposal – generation from incremental hydropower added after 2012 is considered, with other 

low- and zero-emitting sources, to displace existing fossil emissions and may be used by states to 

reduce a rate. For the purpose of adjusting a rate generation during the compliance period from 

sources added since 2012 is eligible. Generation from existing hydropower, consistent with the 

treatment of generation from other low- and zero-emitting sources, does not displace existing 

fossil emissions. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding 

data year issues for hydrologic variability, see section VI.D of the preamble to the final CPP for 

EPA’s response to this comment. . 

The following are summaries of the specific public comments under this comment: 

Commenters stated the final rule should stimulate a re-investment in the federal hydropower 

system, noting that, for many years, billions of dollars of general hydropower operations and 

maintenance work, as well as additional upgrades at these federal facilities have not been 
662 

budgeted or appropriated, particularly in this time of fiscal constraint. Commenters stated that 

the final rule should credit cooperatives and other federal power customers for any incremental 

hydro capacity and energy added to federal projects after 2012. Commenters added that the EPA 

should factor into its interim and long-term compliance targets the role that existing federal 

hydropower generation plays in reducing the baseline CO2 emissions. Commenters concluded by 

stating that the uncertain treatment of existing hydropower generally under the rule begs the 

question of how hydroelectric generation from the existing federal system will be recognized and 

accounted for, and whether and/or how this generation is treated could have significant impacts 

on both state goals and compliance plans. 

Comment 24: Commenters expressed support for the alternative approach and stated that the 

EPA should clarify the role of hydropower in the alternative approach. 

Response 24: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. Generation from existing hydropower, consistent with the treatment of 

generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding data 

year issues for hydrologic variability, see section VI.D of the preamble to the final CPP for 

EPA’s response to this comment. . 

The following are summaries of the specific public comments under this comment: 

Commenters expressed support for the alternative approach to quantifying renewable generation 

based on a state-by-state assessment of RE technical and market potential and commented on the 

relationship between the approach used and the inclusion of hydropower. Commenters stated 

that, in adopting the alternative approach, it is important that the role of hydroelectric generation 

and nuclear be made clear, as well as, leveraged. Commenters added that the impact of including 

hydroelectric resources as part of the target-setting methodology creates a differential between 

Northeast states' existing renewable generation and their derived 2030 proposed renewable 

energy targets that is unrivaled in its stringency and may not be technically achievable without 

the inclusion of existing hydroelectric resources as a compliance option. 

Commenters stated that the alternative approach is more appropriate, as it uses a more precise 

analysis of the technical and economic potential for the development of additional renewable 

generation in each state. Commenters stated that, if the regional RPS-based estimates method is 

adopted instead, then the EPA must acknowledge the fact that New York's RPS recognizes 

existing hydropower resources. 

Comment 25: Commenters did not agree with the alternative approach. 
663 

Response 25: The EPA agrees to clarify the approach to hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – The approach to 

establishing CO2 emission performance rates has changed, and hydropower is treated 

consistently with other low- and zero-emitting sources. Generation from existing hydropower, 

consistent with the treatment of generation from other low- and zero-emitting sources, does not 

displace existing fossil emissions, while generation from new or uprated capacity does. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. Regarding 

data year and use of 2012 data, see section VI.D of the preamble to the final CPP for EPA’s 

response to this comment. . 

The following are summaries of the specific public comments under this comment: 

Commenters did not agree with the alternative approach to quantifying renewable generation. 

Commenters stated that the EPA's alternative approach begins with a state's 2012 hydropower 

production percentage then adds in the renewable goal percentage. Commenters explained that 

the alternative approach presumes a state's hydropower production remains constant at 2012 

levels, which is not a realistic presumption. 

Comment 26: Commenters stated that the EPA should clarify why hydropower is excluded from 

the proposed approach. 

Response 26: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. Generation from existing hydropower, consistent with the treatment of 

generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters asked the EPA to discuss in more detail the reasons for excluding hydropower from 

the proposed approach, including barriers to hydropower expansion (environmental and 

navigation effects of dams). Commenters also asked the EPA to discuss why the proposed 

Building Block 3 approach excludes hydropower, but the alternate renewables approach (as 

described in the "Alternate RE Approach" TSD) seems to favor inclusion of hydropower, 

although numbers are given for a scenario where hydropower is excluded. 

Comment 27: Several commenters commented on the inclusion of hydropower in state RPS 

goals and how that should be handled. 
664 

Response 27: The EPA agrees to clarify the approach to hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. Generation from existing hydropower, consistent with the treatment of 

generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions, but potential uprates to existing hydropower facilities may be included in the 

establishment of CO2 emission performance standard. See sections V.A, V.E, and VIII.K of the 

preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters questioned how the EPA accounted for the fact that many of these state RPS goals 

include existing hydropower and credit for energy efficiency measures, yet existing hydropower 

does not appear to count toward compliance with state goals, and energy efficiency is already 

accounted for in Building Block 4. 

Commenters stated that some state RPS include hydro as an allowable resource, and therefore, 

the historic renewable energy in those states that the EPA used to determine RE requirements in 

Building Block 4 are artificially high. 

Commenters stated that the EPA should remove hydroelectric power from the goal computation 

methodology both from the state baseline of existing renewable generation and the portion of a 

state's RPS that is expected to be met from existing hydropower. Commenters added that, if the 

EPA is unable to calculate the amount of existing hydro included in individual state RPS, states 

with RPS requirements that are clearly distorted by inclusion of existing hydro be removed from 

the Northeast average. Commenters provided a figure showing the 2012 distribution of RE in the 

Northeast states. Commenters stated that, alternatively, the EPA could adopt a uniform 20 

percent target for the nation because regional targets bear no relationship to the techno-economic 

ability of states to meet the regional targets and therefore are arbitrary. Commenters explained 

that a uniform 20 percent target, however, is consistent with the BSER by requiring all regions to 

meet the standards set by the leading states/regions. 

Commenters stated that existing RPS-eligible hydropower should count towards compliance with 

state goals, in order to maintain consistency with the goal-setting process and state RPS 

programs. Commenters explained that the EPA's proposed RE approach to establishing Building 

Block 3 targets is based on an average of the RPS goals of the states within a region that have 

RPS goals, and, although state RPS goals vary, they were established for the most part with the 

inclusion of certain hydropower resources as RPS-eligible resources. Commenters added that 

California entities' procurement decisions and compliance planning are long-term processes that 

include contracting with projects under long-term power purchase agreements based on current 

state law. Commenters further explained that California's RPS allows certain types of 

hydroelectric resources (mostly small hydroelectric generation), and hence, the Building Block 3 

target is partially set based upon existing RPS-eligible hydroelectric resources. Commenters 

stated that, therefore, any existing RPS-eligible hydroelectric generation should count towards 

compliance. 
665 

Commenters also expressed opposition to including hydropower when setting state targets. 

Commenters acknowledged the zero-carbon emissions from hydro generation, but do not believe 

that compliance targets should be decremented by subtracting that generation, which would 

relieve Idaho from its obligation to reduce its portion of coal plant emissions. Commenters added 

that most hydropower is generally not considered a "renewable" energy resource in calculations 

for utility compliance with state renewable portfolio standards. 

Commenters stated the EPA must adjust regional RE goals to reflect the fact that generation 

from domestic and international existing hydropower resources may not be used for compliance. 

Commenters stated that hydropower generation is an essential zero-carbon emitting resource and 

reduces the overall mass emissions of the U.S. energy sector. Commenters noted that, in 2012, 

6.8 percent of electricity generation came from hydropower, making it the largest RE resource. 

Commenters also stated that nearly every state allows generation from certain existing 

hydropower facilities, including in-state, out-of-state, and international facilities, to be used for 

RPS compliance, and hydropower generation is used to satisfy a large portion of many state RPS 

requirements. Commenters noted that, when determining the regional RE targets, however, the 

EPA does not appear to have adjusted state RPS targets to exclude existing hydropower. 

Commenters stated this approach is inconsistent with the EPA's stated approach to hydropower 

in setting state goals. Commenters stated, moreover, that the proposed guidelines do not allow 

the use of these resources for compliance with the proposed state-specific goals. Commenters 

stated that, if the EPA restricts the resources available for compliance, despite their role in states' 

existing RPS programs, the Agency must also reduce the state RE goals to account for this 

limitation. Commenters stated it is arbitrary for the EPA to use state RPS mandates that 

explicitly contemplate the use of certain hydropower resources to set regional or state RE goals 

for 111(d) purposes, but not allow these resources to be used for compliance, as it increases state 

goal stringency while simultaneously depriving states of an important compliance tool. 

Commenters stated that the same issue arises when considering pumped hydro storage facilities; 

the EPA's proposed formula penalizes states that have prudently constructed pumped hydro 

facilities because the emissions and MWh from plants used to charge the storage system are 

included in the RE goal setting equation, yet the megawatt hours discharged from the storage 

resources to provide emissions-free electricity are not. Commenters added that, consequently, 

states with large pumped hydro facilities, such as Michigan, have more stringent emissions 

reduction goals than is warranted. Commenters concluded by stating that the EPA's assumptions 

and methodology for calculating RE goals should be consistent with state RPS rules and include 

all RPS-eligible generation in states' compliance calculation, including RPS-eligible hydropower 

and pumped storage. Commenters stated if the EPA is not going to allow existing hydropower as 

a compliance tool, the state goals cannot be based on RPS requirements that include hydropower 

or in-state deployment of hydropower to date. 

Commenters pointed out that certain hydroelectric power can be used by an electric power 

supplier to comply with the requirements of the RPS and stated that, for example, an IOU can 

use small scale hydroelectric power (<10MW) to comply with its RPS requirements. 

Commenters added that North Carolina RPS imposes no limit to the amount that can be used for 

compliance, and theoretically, an IOU could satisfy its entire requirement by purchasing small 

scale hydroelectric power. Commenters provided a table that shows the estimated amount of 

small scale hydro used by IOUs for compliance with the RPS based on historical data used for 

compliance to date. Commenters also stated that, for EMCs and municipalities, 30 percent of 
666 

their total RPS requirement can be fulfilled with certain hydroelectric purchases, which include 

allocation from SEPA comprised of 23 water projects operated by the U.S. Army Corps of 

Engineers. Commenters stated that North Carolina's RPS imposes no requirement that a SEPA 

allocation originate from electricity generated in the state and, if sufficient hydro generation is 

not available to satisfy annual SEPA allocations, SEPA may utilize replacement power from any 

available source of generation, including non-renewable generation. Commenters provided a 

table that shows the estimated amount of hydro used by EMCs and municipalities for compliance 

with the RPS, based on historical data used for compliance to date, and noted that the estimate is 

very conservative in that it projects that the EMCs and municipalities will only comply with 9.5 

percent of their obligation through hydro, even though they are authorized to use up to 30 

percent. 

Commenters stated that the Agency should resolve the inconsistency between including existing 

hydroelectric generation in developing the target for New York and the other states in the 

Northeast region and disallowing the use of existing hydropower in complying with that target. 

Commenters explained that, in order to take into account the varied availability of different 

renewable resources across regions of the U.S., the EPA used the state-level effective renewable 

energy levels derived from RPS requirements to quantify regional targets consistent with states' 

reasonable level of RPS development. Commenters stated that, in doing this for the Northeast 

region, the EPA inadvertently included existing hydroelectric generating facilities when 

establishing the region's RPS goals, because those resources are included as available resources 

in each state's RPS target, but for other states with relatively large amounts of existing 

hydroelectric generation, the EPA based the states' target on RPS levels that do not include 

hydroelectricity. As an example, commenters stated that the EPA used 15 percent as the RPS for 

the state of Washington, but if existing hydropower was included in Washington's RPS, the 

renewable target for Washington would be in excess of 75 percent. Commenters concluded by 

stating that, since existing hydroelectric generating sources are not eligible for compliance 

purposes, the calculation of the renewable energy portion of Building Block 3 for the Northeast 

is technically incorrect. Commenters explained that the EPA can correct this by reducing each 

state's effective renewable energy target level to subtract out the amount of existing hydro that is 

accounted for in each state's RPS goal. Commenters added that the appropriate RE level for each 

state in the Northeast region would then be 22 percent for Connecticut, 18 percent for Maine, 19 

percent for Massachusetts, 23 percent for New Hampshire, 10.7 percent for New York, and 13 

percent for Rhode Island. Commenters added that, if the EPA makes these adjustments, the 

renewable target for the states in the Northeast region would decrease from 25 percent to 18 

percent, and New York's renewable energy building block target would decrease from 24,262 

GWh to 17,043 GWh. As an alternative, commenters stated that the EPA could also correct its 

apparent error by allowing existing hydroelectric resources to be used for compliance purposes, 

rather than removing such resources from a state's goal computation. Commenters explained 

that, for states that have RPS programs that were used to set state targets, any non-emitting 

renewable energy eligible to comply with the relevant RPS regulations could be counted toward 

compliance, including generation from currently-eligible existing hydroelectric generation, and 

this would be consistent with the concept that state RPS targets are reflective of state 

expectations for future generation from technologies included in the programs. 

Commenters stated that renewable technologies considered in the computation of state goals in 

Building Block 3 should also be available to states as a compliance option. Commenters 
667 

explained that if a state's RPS included hydroelectric power and the renewable generation 

potential applied to each region is based on the RPS of states within that region, then the 

qualifying hydroelectric power should be considered as a compliance mechanism. Commenters 

suggested that the EPA provide more clarification on qualifying renewable energy in the final 

rule and ensure that renewable generation used in the calculation of targets can also be used in 

the determination of compliance. 

Commenters stated that nearly every state RPS allows generation from existing hydropower 

facilities to be used for compliance and accounts for a large portion of many state RPS 

requirements. Commenters noted that the EPA states in the Abatement Measures TSD at 4-5 that 

the EPA adopted a broad interpretation of RE generation to include any non-fossil renewable 

fuel type, with the exception of generation from existing hydroelectric power facilities when 

calculating baseline levels. Commenters added that, when determining the regional renewable 

targets based on the RPS requirements, the EPA does not appear to have adjusted the targets to 

exclude existing hydro. Commenters stated that this is inconsistent, and if the EPA restricts 

hydropower as a resource for compliance, the EPA must also reduce the state goal to account for 

that treatment. Commenters stated that it clearly recognizes the value of hydropower in a clean 

energy portfolio, providing additional information on TVA, and noting that TVA maintains 29 

conventional hydroelectric dams throughout the Tennessee River system and one pumpedstorage facility for the production of electricity. Commenters stated that the variability of 

hydroelectric generation is due to the weather-related variance in rainfall and runoff from year to 

year, along with other commitments listed previously. Commenters stated that this makes it 

challenging to set firm target levels for hydroelectric generation because the amount of rainfall 

and runoff is out of its control, and including some average amount of hydroelectric generation 

would only increase the compliance risk for the states that are served by TVA. 

Commenters stated that there is inconsistency in the inclusion of existing hydroelectric 

generation in the "total generation" for a state and in developing the goals, but disallowing 

existing hydroelectric generation when determining compliance. Commenters stated that to 

correct this inconsistency, the EPA should exclude existing hydroelectric generation from any 

determination of North Dakota's "total generation."

Comment 28: Commenters commented on the implications of a regionalized approach for 

reallocating hydropower across states. 

Response 28: The EPA agrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – the approach to establishing CO2 emission 

performance rates has changed. See sections V.A and V.E of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters commented on the implications of a regionalized approach for reallocating 

hydropower across states. Commenters stated that the Agency's request for comment on a 

regionalized approach for hydropower allocation is a tacit recognition that existing hydropower 

is a significant resource, but it is unclear what effect this change would have on specific state 

goals since the EPA provides no specific information on the recalculation of the RE building 
668 

block under this approach. Commenters remarked that it seems likely that this approach has the 

potential to create dramatic shifts, and some states with vast hydro resources are adjacent to 

many states with few hydro resources. Commenters added that this has the potential to cause 

such significant shifts in state goals that it would require a wholesale revision of the manner in 

which the state goal targets are calculated. 

Comment 29: Several commenters discussed the need for consistency in the goal computation 

process and compliance options, specifically for hydropower. 

Response 29: The EPA agrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – the approach to establishing CO2 emission 

performance rates has changed, and hydropower is treated consistently with other low- and zeroemitting sources. See sections V.A, and V.E, of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that this consistency between renewable technologies used in the goal 

computation process and available to states as compliance options is especially critical should 

the EPA choose not to adopt their recommendation offered with respect to the alternative 

methodology for Building Block 3. Commenters stated, specifically, if the EPA chooses to 

maintain the current methodology, it must address the issue created for early actor states that 

include hydroelectric power as a qualifying resource in their RPS portfolios. Commenters 

recommended that the EPA either: (1) include hydroelectric resources in the goal computation 

procedure, and permit all existing and future hydroelectric resources to qualify for compliance 

purposes; or, (2) remove hydroelectric power from the goal computation methodology and 

permit only new or incremental hydroelectric renewable resources to qualify as compliance 

measures. Commenters stated that it respectfully emphasizes that a decision by the EPA to retain 

the current Building Block 3 methodology, coupled with a decision not to adopt one of the above 

proposals with respect to hydroelectric resources, would artificially distort the objective of 

certain early actors' existing RPS state policies. Commenters stated that state RPS targets are 

reflective of state expectations for future generation from technologies included in the RPS 

portfolio, and the RPS targets set by the Northeast regional states are dependent to varying 

degrees on the inclusion of hydroelectric resources for RPS compliance purposes. Commenters 

provided a graph showing the impact of including hydroelectric resources as part of the targetsetting methodology creates a differential between the Northeast states' existing renewable 

generation and their derived 2030 proposed renewable energy targets that is unrivaled in its 

stringency and may not be technically achievable without the inclusion of existing hydroelectric 

resources as a compliance option. 

Commenters stated that, if the EPA were to finalize the proposed RPS-based approach to the 

renewable energy component of Building Block 3, the Agency should review its methodology to 

ensure that the measures used to develop the state targets are consistent with the measures 

allowed for compliance. Commenters stated that some existing hydropower resources, which the 

EPA proposes to exclude from its assessment of 2012 renewable generation and from use in 

compliance plans, are eligible for compliance with renewable standards. Commenters stated that, 
669 

if the EPA retains its treatment of existing hydropower, the EPA should adjust the RPS levels to 

exclude the associated generation from hydropower. 

Commenters stated that, when determining the regional RE targets, the EPA does not appear to 

have adjusted state RES targets to exclude existing hydropower, which is inconsistent with the 

EPA's stated approach to hydropower in setting state goals. Commenters added that the proposed 

guidelines do not allow the use of these resources for compliance with the proposed statespecific goals. Commenters stated that, if the EPA restricts the resources available for 

compliance, despite their role in states' existing RES programs, the Agency must also reduce the 

state RE goals to account for this limitation. Commenters added that it is arbitrary for the EPA to 

use state RES mandates that explicitly contemplate the use of certain hydropower resources to 

set regional or state RE goals for 111(d) purposes, but not allow these resources to be used for 

compliance as it increases state goal stringency while simultaneously depriving states of an 

important compliance tool. Commenters stated that the same issue arises when considering 

pumped hydro storage facilities in that the EPA's proposed formula penalizes states that have 

prudently constructed pumped hydro facilities because the emissions and MWh from plants used 

to charge the storage system are included in the RE goal setting equation, yet the megawatt hours 

discharged from the storage resources to provide emissions-free electricity are not. Commenters 

stated that, as a result, states with large pumped hydro facilities, such as Michigan, have more 

stringent emissions reduction goals than is warranted. 

Commenters stated that there are inconsistencies in how the Agency has considered existing 

hydropower in state goal determinations, and these inconsistencies result in quantifiable 

repercussions that lead to inaccuracies in the stated results of the EPA's proposed plan. 

Commenters explained that the inaccuracies are the consequences of the CPP's disregard for 25.8 

percent of domestic production, specifically the subset that is responsible for 80.5 percent of 

carbon-free generation as stated above. Commenters stated that, as a result of the exclusion of 

hydroelectric and nuclear power contributions, any claims of carbon intensity are inaccurate and 

these generation inconsistencies must be addressed as they significantly alter the stated results of 

enacting the CPP. Commenters stated that, in the case of hydroelectric power production, the 

EIA confirms that non-hydroelectric based electrical production routinely out-produces 

hydroelectric generation and non-hydroelectric power is anticipated to permanently outpace 

hydroelectric production in the coming years. Commenters stated that, while hydroelectric power 

currently represents 52 percent of the domestic renewable portfolio, wind-based production 

accounts for 32 percent, and the EPA's depiction of hydroelectric production dwarfing less 

developed sources of renewable energy is inaccurate. 

Commenters stated that excluding existing hydropower in state goal calculations yields strange 

results for states that rely heavily on hydropower. As an example, commenters explained that 

conventional hydropower constituted about 70 percent of Idaho's total generation in 2012 and 

Idaho's actual CO2 emission rate in 2012 was only 94 lb/MWh,, but by excluding hydropower, 

the EPA came up with a target rate of 228 lb/MWh for the year 2030, which is 140 percent larger 

than Idaho's 2012 CO2 emission rate. Commenters stated that the proper way to calculate CO2 

emission rates is to include all CO2 emissions from affected generation units and divide that by 

all generation in a particular state in any year, and doing this consistently for each year going 

forward can create a technology neutral rule that is consistently based on a well-defined best 
670 

system of emission reduction, which must include technical feasibility, economics, and non-air 

quality considerations. 

Commenters questioned why the EPA used all generation, including existing hydropower, to 

calculate the renewable energy cap, while, at the same time, excluding existing hydropower from 

the 2012 existing renewable baseline amount. Commenters also noted that, according to the 

proposal, the production of electricity from hydro generation was not considered in calculating 

the baseline and thus, was not projected out in calculating state goals, and that incremental 

generation from existing or later built facilities could be used for compliance. Commenters 

continued with the following questions to the EPA: a. How is "incremental hydropower 

generation from existing facilities" calculated? i. Is it the total amount of hydro generation 

actually produced over the 2012 baseline? ii. Is it the increase in capacity resulting from 

upgrades to facilities that could potentially boost production depending on demand and 

dispatching decisions?" 

Comment 30: Commenters discussed a calculation error in the alternate RE approach. 

Response 30: The EPA acknowledges the comment. Please see V.E.6 for a discussion of the 

quantification of renewable energy generation potential. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that there is an error in the calculations for the Alternate RE Approach, 

Option 1, in the spreadsheet accompanying the technical support document. Commenters 

explained that hydropower potential used for the calculation was intended to use the greater of 

the feasibility determination or 2012 generation, but the spreadsheet used the full technical 

potential. Commenters concluded by stating that the alternative approach should not be finalized, 

but in the event that it is, this error should be addressed. 

Comment 31: Commenters stated that the EPA should clarify that states need not alter their 

definitions of RPS-eligible resources in order for new or incremental hydro to be eligible for 

inclusion in a state's 111(d) plan. 

Response 31: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – the approach to 

establishing CO2 emission performance rates has changed, and hydropower is treated 

consistently with other low- and zero-emitting sources. Generation from incremental hydropower 

added after 2012 is considered, with other low- and zero-emitting sources, to displace existing 

fossil emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions, regardless of its location. See 

sections V.A, V.E, and VIII.K of the preamble of the final CPP. 
671 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA should clarify in the final rule that states need not alter their 

definitions of RPS-eligible resources in order for new or incremental hydro to be eligible for 

inclusion in a state's 111(d) plan. Commenters pointed out that some states' RPS rules do not 

consider large hydro to be a qualifying resource, and the commenters gave examples, explaining 

that hydro larger than 100 MW is excluded from Minnesota's RPS, and hydro larger than 60 MW 

is excluded in from Wisconsin's RPS. Commenters pointed out that facilities in Canada, many of 

which exceed the thresholds above, would nonetheless reduce emissions from affected EGUs in 

the United States, and any measure that reduces emissions from affected EGUs should be 

eligible in 111(d) plans. 

Comment 32: Commenters stated that the EPA cannot impose limits on which hydropower 

resources should be available for compliance. 

Response 32: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. Generation from existing hydropower, consistent with the treatment of 

generation from other low- and zero-emitting sources, does not displace existing fossil 

emissions. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that it is not within the scope of the proposed rule for the EPA to impose 

limits on which hydropower resources should be available for compliance, other than excluding 

existing hydropower as it has proposed. 

Comment 33: Commenters stated that the rule should treat at risk hydro in the same way that at 

risk nuclear power is handled. 

Response 33: The EPA agrees to the extent that nuclear and hydro are treated similarly. In 

response to additional analysis and many comments, the 111(d) final rule differs from the 

proposal – generation from existing hydropower, consistent with the treatment of generation 

from other low- and zero-emitting sources, including nuclear, does not displace existing fossil 

emissions. Generation from incremental hydropower added after 2012 is considered, with other 

low- and zero-emitting sources, to displace existing fossil emissions and may be used by states to 

reduce a rate. For the purpose of adjusting a rate generation during the compliance period from 

sources added since 2012 is eligible. See sections V.A, V.E, and VIII.K of the preamble of the 

final CPP. 

The following are summaries of the specific public comments under this comment: 
672 

Commenters stated that the BSER includes some "at-risk" nuclear generation but not "at-risk" 

hydropower generation, even though some hydropower generation may be nearing the end of its 

design life, facing potential limits on operational flexibility, or scheduled for relicensing before 

2030. Commenters stated the "at risk" hydropower should also be included. 

Commenters noted that the EPA provided incentives for preserving existing nuclear generation 

and stated that similar incentives would be appropriate for preserving existing hydroelectric 

generation. Commenters added that like nuclear, hydropower is a non-emitting resource with 

great reliability. 

Comment 34: Commenters provided suggestions on how to handle the year-to-year variability 

of hydropower. 

Response 34: The EPA agrees with the need to address the year-to-year variability. In response 

to additional analysis and many comments, the 111(d) final rule differs from the proposal – 

generation from incremental hydropower added after 2012 is considered, with other low- and 

zero-emitting sources, to displace existing fossil emissions and may be used by states to reduce a 

rate. For the purpose of adjusting a rate generation during the compliance period from sources 

added since 2012 is eligible. Regarding data year issues for hydrologic variability, see section 

VI.D of the preamble to the final CPP for EPA’s response to this comment. See sections V.A, 

V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that, regarding year-to-year variability in hydropower generation, the CPP 

should recognize the variable nature of hydropower and allow state plans to designate a mean 

hydropower production figure for use in energy mix assumptions contained in the state plan. 

Commenters stated that, if hydro is factored into the baseline, the EPA should use an average 

production level over a minimum of 5 years, rather than a snapshot using only 2012 generation. 

Commenters explained that there can be a significant year-to-year variability in the amount of 

hydropower generation due to the availability and timing of water based on precipitation levels 

and other hydrological factors. Commenters noted that 2012 was a high hydropower year in 

many regions of the country and concluded by stating that using a 5-year average would smooth 

out the individual year distortions on the baseline calculations. 

Commenters stated that the conservative capacity factor listed for hydro-electric power 

production is the limiting factor and could be used to determine the floor to account for year-toyear variability. 

Commenters stated that, to address year-to-year variability, the EPA should allow SIP provisions 

that would permit the states to compensate for weather-related compliance shortfalls in a 

particular year with excess compliance in earlier and later years. Commenters added that the 3-

year averaging allowed by the rule would address this concern to some extent, but may be 

inadequate under drought conditions. 
673 

Commenters stated that, as Western states and companies make plans to meet future demand for 

electricity, they are dealing with substantial variation in the availability of hydropower, including 

variability caused by changes in snowpack, shifts in rain fall, changes in the timing of peak river 

flows, and ongoing drought. Commenters stated that this variation also presents a variety of 

challenges for states when it comes to 111(d) because it impacts both the EPA's baseline 

assumptions and the future generation mix that will determine compliance in 2020 and beyond. 

Comment 35: Commenters expressed support for hydropower at the Glen Canyon Dam 

Response 35: The EPA disagrees. In response to additional analysis and many comments, the 

111(d) final rule differs from the proposal – generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. Generation from existing hydropower, 

consistent with the treatment of generation from other low- and zero-emitting sources, does not 

displace existing fossil emissions. See sections V.A, V.E, and VIII.K of the preamble of the final 

CPP. The reference to the endangered humpback chub and the activity of other agencies is out of 

the scope the final CPP and no response to this portion of the comment is provided. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the Bureau of Reclamation (BOR) and National Park Service (NPS) are 

conducting an Environmental Impact Study (EIS) using data from the Long-Term Experimental 

and Management Plan (LTEMP) for the Glen Canyon Dam and Hydroelectric Operation. 

Commenters stated that many utilities believe that these agencies are developing operating 

alternatives that will significantly impact the endangered Humpback Chub and reduce the 

hydroelectric output. Commenters stated that these agencies appear to ignore the science and not 

value the benefits of this renewable resource. Commenters stated that reducing the renewable 

hydroelectric production will increase greenhouse gas emissions by replacing the electrical 

generation with a natural gas source, which is in conflict with CPP. Commenters stated that these 

experimental operating restrictions should be re-evaluated, and the hydroelectric resource should 

be restored to the pre-1996 operating standards, which will result in the ongoing protection of the 

endangered species, an increase in hydroelectric production, and a reduction of greenhouse gas 

emissions. Commenters requested that the EPA and these other federal agencies resolve these 

environmental conflicts and seek a balanced approach for the renewable hydrogenation from 

Glen Canyon Dam. 

Comment 36: Commenters commented on the RE calculations for South Dakota related to 

hydropower. 

Response 36: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – the approach to 

establishing CO2 emission performance rates has changed, and hydropower is treated 

consistently with other low- and zero-emitting sources. Generation from incremental hydropower 

added after 2012 is considered, with other low- and zero-emitting sources, to displace existing 
674 

fossil emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. See sections V.A, V.E, and VIII.K 

of the preamble of the final CPP. Regarding data year issues for hydrologic variability, see 

section VI.D of the preamble to the final CPP for EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters commented on the RE calculations for South Dakota related to hydropower. 

Commenters stated that the EPA considered hydropower in calculating South Dakota's goal of 

741 pounds of CO2 per MWh, and explained that the 15 percent goal for RE in 2030 was based 

on South Dakota's total generation in 2012 of 12,034,206 MWh, which includes 5,980,965 MWh 

of hydropower. Commenters stated that, if the EPA had excluded hydropower production in 

2012, South Dakota's goal would increase from 741 to 877 pounds of CO2 per MWh. 

Commenters added that the energy efficiency goal is based on retail sales, which, for South 

Dakota, also includes hydropower, and, if the EPA excluded hydropower, South Dakota's energy 

efficiency goal for Building Block 4 would be lowered from 1,029,169 to 617,502 MWh, which 

would increase South Dakota's goal from 741 to 917 pounds of CO2 per MWh. Commenters 

stated that, if EPA elects to not include existing hydropower in demonstrating compliance with 

state goals, it should not include hydropower in its calculations that establish the state's goals. 

Commenters also stated that the EPA based the 15 percent RE requirement in Building Block 3 

on the RPS for five out of the nine states in the North Central Region, and the hydropower 

generation in these five states account for no more than 2 percent of their total electrical 

generation. Commenters stated that including hydropower in determining state goals and yet 

disallowing use of existing hydropower to demonstrate compliance, when hydropower represents 

approximately 50 percent of South Dakota's production and 40 percent of its state sales, is not 

rational. Regarding the alternative approach, the commenters stated that the EPA took South 

Dakota's percentage of hydropower production in 2012 (i.e., 50 percent) and added it to the 15 

percent renewable goal, which established South Dakota's renewable goal at 65 percent. 

Commenters stated that the EPA's alternative goal assumes South Dakota's hydropower can 

produce 2012 levels every year, and this is not consistently achievable. Commenters provided a 

figure that shows that annual hydropower production in South Dakota is dependent on the annual 

Missouri River runoff above Sioux City, Iowa. Commenters concluded by stating that the EPA's 

alternative approach in using hydropower to set a state's goal is not realistic or workable. 

Comment 37: Commenters commented on Arkansas’ hydropower goals. 

Response 37: The EPA agrees to clarify the treatment to hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – generation from 

incremental hydropower added after 2012 is considered, with other low- and zero-emitting 

sources, to displace existing fossil emissions and may be used by states to reduce a rate. For the 

purpose of adjusting a rate generation during the compliance period from sources added since 

2012 is eligible. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. 
675 

The following are summaries of the specific public comments under this comment: 

Commenters commented on the goals for hydropower in Arkansas. Commenters stated that a 

2014 study by DOE found that Arkansas has 1,108 MW and 5,964 GWh of additional potential 

capacity along stream reaches that do not currently have dams or other infrastructure, and a 2012 

study by NREL found adding generation to currently non-powered dams could produce 1,136 

MW in Arkansas. Commenters stated that, assuming capacity factors similar to those in the DOE 

study, these plants would produce about 6,000 GWh. Commenters explained that the capacity at 

the existing dams could be developed more quickly and would have less environmental impacts 

than the capacity that would require impoundments. Commenters stated that the renewableenergy targets used in the EPA's determination of Arkansas's goals could be met with about 6 

percent of the potential at existing dams in 2020 and 80 percent in 2029. 

Comment 38: Commenters commented on West Virginia’s hydropower goals. 

Response 38: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – the approach to 

establishing CO2 emission performance rates has changed, and hydropower is treated 

consistently with other low- and zero-emitting sources. Generation from incremental hydropower 

added after 2012 is considered, with other low- and zero-emitting sources, to displace existing 

fossil emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. The Building 

Blocks are not prescriptive. States have flexibility to develop plans that consider local 

circumstances. See sections V.A, V.E, VIII.A and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that historically, hydropower has been West Virginia's primary renewable 

resource for electricity generation. Commenters stated that West Virginia has utilized 

hydropower to generate electricity since the early 1900s and that wind and hydro account for 

nearly 4 percent of West Virginia's total electricity production. Commenters stated that West 

Virginia has hydroelectric generation capacity of 286.7 MW, located at 11 dams ranging in 

capacity from 1.9 MW on the Potomac to 102 MW on the New River. Commenters provided 

additional information on West Virginia's hydro capacity and discussed hydro permit 

applications under review by FERC. Commenters stated that, while several hydro applications 

have been under review for years, the circumstances support a prediction that the additional 

available hydro potential is only 125.6 MW; this equates, at a capacity factor of 40 percent, to 

roughly 4.3 percent of the EPA's RE goal for West Virginia. Commenters stated that the EPA 

determined that it is feasible for West Virginia to produce 4,408,000 MWh of electric generation 

from hydropower by 2025. Commenters stated this figure should be compared to 2012, when 

West Virginia only produced 1,431,440 MWh of electric generation from hydropower. 

Commenters stated that assuming the CPP would take effect in 2017, West Virginia would have 

only 10 years from now to more than triple its hydropower capacity, and the development time 

allotted is unrealistic. Commenters stated that, in view of the prediction that only 125.6 MWh of 

additional hydropower is available in West Virginia, the EPA's estimate of untapped hydro 

resources is wholly without merit. 
676 

Comment 39: Commenters commented on the feasibility of expanding hydropower in Florida. 

Response 39: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – the approach to 

establishing CO2 emission performance rates has changed, and hydropower is treated 

consistently with other low- and zero-emitting sources. Generation from incremental hydropower 

added after 2012 is considered, with other low- and zero-emitting sources, to displace existing 

fossil emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. The Building 

Blocks are not prescriptive. States have flexibility to develop plans that consider local 

circumstances. See sections V.A, V.E, VIII.A and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters commented on the feasibility of expanding hydropower in Florida. Commenters 

stated that the EPA's assumed growth projections under Building Block 3 for the increase in RE 

generation within Florida may not be technically feasible. Commenters explained that RE 

accounts for only 2 percent of the state's total generation mix and noted that the City of 

Tallahassee has direct experience in this regard, as it operates one of only two hydroelectric 

power facilities in the state. Commenters explained that, historically, hydroelectric facilities in 

Florida operate at a low capacity factor, citing data from 2012 that indicates capacity factors 

between zero to less than 40 percent. Commenters stated that, although hydroelectric power 

plants do have definite benefits with respect to air quality, there is very limited ability to expand 

the use of hydroelectric facilities in Florida. Commenters also stated that the C. H. Corn 

Hydroelectric Facility operated by the City of Tallahassee is a run-of-river facility, and the 

power generation opportunities from this facility are limited. Commenters noted that, during the 

last 10 years, the facility has averaged 0.58 percent of the Tallahassee's load requirement. 

Comment 40: Commenters stated that there is an inconsistent treatment of existing 

hydroelectricity in the proposed approach to set Maine’s renewable energy goals and then 

disallow the same hydroelectricity for compliance. 

Response 40: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal – the approach to setting CO2 emission 

performance rates has changed, and hydropower is treated consistently with other low- and zeroemitting sources. Generation from incremental hydropower added after 2012 is considered, with 

other low- and zero-emitting sources, to displace existing fossil emissions and may be used by 

states to reduce a rate. For the purpose of adjusting a rate generation during the compliance 

period from sources added since 2012 is eligible. Generation from existing hydropower, 

consistent with the treatment of generation from other low- and zero-emitting sources, does not 

displace existing fossil emissions, See sections V.A, V.E, and VIII.K of the preamble of the final 

CPP. 

The following are summaries of the specific public comments under this comment: 
677 

Commenters stated that there is an inconsistent treatment of existing hydroelectricity in the 

proposed approach to set Maine's state renewable energy goals and then disallow the very same 

hydroelectricity for compliance with the goal. Commenters stated that, when it established the 

renewable generation goals for each state, the EPA considered all forms of renewable energy 

addressed by any state RPS. Commenters stated that, for Maine, the EPA attributed the total RPS 

standard of 40 percent, which includes existing hydro generation as well as wind, biomass, and 

all other renewables, as defined in Maine statutes. Commenters stated the EPA has not, however, 

carried the same inclusive approach through to compliance with the target emissions rate, as 

calculated. Commenters stated specifically that, although existing biomass and hydropower 

resources are included in establishing the regional RPS, average against which each state will be 

measured, the states may not count the MWh generated from existing hydropower in the 

compliance determination, nor all biomass. Commenters stated that the EPA appears to be 

allowing a portion of biomass used to generate electricity to qualify, consistent with electricity 

derived from waste biomass and sustainably harvested biomass. Commenters stated, nonetheless, 

that Maine allows electricity generated from non-waste and other biomass to qualify, and thus, 

this presents another mismatch to a lesser degree than hydro-generated electricity. Commenters 

stated the only Maine biomass-generated electricity that appears to qualify is that generated from 

waste biomass or sustainably harvested biomass, whereas Maine's full RPS compliant biomass 

generation is used to set Maine's Building Block 3 goal, creating a similar, though less 

exacerbated, inconsistency for biomass. Commenters stated that this disparate treatment of 

existing hydropower and biomass plainly results in a mismatch between the state goal-setting 

methodology and what is allowed for compliance. Commenters remarked that states, such as 

Maine with an RPS based on investments in significant biomass and hydropower resources, 

should be allowed to use all state RPS-compliant resources to avoid this mismatch. Commenters 

recommended that the EPA correct this error by including existing hydropower and biomass in 

countable state compliance generation, or by eliminating existing hydropower (and nonqualifying biomass) from states' RPS standards when establishing the regional average under 

Building Block 3. Commenters stated that eliminating existing hydropower from Maine's RPS 

standard would reduce Maine's RPS percentage from 40 percent to approximately 18 percent, 

likewise eliminating biomass from Maine's RPS would reduce Maine's RPS percentage from 40 

percent to approximately 29 percent, and eliminating both biomass and hydropower, as was used 

to comply with Maine's RPS in 2012, would reduce Maine's RPS goal from 40 percent to 

approximately 7 percent. Commenters stated that, since Maine's RPS is one of the highest in the 

U.S. and plainly pulls up the Northeastern RPS average calculated by EPA (along with New 

York's RPS, which also uses a majority of hydropower), the entire regional average estimate for 

renewables is set too high to allow for compliance without existing hydropower and biomass 

resources recognized in the Maine RPS. Commenters stated that, with either correction, the RPSbased approach to standard-setting would provide a more accurate indicator of the ability of 

states to develop renewable energy as a means of reducing CO2 emissions during the compliance 

period. Commenters recommended that this RPS-regional average approach be corrected as the 

preferable technical methodology for setting a representative renewable goal for Building Block 

3 purposes because it recognizes the regional nature of the electricity grid serving New England 

and New York. In the alternative, the commenters supported the NODA approach to 

regionalizing the NREL renewable potential calculations. Commenters stated that it is essential 

that the EPA regionalize the renewable goals in Building Block 3 in order to maintain the 

technical legitimacy of the Building Block 3 renewable component. Commenters explained that 
678 

electricity is generated, consumed, and transmitted on a regional basis and not within state 

borders. Moreover, commenters stated, the renewable energy credit markets are regional markets 

within the Northeast (New England and New York). Commenters stated both the RPS approach 

and the NODA regionalization approach recognize this fundamental attribute of electricity 

generation that usage and transmission within regions satisfies various state RPS laws. 

Comment 41: Commenters provided a detailed description of the Federal Columbia River 

Power system and how efficiency upgrades are handled. 

Response 41: The EPA agrees to clarify the treatment of hydropower. In response to additional 

analysis and many comments, the 111(d) final rule differs from the proposal – the approach to 

setting CO2 emission performance rates has changed, and hydropower is treated consistently 

with other low- and zero-emitting sources. Generation from incremental hydropower added after 

2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. Generation 

from existing hydropower, consistent with the treatment of generation from other low- and zeroemitting sources, does not displace existing fossil emissions. See sections V.A, V.E, and VIII.K 

of the preamble of the final CPP. The preamble addresses potential multistate plans in section 

VIII.C. 

The following are summaries of the specific public comments under this comment: 

Commenters provided a detailed description of the Federal Columbia River Power System and 

how efficiency upgrades are handled. Commenters explained that the Columbia River Basin 

drains 219,000 square miles in seven western states: Washington, Oregon, Idaho, Montana, 

Wyoming, Nevada, and Utah. Commenters stated that the system of federal dams on this basin is 

known as the Federal Columbia River Power System (FCRPS), and the dams of the FCRPS are 

owned and operated by either the U.S. Army Corps of Engineers (the Corps) or the U.S. Bureau 

of Reclamation (Reclamation). Commenters stated that these dams, along with one nuclear plant 

and Bonneville Power Administration's (BPA's) acquisition of power produced by some 

nonfederal resources, are coordinated and operated as a system from which BPA meets its power 

sales obligations to its various customers throughout the Pacific Northwest. Commenters stated 

that, operationally, the dams cannot be run independently of each other for the purpose of 

conducting individualized sales from particular projects, and BPA does not market power from 

any individual dam to any single state. Commenters stated that the FCRPS is operated 

collaboratively by BPA, the Corps, and Reclamation, and the dams are multi-purpose projects, 

meaning the three agencies operate the dams in a way that promotes multiple objectives 

including flood control, meeting Endangered Species Act and other environmental requirements 

for fish and wildlife, providing irrigation and navigation, and generating power. Commenters 

explained that, of these purposes, flood control is paramount because of public health and safety 

concerns, but, since 1995, fish and wildlife objectives have also become primary considerations 

for system planning and river operations due to threatened and endangered salmon and the need 

to comply with the Endangered Species Act. Commenters explained that meeting these multiple 

and often conflicting objectives is extraordinarily complex and requires the FCRPS be operated 
679 

as a coordinated system. Commenters stated that maintenance and upgrades are prioritized for 

the FCRPS as a whole; the state that the projects are located within is not a factor. Commenters 

explained that, in accordance with BPA's long-term power sales contracts, BPA transfers the 

Renewable Energy Credits (RECs) associated with efficiency upgrades to the FCRPS on a pro 

rata basis to BPA's customers, and currently, RECs associated with efficiency upgrades at federal 

dams are not common. Commenters stated that Oregon and Montana are the only two states in 

BPA's service territory that currently count efficiency upgrades at existing federal hydroelectric 

projects as an eligible renewable resource for purposes of state RPS. Commenters stated that, 

under Oregon's RPS, if an efficiency upgrade is made to a FCRPS hydropower project, a utility 

may only use that portion of the electricity generation attributable to "Oregon's share" of the 

project to comply with the RPS. Commenters explained that, while not binding on BPA, the 

Oregon Department of Energy implemented rules that apply to utilities that operate in the State 

of Oregon to define Oregon's share of eligible generation attributed to upgrades at federal 

hydropower facilities. Commenters added that each project requires its own application and is 

subject to review and approval from the Oregon Department of Energy. BPA transfers the RECs 

associated with "Oregon's share" of this incremental generation to all of its preference and 

investor-owned utility customers (whether in Oregon or not); however, only those RECs going to 

customers with Oregon load are eligible for Oregon's RPS. Commenters stated that the RECs are 

transferred by BPA to its customers through an annual process defined in the power sales 

contract between BPA and its customers. Commenters explained that, generally speaking, BPA 

allocates these RECs to preference customers on a pro rata basis commensurate with the amount 

of power they purchase from BPA, and to investor-owned utility customers based on statutory 

benefits that they receive from the FCRPS. Commenters stated that future efficiency upgrades on 

the FCRPS will likewise be eligible for RECs under Oregon's RPS. 

Comment 42: Commenters stated that pumped storage should count as RE. 

Response 42: The EPA disagrees. Pumped storage provides ancillary services, but does not 

reduce emissions from existing generation. EPA agrees that storage may facilitate increased 

integration of incremental RE, and any generation from incremental RE may be eligible to 

reduce a CO2 emission rate. See sections V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that pumped storage should count as RE. Commenters stated that pumped 

storage produces 2.5 percent of U.S. electricity and should eligible for consideration as an RE 

source. 

Commenters stated that Michigan relies often on the Ludington Pumped Storage (LPS) facility 

due to the flexibility of operating the system and, in particular, its ability to ramp up quickly. 

Commenters stated that, in addition to being a backstop to RE sources such as wind, LPS is also 

used during peak demand periods as an economic hedge to running more expensive generation 

(coal and gas units) or procuring spot market energy at a premium. In that instance, commenters 

stated, LPS acts as an energy storage system. Commenters also stated that it is important to note 

that the LPS facility is currently undergoing a 6-year life extension and uprating project, which, 
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when completed in 2019, will result in an additional 420 MW of capacity. Commenters stated 

that the additional capacity should count toward Michigan's target. 

Comment 43: Commenters submitted comments on new or emerging hydropower technologies. 

Response 43: The EPA generally agrees. In response to additional analysis and many comments, 

the 111(d) final rule differs from the proposal – generation from incremental hydropower added 

after 2012 is considered, with other low- and zero-emitting sources, to displace existing fossil 

emissions and may be used by states to reduce a rate. For the purpose of adjusting a rate 

generation during the compliance period from sources added since 2012 is eligible. See sections 

V.A, V.E, and VIII.K of the preamble of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters described their company's micro hydropower system, explaining that the system is 

portable, not harmful to nature, also does not require any construction by the river. Commenters 

added that the system "has no changes around flow" and requires workers, so it helps 

employment. Commenters requested that the EPA consider such designs that generate clean 

energy and employment for more people. Commenters included an attachment that provides 

more details on the system design. 

Commenters stated that the proposed rule does not address the development, availability, and use 

of innovative state-of-the-art hydroelectric generation technologies within state plans. As an 

example, Commenters explained that micro-hydroelectric generation technology has matured to 

the point where Portland, Oregon is installing in-pipe turbines capable of producing 1,100 

megawatt hours of electricity a year - enough to power up to 150 homes. Commenters stated that 

the proposed rule provides no incentive for the development of this environmentally safe, 

effective, and efficient technology which could be deployed within every municipality in the 

U.S. that operates a water utility. Commenters added that, by creating this type of incentive, a 

deployment of this type of technology on a large scale would create significant economic 

initiatives, while upgrading water supply systems and providing incentives for academia and 

industry R&D efforts to develop even more efficient and effective micro-hydroelectric 

generation systems. 

3.3.11 Other 

This subsection addresses comments related to Cleaner Generation Sources (Building Block 3) 

that do not readily fit into the other subsections of section 3.3 of this document. 

Commenters raised a number of issues related to this subsection which are organized by topics 

(comments) below. Responses are provided for these topics. 
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Comment 1: Commenters spoke on the constraints of wind energy as a renewable energy 

resource. 

Response 1: The EPA addresses considerations related to the technical feasibility and associated 

grid integration costs of significant RE penetration in both the preamble (section V.E) and GHG 

Mitigation Measures TSD. The EPA provides guidance to states on the interstate effects of 

incremental RE in section VIII.J of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters stated there are numerous local constraints on wind development that were ignored 

in EPA's building block 3 assumptions. Commenters stated there are feasibility limitations to 

locating wind to utilize optimal wind currents and there are also often local limitations on wind 

generation. Commenters provided the example that according to the Birmingham News, on 

August 20, 2014, a wind farm developer dropped plans for two Alabama wind farms after the 

state passed a wind energy bill that limited the noise that wind farms can produce. Commenters 

stated the state law also requires wind projects to have a larger setback from nearby properties. 

Commenters raised concerns over the development of interstate wind energy. They stated that 

one of the greatest opportunities for wind energy expansion is supporting the development of 

multi-state or regional transmission planning though such mechanisms as FERC Order 1000. The 

best results of these complex processes - access to new power markets and expanded 

wind generation - should be recognized in potential state 111(d) plans. Commenters also stated 

that EPA should provide significant guidance and assistance to states in how to best utilize and 

account for multi-state cooperation on long-term transmission planning as a compliance option 

under a final 111(d) rule. 

Commenters noted that wind resources in the west and upper-Midwest are located largely on 

federal lands, which creates regulatory and permitting obstacles. Commenters stated that the 

American Wind Association reported that only 1.4% of the United States' wind energy capacity 

had been installed on public land through 2012. Commenters noted that the US Forest Service is 

responsible for the management of 193 million acres of National Forests and Grasslands, 

commonly found throughout Wyoming and the commenters’ service territory, yet only 30 MW 

of wind has been approved for development on USFS managed land. Commenters added that the 

Bureau of Land Management has also proposed a competitive bidding process for wind 

development on land they manage, which has the potential to increase the cost of wind 

development on public lands. 

Commenters stated that EPA did not account for the fact that integrating large amounts of 

renewable resources into the bulk power system requires significant changes to power planning 

and operations to maintain an adequate level of system reliability, or the need for operational 

reserves. Commenters stated that in the absence of developing resources to exclusively provide 

synchronous inertia, large legacy units would have to be maintained online, potentially at 

minimum output, to provide sufficient inertia to the system which would preserve the need for 

many units operating at their least efficient, highest emitting level of production. Commenters 

stated that wind resources produce their greatest amounts of energy when the energy is needed 

the least. Commenters stated that during times of high wind production and low load, concerns 
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regarding frequency response can be heightened because of less synchronously rotating mass 

online. Commenters also noted that with the volatility of wind, there are times when the wind 

generation either increase or decreases dramatically in a very short period of time. 

Commenters requested that the EPA not adopt the "alternative approach" for determining 

renewable energy, as this approach overstates wind development potential. Commenters stated 

that the alternative approach increases disparity among states and heightens burdens on states 

with renewable energy potential. Commenters also noted that some states are creating pushback 

against the implementation of wind power, and Oklahoma has considered a ban on new wind in 

half the state. 

Comment 2: Commenters supported wind energy as an appropriate compliance option under the 

Proposed Rule and urged EPA to support states' actions to expand the use of wind energy and to 

accelerate access to new wind energy resources. 

Response 2: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated the Clean Power Plan correctly concludes that wind energy is an appropriate 

outside of the fence line compliance option that satisfies the best system of emission reduction 

requirements and should be factored into determining state emission targets. Commenters stated 

as the Clean Power Plan recognizes, wind energy is an achievable and adequately demonstrated 

source of carbon reductions under a system-based approach. Commenters referred EPA to 

AWEA's U.S. Wind Industry Annual Market Report for the Year Ending 2013, which provides a 

comprehensive look at the U.S. wind energy industry, including a large body of data that 

demonstrate that wind energy is an achievable, adequately demonstrated, and affordable 

technology. Commenters also stated that additional data can be found in the U.S. Department of 

Energy's 2013 Wind Technologies Market Report (DOE Market Report). 

Commenters stated that as recognized in the Clean Power Plan, wind energy is an outside of the 

fence line compliance option that satisfies the BSER and, therefore, is available to states in 

achieving the emission guidelines set by EPA in the Clean Power Plan. Commenters stated the 

language of Section 111(d), which directs EPA to identify the system of emission reduction best 

able to secure rigorous carbon emission reductions while considering cost and impacts on energy 

use and other environmental considerations, requires that a system-based approach be permitted 

to satisfy the statutory requirements of the Act. Commenters stated failure to incorporate systembased emission reductions, including wind energy, would not be the most cost-effective and 

therefore not the best system of emissions reductions. Given this, commenters stated EPA's 

standard of performance in the Clean Power Plan correctly takes wind energy into account in 

setting performance standards for states; indeed, the Clean Power Plan would fall far short of 

delivering the maximum emission reductions existing plants can achieve at a reasonable cost, as 

required by the statute, if it did not include wind energy in that calculation. 
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Commenters provided additional information that EPA acted consistently with the statutory 

requirements of Section 111(d) by factoring wind energy into setting targets and allowing it to be 

used as a cost-effective compliance option. 

Comment 3: Commenters stated wind energy is an achievable and adequately demonstrated 

means to comply with emissions standards under a system-based approach. 

Response 3: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E. of the preamble and in the 

GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters provided data that demonstrate how wind energy has proven to be an achievable 

and adequately demonstrated option to reliably and verifiably reduce carbon emissions at a 

reasonable cost and in an environmentally friendly way, consistent with the requirements laid out 

in the definition of a standard of performance in the CAA. Commenters stated these attributes of 

wind energy will likely lead many stakeholders to use it as a compliance method for meeting 

carbon pollution standards under Section 111(d), just as EPA, in the Clean Power Plan, 

accounted for achievable emission reductions from wind energy programs in setting the 

stringency of its emission guidelines for existing power plants. 

Commenters stated wind energy is adequately demonstrated because it is currently a significant 

source of electric energy capacity and is growing rapidly. Commenters provided detailed 

information on wind energy capacity and power purchase contracts in the U.S. Commenters 

stated wind energy technology is rapidly improving, mostly through taller towers that allow 

access to higher wind speeds and longer blades that make lower wind speed sites more 

economic, and as a result, wind companies are now showing interest in developing projects in 

states where wind energy was not previously viable, such as much of the Southeast. Commenters 

stated wind energy is one of the most geographically dispersed energy sources available and 

discussed the economic impact of the industry, including current and estimated employment 

numbers associated with the industry. 

Commenters also stated wind energy is adequately demonstrated because affected entities have 

already directly invested in wind energy, and there is even a greater potential for them to do so to 

meet emission target levels for purposes of Section 111(d) compliance. Commenters stated 

affected entities have already directly invested in wind energy, and there is even a greater 

potential to do so to meet emission target levels for purposes of Section 111(d) compliance. 

Commenters provided detailed information on long-term power purchase agreements for wind 

capacity and listed numerous investor-owned utilities that currently own or purchase wind 

power. Commenters also provided information on municipal utilities, rural cooperatives, joint 

action agencies, political subdivisions, and federal power marketing agencies. 

Commenters also stated wind energy is adequately demonstrated because its emission reductions 

are quantifiable and verifiable. Commenters stated all utility-scale wind projects have revenuegrade metering equipment that measures the amount of wind energy production. Commenters 
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also stated that among other reasons, such equipment and verification is necessary to ensure 

compliance with power purchase contract requirements and for purposes of claiming the federal 

production tax credit (PTC), which is based on electricity generated. Commenters stated in 

addition, rigorous accounting mechanisms for Renewable Energy Credits (RECs) are used for 

RPS compliance in 29 states and the District of Columbia, and accounting mechanisms are in 

place nationwide for verifying renewable energy production to satisfy voluntary REC purchases. 

Commenters stated wind energy is achievable because it is a cost-effective means to reduce 

carbon emissions. Commenters stated wind energy directly offsets fossil fuel use and emissions 

at other power plants on a 1:1 basis. Commenters stated because power plants are interconnected 

on an electrical grid that operates based on market principles, electricity produced by wind yields 

an equivalent decrease in electricity production at the most expensive power plant operating at 

the time, which is typically the least efficient operating fossil-fired power plant for the fuel type 

that is on the margin. Commenters provided additional discussion on the cost effectiveness of 

wind energy, including results from EPA's AVERT modeling, DOE estimates of the net present 

value of wind's carbon emission reductions, the results of a PJM study on renewable integration, 

and international experience in the increased use of wind energy. Commenters also provided 

information on the affordability of wind energy, referenced analysis quantifying the production 

cost and consumer benefits provided by wind energy in certain areas, and discussed wind energy 

impacts on electricity prices. 

Commenters also stated wind energy is an adequately demonstrated resource, and large 

deployments are achievable because large quantities of wind energy can be reliably integrated. 

Commenters provided additional information on wind energy capacity in the U.S. and provided 

further information regarding the reliability of the technology. 

Comment 4: Commenters urged that EPA strongly encourage or, preferably, require States, 

either individually or as part of a multi-state plan, to set aside specific targets for distributed 

generation and distributed wind where appropriate. 

Response 4: The EPA disagrees with this comment. While recognizing the value of distributed 

generation resources, the EPA does not include these resources in building block 3; 

consequently, it would be inappropriate to require a target related to a non-BSER measure. 

Distributed technologies, as a demand-side resource, present unique data and technical 

challenges (such as the role of evaluation, measurement and verification (EM&V) procedures in 

verifying their production, the diverse economic incentives of different parties involved in their 

deployment, and the variety of grid integration policies and conditions across potential 

deployment sites) that complicate identifying a technically feasible and cost-effective level of 

generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). 

The following are summaries of the specific public comments under this comment: 

Commenters noted that distributed wind ("DW") is not yet recognized as fully as it should be as 

a "go to" renewable energy source, despite its vast benefits and potential. Commenters stated that 
685 

it is clear that that without proper encouragement or specific requirements set in State laws that 

DW will not grow as rapidly as possible, and provide zero carbon electricity both on and off the 

grid, in the timeframe that would be optimal based on EPA's emissions reductions goals. 

Commenters noted that the current energy infrastructure, and tendencies of many utilities, is too 

often promote central load fossil fuels, energy efficiency and very large renewable projects rather 

than DG and DW. 

Commenters additionally noted that DG and DW help aid in emissions reductions with little to 

no impacts on grid reliability because this technology is often placed "behind the meter." 

Commenters stated that it is easy to integrate single or a handful of wind turbines in rural and 

suburban areas alike, at low cost to the customer and/or local utility. 

Comment 5: Commenters stated the resource potential for offshore wind in the United States is 

vast, and adjacent to many metropolitan areas with high electricity demand. 

Response 5: The final methodology for building block 3 is premised on historical deployment of 

RE technologies. Therefore, any RE technology that has not been deployed in the United States, 

including demonstrated RE technologies for which there is clear evidence of technical feasibility 

and cost-effectiveness (e.g., offshore wind), contributes no generation to building block 3. These 

RE technologies are consequently reserved for compliance, which offers affected EGUs 

additional flexibility and will reduce their need to rely on other emission reduction measures or 

building blocks. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that according to the Bureau of Ocean Energy Management, over 1,000 GWs 

are available in 0-30 foot depth waters, 628 GW in 30-60 feet, and over 2,400 GW over 60 feet 

deep. Commenters stated that as a less mature technology and industry, offshore wind is at a 

higher cost point on the development and deployment curve; however, if it follows the historical 

trajectories of onshore wind and solar power, increasingly higher deployment levels will likely 

bring substantial cost and performance improvements. Commenters stated these gains come 

about from a number of factors, including economy of scale; learning by doing; development of 

needed supply chains; development of transportation infrastructure; streamlining of permitting, 

financing, and other soft costs; and continued research, development, and innovation. 

Commenters stated several studies suggest costs could even fall more quickly than they did for 

onshore wind energy. Commenters provided information on current commercial scale projects in 

advanced development. Commenters stated the potential to capture the nation's large off-shore 

wind resources is further evidence of the conservative nature of EPA's assessment of renewable 

energy potential. Commenters stated that regardless of whether this resource is considered in 

assessing state emission reduction potential in the current proposal, EPA should revise its best 

system of emission reduction analysis and state targets as the availability of such resources is 

demonstrated. 

Comment 6: Omit wind generation from model 
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Response 6: The EPA disagrees with this comment. Building block 3 is based on generation 

levels form utility-scale resource, the measurement of which is standard to the power sector. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the production, transmission, and final use of wind generation is often 

difficult to track and measure by state and the Clean Power Plan omitted hydropower from its 

modeling due to the same complexities. Commenters therefore recommended that the Clean 

Power Plan should omit wind generation from its model to establish emission rates based on the 

lack of granular analysis to the state specific generation and usage of renewable wind generation. 

Comment 7: Commenters stated that distributed PV is a unique resource which may be difficult 

to represent in a wholesale power model such as IPM, and instead it is more accurate to rely on 

separate modeling that fully accounts for market dynamics at the customer level. 

Response 7: Distributed technologies, as a demand-side resource, present unique data and 

technical challenges (such as the role of evaluation, measurement and verification (EM&V) 

procedures in verifying their production, the diverse economic incentives of different parties 

involved in their deployment, and the variety of grid integration policies and conditions across 

potential deployment sites) that complicate identifying a technically feasible and cost-effective 

level of generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). 

The following are summaries of the specific public comments under this comment: 

Commenters noted that NREL has developed the Solar Deployment System model (solarDS), a 

modeling complement to ReEDS which projects distributed PV installations by state based on 

system prices, retail sales, and consumer economics. Commenters noted that NRDC utilized the 

DOE Sunshot distributed solar projections from their -62.5% price scenario for input into the 

SolarDS model in their Clean Power Plan analysis and that the output of their solarDS model 

was hard-wired into IPM to ensure that the effects on the grid and other generation options are 

captured. 

Comment 8: Commenters urged that geothermal, or ground source heat pumps (GSHPs), be 

allowed as solutions under Building Blocks 3 and 4 of the Proposed Rule. 

Response 8: See section V.E of the final rule preamble of the CPP for the RE technologies 

included in building block 3 and section VIII.J for a description of non-BSER measures that may 

be used to achieve the standards of performance. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that geothermal or GHSPs are widely available and are proven efficient in all 

50 states for commercial, institutional, industrial, and residential buildings. Commenters stated 
687 

that because GSHPs can move energy in larger quantities than the input energy to the device or 

system (coefficient of performance, or COP, greater than 1) they can reduce power consumption 

and efficiently be used to recover normally unused or waste energy. Commenters also stated that 

a GSHP harvests various renewable energy resources and turns them into useable energy and 

can displace a significant amount of electricity by improving cooling efficiency (and heating 

efficiency, vs. electric resistance) as well as recovering waste heat. Commenters then noted that 

GSHPs recover heat energy that would otherwise be wasted and use it to displace conventional 

heating and in any of these cases, this energy saved, recovered, or gathered can be quantified in 

BTUs, watts, or other standard measurement of energy and classified as avoided generation or 

site generation. Commenters referenced an Oak Ridge National Laboratory Report to DOE on 

GHSPs to further their point. Commenters noted that the combination of Waste Energy Recovery 

(WER), ultra-high-efficiency equipment, and efficient system configuration lead to GHSPs 

operating at much higher efficiencies than conventional heating and cooling systems and that the 

WER process may involve recovery of renewable and sustainable resources. Commenters also 

noted that adding a geothermal closed loop heat exchanger (GLHE) to a fluid loops in WER with 

heat pump systems can enable energy to be stored and used at a later time and therefore can 

permit load shifting which further reduces the load on the generating infrastructure. 

Commenters included potential sources of Geothermal energy, and notes locations where it is the 

most cost effective renewable resource. Commenters referenced Alaska, Hawaii, The U.S. 

Virgin islands, Guam, and the Northern Mariana Islands as places where geothermal energy 

would be a cost-effective renewable resource. Commenters also stated that EPA should support 

the implementation of geothermal energy in these states/territories. 

Comment 9: Commenters stated that the EPA should fully integrate distributed solar into 

Building Block 3 of the Clean Power Plan. 

Response 9: Distributed technologies, as a demand-side resource, present unique data and 

technical challenges (such as the role of evaluation, measurement and verification (EM&V) 

procedures in verifying their production, the diverse economic incentives of different parties 

involved in their deployment, and the variety of grid integration policies and conditions across 

potential deployment sites) that complicate identifying a technically feasible and cost-effective 

level of generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). 

The following are summaries of the specific public comments under this comment: 

Commenters stated that distributed PV is one of the largest and fastest growing segments of the 

renewable energy market, and is currently procured by entities that own and operate affected 

EGUs; therefore "under EPA's system wide approach, distributed PV is necessarily part of the 

BSER and failure to include it in EPA's final rule would be arbitrary and capricious." 

Commenters stated that distributed PV can provide wholesale ancillary services in the same 

fashion as utility-scale assets and can also provide local ancillary services beyond what utilityscale assets are capable of providing. Commenters noted that these services include but are not 

limited to frequency regulation, frequency response, spinning and non-spinning reserves, voltage 
688 

and reactive power support. Commenters stated that "distributed PV can also provide 

incremental ancillary services on the local or distribution level. Local voltage support is critical 

to operating the distribution system within system constraints, and distribution system operators 

rely on a distributed set of voltage regulating equipment to provide that support. Distributed PV 

can augment and sometimes replace this equipment, providing real and reactive power support as 

identified by the distribution operator." 

Commenters provided a chart which depicted distributed PV growing rapidly year over year, 

which commenters used to justify that distributed PV is technically feasible. Commenters noted 

that the usage of distributed PV can be divided into residential and non-residential sectors. 

Commenters noted that the energy produced by homeowners in the residential sector is often 

used to offset the need for generation from affected EGUs or is counted towards clean energy 

requirements such as renewable portfolio standards. Commenters also noted that solar energy 

from non-residential units also reduced the need for generation from affected EGUs and is often 

counted towards clean energy requirements or used to make green claims by the companies that 

invest in the systems. Commenters stated that most of the most well-run and efficient companies 

(e.g. Wal-Mart, Costco, Kohl's, Apple, IKEA, and Macy's) are turning to solar energy to reduce 

their carbon footprint and hedge against risks associated with energy prices and climate change. 

Commenters also pointed out that at least 40% or more of the total installed solar each year 

comes from the distributed PV sector. Commenters additionally urged EPA to encourage states 

to use off-grid distributed PV systems for compliance, and not as a component of the BSER, as 

these technologies avoid the need for electricity from the grid. 

Commenters stated distributed solar is a system of emissions reduction that is technically 

feasible, is implemented at reasonable cost, is driving solar innovation, and does not negatively 

impact the electric system. Further, commenters stated, distributed solar energy is adequately 

demonstrated to reduce emissions from covered sources. Commenters stated utilities are already 

either directly owning distributed solar or purchasing the renewable energy credits from 

distributed solar systems. Commenters also stated there are a number of ways to verify emissions 

reductions from distributed solar as well; once the MWh of distributed solar generation are 

known, either through direct metering and renewable energy credits or the use of a performance 

estimate tool, the fossil fuel energy that is being displaced by the solar energy can be determined 

by using either capacity factor emission rates or system average emission rates. Commenters 

stated for compliance planning, in addition to utility-scale solar PV and Concentrated Solar 

Power (CSP), the EPA should allow for distributed solar technologies, along with solar heating 

and cooling, to count as measures a state can include within a state compliance plan. 

Commenters also stated EPA should also recognize the ability of solar heating and cooling 

measures to displace the electricity that covered sources may use for heating and cooling. 

Commenters noted that distributed solar and other forms of distributed generation are unique in 

their ownership, operation, siting, and relationship to the existing grid and that these systems 

provide quantifiable benefits, including grid support, lower transmission losses, and reduced 

need for additional capacity, as well as less monetized benefits such as hedging against fuel 

prices. Commenters stated that solar PV costs have declined rapidly in the past several years, and 

as PV module costs continue to drop, rooftop solar is becoming and will continue to become an 

economic option for an increasing number of residential and commercial customers. 

Commenters stated that omitting distributed PV from the BSER "paints an unrealistic picture of 
689 

the current and future RE generation mix." Commenters additionally noted that while there are 

methods in which distributed PV can be implemented into IPM as a resource available to 

utilities, it may be more accurate to rely on separate modeling that fully accounts for market 

dynamics at the customer level. 

Commenters additionally stated that EPA should clarify that load-serving utilities should not 

receive credit for all DG interconnected with its system, but rather must have in place a policy 

that incentivizes DG, such as rebates or a favorable tariff structure, to take credit for that DG. 

Commenters also suggested that EPA offer guidance on how DG can meet the requirements of 

an emission standard by being quantifiable, verifiable, non-duplicative, and enforceable. 

Comment 10: Commenters stated that the EPA should explicitly list fuel cells as a compliance 

option under the proposed rule. 

Response 10: The EPA agrees with this comment and fuel cells are explicitly included as a nonBSER measure available for compliance. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that as a carbon reduction technology, fuel cells provide low- or no-carbon 

baseload generation from natural gas or biogas through an efficiency non-combustion process. 

Commenters stated fuel cells typically reach fuel-to-electricity efficiency of 60 percent; nearly 

double that of today's electric grid. Commenters also stated fuel cells not only allow for reduced 

carbon emissions, they also virtually eliminate criteria air pollutants. Commenters stated 

furthermore, since fuel cells typically operate near the point of use, they bypass transmission 

systems, reducing or eliminating transmission losses, which currently average 6 percent in the 

US. Commenters stated that as the EPA recognizes, some fuel cells also generate excess heat, 

which, if captured, can increase overall energy efficiency to more than 80 percent. Commenters 

stated should the EPA list fuel cells as a compliance option it would follow the precedent set by 

the California Air Resources Board (CARB) in 2007, which qualified fuel cells as an ultra-clean 

technology under their existing standard. Commenters stated it would also follow guidelines set 

by the New York Public Service Commission, which qualified fuel cells as a compliance option 

under the state's Renewable Portfolio Standard. Commenters stated currently, twenty-two states, 

two territories, and the District of Columbia have recognized the role fuel cells can play in 

creating a more sustainable energy infrastructure. Therefore, commenters stated the final EPA 

rule should explicitly highlight all fuel cells as a compliance option as a way to 1) reduce GHG 

emissions and other pollutants, 2) improve resiliency, and 3) utilize domestic energy supplies. 

Comment 11: Commenters stated that utility scale PV should be included in Building Block 3 of 

the Clean Power Plan because it is technically feasible. 

Response 11: Utility-scale solar PV continues to be a technology that directly contributes to 

building block 3 generation levels. 
690 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the defining features of utility-scale PV is that it is constructed as a 

centralized power plant, it is larger in size than distributed PV (generally larger than 10 MW), it 

is not generally located near the source of consumption, and the electricity generated by utilityscale PV is usually sold to wholesale utility buyers rather than retail consumers. Commenters 

stated that there are a number of characteristics unique to large-scale installations that make them 

attractive to utilities, including advanced operational characteristics, low cost, and long-term 

fixed pricing. Commenters noted that utility-scale PV can also provide a variety of ancillary 

services associated with traditional fossil sources including frequency regulation, dynamic 

voltage and power factor regulation, and ramp rate controls; thus, when included as part of a 

balanced energy portfolio, utility-scale PV contributes to the stability and reliability of the grid. 

Commenters further stated that utility scale PV reduces carbon emissions from fossil units by 

reducing the amount of conventional generation that must be dispatched to meet electricity 

demand. 

Comment 12: Commenters stated that Concentrating Solar Power (CSP) should be included as a 

compliance option in Building Block 3. 

Response 12: CSP continues to be a technology that directly contributes to building block 3 

generation levels. 

The following are summaries of the specific public comments under this comment: 

Commenters urged EPA to include CSP in Building Block 3 of the Clean Power Plan because it 

technically feasible and is being installed throughout the country today. Commenters explained 

that CSP uses mirrors to concentrate the sun's thermal energy to produce steam and drive a 

conventional steam turbine to produce electricity and that this solar generated electricity is then 

sold to wholesale utility buyers. Commenters noted that CSP can be integrated with thermal 

energy storage, which allows energy to be stored for later use and, in this way, CSP with thermal 

energy storage provides flexibility to grid operators, offering power that can be dispatched as 

needed, day or night. Commenters reasoned that these large-scale installations are attractive to 

utilities because they include advanced operational characteristics, delivering large quantities of 

solar power at a low cost and long-term fixed pricing that provides a hedge against fuel 

volatility. Commenters noted that at low penetrations of solar power to the grid, solar correlates 

well with daily peak demands and even as increasing penetration shifts peak demand to evening 

hours, CSP with storage allows for shifting energy into periods of highest demand or value. 

Commenters further stated that CSP plants utilize conventional steam turbine generators, like 

those of conventional plants, but use the sun as the source of heat instead of fossil fuels 

which allows CSP plants to provide the ancillary services historically offered by conventional 

plants such as frequency response, load following, spinning and non-spinning reserves as well as 

ramping. Commenters noted that CSP reduces carbon emissions from affected EGUs by 

reducing the amount of conventional generation that must be dispatched to meet electricity 

demand and provide the aforementioned ancillary services. 
691 

Commenters additionally stated that technologies used for CSP also promote technological 

development. Commenters noted that the first commercial utility-scale CSP projects in the U.S., 

built in the late 1980s and totaling 354 MWs, are still in operation today. Commenters stated that 

the technology used in these first projects, parabolic trough technology, has continued to 

improve since the 1980s and have substantially increased receiver efficiency, reduced cost and 

weight of the reflector structures, and updated control. Commenters noted that CSP has often 

incorporated thermal energy storage in commercial operations; for example, the Solana 250 MW 

solar trough plant in Arizona can incorporate 6 hours of thermal energy storage which allows the 

utility dispatch solar power to meet peak system loads and reliability needs in the summer and 

winter. 

Commenters noted that CSP with thermal energy storage can offer all the services provided by 

fossil fuel plants without carbon emissions, can provide operational attributes and other good 

services that can assist utilities and grid operators in maintaining grid reliability, and can be 

combined with conventional power plants to form hybrid plants with a lower CO2 output. 

Commenters also noted that CSP can also diversify the energy mix and hedge against the 

volatility of natural gas and that this technology is available today. 

Commenters noted that the proposed 30 percent reduction in GHG emissions cannot stop climate 

change and proposed that a 90 percent reduction would be required to do so, which they stated is 

impossible with existing renewable technology. Commenters stated that they have patented a 

cheaper way to use CSP that would produce twice as much mirror power and increase the 

precision of focusing sunlight. Commenters described their system as follows: "Sunlight is 

focused with mirrors on a receiver on a tower, but instead of being attached to stationary 

heliostats, the mirrors move on concentric tracks around the tower synchronized with the sun's 

movement across the sky to keep the mirrors on the opposite side of the tower from the sun. 

Each morning, the mirrors face the rising sun in the East, and by sunset they are facing west, 

having rotated 180 degrees about a vertical axis, using the radar of the tracks for leverage. 

Because of this extreme leverage, the focusing is precise. As the sun's altitude changes, the 

mirrors must tilt and yaw to keep sunlight focused on the receiver. The formulas for tilting and 

yawing reveal that this can be done collectively to eliminate most of the motors and gearboxes 

required on heliostats. Guidelines stabilize the mirrors against wind and also tilt and yaw the 

mirrors collectively. The details of this are explained in our US patent 7380549." 

Comment 13: Commenters urged EPA to consider their algae technology as a solution under 

Building Block 3. 

Response 13: Refer to section VIII discussion of non-BSER measures. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that they are currently capturing emissions from power plants, as they work 

with three different utility companies, using their 3-dimensional algae growth tank or "AGTS" 

that enables them to control all variables including replicating ideal sunlight. Commenters noted 

that they are able to produce a highly desirable oil at below petroleum prices (Less than 

$1/refined gallon of diesel) today as a result of this system. Commenters also noted that their 
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algae produces a 50/50 oil to biomass ratio and is 15-20 times bigger than anyone else's in the 

world with an oil profile of 85% C-16 and C18 (45% of oil is oleic acid - highly desirable in the 

chemical industry). Commenters further stated that this system and costs of goods sold only 

work if they are near a "host" power plant as they get free CO2, and utilize the flue gas to raise 

and lower their ballast tank and grate system that mixes the CO2 and nutrients (growth 

enhancer). Commenters noted that with LED's covering the entire 3-dimensional AGTS (25' - 50' 

deep) the algae can grow and not use energy working to get light, nutrients or moving which 

utilizes the benefits of a closed-loop system that provides "the most optimal conditions for the 

algae to exceed far beyond what anyone else is able to do in the world." 

Comment 14: Commenters noted that energy storage allows for fuel and resource diversity and 

enhances the integration of renewable resources by supporting renewable energy during periods 

when variable resources like wind and solar are not available and urged that EPA explicitly 

authorize states to include energy storage technologies in their compliance plans. 

Response 14: Refer to section VIII discussion of non-BSER measures. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that while generating resources can only inject power into the grid, energy 

storage provides the ability to either inject or absorb power, allowing variable resources to be 

used more efficiently and effectively. Commenters added that energy storage technologies are 

resource-neutral, taking a charge from any resource on the grid and releasing the charge to offset the units with less efficiency, providing double the nameplate capacity as traditional grid 

resources as they can absorb and release power. Commenters noted that in "Compensating for 

Wind Variability Using Co-Located Natural Gas Generation and Energy Storage", Hittinger, 

Whitacre and Apt find that "the use of energy storage to smooth the sharpest fluctuations, 

allowing a gas turbine to provide the remaining fill-in energy, is a cost-effective application" and 

that a separate report by DOE and EPRI from 2013 supported the concept of using storage to 

balance fluctuations in RE generation output. 

Commenters stated that the exclusion of clean energy storage is contrary to EPA's goals given 

that the Clean Power Plan desires to increase the utilization of NGCC units as baseload, and to 

continue to expand renewable energy generation. Commenters noted that energy storage helped 

smooth out the intermittent nature of renewable energy sources while allowing those resources to 

be used at peak times, providing higher reliability. Commenters also noted that energy storage 

provides valuable margin, ramping, and load following resources that that historically have been 

provided by natural gas units operating as peak to intermediate load units. 

Commenters noted a specific company, Solar Grid Storage, which develops battery energy 

storage systems co-located with PV systems that eliminates the need for PV developers to 

purchase a solar inverter, reducing installation costs and offering new benefits to the host. 

Commenters stated that pumped storage should be included in the Clean Power Plan. The FERC 

has issued a preliminary permit to study a pumped storage project along the Missouri River, 

which would provide the necessary control to support a significant amount of intermittent wind 
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generation in the region. Commenters stated that as written, the Clean Power Plan does not make 

clear that pumped storage projects are included in the list of energy storage technologies eligible 

for inclusion in state plan. Commenters requested that states be allowed to meet their respective 

state goals by relying on any technology that has the potential to enhance emission performance 

by reducing the need for generation from fossil-fueled EGUs. 

Comment 15: Commenters urged the EPA to clearly state in the final rule which renewable 

energy projects and technologies will be eligible as compliance measures. Commenters provided 

a multi-point argument in support of incorporating solar energy measures as part of the BSER 

because they represent a system for reducing emissions from affected EGUs that is: (1) 

technically feasible, (2) done at a reasonable cost, (3) promoting technological development, and 

(4) not negatively impacting the electric system. 

Response 15: The EPA provides detailed guidance on the RE technologies available for 

compliance in the final rule, including solar technologies. Refer to section VIII of the preamble 

for a description of how RE technologies may be used to adjust the CO2 emission rate of affected 

EGUs. 

The following are summaries of the specific public comments under this comment: 

Commenters specifically encouraged EPA to state that energy generated from distributed PV, 

CSP, utility PV, and SHC projects be specifically named as eligible technologies. Commenters 

stated that a variety of solar technologies have been successfully deployed in the U.S. and around 

the world, with rapidly-increasing growth since the 1980s. Commenters provided a multi-point 

argument in support of incorporating solar energy measures as part of the BSER because they 

represent a system for reducing emissions from affected EGUs that is: (1) technically feasible, 

(2) done at a reasonable cost, (3) promoting technological development, and (4) not negatively 

impacting the electric system. 

(1) Technical feasibility: Commenters noted that solar energy systems in the U.S. are expected 

to generate more than 20,000 gigawatt hours (GWh) in 2014 and with one GWh of solar 

generation eliminating 690 metric tons of CO2 emissions, solar generation can be expected to 

avoid 13.8 million metric tons of CO2 emissions in 2014. Commenters stated that in 2013 alone, 

the solar industry grew 53 percent over 2012, installing 5.2 GW of solar generating capacity with 

solar energy accounting for 29 percent of new electric generation capacity installed. Commenters 

stated that solar can potentially replace polluting sources on a 1:1 basis, depending on the 

combination of solar and other technologies deployed on the complex grid but noted that when 

solar is placed on the grid, it generally displaces electricity production from a source that emits 

carbon pollution--often at a high rate--such as a simple-cycle natural gas generator. Commenters 

pointed to three studies which they felt demonstrated the benefit and feasibility of utilizing solar 

capacity: the Western Wind and Solar Integration Study performed by NREL which evaluated 

the impacts of operating the Western Interconnect with high penetrations of wind and solar, the 

PJM study analyzing a high penetration of renewable generation on the PJM grid, and the U.S. 

DOE's SunShot Vision Study which examined the potential for and barriers to solar PV and CSP 

in the US while attempting to reduce costs. Commenters noted that the Western Wind and Solar 
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Integration study found that CO2 emissions could be reduced by 29-34 percent when the 

Western Interconnect obtains 33 percent of electricity from wind and solar. Commenters then 

noted that the PJM study considered renewable penetration of up to 30 percent and found no 

significant operating issues while reducing CO2 emissions by 28 percent in the "High Solar Best 

Onshore" scenario compared to a BAU target in the year 2026. Commenters also noted the 

results of the SunShot Vision Study which estimated a CO2 reduction of 8 percent (181 MMT) 

by 2030 and 28 percent (760 MMT) by 2050 compared to the reference scenario. 

Commenters noted that the SunShot Vision Study shows that solar energy can meet roughly 14 

percent of U.S. electricity demand by 2030 based on anticipated cost reductions with a projected 

installation of 302 GW of PV and 28 GW of concentrated solar power (CSP) by 2030. 

Commenters noted that the SunShot study's predictions are more than 7,000 percent more than 

what EPA has estimated for solar, even when the study found no adverse effects on grid 

reliability with the projected amount of solar generation on the grid in 2030. Commenters also 

cited the RE Futures study by NREL which showed a modelling scenario with renewables 

achieving between 30-90 percent of generation levels in 2030 and that the cost assumptions used 

to arrive at these levels are higher than current industry projections 

(http://www.nrel.gov/analysis/re_futures/). 

(2) Reasonable cost: Commenters stated that EPA's findings that renewables cost $10-$40/ton 

under the RPS approach and $30/MWh under the Alternative RE approach are a reasonable cost 

under both approaches. Commenters noted that EPA should recognize that solar costs are even 

lower than projected by the EPA and distributed PV must be included in Building Block 3 

because it is a reasonable cost emission reduction technology. Commenters also provided data 

showing solar costs falling in relation to other sources of energy, reinforcing EPA's position that 

solar energy measures are reasonable cost. 

(3) Promotion of technological development: Commenters noted that new solar technologies and 

efficiencies of solar panels are continually being developed, and that technological advances that 

reduce the costs of renewable energy generation will be important enablers of adoption. 

Commenters stated that during the past two decades, the efficiency of solar panels (solar energy 

converted into electricity) has risen to 15 percent, and have achieved as much as 44 percent in 

laboratory tests. Commenters also stated that the cost of solar cells has already dropped from $8 

per watt of capacity in 1990 to less than 80 cents today. Commenters noted that further advances 

are underway, such as thin films (made from compounds like cadmium telluride, copper indium 

gallium arsenide, or amorphous silicon) for PV use which reduce the amount of material used in 

creating solar cells and can be "printed" on flexible surfaces. Commenters also noted that 

researchers are working with nanomaterials to create polymer films less than 100 nm thick that 

can replace bulky silicon cells and nanomaterial-based coatings which repel water and prevent 

dust and debris from settling onto the solar panels. 

(4) Impacts on electric system: Commenters noted that utilities and policymakers are already 

addressing the changes to grid operations presented by increased renewable penetration, but 

stated that this can be done economically, if supported through appropriate policies, pricing 

options, and program offerings. Commenters recommended EPA review the paper 'Teaching the 

Duck to Fly' published by the Regulatory Assistance Project for a discussion of strategies to 

address the changes to grid operations presented by renewables. Commenters also noted that 
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some stakeholders have expressed concerns that solar and wind energy can increase costs and 

energy system emissions due to an increased need to cycle conventional power plants in response 

to variable renewable output but that such claims have been proven to be overstated, and could 

largely be avoided through a balanced portfolio of complementary solar, wind and other clean 

energy resources. Commenters stated that the SunShot Vision Study, the Renewable Energy 

Futures Study, the Western Wind and Solar Integration Study, the forthcoming Wind Vision 

Study (all NREL), the Minnesota Renewable Energy Integration and Transmission Study, and 

the PJM Renewable Integration Study (GE) show that renewables, including solar, can be 

integrated at high levels without significant issue. Commenters additionally noted 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 since 

solar installed on-site does not experience transmission and distribution system losses, which can 

be as high as 7 percent on a utility distribution system and up to 20 percent at the time of system 

peak. 

Comment 16: Commenters noted that solar energy has many merits and should be included as a 

compliance option in Building Block 3. 

Response 16: See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that solar energy systems in the U.S. are expected to generate more than 

20,000 gigawatt hours (GWh) in 2014 and with one GWh of solar generation eliminating 690 

metric tons of CO2 emissions, solar generation can be expected to avoid 13.8 million metric tons 

of CO2 emissions in 2014. Commenters noted that these emission reductions from solar 

deployment are expected to grow as evidenced in 6.8 GW of new solar capacity coming online in 

2014. 

Commenters noted that after 30 years of energy technology innovation in the PV components 

sector the price has gone down 99 percent and more recently, solar PV systems went down by 

almost 15% just from 2012 to 2013. Commenters stated that these price drops in solar 

components have led to a dramatic growth in the sector. 

Commenters noted that solar energy can provide benefits to states by creating jobs, increasing 

the state's economic output, increasing the state's tax revenues, improving environmental 

benefits, and saving millions of gallons of water. 

Commenters stated that solar energy emits zero pounds of greenhouse gas (GHG) emissions 

while generating affordable and reliable energy, avoids a number of costs associated with fossil 

fuel resources, and enjoys widespread bi-partisan support from policymakers and the general 

public throughout the United States. 

Commenters stated that solar energy costs are getting to the point where potentially by the end of 

this decade solar PV could be competitive with gas-fired generation on a total present value of 
696 

revenue requirements basis at their facility and that adding a moderate quantity of large-scale 

solar PV generation to their system in the near future is likely going to be a viable and costeffective resource option that also contributes to lower state-wide emissions. 

Commenters noted that solar, when installed on rooftops, has no land use impacts and reduces 

water consumption from the electricity generation is displaces. 

Commenters stated that eligible programs should include local and municipal programs to 

incentivize the generation and use of clean energy, such as solar. 

Commenters stated that Solar power has grown very quickly in recent years, and solar capacity 

will continue to increase in coming years. Commenters also noted that even though solar does 

not replace fossil-fuel generation at a 1:1 ratio, it does strongly contribute to a decrease in use 

of fossil-fuels. Commenters asserted that solar measures promote technological development, as 

new solar technologies and efficiencies of solar panels are being continually 

developed. Commenters explained photovoltaic devices and how they generate electricity 

directly from sunlight. Commenters also described their application, distribution, and utility of 

photovoltaic technology. 

Comment 17: Commenters noted multiple constraints to implementing solar energy as a 

renewable energy resource. 

Response 17: See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that solar power has two inherent, uncontrollable attributes: variability in 

output and uncertainty regarding the magnitude and timing of output. Commenters argued that as 

a result of this variability and uncertainty, solar cannot provide a continuous level of output on 

demand, it cannot be depended upon as firm capacity for the purposes of resource adequacy 

assessments, providing operating reserves and responding to local and regional contingency 

events and therefore will still require back up capacity at the power plant level. Commenters 

noted that demand for electricity does not always coincide with times when the sun is shining 

and that solar generation will be far off its peak production during peak demand in instances of 

thunderstorms during summer and winter months. 

Commenters also noted that demand for generation will become highly variable 

and unpredictable when solar generation becomes such a large component of the total mix. 

Commenters stated that the power demand will have wild fluctuations, adding giant stress to the 

electrical grid, and requiring rapid response from conventional generators as solar PV power can 

swing by up to 50% in as little as 30 seconds, and up to 70% in 2 minutes, continuously 

throughout a day. Commenters concluded that solar power may be beneficial on a small, 

residential scale, but widespread reliance on solar generation will have unintended consequences. 

Commenters noted that EPA did not model this result from wide-scale reliance on solar 

generation, and must take into account the efficiency penalties, and large increase in emissions 
697 

resulting from frequent load swings as well as the large increase in maintenance expenses of 

conventional plants to operate in such an unintended, high degrading state. 

Comment 18: Commenters agreed with the EPA that solar energy measures are part of the 

BSER, but stated concern that Building Block 3 as it is currently calculated is incomplete 

because it does not contain current solar market data on cost and penetration rates. 

Response 18: See section V.E of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that EPA's analysis also does not include distributed PV, which represents 

about 50% of the total U.S. solar market and therefore, as it is currently written, EPA's proposal 

does not accurately reflect the emissions reductions achievable through application of the BSER. 

Commenters noted that current solar capacity today is already far exceeding the estimates that 

EPA has used for 2030 state projections and encouraged EPA to recognize this tremendous 

growth in solar and to use an updated baseline year relative to when the final rule will be 

released. 

Comment 19: Commenters urged the EPA to consider the full potential of the wide variety of 

renewable resources including and especially offshore wind and distributed solar. 

Response 19: See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that utilizing solar, wind, and geothermal generation would outweigh the 

potential of fossil coal, oil, and natural gas without resorting to polluting forms of power such as 

biomass or nuclear. 

Commenters provided examples of wind and solar resources in Hawaii and Utah being 

successfully integrated into the grid to state that these resources can improve grid reliability and 

provide benefits to the existing system. Commenters noted that transmission infrastructure has 

been built over the years across the U.S. to move coal power to demand centers, and that if coal 

usage declines due to economics and the Clean Power Plan in such regions, this existing 

transmission capacity would be expected to become available for clean power resources. 

Comment 20: Commenters stated that EPA should clearly indicate that RE projects completed 

by organizations other than electric utilities should be able to qualify towards the requirements of 
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the CPP to encourage the creation of incentive programs and accelerate the installation of these 

technologies as long as the reductions from such projects are verifiable and measurable. 

Response 20: See section V.E of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the water sector has a growing portfolio of RE options available to it 

(e.g. solar, wind, and micro-hydro) and that wastewater utilities have multiple methods of 

recapturing the embedded energy in wastewater. Commenters stated that the biosolids and biogas 

produced through the wastewater treatment process can be used as renewable substitutes for 

fossil fuels and converted to electricity, and the heat from wastewater and the treatment 

processes may also be used to reduce dependence on fossil fuels. Commenters also stated that 

new methods of capturing the energy in wastewater continue to be explored and developed, 

including use of wastewater fuel cells to capture electricity created when microbes convert 

compounds of carbon and nitrogen. 

Comment 21: Commenters noted that Idaho's land mass is 63% controlled by U.S. federal 

agencies and that the federal government has been very difficult to support projects such as wind 

and solar on federally controlled lands as RE power generating efforts have been proposed. 

Commenters asked the EPA to work closely with federal partners to support opportunities for 

such project development on properties that have been proven compatible and strategically 

located. 

Response 21: The final building block 3 methodology does not rely on state-specific deployment 

estimates, but rather cost-effective RE at an interconnection level. The EPA addresses 

considerations related to the technical feasibility and associated grid integration costs of 

significant RE penetration in both the preamble (section V.E) and GHG Mitigation Measures 

TSD. 

Comment 22: Commenters noted that the EPA's Building Block 3 did not analyze the impacts 

the Waters of the U.S. ("WOTUS") rule could have on deployment and cost of renewable 

technologies. 

Response 22: The EPA addresses considerations related to the technical feasibility of significant 

RE penetration, including making appropriate land exclusion determinations, in both the 

preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that one of their subsidiaries conducted a siting evaluation for a new 

renewable energy facility that revealed significant impacts from the proposed WOTUS rule on 

the areas that would be considered jurisdictional due to the sweeping "neighboring" definition. 

Commenters noted that "the site contains 14 wetlands, seven of which were determined 
699 

jurisdictional under existing regulations by the U.S. Army Corps of Engineers ("USACE"). 

USACE asserted jurisdiction over those seven "adjacent" wetlands because they are 

hydrologically connected to relatively permanent water downstream of the site. The remaining 

wetlands were not jurisdictional because they were classified as isolated, with no hydrologic 

connection or significant nexus to relatively permanent water or traditional navigable waters." 

Commenters noted that if the proposed WOTUS rule was applied to the project site, all of the 

wetland areas would be jurisdictional and that if all 14 wetland areas were deemed jurisdictional, 

the site would not be a viable option for a new facility due to the significant challenges of 

obtaining a permit, site layout constraints, the costs of preparing a permit application, and 

mitigation costs. Commenters urged EPA to evaluate the impact of its other proposed and final 

regulatory actions on the deployment and cost of siting renewable technologies. 

Comment 23: Commenters stated that the EPA's rule should better evaluate the issues associated 

with managing the increased volume of waste generated from the increased use of renewable 

energy sources. 

Response 23: The EPA disagrees with this comment. It is not appropriate for the EPA to issue 

guidance on waste management issues for any technology as part of the final CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters provided a detailed discussion of such wastes which included silicon, PVC, and 

cadmium telluride toxicity risks in disposing of solar PV panels. 

Commenters noted that the Proposal relies heavily on increasing renewable sources of energy in 

lieu of fossil fuel-based sources, but fails to recognize the associated solid and hazardous waste 

management implications. Commenters noted that the Proposal contains some evaluations of 

these issues, but contains no analyses of the economic or legal implications of disposal issues 

associated with increased generation from renewable energy sources. Commenters stated that the 

Proposal fails to account for the costs to utilities specifically, and to society generally, of 

managing the increased volume of waste attributable to renewables as a result of this rule. 

Commenters stated that the Proposal fails to provide the right signals to the market that will 

encourage the mitigation of disposal issues associated with increased renewable resource use and 

that these failures threaten to induce a repeat of the experience the electronics industry faced 

with respect to the global e-waste disposal crisis.

Commenters stated that EPA, at a minimum, should provide guidance to states on these future 

waste management issues, as well as to utilities and others, who in their efforts to meet the 

Proposal's carbon reduction requirements, will be entering into long-term contracts for the 

purchase and/or use of renewables and should make clear that the Proposal's assumption that 

compliance with the proposed goals can be met through implementation of beyond-the-fenceline 

measures does not render utilities liable for waste disposal issues associated with such measures. 
700 

Comment 24: Commenters stated that the EPA did not consider difficulties states and utilities 

may face during the permitting process of renewable resources in the Proposed Rule. 

Response 24: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA has ignored the time needed to bring renewable energy 

facilities online and cited several hurdles that must be overcome such as: finding and negotiating 

the purchase of a suitable site, determining what if any transmission interconnection upgrades 

must be made, performing due diligence for environmental factors (e.g., wetlands, threatened or 

endangered species, and archaeological and cultural resources), and obtaining all required 

environmental and construction permits. Commenters noted wind and solar resources 

necessitate an additional comprehensive energy resource analysis which requires separate 

permitting of meteorological towers and a solar resource assessment or wind resource study to 

ensure that a viable energy resource exists. Commenters noted that such an analysis often 

requires years of wind and solar data and analyses to ensure proper valuation and seasonal 

differences will not affect contractual obligations, and that once established, land purchases 

and/or leases with surrounding landowners must be completed prior to the first wind turbine or 

solar array being constructed. Commenters stated that this timeline conflicts with EPA's claim 

that states can seamlessly escalate renewable generation only one and a half years after EPA 

finalizes its guidelines and likely prior to EPA's approval of state plans. 

Commenters stated that RE project development is not automatic and noted that they previously 

had local zoning issues when attempting to build a landfill methane to energy project which 

prevented them from building under their received air permit. Commenters noted that when they 

attempted to modify their air permit due to design changes required by local zoning, new air 

regulations triggered a lengthy modification process. Commenters stated that the increased time 

and costs on this project led to its cancellation three years later. Commenters noted that 

renewables are heavily dependent on resource location and that restricting the ability to develop 

renewable projects through zoning and environmental studies in areas with high wind force or 

sun hours significantly limits the overall amount of available RE and forces projects to areas 

which may not have the same resources. Commenters stated that placing the same capital into 

areas with fewer resources raises the average cost per MWh and overall cost of compliance with 

the CPP. Additionally, Commenters noted that any new renewable projects will not be able to 

move forward until interconnection approval occurs. Commenters stated that under a five year 

interconnection window, existing rules and regulations can change significantly which places 

additional uncertainty in the development process for renewables. 

Comment 25: Commenters stated that the EPA's use of renewable energy in Building Block 3 is 

highly problematic because renewable energy is not a dispatchable resource. 
701 

Response 25: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters further stated that renewable generation cannot be substituted for traditional 

dispatchable resources on a MW for MW basis and EPA's renewable generation in Building 

Block 3 effectively substitutes nondispatchable renewable resources for baseload coal units. 

Commenters stated that EPA is requiring states to significantly alter their respective generation 

mixes by incorporating substantial non-dispatchable resources, which creates significant 

concerns regarding the reliability of the electrical system. Commenters noted that EPA's faulty 

assumption that different generation resources can be substituted for each other will have 

perverse effects on states. Commenters noted that EPA's estimates for Texas would 

exceed Texas' total demand for electricity in the early morning in the spring and fall. 

Commenters noted that during these periods, the weather is cool and therefore electric load is 

low but wind generation is high which would force Texas to face the choice of shutting off new 

wind generators that were built to comply with EPA's proposal, which would be inefficient and 

uneconomic, or curtailing nuclear generation. Commenters noted that nuclear units were not 

designed to be curtailed and once shut down, can take 12 hours to ramp back up. Commenters 

stated that forcing nuclear units to reduce generation to accommodate all the wind that would be 

built under EPA's "best" system thus would create electricity shortages as the day warms and 

electric demand increases and wind power decreases, yet nuclear units would not be able to ramp 

up quickly enough to meet the increasing load. 

Commenters noted that while some level of renewable resource utilization is appropriate, 

renewable resources cannot provide baseload generation or reliability to the grid and cannot be 

the sole substitute for coal-fired units. 

Comment 26: Commenters had concerns with how the EPA has integrated and projected the 

displacement of fossil-fuel generation with incremental energy efficiency and renewable energy 

measures in Building Block 3. 

Response 26: The EPA addresses considerations related to the technical feasibility and 

associated grid integration costs of significant RE penetration in both the preamble (section V.E) 

and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the inclusion of RE in state goals also is unreasonable because EPA 

incorrectly assumes that RE displaces all affected fossil generation in proportion to that 

generation's relative emission contribution and that RE typically primarily displaces gas, as many 

coal plants do not provide load-following support. Commenters urged EPA to recognize that RE 

megawatts will not proportionally displace coal-fired generation since a megawatt of RE does 
702 

not equal a megawatt of replaced coal because RE has a much lower, and more variable, capacity 

factor. 

Commenters also stated that EPA mistakenly assumes that renewables and EE acquired in a state 

will directly reduce emissions from coal-fired EGUs in that state and noted that this assumption 

is unrealistic. Commenters provided an example as to how this assumption does not correlate to a 

real-life scenario: "adding renewable generation in one state in the WECC will impact markets 

across the entire region, from British Columbia to Arizona. Adding new renewable generation 

will, all else being equal, result in less generation dispatched somewhere in the WECC, which 

may or may not involve EGUs in the same state where the renewable generation was added. 

Exactly which units will be offset by the additional generation is extremely complicated. Factors 

affecting which units would be dispatched differently include hydro conditions and hydro 

flexibility, gas prices, planned and forced outages for generation and transmission, 

loads/temperatures across the entire region, transmission constraints, etc. Depending on seasons, 

the renewable generation may not affect any EGU in any state--at times, the additional 

renewable generation may end up displacing hydro generation rather than thermal generation." 

Commenters stated that this approach would further exacerbate issues that stakeholders have 

raised concerning stranded assets, remaining useful life, and grid reliability. Commenters noted 

that EPA has observed similar issues with the implementation of Building Block 2 as "states with 

large NGCC capacity and lower NGCC utilization must reduce the use of coal, oil, and gas steam 

EGUs to a significantly greater extent than states with lower NGCC capacity and/or higher 

NGCC utilization." 

Commenters noted that in the Proposed Rule, compliance actions taken under Building Block 3 

(and 4) did not displace fossil steam generation in determining a state's emission reduction goals. 

Commenters noted that this treatment would allow a state's utility to utilize existing generating 

resources to accommodate energy demand growth. Commenters stated that many 

smaller utilities, primarily munis and co-ops, often grow into generating assets, which results in 

increased utilization of the unit through the initial phase of its useful life. Commenters stated that

the proposal to treat emission reductions would not only increase the stringency of the BSER 

state emission reduction goals but also diminish the economic value of existing generating 

resources which the commenters strongly opposed. 

Comment 27: Commenters noted that the level of pipeline and transmission infrastructure 

required to be built to meet the EPA's goals in the Proposed Rule can present numerous 

challenges to states. 

Response 27: See sections V.A, V.D and V.E of the final rule preamble of the CPP for the 

EPA’s response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the Proposal fails to acknowledge the political challenges associated 

with adding or modifying transmission infrastructure to support the needed increase in 

renewables generation. Commenters noted that the act of modifying or adding transmission 
703 

infrastructure is carried out in the market place, not by RTOs, States, or FERC. Commenters also 

noted that States have authority over siting and permitting of generation and transmission 

facilities while State and regional institutions determine how to allocate costs, subject to FERC 

orders, which affects the market risks for a range of stakeholders, including project developers. 

Commenters stated that the result is a complex mix of legal issues and political dynamics that 

impact plans to deploy renewable electricity technologies. 

Commenters noted that right of way and easement processes are a significant variable in 

transmission infrastructure upgrades and are highly dependent on landowners and can also be 

influenced by public opinion. Commenters noted that just as permitting of renewable facilities 

encounters an increasing number of permits and approvals with long study periods, so too does 

the construction of power lines to move energy from renewable facilities to load centers. 

Commenters estimated a 10-15 year timeline for transmission construction and iterated that this 

country has never built this expected level of transmission and pipeline expansion and 

generation. 

Comment 28: Commenters noted that recent development in transmission line construction and 

best practices in renewable energy dispatch are helping to address any reliability concerns with 

respect to wind energy. 

Response 28: See sections V.D and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that although inadequate transmission capacity can hinder both new and 

existing wind projects, recent developments in transmission line expansion mitigate these 

concerns. Commenters noted that over 3,500 miles of transmission lines came online in 2013 

alone, with investor-owned utilities making transmission investments of $17.5 billion, and that 

there are currently 15,000 miles of transmission lines and over 170 projects in various stages of 

development in the U.S. worth more than $60 billion in potential investments. Commenters 

noted that EEI has estimated that 76 percent of this new transmission capacity "would--at least in 

part--support the integration of renewable energy." 

Comment 29: Commenters stated that the EPA's assumptions regarding the amount of 

renewable generation that can feasibly and at reasonable cost be added to Alabama's grid are not 

unreasonable, and given technological advances and price declines, EPA's assumptions are 

overly conservative. 

Response 29: See section V.E of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 
704 

Commenters noted that while Alabama may be behind other states when it comes to renewable 

penetration, its significant potential remains, and recent trends will allow it to capitalize on that 

potential going forward with substantial benefits to the state. 

Commenters noted the benefits of future wind deals for Alabama and stated that they will be 

even greater as a result of additional technological advances and continuing price declines. 

Commenters cited a report from the Lawrence Berkeley National Laboratory which stated that 

wind energy pricing is at an all-time low and commenters proceeded to detail the capital cost and 

installation cost declines for wind energy in recent years. Commenters also noted that 

transmission constraints that might have served as barriers to additional cost-effective wind deals 

are quickly being resolved, and provided details about the Plains & Eastern Clean Line 

Transmission Project which will have the capacity to deliver approximately 3,500 megawatts 

(MW) primarily from renewable energy generation facilities from the Oklahoma Panhandle 

region to load-serving entities in the Mid-South and Southeast. 

Commenters also noted that Alabama's technical potential for renewable generation greatly 

exceeds the state's total 2012 generation and its utility-scale solar potential alone is over 25 times

greater than current state generation. Commenters noted a study by Arizona State University 

which ranked Alabama 8th among states in terms of solar potential, while the DOE's SunShot 

Initiative assumes Alabama will have a cumulative installed solar PV capacity of 2.3 gigawatts 

(GW) by 2030. Commenters stated that the cost of building in-state solar generation will be 

lower than EPA's assumptions and that this pricing will make it more economical for Alabama's 

utilities to buy solar energy generated by independent producer rather than engage in self-build 

projects. 

Commenters stated that with benefits of this kind and degree, EPA is right to assume that 

Alabama's utilities will continue to invest in cost-effective renewable generation both within and 

outside of the state. However, commenters stated that Alabama would do well to remove legal 

and policy barriers that have prevented independent actors from contributing to the state's 

progress on the policy front. 

Comment 30: Commenters expressed contrasting views on the potential for implementing RE 

measures in Arkansas 

Response 30: Biomass is not considered part of BSER in this rule and therefore it is not included 

in goal setting or compliance evaluations. However, similar to other technologies outside of 

BSER, biomass may be considered as a part of a state’s plan to meet the emission guidelines. 

The EPA addresses considerations related to the technical feasibility and associated grid 

integration costs of significant RE penetration in both the preamble (section V.E) and GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that companies such as Clean Line Energy are preparing to deliver thousands 

of MW of wind energy from the Great Plains across the Midwest to the eastern states and that 
705 

Arkansas could be a significant recipient of this energy source if a planned 500 MW converter 

station is built in Central Arkansas. 

In contrast, commenters stated that Arkansas does not have the wind resource potential of the 

overwhelming majority of the five other states in the South Central region. Commenters stated 

that Arkansas does not have appreciable amount of solar resources using current technology, but 

does have the potential for developing great biomass resources although it is currently unclear 

whether an EGU firing biomass will be considered by the final rule to be CO2 neutral. 

Commenters noted that Arkansas does have existing hydropower facilities and some developable 

hydropower potential as well. 

Comment 31: Commenters noted that there are several options available to them in terms of 

purchasing renewable energy sources, which include installing PV or solar thermal facilities or 

wind energy. 

Response 31: See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that solar is most likely the lowest cost alternative for Arizona, as it has an 

approximate cost of $2000/kW and a capacity factor of 0.25. Commenters stated that the 

challenge with incorporating these renewable sources lies in their uncertain reliability. 

Commenters noted that they cannot count on renewables to "meet load" and must maintain 

sufficient backup power generation capacity to meet load should the renewables be off-line due 

to lack of sunlight, wind, or other reasons. 

Comment 32: Commenters noted that solar energy is the only renewable energy option for 

Florida, but reminded the EPA of the existing issues with solar implementation in the state. 

Response 32: The final building block 3 methodology does not rely on state-specific deployment 

estimates, but rather cost-effective RE at an interconnection level. The EPA addresses 

considerations related to the technical feasibility and availability of regional RE resources in 

both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that NREL has determined that there is no reliable on-shore wind in Florida 

and that the only source of renewable energy that is feasible in Florida is solar. Commenters 

noted the ways which they have promoted the addition of solar generation in their city, but noted 

that there are inherent challenges with solar generation that make a one to one replacement of 

fossil fuel generation problematic. Commenters noted that solar energy requires large amounts of 

land. Commenters stated that assuming 7.4 acres are needed for 1 MW of PV solar panels and an 

average PV capacity of factor of 20%, the required land use for Florida to meet its renewable 
706 

energy goal of 22,109,614 MWh would be approximately 93,385 acres. Commenters stated that 

EPA must consider the environmental impacts for clearing such a significant amount of land to 

meet the required level of renewable energy. Commenters stated that even if roof-top solar were 

installed to meet the goal in place of solar farms, the 500MW total capacity is infeasible. 

Commenters stated that because the potential for wind power in Florida is very limited, most of 

the remaining potential renewable energy studied was from solar power - much of that solar PV 

power. However, commenters stated that the still-considerable cost of solar PV compared with 

fossil-fueled electricity - particularly with the current low price and abundance of natural gas - 

limits the expansion of solar PV to levels that are much lower than those EPA is contemplating 

in the proposed guidelines. Commenters also noted that the capacity factor of solar PV is only 15 

to 20 percent, making it necessary to backup solar power with conventional generation resources 

for 80 to 85 percent of the time. 

Comment 33: Commenters stated that not only does the EPA fail to consider the age of 

Louisiana's non-hydro RE fleet, but it also fails to conduct any analysis of the economic viability 

of this type of generation. 

Response 33: See section V.E of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the majority of generation produced by Louisiana's biomass fleet comes 

from the burning of black liquor, a byproduct of pulp and paper mills, and that over 60 percent of 

Louisiana's biomass capacity is fueled by black liquor. Commenters noted that another 36 

percent is wood and waste wood and less than four percent comes from agricultural byproduct 

(such as bagasse from sugar cane production and rice hulls). Commenters stated that continued 

generation at these types biomass facilities is not a function of an RPS, but rather the economic 

viability of these industries and that as with other limited resources, increased generation will 

increase costs of the commodity in manufacturing and other processes. Commenters noted that 

even if Louisiana adopted an RPS, it is highly unlikely that these existing non-hydro RE 

generation facilities would see "new life" through re-powering or other marginal investments 

given their age, and the nature of the industries to which they are tied. Commenters concluded 

that any RE target developed for Louisiana needs to factor these unique agricultural sector 

factors, as well as the age of the existing base of RE generation in the state and that EPA's 

proposed targets do neither. 

Comment 34: Commenters stated that South Carolina has tremendous untapped cost-effective 

renewable capacity that can be tapped to help achieve the state emissions rate target and the 

state's renewable potential greatly exceeds the potential represented in Building Block 3. 

Response 34: See section V.E of the final rule preamble of the CPP for the EPA’s response to 

this comment. 
707 

The following are summaries of the specific public comments under this comment: 

Commenters noted, specifically, that the state's utility-scale solar potential is 19 GW for urban 

solar systems and 1,555 GW for rural solar farms while the state's rooftop solar technical 

potential is 12 GW. Commenters noted that under these potential estimates published by 

NREL, the rooftop solar alone could generate around 19 million MWh, or more than twice the 

new renewable generation envisioned in Building Block 3. 

Commenters stated that South Carolina's in-state potential is not limited to solar and noted that 

increased hub heights and other technological advances in wind turbines have helped increase 

South Carolina's inshore wind potential to over 5,000 MW. Commenters noted that the state's 

offshore wind potential at a 90 meter hub height is even greater at 130,244 MW, and coupled 

with solar, the state could far surpass the 9.6 million MWh included in Building Block 3 even if 

only a small fraction of the available renewable resource is developed. 

Commenters further noted that South Carolina could add significant levels of renewable energy 

without impacting grid reliability. Commenters cited a study by the Pacific Northwest National 

Laboratory noted that the electric system is ready to accommodate 6,800 MW of installed PV 

capacity when integrating up to 20% of total load from solar generation onto Duke Energy 

Carolinas. 

Comment 35: Commenters asserted that their investments into landfill gas and coal bed methane 

should be counted towards their renewable energy targets. Commenters said the state in 

which they operate has a Renewable Portfolio Standard and considers these two sources of 

energy to be renewable, however under the CPP these renewable sources are not allowed to be 

considered as helping their facilities reach target goals, both because most of the resources are 

located in other states and because of the EPA's determination that wind and solar would be the 

only renewables counted towards renewable energy before the CPP. 

Response 35: A description of the RE technologies that are not part of building block 3 but may 

be relied upon for compliance is available in section VIII discussion of non-BSER measures. 

A discussion regarding the use of some biomass feedstocks, including waste-to-energy, for 

compliance purposes can be found in VIII.I and Section VIII.K of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that there are differences as to what constitutes RE between states and the 

government; for example, the state of Indiana classifies biogenic methane as a renewable 

resource, but this resource is not specifically cited in the Clean Power Plan even though the 

EPA's own Landfill Methane Outreach Program assigns methane a global warming potential 

(GWP) factor of 25 compared to carbon dioxide. 
708 

Comment 36: Commenters stated that the Appalachian Hardwood Center at West Virginia 

University determined that remaining pulpwood from West Virginia timber harvesting could 

potentially support the hardwood needs of four 50 MW wood-fired power plants and at a 34 

percent capacity factor, these four plants would collectively generate on an annual basis 595,680 

MWh, or 5.8 percent of West Virginia's RE goal under the proposed regulation. 

Response 36: Biomass is not considered part of the best system of emission reduction in this 

rule. However, similar to other technologies outside of BSER, biomass may be considered as a 

part of a state’s plan to meet the emission guidelines. 

Not all forms of biomass are expected to be approvable. A state would propose qualifying 

biomass feedstocks or categories of biomass feedstocks in its plan and the proposed treatment of 

biogenic CO2 emissions, including measures to ensure emission reduction benefits. State plans 

must include analysis supporting how proposed qualifying feedstocks or feedstock categories are 

considered appropriate as a CO2 emission mitigation approach as well as the proposed treatment 

of biogenic CO2 emissions (i.e., the proposed level of biogenic CO2 emissions from use of the 

biomass feedstock that would not be counted when demonstrating compliance with an emission 

standard, or when demonstrating achievement of the CO2 emission performance rates or a state 

rate-based or mass-based CO2 emission goal) and quality control measures. The EPA would 

review the appropriateness and basis for such determinations and accounting measures in the 

course of its review of a state plan. 

For more detail on BSER, refer to section V of the preamble. 

For more detail on biomass, refer to section VIII.G of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that the serious obstacles to development of West Virginia's first wood-fired 

power plants are their ability to produce competitive electric rates and the identification of 

combined heat and power (CHP) opportunities. 

Comment 37: Commenters submitted pricing data for 5 different forms of biopower, including 

Levelized Cost of Energy. 

Response 37: Biomass is not considered part of the best system of emission reduction in this 

rule. However, similar to other technologies outside of BSER, biomass may be considered as a 

part of a state’s plan to meet the emission guidelines. 

Not all forms of biomass are expected to be approvable. A state would propose qualifying 

biomass feedstocks or categories of biomass feedstocks in its plan and the proposed treatment of 

biogenic CO2 emissions, including measures to ensure emission reduction benefits. State plans 

must include analysis supporting how proposed qualifying feedstocks or feedstock categories are 

considered appropriate as a CO2 emission mitigation approach as well as the proposed treatment 

of biogenic CO2 emissions (i.e., the proposed level of biogenic CO2 emissions from use of the 

biomass feedstock that would not be counted when demonstrating compliance with an emission 

standard, or when demonstrating achievement of the CO2 emission performance rates or a state 
709 

rate-based or mass-based CO2 emission goal) and quality control measures. The EPA would 

review the appropriateness and basis for such determinations and accounting measures in the 

course of its review of a state plan. 

For more detail on BSER, refer to section V of the preamble. 

For more detail on biomass, refer to section VIII.G of the preamble. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that from their data it is clear that diverse forms of biomass electricity are 

technically available at price ranges that includes most Avoided Costs. However, commenters 

also stated that they agree with the EPA that biomass should be evaluated against other 

alternative fuels. Commenters asserted that a side-by-side comparison shows that biomass power 

is on par in terms of cost, reliability, and dispatchability with natural gas fuel. 

Comment 38: Commenters stated that the EPA should include projections for new biomass 

electricity in the IPM, especially landfill gas, anaerobic digestion, and CHP. 

Response 38: These resources are not included in building block 3, but may qualify as nonBSER measures. Refer to section VIII for further detail. 

Comment 39: Commenters generally supported the inclusion of renewable energy as a "building 

block" to be used in the setting of each state's emission rate standard as part of the final rule for 

Section 111(d) and urged the EPA to strengthen its targets for reducing emissions. 

Response 39: See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA should factor in a greater potential for even greater renewable 

energy development in the west to develop targets that will achieve significantly greater 

reductions, as the west has "tremendous renewable energy potential, vast quantities of onshore 

wind exist across the west, particularly in the plains where onshore wind potential is unmatched 

in the nation." Commenters additionally stated that Colorado can outpace the assumed growth in 

RE generation EPA relied on to set its target and urged EPA to strengthen the standard for 

Colorado to reflect this. 

Commenters added that distributed generation, regardless of type, helps reduce emissions by 

bringing electricity on-site or near to demand, reducing transmission losses, as well as wear-andtear on utility equipment by mitigating peak demand. Commenters stated that, with emerging 

technologies, distributed generation can be coupled with storage, frequency response, and 

voltage support equipment to help meet peak evening demand, provide ancillary services, and 

allow even higher levels of renewable energy integration. 
710 

Commenters stated that Colorado's continuing progress since in incorporating renewables since 

2010 proves that it is entirely feasible for the country to meet the new clean power plan goals and 

that Colorado is a model to hold up to other states. 

Commenters urged EPA to adopt a better approach to estimating the growth potential for RE and 

adopt stronger benchmarks that more accurately reflect that potential. 

Commenters were encouraged by the flexibility offered in the proposal to ensure that renewable 

energy can and will be a significant component of the compliance strategy that states use to meet 

the standard. 

Commenters stated that the U.S. has the potential for replacing coal plant energy completely 

by 2050. Commenters cited a Stanford study, which is a state-by-state blueprint that would show 

how to both replace fossil fuel generation and improve the health and economic position of 

citizens. 

Comment 40: Support for development of RE on tribal lands. 

Response 40: The information provided in this comment was valuable in finalizing the building 

block 3 methodology, which is described in section V.E.6 of the preamble and in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

In comments on the Tribal & Territories Supplemental Proposal, commenters stated support for 

the development of sustainable, renewable energy (RE) development on Tribal lands both for its 

benefits to the environment and human health, and as a means of creating desirable jobs in 

Indian country. Commenters acknowledged the EPA's stated limitations of building blocks 1, 2, 

and 4, and was supportive of the proposal for the application of BB3 in Indian country. 

Comment 41: Commenters opposed including renewable energy in the BSER under Building 

Block 3. 

Response 41: Affected EGUS may procure qualifying incremental RE independent of a state 

plan for compliance. Refer to section VIII of the final preamble in support of the CPP for 

additional detail. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that unless EPA excludes "Building Block 3" from the goal-setting 

methodology or explicitly permits states to use renewable energy developed independent of a 

state plan for compliance, the Proposed Rule will delay of the construction of new renewable 

generation, which is contrary to EPA's stated goal of reducing CO2 emissions. Commenters 

noted that this delay is likely to increase the costs of undertaking renewable projects, and thus 

the overall cost of achieving compliance with the Proposed Rule, because companies will be 
711 

forced to compete for vendors in the few years between when a plan is approved and the 

compliance period. Commenters stated that EPA could have implemented an effective and far 

more cost-effective emission reduction program by setting goals based on controls at affected 

sources and allowing states to meet those goals through alternative means, like renewable energy 

resources. 

Commenters stated that even if permissible, it is not at all clear that it is feasible for states to 

meet the proposed required emissions reductions. Commenters stated that the other building 

blocks seem equally ambitious and fraught with uncertainty. Commenters further stated that 

Building Block 3 assumes, among other things, a significant acceleration in the growth of 

renewables despite their intermittency. 

Commenters stated that while increasing use of zero-emitting generation is a significant 

component our strategy to reduce the CO2 intensity of our energy production, it should not factor 

into the BSER determination for existing EGUs. Commenters noted that the BSER determination 

should be based on measures that can be achieved at the source--in this case, fossil-fired EGUs. 

Commenters stated that RE is only rarely achievable with a state-only implementation, and must 

be balanced over a regional plan, making it impossible to establish goals within the allotted 

timeframe imposed by the rule. 

Comment 42: Commenters asked how the EPA came up with the methodology for Building 

Block 3's approach and wanted to know what the methodology was for ensuring compliance with 

the Data Quality Act. 

Response 42: See section V.E of the final rule preamble of the CPP for a detailed description of 

the final building block 3 methodology. Compliance considerations related to incremental RE 

are described in section VIII of the final rule preamble of the CPP. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the reasonableness of EPA's assumptions underlying Building Block 3 

depend on: 1) the renewables market potential in each region; and 2) the ability of the state and 

the key participants in each state to realize this potential in a reasonable period of time. 

Commenters stated that the information needed to address the first issue includes: the availability 

of zero-carbon resource potential defined as renewables in a distinct region; the portion of zerocarbon resources defined as renewables that are included in setting the goal for each state; 

the portion of zero carbon resources defined as renewables that can be used for compliance (for 

example, biomass may be an issue); and the ability to convert this resource potential to electricity 

at a reasonable cost. To address the second issue, the commenters stated that EPA needs to 

address: the ability to build any new transmission to bring these qualifying renewables to market 

- in a timely way and at reasonable cost; the need for and ability to integrate this generally 

intermittent generation into a reliable electric system, particularly as the renewables percentage 

increases; the speed with which the state, the state's suppliers (primarily merchants and utilities), 

and the state's purchasers (primarily utilities) institute a procurement process that meets the 
712 

requirements of this building block; the relative consistency between the definition of qualifying 

renewables for states that have a renewable portfolio standard and the definition of renewable 

energy for this building block, and the ability to reconcile the two; and the need for enabling 

state legislation, and to work out whether this building block is enforceable at the federal or state 

level. 

Comment 43: Commenters requested comment as to which emission reduction measures not 

included in the four building blocks can be used to meet state targets. Commenters also wanted 

clarification as to which resources will be considered renewable. 

Response 43: See section VIII of the final rule preamble of the CPP for a description of the nonBSER measures available to affected EGUS in demonstrating emission performance standards. 

Comment 44: Commenters requested that all forms of zero-emitting generation, including 

baseload nuclear and hydropower generation receive equal credit in reaching state emissions 

targets, and should not be included in standard-setting. 

Response 44: Incremental hydropower and nuclear are available to be credited in an identical 

manner as zero-emitting RE technologies in the final rule. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA's proposal should be structured around the following two principles 

with respect to zero-emitting generation: 

1. Avoided emissions from nuclear, renewables or hydro should have the same 

compliance value as emission reductions; 

2. All zero-emission generation (nuclear, renewables, and hydro) should receive 

comparable treatment in that none of them should be included in the standardsetting process but can all be used to demonstrate compliance with the standard. 

In particular, commenters stated that nuclear power is presented with a major challenge as the 

proposal does not provide incentive for the preservation of a state's existing nuclear fleet, as EPA 

intended, because it has included a portion of that fleet in the state's reduction target. 

Comment 45: Commenters noted that the decline in U.S. reliance on its coal generation has 

coincided with rapid domestic expansion of zero- and lower-carbon generating unit development 

and electricity generation. Commenters then went on to give figures from the wind and solar 

industries, and also talked about increases in energy efficiency. 
713 

Response 45: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. 

Comment 46: Issues related to rapid construction of RE 

Response 46: The final building block 3 methodology does not rely on state-specific deployment 

estimates, but rather cost-effective RE at an interconnection level. The EPA addresses 

considerations related to the technical feasibility and availability of regional RE resources in 

both the preamble (section V.E) and GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that the EPA Clean Power Plan seems to force them to construct renewable 

capacity within their current state, because of the difficulties of coordinating credit for intra-state 

transmission. Commenters stated this could require the construction of capacity in locations that 

are not ideal either for financial reasons or for environmental reasons. Commenters worried that 

the construction of transmission lines from these new plants can cause non-air quality destruction 

to the local environment and harm ecosystems in ways that could be avoided if allowed to 

construct capacity in a better location. 

Comment 47: Commenters requested that Power Purchase Agreements be allowed to count 

towards renewable generating targets. Commenters claimed that even though they do not own 

the resources, they are purchasing, and therefore contributing, to the renewable capacity that 

resource provides. 

Response 47: The EPA agrees that ownership is not a necessary condition to procuring credit for 

incremental RE. See sections V.A and V.E of the final rule preamble of the CPP for the EPA’s 

response to this comment. 

Comment 48: Commenters stated they would like the EPA to credit them for their two 

hydroelectric plants which produce in total 12 MW of energy, offsetting 795,250 tons of CO2. 

Commenters felt that their company is being punished for their early action to generate 

renewable energy. 

Response 48: The BSER is forward-looking in identifying cost-effective opportunities for 

emission reductions from 2012; however, the cost and availability of these emission reduction 

opportunities is the result of many factors, including previous actions. The final building block 3 

methodology is described in detail in V.E.6 of the preamble and in the GHG Mitigation 

Measures TSD. 
714 

Comment 49: Commenters stated that the EPA's Proposed RPS Approach underestimates the 

amount of electricity than can be cost-effectively generated by renewables over the 2020-2030 

compliance period. 

Response 49: The EPA is not finalizing an approach that relies on state RPS requirements to set 

a regional target for RE. The final building block 3 methodology is described in detail in V.E.6 

of the preamble and in the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment:

Commenters stated that expected increases in fuel prices, such as those forecast in DOE's Annual 

Energy Outlook, should also be accounted for in EPA's analysis of the economics of renewable 

energy additions as well as the expected retirement of large amounts of inflexible generation and 

the addition of new flexible resources, such as new gas generation, demand response, and energy 

efficiency. Commenters asserted that it is unreasonable for EPA to estimate future renewable 

energy deployment patterns through the year 2030 based on the generation mix and power 

system that existed in 2012. 

Commenters stated that EPA's modeling approach should account for the changes in generation 

and capacity mix that are a likely outcome of the Rule and urged EPA to include an 

iterative modeling approach that includes the impact of increased renewable generation on 

decisions about generator additions, retirements, commitment, and dispatch. Commenters noted 

that if such analysis is beyond the scope of IPM's capabilities, EPA should rely on the results of 

similar analysis described above that has been conducted by DOE, NREL, and grid operators, 

and use those results as inputs into EPA's modeling. 

Comment 50: Commenters noted that IPM assumes a wind plant availability factor of 95%, 

though more recent data indicate that current wind plant availability is significantly higher. 

Response 50: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, particularly in the reevaluation of onshore wind cost and 

performance assumptions. The EPA updated performance assumptions to reflect the latest 

NREL mid-case estimates from the Annual Technology Baseline. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that a report by Sandia National Laboratory finds that a large sample of 

existing wind projects has an average availability factor of 97.6% and that others report that the 

availability for newly installed turbines is even higher and that improvements in availability are 

expected to continue. Commenters stated that EPA should use this value to best account for the 

expected availability of turbines that will be added in the future. Commenters added that when 

assessing the impact of the availability factor on wind plant generation, EPA should take into 

account that planned outages are typically scheduled for low wind periods to minimize the loss 

of generation and so that, if needed, cranes can be safely operated at the wind plant site. 
715 

Comment 51: Commenters asserted that IPM's modeling assumption of perfect foresight biases 

generation investment decisions against stably-priced renewable energy, as it fails to account for 

the uncertainty associated with other energy sources, particularly fuel prices. 

Response 51: The EPA disagrees with this comment and believes that IPM is an appropriate tool 

to evaluate the technical feasibility and cost-effectiveness of RE. For additional discussion on 

the role of IPM in building block 3, refer to the GHG Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that fossil generation in particular faces significant uncertainty about future 

fuel prices, as well as uncertainty about pending and future environmental regulations. 

Commenters added that many utilities and state regulators have publicly noted wind energy's 

value for reducing fuel price risk in explaining their reasons for investing in wind energy. 

Commenters stated that Lawrence Berkeley National Laboratory researchers were able to 

analyze market price signals to quantify the cost of gas fuel price risk at "$0.4-$0.8/MMBtu 

($0.6/MMBtu on average) [in 2003 dollars] for terms ranging from 2-10 years. At an aggressive 

heat rate of 7,000 Btu/kWh, this "premium" translates into 0.3-0.6/kWh (0.4/kWh on average) 

[in 2003 dollars]." Commenters noted the researcher's conclusion that "utilities and others that 

have relied on EIA reference case gas price forecasts in resource acquisition, modeling, and 

planning exercises over the past three years have likely produced results that are biased in favor 

of gas-fired generation relative to fixed-price renewable generation (again, presuming that longterm price stability is an important consideration)". Commenters stated that EPA should make a 

similar adjustment to the IPM resource cost calculations to appropriately account for the cost of 

fuel price risk and appropriately value wind generation's lack of fuel price risk. 

Commenters stated that EPA should ensure that the IPM turn-down limit assumptions properly 

account for the evolving capabilities of conventional generators to cycle and provide power 

system flexibility and ensure that the modeling captures solutions, like transmission upgrades or 

the conversion of conventional generators to synchronous condensers, that can be used to meet 

Area Protection Constraints. Commenters noted, for the turn-down limit assumptions, that new 

gas generators are demonstrating significantly enhanced flexibility, and future gas generators are 

expected to continue this trend. In addition, Commenters stated that many coal generators 

demonstrated their ability to move to a more flexible operating profile during 2012 when gas 

prices were anomalously low, causing some gas generators to be dispatched as baseload while 

coal generators were dispatched as mid-merit cycling units. Commenters noted, for the area 

protection constraints, that based on the demonstrated experience of successfully building 

transmission, adding Static VAR Compensators (SVCs), or converting existing conventional 

generators to synchronous condensers to provide local voltage support, allowing local reliability 

concerns to be met while allowing uneconomic generating resources to retire, EPA should also 

ensure that the modeling captures solutions that can be used to meet Area Protection Constraints, 

including the conversion of conventional generators to synchronous condensers as well as 

transmission upgrades and the addition of devices such as SVCs. 

Comment 52: New transmission construction in IPM models 
716 

Response 52: Total transfer capabilities between regions in IPM remain constant over time 

except to reflect transmission projects that are in advanced stages of development. The 

deployment of RE has associated transmission costs reflected in the steps to which the resource 

is assigned, where the cost reflects several considerations related to transmission, including 

distance to existing transmission and population density that would increase the cost of procuring 

transmission rights of way. The appropriateness of relying on IPM to evaluate the costeffectiveness and technical feasibility of incremental RE is discussed in detail in the GHG 

Mitigation Measures TSD. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that, while the IPM documentation appeared to indicate that new 

transmission construction is not factored into the IPM model runs, the impact of future 

transmission additions could be modeled by at least assuming that the rate of transmission build 

over the last several years persists, and that a better option would be to use the projections made 

in reports such as NERC's Long-Term Reliability Assessment, the Department of Energy's 

National Electric Transmission Congestion Study, and the Edison Electric Institute's (EEI) 

Transmission Projects: At a Glance. 

Commenters noted that the impact of future transmission additions could be modeled by at least 

assuming that the rate of transmission build over the last several years persists and that a better 

option would be to use the projections made in reports such as NERC's Long-Term Reliability 

Assessment, which found transmission additions during the next 10 years are expected to include 

7,400 circuit miles of lines currently under construction, 20,622 circuit miles of planned lines, 

and 7,360 miles of conceptual lines; the Department of Energy's National Electric Transmission 

Congestion Study, to be finalized in 2015; and the Edison Electric Institute's (EEI) Transmission 

Projects: At a Glance, which found EEI's members (investor-owned utilities) alone plan to spend 

$60 billion on new transmission infrastructure over the next ten years. Commenters stated that 

the IPM documentation appeared to indicate that new transmission construction is not factored 

into the IPM model runs, noting that "[d]ue to uncertainty surrounding the building of new 

transmission lines in the U.S., EPA Base Case v5.13 does not exercise IPM's capability to model 

the building of new transmission lines." Commenters stated that if new transmission build is 

allowed in the IPM modeling, the assumed cost of building new transmission should be validated 

against recent transmission cost data. 

Comment 53: Commenters stated that the reserve margin contribution of wind energy in 

ERCOT in the EPA's IPM modeling should be updated to account for updates ERCOT has made 

to its reserve calculation based on new data. 

Response 53: The EPA periodically conducts a comprehensive review of wind reserve margin 

contribution on a national basis. The recent updates that ERCOT adopted are noted but any 

updates to assumptions will be reserved for a future version of IPM to allow for a 

comprehensive, national-level review of reserve calculations. 

The following are summaries of the specific public comments under this comment: 
717 

Commenters noted that ERCOT has recently updated its wind reserve margin contribution from 

8.7% for all wind generation to a summer value of 12% for non-coastal wind resources, a winter 

value of 19% for non-coastal wind resources, a summer value of 56% for coastal (land-based but 

near the coast) wind resources, and a winter value of 36% for coastal resources. 

Comment 54: Commenters stated that EPA should review the wheeling charges described in 

Table 3.4 on pages xvii.6-12 of Chapter 3 of the IPM documentation, as many appear to be 

higher than current and future wheeling charges and that EPA should account for the fact that 

these charges are likely to significantly decrease in the future as inter-regional coordination on 

grid operations improve and new transmission infrastructure is completed. 

Response 54: The EPA periodically conducts a comprehensive review of interregional 

transmission assumptions in IPM. The EPA determined the current representation of wheeling 

charges to be reasonable but will further review those assumptions for the next version of IPM. 

The following are summaries of the specific public comments under this comment: 

Commenters specifically noted the following charges that they appear to be particularly high 

relative to current wheeling costs: 

1. The $6/MWh wheeling charge between both MIS_MAPP and MAP_WAUE and other 

parts of MISO. Commenters stated that the vast majority of these two areas, and the vast 

majority of the wind resources that have been or are under development in those areas, 

are in the MISO footprint and therefore are not subject to any wheeling charges. 

Commenters stated that the extent to which the ongoing integration of some of WAPA's 

Balancing Authorities into SPP will reduce wheeling charges and improve transfer limits 

into with SPP should also be evaluated and incorporated into the IPM modeling 

assumptions. 

2. $8/MWh between LADWP (WEC_LADW) and the Imperial Irrigation District 

(WECC_IID), and another $8/MWh between these two areas and Southern California 

Edison (WECC_SCE) and San Diego Gas and Electric (WEC_SDGE). Combined with 

the $8/MWh wheeling charge from WECC_AZ to WECC_IID, a total pancaked 

wheeling charge of $16/MWh could exist for paths moving electricity across the Imperial 

Irrigation District between Arizona and San Diego Gas and Electric, which appears to be 

excessive relative to current practice. 

3. Commenters stated that the assumed $8/MWh wheeling charges among most Western 

states are very high relative to reality. For example, the WECC_WY-WECC_UT 

wheeling charge of $8/MWh should be $0/MWh to reflect that most of both areas are 

within the footprint of PacifiCorp. Commenters stated that the same is true for the 

$8/MWh wheeling charge between WECC_NNV and WECC_PNW, and the charge 

between WECC_SNV and WECC_UT, as a large share of all of those areas fall within 

service territories that are now owned by PacifiCorp 
718 

4. Also of concern to Commenters were the total pancaked rates of $14/MWh for two 

wheeling charges moving electricity across S_D_REST between SPP and the TVA 

(S_C_TVA) and Southern Company (S_SOU) IPM regions. These costs seem higher 

than those that are imposed on existing transactions of wind generation between those 

regions. 

5. Commenters stated that EPA should account for how the $3/MWh wheeling charge 

across the MISO-PJM seam, and among the other RTOs, will be reduced due to increased 

inter-regional coordination in transmission scheduling over time. 

Comment 55: Commenters noted that the EIA data that the IPM documentation references as 

support for the 2.8% figure for transmission line losses appears to include lower-voltage 

distribution system losses, which account for the vast majority of total power system losses and 

should not be included in calculating the transmission losses between regions. 

Response 55: The EPA periodically conducts a comprehensive review of interregional 

transmission assumptions in IPM. The EPA determined the current representation to be 

reasonable but will review transmission line loss assumptions for the next version of IPM. 

The following are summaries of the specific public comments under this comment: 

Commenters noted, in contrast, PJM's data are based only on losses on the high-voltage 

transmission system, which are significantly less than 1% of total generation on average which is 

consistent with other report of transmission-system losses. Commenters stated that because interregional power transfers will typically occur on high-voltage transmission lines, this is a more 

appropriate loss factor for this calculation and, if possible, IPM's modeling of transmission losses 

should also be indexed for transmission line loading level and for winter and summer periods, to 

account for the fact that losses tend to be higher when transmission lines are heavily loaded and 

when ambient temperatures are higher. 

Comment 56: Commenters advocated for allowing privately-owned solar generation to be 

credited toward a utility’s or state’s compliance obligations and described the need for a 

methodology to quantify credits for solar generation. 

Response 56: Distributed solar technologies may be eligible for compliance as a non-BSER 

measure. Refer to Section VIII for additional details. 

The following are summaries of the specific public comments under this comment: 

Commenters noted that Michigan may experience rapid growth in the number of small solar 

projects where the generation is used by the customer behind the meter. Commenters said that 

the rule should include a methodology for counting behind-the-meter distributed generation if 

metering and monthly reporting requirements are onerous. Commenters said that Michigan's 

REC tracking and certification system, MIRECS, provides for aggregation of similar generators 
719 

into a single account to reduce administrative costs. Commenters stated annual generation is 

calculated using a formula and MIRECS includes both monthly generation and RE credits 

awarded. 

Commenters stated that distributed solar generation has the potential to be a significant source of 

renewable energy in Georgia by 2030, but given the time constraints of the CPP rule 

development, they have not had sufficient time to develop a methodology for tracking these 

projects and calculating carbon emission reductions associated with them. However, commenters 

thought that a suitable method can developed that would not only allow a state to take credit for 

emission reductions associated with these projects but also have the effect of promoting further 

development of distributed solar. Commenters stated that the final CPP rule should allow for 

development of a methodology for quantifying carbon reduction credits associated with 

distributed solar and incorporating those credits into the state plan at any time during the interim 

compliance period. 

Commenters said that the final rule should clarify that privately-owned, grid-connected solar will 

count towards a utility's or state's obligations, provided that it displaces CO2 emissions. 

Commenters stated that it should not matter whether the utility owns the units. Commenters 

concluded that customer-owned and third-party-owned solar should be strongly encouraged 

because experience to date indicates that privately-owned solar will spread fast if there are 

incentives to build it. 

Comment 57: The following comment refers to the EPA's push for wind and solar over other 

renewable energies. 

Response 57: The RE technologies that contribute to building block 3 are utility-scale, zeroemitting RE technologies with significant commercial deployment over the past five years. 

Other RE technologies, including certain types of biomass, may be procured as non-BSER 

measures by affected EGUs in demonstrating compliance with the relevant emission 

performance standards. There is no mismatch between building block 3 and compliance because 

all of the RE technologies that constitute the building block 3 generation level are fully 

creditable for compliance. Refer to section VIII for additional information on the role of RE in 

state plans. 

The following are summaries of the specific public comments under this comment: 

Commenters stated that EPA's proposal also arbitrarily prefers solar and wind generating sources 

over biomass. Commenters said EPA treats biomass as zero-carbon in setting states' goals but 

suggests it will not count as zero-carbon in compliance, and that this mismatch occurs as a result 

of EPA's method of calculating each state's renewable energy potential. Commenters said 

because EPA bases the level of renewable potential in each state on regional renewable energy 

standard policies, which at times include biomass, the calculation of state targets assumes 

biomass will count as zero-carbon renewable energy; however, EPA indicates that the Agency is 

preparing an updated accounting framework that it expects states to use when determining the 

extent to which biomass contributes to compliance, suggesting that not all biomass generation 

will be considered zero-carbon. Commenters said this would cause EPA to treat biomass 
720 

emissions differently when calculating a state's goal and when calculating state compliance with 

the goal. Commenters concluded that EPA has not justified such a distinction and, therefore, has 

acted in an arbitrary manner. 

Comment 58: Solar Energy Measures are Adequately Demonstrated Because They are Currently 

Being Used by Utilities and Other Owners of Affected EGUs. 

Response 58: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. Utility-scale solar PV and CSP directly contribute to building 

block 3 generation levels, while other solar technologies are available to affected EGUs as nonBSER measures in demonstrating compliance with the relevant emission performance standards. 

Distributed technologies, as a demand-side resource, present unique data and technical 

challenges (such as the role of evaluation, measurement and verification (EM&V) procedures in 

verifying their production, the diverse economic incentives of different parties involved in their 

deployment, and the variety of grid integration policies and conditions across potential 

deployment sites) that complicate identifying a technically feasible and cost-effective level of 

generation. Consequently, the EPA is, at this time, choosing not to include distributed 

technologies as part of the BSER (although, as explained in section VIII.K of the preamble, 

distributed RE technologies that meets eligibility criteria may be used for compliance). 

The following are summaries of the specific public comments under this comment:

Commenters stated, renewable energy is an emerging alternative to traditional electrical 

generation but it has reliability issues. Commenters said, another shortcoming of renewables is 

that it is unable to generate large amounts of baseload energy as those produced by traditional 

units. Commenters said, renewables can only function as a supplement when natural resources, 

such as wind and solar, are available to supply power. 

Commenters stated, solar energy measures have been adequately demonstrated because they are 

currently being used by owners of affected EGUs, including utilities and independent power 

producers, to shift generation away from fossil resources and diversify their energy mix with 

cleaner resources. Commenters said, for example, NRG, Inc., which owns a significant energy 

portfolio comprised of both fossil and renewable energy assets, recently announced that it 

intends to reduce its carbon emissions by 2050 through divestment of dirty fossil resources and 

investment in renewable resources such as wind and solar. 

Commenters stated, in many states some solar and wind technologies have already reached grid 

parity, making the utilities' choice to install or purchase renewable energy over fossil resources a 

decision based solely on price. Commenters said, as previously noted, utilities can now sign solar 

power purchase agreements for $50-$60/MWh. 

Commenters stated, further, in some cases solar is even competitive with base load generation. 

Commenters said, for example, a new conventional natural gas combined cycle power plant costs 

$66/MWh while a new conventional coal fired power plant costs $96/MWh. Commenters said, 
721 

in some cases the interest in solar generation has created a backlog of applications for 

interconnection; in others, utilities have combined solar procurement with their long term 

resource planning and procurement due to the competitive price and hedge value of solar relative 

to natural gas and other generation. 

Commenters stated, further, utilities have become heavily involved in the valuation and 

procurement of distributed PV through RPS policies, value of solar dockets, and direct 

ownership as the price of distributed PV drops and the benefits to both the grid and ratepayers is 

being realized. 

Commenters provided a discussion of solar procurement by entities that own or operate affected 

EGUs. Commenters said, each of the models discussed below shows that utility scale and 

distributed PV, as well as CSP and SHC, can be procured by utilities to reduce generation (and 

emissions) from affected units. 

1. Distributed PV is Adequately Demonstrated and Should be Included in Building Block 3 

Because Utilities and Other Owners of Affected EGUs Currently Procure Distributed PV 

Commenters stated, utilities and other entities that own affected EGUs are procuring distributed 

PV on an increasing basis. Commenters said, some of the most common examples are residential 

systems, commercial systems, community solar, and distributed solar RECs. Commenters 

discussed examples of utility solar procurement programs and activities. Commenters also 

provided URLs to many of the solar procurement programs and activities within the tables 

followed by another table showing solar on the grid within the service territory of each utility, as 

well as a table that shows current CSP projects. Finally, the commenters provided details on 

specific utility solar procurement programs. 

2. Solar Procurement Methods 

a. Solar Purchases 

Commenters stated, purchases of solar energy output can take on a number of different forms, 

but predominately are comprised of power purchase agreements (PPAs), feed-in tariffs (FITs), 

value of solar rates, and excess generation net metering contracts. Commenters said, all can be 

constructed to various contract lengths and amounts. Commenters listed examples, and provided 

a list of further examples and program descriptions. 

b. Solar Ownership 

Commenters stated, this refers to ownership and operation of solar electricity resources as 

enterprise assets by entities that own or operate affected EGUs. Commenters said, the most 

common evidentiary benefits of the ownership model are the ability to provide stable prices, 

large-scale market activity, and/or procurement risk mitigation. Commenters listed examples, 

and provided a list of further examples and program descriptions. 

c. Unregulated Activities 
722 

Commenters stated, this refers to business models adopted by unregulated entities, such as 

holding companies or unregulated subsidiaries of IOUs. Commenters said, these unregulated 

bodies principally participate in the solar markets either by developing and owning solar 

installations, by selling solar power output to load-serving utilities, or by making financial 

investments in the solar industry. Commenters listed examples, and provided a list of further 

examples and program descriptions. 

d. Community Solar 

Commenters stated, in its most basic form, a utility community solar program consists of one or 

more larger utility-managed photovoltaic projects from which customers can purchase a 

fractional share of the electricity output to virtually offset their electric bill as if the solar system 

were on their property, i.e. net metered. Commenters listed examples, and provided a list of 

further examples and program descriptions. 

e. Property Leasing 

Commenters stated, this topic captures programs where utilities or other entities have leased 

customer property for the installation of one or more solar projects. Commenters said, under this 

model, customers are typically compensated with a nominal annual lease payment in exchange 

for access to the property over a set contract term. Commenters listed examples, and provided a 

list of further examples and program descriptions. 

f. Requests for Proposals 

Commenters stated, utilities often issue requests for proposals as part of their efforts to increase 

solar or renewable energy more broadly within their service territories. Commenters said, a 

utility-issued RFP may either seek a specific single partner, or just as likely announce that a 

variety of projects are being sought such that, when combined, allow for a target amount of 

solar/renewable energy generation to be reached. Commenters listed examples, and provided a 

list of further examples and program descriptions. 

g. Merchant Solar Plants 

Commenters stated, a merchant plant is a power plant built for the purpose of selling directly to 

the wholesale electricity market, rather than under contract. Commenters said, while merchant 

plants are traditionally fossil plants, solar companies are now constructing merchant plants that 

will sell solar energy directly in wholesale spot markets. Commenters said, the off takers in these 

markets are generally utilities that may choose to purchase from a solar plant rather than a fossil 

plant, which allows utilities to reduce emissions from their overall energy mix. 

Commenters provided an example: 

First Solar Barilla PV Plant: Commenters said, First Solar has recently completed the initial 

18MW phase of the Barilla PV plant in Texas, the first plant in the state to operate without a 

power purchase agreement. Commenters said, this merchant solar plant, located in West Texas, 

will instead sell electricity on Texas' ERCOT grid spot market. 
723 

h. Solar REC Purchases 

Commenters stated, utilities around the country purchase solar RECs and distributed generation 

renewable energy credits (RECs) from solar systems to comply with state renewable portfolio 

standards. Commenters said, one of the primary motivations of such standards is to shift 

generation away from affected EGUs and towards lower emitting renewable energy resources. 

Commenters said, currently, 23 states and the District of Columbia have renewable portfolio 

standards that include solar and distributed solar carve-outs. Commenters said, under these 

requirements, utilities are required to purchase solar renewable energy credits (SRECs) from 

distributed solar systems that are then used to reduce the utility's overall reliance on carbon 

emitting resources. Commenters said, a utility will generally issue an RFP to purchase RECs 

when purchased in large quantities. Commenters said, the primary goals of state solar 

requirements are to reduce emissions, stimulate economic activity, hedge against fossil fuel 

prices, and improve grid resiliency and reliability through increased solar deployment. 

Commenters said, these goals are clearly aligned with the requirements for establishing the 

BSER as set forth under 111(d). Commenters said, for a full list of solar RPS requirements, see 

DSIRE Solar Policy Guide. 

Commenters provided examples: 

Nevada Energy Integrated Resource Plan: Commenters said, Nevada Energy IRP counts 

distributed PV towards the NV RPS, so distributed PV penetration is tracked closely and is 

included as part of the utilities' overall resource plan. 

New Jersey RPS section 14:8-2.1 Purpose and scope: 

Commenters said, the purpose and scope of the NJ RPS states: "(a) Each supplier/provider, as 

defined at N.J.A.C. 14:8-1.2, that sells electricity to retail customers in New Jersey, shall include 

in its electric energy portfolio electricity generated from renewable energy sources. This 

subchapter is designed to encourage the development of renewable sources of electricity and 

new, cleaner generation technology; minimize the environmental impact of air pollutant 

emissions from electric generation; reduce possible transport of emissions and minimize any 

adverse environmental impact from deregulation of energy generation; and support the reliability 

of the supply of electricity in New Jersey." 

New York RPS Objectives (Case 03-E-0188): 

Commenters said, the objective of the NY RPS states: "New York's Environment: improve New 

York's environment by reducing air emissions, including greenhouse gas emissions, and other 

adverse environmental impacts on New York State, including upon underserved communities, of 

electricity generation..." 

i. Utility Engagement in the Valuation of Distributed PV 

Commenters stated, as distributed PV generation becomes a larger portion of the energy mix, 

many utilities are working to properly value distributed PV generation. Commenters said, 

currently, there have been 15 value of solar studies or proceedings undertaken by states. 

Commenters said, these proceedings involve dozens of stakeholders engaging in a robust 
724 

analysis of the benefits and costs of solar to the utility, ratepayers, and the grid. Commenters 

said, in addition, there are active dockets in Louisiana, South Carolina, and New York evaluating 

the benefits and costs of distributed PV. 

Commenters stated, finally, the graph below shows methods that utilities have used to procure 

solar energy outside RPS requirements in the past 12 months (Nov. 2013-Nov. 2014). 

Commenters provided a map showing utility procurement outside the RPS: 3 GW in 12 months. 

Commenters stated, each of the models discussed above shows that utility scale and distributed 

PV, as well as CSP and SHC, can be procured to reduce generation (and emissions) from 

affected EGUs. 

Comment 59: Commenters stated that solar energy measures are adequately demonstrated 

Response 59: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. Utility-scale solar PV and CSP directly contribute to building 

block 3 generation levels, while other solar technologies are available to affected EGUs as nonBSER measures in demonstrating compliance with the relevant emission performance standards. 

The following are summaries of the specific public comments under this comment:

Commenters stated, the utilities that own the covered sources affected by the EPA proposed rule 

are already including solar measures as a way to comply with RPS policies, which are intended 

to diversify state energy portfolios and reduce carbon emissions. Commenters said, in many 

states solar technologies have reached grid parity, making the utilities choice to install or 

purchase solar energy rather than conventional generation resources based solely on price. 

Commenters said, in some cases the interest in solar generation has created a backlog of 

applications for interconnection; in others, utilities have combined solar procurement with their 

long term resource planning and procurement due to the competitive nature of solar relative to 

natural gas and other generation. 

Commenters stated, utilities are including solar measures through various approaches. 

Commenters said, for example, Colorado's largest utility, Xcel Energy, has installed 87 MW of 

utility-scale solar with an additional 170 MW planned. Commenters said, this includes solar 

projects which are being purchased for 25-year Power Purchase Agreements at rates competitive 

with the long-term forecast for natural gas-fired generation. Commenters said, through the 

Solar*Rewards program, more than 19,800 Colorado customers have installed PV systems, 

leading to more than 200 MW of distributed solar generation. 

Commenters stated, Clean Energy Collective, one of the pioneering solar garden developers 

based in Colorado, recently opened the 8th and 9th arrays in Colorado as part of Xcel Energy's 

Solar*Rewards Communities program. Commenters said, combined, CEC's power contribution 

to the Xcel Energy grid is over 4 megawatts. Commenters said, CEC now operates 16 

community solar projects in Colorado. 
725 

Commenters stated, other utilities also have ambitious solar energy programs. Commenters said, 

the city of Fort Collins municipal utility, for example, chose 20 projects totally 4.3 MW last 

winter as part of its Fort Collins Solar Power Purchase Program (SP3). Commenters said, the 

objective of the SP3 is to procure new locally installed solar capacity to help meet the 

community's renewable energy commitments under the Colorado Renewable Energy Standard 

(RES). Commenters said, these projects will be located on a commercial customer's property 

with Utilities purchasing the electric output of the project under an extended contract. 

Commenters said, Fort Collins also has a small PV Rebate program which is so popular that the 

2014 program "sold out'' in the spring when all 2014 rebate funds were reserved for 72 

residential rebate requests. The utility is also selling shares in a Community Solar Garden. 

Commenters stated, Colorado Springs Utilities, another large municipal utility, has also found 

solar gardens popular. Commenters said, before construction began this year, SunShare 

LLC sold all of the power that will be generated by a 2 MW solar garden. Commenters said, the 

Pikes Peak Library District, Security Water District and the University of Colorado at Colorado 

Springs joined the city of Manitou Springs and hundreds of individual consumers bought the 

power. 

Commenters stated, numerous Rural Electric Associations (REAS) in Colorado also have solar 

programs. Commenters said, several offer rebates for rooftop systems. Commenters said, others 

have found success with community solar projects, including Holy Cross Energy, San Miguel 

Power Association and United Power. 

Commenters stated, these examples of utility ownership of solar highlight the fact that solar is 

adequately demonstrated, and that utilities consider solar projects to be, not only a part of the 

best system of emission reduction, but part of prudent resource planning. 

Comment 60: Solar Energy Measures are Adequately Demonstrated 

Response 60: The resources and data provided in this comment were valuable in finalizing the 

building block 3 methodology, which is described in section V.E.6 of the preamble and in the 

GHG Mitigation Measures TSD. Utility-scale solar PV and CSP directly contribute to building 

block 3 generation levels, while other solar technologies are available to affected EGUs as nonBSER measures in demonstrating compliance with the relevant emission performance standards. 

The following are summaries of the specific public comments under this comment: 

Commenters stated, the EPA must include all forms of solar, including distributed solar, in its 

final determination of the BSER. Commenters said, distributed solar, utility solar and CSP are all 

a system of emissions reduction that is technically feasible, is implemented at reasonable cost, is 

driving solar innovation, and does not negatively impact the electric system. Commenters said, 

further, these forms of solar energy are adequately demonstrated to reduce emissions from 

covered sources. Commenters said, for these reasons, EPA must include solar as part of building 

block 3 in its determination of the best system of emissions reduction. 
726 

Commenters stated, the utilities that own the covered sources affected by the EPA proposed rule 

are already including solar measures as a way to comply with RPS policies, which are intended 

to diversify state energy portfolios and reduce carbon emissions. Commenters said, in many 

states solar technologies have reached grid parity, making the utilities' choice to install or 

purchase solar energy rather than conventional generation resources based solely on price. 

Commenters stated that in some cases the interest in solar generation has created a backlog of 

applications for interconnection; in others, utilities have combined solar procurement with their 

long term resource planning and procurement due to the competitive nature of solar relative to 

natural gas and other generation. 

Commenters stated, utilities are including solar measures through various approaches [and 

provided two examples, SMECO Solar, and Constellation Energy Group]. Commenters said, 

these examples of utility ownership of solar highlight the fact that solar is adequately 

demonstrated, and that utilities consider solar projects to be a part of the best system of emission 

reduction. 

Comment 61: Commenters stated that EPA's preamble and its interpretation of "affected entity" 

in the preamble to the Rule is invalid, explaining that the proposed Rule instructs that state plans 

must achieve the "identified performance level . . . in Table I . . . for affected entities in [each] 

state." 79 Fed. Reg. at 34951 (emphasis added). Commenters noted, "Affected entities," in turn, 

is defined as "[a]n affected EGU, or another entity with obligations under this subpart for the 

purpose of meeting the emissions performance goal requirements in these emission guidelines." 

Commenters said nuclear plants play a critical role in displacing carbon-intensive energy 

sources, thereby assisting states in "meeting the[ir] emissions performance goal." Therefore, 

commenters noted that nuclear plants fit squarely within the definition of "affected entity." 

Commenters said, as an "affected entity," by the terms of the Rule, states can rely on nuclear 

plants to achieve their "identified performance level . . . in Table I." However, commenters 

believed EPA's preamble attempts to re-interpret the proposed Rule in a manner inconsistent 

with the clear text of the proposed Rule, which is impermissible. See Christensen v. Harris Cnty., 

529 U.S. 576, 588 (2000). Specifically, commenters stated that the preamble attempts to 

artificially limit the definition of "affected entity" from an "entity with obligations . . . for . . . 

meeting the emissions performance goal requirements[,]" to one in which EPA limits what 

entities states can use to meet their emission guidelines, such as only allowing 6% of generation 

from nuclear plants to be included. Commenters stated that this limiting construction is contrary 

to the broad definition of "affected entity" in the proposed Rule and is therefore impermissible. 

Response 61: EPA has decided not to include this provision in the final CPP. New, existing and 

under-construction nuclear are not affected EGUs, nor are they included in the BSER. 

Generation from new or uprated nuclear capacity may be used to adjust the rate of an affected 

EGU.